BusinessWeek interview with Shulman about Ampex/Kodak

Posted on May 01, 2008 in Generic pharmaceuticals

Interview with Ron E. Shulman at businessweek.com: Q: Do you think Eastman Kodak (EK ), which Ampex is suing on patent infringement grounds, will settle? A: Kodak is going to fight fiercely. If it has a future, it is in digital photography. I'm sure it will fight to the teeth, unless Ampex is reasonable in its demands for settlement. Q: How do you determine royalties for a judgment? A: The law lists a bunch of criteria for determining royalties. It is based on a "hypothetical deal" standard. In the electronics area, it's rare that you get more than a 10% royalty. Typically, it's 1% or 2% of sales. You should assume they are going after a royalty of 1% to 5%. But it depends on what you decide is the royalty base. Is it the whole price, or part of the price? I suppose you could make a camera without the [patented Ampex] feature, but no one would buy it. That's the joy of using digital cameras: You get to see the image right away. Royalties may also include what are known as "convoid" sales. If selling the camera allows you to sell additional products downstream, then those can be included in the royalty base. That will certainly be explored by the plaintiff. Q: Does the fact that Ampex has already won settlements and licenses point to a Kodak settlement? A: Ampex will try and rely on that. [The past settlement history] is pretty persuasive stuff. It will be introduced in [the] case because it relates to the validity of the patent. It is some evidence of commercial success. And commercial success would be evidence of nonobviousness. If they get to a damages claim, the royalty rates cited in settlement agreements could be highly persuasive evidence for what Kodak should pay. [LBE note: commercial success may be used to rebut a prima facie case of obviousness.] Q: In Silicon Valley, how is Ampex viewed these days? A: Ampex is basically a research shop. Ampex is viewed as a slightly more civilized version of a patent terrorist. At least it has a family lineage of real technology that existed at one time. People respected Ampex. It did real stuff. [Now] what it is doing is no different from what other patent trolls do. Q: Is so-called patent trolling on the rise? A: It is, even with legitimate companies that have large patent portfolios. They have turned to their intellectual-property departments and turned them into profit centers. Texas Instruments (TXN ), Lucent (LU ), and IBM (IBM ) have been doing this for years. Plus, the damage awards are huge. [The practice] has grown more vigorously over the past 10 years. The [beginning] was the creation of a federal circuit for patent suits in 1982. Patents are a powerful economic weapon. People sue left and right. The outgrowth of that is patent holding companies. They're like venture funds. They go around holding people up for lots of money. Q: What is the cost to society? A: Most people suing didn't do any of the invention. Money isn't going to the inventors. There's no socially useful purpose. It's a waste of resources. Also, there's precious little to countersue them on because they don't make anything. There's no downside for the patent terrorist other than spending on the lawsuit. [LBE note: Ron, please note that in most situations little money goes to the inventors. Check out the patent awards procedure in places like IBM, Kodak, Exxon. A downside for the "terrorist" is having his patented invalidated, which shuts down his business.] Q: Is there any way to curtail the lawsuits? A: Not without legislation. That would be very difficult to do. Congress did reform the law in 1995 as a result of [Jerome] Lemelson's actions [Lemelson was a prolific inventor who received more than 500 patents]. He did nothing but file patent applications. He has the largest number of issued patents. He acquired patents in key areas of technology such as bar codes. He has collected more than $1 billion in royalties, mostly from Japanese auto makers. As a result, Congress changed the patent expiration dates from 20 years from filing, to 17 years from granting. Q: Who else could Ampex sue? A: The major digital photography companies will be targeted. Computer companies could be targeted. I can't say for sure since I haven't reviewed the patent. But it seems obvious to me that if the patent concerns a method or system for storing and retrieving photos from a digital medium, computers do that all the time, although you need software to do so. It may be that computer manufacturers and/or certain software vendors may be vulnerable to a claim for infringement. [Ampex] can go after Motorola (MOT ), Nokia (NOK ), Samsung and all those guys. It's hard to sell a phone that doesn't have a camera

Tags: patent, ampex, kodak, royalty, settlement

Supreme Court heard oral arguments in MedImmune v. Genetech

Posted on April 19, 2008 in Diabetes erectile dysfunction

Oral arguments in MedImmune v. Genentech were heard on October 4. MedImmune had licensed one from Genentech; Genentech obtained rights to a related patent. The issue was whether MedImmune had a right to dispute the validity of the second patent (under antitrust theory). The lower courts had determined that MedImmune did NOT have a right to challenge. Petitioner MedImmune argued against the CAFC's rule that a patent licensee cannot bring a declaratory judgment action questioning the validity of the licensed patent as long as the licensee has not breached the license agreement. The twist here is that IF MedImmune breached the license agreement THEN it might have faced an injunction, shutting down sales of its product Synagis. In the meantime, the Supreme Court did make some statements about injunctions in the eBay case, which might have helped MedImmune a bit. MedImmune also brings up Lear v. Adkins, 395 U.S. 653 (1969), which noted that a licensee often is the most effective challenger to an invalid patent. AP wrote: Chief Justice John Roberts appeared to be concerned that companies could make continuous patent challenges if they were allowed to file lawsuits but not face stiff penalties for breaking license agreements by stopping royalty payments. "How do you ever end these things? Let's say they have this dispute, they bring it to litigation, and they settle it," he said. "Instead of paying a license fee of 50 cents, it's going to be 40 cents, and we'll go on. Then they can sue again, I take it." Patent attorneys said if the case is decided in MedImmune's favor, it could lead to a flood of patent lawsuits because companies could challenge patents without risking legal penalties. But Washington attorney Harold C. Wegner, who watched Wednesday's arguments, said Roberts did not seem convinced by MedImmune's case. "The chief justice was very troubled by the idea," Wegner said. "What would stop the licensees from suing again and again?" generic cialis cheap viagra buy cheap cialis cialis

Tags: medimmune, patent, licensee, license, cialis

Promises of patent royalties from Proposition 71?

Posted on April 12, 2008 in Diabetes erectile dysfunction

Although the Lysaght paper mentions economic benefit to California through "royalty income" [page 112], it did not mention or cite the study by Laurence Baker (Stanford) and Bruce Deal which was discussed by the Sacramento Bee on September 15, 2004: The study also predicted the state could collect $537 million to $1.1 billion from patents and royalties resulting from successful research funded by the initiative. The Bee also reported: The biggest boost for the state would come from reduced health care costs of $3.4 billion to $6.9 billion annually, according to the study. Laurence Baker, a Stanford University health research and policy professor, and Bruce Deal, managing principal of the Analysis Group Inc., conducted the study and said those savings would come from treatments or cures for just six of the 70 diseases and conditions scientists believe stem cell research could help alleviate. The diseases they considered are among the most common and most likely to generate big savings: strokes, insulin-dependent diabetes, Parkinson's disease, Alzheimer's, spinal cord injuries and heart attacks. Opponents say such claims are highly speculative because embryonic stem cell research has yet to produce any treatments or cures. As IPBiz reported previously, Laurence Baker was present at the Princeton hosted symposium on the policy and economic implications of state-funded stem cell research. IPBiz noted: Baker and Deal's section begins at page 51. At page 70, there is an erroneous mention of the "17 year life" of a patent. Patent royalty revenue comes up on pages 70 and 71. IPBiz now queries: how "expert" are those who don't even know what the lifetime of a US patent is? cheap cialis Generic Viagra buy cilais cheap viagra

Tags: research, patent, baker, study, mention

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