Attorney Chris Falkowski shares his perspectives on the important issues surrounding patent law, and notes that “there has been more action in the patent law field in the last 15 years, than the previous 50 years combined.”

Attorney Chris Falkowski

Falkowski worked as a computer programmer/application developer after graduating from Northwestern University.   Like many patent lawyers, he obtained an undergraduate degree in engineering.  Prior to graduating from University of Michigan Law School, he worked as a software engineer.  Early on in his legal career, Falkowski’s client base was largely comprised of technology start-up ventures.  He founded his own firm, known as Falkowski PLLC, in 2005 to have greater flexibility in serving and expanding his base of start-up clients.

Falkowski notes that “the technology sector of the economy is an exciting place to be.  Companies are created, rise, and in some instances, fall very quickly.  Companies like Facebook and Google arise from nothing to become some of the strongest companies on the globe.  A company like Apple has gone through dramatic cycles of ascendancy and descendancy.  Technology provides people and organizations with new ways to interact and new ways take action.   It is a challenging context for lawyers and the law to keep up with.”

In recent years, the U.S. Supreme Court has increasingly heard more patent cases.  Falkowski notes 3 significant rulings that shaped how patent law is practiced and followed today:

1.  Transition from first to invent to first to file

One of the big changes with the recently enacted America Invents Act is that the U.S. is joining the rest of the world in adopting a “first to file” patent system.  This makes it more important than ever that clients make a decision as early as possible as to whether or not to pursue patent protection.

2.    The scope of what can be patented

In Bilski v. Kappos, the United States Supreme Court grappled with the issue of what is potentially patentable subject matter, and what types of inventions are not ripe for patenting.  While the decision affirmed the judgment of the Federal Circuit, the case did little to clarify this issue.

3.    Obviousness

One of the most difficult factors of patentability to assess is the issue of non-obviousness.  In KSR v. Teleflex, the U.S. Supreme Court grappled with the question of what constitutes obviousness in the context of patent law.  This is an ongoing challenge to those who deal with patents on a daily basis.  Falkowski notes that the test for obviousness is somewhat similar to the definition of “pornography”, as set forth by Justice Stewart in the case of Jacobellis –vs- Ohio, where he wrote “I know it when I see it”.

Falkowski believes that business owners should consider these three things when they are trying to create and protect intellectual property through a patent:

1. Prioritize

Resources are always limited.  Intellectual property assets are like any other kind of asset.  Invest where you can get the most value for your dollar.

2. Create a Process

If your business results in the conception of potentially patentable inventions, you should develop a process to solicit those ideas and evaluate which technologies, if any, are worth pursuing at the patent office.  You can’t prioritize your investments if you don’t have a process for evaluating potential assets.

3. Integrate IP into the business

There are many ways in which a patent can assist a business owner.  Patents can help you market your business.  They can assist your credibility in dealing with vendors and customers.  Many small businesses underutilize their patents.  Every asset of a business should be working on behalf of the business.

In Falkowski’s experience, most people view patent searches and examinations as a simple process, resulting in a “Yes” or “No” decision.  ”In reality, the process of obtaining a patent is complex, iterative, and dynamic.  In some ways it resembles a contract negotiation.  In other ways it resembles a quasi-judicial proceeding.  Despite such complexities, some people mistakenly think of patent prosecution (the process of prosecuting a patent application at the USPTO) as analogous to obtaining a driver’s license where the outcome is either success or failure, and there is nothing in between those two outcomes.”

The potential outcomes with respect to each claim in a patent application include:

1)  The Claim is Rejected:

When this occurs, the applicant can respond by doing one of five things:

a.  Arguing that the examiner is incorrect in terms of reasoning or the underlying facts;

b.  Amending the claim so that it isn’t rejected;

c.  Cancel the claim because other claims have been allowed;

d.  Appeal the rejection of the claim;

e.  Abandon the particular claim.

2)  The claim is approved: 

This means that the Examiner acknowledges that the specific claim is allowable because it is both novel and non-obvious.

A patent application has one or more claims.  A patent cannot issue until all of the pending claims have been deemed allowable.  In many instances, some claims will be approved and other claims will be rejected.

“The examination process can resemble a negotiation in that the applicant may propose limitations on the scope of the claims in order to obtain the agreement of the Examiner that the claim would then be aproved.  Like any negotiation, it is easier to resolve the process more quickly if you are willing to negotiate more of your position away. Conversely, if you want to fight hard to get as much as you can, the process can involve substantially more time,” says Falkowski.

Falkowski notes that while filing a patent doesn’t require the applicant to retain an attorney, the nuances of patent law are such that most people would be well advised to retain an attorney or agent to prepare the application on their behalf.  ”Of the three primary types of intellectual property rights (patents, trademarks, and copyrights), patents are the most complex.  If you make a mistake in filing your own patent application, it is likely that the mistake will not become apparent until years later when the USPTO points out the mistake to you, and at that point, it is unlikely that any patent attorney will be able to fix the problem.”

Many inventors wait too long before meeting with an attorney, says Falkowski.  ”Filing a patent is inherently a race against the clock, because as time passes the scope of the prior art increases.  What is “novel and non-obvious“today is old news tomorrow.  One of the reasons why patents (and patent lawyers) sometime get bad press is that it is easy for a patent to look obvious in hindsight.  The race against the clock is even more important given the recently enacted America Invents Act.  It is very easy for an inventor to preclude the future possibility of obtaining a patent through their own actions in publicizing the invention.”

There are essentially three types of patents:

1.    Design patents

These involve the aesthetic non-functional aspects of a product.

2.    Utility patents

These are what most people think of, when they think of patents.  Utility patents involve functional (i.e. non-abstract) inventions such as a product, process, or an improvement to a product or process.

3.    Plant Patents

These apply to asexually reproducing plants.

In addition to these three types of patents, it is important for many inventors to familiarize themselves with what is called a provisional patent application.  A provisional patent application never actually becomes an issued patent, but it is a temporary placeholder application that provides the inventor with their “place in line” at the USPTO.  A provisional application is less expensive than a utility application, so proceeding with a provisional patent application is a way for the inventor to buy some time to further develop their technology and/or determine whether or not a market exists for their invention.  (Usually the inventor has to file a patent application within 1 year of the provisional patent application.  If they don’t do so, they lose their place in line and risk someone else will beat them to it.)

Falkowski notes that there are a lot of common pitfalls for the unwary lay person, when it comes to intellectual property rights in general and patents in particular.  Some examples include:

1. Magnitude of Innovation

This involves thinking that to be patented, an invention needs to be revolutionary like Edison’s light bulb or Gutenberg’s printing press.    In truth, most patents represent incremental advances in technology.

2. Patent Scope

The proper scope of a patent can only be determined by reviewing and analyzing the claims of the patent.  Many people unfamiliar with how patents work will focus on the drawings of the patent, or some text outside of the claims of the patent, and draw incorrect conclusions as to the scope of the patent.

3. Quality over Quantity

Just as one 10 acre plot of land can vary in value from another 10 acre plot of land, patents can vary widely in value.  It is often far better to hold one patent with broad claims covering a large product market that can survive challenges to invalidity than it is to hold numerous patents of relatively narrow scope that are more susceptible to invalidity challenges.  Large companies find it useful to play a numbers game and use the number of patents owned as a type of deterrence against allegations of patent infringement.  Smaller businesses cannot afford such an approach. Therefore, most small businesses would be best served focusing on relatively few opportunities for a truly valuable patent, than in diffusing their activities to generate a higher number of issued patents.

4.   Expiration of patent

A utility patent will expire prematurely if the required maintenance fee is not paid.  Maintenance fees are 3.5, 7.5, and 11.5 years after the issuance of a patent. Patent owners and their attorneys should both docket maintenance fee deadlines to prevent any problems.  The USPTO charges a late fee if maintenance fee payment is up to 6 months late.  Patents that lapse due to a missed maintenance fee payment can be reinstated under certain conditions with payment of an additional fee.

5.    Patent Infringement Claims

Patents don’t cover abstract ideas.  Patents are limited to products and/or processes with specifically identified attributes in the claims of the patent.  Patent infringement is a very specific analysis in which the claims of the patent are compared element by element to the attributes of a product or process.  The big challenge in patent law is definitiveness in the property boundary of the asset. If you purchase real estate, you can be reasonably certain as to the precise location of the property line.  There may be a dispute measured in inches or maybe even feet, but the scope of dispute is generally limited.  In contrast, the scope of a patent is much more up in the air.  In many instances, the accused infringer of the patent will argue that the patent is invalid and thus there is no property right of any kind that can be infringed.

6.    Patent Litigation Costs

While the problem of defending against “frivolous” lawsuits is not unique to patents, the costs involved in patent litigation do  heighten the impact of the problem.  One person’s “patent troll” is another person’s “wronged inventor”,  just as one person’s “frivolous” lawsuit is another person’s last chance at “justice”. One of Falkowski’s favorite examples of a frivolous suit is the case of  God v. Reagan.

The cost of defending a patent lawsuit will depend on how close of a call the alleged infringement is, whether the validity of the patent can be successfully challenged, and how determined the plaintiff is.  In many instances, even large companies will pay a reasonable royalty fee without any litigation in exchange for a license to infringe the patent.  In other instances, the accused infringer may take a scorched earth policy and promise to appeal a case to the U.S. Supreme Court.  Generally speaking, patent litigation is on the more expensive end of the business litigation continuum.

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Chris Falkowski is former computer programmer whose legal practice focuses on technology-related legal issues.  He is a licensed patent attorney and a former chairperson of the IT Law Section for the State Bar of Michigan.  Mr. Falkowski works primarily with entrepreneurs, start-up businesses, and mid-sized technology companies.  For more information about Falkowski PLC, visit their website.

Attorney Kristin Stone

Attorney Kristin Stone hosted a 2 part segment of a talk show called Legally Speaking, on the topic of Medical Marijuana in Michigan, featuring Criminal Defense Attorney Matt Abel and City Attorney Don DeNault.  Click here to watch part 1 of the video.  Part 2 of the video has not yet aired, but is expected to be posted in the next few weeks. Watch our comments section for an update.

The Michigan Medical Marihuana Act (MMA) is codified at MCL 333.26424.  It provides that a qualifying patient who has been issued and possesses a registry identification card is not subject to arrest, prosecution, or penalty in any manner, or denied any right or privilege including, but not limited to, civil penalty or disciplinary action by a business or occupational or professional licensing board or bureau for the medical use of marihuana in compliance with the Act.

Stone advises that anyone interested in obtaining a registry identification card first consult with an attorney about their rights and responsibilities pursuant to the Act.  ”The medical marijuana law is complex and unsettled and most attorneys don’t even understand the law.” Currently, the law is under review in the Court of Appeals.  Additionally, there is a statewide campaign to legalize marijuana.  To find out more and to information on how to sign the petition, go to https://help.repealtoday.org/

Stone  is a 10 year attorney who practices criminal defense law and family law. She is the owner of the Stone Law Firm, with offices in Shelby Township and Royal Oak, MI.  For more information, visit her website.

Attorney Lisa Schmidt

Attorney  Lisa Schmidt of Ferndale, MI provides a thorough synopsis of the current medical marijuana laws in Michigan in a recent blog. Additionally, Schmidt summarizes the numerous bills pending on the subject in a subsequent blog.

Schmidt notes that one of the pending bills had the intention of  ”eliminating so-called marijuana certification clinics, where doctors perform cursory evaluations before signing the written certifications necessary to obtain an MMMA ID card.” While the goal of the bill is to require an on-going doctor-patient relationship behind the certification, Schmidt points out the impracticality in the application of the bill. “Due to the fact that many medical malpractice insurance companies will not allow their doctors to sign these written certifications, the effect of such a bill would be to greatly increase the difficulty of receiving the state-mandated authorization for medical marijuana treatment.”

Schmidt located her practice to Ferndale in 2011, after practicing family and criminal law in Berrien County her first year out of law school. Schmidt continues to focus on criminal and family law matters in her current practice.  For more information, visit her website.

There are many advantages to owning your own law practice, or being a small firm professional.  You have more control over your choice of clients and the matters you handle. You have more flexibility in your schedule.  There are no hierarchical limits to your earning capacity.

However, there can also be pitfalls for the unwary solo or small firm practitioner.  It is important to keep up with best practices, changes in the law, and follow the rules of professional responsibility to protect both yourself and your client.

According to Southfield attorney Harvey Heller, professional liability claims for attorneys fall into the following 7 categories:

• Conflict of interest between clients or between the lawyer and a client
• Calendering issues (missed deadlines, court appearances, etc.)
• Failure to know the law
• Improper drafting of pleadings or contracts
• Inadequate discovery
• Clerical errors
• Breach of fiduciary duty to the client

The practice areas with the largest number of claims against lawyers include:

• Real estate
• Securities
• Trusts and Estates
• Corporate and Business transactions
• Collection and Bankruptcy
• Intellectual Property

Heller noted that 70% of claims in business transactions involve attorneys who devote 5% or less of their practice to business transactions. The clear message is: Do Not Dabble!  This is a hotbed of litigation for the untrained practitioner.  Defense costs of business transactions are twice as high as other areas of litigation.

Did you know….

• Law firms with 5 or less attorneys make up 70% of all legal liability claims.
• The average firm size is 2-3 attorneys.
• More than 37% of claims are against solos.
• Solos represent 48% of all law firms.

According to Heller, “attorneys should report material errors to their client whenever the client’s rights are prejudiced or damaged.  The attorney should report it promptly or as soon as he or she learns of the error and determines it can’t be remedied.”  It is best to communicate the error face to face whenever possible.  If that’s not possible, the telephone is the next best way to communicate the error to the client. Voicemail should be avoided for discussing the mistake.  Email should never be used to break the news, and should only be used to confirm the discussion between the lawyer and client.

Michael Barrett, Consulting Director of Risk Control, LPL recommends that attorneys meet with prospective new clients in person, to avoid any internet fraud that is so commonly perpetrated over email these days.   Barrett also suggests the following best practice tips:

What happens when old law intersects with new technology?  Sometimes the laws need to be modified because they no longer make sense. That’s the case with social media and the Stored Communications Act, a statute enacted in 1986, before the internet, email, and social media existed and became an every day occurrence.

Employment Law Attorney, Mary Deon

Royal Oak Employment Law Attorney, Mary Deon, explains how the Stored Communications Act applies to electronic communications and data stored electronically.  ”The Stored Communications Act addresses voluntary and compelled disclosure of ‘stored wire and electronic communications and transactional records’ held by internet service providers.  Simply stated, this Act makes it illegal for a person to intentionally access, without express authorization, a wire or electronic communication. The Act applies to certain communications stored in personal email accounts or social networking sites.  Civil and criminal penalties exist under the Act for the unauthorized access to stored communications and electronically stored data, or when authorization is exceeded.   While it was not originally intended by the Act, some employees are using this Act against their former employers for unauthorized access to their personal email accounts and social networking profiles.”

Recent Case Law illustrates how this 26 year old Act applies today:

• Robbins v. Lower Merion School District: In this 2010 Federal Class Action, the Plaintiffs were two suburban Philadelphia high school students who claimed that their schools secretly spied on them, by surreptitiously and remotely activating webcams embedded in school-issued laptops the students were using at home.  Plaintiffs further claimed that this behavior by the schools violated the students’ right to privacy. The schools admitted to secretly snapping over 66,000 webshots and screenshots, including webcam shots of students in their bedrooms. The school district settled with both students.

Click here for the Complaint, and Court order for payment of fees.

• Pure Power Boot Camp, Inc. v. Warrior Fitness Boot Camp, LLC:  In 2011, the United States District Court for the Southern District of New York individually fined two employees under the Stored Communications Act (SCA)for their unauthorized access to a co-worker’s Hotmail account on behalf of their employer. The username and password to the Hotmail account had been auto-saved on a company computer, and the two employees accessed the Hotmail account to look for documents proving that the employee was opening up a competing business.

The court held that the employee had a reasonable expectation of privacy in the e-mails contained in his personal e-mail account, and that there was no implied consent to access that account. In an earlier decision in the same case, the court levied discovery sanctions against the employer for the same SCA violation, precluding the employer from using the e-mails found in the Hotmail account (which proved the employee was opening up a competing business) in the litigation.

Click here to read the Court’s opinion.

• Rene v. G.F. Fishers Inc:  The United States District court for the Southern District of Indiana refused to throw out the SCA claim by a former employee who alleged that her former employer used key logging software to gain the password to her personal e-mail account, and then used that password to view various e-mails.

Click here for the Court’s 2011 opinion.

Mary Deon also noted that “relevancy not privacy is key in determining the scope of discovery of social media during litigation”.  This means that the court will allow information into evidence that is relevant to the underlying claims and the character of the parties, even if it is very personal and was intended as a private communication.

What’s posted on the internet and social networking sites isn’t considered private, and is typically discoverable, absent a valid legal exception.

The following 2 court cases illustrate this point well:

• Largent v. Reed, is a personal injury case in which the Court ordered the Plaintiff to produce her Facebook username and password to the Defendant because the information was deemed relevant to whether the Plaintiff suffered from chronic physical and mental pain, as she alleged in her Complaint.The court considered whether any privileges or privacy rights protected the information from disclosure; finding none, the court stated:

“There is no reasonable expectation of privacy in material posted on Facebook . . . When a user communicates on Facebook, her posts may be shared with strangers. And making a Facebook page “private” does not shield it from discovery . . . Only the uninitiated or foolish could believe that Facebook is an online lockbox of secrets.”

Click here to read the Court’s full opinion.

• Chauvin v. State Farm Mutual Automobile Insurance Company: Is a good example from the Eastern District of Michigan, where the Court took issue with an overly-demanding defendant. The Defendant insurance company requested access to plaintiff’s Facebook username and password, plus the contact information for all of plaintiff’s Facebook friends.

The court held that defendant failed to show that the requested information was available through less intrusive means or reasonably calculated to lead to admissible evidence. The court further held that the information sought was “so far outside the realm of discoverable information” permitted under the Federal Rules of Evidence and the statute in question (the Michigan No Fault Act), and went on to say that seeking unfettered access to plaintiff’s Facebook account and friends was “a fishing expedition at best and harassment at worst.”

Click here for the full opinion.

The law is still evolving in this area, but these cases help give guidelines to employers and employees alike about what social media communications might be admissible into evidence in a court of law.
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Mary Deon is an Employment Law Attorney in Royal Oak handling  employment disputes for employees and employers.  She reviews severance packages, termination policies, social media policies, employment and labor issues, and handles general litigation and business issues for small and medium sized businesses. Prior to co-founding Shelton and Deon, she practiced as a commercial litigator for Pepper Hamilton LLP.