Thursday, April 9, 2015

Auditing Patent Portfolios in the Wake of Alice

The patent landscape has been evolving rapidly in the wake of the US Supreme Court’s decision in AliceCorp. Pty. Ltd. v. CLS Bank Int’l last June.

Both patent owners and law firms that represent patent holders need to be proactive about the new risks and obligations in this post-Alice world.

The patents at issue in the Alice case disclosed a computer-implemented scheme for mitigating settlement risk using a third-party intermediary. The question presented to the Court was whether the claims were patent-eligible under 35 U.S.C. § 101 or whether they were drawn to an abstract idea and thus not patent-eligible.

Some feared (or hoped) that the Supreme Court would invalidate all software patents, and perhaps business method patents as well, in its Alice decision. That didn’t happen. However, challenges to patents based on § 101 have markedly increased since Alice.

A recent study found that during the 27 months before the Alice decision district courts made about 1.4 rulings related to § 101 per month. Since Alice, that figure has reached 5.4 rulings per month.

Vulnerable Patents

Software and business method patents are seen as increasingly vulnerable to invalidation, both via the interpartes and post grant review processes at the Patent Trial and Appeal Board (PTAB) and in the federal district courts.

Hundreds of pending patent applications were withdrawn in the wake of Alice. At least 20 software patents have been struck down by federal courts, according to Reuters, and only a handful have withstood a § 101 challenge since Alice.
According to the National Law Review,

A review of the six post-Alice Federal Circuit panel decisions on the “abstract idea” exclusion confirmed that claims will fail if they merely append “generic” computer or Internet implementation to a business idea.

A recent blog post in Intellectual Asset Management (IAM) reported that tens of thousands of patent assets owned by major companies could be vulnerable under Alice.

Research commissioned by IAM estimated that 76% of Oracle’s patents, 58% of Google’s, and 55% of Microsoft’s are potentially affected by Alice. Ironically, even tech companies that supported the Supreme Court’s decision in Alice are finding themselves victims of it.

Time for a Patent Audit

What does Alice mean for patent holders and the law firms that represent them?

According to IAM,

It would be an unwise publicly-traded tech company in the US that is not currently doing a full audit of its patent portfolio to assess where it stands in this post-Alice world.

As discussed in the IPWatchdog blog,

From a valuation and financial reporting perspective, there needs to be a serious examination of the post-Alice landscape implications on the value of patents as corporate assets. The results of such examination may lead to further action – which could range anywhere from additional disclosure requirements by regulators, all the way to actual corporate asset write-offs.

How can an Advanced IP Management System help?

Both corporations and law firms can leverage the portfolio management tools of a system like

Anaqua to do an “Alice Audit” of their portfolios or their client’s portfolios. ANAQUA’s Portfolio Management works across all modules to provide an integrated environment for strategic planning, management and analysis of intellectual asset portfolios. The Portfolio Management suite includes a number of core tools that can be leveraged to determine how existing or proposed Software and business method patents will measure up against the new considerations that should be considered in a post-Alice world.

To learn more about how Anaqua’s patent portfolio management tools can be used to conduct a patent audit, please click

Tuesday, April 7, 2015

Are Your Patent Files Safe from Hackers?

Nearly every week, hack attacks are in the news. Data thieves have gone after banks, health insurance providers, retailers, and even a movie studio, taking personal information, emails, and hundreds of millions of other items of data. The information has been used to commit identity theft, steal money, and publicly humiliate the victims.

Will law firms be the next targets in the headlines?

As reported by the
New York Times, a recent report by Citigroup is critical of US law firms for failing to disclose data breaches. Because of the secrecy surrounding cyber intrusions into law firms, it’s impossible to determine how prevalent these attacks are and whether they are on the rise.

But there’s no question that law firms are under attack.

Maintaining Client Confidentiality

Law firms, of course, have a duty to maintain the confidentiality of client records.

 ABA Model Rule 1.6 provides:

A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.

It’s clear that those “reasonable efforts” include appropriate cyber-security efforts.

The first state bar ethics opinion on this issue appears to be State Bar of Arizona Opinion No. 05-04, from July, 2005, which states:

an attorney or law firm is obligated to take reasonable and competent steps to assure that the client’s electronic information is not lost or destroyed. In order to do that, an attorney must either have the competence to evaluate the nature of the potential threat to the client’s electronic files and to evaluate and deploy appropriate computer hardware and software to accomplish that end, or if the attorney lacks or cannot reasonably obtain that competence, to retain an expert consultant who does have such competence.

Other state bar associations have since issued similar opinions, and common law also imposes duties to protect client information.

A breach of that duty of confidentiality can lead to claims for legal malpractice – and worse.

According to an article in The Computer & Internet Lawyer

The impact on a law firm that gains a reputation as being unable to protect confidential data, particularly client data, could be devastating to its image, its ability to retain and attract clients, and its standing in the legal community.

Patents under Attack

According to BloombergBusiness, hackers based in China trying to derail a $40 billion acquisition targeted seven Canadian law firms. The FBI subsequently warned the top 200 law firms in New York City that “hackers see attorneys as a back door to the valuable data of their corporate clients.”
One security expert estimates that at least 80 major US law firms were hacked in 2011, according to Bloomberg.

According to the Times, the Citigroup report

said law firms were at “high risk for cyberintrusions” and would “continue to be targeted by malicious actors looking to steal information on highly sensitive matters such as mergers and acquisitions and patent applications.

(Emphasis added.)

In theory, now that the US has switched from a “first to invent” to a “first to file” system, information in a draft patent application stolen from a law firm’s computer network could be used to beat the actual inventor to the Patent Office.

How a Unified IP Platform Can Reduce the Risk of Data Breaches

Law firms are known for being far from the cutting edge when it comes to technology, and that’s especially true with respect to data security.

 The ABA’s Law Practice reported that Matt Kesner, the CIO of Fenwick and West LLP, noted that China “doesn’t waste its ‘A’ [hacker] squads on law firms because their security is so dreadful. The rookies on the ‘C’ squads are good enough to penetrate most law firms.”
As we say in our white paper on Making the Case for a Unified IP Platform,

Every additional file server, scanner, printer, email user, application and desktop presents a new attack vector for cyber criminals to exploit for the purpose of stealing the clients most valued assets.

IP firms are entrusted with protecting a large percentage of their clients’ value and yet a recent survey conducted by Marsh USA, reports that almost 80 percent of respondents consider cyber/privacy security to be one of their firm’s top 10 risks; 72 percent said their firm has not assessed and scaled the cost of a data breach based on the information it retains.

Anaqua’s unified IP platform enhances information security for law firms by shrinking the attack “surface area.” By reducing process steps, printers, unmanaged emails and attachments, data stores, and file servers, Anaqua’s platform helps firms reduce the risk of criminal intrusions.

Additionally, if the unified IP platform is hosted in the cloud, the firm gains the additional benefit of having the entire platform managed in a secure, audited, and compliant data center.

The Anaqua IP platform lets firms:

·         Scan documents automatically and securely deliver them to the right destination
·         Eliminate sources of data leakage such as network drives and rogue SharePoint sites
·         Eliminate home-grown apps that may have security vulnerabilities
·         Simplify logging and monitoring 

To learn more about Anaqua Essential for law firms, please click here.

Monday, April 6, 2015

Licensing – The Next Step in Building Your Brand

As all IP professionals know, building and protecting a brand can be an arduous but fruitful endeavor. And formulating a successful brand strategy often incorporates a variety of forms of IP protection. Such comprehensive strategies are especially important when dealing with multi-national brands.

In our most recent Anaqua Leadership Webinar, “Building & Licensing a Global Brand”, David Gooder, Managing Director and Chief Trademark Counsel for Jack Daniel’s, discussed the combination of trademark protection, brand protection, and licensing that supports this globally iconic brand. He starts by asking viewers, why license at all?
  • Brand Building: Licensing leads to marketing benefits for an organization by expanding the brand’s reach across different markets. Jack Daniel’s also has a media placement program which helps build an emotional connection between the brand and consumers. This has led to unexpected trademark benefits such as using product placements to prove reputation and fame in certain cases.
  • Brand Protection: Licensing is an important part of trademark protection in more than one way. Jack Daniel’s has built non-core trademark rights that currently cover over 23 classes of protection. The company uses the mark in those classes by either making and marketing products themselves or licensing others to do the same.
  • Brand Profit: Licensing can be a highly profitable operation.  In the case of Jack Daniel’s, total sales of licensed merchandise crossed over $100 million, making the licensing program itself bigger than some of the company’s other brands.
Beyond licensing, this webinar addresses other key areas such as the importance of careful innovation, overcoming enforcement challenges, and more. Throughout the webinar, David explains how the core values of the Jack Daniel’s brand have contributed to the success of its trademark and brand protection efforts today.

To access this webinar on-demand, click here.

To learn more about how Anaqua enables leading companies like Jack Daniel’s with advanced IP Management Solutions, visit