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6 Things Startups Need to know about IP

Intellectual property (IP) protection is as important today as it has ever been for start-ups. For beginners, the prospect of where to start can be daunting.

Why do startups need IP protection? Registering IP can do several things, including:

  • Creates an asset that will have value even if the business model fails
  • Creates an asset that can be used as collateral for commercial loans
  • Justifies a higher valuation when seeking venture capital
  • Provide higher value for its products/services when listed in  public market by facilitating licensing or sale
  • Identify  more contribution margin which could reduce the need to raise investment fund
  • Helps in making strategic choices when new opportunities or change of direction is required

Here are a few IP-related approaches a start-up can should consider while formulating strategy.

6 Things Startups Need to know about IPStart early
In 2013, the United States IP system changed to a first-come-first-served basis. So regardless of who actually invented, the first one to file the patent gets all the protection. And more importantly, the one-year grace period given by the USPTO to file an application is not applicable outside the US. Therefore, start-ups planning to seek IP protection abroad should not publicize their invention before filing an application. File early and keep your invention under wraps until you do so.

Additional filing
The initial patent filing is not enough, since  the technology  will evolve as the company goes about refining the product before entering the market.  As the product evolves, the patent protection therefore needs periodic re-evaluation.  Continuations are an effective way to extend the coverage of the initial filing.

Initially, start-ups may not be able to afford broad IP protection. Compared to larger corporations, startups must have a better understanding of the impact that IP can have on their business. In some cases, IP may be their only asset. So prioritizing the revenue spend on IP protection according to the overall business plan may be necessary.

Trade secrets
While all the concentration is on patents, trade secrets can be  an important option, if feasible. Generally, patent protection lasts up to 20 years but, trade secrets continue indefinitely as long as the concerned party decides not to disclose it to the public. Companies like Coco-Cola and KFC are well known to have benefited from their well-protected trade secrets (recipes). However, maintaining secrecy of valuable information could be a challenge.

Worth of the invention
Patents are without doubt intended to protect the assets most valuable to a startup. So startups must assess the potential of the invention through suitable metrics before venturing to protect it.

Types of IP protection
Understanding the benefits, expenses, and the level of protection offered by various forms of IP is crucial. Trademark or service mark protection is necessary to protect each unique business or product identify. Another important area where startups need to have clarity is in ownership of IP assets. The company needs to have well-drafted agreements with its employees as to ownership of IP, non-disclosure of valuable information or avoidance of conflict in the event of separation.

Startups must engage with a skilled intellectual property counsel so that their business can meet the due diligence requirements of investors. This will also prepare them for commercialization of their product or service, when it would be required to ensure freedom from third party conflicts that can jeopardize that step. Being IP-savvy will prepare start-ups for the next phase in their journey.


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Patent: Use of Common Sense in an Obviousness Analysis

patent-use-of-common-senseThe Federal Circuit decided Arendi S.A.R.L vs Apple Inc. in August of this year.  The Court ruled that the Patent Trial and Appeal Board misapplied the law on permissible use of common sense in an analysis. While reversing the PTAB’s final decision, the Federal Circuit held that the PTAB’s application of common sense to supply a limitation missing from a prior art reference was conclusory and unsupported by substantial evidence. The Federal Circuit explained the proper use of common sense in an obviousness finding and helpful guidance for practitioners.

Being sued by Arendi in district court for infringement of US Patent 7917843, the defending parties Apple, Google, and Motorola Mobility filed a petition for inter partes review of the declared claims. The district court proceedings were then stayed pending completion of the inter partes review proceeding.

The claims of the ’843 patent are generally directed to techniques for locating information in a displayed document. Petitioners maintained that a single prior art reference “Pandit” rendered the claims obvious. Pandit discloses methods for recognizing predetermined types of text in a body of text and performing operations pertinent to the recognized text.  Petitioners cited the recognition of telephone numbers as text and the operation performed as adding the recognized telephone number to an address book, in the specific embodiment of Pandit. The PTAB, agreed with Petitioners that, as a matter of common sense, the technique disclosed in Pandit can be presumed to perform a search of the address book using the identified telephone number in order to avoid duplicate telephone number entries.

The Appellees argued that the process of searching for data in a database was well known at the time of the invention. But, they were unable to provide a reason as to why it would be proper to extrapolate from this general knowledge to specifically add a telephone number search to the Pandit reference.

In sum, the Appellees’ conclusory statements and unspecific expert testimony were insufficient to invoke common sense to supply this key limitation.

The Federal Circuit’s opinion provided guidance regarding the application of common sense in an obviousness analysis for patent prosecution lawyers and patent litigators.

On the patent prosecution front, an applicant confronting an obviousness rejection based in part on common sense can use this case as leverage and press the patent examiner to explain, specifically, and with evidentiary support and the reason of  limitation absent from the prior art. For patent litigators, the decision is a helpful guide for parties on both sides of an invalidity case.

Criticality of claims in an infringement case

Preparing the claims comparison chart is a primary step in studying a patent infringement case. MaxVal’s Claims Set Comparison tool and Claim Chart Generator help in analyzing and especially illustrating the elements of the claims.  Claim charts are automatically generated in a ready-to-use format.

Patent and litigation attorneys have relied on MaxVal’s Claim Set Comparison and Claim Chart Generator tools for several years.

Key features of the Claim Chart tools:

  • Automatically creates a downloadable claim chart for a U.S. patent or published U.S. application.
  • View the Independent claims separately for a better view
  • Compares two sets of claims and highlights the difference between them
  • Helps figuring out the difference between the U.S. claims and the foreign counterpart claims
  • The claim charts (including PCT and EP patent/publications) can be generated in three different formats: Word, Excel or HTML.

The illustration below shows a comparison of claims sets and patent drawings for the patent #791843

Claims Set Comparison - Patent US7917843.PNG

Fig-1: Snapshot shows comparison of the claims at publication and granted stages for patent #791843

Patent drawings-843.PNG

Fig-2: Patent drawings of ‘843

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Media Outlets Including Forbes Hit With Lawsuit

Many reputed media stations including, Forbes, Inc., American Broadcasting Companies, Inc., and Discovery Communications, Inc. have been targeted with a lawsuit for willful patent infringement filed by Texas-based Bartonfalls LLC.

The lawsuit was filed with the US District Court of EDTX on October 11, 2016, where Bartonfalls claims that the companies have infringed the US patent 7,917,922.  The patent relates to a method that integrates a plurality of television signal sources into a cohesive audio/video environment.

Claim 1 of the ‘922 patent describes a “method for automatically changing from a first TV program to an alternate TV program at a TV viewer location.” The accused companies in the suit either sell or provide a method for automatically changing from one TV program to another.

Bartonfalls stated that the companies have willfully infringed claim 1 of the ‘922  patent, “with knowledge of the patent and in spite of an objectively high likelihood that its actions constituted infringement.”

According to the USPTO and MaxVal’s own research, the accused companies haven’t given any indication as to how they are going to tackle the alleged infringement.  Below are the details of the cases.

Case Number Court Lawsuit URL
2:16-cv-01126 Texas Eastern District Court Bartonfalls, LLC    v.  American Broadcasting Companies, Inc.
2:16-cv-01127 Texas Eastern District Court Bartonfalls, LLC    v., Inc.
2:16-cv-01128 Texas Eastern District Court Bartonfalls, LLC    v. Bloomberg, L.P.
2:16-cv-01129 Texas Eastern District Court Bartonfalls, LLC    v. CBS Interactive, Inc.
2:16-cv-01130 Texas Eastern District Court Bartonfalls, LLC    v. Turner Broadcasting System, Inc.
2:16-cv-01131 Texas Eastern District Court Bartonfalls, LLC    v. Consumers Union of United States, Inc.
2:16-cv-01133 Texas Eastern District Court Bartonfalls, LLC   v. Forbes, Inc.
2:16-cv-01134 Texas Eastern District Court Bartonfalls, LLC    v. Advance Publications, Inc.
2:16-cv-01135 Texas Eastern District Court Bartonfalls, LLC    v. Scripps Networks Interactive, Inc.
2:16-cv-01136 Texas Eastern District Court Bartonfalls, LLC    v. NBCUniversal Media, LLC
2:16-cv-01137 Texas Eastern District Court Bartonfalls, LLC    v. Viacom, Inc.
2:16-cv-01138 Texas Eastern District Court Bartonfalls, LLC    v. New York Times Company
2:16-cv-01139 Texas Eastern District Court Bartonfalls, LLC    v. Ziff-Davis, LLC

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Court Shuts Down Patent Infringement Case Against


The U.S. District Court for the Northern District of California has dismissed a lawsuit against filed by TriDim Innovations claiming patent infringement.

TriDim filed a suit on Nov 30th 2015 for infringing two patents (U.S. Patent No. 5,838,326 and 5,847,709) on a “computer controlled display system” which it acquired from Xerox Corp. It claims that uses similar software for its Kindle Fire.

The patents describe a three-dimensional computer document workspace that allows users to consolidate a large number of documents by touching, dropping and flicking them into three separate places in accordance to their usage. argued that the patents were invalid under section 101 as applied in the Alice Corp. Pty. Ltd v. CLS Bank Int’l in 2014. In the Alice case, the Supreme Court expressed that computer claims are eligible for patents if there is significantly more than an abstract idea.

TriDim reasoned that separating its computer display into three spaces limits their invention to a specific system, and hence it is not an abstract idea.

The judge of the case, James Donato found the patent to be invalid under Alice as it was an abstract idea of retrieval and arranging of documents. He ruled it out by saying it did not establish an inventive concept and is a “common solution to a common problem.”

The court said that the TriDim patents did not require any specific hardware or software that would help a user to move and place files within the system. Furthermore, it found that there was an overuse of the word “circuitry” but the invention had nothing to with circuitry. It also said that inclusion of smart words does not mean that the creation is an innovative concept.

Due to all of these assertions, the court gave verdict in favor of and dismissed the lawsuit. The ruling came out on Sept 19, 2016, just days before the patents were about to expire.

According to the USPTO data and MaxVal’s own research, here is a detailed history of this infringement case

Type Names
Case Number 3:15-cv-05477
Court California Northern District Court
Filed date 12/02/2015
Judge James Donato
Plaintiff Tridim Innovations LLC
Plaintiff Attorney Steven Todd Lowe
Plaintiff Law Firm Lowe & Associates, P.C.
Defendant Amazon.Com, Inc.
Defendant Attorney Daniel Thomas Shvodian
Defendant Law Firm Perkins Coie LLP
Product Various versions of the Kindle Fire, Kindle Fire HD, Kindle Fire HDX, and Fire phone – products that incorporate the “carousel” feature
Patent US5838326|US5847709
Closed date 9/19/2016
Basis of Termination Judgment on the Merits
Outcome of District court judgment Favor of Defendant
Comments Patent claims ruled invalid







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Network-1 Announces Settlement of Patent Litigation With Polycom, Inc.


Network-1 Technologies, Inc. agreed to resolve its patent litigation case against Polycom, Inc, pending in the United States District Court of EDTX, for infringement of Network-1’s Remote Power Patent (U.S. Patent No. 6218930, the ‘930 patent). Polycom was one amongst the sixteen defendants named in the litigation.

A mutual settlement was reached by both the companies to resolve this litigation. Under the settlement terms, Polycom agreed to license the ‘930 patent until March 2020 and pay a fee of $5 million for past sales on its Power over Ethernet (POE) products. Additionally, it will continue to pay royalties on the products until the patent term expires. The royalty payments also include POE products that comply with the Institute of Electrical and Electronic Engineers (IEEE) standards.

In September 2011, Network-1, filed a patent litigation against sixteen data networking equipment producers for violating its ‘930 patent. Previously Network-1 reached a settlement agreement with 11 defendants. The remaining four defendants in the lawsuit were Avaya Inc., AXIS Communications Inc., Hewlett-Packard Company, and Juniper Networks, Inc. Network-1 had decided to claim reasonable monetary damages including royalties from them.

At present, Network-1 has twenty-five license agreements in regard to the ‘930 patent which also includes added license agreements with Cisco Systems, Inc., Extreme Networks, Inc., Netgear Inc. and many other data networking sellers.


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Yahoo Patents Smart Billboard for Ad Targeting


Yahoo has filed a patent for a camera equipped “smart” billboard that has a wide array of sensors and drone-based cameras to collect information about people for ad targeting.

According to the details in the application no 14/675,004 published on Oct 6th, 2016, the billboards or drones placed in public will have audio and video collection capabilities, speech recognition, and retina scan to determine what viewers are looking at or conversing about. The aim is to make billboards smart and show people ads that are most relevant.

The sensors in the camera would detect if people are paying attention, retina scan to check if people are looking directly at the ad, use proximity and image recognition to see if pedestrians are slowing down while passing by the ad, and microphone inputs would be used to check for ad-related keywords being spoken.

The patent application states, “instead of relying on “personalization” like online advertising, the techniques described herein rely on “groupization,” i.e., selection of advertising content based on an aggregate representation of the target audience that is derived, at least in part, from real-time information.”

The patent application was submitted March 2015 and was recently made public by the United States Patent and Trademark Office (USPTO).

Ever since the birth of online advertising, companies have been monitoring clicks on ads and collecting data. But, directly observing people when they are on the go was out of the question. That’s all about to change as Yahoo has filed this patent which tracks and monitors an entirely different kind of traffic.

Even though the proposed billboard is indeed smart, the conception raises two major concerns

  • Yahoo collects information on people and uses it to show relevant ads. Good, but where does the data go? Does Yahoo delete it or do companies who have placed a bid on the billboard content get access to that information?
  • People are not given an option to opt-out and disable the ads as it’s impossible to block a billboard

The application is still pending with the USPTO and if it’s approved let’s hope that Yahoo protects the privacy of the user’s data.

Here’s a diagram from the patent document which explains the concept


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FameBit acquired by Google


Google recently announced its acquisition of FameBit, a marketplace that connects brands, influencers, and creators with YouTube and other social networking sites to sponsor their content.

This is indeed a huge step for Google as this combination would increase the availability of branded content opportunities and bring more revenue to YouTube.

However, YouTube said that the FameBit acquisition does not mean that it will be preferred over other digital marketing agencies and services.

YouTube’s Ariel Bardin (VP, Product Management – Google Payment) said “Creators will always have the choice in how they work with brands, and there are many great companies who provide this service today. This acquisition doesn’t change that. Our hope is that FameBit’s democratized marketplace will allow creators of all sizes to directly connect with brands, as well as provide a great technology solution for companies like MCNs and agencies to find matches for their creators and brand partners.”

Financial terms of the deal have not been disclosed yet so FameBit will remain as a separate operation for now.

In a blog, FameBit founders David Kierzkowski and Agnes Kozera said, “With Google’s relationship with brands large and small, and YouTube’s partnership with creators around the globe, we hope to connect even more brands to creators, engage more audiences, and make brand marketing more creative and authentic than ever.”

FameBit has worked with world renowned brands including Marvel Entertainment, Paramount Pictures, Sony, L’Oreal, Canon, Activision Blizzard, Adidas, Rovio, and Conair. The company has made deals with advertisers and creators that have resulted in more than 25,000 branded videos that have generated over 2 billion minutes of viewing time.

The trend set in video advertising has been apparent for some time now. Advertisements are fine but, they give better results when integrated into a proper video and delivered by a creator whom fans look up to. The acquisition of FameBit is clear that this is one more step in strengthening Google’s offerings and to more strongly link advertisement on their platforms to revenue.


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USPTO Patent Issuance Report – First Half-Year of 2016


Technology growth is becoming increasingly complex and the long tail of inventions is growing day by day. Any business that comes with an innovative creation has to protect it through some legally enforceable rights, and this is where patents come into action by protecting your ideas through an extensive system that has been developed around them.

We have already crossed the halfway point of the financial year and the number of patents issued shows a steady growth.

So, do you know what’s happening in the world of patents? MaxVal has recapped all the latest US patent trends from the first half of 2016.

The total number of patents issued by the USPTO between Jan’16 to June ‘16 is 168,077

  • US is ranked highest with a massive number of 109,353 patents received so far followed by Japan 24,200, Slovakia 10,047, Germany 5,279, China 4,830, Taiwan 2,707, and France 2,202.
  • Filing for a patent with the US Government is indeed a crucial step. But, it involves a wide swath of legal formalities. The top law firms that have represented the most number of patent grants are Oblon, McClelland, Maier & Neustadt, L.L.P, Sughrue Mion, PLLC, Birch Stewart Kolasch & Birch, Fish & Richardson, and Cantor Colburn LLP.
  • Computer technology is no further behind this year than any other industry. Computer Technology, Digital communication and Telecommunications held on to the top three spots in the R&D areas with 35,464, 18,285 and 17,865 patents issued respectively. Top patent awardees in this arena were Qualcomm (542), Ericsson (828), Samsung Electronics (803), and LG Electronics (755).
  • When it comes to the tech industry, patents are their lifeblood. The number of patents filed by companies such as Samsung, IBM, Canon, and Google, proves how much these tech companies rely on patents. Some of the world’s well-known discoveries have been found through university research. Although the list is lengthy, here are few of the top research institutes like the University of California, Industrial Technologies Russia, Massachusetts Institute of Technology, and Stanford University who obtained the highest number of patents during the first half of 2016.

In today’s technologically driven world, it is imperative that every business steeped in new ideas or innovations should be more IP-aware.  The only way to keep the competitors at bay is creating a shield of strategic IP-protection to provide complete certainty that your place in the market is safe.

Download the complete report here

MaxVal provides custom range of landscape research and analysis services for in-house staff or through external legal counsel. Reach us at for your landscape and competitive analysis requirements.

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Software Patents Are Against the First Amendment?

The end may be nearing for software patents which have been highly controversial in the tech industry for some time. The verdict issued on Friday by the U.S Court of Appeals for the Federal Circuit, found that three patents asserted against anti-virus companies were patent-ineligible under 35 U.S.C. § 101 and that they did not pronounce a patentable invention. The patents were owned by Intellectual Ventures, which has a standing in the tech world as “patent troll”.

In the concurring opinion, Judge Haldane Robert Mayer indicated that patent law must provide similar safeguards as copyright law has in-built first amendment protection called the “fair use”. Judge Mayer states that “(1) patents constricting the essential channels of online communication run afoul of the First Amendment. (2) Claims directed to the software implemented on a generic computer are categorically not eligible for a patent.”

Considering the decision made by the Supreme Court in 2014 known as “Alice” covering patentable subject matter, Judge Mayer inferred that software is not patentable. “Software lies in the antechamber of patentable invention. Because generically-implemented software is an “idea” insufficiently linked to any defining physical structure other than a standard computer, it is a precursor to technology rather than technology itself”, says Judge Mayer.

This does not mean that there will be an immediate end to software patents as this opinion was the concurring opinion. Even now the legal authorities from relevant courts are skeptical about patenting software and the chances of rejections are high.

As per Maxval’s research and USPTO data the case details are as below:

 Type  Name
Court CAFC
Plaintiff Intellectual Ventures I LLC
Plaintiff Attorney Brooke Ashley May Taylor
Defendant Symantec Corp.|Trend Micro Incorporated|Trend Micro, Inc. (USA)|Intel Corporation
Defendant Attorney Dean G. Dunlavey
Defendant Law Firm Latham & Watkins LLP
Product Anti-virus and Internet security products
Patent US5987610|US6073142|US6460050|US7506155
Closed date 9/30/2016
Basis of Termination Affirmed-in-Part and Reversed-in-Part

For more details, please click on the case links:


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$22 Million Verdict: Cellular Communications Equipment wins demonstrative victory against Apple Inc.


After finding that Apple willfully infringed on a patent, EDTX has adjured Apple to pay $22 million to Cellular Communications Equipment LLC, a subsidiary of Acacia Research. CCE holds a portfolio of telecommunications patents, mostly into Long-Term Evolution (LTE) technologies. Attorneys from Caldwell Cassady & Curry, a high-stakes civil litigation firm specializing in patent infringement and co-founder disputes, represented CCE in the Eastern District of Texas case.

The lawsuit, filed in January 2014, accused Apple of selling multiple products that infringe upon the U.S. Patent No. 8,055,820. The patent is titled ”Apparatus, system, and method for designating a buffer status reporting format based on detecting pre-selected buffer conditions”. The wrangle started when CCE impeached Apple of also infringing six other of its patents. By the time the cases went to trial, only one patent was in the stand. That patent was acquired by CCE from Nokia Corp. Engineer Benoist Sebire.

Apple attempted to prove that the claims of the ‘820 patent were invalid. However, the jury rejected the assertions made, as the evidence submitted was not convincing. Since the infringement was found to be willful, the patent holder can appeal to court towards enhancing the damage up to 3 times, which can roughly be around $68 million in this particular litigation.

According to USPTO data and MaxVal’s own research, Apple has not yet confirmed whether it will appeal the decision.

Maxval’s link of the case



Case Number 6:14-cv-00251
Court Texas Eastern District Court
Filed date 04/07/14
Judge K. Nicole Mitchell
Plaintiff Cellular Communications Equipment LLC
Plaintiff Attorney Jeffrey Ray Bragalone
Plaintiff Law Firm Bragalone Conroy PC
Counter Claimant Apple Inc.
Defendant Apple Inc. | AT&T Inc. | AT&T Mobility LLC|Verizon Communications, Inc.| Cellco Partnership 
doing business as Verizon Wireless|Sprint Corporation |Sprint Corporation |Sprint Solutions, Inc.| Sprint Spectrum L.P.| Boost Mobile, LLC|T-Mobile USA, Inc.| T-Mobile US, Inc.
Counter Defendant Cellular Communications Equipment LLC
Defendant Attorney Douglas E Lumish
Defendant Law Firm Latham & Watkins LLP 
Product Apple mobile devices and services for mobile device communications
Patent US6377804|US6819923|US7215962|US7941174|US8055820|US6810019
Closed date Yet to be closed
Basis of Termination Judgment on the Merits – Defendant
Outcome of District court judgment Defendant
Damages amount $ $22,118,216