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January 2010 Intellectual Property Law Update

McAfee & Taft Intellectual Property Update - January 26, 2010

The New Year is upon us and with it come new challenges and opportunities. Here are a few things we’re keeping an eye on in 2010.

 
U.S. PATENT OFFICE GOES GREEN

Some Green Technology Patent Applications May Be Eligible For Accelerated Prosecution

On December 8, 2009, the U.S. Patent and Trademark Office (the "USPTO") announced the “Green Technology Pilot Program” as a way to accelerate the prosecution of green technology patent applications (generally defined as applications relating to technologies having a beneficial environmental impact). "Green" applications accepted for the pilot program go to the top of the Examiner’s docket for quick examination. It can take years for an initial examination in some art groups, so if you have developed or are developing a green technology, you might want to consider this program. The pilot program does not require payment of any additional fees. 

The pilot program does have some limitations. A "green" application must fit the following criteria:  (1) the application must be one of the first 3,000 "green" applications filed in the USPTO; (2) the application must fit into one of the accepted classifications for green technologies; and (3) the application must contain three or fewer independent claims and 20 or fewer total claims. The USPTO has indicated that it will reconsider the limitation of 3,000 new applications if the response to the program exceeds expectations.

Also, green technology patent applications are receiving greater emphasis and accelerated prosecution in both South Korea and the United Kingdom. Green is good (and quicker).

TAKING PROPRIETARY CUSTOMER LISTS OR BUSINESS RECORDS OF OTHERS CAN BE GRAND LARCENY IN OKLAHOMA

The Oklahoma State Senate recently broadened the scope of Section 1732 of Title 21 of the Oklahoma Statutes (Crimes and Punishments), which deals with the theft of trade secrets.  Senate Bill 1013, which was introduced by Sen. Dan Newberry (R) and became effective on November 1, 2009, amended Section 1732 of the penal code of the State of Oklahoma to make it clear that copying customer lists and business records without authorization is potentially a crime in Oklahoma. 

Section 1732 of Oklahoma’s penal code has been on the books for decades. The statute imposes criminal liability on any person who “(a) steals or embezzles an article representing a trade secret, or (b) without authority makes or causes to be made a copy of an article representing a trade secret.”  The stealing, embezzling or copying must be done with an intent to deprive (or withhold control of) the trade secret from the owner or to appropriate the trade secret to another or company. The crime is larceny. The value of the trade secret, as opposed to the value of the article itself, controls whether the larceny is grand larceny or petit larceny.       

The statute was amended to add “customer list” and “business records” to the definitions of “article” and “trade secret.”  In addition, “information stored in any computer-related format” was added to the definition of the term article, and “including copying, transferring and e-mailing of computer data” was added to the definition of the term “copy.”  These amendments may help deter theft of trade secrets, which can be very costly to Oklahoma businesses.

BILSKI V. KAPPOS
The Fate of Business Method Patents Will Be Decided Soon

On November 9, 2009, the U.S. Supreme Court heard oral arguments in Bilski v. Kappos, a case involving the patentability of business methods. The Supreme Court’s decision  in this case will not only likely determine the future of business method patents, but will also potentially have an impact on the patentability of methods or processes in general. 

In the Bilski case, the USPTO rejected Bilski’s patent application for a method of hedging risks in commodities trading.  In upholding the rejection by the USPTO, the U.S. Court of Appeals for the Federal Circuit (the “CAFC”) held that for a “process” or “method” to be patentable, it must 1) be tied to a particular machine or apparatus, or 2) transform a particular article into a different state or thing. Bilski appealed the CAFC’s decision to the Supreme Court.

While the general consensus in the patent bar is that the Supreme Court will uphold the rejection of Bilski’s method claims, it is not so clear to what extent the Supreme Court will modify the CAFC’s patentability standard for method or process claims in general. 

Thus, although Bilski involves an actual business method, the Supreme Court’s decision may affect many types of method patents, including those in the areas of computer software and life sciences (mainly diagnostic methods). There has been no explicit indication as to when the Supreme Court’s decision will be announced.

INTELLECTUAL PROPERTY SUBJECT TO AD VALOREM TAXES?

In September of last year, the Supreme Court of the State of Oklahoma rendered a decision in Southwestern Bell Telephone Company v. Oklahoma State Board of Equalization. The decision, which has been the subject of numerous articles and publications throughout the state, holds that a number of intangibles previously not subject to ad valorem taxes are not exempt, and that the value of such intangibles is to be considered in the assessment of ad valorem taxes. Some of the intangibles listed in the decision include customer lists, customer relationships, assembled work force, databases, goodwill, employment contracts, patented technology, lease agreements, trademarks and trade names, licensed software, advertising efforts and the attendant copyrights on advertising materials and technical documentation. 

While the decision has been filed, it has not been released for publication and as such is subject to revision or withdrawal. Southwestern Bell has requested a re-hearing, but no decision on that request has been rendered. If the decision as currently written stands and there is not otherwise a legislative  or constitutional solution, it will have an impact on most if not all businesses in Oklahoma. The list of intangibles in the case was rather broad, and would capture intangible property held by virtually every business in the state. McAfee & Taft is monitoring the case, and as soon as a decision is rendered, will be prepared to address any issues that arise as a result.