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Fitbit, Jawbone, Kyle Bass, PTAB, iWatch – the week in IP

Jawbone suing fellow fitness tracking company Fitbit, Ray Niro’s views on the effect of Octane Fitness, the positive effect Kyle Bass has had for the pharma industry, questions over how PTAB numbers are perceived and a Federal Circuit decision on the iWatch mark were in the IP headlines in the past week

fitbit-logo.jpg An unfit lawsuit?

Jawbone has sued rival fitness tracking company Fitbit for patent infringement, reports Fortune. The suit, filed by Jawbone’s parent AliphCom, was filed in the Northern District of California.

It accuses Fitbit of infringing a patent for “a wellness application using data from a data-capable band”. Fitbit is doing an initial public offering this month in which it is seeking to raise up to $478 million, according to Bloomberg. The complaint said that Jawbone would also ask the ITC to investigate Fitbit.

Jawbone in May sued Fitbit in a different lawsuit alleging it stole its trade secrets and intellectual property by luring its employees.

Jawbone said it had invested more than $100 million on R&D for its tracking technology and has registered hundreds of patents. Patinformatics did an analysis of Jawbone’s patents and found 189 unique applications consisting of 15 Chinese patent applications, 77 pending, or abandoned US applications, 97 granted US patents, including 11 design patents.

The Octane effect

Ars Technica had an interesting article on Ray Niro this week, which described him as one of the lawyers who pioneered contingent-fee patent litigation. Niro is apparently considering exiting the business.

Ars Technica said that Niro could be viewed as one of the original “patent trolls” in a sense, having worked for TechSearch, which brought patents and sued companies for infringement in the late 1990s.

But Niro this week told Crain’s Chicago Business: “The stand-alone patent case is dead on arrival, and I don't think we're unique.”

Niro said that changes such as the Octane Fitness decision loosening the standard for fee shifting have hurt the model. Niro’s from was ordered to $4.1 million in January after losing a case, which he said was a “wake-up call”.

“I can take it once, twice, but am I going to take it three or four times? No. Why should I?” he told Crain’s.

kyle-bass-150.jpg Kyle Bass – pharma’s saviour?

Hedge fund manager Kyle Bass has been vilified by pharmaceutical and biotech companies for his use of PTAB proceedings to challenge their patents. But one blog post this week suggested pharma and bio companies should instead thank Bass.

Oblon’s Scott McKeown on the Patents Post-Grant blog said: “The fact of the matter is Kyle Bass has been a boon to Bio/Pharma lobbyists. His stunts (and that's exactly what they are) allow the debate to turn away from patent quality to one of simple gamesmanship.”

McKeown said that the changes to PTAB proceedings now being discussed in Congress go well beyond that which would be necessary to tackle the perceived Bass problem. He added that the wide range of provisions to water down proceedings would not have been possible without having Bass as a bogey man.

“The inconvenient truth is Bio/Pharma has always been wary of opposition style proceedings at the PTO, and would rather not deal with them at all. And, without Mr. Bass, Bio/Pharma could never sell its pro-patent agenda in such a fervent, anti-troll environment,” said McKeown.

He noted the contradiction of Congress looking to water down PTAB proceedings at the same time as plaintiff attorneys and NPEs complain about the impact they have had on their business model. He added that IP Nav is partnered with Bass, which he says has allowed the patent monetization company to undermine the system that has hurt its model. “Congress is being played like a fiddle,” he said.

uspto.jpg Questioning the kill rate

A piece on Poltico by professor Colleen Chien of the Santa Clara University School of Law questioned the figures that people bandy around about the Patent Trial and Appeal Board. She wrote that a common figure given during debate over the PATENT Act is that 84% of reviewed patents have their claims thrown out.

However, Chien said the figure is actually that the USPTO recently reported that 84% of patent challenges that go through the full review process have at least one claim rendered unpatentable. She said that people need to keep in mind that the USPTO only reviewed 65% of the claims provided to it, and that half of these are settled or dropped by the parties before a ruling.

“Rejecting a claim doesn’t mean that the overall patent is unenforceable: each individual patent could have dozens, or hundreds of claims,” wrote Chien. “If you follow the numbers carefully, you realise that a more accurate way to think about it is that the USPTO has ended up invalidating about 25% of the claims submitted to it for review. That’s a long way from 84%.”

federal-circuit-court300.jpg Federal Circuit calls time on MZ Berger

The Federal Circuit has upheld a Trademark Trial And Appeal Board ruling that watchmaker MZ Berger did not give sufficient evidence to show a “bona fide intent” to use the iWATCH mark and could not register it, reports Finnegan’s Incontestable Blog.

Swatch had filed an opposition against the application to register the iWATCH mark in 2008, alleging that MZ Berger did not intend to use the mark. The TTAB held that Berger’s trade mark search conducted days before filing, an internal email summarizing a paralegal’s discussion with the examining attorney, and drawings of the proposed product did not demonstrate bona fide intent to use the mark.

“On appeal, the Federal Circuit agreed with the TTAB’s findings, and confirmed that an opposer may challenge an application by alleging that the applicant lacks a bona fide intent to use the mark,” said Finegan. “The TTAB has long held that this is the case, but this precedential decision marks the first time the Federal Circuit has done so.”

Apple was not involved in the proceeding.

Also on the blog this week:

PTAB moves squarely into US lawmakers’ sights in rewritten PATENT Act

Bass files 16th IPR petition as opposition continues to build

Making sense of the UPC fee proposals

IPRs and Section 101 to take centre stage at BIO convention

In our news and analysis this week:

Innovation Act reports to US House of Representatives

Eight takeaways after EPO and MEPs discuss Unitary Patent

Least developed countries ask for more time for TRIPs

Patent harmonisation plans make slow progress

12% of litigated patents since 2012 challenged at the PTAB

Kering v Alibaba sounds the alarm on China’s online counterfeits

May PTAB Data – Three PGRs filed in a busy month

Intellectual Ventures II files third and fourth lawsuits of 2015

In-house counsel share patent practice tips

more from across site and ros bottom lb

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We provide a rundown of Managing IP’s news and analysis coverage from the week, and review what’s been happening elsewhere in IP