Mercedes Successful Invalidating Driver Sleepiness Detection Patent

USPat6313749_Fig1The case of Ibormeith IP LLC v. Mercedes-Benz USA, LLC, Dkt. No. 2013-1007 (Fed. Cir. Oct. 22, 2013) is another case where means-plus-function claims were found invalid for lack of an adequate algorithm/structure disclosed in the description of the patent.

Ibormeith sued Mercedes alleging that Mercedes vehicles having an Attention Assist feature infringed U.S. Patent No. 6,313,749. The ‘749 patent is titled, “Sleepiness Detection for Vehicle Driver or Machine Operator.” The ‘749 patent is directed to monitoring conditions affecting or behavior reflecting a vehicle driver’s sleepiness. Then issuing a warning to the driver before driving is unduly impaired.

Sleepiness Warning
The patent discloses monitoring that takes into account sleepiness factors including, as summarized by the court, “natural body-clock (circadian rhythm), the magnitude and number of corrective steering action the driver is taking, the cabin temperature, the monotony of the road, and how long the driver has been driving.” The factors are “individually weighed, according to contributory importance, and combined in a computational decision algorithm or model, to provide a warning indication of sleepiness.”

Means Claims Language
Claim 1 provided this means clause: “…computational means for weighting the operational model according to time of day in relation to the driver or operator circadian rhythm pattern(s) and for deriving, from the weighted model, driver or operator sleepiness condition and producing an output determined thereby…” Claim 9 provided this means clause: “…computational means for computing steering transitions and weighing that computation according to time of day, to provide a warning indication of driver sleepiness…”

Lack of Structure In Specification
The court recited the rule for means-plus-function clauses: “For a claim to be definite, a recited algorithm, or other type of structure for a section 112(f) claim limitation, need not be so particularized as to eliminate the need for any implementation choices by a skilled artisan; but it must be sufficiently defined to render the bounds of the claim—declared by section 112(f) to cover the particular structure and its equivalents—understandable by the implementer.”

However the Federal Circuit found that these means clauses if the ‘749 were not tied to a structure or defined with sufficient particularity in the specification. As a result the requirements of 35 USC 112, sixth paragraph were not complied with and the claims were held invalid.

The specification provided a formula in table 10 that provided “sleep propensity algorithm – definition “S mod = S circ + S zerox + S rms + S light + S temp + S sleep + S road + Strip.” However, Ibormeith’s expert provided that the algorithm was not based on a simple adding of already weighted inputs. This approach was likely taken to insure that the claims were interpreted broadly enough to cover Mercedes vehicles.

The court recognized that under Ibormeith’s interpretation a person of ordinary skill in the art would need to devise his or her own method for determining driver drowsiness based on the factors. The court concluded that “[a] description of an algorithm that places no limitations on how values are calculated, combined, or weighted is insufficient to make the bounds of the claim understandable.”

Drafting Tips: Provide at Least one Non-Means-Plus-Function Claim Set
This is another in a string of cases where the court has found that means-plus-function claims are invalid in technology related patents where the description fails to provide a sufficiently detailed explanation of the algorithm/structure corresponding to the means clause in the patent. It is better to avoid means-plus-function based claim limitations in at least one claim set, if any. Drafting at least one claim or claim set not including a 112(f) or 112, sixth paragraph claim avoids indefiniteness problems associated with means-plus-function claiming.

Trademark Application Problems: Wrong Owner Named

While the United States Patent and Trademark Office (USPTO) provides online forms that appear to make it easy to file a trademark application, there are several portions of the application that can trip up an inexperienced applicant. One of those areas is the owner portion. The USPTO requires that the correct owner of the trademark be specified in the application to register the trademark. This sounds easy but in many cases it is not, as will be shown below.

Individual and Partnership Owner Problems
Take the case of American Forests v. Barbara Sanders, 1999 TTAB LEXIS 529 (TTAB 1999). In this case, Barbara Sanders filed a trademark application to register LEAF RELEAF to be used with the goods of leaf bag equipment. The application named herself individually as the owner/applicant.

Later another company, American Forests, filed an opposition seeking to prevent Barbara Sanders from receiving a registration over LEAF RELEAF. American Forest alleged (1) that LEAF RELEAF was confusingly similar to its trademarks GLOBAL RELEAF and RELEAF and (2) that the application named Barbara Sanders as the applicant/owner but that Sanders did not have a bona fide intent to use the mark. The second issue is the focus of this article. During a deposition Barbara Sanders admitted that she intended to use the LEAF RELEAF, not by herself individually, but together with her husband. In other words she intended to sell products under the LEAF RELEAF together with her husband in a partnership and not on her own.

It is a general principle of law that when two or more people join together for the purpose of making a profit, they have formed a partnership. This can be true even if there is no written agreement between the two or more people. Further, Barbara Sanders used the word partnership to describe her and her husband’s affiliation regarding the products to be sold. Therefore, the proper applicant for the trademark application was the partnership comprised of Barbara Sanders and her husband.

Section 1 of the Trademark act requires that the application be filed in the name of the trademark owner. When the owner named on the application is not the person or entity that intends to use the mark or actually is using the mark, then the application is void and the registration will be refused. See also Trademark Manual of Examining Procedure § 803.06.

In the American Forests case, Barbara Sanders’ application was found to be void and Sanders lost the opposition and her application. The rule is rather strict. You see here even though Barbara Sanders was going to be using the mark (together with her husband), she was not the proper owner because it was actually a partnership between her and her husband that was legally recognized as intending to use the mark.

Start-up Owner Problems
Another situation where this issue arises is in start-ups. Often an entrepreneur will come up with a name for their company or product before the company (LLC or Corporation) is legally formed. Once a name is chosen early filing of an intent-to-use trademark application is encouraged so that someone else doesn’t file an application on the same or similar name and block you from using your name. However, if an entity is not yet formed, filing an application in the name of a non-existent entity is not a good idea. And, if the individual does not intend to sell products/services himself or herself before the legal entity is formed then, like in the American Forests case, the individual or individuals would not be proper applicants.

Who is the Owner?
A good question to ask to determine the owner is: who will receive revenue from the first sales? If it is a company, then the company should be the applicant. If the company is not formed, then it may be necessary to first have the company legally formed. Then a trademark application can be filed in the name of the company that will own, control, and realize revenue from the sale of products/services under the mark.

Exceptions for Minor Errors
Some exceptions exist that allow minor errors in the owner’s name to be corrected. However it is best to ensure the owner is properly named. You should contact a trademark attorney to determine whether errors in your case are correctable.

Circumstances of your company or start-up enterprise need to be considered in order to determine who should be named as the owner on a trademark application and whether other steps (e.g. forming the legal entity) are needed before a trademark application is filed.

Protecting Unpatentable Inventions

Not every invention is patentable. Yet, inventors and companies may decide to proceed to market with an unpatentable products or services. This article will explore other intellectual property protection options that exist beyond patents.

Build a Brand
In many cases customers purchase a product or service because it is provided under a recognized brand name. This may be true regardless of whether the product or services is patented. Therefore you may decide to choose a strong trademark for the product or service. Then you can market that trademark so that customers associate that trademark with the type of product or service you are selling. The goal is to build a brand so that consumers will seek out that brand when purchasing your goods or services. In this way customers will choose your brand of product, even if there are competitors selling the same or similar products/services.

The brand can be built around a product/service name or around a company name or both. If the names used in your branding are unique (they should be), then you can seek to obtain a federal trademark registration which will provide additional benefits. The trademark rights built around your product or service will not prevent competitors from copying the product or service. Yet it will prevent them from using your trademark or a similar mark. The strategy of building a brand is designed to draw customers to your brand regardless of the competition.

It may be possible to protect your invention under copyright law. However, copyright protects the expression of an idea but not the idea itself. Therefore if you write software creating a new type of application, copyright protection will protect you from direct copying of the software. But it cannot prevent others from copying the idea and writing their own implementation of that idea. The copyright protection extends somewhat beyond identical copying, but the point is that copyright provides narrow protection of the expression of an idea as compared to patents.

Trade Secret
When an invention cannot be patented, it might be protectable as a trade secret. Not all inventions are capable of being protected as a trade secret. A trade secret may generally be understood as something that has economic value, is not generally known, and is subject to efforts to maintain it as a secret. Therefore, if the invention is embodied in a product that is distributed to the purchasing public and whom can reverse engineer or discover the invention by inspecting the product, then it is unlikely that the invention can be protected by a trade secret. However, if the invention is capable of being maintained in secrecy, then trade secret protection might be relied on.

It is possible to draft a contract that requires the party receiving the invention to keep it confidential and not disclose it to others (similar to an NDA). This is more likely to occur with business to business transactions where the sale involves significant money or resources to execute or implement. The other party would need to agree to such a confidentiality term.

This does not work with consumer goods because the product often needs to be marketed broadly and publicly where the invention details may be disclosed.

There are a number of alternative approaches to protection when your invention is not patentable. While each alternative is not a complete substitute, the options above may provide some protection when proceeding with a product or service in the absence of a patent, depending on the circumstance.

Problems with Requiring an NDA Before Pitching Your Invention

At the outset of product / service development there is often a tension between the desire to keep the invention confidential and the desire to know whether there will be sufficient interest in the invention from customers or those who might make and sell it to customers. Therefore the issue arises as to how to protect an invention early in the product development, partnering, or sale process.

There are three ways of proceeding: (1) first file a patent application before any disclosures to third parties, (2) disclose to a third party only after obtaining a signed nondisclosure agreement (NDA), (3) disclose without an NDA or application filed and hope for the best. The first is the most preferred and the last approach is not recommended.

Difficulties with NDAs Before Sales Pitch
Disclosure of an idea to another party that is under a written obligation (e.g. NDA) to maintain that idea in secret, generally will not be considered a public disclosure that would negatively impact your patent rights. However, if you are attempting to approach a company to (1) convince them to make and sell your product and give you a royalty or (2) to sell a product you will make, it may be very difficult to get them to sign an NDA or other legal agreement before you tell them anything about your invention.

This is true because, unlike when you are approaching an engineering firm, here you are not offering to pay the other party any money. You are essentially saying, “I have a great product or service that will make you money, but before I tell you anything about it, I need you to sign this legal agreement.” This is a difficult selling approach.

If they sign that agreement and then find out that your product is very similar to something they are already working on this creates a problem because you may assert that when they come out with that product that they copied your invention. Or if they just don’t like the idea, they are still encumbered by the NDA for any further developments. It would seem that there’s little incentive for them to sign an NDA with you, especially if they receive many similar solicitations from other inventors or companies. Therefore, if your sales pitch starts by requiring the recipient to sign a legal agreement before further discussions, you may not have very many takers.

If you do get the other party to sign an NDA, you should know that NDA’s are not self enforcing. Therefore, if the other party breaches the NDA it will be necessary for you to spend money in the form of legal fees to enforce the agreement or to recover damages. As such, you should investigate the trustworthiness of the other party.

Patent Application Filed First
The first option, having a patent application filed first, is the safest approach. Patent law encourages early filing of patent applications. This assumes that the invention is develop sufficiently to support a patent application filing. See this article on whether your product needs further development before filing a patent application.

If your product needs further development and such development requires the assistance of outside engineers or product developers, then you should use a written nondisclosure agreement when engaging such outsiders to help develop the invention. Also, you should ensure that the terms of any engagement with such providers specifies that you will own any developments and inventions that they might create under the engagement. Outside engineers and product developers are generally more willing to sign an NDA, because you are usually paying them money in return for their services. Further, their business revolves around developing products and they should be used to signing such agreements.

Regarding marketing, if a patent application, preferably one drafted by a patent attorney, is filed that adequately covers your invention then from a patent perspective, you are no longer required to keep your idea secret. You may instead may go exploit your idea publicly. In fact, as it can take years to obtain a patent, inventions are usually commercialized and marketed after a patent application is filed but before a patent is granted.

It can be difficult to engage in a sales approach with another when your first request is to sign a legal agreement before providing information. Having a patent application filed before making a sales pitch is generally the best approach. Service providers, such as engineers and developers, are generally more likely to sign an NDA as they are being paid for their work and they may regularly assist in invention development.

Can I Add New Invention Developments to My Previously Filed Patent Application?

Many times a company or individual will further develop a product / service / invention after a patent application is filed on the original invention. In that scenario the question arises whether the further development (new developments) can be added to the original patent application or otherwise be protected by the original patent application. Generally, new matter, not supported by the original application, cannot be added to a patent application after the application is filed. However, there are a number of ways to protect new developments after a patent applications filed on the original invention.

Covered by the Original Patent Application
The first step is to determine whether the new developments are covered by language in the originally filed patent application. Your patent attorney will generally attempt to draft a patent application that covers your idea and provides reasonably broad protection at the outset within the bounds of known prior art. Therefore your first application might be written in such a way as to cover the new development. If the original application was written broadly enough to cover the new developments a decision might be made that an additional patent application filing to cover the new development is not necessary.

It is sometimes a difficult decision whether to file a new application with the new development. It’s possible that the original patent application includes broad language that would cover the new development but the original application does not include specific details describing all the various components of the new development. In this scenario where the new developments are broadly covered but not specifically described, there is a risk that the broad language can not be used in a claim because of limiting prior art that requires more specific language not coving the new development.

If they novelty search was performed, the patent attorney may know well the boundaries of the prior art in order to assess whether or not the specific details of the new development are necessary in a patent application. However if a search was not performed it is oftentimes not known the prior art that the examiner will use, and therefore not known whether more narrow specific language would be necessary. In many cases, a new application can be pursued out of caution if the inventor/company determines there is a business case justifying the costs of a new application.

New Application
If it is determined that the original patent application does not cover the new development or that the new development has an importance such that additional details regarding the new development should be included in a patent application, then filing a new patent application should be considered. Often times such a new patent application will include much of the subject matter of the original application in addition to the new developments.

Subsequent Provisional Application
If the original patent application was a provisional patent application and the new development has come to light within one year of the filing date of the original patent application then there is an option to file the new development as a provisional patent application. It is possible that many provisional applications can be filed on new developments during one year beginning from the date of the first application filed.

On or before the one year anniversary of the filing date of the first provisional application, a non-provisional application can be filed with the subject matter of the first and one or more intervening provisional applications. In other words, all of the provisional application subject matter can be rolled into one non-provisional application as long as that one non-provisional application is filed within one year of the earliest filed provisional application. Alternatively, multiple non-provisional applications can be filed containing the subject matter of corresponding provisional applications.

Continuation-In-Part Application
Often times it is suggested to file a continuation-in-part (CIP) patent application so that the new subject matter can be included with the subject matter of the originally filed patent application while claiming priority to the original application. This can be done in the case that the originally filed patent application was a non-provisional application.

However many times filing a CIP application provides the inventor or owner with no additional benefits and shortens the patent term of the resulting patent, when compared to filing a new application that does not claim any priority to the original patent application.

CIP applications may be advisable when the application will include claims directed to both the original subject matter and separate claims directed to the original subject matter plus the new developments. Determining whether a CIP is appropriate is a complex issue that involves the determination of claim strategy and filing dates. Therefore you should work with your patent attorney to determine whether a CIP is the right strategy for you.

Non-Provisional Application
If the new development is new and patentable over the disclosure in the original patent application, then a new non-provisional application could be filed containing the new developments without claiming priority to the original application.

New matter not supported by the original disclosure in the original patent application generally cannot be added to that original patent application after the patent application is filed. However, as explained above there are numerous options for covering new developments that arise after a first patent application is filed on the original invention. You should consult with a patent attorney on whether the subject matter of your new development is covered by the original patent application filed, or whether filing a subsequent provisional, filing a continuation in part application, or filing a new non-provisional application is the appropriate path for your circumstance.

Do I Qualify for Small Entity Fees at the USPTO?

The USPTO has three fee categories: large entity, small entity, and micro entity. Previously I wrote about micro entities that usually get a 75 percent reduction from the large entity fees. If you don’t qualify as a micro entity, you might qualify as an entity, which usually gets you a 50 percent fee reduction.

USPTO rule 37 C.F.R. 1.27 defines which persons, small businesses, and nonprofit organizations qualify as a small entity. An owner of a patent application or a patent is entitled to small entity status only if, the owner is:

  • A person … meaning any inventor or other individual ( e.g., an individual to whom an inventor has transferred some rights in the invention) who has not assigned, granted, conveyed, or licensed, and is under no obligation under contract or law to assign, grant, convey, or license, any rights in the invention. An inventor or other individual who has transferred some rights in the invention to one or more parties, or is under an obligation to transfer some rights in the invention to one or more parties, can also qualify for small entity status if all the parties who have had rights in the invention transferred to them also qualify for small entity status either as a person, small business concern, or nonprofit organization under this section.
  • A small business concern . . . meaning any business concern that:
    • (i) Has not assigned, granted, conveyed, or licensed, and is under no obligation under contract or law to assign, grant, convey, or license, any rights in the invention to any person, concern, or organization which would not qualify for small entity status as a person, small business concern, or nonprofit organization; and
    • (ii) Meets the size standards set forth in 13 CFR 121.801 through 121.805 to be eligible for reduced patent fees.
      • Section 13 CFR 121.802 provides that a small entity small business concern is an entity that has 500 or less employees, including affiliates and,
      • has not assigned, granted, conveyed, or licensed (and is under no obligation to do so) any rights in the invention to any person who made it and could not be classified as an independent inventor, or to any concern which would not qualify as a non-profit organization or a small business concern under this section.
      • The definition of who counts as an employee and an affiliate for the purpose of determining the 500 employee limit is defined by several Small Business Association regulations. See, e.g. 13 C.F.R. 121.103, 121.106. If your business, including employees of any affiliate, subsidiary, or parent company, has near 500 employees, it is best to pay the large entity fee.
  • A nonprofit organization … meaning any nonprofit organization that:
    • (i) Has not assigned, granted, conveyed, or licensed, and is under no obligation under contract or law to assign, grant, convey, or license, any rights in the invention to any person, concern, or organization which would not qualify as a person, small business concern, or a nonprofit organization; and
    • (ii) Is either:
      • (A) A university or other institution of higher education located in any country;
      • (B) An organization of the type described in section 501(c)(3) of the Internal Revenue Code of 19 86 (26 U.S.C. 501(c)(3)) and exempt from taxation under section 501(a) of the Internal Revenue Code (26 U.S.C. 501(a));
      • (C) Any nonprofit scientific or educational organization qualified under a nonprofit organization statute of a state of this country ( 35 U.S.C. 201(i)); or
      • (D) Any nonprofit organization located in a foreign country which would qualify as a nonprofit organization under paragraphs (a)(3)(ii)(B) of this section or (a)(3)(ii)(C) of this section if it were located in this country.

Federal Government
If a person or small business concern licenses rights in an invention to the federal government/agency, then depending on the circumstances that person or small business concern may or may not qualify as a small entity. Generally the federal government or agencies of the federal government are not considered small entities. MPEP 509.02. Therefore, licensing to the federal government might prohibit you from claiming small entity status.

However, there are some exceptions for certain licenses. For example, a “person” under the above definition that licenses rights to a federal agency under Executive Order 10096 may still qualify as a small entity. Further a small business concern or non-profit may still qualify as a small entity if they license to a Federal agency resulting from a funding agreement with that agency pursuant to 35 U.S.C. 202 (c)(4).

Loss of status
Once small entity status is claimed it will continue in an application until an issue fee is due or maintenance fee is due. 37 C.F.R. 1.27(g)(1). Therefore, a new determination of small entity status needs to be made at the time issue fee is due or maintenance fee is due. A notice of loss of small entity status must be filed, if such status is lost, when paying an issue fee or maintenance fee. The paying of the large entity fee alone is not sufficient. Id. at 1.27(g)(2). A new assertion of small entity status is required in any continuation or divisional application. MPEP 201.06(c)(VIII).

Erroneous Claims
Claiming small entity status when an applicant or patent owner is not entitled to it could be considered fraud on the patent office and could negatively impact the owner’s patent rights. 37 C.F.R. 1.27(h). Therefore it is important to ensure that a claim for small entity status is made only when the owner qualifies.

File Patent Applications Early and Do Not Rely On AIA Grace Period

Before the America Invents Act (AIA), an inventor had a one year grace period between the time of first public disclosure by the inventor of the invention and the time a patent application was required to be filed.  A grace period is provided under the AIA, but for the reasons explained above, the best practice is to avoid relying on the grace period and to file an application early before public disclosures or uses.

Explaining The Grace Period
The grace period provided in 35 USC 102(b)(1)(A) provides that the inventors own disclosure made less than one year before the filing of a patent application will not be prior art against the inventors patent application. Sections (b)(1)(B) and (b)(2)(B) provide that if the inventor (or a third party who obtained the subject matter from the inventor) first discloses the subject matter, then later disclosures (or later filed third party application) of the same subject matter within a year will not be prior art against an inventor’s later filed application on that subject matter. Section (b)(1)(B) and (b)(2)(B) therefore purportedly provides a later filing inventor the ability to overcome a prior disclosure (or patent application) by a third party.

For example, if an inventor Joe publicly disclosed an invention having A, B, and C. Then a subsequently filed US patent or published application by another inventor Bob discloses A, B, C, and D. Under the 102(b) grace period exception, only element D of Bob’s intervening application would be prior art against Joe’s later filed patent application. Bob’s application could not be relied to reject A, B, and C of Joe’s patent application.

But there’s a catch.

Narrow Grace: Only Identical Subject Matter According to USPTO
The USPTO interpreted the law to require the third party’s disclosure be the “identical subject matter” of the inventor’s invention. 78 CFR 11061. This is a narrow view of what prior disclosures can be overcome. Under the prior law, any disclosure including both identical disclosures and disclosures that were not identical, but were an obvious variant, could be excluded as prior art by proving an invention date (with diligence) before the date of the third party disclosure.

Now, under the AIA, the USPTO concluded that the grace period does not cover obvious variants only identical subject matter disclosure. There is debate whether the USPTO is correct. However, it will likely take years before a court rules on whether the grace period should cover obvious variants.

In response to comments made during rule making, the USPTO clarified that there is “no requirement that the mode of disclosure by an inventor or joint inventor be the same as the mode of disclosure of an intervening disclosure (e.g., inventor discloses his invention at a trade show and the intervening disclosure is in a peer-reviewed journal).” 78 FR 11035, 11079. The USPTO further stated that there is no requirement that the disclosure by the inventor or a joint inventor be a verbatim or ipsissimis verbis disclosure of an intervening disclosure in order for the exception based on a previous public disclosure of subject matter by the inventor or a joint inventor to apply. id. The USPTO further stated, “the exception [grace period] applies to subject matter of the intervening disclosure that is simply a more general description of the subject matter previously publicly disclosed by the inventor or a joint inventor.” 78 FR 11035.

So the disclosure does not have to be verbatim, but how far from verbatim can we go? In other words, how “close” does the disclosure need to be to the inventor’s invention for the grace period exceptions to apply? No one knows at this point.

The Problem Illustrated
How would a problem arise? Consider this example. Matt publishes the details of his invention on the Internet. Jake reads Matt’s disclosure and thinks of a way to improve Matt’s invention in an obvious way. Jake publishes the obvious improvement to Matt’s invention within one year of Matt’s first publication. Matt then files a patent application on his invention within one year of his first publication of his invention on the Internet.

The USPTO might reject Matt’s patent based on Jake’s publication, given that Jake’s publication (of the obvious improvement) was not identical to Matt’s invention. This is true even though Jake’s improvement is based on Matt’s first publication of his invention on the Internet.

Conclusion: File Early
Given the USPTO’s interpretation of the grace period exception, it is important to file a patent application early. Further, if there is ongoing development for an invention, the ongoing developments should be covered by subsequent patent filings as they are invented or refined so that the new subject matter will have the benefit of an early filing date. The problems is that you don’t know what others might independently be doing independently or after seeing your disclosures.

If you have disclosed your invention, you’re not necessarily out of luck given the grace period. But you are in a riskier position. The safest approach is to file early and do not rely on the grace period.

Invention Evaluation Factor: Dancing on the Edge of Failure

SONY DSCHow do you know whether your project / invention is worth continuing to pursue or whether to start in the first place? There are many factors that you might consider when determining whether to pursue a project / invention. One question you might want to include in the mix is whether your invention / project makes or has ever made you feel like you are dancing on the edge of failure.

I consume a lot of content on the topic of innovation and entrepreneurship. Recently I was listening to a podcast series called Seth Godin’s Startup School. There Seth provided that great characterization “dancing on the edge of failure,” which is applicable to the important engaging work carried on by innovators.

Dancing on The Edge of Failure. In episode 10 of the podcast, titled Tactics, Seth talks about finding one’s purpose. Seth asserts that you really feel alive and engaged–not because you were born to do a certain thing or endeavour, such as playing the guitar, paving the street, or running a kids shelter–but because you are dancing on the edge of failure in a particular endeavor.

I think “dancing on the edge of failure” is a great descriptor for challenging and engaging pursuits of life. The image created by the phrase “dancing on the edge of failure” is a mix of excitement combined by the seriousness and focus it takes to be on an edge, especially an of edge of failure. You might succeed or you might not, but the opportunity for success is energizing and focusing at the edge. Endeavouring on a project that is not safe and known brings a level of excitement and interest. Dancing on the edge of failure is not meant to imply recklessness or a lack of planning and due diligence, but rather effort on a challenging endeavour that is not a sure bet.

I see the effects of dancing on the edge of failure in my innovator and entrepreneurial clients. The mix of energy, excitement, and hard work brings an invention from conception to market. Clearly, new inventions generally have a higher risk of failure than the tried and true.

Innovation at the Edge. Innovation often occurs at the edge. This is because if you’re too far outside of the box, the components necessary for your innovation to be adopted might not be available or your innovation might not be accepted by your customer base because its too far out there. On the other hand, if your innovation is in the box, it may not be sufficiently new to generate interest or success. Therefore success is often found at the edge.

I transcribed the following excerpt of the podcast where Seth talks about dancing on the edge of failure:

[14:14] I think there’s a reason its hard to scale. ….  [14:40]  I don’t think there are many answers here, I think largely there’s one. And this is what the Icarus Deception is about. I think that the purpose for just about everybody, when they feel like they have achieved their purpose, has nothing to do with to play the guitar, to pave the street, to run a kids shelter. I mean none of that is in our DNA, right? I think it is to dance on the edge of failure. I think that when people are dancing on the edge of failure and their growing and there is a void over there but they keep moving forward—that’s when we feel alive as people. There’s a few people that don’t have that. Its been boiled out of them or raised out of them or whatever. But generally it’s that getting close to the precipice that I think is ingrained in who we are as people.

So when you talk in the persuasive way you have, lots of people sign up for the Linkedin group. But then, they are safe to quit. It is easier to quit than it is to stare down the abyss. Its easier to quit then to do that dance. . . . . That in fact our purpose is in finding the thing that we did that we didn’t think would work an hour ago and now its working well enough to wonder what the next thing is and keep that cycle going. And the magical ironic punchline is the internet is making that easier than ever for 1.5 billion people. The explosion we are about to see, I think, is not the explosion of industrial job creation it’s the explosion of people who figure out, whether there is money involved or not money involved, how to do that scary thing, whatever that scary thing is.

[Seth Godin’s Startup School, Episode 10, Tactics (emphasis added)]

Innovation often happens through those who are willing to dance on the edge of failure. What projects allow you to dance on the edge of failure?

Photo by flickr user thebarrowboy licensed under this creative commons license.

Micro Entity Status at USPTO

The American Invents Act (AIA) authorized a new fee category, micro entity, directed to reduce fees for individual inventors and small companies. Previously, there were only two fee categories: Large entities that pay full fees, and small entities that usually pay half the fees of the large entity. Micro entities are provided a 75 percent reduction from the large entity fee rate.

To qualify as a micro entity, the applicant must meet all the items under one of the two sets rules.

Rule Set 1 (Income Limit):

  1. Each applicant qualifies as a USPTO-defined small entity under 37 C.F.R. 1.27.
  1. Each applicant is not named on more than four previously filed applications. However, the following application do not count: (a) applications that the applicant has assigned, or is obligated to assign, ownership rights as a result of previous employment (not current employment), and (b) the application was filed in another country, was a provisional application, or was an international application for which the basic national fee was not paid.
  1. Each applicant and joint inventor does not have a gross income more than three times the median household income in the previous year from when the fee(s) is paid. The limit as of August 2013 is $150,162, but this will change each year based upon United States household income. According to the USPTO FAQ page, if there are multiple inventors, the inventors income is not added together, but instead each inventor/applicant must not exceed the income limit.
  1. Each applicant has not (a) assigned, granted, or conveyed a license or other ownership to another entity that is not a micro entity, and is not (b) under an obligation to assign, grant, or convey a license or other ownership to another entity that is not a micro entity.

Rule Set 2 (Higher Ed.):

  1. Each applicant qualifies as a USPTO-defined small entity under 37 C.F.R. 1.27.
  1. The applicant has assigned, granted, conveyed, or is under an obligation by contract or law, to assign, grant, or convey, a license or other ownership interest in the application to an institution of higher education as defined in 20 U.S.C. 1001(a).

Under rule set 1 many will not qualify because of the income limits and rights transfer limitations. Rule set 2 applies to universities and their employees.

Under the current fee schedule, it will cost a small entity $730 (Basic fee $70 + utility search fee $300 + utility examination fee $360) to file a utility patent application without excess claims. In contrast, it will cost a micro entity $400 (basic fee $70 + utility search fee $150 + utility examination fee $150). A large entity will pay $1600 ($280 + $600 + $720) for the same filing.

Zynga Sues “Bang With Friends” Hookup App Maker for Trademark Infringement

Filed in the “good luck with a trademark fight based that name” department comes Bang With Friends, Inc. (BWF) and their casual sex app of the same name. The app is designed to discreetly connect a user with the user’s facebook friends who also have the Bang With Friends app and are interested in hooking up with them. The BWF website says “Your friends will never know you’re interested unless they are too.” Classy.

Not surprisingly, on July 30, 2013, Zynga filed a trademark infringement complaint against BWF alleging infringement of Zynga’s “with friends” trademarks. Zynga Inc. v. Bang With Friends, Inc., No. 13-cv-3517 (N.D.Cal., July 30, 2013). Below we’ll look at what can be learned about brand protection from this case, but first a background on the case.

A Caffeine and Alcohol Fueled All-nighter. According to the Complaint, the Bang With Friends app was created by “three twenty something men over the course of a night and with the help of ‘a lot of Red Bull and Vodka.’” The complaint is written–like any good complaint–to tell a story about the situation. Its not much legal significance that the app was developed through an all nighter fuelled by Red Bull and Vodka–but it lays a background for Zynga’s story and implies a level of outlaw wildness intended to support a showing of wrongful behavior. Yet, I imagine that a lot of software is written at night with the aid of caffeine–did anyone see The Social Network movie? Oh wait, bad example of innocent all-nighters, Facebook has been sued by others claiming its founder stole the idea for Facebook–who knows what actually happened.

Zynga’s Marks. In any event, Zynga is the maker of several social network based games with names having the term “with friends”, such as, Words With Friends, Scramble With Friends, Hanging With Friends, Chess With Friends, Matching With Friends, Gems With Friends, and Running With Friends. Zynga has several federal registrations of marks having the terms “with friends”. Zynga also has a registration over the mark “with friends.”

Who’s First.  Trademark rights accrue to those who first start using the Mark in commerce (in business). Zynga’s “Words With Friends” trademark application claims a first use date in 2009.  Zynga’s “with friends” trademark registration claims a first use date in 2010. According to the complaint the BWF app was launched in January 2013. Zynga likely wins the who’s first battle.

Media References and Recognition. BWF could attempt to show that many others use “with friend” term for apps and therefore Zynga does not own the mark. However, this path seems doubtful. Many times in lawsuits, professional surveys are conducted in order to assess the level and the extent that consumers recognize a given trademark as identifying a source of goods and services. In this case, media coverage has partially done the job of surveys showing such an association. The complainant cites national media coverage of the “Bang With Friends” app that compares it to the Words With Friends or other Zynga “with friends” applications based on the name. This is harmful to the BWF case because it shows that the public finds an association between Bang With Friends and Zynga’s “With Friends” applications. In other words, the public associates the “with friends” words with a source–Zynga–of the game applications previously having those words. This is an indication that Zynga has developed trademark rights (e.g. “secondary meaning” or “acquired distinctiveness”) in the name even apart from the federal registrations.

Given the widespread success and popularity  of the Zynga games having the “with friends” wording and the fact that Zynga was the first used the mark vis-à-vis Bang With Friends Inc., it is likely that Zynga has relatively strong trademark rights in the “with friends” mark. In other words, its likely Band With Friends will be changing their name relatively soon.

Oh no, I Can’t say “with friends” anymore? At this point in the discussion of many trademark cases, this question is often heard bantered: “So, now no one can say ‘with friends’ because Zynga owns it? That’s stupid.” — False. Zynga cannot prohibit all uses of the words “with friends.” Zynga’s rights, if proved, extend to protecting the use of “with friends” when that phrase is used as a trademark, e.g. when it’s used to identify a source of goods or services. Therefore if you say “I’m going to hang out with friends tonight,” you are not using the term “with friends” as a trademark instead you’re using it to describe the activities you are going to undertake. Think about this question: Do you think of the “words with friends” or related “with friends” apps that Zynga sells when this is said? Probably not. Are you trying to sell or promote a product or service? No. Therefore, this is not trademark infringement and Zynga can’t stop you from saying it.

App Developers Take Note: Brand Protection Is Important.  Zynga is doing with the term “with friends” what publisher John Wiley & Sons did with the “For Dummies” book series. Zynga’s choice of names for its apps and its brand strategy illustrates how a trademark, when used with an application that becomes successful, can help the developer transfer that success to subsequent applications. Here, Words with Friends, I believe, was the first app to use the term “with friends.” Zynga’s subsequent apps had names that carried the “with friends” term, which help tell its customers: “if you liked Words With Friends you might also like our next app ‘_______ With Friends.’ ” And after a while, Zynga doesn’t need to say that. Consumers know when they see an app having the term “with friends” that it’s from the source that previously brought them other apps that they enjoyed–e.g. Words with Friends. That’s the power of a strong brand.

Trademark Policing is Necessary. When a mark becomes popular an investment is needed in order to police it as Zynga has done in this case. Not only has Zynga incurred legal fees to file this suit against Bang With Friends, but according to the Complaint they’ve had to file oppositions at the Trademark Office to prevent others from registering similar marks. Stopping others from infringing your mark is generally known as trademark policing. It prevents others from misappropriating the goodwill that has been developed under the “with friends” marks. Further, if a mark goes unpoliced and many third-parties start using the mark, the trademark owner can lose rights in the mark because the mark no longer functions to identify a single source of goods/services. Therefore, trademark law encourages, and in fact requires, trademark owners to police their marks if they want to maintain the trademark rights they have developed.