At one point in Kodak’s long history it held a near monopoly on film and produced such high margins of return that it would share these profits with its workers on “wage dividend days.” Initiated by Kodak founder George Eastman, on these days, all employees would receive bonuses based on results. One former employee compared Kodak in its heyday to Apple or Google of present. Young, highly talented employees could be found at lunch time watching a movie in the corporate campus’s on-site movie theater, or playing basketball on the company’s courts. It seemed unimaginable at the time that Kodak could ever be on the verge of bankruptcy. Some of Kodak’s most notable technological breakthroughs over the last 100 years or so include the invention of roll-film by George Eastman, the mass production of inexpensive “pocket-cameras,” the first 35 mm color film, the first megapixel sensor capable of producing picture quality prints, the first digital camera, the first organic light-emitting diode (“OLED”) display, and the first Wi-Fi enabled digital camera capable of emailing pictures from the camera itself.

The first digital camera

Despite all of these amazing technological advances Kodak has not been able to capitalize on its inventions or adjust its business model after the decline of its market share in film in the 1980’s. In the last five years, Kodak has become a patent troll. In order to raise money it began enforcing its intellectual property rights and was quite successful. Overall, Kodak made around $1.9 billion between 2008 and 2010 through litigation and licensing of its IP. That money was used to keep the company afloat while it invested in its newest endeavor—printers. Kodak has had a tough time though turning a profit in the printer business and, while sales are up, the printers are still being sold at a loss to the company and income from the IP litigation has begun to run out.

The company is still litigating a major case in front of the International Trade Commission (“ITC”) against Research in Motion (“RIM”), the maker of the BlackBerry cellphone, and Apple over technology in their smart phone cameras. Kodak believes that this case could generate close to $1 billion in licensing revenue if successful. In its complaint, Kodak noted five allegedly infringed patents with two of them relating to the previewing of captured digital images. Kodak specifically requested that the ITC exclude from entry into the U.S. any RIM or Apple mobile device that infringes on these patents. Apple responded by filing patent counter-claims in a U.S. district court and in the ITC. The Commission decided not to review an ITC administrative judge’s ruling that Kodak did not infringe on Apple’s patents, but it affirmed in part, reversed in part, and remanded in part an administrative judge’s conclusion that Apple and RIM did not violate any of Kodak’s patents either. The original court date was set for August of this past year, but due to a judge’s retirement in the case, it has been postponed to September 2012.

“In keeping with the situation”… what better time to recap the exhaustive year of developments in the IP world.  Two thousand eleven saw a great many changes.  The looming presidential election, bickering among political sides, and intense involvement from vocal lobby groups forced a surge of lawmaking; new technologies exploded onto the scene—and, of course, caused some fighting among industry powerhouses; people continued to struggle through the financial crisis, finding ways to muddle through using—or not using for Louboutin and YSL—trademark law.  This was a year of starters, of new beginnings, but also of significant losses.  Only time will tell the extent of the benefits or damage the 2011 changes will have.

Below are ten topics addressed by courts, legislators, and people generally in this eleventh year of the New Millennium that I found particularly interesting…

1. For the first time ever, Americans were encouraged to invent!  President Obama signed the American Invents Act into law on September 16, in the hopes of speeding up the patent process for entrepreneurs and small businesses.  The Act was generally met with praise by commentators, but concerns over confusion, mischief, and stymied institutional research hang overhead.

2. Two proposed anti-piracy acts—the Protect IP and Stop Online Piracy Acts—caused and continue to cause quite a stir as Congress debates the bills.  The Protect IP Act, which would effectively allow the government to halt financial transactions with rogue, infringing websites, elicited strong reactions from left-wing groups bent on protecting civil liberties.  SOPA, a related bill, would require Web hosting companies to police their sites for infringing content.  Not surprisingly, providers of hosting services strongly oppose the bill.  The Senate will vote on the bills on January 24, 2011, before which pirates and privacy hounds will surely continue to join forces to quash their passage.

3. Visions of Louboutins danced in counterfeiters’ heads as S.D.N.Y. Judge Victor Marrero refused to honor the Louboutin’s broad trademark in the color red.  Marrero stated, “[a]warding one participant in the designer shoe market a monopoly on the color red would impermissibly hinder competition among other participants” and compared Louboutin’s attempts to enjoin rival Ives Saint Lauren from utilizing the bright-colored soles to Picasso suing Monet for use of a particular shade of indigo.

4. Google was repeatedly reminded that “with great power comes great responsibility” in a string of various lawsuits filed against the search giant.  Judge Denny Chin set a trial date of July 2012 for the lengthy Google Books litigation.  Oracle sued Google over allegation of patent infringement of its Java and Android platforms.  PayPal filed suit against Google in May for stealing trade secrets.  Feeling left out, the FTC joined in by launching its “most comprehensive antitrust investigation” against the Internet kingpin.   Better luck next year Google.

5. The continued financial crisis motivated some to do-it-themselves.  For $275, individuals can successfully register their own trademarks with the USPTO.  Good news for small businesses in an economy where money is just about as tight as it can be, but not such good news for those trademark attorneys out there.  Never fear attorneys, you are still needed for the complicated stuff, because “not all registrations are created equal.”

6. Occupy Wall Street was big news in 2011.  In fact, organizers of the “movement,” as well as a number of other groups, including one Long Island couple, filed for a trademark of the slogan “Occupy Wall St.”  Because nothing says protest like a new t-shirt.

7. For websites like the Huffington Post, which essentially are online sources composed entirely of refurbished news, a flurry of concerns over the extent of fair use emerged in 2011.  How much copying is too much copying?  Isn’t it enough if you give credit where credit is due?  Does it matter how “hot” the news is?  Questions like these have yet to be answered by any legal authority—and possibly to the benefit of blog sites everywhere, (including this one)—but with the insurgence of more second-hand reporting and blog sites, coupled with the failing print news industry, the scope of fair use is likely to require a clear(er) definition in the near(est) future.

8.  2011 also had its share of losses, notably with the deaths of Steve Jobs and other technology innovators.  Local and national video stores dropped like flies upon the rapid emergence of “Internet subscription services for enjoying movies and TV shows,” like Netflix—which unfortunately has also taken a dive in recent months.  But luckily, the wheels of innovation have kept turning and spitting out new technologies everyday, like Apple’s improved face-recognition software.  Read about other top tech stories here.

9.  The end of an era approaches.  In 2011 the impending return of song rights to musicians made big news.  The 1970s amendments to the Copyright Act provided for termination rights, allowing artists to regain control of works after 35 years. Although this was a huge story in 2011, the amendments to the Copyright Act didn’t take effect until 1978 so they won’t actually affect anything until Jan. 1, 2013.  But it was still worth a mention on this list.  As the New York Times reported: “‘Everyone is adopting a wait-and-see posture. But that can only be maintained for so long, because the clock is ticking.’”

10. And finally, for you sports buffs out there, in case you have forgotten, lots of things happened before Joe Paterno was fired and the NBA started up again.  Out of fear that I will botch the terminology, check out this incredibly detailed recap of the year in sports here.

11. And finally, thanks to all for your contributions, suggestions, and readership over the past months.  We look forward to another fantastic year so keep checking in on the IPLJ in 2012.

We wish you and yours a very Happy New Year!

Coca-Cola’s super secret patented formula has been moved for the first time since 1925.

Read all about it here, here, and here.

Thank you to staffer Heather Crawford for the links!

But there’s a bright side to this Big Brother-esque software. From LiveScience: “[T]he Microsoft patent idea doesn’t automatically grant power to the boss or the HR department. It also envisions how workers might benefit from such monitoring software by getting feedback about their behavior directly, so that they could use it as a self-improvement tool… A cunning employer might even go further by setting up a social system with worker-assigned identification numbers, so that employees could anonymously compare themselves to colleagues in the office. Such a “gamification” system could provide workers with benchmarks for comparing their own performance scores, spur some motivational competition, and perhaps even dole out rewards for better behavior.”

Aw, you see? Being monitored George Orwell’s 1984-style could be fun! And good for business! And still really creepy!

This past week, Hothand, an Orange County firm, filed a lawsuit against Groupon and Yelp, alleging that these companies’ mobile shopping apps infringe its location technology.

The patent abstract describes it as: “A subscription-based system for providing commerce information for one or more mobile devices for one or more merchants.”  The breadth of this patent could pose an issue to the emerging location-based marketing industry. Hothand received its patent in April of 2010 and has already used it to sue Foursquare, the location-based social networking service.

Barnes & Noble claims that Microsoft charges more to license the specific patents than it does for a license to its entire mobile operating system, Windows Phone.  Yet, while all of the patents revolve around the mobile market, Barnes & Noble argues that Microsoft is really trying to defend its dominance in the desktop sector as smartphones and tablets increasingly replace PCs and Android becomes a direct competitor to Windows.

Thank you to staffer Joshua Steinberger for the WSJ link!

To be eligible for the program, a district court had to be among the nation’s top fifteen most popular venues for patent litigation, or have adopted the patent rules of its jurisdiction.  The law then required the Director of the Administrative Office of the United States Courts to select at least three districts with ten or more judges and three districts with fewer than ten.  The result is a diverse group of pilot courts.  Some, like the Eastern District of Texas or our Southern District, already swarm with patent attorneys. Others, like the Western District of Tennessee and the Western District of Pennsylvania, have heard far fewer patent cases over the last decade.  (For a thorough district-by-district breakdown of patent litigation from 2000-2010, check out Stanford Law School professor Mark A. Lemley’s illuminating article in the AIPLA Quarterly Journal.)

SDNY Chief Judge Loretta A. Preska said of the pilot program: “The Southern District has one of the largest patent caseloads in the nation; as a result, our judges are already very well-versed in patent law. However, this pilot will further refine the court’s expertise, and it will ultimately help us better serve patent litigants. We look forward to working with the Administrative Office to implement this innovative program.”

It remains to be seen just how the pilot program will affect dockets around the nation, but it is conceivable that it will result in a reshuffling of favored courts as plaintiffs seek new “rocket dockets” to efficiently dispose of their complaints. On the other hand, a major shake-up may be mitigated by the fact that the pilot program does not alter the way cases are initially assigned — case are still distributed randomly among all of a district’s judges.  The program’s innovation is that a non-designated judge may now choose to decline a patent case and have it reassigned to one of his designated colleagues.  As it was originally conceived, the program would also have offered additional hiring funds to participating districts, thereby alleviating the burden on staff and perhaps expediting cases.  However, the funding provisions were cut from the bill as it was ultimately approved.

It will be about five years before Congress receives an official report on the relative success of the pilot program.  But in the increasingly complex realm of patent litigation, the initiative is already welcome.

Amit’s next article analyzes the effects of In re Seagate Technology, LLC, a Federal Circuit opinion that changed the standard for proving willful infringement in patent cases.  Amit co-authored the article with Joseph Casino, a partner at Amster Rothstein & Ebenstein.  The authors examined all cases that cited to the Federal Circuit opinion to determine the type of conduct that courts consider willful infringement so that practitioners can give their clients sound legal advice.

            However, there is significant debate among certain industries that the Act will benefit large corporations and harm small businesses and independent inventors.  Some of the Act’s provisions are already in effect and some will go into effect 18 months after its passage, so its ramifications are still unclear.  However, many are already speculating about how some of the Act’s more significant changes will affect the patent process and the economy as a whole.

            The first major change is that patent disputes will now be settled by a first-to-file system instead of the current first-to-invent.  It is argued that this change will put smaller companies at a disadvantage, because they can no longer be as selective in which inventions they choose to patent.  The system puts pressure on inventors to file as soon as possible, which benefits large corporations with pockets deep enough to pay for the substantial costs associated with obtaining a patent.  However, the Act also expands prior user rights for alleged infringers.  A prior use defense is now available if an accused infringer can demonstrate use of the subject matter at least one year prior to the effective date of the claimed invention.

            Even though the system has its detractors, first-to-file ends what is often a very time-consuming process of determining who came up with an idea first. The system also adds more certainty to patent litigation.  Since speed and efficiency was one of the main goals of the Act, the first-to-file system seems to be in line with Congress’s mission, as well as bringing the U.S. in line with most of the world.