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News and Analysis of the Global Innovation Scene [Research Technology Management]
[June 14, 2014]

News and Analysis of the Global Innovation Scene [Research Technology Management]

(Research Technology Management Via Acquire Media NewsEdge) Patent Reformers Take on the Trolls The past 15 months have seen the most significant changes to the US patenting process in over 60 years, with the 2013 enactment of the America Invents Act, which was intended to harmonize the American patent system with the intel- lectual property regimes of the rest of the world. This year, patent applicants face yet another sea change in Ameri- ca's approach to protecting intellectual property.

The Innovation Act, which passed the House of Representatives with a strong bipartisan majority in December 2013, aims to "protect small businesses and promote innovation" by limiting the abuse of patents by nonpracticing enti- ties (NPEs). The Senate is expected to approve its own version of the bill. The Congressional effort has the encourage- ment of President Obama, who in his January 2014 State of the Union address called for a patent reform bill that will keep business focused on innovation.

The reforms arrive at a time when the cost of patent litigation is increasing rapidly, driven in part by the activities of NPEs, often called patent trolls. A recent study by James Bessen and Michael Meurer at the Boston University School of Law suggests that such litigation has cost the American economy as much as half a trillion dollars over the past two decades. Focusing on 1,630 patent law- suits, most of which involved software, the pair found that NPEs sued more than 4,000 companies, filing single com- plaints against several firms in many cases. This type of trolling is hardly new; it dates back to at least the late 19th century. But according to Maurer, the practice has gained strength in recent years because many current patents lack the precision common in the era of novel techniques and specific inven- tions. Vaguely defined patents on soft- ware and new management methods, Maurer says, are open to such broad in- terpretation that judges have difficulty deciding whether an infringement has occurred.

The America Invents Act (AIA) in- cluded some provisions intended to simplify the patent process and, thus, reduce litigation and associated ex- penses. Perhaps the largest change in- troduced by AIA required the Patent Office to award patents to individuals who file applications first rather than those who could prove they were first to invent a patentable idea. That ad- justment, which puts the US system more in line with other industrial countries, also eliminated complex processes to determine priority among nearly simultaneous inventions.

The legislation represented an ini- tial response to concerns about the bur- geoning number of lawsuits against patent holders and the perception that the existing system permitted well- heeled infringers to outlast poorly funded start-ups that owned patents. During debate on the issue, opponents charged that the new system would benefit large technology companies with efficient-and expensive-patent offices. But the need for simplification overcame those objections.

The number of patent cases, how- ever, has continued to grow. The rea- son, according to supporters of patent reform: the act did not go far enough in countering patent trolls. Edward Black, president and CEO of the Computer and Communications Industry Associ- ation, called for further legislation. "Over the past few years, more and more American businesses, large and small, have found themselves threatened with extortive threats as patent trolls exploit flaws in the patent litigation system," he said. As a result, the companies must spend valuable time and money defend- ing themselves in court rather than hir- ing new employees and creating new products.

One thing has changed since the pas- sage of AIA; NPEs appear to have ex- panded their target group. "The targets of these lawsuits are no longer just large high-tech companies, as used to be the case," Black notes. Small and medium- sized businesses outside the technology arena now find themselves in the spot- light. Facing high legal fees, Black says, "many choose to settle even though they believe it is wrong, rather than face bankruptcy." The House of Representatives' Inno- vation Act targets the trolls directly with a new series of changes to patent law. Among them: * Plaintiffs must disclose the patent owner before litigation, thus ensur- ing that patent trolls cannot disguise themselves behind shell companies.

* Plaintiffs must explain why they are bringing suit.

* Courts will decide whether a patent is valid early in litigation, thereby preventing patent trolls from string- ing out cases involving invalid pat- ents, thus forcing defendants to settle because of lack of funds or time.

* The US Judicial Conference will rule on means of reducing the costs of discovery, another method of pre- venting patent trolls from forcing small businesses to settle cases.

* The US Patent and Trademark Office will provide educational resources for organizations facing abusive pat- ent litigation claims.

* Judges will award attorneys' fees to defendants in what they determine to be frivolous lawsuits.

Opponents of the proposed legislation make arguments similar to those made by opponents of the AIA: that the act will benefit large, well-established firms over small start-ups and hence hinder innovation. Critics point out that the legislation limits the ability of all patent holders-and not just NPEs-to assert their rights. In particular, they focus on the provision that losers in patent suits can be forced to pay the winners' fees. The possibility of huge legal bills if they lose, opponents charge, will likely dis- suade start-ups and other small compa- nies from pursuing claims that their patents have been infringed. "The clear message to little inventors," warned Re- publican Representative Dana Rohra- bacher of California, is "give thanks for your intellectual property rights, be- cause you may not have them by this time next year." Other critics assert that the proposal comes too soon after passage of the AIA. Q. Todd Dickinson, executive director of the American Intellectual Property Law Association has called for postpone- ment of the new law until it becomes clear how the America Invents Act works. "We believe that the prudent course is to give these reforms the chance to demonstrate their efficacy to deal with the concerns for which they were created before we consider mak- ing significant additional changes, which may have their own unintended con- sequences," he told a congressional com- mittee. For the moment, however, the opposition to patent trolls seems to dominate the argument-and to clear the way to further patent reform.

Peter Gwynne, Contributing Editor Boston, Massachusetts, USA Scientists Charge Into Battery Research As technology advances, the limiting fac- tor for further advancement in key areas, from wearable tech and advanced smart- phones to electric cars, is now batteries. Battery research has long taken a back- seat to computer chip R&D, arguably one of the key drivers of innovation over the past several decades. But now, driven by soaring interest in mobility of two different types-handheld or wear- able communication devices and elec- tric cars-battery research is taking off.

At a time when the pace of technol- ogy innovation seems to be increasing at an exponential rate, it seems like bat- tery innovation should be proceeding at a similar pace. So why isn't there a Moore's Law for batteries? Moore's Law, which is actually an observation, holds that the number of transistors on integrated circuits or the overall processing power for comput- ers doubles approximately every two years. The reasons for this continuous increase are twofold: electrons are small and require little space in a chip, and chip performance is largely limited by the lithography technology used to fab- ricate the chips. As lithography im- proves, ever-smaller features can be etched onto processors.

Any such law for batteries, argues Fred Schlachter from the American Physical Society in the Proceedings of the National Academy of Sciences, is limited by the fundamental chemis- try inherent in a battery's inner work- ings. Potentials in a battery, he points out, are dictated by the relevant chem- ical reactions that also limit battery performance.

Significant improvements in battery capacity can only be made by changing to a different chemistry, scientists agree. And even this different chemistry is go- ing to be governed by fundamental pa- rameters like the size of ions, which transfer charge in batteries and take up space, and the rates of chemical reac- tions and current flow, among other factors. As long as batteries rely on the electrochemical process, limitations will persist. These include low energy stor- age capability, slow charging, short ser- vice life, and high cost per watt-all significant barriers to the development of next-generation mobile devices and electric cars. Breaking through those barriers requires a much more funda- mental level of rethinking than the re- petitive application of miniaturization that has driven chip development. And the specific demands of particular appli- cations add to the challenge.

So the race is on, both to discover al- ternatives to the traditional battery and to find ways to make battery power last longer. Who's in the lead? It is still too early to say, but several pockets of ex- pertise are emerging. Silicon Valley is showing huge interest in discovering new ways to power the advanced mobile devices it envisions. Apple, for one, has been exploring ways to build a smarter battery by adding solar charg- ing and has been testing a method to charge the battery for its planned wrist- watch wirelessly through magnetic induction.

US start-ups and universities are also generating a steady flow of ideas, some just as ambitious as Apple's, if not more so, and attracting attention and venture capital. Venture capital firms Founders Fund and Andreessen Horowitz are among the investors backing the Cali- fornian start-up uBeam, which is devel- oping a system to pull energy from the air. The start-up Amprious, launched by the Stanford professor Yi Ci, is trying to replace the carbon anodes in lithium- ion batteries with silicon, which has far greater storage capabilities than carbon.

A team of researchers from the Uni- versity of Illinois has come up with a way to use 3D electrodes to build "micro- batteries" many times smaller than cur- rently available options, or the same size and many times more powerful. And researchers at the University of Washington hope to reduce the need for batteries to power certain functions alto- gether. They are working on a method for wireless devices to communicate without using any power. The tech- nique harvests energy from TV, cellular, and Wi-Fi signals already in the air.

Europe appears to be throwing its brainpower at researching new types of batteries for electric cars. The European Union is providing euro8.4 million ($11 million) in funding to the Batteries2020 project, whose goal is to increase the life- time and energy density of large-format automotive lithium-ion batteries. The project, which is part of the EU's Green Car initiative to improve the perfor- mance of electric cars, will focus on materials development, understanding aging and degradation phenomena, and routes to reduce battery cost. The target is a commercial pre-product by 2016.

Interest in high-performance auto- motive batteries is exceptionally high in Germany, home to some of the world's biggest and most profitable carmakers, including BMW, Daimler, Porsche, and Volkswagen. The manufacturers have a foot in various projects, often partnering with erstwhile rivals to re- duce R&D costs. The list is long, but two examples include the deal between BMW and Japan's Toyota to jointly re- search and develop new lithium-ion batteries and Daimler's joint venture with German chemicals and electronics conglomerate Evonik to develop similar batteries.

There's plenty of action in Germa- ny's vast public research sector, too. The Julich Research Center, University of Munster, and RWTH Aachen Uni- versity have pooled their competencies in battery research to create the newly launched Helmholtz Institute Munster Ionics in Energy Storage (HI MS). The Julich Research Center will provide euro5.5 million in funding each year to the institute, and the state of North Rhine-Westphalia will commit a total of euro11 million. A key focus will be electrolytes.

Other German groups joining the battery research fray include the Fraun- hofer Institute, the Technical University of Munich (TUM), the Karlsruher Insti- tute for Technology (KIT), the German Aerospace Center, and the Center for Solar Energy and Hydrogen Research Baden-Wurttemberg (ZWM). Germany has also emerged as the European leader in hydrogen fuel cell research. The country's National Hydrogen and Fuel Cell Technology Innovation Program (NIP) is a strategic alliance between German government, industry, and the academic community. It has a budget of euro1.4 billion and is a key contributor to the EU's Hydrogen Fuel Cell Platform.

Germany's research efforts in electric mobility are coordinated and monitored by the German National Platform for Electric Mobility. The program is headed by Henning Kagermann, a former phys- ics professor who later became CEO of German business software giant SAP. Interestingly, his chief software archi- tect at SAP for a couple of years was Shai Aggasi, who left the company earlier to launch the electric car infrastructure start-up Better Place. The Silicon Valley venture, which was funded by General Electric, Morgan Stanley, HSBC, and Is- rael Corp., filed for bankruptcy last year, underscoring the challenges of break- throughs in battery technology.

Some believe much more of the prog- ress around batteries for cell phones, tablet computers, wearable communi- cation devices, and even electric cars will come out of the labs and factories of Asian giants, like Samsung, Panasonic, and Toyota. These companies, experts say, have the scale, the funds, and the expertise to work on different types of incremental progress to reduce the cost of a battery and make it better. Samsung, for example, is designing new types of compact and curved batteries. It has also developed a new battery that uses solid electrolytes instead of the liquid or poly- mer used by lithium-ion batteries, elim- inating the risk of explosions and other safety problems for flexible electronics.

Microsoft Chairman Bill Gates re- cently acknowledged in a speech that the rate of progression in computing has, in effect, "spoiled us into mistakenly thinking that other sectors beyond digi- tal can move at the same rate as Moore's Law." That is clearly not true for batter- ies, but that isn't deterring Gates from investing in battery start-ups-five so far and counting.

Despite all the work going into the pursuit of better batteries, there is no guarantee of breakthroughs in battery technology equivalent to those seen by computer technology over the past 30 years. But if and when someone comes up with a battery that has high storage capability and long service life and is safe and easy to maintain, that porta- ble source of energy will dramatically change our lives.

John Blau, Contributing Editor Düsseldorf, Germany The Ethics and Law of Robots A driverless car makes its way through a parking lot, when a shopping cart from one direction and a baby carriage from another roll in front of the car at the same time. A human driver would likely steer away from the baby carriage and toward the shopping cart to avoid hurt- ing the baby in the stroller. The person recognizes the baby carriage as an object deserving greater care than the shop- ping cart. Would an autonomous system make that judgment or simply detect two objects of roughly the same size and shape? This is not a question for the future. Google's driverless car has been in de- velopment since 2005, and the com- pany plans to market the technology to the automotive industry. In the United States, at least four states (Nevada, Texas, Florida, and California) have ap- proved rules that permit driverless cars under certain conditions. Technologi- cally, experts agree, driverless cars could be available to consumers by 2020, but legal and regulatory frameworks aren't likely to move that fast.

Even today, modern society increas- ingly relies on autonomous systems to replace human interactions and stream- line transactions. Automated stock trad- ing, for instance, uses algorithms to execute pre-programmed "robot" trad- ing instructions-more than half of all equity trading in the EU and the United States is done this way. In May 2010, the Dow Jones Industrial Average suffered its second largest point swing when a mutual fund company entered an algo- rithmic trade that triggered a chain reac- tion as different robot traders interacted, resulting in the 2010 Flash Crash. The 1,000-point plunge recovered in min- utes, but it shocked market watchers and prompted a five-month investigation that included analysis of the algorithm trading used at the heart of the crash.

As the role of artificial intelligence in human lives expands, occurrences like this are bound to increase. Questions about the legal and ethical implications of robotic systems are becoming in- creasingly urgent.

In a recent interview, Guy Fraker, a former State Farm insurance executive and the cofounder and CEO of Autono- mous Stuff, used the driverless car case to illustrate a simple point about the ad- vancing technology of robotics: laws that regulate liability and insurance are not equipped to address the unique situations arising from the spread of au- tonomous systems. "The more we task robotics to act on our behalf," Fraker said in a recent issue of Communications of the ACM, "one of the first questions is, 'who is responsible' in the moment of truth. . . . We don't have an answer for that yet." That problem was highlighted when one of Google's cars was involved in an accident in 2011. Although the autonomous vehicle was not at fault in this instance, the incident did raise questions about how a machine could be held legally liable.

As law professor Neil Richards and computer science professor William Smart, both of Washington University in St. Louis, point out in a recent pa- per, the issue of liability is particularly fraught: "As robots become more au- tonomous, the question of where liabil- ity rests when something goes wrong is complicated. Is it the manufacturer, the programmer, the user (who gave a bad instruction), or some combination of them all?" They suggest that the ques- tions become even more complex with systems that are autonomous some of the time and tele-operated by a human at other times.

As autonomous intelligent systems proliferate, other legal questions arise. Who is responsible for losses arising from automatic stock trading based on algorithms? Who owns the copyright on sports stories written by a computer? What right do people have to know when they're interacting with an auto- mated bot on social media, as opposed to a real person? Some regulations are starting to emerge. Florida recently exempted orig- inal car manufacturers from injuries resulting from a crash involving a car modified into a self-driving car. The EU has passed regulations governing the use of autonomous emergency braking and lane-departure warning systems. Many observers see this as encourage- ment to introduce driverless cars on the continent.

Beyond liability and traffic regula- tions, however, new developments in robotics are raising questions about the ethical responsibilities of robots and those who create them. As robots emerge to, for instance, work with children with autism or help care for the elderly or hospital patients, many researchers and ethicists argue that ba- sic questions about ethics and morality and their place in the design of robots must be addressed. Aimee van Wyns- berghe of the University of Twente in the Netherlands recently published a doctoral dissertation that argued for concrete ways "to translate ethics into a tangible tool to be used by designers in the design of future robots used in healthcare." Selmer Bringsjord, director of the Rensselaer AI & Reasoning (RAIR) Lab at the Rensselaer Polytechnic Institute in Troy, New York, and fellow researcher Joshua Taylor have outlined technically specific steps toward the development of a "divine-command computational logic" to guide life-and-death decision- making for battlefield bots.

Science fiction has been dealing with these issues for decades. Isaac Asimov's Three Laws of Robotics, published in 1942, are often cited as a touchstone for human-robot interactions in the real world. The three laws suggest that all of the ethical questions regarding robot behavior rest on three principles: 1. A robot may not injure a human be- ing or, through inaction, allow a hu- man being to come to harm.

2. A robot must obey the orders given to it by human beings, except where such orders would conflict with the First Law.

3. A robot must protect its own exis- tence as long as such protection does not conflict with the First or Second Law.

Writers, roboticists, and philosophers have modified the original laws as the technology has developed. A genera- tion later, as real robots now live among us, lawyers are scrambling to codify the rules, regulations, and statutes to ac- commodate the roles robots play and will play in issues of liability, ownership, and privacy as well as social and com- mercial intercourse.

While legal experts work to ham- mer out basic rules for robots, technol- ogy ethicists are pushing for deeper considerations at the design phase. If robots are to be more than uncom- plaining workers, they argue, then their design must reach beyond tech- nology to address moral and ethical judgments. Social robots must be able to grasp the significance of a social mo- ment with a person or group of people, for example, interpret that moment through the filters of culture, language, history-even its own purpose for be- ing present-and respond in a way that is socially appropriate, legally accept- able, and ethically sound.

In short, we're on the front edge of a wave of technological change that will bring along with it deep social changes. It's not just that we'll need ro- bots that accommodate human ways of thinking. The current reconsiderations of legal and ethical codes are only the first step in building a civil society that includes machine intelligence.

Dan Headrick, Contributing Editor Research Triangle Park, North Carolina DOI: 10.5437/08956308X5703001 Other Developments in the Fight Against Patent Trolls Congress is not alone in its efforts to curb patent trolls. Presi- dent Obama made his support for the new patent bill clear in his January State of the Union address, and he has followed up with action in the form of executive actions and initiatives to simplify and clarify patents. The Supreme Court has also entered the fray, along with some states. A catalog of recent events illustrates the degree to which momentum for anti-troll reform has accelerated in past months.

JANUARY 28, 2014-In his State of the Union address, Presi- dent Obama calls for "a patent reform bill that allows our busi- nesses to stay focused on innovation, not costly and needless litigation." In a list of "Key Executive Actions" released that same day, the White House highlights plans to "protect Ameri- can innovation from patent trolls." The document promises ini- tiatives to simplify and strengthen the patent system.

FEBRUARY 20, 2014-The White House announces a num- ber of initiatives intended to reduce frivolous patent litigation. The first, a rule drafted by the United States Patent and Trade- mark Office, will seek to reduce frivolous litigation by making it easier to ascertain who actually owns a patent. The rule will require patent ownership to be recorded; the record must be updated when a patent is sold or otherwise changes hands. The USPTO is also developing an online toolkit to help com- panies targeted by patent litigation to research senders of warning letters. Finally, the White House directed the USPTO to update review processes to reduce the number of weak pat- ents that make it through the process.

FEBRUARY 26, 2014-Oregon becomes the second US state, after Vermont, to pass a bill making patent trolling il- legal. Oregon Senate Bill 1540, which makes patent trolling an unlawful trade practice in the state and allows those targeted by a troll to sue for attorney's fees, passes both houses of the Oregon legislature unanimously. The bill includes an exten- sive list of practices that constitute patent trolling. Vermont enacted a similar law in 2013; Maine and Kentucky are consid- ering similar bills.

FEBRUARY 26, 2014-The US Supreme Court hears two in- tellectual property cases focused on the issue of when a defen- dant should be awarded legal fees. US patent law has always allowed for legal fees to be awarded to winning defendants in exceptional cases, but that provision has rarely been invoked. Some have argued that awarding attorney's fees could help discourage blatantly frivolous litigation; legislation currently in Congress encourages such awards.

Tesla workers assemble a Tesla Roadster at their showroom in Menlo Park, California, in Septem- ber 2008. Tesla's cars run on a massive lithium-ion battery pack that can be recharged by plug- ging an adapter cord into a wall socket. The company announced on Wednesday, February 26, that it is searching for a site to build a battery factory to supply batteries to its Fremont, Califor- nia, assembly plant. The company is concerned that current suppliers won't be able to keep up with its demand in the future. (AP Photo/Paul Sakuma) MaryAnne M. Gobble, Editor (c) 2014 Industrial Research Institute, Inc

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