Patent suit not good for US Prius imports

Granted, the documentation of the prior art in software areas is not as great as in other areas, but that really isn't the fault of the patent system. And it is getting better and more software techniques are published. In most other areas, the prior art is pretty well knowable.

The burden of defense actually falls on the infringer (the defendant). Yes, patent litigation can be expensive and time consuming for both parties, but many small companies do quite well against large corporations (Paice v. Toyota being one example) and can usually make financial arrangements to pay for it. The unexpected consequence is often the time sucked away from the people, which can cause a small company to have problems.

Example?

 

By the way, the system in Japan is a whole other story. Let's just say that I don't feel too sorry for Toyota.

 

I read the brief explanation and it appears that it's the PSD that is at the center of the suit. It's the device that melds the various power inputs that Paice is contesting if I'm not mistaken.

 

In the ITC case the plaintiff has to show that 'its market' is being damaged by the imports. I was involved with this during the 80s and 90s when in the steel industry.

The ITC found that most of the steel being filed against didn't damage the market for the domestic steel industry. They threw most of the cases out.

Paice is contending that it does have a market here for it's patented Power Split Device or whatever it calls it. Whether it does or not is subject to arguments and then a decision by the ITC if it ever goes that far.

 

Especially pharma...

 

It's been 15 years or so since I've been involved in an ITC action, but the standards vary depending on the basis of the complaint. A patent infringement is treated differently than say unfair competition or dumping dispute. For patent infringement, the ITC would have jurisdiction if Paice can show that the patents are being used in an existing industry or if such an industry is being established. Paice would have an existing industry if it can show:

significant investment in plant and equipment;
significant employment of labor or capital; or
substantial investment in its exploitation, including engineering, research and development, or licensing.
​

What I suspect, but I could be wrong, is that Paice has licensed it patents to a US auto company. The auto company would have more of an interest in halting imports and may even be directing and ultimately paying for the ITC action. I'm sure more details will become available in the coming days.

 

Unless I am mistaken, the patent does not go too much longer. It was filed in 1992.

Its quite detailed and an interesting read. I think that much of this patent could be invalidated due to prior art. As long as its known, previous use of the patent claims by others (and not patented of course) makes that part of the patent invalid, and large sections of it were done in the 1970's and of course some in the early 1900's.



Hybrid electric vehicle - Google Patent Search

 

Yes, that patent should expire in September of 2012 but Paice could also be asserting newer patents.

Assuming Paice is asserting the same patent claims against the Gen 3 Prius, then Toyota has already had its opportunity to invalidate the patent and failed. It would be bound by that result and wouldn't get a do-over. The ITC would simply look to see if the Gen 3 Prius also infringes those same claims.

Now if other patent claims are at issue that were not previously litigated, then that's a different story.

 

The claims (numbered paragraphs at the end of the patent (if you're viewing the PDF)) in US 5,343,970 to look at are 11 and 39 (which is 32+38+39 read together). They define the legal invention found infringed by the Gen 2 Prius.

 

In order to sit for the patent attorney exam in the U.S. one not only has to be an attorney, one has to be an engineer too. A couple decades back when I sat for the (regular) bar, the patent exam was open book (a HUGE book) ... and the 1st time success rate was only about 15% ... not 15% of the shlomoes walking the streets ... rather 15% of the folks w/ law & engineering degrees ... many from schools I could have only dreamed about going to. One of my chemical engineer buddies tried the patent exam, then gave up and went into family law. Yet, you don't even have to be an attorney OR an engineer, to file your own patent.


That said, my father-in-law (retired electrical engineer) has several patents that he did himself. One of these was for solar water heating valve solenoid designs. I understand basic electronics enough so that when he had to defend this patent, just a short explanation was enough to get others like me up to speed in no time at all. Sure, some designs are extremely complex, but the very nature of patent litigation requires litigants to be able to help a jury understand the difference between the opponents.

.

 

This is what I meant by "concept" - you have to describe a machine or device, you can't just patent the "concept" of, say, time travel (or, in the case of this suit, you couldn't simply patent something like "using both gasoline and electricity to motivate a vehicle"). I didn't mean you can't patent a conceptual design - in fact, almost all patents are just that. In the early days, you had to provide a working model, but not for years. There are some really strange machines in the patent archives from the early days.

 

If you were the first one to figure out how to do it, you could certainly patent "using both gasoline and electicity to motivate a vehicle." Such a claim would protect the systems you devised, but also all cover future gasoline-electric systems for the life of the patent. Others would of course be able to patent improvements on your particular system, and almost all patents are such improvement patents.

Yes, there was a time when models were needed. In a way they still are for certain biotech inventions where biological deposits are required.

 

Could we have a moderator move this thread to Fred's House of Pancakes, "Most boring thread", please?

JK of coarse

 

This is news and includes technical content. It does address problems with intellectual property rights and I've found the postings familiar as well a relevant. I'd held off on volunteering this thought.

The Prius is in short supply in Japan and the USA market buys everyone that shows up. Given the limit of the patent, I have this vision of a Toyota lawyer coming into court one day and announcing:

• We disagree with this patent decision and have decided to suspend Toyota hybrid importations to the USA until the patent has expired. We will sell our Prius in other markets. If any are left over from a 60 day supply in the world wide markets, we will bring them to the USA and offer them, at cost, to the complatient. We'll create a non-Toyota corporation and sell the vehicles w/o warranty or any maintenance support. Yeap, that should do it.

Several things will occur instantly:

1. Every existing Toyota hybrid will instantly increase in value, even the NHW11s.
2. Ford will make a mint ... until they are also sued. However, they are battery limited and there is no reason for importing traction batteries to Ford since Toyota will have no problem selling every Prius across the world.
3. The Euro diesel companies will be aghast.
4. The petitioner's stock will crash ... and after the patent expires, they are 'toast.'

The USA needs Toyota hybrids more than Toyota needs this nonsense.

Bob Wilson

 

Well I'm not sure why it's "nonsense." It's not like Toyota is some non-profit public interest corporation. It's a big business and knows the risks and rewards.

Anyway, I don't understand how your planned Toyota response would "do it" unless Toyota withdraws its hybrids from the US market entirely. Removing the hybrids would I guess negatively affect its CAFE. I don't understand the bits about offering the cars to Paice or forming a non-Toyota corporation because it wouldn't seem to resolve the issues. In any event, the ITC complaint is not public, so it is unknown which patents are at issue. However, while Paice has one patent that will expire in just over 3 years, it has others that do not expire until 2018. IMO, Toyota and Lexus may want to import hybrids before 2018.

The surest solution would be for Toyota to open a US plant to build its hybrids. Doing so would remove the ITC from the picture. That way, the US would get its Toyota hybrids that it you believe the US needs at a quicker pace, and the US auto industry would benefit. As it now stands, profits from the infringing activity are returned to Japan and goes into its economy.

At ~$100 per car (0.48% of the wholesale price for the Prius) it doesn't seem to be in Paice's interest to have imports blocked (it makes nothing if the cars can't enter the US). So the big question is why do to the ITC? Until we know the actual facts, the most likely reasons for Paice to go to the ITC that I can think of right now are:

1. Toyota is refusing to pay the court-ordered royalty;
2. Paice has a contractual obligation with a US auto manufacturer or supplier to seek to halt Prius imports; or
3. Toyota may not be cooperating in the other pending litigations.
​

As for #1, unless Toyota has a valid argument that the new hybids differ from the prior generation so that they no longer infringe, the courts will probably come down hard as well. As the court noted, Toyota could have continued to use its original, non-infringing hybrid system, but instead decided to use and continue to use Paice's patents. In this case, the ITC may be a quicker process than the court system to get Toyota to pay up.

As for #2, the ITC process includes considering the public interest in the US auto industry. I don't know how much the public's investment in the auto companies will matter, but I wouldn't be surprised if it does. I'm sure the UAW wants the cars built in the US so pressure from them, or another US auto manufacturer/supplier might just help Paice.

As for #3, foreign corporations do not always like to follow US court procedures. For example, they may not always be willing to turn over required documents. If Paice has been enduring that for years, the ITC route may motive Toyota.

You mentioned Ford. Ford, the Euro diesel companies, and other hybrid manufacturers (or did you forget about Honda?) would do well IF Toyota/Lexus hybrids are blocked. But I believe that Paice has said that Ford's system anyway (like Toyota's original system) does not infringe its patents. I also believe that when Ford figured out that Toyota had patents covering its system, it went ahead and licensed those Toyota's patents. Every manufacturer understands that it may need licenses from other to sell its products and those actual as well as unforeseen costs are built into the price we pay. Ford may have even licensed Paice's patents so it can improve its system.

BTW, Paice seems to be a private company and appears to have made significant money so I doubt it's going anywhere.

 

It was more tongue-in-cheek but it was just a couple of years ago when I was cleaning out a closet and tossed our old Kodak, instant camera. This is the camera Polaroid drove out of existence although Kodak still sells digital cameras and Polaroid is all but gone. But there has been a more personal and up front run in with patent law.

A month ago, our medical insurance company announced that the $700/mo., patented, modafinil would after 5 years suddenly require "pre-approval." Personally, this looks like the first step of insurance companies to stop covering use of modafinil, an expensive monthly drug. Then I noticed that the modafinil patent has been 'extended' in this country:

So near as I can tell, the 1990 patent that should have expired has been 'extended' and the impact is on the other side, on the patient's side. This drug patent extension hits me and my family right at the paycheck ... just like the loss of the long, gone Kodak instant camera.

So roll back the thread to the original article and the first legal effort was to 'stop importing Prius.' That is the ultimate threat, the ultimate terror of patent law ... to make something cease to exist in the USA market. It has happened, is happening with modafinil, and no doubt will happen again but in this case, there is an escape from USA patent law ... the Prius sells well in Japan too.

Ken@Japan has posted that many current Prius orders in Japan won't be filled until January or February. A simple change in the Prius allocation and suddenly, these Japanese orders are filled by November. There has been a change of government in Japan and the new administration has a Japanese people first attitude, if the press reports are accurate. Changing the allocation of Prius solves a Japanese domestic problem very nicely.

The allocation of Prius does not have stop ... just cut back to say 4-5,000 per month. Suddenly the value of this patent has decreased and the patent clock keeps on ticking ... just like the NiMH patents. The business consequences is best shown by how well it has worked for Cobasys, whose NiMH patent is expiring.

Patent sitting and court shopping are well established practices. But the history has generally resulted in higher prices, fewer choices and less competition. We've got a bad history in the USA of patents being used like leaches to drain the blood of any successful product manufacturer. Too often these patent blood suckers have shown abysmal performance trying to convert their patents into practical, popular products. Their brilliant scientists and engineers aren't making product but testimony.

Toyota's optimum path will no doubt be driven by business decisions in their best interest. But it is the height of hubris to think the USA has some special relationship or 'deal' that forces Toyota to import their hybrids into the USA. Not when there is China and a world market that is relatively free of these patent leaches.

Bob Wilson

 

Sorry about your insurance, but it seems that the choice of medications should rest with the doctor and patient. If a doctor okayed by your insurance carrier thinks that drug A is best, then that's what you should get. As one who has undergone chemo, I'm glad I didn't have to pay for the drugs!

My understanding of pharma patents is purely by osmosis, but in other areas it can be tough to get a patent based on size. The extension is meant to make up for the period of time the product was ready for sale but was delayed by the FDA.

I have no idea what Paice was doing with the patents before the suits. They had filed and prosecuted several, and that would require considerable expense. From the court cases, it looks like Paice was working on licensing it technology and from the details in the patents I would not be surprised if they had working prototypes.

As an aside, when California announced its zero emissions program (~1990 I think) there were a number of start-ups in the electric vehicle field. I represented one that tried to get manufacturers to agree on a standardized charging system and infrastructure. Although GM had an initial interest in EV's I think gas was cheap enough that they lost interest. It just turned out that the client was ahead of its time, but it eventually moved on. So I can appreciate that Paice stuck around and continued working on ideas for hybrid technology.

But yes, Paice picked the Eastern District of Texas for a reason. At the time anyway it was fast -- and probably still is. Fast would have been good for Paice because it would have limited Toyota's ability to drag out the litigation and thus keep costs down. So in a way it would have leveled the playing field.

I like to analogize patents with real estate deeds. They both can be hard to understand but both define the boundaries of property rights. Suppose you buy some land, and you build a house on part of it. After a decade of enjoying your property, you return from vacation to find that someone has built commerical tennis courts or whatever on the edge of your land. What do you do? Do you say that's okay, have fun? Do you say get the hell off my property? Or do you say, let's make a deal? I think most people would tell them to return the property to its original condition (and sue if necessary) and a few might work out a deal (by selling that part of the land for $), but no one would just walk away. When Toyota refused to get off Paice's property or pay to use it, Paice sued to kick Toyota off. Nothing wrong with that!

 

LOL! Welcome to Alabama zoning laws . . . to paraphrase Mel Brooks, "Zoning? Zoning? We don't need no stinkin' Zoning!"

I worked for 13 years with General Electric and they had a serious attitude about intellectual property rights. But the patents I was aware of were aimed at their manufacturing and that worked well. Then new management at GE decided financial services and other goals were more important and proved,"To make a fortune in big business, start with a bigger business."

I love patent disclosure and understand the need for time-limited, exclusive rights. But I've also seen it used as a blunt club for revenue enhancement to the point of no-revenue instead of advancing engineering arts ... in effect killing the goose that lays the golden eggs.

Bob Wilson

 

Pre-certs don't go against this in my experience. Our old insurance company starting requiring them for the wife's allergy meds. Instead of just calling up the doctor's office to get a refill, you had to go in for visit. They're just make it a hassle so that you just give up and go, for them, the cheaper route.

 

They'll get to that right after they fix the electoral college.