This post comes more than a week after the Supreme Court decided Bilski. Last Monday when the decision came down I was struggling with what value I could add to the many reports that would fill the intellectual property blogosphere, and was leaning towards waiting a few days (which also allowed me to deal with various client commitments and new opportunities). Then a good friend praised me for being the lone IP blog who had not said a word about Bilski on the day of the decision, after receiving an email of the blog’s content for the day. That comment cemented it for me. I decided to give myself some time to think about the decision before posting here. Of course, that means that much of what can be said already has been. So, links to many excellent commentaries are below.
At its heart, the Bilski decision continues the Supreme Court’s patent law trend moving away from bright line rules and allowing the flexibility to adapt the law to future situations. The business method in Bilski was struck down, but the Court did not strike down all business methods. And the justices made clear that the machine-or-transformation test was not the only option for determining patentability, increasing the law’s flexibility even more. Having preserved at least some business methods, the Court obviously left software patents intact as well. So, Bilski was not the death of business methods or software. And just as after KSR (obviousness) and eBay (injunction standard), the decision injects uncertainty into the law that will take 18 – 24 months to sort out, first in the district courts and then more slowly in the Federal Circuit. The one thing you can be sure of is that you will see lots of Bilski-based motions over the next year. And I am sure I will be writing about Northern District Bilski decisions during that time.
Here is some of the commentary from across the blogosphere:
* 271 Patent Blog;
* Chisum’s Notes on Bilski;
* Filewrapper (noting that the Supreme Court issued grant, vacate and remand orders in two business method cases assuring we will get some realtively quick Federal Circuit guidance on the outlines of Bilski);
* IPWatchdog (arguing, among other things, that even in the post-Bilski world one could write claims that would capture Bilski innovation);
* New York Times Bits Blog (looking at the uncertainty the decision injects into litigation);
* Patent Docs (looking at Bilski’s impact upon biotech patents);
* Patently-O (and here, here, here and here); and
* WSJ Law Blog.
Continue Reading Bislki: More of the Same
IPWatchdog
Bilski: Reading the Tea Leaves
The Supreme Court heard oral argument in the Bilski case Monday afternoon. Click here for a transcript of the arguments. Here are a few of the highlights from Bilski’s argument:
JUSTICE GINSBURG: But you say you would say tax avoidance methods are covered, just as the process here is covered. So an estate plan, tax avoidance, how to resist a corporate takeover, how to choose a jury, all of those are patentable?
MR. JAKES: They are eligible for patenting as processes, assuming they meet the other statutory requirements.
JUSTICE BREYER: So that would mean that every — every businessman — perhaps not every, but every successful businessman typically has something. His firm wouldn’t be successful if he didn’t have anything that others didn’t have. He thinks of a new way to organize. He thinks of a new thing to say on the telephone. He thinks of something. That’s how he made his money.
And your view would be — and it’s new, too, and it’s useful, made him a fortune — anything that helps any businessman succeed is patentable because we reduce it to a number of steps, explain it in general terms, file our application, granted?
MR. JAKES: It is potentially patentable, yes.
* * *
JUSTICE BREYER: So you are going to answer this question yes. You know, I have a great, wonderful, really original method of teaching antitrust law, and it kept 80 percent of the students awake. They learned things – (Laughter.)
JUSTICE BREYER: It was fabulous. And I could probably have reduced it to a set of steps and other teachers could have followed it. That you are going to say is patentable, too?
MR. JAKES: Potentially.
And here are some of the highlights from the government’s argument:
JUSTICE SOTOMAYOR: No ruling in this case is going to change State Street. It wasn’t looking at process or the meaning of “process.” It was looking at something else.
* * *
CHIEF JUSTICE ROBERTS: Mr. Stewart, I thought I understood your argument up until the very last footnote in your brief. And you say this is not –simply the method isn’t patentable because it doesn’t involve a machine. But then you say but it might be if you use a computer to identify the parties that you are setting a price between and if you used a microprocessor to calculate the price. That’s like saying if you use a typewriter to type out the — the process then it is patentable. I — I — it — that takes away everything that you spent 53 pages establishing.
* * *
CHIEF JUSTICE ROBERTS: But if you look at your footnote, that involves the most tangential and insignificant use of a machine. And yet you say that might be enough to take something from patentability to not patentable.
MR. STEWART: And all we’ve said is that it might be enough; that is, hard questions will arise down the road as to where do you draw the line, to what extent must the machine or the transformation be central —
CHIEF JUSTICE ROBERTS: So you think it’s a hard question. If you develop a process that says look to the historical averages of oil consumption over a certain period and divide it by 2, that process would not be patentable. But if you say use a calculator, then it — then it is?
MR. STEWART: I think if it’s simply using a calculator for its preexisting functionality to crunch numbers, very likely that would not be enough. But what we see in some analogous areas is that the computer will be programmed with new software, it will be given functionality it didn’t have before in order to allow it to perform a series of calculations, and that gets closer to the line. And again —
CHIEF JUSTICE ROBERTS: Well, your footnote — I don’t mean to dwell on it — it says to identify counterparties to the transactions. So that if what you’re trying to get is the — the baker who sells bread, because you are going to hook him up with the grocer who sells, you know, in the grocery store, if you punched in in your search station, you know, give me all the bakers in Washington, that would make it patentable?
MR. STEWART: Again, we are — we are not saying it would be patent eligible. We would have to review those facts, and the PTO would have to review those facts in the context of an actual application.
I guess the point I’m trying to make is simply that we don’t want the Court, for instance, in the area of software innovations or medical diagnostic techniques to be trying to use this case as the vehicle for identifying the circumstances in which innovations of that sort would and would not be patent eligible, because the case really doesn’t present any — any question regarding those technologies. And therefore, we —
If those highlights, left you wanting more, check out the following posts that give some additional context to the cold transcript or read the tea leaves, as we all wait for a decision, likely this spring:
271 Patent Blog
IPWatchdog (and here)
Patent Docs
Patently-O (and here)
The Prior Art
WSJ Law Blog
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Continue Reading Bilski: Reading the Tea Leaves
Patentability at the Supreme Court: Bilski Oral Arguments
The Supreme Court hears oral argument today in Bilski v. Kappos. The Court will decide the proper test for Section 101 patentability and will either decide or at least significantly impact the patentability of software and business method patents. Here are the questions presented:
1. Whether the Federal Circuit erred by holding that a “process” must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing (“machine-or-transformation” test), to be eligible for patenting under 35 U.S.C. § 101, despite this Court’s precedent declining to limit the broad statutory grant of patent eligibility for “any” new and useful process beyond excluding patents for “laws of nature, physical phenomena, and abstract ideas.”
2. Whether the Federal Circuit’s “machine-or-transformation” test for patent eligibility, which effectively forecloses meaningful patent protection to many business methods, contradicts the clear Congressional intent that patents protect “method[s] of doing or conducting business.” 35 U.S.C. § 273.
For more on the history of both the Bilski case, check out my recent article with my colleague Mike Grill in the Northwestern Journal of Technology and Intellectual Property. Patently-O has compiled the amicus briefs — click here for the briefs supporting Bilski or neither party, and here for the briefs supporting the government. The briefs supporting the government include a brief by a group of Internet Retailers that, I am proud to say, cites my law review article arguing for an even application of the Twombly pleading standard as to both patent plaintiffs and patent defendants — click here for the amicus brief and here for my article from the John Marshall Review of Intellectual Property Law.
Click here for the SCOTUSBlog’s preview of the argument. For post-argument CLE options, click here for a list of courses compiled by Patent Docs and here for information on a CLE from IPWatchdog’s Gene Quinn, who plans to attend oral arguments.
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Continue Reading Patentability at the Supreme Court: Bilski Oral Arguments
August Carnival of Trust
Welcome to the August 2009 Carnival of Trust. The Carnival of Trust is a monthly, traveling review of the last month’s best posts related to various aspects of trust in the business world. It is much like the weekly Blawg Reviews that I post links to and have hosted (click here and here), but those generally contain far more than ten links. My job this month was to pick those ten posts for you and provide an introduction to each post that makes you want to click through and read more. For my regular Chicago IP Litigation blog readers, this will be a slight departure from the case analysis format you have come to expect, but very similar to my earlier stints hosting the Carnival of Trust and Blawg Review.
It is the trust that matters, not the title.
At IP Think Tank, Duncan Bucknell added to the recent debate in the patent community about whether the IP function should move into the corporate C-level suite, adding a Chief Intellectual Property Office to the ranks of CEO, COO, CTO, CIO, CLO and CMO – click here and here to read Bucknell’s posts. Following up on comments by Microsoft’s Marshall Phelps and Rockwell Collins’ Bill Elkington, Bucknell explained that the issue is not the name, but in a company having an IP champion that earns the organization’s trust and respect, whatever title that person is given:
You have to build your own credibility within your organisation as someone who reliably gets the job done. As you build trust with those senior to you, then your (ongoing?) commitment to communicating the value that can be added using intellectual property will become more prominent.
Make some (achievable) promises and then deliver. The more that you do this, the more credibility will be given to the IP function, and the greater awareness those senior to you will have. Some would call such a person an ‘IP Evangelist’ – I would say that they are just doing their job. People executing on difficult tasks bit by bit has always been what success is about.
As usual, Bucknell’s analysis is excellent. A person’s respect within an organization is at least as important as their title.
Running an organization is all about building trust.
The patent community focused much of its attention this week on the confirmation hearings for David J. Kappos, nominee for Director of the US Patent & Trademark Office. Click here for Patentability’s summary of the hearing highlights and here for a copy of Kappos’s statement at Patently-O. The hearings were relatively short, likely because there appears to be widespread trust in Kappos’s background and abilities. And although much of the hearing focused on procedural patent office issues, Kappos showed he deserved that trust by focusing his statement on his plans to earn trust with all of the stakeholders in the patent world. He specifically addressed concerns that his corporate background could disadvantage individual inventors or academics:
I am mindful that the USPTO serves the interests of ALL innovators in this country, small and large, corporate and independent, academic and applied, and – most importantly — the public interest. While I have spent my career to date at a large corporate enterprise, I am familiar with the concerns and issues of all USPTO constituents – including small and independent inventors, the venture and start-up community, public interest groups, the patent bar and many others – and will reach out to all of them.
Kappos addressed his plans to build trust with his employees at the USPTO:
I am mindful of the incredible dedication of the thousands of USPTO employees, and the essential role they play to the success of the US innovation system. I will work every day with the USPTO employees and the unions that represent them to establish strong, positive relationships grounded in professional treatment for these workers producing work product based on professional judgment.
He addressed the need to build global trust and relationships:
I am acutely mindful that innovation today is global and that IP policy is of paramount importance, not only in our country, but also in the EU and Japan, in China, India, Brazil and many other developing countries. I will use my international experience and my understanding of global IP trends to help this Administration represent, advance, and protect the interests of American innovators in the global arena and to lead the world in developing strong, balanced, inclusive intellectual property systems that advance the well-being of all participants.
And he addressed the need to build trust with the Administration he seeks to join and the American people the Administration serves:
Finally, I am mindful that the office for which I am being considered, working as part of Secretary Locke’s team and within the Administration’s agenda, must be intensely focused on how to serve the American people at this time of economic uncertainty.
Gene Quinn provides proof that Kappos’s trust-building efforts worked in his IPWatchdog post about the hearings (click here to read the post):
In all, what Kappos said was certainly reassuring, and he should have absolutely no problem getting confirmed. If he does stay mindful of the needs of all those who use the USPTO, small, large and in between, and the interests of the diverse industries who sometimes need contradictory things in order to thrive, he will not only be a good leader, but he will be an exceptional leader and might really reform the Patent Office into the entity it can and should be in order to foster economic development and job creation in the US.
Walter Cronkite personified trust.
The passing of Walter Cronkite last month does not have much to do with intellectual property, but I could not do this month’s Carnival of Trust without mentioning Cronkite. To me and so many others, Walter Cronkite embodied trust. Cronkite was the person so many turned to in times of national tragedy, like war, and in times of national triumph, like the Apollo XI moon landing. Naturally, Cronkite’s passing caused numerous reviews of present-day news personalities and almost as many questions about whether times have changed so much that we cannot have another Cronkite. In the Chicago Reader blog, Whet Moser decries a poll that found the Daily Show’s Jon Stewart to be the most trusted newsperson on the air today – click here to read the post. Frankly, the poll does not appear to be scientific and, therefore, not very trustworthy. But I have trouble arguing with the results. I love news. Three newspapers are delivered to my door every morning, and I read each one. Okay, I at least skim each one. I grew up watching the nightly news, but I now finding myself turning to Stewart for news programming more frequently than I turn to Couric, Gibson or Williams. I like and even trust all three. But Stewart has built a more powerful trust with me by calling out the problems with the 24-hour news cycle and by making me laugh. Stewart has some obvious biases, but he makes sure they are obvious and he creates even more trust by poking fun at both sides of most issues. Truth and laughter are powerful trust builders.
Cronkite deserves more than one entry in this Carnival, and the second comes from the Carnival of Trust’s own Charles Green at his Trust Matters blog – click here to read the post. Green breaks down the components of The Most Trusted Man in America: 1) honesty; 2) selflessness; and 3) integrity. Green also explains that Cronkite’s calm, baritone voice reinforced each of the three characteristics. I could not agree more. Hearing Cronkite’s voice is an instant dose of trust.
For those not fortunate enough to develop their own “personal,” trust relationship with Cronkite through his news programming, check out this NPR obituary to get some measure of the man and his history.
Credentials can generate and regulate trust.
At the Mediation Channel, Diane Levin makes a strong argument that legal mediators need to develop an accreditation system – click here to read the post. And IP mediator Victoria Pynchon responds at her Settle It Now blog with her own arguments for credentialing mediators for the good of mediators, the mediating parties and society’s trust in the mediation system as a whole – click here to read the post.
How can companies build trust?
Building trust can be a slow and sometimes uncertain process. At his Touch Points blog, Steve Finikiotis cites a study suggesting that trust in corporation in the United States and other developed countries is at its lowest point ever – click here to read the post. In order to remedy the decreased trust, Finikiotis provides four trust building steps: 1)Focus on understanding and meeting customers’ preferences; 2) Under-promise and over-deliver; 3) Transparency; and 4) Encourage and foster feedback.
And although Finikiotis did not focus on this example, last month Amazon showed just how those steps do build trust. Amazon was accused of copyright infringement when a digital book seller used a self-service program to sell unauthorized copies of several books, including George Orwell’s 1984, to Amazon Kindle users. When Amazon learned of the alleged infringement, it erased the books from its customers Kindle accounts. As you might expect, there was a public outcry. Kindle users were upset to learn that books they purchased and felt they owned could be removed from their devices and accounts. And Amazon sprang into action following Finikiotis’s four steps:
Amazon listened to its customers’ frustration at having the books removed and the possibility of future removals;
Amazon replaced the books;
Amazon’s founder and CEO, Jeff Bezos, issued the following very direct and honest apology:
This is an apology for the way we previously handled illegally sold copies of 1984 and other novels on Kindle. Our “solution” to the problem was stupid, thoughtless, and painfully out of line with our principles. It is wholly self-inflicted, and we deserve the criticism we’ve received. We will use the scar tissue from this painful mistake to help make better decisions going forward, ones that match our mission.
With deep apology to our customers,
Jeff Bezos
Founder & CEO
Amazon.com
4. Through its response and apology, Amazon fostered feedback.
Amazon turned a negative situation into a very positive one. As a Kindle owner (and lover), I was very happy with the response and it has made me an even more loyal Kindle customer. And others agree. For example, Amazon’s response helped convince PublicOrgTheory blog to go ahead with a Kindle purchase – click here to read the post. And In Propria Persona has qualms with copyright law, but saw the apology as good customer service and said it improves the likelihood of him purchasing a Kindle – click here to read the post. Finally, the Below the Line marketing blog says that “Amazon shows how to apologize,” and notes that customer comments on the Amazon site have been largely positive since the apology; proof that Finikiotis’s steps work. Nice job to both Finikiotis and Amazon.
And with that story of trust done well, thank you for reading, whether you are a regular reader of this blog or a Carnival of Trust groupie.
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Continue Reading August Carnival of Trust
Top Patent Blogs
Gene Quinn has done some great work in developing a list of the top 50 patent blogs at IPWatchdog, based on a combination of objective and subjective criteria — click here to read the post. With all of the usual caveats about the value of top blog lists and competitions, I am proud that the Chicago IP Litigation blog came in at number 28 and the top regional US patent blog. I am honored to be among the top regional patent blogs, including Washington State Patent Blog, California Biotech Blog,* and Georgia Patent Law. I am also proud to be among the numerous Chicago patent blogs that made the list, including Patent Docs, Orange Book Blog and the 271 Patent Blog.
Here is the top 50:
1. Patently-O
2. IPWatchdog.com
3. IP Kat
4. Spicy IP
5. Patent Baristas
6. Intellectual Property Watch
7. Patent Docs
8. 271 Patent Blog
9. BlawgIT
10. Patent Prospector
11. The Invent Blog
12. IP Think Tank and The Prior Art
13. –
14. Orange Book Blog
15. IPJUR and European Patent Caselaw
16. –
17. Promote the Progress
18. IP NewsFlash
19. Anticipate This!
20. Patentably Defined
21. India Patent
22. Intellectual Asset Management
23. Against Monopoly
24. Patent Circle
25. I/P Updates
26. PHOSITA
27. IP Spotlight
28. Chicago IP Litigation
29. The IP Factor
30. Patent Arcade and File Wrapper
31. –
32. Securing Innovation
33. Patents 101 and IP Estonia
34. –
35. PatLit
36. Just An Examiner
37. The Business of Patents
38. Patentability
39. Inventive Step
40. Holman’s Biotech IP
41. Washington State Patent Law
42. California Biotech Law
43. Patent Infringement Updates and Patent Assassins
44. –
45. Russian Patents
46. Georgia Patent Law
47. Patentnapsis
48. Honoring the Inventor
49. OC Patent Lawyer
50. Nanomedicine & IP
* Another blog by LexBlog.
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Continue Reading Top Patent Blogs
Obama Announces Kappos as Nominee for Director of the Patent Office
Yesterday, President Obama announced his intent to nominate David J. Kappos as the next Director of the Patent and Trademark Office, also known as Under Secretary of Commerce for Intellectual Property. Kappos is currently IBM’s Vice President and Assistant General Counsel, Intellectual Property. Kappos earned a degree in electrical and computer engineering from the University of California Davis and received his law degree from Berkley. Here is some of Kappos biography from President Obama’s press release on the pending nomination:
Mr. Kappos serves on the Board of Directors of the American Intellectual Property Law Association, the Intellectual Property Owners Association, and the International Intellectual Property Society. He is also the Vice President of the Intellectual Property Owners Association. He has held various previous leadership positions in intellectual property law associations in Asia and the U.S. He has spoken widely in Asia, Europe, and the U.S. on intellectual property topics. Mr. Kappos received his Bachelor of Science Degree in Electrical and Computer Engineering from the University of California Davis in 1983, and his law degree from the University of California Berkeley in 1990. He joined IBM in 1983 as a Development Engineer and has served as an Intellectual Property Law attorney in IBM’s Storage Division and Litigation group, as IP Law Counsel in IBM Software Group, as Assistant General Counsel in IBM Asia/Pacific, IBM Corporate Counsel and as Assistant General Counsel prior to his current position.
For initial reactions from the blogosphere, check out: ChipLaw; IPWatchdog; Patent Law Insights; and Patently-O.
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Continue Reading Obama Announces Kappos as Nominee for Director of the Patent Office
Supreme Court Grants Cert in BIlski
Earlier today, the Supreme Court granted cert in Bilski, the Federal Circuit’s en banc decision limiting the patentability of business method and software patents. Many commentators are predicting that the Supreme Court will further restrict business method and software claims through the machine or transformation test, although it is hard to imagine that either type of claim will be completely eliminated. Of course, the Supreme Court could also move the law back toward the State Street decision allowing business methods and software to be patented more freely. The questions presented are:
Whether the Federal Circuit erred by holding that a “process” must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing (“machine-or-transformation” test), to be eligible for patenting under 35 U.S.C. § 101, despite this Court’s precedent declining to limit the broad statutory grant of patent eligibility for “any” new and useful process beyond excluding patents for “laws of nature, physical phenomena, and abstract ideas.”
Whether the Federal Circuit’s “machine-or-transformation” test for patent eligibility, which effectively forecloses meaningful patent protection to many business methods, contradicts the clear Congressional intent that patents protect “method[s] of doing or conducting business.” 35 U.S.C. § 273.
For more takes on the cert decision and its implications, check out:
271 Patent Blog;
IPWatchdog;
Patently-O;
SCOTUS Blog; and
WSJ Law Blog.
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Continue Reading Supreme Court Grants Cert in BIlski
Ten Commandments for Trying Patent Cases
Gene Quinn at IPWatchdog recently posted his notes from Chief Judge Holderman’s Ten Commandments for Trying Patent Cases presentation at a recent Thomas Jefferson School of Law symposium. I have had the opportunity to hear versions of the presentation a couple of times and learn something new every time. Here are Judge Holderman’s ten commandments. Thou shalt not try a patent case to a judge or to a jury without:
1. A clear theory for victory
2. Targeting your final argument
3. Anticipating your opponent’s arguments
4. Speaking understandable words
5. Telling the story
6. Using visuals
7. Organizing the exhibits for the decision maker
8. Presenting your theme early and often
9. Being straight forward and focused
10. Remembering you are “ON STAGE”
Some of the ten seem relatively obvious as you read them, but even the obvious ones are valuable reminders as you head into the stress of trial preparation. One that always jumps out at me is organizing exhibits for the decision maker. Far too many trial teams simply line up their exhibits in numeric order or the order they were shown at trial without thoughtfully organizing the exhibits so that they tell a story for the jury. If you have a chance to see Judge Holderman give a version of this talk, do not miss it.
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Continue Reading Ten Commandments for Trying Patent Cases
IP News: ADR & Copyright Damages
Here are several items from around the web that are worth your attention:
The latest edition of Doug Lichtman’s IP Colloquium is available here and it is another excellent listen. The program looks at copyright’s statutory damages regime through the lens of music downloading. Lichtman moderates an impressive group of experts and stakeholders in the debate. It would be worth the time, even if CLE credit was not available, but it is.
Congratulations to Victoria Pynchon of the IP ADR Blog and Settle It Now on her move to ADR Services — click here to read Pynchon’s post about the move.
The Alternative Patent Dispute Resolution Project at San Diego’s Thomas Jefferson School of Law has an interesting survey up about how ADR should be used in patent cases. No results yet, but I will discuss them here when they are made available. The survey follows up a survey done ten years ago by IPWatchdog’s Gene Quinn. Click here to take the survey.
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Continue Reading IP News: ADR & Copyright Damages
Most Read Patent Blogs
IPWatchdog Gene Quinn recently published his list of the top 26 patent blogs, based upon Technorati rankings (Quinn only considered blogs in the top 1M of the Technorati rankings) — click here to read Quinn’s post. Quinn manually determined which blogs counted as patent blogs, and did nice work. Although I would add the IP ADR Blog to the list. While I do not place much weight in blog rangings, the list identified a few new blogs that I plan to follow, and it is gratifying to see that the Chicago IP Litigation Blog has a strong reader base in the patent world.
Here are Quinn’s rankings:
Patently-O – Technorati Rank 21,202
Patent Baristas – Technorati Rank 61,134
IPWatchdog – Technorati Rank 80,245
Against Monopoly – Technorati Rank 80,245
Patently Silly – Technorati Rank 90,082
Chicago IP Litigation Blog – Technorati Rank 117,073
PHOSITA – Technorati Rank 101,726
Spicy IP – Technorati Rank 129,347
PLI Patent Practice Center – Technorati Rank 132,753
Duncan Bucknell Company’s IP Think Tank – Technorati Rank 136,348
Patent Prospector – Technorati Rank 152,448
Securing Innovation – Technorati Rank 162,007
Peter Zura’s 271 Patent Blog – Technorati Rank 163,794
The Invent Blog- Technorati Rank 167,214
Promote the Progress – Technorati Rank 198,166
I/P Updates- Technorati Rank 213,371
IP NewsFlash- Technorati Rank 221,777
Orange Book Blog – Technorati Rank 221,777
The IP Factor – Technorati Rank 250,588
Philip Brook’s Patent Infringement Updates- Technorati Rank 273,434
Patent Docs – Technorati Rank 300,413
Antiticpate This! – Technorati Rank 351,677
Patent Fools (now operated by IPWatchdog.com) – Technorati Rank 351,092
Patentably Defined – Technorati Rank 614,978
Steve van Dulke’s Patent Blog – Technorati Rank 676,101
IP Spotlight – Technorati Rank 752,199
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