Happy Halloween 2007 : The Great LawPundit Pumpkin : Soup Recipe : Trick or Treat : Suesses oder Saures : Repelling Evil Demons

IN what has become a LawPundit tradition, we carve our Halloween pumpkin each year in a new face and present that face to our readers. This year, our creation is Ms. Pumpkin, a bit of a bear or tiger or panther, as you wish, shown below in a photo taken in the darkness outside at night without flash this Halloween Eve. The differing colors result from the flickering red candle burning inside the carved pumpkin:

Halloween 2007 Pumpkin
Halloween has become quite popular here in Germany in recent years. We had a record 17 trick-or-treaters at our house in Germany this evening.

“Trick or Treat” is called “Süsses oder Saures” (Sweet or Sour) in German, i.e. “sweets or else”.

When I was in my youth in the USA, my father used to give each trick-or-treater a Hershey bar – after having each visitor show his tricks first, of course. We carry on this tradition here on the Moselle River by giving each trick-or-treater a large chocolate bar. Some of the visitors had Halloween costumes on, quite like those worn in the USA this eve.

The Great Lawpundit Pumpkin 2007 that you see pictured above measures about a half-a-meter across and is a real giant, the largest we have ever had.

The pumpkin mass that remained after our carving served as our meal this eve. We had pumpkin soup, in which the ingredients were mashed pumpkin, cream, milk, water, vegetable broth, ginger, salt and pepper. It was delicious.

We spread the pumpkin seeds on newspaper to dry out and will plant them early next year in egg shell halves filled with earth, where the seed can germinate before it is taken outside and planted in our garden.

It is rather remarkable to read that some religious and political figures and groups oppose the fun that is Halloween, among them:

the American religious right wing
Venezuelan President Hugo Chavez
Moscow schools in Russia
Muslims, orthodox Jews and Evangelical Christians
Wiccan (Witch) religions

Did we hear something about birds of a feather flocking together?
You are known by the company you keep.

In fact, Halloween predates all of those religious and political groups and religions, and can be traced back to ancient practices of our forefathers:

Halloween (Allhallows Even) was observed by some churches with religious services. However, most persons regarded it as a secular festival. In its strictly religious aspect, it is known as the vigil of Hallowmas or All Saints’ Day, observed on November 1 by the Roman Catholic and Anglican churches.

The festival of Halloween is based on a combination of the Christian commemoration of the departed faithful (All Saints’ Day) with the pre-Christian Celtic feast associated with a celebration of the end of summer and the Celtic New Year. Celts who lived in what is now known as Ireland, Scotland and parts of Great Britain celebrated their new year that began November 1. Allhallows’ Even was observed on the evening of October 31st. Around 800 A.D., the day became known among Christians as Allhallomas which eventually changed to All Hallow E’en, or Halloween.

Celtic peoples adopted Christianity quickly, easily, and strongly. The conversion of Celtic peoples did not, however, keep them from celebrating some of their old customs. Attempts to replace the year-end custom in the old Celtic calendar were only partially successful. Some of our Halloween traditions date back to these early times.

Summer’s end and the celebration of a good harvest has always been an important event in the life of agrarian peoples. Samhain “Hallowday” or Samfuin (sam + fuin) summer’s end, marked the end of the yearly cycle and was celebrated with both religious and agrarian rites. It was the period for threshing and of food preparation for the winter season. On that evening, so it was believed, present, past, and future became one. Celts gave thanks for the safe return of their cattle to winter quarters, and invoked their gods for prosperity and good crops for the coming year.

Samhain was both the “end of summer” and a commemoration of the dead. The spirits of the departed were believed to visit their kinsmen in search of warmth and good cheer as winter approached. It was a time when evil, as well as good, spirits returned to the living. Fairies were believed to migrate from one home to another, and Hallowe’en was the time when humans kidnapped by elfin folk could reclaim their lost loves or relatives.

Jack-O’-Lanterns were scooped out of turnips with skull-like faces carved into them. This may reflect the ancient custom of placing skulls around the tribal fire to keep evil demons away.

Note well the people who are against Halloween. You will most likely see the faces of religious and political tyrants trying to impose their particular superstitions ON YOU. These are the evil demons that OUR pumpkin turns away.

Enjoy a blessed Halloween, wherever you are.

Open-Source Software, Spurious Patents & Trolls : Sun Microsystems CEO and President Jonathan Schwartz Talks about Patents and Infringement Litigation

The Chief Executive Officer and President of Sun Microsystems, Inc., Johnathan Schwartz, maintains a blog, Jonathan’s Blog, at Sun Blogs.

In his latest and most recent October 24, 2007 posting, ZFS Puts Net App Viability at Risk?, Schwartz talks about patents and litigation, especially the patent infringement suit by Network Appliance (NetApp or NetApps) against Sun Microsystems which was at that time (September 5, 2007) reported by Elise Ackerman of the Mercury News as follows (excerpt):

Network Appliance, the Sunnyvale maker of computer storage systems, is suing Sun Microsystems for allegedly infringing on seven patents and releasing them under an open-source license.

Experts in patent law say the suit, filed this morning in U.S. District Court in Lufkin, Texas, could become a test case of how to treat open-source software that improperly includes patented technology.

As written back in September at the Stanford Law School (SLS) News Center:

Professor Mark Lemley commented in the San Jose Mercury News about a recently-filed lawsuit dealing with open source and fair use issues:

“This is something people feared for a long time was coming,” said Mark A. Lemley, a law professor at Stanford University.” [Link in text added by LawPundit]

After responding to that NetApps suit initially in his blog on September 6 (via Scobleizer), Schwartz now indicates in his October 24 posting that Sun, clearly angered by what they view to be totally unnecessary patent litigation brought against them, will go after NetApps with a vengeance for having brought the suit in the first place and against Sun’s sober advice:

… we have no interest whatever in suing NetApps – we didn’t before this case, and we don’t now. But given the impracticality of what they’re seeking as resolution, to take back an innovation that helps their customers as much as ours, we have no choice but to respond in court.

So later this week, we’re going to use our defensive portfolio to respond to Network Appliance, filing a comprehensive reciprocal suit. As a part of this suit, we are requesting a permanent injunction to remove all of their filer products from the marketplace, and are examining the original NFS license – on which Network Appliance was started. By opting to litigate vs. innovate, they are disrupting their customers and employees across the world.

In addition to seeking the removal of their products from the marketplace, we will be going after sizable monetary damages. And I am committing that Sun will donate half of those proceeds to the leading institutions promoting free software and patent reform (in specific, The Software Freedom Law Center and the Peer to Patent initiative), and to the legal defense of free software innovators. We will continue to fund the aggressive reexamination of spurious patents used against the community (which we’ve been doing behind the scenes on behalf of several open source innovators). Whatever’s left over will fuel a venture fund fostering innovation in the free software community.”

Obviously, we are firmly on the side of Sun Microsystems and hope that NetApps for their greedy actions will be rewarded down the road with oblivion, which they deserve.

Well done, Jonathan Schwartz and Sun Microsystems, and thank you for support of open-source software and sensible patent reform and for opposition against patent trolls and spurious patents.

Amazon’s 1-Click Patent Claims Non-Finally Torpedoed by Blogger Peter Calveley – A Hopeless USPTO is Shamed by a Modern Knight

Via the Out-Law.com Weekly Round-Up, we are led to the Out-Law.com article US Patent Office decimates Amazon’s 1-Click Patent, relating the story of how blogger Peter Calveley from Auckland, New Zealand has almost singlehandedly torpedoed many claims in Amazon’s odious and to this observer patently obvious 1-Click patent. Based largely on Calveley’s efforts, 21 of 26 claims have been “non-finally” rejected by the USPTO pursuant to the re-examination request.

See igdmlgd (his blog) and also the New Zealand Open Source Society
as well as Slashdot, Boing Boing, Alex Brie, Marginal Revolution.

This case shows the tip of the iceberg of USPTO incompetence. Why did it take a re-examination request to find all of the prior art that was not found initially? In addition, the fact that the USPTO did not reject the other 5 of 26 claims means that the USPTO still has not understood the new requirements of recent Supreme Court and Federal Circuit decisions on obviousness and the limits of patentability.

Try finding any notice or trace of this October 9, 2007 office action at the USPTO website through their search options. The search engine at the USPTO web presence is a hopeless chaos. It is really incredible that this kind of stone-age technology is being offered to the public. And it is no wonder that the USPTO can not find “prior art”. Their search engine for that is going to be no better than what we see here. Hopeless.

But Calveley gives us the essential hint when he writes:

To read the original document, go to USPTO PAIR access site, choose the “Control Number” radio button, enter 90/007,946 and press the “Submit” button.

Simple, what? In our digital age you need WRITTEN INSTRUCTIONS at a blog to find a USPTO document at the USPTO website? ARE YOU KIDDING? Just a few numbers to plug in and radio buttons to select, that’s all. No one-click technology here, that’s for sure. We did all that and still did not find the document. What you now have to do at the web page so opened at the USPTO is to further – non-intuitively – click the tab “Image File Wrapper” – a terminology which means nothing to almost anyone in the world except the USPTO – and THEN you will get
a page with a list of documents in this case,
the sheer number of which is evidence in itself for the red-taped document chaos which pervades the USPTO.

Somewhere in that list you will then find Reexam – Non-Final Action and when that item is clicked, you will have access to the October 9 office action of the USPTO in this case. If you do not happen to have that magic number 90/007,946 at your fingertips, the odds of finding that document at the USPTO website are limited for most and closed for many. Now that is what we call “horse and buggy search technology”.

To view the contents of the actual re-examination request, go to Calveley’s blog. Or try to find it in the Image File Wrapper documents at the USPTO – if you have the time for that kind searching. Try it on your own first. When all esle fails….

what you are looking for is Reexam – Affidavit/Decl/Exhibit Filed by 3rd Party.

As for Calveley, someone should award him a medal. Three cheers for you, sir. Well done!

The Economist Rankings – Business Economics Education Politics Risk Technology

The Economist has interesting rankings of various parameters in Business, Economics, Education, Politics, Risk, and Technology. Below are links to those rankings.

The Economist Rankings – Business
Global business barometer – The overall highest confidence index is in IT and technology
Business environment ranking – Denmark and Finland top the list
Private equity environment rankings – The United States and Britain top the rankings
Liveability ranking – Vancouver in Canada, Melbourne in Australia, and Vienna in Austria lead the list of the world’s most liveable cities
Worldwide Cost of Living survey – Oslo and Paris are the most expensive cities

China business confidence index – Very good at 62%
Business travel ranking – Toronto and Vancouver in Canada and Perth and Adelaide in Australia top the travel list
Quality-of-life index – Ireland leads the way for quality of life

The Economist Rankings – Economics
Foreign direct investment inflows – The USA leads the list, followed by Britain, China, France, Belgium, Germany, Canada, Hong Kong, Spain, Italy, the Netherlands and Russia
Global house-price indices – House price fall in the USA?
Big Mac index – What does a Big Mac cost in the countries of the world and what does this say about the respective exchange rates?

The Economist Rankings – Education

Which MBA? – The Chicago and Stanford Business Schools lead the list
Executive education: open enrolment – The School of Business of the University of Wisconsin-Madison is at the top
Executive education: customised – The Penn State Smeal College of Business is Nr. 1

The Economist Rankings – Politics

Democracy index – Sweden has the most democracy
Global peace index – Norway is the most peace-loving

The Economist Rankings – Risk
Operational risk ratings – Switzerland is the least risky
Country risk ratings – Singapore and Hong Kong are the least risky

The Economist Rankings – Technology
E-readiness ranking – Denmark is first, the USA is second in E-readiness

The Limits of Patentability – What is Patentable Subject Matter? – How about Signals? or the Routine Addition of Modern Electronics to an Invention?

One if by land, and two if by sea;
if these had been patented
where would we be?

The US Supreme Court decision in KSR continues to throw its long shadow on patent law as the Federal Circuit has further circumscribed the extent of patent protection and has once again narrowed the limits of patentability as based on 35 U.S.C. § 101 which provides:

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

(see also Patentability of Inventions and Grant of Patents)

The renown international New York law firm, Paul, Weiss et al. has published a recent memorandum on the limits of patentability titled What is Patentable Subject Matter? by John E. Nathan, Catherine Nyarady, and Larry A. Coury, which relates to two recent decisions of the Federal Circuit addressing the limits of patentability:

In re Comiskey and In re Nuijten

(see the post-decision comment at Patently-O and the pre-decision discussion by Professor John F. Duffy at Patently-O and also Harold Wegner at IPfrontline).

Nathan, Nyarady and Coury of Paul, Weiss write inter alia:

In Comiskey, the Federal Circuit clarified what makes an abstract idea unpatentable. If an abstract idea has “no claimed practical application, it is not patentable.” And, an abstract idea with a practical application will only be patentable if it “involves another class of statutory subject matter.” The Supreme Court has recognized only two instances when this latter requirement is met: (1) when the abstract idea is a process that is tied to a particular apparatus or (2) when the process changes some material into a different state or thing. For example, if a process involving a mathematical algorithm uses a computer, the process may be patentable because it is tied to a specific apparatus.

In Comiskey, the Federal Circuit found most of the patent claims unpatentable because they were not tied to a particular apparatus: “the application of human intelligence to the solution of practical problems is not in and of itself patentable.” Other claims reciting the use of “modules” or the selection of an arbitrator from a database were found to be patentable subject matter, and the court remanded for a determination of whether these claims are obvious. The
court went further and noted that the “routine addition of modern electronics to an otherwise unpatentable invention typically creates a prima facie case of obviousness.” [emphasis and this matter in brackets added by LawPundit – of course, KSR is cited as KSR Int’l Co. v. Teleflex Inc., 127 S. Ct 1727, 1743-44 (2007) (addition of a well-known electronic sensor to a well-known mechanical adjustable pedal would have been obvious)]

The Nuijten patent application claimed, among other things, a signal with embedded supplemental data that could be used to prevent unauthorized copying. The Federal Circuit found the signal claims unpatentable under 35 U.S.C. § 101. The court found that the claims directed to the signals themselves include “physical but transitory forms of signal transmission,” and held that “such transitory embodiments are not directed to statutory subject matter.” The court defined each class of statutory subject matter under 35 U.S.C. § 101, then analyzed whether the signals fit within the definitions. In each instance, the signals failed to meet the definitions.

Circuit Judge Dyk in his majority opinion in the Comiskey case wrote:

Following the lead of the Supreme Court, this court and our predecessor court have refused to find processes patentable when they merely claimed a mental process standing alone and untied to another category of statutory subject matter even when a practical application was claimed.

It is thus clear that the present statute does not allow patents to be issued on particular business systems—such as a particular type of arbitration—that depend entirely on the use of mental processes. In other words, the patent statute does not allow patents on particular systems that depend for their operation on human intelligence alone, a field of endeavor that both the framers and Congress intended to be beyond the reach of patentable subject matter. Thus, it is established that the application of human intelligence to the solution of practical problems is not in and of itself patentable….

Comiskey’s independent claims 1 and 32 seek to patent the use of human intelligence in and of itself. Like the efforts to patent “a novel way of conducting auctions” which Schrader found to be directed to an abstract idea itself rather than a statutory category, Comiskey’s independent claims 1 and 32 describe an allegedly novel way of requiring and conducting arbitration and are unpatentable.

As far as the Nuijten patent claim is concerned, and not fully in line with Duffy’s interpretation of Section 101 from the standpoint of Scalia-like textualism, the Federal Circuit in our opinion decided the case correctly by saying that signals themselves could not be patented, even if they had special humanly designed “watermarks” attached to them. As written in the majority opinion by Circuit Judge Gajarsa concerning the USPTO claims:

… Nuijten has been allowed claims to the process he invented, a device that performs that process, and a storage medium holding the resulting signals. None of these claims is before us on appeal.

The claims whose disallowance Nuijten appeals are not traditional step-by-step process claims, nor are they directed to any apparatus for generating, receiving, processing, or storing the signals. As mentioned above, such claims have been allowed. The claims on appeal seek to cover the resulting encoded signals themselves.

Nuijten and the PTO agree that the claims include physical but transitory forms of signal transmission such as radio broadcasts, electrical signals through a wire, and light pulses through a fiber-optic cable, so long as those transmissions convey information encoded in the manner disclosed and claimed by Nuijten. We hold that such transitory embodiments are not directed to statutory subject matter.

There is a lot of interesting commentary about this at Patently-O in the comments section, but some of the discussion misses the main point which is that the Federal Circuit had no choice whatsoever but to make the decision that it did, finding signals not to be statutory subject matter. If a SIGNAL itself – watermarked or otherwise individually marked – could be patented “as a unique invention”, then ANY SIGNAL containing ANY – for example – copyrighted information could also be patented, with the logical conclusion that a gigantic and totally chaotic system of individual “signal licensing” would develop, making the already extensive current chaos in patent and copyright law look like a cakewalk. It is of course clear to this observer that signals themselves are never “invented” within the meaning of the patent law, but only the means and methods of their transmission and reception. The waves and particles of the universe are omnipresent. One surely needs to keep separate the inventions of God and the inventions of Man.

Patent Laws and Innovation – AOL Google Yahoo and Microsoft Sued for Patent Infringement

Cade Metz in San Francisco has a nice article at The Register about a new lawsuit by a Texas patent holder against “Google, Yahoo!, and Microsoft And (yawn) AOL“.

It’s all part of the shell game that is called patent law in the USA.

Some people erroneously think that “ideas” can be patented, which is part of the problem that US courts have created in not sticking firmly to the basic patent principle that INVENTIONS can be patented, but IDEAS can not be patented.

One unpatented idea is the widely spread notion that patent law drives innovation, for which there is limited empirical evidence. Quite the contrary, some patent laws in the USA and elsewhere may serve to stifle invention:

TechDirt: New Study Shows Patents And Innovation Are Not Related

Against Monopoly:
Patents Don’t Drive Profits
Patents generally don’t drive profits. Boosting R&D spending can increase the number of patents that a company controls, but there is no statistical relationship between the number or even the quality of patents and overall financial performance
referring to a

Booz Allen study

reviewed by Paul B. Brown at the

New York Times

where he writes:

This is the second year Booz Allen has conducted the study. “Analysis of the 2005 Global Innovation 1,000 confirms the major finding from our initial study last year,” the authors wrote. “Money simply cannot buy effective innovation.”

ACSBlog: Patent Law Stifles Drug Innovation

Digital Majority:
What’s wrong with software patents?

There are of course contrary voices about the influence of patent law, e.g.

IPcentral Weblog: Patents in the Direction and Landscape of Invention is a posting which refers to Petra Moser’s How do Patent Laws Influence Innovation?, part of the Abstract of which reads:

This paper introduces a new data set of close to fifteen thousand innovations at the Crystal Palace World’s Fair in 1851 and at the Centennial Exhibition in 1876 to examine the effects of patent laws on the direction of innovation.

Hmm. 2007 is not 1851 or 1876. Is this relevant to the present problems in patent law?

NYSE – The New York Stock Exchange – New Reserve Display Requirements Effective Today, October 4, 2007

NYSE – The New York Stock Exchange
(Photograph Copyright © 2005 by Andis Kaulins)


Free file hosting from File Den
See NYSE Euronext generally for news and e.g. Ray Pellechia at the Exchanges blog specifically for the new reserve display requirements effective today, October 4, 2007.

The full NYSE Regulation Number 07-98 of October 3, 2007, provides:



I. Purpose

The purpose of this Information Memo is to advise members and member organizations that the NYSE has filed with the Securities and Exchange Commission for immediate effectiveness to amend NYSE Rules 70.20(c)(ii) and (iii) and 104(d)(i) and (ii). The amendments reduce from 1,000 shares to 100 shares the minimum size that a Floor broker or specialist must display at the NYSE best bid or offer in order to use the reserve liquidity function. The rule change is effective as of the opening of trading on October 4, 2007.

II. Background

NYSE rules provide that Floor brokers’ agency interest is represented electronically by including these orders in a separate file, known as the Floor broker agency interest file (commonly known as “e-Quotes”), within the NYSE’s Display Book® system. Floor brokers are permitted to place e-Quotes at or outside the best bid or offer on the NYSE (“NYSE BBO”). Similarly, specialists have the ability to place in a separate file (“specialist interest file” or “s-Quotes”) within the Display Book system their dealer interest at prices at or outside the NYSE BBO.

Pursuant to NYSE Rules 70.20(c)(ii) and (iii) and 104(d)(i) and (ii), some of the interest in either of these files that is at the NYSE BBO may, at the choice of the Floor broker or specialist, be nondisplayed interest. That is, the Floor broker (with respect to e-Quotes) or specialist (with respect to s-Quotes) may decide to hold additional interest in “reserve” and not have it be part of the published bid or offer. Reserve interest is eligible to participate in automatic executions on the NYSE after displayed interest on that side of the market trades. Reserve Floor broker and specialist interest on the same side of the market participate on parity with each other when trading with contra-side interest.

NYSE Rules 70.20(c)(ii) and (iii) and 104(d)(i) and (ii) further provide that Floor brokers and specialists must display a minimum of 1,000 shares of interest at the NYSE BBO on the same side of the market in order to maintain interest at that price. So, for example, if a Floor broker or specialist were to choose to have non-displayed interest in their files at the NYSE bid, 1,000 shares must be made part of the disseminated bid. Both Rules 70.20(c)(ii) and (iii) and 104(d)(i) and (ii) require that if an execution occurs involving the Floor broker or specialist displayed interest that reduces or exhausts such displayed interest at the NYSE BBO, the displayed interest would automatically be replenished from any reserve so that at least 1,000 shares of the Floor broker or specialist reserve interest (or whatever amount remains if less than 1,000 shares) would be displayed.

III. Reduction of minimum displayed size in connection with reserves

Beginning on October 4, 2007, the NYSE is reducing the minimum displayed size
requirement that Floor brokers and specialists must meet to 100 shares1 in order to have non-displayed interest at the NYSE quotation.

The NYSE is retaining the ability for Floor broker and specialist reserve interest to automatically replenish the displayed amount of interest at the NYSE BBO when trades reduce or exhaust such displayed interest. As before, the displayed quantity will be replenished based on the initial instructions from the Floor broker or specialist.

Assume a Floor broker or specialist had originally placed 2,000 shares in reserve and had given instructions to maintain 500 shares as a displayed amount in the quote. If an execution takes place which reduces the displayed amount to 200 shares, 300 shares would be shifted from the reserve to replenish the displayed amount.

The NYSE also is retaining the way in which the residual reserve amounts are handled: if the remaining reserve quantity is less than the amount to be displayed then the remainder of the reserve interest will be displayed in full.

Using the facts of the aforementioned example, if only 200 shares of the original reserve interest remains then the displayed quantity will be the final 200 shares, bringing the total displayed amount to 400 shares.

When entering reserve interest, brokers should be mindful of their best execution obligation to their customers, and should ensure that their choices as to the size of the displayed amount (and the replenishment amount) are consistent with that obligation.

1 Although the amendments state that the minimum display size will be “one round lot”, NYSE systems do not currently support a minimum display for less than 100 shares even in securities where the unit of trading is less than 100 shares.

IV. Staff Contacts

Questions concerning this Information Memorandum should be directed to:

Deanna Logan, Office of the General Counsel, at (212) 656-2389
Jerome Reda, Market Surveillance, at (212) 656-5354

Questions may also be directed to Market Surveillance On-Floor Surveillance Unit via the White Phone or in person at their booth in the EBR. Questions that do not require an answer same day may also be submitted to Ask Market Surveillance. (For information about the Ask Market Surveillance system, refer to Member Education Bulletin 2006-3, which was issued on January 30, 2006, if you or your firm is not already a subscriber.)
John F. Malitzis
Senior Vice President

Market Surveillance”