Outsourcing...

I just read on Derek's blog that a commenter got on him about recommending an outsourced solution. The people in question were going to do work in India and the commenter was on Derek about, essentially, "Didn't that just cause you to lose your job? Why are you encouraging this?".

Dereks response of, 1 - that didn't cause me to lose my job and 2- You better learn to deal with outsourced competition as it is here to stay and free trade is a good idea.

I would just expand on this a bit, as we are seeing a bit of this in our industry as well.

We moved our manufacturing out of California for tax and cost reasons. Did we move it far enough? No idea, but will flat out tell you that we are always looking. There is the cost of moving a plant and starting up and disruption VS. the labor cost you have to bear. You have to do this math, and keep doing this math, or you will get your lunch eaten by a competitor who is doing this math. That is why they pay me and people like me and all the operations people. Costs matter to making a profit. Want to make a profit, make sure you watch your costs.

Derek's point that soon Indians will be griping about the next low cost place is wrong (he uses Pakistan and Bangladesh in his example). It is wrong because he uses the future tense. It is the present tense. Hyderabad for software development is no longer the cheapest high quality code writing place. We use a company there and I know what there cost increases have looked like. I also know the services they have started adding on to our work so that they break out of the "low bidder" hand cuffs. You have to be more than low bidder if you want to keep the work, and they have learned that. In addition, if you are trying to just make it as low bidder, you have to make sure and keep your employees dirt poor and in low demand. The second they get educated they will start asking to be paid and your costs will go up. As a side light to this "education" thing, they will also become a whole ton better as workers. Your quality will go up and you will be able to ask for more money from your customers. BUT - you have to accept that there will now be some other part of the world that is way cheaper than you.

I am with Derek on the whole free trade thinger. It is only by bringing everyone up to our standard of living that we can sell stuff to them and then hope to fight to bring jobs back here.

We have been fighting this boogy man for a lot of years. Wasn't Japan supposed to eat our Lunch (90's). You know...it sort of turned out that they weren't superman after all. They do some stuff better than us and some stuff not as well. The better stuff, they are kicking our butts at. The other stuff, we win. This is, I think, good and healthy.

KSR vs. Teleflex

Today the supreme court handed down a ruling in the KSR vs. Teleflex case. Many of us having been watching that for quite awhile and the ruling is set to break new ground. Some links first : The ruling and Some Commentary and some other commentary, and more commentary, and some other commentary. Reading the ruling (where as I described in my previous post they only talk about the claims, and only claim 4 at that) and the commentary (which also only talks about claim 4) shows you how this obviousness thing is shaking out.

Leaving aside the discussion of pedals, which doesn't really matter, we get to a couple of pretty good quotes for consideration.

As just a starting point

We begin by rejecting the rigid approach of the Court of Appeals. Throughout this Court's engagement with the question of obviousness, our cases have set forth an expansive and flexible approach inconsistent with the way the Court of Appeals applied its TSM test here.

****The TSM test was the test for teaching, suggestion, or motivation. We worry about this a lot. The court explains is thusly,

Seeking to resolve the question of obviousness with more uniformity and consistency, the Court of Appeals for the Federal Circuit has employed an approach referred to by the parties as the “teaching, suggestion, or motivation” test (TSM test), under which a patent claim is only proved obvious if “some motivation or suggestion to combine the prior art teachings” can be found in the prior art, the nature of the problem, or the knowledge of a person having ordinary skill in the art. See, e.g., Al-Site Corp. v. VSI

and then a lay out of really where they want to set the lines.

For over a half century, the Court has held that a “patent for a combination which only unites old elements with no change in their respective functions . . . obviously withdraws what is already known into the field of its monopoly and diminishes the resources available to skillful men.” Great Atlantic & Pacific Tea Co. v. Supermarket Equipment Corp., 340 U. S. 147, 152 (1950). This is a principal reason for declining to allow patents for what is obvious. The combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results. Three cases decided after Graham illustrate the application of this doctrine.

In United States v. Adams, 383 U. S. 39, 40 (1966), a companion case to Graham, the Court considered the obviousness of a “wet battery” that varied from prior designs in two ways: It contained water, rather than the acids conventionally employed in storage batteries; and its electrodes were magnesium and cuprous chloride, rather than zinc and silver chloride. The Court recognized that when a patent claims a structure already known in the prior art that is altered by the mere substitution of one element for another known in the field, the combination must do more than yield a predictable result. 383 U. S., at 50–51. It nevertheless rejected the Government’s claim that Adams’s battery was obvious. The Court relied upon the corollary principle that when the prior art teaches away from combining certain known elements, discovery of a successful means of combining them is more likely to be nonobvious. Id., at 51–52. When Adams designed his battery, the prior art warned that risks were involved in using the types of electrodes he employed. The fact that the elements worked together in an unexpected and fruitful manner supported the conclusion that Adams’s design was not obvious to those skilled in the art.

In Anderson’s-Black Rock, Inc. v. Pavement Salvage Co., 396 U. S. 57 (1969), the Court elaborated on this approach.

The subject matter of the patent before the Court was a device combining two pre-existing elements: a radiant-heat burner and a paving machine. The device, the Court concluded, did not create some new synergy: The radiant-heat burner functioned just as a burner was expected to function; and the paving machine did the same. The two in combination did no more than they would in separate, sequential operation. Id., at 60–62. In those circumstances, “while the combination of old elements performed a useful function, it added nothing to the nature and quality of the radiant-heat burner already patented,” and the patent failed under §103. Id., at 62 (footnote omitted).

Finally, in Sakraida v. AG Pro, Inc., 425 U. S. 273 (1976), the Court derived from the precedents the conclusion that when a patent “simply arranges old elements with each performing the same function it had been known to perform” and yields no more than one would expect from such an arrangement, the combination is obvious. Id., at 282.

The principles underlying these cases are instructive when the question is whether a patent claiming the combination of elements of prior art is obvious. When a work is available in one field of endeavor, design incentives and other market forces can prompt variations of it, either in the same field or a different one. If a person of ordinary skill can implement a predictable variation, §103 likely bars its patentability. For the same reason, if a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill. Sakraida and Anderson’s-Black Rock are illustrative -- a court must ask whether the improvement is more than the predictable use of prior art elements according to their established functions.

This is interesting as it is setting up where they (supreme court) philosophically fall on the matter.

This is what will really stand a lot of biological patents being pursued/issued today on it's head.

As our precedents make clear, however, the analysis need not seek out precise teachings directed to the specific subject matter of the challenged claim, for a court can take account of the inferences and creative steps that a person of ordinary skill in the art would employ.

This means that if a technician would have thought of it, you likely shouldn't get a patent on it. This is huge for getting rid of a lot of the combination patents that are being pursued (admittedly by us as well as others...). They get right to the heart of this combination business as well, stating...

When it first established the requirement of demonstrating a teaching, suggestion, or motivation to combine known elements in order to show that the combination is obvious, the Court of Customs and Patent Appeals captured a helpful insight. See Application of Bergel, 292 F. 2d 955, 956–957 (1961). As is clear from cases such as Adams, a patent composed of several elements is not proved obvious merely by demonstrating that each of its elements was, independently, known in the prior art. Although common sense directs one to look with care at a patent application that claims as innovation the combination of two known devices according to their established functions, it can be important to identify a reason that would have prompted a person of ordinary skill in the relevant field to combine the elements in the way the claimed new invention does. This is so because inventions in most, if not all, instances rely upon building blocks long since uncovered, and claimed discoveries almost of necessity will be combinations of what, in some sense, is already known.

....So making known mutations that give expected results may not actually be patentable.

When a work is available in one field of endeavor, design incentives and other market forces can prompt variations of it, either in the same field or a different one. If a person of ordinary skill can implement a predictable variation, §103 likely bars its patentability. For the same reason, if a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill. Sakraida and Anderson’s-Black Rock are illustrative -- a court must ask whether the improvement is more than the predictable use of prior art elements according to their established functions.

and just before it,

Finally, in Sakraida v. AG Pro, Inc., 425 U. S. 273 (1976), the Court derived from the precedents the conclusion that when a patent “simply arranges old elements with each performing the same function it had been known to perform” and yields no more than one would expect from such an arrangement, the combination is obvious. Id., at 282.

which really hits at making expected mutations and getting expected results.

This is, in total, a pretty interesting ruling. How will it affect our patent filing strategy? No idea. We will likely wait and see what the patent office does. It will certainly affect our litigation strategy, as it opens up all new ways to attack patents. For those where we are the defendent, we are happy. For those where we are the plantiff, we are sad. There will be a period here where we all try and figure out the new rules. I would expect to see someone (hopefully not us) bet huge on some interpretation and lose big. I would expect most of the rest of us to hedge a bit. I may give in on some issues a bit more quickly. I would expect to push a bit further/harder on other issues. We will see... in the mean time, I expect that a lot of biotech patent people are all reading this as hard as I am. Anyone not reading it...I would love to do a deal with you.

Patent Analysis- Its all about the claims folks....

I have been reading a lot of computer people talk about patent's. Here, at ArsTechnica, is the latest example that made me want to write this post. Timothy B. Lee goes on in the post and talks about the Verizon patents that cover voice over IP. In his discussion of the patents, he never talks about the actual claims.

He talks about the background. He talks about the general patent and market landscape. Never once does he talk about the actual claims of the patent.

The claims are the only part that matters. They are the part you sue someone for. They are the part the court interprets. They are the part that you file your obviousness challenge on. The only reason for the rest of the patent to be written at all is to support your claims. If you can't point to at least 1 part of a sentence in your background that supports your claim, then you don't get the claim allowed by the patent office. Once the support for a claim is shown to be there, then the background doesn't matter. The claims control what limitations are on the interpretation, and what is covered. You can't sue someone because of something that is in the methods section. Only the claims.

You can have a background section that is totally obvious and says nothing at all ground breaking. Given his description of the patents in question, they likely do have that. BUT - the claims are all that matters. Read those. Parse those. Figure those out. Any time that the claims use a tortuous definition, you get to look back into the body of the patent and see how that term was defined. It is only by doing this very long and tortured analysis that you can say, with any certainty, what a patent does and does not cover. Given that information, you can then say whether or not it is, or is not, obvious.

His article references the KSR v. Teleflex ruling that the supreme court was going to hand down. They have done so, and I will talk about that next.

The 10+ year hurdle

As previously mentioned, I have sold my way out of a job. I am, in the course of things, interviewing for positions at the company that is acquiring us and I have a pretty good track record to point at (I mean...you just bought us...that has to be worth something!). I continue to get paid and go to work every day and I will, likely, fingers crossed, in due course, get an interesting job from the acquiror. I equally likely will have to switch cities I live in to do it. My wife is not that psyched about that idea. She, however, likes me moping the around the house being a grumpy pain in the rear even less.

So - I have also started to hit the job circuit in a big way. The core question being - can I find a really cool job that pays me as well as I currently am and that doesn't require me to move. If it does require me to move, will it have a better package than I think I can expect from the folks who bought us?

NO

at least not yet. I have fired up every recruiter I know (a non-small number) and have started spamming my resume to former friends. My LinkedIn network has been activated to find stuff. Things are afoot. Phone interviews have already started. BUT....

10+ years industry experience

is on every job that I am currently interested in. HR people seem stuck on this. I am routing around them, but they are a bit of block on the recruiter path. The recruiters I know well are pushing through this but it is still there. I live in fear of having to do a boring job.

I can't believe I have only been out of graduate school for 6 years. Grrrrrrr....

The process of being acquired...

For those reading from the academic side and living in fear of what an acquisition means, I thought I would talk a little bit about that.

I have been involved in this acquisition for quite a while and couldn't talk. Besides any other world problems, the SEC would have frowned on the revelation and thrown me in jail. It has been a bit surreal to, for example, go to meetings and talk about long term plans that I happen to know full well won't happen (or might now happen or whatever). Up until the day before announcement I was leading this double life - The public face is no different and was setting up things. The other 1/2 was working all night (both literally and figuratively) to get the company sold. I lied to, approximately, everyone. That was getting very old. I had been doing that for about 3 months or so and it was old...

SO - now we have announced and are in the period between announcement and actual close of deal. There are filings with the SEC going on to get their blessing that there is not an anti-trust problem. There are meetings to figure out how, post close, to integrate the two businesses.

We are a bit lucky in that we were bought for our manufacturing and our R+D. Our sites most likely won't be shut down, as we aren't duplicative of anything they already have. Were there mass shutdowns in the future, this would have a very different feel. As it is, the number of of us who are facing unemployment is small. Unfortunately, I am one of them. Post close, the role I have now will be gone. I have known this from when I started working on this, but really pushed it out of my head. Now, when I really have little to do, it is first and foremost in my mind again. I have fired up the recruiters and am looking around within the acquiring company for positions of interest. I made a favorable impression on the acquiring folks, so there is a lot of support for finding me something...but you still have to do it. Don't have it done yet. Stress exists. Are we moving again? I have some quasi permission from my wife to move us if we have to, but I have to say that San Diego is pretty much the best place on the planet to live (obviously-my opinion. Your mileage may/will vary.)

For the rest of the people in the company - there is a lot of unknowns. I know that they will likely come out OK, but until the close happens and full sets of plans can be developed and spelled out for folks, there is a lot of uncertainty. Uncertainty is not good...

It is funny that in the middle of this, I go read this over at ars technica. Lay offs and uncertainty are all over the place. Academics are just getting used to this idea. Don't know that it is easier in industry or if you are just supposed to expect it more - but it is beat all around.

In any case - I am still here and fighting to find a new job. The company is chugging ahead on momentum as I don't think most people have really stopped and thought about it yet. Part of (and it is a huge part of it) my job is to not let them stop and think about it, as they are OK. Lets stay on target with projects and get products launched. Not much else to do anyway.... I know I'm dead, but I know they aren't. I've known I was dead for awhile though and have been really saving money in order to get through a dry spell if it comes to that.

Fun? I am still having it.

Acquired....

We just announced our intention to be acquired on Friday. I have been working on this for a long while and am pretty relieved to be on to the next step. BUT - oh wow... they didn't teach you about this in grad school.

I will write more when my hang over wears off, as I am pretty happy!