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Michael J. Keller libels Jerome H. Lemelson

And Then Offers a Retraction

KELLER, MICHAEL J.
IVAX CORPORATION
4400 BISCAYNE BLVD.
MIAMI, FLORIDA 33137
305-575-6036
Attorney 38201

In response to a chain of comments that started with the post: "PATNEWS: $30,000 Lemelson-MIT Student Inventor prize" that I, Ronald J. Riley wrote in a thread titled "Lemelson vs. Crooked Corporations":

Lemelson is the forth

(now third and likely to be second when all his inventions are prosecuted)

most prolific inventor in the history of America with near 500 patents. His patents cover a broad spectrum of technology and products from toys to robotics, flexible automation, machine vision, to name a few. His gift of creativity goes beyond invention and includes the unusual settlement with Motorola that funded this program for $6.5 million.

As a result of my investigating the myth that inventors like Lemelson were creating submarine patents I did a considerable amount of research into both the patents and Mr. Lemelson's life. Dorothy and Jerome Lemelson did not become wealthy from Mr. Lemelson's patents until they were close to 70 years old. They raised a family on Mrs. Lemelson's income as an interior decorator with sporadic income from Mr. Lemelson's patents.

What is truly amazing is how the Lemelson's forged ahead in spite of the fact that many of his inventions were stolen by large companies and a court system that was indifferent to and ignorant of the innovative process. Lemelson continues to invent and fund numerous educational programs that are designed to encourage more innovators. He does this in spite of his age and the fact that numerous large entities continually use their PR groups to smear his good name.

And on Thursday, November 14, 1996 10:06 AM Robert P. Bell, in response to the question what is a submarine patent, wrote the big business version as follows:

A 'submarine patent' describes a patent application filed very early on, describing basically science fiction ideas. Now, you know that a patent application is considered "constructive reduction to practice", so a working model is not needed to get a Patent.

You can make up something in your head and get a patent on it. If you file often enough and long enough, you can eventually get a patent on almost anything. The PTO _does_ slip up once in a while. Given sufficient time and money, I could probably get you a patent on the wheel. Just wear down the Examiner for 20 years or so. Examiners are on a quota system. Every once in a while you get lucky.

During the 'good old days' of the patent business, you could keep a patent application alive indefinitely by filing continuations, divisionals, and FWCs. The idea of a submarine patent is to wait until _someone else_ actually develops the technology, and then draft claims which _read on_ their product. You get the application to issue and then threaten to sue them for infringement.

With 20 year term, this is much harder to do, as you can only keep an application alive 20 years (25 years, tops). 18 month publication and first-to-file will all but put the coffin nails in the submarine patent.

Note that there is _nothing illegal_ about the submarine patent. Corporations as well as individuals use similar tactics. If you (as a corporation) have a patent pending on product X and your competitor comes out with product Y, it is a good idea to see of your application will support 'picture claims' that will read _right on_ your competitor's product Y. When the claims issue, you have your competitor by the short hairs.

See comments about submarines at:

THE REAL CAUSE OF "SUBMARINE PATENTS"

and Mr. Bell went on to say:

Some parties banded together to try to fight him in court - bloody him up a bit to make him think twice. But at that point, he already had made millions and could afford such a fight.

The other big mistake Lemelson made was in going after U.S. companies. Most U.S. Companies laughed when Lemelson went after the Japanese. "Go get 'em, Jerry!" The Japanese viewed Lemelson's acts as yet another barrier to trade - sort of a variant on third world trademark practice. But when Lemelson went after U.S. companies, I think he stepped on one toe too many. After all, those folks had influence and could get laws passed in Congress.

Did Lemelson do anything illegal? Heck No! Immoral? Probably not - he just used the patent system to his fullest advantage (and secured an excellent patent lawyer as well).

He also had the faith and vision to prosecute, _pro se_, patent applications for 30 years, in an era (50's and 60's) when patents were but a joke to the solo inventor. The man had vision (beyond his machine vision systems!).

What do I have against Lemelson? NOTHING. PERIOD. If anything, I have a begrudging admiration for his _chutzpa_.

Michael Keller represented Mitsubishi in it's RICO claim against Mr. Lemelson. They did not prevail and Mitsubishi ultimately had to take a license to Mr. Lemelson's patents. It seems clear that Keller's wounded ego (after not prevailing with the RICO claim) and big mouth got in the way of good judgment.

-----Original Message-----
From: Michael Keller <Michael_Keller@IVAX.com>
To: Multiple recipients of list <patent-l@ftplaw.wuacc.edu>
Date: Monday, November 18, 1996 9:57 AM
Subject: Crooked Inventors against Forthright Corporations

Rumor has it a court ruled in Lemelson v. Ford last week against Lemelson and that his scheming against corporate america may be over. Does anyone have any insight on this?

Lemelson Won Against Ford in Laches Argument!

Mr. Hoffman administered an attitude adjustment with:

-----Original Message-----
From: Louis Hoffman <ljhoffman@patentit.com>
To: Multiple recipients of list <patent-l@ftplaw.wuacc.edu>
Date: Monday, November 18, 1996 2:54 PM
Subject: Libelous comments

Libelous comments
Michael Keller <Michael_Keller@IVAX.com> writes, under the header, "Crooked Inventors against Forthright Corporations", "Rumor has it a court ruled in Lemelson v. Ford last week against Lemelson and that his scheming against corporate america may be over. Does anyone have any insight on this?"

-------------------------------------------------------------

As counsel for Mr. Lemelson, we have not been apprised of any such "rumor." We are particularly concerned that Mr. Keller would libel Mr. Lemelson by calling him "crooked." Mr. Keller, you may wish to retract your statement.

If the District Court in Lemelson v. Ford agrees with Ford's laches defense, it will be based on an admittedly novel theory of undue delay in the patent office, not any "crookedness" on the part of Mr. Lemelson.

Indeed, Ford does not contest that Mr. Lemelson followed all rules of practice in his actions before the PTO. Likewise, nor would it be a judgment that Ford is a "forthright corporation."

By the way, is this the same Michael Keller who works for Graham & James, a law firm that represented Mitsubishi in its action against Mr. Lemelson; since settled?

With respect to Mr. Keller's inquiry--and contrary to the suggestions in the various postings by Mr. Wu of Sidley & Austin--the District Court has not, to our knowledge, ruled in favor of Ford on the laches point. The decision printed in USPQ is merely a recommendation by a Magistrate, and in April, the district judge indicated that he intended to follow it, but he has not issued an opinion or entered judgment.

There is a district court case, decided since April, from the Northern District of California that held that laches is not a viable defense to a patent lawsuit, in general. There is/should be no special rule for Mr. Lemelson.

I suggest that we keep the tone of this "debate" civilized.

Louis J. Hoffman
ljh@PatentIt.com

And then Keller groveled with:

Dear Mr. Hoffman:

I withdraw my statement which inferred that Mr. Lemelson has engaged in illegal acts. I wish in no way to escalate this any further. The subject line to my message was designed to be a reply to Mr. Riley's subject heading regarding inventors and corrupt corporations. While I commend Mr. Riley for standing up for a cause, I do not agree with the recurring themes of his postings that all companies are evil and that inventor's should automatically reap significant shares of corporate profits for any inventive activity. I regret that I did not stop to think about the link between your client and my subject line for
the e-mail. Please accept my apologies.

Thank you for clarifying that there has been no further decision in the Ford case. In the spirit of the internet will you please keep this list updated on decisions that do come down? PTCJ and USPQ take too long and this has been such a hot topic for so long. As you may appreciate, the euitable defences, anti-trust and unfair competition aspects of intellectual property litigation are of considerable interest to me. Right or wrong, the Lemelson cases have been at the cutting edge in these areas. Decisions here will impact future patent litigation. Not inferring anything to your client, the risks of litigating questionable patents will become greater in the future. Companies big and small now view patent litigation as a cost of doing business. Legally right or wrong, they make decisions to sue or risk being sued based on the preceived financial gain. Huge rewards are available for some industries if a competitor is delayed by a few months, e.g. pharmaceutical patents. I'm sure we can all add to the list of industries without too much thought.

Please accept my retraction and apology.

Michael J. Keller

My comments are my own and in no way represent the views of my employer.
-------------------------------------------------------------
Private reply: Michael Keller <Michael_Keller@IVAX.com>

NOTE: That Lemelson did prevail against Ford, see: http://www.InventorEd.org/inventors/Lemelson/lem-ford.html

Which drew the following response from Ronald J. Riley:

-----Original Message-----
From: Ronald J. Riley <rjriley@tir.com>
To: Multiple recipients of list <patent-l@ftplaw.wuacc.edu>
Date: Monday, November 18, 1996 11:07 PM
Subject: Re: Comments Withdrawn

At 08:02 PM 11/18/96 -0600, you wrote:
>Dear Mr. Hoffman:
>
>I withdraw my statement which inferred that Mr. Lemelson has engaged in illegal acts. I wish in no way to escalate this any further. The subject line to my message was designed to be a reply to Mr. Riley's subject heading regarding inventors and corrupt corporations. While I commend Mr. Riley for >standing up for a cause, I do not agree with the recurring themes of his postings that all companies are evil and that inventor's should automatically reap significant shares of corporate profits for any inventive activity. I regret that I did not stop to think about the link between your client and my subject line for the e-mail.

>Please accept my apologies.

I am surprised that a patent attorney doesn't think the inventor should reap profit for his or her invention. I am also thankful that our forefathers saw fit to address invention, otherwise America would be like many other countries where vested interests call all the shots and no one else can get a seat at the gaming tables.

I am not sure how one could miss the link since the threads title was "Lemelson versus crooked corporations". I have never said all corporations were crooked and have posted a number of times that I quickly conclude my business with the honest ones but that contact with others is protracted over very long time frames. As a goodwill gesture I will offer that my experience with Campbell Soup and Translogic was very good, both were very honest and forthright.

My experience with others (over 20) has been that they take a series of ridiculous positions hoping I will go away. Many act like school yard bullies using a series of threats that I am sure all patent attorneys are familiar with.

I am networking with thousands of other inventors including hundreds that are very experienced. It is clear from our discussions that most corporations try to bully inventors into allowing their inventions to be used without any compensation. This problem is epidemic because it has worked so often.

Even when the inventor receives compensation it is often a fraction of the real value, and the inventor has had the period of exclusivity taken from them. (This is the issue that Bob Kearns justifiably raises concerning his patents) A smart inventor knows that the corporation will try to break them through harassing litigation if that looks like it will be less costly than taking a license, and that even if the inventor does litigate and prevails that they will lose a huge amount of productive time and tie up valuable resources that will delay marketing their inventions.

>Thank you for clarifying that there has been no further decision in the Ford case. In the spirit of the internet will you please keep this list updated on decisions that do come down? PTCJ and USPQ take too long and this has been such a hot topic for so long. As you may appreciate, the euitable defences, anti-trust and unfair competition aspects of intellectual property litigation are of considerable interest to me. Right or wrong, the Lemelson cases have been at the cutting edge in these areas. Decisions here will impact future patent litigation.

And those decisions will have a significant impact on whether or not independent inventors can survive, I would hate to see America end up like many other countries whose systems have created barriers so high that the countries lose the benefits that those inventors could bring to all their citizens.

I am disturbed by the fact that public attacks on Lemelson and to a lessor degree inventors in general have been increasing. These attacks appear to be orchestrated by the same organizations that are alleged infringers. The goal seems twofold, first to sway juries and second to persuade legislators to pass laws that will benefit copiers at the expense of inventors. There are many inventors gathering evidence about this problem and we intend to stop it.

>Not inferring anything to your client, the risks of litigating questionable patents will become greater in the future. Companies big and small now view patent litigation as a cost of doing business. Legally right or wrong, they make decisions to sue or risk being sued based on the preceived financial gain.

This sounds like we are in agreement that corporate decisions related to licensing are totally driven by the dollar value of the patent versus the likely cost of dissuading the inventor and not by what is just. This is not surprising since large businesses use similar logic in many other aspects of their operation. I happen to feel it is short sighted and it is destructive over the long haul for the company, it's employees, and all Americans.

>Huge rewards are available for some industries if a competitor is delayed by a few months, e.g. pharmaceutical patents. I'm sure we can all add to the list of industries without too much thought.

Yes, and there is no shortage of corporate managers that will do just about anything to gain those advantages.

Last, I was hoping Mr. Keller could help provide some information about the Mitsubshi case. I keep hearing rumors concerning this case but so far do not have any reliable numbers that would help resolve those rumors. The gist of the rumors are that Mitsubishi spent a larger sum on litigation than a license would have cost them.

I would like to know what royalty Mr. Lemelson asked for up front and what Mitsubshi's total expenditure would have been and the time frame of those costs. I would also like to know the same for the final settlement. And, last I would like to know what Mitsubishi's total legal costs were for the case. Maybe Mr. Hoffman would be kind enough to supply an estimate of the legal costs on their side.

I ask Mr. Jonathan Putnam <jputnam@ziplink.net> to analyze the data to determine if challenging the patent was really worthwhile from an economists point of view. I think many readers would find such data quite useful in making decisions about cases.

>Please accept my retraction and apology.
>
>Michael J. Keller
>
>My comments are my own and in no way represent the views of my employer.

And the following response from Jon Putnam:

-----Original Message-----
From: Jonathan Putnam <jputnam@ziplink.net>
To: Multiple recipients of list <patent-l@ftplaw.wuacc.edu>
Date: Tuesday, November 19, 1996 10:39 AM
Subject: Re: Comments Withdrawn
Ronald J. Riley wrote:

> I ask Mr. Jonathan Putnam <jputnam@ziplink.net> to analyze the data to determine if challenging the patent was really worthwhile from an economists point of view. I think many readers would find such data quite useful in making decisions about cases.

My skills are best used when there are many data points available, so I doubt I could provide a definitive answer in any particular case. Having said that, one does have to arrive at damage amounts in particular instances, and sometimes the behavior of one of the litigating parties can be used as a check on their estimate of the damages. For example, I have seen defendants spend much more on litigation than what they claim it would have cost them to invent around the patent.

The aspects of the subject that make it difficult to analyze also make it interesting. For example, the defendant may choose to fight in a given instance even though it would be cheaper to take a license if it believes that its reputation in future negotiations will suffer. Obviously, measuring expectations about events that may not even occur is very difficult.

There is also a good question about the "optimal stopping problem" faced by both parties: at what point should you settle rather than "throw good money after bad"? It seems to be unclear when they should call the whole thing quits.

I mentioned defendants earlier, but plaintiffs also seem to be unclear on this point, especially small plaintiffs with little likelihood of repeat negotiations. Particularly if they are represented by contingency-fee counsel, the "rational" thing to do often appears to be to continue to prosecute a suit with a low probability of success but a high payoff. This phenomenon gives independent inventors a kind of "gadfly" reputation among corporate types, who are much more concerned about long-term relationships, stability, etc. They aren't necessarily irrational, in the same way that throwing hail-Mary passes at the end of the football game isn't irrational, given that the alternative is certain defeat.

Unfortunately, there is very little good data on licensing vs. litigating; one of the main problems is that there are often cross-claims, so the amount of the settlement reflects a net of the adversaries's claims, rather than separate payments of A to B and B to A, as in most other economic transactions.

Naturally, I am quite interested in as much factual information and standardized data as I can find, so if anyone can point me in the direction of these I would be very grateful.

Jon Putnam

And Mr. Hoffman replied with:

-----Original Message-----
From: Louis Hoffman <ljhoffman@patentit.com>
To: Multiple recipients of list <patent-l@ftplaw.wuacc.edu>
Date: Tuesday, November 19, 1996 12:05 PM
Subject: Settlement
Settlement
Ron Riley wrote:

-----

To take Mr. Keller (and myself) off the hook (and in appreciation for his apology to Mr. Lemelson), I will advise the group that neither Mr. Keller nor I are permitted to comment on the Mitsubishi settlement. Sorry.

There are no "rumors" to my knowledge, only people who know what litigation costs making educated guesses; but how that could be compared to the settlement amount, which is a closely guarded secret, is beyond me.

--Louis J. Hoffman

While I do not have the facts to determine one way or the other in this case, I wish to point out that in many cases an infringer is given poor advice, by counsel that leads to them expending sums on said counsel that dwarf the cost of the settlement. In that case the only real beneficiary of the situation is the attorney who was paid by the hour. In other words both the inventor and the infringing company are victims of the counsel's judgment.

Ronald J. Riley

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