Scott Harris is a former big-firm patent attorney who is also, according to his patents and related lawsuits, responsible for a wide array of technological innovations: from anti-spam software to toasters to "enhancing touch and feel on the Internet."
Over the years, Harris's patents have been used to sue a wide range of companies, including Dell, FedEx, Motorola, and Google. The Harris patent that had progressed furthest towards trial, No. 6,666,377, is controlled by BarTex Research LLC, a patent-holding company that filed an infringement suit against FedEx in the Eastern District of Texas two weeks after it was formed there. In the company's complaint, BarTex lawyers at the Chicago patent boutique Niro, Scavone, Haller & Niro claim that the existence of the '377 patent, which covers bar code-scanning technology, means FedEx should make the holding company a royalty payment on every package it ships.
But BarTex suffered a setback in that lawsuit last month when E.D. Texas Judge Leonard Davis finalized a claim construction order that could wind up invalidating the '377 patent. BarTex's attorneys have stipulated as much if Davis' claim construction is allowed to stand—something they hope to prevent. On March 16, they filed papers indicating they will appeal Davis's Markman order to the Court of Appeals for the Federal Circuit. (Read Judge Davis' order finalizing the claim construction [PDF].)
BarTex is owned by Florida attorney James "Beau" Parker, who also asserts Harris patents through other holding companies, such as Innovative Patented Technologies and Illinois Computer Research. Harris, a former Fish & Richardon shareholder, sold his patents to Parker and others under duress while still with Fish, but won't reveal what financial relationships he maintains, if any, with the holding companies that now own those patents.
The patent at issue in the FedEx case is on a two-part bar code, in which the second part includes some or all of the information contained in the first part. That redundancy is the difference that supposedly set the Harris patent apart from earlier bar codes.
Once FedEx's attorneys at Finnegan, Henderson, Farabow, Garrett & Dunner began researching the history of the '337 patent, which Harris filed for in 2000, it turned out that last feature wasn't so special, after all. Their digging turned up significant prior art from several sources: codes from a national standard-setting group created in the late 1990s, bar codes from RPS, the company that later became FedEx Ground, UPS bar code technology, and other earlier patents.
FedEx's own digital tracking system actually relies on placing multiple, separately placed bar codes on the packages it transports. Lead Finnegan lawyer Dori Hines said her team was able to successfully argue that the patent BarTex was asserting covered only a single bar code. The defense team successfully argued that in the '337 patent, the word "second" refers to the second portion of one bar code. BarTex's lawyers were forced to admit that the prior art references turned up by the Finnegan lawyers will invalidate the patent unless Davis's order is reversed on appeal.
The path Harris followed on his way to acquiring this patent demonstrates how savvy applicants can get patents that include claims that strike those who operate actual real-world businesses as outlandish.
In his initial application, Harris sought a patent on a two-part bar code, with each of the parts containing unique information. Additionally, Harris sought numerous related claims—60 in total. These included: a claim on bar codes used in personal ID cards, bar codes that could be combined with e-mail or advertising, and bar codes containing data related to photos or the time and place of meeting.
Unfortunately for Harris, the two-part bar code had already been invented, according to the Patent and Trademark Office examiner who rejected all of the lawyer-inventor's claims. The inspector based his decision mainly on the existence of an earlier patent, No. 5,920,062. That patent—filed in 1997 and describing a bar code with multiple "modules"—belongs to Uniform Code Council, Inc. (also known as the folks who actually invented standardized bar codes; in case you're curious, such codes have been in use since since 1974.) See Harris' rejected original application [PDF].
Harris' bar-code inventing process didn't stop there. Like all patent applicants, he was allowed an unlimited number of chances to get it right. He modified his idea so that the bar code's second part would include its own unique information, but would also contain data embedded in the first part of the code. It was an idea, Harris explained in a four-page letter to the patent examiner dated April 15, 2003, that nobody had ever thought of before: "Why would two bar codes be provided that included the same information? This is quite simply not obvious based on the prior art. In fact, it is the present inventors [sic] recognition that using two bar codes with overlapping information may produce a significant advantage..." See Harris' amended application [PDF].
Though the examiner found many examples of multiple-part bar codes, he didn't find any examples of ones that had multiple portions with redundant information similar to what Harris described. As a result, Harris was notified in July 2003 that his patent would be issued.
In a nutshell, Harris tried to get a patent on a certain type of bar code, and was turned down. Then he added what was essentially redundant information to his original invention, and, voilà, the nation was blessed with a new invention.
In an interview with The Prior Art, Harris said that multiple bar codes containing "overlapping" information was always part of his invention, but that he began with a broad claim because that's the standard patent prosecution strategy. And, Harris adds, if the claim is interpreted correctly, he still believes his idea was truly a new one. "If the patent is interpreted the way it should probably be interpreted, I think the prior art is not a problem," he says. "If the claim construction exists as it stands, then the prior art is a problem."
It's not unusual, Harris says, for the value of a patented invention to rise and fall based on the interpretation of a handful of words. "It's unfortunately an issue of our patent system that you take these words in the claim, and when you litigate them you apply so much scrutiny to them....You're pulling a word in different directions. Patents can rise and fall on a single word."
The prosecution history of '377 patent is an object lesson in why defendants in infringement suits often express frustration over having to fend off patents that they consider vague, unreasonably broad, or just plain senseless given the state of the art in their industries. But the rules of acquiring patents strongly favor a determined and clever prosecutor.
Consider the examiner's position: He or she is faced with limited time and resources—and an applicant free to ask for as many "do-overs" as he can afford. The examiner can't say "no" without a reason to do so, and if that reason is prior art, it has to be more or less spot-on. It's also worth noting that examiners work in a system that rewards the granting of patents, but not endless arguments with an applicant.
Because Harris prosecuted the patent himself, it has only cost him about $2,000, according to PTO documents—$861 when he filed the application, $690 upon issuance, and a $450 maintenance fee paid in 2007. Contrast that with the hundreds of thousands of dollars—at going rates for IP litigation FedEx's costs—that FedEx has probably spent in legal fees to "uninvent" the '377 patent. Had the company not won at the Markman stage, and been forced to go to trial, its costs could have soared into the millions, even to secure a clean victory.
In his interview with TPA, Harris described the a-ha moment that led to the invention in the '377 patent: "I was actually standing in line in a department store, and the lady in front of me used her charge card. They asked her for ID and she had a piece of masking tape over her picture, and she said something like, 'That is such an ugly picture of me, I can't stand looking at it.' That led me to this idea that maybe you could use a bar code on the driver's license, and that bar code could be interpreted by a machine to show a picture... some of what was in this application is different ways of getting more detail into a bar code. One idea I thought of is putting two bar codes, and you'd want the same information to be in both bar codes. There would be partial overlap, not complete overlap. That's really where it started."
Harris continues to prosecute patent applications for BarTex. PTO records show several pending patent applications related to the '377 patent at issue in this case, including that which has matured into a granted patent, No. 7,578,443.
In addition to several lawyers from the Niro Scavone law firm, BarTex employed two prominent East Texas patent lawyers, Johnny Ward Jr. and Eric Albritton, as local counsel.
Photo: C. Cruz / flickr