The New Tata Nano; How Important Are the Patents?

As some of you may recall, one of my interests is considering the manner in which influential periodicals and newspapers cover IP matters. After all, to the extent that managers still read print media, it can be expected that they will take note of the contents of such periodicals and newspapers. If this assumption is correct, it bears close attention how IP matters are portrayed in these print contents.

Against this backdrop, I read with interest an article that appeared in the March 28th issue of The Economist ("The Tata Nano: The New People's Car") on the current state of the Tata Nano on its reported launch last week. The Tata Nano is promoted as the cheapest mass market auto ever to hit the showroom. With a starting price of approximately $2,000, it is touted as the motor vehicle that will bring car ownership to the masses. If it succeeds in selling substantial quantities, it will indeed usher in a new era for the penetration of car ownership in the developing world, replete with challenges to infrastructure, population dispersal, and work patterns.

My comments are not directed to the observations of the article, which describe the birth pains of the project and the financial , logistic and pressures on Tata, but rather to the side-bar piece, "Inside the Tata Nano: No Small Achievement." The side-bar weighs in on the question of whether the new car will deliver the kind of performance and design that will enable it to reach its potential. In the very last paragraph, it then notes that Tata has filed for three dozen patents, "most of innovations that are out of sight." Thus, one such patent application addressed the placement of the battery under the driver's seat rather than together with the engine in the back of the car. That is the end of the discussion on the patents.

FIND THE PATENT HERE

What am I supposed to make of the contents of the paragraph? After being told, in previous paragraphs, that the car is small but "surprisingly spacious"; that its zero to 60 mph takes 30 seconds, but that it is a good drive and fuel efficient; that the placement of the engine in the rear is a marvel of design; that it has some flaws (what car does not?), and that is the bane of environmentalists, we are now told that Tata has filed over 30 patent applications. To what end?

Did Tata do this to send a signal to the market that the car represents a technological breakthrough and to keep competitors on edge (at least until the applications are published); are the inventions covered by the applications crucial to the success of the car; if so, do we know what makes the inventions so crucial; and what happens to the Tata Nano project if the applications, in while or in part, are not granted? Or is this simply a bit of public relations, under the theory that it always look good to claim that your new product is the subject of multiple patent applications, irrespective of their genuine value to the project? The article does not say.

Truth be told, we work very hard at trying to get our management students to treat IP as one component of the management mix, sometimes more crucial, sometimes less crucial to the success of the particular company and its activities. This means that we try not to be either a true believer or mere cheerleader for IP rights. In doing so, we hope that the sources of media information and manner of media presentation upon which managers may rely in fashioning their view of the business world will assist them in integrating IP within their larger managerial concerns. From the point of view, I wish that The Economist had done a bit better in connection with its treatment of patent filings and the Tata Nano.

NO IP CHEERELEADERS NEEDED HERE

Bilski for the Supreme Court?

IP Finance has previously noted the ripples which the US Bilski ruling has caused in the world of IP asset investment. That decision, which appears to limit greatly the scope of the State Street doctrine for patenting business method patents in the US, is now being lined up for a revisit by the Supreme Court. According to a note received from Annsley Merelle Ward:

"The lawyers acting on behalf of Bernard Bilski and Rand Warsaw of WeatherWise USA Inc. of Pittsburgh have submitted a petition to the Supreme Court to review the US Court of Appeals decision which rejected their computerized method for using weather data to predict prices of commodities and energy costs was not patentable. This may be the culmination of the growing unease in the ever-changing patentability environment in the States where the science, technology and bio-tech communities have been voicing disquiet about the ever increasing restriction on what is and what is not patentable. 

It is argued by some that the ‘process’ or physical transformation test is an artifice, especially when considering that the Supreme Court has not delivered a decision on the question of patentability since 1981 (The novelty and non-obviousness of a computer producing a process or physical change has undoubtedly progressed since the 80s). Though commentators in the states are having a field day engaging in the economic ratio for “why we patent”, if the case is accepted by the Supreme Court it would be the first time in twenty years that we will be hopefully given some clear information to “what we patent”".

For more background and information see this piece in the Chicago Tribune.

Ocean pours oil on troubled waters

IP auction company Ocean Tomo has sent a circular to interested parties, to calm their nerves over the US Federal Court's recent en banc decision in re Bilski (noted here on Patently-O). According to Ocean Tomo this decision

"... is unlikely to substantially change the scope of subject matter eligible for so-called business method patents or to alter the value of business method portfolios. The Court, relying on ... Supreme Court precedent, articulated a “machine or transformation test” for patentability. Under this test “an applicant may show that a process claim satisfies §101 either by showing that his claim is tied to a particular machine, or by showing that his claim transforms an article.” However, because the claim at issue in Bilski was admitted to be “not limited to operation on a computer,” or to carrying out the process by “any specific machine or apparatus,” the Court expressly declined to consider the contours of the machine implementation alternative. “[I]ssues specific to the machine implementation part of the test are not before us today. We leave to future cases the elaboration of the precise contours of machine implementation, as well as the answers to particular questions, such as whether or when recitation of a computer suffices to tie a process claim to a particular machine.” (Emphasis added).

The ... “transformation” test is broad. For example, ... a claim direct to the “transformation” of the depiction of a physical object on a visual display meets that test. ... the Court overruled the “useful, concrete and tangible result” test established in State Street, holding that it was “insufficient to determine whether a claim is patentable subject matter under §101.” But while this test is no longer the law, the new test will likely not alter the ultimate answer to the question as applied to particular business methods.

“Business method patents” commonly claim implementation by computer. Accordingly, the Court’s refusal to consider “whether or when recitation of a computer” is sufficient to render a process claim patentable means that the practical impact of Bilski should be limited. Absent development of further case law which squarely addresses this point, Bilski does not appear to materially change the business method patent landscape, or alter valuations of these patents".

There may be an element of wishful thinking or self-interest here but, to me at least, OT's position seems about right. Any comments?