PATENT OFFICE DIRECTOR DAVID KAPPOS CONVENED RARE SECRET COURT WITH IBM CRONIES TO KILL LEADER'S PATENT

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Patents are worthless in the hands of “reexamination courts” convened by Patent Office judges and lawyers secretly allied with big infringers

Fig. 1—Twenty-five year IBMer David J. Kappos was appointed Patent Office Director by Barack Obama in a rare recess appointment in Aug. 2009. Kappos was a long time protege of Clinton national security advisor James P. Chandler, III who was directing the rogue C.I.A.'s operation to weaponize the Internet. This rogue C.I.A. stole the social networking invention of Columbus innovator Leader Technologies, Inc. and distributed it through the IBM Eclipse Foundation, started with a $40 million "donation" from IBM.

Contributing Writers | Opinion | AMERICAN S FOR INNOVATION  | May 10, 2014, Updated Oct. 25, 2017 | PDF

ORIGINAL POST

(May 10, 2014)—Ohio innovator Leader Technologies released a letter sent this week to the U.S. Patent Office. Leader’s CEO Michael McKibben asked the Patent Office to rescind the latest decision of a secret “patent reexamination” court. This administrative court was convened by former director, David J. Kappos, using a rare statute that pundits say has never been used in their memory.

On Jul. 27, 2010, Facebook was found guilty in federal court of infringing Leader’s patent for social networking on 11 of 11 counts. Even so, this Kappos administrative court decided on May 6th in secret deliberations to kill Leader’s entire patent. Leader filed for the patent in 2002; was awarded the patent in 2006; and, proved Facebook was infringing the patent in 2010.

Dirty little secret: a crony lawyer underground runs the USPTO

Few inventors realize that being awarded a patent is only the beginning. Patent reexaminations can create as much or more expense and time to protect the patent from predators as it took to get it.

One veteran inventor interviewed—a holder of over a dozen technology patents—is facing nine reexaminations right now, on just one patent. This inventor believes that reexaminations have become the new tool that big infringers use to “kick the can down the road” until the inventor runs out of money. In this way, the “America Invents Act” has been nothing more than a license for big infringers to harass and steal from smaller inventors.

Patent administrative “reexaminations” are the dirty little power secret of the crony lawyer underground in Washington, D.C. If you lose in open court, then you can still kill the patentee in secret using “administrative actions” by cronies inside the Patent Office. After all, the people staffing the Patent Office usually worked at the law firms who file patent applications, and they look for employment at those same firms later.  The revolving door of conflicting influences is evident, and it is slowly choking American innovators. The Leader v. Facebook matter, though, has gone well beyond everyday corruption.

Fig. 2—David J. Kappos (left) and Randall R. Rader (center) speaking at a conference about "How to Bridge the Transatlantic IP Divide."

[Editorial: Evidently, the answer is to grease the skids for their cronies to steal the innovations of others, and exploit them globally... after all, they know what's best for us. While they run roughshod over the U.S. Constitution in private, they praise it publicly with such euphamisms as "The America Invents Act."] Photo: Flickr.

On Apr. 19, 2013, the secret Kappos court decided that supposed new prior art evidence had compelled them to reverse en masse 12 years of their previous decisions affirming Leader’s patent claims. However, Kappos cited no evidence whatsoever for this claim. Instead, the court merely regurgitated Facebook’s earlier spurious arguments, arguments that were defeated already at trial and in two previous reexaminations. The examiner, Deandra M. Hughes, appears to have bowed to the pressure from the Kappos' kangaroo court.

In their failed arguments, Facebook repeatedly cited Microsoft and Xerox documents. This is an important fact in this story.

The new evidence must be “compelling” and the use of this power “rare”

According to patent law (specifically, 37 CFR 1.520 of the Code of Federal Regulations regarding patent reexaminations), reexaminations are intended to occur if “compelling” new evidence of prior art comes to light that could bring a patent’s validity into question. The powers are to be used only in a “rare” circumstance where a gross injustice would otherwise occur. Reexams were a big topic in the America Invents Act. The Act was heavily promoted by two key players in this story, Director David J. Kappos, and PTO Counsel Pinchus M. Laufer.

Former IBMer suspects foul play

Kappos initiated this reexam order against Leader on his own initiative. Curiously, three weeks earlier, on Mar. 22, 2010, IBM sold Facebook 750 patents. This sale was puzzling to one former IBMer interviewed for this story. He said, “This sale never made sense to me. IBM takes great pride in its patent portfolio. In fact, as recently as January 14th of this year, IBM issued a press release announcing its 21st straight year of patent leadership. Selling away patents is against IBM’s core mission. License, for sure, but sell outright, never. The moment I heard that news, I suspected foul play.”

Leader CEO Michael McKibben said, “When our lawyers received the order they were dumbfounded. They had never in their careers seen a Patent Officer Director use this ‘rare’ privilege. ”

AFI investigators, too, have puzzled over Facebook’s relationship to IBM, ever since Facebook purchased the 750 IBM patents. That was two months before Facebook went public on May 18, 2012.

Mar. 22, 2012 (IBM Patents Sold)   -  Apr. 17 (former IBMer Kappos Reexam Order)  -  May 18 (Facebook IPO)

Sandwiched in between the 750 patent sale and the Facebook IPO, on Apr. 17, 2012, Director Kappos invoked his “rare” statutory privilege against Leader. The fog is finally clearing as to his motive.

AFI investigators have researched the backgrounds of USPTO personnel involved in this kangaroo court.  The first glaring fact is that IBMer Kappos staffed the court with former IBM devotees, and in doing so, “stacked the deck” against Leader.

The IBMer we interviewed quipped: “once an IBMer, always an IBMer, it becomes part of our DNA. We took great pride in metaphorically bleeding ‘IBM blue.’”

The Patent Office invoked Executive Privilege to block FOIA disclosure in Leader v. Facebook

Here’s a summary of the patents these former examiners have issued to IBM, Microsoft and Xerox (a.k.a. Palo Alto Research Center - PARC). We’ve included check marks (X) for known relationships also. Since the Patent Office FOIA officer, Kathryn W. Siehndel, has stonewalled release of the judicial and employee conflicts logs (except for William J. Stoffel), we have marked the other relationships as “concealed.” Note that FOIA officer Siehndel invoked executive privilege to block release of information. We can only presume that President Obama was protecting his political interest in Facebook.

David J. Kappos' secret kangaroo court

Kappos' Kangaroo Court, Patent Trial and Appeal Board (PTAB)*	Title	IBM Patents Issued	Microsoft Patents Issued	Xerox Patents Issued*		Vanguard Fund Relationship	Fidelity Fund Relationship	White & Case LLP Relationship
U.S. Department of Commerce (Kappos' & PTAB bosses)
Penny S. Pritzker	Sec'ty	X	X	X		X	X	X
Rebecca M. Blank	Sec'ty	X	X	X		X	X	X
Cameron F. Kerry	Counsel	X	X	X		X	X	X
U.S. Patent Office
David J. Kappos	Director	X	X	X		X	Concealed	Concealed
Stephen C. Siu*	Judge	X	X	Concealed		Concealed	Concealed	Concealed
Allen R. MacDonald*	Judge	127	8	12		Concealed	Concealed	Concealed
Meredith J. Petravick*	Judge	Concealed	Concealed	Concealed		Concealed	Concealed	Concealed
Kimberly Jordan*	Counsel	12	10	Concealed		Concealed	Concealed	Concealed
Daniel Ryman*	Counsel	21	8	Concealed		Concealed	Concealed	Concealed
Pinchus M. Laufer*	Counsel	9	3	2		Concealed	Concealed	Concealed
William J. Stoffel*	Counsel	x	Concealed	Concealed		X	X	Concealed
Kathryn W. Siehndel	FOIA	X	X	Concealed		Concealed	Concealed	X
SUBTOTALS		169	29	14		X	X	X

Table 1: Patent Trial and Appeal Board (PTAB) convened by the unilateral initiative of Director David J. Kappos, former IBM General Counsel for intellectual property, to reexamine Leader Technologies, Inc.'s U.S. Patent No. 7,139,761 a third time, even though Facebook had not asked for the action, and Facebook had lost the arguments at trial and in two previous reexaminations.

Updated, May 11, 2014

Mistrial! your honor, Leader is trying to let facts get in the way of a good story

*Xerox also assigned patents to its research arm named Palo Alto Research Center (PARC). Of particular note: One of the patents Facebook continues to push forward as prior art (and has lost the argument each time), is Swartz et al, Xerox Corporation, U.S. Patent No. 6,236,994.

The Tale of Xerox's Mr. Swartz

Fig. 3—Facebook argued that Leader's patent examiner, Diane Mizrahi, later got it wrong with Leader's innovation, but that she earlier got it right with Xerox's Swartz patent application. So, they argued that Mizrahi was both credible and not credible in the same argument. This has come to be expected from Facebook's duplicity. Photo: Stepbystep.com

Here's the hilarious backstory on Facebook's The Tale of Xerox's Mr. Swartz. According to the trial transcript (p. 308 teed up, click here), Leader's attorney Paul Andre, pointed out that the Patent Examiner on Leader's patent application, Diane Mizrahi, had examined Swartz earlier. So yet again, Facebook was speaking out of both sides of their mouths. They wanted the jury to believe that the examiner, who had earlier examined Swartz and got it right, had later gotten it wrong on Leader's application. Now here's the funny part, Facebook filed for a mistrial over this fact!

Following Facebook's outrage, Judge Leonard P. Stark ruled that Mr. Andre could no longer speak of such vileness. Seriously, he prohibited any further exploration of the fact that Facebook was arguing an utter contradiction of logic.

So for non-patent people (most of us), here's the important point. Facebook lost the Swartz argument at trial, despite Judge Stark's help. They then lost the Swartz argument in two previoius reexams. The fact that the new examiner, Deandra M. Hughes, would do a complete flip-flop of her much tested opinion, stretches credulity. Bottom line, Facebook, IBM, Microsoft and Xerox are attempting by regulatory corruption and stealth what they could not win in a fair fight.

This kangaroo court has collectively issued 212 patents to IBM, Microsoft and Xerox (a.k.a. Palo Alto Research Center - PARC). William J. Stoffel specifically disclosed conflicts with IBM, Vanguard and Fidelity—all beneficiaries of Facebook interests.  FOIA Officer Kathryn W. Siehndel worked for Facebook’s attorney in this case, White & Case LLP. Everyone else has stonewalled disclosure of their conflicts logs. White & Case LLP also represents IBM and Microsoft.

Still being investigated are connections between these IBMers and Leader’s first patent attorney, Professor James P. Chandler. At the very least, these individuals should have disclosed their prior associations with Professor Chandler and recused themselves. Professor Chandler’s work as one of IBM’s chief outside counsels is public knowledge in the Washington, D.C. legal community.

Former FBI Director Louis Freeh made special mention of Professor Chandler and IBM in his now famous Feb. 28, 1996 Senate testimony on the proposed Economic Espionage Act.

Facebook – IBM Common Interest Discovered

Until now, the Facebook-IBM connection has been baffling―since IBM represents the Establishment, and Facebook the Wild West. However, the thing they have in common at the Patent Office is their lack of disclosure of Leader’s patent in their applications.

Inequitable Conduct

“Inequitable Conduct” is patent legal-speak for fraud. When you file for a patent, you are obligated by law to tell the patent examiner about other inventions, patents, technical journals, etc. that should be considered in deciding whether or not your invention is novel and unique. Failure to disclose material prior art references will usually get your patent invalidated.

Donna Kline, former Bloomberg TV investigative reporter, first reported this story on Mar. 29, 2012 – “Proof Fenwick & West LLP did not disclose Leader as prior art to Facebook.” Kline proved that Palo Alto-based Fenwick & West LLP, Facebook’s attorney (after being Leader’s attorney), did not disclose Leader’s patent in the prior art references for later Facebook patent applications. This was after they did disclose the Leader patent in earlier work for Marc Andreessen, now a Facebook director.

Patent Office Scandal – feed crony venture capitalists with a stream of new ideas from which to steal, then stonewall through regulatory obstruction

Facebook DID NOT disclose Leader’s patent when Fenwick & West LLP clearly knew about it since: (1) they had been Leader’s attorney, and (2) they had already disclosed their knowledge of it in three Andreessen patents in 2005, well before they started representing Facebook at the Patent Office.

Now we discover that three major firms, IBM, Microsoft and Xerox (aka Palo Alto Research Center), also DID NOT disclose Leader’s prior art. Not a single patent already issued to IBM, Microsoft or Xerox by the members of the kangaroo court who were examiners disclosed Leader’s patent in any of their work. See for yourself: Daniel Ryman, Kimberly Jordan, Allen R. MacDonald and Pinchus M. Laufer.

Inequitable Conduct Facts:

At the center of this scandal now are two attorneys/firms that Leader hired in 2002 regarding Leader’s own patents, intellectual property and securities:

• Professor James P. Chandler, Washington, D.C.
• Fenwick & West LLP, Palo Alto, CA

In later years and hundreds if not thousands of patent filings for Facebook, IBM, Microsoft, and Xerox later, not a single one of these filings disclosed Leader’s U.S. Pat. No. 7,139,761 as a prior art reference―even though their lawyers worked on developing the Leader innovations and clearly knew about it. The fact is, even if the current invalidation were to stick (which it cannot given the fraud), they had an equitable conduct obligation to have disclosed it anyway.

What is appearing more evident each day is that Michael McKibben and Leader Technologies trumped the great and mighty IBM, Microsoft and Xerox patent mills regarding the new Internet. It appears that these organizations are now trying to rewrite history to keep from invalidating thousands of their patents that withheld knowledge of the Leader innovations from dozens of patent examiners, judges (and ultimately their bosses—the American people).

The Patent Office proof of this knowledge came from Fenwick’s filings for Marc Andreessen on Feb. 8,  2010.

Inequitable conduct made strange bedfellows among Facebook, IBM, Microsoft and Xerox

Inequitable conduct regarding Leader’s patent is what these companies have in common. Their misconduct is exposed by the very existence of Leader’s patent.

Their solution appears to be to wipe Leader’s patent off the books in the secret Kappos kangaroo court and hope nobody notices.

Avoid impropriety and the appearance of impropriety

Judges and public officials have a well-known ethical rule: avoid impropriety and the appearance of impropriety.

These officials not only abused this rule, they obliterated it.

Breaking News, May 24, 2014

Federal Circuit Chief Judge Resigns Amid More Scandal Involving Actors In Leader v. Facebook

Judge Randall Ray Rader

May 24, 2014—The Legal Times and The Wall Street Journal reported yesterday that Federal Circuit Chief Judge Randall R. Rader resigned as Chief Judge after an email surfaced revealing more impropriety.  In his resignation letter, Rader said “I never expected that email to emerge as it did.” This is a curious statement from a high court judge who took an oath to recuse himself when personal relationships could bias a case. Is this a Freudian way of saying if I hadn't gotten caught, my bias would have been OK? Click here for media coverage of the Rader resignation.

The lawyer and his law firm at the center of this new controversy are well known to those who follow the Leader v. Facebook corruption scandal: Edward R. Reines and Weil Gotshal LLP.

Edward R. Reines & Weil Gotshal appeared in Leader v. Facebook  on Sep. 11, 2012 in an attempt to whitewash judge conflicts in the case, including Facebook stock holdings

Fig. 4—Rader's Email Proves Collusion with Facebook also

Facebook's Thomas G. Hungar, Gibson Dunn LLP, and Edward R. Reines, Weil Gotshal LLP, represented the interests of all the Federal Circuit judges, including Randall R. Rader in 2010. Collusion among Hungar, Reines and Rader is now evident. Click here for the Ass'n for Molecular Pathology v. USPTO case. Click here for analysis of the doctored docket in that case.

New, May 26, 2014

Fig. 5—Edward R. Reine's F.C.B.A. filing in Leader v. Facebook   proves collusion with the court by their silence

Edward R. Reines, Weil Gotshal LLP, represented the interests of all the judges in this Leader v. Facebook filings as well. None of the judges disclosed their conflict with Reines. Click here to read the full filing.

Reines filed a request in Leader v. Facebook to absolve the judges of conflicts of interests following an amicus curiae (friend of the court) motion to compel the judges to disclose their conflicts of interests. Those conflicts included: (1) judge investments in Facebook and the Facebook Cartel, and (2) relationships among the judges with one of Leader’s potential witnesses and former attorney, Professor James P. Chandler, III, Founder and President of The National Intellectual Property Law Institute (NIPLI). Rader was Professor Chandler's law student at George Washington University. Rader was also a Chandler faculty member at NIPLI. Click here to see Reines’ Leader v. Facebook appearance on behalf of the Federal Circuit Bar Association. These filings were never properly docketed by the Clerk of Court, Jan Horbaly, who has also resigned. See coverage about Chandler and the USPTO scandal below.

Rader denied Leader’s petition for rehearing after his three-judge panel railroaded an opinion in favor of Facebook just as the IPO was starting. That panel consisted of Alan D. Lourie, Kimberly A. Moore and Evan J. Wallach. Each of the panel held substantial amounts of stock in Facebook interests, including Facebook, Microsoft, IBM, JPMorgan, Goldman Sachs and Morgan Stanley. See Federal Corruption - Disclosures in the sidebar.

Judge Moore also failed to disclose that Weil Gotshal was her former client

Click here for Kimberly A. Moore Senate Judiciary Confirmation Hearing Testimony, Jun. 28, 2006, p. 79.

Her husband, Matthew J. Moore, went to work for Latham & Watkins LLP, the lobbying law firm for James W. Breyer, Facebook's largest shareholder and former chairman, and for the National Venture Capital Association (NCVA). Breyer was chairman of the NCVA, along with the fund managers for Fidelity, Vanguard and T.Rowe Price, among others, in whom these judges were heavily invested, most tellingly, Fidelity Contrafund, Vanguard Group and T.Rowe Price Group. T.Rowe Price was a 5.2% holder of Facebook stock at the IPO. T.Rowe Price and Baillie Gifford (Vanguard's "Advisor"), were the top two funds behind the "Chinese Facebook" Baidu (China) ADR, which, along with the Russian oligarch-(protégé of Larry Summers) owned VKontakte site, all started at the same time as Facebook, magically. See past post.

Latham & Watkins LLP's former partner, Thomas J.Kim, issued the now infamous S.E.C. 500-shareholder exemption to Facebook that open the floodgates for billions of dollars in dubious funds from Moscow oligarchs to purchase insider shares sold by Goldman Sachs, JPMorgan and Morgan Stanley. The Wall Street Journal article described these relationships as "clubby." That was too kind.

In an evident circling of the Leader v. Facebook corruption wagons, Judge Wallach was assigned to the case from which Rader had recused himself. Out of the frying pan, and into the fire.

These new developments prove that the Leader v. Facebook case was tainted by judicial bias at the highest levels.

Update, May 24, 2014: "Are you comfortable, confident and at ease, or uncomfortable and uneasy, when you think of the future of the Nation in 30 years?"

Consider supporting The Dreyfuss Initiative. http://www.youtube.com/user/dreyfussinitiative

Update, May 16, 2014

[Editorial]: F.C.C.'s net neutrality action unites the Left and Right

Free Speech Pacman.
Graphic: Mashable.

The F.C.C.'s current proposal to let deep-pocket providers pay for superior Internet access is bad for free speech. Don't be fooled by the morality play allegedly pitting some of the players for and others against the proposed changes. That's nothing but window dressing to fool the masses. They all want it.

As we describe below, the America Invents Act (A.I.A.) was another of their crony achievements. All it has done is give excuses for regulators to secretly rewrite rules that their handlers don't like, especially where prior, well-tested regulations used to toss them out on their ears.

Free Speech & Property Destroyers

Fig. 6—Electronic Frontier Foundation video titled "Stop Watching Us: The Video," Published on Oct 23, 2013. StopWatching.us is a coalition of more than 100 public advocacy organizations and companies from across the political spectrum. Join the movement at https://rally.stopwatching.us.

If we allow these predators to create Internet access haves and have nots, it will permit these people to manipulate the underlying gears and pulleys of communications—at the router level. With that level of control, free speech will be destroyed. The F.C.C. is going through the motions, just like the S.E.C. did in granting Facebook the unprecedented exemption from the 500-shareholder rule. Facebook's handlers at Goldman Sachs, Morgan Stanley and JPMorgan used that exemption as the excuse to make a multi-billion private market from Russian oligarchs (FACTS: who were partnered with Goldman in Moscow and who were mentored by Obama's bailout director, Lawrence "Larry" Summers, along with Facebook's COO, Sheryl K. Sandberg) and pump Facebook's pre-IPO valuation to $100 billion. The S.E.C. turned a blind eye (Commissioner Mary L. Schapiro was in on the pump-and-dump scam; in fact, she was more heavily invested in the Facebook Cartel than any other Obama administration official). And, just like Commerce Secretary Rebecca M. Blank was in on the A.I.A. scam. Blank has the second most Facebook Cartel holdings. See sidebar, Federal Corruption, Disclosures.

We cannot allow these criminals to create more excuses at the F.C.C. to sieze control of our democracy. That's not good for the Left or Right. If this happens, the only question will be whether the resulting totalitarian regime will be labelled communist or fascist. Either way, democracy dies.

Fig. 7—Sorta-maybe Patent Cover. In the hands of patent reexamination courts, a patent is a worthless piece of paper. Inventors can win a patent infringement lawsuit, then watch their property rights evaporate in the hands of the lawyers inside the Patent Office who are secretly allied with big infringers. It is time for inventors and those who believe in the U.S. Constitution to unite and stop this corruption.

"Mistrial!"
See Facebook's Mistrial! humor below — The Tale of Xerox's Mr. Swartz. Click here.

* * *

Notices: This post may contain opinion. As with all opinion, it should not be relied upon without independent verification. Think for yourself. Photos used are for educational purposes only and were obtained from public sources. No claims whatsoever are made to any photo.

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