September 2004

Echostar wins appeal: DISH Network found to not infringe patent

Patent, Patent Cases 2004

Irdeto Access v. Echostar (Fed. Cir. 2004).

Irdeto’s patent is directed to a system for controlling the broadcast of digital information signals by using three types of complementary encryption and decryption keys — “service keys,” “group keys,” and “box keys.”  (U.S. Patent No. 4,531,020).  Irdeto sued Echostar, arguing that Echostar’s DISH Network infringed the patent.  On summary judgment, the district court granted summary judgment to Echostar, finding that Echostar’s product did not infringe.  The Appeal revolved around the definition of the term “group.”

Irdeto, in effect, argues is that even after telling the PTO and the public that given the absence of ordinary meaning in the art for the term “group,” the specification sets forth the full intended scope of that term, a patentee can nonetheless later lay claim to a broader, general-usage dictionary meaning of “group” absent explicit narrowing statements in the specification.  This cannot be.  … [W]hile the specification does not contain any statements of explicit disavowal or words of manifest exclusion, it repeatedly, consistently, and exclusively uses “group” to denote fewer than all subscribers, manifesting the patentee’s clear intent to so limit the term.  The specification also contains no affirmative indication that group can consist of all subscribers within the system.  A reasonable competitor reading the patent could only understand “group” to refer to a subset of all subscribers.  The claims must be limited accordingly.

Summary Judgment of Noninfringement Affirmed.

Patent Case: Landmark Decision Strengthens Attorney-Client Privilege

Patent, Patent Cases 2004

In a landmark decision, a panel of eleven Federal Circuit judges has overruled their prior precedent, relieving accused patent infringers of the feared "Quantum Dilemma."

Willful patent infringement brings with it the potential for treble damages (3x), usually resulting in multi-million dollar awards. (35 USC § 284). Prior cases have held that an important factor for determining willfulness is whether the accused infringer obtained an opinion of counsel that presents a strong case for invalidation or noninfringement.

During litigation, presentation of the exculpatory opinion as evidence triggers broad waiver of attorney-client privilege. Under prior precedent, failing to present the opinion conversely leads the court to an inference that either the opinion was not exculpatory or that there was no opinion of counsel.

The modified Hobson’s choice is known as the Quantum Dilemma, based on the case of Quantum v. Tandon.

In their en banc decision written by Judge Newman, the appellate court held that no adverse inference should flow from a party’s refusal to present an exculpatory opinion of counsel.

We now hold that no adverse inference that an opinion of counsel was or would have been unfavorable flows from an alleged infringer’s failure to obtain or produce an exculpatory opinion of counsel. Precedent to the contrary is overruled.

The Case: KNORR-BREMSE v. DANA CORP. (Fed. Cir. 2004) (01-1357) (en banc).

Knorr-Bremse is a German company, but is the owner of a U.S. patent on Disk Brake technology. (U.S. Patent No. 5,927,445). Dana Corporation and other defendants were found liable for infringement. And, based on an inference of an unfavorable counsel, the defendants were found liable for willful infringement. Although no actual damages were awarded, because of the finding of willful infringement the court awarded partial attorney fees under 35 U.S.C. § 285.

During litigation, the defendants told the court that they had consulted European and United States counsel concerning Knorr-Bremse’s patents, but declined to produce any legal opinion or to disclose the advice received, asserting the attorney-client privilege. The district court found that "It is reasonable to conclude that such opinions were unfavorable."

The Decision:

In its decision, the Court answered four questions revolving around willfulness:

In the first question, the Court based its response on the strong historical significance of attorney-client and work-product privileges.

1. When the attorney-client privilege and/or work-product privilege is invoked by a defendant in an infringement suit, is it appropriate for the trier of fact to draw an adverse inference with respect to willful infringement?

The answer is "no." Although the duty to respect the law is undiminished, no adverse inference shall arise from invocation of the attorney-client and/or work product privilege.

In the second question, the Court found that there is no legal duty of a potential infringer to consult with counsel.

2. When the defendant had not obtained legal advice, is it appropriate to draw an adverse inference with respect to willful infringement?

The answer, again, is "no."

Question three revolved around the case at hand.

3. If the court concludes that the law should be changed, and the adverse inference withdrawn as applied to this case, what are the consequences for this case?

As an answer, the Court vacated the willfulness finding and remanded for a redetermination of willfulness in the absence of the inference of a nonexculpatory opinion.

The final question, number four, offered the Court the opportunity to create a clear rule that mounting a substantial defense to infringement should defeat a willfulness finding.

4. Should the existence of a substantial defense to infringement be sufficient to defeat liability for willful infringement even if no legal advice has been secured?

The answer is "no."

The Court concluded that willfulness involves a "totality of the circumstances" and should not be limited to a per se rule.

The Dissent:

Dissenting in part, Judge Dyk argued that enhanced damages for willfulness are punitive damages. Punitive damages are awarded to "punish reprehensible behavior." As such, there is a "substantial question as to whether the due care requirement is consistent with the Supreme Court cases holding that punitive damages can only be awarded in situations where the conduct is reprehensible. … I would recognize that the due care requirement is a relic of the past and eliminate it as a factor in the willfulness and enhancement analysis."

Note: Paul Berghoff and Joshua Rich of McDonnell Boehnen Hulbert & Berghoff took part in an amicus curiae brief submitted by the Intellectual Property Owners Association.

According to Dan Boehnen, also of McDonnell Boehnen, "clients often spend thousands of dollars to obtain window-dressing opinions that are designed solely to defend against a charge of willful infringement. Also, clients sometimes feel compelled to have different law firms handle opinion work versus litigation work. All that artificial conduct is likely to be swept away by the Court’s recent decision."

Cite as Dennis Crouch, Landmark Decision Strengthens Attorney-Client Privilege, Patently-O, September 14, 2004 available at https://patentlyo.com.

Patent Office Appoints Attaché to China

Patent

The U.S. Patent Office is hoping to help China improve its intellectual property laws.  Today, PTO Director Jon Dudas announced the appointment of Mark Cohen as intellectual property attaché to the U.S. Embassy in Beijing, China.  This is the first time that a PTO official has been placed overseas for the purpose of improving intellectual property protection in a specific country. Cohen begins his two-year assignment this week.

In addition to being an IP Attorney, Mr. Cohen is knowledgeable about Chinese language, culture and law.  Cohen, a graduate of Columbia University Law School,  accompanied Under Secretary Dudas on his trip to China this past Spring.  He is also the principal editor of Chinese Intellectual Property Law and Practice (Kluwer Law International, 1999).

The Commerce Department had previously recommended that the USPTO place an official in China to provide support in the fight against IP crime.

Federal Circuit: Injunction to “not infringe the patent” is overly broad.

Patent, Patent Cases 2004

International Rectifier (IR) v. IXYS (Fed. Cir. 2004) (04-1014).

On the day that its patent issued, IR filed a patent infringement suit against IXYS.  IR’s patent relates to semiconductor device (MOSFET) packages having a higher current capacity without increased size. (U.S. Patent No. 6,476,481).  The issue for appeal is “whether the [permanent] injunction granted the patentee is overly broad, and, if so, what is the proper remedy.”

The Federal Circuit rejected the injunction because it was overly broad under Rule 65(d) of the Federal Rules of Civil Procedure. 

In the patent infringement context, this court has rejected as overly broad a permanent injunction that simply prohibits future infringement of a patent. … [T]he trial court’s injunction in this case does not meet the specificity requirements of Rule 65(d).  The injunctive language set forth in the trial court’s judgment prohibits infringement by “any device covered by one or more of Claims 1 through 5” of the ‘481 patent. 

Thus, the Appellate Panel vacated the injunction entered by the trial court and remanded the case with instructions to issue an injunction that meets the specificity requirements of Rule 65(d).

Comment: One interesting dichotomy is that the International Trade Commission (ITC) commonly issues broad injunctions or import restrictions that prohibit unlicensed entry of products that infringe certain patents.  For example, in the recent plastic bag case, the ITC issued a general exclusion order prohibiting the unlicensed entry of plastic grocery bags that infringe patent 5,188,235.

 

Patent Law: Disclosure-Dedication Rule Takes Shape

Patent, Patent Cases 2004

Leaf Blower

Toro v. White Consolidated (WCI) (Fed. Cir. 2004).

The Toro Company sued White for infringement of its patent on a leaf blower. (U.S. Patent No. 4,694,528).  The Minnesota district court granted summary judgment of non-infringement under the doctrine of equivalents — finding that White’s two-piece cover/ring was dedicated to the public in Toro’s patent because it was disclosed, but not claimed. (Citing Johnson & Johnson v. R.E. Service). The Federal Circuit (LINN) agreed, finding that the disclosure of unclaimed subject matter “triggers the disclosure-dedication rule.”

Because J&J had been decided after claim construction in this case, Toro also argued that the issues should be re-examined in light of the new law.  The Appellate Panel Disagreed.

While Toro argues that Johnson & Johnston represents a change of law, its argument is misplaced.  Johnson & Johnston did not alter our precedent as to claim construction, the issue at the crux of this case…. The doctrine of the law of the case is intended to prevent just the kind of speculation and second-guessing invited by the appellant here, in the broader interests of certainty, finality, and legal efficiency. The law is well-settled; decisions once made are not to be disregarded except for exceptional circumstances. Such circumstances are not evident here.

 

< ?xml:namespace prefix ="" o ns ="" "urn:schemas-microsoft-com:office:office" /> 

Football Invention Tests Quarterback Timing

Patent, Patent Cases 2004

Football timer

In re Oister (BPAI 2004).

On appeal to the Board of Patent Appeals and Interferences, the patent applicants argued that their “ball having integrated timers for measuring or counting at least one time period” was novel over the asserted prior art. The Board agreed that the device was patentable because the prior art did not use a predetermined countdown time period.

Sample Claim from the Patent Application:

21. An apparatus comprising:

a ball having a surface and at least one internal cavity;
at least one timer for measuring at least one predetermined time period; and
the timer integrated with the ball.

According to USPTO records, the patent application (10/014,297) is assigned to the Classic Sports Company of Denver.

Patent News Sources

Articles and Publications, Patent

A reader asked about how I find news to post.  Here are some tips and rules that I follow:  

 

1. The primary sources for the Patently-O Blog are judicial opinions released by the Federal Circuit and various district courts.  In addition, I pay attention to rule changes at the Patent Office and legislative changes in Congress.  My policy is to post a review of every appellate opinion directly related to patent law, most rule/legislative changes, and some district court opinions. 

 

2. Secondarily, the world of blogs (or blawgs) provides lots of interesting points of interest.  For example, I read about the recent patent lawsuit against the RIAA on Stephen Nipper’s blog.  I use the online news reader “Bloglines” check for new items from blogs around the world. I have about 35 blogs in my list.  There are millions of blogs, so 35 is quite culled. 

 

There are definitely other blogs that should be on my list, but I just don’t have time to process that much information.  Here are four patent related blogs that I often use as sources. (in no particular order). 

a. The Invent Blog

b. PHOSITA

c. Promote the Progress

d. Anything Under the Sun Made By Man

I also like to read the Blawg Channel and the Anonymous Lawyer.

 

3. I look to the mainstream media to uncover some items more related to the business of patents and patent law.  For example, I read about the patent suit against Major League Baseball on c-Net News.  Generally, I try to add to the story in a meaningful way.  For example, for the MLB case, I downloaded the patent from the USPTO and looked at the claim language and figures.  Then, I contacted the plaintiff’s attorney to get his comments about the case. 

 

Here are my three best news sources:

a. Google News patent search

b. Topix.net Patent/Trademark page

c. Chicago Tribune

Google and Topix are both news aggregators.  They seem to use quite different algorithms for ranking news stories.  Thus, it is unlikely that a scan of the top 10 stories will reveal more than 2 or 3 overlapping repeats.  Apparently, Yahoo News is more popular, but I don’t really like it.

 

4. Other. I get lots of e-mails from readers about various items of interest.  This often spurs me to delve into the story to see whether I can provide some insight.  In addition, I just do what seems interesting to me.  For example, Last year I drove through the hills of western North Carolina and truly enjoyed the scenery and people.  On a whim, I looked for recent patents issued to inventors located in Asheville — and posted a brief article on the topic.

North Carolina Inventor Helps Eliminate Bug Problems

Inventors, Patent

A few months ago, David Nelson of Asheville, North Carolina received a patent on his device for capturing insects.  (U.S. Patent No. 6,651,379).  Essentially, David has created a stack of extra sticky pads — like Post-It® notes on steroids — that can be used to capture flies and other bugs.

Each sheet has a region is coated with a mild compression adhesive material capable of trapping of an insect in response to the physical manipulation by a human being…. For increasing the maneuverability of the device, the device can be attached to an elongated rod such as a fly swatter’s handle.  

Online Patent Searching

Articles and Publications, Patent

In his recent article “Patent and Trademark Searching Via the Web,” Robert Ambrogi provides a concise guide for using the Internet to find both U.S. and international patents and trademarks. Robert’s first stops are the USPTO and the EPO. These sites are free, easy to use, and fairly comprehensive. Several fee-based services, such as Delphion and Micropatent are good second options if a more comperhensive search is required. Finally, Robert mentions the ROSSCO website that provides a matrix of patent search options.

Mr. Ambrogi is a lawyer in Massachusetts and author of The Essential Guide to the Best (and Worst) Legal Sites on the Web. In a recent article, he was kind enough to mention Patently-O, hopefully one of the best.

Out of Left Field: MLB Sued for Patent Infringement

Patent, Patent Cases 2004

Major League Baseball (MLB) is the subject of a new patent infringement lawsuit.  A Texas based patent holding company has sued MLB Advanced Media for infringement of its patents covering “computer simulation” of live events, such as baseball games. (e.g., Patent No. 6,204,862).  The case, filed in Austin, revolves around MLB’s Internet-based products.

The following specific MLBAM products and services are implicated in the lawsuit: (1) Gameday, (2) Condensed Games, (3) Searchable Video (formerly called Custom Cuts), (4) Highlight Reels and (5) Fantasy Player Tracker. (DDB Press Release).

The four asserted patents are members of a single “patent family” and date back to a patent application filed in 1990.  David Barstow, Plaintiff DDB Technologies’ head honcho, is listed as an inventor.

Last year CBS’s SportsLine settled with DDB — licensing its patent portfolio on a non-exclusive basis. (Link).

Tables Turned: RIAA Accused of Patent Infringement

Patent, Patent Cases 2004

RIAA Patent Infringement Lawsuit

Invent Blog: An online music distributor has reportedly sued the Recording Industry Association of America (RIAA) for patent infringement.  The asserted patent claims a method for generating a unique identifier based on content of a datafile, then later using the identifier to track files containing identical content.  (U.S. Patent No. 5,978,791).  The RIAA is accused of using the patented technology to track down peer-to-peer (P2P) copyright violators.

In a suit filed with the Los Angeles District Court, Altnet maintains that the RIAA, Loudeye subsidiary Overpeer and a fellow anti-piracy operation, MediaDefender, have all violated a patent it holds covering the identification of files on a P2P network using digital fingerprint technology. (The Register).

Altnet is a partner with Kazaa, and according to cNet news, “has been trying for several years to persuade record labels and music studios to allow Altnet to sell authorized versions of their products through the Kazaa file-swapping network.” 

The lawsuit was filed in the Southern District of California.

 

NIH proposes open access to experimental results

Articles and Publications, Patent

The National Institutes of Health (NIH) has proposed a program of full public access to clinical results from agency funded research. 

Establishing a comprehensive, searchable electronic resource of NIH-funded research results and providing free access to all, is perhaps the most fundamental way to collect and disseminate this information.

Although lauded by many, it is expected that publication of results would injure the market for journals and other publications.

The NIH is encouraging the public to submit comments to publicaccess@nih.gov.

Link: NIH Public Access

Amazon wins initial battle in patent case.

Patent

Pinpoint v. Amazon. (N.D. Ill. Aug 31, 2004) (Conlon, J.).

Pinpoint has sued Amazon and others for infringement of its patented system for scheduling broadcast and providing access to video programs. (E.g., U.S. Patent No. 5,758,257). Pinpoint claims that Amazon’s website infringes by providing personalized book and music video suggestions.

In an August 31 decision, Judge Conlon of the Northern District of Illinois (E.D.) granted in-part Amazon’s motion for summary judgment — holding that claims 1-7 of one asserted patent to be invalid over several prior art references. However, Conlon’s decision will allow Pinpoint’s other claims, based on two additional patents, to move toward trial.

Amazon is entitled to judgment as a matter of law as to the invalidity of claims 1-7 of U.S. Patent No. 5,754,939. Pinpoint’s claims with respect to U.S. Patent Nos. 5,758,257 and 6,088,722 must proceed to trial.

Trial is scheduled in Chicago for December 6, 2004.

Summary Judgment Decision:Pinpoint v. Amazon (pdf)

Boeing continues to patent

Articles and Publications, Patent

Boeing Assembly Process

Chicago based Boeing recently patented a method of assembling a wing using a pair of wing spars. (U.S. Patent 6,779,272). According to patent office records, the Boeing Company holds thousands of patents on various aerospace technologies. Boeing also has several hundred more patents applications on file at the Patent Office awaiting action.  In 2003, Boeing received 266 issued patents — slightly more than the country of Norway.

USPTO to offer conference for Alexandria based small business contractors

Patent

The USPTO along with the Alexandria Small Business Development Center are offering a workshop entitled “How to Do Business with the USPTO.” The workshop, running from 8:00 – 11:00 a.m. is intended to “educate and guide Alexandria’s small business community about the contract opportunities available at the USPTO by providing information on how the agency acquires its goods and services.”

Wednesday, September 8, 2004
8:00 – 11:00 a.m.
Jefferson Building Conference Room
500 Dulany Street, Alexandria, VA

Link: http://www.uspto.gov/web/offices/com/speeches/04-21.htm

Federal Circuit: National Instruments v. MathWorks

Patent, Patent Cases 2004

National Instruments v. MathWorks (Fed. Cir. 2004) (03-1540) (unpublished opinion).

National Instruments (NI) sued MathWorks overs for infringement of its patented method of creating data flow diagrams.  The jury sided with NI and the district court denied Mathworks’ subsequent motion for JMOL.

On appeal, MathWorks raised several issues and argued that the permanent injunction issued by the district court went impermissibly beyond the jury’s findings.  Specifically, MathWorks argued that its Simulink software had many non-infringing use and that a product based injunction was unduly broad.  However, the Appellate Panel, reviewing for an abuse of discretion, affirmed — holding that the trial court was sufficiently cognizant of MathWorks arguments in its decision.

MathWorks VP Richard Rovner outlined their position going forward:

First, The MathWorks will abide by the decision of the court and will make modifications to the Simulink product.

Second, the decision affirms that customers can continue to use previously purchased Simulink products and that The MathWorks can continue to provide technical support for these products.

Third, The MathWorks remains fully committed to the Simulink product family and, consistent with the court’s decision, will continue to support and enhance it.

National Instruments Press Release
MathWorks Press Release

Monsanto wins patent infringement appeal over Tennessee farmer

Patent, Patent Cases 2004

 Monsanto v. Ralph (Fed. Cir. 2004) (03-1243).

Mr. Ralph appealed from a Missouri court judgment imposing sanctions for discovery abuses, violation of court orders, repeated attempts to conceal misconduct and a three million dollar damage award for patent infringement and an alternative award of liquidated damages for breach of contract.

This case falls in line with the recent McFarling opinion involving Monsanto’s Roundup-Ready seeds.  Mr. Ralph owns a Tennessee farm.  He purchased Roundup-Ready seeds and then reportedly saved seeds from the F1 generation — a violation of the patent and the licensing agreement.  During discover, Ralph burned some seed stockpiles — apparently to avoid discovery.

The Federal Circuit agreed with Monsanto that the district court properly applied sanctions for discovery abuses and properly calculated a reasonable royalty. However, the Appellate Panel did find that Monsanto’s “one-size-fits-all” 120 multiplier for breach of contract failed to distinguish between various modes of breach — and thus was not enforceable.

Conclusion

Although we have determined that the contract-based damages are excessive in light of our recent decision in McFarling, the trial court did not abuse its discretion in its choice of sanction or its denial of Ralph’s post-judgment motion, and Ralph has not shown that the jury award for patent infringement is “grossly excessive or monstrous,” clearly not supported by the evidence, or based only on speculation or guesswork.  Accordingly, the decision of the district court is

CAFC refuses to examine Request for Comments (RFCs) when defining ordinary meaning of claim terms

Patent, Patent Cases 2004

ACTV

Many Internet standards are initially developed in papers known as Requests for Comments (RFCs). A purpose of an RFC is to collect propose a common language for facilitating development and to collect commentary. Often, however, the RFCs become the authoratitive document describing a particular function. For example, RFC-1738 was created by Berners-Lee in 1994 and is thought of as an authoritative, unbiased source relating to the meaning of the term “URL.” The Federal Circuit, however, has refused to allow RFCs to take an authoritative position in claim construction. ACTV v. Disney, 346 F.3d 1082 (Fed. Cir. 2003). In ACTV, the Appellate Court differentiated RFC documents that attempt to shape meaning of terms from dictionaries that reflect established usage.