January 2006

EBay v. MercExchange: Stay of Injunction Pending Appeal

A friend of mine who is also a senior patent counsel at a major technology corporation passed along his thoughts on the eBay appeal in an anonymous article entitled eBay v. MercExchange: Are YOUR Interests Represented?

The article, published here on Patently-O, raises a particular issue—that of stays pending appeal.  The article argues, inter alia, that the relatively short CAFC docket (~1 year) coupled with the high reversal rate indicate that injunctions should generally be stayed pending appeal.

This approach takes the high middle ground — allowing for injunctions on a regular basis, but not forcing settlement based on district court holdings that would potentially be vacated on appeal.

Notes:

  • Cite the article as: Note, eBay v. MercExchange: Are YOUR Interests Represented?, Patently-O, January 31, 2006 at http://www.patentlyo.com.
  • The article can be linked directly at: http://patentlyo.com/patent/eBay_20Article.pdf
  • Comments on the article should be directed to me.

Review: EBay v. MercExchange Amici Briefs

eBay v. MercExchange (Supreme Court 2006).

This year, the Supreme Court will determine whether a patentee should have a right to an injunction once infringement is found.  This issue is fundamentally important to the practice, and a number of amici have filed briefs. (briefs in support of MercExchange will be filed later this spring). 

The following is a review of the briefs received thus far.  Copies of the briefs are available for download at the bottom of this post.[*]

Yahoo!’s Brief

Yahoo!, with the support of professor Robert Merges takes issue with patent trolls, and their propensity to ambush and cause harm.  According to the brief, patent trolls are “entities whose primary purpose is to prey on innovators who actually produce societally valuable products.”

Yahoo!’s solution is that the “availability of injunctions should turn largely on whether the patentee engages in research and development and should discourage entities whose sole business is patent litigation.”

Electronic Frontier Foundation Brief

EFF thinks about free speech and argues that “automatic injunctions” pushes against our first amendment protections. EFF cites the importance of blogging and the potential of patent owners to claim control over internet publishing mechanisms.

AIPLA & FCBA Joint Brief

AIPLA is nominally in support of neither party, but is in fact in support of MercExchange.  AIPLA argues that the CAFC’s “general rule” of issuing injunctions after a finding of liability is correct because the harm caused by continued infringement is “inherently irreparable.” The brief also argues that, in this case, the CAFC is not guilty of expanding the power of patents.  Rather, the general rule of issuing injunctions has long been a part of patent practice and is consistent with the analysis in other areas of law such as trademarks.

Fifty-Two Law Professors Brief

Professor Lemley along with fifty-one other professors filed their brief in support of eBay. Notably, the professors attempt to make a distinction between a district court’s refusal to grant an injunction and a compulsory licensing scheme.

Interestingly, professors are clear that courts should be given discretion to deny injunctive relief, but that such discretion should not be used regularly or even often.  This implies that the professors are at least in favor of a presumption that an injunction will issue.

Brief of Professors Pollack & Reynolds

Another set of law professors and legal scholars (Including Instapundit) argue that the Constitution supports a “presumption that injunctions are unwarranted for patent holders who are neither practicing their infringed inventions nor making good-faith efforts to prepare to practice their inventions.”

Teva’s Brief

Teva, primarily a generic drug manufacturer, filed its brief arguing that (1) district court’s should have discretion and (2) the public interest should be represented in any injunction decision.

Computer & Communications Industry Association (CCIA) Brief

CCIA argues that the CAFC continues to make patents stronger while the PTO continues to weaken patent quality. This combination, according to the advocacy group, encourages litigation and impedes innovation.

Bar Assn. of the District of Columbia’s Brief

The district court questioned the “unsettled political nature” of business method patents. In its brief, the BADC questions whether politics or draft legislation can be considered when determining an injunction.

IBM’s Brief

 IBM argues that Section 283’s permissive language (“may”) requires that courts examine equitable principles before issuing an injunction.  Furthermore, the patent leader argues that the Supreme Court’s Continental Bag precedent also requires examination of the equitable principles.

Franklin Pierce Law Professors Brief

The law professors, led by Thomas Field, argue that the right to injunction should be strong and not variable according to patentee’s use of the patent. “The trial court accepted arguments analogous, given the apparent economic disparity between the parties, to ones Goliath might have made in asking that David be disarmed.”

Brief of Intel, Microsoft, Oracle, and Micron

The four technology giants have joined together in an “Innovator’s Alliance” and filed a brief in support of eBay’s position. The brief reviews some historical aspects of patent law and argue that the Founding Fathers would not have approved of automatic injunctions for patent infringement.

Brief of the Securities Industry

Several securities industry groups joined together to file a brief in support of eBay. The brief discusses their worries that a patent infringement lawsuit could hamper the reliability of financial markets

Brief of Research-In-Motion

RIM argues that the patent enforcement system must promote the useful arts

Nokia’s Brief

Nokia follows a similar vein as the EFF, but argues that interoperability of networks and systems is extremely important, and patents on de facto standards should not be granted injunctions.

Brief of the Bar of the City of New York

The NY Lawyers argue that injunctions should not be the general rule. Rather, courts should consider a broad range of factors that may sway the decision of whether to grant an injunction. These include irreparable harm; whether infringing activity was lawfully initiated (e.g., prior to issuance of the patent); whether patentee delayed in asserting a claim; whether there is a disputed question of law (e.g., claim construction); harm of an injunction to the infringer compared to benefit of the injunction for to patentee; extent of harm to third-parties.

Files (thus far):

 * cite as Dennis Crouch, Review: EBay v. MercExchange Amici Briefs, Patently-O, January 30, 2006, at http://www.patentlyo.com.

 

Patent Examiners Should Interpret Claims In Light of Specification

In re Johnston (Fed. Cir. 2006)

Although the CAFC affirmed the B.P.A.I’s use of a dictionary in defining the patent applicant’s claim terms, the court did so only because the patent specification did not otherwise provide any limits the terms.  The court thus indicated that the PTO should apply the principles of Phillips v. AWH during prosecution — rather than the PTO’s current practice of giving claims their “broadest reasonable interpretation.”

In addition, the court provided an excellent review of its string of precedents concerning the standard for combining references in an obviousness rejection:

Karsten Mfg. Corp. v. Cleveland Golf Co., 242 F.3d 1376, 1385 (Fed. Cir. 2001) (“In holding an invention obvious in view of a combination of references, there must be some suggestion, motivation, or teaching in the prior art that would have led a person of ordinary skill in the art to select the references and combine them in the way that would produce the claimed invention.”);

In re Dance, 160 F.3d 1339, 1343 (Fed. Cir. 1998) (“When the references are in the same field as that of the applicant’s invention, knowledge thereof is presumed. However, the test of whether it would have been obvious to select specific teachings and combine them as did the applicant must still be met by identification of some suggestion, teaching, or motivation in the prior art, arising from what the prior art would have taught a person of ordinary skill in the field of the invention.”);

In re Fine, 837 F.2d 1071, 1075 (Fed. Cir. 1988) (there must be “some objective teaching in the prior art or that knowledge generally available to one of ordinary skill in the art would lead that individual to combine the relevant teachings of the references”);

Interconnect Planning Corp. v. Feil, 774 F.2d 1132, 1143 (Fed. Cri. 1985) (“When prior art references require selective combination by the court to render obvious a subsequent invention, there must be some reason for the combination other than the hindsight gleaned from the invention itself.”).

Be aware that this particular issue is being considered by the Supreme Court in KSR v. Teleflex.  This decision solidifies the CAFC’s position and increases the odds that KSR will be taken-up on certiorari.  As noted by Professor Wegner, the Johnston panel “says nothing about the Anderson’s-Black Rock or Sakraida Supreme Court standard of patentability” that is the subject of the KSR case.

 * Cite as Dennis Crouch, Patent Examiners Should Interpret Claims In Light of Specification, Patently-O, January 30, 2006 at http://www.patentlyo.com.

Patently-O Tidbits

In The News: Patently-O has been in The Wall Street Journal three times in the past two weeks:

  • Will Stent Makers Fight Dentist’s Patent Tooth and Nail?; The Wall Street Journal; Jan 26, 2006; A.1.
  • In Patent Disputes, A Scramble to Prove Ideas Are Old Hat, Anne Marie Squeo and Elena Cherney; The Wall Street Journal; Jan 25, 2006; A.1.
  • BlackBerry Gambles Patent Office Will Be On Its Side in Court, Anne Marie Squeo and Elena Cherney; The Wall Street Journal; Jan 17, 2006; B.1.
  • We also picked up some coverage from the WSJ’s new law blog by journalist/lawyer Peter Lattman. [Link].

NTP v. RIM:

  • Interesting background story from the Globe and Mail. [Link] [via PHOSITA].

Patent Law Jury Instructions

  • AIPLA has drafted an updated set of model jury instructions. [Link] [via I/P Updates]

 

eBay Questions “Nearly-Automatic” Availability of Patent Injunctions

MercExchangePatent_small1eBay v. MercExchange (Supreme Court 2006).

Like any patentee, Tom Woolston wants the exclusive rights to his invention as spelled out in the Patent Act.

Every patent shall contain . . . a grant . . . of the right to exclude others from making, using, offering for sale, or selling the invention . . . (35 U.S.C. 154).

A jury found that his patent was valid and infringed, but the court refused to enter an injunction to stop the infringement.  Woolston’s patent relates to computerized auction technology, and the defendant here is auction giant eBay.

On appeal, a panel of three judges at the Court of Appeals for the Federal Circuit reversed the lower court, finding that absent exceptional circumstances, a district court should issue a permanent injunction after a finding of infringement.

Many of the biggest names in technology as well as academia have taken issue with the CAFC’s holding and argue that the court’s “nearly automatic” injunction provisions violate both traditional notions of equitable relief as well as Section 283 of the patent act.

In what could easily be the most important patent case in the past five years, the Supreme Court will hear eBay’s arguments on March 29, 2006. Injunctions form the bedrock of traditional patent law, and changes in this area will send waves through virtually every technology-centered business.

In its brief on the merits, eBay argues that, like any equitable relief, courts should apply the traditional four-factor test that includes consideration of (i) irreparable harm from not issuing an injunction; (ii) whether an adequate remedy exists in law (damages); (iii) whether the injunction would be in the public interest; and (iv) whether a balance of hardships would tip in the plaintiff’s favor.

EBay also takes the stance that the field of technology covered by the patent should effect the likelihood of an injunction.  Here, because MercExchange’s patent is related to a business method — a less favored technology.  In addition, eBay presents other questions of patent quality and cites the largely questioned assertion that 97% of patents are approved.

Section 283 of the Patent Act supports eBay’s position by providing that a court “may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.”  This statute, according to eBay requires the courts to judge the equities before issuing such an injunction.

File Attachment: EBay Brief On The Merits.pdf (178 KB)

Indefinite Claims: Lack of Antecedent Basis Alone Does Not Render Claims Indefinite

MercuryFreebatteryEnergizer Holdings v. ITC (Fed. Cir. 2006).

Energizer brought suit through the ITC under 19 USC 1337 to stop importation of what what it considered infringing devices. Energizer’s patent relates to batteries that are virtually mercury free.  The ITC held that Energizer’s patent was invalid under 35 USC 112 because a claim term, “said zinc anode,” lacked antecedent basis.

On appeal, the CAFC found clear error and reversed.  In its decision, the CAFC refused to follow any strict “rules” of claim drafting.  Rather, the court found that a claim will not be indefinite unless the scope is not “reasonably ascertainable by those skilled in the art.”

Reliable Documention Required To Show Costs

Summit Technology v. Nidek (Fed. Cir. 2006).

Nidek won at trial, was awarded costs, and initially requested almost $500k under 28 U.S.C. § 1920.  After an initial appeal of the exact costs, the district court awarded Nidek $388k. On appeal, the CAFC further reduced the award to $173k after finding that Nidek had failed to provide reliable documentation of its costs.

Cost awards are bound by the constraints of section 1920, and, when challenged, a prevailing party must offer some reliable documentation or other proof that its bill of costs represents the allowable costs that it actually and necessarily incurred during the litigation.

Although the CAFC agreed that Nidek’s costs might be reasonable based on the complexity of the lawsuit, reasonable estimates could not substitute for the required proof.

CAFC affirms willfulness and damage award despite multiple opinions of counsel.

TrocarApplied Medical Resources Corp. v. United States Surgical Corp. (Fed. Cir. 2006).

By Gautham Bodepudi

Facts and History:

U.S. Surgical appealed the decision of the district court for the Central District of California, granting judgment of the willful infringement of U.S. Patent 5,385,553 to Applied Medical, and awarding damages, enhanced damages, attorney fees, and prejudgment interest totaling $64.5 million.

Applied Medical’s ‘553 patent relates to surgical devices called trocars. Trocars are used as access ports into the abdomen during laparoscopic surgery.

Applied first sued U.S. Surgical for their use of the Versaport trocar in the United States District Court for the Eastern District of Virginia (‘Applied I’), and the jury found that U.S. Surgical willfully infringed claims 4 and 18 of the ‘553 patent. The district court permanently enjoined U.S. Surgical, and awarded damages in the form of a 7% reasonable royalty rate.

During the Applied I litigation, U.S. Surgical began redesigning its Versaport trocar, completed its redesign shortly after the Applied I verdict, and began selling the redesigned Versaport (‘Versaport II’) shortly thereafter.

Two years later, Applied Medical filed a second infringement suit (Applied II) against U.S. surgical for their use of Versaport II, and the district court held that Versaport II infringed claim 3 of the ‘553 patent, and entered a permanent injunction against them.

In a separate trial for damages, U.S. Surgical tried to establish that the reasonable royalty for infringing sales of Versaport II was 7%, as established in Applied I and is binding under the principles of collateral estoppel. In addition, U.S. Surgical moved for judgment as a matter of law to establish that their infringement was not willful due to U.S. Surgical’s due care and good faith in designing around the ‘553 patent. Lastly, U.S. Surgical sought preclude evidence relating to the jury’s finding of willfulness in Applied I. However, the judge denied all three motions, and U.S. Surgical appealed.

Issues and Rulings:

I. Is the reasonable royalty rate established in Applied I binding in Applied II under the principles collateral estoppel?

The Court held that collateral estoppel should not be given effect in Applied II because the necessary reasonable royalty determination in Applied II is not identical to that decided in Applied I.

In laying the groundwork, the Court noted that reasonable royalty calculations are employed when actual damages cannot be adequately proved, and that when using such a calculation, the court may determine a reasonable royalty based on hypothetical negotiations between a willing licensor and willing licensee.

However, a reasonable royalty determination for purposes of making an evaluation for damages must relate to the time infringement occurred. The Court stated that the reasonable royalty damage calculation in Applied II is not identical to the issue of reasonable royalty damages in Applied I because the infringements requiring compensation began at separate and distinct times. The infringement in Applied II was caused by sales of Versaport II, which began in 1997, whereas the infringement in Applied I was caused by sales of Versaport I, which began in 1994. There were thus two separate infringements, and each commenced on a different date.

Thus, the Court reasoned, the reasonable royalties of the two different infringements, beginning at two different times, may be different from one another, and therefore the district court was correct in not applying collateral estoppel to the issue of reasonable royalty determination.

II. Was their substantial evidence to support the jury’s verdict that U.S. Surgical’s infringement was willful, despite U.S. Surgical’s good faith and due care to design around the ‘533 patent?

Despite U.S. Surgical arguments that it engaged in an intense and deliberate program to design around the ‘553 patent, regularly consulted with its in-house counsel during the redesign process, requested the advice of outside law firms, and avoided making a single sale until after U.S. Surgical received a written second opinion from a patent attorney from another firm, the Court still held that substantial evidence supports the jury’s verdict of willful infringement.

Notably, the Court held that a jury could reasonably infer that U.S. Surgical desperately needed a universal seal trocar to remain competitive in the surgical business, that U.S. Surgical’s management did not properly oversee or adequately participate in the development of Versaport II, and that U.S. Surgical’s management placed intense time pressure on their engineers to create a new product. Specifically, the Court noted that of the three opinions of counsel relied upon by U.S. Surgical, one did not even address the issue of infringement, and another letter arrived after U.S. Surgical began selling Versaport II. In addition, U.S. Surgical’s General Counsel admitted that U.S. Surgical wanted “no gap” in the supply of Versaport trocars once the Applied I injunction took effect. Based on this evidence, the Court concluded that a jury could have reasonably determined that U.S. Surgical paid little if any attention to the opinion letters, and that they would have proceeded to manufacture Versaport II despite outside legal opinions to the contrary.

Therefore, the district court did not err in denying U.S. Surgical’s motion for judgment as a matter of law as to whether U.S Surgical’s infringement was willful.

III. Did the district court abuse its discretion in allowing Applied to introduce evidence regarding the Applied I litigation, including the jury’s finding that U.S. Surgical’s infringement was willful?

The Court held that district did not abuse its discretion because the Applied I litigation was relevant to U.S. Surgical’s state of mind with respect to willfulness. Specifically, the Court reasoned that the Applied I litigation was relevant to the reasonable royalty analysis because the hypothetical negotiation in 1997 took place on the heels of the Applied I jury verdict. In addition, the jury’s determination of willfulness in Applied I is relevant because U.S. Surgical’s in-house counsel testified that U.S. Surgical initiated the design of Versaport II because Applied had commenced the Applied I litigation. Furthermore, the Court noted that U.S. Surgical admitted that the Applied I verdict caused U.S. Surgical to redouble its efforts to avoid willful infringement.

Thus, because the Applied I litigation was relevant to U.S. Surgical’s state of mind, and because U.S. Surgical could not show that the probative value of this evidence was outweighed by the danger of unfair prejudice, the Court held that the district court did not abuse its discretion in allowing the evidence to be introduced.

Gautham Bodepudi received a B.S. in electrical engineering from the University of Illinois and a J.D. from the University of Chicago School of Law. He is an associate in MBHB’s Chicago office. Contact Gau.

NTP v. RIM: BlackBerry Injunction Proceedings

On January 17, Research-and-Motion and NTP simultaneously filed opening briefs arguing opposite sides of the injunction issue.  For its part, RIM gives a litany of reasons why the CAFC’s August 2005 decision should not result in an injunction:

  • A new trial is required on damages because the jury had improperly found that RIM infringed 7 of the 16 asserted claims.
  • The willfulness award should be set aside based on the CAFC’s decision and the intervening decision in Knorr-Bremse.
  • RIM’s products introduced since trial are “either non-infringing or contain many substantial non-infringing features.”
  • An implied license exists permitting RIM to continue providing services to customers of the handheld devices for which damages are awarded.
  • The “exceptional public interest in continued and uninterrupted availability of RIM’s BlackBerry system” and “the fact that NTP can be more than adequately compensated by royalty payments” indicate that a permanent injunction should not be issued.

According to RIM, all these factors should be considered in the backdrop of the fact that the PTO “will fully and finally reject all patent claims at issue in this case in a matter of weeks.”

On the other hand, NTP has argued that the scope and severity of RIM’s infringing conduct “is not affected by the CAFC’s modification of the total number of claims infringed.”  As such, NTP requests its damages (increased because of RIM’s increased sales) and an injunction.

Reply briefs are due on February 1, 2006.

Supreme Court: Failure to Renew Post-Trial Motion Eliminates Possibility of Appeal

Unitherm Food Systems, Inc. v. Swift-Eckrich, Inc, —– U.S. —– (2006).

By Joshua Rich

The Supreme Court, in Unitherm Food Systems, Inc. v. Swift-Eckrich, Inc., continued its trend of requiring strict compliance with procedural litigation rules. The case arose out of Swift-Eckrich (which does business as ConAgra) sending out cease and desist letters that indicated that it intended to “aggressively protect all of [its] rights under” one of its patents. A recipient of the letter investigated the charge and determined that Unitherm, who was supplying the allegedly infringing process, had invented the patented process years before ConAgra had filed its patent application. Upon learning this, Unitherm sued ConAgra for a Walker Process antitrust violation, alleging that ConAgra had attempted to enforce a patent that was obtained through fraud on the Patent and Trademark Office.

The Supreme Court’s decision arose out of ConAgra’s motion practice at trial. Before the case was submitted to the jury, ConAgra moved for a directed verdict under Rule 50 of the Federal Rules of Civil Procedure, alleging that the evidence was insufficient to support a jury verdict against it. The judge denied the motion and the jury returned a verdict against ConAgra. After the jury verdict, ConAgra then neither renewed its Rule 50 motion to seek judgment as a matter of law nor filed a motion for new trial based on insufficiency of the evidence under Rule 59. On appeal, the question arose whether ConAgra could raise sufficiency of the evidence in light of its failure to renew the Rule 50 motion. The Federal Circuit found that it could (and reversed the jury verdict); the Supreme Court found that it could not.

Unquestionably, a district court cannot reverse a jury’s verdict in the absence of the renewal of a motion for directed verdict; the Supreme Court found that appellate courts similarly have no power to reverse the jury’s weighing of the evidence absent post-trial motions. Relying on three cases decided soon after World War II, the Court found that appellate courts do not have the power to apply the rules flexibly and consider the sufficiency of the evidence in the absence of a post-verdict motion. While some of the circuit courts had read some flexibility into Rule 50, the Court indicated that no flexibility was appropriate – without renewal of the Rule 50 motion, an appellate court cannot consider the sufficiency of the evidence.

While not specific to IP cases, the Unitherm case is important for IP cases because it forces the hand of litigators in such cases. Often, given page limitations and circumstances of trial, parties in IP cases are forced to choose which arguments to present to the trial court and which to drop. Now, it is clear that any arguments dropped from post-verdict motions will be off limits before the appellate courts. As a result of the Court’s decision, any party that thinks that there may be some chance it will want to raise sufficiency of the evidence on appeal will have to reserve space in its briefing papers to raise the argument. Similarly, trial counsel must pay special attention in the swirl of events after trial, as any deficiency in the post-trial briefing could drastically narrow the matters the appellate court can consider.

Note: Joshua Rich is a partner at MBHB LLP in Chicago where he litigates intellectual property cases. Mr. Rich has a background in biochemistry.  However, he has handled patent cases in a variety of technology areas as well as trademark, copyright, trade secret, and contract issues.

Supreme Court Denies RIM’s BlackBerry Appeal

ImagefromWSJThe Supreme Court today refused to hear RIM’s BlackBerry appeal — another in a series of setbacks in RIM’s patent defense. The Court’s refusal to grant certiorari means that this case will quickly come to a head at the district court level. A hearing is now expected within the next few weeks to determine the scope of any eventual injunction that may be issued.

On a broader scale, the Federal Circuit’s decision opened the gate for patentees to assert their patents against “transnational” systems. In RIM’s case, the appellate court held that NTP’s patent’s could be infringed even though the BlackBerry maker’s routers and servers were located in Canada.

Link:

Patent Mediation — Patently-O Book Review

MGSPatentMed2

Patent Mediation

Edited by Kathleen M. Scanlon and Helena Tavares Erickson
Published by International Institute for Conflict Prevention & Resolution (CPR)

38 pages; $50 from CPR [Link].

Wow.  This is a great introduction to mediation in the patent world.  I am a big believer in mediation for patent cases, especially when the amount of damages is less than $10 million.  The book presents a five-step approach to mediation:

  1. Deciding whether and when to mediate;
  2. Selecting a mediator;
  3. Pre-mediation planning;
  4. Mediation sessions; and
  5. Mediation outcome.

The book tip-toes lightly through each step and evaluates the potential decisions and their trade-offs.

You may be thinking $50 for 38 pages????  But didn’t you just send out a $11,000 check for drafting of a 20 page application that probably includes typos? Apparently, if you join CPR, you will receive a 40% discount.

PTO To Hold Town-Hall Meeting on Proposed Changes to Examination Practice

The USPTO has announced a town-hall meeting to be held February 1, 2006, in Chicago, IL (at Northwestern Law School).  The meeting will provide an opportunity to provide feedback on the PTO’s proposed changes to (1) limit the examination of claims dependent, and (2) stop allowing continuing applications, CIP’s, or , RCE’s except under limited circumstances. [Link: Sweeping Changes] According to the PTO:

The changes will make the patent examination process more effective and efficient by reducing the amount of rework by the USPTO and the time it takes for the patent review process. In addition they will improve the quality of issued patents and ensure that the USPTO continues to promote innovation.

Commissioner for Patents John Doll and PTO General Counsel James Toupin will provide an overview of the challenges the USPTO faces and the reasons why the proposed new rules are necessary. A question and answer session will follow immediately after their presentations.

Registration:

Inventorship: Student Denied Co-Inventorship Opportunity

GlaucomaStern v. Columbia University (Fed. Cir. 2006).

The district court found that Stern should not be added as a co-inventor on Columbia’s patent directed toward the use of prostaglandins to treat glaucoma.

Stern, a medical student at the time of the invention conducted a number of experiments for Lazlo Bito (the named inventor). Stern’s experiments showed that a single topical application of prostaglandin reduced intraocular pressure in monkeys and cats, but did not prove whether that would prevent glaucoma.  Bito later conducted further experiments and filed the application that led to the patent in question.

The district court found that the patent was directed at multiple doses of prostaglandin, and thus, that there was not any clear and convincing evidence that Stern had invented the invention as claimed.  On appeal, the CAFC reviewed the summary judgment decision de novo.

Based on Stern’s experiments and Bito’s prior publications, the appellate panel agreed that “Stern did not have an understanding of the claimed invention, did not discover that prostaglandins have an effect on IOP, did not discover that repetitive application of prostaglandins to the eyes of primates can maintain reduced IOP, and did not conceive of the idea of the use of prostaglandins to reduce IOP in primates. Furthermore, there was no collaboration between Stern and Bito in developing a glaucoma treatment. Stern simply carried out an experiment previously done by Bito on different animals—animals that Bito had already determined would be good models for prostaglandins research. Stern’s contribution is insufficient to support a claim of co-inventorship.”

The court went on to hold that “unwitnessed laboratory notebooks on their own” are insufficient to support a claim of co-inventorship. In this case, the notebooks had been allegedly destroyed by Professor Bito.

Affirmed

Read the case: [LINK]

 

 

RIM v. NTP (Injunction Hearings).

ImagefromWSJRIM v. NTP (Injunction Hearings).

Briefs for both sides are due January 17 regarding injunction and damages in the ongoing dispute over RIM’s BlackBerry technology.  Responses will be due February 1. Today’s WSJ has an interesting article with a nice time-line of the saga. [Link].

WSJ Blog:

The Wall Street Journal has also picked up the blogging bug. Peter Lattman is lead writer for the WSJ Law Blog. [Link] Of late, Peter has jumped into a number of patent issues including:

  • [Link] Big Pharma Settling Generic Suits
  • [Link] Report on Phillips v. AWH at the Supreme Court
  • [Link] Discussion of RIM v. NTP

Standing: Patentee Retains Standing When Assignment of Rights is Only for Limited Term

AspexAspex Eyewear v. Miracle Optics (Fed. Cir. 2006).

The district court dismissed Aspex’s action against Miracle on the ground that neither Aspex nor co-plaintiff Contour Optik had standing to sue for infringement of Patent No. 6,109,747.  Prior to initiating the infringement suit, Contour had transferred some rights to a licensee, Chic Optic.  The question presented on appeal was whether the transfer of rights was (1) merely a license to the patent or (2) a transfer of all substantial ownership rights.  If the transfer was merely a license, then the patentee, Counter, would retain the right to sue an infringer.  However, if the transfer was for all substantial ownership rights, then the patentee would no longer have rights in enforcing the patent.

Under the agreement Chic was granted (1) the exclusive right to make, use, and sell in the United States products covered by the patent, (2) the first right to commence legal action against third parties for infringement of the patent and the right to retain any award of damages from actions initiated by Chic, and (3) a virtually unfettered right to sub-license all of its rights to a third party. However, under the agreement all of Chic’s rights ended as of March 2006, when the rights reverted to Contour.  Contour also retained the right to commence infringement actions against third parties if Chic refused to do so.

On appeal, the Federal Circuit reviewed the question of standing de novo.  “[A]t bottom, the question [of standing] is ‘who owns the patent’?”  Here, the appellate court determined that, because the agreement had a term that was shorter than the life of the patent, that the licensee “never had all substantial rights to the patent, i.e., it never was the effective owner of the patent.”

The ’747 patent was never assigned; it was exclusively licensed for only a fixed period of years, which does not meet the all substantial rights standard. Thus, we hold that the Contour/Chic agreement was a license, not an assignment, and Contour was the owner of the patent when the complaint was filed and entitled to sue.

Dismissal vacated and remanded.

 

 

Phillips v. AWH: Certiorari Briefing Complete

Phillips v. AWHPhillips v. AWH (on petition for certiorari)

Last week, Phillips posted its opposition to AWH’s petition for certiorari in this landmark case focused on the question of whether patent claim construction should be reviewed de novo on appeal. [Link].

In “short and pithy” paper, AWH has now filed its reply with, inter alia, these points:

  1. On three separate occasions, an en banc CAFC has ruled that claim construction is reviewed de novo. That issue is ripe for review.
  2. This is an extremely important issue — one that garnered 23 amici briefs at the CAFC level.  “The United States Patent and Trademark Office itself filed an amicus brief urging the Federal Circuit to apply some form of deferential review.”

The briefs may be circulated as early as next Tuesday.

Documents:

PTO extends pre-appeal brief conference pilot program

The PTO’s pilot pre-appeal brief conference program was set to end its six month run today.  Citing the program’s positive potential, the PTO has extended the program “until further notice.”

Although the program certainly has some problems, it has received positive reviews from both applicants and examiners. In all likelihood, in 2006 the pilot program will transition into a permanent one.

CAFC Refuses to Hear Case Export of Patented Processes

Union Carbide v. Shell Oil (Fed. Cir. 2006)

The CAFC has again decided that it is not ready to sort-out questions of extraterritorial application of the U.S. patent laws.  Here, the appellate body has rejected Shell’s bid for a rehearing en banc.

Dissenting from the opinion, Judges Lourie, Linn and Chief Judge Michel argued that the court should reconsider whether Section 271(f) of the Patent Act applied to process inventions.

Links