May 2004

Jacobs v. Nintendo

Jacobs v. Nintendo of America, Inc. (Fed. Cir. May 28, 2004).

Jacobs owns a patent on a tilt sensitive controller. (U.S. Patent No. 5,059,958). In a prior suit over the same technology, Jacobs settled with Analog. Under the terms of the settlement agreement, Analog was given a full license to practice the patented technology.

In the present case, Jacobs sued Nintendo, asserting that Nintendo’s “Kirby Tilt ‘n Tumble” for Game Boy. Nintendo responded, and the lower court agreed, that Nintendo’s actions fell under the settlement agreement, since the accelerometers for the game were purchased from Analog.

On appeal, the Federal Circuit (J. Bryson) affirmed the lower court’s dismissal on summary judgment.

We agree with the district court that the clause granting Analog the right to sell its accelerometers for use in tilt-sensitive control boxes barred Jacobs from interfering with that right by prohibiting Analog’s customers from using the accelerometers for that authorized purpose by making, using, and selling control boxes incorporating Analog’s devices. That interpretation is in accordance with the basic contract law principle that a party may not assign a right, receive consideration for it, and then take steps that would render the right commercially worthless.

Additionally, the Appellate Panel held that the “noninfringing use” doctrine did not apply.

The “noninfringing use” doctrine applies when a patentee or its licensee sells an article and the question is whether the sale carries with it a license to engage in conduct that would infringe the patent owner’s rights. In that setting, absent an express agreement between the parties, determining whether the sale conveys with it the implied right to use the article in an infringing manner may depend on whether there is any noninfringing use for the article. If there is no noninfringing use, it may be reasonable to infer that there has been “a relinquishment of the patent monopoly with respect to the article sold.” United States v. Univis Lens Co., 316 U.S. 241, 249 (1942) … This case is quite different … because the [settlement] agreement must be understood to authorize Analog to sell its accelerometers for [otherwise infringing] uses. matchmaker patent

What’s love but a coupling satisfaction predictor? Eharmony recently received a patent on its matchmaking methodology. (U.S. Patent No. 6,735,568).

Claim 1 of the patent deacribes a method with four steps:

(i) generating, from empirical data, a number of factors … relevant to relationship satisfaction;
(ii) approximating the satisfaction that a user … has in the relationships that the user forms with others;
(iii) identifying … candidates for a relationship with the user by [using] the approximated satisfaction and one or more of the factors; and
(iv) approximating the satisfaction that the user will have in a relationship with a particular candidate.

(Related AP Story by Rachel Konrad).

Patent Law Malpractice Insurance

I think that everyone in the field is or will soon be feeling the pain of malpractice insurance rate hikes. Diedre Greg in Seattle has the story: Patent lawyers are slammed by insurance rates

Amity Insurance has developed their list of the top ten most common causes of attorney malpractice. Although the order may be somewhat different for patent attorneys, all of these are real issues.

1. Missing Deadlines
2. Lawyer Stress and Substance Abuse
3. Conflicts of Interest
4. Ineffective Client Screening
5. Inadequate Research and Investigation
6. Poor Client Relations
7. Overzealous Efforts to Collect a Fee
8. Poor or Inadequate Documentation
9. Inappropriate Involvement in Client’s Business
10. Unwillingness to Believe You Might Be Sued


Samuel Oddi (UAkron), has a working paper discussing the recent increase in malpractice claims and provides an analysis of the exposure of patent attorneys to malpractice claims.

In other insurance news, Universal Security has sued its insurer (the Hartford) for failing to cover patent litigation costs. (Article).

Sharing & Stealing

Professor Jessica Lichtman’s working paper and music sharing proposal is titled “Sharing and Stealing.”

My specific proposal is inspired by an impulse to see whether an architecture like the one that has permitted the Internet to flourish as an information space can define a thriving music space. The U.S. recording industry’s recent enforcement campaign seems to seek to move us in a very different direction.

This paper is a fun read.

Edward Felton, Martin Schwimmer, and others have already noted Professor Mark Lemley’s new paper that disparages the justification for ex-post IP incentives.

At the very least, Lemley misses the necessary ex-post first-publication incentives. Any coherent IP system gives an incentive to both create (ex-ante) and show your creation to the public (ex-post).

College Inventors Competition

June 1 is the deadline for entries to the Collegiate Inventors Competition sponsored by the National Inventors Hall of Fame. The top prize for 2004 is $50,000 plus $5,000 for an advisor.

Don’t worry if you are just hearing about the compitition now. Every year, some winners only hear of the competition the week before the deadline. Details, including a downloadable entry form, may be accessed here.

Measuring Secrecy: A Cost of the Patent System Revealed

The patent system is often juxtaposed with a system of trade secrets. A major difference between the two systems is that patented technology is disclosed to the public while trade secrets may remain hidden forever.

It turns out that in many cases, the patent system also promotes secrecy and witholding of information. This is especially true in scientific fields where the publication of research is postponed to await patent filing dates.

In his most recent paper, Dr. Jeremy Grushcow uses statistical analysis of data retrieved from online abstract databases and from the USPTO to demonstrate that secrecy in academic institutions is on the rise.

This paper confirms that granting patent rights to scientists and their institutions succeeds in generating increased industry participation in publicly funded research and increased patenting and commercialization activity. However, the paper also shows that scientists who seek patents are more secretive, withholding publication or presentation of their data so as not to jeopardize patentability. Notably, this paper also observes that even those university scientists not seeking patents became more secretive in response to the 1980 changes. This unanticipated increase in secrecy increases the risk of wasteful duplication caused by the patent system.

Grushcow offers several potential solutions to restore a “norm of data sharing.”

[I]ncreasing the rewards for early data sharing while providing an experimental disclosure exception to reduce the risk that early data sharing will jeopardize patentability.

Another aspect of secrecy that Grushkow did not explore is the period between filing and publication. Shortening the 18-month publication delay would allow for public knowledge at an earlier time in many cases.

Journal of Legal Studies, vol. 33 (January 2004)

Kinze v. Case (Attorney Disqualification)

Kinzenbaw and Kinze Manufacturing v. Case Corporation and New Holland (Northern District of Iowa, May 20, 2004)

In a patent infringement suit over a seed planter, the Iowa District Court refused to disqualify Plaintiff Kinze’s attorneys, Perkins Coie, even though Perkins also represented Defendant Case in other matters. Perkins’ work for Case had not involved patent matters.

Kinze’s original attorneys had been disqualified after working on patent matters for both Kinze and Case.

Blocking patents

The headline: Patent royalties threaten new mobile service

Patent royalties are posing threats to a new digital mobile broadcasting service in Korea before it is even launched. Digital mobile broadcasting, or DMB, is a service that enables users to view television through cellular phones by means of satellite transmission.

TU Media Corp. announced yesterday that Toshiba Corp., the Japanese company that holds the core technology for satellite mobile broadcasting, is demanding royalties for terminals sold in Korea. TU said Toshiba requested royalties of 2 percent per terminal for all gadgets that will use the satellite broadcasting service, reports JoonGang Daily.Commentary: The facts here don’t appear to show a great “threat” or that the patent owner plans to block all use of DMB — Toshiba just wants a piece of the action.

Patent Litigation Jobs

It looks like the job market for patent attorneys is still good. Need a job offer?

Update: A friend of mine has been a patent agent for several years in Chicago and also has a MolBio PhD. For family reasons, he is moving back to Northern California (Tiburon). He would like to continue doing patent work but does not want to commute to silicon valley. Please e-mail me with any leads or to request his info.

Personal Liability for Corporate Patent Infringement

Currently, the Federal Circuit requires a “piercing of the corporate veil” for individual liability of corporate officers in a patent infringement suit. In a new manuscript, Lynda Oswald (Michigan) argues that the current standard is wrong and overly broad.

In adopting this piercing standard, the Federal Circuit has inadvertently and radically expanded the scope of individual officer liability and has exposed corporate officers to a form of strict liability for their corporation’s infringing activities. I propose instead a standard that parallels the “personal participation” standard of traditional corporate doctrine, which would ensure that culpable corporate actors are held liable in appropriate circumstances, but would avoid wholesale imposition of personal liability upon officers for the patent infringement of their corporations.

IDEA: The Journal of Law and Technology, Vol. 44

Patent law: Further Justification

Patent law is traditionally justified as an innovation incentive. In a new working paper, Jochen Bigus (Hamburg University) argues that patent law also serves a second goal:

Namely, mitigating conflicts of interest in the venture financing process, thereby making innovations more likely.

Essentially Professor Bigus argues that the clear milestones provided by patent law allow for a better relationship between investor and innovator.

Charitable Contributions of Patents and other Intellectual Property

Yesterday, the Senate overwhelmingly passed S.1637 that limits tax deductions for charitable contributions of patent, copyright, trademark, trade name, trade secret, know-how, or software. The limit is the lesser of 5% of the market value (at the time of contribution) or $1,000,000. The House bill is in the Ways and Means committee.

For more tax related news, see the TaxProf.

Knoll v. Teva (Vicoprofen®)

Knoll Pharmaceutical Co. v. Teva Pharmaceuticals USA, Inc. (Fed. Cir. May 19, 2004).

The Federal Circuit reversed and remanded the N.D. Ill. district court judgment of invalidity. (U.S. Patent 4,587,252). The patent covers a method for treating pain with hydrocodone and ibuprofen (an NSAID) and is sold as Vicoprofen®.

In reversing the district court’s obviousness finding, the appellate panel found that:

Although the prior art appears to suggest combining an opioid, such as hydrocodone, with various NSAIDs, . . . [t]here appears to be no record of evidence of prior art teaching or suggesting the enhanced biomedical effect of the combination of hydrocodone and ibuprofen.

Additionally, the district court excluded some evidence of unexpected results because those results were discovered after the patent had issued. In disagreement, the panel would allow such evidence:

Evidence developed after the patent grant is not excluded from consideration, for understanding of the full range of an invention is not always achieved at the time of filing the patent application. It is not improper to obtain additional support consistent with the patented invention, to respond to litigation attacks on validity.

The inherent contradiction of this opinion: Obviousness is judged at the time of the invention, but this case allows evidence that was developed after the invention to be used in determining obviousness.