November 2005

BlackBerry Patent Settlement Found Unenforceable — Stay of Injunction Denied

PatentlyOImage009NTP v. Research-in-Motion

Judge Spencer of the Eastern District of Virginia has determined that the $450 million agreement between RIM and NTP that was announced Spring 2005 is not enforceable:

“The court finds the parties do not have a valid and enforceable settlement.”

RIM had asked the court to enforce the settlement that would allow it to end the patent lawsuit and escape from the threat of injunction. 

Settlement Agreement? In December 2004, the Federal Circuit released its opinion that pushed against the territorial bounds of patent law.  In that opinion, the Court of Appeals for the Federal Circuit (CAFC) found that U.S. patent law covers instances where infringing elements are located abroad — so long as the “control and beneficial use” of the infringing system is within U.S. territory.  Soon thereafter, RIM filed a motion for rehearing en banc that is still pending. 

The CAFC’s decision, strongly in favor of NTP, paved the way for a March 2005 “settlement” that reportedly included $450 million for NTP.  The original settlement announcement was based on a 1/2 page term-sheet reportedly signed by the parties.  As would be expected, 50 square inches of paper turned out to create a whole new level of disagreement between the parties who have been working through court mediation to flesh out the agreement.

Settlement Breakdown: In early June 2005, the settlement issue came to a head and the parties staked out their positions on paper before the CAFC.  However, that court declined to hear the issue until it being first decided by the district court.

STAY DENIED: In addition, the district court denied RIM’s motion to stay. (decision posted below).  In his opinion, Judge Spencer held that:

The Court recognizes the rights of a patent holder whose patents have been infringed. Indeed, the essence of patent protection is that a party legally deemed to have infringed one or more patents shall be liable to the patent holder for damages. Valid patents would be rendered meaningless if an infringing party were allowed to circumvent the patents’ enforcement by incessantly delaying and prolonging court proceedings which have already resulted in a finding of infringement.

The Court intends to comply with the Federal Circuit’s mandate and move this litigation forward so as to bring closure to this case on remand. Derailing these proceedings when a resolution is in sight would be ill-advised at best.

For these reasons, RIM’s Motion for Stay of Proceedings Pending Reexamination of NTP, Inc.’s Patents-in-Suit is hereby DENIED.

The Court’s opinion the filings from the Department of Justice, however, it appears to be clear that the Court’s next step will be to determine the bounds of any injunction.


EBay Arrives at Supreme Court: A Landmark Patent Case

MercExchangePatent_small1eBay v. MercExchange (on petition for certiorari).

The Supreme Court has agreed to review the question of “when it is appropriate to grant an injunction against a patent infringer” and will question the century-old precedent of Continental Paper Bag (1908).

The issues before the Court include:

  1. Whether the Federal Circuit erred in setting forth a general rule in patent cases that a district court must, absent exceptional circumstances, issue a permanent injunction after a finding of infringement. (Question proposed by eBay).
  2. Whether this Court should reconsider its precedents, including Continental Paper Bag Co. v. Eastern Paper Bag Co., 210 U.S. 405 (1908), on when it is appropriate to grant an injunction against a patent infringer. (Question proposed by Supreme Court).

 In its petition for certiorari, eBay spells out the traditional four-factor test for injunctive relief and argues that the four-factor test should apply to patent cases rather than the de facto per se test applied by the CAFC.  The four-factor test includes consideration of:

  1. Irreparable harm from not issuing an injunction;
  2. Whether an adequate remedy exists in law (damages);
  3. Whether the injunction would be in the public interest; and
  4. Whether a balance of hardships would tip in the plaintiff’s favor. 

According to regarded patent law professor Joseph Miller, this certiorari decision is breathtaking. “If the Court writes narrowly, it will be the most important patent case since Chakrabarty or Diehr. If the Court writes broadly, it will be the most important patent case (perhaps even the most important patent or copyright case) in a century.”

An injunction in this case would not threaten eBay’s core business, but is directed to the “buy-it-now” feature of the online auctioneer.



Disclosed Subject Matter Only Dedicated to the Public When Specifically Identified as an Alternative to a Claim Limitation

Pfizer v. Teva (Fed. Cir. 2005) (05–1331).

By S. Richard Carden

On appeal from the District Court’s grant of a preliminary injunction against generic manufacturers/distributors Ranbaxy and Teva, the Federal Circuit concurred with the lower court’s finding of likelihood of success and irreparable harm and thus affirmed the PI grant. Perhaps the most significant portion of the decision related to the Circuit’s clarification of dedication of subject matter to the public for the purposes of the doctrine of equivalents, as recently set forth in Johnson & Johnston Assocs. Inc. v. R.E. Serv. Co. (Fed. Cir. 2002) (en banc). (more…)

Holiday wishlist for a patent attorney. (UPDATE)

DiscGolf Welcome back from Thanksgiving. Now its time to start shopping — here is a holiday wish-list for a patent attorney.

UPDATE: It turns out that not all patent attorneys are men who like sports, games & tools.  Here are a few other suggestions that I received from Patently-O readers.

BPAI: Mixing Subject Matter => Rejection

BacklashReductionEx parte Moore (BPAI 2005) (NOT PRECEDENTIAL)

In the wake of the CAFC’s recent IPXL v. Amazon opinion, the PTO’s Board of Patent Appeals has decided its own Section 101 case — rejecting a patent application based on its use of mixed use of method limitations and apparatus limitations in a single claim.

The statutory categories under 35 U.S.C. § 101 are expressed in the alternative, i.e., process, machine, manufacture or composition of matter. Thus, the appellants’ claim 24, which encompasses two statutory categories, i.e., apparatus and method, violates 35 U.S.C. § 101. See Ex parte Lyell, 17 USPQ2d 1548, 1551 (BPAI 1990).

Here, claim 24 was directed to a “backlash reduction apparatus” that comprised a number of components, and, in addition, required “the backlash reduction apparatus executing a method comprising: advancing a substrate . . .”

Interestingly, the Examiner did not raise this issue – rather, it was raised, apparently sua sponte, by the Board after the Examiner’s reasons for rejection were themselves rejected.



A day of thanks

I hope that everyone has a happy Thanksgiving. Even if you are not in the U.S., I suggest that you take the day off to celebrate.  Although I love turkey, I hope that you don’t deep-fry yours.

The U.S. Patent and Trademark Office Joins in the Celebration of Thanksgiving
Recognizes patents and trademarks related to Thanksgiving

The Department of Commerce’s United States Patent and Trademark Office joins in the celebration of Thanksgiving by recognizing some patents and trademarks associated with this festive holiday.

Food often takes center stage at Thanksgiving, and there are many well-known Thanksgiving-related products protected by patents and trademarks. One way to spend more time with family and less in the kitchen cleaning up is by using a disposable cooking pan (patent #5,628,427) or a cooking jacket (patent #4,942,809) for the turkey, ham or roast. One non-traditional, but increasingly popular, way to cook a turkey is deep-frying, and one type of equipment used in this preparation is protected by patent # 5,758,569.

Some well-known trademarks associated with turkey and dressing, must-haves at many Thanksgiving tables, are Butterball (registration #1151836) for turkey products and Stove Top (registration #0949459) for stuffing. What holiday feast would be complete without cranberry sauce such as Ocean Spray (registration #2150919)? Desserts are always the final complement to a Thanksgiving feast. For those that do not bake their own, Sara Lee’s slogan for its pies and cakes, “Nobody Doesn’t Like Sara Lee,” is protected by trademark registration #1885156.

These patents and trademarks, as well as the more than six million patents issued since the first in 1790 and the 2.3 million trademarks registered since 1870, can be seen on the Department of Commerce’s U.S. Patent and Trademark Office web site at

Patentable Subject Matter?


If you are already looking for a Christmas present, you might find a good one for your brother in U.S. Patent No. 6,966,840. The patent is titled “Amusement device that senses odorous gases in a bathroom.”

With all this question of patentable subject matter — perhaps this would have been a candidate for rejection. . . . Proposed revision to Diamond v. Diehr: “anything under the sun made by man [excluding bathroom related novelty devices].”


Upcoming Patent Law Conferences

  • December 5,  16th Annual PTO Day, Washington, DC – IPO
  • January 3–7, National CLE intellectual Property Law Conference, Aspen Snowmass — ABA-IPL, INTA, FCBA (Skiing + Learning!) (Big names like Dunner, Whealan, McKelvie & Rogan).
  • February 1–4, Mid-Winter Institute, La Quinta, California — AIPLA (I will be presenting “Patent Law Year in Review.”) (Southern California in February!).
  • February 17, Modern Patent Claim Construction Practice, Chicago — LSI.
  • February 27–28, Calculating and Proving Patent Damages, San Francisco — LSI.
  •  April 20–21, Blog Law, San Francisco — LSI (Cathy Kirkman & I are co-chairs).
  • System Claim that Includes a Method Step is Invalid as Indefinite.

    IPXLIPXL Holdings v. (Fed. Cir. 2005).

    IPXL sued Amazon, arguing that its one-click purchasing system infringed on IPXL’s patent. Amazon won at trial and on appeal.

    A portion of the opinion focuses on indefiniteness.  Specifically, the district court found that claim 25 was indefinite under 35 USC 112 because it attempts to claim both a system and a method for using that system.  Claim 25 reads as follows:

    The system of claim 2 [including an input means] wherein the predicted transaction information comprises both a transaction type and transaction parameters associated with that transaction type, and the user uses the input means to either change the predicted transaction information or accept the displayed transaction type and transaction parameters.

    On appeal, the panel set out the rule — that a “claim is considered indefinite if it does not reasonably apprise those skilled in the art of its scope.”  Regarding claims directed to both systems and methods, the panel agreed with prior BPAI decisions that “made it clear that reciting both an apparatus and a method of using that apparatus renders a claim indefinite.”

    Here, the CAFC found that the claim was unclear whether it required only a system that allows the user to use the input means or instead required that the user actually use the input means. “Because claim 25 recites both a system and the method for using that system, it does not apprise a person of ordinary skill in the art of its scope, and it is invalid under section 112, paragraph 2.”


    • This is a very big decision and may lead to invalidation of many claims. A few potential examples:
      • A system for performing the method of claim 1.
      • A system comprising X and Y, wherein X operates at a high rate of speed.
      • The case does not mention product-by-process claims.
    • The analysis of indefiniteness here is quite different than the Court used in recently in Fisher-Price v. Graco.  There, indefiniteness required “severe” defects in the claims.
    • The court also denied Amazon’s claims for attorney fees because they were not filed in compliance with FRCP Rule 54(d)(2)(B). “[W]e hold that any claim to attorney fees must be processed in compliance with Rule 54(d)(2)(B). No provision in section 285 exempts requests for attorney fees thereunder from compliance with Rule 54(d)(2)(B).”
      • Rule 54(d)(2)(B): Unless otherwise provided by statute or order of the court, the motion [for costs and attorney fees] must be filed and served no later than 14 days after entry of judgment;  must specify the judgment and the statute, rule, or other grounds entitling the moving party to the award;  and must state the amount or provide a fair estimate of the amount sought.  If directed by the court, the motion shall also disclose the terms of any agreement with respect to fees to be paid for the services for which claim is made.
    • Opinion.


    Under 102(g), Conception of Prior Art Requires Appreciation of Invention

    Invitrogen Corp. v. Clontech Laboratories (Fed. Cir. 2005).

    By Donald Zuhn, Ph.D. (Patently-O Guest Author).

    In an appeal from a District Court judgment invalidating more than two hundred claims in three Invitrogen patents as being anticipated under § 102(g)(2), the Federal Circuit vacated and remanded, holding that the District Court misapplied the law of appreciation when determining the date of conception for researchers at Columbia University. The Federal Circuit, however, affirmed the District Court’s rulings on enablement, written description, and infringement.

    The patents at issue relate to a genetically modified version of the enzyme reverse transcriptase, that has use in the field of molecular biology. Naturally-occurring (or unmodified) reverse transcriptase possesses both DNA polymerase and RNase H activities, the former permitting the enzyme to synthesize a DNA copy (cDNA) of a messenger RNA (mRNA) template, and the latter permitting the enzyme to degrade the mRNA template following cDNA synthesis. In contrast, the genetically modified enzyme lacks RNase H activity, and therefore, is unable to degrade the mRNA template following cDNA synthesis, allowing researchers to reuse the mRNA template to create additional cDNA copies..

    While neither party disputed the District Court’s determination that Invitrogen had reduced a modified reverse transcriptase lacking RNase H activity to practice in January of 1987, Invitrogen did find fault with the lower court’s ruling that Drs. Stephen Goff and Naoko Tanese, two researchers at Columbia University, had conceived of such an enzyme before Invitrogen had reduced the enzyme to practice. Drs. Goff and Tanese had begun their work in 1984 by preparing a panel of bacterial mutants having modified reverse transcriptase genes. The panel included two mutants that the Columbia University researchers would later show possess modified reverse transcriptase lacking RNase H activity. However, due to limitations in the assays that Drs. Goff and Tanese were using to measure RNase H activity, they were unable to conclusively establish that any of the mutants possessed modified reverse transcriptase lacking RNase H activity at the time the mutant panel was prepared. In March of 1987, Drs. Goff and Tanese used a new assay that they had developed to finally establish that two of the mutants from their panel possessed the modified enzyme. They were also able to correlate the results obtained with their new assay with their late 1986 sequencing analysis of the mutants.

    Following a series of pre-trial motions regarding the issues of conception, enablement, written description, and infringement, the District Court determined, inter alia, that Drs. Goff and Tanese (a) had conceived of a genetically modified reverse transcriptase lacking RNase H activity either in December of 1984 when they had isolated mutants possessing modified reverse transcriptase, or in January of 1986 when they had sequenced the reverse transcriptase genes in these mutants; (b) had actually reduced their invention to practice in March of 1987 when they established that two mutants from their panel possessed modified reverse transcriptase; and (c) were diligent in reducing their invention to practice, and did not abandon, conceal, or suppress it. However, despite these rulings, the District Court refused to find that the work of Drs. Goff and Tanese anticipated Invitrogen’s patents under § 102(g)(2), arguing that anticipation posed factual questions requiring resolution on a claim by claim basis.

    Stating that conception “require[s] more than unrecognized accidental creation,” and instead “requires that the inventor appreciate that which he has invented,” the Federal Circuit found that the District Court erred by establishing Drs. Goff and Tanese’s conception before January of 1987 and granting partial summary judgment for Clontech. Relying on decisions of its predecessor Court, which “require some connection between the physical result (the invention) and the belief (by the inventor),” the Federal Circuit determined that the record was inconsistent with the District Court’s notion that Drs. Goff and Tanese set out to create a modified reverse transcriptase or appreciated in 1984 that their mutant panel contained two mutants possessing modified reverse transcriptase. Rather, the Federal Circuit believed that this case “fit[] squarely within the unrecognized, accidental duplication cases.”

    However, while the Federal Circuit determined that the evidence excluded both dates of conception proposed by the District Court, the Federal Circuit also found that Dr. Goff’s deposition testimony precluded it from finding that the District Court abused its discretion in refusing to grant partial summary judgment for Invitrogen on the issue of conception. In particular, Dr. Goff had testified that he had formed a suspicion in late 1986, based on his difficulties analyzing the mutants, that two of the mutants possessed modified reverse transcriptase lacking RNase H activity. Because a reasonable fact-finder presented with Dr. Goff’s testimony could conclude that the evidence preceding the researchers’ March 1987 testing might suffice, under the applicable standard, to corroborate Dr. Goff’s suspicions about the two mutants, the Federal Circuit vacated the District Court’s invalidity judgment and remanded the case for further proceedings.

    NOTE: This post was written by patent attorney Donald Zuhn, PhD. Don is a true expert in cutting edge biotech patent law and practices both litigation and prosecution at MBHB LLP in Chicago. (

    Phillips v. AWH: Case Petitioned to Supreme Court

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

    AWH has petitioned the Supreme Court to take-up this landmark case with the broad question of whether patent claims should be reviewed de novo on appeal.

    Question Presented: Whether the Federal Circuit is correct in holding that all aspects of a district court’s patent claim construction may be reviewed de novo on appeal.

    This petition picks up where Judge Mayer and Newman’s dissent left off in the en banc Phillips decision. In their dissent, the judges focused their attention on the “futility [and] absurdity” of the de novo rule.  

    Now more than ever I am convinced of the futility, indeed the absurdity, of this court’s persistence in adhering to the falsehood that claim construction is a matter of law devoid of any factual component. Because any attempt to fashion a coherent standard under this regime is pointless, as illustrated by our many failed attempts to do so, I dissent.

    Indeed, many believe that the high reversal rate of claim construction is primarily due to the de novo standard.  To that effect, AWH’s petition does not mince words:

    Left to its own devices, the Federal Circuit will continue to improperly devote the chief measure of its energy to rejudging the facts of patent claim constructions, rather than to fulfilling its purpose of bringing uniformity to patent law.

    A Phillips reply brief will be due shortly.


    CAFC: Claim implied at least two styles.

    MicrostrategyMicrostrategy v. Business Objects (Fed. Cir. 2005)

    These companies make business intelligence software.  Microstrategy filed suit against Business Objects alleging both patent infringement and several business tort claims.  The patent at issue involved automatic broadcasting of information to multiple types of subscriber devices and then formatting the output.

    Patent Claims: After a Markman hearing, the defendant, Business Objects, was granted summary judgment of non-infringement. On appeal, Microstrategy did not fight the claim construction, but rather the interpretation and application of the claim construction.  The question was whether the claim language of “each user output device . . . be associated with a device-specific style” required at least two different styles.

    MicroStrategy argues that this Markman construction and the context of the invention do not require support for more than one type of output device. In particular, MicroStrategy notes that the specification contemplates a system with “one or more” output devices. Thus, MicroStrategy reads the claim and the district court’s Markman construction to permit a system with support for just one type of user device.

    The CAFC, disagreed. Because the claim required that “each user output device . . . be associated with a device-specific style,” the Court determined that the claim implicitly required at least two different styles.  Because the defendant only supported one style, the non-infringement decision was affirmed.

    The Appellate panel did, however, reverse the lower court’s findings regarding one of the business tort claims under Virginia law.

    Court invalidates more Lemelson claims

    Symbol Tech. v. Lemelson (Fed. Cir. 2005) (order).

    In a recent decision, the Federal Circuit affirmed a finding that Lemelson’s patents were unenforceable due to prosecution laches. Lemelson filed a petition for rehearing.  In an order based on that petition, the CAFC declined the opportunity to rehear the case except by further punishing the long-time patent holder.

    Although the district court did not make its resolution of the laches issue applicable to the remaining claims, holding that the question would be decided only if it later became necessary to do so, in our view, the more appropriate course of action is to apply the laches holding to all of the claims in the 14 asserted patents. Lemelson does not provide any persuasive reason why that should not be so.


    Introduction to Patent Law Book Review

    Introduction to Patent Law An Introduction to Patent Law
    by Janice M. Mueller


    $50.00 from

    Book Review: In this 400 page paperback, Professor Janice Mueller (Pittsburgh) lays out the basics of patent law and explains the requirements for obtaining a patent as well as considerations during litigation.  This is essentially a textbook, and covers the same material as other patent law textbooks.  The main difference is that Mueller’s writing flows and is easy to read.  In addition, she explains the foundations of patent law without getting bogged-down in unnecessary case-law and statutory interpretation.

    This is a basic but thorough text covering the legal side of patents.

    Who should read An Introduction to Patent Law:

    • Law students (This is a good back-up to understand what your casebook is saying).
    • Anyone entering the area of intellectual property and patent law.


    This book is of limited use as a research end-point for an experienced patent attorney.  The book is an introduction and does not cover the topics in enough depth to be serve as a treatise. (That’s why it is called an introduction).

    About Book Review Monday: On occasional Monday we review patent law related books.  Let me know if you are interested in writing a book review. (Send your proposal to

    Bush Administration Intercedes in BlackBerry Patent Case

    NTP v. Research-in-Motion (Fed.Cir. 2005)

    In this ongoing patent infringement case involving the Canadian RIM’s BlackBerry system, the U.S. Government has submitted a brief to District Court Judge Spencer.  The brief notes that under Trojan v. Shat-R-Shield, the Federal Government cannot be enjoined against using a patented invention and thus, asks the court to fashion any injunction in such a way to continue to allow the U.S. Government workers to continue to use the BlackBerry.

    According to the Government brief, at this point, RIM has no way to distinguish between U.S. Government users and private users. Thus, the Government proposes the following options:

    1. Require RIM to create a whitelist of U.S. Government devices and users
    2. The Government is in the process of determining how long it would take to provide user names and information to RIM, and thus asked for a 90 day stay in the proceedings to determine whether they believe an injunction would implicate other public interests.

    Chief Judge James R. Spencer is a Reagan appointee and Harvard Law graduate.

    Other tidbits:

    Wham-O Court Uses Vitiation Doctrine to Exclude DOE

    InfringingProducts015Wham-O v. Sport Dimension (N.D. California 2005).

    Wham-O sued Sport Dimension for infringement of its patented surfing body-board, alleging that Sport Dimension’s Snow Slider infringed the claims of the patent.

    The claims require an “outer layer [of] plastic sheet material” with graphics printed on the inside surface of the sheet — to protect the graphics from damage.  It was undisputed that the Snow Slider’s graphics were printed on an inner layer, and Wham-O thus argued for infringement under the doctrine of equivalents (DOE).

    On motion for summary judgment, the district court looked at two restrictions of the DOE — prosecution history estoppel and the all elements rule — and decided those as questions of law.

    Prosecution History Estoppel: Regarding estoppel under Festo, the court determined that no estoppel should apply to the equivalent in question because the narrowing amendment made during prosecution “had nothing to do with graphics being on the outer layer only as opposed to the inner layer, which is the distinction at issue in this case.”

    All Limitations Rule: The all limitations rule has two implications for the DOE. First, the DOE must be applied on a limitation-by-limitation basis as opposed to from the perspective of the invention as a whole.  Second, an accused element cannot be an equivalent to a limitation of the claimed invention if such a finding would entirely vitiate that limitation. (See Freedman Seating).

    Here, Sport Dimension argued that “if graphics imprinted on the inner layer facing away from the core (Sport Dimension’s product) could be an equivalent for graphics imprinted on the outer layer facing the core (Wham-O’s patent), then the outer layer limitation of the claim would be entirely vitiated.”  The district court reviewed several factors and agreed that the vitiation doctrine excluded the product from consideration under the DOE.

    Specifically, the court relied upon the following factors:

    • The claim plainly requires an outer layer with graphics facing the core.
    • The Sport Dimension’s product is simple and should have been foreseeable.
    • As in Ethicon, Wham-O’s limitation was tied to a specific place (the inner side of the outer layer), and a change in that place to the inner layer constitutes a “difference in kind,” not a “subtle difference in degree.”

    Summary judgment of non-infringement under the DOE granted.

    File Attachment: Summary Judgment Order for Sport Dimension (161 KB)

    House Judiciary Committee Supports Anti-Fee-Diversion Bill

    Diversion of excess USPTO fees has been a controversy for some time. (link, link, link).  Almost every year, a bill is introduced to prevent appropriators from using patent fees for other purposes by requiring the PTO to refund any fee revenue that exceeds the agency’s appropriation.  This year’s bill, HR 2791, has now been approved by the Judiciary Committee with broad bipartisan support.

    Comment: Despite theoretical support, this bill will almost certainly be quietly killed in the back room by appropriators trying to make-up for the increasing revenue gap of the Federal Government.

    Blackberry Hearing This Morning

    NTP v. Research-in-Motion

    On November 9, 2005, U.S. District Judge James Spencer in Richmond held the first district court status hearing in the NTP v. RIMM patent case since the the Court of Appeals for the Federal Circuit issued its revised decision in August 2005.

    According to reports, Judge Spencer indicated that he would initially review a disputed settlement agreement but that it was “highly unlikely” that he would stay the case to await the results of the pending reexamination of NTP’s patents at the USPTO.

    Reuters reports:

    “I intend to move swiftly in this,” Spencer said. “I’ve spent enough of my life and time on NTP and RIM.” . . . Spencer called for briefs from both sides on the settlement issue.

    In 2003, Spencer granted an injunction that would have halted U.S. sales of the BlackBerry and shut down its service after NTP successfully sued RIM. But Spencer stayed the injunction pending appeal.

    An appeals court later scaled back the infringement ruling against RIM, but upheld some patent infringement claims. Efforts by RIM to get the courts to stay case have failed.

    Meanwhile, the U.S. Patent and Trademark Office earlier this year completed a re-examination of eight NTP patents and issued initial rulings rejecting all of the claims.

    RIM has noted the patent office ruling is not final, and NTP has said it plans see the full re-examination process through, which could take years.

    D.E. Technologies v. Dell

    Also in Virginia (Roanoke), Judge Glen Conrad is scheduled to begin the markman hearing on November 9 in DE’s infringement suit against Dell. DE’s patent (US6460020) is directed to an international transaction system that provides a pre-transactional calculation of all charges involved in any international transaction.

    2nd Circuit Approves Patentee-Generic Reverse Payments

    InfringingProducts013In re: Tamoxifen Citrate Antitrust Litigation (2nd Cir. 2005).

    Just in time for the Supreme Court’s decision on certiorari in FTC v. Schering-Plough, the Second Circuit court of appeals has released its decision in the Tamoxifen Citrate case — finding that reverse payments to a generic manufacturer were not sufficient to show a per se violations of the antitrust laws.  In addition, the Court went on to hold that even “excessive reverse payments” might not be unlawful.  The Court did recognize the suspicious nature of reverse payments.

    There is something on the face of it that does seem “suspicious” about a patent holder settling patent litigation against a potential generic manufacturer by paying that manufacturer more than either party anticipates the manufacturer would earn by winning the lawsuit and entering the newly competitive market in competition with the patent holder. Why, after all — viewing the settlement through an antitrust lens — should the potential competitor be permitted to receive such a windfall at the ultimate expense of drug purchasers? We think, however, that the suspicion abates upon reflection. In such a case, so long as the patent litigation is neither a sham nor otherwise baseless, the patent holder is seeking to arrive at a settlement in order to protect that to which it is presumably entitled: a lawful monopoly over the manufacture and distribution of the patented product.

    Dismissal affirmed.

    In dissent, Judge Pooler argued the antitrust analysis can be applied to settlements concerning patented products.

    The requirement that—unless an antitrust plaintiff demonstrates that a settlement agreement exceeds the scope of the patent—it must show that the settled litigation was a sham, i.e., objectively baseless, before the settlement can be considered an antitrust violation is not soundly grounded in Supreme Court precedent and is insufficiently protective of the consumer interests safeguarded by the Hatch-Waxman Act and the antitrust laws.


    CAFC: Court’s Summary Judgment of Noninfringement “Invaded the Province of the Fact Finder”

    InfringingProducts011Dorel v. Graco (Fed. Cir. 2005).

    Dorel sued Graco for infringement of its patents on child car seats with retractable cup holders. Graco won its motion for summary judgment of non-infringement based on the argument that its seats did not include a seat “removably secured to the base.”  The court reasoned that the seat could not be removably secured to the base because there was no separate base.

    On appeal, the CAFC reversed, finding that the district court had “invaded the province of the finder of fact . . . in deciding the infringement question.”  Here, the CAFC determined that a question of fact existed because as to whether there was a separate base because the seat portion of Graco’s product could easily be separated (with a screwdriver) into a top and bottom portion that could be termed a seat and a base respectively.


    In dissent, Judge Newman took issue the majority’s factual analysis — arguing that no reasonable jurist could find that the base was “removable.”

    The Graco carseat is a permanent assembly whose molded parts are permanently screwed together with six “one-way” screws. Upon unscrewing and disassembly, the Graco seat becomes a collection of loose parts, the cup holder incapable of its function of supporting a cup. . . . Removal of the top part of the Graco carseat (for example, to carry the infant into grandma’s house), would require removing the upholstery, upending the carseat (requiring removal of the entire assembly from its crash-proof installation), and removing the six unremovable screws with the special tool needed for removing unremovable screws — and then repeating the operation in reverse upon returning to the car with the top part and its infant cargo. The panel majority’s redefinition of the patented invention to cover such a carseat is devoid of support.