December 2008

Standard Setting and Waiver of Patent Rights

Patent

Qualcomm Inc. v. Broadcom Corp (Fed. Cir., Dec. 1, 2008)

“This patent infringement case involves the consequence of silence in the face of a duty to disclose patents in a standards-setting organization (“SSO”).”

Qualcomm participated in the “Joint Video Team” to set standards for video compression technology. During those meetings, Qualcomm did not disclose that it held two patents that covered technologies required to comply with the standards being developed.

Under participant agreements, however, disclosure was required to help ensure “a simple royalty free baseline profile.” And, under Rambus, even non-explicit disclosure requirements can create a duty to disclose patent rights during standard setting discussions.

Because the patentee intentionally failed to disclose its patents, the court agreed that the patents were unenforceable under the equitable doctrine of implied waiver. However, the court limited the scope of the waiver only to products that were compliant with the new (H.264) standard.

Notes:

  • The court cites Mark Lemley’s 2002 SSO paper

Constitutional Separation of Powers

Patent,

The structure of the US Constitutional is designed to separate governmental powers. In patent law, separation of powers issues continue to arise – largely because the executive branch (PTO) and the judicial branch (Federal Courts)* decide many of the same patent law issues. Post-grant procedures such as reexamination and reissue complicate the scene because those avenues allow for parallel decisionmaking by the two bodies. Notably, most inter partes reexaminations involve parallel patent infringement litigation. Usually, a district court will reach its result before the PTO, and questions then arise as to the PTO’s subsequent power to affirm or deny patentability.

Although it appears to be more of a statutory construction issue, BlackBoard recently sued the USPTO (Dudas) in a case involving these issues. Originally, BlackBoard sued Desire2Learn for patent infringement and Desire2Learn subsequently requested inter partes reexamination of the asserted patent. In February 2008, a Texas jury found the asserted claims valid** and infringed. (**i.e., not invalid). The District Court did not issue its final judgment until May 2008. That case is pending appeal at the Federal Circuit. In the meantime, in March 2008, the PTO issued an initial rejection of the claims and has, more recently, refused to end the reexamination.

Under 35 U.S.C. §317(b), an inter partes reexamination must be stopped by the PTO if the requestor’s invalidity argument is rejected in a civil action and a “final decision has been entered.”

FINAL DECISION – Once a final decision has been entered against a party in a civil action arising in whole or in part under section 1338 of title 28, that the party has not sustained its burden of proving the invalidity of any patent claim in suit … [then] an inter partes reexamination requested by that party or its privies on the basis of such issues may not thereafter be maintained by the Office, notwithstanding any other provision of this chapter. This subsection does not prevent the assertion of invalidity based on newly discovered prior art unavailable to the third-party requester and the Patent and Trademark Office at the time of the inter partes reexamination proceedings. 35 U.S.C. §317(b)

BlackBoard argues that the final decision by the Federal Court in Texas strips the PTO of authority to maintain the inter partes reexamination. The PTO, on the other hand, maintains that the litigation is not really final until Desire2Learn exhausts all appeals.

Notes:

  • In addition to the PTO and Courts, the International Trade Commission (ITC) is a third decisionmaking body that is considered a quasi-judicial governmental agency. There are some cases where the same patent and same parties have been simultaneously involved in disputes in all three forums.
  • BlackBoard complaint
  • Desire2Learn Patent Infringement Blog
  • As a work-around, Desire2Learn has its servers located Canada. The only valid BlackBoard claims are “method” claims, and, under RIM v. NTP, a method claim is only infringed if each step of the method is performed in the USA.