According to PTO figures, the Office has issued around 25,000 certificates of correction on issued patents each year since 2001. On a per patent basis, about 15% of issued patents are associated with a certificate of correction.*
Generally, a certificate of correction can be used to correct a minor mistake such as a “clerical or typographical” error or other minor error. In Superior Fireplace, the court held that a certificate of correction that broadens the claim is only permissible when it is clear from the specification and prosecution history how to correct the error. Similarly, in Central Admixture Pharmacy the CAFC found that the correction from osmolarity to osmolality was void because the error “was not clearly evident to one of skill in the art and the result was to broaden the claims.” The relief for an improper certificate of correction is simply to cancel the certificate.
Over the past several years, a number of automated and out-sourcing services have emerged to check against PTO printing errors and other typographical errors. What are the best services and best practices regarding corrections?
* To account for the time delay in obtaining corrections, I looked at only patents numbered 6,000,000 – 7,000,000 for the per patent estimate.
Ford Global Technologies v. ITC (Fed. Cir. 2008) (The F-150 ITC Case) (CURRENTLY ON APPEAL)
In 2007, the International Trade Commission (ITC) issued a final decision finding three Ford design patents invalid based on a prior public use. The patents relate to various parts of its F-150 truck design. Ford had asked the ITC to stop generic parts manufacturers from imports of the patented designs that were flowing in from Taiwan. In its decision, the ITC found seven of the design patents valid and infringed, but found that three of them were invalid.
Prior Public Use: The alleged prior public use in this case was an event where Ford selected 900 members of the public to attend in small groups and provide feedback on proposed car designs. At the event, security was “high,” cameras were banned as were sketches. Thus, according to Ford, the attendees could not have truly disclosed the ornamental features of the patented design. The invitees were also paid – and thus, disclosure to those individuals should be presumptively be considered private (as would normal in house discussions with an employee). Ford also argues that the payment to attendees is clear evidence that this public use was not “commercial exploitation.”
Almost no Scope: Many design patent holders run from the Federal Circuit’s 1988 in re Mann decision announcing that “design patents have almost no scope. In the auto-parts industry, however, no scope is needed so long as the patented designs are identical to the marketed products. The generic part importers are “slavishly copying” Ford’s original design — thus infringement should be open-and-shut. (See discussion below).
Ford embraced the narrow scope of its design rights – arguing that there its controls over the feedback event of preventing cameras or drawings ensures that none of the attendees will be able to place the invention in the public domain. Notably, in a recorded post-show follow-up, attendees who were asked about the design could only describe it in general terms such as “beefy.”
“The video evidence shows that the claimed ornamental features of the patents-in-suit were not in the public’s possession. Without cameras or sketches – which were specifically prohibited – there was no way here that the claimed designs could have been disclosed to the public. Ford therefore did not “remov [e] inventions from the public domain which the public justifiably comes to believe are freely available.” … In short, “beefy front end” and “a chopped top” do not describe or disclose the design inventions.
Is Point of Novelty Analysis Required?: In its counter-appeal, the Taiwanese manufacturers argue that infringement was improperly found because the ITC failed to perform the point-of-novelty test which, according to the defendants, is required even when the patented design is identically copied.
“[E]ven though the court compares two items through the eyes of the ordinary observer, it must nevertheless, to find infringement, attribute their similarity to the novelty which distinguishes the patented device from the prior art.”‘ Lawman, 437 F.3d at 1386 (quoting Litton, 728 F.2d at 1444).
The defendants are correct that Lawman and Litton appear to require the point-of-novelty test in every case of infringement. That issue will likely be resolved in the upcoming en banc decision in Egyptian Goddess. In addition, the defendants argued that the design patents should be considered obvious under KSR v. Teleflex (2007). As in that case the claims appear to be composed of a set of elements all found in the prior art.
An amicus brief was filed supporting the generic manufacturers. However, I have not yet seen that brief. In addition, the ITC recently began investigating another design patent complaint filed by Ford against the same generic manufacturers. This new case involves repair parts for the 2005 Mustang redesign.
Note:
A reader reminded to me to mention pending H.R. 5638 and the PTO’s town hall meeting next Monday to discuss design patent issues. (written comments due July 15).
Unlike the patent reform bill, H.R.5638 is a partisan Democrat sponsored bill that would primarily support the insurance industry and make automobile repair less expensive by excusing repair parts from patent infringement. The bill would amend 35 USC 271 by adding the following subsection:
(j) It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States any article of manufacture that itself constitutes a component part of another article of manufacture, if the sole purpose of the component part is for the repair of the article of manufacture of which it is a part so as to restore its original appearance.
Helmsderfer v. Bobrick Washroom Equipment (Fed. Cir. 2008)
John Helmsderfer sued Bobrick for infringement of its patent covering tamper-resistant diaper changing stations. After a markman hearing, the Southern District of Ohio district court awarded the defendants summary judgment of non-infringement. Helmsderfer appeals on claim construction.
Partially Hidden from View: The claims include a top surface platform that is “partially hidden from view.” On appeal, the patentee argued that “partially hidden” could include “totally hidden.” The CAFC disagreed for two textual reasons:
The patent used “generally” in other portions of the claim but not for this element — providing evidence that the patentee was intentionally distinguishing between those two modifiers.
The patent used “at least” in other portions of the claim but not for this element — providing evidence that in this case the patentee did not intend to claim “at least partially.”
Quoting its own 2000 CAE Screenplates decision, the court reasoned that “[i]n the absence of evidence to the contrary, we must presume that the use of these different terms in the claims connotes different meanings.” Here, the court could find no evidence to find that partially should include totally.
Exclusion of preferred embodiment: The applicant did point that its preferred embodiment and also “every illustrated embodiment” would be excluded by the narrow definition of “partially hidden.” The CAFC, however, rejected that such an exclusion creates any problem here. In particular, the court noted that it was analyzing only teh two claims (6–7) at issue in the case — “[O]ur construction of claims 6–7 leaves open the possibility that claims not at issue in this appeal encompass omitted embodiments. It is often the caes that different claims are directed to and cover different disclosed embodiments. The patentee chooses the language and accordingly the scope of his claims.”
The appellate panel gave lip service to the precedential canon of avoiding claim interpretation that “excludes the preferred embodiment from the scope of the invention.” However, in the end the court gave absolutely no weight to that “caution” in its claim interpretation. Rather, the decision notes the distinction between the patent as a whole and the particular asserted claims. In this case, the court noted that other claims are included in the patent and that those may be the ones that cover the preferred embodiment.
This interpretation falls on the heels of the PSN Illinois v. Ivoclar Vivadentholding that sometimes unasserted or cancelled claims directed to a particular disclosed embodiment may actually serve as evidence that the scope of the asserted claims does not extend to that embodiment. PSN Illinois – written by Judge Michel – applies the sensible notion that non-asserted or cancelled claims should be examined to determine if the preferred embodiment is found there. Helmsderfer extends that notion by creating an apparent presumption that – if non-asserted claims exist, then the court need not consider the rule of construction that encourages encompasing preferred embodiments.
Notes:
Preferred Embodiment: Relation to Tafas v. Dudas: Although the patentee lost here, Judge Moore’s decision here creates some interesting support for the Tafas case – by holding that it is the patentee’s right to file alternative claims to cover various parts of the disclosed embodiment.
Drafting Thoughts: Non-numeric range limitations – such as “partially” – have benefits and potential liabilities. When including a limitation of this type, you may do well to consider what prior art you are attempting to avoid — and consequently claim either “at least partially” or “at most partially.”
Tracking Appeals: There is an interesting new patent litigation blog: Patent Appeal Tracker run by Kyle Fleming and Josh Ryland. They are providing a review of various pre-decision appeals.
False Marking: Matthew Pequignot is again a plaintiff in a false marking action under 25 USC 292. He has now teamed with two plaintiffs firms and filed suit in the Eastern District of Texas against Gillette and its parent company P&G. The complaint specifies 683 counts of false marking and requests the maximum $500 per “offense.” The falsity of the marking appears to be generally summarized as either (1) marking products with expired patent numbers and (2) marking products with patents whose scope do not cover the products. On the second point, some of the counts allege that the defendants marked products with patents covering a method of manufacture when the product was not manufactured according to the patent. [LINK]
False Marking Comment: There are three primary reasons to mark products with the associated patent number. (1) Legally, marking provides evidence of constructive knowledge that can increase a patentee’s damages. (2) Apart from the damage issue, the patent can also serve as at least a low-level deterrent to chill would be competitors. It will at least cost several thousand dollars to hire a patent attorney to figure out if the patents are expired. (3) Finally, the patent provides additional market credibility to customers (and perhaps investors). Continued listing of an expired patent would continue to benefit the manufacturer in the last two points — and consequently help the manufacturer maintain its market position. The key point of contention will be whether the listings were made “for the purpose of deceiving the public” as required by the statute.
Moving Forward on False Marking: If this type of litigation continues to grow, in house counsel should consider creating a system for ensuring that expired and invalid patents are no longer marked on company products. A system — even if a bit leaky — will likely serve as a good defense against false marking charges because they provide evidence of a lack of intent to deceive the public.
Through its attorneys Microsoft requested ex parte reexamination almost thirty Avistar patents. In recent days, the PTO denied Microsoft’s request in 14 of those cases.
Standing alone, this denial does not appear to be big news — except for the fact that over 95% of requests for ex parte reexamination are granted. In FY 2003–07, for instance, the PTO reviewed 2389 requests for ex parte reexamination and only denied the request in 105 cases. (4.4%). (At this point, there is some possibility that the denials are procedural as the documents are not yet available on PAIR).
To be granted, a reexamination request must present a “substantial new question of patentability” that affects at least one claim of a patent. The request must be based on a prior art patent or publication. Prior public use or sale are not admissible as evidence in an ex parte reexamination proceeding (although affidavits explaining the prior art publications is admissible).
In general, there has been a rise in requests for ex parte reexamination. As the chart below demonstrates, increase is entirely due to an increase in requests for reexamination that are filed by third parties.
Mars, Inc. v. Coin Acceptors, Inc. (CoinCo) (Fed. Cir. 2008)
Way back in 1990, Mars sued CoinCo for patent infringement — asserting two patents covering technology for authenticating coins inserted into a vending machine. Eighteen years later, the parties are still battling over damages.
Lost Profits: In this decision, the CAFC affirmed that the Mars corporate structure (designed to avoid certain taxes) eliminated the company’s ability to recover damages under a “lost profits” theory. Usually, lost profits are only available when a patentee is a market competitor. Mars itself has never made vending machine coin changers. However, its wholly owned subsidiary, MEI, did operate vending machines and licensed the patents on a non-exclusive per-use basis. Although it was a wholly owned subsidiary, the court found that MEI’s provable lost profits due to the CoinCo infringement did not translate to lost profits for the patentee itself (Mars). Of particular importance was the license structure between MEI and Mars that called for a straight per use license rather than a license based on a measure of profits. Rather, lost profits require a showing that the patent holder itself had lost profits.
This decision can be seen as a continuation of the 2004 Poly-America case where the court held that the patentee could not recover lost profits for damages felt by a sister corporation. Lost profits damages are usually preferred to damages calculated as a reasonable royalty because the lost profit calculation typically results in a larger number.
Standing: The court also ruled on standing issues. (1) Prior to 1996, MEI had no standing to sue for itself because it was only a non-exclusive licensee. (2) In 1996 Mars transferred ownership to MEI — thus, at that point Mars had no standing to sue for any subsequent infringement.
Curing standing: In patent cases, standing is typically determined at the point that a claim is filed. Here, we have a seeming loss of standing. In the 2005 Schreiber decision, the CAFC held that a “temporary loss of standing during patent litigation can be cured before judgment.” Despite a half-hearted attempt, the court found that Mars had not properly cured its standing because MEI did not transfer complete ownership back to Mars.
Federal Circuit Judge Randall Rader has been sitting by designation as a district court judge in the Northern District of New York. His case is an epic patent battle between Cornell University and Hewlett-Packard (HP), and the jury trial recently concluded with an $184 million calculated as 0.8% of HP’s $23 Billion in sales.
The patent — No. 4,807,115 — issued in 1989 and expired during the seven years of litigation. It is directed toward an internal computer messaging mechanism that boosts the function of multi-processor computers.
Interestingly, Cornell and HP had discussed a licensing agreement as early as 1988 (even before the patent issued). In 1997, Intel licensed the ‘115 patent for use in its Pentium Pro chips.
Unpublished Thesis: In a pre-trial decision, Judge Rader denied Cornell’s motion in limine and allowed HP to show the jury an unpublished masters degree thesis as 102(b) prior art. The court found the thesis publicly accessible because the thesis had been cited in a later article that was in the same area of technology as the issued patent (analogous art.).
“After weighing all the circumstances of accessibility, this court views as vitally important the citation of this scholarly work in the Tjaden-Flynn article.”
Inventor Rewards: Unlike most companies, universities generally offer a percentage royalty cut for its employee-inventors. Professor Torng, the inventor of the ‘115 patent, will reportedly receive 25% of the award (if it is ever paid). Torng has announced that he’ll only keep a few million and donate the rest (perhaps over $30 million) to charity.
The post-trial decisions and eventual appeal should be interesting.
When an issued utility patent claims priority to a provisional patent application, is there a presumption that the claimed invention is supported by the provisional?
What is wrong with filing claims in a provisional application?
Sitting by Designation: The CAFC has continued to offer district court judges from across the country the opportunity to sit on the appellate bench for a day. On June 3, 2008, Judge Ward from the Eastern District of Texas filled out a panel with Judges Newman and Gajarsa. They will be deciding three patent cases: Hyatt v. Dudas (waiver of arguments before the BPAI); Atlanta Pharma v. Teva (appeal from denial of preliminary injunction to stop teva from selling a generic version of the ulcer med Protonix); and D Beam v. Roller Derby.
New USPTO Fees: They are going up, but you can put in your two cents by July 3. [New Fees][Contact Walter.Schlueter@uspto.gov. Include RIN number RIN 0651–AC21 in the subject line.]
FTC Commissioner Rosch recently spoke about patents and antitrust. He believes that the FTC Act, the Clayton Act and the Sherman Act all create “viable enforcement tools” against companies that create “patent walls” — especially when they acquire those patents from third parties. The FTC is currently going after N-Data in a case where the patent covers an ethernet standard. [N-Data][Zura’s Comments] Three important cases on this issue:
US v. Singer Mfg (Antitrust violation to charge competitors with patent infringement after U.S. company obtained patent from Swiss company)
Kobe v. Dempsey Pump (obtaining and using “every important patent” in the field in order to exclude competition, together with other anticompetitive activity, constitutes an antitrust violation)
Case of Xerox Corp (settlement consent decree where FTC challenged Xerox’s purchase of additional plain paper copier patents).
Pre-Purchase Review: There is some room to debate here on the question of organic-patenting (patents on inventions via the company’s own R&D) versus acquisitional-patenting (buying up patents invented by others). At the firm level, acquisitional growth is typically reviewed much more harshly for potential antitrust violations than is organic growth. Is the FTC/DOJ headed toward a system of pre-purchase review of major patent acquisitions in the same way that the agencies conduct pre-merger reviews?
As part of the 1995 patent law overhaul, the USPTO began allowing patent applicants to file provisional patent applications.Over a decade later, these lower-cost provisional filings have taken hold.According to PTO annual reports, over 132,000 provisional patent applications were filed in fiscal year 2007. In perspective, that number is over 30% of the number of the 439,000 non-provisional utility patents filed during the same period. This proportion has been slowly rising since 2002 when the provisional applications filing rate was about 27% of the non-provisional rate.[1] That year (2002), the PTO recorded just under 90,000 provisional applications and 332,000 non-provisional patent applications.
Interestingly, in my study of recently issued patents, only 21% reference a provisional application as a parent. (In the study, I look at approximately 15,000 utility patents issued in April and May 2008.) [2]
National Tool: Over half of the recently issued patents that listed an assignee indicated that the assignee was a foreign (non-U.S.) corporation or agency.[4]Although foreign entities are not prohibited from filing provisional applications, the provisional tool was designed to benefit U.S. entities. Thus, it is not a surprise that only 5% of the patents assigned to international applicants were associated with a provisional application while 30% of the patents assigned to a U.S. applicant were associated with a provisional application.Two countries – Israel and Canada – stood out as filing the highest proportion of provisional parent claims. Both of these countries are known for having patent attorneys with a high level of familiarity with U.S. laws.Only 2% of the Japanese & Korean patents included provisional parent claims. [Updated June 03 with Corrected Figure]
The provisional application provides a potential extra year of patent eligibility at the end of the term.Thus, it is also not surprising that new drug inventions – where a potential year at the end of the term is most valuable – have the highest rate of association with a provisional application.[5]Likewise, patents on electrical and electronic applications had the lowest rate of provisional filing even after excluding the international applications.
The provisional filings appeared to have almost no impact on the pendency time of a patent application as measured by the number of days from filing the nonprovisional to issuance.This makes sense as no examination takes place until the nonprovisional application is filed.
The following table also provides some interesting comparisons of patent strategy.[6]
Type of Technology< ?xml:namespace prefix ="" o />
[1] This information comes from PTO annual reports for FY 2006 and 2007.
[2] These patents were downloaded on May 30. I excluded the few patents filed prior to the 1995 introduction of provisional patent applications.
[3] In a follow-on study, I will look at published patent applications claiming priority to provisional applications to get some sense of how often folks abandon provisional patent applications.
[4] 6823 were assigned to foreign entity while 6457 were assigned to a U.S. entity. Another 1922 had no listed assignee.
[5] My study included 677 patents having a primary U.S. Classification in a “drug” field and also assigned to a U.S. entity. Of those, 48% were associated with a provisional application.
[6] Note, my assignee ‘scrubber’ is not yet perfect. Thus, it is likely that some patents associated with listed assignees are not included in the table.
[7] Some companies, such as GE hold patents in several different categories – this table looks only at those patents in the particular identified category.
Congratulations to Ryan Swarts! Mr. Swarts was my student in eCommerce Law and has been in charge of the successful Patently-O Job board for the past year … all while running his own company. Ryan recently graduated from MU Law and is now looking to specialize in trademark and copyright law, especially relating to the Internet. Now that he’s a free agent — feel free to contact him directly. [Ryan’s Resume][Contact Ryan].
June 25–29: The FCBA’s Bench & Bar Conference will be in Silicon Valley area (Monterey) for the first time. Speakers are primarily judges and in-house counsel. [LINK].
Such As: Contract Specialist Kenneth Adams discusses the recent decision in Lawler Mfg. v. Bradley Corp. and the use of “such as” in contract formation. [LINK][Patently-O discussion of Lawler].
Design Patent “Town Hall Meeting” at the Patent Office June 16, 2008. The current debate is primarily over whether auto parts should be protectable under design patent law. Insurance companies and others argue that design patents unduly raise the cost of repair. File Attachment: design_town_hall.pdf (116 KB).
Design Patent Top Ten: Top Ten Receipients of US Design Patents in 2007.
Patent Attorney Jeff Spangler recently attended the PTO’s business method partnership where he received a copy of the written clarification given to examiners to help them determine when a claimed business method is eligible for patent protection as a statutory process under 35 USC 101. According to the memo:
“Based on Supreme Court precedent and recent Federal Circuit decisions, the Offic’s guidance to examiners is that a Section 101 process must (1) be tied to another statutory class (such as a particular apparatus) or (2) transform underlying subject matter (such as an article or material) to adifferent thing. If neither of these requirements is met by the claim, the method is not a patent eligible process under Section 101 and should be rejected as being directed to non-statutory subject matter.
An example of a method claim that would not qualify as a statutory process would be a claim that recited purely mental steps. Thus, to qualify as a Section 101 statutory process, the claim should positively recite the other statutory class (the thing or product) to which it is tied, for example, by identifying the apparatus that accomplishes the method steps, or positively recite the subject matter being transformed, for example by identifying the material that is being changed to a different state.
Design Patents En Banc: On June 2, the CAFC is hearing the en banc Egyptian Goddesscase to consider the proper method for determining infringement of a design patent. That afternoon, the FCBA is hosting a post-argument discussion with a panel including attorneys for the parties as well as as several amicus. Participate either live or via Webex.
Cat sued TubeMaster — alleging infringement of its patent covering a method of using a catalyst loading devices to simultaneously load thousands of tube reactors. Cat’s infringement allegations were focused on one particular TubeMaster commercial configuration. During the litigation, TubeMaster filed a counterclaim for declaratory relief that its other three configurations did not infringe. On appeal, the CAFC first looked to see whether the district court had proper jurisdiction over the declaratory relief counterclaims.
In MedImmune, the Supreme Court rejected the Federal Circuit’s “rigid” two prong test for DJ jurisdiction that required that the DJ plaintiff (1) have a reasonable apprehension that the patentee will file suit and (2) conduct “meaningful preparation” to conduct potentially infringing activity. The MedImmune decision eliminated the first prong — finding the that the “reasonable apprehension” test excluded at least some actual “cases and controversies” under Article III of the U.S. Constitution.
New Multi-Factor Test for Declaratory Judgment Jurisdiction: In Cat Tech, the Federal Circuit found that the second prong of “meaningful preparation” is still intact — at least as a factor working to determine whether a dispute is immedate and real.
“[T]he issue of whether there has been meaningful preparation to conduct potentially infringing activity remains an important element in the totality of circumstances which must be considered in determining whether a declaratory judgment is appropriate. . . . If a declaratory judgment plaintiff has not taken significant, concrete steps to conduct infringing activity, the dispute is neither ‘immediate’ nor ‘real’ and the requirements for justiciability have not been met.”
From this decision by Judge Mayer, it appears that the new test for DJ jurisdiction has moved from two prongs to a broader “totality of the circumstances” under the umbrella of a “fundamental inquiry” of “whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” (quoting MedImmune). Meaningful preparation toward potential infringing activity is important (but perhaps not a required element) in this fundamental inquiry because actual steps taken toward infringement are indicators of both “immediacy and reality.”
On the facts of this case, the CAFC found “meaningful preparation” toward each product was sufficiently shown by “AutoCAD drawings for each of its four configurations”; successful manufacture of one of the configurations; being ready to deliver products under any configuration “within a normal delivery schedule” after receiving an order; and because the company “does not expect to make substantial modifications to its loading device designs once production begins.”
Finally, although also a factor in the analysis, the fact that TubeMaster had not created any sales literature or begun advertising its alternate configurations did not negate the immediacy and reality of the controversy.
Lawler Mfg. v. Bradley Corp. (Fed. Cir. 2008)(nonprecedential)
In 2001, Lawler and Bradley settled a patent infringement lawsuit and entered into a contractual license agreement. Bradley was given the right to practice Lawler’s plumbing valve patents in exchange for a 10% royalty. The license included a combination royalty provision. The royalty licensed parts sold in combination would be charged at a separate (likely lower) royalty rate.
The dispute on appeal was whether a set of example combinations included in the contract limited the “combination” royalty rate to only a limited set. The particular contract provision read as follows:
“If a Licensed Unit is invoiced or shipped in combination in another product such as an emergency shower or eyewash, [then the combination rate applies.]”
De Novo Construction: Looking much like a claim construction opinion, the CAFC reviewed the contract language de novo (following Indiana law) and reversed the lower court interpretation. In particular, the court found that the “such as” language of the contract limited the combination royalty to only a limited set of combinations. The CAFC found its interpretation necessary to give meaning to the such as clause. As with Federal Circuit claim construction law, Indiana contract law has a preference for giving meaning and effect to all written terms.
“The question before us is whether that term, read in the context of the agreement, is restrictive, as Lawler urges, or merely explanatory, as the court found. We find that it is restrictive. “Such as” refers to items similar to what are recited rather than indicating that the recited items are just examples of what is covered by that provision. . . . The parties’ inclusion of the “such as” phrase … must either have been intended to provide some guidance as to the limited types of combinations that the parties contemplated … or to provide meaningless surplusage. Indiana law constrains us from finding the latter.”
Reversed and remanded.
In dissent, Judge Mayer saw the “such as” language as merely providing examples in much the same way that embodiments provide example implementations of an invention. “[E]mergency eyewashes and showers are examples of combination products, but they are not the only combination products covered by section 3.1 of the licensing agreement.”
In some ways, the Supreme Court case of Quanta v. LGE is a symbol of the ongoing struggle between property law and contract law. With concepts like the first sale doctrine (and the rule against perpetuities), property law has typically operated to limit dead hand and downstream control over property rights. These limiting doctrines are largely ignored in a freedom of contract regime.
A federal copyright case last week landed on the side of property & the first sale doctrine. The court denied summary judgment to Autodesk — finding instead that Vernor may well have a legitimate right to re-sell his copies of AutoCAD. Autodesk argues that he only holds a contractual license to use the software (via shrink-wrap license) and does not actually hold full property interests in the programs.
“[T]he transfer of AutoCAD packages from Autodesk to CTA was a sale with contractual restrictions on use and transfer of the software. Mr. Vernor may thus invoke the first sale doctrine, and his resale of the AutoCAD packages is not a copyright violation.”
In copyright law, the first sale doctrine is codified in statute — allowing the owner of a particular copy to resell that copy even if the owner had contractually agreed not to do so.
“[T]he owner of a particular copy or phonorecord lawfully made under this title … is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.” 17 USC 109.
In patent law, the first sale doctrine – also known as patent exhaustion – has no statutory support. Rather, like the doctrine of equivalents, patent exhaustion is grounded in common law principles. The Quanta case is fairly technical and could result in a narrow low-impact opinion. However, it is also quite possible that the Supreme Court will re-solidify the property concepts. Expect a decision within the next few weeks.
Comment on Chain of Title: M. Slonecker: “For the sake of factual accuracy, AutoDesk “sold” the software to CTA. At a later date CTA auctioned off its assets, and Mr. Vernor was the winning bidder for the software program discs. With copies in hand, Mr. Vernor placed the discs he purchased at the auction on sale at eBay. Apparently AutoDesk is not pleased with this state of affairs and has been engaged in a running battle with Mr. Vernor about his eBay activities.”
Rattler Tools v. Bilco Tools (Fed. Cir. 2008) (nonprecedential)
Rattler sued Bilco in the Eastern District of Louisiana — alleging that Bilco’s magnetic scrapper (used to clean out oil wells) infringed several patents. After a bench trial, the district court found the patents completely non-infringed. In particular,the district court held that the “accused products and methods did not meet any of the thirteen limitations ofthe ten asserted claims.”
Rattler appealed — asking for a new claim construction for each of those thirteen limitations. Without any detail analysis, the CAFC politely showed Rattler the door. “We have considered all of Rattler’s arguments. Having done so, we see no reason to disturb the careful and thorough post-trial decision of the district court.”
This case is unremarkable in its short analysis, but does serve as a reminder of the current state of patent appeals. The conventional wisdom that the CAFC re-writes a large percentage of claim construction decisions leads most losing parties to appeal on claim construction. At the same time, appellants are also including more claim construction arguments in each appeal.
Helmsderfer v. Bobrick Washroom Equipment (
Tracking Appeals: There is an interesting new patent litigation blog: 
Through its attorneys Microsoft requested ex parte reexamination almost thirty Avistar patents. In recent days, the PTO denied Microsoft’s request in 14 of those cases. 
Federal Circuit Judge Randall Rader has been sitting by designation as a district court judge in the Northern District of New York. His case is an epic patent battle between Cornell University and Hewlett-Packard (HP), and the jury trial recently concluded with an $184 million calculated as 0.8% of HP’s $23 Billion in sales. 
Cat Tech LLC v. TubeMaster, Inc. (
Lawler Mfg. v. Bradley Corp. (
In some ways, the Supreme Court case of Quanta v. LGE is a symbol of the ongoing struggle between property law and contract law. With concepts like the first sale doctrine (and the rule against perpetuities), property law has typically operated to limit dead hand and downstream control over property rights. These limiting doctrines are largely ignored in a freedom of contract regime. 
