freePat: Canadian patent attorney Peter Eliopoulos has written a bit of desktop software that allows you to download PDF patent documents. The software is free and each download is free — no money changes hand.
Catch: The only problem is that the software is only in Version 0.6. I.e., beta. Peter has written a great tool — someone should take Peter’s code and build a nice GUI around it.
Capo v. Dioptics (Fed. Cir. 2004).
Background
Dioptics produces “wear-over” sunglasses that are adapted to fit over or clip onto eyeglasses. Capo is a wholesale marketer of sunglasses. Prior to suit, the president of Dioptics (Henry Lane) called the president of Capo (Mark Ascik):
Lane left a voice mail message stating that if he did not hear promptly from Ascik, he would have to “presume that you are just ducking and racing forward to infringement;” Lane cautioned Ascik about “charging down a path here that’s going to end up into a multi-million dollar lawsuit.” Ascik then phoned Lane, and Ascik’s affidavit states that Lane said that Dioptics had thirteen United States patents and would soon have forty, and that these patents covered all of the basic wear-over sunglass frame shapes. Lane said that Dioptics would have no choice but to defend its patents against infringement, and that he was sure he would win an infringement suit.
After the conversations, Capo filed a declaratory judgment complaint, asking for a preemptive noninfringement holding. Dioptics moved for dismissal of the declaratory action, on the ground that Dioptics could not have threatened suit because no one at Dioptics had seen Capo’s product or analyzed it for infringement.
The district court dismissed the declaratory action, finding that the dispute was not “sufficiently crystallized” for declaratory action. On appeal, the Federal Circuit reversed:
Objective Apprehension Of Being Sued Sufficient For Declaratory Judgment Action.
Dioptics’ argument that it could not have ethically filed suit at that time may be relevant to whether Dioptics acted responsibly, but it is irrelevant to whether the patentee’s threats of suit instilled a reasonable apprehension of suit. Although Dioptics now characterizes Lane’s words as “cursory,” the record well supports the conclusion that Capo had the objectively reasonable apprehension that it would be sued by Dioptics for patent infringement. This objective apprehension was deliberately and intentionally created by the president of Dioptics. It is irrelevant whether Dioptics had adequately investigated the basis of its threats, if they created the requisite objective apprehension. . . . We conclude that the district court clearly erred in declining to find that Capo had a reasonable apprehension of suit.
Failure to Raise Counterclaims Does Not Warrant Dismissal.
The district court gave weight to Dioptics failure or refusal to make compulsory counterclaims for infringement. The Appellate Court found that Dioptics’ waiver of the claims should not add any weight to the argument for dismissal.
The Existence of Pending Patent Applications Does Not Justify Dismissal.
The district court also gave weight to Dioptics’ argument that it had pending patent applications that upon issuance would strengthen its case for infringement. The Appeals Court disagreed with this finding:
Capo is entitled to resolution of the infringement accusations already made, for the patents that already exist. The possibility of future patents is irrelevant to present rights and liability.
Conclusion
Resolution of this dispute is within the court’s capability, and it is the district court’s responsibility to resolve it. Declining to do so is an abuse of discretion.
We conclude that the dismissal was improperly granted. The dismissal is vacated, and the case is remanded for further proceedings.
You will not be surprised to learn that Randy Flann, the inventor of Patent No. 5,966,743 is from Milwaukee, Wisconsin. In fact, you can buy real gear from Randy at his website www.rofoheadgear.com. The working old world barrel headgear runs just under $30.
Thanks to Mark Chael for the link.
Today, the Federal Circuit, without opinion, denied several petitions for rehearing en banc:
Earlier this week, the CAFC denied petitions for en banc rehearings in Monsanto v. Ralph and International Rectifier v. IXYS.
Barring an appeal to the United States Supreme Court, the holdings on appeal represent the final rule of law.
City of Hope v. Genentech (Cal. App. 2004) (B161549).
Decision: A California state appellate court has upheld a $500 million verdict against Genentech for back payment of royalties on drug sales from a 1976 agreement with City of Hope National Medical Center. The court found that Genentech breached a fiduciary duty to City of Hope.
Genentech does not dispute that it failed to disclose various licenses and pay royalties on those licenses. Rather, it contends that it did not breach any fiduciary duty so long as it was adhering to an erroneous but legally tenable interpretation of the agreement. In essence, Genentech would have us hold that even if it followed an interpretation it knew was contrary to what the parties intended and agreed upon, it could not be held liable so long as that interpretation was objectively sustainable under the law. . . . None of [the cases cited by Genentech] allows a party to profit from a legally tenable contract interpretation when the party knows that the agreement has a wholly different meaning. In any event, it would be antithetical to the very nature of the obligations imposed on fiduciaries for us to hold that a fiduciary could act in the manner suggested by Genentech.
To the extent Genentech contends that its interpretation of the agreement was held in good faith, that contention fails. The jury’s finding of fraud or malice demonstrates that it believed that Genentech acted in bad faith. That finding . . . is supported by substantial evidence and is sufficient for concluding that Genentech breached its fiduciary duty.
According to a California based patent attorney, several amici curiae — including Intel Corp., TechNet and the California Chamber of Commerce — pleaded with the court to reverse the judgment, saying that imposing fiduciary status as a cost of using third-party intellectual property would impede innovation. Genentech has announced its plans to appeal the decision to the California Supreme Court.
About the Case: In 1978, City of Hope biologists Arthur Riggs and Keiichi Itakura developed a technique for splicing into a bacteria gene the DNA for human insulin, which became the world’s first biotechnology drug. Genentech agreed to pay City of Hope 2% on net sales of products that were tied to the DNA provided by the cancer center. (see Patent No. 4,704,362). Royalties had been paid for sales of insulin and on sales growth hormone products, but the cancer center is asking for royalties on products made under 20 other license agreements.
Hal Wegner recently reviewed the House of Lords case of Kirin-Amgen v. Hoechst Marion. This case presented the first opportunity for the British high court to interpret the “new” patent law (introduced a quarter-century ago).
According to Hal, the court “held that the ‘purposive construction’ test for determination of patent scope should be maintained and is consistent with the European Patent Convention. The doctrine of equivalents as an alternative test is expressly repudiated.”
There will be occasions upon which it will be obvious to the skilled man that the patentee must in some respect have departed from conventional use of language or included in his description of the invention some element which he did not mean to be essential. But one would not expect that to happen very often.
In rejecting the American style doctrine of equivalents, the Lord Hoffman noted that:
I cannot say that I am sorry [that our precedent is antithetical to a doctrine of equivalents] because the Festo litigation suggests, with all respect to the courts of the United States, that American patent litigants pay dearly for results which are no more just or predictable than could be achieved by simply reading the claims.
In January 2002, the PTO initiated an advertising campaign to warn the public of invention promotion scams. In a press release describing the campaign, the PTO noted that the agency’s advertisements would feature “an actual inventor, Edward Lewis, who lost several thousand dollars.” In the advertisements, Lewis described how he had spent $13,000 dollars on the services of an invention promotion company but “ha[d]n’t seen a penny.” The advertisements did not accuse any particular promotion company of engaging in scams, nor did they identify the company to which Lewis referred.
A news organization then published a story on the Invention Submission Corporation, noting that Lewis had filed a complaint against ISC and how the FTC had investigated the ISC for “misrepresentation in patent marking schemes.”
The Invention Submission Corporation then sued the PTO under the Administrative Procedure Act (APA) alleging that the PTO’s advertisements exceeded its statutory authority and were done in order to penalize ISC.
Both the district court and 4th Circuit Court of Appeals dismissed ISC’s claims, noting that the PTO’s ad campaign was not a “final decision” as required for jurisdiction under the APA.
Now, ISC has petitioned the Supreme Court of the United States for a hearing on the case. ISC argues that the the PTO’s actions constitute a sanction against the company, and is therefore reviewable under the APA.
The government brief in opposition to the petition is available here. The briefs have been distributed for conference scheduled for October 29.
In re DSS Environmental (Fed. Cir. 2004) (unpublished).
The USPTO refused to register DSS’s trademark DUALSAND on the grounds that the term is merely descriptive.
Under 15 USC 1052(e)(1), the PTO may refuse to register a mark if the mark, “when used on or in connection with the goods of the applicant,” is “merely descriptive” of the applicant’s goods.
The Federal Circuit agreed with the PTO, concluding that the PTO’s decision was supported by substantial evidence.
Interestingly, the Appellate Panel supported the PTO’s reliance on articles from the Internet.
DSS argues that the articles in the record lack credibility because their source was the Internet. However, the examining attorney was not relying on the articles for their accuracy, but merely to ascertain how the term “dual sand” is used in the context of water wastewater filtration. In making such a determination, the examining attorney may obtain evidence from “any competent source, such as dictionaries, newspapers, or surveys.” . . . The Internet articles in this case, including on-line copies of newspaper articles, fully satisfy that requirement.
Refusal to register mark affirmed.
Bernhardt v. Collezione Europa (Fed. Cir. 2004) (04-1024).
Bernhardt sued low cost furniture dealer Collezione for infringement of six design patents. The district court, however, held that several of patents were invalid under 102(b) for prior public use. Specifically, the court found that Bernhardt’s disclosure of the designs at a Pre-Market exhibition rendered the patents invalid. In addition, the court found that Collezione’s products did not infringe the patents.
On appeal, the Federal Circuit vacated and remanded:
I. Public use analysis for a design patent requires substantially similar appearance in the eyes of ordinary user as compared to the claimed designs or their points of novelty.
While the court concluded that each of Bernhardt’s furniture pieces … were “similar to” the furniture design “shown in” each of Bernhard’s design patents, the analysis does not discuss or explain whether the furniture designs actually displayed at Pre-Market were substantially similar in appearance in the eyes of an ordinary observer to the claimed designs or appropriated the points of novelty of the patented designs. Only after making these determinations could the district court properly assess whether an invalidating public use within the scope of § 102(b) had occurred.
II. Witness testimony is not required to establish infringement of design patent.
The court apparently did not consider the evidence actually introduced—the design patents, their prosecution histories, and the cited prior art—from which Bernhardt’s proposed points of novelty and contentions regarding how Collezione’s accused designs appropriated Bernhardt’s proposed points of novelty might have been discerned. Because the district court incorrectly required Bernhardt to explain its points of novelty through the testimony of a witness, and concluded, based on the absence of such testimony, that Bernhardt failed to prove that Collezione had appropriated the novel ornamental features of the patents-in-suit, we vacate the district court’s judgement of non-infringement, and remand the infringement issue to the district court for further proceedings consistent with this opinion.
Kim v. Dawn Food Products, Inc. (N.D. Ill. October 12, 2004) (10 C 1906).
Historically, potassium bromate has been used in bread-making. However, the substance causes cancer in laboratory animals. As a substitute, Yoon Kim invented a potassium bromate replacer that includes ascorbic acid to act as an oxidant. (RE 36,355).
Kim sued Dawn Foods in the Northern District of Illinois, alleging that defendants doughnut mix infringed the patent. After construing the terms, the court found that Dawn Foods’ products clearly did not infringe.
Interestingly, Kim’s case may have been hurt most by her rapid succession of representation.
Attorneys for Lord, Bissell & Brook, LLP filed a notice of appearance in this Court to represent Kim on April 30, 2003. On February 12, 2004, Kim requested that the Court grant the Lord, Bissell, & Brook, LLP attorneys’ motion to withdraw in light of “irreconcilable differences concerning the future handling of the above-captioned case.” Two months later, attorneys for Ryndak & Suri filed a notice of appearance in this Court to represent Kim. On July 23, 2004, Kim requested that the Court grant Ryndak & Suri attorneys’ motion to withdraw, citing “conflicts between attorneys and the plaintiff.”
USPTO Director Jon Dudas recently gave a stirring speech at the AIPLA annual meeting in Washington DC. Here is the money quote:
[M]y charge is very clear, the charge of the USPTO is very clear. We are resolved to protect your intellectual property rights. Internationally, we are resolved to protect your rights in the treaties we debate, the enforcement measures that we promote, and the Free Trade Agreements that we negotiate. Domestically, we are resolved to protect your intellectual property rights through administration policy and, perhaps most importantly, by ensuring that you have the highest-quality patents and trademarks in the shortest time possible, in short, to give you the certainty and the quality that you need and deserve.
Link: Yesterday, we reported on how Patent Law is likely to shape the debate on drug importation from Canada and other countries. Now, the AP is reporting that a coalition of Canadian groups is beginning to pressure the government there to ban prescription drug exports. The coalition argues that the rise in exports is likely to lead to shortages and price hikes in Canada.
Here in Illinois, Governor Rod Blagojevich has been a strong advocate of legalizing imported drugs. (Link).
Canada may also be able to share its surplus flu vaccine with the U.S. (Link).
In a recent paper, Penn State Professor Daniel Cahoy analyzed the importation of inexpensive drugs from Canada and other countries. His research looked at potential liability for patent infringement by various levels of government. Cahoy arrived at several conclusions:
Cahoy, Daniel R., “Patent Fences and Constitutional Fence Posts: Property Barriers to Pharmaceutical Importation” . Fordham Intellectual Property, Media & Entertainment Law Journal, Vol. 15, Winter 2005. http://ssrn.com/abstract=603121
Note: Under U.S. Law, the first sale (AKA “Exhaustion”) doctrine does not apply to products sold in a foreign country.
United States patent rights are not exhausted by products of foreign provenance. To invoke the protection of the first sale doctrine, the authorized first sale must have occurred under the United States patent.
Jazz Photo v. ITC, 264 F.3d 1094 (Fed. Cir. 2001), cert. denied, 536 U.S. 950 (2002).
If only it were this easy to create inventions that actually work: The Prior-Art-O-Matic.
Link: America was founded as a dissenting opinion in the 18th Century colonial world. Not wishing to be unpatriotic, the Court of Appeals for the Federal Circuit has been on a rampage — issuing dissents with abandon. According to Professor Polk Wagner’s research, the percentage of dissenting or concurring opinions in CAFC cases has risen from under 5% in the late 1990’s to over 25% today. (chart from www.fedcir.org).
Comments: The amount of dissent on the court clearly indicates that the composition of the panel for your case will have a major impact on your outcome. As Stephen Nipper and Hal Wegner have noted, if the composition of the panel was known well in advance of appeal, the resulting certainty would lead to more settlements. Despite any internal conflict within the Federal Circuit, it would be laughable to argue that the law is less settled or less certain than it was prior to the formation of the court.
The recently filed petition in Pellegrini may ultimately decide the damage award in Eolas v. Microsoft. Both cases discuss the international application of U.S. Patent Law, and the requirements of 35 U.S.C. 271(f)(1).
271(f)(1) provides for liability for causing components of a patented invention to be supplied for assembly abroad:
Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer. 35 U.S.C. 271(f)(1).
At the district court level, Eolas won a $500 million verdict for Microsoft’s alleged patent infringement. A portion of the award fell under 271(f). In Eolas, no physical component of the patented invention had shipped from the U.S. However, the District Court ruled that Microsoft’s shipment of information on a “golden master” disk created a sufficient nexus with the U.S. The Eolas case is now on appeal.
Similarly in Pellegrini, no physical components were shipped from the U.S. However, the evidence indicates that the accused infringer made sales and controlled manufacture of components from the U.S. Unlike in Microsoft, the Federal Circuit found no infringement because no physical components of the patented invention were shipped from the U.S.
Now, Pellegrini has asked the Supreme Court to review its case. In addition to solidifying the meaning of the infringement statute, the outcome may also help determine the utimate damages in Eolas.
UPDATE: Professor Joe Miller reminded me of another related case that is pending appeal: AT&T v. Microsoft, (S.D.N.Y. 2004). That case involved another “Golden Master” disk shipped by Microsoft. In AT&T, the court held that object code contained on the disk constituted a component under 271(f) even though the object code on the disk was replicated abroad before being incorporated into the final product.
Professor Polk Wagner has a background in empirical research. Lately, he has been using his statistical tools to help provide a better picture of how the Federal Circuit operates. You can see his work at the “Claim Construction Project.” His site and papers are loaded with information. Perhaps the most fun is the Predictor Tool. By selecting the panel of appellate judges, the tool will predict the panel’s decision methodology.
Link: The American Jobs Creation Act of 2004 is ready for President Bush’s signature. The act may be a boon for patent litigators who work on contingency.
The IRS has previously forced victorious plaintiffs to pay taxes on the entire award, then taxed the attorneys for their contingent fee. In essence, a large chunk of the earnings are double taxed. The Jobs Creation Act of 2004 reportedly eliminates this double taxation — thus increasing the size of the pot to be split between the plaintiff and its attorneys.
On-Line Technologies v. Perkin-Elmer (Fed. Cir. 2004).
On-Line sued Perkin-Elmer for infringement of its patent that provides a method of increasing the light-path in a spectrometer with corrected astigmatism and reduced diffusion. (U.S. Patent No. 5,440,143). After construing the claims, the district court granted summary judgment of noninfringement.
On appeal, On-Line argued that the claims were too narrowly construed, and that the allegedly infringing mirrors having a toroidal surface fall within the claim limitation of a substantially spherical surface. Perkins-Elmer disagreed, noting that On-Line specifically omitted toroidal surfaced mirrors from its claims, and thus “that On-Line had dedicated surfaces of that shape to the public.”
The Federal Circuit agreed with On-Line that toroidal surfaces are covered by the claims.
We reach that conclusion because the specification makes clear that the claim language referring to spherical surfaces with cylindrical components includes toroidal surfaces.
The court vacated and remanded this portion of the district court decision, but affirmed the rest.
Ghaly v. Hasbro – Re-mix
Ghaly has asked the Court of Appeals for the Federal Circuit for a rehearing based on perceived errors in its prior ruling on the case. Rehearings are rarely granted. However, in this case, Ghaly may have a point.
Ghaly’s patent claims an “entry control means” limitation. A major bone of contention is whether the control means is limited to bi-stable switches (Hasbro’s position) or include momentary switches (Ghaly’s position). In its initial decision, the CAFC sided with Hasbro, finding that the disclosure limited the claim to bi-stable switches.
However, Ghaly raises two interesting points in his petition to rehear: 1) In its opinion, the CAFC defined momentary switches to be “like keys on a keyboard [that] revert to their original status the moment a user stops pressing on them.” 2) In the dependent claims, Ghaly disclosed that the “entry control means” could be a “key pad switch.” Ergo, argues Ghaly, a key pad switch is a momentary switch.
Ghaly does not cite any cases directly on point, and thus raises the following legal question:
Should means-plus-function language be interpreted in light of the claims as well as the body of the specification?
Hasbro’s counsel, Tony Sitko disagrees with Ghaly’s interpretation of the case. He noted that “Hasbro thinks that the Court’s opinion speaks for itself, and quite frankly, that the Court got it right.”