Hynix Fails to Beat Rambus on Collateral Estoppel Issue

Patent, Patent Cases 2005

Rambus Hynix Semiconductor v. Rambus (N.D. Cal. 2005).

In an earlier lawsuit against Infineon, a court dismissed Rambus’s patent claims in a bench statement that "I have concluded that [Infineon] has proved, by clear and convincing evidence, a spoilation that warrants dismissal of [the patent infringement case] as the only appropriate sanction after having considered the alternatives."  However, the case settled before the judge issued a written opinion.

Now, Hynix argues that Rambus should be collaterally estopped from re-asserting the spoilage issue.  The N.D. Cal. disagreed with Hynix, finding that the elements for a finding of collateral estoppel were not met.

In the 9th Circuit, a party asserting collateral estoppel must show four elements:

  1. Full and fair opportunity to litigate in the previous action;
  2. Issue was actually litigated in that action;
  3. Issue was lost in a final judgment; and
  4. The person against whom collateral estoppel is asserted in the present action is in privity with the party from the previous action.

Using these elements, the court found (i) that the issue of spoilage (unclean hands) is particular to each litigation and thus had not been litigated in the Infineon case; and (ii) that the Infineon court’s statements from the bench did not constitute a "final judgment" because they were not "sufficiently firm."

While there is no question that Judge Payne was sufficiently settled in his decision that he was willing to dismiss Rambus’s patent claims at the conclusion of the evidentiary hearing on spoliation, he never issued a reasoned opinion, either written or oral, explaining his ruling. Before Judge Payne could issue such a ruling, Infineon and Rambus settled the action between them, stipulating to a dismissal with prejudice.

Seemingly to protect against the CAFC’s veto power, the opinion noted that even if all the elements of collateral estoppel were met, the court would use its discretion to deny the motion because such offensive uses of collateral estoppel are disfavored.

Hynix’s motion to dismiss Rambus’s patent claims for unclean hands on the basis of collateral estoppel is denied.

France: Right To Privacy Includes DVD Copying For Personal Use

Patent

Monsieur Stephane P v. Universal Pictures Video France (Court d’Appeal de Paris 2005).

PatentlyOImage031In a move to protect privacy rights, a French Appellate Court has ordered DVD vendors to stop selling copies of the film “Mulholland Drive.”  The court found that copy prevention software on the DVD violated privacy rights of DVD purchasers because it precluded them from transferring the film onto a VHS tape for personal use.

Assistance — Does anyone have an English translation of the case? (crouch@mbhb.com).

Links:

 

PATENT REFORM: Preventing Inequitable Results Under Knorr-Bremse Willfulness

Patent,

This post is part of our continuing series discussing a US House of Representatives working draft of patent legislation, by Marcus Thymian, Jennifer Swartz, and Dennis Crouch.

In the landmark decision of Knorr-Bremse v. Dana Corp., an en banc panel of Federal Circuit judges recently held that no adverse inference is to be drawn from the absence of an opinion of counsel in willfulness determinations.  This ruling overruled the Court’s earlier precedent in Quantum and was a dramatic change.  The proposed legislation attempts to balance this swing in jurisprudence by adding a section on willfulness that incorporates the Knorr-Bremse holding while carving out broad exceptions.  

The proposed changes repeat the Knorr-Bremse holding that “[t]he absence of an opinion of counsel shall not create an inference that the infringement was willful.”  Further, the legislation makes mere knowledge of a patent or its contents insufficient for a finding of willfulness against the defendant.

The legislation diverges from Knorr-Bremse by listing “other factors” that may be considered in increasing damages against an infringer.  Included as one such factor is intentional copying by a defendant who has specific knowledge he is infringing patented subject matter.  However, unlike Knorr-Bremse, the defendant must rebut proof of specific knowledge by proffering evidence of an “informed good faith belief” that the patent is invalid, not infringed, or unenforceable (i.e. an opinion).  Thus, while no adverse inference of willfulness will be drawn in the absence of an opinion under the proposed changes, the defendant will still have the onus to provide an opinion in cases in which the plaintiff proves the defendant’s specific knowledge of infringement.

Finally, the legislation also proposes adding to the statute for increased damages the “factor” of prior litigation between the parties for substantially similar infringement.  Thus, in a later action between parties for colorably similar infringing conduct, willfulness may be based on the knowledge the infringer has maintained since the earlier litigation.< ?xml:namespace prefix ="" o />

Antitrust: FTC confronts decision that liberally allows patent settlements

Patent, Patent Cases 2005

PatentlyOImage030Schering-Plough v. FTC (11th Cir. 2005) (on petition for en banc review).

In a March 8 decision, the 11th Circuit Court of Appeals set aside an FTC order that barred Schering-Plough from settling an infringement suit with generic makers over the patented blood pressure drug K-Dur.  The FTC had concluded that the settlement was an “unreasonable restraint of trade.”  The 11th Circuit disagreed, finding that because the suit involved patented products, neither a per se nor a rule of reason analysis would be appropriate.

By their nature, patents create an environment of exclusion, and consequently, cripple competition. The anticompetitive effect is already present. “What is required here is an analysis of the extent to which antitrust liability might undermine the encouragement of innovation and disclosure, or the extent to which the patent laws prevent antitrust liability for such exclusionary effects.” Therefore, in line with Valley Drug, we think the proper analysis of antitrust liability requires an examination of: (1) the scope of the exclusionary potential of the patent; (2) the extent to which the agreements exceed that scope; and (3) the resulting anticompetitive effects.

Applying their rule to the facts, the Court concluded that payment from a patent holder to a generic competitor cannot be the sole basis of a violation of antitrust law. Accordingly, the court SET ASIDE the decision of the Federal Trade Commission and VACATED its cease and desist order.

Petition en banc: Now, the FTC has filed a petition for rehearing of the case en banc. In the petition, the Commission raises three primary contentions:

  • Not every patent infringement litigation settlement should be shielded from antitrust scrutiny, so long as entry of the allegedly infringing product is not precluded at any time subsequent to expiration of the patent;
  • That the decision subverts the goals of Hatch-Waxman; and
  • That the decision used an improper standard review of critical disputed facts.

If this petition for rehearing fails, the Government is expected to appeal to the Supreme Court.

Links:

2005 USPTO Partnership Meetings Scheduled for May 4, 2005

Conference or CLE, Patent

On Wednesday May 4, the Patent Office is holding a couple of “Customer Partnership Meetings.”  These meetings are designed to provide insight into how the patent office handles patent applications and tend to give some informal insight into peculiarities of particular technology areas. They are also free of charge.

1) Nanotechnology

The PTO has a newly formed Nanotechnology art unit class.  The Wednesday discussion will provide a look at how the new art unit is collecting and searching the prior art.  In addition, an industry panel will give feedback to the PTO and participants.  There will also be time for an open floor discussion.  Although the deadline for signing up for the conference has passed,

there is still some room for those interested.  Contact Jill.Warden@uspto.gov.

2) Business Methods

Because of a popular believe that business method patents are of lower quality, the PTO has instituted a number of initiatives to improve quality in the art unit.  The PTO is focusing on speeding up a process that currently involves long delays.  John Love, director of art unit handling business method patents as well as other members of the unit will be available to discuss these issues.  This conference may be full — however Joseph.Thomas@uspto.gov may be able to fit you in.

Note: I’m planning to be at the business methods conference.  I look forward to meeting you there.

How should a future patent attorney choose a law school?

Articles and Publications, Patent

AcademicEggHeadThe new USNews law school rankings have been released.  Everyone knows that the rankings are worthless, but we follow them anyway.  Engineers and scientists usually do pretty well on the LSAT and often end up with the following law school options:  

  • Attend a highly-ranked law school;
  • Attend a lower-ranked law school with a renowned intellectual property program; or
  • Attend a lower-ranked law school as a night student and continue making money during the day.

The name of the law school matters most when you are looking for your first job out of law school.  Many people advise students to attend the highest ranked school where they can gain admittance.  Others would advise you to go to the school that offers the best financial package.  Not many advocate part-time solution — because it is such a hard road to work full-time then attend school four nights a week.  However, some of the most skillful attorneys that I know went through school that way.

What is your advice for hopeful pre-law students? Please leave a comment:

PATENT REFORM: Quick highlights from the Senate hearings.

Patent, Patent Legislation

The Senate Intellectual Property subcommittee held hearings on Monday, April 25, 2005 to discuss patent reform.  Some highlights:

  • Jon Dudas, Director of the Patent Office believes in the goal of “educating the world on the importance of patents.”  I believe that a major part of this should be to restore the mystique of the American inventor/entrepreneur.
  • On behalf of the AIPLA, Michael Kirk shot down BSA proposals to limit the availability of injunctive relief and the size of damage awards.  Kirk also mentioned that Congress should consider repealing 35 U.S.C. 271(f).
  • David Simon from Intel promoted changes to the notion of when an injunction should be granted.  In his viewpoint, there should be “a return equitable principles to determine whether an injunction should be granted.”