Tag Archives: Damages

K-Tec v. Vita-Mix: Analogous Art and Willful Infringement

Patent,

By Jason Rantanen

K-Tec, Inc. v. Vita-Mix Corp. (Fed. Cir. 2012) Download 11-1244-1484-1512
Panel: Newman, Lourie (author), Prost

K-TEC and Vita-Mix are manufacturers of high-end blenders.  In the early 2000's, K-Tec developed a blender geometry that reduced the problem of cavitation (the formation of an air-pocket around the spinning blade).  Figure 11 of K-Tec's patent illustrates the concept:

Figure 11

Vita-Mix used K-TEC's five-sided commercial embodiment to design its own upgraded blending jar.  After Vita-Mix released its product, two of K-TEC's patents issue.  Upon being notified of the patents, Vita-Mix redesigned its product in an attempt to design-around the patent claims (which reference "four side walls" and "a fifth truncated wall disposed between two of the four side walls.")  The redesigned Vita-Mix product looked like this:

Vita-Mix
During the patent infringement suit, the district court granted summary judgment of infringement and summary judgment that two prior art references asserted by Vita-Mix were not analogous art.  The remaining issues were tried to a jury, which found in favor of K-TEC on the remaining issues of validity, willfulness, and damages.

Analogous Art: Following KSR v. Teleflex, there was some question as to the strength of the analogous arts doctrine in light of the Court's repudiation of rigid tests in analyzing nonobviousness.  Last year, however, in In re Klein, the Federal Circuit applied a robust analogous art doctrine to limit the scope of prior art that may be considered by the examiner during patent prosecution.  K-TEC v. Vita-Mix indicates that the analogous art test continues to remain alive and well in the infringement context, affirming a grant of summary judgment that the references did not constitute analogous art. 

Vita-Mix argued that the district court should have permitted the jury to consider two non-blender designs that depict five-sided containers.  Design Patent 227,535 ("Grimes") provides an example:

GrimesUnder Federal Circuit precedent, a prior art reference may not be considered in the obviousness analysis unless it is analogous art.  There are two ways to meet this requirement: (1) the reference can be from the same field of endeavor as the claimed invention; or (2) it can be reasonably pertinent to the particular problem with which the inventor is involved.  Here, Vita-Mix did not contend that the container design patents were from the same field of endeavor, and thus the CAFC focused its analysis on the second condition.

In affirming the district court's grant of summary judgment that the two design patents were not analogous art, the CAFC concluded that despite the inventor testifying that he "wanted the resulting jar to fit within K-TEC's existing quiet box, there is no dispute that creating a smaller jar was not the problem he set out to solve because K-TEC's existing jars already fit within the quiet box."  Slip Op. at 16.  (It's unclear from the opinion why needing a smaller jar would caused Grimes to have "commended itself" to an inventor's intention in considering his problem.)  A greater problem was that Vita-Mix's expert report "did not 'explain any rational underpinning for [the inventor] to have consulted non-blending containers or food mixers in order to solve the problems he encountered in designing a new blending container.'"  Slip Op. at 16, quoting the district court's opinion.

Comment: Why, especially in light of KSR v. Teleflex, should the analogous arts analysis have anything to do with what an inventor thought?  Here's how the CAFC is currently articulating the "reasonably pertinent" prong: "A reference is reasonably pertinent if it, as a result of its subject matter, 'logically would have commended itself to an inventor’s attention in considering his problem.'" Slip Op. at 15, quoting Innovention Toys, LLC v. MGA Entm’t, Inc., 637 F.3d 1314, 1321 (Fed. Cir. 2011).  Shouldn't the analysis be based on what a person having ordinary skill in the art would have thought, not an inventor (and especially not "the" inventor)? 

Willful Infringement Treated as a Question for the Jury: For those seeking to prove willful infringement, this is a good case; for those seeking some consistency with previous opinions on the subject, it may be less so.  Following the jury trial, the district court denied Vita-Mix's motion seeking to overturn the finding of willful infringement.  In affirming, the opinion makes no reference to the CAFC's recent instruction that the "objective prong" of the Seagate recklessness analysis is a separate question of law.  Instead, the opinion barely distinguishes the "objective" prong from the "subjective" prong.  Evidence for the "objective" prong:

  • Vita-Mix's noninfringement theory and most of its invalidity theories were properly disposed of on summary judgment;
  • Its remaining theories were "soundly" rejected by the jury;
  • In designing the product illustrated above, Vita-Mix started with a direct copy of K-TEC's five-sided jar (note: the "direct copy" was Vita-Mix's own pre-patent version of K-TEC's commercial embodiment); and
  • Vita-Mix considered other noninfringing designs, but opted to "produce a container that performed in the same way as the [earlier Vita-Mix product] and employ a design that its customers would not be able to distinguish from [Vita-Mix's earlier product]."

The court continued on to state that "similarly, K-TEC presented substantial evidence that Vita-Mix knew of the objectively high risk of infringing K-TEC's valid patents, but decided to proceed anyway,"  Slip Op. at 22, indicating that the preceding factors were the factors relevant to that "objectively high risk."  

Comment: One area where the K-Tec holding is particularly difficult to square with prior precedent is its reliance on copying as part of the "objective" prong of the Seagate analysis.  See DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 567 F.3d 1314 (Fed. Cir. 2009) ("Because we hold that DePuy failed as a matter of law to satisfy Seagate's first prong, we need not address DePuy's arguments concerning “copying” and Medtronic's rebuttal evidence concerning “designing around,” both of which are relevant only to Medtronic's mental state regarding its direct infringement under Seagate's second prong.").  

Apple Escapes Liability for its Cover-Flow & Spotlight OS Features: More on Inducement

Patent

By Dennis Crouch

Mirror Worlds v. Apple (Fed. Cir. 2012)

This is an interesting case to consider in parallel to the recent jury verdict in Apple v. Samsung. In that case, the jury recently found Samsung liable for infringing several Apple patents and awarded the iCompany more than $1 billion in damages. Meanwhile, Samsung has asked the district court to set aside the jury verdict as against the weight of the evidence.

In the present case of Mirror v. Apple, an E.D. Texas jury found Apple liable for infringing several of Mirror's patents and awarded over $600 million in damages. However, on motion from Apple, district court Judge Davis set aside the jury verdict and instead entered a judgment as a matter of law (JMOL) in Apple's favor – concluding that the patentee had failed to provide sufficient evidence of infringement. In a 2-1 decision, the Federal Circuit has affirmed that judgment – agreeing that (despite the jury verdict) "[t]he necessary evidence was not put before the jury to support the verdict of infringement or damages."

In the case, Mirror asserted that the joint operation Apple's Cover Flow GUI (see image below), Time Machine, and Spotlight Search infringes its U.S. Patent Nos. 6,006,227; 6,638,313; and 6,725,427 that cover a GUI implementation of lifestreaming. The inventors listed on these patents are Yale University computer scientists David Gelernter and Eric Freeman and were originally owned by Yale University. Gelernter's 1991 book titled "Mirror Worlds" is the namesake for the company. That book is written largely as a prophesy of what has become the internet as we know it. The original Mirror Worlds company is now defunct, with only its patent enforcement wing moving forward.

090412_1812_AppleEscape1

The federal circuit agreed that Apple avoided several of the patent claims because its mechanism does not include the equivalent of a cursor or pointer as required by the claims.

Inducement – Proving that the underlying steps were performed: Mirror had presented an inducement theory for several clams. Oddly, the majority began its analysis with a statement of the old law: "Inducement of infringement requires that there be a showing of an underlying act of direct infringement." Citing Linear Tech. Corp. v. Impala Linear Corp., 379 F.3d 1311, 1326 (Fed. Cir. 2004) and not citing Akamai.

Mirror's failure on inducement was that it did not present evidence to the jury showing that anyone had actually performed the steps of the patented method. Mirror did provide user manuals that arguably taught its customers how to use the software in an infringing manner. However, inducement requires evidence that the steps were actually performed.

Mirror Worlds cites no trial testimony of customers actually using each step of the method claims or tying together the various manuals, reviews, and surveys as evidence of actual use of the claimed method.

Regarding user manuals, the Federal Circuit has a somewhat nuanced rule when it comes to inducing infringement. If the infringing method is taught in a compact series of instructions then that can be sufficient to infer that the underlying infringement occurred. However, if the infringing use requires users to pick and choose from various instructions spaced throughout the manual, then a patentee must provide more proof that the underlying steps were actually performed. See E-Pass Techs., Inc. v. 3Com Corp., 473 F.3d 1213 (Fed. Cir. 2007).

In this case, the instruction manual was insufficient and Mirror failed to provide any more direct evidence that the underlying steps were performed. Thus, the appellate panel affirmed that Apple could not be held liable for inducing infringement.

Dissinting in part, Judge Prost would have found sufficient evidence that Apple's customers were infringing and that, therefore, Apple induced the infringement.

Famed attorneys David Boies and Bill Lee argued the case for Mirror World and Apple respectively.

Query: Assume for a minute that Mirror could actually prove that Apple's customers are directly infringing one of the asserted patents and that it simply failed to produce the evidence at trial against Apple. Now that they have lost their case against Apple, an important legal question is whether or not the patentee could now bring a lawsuit against Apple customers and/or Apple retailers (such as Amazon or BestBuy)? As Prof Ochoa points out, this issue is whether defensive nonmutual collateral estoppel (AKA Issue Preclusion) would apply.

Apple wins $1.05 billion verdict

Patent

By Dennis Crouch

Apple v. Samsung (N.D.Cal 2012)

The jury must have read my recent post on Monsanto's $1b verdict and wanted to do one better – awarding Apple $1.05 billion in patent infringement damages.

Apple has won its patent case against Samsung and the nine-member jury has awarded $1.05 billion to the iManufacturer. The jury has also rejected Samsung's countersuit – finding the Samsung patents not-infringed.

Samsung's infringement is identified as "willful" – opening the door to potential punitive damages against Samsung. In patent cases, the judge (here, Judge Koh) is given the responsibility of determining whether to award punitive damages based upon a set of factors outlined in the law. In this case, the statute would limit potential patent damages to three-times the damages calculated by the jury. (The trade dress damages are not so limited).

Apple has also asked for an injunction to stop Samsung's ongoing infringement. However, US patent law places the decision on injunctive relief in the hands of the district court judge. The briefing on injunctive relief will take several weeks and Judge Koh has announced a September 20 hearing date. Judges have discretion to grant/deny injunctive relief based upon the four "eBay factors" defined by the US Supreme Court in 2006. When granting injunctive relief, the judge also has discretion to shape the relief as she sees fit. Some courts have issued broad injunctions that essentially say "stop infringing the patent" others issue much more narrow orders directed only toward the particular products that are adjudged to infringe. The reality is that Samsung has been planning for the likelihood of injunctive relief and is surely ready to stop selling any of the infringing products and replace those products with ones that at least have not yet been adjudged as infringing. Apple has another lawsuit pending against Samsung focusing on Samsung's newer handheld devices.

If an injunction is issued, a big question is whether relief will be stayed pending appeal. An adjudged infringer generally has no right to continue infringing while the case is on appeal. However, courts will stay injunctive relief when the stay prevents great potential harm and/or the appellant has a strong case on appeal. Under the Federal Rules of Civil Procedure, Apple will NOT receive the $1 billion damages until after the appeal is complete. However, Samsung would be required to post a "supersedeas bond" that may be to be set by the court, but will certainly be several hundred million dollars. During the appeal or any other delay in payment, the damages will collect interest.

Next Steps: Samsung has two basic shots at overturning the jury verdict. First, the company can file a motion for judgment against the verdict (JNOV) arguing that the jury verdict goes against the weight of the evidence. Although I do not have specific numbers, it is not uncommon for judges to at least partially reject a jury verdict in complex cases such as this. Based upon what I have read of the case, I believe that Judge Koh is unlikely to alter the jury verdict. Anyone researching this point should consider Judge Koh's history of JNOV motions. If Samsung's pleas to the court fail, the company can appeal to the Court of Appeals for the Federal Circuit. In that appeal, the odds are also with Apple. On this note, Samsung has announced that it will follow my strategy outlined above. In a press release, the company wrote "This is not the final word in this case or in battles being waged in courts and tribunals around the world, some of which have already rejected many of Apple's claims."

Notes:

Whitserve v. Computer Packages

Patent,

By Jason Rantanen

Whitserve, LLC v. Computer Packages, Inc. (Fed. Cir. 2012) Download 11-1206-1261
Panel: Prost, Mayer (dissenting), O'Malley (majority author)

Much of this opinion deals with relatively typical appeal issues of infringement, anticipation, and damages.  Two issues are worth highlighting, however.

Prove Every Claim Element: During the district court proceedings, CPi had focused its anticipation case on claim 10 of Patent No. 6,981,007, and the Federal Circuit agreed that claim 10 was indeed anticipated.  However, the CAFC also concluded that CPi had failed to present detailed evidence explaining how each claim element of the remaining claims was discussed in the prior art, and thus affirmed the jury verdict of no anticipation as to those claims.  The moral of this story? In the absence of a stipulation that the validity of all the claims will rise and fall on a representative claim, patent challengers should make sure to present detailed evidence on every element of every claim they are challenging when advancing one claim as a representative claim.  Here, CPi had presented cursory evidence, at best, asking its expert only "are all the elements of those claims disclosed in the Schrader patent?” to which its expert replied “Yes, they are.”

Patentable Subject Matter: Writing in dissent, Judge Mayer would have sua sponte found three of the asserted patents invalid due to lack of patentable subject matter.  "Because the WhitServe patents simply describe a basic and widely-understood concept—that it is useful to provide people with reminders of important due dates and deadlines—and then apply that concept using conventional computer technology and the Internet, they fail to meet section 101’s subject matter eligibility requirements."   Slip Op. at 51.  This issue, in Judge Mayer's view, was appropriate for the court to take up despite not having been specifically raised by the parties on appeal because there were significant changes in the law since the trial court's decision rejecting CPi's section 101 argument, namely, Mayo v. Prometheus, 132 S. Ct. 1289, 1303 (2012). 

Claim 1 of Patent No. 5,895,468, which is representative of these patent claims, is below.

A device for automatically delivering professional services to a client comprising:
a computer;
a database containing a plurality of client reminders, each of the client reminders comprising a date field having a value attributed thereto;
software executing on said computer for automatically querying said database by the values attributed to each client reminder date field to retrieve a client reminder;
software executing on said computer for automatically generating a client response form based on the retrieved client reminder;
a communication link between said computer and the Internet;
software executing on said computer for automatically transmitting the client response form to the client through said communication link; and,
software executing on said computer for automatically receiving a reply to the response form from the client through said communication link.

Edit: The post should have read "present detailed evidence," not "prevent detailed evidence."  Patent challengers certainly don't want to prevent evidence of patent invalidity! – Jason

Analyzing the Role of NPEs in the Patent System

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Guest Post by David L. Schwartz, Associate Professor at Chicago-Kent College of Law and Jay P. Kesan, Professor and H. Ross & Helen Workman Research Scholar, University of Illinois College of Law

Understanding the role of non-practicing entities (or "NPEs" for short) in patent litigation is important. For one reason, patent litigators appear to be polarizing into a plaintiffs' bar and a defense bar. This polarization in lawyers is new to patent litigation, but has existed for many years in other areas of the law, such as medical malpractice, products liability, and labor law. In addition to the lawyers, certain industries have experienced more infringement allegations by NPEs, which have created rifts in many debates about patent reform. The topic of NPEs in patent litigation – their costs and benefits – has been featured prominently in the press, including extensive coverage of a study reporting that the "direct cost" of NPEs was $29 billion in 2011.

We recently wrote a short paper called Analyzing the Role of Non-Practicing Entities in the Patent System, which attempts to set forth a coherent way to conceptualize NPEs.

Before we can meaningfully study or even discuss NPEs, it is important to precisely define what is an NPE. Unfortunately, there is very little agreement on this point. Technically, individual inventors and universities are non-practicing entities. However, they appear very different from each other, and they are also different from start-up companies that have unsuccessfully attempted to commercialize their patented technologies. In addition, the term NPE is often used to refer to both small patent holding companies and large patent aggregators who purchase portfolios of patents from inventors and others for the primary purpose of enforcement. Any credible study of NPEs should distinguish among these different constituents and report empirical information separately.

Beyond the definitional issue, numerous arguments have been offered about the positive and negative aspects of the rise of NPEs in patent litigation. We discuss below several of these arguments, and what the existing empirical evidence suggests.

1. Criticisms of NPEs:

One common criticism of NPEs (however that term is defined) is that they initiate patent infringement lawsuits seeking to enforce patents of dubious quality or with questionable infringement claims, and then settling for amounts far less than the defendants' litigation costs. The story is that NPEs take strategic advantage of the notoriously high cost of patent litigation, which requires several million dollars in attorneys' fees to litigate through the close of discovery.

There is a little firm empirical evidence supporting this scenario of the combination of dubious patent assertions with low settlement demands. There is evidence that NPEs settle more quickly compared to other patent holders, which could indicate the possibility of nuisance settlements. But there is also evidence that the patents asserted by NPEs are similar to patents asserted by practicing entities. There is some evidence that the most litigious NPEs lose more often when the cases are taken to a final judgment, but like other types of complex civil litigation, the vast majority of patent cases settle before judgment.

If widespread opportunistic conduct by NPEs is in fact true, then we need less expensive ways to invalidate patents (e.g., cheaper post-grant review and inter partes review) and to resolve infringement actions (e.g., with a small claims court for cases with less than $3 million in damages or with early ADR).

But before we conclude that such widespread opportunistic conduct is occurring, we need better data on the merits of NPE patent cases, settlement amounts in those cases, the length of time they last, and the amount of attorneys' fees paid by defendants and NPEs to get a true picture of what the reality is. Recently, James Bessen and Michael Meurer from Boston University released a highly publicized study estimating that the direct cost of NPE patent assertions is "substantial, totaling about $29 billion in accrued costs in 2011." We have criticized their methodology and findings, which has been reported on here, here, and here. Briefly, we believe that the $29 billion estimate is likely skewed too high for several reasons. The estimate is based upon a biased sample of NPE defendants. It also includes the settlements, verdicts, and judgments to NPEs as part of the costs, when in reality these are the transfers to patent holders at the very core of the patent system. We find their analysis unsatisfying, and our article offers various suggested improvements to their methodology. Their study also does not consider the merits of the underlying cases.

A second common criticism is that certain types of NPEs – those who are unrelated to the original inventors – pocket a large part of the settlement amounts received and pass little on to the inventors who initially developed the patented technology. We need more data to assess this, but what we currently know appears to point to the opposite conclusion. For instance, Acacia Research Group, perhaps the largest publicly traded NPE, reported that in 2011, it paid more in royalties to inventors than it did to contingent fee attorneys who enforced their patents in litigation.

A third common criticism is that NPEs are not true innovators. Rather, they wait for another to expend resources to commercialize a product with the patented technology and then demand a "tax" on it. We think that existing patent law doctrines can be used to analyze this criticism: Are the asserted patent claims invalid as obvious? Does the accused product embody the asserted claims? Is there some other defense to infringement that has merit? What is the appropriate amount of damages for infringement? And does equity support the entry of an injunction?

2. Benefits of NPEs:

Most agree that university faculty and graduate students are often true innovators. But even NPEs unrelated to the original inventors may provide benefits. This is difficult to empirically assess because nearly all such NPEs are privately-held companies, and there is little publicly available information about these entities. If the concern is that settlement dollars transferred to NPEs are not provided to R&D or inventors, we suggest that private NPEs be surveyed. A survey of NPEs on issues such as litigation costs, settlements, transfers to inventors, and other issues, could be of tremendous value. We do not believe that any such survey has ever been conducted. A survey of NPEs has the additional advantage of exploring both sides of this issue. It could reveal a more complete and balanced picture of patent litigation than what can be obtained from surveying only one side, the accused infringers.

Even NPEs who merely purchase patents with an eye toward enforcement may serve a useful purpose by creating a market for patent rights. They purchase patents from those who do not have the resources or expertise to take their patented technologies to market such as individual inventors. These individual inventors often do not have the resources to hire lawyers that bill by the hour and instead must look for alternate arrangements, such as contingency fee representation or a sale of their portfolios to NPEs. Thus, NPEs create opportunities, perhaps the only opportunities, for non-manufacturing patentees to monetize their patents.

From an economic perspective, many believe that NPEs may serve an important market need. They absorb the risks and uncertainties of patent litigation, and yet may provide an important service permitting non-manufacturing patentees to reap some monetary rewards for their innovations. This potential benefit is premised upon the assumption that the patents are not of dubious quality. With respect to the debate about NPEs, we believe that focusing solely on the costs from and the distributions of funds by NPEs is somewhat beside the point. The better question is whether NPE lawsuits are being brought because the defendants are infringers of a valid patent, or because the defendants are merely easy targets for a nuisance lawsuit. This determination requires looking beyond the identity of the patent holder. Rather, it means we need to evaluate the patents being asserted to determine if there are credible patent claims that are valid, enforceable, and infringed. To the extent changes are needed to the patent system, we suggest focusing on reducing transaction costs (e.g., lawyers' fees) in patent litigation, offering cheaper mechanisms to challenge issued patents (the AIA's post-grant challenges and other administrative procedures for challenging validity appear to be a step in the right direction), and providing cheaper and quicker adjudication through a new small claims court for patent lawsuits, instead of focusing solely on whether the patent holder is a non-practicing entity.

In sum, the debate about NPEs underscores the fundamental point that patent litigation is about whether a valid and enforceable patent claim has been infringed. The more efficiently we can determine this answer in a lawsuit, the better off we will be.

The full article, which includes suggestions for improving the patent system, areas for future study, and criticisms of the study by other academics is available here.

Meyer v. Bodum: A Waste of Public and Private Resources?

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Meyer Intellectual Properties Limited v. Bodum, Inc. (Fed. Cir. 2012) Panel: Dyk (concurring), Moore, O'Malley (author) Download 11-1329

At its heart, Meyer v. Bodum is essentially an obviousness case, although for reasons having to do with the procedural posture, the court never gets to the merits of that issue, instead remanding the case for further proceedings based on numerous errors committed by the district court, which the opinion portrays as misguided and lacking an understanding of the basics of patent law.  

Judge Dyk's concurrence, reproduced in its entirety at the end of the post, goes even further, concluding that "this case is an example of what is wrong with our patent system…Such wasteful litigation does not serve the interests of the inventorship community, nor does it fulfill the purposes of the patent system."  Slip Op. at 46-47.

BodumBackground: Frank Brady was an independent sales representative for Bodum from 1986-1996, during which time he marketed and sold products including Bodum's French press coffee makers.  In the mid-1990's, Brady came up with the idea of a milk frother that used aeration instead of steam, and in 1996, he filed a patent application directed to a "Method for Frothing Liquids" that led to two issued patents, Nos. 5,780,087 and 5,939,122.  The claims essentially involve four steps: "(1) providing a container that has a height to diameter aspect ratio of 2:1; (2) pouring liquid (e.g., milk) into the container; (3) introducing a plunger that includes at least a rod and plunger body with a screen; and (4) pumping the plunger to aerate the liquid."  Slip Op. at 5. Brady also sold milk frothers through his company, BonJour, which was subsequently sold to Meyer. 

Bodum2In 1999, Bodum began selling the first generation of its accused milk frothers.  The figures  accompanying this post are the opinion's comparisons of Bodum's Version 1 frother with the '087 patent. Shortly after Meyer filed an infringement suit in 2006, Bodum changed its designs, removing the spring element holding the screen against the inside wall of the container and replacing it with an O-ring.  The O-ring was later removed to create the Version 3 frother. 

Following a jury trial in which the jury held the patents to be valid and willfully infringed, awarding $50,000 in damages, the district court trebled the damages, declared the case exceptional, and awarded Meyer its attorney fees of $756,487,56.  Bodum appealed, alleging a panopoly of errors by the district court.  The Federal Circuit agreed. 

Infringement: The CAFC vacated the district court's grant of summary judgment of infringement due to a lack of any evidence of direct infringement in the record.  Rather, the district court relied only on assumptions of direct infringement.  "We find it troubling that the district court based its direct infringement analysis on what it assumed happened, rather than on actual evidence of record. This assumption contradicts our well-established law that a patentee must prove infringement by a preponderance of the evidence."  Slip Op. at 26.

Evidentiary Rulings: Prior to and during trial, the district court made a number of evidentiary rulings that sharply limited Bodum's ability to present its case.  In an uncommon move, the Federal Circuit concluded that the district court had abused its discretion in these rulings, holding that (1) the district court erroneously limited the scope of prior art to only two references (one of which was subsequently excluded), despite sufficient disclosure of several additional references; (2) the district court  erroneously excluded Bodum's expert from testifying despite a report containing a sufficiently detailed statement of his opinions and the bases for his conclusions, especially given the non-complex nature of the technology; and (3) the district court erroneously precluded lay witnesses from testifying to authenticate one of the two allowed prior art references.  The CAFC thus remanded for a new trial on obviousness.

Inequitable Conduct: The CAFC also held that the district court erred by dismissing Bodum's inequitable conduct claims on a motion in limine.  Under Seventh Circuit law, "a motion in limine is not the appropriate vehicle for weighing the sufficiency of the evidence."  Slip Op. at 41-42.  The district court thus "erred in addressing the sufficiency of Bodum's inequitbale conduct defense on an evidentiary motion." Id. at 42. 

Willful Infringement and Enhanced Damages: Because the CAFC remanded the case for a new trial on infringement and invalidity, it vacated the wilfulness verdict and enhanced damages award.  In doing so, it suggested that the district court use Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 682 F.3d 1003 (Fed. Cir. 2012) (in which the Federal Circuit held that threshold "objective prong" of the willfulness inquiry is a question of law) as a starting point.

Judge Dyk's Concurrence: Writing in concurrence, Judge Dyk questioned why this patent issued in the first place and why it was not found obvious on summary judgment: 

While I agree with and join the thorough majority opinion, in looking at this case from a broader perspective, one cannot help but conclude that this case is an example of what is wrong with our patent system. The patents essentially claim the use of a prior art French press coffee maker to froth milk. Instead of making coffee by using the plunger to separate coffee from coffee grounds, the plunger is depressed to froth milk. The idea of frothing cold milk by the use of aeration rather than steam is not new as reflected in the prior art Ghidini patent.  Under the Supreme Court’s decision in KSR International Co. v. Teleflex, Inc., 550 U.S. 398, 420 (2007), and its predecessors, it would be reasonable to expect that the claims would have been rejected as obvious by the examiner, and, if not, that they would have been found obvious on summary judgment by the district court. But no such thing. The parties have spent hundreds of thousand of dollars and several years litigating this issue, and are invited by us to have another go of it in a second trial. Such wasteful litigation does not serve the interests of the inventorship community, nor does it fulfill the purposes of the patent system.

Judge Dyk specifically refers to the private costs of this litigation – the hundreds of thousands (at least a million, if both parties' costs are taken into account) of dollars spent by the parties on legal fees.  The public, too, has spent a substantial amount of resources on this case: the district court's time and resources, the jury's time (and perhaps a future second jury), and the Federal Circuit's own time spent correcting the errors – as evidenced by its thorough 44-page opinion.  Beyond these monetary costs, Judge Dyk's concurrence hints at an even greater public cost: the undermining of public confidence in the ability of the patent office and the courts to get patentability decisions on even relatively technologically simple inventions right.

Non-Public Litigation: The Hidden Story of Monsanto v. DuPont

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Guest Post by Professor Bernard Chao

Last year, I wrote about the problem of courts that injudiciously seal records in patent cases. See Bernard Chao, Not So Confidential: A Call for Restraint in Sealing Court Records, 2011 Patently-O Patent L.J. 6. In that essay, I explained how allowing access to court records is important because it teaches the public about our legal system. This in turn provides an important check on the law. Public outcry over unjust decisions can often lead to legislative or judicial reform.

Unfortunately, this problem has raised its ugly head again in the high profile Monsanto v. DuPont patent case. This case has made headlines because Monsanto has recovered $1 billion in damages even though DuPont has never even been accused of selling any seeds that infringe Monsanto’s patent for genetically modified Roundup Ready soybeans. Rather, the infringement is based on some Roundup Ready soybeans that the defendants developed but did not sell and the award appears to be based on the royalties that DuPont would have paid had it negotiated a license ahead of time. I use “appears” because Monsanto’s damages theory is hidden from the public view.

I have previously written on patent damages and was puzzled by how DuPont could be liable for $1 billion when it did not actually sell any infringing seeds. Consequently, I went to the case’s docket in the Eastern District of Missouri hoping to learn about Monsanto’s damages theory. There are several entries that might explain the theory that led to a $1 billion verdict. For example, DuPont filed a motion to exclude the opinions of Monsanto’s damages expert, Michael Keeley. Of course Monsanto filed a response and DuPont replied. These briefs and their exhibits were filed entirely under seal. In other words, there is no public redacted version of any of these documents. What’s more there is nothing in the docket that shows how the district court ruled on the DuPont’s motion. Even if the court’s ruling were in the docket, it probably would not have been available. Other docket entries show that the court has regularly sealed many of its other rulings including decisions on several motions for partial summary judgments, a motion to compel and a motion to strike. In other words, there is no way to understand many of the basic theories underlying Monsanto’s case and Dupont’s defenses.

Now you don’t need to read all the press coverage to understand that Monsanto v. DuPont is one of the most important cases in patent law. There appears to be a novel damages theory that led to $1 billion verdict. There are likely issues of first impression that relate to patents on genetically modified organisms. Indeed, the outcome has important ramifications for agribusiness generally. Yet, the critical court records are under seal and everyone is left in the dark. I won’t repeat my entire argument here. But, I will repeat my plea. At a minimum, the court should force parties in patent cases to file public versions of their briefs. They can leave out their profit margins and trade secrets. We don’t care about such things. But the public needs to know the basic facts and theories underlying these cases. Similarly, to the extent that courts seal their decisions, they need to publish public versions that explain the reasoning underlying their rulings.

Monsanto wins $1b verdict on RoundUp Ready Seed Patent

Patent, , ,

Dr. EvilBy Dennis Crouch

The PACER entry is compelling:

JURY VERDICT For: Plaintiffs Against: Defendants In the Amount of: One Billion Dollars. (Entered: 08/02/2012)

In his August 6 order, Judge Webber confirmed the jury verdict that DuPont/Pioneer willfully infringe Monsanto's GMO roundup-ready seed patent. The jury rejected the defendants' claims that the asserted patent was invalid; that the patent had been finally obtained through inequitable conduct; and that the reissue patent improperly expanded the scope of the original claims. The judge also confirmed the jury's reasonable royalty damage award of "One Billion Dollars ($1,000,000,000)."

The asserted patent was Monsanto's reissue No. RE 39,247 and the accused product was DuPont's Optimum GAT soybean line that has never been released to the public. Rather, thus far DuPont's use of the patent has been for research purposes. No matter – the US has only a de minimis research defense that certainly does not apply here. See Madey v. Duke. Thus, unlicensed use of the Monsanto genetically modified soybean seed counts as infringement, even if that use was only for the development of a commercial product.

There is no question that this innovation was groundbreaking and has transformed the landscape of American agriculture. The genetic modification makes crops tolerant to the herbicide glyphosate. Although far from organic, glyphosate (RoundUp) has a much smaller negative environmental impact than other herbicides. In addition, the use of glyphosate has allowed for no-till farming that greatly reduces topsoil runoff and energy demands. In his press release, Monsanto's General Counsel David Snively wrote that the verdict "highlights that all companies that make early and substantial investments in developing cutting edge technology will have their intellectual property rights upheld and fairly valued." Snively's remarks are perhaps overstated, but at least have some kernels of truth.

The damages theory was interesting. Since the accused product was not yet on the market, Monsanto did not seek any lost profit. Rather, Monsanto demanded a reasonable royalty for the research-use made by the defendants. Monsanto argued that the use of Monsanto's invention in DuPont's labs and Pioneer's test fields gave those companies an "improper head start" in making the GM seeds. The judge and jury agreed – if those companies wanted to build upon the invention then they should have first obtained a license. In the pharmaceutical world, 35 U.S.C. § 271(e) offers a research exemption for this type of activity. However, that exception does not apply here because of the low level of regulation over genetically modified food-products. The patent is set to expire in 2014. The patentee's right-to-exclusive-research supported by this case means that the 2014 date offers a starting-date for follow-on competitive research. Any actual products building directly upon the patented invention will arrive on the market sometime later.

I sat-in on one day of the jury trial that was held in St. Louis, Missouri. The eight-member jury were largely attentive as they listened to DuPont's technical expert explain DNA and problems with the patent. I smiled at seeing the jury members walk in wearing t-shirts and carrying notepads. Their attitude and attire was a severe contrast to the room full of two-dozen attorneys and experts (each charging hourly). Although I'm sure that Judge Webber could have ably decided the case himself, the jury of individual citizens gave me a bit more confidence in our system and, in my mind, offers the ultimate reality check for this type of case. At least some of the jury members appear to be fans of Dr. Evil.

The level of damages, claim construction, and other issues will be the subject of an appeal the Court of Appeals for the Federal Circuit.

Federal Circuit to Hear En Banc Appeal on Its Jurisdiction over All-But-Accounting Patent Decisions

Patent,

By Dennis Crouch

Robert Bosch LLC v. Pylon Mfg. Corp. (Fed. Cir. 2012)

In a sua sponte order, the Federal Circuit has announced that case to be heard en banc to determine whether the appellate court has jurisdiction over a judgment on patent infringement liability in a bifurcated case even before issues of damages and willfulness have been adjudged. The en banc order highlights 28 U.S.C. § 1292(c)(2) as likely governing the case. That statute provides the Federal Circuit with:

exclusive jurisdiction … (2) of an appeal from a judgment in a civil action for patent infringement which would otherwise be appealable to the United States Court of Appeals for the Federal Circuit and is final except for an accounting.

The question on appeal is thus, whether the district court case is “final except for an accounting.”

Current precedent is somewhat confused. In Majorette Toys (U.S.) Inc. v. Darda, Inc. U.S.A., 798 F.2d 1390 (Fed. Cir. 1996), the court arguably classified the calculation of attorney fees and court costs as “accounting” but did not place the principle damages award in that category. In a recent order, the Federal Circuit took a narrow interpretation of Majorette by refusing to hear an appeal of an attorney-sanction before the dollar value of the sanction had been set. Orenshteyn v. Citrix Systems, Inc., — F.3d —-, 2012 WL 3101666 (Fed. Cir. 2012). Judge Newman dissented in Orenshteyn – arguing that the sanction dollar value constituted “accounting” under the law. In Falana v. Kent State University, 669 F.3d 1349 (Fed. Cir. 2012), the court ruled that “the district court’s exceptional case finding and award of attorney fees” were not properly before the court because the dollar values had not been calculated and those values were more than “accounting” under the statute. Falana was decided by Judges Linn, Reyna and Prost.

The en banc order raises two particular questions:

  1. Does 28 U.S.C. § 1292(c)(2) confer jurisdiction on this Court to entertain appeals from patent infringement liability determinations when a trial on damages has not yet occurred?
  2. Does 28 U.S.C. § 1292(c)(2) confer jurisdiction on this Court to entertain appeals from patent infringement liability determinations when willfulness issues are outstanding and remain undecided.

Briefs of amici curae may be filed without consent of the parties or leave of the court.

 

Enhanced Damages: The Seagate Objectively Reckless Standard is Now a Question of Law to be Decided by a Judge and Reviewed De Novo on Appeal

Patent, , ,

By Dennis Crouch

Bard Peripheral v. W.L.Gore (Fed. Cir. 2012) (on rehearing)

In an important decision, the Federal Circuit has ruled that the “objective prong” of the test for willful patent infringement is a separate question of law. Moving forward, it will be the trial court’s duty to determine whether the defendant’s actions were objectively reckless. Further, the objective prong will now be subject to de novo review on appeal.

This new system somewhat parallels the judge-determined claim construction that must occur before a jury can determine infringement. As with claim construction, this new judge-focused sub-test will likely drive results in most cases. Because it will be prior-in-time, the judicial decision on objective recklessness will filter-out many willfulness allegations before they reach the jury. And the jury, once it is told that the judge has determined the behavior objectively reckless, is likely to find any infringed patent to be willfully infringed.

Right to Jury: The right to a jury decision on the issue of willfulness already stood on shaky foundation because, by statute, the judge decides the monetary award. The changes in the law brought about here in Bard coupled with those outlined in Seagate suggest that right may now be fully eroded. Further, the decision suggests that it may be proper to treat the entire issue of willfulness as a question of law.

+ + + + +

Treble Damages: The text of the Patent Act appears to provide courts with broad power to treble any damages awarded. The statute reads that “the court may increase the damages up to three times the amount found or assessed.” Although the text offers no limitation on that power, the Federal Circuit has limited the use of enhanced damages to only apply when the adjudged infringement is found to be willful. In Seagate, the Federal Circuit defined a two-prong test for willfulness that requires clear and convincing evidence (1) “that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent” and (2) that the infringer had knowledge (or should have known) of this risk.

Willfulness is a question of fact that has been traditionally decided by a jury. However, as the statute suggests, it is the judge who determines the extent of any enhanced damages (with the limit of three-times the compensatory damage award). Here, the infringer argued that a court (rather than a jury) should first decide the sub-question of whether there existed (at the time of the infringement) an objectively high-likelihood that the infringer’s action’s constituted infringement. The appellate court agreed:

After reviewing the Supreme Court’s precedent in similar contexts, as well as our own, we conclude that simply stating that willfulness is a question of fact over-simplifies the issue. While the ultimate question of willfulness based on an assessment of the second prong of Seagate may be a question of fact, Seagate also requires a threshold determination of objective recklessness. That determination entails an objective assessment of potential defenses based on the risk presented by the patent. Those defenses may include questions of infringement but also can be expected in almost every case to entail questions of validity that are not necessarily dependent on the factual circumstances of the particular party accused of infringement.

In considering the standard applicable to the objective prong of Seagate, it can be appreciated that “the decision to label an issue a ‘question of law,’ a ‘question of fact,’ or a ‘mixed question of law and fact’ is sometimes as much a matter of allocation as it is of analysis.” Miller v. Fenton, 474 U.S. 104, 113-14 (1985). When an “issue falls some-where between a pristine legal standard and a simple historical fact, the fact/law distinction at times has turned on a determination that, as a matter of sound administration of justice, one judicial actor is better positioned than another to decide the issue in question.” Id. at 114; see also Markman v. Westview Instruments, Inc., 517 U.S. 370, 388 (1996) (applying this test to determine that claim construction is best left to the judge). We believe that the court is in the best position for making the determination of reasonableness. This court therefore holds that the objective determination of recklessness, even though predicated on underlying mixed questions of law and fact, is best decided by the judge as a question of law subject to de novo review.

On remand, the district court will be required to specifically consider the question of objective recklessness.

+ + + + +

Clear and Convincing Evidence Standard for a Question of Law?: Seagate requires that objective recklessness be proven with clear and convincing evidence. As the en banc court wrote in 2007 “to establish willful infringement, a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.” Normally, clear-and-convincing evidence is a standard for proving facts. Here in Bard, however, the court now holds that the objective recklessness prong is a question of law. Since the panel here has no power to modify Seagate, the odd joining of these decisions is that the issue of law must still be proven by clear and convincing evidence. In a concurring opinion to the i4i decision, Supreme Court Justice Breyer wrote on this topic – noting that the clear and convincing evidence standard of proof “applies to questions of fact and not to questions of law.” The panel opinion here in Bard either did not recognize this problem or chose to ignore it. The tension here between Seagate and Bard is genuine.

+ + + + +

The majority opinion was written Judge Gajarsa (Senior Judge) and joined by Judge Linn. Judge Newman wrote in dissent and argued that there was no need for a remand because the jury willfulness determination was clearly wrong.

+ + + + +

This case has been brewing for 38 years! Initially it was an inventorship dispute that took 28 years to settle at the PTO, followed by a litigation battle for the past 8 years. The patent covers a prosthetic vascular graft used in bypass surgeries and was originally filed as an application in 1974. U.S. Patent No. 6,436,135.

Judge Posner: No Damages Despite Infringement

Patent

by Dennis Crouch

Apple v. Motorola (N.D.Ill. 11–cv-8540) (Order by Judge Posner, June 2012)

Compensating for Harm: In most tort cases, the harm is easy to identify (if not prove).  A negligent driving accident results in property damage.  Tortious battery leads to medical bills.  However, the non-rivalrous nature of intellectual property often makes the harm more difficult to ascertain.  No one is directly injured per se when a third party begins to use an inventor's idea without authorization. Rather, the idea is still available and a third party's separate use of the invention does not prevent the inventor from continuing use the invention as well. Competitive injury sometimes comes into play. Of course, in most situations we don't think of competitive injury as an actionable harm, but rather classify it as beneficial competition –  survival of the fittest. And, in most US patent lawsuits, the patented invention does not relate to any ongoing market competition between the parties.  The legal harm does exist, but it comes from the statutory exclusive right that guarantees an exclusive entitlement to the patentee along the potential for injunctive relief and a reasonable royalty.  Patentees expect to collect rents if others use their patented inventions.  Litigation damages are those rents.

Judge Richard Posner is sitting by designation as a trial court judge in a pending infringement lawsuit between Apple and Motorola. (N.D.Ill. 11–cv-8540).  Judge Posner's opinions are always interesting to read and this case is no exception.  In a recent order, Judge Posner canceled the jury trial scheduled for this week and instead opined that the case is moot because there are no damages and therefore, “neither party can establish a right of relief.”  In the order, Judge Posner indicated that a full opinion would be forthcoming, likely within the week. 

The crux of the order is that, even if Apple's asserted patents are valid and infringed, Apple cannot prove any damages stemming from the infringement nor can it prove that the harm of ongoing infringement is sufficient to demand injunctive relief. 

Damages not an Element: For some causes of action, harm is considered an element of the offense that must be proven before liability is found. Ordinary defamation requires harm. Likewise, murder requires a death. However, many other causes of action (including patent infringement) do not require a showing of harm for the substantive case. Rather, the the usual approach in patent cases is to first determine whether infringement has occurred (without regard to the damage caused) and then determine the appropriate damages.  This approach is derived by the patent statute that defines infringement in 35 U.S.C. 271 without regard to damages. A separate provision (discussed below) then suggests a damage calculation method.

Patent Infringement but No Damages?: Section 284 of the Patent Act briefly defines the scope of damages available for infringement. The statute indicates that damages should be “adequate to compensate for the infringement but in no event no less than a reasonable royalty for the use made.”  Many see the statute as offering a minimum statutory damage award of at least a reasonable royalty. In my view, one implication of the statute is that damages will never be properly calculated as zero.  Rather, even a nominal infringement should result in at least a few pennies as the reasonable royalty. 

Proving Damages: It is easy to reconcile my notion that infringement damages are always posigive with Judge Posner's conclusion that no damages exist in this case.  The missing linkage is the procedural reality that it is the patentee's burden to prove damages. A planitiff that cannot prove damages should not expect a court to speculate on the proper award. Rather, without that proof, the proper award is zero (or perhaps a nominal award of $1).  Here, because Apple's damages experts have either been rejected by the court or else have provided unbelievable reports, Apple's award will be zero. 

Pleading Requirements for Direct Infringement; Inducing Infringement; and Contributory Infringement

Patent

In re Bill of Lading, No. 2010-1493 (Fed. Cir. 2012)

by Dennis Crouch

In a split decision, the Federal Circuit has partially reversed a lower court’s dismissal for failure to state a claim. Writing for the majority, Judge O’Malley made an important doctrinal distinction between when an offer to sell constitutes direct infringement as compared with indirect infringement.  The decision also highlights the tension between recent Supreme Court pleadings cases (Iqbal & Twombly) and the bare-bones form pleadings (Form 18) found in the Federal Rules.  Here, the court held a complaint following the Form 18 necessarily satisfies the notice pleading requirements but that Form 18 does not apply to allegations of indirect infringement.  The result of this case will likely be to further raise the pleading requirements for indirect infringement cases.  Judge Newman dissented — arguing that a Form 18 complaint should normally be deemed insufficient to provide sufficient notice to alleged infringers. 

+ + + + +

R+L Carriers is both the plaintiff and DJ defendant in a merged multi-party suit involving a host of alleged infringers. The lawsuit centers on R+L’s U.S. Patent No. 6,401,078.  The patent is directed to a system for creating bill-of-lading for individual packages.  Basically, the invention directs folks to scan documentation data that is on a package on-board a transporting vehicle; sending that scanned “image” to a remote processing center; and then preparing a loading manifest that directs folks what to do with the package next (such as load it on another vehicle).

Failure to State a Claim: The district court dismissed the lawsuit for failure to state a claim under Fed. R. Civ. Pro. R. 12(b)(6).  Patent cases are begun with the filing of a complaint in federal court. Federal Courts follow a “notice pleading” standard that traditionally only requires a limited amount of information in the complaint itself.  However, in a pair of recent cases, the Supreme Court raised the standard to require that plaintiffs recite sufficient facts in the complaint to make the case plausible. Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009).  The “plausible” standard requires more than showing that liability is merely possible or conceivable.  However, a “plausible” is not necessarily “probable.”  Thus, Twombly and Iqbal raise the potential that the pleadings will better filter meritless cases. However, many losing cases will still survive motions on the pleadings.

Form 18 Complaint: Despite this seeming increased standard, the rules of civil procedure include a loophole through a standard patent complaint known as Form 18. Form 18 is a threadbare complaint and contains only five sentences that make-up the body of the complaint.

1. This action arises under a federal statute, <_____>.

2. On <Date>, United States Letters Patent No. <__________________> were issued to the plaintiff for an invention in an <Electric Motor>.  The plaintiff owned the patent throughout the period of the defendant's infringing acts and still owns the patent.
 
3. The defendant has infringed and is still infringing the Letters Patent by making, selling, and using <Electric Motors> that embody the patented invention, and the defendant will continue to do so unless enjoined by this court.

4. [If Applicable] The plaintiff has complied with the statutory requirement of placing a notice of the Letters Patent on all electric motors it manufactures and sells and has given the defendant written notice of the infringement.

 Therefore, the plaintiff demands: (a) a preliminary and final injunction against the continuing  infringement; (b) an accounting for damages; and (c) interest and costs.

In Twombly, the Supreme Court recognized that there may be some conflict between the form complaints and the higher standards suggested by the Court. In those situations, the Court has been clear that the forms control. Thus, the Federal Circuit here held that pleadings fitting within Form 18 cannot be held insufficient to state a claim for patent infringement.  In particular, the court noted that a plaintiff need not “plead facts establishing that each element of an asserted claim is met” or “even identify which claims it asserts are being infringed.”

Indirect Infringement Not Covered by Form 18*: When examining Form 18, the court made an important distinction between complaints for direct infringement and indirect infringement.  Form 18 is focused on the actions of “making, selling, and using” the patented invention. These are forms of direct infringement. The Federal Circuit here held that the Form 18 only applies to allegations of direct infringement and not indirect infringement. And thus, indirect infringement must be pled in a way that meets the Twombly standard. One exception here is that the court noted that pleading indirect infringement does not require identifying specific customers who perform the underlying direct infringement as long as the facts pled allow an inference of underlying direct infringement.  Note – the court did not specifically decide whether Form 18 is sufficient when the direct infringement is in some form other than making, selling, or using (such as offering for sale).

Contributory Infringement: Section 271(c) of the Patent Act creates contributory infringement liability for anyone who sells or offers to sell a component for use in practicing a patented process and that component is material to practicing the invention, has no substantial non-infringing uses, and is known by the party “to be especially made or especially adapted for use in an infringement of such patent.” 35 U.S.C. § 271(c).  Here, R+L’s complaints failed to specifically allege that the accused components (scanning equipment) lacked substantial non-infringing uses.  On appeal, the Federal Circuit held that the complaint must include that allegation.  Thus, these claims were dismissed.

Inducing Infringement: Section 271(b) of the Patent Act creates liability for inducing infringement and includes a mens rea requirement that the alleged inducer have “knowledge that the induced acts constitute patent infringement.”  Here, the R+L did plead those specific elements, but the district court dismissed the claim after finding the required inferences of knowledge to be “implausible and unreasonable.” On appeal, the Federal Circuit reversed that finding – holding that a plaintiff need not prove its case in the complaint and that at the pleading stage all reasonable inferences must be determined in favor of the non-moving party.”

Before turning to the individual amended complaints and the specific allegations therein, we note a flaw that pervades the district court’s assessment of R+L’s allegations of induced infringement—its failure to draw all reasonable inferences in favor of the non-moving party.  Twombly did not alter this basic premise. Nothing in Twombly or its progeny allows a court to choose among competing inferences as long as there are sufficient facts alleged to render the non-movant’s asserted inferences plausible.

As an example, the complaint identified advertising from one of the defendants that suggested an infringing use and alleged that the advertisement was distributed after receiving a cease and decisit letter from the patentee. The Federal Circuit found that (and similar allegations against other defendants) to be sufficient under Twombly. 

+ + + + +

The implication from this case is that Form 18 should be either (1) eliminated or (2) re-written.  I suggest elimination.  Patent litigators know how to draft a complaint and it is not very difficult to provide a sufficient level of detail and factual allegation in a complaint or counterclaim.  For cases involving patents with excessive claims (25+) I would suggest that simply identifying the patent does not provide sufficient notice. Rather, the complaint should also identify the claims alleged to be infringed.

Princeton Event: Patent Success or Failure? The America Invents Act and Beyond

Patent,

by Dennis Crouch

When listed as a potential survey response, Princeton University School of Law regularly ranks as a top-ten law school.  Although Princeton actually has no law school, the Ivy League university does have a set of world class thinkers in areas of public policy, political science, and political economics. Several years after I graduated from Princeton's School of Engineering, the University founded its Center for Information Technology Policy (CITP) with Professor Ed Felton as its leader.

On Friday, May 11, 2012 I'll be returning to by alma mater for a CITP conference on patent law and policy titled: Patent Success or Failure? The America Invents Act and Beyond.  Speakers include USPTO Director Kappos; CAFC Chief Judge Rader and former Chief Judge Michel;  Professors Arti Rai, Colleen Chien, Jason Schultz, and myself; Joe Matel from the Senate Judiciary Committee; Dan Ravicher from PubPat; and industry leaders from industry (IBM, Google, J&J) and practice.

The event is free and open to the public. Register here: https://citp.princeton.edu/event/patent-success-or-failure/

Notes:

  • Later this month, I'll be speaking at the 10th Annual Rocky Mountain IP & Tech Institute in Denver. Speakers there include 9th Circuit Chief Judge Alex Kozinski, Professors Lemley & Hricik, David Donoghue, Michael Smith, Chris Mirick (my brother-in-law) and many other excellent speakers. Register here: http://ip.annualcle.com/
  • In June & July I'll be presenting a series of lectures at UCL-London on changes to US Patent Law and how they integrate with UK & European practice. The Rt Hon Prof. Sir Robin Jacob is chairing the event.
    • June 18 – Changes to the way patents are prosecuted in the US under the AIA and other case law.
    • June 28 – New issues in US patent litigation; damages; settlement processes; and the rise of "international litigation." 
    • July 4 – A two-part session on (1) the new administrative structure for challenging US patents and the new scope of patentable subject matter.
    • You can register for one or more sessions here: http://ibil-us-patents.eventbrite.com/

Also in June, I'll be speaking at the 2012 IP Business Congress held at a resort/casino near Lisbon, Portugal. http://www.ipbusinesscongress.com/2012/About.aspx

Federal Jurisdiction over Patent Malpractice Cases – Supreme Court Shows Interest in Gunn v. Minton

Patent,

By Dennis Crouch

Gunn v. Minton, (on petition for Writ of Certiorari at the U.S. Supreme Court)

Vernon Minton developed a set of software that he leased to the Texas Int'l Stock Exchange (TISE) more than one year before filing a provisional patent application on the invention embodied by the product. The USPTO granted Minton U.S. Patent No. 6,014,643. However, in a later lawsuit against NASDAQ, the patent was invalidated via the on-sale bar of 35 U.S.C. § 102(b) and that invalidity finding was upheld on appeal. Minton v. Nat'l Ass'n of Sec. Dealers, Inc., 336 F.3d 1373 (Fed. Cir. 2003). In that decision, the Federal Circuit confirmed that the lease constituted a sale for 102(b). In a post-judgment motion, Minton asked the district court to consider whether the use by TISE was an experimental use. However, the court refused to consider that issue because of its untimely introduction.

The present lawsuit arose when Minton then sued his patent litigation counsel (who have now joined the Fulbright & Jaworski firm). The crux of the malpractice claim is that the litigation counsel failed to timely plead the experimental use question. Minton sued in Texas state court and lost on a pretrial motion based upon the trial court's judgment that Minton had failed to present "a scintilla of proof . . . to support his claims." That no-damages judgment was affirmed by the Texas court of appeals. However, the Supreme Court of Texas took an orthogonal view and held that Texas courts lacked subject matter jurisdiction over case. In particular, the Texas Supreme Court held that Minton's malpractice claim required resolution of a substantial question of patent law and therefore fell within the exclusive "arising under" jurisdiction of the federal courts and, eventually, the Court of Appeals for the Federal Circuit. This ruling gives Minton another shot at winning the case – this time in federal district court.

The 5-3 Texas Supreme Court decision followed the lead set by the Federal Circuit in Air Measurement Tech., Inc. v. Akin Gump Strauss Hauer & Feld, L.L.P., 504 F.3d 1262 (Fed. Cir. 2007) and Immunocept, L.L.C. v. Fulbright & Jaworski, L.L.P., 504 F.3d 1281 (Fed. Cir. 2007). In those cases the Federal Circuit gave a broad interpretation to arising under jurisdiction based upon the court's congressionally mandated goal of national uniformity in the patent system. Both the Akin Gump and the Fulbright Jaworski cases were decided on the same day by the same panel and both penned by then Chief Judge Paul Michel. (Judges Lourie and Rader joined the panels). Although the Texas court did not treat the Federal Circuit decisions as binding precedent, the court chose to adopt the logic of those decisions. The dissent argued that the State of Texas has a strong interest in (and a regulatory scheme in place for) ensuring that Texas attorneys maintain a high level of quality and that federalism concerns suggest that many of these cases should be adjudged at the state court level. In a non-patent case, the Supreme Court approved of this more nuanced analysis of arising under jurisdiction in the case of Grable & Sons Metal Products, Inc. v. Darue Eng'g & Mfg., 545 U.S. 308 (2005).

The lawyer defendants have now appealed to the U.S. Supreme Court – asking that court to provide its verdict on the breadth of arising under jurisdiction for non-patent cases that require interpretation of a patent law issue. Gunn presents the following question:

Did the Federal Circuit depart from the standard this Court articulated in Grable & Sons Metal Products, Inc. v. Darue Eng'g & Mfg., 545 U.S. 308 (2005), for "arising under" jurisdiction of the federal courts under 28 U.S.C. § 1338, when it held that state law legal malpractice claims against trial lawyers for their handling of underlying patent matters come within the exclusive jurisdiction of the federal courts? Because the Federal Circuit has exclusive jurisdiction over appeals involving patents, are state courts and federal courts strictly following the Federal Circuit's mistaken standard, thereby magnifying its jurisdictional error and sweeping broad swaths of state law claims – which involve no actual patents and have no impact on actual patent rights – into the federal courts?

This may be surprising to some, but in most cases the respondent does not actually file any response to a Supreme Court petition for writ of certiorari. The Supreme Court tends to only hear important cases that are well represented on both sides. The lack of response is intended to suggest that the case should not rise to that threshold level of importance. Here, Minton declined to respond to the petition. However, in a recent order, the Supreme Court has asked for Minton's response. This judicial action suggests interest in the case, and that interest may be prompted that may be further spurred by the recent spate of decisions showing some disagreement within the Federal Circuit on the very issue. In a supplemental filing in support of its petition, Gunn argued that "[t]he Federal Circuit, which created the jurisdictional morass at issue in this case, is thus split within itself regarding whether to abandon the misguided and overly-broad jurisdictional standard it articulated in Air Measurement Tech., Inc. v. Akin Gump Strauss Hauer & Feld, L.L.P., 504 F.3d 1262 (Fed. Cir. 2007) and Immunocept, L.L.C. v. Fulbright & Jaworski, L.L.P., 504 F.3d 1281 (Fed. Cir. 2007)."

If the Supreme Court takes the case, argument will likely be scheduled for late 2012.

Patently-O Bits & Bytes by Lawrence Higgins

Patent, , , ,

IP's contribution to the US economy

  • A recent USPTO whitepaper reports that IP industries contribute $5 trillion and 40 million jobs to the US economy. Some of the report major findings are:
    • The entire US economy relies on some form of IP, because virtually every industry either produces or uses it.
    • IP-intensive industries directly accounted for 27.1 million American jobs, or 18.8% of all employment in the economy, in 2010.
    • Jobs in IP-intensive industries pay well compared to other jobs. Average weekly wages for IP-intensive industries were 42% higher than the average weekly wages in non IP-intensive industries.
    • Growth in copyright-intensive industries (2.4%), patent-intensive industries (2.3%), and trademark-intensive industries (1.1%) all outpaced gains in non-IP intensive industries.

    Report

Rights of the dead

  • At Coachella 2012 Tupac Shakur appeared on stage and as if he was actually alive and performing. What rights does the family of Tupac or other deceased entertainers have when it comes to situations like this?
  • California Civil code Section 3344.1 (a)(1) reads in part:
    • Any person who uses a deceased personality's name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods, or services, without prior consent from the person or persons specified… shall be liable for any damages…

    Section (a) (2) reads:

    • For purposes of this subdivision, a play, book, magazine, newspaper, musical composition, audiovisual work, radio or television program, single and original work of art… shall not be considered a product, article of merchandise, good, or service if it is fictional or nonfictional entertainment, or a dramatic, literary, or musical work.

    Having a dead celebrity performing electronically on stage seems like it falls into the audiovisual work exception under section (a) (2). I have yet to see anyone attempt to file a business-method patent on the dead touring, but I assume that someone may attempt to monopolize the business. [Link]

Patent Jobs:

  • Edell, Shapiro & Finnan is seeking an experienced EE patent attorney with an advanced degree in EE or physics. The firm is also seeking an associate/agent/tech writer with an EE or computer science degree to work at their Rockville, MD office. [Link]
  • Amgen is searching for Sr. Counsel with 4 years of patent or IP practice to work at their California location. [Link]
  • North Star IP is looking for a patent associate with 3 to 4+ years of prosecution experience and a background in EE, computer engineering, or computer science to work at their DC office. [Link]
  • Sterne, Kessler, Goldstein & Fox is seeking experienced electrical IP attorneys with a degree in EE or computer engineering to work at their DC office. [Link]
  • Cantor Colburn is searching for an associate ME/EE patent attorney with 3-5 years of experience. [Link]
  • Cantor Colburn is looking for IP litigation associates with 2-4 years of litigation experience. [Link]
  • The Kohler Company is seeking an IP attorney with 2+ years of experience to work at their Kohler, Wisconsin location. [Link]
  • Rutan & Tucker is searching for a patent associate/agent with 3-4 years of experience to work at their California office. [Link]
  • Rathe Lindenbaum is looking for a patent attorney/agent with experience in mechanical, electromechanical or chemical engineering and 3+ years of experience to work at their Milwaukee office. [Link]
  • NONY is looking for a US patent attorney/agent or UK patent attorney to work at their Paris, France office. [Link]

Upcoming Events:

  • The University of Colorado School of Law will hold a conference on April 24th. The conference, Patents on the Range or Wild Frontier, will discuss the future of patent policy. Guest speakers include: David Kappos, Don Rosenberg, John Thorne, Paul Ohm, Bernard Chao, and many others. [Link]
  • ACI will hold its 6th Annual Paragraph IV Disputes conference on April 24-25 in New York City. The conference will cover topics such as: the impact of the AIA on Hatch-Waxman litigation, claim construction, prior art obviousness and obvious-type double patenting, and many other topics. (Patently-O readers register with PO 200 for a discount). [Link]
  • The DC Bar IP Law Section 2012 Annual Spring Reception will be held April 25th. The D.C. Bar Intellectual Property Law Section awards the 2012 "Champion of Intellectual Property" Award to the late Paul J. Luckern, Chief Judge of the International Trade Commission. Guest include Chief Judge Randall R. Rader of the U.S. Court of Appeals for the Federal Circuit, Judge Theodore R. Essex of the ITC, and Lynn I. Levine, Director of the ITC's Office of Unfair Import Investigations. [Link]
  • Fitch, Even, Tabin & Flannery, LLP will present a free one-hour CLE webinar, "Trademark Protection Strategies in Social Media," on April 25, 2012 at 12 noon EST. The proliferation of social media outlets frequented by millions of users have created untold opportunities for trademark exposure and potential infringement. Joseph T. Nabor will discuss strategies to protect trademarks in the social media arena, including monitoring and enforcement against infringement, creating social media policies, related ethics issues, and using social media in litigation support. [Link]
  • LES 2012 Spring Meeting – "Licensing to Solve the Innovation Gap" will be held May 15-17, Boston, MA. Speakers from GE Healthcare, Harvard, Hoffmann-LaRoche, Intel, Johnson & Johnson, Merck, MIT, Pfizer, Stanford and more will share their expertise on licensing to solve the innovation gap. (Patently-O readers save $100 by using promo code PO12 when registering) [Link]
  • The World Research Group is holding its 4th Annual Corporate IP Counsel Forum on May 16-17 in NYC. The Corporate IP Counsel Forum will address key issues and uncover latest developments related to IP in the form of case studies and panel discussions. Some of the topics include, but are not limited to: The America Invents Act and its impact on patent litigation and prosecution, IP monetization strategies for small and mid-size companies, Patent valuation, The top 10 most influential court cases in IP this year, Patent eligibility, Invention mining, Divided infringement, Best practices for combating non-practicing entities, Appeals to the U.S. Court of Appeals for the Federal Circuit, Copyright infringement. [Link]
  • The Annual DRI Business Litigation and Intellectual Property Seminar will be held May 16-18, 2012, in New York City. Attendees will learn trial and appellate advocacy skills in business litigation get up-to-date on the last trends in intellectual property and business litigation, and network with in-house counsel, business and intellectual property trial lawyers and experts from across the country. Speakers include: Former ABA President, Dennis W. Archer, Dennis Archer PLLC, and David Leitch, VP and General Counsel of Ford Motor Company. [Link]
  • The San Francisco Intellectual Property Law Association is hosting its annual seminar in Healdsburg, the center of one of California's best wine regions, from June 1-3. Speakers include Hon. Margaret A. (Peggy) Focarino, USPTO Commissioner of Patents, Hon. Robert Stoll, former USPTO Commissioner of Patents, Hon. Gerard F. Rogers, Chief Administrative Trademark Judge of the TTAB, Hon. Randall R. Rader, Chief Judge of Federal Circuit, Hon. Susan Illston, Judge of N.D.CA, Hon. Edward J. Davila, Judge of N.D.CA, as well as professors and leading practitioners. [Link]
  • On May 21-22 Ronald Slusky will hold a seminar in Chicago, the seminar teaches a comprehensive approach to analyzing inventions and capturing them in a sophisticated set of patent claims. The seminar is based on Ronald's book, Invention Analysis and Claiming: Patent Lawyer's Guide. [Link]
  • ACI will hold a Biosimilars conference May 22-23 in New York, NY. The conference will focus on the legal, regulatory, and commercial realities of biosimilars. [Link]
  • The ACI 3rd annual Hatch-Waxman Boot Camp will be held June 25-26 in San Diego. Topics to be covered include: the organization, jurisdiction of the FDA and the PTO and their interplay in the patenting of drugs and biologics, how the approval process for drugs and biologics is connected to the patenting of these products, how the Hatch-Waxman Act established the paradigm for market entry of generic small molecule drugs – and how biosimilar and many others. [Link]

Contact Lawrence.Higgins@patentlyo.com with leads for future Bits and Bytes.

Patently-O Bits & Bytes by Lawrence Higgins

Patent, , , ,

IP's contribution to the US economy

  • A recent USPTO whitepaper reports that IP industries contribute $5 trillion and 40 million jobs to the US economy. Some of the report major findings are:
    • The entire US economy relies on some form of IP, because virtually every industry either produces or uses it.
    • IP-intensive industries directly accounted for 27.1 million American jobs, or 18.8% of all employment in the economy, in 2010.
    • Jobs in IP-intensive industries pay well compared to other jobs. Average weekly wages for IP-intensive industries were 42% higher than the average weekly wages in non IP-intensive industries.
    • Growth in copyright-intensive industries (2.4%), patent-intensive industries (2.3%), and trademark-intensive industries (1.1%) all outpaced gains in non-IP intensive industries.

    Report

Rights of the dead

  • At Coachella 2012 Tupac Shakur appeared on stage and as if he was actually alive and performing. What rights does the family of Tupac or other deceased entertainers have when it comes to situations like this?
  • California Civil code Section 3344.1 (a)(1) reads in part:
    • Any person who uses a deceased personality's name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods, or services, without prior consent from the person or persons specified… shall be liable for any damages…

    Section (a) (2) reads:

    • For purposes of this subdivision, a play, book, magazine, newspaper, musical composition, audiovisual work, radio or television program, single and original work of art… shall not be considered a product, article of merchandise, good, or service if it is fictional or nonfictional entertainment, or a dramatic, literary, or musical work.

    Having a dead celebrity performing electronically on stage seems like it falls into the audiovisual work exception under section (a) (2). I have yet to see anyone attempt to file a business-method patent on the dead touring, but I assume that someone may attempt to monopolize the business. [Link]

Patent Jobs:

  • Edell, Shapiro & Finnan is seeking an experienced EE patent attorney with an advanced degree in EE or physics. The firm is also seeking an associate/agent/tech writer with an EE or computer science degree to work at their Rockville, MD office. [Link]
  • Amgen is searching for Sr. Counsel with 4 years of patent or IP practice to work at their California location. [Link]
  • North Star IP is looking for a patent associate with 3 to 4+ years of prosecution experience and a background in EE, computer engineering, or computer science to work at their DC office. [Link]
  • Sterne, Kessler, Goldstein & Fox is seeking experienced electrical IP attorneys with a degree in EE or computer engineering to work at their DC office. [Link]
  • Cantor Colburn is searching for an associate ME/EE patent attorney with 3-5 years of experience. [Link]
  • Cantor Colburn is looking for IP litigation associates with 2-4 years of litigation experience. [Link]
  • The Kohler Company is seeking an IP attorney with 2+ years of experience to work at their Kohler, Wisconsin location. [Link]
  • Rutan & Tucker is searching for a patent associate/agent with 3-4 years of experience to work at their California office. [Link]
  • Rathe Lindenbaum is looking for a patent attorney/agent with experience in mechanical, electromechanical or chemical engineering and 3+ years of experience to work at their Milwaukee office. [Link]
  • NONY is looking for a US patent attorney/agent or UK patent attorney to work at their Paris, France office. [Link]

Upcoming Events:

  • The University of Colorado School of Law will hold a conference on April 24th. The conference, Patents on the Range or Wild Frontier, will discuss the future of patent policy. Guest speakers include: David Kappos, Don Rosenberg, John Thorne, Paul Ohm, Bernard Chao, and many others. [Link]
  • ACI will hold its 6th Annual Paragraph IV Disputes conference on April 24-25 in New York City. The conference will cover topics such as: the impact of the AIA on Hatch-Waxman litigation, claim construction, prior art obviousness and obvious-type double patenting, and many other topics. (Patently-O readers register with PO 200 for a discount). [Link]
  • The DC Bar IP Law Section 2012 Annual Spring Reception will be held April 25th. The D.C. Bar Intellectual Property Law Section awards the 2012 "Champion of Intellectual Property" Award to the late Paul J. Luckern, Chief Judge of the International Trade Commission. Guest include Chief Judge Randall R. Rader of the U.S. Court of Appeals for the Federal Circuit, Judge Theodore R. Essex of the ITC, and Lynn I. Levine, Director of the ITC's Office of Unfair Import Investigations. [Link]
  • Fitch, Even, Tabin & Flannery, LLP will present a free one-hour CLE webinar, "Trademark Protection Strategies in Social Media," on April 25, 2012 at 12 noon EST. The proliferation of social media outlets frequented by millions of users have created untold opportunities for trademark exposure and potential infringement. Joseph T. Nabor will discuss strategies to protect trademarks in the social media arena, including monitoring and enforcement against infringement, creating social media policies, related ethics issues, and using social media in litigation support. [Link]
  • LES 2012 Spring Meeting – "Licensing to Solve the Innovation Gap" will be held May 15-17, Boston, MA. Speakers from GE Healthcare, Harvard, Hoffmann-LaRoche, Intel, Johnson & Johnson, Merck, MIT, Pfizer, Stanford and more will share their expertise on licensing to solve the innovation gap. (Patently-O readers save $100 by using promo code PO12 when registering) [Link]
  • The World Research Group is holding its 4th Annual Corporate IP Counsel Forum on May 16-17 in NYC. The Corporate IP Counsel Forum will address key issues and uncover latest developments related to IP in the form of case studies and panel discussions. Some of the topics include, but are not limited to: The America Invents Act and its impact on patent litigation and prosecution, IP monetization strategies for small and mid-size companies, Patent valuation, The top 10 most influential court cases in IP this year, Patent eligibility, Invention mining, Divided infringement, Best practices for combating non-practicing entities, Appeals to the U.S. Court of Appeals for the Federal Circuit, Copyright infringement. [Link]
  • The Annual DRI Business Litigation and Intellectual Property Seminar will be held May 16-18, 2012, in New York City. Attendees will learn trial and appellate advocacy skills in business litigation get up-to-date on the last trends in intellectual property and business litigation, and network with in-house counsel, business and intellectual property trial lawyers and experts from across the country. Speakers include: Former ABA President, Dennis W. Archer, Dennis Archer PLLC, and David Leitch, VP and General Counsel of Ford Motor Company. [Link]
  • The San Francisco Intellectual Property Law Association is hosting its annual seminar in Healdsburg, the center of one of California's best wine regions, from June 1-3. Speakers include Hon. Margaret A. (Peggy) Focarino, USPTO Commissioner of Patents, Hon. Robert Stoll, former USPTO Commissioner of Patents, Hon. Gerard F. Rogers, Chief Administrative Trademark Judge of the TTAB, Hon. Randall R. Rader, Chief Judge of Federal Circuit, Hon. Susan Illston, Judge of N.D.CA, Hon. Edward J. Davila, Judge of N.D.CA, as well as professors and leading practitioners. [Link]
  • On May 21-22 Ronald Slusky will hold a seminar in Chicago, the seminar teaches a comprehensive approach to analyzing inventions and capturing them in a sophisticated set of patent claims. The seminar is based on Ronald's book, Invention Analysis and Claiming: Patent Lawyer's Guide. [Link]
  • ACI will hold a Biosimilars conference May 22-23 in New York, NY. The conference will focus on the legal, regulatory, and commercial realities of biosimilars. [Link]
  • The ACI 3rd annual Hatch-Waxman Boot Camp will be held June 25-26 in San Diego. Topics to be covered include: the organization, jurisdiction of the FDA and the PTO and their interplay in the patenting of drugs and biologics, how the approval process for drugs and biologics is connected to the patenting of these products, how the Hatch-Waxman Act established the paradigm for market entry of generic small molecule drugs – and how biosimilar and many others. [Link]

Contact Lawrence.Higgins@patentlyo.com with leads for future Bits and Bytes.

Supreme Court to Hear International Copyright Exhaustion Case

Patent, , , , ,

By Dennis Crouch

Kirtsaeng v. John Wiley & Sons, Inc. (Supreme Court 2012)

The Supreme Court has granted certiorari in another international copyright exhaustion case. Previously, in Omega v. Costco, the court stalled in a 4-4 tie and left the case without an opinion. Copyright exhaustion – also known as the “first sale doctrine” – is codified under 17 U.S.C. § 109(a) and allows the holder of a copy of a work “lawfully made under this title” to sell or otherwise dispose of the copy without the copyright holder’s permission. Without this doctrine, such a sale could be considered a violation of the copyright holder’s exclusive distribution rights under section 106(3). The question in this case is whether the exhaustion doctrine applies to authorized copies manufactured outside of the US and then imported. Copyright holders argue that exhaustion does not apply because the foreign copies were not “lawfully made under this title,” but instead were lawfully made in a region not subject to US copyright law. A win for the copyright holders would support a system of price discrimination that would allow a rights-holder to block third-party imports of legitimate (non-counterfeit) products into the US. The rule would also tend to encourage foreign manufacture.

The question presented:

How do Section 602(a)(1) of the Copyright Act, which prohibits the importation of a work without the authority of the copyright’s owner, and Section 109(a) of the Copyright Act, which allows the owner of a copy “lawfully made under this title” to sell or otherwise dispose of the copy without the copyright owner’s permission, apply to a copy that was made and legally acquired abroad and then imported into the United States?

The case is expected to be argued this fall.

Exclusive Rights of Importation: The particular facts of the case are interesting. John Wiley sells textbooks at a reduced rate in Thailand. Kirtsaeng imported eight Wiley books and resold them in the US. Although Wiley had profited from the original sale in Thailand, the company argued that the importation also violated US law because the foreign sale did not exhaust the copyright and that, therefore, Wiley maintained exclusive rights of importation and distribution. A jury awarded Wiley statutory damages of $75,000 per copy for a total of $600,000 for the eight books. The Second Circuit affirmed that judgment.

Patent Law: Patent law’s exhaustion doctrine is not based upon a statute but does run roughly parallel to the copyright law as outlined above. In the Jazz Photo cases, the Federal Circuit ruled that international sale does not exhaust US patent rights. If the Supreme Court reverses in Kirtsaeng, this will likely be seen as an implicit reversal of Jazz Photo and its progeny. Thus, the case will obviously impact patent law. The AIPLA filed a brief in support of the petition – focusing on the need for resolving the circuit split.

John Wiley’s cases are still pending against various patent law firms for failing to obtain a license to make copies of prior art documents before making copies and submitting those to the USPTO as required by law. The defendant law firms are expected to file their answers later this month.

Patently-O Bits & Bytes by Lawrence Higgins

Patent, , ,

Are Companies Acting as Government Contractors Immune From Patent Infringement Suits?

  • The CAFC, in Zoltek Corp. v. United States, No. 2009-5135 (Fed. Cir. Mar. 14, 2012), Zoltek was the assignee of a patent for manufacturing carbon fiber sheets with controlled surface electrical resistivity. The carbon fiber at issue was used by Lockheed Martin to build the F-22 fighter jet, pursuant to a government contract. The manufacturing of the fibers started in Japan, and thereafter imported into the US, where the fibers were processed into sheets and used for F-22.

    The court held that when the US is subject to suit under 28 USC 1498(a) for alleged infringement of a patent by a contractor acting by and for the US, the contractor by law is rendered immune from individual liability for the alleged infringement. The court further held that, when a product of a patented process is… imported into the US by or for the US, there is direct infringement under a 1498 action. (In addition the US waives sovereign immunity) Opinion

    28 USC 1498

    • (a) Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner's remedy shall be by action against the United States in the United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture.
    • (c)The provisions of this section shall not apply to any claim arising in a foreign country.

USPTO Will Admit 10 Additional Schools into its Patent Law Clinic Certification Pilot Program

  • The Pilot Program started began in 2008 with 6 schools and expanded in 2010 to 16 schools. Students in the patent program can expect to draft and file a patent application and respond to an office action. Each law school clinical program must meet and maintain the requirements for USPTO certification in order for student practitioners to practice before the USPTO. The program provides real-world experience to students interested in the field of IP. Submissions will be accepted through June 1, 2012. [Link]

Patent Jobs:

  • Hoffmann & Baron is seeking a patent attorney/agent with a minimum of 3-5 years of experience in the areas of computers and business methods to work in their Parsippany, NJ office. [Link]
  • Faegre Baker Daniel's is searching for a patent agent with a degree in EE or CS and patent experience to work in their Chicago office. [Link]
  • Larson Newman is looking for patent attorneys with an EE degree and 3-5 years of experience to work in their Austin office. [Link]
  • Akerman Senterfitt is seeking a chemical patent associate with 1-3 years of experience to work in their Denver office. [Link]
  • Gilead Sciences is searching for patent litigation counsel with a BS in life sciences and 5-8 years of experience to work at their Foster City, CA office. [Link]
  • Carlson, Gaskey & Olds is looking for a patent attorney with 4-8 years of patent litigation experience to work at their Birmingham, MI office. [Link]
  • Klarquist Sparkman is seeking a litigation associate with 1-2 years of experience to work in their Portland office. [Link]
  • Klarquist Sparkman is seeking a patent attorney/agent with an advanced degree in organic chemistry and 3+ years of experience to work in their Portland office. [Link]
  • Cardinal Intellectual Property is looking for a patent search professional with a JD degree and a technical degree to work remotely. [Link]
  • Berkeley Lab is searching for a patent attorney with at least 5 years of experience as a patent attorney/agent. [Link]
  • Faegre Baker Daniels is seeking a trademark litigation associate with 2-3 years of trademark and copyright litigation experience to work in their Minneapolis office. [Link]
  • Cardinal Intellectual Property is looking for a patent search attorney to work at their Evanston, IL location. [Link]
  • Wellstat Management Company is searching for a patent attorney/agent with at least 5 years of experience and a background in biomedical or mechanical engineering to work at their Gaithersburg, MD location. [Link]
  • Stroock
  • Faegre Baker Daniels is looking for a junior patent litigation associate with 1-2 years of experience to work in their Denver or Boulder office. [Link]
  • Nixon & Vanderhye is searching for a patent attorney/agent with experience drafting and prosecuting patent applications to work in their Arlington, VA office. [Link]
  • The DuPont Company is seeking patent agents with experience in preparing and prosecuting patent applications under USPTO TC1600 to work at their Wilmington, DE location. [Link]
  • Covidien is looking for an IP attorney with 4-6 years of experience to work at their New Haven, CT location. [Link]
  • Hagens Berman is searching for a patent litigation attorney with 3+ years of experience to work at their Seattle office. [Link]
  • The USPTO is seeking patent examiners with an engineering degree to work at their Alexandria or Detroit locations. [Link]

Upcoming Events:

  • On April 10th join the United States Patent and Trademark Office Managers, Design Examiners, Design Patent Practitioners and Industrial Designers from across the country in a lively and thought-provoking discussion at the USPTO. They will discuss rules and techniques relating to proper graphic descriptions of design patent claims, confer on best practices aimed at the broadest protection of industrial designs in the United States, and hear from members of the design community on the importance of strong industrial design protection in an increasingly design-conscious world. [Link]
  • The IP Section of the Atlanta Bar Association and Georgia State University Law School will hold its 8th annual SpringPosium at the Barnsley Gardens resort on April 13 &14. Some example seminars will include: the new America Invents Act, Federal Court best practices, IP law and life practice management, and recent developments in damages law. Guest speakers include: Clerk of Court and Chief Deputy Clerk of the US Court of Appeals for the Federal Circuit, Jan Horbaly and Pamela Twiford and Clerk of Court of the US District Court for the North District of Georgia, James Hatten.
  • The European Generic Medicines Association is hosting the 10th EGA International Symposium regarding Biosimilar Medicines on April 19-20 in London. Greenblum & Bernstein is providing a pre-symposium workshop on April 19, 2012 titled: Biosimilars In America: IP Strategy and Due Diligence. The workshop will explore the mechanics of the Biologics Act with an emphasis on how the Act relates to the involved intellectual property and how the intellectual property may impact the biosimilar applicant's strategy for entering the market. [Link]
  • The University of Colorado School of Law will hold a conference on April 24th. The conference, Patents on the Range or Wild Frontier, will discuss the future of patent policy. Guest speakers include: David Kappos, Don Rosenberg, John Thorne, Paul Ohm, Bernard Chao, and many others. [Link]
  • ACI will hold its 6th Annual Paragraph IV Disputes conference on April 24-25 in New York City. The conference will cover topics such as: the impact of the AIA on Hatch-Waxman litigation, claim construction, prior art obviousness and obvious-type double patenting, and many other topics. (Patently-O readers register with PO 200 for a discount). [Link]
  • The World Research Group is holding its 4th Annual Corporate IP Counsel Forum on May 16-17 in NYC. The Corporate IP Counsel Forum will address key issues and uncover latest developments related to IP in the form of case studies and panel discussions. Some of the topics include, but are not limited to: The America Invents Act and its impact on patent litigation and prosecution, IP monetization strategies for small and mid-size companies, Patent valuation, The top 10 most influential court cases in IP this year, Patent eligibility, Invention mining, Divided infringement, Best practices for combating non-practicing entities, Appeals to the U.S. Court of Appeals for the Federal Circuit, Copyright infringement. [Link]
  • The Annual DRI Business Litigation and Intellectual Property Seminar will be held May 16-18, 2012, in New York City. Attendees will learn trial and appellate advocacy skills in business litigation get up-to-date on the last trends in intellectual property and business litigation, and network with in-house counsel, business and intellectual property trial lawyers and experts from across the country. Speakers include: Former ABA President, Dennis W. Archer, Dennis Archer PLLC, and David Leitch, VP and General Counsel of Ford Motor Company. [Link]
  • The San Francisco Intellectual Property Law Association is hosting its annual seminar in Healdsburg, the center of one of California's best wine regions, from June 1-3. Speakers include Hon. Margaret A. (Peggy) Focarino, USPTO Commissioner of Patents, Hon. Robert Stoll, former USPTO Commissioner of Patents, Hon. Gerard F. Rogers, Chief Administrative Trademark Judge of the TTAB, Hon. Randy R. Rader, Chief Judge of Federal Circuit, Hon. Susan Illston, Judge of N.D.CA, Hon. Edward J. Davila, Judge of N.D.CA, as well as professors and leading practitioners. [Link]
  • On May 21-22 Ronald Slusky will hold a seminar in Chicago, the seminar teaches a comprehensive approach to analyzing inventions and capturing them in a sophisticated set of patent claims. The seminar is based on Ronald's book, Invention Analysis and Claiming: Patent Lawyer's Guide. [Link]
  • ACI will hold a Biosimilars conference May 22-23 in New York, NY. The conference will focus on the legal, regulatory, and commercial realities of biosimilars. [Link]

Contact Lawrence.Higgins@patentlyo.com with leads for future Bits and Bytes.

Patently-O Bits & Bytes by Lawrence Higgins

Patent, , ,

Are Companies Acting as Government Contractors Immune From Patent Infringement Suits?

  • The CAFC, in Zoltek Corp. v. United States, No. 2009-5135 (Fed. Cir. Mar. 14, 2012), Zoltek was the assignee of a patent for manufacturing carbon fiber sheets with controlled surface electrical resistivity. The carbon fiber at issue was used by Lockheed Martin to build the F-22 fighter jet, pursuant to a government contract. The manufacturing of the fibers started in Japan, and thereafter imported into the US, where the fibers were processed into sheets and used for F-22.

    The court held that when the US is subject to suit under 28 USC 1498(a) for alleged infringement of a patent by a contractor acting by and for the US, the contractor by law is rendered immune from individual liability for the alleged infringement. The court further held that, when a product of a patented process is… imported into the US by or for the US, there is direct infringement under a 1498 action. (In addition the US waives sovereign immunity) Opinion

    28 USC 1498

    • (a) Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner's remedy shall be by action against the United States in the United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture.
    • (c)The provisions of this section shall not apply to any claim arising in a foreign country.

USPTO Will Admit 10 Additional Schools into its Patent Law Clinic Certification Pilot Program

  • The Pilot Program started began in 2008 with 6 schools and expanded in 2010 to 16 schools. Students in the patent program can expect to draft and file a patent application and respond to an office action. Each law school clinical program must meet and maintain the requirements for USPTO certification in order for student practitioners to practice before the USPTO. The program provides real-world experience to students interested in the field of IP. Submissions will be accepted through June 1, 2012. [Link]

Patent Jobs:

  • Hoffmann & Baron is seeking a patent attorney/agent with a minimum of 3-5 years of experience in the areas of computers and business methods to work in their Parsippany, NJ office. [Link]
  • Faegre Baker Daniel's is searching for a patent agent with a degree in EE or CS and patent experience to work in their Chicago office. [Link]
  • Larson Newman is looking for patent attorneys with an EE degree and 3-5 years of experience to work in their Austin office. [Link]
  • Akerman Senterfitt is seeking a chemical patent associate with 1-3 years of experience to work in their Denver office. [Link]
  • Gilead Sciences is searching for patent litigation counsel with a BS in life sciences and 5-8 years of experience to work at their Foster City, CA office. [Link]
  • Carlson, Gaskey & Olds is looking for a patent attorney with 4-8 years of patent litigation experience to work at their Birmingham, MI office. [Link]
  • Klarquist Sparkman is seeking a litigation associate with 1-2 years of experience to work in their Portland office. [Link]
  • Klarquist Sparkman is seeking a patent attorney/agent with an advanced degree in organic chemistry and 3+ years of experience to work in their Portland office. [Link]
  • Cardinal Intellectual Property is looking for a patent search professional with a JD degree and a technical degree to work remotely. [Link]
  • Berkeley Lab is searching for a patent attorney with at least 5 years of experience as a patent attorney/agent. [Link]
  • Faegre Baker Daniels is seeking a trademark litigation associate with 2-3 years of trademark and copyright litigation experience to work in their Minneapolis office. [Link]
  • Cardinal Intellectual Property is looking for a patent search attorney to work at their Evanston, IL location. [Link]
  • Wellstat Management Company is searching for a patent attorney/agent with at least 5 years of experience and a background in biomedical or mechanical engineering to work at their Gaithersburg, MD location. [Link]
  • Stroock
  • Faegre Baker Daniels is looking for a junior patent litigation associate with 1-2 years of experience to work in their Denver or Boulder office. [Link]
  • Nixon & Vanderhye is searching for a patent attorney/agent with experience drafting and prosecuting patent applications to work in their Arlington, VA office. [Link]
  • The DuPont Company is seeking patent agents with experience in preparing and prosecuting patent applications under USPTO TC1600 to work at their Wilmington, DE location. [Link]
  • Covidien is looking for an IP attorney with 4-6 years of experience to work at their New Haven, CT location. [Link]
  • Hagens Berman is searching for a patent litigation attorney with 3+ years of experience to work at their Seattle office. [Link]
  • The USPTO is seeking patent examiners with an engineering degree to work at their Alexandria or Detroit locations. [Link]

Upcoming Events:

  • On April 10th join the United States Patent and Trademark Office Managers, Design Examiners, Design Patent Practitioners and Industrial Designers from across the country in a lively and thought-provoking discussion at the USPTO. They will discuss rules and techniques relating to proper graphic descriptions of design patent claims, confer on best practices aimed at the broadest protection of industrial designs in the United States, and hear from members of the design community on the importance of strong industrial design protection in an increasingly design-conscious world. [Link]
  • The IP Section of the Atlanta Bar Association and Georgia State University Law School will hold its 8th annual SpringPosium at the Barnsley Gardens resort on April 13 &14. Some example seminars will include: the new America Invents Act, Federal Court best practices, IP law and life practice management, and recent developments in damages law. Guest speakers include: Clerk of Court and Chief Deputy Clerk of the US Court of Appeals for the Federal Circuit, Jan Horbaly and Pamela Twiford and Clerk of Court of the US District Court for the North District of Georgia, James Hatten.
  • The European Generic Medicines Association is hosting the 10th EGA International Symposium regarding Biosimilar Medicines on April 19-20 in London. Greenblum & Bernstein is providing a pre-symposium workshop on April 19, 2012 titled: Biosimilars In America: IP Strategy and Due Diligence. The workshop will explore the mechanics of the Biologics Act with an emphasis on how the Act relates to the involved intellectual property and how the intellectual property may impact the biosimilar applicant's strategy for entering the market. [Link]
  • The University of Colorado School of Law will hold a conference on April 24th. The conference, Patents on the Range or Wild Frontier, will discuss the future of patent policy. Guest speakers include: David Kappos, Don Rosenberg, John Thorne, Paul Ohm, Bernard Chao, and many others. [Link]
  • ACI will hold its 6th Annual Paragraph IV Disputes conference on April 24-25 in New York City. The conference will cover topics such as: the impact of the AIA on Hatch-Waxman litigation, claim construction, prior art obviousness and obvious-type double patenting, and many other topics. (Patently-O readers register with PO 200 for a discount). [Link]
  • The World Research Group is holding its 4th Annual Corporate IP Counsel Forum on May 16-17 in NYC. The Corporate IP Counsel Forum will address key issues and uncover latest developments related to IP in the form of case studies and panel discussions. Some of the topics include, but are not limited to: The America Invents Act and its impact on patent litigation and prosecution, IP monetization strategies for small and mid-size companies, Patent valuation, The top 10 most influential court cases in IP this year, Patent eligibility, Invention mining, Divided infringement, Best practices for combating non-practicing entities, Appeals to the U.S. Court of Appeals for the Federal Circuit, Copyright infringement. [Link]
  • The Annual DRI Business Litigation and Intellectual Property Seminar will be held May 16-18, 2012, in New York City. Attendees will learn trial and appellate advocacy skills in business litigation get up-to-date on the last trends in intellectual property and business litigation, and network with in-house counsel, business and intellectual property trial lawyers and experts from across the country. Speakers include: Former ABA President, Dennis W. Archer, Dennis Archer PLLC, and David Leitch, VP and General Counsel of Ford Motor Company. [Link]
  • The San Francisco Intellectual Property Law Association is hosting its annual seminar in Healdsburg, the center of one of California's best wine regions, from June 1-3. Speakers include Hon. Margaret A. (Peggy) Focarino, USPTO Commissioner of Patents, Hon. Robert Stoll, former USPTO Commissioner of Patents, Hon. Gerard F. Rogers, Chief Administrative Trademark Judge of the TTAB, Hon. Randy R. Rader, Chief Judge of Federal Circuit, Hon. Susan Illston, Judge of N.D.CA, Hon. Edward J. Davila, Judge of N.D.CA, as well as professors and leading practitioners. [Link]
  • On May 21-22 Ronald Slusky will hold a seminar in Chicago, the seminar teaches a comprehensive approach to analyzing inventions and capturing them in a sophisticated set of patent claims. The seminar is based on Ronald's book, Invention Analysis and Claiming: Patent Lawyer's Guide. [Link]
  • ACI will hold a Biosimilars conference May 22-23 in New York, NY. The conference will focus on the legal, regulatory, and commercial realities of biosimilars. [Link]

Contact Lawrence.Higgins@patentlyo.com with leads for future Bits and Bytes.

Supreme Court: Solving Claim Construction?

Patent, , , ,

032312_0335_ClaimConstr1
by Dennis Crouch

Retractable Techs., Inc. v. Becton, Dickinson & Co. (on petition for certiorari 2012)

As its company name suggests, Retractable Technologies makes safety syringes that retract after completing a drug injection. Retractable sued BD for patent infringement and won $5 million in damages and permanent injunctive relief. This was the second time that Retractable had filed a lawsuit to enforce its patent. In both cases, the district court interpreted the claim term syringe "body" as encompassing a body "composed of one or multiple pieces." (In the first case, the accused infringer agreed to stop making its product and to pay a $1 million settlement).

On appeal here, BD was able to convince a two-member majority of its Federal Circuit panel to modify the claim construction in a way that limits the "body" element to a "one-piece body." (Majority opinion by Judges Lourie and Plager). The appellate panel narrowly construed the term based upon its reading of the patent specification and the notion that the claims should be limited to what "the inventor actually invented." In dissent, Chief Judge Rader argued that the majority had improperly confined claim scope to the specific embodiments of the invention." Chief Judge Rader also argued in favor of giving more weight to the doctrine of claim differentiation. Here, some of the non-asserted claims in the patent included an explicit "one-piece body" limitation – suggesting that the asserted claim without the "one-piece" limitation must be broader.

After losing the appeal, Retractable filed a petition for rehearing and rehearing en banc. The petition was denied, but Judges Moore and O'Malley each filed dissents.

Supreme Court Petition: Retractable has now filed a petition for writ of certiorari to the United States Supreme Court. The petition raises two questions:

1. Whether a court may depart from the plain and ordinary meaning of a term in a patent claim based on language in the patent specification, where the patentee has neither expressly disavowed the plain meaning of the claim term nor expressly defined the term in a way that differs from its plain meaning.

2. Whether claim construction, including underlying factual issues that are integral to claim construction, is a purely legal question subject to de novo review on appeal.

First Question Goes Nowhere: In my view, the first question presented is not well stated. Of course a court can use context to provide meaning to claim language. A formalistic and restrictive view of patent doctrine was rejected by the Supreme Court in virtually every recent decision, including Mayo, Bilski, KSR, eBay, and MedImmune. Further, many members of the Supreme Court have identified a problem with vague and over-broad claim limitations, and the majority opinion here provides a simple tool for limiting scope: interpret the claims within the context of what was demonstrably understood by the inventor and the examiner and by what would have been known by a reasonably skilled artisan.

Use Specification to Narrow (or Broaden): There are times when the context of the specification is used to broaden the scope of a claim term beyond its ordinary meaning. However, the Federal Circuit judges appear to believe that greater reliance on the specification will usually result in a narrowing of claim scope. Thus, the debate on the role of the specification in claim construction is at least partially a proxy for the debate on whether patents should be given a broad scope or narrow scope. I would again criticize the petition – this time for wholly agreeing that reliance on the specification results in a narrowed scope. Retractable frames the debate on trying to understand "the circumstances in which the language of the specification should narrow the plain meaning of a claim term."

The Second Question is more well framed, although I would have tweaked it slightly to ask: "Whether claim construction, including underlying factual issues that are integral to claim construction, is a purely legal question [that is therefore] subject to de novo review on appeal." The tweak here is important because Retractable is not challenging the Supreme Court's Markman decision but rather challenging the Federal Circuit's Cybor decision. In Markman, the Supreme Court recognized the reality that claim construction includes a number of factual determinations – calling the process a "mongrel" of fact and law. However, the court ruled that claim construction should be treated as an issue of law to be decided by a judge. In Cybor, the Federal Circuit applied its usual formalistic if-then approach to rule that appellate review must be de novo because claim construction is an issue of law. From the petition:

In Markman, this Court held that, for purposes of the Seventh Amendment, the task of construing patent claims falls to trial judges rather than juries. Markman did not decide the standard of review that an appellate court should apply to a district court's claim construction. The Court noted, however, that the process of construing a claim is a "mongrel practice," that "falls somewhere between a pristine legal standard and a simple historical fact." In holding that trial judges are "better suited" for this task than juries, the Court recognized that claim construction requires trial judges to exercise a "trained ability to evaluate the testimony in relation to the overall structure of the patent." Accordingly, the Court held that "there is sufficient reason to treat construction of terms of art like many other responsibilities that we cede to a judge in the normal course of trial, notwithstanding its evidentiary underpinnings." Thus, Markman recognized that claim construction involves underlying factual questions, and said nothing to indicate that the Federal Circuit should displace the district court's resolution of those questions.

There are lots of doctrines that receive de novo review that do not have a reversal rate anywhere near that of claim construction. I think that everyone agrees that claim construction is inherently difficult. Claim construction rulings do not provide a yes-no answer like you might find in an obviousness judgment. Rather, a judge is required to identify the best interpretation of all possible interpretations of each contested claim term. And, unlike statutory interpretation, we do not have the benefit of the scope being developed over time through a series of cases. Rather, in most instances, a court's construction is in the first instance. In addition to the inherent difficulty, claim construction is made more difficult because of the open panel dependence of claim construction decisions. For many years the Federal Circuit refused to admit any panel dependence in its decision making, that has changed.

Where to Focus Assurances?: District court judges complain about claim construction because of the high likelihood that their decisions will be reversed on appeal. Giving deference to district court judgments would likely mean fewer reversals. This approach gives us certainty earlier in the process, but only once the district court issues a final claim construction. That date still seems very late. The scope of patent claims is of critical importance to almost all patent monetization transactions. However, very few of those transactions take place in conjunction with a district court claim construction decision. We need a process for substantially understanding claim scope at a much earlier stage and without relying on a federal court.

One answer for an early understanding of claim scope: Define terms during prosecution. If applicants fail to define terms, examiners should provide their own definitions as part of the office action. In the short-term, the focus should be on terms that are (1) frequently debated in court (such as "server" or "coupled to"; (2) used in the specification in a way that is in tension with the ordinary meaning of a term; or (3) inherently imprecise (such as "about").

Notes: