tag:blogger.com,1999:blog-37760313409847516402024-03-05T21:32:04.037-08:00THE POINT OF NOVELTYThe Point of Novelty will explore trends, events and policies that impact intellectual property rights.
The views and opinions expressed in this blog are solely those of the author, and are not necessarily those of Andrews Kurth LLP. The information provided in this blog is for educational purposes only and are not conveying legal advice or services. Prior results do not guarantee a similar outcome. No attorney-client relationship is established by activity on this blog.Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.comBlogger64125tag:blogger.com,1999:blog-3776031340984751640.post-26067455168386895342013-06-26T06:40:00.000-07:002013-06-26T15:18:22.616-07:00The Federal Circuit Opens the Door to an Additional Defense to Inducement<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">It is well established law that liability for inducement
requires the specific intent to induce another to infringe.<span style="mso-spacerun: yes;"> </span>It is also well established law that a
defendant may rely on a good faith belief that the there is no patent
infringement to defeat the intent element.<span style="mso-spacerun: yes;"> <em>
</em></span><em>See DSU Medical Corp. v. JMS Co. Ltd.</em>, 471 F. 3d 1293 (Fed. Cir. 2006)
(<em>en banc</em>).<span style="mso-spacerun: yes;"> </span>What was not clear from the Federal Circuit's precedent, was
whether a defendant’s good faith belief that the patent in question was invalid
could also be used as evidence to overcome an allegation of inducement.<span style="mso-spacerun: yes;"> </span>That question has now been answered.<span style="mso-spacerun: yes;"> </span>In <a href="http://www.cafc.uscourts.gov/images/stories/opinions-orders/12-1042.Opinion.6-21-2013.1.PDF"><em>Commil USA v. Cisco Systems</em> 2012-1042</a> (Fed. Cir. June 25, 2013), the
majority held that <span style="color: purple;"><strong>“evidence of an accused inducer’s good-faith belief of
invalidity may negate the requisite intent for induced infringement.”</strong></span><span style="mso-spacerun: yes;"> </span>Opinion at<span style="mso-spacerun: yes;">
</span>11.<span style="mso-spacerun: yes;"> </span>This holding, however, does
not establish a bright line defense, as the Court went on to say “[t]his is, of
course, not to say that such evidence precludes a finding of induced
infringement. Rather, it is evidence that should be considered by the
fact-finder in determining whether an accused party knew<span style="mso-spacerun: yes;"> </span>‘that the induced acts constitute patent
infringement.’” Id. (citations omitted).<o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Judge Newman was on the three judge panel and issued a
strong dissent.<span style="mso-spacerun: yes;"> </span>A small snippet from her
dissenting opinion captures the theme:<o:p></o:p></span></div>
<blockquote class="tr_bq">
A good-faith belief of patent invalidity may be raised as a defense to willfulness of the infringement, but it is not a defense to the fact of infringement. Patent invalidity, if proved, eliminates an invalid patent and thus is a total defense to infringement. However, a “good-faith belief” in invalidity does not avoid liability for infringement when the patent is valid.1 No rule eliminates infringement of a valid patent, whether the infringement is direct or indirect. Newman Dissent at 2</blockquote>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The practical impact of this decision is significant.<span style="mso-spacerun: yes;"> </span>Evidence that a party believed a patent was
invalid, such as an opinion of counsel of invalidity or a well-founded
reexamination request, is now clearly admissible evidence that can be presented
not only to defend against willfulness (a damages issue), but also to defeat a
showing of liability when the theory of infringement rests on inducement. <o:p></o:p></span></div>
Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com7tag:blogger.com,1999:blog-3776031340984751640.post-45506238995960665262013-06-18T18:40:00.001-07:002013-06-19T06:07:22.378-07:00En Banc Federal Circuit Permits Appeals Prior to Damages and Willfulness Determinations<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">One of the guiding principles of appellate jurisdiction is
the “final judgment rule” that defers jurisdiction of an appellate court “until
there has been a decision by the district court that ends the litigation on the
merits and leaves nothing for the court to do but execute the judgment.”<span style="mso-spacerun: yes;"> </span><em>Firestone Tire & Rubber Co. v. Risjord</em>,
449 U.S. 368, 373 (1981).<span style="mso-spacerun: yes;"> </span>Much to the
chagrin of many a patent litigator and litigant, it is this principle that precludes
most interlocutory appeals (such as review of claim construction orders), no
matter how important the issue may be.<span style="mso-spacerun: yes;"> </span>There
is, however, an exception to the final judgment rule with respect to the Federal
Circuit’s jurisdiction hidden away in 28 U.S.C. 1292(c)(2), that permits
interlocutory appeals when a judgment is final “except for an accounting.” The
<em>en banc</em> Federal Circuit in <em><a href="http://www.cafc.uscourts.gov/images/stories/opinions-orders/11-1363.Opinion.6-11-2013.1.PDF">Robert Bosch, LLC v. Pylon Manufacturing Corp</a></em>., 2011-1363, 1364, June 14, 2013, took
on the question (<em>sua sponte</em>) whether an “accounting” as used in Section
1292(c)(2) includes (1) a trial on damages; and (2) a trial on the issue of
willfulness.<span style="mso-spacerun: yes;"> </span><span style="font-size: large;"><span style="color: blue;">A divided court (yet again)
held that, yes, the Federal Circuit does have jurisdiction over a case that is
final on all issues other than damages and willfulness.<o:p></o:p></span></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;"><span style="mso-tab-count: 1;"> </span>The <em>en
banc</em> decision comes complete with the majority opinion, two opinions concurring-in-part and
dissenting-in-part and a fourth opinion by O’Malley dissenting.<span style="mso-spacerun: yes;"> </span>It would be both fun and worthwhile to dive
into the details of the four opinions and analyze the continued fractures in
the court on this issue (and in general), but other than law school professors,
who has the time!<span style="mso-spacerun: yes;"> </span>Suffice it to say
that unless and until the Supreme Court chimes in on this issue, district court
judges now know that should they decide to bifurcate issues of damages and
willfulness (as is Judge Robinson’s practice in D. Del.), <span style="mso-spacerun: yes;"> </span>that decision will not impair the ability of
the parties to appeal a judgment on the liability issues.<span style="mso-spacerun: yes;">
</span><o:p></o:p></span></div>
Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com0tag:blogger.com,1999:blog-3776031340984751640.post-16570216848102636012013-03-28T06:32:00.001-07:002013-03-28T06:34:21.214-07:00Design Patent Practice UPDATE – Use Caution in Con’s<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">In prosecuting design patent applications, it is common practice to
use dashed lines to depict a feature of the design that is illustrated for
context or environment, but is not considered to be part of the claimed design.<span style="mso-spacerun: yes;"> </span>In continuation practice, it has also been common practice to
broaden the originally claimed design by amending the drawings to change solid
lines in the original design – which show what is claimed – to dashed lines depicting unclaimed
boundary lines.<span style="mso-spacerun: yes;"> </span>This later practice was
recently considered, and significantly limited, by the Federal Circuit in <a href="http://www.cafc.uscourts.gov/images/stories/opinions-orders/12-1261.Opinion.3-22-2013.1.PDF">In re Owens, 2012-1261, Fed. Cir., March 26, 2013 (“Owens”).</a><span style="mso-spacerun: yes;"> </span>In <em>Owens</em>, the Federal Circuit affirmed the
PTO’s rejection of Owens’ claimed design since the parent was deemed to lack
adequate written description for the continuation (so he could not claim the
benefit of the earlier filing date) and Owen had sold product more than one
year prior to the filing date of the continuation.<span style="mso-spacerun: yes;"> </span>As it turns out, <em><strong>the problem Owens had was
not with what he took out of the original claimed design, but what he put in—a
single dashed line intended to indicate that Owens was claiming part, but not
all, of a surface from the original design</strong></em>. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Owens’ original application claimed the design of a
mouthwash bottle design, as shown below. <span style="mso-spacerun: yes;"> </span>This application issued as D531,515.<span style="mso-spacerun: yes;"> </span>In an effort to get broader protection, Owens
filed a continuation application in which he dashed out all lines except those
defining four triangular shoulder portions and two small crescent portions
bounded by the shoulder portions.<span style="mso-spacerun: yes;"> </span>Owens
also wanted to claim a portion or the surface bounded by the triangular
shoulders and the crescent portion.<span style="mso-spacerun: yes;"> </span>To
depict where the portion of the surface that was being claimed ended, Owens added
a dashed line on the upper portion of the surface and removed the shading lines
below the dashed line.<span style="mso-spacerun: yes;"> </span>Significantly,
there was no existing contour line where this new dashed line was being
added.<span style="mso-spacerun: yes;"> </span>It is this new dashed line, that
all parties agree defines an unclaimed boundary, that is the center of the
controversy in this case.</span><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSJXOs9vxcVu_twhbYtGFZGB27kAp3EAEaWZOtmTreZT28rmywEH_ZWzu2ronaY9h_wkDctam9fcGjaj9INtk9npoVyCYHQYuwHjFaGElpx9TSTFgZrzqfkQr48klbSE4yQTPYQSk28I9W/s1600/BLOG+POST+-+OEWENS.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSJXOs9vxcVu_twhbYtGFZGB27kAp3EAEaWZOtmTreZT28rmywEH_ZWzu2ronaY9h_wkDctam9fcGjaj9INtk9npoVyCYHQYuwHjFaGElpx9TSTFgZrzqfkQr48klbSE4yQTPYQSk28I9W/s640/BLOG+POST+-+OEWENS.jpg" width="411" /></a></div>
<span style="font-family: Calibri;"><o:p></o:p></span> </div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The patent examiner concluded that the newly added dashed
line defined a “new” trapezoidal surface that was not previously claimed and
this newly claimed feature meant that Owens could not claim the benefit of the
original application’s filing date. <span style="mso-spacerun: yes;"> </span>It
was the examiner’s view that Owens was not in possession of the <em>claimed</em> subject
matter that only included a portion of the disclosed surface, at the time of
the original filing. <span style="mso-spacerun: yes;"> </span>(In other words,
there was insufficient written description under 35 U.S.C. 112 para. 1 in the
original application for the new claim.)<span style="mso-spacerun: yes;">
</span>Since Owens had sold bottles (of the original design)
more than 1 year prior to the filing date of the continuation application, the
examiner rejected the application under 35 U.S. C. 103 as being obvious over
Owens’ own prior art sales.<span style="mso-spacerun: yes;"> </span>The PTO board of
appeals affirmed.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">In affirming the PTO’s rejection, the Federal Circuit noted
that the written description requirement for design and utility patents is the
same.<span style="mso-spacerun: yes;"> </span>The court further noted that “when
the issue of priority arises under 120 in the context of design patents
prosecution, one looks to the drawings of the earlier application for
disclosure of the subject matter claimed in the later application.” [Opinion at
7, citations omitted] <span style="mso-spacerun: yes;"> </span><span style="color: #660000; font-size: large;">To distinguish
over<em> In re Daniels</em>, 144 F. 3d 1455 (Fed. Cir. 1998) the court arrived at the
somewhat strange result that</span> <span style="color: #660000; font-size: large;">removing an element in its entirety (as was the
case in <i style="mso-bidi-font-style: normal;">Daniels</i>) is permissible
whereas removing only a portion of the element (as Owens attempted to do) runs
afoul of the written description requirement.</span><span style="mso-spacerun: yes;">
</span>Although the question was not before the court, it seems that had Owens
simply dashed out the original contour lines and not added the dashed line dividing
the original surface (which would have made the claim even broader), the panel, following <em>In re Daniels</em>, would have been inclined to accept that as a proper
amendment resulting in a claim that was supported by the original application.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<span style="font-family: Calibri;">Owens will likely be significant in shaping future design
patent litigation and prosecution.<span style="mso-spacerun: yes;"> </span><span style="color: #660000; font-size: large;">A
substantial number of design patents have issued from continuation applications in which the applicant
broadened the original claim by adding dashed lines to define part of a
previously claimed feature.<span style="mso-spacerun: yes;"> </span>Under <em>Owens</em>,
the priority date of these patents, and the underlying validity of the patent claim, will be open
to new challenges.</span><span style="mso-spacerun: yes;"> </span>During prosecution, care
must be taken when preparing continuation applications.<span style="mso-spacerun: yes;"> </span><span style="font-size: large;"><span style="color: #660000;">Going forward, a prudent course may be to
file the original design application with figures depicting a number of
embodiments of varying scope ranging from the complete design to individual
features that may be novel, non-obvious and commercially important.<span style="mso-spacerun: yes;"> </span></span></span>This strategy will invite a restriction requirement
from the PTO and divisional practice, but it will be far easier to demonstrate
that the original application fully supports the later filed cases and avoid a later problem with written description.</span>Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com0tag:blogger.com,1999:blog-3776031340984751640.post-84488883026007060022013-03-04T14:03:00.002-08:002013-03-04T14:09:37.276-08:00More on the SHIELD ACTIn <a href="http://pointofnovelty.blogspot.com/2013/03/the-shield-act-is-creating-second-class.html">my post last week</a>, I provided some of my views on the recently proposed SHIELD Act.<br />
<br />
For some additional and differing thoughts on this topic, here is a <a href="http://www.dorsey.com/eu_patent_trolls_030413/">recent article written by one of my partner</a>s, <a href="http://www.dorsey.com/levitt_kenneth/">Ken Levitt</a>, also discussing (and generally supporting) this proposed legislation.<br />
<br />
<br />
<br />Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com1tag:blogger.com,1999:blog-3776031340984751640.post-71406272931740916572013-03-01T08:48:00.001-08:002013-03-04T06:29:03.147-08:00The SHIELD Act - Is creating “second class citizenship” for certain patent owners the answer to the “troll problem”?<br />
<div class="BodyTextFirst5" style="margin: 0in 0in 12pt;">
Rep. Peter DeFazio recently introduced a bill to the
House, H.R. 845, cited at the “Saving High-Tech Innovators from Egregious Legal
Disputes Act of 2013,” or by its cooler, short-hand name, <a href="http://www.scribd.com/doc/127669554/H-R-845-2013-Shield-Act-re-patent-trolls">the SHIELD Act.</a><span style="mso-spacerun: yes;"> </span>The SHIELD Act has a noble purpose.<span style="mso-spacerun: yes;"> </span>After all, who can argue with the proposition
that innovators deserve saving from egregious legal disputes?<span style="mso-spacerun: yes;"> </span>Despite the noble purpose, however, it is
reasonable to question whether the method being employed by this bill – singling
out a class of patent owners for disparate treatment by the courts – is the
right way to solve the “problem.”<span style="mso-spacerun: yes;"> </span>Let’s
explore.<o:p></o:p></div>
First, let’s consider what I perceive to be the <em>real </em>problem.<span style="mso-spacerun: yes;"> </span>There has been a growing trend over the last
decade for third parties to acquire patent rights as an investment vehicle and
assert those rights to obtain a return on their investment.<span style="mso-spacerun: yes;"> </span>Unfortunately, in many cases, the assertion
is utterly baseless, yet respectable companies with a need to make reasonable business
decisions are compelled to pay to settle these cases because it is far less expensive to
pay than it is to fight and win.<span style="mso-spacerun: yes;"> </span><b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span style="color: #0b5394;">This
is certainly a problem:<span style="mso-spacerun: yes;"> </span>bad actors
bringing frivolous patent suits against good companies with the goal of
extracting a settlement from those good companies based on the rational
business judgment that it is far less expensive to settle the frivolous suit
rather than pay much larger legal fees to prove non-infringement and
invalidity. </span></i></b><span style="mso-spacerun: yes;"> </span>No one can
reasonably defend this type of abusive conduct and any legislation that could effectively
eradicate this bad behavior, without prejudicing patent owners that did not engage
in such egregious conduct, would be a tremendous benefit.<span style="mso-spacerun: yes;"> The question is, does the SHIELD Act acomplish this difficult goal?</span><br />
<br />
<div class="BodyTextFirst5" style="margin: 0in 0in 12pt;">
The SHIELD Act has at its core a loser-pays provision
that will require some patent owners (hint – NPE’s) to “post a bond in an
amount determined by the court to cover the recovery of full costs [which
include “reasonable attorney’s fees”].<span style="mso-spacerun: yes;">
</span>If the patent owner does not prevail, on both infringement and validity,<span style="mso-spacerun: yes;"> </span>“the Court shall award the recovery of full
costs to any prevailing party asserting invalidity or noninfringement…upon the
entry of a final judgment if the court determines that the adverse party did
not meet at least one of the conditions described in subsection (d),” which
defines the special class of patent owners subject to this Act.<o:p></o:p></div>
Looking at subsection (d), the act applies to all patent
owners, <i style="mso-bidi-font-style: normal;">except</i> those that fit into an
enumerated exception.<span style="mso-spacerun: yes;"> </span>These exceptions
serve define who is a “good” patent owner who is outside the scope of the
act.<span style="mso-spacerun: yes;"> </span>The exceptions in subsection (d)
include (1) the “original inventor” or “original assignee” at the time of
patent issuance, (2) a party that can demonstrate “substantial investment…in
the exploitation of the patent through production or sale of an item covered by
the patent,” or (3) “University or Technology Transfer Organization[s]."<span style="mso-spacerun: yes;"> </span>When you take out these exceptions, the
SHIELD Act applies to entities that acquire the patent from the original owner
and do not currently practice the invention.<span style="mso-spacerun: yes;">
</span>This second-class of patent owners would be required to post a bond to
cover the defendant’s litigation costs – typically in the 1-3 Million dollar
range for a “simple” patent case with less than $25 Million in dispute – and
risk forfeiting this amount if they don’t win at trial.<span style="mso-spacerun: yes;"> </span><span style="color: blue;"><strong>It is important to note, that the fees are
not paid as a result of baseless litigation or misconduct.<span style="mso-spacerun: yes;"> </span>It is simply because the patent owner does not
prevail.</strong></span><br />
<o:p></o:p><br />
Even though I often represent corporate defendants accused of patent infringement by non-practicing patent owners, I am hesitant to define the “ NPE problem” more broadly to include all patent owners who don’t practice the patented invention but who have a <em><strong>reasonable and good faith basis</strong></em> to assert infringement.<span style="mso-spacerun: yes;"> </span>It is certainly a strategic concern for defendants that patent litigation against a non-practicing entity is the worst form of “assymetric warfare” with no upside for the defendant and little downside for the patent owner. <span style="mso-spacerun: yes;"> </span>It is also a practical business concern that once a defendant is named in a patent suit it is already a “loser” in that it must divert resources to address the suit, regardless of the merits.<span style="mso-spacerun: yes;"> </span>But, these concerns are not unique to patent litigation.<span style="mso-spacerun: yes;"> A</span> patent is simply a bundle of rights, and those rights shouldn’t depend on the nature of the patent owner.<span style="mso-spacerun: yes;"> After all, even a landowner that is a complete jerk still has the right to enforce his no tresspassing signs and keep people off of his property.</span><br />
<span style="mso-spacerun: yes;"></span><br />
<div class="BodyTextFirst5" style="margin: 0in 0in 12pt; text-indent: 0in;">
The exceptions in the Act are intended to isolate “patent
trolls” but will not be so limited.<span style="mso-spacerun: yes;"> </span>For example,
what happens if GOOD COMPANY assigns its patents to its own patent holding entity for tax or management purposes,<span style="mso-spacerun: yes;"> e.g., GOOD </span>COMPANY HOLDING LLC, (which is not uncommon),
and it does not make a product within the scope of one of its patents but its competitor
does with a directly competing product. If GOOD COMPANY wants to bring suit to stop the infringement or secure a
royalty from COMPETITOR, it would be subject to the SHIELD Act.<span style="mso-spacerun: yes;">
</span>Lets go one step further and assume that COMPETITOR brought the
first action and GOOD COMPANY asserted that same patent as a defensive counter-claim.<span style="mso-spacerun: yes;"> </span>Same result, GOOD COMPANY is subject to the
Act and may need to post a substantial bond in order to maintain its counterclaims.<span style="mso-spacerun: yes;"> </span>What about an “original inventor”
that wants to take advantage of the benefits of incorporation and assigns her rights to her company?<span style="mso-spacerun: yes;"> </span>That small company formed by the “original inventor” is now subject to
the SHIELD Act and must find a way to post a bond for several million dollars
before bringing suit, regardless of how meritorious (or not) the suit may be. It is not too difficult to think of more examples of how this Act may have unintended, or at least undesirable, consequences for many patent owners that are not "bad actors."</div>
<span style="mso-tab-count: 1;"> T</span>he SHIELD Act has a noble purpose in reducing the number
of baseless patent infringement suits, but it seems to be punishing the wrong
behavior.<span style="mso-spacerun: yes;"> </span>The “problem,” as
identified by the name of the Act, is “Egregious Legal Disputes.”<span style="mso-spacerun: yes;"> </span>This is the conduct that patent reform needs
to address rather than discriminating against a class of patent ownership that
cannot be properly tailored to truly solve the “problem” without significantly impairing the value of all patents.<span style="mso-spacerun: yes;"> </span><strong>The bench, the bar and Congress each have a responsibility to
keep looking at ways to curb litigation abuse and reduce litigation costs.</strong> <span style="mso-spacerun: yes;"> </span>I applaud Congressman DeFazio’s efforts to curb litigation abuse, but the SHIELD Act, as it currently stands, does not seem to be the answer
to the “problem.”<br />
<br />
The opinions expressed above are ONLY mine and should not be attributed to Dorsey & Whitney, its clients, or anyone else. (This is always the case, but worth mentioning again in connection with this posting since reasonable minds can certainly differ on this topic.)Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com1tag:blogger.com,1999:blog-3776031340984751640.post-25012525246777556822013-02-01T09:03:00.002-08:002013-02-01T09:05:21.206-08:00Recent and Upcoming Developments in Patent Law<strong>GUEST AUTHOR</strong>: <a href="http://www.dorsey.com/Engel_Josh/">Josh Engel, Dorsey & Whitney LLP</a><br />
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 6pt;">
<span style="font-family: "Times New Roman","serif"; font-size: 11.5pt;"><span style="mso-spacerun: yes;"> </span>Here’s a look at some of the recent and
upcoming developments in the patent law realm in Q1 2013.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 6pt;">
<u><span style="font-family: "Times New Roman","serif"; font-size: 11.5pt;"><strong>Patent
Litigation Update<o:p></o:p></strong></span></u></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 6pt;">
<span style="font-family: "Times New Roman","serif"; font-size: 11.5pt;"><span style="mso-spacerun: yes;"> </span>Patent litigation continues to be very prevalent
and very contentious as companies in many different industries continue to sue
each other for infringement of each others’ patents.<span style="mso-spacerun: yes;"> </span>Beyond the Apple v. Samsung family of cases
that seem to dominate most media coverage of patent litigation, hundreds and
thousands of other patent infringement cases quietly move along in the
background.<span style="mso-spacerun: yes;"> </span>Marvell, a semiconductor
manufacturer, lost a patent lawsuit to Carnegie Mellon University in December
2012, and was ordered to pay $1,169,140,271 in damages, which may be tripled in
the end if Carnegie Mellon can show willfulness.<span style="mso-spacerun: yes;"> </span>The jury found that Marvell infringed just
two claims related to signal/noise processing in computer memory technology.<span style="mso-spacerun: yes;"> </span>Just a few months earlier, in August 2012,
Monsanto won a $1,000,000,000 award against DuPont for infringing Monsanto’s
patents on roundup-ready plant technology.<span style="mso-spacerun: yes;">
</span>And, of course Apple was awarded $1,050,000,000 against Samsung in an
extremely contentious lawsuit over smartphone technology.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 6pt;">
<span style="font-family: "Times New Roman","serif"; font-size: 11.5pt;"><span style="mso-spacerun: yes;"> </span>While these cases are clearly outliers, and
the vast majority of patents never become nearly so important, the trend of
patent litigation is increasing, and the need for companies to secure their own
patents for offensive use, as well as the need to be ready to defend against
competitors’ patents, continues to be vital for companies in technology-heavy
industries.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 6pt;">
<u><span style="font-family: "Times New Roman","serif"; font-size: 11.5pt;"><strong>Patentable
Subject Matter<o:p></o:p></strong></span></u></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 6pt;">
<span style="font-family: "Times New Roman","serif"; font-size: 11.5pt;"><span style="mso-spacerun: yes;"> </span>One of the most divisive issues in patent
law today is “what is patentable?”<span style="mso-spacerun: yes;">
</span>Software and human-gene-related inventions are currently in the
cross-hairs, as the Federal Circuit (the appeals court that hears all
patent-related cases) and the US Supreme Court consider what types of
inventions should be eligible for patent protection.<span style="mso-spacerun: yes;"> </span>Software patents, in particular, have strong
proponents on both sides of the argument, with some arguing that mere computer
code should not be patentable because it is too ‘abstract’ and others arguing
that excluding patent protection for software would wreak havoc for nearly
every technology company that depends on patent laws to prevent competitors
from copying innovative system control inventions.<span style="mso-spacerun: yes;"> </span>Within the next few months, the Federal
Circuit will hear arguments and decide a case that will likely shape the
software patentability debate for years to come.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 6pt;">
<u><span style="font-family: "Times New Roman","serif"; font-size: 11.5pt;"><strong>Upcoming –
Patent Law Changes Effective March 16, 2013<o:p></o:p></strong></span></u></div>
<br />
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<span style="font-family: "Times New Roman","serif"; font-size: 11.5pt;"><span style="mso-spacerun: yes;"> </span>As part of the America Invents Act (AIA)
signed into law in 2011, on March 16, 2013, the United States will join the
rest of the world in having a “first-to-file” patent system.<span style="mso-spacerun: yes;"> </span>This is a change from our previous
“first-to-invent” system, and the most practical effect is that patent
applications filed after March 15 will be examined under a different set of
guidelines, at increased cost, and with more prior art available to the patent
office to reject patent applications.<span style="mso-spacerun: yes;">
</span>There are also procedural changes for patent applications filed after
March 15, and new ways to challenge a granted patent.<span style="mso-spacerun: yes;"> </span>In general, the best practice is to file a
patent application before March 15, if at all possible, so that it gets
examined under the previous “first-to-invent” rules.<span style="mso-spacerun: yes;"> </span><strong><span style="color: #cc0000;">After March 15, it will be all the more
important to be diligent in identifying patentable inventions and getting
applications for those inventions on file as quickly as possible.<span style="mso-spacerun: yes;"> </span>Any delay can result in a competitor winning
the “race to the patent office.”<o:p></o:p></span></strong></span></div>
<span style="font-family: "Times New Roman","serif"; font-size: 11.5pt;"><span style="mso-spacerun: yes;"> </span></span><br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 6pt;">
<u><span style="font-family: "Times New Roman","serif"; font-size: 11.5pt;"><strong>Upcoming –
Unified European Patent<o:p></o:p></strong></span></u></div>
<br />
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<span style="font-family: "Times New Roman","serif"; font-size: 11.5pt;"><span style="mso-spacerun: yes;"> </span>One of the most costly and complex regions
of the world in which to obtain and pursue patent protection, Europe, is likely
to get a facelift soon. <span style="mso-spacerun: yes;"> </span>In December 2012
the framework was set for implementation of a unified European patent, which
would streamline obtaining and enforcing patents throughout most of
Europe.<span style="mso-spacerun: yes;"> </span>Member states still must sign
onto the program, but at this point it looks like most all of Europe will
participate, with the notable exceptions of Spain and Italy (who will likely
dissent because the official languages of the unified patent, if you will, are
English, French, and German).<span style="mso-spacerun: yes;"> </span>The unified
patent program would eliminate or greatly reduce translation, validation, and
maintenance fee costs in each European country that presently cost patentees
thousands of dollars, and would also provide a common set of rules by which
European patents are examined and enforced.<span style="mso-spacerun: yes;">
</span><o:p></o:p></span></div>
--<br />
<br />
EDITOR'S NOTE - Many thanks to Josh Engel for providing this piece for use on the Point of Novelty!Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com1tag:blogger.com,1999:blog-3776031340984751640.post-9047698881847214112012-10-09T07:24:00.000-07:002012-10-09T08:24:31.382-07:00Extra, Extra! Despite Current Reports, The Patent System is Not Stifling Innovation<br />
<div class="MsoNormal">
For years, the main stream press has ignored patents. As an attorney who embraces our patent
system, I used to feel bad about being left out. Now, I am afraid, I feel worse.
The main stream press as of late
has stopped ignoring the patent system, and instead seems to be engaging in major league
patent bashing. Oh, how I long for the
good ol’ days.</div>
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<br /></div>
<div class="MsoNormal">
Yesterday’s New York Times featured an article “<a href="http://www.nytimes.com/2012/10/08/technology/patent-wars-among-tech-giants-can-stifle-competition.html?hp&_r=2&pagewanted=all&">The Patent, Used as a Sword,” </a>that paints a picture of a patent
system that is so badly broken that it is actually hindering the progress of
technology rather than following its Constitutional mandate to “promote science
and the useful arts.” My partner, <st2:personname w:st="on"><st1:givenname w:st="on">Kent</st1:givenname> <st1:sn w:st="on">Schmidt</st1:sn></st2:personname>,
discussed this article briefly in his post on the <a href="http://leftcoastlaw.com/patent-litigation/">Left Coast Law Blog</a>. I like Kent's post, but the Time's article - not so much. <st1:givenname w:st="on">Kent</st1:givenname>,
who is not a patent guy by trade, picks up on the article's theme and asks the natural
question this article begs: “Are we stifling competition and innovation” with our patent system? I feel inspired to answer.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The short answer to this question is NO. <span style="color: blue; font-size: large;">The patent system we currently have in place in
the U.S. is certainly far from perfect and is being abused by some, but our patent system, despite its flaws, generally works as intended. </span></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
The Time's article bemoans the nearly $20 Bil
reportedly spent on patent acquisitions and disputes over the last two
years. That is certainly a lot of money, but over
$12 Bil of this amount was spent by <a href="http://pointofnovelty.blogspot.com/2011/08/need-for-patents-drives-google.html">Google to acquire Motorola Mobility</a> – not just
patents, but an iconic U.S. company known for generations as an innovator. Years of innovation by Motorola were reflected in a robust patent portfolio that added substantial ongoing value to Motorola that was reflected in the purchase price of the company. Another $4.5 Bil was reportedly spent at auction to
acquire the Nortel patent portfolio, with the proceeds going to Nortel’s
bankruptcy estate to help make creditors whole. Although these patents fell into the hands of a licensing entity, Rockstar Consortium, the patents represent years of R&D investment that was captured by a substantial patent portfolio. As these two examples show, patents represent the conversion
of a company's R & D efforts into a tangible asset and create a critically important incentive
for investment in innovation. </div>
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<br /></div>
<div class="MsoNormal">
Patents not only serve to protect investment, but also spur the market forward. As noted in the Times’ article “[i]f Apple’s claims — which include
ownership of minor elements like rounded square icons and of more fundamental
smartphone technologies — prevail, <b>it
will most likely force competitors to overhaul how they design phones,</b>
industry experts say.” This statement is
intended to be some sort of dire warning from these unnamed “industry experts.”
I don’t get it though. This is exactly how
the system is supposed to work – an innovator gets a patent and can get
compensated for use of the innovation by others– that’s one part of a patent’s cycle
of promoting innovation. The limited
monopoly presented by the patent also inspires the rest of the world to
innovate to find new solutions to the problems addressed by the patent – that’s the
second half of the cycle of innovation spurred by patents. When a hurdle is placed on the track, it doesn't stop the gifted runner – it makes him work to get over it and still outpace his
competition. If competitors ultimately need to "overhaul how they design phones" because of patents, we will ultimately see new and better phones. The lack motivation to move past today’s <i>status quo</i>, such as the need to innovate around the
patent of another, presents a far bigger risk of stifling competition and
innovation than the current patent system does.</div>
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<br /></div>
<div class="MsoNormal">
The risk of low quality patents being issued and asserted is real and
improvements to patent examination are worth pursuing. Patent litigation is expensive and thoughtful
ways of reducing this expense and making it easier to ferret out bad patents are worth pursuing. That being said, we should not abandon a
system that is good in pursuit of a system that has unattainable perfection or no system of protection for innovation at all. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="color: blue; font-size: large;">The patent system is not perfect and likely never will
be. But, it is doing its job of balancing
the competing requirements of maintaining an open competitive marketplace and
rewarding innovators for bringing their ideas to the public for others to build
on. It is still an engine for "promoting science and the useful arts."</span></div>
<div class="MsoNormal">
<span style="color: blue; font-size: large;"><br /></span></div>
Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com1tag:blogger.com,1999:blog-3776031340984751640.post-91376106188323858482012-09-01T06:18:00.000-07:002012-09-01T06:19:47.296-07:00A Divided En Banc Federal Circuit Changes the Law of Divided Infringement<br />
<div class="MsoNormal">
For the last five years, the law with respect to liability
for inducement of a method claim was relatively clear and fairly consistently
applied. (A rare treat in patent law!) When infringement of a method
claim was based on inducement, there needed to be either one party performing
all of the steps of the claimed method or, if more than one party was involved
in performing the method, there needed to be a “mastermind” directing all of
the parties to perform the various steps of the method. Without a "mastermind" (later clarified as
requiring a contractual or agency relationship) there was no direct
infringement of the method and, therefore, no liability for inducement. The Federal Circuit took two cases <i>en banc</i> to
consider the propriety of this “single actor” requirement. <a href="http://www.cafc.uscourts.gov/images/stories/opinions-orders/09-1372-1380-1416-141710-1291.pdf">Akamai Technologies, Inc. v. LimelightNetworks, Inc., 2009-1372 and McKessonTechnologies, Inc. v. Epic Systems Corp., 2010-1291.</a> In a deeply divided decision, including a per
curiam opinion along with dissenting opinions by Newman and Linn (joined by
Dyk, Prost and O’Malley), the Federal Circuit announced a dramatic change in
the law<span style="font-size: large;">, </span><b>holding that</b> “we reconsider and overrule the 2007 decision of this
court in which we held that in order for a party to be liable for induced
infringement, some other single entity must be liable for direct
infringement. <i>BMC Resources, Inc. v.
Paymentech, <st1:givenname w:st="on">L.P.</st1:givenname></i>, 498 F.3d 1373 (Fed.
Cir. 2007). <b><span style="color: #990000;">To be clear, we hold that all the steps of a claimed method must be
performed in order to find induced infringement, but that it is not necessary
to prove that all the steps were committed by a single entity.” </span><o:p></o:p></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The majority opinion sets out the elements of the inducement
claim in the context of multiple actors as follows: When the party accused of infringement does
not itself perform any steps of the claimed method, such as in the <i>McKesson</i> case,
“a party can be found liable for inducing infringement if it can be shown that
(1) it knew of [the] patent, (2) it induced the performance of the steps of the
method claimed in the patent, and (3) those steps were performed.” Majority Opinion at 35. In the case where the
party accused of inducement performs some steps and another party performed
other steps, as in <i>Akamai</i>, the elements are slightly modified to “1) it knew of
[the] patent, (2) it performed all but one of the steps of the method claimed
in the patent, (3) it induced the [other party] to perform the final step of
the claimed method, and (4) the [other party] in fact performed that step.” Majority Opinion at 36. <span style="color: #990000;">From these two statements from the court, we
can generalize a bit, and set out the current law of inducement for a method
claim as a single set of elements: (1) the defendant knew of the patent; (2) it
either performed certain steps of the method claimed in the patent itself
and/or induced others to perform those steps; and (3) all steps of the method
were performed.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Interestingly, and much to the chagrin of <st2:personname w:st="on"><st1:givenname w:st="on">J.</st1:givenname> <st1:sn w:st="on">Newman</st1:sn></st2:personname>,
this holding only applies to inducement under 35 U.S.C § 271(b). With respect to direct infringement, the
majority punted, stating that “[b]ecause the reasoning of our decision today is not predicated on the doctrine of direct infringement, we have no occasion at this time to revisit any
of those principles regarding the law of divided infringement as it applies to
liability for direct infringement under 35 U.S.C. 271(a)." Majority Opinion at 13. As a result, the law remains that for direct
infringement liability, a single party needs to perform all steps of a
method. Those parties that perform only
some of the steps, but do not induce the performance of the remaining steps of a claimed method, can
still invoke divided infringement as a viable defense to an allegation of
infringement and likely face no liability.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<st2:personname w:st="on"><st1:givenname w:st="on">J.</st1:givenname>
<st1:sn w:st="on">Newman</st1:sn></st2:personname>, in her dissent, harshly
criticizes the majority, stating “[t]he majority’s theory is a spontaneous
judicial creation. And it is wrong.” <st1:sn w:st="on">Newman</st1:sn> dissent at
7. <st2:personname w:st="on"><st1:givenname w:st="on">J.</st1:givenname> <st1:sn w:st="on">Newman</st1:sn></st2:personname>
argues that precedent, legislative history and cannons of construction all
indicate that under 271(a) direct infringement can be established when multiple
actors perform the steps of the method and this act of direct infringement is
the necessary predicate for finding liability for inducement. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The Linn camp’s dissent is equally harsh on the majority,
arguing that “[t]he majority opinion is rooted in its conception of what
Congress ought to have done rather than what it did.” Linn dissent at 3. The Linn dissent argues that the single actor
rule is properly founded in 271(a) and, like <st2:personname w:st="on"><st1:givenname w:st="on">J.</st1:givenname> <st1:sn w:st="on">Newman</st1:sn></st2:personname>,
argues that precedent requires an act of direct infringement before there can
be liability for inducement. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="color: #990000; font-size: large;">As a result of this dramatic shift in the law, we can expect
an increase in patent cases asserting inducement for method claims. There are certainly patents out there with claims that were not asserted due to a divided infringement
issue, but now are back in play. Companies
that have previously evaluated patents and determined that they likely did not
have exposure for infringement of method claims based on a divided infringement
theory may need to revisit those patents and reevaluate those claims under this
new law.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Given the import of this issue and the deep divide in the
Federal Circuit, it would not be surprising to see this case go on the Supreme
Court for final resolution.</div>
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<br /></div>
<div class="MsoNormal">
<br /></div>
Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com1tag:blogger.com,1999:blog-3776031340984751640.post-22652966203991683292012-08-29T08:24:00.000-07:002012-08-29T08:24:37.315-07:00Parallel ITC Investigation and District Court Proceedings: Be Careful What You Ask For.<br />
<div class="MsoNormal">
Since the Supreme Court’s decision in <i>eBay</i> made it more
difficult to obtain injunctive relief in district court proceedings, patent
owners have given more attention to the International Trade Commission ("ITC") and have used parallel district court litigation and ITC investigations to pursue both money damages and injunctive relief. A recent initial determination terminating
the ITC investigation <i>In the Matter of Certain Video Displays</i>, 337-TA-828, highlights a potential pitfall with this approach. 337-TA-828, Order No. 9,
August 1, 2012. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In <i>Certain Video Displays</i>, complainant Mondis sought an
exclusion order from the ITC against certain TV’s and Video monitors. The asserted patents were previously asserted
successfully against the respondents in the ITC action in an earlier district
court case, <i>Mondis Technology Ltd. v. LG Electronics, Inc. et al.,</i> 07-CV-565
(E.D. Tex.). In this district court
action, a jury found that the defendants willfully infringed Mondis’ patents
and awarded damages. In a post-trial motion,
Mondis sought equitable relief in the form of ongoing royalties but did not seek an injunction from
the district court. After motion
practice, the district court ultimately ordered the defendants to pay on
ongoing royalty to Mondis for continued sales of the accused products. Respondents’
motion before <st2:personname w:st="on"><st1:givenname w:st="on">J.</st1:givenname>
<st1:sn w:st="on">Essex</st1:sn></st2:personname> at the ITC argued that the
payment of the court ordered ongoing royalty was effectively a license and that
sales subject to that royalty were not an act of infringement. Judge Essex agreed, stating that “the ALJ
finds that the ongoing royalty order constitutes a license authorizing CMI to
use the asserted patents’ claimed inventions for the products covered by that
the [sic] ongoing royalty order.” Order
at 21. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
This result sends a cautionary message to plaintiff/complainants that are pursuing parallel proceedings. If injunctive
relief is an ultimate objective of patent enforcement, it may be beneficial to run with the ITC
investigation ahead of the district court case. (Since ITC actions are typically significantly faster than
district court litigation, this generally occurs by default when the actions
are filed simultaneously, as is often the case). As <st2:personname w:st="on"><st1:givenname w:st="on">J.</st1:givenname> <st1:sn w:st="on">Essex</st1:sn></st2:personname>
noted, “in this case, the order [of cases] does matter,” since the district
court’s ongoing royalty order effectively stripped the ITC of jurisdiction. Order at 20. If, for strategic reasons, the district court
case does proceed first, the nature of any post trial relief from the district
court needs to be given significant consideration. For example, the plaintiff may forego ongoing royalties entirely
or it may be possible to fashion the scope of the ongoing royalty Order in a
way that would not foreclose a subsequent ITC action and exclusion order. For example, the plaintiff may seek a short “sunset”
royalty that only allows the defendant to continue sales for a short period of time and then expires. Alternatively,
the plaintiff may seek a provision in the district court order that discontinues ongoing royalty payment
obligations in the event an ITC action is initiated and during the pendency of
any ITC action. </div>
Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com4tag:blogger.com,1999:blog-3776031340984751640.post-87384601968590365052012-07-20T09:04:00.000-07:002012-07-24T10:40:04.428-07:00ITC on 337 Cases – No NPE Problem Here?<br />
<div class="MsoNormal">
In the wake of substantial lobbying by many companies in the tech
sector to limit ITC jurisdiction to prevent non-practicing entities (NPEs)
from initiating 337 actions, the ITC published a press release, <a href="http://www.usitc.gov/press_room/documents/featured_news/337facts.pdf">Facts and Trends Regarding USITC 337 Investigations</a>.
This "fact sheet" presents some interesting data on recent trends in ITC 337 investigations and spins it in a way
that suggests that there is no NPE problem at the ITC (and implying that no
remedial action by Congress is required.) </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The data illustrates a clear uptick in the ITC’s case load,
including NPE activity, since the Supreme Court’s 2006 EBay decision. It also shows that, while perhaps not dominating the
docket, NPE activity represents a significant portion of the ITC’s docket. In fact, since 2006, 18% of ITC
investigations were brought by NPEs, with what the ITC refers to as “category 1” NPEs (such as
universities) accounting for 10% and “category 2” NPEs (patent investors/enforcers,
sometimes called the not-so-nice term “trolls”) accounting for 8% of the ITC's 337 case load. This doesn’t seem too imbalanced at first blush. But, when one considers all of the enforceable IP rights in the U.S. that could form the basis of an ITC
complaint, Category 2 NPEs must own or control some minuscule percentage of those rights. As a percentage of IP
ownership, it can certainly be argued that Category 2 NPEs do in fact represent a
disproportionate share of the ITC docket. <br />
<br />
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
</div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfpFgIoJaeps__3_MxziWdQQSbkSIVHfbkg_gC5GwtzMsvH3NyxAjXaMgVIs1clxvoOiklPeBTtha6bJb_hHrl3fhzLhqr3K2hC-Ql3Oz88RpQSRc3mz_FezKAM_rcXXGVfiuGyTjw88jr/s1600/337+graphs.tif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfpFgIoJaeps__3_MxziWdQQSbkSIVHfbkg_gC5GwtzMsvH3NyxAjXaMgVIs1clxvoOiklPeBTtha6bJb_hHrl3fhzLhqr3K2hC-Ql3Oz88RpQSRc3mz_FezKAM_rcXXGVfiuGyTjw88jr/s640/337+graphs.tif" width="476" /></a></div>
<br /></div>
<div class="MsoNormal">
<o:p><br /></o:p></div>
<div class="MsoNormal">
With respect to settlements, the ITC data illustrates that on
average, about 50% of all 337 investigations are terminated by settlement or
consent order prior to completion of the investigation. Category 2 NPEs show a somewhat higher settlement percentage, at 61 %. This should not be
too surprising, though, since the Category 2 NPE business model is one that ultimately
seeks monetary compensation from patent enforcement efforts. Injunctive
relief, such as an exclusion order, only has value to a Category 2 NPE as a
source of leverage in maximizing a financial return, not as the ultimate relief obtained. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The ITC data is nicely presented in a short (four page) fact
sheet and is worth a look, even if you don’t agree with the ITC’s spin on the
data. The data is certainly not so compelling as to prove that there is no NPE problem at the ITC or otherwise end the debate as to whether the ITC's domestic industry requirement should be limited in such a way as to foreclose NPE access to the ITC.</div>Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com2tag:blogger.com,1999:blog-3776031340984751640.post-35733841449760448032012-07-20T07:18:00.000-07:002012-07-20T07:22:33.238-07:00Design Patents Deserve Some Respect<br />
<div class="MsoNormal">
In the hierarchy of intellectual property rights, the big
three are utility patents, trademarks and copyrights. Design patents, which protect the appearance
of a useful article and not its functionality, have long been relegated to
second class citizen status in the IP world and are often dismissed as
providing scope that is too narrow or providing too little return on
investment. This perception is misplaced
and, as demonstrated by recent developments in the ongoing global IP war
between Apple and Samsung, design patents and industrial design registrations
should be viewed as a valuable additions to an innovator's intellectual property
portfolio.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In one ongoing case in Apple and Samsung’s global patent battle, <i>Apple v. Samsung,</i> 11-CV-1846,
N.D. Cal., Apple is asserting seven utility patents and six design patents
against several Samsung smartphones and tablets. Samsung has returned fire with seven of its
own utility patents. Following a
preliminary injunction motion, <a href="http://www.cafc.uscourts.gov/images/stories/opinions-orders/12-1105.pdf">Federal Circuit appeal</a>, and remand, Samsung is now
facing a preliminary injunction on its Galaxy Tab 10.1 tablet computer. The preliminary injunction is not based on
any of Apple’s utility patents. Instead,
it is based on one of Apple’s design patents that cover ornamental features of
its iPad design, D504,889, that is ultimately going to prevent Samsung from
selling its popular tablet computer, at least until the issues are finally
decided at trial. </div>
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<span style="color: blue;"><span style="font-size: large;"><b>When a company invests in industrial design, succeeds in
making a great looking product, and that look is important in the marketplace,
design patents can be a powerful tool to help protect that investment</b>.</span> </span> Design patents are relatively inexpensive to
obtain and, if prosecuted thoughtfully, can be obtained with reasonable
scope. Enforcement is also less
expensive than utility patent litigation and can be quite effective. Its time for the poor design patent to get
the respect it deserves.</div>Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com0tag:blogger.com,1999:blog-3776031340984751640.post-66451809545446070442012-07-10T07:42:00.001-07:002012-07-10T07:42:30.823-07:00The Patent Eligible Subject Matter Debate Continues<br />
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No question in patent law in recent times has been quite as
vexing as the scope of patent eligible subject matter, especially as it relates
to computer-implemented methods. The
Supreme Court has addressed the issue twice in three years in <i>Bilski</i> and
<i>Prometheus Labs</i>, and we still seem no closer to understanding what makes an
invention “patent elibible” under 35 U.S.C. 101. The debate keeps on rolling along with the
Federal Circuit's recent decision in <i><a href="http://www.cafc.uscourts.gov/images/stories/opinions-orders/11-1301.pdf">CLS Bank Int’l v. Alice Corporation</a></i>,
2011-1301.</div>
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The claims at issue in CLS were found in three patents that each “cover a computerized trading platform for exchanging obligations in which a
trusted third party settles obligations between a first and second party so as
to eliminate ‘settlement risk..’”
Opinion at 2. The claims at issue
cover three different statutory classes, with method claims, system claims and article of
manufacture claims directed to computer instructions stored on computer
readable media. The district court analyzed
the claims in each class separately and found all claims invalid as not defining patent eligible subject matter under 35
U.S.C. 101. </div>
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In reversing the district court, the majority provided a
lengthy discussion on the history of patent eligibility cases, especially
addressing the “abstract idea” and “law of nature” exceptions to patent
eligibility. Opinion 11-21. (Since the first paragraph of the ten page analysis includes the quote 'Congress intended statutory subject matter to "include anything under the sun that is made by man,"' [citations omitted] you quickly get a sense where the majority is headed). At the end
of its 10 page discussion, <b><span style="background-color: white; color: #741b47; font-size: large;">the majority sets forth a somewhat remarkable
holding: “this court holds that when -- after taking all of the claim recitations
into consideration — it is not manifestly evident that claim is directed to a
patent ineligible abstract idea, that claim must not be deemed for that reason
to be inadequate under 101.” </span></b> Opinion at 20. I for one, am lost by this statement. A patent is presumed valid and a party
seeking to invalidate a patent claim must do so by clear and convincing
evidence. It was my impression that this
same standard applies to defenses under 35 U.S.C. 101.
I am not sure what “manifestly evident” is, but it sounds like a higher
burden than clear and convincing evidence.
Perhaps, the defendant’s new burden on this issue is to prove by clear and
convincing evidence that it is “manifestly evident that [an asserted] claim is
directed to a patent ineligible abstract idea” in order to prevail on this
issue? </div>
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The case includes a spirited dissent by J. Prost (with barbs and jabs
laced throughout both the majority and dissenting opinions) that argues that “[t]he
majority has failed to follow the Supreme Court’s instructions—not just in its
holding, but more importantly in its approach.”
Dissent at 3.</div>
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Much more could be said about this 27 page opinion and 11
page dissent. But, since the petition
for rehearing <i>en banc</i> is likely already being drafted (and in my opinion will
likely be granted), we might as well wait for the <i>en banc</i> opinion to delve
deeper into this case. </div>
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<br /></div>Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com0tag:blogger.com,1999:blog-3776031340984751640.post-77704136292387043832012-06-13T08:59:00.000-07:002012-06-13T08:59:10.231-07:00Stating A Claim for Patent Infringement<br />
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Since 2007 when the Supreme
Court decided <i>Bell Atlantic v. Twombly</i>, 550 U.S. 544 (2007), there has been debate
(and motion practice) over what is required in a complaint to adequately plead
a cause of action for patent infringement.
The debate centers on the tension between recent Supreme Court decisions
(<i>Twombly</i> and <i>Iqbal</i>) which require pleading enough facts to “state a claim to
relief that is plausible on its face” and Form 18 that is found in the Federal
Rules of Civil Procedure, which requires only bare notice pleading. This issue was squarely presented in <i><a href="http://www.cafc.uscourts.gov/images/stories/opinions-orders/10-1493-1494-1495-149611-1101-1102.pdf">R &L Carriers v. Drivertech LLC et al., </a></i> 2010-1493, Fed. <st1:givenname w:st="on">Cir.</st1:givenname>
June 7, 2012. </div>
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In <i>R & L Carriers</i>, the complaint alleged counts of
contributory infringement and inducement against a number of defendants. In pleading these counts of indirect
infringement, the complaint alleged that certain of defendant’s customers were
directly infringing the asserted patent.
The district court found that the allegations of direct infringement did
not contain sufficient factual allegations to plausibly establish that any
actor performed all steps of the asserted method claim and therefore did not
satisfy the pleading requirements of <i>Iqbal</i> and <i>Twombly.</i> Further, the district court found that the
facts set forth in the complaint demonstrated that the accused systems actually
had numerous non-infringing uses and, therefore, found that the allegations of
contributory infringement could not be sustained. Finally, the court held that the complaint
failed to plausibly plead that the defendants had the requisite specific intent
to induce infringement. The amended
complaint was dismissed.</div>
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With respect to direct infringement, the Federal Circuit
reversed and held that <b><span style="color: blue;">“as long as the complaint in question contains specific
factual allegations to meet the requirements of Form 18, the complaint has
sufficiently pled direct infringement.”</span> </b>
Opinion at 19. In discussing the pleading
requirements for direct infringement, the Court pointed out that “Form 18 and the
Federal Rules of Civil Procedure do not require a plaintiff to plead facts establishing
that each element of an asserted claim is met…Indeed, a plaintiff need not even
identify which claims it asserts are being infringed.” Opinion at 17. Addressing the interplay between recent
Supreme Court precedent and Form 18, the majority opinion states that <b><span style="color: blue;">“to the
extent the parties argue that Twombly and its progeny conflict with the Forms
and create differing pleadings requirements, the Forms control..”</span></b><span style="font-size: large;"> </span> Opinion at 15. </div>
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In addressing the counts of indirect infringement, the Court
found that “[t]he Forms are only controlling for causes of action for which
there are sample pleadings.” Opinion at
20. <span style="color: blue; font-weight: bold;">“[B]ecause Form 18 addresses only direct
infringement, we must look to Supreme Court precedent for guidance regarding
the pleading requirements for claims of indirect infringement.” </span><i>Id.</i> In other words, to adequately plead indirect
infringement, the complaint must plead facts sufficient to plausibly establish
each element of the cause of action.
With respect to contributory infringement, this includes, <i>inter alia</i>,
facts sufficient to establish that the accused components have no substantial
non-infringing uses. For inducement,
this requires facts sufficient to reasonably infer that the defendant had the
specific intent to induce infringement.
Merely reciting the elements without a factual pleading to support those
elements will not suffice.</div>
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The Court found that the detailed factual allegations set
forth in the complaint actually undermined the allegation of contributory
infringement by establishing that the accused products have substantial
non-infringing uses. “Where a product is equally capable of, and
interchangeably capable of, both infringing and substantial non-infringing uses
a claim for contributory infringement does not lie.” Opinion at 23. In this case, the Federal Circuit found that plaintiff’s
complaint “supplies the very facts which defeat its claims of contributory
infringement.”</div>
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Turning to inducement, with its specific intent element, the
complaint included allegations that defendants’ employees had made statements touting
the benefits of the patented method and that these statements were made after the
defendant had received a cease and desist letter making it aware of the
asserted patent. Under these facts, the
Federal Circuit agreed that sufficient facts were pled to make a plausible allegation
that defendants “intended to induce its customers to use its products to
practice the patented method and did so with knowledge of the patent.” Opinion at 29. At the pleading stage, the “’plausibility requirement…simply calls for
enough facts to raise a reasonable expectation that discovery will reveal’ that
the defendant is liable for the misconduct alleged.” Opinion at 30, citing <i>Twombly.</i> Here, the Federal Circuit found that the
complaint was sufficient to meet this standard.</div>
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<span style="font-size: large;"><b>In summary: for direct
infringement, Form 18 is sufficient. For
Indirect infringement (or other cause of action not covered by a specific Form),
<i>Twombly</i> and its progency control and the
complaint must set forth a factual basis to support a reasonable inference that
each element of the cause of action is satisfied. For contributory infringement, use caution in
pleading facts that may establish non-infringing uses for an accused product.</b></span></div>Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com4tag:blogger.com,1999:blog-3776031340984751640.post-7217101462011093602012-06-12T08:50:00.000-07:002012-06-12T08:50:28.077-07:00In re Baxter: A Second Bite at the Apple Was Sweet<br />
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A couple of weeks back, the Federal Circuit decided <i>In re </i><st1:sn w:st="on"><i>Baxte</i>r</st1:sn>, affirming a patent office Board decision of
obviousness. <a href="http://www.cafc.uscourts.gov/images/stories/opinions-orders/11-1073.pdf">2011-1073, May 17, 2012</a>. That
result, by itself, is hardly noteworthy.
The Board was addressing a patent in an <i>ex parte </i>reexamination, that not
surprisingly, was brought by a defendant involved in a patent infringement
action, Fresenius, USA , Inc. So, an
unsurprising result, with an unsurprising history. Why then, are we even talking about this
case? OK, here is the twist. In the litigation, the district court held that
Fresenius failed as a matter of law to meet its burden to prove invalidity of
the asserted claims. That decision was
appealed and the Federal Circuit affirmed, holding that “Fresenius failed to
present any evidence- let along substantial evidence- that the structure
corresponding [to one claim element] existed in the prior art.” Fresenius USA, Inc. v. <st1:sn w:st="on">Baxter</st1:sn>,
Int’l 582 F.3d 1288, 1299 (Fed. Cir. 2009). Now, three years later, based on largely the same (but not quite identical) prior art,
the Federal Circuit affirmed the Board decision that the same claims previously affirmed are indeed
invalid as obvious. </div>
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Why the different result?
The short answer is that the Board decision is based on a different
evidentiary standard, there is no “presumption of validity” in reexaminations,
and the standard of appellate review for board decisions is deferential, applying a “substantial
evidence” standard. The original holding
in <i>Fresnius</i> was not that the asserted claims were valid. It was a holding affirming that the defendant did not meet the clear and convincing standard to establish invalidity. In contrast, in order to reverse the Board's finding of invalidity,
the Federal Circuit would have had to find that the decision was not supported
by substantial evidence. In this case,
the Federal Circuit found the Board’s decision was well supported. Opinion 14-15.</div>
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The <st1:sn w:st="on">Baxter</st1:sn> decision highlights
tension in the roles of the district court and the patent office. Typically, when a party looses an issue and
all appeals are exhausted, that issue cannot be relitigated by that party. Typically, government agencies are bound by final decisions of the courts.
However, the <st1:sn w:st="on"><i>Baxter</i></st1:sn> court deferred to
Congress and its own precedent noting that “Congress has provided for a
reexamination system that permits challenges to patents by third parties, even
those who have lost prior judicial proceedings.” Opinion at 15. <span style="font-size: large;"><b>As a result, unless Congress decides to change the
reexamination statute, the possibility remains that a party seeking to
invalidate a patent can take two full bites at the apple.</b></span></div>
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<st2:personname w:st="on">Judge <st1:sn w:st="on">Newman</st1:sn></st2:personname>
presented a ten page dissent in which she argues that the Board decision
amounted to improper “agenc[y] nullification of this court’s final decision”
and violated principals of law of the case, litigation repose, estoppel and
issue preclusion. I am a huge fan of <st2:personname w:st="on">Judge <st1:sn w:st="on">Newman</st1:sn></st2:personname>, and many of
her arguments are (as usual) compelling. But, there
are a couple of points about her dissent that I don’t quite understand. She argues that “[a] patent that has been<i> adjudicated to be valid </i>cannot be
invalidated by administrative action, any more than a patent adjudicated to be
invalid can be restored to life by administrative action.” District courts to not find patents “valid,”
however. When a patent survives a
validity challenge at the district court, the court is finding that the
challenged claims are <i>not invalid</i>
based on the evidence presented. Finding
a patent claim invalid in a subsequent agency action with a different party
(the PTO), different evidentiary record, and different procedural standard does not seem at all inconsistent. The
other point causing me angst deals with issue preclusion and estoppel. Even though the reexamination was initiated
by Fresnius, it was an <i>ex parte </i>proceeding and the patent office, not Fresnius,
was the party to the decision being appealed.
Since the patent office was not a party to the district court action, it
is unclear why issue preclusion and estoppel should attach with respect to the
patent office. </div>Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com0tag:blogger.com,1999:blog-3776031340984751640.post-56202184363677907562012-05-15T08:23:00.000-07:002012-05-15T08:23:18.345-07:00EU Court confirms that copyright is limited to code, not its function<span style="color: #333333; font-family: "Verdana","sans-serif"; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">As reported by my partner, <a href="http://www.dorsey.com/moscona_ron/">Ron Moscona</a>, a</span><span style="color: #333333; font-family: Verdana, sans-serif; font-size: 9pt;">ccording to the recent decision of the Court of Justice of the European
Union (“ECJ”) in </span><em style="color: #333333; font-family: Verdana, sans-serif; font-size: 9pt;">SAS
Institute Inc. (“SAS Institute”) v World Programming Ltd (“WPL”)</em><span style="color: #333333; font-family: Verdana, sans-serif; font-size: 9pt;">,
the defendant did not infringe the claimant’s copyright by effectively reverse
engineering the SAS software and writing a new program closely emulating the
functionality of the SAS software. The decision of the ECJ lays down an
important statement of principles in relation to the extent to which copyright
protects computer programs (but not their functionality) under European Union
law, although in respect of some practical aspects of the matter the Court’s
decision fails to provide useful guidance.</span><br />
<span style="color: #333333; font-family: Verdana, sans-serif; font-size: 9pt;"><br /></span><br />
<span style="color: #333333; font-family: Verdana, sans-serif; font-size: 9pt;">Check out Ron's full article on this case by clicking <a href="http://www.dorsey.com/eu_moscona_copyright_computer_program_0514/">here</a>.</span><br />
<span style="color: #333333; font-family: Verdana, sans-serif; font-size: 9pt;"><br /></span><br />
<span style="color: #333333; font-family: Verdana, sans-serif; font-size: 9pt;">Thanks, Ron!</span>Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com0tag:blogger.com,1999:blog-3776031340984751640.post-82408974225476710042012-03-30T12:58:00.000-07:002012-03-30T12:58:52.394-07:00Its a Law...of Nature: Mayo Collaborative Services v. Prometheus Labs.The Supreme Court has again wrestled with the topic of patent eligible subject matter. <i>Mayo Collaborative Services v. Prometheus Laboratories. </i> The bad news - I am too busy with my real work to write about this case. The good news - some others in my firm were able to write a short article to help us all understand this issue better.<br />
<br />
Click <a href="http://www.dorsey.com/eu_patent_mayopatentability_033012/">here </a>to read the article and get some insights on the latest regarding the scope of what can and can't be patented.<br />
<br />
Many thanks to Kimpton Eng, Jennifer Lane Spaith, and Elen Wetzel for preparing this to educate us all!Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com0tag:blogger.com,1999:blog-3776031340984751640.post-76178758693908493232011-12-21T08:06:00.000-08:002011-12-21T08:06:20.984-08:00Why so quiet?Sadly, it has been a while since I posted on the Point of Novelty.<br />
<br />
The reason for the hiatus is two-fold: First, I have just been really busy since the beginning of October; Second, and perhaps more on point, it has bee a fairly quiet couple of months for significant developments in IP law. The Federal Circuit has only issued three precedential patent opinions so far this month and only three in November, and none of those cases excited me enough to sit down and write about them.<br />
<br />
The lack of activity over the last two months suggests that we may see a flurry of activity early in the new year and I expect to get back on track with more regular posts. Until then, I wish you all a very happy holiday season and a wonderful new year.<br />
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Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com0tag:blogger.com,1999:blog-3776031340984751640.post-68553804846664633632011-09-16T09:31:00.000-07:002011-09-16T10:02:09.858-07:00Patent Reform Bill Becomes Patent Reform LawNo surprises here, but now its official. President Obama has signed the America Invents Act and has now officially brought us patent reform. As of today, the old <i>qui tam</i> false marking cases are dead. As of today, multi-defendant patent cases will be less frequent. As of today, the clock is ticking to when the other significant provisions of the new law go into effect. If nothing else, it should be interesting. Stay tuned.Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com0tag:blogger.com,1999:blog-3776031340984751640.post-21571920639469242152011-09-15T12:29:00.000-07:002011-09-16T08:17:11.839-07:00Highlights of the America Invents ActI didn't get around to writing up a summary of the changes that are coming when H.R. 1249 gets the President's signature this week. Fortunately, many others have. Here is <a href="http://www.dorsey.com/eu_ip_leahysmith_91411/">a link to one such write up </a>put together by Ken Levitt and Ryan Fortin in Dorsey's Minneapolis office. Thanks guys!<br />
<br />Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com0tag:blogger.com,1999:blog-3776031340984751640.post-65809978529335148842011-09-15T06:54:00.000-07:002011-09-15T09:07:58.961-07:00Unintended Consequences from Patent Reform- Joinder and the Race to the Courthouse<br />
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One of the many features of the America Invents Act, is a
new statute addressing joinder in patent cases. (Added as 35 U.S.C. 299). Under this new section of the Patent Act, a
plaintiff will no longer be able to group unrelated defendants together simply
because they are accused of infringing the same patent. Once President Obama signs the patent reform bill into
law (which is expected to happen tomorrow), there will need to be a legitimate factual nexus among the various
defendants – which in most cases will require making, using or selling the same
product.</div>
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What this means for plaintiffs’ is that in more cases than
not, new cases will have only one defendant per complaint instead of the large
collection of defendants that are now common in most patent cases. This won’t stop the case from being filed, of
course, but will result in a modest increase in transaction costs for filing a
complaint since for 10 defendants a plaintiff will need to file 10 complaints
and pay $3500 in filing fees instead of $350.
(We should expect to see a spike in the number of patent cases filed
next year, since the “typical” case filed recently will now require multiple
filings). This change should also make
it easier for individual defendants seeking to transfer the case from a venue
that it has little or no connection to, since (in theory) it no longer needs to
consider the potential ties other defendants may have to the plaintiff’s chosen
forum. On the downside, it may also make
the logistics of joint defense groups slightly more complicated as defendants’
will need to coordinate across a number of related cases instead of acting
within a single case. (As a practical
matter, I expect that most judges will likely be inclined to consolidate the related cases at
least for purposes of discovery, minimizing the logistical complications.)</div>
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So, what are the unintended consequences referred to in
the title of this post? It may be
coincidence (if you believe in such stuff), but the number of multi-defendant
cases filed since the Senate passed the patent reform bill seems unusually
high. <span class="Apple-style-span" style="color: blue; font-size: large;">PriorSmart litigation alerts so far this week show 88 new complaints with 515 defendants, including today's report of 18 new complaints against a whopping 196 defendants.</span> It looks like plaintiffs are
racing to the court house to get there last multi-defendant complaints filed
before President Obama signs the bill into law and changes the rules of the
game. No one is being sued who wouldn’t
eventually be sued anyway, but they may be seeing the lawsuit a bit
sooner. Welcome to the brave new world of patent reform.</div>
Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com1tag:blogger.com,1999:blog-3776031340984751640.post-51270777284433607142011-09-14T09:38:00.000-07:002011-09-15T09:08:31.137-07:00Does First Inventor To File REALLY favor Big Business?<br />
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Patent reform is now a reality. The bill is in the hands of <st2:personname w:st="on">President <st1:sn w:st="on">Obama</st1:sn></st2:personname> and it’s
expected that it will be signed into law on Friday. One of the significant and controversial changes
in the America Invents Act is that patents will now be awarded to the first
inventor to file, rather than the first inventor. Every time first-to-file has been proposed
for the U.S., many commentators would cry out that first-to-file is bad for
small companies and individual inventors since large corporations have the
resources needed to get applications on file fast. <span class="Apple-style-span" style="color: blue; font-size: large;"><b>Clearly, big corporations have financial
resources, but does that really mean that they have an edge in a first-to-file
system? </b></span><br />
<span class="Apple-style-span" style="color: blue; font-size: large;"><b><br /></b></span></div>
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In a race to the patent office, speed and agility will be
at a premium. Currently at many large companies,
the large budget – those resources that the commentators all fear- comes with a
price. Layers of corporate bureaucracy make the
process from invention to filing fairly long. Many months, sometimes years may
pass before an application is filed. <span class="Apple-style-span" style="background-color: white;"><span class="Apple-style-span" style="color: blue;"><span class="Apple-style-span" style="font-size: large;"> <b>For these large companies to succeed in a
first-to-file paradigm, the process currently used to identify inventions,
gather and evaluate invention disclosures from inventors, approve a disclosure
for filing, prepare the application, and approve the application for filing need
to be reviewed and streamlined.</b></span><b> </b> </span></span> These companies are currently built for power,
not speed, and need to change their thinking or suffer a disadvantage in the
first-to-file system. <br />
<br /></div>
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In contrast, small companies, should be able to move
quickly to get applications for important inventions on file. Budget will, of course, play a part in the
decision to move forward, but its certainly not the only (or main) factor that
will determine who has the advantage in the new first inventor to file
paradigm. The reduced patent office fees
available for small entities, the strategic use of provisional patent
applications, and a lower cost “Track 3” filing system that will be rolled out by the patent office that will allow
applicants to pay a lower fee to file while deferring examination for a later
date, should provide small entities with the tools needed to insure that the
first inventor to file system serves them well.<br />
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In short, I don’t believe that the first inventor to file
system will inherently favor big entities over small. It will ultimately favor those that adapt
best to the new system. Ladies and
gentleman, start your engines – the race to the patent office is on.</div>
Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com2tag:blogger.com,1999:blog-3776031340984751640.post-74603181368056073472011-08-25T09:23:00.000-07:002011-08-25T09:23:52.399-07:00Steve Jobs: Visionary and Prolific Inventor on Design PatentsIn the wake of Steve Jobs' announcement that he is stepping down as C.E.O. of Apple<a href="http://www.nytimes.com/interactive/2011/08/24/technology/steve-jobs-patents.html?hp">, today's New York Times has an interesting interactive piece </a>illustrating over 300 patents in which Mr. Jobs is a named inventor.<br />
Given Apple's ability to consistently deliver sleek consumer products with a unique look and feel over the years, it is not too surprising that a majority of these patents are design patents, rather than utility patents. Creative industrial design has been a hallmark of Apple, and Apple recognized that this key aspect of its innovation was worthy of protection. <br />
<br />
The lesson from Steve Jobs: If you invest in distinguishing your product in the market place with unique industrial design, you should also protect that investment through design patent protection. <br />
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<br />Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com0tag:blogger.com,1999:blog-3776031340984751640.post-43893470225507173902011-08-19T08:04:00.000-07:002011-08-31T07:29:02.626-07:00Parallel Networks: Judge Davis Grants Summary Judgment in Favor of 99 DefendantsFollowing up on my June 9 post regarding the Parallel Networks case, Judge Davis has now issued an order granting summary judgment in favor of 99 of the 112 defendants in these related cases. This decision is a vindication of the defendants' position and, more importantly, justifies the use of the expedited process Judge Davis used in this case. For a more comprehensive write up on this order, see <a href="http://mcsmith.blogs.com/eastern_district_of_texas/2011/08/parallel-networks-markman-ruling-results-in-summary-judgment-for-99-out-of-112-defendants.html">Michael Smith's EDTexweblog.</a>Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com0tag:blogger.com,1999:blog-3776031340984751640.post-86768198115320540272011-08-19T07:51:00.000-07:002011-08-19T08:06:33.019-07:00Federal Circuit Rejects Computer Readable Media Claims under Section 101<br />
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The ebb and flow regarding the scope of patentable subject
matter for computer-related inventions continues this week with the Federal
Circuits decision in <a href="http://www.cafc.uscourts.gov/images/stories/opinions-orders/09-1358.pdf"><i>Cybersource Corp. v. Retail Decisions, Inc.</i></a></div>
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In <i>Cybersource</i>, two claims of U.S. Patent No. 6,029,154 (“the
‘154 patent”) were invalidated by the district court under 35 U.S.C. § 101 for
failure to recite patent-eligible subject matter. One of the claims, Claim 3 was directed to a “method
for verifying the validity of a credit card transaction” and recited three
steps, including “obtaining information…”, “constructing a map of credit card
numbers…,” and “utilizing the map…to determine if the credit card transaction
is valid.” Claim 2 was directed to “computer
readable medium containing programming instructions” and recited “execution of
the program instructions by one or more processors of a computer system” in the
body of the claim. The Federal Circuit
affirmed. </div>
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The decision with respect to the naked method claim (claim 3)
is not too controversial. The outcome
with respect to Claim 2, however, represents a significant shift in the
patent-eligible subject matter landscape.
Why, you ask? Because for the
last 15 years, patent practitioners in the computer arts have relied on <i>In re Beauregard</i>, 53 F.3d 1583 (Fed.
Cir. 1995) for the proposition that claims drawn to “computer readable media”
were patent-eligible articles of manufacture, not methods subject to the vagaries
of Section 101. (“<span style="color: black;">The
Commissioner now states ‘that computer programs embodied in a tangible medium,
such as floppy diskettes, are patentable subject matter under </span><span style="color: black;">35 U.S.C. § 101</span><span style="color: black;"> and must be examined under </span><span style="color: black;">35 U.S.C. §§ 102</span><span style="color: black;"> and </span><span style="color: black;">103</span><span style="color: black;">.’) (Note - there
was no actual holding from the Federal Circuit in <i>In re Beauregard</i>, simply a remand. Since the Commissioner ultimately agreed
with <st1:sn w:st="on">Beauregard</st1:sn>’s position, there was no longer a
case or controversy and thus no jurisdiction before the Federal Circuit.) T</span>he
Federal Circuit has now dispelled this long-held reliance: </div>
<blockquote>
Cybersource contends that, by definition, a
tangible, man-made article of manufacture such as a ‘computer readable medium
containing program instructions’ cannot possibly fall within any of ht three
patent-eligibility exceptions the Supreme Court has recognized for ‘laws of
nature, physical phenomena, [or] abstract ideas.” [citation omitted] <b>We disagree. Opinion at 16.</b></blockquote>
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With those two words, the validity of
claims in thousands of issued patents to computer-related inventions are now in doubt. </div>
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<span style="color: black;">One line
from this opinion that I find somewhat disturbing is that “[r]egardless of what
statutory category (‘process, machine, manufacture, or composition of matter’
35 U.S.C. § 101) a claims language is crafted to literally invoke, we look to
the underlying invention for patent-eligibility purposes.” In every other context we need to look at the
claim language, all of the claim language, in order to define the “invention.” Under the <i>Cybersource</i> analysis, courts may now ignore
express limitations in the claim (such as “computer readable media” or “one or
more processors”) to determine an “underlying invention” that is broader than
what is actually claimed in order to invoke Section 101.
Creating a double standard for the Section 101 analysis just doesn’t
feel right. <o:p></o:p></span></div>
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<span style="color: black;">Very
little is certain about the scope of patent-eligible subject matter for computer-related inventions in view of
the <i>Cybersource </i>decision except this: we
have not seen the end of this issue. My
bet is that <i>en banc</i> review is in our near
future.</span></div>
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Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com0tag:blogger.com,1999:blog-3776031340984751640.post-70123288852652643312011-08-17T08:19:00.000-07:002011-08-17T08:41:48.197-07:008 Million U.S. Patents and CountingThe United States Patent and Trademark Office reached another milestone when it issued U.S. Patent No. 8,000,000 this week.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj66fehEQqZfb2YTIFc-bLNoqFNy8moIctYKpTn-KAoby4mFGyA5AY02Sr7OxkKaqaTjo_k3lE7inb6g4cQO9xsaKUkBKFk9D-bp-ZEeYwkeiDUrk72wLydvDvhpuD0gHejCswuPf8GnBhK/s1600/patent+8+Mil.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj66fehEQqZfb2YTIFc-bLNoqFNy8moIctYKpTn-KAoby4mFGyA5AY02Sr7OxkKaqaTjo_k3lE7inb6g4cQO9xsaKUkBKFk9D-bp-ZEeYwkeiDUrk72wLydvDvhpuD0gHejCswuPf8GnBhK/s640/patent+8+Mil.gif" width="496" /></a></div>
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According to the <a href="http://www.uspto.gov/news/Millions_of_Patents.jsp">USPTO</a> website, "[u]nder the current numbering system for patents, number 1 was issued in 1836. A
million patents later, number 1,000,000 was issued by the United States in 1911.
The U.S. Patent and Trademark office issued patent number 8,000,000 on August
16, 2011." <br />
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The rate of patent grants has certainly been accelerating over the last 20 years. U.S. Patent No. 7,000,000 issued on Valentines day in 2006, just over 5 years ago. It took about 15 years to get from U.S. Patent 4,000,000 to 5,000,000 (which issued in 1991) and about 75 years to get from U.S. Patent No. 1 to U.S. Patent No. 1,000,000! <br />
<br />Paul D. Ackermanhttp://www.blogger.com/profile/09690864190790626484noreply@blogger.com0