Shum v. Intel Corp., Nos. 2009-1385, -1419 (Fed. Cir. Dec. 22, 2010).
Shum v. Intel Corp., No. 2010-1109 (Fed. Cir. Dec. 22, 2010).
WiAV Solutions LLC v. Motorola, Inc., No. 2010-1266 (Fed. Cir. Dec. 22, 2010).
Lazare Kaplan Int’l, Inc. v. Photoscribe Techs., Inc., No. 2009-1251 (Fed. Cir. Dec. 22, 2010).
Thursday, December 23, 2010
Tuesday, December 21, 2010
New Federal Circuit Opinions - December 21, 2010
Spansion, Inc. v. Int'l Trade Commn'n, Nos. 2009-1460, -1461, -1462, -1465(Fed. Cir. Dec. 21, 2010)
Monday, December 20, 2010
New Federal Circuit Opinions - December 20, 2010
Akamai Techs., Inc. v. Limelight Networks, Inc., Nos. 2009-1372, -1380, -1416, -1417 (Fed. Cir. Dec. 20, 2010)
Friday, December 17, 2010
New Federal Circuit Opinions - December 17, 2010
Prometheus Labs., Inc. v. Mayo Collaborative Servs.., No. 2008-1403 (Fed. Cir. Dec. 17, 2010).
Wednesday, December 15, 2010
New Federal Circuit Opinions - December 15, 2010
In re Vistaprint Ltd., No. 2010-m954 (Fed. Cir. Dec. 15, 2010).
Thursday, December 9, 2010
New Federal Circuit Opinions - December 9, 2010
Taylor Brands, LLC v. GB II Corp., 2010-1151, -1294 (Fed. Cir. Dec. 9, 2010) (Order)
ERBE Elektromedizin GmbH v. Canday Tech. LLC, No. 2008-1425, -1426 (Fed. Cir. Dec. 9, 2010)
ERBE Elektromedizin GmbH v. Canday Tech. LLC, No. 2008-1425, -1426 (Fed. Cir. Dec. 9, 2010)
Wednesday, December 8, 2010
New Federal Circuit Opinions - December 8, 2010
Research Corp. Techs., Inc. v. Microsoft Corp., No. 2010-1037 (Fed. Cir. Dec. 8, 2010)
New Federal Circuit Opinions - December 7, 2010
Western Union Co. v. MoneyGram Int’l, Inc., Nos. 2010-1080, -1210 (Fed. Cir. Dec. 7, 2010).
Friday, December 3, 2010
New Federal Circuit Opinions - December 3, 2010
In re Acer Am. Corp., No. 2010-m942 (Fed. Cir. Dec. 3, 2010)
Monday, November 22, 2010
An Arm of a State That Licenses a Patent Under a Field-of-Use License Can Nullify the Forum-Seeking Advantage Otherwise Provided by DJ Jurisdiction
A123 Sys., Inc. v. Hydro-Quebec, No. 2010-1059 (Fed. Cir. Nov. 10, 2010).
Holding:
Where a district court action involves a patent licensed by an arm of a state under a field-of-use license, and the state has waived Eleventh Amendment sovereign immunity in a later-filed action involving the same patent in another district, the action must be dismissed in the first district.
Relevant Facts:
The University of Texas System (“UT”) owned two patents directed to cathode materials for batteries, which UT licensed to Hydro-Quebec (“HQ”) under an exclusive license. A123 Systems, Inc. (“A123”) filed suit in the District of Massachusetts, seeking a declaration of noninfringement and invalidity of the patents. HQ moved to dismiss A123’s declaratory judgment suit, arguing, inter alia, that UT was a necessary and indispensable party because UT had transferred to HQ less than all substantial rights in the patents, granting HQ only a field-of-use license. HQ also argued that UT could not be joined as a defendant because UT is entitled to Eleventh Amendment sovereign immunity.
A123 countered that HQ held itself out as an exclusive licensee of all the technology claimed in the patents. A123 also argued that that UT waived its Eleventh Amendment sovereign immunity by its voluntary participation in a later infringement suit in the Northern District of Texas involving the same patents.
The district court disagreed with A123 and agreed with HQ on the first two grounds.
At the Federal Circuit, A123 repeated its arguments and further asserted that UT, even if a necessary party, was not an indispensable party under Federal Rule of Civil Procedure 19 (“Rule 19”). The Federal Circuit affirmed the district court’s decision, additionally holding that UT is an indispensable party under Rule 19 and the declaratory judgment action could therefore be dismissed.
The Federal Circuit agreed with the district court’s finding, based on testimony by executives of HQ and UT as well as the four corners of the license, that HQ received an exclusive license to only a significant portion of the field of technology, not all fields of technology described and claimed in the patents. Accordingly, UT was held to be a necessary party who must be joined in a declaratory or infringement action. The Federal Circuit also pointed to Biomedical Patent Management Corp. v. California, Department of Health Services, 505 F.3d 1328 (Fed. Cir. 2007), for the holding that a state university’s participation in one lawsuit does not amount to a waiver of immunity in a separate lawsuit.
Finally, the Federal Circuit evaluated whether UT is indispensable under the factors of Rule 19. The Federal Circuit found that Although HQ and UT undoubtedly share the same overarching goal of defending the patents’ validity, neither that goal nor UT’s decision to file suit jointly with HQ in Texas demonstrates that UT’s interests will be adequately represented by HQ in this action because HQ only has a field-of-use license. In addition, the Federal Circuit reasoned, because HQ is a field-of-use licensee and UT has retained non-overlapping rights in the patents in suit, UT may very well be able to assert infringement claims against A123 that HQ cannot, creating the risk of multiple lawsuits and of inconsistent relief. Finally, the district court considered A123’s interest in having a forum to litigate its defenses to claims of infringement, finding that A123 may assert counterclaims for a declaration of noninfringement and invalidity in the Texas action. Accordingly, the Federal Circuit determined, three of the four Rule 19(b) factors weigh in favor of holding UT to be an indispensable party. Thus, UT was held to be not only a necessary party but also an indispensable party, making dismissal appropriate.
Comments:
HQ and UT jointly initiated their infringement suit in the Northern District of Texas a month after HQ moved to dismiss A123’s declaratory judgment suit in the District of Massachusetts. Where a patent is licensed from an arm of a state, such as a university or research institute, under a field-of-use license, the state licensor apparently has absolute discretion to nullify the forum-seeking advantage otherwise provided by declaratory judgment jurisdiction to a party threatened with suit. The state licensor has an incentive to exercise this discretion to protect its patent, giving the licensee a potential advantage.
Holding:
Where a district court action involves a patent licensed by an arm of a state under a field-of-use license, and the state has waived Eleventh Amendment sovereign immunity in a later-filed action involving the same patent in another district, the action must be dismissed in the first district.
Relevant Facts:
The University of Texas System (“UT”) owned two patents directed to cathode materials for batteries, which UT licensed to Hydro-Quebec (“HQ”) under an exclusive license. A123 Systems, Inc. (“A123”) filed suit in the District of Massachusetts, seeking a declaration of noninfringement and invalidity of the patents. HQ moved to dismiss A123’s declaratory judgment suit, arguing, inter alia, that UT was a necessary and indispensable party because UT had transferred to HQ less than all substantial rights in the patents, granting HQ only a field-of-use license. HQ also argued that UT could not be joined as a defendant because UT is entitled to Eleventh Amendment sovereign immunity.
A123 countered that HQ held itself out as an exclusive licensee of all the technology claimed in the patents. A123 also argued that that UT waived its Eleventh Amendment sovereign immunity by its voluntary participation in a later infringement suit in the Northern District of Texas involving the same patents.
The district court disagreed with A123 and agreed with HQ on the first two grounds.
At the Federal Circuit, A123 repeated its arguments and further asserted that UT, even if a necessary party, was not an indispensable party under Federal Rule of Civil Procedure 19 (“Rule 19”). The Federal Circuit affirmed the district court’s decision, additionally holding that UT is an indispensable party under Rule 19 and the declaratory judgment action could therefore be dismissed.
The Federal Circuit agreed with the district court’s finding, based on testimony by executives of HQ and UT as well as the four corners of the license, that HQ received an exclusive license to only a significant portion of the field of technology, not all fields of technology described and claimed in the patents. Accordingly, UT was held to be a necessary party who must be joined in a declaratory or infringement action. The Federal Circuit also pointed to Biomedical Patent Management Corp. v. California, Department of Health Services, 505 F.3d 1328 (Fed. Cir. 2007), for the holding that a state university’s participation in one lawsuit does not amount to a waiver of immunity in a separate lawsuit.
Finally, the Federal Circuit evaluated whether UT is indispensable under the factors of Rule 19. The Federal Circuit found that Although HQ and UT undoubtedly share the same overarching goal of defending the patents’ validity, neither that goal nor UT’s decision to file suit jointly with HQ in Texas demonstrates that UT’s interests will be adequately represented by HQ in this action because HQ only has a field-of-use license. In addition, the Federal Circuit reasoned, because HQ is a field-of-use licensee and UT has retained non-overlapping rights in the patents in suit, UT may very well be able to assert infringement claims against A123 that HQ cannot, creating the risk of multiple lawsuits and of inconsistent relief. Finally, the district court considered A123’s interest in having a forum to litigate its defenses to claims of infringement, finding that A123 may assert counterclaims for a declaration of noninfringement and invalidity in the Texas action. Accordingly, the Federal Circuit determined, three of the four Rule 19(b) factors weigh in favor of holding UT to be an indispensable party. Thus, UT was held to be not only a necessary party but also an indispensable party, making dismissal appropriate.
Comments:
HQ and UT jointly initiated their infringement suit in the Northern District of Texas a month after HQ moved to dismiss A123’s declaratory judgment suit in the District of Massachusetts. Where a patent is licensed from an arm of a state, such as a university or research institute, under a field-of-use license, the state licensor apparently has absolute discretion to nullify the forum-seeking advantage otherwise provided by declaratory judgment jurisdiction to a party threatened with suit. The state licensor has an incentive to exercise this discretion to protect its patent, giving the licensee a potential advantage.
Friday, November 12, 2010
New Federal Circuit Opinions - November 12, 2010
Nuance Commc’ns Inc. v. Abbyy Software House, No. 2010-1100 (Fed. Cir. Nov. 12, 2010).
Wednesday, November 10, 2010
New Federal Circuit Opinions - November 10, 2010
A123 Sys., Inc. v. Hydro-Quebec, No. 2010-1059 (Fed. Cir. Nov. 10, 2010)
Tuesday, November 9, 2010
New Federal Circuit Opinions - November 9, 2010
Abraxis Bioscience, Inc. v. Navinta, LLC, No. 2009-1539 (Fed. Cir. Nov. 9, 2010).
Cancer Research Tech. Ltd. v. Barr Labs., Inc., No. 2010-1204 (Fed. Cir. Nov. 9, 2010)
Cancer Research Tech. Ltd. v. Barr Labs., Inc., No. 2010-1204 (Fed. Cir. Nov. 9, 2010)
Monday, November 8, 2010
New Federal Circuit Opinions - November 8, 2010
Hyatt V. Kappos, No. 2007-1066 (Fed. Cir. Nov. 8, 2010)
Thursday, November 4, 2010
New Federal Circuit Opinions - November 4, 2010
Finjan Inc. v. Secure Computing Corp., Nos. 2009-1576, -1594 (Fed. Cir. Nov. 4, 2010).
Monday, November 1, 2010
New Federal Circuit Opinions - November 1, 2010
AstraZeneca LP v. Apotex, Inc., Nos. 2009-1381, -1424 (Fed. Cir. Nov. 1, 2010)
Wednesday, October 13, 2010
New Federal Circuit Opinions - October 13, 2010
Solvay, S.A. v. Honeywell Int'l, Inc., No. 2009-1161 (Fed. Cir. Oct. 13, 2010).
Wednesday, October 6, 2010
New Federal Circuit Opinions - October 6, 2010
Teva Pharms. USA, Inc. v. Eisai Co., No. 2009-1593 (Fed. Cir. Oct. 6, 2010)
Tuesday, September 21, 2010
New Federal Circuit Opinions - September 21, 2010
The Laryngeal Mask Co. v. Ambu A/S, Nos. 2010-1028, -1062 (Fed. Cir. Sept. 21, 2010).
Monday, September 20, 2010
New Federal Circuit Opinions - September 20, 2010
Fujitsu Ltd. v. Netgear, Inc., No. 2010-1045 (Fed. Cir. Sept. 20, 2010)
Monday, September 13, 2010
New Federal Circuit Opinions - September 13, 2010
Am. Med. Sys., Inc. v. Biolitec, Inc., No. 2009-1323 (Fed. Cir. Sept. 13, 2010)
Thursday, September 9, 2010
New Federal Circuit Opinions - September 9, 2010
Tri-Star Electronics Int’l, Inc. v. Preci-Dip Durtal SA, No. 2009-1337 (Fed. Cir. Sept. 9, 2010).
Baseload Energy, Inc. v. Roberts, No. 2010-1053 (Fed. Cir. Sept. 9, 2010).
Daiichi Sankyo Co., Ltd. v. Matrix Labs., Ltd., No. 2009-1511 (Fed. Cir. Sept. 9, 2010).
Spine Solutions, Inc. v. Medtronic Sofamor Danek USA, Inc., No. 2009-1538 (Fed. Cir. Sept. 8, 2010)
Baseload Energy, Inc. v. Roberts, No. 2010-1053 (Fed. Cir. Sept. 9, 2010).
Daiichi Sankyo Co., Ltd. v. Matrix Labs., Ltd., No. 2009-1511 (Fed. Cir. Sept. 9, 2010).
Spine Solutions, Inc. v. Medtronic Sofamor Danek USA, Inc., No. 2009-1538 (Fed. Cir. Sept. 8, 2010)
Wednesday, September 8, 2010
New Federal Circuit Opinions - September 7, 2010
Green Edge Enters., LLC v. Rubber Mulch Etc., LLC, Nos. 2009-1455, -1479 (Fed. Cir. Sept. 7, 2010).
Goeddel v. Sugano, Nos. 2009-1156,-1157 (Fed. Cir. Sept. 7, 2010).
Goeddel v. Sugano, Nos. 2009-1156,-1157 (Fed. Cir. Sept. 7, 2010).
Tuesday, August 31, 2010
New Federal Circuit Opinions - August 31, 2010
Stauffer v. Brooks Bros., Inc., Nos. 2009-1428, -1430, -1453 (Fed. Cir. Aug. 31, 2010).
Monday, August 30, 2010
A Horizontal Agreement Restricting the Availability of a Patent Does Not Constitute Patent Misuse of Another Patent
Princo Corp. v. Int’l Trade Comm’n, No. 2007-1386 (Fed. Cir. June 18, 2010) (en banc).
Holding:
A horizontal agreement restricting the availability of a patent does not constitute misuse of another patent, even if the agreement has anticompetitive effects. Slip op. at 23.
When a patentee offers to license a patent, the patentee does not commit patent misuse that patent by inducing a third party not to license its separate, competitive technology. Id.
Relevant Facts:
Phillips and Sony developed competing patented CD technology, but entered an agreement to commercialize Phillips’ technology because it was simple and worked well. Phillips administered a licensing program that offers packaged licenses to Phillips and Sony patents. Princo alleged patent misuse on several grounds.
In U.S. Philips Corp. v. Int’l Trade Comm’n (Philips I), 424 F.3d 1179 (Fed. Cir. 2005), the Federal Circuit held that Philips’s package licensing practice that ties nonessential patents to essential patents does not constitute patent misuse because Philips charges a uniform fee and essentially, nonessential patents are included in the packages free of charge and the licensees are not required to use them.
Here, the issue is whether an agreement that would prevent the development of alternatives to the licensed technology would constitute misuse under a theory of elimination of competition or price fixing. A Federal Circuit panel initially ruled against Philips and the ITC.
The Federal Circuit granted Philips and the ITC’s petition for rehearing en banc. Philips argued that regardless of whether Philips and Sony agreed to suppress the technology embodied in the Sony patent, such an agreement would not constitute patent misuse and would not be a defense to Philips’s claim of infringement against Princo. The majority agreed with Philips.
Judge Prost authored a concurring opinion, in which Judge Mayer joins. Judge Dyk authored a dissenting opinion, in which Circuit Judge Gajarsa joins.
Comments:
The Federal Circuit is simply saying that the doctrine of patent misuse has a limited application, that misuse of one patent does not necessarily constitute misuse of another patent, and that the focus of patent misuse must be on the patent at issue.
Interestingly, even if the doctrine of patent misuse does not apply, the accused infringer may prevail under separate antitrust laws. Here, the Federal Circuit held that the Phillips-Sony agreement is not anti-competitive. However, if the agreement were to be anti-competitive, this opinion suggests that Princo could still prevail against Philips under the antitrust laws and recover damages (including attorney fees).
Holding:
A horizontal agreement restricting the availability of a patent does not constitute misuse of another patent, even if the agreement has anticompetitive effects. Slip op. at 23.
When a patentee offers to license a patent, the patentee does not commit patent misuse that patent by inducing a third party not to license its separate, competitive technology. Id.
Relevant Facts:
Phillips and Sony developed competing patented CD technology, but entered an agreement to commercialize Phillips’ technology because it was simple and worked well. Phillips administered a licensing program that offers packaged licenses to Phillips and Sony patents. Princo alleged patent misuse on several grounds.
In U.S. Philips Corp. v. Int’l Trade Comm’n (Philips I), 424 F.3d 1179 (Fed. Cir. 2005), the Federal Circuit held that Philips’s package licensing practice that ties nonessential patents to essential patents does not constitute patent misuse because Philips charges a uniform fee and essentially, nonessential patents are included in the packages free of charge and the licensees are not required to use them.
Here, the issue is whether an agreement that would prevent the development of alternatives to the licensed technology would constitute misuse under a theory of elimination of competition or price fixing. A Federal Circuit panel initially ruled against Philips and the ITC.
The Federal Circuit granted Philips and the ITC’s petition for rehearing en banc. Philips argued that regardless of whether Philips and Sony agreed to suppress the technology embodied in the Sony patent, such an agreement would not constitute patent misuse and would not be a defense to Philips’s claim of infringement against Princo. The majority agreed with Philips.
Judge Prost authored a concurring opinion, in which Judge Mayer joins. Judge Dyk authored a dissenting opinion, in which Circuit Judge Gajarsa joins.
Comments:
The Federal Circuit is simply saying that the doctrine of patent misuse has a limited application, that misuse of one patent does not necessarily constitute misuse of another patent, and that the focus of patent misuse must be on the patent at issue.
Interestingly, even if the doctrine of patent misuse does not apply, the accused infringer may prevail under separate antitrust laws. Here, the Federal Circuit held that the Phillips-Sony agreement is not anti-competitive. However, if the agreement were to be anti-competitive, this opinion suggests that Princo could still prevail against Philips under the antitrust laws and recover damages (including attorney fees).
Law360: "Fed. Circ. Clears Chinese Electrical Devices In 337 Suit."
Law360 interviewed Lei Mei of Mei & Mark LLP for its report on two opinions issued today by the United States Court of Appeals for the Federal Circuit in favor of Mei & Mark client Wenzhou Trimone Science & Technology Electric Co., Ltd. Click here for a copy of the article.
New Federal Circuit Opinions - August 30, 2010
Princo Corp. v. Int'l Trade Comm'n, Case No. 2007-1386 (Fed. Cir. Aug. 30, 2010) (en banc).
Friday, August 27, 2010
New Federal Circuit Opinions - August 27, 2010
General Protecht Group, Inc. v. Int'l Trade Comm'n, Nos. 2009-1378, -1387, -1434 (Fed. Cir. Aug. 27, 2010).
Note that we (Mei & Mark LLP) argued on behalf of an appellant in this case.
Pass & Seymour, Inc. v. Int'l Trade Comm'n, Nos. 2009-1338, -1369 (Fed. Cir. Aug. 27, 2010).
Note that we (Mei & Mark LLP) argued on behalf of an intervenor in this case.
Note that we (Mei & Mark LLP) argued on behalf of an appellant in this case.
Pass & Seymour, Inc. v. Int'l Trade Comm'n, Nos. 2009-1338, -1369 (Fed. Cir. Aug. 27, 2010).
Note that we (Mei & Mark LLP) argued on behalf of an intervenor in this case.
Friday, August 20, 2010
New Federal Circuit Opinions - August 20, 2010
Geo. M. Martin Co. v. Alliance Mach. Sys. Int’l, LLC, No. 2009-1132 (Fed. Cir. Aug. 20, 2010).
Wednesday, August 18, 2010
New Federal Circuit Opinions - August 18, 2010
Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, No. 2009-1556 (Fed. Cir. Aug. 18, 2010).
Thursday, August 12, 2010
New Federal Circuit Opinions - August 12, 2010
Baran v. Med. Device Techs., Inc., No. 2010-1058 (Fed. Cir. Aug. 12, 2010).
Monday, August 9, 2010
New Federal Circuit Opinions - August 9, 2010
Golden Hour Data Sys., Inc. v. emsCharts, Inc., Nos. 2009-1306, -1396 (Fed. Cir. Aug. 9, 2010).
Thursday, August 5, 2010
New Federal Circuit Opinions - August 5, 2010
Adams Respiratory Therapeutics, Inc. v. Perrigo Co., No. 2010-1246 (Fed. Cir. Aug. 5, 2010).
Wednesday, August 4, 2010
New Federal Circuit Opinions - August 4, 2010
Intervet Inc. v. Merial Ltd., No. 2009-1568 (Fed. Cir. Aug. 4, 2010).
Tuesday, August 3, 2010
New Federal Circuit Opinions - August 3, 2010
Enovsys LLC v. Nextel Commc'ns, Inc., No. 2009-1167 (Fed. Cir. Aug. 3, 2010)
Monday, August 2, 2010
New Federal Circuit Opinions - August 2, 2010
King Pharms., Inc. v. Eon Labs, Inc., Nos. 2009-1437, -1438 (Fed. Cir. Aug. 2, 2010)
Thursday, July 29, 2010
New Federal Circuit Opinions - July 29, 2010
Becton, Dickinson & Co. v. Tyco Healthcare Group, LP, Nos. 2009-1053,-1111 (Fed. Cir. July 29, 2010).
Novo Nordisk A/S v. Caraco Pharm. Labs., Ltd., No. 2010-1001 (Fed. Cir. July 29, 2010) (en banc).
Novo Nordisk A/S v. Caraco Pharm. Labs., Ltd., No. 2010-1001 (Fed. Cir. July 29, 2010) (en banc).
Wednesday, July 28, 2010
New Federal Circuit Opinions - July 28, 2010
Sun Pharm. Indus., Ltd. v. Eli Lilly & Co., No. 2010-1105 (July 28, 2010).
Monday, July 26, 2010
DTV Patent War Watch (13)
Hitachi v. Vizio/TPV/Envision
On July 22, 2010, Hitachi Consumer Electronics Co. Ltd., and Hitachi Advanced Digital, Inc. sued Top Victory Electronics (Taiwan) Co. Ltd., TPV Int'l (USA), Inc., Envision Peripherals, Inc., Top Victory Electronics (Fujian) Co., Ltd., TPV Electronics (Fujian) Co. Ltd., TPV Technology Ltd., and Vizio, Inc. in the Eastern District of Texas (Case No. 2:10-cv-00260-TJW) for allegedly infringing Hitachi's patents on television receivers.
The asserted patents include U.S. Patent Nos. 5,534,934; 6,388,713; 6,549,243; 6,144,412; 6,037,995; 7,012,769; 7,286,310; and 5,502,497.
Hitachi’s lawsuit appears in response to an earlier patent infringement lawsuit filed by the defendants above (except Vizio) against Hitachi, Ltd. and Inpro Licensing Sarl on April 14, 2010 in the Northern District of California (Case No. 3:2010cv01579).
On July 22, 2010, Hitachi Consumer Electronics Co. Ltd., and Hitachi Advanced Digital, Inc. sued Top Victory Electronics (Taiwan) Co. Ltd., TPV Int'l (USA), Inc., Envision Peripherals, Inc., Top Victory Electronics (Fujian) Co., Ltd., TPV Electronics (Fujian) Co. Ltd., TPV Technology Ltd., and Vizio, Inc. in the Eastern District of Texas (Case No. 2:10-cv-00260-TJW) for allegedly infringing Hitachi's patents on television receivers.
The asserted patents include U.S. Patent Nos. 5,534,934; 6,388,713; 6,549,243; 6,144,412; 6,037,995; 7,012,769; 7,286,310; and 5,502,497.
Hitachi’s lawsuit appears in response to an earlier patent infringement lawsuit filed by the defendants above (except Vizio) against Hitachi, Ltd. and Inpro Licensing Sarl on April 14, 2010 in the Northern District of California (Case No. 3:2010cv01579).
Thursday, July 22, 2010
New Federal Circuit Opinions - July 22, 2010
Wyers V. Master Lock Co., No. 2009-1412 (Fed. Cir. July 22, 2010).
Tuesday, July 20, 2010
DTV Patent War Watch (12)
On July 16, 2010, Vizio, Inc. of Irvine, California (“Vizio”) filed a complaint before the United States International Trade Commission (ITC) requesting that the ITC commence an investigation under Section 337. The complaint alleges that LG Electronics, Inc. and LG Electronics U.S.A., Inc. have sold for importation, imported, and/or sold within the U.S. after importation certain flat panel digital televisions and components thereof that infringe certain claims of U.S. Patent Nos. 5,511,096, 5,621,761, 5,703,887, 5,745,522, 5,511,082, 5,396,518, and 5,233,629 (“Asserted Patents”).
Related Litigations:
(1) Each of the Asserted Patents are the subject of litigation in the United States District Court for Maryland, styled Vizio, Inc. vs. LG Electronics, Inc. and LG Electronics U.S.A., Inc., Case No. 09-cv-1481, filed on June 5, 2009. The case is currently in pretrial proceedings and no trial date has yet been set.
(2) The Asserted Patents were the subject of litigation in the United States District Court for the Central District of California, styled Vizio, Inc. v. Funai Electric Co., Ltd. and Funai Corp., Inc., Case 09-cv-05813, filed on May 20, 2009. The case has been settled.
(3) The Asserted Patents were the subject of litigation in the United States District Court for the Southern District of California, styled Sony Corp. and Sony Electronics, Inc. v. Vizio, Inc., Case 09-cv-Ol043, filed on May 13, 2009. The case has been settled.
Related Litigations:
(1) Each of the Asserted Patents are the subject of litigation in the United States District Court for Maryland, styled Vizio, Inc. vs. LG Electronics, Inc. and LG Electronics U.S.A., Inc., Case No. 09-cv-1481, filed on June 5, 2009. The case is currently in pretrial proceedings and no trial date has yet been set.
(2) The Asserted Patents were the subject of litigation in the United States District Court for the Central District of California, styled Vizio, Inc. v. Funai Electric Co., Ltd. and Funai Corp., Inc., Case 09-cv-05813, filed on May 20, 2009. The case has been settled.
(3) The Asserted Patents were the subject of litigation in the United States District Court for the Southern District of California, styled Sony Corp. and Sony Electronics, Inc. v. Vizio, Inc., Case 09-cv-Ol043, filed on May 13, 2009. The case has been settled.
Friday, July 16, 2010
New Federal Circuit Opinions - July 16, 2010
Avid Identification Sys., Inc. v. Crystal Import Corp., Nos. 2009-1216, -1254 (Fed. Cir. July 16, 2010).
Wednesday, July 7, 2010
New Federal Circuit Opinions - July 7, 2010
In Re Giacomini, No. 2010-1115 (Fed. Cir. July 7, 2010).
Tuesday, July 6, 2010
New Federal Circuit Opinions - July 6, 2010
Telcordia Techs., Inc. v. Cisco Sys., Inc., No. 2009-1175 (Fed. Cir. July 6, 2010).
Monday, June 28, 2010
The U.S. Suprement Court Rules on Bilski: Business Methods May Fall Within Patentable Subject Matter
Bilski v. Kappos, No. 08-964 (S.Ct. June 28, 2010).
Justice Kennedy authored the opinion of the Court, concluding that petitioners’ claimed invention is not patent eligible. The Court held, however, that business methods could fall within patentable subject matter under Section 101.
Holdings:
(a) Section 101 specifies four independent categories of inventionsor discoveries that are patent eligible: “process[es],” “machin[es],”“manufactur[es],” and “composition[s] of matter.” The invention at issue is claimed to be a “process,” which §100(b) defines as a “proc-ess, art or method, and includes a new use of a known process, ma-chine, manufacture, composition of matter, or material.”
(b) The machine-or-transformation test is not the sole test for patent eligibility under §101.
(c) Section 101 similarly precludes a reading of the term “process” that would categorically exclude business methods.
(d) Even though petitioners’ application is not categorically outside of §101 under the two atextual approaches the Court rejects today,that does not mean it is a “process” under §101. Petitioners seek to patent both the concept of hedging risk and the application of that concept to energy markets. Under Benson, Flook, and Diehr, how-ever, these are not patentable processes but attempts to patent abstract ideas. Claims 1 and 4 explain the basic concept of hedging and reduce that concept to a mathematical formula. This is an unpatentable abstract idea, just like the algorithms at issue in Benson and Flook.
Justice Kennedy authored the opinion of the Court, concluding that petitioners’ claimed invention is not patent eligible. The Court held, however, that business methods could fall within patentable subject matter under Section 101.
Holdings:
(a) Section 101 specifies four independent categories of inventionsor discoveries that are patent eligible: “process[es],” “machin[es],”“manufactur[es],” and “composition[s] of matter.” The invention at issue is claimed to be a “process,” which §100(b) defines as a “proc-ess, art or method, and includes a new use of a known process, ma-chine, manufacture, composition of matter, or material.”
(b) The machine-or-transformation test is not the sole test for patent eligibility under §101.
(c) Section 101 similarly precludes a reading of the term “process” that would categorically exclude business methods.
(d) Even though petitioners’ application is not categorically outside of §101 under the two atextual approaches the Court rejects today,that does not mean it is a “process” under §101. Petitioners seek to patent both the concept of hedging risk and the application of that concept to energy markets. Under Benson, Flook, and Diehr, how-ever, these are not patentable processes but attempts to patent abstract ideas. Claims 1 and 4 explain the basic concept of hedging and reduce that concept to a mathematical formula. This is an unpatentable abstract idea, just like the algorithms at issue in Benson and Flook.
Thursday, June 24, 2010
New Federal Circuit Opinions - June 24, 2010
In re Zimmer Holdings, Inc., No. 2010-M938 (Fed. Cir. June 24, 2010).
New Federal Circuit Opinions - June 23, 2010
Lincoln Nat’l Life Ins. v. Transamerica Life Ins., Nos. 2009-1403, -1491 (Fed. Cir. June 23, 2010).
Sunday, June 20, 2010
35 U.S.C. § 120 Requires Each Application in a Priority Chain to Refer to the Prior Applications
Encyclopaedia Britannica, Inc. v. Alpine Elecs. of Am., Inc., Nos. 2009-1544, -1545 (Fed. Cir. June 18, 2010).
Holding:
35 U.S.C. § 120 requires an intermediate application in a priority chain to contain a specific reference to the earlier filed application. Slip op. at 7-8.
Relevant Facts:
The asserted patent has the priority claim as follows: “Continuation of application No. 10/103,814, filed on Mar. 25, 2002, which is a continuation of application No. 08/202,985, filed on Feb. 28, 1994, now Pat. No. 6,546,399, which is a continuation of application No. 08/113,955, filed on Aug. 31, 1993, now abandoned, which is a continuation of application No. 07/426,917, filed on Oct. 26, 1989, now Pat. No. 5,241,671.” The ’955 application did not contain a specific reference to the ’917 application. If the asserted patent is not entitled to the priority date of the ’917 application, then the ’917 application is prior art and anticipates the asserted patent. The district court held that the asserted patent is not entitled to the priority date of the ’917 application. The Federal Circuit affirmed.
Comments:
The remaining question is whether the later asserted patent is entitled to any earlier priority date (e.g., Fed. 28, 1994 or Aug. 31, 1993). The district court said no, but the Federal Circuit decides to “leave [this question] for another day.” Slip op. at 13. It is likely, however, that the later asserted patent should be allowed to claim the priority date of Aug. 31, 1993, because that part of the priority chain is not defective.
Holding:
35 U.S.C. § 120 requires an intermediate application in a priority chain to contain a specific reference to the earlier filed application. Slip op. at 7-8.
Relevant Facts:
The asserted patent has the priority claim as follows: “Continuation of application No. 10/103,814, filed on Mar. 25, 2002, which is a continuation of application No. 08/202,985, filed on Feb. 28, 1994, now Pat. No. 6,546,399, which is a continuation of application No. 08/113,955, filed on Aug. 31, 1993, now abandoned, which is a continuation of application No. 07/426,917, filed on Oct. 26, 1989, now Pat. No. 5,241,671.” The ’955 application did not contain a specific reference to the ’917 application. If the asserted patent is not entitled to the priority date of the ’917 application, then the ’917 application is prior art and anticipates the asserted patent. The district court held that the asserted patent is not entitled to the priority date of the ’917 application. The Federal Circuit affirmed.
Comments:
The remaining question is whether the later asserted patent is entitled to any earlier priority date (e.g., Fed. 28, 1994 or Aug. 31, 1993). The district court said no, but the Federal Circuit decides to “leave [this question] for another day.” Slip op. at 13. It is likely, however, that the later asserted patent should be allowed to claim the priority date of Aug. 31, 1993, because that part of the priority chain is not defective.
Friday, June 18, 2010
New Federal Circuit Opinions - June 18, 2010
Encyclopaedia Britannica, Inc. v. Alpine Elecs. of Am., Inc., Nos. 2009-1544, -1545 (Fed. Cir. June 18, 2010).
Wednesday, June 16, 2010
New Federal Circuit Opinions - June 10, 2010
Wordtech Systems, Inc. v. Integrated Networks Solutions, Inc., No. 2009-1454 (Fed. Cir. June 16, 2010).
Monday, June 14, 2010
False Marking: The Inference From a Knowingly False Statement IS Rebuttable With Evidence of Good Faith
Pequignot v. Solo Cup Co., No. 2009-1547 (Fed. Cir. June 10, 2010).
Holding:
The combination of a false statement and knowledge that the statement was false creates a rebuttable presumption of intent to deceive the public, rather than irrebuttably proving such intent. Slip op. at 9.
An article covered by a now-expired patent is “unpatented” with the meaning of 35 U.S.C. § 292(a). Id.
Relevant Facts:
Peguignot brought a qui tam action under 35 U.S.C. § 292 against Solo for allegedly false marking its products with expired patents and the “may be covered” language. Solo claimed that it relied on counsel’s opinion in good faith for marking its products. The Federal Circuit affirmed the district court’s ruling that Solo has provided sufficient evidence that its purpose was not to deceive the public and thus is not liable for false marking.
Comments:
Recently, private parties have brought a large number of false marking cases in qui tam actions. Here, the Federal Circuit recognizes that “[t]he bar for proving deceptive intent here is particularly high, given that the false marking statute is a criminal one, despite being punishable only with a civil fine.” Slip op. at 12. As a result, the outcome of this case may curb future qui tam actions under 35 U.S.C. § 292.
Holding:
The combination of a false statement and knowledge that the statement was false creates a rebuttable presumption of intent to deceive the public, rather than irrebuttably proving such intent. Slip op. at 9.
An article covered by a now-expired patent is “unpatented” with the meaning of 35 U.S.C. § 292(a). Id.
Relevant Facts:
Peguignot brought a qui tam action under 35 U.S.C. § 292 against Solo for allegedly false marking its products with expired patents and the “may be covered” language. Solo claimed that it relied on counsel’s opinion in good faith for marking its products. The Federal Circuit affirmed the district court’s ruling that Solo has provided sufficient evidence that its purpose was not to deceive the public and thus is not liable for false marking.
Comments:
Recently, private parties have brought a large number of false marking cases in qui tam actions. Here, the Federal Circuit recognizes that “[t]he bar for proving deceptive intent here is particularly high, given that the false marking statute is a criminal one, despite being punishable only with a civil fine.” Slip op. at 12. As a result, the outcome of this case may curb future qui tam actions under 35 U.S.C. § 292.
Friday, June 11, 2010
New Federal Circuit Opinions - June 11, 2010
Advanced Magnetic Closures, Inc. v. Rome Fastener Corp., No. 2009-1102 (Fed. Cir. June 10, 2010).
Thursday, June 10, 2010
New Federal Circuit Opinions - June 10, 2010
Pequignot v. Solo Cup Co., No. 2009-1547 (Fed. Cir. June 10, 2010).
Wednesday, June 9, 2010
New Federal Circuit Opinions - June 9, 2010
TriMed, Inc. v. Stryker Corp., No. 2009-1423 (Fed. Cir. June 9, 2010).
Friday, June 4, 2010
New Federal Circuit Opinions - June 4, 2010
Silicon Graphics, Inc. v. ATI Techs., Inc.., Nos. 2008-1334, -1353 (Fed. Cir. June 4, 2010).
Wednesday, June 2, 2010
New Federal Circuit Opinions - June 2, 2010
Haemonetics, Corp. v. Baxter Healthcare Corp., No. 2009-1557 (Fed. Cir. June 2, 2010).
DTV Patent War Watch (11)
May 27, 2010: In light of the Federal Circuit decision holding that Vizio’s design around products do not infringe Funai’s patent, Vizio, Inc. v. Int'l Trade Comm'n, No. 2009-1386 (Fed. Cir. May 26, 2010), Vizio and Funai have settled all disputes between them over Funai’s DTV patents and entered cross-licenses. Click here to read the IP Law360 news article.
Monday, May 31, 2010
DTV Patent War Watch (10)
May 26, 2010: Vizio scored a victory in this round that could soon conclude its dispute with Funai, when the Federal Circuit ruled that Vizio’s work-around (design-around) DTVs do not satisfy the “suitable for use,” “for identifying,” or “for decoding” limitations in claims 1, 5, and 23 of U.S. Patent No. 6,115,074 . Vizio, Inc. v. Int'l Trade Comm'n, No. 2009-1386 (Fed. Cir. May 26, 2010). The Federal Circuit remanded this case back to the ITC for an order consistent with its decision. In other words, the ITC will presumably modify its exclusion order to allow Vizio’s design-around DTVs to be imported into the U.S.
Note: Funai has a pending enforcement proceeding against Vizio regarding the design-around products. Presumably, that proceeding may end soon in Vizio’s favor in light of this Federal Circuit decision.
In a related U.S. Customs ruling in favor of Amtran Logistics, Inc., TPV International (USA), Inc., and Envision Peripherals, Inc., the U.S. Customs ruled in August 5, 2009, that the DTVs containing three semiconductor chips identified as Model BCM35243 (Broadcom), Model MT5382PTR (MediaTek), Model ZR39775HGCF-B (Zoran), are not subject to Exclusion Order 337-TA-617. The U.S. Customs also ruled in favor Vizio on July 8, 2009.
The Federal Circuit decision did not specify what chips Vizio’s design-around DTVs use and the U.S. Customs has not published its ruling in favor of Vizio. It is possible, however, that Vizio’s design-around DTVs use the same above-referenced semiconductor chips.
Note: Funai has a pending enforcement proceeding against Vizio regarding the design-around products. Presumably, that proceeding may end soon in Vizio’s favor in light of this Federal Circuit decision.
In a related U.S. Customs ruling in favor of Amtran Logistics, Inc., TPV International (USA), Inc., and Envision Peripherals, Inc., the U.S. Customs ruled in August 5, 2009, that the DTVs containing three semiconductor chips identified as Model BCM35243 (Broadcom), Model MT5382PTR (MediaTek), Model ZR39775HGCF-B (Zoran), are not subject to Exclusion Order 337-TA-617. The U.S. Customs also ruled in favor Vizio on July 8, 2009.
The Federal Circuit decision did not specify what chips Vizio’s design-around DTVs use and the U.S. Customs has not published its ruling in favor of Vizio. It is possible, however, that Vizio’s design-around DTVs use the same above-referenced semiconductor chips.
Sunday, May 30, 2010
Covenant Not to Sue for Patent Infringement Before Verdict Divests DJ Subject Matter Jurisdiction
Dow Jones & Co. v. Ablaise Ltd., No. 2009-1524 (Fed. Cir. May 28, 2010).
Holding:
A patentee’s covenant not to sue for any acts of future infringement of a patent before verdict extinguishes any current or future case or controversy between the parties, and divests the district court of subject matter jurisdiction. Slip op. at 19.
Relevant Facts:
Dow Jones filed a declaratory judgment (DJ) action in a district court. After the Markman hearing, Ablaise offered Dow Jones a covenant not to sue on one patent. Dow Jones demanded the covenant to include Dow Jones’ parent company, which Ablaise refused. The district court denied Ablaise’s motion to dismiss the invalidity claim with respect to the patent based on the covenant. Ablaise appealed. The Federal Circuit reversed as to this issue (but affirmed the district court’s grant of summary judgment that the asserted claims of another patent are invalid as obvious).
.
Comments:
The Court noted that “[s]ubject matter jurisdiction is a threshold requirement for a court’s power to exercise jurisdiction over a case, and no amount of ‘prudential reasons’ or perceived increases in efficiency, however sound, can empower a federal court to hear a case where there is no extant case or controversy.” Slip op. at 19.
If the covenant not to sue was not offered by the patentee until after the jury had determined that the patent was not infringed, however, the post-verdict covenant does not divest the court’s DJ jurisdiction, because that controversy had already been resolved by the jury's verdict. Id. at 15.
Holding:
A patentee’s covenant not to sue for any acts of future infringement of a patent before verdict extinguishes any current or future case or controversy between the parties, and divests the district court of subject matter jurisdiction. Slip op. at 19.
Relevant Facts:
Dow Jones filed a declaratory judgment (DJ) action in a district court. After the Markman hearing, Ablaise offered Dow Jones a covenant not to sue on one patent. Dow Jones demanded the covenant to include Dow Jones’ parent company, which Ablaise refused. The district court denied Ablaise’s motion to dismiss the invalidity claim with respect to the patent based on the covenant. Ablaise appealed. The Federal Circuit reversed as to this issue (but affirmed the district court’s grant of summary judgment that the asserted claims of another patent are invalid as obvious).
.
Comments:
The Court noted that “[s]ubject matter jurisdiction is a threshold requirement for a court’s power to exercise jurisdiction over a case, and no amount of ‘prudential reasons’ or perceived increases in efficiency, however sound, can empower a federal court to hear a case where there is no extant case or controversy.” Slip op. at 19.
If the covenant not to sue was not offered by the patentee until after the jury had determined that the patent was not infringed, however, the post-verdict covenant does not divest the court’s DJ jurisdiction, because that controversy had already been resolved by the jury's verdict. Id. at 15.
The Federal Circuit: Quanta v. LG Did Not Eliminate Territoriality Requirement for Patent Exhaustion in Jazz Photo
Fujifilm Corp. v. Benun, No. 2009-1487 (Fed. Cir. May 27, 2010)
Holding:
Quanta Computer, Inc. v. LG Electronics, Inc., 128 S. Ct. 2109 (2008), did not eliminate the territoriality requirement for patent exhaustion announced in Jazz Photo Corp. v. United States International Trade Commission, 264 F.3d 1094 (Fed. Cir. 2001). Slip op. at 7.
Relevant Facts:
Fuji owns U.S. patents directed to single-use cameras, or lens-fitted film packages (LFFPs). Once a LFFP is used by a consumer it is taken to a film processor who opens the LFFP and processes the film. The film processor does not return the empty LFFP (shell) to the consumer. Jazz bought used LFFPs outside the U.S., refurbished them, and sold them as new in the U.S. The district court ruled in Fuji’s favor on infringement, approved $2 per infringing LFFP running royalty, and held Jazz in contempt of a preliminary order enjoining importation of infringing LFFP. The Federal Circuit affirmed.
Comments:
Footnote 6 in the 2008 Supreme Court case of Quanta Computer, Inc. v. LG Electronics, Inc. has created lingering questions as to whether the Supreme Court intended to eliminate the territoriality requirement for patent exhaustion. Clearly, if a party purchases and refurbishes patented products in the U.S., and then re-sell them in the U.S., patent exhaustion applies to these products and there is no patent infringement. However, if a party purchases and refurbishes patented products outside the U.S., and then imports them to the U.S. for sale, does patent exhaustion apply to these products?
Footnote 6 states:
"LGE suggests that the Intel Products would not infringe its patents if they were sold overseas, used as replacement parts, or engineered so that use with non-Intel products would disable their patented features. But Univis teaches that the question is whether the product is ‘capable of use only in practicing the patent,’ not whether those uses are infringing. Whether outside the country or functioning as replacement parts, the Intel Products would still be practicing the patent, even if not infringing it."
Quanta, 128 S. Ct. at 2119 n.6 (citations omitted).
After the Quanta case, different district courts have issued different opinions on this issue. In this opinion, the Federal Circuit has made its position clear that sale outside the U.S. does not exhaust patents.
Interestingly, the Supreme Court recently granted certiorari in a copyright case involving a similar issue, Omega, S.A. v. Costco Wholesale Corp., 541 F.3d 982 (9th Cir. 2008), cert. granted, Costo Wholesale Corp. v. Omega, S.A., S. Ct. No. 08-1423 (2010). This case concerns the Copyright Act’s first sale rule, in which Costco sold Omega watches in the U.S. that Omega had manufactured and first sold outside the United States. If the Supreme Court rules that the first sale applies in this case, then it is possible that the Supreme Court may apply the same rationale to patent exhaustion. The caveat, of course, is that the Costco v. Omega case arises out of the Copyright Act, which is different from Patent law. The Supreme Court have applied different sets of standards to copyright and patent laws previously, and may do so here even if it would rule that the first sale applies to foreign sales in copyright cases.
Holding:
Quanta Computer, Inc. v. LG Electronics, Inc., 128 S. Ct. 2109 (2008), did not eliminate the territoriality requirement for patent exhaustion announced in Jazz Photo Corp. v. United States International Trade Commission, 264 F.3d 1094 (Fed. Cir. 2001). Slip op. at 7.
Relevant Facts:
Fuji owns U.S. patents directed to single-use cameras, or lens-fitted film packages (LFFPs). Once a LFFP is used by a consumer it is taken to a film processor who opens the LFFP and processes the film. The film processor does not return the empty LFFP (shell) to the consumer. Jazz bought used LFFPs outside the U.S., refurbished them, and sold them as new in the U.S. The district court ruled in Fuji’s favor on infringement, approved $2 per infringing LFFP running royalty, and held Jazz in contempt of a preliminary order enjoining importation of infringing LFFP. The Federal Circuit affirmed.
Comments:
Footnote 6 in the 2008 Supreme Court case of Quanta Computer, Inc. v. LG Electronics, Inc. has created lingering questions as to whether the Supreme Court intended to eliminate the territoriality requirement for patent exhaustion. Clearly, if a party purchases and refurbishes patented products in the U.S., and then re-sell them in the U.S., patent exhaustion applies to these products and there is no patent infringement. However, if a party purchases and refurbishes patented products outside the U.S., and then imports them to the U.S. for sale, does patent exhaustion apply to these products?
Footnote 6 states:
"LGE suggests that the Intel Products would not infringe its patents if they were sold overseas, used as replacement parts, or engineered so that use with non-Intel products would disable their patented features. But Univis teaches that the question is whether the product is ‘capable of use only in practicing the patent,’ not whether those uses are infringing. Whether outside the country or functioning as replacement parts, the Intel Products would still be practicing the patent, even if not infringing it."
Quanta, 128 S. Ct. at 2119 n.6 (citations omitted).
After the Quanta case, different district courts have issued different opinions on this issue. In this opinion, the Federal Circuit has made its position clear that sale outside the U.S. does not exhaust patents.
Interestingly, the Supreme Court recently granted certiorari in a copyright case involving a similar issue, Omega, S.A. v. Costco Wholesale Corp., 541 F.3d 982 (9th Cir. 2008), cert. granted, Costo Wholesale Corp. v. Omega, S.A., S. Ct. No. 08-1423 (2010). This case concerns the Copyright Act’s first sale rule, in which Costco sold Omega watches in the U.S. that Omega had manufactured and first sold outside the United States. If the Supreme Court rules that the first sale applies in this case, then it is possible that the Supreme Court may apply the same rationale to patent exhaustion. The caveat, of course, is that the Costco v. Omega case arises out of the Copyright Act, which is different from Patent law. The Supreme Court have applied different sets of standards to copyright and patent laws previously, and may do so here even if it would rule that the first sale applies to foreign sales in copyright cases.
The Federal Circuit Issued New Standards for Application of Patent Prosecution Bar
In re Deutsche Bank Trust Co. Ams., No. 2010-M920 (Fed. Cir. May 27, 2010).
Holding:
“[A] party seeking imposition of a patent prosecution bar must show that the information designated to trigger the bar, the scope of activities prohibited by the bar, the duration of the bar, and the subject matter covered by the bar reasonably reflect the risk presented by the disclosure of proprietary competitive information.” Slip op. at 13.
“[T]he party seeking an exemption from a patent prosecution bar must show on a counsel-by-counsel basis: (1) that counsel’s representation of the client in matters before the PTO does not and is not likely to implicate competitive decisionmaking related to the subject matter of the litigation so as to give rise to a risk of inadvertent use of confidential information learned in litigation, and (2) that the potential injury to the moving party from restrictions imposed on its choice of litigation and prosecution counsel outweighs the potential injury to the opposing party caused by such inadvertent use.” Id.
Relevant Facts:
Deutsche seeks a protective order including a patent prosecution bar preventing anyone who gains access in the litigation to certain confidential documents from any involvement in prosecuting any patent in the related technical field, and for a limited period after, the conclusion of this litigation. The district court granted the patent prosecution bar as to all of Island’s trial counsel except for its lead counsel. Deutsche petitioned for a writ of mandamus. The Federal Circuit granted in part the petition, vacated the discovery order, and remanded the case to the district court for reconsideration of its order under the new standards.
Holding:
“[A] party seeking imposition of a patent prosecution bar must show that the information designated to trigger the bar, the scope of activities prohibited by the bar, the duration of the bar, and the subject matter covered by the bar reasonably reflect the risk presented by the disclosure of proprietary competitive information.” Slip op. at 13.
“[T]he party seeking an exemption from a patent prosecution bar must show on a counsel-by-counsel basis: (1) that counsel’s representation of the client in matters before the PTO does not and is not likely to implicate competitive decisionmaking related to the subject matter of the litigation so as to give rise to a risk of inadvertent use of confidential information learned in litigation, and (2) that the potential injury to the moving party from restrictions imposed on its choice of litigation and prosecution counsel outweighs the potential injury to the opposing party caused by such inadvertent use.” Id.
Relevant Facts:
Deutsche seeks a protective order including a patent prosecution bar preventing anyone who gains access in the litigation to certain confidential documents from any involvement in prosecuting any patent in the related technical field, and for a limited period after, the conclusion of this litigation. The district court granted the patent prosecution bar as to all of Island’s trial counsel except for its lead counsel. Deutsche petitioned for a writ of mandamus. The Federal Circuit granted in part the petition, vacated the discovery order, and remanded the case to the district court for reconsideration of its order under the new standards.
Friday, May 28, 2010
New Federal Circuit Opinions - May 28, 2010
Dow Jones & Co. v. Ablaise Ltd., No. 2009-1524 (Fed. Cir. May 28, 2010).
Leviton Mfg. Co. v. Universal Sec. Instruments, Inc., No. 2009-1421(Fed. Cir. May 28, 2010).
Leviton Mfg. Co. v. Universal Sec. Instruments, Inc., No. 2009-1421(Fed. Cir. May 28, 2010).
Thursday, May 27, 2010
New Federal Circuit Opinions - May 27, 2010
In re Deutsche Bank Trust Co. Ams., No. 2010-M920 (Fed. Cir. May 27, 2010).
Fujifilm Corp. v. Benun, No. 2009-1487 (Fed. Cir. May 27, 2010)
Fujifilm Corp. v. Benun, No. 2009-1487 (Fed. Cir. May 27, 2010)
Wednesday, May 26, 2010
ITC Investigates Intellectual Property Rights Infringment in China
From ITC's website:
May 25, 2010
News Release 10-055
Inv. No. 332-519
Contact: Peg O'Laughlin, 202-205-1819
USITC BEGINS SECOND OF TWO INVESTIGATIONS ON THE EFFECT OF INTELLECTUAL PROPERTY RIGHTS INFRINGEMENT IN CHINA ON U.S. ECONOMY AND JOBS
The U.S. International Trade Commission (USITC) has launched the second of two investigations into the effect on the U.S. economy and U.S. jobs of intellectual property rights (IPR) infringement in China.
The investigation, China: Effects of Intellectual Property Infringement and Indigenous Innovation Policies on the U.S. Economy, is the second report requested by the Committee on Finance, U.S. Senate, in a letter received on April 20, 2010.
In its letter requesting the investigations, the Committee stated: "Despite widespread evidence of the harm to U.S. industries, authors, and artists resulting from IPR infringement in China, the U.S. Government has not conducted a comprehensive economic analysis of the effect of China's ineffective IPR protection and enforcement on the U.S. economy and U.S. jobs." As requested, the USITC will deliver two reports to the Committee. The first investigation, China: Intellectual Property Infringement, Indigenous Innovation Policies, and Frameworks for Measuring the Effects on the U.S. Economy, was instituted on May 5, 2010.
In the second investigation, the USITC, an independent, nonpartisan, factfinding federal agency, will describe the size and scope of reported IPR infringement in China; provide a quantitative analysis of the effects of reported IPR infringement in China on the U.S. economy and U.S. jobs; and discuss actual, potential, and reported effects of China's indigenous innovation policies on the U.S. economy and U.S. jobs, and quantify these effects to the extent feasible. The second report will build upon the qualitative findings described in the first report. The USITC expects to deliver the second report to the Committee by May 2, 2011.
The USITC will hold a public hearing in connection with the two reports at 9:30 a.m. on June 15, 2010. Requests to appear at the hearing should be filed no later than 5:15 p.m. on June 1, 2010, with the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. For further information, call 202-205-2000.
The USITC also welcomes written submissions for the record. Written submissions (one original and 14 copies) should be addressed to the Secretary of the Commission at the above address and should be submitted at the earliest practical date, but no later than 5:15 p.m. on November 16, 2010. All written submissions, except for confidential business information, will be available for public inspection.
Further information on the scope of the investigation and appropriate submissions is available in the USITC's notice of investigation, dated May 25, 2010, which can be obtained from the USITC Internet site (www.usitc.gov) or by contacting the Office of the Secretary at 202-205-2000.
USITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the House Committee on Ways and Means, or the Senate Committee on Finance. The resulting reports convey the Commission's objective findings and independent analyses on the subject investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the USITC submits its findings and analyses to the requester. General factfinding investigations reports are subsequently released to the public, unless they are classified by the requester for national security reasons.
May 25, 2010
News Release 10-055
Inv. No. 332-519
Contact: Peg O'Laughlin, 202-205-1819
USITC BEGINS SECOND OF TWO INVESTIGATIONS ON THE EFFECT OF INTELLECTUAL PROPERTY RIGHTS INFRINGEMENT IN CHINA ON U.S. ECONOMY AND JOBS
The U.S. International Trade Commission (USITC) has launched the second of two investigations into the effect on the U.S. economy and U.S. jobs of intellectual property rights (IPR) infringement in China.
The investigation, China: Effects of Intellectual Property Infringement and Indigenous Innovation Policies on the U.S. Economy, is the second report requested by the Committee on Finance, U.S. Senate, in a letter received on April 20, 2010.
In its letter requesting the investigations, the Committee stated: "Despite widespread evidence of the harm to U.S. industries, authors, and artists resulting from IPR infringement in China, the U.S. Government has not conducted a comprehensive economic analysis of the effect of China's ineffective IPR protection and enforcement on the U.S. economy and U.S. jobs." As requested, the USITC will deliver two reports to the Committee. The first investigation, China: Intellectual Property Infringement, Indigenous Innovation Policies, and Frameworks for Measuring the Effects on the U.S. Economy, was instituted on May 5, 2010.
In the second investigation, the USITC, an independent, nonpartisan, factfinding federal agency, will describe the size and scope of reported IPR infringement in China; provide a quantitative analysis of the effects of reported IPR infringement in China on the U.S. economy and U.S. jobs; and discuss actual, potential, and reported effects of China's indigenous innovation policies on the U.S. economy and U.S. jobs, and quantify these effects to the extent feasible. The second report will build upon the qualitative findings described in the first report. The USITC expects to deliver the second report to the Committee by May 2, 2011.
The USITC will hold a public hearing in connection with the two reports at 9:30 a.m. on June 15, 2010. Requests to appear at the hearing should be filed no later than 5:15 p.m. on June 1, 2010, with the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. For further information, call 202-205-2000.
The USITC also welcomes written submissions for the record. Written submissions (one original and 14 copies) should be addressed to the Secretary of the Commission at the above address and should be submitted at the earliest practical date, but no later than 5:15 p.m. on November 16, 2010. All written submissions, except for confidential business information, will be available for public inspection.
Further information on the scope of the investigation and appropriate submissions is available in the USITC's notice of investigation, dated May 25, 2010, which can be obtained from the USITC Internet site (www.usitc.gov) or by contacting the Office of the Secretary at 202-205-2000.
USITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the House Committee on Ways and Means, or the Senate Committee on Finance. The resulting reports convey the Commission's objective findings and independent analyses on the subject investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the USITC submits its findings and analyses to the requester. General factfinding investigations reports are subsequently released to the public, unless they are classified by the requester for national security reasons.
New Federal Circuit Opinions - May 26, 2010
Deere & Co., Inc. v. Int'l Trade Comm'n, No. 2009-1016 (Fed. Cir. May 26, 2010).
Vizio, Inc. v. Int'l Trade Comm'n, No. 2009-1386 (Fed. Cir. May 26, 2010).
Vizio, Inc. v. Int'l Trade Comm'n, No. 2009-1386 (Fed. Cir. May 26, 2010).
Tuesday, May 25, 2010
Misleading Silence Leads to Equitable Estoppel
Aspex Eyewear, Inc. v. Clariti Eyewear, Inc., Nos. 2009-1147, -1162 (Fed. Cir. May 24, 2010).
Holding:
An accused infringer’s development of its allegedly infringing product line, in reliance on a patentee’s silence after aggressive letters, represents a significant change in economic position and constitutes material prejudice sufficient to support equitable estoppel. Slip op. at 11.
“Prejudice may be shown by a change of economic position flowing from actions taken or not taken by the patentee.” Id.
Relevant Facts:
Aspex first contacted Clariti concerning a potential infringement in 2003. In the series of letters exchanged between the parties in 2003, Aspex did not name the patent in question. In 2006, more than three years later, Aspex contacted Clariti again regarding the patent in question, and after the parties exchanged additional letters, Aspex filed a patent infringement lawsuit. The district court granted Clariti’s summary judgment (SJ) motion, dismissing Aspex’s infringement claims on the ground of equitable estoppel based on the three years of silence. The Federal Circuit affirmed.
Comments:
In the context of patent infringement, equitable estoppel requires three elements to be established: “(1) the patentee, through misleading conduct, led the alleged infringer to reasonably believe that the patentee did not intend to enforce its patent against the infringer; (2) the alleged infringer relied on that conduct; and (3) due to its reliance, the alleged infringer would be materially prejudiced if the patentee were permitted to proceed with its charge of infringement.” Slip op. at 6.
Judge Rader authored a dissenting opinion, in which he pointed out that “[s]ilence alone will not create an estoppels” (Rader Op. at 1) and SJ was inappropriate because of “lingering questions of fact.” Id. at 6.
Holding:
An accused infringer’s development of its allegedly infringing product line, in reliance on a patentee’s silence after aggressive letters, represents a significant change in economic position and constitutes material prejudice sufficient to support equitable estoppel. Slip op. at 11.
“Prejudice may be shown by a change of economic position flowing from actions taken or not taken by the patentee.” Id.
Relevant Facts:
Aspex first contacted Clariti concerning a potential infringement in 2003. In the series of letters exchanged between the parties in 2003, Aspex did not name the patent in question. In 2006, more than three years later, Aspex contacted Clariti again regarding the patent in question, and after the parties exchanged additional letters, Aspex filed a patent infringement lawsuit. The district court granted Clariti’s summary judgment (SJ) motion, dismissing Aspex’s infringement claims on the ground of equitable estoppel based on the three years of silence. The Federal Circuit affirmed.
Comments:
In the context of patent infringement, equitable estoppel requires three elements to be established: “(1) the patentee, through misleading conduct, led the alleged infringer to reasonably believe that the patentee did not intend to enforce its patent against the infringer; (2) the alleged infringer relied on that conduct; and (3) due to its reliance, the alleged infringer would be materially prejudiced if the patentee were permitted to proceed with its charge of infringement.” Slip op. at 6.
Judge Rader authored a dissenting opinion, in which he pointed out that “[s]ilence alone will not create an estoppels” (Rader Op. at 1) and SJ was inappropriate because of “lingering questions of fact.” Id. at 6.
Monday, May 24, 2010
New Federal Circuit Opinions - May 24, 2010
Aspex Eyewear, Inc. v. Clariti Eyewear, Inc., Nos. 2009-1147, -1162 (Fed. Cir. May 24, 2010).
Carter v. ALK Holdings, Inc., No. 2008-1168 (Fed. Cir. May 24, 2010).
Carter v. ALK Holdings, Inc., No. 2008-1168 (Fed. Cir. May 24, 2010).
Tuesday, May 18, 2010
New Federal Circuit Opinions - May 17, 2010
Orion IP, LLC. v. Hyundai Motor Am., No. 2009-1130 (Fed. Cir. May 17, 2010)
Friday, May 14, 2010
New Federal Circuit Opinions - May 14, 2010
Alfred E. Mann Foundation for Scientific Research v. Cochlear Corp., No. 2009-1447 (Fed. Cir. May 14, 2010).
Thursday, May 13, 2010
Inequitable Conduct Leads to a Finding of Exceptional Case and Award of Attorney Fees and Costs
Taltech Ltd. v. Esquel Enters. Ltd., No. 2009-1344 (Fed. Cir. May. 12, 2010).
Holding:
District courts may award reasonable attorney fees to a prevailing party “in exceptional cases” under 35 U.S.C. § 285 for conducts such as inequitable conduct before the PTO and misconduct during litigation. Slip op. at 3.
Regarding materiality, as long as a patent applicant was asserting an argument of patentability, it is irrelevant whether these arguments were the ultimate reasons for the patent’s allowance. Id. at 14.
Relevant Facts:
Taltech owns United States Patent No. 5,568,779 (“’779 patent”) drawn to seams including thermal adhesive to reduce pucker, and TAL Apparel Limited is a licensee of the ’779 patent. Esquel filed a DJ action. After trial, the district court found that the inventor engaged in inequitable conduct before the PTO for nondisclosure of prior art URS and misrepresentation. Based on these findings, and a finding of litigation misconduct, the district court declared the case exceptional under 35 U.S.C. § 285. The July 13, 2007, final judgment awarded Esquel attorney fees and costs based on the exceptional case finding. TAL appealed. The Federal Circuit vacated the inequitable conduct determination and remanded the case for the district court to determine whether the prior art URS was cumulative to another reference. On remand, the district court reached the same determinations and entered a supplemental final judgment which also imposed interest from the date of the earlier July 13, 2007, judgment. In this present appeal, the Federal Circuit affirmed the award of attorney fees and costs, but reversed the post-judgment interest rate because the interest should run from the supplemental judgment date.
Comments:
This case illustrates the grave consequences of inequitable conduct before the PTO. Although the courts generally are reluctant to find inequitable conduct because of the high standard, a finding of inequitable conduct could lead to a finding of “exceptional cases” under 35 U.S.C. § 285 and award of attorney fees and costs to the prevailing party.
Moreover, the Federal Circuit reviews the district court’s determination of inequitable conduct for an abuse of discretion, and a finding that a case is exceptional within the meaning of 35 U.S.C. § 285 for clear error.. Slip op. at 4. Once a case is determined to be exceptional, the Federal Circuit reviews a district court’s decision to award attorney fees under an abuse of discretion standard. Id. at 4-5. Because of these standards of review, it is an uphill battle for the appellant to challenge a district court’s findings on appeal.
Holding:
District courts may award reasonable attorney fees to a prevailing party “in exceptional cases” under 35 U.S.C. § 285 for conducts such as inequitable conduct before the PTO and misconduct during litigation. Slip op. at 3.
Regarding materiality, as long as a patent applicant was asserting an argument of patentability, it is irrelevant whether these arguments were the ultimate reasons for the patent’s allowance. Id. at 14.
Relevant Facts:
Taltech owns United States Patent No. 5,568,779 (“’779 patent”) drawn to seams including thermal adhesive to reduce pucker, and TAL Apparel Limited is a licensee of the ’779 patent. Esquel filed a DJ action. After trial, the district court found that the inventor engaged in inequitable conduct before the PTO for nondisclosure of prior art URS and misrepresentation. Based on these findings, and a finding of litigation misconduct, the district court declared the case exceptional under 35 U.S.C. § 285. The July 13, 2007, final judgment awarded Esquel attorney fees and costs based on the exceptional case finding. TAL appealed. The Federal Circuit vacated the inequitable conduct determination and remanded the case for the district court to determine whether the prior art URS was cumulative to another reference. On remand, the district court reached the same determinations and entered a supplemental final judgment which also imposed interest from the date of the earlier July 13, 2007, judgment. In this present appeal, the Federal Circuit affirmed the award of attorney fees and costs, but reversed the post-judgment interest rate because the interest should run from the supplemental judgment date.
Comments:
This case illustrates the grave consequences of inequitable conduct before the PTO. Although the courts generally are reluctant to find inequitable conduct because of the high standard, a finding of inequitable conduct could lead to a finding of “exceptional cases” under 35 U.S.C. § 285 and award of attorney fees and costs to the prevailing party.
Moreover, the Federal Circuit reviews the district court’s determination of inequitable conduct for an abuse of discretion, and a finding that a case is exceptional within the meaning of 35 U.S.C. § 285 for clear error.. Slip op. at 4. Once a case is determined to be exceptional, the Federal Circuit reviews a district court’s decision to award attorney fees under an abuse of discretion standard. Id. at 4-5. Because of these standards of review, it is an uphill battle for the appellant to challenge a district court’s findings on appeal.
Wednesday, May 12, 2010
New Federal Circuit Opinions - May 12, 2010
Taltech Ltd. v. Esquel Enters. Ltd., No. 2009-1344 (Fed. Cir. May 12, 2010).
Fred Beverages, Inc. v. Fred's Capital Management Co., No. 2010-1007 (Fed. Cir. May 12, 2010).
Fred Beverages, Inc. v. Fred's Capital Management Co., No. 2010-1007 (Fed. Cir. May 12, 2010).
Monday, May 10, 2010
New Federal Circuit Opinions - May 10, 2010
Patent Rights Prot. Group, LLC v. Video Gaming Techs., Inc., No. 2009-1391 (Fed. Cir. May 10, 2010).
Ortho-McNeil Pharm., Inc. v. Lupin Pharm., Inc., No. 2009-1362 (Fed. Cir. May 10, 2010).
PhotoCure ASA v. Kappos, No. 2009-1392 (Fed. Cir. May 10, 2010).
Ortho-McNeil Pharm., Inc. v. Lupin Pharm., Inc., No. 2009-1362 (Fed. Cir. May 10, 2010).
PhotoCure ASA v. Kappos, No. 2009-1392 (Fed. Cir. May 10, 2010).
Friday, May 7, 2010
New Federal Circuit Opinions - May 7, 2010
Boehringer Ingelheim GmBH v. Barr Laboratories, Inc., Case No. 09-1032 (Fed. Cir. May 7, 2010).
Wednesday, May 5, 2010
New Federal Circuit Opinions - May 5, 2010
Rolls-Royce, PLC v. United Techs. Corp., No. 2009-1307 (Fed. Cir. May 5, 2010)
Thursday, April 29, 2010
New Federal Circuit Opinions - April 29, 2010
Bradford Co. v. Conteyor N. Am., Inc., No. 2009-1472 (Fed. Cir. Apr. 29, 2010).
Wednesday, April 28, 2010
New Federal Circuit Opinions - April 28, 2010
Oracle Corp. v. Parallel Networks, LLC, No. 2009-1183 (Fed. Cir. Apr. 28, 2010).
Tuesday, April 27, 2010
New Federal Circuit Opinions - April 27, 2010
Avid Identification Sys. v. Crystal Import Corp., Nos. 2009-1216, -1254 (Fed. Cir. Apr. 27, 2010).
Monday, April 26, 2010
New Federal Circuit Opinions - April 26, 2010
Alza Corp. v. Andrax Pharm., LLC., No. 2009-1350(Fed. Cir. Apr. 26, 2010).
Medtronic Navigation, Inc. v. BrainLAB Medizinische Computersystems GmbH, Nos. 2009-1058, -1059(Fed Cir. Apr. 26, 2010).
Medtronic Navigation, Inc. v. BrainLAB Medizinische Computersystems GmbH, Nos. 2009-1058, -1059(Fed Cir. Apr. 26, 2010).
Wednesday, April 21, 2010
New Federal Circuit Opinions - April 21, 2010
ClearPlay, Inc. v. Abecassis, No. 2009-1471 (Fed. Cir. Apr. 21, 2010).
Tuesday, April 20, 2010
New Federal Circuit Opinions - April 20, 2010
Gillig v. Nike, Inc., No. 2009-1415 (Fed. Cir. Apr. 20, 2010).
New Federal Circuit Opinions - April 19, 2010
Harari v. Hollmer, No. 2009-1406 (Fed. Cir. Apr. 19, 2010).
Monday, April 19, 2010
Three Lessons from Google’s China Fiasco
Note: A version of this article has been published by IP, Corporate Finance, International Trade and Technology Law360 on April 16. Click here for a copy.
Three Lessons from Google’s China Fiasco
Lei Mei, Partner, Mei & Mark LLP
Reece Nienstadt, Partner, Mei & Mark LLP
Google’s announcement on March 23, 2010, to pull out of China’s online search business brought its high-profile dispute with the Chinese government to a sad conclusion. Without commenting on the political and ethical nature of Google’s decision to quit censoring searches, the authors analyze Google’s fiasco from a business perspective and provide three lessons for American companies doing business in China.
According to some observers, Google’s dispute with the Chinese government might have been motivated largely by its business desire to gain market shares rather than by political and ethical concerns. From a business perspective, however, Google could not have done worse.
Undeniably, Google’s decision crippled its entire business operations in China. For example, China Mobile and China Unicom, the two largest cellular communications companies in China, were reported to have canceled cell-phone-related deals with Google under government pressure. It may take years, if not decades, for Google to reestablish itself in the lucrative Chinese market.
For many other American companies, Google’s exit from China provides three valuable lessons regarding doing business in China.
Lesson 1: Be Patient with Social Progress in China.
Keep in mind that China is still a “socialist” country with one governing party. Although China has embraced free-market economics since the early 1980s and its economy has improved beyond anyone’s imagination, China’s social progress has not kept pace with its economic growth.
Critics are frustrated with China’s political regime. No one can deny, however, that China has made significant social progress. For example, under the “one country, two systems” framework proposed by late President Deng Xiaoping, the Chinese government has allowed regions like Hong Kong and Macau to keep, to a large extent, their capitalist economic and political systems.
We all hope that the economic growth will spur more social progress. Nonetheless, one must be patient. Certainly, the priority for most American companies doing business in China is to make profit for their shareholders and gradually help Chinese society improve economically and socially; it is not to change China’s political landscape overnight.
Lesson 2: Avoid Getting Caught in Political Cross Fires.
We advise our American clients to avoid politics in China as much as possible. Unfortunately, to do business in China, one cannot totally avoid dealing with central, provincial, and/or local Chinese governments.
The solution is simple: be politically neutral and keep a low profile in China. Keeping a low profile does not mean that the company cannot be visible business-wise. Rather, if a dispute with a state-owned enterprise or the Chinese government arises, keep the dispute at a low profile.
Keeping a low profile allows a solution to be worked out quietly behind the scenes. In Google’s case, its dispute with the Chinese government became a high-profile case watched by the entire world. Under these circumstances, many otherwise workable solutions became non-options, because the Chinese government was concerned that it could lose “face” in front of its people and the world if it gave in to Google’s demand.
Had the dispute been kept at a low profile, the Chinese government could have entertained options to ease some of the restrictions. It would not be a complete victory for Google, but it could have allowed Google to continue its operations in China while simultaneously improving Chinese people’s access to more information.
Lesson 3: Be Aware of Unspoken Chinese Rules.
Not surprisingly, doing business in China carries many risks. For American companies, these risks include trade secret theft, technology leaks, and IP infringement. Although many American companies can implement sophisticated legal, organizational, and technical procedures and strategies to minimize such risks, some risks may nevertheless remain.
The test of an American company doing business in China, therefore, is not how well it minimizes the risks beforehand, but how well it deals with crisis afterward. Without a well-planned crisis management strategy, many American companies will mistakenly take a short-sighted approach and jeopardize their long-term business interests.
The key component of any well-planned crisis management strategy is to be aware of unspoken Chinese rules. One such rule is to not lose “face” with respect to yourself or other parties that may provide you strategic value.
In Google’s case, it became apparent in the months leading to Google’s exit announcement that either Google or the Chinese government would lose “face” after the highly publicized dispute between the two. And it was inevitable that Google would end up quitting its Chinese online search business.
In comparison, General Motors handled its predicament very well after Chery Automobile, a Chinese automaker, allegedly copied the design of the Chevrolet Spark developed by GM’s Daewoo subsidiary in 2004. At the time, GM was producing a similar model with its two Chinese joint venture partners when the alleged technology leak took place. And interestingly, Chery was partially owned by a key Chinese joint venture partner of GM. After much silence, GM eventually proceeded to sue Chery in a Chinese court and the case was settled.
Initially, the industry observers were puzzled that GM seemingly took a very low-profile approach, and appeared to be reluctant to enforce its legal rights. GM’s subsequent commercial success in China, however, proves that GM’s crisis management strategy, counter-intuitive at the time, paid off handsomely. In 2005, the year after the alleged incident, GM’s Chinese market share grew 35.2%. In 2009, GM’s sales in China surged 67%, selling more than 1.8 million cars and trucks.
As a latecomer to the Chinese automobile industry, without the support of its key joint venture partners and the Chinese government at all levels, GM would not have achieved its success today if it had enforced its legal rights against Chery aggressively.
Therefore, one must be aware of unspoken Chinese rules and implement a holistic crisis management plan. While American companies have a tendency to exercise legal options when dealing with technology leak and IP infringement, it may not always be the best way to do business in China. Sometimes, a loss today can turn into a big win tomorrow in China!
About the Authors:
Reece Nienstadt is a partner at Mei & Mark LLP, an Intellectual Property and Litigation law firm based in Washington, DC. Lei Mei is a founding partner at Mei & Mark LLP and the author of the forthcoming book “How to Conduct Business in China: An Intellectual Property Perspective,” to be published by Oxford University Press.
Three Lessons from Google’s China Fiasco
Lei Mei, Partner, Mei & Mark LLP
Reece Nienstadt, Partner, Mei & Mark LLP
Google’s announcement on March 23, 2010, to pull out of China’s online search business brought its high-profile dispute with the Chinese government to a sad conclusion. Without commenting on the political and ethical nature of Google’s decision to quit censoring searches, the authors analyze Google’s fiasco from a business perspective and provide three lessons for American companies doing business in China.
According to some observers, Google’s dispute with the Chinese government might have been motivated largely by its business desire to gain market shares rather than by political and ethical concerns. From a business perspective, however, Google could not have done worse.
Undeniably, Google’s decision crippled its entire business operations in China. For example, China Mobile and China Unicom, the two largest cellular communications companies in China, were reported to have canceled cell-phone-related deals with Google under government pressure. It may take years, if not decades, for Google to reestablish itself in the lucrative Chinese market.
For many other American companies, Google’s exit from China provides three valuable lessons regarding doing business in China.
Lesson 1: Be Patient with Social Progress in China.
Keep in mind that China is still a “socialist” country with one governing party. Although China has embraced free-market economics since the early 1980s and its economy has improved beyond anyone’s imagination, China’s social progress has not kept pace with its economic growth.
Critics are frustrated with China’s political regime. No one can deny, however, that China has made significant social progress. For example, under the “one country, two systems” framework proposed by late President Deng Xiaoping, the Chinese government has allowed regions like Hong Kong and Macau to keep, to a large extent, their capitalist economic and political systems.
We all hope that the economic growth will spur more social progress. Nonetheless, one must be patient. Certainly, the priority for most American companies doing business in China is to make profit for their shareholders and gradually help Chinese society improve economically and socially; it is not to change China’s political landscape overnight.
Lesson 2: Avoid Getting Caught in Political Cross Fires.
We advise our American clients to avoid politics in China as much as possible. Unfortunately, to do business in China, one cannot totally avoid dealing with central, provincial, and/or local Chinese governments.
The solution is simple: be politically neutral and keep a low profile in China. Keeping a low profile does not mean that the company cannot be visible business-wise. Rather, if a dispute with a state-owned enterprise or the Chinese government arises, keep the dispute at a low profile.
Keeping a low profile allows a solution to be worked out quietly behind the scenes. In Google’s case, its dispute with the Chinese government became a high-profile case watched by the entire world. Under these circumstances, many otherwise workable solutions became non-options, because the Chinese government was concerned that it could lose “face” in front of its people and the world if it gave in to Google’s demand.
Had the dispute been kept at a low profile, the Chinese government could have entertained options to ease some of the restrictions. It would not be a complete victory for Google, but it could have allowed Google to continue its operations in China while simultaneously improving Chinese people’s access to more information.
Lesson 3: Be Aware of Unspoken Chinese Rules.
Not surprisingly, doing business in China carries many risks. For American companies, these risks include trade secret theft, technology leaks, and IP infringement. Although many American companies can implement sophisticated legal, organizational, and technical procedures and strategies to minimize such risks, some risks may nevertheless remain.
The test of an American company doing business in China, therefore, is not how well it minimizes the risks beforehand, but how well it deals with crisis afterward. Without a well-planned crisis management strategy, many American companies will mistakenly take a short-sighted approach and jeopardize their long-term business interests.
The key component of any well-planned crisis management strategy is to be aware of unspoken Chinese rules. One such rule is to not lose “face” with respect to yourself or other parties that may provide you strategic value.
In Google’s case, it became apparent in the months leading to Google’s exit announcement that either Google or the Chinese government would lose “face” after the highly publicized dispute between the two. And it was inevitable that Google would end up quitting its Chinese online search business.
In comparison, General Motors handled its predicament very well after Chery Automobile, a Chinese automaker, allegedly copied the design of the Chevrolet Spark developed by GM’s Daewoo subsidiary in 2004. At the time, GM was producing a similar model with its two Chinese joint venture partners when the alleged technology leak took place. And interestingly, Chery was partially owned by a key Chinese joint venture partner of GM. After much silence, GM eventually proceeded to sue Chery in a Chinese court and the case was settled.
Initially, the industry observers were puzzled that GM seemingly took a very low-profile approach, and appeared to be reluctant to enforce its legal rights. GM’s subsequent commercial success in China, however, proves that GM’s crisis management strategy, counter-intuitive at the time, paid off handsomely. In 2005, the year after the alleged incident, GM’s Chinese market share grew 35.2%. In 2009, GM’s sales in China surged 67%, selling more than 1.8 million cars and trucks.
As a latecomer to the Chinese automobile industry, without the support of its key joint venture partners and the Chinese government at all levels, GM would not have achieved its success today if it had enforced its legal rights against Chery aggressively.
Therefore, one must be aware of unspoken Chinese rules and implement a holistic crisis management plan. While American companies have a tendency to exercise legal options when dealing with technology leak and IP infringement, it may not always be the best way to do business in China. Sometimes, a loss today can turn into a big win tomorrow in China!
About the Authors:
Reece Nienstadt is a partner at Mei & Mark LLP, an Intellectual Property and Litigation law firm based in Washington, DC. Lei Mei is a founding partner at Mei & Mark LLP and the author of the forthcoming book “How to Conduct Business in China: An Intellectual Property Perspective,” to be published by Oxford University Press.
Friday, April 16, 2010
New Federal Circuit Opinions - April 16, 2010
Verizon Servs. Corp. v. Cox Fibernet Va., Inc., Nos. 2009-1086, -1098 (Fed. Cir. Apr. 16, 2010).
Crash Dummy Movie, Llc. v. Mattel, Inc., No. 2009-1239 (Fed. Cir. Apr. 16, 2010).
Crash Dummy Movie, Llc. v. Mattel, Inc., No. 2009-1239 (Fed. Cir. Apr. 16, 2010).
Wednesday, April 14, 2010
New Federal Circuit Opinions - April 14, 2010
In re Suitco Surface, Inc., No. 2009-1418 (Fed. Cir. Apr. 14, 2010).
Novo Nordisk A/S v. Caraco Pharm. Labs., Ltd., No. 2010-10001 (Fed. Cir. Apr. 14, 2010).
Novo Nordisk A/S v. Caraco Pharm. Labs., Ltd., No. 2010-10001 (Fed. Cir. Apr. 14, 2010).
Tuesday, April 13, 2010
One Challenging Patent Assignment Has the Burden to Rebut the Validity of Assignment
SiRF Tech., Inc. v. Int'l Trade Comm'n, No. 2009-1262 (Fed. Cir. Apr. 12, 2010).
Holding:
One challenging the patent assignment has the burden to rebut the validity of assignment. Slip op. at 12.
Relevant Facts:
Global Locate owns several patents related to GPS technology. The International Trade Commission found that SiRF infringes Global Locate’s patents. Among several issues, SiRF challenges Global Locate’s standing to sue. Specifically, one inventor worked at a third party company Magellan and under his employee inventions agreement, he had the obligation to assign Magellan “all inventions . . . which are related to or useful in the business of the Employer . . . and which were . . . conceived . . . during the period of the Employee’s employment, whether or not in the course of the Employee’s employment.” Slip op. at 9. The Commission found that the invention was not “related to or useful in the business of the Employer.” The Federal Circuit affirmed the Commission’s decision.
Comments:
The question of standing to assert a patent claim is jurisdictional, and the Federal Circuit reviews this question de novo. Because the patents were assigned to Global Locate, however, the burden of proof on this issue rested with the challengers. The Federal Circuit affirmed the Commission’s factual determination under the “substantial evidence” standard, finding that the challengers have not sustained their burden is supported by substantial evidence. Slip op. at 13.
Holding:
One challenging the patent assignment has the burden to rebut the validity of assignment. Slip op. at 12.
Relevant Facts:
Global Locate owns several patents related to GPS technology. The International Trade Commission found that SiRF infringes Global Locate’s patents. Among several issues, SiRF challenges Global Locate’s standing to sue. Specifically, one inventor worked at a third party company Magellan and under his employee inventions agreement, he had the obligation to assign Magellan “all inventions . . . which are related to or useful in the business of the Employer . . . and which were . . . conceived . . . during the period of the Employee’s employment, whether or not in the course of the Employee’s employment.” Slip op. at 9. The Commission found that the invention was not “related to or useful in the business of the Employer.” The Federal Circuit affirmed the Commission’s decision.
Comments:
The question of standing to assert a patent claim is jurisdictional, and the Federal Circuit reviews this question de novo. Because the patents were assigned to Global Locate, however, the burden of proof on this issue rested with the challengers. The Federal Circuit affirmed the Commission’s factual determination under the “substantial evidence” standard, finding that the challengers have not sustained their burden is supported by substantial evidence. Slip op. at 13.
New Federal Circuit Opinions - April 13, 2010
Anascape, Ltd. v. Nintendo of Am., Inc., No. 2008-1500 (Fed. Cir. Apr. 13, 2010).
In re Mighty Tea Leaf, No. 2009-1497 (Fed. Cir. Apr. 13, 2010).
In re Mighty Tea Leaf, No. 2009-1497 (Fed. Cir. Apr. 13, 2010).
New Federal Circuit Opinions - April 12, 2010
SiRF Tech., Inc. v. Int'l Trade Comm'n, No. 2009-1262 (Fed. Cir. Apr. 12, 2010).
Friday, April 9, 2010
IP Law360 Article: IP Enforcement In China Still A Work In Progress
On April 9, 2010, IP Law360 published an article "IP Enforcement In China Still A Work In Progress," which contains an interview with Lei Mei, a founding partner at Mei & Mark LLP.
Please click here to view the article.
Please click here to view the article.
Lexis Nexis Published Case Study on the Trimone Case
On March 26, 2010, Lexis Nexis published a case study by Lei Mei, a founding partner at Mei & Mark LLP, in its China Legal Review in English and Chinese. Click here for a copy of the article. The English version is reproduced below.
The Trimone Case: The First Ever Win for a Chinese Company in an ITC-Related U.S. Customs Proceeding
Lei Mei, Managing Partner, Mei & Mark LLP
On May 12, 2009, U.S. Customs issued a ruling that Zhejiang Trimone’s re-designed TGM ground fault circuit interrupters (GFCIs) fall outside the scope of the exclusion orders issued by the United States International Trade Commission (ITC) in Investigation No. 337-TA-615. This case was reported by national media in China to be the first ever win for a Chinese company to obtain a favorable ruling from the U.S. Customs after it had lost at the ITC.
This article describes the background of the Trimone case, and offers practical advice regarding post-ITC U.S. Customs proceedings. For many Chinese companies, the U.S. Customs proceedings may be a cost effective option to overcome the trade barriers created by ITC exclusion orders.
I. Background
The ITC instituted an investigation of certain GFCIs and products containing same on September 18, 2007, based on a complaint filed by Pass & Seymour, Inc. (“P&S”). The complaint alleged that Trimone and other respondents violated Section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337, by selling for importation certain GFCIs that infringed P&S’ patents.
Trimone is a privately held company based in Zhejiang. The company develops its own GFCI technologies and owns several Chinese and U.S. patents related to GFCI. In previous cases, many Chinese companies chose not to respond to ITC investigations. Trimone, however, aggressively defended its claim that it did not infringe P&S’ patents, retaining one of the largest international law firms to represent it before the ITC. On March 9, 2009, the ITC found that Trimone infringed U.S. Patent No. 7,283,340 (“the ’340 patent”), but not other P&S patents. As a result, the ITC issued a limited exclusion order, excluding entry of Trimone’s infringing GFCI products.
On March 18, 2009, Trimone retained our firm, Mei & Mark LLP, to find a resolution to allow it to continue to sell products in the U.S. notwithstanding the limited exclusion order. The traditional option, of course, was to appeal to the United States Court of Appeals for the Federal Circuit (“the Federal Circuit”), which could take over a year to resolve. In addition to the appeal, we proposed a little known legal option to bring a design-around product before the U.S. Customs for a quick ruling on whether the re-designed product is subject to the limited exclusion order.
The U.S. Customs option is more cost-effective, because a U.S. Customs proceeding typically takes about three to four months to complete, much faster than the Federal Circuit appeal or an advisory opinion proceeding before the ITC.
We contacted the IPR branch of the U.S. Customs’ headquarters in Washington, D.C., and submitted legal briefs and supporting documents to demonstrate that Trimone’s new GFCI products do not infringe the ’340 patent. On April 3, 2009, we had an in-person, meeting with an U.S. Customs official, who is also an attorney, at the IPR branch. Subsequently, we communicated with the U.S. Customs, providing additional supporting documents.
On May 12, 2009, the U.S. Customs ruled that Trimone’s re-designed TGM series of its GFCI products do not infringe the ’340 patent and fall outside the scope of the limited exclusion order. Therefore, unlike other Chinese respondents in this case, Trimone is the only Chinese company that can sell its GFCI products to the U.S.
As a result, not only has Trimone’s business recovered from its loss at the ITC, Trimone has also received more orders now from U.S. customers than it did before the ITC investigation because of this favorable ruling from the U.S. Customs.
II. Legal Basis
According to the U.S. Federal Regulations 19 C.F.R. Part 177, the U.S. Customs has discretion to issue legal opinions related to imported goods. Because the ITC does not enforce the exclusion orders, the U.S. Customs has the responsibilities for enforcement.
ITC exclusion orders are typically very general and vague. Therefore, the U.S. Customs also has the flexibility in implementing the enforcement mechanism and interpreting ITC exclusion orders.
For example, in the Trimone case, the ITC issued a limited exclusion order, paragraph 3 of which prohibits import of any GFIC products that infringe the ’340 patent, without naming specific products:
As a result, the U.S. Customs must decide what products would infringe the patents in dispute. Obviously, for the specific products named in the ITC investigation, the ITC has already made the ruling, so the U.S. Customs cannot change that. For new or re-designed products, however, the ITC has not ruled on them before. Therefore, the U.S. Customs has the discretion under 19 C.F.R. Part 177 to issue a ruling.
Typically, an ITC exclusion order specifically allows the U.S. Customs to have discretion in the enforcement. For example, in the Trimone case, paragraph 6 of the limited exclusion order describes the U.S. Customs’ role in enforcing the limited exclusion order:
Unfortunately, most Chinese companies are unfamiliar with post-ITC U.S. Customs proceedings. Indeed, even American companies have rarely used this legal option until recently, and many U.S. lawyers are not aware of this area of law. Therefore, we hope that more Chinese companies can learn from Trimone’s experience.
III. Conclusion
IP-related trade barriers are not insurmountable. When facing a patent lawsuit in the United States, whether it is an ITC investigation or a federal district court litigation, Chinese companies must consult with competent U.S. patent lawyers and consider all options. It is not necessary to always spend millions of dollars in attorneys’ fees to defend a patent infringement lawsuit. Other legal options, such as U.S. Customs proceedings, could be cost-effective alternatives. If advised properly, more and more Chinese companies can learn from Trimone’s success and become much stronger coming out of IP disputes.
About the Author:
Lei Mei is a partner at Mei & Mark LLP, an Intellectual Property and Litigation law firm based in Washington, DC.
The Trimone Case: The First Ever Win for a Chinese Company in an ITC-Related U.S. Customs Proceeding
Lei Mei, Managing Partner, Mei & Mark LLP
On May 12, 2009, U.S. Customs issued a ruling that Zhejiang Trimone’s re-designed TGM ground fault circuit interrupters (GFCIs) fall outside the scope of the exclusion orders issued by the United States International Trade Commission (ITC) in Investigation No. 337-TA-615. This case was reported by national media in China to be the first ever win for a Chinese company to obtain a favorable ruling from the U.S. Customs after it had lost at the ITC.
This article describes the background of the Trimone case, and offers practical advice regarding post-ITC U.S. Customs proceedings. For many Chinese companies, the U.S. Customs proceedings may be a cost effective option to overcome the trade barriers created by ITC exclusion orders.
I. Background
The ITC instituted an investigation of certain GFCIs and products containing same on September 18, 2007, based on a complaint filed by Pass & Seymour, Inc. (“P&S”). The complaint alleged that Trimone and other respondents violated Section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337, by selling for importation certain GFCIs that infringed P&S’ patents.
Trimone is a privately held company based in Zhejiang. The company develops its own GFCI technologies and owns several Chinese and U.S. patents related to GFCI. In previous cases, many Chinese companies chose not to respond to ITC investigations. Trimone, however, aggressively defended its claim that it did not infringe P&S’ patents, retaining one of the largest international law firms to represent it before the ITC. On March 9, 2009, the ITC found that Trimone infringed U.S. Patent No. 7,283,340 (“the ’340 patent”), but not other P&S patents. As a result, the ITC issued a limited exclusion order, excluding entry of Trimone’s infringing GFCI products.
On March 18, 2009, Trimone retained our firm, Mei & Mark LLP, to find a resolution to allow it to continue to sell products in the U.S. notwithstanding the limited exclusion order. The traditional option, of course, was to appeal to the United States Court of Appeals for the Federal Circuit (“the Federal Circuit”), which could take over a year to resolve. In addition to the appeal, we proposed a little known legal option to bring a design-around product before the U.S. Customs for a quick ruling on whether the re-designed product is subject to the limited exclusion order.
The U.S. Customs option is more cost-effective, because a U.S. Customs proceeding typically takes about three to four months to complete, much faster than the Federal Circuit appeal or an advisory opinion proceeding before the ITC.
We contacted the IPR branch of the U.S. Customs’ headquarters in Washington, D.C., and submitted legal briefs and supporting documents to demonstrate that Trimone’s new GFCI products do not infringe the ’340 patent. On April 3, 2009, we had an in-person, meeting with an U.S. Customs official, who is also an attorney, at the IPR branch. Subsequently, we communicated with the U.S. Customs, providing additional supporting documents.
On May 12, 2009, the U.S. Customs ruled that Trimone’s re-designed TGM series of its GFCI products do not infringe the ’340 patent and fall outside the scope of the limited exclusion order. Therefore, unlike other Chinese respondents in this case, Trimone is the only Chinese company that can sell its GFCI products to the U.S.
As a result, not only has Trimone’s business recovered from its loss at the ITC, Trimone has also received more orders now from U.S. customers than it did before the ITC investigation because of this favorable ruling from the U.S. Customs.
II. Legal Basis
According to the U.S. Federal Regulations 19 C.F.R. Part 177, the U.S. Customs has discretion to issue legal opinions related to imported goods. Because the ITC does not enforce the exclusion orders, the U.S. Customs has the responsibilities for enforcement.
ITC exclusion orders are typically very general and vague. Therefore, the U.S. Customs also has the flexibility in implementing the enforcement mechanism and interpreting ITC exclusion orders.
For example, in the Trimone case, the ITC issued a limited exclusion order, paragraph 3 of which prohibits import of any GFIC products that infringe the ’340 patent, without naming specific products:
3. Ground fault circuit interrupters and products containing the same covered by one or more of claims 14 and 18 of the ‘340 patent, and that are manufactured abroad by or on behalf of, or imported by or on behalf of, Trimone or any of its affiliated companies, parents, subsidiaries, or other related business entities, or its successors or assigns are excluded from entry for consumption, entry for consumption from a foreign-trade zone, or withdrawal from a warehouse for consumption, for the remaining term of the patents, except under license of the patent owner or as provided by law.
As a result, the U.S. Customs must decide what products would infringe the patents in dispute. Obviously, for the specific products named in the ITC investigation, the ITC has already made the ruling, so the U.S. Customs cannot change that. For new or re-designed products, however, the ITC has not ruled on them before. Therefore, the U.S. Customs has the discretion under 19 C.F.R. Part 177 to issue a ruling.
Typically, an ITC exclusion order specifically allows the U.S. Customs to have discretion in the enforcement. For example, in the Trimone case, paragraph 6 of the limited exclusion order describes the U.S. Customs’ role in enforcing the limited exclusion order:
6. At the discretion of U.S. Customs and Border Protection (“CBP”) and pursuant to procedures it establishes, persons seeking to import ground fault circuit interrupters and products containing the same that are potentially subject to this Order may be required to certify that they are familiar with the terns of this Order, that they have made appropriate inquiry, and thereupon state that, to the best of their knowledge and belief, the products being imported are not excluded from entry under paragraphs 1 through 10 of this Order. At its discretion, Customs may require persons who have provided the certification described in this paragraph to furnish such records or analyses as are necessary to substantiate the certification.
Unfortunately, most Chinese companies are unfamiliar with post-ITC U.S. Customs proceedings. Indeed, even American companies have rarely used this legal option until recently, and many U.S. lawyers are not aware of this area of law. Therefore, we hope that more Chinese companies can learn from Trimone’s experience.
III. Conclusion
IP-related trade barriers are not insurmountable. When facing a patent lawsuit in the United States, whether it is an ITC investigation or a federal district court litigation, Chinese companies must consult with competent U.S. patent lawyers and consider all options. It is not necessary to always spend millions of dollars in attorneys’ fees to defend a patent infringement lawsuit. Other legal options, such as U.S. Customs proceedings, could be cost-effective alternatives. If advised properly, more and more Chinese companies can learn from Trimone’s success and become much stronger coming out of IP disputes.
About the Author:
Lei Mei is a partner at Mei & Mark LLP, an Intellectual Property and Litigation law firm based in Washington, DC.
Wednesday, April 7, 2010
New Federal Circuit Opinions - April 7, 2010
Bid for Position, LLC v. AOL, LLC, No. 09-1068 (Fed. Cir. Apr. 7, 2010).
Yorkey v. Diab, No. 08-1577 (Fed. Cir. Apr. 7, 2010).
Yorkey v. Diab, No. 08-1578 (Fed. Cir. Apr. 7, 2010).
Vanderbilt Univ. v. Icos Corp., No. 09-1258 (Fed. Cir. Apr. 7, 2010).
Yorkey v. Diab, No. 08-1577 (Fed. Cir. Apr. 7, 2010).
Yorkey v. Diab, No. 08-1578 (Fed. Cir. Apr. 7, 2010).
Vanderbilt Univ. v. Icos Corp., No. 09-1258 (Fed. Cir. Apr. 7, 2010).
Thursday, April 1, 2010
New Federal Circuit Opinions - April 1, 2010
Innovative Therapies, Inc. v. Kinetic Concepts, Inc., No. 2009-1085 (Fed. Cir. Apr. 1, 2010).
Hearing Components, Inc. v. Shure, Inc., Nos. 2009-1364, -1365 (Fed. Cir. Apr. 1, 2010).
Hearing Components, Inc. v. Shure, Inc., Nos. 2009-1364, -1365 (Fed. Cir. Apr. 1, 2010).
Wednesday, March 31, 2010
35 U.S.C. § 116 Does Not Provide a Private Right of Action to Challenge Inventorship of a Pending Patent Application
HIF Bio, Inc. v. Yung Shin Pharms. Indus. Co., Ltd., No. 2006-1522 (Fed. Cir. Mar. 31, 2010).
Holding:
35 U.S.C. § 116 does not provide a private right of action to challenge inventorship of a pending patent application, but 35 U.S.C. § 256 provides a private right of action to challenge inventorship under § 1338(a) for an issued patent. Slip op. at 9.
Relevant Facts:
Two scientist began investigating the effect of a chemical, YC-1, on a protein complex known as HIF-1, and filed and assigned a patent application to the plaintiffs. During the research, they discussed their hypothesis with another scientist who allegedly filed a separate application on the same idea and assigned it to another company. The plaintiffs sued the defendant in a state court, and the defendant removed the case to a federal district court. After dismissing the RICO claim, the district court declined to exercise supplemental jurisdiction and remanded the case to the state court. The defendant appealed, and the Federal Circuit initially held that the Federal Circuit lacked appellate jurisdiction to review a district court’s remand order that was based upon the district court’s decision not to exercise supplemental jurisdiction. The Supreme Court subsequently reversed the Federal Circuit’s decision. On remand, the Federal Circuit held that the district court did abuse its discretion because two of the remanded causes of action “arise under” 28 U.S.C. 1338(a), but the district court should have dismissed these purported causes of action for failure to state a claim for which relief can be granted.
Holding:
35 U.S.C. § 116 does not provide a private right of action to challenge inventorship of a pending patent application, but 35 U.S.C. § 256 provides a private right of action to challenge inventorship under § 1338(a) for an issued patent. Slip op. at 9.
Relevant Facts:
Two scientist began investigating the effect of a chemical, YC-1, on a protein complex known as HIF-1, and filed and assigned a patent application to the plaintiffs. During the research, they discussed their hypothesis with another scientist who allegedly filed a separate application on the same idea and assigned it to another company. The plaintiffs sued the defendant in a state court, and the defendant removed the case to a federal district court. After dismissing the RICO claim, the district court declined to exercise supplemental jurisdiction and remanded the case to the state court. The defendant appealed, and the Federal Circuit initially held that the Federal Circuit lacked appellate jurisdiction to review a district court’s remand order that was based upon the district court’s decision not to exercise supplemental jurisdiction. The Supreme Court subsequently reversed the Federal Circuit’s decision. On remand, the Federal Circuit held that the district court did abuse its discretion because two of the remanded causes of action “arise under” 28 U.S.C. 1338(a), but the district court should have dismissed these purported causes of action for failure to state a claim for which relief can be granted.
New Federal Circuit Opinions - March 31, 2010
HIF Bio, Inc. v. Yung Shin Pharms. Indus. Co., Ltd., No. 2006-1522 (Fed. Cir. Mar. 31, 2010).
Tuesday, March 30, 2010
Chinese Courts Received 30K+ IP Cases in 2009
According to the People's Supreme Court of China's news release, Chinese courts received 30,626 new IR cases in 2009, an 25% increase over 2008. For additional statistics, please contact Lei Mei at Mei & Mark LLP.
New Federal Circuit Opinions - March 30, 2010
Power-One, Inc. v. Artesyn Techs, Inc., Nos. 2008-1501, -1507 (Fed. Cir. Mar. 30, 2010)
Friday, March 26, 2010
New Federal Circuit Opinions - March 26, 2010
Enzo Biochem, Inc. v. Applera Corp., No. 2009-1281 (Fed. Cir. Mar. 26, 2010).
Wednesday, March 24, 2010
The Federal Circuit Affirmed its Written Description Doctrine
Ariad Pharms., Inc. v. Eli Lilly & Co., No. 2008-1248 (Fed. Cir. Mar. 22, 2010).
Holding:
35 U.S.C. §112, paragraph 1, contains a written description requirement separate from an enablement requirement. Slip op. at 23.
The test for sufficiency is whether the disclosure of the application relied upon reasonably conveys to those skilled in the art that the inventor had possession of the claimed subject matter as of the filing date. Id.
Relevant Facts:
Ariad sued Eli Lilly for infringement of U.S. Patent 6,410,516. A jury found the asserted claims valid and infringed. A panel of the Federal Circuit reversed the district court’s denial of Lilly’s motion for judgment as a matter of law (“JMOL”) and held the asserted claims invalid for lack of written description. Ariad petitioned for rehearing en banc, challenging the Federal Circuit’s interpretation of 35 U.S.C. § 112, first paragraph, as containing a separate written description requirement. The Federal Circuit affirmed its written description doctrine and affirmed the panel’s ruling.
Comments:
The difference (or lack of it) between the written description requirement and the enablement requirement means little for electrical and mechanical inventions, but not always true for chemical or chemical-like inventions having genus claims:
Slip op. at 29.
Holding:
35 U.S.C. §112, paragraph 1, contains a written description requirement separate from an enablement requirement. Slip op. at 23.
The test for sufficiency is whether the disclosure of the application relied upon reasonably conveys to those skilled in the art that the inventor had possession of the claimed subject matter as of the filing date. Id.
Relevant Facts:
Ariad sued Eli Lilly for infringement of U.S. Patent 6,410,516. A jury found the asserted claims valid and infringed. A panel of the Federal Circuit reversed the district court’s denial of Lilly’s motion for judgment as a matter of law (“JMOL”) and held the asserted claims invalid for lack of written description. Ariad petitioned for rehearing en banc, challenging the Federal Circuit’s interpretation of 35 U.S.C. § 112, first paragraph, as containing a separate written description requirement. The Federal Circuit affirmed its written description doctrine and affirmed the panel’s ruling.
Comments:
The difference (or lack of it) between the written description requirement and the enablement requirement means little for electrical and mechanical inventions, but not always true for chemical or chemical-like inventions having genus claims:
Perhaps there is little difference in some fields between describing an invention and enabling one to make and use it, but that is not always true of certain inventions, including chemical and chemical-like inventions. Thus, although written description and enablement often rise and fall together, requiring a written description of the invention plays a vital role in curtailing claims that do not require undue experimentation to make and use, and thus satisfy enablement, but that have not been invented, and thus cannot be described. For example, a propyl or butyl compound may be made by a process analogous to a disclosed methyl compound, but, in the absence of a statement that the inventor invented propyl and butyl compounds, such compounds have not been described and are not entitled to a patent.
Slip op. at 29.
New Federal Circuit Opinions - March 24, 2010
Pressure Products Medical Supplies, Inc. v. Greatbatch Ltd., No. 2008-1602 (Fed. Cir. Mar. 24, 2010).
Tuesday, March 23, 2010
New Federal Circuit Opinions - March 22, 2010
Marrin v. Griffin, No. 2009-1031 (Fed. Cir. Mar. 22, 2010) (en banc).
Ariad Pharms., Inc. v. Eli Lilly & Co., No. 2008-1248 (Fed. Cir. Mar. 22, 2010).
Ariad Pharms., Inc. v. Eli Lilly & Co., No. 2008-1248 (Fed. Cir. Mar. 22, 2010).
Saturday, March 20, 2010
DTV Patent War Watch (9)
New DTV Case (ITC):
On March 18, 2010, Sony Corporation filed a complaint before the International Trade Commission (ITC), requesting that the Commission conduct an Section 337 investigation regarding Display Devices, Including Digital Televisions and Monitors.
The proposed respondents are: TPV Technology Limited, Hong Kong; Top Victory Electronics (Taiwan) Co., Ltd., Taiwan; TPV International (USA), Inc., Texas; Envision Peripherals, Inc., California; Top Victory Investments Ltd., Hong Kong; TPV Electronics (Fujian) Co., Ltd., China; TPV Display Technology (Wuhan) Co., Ltd., China; TPV Technology (Bejing), Co. Ltd., China; Innolux Display Corporation, Taiwan; Innolux Corporation, Texas and ViewSonic Corporation, California.
For a public version of the complaint, please click here.
On March 18, 2010, Sony Corporation filed a complaint before the International Trade Commission (ITC), requesting that the Commission conduct an Section 337 investigation regarding Display Devices, Including Digital Televisions and Monitors.
The proposed respondents are: TPV Technology Limited, Hong Kong; Top Victory Electronics (Taiwan) Co., Ltd., Taiwan; TPV International (USA), Inc., Texas; Envision Peripherals, Inc., California; Top Victory Investments Ltd., Hong Kong; TPV Electronics (Fujian) Co., Ltd., China; TPV Display Technology (Wuhan) Co., Ltd., China; TPV Technology (Bejing), Co. Ltd., China; Innolux Display Corporation, Taiwan; Innolux Corporation, Texas and ViewSonic Corporation, California.
For a public version of the complaint, please click here.
New Federal Circuit Opinions - March 19, 2010
Odom’s Tenn. Pride Sausage, Inc. v. FF Acquisition, L.L.C., No. 2009-1473 (Fed. Cir. Mar. 19, 2010)
Tuesday, March 16, 2010
New Federal Circuit Opinions - March 11, 2010
Lab. Corp. of Am. Holdings v. Metabloite Labs., Inc., No. 2008-1597(Fed. Cir. Mar. 11, 2010)
Delaware Valley Floral Group, Inc. v. Shaw Rose Nets, LLC, No. 2009-1357 (Fed. Cir. Mar. 11, 2010)
Delaware Valley Floral Group, Inc. v. Shaw Rose Nets, LLC, No. 2009-1357 (Fed. Cir. Mar. 11, 2010)
Tuesday, March 9, 2010
New Federal Circuit Opinions - March 9, 2010
Richardson v. Stanley Works, Inc., No. 2009-1354 (Fed. Cir. Mar. 9, 2010).
Friday, March 5, 2010
Good Faith Efforts to Design Around an Infringement Verdict Are Not Sufficient to Avoid a Contempt Proceeding
Tivo, Inc. v. EchoStar Corp., No. 2009-1374 (Fed. Cir. Mar. 4, 2010).
Holding:
Good faith efforts to design around an infringement verdict are not sufficient to avoid a contempt proceeding. Slip op. at 12.
A contempt hearing may be proper even if the redesigned devices do not infringe in the exact same manner that has already been adjudicated to infringe. Id. at 9.
A contempt finding is improper if there is “more than a colorable difference” between the accused product and the adjudged infringing product such that “substantial open issues with respect to infringement” exist. Id. at 5.
Relevant Facts:
TiVo owns U.S. Patent 6,233,389 covering essential DVR features. Tivo sued Echostar and obtained a permanent injunction. In the previous appeal, EchoStar did not appeal the injunction. Subsequently, EchoStar redesigned its DVR software, but the district court found EchoStar in contempt of its injunction order. The Federal Circuit found that the district court did not abuse its discretion in imposing sanctions against EchoStar.
Comments:
Judge Rader wrote in his dissenting opinion that “this decision discourages good faith efforts to design around an infringement verdict.” Indeed, EchoStar is a really sympathetic figure here, because it was slapped with contempt despite that (1) it made good faith efforts to design around and (2) the redesigned software does not infringe in the exact same manner that has already been adjudicated to infringe.
The majority opinion, however, appears to suggest that EchoStar could have avoided this predicament if it had appeared the district court’s permanent injunction order previously. Because EchoStar did not do that, under the “abuse of discretion” review standard, the Federal Circuit had to affirm the district court’s contempt finding.
In light of this decision, I believe that the losing party will continue good faith efforts to design around an infringement verdict (sorry, Judge Rader), but there will be more appeals of injunction orders to the Federal Circuit. In addition, the losing party should also seek clarification from the issuing district court in order to avoid a potential contempt finding.
I do agree with Judge Rader in the sense that this decision, in its current form, seems very discouraging and inconsistent with sound public policy. A contempt finding, by its punishing nature to deter future violations, should have a bad faith element. If a party tried to comply with the orders in good faith by designing around, it seems to be unfair to hold it in contempt.
Holding:
Good faith efforts to design around an infringement verdict are not sufficient to avoid a contempt proceeding. Slip op. at 12.
A contempt hearing may be proper even if the redesigned devices do not infringe in the exact same manner that has already been adjudicated to infringe. Id. at 9.
A contempt finding is improper if there is “more than a colorable difference” between the accused product and the adjudged infringing product such that “substantial open issues with respect to infringement” exist. Id. at 5.
Relevant Facts:
TiVo owns U.S. Patent 6,233,389 covering essential DVR features. Tivo sued Echostar and obtained a permanent injunction. In the previous appeal, EchoStar did not appeal the injunction. Subsequently, EchoStar redesigned its DVR software, but the district court found EchoStar in contempt of its injunction order. The Federal Circuit found that the district court did not abuse its discretion in imposing sanctions against EchoStar.
Comments:
Judge Rader wrote in his dissenting opinion that “this decision discourages good faith efforts to design around an infringement verdict.” Indeed, EchoStar is a really sympathetic figure here, because it was slapped with contempt despite that (1) it made good faith efforts to design around and (2) the redesigned software does not infringe in the exact same manner that has already been adjudicated to infringe.
The majority opinion, however, appears to suggest that EchoStar could have avoided this predicament if it had appeared the district court’s permanent injunction order previously. Because EchoStar did not do that, under the “abuse of discretion” review standard, the Federal Circuit had to affirm the district court’s contempt finding.
In light of this decision, I believe that the losing party will continue good faith efforts to design around an infringement verdict (sorry, Judge Rader), but there will be more appeals of injunction orders to the Federal Circuit. In addition, the losing party should also seek clarification from the issuing district court in order to avoid a potential contempt finding.
I do agree with Judge Rader in the sense that this decision, in its current form, seems very discouraging and inconsistent with sound public policy. A contempt finding, by its punishing nature to deter future violations, should have a bad faith element. If a party tried to comply with the orders in good faith by designing around, it seems to be unfair to hold it in contempt.
Thursday, March 4, 2010
New Federal Circuit Opinions - March 4, 2010
Tivo, Inc. v. EchoStar Corp., No. 2009-1374 (Fed. Cir. Mar. 4, 2010).
Fairchild Semiconductor Files Patent Lawsuit Against Power Integrations in China
According to Fairchild Semiconductor's news release, available here,
Comments:
It is interesting to see that Fairchild is moving its IP battle with Power Integrations from the United States to China. Because Power Integrations has been winning cases against Fairchild and its subsidiaries, this move does not really come as a surprise. Nowadays, most IC chips are made in China anyway, so if Fairchild prevails in China, Power Integrations would lose business globally including the U.S. market.
We will follow this landmark China case. If the outcome is favorable to Fairchild, it could open a flood gate for other companies to try their luck in China. Because the Chinese judicial system is less transparent and less predictable, however, it remains to be seen how this case will turn out.
Fairchild is seeking a permanent injunction preventing the sale, manufacture or use in China, or the importation into China, of Power Integrations products alleged to infringe four Chinese patents, including products in the TinySwitch II, TinySwitch III, LinkSwitch II, LinkSwitch XT and TOPSwitch GX product families. The company is also seeking monetary damages. The lawsuit was filed in Suzhou Intermediate Court.
Comments:
It is interesting to see that Fairchild is moving its IP battle with Power Integrations from the United States to China. Because Power Integrations has been winning cases against Fairchild and its subsidiaries, this move does not really come as a surprise. Nowadays, most IC chips are made in China anyway, so if Fairchild prevails in China, Power Integrations would lose business globally including the U.S. market.
We will follow this landmark China case. If the outcome is favorable to Fairchild, it could open a flood gate for other companies to try their luck in China. Because the Chinese judicial system is less transparent and less predictable, however, it remains to be seen how this case will turn out.
Tuesday, March 2, 2010
New Federal Circuit Opinions - March 2, 2010
Davis v. Brouse McDowell, L.P.A., No. 2009-1395 (Fed. Cir. Mar. 2, 2010).
New Federal Circuit Opinions - March 1, 2010
Starting on March 1, 2010, we will list all new precedential opinions issued by Federal Circuit. For more notable opinions, we will provide our case comments.
Media Techs. Licensing LLC v. Upper Deck Co., No. 2009-1022 (Fed. Cir. Mar. 1, 2010).
Comaper Corp. v. Antec, Inc., Nos. 2009-1248, -1249 (Fed. Cir. Mar. 1, 2010).
Media Techs. Licensing LLC v. Upper Deck Co., No. 2009-1022 (Fed. Cir. Mar. 1, 2010).
Comaper Corp. v. Antec, Inc., Nos. 2009-1248, -1249 (Fed. Cir. Mar. 1, 2010).
Thursday, February 25, 2010
Willful Infringement: Prompt Redesign Efforts and Complete Removal of Infringing products Suggest No Objective Recklessness
Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 2008-1392, -1393, -1422 (Fed. Cir. Feb. 25, 2010)
Holding:
Prompt redesign efforts and complete removal of infringing products in a span of a few months after the lawsuit commenced suggest that the infringer was not objectively reckless. Slip op. at 24-25.
Relevant Facts:
Trading Technologies (TT) owns U.S. Patent No. 6,772,132 and U.S. Patent No. 6,766,304, directed to a static display of prices in commodity trading. After TT sued eSpeed for infringement, eSpeed redesigned its products. The trial court found that the asserted patents were valid, enforceable, and infringed by eSpeed’s old product infringed, but not willfully, and not infringed by eSpeed’s redesigned products.
.
Comments:
This case involves so many issues including standard claim construction disputes. The notable issues include the willful infringement analysis.
The Federal Circuit pointed out that in In re Seagate Technology, LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (en banc), it held that “proof of willful infringement permitting enhanced damages requires at least a showing of objective recklessness” and that the patentee must also show that “the infringer knew or should have known of this objectively high likelihood.” Slip op. at 24. Here, the Federal Circuit held that prompt redesign efforts and complete removal of infringing products suggest no objective recklessness and thus no willful infringement.
eSpeed’s prompt redesign of the products after being sued is an excellent practice that makes perfect business sense. An accused infringer, no matter how confident it is, should always hedge its bet and anticipate the potential adverse ruling. One way to do so is, if possible, to redesign the accused products. In this case, even though eSpeed lost the lawsuit, but it is actually the winner business-wise, because the outcome of this lawsuit does not negatively affect its current products and business.
Holding:
Prompt redesign efforts and complete removal of infringing products in a span of a few months after the lawsuit commenced suggest that the infringer was not objectively reckless. Slip op. at 24-25.
Relevant Facts:
Trading Technologies (TT) owns U.S. Patent No. 6,772,132 and U.S. Patent No. 6,766,304, directed to a static display of prices in commodity trading. After TT sued eSpeed for infringement, eSpeed redesigned its products. The trial court found that the asserted patents were valid, enforceable, and infringed by eSpeed’s old product infringed, but not willfully, and not infringed by eSpeed’s redesigned products.
.
Comments:
This case involves so many issues including standard claim construction disputes. The notable issues include the willful infringement analysis.
The Federal Circuit pointed out that in In re Seagate Technology, LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (en banc), it held that “proof of willful infringement permitting enhanced damages requires at least a showing of objective recklessness” and that the patentee must also show that “the infringer knew or should have known of this objectively high likelihood.” Slip op. at 24. Here, the Federal Circuit held that prompt redesign efforts and complete removal of infringing products suggest no objective recklessness and thus no willful infringement.
eSpeed’s prompt redesign of the products after being sued is an excellent practice that makes perfect business sense. An accused infringer, no matter how confident it is, should always hedge its bet and anticipate the potential adverse ruling. One way to do so is, if possible, to redesign the accused products. In this case, even though eSpeed lost the lawsuit, but it is actually the winner business-wise, because the outcome of this lawsuit does not negatively affect its current products and business.
Infringing a Design Patent?: The Proper Comparison Requires a Side-By-Side View of the Drawings of the Patent Design and the Accused Products
Crocs, Inc. v. Int'l Trade Comm'n, No. 2008-1596 (Fed. Cir. Feb. 24, 2010)
Holding:
For the infringement analysis of a design patent, the “ordinary observer” test must be applied to the design as a whole, and the proper comparison requires a side-by-side view of the drawings of the patent design and the accused products. Slip op. at 12.
Relevant Facts:
Crocs is the assignee of U.S. Patent No. 6,993,858 and D517,789. Slip op. at 2. Crocs sued a number of foam footwear companies before the United States International Trade Commission. Id. at 5-6. The Commission found that the “’858 patent” was obvious and the ’789 patent was not infringed. The Commission also determined that Crocs had not satisfied the technical prong of the industry requirement under Section 337 for the ’789 patent. The Federal Circuit reversed the Commission’s decisions. Id. at 2.
Comments:
In this case, the Federal Court clarified the application of the “ordinary observer” test in the infringement analysis of the design patent, requiring a side-by-side comparison of the drawings of the patent design and the accused products.
While it is relatively easy to compare the designs in this case, one may imagine the situations where the side-by-side comparison may not be self-evident. In other words, while the side-by-side comparison is a clean concept in theory, it may not be practical in certain situations.
Therefore, the Federal Circuit may have to issue further clarification in the future regarding the “ordinary observer” test from Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 679 (Fed. Cir. 2008) (en banc).
Holding:
For the infringement analysis of a design patent, the “ordinary observer” test must be applied to the design as a whole, and the proper comparison requires a side-by-side view of the drawings of the patent design and the accused products. Slip op. at 12.
Relevant Facts:
Crocs is the assignee of U.S. Patent No. 6,993,858 and D517,789. Slip op. at 2. Crocs sued a number of foam footwear companies before the United States International Trade Commission. Id. at 5-6. The Commission found that the “’858 patent” was obvious and the ’789 patent was not infringed. The Commission also determined that Crocs had not satisfied the technical prong of the industry requirement under Section 337 for the ’789 patent. The Federal Circuit reversed the Commission’s decisions. Id. at 2.
Comments:
In this case, the Federal Court clarified the application of the “ordinary observer” test in the infringement analysis of the design patent, requiring a side-by-side comparison of the drawings of the patent design and the accused products.
While it is relatively easy to compare the designs in this case, one may imagine the situations where the side-by-side comparison may not be self-evident. In other words, while the side-by-side comparison is a clean concept in theory, it may not be practical in certain situations.
Therefore, the Federal Circuit may have to issue further clarification in the future regarding the “ordinary observer” test from Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 679 (Fed. Cir. 2008) (en banc).
Monday, February 15, 2010
Taiwan's Industrial Technology Research Institute Dismissed Lawsuits Against Samsung in the U.S.
For earlier post on this topic, please click here.
Timeline:
(1) On June 19, 2009, Taiwan's Industrial Technology Research Institute (“ITRI”) filed two patent infringement lawsuits against Samsung Electronics America Inc. and two other Samsung entities in the U.S. District Court for the Western District of Arkansas (Case Nos. 4:09-cv-04063, 4:09-cv-04064). ITRI accused that Samsung's cell phone i607 and D520 models infringed U.S. Patent Number 6,459,413.
(2) On October 19, 2009, ITRI filed another lawsuit in the same district (Case No. 4:09-cv-04110), asserting 13 patents against Samsung with respect to Samsung's various flat panel display products including laptops, netbooks, cellphones, video projectors, and cameras.
(3) On January 15, 2010, ITRI filed a stipulation to dismiss each of the above cases without prejudice.
While the first two cases were pending, Samsung moved to transfer venue to the Eastern District of Texas – the home of a Samsung entity. The parties subsequently moved for the court to stay the litigation for 60 days pending settlement discussions.
The stipulation to dismiss each of the above cases without prejudice filed on January 15, 2010 indicates that the parties might have agreed to continue their settlement discussions out of court.
It remains to be seen, however, whether ITRI will re-file the lawsuits. If ITRI reaches a favorable settlement with Samsung, we could see a new wave of patent litigations filed by patent holding companies in the greater China region.
Timeline:
(1) On June 19, 2009, Taiwan's Industrial Technology Research Institute (“ITRI”) filed two patent infringement lawsuits against Samsung Electronics America Inc. and two other Samsung entities in the U.S. District Court for the Western District of Arkansas (Case Nos. 4:09-cv-04063, 4:09-cv-04064). ITRI accused that Samsung's cell phone i607 and D520 models infringed U.S. Patent Number 6,459,413.
(2) On October 19, 2009, ITRI filed another lawsuit in the same district (Case No. 4:09-cv-04110), asserting 13 patents against Samsung with respect to Samsung's various flat panel display products including laptops, netbooks, cellphones, video projectors, and cameras.
(3) On January 15, 2010, ITRI filed a stipulation to dismiss each of the above cases without prejudice.
While the first two cases were pending, Samsung moved to transfer venue to the Eastern District of Texas – the home of a Samsung entity. The parties subsequently moved for the court to stay the litigation for 60 days pending settlement discussions.
The stipulation to dismiss each of the above cases without prejudice filed on January 15, 2010 indicates that the parties might have agreed to continue their settlement discussions out of court.
It remains to be seen, however, whether ITRI will re-file the lawsuits. If ITRI reaches a favorable settlement with Samsung, we could see a new wave of patent litigations filed by patent holding companies in the greater China region.
Tuesday, February 9, 2010
Mei & Mark LLP Files a Reply Brief in the Federal Circuit on Behalf of an Appellant in General Protecht Group v. ITC
Washington, DC - February 9, 2010 - The Intellectual Property & Litigation law firm Mei & Mark LLP today filed a reply brief in the United States Court of Appeals for the Federal Circuit on behalf of Appellant Wenzhou Trimone Science and Technology Electric Co., Ltd., in General Protecht Group v. ITC, Case Nos. 2009-1378, -1387, -1434. The case is on appeal from the United States International Trade Commission in Investigation No. 337-TA-615. The client retained Mei & Mark LLP for post-ITC proceedings, including appeals, after it lost at the Commission. A copy of the brief is available for download.
Mei & Mark LLP's appellate team consists of registered patent attorneys who possess both exceptional academic credentials in law, science, and technology, and a rare combination of patent law experience covering patent prosecution, licensing, and litigation. The brief is authored by Mr. Lei Mei, a magna cum laude graduate of Duke Law School, where he was elected to the Order of the Coif, and Mr. Reece Nienstadt, a Stanford graduate who holds a J.D. degree, cum laude, from Georgetown University Law Center.
Mei & Mark LLP's appellate team consists of registered patent attorneys who possess both exceptional academic credentials in law, science, and technology, and a rare combination of patent law experience covering patent prosecution, licensing, and litigation. The brief is authored by Mr. Lei Mei, a magna cum laude graduate of Duke Law School, where he was elected to the Order of the Coif, and Mr. Reece Nienstadt, a Stanford graduate who holds a J.D. degree, cum laude, from Georgetown University Law Center.
Saturday, February 6, 2010
Another Post-Seagate Case: A Potential infringer Has No Affirmative Duty of Due Care Not to Infringe a Known Patent
SEB S.A. v. Montgomery Ward & Co., Inc., No. 2009-1099, -1108, -1119 (Fed. Cir. Feb. 5, 2010)
Holding:
A potential infringer has no affirmative duty of due care not to infringe a known patent; rather, proof of willful infringement requires showing by clear and convincing evidence that “the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.” Slip op. at 31.
Relevant Facts:
SEB sued Pentalpha for infringement of a patent directed to a deep fryer with an inexpensive plastic outer shell, or skirt. Slip op. at 2. A jury found that Pentalpha had willfully infringed, and induced infringement, and awarded SEB $4.65 million in damages. Pentalpha filed post-trial motions on a number of grounds. Id. The district court granted them in part, reducing the amount of damages by $2 million. The district court awarded SEB enhanced damages and attorneys’ fees, but later vacated that award in light of this court’s decision in In re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007) (en banc). Id. On appeal, Pentalpha raises a host of issues that relate to the jury verdict and the district court’s post-trial rulings. Id. SEB cross-appeals the district court’s enhanced damages ruling. The Federal Circuit affirmed the district court’s rulings. Id.
Holding:
A potential infringer has no affirmative duty of due care not to infringe a known patent; rather, proof of willful infringement requires showing by clear and convincing evidence that “the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.” Slip op. at 31.
Relevant Facts:
SEB sued Pentalpha for infringement of a patent directed to a deep fryer with an inexpensive plastic outer shell, or skirt. Slip op. at 2. A jury found that Pentalpha had willfully infringed, and induced infringement, and awarded SEB $4.65 million in damages. Pentalpha filed post-trial motions on a number of grounds. Id. The district court granted them in part, reducing the amount of damages by $2 million. The district court awarded SEB enhanced damages and attorneys’ fees, but later vacated that award in light of this court’s decision in In re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007) (en banc). Id. On appeal, Pentalpha raises a host of issues that relate to the jury verdict and the district court’s post-trial rulings. Id. SEB cross-appeals the district court’s enhanced damages ruling. The Federal Circuit affirmed the district court’s rulings. Id.
The Reasonable Royalty Calculation Must Be Based on Related Licenses Linked to the Claimed Technology
ResQNet.com, Inc. v. Lansa, Inc., No. 2008-1365, -1366, 2009-1030 (Fed. Cir. Feb. 5, 2010)
Holding:
The reasonable royalty calculation must be based on related licenses linked to the claimed technology. Slip op. at 20.
Relevant Facts:
ResQNet asserted patents directed to screen recognition and terminal emulation processes that download a screen of information from a remote mainframe computer onto a local PC against Lansa. Slip op. at 3. The district court ruled one patent valid and infringed, another patent not infringed, and awarded damages and imposed a license based on a hypothetical royalty of 12.5%. Id. at 2. The district court also assessed sanctions under Rule 11 against ResQNet and its counsel. Id. The Federal Circuit affirmed the district court’s rulings on infringement and validity, reversed the imposition of sanctions, and vacated and remanded the damages award and remand for redetermination of damages. Id.
Comments:
In this case, Lansa challenged the methodology used by ResQNet’s damages expert in determining this reasonable royalty. The Federal Circuit vacated the damages award and remands “[b]ecause the district court’s award relied on speculative and unreliable evidence divorced from proof of economic harm linked to the claimed invention and is inconsistent with sound damages jurisprudence.” Slip op. at 12.
Specifically, the Federal Circuit re-emphasized that other licenses that are not related to the claimed invention cannot be used to derive the hypothetical royalty rate. The Federal Circuit explained that it just recently rejected a patentee’s reliance on licenses because “some of the license agreements [were] radically different from the hypothetical agreement under consideration” and the court was “unable to ascertain from the evidence presented the subject matter of the agreements.” Lucent Techs., Inc. v. Gateway, 580 F.3d 1301, 1327-28 (Fed. Cir. 2009).
Notably, here, Lansa did not offer an expert testimony to counter ResQNet’s damages expert’s testimony. The Federal Circuit noted that the burden was on ResQNet, not Lansa:
Slip op. at 19 (citation omitted).
Holding:
The reasonable royalty calculation must be based on related licenses linked to the claimed technology. Slip op. at 20.
Relevant Facts:
ResQNet asserted patents directed to screen recognition and terminal emulation processes that download a screen of information from a remote mainframe computer onto a local PC against Lansa. Slip op. at 3. The district court ruled one patent valid and infringed, another patent not infringed, and awarded damages and imposed a license based on a hypothetical royalty of 12.5%. Id. at 2. The district court also assessed sanctions under Rule 11 against ResQNet and its counsel. Id. The Federal Circuit affirmed the district court’s rulings on infringement and validity, reversed the imposition of sanctions, and vacated and remanded the damages award and remand for redetermination of damages. Id.
Comments:
In this case, Lansa challenged the methodology used by ResQNet’s damages expert in determining this reasonable royalty. The Federal Circuit vacated the damages award and remands “[b]ecause the district court’s award relied on speculative and unreliable evidence divorced from proof of economic harm linked to the claimed invention and is inconsistent with sound damages jurisprudence.” Slip op. at 12.
Specifically, the Federal Circuit re-emphasized that other licenses that are not related to the claimed invention cannot be used to derive the hypothetical royalty rate. The Federal Circuit explained that it just recently rejected a patentee’s reliance on licenses because “some of the license agreements [were] radically different from the hypothetical agreement under consideration” and the court was “unable to ascertain from the evidence presented the subject matter of the agreements.” Lucent Techs., Inc. v. Gateway, 580 F.3d 1301, 1327-28 (Fed. Cir. 2009).
Notably, here, Lansa did not offer an expert testimony to counter ResQNet’s damages expert’s testimony. The Federal Circuit noted that the burden was on ResQNet, not Lansa:
But it was ResQNet’s burden, not Lansa’s, to persuade the court with legally sufficient evidence regarding an appropriate reasonable royalty. As a matter of simple procedure, Lansa had no obligation to rebut until ResQNet met its burden with reliable and sufficient evidence. This court should not sustain a royalty award based on inapposite licenses simply because Lansa did not proffer an expert to rebut Dr. David.
Slip op. at 19 (citation omitted).
Tuesday, January 26, 2010
Retroactive Terminal Disclaimer Cannot Cure Obviousness-Type Double Patenting
Boehringer Ingelheim Int’l GMBH v. Barr Labs., Inc., No. 2009-1032 (Fed. Cir. Jan. 25, 2010)
Holding:
A terminal disclaimer filed after the expiration of the earlier patent (“retroactive terminal disclaimer") over which claims have been found obvious cannot cure obviousness-type double patenting. Slip op. at 12.
The § 121 safe-harbor provision may apply to a divisional of a divisional of the application in which a restriction requirement was entered. Id. at 20.
The § 121 “as a result of” requirement applies to the challenged patent as well as the reference patent. Id. at 21.
Relevant Facts:
The reference patent application was a divisional of the challenged patent application, which in turn was a divisional of the parent application that was subject to a restriction requirement. Later, the patentee filed a retroactive terminal disclaimer to overcome obviousness-type double patenting. The Federal Circuit agreed with the district court that the retroactive terminal disclaimer cannot cure obviousness-type double patenting. The patentee also argued that the safe-harbor provision of 35 U.S.C. § 121 prevents the reference patent to be used as a reference. The Federal Circuit reversed the district court’s ruling that the safe-harbor provision of 35 U.S.C. § 121 does not apply in this case, and remanded the case back to the district court.
Comments:
Note that the Federal Circuit explained when a retroactive disclaimer cannot cure obviousness-type double patenting:
Slip op. at 12 (note: due to formatting issues, original underlines have been replaced with italics.).
Also, section 121 provides in relevant part:
35 U.S.C. § 121 (emphasis added).
Holding:
A terminal disclaimer filed after the expiration of the earlier patent (“retroactive terminal disclaimer") over which claims have been found obvious cannot cure obviousness-type double patenting. Slip op. at 12.
The § 121 safe-harbor provision may apply to a divisional of a divisional of the application in which a restriction requirement was entered. Id. at 20.
The § 121 “as a result of” requirement applies to the challenged patent as well as the reference patent. Id. at 21.
Relevant Facts:
The reference patent application was a divisional of the challenged patent application, which in turn was a divisional of the parent application that was subject to a restriction requirement. Later, the patentee filed a retroactive terminal disclaimer to overcome obviousness-type double patenting. The Federal Circuit agreed with the district court that the retroactive terminal disclaimer cannot cure obviousness-type double patenting. The patentee also argued that the safe-harbor provision of 35 U.S.C. § 121 prevents the reference patent to be used as a reference. The Federal Circuit reversed the district court’s ruling that the safe-harbor provision of 35 U.S.C. § 121 does not apply in this case, and remanded the case back to the district court.
Comments:
Note that the Federal Circuit explained when a retroactive disclaimer cannot cure obviousness-type double patenting:
By failing to terminally disclaim a later patent prior to the expiration of an earlier related patent, a patentee enjoys an unjustified advantage—a purported time extension of the right to exclude from the date of the expiration of the earlier patent. The patentee cannot undo this unjustified time wise extension by retroactively disclaiming the term of the later patent because it has already enjoyed rights that it seeks to disclaim. Permitting such a retroactive terminal disclaimer would be inconsistent with “[t]he fundamental reason” for obviousness-type double patenting, namely, “to prevent unjustified timewise extension of the right to exclude.”
Slip op. at 12 (note: due to formatting issues, original underlines have been replaced with italics.).
Also, section 121 provides in relevant part:
If two or more independent and distinct inventions are claimed in one application, the Director may require the application to be restricted to one of the inventions. If the other invention is made the subject of a divisional application which complies with the requirements of section 120 of this title it shall be entitled to the benefit of the filing date of the original application. A patent issuing on an application with respect to which a requirement for restriction under this section has been made, or on an application filed as a result of such a requirement, shall not be used as a reference either in the Patent and Trademark Office or in the courts against a divisional application or against the original application or any patent issued on either of them, if the divisional application is filed before the issuance of the patent on the other application . . . .
35 U.S.C. § 121 (emphasis added).
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