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)


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.

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)


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.


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.


(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.

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)


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, Inc. v. Lansa, Inc., No. 2008-1365, -1366, 2009-1030 (Fed. Cir. Feb. 5, 2010)


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.


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).