Posts in Courts

Many district courts have interpreted Alice as authorizing invalidation of issued patents as “abstract” based solely on the pleadings. They have done so even where the invalidation rests on resolution of a disputed issue of fact or of claim construction or scope. In short, since Alice, the Federal Circuit has done nothing to clear up the district courts’ confusion, but instead has affirmed pleading invalidations more than 90 percent of the time. Nothing in Alice, or Mayo for that matter, authorized these “pleadings invalidations.” Whether you agree with the decisions or not, both Alice and Mayo, were decided on summary judgment.

The Court of Appeals for the Federal Circuit entered a non-precedential decision in Art+Com Innovation Pool GmbH v. Google LLC, which affirmed a lower court’s invalidation of a patent covering methods of displaying geographic information to a user. The patent, issued in 2013 to Berlin-based Art+Com Innovationpool and claiming a priority date of December 1995, had been asserted in a patent case decided in the District of Delaware in which the German-based patent owner was seeking more than $100 million from Google for infringement committed by its Google Earth service.

On September 21st, Saint Paul, MN-based technology and materials company 3M (NYSE:MMM) filed a lawsuit alleging patent and trademark infringement committed by Shanghai, China-based Thunder Finish. The lawsuit targets Thunder Finish’s marketing of paint preparation products developed by 3M which are meant to simplify the use and cleanup of liquid paint spray guns. The suit is filed in the Western District of Wisconsin.

Although patent litigation levels through the first nine months of 2017 have largely remained consistent with patterns from recent years, it does appear that the number of patent suits filed in U.S. district courts has been on a slow decline in recent years. There were a total of 995 patent lawsuits filed in district court during 2017’s third quarter, an 8.4 percent decline when compared to totals from 2016’s third quarter. Year-over-year declines in patent suit filing were also seen in the first and second quarters of 2016 as well. As Lex Machina data scientist Brian Howard notes, 2017 continued a trend in which patent suit filings tend to drop in the first quarter of the year, rise during the second quarter and then fall again during the third quarter. “Historically, that’s a pattern that we’ve seen pretty consistently in the past few years,” Howard said.

In Owens Corning v. Fast Felt Corp, Fast Felt sued Owens Corning for infringement, and Owens Corning filed a petition with the PTO seeking inter partes review of claims 1, 2, 4, 6, and 7. All of the challenged claims contain the term “roofing or building cover material.” Owens Corning argued that the claims are obvious over Lassiter, Hefele, and Eaton. The Board concluded that Owens Corning failed to show obviousness of any of the challenged claims… While the preferred embodiment of a claim might focus on a particular element of the claim, this is not enough to narrow the claim scope of the IPR. The Board must still give the claim its broadest reasonable interpretation in light of the specification. Where the record and a correct claim construction support only one result, reversal is warranted, without need for remand.

In Organik Kimya AS v. Rohm & Haas Co., Organik Kimya AS (“Organik”) appealed the decisions of the Patent Trial and Appeal Board (“Board”) in two related inter partes review (“IPR”) proceedings for which Organik is the Petitioner. The Patent Owner is Rohm & Haas Co. The Board sustained the patentability of the challenged claims, Organik appeals… When confronted with expert experiments and testimony, practitioners must provide sufficient evidence and argument to negate and outweigh the testimony – unsupported critiques of the expert’s methodology and challenges of relevance are insufficient.

On Monday, October 16th, the Internet security company VirnetX (AMEX:VHC) of Zephyr Cove, NV, announced the results of a patent litigation campaign it had pursued against Cupertino, CA-based consumer tech giant Apple Inc. (NASDAQ:AAPL). According to a press release issued by VirnetX, the Eastern District of Texas increased the damages to be paid by Apple from $302.4 million in a prior jury verdict up to nearly $440 million for Apple’s infringement of patents covering secure communications in applications like FaceTime.

The Federal Circuit heard the case of Secured Mail Solutions LLC v. Universal Wilde, Inc., where the Appellant, Secured Mail Solutions LLC (“Secured Mail”) appealed from the grant of a motion to dismiss on grounds that the claims of seven asserted patents are directed to subject matter ineligible for patenting under 35 U.S.C. § 101. The Federal Circuit affirmed the district court’s grant of Universal’s motion to dismiss… Claims determined to be patent-ineligible based on intrinsic evidence from the specification can be dismissed, at the motion to dismiss stage, without need for “extraneous fact finding outside the record.”

My sense is that non-practicing entities had long ago eliminated the Northern District as a potential venue for patent cases. But if and when there is an influx of cases to the Northern District of California, litigators who predominantly practice in Texas will have to make adjustments. While perhaps not as regimented as some other districts, the Northern District expects litigants to know the local rules and strictly comply with them, particularly for things like sealing motions that can be complicated procedurally… Unlike in Texas, technology tutorials in the Northern District are expected to be live. Attorneys need to be prepared for the judge to ask questions. They also need to make sure that the members of the team most familiar with the technology are present and ready to address any issues that may come up.

Licensing a product instead of selling it may also be a tool for avoiding international patent exhaustion. It is common to distribute software via license, and this might avoid international exhaustion, although it will not work for all products. For example, licensing a drug makes little sense. However, re-importation of a drug would be regulated by the FDA, and the conditions and chain of control of drugs might mitigate some of the international exhaustion issues there. As such, many companies are evaluating the extent of the decision on international exhaustion and how it affects their industries. Since companies have thousands of contracts already in place and the parties will have to reevaluate their positions going forward, this is causing mass confusion and restructuring of contracts and relationships.

A major legal battle over patented technologies in the mobile device communication sector between San Diego, CA-based semiconductor developer Qualcomm Inc. and Cupertino, CA-based consumer tech giant Apple Inc. took a new turn as multiple news reports indicated that Qualcomm had filed suit in China seeking a ban on the sale and manufacture of iPhones. Qualcomm’s court filing in China is the latest salvo in a barrage of legal challenges between both company’s over licensing activities between Qualcomm, Apple and the many Asian contract manufacturers who fabricate smartphones for Apple which incorporate technologies allegedly covered by Qualcomm’s patents.

The U.S. patent promise of exclusivity has become nothing more than lip service with no credibility for more than half a century. A patent system maintained by offering lip service must fail over time. The American inventor population is vanishing rapidly as a result of the changed laws and anti-patent movement. If the patent reward fails, both those who are inventors and those who would be inventors will be influenced not to pursue innovating and society will see an era of slow progress. Bad policy advice has misled Congress into belief that inventing without the participation of inventors will be fine. Reality will soon prove it was a fatal mistake that the U.S. should not have made.

Judge William C. Bryson of the United States Federal District Court for the Eastern District of Texas found that Allergan’s RESTASIS® patents were infringed by Teva Pharmaceuticals USA, but that Teva had demonstrated invalidity of those patents by clear and convincing evidence… In a separate Order dealing with the issue of whether the Saint Regis Mohawk Tribe should be joined as co-plaintiff, Judge Bryson acknowledged that “the sovereign immunity issue is not presented in this case,” but nevertheless went to great lengths in dicta to express his opinion on the matter anyway.

Branded apparel companies face many challenges in protecting their IP assets, including the unavailability of copyright protection for fashion designs, the length of time necessary to secure a design patent, the challenge of securing secondary meaning required for a trade dress claim before the market is flooded with knock-offs, and the geographic and practical impediments to pursuing counterfeiters, who are often foreign-based and/or judgment proof.  Perhaps mindful of the limited statutory protections for IP assets and the significant damages being incurred at the hands of infringers, various courts, particularly in the Second and Ninth Circuits, have in recent years taken steps to enhance the alternatives available to apparel companies confronted by the scourge of knockoffs.  Specifically, such court decisions have (1) expanded the scope of potential contributorily liable actors, and (2) broadened the means of freezing and attaching assets of foreign counterfeiters.

On Thursday, October 12th, a pair of letters addressed to the bipartisan leadership of the Senate Judiciary Committee were delivered in an attempt to inform Senators on that committee of various issues in play regarding the recent patent deal between multinational pharmaceutical firm Allergan and the sovereign St. Regis Mohawk Tribe. The two groups sending the letters represent stakeholders in the U.S. patent system coming from very different backgrounds who realize that there are fundamental flaws in the system created by inter partes review (IPR) proceedings which are carried out at the Patent Trial and Appeal Board (PTAB).