Posts in IP News

It was also determined that the underlying patent litigation was brought for no other reason than to extract nuisance payments despite the fact that there was no infringement. Specifically, the district court determined that Eon-Net filed the lawsuit against Flagstar had “indicia of extortion” because it was part of Eon-Net’s history of filing nearly identical patent infringement complaints against a plethora of diverse defendants, where Eon-Net followed each filing with a demand for a quick settlement at a price far lower than the cost to defend the litigation.

Cloture is the only procedure by which the Senate can vote to place a time limit on consideration of a bill or other matter, and thereby overcome a filibuster. Under the cloture rule (Rule XXII), the Senate may limit consideration of a pending matter to 30 additional hours, but only by vote of three-fifths of the full Senate, normally 60 votes. Without 60 votes cloture fails and debate continues. Unfortunately for those who would like to see patent reform derailed, the fact that there was unanimous consent in the Senate for a cloture vote almost certainly suggests that there will be at least 60 votes to end debate on H.R. 1249, which will bring it to a vote, likely sometime later in the week of September 6.

In trying to determine whether patent litigation is out of control it is worth looking at the numbers of patent cases terminated and how they are terminated. What becomes clear is that there is no statistically relevant increase in the number of trails over the last 30 years even with a significant increase in the number of cases commenced. The following charts show that while actual trials remains largely constant over the last 30 years there has been growth in the number of patent litigations terminated without any court action, as well as increase in cases terminated with court action and before pre-trial and the number of cases terminated between pre-trial and trial.

For example, does a hair dryer with integrated radio, beer bottle opener, shaving cream dispenser that floats sound marketable? Perhaps as a gag gift maybe, but the addition of random features for the sake of obtaining a patent is not usually wise. I’ve seen terribly broad disclosures filed for an inventor with one extraordinarily specific embodiment. Right away I can tell what is happening. The patent attorney (or patent agent) is drafting the disclosure so that at least one claim, no matter how narrow, can be obtained. Unfortunately, it does not typically make sense to layer on specifics unless those specifics contribute to marketability, and in most cases layer after layer of detailed specifics only makes the claim narrow and less valuable. So if you are going to try and get around prior art to obtain a patent make sure the specifics added will provide an advantage.

After much anticipation, the United States Court of Appeals for the Federal Circuit earlier today issued a decision in Association for Molecular Pathology v. Myriad Genetics. The decision on first glance will seem to be a split decision, particularly by Federal Circuit standards. The majority opinion was written by Judge Lourie, Judge Moore wrote a concurring opinion and Judge Bryson concurred in part and dissented in part. Having said that, the outcome largely seems to be what was predicted by the patent community. On the major substantive issue — are isolated DNA molecules patent eligible subject matter — the Federal Circuit reversed the decision of the district court and ruled that isolated DNA molecules do constituted patent eligible subject matter. The Federal Circuit also ruled that methods relating to the screening for potential cancer therapeutics are, likewise, patent eligible subject matter. All three Judges also found the “comparing” and “analyzing” claims to be ineligible for patent protection because they were not transformative, and thus were merely abstract mental steps.

SellerBid, Inc. brought the patent infringement lawsuit (see complaint) demanding a jury trial, against Groupon and others on July 20, 2011. Somewhat surprisingly, the lawsuit was filed in the United States District Court for the Eastern District of Virginia. The Eastern District of Virginia is famously known by attorneys everywhere as “the Rocket Docket,” thanks to how fast cases go from filing to trial. Expect the defendants to seek to remove the case and the Eastern District of Virginia to be sympathetic to the defendants if there is any reason to suspect that SellerBid was merely attempting to manufacture jurisdiction and venue.

To me a patent troll is not just someone who has acquired a patent for purpose of licensing or bringing a lawsuit, but rather one who is engaging in some kind of unfair business practice. The telltale sign of a patent troll is one who is abusing the patent right in order to shake down a defendant for payment. This type of behavior is typically exhibited by non-practicing entities who are not innovators, but rather acquire patent rights. However, the act of bringing specious claims to provoke a settlement would, in my opinion, be just as bad if brought by an innovator.

The mutually assured destruction approach to patenting can explain in part why large companies continue to patent at the rate they do, but the justification completely misses the point that these large tech giants were not always large. They were, at one time, rather small companies that pursued an aggressive agenda of innovation. A big part of that innovation strategy included obtaining protection for said innovation, largely in the form of acquiring patents. That undeniable truth makes it hard not to question whether the tech giants that lament the failings of the patent system and want to limit or abolish it are simply engaging in good old-fashioned protectionism.

The real sin is that reexamination could be a much better process. Those in Congress talk about alleviating the burden on the district courts by having a reexamination proceeding available, but they don’t seem to appreciate why it is that reexamination is under utilized. On top of that, patent reform circulating in Congress does absolutely nothing to revamp reexamination in a way that would streamline the process and make it more appealing. What patent reform does do, however, is add yet another procedure to bog down the Patent Office while not allowing the Patent Office to set fees and keep those fees they collect to do the work that is promised when they accept those fees. So if patent reform passes you can anticipate that the reexamination pendency numbers will get even more ugly, making the option even less appealing.

In Duramed, the invention claimed in U.S. Pat. No. 5,908,638 (the “’638 patent”) involved a conjugated estrogen pharmaceutical compositions for use in hormone replacement therapies. The critical aspect of the claimed invention was the moisture barrier coating (MBC) which surrounded the composition. Claim 7 (which depended from independent Claim 1) specified that this MBC “comprises ethylcellulose.” During patent prosecution, the examiner rejected both Claims 1 and 7 for obviousness under 35 U.S.C. § 103. As a result of an interview with the examiner, Claim 1 was amended to include the recitation in Claim 7, and in due course, the ‘638 patent issued. Sounds to me like a classical instance of prosecution history estoppel coming into play and barring any application of the doctrine of equivalents.

While the applicability of Therasense is easy to see as it applies to prosecution of a patent application, the strategic opportunities presented in reexamination are not all together apparent on the face of the ruling, inter partes reexamination offers an excellent opportunity for provoking comments from the patentee, which might be useful in an ongoing or anticipated infringement litigation, particularly with respect to such issues as claim construction, willful infringement or materiality.

On Thursday, July 21, 2011, attorneys for Lodsys LLC, who is rapidly becoming a reviled patent troll, filed an amended complaint in the United States Federal District Court for the Eastern District of Texas. As a result of this amended complaint some big names in the gaming world have been brought into the ongoing patent litigation battles being waged by Lodsys, who has already suing a number of Apple App developers and others such as Best Buy and the New York Times, see here and here. More specifically, as a result of the filing of this latest complaint Lodsys has brought patent infringement charges against Atari Interactive, Inc. and Electronic Arts, Inc. (NASDAQ:ERTS), among others. But in the mind of the general public the highest profile defendant to date is no doubt Rovio Mobile Ltd., the maker of the extraordinarily popular game Angry Birds, which is available for iPhone, iPad and Android, among other platforms.

In view of Therasense, the Patent Office is proposing to revise the materiality standard for the duty to disclose information to the Office in patent applications and reexamination proceedings. It is the belief of the Patent Office that the Therasense standard will reduce the frequency with which applicants and practitioners are being charged with inequitable conduct, thereby reducing the incentive for applicants to submit marginally relevant information to the Office. Thus, the Therasense standard should curtail the practice of filing Information Disclosure Statements that refer to boxes full of prior art that is of marginal significance, allowing patent examiners to focus on that prior art that is most relevant. The USPTO adopting the Therasense standard could, as a result, lead to improved patent quality and even a streamlining of prosecution in at least some cases.

Louis Foreman, the producer of the Emmy Award winning PBS television show Everyday Edisons and the publisher of Inventors Digest, announced in April 2011 that he was launching of a $25 million Innovation Fund. Phase 1 of the search for inventions for the Fund to invest in was completed in mid-June 2011. Phase 2 of the search for inventions and ideas has just begun and will run through Monday, September 12th, 2011. He tells me that the Fund is off to a great start and has received some very innovative technologies as part of the first wave.