Posts Tagged: "litigation"

How the Federal Circuit could rule that Alice did not change the law governing § 101 is a bit of a mystery. Applying the same two-step test seems a convenient way of dodging reality. At a time when there is real momentum gathering for a legislative solution to § 101 why did the Federal Circuit choose to perpetuate a myth that Alice did nothing to change the law? Outcomes are unquestionably different as the result of Alice, and if outcomes are different how exactly is it possible that the law did not change? If the law remained the same why was Alice a clear pivotal moment in software patent history? Saying Alice did not change the law shows just how out of touch and insulated from reality the Federal Circuit has become.

If an action is dismissed with prejudice for lack of standing, the defendant will be considered the prevailing party and attorney’s fees can be awarded under 35 U.S.C. § 285. The Federal Circuit also affirmed that the case was exceptional under § 285 because the court properly examined the totality of the circumstances in making its determination that Raniere litigated the case in an unreasonable manner.

Appellee Kamstrup A/S (“Kamstrup”) filed an IPR, and the Board instituted review of the challenged patent. Apator attempted to swear behind a cited prior art reference and submitted an inventor declaration and three emails with attachments to support the earlier conception date. The Board noted that there were no indicia in the body or header of the emails indicating what files were attached or what the attachments disclosed. The Board also noted that the only evidence that a file was attached to these emails was the inventor declaration. Accordingly, the Board rejected Apator’s attempt to swear behind the reference.

Equitable estoppel does not bar assertion of patent claims later amended by reexamination when those new claims differ in scope from earlier claims in the patent that were not asserted. Thus, a defendant’s reliance on a patentee’s knowing silence and failure to enforce an earlier patent does not shield him from allegations of infringing later-issued claims of different scope.

In an IPR brought by E*Trade in response to an infringement suit by Droplets, the Board found that the Droplets ‘115 patent was invalid due to obviousness. The patent properly claimed priority to the ‘838 patent but also attempted to claim priority to an earlier ‘917 provisional patent and an intervening ‘745 patent through incorporation by reference. The Board concluded that these priority claims were not proper, and the Federal Circuit agreed.

Where a contractual assignment of patent rights is not unequivocal the contract cannot defeat standing at the pleadings stage in a correction of inventorship action. A contract between two legal entities cannot assign the patent rights of a non-party, when the non-party signed the agreement on behalf of one of the entities and not for himself. A contract to develop and deliver software, absent express language conveying an assignment, does not imply a transfer of patent rights and does not create an implication that the developer was hired to invent.

An IPR petition is not time-barred for reasons of privity with a district court defendant in a prior litigation when no evidence shows that the petitioner controlled the litigation and would be bound by its outcome, or was in privity with a litigant for other reasons. It is not enough for the petitioner to indemnify litigants or have an interest in the outcome. Similarly, for a district court defendant to be a real party in interest in an IPR, the petitioner must have filed the petition at the behest or on behalf of the defendant. Finally, it was not an abuse of discretion to deny Patent Owner’s motion for additional discovery, when the requested discovery would not prove privity on the grounds alleged in the motion.

As in civil litigation, the petitioner in an inter partes review is master of its complaint and is “normally entitled to judgment on all of the claims it raises, not just those the decisionmaker might wish to address.” Therefore, the Board must decide the validity of every challenged claim when it agrees to institute inter partes review of any one challenged claim.

Modern discovery can be quite disruptive and expensive. Recognizing that there is a particular danger of abuse in trade secret cases, where defendants are often individuals or vulnerable start-ups, courts long ago began to manage this risk by requiring plaintiffs to identify the relevant secrets with “reasonable particularity.” In 1985, California decided to reinforce that requirement with a statute that prohibits a plaintiff from taking any discovery until it has complied. Some courts outside of California have embraced this approach as sensible case management, explaining that it prevents unbounded rummaging through the defendant’s own secrets. But a few have gone further, posing the issue as not just potential harassment of the defendant but also the risk that the plaintiff

Contingency representation is monetarily feasible for attorneys and law firms if and only if there is a high likelihood of success. Even in the best case scenario attorneys will sometimes make bad judgment calls when taking a contingency case, but when the underlying asset is under attack — as patents have been — it makes it all the more difficult to justify the risk of putting in all that work and ultimately receiving nothing in return.

Luckily for Apple and Microsoft, however, VirnetX did not assert the ‘135 patent against Mangrove Partners, a hedge fund, which filed a petition for IPR against the ‘135 patent on April 14th, 2015; Mangrove reportedly shorted VirnetX stock around this time. On October 7th, 2015, the PTAB panel adjudicating the case decided to institute the IPR as the petitioner Mangrove had demonstrated a reasonable likelihood of proving invalidity of the challenged claims. Then in January 2016, Apple was successful in having its petition for IPR review of the challenged ‘135 claims joined to Mangrove’s IPR. VirnetX had objected to Apple’s motion for joinder based on the Section 315(b) language but the PTAB found that Section 315(b) did not apply to joinder motions which are governed by 35 U.S.C. § 315(c).

The U.S. International Trade Commission (ITC) announced that it had decided to open a Section 337 investigation over allegations of potential patent infringement in the consumer hygiene product sector. The products at issue in the investigation are certain shaving cartridges used together with a shaving handle, including shaving cartridges marketed under the Schick Hydro Connect 5 brand. The investigation was petitioned by Gillette, a subsidiary of American consumer goods giant Procter & Gamble (NYSE:PG), and it named Schick and its parent company Edgewell Personal Care (NYSE:EPC) as respondents in the case.

Congressman Lamar Smith (R-TX), has sponsored a bill to amend Rule 11 — H.R. 720. The changes are made to remove the safe harbor provision and make sanctions mandatory. This bill has passed the House. A companion bill — S. 237 — has been introduced in the Senate with no action yet being taken… The proposed changes to Rule 11, if enacted, will have an impact of keeping unrepresented parties out of courts, and make the U.S. courts even more inefficient. It will have an adverse impact on patent owners in patent cases… Given the nature of patent litigation, experience teaches that it is inevitable that whenever a case is disposed of the winner will almost certainly try to shift litigation fees by any means possible, including by invoking Rule 11 sanctions. The parties with strong financial powers will have better chances to get sanction awards.

The total number of intellectual property claims included in all commercial cases is higher than the figure of 11,643 commercial cases including at least one IP claim. “It turns out to be incredibly hard to build a Venn diagram that reflects the types of IP claims included in these commercial cases,” said Brian Howard, Lex Machina data scientist and the author of the commercial litigation report. “It turns out to be its own mini-Venn diagram within a Venn diagram, some of the cases are patent and trademark and commercial, so there’s overlap within that IP circle.” Of the different types of intellectual property claims which are included in commercial litigation, trademark claims are by far the most common, occurring in a total of 8,277 commercial cases; that’s 15 percent of all commercial cases filed since 2009. Copyright claims were brought in a total of 3,260 commercial cases filed since 2009, a total representing about 6 percent of all commercial cases. Patent claims were brought in 2,219 commercial cases, or only about 4 percent of the total.

Inherent obviousness cannot be based on what the inventor thought, and, in addition, the results in a particular case may not be inherently obvious depending on what was expected by a person of ordinary skill. The court pointed out “’the mere fact that a certain thing may result from a given set of circumstances is not sufficient’ to render the results inherent.” Millennium Pharmaceuticals, 2017 WL 3013204, at *6 (citations omitted by author). The court also held that it is never appropriate to consider “what the inventor intended when the experiment was performed,” even though Millennium “conceded as a matter of law that the ester is a ‘natural result’ of freeze-drying bortezomib with mannitol.” Id. Thus, hindsight reasoning should never be applied and, obviousness is “measured objectively in light of the prior art, as viewed by a person of ordinary skill in the invention.”