Posts Tagged: "patent infringement"

What may be less well known is that Octane was not itself a “patent troll” case. Rather, Octane involved another kind of abusive patent litigation; namely, a large company asserting a patent it pulled “off the shelf” against a small start-up competitor. While patent trolls gain economic advantage through economies of scale, large companies have economic advantages over smaller competitors by virtue of their size and resources, and can similarly abuse the system. They can use the high cost to defend patent litigation as a competitive weapon, either to force the smaller competitor to exit the market, discontinue a product line, or pay an unwarranted royalty (thereby hindering the competitor in the marketplace). On remand, the District Court in the Octane case recognized just this sort of economic coercion, and found the case exceptional warranting a fee award. And last week, the District Court awarded almost $2 million in fees and costs to Octane, the prevailing accused infringer.

Since the preferred embodiment did not have patentable characteristics that are distinct from other disclosed embodiments, the Court held that “the patentee [was] entitled to claim scope commensurate with the invention that [was] described in the specification.” The Court also held that the doctrine of claim differentiation was applicable here, since the “two severable score lines” limitation only appeared in a dependent claim but not in any independent claims. In other words, the presence of the “two severable score lines” limitation in a dependent claim gave rise to a presumption that such a limitation was not present in the independent claim.

The United States District Court for the Southern District of Indiana ruled in favor of Eli Lilly (NASDAQ: LLY), issuing a final judgment in the Hatch-Waxman infringement litigation relating to U.S. Patent No. 7,772,209. This matter arose as the result of the defendants’ filing of Abbreviated New Drug Applications (ANDAs) with the Food and Drug Administration (FDA). The ‘209 patent, covering a method of use, protects the co-administration of pemetrexed disodium with two nutrients – folic acid and vitamin B12, which protects against the side effects of the drug Alimta®. The district court found direct infringement by administering physicians under § 271(a), and thus inducement of infringement by Defendants under § 271(b).

JVC is a member of two licensing pools for optical disc technology, one for DVD and one for Blu-ray. The asserted patents are included in both pools. The district court adopted JVC’s position that the asserted patents are essential to the licensed DVD and Blu-ray optical discs. Given the patent pool and licensing program, which covers any and all optical disc structures and uses that are essential under the patents, only the use of unlicensed optical discs would be an infringement – regardless of any third-party software used to manipulate the discs. JVC did not argue, and no evidence of record established, that unlicensed discs should be attributed to Nero, or the patent pool license should not encompass discs and end-users that implemented the Nero software.

The en banc Court reversed the previous panel, and expanded the circumstances under which an alleged infringer may be liable under §271(a). In addition to circumstances identified by the panel, liability may arise if “an alleged infringer conditions participation in an activity or the receipt of a benefit upon performance of a step or steps of the patented method, and establishes the manner or timing of that performance.” When that standard is satisfied, the actions of a third party may be attributed to the alleged infringer, who thereby directly infringes under §271(a), even though there was no “mastermind” acting though a formal agent.

In this issue of the Federal Circuit Review: (1) Damages for Lost Profits May Not Be Based On Extraterritorial Services Performed by an Infringer’s Customers Under § 271(f); (2) Federal Circuit Invalidates Claims Under the On-Sale Bar for Commercial Exploitation of the Invention Before the Critical Date; and (3) The PTO’s 180-Day Filing Deadline of the Optional Interim Procedure for PTA Reconsideration Request Is Not Arbitrary and Capricious.

It is understandable that those who are entering into a business endeavor would want to know what their potential exposure might be, and when you have an invention perhaps the single largest potential liability looming is the threat of infringing a patent owned by another. This being the case, it is understandable that individuals and small businesses would like to be able to obtain a patent search and opinion that if they were to do what they are about to do they would not be sued for patent infringement. The analysis required in order to make this determination is daunting, takes a lot of time and comes with substantial liability for the patent attorney who offers the opinion. What this adds up to is a freedom to operate opinion costing a lot of money. Allow me to explain why.

There can be little doubt of the exceptional importance of Akamai Technologies, Inc. v. Limelight Networks, Inc. to the intellectual property community, and to innovators as a whole. The issue of joint infringement has been the focus of much discussion in recent years by academia, the media, and industry. In its 2014 remand of this case, the Supreme Court suggested this Court would have the opportunity to “revisit the § 271(a) question if it so chooses,” 134 S. Ct. 2111, 2120 (“Akamai III”). The AIPLA, as amicus curiae, argues that the Federal Circuit should choose to do so by rehearing the case en banc because the single entity rule as set out by the Panel majority would make it nearly impossible for certain patent holders to enforce their patents against joint infringers.

After two and a half years of hard-fought litigation, Kroy IP Holdings has been defeated in a patent case brought against grocery retailer Safeway, Inc. In two comprehensive opinions issued May 29 by Judge William C. Bryson—a senior Federal Circuit judge sitting by designation in the Eastern District of Texas—the court granted Safeway’s motions for summary judgment and invalidated Kroy’s U.S. Patent No. 7,054,830 on several grounds. Not only did Judge Bryson find the ‘830 patent to be abstract and ineligible for patent protection, he also found the patent to be anticipated and obvious in view of Safeway’s cited prior art. Judge Bryson entered judgment for Safeway the same day, and ruled that as the prevailing party, Safeway is entitled to its costs.

Recently, a small business that designs, installs and services digital video surveillance systems, 3rd Eye Surveillance, sued the United States federal government for alleged patent infringement. The lawsuit, filed in the U.S. Court of Federal Claims, seeking damages exceeding $1 billion for unlawful use of the company’s three video and image surveillance system patents – U.S. Patent Nos. 6,778,085, 6,798,344, and 7,323,980. The surveillance system patents are owned by Discovery Patents, LLC of Baltimore Maryland, who is also a Plaintiff in the case, and exclusively licensed by 3rd Eye Surveillance.

In both theories of indirect patent infringement (i.e., inducement of patent infringement and contributory infringement), the patent owner must show that the defendant knew its activities were infringing. If the defendant can prove that it did not have such belief then it is a valid defense to indirect infringement. In Commil, the defendant went a step further and contended that it was not liable for inducement of infringement, arguing that it is axiomatic that one cannot infringe an invalid patent and it had a good faith belief that the patent at issue was invalid. The defendant mixed infringement and invalidity together. In the opinion, the Supreme Court placed a wall between the theories of infringement and invalidity and held that the mental state of the defendant as to the patent’s invalidity has no bearing on whether it thought its acts were infringing.

The issue considered by the Supreme Court was whether a good faith belief of patent invalidity is a defense to a claim of induced infringement. In a 6-2 decision written by Justice Kennedy, the Supreme Court ruled that belief of invalidity is not a defense to a claim of induced infringement. While it seems that the Supreme Court issued a reasonable decision in this case it is deeply troubling how little the Supreme Court actually knows about patent law. In addition to repeatedly discussing the validity of the Commil patent, rather than the validity of the patent claims, the Supreme Court also seemed to suggest that Cisco could have relied on a procedural challenge to the Commil patent that simply wasn’t available as an option at any relevant time during the proceedings.

The opinion provides guidance in terms of when divided infringement actually imposes liability for patent infringement. When a mastermind offloads one or more steps of a claimed method to another entity, then the actions of that other entity are vicariously attributed to the mastermind only if the relationship is one of a principal-agent or joint enterprise, or if there is a contract between the parties requiring or mandating the other entity to perform the offloaded method step. Whether other terms that limit the vicarious nature of a contract might impose liability will have to be litigated in the future.

Two of the biggest post-production/3D-conversion companies are preparing for battle in a patent infringement suit that is sure to create enemies and allies in the world of film post-production. Prime Focus Creative Services Canada filed a patent infringement suit against Legend3D in the U.S. District Court for the Central District of California. In the March 30, 2015 complaint, Prime Focus World requested a jury trial, an injunction banning Legend3D from performing the patented process, a finding of willful infringement and unspecified monetary damages. Each company has some of the biggest blockbusters in recent memory.

Of course, the substantial victories won by Bard and Apple do not match Polaroid’s in another very significant way. Polaroid was successful in securing an injunction against further infringement by Kodak that forced the goliath of the photography industry to withdraw all of its instant cameras and film from store shelves across the country. The courts imposed this punishment even though more than thirteen million Americans owned Kodak instant cameras that were immediately rendered useless by the decision.