Posts Tagged: "Patent Litigation"

One of the most valuable benefits of Open Prosecution is when a patentee is forced to enforce a patent. If the patentee filed for a Continuation, it could file for an additional patent with new Claims but the same Priority Date as the original patent, and add it to the lawsuit. And, of course, before that second patent is issued, the patentee files for yet another Continuation. The plaintiff in a patent infringement lawsuit can use an Open Prosecution model to continue to introduce new patents as a counter-strategy to the IPRs filed by the defendant. More than a few patent infringement lawsuits ended in favorable settlements once the defendant realized it had a formidable opponents with additional patents up its prosecution sleeve.

The reality created by eBay in light of the AIPA is simple: If you scrape an invention off the USPTO website and massively commercialize it, you get to keep it. Ubiquity has become a defense. How odd that ubiquity caused by your own initial theft becomes an impenetrable shield in patent infringement litigation… Of course, not all infringers should be liable for willful patent infringement. Some infringers are not the experts in the field. Some are users of technology produced by the experts. If you are a small coffee shop and you purchase a router, you are not an expert and you are not willfully infringing. You just bought a product that some infringer sold you and you reasonably believed could be lawfully purchased and used. But if you are the company producing that router, it must be assumed that you are willfully infringing.

The TC Heartland decision follows the trend of eroding patent holder rights due to the potential for infringers to more easily move the lawsuit to a more favorable forum and in some cases have the issues of infringement and discovery for same stayed for a year or more.  As patents and mechanisms to enforce patents become weaker, the high-tech economy of Northern California will begin to diminish as foreign companies encounter fewer obstacles in their way to compete against companies with weaker IP rights… Because so much hinges on a stay motion in modern patent litigation cases, this predominant statistic influences where plaintiffs should consider filing their patent complaint.

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.

Join Gene Quinn, founder of IPWatchdog.com, on Thursday, October 26, 2017 at 12:00 Eastern for a free webinar discussion on the strategic use of “forward rejections” in prosecution, litigation and due diligence.

Idenix Pharmaceuticals LLC v. Gilead Pharmaceuticals, Inc., C.A. No. 14-846-LPS (Delaware Dist. Court, Sept 22, 2017) (“Idenix v. Gilead”), is a good example of the exercise of such discretion by a district court.  Rich in facts, the case is suitable for the application of the flexible contextual standards the Supreme Court showed preference for in Halo.  Also, the case involves balancing the public good of promoting innovation by deterring willful infringement against the public good of facilitating imitation and refinement through imitation.  It is apparent from the Court’s reasoning that it was being very mindful that without the particular “refinement through imitation,” involved in the case, a life-saving cure for hepatitis C would not have been discovered.  Enhanced damages were not awarded.

After a panel of the Federal Circuit affirmed the Board’s decision, in Aqua Products v. Matal, Aqua requested an en banc rehearing. The USPTO Director Joseph Matal joined the appeal on behalf of the USPTO. At issue was whether the Board could place the burden of proof for patentability of amended claims on the patent owner in an IPR, and the Board’s underlying interpretation of the relevant statutes, specifically § 316(d) governing claim amendments and 35 U.S.C. § 316(e) allocating the burden of proof in an IPR… With respect to the burden of proof, the burden of persuasion for patentability of amended claims in an IPR proceeding is placed on the petitioner, not the patent owner. However, considering Judge Reyna’s concurrence, patent owners might still have the burden of production; depending on future cases.

A multitude of changes to patent law and practice have altered the face of patent litigation in America. From patent venue decisions in district courts that seem to be inconsistent with TC Heartland, to Indian Tribes acquiring patents and asserting sovereign immunity, the patent enforcement and defense landscape has changed dramatically over the past few months. Amidst these changing times, please join Gene Quinn for a free webinar webinar discussion – Hot Topics in Patent Litigation – on Thursday, October 12, 2017, at 12pm ET. Gene will be joined by former ITC Commissioner F. Scott Kieff and Keith Grady, Chair of IP and Technology Litigation at Polsinelli.