January 31, 2008
From a study prepared for the Biotechnology Industry Organization (BIO):
There is a lack of evidence that justifies overhauling the patent system in a way that could potentially disrupt the incentives of industries that rely on patents to innovate... The empirical data which is being used to justify the need for overhaul either has serious methodological limitations or is non-existent... It cannot be said, with any degree of certainty, that there is or is not a problem with patent quality, patent thickets, litigation abuses, or any other potential impediments to innovation and successful commercialization... There is no basis to believe that the proliferation of patents is hindering research.
Implementing overhaul measures aimed at weakening patent rights and enforcement mechanisms is dangerous because innovation often depends on strong patent rights and enforcement mechanisms. The danger to innovation increases when overhaul is implemented without methodologically sound empirical data.
Trying to Change the Channel
TiVo successfully sued EchoStar for infringing 6,233,389, claiming time-shifted TV program recording and playback; a jury finding finding infringement for both software and hardware claims, awarding $74 million in damages. EchoStar had an injunction stayed pending appeal. On appeal, EchoStar did its best to tweak the claim construction to avert disaster.
In January 2005, Rambus sued memory chip makers Hynix, Micron, and Nanya for infringing more than a dozen patents. The defendants fought back with a goon ringer: the Federal Trade Commission (FTC). The FTC, among other things, produced a scathing 120-page liability opinion, which the memory makers wanted entered into evidence for their patent litigation. The judge said no, finding the report neither the product of an investigation nor reliable.
January 30, 2008
On the Clam
Barracuda Networks is crying for a lifeline from the open source software community in its patent infringement fight with Trend Micro. That cry is being answered with lofty words; factual ballast not in evidence.
Oatey sued IPS for infringing its patent on residential washing machine outlet boxes, 6,148,850. After Markman, the district court granted summary judgment of non-infringement, based on a claim construction excluding a depicted embodiment. The exclusion was excluded on appeal.
American Seating sued USSC Group for infringing 5,888,038, claiming a wheelchair restraint system for buses. On the second wheeling to the appeals court, invalidity by prior public use and lost profits damages were the issues.
January 29, 2008
Outside Looking In
Gernot Pehnelt wonders in the DesMoinesRegister why the U.S. Congress is hell-bent to deform the patent regime.
The American system is regarded as the strongest protector of patent rights in the world. Unfortunately, the U.S. Congress is considering "reforming" the system... Proposed changes could have potentially devastating consequences to research-based industries, especially the pharmaceutical industry... The patent-reform bill would reduce incentives to perform research and development, threaten jobs at home and abroad and damage trans-Atlantic trade relationships, which have brought wealth and vital goods to the United States and Europe.
By passing the Patent Reform Act of 2007, Congress would replace many of the best aspects of the U.S. patent system with the worst aspects of the European system.
Trimed sued Stryker for infringing its bone fracture fixer patent: 5,931,839. Claim construction fractured the assertion, resulting in a noninfringement summary judgment. Trimed had the misconstruction mended on appeal. The spat was over the structure of a hole.
January 28, 2008
or: How I learned to Stop Worrying and Love Proposed Damages Apportionment Law
The blawgosphere is alive with discussion of proposed patent reform. Patent Troll Tracker today mocked Dennis Crouch for his support of the status quo. Here at Patent Prospector, we maintain a healthy amount of skepticism about the proposed legislation. Patent Hawk earlier pointed out how the new damages apportionment rules could potentially raise the cost of litigation for accused infringers by requiring the disclosure of more (highly proprietary) information about the cost, revenue, and profit of accused products and processes. For my part, in an earlier post I called the new damages apportionment rules "the crudest and most error-prone way to handle bad patents." The worry is that judges and juries will tend to "split the baby" by lowering some damages awards, which in may cases are properly justified by the economic value of a patented technology. The political reality is that a Congressional amendment to the law suggests the inference that current reasonable royalty awards have been too favorable to patentees. (See, for example, how many injunctions have been awarded to non-practicing entities since Mercexchange v. eBay.) Information asymmetries between judge or jury and the expert witnesses and parties should be part of the equation in designing the rules, as some recent antitrust law scholarship suggests.
Despite this skepticism, I cannot agree with Dennis that "the proposed patent reforms now being debated by the Senate do virtually nothing to address these serious problems and instead potentially cause harm to the current regime." Specifically, Dennis points out "massively overlapping claims" as a problem for the current patent system. Since earlier posting strong criticism of the proposed damages apportionment rules, I've come around to seeing how the proposed rules could actually improve the efficiency of patent markets afflicted with the transactions costs associated with "massively overlapping claims." Here's how:
In the semiconductor patent litigation of Rambus versus Hynix, Samsung, Nanya and Micron: Judge Ronald Whyte in the Northern District of California ruled in favor of Rambus's in limine motion "to preclude the use of derogatory characterizations of patents and patentholders, granting the motion as to the term “patent troll” and limiting the use of the term “submarine patent.”" The pejoratives may still be used during closing argument.
Daiichi Sankyo sued Apotex for infringing 5,401,741, which was found obvious on appeal. In securing a temporary injunction at the outset of litigation, Daiichi had posted a $5 million security deposit. New Jersey district court judge Susan Wigenton last week awarded the deposit to Apotex, "to recover damages for wrongful injunction." Daiichi gets to keep the interest paid on the deposit.
Fighting Criminal Action
Last week, Triantafyllos Tafas filed an opposition brief to the USPTO's summary judgment motion in the matter of stopping implementation of the agency's proposed rules limiting patent filings and examination. Tafas backed with evidence alleged lies and cover-up by PTO management in its totalitarian approach to rulemaking.
January 27, 2008
In the Christian Science Monitor, Alexander Poltorak, CEO of General Patent Corporation, reminds Congress of the fundamental nature of patents, and reminds us of the craven corruption of our elected officials in sucking up to a narrow but well-moneyed special interest.
A self-proclaimed goal of the Patent Reform Act is to decrease patent litigation. But lawmakers have forgotten that a patent does not even give an inventor the right to practice the patented invention – only the right to exclude others from practicing it.
Translations of select entries in The Patent Prospector are available in Japanese.
January 26, 2008
Monsanto brought a declaratory judgment action against Bayer Bioscience to preclude infringement for its transgenic corn products. It worked: the patents were found both non-infringed and invalid by inequitable conduct. Bayer's appeals were futile.
January 25, 2008
In a drive to have abstraction triumph over reality, the International Organization for Standardization (ISO) thinks it can develop an international standard for patent valuation. It's an academic economist's wet dream.
Cash Cow Killed
N-Data bought 5,617,418 and 5,687,174, claiming autonegotiation Ethernet switches. The original owner, National Semiconductor, had agreed to license the patent for a song if the technology was adopted as a standard, which it was; now a widely adopted IEEE standard called NWay. Ignoring the supposed license cap, N-Data allegedly began an extortion campaign. The FTC caught wind of it, and decided to break wind on it: charging violation of 15 U.S.C. § 45, unfair competition.
Halliburon sued M-I for infringing 6,887,832, claiming oil drilling using fragile gels for drilling fluid. The problem was that "fragile gel" was ill-defined, leading to invalidity under 35 U.S.C. § 112, ¶ 2. Irresolvable ambiguity to one skilled in the art is the yardstick of indefiniteness. The CAFC pens a claim construction classic on delineation of claim term definiteness.
January 24, 2008
Having wet its whistle on everyone's favorite VOIP patent whipping post, Vonage, Sprint Nextel is ringing the bell for more rounds against an itty-bitty bevy of mobile phone service providers: Big River Telephone, Broadvox, NuVox, and Paetec Communications were plastered in four separate lawsuits.
Short of white smoke emanating from the Dirksen Senate Office Building, widespread predictions are spreading around Washington, D.C. that Senator Leahy now has slightly more than the 60 votes needed for cloture - the procedural vote to permit rapid Senate passage of Leahy, S. 1145 patent reform legislation. Everyone expects that if cloture succeeds, there will be some changes made in the bill (presumably already agreed upon behind closed doors). Swift House passage of the revised Senate version is expected in press reports.
January 23, 2008
At the Bar with a Girl Named Wiki
Patent Agent Alex Nix recently created Patent Bar Questions, a Wiki, inspired by a thread at Intellectual Property Forums, geared toward poor souls preparing for that test that separates the savvy from the savant. The relatively simple site is bifurcated: Key Things to Know for the Patent Bar Exam, a chapter by chapter walkthrough of the MPEP that highlights key sections; and Questions reportedly asked in the Patent Bar Exam, a listing of questions reported by those who have recently taken the exam. Since reported strictly from memory, the questions are not comprehensive, instead reading more like concept areas. The Wiki is currently a wee sparse; hence, better treated as a supplemental source of information, rather than a primary. For those wanting in-depth Patent Bar study materials, one of the many commercial-test-prep companies is still the way to go. Yet, like any good Wiki, Patent Bar Questions is community supported, and so the amount of available insight will inevitably grow.
On the Agenda?
Nevada Sen. Harry Reid, majority leader, jaw-jawed his Senate colleagues yesterday. After remarks about the economy swirling the rim, native American health care, spying on other countries, and building more weapons, Reid sandwiched "patent reform and an energy package" in the same paragraph, because they go together like a fish needs a bicycle.
On patent reform, we must carefully strike the right balance with a bill that promotes rather than blocks innovation from enterprising entrepreneurs.
The patent office will be refusing defective oaths for patent applications as of June. Shape up and swear like you mean it when you file.
January 22, 2008
Damages Apportionment Blowback
The presently proposed Senate revision to awarding patent infringement damages incorporates an old concept in new clothing: damages apportionment. Prior to the patent act of 1946, § 284 provided for such hair-splitting, and was referred to by the patent commissioner at the time as "one of the sorest spots in the enforcement of the law in the United States." What could it mean this time around?
Biomedical Patent Management is begging the Supreme Court to waive patent sovereign immunity in the cause of fairness. But fairness matters not a whit when pitting the state's self-interest against anything else. The state looks after itself; citizens are just cows to be milked. Patent infringement impunity is entitled under sovereign immunity.
KSR obviousness claims another victim. Sang Su Lee, one of the longest running ex parte appeals, at 14 years (the first BPAI opinion was 1994), was knocked out in the second round by the CAFC in a simple Rule 36 order (a per curiam affirmance without an opinion: CAFC 2007-1191). Round one vacated the BPAI decision for failing to specify a motivation for a combination obviousness finding. Motivation became passé as KSR sucked the oxygen out of the CAFC's longstanding teaching-suggestion-motivation (TSM) test.
January 20, 2008
Academics from NERA, a self-proclaimed economic consulting hothouse, who spurt that they "understand how markets work," demonstrate to the contrary in a report on the mythical patent troll, scintillating to a degree that guarantees no loss of sleep.
Amberwave is an R&D firm focused on advanced materials development for high technology applications. Patents are its lifeblood; which is why Amberwave is fighting to retain semblance of sanity in the patent arena. In our continuing series on "Heroes of the Patent Wars," an Amberwave snapshot.
You already know that the best sources of patent news and views are in the blogosphere. Patents are quintessentially an inside game: proper perspective incumbent to practitioners, sensationalism set aside in everyday understanding of patents for what they really are: intellectual property; nothing more, nothing less. To outsiders, patents are something else: feared; or coveted, capable of alchemistic transmutation to gold. It is precisely because the patent game is the "sport of kings": an inventor's lottery, and fierce fuel for the economic engine, that patents draw the media like roaches to candy. The droppings those roaches leave offer no surprise.
January 19, 2008
Travel Caddy sued Outside the Box Innovations (OTB) for infringing 6,991,104, which goes to a bag for storing and carrying tools. Denied a preliminary injunction based upon claim construction, Travel Caddy fruitlessly appealed, though in a close 2-1 call over what it means to use "between."
January 18, 2008
Let us praise CEO Jean-Pierre Garnier and IP VP Sherry Knowles of GlaxoSmithKline for carrying the torch as they scorch Senate Judiciary Committee bigwigs who have flipped their wigs to sashay with a toupee because of what they forgot to say; to aver the stead of not giving the PTO its head in capricious rulemaking.
January 17, 2008
Abbott had lousy lawyers defending it against Innogenetics patent 5,846,704. Abbott passed an opportunity to correct a court mistake, thus leaving it without expert testimony from one expert. Abbott farted around on invalidating the patent, not producing the ringer until the last day of discovery. And Abbott simply blew the chance to have the inventor of the anticipating art act as expert witness. For all its pains, its defense crumbled with a losing claim construction, Abbott suffered summary judgment of infringement, and ordered to pay Innogenetics attorneys' fees because its inequitable conduct charge was "exceptional" in its vacuity. In liability trial, Abbott's expert testimony was soiled because it "rested on an inaccurate understanding" of a key claim limitation. Abbott was dinged $7 million and its infringement found willful by jury; the willfulness charge lifted by the district court judge, who knew how high that bar had been raised In re Seagate. But Abbott then was pinned with a permanent injunction. Appeal gave Abbott another chance, which it largely threw away.
The World Business Council for Sustainable Development (WBCSD) and IBM have joined forces to form Eco-Patent Commons , a pledged portfolio of environmentally friendly public domain patents, designed to promote innovation and clean up our contaminated planet, one patent at a time.
2007 may have passed, but the Patent Reform Act thankfully didn't. Passed in the House last session 220-175, it never made it to floor of the Senate in the 110th session. But it's not dead: key senators on the Senate Judiciary Committee remain committed to passage.
January 16, 2008
Today's oral arguments before the Supreme Court in Quanta v. LG over patent exhaustion were exasperating, if you thought patents should always be exhausted by first sale. Maureen Mahoney, on behalf of Quanta, attempting to exhaust, was so scripted she could hardly do more than spit case law citations. Thomas Hunger, U.S. Government lapdog, ostensibly arguing for Quanta's position, that a patent exhausts with first sale, regardless of contractual terms, sounded so mixed up that he prompted Chief Justice Roberts to observe: "That would sound like your friend on the other side, the Respondent, had actually won in this case."
January 15, 2008
Baldwin Graphic Systems sued Siebert for infringing 5,974,976 and Re 35,976, aimed at cleaning printing presses. After Markman, the district judge granted summary judgment of non-infringement of both patents. The CAFC differed on the claim construction by an 'a': 'a' not connoting singularity. On another point, similar terms may play differently in different claim classes.
January 14, 2008
The Perils of Prosecution
With proclivity to despotic rule-making, USPTO management has issued edict to trash examination to the lowest common denominator. Playing the numbers to demonstrate its toughness, top management determination was to sink the allowance rate. Many moons ago, anticipating outcry at examination injustice, the agency geared up for a ramp in appeals. Outrageous incompetence is in full flower at the PTO. The governmental agency representing the sanctity of invention has been so corrupted as to soil itself in disgrace; in doing so, pointing out the woeful neglect of its overseers.
The PTO failed its procedural rulemaking obligations. The PTO asserted that certain documents did not exist; yet now they have suddenly appeared in the administrative record. The PTO’s procedures are “suspicious” at best, and suggest that the “administrative record” is not an accurate or representative record of open-minded and reasoned decision making, but rather an ex post collection of documents cherry picked for this litigation.
January 12, 2008
PrivaSys is printing money with 7,195,154, claiming secure contactless credit card transaction processes. Going a few rounds with MasterCard ended in settlement in August 2006. In March 2007, First Data opened its wallet. Now, Visa, JPMorgan Chase and Wells Fargo splash out.
January 11, 2008
Jay Wahlquist of Fogg & Powers offers Patent Pal, a web browser toolbar tuned to patent search and news. There are numerous patent search engines available in cascading drop-down menus, covering patent databases worldwide; as well, other databases of patent information oriented towards prosecutors. There's also a newsfeed for patent blogs. Nice work, and definitely worth checking out. Thanks Jay!
Free to Cripple
Stinger Systems, proclaiming itself on its web site as "leaders in electro-stun technology" (don't ask how a single company can be plural "leaders"; they would have to hurt you), was delighted to announce that reexamination concussion and shrapnel eliminated 5,936,183, titled "Non-lethal area denial device", owned by competitor Taser.
January 10, 2008
Green Over Patents
Bruce Springsteen once wrote: "Poor man wanna be rich; rich man wanna be king; and a king ain't satisfied 'tll he rules everything." In their raw lust for hegemony, creating "a new category of reportable transaction" for tax-related patents, the IRS resembles Springsteen's rich man.
Sony Electronics is looking for a legal director in its San Diego corporate headquarters, "to serve as technology/transactional legal counsel for Sony’s television, wireless and information technologies engineering groups..."
Not So Obvious
KSR was a radical reinterpretation of the obviousness statute, 35 U.S.C. §103(a). Now codified as case law without prospect of legislative correction, so much has become obvious that only a few avenues of claiming novelty are left. But those paths are becoming well worn.
January 8, 2008
SRI sued Internet Security Systems and Symantec for cyber security and intrusion detection patents. Summary judgment that SRI had created its own anticipatory prior art was upheld. Prior art is enabled as anticipatory if it suggests the invention to one of skill in the art. In a rehash of what constitutes public accessibility, a 2-1 appeals court majority fails to follow federal rule and its own precedent.
Six attorneys involved in a Qualcomm video patent assertion fiasco against Broadcom were sanctioned for "monumental" discovery violations, and referred to the State Bar of California for possible discipline. Presiding U.S. Magistrate Judge Barbara Major found:
[The attorneys] assisted Qualcomm in committing this incredible discovery violation by intentionally hiding or recklessly ignoring relevant documents, ignoring or rejecting numerous warning signs that Qualcomm's document search was inadequate, and blindly accepting Qualcomm's unsupported assurances that its document search was adequate.
January 7, 2008
Cordis separately sued Medtronic and Boston Scientific for infringing "patents covering vascular stents that are used to treat coronary artery disease;" winning both cases. Losers appealed. In the blowup, Cordis had a claim invalidated, so appealed that. All appeals were consolidated, resulting in one long ruling focused on claim construction and prosecution estoppel.
When the Chips are Down
Tessara is putting the pressure on at the ITC and in district court against a bevy of chip makers and importers for infringing chip packaging patents. The move is, in part, an attempted counter against falling stock price, which has declined 5.4% over the last year.
January 6, 2008
January 4, 2008
Former Chinese Senior Judge Yongshun Cheng mocks the scurrying of the puffy white baboons in the large rotunda building in the U.S. capitol. Judge Cheng figures that the patent reform proposals before Congress "will weaken the right of patentees greatly, increase their burden, and reduce the remedies for infringement; friendlier to the infringers than to the patentees in general as it will make the patent less reliable, easier to be challenged and cheaper to be infringed."
Here We Are Now
Intertainer had its business model hammered, shuttering operations in 2002 and launching an antitrust suit against major players in the TV industry. What little it had left in assets became video-on-demand patent 6,925,469, which it asserted at the end of 2006 against Apple, Google, and Napster. The three defendants counterclaimed for declaratory judgment. Apple has now settled.
Pressing the Flash
SanDisk owns a portfolio of over 800 patents worldwide related to flash memory. Persistent persuasion is required. Pressed by assertions in Western Wisconsin court and the ITC, PNY Technologies has just settled with a cross-licensing agreement.
Patent enforcer Acacia manages a four-patent portfolio, owned by Telematics, for combining wireless communication with GPS tracking. The portfolio was asserted against UPS, @Road, Xata, Verizon, Ryder Truck Rental, Motorola, Teletrac, and Sprint Nextel. While a few others fight on, Sprint has settled.
January 3, 2008
The National Association of Patent Practitioners (NAPP) has written Senate leaders to set them straight about proposed patent legislation: "the problem is that essentially all of the major proposals in the current bill would weaken patents."
January 2, 2008
IP Law 360 reports IP lawsuit filings dipping 8% in 2007 from 2006. With last year's declaratory judgment rulings encouraging litigation at the expense of negotiation, and the patent office unlawfully sphinctering allowances, patent court filings may rally in 2008.
The cell phone chip battle of the decade sizzles on. Though Broadcom pecked first in 2005, Qualcomm started it by playing "chicken," and has been roasted on the spit ever since. After suffering an ITC import ban last year, Southern California U.S. District Judge James Selna has slapped another injunction on Qualcomm.
January 1, 2008
On the Docket in 2008
After proving themselves randomly competent at best in 2007, the high courts will continue to define patent law as Congress dickers with wrong-headed "reform." Here are 2008 high court patent cases that may demonstrate that clown time is not over on the bench.