Archive for the “Patent Litigation” Category

Read this interesting post from Finnegan’s Federal Circuit IP Blog:

Author: Lauren J. Dreyer Editor: Kevin D. Rodkey

In Nuance Communications v. ABBYY USA Software House the Federal Circuit affirmed a noninfringement judgment… Source: A Cautionary Tale: When Patentee’s Voluntary Election to Try Subset of Patents Justifies Noninfringement Judgment for All Asserted Patents

My 2 cents: You can’t have your cake and eat it too. Nuance tried to save legal fees by paring down the number of patents they were trying to enforce by only pursuing their “best” and strongest claims. When they lost, they hoped to have a second shot using their second string…but the court shot them down. No “double jeopardy” for ABBYY unless Nuance had very explicitly reserved the right to sue again on the unasserted patents.

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In a perfect (IP) world your patent, once issued, would never be found to be invalid (assuming you didn’t “cheat”). In the real world your patent is only presumed to be valid, a presumption that can be proved wrong in court. Like the presumably innocent defendant, your presumably valid patent can quickly be found “guilty” and become a nice piece of wallpaper. A typical ground for invalidation is “anticipation” by a [single] prior reference that describes all aspects of your invention.

“But how can that happen!”, you ask. Didn’t I do my prior art search in the USPTO database? Didn’t the patent examiner do that too? Ah, yes, but the anticipating reference doesn’t have to be a patent (or patent application). An anticipating reference doesn’t even have to be a single document…or even a document. In a recent District Court decision (IP Innovations LLC v. Red Hat, Inc.) described in the All Things Pros blog, the defendant demonstrated that the patent in question was anticipated by a publicly used system that was described in two complementary, non-patent, publicly available documents.

In this case the patented invention (a  a software system of virtual workspaces) had actually been previously developed by a graduate student (“Chan”), implemented for an undergraduate course, and described in Chan’s thesis and in an academic paper by Chan’s supervisor. The patent holder tried to argue that the two published documents could not be used as the “single reference” needed to demonstrate anticipation. That argument failed.

The key here is that the requirement for anticipation is for all aspects of the invention be found in a single entity where that entity can be a single reference, device, or process. How that single reference, device, or process is described publicly – in a single document or multiple documents – is irrelevant. In this case the defendant had no problem showing that the two documents were both describing a single entity – Chan’s software system.

I don’t know the details of what was described in the thesis and the paper such that both documents were required to demonstrate anticipation but it seems to me that had the patent holder overcome the “invalidity by anticipation” defense, he would have then had an uphill battle to overcome an “invalidity by obviousness” defense, since obviousness allows multiple prior references to be combined.

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As many of you might be aware, the past year or so has seen the emergence of a new type of troll – the patent marking troll. This PMT seeks out products that have incorrect patent marking (non-applicable or expired patent numbers) and sues the manufacturer. The penalty under the current patent law is up to $500 per violation. That doesn’t seem like much until you realize that each individual item sold is a unique violation, as has recently been confirmed by the courts. You don’t have to be a math whiz to realize that $500 times the number of, say, DVD players starts to add up to real money.

The poster child for patent marking trolling is Solo Cup. Apparently, Solo cup has been producing those plastic lids for coffee cups marked with an expired patent number. Each individual lid, retail value in the pennies, is in theory an “up to” $500 violation. So Washington DC patent attorney Matthew Pequignot sued them (he splits the fine 50:50 with the government).

To make a long story short(er), the case ended up at the Federal Circuit which decided that:

  1. Marking with an expired patent number is the same, under the law, as marking an “unpatented” item with an inapplicable number (the actual wording in the law). Solo had argued that the cup lids were patented, just that the patent had expired, but the court said unpatented means not protected from copying by a patent.
  2. For a violation to occur, the “with intent to deceive” part of the law must be rigorously demonstrated. More to the point, the court ruled that simple knowledge of the falsity of the marking was not proof of intent to deceive. Solo argued successfully that the cost of making new molds to remove the expired patent number(s) was uneconomical and that, as the molds needed to be replaced, they were removing the offending numbers. Whether or not you or I believe it, the court found is plausible enough to allow Solo to dodge the bullet.
  3. Surprisingly, the court also found that the mealy mouthed wording we often see – “may be covered by one or more of the following patents” – might support the argument of no-intent-to-deceive. I think that such conditional wording is at best a smoke screen to cover a desire to suggest patent protection when there is none. Except for reasonable delay in removing expired patents I cannot justify a company not knowing for sure what patents apply to the product in question. Heck, the purpose of patent marking is to warn off competitors; if you don’t know what patents apply, why should the competitor have to try to figure it out. I’d allow such conditional marking only if those markings lost their purpose of informing competitors of their infringement liability.

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Since Valentine’s day is behind us, is it okay to speak of a relationship gone bad? A “divorce” that has ended up in patent court some 12 years after the patent issued? Can you really enforce a patent 12 years after the supposed infringement started or is this just a “lovers’ quarrel” taken too far?

Hassan Kunbargi started investigating the chemistry of cement at a graduate student in 1984. Edward Rice, owner of CTS Cement Manufacturing, became aware of Kunbargi’s work and sought an adjunct faculty position at UCLA so that he could serve as Kunbargi’s advisor. Rice hired Kunbargi to work at CTS in 1985. After that, both men worked for another company, Fibermesh.

In 1989, after demonstrating the invention disclosed in a patent application to Rice, something in the relationship apparentlyy turned sour and Kunbargi ceased working for Rice. In September 1990 the patent was allowed and Kunbargi received the ’556 patent, entitled “Very Early Setting High Strength Early Cement.”

Fast forward to 2002. Upon the issuance of his third patent, Kunargi sued Rice for, among other things, patent infringement and theft of trade secrets. This case bounced around the courts with motions on both sides being considered at one time or another. [including Kunbargi’s motion to disqualify Rice’s counsel, who had been listed on a power of attorney as entitled to prosecute a patent application on an invention by Rice and Kunbargi when they had both worked for Fibermesh!].

Among other defenses, Rice turned to the doctrine of laches – that is, the idea that if you fail to act within a reasonable period of time you lose your rights under the law. The concept, like most aspects of patent law, is an attempt to enforce fairness. If you believe someone is infringing your patent, it is considered unfair for you to wait until the other party has invested in the technology and built up a large business before enforcing your patent. The District Court agreed with Rice that 12 years was too long and declared the patent unenforcable against Rice in a summary judgement [viz., without a trial].

According to the court, Kunbargi should have known of his infringement claim because of his history of working on cement mixtures with, and then having a falling out with, Rice, and because of his prior affiliation with CTS. The court found that, because Kunbargi had demonstrated his invention to Rice before the ’556 patent issued, Kunbargi was on “inquiry notice” at the time the patent issued.

The appeals court (the CAFC) disagreed. It said:

CTS does not dispute that [Kunbargi] could not have tested CTS’s product for the presence of soluble anhydrite. Without access to CTS’s internal procedures, Kunbargi could not have investigated CTS’s methods to determine infringement. Even Kunbargi’s hiring of a private investigator led to no conclusive result that CTS’s products infringed the ’556 patent. An infringer does not escape liability merely by infringing in secret. [Kunbargi] could only have asserted infringement of the ’556 patent upon a reasonable belief that CTS infringed all of the limitations of the claims, including the limitation requiring soluble anhydrite.

The CAFC therefore reversed the summary judgement and sent the question of laches back for trial. The CAFC pointed out that, for laches to apply, the only time that counts is the time after the patent holder should have had a reasonable basis to believe infringement is taking place.

Keeping a low profile while you infringe, even if you are successful for many years, will not get you off the hook for infringement. And knowingly allowing someone to infringe in order to build up your settlement (or get revenge in a relationship gone bad) may leave you holding an empty purse.

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