Source: http://271patent.blogspot.com/2006/
Timestamp: 2019-04-18 18:51:50+00:00

Document:
Effective December 16, 2006, the USPTO has announced a 6-month pilot program to provide a limited number of Private PAIR users with the option of receiving electronic notification of some outgoing correspondence related to their US patents and US national patent applications retrievable through Private PAIR instead of a paper mailing of the correspondence.
PCT Applications will not be included in this pilot.
Participants can designate up to 3 e-mail addresses to receive notifications associated with a corresponding Customer Number. Each e-mail notification will list all applications in which new outgoing correspondence was prepared for the corresponding file within the preceding 24 hours, and each notification will be entered into the corresponding application files. The correspondence should be available for downloading through Private PAIR within two business days of the date of the email notification.
The period for reply will begin tolling as of the day the correspondence becomes available for viewing.
If successful, the program will convert to full production around June 2007, at which point the program will be open to all users having a Customer Number and access to Private PAIR.
For further information, contact the Patent Electronic Business Center at (866) 217-9197 (toll-free), or send an e-mail to ebc@uspto.gov.
Visto has filed patent infringement suits against a number of "push" e-mail companies, including Infowave Software, RIM, Good Technology, and Microsoft. The leading case in Visto's enforcement effort, Visto Corp. v. Seven Networks (2:03cv333-TJW) obtained an infringement verdict last April. Last week, Judge Ward decided a number of post-trial issues in Visto's favor including punitive damages and permanent injunction. This was Judge Ward's first opinion addressing permanent injunctions after eBay, and marks only the second time in five cases where an injunction was granted in the E.D. Tex. In both cases, the court indicated that being a direct competitor of the patentee was a substantial factor in granting the injunction.
Id. Bearing these factors in mind, the court now turns to the facts of this case to assess the propriety of permanent injunctive relief.
Visto has demonstrated irreparable injury. The parties to this case are direct competitors, and this fact weighs heavily in the court’s analysis. Intellectual property enjoys its highest value whenit is asserted against a direct competitor in the plaintiff’s market. In Tivo v. EchoStar Communications Corp., 446 F. Supp.2d 664, 669 (E.D. Tex. 2006), Judge Folsom found irreparable harm because “[t]he availability of the infringing products leads to loss of market share for Plaintiff’s products.” Seven’s arguments to the contrary, focusing on the large market share of Research in Motion, are not persuasive. The court finds that Visto will suffer irreparable injury absent an injunction.
B. Inadequacy of legal remedies.
Visto has also demonstrated the inadequacy of legal remedies. It is true that the jury awarded a large damages verdict. Those damages, however, are designed to compensate Visto fairly and reasonably for its past injury. Under the jury’s verdict, Seven is willfully using its competitor’s intellectual property and a threat of continued infringement exists under this record. Although future damages may compensate Visto for an approximate loss, that does not make them adequate in the sense that they are a suitable proxy for injunctive relief. What makes legal remedies inadequate under the circumstances of this case is the inability to calculate the plaintiff’s future losses with precision. An injunction against the continued use of the plaintiff’s intellectual property is the proper remedy to prevent future infringement.
The court has considered the balance of hardships. The court agrees with Visto that if no permanent injunction is entered, Visto will lose goodwill, potential revenue, and the very right to exclude that is the essence of the intellectual property at issue. Although Seven will be harmed by an injunction, the balance of hardships favors Visto in this case.
The question presented by this factor is whether the public interest would be disserved by an injunction. There has been no persuasive showing that the public interest would be disserved by an injunction. In fact, the public interest would be served by issuing an injunction to protect the patent rights at issue. After considering the traditional equitable factors, the court concludes that a permanent injunction is proper in this case. The plaintiff’s motion for entry of a permanent injunction is therefore granted.
Justice Scalia spoke last week at a industry group meeting in Northern Virginia, and addressed numerous issues ranging from the death penalty, judicial pay and "constitutional originalism." During the speech, he briefly addressed the KSR case stating that "I know how that one comes out, but I'm not going to tell you." (link) Attendees at the conference were mixed in their interpretation of this comment. Some obviously speculated that the fix was in, and that the Supreme Court had already made up its mind on the outcome of the case. Others interpreted Scalia's comment as an off-hand remark indicating his personal view of the case, but not necessarily reflecting the view of the entire court. At another point in the speech, Scalia acknowledged to the audience that the court sometimes has difficulties following the original constitutional intent of the framers from 220 years ago, especially "when you guys invent some new technology."
Federal judges in the Northern and Southern Districts of Texas have announced that they will start looking into adopting districtwide patent litigation rules and procedures patterned after those adopted in the Eastern District. Last week (Dec. 12), judges in the Southern District's Houston division met and agreed to consider adopting districtwide rules and procedures for patent litigation. Northern District judges are planning to meet in Dallas in January to consider a timetable for adopting similarly proposed districtwide patent rules.
Draft of proposed rules for the N.D. Tex. here.
Draft of proposed protective order here.
See article from Law.com giving detail and insight on the proposed changes here.
The CAFC reviewed the N.D. Ca. grant of summary judgment, finding Datamize's patent invalid for violating the on-sale bar doctrine. Just prior to the one-year date when the patentee filed an application for a software authoring tool used to create an interactive kiosk system, the patentee gave a general presentation on features of the invention to industry members sponsoring a trade show. In exchange for waiving the sponsorship fee, the patentee agreed to provide kiosks at the trade show for other members to use. After the agreement was made, a provisional application was filed, and the patentee proceeded to provide the kiosks a week later.
During subsequent patent litigation, Plumtree successfully argued on a summary judgment motion that Datamize was barred from obtaining patent protection, since the patented subject matter (1) was the subject of a commercial sale or offer for sale, and (2) the invention was be ready for patenting, due to a reduction to practice before the critical date.
[O]n this record, we cannot sustain the district court’s conclusion that the method claims are invalid under the on sale bar rule. The district court reasoned that "the agreement with SIA embodied all of the claims of the ’040 and ’418 patents" because "the kiosk at the trade show embodied all of the claims.". . . In so holding, the district court relied on Kevin Burns’s testimony that "the network kiosk system that was demonstrated in March of 1995 at the Las Vegas show embod[ied] all the claims" of the ’040 and ’418 patents. These statements reflect confusion as to the nature of the patented product. Here the invention reflected in the method claims is a process for creating a kiosk system, not the kiosk system itself. The kiosk system itself is not patented. The court’s focus on whether the kiosk system somehow embodied the claims of the patent was misplaced, and the district court’s reasoning does not support a grant of summary judgment. Nor does the record support the ultimate result reached by the district court.
[T]he more difficult question is whether the commercial offer was "of the patented invention." We have stated that "the invention that is the subject matter of the offer for sale must satisfy each claim limitation of the patent." . . . Datamize admits that "SkiPath [was] created with the authoring system" and that the authoring system "embodied all the claims of all three of Datamize’s patents." . . . On its face, however, the written agreement between MA [Datamize] and SIA did not unambiguously require use of the patented method. The agreement did require MA [Datamize] to "provide the software/hardware package necessary to produce the interactive touch-screen information center as presented to SIA on January 17, 1995 in McLean, Virginia." . . . This reference to the software/hardware package is ambiguous as to whether it required MA [Datamize] to provide the kiosk system software or to perform the patented method. Moreover, Plumtree has made no showing that extrinsic evidence would compel an interpretation that MA [Datamize] was bound to perform the patented method. Therefore, the record does not provide a basis for summary judgment on this issue.
Moreover, the CAFC could not find anything in the record establishing that Datamize actually performed all the patented steps before the critical date pursuant to the contract.
DSU sued JMS for infringing 2 of their patents covering guarded, winged-needle assemblies that reduced the risk of needle-stick injuries. DSU also sued Australian company ITL that manufactured a sheathing structure that was used by JMS to produce the infringing needle assembly. ITL manufactured the sheathing structures ("the Platypus") in Malaysia and Singapore before shipping them to JMS in the U.S.
Upon review of the record, this court perceives, as well, an absence of evidence of direct infringement to which ITL contributed in the United States . . . ITL only contributed to placing the Platypus into the closed-shell configuration in Malaysia; not in the United States. Section 271(c) has a territorial limitation requiring contributory acts to occur in the United States.
• Hewlett-Packard Co. v. Bausch & Lomb, Inc., 909 F.2d 1464, 1469 (Fed. Cir. 1990) - "[p]roof of actual intent to cause the acts which constitute infringement is a necessary prerequisite to finding active infringement" (i.e., proof of intent to cause infringing acts is all that is required in order to establish inducement of infringement).
• Manville Sales Corp. v. Paramount Systems, Inc., 917 F.2d 544, 554 (Fed. Cir. 1990) - "[t]he plaintiff has the burden of showing that the alleged infringerÂs actions induced infringing acts and that he knew or should have known his actions would induce actual infringements" (i.e., with knowledge of the patent, the alleged infringer knew or should have known his actions would induce actual infringement).
Although this court stated "that proof of actual intent to cause the acts which constitute the infringement is a necessary prerequisite to finding active inducement," Hewlett-Packard, 909 F.2d at 1469, Grokster has clarified that the intent requirement for inducement requires more than just intent to cause the acts that produce direct infringement. Beyond that threshold knowledge, the inducer must have an affirmative intent to cause direct infringement. In the words of a recent decision, inducement requires "'that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another's infringement.'" . . . [A]ccordingly, inducement requires evidence of culpable conduct, directed to encouraging another's infringement, not merely that the inducer had knowledge of the direct infringer's activities.
In a concurring opinion, Chief Judge Michel and Judge Mayer agreed with the decision, but noted that there is no actual conflict between Hewlett-Packard and Manville, and thus, there was no need for intervention by the full court.
In light of the Supreme Court's eBay decision, something that didn't get immediate attention was the effect the ruling would have on Section 337 actions before the International Trade Commission (ITC). Unlike district courts, who have a wide range of legal and equitable remedies at their disposal, the ITC is equipped to do only one thing when it comes to patent infringement: grant or deny injunctive relief in the form of exclusion orders to keep infringing products from being imported into the United States.
The ITC has become a favored venue for patent holders, since (1) jurisdiction is derived from the mere act of importation, (2) time for discovery is very limited, which strongly favors a well-prepared complainant that files against an unsuspecting respondent, and (3) cases are all on a "rocket-docket" schedule, concluding in 12-18 months. In the last 10 years, the number of ITC cases has doubled, and it is expected that they will rise further in the years to come.
There are additional reasons to like the ITC if you are a patent holder, according to Robert Hahn, who is co-founder and executive director of the AEI-Brookings Joint Center for Regulatory Studies - the ITC rules in favor of the patent holder in higher proportions than the district courts, and provide injunctive relief 96% of the time when infringement is found (as opposed to 20% in the district courts). This could be critical for many industries, such as electronic component companies, where products are manufactured almost entirely overseas.
Unlike district courts, under Section 337(d), the ITC is will issue an exclusion order when it finds that an infringer has violated Section 337 unless, “after considering the effect of such exclusion upon the public health and welfare, competitive conditions in the U.S. economy, the production of like or directly competitive articles in the United States, and United States consumers, it finds that such articles should not be excluded from entry." As an empirical matter, a determination that an exclusion order is "not in the public interest" is rare: the ITC has found an injunction to be inconsistent with the public interest in only three of 113 patent cases studied.
these results are striking: no matter how the ITC rules, the federal district court rules the same way only about half of the time. We treat the district court decisions as the appropriate baseline because federal district court patent decisions take legal precedence over the decisions of the ITC. Thus, notwithstanding the limitations on the available data, the results of my research raise further questions about the reliability of ITC decision making: by being right only half the time, the ITC does no better than a coin toss.
[A]fter a finding of infringement, the ITC offers injunctive relief about five times more often (96 percent versus 21 percent) than do the district courts. This difference would likely have a large impact on the negotiations between a patent holder and an accused infringer. When a patent case is before the ITC, the patent holder can more credibly threaten to pursue injunctive relief to extract a higher royalty rate. This greater bargaining leverage may induce “patent trolls” to file claims at the ITC in the first instance.
A "must read" for any patent litigator dealing with ITC-related issues. Download or read the article here.
See earlier ITC study (1992) by Sheldon Meyer and Mark Miller here.
The Federal Circuit issued it's opinion in the Sanofi case Friday, affirming the lower court's grant of a preliminary injunction against Apotex's generic version of Plavix. Sanofi and Apotex were previously involved in litigation over Plavix and tried to settle the case until the state attorney general issued a regulatory denial of various settlement terms. In light of the regulatory denial, the two companies resumed litigation, and Sanofi obtained a preliminary injunction in the lower court when (1) Apotex stipulated to infringement; and (2) the lower court found that Apotex was unlikely to prove invalidity/inequitable conduct/unclean hands at trial.
Since preliminary injunctions are slightly different from permanent injunction (requiring a "reasonable likelihood of success" versus actual success), there wasn't a heavy reliance on the eBay decision. Nevertheless, the CAFC reviewed Apotex's contentions of invalidity, inequitable conduct and unclean hands and concluded that the lower court properly found that the evidence did not establish that Apotex had a reasonable likelihood of success in rendering Sanofi's patents invalid or unenforceable.
If the litigation results in a judgment that the ’265 patent is not invalid or unenforceable, Sanofi agrees that its actual damages for any past infringement by Apotex, up to the date on which Apotex is enjoined, will be 50% of Apotex’s net sales of clopidogrel products if Sanofi has not launched an authorized generic and 40% of Apotex’s net sales if Sanofi has launched an authorized generic. Sanofi further agrees that it will not seek increased damages under 35. U.S.C. § 284.
We disagree with Apotex that by entering into that agreement, Sanofi bargained away its right to seek preliminary injunctive relief, and thus its right to prove irreparable harm, in the event the settlement was not approved. The above provision itself contemplates an injunction in referring to "up to the date on which Apotex is enjoined" and speaks only of damages for past infringement. In addition, based on other provisions in the agreement, it is clear that the parties contemplated the possibility of a preliminary injunction in the event of regulatory denial. Paragraph 15 of the agreement, for example, sets forth the procedural steps the parties must follow when seeking a preliminary injunction. Moreover, merely because a patentee is able to identify a monetary amount that it deems sufficient to avoid or end litigation does not necessarily mean that it automatically foregoes its right to seek a preliminary injunction or that any potential irreparable injury ceases to exist if infringement resumes.
Apotex also argued that the district court erred by applying a presumption of irreparable harm because Sanofi established a likelihood of success on the merits. Apotex contended that applying such a presumption is in direct contravention of the Supreme Court’s decision in eBay. However, because the CAFC concluded that the district court did not clearly err in finding that Sanofi established several kinds of irreparable harm, including irreversible price erosion, the CAFC did not address this contention.
Regarding the balance of hardships and the impact to the public interest, the CAFC also found these factors favored Sanofi, stating that "[t]he patent system provides incentive to the innovative drug companies to continue costly development efforts. We therefore find that the court did not clearly err in concluding that the significant 'public interest in encouraging investment in drug development and protecting the exclusionary rights conveyed in valid pharmaceutical patents' tips the scales in favor of Sanofi."
It appears that the CAFC's decision is consistent with the developing district court trend, finding injunctive relief proper only in "competitor vs. competitor" cases where two actual products are affected by patent rights. Michael Smith from the E.D. Tex. Blog published a recent paper titled"Effect of eBay v. MercExchange on District Courts' Decisions Whether to Grant Injunctions in Patent Cases" and found that, so far, only "productive" patent holders have been able to get injunctions on infringed patents. Download Michael's paper here.
This case stemmed from a disciplinary proceeding instituted against Klein over twenty years ago which resulted in an order suspending him from practice for two years. Since his suspension, Klein has filed eight petitions for reinstatement with the PTO, several cases in the federal district courts, and three appeals to this court (including the current appeal), each challenging his original suspension from practice.
After examining the record before it, the district court noted that (1) the Clopper Memoranda were part of the record considered by the Administrative Law Judge in initially suspending Klein from practice, (2) the Clopper Memoranda were listed in the PTO’s exhibit list, which was served on Klein on June 3, 1985 through one of his attorneys, (3) Klein cited to the Clopper Memoranda in his reply brief, filed on October 30, 1985, at the disciplinary hearing, and (4) the record in one of Klein’s previous appeals to the district court also included the Clopper Memoranda.
Finding no merit to Klein's argument, the Federal Circuit affirmed the lower court, and approved the district court’s decision to sanction Klein for his failure to heed the CAFC's warning issued during his last appeal to this court, that "[a]ny further filings on the body of facts already in the record will be considered frivolous, and could lead to sanctions."
For more details, and to view the District Court for the District of Columbia opinion, click here.
Moreover, as Defendants’ counsel pointed out in its papers, there seems to be no end in sight to Plaintiff’s litigation of this issue. On March 10, 2005, before this Court even had the opportunity to rule on the USPTO’s denial of Plaintiff’s seventh petition for reinstatement to the USPTO [the one most recently considered by the CAFC], he filed yet another petition for reinstatement before the USPTO.
Because it appears Plaintiff will, left to his own inclinations, continue to litigate this issue indefinitely and to no avail, and in doing so seriously burden the Court and opposing counsel with responding to his frivolous, rambling pleadings, the Court finds it necessary to bar Plaintiff from filing any further complaints in this Court relating in any way to his 1987 suspension from practice before the USPTO.
The Court acknowledges that imposition of such a sanction is a very serious matter. After examining the pleadings in all of Plaintiff’s litigation in this Circuit, the Court has concluded that such a measure is necessary.
"divergent expectations" - for trials to occur, the parties must be either behaving irrationally, or there must be some uncertainty about the probability of a victory in the courtroom.
"asymmetric stakes" - if the defendant's loss does not equal the plaintiff's gain, there is little incentive for the defendant to avoid trial and no point in bargaining to a settlement.
The "free rider" problem - defendants having an eye towards settlement have no compulsion to spend money to invalidate "bad" patents, since others (i.e., competitors) will similarly benefit from the effort.
• Patents in "crowded" fields are subject to an increased probability that disputes will arise.
• The overall decision rate in favor of patentee is 58%.
• In jury trials, 68% of the cases come out in favor of the patentee; 71% of jury trials find that the litigated patent is valid and infringed.
• In bench trials, only 51% of the cases come out in favor of the patentee. Also, 64% of bench trials find that the litigated patent is valid, but only 59% of bench trials find infringement.
The authors tracked the evolution of patent cases from 1995, 1997 and 2000 and found that most of the previous findings were largely correct. However, the study clarifies the notion that "95% of all cases settle," noting that previous studies did not necessarily consider other procedural terminations, such as summary judgment when determining this statistic. When this is taken into account, the number drops to almost 80%.
Using the courts to invalidate patents at trial doesn't appear to be an effective policy. Despite the greater ability of the court system to review all evidence pertaining to the validity of patents, less than 2.5% of litigated patents appear to be "weeded out" every year in the courts. Combined with reexamination requests, and average of 300 patents a year were invalidated in the mid-90's (as compared to the roughly 300,000 patents that were granted each year).
Also, despite the recent furor over injunctions, permanent injunctions are relatively rare in adjudicated cases (19% at trial, 4% on SJ). Most injunctions appear in consent judgments and formal settlements, and a few appear in default judgments.
Damages were awarded in only forty-two non-settled cases from 1995 (of which twenty-nine were jury verdicts), 54 non-settled cases from 1997 (of which twenty-three were jury verdicts) and 30 non-settled cases from 2000 (of which nineteen were jury verdicts). The average amount awarded in these cases was $7.4 million, $3.3 million, and $2.1 million respectively.
You can read or download the study here.
Last week, the Florida Supreme Court approved a program for board certification in specific areas of law (22 to be exact), including intellectual property law. Any lawyer who is a member in good standing of The Florida Bar and who meets the standards prescribed by the state's Supreme Court may be issued an appropriate certificate identifying the lawyer as a "Board Certified Intellectual Property Lawyer."
Interestingly, back in 1963, the Supreme Court ruled in Sperry v. Florida that Florida could not prohibit patent agents from performing within the State tasks which are incident to the preparation and prosecution of patent applications before the USPTO, and that 35 U.S.C. 31 preempted any state laws that governed this area.
View a draft of the proposed rules here.
Tampa Bay Business Journal story here.

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