Source: https://www.iplitigationblog.com/
Timestamp: 2019-04-22 13:57:00+00:00

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Well, what do you think is going to happen when, as a practical matter, a bright, energetic, creative young person with a great idea has no effective way of protecting that idea from those who, quite literally, know they can simply take it with no real adverse consequence? Seriously, this is isn’t rocket science.
Since when has the solution to undesired complexity, delay and expense been found in designing and implementing even more complex, time-consuming, expensive and arcane procedures? Markman hearings, special “Patent Local Rules,” various forms of post-issuance reviews, etc., however well intentioned, have the very real opposite effect of making patent enforcement almost hopelessly complex rather than swift, efficient, just and inexpensive. Indeed, the greatest and most effective form of “patent reform” might simply be to knock these self-impressed patent litigators and Federal Circuit judges off their pedestals, recognize patent law as simply just another area of law in general, and present the issues to a jury without delay, followed by a review, if appropriate, in the appropriate Circuit Court of Appeals.
The Judge is absolutely right here. I do not know why anyone these days would invest in getting patents unless there is cash to burn, or in recognition that misguided investors still see patents as a desirable check-list item when evaluating a company. Anyone who actually relies on patents to keep competitors at bay (especially well-heeled and/or connected ones) is in for an unpleasant surprise.
There you have it from a Chief Judge of the Federal Circuit who, better than most, was and is in a position to know, and who saw this stuff first hand. I have never understood how patents can be “clearly invalid,” how cases can be clearly and objectively “baseless” and “frivolous,” and yet it somehow takes five to ten million dollars in attorneys’ fees to demonstrate these “clear” and “obvious” truths. Are the lawyers collecting these fees incompetent?
All in all, fascinating comments, and I thank Judge Michel for his candor and insight. What a refreshing change from those who simply parrot “troll” and “patent abuse” when supposedly addressing a matter of importance to the future of our country.
While the suggestion to “go after the guys who are infringing” has a superficial logic and appeal, the problem, of course, is that these crooks are located overseas, are almost always unknown, and, as a practical matter, are beyond the reach of U.S. courts. To legitimate domestic businesses and consumers victimized by such widespread and blatant copying, both Amazon and the Courts say, “tough luck.” Small consolation to those who (unlike the overseas, infringing, fast-buck artists) help build the courthouses and pay the judge’s salaries.
I am glad to see that this unfortunate state of affairs is becoming more widely known and a matter of larger concern. I have a particular interest in this given that, on December 12, I will be delivering oral argument at the Court of Appeals for the Federal Circuit in support of our appeal in Milo & Gabby v. Amazon.com, Inc. (16-1290). While expressing sympathy to my client, the lower court nevertheless absolved Amazon of liability, relying on the old claim that Amazon neither “sells” nor “offers to sell” products.
Regardless of what the CAFC does in our case, the basic problem and issue remain. By opening the U.S. market to literally anyone with a computer and willingness to click the box saying, “yes, I agree to the terms of service,” Amazon, as long as it remains legally protected, provides a huge end-run around the Intellectual Property laws of this country — a loophole that benefits admitted foreign fraudsters over the legitimate businesspeople of this country and those who wish to buy their genuine products.
This situation cannot continue and, one way or another, will be addressed, either through controlled voluntary action on the part of those concerned, or through the blunt action of the legal hammer. Whether our case reflects the last dying gasp of the fiction that Amazon doesn’t actually sell anything, or marks a needed change in a new direction, remains to be seen. Stay tuned.
As a long-suffering Cubs fan, I expect it to be reversed on appeal.
I was saddened to learn that Ray Niro died yesterday while vacationing in Italy. For those of us engaged in contingent-fee patent litigation, Ray was the superstar, the source of inspiration — in short, the best there ever was.
I was fortunate to know Ray, although it came at a real cost to my client and more than a bit of personal humiliation for myself. You see, we were on opposite sides of a patent infringement case that went to trial in Chicago in the early 2000s. I, as lead trial counsel for our side, had the “pleasure” of hearing the jury award $12 million against my client. Ray, for reasons of his own, elected not to be there when the verdict was read. Later that night my dejected team and I retired to the Italian Village (my favorite Chicago Restaurant) to lick our wounds and drown our sorrows. Eventually the waitress came by and said that “Mr. Niro had seen us come in and wanted to buy us dinner.” After first thinking “that won’t be necessary,” I quickly decided that was, in fact, a very nice gesture on Ray’s part and that we would indeed take him up on it. At the end of the night, I went down to find Ray, thank him for the dinner and congratulate him on his victory. He enthusiastically shook my hand, slapped me on the back, confided he actually feared he had lost the case, and said we did a great job ourselves. At no point did he gloat, make snide comments or act anything other than a gentleman and gracious winner. A class act all the way around.
In losing that trial I got a great education. Ray was easily the best trial lawyer I have personally seen. My experience with that trial and observation of Ray’s practice induced me to begin a contingent-fee practice of my own. When I decided to take the plunge I called Ray to seek his guidance and counsel. Ray was gracious enough to meet with me in his Chicago office where he gave me valuable advice and guidance. I mentioned that I did not intend to compete with him and asked that, if they had otherwise good cases that might be too small to be of interest to him, he send them my way. He said he would, and he did — many times.
Over the subsequent years Ray and I stayed in touch and he was always ready and willing to speak and offer advice. Ray was the champion of the underdog and was more than willing to stand up to those in power. He also had the legal chops to make things happen in the courtroom. How many young lawyers start with the same lofty intentions before being seduced by the money, power and creature comforts of big law corporate practice. Ray was the real thing and again, losing to him in court was the best thing that ever happened in my legal career.
Bashing Ray Niro has been a popular pastime among lawyers for quite a while. I suspect much of it comes from jealousy and envy. But that is testimony to his greatness. He was good — in fact, the best there ever was.
I have now handled a couple of cases for small business people victimized by the irresistible on-line juggernaut known as Amazon.com.
Sadly, one of these cases resulted in an unpublished appellate decision from the Ninth Circuit upholding the lower court. Good news for Amazon. Not so good for my client who was essentially forced out of business by unchecked copying.
The other of these cases, Milo & Gabby v. Amazon (12-cv-1932) is currently up on appeal at the Federal Circuit (Appeal No. 16-1290) however, and we expect to argue the case in the next few months. While I continue to believe there is a thinly concealed bias among the courts in favor of big business (hey, can he say that on the Internet?), I am encouraged by what seems to be a growing awareness that all is not well with the current situation. In particular, it appears others are starting to question whether unlimited access to cheap, foreign goods of dubious quality and infringing pedigree is really such a good thing after all.
So far, the courts have shielded Amazon and others like them (e.g., eBay) essentially holding that their only obligation is to remove listings when notified of infringement. As noted by KING-5, this is hardly a workable solution given the number of infringing listings and the fact that, even when removed, the listings simply reappear two hours later under a new name.
However, the patent laws of this country clearly state that anyone who “sells” or “offers to sell” a patented product is liable for patent infringement. (This particular law was written in 1952 when Congress still used standard English and legislators more-or-less said what they meant.) So, the question is, does Amazon, the country’s “largest Internet retailer,” actually sell anything? Does the enormously successful Amazon website actually offer anything for sale? Do we really need to ask these questions? Could this be why the lay public holds lawyers and the legal system in such high esteem?
So far, the courts have bought Amazon’s argument that it neither sells nor offers for sale the countless products appearing on its site, and that those who are victimized by admitted copiers from overseas should leave Amazon alone and try to track down these anonymous, overseas culprits themselves. Again, great news for Amazon. However, as evidenced by both Birkenstock and far smaller companies alike, this may not be so good for the country as a whole. Anyway, we’ll know more when we get the decision on appeal.
Offensive? Racist? Most certainly. Protectable? You bet.
Regardless of your politics or sensibilities, all of these words were previously denied federal trademark protection because they were all “disparaging” marks, under the Lanham Act 15 U.S.C. § 1052(a). However, in a fairly bold move, the Federal Circuit in its opinion, issued December 22, 2015 held that this aspect of Section 2(a) of the Lanham Act is unconstitutional under both “strict” and “intermediate scrutiny” standards.
A single examiner, with no input from her supervisor, can reject a mark as disparaging by determining that it would be disparaging to a substantial composite of the referenced group.
Id. at p. 8 (emphasis added). As a result, if you’re one of the many people attempting to obtain registrations on “immoral” or “scandalous” goods and services, you will still have to side-step this issue until the CAFC receives a direct challenge to it. Thus, if you’re attempting to obtain federal registration on, say, marijuana-related goods and services (which are still listed as a Schedule I drug under the Controlled Substances Act), you will still face these objections from the Trademark Office.
Could this be a sign from the CAFC that it will deplete the Trademark Office’s ammunition within Section 2(a)? It seems like we just need the right case to find out.
On May 26, the Supreme Court finally drew a line in the sand on indirect patent infringement defenses. Enter: COMMIL USA, LLC v. CISCO SYSTEMS, INC.
Previously, the Federal Circuit held that “evidence of an accused inducer’s good-faith belief of invalidity may negate the requisite intent for induced infringement,” Commil USA LLC v. Cisco Systems Inc., No. 2012-1042, slip op. at 11 (Fed. Cir. June 25, 2013). The Supreme Court actually read the plain text of the Patent Act and reversed.
Direct infringement is still strict liability. Here, the Supreme Court held that a patent defendant’s so-called “Good Faith Belief of Invalidity” defense to infringement simply does not exist in reality or in law. (Slip Opp. pp. 5-14). Plainly, the Court held that the mental state of a direct infringer is wholly irrelevant. This is wonderful news for fans of stare decisis because SCOTUS held the exact same thing in Global-Tech v. SEB S.A. No real surprises here.
Good-faith belief of non-infringement will probably suffice. However, the Commil opinion reiterated its Global-Tech holding that liability for indirect infringement can only attach if the defendant knew of the patent and knew as well that “the induced acts constitute patent infringement.” In delivering the opinion, Justice Kennedy reiterated that for both induced and contributory infringement, Global-Tech requires “proof the defendant knew the acts were infringing.” (Slip Opp. at 9).
Well … how will a defendant know that an act is infringing without a ruling stating the same? This gives defendants a lot of flexibility in defeating an accusation of indirect infringement. In essence, a defendant can say, “Well how was I supposed to know I was inducing or contributing? Patent Infringement can only be fully known when a court says so.” To be fair, Kennedy hinted that such a belief of non-infringement on the part of the defendant must be “reasonable,” but that still gives defendants plenty of ammunition to defeat an accusation.
Good-faith belief of invalidity is no defense. Citing how different the issues of infringement and invalidity are under the Patent Act, the Court held that a good faith belief of invalidity is NOT a defense to indirect or direct infringement. The Court spilled some ink over how burdensome litigation would become if a good-faith belief of invalidity would be allowed, but indirect infringers can make things just as onerous by maintaining a good-faith belief of non-infringement.
The lesson here for indirect infringement defendants is to play dumb regarding infringement. The lesson here for plaintiffs is to find a direct infringer. Some are calling this a “win for trolls,” including dissenter Justice Scalia (Roberts also joined in the dissent). But from a practical standpoint, the Court’s ruling will likely not make life any easier for plaintiffs, because a defendant will only need to hodge-podge some good faith belief of non-infringement – as opposed to a good faith belief of invalidity. In light of the Federal Circuit’s recent Akamai decision, that’s getting increasingly easier to do.
At the end of the day, however, the Supreme Court made a lot of patent plaintiffs breathe a collective sigh of relief after reeling from the Federal Circuit’s earlier decision.

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