Source: http://www.techlawjournal.com/alert/2011/04/18.asp
Timestamp: 2019-04-20 12:41:04+00:00

Document:
TLJ Daily E-Mail Alert No. 2,222, April 18, 2011.
Monday, April 18, 2011, Alert No. 2,222.
4/18. The Supreme Court heard oral argument in Microsoft v. i4i, a patent case involving the standard of proof that must be met by a party seeking to a judgment of invalidity.
Microsoft stated in a release that "The case revolves around the standard of proof that must be met by those who seek to challenge the validity of a patent in court. The law states that patents, which are generally issued by the Patent Office solely on the basis of supporting information submitted by the patent applicant, are to be presumed valid. Since the 1980s, however, the Federal Circuit Court of Appeals, which oversees patent appeals, has required a challenge to a patent's validity be proved by a heightened standard of ``clear and convincing evidence,´´ as opposed to the lower ``preponderance of evidence´´ standard routinely applied in civil lawsuits."
Justice Stephen Breyer stated that "I'll assume that the language is open enough in the history so that we could make what would be a change, I think it would be a change. The reasons as I get from the brief for doing that are because there are two types of errors: It's a bad thing not to give protection to an invention that deserves it; and it is just as bad a thing to give protection to an invention that doesn't deserve it." See, transcript.
He asked, if there is the second type of error, instead of changing the standard, why not "go back to the Patent Office and ask for reconsideration".
Thomas Hungar (Gibson Dunn), Microsoft's counsel, responded that under current law, "re-exam is limited in scope. It can only consider certain types of prior art evidence and issues. It couldn't, for example -- it was not available for the issue that we're talking about here, the on-sale bar."
Justice Ginsburg stated that since the Federal Circuit has had "a monopoly on appeal in patent cases since 1984", and "has consistently taken this position, one would have expected that there would have been bills proposed to change it". So, she asked, "Were there any?" Hungar responded, "No".
Seth Waxman (Wilmer Hale), i4i's counsel, argued that the Congress has "actively acquiesced" in the clear and convincing evidence standard, which prompted Justice Antonin Scalia to joke about the meaning of "active acquiescence" and "passive activity".
Waxman responded, "So Congress has been very, very active in this field, and what I mean by active acquiescence is it has been very active in this field, it is well aware of the clear and convincing evidence standard, and it has done nothing whatsoever to change it, even make any effort to consider making such a sweeping change in long-standing doctrine."
Neither S 23 [LOC | WW], the "America Invents Act", passed by the Senate on March 8, 2011, nor HR 1249 [LOC | WW], also titled the "America Invents Act", approved by the House Judiciary Committee (HJC) on April 14, 2011, address this standard. However, both bills address inter partes re-examination procedure, and create a new post grant review procedure at the U.S. Patent and Trademark Office (USPTO).
The Department of Justice's (DOJ) Office of the Solicitor General (OSG) argued in its amicus curiae brief that the judgment of the Court of Appeals should be affirmed.
It wrote that "When the defendant in a patent infringement action asserts that the relevant patent is invalid, he must present clear and convincing evidence of invalidity in order to establish that defense. ... That heightened standard applies even if the defendant relies on evidence of invalidity that was not before the PTO. ... Evidence that was not before the examiner, however, may be given greater weight, making the defendant’s burden easier to satisfy. ... That approach -- which the Federal Circuit has long followed -- is consistent with congressional intent and with this Court’s precedents, and it best serves the administrative-deference and reliance interests implicated by challenges to a patent."
The OSG elaborated that "The clear-and-convincing-evidence standard best accommodates the interests implicated by validity challenges. A contention that a patent is invalid is in essence a collateral attack on the PTO’s prior administrative action, and it therefore implicates principles of deference to agency authority and expertise. Invalidity challenges also implicate the inventor’s reliance interests in a patent, which confers valuable property rights in return for the inventor’s public disclosure of his invention. Requiring that invalidity be demonstrated by clear and convincing evidence serves both of these interests by ensuring that the jury has a high degree of confidence before it overturns the PTO’s grant of a patent. Even when evidence suggesting invalidity was not before the PTO, and the administrative-expertise rationale therefore does not apply, the heightened burden of proof furthers the patent holder’s reliance interests, and it is consistent with congressional intent and with this Court’s precedents."
The Pharmaceutical Research and Manufacturers of America (also known as PhRMA) also filed an amicus curiae brief in support of i4i and the clear and convincing evidence standard.
In contrast, a group of 37 law, economics and business professors filed an amicus curiae brief in which they argued that the clear and convincing standard is "a mistake". They wrote that "Deference to previous decisions is appropriate when those previous decisions have a high likelihood of being accurate. But the initial process of patent review today is, unavoidably, often an inaccurate signal, one that doesn’t take account of all relevant information. Deference doesn’t make sense in that circumstance."
Similarly, the Computer and Communications Industry Association (CCIA) wrote in its amicus curiae brief that "Bestowing this enhanced presumption of validity upon granted patents is fundamentally at odds with the Patent Act. Many factors already favor the patent applicant: the statute’s presumption of entitlement, the examiner’s limited and undocumented expertise, the limited scope of the examination process, the mismatch between the examiner and the applicant, and the examiner’s incentives to grant the application. In light of these factors, the Federal Circuit’s extraordinary deference to a highly constrained agency process is without basis."
The CCIA added that "By making questionable patents hard to invalidate, the clear-and-convincing standard creates an artificial incentive to apply for patents. It induces more applications and more patents, especially weak, marginal, and invalid patents. This unmerited legal leverage dilutes and undermines the value of genuine inventions. It distorts market competition, discourages the challenging of invalid patents, and promotes opportunism."
See also, amicus curiae brief of Google, Verizon, Comcast, Dell, HP, the Consumer Electronics Association (CEA), and other companies and groups, which urges the Supreme Court to adopt the preponderance of the evidence standard.
4/15. Apple, Inc. filed a complaint [373 pages in PDF, 10 MB] in the U.S. District Court (NDCal) against Samsung Electronics Co., Ltd., and U.S. subsidiaries, alleging patent infringement (35 U.S.C. § 271), trade dress infringement (15 U.S.C. § 1125(a) and 15 U.S.C. § 1114), trademark infringement (15 U.S.C. § 1114), and various California state statutory and common law claims.
Apple alleges that Samsung's Galaxy line of mobile phones and the Galaxy Tab computer tablet infringe patents, trade dress, and trademarks related to Apple's iPhone and iPad.
The complaint states that "Instead of pursuing independent product development, Samsung has chosen to slavishly copy Apple's innovative technology, distinctive user interfaces, and elegant and distinctive product and packaging design, in violation of Apple's valuable intellectual property rights."
It adds that "Samsung has made its Galaxy phones and computer tablet work and look like Apple's products through widespread patent and trade dress infringement. Samsung has even misappropriated Apple's distinctive product packaging."
Apple seeks compensatory damages, treble damages, and injunctive relief.
This case is Apple, Inc. v. Samsung Electronics Co., Ltd., et al., U.S. District Court for the Northern District of California, D.C. No. CV-11-1846-LB. Apple is represented in this action by the law firm of Morrison & Foerster.
4/11. Paul Ceglia filed an amended complaint [PDF] in the U.S. District Court (WDNY) against Mark Zuckerberg and Facebook, Inc.
The complaint alleges that back in 2003 Ceglia and Zuckerberg entered into an agreement that created a general partnership between Ceglia and Zuckerberg for the development and commercialization of "The Face Book".
Ceglia seeks a declaratory judgment against Zuckerberg that they entered into an agreement that "created a General Partnership under New York Partnership law, of which Ceglia was a 50% owner".
Ceglia also seeks a declaratory judgment against Zuckerberg and Facebook that Ceglia is "entitled to receive 50% of the total equity interest in Facebook, Inc. received by, and promised to Zuckerberg, including, but not limited to, stock, stock options and restricted stock units".
The seven count complaint also pleads breach of fiduciary duty against Zuckerberg, constructive fraud against Zuckerberg, actual fraud against Zuckerberg, breach of contract against Zuckerberg, and breach of the implied covenant of good faith and fair dealing against Zuckerberg.
4/15. Dan Hesse, CEO of Sprint Nextel, stated at an event in San Francisco at the Commonwealth Club of California that AT&T's acquisition of T-Mobile USA would stifle competition and innovation in the wireless industry.
Jim Cicconi, AT&T's Senior Executive Vice President-External and Legislative Affairs, responded in a release that Hesse's "comments today about AT&T's merger with T-Mobile are way off base. They're also totally at odds with his own past statements" about the competitiveness of the wireless industry.
Cicconi stated that "Given that Sprint is a major competitor to AT&T in the hyper competitive wireless market Mr. Hesse describes, no one should be surprised that they would oppose this merger. But it is self-serving for them to argue that the highly competitive wireless market they cited only months ago is now threatened by the very type of transaction they seemed prepared to defend previously."
4/14. President Obama nominated Robert Zimmer to be a member of the National Science Foundation's (NSF) National Science Board. See, White House news office release and release. He is a mathematician, and President of the University of Chicago.
4/15. The New America Foundation (NAF) hired Thomas Gideon and Seeta Gangadharan to work in its Open Technology Initiative (OTI). See, NAF release.
4/14. The Government Accountability Office (GAO) released a report [13 pages in PDF] titled "Employment Verification: Agencies Have Improved E-Verify, but Significant Challenges Remain".
Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [46 pages in PDF] regarding TV band rules and incentive auctions. The FCC adopted and released this item on November 30, 2010. It is FCC 10-196 in ET Docket No. 10-235. See, notice in the Federal Register, February 1, 2011, Vol. 76, No. 21, at Pages 5521-5537. See also, story titled "FCC Adopts NPRM on TV Band Rules" in TLJ Daily E-Mail Alert No. 2,168, December 4, 2010.
Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [158 pages in PDF] regarding video description rules. This would reinstate and modify the video description rules adopted by the FCC in 2000, and subsequently vacated by the U.S. Court of Appeals, pursuant to S 3828 [LOC | WW], the "Twenty-First Century Communications and Video Accessibility Act of 2010" (CVAA), signed into law on October 8, 2010, and S 3304 [LOC | WW], at Title II, Section 202. The FCC adopted this item on March 2, 20111, and released the text on March 3, 2011. It is FCC 11-36 in MB Docket No. 11-43. See, notice in the Federal Register, March 18, 2011, Vol. 76, No. 53, at Pages 14856-14871.
Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding implementation of S 30 [LOC | WW], the "Truth in Caller ID Act. This statute prohibits caller ID spoofing, but only if the purpose is to defraud or cause harm. See, stories titled "Obama Signs Truth in Caller ID Act" in TLJ Daily E-Mail Alert No. 2,187, December 23, 2010, and "House Passes Truth in Caller ID Act" in TLJ Daily E-Mail Alert No. 2,180, December 16, 2010. The FCC adopted and released this NPRM on March 9, 2011. It is FCC 11-41 in WC Docket No. 11-39. See, notice in the Federal Register, March 23, 2011, Vol. 76, No. 56, at Pages 16367-16375.
Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding the payment of filing fees by winning bidders in auctions of construction permits in the broadcast services. The FCC adopted this NPRM on February 28, 2011, and released the text on March 3, 2011. It is FCC 11-21 in GEN Docket No. 86-285. See, notice in the Federal Register, April 1, 2011, Vol. 76, No. 63, at Pages 18137-18138.

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