Source: https://patentlyo.com/patent/2007/09
Timestamp: 2019-04-26 09:49:14+00:00

Document:
The following table lists the patents asserted most often in patent infringement litigation since January 2005.
Patent No. 5,790,512. Asserted by electronics giant Koninklikje Philips in 29 separate lawsuits.
Patent Reissue No. 38,014. Asserted by Mag Instruments in 29 separate lawsuits.
Patent No. 5,313,229. Asserted by F&G Research in 24 separate lawsuits.
Patent No. 4,792968. Asserted by Ron Katz in 19 separate lawsuits.
Patent No. 6,766,304. Asserted by Trading Technologies in 17 separate lawsuits.
Patent No. 5,352,605. Asserted by Monsanto in 17 separate lawsuits.
Patent No. 6,241,739. Asserted by Altair Instruments in 16 separate lawsuits.
Interestingly, only two of these patents appear to be controlled by non-practicing entities.
The Buszard application is directed to a flame retardant composition that includes a flexible polyurethane foam base. The PTO Patent Appeal Board rejected Buszard’s patent application as anticipated by a prior patent.
Interestingly, Judge Newman’s claim construction intertwines analysis of the claim language with analysis of the scope of prior art disclosure. Although the PTO may give an applicant’s claims broad interpretation — the scope of the prior art cannot extend beyond its disclosure.
Judge Prost dissented. In Prost’s view, any ambiguities in patent claim terms should be construed against the patentee during prosecution of the patent. That approach avoids the usual ‘guessing game’ of Phillips-style claim construction and it is quite easy for an applicant to make clarifying amendments to claim language.
Peter Detkin is Intel’s former director of patents, licensing, and litigation who coined the term patent troll. More recently, Detkin co-founded Intellectual Ventures. IV’s product is intellectual property and IP licenses. The company buys patents from small companies and individual inventors and also files patents on its own inventions.
Detkin has an interesting new article in John Marshall’s RIPL journal titled “Leveling the Patent Playingfield.” In the article, Detkin does a great job of explaining IV’s role in the process.
Normally small players have great difficulty simply avoiding being marginalized by major players. One part of IV’s business is to aggregate the patent rights held by small players and then use its newfound size and power to license those portfolios.
The article is an interesting and quick read (especially for a law review).
Ford Motor Company owns dozens of design patents covering various aspects of its vehicle designs. D496,890, for example, covers a vehicle grille; D493,552 covers a vehicle head lamp; D503,135 covers a bumper lower valance; and D496,615 covers a side view mirror. In 2005, Ford initiated a Section 337 action before the International Trade Commission (ITC) asking for an exclusion order against various auto parts importers whose imports violated the Ford design patents. For the most part, the accused parts are used to repair post-crash vehicles.
An administrative law judge (ALJ) found that the majority of the asserted patents were valid and infringed, although some patents were invalid. The ITC then issued an order to exclude importation of the unlicensed repair parts.
Repair doctrine: Over the years, courts have created a non-statutory doctrine of permissible repair. Under the doctrine, post-sale repairs made to a patented object are not considered actionable. On the other hand, reconstruction of the patented object will be actionable as an unlicensed “making” of the invention.
Although interesting, the repair doctrine does not apply here. The accused infringers are not repairing anything — rather, they are importing replacement parts that on their own are infringing.
Appeal: The case, captioned as Ford v. ITC, 07–1357, is now on appeal at the CAFC — A decision is expected summer 2008. The critical question for Ford — will the patents pass the CAFC’s dreaded points-of-novelty test?
Takeda’s priority date stretches back to 1974 when the company filed a Japanese patent application disclosing a set of anti-microbial agents known as cephem compounds. The first US patent did not issue until 1988 (‘606 patent). In 1996, Takeda’s ‘216 patent issued – also reaching back to the 1974 priority date. The ‘216 patent claims a process of compounds claimed in the earlier ‘606 patent — those process claims were not, however, added until 15 years after the priority date.
In particular, the Board held that a process patent with an extended patent term will be invalid for double-patenting “where (1) the claimed method for making the [compound] is described in the [original] patent and (2) there is no credible alternative method for making the [compound] which does not involve an infringement of the method patent?” The Board also faulted Takeda for its 15 year delay in presenting the new claims.
Takeda appealed the BPAI rejection to the DC District court. That court granted summary judgment — ordering the PTO to issue a reexamination certificate.
Only way to make a previously patented product: Takeda submitted an unrebutted declaration that convinced the court that there were multiple ways to create the cephem compounds. Thus, the PTO’s conclusions regarding the lack of alternative methods were factually incorrect. In its decision, the court rejected the PTO’s argument that the alternative methods must have existed as of 1974. Rather, the court held that those methods may be shown in subsequent technological advances.
Double Patenting Based on Delay: The court went on to find that a patentees delay in pursuing claims could never, on its on, be grounds for a double patenting rejection. Rather, the grounds for double patenting always primarily rest on the lack of patentable differences between the two inventions.
Judge Dyk wrote the majority opinion. Each of the five substantive sections of the opinion garnered two votes. Chief Judge Michel joined Parts I and V while Judge Gajarsa joined Parts II-IV. Both Judges Michel and Gajarsa filed additional dissenting opinions.
Earlier in 2007, Vonage was found to infringe three of Verizon’s IP Telephony patents. The verdict awarded $58M in damages along with an ongoing 5.5% royalty rate and an injunction against further infringement.
On appeal, the CAFC affirmed that two of the patents were valid and infringed and that an injunction had been properly granted. As to the third patent (the ‘880 patent), the CAFC vacated and remanded after finding claim construction errors, potential errors in application of the obviousness doctrine under KSR, and errors in determining injunctive relief under eBay. The damage award was also vacated because the jury verdict did not apportion damages according to the various patents.
Chief Judge Michel would have affirmed across the board. And, interestingly, he would not have disturbed the $58M damage award even though one of the three patents was not infringed.
Judge Gajarsa found claim construction errors in one other Verizon patent, but could not convince a colleague.
Sprint v. Vonage (E.D.Kan. 2007) On September 25, a Kansas City jury found that Vonage also infringes a patent held by Sprint Nextel — tacking on another 5% in royalty revenue. [LINK].
Vonage stock has lost 90% of its value since Sept 2006.
The claimed “means for causing” is a means plus function limitation.
The specification contains no structure linked to the claimed means.
Therefore, the claim is invalid as indefinite under 35 U.S.C. 112 p2.
The patentee pointed to a structure in the specification that could serve as the claimed “causing means.” That approach failed because the structure must be “linked” within the specification to the claim language.
In recent history, a more accurate version of this quid pro quo may be written as follows: The quid pro quo for using a means-plus-function limitation is that the patent claims will either be found invalid or narrowly construed.
The CAFC had no reason to issue this as a precedential opinion because it almost identically follows the recent Biomedino case: Biomedino, LLC v. Waters Technologies Corp., 490 F.3d 946, 950 (Fed. Cir. 2007).
Adenta GMBH v. OrthoArm and American Orthodontics (Fed. Cir. 2007).
OrthoArm patented a new type of bracket for holding orthodontic braces.
In 2001, OrthoArm assigned patent rights to American Orthodontics (in a settlement agreement). American agreed to pay an ongoing royalty of 4%.
American distributes Adenta’s products — in a contract between American and Adenta, the German company began to share royalty payments.
Adenta threatened to stop paying its share of the royalties and American responded with threats.
Adenta then sued for declaratory judgment of invalidity.
Declaratory Judgment Jurisdiction: In MedImmune, the Supreme Court made clear that declaratory judgment jurisdiction is much broader than allowed by CAFC precedent. In particular, the court rejected the CAFC’s requirement that a DJ plaintiff show a “reasonable apprehension of suit.” Under the court’s newly developed precedent, Article III jurisdiction will arise when a patentee asserts its patent rights against another party’s activity or planned activity. No actual infringement is required nor is any cessation of royalty payments.
Here, Adenta brought forth five witnesses to testify that the invention had been shown at the trade show. In addition, Adenta produced a letter from a German attorney directing that the US application be filed quickly because of the trade show exhibit. Despite the patentee’s attempts to discredit the evidence, the CAFC found that the corroboration threshold was met and that the fact finder had not committed clear error in evaluating the totality of the evidence.
Sham Litigation: There is some indication that this was a sham litigation between Adenta and American. Although American owns the patent, it was required to continue to pay royalties to OrthoArm under their original settlement agreement. The CAFC, however, refused to hear that argument.
Warner Lambert sells its drug gabapentin under the trade name Neurontin to treat epilepsy and as well as post-shingle nerve pain. The related patent covers a method of making gabapentin that is stable enough to work well for pharmaceutical use. Using tools of the Hatch-Waxman Act, Warner Lambert filed this patent litigation to keep generic versions of the drug off the market. After years of litigation, the district court granted the generic manufacturers summary judgment of noninfringement.
Summary Judgment Basics: On appeal, the CAFC reversed — finding that the NJ District Court had been too quick to discount Warner Lambert’s expert witness testimony. In particular, the patentee’s expert had performed a test on Teva’s samples and determined that the acidic content of those samples fell within the scope of the claims. On summary judgment, “all reasonable inferences” must be weighed in favor of the non-moving party — here, those inferences lead to the conclusion that Warner Lambert’s expert might be correct and that the summary judgment was improperly issued.
Claim Construction: The CAFC also affirmed that a claimed “anion of a mineral acid” is properly defined as an “anion derived from a mineral acid” based on the plain language of the claim.
A jury will likely now decide whether the generic manufacturers have done enough to avoid infringement.
Typically, generic manufacturers stay off the market throughout patent litigation in order to avoid the potential risk associated with infringement damages. Here, however, Teva began selling gabapentin in 2004 and several other generic manufacturers quickly followed.
Mr. Haug of Frommer Lawrence Haug; Steven Lee of Kenyon & Kenyon; and Richard Basile of St. Onge represented the various generic manufacturers.
Eran makes “leakproof” rain gutter covers. Several Eran employees were fired during the summer of 2005. Those individuals reorganized as GPI — a potential competitor to Eran. As a preemptive strike, Eran mailed letters to its distributors and contractors noting that GPI’s planned to sell a competitive product that infringed Eran’s patent.
On appeal, the CAFC reversed — finding that the preliminary injunction had been improperly granted.
The party seeking a preliminary injunction has the burden of showing: “(1) a reasonable likelihood of success on the merits; (2) irreparable harm; (3) a balance of hardships in its favor; and (4) public interest in favor of the injunction.” Once granted, a preliminary injunction will only be vacated for clear error.
Injunction against Communications: Based on First Amendment rights and 35 U.S.C. § 287 (notice), injunctions relating to communications must pass a higher hurdle. In particular, “bad faith” is required in order to bar communications.
In Globetrotter Software, the CAFC held that “bad faith” communications require “objectively baseless claims.” Notably, these determinations are based on federal law that preempt any state laws that may be less strict.
Here, the CAFC found that Eran’s statements could not be “objectively baseless” since the lower court had noted the real potential that Eran would eventually succeed on the merits of the case.
Hovey Williams of Kansas City, Missouri represented the patentee, Eran.
Kirton & McConkie of Salt Lake City, Utah represented the accused infringer.
Nuijten’s patent application claims a signal containing a ‘watermark’ without being tied to a specific type of signal or any technology.
Both applications have been denied by the Federal Circuit under 35 U.S.C. Section 101 for their failure to claim patentable subject matter.
The scope of patentable subject matter is defined by Section 101 as any “new and useful process, machine, manufacture, or composition of matter.” Any patent claim must fall within at least one of these categories. Further limiting these categories is our precedential history that not every new and useful process constitutes patentable subject matter. See, for example, Flook & Benson. In particular, the Supreme Court has noted that a process claim reciting an algorithm must either be (1) tied to a machine or (2) transformative of some composition of matter or device. Flook & Diehr.
Comiskey: The Comiskey method of claim 1 admittedly does not require a machine, but it does require interaction with a ‘document.’ The reference to a document, however, was not enough to allow the “mental process” claim to be treated as legitimate.
Some of Comiskey’s claims arguably require a computer to operate through “modules.” That claim construction transforms those claims to be patentable subject matter. This means that software remains patentable subject matter if a computer limitation is a proper part of the claim.
Section 101 is Safe: Comiskey appear to reinstate something akin to the USPTO’s ‘technological arts’ requirement that had been eliminated by the Lundgren decision. For Comiskey, recitation of a microprocessor as a limitation of the claims was sufficient to overcome the patentable subject matter issue. Notably, this is a rule of formality that, in most instances, can be followed without substantively reducing claim scope. Under Comiskey, there is no requirement that the technical link be something novel or non-obvious.
The implicit holdings here: (1) evidence of secondary considerations do not apply to portions of an invention that are not considered “patentable subject matter;” and (2) during nonobviousness analysis, any portion of an invention that constitutes nonstatutory subject matter will be considered de facto obvious.
Process: Process is defined in Section 100 as a “Process, Art, or Method.” The ‘art’ term appears on its face different than a typically process — especially based on the constitutional statement of “useful arts.” However, the CAFC refused to expand the meaning of process to include items that do not require an action. Thus, a signal is not a process.
Machine: The Supreme Court has defined a machine as “a concrete thing, consisting of parts, or of certain devices and combination of devices.” Burr (1863). Under this definition, a signal is not a machine.
Manufacture: The court limited a manufacture to an “article” produced by man. According to the court, an ‘article’ is not transient and cannot exist in a vacuum — both qualities of a signal. Thus, a signal is not a manufacture.
Composition of Matter: A transient electric signal is not a “chemical union, nor a gas, fluid, powder, or solid.” Therefore, a signal is not a composition of matter.
Failing to fit within a predefined category, the only conclusion is that a signal is not a patentable subject matter.
Gangrene Treatment: In the political world of the courts, this case might be seen as the CAFC’s gangrene treatment — where the Supreme Court is the disease and patent law jurisprudence is the patient. Several toes have already been lost, and the CAFC is cutting off a foot to prevent the disease from spreading any further.
Morse Code: One important statutory subject matter case is that of O’Reilly v. Morse (1853) – invoving the patenting of Morse code. In that case, the Supreme Court invalidated some claims as overbroad, but found that Morse’s claim to a “system of signals” to be patentable as an ‘art.’ The CAFC, of course, does not overrule Morse, nor does it adequately explain how Morse’s patent would fit within our modern conception of the four categories.
The usual rule is that direct infringement occurs only when a single actor performs “each and every element” of an asserted claim. Likewise, inducement requires proof of underlying single-actor direct infringement. Under a doctrine akin to agency, all actions ‘controlled’ by the single actor are considered to be performed by the single actor. Thus, courts have long held that you cannot avoid liability by simply “having someone else carry out one or more of the steps” on your behalf.
The CAFC’s concern, of course is that allowing this type of joint infringement would greatly increase potential liability of many many companies. For instance, here, BMC would like to hold ATM networks liable even though their actions do not involve any novel part of BMC’s invention. Without any controlling party, BMC’s claim of infringement fails.
As part of its justification, the court cited Mark Lemley’s divided infringement article. In that article, Lemley argues that patent drafters can avoid most potential joint infringement problems by drafting claims that focus on one party at a time.
The doctrine of control is certainly not as strict as typical agency doctrine. And, in this opinion the court gives some positive language to capture bad behavior. For instance, the court noted approvingly that district courts have held parties liable for who ‘mastermind’ a scheme of contracting-out steps of a patented process. As a strict liability claim, the CAFC is correct to avoid undue expansion of the class of potential defendants. However, the hole created by the CAFC is potentially quite large — I have proposed a new cause of action for conspiratorial infringement that would not require a single controlling entity, but would require a mens rea requirement similar to that of inducement.
Cross Medical Products, 424 F.3d at 1311 (rejecting patentees’ efforts to combine the acts of surgeons with those of a medical device manufacturer to find direct infringement of an apparatus claim).
Applied Interact, LLC v. Vermont Teddy Bear Co., Inc. 2005 WL 2133416 (S.D.N.Y.,2005), the district court noted that infringement by separate entities requires “some connection” between the entities.
Free Standing Stuffer, Inc. v. Holly Dev. Co., 187 U.S.P.Q. 323 (N.D. Ill. 1974), requires a “sufficient connection to, or control over” third party entities performing some of the elements.
Cordis Corp. v. Medtronic AVE, Inc., 194 F. Supp. 2d 323 (D. Del. 2002) (requiring close relationship between defendant and the doctors performing part of the patented process).
Shields v. Halliburton Co., 493 F.Supp. 1376 (W.D. La. 1980) (finding defendants liable for infringement based on the combined actions of two entities).
Sriranga Veeraraghavan, Joint Infringement of Patent Claims: Advice for Patentees, 23 Santa Clara Computer & High Tech L.J. 211 (2006).
In bankruptcy, AHC’s title to its patent transferred to a liquidating trust, AHLT. A second trust, GUCLT, was given the right to several causes of action, including patent infringement litigation (generally called Estate Litigation). GUCLT was not granted a license to make or use the patent.
Through its trustee, GUCLT sued Microsoft for infringing Patent No. 6,122,647 – a patent relating to dynamic generation of hypertext links. Microsoft was awarded summary judgment on the merits. On appeal, GUCLT had trouble even getting a hearing.
The patent title holder has standing to sue because infringement injures the patent holder’s right to exclude.
An exclusive licensee usually has standing to sue because the infringement injures the licensee’s ‘exclusivity.’ When the exclusive licensee sues, the patent title holder must be joined as a co-plaintiff.
A non-exclusive licensee usually does not have standing because they have no right to stop others from making or using the invention.
A non-licensee also has no standing to sue.
Rule of Practice: A non-title-holder must be granted an exclusive license as well as full litigation rights in order to have standing to sue for patent infringement.
I am a voting ‘academy member’ of the Hall of Fame along with a host of better qualified intellectual property leaders.
Patently-O continues to grow with over 280,000 visits in August 2007. (Double last-year’s numbers). Please let me know when you run across some interesting patent law news for the site!
Patently-O has now been consumed by a Missouri Limited Liability Corporation, Patently-O, LLC.
Part of the ‘business’ transition includes site sponsorship. The Chicago Intellectual Property Firm MBHB LLP (my former law firm) has become the first major sponsor. Current MBHB attorneys author two other well respected IP related blogs: The OrangeBookBlog and PatentDocs. Thanks MBHB!
TGIP has won a jury verdict against AT&T for $156 million. The asserted patents – U.S. Patent Nos. 5,511,114 and 5,721,768 — both involve calling card processing. The jury also reportedly decided that the infringement was willful – District Court Judge Ron Clark will now decide whether to enhance damages based on the finding. (Judge Clark will also rule on JNOV motions).
TGIP appears to be a company that run by Charles Stimson, one of the named inventors. Interestingly, neither patent show-up in the PTO assignment database as assigned to TGIP. Stimson was formerly the president of “Call Processing, Inc.,” which is listed as an assignee (but not a plaintiff). In the late 1990’s CPI sued several companies for infringing the same patent. That case was dismissed without prejudice.
Verizon has reportedly settled with TGIP for an undisclosed sum. Other companies that (likely) settled include: IDT, DFTS Interactive, US South, Pre Solutions, Bell Atlantic, and reportedly MCI.
How long does a BPAI appeal take?
In the first two weeks of September 2007, the Board of Patent Appeals and Interferences released over one hundred opinions. I looked at the file wrapper histories of thirty of these recent BPAI decisions to get some picture of the timing of BPAI appeals.
On average it took just under 18 months (542 days) from the filing of the appeal brief until a decision was reached by the BPAI. The mean hides a wide range of delay: From a minimum of 9 1/2 months to a maximum of 44 months. (Standard Deviation 255).
Most of the time delay is not attributable directly to the BPAI. Rather, most of the delay occurs between the date that the appeal is filed and the date that the case is submitted to the BPAI. On average, it took about 11 months (328 days) to ‘complete briefing.’ Typically, that time period involves the applicant’s brief; followed by an examiner’s answer; and finally a reply brief. Once the case is submitted to the BPAI, the average decision time was seven months (214 days).
If you win an appeal, the Examiner may reopen prosecution with an additional rejection, although the more common approach is to issue a notice of allowance.
Based on this information, you can advise clients that an appeal – pushed through to the end – takes an average of 18 months, but that there is a wide variance. As I noted earlier in 2007, only fewer than of appeals are pushed-through to the end. [Link]. In many cases, Examiners withdraw rejections or applicants file RCE’s with new claims. These calculations also do not include time delays associated with BPAI rejections for improper appeal brief form. Instead, I only began counting once a ‘proper’ brief was filed. In an earlier study, I showed that approximately 25% of appeal briefs are rejected on procedural grounds as either defective or incomplete. [Link].
The prosecution history of a patent application typically includes at least two substantive rejections prior to the appeal brief. In this sample, the average application had been in process for over three years (39 months) before the appeal brief was filed.
As with essentially every other area of patent law, we can expect that BPAI timing and results will vary by technology area.
McZeal v. Sprint Nextel (Fed. Cir. 2007).
McZeal’s pro se patent infringement complaint was dismissed for failure to state a claim. On appeal, the CAFC reversed – finding that the complaint was sufficient.

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