Source: http://www.jdsupra.com/post/documentViewer.aspx?fid=49f089e5-4bef-495d-bb79-233d7b407ba0
Timestamp: 2013-05-25 12:36:31
Document Index: 732371465

Matched Legal Cases: ['§ 271', '§ 271', '§ 271', '§ 271', '§101', '§101', '§101', '§101', '§102']

Please see full newsletter below for more information. This e-mail and any attachments are not intended to be and should not be relied upon as legal advice. For additional information, visit www.kslaw.com. 1 The en banc Court Speaks On Divided Infringement, But Not With One Voice. Adam Conrad Akamai Technologies, Inc.v. Limelight Networks, Inc. and McKesson Technologies, Inc. v. Epic Systems Corp. (Fed Cir, en banc 2012). http://www.cafc.uscourts.gov/images/stories/opinionsorders/09-1372-1380-1416-141710-1291.pdf Prior to the recent en banc decision on divided infringement of method claims, the court had adopted a “single-entity rule,” under which no liability for direct infringement would be found unless a single actor performed all steps of a method claim or multiple participants performed the steps as part of a contract or agency relationship that is directed or controlled by a single “mastermind.” As a result of the rule, induced infringement under 35 U.S.C. § 271(b) required a predicate act of direct infringement by a single entity, in this case, two or more parties operating under some type of a formal arrangement. The court in Akamai, by a slim 6-5 majority, took divided infringement in a new direction. The court overruled the single-entity rule and held that cases of divided infringement can be treated as induced infringement under section 271(b). Under the new interpretation, it is sufficient to show that the inducing party knew of the claimed method and either induced others to perform the entire method or induced others to perform whatever steps the inducer itself did not perform. In that case, the inducing party alone will be liable for infringement, October 2012 News From the Bench The en banc Court Speaks On Divided Infringement, But Not With One Voice. Can Recent Conflicting Decision On The Patent Eligibility of Business Methods Be Reconciled? Two More Post-Therasense Cases on Alleged Inequitable Conduct, Two More Nails in the Coffin. Patentee Seeking Broadening Reissue Bitten By the Recapture Doctrine. If It Doesn’t Compute, You Must Refute. How Not to Calculate Infringement Damages. PATENT Notes In This Issue U.S. Patent Practice Potential Subject Matter Limits on the Grace Period in 35 U.S.C. 102(b)(1)(B) of the AIA. Foreign Patent Practice PCT Changes Resulting From the AIA. Clean-Tech Bulletin Recent Clean-Energy Patents. K&S IP Highlights People in the News: Boyd Cloern, Bill Abrams, Katie McCarthy. Trial News: Google v. Oracle. Quiz -Identify the IP Case in Rap Disguise. Upcoming Events Bill Abrams (Silicon Valley) serves on the Advisory Board of the Center for the Legal Profession at Stanford Law School, and will be moderating a discussion with Steve Harper of Northwestern Law School on October 1 on large law firm management. This e-mail and any attachments are not intended to be and should not be relied upon as legal advice. For additional information, visit www.kslaw.com. 2 and it is not necessary to show that the third party or parties required to complete the infringing activity had any contractual or agency relationship with each other or with the inducing party. The majority’s approach simplifies the patentee’s task in proving liability for divided infringement, and allows for actions against infringers that would not have been possible under the single-entity rule. In the eyes of four dissenting judges, however, those advantages do not justify abandoning the single-entity interpretation of 35 U.S.C. § 271(a). A second dissent from Judge Newman attempts to solve the “single-entity rule” in a more basic way. She would restore infringement under either § 271(a) or § 271(b) “to its status as occurring when all of the claimed steps are performed, whether by a single entity or more than one entity, whether by direction or control, or jointly, or in collaboration or interaction.” Can Recent Conflicting Decisions On the Patent Eligibility of Business Methods Be Reconciled? Peter Dehlinger CLS Bank International v. Alice Corporation PTY, LTD (Fed Cir 2012); http://caselaw.findlaw.com/us-federalcircuit/1605572.html Bancorp Services, LLC v. Sun Life Assurance Company of CA (Fed Cir. 2012). http://www.cafc.uscourts.gov/images/stories/opinionsorders/11-1467.pdf Two recent business-method cases from the CAFC give conflicting guidance on how computer-aided process inventions should be viewed under §101. The inventions in both cases are business methods aimed at minimizing risk in financial transactions; a computer plays a similar role in both methods; and the court applied the same ‘machine” prong and the “abstract idea” tests in both analyses. Despite these similarities, the court found the business method in CLS Bank to be patent eligible, but disqualified the invention in Bancorp Services under §101. Can the conflicting decisions be reconciled, or should the court have arrived at the same result in both cases? A possible answer is suggested by CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (Fed. Cir. 2011), where the court relied on the “mental processes” exclusion to disqualify the business-method invention at issue. The “mental processes” exclusion finds ample support in Supreme Court decisions on §101 issues, but has receded in importance in the post-Bilski era. It’s an easy exercise to show that the claimed business methods in both CLS Bank and Bancorp Services can be carried out by mental processes alone, disqualifying both business methods under §101. Two More Post-Therasense Cases On Alleged Inequitable Conduct, Two More Nails in the Coffin. John Harbin Golden Hour Data Systems, Inc. v. emsCharts, Inc., et al., (E.D. Tex. 2012); http://law.justia.com/cases/federal/districtcourts/texas/txedce/2:2006cv00381/98885/386 1st Media v. Electronic Arts, (Fed. Cir. 2012). http://www.cafc.uscourts.gov/images/stories/opinionsorders/10-1435.pdf The patentee in Golden Hour, failed to submit a brochure that described features of the claimed invention, initially rendering the asserted patent unenforceable for inequitable conduct. On rehearing, post-Therasense, the Circuit Judge reversed the earlier decision, reasoning that the claimed method required a significant body of programming effort that, under Federal CircuitThis e-mail and any attachments are not intended to be and should not be relied upon as legal advice. For additional information, visit www.kslaw.com. 3 standards, could not be enabled by a mere bulletpoint brochure. Since the brochure lacked enablement, it would not have affected the PTO’s decision to grant the claims in issue under the Therasense ‘but-for’ test. And in 1st Media, the Federal Circuit drove another nail in the coffin. The patent-at-issue was one of a family of patents prosecuted around the world. The district court found inequitable conduct based on the failure of the inventor and patent attorney to cite three references in the U.S. prosecution that had resulted in rejection of foreign applications. Although the district court found the patentee’s explanations unpersuasive, the Federal Circuit held that the evidence did not meet the high “deliberate decision to withhold” standard of Therasense. The infringer bears the burden of proving such a deliberate decision by clear and convincing evidence, the court held, and the proof cannot be inferred from knowledge and materiality. “[I]t is not enough to argue carelessness, lack of attention, poor docketing or cross-referencing, or anything else that might be considered negligent or even grossly negligent.” Patentee Seeking Broadening Reissue Bitten By the Recapture Doctrine. Peter Dehlinger Greenliant Systems, Inc. v. XICOR LLC., (Fed. Cir. 2012). http://caselaw.findlaw.com/us-federalcircuit/1609893.html The claim limitation at issue in a broadening reissue was a product-by-process limitation that in the original patent reads: said silicon dioxide layer being formed by low pressure chemical vapor deposition comprising the use of tetraethylorthosilicate [TEOS.] The claims in the reissue application omitted the comprising the use of [TEOS] limititation, but otherwise duplicated claims 1 and 4 of the parent patent. The court found the broadened claims invalid under the recapture doctrine, particularly in view of statements made by and to the Board of Appeals in the original patent. The patentee’s “arguments clearly and unmistakably represented to the examiner and the Board that TEOS was a necessary component of the deposition process that imparted the distinct structural characteristics upon [the applicant’s] claimed tunneling oxide layer.” The fact that the arguments were made was sufficient to result in surrender; it didn’t matter that the PTO may not have relied on the arguments in issuing the patent or that the applicant's arguments may have been wrong. If It doesn’t Compute, You Must Refute. How Not to Calculate Infringement Damages. John Harbin and Joseph Eng Whitserve, LLC v. Computer Packages, Inc., (Aug. 7, 2012); http://caselaw.findlaw.com/us-federalcircuit/1609206.html?DCMP=NWL-pro_ip Laserdynamics, Inc. v. Quanta Computer, Inc., et al., (Fed. Cir. 2012). http://www.cafc.uscourts.gov/images/stories/opinionsorders/11-1440-1470.pdf In a split decision in Whitserve, LLC, the Federal Circuit affirmed the judgment of infringement but vacated and remanded for a new damages trial, continuing a trend of closer scrutiny of patent damages awards. The patentee improperly based its royalty rate on a proposed, but unaccepted, license; and used two lump sum licenses without explaining how to derive a royalty rate from them. The court found that the analysis of the Georgia Pacific royalty factors by the patentee’s damages expertThis e-mail and any attachments are not intended to be and should not be relied upon as legal advice. For additional information, visit www.kslaw.com. 4 was insufficient, because the expert “did not explain how much each factor affected the rate …. Expert witnesses should concentrate on fully analyzing the applicable factors, not cursorily reciting all fifteen. And, while mathematical precision is not required, some explanation of both why and generally to what extent the particular factor impacts the royalty calculation is needed.” A few weeks later, on August 30, the Federal Circuit continued this stricter scrutiny. In Laserdynamics, Inc., the court considered a patent concerning an optical disc discrimination method used in laptop computers. With respect to whether a feature drives demand for an entire product, such that the entire market value rule would apply, the court held that: It is not enough to merely show that the disc discrimination method is viewed as valuable, important, or even essential to the use of the laptop computer. Nor is it enough to show that a laptop computer without an ODD practicing the disc discrimination method would be commercially unviable. Were this sufficient, a plethora of features of a laptop computer could be deemed to drive demand for the entire product. Id., pp. 25, 26. The court further observed that "it is generally required that royalties be based not on the entire product, but instead on the 'smallest salable patentpracticing unit.'" (Quoting Cornell Univ. v. Hewlett-Packard Co., 609 F. Supp. 2d 279, 283, 287-88 (N.D.N.Y. 2009)). Laserdynamics, supra. at p. 23. Finally, the court rejected the 6% royalty rate proffered by the patentee's expert because it "was untethered from the patented technology at issue and the many licenses thereto and, as such, was arbitrary and speculative.” Potential subject matter constraints on the grace period in 35 U.S.C. 102(b)(1)(B) of the AIA. Peter Dehlinger Section 102(b) of the American Invents Act provides two exceptions to prior-art provisions of 102(a)1: A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if--‘(A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or ‘(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor. Under the interpretation of §102(b)1(B) proposed in the USPTO Examination Guidelines for Implementing the First-to-File Provisions of the AIA, http://www.gpo.gov/fdsys/pkg/FR-2012-07-26/pdf/2012-17898.pdf (published July 26, 2012), the subject matter in the prior disclosure being relied upon under 35 U.S.C. 102(a) [must] be the same ‘‘subject matter’’ as the subject matter publicly disclosed by the inventor before such prior art disclosure for the exception in 35 U.S.C. 102(b)(1)(B) to apply. Even if the only differences between the subject matter in the prior art disclosure that is relied upon under 35 U.S.C. 102(a) and the subject matter publicly disclosed by the inventor before such prior art disclosure are mere insubstantial changes, or only trivial or obvious variations, the exception under 35 U.S.C. 102(b)(1)(B) does not apply. This interpretation leaves little “grace” in the 1-year grace period. An applicant will be able to overcomeThis e-mail and any attachments are not intended to be and should not be relied upon as legal advice. For additional information, visit www.kslaw.com. 5 a later prior-art publication only as to subject matter that was specifically disclosed in its earlier disclosure. Thus, if the applicant discloses A, B, and C within a year of filing, and a later, pre-filing references discloses A, B, C, and D, a claim to A, B, C, and D, would presumably fail under 102(a)(1). The rule, though harsh, is analogous to current practice in the EPO on subject matter support in a claimed priority document: Unless each limitation of a claim in an application finds support in the priority document, the claim will lack novelty over an intervening reference that discloses all of the claim limitations. PCT changes resulting from the AIA. http://www.wipo.int/edocs/pctndocs/en/2012/pct_news_ 2012_09.pdf Link to a PCT bulletin on changes for applicants as a result of the America Invents Act, effective Sept 16, 2012. The bulletin considers the new request and demand forms, modified wording for Administrative Instructions, modified Receiving Office guidelines, and changes regarding ePCT. Recent Clean-Energy Patents. http://www.renewableenergyworld.com/rea/blog/post/20 12/08/clean-energy-patents-at-quarterly-high-1stquarter-clean-energy-patent-growthindex?goback=%2Egde_36507_member_149032989 Link to a Clean Energy Patent Growth Index (CEPGI) report on numbers and types of recent clean-tech patents, and companies leading in patent filings. People in the News: Boyd Cloern, Bill Abrams, Katie McCarthy. Boyd Cloern http://www.kslaw.com/News-and-Insights/NewsDetail?us_nsc_id=5924 Bill Abrams http://www.kslaw.com/News-and-Insights/NewsDetail?us_nsc_id=5819 Katie McCarthy http://www.kslaw.com/News-and-Insights/NewsDetail?us_nsc_id=5925 Trial News: Google v. Oracle. http://www.kslaw.com/News-and-Insights/NewsDetail?us_nsc_id=5737 Quiz, Identify the IP Case in Rap Disguise. [Petitioner] They call me a trader but I’m no Iscariot Don’t look for risk ‘cause I don’t carry it I’m the prophet of profits with a fat bottom line No blowing smoke, no joke, just outshinin’ The secret sauce is on my computer Running toot suite and the tooter the sweeter I’m betting short that the magic survives Betting the court doesn’t take out its knives [Court majority] Bet if you must, just don’t forget The Fed Circ’s M-o-T alphabet Not that we agree with the M-o-T That case-law debris makes us nervous Does a disservice to what we intended Too many times when you have to bend it Keep it simple and if you can stomach exclusion It takes no Rumpole to reach the conclusion This e-mail and any attachments are not intended to be and should not be relied upon as legal advice. For additional information, visit www.kslaw.com. 6 An abstract idea just ain’t gonna do it (Please don’t ask us how to construe it) [Court minority] That’s nice work, the M-o-T trashing The Fed Circ deserved a good thrashing On that news flash we all agree But not that rash abstract idea Talk about wack (we call it like we see it) The world was waiting for a pot to, you know… You gave us squat, and the pot went missin’ Not for us, this false demeanor Thomas Jefferson is our guillotiner Patents and business tricks just don’t mix Has nothing to do with mathematics Hint: case mentioned in second News item above. Contacts Our Intellectual Property Practice Group King & Spalding offers clients a full-service intellectual property (IP) practice that combines proven first-chair trial and business lawyers with true scientific specialists. The firm’s Intellectual Property Practice Group consists of more than 100 IP professionals, including more than 70 lawyers and patent agents with technical degrees, located in our Atlanta, Austin, Charlotte, Houston, New York, Silicon Valley and Washington, D.C., offices. King & Spalding has specialized expertise in Section 337 cases before the International Trade Commission. Unique among firms, we have leading practices in the three disciplines necessary in Section 337 cases: we combine our broad-based patent litigation experience and technical expertise, international trade expertise and expertise in the ITC’s procedures, and a strong governmental relations group. King & Spalding has been involved in some of the largest, most complex and precedent-setting Section 337 cases. About King & Spalding Celebrating more than 125 years of service, King & Spalding is an international law firm that represents a broad array of clients, including half of the Fortune Global 100, with 800 lawyers in 17 offices in the United States, Europe, the Middle East and Asia. The firm has handled matters in over 160 countries on six continents and is consistently recognized for the results it obtains, uncompromising commitment to quality and dedication to understanding the business and culture of its clients. More information is available at www.kslaw.com. The content of this publication and any attachments are not intended to be and should not be relied upon as legal advice, and the views expressed in these notes do not necessarily reflect the views King & Spalding, LLP or any of its attorneys. If you are not currently on our Intellectual Property Practice Group mailing list under your own name, and you would like to join to receive our monthly Intellectual Property Newsletter and to receive notices of future programs and occasional commentaries on new legal developments in the industry, you can make that request by submitting your full contact information to pdehlinger@kslaw.com. Peter Dehlinger Editor /Partner pdehlinger@kslaw.com +1 650 590 0736 John Harbin Partner jharbin@kslaw.com +1 404 572 2595 Ethan Horwitz Partner ehorwitz@kslaw.com +1 212 556 2377 Joseph Eng Associate jeng@kslaw.com +1 212 827 4318 Adam Conrad Associate aconrad@kslaw.com +1 704 503 2569
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