News & Developments

 

On October 1, 2009, new local patent rules adopted by the Northern District of Illiniois became effective. The new local patent rules are now on the court’s website (NDIL website). A press release announcing the adoption of the new rules can be found here.

Importantly, Chief Judge Holderman of the Northern District indicated at a recent bar conference that these rules will affect pending cases. These patent rules are similar to those in the N.D. of California and the E.D. of Texas, but differ in two significant aspects: the N.D. of Illinois patent rules are designed to promote uniformity within the district, not speed (the estimated patent schedule under the new rules is about two years from service of the complaint to the case being ready for trial); and the parties opposing infringement open and close the Markman briefing, which in most cases will be toward the end of fact discovery (see LPR 4.1 through 4.3).

Conversation with the Honorable Ronald Whyte, United States District Judge for the Northern District of California, on Patent Litigation

 

The Patent Subcommittee of the Intellectual Property Litigation Committee of the ABA Section of Litigation invites you to participate in our continuing series of teleconferences with federal trial judges about various aspects of litigating and trying patent cases. Our next call will take place on Wednesday, November 18, 2009 at 4:00 p.m., Eastern Time/1:00 p.m Pacific, and will feature the Honorable Ronald Whyte, of the Northern District of California.

This will be another great opportunity to ask a renowned federal judge questions about the dos and don’ts of patent litigation and trial practice. Judge Whyte will address various topics related to patent litigation and entertain questions submitted by you, the audience, before and during the event.

Judge Whyte has served as a United States District Judge for the Northern District of California since 1992. He has presided over numerous patent cases, and has spoken on many issues relating to patent litigation. In addition, Judge Whyte was a leader in creating the local patent rules that have shaped the Northern District of California’s patent docket.

Please RSVP to Richard A. Kamprath at rkamprath@gmail.com. Once registered, you will receive a confirmation email with the dial-in information and instructions for submitting questions for Judge Whyte. The number of participants is limited, so please register as soon as possible. We anticipate a very exciting exchange of ideas and hope you will join us.

Federal Circuit Clarifies Patent Application Standard

 

The Federal Circuit has clarified that in patent application filings, to protect against double patenting rejections, patent applications must be true divisional applications—filed in response to restriction requirements. Continuation and continuation-in-part applications are not divisional applications. The court recognized that the Manual of Patent Examining Procedure (MPEP) states the United States Patent and Trademark Office (USPTO) might recognize a continuation application as a divisional application—but concluded this recognition does not justify departing from a strict application of the plain language of the patent law, insofar as it affords benefits to divisional applications.

The clarification came in Amgen v. Roche litigation over the recombinant anemia drug erythropoietin (EPO). This litigation has been going on since 2005 when Amgen filed a declaratory judgment action against Roche in the United States District Court for the District of Massachusetts, alleging that Roche’s product, Mircera, if imported into the United States, would infringe five of Amgen’s patents to EPO. Roche asserted that Amgen’s patents were invalid and not infringed. One of the defenses raised by Roche was obviousness-type double patenting of the asserted claims of the ’933, ’422, and ’349 patents over the claims of an earlier issued and now expired patent—U.S. Patent No. 4,703,008. 

Federal Circuit Rejects “Should Have Known” Standard for Proving Intent to Deceive in Trademark Fraud Cases

In re Bose Corp. (Appeal No. 2008-1448)

On August 31, 2009, the Federal Circuit overturned a decision by the USPTO’s Trademark Trial and Appeal Board (TTAB or Board) ordering cancellation of Bose’s WAVE trademark registration for fraud.

Bose filed a renewal application for the WAVE trademark claiming that the mark was in use in commerce on all of the goods recited in the registration—including audio tape recorders and players that were no longer being manufactured or sold by Bose. Instead, these goods were being repaired by Bose under warranty. Bose filed an opposition against an application for the HEXAWAVE trademark, and the applicant counterclaimed for cancellation of the BOSE registration due to fraud committed in the renewal application. The TTAB found that Bose had committed fraud in the renewal application by virtue of the false statement that the mark was in use in commerce with all of the goods and cancelled the WAVE registration.

Rescuecom Corp. v. Google, Inc., 2009 WL 875447

(2d Cir. Apr. 3, 2009)

Various courts have grappled with the issue of whether a search engine’s promotion/sale, or a competitor’ purchase, of a plaintiff’s trademark as a keyword ad trigger qualifies as a “use in commerce” under the Lanham Act. The vast majority of courts facing this issue have found such conduct constitutes “use in commerce.” Many had considered the Second Circuit to be the lone hold-out on the “use in commerce” debate based upon its 2005 decision in the 1-800 Contracts v. WhenU.com, Inc. 414 F.3d 400 (2d Cir. 2005) pop-up advertising case. In its recent decision in Rescuecom, however, the Second Circuit reversed the Rule 12(b)(6) dismissal on the “use in commerce” issue and found Rescuecom’s allegations of keyword infringement sufficient to move forward.

Supreme Court Grants Cert In Bilski Case

On June 1, 2009, the U.S. Supreme Court granted certiorari in an important patent case involving the patentability of business methods. The case, In re Bilski, originated in the U.S. Patent and Trademark Office (PTO) and was the subject of an en banc 2008 decision rendered by the U.S. Court of Appeals for the Federal Circuit. Bilski sought to patent a series of transactions between a commodity provider and market participants in a way that balanced risk. The PTO rejected the patent application on the basis that it was not a “process” as that term is understood in patent law.

House of Representatives Passes a Bill Establishing a Pilot Program for Patent Litigation

The U.S. House of Representatives recently passed a bill that would establish a pilot program designed to enhance the expertise of federal judges in patent cases and improve the efficiency of patent litigation in the federal courts by steering cases to more experienced judges. Under H.R. 628, passed on March 17, 2009 by a vote of 409 to 7, six district courts would be selected from those courts with the largest number of patent cases or that have adopted patent local rules.

Appellate Court Affirms Sanction for Violating Protective Order

John Hutchins, co-chair of the Intellectual Property Litigation Committee, discusses the impact of the Walls v. PHL Associates, Inc. decision on protective order issues in intellectual property cases, in the Litigation News article.

Patent Reform Update

April 30, 2009 – The House Committee on the Judiciary held a hearing on H.R. 1260. The video webcast of the hearing can be accessed here.

April 2, 2009 – The Patent Reform Act of 2009 (S.515) was placed on the Senate Legislative Calendar.  A redline of S.515 showing the April 2, 2009 amendments that were approved by the Senate Judiciary Committee can be accessed here [PDF].

March 6, 2009 – And their off... The Patent Reform Act of 2009 was introduced by the Senate and House Judiciary Committees early last week.  We will see if the third time is truly the charm.  Once again, damages, a first-to-file framework, and expanded reexamination provisions will figure prominently in the upcoming debate.  Notably, in its current form, the legislation does not address inequitable conduct.  Don't be left behind; S.515 and H.R.1260 are available for viewing at http://thomas.loc.gov.

February 26, 2009 – Senate Judiciary Committee Chairman Patrick Leahy recently relayed his intention to introduce a patent reform bill this year. As the patent reform debate heats back up, interested parties are starting to weigh in. Stay tuned for further developments.

Deep Linking: Everyone Does It, but Is It Legal?

By now, users of the World Wide Web are very familiar with the common practice of “deep linking,” which involves providing a link on one website to a specific page or content on another website by bypassing the other website’s home page or main page. Despite the ubiquity of this practice, however, there is still some controversy over its universal legality, as illustrated by two recently filed cases: GateHouse Media v. New York Times Company, and Jones Day v. BlockShopper LLC.

Federal Circuit Grants Mandamus Relief in In re TS Tech USA Corp. et al. for Refusal to Transfer Case from the Eastern District of Texas

On December 27, 2008, the U.S. Court of Appeals for the Federal Circuit issued its decision in In re TS Tech USA Corporation, TS Tech North America, Inc., and TS Tech Canada, Inc [PDF]. In this decision, the Federal Circuit held that the district court “clearly abused its discretion in denying transfer of venue [from the Eastern District of Texas] to the Southern District of Ohio.”

Major Victory for Open Source Software Industry

The remedies available to software licensors are often a make or break issue in litigation over rights to software. A federal court ruling on August 13, 2008 has expanded the scope of copyright infringement remedies for open source software licensors.

Court Limits Patents on Business Methods

On October 30, 2008, the U.S. Court of Appeals for the Federal Circuit issued a rare full-court opinion that may limit the ability of companies to obtain patents on methods of doing business. The appeal was from the U.S. Patent and Trademark Office (PTO), which had rejected Bernard Bilski’s patent application for a method of managing consumption risk. Bilski sought to patent a series of transactions between a commodity provider and market participants in a way that balanced risk. The PTO rejected the patent application on the basis that it was not a “process” as that term is understood in patent law. According to the PTO, in order to be patentable, a process must either be tied to a particular machine or it must transform something tangible. Because Bilski’s invention did neither, it did not meet the definition of a “process.”

Federal Circuit Determines That the "Point of Novelty" Test Should No Longer Be Used in Design Patent Infringement Cases

The Court of Appeals for the Federal Circuit, en banc, held in Egyptian Goddess v. Swisa, that the point of novelty test should no longer be used in the analysis for determining design patent infringement. In support of its decision, the Federal Circuit noted that the point of novelty test as a separate requirement is inconsistent with the ordinary observer test laid down in Gorham, is not mandated precedent, and is not needed to protect against unduly broad assertions of design patent rights.

The Federal Circuit indicated that it is permissible under the Gorham test to compare the patented design and the accused design in the context of similar designs found in the prior art. Specifically, it noted that in some cases, when the claimed design and the accused design are not plainly dissimilar, resolution of the question whether the ordinary observer would consider the two designs to be substantially the same will benefit from a comparison of the claimed and accused designs with the prior art.

If an accused infringer elects to rely on comparison with prior art as part of its defense against the claim of infringement, the burden of production of that prior art is on the accused infringer. Regardless of whether the accused infringer elects to present prior art it considers pertinent to this comparison, the ultimate burden of proof to demonstrate infringement by a preponderance remains with the patentee. The Federal Circuit indicated it will leave it to future cases to further develop the application of this standard.

Quanta Computer, Inc. v. LG Elec., Inc.

On June 9, 2008, the U.S. Supreme Court issued its decision in Quanta Computer, Inc. v. LG Electronics, Inc. In reversing the Federal Circuit, the Supreme Court held that patent exhaustion (1) can apply to method patents and (2) can apply to the sale of components of a patented system that must be combined with additional components in order to practice the patented methods.

Patent Reform Legislation Update

Patent Reform Attempt Seems To Be Running Out of Time

Dispute Over Key Damages Provision May Doom Patent Reform -- The Patent Reform Act (S.1145) was recently pulled from the floor schedule by Senate Majority Leader Harry Reid (D-AZ). While not a mortal blow to patent reform, this move, which was a clear reaction to ranking committee members' inability to bridge the gap on the issue of damages, will embolden opponents of patent reform legislation as the debate among interested parties continues.

On February 15, 2008, the Congressional Budget Office ("CBO") released its Cost Estimate for S. 1145, Patent Reform Act of 2007. The following excerpts are taken from the Summary section of the report:

• CBO estimates that enacting the bill would increase direct spending by $26.9 billion and revenues by $25.5 billion over the 2009-2018 period.…In total, those changes would increase budget deficits (or decrease surpluses) by $1.4 billion over the 2009-2018 period.
• CBO estimates that changes in direct spending and revenues from enacting the bill would not cause an increase in the deficit of more than $5 billion in any of the 10-year periods between 2018 and 2057.
• CBO estimates that implementing the bill would increase net discretionary spending by $0.5 billion over the 2009-2018 period, assuming appropriation of the necessary amounts.

The Patent Office Professional Association (POPA), which includes patent examiners, voiced its opposition to S.1145 by joining 13 other unions in a February 6, 2008 letter to legislators.

All indications are that the patent reform bill, S. 1145, will not be taken up until after Congress's Easter recess, which ends on March 30.

The Biotechnology Industry Organization recently released a study conducted by noted economist Robert J. Shapiro and health care policy expert Aparna Mathur entitled "The Economic Implications of Patent Reform: The Deficiencies and Costs of Proposals Regarding the Apportionment of Damages, Post-Grant Opposition and Inequitable Conduct." The study concludes that the three proposals would make patents "harder to secure, easier to invalidate, and cheaper to infringe" and that "[t]he net effects will reduce the value of patents and the intellectual property they represent, dampening R&D and the consequent pace of innovation in the United States." See Study, p. 2.

On January 24, 2008, Senate bill S. 1145: Patent Reform Act of 2007 was placed on the Senate Legislative Calendar. (Calendar No. 563). The bill, which is sponsored by Sen. Patrick Leahy (D-VT) and co-sponsored by 9 other Senators (7 Republicans; 2 Democrats) promises significant changes to the patent system and patent litigation. Though there is no date certain for a vote on the bill, ranking Judiciary Committee members have indicated a desire to take up the bill as soon as possible in 2008. (See Cong. Rec. 12/18/07, pp. S15898-S15899).

Among the proposed changes in the bill are a number of provisions sure to have a significant impact on patent litigation. Notably, the bill contains, inter alia, the following revisions: (1) a shift to a first-to-file policy for determining the effective filing date of an invention; (2) a requirement that courts consider a patent’s specific contribution over the prior art in determining damages – an entire market value rule; (3) an expansion of the prior user defense; (4) an increased role for third parties in patent examination and post-grant review procedures; and (5) a change to the venue requirements, which would allow civil patent cases to be brought only in the district where either party resides or where a corporate defendant was incorporated or has its principal place of business.

While most pundits believe a revised version of S. 1145 will be passed as early as February, particularly given the majority party’s control over the order in which bills are considered and its leaders’ public statements, others caution that the Senate may not have the votes or stomach to pass such sweeping legislation. It is worth noting that the House passed H.R. 1908, which is identical to the Senate bill, in September 2007 with 73 percent of Democrats supporting and 67 percent of Republicans opposing. See GovTrack.us. H. Res. 636--110th Congress (2007): Providing for consideration of the bill (H.R. 1908) to amend title 35, United States Code, to provide for patent reform, GovTrack.us (database of federal legislation) (accessed Jan 31, 2008).

Considerable forces have been mobilized on each side of this debate - the tech industry supporting the reforms and the pharma and bio-tech industries opposing major portions of the bill.  On February 4, 2008, the Administration relayed its opposition to certain aspects of the current version of the bill to the Judiciary Committee. Similarly, comments contained within the Judiciary Committee’s Report on the bill indicate an unwillingness to pass the legislation in its current form.

The Committee will post updates as additional developments as they occur.

In re: Seagate Technologies, LLC

JUNE 7, 2007 – The Federal Circuit heard oral arguments in In re: Seagate Technologies on whether the assertion of an advice of counsel defense to a willful infringement claim should cause a waiver of the attorney-client privilege for communications with trial counsel. Recognizing the impact of the statutory duty of care standard announced in Underwater Devices on the issue of the waiver of the attorney-client privilege, the Court also invited argument on whether the decision in Underwater Devices and the duty of care standard itself should be reconsidered. The result was a lively debate of one of the most nettlesome issues facing patent litigators today.

Federal Circuit decision may have significant impact on the attorney-client privilege and work-product immunity in patent litigation cases

Over the past several years, courts have been split over what exactly is waived when companies attempt to rely upon an opinion of counsel in defense of a charge of willful infringement in patent cases. On January 26, 2007, the Federal Circuit announced that it will give an en banc review of a writ of mandamus filed by Seagate Technology, Inc pertaining to this important issue. The court invited briefing on the following issues:

1. Should a party’s assertion of the advice of counsel defense to willful infringement extend waiver of the attorney-client privilege to communications with that party’s trial counsel? See In re EchoStar Commc’n Corp., 448 F.3d 1294 (Fed. Cir. 2006).
2. What is the effect of any such waiver on work-product immunity?
3. Given the impact of the statutory duty of care standard announced in Underwater Devices, Inc. v. Morrison-Knudsen Co., 717 F.2d 1380 (Fed. Cir. 1983), on the issue of waiver of attorney-client privilege, should this court reconsider the decision in Underwater Devices and the duty of care standard itself?