Quanta Computer, Inc. v. LG Elecs., No. 06-937, 553 U.S. ___ (2008).
The Supreme Court concluded its latest review of the patent laws Monday when Justice Thomas delivered the Court's succinct, unanimous decision in Quanta v. LG. Client obligations this week prevent me from providing a detailed analysis today. But, no surprise, there is plenty of commentary out there already. For more about decision, check out:
Tomorrow I will be back to case analysis, but there is some Northern District news and some excellent IP and litigation blog posts worth reading, here they are:
Amy Rettberg, Executive Law Clerk
Email: amy_rettberg@ilnd.uscourts.gov
Chambers of the Chief Judge James F. Holderman
219 South Dearborn Street, Suite 2548
Chicago, Illinois 60604
271 Patent Blog -- looking at the latest amendments to the Act.
Maryland Intellectual Property Blog -- looking at the latest amendments and questioning whether proponents have the sixty votes necessary for cloture, thereby avoiding a filibuster.
Patent Docs -- taking sides, but asking you to call your Senators regardless of which side you take.
The Patent Reform Act is on the Senate’s calendar and is expected to be voted on in February. The version voted out of the Senate Judiciary Committee is different than the version passed by the House. Experts expect that, instead of forming a joint committee to resolve the differences which generally requires a second vote by both chambers, the House will vote on any version of the Patent Reform Act passed by the Senate.
That means that it is time to take a close look at the Senate version of the Patent Reform Act. The damages and venue provisions continue to be some of the most significant and hotly-contested. And it is no surprise that the various stakeholders are making their positions heard loudly again. I considered analyzing each provision of the current Senate bill, but Patent Docs beat me to it and did an excellent job:
Several other blogs are also keeping a close eye on the stakeholders and the sausage-making aspects of the Patent Reform Act, among the best:
The blogs are full of commentary about yesterday's Supreme Court patent exhaustion argument. But no one is declaring a winner. Instead, like my earlier post, people are focusing on trends in the Justices questions. Here are some of the best commentaries:
Aharonian v. Gutierrez, No. 07-1224, 2007 WL 9282064 (D.D.C.) (Robertson, J.).
The District Court for the District of Columbia (“D.D.C.”) recently dismissed a suit seeking the dismissal of the PTO’s Deputy Director Margaret Peterlin for lack of sufficient experience. The D.D.C. held that the Act establishing Ms. Peterlin’s position did not create a private cause of action for removal and the Administrative Procedure Act did not allow for review of the appointment.
There is little I can say about the decision that has not already been said. For more check out:
But I can add a human element to the issue. I know Ms. Peterlin. I have met her in social settings (she and my wife were law school classmates). My limited interactions with her made clear to me that while she may not have the IP-specific experience that might be ideal, Ms. Peterlin is as capable as anyone without that background to learn the law and do an excellent job.
Last week the intellectual property world obsessed over injunctions – specifically, a preliminary injunction hearing in the Eastern District of Virginia resulting in an injunction against the U.S. Patent & Trademark Office’s (“PTO”) new continuation rules. There was a lot of analysis about the injunction, including live blogging by Patent Practice Center Patent Blog and a lot of post-injunction analysis by, among others: 271 Patent Blog; FileWrapper; Patent Baristas; Patent Docs (and here); Patent Prospector; PHOSITA; Patently-O; WSJ Law Blog; and Washington State Patent Law Blog. For those of you who have no idea what a continuation is or just do not care about the particulars of the rules, I promise that I am done with patent continuations for this post. Honestly, I find the rules rather tedious myself. I prefer to focus on litigating patents, rather than the PTO’s prosecution rules. So, today we talk about injunctions:
According to TechCrunch, Patent Monkey received a permanent injunction when it was sold to the Internet Real Estate Group. But Patent Monkey’s patent search technology will see its injunction lifted when it is used on www.patents.com. Hopefully, for those like me who enjoyed it, Patent Monkey’s Infinite Monkey Theorem Blog will also see its injunction lifted.
Virtually Blind has an interesting report on Second Life’s* new Patent & Trademark Office, the SLPTO. No word on whether the SLPTO and the Second Life legal system generally will allow for any permanent injunctions. Right now it appears that the SLPTO will be heavily skewed toward copyright and trademark, which makes sense in a virtual world. And before we learn whether the SLPTO has any enforcement mechanisms, Blawg IT is offering to represent virtual clients before the SLPTO. I would get a retainer up front Brett – virtual clients can be difficult to track down when the bills are due.
The Patry Copyright Blog shows why Second Life injunctions may be necessary. Six Second Life players have sued a Queens man in the Eastern District of New York for trademark and copyright infringement based upon sales of goods in Second Life. I wonder if the trademarks and copyrights were registered with the SLPTO or the US PTO/Copyright Office. And does the E.D.N.Y. have authority to issue cyber-injunctions?
Promote the Progress provides an interesting piece on the long-term effects of last week’s injunction against the PTO on shaping patent reform.
SportsBiz explains that plaintiffs who were bilked out of millions in attorneys’ fees by their now-jailed lawyers were not irreparably harmed. A Kentucky court awarded them a 20% ownership interest in Curlin, the prize race horse and Breeder’s Cup Classic winner partially owned by the jailed lawyers.
Adams Drafting issues its own injunction against using virgules. Using what? The virgule, or the forward slash. He explains that it is frequently used to mean: 1) “per” – 50 miles/hour; 2) “or” – and/or; and 3) “and” – all parents/subsidiaries/affiliates are bound by the obligations. The problem is that the various uses create ambiguity. Adams acknowledges that he cannot find any litigation specifically about the virgule. But the best solution is to remove the virgule from your writing before you become embroiled in the first litigation over one. And when it comes to rules of writing and grammar, the best solution is to listen to Adams.
What if you do not want an injunction or just want a faster, cheaper resolution? The IP ADR blog is talking about last week’s big settlement between Vonage and Verizon. They suggest that you consider using contingent agreements to control for changing future conditions and charitable contributions. They also point out that creativity and out-of-the-box thinking are important elements for reaching settlements.
Another way to avoid an injunction is to understand how best to argue against the opposing party and their counsel. The Center for Internet & Society discusses how men and women in the United States and in other cultures communicate and suggests that understanding the nuances of how different people communicate around the globe could advance legal discourse.
Lowering the Bar reports on a Michigan man sentenced to sixty days in jail for a home invasion that ended in him throwing two large pickles at residents of the home. No word on whether he will be enjoined from pickle ownership. Okay, that is a weak tie-in, but who can resist a pickle invasion story.
Deliberations discusses one of the basic truths of trial law – you must connect with your jury about basic truths of your case. That is equally true when seeking an injunction – if the judge senses something is not right about your argument, you will not get your injunction.
The writers’ strike that is expected this week is not an injunction, but it will mean an end to new scripted television and movies. Concurring Opinions has an interesting post about a brewing legal dispute between the studios and the writers’ union, the Writers Guild of America (“WGA”). The WGA is requiring that members provide information on all unproduced projects and an update on the status of those projects, as per the labor agreement between the WGA and the studios. But the studios, based upon their individual agreements with writers, are warning writers that the studios own the scripts and the writers are barred by contract from giving the WGA any information about the projects. These conflicting contracts place the writers in quite a pickle (I could not resist), and it poses an interesting legal question as to which contract controls.
And I end with a post that is actually about an injunction. The Maryland IP Law Blog (another LexBlog creation) posted about a District of Delaware court that upheld a jury verdict of patent infringement and plans to enter a permanent injunction against Lonza, Ltd., Nutrinova Inc. and Nutrinova Nutrition Specialties & Food Ingredients GmbH prohibiting the U.S. sale and use of a fatty acid product currently marketed under the brand name Lonza DHA for use in functional foods and dietary supplements.
Thanks for reading. And for the Blog’s regular readers, I will be back to my usual Northern District of Illinois focus tomorrow.
* Second Life is an internet-based virtual world where “residents” interact through avatars. For example, the Seventh Circuit’s Judge Posner appeared in Second Life with an avatar closely resembling him to answer questions from, among others, a DC IP lawyer using an avatar of a humanized raccoon. Check out the New World Notes blog for a transcript and some screenshots.
Yesterday, I blogged briefly about the Eastern District of Virginia's injunction preventing the PTO's new continuation rules from taking effect today, November 1st. But the Court's order was not available yet. The order has been issued -- click here for a copy -- and it is very interesting. The Court held that plaintiff GSK had shown a likelihood of success on the merits regarding several issues:
The Court also held that GSK would be irreparably harmed by implementation of the rules because GSK has about 2,000 pending applications and GSK's rights in each of those applications would be materially altered by the new rules.
[Updated with more links after the jump.]
The balance of hardships weighed in GSK's favor. The PTO's losses were sunk costs -- updating computer systems and training staff. But if the PTO wins the suit and later implements the continuation rules, the new computer systems and the employee training will still be valuable. On the other hand, the entry of the continuations rules will materially limit GSK's rights in its 2,000 pending patent applications.
Finally, the public interest is in maintaining the status quo, rather than allowing the implementation of a new set of rules which could be reversed by the Court in a matter of months.
For more on the preliminary injunction and thoughts about whether the PTO will file an emergency appeal with the Federal Circuit, check out:
I will continue to update this post with coverage of the injunction and any appeals throughout the day.
Usually I post a holiday-related patent on major holidays (which Halloween is in my house). But in light of today's Eastern District of Virginia preliminary injunction hearing regarding whether to allow the PTO's new continuation rules to take effect tomorrow, November 1, as planned, I thought a post on the continuation rules was more appropriate. The patent world, and more particularly the patent prosecution world, has been busy analyzing and preparing for the new continuation rules for several months. For analysis of the new rules check out the Maryland Intellectual Property Law Blog (click here and here) and the 271 Patent Blog (click here).
While most were just probing the rules for loopholes or preparing to comply with them, two also filed suits in the Eastern District of Virginia seeking to enjoin enactment of the new rules -- Triantafyllos Tafas v. Dudas, No. 07 C 846 (E.D. Va.) and SmithKline Beecham Corp./GSK v. Dudas, No 07 C 1008. Click here for Patent Docs' excellent coverage of the SmithKline/GSK suit.
The two suits were consolidated and a preliminary injunction hearing has been set for today -- click here and here to download the briefs at Patently-O. Numerous entities have taken sides, filing amicus briefs -- click here for a list of the briefs and links to some of them at the PLI Patent Practice Center Blog. And for those of you who cannot wait to read the result here shortly after it comes out and who are not busy with legal work or preparing for tonight's trick or treating, click here for the PLI Patent Practice Center Blog's live blogging coverage of the PI hearing.
Update: Click here for more coverage of the Eastern District of VIrginia cases by the WSJ Law Blog and click here for even more briefing from Patently-O.
Happy Halloween.
I, along with many others, blogged last week that the Patent Reform Act had stalled in Congress. But Congress has changed its mind and today the House is debating its version of the bill (available here). And experts expect some version of the bill to be passed by the House at the end of today's debate. You can find an excellent summary of key amendments to the House bill at Tech Daily Dose. If you want a list of each amendment to the bill, by Congressperson, go to the House website. And it should come as no surprise that with the Patent Reform Act moving forward again both the MSM and blogs are full of commentary. Here is some of the best:
My recent story about Ebert's use of his "Two Thumbs Up" has been receiving a lot of attention (and I even scooped the Sun-Times):
The fact that the Patent Reform Act has stalled in Congress, which I discussed earlier this week, has been picked up by several blogs:
This week the House Judiciary Committee sent its version of the Patent Reform Act of 2007 to the full body for a vote. The damages provisions that Federal Circuit Chief Judge Michel publicly spoke against remained in the House bill, but the controversial post-grant review process was removed completely, instead of being limited as many interested parties are suggesting. The Senate continues to markup its version of the Patent Reform Act, but so far has tightened venue requirements and is debating the damages provisions. The Patent Reform Act feels like a long breakaway in the Tour de France.* When a group of riders is leading the peloton (the large group consisting of most of the riders in the race) they each want to win the day's race, but in order to do that they must work together until the last 200-500 meters of what may be a 200 km ride. If they stop cooperating before the last several hundred meters, they become disorganized, slow down and get swallowed by the peloton. They are generally exhausted from their efforts in the breakaway and have no chance of winning once they rejoin the peloton -- all of their individual efforts are thrown away because they stopped cooperating with their competitors too early. Cooperating with competitors is difficult and counter-intuitive, but is often the only way to achieve individual success. The Patent Reform Act is just such an effort, but it looks like the interested parties may not win this race.
You can read more about Congress's deliberations at:
* Forgive the analogy, but I love the Tour and today is the first individual time trial of this year's race. Go Levi, Alberto & the rest of the Discovery Channel team!
Last Thursday, the Senate Judiciary Committee began marking up the Patent Reform Act. At the beginning of the Committee's public markup session, Committee Chairman Leahy (D-Vt.) stated that he wanted to finish the markup Thursday, vote on the bill and send it to the full Senate. The Committee, however, only got through two amendments, one of which was a "manager's amendment" which just includes technical/clerical revisions." And Leahy, prodded by several Republican senators and Dianne Feinstein (D-Ca.), agreed to provide the Committee additional time to consider the Act further. The one substantive amendment (which you can read here) further limited venue in patent cases. The amendment was strongly worded stating that in any patent case:
. . . a party shall not manufacture venue by assignment, incorporation, or otherwise to invoke the venue of a specific district court.
This preamble language is very interesting. It has the potential to lead to a big increase in initial motion practice in which defendants argue that whatever entity sues them was created to create venue in the jurisdiction. But this problem is seemingly resolved because in almost all cases plaintiff's principal place of business or state of incorporation will not create venue, it will almost always be based upon defendant's footprint and infringing activities. The amendment goes on to specify that venue would be proper:
The 271 Patent Blog also has a good post on the markup.
Peter Zura has an excellent post at his 271 Patent Blog about the latest statistical analysis of patent litigations by Professor Paul Janicke of The University of Houston Law Center -- you can read Prof. Janicke's study here or get a copy of his related PowerPoint slides here. Of particular note to readers of the Blog, the Northern District remains in the top five districts based upon the number of patent filings, with almost 5% of the nation’s patent cases filed here. Zura also notes that the median verdict was $4.2M, which is almost the median cost litigants pay to take a $25M+ patent case to trial ($4.5M according to the 2005 AIPLA survey). Finally, post-eBay permanent injunctions are denied 25% of the time, as opposed to 16% pre-eBay.
KSR v. Teleflex, 550 U.S. __ (2007).
A unanimous Supreme Court rolled back the Federal Circuit's teaching, suggestion or motivation obviousness test in favor of the Court's prior, and substantially broader, test as set forth in Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966). Justice Kennedy delivered the Court's opinion and called the Supreme Court's approach to obviousness "broad and flexible." The Court also noted that because the parties did not dispute the prior art, the claim's scope or the level of ordinary skill in the art and because obviousness is a legal question, the district court was correct to grant summary judgment in this case.
In addition to bringing the Fed. Cir. down to size, the Supreme Court also took a swipe at the PTO:
We need not reach the question whether the failure to disclose [the prior art reference] during the prosecution . . . voids the presumption of validity given to issued patents, for claim 4 is obvious despite the presumption. We nevertheless think it appropriate to note that the rationale underlying the presumption - that the PTO, in its expertise, has approved the claim - seems much diminished here.
The KSR decision opens up obviousness and will make obviousness a much larger issue in patent cases. And whatever else the "new" old law may do, it will keep patent litigators very busy for years to come. You can download a PDF of the Court's opinion from the Blog's archives.
Here is a list of links to other KSR commentary across the internet, as you can see you could read about KSR all week:
Prof. Sarnoff via Patently-O
WSJ Law Blog (with interesting comments from several key players and practicioners)
Fire of Genius and here
Orange Book Blog (for the decisions effect on pharma patents)
Michael Barclay of Wilson Sonsini via the SCOTUS Blog
Dan Bromberg of Quinn Emanuel via the SCOTUS Blog
Yesterday, Senators Leahy (D-Vt) and Hatch (R-Utah), and Representatives Berman (D-Calif.) and Smith (R-Texas) announced their new Patent Reform Act. You can read their press release on the Act here. The Act is very far reaching and is worth review, in order to prepare for it and/or inject yourself into the debate over it. Here are the the portions of the Act I found to be the most interesting (the other major changes follow in a list after the jump):
Each of these is a major change. Petitions for cancellation could develop into another fast-track strategy for plaintiffs, like ITC proceedings for goods shipped internationally. And the lack of presumption of validity could make the proceedings very popular. The venue limits, though perhaps not surprising, could have a big impact. They will likely reduce the number of pre-answer, non-substantive litigation skirmishes that "venue shopping" results in. And they could be harmful to some communities, like Marshall, Texas, that have developed cottage industries around patent litigation. Finally, giving the Federal Circuit jurisdiction for interlocutory claim construction appeals may save money by reducing discovery, dispositive briefing and trials that are overruled by claim construction reversals. But it could also dramatically increase the Federal Circuit's docket, if it has to see most cases twice, thereby doubling the volume of briefing, instead of once.
Here are the other less-major changes:
For more on the Act, check out Patently-O, 271 Patent Blog, Patent Prospector, the new Filewrapper Blog, Infinite Monkey Theorem and Patent Docs.
The big news in patent law this week is the Supreme Court oral argument in Microsoft v. AT&T. Microsoft exports software from the United States to various countries. The software code alone cannot infringe AT&T's patents until it is combined with the hardware, which only occurs after the software has left the United States. So, exporting the software is not an act of infringement. The issue, therefore, is whether, pursuant to 35 U.S.C. Section 271(f), exporting the software constitutes:
suppl[y] . . . from the United States . . . [of] all or a substantial portion of the components of a patented invention . . . in such manner as to actively induce the combination of such components outside of the United States,” as well as the “suppl[y] . . . from the United States [of] any component of a patented invention that is especially made or especially adapted for use in the invention.
For more on the issues, you can find the briefs at Patently-O.
The case has received substantial media attention both because it was granted cert and because the case could have effects far beyond the international exportation of software. The oral arguments were interesting (transcript here) and both the main stream media and blogs are frantically reading the tea leaves.
My favorite oral argument quotes both came from Justice Scalia:
JUSTICE SCALIA: Mr. Olson, before you get into the merits I have a question, a preliminary question. I understand from AT&T's brief that there has been a stipulation entered into between the parties after the judgment below which preserved Microsoft's right to appeal and prescribed different dollar amounts that Microsoft must pay AT&T depending on the outcome of the appeal. Does that raise any, any muteness problem? Can you sort of wager on the outcome of an appeal that way?
* * *
JUSTICE SCALIA: I hope we can continue calling it the golden disk. It has a certain Scheherazade quality that really adds a lot of interest to this case.
(Laughter.)
For more on the oral arguments and analysis of the case generally, check out:
Patently-O -- Discussion of the oral argument and quotes from the transcript.
The BLT (Blog of the Legal Times)* -- Coverage of Solicitor General Ted Olson accidentally referring to Justice Stevens (a former Chicagoan) as Justice Scalia and Chief Justice Roberts recusing himself based upon his stock holdings.
The WSJ Law Blog -- Focusing on Justice Breyer's statement to AT&T: "I don’t see how to decide for you.”
The WSJ print story (subscription required) -- A broader overview of the story, including a discussion of the fact that the Supreme Court has never held that software is patentable.
271 Patent Blog -- Focusing on the "metaphysical" aspects of the case with extensive quotes from the oral argument.
IP Kat -- A pre-argument case detailing the parties' arguments.
* This is a new blog that is well worth checking out and adding to your RSS feeds.
I do not want the Blog to get off track, so this will be my last post for awhile on the subject, but here is a roundup of blogs discussing yesterday's argument:
Chicago's own 271 Patent Blog
I will be back at the Blog's traditional subjects tomorrow with Northern District case updates.
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