Blawg Review #133

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.

Continuation Rules Would Cause GSK Irreparable Harm

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:

  • That limiting the number of continuations a party can file violates 35 U.S.C. Section 120, which states that later filed applications have the same effect as their parent applications.
  • That the new rules are impermissably retroactive because the limits on numbers of claims and continuations will change the terms of the bargain struck between inventors currently prosecuting their applications and the PTO when those inventors filed their applications, prior to the new rules going into effect.
  • That the requirements for Examination Support Documents ("ESD") are impermissably vague because they do not sufficiently define the paramters of the search required.

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.

Eolas v. Microsoft Settled

Eolas Techs. Inc. v. Microsoft Corp., No. 99 C 626 (N.D. Ill.) (Pallmeyer, J.).

Speculation regarding Judge Pallmeyer's delay of the Eolas v. Microsoft trial is over.  Eolas announced that it settled with Microsoft in a letter to shareholders (available from theSeattle Post-Intelligencer).  No details of the settlement were available, but Eolas told its shareholders to expect a dividend from the settlement of up to $60-$72 per share.  Here is more coverage of the settlement:*

*  As I have explained in previous posts, I will not comment on any news from this case because of my family's connection to it, but feel free to discuss the case in the comments.

Can Patent Reform Cross the Finish Line?

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!

Patent Reform Act Hits a Snag?

When the Patent Reform Act of 2007 was unveiled, the conventional wisdom was that the law would be enacted and remain largely intact, unlike the 2006 version which was never sent to the White House.  But it has hit its first delay, shortly after its first public hearings last week.  Earlier this week, five Senate Judiciary Committee (which is considering the Act) members -- Tom Coburn (R-Oklahoma), Jeff Sessions of (R-Alabama), Chuck Grassley of (R-Iowa), Jon Kyl (R-Arizona) and Sam Brownback (R-Kansas) -- sent a letter to the Committee's Chair Senator Patrick Leahy (D-Vermont) and its Ranking Member Arlen Specter (R-Pennsylvania).  The Senators sought a delay in voting on on the Act and reporting it out of the Committee to allow time for additional hearings to explore, among other issues:

  • Apportionment of damages;
  • Post-grant opposition procedures;
  • Granting the USPTO broad rulemaking authority;
  • How to improve patent quality; and
  • "[E]xamining the problem of speculative litigation and alternatives to stopping unnecessary and costly litigation."

 

Blogs have been actively covering the letter and its implications:

Patent Reform Enters the Spotlight

Wednesday, the Senate held its first hearings regarding the Patent Reform Act.  Both the main stream media and the legal blogs are busy handicapping the battle over the legislation and the Act's chances of success.  Here are some of the highlights:

The WSJ Law Blog handicaps the big players in Patent Reform's Battle Royale

The WSJ print edition featured the Senate hearings in a page-one story (subscription required).

FileWrapper provides a nice summary of each witness's positions.

The New York Times also ran a Business section story.

Patent Prospector takes a very strong position

The thankful result of today's Senate hearing is watching the Patent Reform Act of 2007 appear the statutory tub of lard that it is.

Obviousness Redux: Arm-chair Quarterbacking KSR v. Teleflex

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:

Patently-O

Prof. Sarnoff via Patently-O

WSJ Law Blog (with interesting comments from several key players and practicioners)

Patent Docs

Infinite Monkey Theorem

File Wrapper

271 Patent Blog

Tech Dirt

Patent Prospector

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

Chicago Tribune

Congress Turns to Patent Reform

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):

  • Expands reexam procedures and allows third parties to file “petitions for cancellation” with the Patent Trial and Appeal Board asserting issues pursuant to 35 U.S.C. Section 282(a)(2) & (3).  This proceeding will include a discovery mechanism and the patent will not be afforded a presumption of validity.
  • Limits venue to districts in which either party resides or in which defendant committed infringing acts and has a regular place of business. 
  • Gives the Federal Circuit jurisdiction over interlocutory claim construction appeals.

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:

  • Implements a pure first-to-file system, which would bring the United States in-line with the international patent community.
  • "Streamlines" the process for submitting substitute statements in lieu of an inventor's oath where the inventor is unavailable or unwilling to sign the oath.
  • Allows assignees, or others with sufficient proprietary interest, to apply for the patent in their own name.
  • Limits damages awards so that reasonable royalties are no greater than the invention's contribution to the art.
  • Requires that courts consider any non-exclusive licensing  in determining reasonable royalty rates.
  • Requires that a plaintiff make heightened proofs for a finding of willful infringement.

For more on the Act, check out Patently-O, 271 Patent Blog, Patent Prospector, the new Filewrapper Blog, Infinite Monkey Theorem and Patent Docs.