Chicago IP Attorney & Lawyer : R. David Donoghue : Chicago IP Litigation Blog

I have several smaller IP-related items today, none of which warranted a single post:

• The Wall Street Journal reported last Friday that the Patent Reform Act (S. 1145) will likely not reach the Senate floor -- click here for the story.  It was widely reported throughout the first quarter that the bill was expected to be brought to the full Senate by March or April of this year.  The WSJ reported that the Act's move out of the Judiciary Committee stalled because of a stalemate over the Act's controversial damages provision.
  
• Virtually Blind hosts a Blawg Review #156 focused on, no surprise, all thinks virtual and Second Life.
  
• The John Marshall Law School is hosting a free presentation by Southern Methodist University Law School Professor Shubha Ghosh tited IP as CP:  Competition Policy Norms in Intellectual Property Law.  Click here for registration information.
  
• The final edition of the 2008 Chicago IP Colloquium is this afternoon from 4:10 - 5:50 pm.  The presentation will be by Professor Mark McKenna of the Saint Louis University School of Law about his paper Testing Modern Trademark Law's Theory of Harm.  It looks like it will be another excellent IP discussion.
  
• The Lewis & Clark Law School has a new podcast up with Chicago-Kent College of Law's Associate Dean and Director of the Program in Intellectual Property Law Graeme B. Dinwoodie. Professor Dinwoodie speaks about developing trademark defenses.

• Email This
• Print
• Comments
• Trackbacks

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:

• Ninth Annual Pro Bono and Public Interest Awards -- The Northern District and the Federal Bar Association are seeking nominations for excellence in pro bono and public interest work. Nominations should be based upon work performed in civil cases before the Northern District which are no longer pending. Send nominations by March 28 to:

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

• Patent Reform is Moving Forward -- The Senate is preparing to vote on the Patent Reform Act after its spring recess (yes, it is spring already in DC).  Here is some additional coverage of the Act's status:

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.

• Check out the newest entry to Chicago's law blog scene, the Lean & Mean Litigation Blog.  It is not IP-focused, but it is an interesting read for any commercial litigator or litigant.
  
• William Patry at Patry on Copyright has an interesting post about the difficulties of serving corporate entities based upon a District of the District of Columbia case involving a pro se plaintiff.  The best advice, of course, is to hire counsel because if you do not get the party served properly, you have no case.
  
• The Seventh Circuit affirmed Judge St. Eve's ground breaking opinion in the CLC v. Craigslist case.  The Seventh Circuit held that an ISP is exempt from cases based upon user content when the case attempts to treat the ISP as a publisher of the content.  This is considerably narrower than most of the other circuits, which have held that Section 230 exempts ISPs from essentially all suits based upon user content.  For more coverage, check out the WSJ Law Blog (which erroneously elevates Judge St. Eve to the Seventh Circuit), Internet Cases, and the Technology & Marketing Law Blog (very detailed analysis of Judge Easterbrook's opinion).
  

• Email This
• Print
• Comments
• Trackbacks (1)

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:

• First to File
  
• Assignee Filings, Mandatory Publication, and Third Party Submissions
  
• Interlocutory Decisions & Venue
  
• Damages
  
• Applicant Quality Submissions & Micro-Entities
  
• Post-Grant Procedures
  
• Inequitable Conduct Provisions
  
• Late Patent Filings         

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:

• 271 Patent Blog
  
• Filewrapper
  
• IP Biz
  
• Patent Baristas
  
• Patently-O
  
• Maryland IP Law Blog (and here regarding the increased internet coverage of Patent Reform during February)

• Email This
• Print
• Comments
• Trackbacks

Lots of blogs have been doing top ten lists or posts pondering their past year or resolving to do more in 2008. That is not my style.* But Wired’s top ten list of startups to watch in 2008 caught my eye because of a Chicago connection – click here for the entire list. Second on the list (alphabetically) is Chicago company 37Signals, a company that makes a suite of personal and business management software. I am trying out their web-based calendar and organization tool Backpack and, so far, I have been impressed.  Here is what Wired says about 37Signals:

There's a reason nobody ever uses the phrase, "It's as simple as computer programming." But Chicago's 37Signals has made life simpler for programmers and small businesses alike with products such as Basecamp (project management software) and an increasingly popular open source web framework called Ruby on Rails. The company ditches the philosophy of "more features, more better" in favor of simplicity and accessibility: Focus only on the most important features and make things easier to use. The company itself embodies its keep-it-simple philosophy: Fewer than 10 staffers, working from humble offices, create programs quickly and nimbly adapt them based on user feedback. 37Signals released version 2.0 of Ruby on Rails in December, which should give many programmers a happy new year.

Founders: Jason Fried, Ernest Kim, Carlos Segura

Funding: Undisclosed sum from Bezos Expeditions

Employees: 8

For some other good IP-related top ten or end of the year lists, check out:

• Patent Docs (Top fifteen Patent Docs stories of the year, 11-15, 6-10 and 1-5)
  
• Patently-O (Hal Wegner's top ten 2008 patent cases)
  
• TinyTech IP (Top ten nanotechnology patents)

* I will say that the Blog’s top two stories of the year were without question the Patent Reform Act and Trading Technologies v. eSpeed.

• Email This
• Print
• Comments (4)
• Trackbacks

• Email This
• Print
• Comments
• Trackbacks

• Email This
• Print
• Comments
• Trackbacks

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:

• Chicago Tribune surveys the opinions of some Chicago-area companies.
  
• 271 Patent Blog weighs in with the President's view and a survey of news stories on the Act.
  
• FileWrapper says that the House will likely pass some form of the Patent Reform Act today, but that the Senate is not expected to consider it until October.
  
• IP Central is watching the House debate on CSPAN and says that most of it centers on procedural issues, not substance.

• Email This
• Print
• Comments
• Trackbacks

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):

• Likelihood of Confusion -- Ron Coleman agrees with E. Leonard Rubin, interviewed in the Chicago Tribune today, who says that the written "Two Thumbs Up" mark is pretty strong.
  
• Robert Feder of the Chicago Sun-Times -- Feder says that the "Two Thumbs Up" mark is "the most powerful and influential symbol in movie marketing."

The fact that the Patent Reform Act has stalled in Congress, which I discussed earlier this week, has been picked up by several blogs:

• Maryland IP Law Blog -- Citing my post.
  
• Patently-O -- Dennis Crouch says that the Patent Reform Act is not just stalled, it is dead.
  
• 271 Patent Blog -- Leads with a great Simpsons' quote in saying the Act is on hold.

• Email This
• Print
• Comments
• Trackbacks

The Wall Street Journal reported yesterday (subscription required) that patent reform is stalled. I blogged last month – Can Patent Reform Cross the Finish Line? – that it appeared that the patent reform efforts in this Congress were in trouble because the reform proponents were not maintaining a unified position. The WSJ’s article suggests that my analysis was correct, although the WSJ focuses on a new critic of the reform legislation – the AFL-CIO. The AFL-CIO argues that the Patent Reform Act of 2007* will cost America, and specifically the AFL-CIO’s members, high tech manufacturing and production jobs. The union is concerned that patent reform would weaken the U.S. patent system, thereby causing high tech manufacturers to send their manufacturing and production work overseas where they will receive relatively stronger patent protection. It is an interesting view on the reform issue that, judging from other blog posts, most people in the IP community had not considered: FileWrapper.

* For more analysis of the Patent Reform Act of 2007 check out the Blog’s archives or the Maryland IP Law Blog’s excellent five part series on the Act: 1, 2, 3, 4 and 5.

• Email This
• Print
• Comments
• Trackbacks

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:

• Patently-O
  
• FileWrapper
  
• Patent Prospector
  
• Patent Baristas
  
• 271 Patent Blog
  
• Maryland Intellectual Property Blog -- a new regional IP blog & a new member of the LexBlog family.  Welcome to the conversation Brian.

* 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!

• Email This
• Print
• Comments
• Trackbacks (1)

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:

1. where defendant has a principal place of business or is incorporated;
   
2. where defendant has committed "substantial" infringing acts and maintains a physical facility constituting a "substantial portion" of defendant's operations; or
   
3. where plaintiff resides, if plaintiff is a university or an individual inventor.

The 271 Patent Blog also has a good post on the markup.

• Email This
• Print
• Comments
• Trackbacks

Intel's General Counsel, Bruce Sewell, had an interesting commentary piece in yesterday's Wall Street Journal:  Patent Nonsense (because it is from the Op/Ed pages, I do not think a subscription is required).  On the day that the Senate Judiciary Committee renewed its consideration of the Patent Reform Act of 2007, Sewell makes many of the arguments that led to the changes proposed by the Act.  Sewell argues that the number of patent law suits is increasing, damages awards are rising (he states that there have been at least four settlements or judgments in excess of $500M in the last five years) and the more and more "questionable, loosely defined patents" are being issued.  Sewell's remedies to these problems include:

• limiting damages to the patented component not the entire product (i.e., a patentee's damages should be based on its patented engine component, not the entire car);
  
• strong post-grant PTO review;
  
• strengthening of venue requirements so that suits must be brought in a forum with an actual connection to the alleged infringement; and
  
• requiring a showing of actual bad faith for a willfulness finding.

Sewell also argues that the allegedly increasing number of "questionable, loosely defined patents" chills research and development in technology areas covered by the patents.  But I am not sure this argument is correct.  In my experience, a patentee, assignee or exclusive licensee with a broad patent tends to assert its patent when the technology is developed and a large chunk of the research investments have already been made.  That is the point when the alleged infringers have developed a market and, therefore, potential damages.  So, while I am all in favor of careful examination by the PTO (as are most people involved in this debate, I think), I am not sure that the problem with the broad, questionable patents is that they chill research and development investment.

• Email This
• Print
• Comments (2)
• Trackbacks

In yesterday's edition, the Chicago Tribune published a commentary on the Patent Reform Act of 2007 by Cummins-Allison Corp.'s Chairman William J. Jones -- Cummins-Allison is based in Mt. Prospect, Illinois and develops and distributes coin and currency handling/counting machines.  Jones has strong feelings about the Act and offers some unique opinions.  First, he is against "harmonizing" US law with international patent laws, arguing that the European and Japanese systems are "parochial."  He also makes the, in my experience unfair although widely held, argument that the Chinese system "specializes in intellectual property theft."  I believe if you look at recent Chinese cases or the experts on Chinese IP law -- like the excellent IP Dragon -- you will see that China has become increasingly willing to protect the intellectual property of foreign entities, as long as the entities have invested in the necessary Chinese patents, trademarks, etc.

Jones notes that at the recent Congressional hearings, no manufacturing firms testified, despite some interesting statistics:

U.S. manufacturers undertake 60 to 70 percent of the nation's research and development and hold 60 percent of its patents.

                                                                   * * *

. . . .  Roughly one-third of all patent applications are made by independent inventors, small manufacturers, universities and non-profit research groups. Their efforts are crucial for leading-edge scientific advances, and their views should be heard.

Jones is against the proposed post-grant review process because he believes it will diminish the value of patents by making their strength very uncertain.  He also suggests that instead of giving an "overburdened" PTO broad, new rule-making powers, Congress should fully fund the PTO so that it can hire and retain a high quality staff of sufficient size to expedite the prosecution of patent applications.  Finally, Jones points to what he believes is the diverse opposition to the Act, which he argues warrants taking the time for additional, robust debate.

Jones has some very strong views, not all of which I agree with.  But I do not see how additional debate and discussion could harm the Act at this point.  There are some strong dissenting voices, the Federal Circuit's Judge Michel for example.

• Email This
• Print
• Comments
• Trackbacks

On a related note, Chief Judge Michel of the Federal Circuit has written a letter (following up an earlier, broader letter and his Congressional testimony, discussed at Patently-O) strenuously arguing that the Act's damage apportionment sections are impractical and that Congress should either retain the current damages law which has undergone "decades of refinement" and is "highly stable and well understood by litigators as well as judges."  Here is some discussion of Judge Michel's letter:

• Patently-O
  
• Patent Baristas

• Email This
• Print
• Comments
• Trackbacks

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 Docs
  
• Promote the Progress
  
• FileWrapper
  
• Patent Prospector
  
• Patent Baristas
  
• Phosita

• Email This
• Print
• Comments
• Trackbacks

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.

• Email This
• Print
• Comments
• Trackbacks