Tracking Northern District of Illinois IP Cases
On September 26, Chicago-Kent is hosting its fourth annual U.S. Supreme Court Intellectual Property Review. Seventh Circuit Judge Diane P. Wood will deliver the keynote address, titled “Is It Time to Abolish the Federal Circuit’s Exclusive Jurisdiction in Patent Cases?” It promises to be a very interesting discussion.
The one-day conference will be held at…
Yesterday, the Federal Circuit handed down its anticipated en banc decision in Therasense, Inc. v. Becton, Dickinson & Co., increasing the standards for inequitable conduct. The 6-5 majority held that:
an omitted reference is material only if the claim or patent would not have issued, but for omission of the reference;
specific intent to deceive must be shown by clear and convincing evidence;
courts can no longer employ a “sliding scale” of intent and materiality, both must be showng by clear and convincing evidence; and
courts should apply equity to ensure that the remedy is not based upon conduct “immaterial to the issuance of the patent.”
Patent Docs has an excellent explanation of the opinion and the case background. And there is plenty of commentary about the opinion (see links below). My initial reaction was that the heightened standards will not actually reduce the number of inequitable conduct claims that are filed, although it may reduce the number of inequitable conduct findings.
So, while the overall outcomes may change, the general cost and complexity of patent litigation will likely remain the same. But when I said as much on Twitter (@rdd), I got an interesting reaction from what appears to be an anonymous patent lawyer. This anonymous person suggested that the heightened standard would actually embolden inventors and patent prosecutors to omit references and hide information from the Patent Office because they are now less likely to be charged with inequitable conduct. My inclination is to dismiss this theory based upon my operating presumption that most patent prosecutors, and most inventors, are, or at least intend to, zealously advocate for their clients, or themselves, within the Patent Office’s rules and the relevant ethics standards. Of course, I have seen exceptions, and they can be severe. But my experience is that those are the exceptions, not the rule. I am curious to hear what others think about this. Am I wrong?
Here is a round up of some of the blog posts about the decision:
Peter Zura’s 271 Patent Blog “rejoices” that the heightened standards give prosecutors added protection;
Life Sciences Law;
Orange Book Blog;
Patently-O ;
PharmaPatents; and
PLI Blog.
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Continue Reading Federal Circuit Heightens Inequitable Conduct Standards, But Does it Increase Unethical Behavior?
Trading Techs. Int’l, Inc. v. eSpeed, Inc., Case Nos. 2008-1392,-1393 & -1922, Slip Op. (Fed. Cir. Feb. 25, 2010) (Rader, J.) (Clark, J. concurring).
Writing for a panel including Judge Lourie and Eastern District of Texas District Judge Clark, Judge Rader affirmed each of the challenged decisions from Judge Moran’s jury trial in this patent litigation involving futures trading software.
For much more on this case, click here to read numerous posts in the Blog’s archives analyzing Judge Moran’s opinions and various aspects of the jury trial. Judge Moran construed the claims of the patents-in-suit, ruled upon several summary judgment motions and presided over the jury trial. The jury found that defendants’ (collectively “eSpeed”) Future View software willfully infringed the patents and that the patents were valid, awarding plaintiff Trading Technologies (“TT”) $3.5M. Judge Moran remitted the damages overall to approximately $2.5M.
Claim Construction
The most interesting aspect of the decision is the discussion of the de novo review of claim construction decisions. Judge Rader spent two and a half pages explaining the fact-law dichotomy of claim construction and concluded that claim construction required resolution of evidentiary and factual issues before construing the disputed terms:
In sum, claim construction involves many technical, scientific, and timing issues that require full examination of the evidence and factual resolution of any disputes before setting the meaning of the disputed terms.
And District Judge Clark wrote a concurring opinion solely to argue against de novo review:
[de novo review] may result in the unintended consequences of discouraging settlement, encouraging appeals, and, in some cases, multiplying the proceedings.
After a de novo review of his decisions, the Court upheld Judge Moran’s constructions. “Static display of prices” meant “a display of prices comprising price levels that do not change positions unless a manual re-centering command is received.” And a “static condition” meant that “the price axis never changes positions unless by manual re-centering or re-positioning.” While Judge Moran’s constructions may have appeared narrower than the patent intended initially, they were supported by both the intrinsic and extrinsic evidence. Because eSpeed’s Dual Dynamic and eSpeedmeter systems had mandatory re-centering features, they did not literally infringe.
Doctrine of Equivalents
The court upheld Judge Moran’s ruling that the doctrine of equivalents did not apply to the static elements in the claim. Even if the accused products only re-centered once or twice a day, allowing that re-centering to be captured by the doctrine of equivalents would vitiate the claims. Furthermore, prosecution history estoppel also barred equivalents. The patentee differentiated his invention by explaining that its “price axis do[es] not move.”
Willfulness
The Court upheld Judge Moran’s ruling overturning the jury’s willfulness finding. eSpeed’s prompt redesign efforts and immediate removal of infringing products were not objectively reckless. And TT offered no evidence that eSpeed sold Future Views during the contested period.
Indefiniteness
The Court held that “single action of a user input device” was not indefinite. Judge Moran correctly construed the term as requiring “an action by a user within a short period.” One of ordinary skill in the art could distinguish between single and multiple actions, even when a “single action” was a double-click.
Priority Date
The Court held that there was an issue of material fact regarding the priority date warranting a jury trial. The Court upheld the use of patent law experts, and found a sufficient basis for the jury’s priority decision:
Considering the undisputed knowledge of those skilled in the art, disclosure of a species in this case provides sufficient written description support for a later filed claim directed to a very similar and understandable genus. Accordingly, the patents-in-suit are entitled to claim priority to the provisional application.
Inequitable Conduct
The Court upheld Judge Moran’s ruling that failure to disclose certain software to the PTO was not inequitable conduct. The software was not material because the software’s use after the priority date would not have impacted the examiner’s analysis. And confidential use of the software for personal purposes was experimental.
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Continue Reading Questioning De Novo Claim Construction Review
President Obama announced a couple of nominations this week impacting the Northern District of Illinois and the national patent bar.
First, President Obama appointed WilmerHale partner Edward DuMont to the Federal Circuit. DuMont clerked for the Seventh Circuit’s Judge Posner and was an Assistant to the Solicitor General where he briefed and argued Supreme Court cases. DuMont currently has an appellate practice with a considerable focus on patent and intellectual property issues (click here for DuMont’s firm bio). DuMont also spent a year working for a law firm in Bangkok, Thailand. DuMont’s Supreme Court and varied appellate experience make him a very interesting choice to take Judge Michel’s place on the Federal Circuit bench.
Second, President Obama has nominated the Northern District’s Deputy U.S. Marshall Senior Inspector Darryl McPherson to become the Northern District’s next U.S. Marshall. McPherson has served as a Deputy U.S. Marshall since 1999 and won a Special Recognition award for his service as lead Deputy Marshall for Judge Lefkow.
Both nomination must be confirmed by a vote of the U.S. Senate.
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Continue Reading President Obama Makes Northern District of Illinois & IP Nominations
ImageCube LLC v. The Boeing Co., No. 04 C 7587, Slip Op. ( N.D. Ill. Jan. 22, 2010) (Dow, J.).
Judge Dow entered a final judgment as to defendant Boeing in this patent case and stayed the remaining claims pending a Federal Circuit appeal of the claim construction and summary judgment of Boeing’s final judgment. The parties all agreed that the Court’s claim construction and partial summary judgment ended the case as to Boeing. What was left of the case was the remaining defendants’ affirmative defenses and noninfringement, invalidity and unenforceability counterclaims. “Mere defenses” are not sufficient to avoid a Fed. R. Civ. P. 54(b) final judgment. Once one defense is decided for defendant, additional defenses need not necessarily be considered. And the remaining counterclaims would all benefit, should they be tried upon remand, from the Federal Circuit’s claim construction decision. An immediate appeal might also hasten resolution of the entire case. Plaintiff acknowledged that it was unlikely to pursue its claims if the Federal Circuit upheld the Court’s claim construction.
Finally, the Court noted that defendants, over plaintiff’s objections, sought and got the schedule they wanted addressing limited issues before full discovery. Defendants cannot, therefore, “complain too loudly” about seeking more definitive resolution of limited issues before turning to the remainder of the case.
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Continue Reading Court Enters Final Judgment as to One Defendant and Stays Case Pending Appeal
Rosenthal Collins Group, LLC v. Trading Techs. Int’l., Inc., No. 05 C 4088, Slip Op. (N.D. Ill. Sept. 18, 2009) (Dow, J.).
Judge Dow denied the parties’ cross-motions for summary judgment in this patent dispute regarding software for electronic futures trading using a static price axis.* Although the other related cases are stayed pending an appeal of the related eSpeed case to the Federal Circuit, declaratory judgment defendant Trading Technologies (“TT”) sought and Judge Moran agreed to allow this case to proceed based upon TT’s agreement that declaratory judgment plaintiff Rosenthal Collins Group (“RCG”) infringed even under the Court’s allegedly narrow construction of a “common static price axis” and “static display of prices.” TT sought to broaden the constructions on appeal. The parties agreed on how the accused Onyx software operated. The price axis was generally dynamic. But if a user pointed a cursor in the window containing the axis, the axis became static until the cursor was removed or after thirty seconds, whichever came first. TT identified this as Onyx’s order entry mode. And because Onyx has a static axis in order entry mode, TT argued that Onyx infringed based upon the order entry mode, even if it did not infringe in other modes. RCG argued that Onyx only had a single mode, and because the price axis was not consistently static, without manual recentering, there was no infringement. The Court held that whether Onyx operated in three modes and, therefore, infringed, or operated in a single mode and, therefore, did not was a question of fact. The case, therefore, was not appropriate for summary judgment.
The Court also stayed the case pending appeal of the eSpeed case, except for TT’s motion for default and sanctions.
* Click here for much more on this case and its related cases in the Blog’s archives.
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Continue Reading Whether Software Operates in One or Three Modes is a Question of Fact
Here are a few stories you do not want to miss:
The Wisconsin Law Journal has an article based upon a Northern District of Illinois case in which a summary judgment decision hinged upon a failure to substantively answer one of the other party’s Local Rule 56.1 statements of material fact. In that case, a procedural objection was made, but no substantive answer was given. So, when the objection was denied, the fact was deemed admitted. This is a point I have made often: follow Local Rule 56.1 closely and carefully.
The Blog of the Legal Times reported that in a recent interview the Federal Circuit’s Chief Judge Michel suggested that the next nominees to the Federal Circuit should have the following backgrounds: a patent-experienced district judge; a trial lawyer with patent experience; or a chief corporate lawyer with patent experience.
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Continue Reading Patent & Procedure News
Brinks Hofer’s Robyn Bowland is the winner of the 2008 George Hutchinson Writing Competition, Hutchinson was the first Federal Circuit Chief Clerk. The competition honors an excellent articls or paper from a law student. Bowland’s article — Distress Signals: Considering the Patentability of Signals in Light of Nuijten considered whether electromagnetic signals were patentable focusing on In re Nuijten. It is expected to be published later this month in the Federal Circuit Bar Journal. It is great to see another strong writer joining the Chicago IP bar.
* Hat tip to the Chicago Lawyer for identifying this story.
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Continue Reading Chicago IP Lawyer Honored for Law School Legal Writing
Making good on his promise to turn his IP Colloquium into National Public Radio for IP law, Doug Lichtman’s newest offering is an extended interview with Federal Circuit Chief Judge Michel. Click here to listen to Licthman’s interview, you can even apply for New York or California CLE credit after listening. Here are some of Judge Michel’s more interesting observations:
Petitions for rehearing are too often “shallow and weak.”
Votes denying en banc rehearings are often close, making the poor petitions for rehearing especially surprising and disappointing.
Parties interested in supporting cases with amicus briefs should consider filing briefs supporting rehearing petitions. An amicus brief that was both well researched and well written could play an important role in strengthening a case’s en banc potential and tipping close votes for rehearing.
In re Bilski did not answer all of the 101 questions because not all of the questions were raised in the case or ripe for consideration. It will take a series of 101 cases to flesh out the post-Bilski state of the law.
Judge Michel is hopeful that the new patent jury instructions — click here to read the Blog’s post about them — will help bring some clarity and continuity to, among other things, damages and obviousness instructions, although at the time of the interview it appeared that he had not seen the instructions yet.
The Doctrine of Equivalents has almost “dried up.”
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Continue Reading Chief Judge Michel: The State of Patent Law
At the request of Federal Circuit Chief Judge Michel, an all-star panel was established to create a comprehensive set of model patent jury instructions — click here to download them. The panel included patent litigation heavy weights like Don Dunner and federal judges — Judges Ward (E.D. Texas) and Whyte (N.D. Cal.). The Federal Circuit has not officially endorsed the jury instructions, but they are very comprehensive and deal with just about every recent case law development. In particular, they provide an excellent glossary of patent terms for the jury (something that should be in every set of patent jury instructions, but often is not) and they provide two KSR obviousness instructions, one for if the jury is making the final determination and one if the judge does (the panel could not come to a consensus on what the correct reading of the law was).
The one instruction I had hoped to see that was missing was an instruction for awarding royalties on post-verdict sales — see the MTTLR Blog on the issue here or read commentary on Judge Clark’s plan to submit post-verdict damages to the jury here at Michael Smith’s E.D. Texas blog. If anyone has seen an instruction for post-verdict damages, send it to me and I will post it for all to consider.
You can also read more about patent jury instructions in the Blog’s archives — click here for the Seventh Circuit’s model patent jury instructions and here for a list of jury instructions Northern District judges have offered as precedent in IP cases.
Hat tip to Dennis Crouch for linking to the new model jury instructions here at Patently-O.
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Continue Reading New Model Patent Jury Instructions
