Category Archives: Litigation

PTAB: Action involving license agreement does not grant standing to file petition for covered business method review

A covered business method (CBM) review is a tool that the America Invents Act (AIA) created to allow entities charged with infringement of a CBM patent to challenge the patent’s validity. A recent decision from the Patent Trial and Appeal Board (PTAB) shows that the “charged with infringement” requirement must be satisfied, or the PTAB will deny the petition.

In Ocean Tomo LLC v Patent Ratings LLC, the PTAB considered a CBM petition against a patent that was part of a license agreement to Ocean Tomo. Ocean Tomo filed a declaratory judgment action against the patent holder (Patent Ratings) on several grounds, including a count seeking declaratory judgment of non-breach of the license agreement. Ocean Tomo then filed a petition for CBM review of the patent.

The PTAB denied the petition, noting that Ocean Tomo had not been charged with infringement of the patent, and its declaratory judgment action did not include a count seeking a declaration of non-infringement. Instead, the PTAB found that “[t]he parties’ contract, tort, and related causes of action concern and arise from the fractured employment and business relationship between Petitioner and … Patent Owner, not from charges of infringement of the ’849 patent.” On that basis, the PTAB denied the petition.

 

Will the Federal Circuit or Congress boost the ITC’s ability to block the importation of infringing digital files?

Section 337 of the Tariff Act of 1930 authorizes the International Trade Commission (ITC) to halt the importation of articles that infringe patents and other intellectual property rights. Until late last year, the ITC used this authority to block imports of digital files in response to allegations of patent infringement. However, the Federal Circuit upended that tactic in November when it ruled that “articles” do not include digital data files.

The Federal Circuit’s ruling in ClearCorrect Operating LLC v. International Trade Comm’n (Fed. Cir. Nov. 10, 2015) related to a situation in which the ITC acted on a complaint filed by Align Technology, Inc., which asserted that a Pakistan-based company and its U.S. subsidiary infringed Align’s patents for methods of creating and using orthodontic aligners. The court noted that “the only purported ‘article’ found to have been imported was digital data that was transferred electronically, i.e., not digital data on a physical medium such as a compact disk or thumb drive.”

The Tariff Act does not define the term “article,” so the court looked at various dictionary definitions, as well as other sections of the Tariff Act, and concluded that intangibles such as digital data are not “articles” that are within the ITC’s authority to block. The court also noted that Congress has debated various updates to the relevant sections of the Tariff Act in recent years, but it has not implemented any changes that would update the Act to expressly include digital data within the ITC’s authority.

The ITC has requested an extension of time (through January 27) to request an en banc rehearing of the decision. It is widely expected that the ITC will file the rehearing petition.

The ClearCorrect decision followed another Federal decision (Suprema v. International Trade Comm’n) that expanded the ITC’s authority to block importation of devices (e.g., fingerprint scanners) that are not infringing upon entry into the U.S., but which do infringe after certain software is loaded on the devices. Some may view the Suprema and ClearCorrect decisions to be at odds with each other. If the Federal Circuit revises the ClearCorrect decision in a rehearing, the result could create a significant roadblock for importers of products, software and data sets that infringe U.S. intellectual property rights.

Western District of PA court proposes changes to local patent rules

WDPAThe United States District Court for the Western District of Pennsylvania has proposed a set of changes to its local rules governing patent infringement cases. The proposal would change and clarify several procedures, including:

  • the Initial Scheduling Conference will be replaced with a Planning Meeting and Report that will address more than just scheduling, such as whether a special master may be helpful, early motions, the format of the claim construction hearing, and whether a tutorial will be used;
  • the plaintiff’s Initial Disclosures must include all documents evidencing ownership of the patent;
  • the defendant’s Initial Disclosures must include summary sales or use information about the accused product process;
  • the plaintiff must provide a good faith damages estimate within 14 days of the defendant’s disclosure of summary sales information;
  • additional model language for a Protective Order is provided;
  • more precise pleading requirements for infringement will apply, including additional detail about the specific statutory section(s) asserted, direct infringement, and the doctrine of equivalents;
  • new requirements on amendments of contentions, advice of counsel defense, and a prehearing statement.

The changes adapt various requirements that some other courts are already using, along with recent changes to the Federal Rules of Civil Procedure.  The court will accept comments on the proposed changes through July 6, 2015. Additional details are available here.

What is “patent misuse”?

“Patent misuse” is perhaps one of the most “misused” phrases in patent law. When faced with a patent lawsuit or even just a cease-and-desist letter, accused infringers who disagree with the patent holder’s actions often ask whether they can counter the infringement accusation with a claim of patent misuse.

Which leads to the question: what exactly is “patent misuse” in U.S. patent law?

Patent misuse can occur when a patent holder improperly tries to expand the scope of the patent in a way that has an anti-competitive effect. (See B. Braun Med., Inc. v. Abbott Labs, 124 F.3d 1419, 1426 (Fed. Cir. 1997).) Patent misuse requires more than just aggressive litigation tactics or disagreement as to whether or not an accused product actually infringes: “the defense of patent misuse is not available to a presumptive infringer simply because a patentee engages in some kind of wrongful commercial conduct.”  Princo Corp. v. International Trade Commission and U.S. Philips Corp.616 F.3d 1318, 1329 (Fed. Cir. 2010) (en banc). Because patent misuse typically requires an anti-competitive effect, courts give the doctrine a “narrow scope.” Id.  Even a finding of anti-competitive effect may not be sufficient to find that patent misuse occurred.   Continue reading

Comparing the Innovation Act and the STRONG Patents Act: competing proposals for patent reform

2015 could 37444451_sbe a pivotal year for U.S. patent reform, with two significant — and very distinct — patent reform bills pending before Congress.  This article compares the two bills, the Innovation Act and the STRONG Patents Act, the forces behind the bills, and the next steps in the U.S. patent reform debate.

Introduced in February 2015 by Rep. Bob Goodlatte as a measure to “curb abusive patent litigation,” the Innovation Act picks up where the America Invents Act of 2011 (AIA) left off by proposing additional reforms to patent litigation procedures. The Innovation Act would also streamline some of the AIA’s mechanisms for challenging patents.

In March 2015, Senator Christopher Coons and others introduced the STRONG Patents Act as a way to “reduce abuse while sustaining American leadership in innovation,” The STRONG Patents Act includes some reforms that are similar to those of the Innovation Act, along with several other sections that are designed to protect the positions of patent holders.

Significant provisions of each bill include: Continue reading

Federal Circuit: Private entities do not infringe patent when performing “quasi-governmental actions”

31220041_sPrivate entities cannot be liable for patent infringement when performing “quasi-governmental actions” with the express or implied consent of the U.S. government, according to a recent decision of the U.S. Court of Appeals in Iris Corporation v. Japan Airlines Corporation (Fed. Cir. 2014).

Iris Corporation’s patent number 6,111,506 covered a method of making an identification document (such as a passport) with a contactless communication unit.  The case arose after Iris accused Japan Airlines Corporation (JAL)  of infringing Iris’ patent by scanning the electronic passports of its U.S. passengers.  Iris argued that by using and scanning passports that contain RFID chips, JAL infringed the patent.

At least two U.S. statutes required JAL to perform the scanning. Because of this, in its defense JAL argued that it could not be liable for infringement because its actions were required by federal law.  JAL also noted that 28 U.S.C. §1498(a)) states (with emphasis added):

Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner’s remedy shall be by action against the United States.

The court agreed with JAL’s argument.  The court noted that an activity is “for the United States” if two requirements are met: (1) it is conducted “for the Government,” and (2) it is conducted “with the authorization or consent of the Government.”

The court found the first requirement to be satisfied because the scanning of passports was a “quasi-governmental activity” done for the benefit of the U.S. government.  The second requirement was satisfied because “JAL cannot comply with its legal obligations without engaging in the allegedly infringing activities.”

Because of this, the court dismissed the case and held that IRIS’s exclusive remedy is to file suit against the U.S. government, not any private entity.

(Photo credit: <a href=’http://www.123rf.com/profile_kritchanut’>kritchanut / 123RF Stock Photo</a>)

Supreme Court reverts to stricter standard for finding induced patent infringement

Continuing its string of reversals of Federal Circuit patent decisions, the United States Supreme Court has done it again.  In  Limelight Technologies, Inc. v. Akamai Technologies, Inc., the Court ruled that a defendant can be liable for induced infringement of a patented method only if a single entity directly infringed the patent by performing all of the method’s steps.

The Federal Circuit decision at issue made it easier for patent holders to sue in a situations where no single entity performed all of the steps of a patented method, but several parties collectively performed all of the steps. In that decision, the Federal Circuit held that a defendant who performed some steps of a method and encouraged others to perform the rest could be liable for inducement of infringement.

In the Limelight decision, the Supreme Court pulled no punches when explaining that the Federal Circuit got it wrong: Continue reading