Category Archives: Litigation

Will the SHIELD act reduce patent litigation?

A new “loser pays” bill aimed at reducing “patent troll” litigation is getting a lot of attention since its introduction last week.

The Saving High-Tech Innovators from Egregious Legal Disputes (SHIELD) Act of 2013 proposes to allow defendants who prevail in patent lawsuits to recover costs from the plaintiff if the plaintiff is not: (i) the inventor or the original assignee; (ii) a party who made substantial investment through production or sale of an item covered by the patent; or (iii) a university or research institution.

According to co-sponsor Congressman Jason Chavetz (R-UT): Continue reading

Federal Circuit emphasizes distinction between patent and trademark law

A recent Federal Circuit decision permitted claims of patent infringement and trademark infringement may be brought in two separate lawsuits, even though the claims were filed by the same plaintiff and accused the same product of infringement.

The Court’s decision arose from a dispute between portable conveyor manufacturers Superior Industries, LLC and Thor Global Enterprises, Ltd.  Superior originally brought a trademark infringement action against Thor, asserting that Thor infringed Superior’s registered “FB” trademark by using the FB mark in Thor’s press releases and point-of-sale displays for a portable conveyor system. That lawsuit ended with a consent judgment that enjoined Thor from using the mark in connection with certain products.

Approximately 14 months after the consent judgment, Superior filed a second lawsuit in which it accused Thor’s portable conveyor system of infringing three U.S. patents. Thor moved to dismiss the case, arguing that the claims were precluded by the earlier-filed trademark suit. The district court agreed with Thor with respect to two of the patents, stating that “[t]he only reason the earlier suit did not contain patent allegations is because Superior Chose not to make them.”   (The third patent had not yet granted at the time of the trademark suit.)

On appeal, the Federal Circuit reversed.  In Superior Industries, LLC v. Thor Global Enterprises Ltd. (No. 2011-1549, Nov. 27, 2012), the Court explained that the patent and trademark suits involved different causes of action, each with a different set of facts.  “Superior’s trademark claims arose from Thor’s use of the FB mark in advertising – not from actual sales or offers for sale of the [product].”  In contrast, the patent infringement claims related to sales and offers to sale of the products themselves.

Accordingly, the Court found that the patent and trademark suits involved very different transactions.  Notably, the Court did not address whether Superior could have brought its patent claim if the trademark suit had related to use of the mark on the products themselves.   So, it’s not yet clear whether this case will have a broad impact, or whether its application will be limited to situations where the two lawsuits involve entirely different transactions.

Patents and Antitrust: Federal Circuit expands ability to bring antitrust claims against patent holders who fraudulently obtained patents

At a high level, patent and antitrust laws may seem to be at odds with each other.  Patent law grants inventors an exclusive right to make, use and sell their inventions.  On the other hand, antitrust law is designed to encourage competition and restrict  monopolies.  This apparent tension is resolved because patents have a limited life (typically no more than 20 years from filing), and are granted as a reward for encouraging inventors to disclose the details about their inventions.

To avoid situations where undeserving “inventors” circumvent antitrust law by obtaining a patent through intentional fraud on the Patent Office, the U.S Supreme Court has long held that a patent holder who enforces a patent obtained through intentional fraud may be subject to antitrust liability.  (see Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172 (1965)).

A Walker Process claim is not one to be brought lightly.   Continue reading

PWC Reports Sharp Rise in Patent Litigation Filings

A new study published by PriceWaterhouseCoopers reports that new patent lawsuit filings reached an all-time high in 2011, with a 22% increase over the number of patent lawsuits filed in 2010.

The study contains many useful data points.  Interesting facts include:

  • over the past five years, the annual median damage award for cases that reach a final a decision was approximately $4 million;
  • average damage awards in favor of non-practicing entities  were nearly double those for practicing entities over the last ten years;
  • the average time to trial in a patent case is 2.5 years, although significant variations in speed exist among the District Courts.

The increased number of patent filings may be attributed in part to the passage of the America Invents Act, which limited patent holders’ ability to sue multiple defendants in a single lawsuit.   After the law passed, patent holders were often required to file multiple lawsuits against single defendants, rather than a single lawsuit against multiple defendants.  However, because the AIA  took effect in September 2011 and thus only affected patent filings during the last four months of the year, the AIA alone is unlikely to be the sole factor that caused the spike.

The complete report is available on the PWC website.

Akamai: Inducement of patent infringement can occur even no single entity performs the entire patented method

[UPDATE:  In June 2014, the United States Supreme Court reversed the Federal Circuit decision discussed below.  For details, see the post linked here.]

The Federal Circuit recently made it easier for patent holders to address what the Court called “the problem of divided infringement,” i.e.,  a situation where a defendant induces several other parties to collectively perform all steps required to infringe a patent, but no single entity performs all of the steps itself.

In  Akamai Technologies, Inc. v. Limelight Networks, Inc. (No. 2010-1291, Fed. Cir. Aug. 31, 2012), an en banc decision of the Court overruled its 2007 decision (BMC Resources, Inc. v. Paymentech) which held that in order for a party to be liable for induced infringement, some other single entity must be liable for direct infringement. Continue reading

Patent Litigation and the Western District of Pennsylvania

Today’s Pittsburgh Business Times includes an article discussing the Patent Pilot Program and the U.S. District Court for the Western District of Pennsylvania.  The article begins by pointing out:  “Last year, 738 patent infringement suits were filed in U.S. District Court in Eastern District of Texas.  The Western District of Pennsylvania had 14.”  However, several attorneys (including yours truly) think that’s about to change.  Patent cases don’t move as quickly as they used to in traditional patent jurisdictions such as the Eastern District of Texas.  And while the parties  may benefit from the experience of judges who carry a heavy patent caseload, the patent pilot program will help provide additional judges (including those in Pittsburgh) with similar experience.

The full article is available on the Pittsburgh Business Times website.  (Subscription may be required to access the full article.)

Useful tools for patent attorneys — and free IP litigation alerts

This week I received a note from MaxVal, a company that serves patent attorneys and agents with a broad range of software and services for patent portfolio management.

One useful (and free) service that MaxVal offers is a page of free online patent tools, including:

– a Patent Widget that gathers information from multiple databases and presents bibliographic information, assignment data and maintenance fee data in one place;

– a Claim Chart Generator; and

– a IFW File Splitter that divides the PDF of a USPTO file history into individual documents based on bookmarks.

MaxVal is also offering a free one-year subscription to its daily IP litigation alert emails.  To subscribe, click here.

14 District Courts selected for patent pilot program

This week fourteen U.S. District Courts were selected to participate in a patent pilot program that is designed to enhance those courts’ expertise in complex patent litigation. 

The patent pilot program is a 10-year project in which judges who request patent cases will receive specialized patent law and case management training.  When a new patent case is filed in a participating district court, after an initial random assignment the case may be reassigned to one of the specially trained judges.

Courts that will participate in the program are:

  • Eastern District of New York
  • Southern District of New York
  • Western District of Pennsylvania
  • District of New Jersey
  • District of Maryland
  • Northern District of Illinois
  • Southern District of Florida
  • District of Nevada
  • Eastern District of Texas
  • Northern District of Texas
  • Western District of Tennessee
  • Central District of California
  • Northern District of California
  • Southern District of California

Some of the courts (such as those in Texas and California) were selected because they were among the 15 courts in which the largest number of patent suits were filed in 2010.  The other courts, including my local court of the Western District of Pennsylvania, were selected because they have already adopted (or will soon adopt) local patent rules.   A press release from the Western District of Pennsylvania notes that a goal of the program is to study whether focused patent experience among judges will decrease reversal rates and disposition times of patent cases:

 the Chief Judge of each participating court . . will report to Congress on a periodic basis during the ten-year Program with respect to whether the Program has succeeded in developing expertise and improved efficiencies in patent cases, and whether a court’s inclusion in the Program has affected the number of patent cases filed in that court.

The patent pilot program will begin in July 2011.

Federal circuit: manufacturer permitted to file declaratory judgment action when its customers face threat of patent infringement suit

In Arris Group Inc. v. British Telecommunications PLC, the Federal Circuit allowed a manufacturer to file a declaratory judgment action after its customers were accused of patent infringement, even through the manufacturer itself was not directly accused of infringement.  

In the case, British Telecommunications (BT) held several patents relating to voice over Internet protocol (VOIP) systems and services.  BT sent several letters to Cable One in which BT accused Cable One of infringing the claims, and BT engaged in licensing negotiations with Cable One.  Cable One purchased the allegedly infringing systems from Arris.  Arris participated in the licensing discussions with BT, but BT refused to include Arris as a party to the license agreement.  After settlement talks broke down, Arris filed a declaratory judgment action.

BT challenged Arris’ standing to bring the action, stating that BT never accused Arris of infringing the patents.  To determine whether Arris had standing to file the suit, the Federal Circuit applied the Supreme Court’s decision in Medimmune Inc. v. Genentech Inc., which states that declaratory judgment standing exists if “the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” 

Arris asserted that the potential for economic injury (loss of its customer relationship with Cable One) showed that such a substantial controversy existed.  The court disagreed, stating that economic injury alone is insufficient to create standing” in a patent infringement case.  However, the court found that Arris had standing for other reasons. Specifically, the court stated that:

where a patent holder accuses customers of direct infringement based on the sale or use of a supplier’s equipment, the supplier has standing to commence a declaratory judgment action if (a) the supplier is obligated to indemnify its customers from infringement liability, or (b) there is a controversy between the patentee and the supplier as to the supplier’s liability for induced or contributory infringement based on the alleged acts of direct infringement by its customers.

In the case, the court found a controversy between Arris and BT based on Arris’ potential liability for contributory infringement:   

When the holder of a patent with system claims accuses a customer of direct infringement based on the customer’s making, using, or selling of an allegedly infringing system in which a supplier’s product functions as a material component, there may be an implicit assertion that the supplier has indirectly infringed the patent.


[W]hen the holder of a patent with method claims accuses the supplier’s customers of direct infringement based on their use of the supplier’s product in the performance of the claimed method, an implicit assertion of indirect infringement by a supplier may arise.

Applying this standard, the court noted that BT’s infringement accusations against Cable One “explicitly and repeatedly” singled out Arris’ products.  Thus, the court found that BT’s assertions against Cable One also implied that Arris was infringing the patents, and the court held that Arris had standing to bring the action.

Federal Circuit narrows use of inequitable conduct defense in patent infringement cases

This week the Federal Circuit issued an opinion that raises the bar for defendants who assert inequitable conduct as a defense in patent infringement litigation.  The defense of inequitable conduct evolved over time as courts barred enforcement of a patent when the patent holder engaged in actions that misled or defrauded the courts or the USPTO.  As applied by the courts, inequitable conduct required both intent and materially affected the outcome of a case — such as a situation where an inventor was aware of a prior disclosure of an invention but intentionally withheld that information from the USPTO. 

Over time, the standards for intent and materiality changed.  In particular, Continue reading