Vertical Computer Systems, Inc. v. Interwoven, Inc.: A Transfer in Part

May 27, 2011

In a case involving application of the "first-filed action" doctrine and transfer, the district court in the Eastern District of Texas transferred a case as to one defendant but severed and kept the case as to two other defendants. One of the defendants in Texas, Interwoven, began the litigation, not in Texas, but in the Northern District of California by filing suit against Vertical Computer Systems, Inc. seeking a declaration that the Vertical patents were invalid and were not infringed by Interwoven. Vertical subsequently filed a patent infringement action on the same patents against Interwoven and two additional defendants, Samsung and LG, in the Eastern District of Texas. Samsung then filed a declaratory judgment action in the Northern District of California.

In analyzing the first-filed action doctrine on a motion to transfer, the district court agreed that the Interwoven action was filed first and that therefore the case against Interwoven should be transferred to the Northern District of California. The district court disagreed with Samsung, however, and found that the action against Samsung should remain in Texas as Samsung was not a party to the first filed case.

Continue reading "Vertical Computer Systems, Inc. v. Interwoven, Inc.: A Transfer in Part" »

Continuations, Parents and Loss of Priority

May 25, 2011

The written description requirement is of heightened importance in determining the priority date for continuation patent applications. Without a sufficient written description that supports and details the claims of the patent, the priority date of the parent patent may be lost for the continuation application. This issue was recently addressed by the Federal Circuit in the Anascape, LTD. v. Nintendo of America, Inc., 601 F.3d 1333 (Fed. Cir. 2010) decision and the decision is useful to review to understand the consequences of failing to have sufficient support in the written description for claims in a continuation patent.

Click here for a more detailed discussion: Anascape, LTD. v. Nintendo of America, Inc.

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The authors of www.PatentLawyerBlog.com are patent litigation lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.

Waiver of Attorney-Client Privilege

May 23, 2011

The district court determined that plaintiff had waived the attorney-client privilege because the plaintiff's in-house counsel revealed too much information in answering questions during a deposition. The defendants raised the waiver issue in the context of a motion to compel by contending that the plaintiff's in-house counsel's answers during a deposition revealed attorney-client communications and therefore waived the privilege regarding the plaintiff's motivation in seeking the reissuance of its patent.

The district court found that the in-house counsel "expanded on the statements to the PTO, revealing that because of the issue of the different effective filing dates, there was a specific concern that the mixed subject matter claims were technically anticipated by" another published application. The in-house counsel also explained that there were additional communications between himself and other in-house and outside counsel that led to this concern. The district court found that these types of statements were sufficient to waive the attorney-client privilege.

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Another Defendant is Sanctioned for Failing to Provide Discovery

May 20, 2011

In another decision involving sanctions for defendants failure to provide discovery, the district court for the Western District of Michigan granted plaintiff's motion for default judgment. The default was granted because the defendant had not participated in discovery. As the district court stated, "Defendants have not participated in discovery, but rather have refused to provide depositions or responses to [plaintiff's] written discovery requests."

The district court went on to note that defendants' conduct was willful in that the defendants had ignored discovery deadlines and previous orders from the district court. "Defendants have ignored discovery deadlines and other obligations imposed both by the Rules of Civil Procedure and explicit orders of the Court."

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Consumer Surveys in Patent Cases

May 18, 2011

In a recent case in the Eastern District of Texas, the district court addressed the admissibility of a consumer survey to show demand for the patented features in accused products. The district court rejected plaintiff's consumer surveys and granted the defendants' motion to exclude plaintiff's survey experts because the surveys did not measure the purported advantages of plaintiff's technology.

The surveys measured whether consumers valued incorporating internal antennas in cell phones in place of external antennas. The problem with these surveys, however, was that plaintiff did not invent--and the patents did not claim--internal antennas for cell phones. Instead, the patents were directed only to one type of internal antenna that had increase advantages over other internal antennas and external antennas because of multiband functionality and reduced size. Thus, the surveys did not measure the value of plaintiff's technology. "While Plaintiff claims that its experts contend that the patents-in-suit are 'fundamental' to internal antennas, the surveys are not tied to the alleged advantageous technical characteristics of the patents-in-suit. Put another way, the surveys do not measure how consumers value the purported advantages provided by Plaintiff's technology."

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Failing to Name All Inventors May Mean the End of Your Patent

May 16, 2011

It is well settled law that all inventors who contribute to an invention must be named on the patent application. Nonetheless, where there are many inventors who contribute to the conceptions and reduction to practice of an invention, it can be difficult to determine who should be listed as the inventors on the patent application. But taking the time to do this right is also critical. Because the failure to name all co-inventors can render the patent unenforceable, particularly if one or more of the named inventors intended to deceive the patent office, it is very important to thoroughly analyze who should be named on the patent application. In addition, listing people who are not inventors as inventors can have the same dire consequences--the inability to enforce the patent. The recent case of Advanced Magnetic Closures, Inc. v. Rome Fasteners Corp., 607 F.3d 817 (Fed. Cir. 2010) illustrates what can happen when an inventor misleads the patent office on the issue of who invented the invention covered by the patent.

Click here for a more detailed discussion of Advanced Magnetic Closures, Inc. v. Rome Fasteners Corp.

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The authors of www.PatentLawyerBlog.com are patent litigation lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.

Sanctions for Failure to Comply with Discovery Obligations

May 13, 2011

After a serious delay by the defendant in providing discovery, the district court granted plaintiff's motion to strike the defendant's answer and enter a default judgment. The district court found that the defendant continually mislead the plaintiff and the court regarding its discovery obligations and caused the case to be delayed for several years by doing so. "This Court gave [defendant] numerous opportunities to provide the requested documents, yet it chose to produce incomplete responses. . . . [Defendant] and [its counsel] affirmatively misled Plaintiffs -- and more importantly, this Court -- as to the production of documents and compliance with Court orders. . . . By failing to provide the discovery as ordered, [defendant] has prevented Plaintiffs from pursuing their claims and delayed this litigation for nearly seven years."

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Recapture and Reissue - Recent Developments in the Federal Circuit

May 11, 2011

In a recent decision from the Federal Circuit, In Re Mostafazadeh, Case No. 2010-1260 (Fed. Cir. May 3, 2011), the Federal Circuit affirmed the Board of Patent Appeals and Interferences' (the "Board") decision upholding the patent examiner's rejection of certain claims of a reissue patent application. The Federal Circuit affirmed the Board because the reissue application impermissibly attempted to recapture subject matter surrendered during prosecution of the original patent application.

The patent at issue, U.S. Patent Number 6,034,423 (the "'423 patent"), is directed to lead frame based semiconductor packaging. The '423 patent describes two embodiments, a pin-type package and a bottom-surface-mount package. The originally filed claims were rejected as either anticipated or obvious. The independent claims were then amended to add the requirement of "circular attachment pads," and the applicant argued that "circular attachment pads" were novel. As a result of the amendment, the '423 patent issued as amended.

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Another Court Severs Multiple Defendants - Interval Licensing LLC v. Apple Inc.

May 9, 2011

In yet another multi-defendant case, a district court has severed defendants from a patent infringement suit brought by a plaintiff against many defendants. In this case, the plaintiff brought suit against eleven defendants for infringing the same four patents. The district court granted defendants' motion to sever because the plaintiff did not allege that the defendants were engaged in the same transaction or occurrence.

The court began by noting a number of decisions that granted severance under Ninth Circuit precedent and it sharply distinguished cases from the Eastern District of Texas that denied motions to sever because those cases followed a different rule than what the Ninth Circuit employs. Based on Ninth Circuit law, the court found that the motion to sever should be granted because the defendants had not engaged in the same transaction or occurrence or series of transactions or occurrences. The fact that the defendants were allegedly infringing the patents in a similar way was not sufficient. The court stated: ""Plaintiff has not alleged that the Defendants have engaged in the same transaction or occurrence or series of transactions or occurrences. Rather, Defendants are accused of infringing the patents in similar ways, but not as part of the same transaction or occurrence or series of transactions or occurrences.

Continue reading "Another Court Severs Multiple Defendants - Interval Licensing LLC v. Apple Inc." »

Declaratory Judgment Jurisdiction, A Curious Decision in the Federal Circuit

May 6, 2011

Creating a circuit split with the Ninth and Tenth Circuits, the Federal Circuit drew a distinction between efforts directed toward commercialization of a patent and those efforts directed toward enforcement of a patent. The former contacts were held to be irrelevant to the personal jurisdiction analysis, while the latter contacts can confer personal jurisdiction but only if there are sufficient patent enforcement activities beyond the mere sending of a cease and desist letter. Radio Systems Corp. v. Accession, Inc., Case No. 2010-1390 (Fed. Cir. April 25, 2011).

The Radio Systems decision follows other Federal Circuit decisions in holding that sending enforcement letters or cease and desist letters to a potential infringer are insufficient to confer personal jurisdiction in the forum where the letters were sent. What makes the decision different, however, is that the patent holder in this case undertook substantial efforts with Radio Systems to commercialize the invention in the forum state before sending the enforcement letter. Indeed, it was undisputed that there were numerous contacts, including at least one in person meeting, in the forum state to discuss potential commercialization and a nondisclosure agreement (with a choice of venue provision for the forum state) was also signed. The pending patent application was also discussed by the patent holder in the forum state.

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Multiple Defendants, Misjoinder and Severance in District Court News

May 6, 2011

The multitude of multiple defendants in patent infringement suits continue to increase on a daily basis. But some district courts are putting a stop to the practice, at least in certain circumstances, by severing defendants that are misjoined. In a recent case in the Central District of California, the court granted a motion to dismiss for misjoinder when a plaintiff filed a patent infringement action against three unrelated companies for dissimilar products.

The court found that dismissal of all but the first named defendant was appropriate to eliminate the prejudice to the other defendants, i.e., by allowing each defendant to prepare their own defense instead of requiring them to jointly defend an action that involves very different products. The court also found that "dismissal will remedy the burden resulting from one judge presiding over a single action that consists of three separate and distinct cases."

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Your Assignment Agreements May Be Outdated -- Take Action Now

May 2, 2011

The Federal Circuit's recent decisions on the assignment of future inventions have drawn a sharp distinction in what would appear to be minor difference in language that have major consequences and significance to ownership. The language turns on the difference in the phrase "agree to assign" and the phrase "do hereby assign." Under the Federal Circuit's interpretation, the former language ("agree to assign") is only a mere promise to assign inventions that are created in the future and requires a subsequent assignment agreement, while the latter ("do hereby assign") constitutes an immediate assignment when the invention is created in the future without the need of an additional assignment agreement. As reflected in recent Federal Circuit decisions, this difference in language can have severe consequences in determining who owns later issued patents.

For more on these decisions see this link: Analysis of Federal Court's Ruling on Assignment Agreements in Abraxis Bioscience, Inc. v. Navinta LLC, Case No. 2009-1539 (Fed. Cir. Nov. 9, 2010) and others.

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The authors of www.PatentLawyerBlog.com are patent litigation lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.

Selling Disabled Software Code Is Not Direct Infringement - Mikkelsen Graphic Engineering, Inc. v. Zund America, Inc.

April 29, 2011

On April 7, 2011, the United States District Court for the Eastern District of Wisconsin denied plaintiff's motion for summary judgment of direct infringement. Plaintiff's patent, focused on graphics cutting, contained method claims that the district court concluded were not directly infringed. The district court concluded that even if defendant's software product contained an infringing search function, there was still no direct infringement because the defendant disabled that function when it sold the software. The district court reached this conclusion even though a user or customer could enable the infringing function. "[T]he question is whether the claims read on a device that contains source code for searching, even if that code has been disabled. . . . Nothing in [plaintiff's] apparatus claims suggests that a device that contains disabled source code for searching is within the scope of the claims. The claims are not drafted in terms of software components but in terms of the actual function of the apparatus. . . . When the code for searching is disabled, the device does not perform [plaintiff's] methods, and thus sales of the device with the code for searching disabled is not direct infringement."

This type of decision once again heightens the importance of including apparatus claims that closely track the method claims, if possible. Here, an apparatus claim was included but it was significantly different than the method claim. An apparatus claim that tracked the method claim would likely have survived the analysis of the district court.

The case is Mikkelsen Graphic Engineering, Inc. v. Zund America, Inc., Case No. 2-07-cv-00391 (E.D. Wis. April 7, 2011 (Adelman, J.)

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The authors of www.PatentLawyerBlog.com are patent litigation lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.

The En Banc Court Changes Infringement Analysis for Contempt Hearings

April 27, 2011

On April 20, 2011, the Federal Circuit sitting en banc vacated a $110 million damage award against Dish Network Corp. and EchoStar Corp. The Court rejected its two-step test that had been used to determine infringement of a redesigned product in a contempt hearing and instead adopted a single-step test for determining infringement in a contempt hearing. The new single-step standard focuses solely on whether there is "more than a colorable difference" in a newly redesigned product from a product that was previously found to infringe.

The district court had previously found that defendants' DVR products infringed a patent held by TiVo. After entering a judgment in favor of TiVo based on a jury verdict, the district court also entered a permanent injunction that required defendants to stop making products and to disable products it had already sold. Defendants redesigned their DVR products and TiVo, claiming that the redesigned products still infringed, moved for contempt. The district court found contempt based on continuing infringement and awarded $110 million to TiVo.

A Federal Circuit panel affirmed in a 2-1 decision and the Federal Circuit subsequently agreed to hear defendants' petition for a rehearing. Sitting en banc, the Federal Circuit addressed its two-step analysis set out in the KSM Fastening Systems, Inc. v. H.A. Jones Co., KSM Fastening Systems, Inc. v. H.A. Jones Co., 776 F.2d 1522 (Fed. Cir. 1985) decision. KSM set forth a two-step analysis involving first whether there was "more than a colorable difference" between the redesigned product and the infringing product and, if not, a second step would determine whether the redesigned product still infringed the patent.

The Federal Circuit rejected the KSM two-step test as "unworkable" and overruled KSM. The Court then held that a single step of determining whether there was "more than a colorable difference" between the old and new products would govern. Importantly, the Court noted that this single step test must focus on what attributes of the adjudicated product were previously found to infringe and those attributes must be compared in the newly redesigned product to determine if there is significant modification. "If those differences between the old and new elements are significant, the newly accused product as a whole shall be deemed more than colorably different from the adjudged infringing one, and the inquiry into whether the newly accused product actually infringes is irrelevant."

When it applied this new standard to the facts, the en banc Court concluded that the district court had erred because it did not compare the adjudicated feature to the same feature in the newly designed product, but rather analyzed another feature and held that this feature infringed and, therefore, defendants were in contempt. The Court held that a new feature, that was not comparable to a previously adjudicated feature, could not be determined to infringe in a contempt proceeding. Accordingly, the Court vacated and remanded the district court's contempt finding and directed the district court to compare the adjudicated features to the newly designed features to determine contempt under the single-step standard of "more than colorable differences."

TiVo Inc. v. EchoStar Corp., Case No. 2009-1374 (Fed. Cir. April 20, 2011)

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The authors of www.PatentLawyerBlog.com are patent litigation lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.

Do Not Overlook Community Property Laws When Acquiring Patents and Other Intellectual Property

April 25, 2011

Due diligence is an important part of acquiring patents and intellectual property, but community property laws are often overlooked in this process. Companies, when acquiring inventions from inventors or from small, closely-held companies, should carefully review the ownership of the patents to determine whether a spouse or former spouse of an inventor has rights to the patent or invention based on applicable state law. Failure to examine these issues and analyze the applicable state law could have disastrous consequences, particularly in California where California's community property laws provide spouses with rights to intellectual property under certain circumstances.

A recent case from the Federal Circuit highlights the importance that community property laws may play in determining who actually owns a patent. Enovsys LLC v. Nextel Communications, Inc., et al., 614 F.3d 1333 (Fed. Cir.

Read a detailed analysis of the case here: Do Not Overlook Community Property Laws When Acquiring Patents and Other Intellectual Property

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The authors of www.PatentLawyerBlog.com are patent litigation lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.