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Judge Gilstrap’s Four-Factor Test

July 10th, 2017 Alexander No comments

U.S. District Judge, Rodney Gilstrap, the country’s busiest patent judge, took a broad stance on what constitutes a company’s place of business in terms of venue. This is a promising signal for patent owners who want to keep their cases in the Eastern District of Texas after the Supreme Court’s decision in TC Heartland.

Judge Rodney Gilstrap created a four-factor test leading his decisions regarding whether cases will remain in the district. This test takes into consideration whether a business has a retail store in the district in addition to the sales revenue the business has generated in the district. However, no single factor carries more weight than another. The test takes into account all of the circumstances of the case.

Since the Supreme Court’s decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, there has been a new emphasis on the “place of business” requirement of the patent venue statute. In this case, the Supreme Court stated that patent suits can only be filed where the accused patent infringer has an established place of business or where it is incorporated. During the weeks after the TCH Heartland decision, the majority of the district court decisions regarding venue were directed towards whether a defendant waived its arguments by not bringing them up sooner. Judge Gilstrap is the first to create a place-of-business test after the TC Heartland decision.

In developing this test, Judge Gilstrap stated that he gathered factors from other court decisions and modernized them, one of them being a 1985 Federal Circuit case- In re: Cordis Corp. Judge Gilstrap wrote: “Regardless of the area of law, a consistent theme among courts is that the technological advances that foster growth and advancement in today’s business world cannot be ignored.”

The first factor of the test takes into consideration whether a business has a physical presence in the district, such as warehouses and retail stores. If the business has employees or independent contractors there, it will also weigh in favor of the business. The second factor determines the extent to which a business demonstrates that it has a presence in the district. The third factor takes into account the benefits the business receives from its presence in the district, including sales revenue. The fourth and last factor examines a business’s targeted interactions with consumers there, such as localized customer support and marketing techniques.

This test is not binding on other district courts or judges within the district. It has yet to be determined whether other courts will chose to use this test or create a test of their own.

For more information, See Law360.



Samsung Says Jury Was Right To Invalidate Imaging Patent

October 21st, 2016 Alexander No comments

Samsung Electronics Co. Ltd. recently argued that intellectual property firm, IP Holdings Ltd., failed to offer relevant expert testimony at trial to prove the patent was not invalid as obvious.

In its brief, Samsung fought Imperium IP Holdings Ltd.’s contention that the patent for an imaging device was not obvious and that jurors should not have found it invalid. That same jury, however, determined that Samsung had infringed two of Imperium’s other imaging patents.  As a result, Samsung has been hit with a nearly $21 million verdict.

U.S. District Judge Amos L. Mazzant III concluded that Samsung’s violation of certain claims in two Imperium patents was deliberate and that the jury’s damages was justified by the fact that Samsung knew of the patents but did not avoid infringement and made multiple misrepresentations under oath.

Judge Mazzant noted that one Samsung expert familiar with its tracking of Imperium’s patent portfolio testified that the smartphone giant did not perform an analysis of Imperium’s patents within the last 5 years and did not monitor Imperium’s previous litigation involving the patents-in-suit.

But this testimony was shown to be demonstratively false by evidence showing that Samsung did track and indeed even attempted to obtain Imperium’s patents for years before the patent holder’s lawsuit.

Samsung also failed to offer any evidence at trial that it had independently developed and/or acquired the camera technologies at issue in this case, and failed to produce other relevant documents as well, which should have been turned over during discovery.

Accordingly, Judge Mazzant wrote, “The court enhances damages to the maximum extent allowable under Section 284 given the totality of the circumstances.”

“Aside from suggesting that such evidence existed in the prior art, Samsung merely offered generalized ‘reasons’ to solve the alleged issues of size, cost, performance, and versatility associated with interfaces and image sensors,” Imperium argued. “These reasons would not have motivated a person of ordinary skill in the art to arrive at the invention claimed in the ’290 patent.”

For more information, see Law360.



Apple Hit With $22M Verdict In Acacia Patent Trial

September 18th, 2016 Alexander No comments

A jury recently found that Apple Inc.’s iPhones and iPads infringe a patent on wireless communication technology owned by Cellular Communications Equipment LLC, a subsidiary of major patent licensing firm Acacia Research Corp.  The jury ordered Apple to pay $22.1 million in damages.

That patent was originally issued to a Nokia Corp. engineer and then acquired by Cellular Communications Equipment. It covers technology for managing the resources used to send data over a communications network and increasing the efficiency of communicating.

Apple argued that it does not infringe and that the patents are invalid as obvious or because the applicant omitted inventors from the patent.

In addition to Apple, the suit named as defendants the mobile carriers that resell Apple devices and configure them to make them compatible with their networks: AT&T Mobility LLC, Verizon Wireless, Sprint Solutions Inc., Boost Mobile LLC and T-Mobile USA Inc.

However, U.S. Magistrate Judge K. Nicole Mitchell granted the carrier’s motion to sever the claims against them and stay them until completion of the trial against Apple, finding that the claims are peripheral to the claims against Apple.

The carriers can only be liable for patent infringement if Apple is found to infringe, but if Apple were found liable and ordered to pay damages, Cellular Communications Equipment cannot recover damages from the carriers because it is barred from receiving a double recovery for the same sales.

For more information, see Law360.



Patent Cases Spike Ahead Of End To Bare-Bones Complaints

December 4th, 2015 Alexander No comments

The number of federal patent lawsuits filed across the U.S. has spiked dramatically recently, in order to overcome federal rules that raises the pleading standards for patent cases.

In the past two weeks, more than 570 new patent cases were filed in district courts. That is more than three times the number filed in the same period last year.

Just over 210 of those cases were filed the day before the elimination of a rule that allowed plaintiffs to rely on a bare-bones model complaint for patent suits.

Form 18 has long been criticized by patent defendants and judges because it permits vague, bare-bones complaints by nonpracticing entities and others, while requiring alleged infringers to incur discovery costs just to find out what they have been accused of.

With the new rules, complaints alleging direct patent infringement will be subject to the pleading standards established by the U.S. Supreme Court’s landmark decisions in Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal, which require plaintiffs to demonstrate that their claims are plausible.

The revision to the pleading standards are part of a broader set of changes approved last year by the Judicial Conference of the U.S. Hoping to modernize the Federal Rules of Civil Procedure, the policymaking body for the federal court system also streamlined the discovery process, among other things.

But attorneys said it might be several months before litigants have a firm grasp on how much detail must be included in complaints after the elimination of Form 18, as there is no specific checklist for what is required under the new rules.

For more information, see Law360.



Fujitsu Ordered To Hand Over Documents In IP Dispute

October 10th, 2014 Alexander No comments

In an ongoing legal battle, Tokyo-based Fujutsu launched a suit mid-2012 against the Illinois-based Tellabs, accusing the telecommunications company of infringing four of its patents covering optical transport systems technology. Fujitsu claimed Tellabs violated their patents by the sale of Tellabs 7100 Optical Transport Systems and Tellabs 7100 Nano Optical Transport Systems. The allegedly infringing products are optical signal amplifiers and optical signals attenuators.

This case is one of several in which the two companies have sparred over purportedly infringed patents. In September, Tellabs urged Judge Holderman to hold that an optical communications patent owned by Fujitsu was not enforceable against the company, following a finding that the patent is standard-essential and Fujitsu failed to license it on reasonable terms. Further, a prior ruling in May upheld a Fujitsu patent for optical communications technology but determined that Tellabs didn’t infringe the disputed intellectual property.

In this case, the Federal Circuit denied Fujitsu’s petition for a writ of mandamus to vacate an order compelling production of over a dozen documents that the company had claimed were protected by attorney-client privilege. The documents at issue contained entries regarding an investigation conducted by Fujitsu based on Tellabs products purchased from eBay.

The Federal Circuit stated that in order to obtain mandamus, Fujitsu had to establish a “clear and indisputable” right to relief and that they “lack adequate alternative means to obtain the relief” they seek. Additionally, even if both of those prerequisites are met, the Court must use its discretion to determine if the writ is appropriate under the given circumstances.

Following the Court’s ruling, Judge Holderman issued an order saying Fujitsu has been in contempt of his order that the documents be turned over since September — the date they were due to Tellabs’ counsel.

Judge Holderman mandated that Fujitsu produce legible, unredacted and translated copies of the subject documents to Tellabs’ counsel or face a $4,000 civil penalty. That civil penalty would be doubled and compounded daily for each day Fujitsu remained in contempt of the order.

For more information, see Law360.



Apple Devices May Infringe Flash Memory Patents

September 30th, 2014 Alexander No comments

The Ireland-based company, Longitude Licensing Ltd., owns and manages more than 6,500 semiconductor and storage patent and patent applications. However, they recently sued Apple Inc. in California federal court alleging its iPads, iPhones and iPods are infringing 13 patents related to flash memory technology. Longitude acquired the 13 patents as part of a portfolio from SanDisk Corp. 

In addition to unspecified damages, the Plaintiffs request a judgment that Apple has infringed the patents and future royalties payable on each infringing Apple product sold in the future and on all future products that are similar to the products found to infringe. Plaintiffs also want a judge to permanently enjoin Apple from further infringement of the patents and to award them litigation costs and further relief.

Is this a case of déjà vu for Apple? Longitude’s allegations are similar to claims that San Diego-based e.Digital Corp. made in early 2013, accusing Apple’s iPod, iPhone, iPad and MacBook of infringing three patents relating to flash memory for handheld recording devices. The parties eventually reached an undisclosed settlement.

For more information, see Law360



PTO Director David Kappos’ Speech: The Innovation Economy

June 14th, 2010 Alexander No comments
David Kappos USPTO Director

David Kappos USPTO Director

Thank you, Sarah, for that kind introduction.  I would like to thank the Center for American Progress for having me in today to speak with you about intellectual property’s critical role in today’s innovation economy.

America stands at a critical juncture in our economic evolution, and intellectual property will certainly play a key role in driving our economic growth and renewal.

As technological advances bring great change to the speed and complexity of American innovation, strong intellectual property protection and its effective enforcement will fuel innovation and jump-start our economy.

Today, I’ll speak about the critical role of IP in spurring innovation – and in increasing America’s competitiveness in the global economy.  The fact is that a dynamic and efficient patent system is essential to our economic well-being.

I’ll address the ways in which the USPTO can better ensure a well-functioning patent system; a patent system that enables small and medium sized businesses to secure the investment capital they need to bring their goods and services to market; and a patent system that helps create value and ensure cutting edge research gets funded at our universities.  Finally, I’ll discuss the imperative for government leaders – the Executive branch, the Congress and the courts – to nurture an IP eco-system that will promote innovation, and ensure America’s economic well-being.

The economic success of the United States is deeply rooted in the history of American innovation.  This country was founded by pioneers who developed new ways to cope with an unfamiliar environment, who cured disease and connected a country, and who led the world into the age of flight.  American innovators discovered the power of information technology and digital communication that brought unprecedented commerce, economic growth, and prosperity.

So, our history has been driven by innovation. And our economic security continues to depend upon our ability to innovate – and to compete in an innovation economy.   The key to economic success lies increasingly in innovative product and service development, and in intellectual property protection, which creates value for innovation.

IP is – in effect — the global currency of innovation.

Today, as a share of gross economic value, the United States invests more in intangible assets than any of our major trading partners, and our intangible investments now exceed those in tangible assets by more than 20%.

And it is patent-reliant industries, specifically, that make up the most dynamic parts of the economy—from nanotechnology to pharmaceuticals, from computers to bio-tech, and from fiber optics to green technology.

Timely and high-quality patents are critical to small businesses, which create two out of every three American jobs.   They are needed to foster research and development, which requires capital and investment.

And they are essential to attracting the capital needed to bring innovation to market.

Let’s take the example of a company called Xencor—outside Los Angeles—which creates cutting-edge biotherapeutics to treat cancer, inflammation, and autoimmune disease.  Xencor uses patents to protect its proprietary design automation technology.

Xencor CEO Dr. Bassil Dahiyat put it simply: “without patents, you cannot get funding, and without funding, you cannot grow and create jobs.”

In Southeast Michigan, one of the areas hardest hit by the recession, the company Axletech International is a global manufacturer of machine hardware, with a significant patent portfolio upon which it depends heavily.  Since it began as a spin-off in 2002, Axletech has more than doubled its workforce and now employs more than 1,000 people.

And while IP protection fuels investment and growth, astute innovators and entrepreneurs see IP as even more fundamental to value creation.  They recognize that patents also serve as vehicles for the transfer and diffusion of innovation.

We are beginning to talk about “markets for technology” and “markets for knowledge,” and patents serve a critical function in these markets.  They act as markers.  They guide technologists on both sides of the IP transfer equation to the know-how and trade secrets required to ensure a successful transaction and subsequent introduction of products and services into the marketplace.

Patents will continue to foster the movement of ideas to manufacture in the coming years and decades, and we at the USPTO are keenly aware of our responsibility in this regard.

Last month, the United States Patent and Trademark Office was described in Harvard Business Review as the “biggest job creator you never heard of.”

As our country seeks to regain the 8 million jobs lost during the recent recession, the USPTO is a great place to start.  Countless inventions that can spark new businesses are right there—sitting in the backlog.  And reducing that backlog is one of Secretary Locke’s and my highest priorities.

Why?  Because, the backlog of over 700,000 patent applications stands as a barrier to innovation and economic growth.  Recent reports conclude that the backlog could ultimately cost the US economy billions of dollars annually in “foregone innovation.”

The next laser, the next energy breakthrough, or the next cure for a disease, is buried in the files of the USPTO—and that is simply unacceptable.

So what are we doing about it?   First, we’re working to improve how we measure and track the quality of patent application review at the USPTO.  Quality patent issuances create certainty in the market.  Market certainty, in turn, facilitates growth.

Second, we are reforming the USPTO to reflect its criticality to our economy—and transforming the agency to match the fast pace of technology and innovation, and ensure the highest possible quality of review for all applications.

And we’re off to a credible start.  We’ve re-engineered the way we motivate and monitor our corps of examiners; redefined performance plans to reflect the importance of high quality patent examination and backlog reduction; fostered more communication between applicants and examiners to improve quality and efficiency; and we’re working to build a new IT infrastructure that will speed patent application processing and improve search quality.

But—most critically—to decrease pendency while improving the quality of our work product, we have begun to recognize what companies in the shipping business figured out some time ago—that all packages don’t have to get to their destination at the same rate.  Some require next day service while others can take a week.

It is clearly time for the USPTO—our nation’s Innovation Agency—to adopt private sector business practices and offer market-driven services.

We all know that patent applications, like the inventions they protect, vary significantly, and that some patents need to be issued more quickly than others.  Different firms and even individual applications have varying needs for different products and services when it comes to processing speeds.

So, the USPTO has been experimenting with various ways of enabling applicants to receive accelerated review of technologies in areas that are priorities for the Obama Administration – like green technology that is essential to battling climate change.

And we will be considering accelerated review in other categories of innovation that are vital to our national interest.

We’ve also implemented a program that allows applicants to decide what work needs to be prioritized at the USPTO.  Our recently announced expansion of Project Exchange gives all applicants with multiple filings greater control over the priority in which their applications are examined, enabling priority applications to be examined on an expedited basis.

By providing incentives for applicants to withdraw unexamined applications that are no longer important to them, Project Exchange will also help the USPTO reduce the application backlog.

Tomorrow, we’ll be announcing a request for public comment on our next initiative—a comprehensive, flexible, patent application processing model offering different processing options more responsive to the real-world needs of our applicants.  Please look for that announcement tomorrow.

Clearly, we do plan to continue empowering our applicants to prioritize their applications—and our workload—to meet the demands of the marketplace.

So, through programs like these, and through the tireless work of our examining corps, we will focus our efforts more effectively, reduce pendency, bring the backlog down, and foster innovation critical to the economic and social well-being of the United States.

But, America’s innovation success will require more than an effective USPTO.  It will be a function of many complex and overlapping innovation variables, including the promotion of best practices in disciplines where American innovation occurs.

Perhaps the most critical of these disciplines is university research.

Research conducted at American universities is vital to fostering innovation, ensuring economic opportunity, and creating American jobs.

For instance, the original patents on Recombinant DNA, the fountainhead for the biotechnology industry, came from university research.  Finding ways to ensure that important new technologies like this are taken from university lab to marketplace is a critical factor in our economic success.

And, universities are becoming more nuanced and strategic in their role as pillars of technology diffusion.

As a threshold matter, universities have begun, and must continue working cooperatively with their funding partners, to adopt best practices for capturing IP.  Because if universities and their funding partners don’t capture IP, the innovation it protects and jobs it creates become royalty free donations to our nation’s biggest economic competitors.  So while protecting IP is key, the purpose for protection has shifted—it is not to control the activities of funding partners.  It is to prevent appropriation into the low-cost labor market.

Once IP is protected, the second issue of paramount priority is the transfer of technology from university laboratory to marketplace.  The methodologies universities use to facilitate IP transfer are currently in flux, as traditional models evolve and new best practices emerge.

Universities on the cutting edge of this field realize that the long accepted choice between maximum diffusion of innovation and maximum revenue capture is a false choice.  Put simply, universities need not sacrifice their societal obligation to disseminate knowledge in exchange for research funding.

In fact, when executed well, diffusion-focused technology transfer generates more net aggregate funding, not less.

Now, royalty generation from university innovation will continue to play a role in the commercialization life cycle.  But it will synergize with diffusion-focused tech transfer.  And we will see less conflict between the models, because astute university innovators realize that when royalty generation comes into conflict with diffusion, it inhibits the fundamental mission of educating researchers and conducting research to produce breakthroughs that create American jobs and economic opportunity.  Astute university innovators are already working to a better end.

The net result of a focus on diffusion-based tech transfer is not only better technology diffusion, but increased revenue and funding through sponsored research that will help create new products and services and secure an innovation-driven future for the US economy.

In the proud history of the United States—innovation led development—IP led development—has created economic vitality and good jobs.

In fact, technological innovation is linked to three quarters of the Nation’s post WWII growth rate.  And between 1990 and 2007, compensation for jobs in innovation-intensive sectors increased by two and a half times the national average.

The US government has always played a critical role in ensuring innovation-driven growth.

During the deep recession of the 1970’s—innovation slowed dramatically and the manufacturing sector declined significantly.   In response, the US government launched a Domestic Policy Review aimed at reviving American industrial innovation.  This study, and others like it, led to the creation of the Court of Appeals for the Federal Circuit, which brought clarity to the law and improved certainty around IP rights—increasing their value.

At the same time, Congress realized the critical role of patents in innovation through university research and development.  So the Bayh-Dole Act, which encourages university patenting, was passed.

The increase in patent value and R & D that resulted from the patent system improvements of the late 1970’s and early 1980’s paved the way for a new era of economic growth and opportunity that lasted for the better part of two decades.

Now, as in the 1970’s and 1980’s, the United States stands at a crossroads of innovation.  Today we are presented with another innovation opportunity – and we again need sound IP policy and enforcement to increase the value of innovation.

We surely have not realized the full potential of IP.  In fact, the IP system has been characterized as the “sleeping beauty” of highly developed economies.  And it really is a “sleeping beauty” because our IP system has layed relatively dormant while the complexity and volume of technological innovation have grown exponentially.

If we don’t wake up, fast-developing competitors will continue to appropriate American ideas, products, and services.  American technology – and with it American jobs – will devolve to countries with cheap labor and inadequate IP protection.

To put it plainly, both appropriation and misappropriation of American IP mean the loss of American jobs in our most innovative fields—high-paying, high-skilled, high-value jobs.  And the flight of these kinds of jobs—and the flight of technology and production to our overseas competitors—poses a grave threat to our economic security.

We simply must do better to protect America’s competitive advantage in innovation before it is too late.  And that means faster and higher quality patents.  And it also means sound IP policy and the effective enforcement of IP rights.

President Obama released his Strategy for American Innovation last Fall, and identified innovation as the foundation of sustainable growth and quality jobs.  In it he identified three roles for the public sector.

First, the Government must invest in the building blocks of innovation such as human capital, infrastructure and fundamental research.  Second, it must nurture the right environment for private-sector investment and competitive markets by protecting IP rights. Third, the government must serve as a catalyst for breakthroughs related to our national priorities like clean energy and health care.

Ladies and gentlemen, it is incumbent upon us to develop a comprehensive and robust national IP policy.   America’s economic security depends on it.  The Commerce Department and the USPTO stand ready to provide leadership in formulating and executing that policy.   American business and enterprise must also play an active role in formulating this policy, based on sound business practices.

As I’ve outlined today, we must provide an environment that allows small businesses to protect their IP and attract capital based on their ideas. For these businesses to flourish, we must provide timely and high quality access to IP rights.  And we must ensure that universities press forward the frontiers of science, while working with the private sector to ensure that the value they create is both protected and diffused quickly for the benefit of the communities they serve.

All parts of the US innovation value chain must remain vibrant.  And if amplified by good government policy, the current re-aligning trends can support one another to preserve American leadership in the decades to come.

A sound national IP policy will lead to the creation and success of more innovative companies like Xencor and Axletech.  And it will ensure that we can leverage IP to safeguard our economic well-being.

If we act to meet these challenges, we can fuel decades of American economic growth.  The simple prerequisite:  a national focus on intellectual property as the currency of innovation.

Thank you.



Patents

April 22nd, 2010 admin No comments

A patent is an intellectual property right that is granted to an inventor by the government. A patent gives the inventor sole rights to the invention, and it excludes others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States for a limited time in exchange for public disclosure of the invention when the patent is granted. Intellectual property right was established over 200 years ago and is a part of the United Sates Constitution. Under Article 1, Section 8 of the United States Constitution, it states: “to promote the science and useful arts by securing for a limited time to the inventors the exclusive right to their respective rights and discoveries.”

In the United States there are three types of patents. Utility patents are granted to anyone who invents or discovers any new and or useful process, machine, article of manufacture, or composition of matter, or any new and useful improvement. Design patents are granted to anyone who invents a new, original, and ornamental design for an article of manufacture. The last type of patent, is a plant patent. These patents are granted to any person who invents or discovers and asexually reproduces any distinct and new variety of plant.