Posts Tagged ‘Litigation’

High Court To Reconsider Ban On Expired-Patent Royalties

December 18th, 2014 Alexander No comments

The U.S. Supreme Court agreed to review a 50-year-old rule barring royalty agreements that extend beyond the expiration of a patent, a standard the inventor of a Spider-Man toy argues is outdated and anti-competitive.

In 1990 Kimble invented a Spider-Man wristband toy that could shoot foam string and got Marvel to agree to compensate him if it used his idea. The company later created the Web Blaster toy, but Kimble never received any payments, and he filed a 1997 patent infringement and breach of contract suit.

Marvel and Kimble settled the suit in 2001 when the company agreed to purchase the patent for about $500,000 and pay Kimble a 3 percent royalty on product sales.

But in 2006, Marvel licensed the right to produce the Web Blaster to Hasbro Inc. A number of disagreements then arose between Marvel and Kimble concerning the royalty payments, resulting in the current breach of contract suit, filed in 2008.

The justices granted a petition for certiorari by inventor Stephen Kimble and the high court will review its own 1964 decision in Brulotte v. Thys, which held that licenses requiring royalty payments for the use of a patent after it expires are per se unlawful. The justices agreed to hear the case even though U.S. Solicitor General Donald Verrilli Jr. told the court in October that Brulotte remains good law and should not be reviewed.

Kimble’s attorney said that he and his client are gratified that the justices took the case and are looking forward to arguing that the Brulotte rule “should be resigned to the dust heap of history.”

“Brulotte’s per se rule has, for 50 years, damaged the American economy by forbidding licensing practices that would provide unique pro-competitive benefits,” Kimble’s attorney said.

The rule has suppressed innovation by hindering the commercialization of life-saving medical treatments by universities and research hospitals, he said.

“And it has been a trap for the unwary and an instrument of injustice when wielded by large, sophisticated licensees to deny small inventors their contractually guaranteed royalties under circumstances where those inventors had no actual market power, and had applied no coercion during contract negotiations,” he said.

According to Marvel, the “core bargain” of the patent system is that inventors must publicly disclose their invention in return for a limited period of exclusivity.

“Brulotte’s conclusion that permitting post-expiration royalties would upset this bargain is justified and is independent of antitrust principles,” Marvel said.

Likewise, Verrilli told the court in October that the Brulotte rule “fits comfortably within a line of precedents establishing that the federal patent laws are not indifferent to what happens when a patent’s prescribed term expires.”

“Rather, those laws reflect an affirmative congressional policy judgment that the patented invention should thereafter be freely available for exploitation by others and for enjoyment by the general public,” he said.

For more information, see Law360.

Categories: Intellectual Property

FedEx Nabs Inter Partes Review Of Shipment-Tracking Patent

December 11th, 2014 Alexander No comments

The U.S. Patent and Trademark Office patent board recently opted to institute inter partes review of a shipment-tracking patent held by licensing company IpVenture Inc., finding that FedEx Corp. has a decent chance of showing that IpVenture’s claims are either obvious or anticipated.

The USPTO’s Patent Trial and Appeal Board panel ruled that FedEx had a shown a “reasonable likelihood” of establishing that all 30 claims in IpVenture’s tracking patent would be anticipated or obvious in light of prior art. The panel therefore instituted inter partes review of the tracking patent.

FedEx filed for inter partes review of the tracking patent in May, arguing that a 2002 patent application publication that disclosed a system for tracking packages had anticipated 16 claims of IpVenture’s patent. The rest of the claims were obvious in light of a combination of the 2002 application and two patents issued in 2005 and 2007, FedEx argued.

In response, California-based patent licensor IpVenture claimed that FedEx’s petition hadn’t given the correct claim construction and had failed to show that the two cited patents were actually prior art.

But the panel said  that IpVenture hadn’t explained how any of FedEx’s arguments are incorrect due to “allegedly faulty claim constructions” and hadn’t pointed to any claim limitations that aren’t disclosed in the 2002 application publication.

The panel also found that the two cited patents qualified as prior art for the purpose of figuring out whether to institute a trial after noting it believed the correct priority date for the challenge claims wasn’t earlier than March 26, 2003.

A FedEx spokesman stated that the company welcomes the PTAB’s decision as it believes it bolsters its case.

“We believe the U.S. Patent and Trademark Office’s decision to institute review of IpVenture’s patent supports FedEx’s position that there is no merit to the allegations in the related patent litigation,” the spokesman said.

For more information, see Law360.

Categories: Uncategorized

Alston & Bird Hit With Malpractice Suit Despite Successful Litigation

December 7th, 2014 Alexander No comments

Alston & Bird LLP was slapped with a malpractice suit by a government subcontractor claiming the firm mishandled an easily winnable intellectual property suit that ended up drowning the company in $10 million in unnecessary bills.

The suit began when Brookwood was sued by Nextec Applications Inc. in 2007 on allegations that clothing it provided to fulfill a U.S. Army contract for cold weather gear used technology developed and patented by Nextec.

Brookwood Companies Inc. state Alston, along with partner Blas Arroyo, pocketed $4 million in a suit the firm should have filed to dismiss from day one and got the company so tangled in the litigation that it ultimately had to spend $10 million before prevailing at trial.

“Such conduct clearly fails to reflect the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession,” according to the complaint, “Defendants’ negligence and breaches of duty did not merely make them $4 million richer, it made their client $10 million poorer.”

The case was an easy win, Brookwood contends, because Nextec was prohibited by federal statute from suing a company that infringes a patent during the performance of a government contract. The company alleges Alston demonstrated knowledge of the statute via a letter sent to Nextec counsel when the plaintiff initially threatened to sue.

However, that knowledge did not prevent the company from waiting over a year to file for summary judgment, Brookwood claims. The motion it did eventually file sought to toss only some of the claims from the suit and made it clear that partner Arroyo, who had little experience in New York federal courts, was out of his depth.

“[T]hey bungled the motion so badly that simple negligence would not seem to explain it,” Brookwood said.

The firm’s negligence was prompted by a desire to keep churning bills, the complaint alleges.

An Alston representative called the allegations meritless and said the firm was “proud of its representation of Brookwood.”

“Before Brookwood decided to retain successor counsel, Alston & Bird lawyers had obtained the dismissal of the vast majority of claims asserted against Brookwood and had laid the foundation for the defenses that proved successful at the trial of the remaining claims,” the representative responded, adding that the firm was “surprised” the company decided to pursue malpractice claims based on a case that was successfully litigated.

For more information, see Law360.

Categories: Uncategorized

Judge Rips ‘Ridiculous’ Nokia Bid To Seal

November 26th, 2014 Alexander No comments

A California federal judge denied and ripped into Nokia Corp.’s latest “ridiculous” request to seal documents in its fight with Samsung Electronics Co. Ltd. over the leaking of patent licensing terms between Nokia and Apple in Samsung’s ongoing patent war with the iPhone maker.

Judge Paul Grewal’s order declines Nokia’s request for leave to file a reconsideration of his earlier order denying seal on certain documents. This marks the latest instance of the judge making no secret of his exasperation with a flurry of seal requests from all the parties in the suit, which Nokia was brought into after Samsung disclosed the confidential details of a licensing deal between Apple and Nokia.

“The undersigned is not quite sure, but sealing in this case may just have officially passed from the sublime to the ridiculous,” Judge Grewal’s order says.

Among the portions Nokia wants blacked out are certain passages of publicly available news stories estimating the terms of Apple’s patent license with Nokia despite the fact that the articles are “available to anyone on the planet with a web browser and basic internet access,” Judge Grewal says.

The court may have been more forgiving of Nokia’s request if this were the second, third or fourth time, “but at some point, the cost of such unwarranted sealing requests to the taxpayers, the press and other parties with equally important claims to the court’s resources must take priority.”

Also in June, Judge Grewal addressed all the parties’ then-recent requests to seal dozens of documents, largely keeping them unsealed. He said there still was a backlog of requests stemming from 26 separate administrative motions to seal 134 documents.

At that time, he said that although “old dogs, it turns out, can learn new tricks” when it comes to exercising restraint with seal requests, Nokia’s seal requests were not narrowly tailored to confidential business information.

These disputes arise as part of the larger patent infringement suit Apple filed against Samsung, accusing it of infringing several design and utility patents pertaining to iPhone and related technology. A $930 million district-court verdict against Samsung is pending on appeal before the Federal Circuit.

For more information, see Law360.

Categories: Intellectual Property

Judge Recuses Herself In Cochran Firm Trademark Suit

November 19th, 2014 Alexander No comments

A California federal judge on Monday recused herself from a trademark dispute between The Cochran Firm PC and a former partner, Randy McMurray, after acknowledging that she had heard a Cochran Firm associate speak about its structure, an issue that’s at the heart of the former partner’s argument that the trademark is invalid.

Johnnie Cochran and his fellow partners changed the name of their law firm to The Cochran Firm in 2004 and registered the name with the U.S. Patent and Trademark Office in 2005. McMurray was hired with the firm in 2000 and became a partner in 2003.

In 2007, with The Cochran Firm’s blessing, McMurray formed The Cochran Firm Los Angeles LLP. But after years of attempts to negotiate a formal agreement between the firms, The Cochran Firm sent McMurray a cease-and-desist notice in 2012, saying he was no longer allowed to use the Cochran Firm mark or anything similar. McMurray allegedly ignored the notice and continued to use the name.

McMurray alleges he was promised continued use of Cochran’s name in exchange for assuming the firm’s Los Angeles office. The Cochran Firm has disputed McMurray’s claims, saying he refused to sign partnership agreements with the national firm.

McMurray then sought to disqualify U.S. District Judge Beverly Reid O’Connell after learning that she had been present to hear statements made by a Cochran Firm associate. The associate stated during a seminar attended by Judge O’Connell that the Cochran Firm is a national office — a claim McMurray disputes — making Judge O’Connell a witness to a disputed evidentiary fact, according to his motion.

During the seminar, which was on the topic “Civil Rights Cases” and organized by the Consumer Attorneys of Los Angeles Association, the associate said that she worked “at The Cochran Firm in Los Angeles,” that “The Cochran Firm is a national office,” that “we get tons of civil rights cases” and that “in our office, we get a lot of calls” from consumers.

McMurray’s motion states that the associates exuberance in making these public statements could give a reasonable person the impression that it was a deliberate attempt to stage a performance or a ‘preview’ before the judicial officer presiding over this action.

“The court concludes that an appearance of bias may be raised if the court were to possess personal knowledge of statements made regarding the structure of the Cochran Firm,” Judge O’Connell said.

Whether The Cochran Firm is a national office or a network of partnerships is currently being considered. In May, the appeals court left in place a preliminary injunction blocking McMurray from using attorney Johnnie Cochran’s name for his own firm, but remanded the case so the lower court could reconsider McMurray’s unclean hands defense.

That defense alleges that The Cochran Firm’s ownership of the Cochran mark is invalid because it committed fraud on the U.S. Patent and Trademark Office by misrepresenting itself as a single law firm partnership.

An attorney for The Cochran Firm stated that while she thought the judge’s recusal was unnecessary, she and her clients respected her decision.

However, in its May opinion, the Ninth Circuit ruled that the structure of The Cochran Firm’s business “is important in assessing whether [the firm] has unclean hands.”

“Specifically, [The Cochran Firm] may be misusing the trademark to deceive the public into believing it is a single, national firm, when in fact it is a network of separate partnerships,” the panel wrote.

For more information, see Law360.

LinkedIn Victory Over AvMarkets Patent Infringement Suit

November 14th, 2014 Alexander No comments

In February 2013, AvMarkets Inc. filed suit against accussing LinkedIn of infringing a patent, the claims of which are directed to creating a product catalog to generate sales leads over the Internet.

AvMarkets, which runs, describes itself as a technology and aviation services company whose core product is its online marketplace, where aviation and aerospace companies buy and sell their products and services.

In June 2013 LinkedIn filed a petition for covered business method patent review of the patent in suit under Title 35 of the U.S. Code’s Section 101, a section of federal patent law pertaining to what is eligible for patent protection. In the following November, the Patent Trial and Appeal Board granted a review and held an oral hearing in June.

The board has handed LinkedIn a win in the company’s petition for a covered business method patent review of a Web sales lead generation patent held by a company whose core product is an aviation and aerospace marketplace, ruling that the challenged claims are too abstract to be patentable.

The board found that LinkedIn has proven that the patent’s claims, which describe a “method for generating increased numbers of leads via the Internet,” are directed to the abstract idea of creating a product catalog on the Internet and are unpatentable subject matter under the standard clarified in the U.S. Supreme Court’s recent ruling in Alice Corp. v. CLS Bank International.

The claims “lack limitations that meaningfully limit the abstract idea” of the patent, the board said.

Under Alice, a patent’s claims were invalid because they were tied to an abstract idea and that implementing the claims on a computer did not render them a patentable invention.

LinkedIn argued that the claims in the patent are directed toward an abstract idea and do not implement a practice application warranting patent protection. The limitations in the claims only add “conventional and routine limitations to the underlying abstract idea” and only require technology that already existed in 2007, when the patent was filed, LinkedIn said.

AvMarkets rejected that argument, saying that the claims cannot be performed on a general-purpose computer and require specially programmed Web servers in order to function.

The board found that the claimed invention only required a general-purpose computer, and furthermore, the limitations AvMarkets identified as meaningful “represent merely routine computer technology” used in conjunction with a conventional network such as the Internet in a conventional manner, generating Web pages when a hyperlink is clicked, according to the decision.

AvMarkets had also contended that since other methods of providing product catalogs exist on the Internet, the claims are not an inherent attempt to preempt all ways of creating a product catalog and providing it over the Internet.

However, according to the board, that argument didn’t render the claims patentable because limiting an abstract idea to a specific field of use or adding some token post-solution activity does not render an abstract concept patentable.

Receiving part numbers, listing them on a Web page and generating a Web page for any activated part number link all represent such “insignificant post-solution activity as they do not represent significant meaningful limitations on the claims,” the board said.

“The fact that AvMarkets’ claims could be written differently does not demonstrate that the limitations added to the abstract idea are meaningful,” the board said.

For more information, see Law360.

Apple Triumphs in GPNE’s $94M Patent Trial

November 8th, 2014 Alexander No comments

Apple Inc. triumphed in GPNE Corp.’s $94 million patent trial when a California federal jury unanimously found that Apple’s iPhones and iPads did not infringe two data-communications patents. On the down side, Apple failed to convince jurors that those patents are invalid.

The jury, comprised of seven women and one man, reached its verdict in the two-week trial after less than a day of deliberations. Their only question was whether a decision on a patent’s validity or invalidity would “apply only to Apple, or to the patent in general.”

Apple championed the verdict in a statement slamming GPNE as a “patent troll.”

“We are pleased the jury in California saw through GPNE’s attempt to extort money from Apple for 20 year old pager patents that have expired, wasting time for everyone involved,” Apple said. “GPNE is a patent troll with no active business other than patent litigation. They have sent more than 300 demand letters in the past year to everyone from truckers and farmers to roofers and dairies threatening costly legal entanglements if these small businesses didn’t pay them off — this isn’t right.”

GPNE’s attorney was disappointed in the jury’s decision, but is not giving up hope. “It was a hard fought trial with a tough claim construction in a case in which our firm was hired a few months ago. We strongly believe the judge will address the underlying legal issues in post-verdict motions,” he said.

At the start of the trial, GPNE’s attorney said Apple’s mobile devices infringe inventions that date back to 1993 but were updated in GPNE’s Patents that were assigned in 2010 and 2009. Both describe how a mobile device can “reserve” space to send out a message on a cellular network.

“These are very valuable patents that enable people who use iPhones and iPads to communicate and transmit lots of data,” GPNE’s attorney said said. “But Apple isn’t paying for it … Apple’s use of GPNE’s property without permission is why we’re here.”

In a previous blog post, we mentioned how GPNE is a Honolulu, Hawaii-based company and was born out of two other companies, first Pioneer Tech Development Ltd. and later Digicomm Ltd. GPNE chairman invented the technology described in the patents in the early 1990s while trying to come up with a reliable way to communicate between mobile devices in Hawaii, where cell reception was poor and mountains often got in the way.

The invention allowed devices to maximize their use of the airwaves while seamlessly transmitting data, which could minimize both the need for more infrastructure and the costs associated with that infrastructure, she said. But recently, GPNE discovered that a number of mobile companies, including Apple, were using its technology. Other companies such as Nokia, Samsung, and Motorola have licensed GPNE’s patents.

GPNE’s damages expert, studied GPNE’s licensing agreements with other mobile-phone makers, including Samsung and HTC, and learned those companies had paid royalties of roughly $1 per phone to license the company’s patents. Apple sold nearly 94 million allegedly infringing iPhones and iPads, leading GPNE to conclude that Apple should pay $94 million in damages.

Apple’s attorney argued that its iPhones and iPads don’t infringe GPNE’s patents because the inventions only cover mobile communications from pagers, which are named specifically in both patents. Two-way paging systems function differently from cellphone systems, providing more powerful signals that can reach places mobile phones can’t, such as basements and elevators.

While Apple’s attorney was stymied at trial by Judge Lucy Koh for calling GPNE a “patent troll” he found other ways to describe the company to the jury.

“It’s a company that doesn’t make anything. It’s a company that doesn’t sell anything,” he said, noting that GPNE sent roughly 300 letters to a variety of companies, threatening to sue for patent infringement if the targets didn’t license GPNE’s patents. “That’s legal. What are they interested in? Are they just trying to get money?”

For more information, see Law360.

GPNE Seeks $94M In Damages From Apple

October 23rd, 2014 Alexander No comments

Apple Inc. bashed GPNE Corp.’s $94 million damages demand as “extreme” and “unreasonable” during closing arguments in GPNE’s trial accusing Apple of selling almost 94 million iPhones and iPads that infringe two data-communications patents. Apple went on to tell the jury that Apple did not infringe any of GPNE’s patents and it should not pay anything.

The patents in question describe how a mobile device can “reserve” space to send out a message on a cellular network. GPNE invented the technology described in the patents in the early 1990s while trying to come up with a reliable way to communicate between mobile devices in Hawaii, where cell reception was poor and mountains often got in the way.

“Apple respects patents, and it respects innovation. It will not capitulate to a company that’s stretching its patents. It’s not right, and it’s not fair,” Apple’s attorney argued.

Apple’s attorney further stated that other companies that licensed GPNE’s patents paid a fraction of what the company says Apple owes for allegedly infringing its patents. Those companies that took licenses did so because GPNE had threatened them with “costly legal entanglements” if they refused.

GPNE’s damages expert testified that he had studied some of GPNE’s licenses with other companies that make and sell mobile devices, including Samsung Electronics Co. and HTC Corp., and determined that they had paid a license of approximately $1 per device.

Much of Apple’s defense in the trial has focused on the fact that GPNE’s patents described pagers, not the smartphones and tablets accused in the lawsuit. GPNE’s attorneys contend that the mentions of pagers in the patents are meant only as an example of a mobile device that sends and receives data.

“Would we have had a trial over the past two or three weeks if it were as simple as whether or not this is about a pager?” GPNE’s attorney argued. “Our patent expert showed how Apple’s devices contain each and every element of each and every asserted claim.”

For more information, see Law360.

Comcast Victory In Patent Suit With Sprint

October 20th, 2014 Alexander No comments

The present lawsuit, filed in February 2012, marked the latest dispute between the subsidiaries of two communications giants. Comcast accused Sprint of infringing its patents covering various methods and apparatuses for wireless voice and texting operations.

Among Comcast’s targets was Sprint’s mobile messaging service, which provides mobile email, wireless video mail and other text messaging services. The lawsuit also went after Sprint’s voice and data telephone offerings, including its Any Mobile, Anytime wireless plans.

The lawsuit, came months after Sprint Communications fired off separate complaints against Comcast Corp., Time Warner Cable Inc., Cox Communications Inc. and Cable One Inc. in December 2011 over alleged infringement of patents that allow users to make phone calls over the Internet.

Sprint claimed that the companies sold phone services that violated 12 of its voice over packet patents, which facilitate the transfer of data, such as voice messages, phone calls and faxes, over packet networks such as the Internet.

In the present suit, a Delaware federal jury found that Sprint had infringed a total of six claims from three different patents. The jury did not decide in favor of Sprint on any of the assertions in the suit. The jury also decided that Sprint owes Comcast $7.5 million in damages for infringing the Comcast patents.

The decision came less than a month after the New York Public Service Commission pushed back its deadline for reviewing Comcast’s proposed $45 billion merger with Time Warner after state officials worried that the cable companies still weren’t doing enough to improve “deficiencies” with their current service.

The transaction has faced significant opposition since it was announced, despite Comcast’s promise to send about 3.9 million subscribers to Charter Communications Inc. in a $7.3 billion deal designed to ease competition concerns about the merger.

Comcast has argued that the deal won’t threaten competition because the two companies do not compete head-to-head for customers in any local markets.

For more information, see Law360.

Microsoft Seeks Dismissal of Enfish Database Patent Claims

October 14th, 2014 Alexander No comments

The dispute centers on Microsoft’s .NET Framework, which Enfish alleged infringes its patents. However, Microsoft urged a federal judge to dismiss the patent-infringement suit brought by Enfish, saying the patent claims covering improved database structures are too generally drawn and abstract to survive in the wake of the recent U.S. Supreme Court’s Alice Corp. decision.

Under Alice, to determine whether software can be patented, the analysis is two-fold: (1) determine if the claim covers an “abstract idea”, and (2) determine if there is an additional “inventive concept” that turns the abstract idea into a patent-eligible application.

Microsoft argued that the database patents are “very abstract” and would cover essentially any kind of table containing multiple rows and columns to store data, paired with an index.

“Under Alice, claims directed to such abstract ideas are unpatentable unless they further include elements that individually or collectively transform the idea into something that in practice would be significantly more than a patent on the abstraction itself,” Microsoft stated.

“For hundreds of years, human beings have been using tables to organize data. … It’s fundamental to the way we interact with data on a routine basis. … That’s abstract. That’s fundamental. That’s something a person could do with a pen and paper,” said Microsoft.

Enfish contends that its software is actually a novel improvement in the architecture of memory that has a “transformative impact” on the computer. “It’s not just an abstract idea,” said Enfish.
Enfish stated that two of its patents overcome Alice because they claim improvements in database structures, cover a particular approach to organizing digital information for storage and quick retrieval, and present no risk of preempting any abstract idea.

“The asserted claims are the antithesis of claims covering abstract ideas because they claim a specific and concrete data structure in computer memory,” Enfish said. “The claims do not simply recite an abstract idea and say ‘apply it.’”

Further, Microsoft’s contention that the asserted claims can be practiced either mentally or with pencil and paper is “grossly misleading and inaccurate,” according to Enfish.

For more information, see Law360.