BPAI Raises Stakes for In Re Bilksi and the Future of Software Patents

An excellent article by John Duffy, professor of law at George Washington University Law School, explains that two recent decisions from the USPTO's Board of Patent Appeals and Interferences (BPAI), Ex parte Langemyr (May 28, 2008) and Ex parte Wasynczuk (June 2, 2008) substantially raise the stakes for all interested parties in the Federal Circuit's en banc review of In re Bilski, a decision set to review the scope of patentable subject matter under 35 USC section 101.

I think this article, and others like it will lead the Federal Circuit to come to the right conclusion in the Bilski case, and that is patentable subject matter under 101 should not be restricted. Instead, the better way to curtail software patents lacking in any creativity or innovation is to reject them as obvious under 35 USC section 103. Prior art searching capabilities for software have improved and will continue to improve. Moreover, mandatory second reviews, peer review systems, and the like are proving effective at making sure that only the most innovative software patents are allowed to issue.

The effects of curtailing patentable subject matter to exclude software innovation and require physical transformations or a ties to a "particular computer" will be extremely damaging to existing businesses and the long-term impact in software innovation will be palpably negative: there will be little incentive to build a business around software innovation if the Federal Circuit curtails the scope of patentable subject matter under section 101.

Claims Construction Order in Wide, Short Ski Case against K2

Judge Lasnik recently construed claims for US Patent No. 5,603,522 for a "Wide, Short Ski." The case is one for infringement brought by inventor Paul Nelson against K2 Corporation. The parties disputed six claim terms from independent claim 1. Not surprisingly, the patent here uses words of approximation, like "about" and "approximately" to describe some numerical measurement ranges. Using the prosecution history as support, Judge Lasnik ruled that these words will be constituted to provide a +/- 3% range from the claimed measurements. This will set the boundary for a determination of literal infringement.

One interesting snippet from this Order is that Judge Lasnik all but ignored evidence from a patent attorney as to what these words ought to mean, saying "Absent evidence that [the patent attorney] is one skilled in the art of designing and/or manufacturing skis, his opinion regarding the proper interpretation of the claim terms is not useful to the Court." (citing Network Commerce, Inc. v. Microsoft Corp., 422 F.3d 1353, 1361 (Fed. Cir. 2005) (quoting Phillips, 415 F.3d at 1318).


NelsonvK2claimsconstruction.pdf

Federal Circuit Vacates Exceptional Case Finding and Over $6 million Dollar Award of Attorneys Fees

Catching up on my reading, I notice that in May, the Federal Circuit affirmed in-part, remanded, and vacated in-part a judgment entered following a two-week bench trial here in Seattle between TALtech Limited and Esquel Apparel, Inc. involving US Patent No. 5,568,779, a patent covering a seam for "wash-and-wear" dress shirts that solved the problem of puckering when laundered (WDWa Case No. 04-cv-974).

Judge Zilly entered findings of fact and conclusions of law in March 2007 invalidating the '779 patent on a rarely successful best mode argument (use of a preferred adhesive was apparently not disclosed), and he also found the patent unenforceable due to inequitable conduct for failure to disclose a prior art raincoat seam that had "inspired" the invention. The patent was also found not to be infringed by Defendants. (How is that for a complete defense victory? Makes one wonder why plaintiffs did not demand a Jury, especially after some of the pre-trial rulings in the case, providing a rather narrow claim interpretation and failing to find literal infringement as a result, which should have indicated which way the wind was blowing. But, I know hindsight is 20/20.)

Over $6 million dollars in attorneys fees were awarded to the Defendant under 35 U.S.C. 285 because the case was deemed "exceptional" as a result of the inequitable conduct and misconduct of Plaintiffs during litigation.

The Federal Circuit affirmed findings of invalidity and non-infringement, but vacated the finding of inequitable conduct, and the over $6 million dollar award of attorneys fees because it was based "at least in part" upon a finding of inequitable conduct. The case was remanded so the Court could consider whether the undisclosed prior art was cumulative of other art before the examiner.

I would expect some supplemental briefing on the "cumulative" issue. The Federal Circuit definitely left the door open for a finding that the undisclosed prior art was not cumulative, and given the highly factual nature of this finding, it may prove difficult to overturn on appeal. Further, exceptional case findings could be revised, finding independent basis in litigation misconduct, although this would probably receive very close scrutiny by the Federal Circuit.

Seattle Patent Litigation Update (May-June 2008)

So my trial is now over. My posts will pick up and be more frequent. I'm happy to report a victory for one local inventor over Sears Roebuck and their advertising firm, Young & Rubicam. Jury returned a verdict for $1.7 million on Wednesday afternoon. It's a copyright case, so I won't go into detail here. If you are interested, here is a link to today's story in the Seattle Times.

May and June saw some interesting new patent filings in Washington. Here is a list:

June 10, 2008
Nintendo of America Inc v. Nyko Technologies Inc	WA Western	Lasnik	Patent	Federal Question
Plaintiff: Nintendo of America Inc; Defendant: Nyko Technologies Inc
May 28, 2008
Microscan Systems Inc v. Cognex Corporation	WA Western	Martinez	Patent	Federal Question
Plaintiff: Microscan Systems Inc; Defendant: Cognex Corporation
May 22, 2008
Brower v. Lowe's Companies Inc et al	WA Western	Robart	Patent	Patent Infringement
Plaintiff: Jerry E Brower, Jerry E Brower Defendant: Lowe's Companies Inc, Lowe's HIW Inc, Homax Products Inc
May 20, 2008
Westfield Outdoor Inc v. GCI Outdoor Inc	WA Western	Jones	Patent	Declaratory Judgement
Plaintiff: Westfield Outdoor Inc, Westfield Outdoor Inc, Westfield Outdoor Inc Defendant: GCI Outdoor Inc

The most interesting of these cases to me is Nintendo's action over Nyko Technologies to enforce rights in the NUNCHUCK controller for the Wii. Now that is what I like to see: a major technology player from the PNW showing confidence in our local district court to sort out complicated IP matters. This case is also interesting because it seeks to enforce design patent rights in the shape of the controllers amid great uncertainty in the law concerning design patent rights. The Federal Circuit has yet to issue a decision in the en banc review of Egyptian Goddess v. Swisa. Here is a link to post about amicus briefs offered in connection with that case, one of which I co-authored earlier this year on behalf of the Federal Circuit Bar Assocaition.

Trainman Lantern Company Wins Summary Judgment of Non-infringement

Some of you may remember my post about this case in March involving US 7,118,245 for a Trainman Lantern. The Plaintiff in this case, A.G. Design & Associates, LLC, sells patented lanterns to Burlington Northern Santa Fe and other railroads for use by trainmen and engineers. They sued Trainman Lantern Company and initially won a preliminary injunction from Judge Burgess, ordering TLC to cease marketing the accused device. This injunction was vacated by the Court of Appeals for the Federal Circuit and TLC has now won summary judgment of non-infringement. The primary argument was prosecution history estoppel for the element “a plurality of ports in said reflector that permit light from said primary source to pass through in a lateral direction so as to augment said light source from at least one secondary source,” a limitation added to the broadest independent claim during prosecution. There was no dispute that TLC did not literally infringe, so the only question before the court on summary judgment was whether the plaintiff had sufficient evidence to rebut the presumption of surrender for application of prosecution history estoppel. Judge Leighton found they could not, and granted Summary Judgment for TLC.


Trainman143%20Order%20granting%20part%20denying%20part%20defendants%20summary%20judgment.pdf

Seattle Patent Litigation Update: May 2008

Things finally slowed down last month in terms of new patent case filings in the Western District. There was just one new case hitting the electronic docket in May, and it was actually filed in April, so it really doesn't count as a May filing. Since it didn't make April's list, I'll post it here.

The case is Vtran Media Technologies, LLC v. Astound Braodband LLC (C08-0650) (Pechman) This is the fourth patent case in the last 30 days assigned to Judge Pechman.


The patent in suit is US 4,890,320 "Television Broadcast System for Selective Transmission of Viewer-Chosen Programs at Viewer-Requested Times." It's got a crusty old filing date of June 9, 1988. With an issue date of December 26, 1989, the patent will expire June 9, 2008 (assuming no extensions). Are you thinking laches? Estoppel? Me too.

UPDATE: Thanks to reader Andrew P for correcting my error on calculating the termof this patent under the GATT rules. This patent expired June 9, 2008, not December 2006 as I had said previously. Also, there is a second patent,
US 4,995,078, with a filing date of 10-10-89 and issue date of 2-19-91. Under GATT transition rules, this patent will expire October 10, 2009.


The patent has been in litigation since about October 2007. Below is a list of related cases and there's an MDL No. assigned, MDL No. 1948


May 16, 2008
VTran Media Technologies, LLC v. Liberty Cablevision of Puerto Rico, Inc.
PR
Casellas
Patent
Federal Question
Plaintiff: VTran Media Technologies, LLC; Defendant: Liberty Cablevision of Puerto Rico, Inc.

April 9, 2008
Vtran Media Technologies,LLC v. Advocate Communications,Inc. et al
FL Southern
Cooke
Patent
Patent Infringement
Plaintiff: Vtran Media Technologies,LLC; Defendant: Advocate Communications,Inc., Home Town Cable TV,LLC

March 21, 2008
VTran Media Technologies, LLC v. Antietam Cable Television, Inc.
MD
Garbis
Patent
Patent Infringement
Plaintiff: VTran Media Technologies, LLC; Defendant: Antietam Cable Television, Inc.

March 3, 2008
VTran Media Technologies, LLC v. Mid-Hudson Cablevision Inc.
NY Northern
Kahn
Patent
Federal Question
Plaintiff: VTran Media Technologies, LLC; Defendant: Mid-Hudson Cablevision Inc.

February 21, 2008
VTran Media Technologies, LLC v. Midcontinent Communications
ND
Erickson
Patent
Federal Question
Plaintiff: VTran Media Technologies, LLC; Defendant: Midcontinent Communications

February 19, 2008
VTran Media Technologies, LLC v. Bresnan Communications, LLC et al
NY Southern
Daniels
Patent
Patent Infringement
Plaintiff: VTran Media Technologies, LLC; Defendant: Bresnan Communications, LLC, Insight Communications Company, Inc.

February 14, 2008
VTran Media Technologies, LLC v. Armstrong Utilities, Inc. et al
OH Northern
O'Malley
Patent
Patent Infringement
Plaintiff: VTran Media Technologies, LLC; Defendant: Armstrong Utilities, Inc., Buckeye Cablevision, Inc., Massillon Cable TV, Inc., WideOpenWest Holdings, LLC

February 8, 2008
VTran Media Technologies, LLC v. Cox Communications, Inc.
GA Northern
Story
Patent
Patent Infringement
Plaintiff: VTran Media Technologies, LLC Defendant: Cox Communications, Inc.

January 31, 2008
VTran Media Technologies, LLC v. Atlantic Broadband Finance, LLC et al
PA Middle
Caldwell
Patent
Patent Infringement
Plaintiff: VTran Media Technologies, LLC; Defendant: Atlantic Broadband Finance, LLC, Cablevision Systems Corporation, MetroCast Cablevision of New Hampshire, LLC

VTRAN MEDIA TECHNOLOGIES, LLC v. ARMSTRONG UTILITIES, INC. et al
PA Eastern
KAUFFMAN
Patent
Patent Infringement
Plaintiff: VTRAN MEDIA TECHNOLOGIES, LLC; Defendant: ARMSTRONG UTILITIES, INC., BLUE RIDGE COMMUNICATIONS, INC., RCN CORPORATION, SERVICE ELECTRIC TELEVISION, INC.

January 30, 2008
VTran Media Technologies, LLC v. Bright House Networks, LLC et al
AL Northern
Ott
Patent
Patent Infringement
Plaintiff: VTran Media Technologies, LLC; Defendant: Bright House Networks, LLC, Knology, Inc, Mediacom Communications Corporation

January 25, 2008
VTran Media Technologies, LLC v. Cebridge Acquisition L. P.
TX Eastern
Ward
Patent
Patent Infringement
Plaintiff: VTran Media Technologies, LLC; Defendant: Cebridge Acquisition L. P.

October 17, 2007
VTran Media Technologies, LLC v. Comcast Corporation et al
TX Eastern
Ward
Patent
Patent Infringement
Plaintiff: VTran Media Technologies, LLC; Defendant: Comcast Corporation, Charter Communications, Inc., Verizon Communications, Inc., Time Warner Cable, Inc.

That's all for now. Back to trial prep for me.

Vtrancomplaint.pdf

Seattle Patent Litigation News

It's been a while since I've posted. I know both of you are disappointed (hi mom). Reason for the hiatus is that I've been preparing for trial. So expect my posts to be less frequent through about the end of July.

There's still a lot to report on the local patent litigation front. First, as I'm sure many of you already know, Nintendo was hit with a significant infringement verdict by a Texas jury last week, in the amount of about $21 Million. My previous post on this case can be found here. Here is a bit of coverage of the case from IP 360

Thursday, May 15, 2008 --- Nintendo Inc. was ordered to pay a small Texan
patent holder $21 million on Wednesday for infringing patents related to the
controllers for its popular GameCube and Wii video-gaming systems.
A federal jury found that Nintendo infringed Anascape Ltd.'s patents with its
WaveBird and Gamecube controllers for the GameCube and Wii Classic
controller for the Wii. The Wii remote and nunchuck controllers were not
included in the suit.
The jury's verdict followed a two-week trial in the U.S. District Court for the
Eastern District of Texas.
"We are extremely pleased with the jury's verdict. Anascape may be a tiny
company compared to Nintendo, but today's verdict confirms that the
company's technology is second to none,” said Doug Cawley of McKool
Smith PC, which represented Anascape.
A representative for Nintendo said the company was planning on appealing
the ruling and that the appeals court would “promptly reduce the dollar
amount of the verdict significantly.”

In other news, the Western District of Washington published its set of proposed patent rules. Check them our by following this link: http://www.wawd.uscourts.gov/proposedlocalrules.htm

I'd like someone to offer to guest blog about these rules since I won't have the time for a while (no Mom, you can't). Please let me know if you have time/interest in writing a little summary of the proposed new rules, and perhaps comparing them to other districts, like the ED Texas, or ND Cal.

Finally, Local software company Widevine Technologies Inc., has expanded its patent infringement case against competitor Verimatrix in the ED of Texas. The suit involves video encryption technology, and since my firm is handling the case on behalf of Widevine, I'll just post some snippets from the recent IP 360 article.

Tuesday, May 20, 2008 --- Widevine Technologies Inc. has stepped up its
legal battle against Verimatrix Inc., filing an amended complaint that adds
another patent to its infringement suit over video encryption technology.
The amended complaint, filed Tuesday in the U.S. District Court for the
Eastern District of Texas, takes aim at Verimatrix's video content authority
system, claiming the VCAS product infringes on Widevine's U.S. Patent
Number 7,376,831, which covers Widevine's Cypher technology for video
encryption.
Widevine first launched its suit against Verimatrix last August over
Verimatrix's alleged infringement of U.S. Patent Number 7,165,175. That
patent, issued in January 2007, covers methods and systems for selectively
encrypting different portions of data, such as video or audio, that are sent
over the Internet, according to the original complaint.
Widevine's amended complaint claims that Verimatrix was already aware of
the '175 patent as early as March 2007, when Widevine sent a letter
informing Verimatrix that the ’175 patent had issued.

That's all for now.

Seattle Patent Litigation Report: April 2008

April was a very busy month for patent litigation in the Western District of Washington. Wacom settled its patent dispute with competitor, Hanvon, Microsoft and Veritas settled their decade old database dispute, and there were seven new cases filed.

TGN, Inc v. CRS, LLC, (2:2008cv00680) (Pechman)

VTran Media Technologies LLC v. Astound Broadband LLC et al , (2:2008cv00650) (Pechman)

Unigen Pharmaceuticals Inc v. Perrigo Company et al, (3:2008cv05258) (Leighton)

Gardner v. Toyota Motor Corporation et al, (2:2008cv00632) (Jones)

Koninklijke Philips Electronics NV, (2:2008cv00543) (Pechman)

American Piledriving Equipment Inc v. Hydraulic Power Systems Inc et al, (2:2008cv00537) (Martinez)

Progressive International Corporation v. Jo-Ann Stores Inc (2:2008cv00514) (Lasnik)

All Eyes On Translogic's Patent Appeal to Supreme Court

Normally, a party who loses its appeal at the Federal Circuit has little hope of the Supreme Court accepting its case on a petition for Certiorari. Even with increased activity by the Supreme Court reviewing patent cases in the last two years, chances of having review granted by the Supreme Court are less than 1 in 1000. Oregon maker of multiplexer integrated circuits, Transolgic Technologies may have better chances.

I posted last October (here and here) about this case when Translogic sought rehearing by the CAFC en banc. It took the Court until January 2008 to finally deny rehearing. Now, with its $86.5M jury verdict hanging in the balance, Translogic has pulled out all the stops for its petition for certiorari, hiring noted patent legal scholar, John Duffy of George Washington University Law School to challenge the constitutionality of the BPAI's 61 administrative judges. Click here for an article on the case by the National Law Journal.

The National Law Journal quoted Duffy as follows:

"You shouldn't take such a position — saying the whole board is unconstitutionally structured — unless you're pretty sure," said Duffy. "I thought this was incredible. I checked it every single way I could before I went out on a limb to say this . . . .The government has never argued I'm wrong. The question is: What do you do about it?"

Needless to say that many a patent litigator has pondered the question: "Should I stay pending reexam, or let the cases proceed along parallel tracks?" Some district courts (like those in East Texas) are notoriously against staying litigation pending reexamination. In these districts, litigants have little choice but to proceed on parallel tracks. What happens, then, if the patent holder wins (verdict of infringement, patent not invalid) and the claims are held invalid by the BPAI? Translogic says the BPAI's ruling (by a panel of three nonArticle III Judges) can trump a jury's verdict. As many lawyers (myself included) say, "that just can't be right."

Well, we soon may find a definitive answer to this question, and it may cause the unravelling of the BPAI's administrative judicial system. These are indeed exciting times to be practicing patent litigation.

Unigen Agrees to Consolidate Three Pending Cases

Unigen Pharmaceuticals, maker of an herbal supplement Univestin (a blend of flavans from Acacia catechu and flavanoids from Chinese Skullcap (Scutellaria Baicalensis)) agreed Friday to consolidate three pending cases for infringement of US Patent No. 7,192,611. The claims of the '611 patent are directed to a method for treating osteoarthritis using what is known as a Free-B-Ring flavonoid, which includes baicalein. The three defendants are Walgreens, Target, and Perrigo Company of South Carolina Inc. The case against Perrigo was just recently filed late last month.

The Defendants have called the validity of the '611 patent into question in a motion for partial summary judgment of invalidity. The motion, pending before Judge Jones in the case against Defendant Walgreens (No. C07-0471 RAJ), argues that the claims of the '611 patent are invalid in view of US Patent No. 5,650,433 which discloses the use of Free-B-Ring flavanoids, including baicalein, to treat osteoarthritis. Because the '433 patent issued almost five years prior to Unigen's, Defendants argue that Unigen's '611 patent is invalid.

In a previous post, I commented on this case, and Judge Jones' request for an early claim construction "proffer" from Unigen, essentially asking for a good faith construction that would permit a jury to find both infringement and that the claims were not invalid. Unigen complied arguing essentially that the ’611 Patent claims a "method of alleviating those symptoms of osteoarthritis that result from cyclooxygenase enzyme (COX-2) mediated inflammation, while the ’433 Patent is directed towards a method of treating arthropathy generally by administering an agent that suppresses the destruction of articular cartilage.

The claim construction argument is as follows:

"In construing the claims of the ’611 Patent, a person of ordinary skill in the art would conclude that the preambles to Claims 1, 8 and 15—the three independent claims—constitute claim limitations and that those limitations mandate treating osteoarthritis by alleviating those symptoms of osteoarthritis that result from inflammation. In other words, the method of treating osteoarthritis in the ’611 Patent encompasses a reduction of inflammation within the joints themselves, rather than building a protective layer in the cartilage."

Given the above narrow construction of the claims and assuming for the sake of argument that a claim so construed would not be invalid over the '433 patent, this case will be one for inducement or contributory infringement, so Unigen must prove knowledge and intent that Defendants' herbal supplements are used in the above way. This will place defendants' advertising and labelling of the supplements into sharper focus than what one might expect in a garden variety patent case. I would expect to hear from some experts on product labelling and marketing. Perhaps some survey evidence. It will be very important to know what subjective understanding consumers have from reading the subject labelling. Presumably, careful labeling and marketing could be a complete defense in a case like this.