Paul Allen

Paul Allen’s road to monetize his huge patent portfolio took an abrupt detour when Judge Marsha Peckham of the Western District of Washington stayed Allen’s eleven infringement cases, pending completion of reexamination proceedings for the patents-in-suit.

Allen, a co-founder or Microsoft, established Interval Research Corporation and then set about acquiring an enormous number of patents, assigning them to Interval Research.  For years, his patents sat quietly as idle assets.  The subject of constant speculation in the high-tech community, Allen’s patents remained untested.  But on August 27, 2010, Allen, through corporate subsidiary Interval Licensing, sued a who’s-who of computer and Internet companies in the District Court in Seattle, notably AOL, Apple, eBay, Facebook, Google, Netflix, Office Depot, OfficeMax, Staples, Yahoo!, and YouTube.  Apart from a minor hic-up in December, when Judge Peckham ordered Interval Licensing to state the basis for its infringement allegations with greater specificity, see Complaint Dismissed, the case proceeded smoothly.

USPTO Headquarters, Alexandria, Virginia

The United States Patent and Trademark Office (USPTO) is seeking public comment on a proposal to streamline the procedures governing ex parte and inter partes patent reexamination proceedings. The timing of this announcement, which appeared in the Federal Register on April 25, 2011, seems curious to me. With patent reform circulating in the House of Representatives does this signal a belief that on the part of the Patent Office that patent reform is dead?  The patent reform passed by the Senate and that being considered by the House has revised post-grant review proceedings, so wouldn’t it be wise to wait to revamp reexamination until after patent reform passes, that is if it seems likely to pass?

On January 14, 2010, Eastman Kodak Company (NYSE:EK) brought an action at the International Trade Commission (ITC) challenging the importation of certain RIM Blackberry phones and Apple iPhones.   Kodak alleged that the importation of the phones violated Section 337 of the Tariff Act of 1930.  The predicate for the the alleged Section 337 violation was the infringement of claims 15, 23, 24, 25, 26 and 27 of United States Patent No. 6,292,218. Yesterday, January 24, 2011, Kodak announced that it has received notice that the Administrative Law Judge (ALJ) in the ITC action brought by Kodak against Apple Inc. and Research In Motion Limited had issued an initial determination recommending that the patent claims at issue are invalid and not infringed.

From the shameless commerce division, with at least a mild dose of self promotion, I am here to tell you about some of the intellectual property programs that the Practising Law Institute (PLI) has in store for the Winter 2011 season.

By now practically everyone probably knows that PLI is a sponsor, and that I teach the PLI Patent Bar Review Course, so I suppose you can take what I say with a grain of salt, but I am really looking forward to these PLI programs in particular.  I will be signed up to attend via webcast the programs I cannot make live, and I will be in in Chicago, IL in March for the Patent Bar Review Course and in New York City for the 5th Annual Patent Law Institute from February 17-18, 2011.  If your firm is a privileged member you can attend these and all other PLI programs for free, with the exception of the Patent Bar Review Course.

Scott Daniels, partner in the firm Westerman, Hattori, Daniels & Adrian, and the primary author of Reexamination Alert™, recently happened across a rather rare reexamination story.  See PTO Director Initiates Reexamination Against Gift Tax Patent.  Earlier  this month, on January 12, 2010, the United States Patent and Trademark Office ordered a Director Initiated Reexamination pursuant to 37 CFR 1.520.  See also MPEP 2239.   The patent in question, U.S. Patent No. 6,567,790, relates to a patent on a method of minimizing tax liability.

The main front of the on-going war between Microsoft and i4i regarding the latter’s U.S. Patent No. 5,787,449 is certainly the Supreme Court. There, Microsoft has asked the Court to reverse a $290 million verdict against it for infringement of the ‘449 patent, arguing that the burden on an accused infringer of proving that a patent is invalid over the prior art should be “preponderance of the evidence” rather than the traditional standard applied by the trial court of “clear and convincing” evidence, at least where the reference asserted was not before the examiner in the original patent prosecution. The Court’s grant of certiorari in this case has understandably generated enormous concern in the patent community, fearful of the potential for undermining the strength of hundreds of thousands of commercially significant patents.

At the same time that Microsoft pursued its appeal of the verdict for i4i, both at the Supreme Court and earlier at the Court of Appeals for the Federal Circuit, Microsoft requested that the Patent Office undertake a new reexamination of the ‘449 patent on the basis of previously considered prior art, but art presented “in a new light” according to Microsoft. This request was dismissed by commentators as a side-show, a mere attempt to support its argument before the Supreme Court, or even a “Hail Mary” (actually, I said that). Indeed, that estimation seemed to be correct when the patent examiner refused to grant Microsoft’s request to grant reexamination – a sharp rejection in view of the very high percentage of reexamination requests that are granted.

On Thursday the PTO Board of Appeals affirmed (here, here) the reexamination examiner’s findings that two patents – U.S. Patent Nos. 7,314,328 and 7,325,994 – are valid over certain prior art. The ‘328 and ‘994 patents are owned by Mack-Ray and claim nozzle structures for “a spreader apparatus,” e.g., a squeeze bottle for holding jelly and spreading it on bread. Mack-Ray sued Smucker (the jelly company) for infringing the two patents, and both companies subsequently requested the present reexaminations. What will interest reexamination practitioners, however, is the extreme reluctance of the Board to consider issues not strictly within the PTO’s reexamination jurisdiction.

Cheryl Milone, CEO of Article One Partners

Article One Partners announced yesterday that patents held by NTP Incorporated are the focus of three new requests for research, which Article One Partners refers to as Patent Studies. NTP was made famous for its litigation against BlackBerry maker Research-in-Motion (RIM) that resulted in a settlement north of $600 million. New litigation by NTP has expanded the assertion of patent infringement to other top players in the mobile and smartphone industry, which is prompting Article One Partners to engage their global community of researchers by challenging them to identify evidence predating the patents in question and which can be used to invalidate one or more of the patent claims owned by NTP.

“This is a great opportunity for the public to engage directly in patent review related litigation that influences the use of email on mobile devices,” said Cheryl Milone, CEO of Article One Partners. “We welcome individuals with an interest in the public review of these NTP patents to participate, and potentially be compensated for doing so.”

Animal toy - US Patent No. 6,360,693

Two months ago I wrote about one of my favorite patents — The Animal Toy — which is U.S. Patent No. 6,360,693. See Patent on a Stick: Learning from the Animal Toy Patent.  Shortly after writing that article, which was not intended to poke fun at the Patent Office but to merely teach a point relative to claim drafting, I received an e-mail from Stephen Kunin, who is a partner at Oblon Spivak, LLP. Steve wrote to me indicating that this patent was reexamined by the Patent Office and none of the claims exited reexamination. This in and of itself may not be very odd, but something didn’t seem quite right.

Earlier today the United States Supreme Court granted certiorari in Microsoft Corporation v. i4i Limited Partnership, with Chief Justice John Roberts taking no part in the decision or petition. The Supreme Court did not request the views of the Solicitor General, choosing rather to accept the matter with no input from the United States government.  The decision to grant cert. comes only days after the United States Patent and Trademark Office refused to grant reexamination of the patent in question.

Microsoft had filed an ex parte reexamination request on the patent in question, US Patent No. 5,787,449. The ’449 patent exited reexamination unchanged. Microsoft then filed a second ex parte reexamination request, and it is this second request that was denied by the Patent Office on Wednesday, November 24, 2010. The denial of this second request means that the Patent Office did not believe there to be a substantial new question of patentability.

The potential use of reexamination by an accused infringer to reverse, in essence, a CAFC holding of patent validity was demonstrated anew this past week in the PTO Board’s decision, Ex parte Funai Electric Co., Ltd.

Funai filed a complaint in 2007 at the U.S. International Trade Commission alleging that Vizio and a number of other manufacturers had violated Section 337 through the importation into the United States of digital television sets that infringed Funai’s U.S. Patent No. 6,115,074. The ITC found the ‘074 patent to be valid and infringed, and issued a limited exclusion order prohibiting the importation of infringing television sets into the United States. In May of this year the CAFC affirmed the ITC’s ruling, including its determination that the ‘074 claims were “not invalid” over the combination of prior art references asserted by Vizio and the other Respondents.