Posts in District Courts

Cuozzo and Broadest Reasonable Interpretation – Should the Ability to Amend Be Relevant?

On July 8, in In re Cuozzo, the CAFC denied en banc review of a prior panel decision that confirms the PTAB can use a different standard for interpreting claims than a district court. The patent owner in In re Cuozzo filed a Petition for a Writ of Certiorari to the Supreme Court on October 6, 2015. The response was due on November 9, 2015. If the Supreme Court takes up the issue, it could decide contrary to the current Federal Circuit precedent. It is also possible that Congress could change the standard for claim construction that applies to post-grant proceedings through legislation.

NY v. Aleynikov: NY Penal Code, Federal Criminal Law Unprepared to Deal with Source Code Theft

Employers often assume that they have the same weapons in their arsenal to prevent theft of virtual trade secrets as they have against other types of loss. As the prosecution of Sergey Aleynikov in Federal and New York courts showed, however, that simply isn’t true. Even though juries in both courts found him guilty of downloading confidential computer code from his employer, judges ultimately found that the laws under which he was prosecuted did not cover the acts he committed. A careful employer should therefore make sure it puts precautions in place that prevent theft of computer code, rather than relying on the threat of criminal prosecution.

Aleynikov was a computer programmer employed by Goldman Sachs to write high-frequency trading code. In 2009, he accepted a job offer to join a potential competitor, where he would create a new high-frequency trading platform from the ground up. Before he left Goldman, however, he sent portions of Goldman’s high frequency trading code to a German server for his own future use. After Goldman found out, it went to the FBI; Aleynikov was then arrested on a flight home from a visit to Chicago. With that arrest began his circuitous journey through the U.S. legal system, governed by two different sovereigns and under two different legal regimes.

To the Batmobile! Copyright Saves the Day in Gotham City

Mark Towle owns Gotham Garage, which manufactures and sells replicas of automobiles featured in famous motion pictures and television programs. Gotham Garage specifically sold fully constructed cars as well as kits which allow customers to modify their car to look like the Batmobile, and advertised its replicas as “Batmobiles” while marketing its business via the domain name batmobilereplicas.com. In May 2011, DC Comics filed suit against Towle for copyright infringement, trademark infringement and unfair competition arising out of Towle’s marketing and sale of Batmobile replicas. Towle countered that the Batmobile – at least as it appeared in the famous 1966 television series and the 1989 motion picture, the main inspirations for Gotham Garage’s designs – was not subject to copyright protection.

Eli Lilly prevails in divided infringement Alimta® patent case

The United States District Court for the Southern District of Indiana ruled in favor of Eli Lilly (NASDAQ: LLY), issuing a final judgment in the Hatch-Waxman infringement litigation relating to U.S. Patent No. 7,772,209. This matter arose as the result of the defendants’ filing of Abbreviated New Drug Applications (ANDAs) with the Food and Drug Administration (FDA). The ‘209 patent, covering a method of use, protects the co-administration of pemetrexed disodium with two nutrients – folic acid and vitamin B12, which protects against the side effects of the drug Alimta®. The district court found direct infringement by administering physicians under § 271(a), and thus inducement of infringement by Defendants under § 271(b).

Bad News for the Redskins Trademark – Registration Exempt from First Amendment Scrutiny

Last Wednesday the Eastern District of Virginia issued its opinion and order on cross-motions for summary judgment in Pro-Football v. Blackhorse, the case in which the National Football League (NFL) appealed the Trademark Trial and Appeal Board’s (TTAB) precedential cancellation of the REDSKINS trademark on Lanham Act 2(a) disparagement grounds. The long and short of it is, it didn’t turn out well for the Redskins, who will almost certainly appeal the decision, which affirmed the TTAB’s 2014 cancellation.

Safeway defeats Kroy IP Holdings on summary judgment in EDTX patent case

After two and a half years of hard-fought litigation, Kroy IP Holdings has been defeated in a patent case brought against grocery retailer Safeway, Inc. In two comprehensive opinions issued May 29 by Judge William C. Bryson—a senior Federal Circuit judge sitting by designation in the Eastern District of Texas—the court granted Safeway’s motions for summary judgment and invalidated Kroy’s U.S. Patent No. 7,054,830 on several grounds. Not only did Judge Bryson find the ‘830 patent to be abstract and ineligible for patent protection, he also found the patent to be anticipated and obvious in view of Safeway’s cited prior art. Judge Bryson entered judgment for Safeway the same day, and ruled that as the prevailing party, Safeway is entitled to its costs.

Vocal minority cannot keep PATENT Act from passing Senate Judiciary

At the end of a three-hour long hearing held by the U.S. Senate Committee on the Judiciary this Thursday, June 4th, S.1137, the proposed legislation known as the PATENT Act, was approved to move to the floor of the United States Senate by a 16-4 vote of the Senate committee. Proponents of the bill lauded the bipartisan support which brought the bill committee approval. Interestingly, a small but vocal bipartisan minority has developed, a couple of whom have pledged to continue debate aspects of this legislation which they fear will pose a threat to American innovation.

Senate Judiciary divided on PATENT Act even if it is a step in the right direction

Given the collective bias of the witness panel, it is hardly surprising that on the issue of the PATENT Act there was a clear, positive consensus in the witness panel. But there is no such consensus within the industry and those voices were brought to the table by Sens. Dick Durbin (D-IL) and Chris Coons (D-DE), two of the sponsors of the STRONG Patents Act that has been debated in Senate committee as recently as March. Durbin, who pointed out that “this panel is divided between people who love the bill and people who really love the bill,” read part of a strongly worded letter submitted by the National Venture Capital Association who is worried that the PATENT Act, as worded currently, could hurt investment.

Tesla unveils energy storage for a sustainable home, retains open source stance on patents

Tesla’s Powerwall batteries will come in two varieties: one a 10 kilowatt-hour (kWh) version for a weekly cycle unit designed for backup applications, the other a 7 kWh unit for everyday use. The batteries can be installed in groups of up to nine, providing a maximum of 90 kWh hours of backup energy (or 63 kWh of energy available daily). The dimensions of the Powerwall battery are about four feet tall and nearly three feet wide; its slender 7.1 inches of depth and sleek design gives it a form which fits neatly on most walls, inside or out. It can be installed in an afternoon and does not need major home rewiring. The 10 kWh model costs $3,500 ($3,000 for the 7 kWh version) although a homeowner must pay for installation and an inverter if the property includes solar panels.

A modest patent portfolio doesn’t stop Amazon Web Services from earning $5.16 billion

Amazon (NASDAQ:AMZN) has just cleared up the picture over its cloud computing business, Amazon Web Services (AWS) and the company’s forecast looks sunny. The corporation recently announced its first quarter earnings for 2015 and financial pundits were flabbergasted to see just how profitable AWS has been for Amazon, earning $5.16 billion in revenue over a recent 12-month period and growing…

3D Conversion Patents take Center Stage in Hollywood Visual Effects Case

Two of the biggest post-production/3D-conversion companies are preparing for battle in a patent infringement suit that is sure to create enemies and allies in the world of film post-production. Prime Focus Creative Services Canada filed a patent infringement suit against Legend3D in the U.S. District Court for the Central District of California. In the March 30, 2015 complaint, Prime Focus World requested a jury trial, an injunction banning Legend3D from performing the patented process, a finding of willful infringement and unspecified monetary damages. Each company has some of the biggest blockbusters in recent memory.

Decrease in patent litigation questions need for patent reform

In 2014 there were 1,070 fewer patent lawsuits filed than during 2013. Furthermore, the number of patent cases filed in 2014 was lower than the number of cases filed in 2012 by some 433 cases. Therefore, the stories of continued run away litigation seem to be greatly exaggerated. Given the dramatic decrease in patent litigation it seems entirely premature for Congress to be considering additional patent reform at this early stage.

Case Challenging Constitutionality of Inter Partes Review Continues to 4th Circuit

Inter partes review proceedings unconstitutionally assign to an Article I executive branch tribunal matters reserved for Article III Judges that make up the Federal Judiciary. This is in violation of Separation of Powers principles, which is particularly problematic given that we are talking about property rights being stripped from patent owners by administrative law judges in a proceeding designed to be a district court alternative. These administrative tribunals also adjudicate patent validity without a jury, in violation of patentees’ Seventh Amendment rights.

District Courts should have more discretion to enhance patent damages

Infringers should not be able to arrogantly and recklessly violate patents for years but ultimately pay only the same amount they would have paid the patent owner for a license in the first place. Currently, however, that is the situation that exists, because an infringer can avoid being stuck with enhanced damages if the infringer’s attorneys, for the first time in the litigation, raise a newly-devised (but ultimately incorrect) argument that the patent is invalid or not infringed, even if this was not the actual reason why the infringer refused to take a license years earlier.

Patent reform should focus on complaint sufficiency, not substantive patent law

Congress won’t accomplish much, if anything, if it gets mired in the substance of patent law during the inevitable patent reform cycle in the 114th Congress. Similarly, vilifying all innovators as if everyone who owns a patent is somehow evil and a patent troll will only work to divide the industry, and likely divide enough Senators to make getting anything enacted a virtual impossibility. But if Congress decides to focus on process, procedure and non-substantive patent matters like fraudulent and misleading demand letters, real reform is not only possible but likely. Further, by focusing on process and procedure anything that does get done would improve the patent system, won’t harm innovators and would strike a significant blow against the business model employed by the abusers.