Tuesday, December 14, 2010

Congratulations to the Dade County Bar Association's IP Committee

I am currently serving as the Hillsborough County Bar Association's representative to the 13th Judicial Circuit's pro bono committee. As such, I'm trying to figure out ways to get lawyers in our committee more involved and aware of pro bono opportunities (and any other way we can help). For starters, we should all be aware of the Florida Bar's One Campaign. If every Florida lawyer took ONE pro bono case...imagine where we'd be. If you haven't already, watch the video (it's embedded below).

Our neighbors and colleagues in southern Florida have found a good way to help. Gene Quinn writes of a great event put on by the Intellectual Property Committee of the Dade County Bar Association. Under the leadership of their president, Jamie Rich Vining, they selected a patent (a design patent directed to a toy catapult), gathered the parts, and then had a number of contestants build the device. First to finish and launch a penny across a marked line won. Read the article for details. They were able to raise $8,000 for the local Legal Aid Society. Congratulations to the Dade County Bar Association. What a great idea!

If you have ideas for how we can help, please email me (or drop a comment). And now, spend a few minutes and watch the ONE video. If you've seen it before, watch it again.

Wednesday, December 8, 2010

PriceWaterhouseCoopers 2010 Patent Litigation Study -- M.D. Fla. has been a successful place for plaintiffs...

I learned via The 271 Patent Blog that PriceWaterhouseCoopers published its annual 2010 Patent Litigation Study. An interesting read indeed. The Middle District of Florida featured prominently:

Success rates for patent infringement plaintiffs 1995-2009
  1. M.D. Fla - 59.1%
  2. E.D. Tx. - 55.3%
  3. D. De. - 47.3 %
Success rates for patent infringement plaintiffs that survive summary judgment and go to trial 1995-2009
  1. M.D. Fla - 80.0%
  2. E.D. Tx. - 66.7%
  3. D.De. - 64.5%
Median time-to-trial from 1995-2009
  1. E.D. Va. - .93 years
  2. W.D. Wi - 1.07 years
  3. M.D. Fla. - 1.71 years
  4. D. De. - 1.89 years
  5. S.D. Tx. - 2.0 years
Some additional interesting observations:
  • median damages of $2.4m to $10.5m between 1995 and 2009
  • reasonable royalties continue to be predominant measure of damages
  • non practicing entities (f/k/a patent trolls) have been successful 31% of the time, compared with a 40% success rate for practicing entities
Lots of other interesting stuff in the report. I'd encourage you to go read it.

Wednesday, December 1, 2010

Evidence of patent infringement settlement agreement in another case, for another patent, is not relevant.

Alps South is suing The Ohio Willow Wood Company for allegedly infringing U.S. Patents 6,552,109 and 6,867,253 each generally directed to gel products which are apparently used in prosthetic products. Ohio Willow is suing another company in Texas for infringing one of its patents -- U.S. Patent 7,291,182 directed to a cushion liner for enclosing an amputation stump.

Alps believes that Ohio Willow settled its litigation in Texas, and wanted a copy of the settlement agreement. Indeed, the Texas litigation had proceeded to the Federal Circuit on appeal, after the defendant there won summary judgment that the asserted claims of the '182 patent were obvious. Ohio Willow had filed its appeal brief, and Alps had filed an amicus brief in that appeal. But the defendant in that case did not file its answer brief, leading Alps to conclude that the case had settled. Additionally, Alps and Ohio Willow are fighting over the '182 patent in yet another case (but that case is stayed pending reexamination of the patent).

Ohio Willow did not concede that the other litigation had settled. It then argued that the sought after information (if it existed) was not relevant to the present dispute. The Court agreed with Ohio Willow:
Although Alps argues that the '182 patent at issue in the Texas case is "directly relevant" to the '109 and '253 patents at issue in this case, I find that Alps has only shown that the '182 patent is one of a myriad of patents owned by OWW relating to prosthetic products that use a gel and substrate liner issued by Bruce G. Kania....I find the relationship between the '182 patent at issue in the Texas case too tenuous to be considered relevant to this litigation, and that Alps has not demonstrated that the sought-after information is admissible at trial, or that it is likely to lead to the discovery of admissible information.
The Court also held that if such agreement existed, it would not be discoverable because of the strong federal policy favoring the confidentiality of settlement agreements.

Motion to compel denied.

Alps South, LLC v. The Ohio Willow Wood Co., Case No. 8:08-cv-01893, slip op. (Nov. 19, 2010) (Mag. Pizzo)

Selling a product that can be used in a patented method does not constitute infringement

Minsurg markets and sells to physicians the TruFUSE system for use in spinal fusion surgeries. Minsurg also owns U.S. Patent No. 7,708,761 protecting a method for performing spinal surgery. The method protected generally requires the following steps:
  1. place a portal into a human patient through a minimally invasive opening
  2. access a spinal joint through the portal
  3. insert a drill bit into the portal
  4. drill a hole into the spinal joint
  5. remove the drill bit
  6. insert a joint fusion plug into the hole drilled
  7. insert a tamping instrument into the portal
  8. tamp the fusion plug
(while not claimed in the patent, presumably the surgeon should also remove the tamping instrument.)

Minsurg sued a number of defendants who sell competing surgical systems. Minsurg sought a preliminary injunction. Magistrate Judge Jenkins conducted an evidentiary hearing recommended denial of Minsurg's motion. The decision turned on how important "minimally invasive" was.

First, to get a preliminary injunction, Minsurg needed to establish that it was: (1) likely to succeed on the merits; (2) likely to suffer irreparable harm without the injunction; (3) the balance of hardships favored Minsurg; and (4) the public interest would be best served by granting the injunction.

A problem for Minsurg was that the '761 Patent protects a method of performing surgery, but the defendants were not the surgeons who allegedly practice the method. The defendants sell products which can be used to practice the method. So Minsurg asserted three theories of liability: (1) Defendants directly infringed the patent; (2) Defendants actively induced their customers to practice the method; and (3) Defendants contributed to the infringement.

To have patent infringement (under any of the theories), there must be an act of direct infringement. And with a method patent, direct infringement happens "only by one practicing the patented method." Joy Techs., Inc. v. Flakt, Inc., 6 F. 3d 770, 775 (Fed. Cir. 1993).

Direct Infringement

Because the Defendants themselves do not perform the steps of the method, they are not direct infringers:
Defendants do not perform the steps of the process set forth in the '761 Patent because they do not perform spinal fusion surgeries. Rather, Defendants sell systems used by physicians to perform such surgeries. Consequently, Plaintiff is not likely to succeed on its claims of direct infringement.
(This does not seem to have been a tough part of the decision, and skimming Plaintiff's motion, it does not appear Plaintiff really pursued direct infringement as a grounds for preliminary injunction here.)

Indirect Infringement - Induced infringement and Contributory infringement

Even though a defendant does not directly infringe a patent, it can still be held liable if it actively induces others to infringe the patent or contributes to another's infringement of the patent (where the piece the defendant contributes has no alternative non-infringing uses). Minsurg's theory here was that Defendants sold their kits and instructed their customers (the surgeons) on how to use them. And using the kits required practicing the claimed method. The Court did not agree.

As a factual matter, the claimed method requires the portal to be placed into a patient through a "minimally invasive" opening. Defendants offered testimony that the vast majority of spinal surgeries are done through an "open incision," as opposed to through a "minimally invasive incision." Thus, none of the Defendants' systems necessarily infringe because they can be used in non-infringing ways -- specifically when they are used through an "open incision."

Because there is a substantial, non-infringing use, Minsurg's only hope was to show evidence of active and willful inducement. "Evidence of active steps taken to induce infringement, such as advertising an infringing use, can support a finding of an intention for the product to be used in an infringing manner." Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1322 (Fed. Cir. 2009). Minsurg presented evidence of Defendants' advertising showing their systems being used in both open incisions and minimally invasive incisions. But Minsurg did not have any evidence of any physicians actually using the equipment in a minimally invasive procedure. And the advertising evidence did not appear to be sent out after the '761 Patent issued. (Thus, how could one market infringing steps before the patent laying out what infringement entailed issues. Presumably, there is an argument that whatever intervening rights attached to the '761 Patent during prosecution could help Minsurg here, but that is a topic for another post.)

Motion for preliminary injunction denied.

Minsurg International, Inc. v. Frontier Devices, Inc., Case No. 8:10-cv-1589, slip op. (Feb. 7, 2011) (J. Covington) adopting Report & Recommendation of Mag. Jenkins

Wednesday, November 17, 2010

You can not use a pizza cutter to shave your legs or beard.

I learn something new everyday. Thanks, Anticipate This!™

For my non-patent attorney/litigator readers -- the inventor's patent application is directed to a new type of razor-head. The razor-head has a cross shape, which imparts a cutting and rotary action on the hair being shaved.

The Examiner said it wasn't new and it was obvious in light of the prior art. What was the prior art? A pizza cutter.

The applicant's argument -- you can't use a pizza cutter as a razor to shave. The Examiner said the pizza cutter is inherently capable of being used for shaving. But the Examiner went even further -- an experiment was conducted! The Examiner used a rotary pizza cutter and an elongated pizza cutter to shave a block of pork with skin on it. Seriously, that had to be a fun day at work.

Co-worker: "Hey, what's that slab of pork doing in here?"
Examiner: "I'm going to shave it with a pizza cutter."
Co-worker: "Ok. Have fun. Let me know how that goes."

Unfortunately, the Examiner didn't swear to the accuracy of his experiment, or provide sufficient details, so the Board of Patent Appeals and Interferences found it unpersuasive. Rather, the Board held that the applicant rebutted the Examiner's argument.
In particular, we agree with Appellant that Romanoff's pizza cutter is not capable of being used to shave hair because Romanoff's pizza cutter, which is the size of at least one pizza, is too large and unwieldy to be suitable for use for shaving, and because the "blade" of a pizza cutter is typically much duller than a razor blade and thus is not inherently capable of being used for shaving.
I think I'll try shaving tomorrow with my rotary pizza cutter. Or maybe I won't, because the Applicant also conducted an experiment.
The declaration evidence further establishes that pizza cutters do not inherently possess the capability of being used for cutting hairs during shaving. See Elmore Decl. (in which Ms. Elmore declared that she was unable to remove hair by shaving her leg or her dog using an ordinary, household, rotary pizza cutter.")
Rejections reversed.

Thursday, November 11, 2010

No "internet radio" mastermind means no patent infringement.

Zamora Radio owns a patent (U.S. Patent No. 6,349,339) directed to "internet radio" technologies. It sued a number of internet radio companies (Last.fm, CBS radio, Slacker, Pandora, Rhapsody, Realnetworks, DKCM, Soundpedia, AOL, Accuradio, and Yahoo).

As with all patent infringement lawsuits, claim construction was key. The technology at issue generally allows an internet radio provider to stream content (music, video, whatever) to a user, allowing the user to pause or skip forward, but not allowing the user to rewind. Thus, the system presents the user with a predetermined order of content and prevents the user from modifying that order or replaying particular content.

A key claim phrase in claim 1 concerned whether the user's computer or the internet radio company's computer set the predetermined order. The Court's earlier claim construction required the user's computer to set the order. Each of the defendants' systems used the defendants' servers to set the predetermined order. Plaintiff agreed that, given this claim construction, there was no infringement of claim 1.

Plaintiff requested a "consent judgment" be entered finding no infringement of claim 1. Presumably, plaintiff wanted judgement against it so it could seek appellate review from the Federal Circuit on the trial court's claim construction. Defendants opposed this request because they wanted a judgment of non-infringement on other claims as well (not just claim 1). The Court refused to enter the consent judgment because "there was obviously no consent from Defendants."

Each defendant asked for summary judgment of non-infringement on the remainder of the claims. The Court agreed and found various non-infringement arguments of the different defendants convincing for various reasons. But for each of the defendants (other than Pandora), the Court found that the doctrine of "divided infringement" was controlling. (I am guessing that Pandora did not make this argument (the briefs are under seal) because the Court did not address it in the order granting Pandora's summary judgment motion.)

Divided Infringement

Direct patent infringement requires that each element of a claimed invention is performed by a single entity. Sometimes, a claim is not directly infringed by a single entity, but 2 or more entities combined perform all of the steps of a claimed invention. If the 2 entities don't know if each other, and don't have any relationship, it can't be said that they jointly infringe the patent. But where 1 of the parties is the "mastermind" exercising "control or direction" over the entire infringement, liability will be found.

Here, 6 defendants (CBS and its parent company, AOL, Last.fm, Realnetworks, and Rhapsody) argued that there was no such mastermind, and thus there could be no infringement.
“Infringement requires, as it always has, a showing that a defendant has practiced each and every element of the claimed invention.” BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373, 1380 (Fed. Cir. 2007) (internal citation omitted). Under the “divided infringement” theory, if a third party carries out one or more steps of the claim on the defendant’s behalf, the defendant can still be held liable if it controlled or directed the conduct of the acting third party. Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1330 (Fed. Cir. 2008) (The “control and direction” standard is satisfied “where the law would traditionally held the accused direct infringer vicariously liable for the acts committed by another party that are required to complete performance of a claimed method.”). Moreover, “[m]aking information available to the third party, promoting the third party, instructing the third party, or facilitating or arranging for the third party’s involvement in the alleged infringement is not sufficient.” Emtel, Inc. v. Lipidlabs, Inc., 583 F. Supp. 2d 811, 839 (S.D. Tex. 2008); Muniauction, 532 F.3d at 1329-30.

Every asserted system claim of the ‘399 Patent requires, among other things, a “server arrangement” that provides data packets and a “user computing arrangement” that receives, stores, and executes instructions to use the data packets. Also, every asserted independent method claim requires that some steps of the method are performed at the server arrangement, while other steps must be performed at the user’s computer. Here, the “server arrangements” are provided by Defendants, while the accused “user computing arrangement” - the personal computers used by end-users of the Radio 2.0/play.it and Last.FM server application systems - are not provided by any of the Defendants. Furthermore, it is undisputed that there is nothing akin to an agency relationship between Defendants and users of Defendants' systems who provide and use the UCAs.

Accordingly, because the claims require multiple actors to meet the limitations of the accused claims and because there is no dispute that the parties involved do not control or direct each others' actions or their computers, Defendants are entitled to summary judgment of no infringement on this basis as well.
(The Court entered 3 separate orders on summary judgment. The above quote is from the Order granting summary judgment in favor of CBS, AOL, and Last.fm).

Summary judgment of non-infringement granted in favor of each defendant.

Zamora Radio, LLC v. Last.fm, et al., Case No. 09-20940, slip op. (S.D. Fla. Nov. 5, 2010) (Mag. Torres)

Tuesday, November 9, 2010

Lamebook v. Facebook


Every few months, an interesting and fun trademark dispute bubbles up to national news. I've previously talked about The North Face v. The South Butt and Geeknet's "Unicorn meat - the other white meat" campaign. The South Butt case is settled (and apparently, they're still selling South Butt stuff). Geeknet didn't challenge the National Pork Board's charge.

Now comes Lamebook, which posts "lame and funny pictures, status updates, and other gems found on your favorite social networking site." Its tagline: "Lamebook. the funniest and lamest of facebook." Guess who'd rather Lamebook stop?

Facebook sent some cease and desist letters. As I tell all of my clients seeking to enforce their intellectual property, if you send a cease and desist letter, you're opening yourself up to a potential declaratory judgment action where the recipient of the letter sues you, asking the court to decide whether or not there is a violation of the intellectual property at issue. This is exactly what Lamebook did.

Lamebook wants a declaration that it doesn't infringe Facebook's marks, doesn't dilute Facebook's marks, and that Lamebook's activities are protected by the First Amendment.

This should be another interesting opportunity to observe a parody defense. Facebook puts forward some law from the 9th Circuit that a parody defense requires the parody to be directed at the original work. Lamebook isn't making fun of Facebook -- Lamebook is making fun of Facebook users.

The complaint is below. Enjoy!

Friday, November 5, 2010

"Any person" may pursue a patent false marking claim on behalf of the government.

SDJP Patent Group, LLC sued Macho Products, Inc. for allegedly falsely marking some of its martial arts products. As you may know by now, false marking litigation has become a cottage industry for plaintiffs allowing the recovery of up to $500 for each offense of falsely marking a product as patented with an intent to deceive.

Macho asked the court to stay the proceedings until after the Federal Circuit rendered its Stauffer decision, addressing who can bring a false marking suit. The court said no.

Macho then sought dismissal, arguing that SDJP has no standing because there has been no injury. The Stauffer decision was dispositive:
Defendant's primary defense that the United Slates did not suffer an "injury in fact" is erroneous, in light of the Stauffer decision. Therefore, Defendant's motion to dismiss is DENIED for the following reasons.

Section 292 (b) is a qui tam provision authorizing "any person"' to pursue an action on the government's behalf. A qui tam provision is a statutory assignment of the United States' rights, and the assignee of a claim has standing if the United States has suffered an injury in fact, even if the assignee has suffered no injury himself. Vt. Agency of Natural Res. v. United States ex rel. Stevens, 529 U.S. 765, 773 (2000). According to the Federal Circuit a violation of section 292 inherently constitutes an injury to the United States:
In passing the statute prohibiting deceptive patent mismarking. Congress determined that such conduct is harmful and should be prohibited. The parties have not cited any case in which the government has been denied standing to enforce its own law. Because the government would have standing to enforce its own law, [the plaintiff], as the government's assignee, also has standing to enforce section 292.
Stauffer, 2010 U.S. App. LEXIS 18144. at *11-12. Macho asserts that Plaintiff has been unable to allege any specific injury to Plaintiff or to the United States. However, Defendant violated section 292, which is sufficient to show an "injury in fact" to the United Slates. Consequently, Plaintiff has sufficiently alleged (1) an injury in fact to the United States that (2) is caused by Macho's alleged conduct, marking its equipment with expired patent numbers, and (3) is likely to be redressed, with a statutory fine, by a favorable decision. Plaintiff's standing arises solely from his status as "any person," under section 292 (b) and he need not allege more for jurisdictional purposes.
Macho's next argument was that it didn't intend to deceive anyone. But as I argued in an earlier post, that's not going to work for dismissal. That's a fact question. You can't get out of these suits by saying "I didn't intend to deceive anyone." You've got to prove it.
Further, Defendant's assertion that there was no intent to deceive the public is a matter of fact. A trial judge may resolve factual disputes when subject matter jurisdiction turns on the resolution of contested facts. Arbaugh. 546 U.S. at 514. However, if the contested facts are also central to the cause of action then jurisdiction will be found and the trier of fact will resolve the contested facts. Here, the contested "intent to deceive the public" is an element of the cause of action (False Marking) and a matter for a jury to decide.
Motion to dismiss denied.

SDJP Patent Group, LLC v. Macho Products, Inc., Case No 8:10-cv-01232, slip op. (M.D. Fla. Nov. 2, 2010) (J. Kovachevich)

Thursday, November 4, 2010

"Nice try toots." Photographer's self-portrait at age 14, on the cover of a pornographic movie, is copyright infringement.

Lara Jade Coton is a professional photographer. (She has an interesting blog here.) When she was 14, she took a picture of herself playing dress up. She put that picture on a website. In 2007, when she was 17, she learned that her picture was being used to market a pornographic movie. Understandably, she was shocked. She found that TVX Home Video produced the movie and contacted them demanding they remove her image.

In response to her first email, TVX said they'd investigate her claim. She then responded and demanded money and confirmation that they wouldn't use her images again in the future. TVX's response was obnoxious:
Not only will you not be compensated for your photo we have turned this problem over to our attorney it seems the company my graphic company got the photo from on the internet is a public domain operation. You knew this when you originally sent us your scheming letter. Nice try toots. We are still going to remove you from the art, not because of your claim but let's face it your picture means very little to the film.
[Note to potential defendants -- if you think snarky responses like this are likely to make a plaintiff go away, you're wrong. Practice pointer. If your response includes the phrase "Nice try toots," you should probably take a day before you send it and then rephrase. Just my $0.02] . Coton responded to this email, which TVX couldn't resist responding to either (in all caps no less)
* * *
(errors in original). After some exchanges with the graphics company, Coton sued for a number of theories, including copyright infringement, misappropriation of an image, and defamation. TVX didn't respond, and thus defaulted. A trial was held on damages.

Copyright damages

There are 2 different types of damages you can get in a copyright case: (1) actual damages & defendant's profits; and (2) statutory damages. Statutory damages can be very good and helpful. But there is a catch. You must timely register your copyright with the Copyright Office in order to try to get them. If you author original works, do yourself (or your future litigation counsel) a favor and register them. Do it now. It might help you. And it's cheap. You can try it yourself at the Copyright Office's Electronic Copyright Office. Seriously, you might thank me later on. (Statutory damages range from $750 to $150,000 (if infringement was willful). That's a pretty big stick to carry around and threaten against infringers.)

Coton didn't have a timely registered copyright registration on her picture. So the only damages she could pursue were her actual damages and TVX's profits attributable to the infringement. She had previously licensed one of her pictures for £2000 (about $3k U.S. at the time of trial). So, that's what she got in actual damages.

Regarding infringer's profits, a plaintiff must put forward the defendant's gross revenue, and then the defendant must prove what parts of the revenue are attributable to things other than the infringement. TVX had sold 189 DVDs for an average of $6.50/DVD, with $0.70/DVD attributable to things other than the infringement. Do the math and this yields another $1k in damages.

So, her total copyright infringement damages award is just over $4k.

Misappropriation of an Image

Florida law also protects against the unauthorized commercial use of another's name, portrait, photograph, or other likeness. See Fla. Stat. § 540.08. No question on liability here (remember, TVX had defaulted), so again just a question of damages.

Coton sought $770 for a licensing fee, $25k for harm to her professional reputation, and $25k in punitive damages. The Court refused the $770 request as Coton was already paid a license fee by way of the copyright damages. The Court found the $25k for harm to her reputation was reasonable. The Court refused the punitive damages request because there was no evidence that the defendants had been willful in infringing the copyright.

Defamation by Implication

Coton's final damage claim was for defamation by implication. Coton asked for $100k as "fair compensation for the humiliation she suffered as a result of having her photograph used in connection with the ... pornographic movie and related marketing materials." The Court found this figure reasonable.

Thus, total damages: copyright ($4k), misappropriation of portrait ($25k), defamation by implication ($100k).

Coton v. Televised Visual X-ography, Inc., Case No. 8:07-cv-1332, slip op. (M.D. Fla. Sept. 16, 2010) (Magistrate Judge Wilson)

Wednesday, November 3, 2010

No sales? Doesn't matter. Offering to sell is still patent infringement.

Del Zotto Products of Florida makes building forms and precast concrete products. Its Gold Rock blocks include a protruding lifting device on the top surface, and a recess on the bottom surface. It is possible to position the Gold Blocks, one on top of the other, using the lifting device and recess to align the blocks. Problem is, Stone Strong, LLC owns a number of patents directed generally to concrete blocks which have a lift loop on the top of the block which fits into a recess in the bottom of the block above to assist with aligning blocks. Stone Strong sued for patent infringement.

Del Zotto argued that: (1) it never sold the Gold Rock blocks (although it had built a wall using these blocks at its facility in Ocala); and (2) the lifting hook on the Gold Rock blocks is not used for aligning blocks.

After a non-jury trial, the Court concluded that the Gold Rock infringes:
The key factor in resolving this determinative issue is the size of the recess or notch on the bottom of the blocks in relation to the size of the lift loop on the top of the blocks. Obviously, as the tolerance between the two features increases, the efficiency of the alignment function rapidly decreases to a point that it becomes nonexistent. Clearly, however, a notch or recess that is one foot wide at the bottom, decreasing to 9½ inches at the top, with a height of 5 inches receiving a steel loop 4 inches in diameter, provides a capability of being used as an aid in alignment, and the claims of the patents in suit (as previously quoted) were literally infringed when Del Zotto offered to sell its Gold Rock forms and blocks. See Bell Communications 10 Research, Inc. v. Vitalink Communications Corp., 55 F.3d 615, 622-23 (Fed. Cir. 1995) (“[A]n accused product that sometimes, but not always, embodies a claimed method nonetheless infringes.”); Paper Converting Mach. Co. v. Magna-Graphics Corp., 745 F.2d 11, 20 (Fed. Cir 1984) (“[I]mperfect practice of an invention does not avoid infringement.”); Roche Prods., Inc. v. Bolar Pharmaceutical Co., 733 F.2d 858, 861 (Fed. Cir. 1984) (“Section 271(a) prohibits, on its face, any and all uses of a patented invention.”).
And it didn't matter that Del Zotto never actually sold any of its Gold Blocks. Patent infringement protects against unauthorized using, making offering to sell, and selling a patent invention.

Injunction to be entered in favor of Stone Strong.

Stone String, LLC v. Del Zotto Products of Florida, Inc., Case No. 5:08-CV-503, slip op. (M.D. Fla. Oct. 25, 1010) (J. Hodges)

Monday, October 18, 2010

S-Corp and Its Sole Owner Are Both Proper Patent, Trademark & Copyright Plaintiffs

Claudia Croft and Sheer Delight, Inc. sued Be Wild, Inc, BWild, Inc, and Brian Cohen for patent, copyright, and trademark infringement. Defendant sought summary judgment that Sheer Delight, Inc. could not be a proper patent infringement plaintiff because Croft owned the patent-at-suit individually and hadn't exclusively licensed it to Sheer Delight. (Similar arguments were presented concerning the trademark and copyright theories.) Plaintiff admitted that it did not have a written exclusive license. But plaintiff argued at summary judgment that it had an implied exclusive license. And this carried the day:
First, as to whether one or both Plaintiffs is the proper party on each of the claims, the Court finds a genuine issue of material fact exists. Plaintiffs posit that because Plaintiff Sheer Delight, Inc., is a sub-chapter S corporation with Plaintiff Claudia Croft as its sole owner, the profits are attributable, or passed through, as income to Croft. Croft's affidavit avers that the intent of Croft as the patent owner was that Sheer Delight, Inc., would be the only licensee of the patent-in-suit. These submissions are sufficient to avoid summary judgment on the issue of implied exclusive licensees of patents and trademarks and legal or beneficial owners and exclusive licensees of copyright.
Croft v. Be Wild, Inc., Slip Op., Case No. 09-863 (M.D. Fla. Oct. 7, 2010) (J. Lazzara)

Friday, October 15, 2010

Submitting an unpublished work to a writing competition doesn't mean unaffiliated people had access to it

Bridgette Burgin submitted her manuscript, The Final Call, to some writing competitions. She later sued Tim LaHaye and Jerry Jenkins, claiming two books they co-authored infringed her copyright. The defendants won summary judgment (in a 28 page opinion), as the court found the defendants did not have access to Burgin's work. Burgin appealed. The Eleventh Circuit agreed with the trial court.

To prove copyright infringement, Burgin needed to show: (1) she owned a valid copyright; and (2) defendants copied protected elements. Defendants didn't challenge the first part. But Burgin couldn't prove that defendants copied protected elements.

There are 2 ways to prove that a defendant copied protected elements: (1) with direct evidence; or (2) with circumstantial evidence. No direct evidence in this case, so Burgin tried to prove copying circumstantially. To do this, Burgin needed to show either: (1) the defendants' works were "strikingly similar" to her work; or (2) the defendants had access to her work and the "probative similarity" of the works. Burgin couldn't do this:
Here, even viewing the evidence in the light most favorable to Burgin, she has not shown that either of the defendants had access to her work, and thus has not established an inference of copying. Burgin has not demonstrated that either LaHaye or Jenkins ever had a reasonable opportunity to view a manuscript of The Final Call. See Corwin v. Walt Disney Co., 475 F.3d 1239, 1253 (11th Cir. 2007) (“Access requires proof of a reasonable opportunity to view the work in question.” (quotation omitted).). The evidence shows that neither LaHaye nor Jenkins was affiliated with the Peter Taylor Prize writing competition, to which Burgin submitted her work. That Jenkins may or may not have corresponded with one of the Peter Taylor Prize judges regarding an entirely separate matter does not establish a reasonable opportunity for Jenkins to have viewed Burgin’s original work. To consider this flimsy “evidence” sufficient to establish access would be entirely speculative. See Ferguson v. Nat’l Broad. Co., 584 F.2d 111, 113 (5th Cir. 1978) (“[A] finding of access in this case would be based on speculation or conjecture, and this is impermissible.”).

Burgin also asserts that submission of a portion of her work to a Writer’s Digest writing competition was sufficient to show access. The evidence shows that LaHaye has never had any connection to the Writer’s Digest prize, and, although Jenkins was a judge for the competition, Burgin has not shown that he had a reasonable opportunity to view the work. Burgin submitted her writing in the competition categories of romance, thriller and suspense, and science-fiction/fantasy; Jenkins judged only the Inspirational Writing (Spiritual/Religious) category. Burgin’s work never progressed past the first round of the competition; Jenkins judged only the second round. Moreover, the evidence shows that the many manuscripts that were not chosen to progress to the second round were set to be destroyed. A mere allegation that Jenkins was affiliated with the same large writing competition to which Burgin submitted her work is not enough to establish access. Concluding that Jenkins may have seen Burgin’s work although he judged a different category and a different round would be impermissibly speculative. See Ferguson 584 F.2d at 113.


Thursday, October 14, 2010

Fair use to use motorcycle pictures in a magazine? Let the jury decide. But no profits from sales of the motorcycle or magazine for copyright holder

Kawasaki was introducing a new motorcycle, so it hired Roaring Toyz to customize two motorcycles. These custom motorcycles were to be displayed alongside the standard model during Daytona Bike Week. Latimer, a professional photographer, was engaged to take pictures following Roaring Toyz' progress. Latimer emailed some of his pictures to Roaring Toyz (each picture included a notice that it was protected by copyright). Roaring Toyz emailed the pictures to Kawasaki. Kawasaki distributed a press kit which included five of these pictures. Cycle World magazine (which is published by defendant Hachette Filipacchi Media US, Inc.) published an article about the new motorcycle and included one of the pictures. Latimer sued for copyright infringement.

Fair Use

Hachette sought summary judgment that its use was a fair use. The Court weighed the law:

1) Purpose and character of the use
The use of the pictures in a magazine was a commercial use, but Latimer's photographs weren't selected to generate a profit or increase the sales of the magazine. Commercial nature doesn't weigh heavily against finding fair use. But magazine's use of the photographs without significant alteration was not significantly transformative. Thus, balance of this sub-factor weighted slightly against finding fair use.

2) Nature of the copyrighted work
"Original, creative works merit more protection than more factual or derivative works." No dispute that Latimer's photographs are creative, and thus entitled to greater protection.

3) Amount and substantiality of the portion used
The magazine only did minimal cropping of the photographs. But the magazine couldn't really crop them, as doing so would have cut out portions of the motorcycle (and what would have been the point of that?). Thus, this factor was neutral.

4) Effect of the use on the potential market
This factor is where the Court couldn't decide the issue at summary judgment. The magazine argued that Latimer was able to sell other photos to another magazine. But that had nothing to do with the market for the pictures at issue in the lawsuit. "[T]he question is not whether other similar photos could be sold in the future. Rather, it is whether Cycle World's publication impaired the market for the specific photos it used." Record didn't answer that question, so the jury will.

Indirect Profits

The Court also addressed defendants' request for summary judgment that there was no nexus between their profits and the copyrighted work. A copyright plaintiff is entitled to a defendant's profits attributable to the infringement. Per the statute (17 USC 504(b)), the plaintiff must put forth proof of the defendant's gross revenue, and it is the defendant's burden to prove his or her deductible expenses and those elements of profits attributable to factors other than the infringement.
Though the Eleventh Circuit has never ruled on this issue, virtually every other Court of Appeals "has required some nexus between the infringing activity and the gross revenue figure proffered by a plaintiff." Ordonez-Dawes v. Turnkey Props, Inc., 2008 WL 828124 (S.D. Fla. Mar. 26, 2008)

A low initial burden is placed on the copyright holder to make a showing of some causal connection between the infringement and the profits claimed. "[A] plaintiff may not seek gross revenues based entirely on a speculative connection to the plaintiff's claim." Thornton v. J Jargon Co., 580 F. Supp. 2d 1261, 1280 (M.D. Fla. 2008)
Latimer's claim here was too speculative. From Kawasaki, Latimer sought profits from the sales of the motorcycles. And from the magazine publisher, he wanted profits from sales of the magazine. The Court was not convined by Latimer's evidence and argument, and so it granted summary judgment on this issue to defendants.

Latimer v. Roaring Toyz, Inc., Slip. Op., Case No. 06-1921 (M.D. Fla. Sept. 21, 2010) (J. Moody)

Thursday, October 7, 2010

One small step for man?

This post has nothing to do with Florida law. Nor does it concern copyrights, trademarks, or patents. But I find the case interesting, so I thought you might also.

Bruce McCandles II was a U.S. Astronaut. Like me, he did his graduate studies at Stanford (his degree is in electrical engineering -- mine is in computer science). Our paths substantially parted there. He became an astronaut. I didn't. He rode to space twice. Once on the Challenger in 1984 (2 years before it exploded) and once on Discovery in 1990. A very impressive career indeed.

During his first space flight in 1984, he apparently became the first astronaut to make an untethered space flight using a Manned Maneuvering Unit (MMU):

Photo source NASA.

So, why am I writing about this? Because he sued Dido's music labels for the cover art of her 2008 album "Safe Trip Home."

Ah, you say to yourself. He's claiming copyright infringement, right? Nope. NASA has a pretty interesting copyright policy. If you're going to use NASA materials, you can't state or imply that NASA endorsed your product or service, and NASA should be acknowledged as the source of the material. You also can't try to claim copyright or other rights in NASA material. Regarding photographs, NASA states:
Photographs are not protected by copyright unless noted. If copyrighted, permission should be obtained from the copyright owner prior to use. If not copyrighted, photographs may be reproduced and distributed without further permission from NASA. If a recognizable person appears in a photograph, use for commercial purposes may infringe a right of privacy or publicity and permission should be obtained from the recognizable person.
That last sentence is how McCandless is pursuing the record companies. He has sued under California's right of publicity statute, which provides a cause of action when someone uses another's name, photograph or likeness for the purpose of advertising without consent. The statute's definition of "photograph" requires that the person suing "is readily identifiable" in the picture. The statute provides some guidance:
A person shall be deemed to be readily identifiable from a photograph when one who views the photograph with the naked eye can reasonably determine that the person depicted in the photograph is the same person who is complaining of its unauthorized use.
So, is McCandless "readily identifiable" in Dido's cover art? Don't know. McCandless cites to publicity surrounding the photo when it was first released, as well as several endorsement requests he has received.

Damages under this statute seem similar to damages under the Copyright Act (NOTE, I'm not a California lawyer). Like the Copyright Act, there is a statutory damages component. Under the Copyright Act, statutory damages can range from $750 to $150,000 (assuming infringement is proved to be willful and the work is timely registered). See 17 U.S.C. § 504(c). Under California's right of publicity statute, statutory damages would be $750. Both acts also provide for actual damages to the plaintiff and disgorgement of profits attributable to the unauthorized use. So, McCandless needs to show what his actual damages are (if any) and then establish what the gross revenues to the music companies are which are attributable to the use of the picture.

Maybe the record companies will give him an Offer of Judgment for $750. We'll see what happens.

Wednesday, September 29, 2010

Parties failed to overcome "heavy presumption" that claim term carries its ordinary and customary meaning.

Judge Antoon resolved the parties' claim construction dispute of certain claim terms. First, "calcium carbonate in aqueous suspensions or dispersions of calcium carbonate" was construed as "insoluble particles of calcium carbonate distributed in water or calcium carbonate in a system with two or more distinct phases consisting of finely divided particles dispersed throughout a bulk substance." Second, "molar ratio" is construed as "a ration comparing a number of urea molecules to a number of hydrochloric acid molecules."

EMS seeks a declaratory judgment that it didn't infringe U.S. Patent 5,672,279. Generally, the' 279 Patent involves the removal of unwanted calcium carbonate using urea hydrochloride.

The original claims recited the removal of "undesirable solids." In response to a rejection during examination, the applicant changed "undesirable solids" to include the removal of "calcium carbonate in aqueous suspension or dispersions of calcium carbonate." The Court noted that this amendment did not change the ordinary and customary meaning of "calcium carbonate in aqueous suspensions or dispersions of calcium carbonate" (although the patentee disclaimed the subject matter that lied between those 2 terms).

PSL sought a claim construction that covered a preferred embodiment from the specification (and also arguably covers EMS's allegedly infringing products.) The Court found that that construction altered the ordinary and customary meaning of the claim term. EMS argued that prosecution history estoppel should limit the scope of the '279 claims. The Court did not agree with either party and adopted the construction above. The jury will decide whether EMS's products fall within the scope of the claim.

Environmental Manufacturing Solutions, LLC v. Peach State Labs, Inc., Case No. 6:09-CV-395 (M.D. Fla. Sept. 21, 2010) (J. Antoon)

Monday, September 27, 2010

Industry standards may be used in addressing infringement

Can a court rely on an industry standard in analyzing patent infringement? Yes.
We hold that a district court may rely on an industry standard in analyzing infringement. If a district court construes the claims and finds that the reach of the claims includes any device that practices a standard, then this can be sufficient for a finding of infringement. We agree that claims should be compared to the accused product to determine infringement. However, if an ac-cused product operates in accordance with a standard, then comparing the claims to that standard is the same as comparing the claims to the accused product. We ac-cepted this approach in Dynacore where the court held a claim not infringed by comparing it to an industry stan-dard rather than an accused product. An accused in-fringer is free to either prove that the claims do not cover all implementations of the standard or to prove that it does not practice the standard.
* * *
We acknowledge, however, that in many instances, an industry standard does not provide the level of specificity required to establish that practicing that standard would always result in infringement. Or, as with the ’952 pat-ent, the relevant section of the standard is optional, and standards compliance alone would not establish that the accused infringer chooses to implement the optional section. In these instances, it is not sufficient for the patent owner to establish infringement by arguing that the product admittedly practices the standard, therefore it infringes. In these cases, the patent owner must com-pare the claims to the accused products or, if appropriate, prove that the accused products implement any relevant optional sections of the standard. This should alleviate any concern about the use of standard compliance in assessing patent infringement. Only in the situation where a patent covers every possible implementation of a standard will it be enough to prove infringement by showing standard compliance.

You can't infringe a surrendered patent.

By way of general background, the Patent Office may reissue a patent if there was some error in the patent, or the inventor didn't claim all she was entitled to claim. See 35 U.S.C. § 251. See also MPEP 1401 et seq. The deal is that the inventor must "surrender" the issued patent to the Patent Office. In exchange, assuming the reissue application meets certain requirements, the Patent Office will reissue the patent with the error corrected.

Voter Verified has asserted such a patent, relating to electronic voting systems. U.S. Patent No. 6,769,613, entitled "Auto-verifying voting system and voting method" issued on August 3, 2004. On Valentine's day the following year, one of the co-inventors filed a reissue application. A few years later, examination ended on that reissue application and Reissue Patent 40,449 issued. Per the requirements of 35 U.S.C. § 251, the '613 was "surrendered" to the Patent Office so it could be reissued as the '449 patent on August 5, 2008. About a year later, Voter Verified sued Diebold and Premier Election Solutions for alleged infringement of both the '613 Patent and the '449 Reissue Patent.

Defendants sought, and were granted, summary judgment that the '613 Patent could not be infringed. It had been surrendered to the Patent Office, and thus was no longer capable of being infringed.
Pursuant to 35 U.S.C. § 251, when a patent is “deemed wholly or partly inoperative or invalid by reason of a defective specification or drawing, or by reason of the patentee claiming more or less than he had a right to claim in the patent, the Director shall, on the surrender of such patent and the payment of the fee required by law, reissue the patent for the invention disclosed in the original patent . . . .” Once a reissue patent has been granted, “the original patent cannot be infringed . . . for the original patent is surrendered.” Seattle Box Co. v. Indus. Crating & Packing, Inc., 731 F.2d 818, 827 (Fed. Cir. 1984). Notwithstanding the surrender of the original patent to the PTO, 35 U.S.C. § 252 provides that “in so far as the claims of the original and reissued patents are substantially identical, such surrender shall not affect any action then pending or abate any cause of action then existing . . . .” 35 U.S.C. § 252 (emphasis added). In sum, the original patent must be surrendered to the PTO in order for the reissue patent to be granted, rendering the original patent unenforceable. Despite this surrender, a patent holder may still enforce a claim of the reissued patent against infringing activity that occurred before the reissue date if the asserted reissued claim is substantially identical to a claim in the original patent. Bloom Eng’g Co., Inc. v. N. Am. Mfg., 129 F.3d 1247, 1250 (Fed. Cir. 1997). On the other hand, claims of the reissued patent that are not substantially identical to a claim in the original patent cannot be asserted against infringing activity that occurred before the date of the reissue. Id.
As such, the '613 Patent is no longer enforceable. Any claims of the '449 reissue patent, that are substantially identical to the claims of the original patent, are enforceable for infringing activity that happened before the '449 reissue date.

Prior Art

The parties also disputed whether or not certain articles published in 1986 constituted prior art. Apparently, prior to the priority date of the patent, the articles were available on a website. The website included a search tool which could have been used to locate the three articles. Plaintiff argued this wasn't proper indexing of the articles to make them prior art. Defendant countered that it was.

The Court, after noting controlling Federal Circuit law, explained that indexing wasn't dispositive, but the following factors should be considered:
(1) the length of time reference was displayed; (2) the expertise of the intended audience; (3) whether there is a reasonable expectation that the displayed information will not be copied; and (4) the ease with which the material could be copied.
Because someone could have used the website's search tool to find these articles, the Court held that they were prior art.

Indirect Infringement

Direct infringement is when a single party does every step or element of a claimed method or apparatus. But if 2 or more actors must do something to infringe a claim, indirect infringement principles apply. So, where a party participates in infringing a claim, or encourages someone else to infringe a claim, but does not itself perform every limitation of the claim, that party may be liable for indirect infringement. The plaintiff in such a situation must prove that there is direct infringement (i.e. someone does perform all of the limitations of the claim). In other words, you can't have indirect infringement if there is no direct infringement.

An exception to this rule is where 2 or more parties combine to infringe a claim, and 1 of those parties acts as the mastermind -- exercising direction or control over the other actors in order to infringe the claim. That mastermind is vicariously liable for the acts of infringement.

This is an important concept to remember when drafting claims. Claims should be drafted to be infringed, and you want to make sure the entity infringing those claims is a worthwhile entity to pursue in litigation. Otherwise, the issued patent might not be as valuable as it could be.

The claims in the '449 reissue patent relate to electronic voting method and systems. Some of the method claims require the following steps:
  • voting by a voter using a computer voting station, whereby the computer voting station temporarily stores the voter's votes
  • printing the voter's votes;
  • comparison by the voter of the printed votes
  • deciding, by the voter, whether or not the printed ballot is acceptable; and
  • submitting the acceptable printed ballot
As you can see, a computer system does some things (temporarily stores the votes, prints a ballot, submits a ballot). But the voter has to do some things also (vote, compare the ballot, and decide if the ballot is acceptable. So, who could directly infringe this claim? The voter has to do something. And the computer system (such as the defendants' accused systems) has to do something. Because the Defendants don't exercise sufficient control or direction over the users, the accused devices don't infringe the subject claims.


One of the claims at issue includes the limitation "means for tabulating the acceptable votes." The Court held that this limitation is a means-plus-function limitation, which means that first the function must be determined, and then the specification must be examined to see what adequate structure is disclosed for performing that function. For computer inventions, if the structure disclosed is a general purpose computer, the specification must also disclose an algorithm for performing the function. This is true regardless of the simplicity of the algorithm. Judge Fawsett explained the law:
In cases involving a computer-implemented invention in which the inventor has invoked means-plus-function claiming, the Federal Circuit consistently requires that the structure disclosed in the specification be more specific “than simply a general purpose computer or microprocessor.” Aristocrat Techs. Austl. Pty Ltd. v. Int’l Game Tech., 521 F.3d 1328, 1333 (Fed. Cir. 2008). The point of this requirement is to limit the scope of the claim to the structure and its equivalents and thus avoid purely functional claiming. Med. Instrumentation & Diagnostics Corp. v. Elekta AB, 344 F.3d 1205, 1211 (Fed. Cir. 2003) (“If the specification is not clear as to the structure that the patentee intends to correspond to the claimed function, then the patentee . . . is attempting to claim a [function] unbounded by any reference to structure in the specification.”). Because “general purpose computers can be programmed to perform very different tasks in very different ways, simply disclosing a computer as the structure designated to perform a particular function does not limit the scope of the claim to the corresponding structure that performs the function,” as required by § 112 ¶ 2. Aristocrat, 521 F.3d at 1333. Therefore, in a means-plus-function claim where the disclosed structure is a general purpose computer programmed to carry out a particular function, the claim is invalid as indefinite if the specification fails to disclose an algorithm for performing the claimed function. Net Moneyin, 545 F.3d at 1367 (citing Aristocrat, 512 F.3d at 1334); WMS Gaming, Inc. v. Int’l Game Tech., 184 F.3d 1339, 1349 (Fed. Cir. 1999).
Because the specification didn't disclose a sufficient algorithm, the claim was invalid as indefinite.

Wednesday, September 15, 2010

Possession may be 9/10 of the law, but that last 1/10th is a doozy. The power of license agreements. What are you getting when you "buy" software?

Usually, you're getting a license to use the software -- not an ownership interest in the copy of the software you just purchased. Think back to the days of cassette tapes with music on them. When you bought a tape, you had this physical thing you could do certain things with. If you wanted, you could resell it to someone else (i.e. at a garage sale). No worries. Publishers of content on the tape had less worry of you creating tons of unauthorized copies of those tapes because making copies of tapes was slow, hard, and not exact. Then we move into the digital age. CDs are easy to copy. Digital data is easy to copy. Those publishing digital content need to control their distribution channels.

First Sale Doctrine

Copyright protects works of authorship fixed in a tangible medium of expression. One affirmative defense to a charge of copyright infringement is the first sale doctrine. The first sale doctrine provides that once a copyright owner sells a particular copy of her work, the purchaser may sell or otherwise dispose of that copy of the work. See 17 U.S.C. 109(a).

Timothy Vernor bought a number of used copies of Autodesk's AutoCAD Release 14 software. He bought these copies from others who had directly purchased AutoCAD from Autodesk. Vernor then sold these copies on eBay. Sounds like a typical first sale, right? Wrong.

The entities that "bought" AutoCAD from Autodesk in the first place hadn't "bought"it at all. They had licensed it. And their license precluded them from transferring what they had bought to someone else without Audodesk's permission.

If you don't own it, you can't assert the first sale doctrine as a defense to copyright infringement:
The first sale doctrine does not apply to a person who possesses a copy of the copyrighted work without owning it, such as a licensee.
(citing 17 U.S.C. 109(d); Quality King Distribs. , Inc. v. L'Anza Research Int'l Inc., 523 U.S. 135, 146-47 (1998)).

Essential Step Defense

The Ninth Circuit also addressed the essential step defense. The essential step defense applies to software copyrights and provides that an "owner of a copy" of a copyrighted piece of software does not commit copyright infringement when the software is copied from a storage device (like a disk) into the memory of a computer. This copying step is an "essential step in the utilization of the computer program" and is not subject to copyright infringement liability. (Otherwise, starting a copyrighted computer program, which automatically copies portions of the program from disk into memory, would subject the user to infringement liability.) See 17 U.S.C. 117(a)(1).

In the Ninth Circuit, the essential step defense does not apply where the copyright owner grants a user a license and significantly restricts the user's ability to transfer the software. In order to benefit from the essential step defense, the defendant must be an owner of the copy (just like under the first sale doctrine above). So, the court must determine if the software user is a licensee or an owner of a copy. The Ninth Circuit prescribes three considerations for making this determination:
First, we consider whether the copyright owner specifies that a user is granted a license. Second, we consider whether the copyright owner significantly restricts the user’s ability to transfer the software. Finally, we consider whether the copyright owner imposes notable use restrictions.

Vernor's sales of AutoCAD

The Court then applied its tests to Vernor's activities. Autodesk distributed AutoCAD to its customers pursuant to a software license agreement. This agreement restricted what the customers could do with the software, and expressly stated that Autodesk retained title to the software. Recipients of the software could not transfer it without Autodesk's permission, and certain use restrictions were imposed.

Since the people who originally "bought" AutoCAD from Autodesk didn't "own" it, they couldn't properly sell it to Vernor. And Vernor couldn't use the first sale doctrine or essential step defense to protect himself. So the Court reversed the trial court's grant of summary judgment in Vernor's favor. All is not lost for Vernor, though, as the Court has permitted him to raise the copyright misuse defense (a topic for another post) when the case returns to the trial court.

Policy Arguments

Both sides presented important policy arguments. Vernor argued that the Court's decision is contrary to the law's aversion to restraints on alienation of personal property and could force everyone buying copyrighted property to thoroughly analyze the chain of title for what they were buying to see if an original sale were ever made.

eBay (which filed an amicus brief) argued that a broad view of the first sale doctrine was needed to help create secondary markets for copyrighted works. The American Library Association was concerned that the Court's view would hamper non-profit libraries' abilities to lend software for non-commercial purposes and would hamper their ability to distribute out-of-print software.

Autodesk argued the copyright owner's policy position in favor of the decision as it allows for tiered pricing, increases software companies' sales, lowers everyone's prices and reduces piracy.

The Court essentially punted on these issues, and said Congress is welcome to modify the first sale doctrine and essential step defense if it wants.


The first sale doctrine and the essential step defense only apply to defendants who own authorized copies of the subject work. Software copyright owners who want to control downstream distribution need to: (1) specify that the user is granted a license; (2) significantly restrict the user's ability to transfer the software; and (3) impose notable use restrictions. And users of software (i.e. all of us) need to be careful what we do with leftover discs and software we find -- be careful trying to sell it, because you might not own what you think you own.

(Note that other circuits have not necessarily adopted this test. Vernor tried to convince the Court not to take this approach as it would conflict with the Federal Circuit and Second Circuit's positions on the essential step defense. The Court did not find this argument persuasive. I have not found any Eleventh Circuit decisions discussing the essential step defense.)

Monday, September 13, 2010

Allegations of false marking alone give a plaintiff standing?

False patent marking has become the new quick-hit area for patent infringement litigation. I have discussed these cases and issues previously. To briefly recap, Congress enacted the false marking statute (35 U.S.C. §295) to prevent people from deceiving the public into believing their goods were patented. Thus, if you mark your widget as "patented" or covered by U.S. Patent No. 1,234,567, and it isn't and you intended to deceive the public by marking it as such, then you shall be fined not more than $500 for each offense. The statue goes on to permit any person to bring an action to enforce this right. And to encourage each of us to do so, if we bring such a suit and win, we get half the fine.

These cases made the headlines when a patent attorney sued Solo Cup for falsely marking billions of cups. The potential fine there was in the trillions of dollars. (The total exposure was $10.8 trillion -- who wouldn't want half of that?) Solo Cup won that case on summary judgment -- there was no question that Solo Cup did not intend to deceive the public by marking its cups with expired patent numbers.

Most defendants present this argument, but it is not an argument you can win at the pleading stage. Whether or not you intended to deceive the public by marking a product with an expired patent number requires you to prove you didn't. You can't dismiss a plaintiff's properly pleaded case by saying "I didn't intend to deceive anyone."

This brings in another avenue of attack defendants have used -- challenging standing. Raymond Stauffer, a patent attorney, sued Brooks Brothers (and its corporate parent) for falsely marking some bow ties. The challenged bow ties contain an "Adjustolox" mechanism and are marked with U.S. Patent Nos. 2,083106 and 2,123,620.
U.S. Patent No. 2,083,106
U.S. Patent No. 2,123,620
Brooks Brothers argued that the plaintiff did not have standing to bring the claim because Stauffer's claim that Brooks Brothers' actions wrongfully quelled competition were too hypothetical to constitute an injury. The district court agreed because there had been no "injury-in-fact" to the United States. Thus, the district court dismissed the plaintiff's complaint. Stauffer appealed.


To establish standing:
a plaintiff must show (1) that he has suffered an “injury in fact,” an invasion of a legally protected interest that is “(a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical,” (2) that there is “a causal connection between the injury and the conduct com-plained of,” and (3) that the injury is likely to be redressed by a favorable decision.
And because the false marking statute is a qui tam action, a plaintiff need not concern himself with his own injury -- he has been partially assigned the United States's injury claim:
In other words, even though a relator may suffer no injury himself, a qui tam provision operates as a statutory assignment of the United States’ rights, and “the assignee of a claim has standing to assert the injury in fact suffered by the as-signor.” Vermont Agency, 529 U.S. at 773. Thus, in order to have standing, Stauffer must allege that the United States has suffered an injury in fact causally connected to Brooks Brothers’ conduct that is likely to be redressed by the court.
The Court went on to discuss the two different types of injuries the U.S. could suffer -- proprietary and sovereign. Proprietary injury is the money the U.S. is entitled to (half of the $500 fine). Sovereign injury is the violation of a U.S. statute (i.e. the U.S. is injured if people do not respect its laws). The Federal Circuit said it did not need to state which of these injuries satisfied the injury-in-fact requirement. Stauffer properly pleaded his standing, and it was error for the district court to dismiss his complaint.

Reversed (and remanded to address the merits of the case, including Brooks Brothers's motion to dismiss on the grounds that Stauffer didn't properly plead the required intent to deceive).

Wednesday, September 1, 2010

Is Marty McFly prior art?

Is this prior art?

Marty went to the future (namely, 2015). Nike must have realized 2015 was coming up, so they got around to actually inventing this technology, and they want to protect it. On May 2, 2008, Nike filed a patent application for an "Automatic Lacing System."  And the design looks familiar.

Examination of this application has not yet begun.  The first proposed claim reads:
An automatic lacing system for an article of footwear, comprising:
a sole including a cavity;
a motor disposed in the cavity; the motor including a driveshaft; the driveshaft including at least one gear;
at least one belt engaged with the at least one gear at an intermediate portion of the belt;
a yoke member connected to the at least one belt at an attachment portion of the at least one belt;
a plurality of straps attached to the yoke member, the plurality of straps being configured to adjust an upper of the article of footwear; and
wherein the straps can be automatically moved between a closed position and a loosened position by activating the motor. 
Nike has submitted a couple of Information Disclosure Statements to provide background information to the Examiner.  I did not see Back to the Future II as a listed reference.  But that's probably ok, because the video above is likely not enabling.  But I'm glad the self-tying shoe is finally here.  And I'm ready for my flying car.

Sunday, August 29, 2010

The Patent Battles Have Begun

2 recently filed, and large, patent cases have made the news lately.  NPR referred to one of them as the "a full employment act for patent attorneys."

Interval Licensing LLC v. AOL, Inc. et al, Case No. 2:10-cv-01385 (W.D. Wash)

Paul Allen (co-founder of Microsoft), sued 11 companies.  You know all of them:  Apple, AOL, eBay, Yahoo, Google, Netflix, Staples, YouTube, Facebook, Office Depot, and Officemax.  Allen's company is asserting 4 patents:
  • U.S. Patent No. 6,263,507: "Browser for use in navigating a body of information, with particular application to browsing information represented by audiovisual data"
  • U.S. Patent No. 6,034,652: "Attention manager for occupying the peripheral attention of a person in the vicinity of a display device"
  • U.S. Patent No. 6,788,314: "Attention manager for occupying the peripheral attention of a person in the vicinity of a display device"
  • U.S. Patent No. 6,757,682: "Alerting users to items of current interest"
You'll note 2 of the patents (the '652 and '314 patents) have the same title.  The '314 patent is a continuation of the '652 patent.

For those of you who don't deal with patents, the key information that will be debated is the scope of coverage of the claims of the patents.  And these 4 patents have a lot to fight about.  The '507 patent has 129 claims, the '652 patent has 18, the '314 patent has 15 and the '682 patent has 20.  That's 182 patent claims potentially at issue.  As a sampling, the 1st claim of the '507 patent provides:

A system for acquiring and reviewing a body of information, wherein the body of information includes a plurality of segments, each segment representing a defined set of information in the body of information, the system comprising:
means for acquiring data representing the body of information;
means for storing the acquired data;
first display means for generating a display of a first segment of the body of information from data that is 5 part of the stored data;
means for comparing data representing a segment of the body of information to data representing a different segment of the body of information to determine whether, according to one or more predetermined jrj criteria, the compared segments are related; and
second display means for generating a display of a portion of, or a representation of, a second segment of the body of information from data that is part of the stored data, wherein the second display means displays the portion 15 or representation of the second segment in response to the display by the first display means of a first segment to which the second segment is related.
Thus, there are at least 5 main limitations to this system claim.  And each of those 5 are likely written in means-plus-function form governed by 35 U.S.C. § 112, ¶ 6.  So Interval will have to show what function is performed by the limitation, and then explain what structural elements in the specification are there to perform that function.  And since this is a software issue, Interval will need to show that the specification adequately discloses enough of an algorithm for performing the limitation.

That's a lot of stuff to fight about.  This will certainly generate a lot of work for patent attorneys.

NPR questioned the timing of why Allen waited approximately 10 years to file this dispute.  No answer to that question.  Pure speculation, but I think that the Supreme Court's Bilksi decision could have been a small factor here, as had the Court tanked all software claims, this case wouldn't have begun.  This will certainly be an interesting one to watch.

Oracle America, Inc. v. Google, Inc. Case No. 4:10-cv-03561 (N.D. Cal.)

This is certainly a clash of the titans.  And Oracle isn't playing around.  Lead counsel is David Boies.  He's a serious trial attorney.  He represented Al Gore in Bush v. Gore.  He just scored a victory challenging California's prop 8.  Oracle is taking this seriously.  Oracle views Google's Android as a threat to Oracle's Java (which it acquired from Sun). It's asserting 7 patents:

  • U.S. Patent 6,125,447: "Protection domains to provide security in a computer system"
  • U.S. Patent 6,192,476: "Controlling access to a resource"
  • U.S. Patent 5,966,702: "Method and apparatus for preprocessing and packaging class files"
  • U.S. Patent 7,426,720: "System and method for dynamic preloading of classes through memory space cloning of a master runtime system process"
  • U.S. Reissue Patent 38,104: "Method and apparatus for resolving data references in generated code"
  • U.S. Patent 6,910,205: "Interpreting functions utilizing a hybrid of virtual and native machine instructions"
  • U.S. Patent 6,061,520: "Method and system for performing static initialization"
Oracle is also asserting copyright infringement for the code, documentation, specifications, libraries, and other materials that comprise the Java platform.  Oracle's allegation is that the Android operating system is built on top of Java, and is distributed with a Java Virtual Machine (the Dalvik VM).

Collectively, there are well over 100 claims potentially at issue.  This will be a big fight.  Stay tuned.

Monday, August 9, 2010

Everybody was IP fighting ...

Does Susan G. Komen, Race for the Cure own the phrase "for the cure" for all charities?  [ BlawgIT,  Wall Street Journal]

Is that olive oil as virgin as you think it is? [ Wall Street Journal, AP ]

Are politicians done using copyrighted songs without permission? [ BBCWall Street Journal ]

Friday, August 6, 2010

First comes marriage, then comes conception, next we're fighting about who owns patent rights.

As this is an intellectual property blog, your mind quickly and correctly thought of the act of conceiving an invention when you read the above title.  Good work.  This is a pretty exciting post for me to write.  My brother, Frederick Pollack, is a family law attorney here in Tampa.  I'm a patent attorney.  Our fields don't cross that much.  I've joked with him that they should.  Well, they did.  And you, lucky reader, get to learn how.

You'll recall that under the American patent system, you need to overcome two hurdles to "invent" something.  First, you must conceive it.  Then, you must reduce it to practice.  Conception is the formation in the mind of the inventor of a definite and permanent idea of the complete and operative invention.  Reduction to practice, as you might guess, is reducing that thing to practice.  You can do that in one of two ways: (1) actually do it; or (2) constructively do it.  You constructively reduce an invention to practice by filing a patent application which sufficiently describes your invention to enable one of skill in the art to practice it.  So what's this got to do with marriage?  Read on.

Some time before 1997, Mundi Fomukong and Fonda Whitfield were married in California.  In 1997 (the year I got married, btw), Fomukong conceived a way to use GPS and ground control stations to determine the location of someone, and disclose that location only to certain users.  On June 29, 1999, Fomukong (and his co-inventor) were awarded U.S. Patent 5,918,159 for this invention.  A few months earlier, he filed a continuation-in-part application.  In 2001, Fomukong and his wife Whitfield filed for divorce in California.

They did a "quickie divorce."  Under California law, this meant the couple must either have no community property, or have signed a property settlement agreement listing and dividing all of their community assets and liabilities.  Presumptively, everything you acquire during your marriage in California is community property.  Fomukong and Whitefield told the state of California that they had no community assets or liabilities.  In October, 2002, their divorce became final.  Several months later, Fomukong's second patent application (the continuation-in-part application) issued as U.S. 6,560,461.  He then formed a company (Enovsys) and assigned the patents (and the right to sue for past infringement) to the company.  Enovsys then sued Sprint Nextel for infringing the patents.

I will ignore the infringement issues in this decision, and instead just focus on the standing issue.  Sprint Nextel sought to dismiss the complaint, arguing that Enovsys did not have standing to sue for patent infringement.  The Court explained standing:
A party’s standing to sue for patent infringement derives from the Patent Act, which provides that “[a] patentee shall have remedy by civil action for infringement of his patent.” 35 U.S.C. § 281 (emphasis added). “Patentee” includes not only the party to whom the patent was issued, but also the successors in title to that party. 35 U.S.C. § 100. When a patent is co-owned, a joint owner must join all other co-owners to establish standing.
So, did Enovsys have to join Whitfield (Fumoko's ex-wife) as a plaintiff?  Sprint's argument: Fumoko filed both patent applications while he was married.  Presumptively, all assets acquired during marriage are community property.  This ownership survived the divorce, and thus Whitfield was an owner of the patents and needed to be joined in the litigation.  Enovsys's response: the divorce judgment constituted a final determination by the state of California -- Fumoko and his wife didn't own anything as community property anymore.

The Court went on to address California state law on this issue, and held that Enovsys was right.  Fumoko and his wife stated at the time of their divorce that they didn't own any community property.  So that's how it ends up.
Pursuant to the California divorce decree, Whitfield retained no property rights in the patents, so Enovsys had standing to bring and maintain this suit.