Patent Litigation
for Business People
Presented by
William “Skip” Fisher
Christopher J. Lewis
Johnathan E. Mansfield
Schwabe, Williamson & Wyatt
Pacwest Center
1211 SW 5th Avenue
Portland, OR 97204
www.schwabe.com
September 28, 2006
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© 2006 Schwabe, Williamson & Wyatt
Washington, DC
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Intellectual Property
Schwabe, Williamson & Wyatt has one of the largest intellectual property practices in the Pacific
Northwest. The firm has a long history of assisting large corporations, small and medium-sized
businesses, and individuals in securing, protecting, and exploiting their intellectual property
rights, both in the U.S. and in other countries. Our intellectual property and patent attorneys –
many of whom have years of science and technical education and experience – provide a full
range of services in patent, trade secret, trademark, and copyright matters, including counseling,
prosecution, litigation, dispute resolution, licensing, and technology transfer. We are one of only a
few firms in the region that offers both patent prosecution and patent litigation services.
Our lawyers are intellectual property strategists and fully appreciate that intellectual property is
often a crucial business asset. We serve in the role of trusted advisor to our clients, from the
early planning stages, through development and commercialization, to licensing and sale. We are
capable of handling virtually any intellectual property matter that arises in our clients’ business,
including enforcing their intellectual property rights through litigation or defending them against
infringement claims.
Schwabe, Williamson & Wyatt’s Intellectual Property Practice Group serves clients in a wide
range of industries, including information, mobile telephony, electronics, software,
telecommunications, e-commerce, semiconductor, biotechnology, medical devices, media and
entertainment, and consumer products.
Schwabe, Williamson & Wyatt’s intellectual property services include: Litigation, Patents,
Trademarks and Copyrights and Trade Secrets and Unfair Competition.
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© 2006 Schwabe, Williamson & Wyatt
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William "Skip" Fisher
Shareholder, Seattle Office
Bill "Skip" Fisher is a member of Schwabe, Williamson & Wyatt's rapidly
expanding intellectual property (IP) practice group. Mr. Fisher’s practice
focuses on IP counseling and dispute resolution in all areas of IP, including
patents, trade secrets, trademarks, copyright, and unfair competition. He has
handled high-stakes IP and commercial cases for clients large and small in
diverse industries, including complex patent matters involving various
hardware, software, and mechanical technologies. Mr. Fisher has a unique
focus on China and China IP law, is a frequent speaker on the topic, and is
one of the few U.S. lawyers who has spent time in China practicing in this
area (e.g., managing the litigation and administrative enforcement of IP
rights). He regularly counsels clients on a variety of domestic and
international IP matters, including their rights and obligations under U.S. and
China IP laws, the procurement of IP rights at home and abroad, IP
enforcement and dispute resolution, licensing and technology transfer, and
strategic IP risk management. He is proficient in Mandarin Chinese.
Prior to joining Schwabe, Mr. Fisher was with the international law firm Lovells
in its Shanghai, China office and with Perkins Coie in Seattle, Washington.
He was selected as a “Rising Star of Washington Law” by Washington Law &
Politics for three consecutive years beginning in 2001.
You may contact Mr. Fisher at 206-407-1517, or wfisher@schwabe.com
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© 2006 Schwabe, Williamson & Wyatt
Washington, DC
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Christopher J. Lewis
Shareholder, Portland Office
Mr. Lewis’ practice focus is primarily in three areas:
1) patent prosecution, with experience in chemical, mechanical
and electrical based patents; 2) intellectual property litigation,
with an emphasis on patent litigation; and 3) assisting clients
with patent portfolio strategy and management. Prior to joining
the firm, Mr. Lewis worked in Intel Corporation's Corporate
Licensing Group, where he assisted in value licensing and
patent portfolio management. Mr. Lewis was also a law clerk for
the Oregon Department of Justice, Civil Recovery Division in
Portland, Oregon, and for the Honorable James R. Michaud,
Bonner County District Court, Sandpoint, Idaho. In law school,
Mr. Lewis served as the Current Materials Editor for the
nationally published journal, Environmental Law.
You may contact Mr. Lewis at 503-796-2456, or clewis@schwabe.com
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© 2006 Schwabe, Williamson & Wyatt
Washington, DC
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Johnathan E. Mansfield
Shareholder, Portland/Seattle Office
Mr. Mansfield is a shareholder in the firm’s Intellectual Property and Patent
Law practice group, focusing on intellectual property litigation and business,
including patent, trade secret, trademark, copyright, and other intellectual
property cases. He advises trade associations in technology industries as well
as in other business sectors, on issues including formation, governance, and
antitrust. Mr. Mansfield also advises companies on food and drug matters,
including food and dietary supplement labeling.
Mr. Mansfield has had extensive litigation experience involving a variety of
hardware and software technologies, and has litigated in numerous federal
and state courts, at both the trial and appellate level. He is known for his
advocacy skills, in particular, his ability to help judges and juries understand
complex technical issues.
Before joining Schwabe, Mr. Mansfield practiced intellectual property litigation
with Morrison & Foerster in San Francisco. After graduation from Cornell Law
School, Mr. Mansfield clerked for the Honorable Conrad K. Cyr, United States
Court of Appeals for the First Circuit, in Maine. While at Cornell, he served as
the Articles Editor for the Cornell Law Review.
You may contact Mr. Mansfield at 503-796-2088, or jmansfield@schwabe.com
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© 2006 Schwabe, Williamson & Wyatt
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Patent Litigation Seminar
for Business People
September 28, 2006
Portland, OR
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© 2006 Schwabe, Williamson & Wyatt
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Program Overview
• Patent litigation overview
• Preemptive strategies and alternatives
to litigation
• Demand letters and opinions of counsel
• Patent litigation costs and budgeting
• International aspects of patent litigation
• Current trends and patent reform
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Patent Litigation Overview
Christopher J. Lewis
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Patent Basics
• Patent Types
– Utility: new, useful and non-obvious
– Design: ornamental features
• Parts
– Written Description
– Claims – deed to property rights
• Right to exclude others
– Making, using, selling/offering to sell, or
importing
– Patentee does not need to sell
• Term
– 20 years from the date of filing
– >6/8/95 – option of 17 years from the
date of issue
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Patent Litigation Statistics
•
•
•
•
•
•
< 1% of issued patents get litigated
~7% go to Trial
~17% resolved by the court prior to trial
~76% settle prior to trial
~1.8 year average case pendency
~40 - 50% reversal rate of trial court’s claim
construction
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Potential Parties
• Plaintiffs
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–
–
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Patentee
Assignee
Exclusive licensee – substantially all rights
Potential infringer (Declaratory Judgment action)
• Defendants
– Anyone who makes, uses, offers and/or sells or
imports a patented invention without permission
– Anyone who actively induces or contributes to
direct infringement
– Patentee/assignee
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Pre-litigation Considerations
• General Requirements
– Valid patent
– Infringement or threat/apprehension of suit
– Rule 11 – good faith belief
• Constitutional Requirements
– Subject matter jurisdiction – exclusive federal
jurisdiction for patent infringement suits
– Personal jurisdiction – minimum contacts
– Venue – convenient forum
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Pre-litigation (cont.)
• Recommendations
– Know the opponent
• Who to sue – customer, small infringer, large infringer?
• Patent portfolio – don’t kick a hive of sleeping bees!
• Litigation prowess – active litigants?
– Know yourself
• Patent strengths and weaknesses
• Litigation stamina
• ROI
• Selecting where to file the complaint
– Home turf
– Fast forum
– Plaintiff friendly
• Demand letters  to send or not to send?
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The Complaint
• Identify the parties
• Jurisdictional statement
– Subject matter jurisdiction, Personal jurisdiction,
Venue
• Statement of the claim
–
–
–
–
Identify the relevant patent(s)
Assert ownership of the patent(s) & right to sue
Identify the accused infringer & alleged infringing act
Assert other claims
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The Complaint (cont.)
• Demand for judgment
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–
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Monetary damages
Injunctive relief
Increased damages
Attorneys’ fees
• Demand for jury
– Usually better for plaintiffs (about 70% jury trials)
– Waived if not demanded w/in 10 days of the last
pleading
– Declaratory judgment – no right to a jury
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Responding to the Complaint
• Motions – dismiss, transfer venue
• Answer – admit or deny allegations
– Within 20 days of service
– Within 60 days of a request for waiver of service
• Affirmative defenses
– Non infringement, invalidity, laches, estoppel,
intervening rights, failure to state a claim, etc.
• Counterclaims
– Declaratory judgment of invalidity/noninfringement, antitrust violations
– Assert other patents
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Preliminary Injunction
• Patent holder must prove:
–
–
–
–
Likelihood of success (infringement and validity)
Irreparable harm (may be presumed)
Balance of hardships in favor of enjoining activity
Favorable impact on public interest
• Requires a bond - $$ consideration
• Early claim construction, validity &
infringement analysis (good and bad)
• Motivates early settlement if granted
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Discovery
• Informal discovery
– Interviews
– Internet
– Voluntary exchange
• Formal discovery
– Interrogatories – clarify issues, identify witnesses,
uncover opponent’s case
– Document requests – include other tangible
material
– Requests for admission – limit issues for trial,
authenticate documents
– Depositions – individual or corporation
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Discovery Issues
• Accounts for a large percentage of the
litigation costs
• Often leads to protracted litigation
– Increases costs
– Sets negative tone with the court
• Electronic discovery
– No hard drive will go unturned
• Third party discovery
• Privileged and confidential Information
• Protective orders – attempt to limit discovery
and maintain confidentiality
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Claim Construction (Markman) Hearing
• Judge interprets claim terms as a matter of law
– Focus on intrinsic evidence
• Claim language, patent specification and prosecution
history
– Extrinsic evidence may be considered
• Dictionaries, expert testimony, treatises
• Used to inform, but cannot contradict the intrinsic evidence
• First major milestone in a case
– Often dispositive of the infringement and/or
invalidity issues
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Motions for Summary Judgment
• Often follows the Markman decision
• Grounds
– Infringement/non-infringement
• Literal
• Doctrine of Equivalents (insubstantial differences)
• Direct and indirect (inducement and contributory)
– Invalidity
• High burden  clear and convincing evidence
• Not novel (102), obvious (103), inadequate disclosure (112)
– Unenforceability
•
•
•
•
Inequitable conduct – failure to disclose material information
Patent misuse – using the patent for improper purposes
Laches – unreasonable delay + prejudice
Equitable estoppel – misleading conduct + reliance + prejudice
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Trial and Beyond
• Determination of liability & damages
– Jury determines infringement based on the claim
construction provided by the court
• Pretrial conference – issues for trial,
witnesses, exhibits
• Special verdicts & jury instructions
• Post-trial motions
• Appeals
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Avoiding Litigation and
Alternatives to Litigation
Christopher J. Lewis
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© 2006 Schwabe, Williamson & Wyatt
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Avoiding Litigation
• Patent portfolio strategy/management
– Strategic Patenting
• Core business/products
• Areas vital to competitors
– Quality vs. quantity
• Licensing
– Cross license (win-win?)
– Royalty bearing license
• Design around the patented product
– Consult your attorney
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Alternatives to Litigation
• Alternative Dispute Resolution (ADR)
– Mediation
• Non-binding
• Neutral 3rd party tries to facilitate settlement
– Arbitration
•
•
•
•
Binding, unless otherwise specified
Like a trial, but no jury
Faster cheaper and more flexible than litigation
Reviewable by the District Court
– Great deference given to the arbitrator
– Very hard to vacate or modify the award
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Alternatives to Litigation (cont.)
• Reexamination
– Must show a substantial new question of
patentability exists
– Two Types
• Inter-Parte
– Allows Requester participation
– Decision by PTO is binding on the parties in litigation
• Ex-Parte
– No participation, but anonymous
– No estoppel
– Pending Litigation will be stayed if requested
earlier on in the case
• ITC § 337 Proceedings
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Demand Letters and
Opinion Letters
Johnathan E. Mansfield
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Demand/Cease & Desist/Notice Letters
• Patent Owner π
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• Accused infringer Δ
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First Things First
•
•
•
•
Clarify goals
Get your people on board
Be sure...
ROI
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Reasons to Send Demand Letter
• “Stop infringing”
• “You might want to take a license”
• Actual notice per 35 U.S.C. 287
(damages)
• Start the willfulness clock running
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Results of Demand Letter
• Nothing happens
• Negotiation and requests for showing of
basis for infringement
• Accused infringer stops infringing
• Accused infringer negotiates a license
• Lawsuit(s) ensue
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The Hardball Demand Letter
• Upside
– Starts all clocks running
• Willfulness, damages
– Possible In terrorem effect (with newbies)
– You will get a reaction
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The Hardball Demand Letter
• Downside
– Sets the tone for future relationship
– Evidence in lawsuit
– Most important: United States Code Title
28, section 2201
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What is a Declaratory Judgment?
28 USC §§ 2201-02
• Lawsuit filed by Δ
– Non-infringement
– Invalidity
– Unenforceability
• Actual controversy
– “Reasonable apprehension” of imminent
lawsuit
– Actual infringement or preparation
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You Don’t Want a DJ Lawsuit
• Infringer gets to choose the court
• Roles reversed: Δ v. π
• May have precedence over your own
lawsuit
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When To Use The Hard Ball Letter
Never (hardly ever)
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A kinder, gentler demand letter
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The Softball Letter
• “We have patents”
• “Your product/process seems similar”
• “Let’s talk about a license”
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The Softball Letter
• Upside
– No DJ jurisdiction
– Notice
• Downside
– May not get (quick) results
– May send wrong message
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When to Use the Softball Letter
• Testing the waters/getting information
• Put on notice/start clocks running
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The Medium-speed Pitch
•
•
•
•
Softball with teeth
Claim charts
Specific deadlines
Don’t trigger DJ
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The Medium-speed Pitch
• Upside
– Can get good results
– More control
• Downside
– Divulges infringement theory
– Labor-intensive
– Evidence in case
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When to Use the Medium-speed Pitch
• Well-developed infringement position
• Only want a license
• Large scale-licensing campaign
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A View From the ’s Side
Receiving a Demand Letter
•
•
•
•
•
How serious is this?
Do we infringe?
Respond if appropriate
Protect yourself
ROI
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A Digression on Willful Infringement
• Willful = aware of patent, and had no
“reasonable basis” for concluding that
patent was not infringed or was invalid
• Consequences
– Up to treble damages
– Other side’s attorney’s fees
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Set Up A Process
• Anything that makes a claim about
someone else’s IP rights is serious
enough to be read
• By a designated person
• Determine seriousness
• Take appropriate action
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How Serious is This?
• Factors
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–
–
–
–
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Specific deadlines/demands
What kind of letter, e.g., hardball, slow pitch?
Form letters
Who signed it/sent it?
Is your specific product identified?
Is a specific patent identified?
• Options
– File
– Respond & file
– Send to patent litigation counsel
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Do We Infringe?
• Patent Miranda Warning: you are
creating evidence that will show up
in court
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Infringement Investigation
• You need to know:
– Likelihood of liability
– Extent of liability, i.e., mount of damages or
cost of injunction
– Product of these will determine how you
handle demand letter
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Protect Yourself
Stop the Willfulness Clock
• Reasonable investigation
• Reasonable basis to believe
– No infringement
– Patent not valid
• Opinion letter
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Opinion Letters
• Purpose: Establish good faith basis for
continuing accused activity
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Do We Need An Opinion Letter?
• Not required: Knorr-Bremse
• But don’t leave home (for the
courthouse) without one
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A Good Opinion Letter
•
•
•
•
Timely
Independent
Credible
Read and understood
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How comprehensive?
•
ROI
– Cost: $3K to $100K; avg. in OR, about
$10K
– Extent of analysis depends on risk
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Patent Litigation Costs and
Budgeting
Christopher J. Lewis
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Patent Litigation Costs
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Patent Litigation Costs (cont.)
• Factors Affecting Costs
– PTO routinely issues patents without knowing
and/or understanding the most relevant prior art
• Requires significant effort and cost to locate prior art
• Can arise late in the suit dramatically changing the playing field
• May spawn Reexamination
– Protracted discovery disputes
– Markman proceedings
• Much legal wrangling over the meaning of simple terms
• Worth the effort, as it can end the dispute….at least until appeal
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Patent Litigation Costs (cont.)
– Expert analysis, reports, and testimony
• Significant portion of overall costs
• Expert areas
–
–
–
–
Claim construction
Infringement
Invalidity
Damages
– Discovery
• Can account for nearly 1/3 to ½ of the overall costs
• Broad net is cast due to uncertainties
• Many defenses available, which requires thorough
investigation
• Fertile area for protracted litigation
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© 2006 Schwabe, Williamson & Wyatt
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Patent Litigation Costs (cont.)
• Parties’ emotions
• Judge and jury do not have a clue
– Even with simple technology
– Requires education, good experts, and
demonstrative exhibits
– Requires adaptation if you get a bad
decision on claim construction
– May use mock trials to identify issues and
focus the presentation
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© 2006 Schwabe, Williamson & Wyatt
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Patent Litigation Budgeting:
An Oxymoron?
• NO
• Steps that can help contain costs and stay on
budget
– Thoroughly investigate the potential defenses prior
to making the first claim
– Investigate the opponent’s patent portfolio,
otherwise you may be in multiple suits
– Understand the real economics of the accused
product to help substantiate a budget
– Avoid the shotgun approach to claims and
defenses, use a rifle.
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© 2006 Schwabe, Williamson & Wyatt
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Containing Costs (cont.)
– Consider adopting a focused dispute resolution
plan that could limit the issues.
– Evaluate reexamination potential
– Be open to taking/giving a license… even if you
are right.
• May be better to have a say who is in the market
• May be cheaper than litigation in the long run
–
–
–
–
Use in-house experts and resources
Consider designing around the product
Work closely with the attorneys
Establish a budget for discrete litigation tasks
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Salem, OR
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Vancouver, WA |
© 2006 Schwabe, Williamson & Wyatt
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International Aspects Of
Patent Litigation
William “Skip” Fisher
Portland, OR
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© 2006 Schwabe, Williamson & Wyatt
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Why Is This Subject Important?
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© 2006 Schwabe, Williamson & Wyatt
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Why Is This Subject Important?
• Patent enforcement at home
• Patent enforcement abroad
• Patent infringement at home or abroad
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Salem, OR
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Vancouver, WA |
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What Should You Do?
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© 2006 Schwabe, Williamson & Wyatt
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What Should You Do?
• Think globally & long term
• Consider patent/IP & business strategies
together
• Obtain like-minded patent counsel
• Build appropriate patent portfolio
• Be prepared to enforce/defend
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© 2006 Schwabe, Williamson & Wyatt
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What Will I Cover?
•
•
•
•
•
U.S. patent enforcement options
Special issues in cross-border litigation
ITC § 337 litigation
Foreign patent enforcement options
Enforcement of foreign patents in U.S.
Portland, OR
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Bend, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA |
© 2006 Schwabe, Williamson & Wyatt
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U.S. Patent Enforcement Options
•
•
•
•
Federal district court litigation
ITC § 337 actions
Customs enforcement
Arbitration & mediation
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Bend, OR
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Salem, OR
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Vancouver, WA |
© 2006 Schwabe, Williamson & Wyatt
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Issues in Cross-Border Litigation
•
•
•
•
Unfamiliarity with foreign adversary
Jurisdiction over foreign defendant
Service on foreign defendant
Discovery from foreign party or nonparty
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© 2006 Schwabe, Williamson & Wyatt
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Discovery in Cross-Border Litigation
• Tools:
– Federal Rules of Civil Procedure
– Hague Convention (Evidence)
– National laws
•
•
•
•
“Blocking” statutes
Confidential information & protective orders
Use of discovery from other jurisdictions
Translation/interpretation issues
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© 2006 Schwabe, Williamson & Wyatt
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ITC § 337 Litigation – Scope
• Under § 337 of U.S. Tariff Act, imported
products that violate U.S. IP rights may
be barred from entry
• § 337 provides administrative trade
remedy for protecting domestic industry
• Often brought as alternative to or in
parallel with court litigation
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© 2006 Schwabe, Williamson & Wyatt
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§ 337 Litigation - Elements
• Infringement of valid U.S. patent
• Importation in U.S.
• Domestic industry – patent must be
exploited in U.S.
– significant investment in plant/equipment
– significant employment of labor or capital
– substantial investment in exploitation
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© 2006 Schwabe, Williamson & Wyatt
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§ 337 Litigation - Jurisdiction
• § 337 gives ITC in rem jurisdiction
• Thus, no issues concerning personal
jurisdiction or service of process
• If respondent declines to participate,
ITC can still issue exclusion order
against products
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© 2006 Schwabe, Williamson & Wyatt
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§ 337 Litigation –
Pre-filing Preparation
• Pre-filing efforts
– investigation of respondents
– evidence of importation
– establish domestic industry
– infringement analysis (claim charts)
• Meet with OUII
• Requires detailed complaint – no notice
pleading
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Salem, OR
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© 2006 Schwabe, Williamson & Wyatt
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§
337
Litigation
–
Timeline
Complaint Filed
ITC Decision/Order
Investigation Begins
ALJ Decision
Hearing
Presidential Review
-1
0
Portland, OR
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7-9
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Salem, OR
10-13
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Seattle, WA |
12-15
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Washington, DC
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§ 337 Litigation - Procedure
• File complaint at ITC
• ITC must initiate investigation within 30 days
(public notice, service by mail)
• Respondent must answer w/in 20-30 days
• Discovery is compressed (approx. 6 mos)
• Bench trial in front of ALJ (approx. 7-9 mos)
• Initial determination by ALJ
• ITC decision by Commissioners
• Presidential review
• Appeal to CAFC
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§ 337 Litigation - Remedies
• Limited Exclusion Orders – prohibit
entry of respondent’s infringing products
• General Exclusion Orders – prohibit
entry of all infringing products,
regardless of source
• Cease & Desist Orders – directed to
infringing behavior in U.S.
• No damages
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© 2006 Schwabe, Williamson & Wyatt
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§ 337 Litigation - Comparison
•
•
•
•
•
•
•
•
•
ITC Litigation
Washington DC
In Rem Jurisdiction
No jury
Specialized ALJ
Markman Optional
9-10 Months To Trial
No Damages
Expenses incurred
over short period
60% cases settle
Portland, OR
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Bend, OR
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Salem, OR
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•
•
•
•
•
•
•
•
•
Seattle, WA |
Court Litigation
Any District
Personal Jurisdiction
Jury
Generalist judge
Markman Typical
21 Months To Trial
Damages
Expenses more easily
controlled
95% cases settle
Vancouver, WA |
© 2006 Schwabe, Williamson & Wyatt
Washington, DC
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Enforcing Patent Rights in China
• Administrative actions
• Civil actions
• Customs seizures
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Administrative Enforcement
•
•
•
•
•
•
•
•
•
Prepare administrative enforcement body
Appoint Chinese agent
Prove patent rights & infringement
Submit petition
Take raid action
Confirm products infringe
Obtain decision & penalties
Take court action
Follow up
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Problems with Administrative Action
•
•
•
•
•
•
•
•
Local protectionism
Weak knowledge of patent law
Lack of resources
Apathy
Lack of follow up
Inability to deal with complex cases/tech
No damages
Appeal
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Salem, OR
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Seattle, WA |
Vancouver, WA |
© 2006 Schwabe, Williamson & Wyatt
Washington, DC
Civil Enforcement
• Pre-litigation preparation & evidence
gathering
• Deciding who to sue
• Deciding where to sue
• Pre-trial injunction and/or preservation of
evidence order
• Filing complaint & other documents
• Defense
• Investigation & exchange of evidence
• Trial, judgment, appeal
Portland, OR
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Bend, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA |
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Pros and Cons of Court Actions
•
•
•
•
•
•
•
Less local protectionism
More chance to present case
Foreign companies do win
Takes more time and expense
Admissible evidence hard to obtain
No raid action
Damages
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Salem, OR
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Vancouver, WA |
© 2006 Schwabe, Williamson & Wyatt
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Current Trends and
Patent Reform
Johnathan E. Mansfield
Portland, OR
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Salem, OR
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Vancouver, WA |
© 2006 Schwabe, Williamson & Wyatt
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Overview
• Nanotechnology patents
• PLECs, a.k.a. trolls
• Important recent Supreme Court cases
– Ebay v. MercExchange (injunctions)
– KSR v. Teleflex (obviousness)
• Proposed legislative reforms
Portland, OR
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Vancouver, WA |
© 2006 Schwabe, Williamson & Wyatt
Washington, DC
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Nanotechnology
The Next Big Small Thing
• Research and technology development at the
atomic, molecular or macromolecular levels,
in the length scale of approximately 1 - 100
nanometer range
• Creating and using structures, devices and
systems that have novel properties and
functions because of their small and/or
intermediate size
• Ability to control or manipulate on the atomic
scale
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© 2006 Schwabe, Williamson & Wyatt
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The Nano-patent Thicket?
• > 3000 U.S. patents and published
applications have claims that mention
“nanotubes.”
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© 2006 Schwabe, Williamson & Wyatt
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Can the PTO Keep Up With
Nano?
• As is often true with early stage
technology, some nanotechnology
patents have broadly drafted claims that
could read on basic compositions of
matter or manufacturing or testing
processes.
• No real “nano patent cases” yet.
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© 2006 Schwabe, Williamson & Wyatt
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Nano patents: PTO Response
• Classification 977 - New classification for
nanotechnology patents
– 1) subject matter is in the scale of approximately
1-100 nanometers in at least one dimension; and
– 2) that involve materials, structures, devices or
systems that have novel properties and functions
because of their nanoscale size.
• But: no definitive plans to form a nano art
unit.
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Patent Licensing & Enforcement
Companies: PLECs
Is a troll the scary thing under the bridge
or a fishing technique?
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Vancouver, WA |
© 2006 Schwabe, Williamson & Wyatt
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One Definition of a PLEC
• Has no significant assets except patents
• Produces no products
• Acquires patents, but does not invent
technology itself
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Salem, OR
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Vancouver, WA |
© 2006 Schwabe, Williamson & Wyatt
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Customer Suit Strategy
• Sue customers for using or selling
accused product
• Refuse to join or threaten maker of
accused product
– No DJ available
• Maker is “in the suit” as indemnitor, but
not as a party
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© 2006 Schwabe, Williamson & Wyatt
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Ebay v. MercExchange-a Response
to PLECs?
• Should an injunction be automatic once
infringement is found at trial?
• SCOTUS overturned automatic injunction
rule. Now successful π must show:
– π has suffered an irreparable injury;
– a royalty won’t compensate π;
– balance of hardships tips in π’s favor rather than
the infringer’s; and
– public interest supports an injunction.
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© 2006 Schwabe, Williamson & Wyatt
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Ebay v. MercExchange:
2 concurrences
• CJ Roberts +2: ‘Injunctions still the usual case’
– Reasoning of a long line of cases in which injunctions have
been granted should carry great weight in deciding whether
to grant one in any particular case.
• Kennedy +3: ‘Patent system has changed’
– Recent development of firms who use patents primarily to
obtain royalties, rather than as a basis for making or selling
products.
– When patented invention is only small part of the infringing
product, a royalty may be adequate and an injunction might
not serve the public interest.
– Some recent patents, including on “business methods,” are
“potentially vague” and of “suspect validity,” which could
affect whether an injunction should be granted.
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© 2006 Schwabe, Williamson & Wyatt
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On SCOTUS Docket for Next Term:
KSR v. Teleflex
• Obviousness: primary way to show a
patent is invalid
• Non-obviousness requirement is guard
against merely minor improvements
over the prior art
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What is “Obvious” Anyway?
• 35 U.S.C. § 103(a): an invention may not be
patented if it would have been “obvious at the time
the invention was made to a person having ordinary
skill in the art” of the field of the intention.
• Federal Circuit test: when various pieces of prior art
each contain elements of an invention, the prior art
can be combined together to invalidate a patent on
the invention only when there is some motivation,
suggestion, or teaching to combine the prior art.
• Criticism is that FC test is too strict, permitting even
trivial improvements to be patented
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Predictions….
• Likely: SCOTUS will kiss off FC again
• Who knows?
– a combination which only unites old
elements with no change in their respective
functions is precluded from patentability
under 103(a)?
– subjective ad hoc test?
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© 2006 Schwabe, Williamson & Wyatt
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Proposed Legislative Reform
• Patent system is perennial topic for reform
• Most recent efforts:
–
–
–
–
Patent Reform Act of 2005, H.R. 2795 (6/05)
Industry Coalition Redline of H.R. 2795 (9/05)
Issa Litigation Pilot project, H.R. 5418 (6/06)
Hatch/Leahy Bill, S. 3818 (8/06)
• Nothing is expected to pass in 2006
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First to File
• Changes US to “first-inventor to file”
system
• S.3818 § 3
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Definition of “Prior Art”
• Modifies definition to accommodate
first-to-file
• Establishes “reasonable and effective
accessibility” requirement
• S. 3818 § 3
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Inequitable Conduct Standard
• Adopts failure to disclose material/intent to
mislead standard
• Can only be pled after determination that
patent is not invalid as whole and is infringed
• No unenforceability if patentee:
– Had informed good faith belief that information not
material or otherwise established good faith, or
– Relied on counsel, had no actual or constructive
knowledge of misconduct, & exercised due care in
selecting/supervising counsel
• S. 3818 § 5
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3rd Party Submissions During
Application Process
• 3rd parties may submit prior art for any
pending application within 6 months
after publication
• Showing of relevancy, fee
• H.R. 2795; S. 3818 § 7
Portland, OR
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Salem, OR
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Vancouver, WA |
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Claim Construction Interlocutory
Appeal
• Right to interlocutory appeal on claim
construction within 10 days after order
is entered.
• D.Ct. proceedings stayed during appeal
• S. 3818, § 8
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Issa Pilot Project in D. Cts.
• AOUSC designates at least 5 DCs in at least
3 different circuits out of top 15 patent-caseloaded DCs
• Judges chose whether to opt into hearing
patent cases. Random assignment but judge
can send to opt-in pool
• $5MM/year for judicial training, and to
compensate law clerks with technical/patent
expertise
Portland, OR
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Bend, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA |
© 2006 Schwabe, Williamson & Wyatt
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Patent Litigation Seminar
for Business People
Portland, OR
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Bend, OR
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Salem, OR
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Vancouver, WA |
© 2006 Schwabe, Williamson & Wyatt
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