Is Software Patentable? Fed Circuit Isn’t Sure—CLS Bank v. Alice Corp.

Posted on May 21, 2013 by | Leave a comment

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C. ()

Alice Tea PartyEarlier this month, the Federal Circuit issued its long-awaited en banc opinion on the patentability of software in CLS Bank International v. Alice Corporation Pty. Ltd., No. 2011-1301. In an ironic twist, the result is something more akin to Alice in Wonderland than the clear guidance patent practitioners were hoping for. The Federal Circuit issued a 135-page decision comprised of separate written opinions by Judges Lourie, Rader, Moore, Newman, and Linn, as well as an “Additional Reflection” by Chief Judge Rader, none of which commanded a majority. The end result was a one-paragraph per curiam opinion in which a majority of the Court determined that the particular method  and computer-readable media claims were not directed to patent eligible subject matter (for different reasons) and an equally-divided Court affirmed by default the District Court’s holding that the system claims were not patent eligible.

The Claims at Issue

Alice Corp. owned four patents relating to a computerized trading platform used for conducting financial transactions in which a third party acts as an intermediary to assure the first and second parties that they will both perform. If one of the parties cannot perform, the transaction is not completed and neither side risks non-performance of the other.

The patents contained method, computer-readable media, and system claims, all of which involved software aspects.

Judge Lourie’s Opinion

Judge Lourie, joined by Judges Dyk, Prost, Reyna, and Wallach, would have held that all of the claims were not directed to patent-eligible subject matter under 35 U.S.C. § 101.

The statute contains four eligible classes of inventions:

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

35 U.S.C. § 101. He noted that the statute is to be interpreted broadly, but is also limited by three judicially-created exceptions that are not patent eligible: laws of nature, natural phenomena, and abstract ideas.

In determining whether something is patent eligible, Judge Lourie set forth a two-step process: (1) is the claimed invention a process, machine, manufacture, or composition of matter, and, if so, (2) does it fall within one of the three judicially-created exceptions? He acknowledged that this determination is easier said than done.

To determine whether it falls within any of the exceptions, courts are to answer two more questions: (1) does the claim pose any risk of preempting an abstract idea, and, if so, (2) are there substantive limitations that narrow, confine, or otherwise tie down the claim so that it does not preempt the full abstract idea?

Turning to the claims at issue, Judge Lourie broke them down into the “gist” of the invention and what, at heart, it was trying to claim. He concluded that all of the claims were attempting to claim the abstract idea of facilitating a trade through a third-party intermediary. In his opinion, none of the additional claim language provided any meaningful limitation on the claims.

Chief Judge Rader’s OPinion

Chief Judge Rader, joined in full by Judge Moore and in part by Judges Linn and O’Malley, would have held that the system claims are patent eligible, but the method and media claims are not (Judges Linn and O’Malley would have held that all the claims are patent eligible).

Chief Judge Rader focused on the judicially-created exceptions to § 101. Courts must determine whether a claim includes meaningful limitations that restrict the claim to an application, rather than claiming an abstract idea.  Claims are not meaningfully limited where it describes an abstract idea and simply adds “apply it” or if its purported limitations cover all possible ways to achieve the result.

A claim is meaningfully limited if it requires a particular machine to implement it or a particular transformation or where it adds limitations that are essential to the invention. “At bottom, where the claim is tied to a computer in such a way that the computer plays a meaningful role in the performance of the claimed invention, and the claim does not pre-empt virtually all uses of an underlying abstract idea, the claim is patent eligible.”

Chief Judge Rader cautioned that the patent-eligibility inquiry is different and distinct from other statutory requirements, such as non-obviousness, novelty, and enablement. Whether something is obvious is irrelevant to whether it is directed to patent-eligible subject matter. He also confirmed that the standard for proving a violation of § 101 is by clear and convincing evidence.

Taking this all together, he found that the system claims were directed to patent eligible subject matter—the claims recited a machine that performed specific transactions that was not a disembodied concept. However, the method and media claims he found to claim only an abstract concept.

Judge Moore’s Opinion

Judge Moore, joined by Judges Rader, Linn, and O’Malley, wrote to express her concern that Judge Lourie’s view would signal the end of all software patents as we know them. She believed that the five judges ignored precedent and have left the Court “irreconcilably fractured.”  She called for the Supreme Court to step in and resolve the issue.

She would have held that the system claims are directed to patent-eligible subject matter, as they include limitations relating to hardware and software, and were not limited to abstract ideas.

Judge Newman’s Opinion

Judge Newman, writing for herself, believed that the Court was overanalyzing the requirements of § 101. She stated that the inquiry should be simple and straightforward—does the invention fall within one of the four types of inventions allowed? If so, the patent-eligibility analysis ends and the other requirements for patentability kick in to determine whether a patent should be granted.

She also wrote to explicitly confirm that study and experimental use is not patent infringement. She was concerned that too many commentators were wrongly stating that patents would prevent individuals from conducting research or evaluating patented inventions.

Experimental use—such as experiments to (1) improve or build on patented subject matter, (2) compare patented subject matter with alternatives, (3) understand its mechanism, and (4) find new applications or modifications—is not infringement, regardless of whether it is for scientific knowledge or commercial potential.

Judge Linn’s Opinion

Judge Linn, joined by Judge O’Malley, would have found all of the claims to be directed to patent-eligible subject matter.

First Judge Linn was concerned that no claim construction was ever done in this case. The parties did agree that all of the claims required a computer to implement them. Having created this explicit tie to a machine, the claims were not directed to an abstract idea. He had grave concerns that the Court was rewriting the claims and ignoring limitations in order to distill down some essence of the claim, which he believed was improper.

Chief Judge Rader’s “Additional Reflections”

Chief Judge Rader also wrote some official “additional reflections,” which is highly unusual. He reflected on how the positions of the Judges have changed over the last 25 years, even though § 101 has not changed at all in that time period. He also reflected on the chaos of this opinion before concluding that “When all else fails, consult the statute!”

COnclusions—What to Make of All of This?

As a practical matter, this decision provides no precedential value. No rationale was able garner a majority of the Court. What it does signal is that the Federal Circuit cannot, at this, decide what to do with software patents. Five of the Judges (Lourie, Dyk, Prost, Reyna, and Wallach) appear hostile to software patents, while the other five (Rader, Moore, Linn, O’Malley, and Newman) are more receptive. Truly, one’s panel draw could be outcome determinative on appeals involving software patents.

Given the chaos, one could reasonably expect that the Supreme Court will have to step in and provide some clarity. Although, given its track record, even if it does grant cert on this case, it still might not provide clear guidance.

For some other, interesting views on this decision, see our friends at IPWatchdog (here, here, here, and here) and Patently-O (here).

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U.S. Supreme Court Rejects Farmer’s Patent Exhaustion Defense in Monsanto Patent Infringement Suit and Declines to Give Broad Guidance on Self-Replicating Inventions

Posted on May 14, 2013 by | Leave a comment

by: Kelly A. Williams, a shareholder at Picadio Sneath Miller & Norton, P.C.

SupremeCourtImage_1In Bowman v. Monsanto Co., the U.S. Supreme Court held that the patent exhaustion doctrine did not permit a farmer to reproduce patented seeds them through planting and harvesting.

Monsanto invented and patented a genetic modification that enables soybean plants to survive the application of many herbicides, including Monsanto’s Roundup.  Thus, farmers using these seeds can use certain herbicides to kill weeds without damaging their crops.  The seeds are known as “Roundup Ready” seed.

Monsanto requires growers who purchase the seed to sign a special licensing agreement that permits the grower to plant the purchased seeds in one, and only one, season.  The growers are prohibited from saving any of the harvested soybeans for replanting or giving them to anyone else for that purpose.   Consequently, a grower must buy seeds from Monsanto each season.

Bowman, an Indiana farmer, purchased the patented seeds each year for his first crop of the season, and in accordance with the license agreement, he used all of that seed for planting.  He then sold his entire crop to a grain elevator.  However, Bowman also planted a second crop of each season.  Because he believed late-season planting was risky, he did not want to pay the premium price for the Roundup Ready seeds.  He therefore went to a grain elevator, and purchased “commodity soybeans” intended for human or animal consumption and planted them.  Most of these commodity soybeans were grown from the Roundup Ready seeds.  When Bowman applied a herbicide, most of the new plants survived the treatment and produced a new crop of soybeans with the Roundup Ready trait.   Bowman saved the seed from that crop to plant his second crop the following year.  Bowman did this for eight growing seasons.  Monsanto found out and sued Bowman for patent infringement.

Bowman raised patent exhaustion as a defense, arguing that Monsanto could not control his use of the soybeans because they were the subject of a prior authorized sale from the grain elevator.  The Supreme Court rejected Bowman’s argument.  The court reasoned that the patent exhaustion doctrine, which provides that the initial authorized sale of a patented item terminates all patent rights in them, does not permit a buyer to make new copies of the patented item.  A second creation of the patented item calls the patent “monopoly” in play for a second time.  Here, Bowman was reproducing Monsanto’s patented invention, and the court held that the exhaustion doctrine did not protect him.  To hold otherwise, the Supreme Court explained, would result in Monsanto having a patent with little benefit because farmers could buy the seed only once and reproduce it.

Bowman tried to argue that seeds were special in that they were naturally self-replicating and that it was the soybean, not Bowman himself, that made the replicas of Roundup Ready seeds.  The court was not convinced by this “blame-the-bean” defense because Bowman was not a passive observer of his soybeans’ multiplication, having devised a novel way to replicate seeds from the soybeans.

The Supreme Court stressed that its holding was limited to addressing the specific situation before it, rather than other self-replicating products in the market.  The court recognized “that such inventions are becoming ever more prevalent, complex, and diverse.  In another case, the article’s self-replication might occur outside the purchaser’s control.  Or it might be a necessary but incidental step in using the item for another purpose . . . .  We need not address here whether or how the doctrine of patent exhaustion would apply in such circumstances.”

Thus, the Supreme Court did not use the Monsanto case as an opportunity to give any kind of broad guidance on the patent exhaustion defense as it applies to self-replicating products.  This guidance will have to await another day.

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Proper Pleading Standard Under Twombly for Patent Infringing Complaints–K-Tech Telecommunications

Posted on April 19, 2013 by | 1 Comment

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C. ()

Federal CircuitOn April 18, 2013, the Federal Circuit issued another decision in which it analyzed the interplay between the standard form patent complaint in Form 18 of the Federal Rules of Civil Procedure and the Supreme Court’s decisions in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009). Form 18 suggests that a plaintiff can satisfy the pleading standards for alleging direct patent infringement with relatively minimal allegations. The Federal Circuit determined that the Supreme Court’s decisions in Twombly and Iqbal did not pre-empt the appropriateness of Form 18. This decision follows a prior one (R+L Carriers, Inc. v. DriverTech LLC, (In re Bill of Lading Transmission & Processing System Patent Litigation), 681 F.3d 1323 (Fed. Cir. 2012)), in which the Federal Circuit considered the same question (and ruled in the same way).

The Federal Circuit noted that Form 18 requires that a plaintiff make:

(1) an allegation of jurisdiction; (2) a statement that the plaintiff owns the patent; (3) a statement that defendant has been infringing the patent ‘by making, selling, and using [the device] embodying the patent’; (4) a statement that the plaintiff has given the defendant notice of its infringement; and (5) a demand for an injunction and damages.

The Federal Circuit further noted that “Federal Rule of Civil Procedure 84 states that ‘the forms in the Appendix suffice under these rules and illustrate the simplicity and brevity that these rules contemplate’” and that  the Advisory Committee Notes “make[] clear that a proper use of a form contained in the Appendix of Forms effectively immunizes a claimant from attack regarding the sufficiency of the pleading.”

The question the Court next considered was whether Twombly and Iqbal pre-empted Form 18 and Rule 84. It determined that “as we made clear in R+L Carriers, to the extent any conflict exists between Twombly (and its progeny) and the Forms regarding pleadings requirements, the Forms control.”

In addressing the sufficiency of the complaint, the Court noted that it is generally not necessary for a plaintiff to identify the precise product being infringed, especially in instances where that information is within the control of the defendant and not publicly available.

Having said that, the Court then back-tracked somewhat about the detail required to meet the pleading standards, indicating that the bare allegations required in Form 18 might not be sufficient, depending on the complexity of the case and what would be required to give a defendant sufficient notice of the claims being brought against it.

A complaint containing just enough information to satisfy a governing form may well be sufficient under Twombly and Iqbal. R+L Carriers, 681 F.3d at 1334 n.6. “Resolution of that question will depend upon the level of specificity required by the particular form, the element of the cause of action as to which the facts plead are allegedly inadequate, and the phrasing of the complaint being challenged.” Id. (citing Twombly, 550 U.S. at 564 n.10 (noting that forms governing claims for negligence require sufficient detail to permit a defendant to “know what to answer”)). And we think it clear that an implausible claim for patent infringement rightly should be dismissed.

Form 18 in no way relaxes the clear principle of Rule 8, that a potential infringer be placed on notice of what activity or device is being accused of infringement.

Moreover, the Court cautioned that mere compliance with Form 18 may not be sufficient to meet the ethical requirements for filing a patent infringement action—plaintiffs must still conduct the required due diligence under Rule 11.

Satisfaction of Form 18 does not guarantee compliance with Rule 11 of the Federal Rules of Civil Procedure. That a complaint alleges a plausible claim for patent infringement on its face and satisfies Form 18 does not immunize a plaintiff who fails to identify easily ascertainable evidence of noninfringement through appropriate pre-suit investigation.

It appears that the Federal Circuit felt constrained by the Rules of Civil Procedure and the pre-Twombly/Iqbal forms. Had Form 18 not existed, the Federal Circuit may have decided differently. That being said, until Form 18 is changed, litigants must consider the appropriateness of pleadings in the context of Form 18, and not just the Twombly and Iqbal standards. Providing sufficient particularity to provide notice to the accused infringer of the patents raised and the acts of alleged infringement is still the ultimate touchstone.

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Posted in Federal Circuit matters, Intellectual Property Litigation, Patents

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Patent Prosecution Law Firms Beware . . .

Posted on April 17, 2013 by | Leave a comment

By: Joe Carnicella, intellectual property attorney with Picadio Sneath Miller & Norton, P.C.

On April 15, Thomson Reuters published a very interesting article that should be read by attorneys who represent clients in preparing and filing patent applications.  The article can be found here.  The article reports that at least three cases have been filed by publishers and copyright holders of scientific, technology and medical journals (American Institute of Physics and John Wiley & Sons Ltd.) against law firms for using copyrighted materials as part of the patent application process.  The law firms have been accused of “wrongly using copyrighted works to promote their business interests.”  In particular, the article reports that the plaintiffs are not complaining about copies being submitted to the USPTO, but rather, they are objecting to the fact that law firms made and kept additional copies of the copyrighted materials.  The law firms have responded by arguing that, inter alia, copies made during the course of the representation constitute fair use.  We will continue to monitor these cases.

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Are Human Genes Patentable?–Association for Molecular Pathology v. Myriad Genetics

Posted on April 16, 2013 by | Leave a comment

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C. ()

Supreme CourtYesterday, the United States Supreme Court heard oral argument on a key patent issue—are human genes patentable subject matter? In the Association for Molecular Pathology v. Myriad Genetics, Inc., (No. 12-398), the Supreme Court granted certiorari to decide this issue, which will have a profound impact on the medical research and pharmaceutical industries. (For a complete list of the issues presented, see here). This post follows up on our earlier post discussing the Court’s decision to grant cert.

In this case, Myriad Genetics identified and isolated a human gene that could be used to help predict a patient’s genetic predisposition to breast and ovarian cancers. Myriad then obtained a patent on, among other things, cDNA molecules associated with the relevant genes, as well as the use of the molecule to  probe a patient’s DNA and to prime the production of the patient’s DNA in the laboratory. (The parties’ briefs explaining the details of the patented claims can be found here). Myriad then created a test that could be used on patients to help assess whether they were more likely to be predisposed to certain kinds of breast and ovarian cancers.

After creating the tests and obtaining the patent, Myriad sent letters to various researchers, informing them of the patent rights and requesting that they refrain from infringing. As a result, numerous researchers ceased working in this area. A number of researchers and institutions filed a declaratory judgment action, seeking a determination, among other things, that the patents were invalid.

The Federal Circuit, in a split decision with each Judge writing separately, held that human genes are patentable subject matter. The Association filed a writ of certiorari challenging this decision, which the Supreme Court granted. Oral arguments were held on April 15, 2013, and a transcript can be found here.

While it is always difficult to predict how the Supreme Court will rule, there are some aspects that appeared to concern the Court more than others.  First, the Justices probed the parties for where and how lines should be drawn about what is a product of nature that should not be patented and what is the result of human intervention. This is the heart of the question presented and what they were struggling to define. Ultimately, the Court seemed more inclined to uphold the patent claims associated with the cDNA, as they involved more human intervention, but we will have to wait to see what they actually do.

Second, the Court  questioned whether striking these kinds of patents  would eliminate the incentives for inventors to invest the time and money in developing these kinds of tests and treatments. There was some concern that eliminating these kinds of patents could hinder innovation. On the other hand, counsel for the Association argued that allowing these kinds of patents actually creates a disincentive, as many researchers and companies will not invest any time and money for fear of being sued (which is what happened here).

The transcript of the oral argument makes for a fascinating read. What will be more interesting is reading the ruling. We expect a decision sometime later this summer.

For more analysis on the oral arguments, see here.

 

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Federal Circuit to Reconsider De Novo Claim Construction Review–Lighting Ballast Control Order

Posted on March 25, 2013 by | Leave a comment

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C. ()

Federal CircuitOn March 15, 2013, the Federal Circuit issued an order in Lighting Ballast Control LLC v. Philips Electronics North America Corp, Case No. 2012-1014, -1015, stating that an en banc panel of the Court will consider whether and to what extent it should afford any deference to a district court’s patent claim construction. The Federal Circuit is determining whether it will overrule its prior decision in Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448 (Fed. Cir. 1998).

The Supreme Court, in Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996), determined that claim construction is a matter of law exclusively for the courts, and is not a factual matter for juries (although it did recognize that claim construction is somewhat of a “mongrel,” having aspects that are both legal and factual). In Cybor, the Federal Circuit considered what the implication of that finding would be on how it, as an appellate court, would review a trial court’s construction of the claims in a patent. It concluded that because claim construction is a matter of law, it would review a district court’s construction of the terms in a patent de novo, meaning without any deference to the lower court’s conclusion. This has been the state of the law for some time now.

The implications of the Cybor decision are significant to patent holders and those accused of infringement. As a practical matter, parties to a lawsuit have come to view a district court’s claim construction as a somewhat intermediate position. After all, if the Federal Circuit will give no deference to the district court’s conclusions, there is a significant possibility that those conclusions could be reversed on appeal. Fair or not, the perception of the Federal Circuit among some practitioners is that a trial court’s claim construction only has a 50/50 chance of being affirmed on appeal. (For some interesting studies of Federal Circuit reversal rates, see here, here, and here). Many have complained that this uncertainty discourages settlement, because the “losing” side on the claim construction issue often feels that it will be “vindicated” on appeal.

On the other hand, by having the Federal Circuit have the “final say” on claim construction, it promotes more consistency and, hopefully, better results, as the Federal Circuit is often far more familiar with claim construction issues than many district courts and they (and their clerks) are often better versed in the technologies described in these patents.

Patent holders are also fearful that if claim construction is not reviewed de novo, an unfavorable claim construction by a district court may be very difficult to overcome and could affect how a particular term is construed in other patents held by the patentee. If the Federal Circuit has the final say, a patentee has more options. For instance, it can appeal to the Federal Circuit a get a fresh look at the issue, or it can settle the case with a realistic hope that the Federal Circuit in a later case would not be particularly beholden to how a district court in a previous case construed a claim term.

Thus, this case will be particularly important for parties in patent litigation. It will be very interesting to listen to the oral argument in the Lighting Ballast case and see what the Federal Circuit ultimately decides. This may, in the end, be another issue that the Supreme Court will decide to weigh in on.

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U.S. Supreme Court Interprets the “First Sale” Doctrine

Posted on March 20, 2013 by | Leave a comment

Supreme Court

By: Joe Carnicella, intellectual property attorney with Picadio Sneath Miller & Norton, P.C.

On March 19, 2013, in Kirtsaeng v. Wiley & Sons, Inc., No. 11-697, the U.S. Supreme Court held that the “first sale” doctrine applies to copies of a copyrighted work lawfully made abroad.  Specifically, a buyer or other lawful owner of a copy (of a copyrighted work) lawfully manufactured abroad is protected under the “first sale” doctrine and such buyer may bring that copy into the United States (and sell it or give it away) without obtaining permission to do so from the copyright owner.

Section 106 of the Copyright Act grants the owner of copyright exclusive rights including the right to distribute copies of the copyrighted work to the public by sale or other transfer of ownership.  One limitation on these exclusive rights falls under Section 109(a) of the Copyright Act (commonly referred to as the “first sale” doctrine), which provides that the owner of a particular copy lawfully made under this title is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy.  Thus, once a copy has been lawfully sold or its ownership otherwise lawfully transferred, the buyer of that copy and subsequent owners are free to dispose of the copy as they wish.  Section 602(a)(1) further provides that importation into the United States, without the authority of the owner of copyright under this title, of copies of a work that have been acquired outside the United States is an infringement of the exclusive rights to distribute copies under Section 106.

Wiley & Sons publishes academic books and assigns rights to publish, print and sell the English language textbooks abroad to its wholly owned foreign subsidiary.  Supap Kirtsaeng, while studying in the United States, asked his friends and family to purchase copies of foreign edition English-language textbooks at Thai book shops, which sold the books at low prices, and to mail the books to him in the United States, wherein he used the books, sold them, reimbursed his family and friends and kept the profit.

In 2008, Wiley initiated a lawsuit against Kirtsaeng for copyright infringement on the grounds that Kirtsaeng’s unauthorized importation of its books and his later resale of those books amounted to an infringement of Wiley’s Section 106(3) exclusive right to distribute as well as the Section 602 related import prohibition.  Kirtsaeng defended against the claim on the ground that the books he had acquired were “lawfully made” and that he had acquired them legitimately.  His position was that the “first sale” doctrine under Section 109(a) permitted him to resell or otherwise dispose of the books without the copyright owner’s further permission.  The District Court ruled that the “first sale” defense was not available to Kirtsaeng because the doctrine does not apply to “foreign-manufactured goods.”  The Second Circuit agreed with the District Court.

The Court analyzed the language within these statutes, and in particular the phrase “lawfully made under this title.”  Wiley argued that the phrase imposes a form of geographical limitation and that the “first sale” doctrine does not apply to copies of American copyrighted works manufactured abroad.  Kirtsaeng argued that the phrase imposes a non-geographical limitation, and in particular, that the intention was for the phrase to mean “made in accordance with” or “in compliance with the Copyright Act.”  In this case, Kirtsaeng asserted that the “first sale” doctrine would apply to copyrighted works as long as their manufacture met the requirements of American copyright law, e.g. copies manufactured abroad with the permission of the copyright owner.  The Court considered the language of Section 109(a), its context and the common-law history of the “first sale” doctrine and concluded that Section 109(a) favors a non-geographical interpretation.  The U.S. Supreme Court determined that, while Section 602(a)(1) makes clear that importing a copy without permission violates the owner’s exclusive distribution right, it also refers explicitly to Section 106(3), which is by its terms is subject to various limitations including the “first sale” limitation under Section 109(a).

A complete copy of the Court’s Opinion can be found on the United States Supreme Court’s website.

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Posted in Copyrights, Intellectual Property Litigation, Rules and Procedures, United States Supreme Court

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Court Reduces Damages Award in the Apple/Samsung Patent Battle

Posted on March 5, 2013 by | Leave a comment

by: Kelly A. Williams, a shareholder at Picadio Sneath Miller & Norton, P.C.

iPhone ImageOn March 1, 2013, United States District Judge Lucy H. Koh of the Northern District of California ordered that the jury award of $1,049,343,540.00 entered last August against Samsung and in favor of Apple in their patent suit be reduced by $450,514,650.00.  The court determined that the jury had based part of its award on an impermissible legal theory, and she could not reasonably calculate the amount of excess while effectuating the intent of the jury.  For the Galaxy Prevail, which was found to infringe only utility patents, the jury awarded Samsung’s profits.  This was a legally impermissible remedy for a utility patent infringement.  For several other devices, the court determined that the jury improperly awarded damages for sales made before Samsung had notice of the Apple patents at issue.

Thus, the court ordered a new trial on damages for the following products:  Galaxy Prevail, Gem, Indulge, Infuse 4G, Galaxy SII AT&T, Captivate, Continuum, Droid Charge, Epic 4G, Exhibit 4G, Galaxy Tab, Nexus S 4G, Replenish, and Transform.  The jury award stood for the remaining 14 products as well as $598,908,892.00 of the original award.

Additionally, the court denied Apple’s attempt to increase the amount of damages.  Judge Koh cited the longstanding rule that the Seventh Amendment prohibits a judicial increase in a damages award made by a jury.  Apple argued that rule did not apply because there was no dispute about the proper amount of damages, but the court disagreed.  However, the court did determine that supplemental damages for infringing sales that were not considered by the jury because the sales occurred after the trial had concluded was appropriate.  The court decided to delay the consideration of the amount of these damages, however, until after the completion of appeals in the case.

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Under Armour Seeking to “Protect Its House”

Posted on February 22, 2013 by | Leave a comment

By: Joseph R. Carnicella, intellectual property attorney with Picadio Sneath Miller & Norton, P.C.

Under Armour has filed suit against Nike alleging that Nike has infringed certain Under Armour trademarks as a result of Nike’s use of the phrase “I Will” in advertisements.  Under Armour alleges that Nike’s use of “I Will” infringes its trademark rights, dilutes a famous mark, e.g. the slogan “I will protect this house,” and constitutes unfair competition.  Under Armour alleges that Nike launched an advertising campaign on its Facebook page and YouTube video page that repeatedly use the “I Will” trademark/tagline, and as a result, consumers have already associated Nike’s use of “I Will” with Under Armour.

Under Armour filed the lawsuit on February 21, 2013, in the United States District Court for the District of Maryland, Baltimore Division (1:13-cv-00571).  Nike has not yet filed a response to the complaint.  We will continue to monitor this action.

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Posted in Intellectual Property Litigation, Lanham Act, Trademarks

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Supreme Court Decides Gunn v. Minton Patent Legal Malpractice Case – State Court It Is

Posted on February 20, 2013 by | 1 Comment

Authored by Henry M. Sneath, Esq.  – Chair of the Intellectual Property Practice Group at Picadio Sneath Miller & Norton, P.C. , Pittsburgh, Pa.

Sneath, Henry 2012 headshotToday – The US Supreme Court in Gunn v. Minton decided that a patent legal malpractice case is properly brought in state court. The court held that even though the “case within a case” standard would require interpretation of a patent and other typically Federal Issues, that “case within a case” is a hypothetical case, that does not need to be in Federal Court.  Further the court wrote:

“Because of the backward-looking nature of a legal malpractice claim, the question is posed in a merely hypothetical sense: If Minton’s lawyers had raised a timely experimental-use argument, would the result in the patent infringement proceeding have been different? No matter how the state courts resolve that hypothetical “case with a case,” it will not change the real-world result of the prior federal patent litigation. Minton’s patent will remain invalid.

Nor will allowing state courts to resolve these cases undermine “the development of a uniform body of [patent] law. … Congress ensured such uniformity by vesting exclusive jurisdiction over actual patent cases in the federal district courts and exclusive appellate jurisdiction in the Federal Circuit. … In resolving the non-hypothetical patent questions those cases present, the federal courts are of course not bound by state court case-within-a-case patent rulings. … In any event, the state court case-within-a-case inquiry asks what would have happened in the prior federal proceeding if a particular argument had been made. In answering that question, state courts can be expected to hew closely to the pertinent federal precedents. It is those precedents, after all, that would have applied had the argument been made.”

We previously reported on this case and will follow for any interesting cases which actually try one of these malpractice cases in state court. Here is the opinion delivered by Chief Justice Roberts: http://tinyurl.com/a474okm

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Posted in Intellectual Property Litigation, Patent Legal Malpractice, Patents, Supreme Court Patent Cases, United States Supreme Court

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