Category Archives: Technology

Agree To License Or Else

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

According to Law.com and Law Technology News, an e-discovery company, Recommind, is in the early stages of negotiating licenses to various competitors for both its already patented technology and its “expected-to-be” patented technology.  Recommind will then decide, based on the final outcome of such negotiations, whether to file lawsuits against its competitors.  While the pre-suit negotiations may serve as an effective method for the different companies to attempt to save costs invariably associated with patent litigation, such approach is unique in the sense that Recommind is negotiating with technology that may or may not be protected by patents.  Click here for the complete article.

Social Media and IP Protection

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

You may have seen the photograph of the space shuttle Endeavour taken by Stefanie Gordon from her airplane seat.  Well, Ms. Gordon never quite realized exactly what was to come with a simple tweet.  MSN posted a very interesting article this morning exploring the intricacies of copyright protection afforded to those who capture and share fortuitous famous photographs instantly with the public through social media.

Update: What You Need to Know About PDF/A ECF Filings in Federal Court

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

As discussed in an earlier post on this blog, the federal courts will be requiring all electronic filers to move to the PDF/A standard for ECF filings. The Western District of Pennsylvania announced that it is beginning its transition to this format now, and all filings starting on January 1, 2012 must be in the PDF/A standard (link to Court’s PDF announcement).

The PDF/A format should be a longer lasting file format that will allow attorneys and the public to access these records well into the future. The PDF/A standard requires that the files be self-contained and not refer to use any information outside of the file itself. So, all the fonts and other information will be embedded inside the file. There are two types of PDF/A formats—the PDF/A-1a and PDF/A-1b formats. The “a” format requires strict tagging of information, while the “b” format is less stringent. As a practical matter, one will likely need the original source file (for example, the original Microsoft Word file) to create a PDF/A-1a file. This will make it more difficult to convert standard PDF files into PDF/A-1a files. On the other hand, because the PDF/A-1b format is more forgiving, and it should be possible to convert standard PDF files into this format. It appears that the federal courts will accept either PDF/A format.

There are a variety of websites offering advice and tutorials to help ease the transition to the PDF/A format. The Adobe Acrobat for Legal Professionals website recently posted a tutorial on using the save as feature in Acrobat 9 and X to create or convert files into the PDF/A format. It also hosted a webcast on the topic that can be viewed here.

For additional information:

  • Federal Court FAQ regarding PDF/A change
  • past Adobe Acrobat for Legal Professionals blog posts on this topic 1, 2, 3, 4
  • ISO 19005-1:2005 FAQ describing the standard (downloads FAQ)
  • PDF/A compliance organization FAQ

Oral Arguments in Microsoft v. i4i Limited on the Burden of Proof for Invalidity

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

The United States Supreme Court heard oral arguments today in Microsoft Corp. v. i4i Limited Partnership, Case No. 10-290, a case that calls into question what the proper burden of proof is to invalidate a patent claim. Microsoft challenges the long-standing standard of clear and convincing evidence and argued today that the proper standard of proof is merely by a preponderance of the evidence. Both i4i and the government argued that clear and convincing status quo should be maintained.

As is their custom, the Justices peppered both sides with questions about what the burden should be, and the Justices did not seem to clearly favor either side. While initially arguing in its briefs that the Court should adopt a hybrid approach—clear and convincing evidence for anything considered by the Patent Office during prosecution and preponderance for everything else—that position was largely ignored today during oral arguments. Instead the parties and the Court focused on a uniform standard and what it should be.

Justice Breyer noted the tension that exists between not giving legitimate inventions the protections they deserve and giving protection to inventions that do not deserve it. Counsel for i4i particularly stressed the need for protecting inventors and their inventions. In particular, he reminded the Justices that an inventor must completely describe his or her invention to the public in order to obtain a patent, which prevents the inventor from protecting his or her invention in other ways. The Justices also focused on the exact language of the statute (35 U.S.C. § 282) and the Court’s prior cases addressing the burden of proof. The parties also discussed how to instruct a jury about prior art that the Patent Office did consider.

  • A copy of the transcript can be downloaded here.
  • The Supreme Court docket for this case is located here.
  • The various briefs can be found here.

A decision is expected later this summer. Note that Chief Justice Roberts did not participate in the oral argument.

Patent Reissue as a Hedge Against Invalidity?

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

A recent decision from the Federal Circuit provides a boon for patent owners who are interested in filing suit against infringers but are concerned that their claims may be too broad to survive an invalidity attack. The decision in In re Takana (Case No. 2010-1262, April 15, 2011), allows a patent owner to file a reissue application before the US Patent and Trademark Office and add narrower claims to patent solely as a hedge against a potential invalidity challenge in future litigation.

A reissue application requires the patent owner to offer to surrender his or her patent and reopen the prosecution and amend the claims if the proposed changes were the result of an error and made without deceptive intent:

Whenever any patent is, through error without any deceptive intention, 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 Patent Office determined that the patent owner could not simply add a dependent claim to his patent through the reissue process. The Federal Circuit disagreed and concluded that the patent owner’s desire to add a narrower dependent claim to his patent was an error–claiming less than he could have claimed during prosecution–and was not done with a deceptive intent. It found nothing improper with the reason for adding the narrower claim was a concern that a potential infringer might be able to invalidate the broad, original claims.

The decision creates a real opportunity for patent owners that want to enforce their patents through litigation, but are concerned that the claims were too broad as they were drafted to survive an invalidity attack. As with any such opportunity, there are drawbacks, however. A patent owner must offer to surrender the patent and reopen the prosecution of the patent. There is always the possibility that an examiner will discover a new reason the calls into question the validity of the patent. There are no guarantees that the surrendered patent will be allowed again. In addition, the patent statute provides for intervening rights that protect the public when a patent owner changes its patent after it has issued (either through reissue or reexamination). These intervening rights may grant absolute and equitable protections for products that were on sale before the patent owner added the new claims. Thus, a patent owner may not be able to enforce the patent against currently-selling products. Intervening rights generally provide fewer protections to future products, though.

This decision presents new opportunities for patent owners and an ability to correct older patents that contain novel ideas that may have been inartfully claimed.

i4i v. Microsoft: Patent Case of the Year? Supremes to Decide

Posted by Henry M. Sneath, a principal, shareholder and IP Group Chair, and  Robert Wagner, an intellectual property attorney, both at Picadio Sneath Miller & Norton, P.C.  in Pittsburgh, Pennsylvania.

All of a sudden, the burden of proof in patent invalidity claims is under review. Where did that come from? i4i beat Microsoft in an infringement case in Texas and now Microsoft wants to change the battlefield rules. They have appealed to the Supreme Court, which will hear argument this  Monday April 18, 2011, that the burden of proof on patent validity challenges should be lowered from “clear and convincing” to “preponderance of the evidence.” Clear and convincing means that the proof must be substantially more likely than not, that the evidence is true.” This is less than “beyond a reasonable doubt” employed in criminal cases, but more stringent than “preponderance” which means simply “more likely than not.” Judges will frequently tell the jury that this inquiry is best visualized like the ‘scales of justice’, and if the evidence tips ever so slightly in favor of one party, then the burden of “preponderance” is met. “Clear and convincing” is a much steeper burden than preponderance – at least according to the law. Microsoft believes that it is much too steep for patent invalidation evidence.

The issue arose at trial in Texas when Microsoft wanted to introduce the prior art of i4i’s own previously designed and used software, which Microsoft claimed invalidated the i4i patent in suit (on sale bar). By the time the lawsuit was filed, the original source code for this prior work was lost, so Microsoft had to rely on circumstantial evidence about what the prior art did. Ultimately, they did not win before the jury or the Courts, and they argued that this was because of the high burden of proof (clear and convincing).

Originally, Microsoft contended that there should be a lower burden of proof (preponderance) only for items not considered by the PTO. It did not attempt to lower the bar for everything. The case has now morphed into an overall attack on the burden of proof in all cases, not just where the PTO has not considered the prior art in question. Microsoft proposes that everything should be preponderance, and, only as a fallback, that things not considered by the PTO need only be proved by a preponderance.

We think the arguments are fairly compelling that the standard needs to apply to everything equally, whatever that standard may be. A hybrid approach where invalidity based on some items need only be proved by a preponderance, while other items would require clear and convincing will simply be unworkable.

Among the problems we see (and the numerous amicus briefers saw) with the hybrid approach are:

1. What counts as being considered by the PTO? If it was disclosed? If it was specifically mentioned by the examiner?

a. If it is everything disclosed in the record, patentees will absolute deluge the PTO with references, which will make the examiner’s job more difficult and will result in references being buried and examinations taking longer.

b. If it is only things discussed by the examiners, that will be unfair to patentees. Examiners are not required to address every reference. They only have to discuss the most relevant ones. Thus, a duplicative reference that still is important may not be mentioned, even though it contains material that the examiner thought highly relevant. Now that reference will be evaluated under a lower burden.

c. Also, examiners frequently look at a number of references in their searches that are never identified in the record. Do these count? How would you find out what was looked at?

2. What do you do with invalidity positions that involve some references that were considered and some that were not?

3. What do you do with a reference that was considered for one basis (anticipation), but not another (obviousness)?

We  think it likely that the Supreme Court will adopt a blanket approach, either preponderance or clear and convincing. If it maintains the status quo, which we think is the better argument, nothing will change in the patent world. As far as we know, this has not been a pressing or disputed issue for years. If they do change to a preponderance standard, we expect that there will be a significant shift in Courts granting summary judgment motions for invalidity. We’re not sure that juries really pay much attention to preponderance or clear and convincing, although it might make a difference in a few cases.

We think that the major corporations siding with Microsoft hope that a change will make it easier to beat back troll (NPE) cases. In particular, larger corporations are likely to be able to afford to draft better patents with more prior art searching that the individual inventors cannot do or afford. We think that they are banking on their own patents’ strength not being affected too much, but with the perhaps underfunded trolls taking a hit. Overall, a shift to preponderance will only weaken patents and their enforceability. It will likely also encourage competitors to take more risks in creating products that arguably infringe; knowing that their burden of proof for invalidity has gone down significantly. We think it is hard to say whether companies will stop applying for patents. In the end, for some products the only thing you can do to protect them is to get a patent. There really aren’t many alternatives for products that are easily reverse engineered.

For ongong coverage of this Supreme Court argument, please check back with us regularly. You may also want to follow a great source for Microsoft news at the Nick Eaton’s Microsoft Blog from Seattle PI: http://blog.seattlepi.com/microsoft/2011/04/14/microsoft-i4i-at-supreme-court-patent-law-at-a-crossroads/

Henry Sneath                  Robert Wagner

“Open Innovation” – Pittsburgh May Be The Perfect Place For it

Posted by Henry M. Sneath, a principal, shareholder and IP Group Chair at Picadio Sneath Miller & Norton, P.C. in Pittsburgh, Pennsylvania.

I take no credit for this post. We have been linking to a great site “Pittsblog” authored by Michael Madison, a UPitt Law Professor.  He has published a series of great articles on “Open Innovation” in Pittsburgh and his latest is a good read. Check it out: http://pittsblog.blogspot.com/

Federal Trade Commisssion Issues Report on The Evolving IP Marketplace, Patent Trolls and Competition

Posted by Henry M. Sneath, a principal, shareholder and IP Group Chair at Picadio Sneath Miller & Norton, P.C. in Pittsburgh, Pennsylvania.

The FTC has issued a lengthy, exhaustive, relatively benign (309 pages) report on the state of competition in the IP Marketplace and the role of what they politely call “patent assertion entities” (PAE) – Patent Trolls formerly known politely as “non-practicing entities” (NPE).  Forgetting the changing face of politically correct nomenclature for Trolls, the FTC has examined the role of these entities in the IP Marketplace and it is clear that the FTC is not a big fan of the PAE crowd. They are seen as driving up cost, without any corresponding addition to the community of technological advancement. The FTC March 2011 released report is entitled: “The Evolving IP Marketplace – Aligning Patent Notice and Remedies with Competition.” Bottom line: The FTC urges that Patent drafters utilize clearer language to describe claims; that the PTO utilize “an indefiniteness standard that weeds out claims reasonably susceptible to multiple interpretations;” that courts reign in infringement damages and cap royalty payments and; that courts consider the leverage that injunctions provide to patent holders when they seek to extract a favorable royalty or damage deal. I’d like to say that our government dollars were hard at work here, but who didin’t know all that.

As to the PAE community – The FTC critically writes:

“Some argue that PAEs encourage innovation by compensating inventors, but this argument ignores the fact that invention is only the first step in a long process of innovation. Even if PAEs arguably encourage invention, they can deter innovation by raising costs and risks without making a technological contribution.” See FTC Report at P. 9

 

Here were some of the problems that the FTC examined in hearings and study. None are particularly novel or inventive:

  • Patent language is inherently imprecise (wow – that’s news);
  •  Some art areas, such as software, lack clear nomenclature and common vocabularies for claiming (didn’t know that);
  • Claiming using functional language, which describes what the invention does rather than what it is, can produce abstract, ambiguous claims (ok – that’s mildly newsy);
  • Some applicants may have incentives to draft ambiguous claims that might be viewed narrowly by the PTO and then construed broadly in litigation (no S—!);
  • PTO examination often focuses on issues of novelty and nonobviousness and may result in deferring clarification of claim boundaries until litigation (OK – decent insight here)   (Disclaimer – Editors comments are in bold and may represent some facetiousness) (See actual FTC Report at page 10)

The report is an attempt to examine the delicate balance between the promotion of,  or the stifling of, competition in the IP marketplace. It throws bones both to the tech transfer community and to true product producers and manufacturers, but remember, it’s a government report.  Here’s an example:

“Courts should not presume irreparable harm based on a finding of infringement or the patentee’s use of the patent. Conversely, courts should recognize that infringement can irreparably harm the ability of patentees that primarily engage in technology transfer through licensing to compete in a technology market.” See FTC report at page 27.

In other words, the FTC was for injunctions, before they were against them. Or – they voted for irreparable harm, before they voted against it.  We will continue to review the lengthy report and provide more analysis in the near future. Read the full FTC report here on our law firm site: http://www.psmn.com/CM/Custom/TOCResourceLibrary.asp

Qui Tam Provision for False Marking Held Unconstitutional

  by: Joseph R. Carnicella, Intellectual Property associate at Picadio Sneath Miller & Norton, P.C.

Plaintiff commenced an action in the Northern District of Ohio (Civil Action No. 5:10-cv-1912) as a relator alleging that Defendant falsely marked a series of industrial valve products with a patent that expired and used the patent in advertising its products after the expiration date.  Defendant subsequently moved to dismiss the action on the grounds that the False Marking Statute, 35 U.S.C. § 292(b), violated the Appointments and Take Care Clause of the U.S. Constitution, Article II, § 3.  On February 23, 2011, the Northern District of Ohio agreed with Defendant and declared the qui tam provision of 35 U.S.C. § 292(b) unconstitutional.

The False Marking Statute provides that it is unlawful for one to mark or advertise a product with a patent number that does not exist or has expired.  Also, this statute has a provision that allows any person (a “relator”) to sue for the penalty, wherein the penalty would be divided in one-half between the person suing and the United States.  Previously, the courts have confirmed that relators have standing under Article III to bring such suits in federal court, yet have deferred in deciding whether qui tam suits violate Article II.  In this particular case, upon suggestion by the court, Defendant raised the argument that this statute failed to give the Executive Branch sufficient control over the litigation in which the United States was the real party in interest.  The Take Care Clause of Article II provides that the President “shall take Care that the Laws be faithfully executed,” and Defendant argued that the False Marking Statute violated this clause. 

In support of its holding, the court distinguished between qui tam claims brought under the False Marking Statute and qui tam claims brought under the False Claim Act, 31 U.S.C. § 3730.  Under the False Claim Act, the government (a) must be informed of cases filed and pursued by relators even if the government decides not to intervene, (b) has a right to invervene after first refusing to intervene, upon showing of good cause, (c) has a right to limit the role of the relator in the litigation, and (d) has a right to seal the relator’s filings for more than 60 days.   Thus, the court concluded that the Executive Branch retains sufficient control over the relator’s conduct.  On the other hand, the court in the present case decided that the False Marking Statute lacks any of the statutory controls necessary to satisfy the Take Care Clause of Article II.  The court noted that the False Marking Statute is unlike any other statute in the Federal Code because it allows a person to file a criminal lawsuit in the name of the United States without any approval from or notification to the Department of Justice and that such action could be litigated wihtout any control or oversight. 

Whether this decision will be appealed, whether other district courts will follow such a decision in the interim, and whether this decision will have any impact on the 2011 Patent Reform Act are just some of the questions with answers unknown, and we will continue to monitor this hot topic.

Judge Unclogs Issue on Redirection of Internet Traffic Between Competing Companies

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

On February 15, 2011, Judge Schwab of the Western District of Pennsylvania ruled in favor of Fagnelli Plumbing Company, Inc. on its motion for summary judgment and found that there were no genuine issues of fact relating to the claims against Gillece Plumbing and Heating, Inc., et al., for a cybersquatting violation of the Anticybersquatting Consumer Protection Act (ACPA), a violation of the Lanham Act, 15 U.S.C. § 1125(a)(1)(A), and common law trademark infringement and unfair competition.  

According to the Judge’s Memorandum Opinion, Fagnelli Plumbing has been the registrant of the domain name “fagnelliplumbing.com” since 2000, and Gillece Plumbing purchased and registered the domain name “fagnelli.com” with GoDaddy in March 2007.  After learning that internet traffic was being redirected to Gillece Plumbing’s website and requesting in a letter that Gillece Plumbing cease and desist from redirecting internet traffic, Fagnelli Plumbing commenced the lawsuit on May 18, 2010. 

With respect to Fagnelli Plumbing’s cybersquatting claim, the Court analyzed the ACPA and concluded that the name “Fagnelli” was a distinctive mark entitled to protection, the registration of “fagnelli.com” was identical or confusingly similar to the name “Fagnelli” and Gillece Plumbing acted in bad faith with the intent to profit.  In regard to the alleged Lanham Act violation, the Court noted that generally the Lanham Act does not protect surnames unless they are distinctive or famous, yet held that “Fagnelli” acquired a distinct and secondary meaning with Western Pennsylvania at the time when Gillece Plumbing began to use the mark.  The Court also determined that Gillece Plumbing’s use of “Fagnelli” created a likelihood of confusion in the marketplace.  Moreover, the Court granted summary judgment on Fagnelli Plumbing’s claims for common law trademark infringement and unfair competition because the Court found these claims to be identical to the violation of the Lanham Act claim.  In addition to granting Fagnelli Plumbing’s motion for summary judgment, the Court also granted a permanent injunction prohibiting Gillece Plumbing from redirecting internet traffic from fagnelli.com or any other domain name using the word “Fagnelli” and owning the domain name fagnelli.com or any similar domain name.  The Court noted that a subsequent proceeding will be held to determine damages against the Defendants.