Monthly Archives: June 2011

Top 10 Smart Phone PINs to Avoid (Updated)

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

iPhones and other smart phones are becoming ubiquitous among legal (and other) professionals. The ability to access your e-mail and documents outside the office is extraordinarily convenient. As attorneys, though, we must temper that convenience with our obligation to preserve our clients’ confidences. Most smart phones offer the ability to password protect the phone, often with a 4-digit PIN or passcode, before you can access the information on the phone. They also often have a feature that will wipe the phone’s data if a certain number of incorrect PINs are entered in a row (with the iPhone that number is 10). But just how secure is your phone?

In this blog post by Daniel Amitay, he looked at the most common 4-digit PINs from over 200,000 users for a program he wrote for the iPhone. Startlingly, the top 10 most common PINs represent 15% of all the PINs people actually use (instead of 0.1% if the PINs were uniformly distributed). While the PINs people use for a program on their phone, as opposed to the phone’s PIN itself, may not be the same, the findings are interesting nonetheless. If they were the same or even a large percentage were, this means that someone who finds (or steals) an iPhone would have around a 1 in 7 chance of unlocking the phone before it is wiped automatically! Smart phone users would be well advised to take a look at the list and consider whether the PINs they have chosen are really as secure as they should be given what information is on (or accessible from) their phones.

For a similar article about computer passwords, check out this NY Times article.

Update: There is another very interesting article on DataGenetics website that explores this issue in even more detail. It looks at not only 4-digits PINs, but also up to 10-digit PINs and identifies some of the more common ones used.  It provides even more insight into common PINs to avoid, and it is well worth the read.

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Patent Drafting Checklist

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

When drafting a patent, there are a number of factors that a patent attorney needs to consider. I saw this post on the PresumptionofValidity blog that nicely summarizes some of them in a checklist form. With a little bit of planning before you file the application, you can avoid a number of costly and sometimes fatal mistakes. It’s well worth the read (as are a number of other articles on the blog).

Federal Circuit Affirms District Court Limiting the Number of Claims a Patentee Can Assert–Stamps.com Inc v. Endicia, Inc.

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

In an interesting nonprecedential opinion issued this week in Stamps.com Inc. v. Endicia, Inc. (No. 10-1328), the Federal Circuit affirmed (among other things) the District Court’s decision to limit the number of claims a patentee could bring against an accused infringer. The Court held that the District Court did not abuse its discretion in arbitrarily limiting Stamps.com to asserting 15 claims against Endicia, as long as the District Court gave the patentee an opportunity to assert additional claims for good cause shown. While not a ground-breaking decision, the case is instructive for parties involved in litigating large numbers of patent claims.

The Case Below

Stamps.com sued Endicia for allegedly infringing 629 claims in 11 patents. Endicia moved the court to limit the number of claims, and the court agreed, limiting Stamps.com to 15 claims. The court did state, however, that it would remain flexible and revisit the limitation if Stamps.com could show good cause for needing to assert additional claims. The court then construed 10 claim terms in 15 claims from 7 patents. After briefing on summary judgment, the court invalidated the 7 claims.

Stamps.com then moved the court to pursue additional claims, which the court denied when it granted judgment for Endicia. Stamps.com appealed to the Federal Circuit, which affirmed and rejected Stamps.com’s challenge to the court’s 15-claim limitation, because of the “good cause” outlet the District Court provided.

Take Aways From This Case

This case confirms that trial courts have great discretion to manage their dockets, including limiting the number of claims that can be adjudicated, as long as the court provides some mechanism for a patentee to show good cause for adding additional claims. Thus, a defendant faced with allegations that it infringes hundreds or thousands of claims should consider moving the court to limit the number to a more manageable amount. At the same time, a patentee that finds itself limited to a subset of claims should take care to both choose the best claims to assert and be ready to show good cause for why additional claims may be necessary. Unfortunately, the Court did not identify what “good cause” would be sufficient to expand the number of claims asserted. Nonetheless, a patentee should begin to develop facts and arguments to be ready to use, if necessary.

USPTO Update—New TTAB Manual and Trademark Dashboard Released

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

Last month, the USPTO issued new rules and provided information that will be useful to trademark practitioners. In May 2011, the USPTO published the third edition of the TTAB Manual of Procedure (TBMP), which is the first update since 2004. The latest edition “incorporates all case law, statutory changes,  and changes to the Trademark Rules of Practice and Federal Rules where applicable as of November 15, 2010.” The complete version can be downloaded here. Trademark practitioners before the Trademark Trial and Appeal Board (TTAB) will need to review the changes and become familiar with these new rules.

In addition, building on its successful patent dashboard, the USPTO launched a trademarks dashboard. This dashboard, in the USPTO’s Data Visualization Center, provides up-to-date information about trademark filings at the USPTO, such as the average time to the first action, average total pendency of an application, number of applications, and other relevant statistics. This information will allow trademark attorneys to better inform their clients of the delays they may face in filing for a trademark. The USPTO now has three dashboards (patent, trademark, and policy and external affairs) that provide current statistics for the public, which builds on Director Kappos’ goal of providing more transparency about USPTO procedures.

Supreme Court to Consider Patentability of Natural Phenomena—Grants Cert in Mayo Collaborative Services v. Prometheus Laboratories

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

Yesterday, the Supreme Court granted cert in Mayo Collaborative Services v. Prometheus Laboratories, Inc. (No. 10-1150) to address whether a patentee can monopolize basic, natural biological relationships. This case could have far-reaching effects for those patenting medical procedures and biological processes. In particular, the Court appears to be confronting the issue of what are the bounds of patentable subject matter with natural phenomena and processes. The specific question presented is:

Whether 35 U.S.C. § 101 is satisfied by a patent claim that covers observed correlations between blood test results and patient health, so that the claim effectively preempts all uses of the naturally occurring correlations, simply because well-known methods used to administer prescription drugs and test blood may involve “transformations” of body chemistry.

The Court previously began to consider this issue in Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc., 548 U.S. 124 (2006), but dismissed the case for technical reasons. Three dissenting Justices (Breyer, Stevens, and Souter) and would have decided the case and held that such claims are not patentable subject matter because they cover a law of nature and a basic scientific relationship. The full Court will now consider this issue.

The Patent at Issue

At issue in Mayo Collaborative is Prometheus’s patent claim involving the treatment of autoimmune disorders by administering a drug and determining whether the dosage was appropriate based on an observed metabolite level in the patient. Once administered, the body automatically converts the drug into a metabolite, the amount of which determines whether the dosage was appropriate. Specifically, the claim reads:

1. A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising:

(a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and

(b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder,

wherein the level of 6-thioguanine less than about 230 pmol per 8×108 red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and

wherein the level of 6-thioguanine greater than about 400 pmol per 8×108 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.

The Case Below

Defendant (Mayo) argued that this claim was invalid because it was not patentable subject matter–all it amounts to is administering a drug and observing a reaction. Prometheus did not try to patent the reaction, which is a naturally-occurring one. Mayo also argued that the claim was unpatentable as a matter of public policy because of its broad scope and the effect it would have on public health and research. In particular, Mayo argued that any doctor that administered a drug and saw the results may infringe the patent, even if the doctor never took any action based on the results.

The patent was held invalid in the District Court, but the Federal Circuit reversed, finding that the claims satisfied the “machine-or-transformation” test under 35 U.S.C. § 101. On its first appeal, the Supreme Court remanded so that the Federal Circuit could consider the then-recent decision in Bilski v. Kappos, 130 S. Ct. 343 (2010). On remand, the Federal Circuit again reversed the District Court, finding that the patent claims were not invalid. Mayo again petitioned the Supreme Court for cert, which was granted yesterday.

What This Case Means

This case should clarify the scope of patents, especially as they relate to biological and natural processes. In Bilski, the Court rejected the Federal Circuit’s prior “machine-or-transformation” test as being too rigid. It will be interesting to see if and how they revise or clarify that standard. In addition, the Court will likely have to address whether an idea that is not abstract can nonetheless be so broad as to be unpatentable on that basis (as opposed to being anticipated or obvious).

If the LabCorp decision is any guide, the Court (or at least Justice Breyer) will be particularly hostile to claims that appear to cover laws of nature, natural phenomena, and abstract ideas. In that case, which also involved a patent claim for correlating test results with a physical condition, Justice Breyer found the claim invalid because it simply patented a natural phenomenon, albeit in the cloak of the abstract patent language of a process. In addition, Justice Breyer was concerned about the chilling effect of patents like these on doctors and their patients.

Regardless of what the Court determines, this case should be particularly important for those in the biological and pharmaceutical markets and could have a large impact on what kinds of inventions and processes can be patented.

In re Klein–Federal Circuit Reverses Obviousness Rejection Because Non-Analogous Art Used

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

Last week, the Federal Circuit issued a rather interesting opinion in In re Klein, No. 2010-1411, reversing the Patent Office’s rejection of a hummingbird nectar mixer based on non-analogous art. The Court found that the five references were inappropriately used by the Patent Office because they were not analogous art and therefore not prior art under § 103.

What makes this case interesting is the fact that the invention in question, basically a cup with a moveable divider in it, is such a simple device. Under KSR, one would expect that such a simple mechanical device would be particularly vulnerable to obviousness challenges. In addition, the patentee included a purpose clause in his preamble, which many practitioners now avoid. By doing so though, it turned out to narrow the scope of his claim and protect him from the art cited against him by the Patent Office.

The Application

Mr. Klein applied for a patent on a device for mixing nectar for hummingbirds, orioles, and butterflies. The device (shown below) is basically a cup with a moveable divider. One side is filled with water, and the other with sugar. By moving the divider, the ratio of water to sugar changes creating nectars better suited for different animals.

The only independent claim recited:

21. A convenience nectar mixing device for use in preparation of sugar-water nectar for feeding hummingbirds, orioles or butterflies, said device comprising:

a container that is adapted to receive water,

receiving means fixed to said container, and

a divider movably held by said receiving means for forming a compartment within said container, wherein said compartment has a volume that is proportionately less than a volume of said container, by a ratio established for the formulation of sugar-water nectar for humming-birds, orioles or butterflies, wherein said compartment is adapted to receive sugar, and wherein removal of said divider from said receiving means allows mixing of said sugar and water to occur to provide said sugar-water nectar.

The particular nectar ratios used were admittedly well-known and not novel.

Only Analogous Art Can Be Used Under § 103 for Obviousness Determinations

The Court noted that “[a] reference qualifies as prior art for an obviousness determination under § 103 only when it is analogous to the claimed invention.” There are two separate tests for determining what defines the scope of analogous art:

  1. “whether the art is from the same field of endeavor, regardless of the problem addressed” and,
  2. “if the reference is not within the field of the inventor’s endeavor, whether the reference still is reasonably pertinent to the particular problem with which the inventor is involved.”

The issue in this case was the second test—what is reasonably pertinent to the particular problem—because the cited references were clearly not in the same field of endeavor.

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Court Threatens to Sanction Copyright Troll Righthaven LLC

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

Yesterday, Chief Judge Roger Hunt of the United States District Court for the District of Nevada issued a stern ruling threatening sanctions against Righthaven LLC in one of the numerous copyright infringement lawsuits brought by Righthaven in Nevada (Righthaven LLC v. Democratic Underground, LLC, No. 2:10-cv-01356-RLH-GWF). In dismissing the case, the Court found that Righthaven misrepresented its rights in the underlying copyrighted works and did not have standing to sue for infringement. The Court further ordered Righthaven to show cause why it should not be sanctioned for failing to disclose another party’s (Stephens Media LLC) pecuniary interest in this and hundreds of other cases filed in Nevada.

Who Is Righthaven LLC?

Righthaven is a Nevada company that acquired limited rights from a variety of copyright holders, including Stevens Media LLC and News Media Group, to file hundreds of lawsuits against individuals and entities that allegedly infringe copyrights by posting excerpts of articles from newspapers such as the Las Vegas Review-Journal and the Denver Post. Righthaven has filed suit in a variety of jurisdictions throughout the United States, including Nevada, Colorado, and South Carolina.

Righthaven does not create or publish the works it is suing on. Instead, it acts as an enforcement arm of the original copyright holders that it has a relationship with. It scours the web looking for individuals, typically bloggers, that have reposted all or portions of articles appearing in newspapers such as the Las Vegas Review-Journal or Denver Post. It then files suit, threatening substantial sanctions, including damages up to $150,000 and forfeiture of web site domain names. Righthaven has sued everyone from political candidates to charities, individuals, bloggers, and companies—even those that a newspaper featured in the very article that was copied.

Because Righthaven does not create or publish the content that it is suing on, Righthaven is often referred to as a “copyright troll,” in an apparent tip to how many people refer certain types of non-practicing entities in the patent infringement arena.

Righthaven Lacks Standing to Sue

With respect to copyrights from Stevens Media, Righthaven entered into a Strategic Alliance Agreement (“SAA”) in 2010 that was made public for the first time this year as a result of discovery in one of the lawsuits. The agreement purported to assign all rights to the copyrighted materials to Righthaven. In fact left all of the rights with Stephens Media except for the bare right to sue. For example, Stephens Media expressly retained the rights to license, receive royalties, and exploit the copyrighted works. In addition, Stephens Media receives 50% of any of the litigation proceeds (minus costs) that Righthaven receives for lawsuits involving Stephens Media’s copyrights.

The Copyright Act only allows the legal or beneficial owner of an exclusive right to the copyrighted work to sue for infringement, and a copyright holder cannot (under Ninth Circuit law) assign the bare right to sue to another. In the Court’s decision yesterday, it found that the SAA gave Righthaven only a bare right to sue, so it was ineffective and Righthaven lacked standing—“ The plain and simple effect of this section was to prevent Righthaven from obtaining, having, or otherwise exercising any right other than the mere right to sue as Stephens Media retained all other rights.”

Righthaven Faces Sanctions

The Court was very troubled by Righthaven’s actions during this and other lawsuits brought in federal court in Nevada. In particular, the Court called some of Righthaven’s arguments and statements “disingenuous,” “inaccurate,” and “dishonest.” Most troubling to the Court was Righthaven’s failure to disclose that Stephens Media had a pecuniary interest in the litigation, despite Local Rule 7.1-1’s explicit requirement that all parties disclose anyone that has a direct, pecuniary interest in the outcome of the case. The Court believed that Righthaven also failed to disclose this information in approximately 200 other cases it filed in Nevada. Therefore, the Court ordered Righthaven to show cause within two weeks “why it should not be sanctioned for this flagrant misrepresentation to the Court.”

Is Righthaven Finished?

The Court’s decision yesterday is a stinging rebuke to Righthaven and its tactics. It will be interesting to see if it can survive this ruling and the likely challenges by defendants in the hundreds of other cases around the country. What may have appeared to be an easy way to make money off of these copyrights could end up costing Righthaven significant amounts of money in sanctions and attorneys’ fees.

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W.D. Pennsylvania District Court Selected to Participate in Patent Pilot Program

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

wd-pa-courthouseOn June 8, 2011, Chief Judge Gary L. Lancaster announced that the Administrative Office of the U.S. Courts selected the U.S. District Court for the Western District of Pennsylvania to be one of 14 Districts Courts to participate in a 10-year Patent Pilot Program. As part of this program, the Courts will funnel the majority of patent cases to designated patent judges in each district with the intention of providing litigants with Judges that have special training and interest in hearing these cases. As the U.S. Court press release stated:

“In the pilot program, patent cases filed in participating district courts are initially randomly assigned to all district judges, regardless of whether they have been designated to hear such cases.  A judge who is randomly assigned a patent case and is not among the designated judges may decline to accept the case. That case is then randomly assigned to one of the district judges designated to hear patent cases.”

The Administrative Office selected Courts with an established history and interest in patent litigation and those with local patent rules already in place (the Western District of Pennsylvania implemented its local patent rules back on April 1, 2005). The fourteen District Courts selected by the Director of the Administrative Office of the United States Courts were:

  • Eastern District of New York
  • Southern District of New York
  • Western District of Pennsylvania
  • District of New Jersey
  • District of Maryland
  • Northern District of Illinois
  • Southern District of Florida
  • District of Nevada
  • Eastern District of Texas
  • Northern District of Texas
  • Western District of Tennessee
  • Central District of California
  • Northern District of California
  • Southern District of California

The Western District of Pennsylvania’s participation in this pilot program, along with its local patent rules already in place, reinforces that Pittsburgh is an attractive venue for litigants wishing to resolve patent disputes.

Supreme Court Affirms Clear and Convincing Standard for Proving Invalidity in Microsoft v. i4i Decision

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

Today, the Supreme Court confirmed that parties challenging the validity of a patent have the burden to prove invalidity by clear and convincing evidence. Justice Sotomayor delivered the unanimous opinion for the Court in its decision in Microsoft Corp. v. i4i Limited Partnership (No. 10-290), which affirmed the Federal Circuit. Justice Breyer filed a concurring opinion, and Justice Thomas filed an opinion concurring in judgment. Chief Justice Roberts took no part in the decision.

Circumstances Below

By statute (35 U.S.C. § 282), patents are presumed valid, based, in part, on the deference shown to the Patent Office in examining patents. In the underlying case, Microsoft challenged the validity of the patent using a reference never considered by the Patent Office when examining the patent. Microsoft argued that the presumption of validity did not mean that it needed to prove invalidity by clear and convincing evidence, especially in these circumstances. Both the district court and the Federal Circuit disagreed, finding under long-established precedent that those challenging the validity of a patent must prove invalidity by clear and convincing evidence in all circumstances.

Microsoft’s Arguments For a Preponderance of the Evidence standard

At the Supreme Court, Microsoft argued that the Court should adopt one of two standards, either (1) accused infringers need only prove invalidity by a preponderance of evidence or (2) a hybrid approach where accused infringers need to prove invalidity by clear and convincing evidence for those references considered by the Patent Office but only by a preponderance of the evidence for anything else. The Supreme Court strongly rejected both approaches and affirmed the clear and convincing standard in all circumstances.

The Supreme Court’s Analysis

Tracing the history of patent law in the United States, the Court noted that it had previously considered the standard of proof in its decision in Radio Corp. of America v. Radio Engineering Laboratories, Inc., 293 U.S. 1 (1934). In that decision, Justice Cardozo stated that “there is a presumption of validity, a presumption not to be overthrown except by clear and cogent evidence.” This common-law understanding was well-rooted by the time that Congress enacted § 282, which declared that patents are presumed valid.

The Court also found persuasive how Congress reacted to the courts on this point. In 1984, the Federal Circuit recognized the clear and convincing standard of proof in its decision in American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350 (Fed. Cir. 1984), and, in the nearly thirty years since that decision, consistently reaffirmed this standard of proof. Despite amending the patent act numerous times since the American Hoist decision, Congress never expressed disapproval with the Federal Circuit’s decisions, which indicated to the Court that Congress agreed with this standard.

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Eastern District of PA Holds Qui Tam False Marking Statute Unconstitutional

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

In February 2011, the Northern District of Ohio determined that the Qui Tam False Marking Statute, 35 U.S.C. § 292, was unconstitutional under the Take Care Clause in Article II of the United States Constitution.  See our post on this decision.  On June 2, 2011, Judge Eduardo Robreno from the United States District Court for the Eastern District of Pennsylvania dismissed plaintiff’s qui tam action on the same constitutional grounds.  See Memorandum for a complete analysis of the legal issues by Judge Robreno.  This issue is expected to be resolved by the Federal Circuit following argument in FLMC v. Wham-O Inc. in July 2011.