"When Dr. Leighton and Mr. Lewin patented their invention, they expected our legal system to protect their intellectual property."
Heh, heh, heh...ho, ho, ho,...whatever lead them to believe THAT?
The Federal Circuit, perhaps spurred on by the hysteria over "patent trolls," continues to systematically extract whatever worn down, yellowed and decaying teeth remain in the patent laws. Their recent decision in Akamai v. Limelight reaffirms the recently created "single entity" rule that essentially requires that a "single entity" perform all steps of a patented method before direct patent infringement can be found.
As a practical matter, this means that all but the most clueless operators can safely infringe method patents through the simple expedient of having two or more parties perform different ones of the claimed method steps. (Here I am assuming they are bright enough not to enter into a discoverable contract entitled, "Agreement To Infringe Patent.") The dissent in this case correctly identifies this as a "gaping hole in liability which the majority never defends, and which all agree makes no sense."
The decision is interesting to read for a variety of reasons, not the least of which are the history and background of Section 271(a) (complete with citations to Giles S. Rich's 1949 statements before Congress) as well the bickering between the majority and dissenting judges. Personally, I come down on the side of the dissent, which correctly notes that (1) "whoever" as used in Section 271(a) is plural, and (2) this whole "single entity" business is only a recent creation and not some long-standing rule of law.
While there is much to discuss and debate regarding the two positions, what struck me is the majority's concern that, plugging this gaping hole is somehow unjust because it might lead to more litigation and the imposition of liability on wrongdoers. Well, yeah, isn't that kind of how this is supposed to work? I'll wager Dr. Leighton and Mr. Lewin thought so as well.
We've been exceptionally busy lately, so this is the first time we've had some time to actually take a look at what we've accomplished.
The Mann Law Group, now with a new associate Timothy Billick (bio and press release to come later), partnered up with John Whitaker to obtain a unanimous jury verdict award in the case Brilliant Instruments Inc v. GuideTech Inc. in the Northern District of California, Oakland Division (Case No No. C. 09-5517). The jury accordingly awarded a six-figure damages award to Mann Law Group's client. The firm represented GuideTech in this declaratory judgment action initiated by Brilliant Instruments.
The case covered Patent No. 6,226,231 ('231 Patent), which generally relates to a "plularity of measurement circuits" which are used to measure electrical signals down to the picosecond range. For you nomenclature nuts, that's 10 to the -12th second (or one-trillionth of one second). MLG inherited the case from several other law firms after it had been successfully appealed to the Federal Circuit and remanded to Oakland for trial.
"None of that was unanimous"
Every case has at least one or two lessons to be learned. This case? Always poll your jury, and always explain what "unanimous" means. After the judge had re-explained her instructions to the jury, the jury initially told us we lost. However, just as the Hon. Judge Claudia Wilken was getting ready to enter the judgment, one of the jurors spoke up in open court and informed the Court that the verdict "WAS NOT UNANIMOUS!"
The jury was ordered to continue deliberations. The next day, they came back in our favor.
We still have motions pending for an injunction, a defendant's motion to set aside the jury verdict, and a motion for an amendment of the judgment, but we have safely moved past the jury, and we have a damage award.
Next time we will take great care to make sure the judge tells the jury what "unanimous" means in jury instructions.
This recent article from the Wall Street Journal brought a chuckle. Seems the Obama Administration just stepped in to veto an ITC ruling, won by Samsung, that barred importation of certain Apple iPads and iPhones. What's interesting is some of the language used to justify the veto:
U.S. Trade Representative Michael Froman made the decision to veto the ban on the Apple devices, citing concerns about patent holders gaining "undue leverage" as well as potential harm to consumers and competitive conditions in the U.S. economy.
* * *
Critics of the ITC order questioned whether companies should be able to block rival products in cases involving patents that have been deemed to be essential to creating products based on key technologies overseen by industry standard-setting groups.
* * *
"We applaud the Administration for standing up for innovation in this landmark case," an Apple spokeswoman said in a statement. "Samsung was wrong to abuse the patent system in this way."
"Undue leverage," huh? Questions "whether companies should be able to block rival products." And, "abuse [of] the patent system." Gee, where have I heard those words before?
I trust Samsung and its lawyers are sitting back in quiet reflection today, wondering how they let their professional and ethical standards slip so far as to let them engage in such underhanded tactics, and vowing never to do it again.
Abusing the patent system, indeed.
This interesting article in the New York Times regarding a so-called "patent troll," raises the obvious question: If the patents are obviously no good and the claims of infringement clearly frivolous, how is it that supposedly top-notch lawyers must charge millions to show that to a judge?
I found this statistic from the article telling:
"One study found that United States companies — most of them small or medium-sized — spent $29 billion in 2011 on patent assertion cases. 'And only about $6 billion of that money wound up in the hands of inventors,' said James Bessen, a co-author of the study and a professor at the Boston University School of Law. 'As for the other $23 billion, most of it goes to legal expenses...'"
Legal expenses, eh? Incurred by whom?
Assuming a more-or-less standard 33% contingency fee, this means the inventors get $6 billion, their lawyers another $3 billion, meaning about $20 billion goes to defendant's counsel -- you know, those upstanding lawyers who complain about trolls, frivolous suits, abuse of the system, and threats to our American Way of Life, and only reluctantly -- reluctantly, I say-- put that $20 billion in their pockets.
The eyes of the patent world were on Seattle this week as an Order denying injunctive relief was handed down in the ongoing Microsoft v. Motorola heavyweight title bout.
While I will leave it to others to discuss the minutiae and determine the implications for the industry, the main question on my mind is whether this is what Motorola and other large companies had in mind when they welcomed the decision in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006).
Now admittedly, I do not know whether Motorola ever considered itself victimized by "patent trolls" or whether it held the view that patents, and in particular injunctions, should be reserved only for "serious" and "established" businesses. But I have a sneaking suspicion that Motorola, its lawyers, and others in similar situations might well be thinking, "Hey! This isn't how eBay was supposed to work."
For grins, check out the docket sheet for the case as well. More than thirty-four pages just to list the lawyers involved. (As a former big firm mouthpiece myself, I can well understand the pressure to hit your hours, particularly in a soft economy.)
It is always amusing to watch the intellectual gymnastics of clever people trying to defend the intellectually indefensible. Seventh Circuit Appellate Judge Richard Posner'r recent, article, "Patent Trolls Be Gone" (You talkin' to me, Judge?) is entertaining in this regard, as we watch the good judge try to "clarify" the "problems with our patent system, which are profound," before formulating, "feasible solutions."
According to the judge, one of these profound problems is the problem of "patent trolls, as they are called" who "purchase large numbers of patents in the hope of using the threat of a patent-infringement suit to extort a patent-license fee from a company that makes a similar product." (Emphasis mine.)
Extort? Since when is enforcing rights formally recognized by a Federal agency extortion? Strong words to be coming from a supposedly impartial judge.
As noted by the judge, "the alleged infringer may decide to pay the licensee fee, if it is not too large, to avoid the cost of litigation." But this raises the question of why does it take $3 million or more in legal fees to dispose of a case that supposedly has no merit in the first place? Most jurisdictions today have specific local rules for patent cases that call on a patent owner state with specificity in the very early stages of litigation precisely what products are accused of infringement, what claims are alleged to be infringed, and precisely how those claims cover the accused products. In a truly baseless case, the weakness becomes apparent very early on. (And if the case is that weak, no reasonably ethical lawyer would file it in the first place.)
The comments in the linked article are entertaining and instructive as well.
A few years back I wrote about what I saw as a developing "War on Juries" in patent cases. A couple of recent incidents suggest that the war continues.
Last week we lost a hard-fought case on summary judgment. That happens, it's part of the game, and the lawyer who never loses most likely never accepts a real challenge either. But what's humorous about it is that the decision came four days after trial was originally scheduled to have begun. Given that the whole idea of summary judgment is to increase efficiency and resolve one-sided cases early on, the fact that the case could have been tried to a verdict in less time than needed for summary judgment leaves me scratching my head.
This week, the Federal Circuit (surprise, surprise) overturned yet another lower court decision in favor of a patentee. In that case, the judges concluded that the invention was "obvious" based on some sort of "common sense" inventive standard. (Guess that's kind of up there with the "we know it when we see it" standard.)
What strikes me about both developments is all the judicial lip service paid about what "the trier of fact" could and could not reasonably conclude. Rather than simply present the evidence to the actual trier of fact, i.e., a jury, the courts prefer to spend more time, effort and money guessing about what a jury could find rather than simply presenting the evidence and finding out for real.
The elephant in the room is that juries play little, if any, real role in patent litigation today. Courts still seat them (if you get that far) as some sort of quaint hold-over from the past, but as far as their decisions actually carrying any weight, well, given that virtually every important question is now an issue of law, and hence reviewable de novo by the CAFC, the sad truth is that you will win only if the handful of judges there decide to let you win.
Hope I'm wrong about this, but the handwriting is on the wall. And it doesn't look encouraging.
Count me among the latest to question whether the Eastern District of Texas is still THE venue for bringing plaintiff's patent cases. A "Rocket Docket" it ain't.
We've filed a fair number of cases in the Eastern District over the years. Although things used to move with dispatch, in one of our latest, the first available date for a Markman hearing was June 2010. In another case, we are awaiting a Markman ruling following a hearing in April 2007.
And check out this apparently routine order we just received. Basically, it requires asking for permission before filing a whole host of motions and on its face plainly states the measures are needed "Due to the large number of patent cases pending on the Court's docket."
This is all no doubt due to the Eastern District's well deserved reputation as a fair and friendly forum for hearing patent cases. But I suppose there can be too much of a good thing. The backlogs were probably inevitable.
*Yes, I am aware Houston is not actually in the Eastern District. Just couldn't resist the cheap humor.
Just when it appears things can’t get much worse for patent plaintiffs, the Federal Circuit surprises us with a modest string of decisions actually finding in favor of patent holders.
Just one week after Muniauction, Inc. (pdf) took it on the chin by having its $77 Million jury verdict reversed (that’s reversed as in “you get zip, nada, nothing”), the boys in DC actually decided one in favor of the patentee. (pdf) What’s more they did it by upholding a summary judgment finding of infringement. Hmmm, haven’t seen that in quite a while.
On August 1 of this year, they truly outdid themselves by not only reversing summary judgment findings (pdf) of invalidity, noninfringement, and inequitable conduct (with fees thrown in to boot), but directing that the case be reassigned to a different judge on remand as well. I had to pinch myself to make sure I wasn’t dreaming. I wasn’t – six days later they did it again (pdf) (well, almost – no reassignment to a new judge this time).
Then in short order they (1) reined in a potential infringer who filed an early DJ action, (2) partially upheld a jury verdict in favor of an individual patent holder, and (3) vacated a lower court’s summary judgment finding of no infringement and no liability for damages. What’s truly amazing is that in the second of these (Voda v. Cordis), they actually upheld the jury’s finding of infringement under the doctrine of equivalents – THE DOCTRINE OF EQUIVALENTS of all things! (For you youngsters who’ve never heard of it, just ask anyone in practice before 2002. He might even be able to tell you about phlogiston too.)
Speaking of ancient history, the Eight Circuit at one time was so anti-patent they had an unbroken string of 18 or 19 decisions, each finding the subject patents invalid. Finally, and no doubt recognizing that this had not gone unnoticed by the bar, they upheld some obscure patent, probably just to get one in the “win” column for a change.
While the cynical side of me says the Federal Circuit is simply doing the same thing here, (after all, even the tightest casinos have to let someone win on occasion) I’d like to think maybe the pendulum is swinging back in favor of patentees once again.
On a serious note, what I’d truly like to think is that the work former Judges Markey, Rich and others did to deliver patent law from an arcane backwater to the forefront of law has not been wasted. There is no doubt in my mind that the law has shifted away from protecting individual inventors in recent years and that some on the Court have an agenda in that direction. Whether they will win out is unclear.
Perhaps this minor string of cases upholding patent rights signals a real change back to strong patents. Perhaps they are only a minor aberration. Or perhaps the real aberration has been the first twenty years of the Federal Circuit’s existence and that what we are witnessing now is merely a reversion of the law back to what it has been all along. I’d like to think not, but the truth is that for most of the Twentieth Century patents weren’t worth much, if anything. We’ve lived through that before and it could easily happen again. Are we heading that direction? Guess time will tell.
Patent Lawsuit News Archives
- May 2015
- December 2014
- June 2014
- August 2013
- July 2013
- December 2012
- October 2012
- February 2009
- January 2009
- August 2008
- October 2006
- June 2006
- May 2006
- April 2006
- January 2006
- November 2005
- September 2005
- August 2005
- July 2005
- June 2005
- May 2005
- April 2005
- March 2005
- February 2005
- January 2005
- December 2004
- November 2004
- October 2004
- September 2004
- August 2004