SoCal IP Institute :: February 13, 2012 :: Functionality in Trade Dress and Certification Marks

We will be discussing two recent cases during our weekly SoCal IP Institute meeting on Monday, February 13, 2012. The first is a 9th Circuit case involving trade dress and the second is a Trademark Trial and Appeal Board (TTAB) case seeking cancellation of a certification mark.  Brief synopses are presented below.

Secalt S.A. v. Wuxi Shenxi Constr. et al., Case No. 20-17007, 11-15066 (9th. Cir. Feb. 7, 2012) (attached). Tractel manufactures and sells a traction hoist, typically used for construction and external maintenance of buildings.  Jiangsu, a Chinese competitor, manufactures a very similar hoist.  Tractel brought suit claiming that Jiangsu’s hoists infringed their trade dress.  The complaint was based upon trade dress infringement under the Lanham Act, federal unfair competition and related stat law trade dress and unfair competition claims.  The district court granted a summary motion by Jiangsu finding that Tractel failed to demonstrate that the alleged trade dress was nonfunctional.  The district court also awarded fees and costs to Jiangsu as an “exceptional” case under the Lanham Act.

In order to support a claim for trade dress infringement of an overall product configuration, “the entire design must be nonfunctional.”  Leatherman Tool Grp. v. Cooper Indus., 199 F.3d 1009, 1012 (9th Cir. 1999).  Tractel claimed that the configuration of parts met at right angles to give a “cubist” appearance and that the fins added to the exterior of the motor were intended to be “modern.”  The 9th Circuit found, citing Leatherman, that these elements that may or may not be purely for appearance do not save the otherwise functional nature of the arrangement of parts.  Instead, the entire configuration of parts must be nonfunctional.  Clearly, this was not the case.

Tractel also argued that the district court should have considered the Disc Golf factors:

(1) whether the design yields a utilitarian advantage, (2) whether alternative designs are available, (3) whether advertising touts the utilitarian advantages of the design, and (4) whether the particular design results from a comparatively simple or inexpensive method of manufacture.

Disc Golf Ass’n v. Champion Discs, Inc., 158 F.3d 1002, 1006 (9th Cir. 1998).

The 9th Circuit considered each factor and found that Tractel had not overcome its burden to show that the design was nonfunctional.

The 9th Circuit then considered the district court’s grant of attorney’s fees and costs as an exceptional case.  Because Tractel did not provide any reasonable ground to support its trade dress claim, even after two years of discovery.  At the point the summary judgement motion was filed, the 9th Circuit reasoned, it should have been well aware that it would be unable to prevail on the claim.  The failure of proof, coupled with Tractel’s insistence on asserting its claim moved this case, the 9th Circuit reasoned, from a mere failure to prevail to an exceptional case.  However, the attorney’s fees were remanded for confirmation that they were “reasonable” because the district court failed to make a finding on that issue.  A portion of the costs were also remanded as unreasonable or unsubstantiated.

Swiss Watch Int’;. v. Swiss Watch Indus., Cancellation No. 92046786 (TTAB Jan. 30, 2012 (attached).  Swiss Watch Int’l. (Int’l.) sought cancellation of the “SWISS MADE” and “SWISS” certification marks owned by the Federation of Swiss Watch Industry (Federation). These marks were to be used on goods certified by Int’l. as having a geographic origin in Switzerland.  Int’l. sought cancellation based upon a likelihood of confusion with their own marks (applications pending for “SWISS WATCH INTERNATIONAL” and “SWISS LEGEND”), alleged misrepresentations that led to registration, fraud on the U.S. Patent and Trademark Office, a lack of legitimate control over the marks, because Federation failed to police the use of the mark, because Federation discriminates in granting use of its mark and because the marks SWISS and SWISS MADE have become generic.

The TTAB dealt with some evidentiary issues and then moved on to the substance of the dispute.  Federation was tasked by the Swiss government with ensuring that manufacturers of watches and clocks claiming to be “Swiss,” actually satisfy a number of requirements, including that their products are actually made in Switzerland.  The first claim was that Federation allows the mark to be used in ways other than as certifications.  Examples included use by “Wenger Swiss Military” and “Swiss Army” among others.  The TTAB pointed out that this is not using the mark, but using each of those parties individual marks.  The TTAB addressed the allegedly large-scale failure of Federation to police the mark by stating that it was clear from the evidence that Federation has undertaking large-scale efforts to confirm that entities adhere to its standards.  While not complete or perfect, Federation’s control was adequate.

Int’l.’s next argument is, essentially, that it disagrees with Federation’s requirement that the watch movement be cased and inspected in Switzerland.  The TTAB pointed out that disagreement with the certification standards has nothing to do with the Board.  It is not the Board’s purpose to cast judgment upon the requirements for certification, but merely to confirm that the third party has standards and adheres to them.  The TTAB also dismissed the argument that the marks had become generic.  To the contrary, the “Swiss” watch carried significant positive public perception and, though used by some non-Swiss companies, that was not diminished in its meaning for quality and geographic origin.  The argument that Federation committed fraud in procuring the registration was based upon the failure of the standards document submitted in the application to use the phrase “Swiss Made.”  Instead it used the word “Swiss.”  The TTAB found this argument unpersuasive.  Accordingly, the petition to cancel the two Federation registrations was denied on all grounds.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, February 13, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Amanda Jones by 9 am Monday morning.

SoCal IP Institute :: February 6, 2012 :: Patentability of “Hybrid” Claims, Sufficiency of Means-Plus-Function Structure and Waiver

We will be discussing two recent Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, February 6, 2012. Brief synopses are presented below.

Dealertrack v. Huber et al., Case No. 2009-1566, 1588 (Fed. Cir. Jan. 20, 2012) (attached).  Dealertrack obtained patent protection for a process of applying for multiple loans simultaneously by filling out forms including all necessary data only once.  Dealertrack sued each of the defendants for their use of similar systems.  The defendants filed a summary judgment motion of noninfringement, invalidity as indefinite and invalidity as directed to non-patentable subject matter. The district court granted summary judgment of noninfringement and invalidity under Section 101.

On appeal, the Federal Circuit reversed the district court’s construction of “communications medium” to explicitly exclude the internet.  In addition, the court reversed the construction of “central processing means.”  In addition, the Federal Circuit agreed that the prior patent was properly incorporated by reference.  Therefore, the Federal Circuit reversed the finding of noninfringement and remanded for further proceedings in view of the revised claim construction.  The Federal Circuit also reversed the finding that claims 14, 16 and 17 were not indefinite because no algorithm was provided for “tracking” credit applications.

The Federal Circuit then turned to a discussion of patent eligible subject matter for the “computer-aided method” of claim 1.  The Federal Circuit found that the claim was not tied to a particular machine and the claim was not limited to a particular application and, therefore, was not directed to patent-eligible subject matter.  Dealertrack asserted that it was limited to credit clearinghouse applications, but the Federal Circuit rejected this argument as insufficient to confirm patent eligibility to abstract “computer implemented” ideas.  Accordingly, the Federal Circuit affirmed the district court’s grant of summary judgment of invalidity under Section 101.

HTC Corp. et al. v. IPCom GMBH & Co., KG, Case No. 2011-1004 (Fed. Cir. Jan. 30, 2012 (attached).  HTC sued IPCom for declaratory judgment that a patent asserted by IPCom was invalid.  The district court granted HTC’s summary judgment motion of invalidity as indefinite.  On appeal, the Federal Circuit reversed the grant of summary judgment and denied HTC’s attempt to assert an alternative basis for indefiniteness as waived.

The patent covers a mobile station and associated network for handling a “handover” when a mobile station switches between two base stations.  The district court granted HTC’s motion based upon an argument that a patent claim cannot be a hybrid of an apparatus and method claim.  On appeal, the Federal Circuit disagreed finding that the claim, properly construed, was clear as to which portions of the claimed elements of the apparatus and the functions they perform.  In short, the claims provided for method steps performed by the base station and also claimed an aspect of the mobile station.  Accordingly, the district court’s finding of invalidity as directed to hybrid subject matter was reversed.

HTC also argued that the claims failed to disclose corresponding structure to adequately support the means-plus-function claim elements.  The district court found that the processor and transceiver were sufficient.  The Federal Circuit disagreed finding that the processor and transceiver were sufficient structure, but that their precedent also requires that the patent disclose a specific algorithm for the means-plus-function element “an arrangement for reactivating . . . .”  However, because HTC failed to make an argument regarding the specific algorithm at the district court, the Federal Circuit found that the argument was waived on appeal.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, February 6, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Amanda Jones by 9 am Monday morning.

SoCal IP Institute :: January 30, 2012 :: Patent Standing and Federal Circuit Affirmation of TTAB Default Judgment

We will be discussing two recent Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, January 30, 2012. Brief synopses are presented below.

Benedict v. Super Bakery, Case No. 2011-1131 (Fed. Cir. Dec. 28, 2011) (attached).  Mr. Benedict, appearing pro se in a cancellation proceeding, appealed the decision of the Trademark Trial and Appeal Board (TTAB), entering judgment against him for failure to comply with discovery orders, and imposing the sanction of cancellation of his trademark registration. On appeal of a prior TTAB ruling, the Federal Circuit vacated the Board’s default judgment and remanded to the Board. On this appeal from the TTAB’s renewed decision upon remand, the Federal Circuit affirmed the judgment and the sanction of cancellation because Mr. Benedict had avoided meaningful participation in the cancellation proceeding for almost two years and, most recently, in an effort to avoid discovery obligations, filed a summary judgment motion hoping to utilize the TTAB’s “suspension” during summary judgment to enable him to still further delay cooperation.  In view of Mr. Benedict’s failure to take part in discovery, the Federal Circuit found that the default judgment and sanction were appropriate.

Abbot Point of Care v. Epocal, Case No. 2011-1024 (Fed. Cir. Jan. 13, 2012 (attached). Abbott filed a complaint against Epocal in the Northern District of Alabama alleging infringement of two patents related to systems and devices for testing blood samples. Abbott and Epocal are competitors in the diagnostic field. Abbot manufactures and sells a variety of healthcare products, including point-of-care systems that enable medical professionals to quickly test blood without sending a sample away to a lab. Epocal is a Canadian corporation founded by Dr. Imants Lauks, the named inventor of the patents-in-suit. Epocal manufactures and sells point-of-care blood testing systems. Both parties claim to own the asserted patents. Both patents name Epocal as the assignee. Abbott claims ownership on the basis of contracts between Lauks and Abbott’s predecessors. Lauks entered into a total of three contracts: two employment agreements and one consulting agreement with Abbott and its predecessors.

Under the terms of the initial contract, Abbott would have been the rightful owner of the patents.  However, Dr. Lauks entered into another agreement in 1999 that did not require him to assign any inventions.  As a result, the patents, filed in 2001, were subject to the later consulting agreement, without any obligation to assign.  Therefore, the Federal Circuit affirmed the lower court finding that Abbott lacked standing to sue Epocal.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, January 30, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Amanda Jones by 9 am Monday morning.

SoCal IP Institute :: January 23, 2012 :: Recent Changes to the Trademark Manual of Examination Procedures

We will be discussing the changes in the 8th Edition of the Trademark Manual of Examination Procedures (the TMEP) during our weekly SoCal IP Institute meeting on Monday, January 23, 2012.

The most important changes will be discussed by Christine L. Kopitzke of our Santa Barbara office.  Some of the highlights are available at the United States Patent and Trademark Office website.

All are invited to join our discussion on Monday, January 23, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Amanda Jones by 9 am Monday morning.

SoCal IP Institute :: January 16, 2012 :: Exceptional Cases and Preliminary Injunctions in Patent

We will be discussing two recent Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, January 16, 2012. Brief synopses are presented below.

MarcTec, LLC v. Johnson & Johnson and Cordis Corp, Case No. 2010-1285 (Fed. Cir. Jan. 3, 2012) (attached).  MarTec sued Johnson & Johnson and Cordis Corp. alleging infringement of two patents.  After claim construction, the Southern District of Illinois granted summary judgment of noninfringement.  J&J and Cordis then moved for the court to declare the case exceptional and to award reasonable attorney’s fees and expert witness fees.  The motion was granted.  On appeal of the decision that the case was exceptional, the Federal Circuit affirmed.

The independent claims of both patents provide for a “heat bondable material” that is “bonded” to a surgical device or implant.  During prosecution, the MarcTec patents were distinguished from a prior art reference on the basis that it bonds with the application of heat and because it, unlike the cited reference, did not include “intraluminal grafts” (stents).  The district court found that J&J and Cordis manufacture and sell stents that are of the type that bond at room temperature, as described in the disclaimed prior art reference.  On that basis, summary judgment of noninfringement was granted.

After this motion was granted, J&J and Cordis moved for the court to declare the case exceptional and to grant attorney’s fees.  J&J asserted that MarcTec 1) misrepresented claim construction law, 2) mischaracterized the district court’s claim construction order and 3) offered unreliable scientific evidence.  This district court agreed.  On appeal, MarcTec argued that the wrong standard was applied by the district court.  The Federal Circuit found that the correct standard was applied, namely, “subjective bad faith and objectively baseless” claims and that MarcTec’s claims were pursued in bad faith while being objectively baseless.  This alone was sufficient to affirm the award of attorney’s fees.  In addition, the Federal Circuit found that there was litigation misconduct in the form of misstating the law of claim construction to the district court and reliance up on scientific evidence that was lacking in any reliability.  As a result, the Federal Circuit affirmed the grant of expert witness fees and attorney’s fees.  The reasonableness of those fees was not challenged on appeal.

Celsis In Vitro, Inc. v. CellzDirect, Inc. et al., Case No. 2010-1547 (Fed. Cir. Jan. 9, 2012 (attached). The Northern District of Illinois granted Celsis’ motion for a preliminary injunction against CellzDirect.  CellzDirect  appealed the grant and requested a stay of the preliminary injunction pending the appeal.  This request was denied and the Federal Circuit affirmed the grant of the preliminary injunction.

Celsis’ patent covers a method for preserving liver cells through cryopreservation (freezing).  In general, liver cells are fragile and are typically irreparably damaged when frozen.  The Celsis patent describes freezing the cells multiple times as increasing viability of the cells.

In determining whether to grant a preliminary injunction, the court (and the Federal Circuit in reviewing) considered four factors: (1) likelihood of success on the merits, (2) irreparable harm, (3) balance of hardships, and (4) public interest.  As to likelihood of success on the merits, the Federal Circuit affirmed that the patent was not obvious in view of art previously identified by CellzDirect.  Some discussion was made of a de Sousa reference that, arguably, showed viability after a single round of freezing of the cells.  However, the court accepted the testimony of Celsis’ expert, Dr. Strom, which suggested that multiple rounds of freezing would not be expected to generate better results than a single round.  He argued that one would expect a runner of multiple marathons in rapid sequence to perform increasingly poorly in each marathon.  Therefore, it would stand to reason that multiple rounds of freezing in succession would decrease viability, not increase it.

As to irreparable harm, the district court and Federal Circuit affirmed that the possibility to calculate a damages award, if pressed, id not preclude a finding of irreparable harm.  As to balance of the hardships, the district court and Federal Circuit found that it clearly tipped in favor of Celsis, as holder of the patent, and that any harm to CellzDirect could be protected by a bond.  Finally, public interest is generally presumed in patent cases, because the public would favor enforcement of valid patent rights.  Accordingly, the preliminary injunction was affirmed.

In dissent, Judge Gajarsa argued that repetition of a known-to-be effective step shown in de Sousa is no invention at all.  As a result, he argues that de Sousa renders the Celsis patent obvious.  He argued that the flexible approach of KSR requires such an obviousness finding.  In addition, he argued that the burden was not adequately shifted in view of the prior art presented by CellzDirect.  In particular, he stated that CellzDirect need only present proof that the patent was vulnerable, not meet the clear and convincing burden of invalidity.  In view of these issues, he would have found that the preliminary injunction was improper because there was no likelihood of success on the merits.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, January 16, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Amanda Jones by 9 am Monday morning.

SoCal IP Institute :: January 9, 2012 :: The Stop Online Piracy Act (SOPA)

We will be discussing the proposed Stop Online Piracy Act (SOPA) during our weekly SoCal IP Institute meeting on Monday, January 9, 2012. A brief synopsis and several relevant articles and sites are presented below.

SOPA (attached) has been the subject of much commentary as of late.  The Electronic Frontier Foundation has an entire site devoted to SOPA.  Infographics discussing the substance of SOPA have been prepared by various sources.  Law professors have also weighed in on the SOPA debate.  On the other side of the debate, product manufacturers subject to counterfeiting and content producers have each supported SOPA.

In general, SOPA itself states that is intended “[t]o promote prosperity, creativity, entrepreneurship, and innovation by combating the theft of U.S. property, and for other purposes.”  Title 1, section 102 enables the Attorney General, at the request of a content holder, to request an order from a U.S. court to require internet service providers (DSL, Cable, FiOS, internet hosting sites and the like), internet search engines (Google, Bing, Yahoo and the like), internet advertising services (Google, Apple iAd, Yahoo and the like) and payment processors (banks, advertisers and the like) to take “technically feasible and reasonable measures” to stop users from accessing a “foreign” infringing site, to stop processing of payments directed to the operators of the site and to stop serving ads (and providing money) for the site.  Section 103 provides the ability for content holders to go directly to payment processors and internet advertising services in a DMCA-like take down procedure directed to cutting off funding for the site.

Other sections provide the internet service providers, internet search engines, payment processors and internet advertising services who comply with an order or a legitimate request with immunity to lawsuits by the allegedly infringing site.  Still other provisions provide that the effect of the law will be studied by the copyright office and that the Copyright Office will begin a study of “notorious” infringers in order to make recommendations to Congress.

Title 2 includes miscellaneous revisions to Title 17 and 18 of the U.S. Code pertaining to making copies of movies, for example, available before their theatrical release.  Title 2 also includes additional provisions related to counterfeit goods and unlawful use of trademarks by overseas entities.  Finally, Title 2 also appoints a new intellectual property attache to coordinate with foreign countries on appropriate enforcement of U.S. intellectual property rights.  These provisions are, generally, less-controversial than those in Title 1 of SOPA.

The law professors’ letter and the letter by several content producers referenced above provide a good primer on the two sides of the contentions provisions.  We will begin with these two sides of the issue in our discussion of SOPA on Monday, January 9, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Amanda Jones by 9 am Monday morning.

SoCal IP Institute :: December 19, 2011 :: Stipulation of Concurrent Use and the Doctrine of Foreign Equivalents

We will be discussing two Trademark Trial and Appeal Board cases during our weekly SoCal IP Institute meeting on Monday, December 19, 2011. Brief synopses are presented below.

Holmes Oil Co. v. Myers Cruizers of Mena, Concurrent Use No. 94002400, (T.T.A.B. Dec. 7, 2011) (attached).  The parties were involved in an opposition proceeding but stipulated to a voluntary concurrent use proceeding before the TTAB wherein Holmes sought the right to use the following mark:

The mark was to be registered for services including convenience stores.  The parties agreed that Holmes should be entitled to register and use the mark everywhere but in Arkansas, the location where Myers used the mark “MYERS CRUIZZER’S DRIVE IN,” and that Myers should be entitled to use their marks anywhere throughout the U.S. for restaurant services.

During the concurrent use proceeding, the parties jointly sought for the TTAB to implement their agreement and to allow the Holmes’ mark to register.  The terms of the agreement were confidential, but reviewed by the TTAB.  While the TTAB expressed some concern about the specificity of the agreement in dealing with instances of actual confusion, the TTAB approved the agreement finding that a confusion between the two marks was unlikely.  Accordingly, registration of the Holmes application was approved.

Tatuaje Cigars v. Nicaragua Tobacco Imports, Opp. No. 91185180 (T.T.A.B. Nov. 22, 2011 (non precedential) (attached). NTI sought registration of the mark TATTOO for goods including cigars and various related goods in class 34.  The opposer, Tatuaje, opposed on the ground that the mark resembled their registration for the mark TATUAJE for goods including cigars.  The only question before the TTAB was whether the marks were sufficiently similar to present a likelihood of confusion.

The TTAB examined the marks for their sight, sound, meaning and overall commercial impression.  Tatuaje primarily contended that there is a likelihood of confusion under the doctrine of foreign equivalents because the word “tatuaje” translates from Spanish into “tattoo” in English.  NTI argued that there was no evidence that a consumer would “stop and translate” the marks and, therefore, the doctrine of foreign equivalents did not apply.  The TTAB agreed with Tatuaje and found that the doctrine of foreign equivalents did apply.  The opposition was sustained.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, December 19, 2011 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Amanda Jones by 9 am Monday morning.

SoCal IP Institute :: December 12, 2011 :: CPR/AED Certification Training

Instead of the typical SoCal IP Institute, we will be taking part in Red Cross CPR/AED certification training on Monday, December 12, 2011 in our Westlake Village office from 1:00 pm to 4:00 pm.  All are invited to join us for the training.  If you will be joining us, please RSVP to Amanda Jones by 10 am Monday morning.

SoCal IP Institute :: December 5, 2011 :: Prior Invention and Standing to Bring Patent Cases

We will be discussing one case involving prior invention and another involving standing to bring a patent case during our weekly SoCal IP Institute meeting on Monday, December 5, 2011. Brief synopses are presented below.

Teva Pharma. Indus. Ltd. v. Astrazeneca Pharma. LP, Case No. 2011-1091 (Fed. Cir. Dec. 1, 2011) (attached).  Teva sued Astrazeneca alleging infringement of a Teva patent by Astrazeneca’s “Crestor” drug.  The patent required a “stabilizing effective amount” of one of a group of a stabilizing components.  At trial, Astrazeneca proved that it had conceived and reduced to practice the drug claimed prior to Teva’s earliest conception date, although it was unclear whether Astrazeneca appreciated which component had the stabilizing effect at the time.  On appeal, Teva essentially argued that because Astrazeneca failed to appreciate what it had done, its conception did not occur for purposes of 35 USC 102(g)(2).

The district court granted Astrazeneca’s summary judgment motion finding that it had conceived of the subject matter of the patent prior to Teva’s earliest date.  The Federal Circuit agreed that because Astrazeneca’s conception and reduction to practice met the claimed limitation of “an effective stabilizing amount” of one of the components, it was a prior invention under 35 USC 102(g)(2).

Gellman v. Telular Corp, Case No. 2011-1196 (Fed. Cir. Nov. 30, 2011 (attached).  Ms. Gellman brought suit on behalf of the Mayer Michael Lebowitz Trust seeking to enforce a patent that named her late husband as co-inventor.  Ms. Gellman claimed that the trust was the sole owner of the patent.  The district court disagreed finding that it was, at best, a joint owner, because a signed assignment document was not available.  The case was dismissed without prejudice for lack of standing.

On appeal Ms. Gellman asserted that it was the owner by assignment or in equity.  The Federal Circuit affirmed the finding that there was no formal assignment because Ms. Gellman was unable to produce a signed assignment document.  The unsigned agreement was not sufficient to convey legal right to the invention and the “hired to invent” doctrine was insufficient to convey legal title to the patent.  Accordingly, the Federal Circuit affirmed the dismissal.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, December 5, 2011 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Amanda Jones by 9 am Monday morning.

SoCal IP Institute :: November 28, 2011 :: Antitrust & Patent Law and Costs in Patent Litigation

We will be discussing one California antitrust case with patent law implications and one patent case pertaining to costs in litigation during our weekly SoCal IP Institute meeting on Monday, November 28, 2011. Brief synopses are presented below.

In re Cipro Cases I & II, D056361 (Cal. App. Oct. 31, 2011) (attached). On appeal, Plaintiffs made a number of contentions related to to a pre-existing agreement between Bayer and other, potential generic manufacturers of a patented drug.  The thrust of the plaintiffs arguments was that the agreement between Bayer and those potential generics manufacturers unlawfully restrained trade in contravention of antitrust laws.  After numerous trials related to these issues, the trial court in this case found that the agreement did not.

The California Appellate Court held that a settlement regarding a patent does not violate the Cartwright Act if the settlement restrains competition only within the scope of the patent, unless the patent was procured by fraud or the suit for its enforcement was objectively baseless.  The agreements at issue in this case did not restrain competition beyond the exclusionary scope of the patent.  Accordingly, the appellate court concluded that they did not violate the Cartwright Act. They also concluded that plaintiffs’ claim that Bayer’s infringement suit against Barr was objectively baseless due to Bayer’s inequitable conduct before the U.S. Patent and Trademark Office (PTO) in procuring the patent was preempted by federal patent law because plaintiffs’ right to relief on that claim necessarily depends on resolution of a substantial question of federal patent law. Accordingly, the court affirmed the judgment.

In re Ricoh Company, Ltd. Patent Litigation, Case No. 2011-1199 (Fed. Cir. Nov. 23, 2011 (attached).  Ricoh appealed the decision of the Northern District of California awarding almost $1 million in costs associated with its litigation against Synopsis, Inc.  After a seven-year litigation, Ricoh lost.  Synopsis requested costs of $1.3 million which was granted, after a reduction to just under $1 million.

Ricoh appealed the grant contending that the costs associated with a document database, those associated with making copies and those associated with depositions and interpreters were improper.  Because the parties entered into an agreement to share costs related to the document database, it controlled and the grant of costs associated with that should not have been granted.  The court reversed that grant of costs.  The Federal Circuit found that the costs of copying were not adequately identified and, therefore, vacated for a more accurate determination at the district court.  The award of costs for depositions and interpreters, even those not used in the successful summary judgment motion, was affirmed.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, November 28, 2011 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Amanda Jones by 9 am Monday morning.