SoCal IP Institute :: March 19, 2012 :: Internet Machines, LLC v. PLX Technology, Inc. et al.

During our weekly SoCal IP Institute meeting on Monday, March 19, 2012,  we will be discussing the case of Internet Machines, LLC v. PLX Technology, Inc. et al., a patent case recently decided in the Eastern District of Texas. In a very favorable verdict for the patentee plaintiff, the jury found that Internet Machines’ two patents were valid and that the six defendants infringed all nineteen asserted claims through direct and induced infringement. The jury also found that PLX Technology, the manufacturer of the infringing chips, had willfully infringed the plaintiff’s patents.

The jury awarded Internet Machines’ full damages request of about $1M, though the full liability could exceed $18M.

Steve Sereboff from our Westlake Village office wrote the two patents and helped guide the plaintiff to victory. He will provide some insights into the trial.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, March 19, 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 :: March 12, 2012 :: Section 101 Jurisprudence and Limits on Broadening Reissue Claims

We will be discussing two Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, March 12, 2012. Brief synopses are presented below.

Myspace, Inc. v. GraphOn Corp., Case No. 2011-1149 (Fed. Cir. Mar. 2, 2012) (attached).  GraphOn had a patent relating to the ability to create, modify and store database records over a computer network.  The district court’s grant of summary judgment of invalidity of the patents-in-suit is affirmed, as all the claims were either anticipated or rendered obvious by the prior art.  The Federal Circuit found that the district court’s broad construction of the claim term “database” was both reasonable and supported by the context.  The broad definition of the “database” term adequately supported the court’s assessment that there was no triable issue of fact, and that the prior art was considered a database and within the scope of the claims in the patents-in-suit.

The majority states that courts should exercise their inherent power to control the process of litigation by initially addressing patent invalidity issues in terms of §§ 102, 103 and 112, instead of getting involved in the “murky morass that is § 101 jurisprudence.”

Judge Mayer, in a dissenting opinion, arrives at the same conclusion of invalidity of the patents-in-suit, but through a failure to meet the requirements of § 101.  The dissent argues that 35 U.S.C. § 101 is an antecedent question that must be addressed before the court considers obviousness or anticipation.

In re Staats, Case No. 2010-1443 (Fed. Cir. Mar. 5, 2012) (attached).  The court reversed a decision of the Board of Patent Appeals and Interferences, which limited the scope of claims filed in continuation broadening reissue applications filed after the two-year period of 35 USC § 251.  The court held that when an earlier broadening reissue application is filed within the two-year statutory period of 35 USC § 251, an applicant can make further broadening changes after the two-year period in the course of the prosecution of the reissue application, even in situations where the later broadened claims are not related to, nor directed to the same embodiment as in the original application.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, March 12, 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 :: March 5, 2012 :: The DMCA Safe Harbor and the Scope of Congressional Copyright Authority

We will be discussing two recent copyright cases during our weekly SoCal IP Institute meeting on Monday, March 5, 2012. Brief synopses are presented below.

UMG Recordings, Inc. et al. v. Shelter Capital Partners, LLC, Case No. 09-55902 (9th Cir. Dec. 20, 2011) (attached).  UMG is a record label based in Los Angeles. Veoh Networks owns and operates a video sharing website.  Individuals can upload videos to Veoh which may then be viewed by others searching for those videos or by sharing of those videos via social media sites, email and other methods.  UMG claimed that many Veoh videos include songs for which UMG owns the copyright.

UMG filed suit against Veoh as both a direct and indirect copyright infringer.  The district court granted summary judgment on the basis that Veoh was protected by the Digital Millennium Copyright Act (“DMCA”) safe harbor provisions.  These provisions limit the liability of service providers, subject to their compliance with DMCA take down notices, their lack actual knowledge of the infringement and if when they obtain such knowledge, they move swiftly to remove infringing content.  The district court found that Veoh met all of these limitations.  On appeal in a very detailed decision, the 9th Circuit agreed.  The only issue remanded for further consideration was as to whether Veoh was entitled to “costs” as a prevailing party.

Golan v. Holder, Case No. 10-545 (U.S. Sup. Ct. Jan. 18, 2012) (attached).  A group of orchestra conductors, musicians, publishers and others sued Attorney General Eric Holder.  The plaintiffs, who formerly enjoyed free access to musical compositions (among other things) created by foreign entities that were not protected under U.S. copyright law because their countries of origin did not grant reciprocal rights to U.S. entities seeking copyright protection in those countries.

In 1989, the U.S. entered the multilateral Berne Convention.  In anticipation of entering Berne, the U.S. passed the Berne Convention Implementation Act wherein the U.S. agreed to make only changes that were necessary for “minimal’ implementation of Berne.  In 1994, the U.S. joined in the World Trade Organization and in the Trade-Related Aspects of Intellectual Property Rights.  These gave teeth to the Berne convention requirements and prompted the U.S. Congress to “restore” foreign works that were previously unprotected by U.S. copyright law if they met certain preconditions.

The plaintiffs in this case sought an order stating that Congress had exceeded its authority to regulate U.S. copyright law in “restoring” these works because, in part, it had removed works from the public domain.  The chief argument was that Congress exceeded the scope of the Copyright Clause of the U.S. Constitution.  After appeal, a First Amendment argument was also added.  The Tenth Circuit eventually held that Congress had not exceeded its authority and that the change in the law was narrowly tailored to serve an important governmental interest of protecting U.S. copyright holders in foreign countries.  Accordingly, the U.S. Supreme Court affirmed.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, March 5, 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 27, 2012 :: Anticipation by Ranges of Values and the Meaning of “No Legitimate Interests” in UDRP Proceedings

We will be discussing one Federal Circuit case and one WIPO UDRP administrative panel decision during our weekly SoCal IP Institute meeting on Monday, February 27, 2012. Brief synopses are presented below.

ClearValue, Inc. et al. v. Pearl River Polymers, Inc. et al., Case No. 2011-1078 -1100 (Fed. Cir. Feb. 17, 2012) (attached).  ClearValue accused Pearl River of indirectly infringing U.S. patent no. 6,120,690 (’690 patent) related to a process for clarifying low alkalinity water using a quarternized plymer and an aluminum polymer.  After a jury found that the ’690 patent was valid and indirectly infringed, the district court denied Pearl River’s JMOL motions of invalidity and noninfringement. Because the jury’s verdict that the ’690 patent was not invalid under 35 U.S.C. § 102 was not supported by substantial evidence, the Federal Circuit reversed the denial of the motion for JMOL of invalidity.

In particular, the Federal Circuit found that the prior art’s teaching of a similar method including clarifying water with an alkalinity range from zero to 150 parts-per-million also taught the patent’s claim of clarifying water with an alkalinity of 50 arts per million or less.  The district court’s decision was reversed for failure to recognize that this prior art anticipated the claimed invention.

Cross-Appellant ClearValue appealed the district court’s grant of JMOL that Pearl River did not misappropriate ClearValue’s Trade Secret #1.  The Federal Circuit agreed with the district court that the jury verdict was not supported by substantial evidence and, therefore affirmed.  The primary contention was that the trade secret was not, in fact, a trade secret.  An employee of ClearValue had disclosed the elements of the alleged trade secret.

LEGO Juris A/S v. Griffith, Case No. D2011-1263 (WIPO Adm. Pan. Oct. 1, 2011) (attached).  LEGO filed a complaint under the Uniform Domain Name Dispute Resolution Policy (UDRP) of Mr. Griffith’s registration of the domain name legoworskhop.com.  LEGO s a Danish company, owner of the LEGO brands of toys and associated products.  Mr. Griffith is an individual living in North Carolina.  Mr. Griffith registered the disputed domain on February 25, 2011.  LEGO wrote to Mr. Griffith regarding the domain name several times without response.

LEGO contended that each requirement of paragraph 4(a) of the UDRP was made out.  This paragraph requires a complaintant to prove that:

(i) your domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and

(ii) you have no rights or legitimate interests in respect of the domain name; and

(iii) your domain name has been registered and is being used in bad faith.

LEGO contended that its mark was famous and that the “workshop” and “.com” aspects of the registration do not effect the overall impression.  LEGO further contended that Mr. Griffith has no legitimate rights in the name.  As to paragraph 4(a)(iii), LEGO pointed to the famousness of its own name, Mr. Griffith’s failure to respond to inquiries regarding the domain and the likelihood of confusion created by the registration.  Mr. Griffith’s defense was that he registered the site for the use of his 15-year-old son so that he might show off his LEGO creations.  Mr. Griffith further indicated that there was no intent to profit from the site and that offers to purchase the domain were refused.

The administrative panel found that paragraph 4(a)(i) was made out.  As to 4(a)(ii), the panel found that there was some legitimate dispute as to this element, and that some advertisements for Lego toys, Lego guns and Star Wars Lego appeared on or referred to the site.  However, given that the use was minimal and that the links appeared to have been put there by the registrar automatically before Mr. Griffith created a web page that removed of the links, the panel determined that LEGO failed to establish that Mr. Griffith had no legitimate interests in the domain.  The panel indicated that it was unnecessary to consider paragraph 4(a)(iii), but that were it to consider it, that LEGO’s showing was inadequate to indicate that Mr. Griffith had any bad faith in registering the domain name.  Accordingly, the complaint was denied.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, February 27, 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 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.