SoCal IP Law Group

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Monthly Archives: April 2011

SoCal IP Institute :: May 2, 2011 :: Standing to Sue for Copyright Infringement and Personal Jurisdiction in the Patent Context

We will be discussing two recent, relevant opinions in our weekly SoCal IP Institute meeting on Monday, May 2, 2011.  The first case discusses the requirement of an exclusive license in order to have standing to sue for copyright infringement.  The second case addresses issues of personal jurisdiction in patent cases.  A brief synopsis of the cases is presented below.

HyperQuest, Inc. v. N’Site Solutions, Inc., 08-2257, 08-3979, 08-4176 (7th Cir. Jan. 19, 2011) (attached).  This case concerns the standing requirement to sue for copyright infringement of a software product for processing insurance claims.  The product was licensed by Quivox Systems to N’Site Solutions.  The terms of this license are in dispute.  Quivox later sold its assets including the copyright for the software to Safelite Group who later granted those rights to HyperQuest.  HyperQuest maintained the license originally entered into by Quivox.  The source code for the software was eventually sold to Unitrin Direct Insurance.  Eventually, HyperQuest sued N’Site and Unitrin for infringement.

The district court concluded that HyperQuest held only a non-exclusive license and, therefore, lacked standing to sue.  The court also awarded costs and attorneys’ fees to N’Site and Unitrin.  HyperQuest appealed and, in this case, the 7th Circuit affirmed.  Essentially, the 7th Circuit agreed with the district court’s determination that, pursuant to the original agreement, HyperQuest was never in exclusive control of any one of the bundle of copyright rights in the eDoc software.  As such, it was not an exclusive licensee in the appropriate meaning of that term, and lacked standing to sue for copyright infringement.

Radio Systems Corp. v. Accession, Inc., 2010-1390 (Fed. Cir. April 25, 2011) (attached).   In this case, the Federal Circuit is reviewing a decision of the U.S. District Court for the Eastern District of Tennessee dismissing a patent declaratory judgment suit filed by Radio Systems.  Accession, over a course of a number of years and through various actions, sought to license its patent on electronic pet door access systems to Radio Systems.  Radio systems refused, attempted to patent its own product and, eventually brought suit.  The district court dismissed the case for lack of personal jurisdiction over Accession in Tennessee.

Radio Systems sought review of this decision and asserted a number of basis for personal jurisdiction.  First, Radio Systems argued that Accession’s activities in seeking to license the patent to Radio Systems were “directed” to Tennessee sufficiently to support personal jurisdiction.   Second, Accession made ex parte efforts to inform the Patent and Trademark Office of its own patent application during the course of the prosecution of Radio System’s own patent.  Radio Systems alleged that this was sufficient for personal jurisdiction in Tennessee because it’s primary effect was on Radio Systems in Tennessee.  Finally, Radio Systems asserted that an NDA signed between the parties included a choice of forum clause that named Tennessee and that this conferred personal jurisdiction.  The Federal Circuit disagreed with each contention and confirmed the district court’s dismissal of the declaratory judgment suit.

All are invited to join us in our discussion of these cases during the SoCal IP Institute meeting on Monday, May 2, 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.

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SoCal IP Institute :: April 25, 2011 :: Contempt in Patent Cases and Adding Claims in Reissue

We will be discussing two recent, relevant opinions in our weekly SoCal IP Institute meeting on Monday, April 25, 2011.  The first case sets forth a new standard for judging contempt in patent cases. The second case deals with the propriety of adding claims in reissue.  A brief synopsis of the cases is presented below.

Tivo, Inc. v. Echostar Corp., 2009-1374 (Fed. Cir. April 20, 2011) (attached).  This case deals with Echostar’s response to an injunction from a prior case involving these parties.  Echostar started selling products that it believed incorporated a work-around.  Tivo sued for contempt claiming that Echostar’s work-around was insufficient and won.  Echostar appealed and lost, then sought rehearing en banc to address the standard for contempt proceedings and to assert that the injunction itself was overbroad and vague.

The Federal Circuit concluded that the prior contempt standard in patent cases, set forth in KSM Fastening Systems was unsound and set forth a revised standard.  The “more than colorable differences” test remains, but the Federal Circuit eliminated a “preliminary” inquiry as to whether contempt proceedings were proper and indicated that contempt proceedings are a severe remedy.  The decision also emphasized that the colorable difference should focus on those aspects of the product that were changed in an attempt to work-around, not the product as a whole.

The case was remanded for consideration in view of this guidance and the damage award was vacated.  The court affirmed the contempt for Echostar’s failure to disable DVR functionality and rejected Echostar’s assertions of overbreadth and vagueness.

In Re Tanaka, 2010-1262 (Fed. Cir. April 15, 2011) (attached).  Mr. Tanaka sought to utilize the reissue process to add a dependent claim to his patent.  The examiner rejected the new claim, the Board of Patent Appeals and Interferences rejected and then a panel of the BPAI affirmed stating that this was not an amendment to correct a “partially inoperative” patent under Section 251. Mr. Tanaka appealed to the Federal Circuit claiming that this was contrary to clear precedent and a suitable use of the reissue process.

The Federal Circuit agreed with Mr. Tanaka.  Section 251 is available to aid an inventor who “claimed more or less” than he had a right.  One case in the Court of Customs and Patent Appeals had this exact holding.  A patentee does retain a right to file narrower claims in a reissue application if 1) the original patent is wholly or partially inoperative or invalid and 2) the defect was made through error without deceptive intent.  Both are present here.

The Board also asserted that the omission of a narrower dependent claim did not render the patent inoperative.  The Federal Circuit rejected this notion as well because each claim is a separate statement of the patented invention and because dependent claims are less vulnerable to invalidity attacks.  The Federal Circuit also rejected assertions that this was substantially the same as a “no defect” reissue.  For all of these reasons, the Board was reversed and the case remanded.

All are invited to join us in our discussion of these cases during the SoCal IP Institute meeting on Monday, April 25, 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 :: April 18, 2011 :: McKesson Split Infringement and Summary Judgment of Invalidity

We will be discussing two recent, relevant opinions in our weekly SoCal IP Institute meeting on Monday, April 18, 2011.  The first case is a further refinement of the on-going development of split infringement jurisprudence. The second case deals with written description and the propriety of summary judgment of anticipation.  A brief synopsis of the cases is presented below.

McKesson Technologies Inc. v. Epic Systems Corp., 2010-1291 (Fed. Cir. April 12, 2011) (attached).  In this case, McKesson appealed the grant of Epic’s summary judgment motion of noninfringement.  The district court granted Epic’s motion because McKesson was unable to prove that a single entity performed all of the steps of the asserted claims.  The Federal Circuit affirmed.

The patent is generally directed to a method of electronic communication between healthcare providers.  The claims required that various steps be performed, some of which by different parties.  McKesson was unable to demonstrate that all steps were performed by a single entity or by two entities with one of the entities under the control of the other.  In view of BMC, Muniauction and Akamai, the Federal Circuit agreed that the case was suitable for summary judgment where no direct infringement by a single entity could be shown.

One interesting note is that each judge filed an opinion.  Linn wrote the majority opinion.  Judge Bryson wrote to suggest that BMC, Muniauction and Akamai may merit reconsideration en banc.  Judge Newman suggested that despite whether or not a single entity was infringing, the party inducing infringement in this case, the party selling the software that enables two parties to infringe, should be liable for induced infringement regardless of the so-called “single entity” rule.

Crown Packing Technology, Inc. v. Ball Metal Beverage Container Corp., 2010-1020 (Fed. Cir. April 1, 2011) (attached). Crown obtained patent rights on two improvements that help to reduce metal waste in the manufacture of metal beverage containers and sued Ball to enforce those patents.  Ball asserted that the two patents, sharing one specification, failed to provide sufficient written description for the asserted claims and that the claims were anticipated by a Japanese reference.  The district court granted summary judgment on both issues.

On appeal, the Federal Circuit reversed finding that the written description was sufficient to support driving a chuck on either the inside or outside of a support band near the base of the can.  The specification showed only using one on the outside of the can, the claims covered both inside and outside.  The Federal circuit agreed with Crown.  Second, the Federal Circuit reversed the finding of anticipation primarily on the basis that there was a material dispute as to the weight and reliability of testimony provided by two experts.  In those situations, summary judgment is almost never appropriate.

All are invited to join us in our discussion of these cases during the SoCal IP Institute meeting on Monday, April 18, 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 :: April 11, 2011 :: Fed. Cir. R. 28(d) Sanctions and Likelihood of Confusion Analysis

We will be discussing two recent, relevant opinions in our weekly SoCal IP Institute meeting on Monday, April 11, 2011.  The first case is a decision imposes sanctions on an over-zealous use of confidential designations in Federal Circuit briefing. The second case affirms a TTAB decision to deny a trademark opposition.  A brief synopsis of the cases is presented below.

In re Violation of Rule 28(d), Misc. 976 (Fed. Cir. March 29, 2011) (attached). This is an order imposing sanctions upon a patent defendant, Sun Pharmaceutical Labs for extensive use of confidentiality desginations in violation of Fed. Cir. R. 28(d).  This is an appeal of a decision by the district court to enter a consent decree it believed was inconsistent with the terms to which it agreed.

Throughout Sun’s briefing of the appeal, it utilized confidential designations for legal argument, case citations and factual elements.  The Federal Circuit found the extensive use of confidential designations against public policy and otherwise unnecessary.  As a result, the Federal Circuit took the unusual step, for any court but especially for the Federal Circuit, of ordering sanctions of $1,000 against Sun’s counsel.

Citigroup, Inc. v. Capital City Bank Group, Inc., 2010-1369 (Fed. Cir. Mar. 28, 2011) (attached).  Citigroup appealed a decision of the Trademark Trial and Appeal Board to deny Citigroup’s opposition to several trademarks filed by Capital City Bank Group.  Citigroup has a number of marks including “CITI” and “CITIBANK”.   Capital City’s applications were for registration of various marks, each including the phrase “CAPITAL CITY BANK”.  The TTAB determined that Capital City’s marks should be allowed to register.

The TTAB reviewed the relevant DuPont factors and determined that the Capital City marks were not likely to cause confusion with the Citigroup marks.  While Citigroup’s marks were famous, the goods offered under the marks are similar and the channels of trade and classes of consumers are similar, the remaining factors weighed in favor of such a finding.  In particular, the spellings and words themselves were different and the word “Capital” was included in every Capital City application, therefore the marks themselves were distinct from one another.  The TTAB also determined that the was no actual confusion between the two sets of marks.  In view of these determinations and, having substantial evidence in support of the TTAB decision, the Federal Circuit affirmed.

All are invited to join us in our discussion of these cases during the SoCal IP Institute meeting on Monday, April 11, 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 :: April 4, 2011 :: Prima Facie Rejection of Patent Claims, Internet Keywords and Another Texas Transfer Mandamus

We will be discussing three recent, relevant opinions in our weekly SoCal IP Institute meeting on Monday, April 4, 2011. The first case is a decision confirming that neither an examiner nor the Board of Patent Appeals and Interferences is required to perform claim construction in rejecting patent applications in view of prior art. The second case directs 9th Circuit district courts to use some flexibility in addressing the use of competitor trademarks as internet keywords. In the third case, the Federal Circuit grants another petition for writ of mandamus forcing the Eastern District of Texas to transfer a case that does not belong there. A brief synopsis of the cases is presented below.

In re Jung, 2010-1019 (Fed. Cir. March 28, 2011) (attached). Mr. Jung’s patent application was rejected twice in view of U.S. Pat. No. 6,380,571. Mr. Jung appealed the rejection to the Board of Patent Appeals and Interferences. On appeal, the BPAI affirmed the examiner’s rejection of claim 1, but reversed the rejection of claim 5. Mr. Jung requested a rehearing on the basis that the BPAI failed to set forth a prima facie rejection. The Board rejected Mr. Jung’s request and he appealed the decision to the Federal Circuit.

Mr. Jung argued that the examiner or the BPAI should be required to perform (and should have performed) claim construction in its initial prima facie rejection. The Federal Circuit affirmed that claim construction is not required and that the notice requirements of a prima facie rejection 35 U.S.C. § 132 do not require such detail.

Network Automation v. Advanced Systems Concepts, No. 10-55840 (9th Cir. Mar. 8, 2011) (attached). Network Automation filed a declaratory judgment suit in district court seeking confirmation that its purchase of the word “ActiveBatch” for search engine results did not infringe Advanced Systems Concepts’ trademark in the same term. The district court entered an injunction forbidding Network Automation from using the term. The 9th Circuit reversed and remanded.

In particular, the 9th Circuit though that the district court focused too extensively on the so-called “Brookfield Troika” of elements, namely, the similarity of the marks, the relatedness of the goods and services and the simultaneous use of the Web as a marketing tool. As a result, the 9th Circuit thought that the likelihood of confusion showing was inadequate because the strength of the mark was questionable, consumers searching for that exact term presumably already knew the exact product they were seeking, and because the degree of care of purchasing consumers was not adequately considered. In the 9th Circuit’s view, the fact that the two companies were direct competitors and the alleged intent of Network Automation were too heavily weighed by the district court. The 9th Circuit, generally, called for the district courts as a whole to utilize more flexibility in analysis of these types of cases.

Bonus Case: In re Verizion Business Network Services, Misc. No. 956, (Fed. Cir. March 22, 2011) (case attached) The Federal Circuit continues to strongly indicate that cases that have no relationship to the state of Texas should be transferred elsewhere.

All are invited to join us in our discussion of these cases during the SoCal IP Institute meeting on Monday, April 4, 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.