SoCal IP Law Group

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Monthly Archives: November 2012

SoCal IP Institute :: December 3, 2012 :: Exclusion of Testimony and Federal Standards of Proof

We will be discussing one Federal Circuit case and one California Supreme Court case during our weekly SoCal IP Institute meeting on Monday, December 3, 2012. Brief synopses are presented below.

Sargon Enterprises, Inc. v. Univ. of S. Cal., Case No. S191550 (Cal. Sup. Ct. November 26, 2012) (attached).

Sargon Enterprises is a small dental implant manufacturer that patented a new type of dental implant in 1991 (US Pat. No. 5,004,421).  In 1996, Sargon entered into a contract with the University of Southern California for the university to clinically test the new implant.  Then, in 1999, Sargon sued USC and faculty members of its dental school for breach of contract, claiming that but for the university’s breach, Sargon would have become a worldwide leader in the dental implant industry and made many millions of dollars a year in profit.

During trial, the court excluded expert testimony offered by Sargon relating to their generous assessment of lost profits, stating that the expert’s testimony was speculative.  A jury found that USC had breached the contract and awarded the company $433,000 in compensatory damages.  The California Court of Appeal reversed, holding that the trial court erred in excluding the expert testimony.

The Supreme Court of California reversed the Court of Appeal’s decision, stating that the trial court has a duty to act as a “gatekeeper” to exclude speculative expert testimony, and the trial court acted within its discretion when it excluded opinion testimony that Sargon would have become extraordinarily successful had the university completed the clinical testing.

Revision Military, Inc. v. Balboa Mfg. Co., Case No. 2011-1628 (Fed. Cir. November 27, 2012) (attached).

This case involves design patents D537,098 and D620,039, owned by Revision Military, which are directed toward protective eyewear for hunting and other shooting activities.  Revision sued Balboa Manufacturing for infringement and moved for a preliminary injunction to stop sales of Balboa’s goggles.  The District Court for the District of Vermont denied the motion for preliminary injunction, holding that Revision had not provided a “clear” or “substantial” likelihood of success on the merits, which is the standard for preliminary injunctions under the Second Circuit.

On appeal, the Federal Circuit stated that a preliminary injunction enjoining patent infringement involves substantive matters unique to patent law, and therefore, is governed by the law of the Federal Circuit.  Accordingly, Revision did not need to meet the Second Circuit’s heightened “clear or substantial likelihood” standard, but rather the Federal Circuit’s easier standard of whether success is more likely than not.   The case was remanded so that the lower court can decide whether Revision meets the Federal circuit’s lower standard.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, December 3, 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 Noelle Attalla by 9 am Monday morning.

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SoCal IP Institute :: November 26, 2012 :: Overcoming Prima Facie Obviousness and Standing

We will be discussing two Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, November 26, 2012. Brief synopses are presented below.

Transocean Offshore Deepwater Drilling, Inc. v. Maersk Drilling USA, Inc., Case No. 2011-1555 (Fed. Cir. November 15, 2012) (attached).

This case involves a patent for offshore drilling technology that allows a single derrick on a rig to have parallel drilling operations for faster and cheaper oil well drilling.  In a previous case related to this litigation, the Federal Circuit had overturned the district court’s summary judgment finding of obviousness, noting that although Maersk showed a prima facie case of obviousness, the summary judgment was improper in view of Transocean’s significant objective evidence of nonobviousness (i.e., secondary considerations).

On remand, the district court allowed the jury to review the prior art references for the purposes of determining obviousness and the strength of the prima facie case of obviousness.  The jury verdict was one of patent validity and awarded $15 million to Transocean.  The district court then granted Maersk’s motion for JMOL notwithstanding the jury verdict.

The Federal Circuit stated in this case that it was error to allow the jury to reconsider whether the references made the patent at issue obvious because that issue was already decided in the first case.  The Court also held that there was no error in allowing the jury to weigh the strength of the prima facie case together against the objective evidence of nonobviousness.  The court 1) reinstated the jury verdict upholding the patent as supported by substantial evidence, 2) held that substantial evidence supported the jury’s finding of enablement, and 3) reinstated the jury’s award of $15 million as a reasonable royalty verdict that was supported by substantial evidence.

Ritz Camera & Image, LLC v. Sandisk Corp., Case No. 2012-1183 (Fed. Cir. November 20, 2012) (attached).

SanDisk owns several patents relating to NAND flash memory.  Ritz, a retailer that sells flash memory products, filed suit alleging that SanDisk had violated antitrust laws.  Ritz contended that SanDisk had fraudulently procured two patents relating to its flash memory products by failing to disclose known prior art and making affirmative misrepresentations to the PTO.  SanDisk moved to dismiss the case on the ground that Ritz lacked standing, arguing that Ritz should not be allowed to bring a declaratory judgment action challenging the validity or enforceability of the patents when Ritz has not been sued for infringement.

The district court denied SanDisk’s motion to dismiss stating that direct purchasers are generally permitted to bring antitrust actions and Ritz’s status as a direct purchaser gives it standing to pursue its antitrust claims even if it could not have sought a declaratory judgment of patent invalidity or unenforceability. The Federal Circuit affirmed saying that antitrust standing is not limited by the rules of patent standing.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, November 26, 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 Noelle Attalla by 9 am Monday morning.

SoCal IP Institute :: November 19, 2012 :: Inventorship and Best Mode

We will be discussing two Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, November 19, 2012. Brief synopses are presented below.

Hor v. Chu, Case No. 2011-1540 (Fed. Cir. November 14, 2012) (attached).

The defendant, Paul Chu, is a professor at the University of Houston.  He is listed as the sole inventor of U.S. Patent Nos. 7,056,866 and 7,709,418, which relate to a super-conducting material that does not require liquid nitrogen coolant.  The patents have earned $680,000 for the university, half of which was given to Chu.  Chu distributed about $140,000 to his lab assistants, including Hor and Meng.  Nevertheless, Hor and Meng brought suit claiming that they should also be listed as co-inventors.

The district court dismissed the case as barred by laches saying that the plaintiffs should have known for a long time that they were not named as inventors on the patent application. The district court also held that the suit was barred by equitable estoppel.

On appeal, the Federal Circuit vacated the lower court’s decision on laches, holding that the period for laches for an inventorship action does not begin to run until the patent actually issues, even if “the omitted inventors knew or should have known prior to patent issuance that their names were omitted.”  The Federal Circuit also vacated the equitable estoppel holding because it had been raised sua sponte by the lower court and in light of defendant’s failure to assert the defense against either plaintiffs.

Joy Mining Machinery v. Cincinnati Mine Machinery, Case No. 2012-1153 (Fed. Cir. November 8, 2012) (nonprecedential) (attached).

35 U.S.C. §112, first paragraph, requires that the best mode of carrying out the invention be disclosed.

Patent No. 6,662,932 is owned by Joy Mining Machinery and is directed to an apparatus for use in mining.  The inventors had determined that the best mechanism for its claimed drive-pin retainer was a press fitting. The patent does not identify a press fitting in the specification and instead suggests welding.  However, a press fitting mechanism was already known to those of skill in the art as a way to construct a drive-pin retainer.

The district court invalidated the asserted claim for failing to disclose the best mode.  The Federal Circuit reversed, holding that the best mode requirement does not require actual disclosure of the best mode, but rather only adequate disclosure to enable one of skill in the art to practice the best mode without undue experimentation.  The defendant, Cincinnati Mine Machinery, had failed to show any clear and convincing evidence upon which a reasonable jury could rely to find that the omission of press fitting from the ‘932 patent “concealed” its use as a drive-pin retaining means from the public.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, November 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 Noelle Attalla by 9 am Monday morning.

SoCal IP Institute :: November 12, 2012 :: Historically Significant Marks and Public Accessibility of Prior Art

We will be discussing one Federal Circuit case and one California Court of Appeal case during our weekly SoCal IP Institute meeting on Monday, November 12, 2012. Brief synopses are presented below.

Winchester Mystery House, LLC v. Global Asylum, Inc., Case No. H036253 (Cal. App. October 24, 2012) (attached).

The plaintiff is a privately owned company that owns and operates the Winchester Mystery House, which is a popular tourist attraction in San Jose, California that was built by Sarah Winchester, a family member of the Winchester Repeating Arms Company.  It is now a museum and comprises of the Winchester mansion, surrounding gardens and other structures.  The plaintiff owns a word mark and an architectural mark for the Winchester Mystery House, which have been registered since February 2010.  The defendant released a film entitled “Haunting of Winchester House” which told a fictitious horror story involving Sarah Winchester.

The plaintiff sued for unauthorized use of its trademarks, unfair competition, and interference with contract and economic advantage.  The trial court granted the defendant’s motion for summary judgment where the defendant argued that the First Amendment provided an absolute defense and the fair use doctrine allowed defendant to identify plaintiff’s marks in the context of describing the movie.

The California Court of Appeal for the Sixth District affirmed stating that the marks have historical significance and the defendant’s film title satisfies both prongs of the Rogers test in adequately ensuring protection of both the public interest in avoiding consumer confusion and the public interest in free expression.  The Court also affirmed the trial court’s grant of summary judgment as to the interference causes of action, stating that the evidence would not allow a reasonable trier of fact to find in favor of plaintiff as to these causes of action.

Voter Verified, Inc. v. Premier Election Solutions, Inc., Case No. 2011-1553, 2012-1017 (Fed. Cir. November 5, 2012) (attached).

The plaintiff brought two patent infringement actions in the District Court for the Middle District of Florida against various parties, alleging infringement of Reissue Patent RE40,449.  The patent related to automated systems and methods for voting in an election, featuring a self-verification procedure by which “machine and human error may be detected and corrected before the ballot is submitted by the voter for tabulation.”  The defendants filed for summary judgment of non-infringement and invalidity due to obviousness based in part on prior Internet articles. The plaintiff argued that the article on the web was not a publicly accessible printed publication because there was no evidence of indexing.  The district court disagreed saying that indexing is only one among many factors that may bear on public accessibility and a skilled artisan would have found the web article even without indexing.

In consolidated appeals, the Federal Circuit affirmed stating that the district court correctly held Claim 49 invalid for obviousness and Claims 1 and 25 not infringed because none of the accused products includes a ballot scanning device or its equivalent.  The Court also affirmed the district court’s conclusion that plaintiff failed to create a genuine issue of material fact regarding whether the defendants exercised the requisite control or direction for steps performed “by the voter” to directly infringe the method claims.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, November 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 Noelle Attalla by 9 am Monday morning.

SoCal IP Institute :: November 5, 2012 :: Ethical Considerations for Attorneys in the Modern Age

Our weekly SoCal IP Institute meeting on Monday, November 5, 2012 will be a class on ethical considerations for attorneys relating to new communication technologies.  This MCLE class will address how modern technology, particularly the Internet, computers, networks, cell phones and email, affect modern legal practice.  This class explores some of the issues and pitfalls facing attorneys in the use of cell phones, interaction with the Internet, and the use of email and other forms of electronic technology.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, November 5, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of Ethics MCLE credit. If you will be joining us, please RSVP to Noelle Attalla by 9 am Monday morning.