EU Says Crocs Foam Shoe Design is a Crock

Crocs, Inc., the Colorado foam clog maker and ITC Claimant alleging infringement of US D517,789 against local shoe maker Australia Unlimited (In re Certain Foam Footwear, Inv. No. 337-TA-567), suffered a loss earlier this month at the hands of the EU's Office for Harmonization in the Internal Market (OHIM) in a decision rendering Crocs' Registered European Community Design invalid. Crocs' EU Design covers the famous foam clog, allegedly first sold by Crocs in the US in November 2002 under the BEACH trademark. Read the OHIM's decision here (PDF).

Crocs' BEACH clog is also claimed in the '789 design patent, which was litigated earlier this year before Judge Bullock at the ITC. An initial determination concerning the validity of Crocs' '789 design patent is expected sometime this spring (2008) from Judge Bullock in the ITC investigation.

It will be interesting to see what impact (if any) this decision will have on the ITC's analysis of obviousness issues concerning Crocs '789 design patent.

Senators Discuss Need for Urgent "Modernization" of Patent Law

Recent discussions on the Senate floor had Senators Orin Hatch (R-UT) and Patrick Leahy (D-VT) calling for urgent "modernization" of the current patent act. The following is taken from the Congressional Record, available online for anyone wanting to track the Patent Reform Act of 2007.

Sen. Patrick Leahy [D-VT]: Mr. President, I would like to take a moment, along with the distinguished Senator from Utah, a longstanding member of the Judiciary Committee and a consistent partner of mine on intellectual property issues, to discuss S. 1145, the Patent Reform Act of 2007.

Sen. Orrin Hatch [R-UT]: I would be happy to discuss this important issue with my good friend from Vermont.

Sen. Patrick Leahy [D-VT]: First, I want to express my appreciation for my colleague's efforts in working to ensure that our patent laws are modernized. We first cosponsored patent reform last Congress. We again jointly introduced comprehensive patent reform this Congress in the form of S. 1145 in April of this year. Both bills had their foundations in numerous hearings with the testimony of dozens of witnesses and in innumerable meetings with the myriad of interested participants in the patent system. The message we heard repeatedly was of the urgent need to modernize our patent laws. The leaders of the House Judiciary Committee also heeded that call to legislate, and working with them, we introduced identical, bipartisan bills. H.R. 1908 was introduced the very same day that we introduced the Senate bill.

In July, after several extensive and substantive markup sessions, the Senate Judiciary Committee reported S. 1145 favorably and on a clear and strong bipartisan vote. In the course of our committee deliberations, a great many changes were made to improve and perfect the bill. These improvements included changes on the key issues of enhancing patent quality, clarifying rules on infringement and compensation of inventors, and improving the ability of the Patent and Trademark Office to do its job well.

Sen. Orrin Hatch [R-UT]: I am proud to be a leading cosponsor of patent reform. The inventiveness of our citizens is the core strength of our economy. Our Founding Fathers recognized the critically important role of patents by mandating in article 1, section 8, of the Constitution that Congress was to enact a patent law. The Congress has periodically seen fit to update the law to ensure it meets the changing needs of both science and our economy. But the current law has not seen a major revision since 1952. Much has changed since then. The courts have struggled valiantly to interpret the law in ways that make sense in light of change. but that piecemeal process has left many areas unclear and some areas of the law out of balance. So action by the Congress is needed, and needed urgently.

Sen. Patrick Leahy [D-VT]: I agree with my distinguished colleague that now is the time to enact patent reform, and we are in good company in that belief. Our leadership has committed to taking up S. 1145 as early in the new year as possible, and we commend that commitment. I fully recognize that when the bill was reported by the Judiciary Committee, a number of members expressed a strong view that the bill should be further perfected before it comes to a vote on the floor of the Senate. I made a commitment to the members of the Judiciary Committee at the markup that I would work closely with

each of them, and other Members of the Senate, to make further improvements in the bill. I reaffirm that commitment.

Sen. Orrin Hatch [R-UT]: Thank you. I was among the members of the committee who expressed the view that while I believed we were reporting a very sound bill, further improvements should be considered. I very much appreciate your willingness to work with me and other Senators and very much appreciate your commitment.

Sen. Patrick Leahy [D-VT]: As you and I have discussed, successful enactment of patent reform requires the input of all Senators. Over the past months, since the committee reported the bill, I have had numerous meetings with both members and affected interests. I know you have too. My staff has had literally hundreds of meetings and discussions about this legislation. In the course of those meetings, it has become clear to me that several issues are on the minds of most people: ensuring compensation for infringement is fair and adequate; clarifying rules on venue; and improving the ability of parties to challenge the validity of granted patents through administrative processes.

Sen. Orrin Hatch [R-UT]: I agree with my colleague, further improvements should be considered to key provisions of the bill, including damages, postgrant review, inequitable conduct defense, and venue.

Let me just say a few words about the need to make further reforms to the inequitable conduct defense. I commend Senator Leahy for working to develop an effective solution to the problem of the inequitable conduct defense during committee deliberation in July. No doubt he has done a good job in initiating this process. We certainly share many perspectives on how to reform this area of the law, but I believe more must be done to change the use of this defense as an unfair litigation tactic.

I know some have opposed any meaningful changes in this area because of how it would affect the generic pharmaceutical industry. As a coauthor of the Drug Price Competition and Patent Restoration Act, informally known as the Hatch-Waxman Act, I certainly understand the generic drug industry, but S. 1145 is an innovator's bill. Unless we promote and protect a structure that fosters a strong and vibrant environment for innovators, there will be fewer and fewer drugs for the generics to manufacture--and all, including patients, will suffer.

Much like Senator Leahy, my staff and I have met with many interested stakeholders and individuals about these provisions, and they have stated that further refinements to these four key provisions would garner even greater support of S. 1145. I firmly believe that compromise on each of these provisions is achievable, and I know that my good friend from Vermont would agree.

Sen. Patrick Leahy [D-VT]: Over the course of early January, I invite you and our colleagues to work with me to find viable solutions. It is my intention to seek and hear the views of any and all parties and to include all interested staff and Senators. This will continue to be an open and deliberative process, with the goal of favorable Senate action as early as the floor schedule permits. I am committed to a strong and effective balanced bill. I know there are some out there who would rather see us do nothing and leave the systems now in place or merely codify current jurisprudence. I believe that following this course would be shirking our responsibility to ensuring the economic strength of our country that is built on inventiveness.

Sen. Orrin Hatch [R-UT]: I agree with your intentions and applaud your plan. I stand ready to work with you and each of our colleagues. I also agree that this should not become an excuse for further delay or for doing nothing. Unfortunately, some would like to play political football with this bill to pursue other agenda items. Make no mistake: this bill is far too important and should not fall prey to such partisan tactics from either side. The Senate has a tremendous opportunity and responsibility to further strengthen our Nation's competitiveness through meaningful patent reform.

Peer To Patent Project Is Catching On

In a previous post, I argued for the continued patentability of software. I recognize the existence of "bad" software patents or patents on software that were improvidently granted. I also recognize the economic inefficiencies created by legal patent monopolies for software methods and systems that are old or obvious. Notwithstanding these problems, I still believe that getting rid of all software patents would be bad for the economy and bad for the industry. Instead of restricting the scope of patentable subject matter to exclude certain classes of technology, we (patent lawyers, software engineers, and anyone interested in technology as an industry) should endeavor to increase the quality of patent examination, especially in terms of searching for prior art.

The USPTO recognizes this and in June of this year it started a pilot project in coordination with New York Law School's Do Tank, with the stated mission "to prove that organized public participation can improve the quality of issued patents." The project is called the "Peer to Patent Project" and it involves "1) review and discussion of posted patent applications, 2) research to locate prior art references 3) uploading prior art references relevant to the claims, 4) annotating and evaluating submitted prior art, and 5) top ten references, along with commentary, forwarded to the USPTO."

According to a recent post on the Peer-to-Patent Blog the project has had 186,043 page views from 32,457 unique viewers in 126 different countries/territories. Currently, 1737 people have signed up to be reviewers and have cited 106 instances of prior art on 22 applications.
There are currently 17 active patent applications for review.

1) Honey monkey network exploration
2) Dynamic readjustment and interpolation of progress method and system
3) Methods of enhancing media content narrative
4) Systems and methods for clinical decisions crawler agent
5) System and method for managing storage system performance as a resource
6) Method and apparatus for selectively executing different executable code versions which are optimized in different ways
7) Crossbar arithmetic processor
8) Smart drag-and-drop
9) Methods and apparatus to implement annotations based thunking
10) Method of obtaining data samples from a data stream and of estimating the sortedness of the data stream based on the samples
11) Security systems for protecting an asset
12) Method for configuring a windfarm network
13) Technique to modify a timer
14) Cross-cutting detection of event patterns
15) User interface paradigm for manufacturing applications
16) Computer compliance system and method
17) Vector length tracking mechanism
18) Relocating page tables

This project is particularly noteworthy for its ability to bring together the industry's Hatfields and McCoys. Project Sponsors include Intellectual Ventures, IBM, Microsoft, and Computer Associates, HP, GE, and Red Hat. The project is also obtaining broad grass-roots support from the likes of the Electronic Frontier Foundation. This post from the EFF calls for participation in gathering prior art for one published patent application, the Smart Drag and Drop application owned by Yahoo!.

Report on Washington State Patent Cases 2007

There were a total of 49 patent cases filed in the State of Washington in 2007. That is an increase of over 48% from 2006 (33 total patent cases filed in 2006) and an increase of over 16% from 2005 and 2004 (both years had 42 patent cases filed). Cases filed in the Eastern District of Washington in Spokane continued to lag far behind those filed in the Western District. In 2007, just 2 of the 49 cases were filed in Spokane; that's just 4%. Tacoma saw five patent cases in 2007, about 10% of the total patent case load.

Here is the Judge break down for 2007 patent cases, listing current judges as of December 2007: Judge Zilly (9); Judge Jones (6); Judge Lasnik(4); Judge Pechman (5); Judge Robart (6); Judge Donohue (2); Judge Bryan (1); Judge Leighton (2); Judge Shea (2); Judge Theiler (2); Judge Settle (2); Judge Martinez (4); Judge Burgess (2); Judge Coughenour (1); Judge Whaley (1). Based on this data, Judge Zilly has the most 2007 patent cases on his docket (not bad for a Judge on senior status). The District's newest judge, Judge Jones, is tied for second with Judge Robart with a total of 6 patent cases from 2007.

According to Justia, there was at least one patent case tried all the way to verdict in Washington in 2007. That case was Baden Sports v. Molten USA, Inc. (06-210MJP). Judgment was entered against Molten for $8M on a jury verdict of willful infringement. Judge Pechman entered a limited injunction against Molten, and there are pending motions for contempt. The patent-in-suit was U.S. 5,636,835 for a padded basketball. This case was filed February 13, 2006, and tried to verdict in under 18 months.

Most cases filed in Washington from January 2004 through the end of 2007 state were settled or dismissed voluntarily without prejudice. So far, there is no uniform scheduling order entered for patent cases in any Federal Court in Washington. Some Judges, including Judge Robart, have a standing order for patent cases setting a schedule for disclosures and briefing leading up to a Markman hearing. Judge Robart's order is attached below (PDF). My quick scan of the scheduling orders entered by all judges in patent cases show that these cases are often scheduled with a trial date set 12-18 months out (from the scheduling order). Generally, the parties are given a lot of freedom to propose a case schedule.

Nationally, Washington saw just under 2% of all patent cases filed in 2007. According to Justia, there were about 2,800 patent cases filed nationally in 2007. The busiest jurisidictions are located in California (532 patent cases in 2007) and Texas (456 patent cases in 2007). Other jursidictions with busy patent dockets in 2007 included New Jersey (197); Illinois (157), and New York (164). Regionally, more patent cases were filed in Washington in 2007 than in Oregon (23) or Idaho (6).

While Wisconsin (specifically, the Western District in Madison) received a reputation in 2007 as a patent "rocket docket" jurisdiction, the entire state saw just 39 patent cases filed in 2007.

Here is a list of all patent cases filed in Washington in 2007 naming the parties, the assigned judge, a brief statement of the current status of each case (as of mid December 2007), and the patent-in-suit.

Laughing Rabbit Inc. v. John Wilson et. al.
December 28, 2007
Martinez
No Answer

National Products Inc v. Gamber-Johnson LLC
December 11, 2007
Jones
No Answer
7298611 Portable Device Docking Station

Aerotel Ltd et al v. T-Mobile USA Inc.
December 6, 2007
Robart
No Answer
4706275; Telephone System

F5 Networks Inc v. A 10 Networks Inc
December 4, 2007
Lasnik
No Answer
6473802 Method and System, for Storing Load Balancing Information with an HTTP Cookie

Fluke Corporation v. Ratner
December 3, 2007
Donohue
No Answer
D554,152; Ergonomic Pressure Calibration Pump


Plant 21 LLC v. Cascade Greenhouse et al
November 19, 2007
Bryan, reassigned to Settle 11/27/2007
No Answer
PP14852; PP13545; Plant Patents

Berg Companies Inc v. Basic Concepts Inc et al
November 19, 2007
Shea
No Answer
5316175 Foldable Spill Collector Container; 7168588 Multi Section Containment; 6880720 Portable Containment


F5 Networks Inc v. Coyote Point Systems Inc
November 13, 2007
Pechman
No Answer
6473802 Method and Syste, for Storing Load Balancing Information with an HTTP Cookie

BooginHead LLC v. Twin Beginnings LLC
November 13, 2007
Theiler
JSR due 1/14/2008
6978918 Teather for Objects Such as Infant Drinking Device

Teragren LLC v. Smith & Fong Company
November 5, 2007
Leighton
JSR due 2/6/2008
5543197 Parallel Randomly Stranded Laminated Bamboo Boards and Beams

Gebr Tigges GMBH & Co KG et al v. EYS Metal Sanayi Ve Ticaret LTD. STI et al
October 12, 2007
Lasnik
Answer filed, JSR filed 12/11/2007
5009795 Process for the Dewatering of Solids Suspended in Water and Screw Press Separator Therefor

Flexiworld Technologies Inc v. Skype Inc
October 12, 2007
Leighton, reassigned to Settle on 10/16/2007
JSR due 1/14/2008
7099304 Apparatus, Methods and Systems for Anonymous Communication.

Nelson v. K2 Inc et al
October 11, 2007
Lasnik
No Answer Filed
5603522; Wide Short Ski

Mukai v. AG Design & Associates LLC
October 11, 2007
Donohue, reassigned to Pechman
2 day bench trial set for 11/10/2008
7118245 Lantern


Canon USA Inc et al v. Screentone Systems Corporation et al
October 1, 2007
Martinez, reassigned to Jones
Motion to stay, transfer or dismiss pending (noted 12/21/2007) Motion before MDL Panel filed 12/27
5166809 Computer Printer Technology

ShareBuilder Corporation et al v. FOLIOfn Investments Inc
September 20, 2007 (DJ)
Martinez
Rule 41 Dismissal on 11/19/2007
7110971; 6996539; 6601044; 7117176; Online Brokerage

Simulab Corporation v. Synbone AG
September 12, 2007
Zilly
Answer filed 12/07/2007
6780016; Human Surgical Trainer and Methods for Training

Tien Hsin Industries Co Ltd et al v. Cane Creek Cycling Components et al
August 15, 2007
Zilly
Motion to Dismiss for Lack of Personal Jurisdiction Denied on 11/09/2007; Motion to Transfer pending (noted 12/7/2007)
5095770; Steering Assembly for Wheeled Vehicle

Scolr Pharma Inc v. Nutra Manufacturing Inc et al
July 30, 2007
Zilly
Rule 41 Dismissal; 9/28/2007
6090411; Monolithic Tablet for Controlling Drug Release; 6337091; Matrix for Contolled Delivery of highly Soluble Pharmaceutical Agents


Campbell Pet Company v. Miale et ala
July 25, 2007
Leighton
Order Dismissing case for lack of Personal Jurisdiction entered 11/02/2007; Notice of Appeal filed; 11/15/2007
6199508; 6230662; Pet Stretcher


Unigen Pharmaceuticals Inc v. Target Corporation
July 16, 2007
Bryan, transferred to Lasnik, reassigned to Jones
JSR Entered 10/17/2007
7,108,868; Isolation of Dual Cox-2 and 5-lipoxygenase; 7,192,611, Identification of Free-B-Ring Flavonoids as Potent Cox-2 Inhibitors


Q13 Inc et al v. Eveready Industrial Services Corp
July 13, 2007 (DJ)
Lasnik
Motion for staged discovery pending
6,318,194 Inspection of Tubes Conduits Pipelines


Prokop Labs LLC v. Staples Inc et al
July 13, 2007
Pechman
JSR due 1/10/2008
5,566,913 Wrist Apparatus


Proven Winners North America LLC v. Cascade Greenhouse et al
July 5, 2007 (transferred from MD Florida)
Coughenour, reassigned to Burgess 7/26/2007
Nothing since transfer
PP11,835; PP13,545; PP13,510, PP15,607; PP14,037: PP13,887;
Plant Variety

Joescan Inc v. LMI Technologies Inc
July 5, 2007
Bryan
Preliminary Injunction Denied on 9/5/2007; Jurisdiction challenged, and motion denied on 9/05/2007 Trial set 11/6/2008
5734172; 5854491; 5,670,787; Method and Apparatus for Electro Optically Determining the Dimensions Location and Altitute of Objects

Frontier Paper and Packaging Inc v. Washington Packaging Supply Inc
July 2, 2007 (transferred from SD of Indiana)
Zilly
JSR filed 12/14/2007; Motion for Summary Judgment Pending, noted 9/7/2007
5,820,268; 6,007,467; 7,021,524;6,080,096 Methods and Apparatus for Packaging Parishable Goods

Alliance Packaging LLC v. 1-800-Flowers.com
June 28, 2007
Theiler
Proof of service filed 11/05/2007
7,219,797 Box with Insert that Extends From A Side and That Divides the Box Into Compartments and Methods for Forming and Using

Fascinations Toys & Gifts Inc v. Plant Cell Technology Inc
June 25, 2007 (DJ)
Coughenour, reassigned to Pechman on 8/01/2007
Stip. and Order dismissing with prejudice 12/11/2007
5,803,014


Precor Incorporated et al v. Smooth Fitness et al
June 21, 2007
Donohue
Answer filed 11/28/2007
5,383,829 Stationary Exercise Device

InstantService.com Inc v. Rood et al
June 12, 2007
Robart
Answer Filed 12/12/2007
6,915,336, Real Time Internet Communication System

Unigen Pharmaceuticals Inc v. Colgate-Palmolive Company
June 8, 2007(removed fromKCSC)
Pechman, reassigned to Jones
Remanded to State Court, 9/21/2007
Disputed Ownership/inventorship under 256, Patent not yet issued

High Maintenance Bitch LLC v. Uptown Dog Club Inc
June 8, 2007
Coughenour, reassigned to lasnick, reassigned to Zilly
Dismissed for lack of Personal Jurisdiction, 10/17/2007
D475,163
D475,162
Dog Collar

High Maintenance Bitch LLC v. B A Barker Inc
June 8, 2007
Zilly
Stip and Order to Dismiss With Prejudice
D475,163 D468,491
Dog Collar

High Maintenance Bitch LLC v. Innovative Spotlight Inc
June 8, 2007
Coughenour
Rule 41 dismissal.
D475,162 Dog Collar

CRS LLC v. IGN Entertainment Inc
June 7, 2007
Zilly
Complaint amended 7/9/2007; Motion Partial SJ Invalidity, pending. Noted 12/21/2007
6,073,124 Method and System for Securely Incorporating Electronic Information Into Online Purchasing Application

Precor Incorporated et al v. Diamondback Fitness Inc
June 5, 2007
Theiler, reassigned to Martinez, Reassigned to Jones
Answer due
5,383,829 Stationary Exercise Device


WizKids Inc v. Wizards of the Coast Inc
May 25, 2007 (DJ)
Pechman
Complaint Amended 7/03/2007; Motion for Leave to File Motion For SJ, pending, noted 10/29/2007 (attached M for SJ)
7,201,374 Method and Article of Manufacture for Collectible Game


Sunstream Corporation v. Reimann & Georger Corporation
May 23, 2007
Benton, reassigned to Robart 7/12/2007
Rule 41(a) Dismissal after Order to Show Cause
6,976,442 Variable Range Apparatus for Watercraft Lift

Home Debut Inc v. Justsnooping.com Inc
May 10, 2007 (transferred from ND Cal.)
Whaley
Motion for Protective Order Pending: noted 12/14/2007
Trial 9/29/2008
6,839,880 Electronic Property Viewing System

F & G Research Inc v. Microsoft Corporation
April 12, 2007
Theiler, reassoigned to Robart 4/18/2007, reassigned to Martinez
Case Consolidated with 07-524-RSM
5,313,229 Mouse and Method For Concurrent Cursor and Scrolling Position

A G Design & Associates LLC v. Trainman Lantern Company Inc et al
March 30, 2007
Burgess, reassigned to Settle, 7/31/2007, reassigned to Burgess 8/31/2007
Motion for Preliminary Injunction Granted: 7/3/2007; Notice of Appeal filed 7/24/2007; Case reopened 9/04/2007 Motion for Contempt Pending, noted 10/25/2007
7,118,245
Trainman’s Lantern

Unigen Pharmaceuticals Inc v. Walgreen Co
March 29, 2007
Lasnik, reassigned to Jones 11/29/2007
Motion PartialsSJ (invalidity) pending, Noted: 12/21/2007
Motion for Sanctions (Rule 11) Pending, Noted: 12/21/2007
7,108,868 Isolation of a Dual Cox-2 and 5-Lipoxygenase Inhibitor from Acacia

MSC International Inc et al v. Norpro Inc
March 23, 2007
Robart
Case dismissed w/o prejudice, Rule 41(a)
D421,908 Spout

DX/DY Voice Processing, Inc. v. Teligence Corporation et al
February 22, 2007
Shea
Motion to dismiss denied; Motion for leave to file amended complaint granted 8/28/2007; Trial: 12/1/2008
7,116,768 Collect Callback

Unigen Pharmaceuticals Inc v. Leiner Health Products Inc et al
February 7, 2007
Robart
Stip. and Order Dismissing Claims with Prejudice: 7/10/2007
7,108,868 Isolation of a Dual Cox-2 and 5-Lipoxygenase Inhibitor from Acacia

National Products Inc v. Vision Tech America Inc
February 5, 2007
Robart
Consent Judgment entered: 6/18/2007
6,666,420 Suction Cup Having Compact Axial Installation and Release Mechanism

Alliance Packaging LLC v. Smurfit-Stone Container Corporation et al
January 24, 2007
Pechman, reassigned to Zilly, 11/28/2007
Markman hearing: 2/7/2008; Trial: 7/28/2008; Motion to Exclude Expert Witness (noted 1/11/2008)
7,156,287 Container with Integrated Pour Spout


National Products Inc v. JVC Americas Corp et al
January 9, 2007
Martinez
Stip. and Order Dismissing Case with Prejudice August 21, 2007.
6,666,420 Suction Cup Having Compact Axial Installation and Release Mechanism


MIXXER Inc v. Mvisible Technologies Inc
January 5, 2007
Zilly
Stip. and Order Dismissing with prejudice, May 1, 2007.
7,113,981 Cellular Telephone Download Locker


RobartStanding%20OrderinPatentCase.pdf

Microsoft Lawyers Disqualified for Violations of Ethics Rules

This blog is beginning to morph into a Microsoft patent litigation blog. I apologize for that, but there is just too much to talk about when it comes to Microsoft and patent law. The latest news comes from the District of Delaware, where the Redmond-based software behemoth finds itself in an unusual role: patent infringement plaintiff. The Microsoft-owned patents-in-suit are 6421439, 6430289, 6263064, 6728357. The '439 patent is entitled "System and Method for User Affiliation in a Telephone Network." In the most basic summary, this technology combines telephone and internet technology to establish user lists for use in making rules for managing incoming phone calls, enhancing caller ID functions. I heard about this case from the very good Delaware IP Law Blog, where co-author, Chad Stover, reports about a recent Order granting Alcatel-Lucent's motion in part to sanction and disqualify certain Microsoft lawyers for violating state ethics rules relating to professional conduct. According to the Order, these lawyers purchased, on the open market, an Alcatel Communications System that contained certain features at issue in the patent litigation. The system was installed at the attorneys’ Washington D.C. offices, and one of the technicians working on the installation identified himself as an employee of Alcatel-Lucent, one of the originally-named defendants in the case. The employee helped install the system, trained the attorneys on how to use the system, and engaged in ongoing conversations with the attorneys about the administration, use, and configuration of the system. The Court noted that the employee was one of only a limited number of engineers at Alcatel with the experience and training to install the system. The Order concludes that this conduct violated Rule 4.2 which prohibits direct attorney communication with a party represented by counsel. The court finds that "[i]n the case of a corporation such as Alcatel, an employee is "represented" if, for example, his or her statement may bind the organization regarding the subject of the litigation, or where the employee is capable of making an admission on behalf of the corporation."

As a sanction, the Court ordered that the specific attorneys involved could not be involved in the litigation, and that the evidence gathered could not be used in the case, including the expert testimony from Microsoft's expert, because he apparently relied on the "fruits of [the lawyer's] conduct." The order is attached below.


MicrosoftRule4FRDQ.pdf

Does Microsoft innovate or imitate? Ask Bill Gates.

Todd Bishop of the Seattle PI writes a blog about Microsoft. In a recent post, he addresses Microsoft's rep as an imitator. Here is a quote from Bill Gates in response to this criticism:

"We can't change it. If you think we just imitate, then that's -- you just can't change it.

"Did we do personal computing? Who did that damn personal computing thing? When I bought that 8008 for $360 down ... what was that?

"Anyway, tablet computers, is there somebody else out there doing tablet computers? IPTV, is there somebody else out there doing -- by definition what we do is the baseline. Everything Microsoft does is the baseline, and what we don't do, that's what's innovative I guess. (Laughter.) And by that definition the other guys do all the innovative things.

"I remember Google invented Web search. No one did it before they did. It's very interesting how they did that. (Laughter.)

"In the computer industry the person who does something first and the person who does it successfully, they are rarely the same, but the memory is -- I mean, people think Apple Computer was an early personal computer company. Well, let's see, I had licensed 17 people to do personal computer basics before I did the Applesoft BASIC, before I went out with Steve Wozniak and did the version that worked with a cassette tape, because they didn't have the disk yet. But Apple invented personal computing.

"So, let history be rewritten at all times. But there's no way to get it straight, I guess. Go look at what Microsoft Research is doing, and then decide who are imitating and let me know."

Will Seattle Become a Favored Forum for Patent Litigation?

Ignoring patent reform politics for a moment, Seattle patent litigators should all support at least one aspect of the hotly contested Patent Reform Act of 2007--the venue provisions. Why, you ask? Because Seattle litigators representing local technology companies (or, Portland for some well known Microsoft litigators) will be able to defend cases closer to home, and the increase in patent litigation here will certainly benefit all Seattle patent litigators working on both sides of the "v."

Under the current rules, companies like Microsoft, Amazon, and Nintendo are regularly sued in placed like Beaumont, Texarkana, Marshall, and Lufkin, Texas. There is often one suit with multiple defendants. Just to put things into perspective, this post from Patent Troll Tracker explains that the number of defendants sued in the Eastern District of Texas in November 2007 was 244. That surpasses by far the number sued in Los Angeles, San Francisco/Silicon Valley, New York City, Chicago, Delaware, and New Jersey combined. In November 2007 the combined total for all those large cities was just 162.

The number for Seattle ... Are you ready ...? Are you sitting down ...? It's seven. Yes, just seven defendants sued for patent infringement in Seattle in November 2007. In fact, Seattle is not even on pace to break 50 patent cases total (not so sure on the total defendant count, but it is not likely to be more than 100. FYI, I'll be reporting on District patent litigation statistics in the first part of January 2008, comparing them to 2006, and Nationally for 2007).

This doesn't mean that companies and lawyers here aren't engaging in a lot of patent litigation--they are. Last month Amazon, Microsoft, Real Networks, and Nintendo were all targeted by patent infringement lawsuits, but it is just not happening here. Congress hopes to change all that.

If the proposed patent venue rules pass, the Western District of Washington will become a favored forum for patent infringement plaintiffs because many of their targets live here.

On July 17, 2007, House Report 1908 set forth some pretty radical changes to the current liberal venue provisions, aimed at keeping defendants from being sued in places like Marshall, Texas.

Under the current proposed bill, venue for a patent action is appropriate in only the following judicial districts: (1) the district where the defendant has its principal place of business or where it is incorporated; (2) for foreign corporations with a U.S. subsidiary, the district where the defendant’s primary U.S. subsidiary has its principal place of business or where it is incorporated; (3) The district where the defendant has committed a substantial portion of the acts of infringement and has a regular and established physical facility that the defendant controls and that constitutes a substantial portion of the defendant’s operations; (4) the district where the primary plaintiff resides, if the primary plaintiff in the action is an institution of higher education (as defined by 20 U.S.C. § 1001(a)); (5) the district where the plaintiff resides, if one of the following is true: (i) the plaintiff or a subsidiary of the plaintiff has an established physical facility in the district dedicated to research, development, or manufacturing that is operated by full-time employees of the plaintiff or such subsidiary; (ii) or the sole plaintiff in the action is an individual inventor who is a natural person and who qualifies, at the time the action is filed, as a micro entity under 35 U.S.C. § 124.

Even if venue in a particular district or division is appropriate in a patent case, a court may transfer the case to another district or division if the following is true: (i) it is a district or division where the defendant has substantial evidence or witnesses; and (ii) it is a district or division where venue would be appropriate under 28 U.S.C. § 1391, if transfer would be appropriate under 28 U.S.C. § 1404.

Finally, a party to a patent suit may not by “assignment, incorporation, or otherwise” manufacture venue in a “specific district court.”

On July 19, 2007, the Senate Judiciary Committee reported out S1145, which also limits a patentee’s choice of venue, although with a number of variations to HR1908. The Senate Bill (1) further limits venue for a case in the district where the primary plaintiff resides; (2) provides for transfer to districts in cases of hardship for a defendant with respect to substantial evidence of the plaintiff; and (3) interjects consideration of hardship to a plaintiff in determining whether transfer of a patent case is valid.

On Line Music Store Technology Targeted by Patent Licensing Company

Amazon joined Microsoft and RealNetworks in a fight for the right to maintain digital play lists. Two separate patent suits accuse about two-dozen technology giants, including Yahoo! and Motorola, of patent infringement. The plaintiff is technology licensing company Premier International Associates, LLC. Premier sued Apple Computer on these same patents last September, but that case has settled. The patents are U.S. Pat No. 6,243,725 and 6,763,345. I've attached them, along with the Amended complaint naming Amazon below.

premier%20amended%20complaint.pdf
US6243725.pdf
US6763345.pdf

Trial set for February in Microsoft/Dell/Gateway case against Alcatel-Lucent

Judge Marilyn L. Huff of the Southern District of California refused to stay an upcoming trial set for February 20, 2008. The case involved allegations of patent infringement made by Alcatel-Lucent against Microsoft, Gateway, and Dell. Plaintiff Alcatel-Lucent is represented by Kirkland & Ellis LLP, while Microsoft is represented by Fish and Richardson. Gateway is represented by Howery, Dewey & Lebouf and Setlzer Caplan McMahjon Vitek. Dell is represented by Arnold & PorterLLP. Now that is a lot of lawyers. Overall, I counted 56 separate attorney appearances in this case. Should make for an interesting trial.

The patents at issue all involve video coding technology as well as patents related to a form entry system, algorithms for gesture recognition and commands to select video display modes. They are U.S. Patent Numbers 4,958,226; 4,383,272; 4,763,356; 5,347,295; and 4,439,759.

Microsoft was successful in dismissing Alcatel's claims for willful infringement of these patents, relying on the new standard for willful infringement enunciated by the Federal Circuit in Seagate.

IP 360 reports that "Lucent, which merged with Alcatel in 2006, originally sued Gateway and Dell over 12 different patents in 2003, but Microsoft stepped into the case on their behalf to file a motion for declaratory action. Lucent claimed that many of the computers made by Gateway and Dell infringed on its patents by using Microsoft programs such as Outlook and Quicken, and by applying certain types of digital display and interfacing technologies."

I'm attaching the Judge's order granting Microsoft's motion for partial summary judgment on the issue of willfulness because I think it is a good example of the current application of the new Seagate standard.
AlcatelOrderMPSJNoWillful.htm

Microsoft and Nintendo Battle Game Controller Patents In ED of Texas

A recent claim construction ruling in a case involving both Nintendo and Microsoft set the stage for a Spring 2008 jury trial on a number of patents involving game controller technology owned by Plaintiff Anascape Ltd. Both Microsoft and Nintendo sought unsuccessfully to stay the entire litigation in view of an on-going reexamination of several patents-in-suit. Judge Ron Clark stayed the litigation as to some but not all of the patents. In his claims construction order, entered November 30, 2007, Judge Carter construed seven terms that relate to four patents, Patent Nos. 5,999,084, 6,102,802, 6,135,886, and 6,343,991. These patents all relate to the switches and buttons on controllers used for video games. The Order (link below PDF), awarded Anascape its definition for “pressure-sensitive variable conductance material,” finding that Microsoft's construction improperly tried to limit the definition of the disputed claim term by excluding a preferred embodiment of the term. He also agreed with Anascape's contention that no construction was necessary for terms related to individual button pressing. Anascape lost any literal infringement arguments concerning the terms “pressure-sensitive variable conductance material” and “means for creating an analog [output proportional to][signal representing] varying applied physical pressure.” According to Judge Carter, the jury will have to pass on these limitations under a theory of infringement by the Doctrine of Equivalents.

In large part, the claims construction order seemed to give Anascape what it wanted, however, Anascape just asked the Court to continue its trial date because of certain scheduling conflicts of its lead trial lawyers, McKool Smith.
AnscapeClaimsConstruction.pdf
AnscapevMSFTNoticeofClaimrejections.pdf
AnscapevMSFTPTOOrderReexam.htm
AnascapevMSFTNoticeofreexam.htm

Peter Sklar and Microsoft Resolve Patent Dispute

Individual patent holder Peter Sklar and Microsoft resolved their dispute over infringement allegations stemming from claim 5 of U.S. Patent Nos. 6,025,843 and in claims 11 and 19 in 6,243,094. The parties entered a stipulation dismissing all claims with prejudice. The case was pending in the ED of Texas, case No. 2:06-CV-7, before Judge Leonard Davis. In July, Judge Davis entered a claim construction ruling favorable to Sklar, which prompted a motion to reconsider by Microsoft, which was promptly denied. Those orders are attached below. From the looks of the case history and the claims construction ruling, one can speculate that some kind of settlement was reached. The claims at issue were drawn to user interfaces. From Judge Davis' claims construction order:

"Sklar co-developed an improved user interface for performing computer database searches
and filtering search results that resulted in U.S. Patent No. 5,790,121 (“the ‘121 patent”). The
improved user interface uses selective clustering of the items to be displayed. Selective clustering is a way for the user interface to group items that will not fit side-by-side in the display area due to crowding, while leaving ungrouped those items that can be displayed without interfering with one another."
SklarclaimconstructionOrder.pdfSklarreconsidDeniedOrder.pdf

Z4 files New Patent Infringement Suit Against Microsoft

After winning a huge victory againts Microsoft before the Federal Circuit Court of Appeals (I had reported the verdict was $160M here, this includes the $18M verdict against co-defendant Autodesk, Inc.), Plaintiff Z4 Technologies filed a new infringement lawsuit against Microsoft's Office 2007 and Vista products. The case is filed in The Eastern District of Texas on the same patents. According to Z4's Complaint, “In its Vista and Office 2007 products, Microsoft has made an insignificant change in Product Activation technology found to infringe in [the prior case against Microsoft].” After victory before the Federal Circuit it will be interesting to see where this case goes. According to an article in IP 360, damages have not been estimated and Microsoft denies that its Vista and Office 2007 Products violate the patents. The patents at issue are U.S. Patent Numbers 6,044,471 and 6,785,825. The ‘825 patent, issued in August 2004, is titled “Method for securing software to decrease software piracy” and deals with using an authorization code to enable software. The ‘471 patent, issued in March 2000, has a similar title, “Method and apparatus for securing software to reduce unauthorized use,” and relates to using a password or a series of passwords to operate software. Click here for a link to download the patents.

Patent CLE in Seattle, 1.5 Credits Approved

Just a reminder that my law firm, Darby & Darby PC, will be hosting a CLE on recent developments in US patent law, entitled "Staying Ahead of the Curve." It will begin promptly at 5:30 pm at our Seattle office, 1191 2nd Ave, 20th Floor. Approval for 1.5 CLE credits has been obtained for Washington lawyers. Please call or Email for more details.

In Defense of Software Patents

Software patents are under attack and have been for quite some time. The debate is most polarized between small software start-ups and large multi-national technology companies who rely on software either as a direct source of revenue or to increase profits in other ways. The momentum against patenting software is greatest in the open-source community. More and more politicians are engaging in the patent debate and surely will be asked to take a position one way or another on the issue of patenting software. Anyone working in technology has an opinion about whether software should be patented. Some Justices of the U.S. Supreme Court seem against patenting software. At February's oral argument in the ATT v. Microsoft case, Justices Breyer and Stevens raised the issue, which was merely collateral to the issues on review.

MR. OLSON [For Microsoft]: The '580 patent is a program, as I understand it, that's married to a computer, has to be married to a computer in order to be patented.
JUSTICE SCALIA: You can't patent, you know, on-off, on-off code in the abstract, can you?
MR. OLSON: That's correct, Justice Scalia.
JUSTICE SCALIA: There needs to be a device.
MR. OLSON: An idea or a principle, two plus two equals four can't be patented. It has to be put together with a machine and made into a usable device.

...

JUSTICE BREYER: I take it that we are operating under the assumption that software is patentable? We have never held that in this Court, have we?
MR. JOSEFFER: No, but . . . that's not relevant here . . .

...

JUSTICE STEVENS: Your time is up, but I want to ask you one yes or no question. In your view is software patentable?
MR. JOSEFFER: Standing alone in and of itself, no.

. . .

MR. WAXMAN [For AT&T]: The code is not patentable.

It appears to be only a matter of time before the Court enters the fray surrounding software patents. Last year, the Court granted certiorari in LabCorp v. Metabolite, a medical method case that many (myself included) saw as potentially damaging to the patentability of software. The petition in LabCorp was dismissed in response to numerous amicus briefs, including one I helped write on behalf of the Federal Circuit Bar Association. In short, many patent lawyers, legal scholars, and businesses thought LabCorp was an inappropriate case for Supreme Court jurisdiction. The Court should not have taken the case in the first place, so it was properly dismissed. The dismissal of the petition in LabCorp only swelled fear and anxiety among those who own or pursue patent protection for software. They know all to well what could happen if the Court decides to change the way patent law has viewed software over the last 25 years.

In a word, restriction to the scope of patentable subject matter in a way that would exclude software inventions as they are now and have been claimed for the last 25 years (in method steps, or tied to "systems" "articles of manufacture," such as "a computer readable medium") would be devastating. Devastating not just in terms of the financial loss that would be suffered by those who own patented software, but also devastating to the economy which (despite statements to the contrary) depends on a strong patent system to provide incentives for innovation and adequate disclosure of otherwise secret inventions.

The arguments for restricting the scope of patentable subject matter (to exclude software)simply do not hold water. First, it should be recognized that only Congress (not the Courts) have Constitutional authority to define the scope of patentable subject matter. They did so in 1952 by enacting (among other provisions) 35 USC Section 101, which states in relevant part that one who "invents or discovers any new and useful process, machine, manufacture, or composition of matter . . . may obtain a patent, subject to the conditions and requirements of this title." I emphasize the last part of the statute because this is the language most commonly overlooked by those who argue against software as a class of invention subject to protection by patent law. It is not enough for the invention to be "new and useful," it must also be nonobvious and adequately disclosed. What makes some software patentable is not the mere fact that it exists in a "machine" "method" or "article of manufacture," but because (in some cases) it is sufficiently nonobvious and adequately described and disclosed in a patent to merit protection. I will readily admit that many software patents do not meet the tests for obviousness and disclosure. The patent office also is responding to this problem and has initiated a number of pilot projects aimed at improving the quality of examination. Anyone who currently prosecutes software patents can confirm that the allowance rate these days is very very low. I think it is somewhere under 10%.

In short, the way to get rid of bad software patents is not to scrap all of them, but to be more selective and to endeavor to increase the quality of examination. Getting rid of software patents all together would have many deleterious effects on the economy including encouraging parties to seek protection under trade secret law and deprive the public with important knowledge concerning advances in software. Also, there is no easy way to interpret 35 USC Section 101 (without a Congressional amendment) in a way that would not spill over into other technologies, and therefore harm (or eliminate all together) the important incentives for innovation in existing or emerging technologies. In order to function, the incentives created by the patent system must be broadly available to all sectors of technology, lest they exclude some unforeseen or emerging advancement in science or engineering.