Judge Jones Accepts Claim Interpretation "Proffer" on Motion for Summary Judgment

Judge Jones is one of our district's newest federal judges. In a recent order in Unigen Pharmaceuticals Inc. v. Walgreen Company (07-047-RAJ), he offers some new ideas for dealing with early summary judgment motions in a patent case, i.e., summary judgment motions filed before any substantive claim construction briefing. This dispute involves U.S. Patent No. 7,192,611, a patent for the "Identification of Free-B-Ring Flavanoids as Potent Cox-2 Inhibitors."

Walgreens alleges that the patent is invalid in view of United States Patent No. 5,650,433 and they filed a summary judgment motion asking the judge to dispense with complex claim interpretation and invalidate the patent under section 102(b). After noting that "determining the validity of a patent before construing its claims is improper" (citing Akamai Techs., Inc. v. Cable & Wireless Internet Servs., Inc., Inc., 344 F.3d 1186, 1195 n.4 (Fed Cir. 2003)), Judge Jones stated that "the apparent similarity between the ‘433 Patent and the patent-in-suit suggests that the court may more efficiently resolve this dispute by considering Walgreen’s motion in advance of formal claim construction." To this end, Judge Jones ordered plaintiff "to submit, within two weeks of this order, a proposed claim construction for each of the asserted claims of the patent-in-suit. Unigen should not offer argument in favor [of] its proposed claim construction, but should ensure that it submits sufficient explanation to permit the court to understand its proposed claim construction. Unigen will not be bound by its proposed claim construction except in the court’s consideration of the motions before it. Unigen may advance a different interpretation of its claims during the formal claim construction in this litigation. The
only requirement the court places upon the claim construction that Unigen submits in response to this order is that it be in good faith, consistent with the requirements of Fed. R. Civ. P. 11. The purpose of this order is to permit Unigen to propose a favorable, good-faith claim construction to avoid any prejudice that might otherwise arise from considering an invalidity motion in advance of formal claim construction."

Essentially, the order asks for a "proffer" from plaintiff concerning a "favorable, good-faith claim construction." Presumably, if Plaintiffs can offer a construction in good faith that avoids anticipation, Judge Jones will deny the motion.

Unigen asked for reconsideration of this order, arguing that the court should just delay consideration of Walgreen's motion until such time that it has an opportunity to construe the claims. Judge Jones denied this motion, stating "The court’s admonition that Plaintiff should not offer argument in support of its proposed claim construction is not a limitation on Plaintiff’s ability to advance its cause. Plaintiff should not offer argument in support of its proposed claim instruction because the court will accept Plaintiff’s proposed claim construction for purposes of resolving the summary judgment motion, and thus argument is not necessary. As stated in the prior order, the court encourages Plaintiff to provide an explanation of its proposed claim construction that will permit the court to apply that claim construction in resolving the summary judgment motion. That explanation should be sufficient to permit the court to consider the patent-in-suit through the eyes of a person of ordinary skill in the art."

This new approach to resolving early summary judgment motions raises some interesting issues. If plaintiff is unable to proffer a construction in good faith that avoids anticipation, is it proper then to dismiss its claims without formal claim construction, a result that seems to conflict with the Federal Circuit's rule in Akamai Techs., 344 F.3d at 1195 n.4? Further, what credit does this process provide to the rule that claims construction is (at least for the moment) a question of law for the Court, subject to de novo review? Is it ever proper procedure for the court to dispense with formal claim construction in order to resolve a properly filed motion for summary judgment in patent case? All open questions.

JudgeJonesORderRenotingMotionSJ.pdf

JudgeJonesMreconsider.pdf

Judge%20JonesSJ.pdf

Seattle Patent Litigation News

Note to self: don't file an early summary judgment motion in Judge Pechman's court where said motion implicates claim construction issues. In an earlier post here, I discussed Wizkids Inc. v. Wizards of the Coast, a dispute involving US Patent No. 7,201,374 for a Method and Article of Manufacture for a Collectible Game. The DJ Plaintiff, Wizkids, Inc., had filed a motion for leave of court to have Judge Pechman hear early summary judgment arguments of invalidity. Judge Pechman denied the motion, citing the fact that it implicated claims construction issues, and that those issues should be briefed and heard in a proper Markman hearing. Recently, Wizkids filed another early motion for summary judgment on an issue concerning the scope of potential damages. In an interesting twist, Judge Pechman ordered the parties to use the joint brief submission procedures of Local Rule 37 to brief arguments on Wizkids latest motion for summary judgment. Under that rule, the motion would be noted for consideration on the day it is filed, and the briefing would take about a week's time total. Here is her order on Wizkids' latest motion for summary judgment. PEchmanoerderjointSJsubmission.pdf Also, it should be noted that Judge Pechman now has a standing order for all patent cases, where she makes it quite clear that she will not entertain any dispositive motion implicating claims construction issues until the claims have been interpreted under Markman. Pechman%27sStanding%20OrderPatentCases.pdf

In other news, the dispute between CRS, LLC and IGN Entertainment, Inc, involving US Patent No. 6,073,124 for a Method and System for Securely incorporating Electronic Information Into Online Purchasing Application has settled. Details of the settlement remain confidential. Judge Zilly's order dismissing the case is attached. CRSORderofDismissal.pdf

Enforcing IP Rights in China: It's Not as Hard as You Think

Peter Zura's 271 Patent Blog posted recently about a report from Joff Wild, editor of Intellectual Asset Magazine, author of the IAM Blog, and contributor to Thomson's Knowledge Newsletter. Joff's report is entitled "Patent Focus Report for 2008," and it looks at the patent activity for China, Europe, Japan, India and the U.S., and provides some interesting findings. Of particular interest to this blog are the numbers for China. Washington State is one of China's largest and fastest growing trading partners. In 2004, total trade between Washington state and China was in excess of $20 Billion (couldn't find more recent numbers, so if you know them, please post them in the comments). Businesses in Washington State will be pleased to read the findings from Joff's report concerning IP enforcement in China. Who would have thought that a patent infringement plaintiff has a better chance at winning a case in Shanghai than Marshall, Texas!

From the Report's section on China:

"During 2007, SIPO received 694,153 patent applications covering three types of patent: invention, utility and design. This number may at first sight seem huge, but it does not tell the full story. The overwhelming number of applications — almost 450,000 — was for utility and design patents, which are not subject to substantive examination. Only invention patents receive full scrutiny and there were 245,161 of these submitted during 2007.
What is interesting to note, however, is the increasing proportion of invention patent applications coming from within China. In 2006, they represented just over 58 per cent of the total number of applications to SIPO, in 2007 this increased to almost 63 per cent. This increase was despite an increasing number of applications from abroad: 92,107 compared to 88,172 in 2006.[A] study of reported decisions in IP cases during 2007 suggested that if rights owners appear before the Chinese courts they have a 75 per cent chance of having the eventual decision go in their favour. This is the case whether the plaintiff is Chinese or from abroad. During 2006, there were more patent cases filed in China than in any other country, and while 98 per cent of these involved only Chinese companies, in the two per cent featuring a plaintiff from outside the country, the foreign entity ended up victorious 90 per cent of the time."

Judge Settle (Tacoma) Stays Patent Case Pending Reexamination

U.S. District Court Judge, Benjamin Settle (nominated by George W. Bush on January 9, 2007, to a seat vacated by Franklin D. Burgess; Confirmed by the Senate on June 28, 2007, and received commission on July 2, 2007) recently stayed a dispute involving U.S. Patent Nos. 5,993,303 and 6,250,998, patents for hand-held cutting tools.

The dispute is between Pactool International, Ltd and DeWalt Industrial Tool Co., as well as Kett Tool Company (Case No. 06-5367). Judge Settle granted Kett Tool Company's motion to stay in view of a request for reexamination that was filed on December 20, 2007. While the PTO has not yet granted Kett's request for reexamination, Judge Settle stayed the case anyway, calling for a stay until May 1, 2008, and permitting the parties to file a motion to lift the stay in the event the PTO denies Kett's request for reexamination.
PactoolOrderStay.pdf

Business Method Patents To Be Reviewed En Banc

The Federal Circuit decided to review the patentability of business methods en banc in the case In re Bilski. The en banc order presents the following 5 questions:

1. Whether claim 1 of the 08/833,892 patent application claims patent-eligible subject matter under 35 U.S.C. § 101?

2. What standard should govern in determining whether a process is patent-eligible subject matter under section 101?

3. Whether the claimed subject matter is not patent-eligible because it constitutes an abstract idea or mental process; when does a claim that contains both mental and physical steps create patent-eligible subject matter?

4. Whether a method or process must result in a physical transformation of an article or be tied to a machine to be patent-eligible subject matter under section 101?

5. Whether it is appropriate to reconsider State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352 (Fed. Cir. 1999), in this case and, if so, whether those cases should be overruled in any respect?

For more coverage of this developing story, see Dennis Crouch's Patently-O post here, and Peter Zura's 271 blog post here.

I've also posted on the topic of patentable subject matter here, and was counsel of record for the Federal Circuit Bar Association in that group's amicus brief to the U.S. Supreme Court in Labcorp v. Metabolite Labs. We argued for the petition for certiorari to be dismissed as improvidently granted, and that is what eventually happened in that case. (See this link for some good coverage of the Labcorp case from UW Law School's CASRIP ("Center for Advanced Study and Research on Intellectual Property") Newletter.)

I think this decision by the Federal Circuit, i.e. to take up the issue of patentable subject matter en banc, could potentially eliminate (or delay), any grant of certiorari by the Supreme Court on this topic. Some speculate that the Supreme Court will grant certiorari in In re Nuijten, another section 101 case where the CAFC--over the dissents of Judges Linn, Newman, and Rader--declined to consider patentable subject matter en banc. The CAFC's timing here may fortuitously avoid the Supreme Court stepping in to re-write the law of patentable subject matter in connection with In re Nuijten. Based on the comments of Justices Breyer and Stevens at the February 2007 oral argument in the ATT v. Microsoft case, at least these Justices seem ready and willing to take a hard new look at the scope of patentable subject matter under section 101. The questions raised by the CAFC's order in In re Bilski could have easily come from Justices Stevens or Breyer, so it will be interesting to see how this issue develops and whether the CAFC can assuage concerns voiced by Justices Breyer and Stevens.

Reports by Special Master in Veritas v. Microsoft Patent Litigation May Narrow Issues for May 2008 Trial

Reports by special master Gale R. Peterson were recently unsealed by the Court in the aging dispute between Microsoft and Veritas Software (now owned by Symantec Corp.) concerning the parties' decade-old joint development of storage management software. The ill-fated business relationship between Microsoft and Veritas began in 1996, when they entered into a development and licensing agreement "whereby Veritas promised to provide Microsoft with the source code for its volume management technology, called Logical Disk Manager (LDM), to be embedded in the next version of the Windows NT operating system, Windows NT 5.0, later renamed Windows 2000." According to a recent order in the case "Veritas’ express objective in entering the Agreement with Microsoft was 'to build a Windows NT Add-on products business[.]'" In other words, "Veritas planned to develop and market to Windows customers certain volume management-related features, or increased capabilities, that were not included in the base LDM to be embedded in Windows 2000."

Well, things apparently did not go as planned, and suit was filed by Veritas in May 2006 alleging breach of the joint development agreement by theft of confidential information, and infringement of U.S. Patent No. 5,469,573. Microsoft fired back in the form of counterclaims, seeking invalidity of the '573 patent, and its own claims for breach of the agreement, as well as infringement of its own patent, U.S Patent No. 5,588,147.



Trial is set for May 2008, and both parties filed for Summary Judgment on a variety of contract and patent claims. The special master's reports (more than 300 pages in length, and in several parts, attached below) recommends that the Court grant Microsoft's motion for invalidity of the '573 patent, and that there is no evidence of direct infringement of that patent by Microsoft's customers. The reports also recommend that the court enter summary judgment of no infringement by Veritas of Microsoft's '147 patent as to certain claims and that certain other claims are invalid for anticipation.



Motions for summary judgment on the contract claims were also pending and recently decided by Judge Coughenhour. In two separate orders, Judge Coughenhour held that Veritas' contract claims survive summary judgment, but that damages will be capped at $4,000,000. Microsoft's claims for breach were dismissed in view of a forum selection clause in the agreement.




In summary, this looks to be a pretty big victory for Microsoft, having damages on the contract claims capped and what looks like a pretty strong recommendation from the special master that there should be no liability for patent infringement. Microsoft may lose its '147 patent to a ruling of invaldidity, but something tells me this won't hurt Microsoft too badly. Of course, the parties have an opportunity to object to the special master's report and recommendations. The Judge is in no way bound to agree with these findings. Realistically, I think the parties will have a hard time convincing the Court to make a ruling in conflict with the special master's recommendation.



As an aside, this is apparently not the first time the W.D. of Wash. has used Gale R. Peterson as a special master in a patent case. Mr. Peterson's bio states that he served as special master in a patent case, Precor v. Life Fitness (W.D. of Wash.), the majority of which was pending before Judge Coughenhour (95-cv-00066, 97-cv-00250, 94-cv-01586, 98-cv-00694).

VeritasReport%20by%20SepcialMaster.pdf
veristasreportbbyspecialmasterpart2.pdf
VertiasReportspecialmaster%20on%20invalidity573.pdf
veritasreportyspecialmasteron147claimpart1.pdf
vertiasReport%20by%20SepcialMaster147part2.pdf
VeritasOrderSealedMPSJ.pdf
veritasOrderonMPSJ.pdf

Amicus Briefs Filed in Egyptian Goddess v. Swisa

Amicus briefs in support of the respondent or neither party were filed earlier this week in the en banc case Egyptian Goddess v. Swisa. Calling this case "important" to the future of design patent law in the U.S. is probably a gross understatement. Here is a link to the en banc order. It could fundamentally change how design patent infringement and validity are considered, affecting wide sectors of American industry, from footwear to food. Here is a link to the AIPLA's original brief filed in support of the petition for rehearing. I was fortunate enough to have the opportunity to work with Kevin Kramer of Pillsbury Winthrop in connection with a brief we filed on behalf of the Federal Circuit bar Association.

At the bottom of this post is a link the the FCBA's brief, filed in support of neither party and arguing generally against the Panel Majority's "non-trivial advancement" test. The brief also argues for continued use of claims construction in design patent cases.

For some more information about this case, click here.

Amicus%20Brief%20of%20Federal%20Circuit%20Bar%20Association.pdf

Western District Sees Significant Uptick in Patent Cases Filed For January 2008

January started 2008 with a red-hot increase in the number of patent cases filed in the Western District. There were 10 patent cases filed last month in Washington State, 9 in the Western District. That's more than the combined total for the same month in 2007 (3 patent cases in Jan.), 2006 (2 patent cases in Jan.), and 2005 (3 patent cases in Jan). With 10 cases already in January of this year, patent filings so far equal about 20% of last years' total filing ... in one month! It's hard to make any predictions at this point, but if we keep it up at this rate, it will be a busy year. Here are the cases filed last month.

Zodiac of North America Inc et al v. 1181969 Ontario Limited et al (Co8-0157)(Martinez) U.S Patent No. 6,006,690 (Mixed-Hull inflatable Boat).

Laughing Rabbit Inc v. J&S Marketing LLC (C08-0123) (Lasnik) U.S. D375,372 (Pocket Flashlight).

Sterling International, Inc. v. Hiscox et al (ED of Wash.) (Co8-0022) (Shea) U.S. Patent No. 5,557,880 (Yellow Jacket Trap).

Airbiquity Inc v. AT&T Inc et al (C08-0094) U.S. Patents 6,681,121 (Circuitry for Activating a Modem in a Cellular Telephone); 7,206,305 (Software Code for Improved In-Band Signaling for Data Communications Over Digital Wireless Networks); 7,221,669 (Cellular Telephone having Improved In-band Signalling).

Cequint Inc v. Pint-Sized Apps (C08-0080) (Robart) U.S. Patent Nos. 7,200,212 and 6,353,664 (Telephonic Communications Products).

Cequint Inc v. Incipher Inc (C08-0081) (Zilly) U.S. Patent Nos. 7,200,212 and 6,353,664 (Telephonic Communications Products).

Trinity Glass International Inc v. ODL Incorporated (C08-05018) (Bryan) U.S. 5,636,484 (Hurricane Door).

Fascinations Toys & Gifts Inc v. Levitation Arts Inc et al (C08-0028) (Robart) U.S. Patent No. 5,168,183 (Levitation Devices)

Neometal WA Inc v. Industrial Strength Corporation (C08-05009) U.S. Patent. No. 6,167,725 (Threadless Jewelry Assembly).

Procyte Corporation v. Johnstone et al (08-0012) (Zilly) U.S. 6,262,105 (Method of Enhancing Hair Growth).