ZymoGenetics Settles Patent Spat with Bristol-Myers

This week in Seattle Biotech news, it was the best of times and the worst of times for ZymoGenetics (ZGEN). On Thursday last week, filings from the SEC reported that it had reached a settlement with Bristol-Myers Squibb Co. over a patent infringement suit concerning the rheumatoid arthritis drug, Orencia. That suit was set to begin trial later this week. Under the terms of the settlement, Bristol-Myers will receive a nonexclusive, worldwide license to patents owned by Zymo for fusion proteins in exchange for a lump sum of $21 million. The lawsuit will be terminated. The patents-in-suit are 5,843,725, issued in 1998 and titled “Methods for producing secreted receptor analogs and biologically active dimerized polypeptide fusions,” and 6,018,026, issued in 2000 and titled “Biologically active dimerized and multimerized polypeptide fusions.”

The afterglow from last week's settlement dimmed quickly for the Seattle biotech on news that one of its drugs targeted at kidney disease had been discontinued. Zymo said in a statement that “the observation of an increased risk for severe infection led to the discontinuation.” Shares tumbled more than 28 percent Monday, and fell further today, to $2.69 per share.

K2 Wins Partial Summary Judgment in Wide Short Ski Case

Inventor Paul Nelson sued K2 for infringement of his US Patent No. 5,603,522 covering a "Wide Short Ski." The specification was drawn to a shaped ski having a range of dimensions in length, side-cut radius, shovel width, and tail width. The claims at issue (added in a CIP) were for much narrower ranges than what was disclosed in the parent application's specification. K2 moved for partial summary judgment, arguing that these claims (the ones added in a CIP) were not supported by the parent application, an argument setting up a motion for summary judgment of invalidity under 35 USC Section 102, because the claims at issue were not entitled to priority filing for failure to satisfy the written description requirement.

From Judge Lasnik's order:

The narrowing of the length and width ranges is significant: more than half of the combinations described in the parent application are excluded from the claimed invention. It is not clear how one skilled in the art of ski design could identify the measurements that were of special interest to the inventor. The 1992 application does not disclose the precise ranges later claimed, nor does it contain descriptive terms that would lead to the claimed ranges.

In a footnote, the Order states that the written description bar has potentially been raised "to a height that may be insurmountable for many inventors." In support of this gloomy outlook for the future, Judge Lasnik cites Judge Learned Hand's decision in Eng'g Dev. Labs v. Radio Corp. of Am., 153 F.2d 523, 526-27 (2nd Cir. 1946), where the distinguished jurist said that meeting the written description requirement was "an impossible task" encouraging "that surfeit of verbiage [in patent claims] which has for long been the curse of patent practice and has done much to discredit it."

Let's see what happens next. Perhaps an appeal? Settlement? My personal view is that the viability of this decision on appeal depends greatly on the make up of the reviewing panel at the CAFC. Decisions on the written description requirement from the CAFC have been rightly criticized as "opaque to the point of obscuring other areas of . . . [patent] law."


K2%20Nelson%20Order%20Granting%20MPSJ.pdf

Seattle Patent Litigation Update: September 2008

Three new patent cases were filed in Seattle last month, all three assigned to Judge Pechman.

September 26, 2008
Amphipod Inc v. Penguin Brands Inc
Pechman

September 16, 2008
Majestec 125 LLC v. Maritime Fabrications Inc
Pechman

September 12, 2008
Wistron Corporation v. Samsung Electronics Co Ltd et al
Pechman

Perhaps the most interesting of the three is the Wistron case against Samsung, where Taiwanese interests are at odds with with Korean interests over the right to sell and import certain PCs, laptops, notebooks, and other computing devices in the U.S.

Established in 2001, Wistron's product development focuses on information communication technology, including notebook and desktop systems that it supplies to other companies to sell under their own brand name. Some well known brands incorporating Wistron's products include Microsoft, HP, Dell, and Lenovo. Samsung is a well know manufacturer and seller of consumer electronic equipment ranging from DVD players to cell phones. According to the complaint, in 2007 Samsung had $7.4 Billion in income from nearly $100 Billion in sales.

There are three patents at issue in the Wistron case, all relating to Power Management, US Patent Nos. 5,410,713, 5,870,613, and 5,903,765. As a side issue, all three patents were once assigned to Smith Corona/Acer of New Canaan Conn., a company that, according to Wistron's website, was a predecessor in interest to Wistron (at least Acer Inc. was). USPTO assignment records show that these patents were assigned to Acer America Corportation in December 1995, and then to Wistron Corporation in July 2008. As yet another side issue, Samsung and Wistron are also parties to another lawsuit in the ND of California over US Patent Nos. 5,333,273, 5625,275, and 6,523,100, owned by Samsung. In the California case, Wistron is a DJ plaintiff. The California patents relate to ISA computer architecture, such as the intel x86 type microprocessor, in particular so-called "hot keys" that control "terminate and stay resident" (TSR) programs. Samsung has already successfully litigated the '273 patent in a case against Quanta, 3:00-CV-04524 VRW.

In other Seattle patent litigation news, Amazon was sued over home automation systems last month. It and 11 other companies were alleged to infringe US Patent Nos 6,891,838 and 7,103,511, patents covering systems that automatically adjust things like temperature, lights, security, entertainment, and plant watering, among other systems that use energy in your home. The plaintiff is SIPCO LLC, an entity that was formerly known as "Statsignal IPC LLC" according to filings before the Georgia Secretary of State's office. The patents in suit have changed hands six times since 2000, including a sojourn with Hunt Technologies, a company that was later absorbed by Landis+Gyr. SIPCO gained ownership of the patents by way of a judicial decree in July 2007, handed down by the U.S.D.C. in the Northern District of Georgia. I'm sure there is a story there, but I'm too busy to chase it down. SIPCO is related in some way to IP Co. LLC, they share the similar corporate addresses, names, and agents, according to Georgia Records (IP Co. used to be known as "Statsignal Metering Company, LLC."). IP Co. and SIPCO were plaintiffs in a case against Cellnet Technologies, Inc. and Hunt Technologies, LLC, (among others) filed in 2006 in Georgia.

Microsoft was also busy last month. Its summary judgment victory over Uniloc, Inc. was remanded by the CAFC for trial after en banc review was denied (08-1121). The Uniloc patent at issue is US No. 5,490,216 covering certain computer security technology. Microsoft was also sued by Stragent LLC (again) in connection with a patent for voice activation technology. The patent-in-suit is U.S. No. 7,424,431. Microsoft's other dispute with Stragent LLC is over U.S. 6,665,722. In that case, Microsoft is joined by Defendants, Nokia, Yahoo!, Google, Motorola, Palm, Sony Ericsson Mobile, and AT and T. The '722 patent owned by Stragent is alleged to cover certain mobile messaging systems.

Stragent is a patent holding company organized by Kevin Zilka of Zilka-Kotab P.C. Stragent acquired the '722 patent from BBN Technologies in 2007 and it acquired the '431 patent from Voice Demand, Inc. in the same year.

Guest Column on Extraterritoriality

This is the first in what I hope to be many guest columns. If you or anyone you know would like to post an article on WApatents.com, just send it to me for review. I reserve the right not to publish or to edit any articles you send me. Articles posted do not necessarily reflect my own views on the law; so if you disagree with something in a guest column, post a comment and contact the author.

This article is from Paul Beattie, an experienced Seattle patent litigator. What follows is a brief snippet from Paul's article. The full article is attached.

Extraterritorial Abdication: Extraterritorial Infringement Outpaces Extraterritorial Protection

By Paul Beattie[1]

The past twenty years have seen a progressive shift in economic activity, particularly manufacturing, away from the United States, Japan, and Europe to developing countries.[2] More and more inventions conceived in the “West” are being exploited in developing countries, often with no royalty payments to the inventors or their assignees. We are living through a colossal transfer of knowledge and invention from the developed to the developing world – although this transfer is seldom remarked upon.[3] U.S. patent law has been slow to recognize these realities and to extend U.S. patent protection to “infringing” activities abroad, perhaps out of sympathy for the developing world and out of fear that other countries will follow suit and attempt to enforce their laws here. Politics aside, U.S. patent law has failed to adapt to a world in which more and more infringement takes place overseas.

U.S. patent law has traditionally not been given so-called “extraterritorial” effect. As the Supreme Court stated in the recent case of Microsoft Corp. v. AT&T Corp., “[i]t is the general rule under United States patent law that no infringement occurs when a patented product is made and sold in another country.”[4] This is reflected in the main infringement provision in the U.S. patent statute, which states that “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention . . . infringes the patent.”[5] U.S. patent law thus generally targets infringing activities within the United States, with minor exceptions.

Footnotes:

[1] Paul H. Beattie is a shareholder in the Seattle Office of Schwabe, Williamson & Wyatt. He can be reached at pbeattie@schwabe.com or at (206) 407-1566.
[2] Pete Engardio et al., The New Global Job Shift, Business Week Online, http://www.businessweek.com/%20magazine/content/03_05/b3818001.htm (Feb. 3, 2003); Josh Bivens, Economic Policy Institute Briefing Paper, Trade Deficits and Manufacturing Job Loss: Correlation and Causality.
[3] See, e.g., The Sydney Morning Herald, Chinese Accused of Stealing American Technology, http://www.smh.com.articles/2007/11/16/1194766968231.html.; Jacob Goldstein, Brazil Breaks Merck’s Patent on Aids Drug, Wall Street Journal.com, http://blogs.wsj.com/health/2007/05/04/brazil-breaks-mercks-patent-on-aids-drug/ (May 4, 2007); Mary Kopczynski, Robin Hood versus the Bullies: Software Piracy and Developing Countries, Rutgers Comp. & Tech. L. J. (Summer, 2007).
[4] Microsoft Corp. v. AT&T Corp., 127 S. Ct. 1746, 1750 (2007).
[5] 35 U.S.C. § 271(a) (emphasis added).

Extraterritorial%20Abdication1.doc

Widevine Successfully Opposes Transfer Motion: Congestion in ED of Texas Cited

In a dispute between two competitors in the market for certain video encryption technology, Widevine v. Verimatrix (WDWA C08-1039 JLR), Judge Robart denied Verimatrix's motion to transfer the case to the Eastern District of Texas, Marshall Division, where Judge Ward is already prosiding over a case involving the same companies and a separate patent. Citing congestion in the ED of Texas as a legitimate reason for bringing suit in Seattle, Judge Robart declined to transfer the case.

From Judge Robart's Order:

A court will give the plaintiff’s choice of forum preference “to the extent that it was motivated by legitimate reasons, including the plaintiff's convenience.” Iragorri v. United Tech. Corp., 274 F.3d 65, 73 (2d Cir. 2001). Widevine explained that it chose the Western District of Washington because it is headquartered in the district and the docket calender is less congested here than in the Eastern District of Texas. (Resp. at 1, 3.) Given that it had legitimate reasons to file in Washington, Widevine’s choice of forum weighs in favor of maintaining the case in this district.
WVtransfer.pdf