Court Refuses to Vacate Markman Ruling Following Settlement

In the case Unigen Pharmaceuticals v. Walgreen Co. (07-471 RAJ), which is actually a consolidation of three cases brought by plaintiff Unigen, asserting infringement of US Patent No. 7,192,611 (for more on the consolidation, click here), the parties recently settled and approached the court jointly to dismiss the case and to also vacate a prior claims construction ruling.

The claims of the '611 patent are directed to a method for treating osteoarthritis using what is known as a Free-B-Ring flavonoid, which includes baicalein. The three defendants are Walgreens, Target, and Perrigo Company of South Carolina Inc. On March 18, 2009, Judge Jones construed the claims of the '611 to require inter alia: "that the patient recognize that he has a 'COX-2 and 5-LO mediated inflammatory condition' and to take the claimed composition for treating that condition by direct inhibition of COX-2 and 5-LO." This effectively required that the "Host Must Intend to Take the Extracts to Treat a Condition as Described in the Preamble." In other words, just proving that the extracts were taken, and that they exhibited the function as claimed, was not enough to show direct infringement. The court further concluded that "each of the preambles of the disputed claims contains a limitation restricting the claimed method to enzyme inhibition of an enzyme mediated disease (e.g., osteoarthritis in ‘611 Claims 1 and 8), condition (e.g., inflammatory condition in ‘868 Claims 1 and 4), or physical limitation (e.g., limited physical function, flexibility, and mobility in ‘611 Claim 15)."

In his order refusing to vacate the Markman ruling, Judge Jones concluded as follows:

Despite begin unable to point out why vacatur would be valuable, the parties want it. It would be more accurate, of course, to say that Plaintiff wants it. No Defendant has any stake in the order being vacated, as they are no doubt shielded from future litigation over the patents-in-suit by virtue of their settlement with Plaintiff. There is something (or perhaps many somethings) in the claim construction order that Plaintiff does not like, and vacating it is apparently preferable to Plaintiff. But again, the court has no idea what underlies Plaintiff’s belief. Whether the court vacates the order or not, it remains in the public record, and has as much persuasive effect as any court or party wishes to accord it. Vacatur does not make an order disappear. See Cisco, 590 F. Supp. 2d at 831 (“[The claim construction order] is now on the internet, available to anyone with a computer.”). If vacating the claim construction order is a nugatory act, then the court declines to take it if for no other reason than it does not wish to encourage parties to file motions requesting that the court issue meaningless orders.

If, on the other hand, vacating the claim construction order has some impact, either in terms of the slight possibility that a court will give it preclusive effect, or in terms of its value as a persuasive precedent, the equities counsel against vacating it. Only Plaintiff has an interest in vacating the order, whereas a larger set of potentially interested third parties has an interest in it as a precedent. The court’s orders “are not merely the property of private litigants and should stand unless a court concludes that the public interest would be served by a vacatur.” United States Bancorp Mortg. Co. v. Bonner Mall P'ship, 513 U.S. 18, 26 (1994) (quoting Izumi Seimitsu Kogyo Kabushiki Kaisha v. U.S. Philips Corp., 510 U.S. 27, 40 (1993)). Because “[j]udicial precedents are presumptively correct and valuable to the legal community as a whole,” id., vacating them in the service of a single litigant is generally inadvisable.

Moreover, the court cannot overlook the investment of judicial (and thus public) resources in the claim construction order. See, e.g., Tumulty v. FedEx Ground Package Sys., Inc., No. C04-1425P, 2007 U.S. Dist. LEXIS 20429 (W.D. Wash. Mar. 22, 2007) (declining to impliedly undo decision reached after intensive litigation by vacating judgment). Patent cases, perhaps more than any other genre of litigation, strain the resources of district courts. The claim construction process in particular is burdensome, as the parties almost invariably flood the court with lengthy briefs and exhibits, and the court’s analysis of disputed claim terms is labor-intensive, to say the least. In this case, the court reviewed the parties’ voluminous claim construction materials, held a Markman hearing, and issued a lengthy (by this court’s standards) claim construction order. In doing so, it diverted focus from hundreds of other cases on its docket. Vacating a claim construction order deprives the public of whatever benefit inures from the court’s investment in resolving patent cases. Zinus, Inc. v. Simmons Bedding Co., No. C 07-3012PVT, 2008 U.S. Dist. LEXIS 33359, at *3-6 (N. D. Cal. Apr. 23, 2008) (declining to vacate claim construction order). As the Zinus court bluntly put it: The public paid for this use of court resources through its tax dollars. Vacatur would render that expenditure a waste, and the parties cite no public interest that would be served by vacatur which would justify the waste of public funds.
Id. at *6.

Finally, the court’s declining to vacate its order will not discourage settlement. It will not discourage settlement in this case because the parties’ settlement is not conditioned on vacatur. As to other litigants, vacating the claim construction order would set a dangerous precedent. This court is not a place for a patent holder to “test drive” its patent. A patent holder who asserts its patent and proceeds to claim construction must be prepared for the possibility of an unfavorable construction, and must not believe that vacatur will serve as its get-out-of-jail-free card. Otherwise, there is nothing to discourage a patent holder from refusing to settle questionable patent claims prior to the expensive claim construction process. Id. at *5 (citing United States Bancorp, 513 U.S. at 28). Indeed, in this case, the parties filed numerous motions before claim construction, leading to several other interlocutory orders. The prospect of a claim construction that will not be erased at the request of the parties can only discourage unnecessary litigation.

For all of these reasons, the court finds that the equities weigh against vacating its claim construction order. The court therefore DENIES the parties’ motion to vacate

Unigen%20Motion%20to%20Vacate%20Markman%20Ruling.pdfUnigen%20Order%20Denying%20M%20Vacate%20Markman.pdf

Who Is Big Baboon Inc.?

A number of my readers have contacted me looking for information about Big Baboon, Inc. Here is what I know. According to its complaint filed against Dell, Amazon, HP, Fed Ex, Honda, and others, it owns 6,115,690 and 6,343,275, patents for "Integrated Business-to-Business Web Commerce and Business Automation." The drawing depicted here is one of over 300 contained in each asserted Big Baboon patent. According to Delaware corporate records, Big Baboon has been organized there since October, 22, 1999. Apparently, the technology claimed in Big Baboon's patents was invented by Charles Wong, "an individual [and] the owner of all stock in BBC." Mr. Wong allegedly created "highly automated methods of performing business functions to provide for the operation of e-commerce with reduced requirement for human interaction and increased access to real-time synchronized information via the Web." The web site www.manta.com states that "Big Baboon, Inc is a private company categorized under Computer software development and located in Sunnyvale, CA. Current estimates show this company has an annual revenue of $950,000 and employs a staff of approximately 10." Manta also lists the following contact information: 783 Palomar Ave, Sunnyvale, CA 94085, Phone:(408) 328-0230.

Claim 1 of the '690 patent is drawn to "[a]n automated end-to-end business process for product sales that uses a relational database management system, the process comprising the steps of:

a first user inputting a customer payment record to the database ...;

automatically generating a customer invoice;

a second user inputting customer payment record to the database ...;

automatically determining a status of the customer payment ...; and

during each of the foregoing inputting steps, qualifying user inputs using experiential constraints, based on the then-current state of the database as a whole."

I wonder what E.F. Codd would have to say about these claims?





Big%20Baboon%20Complaint.pdf

Cordance v. Amazon: Summary Judgment a Mixed Bag

Amazon recently lost its motion for summary judgment on several patent infringement claims brought by Cordance Corp. in the companies’ dispute over online purchasing technology. Cordance’s patents-in-suit are U.S. Patent Numbers 6,757,710; 6,044,205; 5,862,325; and 6,088,717. Amazon’s patent-in-suit is U.S. Patent Number 6,269,369.

In what was described as a classic “battle of the experts," Magistrate Judge Mary Pat Thynge of the U.S. District Court for the District of Delaware said in an opinion issued Monday that a trial was necessary to resolve Cordance infringement claims, but that a judgment of no willful infringement with respect to three Cordance patents would be issued in Amazon's favor. Overall, Judge Thynge denied Amazon’s motion for summary judgment of noninfringement with respect to two patents, and denied two attempts to invalidate a third.

In this patent infringement suit, Cordance alleges that Amazon’s “One Click” purchasing feature and other services on its retail site infringe several Cordance patents that relate to technology used to manage user information in online purchases.

The case is Cordance Corp. v. Amazon.com Inc., case number 06-cv-00491, in the U.S. District Court for the District of Delaware.

ADC v. Nintendo, Microsoft, and Sony Stayed Pending Reexamination

ADC Technology Inc, a Japanese corporation that owns several gaming patents related generally to music/karaoke-style video games, filed suit last October in Seattle against Nintendo, Microsoft, and Sony. The patents in suit include:

U.S. Patent 5,775,995, titled "Interactive Communication System for
Communicating Video” filed May 3, 1996 and issued July 7, 1998; U.S. Patent 6,193,520, titled “Interactive Communication System for Communicating Video Game and Karaoke Software” filed July 2, 1998 and issued February 27, 2001; U.S. Patent 6,488,508, titled “Interactive Communication System for Communicating Video Game and Karaoke Software” filed December 8, 2000 and issued December 3, 2002; U.S. Patent 6,702,585, titled “Interactive Communication System for Communicating Video Game and Karaoke Software” filed December 2, 2002 and issued March 9, 2004 (copy attached as Exhibit D); U.S. Patent 6,875,021, titled “Interactive Communication System for Communicating Video Game and Karaoke Software” filed November 14, 2003 and issued April 5, 2005.

ADC alleged that Nintendo's Wii, Sony's PS3, and Microsoft's Xbox 360 infringed one or more of the above-listed patents.

Led primarily by Nintendo, all three defendants came out swinging in their answer alleging invalidity, non infringement and inequitable conduct. Nintendo's pleading was particularly noteworthy, over 145 pages of allegations describing invalidity and inequitable conduct.

Last week, Judge Martinez agreed to stay the litigation in view of several petitions for reexamination in various staged of pendency before the USPTO. The parties stipulated to the stay.

Microsoft Seeks JMOL in i4i Patent Case

From Bloomberg.com

"[T]he world’s largest software maker asked a U.S. judge to throw out a $200 million verdict after a jury found that the company’s Word products violated a patented way to process electronic documents.

Microsoft is also seeking a ruling that it didn’t use a patent owned by closely held i4i LP. U.S. Judge Leonard Davis in Tyler, Texas, didn’t rule on the motion today.

'There is no evidence that Microsoft looked at the patent or knew about the content of the patent,' Matthew Powers, a Microsoft attorney, told Davis.

Microsoft yesterday asked a judge in Providence, Rhode Island, to throw out a separate $388 million verdict in favor of a Singapore company that accused Microsoft of infringing a patented invention used to deter software piracy. No ruling was made and the hearing is expected to continue next week.

The Tyler jury’s May verdict said Microsoft’s infringement was willful, allowing i4i to seek to have award increased. An attorney for i4i suggested $25 million would be a reasonable punishment for willfulness.

'The evidence amply supports the jury’s finding of willfulness,' said Douglas Cawley, an attorney representing i4i, told the court today. 'Microsoft knew of the patent, and chose to ignore it.'

Four of the top 10 biggest patent verdicts in U.S. history have gone against Microsoft, totaling more than $2.78 billion. The total includes a February 2007 verdict where the Redmond, Washington-based company was told to pay $1.5 billion to Alcatel-Lucent. The award was later thrown out."

Cognex Can't Seek Early Summary Judgment in Bar-Code Reader Case

In this suit involving bar-code reader technology, Renton-based Microscan asserts US Patent No. 6,105,869 against Cognex, an international company with US headquaters in Massachusettes. In its Complaint, Microscan alleges that Cognex has been and is infringing at least claims 1, 7, 12 and 16 of the ’869 patent by manufacturing, using, selling and/or offering for sale at least its DataMan 100X, DataMan 100Q and DataMan 700 reader products.

After denying these allegations in its answer, Cognex moved for summary judgment. In its motion for summary judgment, Cognex argued that "the evidence shows that there can be no genuine dispute that an express limitation in each of claims 1, 7, and 12 of the ’869 patent, regarding the arrangement of illumination sources in the claimed device, is not satisfied in the Cognex Accused Readers, either literally or under the doctrine of equivalents."

In a minute order, Judge Martinez struck the motion, finding that it implicated claim construction and therefore would not be decided prior to a Markman hearing.

This is yet another reminder that early summary judgment motions in this District must be accompanied by a motion for leave of court, explaining why the motion does not implicate claim construction issues, or if it does, why it is appropriate to hear the motion early.

Supreme Court denies Certiorari in Quanta v. Ricoh

Does the unconditional sale of a patented item overseas result in a forfeiture of rights to enforce patent rights in the United States? Federal Circuit precedent has answered this question in the negative; see Harold C. Wegner, Post-Quanta, Post-Sale Patentee Controls, 7 J. Marshall Rev. Intell. Prop. L. 682, 698 (2008).

So called "international patent exhaustion" was the focal point of a certiorari petition that was recently denied by the Supreme Court in Quanta v. Ricoh. The Supreme Court's consideration of certiorari petitions is now over until the Court resumes for the October 2009 Term. Would Obama's pick, Judge Sonia Maria Sotomayor, have made a difference in this vote? Probably not. Regardless of this vote, most scholars believe that the Supreme Court will eventually need to take a hard look at this issue. Professor Hal Wegner says that "[t]here has been a wealth of legal writing on the subject since 1974, particularly from Europe, where intra-European exhaustion took root in the European Court of Justice Centrafarm case that year. The topic attracted much attention in Asia in the late 1990's when the Japan Supreme Court issued its blockbuster opinion in the BBS case. Quanta may well be the wakeup call for consideration of this issue in the United States."