Seattle Patent Litigation Update (May-June 2008)

So my trial is now over. My posts will pick up and be more frequent. I'm happy to report a victory for one local inventor over Sears Roebuck and their advertising firm, Young & Rubicam. Jury returned a verdict for $1.7 million on Wednesday afternoon. It's a copyright case, so I won't go into detail here. If you are interested, here is a link to today's story in the Seattle Times.

May and June saw some interesting new patent filings in Washington. Here is a list:

June 10, 2008
Nintendo of America Inc v. Nyko Technologies Inc	WA Western	Lasnik	Patent	Federal Question
Plaintiff: Nintendo of America Inc; Defendant: Nyko Technologies Inc
May 28, 2008
Microscan Systems Inc v. Cognex Corporation	WA Western	Martinez	Patent	Federal Question
Plaintiff: Microscan Systems Inc; Defendant: Cognex Corporation
May 22, 2008
Brower v. Lowe's Companies Inc et al	WA Western	Robart	Patent	Patent Infringement
Plaintiff: Jerry E Brower, Jerry E Brower Defendant: Lowe's Companies Inc, Lowe's HIW Inc, Homax Products Inc
May 20, 2008
Westfield Outdoor Inc v. GCI Outdoor Inc	WA Western	Jones	Patent	Declaratory Judgement
Plaintiff: Westfield Outdoor Inc, Westfield Outdoor Inc, Westfield Outdoor Inc Defendant: GCI Outdoor Inc

The most interesting of these cases to me is Nintendo's action over Nyko Technologies to enforce rights in the NUNCHUCK controller for the Wii. Now that is what I like to see: a major technology player from the PNW showing confidence in our local district court to sort out complicated IP matters. This case is also interesting because it seeks to enforce design patent rights in the shape of the controllers amid great uncertainty in the law concerning design patent rights. The Federal Circuit has yet to issue a decision in the en banc review of Egyptian Goddess v. Swisa. Here is a link to post about amicus briefs offered in connection with that case, one of which I co-authored earlier this year on behalf of the Federal Circuit Bar Assocaition.

Seattle Patent Litigation News

It's been a while since I've posted. I know both of you are disappointed (hi mom). Reason for the hiatus is that I've been preparing for trial. So expect my posts to be less frequent through about the end of July.

There's still a lot to report on the local patent litigation front. First, as I'm sure many of you already know, Nintendo was hit with a significant infringement verdict by a Texas jury last week, in the amount of about $21 Million. My previous post on this case can be found here. Here is a bit of coverage of the case from IP 360

Thursday, May 15, 2008 --- Nintendo Inc. was ordered to pay a small Texan
patent holder $21 million on Wednesday for infringing patents related to the
controllers for its popular GameCube and Wii video-gaming systems.
A federal jury found that Nintendo infringed Anascape Ltd.'s patents with its
WaveBird and Gamecube controllers for the GameCube and Wii Classic
controller for the Wii. The Wii remote and nunchuck controllers were not
included in the suit.
The jury's verdict followed a two-week trial in the U.S. District Court for the
Eastern District of Texas.
"We are extremely pleased with the jury's verdict. Anascape may be a tiny
company compared to Nintendo, but today's verdict confirms that the
company's technology is second to none,” said Doug Cawley of McKool
Smith PC, which represented Anascape.
A representative for Nintendo said the company was planning on appealing
the ruling and that the appeals court would “promptly reduce the dollar
amount of the verdict significantly.”

In other news, the Western District of Washington published its set of proposed patent rules. Check them our by following this link: http://www.wawd.uscourts.gov/proposedlocalrules.htm

I'd like someone to offer to guest blog about these rules since I won't have the time for a while (no Mom, you can't). Please let me know if you have time/interest in writing a little summary of the proposed new rules, and perhaps comparing them to other districts, like the ED Texas, or ND Cal.

Finally, Local software company Widevine Technologies Inc., has expanded its patent infringement case against competitor Verimatrix in the ED of Texas. The suit involves video encryption technology, and since my firm is handling the case on behalf of Widevine, I'll just post some snippets from the recent IP 360 article.

Tuesday, May 20, 2008 --- Widevine Technologies Inc. has stepped up its
legal battle against Verimatrix Inc., filing an amended complaint that adds
another patent to its infringement suit over video encryption technology.
The amended complaint, filed Tuesday in the U.S. District Court for the
Eastern District of Texas, takes aim at Verimatrix's video content authority
system, claiming the VCAS product infringes on Widevine's U.S. Patent
Number 7,376,831, which covers Widevine's Cypher technology for video
encryption.
Widevine first launched its suit against Verimatrix last August over
Verimatrix's alleged infringement of U.S. Patent Number 7,165,175. That
patent, issued in January 2007, covers methods and systems for selectively
encrypting different portions of data, such as video or audio, that are sent
over the Internet, according to the original complaint.
Widevine's amended complaint claims that Verimatrix was already aware of
the '175 patent as early as March 2007, when Widevine sent a letter
informing Verimatrix that the ’175 patent had issued.

That's all for now.

New Study Says Western District's Claim Construction Decisions Get Reversed Nearly 40% of the Time

A soon-to-be-published study in the Michigan Law Review says that claim construction decisions by the Western District of Washington were reversed by the CAFC 38.9 % of the time during the time period April 24, 1996 (the date of the Supreme Court's decision in Markman) and June 30, 2007. Presented by Professor David L. Schwartz, the study seeks to test the conventional wisdom that "[p]ractice makes perfect - the old adage promises that the more you practice, the better you will become." The theory here is that the busiest judicial districts for patent litigation (the Western District of Washington is ranked 14th in terms of the number of claim construction decisions appealed to the CAFC during this time period) ought to fare better over time in terms of claim construction reversal rate. The results of Schwartz' study may surprise you (or perhaps not). His study shows that the level of judicial experience with claims construction issues appears to have little, if any, impact on reversal rate. Nor does reversal rate decrease when a district court judge has more CAFC appeals. Indeed the busiest judicial district during this time period (measured either in terms of the number of appeals or the number of patent cases filed), the C.D. of California, had the highest reversal rate of any of the "busy" judicial districts for patent litigation, with 43.5% of all claim construction decisions reversed by the CAFC. In short, practice does not make perfect when it comes to issues of claims construction.

Why is this the case? Why doesn't "practice make perfect" in the realm of claim construction? The primary culprit according to Schwartz is that "[c]laim construction may be inherently indeterminate." You think? Do you mean to say there are multiple, potentially outcome-changing ways to interpret claim language? Forgive the sarcasm, but anyone who has litigated a patent case knows that claim construction in many cases is a crap shoot. It comes down to good advocacy and this why it is so important to choose your counsel wisely.

NOTE: This post was updated May 10, 2008 to reflect the fact that the study is not yet published and to provide an updated link.

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).

Licensing Activities in Washington State Held Sufficient to Support Allegations of Personal Jurisdiction in a Patent Case

Tien Hsin Indus. v. Cane Creek Cycling Components, Co7-1272Z, (W.D. Wash. 2007).


Plaintiff Tien Hsin Industries, a Taiwanese maker of cycling components sold in the US under the brand Full Speed Ahead sued Cane Creek Cycling Components and inventor Homer John Rader III for inter alia a declaratory judgment of non infringement and invalidity of U.S. Patent No. 5,095,770, entitled "steering bearing assembly for wheeled vehicle." Defendants moved to dismiss inventor Rader, claiming he had no contacts with the state of Washington sufficient to support specific personal jurisdiction. At first glance, Defendant Rader's motion has some legs. Rader doesn't live in Washington, he has no offices or other presence here, he owns no property here, he never sent threats of infringement here, he has no web-presence or other contacts with Washington, nor did he ever contact plaintiffs in connection with the patent-in-suit. On the surface, Defendant Rader has fewer contacts than some other defendants recently dismissed on personal jurisdiction grounds from W.D. of Washington patent cases. See here and here for my posts on those cases. Why then were plaintiffs successful in defeating a motion to dismiss Rader for lack of personal jurisdiction? The answer comes from looking closely at his licensing activities. Under Federal Circuit law (remember, in patent cases, especially DJ cases, the law of the Federal Circuit applies to determinations of personal jurisdiction because "personal jurisdiction in a declaratory action for non-infringement is 'intimately related to patent law' and thus governed by Federal Circuit law regarding due process," see Silent Drive, Inc. v. Strong Indus., Inc., 326 F.3d 1194, 1201 (Fed. Cir. 2003)), licensing activities by a non-resident defendant may give rise to personal jurisdiction where the defendants' exclusive licensee conducts business in the forum state and where the defendant exercises some modicum of control over that activity beyond the mere collection of royalty income. Breckenridge Pharm. v. Metabolite, 444 F.3d 1356, 1366 (Fed. Cir. 2006). In this case, Defendant Rader licensed Cane Creek, who admittedly conducts business in Washington. Further, Defendant Rader was obligated under his license to Cane Creek to supply consulting services and he had control over sub licenses and rights in the products sold. He also had control over trademark usage and quality. While Judge Zilly's order does not specifically reference these factors, it does cite the Federal Circuit's opinion in Breckenridge in denying the motion.

Here are links to the order, the complaint, the patent-in-suit, the motion to dismiss, and the response.
CaneCreekcomplaint.pdf
canecreekorder.pdf
canecreekmotion.pdf
canecreekresponse.pdf