IP Law Alert : Intellectual Property Lawyers & Attorneys : Gibbons Law Firm : Copyrights, Patent Infringement, Unfair Competition

Judge Young recently wrote a colorful and entertaining decision addressing a “disconnect between the Federal Rules of Evidence and the substantive doctrines of patent law [that] seems to have gone totally unremarked both by the patent bar and evidence scholars.” In the end, Judge Young ruled that the patent laws on obviousness trump the Federal Rules of Evidence. NewRiver, Inc. v. Newkirk Products, Inc., C.A. No. 06-12146-WGY, Memorandum & Order (D. Mass. Dec. 16, 2009).

Plaintiff NewRiver brought a patent infringement action against the defendant Newkirk. After trial, the jury returned a verdict finding that Newkirk infringed claims 9-11 but that certain claims of the patent in suit, including the infringed claims 9-11, were invalid as obvious. The parties then filed various post trial motions including two filed by NewRiver: (1) a motion for judgment as matter of law that claims 9-11 are valid and not obvious; and (2) a motion for a new trial.

The Court reviewed the sufficiency of the evidence regarding the invalidity of claims 9-11, and found that evidence “sparse.” Indeed, the only evidence of invalidity of claims 9-11 consisted of the defendant’s expert reading the claim into evidence and concluding that the claims would have been obvious to a person skilled in the art. The expert did not identify any prior art, did not show where the limitations of the claims were in the prior art, or how the combined prior art references made the claims obvious. NewRiver did not object, and the issue of invalidity of claims 9-11 went to the jury with the only evidence being the expert’s unsupported opinion.

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Some courts, whether by local patent rule or by individual order, are restricting the number of patent claim terms they are willing to construe. For example, the Northern District of California’s Local Patent Rule 4-1(b) directs parties to “jointly identify the 10 terms likely to be most significant to resolving the parties’ dispute, including those terms for which construction may be case or claim dispositive.” Other courts, such as the District of Massachusetts, have memorialized a suggestion that “no more than ten (10) terms per patent be identified as requiring construction.” See Appendix to D. Mass. Local Rule 16.6, section (B)(4)(d).

In jurisdictions with local patent rules but without specific rules limiting the number of terms that the court will construe, some judges are going beyond the local rules to impose such limits. For example, Judge Clark of the Eastern District of Texas has required parties to identify “no more than ten (10) disputed claim terms for construction,” in order to “secure the just, speedy and inexpensive determination” of the case. Hearing Components, Inc. v. Shure, Inc., Civ. No. 9:07-104, 2008 WL 2485426, at *1 (E.D. Tex. June 13, 2008). There, the parties had originally submitted about twenty terms for construction.

In other jurisdictions without specific local patent rules, some judges have likewise imposed limits on the number of terms they will construe. For example, Judge Sleet of the District of Delaware struck a joint claim construction chart that contained competing constructions for thirty-one claim terms or phrases spanning four patents. See Grape Technology Group, Inc. and KGB, Inc. v. Jingle Networks, Inc., Civ. No. 08-408 (D. Del.), Docket Entry 35 (Order dated Oct. 20, 2009). There, the Court ordered the parties to file an amended claim construction chart within five days, limited to ten disputed terms per patent-in-suit.

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What do adjustable bow ties have in common with disposable coffee cup lids? Not much, other than the fact that they have recently been at the center of false patent marking suits brought against major corporations not by competitors, but consumers. In each case, a consumer noticed that markings on certain products referred to patents which had long since expired.

While most ordinary consumers would not attribute much significance to such a finding, these were no ordinary consumers. They were patent attorneys who, by virtue of their profession, were familiar with the false marking statute of the Patent Act. So when Matthew Pequignot sat down to his morning coffee and noticed that the lid of his cup was marked with an expired patent, he proceeded to file Pequignot v. Solo Cup Company. And when Raymond Stauffer noticed that his Brooks Brothers adjustlox bow-tie was affixed with an expired patent number, he initiated Stauffer v. Brooks Brothers, Inc.

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On November 16, 2009, the Supreme Court denied a petition for certiorari in the case of Harjo v. Pro-Football, Inc. The underlying action was brought by Native American activists (“Harjo”) who challenged the Washington Redskins’ right to register its team name and logos on the basis that they are scandalous, disparaging and may bring Native Americans into disrepute or contempt. Marks that do any of those things are not entitled to registration, as provided by Section 2(a) of the Lanham Act, 15 U.S.C. § 1052(a). The sole issue submitted for the Supreme Court’s review, however, was whether the activists’ claim was barred by laches, as found by the U.S. Court of Appeals for the D.C. Circuit.

Under the Lanham Act, the grounds on which a trademark registration may be cancelled become limited once the registration has existed for five years. For example, after that point, no challenge may be brought on the basis that the mark is merely descriptive. However, the Lanham Act specifies that certain claims may be brought “at any time,” including that a mark is disparaging, that it has been abandoned, or has become generic. 15 U.S.C. § 1064(3).

The issue submitted for the Supreme Court’s review arose out of a Trademark Trial and Appeal Board (“TTAB”) proceeding in which Harjo sought cancellation of a number of the Redskins’ registrations on the basis that the marks are disparaging and scandalous. On April 2, 1999, the TTAB ruled for Harjo on the issue of disparagement and ordered that the registrations be cancelled. Harjo, 50 U.S.P.Q.2d 1705 (TTAB 1999). The Washington Redskins then appealed that decision to the U.S. District Court for the District of Columbia, and that court held that the activists’ claim was barred under the doctrine of laches, i.e. that the activists had waited too long to bring the claim. Pro-Football v. Harjo, 284 F. Supp.2d 96, (D.D.C. 2003). The activists then appealed that decision. The gist of their argument was that laches may not bar a claim that the law explicitly states may be brought “at any time.” The U.S. Court of Appeals for the District of Columbia did not agree, and it affirmed the lower court’s decision on May 15, 2009. Pro-Football, 565 F.3d 880 (D.C. Cir. 2009). The activists then petitioned the Supreme Court for certiorari.

That the Supreme Court has refused to hear this action does not mean that the Redskins’ registrations will stand indefinitely. Another challenge, Blackhorse v. Pro-Football, Inc., is pending before the TTAB, brought by a group of Native Americans who had only recently reached the age of majority (i.e. the age at which the laches clock starts ticking for individuals) at the time their complaint was filed. That proceeding was suspended pending outcome of the Harjo action, and is expected to move forward in view of the Supreme Court’s decision to deny certiorari. So, while the Washington Redskins may have prevailed in Harjo, it remains to be seen how the challenge to the nature of its marks will be resolved.


Catherine M. Clayton is a Director in the Gibbons Intellectual Property Department.

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Is a technology provider liable for direct copyright infringement when it provides the means for infringement instructed by its users? In the Cablevision case, Cartoon Network, LP LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008), the Second Circuit endorsed a line of cases holding that the provider is not liable absent “volitional conduct” that causes the copying to take place. Two recent district court decisions in the Southern District of New York appear to have applied this rule in seemingly inconsistent fashion.

Most recently, in Cellco P'ship v. Am. Soc'y of Composers, 2009 U.S. Dist. LEXIS 95630 (S.D.N.Y. Oct. 14, 2009), the court held that Verizon was not liable for direct copyright infringement where it provided the technology that allowed cell phone users to play ringtones. The opposite result was reached a few months earlier in Arista Records LLC v. Usenet.com (PDF), 633 F. Supp. 2d 124 (S.D.N.Y. 2009), in which the court found the defendants were directly liable where they provided the technology that allowed users to download infringing sound recordings. How can we make sense of these outcomes?

Cablevision
We begin with a quick overview of Cablevision, in which the Second Circuit held that Cablevision’s Remote Storage DVR System (“RS-DVR”) technology did not directly infringe the plaintiffs’ content. The Second Circuit noted that direct infringement could not be proven unless “volitional conduct” could be established. The Second Circuit found Cablevision’s conduct was analogous to a store proprietor who charges customers to use a photocopier on his premises, and unlike that of a copy service that makes copies at the customer’s request. As such, Cablevision was not directly liable.

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Is an end coming for reverse payment settlements of Hatch-Waxman litigations?

The FTC, like Wile E. Coyote chasing The Road Runner, has been doggedly challenging settlements between brand name pharmaceutical companies and generics to resolve Hatch-Waxman litigations. Reverse payments settlements, which the FTC calls “pay-for-delay” deals, where Hatch-Waxman litigations are settled by the brand name drug company’s payment to the generics to stay off the market, have been the main target of the FTC since the late 1990’s. The FTC’s position is that reverse payments impermissibly thwart less expensive generic drugs from timely reaching consumers. While there is a circuit court split on the issue, the recent trend of courts, including the Federal Circuit, has been that reverse payments are acceptable because they are “within the exclusionary zone of the patent and thus [cannot] be redressed by federal antitrust law.” In re Ciprofloxacin (“Cipro”) Hydrochloride Antitrust Litig., 544 F.3d 1323, 1327 (Fed. Cir. 2008), cert. denied 129 S. Ct. 2828 (2009).

The Supreme Court has yet refused to weight in on reverse payments, denying certiorari this past summer despite the FTC’s, and, more recently, the DOJ’s entreaties to take up the issue in the Cipro case. Previously, the DOJ had remained on the sidelines in reverse payment fights, but under the Obama administration’s guidance, the DOJ is now advocating that reverse payments be prohibited. The DOJ’s position on the issue has struck the path for the new kid on the block in the war on reverse payments: Congress.

In Cipro, DOJ’s briefing to the Supreme Court advocated a presumption shift: that a prima facie antitrust claim for reverse payments could be established by showing only that the settlement was a result of consideration provided to the generic by the branded patentee, accompanied by the generic withdrawal of its challenge. The prima facie case could then, however, be rebutted upon a showing that reverse settlement did not unreasonably restrain competition.

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During a recent AIPLA-sponsored discussion at the USPTO, patent practitioners met with heads of various Technology Centers to discuss USPTO caseloads and recent events. One of the more interesting topics was the increasing number of disclosures from applicants in light of McKesson and more recent inequitable conduct cases and measures that may be taken by the USPTO and practitioners in response.

In McKesson Information Solutions, Inc. v. Bridge Medical, Inc., 2006-1517 (Fed. Cir. 2006) the Court of Appeals for the Federal Circuit affirmed a district court’s finding of inequitable conduct for failure to disclose materials to the USPTO in violation of an applicant’s duty of disclosure under 37 C.F.R. 1.56. In that case, the patent attorney handled two similar, yet unrelated, pending patent applications before the USPTO and did not disclose in connection with one patent application certain documents, such as an office action and a prior art reference, cited in the other similar patent application.

In view of McKesson, patent practitioners may give additional consideration to disclosing office actions and references between related patent applications as well as office actions and references found in unrelated, yet similar patent applications. As the number of related applications and similar patent applications grows, the disclosure process may become more challenging due to the number of documents to cite and the timing of disclosure. For example, if, after a patent application has been allowed, an office action appears in a related or similar patent application, then the applicant may file an Information Disclosure Statement (IDS) disclosing the office action and along with a mandatory and costly payment for a Request for Continued Examination (RCE) to reopen prosecution of the allowed patent application so that the Examiner may review the office action and references cited therein.

During the discussion at the USPTO, the participants considered options such as a special “After-allowance RCE” of reduced price that would pay for the Examiner to review references disclosed by the applicant in the situation described above. Also of note was a suggestion that a feature be implemented within the USPTO’s electronic database that would allow applicants to link applications to allow office actions and references to be automatically disclosed between applications. This issue is on the USPTO’s radar, so stay tuned for developments.


Frank A. Bruno is a Director in the Gibbons Intellectual Property Department.

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