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

The Federal Circuit recently found that intervening rights can apply to a claim that has been narrowed by argument only during a reexamination.

In Marine Polymer Technologies, Inc. v. HemCon, the Federal Circuit recently found that narrowing a claim by argument only changes the substantive scope of the claim for purposes of intervening rights. Specifically, a claim term that is changed during reexamination without changing a word in the claim can still substantively narrow the scope of a claim. Therefore, upon reissue of the patent, an infringer would have “… absolute intervening rights with respect to products manufactured before the date of reissue.”

Marine Polymer alleged infringement of certain claims of its U.S. Patent No. 6,864,245 (the “’245 Patent”). During the district court Markman proceedings, the definition of only one claim term, biocompatible p-GlcNAc, was in dispute. The term “biocompatible” appears in every claim of the ’245 Patent. Both plaintiff and defendant proposed term constructions. The District Court reject their proposals and adopted its own, concluding that biocompatible p-GlcNAc meant “polymers… with low variability, high purity, and no detectable biological reactivity as determined by biocompatibility tests.” Based on this claim construction, the district court granted summary judgment of literal infringement for all of the seven asserted claims.

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Two cases decided last month highlight the somewhat disparate pleading standards in patent infringement actions among districts after Twombly and Iqbal. In The Nielsen Co. v. comScore, Inc., a plaintiff in the Eastern District of Virginia overcame a motion to dismiss infringement claims. Case No. 11-cv-168 (E.D.Va. Aug. 19, 2011) (Davis, J.). The court held that the claims for direct infringement met the lenient pleading standard of Form 18 provided under the Federal Rules. While in Medsquire LLC v. Spring Med. Sys. Inc., the district court for the Central District of California granted the defendant’s motion to dismiss. 2-11-cv-04504 (C.D. Cal. August 31, 2011) (Nguyen, J.). The court held the plaintiff’s Form 18 pleading resulted in conclusory statements that failed to include any facts identifying the relevant aspect of the [accused product] that infringed the patents and the complaint was insufficient to meet the “plausibility” standard set forth in Twombly and Iqbal.

Despite the heightened standard created in Twombly and Iqbal, district courts generally have not required heightened pleadings in the patents context with regard to direct infringement. In McZeal v. Sprint Nextel Corp., a pre-Iqbal decision, the Federal Circuit set a low bar for pleading direct infringement holding that the allegations of a pro se plaintiff must only meet the requirements of Form 18 of the Federal Rules. 501 F.3d 1354 (Fed. Cir. 2007). Furthermore, Federal Rule 84 expects a court to accept a pleading made in conformance with the forms as sufficient. Thus, for most districts the sufficiency of a Plaintiff’s direct infringement allegations can be met by following the dictates of Form 18. The Court in Medsquire, however, distinguished McZeal on the grounds that Plaintiff was represented by sophisticated counsel and the fact that the McZeal decision came before the holding in Iqbal.

A claim of direct infringement under Form 18 requires only: an allegation of jurisdiction and the specific patent law infringed; the identification of the patent and a statement that the plaintiff owns the patent; an identification of at least one infringing product; a statement that the defendant has been infringing the patent “by making, selling, and using” the product and a demand for relief. Under a Form 18 complaint, a plaintiff is not required to plead specifics as to how an allegedly infringing product works. See e.g. Adiscov, LLC v. Autonomy Corp., 762 F.Supp.2d 826 (E.D.Va. 2011), Mark IV Indus. Corp. v. Transcore, L.P., Case No. 09-cv-418 (D.Del. Dec. 2, 2009); Sharafabadi v. University of Idaho, Case No. 09-cv-1043 (W.D. Wash. Nov. 27, 2009); Automated Transactions, LLC v. First Niagara Fin. Group, Inc., Case No. 10-cv-00407 (W.D.N.Y. Aug. 31, 2010); Traffic Info., LLC v. Yahoo! Inc., Case No. 09-cv-246 (E.D.Tex. April 13, 2010); Microsoft Corp. v. Phoenix Solutions, Inc., 741 F.Supp.2d 1156 (C.D. Cal. 2010); and Apple Inc. v. Eforcity Corp., Case No. 10-cv-03216 (N.D. Cal. Apr. 5, 2011).

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On October 3, The Gibbons Institute of Law, Science & Technology will host its annual "Federal Circuit Year in Review" event at Seton Hall Law School. Ralph A. Dengler, Counsel to the Gibbons Intellectual Property Department, along with a panel of practitioners and jurists, including Chief Judge Brown and District Judge Simandle of the District of New Jersey, will review and discuss the Federal Circuit's key decisions from 2011, and their practical and future implications for the bar. These discussions will include cases involving damages; inequitable conduct; jurisdiction and venue; licensing; patentability of business methods; and preservation of ESI in anticipation of litigation, among other topics.

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As has been widely reported by the mainstream press and most legal publications, the Internet Corporation for Assigned Names and Numbers (ICANN) has approved a new “.XXX” top-level domain expected to be utilized by the adult entertainment industry. Given the connotation of the .XXX domain, companies and individuals around the globe are considering how best to protect their trademarks from the potential harms of registry misuse, including cyber squatters targeting this new domain to register well known trademarks. Although the creation of the .XXX domain will be a boon to those in the adult entertainment industry and domain registrars, it raises serious threats of infringement, brand dilution or tarnishing for trademarks uninvolved in those industries. If they have not already, all trademark owners should be considering the potential impact of the .XXX domain to their marks and determining whether to take the necessary steps to “opt-out” of .XXX domain registration by the October 28, 2011 deadline for doing so.

ICM Registry LLC (“ICM”), the company responsible for operating the .XXX domain, is offering a potential solution to concerned trademark registrants by offering a period to “opt-out” of .XXX domain registrations. The option to “opt-out” is otherwise known as “Sunrise Period B” and will run from September 7, 2011 to October 28, 2011. Sunrise Period B will permit companies, licensees, assignees and individuals with trademarks that were formally registered as of Sept. 1, 2011, to apply to have their trademarks permanently blocked from the .XXX registry. To successfully do so, a registrant must present its trademark by way of an application to an accredited .XXX registrar. This process involves a one-time fee, typically in the range of $200 to $250 per domain name. Once blocked, the protected domain name will be removed from the ICM registration pool. Additionally, that domain name will simply resolve to an information page stating that the domain name is not available for .XXX registration.

Significantly, the following are not considered formally registered trademarks that qualify for Sunrise B eligibility: (1) trademarks or service marks for which an application for registration has been filed, but is not actually registered by the competent public authority or intergovernmental organization prior to Sept. 1, 2011; (2) trademarks or service marks for which an application has lapsed, been withdrawn, revoked, canceled, or otherwise is no longer in full force and effect; (3) unregistered trademarks or service marks (including common law); U.S. State trademarks or service marks; (4) international applications for the registration of trademarks, made through the Madrid system, unless these are based on or have resulted in a registered trademark of national effect; or (5) U.S. supplemental registrations; or any other rights in a sign or name, including domain names, trade names, and appellations of origin.

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On Thursday, September 8, 2011, the Senate passed the America Invents Act and President Obama is expected to sign the legislation this week. Every 2 years since 2005, Congress has taken up the issue of patent reform to address issues surrounding patent validity (e.g. first-to-file v. first-to-conceive; best mode), patent prosecution (e.g. opposition proceedings; inventor’s oath), and patent litigation (e.g. forum shopping, damages, willful infringement, patent unenforceability).

One significant change in patent law provided by this Act is changing U.S. law from a first-to-conceive system to a first-to-file system. The first-to-conceive system was considered helpful to individual inventors and small companies with limited resources by giving them time to develop their inventions and to file patent applications. However, this system created uncertainty about who would have priority of invention and what prior art could be considered when assessing the validity of a patent. The U.S. was also out of step with the rest of the world, because it was the only country that used first-to-conceive.

In addition to creating greater certainty about a patent’s date of invention, this reform will have a significant effect on how patent practitioners advise their clients about obtaining protection for their inventions. The first-to-file system may increase the pressure to file patent applications quickly after conception and before commercial reduction to practice, as is common in Japan.

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On Tuesday, September 6, 2011, the Senate invoked cloture on H.R. 1249, also known as the America Invents Act, making it almost a done deal for passage of this Act. One reason that this bill has succeeded over its predecessors is that, with one major exception, there is little difference between the House and Senate versions. The passage of H.R. 1249 will mark the culmination of a 6-year process to pass patent reform legislation that started with H.R. 2795.

The USPTO has provided a summary of the key provisions of H.R. 1249. One provision omitted from this bill but present in failed predecessors is the issue of damages. This generated significant opposition in the past. While H.R. 1249 is not without detractors, it reflects the compromise reached among individual inventors, universities, large and small business concerns. The most controversial provisions in the bill are the following:

• First Inventor to File. Transitions from a “first-to-invent” to a “first-inventor-to-file” patent system while maintaining a 1-year grace period for disclosures by the inventor.

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