Long-Awaited Bilski Decision Handed Down By The Supreme Court
The long-awaited Bilski decision came down yesterday from the Supreme Court, affirming the Federal Circuit's judgment.
The Court ruled that business methods are eligible subject matter for a patent but declined to accept the Federal Circuit's machine-transformation test as the exclusive test for what is eligible subject matter for a patent under 35 U.S.C. § 101. The Court also rejected the contention that business methods are categorically excluded from patentability. Per Justice Kennedy writing for the majority:
"The concept of hedging, described in claim 1 and reduced to a mathematic
al formula in claim 4, is an unpatentable abstract idea,just like the algorithms at issue in Benson and Flook. Allowing petitioners to patent risk hedging would preempt use of this approach in all fields, and would effectively grant a monopoly over an abstract idea."
"This Court’s precedents establish that the machine-or-transformation test is a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under §101. The machine-or-transformation test is not the sole test for deciding whether an invention is a patent-eligible 'process.' "
The Court's rationale was in part based upon the progression of technology from the industrial age to the current information age:
"The machine-or-transformation test may well provide a sufficient basis for evaluating processes similar to those in the Industrial Age -- for example, inventions grounded in a physical or other tangible form. But there are reasons to doubt whether the test should be the sole criterion for determining the patentability of inventions in the Information Age."
The take away from the case is what we've known all along -- stay away from claims that merely claim abstract ideas or are solely directed to mathematical algorithms. And look forward to more guidance from the Federal Circuit in future cases.
See Court opinion (pdf).
It's a lawsuit!
Aaron Sternberg and Borer's Nest, Inc. announced the arrival of a new lawsuit against Griffin International Companies, Inc. The suit weighed one asserted patent, U.S. Patent No. 7,582,017 (PDF), and was five counts long at filing. The lawsuit brings demands for damages and preliminary and permanent injunctions to stop Griffin from selling foam rubber video game controllers. The new suit is also demanding attorney's fees and is expected to keep everyone quite busy.
Marshall, Schmarshall! Bring Your Patent Cases to Portland
Or Eugene, Medford or Pendleton -- the four divisions of the U.S. District Court for the District of Oregon. The Eastern District of Texas has become a tremendously popular venue for patent owners wishing to bring suit, but, surprisingly, it is not the district where patent owners have the greatest percentage of prevailing.
As reported by Patently-O, a draft paper entitled "Where to File Your Patent Case" by Stanford Professor Mark A. Lemley reports that the patentee win rate in the Eastern District of Texas is 40.3%, whereas it is 45.3% in the District of Oregon. That puts the District of Oregon in an approximate tie for the second best patent win rate (a four-way near tie with Nevada, Middle Florida, and Delaware) among districts with a statistically significant number of patent cases. Only the Northern District of Texas had an appreciably higher patentee win rate (55.1%).
So why file your patent infringement case in Marshall, Texas, when you are likely to fare better in Portland, or Eugene, or Medford, or Pendleton?
Continue Reading...Trolling Along: Floodgates Continue to Open for Patent False Marking Claims
As reported previously (see Floodgates), there has been a wave of false patent marking lawsuits filed in recent months following the Federal Circuit 
ruling in Forest Group Inc. v. Bon Tool Co., 590 F.3d. 1295 (Fed. Cir. 2009), mostly by a new brand of patent troll. The Bon Tool case was sent back to the District Court for calculation of the "fine." On remand, the District Court found that the trial recrd established that Forest sold the falsely-marked S2 model stilts in a price range of $103 to $180 and then found that "the appropriate fine in this case is $180.00 per article, the highest point of the price range. This will deprive Forest of more than it received for the falsely-marked stilts, fulfilling the deterrent goal of § 292’s fine provision." Fortunately for Forest, the Court found that Forest only sold 38 falsely-marked stilts and thus imposed a fine of $6,840. To read the entire order, see Order (pdf).
Gambaro Posts Video of his Infringement Contentions
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Recently filed documents in this case reveal that Thomas L. Gambaro, one of the defendants and the inventor of the patent at issue, has posted a YouTube video setting forth the details of his infringement contentions against FLIR. In the video, Mr. Gambaro speaks to viewers as "Internet jury members" and invites them to cast a vote whether they agree with his infringement analysis.
FLIR Moves to Strike Answer
This case began when FLIR brought a declaratory judgment action against Thomas L. Gambaro and Motionless Keyboard Co. (MKC), who had demanded payment from FLIR, alleging that certain FLIR handheld thermal imagers infringed U.S. Patent No. 5,332,322 (reported here).
Acting pro se, Gambaro filed an answer [PDF] on behalf of himself, MKC and a third company called Patent Enforcement Co., which was not named in the complaint. Because Gambaro is not an attorney, FLIR filed a short motion to strike the answer [PDF], arguing that Gambaro, as a non-attorney, cannot answer on behalf of either MKC or Patent Enforcement Co. FLIR's motion seems like a no-brainer. It is well settled hornbook law that corporations must be represented in court by counsel.
FLIR's motion is set for oral argument before Judge Anna J. Brown at the same time as the Rule 16 Conference on June 24, 2010 at 1:30 PM ,
Digimarc Adds Three More Patents to Case Against Shazam
Digimarc has filed a Second Amended and First Supplemental Complaint [PDF] in its case against Shazam. Compared to the original complaint, this latest complaint adds three new patents to the case: U.S. Patent Nos. 6,829,368 [PDF]; 7,562,392 [PDF]; and 7,693,965 [PDF].
Why is it an amended and supplemental complaint? The answer traces back to the Federal Rules of Civil Procedure (FRCP). FRCP 15(a) governs amendments to the pleadings and does not restrict the nature of the amendment. FRCP 15(d) governs supplemental pleadings, which are for "transactions or occurences or events which have happened since the date of the pleading to be supplemented." In this case, U.S. Pat. No. 7,693,965 issued April 6, 2010 -- after the original complaint (but one day before the First Amended Complaint was filed). Thus, the addition of the '965 patent in the most recent complaint is a "supplement" to the original complaint.
Another common situation in patent litigation that calls for a supplemental, rather than an amended, pleading is reexamination. When a patent in suit is subject to reexamination, and a reexamination certificate issues during the pendency of the lawsuit, then the proper way to allege causes of actions or defenses based on the reexamination is by supplemental amendment under FRCP 15(d), as I teach in my reexamination course for Patent Resources Group.
Benchmade Knife Co., Inc. v. Benson d/b/a RoadsideImports, LLC
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In denying Jonathan Benson’s motion to dismiss for lack of personal jurisdiction, in an order reading like a model exam answer, Judge Haggerty provides useful guidance for law students and businesses.
For the aspiring lawyer, your Civ Pro answer for the personal jurisdiction question (and there will be one) should read much like Judge Haggerty’s March 15, 2010 Order [PDF]. My Civ Pro professor, W. Burlette Carter, would give props to the analysis of whether hauling Mr. Benson into the District of Oregon offends traditional notions of fair play and substantial justice under the International Shoe standard. If you’re taking her class, at least make sure that’s in there.
For the small business hoping to avoid court outside its home state, don’t sell over the Internet! OK, maybe that’s bad business advice – so, lessen the risk of a court asserting personal jurisdiction over you while selling over the Internet by not (1) posting public acknowledgments of sales in states where you don’t want to go to court, (2) criticizing businesses in states where you don’t want to go to court, and (3) advocating boycotts of businesses in states where you don’t want to go to court. Mr. Benson did all three, and they were the primary reasons Judge Haggerty found it fair to keep him in court in Oregon. While there’s no guarantee that abstaining from these three activities will prevent a court from keeping you there to defend a lawsuit, you can bolster the argument that it’s not fair or substantially just.
Photo courtesy of : www.freeimages.co.uk
False Marking Lawsuits -- Have the Floodgates Opened?
In recent months commencing with the decision in Forest Group Inc. v. Bon Tool Co., 590 F.3d. 1295 (Fed. Cir. 2009), prospective plaintiffs have commenced filing lawsuits against patent holders for improperly marking product with false or expired patent numbers. Pundits have predicted that there would be a flood of patent false marking suits. Indeed, in the past month or so, this wave of lawsuits hit the District of Oregon when Oregon-based Lightspeed Aviation sued Bose Corp. (see, Expired Patents and False Marking) .
Though some of these lawsuits appear to be filed by current litigants in related patent litigation, some of these suits are brought by attorneys and political action groups seeking reward or looking to force action on the patent holders. It is the "policing" activity of such third parties unrelated to the market of the patented products that has prompted some pundits to dub these plaintiffs as a new breed of patent troll -- "false marking trolls."
Many of these cases assert that marking an expired patent number on a product constitutes false marking under the theory that the patent owner is clearly acting with the requisite intent to deceive because they know that patent is expired. Personally, rather than being deceiving, I find it useful for a product to be marked by an expired patent number. If you see a product marked with patent numbers, it is a simple matter to determine those patents are expired, much easier than seeing an unmarked product and trying to searching the patent records to find any patents of the manufacturer covering the product. Thus if a product contains marking of one or more patent numbers, and all those patents have expired, there should be a high degree of confidence that all the owner's patent rights have expired.
Fortunately, there is some recent activity in bills proposed in both the U.S. Senate and the House of Representatives seeking to head off this "flood" of patent false marking cases. So until the courts or Congress clarifies the situation, it's probably prudent for patent holders to check their product marking for incorrect or expired patents and make the necessary corrections.
Google v. Traffic Information Will Remain in Oregon
Judge King affirmed Magistrate Judge Hubel's recommendation denying Traffic's motion to dismiss or alternatively transfer the case to the Eastern District of Texas. Order [PDF]
