Hard to believe, but on Tuesday, June 27, 2006, Philip Brooks' Patent Infringement Updates celebrates its first anniversary. So, I decided to take the week off from publishing. I'll see you again on July 3!
Thanks for reading and your comments during the past year.
A subscriber, living in Beijing for the summer, asked for some information on yesterday's decision by the Supreme Court to drop the LabCorp v. Metabolite Laboratories case before reaching a decision. What follows is an excerpt by Andrew Pollack of The New York Times as printed in the International Herald Tribune.
The U.S. Supreme Court has backed away from ruling on a closely watched case that could have set the boundaries on what kinds of discoveries and inventions can be patented.
Saying it had "improvidently" agreed to hear the case in the first place, the court on Thursday dismissed the appeal. That action effectively upheld the medical diagnostic testing patent at issue in the case. And it averted a decision that some patent lawyers said could have undermined thousands of patents on medical tests or genes.
Three justices dissented, saying the court should have decided the case. They strongly suggested that they were concerned that patents in areas like biotechnology and financial services were being granted too liberally and should be rolled back.
The failure to decide the case "threatens to leave the medical profession subject to the restrictions imposed by this individual patent and others of its kind," Justice Stephen Breyer wrote in the dissent, which was joined by Justices John Paul Stevens and David Souter. Breyer said such restrictions "may raise the cost of health care while inhibiting its effective delivery."
The case, LabCorp v. Metabolite Laboratories, involved a patent that said that deficiencies of some B vitamins could be detected by finding high levels of the amino acid homocysteine in a person's blood.
The question for the Supreme Court was whether that part of the patent was merely the statement of a natural relationship between chemicals in the body. Natural phenomena, like gravity, are not patentable.
Some people in the biotechnology industry contend that such patents are fundamental, that many diagnostic tests are based on finding a relationship between a body chemical or gene and a disease.
A U.S. trial jury in Denver and an appeals court both upheld the patent, which is controlled by Metabolite Laboratories, a tiny testing company based at the University of Colorado, and Competitive Technologies, a patent management company in Fairfield, Connecticut.
LabCorp, a giant clinical testing company, was found to have infringed on the patent and was ordered to pay $7.8 million in damages and lawyers' fees, according to LabCorp.
The Supreme Court agreed to hear LabCorp's appeal even though the U.S. solicitor general advised against it. The solicitor general contended that LabCorp had not formally made the argument about natural phenomena in the lower courts.
But after hearing arguments in March and reading about 20 briefs from interested parties, the court said Thursday that it would not consider the case after all. It did not offer any further explanation. Such decisions to drop cases are made occasionally.
For those of you in the Bay area, you may want to check out the joint Farella Braun + Martel LLP and Stanford University program titled, "Understanding the Supreme Court's Recent Patent Decisions." The event will be held on July 19, 2006 at Stanford Law School's Moot Court Room.
This program will highlight:
The patent-related cases recently decided by the Supreme Court including Ebay v. MercExchange, Laboratory Corporation of America Holdings v. Metabolite Laboratories, and Independent Ink v. Illinois Tool
What the decisions might mean in a practical sense.
How the Supreme Court rulings might affect the exploitation of patents.
Two recently decided Federal District Court cases show that patent litigators can learn from some of the techniques employed in trademark litigation. Most experienced intellectual property lawyers understand the significant role surveys play in trademark infringement and other Lanham Act cases, but relatively few are likely to have considered using such research in patent infringement matters other than those involving design patents.
Survey evidence was admitted into evidence in the patent infringement case Applera Corporation v. MJ Research, Inc. The survey evidence, which showed that 96 percent of the defendant’s customers used its products to perform a patented process, was admitted as evidence in support of a claim of inducement to infringe.
Courts have already begun to encourage the use of properly conducted surveys in patent infringement cases. In Advanced Medical Optics, Inc. v. Alcon, Inc., the court refused to allow testimony from a medical expert about the preferences of other surgeons because the expert had not conducted a survey about those preferences.
The article goes on to discuss the standards for the admissibility of surveys as compiled in the Reference Manual on Scientific Evidence, published by the Federal Judicial Center. They are as follows:
The population must be properly chosen and defined
The sample chosen must be representative of that population
The methodology for gathering data must be established to create accuracy and objectivity and the appropriate control groups must be instituted
The questions must be clear and developed so as to be result-neutral, not leading, and not suggestive of any answer
The respondents must be allowed to explain the reasons for their answers
The survey must be conducted by qualified persons following proper interview procedures
The process must be conducted so as to ensure objectivity
The data must be analyzed in accordance with accepted statistical standards
The applicability of surveys to the Panduit criteria and Georgia Pacific Factors for calculating damages is explored with specific sample survey questions. I recall a patent infringement case involving a software patent where we hired a market research expert to conduct a survey to evaluate potential customer's use of software with and without the patented functionality. The results of the survey showed how critical the functionality was to each customer's buying decision and was employed as part of another expert's assessment of damages.
Hewlett-Packard said Wednesday that it has discovered that retailers Walgreen Co. and OfficeMax have sold printer inks in their stores that infringe HP's patents.
Inks found in both Walgreens and OfficeMax refilling service stations infringe HP patents, the company said. HP is "working" with both retailers to resolve the infringement, it said.
When asked if both retailers would be barred from selling third-party inks, an HP spokeswoman replied via email, "In response to your question, both retailers can do whatever they want as long as they don't infringe an HP patent."
The patent infringements were discovered as part of ongoing worldwide testing and enforcement efforts within HP that are designed to protect the company's intellectual property rights, HP said. Over the past year, the same initiative has uncovered ink patent infringements by other companies that offer generic ink supplies through refilling stations or private label brands, the company said.
The U.S. Supreme Court yesterday turned away an appeal in a dispute over the Apotex Inc. development of a generic alternative to GlaxoSmithKline PLC's antidepressant drug Paxil. The high court rejected the appeal -- filed by Glaxo-SmithKline in opposition to a federal appeals court ruling -- after the U.S. Solicitor General's office said the lower court had properly ruled against patent protection for the company. GlaxoSmithKline had asked the high court to rule on whether its patent on the main ingredient in Paxil was rightly ruled invalid because it was previously discovered on accident by separate inventors.
GlaxoSmithKline Plc. introduced its own unbranded version of Paxil one day after the $3-billion-a-year blockbuster went off patent in 2003. The move took away six months of market exclusivity from Apotex Inc., which had hoped to earn $400 million in generic sales. In July 2004, the FDA ruled it was legal for pioneer drug companies to sell unbranded or "authorized generic" versions of their drugs once patent protection was lost. A Federal District court upheld that interpretation last June by ruling that Pfizer Inc. could sell its unbranded version of the epilepsy drug Neurontin.
Paul Loughrey of MobileIndustry.biz reported today, June 19, 2006, that Telephia has sued M: Metrics for patent infringement. He writes:
Two mobile consumer market measurement firms are set to clash in court after Telephia filed a lawsuit alleging two counts of patent infringement relating to the development of M: Metrics' smartphone metering panel.
Telephia has filed a lawsuit in the US District Court, Northern District of California, alleging that its intellectual property rights have been infringed in relation to multiple patents - including two for "System and Method for Measuring Wireless Device and Network Usage and Performance Metrics" issued 1st June and 22nd June 2004. The company is calling for a permanent injunction against M: Metrics.
M: Metrics has staunchly denied the allegations, accusing Telephia of failing to make reasonably enquiry into what the company's measurement and data collection technology actually does and calling for Rule 11 sanctions and attorney fees against Telephia should the legal challenge continue.
M: Metrics has so far failed to provide further insight into its measurement technology, which it does not believe infringes on any known patents, but plans to make further announcements this week.
Client, Keeto Sabharwal, a partner with Blank Rome had a win this month for his client Network-1 Security Solutions, Inc. when the United States Court of Appeals for the Federal Circuit refused D-Link Systems Inc.'s request for a Writ of Mandamus.
As reported by IP Law360, this decision was in response to D-Link's "longstanding attempt to move a patent suit over an Ethernet cable technology" from the Eastern District of Texas to New York City. One reason may be this court's plaintiff-friendly history. "According to data provided by the analysis firm Legalmetric, plaintiffs in the Eastern District have won 88% of all jury trials and 75% of all bench trials since 1994."
"The patent in question involves Power over Ethernet, a technology that remotely powers electronic devices like VOIP telephones, network cameras, webcams and wireless LAN access points. According to industry analysts, several of the markets that have adopted Power over Ethernet have revenue that exceed or are projected to exceed $1 billion."
"Network-1, which engages in the acquisition, development and licensing of proprietary technologies, has held a Remote Power Patent for Power over Ethernet since 2001. The case...is now set for a Markman hearing on Sept. 19 and a trial on March 9, 2007."
The full article is available here with a free trial or paid subscription.
Electronic News reported today, June 14, 2006, that China has applied for membership in the World Semiconductor Council.
In a move that is expected to strengthen the world semiconductor market, the China Semiconductor Industry Association (CSIA) has accepted an invitation to apply for membership in the World Semiconductor Council (WSC), an international organization of industry associations from the major semiconductor-producing countries of the world.
Until now, the WSC represented semiconductor organizations in Europe, Japan, Korea, Taiwan and the United States. Its hand was extended to China in May during the council’s 10th anniversary meeting.
The Semiconductor Industry Association (SIA) today hailed the CSIA decision to apply for membership, as active involvement by a China industry association would benefit members and increase the effectiveness of the WSC’s efforts to grow the industry and promote free and open markets throughout the world.
"We strongly support the China Semiconductor Industry Association's application for membership in the World Semiconductor Council," said Brian Halla, SIA chairman, in a statement. "China is now the world's largest and fastest-growing major semiconductor market and therefore has a large stake in future growth of the microchip industry. China's domestic semiconductor industry would benefit from active involvement in the WSC, which has become an increasingly important forum for cooperation to protect intellectual property, eliminate trade barriers, lower costs to consumers, and preserve the environment."