Philip Brooks' Patent Infringement Updates

Managing the Dragon

Dan Fitzpatrick writes in the March 30, 2008 print issue of the Pittsburgh Post-Gazette:

Before venturing halfway around the world to become the businessman known as "Mr. China," Jack Perkowski was a North Catholic High School student seen hitching rides along Routes 28 and 8, up Dorseyville Road and past Meinert's Farm in O'Hara.

On a recent visit back, the barrel-chested, silver-haired Mr. Perkowski is dressed in dark suit, blue shirt and red tie, home to give a few speeches, talk to some students, make a few TV appearances and promote the release of his first book, "Managing The Dragon."

...the 59-year-old acknowledges how improbable it was that a descendant of immigrant steelworkers could make it to Yale University, then to Harvard Business School and the pinnacle of Wall Street before betting everything at age 42 on China -- by no means a sure thing in 1991, two years after the protests and shootings in Beijing's Tiananmen Square.

Despite an array of obstacles and near-failures, he did what few Westerners can claim -- the building of a profitable company from the ground up inside the world's largest Communist nation. Beijing-based ASIMCO Technologies now employs 12,000 and books more than $500 million in sales. Nearly all of Mr. Perkowski's employees are Chinese and 85 percent of his diesel fuel injection systems, piston rings, starters, alternators, air compressors, brake products and castings are sold within China, via 17 manufacturing plants and 52 sales offices.

While many books have been written about China's rise, about the opportunities provided by its transition to Western-style capitalism and population of 1.3 billion, Mr. Perkowski claims his is the first from a person who has truly lived the life, day to day. The book and a blog (Managing the Dragon) are part of Mr. Perkowski's plan to turn himself into a "franchise" on the issue of doing business in China, making him available to explain the country to anybody who's interested.

He claims there are only two rules for doing business inside China: that "everything is possible" and "nothing is easy." To succeed, he said, is to build a strong management team; this, in fact, is Mr. Perkowski's central point: "There's no way around it," he writes.

Read the full article here.

Be Careful What You Post

A reader brought to my attention today a court Decision and Order in the Document Security Systems, Inc., et al. v. Adler Technologies, Inc., et al. case (U.S. District Court, Western District of New York, Case 03-CV-6044).  Judge Michael A. Telesca ruled on February 29, 2008 granting "defendants’ cross-motion to amend to include defendants’ proposed defamation counterclaim ... and the addition of proposed counterclaim defendant, Caton."  The defamation counterclaim is based on comments Mr. Caton posted on my December 2006 blog post entitled, "Document Security Systems Not Sapped By Patent Dispute," that was related to this case.

The Decision and Order reads, in part:

In defendants’ proposed Eighteenth Counterclaim, defendants Adler, Arcis, McTaggart and Wu seek to add a counterclaim against both plaintiff and proposed additional counterclaim defendant Michael Caton (Plaintiff’s Vice President of Implementation) (“Caton”), for defamation arising out of alleged statements made by Caton on December 29, 2006. Defendants contend that this counterclaim is supplemental pursuant to Fed. R. Civ. P. 15(d) and 13(e) because the events occurred since the counterclaims were originally plead against plaintiff. According to defendants, on December 29, 2006, Caton posted false statements on an internet web log entitled, “Philip Brook Patent Infringement Updates.”3 Defendants claim the statements were intended to harm the character of Adler and its owners, McTaggart and Wu and imply that they misappropriated technology, which are not true and are defamatory.

3 the following statements “As for Adlertech maybe people should just look at what the owners of this company have there [sic] experience in up to the point that they meet the Wickers and how all of a sudden they know all there is to know about printing and took people in the field to learn many many years and seem to just be puttig [sic] out products which match or are similar to DSSI. ALL I will say is the product which they are selling (ODT) patented technology which I help[sic] develop and was suppose[sic] to be compensated[sic] for and never was is what they are sell [sic]. If I am correct if all the inventors are not named on a patent then the patent can be ruled invalid and I have a very good case if that is to be pushed. I think the Post above did not research very well before they posted.” See Exhibit C to Paul Leclair’s Declaration, ¶ 102, p. 84

The proposed new counterclaim on behalf of Adler, McTaggart, Arcis and Wu against Caton, which relate to defamation concern the publication of alleged defamatory materials by Caton on December 29, 2006. ... although defendants’ defamation amendment may result in a delay, it will not unduly prejudice plaintiff. Indeed, plaintiff has not set forth the exact prejudice it will suffer if this defamation counterclaim is allowed by the Court. Since the purpose of Rule 15 is to encourage disposition of litigation on the merits, defendants’ proposed defamation counterclaim is permitted and the proposed counterclaim defendant, Caton is added.

See the complete Decision and Order here [Download adler_v_dmc.2.29.08.pdf].  I certainly do not want to discourage comments on this blog, but please think through what you have written before you click "POST."  Thanks to the reader who alerted me to the Decision and Order.

The Strategic Value of Patent Claim Construction

This IncreMental Advantage seminar will cover all of the pertinent issues regarding claim construction and interpretation:

• The Role of Claim Construction in Patent Preparation

• A Review of the Strategic Utility of Claims

• Evolution of Claim Construction

• A Review of the Impact of Current Legislation and Rulings on Claim Construction and Interpretation

• A Discussion of Claims Analysis as a Valuation Metric

The Lead Presenter is Paul B. Hunt, a partner in the Indianapolis office of Barnes & Thornburg LLP. He is the administrator of the firm’s Indianapolis office Intellectual Property Department.

The course will be held in three locations this summer:

Chicago, IL- June 23, 2008

San Francisco, CA- July 14, 2008

Washington, DC- August 5, 2008

More details and registration are available here.

ITC Investigates Blue Laser Patent Claim

Ian Williams writing for vnunet.com today, 26 Mar 2008:

The US International Trade Commission has begun an investigation into certain short-wavelength light emitting diodes and laser diodes following a patent infringement complaint.

Gertrude Neumark Rothschild, an emeritus professor at Columbia University, claims to own a patent on a method of producing wide-band gap semiconductors for LEDs and laser diodes at the blue and ultraviolet end of the light spectrum.

Rothschild alleges violations of section 337 of the Tariff Act of 1930 and is seeking to block the import of all LEDs and lasers that fall foul of the patent, as well as any products which use the technology.

These include hand-held mobile devices, instrument panels, billboards, traffic lights, Blu-ray disc players and data storage devices.

Companies under investigation include Avago Technologies, Everlight Electronics, Hitachi, LG, Lite-On Technology, Matsushita, Motorola, Nokia, Pioneer, Samsung, Sanyo, Sharp, Sony, Sony Ericsson and Toshiba.

Read the full article here.

The Federal Circuit Raises The Standard For Willful Infringement And Enhanced Damages

Ali Dhanani writes in the February 2008 Intellectual Property Report (Volume 5, Issue 73) from Baker Botts L.L.P., an article entitled, "In The Wake Of In re Seagate Technology, LLC: The Federal Circuit Raises The Standard For Willful Infringement And Enhanced Damages And Heightens The Protection Of Attorney-Client And Work Product Privilege."

On August 20, 2007, the Federal Circuit arguably took significant arrows from the quiver of patent owners in litigation and simultaneously provided a considerable new shield to alleged infringers with its ruling in In re Seagate Technology, LLC.[1] In a unanimous en banc decision, the Federal Circuit increased the standard of proof necessary to establish willful infringement, eliminated its previous willfulness standard based upon an affirmative duty of due care, and determined that the waiver of attorney-client privilege and attorney work product protection created by the assertion of an opinion of counsel defense does not extend to trial counsel. These questions in the Seagate case were previously discussed in an article in our January 2007 IP Report entitled Federal Circuit To Consider Extent Of Waiver Of Attorney-Client Privilege For Reliance On An Opinion Of Counsel In In re Seagate. As noted in that article, the standard for willful infringement matters a great deal because a finding of willful infringement can serve as a predicate for an award of enhanced damages and attorneys’ fees to the prevailing patentee.

A link is available here to access the full article.

Federal Circuit Addresses Effect of 271(e)(1) "Safe Harbor" in ITC Actions

Aaron F. Barkoff of the Orange Book Blog writes in his March 21, 2008 post:

Amgen holds at least six US patents that relate to erythropoeitin and its derivatives (EPO) and processes for making EPO, protecting the Amgen drugs Aranesp and Epogen.  Sales of Aranesp alone topped $3.6 [b]illion last year.  Roche produces EPO in Europe and has been seeking FDA approval for its own EPO drug, Mircera, in the US.

Roche began importing EPO as part of its effort to generate data for its regulatory submissions to the FDA.  Amgen did not object to these acts of importation.  However, Roche continued importing EPO even after its FDA application was complete (though Roche has not yet sold or contracted to sell any of its EPO in the US).  Amgen responded by filing a Section 337 action with the International Trace Commission (ITC), asking the ITC to enjoin Roches further importation and future sale in the US of its European-produced EPO.

The ITC denied Amgens injunction request...In a decision Wednesday [March 19, 2008], the Federal Circuit affirmed in part, reversed in part, and remanded the case to the ITC.

Read the full analysis of the decision here.

Generic Particulars

From today's (March 21, 2008) The Indian Express, comes this editorial:

From January 2005, a new law was to have brought India into compliance with the WTO on how pharmaceutical products were to be patented. Earlier, patent protection was offered on the process; now the product itself was sought to be protected by patent. This meant that a drug could no longer be reverse engineered and marketed. However, as a case that came in for an interim order in the Delhi high court on Wednesday shows, the new patent regime still has many grey zones which need to be addressed before the public policy implications can be adequately assessed. The court refused to stay drug-maker Cipla from manufacturing and selling a lung cancer formulation which the Swiss company, Roche, says is being done in violation of its patent. The case comes in for hearing again in August. Positions have predictably been taken by activists and pharma players, but the issues raised go beyond the specifics of the Cipla/Roche case.

Read the full editorial here.

e-IP, LLC (www.TechTransferOnline.com) Becomes The Place To Go For Intellectual Property(TM)

The following is excerpted from a March 20, 2008 e-IP, LLC press release at PR Newswire:

After only a few months of gathering intellectual property from universities, corporations, and other research institutions, TechTransferOnline has been entrusted with thousands of high quality Intellectual Property (IP) from some of the most prestigious research groups in the world, and is weeks away from launching the breakthrough proprietary portal to entities seeking IP.

"Universities' and national laboratories' technology transfer offices see this website as a means to get more leads more quickly for the licensing of their IP. Unlike other sites, this portal gathers IP from many different entities, allowing seekers of IP to enter their search criteria once, instead of having to visit many websites," says C.E.O. Christophe Sevrain.

Some of the site's features include:

    -- Proprietary automation software that uploads, and synchronizes hundreds or thousands of IP asset files onto the http:/// website with nothing for the IP holder to do,
    -- The ability to list non-published Intellectual Property online, with searchers required to agree to a strict online confidential agreement for these items,
    -- The logging of the identity of every party that has viewed the lister's postings, to get instant leads,
    -- A very low flexible fee structure that allows the lister to choose between paying when the IP is sold or licensed, or paying a flat subscription fee.

Read the full release here.

Admissibility of Settlement Communications In Patent Infringement Rule 11 Proceedings

Michael D. Kurzer and Stacey J. Rappaport of Milbank, Tweed, Hadley & McCloy LLP wrote the above titled article in Law Journal Newsletters Patent Strategy & Management (Volume 7, Number 1 • June 2006).  The following is excerpted from their article:

Plaintiffs bringing patent infringement cases should ensure that they have made an adequate pre-filing inquiry as to the viability of their claims before initiating litigation. Without such an investigation, plaintiffs and their attorneys risk sanctions under Rule 11 of the Federal Rules of Civil Procedure. In the sanctions context, Rule 408 of the Federal Rules of Evidence does not protect settlement communications from admissibility. Statements made for settlement purposes may be admitted to determine whether a plaintiff conducted an adequate pre-litigation inquiry under Rule 11 into the viability of its claims.

Federal Rule of Civil Procedure 11

Rule 11(b) requires that when presenting to the court a pleading, written motion, or other paper, an attorney “is certifying that to the best of the person’s knowledge, information and belief, formed after an inquiry reasonable under the circumstances,” the pleading, written motion, or other paper is not being presented for any “improper purpose,” and the claims, defenses, and other legal contentions are “warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law.”

Rule 11(c) gives the court discretion to impose sanctions against the “attorneys, law firms, or parties that have violated [Rule 11(b)] or are responsible for the violation.” The court has significant discretion in determining what sanctions, if any, should be imposed for a violation. Rule 11 sanctions for improperly filing patent infringement suits have included awards of costs and attorneys’ fees and outright dismissal of the infringement claims.

RESQNET V. LANSA: ADMISSIBILITY OF SETTLEMENT COMMUNICATIONS

In ResQNet.com Inc. v. Lansa, Inc., 382 F.Supp.2d 424, 457 (S.D.N.Y. 2005), the court sanctioned Res-QNet.com and its attorneys for filing an amended complaint asserting patent infringement after ResQNet’s attorney expressed in a settlement negotiation letter that two of the patents asserted in its complaint appeared not to be infringed.

In its initial complaint filed in April 2001, ResQNet alleged that Lansa was producing, offering for sale, and selling various products that infringed four patents held by ResQNet, including  U.S. Patent Nos. 5,812,127 and 5,831,608. Counsel for ResQNet sent a letter to Lansa’s counsel on Sept. 21, 2001, bearing the designation “for settlement only,” stating:

With respect to the ‘127 patent, it does not appear that the Lansa system would infringe any claim, either literally or under the doctrine of equivalents. Thus, presuming we discover no contrary evidence as the case moves forward [ResQNet] is prepared to remove this patent from the litigation ... With regard to the ‘608 patent, your detailed letter and the materials we have appear to show that the Lansa system does not infringe the claim in the ‘608 patent. Accordingly, unless we discover evidence to the contrary, ResQNet is also prepared at this point to remove the ‘608 patent from the litigation ...

Despite the statements in the Sept. 21 letter, ResQNet filed an amended complaint on Dec. 4, 2001, asserting infringement of the ‘127 and ‘608 patents, among others.

Prior to oral argument on Lansa’s partial summary judgment motion, Lansa filed a Rule 11(b) motion in September 2004 seeking sanctions on the ground that ResQNet had failed to conduct an adequate pre-filing investigation. Lansa argued that ResQNet violated Rule 11 by continuing to litigate certain of its claims, including its claims concerning the ‘608 and ‘127 patents, after it represented in the Sept. 21 letter that Lansa’s product did not appear to infringe either patent.

In response, ResQNet argued that the Sept. 21 letter was inadmissible under Rule 408. The court held, however, that Rule 408 permitted admission of the Sept. 21 letter for the purpose of determining compliance with the pre-filing requirements of Rule 11 because the letter was not being admitted to “prove liability for or invalidity of the claim or its amount.”

Read the full article here.

Some are Experts, Others Just Provide Opinions

Lee Thomason writes today, March 18, 2008, at his blog, ISinIP (Innovative Strategies in IP):

Two points of interest about patent suit experts come out of the pretrial ruling in Seitz v. Envirotech Sys., 4:02CV4782 (S.D. Tex. 3/6/2008). The named plaintiff, apparently, had years of experience running his tankless water-heater company, and also, “twenty years of experience in corporate finance and mortgage banking.” On that basis, plaintiff-patentee Seitz sought to act as an expert, and he issued a damages report that quantified lost market share, lost profits and reasonable royalty rates. The district judge disallowed Seitz testifying as an expert on those topics, but did allow him to “provide a lay opinion on lost profits and reasonable royalty rates.” His “financial underwriting work did not involve calculating lost profits from patent infringement.” Yeah, but, courts routinely allow CPA’s and economists to do that for the first time in patent cases. The interesting commentary comes when the judge compares and contrasts the evidence rules on lay and expert opinion. He quotes from Judge Whyte’s recent ruling in Hynix v. Rambus, that the two rules try to provide an “unflinching” separation between what comes in as expert and lay opinion, but then notes that the “advisory committee note …blinks.” Judge Rosenthal blinks and, while refusing to let Seitz speak as an expert, allows his “opinion on damages, based on his personal knowledge of the company’s sales and the [entire] market” to come in. That recalls the old saw, ‘Judge I don’t know what rule this evidence comes in under, but it’s OK as long as it comes in.’

Read the full post here.