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Apple's Success Brings More Patent Lawsuits

Appearing in the April 28, 2008 issue of EE Times, Thomas Claburn of InformationWeek writes:

Apple's rise in sales has been accompanied by an increase in patent infringement lawsuits.
During the first four months of 2008, Apple was named as a defendant in eight patent infringement lawsuits, up from five during the same period in 2007. Only one such lawsuit was filed during the first four months of 2006, on behalf of Burst.com. Apple settled that lawsuit for $10 million last November. The first four months of 2005 also brought just one patent lawsuit against Apple. In 2004, three patent lawsuits were filed against Apple from January through the end of April.

In the latest such suit, Apple last week was sued for alleged patent infringement in the U.S. District Court of the Eastern District of Michigan.

The lawsuit, filed on behalf of inventor Henry Milan by Detroit-based law firm Butzel Long, claims that Apple's iPod Nano and iPod Touch use Flash memory in a way that violates U.S. patent No. 6,991,483.

The lawsuit seeks treble damages for willful infringement and an injunction against the sale of the iPod Nano and iPod Touch. However, Huget said the inclusion of that request in the initial filing didn't mean he would ultimately seek an injunction. It's not yet clear whether the case is strong enough to make an injunction against any of Apple's products a realistic possibility.

See the full release here.

Court Denies Hologic Request for Preliminary Injunction Against Sales of Contura

SenoRx, Inc. (Nasdaq:SENO) today [April 29, 2008] announced that a request for a preliminary injunction, filed by Hologic and its wholly-owned subsidiaries, Cytyc Corporation and Cytyc LP in their pending patent infringement suit against SenoRx, Inc., was denied by the United States District Court for the Northern District of California. The Court ordered the parties to schedule a trial within 60-90 days.

See full press release here.

AAAU Reference Center

The American Arbitration Association has developed guides, Frequently Asked Questions (FAQ) documents, and reports to help enhance users' knowledge of alternative dispute resolution in general, and about its application in particular areas or industries.

The suitability of arbitration as a prompt and effective means of resolving Intellectual Property (IP) disputes has been well recognized in recent years, and the AAA provides useful information to help raise clients' awareness and address questions.  The following is a list of these IP-related publications:

  • ALTERNATIVE DISPUTE RESOLUTION FOR COPYRIGHT AND TRADEMARK MATTERS
  • INTELLECTUAL PROPERTY WHITE PAPER
  • RESOLVING INTELLECTUAL PROPERTY DISPUTES OUT OF COURT
  • Patent Litigation: A Radically Changed Environment for Licensors and Licensees

Access the publications here (registration required).

Former Thomson Scientific Executive Appointed to PatentCafe Top Sales Spot

The following is excerpted from a PatentCafe April 24, 2008 press release I received via email (the Company's website does not yet have the full release available):

PatentCafe.com, Inc. is pleased to announce the appointment of David M. Schab as Vice President of Sales. As the latest member of PatentCafe’s executive team, David will assume responsibility for building the company’s global sales operations, and for introducing an expanded line of enterprise level patent portfolio management solutions.

PatentCafe’s artificial intelligence based solutions provide decision-support data for intellectual property managers responsible for corporate Open Innovation initiatives. The company’s line of IP software solutions are used for patent research, infringement analysis, product R&D strategy, licensing revenue development, patent-based business intelligence, portfolio management, and technology investment.

David joins PatentCafe from Hoover’s (a Dunn & Bradstreet Company), where he was National Director of Sales.

Previously, with Thomson Scientific, he was the Director of Global Sales and Client Services for Thomson’s patent information companies (Dephion, Derwent, Micropatent, Aureka, IIS). At Thomson, David designed and executed the company-wide organizational model that resulted in the doubling of the average monthly business production.

Read the full press release here.

CAT Patent Infringement Suits Could Spread to Others in Prepaid

An April 2008 featured article by Paybefore (an industry resource for prepaid and stored value cards) staff states, in part:

Chicago-based Card Activation Technologies, Inc. (CAT) is suing major retailers, including Barnes & Noble, Aeropostale, OfficeMax, TJX Companies, Sears and Walgreen Co. for infringement of its patent related to gift card activation and processing.

While the company’s focus is squarely on retailers, for now, lead counsel Mark D. Roth, of Orum & Roth LLC, tells Paybefore that there are other potential infringers, such as banks, processors and even terminal manufacturers that CAT could pursue in the future.

The full article is available to subscribers here.

CAT stated the following in an April 23, 2008 press release:

The Card Activation patent relates to a method used by most retailers for processing debit styled cards, which include gift cards and phone cards. Card Activation currently has lawsuits pending against Walgreen Company (NYSE:WAG), Sears Holding Corporation (Nasdaq:SHLD), TJX Companies (NYSE:TJX) and OfficeMax ((NYSE:OMX), as well as Barnes & Noble and Aeropastale. Card Activation has also placed on notice approximately 600 retailers relating to their potential infringement of the patent.

GUEST BLOG: In re Bilski Roll Call

By Charles R. Macedo, Amster Rothstein & Ebenstein LLP, cmacedo@arelaw.com[i]

On May 8, 2008, the Federal Circuit will be hearing oral argument in the In re Bilski case on the issue of what is a patent-eligible process.   There have been over twenty amici curiae briefs submitted.  These “friends of the Court” are from a wide range of industries and professions, including the financial services and sales sector, the computer and software sector, the biotechnology and pharmaceuticals sector, as well as legal and other associations and academics. 

In today’s IP Law 360, we have published a Roll Call and Score Card of the amici briefs (Download docs1396650v1bilski_roll_call.DOC).  A copy will also be available at our firm website: www.arelaw.com/articles/index.html.   We provide here a Roll Call of the amici parties sorted by industry with links to their amici briefs (where available):

Financial Services and Sales Sector

Since the Bilski claim at issue is directed to a financial service product (i.e., a method of managing risk), the industry that most obviously is directly interested in the outcome of this case is the financial service and sales sector.  In this regard, there are five submissions from the financial services and sales sector, including the submissions by: Reserve Management Corporation, PCT Capital LLC, Rearden Capital Corp. and Sales Optimization Group (“Reserve et al”), American Express Company (“AmEx”), Regulatory DataCorp, Inc. (“RDC”), CFPH, Inc. (“CFPH”), Financial Services Industry (“FSI”), and Pacific Life Insurance Company, The Hartford Financial Services Group, Inc., and John Hancock Life Insurance Company (U.S.A.) (not available).  (The author is principal attorney on Reserve et al submission).

Computer Software and Hardware Sector

A number of the questions posed by the Federal Circuit are directed to issues impacting the patentability of computer software and hardware, e.g., whether an process needs to be tied to a machine or needs to transform matter in order to be patent-eligible (Question 4).  There are seven briefs submitted by corporations in the software and computer sector, including the submissions by Accenture (“Accenture”), Koninklijke Philips Electronics N.V. (“Philips”), SAP America, Inc. (“SAP”), Yahoo! Inc. and Professor Robert P. Merges (“Yahoo!”), Dell, Inc., Microsoft Corporation, and Symantec Corporation (“Dell/Microsoft/Symantec”), International Business Machines Corporation (“IBM”), and Red Hat, Inc. (“Red Hat“).

Biotechnology and Pharmaceutical Sector

Much of the debate challenging the State Street “useful, concrete and tangible result” test for patent-eligible subject matter centers around comments made by Justice Breyer in his dissent from the dismissal of a petition for certiorari in Lab Corp. of Am. Holdings v Metabolite Labs., Inc., 126 S. Ct. 2921, 2928 (2006) (Breyer, J. dissenting), where he questioned the applicability of that test to pre-Diehr decisions by the Supreme Court.  The Lab Corp. case involved a claim directed to a method of diagnosing a disease.  In that petition, several members of the financial service sector weighed in on the debate because it appeared that the Supreme Court may address the State Street test.  Thus, it is perhaps not surprising that the biotechnology and pharmaceutical sector has in turn weighed in on Bilski.  In particular, to present two diametrically opposing views, briefs were submitted by the Biotechnology Industry Organization (“BIO”) (arguing in favor of a broad view of patent-eligible processes), and Eli Lilly and Company and The Association of American Medical Colleges (“Eli Lilly”) (arguing for a narrow view of patent-eligible processes).        

Associations 

A dozen different industry and law associations submitted amici briefs to the Federal Circuit in Bilski, including the American Intellectual Property Law Association (“AIPLA”), the Boston Patent Law Association (“BPLA“), the Federal Circuit Bar Association (“FCBA “), the Houston Intellectual Property Law Association (“HIPLA”), the Business Software Alliance (“BSA”), the Washington State Patent Law Association (“WSPLA“), the Intellectual Property Owners Association (“IPO”), the American Institute of Certified Public Accountants (“AICPA “), the Computer & Communications Industry Association (“CCIA”), the Software & Information Industry Association (“SIIA“), the Federation International Des Conseils En Propriete Industrielle (“FICPI”), the Consumers Union, the Electronic Frontier Foundation, and the Public Knowledge  (“CU/EFF/PK”), the American Civil Liberties Union (“ACLU”), and End Software Patents (“ESP”).   Significantly, the patent law associations generally favor a broader scope of patent-eligible subject matter, while the non-patent lawyer associations seek a narrower scope of patent-eligible subject matter or in some cases, simply propose rules that would eliminate patent protection. 

Academic

Perhaps because of the academic nature of the questions being posed --e.g., what should be the scope of patent-eligible processes -- a large number of academics have also weighed in with their own amici curiae submissions.  These briefs include both collective and individual briefs by academics, including:  22 Law and Business Professors (“22 Prof.”), Roberta J. Morris, Esq., Ph.D. (“Morris”), Jason V. Morgan (“Morgan”), Gregory Aharonian (“Aharonian”), Professor Robert P. Merges  (see Yahoo!), Professor John Duffy (see RDC), 10 Law Professors (“10 Prof.”), Professor Lee A. Hollaar (“Hollar”), Professor Kevin Emerson Collins (“Collins“), William Mitchell College of Law Intellectual Property Institute (“WMC”).


[i] Charles R. Macedo is a Partner at Amster, Rothstein & Ebenstein, LLP.  His practices specializes on intellectual property issues including litigating patent, trademark and other intellectual property disputes, prosecuting patents before the U.S. Patent and Trademark Office, and other patent offices throughout the world, registering trademarks and service marks with U.S. Patent and Trademark Office, and other trademark offices throughout the world, and drafting and negotiating intellectual property agreements.  He may be reached at cmacedo@arelaw.com.  This article is not intended to express the views of the firm or its clients.  Mr. Macedo was principal attorney on the amici curiae brief submitted on behalf of Reserve Management Corporation, PCT Capital LLC, Rearden Capital Corp. and Sales Optimization Group in In re Bilski.

Rambus Defeats FTC

A reader provided the following press release issued today, April 22, 2008, by The Voluntary Trade Council, Inc.:

The Federal Trade Commission's long-running prosecution of Rambus Inc. [NASDAQ:RMBS] suffered a critical defeat today after a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit unanimously vacated the agency's 2007 decision against the company and ordered a new trial to address "serious concerns about the sufficiency of the evidence" in the case.

In a 24-page opinion authored by Senior Circuit Judge Stephen F. Williams, the D.C. Circuit said the FTC "failed to sustain its allegation of monopolization" based on Rambus' alleged deception before a computer memory standard-setting organization. The Court declined to extend Section 2 of the Sherman Antitrust Act to include "deceit merely enabling a monopolist to charge higher prices than it otherwise could have charged." Furthermore, the Court expressed doubt that the FTC had proved Rambus engaged in any deceptive conduct at all.

Skip Oliva, president of the Voluntary Trade Council, filed a brief with the D.C. Circuit supporting Rambus. He said today, "The D.C. Circuit made the right decision. The FTC attempted to expand its own power without any basis in existing antitrust doctrine--and without any credible evidence of wrongdoing by Rambus--and the court of appeals appropriately restrained the illegal actions of an unprincipled executive branch agency."

The D.C. Circuit's decision does not immediately end the Rambus litigation. The court's order merely returns the case to the FTC for possible retrial under the ground rule set by the court's opinion. The FTC could try to reinstate its original decision, however, through an appeal to the full D.C. Circuit or to the U.S. Supreme Court. The FTC could also decline to retry the case and dismiss its 2002 administrative complaint against the company.

Justin Muchoney Gets Dream Job

Justin Congratulations! 
Justin Muchoney
2008 Disney Parks Chief Magic Official

After months of grueling campaigning culminating in a two-day climax of in-Park competitions, Justin Muchoney claims the victory as the Disney Parks Chief Magic Official! Be sure to come back in May to find out the latest on Justin's CMO activities. Meanwhile you can still check out the videos of the CMO competitions at Walt Disney World© Resort.

Watch a replay of this morning's winner announcement live webcast.

e-Discovery Special Masters

Chere Estrin, CEO of Estrin LegalEd and owner of The Estrin Report blog, wrote on February 11, 2008:

I'm telling you, when a field pops, it really pops.  Apparently, the increased use of electronic discovery has resulted in a new set of practitioners: e-discovery special masters.

According to The Daily Record, a special master is an officer of the court appointed to help with its proceedings, and may perform functions such as taking testimony or advising the court as a neutral expert.

Essentially, you represent the judge and the court as an independent in evaluating technological disputes and electronic discovery issues,” explained Peter S. Vogel, chair of the Electronic Discovery and Document Retention Team and co-chair of the Internet and Computer Technology Practice Group at Gardere Wynne Sewell in Dallas.

Vogel, a partner at the firm, has worked on more than 20 cases with some form of an e-discovery special master. The role varies, explained Judge Shira Scheindlin, a U.S. District Court judge in the Southern District of New York and the author of several seminal opinions on e-discovery, including Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004).

Read the full post here.

Collecting Evidence of Infringement

In a presentation to the Boston Entrepreneurs' Network on January 3, 2006, Brian T. Moriarty of Hamilton, Brook, Smith & Reynolds, P.C. made the following observations about patent infringement investigations:

Collecting Evidence of Infringement

• Hunches and “I know it” DON’T work
• Go get proof
• Document your search
• Keep your lawyer in the loop and keep it confidential

Market Intelligence

• Web sites
• Patent applications
• Trade shows
• Trade journals
• Sales material
• Other lawsuits
• Word-of-mouth

Collecting Evidence

• Must be honest
• No illegal collecting of evidence
• No spying or fraud
• Can be aggressive, can’t be dishonest
• Everything you do will be second guessed

Analyze the Evidence

• Critically analyze evidence
• With valid scientific tests and methods
• Compare evidence with claims
• MAKE A CLAIM CHART

Develop Your Proof

• Can your theory of infringement be clearly explained?
• If not, something is wrong
• Every element must be included

See the full presentation here.