Philip Brooks' Patent Infringement Updates

Howrey Loses $250 Million IP Verdict in East Texas

An article appearing in today's (May 30, 2008) issue of Texas Lawyer by Nate Raymond of The American Lawyer states:

On May 28, a federal jury in the Eastern District of Texas gave a big win to Sam Baxter of Dallas-based McKool Smith, awarding his client, Medtronic, $250 million in a patent infringement case against Boston Scientific. Howrey represented Boston Scientific.

The suit, filed in March 2006, claimed that certain Boston Scientific balloon catheters and stents infringed four Medtronic patents. Howrey won a summary judgment of non-infringement on one of the patents and a pre-trial dismissal of Medtronic's claim of willful infringement. But the jury ruled Boston Scientific had infringed the remaining three patents and threw out Medtronic's invalidity argument.

Boston Scientific's loss comes despite a trend toward defense wins in the historically plaintiffs-friendly Eastern District of Texas. In 2007, defendants won seven out of nine trials. That trend seemed at first to be continuing this year ? a jury in January found Alcatel-Lucent hadn't infringed Dell patents. But since then, plaintiffs have been on the rebound. To date, defendants have lost five out of seven patent trials in East Texas, according to Marshall-based attorney Michael Smith of Siebman, Reynolds, Burg, Phillips & Smith, who maintains a blog tracking happenings in the federal courts there.

Read the full article here.

PatentCafe Adds New Patent Quality Reports to Its Free CAFC Library

The following is excerpted from a May 28, 2008 PatentCafe press release:

The new Patent Factor Index (PFi) Reports, available for public downloading without cost, statistically score more than 2 dozen indicators of patent quality, many of the indices correlating directly to how the CAFC has decided on cases involving these patents.

The reports correlate with the decisions of the court, projecting strengths and weaknesses of patents in suit onto the verdicts. To name a few:

• in Microprocessor Enhancement v. Texas Instruments, the Court found patent US 5,471,593 not to be infringed, and the respective Patent Factor report shows this patent to have negative scores on relevancy strength, novelty and claim scope breadth;
• in Energizer Holdings v. Int'l Trade Commission, the Court found several claims of US patent 5,464,709 to be invalid, and therefore found patent not to be infringed by a group of Chinese manufacturers. This patent scored low on relevancy strength, novelty and validity confidence in the Patent Factor Report;
• in Mangosoft v. Oracle, patent # 6,148,377 showed low scores on novelty and sustainability in opposition, and the patent in suit has been indeed found not infringed by the Court.

The time frame covered by the reports includes CAFC decisions starting May 2007, and is updated the day following new CAFC decisions.

The Enterprise Future Of Semantic Search

J. Nicholas Hoover writing in the May 19, 2008 print issue of Information Week states:

Powerset launched a tool to search Wikipedia and open source database Freebase Monday, but the technology that powers the search startup could wind up at home in a corporate setting.

Powerset specializes in what's become known as natural language or semantic search. Rather than relying exclusively or primarily only on linking algorithms, as Google (NSDQ: GOOG) and other major Web search engines do, Powerset also uses an "ontology" of syntax, grammar, and sentence structure and, to a lesser extent, thesauri, in an attempt to pull meaning from queries and Web pages -- or in the case of businesses, eventually documents and files. "Search is only a small part of the engine here," Powerset CTO Barney Pell said in an interview. "Really, it's a content understanding engine."

Other search companies are getting in on the semantic game as well, and are looking toward businesses as potential customers.

• Startup Hakia has begun targeting users searching for legal, medical, and financial information, and licensed its technology to a startup that summarizes information for law enforcement, government agencies, and pharmaceutical companies.
• Semantra is a new enterprise search start-up focused exclusively on semantic search, and does what it calls "conversational analytics" for Microsoft (NSDQ: MSFT) CRM and all major relational databases.
• Q-Go is a Dutch company that does natural language in several verticals. Its customers include DHL, KLM, and Deutsche Telekom.
• Cognition similarly does vertical search with a natural language angle, and has its own Wikipedia search.
• Inquira uses natural language search in its customer service app to help support staff answer broad or unclear questions, and counts among its customers Honda, SunTrust, and Honeywell.
• Astute Solutions' RealDialog uses natural language processing for Web self service support
• Even the major Web and corporate search companies, including Google, IBM, and Microsoft, have their own semantic search efforts under way.

Post your comments on your experiences with these other search companies.  Access links and the full article here.

C5's Advanced Forum on Intellectual Asset Mangement for High Tech Industries

As the number of patent applications related to computer implemented business methods and technologies grows, so does the complexity of managing high tech IP portfolios. Against this backdrop, strategy focused companies are responding by taking the necessary steps to avoid risk and maintain a competitive edge within the market by reassessing their intellectual asset management policies.

Join us at C5's Advanced Forum on Intellectual Asset Management for High Tech Industries, the only European event bringing together a high number of corporate attendees from a cross section of technology dependent industries and geographies, to discuss best practices. As well as assembling a world class faculty and first rate opportunities for in-depth learning through workshops, case study presentations, case law and legislative updates, the conference offers unique networking opportunities.

Register today by calling +44 [0] 20 7878 6888, by faxing your registration form to +44 [0] 20 7878 6896 or by registering online.  Ayo Fagbohun, Business Development Manager, UK & Western Europe for C5 Global Conferences has offered a 30% discount on the printed fee to attendees who mention Philip Brooks' Patent Infringement Updates when they register.

Also, don't forget to sign up for the Master Class on Thursday 3 July 2008, "Maximising the Efficiency of Your Patent Mining Operations", which will be facilitated by Daniel Ebenstein and Charles Macedo, partners at Amster Rothstein & Ebenstein LLP.

That's Settled: Micro Backs Tessera Patents

The following is excerpted from an article today, May 23, 2008, at Forbes.com written by Melinda Peer:

Tessera Technologies' resilient patents just got stronger--and so did the tech company's stock price as Micro Electronics took licenses on the firm's miniaturized chip package technology.

Shares of the San Jose, Calif.-based Tessera Technologies (nasdaq: TSRA) rallied 7.8%, gaining $1.46 at $20.16 in Friday's afternoon trading session.

Under the settlement announced Thursday, Micro Electronics agreed to pay royalties on all past and future sales of its branded products that use Tessera's technology.

But even sweeter than the payments, which aren't expected to materially affect Tessera's sales, was the validation. Micro Electronics and its subsidiary, International Products Sourcing Group, agreed that Tessera's patents "are valid and infringed by the accused products in the action." The corroboration tips the scales in Tessera's favor against the 13 remaining respondents implicated in the International Trade Commission action brought by Tessera.

Read the full article here.

Allstate Chief Contemplates Value of its Patents

The following is excerpted from an article today, May 23, 2008, by Becky Yerak in the Chicago Tribune Web Edition:

Allstate, which this month introduced new financial products such as ClearTarget Retirement Funds and Guaranteed Lifetime Income, wants to protect such existing products as Your Choice Auto, which offers options for motorists depending on whether they care about cheap or comprehensive coverage.

"Your Choice Auto continues to be very successful," Wilson said in an interview in late March. "People are starting to copy it now, though. It looks like Farmers has something similar, so we're trying to figure out whether to sue them on the patent."

Farmers Insurance spokesman Jerry Davies said in response last month that its Farmers Flex auto package was brought to market "after considerable consumer research and after receiving regulatory approval in states where it is offered." The product enables motorists to lock in base rates for up to three years in most states.

"Most insurers have many similar auto policy features and some unique ones," Davies said. "Insurance consumers will choose for themselves, and all insurance companies should stay focused on serving customers in the most productive way possible."

As of Thursday, Allstate hadn't filed a patent infringement suit against Farmers, an Allstate spokesman said.

On a broader scale, Wilson has been weighing the value of patents for Allstate.

"The test will be on things like Farmers. I've said to our team, 'We've spent all this money on patents. If we think they're protection, let's use them. And if we're not going to use them, let's quit doing them,' " he said. "I don't want to spend money getting a patent just to make ourselves feel good.

"Right now in financial services, we're wondering how strong will patents be and how good will they be for us. Or is the answer to be faster than everyone else?"

Read the full article here.

Court of Appeals Rules on Disputed Terms from Markman Hearing in decisioning.com Case

The following is from a May 7, 2008 Affinity Technology Group, Inc. press release published at Business Wire:

Affinity Technology Group, Inc. (OTCBB: AFFI) today announced that the United States Court of Appeals for the Federal Circuit (the “Appeals Court”) has published its opinion in the cases of its subsidiary, decisioning.com versus Federated Department Stores, TD Ameritrade and HSBC Finance Corporation. The principal issues decided by the Appeals Court involved the definition of certain terms which were the basis for the summary judgment order issued by the United States District Court for the District of South Carolina in which the cases against Federated, TD Ameritrade and HSBC were dismissed in 2007. The terms in dispute were the result of a Markman hearing held in December 2006 and included the terms “remote interface,” “verify the applicant’s identity” and “compare…and….”

In its opinion, the Appeals Court unanimously overturned and revised the District Court’s definitions of all the disputed claim terms. The Appeals Court revised the terms “verify the applicant’s identity” and “compare…and…” in the exact manner requested by and favorable to decisioning.com. However, the Appeals Court in a split decision (2-1) revised the term “remote interface” in a manner unfavorable to decisioning.com. In summary, the Appeals Court ruled that a remote interface as used in U.S. Patent No. 6,105,007, decisioning.com’s patent which covers the automated establishment of financial accounts, does not include a personal computer owned by a consumer. Rather, the Appeals Court limited the term “remote interface” to those that are publicly accessible and specifically excluded consumer-owned personal computers from the definition. One Judge on the panel wrote a dissenting opinion construing remote interface in a manner consistent with the request of decisioning.com.

The Appeals Court affirmed the dismissal of the case against Federated and vacated in part and remanded the cases against TD Ameritrade and HSBC.

Read the full press release here.

Pre-Filing Investigation of Patent Infringement When Reviewing a Motion for Attorney Fees

An April 1, 2008 post by Lawrence M. Sung, Ph.D., Partner, Dewey & LeBoeuf LLP and Professor & Intellectual Property Law Program Director, University of Maryland School of Law titled, "How the Federal Circuit Looks at a Pre-Filing Investigation of Patent Infringement When Reviewing a Motion for Attorney Fees under 35 U.S.C. 285" appears at LexisNexis' Patent Law Center.

The adequacy of a patentee plaintiff’s pre-infringement suit investigation follows one path in the normal case, but quite a different path when a motion for attorney fees under 35 U.S.C. § 285 is in play. This commentary, written by Lawrence M. Sung, Ph.D., addresses the potential unintended consequences of seeking redress for an inadequate pre-filing investigation solely under the rubric of a motion for attorney fees under 35 U.S.C. § 285. Dr. Sung writes:

Federal Rule of Civil Procedure, Rule 11 … provides for sanctions for a failure to conduct a reasonable inquiry into the legal and factual bases of claims. … Another procedural path to seek redress for a [patent infringement] plaintiff’s deficient pre-filing investigation is through a motion under 35 U.S.C. § 285, which grants the district court discretion to award reasonable attorney fees to the prevailing party in exceptional cases. A case may be deemed exceptional when there has been some material inappropriate conduct related to the matter in litigation. This includes conduct that violates Fed. R. Civ. P. 11, but also includes willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, and vexatious or unjustified litigation. A key difference between motions under Fed. R. Civ. P. 11 and § 285 is that Fed. R. Civ. P. 11 motions must comply with the Rule’s safe harbor provision, but § 285 motions need not.

On appeal, the Federal Circuit reminded that the determination of whether a case is exceptional and, thus, eligible for and warranting an award of attorney fees under § 285 is a two-step process in which the district court must (1) determine whether there is clear and convincing evidence that a case is exceptional, a factual determination reviewed for clear error, and (2) if so, then determine in its discretion whether an award of attorney fees is justified, a determination that the Federal Circuit reviews for an abuse of discretion. If there is clear and convincing evidence that a plaintiff has brought a baseless or frivolous suit against an accused infringer, that is a sufficient basis to require a district court to deem the case exceptional under § 285.

Excerpts of the post are available here, but access to the full article requires a subscription.

NICE Intends to Seek Overturn of Verdict

The following is excerpted from a May 18, 2008 NICE Systems' press release:

NICE Systems (Nasdaq: NICE) announced today that in a patent infringement case brought
in January 2006 against NICE Systems Inc. and NICE Systems Ltd. by Verint Americas, Inc. (formerly Witness Systems, Inc.) in the Federal District Court for Northern Georgia in Atlanta, the jury determined that certain features of NICE's analytics products infringe two claims of Witness' US patent 6404857. The jury also determined that NICE should pay $3.3 million in damages.

NICE intends to ask the trial court to overturn the verdict based on legal arguments, and, if necessary, to appeal the decision.

See the full press release here.

Rambus' Injunction Brief

In a follow-up to yesterday's post a reader has provided a copy of Rambus' Injunction Brief.  The hearing is scheduled for June 24, 2008.

In the 2006 patent trial, the jury awarded Rambus $306,967,272 in damages for Hynix’s sales of infringing products through December 31, 2005. By order dated July 14, 2006, the Court remitted the jury’s award of damages to $133,584,129. See Jul. 14, 2006 Order (the “Remittitur Order”). The Court reached this figure by applying a 1% royalty rate to the amount of Hynix’s SDRAM sales through the end of 2005, and a 4.25% royalty rate to the amount of Hynix’s DDR SDRAM sales through the end of 2005.

Rambus now seeks a supplemental damages award to compensate it for Hynix’s infringement between January 1, 2006 and the date on which final judgment is entered, as well as an award of prejudgment interest on the entire damages amount.

Download rambus_injunction.pdf