Philip Brooks' Patent Infringement Updates

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

Silicon Graphics v. ATI Is A Draw

In an update to my February 12, 2008 post, Kyle Fleming and Josh Ryland of Patent Appeal Tracer write:

ATI appeals from the judgments of Judge Barbara Crabb on the verdicts that Silicon Graphic's  6,650,327 patent valid and enforceable.  The court had previously granted summary judgment of non-infringement to ATI on most of the asserted patent claims, and Silicon Graphics had voluntarily dismissed the rest.

Invalidity. Summary judgment left for trial some infringement claims of the '327 (when used with a non-Microsoft OS) and ATI's counterclaims of invalidity as to the '327 and inequitable conduct.   Silicon Graphics then moved to dismiss its infringement claims and, then, gave a covenant not to sue as to these claims.  It then moved to dismiss the counterclaims for lack of subject matter jurisdiction.  This was done, however, just a day or two before a jury trial was set and, despite the events and motion, it started on schedule.  The jury ultimately concluded that the claims of the '327 were not anticipated based on the references offered by ATI.

Also, after a one day trial to the bench on ATI's counterclaim of inequitable conduct, Judge Crabb ruled that the patents were not unenforceable.

See the full post and document links here.

Rambus Legal Victories Raise Stock Price Target

Philip Zera, an analyst with Algorithm Capital, sent me his most recent research report on Rambus last night.  In his report, Mr. Zera details recent legal decisions affecting Rambus and his expectations on the impact of these decisions.  The following is excerpted from his April 28, 2008 report:

Like other technology licensing companies, Rambus invests tens of millions in research and development every year. Rambus recently reached the 699 patent milestone and they have another 451 patents pending.

Rambus not only develops intellectual property, it protects it. Litigation is an essential part of the Rambus story. Since 2000, Rambus has been involved in numerous legal battles with patent infringers. The recent legal victories with the FTC and in federal court in San Jose were hard fought and expensive.

PROGRESS WITH LITIGATION

Rambus has enjoyed two recent wins in its long running battle to collect royalties due from past patent infringements. On April 22nd, the U.S. Court of Appeals for the Washington D.C. Circuit overturned a Federal Trade Commission determination that Rambus tried to monopolize the memory-chip market. In 2006, the FTC had found that Rambus acted deceptively to obtain patents for its DRAM chips. But the appeals court said "the commission failed to demonstrate that Rambus inflicted any harm on competition," and chided the FTC for having "taken an aggressive interpretation of rather weak evidence."

On March 26th, a U.S. District Court jury in San Jose sided with Rambus in its eight year legal battle with Hynix. After a seven-week trial, the jurors rejected claims by chip-makers Hynix Semiconductor, Micron Technology and Nanya Technology that Rambus had harmed competition in patenting its chip technology. The case was originally filed by Hynix against Rambus in August 2000. Judge Ronald Whyte had split the case into three separate phases. Rambus has now prevailed in all three phases.

Rambus still has other legal battles including the DRAM price fixing case that the U.S. Supreme Court declined to hear and sent back to California as well the separate Samsung and Micron cases.

Rambus’ immediate challenge is to translate the recent legal victories into renewed licensing momentum.  Litigation expenses were $13.2 million, a decrease of $2.9 million from 4Q07 and an increase of $8.3 million from 1Q07.

GUEST BLOG: SOME FIRST HAND IMPRESSIONS OF THE EN BANC BILSKI ORAL ARGUMENT

This guest post was written by Charles R. Macedo, Jung Hahm, Howard Wizenfeld and Norajean McCaffrey. [i]

On May 8, 2008, the U.S. Court of Appeals for the Federal Circuit heard oral arguments in In re Bilski and Warsaw, No. 2007-1130 (Fed. Cir.), to consider the boundaries of patent-eligible subject matter.   While various amici tried to frame the debate to question what, if any, business-related and computer-related inventions should be excluded from patent-eligibility, the argument at the Court focused more narrowly on what types of business-related inventions should be eligible for patent eligibility.

Charley Macedo and Jung Hahm went to the Courthouse to give their first hand impressions of the oral argument.  Mr. Macedo was principal attorney, along with Messrs. Lo Cicero and Hahm, 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.

In addition to Appellants’ counsel, David Hanson, and Acting Solicitor Raymond Chen,  representing the Director of the Patent and Trademark Office (“PTO”), the Court allowed counsel for two of the amici from the financial services  industry to participate in the oral argument: Professor John F. Duffy on behalf of Regulatory DataCorp, Inc. (“RDC”), and Mr. William Lee  on behalf of Bank of America (“BOA”) and certain other financial service entities.  In describing the  scope of patent eligible subject matter, RDC took a broader but more moderate view, whereas BOA took an extremely  narrow view that was, as Mr. Lee phrased it, “at the far end of the bell curve.”

When we arrived at the courthouse an hour and a half before the argument was scheduled to begin, about a hundred people were in line in front of us.  Thereafter, another hundred or so joined the line .  The courtroom was packed with lawyers, press, business people, and even some judges.  This attention, like the over thirty amici submissions, reinforces just how important business-related patents are to the U.S. economy.  While not everyone agrees that business-related patents are beneficial, everyone at yesterday's argument recognized that innovation in this area exists and is important to foster.  If we assume that good patents achieve this goal, then the answer from yesterday's argument should not be to use  the test of patent-eligible subject matter  under Section 101 as an exclusive  filter.  Rather, as Judge Rader suggested at the argument, the answer should be to  also allow the other parts of the Patent Act , such as Sections 102, 103, and/or 112,  to weed out the bad patents.

In the oral argument,  the Court asked five abstract questions about the meaning of the word "abstract" and sought useful, concrete and tangible answers.  Unfortunately, the answers were not forthcoming.  Many members of the Court  seemed reluctant to adopt a “pornography-like” rule  to identify an unpatentable abstract idea: "I know it when I see it."  Such a rule would not provide any guidance to the PTO examiners reviewing business method patent applications.   

The Court therefore turned to the tests proposed by each counsel  to determine whether a process is patent-eligible under Section 101 and pressed them to define the words of their respective tests.  However, it became evident that no satisfactory definitions were available to allow a more refined test.  This demonstrates why, as Professor Duffy advocated, the Court should avoid trying to provide any bright line tests.

During the argument, the PTO said it would not advocate  and could not provide any bright line test.   Exasperated,  Judge Michel asked if the PTO would at least provide even a “blurry line test.”

Whether the Court will be able to muster enough Judges to agree on a majority opinion including the bright line (or even a blurry line) test the Court is seeking remains to be seen.  For now, it appears that the majority of the Court wants to preserve the patent eligibility of software innovations, and recognizes that at least some innovations in information technology should also be patent eligible. Which of those innovations should be included within the realm of patent eligible subject matter  appears to be the focus of the debate by the panel.  If and how the Court reaches  a conclusion is yet to be seen.   

We will be providing a full report on the argument  for IP Law 360 , and suggest readers check out our firm website for a full report:  www.arelaw.com.  Those interested in a copy of the report may also send an e-mail to Charley Macedo at cmacedo@arelaw.com

[i] Charles R. Macedo is a partner and Jung Hahm, Howard Wizenfeld and Norajean McCaffrey are associates at Amster, Rothstein & Ebenstein, LLP.  Their practices specialize in 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 the U.S. Patent and Trademark Office, and other trademark offices throughout the world, and drafting and negotiating intellectual property agreements.  They may be reached at cmacedo@arelaw.com, jhahm@arelaw.com, hwizenfeld@arelaw.com  and nmccaffrey@arelaw.com.  This Guest Blog is not intended to express the views of the firm or its clients.  Mr. Macedo was principal attorney, along with Messrs. Lo Cicero and Hahm, 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.

Chinese Firms Triumph in U.S. Battery Suit

The following China Daily item appeared in the May 6, 2008 issue of China View:

A U.S. court's decision to shoot down the patent infringement claims of a U.S. battery maker has ended a lengthy case against Chinese battery manufacturers and marks the first victory of Chinese enterprises in trade disputes such as this.

"It lasted five years and cost millions of dollars," the China Battery Industry Association said in a press release yesterday, "but the victory marks a perfect ending."      

Experts said the win will put Chinese battery enterprises in a better position to tap overseas markets, the United States in particular, which have seen an annual twofold increase in recent years.

According to Wang Jingzhong, spokesman for the association, battery from China costs only half that of the local ones in the US.

Energizer Holdings, the second largest battery maker in the U.S., in 2003 filed complaints against more than 20 companies, including nine Chinese manufacturers, claiming they had infringed on Eveready's zero-mercury-added patent.

According to an announcement by Hogan & Hartson, the law firm that helped Chinese enterprises with the case, the patent claims were unfounded.

The U.S. Court of Federal Appeals for the Federal Circuit in late April affirmed a previous ruling by the US International Trade Commission (ITC) that Energizer's claim was not valid. It is the final decision on the case since this was the second time Energizer appealed.

Energizer used to ask Chinese manufacturers for $1 million as patent fees plus 2 to 3 cents on each battery sold. "That was unacceptable since we earn only 1 cent on each battery," said Wang from the association.

Read the full article here.

Sidley Announces Settlement of Patent Infringement Claims Against Fourth LED Manufacturer

The following is excerpted from Sidley Austin's May 6, 2008 press release:

Sidley Austin LLP announced today that firm client Professor Gertrude Neumark Rothschild has settled her patent infringement claims against Epistar Corporation, a Taiwanese corporation. The terms of the settlement are undisclosed. The Sidley team consisted of James D. Zirin and Ashe Puri, partner and associate respectively. Peter Toren of Kasowitz, Benson, Torres & Friedman LLP served as co-counsel. Professor Neumark had previously settled patent infringement claims against Toyoda Gosei, a Japanese entity, Osram, a German corporation, and against Philips Lumileds this past May for an undisclosed settlement.

Professor Neumark had alleged that Epistar had infringed U.S. Patent No. 4,904,618, “Process for Doping Crystals of Wide Band Gap Semiconductors,” and U.S. Patent No. 5,252,499, “Wide Band-Gap Semiconductors Having Low Bipolar Resistivity and Method of Formation” through the unauthorized manufacture, importation, use, sale and/or offer for sale of light emitting diodes (“LEDs”) and laser diode created using the processes described and claimed in each of these patents.

Despite the recognized potential of LEDs, their commercial use was initially limited because it was not commercially feasible to produce LEDs in blue, green and other high spectral ranges. Through the process claimed in Professor Neumark’s patents, it has become commercially feasible to produce such LEDs, and they have increasingly gained general acceptance as a superior lighting source.

Read the full press release here.

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.

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.