• Patent Filings Roundup: Centripetal Sees More IPRs; Microsoft Engineer Sues Seven in Waco
    in: courts, District Courts, Government, Guest Contributor, Guest Contributors, Intellectual Property, inter partes review, IP News, IPR, IPWatchdog Articles, Litigation, patent filings roundup, Patent Litigation, patent trial and appeal board, Patently-O, patents, PTAB, USPTO  | 

    Patent Filings Roundup: Centripetal Sees More IPRs; Microsoft Engineer Sues Seven in Waco

    Another light summer week in the patent world saw just 19 new petitions (all inter partes reviews [IPRs]), with 65 new district court cases (roughly average), including 75 newly terminated cases.  Five petitions were denied, with six granted; Peloton appears to have settled their dispute with Ifit (and dismissed the five related IPRs and district court suit); Peloton has been targeted by a few others. Flexiworld expanded its campaign against a number of Chinese and other foreign entities; Zoom…

  • INTA Asks Second Circuit to Limit Rogers’ Definition of ‘Expressive Work’ to Prevent Application of Test on Ordinary Consumer Products
    in: Circuit Courts of Appeal, courts, District Courts, expressive works, INTA, Intellectual Property, International Trademark Association, IP News, IPWatchdog Articles, Litigation, Rogers v. Grimaldi, trademark, trademarks, Vans v. MSCHF Product Studio  | 

    INTA Asks Second Circuit to Limit Rogers’ Definition of ‘Expressive Work’ to Prevent Application of Test on Ordinary Consumer Products

    On June 24, the International Trademark Association (INTA) filed an amicus brief in Vans, Inc. v. MSCHF Product Studio, Inc., a case currently on appeal from the Eastern District of New York to the U.S. Court of Appeals for the Second Circuit. In the brief, INTA urges the Second Circuit to clarify the kinds of “expressive works” to which the Rogers test may be applied, and in such a way that the use of Vans trade dress on sneakers sold by MSCHF Product Studio would be actionable for…

  • Senator Leahy Statement on proposed PTAB Reform Act of 2022
    in: Fintiv, IPRs, patents, Post-Grant Review, PTAB Reform Act, Senator Leahy  | 

    Senator Leahy Statement on proposed PTAB Reform Act of 2022

    Senator Patrick Leahy, who is chair of the Senate IP Subcommittee, has released a statement concerning the bipartisan proposed PTAB Reform Act of 2022.  The statement provides:

    Patents drive our economy, allowing innovators to do what they do best while knowing they can reap the benefits of their hard work.  Good quality patents thus give small businesses and inventors certainty that they can defend their inventions from others who didn’t put in the work. Without the rights guaranteed by patents, the engine of our economy, American innovation, simply would not be as strong.  

    Given the power that a patent conveys, though, a patent issued by the U.S. Patent and Trademark Office needs to actually represent innovation.  There are serious consequences for our entire economy when the system permits enforcement of a patent that never should have issued.  Vermonters and small businesses all across the country have suffered these consequences.  Several years ago, an out-of-state company asserted poor-quality patents against dozens of Vermont small businesses and non-profits, demanding payments for each and every time a business scanned a document and then emailed it. It was a scam. And it was an egregious abuse of our patent system.    

    That is why I am proud of the work we did in 2011to pass the Leahy-Smith America Invents Act, which allowed the public to take their concerns about a questionable patent back to the Patent Office for a more in-depth review.  Through proceedings created by the Leahy-Smith Act, the scan-to-email patents were brought back to the Patent Office and invalidated, allowing Vermont companies and non-profits to continue their important work.  The Patent Trial and Appeal Board, or PTAB, created under the Act, resolved those disputes in a way that was faster, less expensive, and more accurate than a district court because the disputes were overseen by technically trained patent judges under a strict deadline.  In the past decade of the PTAB’s existence, the public has brought thousands of patents to the Patent Office’s attention, and the Patent Office has expertly addressed validity, reinforcing the strength of high-quality patents and cancelling ones that never should have issued. 

    As with any big new undertaking, that success has also brought new questions. And all enacted laws—particularly those dealing with ever-evolving technologies and science—need to be revisited and updated from time to time. That is why I am thrilled that Ranking Member Tillis, Senator Cornyn, and I just last week introduced the PTAB Reform Act of 2022.  We gathered feedback from participants in the patent system, including the public broadly and businesses across the country covering a vast array sectors and technologies.  We looked at concerns from all corners and presented a series of different options for addressing them.  This bill, the product of months of hard work and compromise, addresses the biggest concerns of stakeholders from across the spectrum.  This bill will update the PTAB so it can continue its important work into the next decade and beyond.

    This is important legislation for a number of reasons.  One big question it addresses:  If a petition to the Patent Office to review a patent is meritorious on its face, should the Patent Office decline review anyway?  Many believe that all meritorious petitions should result in a review.  Many others believe that it is harassing to patent owners to have the same members of the public able to request review of the same patent repeatedly over time, when the patent owner has already defended the patent.  We addressed these issues—as we often do in the Senate—through compromise.  While meritorious petitions to review a patent should generally be granted, serial petitions over time from the same or related parties will not be allowed.

    Another big question:  Who has the authority to make a final validity decision, civil-servant PTAB judges or the politically appointed Director of the Patent Office?  While the Supreme Court last year resolved that the Director is the final decision-maker, it left open questions about how the Director may make decisions.  This bill ensures that the decision-making process must be open to the public.  The public has a right to know when independent PTAB judges are making a decision, and when a politically-appointed Director is making a decision. We should not have a patent system where any given PTO Director can influence and decree decisions non-transparently and behind the scenes.

    Our bill also addresses a concern raised by small business patent owners:  They had to pay to apply for a patent and then may have to pay again to defend it at the PTAB.  This is expensive, and we want to help small businesses shoulder the expense.  Thus, if a small entity has not already decided to undertake the expense of litigation, the Patent Office will cover the expense of a PTAB proceeding for that small business under our bill. 

    . . . 

    I know that Ranking Member Tillis and Senator Cornyn share my belief that the patent system should work well for all Americans and all sectors of our economy.  I look forward to continuing the bipartisan work of our IP Subcommittee to help deliver real improvements to our patent system. I want to leave behind an even stronger patent system that further empowers America’s greatest natural resource: our ingenuity and innovation. 

Patent Filings Roundup: Centripetal Sees More IPRs; Microsoft Engineer Sues Seven in Waco

Another light summer week in the patent world saw just 19 new petitions (all inter partes reviews [IPRs]), with 65 new district court cases (roughly average), including 75 newly terminated cases.  Five petitions were denied, with six granted; Peloton appears to have settled their dispute with Ifit (and dismissed the five related IPRs and district court suit); Peloton has been targeted by a few others. Flexiworld expanded its campaign against a number of Chinese and other foreign entities; Zoom…

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  • Senator Leahy Statement on proposed PTAB Reform Act of 2022

    Senator Patrick Leahy, who is chair of the Senate IP Subcommittee, has released a statement concerning the bipartisan proposed PTAB Reform Act of 2022.  The statement provides:

    Patents drive our economy, allowing innovators to do what they do best while knowing they can reap the benefits of their hard work.  Good quality patents thus give small businesses and inventors certainty that they can defend their inventions from others who didn’t put in the work. Without the rights guaranteed by patents, the engine of our economy, American innovation, simply would not be as strong.  

    Given the power that a patent conveys, though, a patent issued by the U.S. Patent and Trademark Office needs to actually represent innovation.  There are serious consequences for our entire economy when the system permits enforcement of a patent that never should have issued.  Vermonters and small businesses all across the country have suffered these consequences.  Several years ago, an out-of-state company asserted poor-quality patents against dozens of Vermont small businesses and non-profits, demanding payments for each and every time a business scanned a document and then emailed it. It was a scam. And it was an egregious abuse of our patent system.    

    That is why I am proud of the work we did in 2011to pass the Leahy-Smith America Invents Act, which allowed the public to take their concerns about a questionable patent back to the Patent Office for a more in-depth review.  Through proceedings created by the Leahy-Smith Act, the scan-to-email patents were brought back to the Patent Office and invalidated, allowing Vermont companies and non-profits to continue their important work.  The Patent Trial and Appeal Board, or PTAB, created under the Act, resolved those disputes in a way that was faster, less expensive, and more accurate than a district court because the disputes were overseen by technically trained patent judges under a strict deadline.  In the past decade of the PTAB’s existence, the public has brought thousands of patents to the Patent Office’s attention, and the Patent Office has expertly addressed validity, reinforcing the strength of high-quality patents and cancelling ones that never should have issued. 

    As with any big new undertaking, that success has also brought new questions. And all enacted laws—particularly those dealing with ever-evolving technologies and science—need to be revisited and updated from time to time. That is why I am thrilled that Ranking Member Tillis, Senator Cornyn, and I just last week introduced the PTAB Reform Act of 2022.  We gathered feedback from participants in the patent system, including the public broadly and businesses across the country covering a vast array sectors and technologies.  We looked at concerns from all corners and presented a series of different options for addressing them.  This bill, the product of months of hard work and compromise, addresses the biggest concerns of stakeholders from across the spectrum.  This bill will update the PTAB so it can continue its important work into the next decade and beyond.

    This is important legislation for a number of reasons.  One big question it addresses:  If a petition to the Patent Office to review a patent is meritorious on its face, should the Patent Office decline review anyway?  Many believe that all meritorious petitions should result in a review.  Many others believe that it is harassing to patent owners to have the same members of the public able to request review of the same patent repeatedly over time, when the patent owner has already defended the patent.  We addressed these issues—as we often do in the Senate—through compromise.  While meritorious petitions to review a patent should generally be granted, serial petitions over time from the same or related parties will not be allowed.

    Another big question:  Who has the authority to make a final validity decision, civil-servant PTAB judges or the politically appointed Director of the Patent Office?  While the Supreme Court last year resolved that the Director is the final decision-maker, it left open questions about how the Director may make decisions.  This bill ensures that the decision-making process must be open to the public.  The public has a right to know when independent PTAB judges are making a decision, and when a politically-appointed Director is making a decision. We should not have a patent system where any given PTO Director can influence and decree decisions non-transparently and behind the scenes.

    Our bill also addresses a concern raised by small business patent owners:  They had to pay to apply for a patent and then may have to pay again to defend it at the PTAB.  This is expensive, and we want to help small businesses shoulder the expense.  Thus, if a small entity has not already decided to undertake the expense of litigation, the Patent Office will cover the expense of a PTAB proceeding for that small business under our bill. 

    . . . 

    I know that Ranking Member Tillis and Senator Cornyn share my belief that the patent system should work well for all Americans and all sectors of our economy.  I look forward to continuing the bipartisan work of our IP Subcommittee to help deliver real improvements to our patent system. I want to leave behind an even stronger patent system that further empowers America’s greatest natural resource: our ingenuity and innovation. 

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  • SCOTUS Kicks Patent Eligibility Cases to the Curb in Last Move of the Term

    The U.S. Supreme Court has denied certiorari in American Axle v. Neapco Holdings, Inc., leaving it up to Congress and the U.S. Patent and Trademark Office (USPTO) to restore any semblance of clarity on U.S. patent eligibility law for now. Many expected that the Court would grant the petition after the U.S. Solicitor General in May recommended granting review. The SG’s brief said that inventions like the one at issue in American Axle have “[h]istorically…long been viewed as paradigmatic examples…

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  • Damages Issues in Recent Canadian Decision

    The case is Rovi Guides, Inc. v. Videotron Ltd., 2022 FC 874, decision by Mr. Justice Lafrenière.  The court holds that the claims of the patents in suit, which relate to interactive television program guides, are invalid, so the discussion of damages (beginning at para. 543) is dictum only (but could be relevant, I assume, if on appeal the invalidity or infringement determinations were to be reversed).  The plaintiff sought an accounting of profits or, in the alternative, a reasonable royalty. 

    The defendant initially agreed to a portfolio license of Rovi patents, according to the court, primarily to avoid suit:  “freedom from suit was the primary motivating factor that led Videotron to accept to pay the royalty rates that were ultimately negotiated, and not the value of any particular patents in Rovi’s portfolio, as evidenced by the fact that Videotron did not perform any analysis of the market value of different features covered by the patents in the Rovi portfolio before entering into the Licence Agreement” (para. 568).  When it came time to renew the license, Rovi sought a much higher rate; Videotron agreed to a one-year extension, but the parties never came to terms on a longer extension, and litigation ensued (paras. 572-78).

    First, then, on the issue of accounting of profits, the court writes “In Apotex Inc v Bayer Inc, 2018 FCA 32 at para 15, the Federal Court of Appeal reiterates the various factors to consider in deciding whether to award an accounting of profits. These factors include: (i) whether there has been undue delay in commencing or prosecuting the litigation; (ii) the patentee’s conduct; (iii) the infringer’s conduct; (iv) whether the patentee practiced the invention of the patent in Canada; and (v) complexity of calculating an accounting of profits” (para. 581).  Here, the court finds that factors (i), (iii), and (iv) are neutral, but that (ii) and (v) weigh against an accounting.  On (ii), the court states, inter alia, that “[w]hile Rovi kept touting the value of its patent portfolio, it was never prepared to disclose what that portfolio actually comprises,” and “would not reveal a complete list of its patents that it thought Videotron infringed, or even what it referred to as its ‘best patents’” (para. 589).  It also refers to “Rovi’s apparently deliberate strategy of delaying the prosecution of its patents,” which could result in patent holdup (para. 590); states that “the reason why Rovi declined to reveal to Videotron a complete list of specific patent claims it considered infringed was to prevent Videotron from designing around them” (para. 592); and that Rovi did not send a cease and desist letter before commencing litigation (para. 593).  On factor (v), after summarizing the parties’ submissions the court finds that “[w]hile the complexity of the evidence could be overcome, I am not satisfied that using any methods proposed by Rovi’s expert to calculate profits, which would be fraught with insufficient, speculative, and contradicted evidence would allow me to arrive to reliable and appropriate amount reflecting Videotron’s profits” (para. 607).

    Second, as for reasonable royalties, the court writes:

                Videotron submits that should a particular Videotron system feature be found to infringe a valid claim in the Asserted Patents, the appropriate remedy is a one-time reasonable royalty, capped at no more than Videotron’s cost to remove or design-around the subject-matter of the relevant asserted patent claim. The uncontroverted evidence at trial was that the approximate cost for such a design change would have been $150,000 per feature. . . .

     

                Rovi’s expert, Dr. Bazelon agreed that ““non-infringing alternatives do come into willingness to pay and willingness to accept”” and if the infringer has an alternative to practicing it, such a design-around cost is a reasonable upper bound for a royalty.

     

                I am satisfied that Videotron had the wherewithal to come up with workable non-infringing alternatives for the implicated user interface components, which would not have affected its subscriber base. This is evidenced by their regular upgrades to their system.

     

                Taken into account the particular facts of this case, I consider that an appropriate and reasonable royalty would be $150,000 per feature as proposed by Videotron (paras. 611, 620-21, 623).

    Assuming the correctness of the court’s analysis of the facts, its legal analysis seems right to me, in particular its recognition (1) of the risk of patent holdup under some circumstances, and (2) the relevance of noninfringing alternatives to the calculation of reasonable royalties.

    Hat tip to Professor Norman Siebrasse for calling this case to my attention.

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  • Coca-Cola Win Reversed at CAFC in Case Over Indian Soda Trademarks

    The U.S. Court of Appeals for the Federal Circuit (CAFC) today reversed a decision of the U.S. Patent and Trademark Office’s (USPTO’s) Trademark Trial and Appeal Board (TTAB) that had canceled two marks for Thums Up cola and Limca lemon-lime soda owned by Meenaxi Enterprise, Inc. The CAFC held that Coca-Cola had not established a statutory cause of action based on lost sales or reputational injury under Section 14(3) of the Lanham Act and thus reversed the decision. Judge Reyna wrote separately…

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  • USPTO Report Underscores Split on State of U.S. Patent Eligibility Jurisprudence

    The U.S. Patent and Trademark Office (USPTO) has published its study on patent eligibility jurisprudence in response to a March 2021 request from Senators Thom Tillis (R-NC), Mazie Hirono (D-HI), Tom Cotton (R-AR) and Chris Coons (D-DE). The study, titled “Patent eligible subject matter: Public views on the current jurisprudence in the United States,” is based on more than 140 comments received following a USPTO request of July 9, 2021, and unsurprisingly concluded that high-tech and…

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  • CAFC Reverses Contempt Finding for Disclosures of Confidential Discovery Information to Develop Joint Defense Strategy

    On June 28, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued a precedential decision in Static Media LLC v. Leader Accessories LLC reversing a contempt finding entered in the Western District of Wisconsin over alleged violations of a protective order from a design patent infringement case between Static and Leader. Circuit Judge Jimmie Reyna authored a brief dissent from the majority opinion, arguing that Leader’s disclosure of certain confidential information with another…

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  • ‘Reasonable Efforts’ Require Care and Consistency

    At this moment, there is a fellow riding a bus in London who will determine the fate of your secrets. To be more precise, he’s on the Clapham bus; but he has no name. In fact, he’s a fictional character originally imagined by 19th Century journalist Walter Bagehot, who thought that “public opinion” was best described as the “opinion of the bald-headed man at the back of the omnibus.” The idea was picked up by the English courts as a metaphor for the “reasonable person” standard that is applied…

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