Patently-O https://patentlyo.com America's leading patent law blog Tue, 18 Dec 2018 22:58:19 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.9 http://www.mbhb.comhttps://patentlyo.com/media/2014/01/mbhb-3b.gifSponsored by MBHB LLP Guest Post by Prof. Yelderman: Which Kinds of Printed Publications Invalidate Patents in Court? http://feedproxy.google.com/~r/PatentlyO/~3/PS0vv-Kc4Gg/yelderman-publications-invalidate.html https://patentlyo.com/patent/2018/12/yelderman-publications-invalidate.html#comments Tue, 18 Dec 2018 16:12:21 +0000 https://patentlyo.com/?p=25896 Guest Post by Prof. Yelderman: Which Kinds of Printed Publications Invalidate Patents in Court?

Stephen Yelderman is a Professor of Law at the University of Notre Dame Law School.

Continuing our study of prior art in the district court, in this post we’ll take a closer look at printed publications. As I discussed in my original post, around 13% of anticipation invalidations and 34% of obviousness invalidations rely on art in this category. (The numbers may be a touch higher than that, as a result of invalidations for which we could not determine the prior art supporting the court’s conclusion). For more background on this project, you can find the full paper here.

The potential sweep of this prior art category is breathtaking. By the terms of the statute—both before and after the America Invents Act—a printed publication found anywhere in the world can qualify as prior art. Moreover, under Federal Circuit precedent, this category includes a number of things that would seem to stretch the colloquial meaning of “publication.” For example, a single copy of a doctoral thesis stored in a university library, a drawing available only by travelling to another country’s patent office, and a posterboard displayed for several days at a conference have all been held to constitute “printed publications.” In dicta, the Federal Circuit has even suggested that a transient display of slides, or a billboard (!?) could, on certain facts, count as a printed publication.

Continue reading Guest Post by Prof. Yelderman: Which Kinds of Printed Publications Invalidate Patents in Court? at Patently-O.

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Stephen Yelderman is a Professor of Law at the University of Notre Dame Law School.

Continuing our study of prior art in the district court, in this post we’ll take a closer look at printed publications. As I discussed in my original post, around 13% of anticipation invalidations and 34% of obviousness invalidations rely on art in this category. (The numbers may be a touch higher than that, as a result of invalidations for which we could not determine the prior art supporting the court’s conclusion). For more background on this project, you can find the full paper here.

The potential sweep of this prior art category is breathtaking. By the terms of the statute—both before and after the America Invents Act—a printed publication found anywhere in the world can qualify as prior art. Moreover, under Federal Circuit precedent, this category includes a number of things that would seem to stretch the colloquial meaning of “publication.” For example, a single copy of a doctoral thesis stored in a university library, a drawing available only by travelling to another country’s patent office, and a posterboard displayed for several days at a conference have all been held to constitute “printed publications.” In dicta, the Federal Circuit has even suggested that a transient display of slides, or a billboard (!?) could, on certain facts, count as a printed publication.

When I teach patent law, our discussion of the printed publications category tends to dwell on these extreme possibilities. But how often do these non-traditional publications actually invalidate patents in practice?

To get a handle on this question, we further classified printed publication prior art into several sub-categories:

This chart illustrates the percentage of invalidations relying on printed publications in each sub-category, as a share of invalidations relying on printed publications at all. Encouragingly, the majority of invalidations based on printed publications relied on traditional reference publications. Just over half of anticipating publications were categorized as regularly published books and journals. Among obviousness invalidations citing a printed publication, 68% cited at least one regularly published book or journal. (The percentages of obviousness invalidations sum to more than 100% because of invalidations citing publications in multiple sub-categories.)  Though some of these regularly published books and journals may have come from obscure outlets, they are at least the kind of documents that a library might collect and an interested researcher might access.

The next sub-category—catalogs, manuals, and brochures—consists of documents distributed to teach the public about the features or availability of a product. This category is conceptually interesting for two reasons. First, though catalogs and manuals are typically mass-produced and widely disseminated, they are not usually collected in research libraries. By their nature, many publications in this category are intended to be transient. These characteristics suggest that publications in this sub-category would likely be much more difficult for a hypothetical prior art searcher to find than a regularly published book or journal.

The second reason that the catalog, manuals, and brochures category is conceptually interesting is that these documents are often evidence of a different kind of prior art entirely—that is, prior uses and sales. In fact, in a few cases we found it unclear whether a product manual was coming in as a distinct prior art reference, or as evidence about the features present in a prior sale. The fact that district courts sometimes rely on publications in this category suggests that activity prior art may be even more important than our top-level analysis suggested.

That said, catalog, manuals, and brochures were fairly insignificant in the larger scheme of things. About a quarter of anticipating printed publications fell into this sub-category. But since only 13% of anticipation events cited a printed publication, that means only about 3% of anticipation events overall relied on a catalog, manual, or brochure. Likewise, though 15% of obviousness events citing a printed publication relied on a catalog, manual, or brochure, that comes out to only about 5% of obviousness events overall. So whether one conceives of these cases as invalidity by prior sale or invalidity by printed publication, the high-level picture of prior art does not change very much.

The next sub-category—“other”—includes all identifiable printed publications not falling into the other two sub-categories. For example, we found patents that had been invalidated by poster board displays, industry whitepapers, proposals circulated at working group meetings of technical standards bodies, doctoral dissertations, and postings on Internet discussion forums. (We did not, for the record, find any cases of patents invalidated by billboards.) The good news was that reliance on potentially obscure or idiosyncratic documents like these appeared to be rare. About 19% of anticipating printed publications fell into this sub-category, amounting to just about 2% of anticipation events overall. A little more than a quarter of obviousness invalidations citing a printed publication included one in the “other” category. These constituted about 9% of obviousness invalidations overall.

There were, however, some publications that defied further classification—usually because sealed court records prevented us from finding more than a shorthand reference to the relevant document. For anticipation, this was rare enough that it could not change our results very much. But this happened frequently enough in cases of obviousness that we must acknowledge some potential uncertainty. If all of the unidentifiable publications turned out to be non-traditional publications, it’s possible that up to 16% of obviousness invalidations may have relied on a publication in the “other” category.

Finally, it’s important to remember that this data only tells us how district courts invalidate patents—not how many or why patents might be invalid in general. It is possible that cases involving non-traditional publications are more likely to settle than other cases, or, for that matter, that they’re less likely to settle. There is a significant possibility of selection effects here, which prevents us from making any inferences about patent quality overall. So, in the end, I’ll have to keep teaching those cases about slide presentations and unpublished college theses, even if “publications” like those only rarely invalidate patents in court.

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Berkheimer: Patent Eligibility Changes as Technology Advances http://feedproxy.google.com/~r/PatentlyO/~3/aJd3BK7Seec/berkheimer-eligibility-technology.html https://patentlyo.com/patent/2018/12/berkheimer-eligibility-technology.html#comments Mon, 17 Dec 2018 15:44:10 +0000 https://patentlyo.com/?p=25885 HP Inc. v. Berkheimer, 2018 WL 6445985 (On petition at the Supreme Court)

Steven Berkheimer has filed his brief in opposition in this pending case before the U.S. Supreme Court. As is a current theme in Supreme Court briefing, the parties have proposed alternative stories within their questions presented. HP’s original petition asks whether eligibility is “a question of law for the court based on the scope of the claims or a question of fact for the jury based on the state of the art at the time of the patent.”  In its responsive brief, the patentee Berkheimer focuses more on the procedural aspect:

Whether the Federal Circuit correctly held that additional fact-finding was necessary to resolve whether patent claim limitations such as “storing a reconciled object structure in the archive without substantial redundancy,” and “selectively editing an object structure, linked to other structures to thereby effect a one-to-many change in a plurality of archived items,” constituted “well-understood, routine, conventional activity” under Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66, 79 (2012)?

The brief follows a toned-down approach – arguing that in some cases there will be an underlying factual dispute on eligibility issues.

Continue reading Berkheimer: Patent Eligibility Changes as Technology Advances at Patently-O.

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HP Inc. v. Berkheimer, 2018 WL 6445985 (On petition at the Supreme Court)

Steven Berkheimer has filed his brief in opposition in this pending case before the U.S. Supreme Court. As is a current theme in Supreme Court briefing, the parties have proposed alternative stories within their questions presented. HP’s original petition asks whether eligibility is “a question of law for the court based on the scope of the claims or a question of fact for the jury based on the state of the art at the time of the patent.”  In its responsive brief, the patentee Berkheimer focuses more on the procedural aspect:

Whether the Federal Circuit correctly held that additional fact-finding was necessary to resolve whether patent claim limitations such as “storing a reconciled object structure in the archive without substantial redundancy,” and “selectively editing an object structure, linked to other structures to thereby effect a one-to-many change in a plurality of archived items,” constituted “well-understood, routine, conventional activity” under Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66, 79 (2012)?

The brief follows a toned-down approach – arguing that in some cases there will be an underlying factual dispute on eligibility issues. For Berkheimer, his patent involves one such case:

Whether a claim limitation consists of “well-understood, routine, and conventional activity” bears no resemblance to a question of law. In this case, for instance, the dependent claims recited: “storing a reconciled object structure in the archive without substantial redundancy,” and “selectively editing an object structure, linked to other structures to thereby effect a one-to-many change in a plurality of archived items.” . . . No statute, case, or deductive legal reasoning can resolve whether this “specific method of archiving,” constitutes “well-understood, routine, conventional activity, previously engaged in by those in the field.” Mayo. That is a quintessential factual question.

One question for the Supreme Court to consider is whether patent eligibility shifts as technology advances. I.e., as some particular machine becomes “conventional,” are advances using that machine more likely to be abstract?  Berkheimer says “yes,” and that makes the underlying facts relevant to the question of eligibility.

I expect a number of briefs supporting Berkheimer’s position will be filed over the next fortnight.

Docket: https://www.supremecourt.gov/search.aspx?filename=/docket/docketfiles/html/public/18-415.html

 

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Patently-O Bits and Bytes by Juvan Bonni http://feedproxy.google.com/~r/PatentlyO/~3/J8kIsTjit_8/patently-o-bits-and-bytes-by-juvan-bonni-15.html https://patentlyo.com/patent/2018/12/patently-o-bits-and-bytes-by-juvan-bonni-15.html#comments Mon, 17 Dec 2018 14:00:20 +0000 https://patentlyo.com/?p=25872 Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

  • Atty. Bryan K. Wheelock: C&D Letters Sufficient to Establish Personal Jurisdiction (Source: Harness Dickey)
  • Don Clark and Jack Nicas: Chinese Court Says Apple Infringed on Qualcomm Patents (Source: The New York Times)
  • Nicole Nguyen: Facebook Filed Patent Applications To Calculate Your Future Location (Buzzfeed News)
  • Andy Meek: Amazon Patent Application Hints at Using Doorbell Cameras to Build a Suspicious Persons Database (Source: BGR)
  • Nancy Cohen: Lyft Drives Patent Talk on Self-Driving Safety via Messages for Pedestrians, Cyclists (Source: Tech Xplore)

Commentary and Journal Articles:

  • Jim Hinton and Peter Cowan: Canada’s IP strategy is not in step with our innovation and commercialization goals (Source: The Globe and Mail)
  • Prof. Christopher J. Walker: Constitutional Tensions in Agency Adjudication (Source: SSRN)
  • Prof. Scott Sumner: How Costly is Chinese IP Theft? (Source: The Money Illusion)
  • Prof. Carter Eltzroth: Fostering by Standards Bodies of the Formation of Patent Pools (Source: SSRN)

 

Continue reading Patently-O Bits and Bytes by Juvan Bonni at Patently-O.

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Recent Headlines in the IP World:

Commentary and Journal Articles:

 

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Just in Time for Christmas http://feedproxy.google.com/~r/PatentlyO/~3/bxCuDrFyg9o/just-time-christmas.html https://patentlyo.com/hricik/2018/12/just-time-christmas.html#respond Mon, 17 Dec 2018 13:01:38 +0000 https://patentlyo.com/?p=25880 By David Hricik

Practitioner Robert Moll posted a review of one of my books, this one co-authored with Mercedes Meyer, on ethical issues in patent prosecution. His review is here.

Continue reading Just in Time for Christmas at Patently-O.

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By David Hricik

Practitioner Robert Moll posted a review of one of my books, this one co-authored with Mercedes Meyer, on ethical issues in patent prosecution. His review is here.

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Happy Holidays Everyone! http://feedproxy.google.com/~r/PatentlyO/~3/Rc-cco-Wn8o/happy-holidays-everyone.html https://patentlyo.com/patent/2018/12/happy-holidays-everyone.html#comments Fri, 14 Dec 2018 17:26:34 +0000 https://patentlyo.com/?p=25864 The following holiday card arrived today from S.D. Tex. Judge Gilmore under the caption”Whiny Letters.”

Continue reading Happy Holidays Everyone! at Patently-O.

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The following holiday card arrived today from S.D. Tex. Judge Gilmore under the caption”Whiny Letters.”

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Avoiding the Weeds in Fee Shifting Cases http://feedproxy.google.com/~r/PatentlyO/~3/Pj7SwmC0i-M/avoiding-weeds-shifting.html https://patentlyo.com/patent/2018/12/avoiding-weeds-shifting.html#comments Fri, 14 Dec 2018 16:53:06 +0000 https://patentlyo.com/?p=25859 Avoiding the Weeds in Fee Shifting Cases

by Dennis Crouch

Spineology, Inc. v. Wright Medical Tech, Inc.  (Fed. Cir. 2018)

Spineology owns U.S. Reissue Patent No. RE42,757 — covering a surgical tool known as an “expandable reamer.” In 2015 Spineology sued Wright Medical for infringement — accusing its X-REAM product. Basically, these are used to hollow-out marrow from inside the femur head. Below, I have included images from the asserted patent as well as the accused product.  The similarity is striking and there is some evidence suggesting that Wright Medical copied core aspects of Spineology’s approach. The problem for the patentee though, is that Wright Medical’s approach was not actually encompassed by the patented claims.

 

The patented claims all require an elongated hollow “body” that contains particular mechanisms.  However, the “body” term was added to the claims after filing — i.e,. the specification does not use the term “body.”  In a prior appeal, the Federal Circuit affirmed that “body” included both the shaft and the barrel near the handle.  Under that construction, the patentee admitted that X-REAM would not infringe.

After successfully defending its lawsuit, Wright then asked to be compensated for its expenditures on the case — i.e., attorney fees under 35 U.S.C.

Continue reading Avoiding the Weeds in Fee Shifting Cases at Patently-O.

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by Dennis Crouch

Spineology, Inc. v. Wright Medical Tech, Inc.  (Fed. Cir. 2018)

Spineology owns U.S. Reissue Patent No. RE42,757 — covering a surgical tool known as an “expandable reamer.” In 2015 Spineology sued Wright Medical for infringement — accusing its X-REAM product. Basically, these are used to hollow-out marrow from inside the femur head. Below, I have included images from the asserted patent as well as the accused product.  The similarity is striking and there is some evidence suggesting that Wright Medical copied core aspects of Spineology’s approach. The problem for the patentee though, is that Wright Medical’s approach was not actually encompassed by the patented claims.

 

The patented claims all require an elongated hollow “body” that contains particular mechanisms.  However, the “body” term was added to the claims after filing — i.e,. the specification does not use the term “body.”  In a prior appeal, the Federal Circuit affirmed that “body” included both the shaft and the barrel near the handle.  Under that construction, the patentee admitted that X-REAM would not infringe.

After successfully defending its lawsuit, Wright then asked to be compensated for its expenditures on the case — i.e., attorney fees under 35 U.S.C. 285.

Standard U.S. practice is that each side pays its own attorneys and experts. Thus, a successful defendant may still walk away owing more than a million dollars in legal fees. Here, Wright Medical argues that it has spent more than $1.4 million to defend the case simply to win on a claim construction summary judgment.

Under Section 285, “the court in exceptional cases may award reasonable attorney fees to the prevailing party.”  Here, however, the district court declined to find an exceptional case.  On appeal, the Federal Circuit has issued a deferential ruling — holding that “the district court did not abuse its discretion in denying Wright’s motion for attorney fees under section 285.”

[W]hile Spineology’s proposed construction of “body” was ultimately rejected at summary judgment, “[t]he attempt was not so meritless as to render the case exceptional.” DCT Op. . . . And Wright cannot fairly criticize Spineology for continuing to pursue a construction not adopted by the district court in the claim construction order, since the district court declined to adopt Wright’s proposed construction as well. We see no abuse of discretion here.

In the briefing, Wright argued that Spineology’s “belief that a product has been copied is not legal justification for filing a frivolous patent infringement case.”  In its opinion, the Federal Circuit did not address the copying-belief aspect — but instead focused on the conclusion that the case was not frivolous or even exceptional.

= = = =

A portion of Wright Medical’s expenses were in preparing to counter against Spineology’s lost profits damages theories.  The district court never determined whether those theories held water since the case was dismissed at this early stage. Still, Wright Medical argued that the wild damages claims should make the case exceptional.

On appeal, the Federal Circuit refused to enter into a case-within-a-case analysis to determine whether the proffered damages theory was problematic.

Wright asks this court to basically decide the damages issues mooted by summary judgment in order to determine whether it ought to obtain attorney fees for the entire litigation. This we will not do. We will not force the district court, on a motion for attorney fees, to conduct the trial it never had by requiring it to evaluate Mr. Nantell’s “but for” calculations or royalty rates, and we—an appellate court—will certainly not conduct that trial in the first instance.

A district court need not, as Wright seems to urge, litigate to resolution every issue mooted by summary judgment to rule on a motion for attorney fees. And we need not, as Wright requests, get into the weeds on issues the district court never reached.

Although it did not say so explicitly, the Federal Circuit appears to suggest that the frivolous arguments in this case are found within the appeal itself. The court concluded its decision by awarding costs to Spineology and issuing a “reminder” to the appellant that fee awards are not to be used ‘as a penalty for failure to win a patent infringement suit.’” Quoting Checkpoint Sys., Inc. v. All-Tag Sec. S.A., 858 F.3d 1371 (Fed. Cir. 2017).

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Federal Circuit Refuses to Split Hairs over Level of Enhanced Damages http://feedproxy.google.com/~r/PatentlyO/~3/PVEQWqLY2LY/federal-circuit-enhanced.html https://patentlyo.com/patent/2018/12/federal-circuit-enhanced.html#comments Thu, 13 Dec 2018 17:49:50 +0000 https://patentlyo.com/?p=25855 Federal Circuit Refuses to Split Hairs over Level of Enhanced Damages

by Dennis Crouch

Stryker Corp. v. Zimmer, Inc. (Fed. Cir. 2018)

In a R.36 judgment-without-opinion, the Federal Circuit has affirmed Stryker’s $250 million willful-infringement verdict against Zimmer.  In the case, the jury found the asserted claims valid and infringed and awarded $70+ million in compensatory damages.  The jury also found that the infringement was willful.

After receiving the jury verdict, W.D. Mich Judge Jonker awarded treble damages for the willful behavior — “Given the onesidedness of the case and the flagrancy and scope of Zimmer’s infringement, the Court concludes that treble damages are appropriate here.”

The district court’s opinion carefully walked through the determination of whether or not to enhance damages.  Writing that “in this case, all nine Read factors favor substantial enhancement of the jury’s award.” However, the district court did not really explain its choice to award 3x compensation rather than 2x or 2.5x.

On appeal, the Zimmer focused on the 3x-limit and argued that treble damages should be “reserved for the most egregious cases” and that the level of damage enhancement must be proportional to the egregiousness of the intentional misbehavior. 

Continue reading Federal Circuit Refuses to Split Hairs over Level of Enhanced Damages at Patently-O.

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by Dennis Crouch

Stryker Corp. v. Zimmer, Inc. (Fed. Cir. 2018)

In a R.36 judgment-without-opinion, the Federal Circuit has affirmed Stryker’s $250 million willful-infringement verdict against Zimmer.  In the case, the jury found the asserted claims valid and infringed and awarded $70+ million in compensatory damages.  The jury also found that the infringement was willful.

After receiving the jury verdict, W.D. Mich Judge Jonker awarded treble damages for the willful behavior — “Given the onesidedness of the case and the flagrancy and scope of Zimmer’s infringement, the Court concludes that treble damages are appropriate here.”

The district court’s opinion carefully walked through the determination of whether or not to enhance damages.  Writing that “in this case, all nine Read factors favor substantial enhancement of the jury’s award.” However, the district court did not really explain its choice to award 3x compensation rather than 2x or 2.5x.

On appeal, the Zimmer focused on the 3x-limit and argued that treble damages should be “reserved for the most egregious cases” and that the level of damage enhancement must be proportional to the egregiousness of the intentional misbehavior.  In oral arguments, Chief Judge Prost offered skepticism as to the role of the appellate court to re-evaluate the level of enhancement:

You’re saying you’re agreeing there is going to be enhancement, and now we are talking about whether it should be three times, or two and a half times, or one and a quarter times. . . . It is really hard at the appellate level for us to start scrutinizing what percentage the district court should have applied. Even if . . . [the district court] went too far . . . what are we supposed to do with that?

[Oral arguments]. In its judgment, the Federal Circuit affirmed the lower court ruling without providing any reasoning. Thus, it is unclear whether the Federal Circuit (1) disagrees with the need for porportionality or instead (2) found sufficient evidence proportionality in this case to affirm.  I’ll note here that, although Chief Judge Prost suggested the difference between 3x and 2.5x is splitting hairs, the difference is about $40 million.  We must be talking here about splitting the golden hairs of the Norse goddess Sif.

Note – this case is a continuation of Stryker Corp. v. Zimmer Inc. decided by the Supreme Court in 2016.  The procedural history here is that the district court’s original judgment of enhanced damages was reversed by the Federal Circuit in its 2014 decision. The Supreme Court then took-up the case and ruled, inter alia, that an objectively reasonable defense does not excuse willfulness.  On remand, the District Court again awarded treble damages — and that award has now been affirmed.

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For Digital Copyright First Sale Doctrine, “Move” Does Not Equal “Copy+Delete” http://feedproxy.google.com/~r/PatentlyO/~3/WCbrqhLRPzk/copyright-doctrine-copydelete.html https://patentlyo.com/patent/2018/12/copyright-doctrine-copydelete.html#comments Wed, 12 Dec 2018 19:50:33 +0000 https://patentlyo.com/?p=25846 by Dennis Crouch

Capitol Records v. ReDigi (2nd Cir. 2018) [16-2321_opn]

ReDigi designed its business to take advantage of the first sale doctrine of copyright law — particularly creating a market for resale of lawfully purchased digital music files.  In the system, ReDigi first verifies that a song was lawfully purchased (e.g., via iTunes) and then migrates the digital file from the user to ReDigi servers. In the process, ReDigi first locks the song from use on the user’s system; then breaks the song into packets; deletes the song on the user’s computer; transfers the packets to the ReDigi system (copy + delete); and finally reassemble the packets on the ReDigi server.  Each packet is deleted immediately upon transfer — and so results in an unrecoverable failure if some of the packets don’t arrive at the destination. (In that case ReDigi compensates the seller).  The seller can keep using the song until it is sold — at that point the system effectively transfers possession to the new party.   Note here, that this is how the system is designed. Some folks have hacked around these precautions and so some duplicates are getting through — allowing the seller to keep listening to the music.

Continue reading For Digital Copyright First Sale Doctrine, “Move” Does Not Equal “Copy+Delete” at Patently-O.

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by Dennis Crouch

Capitol Records v. ReDigi (2nd Cir. 2018) [16-2321_opn]

ReDigi designed its business to take advantage of the first sale doctrine of copyright law — particularly creating a market for resale of lawfully purchased digital music files.  In the system, ReDigi first verifies that a song was lawfully purchased (e.g., via iTunes) and then migrates the digital file from the user to ReDigi servers. In the process, ReDigi first locks the song from use on the user’s system; then breaks the song into packets; deletes the song on the user’s computer; transfers the packets to the ReDigi system (copy + delete); and finally reassemble the packets on the ReDigi server.  Each packet is deleted immediately upon transfer — and so results in an unrecoverable failure if some of the packets don’t arrive at the destination. (In that case ReDigi compensates the seller).  The seller can keep using the song until it is sold — at that point the system effectively transfers possession to the new party.   Note here, that this is how the system is designed. Some folks have hacked around these precautions and so some duplicates are getting through — allowing the seller to keep listening to the music.

Recording companies sued  and won.  On appeal now, the 2nd Circuit has sided with the copyright owners — holding that the first sale doctrine does not apply here because DeRigi is making copies (first sale only applies to the actual copy sold).

In the course of transferring a digital music file from an original purchaser’s computer, through ReDigi, to a new purchaser, the digital file is first received and stored on ReDigi’s server . . . At each of these steps, the digital file is fixed in a new material object “for a period of more than transitory duration.” Cartoon Network. The fixing of the digital file in ReDigi’s server, as well as in the new purchaser’s device, creates a new phonorecord, which is a reproduction. ReDigi version 1.0’s process for enabling the resale of digital files thus inevitably involves the creation of new phonorecords by reproduction. . . .

We conclude that the operation of ReDigi version 1.0 in effectuating a resale results in the making of at least one unauthorized reproduction. Unauthorized reproduction is not protected by § 109(a).

The court then went on to hold that the use is also not a “fair use.”  In the analysis, the court correctly concluded that the ReDigi secondary market is likely to undermine the marketplace for new digital files from the Record Company.  However, I believe the court used the wrong baseline — the focus here should have been on whether the copy+move resale is a fair-use extension of the first-sale doctrine.

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Locking Down Written Description and Continuations-in-Part http://feedproxy.google.com/~r/PatentlyO/~3/1qGZYhpKqyk/locking-description-continuations.html https://patentlyo.com/patent/2018/12/locking-description-continuations.html#comments Wed, 12 Dec 2018 17:29:12 +0000 https://patentlyo.com/?p=25843 Locking Down Written Description and Continuations-in-Part

by Dennis Crouch

In re Tropp (Fed. Cir. 2018)

Despite the text of the 4th Amendment of the U.S. Constitution, our government has determined that US Citizens who want the privilege of travel-by-flight implicitly give up their rights of privacy.  I used to travel with a lock on my luggage.  Of course these days, that lock will likely be broken by Transportation Safety (TSA) officials in the search for bombs (and incidentally uncovering other contraband).

Tropp’s patent application is focused on a special set of luggage locks that help the TSA by providing a master key.  The application here is part of a portfolio that claims priority back to 2003-2004.  The 2003 application was followed by a continuation-in-part in 2004 that was then followed in 2012 by the present continuation-application.

During prosecution, Tropp rewrote his patent claims in this case to focus on “a set of locks” that each have dials for a traveler to use and a master key portion for TSA.  The claims require some differences among the set — splitting them into two subsets with different number of dials for locks in each subset.

During prosecution, the USPTO rejected the claims — finding that they lacked written description support. 

Continue reading Locking Down Written Description and Continuations-in-Part at Patently-O.

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by Dennis Crouch

In re Tropp (Fed. Cir. 2018)

Despite the text of the 4th Amendment of the U.S. Constitution, our government has determined that US Citizens who want the privilege of travel-by-flight implicitly give up their rights of privacy.  I used to travel with a lock on my luggage.  Of course these days, that lock will likely be broken by Transportation Safety (TSA) officials in the search for bombs (and incidentally uncovering other contraband).

Tropp’s patent application is focused on a special set of luggage locks that help the TSA by providing a master key.  The application here is part of a portfolio that claims priority back to 2003-2004.  The 2003 application was followed by a continuation-in-part in 2004 that was then followed in 2012 by the present continuation-application.

During prosecution, Tropp rewrote his patent claims in this case to focus on “a set of locks” that each have dials for a traveler to use and a master key portion for TSA.  The claims require some differences among the set — splitting them into two subsets with different number of dials for locks in each subset.

During prosecution, the USPTO rejected the claims — finding that they lacked written description support.  Although the specification does describe embodiments with different numbers of dials, the PTAB held that the specification does not describe a “set of locks” that include both sets of embodiments.  This case fits within the line of written description cases where all of the elements of a claimed invention are described, but where the specification does not describe how to fit those various elements together.

On appeal, the Federal Circuit vacated-and-remanded — holding that the PTAB had failed to fully consider the additional specification provided by the continuation-in-part. Here, the CIP did add some info, but only obliquely — indicating that a single master-key could “include special locks having a multiplicity of sub-types, such as different sizes, different manufacturing designs or styles, etc.”

In its decision, the PTAB had seemly incorrectly refused to consider the added disclosure from the CIP — calling it “new matter.”   Of course, the whole point of filing a Continuation-in-Part application is to add new matter — totally permissible.   Waldemar Link v. Osteonics Corp., 32 F.3d 556, 558 (Fed. Cir. 1994) (“Claims containing any matter introduced in the CIP are accorded the filing date of the CIP application. However, matter disclosed in the parent application is entitled to the benefit of the filing date of the parent application.”).

Written description is a question of fact an so PTAB determination is ordinarily given deference on appeal. Here, however, the appellate panel identified the error as “failure to consider the totality of the record in assessing written description” — which is an error of law reviewed de novo on appeal.

On remand, the Board will reconsider the issue of written description — looking particularly to whether the new disclosure found in the CIP is sufficient to prove possession of the claimed “set of locks” invention.

= = = = =

I wonder whether Tropp will have a trademark problem. His patents are assigned to his small Brooklyn company “Iowa Hawkeyes LLC.”

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An Interesting Opinion on the Right to Jury Trial that Can Relate to 101 and 285 http://feedproxy.google.com/~r/PatentlyO/~3/n_nPkFYoVI4/interesting-piercing-corporate.html https://patentlyo.com/hricik/2018/12/interesting-piercing-corporate.html#comments Wed, 12 Dec 2018 11:12:47 +0000 https://patentlyo.com/?p=25834 By David Hricik

In the three prior posts (hey, it’s a trend!) on Section 285, I pointed out the need for lawyers to advise principals of patentees that they may, personally, be on the hook for liability for fee shifting.  For example, if the patentee is an asset-less shell corporation, the accused infringer may seek (perhaps should seek, promptly) to join principals of the patentee in the event that the case is found exceptional.  Likewise, given the long-standing line of cases (going back to Ultramercial, decided when I was clerking for Chief Judge Rader (here)), the CAFC has indicated 101 can implicate factual issues and, so, likely the right to trial by jury.

It’s not a patent case, but nonetheless Marchan v. John Miller Farms, Inc. (3:16-0-357-WGY D. N.D. Dec. 11, 2018), here, has a discussion pertinent to both issues. The court addressed whether a jury must decide piercing the corporate veil under federal law, and held that there is a federal right to trial by jury on this issue.  Honestly, that surprised me, but I hadn’t looked at the issue in 20 years.

The court did mention patent cases, and did mention a lot of things that should resonate with patent litigators about various issues in patent cases, including Section 101 and willfulness.  

Continue reading An Interesting Opinion on the Right to Jury Trial that Can Relate to 101 and 285 at Patently-O.

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By David Hricik

In the three prior posts (hey, it’s a trend!) on Section 285, I pointed out the need for lawyers to advise principals of patentees that they may, personally, be on the hook for liability for fee shifting.  For example, if the patentee is an asset-less shell corporation, the accused infringer may seek (perhaps should seek, promptly) to join principals of the patentee in the event that the case is found exceptional.  Likewise, given the long-standing line of cases (going back to Ultramercial, decided when I was clerking for Chief Judge Rader (here)), the CAFC has indicated 101 can implicate factual issues and, so, likely the right to trial by jury.

It’s not a patent case, but nonetheless Marchan v. John Miller Farms, Inc. (3:16-0-357-WGY D. N.D. Dec. 11, 2018), here, has a discussion pertinent to both issues. The court addressed whether a jury must decide piercing the corporate veil under federal law, and held that there is a federal right to trial by jury on this issue.  Honestly, that surprised me, but I hadn’t looked at the issue in 20 years.

The court did mention patent cases, and did mention a lot of things that should resonate with patent litigators about various issues in patent cases, including Section 101 and willfulness.  The court wrote, after deciding the issue before it, in part as follows:

The analysis ought not end here. Some scholars have recently advocated making judges, not juries, decide whether to pierce the corporate veil: 

[J]udges . . . are best suited to decide in each case whether the corporate veil should be pierced, for four reasons: (1) veil piercing is an inherently equitable remedy that judges are better equipped to decide; (2) veil-piercing inquiries require a weighing of legal fictions and concepts that lay jurors simply are not trained to perform; (3) decisions by judges are likely to produce more consistent results in similar cases; and finally (4) judges can likely make veil-piercing decisions more efficiently than juries can. 

Brian D. Koosed, Anthony P. Badaracco, and Erica R. Iverson, Disregarding the Corporate Form: Why Judges, Not Juries, Should Decide the Quiddits and Quillets of Veil Piercing, 13 N.Y.U. J.L. & Bus. 95, 136 (2016); see also Mark A. Olthoff, Beyond the Form–Should the Corporate Veil Be Pierced?, 64 UMKC L. Rev. 311, 336 (1995) (“Because consideration of these factors involves a weighing test, a jury may be ill-suited to decide the question. Therefore, the trial judge should make the final determination of the piercing issue.”).

These contentions crop up from time to time in different contexts. See, e.g., Brandon M. Reed, Who Determines What Is Egregious? Judge or Jury?, 34 Ga. St. U.L. Rev. 389, 426 (2018) (arguing that judicial determinations of willful or egregious patent infringement “will reduce prejudice at trial, increase judicial efficiency, and foster predictable outcomes in litigation.”); but see David Nimmer, Juries and the Development of Fair Use Standards, 31 Harv. J. L. & Tech. 563, 589-93 (2018) (“Learning to Love the Seventh Amendment”). It is appropriate to point out that most of these unsupported conclusions are nothing but elitism, pure and simple. They are an unabashed retreat from the magnificent vision of the Founders. “The Seventh Amendment promised to ‘preserve[]’ the right of ‘trial by jury’ in virtually all civil suits ‘at common law’ and limit the power of federal judges to overturn any fact properly found by a civil jury.” Akhil Reed Amar, America’s Unwritten Constitution 435 (Basic Books 2012).

Let’s deal with the quoted contentions in reverse order:

Efficiency. Yes, there is something to this argument in the present case. The issue of veil piercing has been fully briefed and argued. There is nothing to suggest that further discovery will add to the store of information available to decide this issue. Unfortunately, the existence of a judicial vacancy makes it unlikely that this case will come before a local jury in North Dakota before well into 2019 and this is far too slow. This does not reflect on jurors, however. Rather, it is a result of the lack of judicial resources to preside over the requisite jury trial. More particularly, it reflects that I am unable, in view of my own caseload and the cases in other districts I visit, to go to Fargo, North Dakota to try this case. Efficiency is one component of justice, but it is not the sole goal of the justice system. Were that not the case, why have trials at all?

Consistency. Hardly. The great strength of our common law system is reasoned inconsistency, i.e., each court reaching out for the best possible justice in the case before it, where reasoned but varying decisions draw from the body of other such decisions with the idea that the law will grow and adapt based on such reasoning. Ours is not a civil code system where I can simply look up the rule and apply it to each case.

The working judge is not and never has been a philosopher. He has no coherent system, no problem solver for all seasons, to which he can straightaway refer the normative issues. Indeed, if he could envision such a system for himself, he would doubt that, as a judge, he was entitled to resort to it; he would think he must be less self-regarding.

Hon. Benjamin Kaplan, Justice, Massachusetts Supreme Judicial Court, Encounters with O.W. Holmes, Jr., 96 Harv. L. Rev. 1828, 1849 (1983).

Judges are better equipped — jurors are not trained to weigh legal concepts.

This is simply not true. I have been a trial judge for over forty years. In the fact-finding line, anything a judge can do a jury can do better. The best sociological evidence confirms this truth. See James Surowiecki, The Wisdom of Crowds (2004).

The fact–finding most analogous to that involved in the veil-piercing inquiry is the fact-finding undergirding a determination of successor liability — surely a jury issue. See, e.g., Jury Verdict, Thomas & Betts Corp. v. New Albertson’s, Inc., No. 10-11947-WGY (D. Mass. Dec. 12, 2015), ECF No. 801. Likewise, in the case at bar, the jury will need to decide whether the product was of merchantable quality, whether it was unreasonably dangerous, and perhaps the comparative negligence of the parties on certain counts. It may also have to assess both compensatory and punitive damages.

Four months ago, I watched a jury learn about the mechanics of 3-D printing and analyze a certain interface layer at the microscopic level to determine obviousness and infringement. Tr. Jury Trial, Desktop Metal, Inc. v. Markforged, Inc., No. 1:18-cv-10524-WGY (D. Mass. Sept. 24-27, 2018), ECF Nos. 559-64. More recently, I watched a jury determine probable cause to remove an obstreperous passenger from a campus shuttle bus. Electronic Clerk’s Notes, Strahan v. Parlon, No. 1:17-11678-WGY (D. Mass. Sept. 17-20, 2018), ECF Nos. 156-61. I asked another jury this question: “Did the anticompetitive effect of [a] settlement [between two pharmaceutical companies] outweigh any procompetitive justifications?” Jury Charge at 37:9-18, In re Nexium (Esomeprazole) Antitrust Litig., No. 12-md-02409-WGY (D. Mass. Dec. 3, 2014), ECF No. 1441, aff’d, 842 F.3d 34 (1st Cir. 2016).

Jurors have long been deciding all these issues and many more complex. It takes a special type of arrogance simply to conclude that American jurors cannot handle the veil-piercing issues presented here.

Quite simply, jurors are the life’s blood of our third branch of government.

It is not too much to say that a courthouse without jurors is a building without a purpose. See Judith Resnik & Dennis E. Curtis, Representing Justice: Invention, Controversy, and Rights in City-states and Democratic Courtrooms 293 (Yale University Press 2011); Lewis F. Powell, Jr., Foreword to John O. and Margaret T. Peters, Virginia’s Historic Courthouses xi (University Press of Virginia 1995) (“Public buildings often . . . reflect the beliefs, priorities, and aspirations of a people. . . . For much of our history, the courthouse has served not just as a local center of the law and government but as meeting ground, cultural hub, and social gathering place.”). It is a quiet government museum to what was once the most extensive and robust expression of direct democracy the world has ever seen.

Come in. Look around. It’s quiet. The real work goes on in judicial chambers, hidden from public view. See Brock Hornby, The Business of the U.S. District Courts, 10 Green Bag 2d 453 (2007). You can hear your footsteps along the broad corridor past the vacant courtrooms. Go into a courtroom. There will be an American flag, limp upon its staff. Along one wall is the jury box. There decent, common-sense Americans with an overarching sense of duty have sat for years. Again and again, the courtroom has heard the clerk intone the familiar cry, “Ladies and gentlemen, please stand and harken to your verdict as the Court records it.” No more.

In this courtroom, the chairs in the jury box are empty, mute testimony to the consistent derision of self-interested corporations,[4] shallow stereotyping by lawyers and scholars who do not know their way around a courtroom, and the virtual abandonment of the civil jury by those judicial officers most charged with keeping our jury system vital and flourishing. 

Americans themselves may yet rescue their right to a jury. Workers at Uber, Lyft, Microsoft, Google, and Facebook have caused those corporations to abjure forced arbitration of claims of sexual harassment and assault. See Daisuke Wakabayashi & Jessica Silver-Greenberg, Facebook to Drop Forced Arbitration in Sexual Harassment Cases, N.Y. Times, November 9, 2018, at B1; Kate Conger & Daisuke Wakabayashi, Google Bows to Demands to Overhaul Abuse Policy, N.Y. Times, November 9, 2018, at B1; Daisuke Wakabayashi, Yielding to Critics, Uber Eliminates Forced Arbitration in Sexual Misconduct Cases, N.Y. Times, May 16, 2018, at B3.[5] Large law firms are increasingly yielding to pressure to drop mandatory arbitration agreements for employment-related claims, such as those alleging sexual harassment and discrimination. See Chris Villani, After Kirkland, Sidney Arbitration Flip, Group Eyes DLA Piper, Law360, Nov. 28, 2018 (describing how pressure from Harvard Law School students led Kirkland & Ellis and Sidley Austin LLP to end. See Chris Villani, After Kirkland, Sidney Arbitration Flip, Group Eyes DLA Piper, Law360, Nov. 28, 2018 (describing how pressure from Harvard Law School students led Kirkland & Ellis and Sidley Austin LLP to end forced arbitration for employees, while DLA Piper, Drinker Biddle & Reath LLP, Knobbe Martens, Paul Hastings LLP, Stoel Rives LLP, and Varnum LLP retain such clauses in their employment contracts). But see Michael Selby-Green, Morgan Stanley is fighting to stop a race-discrimination suit from going to trial by using a controversial tactic that keeps employee complaints secret, Bus. Insider, October 6, 2018; Anthony J. Oncidi, Consider the True Implications of Waiving Arbitration, Daily Journal, Nov. 14, 2018 (implicitly characterizing forced arbitration as a weapon and suggesting that dropping it is “a dangerous form of unilateral disarmament”).

Do you care about any of this?

You should.

Your rights depend on it.

Footnotes:

4. While corporations primarily use forced arbitration to bar access to our justice system altogether, see Cynthia Estlund, The Black Hole of Mandatory Arbitration, 96 N.C. L. Rev. 679, 709 (2018); see also Jessica Silver-Greenberg & Michael Corkery,In Arbitration, a ‘Privatization of the Justice System,’ N.Y. Times, Nov. 1, 2015, data support their self-interested decision even in those few cases that are actually heard. As one would expect, in state courts, corporations win somewhat less than half the time. Alexander J. S. Colvin, An Empirical Study of Employment Arbitration: Case Outcomes and Processes, 8 J. Empirical Legal Stud. 1, 5 (Table 1) (2011). In the more rules-bound federal courts, they win 63% of the time. Id. In arbitration, where the corporation is a repeat player, i.e., is active in the market hiring arbitrators, it wins a whopping 83% of the time. Id. at 13 (Table 3).

5.  In Arbitration, a ‘Privatization of the Justice System,’ N.Y. Times, Nov. 1, 2015, data support their self-interested decision even in those few cases that are actually heard. As one would expect, in state courts, corporations win somewhat less than half the time. Alexander J. S. Colvin, An Empirical Study of Employment Arbitration: Case Outcomes and Processes, 8 J. Empirical Legal Stud. 1, 5 (Table 1) (2011). In the more rules-bound federal courts, they win 63% of the time. Id. In arbitration, where the corporation is a repeat player, i.e., is active in the market hiring arbitrators, it wins a whopping 83% of the time. Id. at 13 (Table 3).

Remarkably, despite these workers’ disparate and unfocused protests, they are the direct descendants of the views of our Revolutionary-era patriots. As Professor Jamal Green points out so persuasively: 

[T]he mode of representation that would best resist the Executive was less the legislature than the jury, which the Founding generation saw as an essential vehicle for articulating the rights of the community. “In these two powers consist wholly, the liberty and security of the people,” John Adams wrote of voting for the legislature and of trial by jury. “They have no other fortification against wanton, cruel power: no other indemnification against being ridden like horses, fleeced like sheep, worked like cattle, and fed and cloathed like swine and hounds: No other defence against fines, imprisonments, whipping posts, gibbets, bastenadoes and racks.” 

Adams was writing in 1766, against the Stamp Act, but the view of juries as bound up crucially with rights recognition and enforcement motivated the Bill of Rights. In criticizing the 1787 Constitution, the influential antifederalist Federal Farmer called the jury trial and legislative representation “the wisest and most fit means of protecting [the people] in the community.” Jurors were drawn from that very community and had vast powers of investigation, via the grand jury, and adjudication, via the petit jury. As Professor Akhil Reed Amar emphasizes, jury service was commonly viewed as analogous to service in the legislature itself. 

2. Rights as Federalism. — Viewing the Bill of Rights through an eighteenth-century lens illuminates its focus on institutional form. A remarkable number of its amendments seek to preserve the role of the jury and other local representative institutions in federal administration. 

Jamal Greene, Rights as Trumps?, 132 Harv. L. Rev. 28, 112-13 (2018) (footnotes omitted). 

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