The ruling is a must-read for patent litigators, particularly those faced with an initial disclosure requirement to specify whether commercial success or other secondary considerations will be an issue. in the old days, these points got minimal coverage in experts’ reports. Going forward, patent cases will either add a nonobviousness expert, or that issue will be expanded in the report of the liability and damages experts. The rub is to avoid topical conflicts between your experts, because an effective cross-examiner may elicit contradictions between their opinions, e.g., the tech guy and lost-profits guy see the past differently. One wonders if Judge Whyte’s opinion sets too high a standard for admitting nonobviousness opinions, when the actual challenge was that this expert may have been underqualified and not have connected-the-dots between the facts and his conclusions.

In the end, the ruling allows proffer of the historical facts, but limits this expert’s opinions and inferences. That provokes the possiblity of putting in all the facts about “secondary considerations,” having the tech and commercial facts simply authenticated by the other experts, then just arguing for the legal conclusion of nonobviousness. Endeavoring instead to have a third expert on nonobviousness, knowledgeable both in the technology and its commercial marketing, and experienced in the state of the art, the needs, and the failures occuring perhaps 20 years ago, will be as hard as finding a vascular surgeon with a specialialty in conditions of adolescent’s left wrists.

I have taken real pleasure in being the guest blawger here for the past weeks. All of the comments and readership are appreciated. Wish me luck as I begin teaching IP Transactions at the College of Law at the University of Kentucky. My regular blawg posts at http://leethomason[dot]com will resume in time. Thanks

As district judges always tend to presume “there is plenty of time for new counsel to get up to speed” between now and the June 2009 trial. So, to speed the plow, the Judge granted thirty days for new counsel to enter its appearance. 

The alleged infringing analyzer gifts, though, incorporate the claimed features of a “transparent” base plate or a removable “display device,” as described in the cited patents, USP 6,532,385 and 6,590,166.  In terms of utility, as a gift, the bodyfat analyzer is portable, noninvasive, quick to use, requires no “active collaboration” by the gift-giver, and the measured ratio of adipose to muscle tissue can be kept secret.  Still, to give a bodyfat analyzer, which may be infringing, and that has a detachable display, could imply that it is for/from a patent reformer blessed with both a wide body and weak eyes.

Taylor, the accused infringer also offers gift ideas, that perhaps complement the bodyfat analyzer gift sector, such as the Chocolate Thermometer Spatula, which makes stirring molten chocolate “fool-proof,” and the Candy - Deep Fry Dial Thermometer for whatever candied items are tastier deep-fried.  The suit also pleads the earlier-filed RE 37,954 patent, which gives a reminder that typos in the spec remain after reissue.  It describes the prior art “underwear body weighing method,” that one can presume was about the “underwater” method.  The combination of all the foregoing elements, however practiced, is a gift.

Even though litigation support services will provide all manner of computer simulations, plasma displayed recreations, etc., the defendant relied on the more low-tech video camera. In support of its motion for summary judgment, the video showed Jean-Francois Gagnon, a “self-proclaimed” expert “builder of construction toys,” who was able to assemble the structures on the side of the Magnetix box “using only the parts included …and without any glue.” Monsieur Gagnon’s age was not stated in the ruling, which may have been relevant since the box was labeled “for children 8 to 100 years” of age.

PlastWood objected claiming that video was unreliable, and that “the Gagnon video had several skips in it” suggesting omitted steps, or that the finished item contained an “internal structure” to hold it together - sacrebleu! Gagnon rejoined to all the challenges with a second video, containing no skips, on which he reconstructed the depicted items, even the Ferris Wheel - awesome!

Now, when the patent attorney in the family is asked whether they ‘can build’ the Golden Gate bridge out of Magnetix or even Lego, there is precedent on which to answer ‘yes.’

In a civil case based on common-law, fiduciary standards as well as professional conduct standards for patent attorneys, a host of possibilities are presented.  The Court held that the proper cause of action in California is for breach of fiduciary duty, and it notes variations between the elements of proof under California law and that of other states.  For example, it did not need to be shown that attorneys in the San Diego office had communicated client confidences to their colleague in the D.C. office.  Also, while the Rules of Professional Conduct are not the basis for a tort claim, compliance vel non is probative evidence. But, what rules apply? Under the facts of the Vaxiion case, the possibilities are the California rules, e.g., 3-310(c)(2), or the D.C. rules, e.g., RPC 1.7(a), or the USPTO Code of Professional Responsibility, e.g., 37 C.F.R. 10.66(B).  Among those textually different rules, the standard can be that of an objective observer, or what subjectively an attorney understood, or perhaps, higher standards that a fiduciary must meet.

What the USPTO rules call representation of clients with “differing interests,” or that the D.C. rules call a “concurrent conflict” that risks the representation being “materially limited,” would allow a wide range of evidence and expert opinion to be offered.  These subject-matter conflict cases also underscore the importance of conflict checks for technology as well as other types of potential conflicts.

Referral to the Magistrate for a preliminary Markman recommendation, followed by Rule 72 objections to District Judge, then final claims interpretations (pretrial or on JMOL), leading to final CAFC review, possibly means the disputed claim terms may be construed four times. Having four passes at one set of issues, to my way of thinking, is the Mark IV procedure, open to criticism about the time and cost for patentee’s to assert duly-granted patent rights.

To auto enthusiasts, Mark IV recalls heady days @1970, when less than ten grand would acquire either a carefree Austin-Healey Sprite Mark IV, or the elegant authority of the Lincoln Mark IV (with a 7L engine and those novel intermittent wipers). Today, ten thousand is not nearly enough to get through one week in a patent infringement suit.

The opening pages of the Magistrate’s Symbol report chart out the extended pre-pretrial period. A June order set a December hearing date for a then-pending Rule 65 motion, and then in July, the “parties [were] requesting preliminary claim construction in advance of preliminary injunction hearing,” and for that, the Markman issues went to the Magistrate.

This referral procedure may provide more fairness and a more robust record than when there is a rush to file and be heard on a motion for preliminary restraints, but the pendency and disposition of the issues is prolonged. How many times can a court act de novo? Also, in the time that the Magistrate makes a preliminary claims interpretation the case may be advancing, but those recommendations are “subject to change” at any time until final judgment, or earlier by an interlocutory appeal. If all possibilities for reinterpretations ensue, e.g., two CACF trips, then it may need to be renamed the Mark VII procedure.

When a client urges instant action to get a preliminary injunction, consider the Mark IV.

After a battering in district court, Qualcomm went to the Federal Circuit with an A-team, that included Carter Phillips and Evan Chesler. Still, the ruling was affirmance, but with a modified unenforceability mandate. The quirk is that Qualcomm sued for infringement of patents that allegedly embodied the “H.264″ standard, but the jury ruled there was no infringement. Instead of Qualcomm’s patents being “unenforceable against the world,” the Federal Circuit “narrow[ed] the scope of unenforceability to H.264-compliant products.” The non-infringement verdict provoked questions of whether Qualcomm’s sin of covering up its role in the SSO deserved a penance greater than just losing its infringement case. Instead of a non-infringement verdict ending the case or controversy, the issue turned to whether patents of participants in the SSO “reasonably might be necessary” to practice the standard. Possibly, should Qualcomm ever sue on these same patents, will the defense be measured against the claim limitations, or compliance with the H.264 standard?

This Qualcomm decision follows the emerging caselaw from Rambus v. Infineon (Fed. Cir. 2003) on the unenforceablity that can result from breach of a duty to disclose and/or to fairly license patents that might be necessary to practice a technology standard. Even the Federal Circuit struggled with whether the remedy flows from waiver, equitable estoppel, inequitable conduct, or patent misuse. Each of these doctrinal bases have been roundly criticized for adding to the uncertainty and expense of patent litigation. A factual inquiry subsumed in the reported cases are any equitable distinctions between standards that flow from a duly-constituted SSO, or a voluntary working group, or a profit-driven alliance between a few manufacturers. It is doubtful that the rules and risks do not differ depending on any differences in the form of group that promulgates a standard.

Competitors in the HDMI interface market got into suit when Silicon tried to enjoin Analogix’ chips that allegedly embodied trade secrets and infringed copyrighted source code. In January, the injunction was denied, and early trial date was set. After Silicon amended to add business interference and false advertising claims in May, Analogix sued separately for antitrust violations (5:08CV2917 N.D. Cal.). Most recently, the Court dissected some remaining claims, and entered a redacted form of its summary judgment ruling.
Comparing the Jan. and Nov. rulings suggests some gaps between initial beliefs about copying by Analogix. Early-filed affidavits averred that Analogix chips “mimic” plaintiff’s, and that circumstances let “one deduce that” those chips were “at least derivative in part,” but copying was not “blatant and obvious.” In the recent motion papers, Silicon Image conceded that its source code and that of Analogix were “not substantially similar.”
That copyright ruling does not foreclose Silicon’s trade secret claims about the “register map” in Analogix’ chips. Hotly disputed was whether the trade secret protection was lost due to disclosure. Note that the “strict” NDAs with Silicon’s customers expired after a few years, and that recipients of trade secrets had to maintain the information with only that “same degree of care …as it use[d for] its own information.” This enabled arguments about the trade secrets entering the public domain at the expiry date of the NDAs, and about some recipients’ “own” degree of care, or the HDMI industry standard, being fairly low.
The stronger claim was that Analogix false advertised its chips as “compatible” with or as “drop in replacements” for the Silicon chips, when the two were not “software compatible.” The Court followed precedent allowing anecdotal evidence to prove the ad copy was misleading. One point underlying this claim is the possibility of an ad injury claim, like that in the recently-filed Intel v. ICOP, 5:08CV3238 (N.D. Cal.) that seeks insurance reimbursement for class actions alleging the Pentium 4 processor speed was falsely advertised.
With the ruling that Silicon sought only an injunction against copyright violations, and the stronger false advertising claim requiring trial, plus Analogix’ separate monopolistic conduct suit in regard to the HDMI interface standards, the dispute may be prolonged.

To win share in the dashboard GPS device market requires functional software and up-to-date mapping data.  With both, men need never to stop and ask directions.
Allegedly, Navteq tied licenses for key map display patents with purchases of its map databases. Judge Whyte’s decision charts the gauntlet against an antitrust plaintiff in the NDCal.  Rigor is added by the burden of production, and of proving a competitor’s private sales conduct, as well as, actual or threatened impacts on the marketplace, and on customers.  Although Tele-Atlas plausibly could prove tying, it lacked evidence of market power by Navteq.
On the front end, challenges to ’sur-rebuttal’ expert opinion, and to hearsay in Rule 56 affidavits were decided.  A 2005 case management order “determined which party gets to have the last word on expert testimony,” and it was enforced, against plaintiff, to bar expert opinion on market power - the issue on which Tele-Atlas came up short.  Navteq’s summary judgment motion prompted Tele-Atlas to move for leave to file a further expert report.  That “change of heart,” when plaintiff “realized it had failed to produce evidence on” essential points was one ground to deny leave.  CMO deadlines, like the NDCal limits on preliminary infringement or validity contentions, are treated seriously and can foreclose later-refined factual and legal theories.
Difficulties discovering marketplace facts can leave an antitrust plaintiff with a too-thin, pretrial evidential showing.  Parties are reluctant to target coveted customers depositions.  Tele-Atlas argued for an “indulgent” reading of affidavits that recounted hearsay statements from non-party deponents who were tight-lipped about the alleged tying.  The “indulgent” view was rejected along with “many of the exhibits” that were “flagrant hearsay” that was “polluting the record.” Judge Whyte did “sympathize[] with the difficult decision” to compel customers to testify fully.
At its heart, the contest was over multiple intangibles - patent scope, licensed data, perceived tying, and market power - all conceptually definable, but existent only as legal constructs.  The tying claim was weakened by an express permission in the patent license to use map data from other sources.  Even so, marketplace perceptions “that a tying condition exists,” where the “belief stems from the seller’s conduct,” can prove that “a tying condition” existed.  Navteq’s suits against users of un-licensed data, and none against licensed purchasers of its mapping data was just enough for the tying allegations to survive the motion.
Next, Tele-Atlas argued that licensing patents and mapping data conferred “market power” on Navteq, but those facts were not enough to show “that Navteq possessed the power to manipulate price or output.”  Tele-Atlas could not rely on the late-submitted expert opinion on market share.  Last, the Judge felt that Tele-Atlas should have developed evidence “that the personal navigation devices on the market infringe” the licensed patents, which might bear on “how Navteq could exclude competition or control quantity …or price.”
In toto, what Tele-Atlas offered was not “sufficient evidence that Navteq possesses market power,” and as a result, summary judgment was granted against the antitrust plaintiff. 

-By Guest blawger, Lee Thomason - patent attorney & litigator in the Southeast is blawging here while preparing to teach IP law courses next year.