Presentation on theme: "Welcome! Katie Rahlin Good morning My name is Katie Rahlin"— Presentation transcript:
1Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today
2Welcome! Katie Rahlin Good morning My name is Katie Rahlin On behalf of everyone at Kinney & Lange, I welcome you to our 26th annual Intellectual Property seminar.If you have glanced at the agenda, you can see we have a full day planned, but before we start, I would like to cover a few administrative matters.
3Handouts Welcome Letter Agenda Question Form Evaluation Form You should have received a packet of handouts including a welcome letter, the agenda and two forms, an evaluation form and a question form.The question form is your opportunity to ask intellectual property law questions of general interest. We will answer some of these at the question and answer period at the end of today's seminar.One of our goals is to continuously improve the seminar from year to year.The evaluation form is an opportunity for us to receive comments from you on the content and format of the seminar. Your comments are essential in this continuous improvement process. Please return the form with your comments to the registration desk.
4www.kinney.com http://www.kinney.com/attorneys.php We have a website!The website includes information about the firm including information about attorneys presenting today as well as slides from the presentations todayYou will also find links to electronic resources related to intellectual property law.The website also includes a link to (next page)
5Kinney & Lange Newsletter The Kinney & Lange NewsletterPublished twice yearly.You may download the most recent issue and may also register to receive future issues by .Your may register online or at the registration desk.
6Kinney & Lange IP Law Desk References Intellectual Property Law for Business Lawyers ( edition, West)Patents, trademarks, and copyrightsTrade secrets, advertising, the right of publicity, and foreign intellectual property rightsFederal Intellectual Property Laws and Regulations (2013 edition, WestAdditional resources for intellectual property information in the form of two desk references.The first is Intellectual Property Law for Business Lawyers.This is authored by the attorneys at Kinney & Lange and is revised annually.The second is Federal Intellectual Property Laws and Regulations, also revised annuallyIncludes statutes and regulations commonly used in practice as well as a number of international agreements.Both of these references are available from the publisher, West
7Thrivent FacilitiesOur hosts here at Trivent have asked us to request that ONLY water be brought into the auditorium.Restrooms:Out the rear door and immediately to the right
8CLE Credit for attending Anticipated Minnesota credits: hoursAnticipated Wisconsin credits: hoursKinney & Lange website includes credits allowed in previous years:We have applied for and anticipate approval for hours of CLE credit in Minnesota and hours in Wisconsin.The Kinney & Lange website includes information on credits allowed in previous years.So now that we’ve gotten the administrative matters out of the way…on to the presentations. First Alan Koenk, a shareholder at Kinney & Lange, will be speaking about important things to remember under the America Invents Act.
9Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today
10IMPORTANT THINGS TO REMEMBER UNDER THE AMERICA INVENTS ACT (AIA) Alan Koenck
12Review – Changes Made by the AIA Priority given to first inventor to file (not first to invent)New post-grant review proceedings and supplemental examBest mode defense eliminatedPrioritized examinationPrior user rightsDeceptive intentFiling by assignee
13Further changes after AIA implementation Some significant changes in USPTO fee structureMicro entity discount of 75%RCE fees increased (additional increase for 2nd and subsequent RCEs)Appeal fees lower initially, higher overall once appeal is taken up by Patent Trial and Appeal BoardInter Partes Review and Post Grant Review are more expensive than Inter Partes Reexamination had beenIssue Fee will be reduced beginning 1/1/2014
14First Inventor to File – what to remember Priority is determined based on the Applicant’s effective filing date (including any priority claim, domestic or foreign)Prior art is defined as any public use or document prior to the Applicant’s effective filing dateA 1-year grace period is still in place for disclosures by the inventor – if the inventor publicly disclosed within one year of the effective filing date, no intervening disclosures are considered prior art
16First to publicly disclose/publish? If you inherit a set of facts…Start with inventor’s effective filing dateIf a prior public use or document exists, look for a public use or document disclosed by the inventor that pre-dates the prior art, within 1 year of the effective filing date
17First to publicly disclose/publish? If you are making your facts…Do not plan to rely on being first to publishInstead, make a filing as the first stepWhy?Reliance on a first publication (or a first filing, for that matter) requires that the invention as claimed is supported (i.e., enabled with complete written description) by the earlier disclosure. This is more likely to be satisfied by a patent filing than another type of publication.
19Other AIA issues -- declarations Applications filed after Sept. 16, 2012 need a signed declaration that complies with the revised language prescribed by the AIAThis includes continuation and divisional applications, which could otherwise be filed with a copy of the parent declarationKeep contact information for inventors that leave your company, you may need new declarations signed for continuing applicationsWhile it is possible to file without a signed declaration if the inventor cannot be found, it is still more straightforward to file with signatures
20Other AIA issues – prioritized exam Prioritized examination is available for a fee ($4000 large entity, $2000 small entity, $1000 micro entity)Signed declaration must be submitted with the filing of the priority examination application…if it is not, priority examination status will not be grantedFor continuations of applications filed before September 16, 2012, filing a copy of the old (pre-AIA) declaration from the parent application is not sufficient, will result in priority examination status being denied
21Other AIA issues – prior user rights 35 U.S.C. 273 was amended by the AIA to provide a defense to patent infringement based on commercial (non-public) use of a process more than 1 year before the effective filing date of the asserted patentProceed with caution relying on this defenseTransferability is limitedDoes not apply if asserted patent was patented by a universityRisk/reward analysis for maintaining a process as a trade secret should still be employed in a similar manner as under existing law
22Other AIA issues -- recordkeeping The intuitive view of the new first-to-file regime is that the importance of recordkeeping has decreased, due to the inability to swear behind prior art based on an earlier date of inventionBy contrast, some provisions of the AIA will place high importance on recordkeeping and on documenting disclosure dates1-year novelty grace period for public disclosure/publicationDerivationPrior user rights
23Other AIA issues – international publication Under the AIA, a public disclosure anywhere in the world qualifies as prior art under 35 U.S.C. 102(a)(1)Prior-filed U.S. patent applications are prior art under 35 U.S.C. 102(a)(2) as of their effective filing date, which includes any foreign priority filing date
24AIA: What to rememberAs always, the best strategy for important inventions is to file a patent application promptlyConsider prioritized examination for inventions that would benefit from faster issuance of a patentContinue to keep records of innovative activity, they are still usefulBe wary of young, polite texters who think AIA means “appreciated in advance”
25Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today
26Intellectual Property Damages Jeffrey J. Cordray Christensen Associates
27Christensen Associates Economic consulting firmAreas of litigation support include:Intellectual propertyBusiness disputesAnything else that requires a damages calculation
28What damages are recoverable in patent infringement cases? Plaintiff’s lost profits on lost salesIncremental profit margin (no fixed expenses—higher margin)Defendant’s profits (unjust enrichment) only for design patentsPrice erosion lost profitsReasonable royalty
30Different margins Incremental margin Gross margin Operating margin Net margin
31How does an expert determine the incremental expenses? Some categories are obviousIf a good is purchased and resoldTalk to finance/accounting personnelCan run regression to check for a positive correlation of expenses with sales volumes
32What does the plaintiff need to prove to obtain lost profits (its incremental margin)? That but for the infringement it would have made the accused sales
33Four prongs of the Panduit test According to Panduit, to obtain as damages the lost profits on lost sales, a patent owner must prove:Demand for the patented productAbsence of acceptable, non-infringing substitutesManufacturing and marketing capability to exploit demand (i.e., make the sales)An accurate accounting of lost profitsPanduit Corp v. Stahlin Bros Fibre Works Inc., 575 F. 2d 1152 (6th Cir. 1978).
34Lost profits (cont.)Plaintiff needs to prove the sales and profits it would have madeA reasonable royalty will be paid on the remaining accused sales
35Plaintiff’s market share State Industries, Inc. v. Mor-Flo Industries, Inc., 883 F.2d 1573 (C.A. Fed. (Tenn.), 1989)You can use market share as a component of a lost profits calculationMarket can have more than two players
36What products are in the market? Pricing considerations (Bic surfboard case)Product features (what is considered by the consumer?)Share of larger flat-panel TVs with higher resolution?All larger flat-panels?GeographyIs the accused product only sold in certain areas?Distribution channelDoes Plaintiff or Defendant only sell over the internet or also in stores?
37Defendant’s design-around options Design-around options available at the time of the first accused saleIn Grain Processing v. American Maize-Products (Fed Cir. 1999), the Court wrote:“[A] fair and accurate reconstruction of the ‘but for’ market also must take into account, where relevant, alternative actions the infringer foreseeably would have undertaken had he not infringed. Without the infringing product, a rational would-be infringer is likely to offer an acceptable noninfringing alternative, if available, to compete with the patent owner rather than leave the market altogether. The competitor in the ‘but for’ marketplace is hardly likely to surrender its complete market share when faced with a patent, if it can compete in some other lawful manner.”
38Lost profits summary Plaintiff needs to prove level of lost sales Plaintiff has the burden of profit rate calculationPlaintiff’s incremental margin is appliedPlaintiff needs to prove the capacity to make sales
39Intel Corp. - gross margin vs. operating margin Source: Intel Corp. SEC Form 10-K for the fiscal year ended December 29, 2012.
40What products are included in the lost sales and royalty base? Entire market value ruleFunctional unitsBasis of demand
41Price erosion lost profits Lower price needs to be due to accused salesTake into account other market factorsOverall economyCompetitors in the marketplace (including other products being sold by the defendant)Need to consider law of demandNeed quantity offset for higher price (unless good is perfectly inelastic, etc.)
42How are reasonable royalty rates calculated? Georgia-Pacific analysisWilling licensee and willing licensorDate of 1st accused saleFull information15 Georgia-Pacific factorsAnalytical approachCost savings
43Details of a royalty rate calculation: 15 Georgia-Pacific factors 1. The royalties received by the patentee for the licensing of the patent in suit, proving or tending to prove an established royalty.2. The rates paid by the licensee for the use of other patents comparable to the patent in suit.3. The nature and scope of the license, as exclusive or non-exclusive; or as restricted or non-restricted in terms of territory or with respect to whom the manufactured product may be sold.4. The licensor's established policy and marketing program to maintain his patent monopoly by not licensing others to use the invention or by granting licenses under special conditions designed to preserve that monopoly.5. The commercial, relationship between the licensor and licensee, such as, whether they are competitors in the same territory in the same line of business; or whether they are inventor and promoter.Georgia-Pacific Corp. v. United States Plywood Corp., 381 F.Supp. 1116, 1120, 166 USPQ 235 (S.D.N.Y. 1970), modified and aff'd, 446 F.2d 295, 170 USPQ 369 (2d Cir. 1971), cert. denied, 404 U.S. 870 (1971).
44Georgia-Pacific factors (cont.) 6. The effect of selling the patented specialty in promoting sales of other products of the licensee; the existing value of the invention to the licensor as a generator of sales of his non-patented items; and the extent of such derivative or convoyed sales.7. The duration of the patent and the term of the license.8. The established profitability of the product made under the patent; its commercial success; and its current popularity.9. The utility and advantages of the patent property over the old modes or devices, if any, that had been used for working out similar results.10. The nature of the patented invention; the character of the commercial embodiment of it as owned and produced by the licensor; and the benefits to those who have used the invention.
45Georgia-Pacific factors (cont.) 11. The extent to which the infringer has made use of the invention; and any evidence probative of the value of that use.12. The portion of the profit or of the selling price that may be customary in the particular business or in comparable businesses to allow for the use of the invention or analogous inventions.13. The portion of the realizable profit that should be credited to the invention as distinguished from nonpatented elements, the manufacturing process, business risks, or significant features or improvements added by the infringer.14. The opinion testimony of qualified experts.15. The amount that a licensor (such as the patentee) and a licensee (such as the infringer) would have agreed upon (at the time the infringer began) if both had been reasonably and voluntarily trying to reach an agreement; that is, the amount which a prudent licensee - who desired, as a business proposition, to obtain a license to manufacture and sell a particular article embodying the patented invention - would have been willing to pay as a royalty and yet be able to make a reasonable profit and which amount would have been acceptable by a prudent patentee who was willing to grant a license.
46Recent precedent on damages Other licenses must be explained in detail if they are usedLucent Technologies, Inc. v. Gateway, Inc., et al., 580 F.3d 1301 (Fed. Cir., 2009)“In the present case, the jury had almost no testimony with which to recalculate in a meaningful way the value of any of the running royalty agreements to arrive at the lump-sum damages award”ResQNet.Com, Inc. v. Lansa, Inc., 594 F.3d 860 (Fed. Cir., 2010)Plaintiff’s burden to show sufficiency of evidence
47Recent precedent on damages (cont.) Rule of thumb analysis is goneUniloc USA, Inc. v. Microsoft Corp. (Fed. Cir., 2011)25% rule of thumb called “a fundamentally flawed tool for determining a baseline royalty rate in a hypothetical negotiation”Determined to be “inadmissible under Daubert and the Federal Rules of Evidence”Now more of an incremental focusIncremental sales analysis and associated profitsIncremental pricing analysisIncremental cost savings
48Any questions on patent damages before we move on to other IP damages?
49Plaintiff’s lost profits Infringer’s profits (unjust enrichment) What damages are recoverable in copyright and trademark infringement cases?Plaintiff’s lost profitsInfringer’s profits (unjust enrichment)Cannot be duplicative of lost profitsStatutory damagesReasonable royalty
50How is the calculation for the defendant’s unjust enrichment (profits) different than the plaintiff’s lost profits calculationDefendant’s burden to apportion profitsDefendant’s burden to deduct expenses
51According to 17 USC § 504(b):“In establishing the infringer’s profits, the copyright owner is required to present proof only of the infringer’s gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work.”
52considered damages under What profits areconsidered damages underunjust enrichment???Incremental marginOperating marginNet margin
53Defendant’s margin—incremental to fully loaded—varies by circuit 7th, 3rd, and 10th Circuits use the incremental approach; 5th and 11th also have used this method.Judge Posner’s opinion in Taylor v. Meirick, 712 F.2d 1112 (7th Cir. 1983).2nd and 9th Circuits use full absorption approach; 4th, 6th, and 8th Circuits have also applied this.Judge Learned Hand’s ruling in Sheldon v. Metro-Goldwyn Pictures Corp., 106 F.2d 45 (2nd Cir. 1939).Make sure your expert knows the legal precedent!
54Which expenses are generally incremental? Manufacturing expenses?Factory overhead?Need a 3rd shift, etc. (step variable expenses)The amount of sales can change a categorySales personnel salaries?Sales commissions?
55Intel Corp. - gross margin vs. operating margin Source: Intel Corp. SEC Form 10-K for the fiscal year ended December 29, 2012.
56Unjust enrichment copyright example Hypothetical: a Burger King® Sidney Crosby bobble head doll is alleged to infringe the plaintiff’s copyrightPlaintiff provided accused revenues for doll and food sales over the period the doll was soldWhat will the defendant look at?
57Unjust enrichment calculations (cont.) How much higher were food (and doll) sales specifically due to the doll being of Sidney Crosby?Wayne GretzkyAlex OvechkinDue to the specific design vs. other available options?Younger likenessDifferent stick or skateIt is the defendant’s burden to apportion, generallySubtract all relevant expenses
58If plaintiff is seeking its lost profits Plaintiff needs to prove level of lost salesPlaintiff has the burden of profit rate calculation (incremental profit margin)Plaintiff needs to prove the capacity to make salesMarketing capacityManufacturing capacity
60Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today
61WILL THE FEDERAL CIRCUIT CHANGE ITS STANDARD OF REVIEW OF CLAIM CONSTRUCTION? David Fairbairn
62REHEARING EN BANC Friday, September 13, 2013 Lighting Ballast Control LLC v. Philips Electronics North America Corp.REHEARING EN BANC Friday, September 13, 2013
63Lighting Ballast Control LLC v. Philips Electronics North America Corp. Issues:Should this court overrule Cybor Corp. v. FAS Technologies, Inc.?Should this court afford deference to any aspect of a district court’s claim construction?If so, which aspects should be afforded deference?
64Cyber Corp. v FAS Technologies 138 F.3d 1448 (Fed. Cir.) en banc “[C]laim construction, as a purely legal issue, is subject to de novo review on appeal.”
65Patent Infringement“The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention.” 35 U.S.C. § 112(b)
66Patent InfringementInfringement is determined by reference to the claims of a patent, which provide the concise formal definition of the invention. Autogiro Co. of Am. v. United States, 384 F.2d 391, 396 (Ct. Cl. 1967)
67Patent Infringement Patent Infringement analysis involves two steps: The first step is determining the meaning and scope of the patent claims asserted to be infringed.The second step is comparing the properly construed claims to the device accused of infringing.Markman v. Westview Instruments Inc., 52 F.3d 967, 976 (Fed. Cir. 1995) (“Markman I”), aff’d, 517 U.S. 389 (1996) (“Markman II”)
68Patent InfringementIn the aftermath of Markman I and II, the first step--Claim construction--is recognized as the most important step in modern patent litigation.
69Patent InfringementClaim construction is now generally conducted by the judge in a claim construction hearing typically referred to as a “Markman Hearing”
70Patent InfringementClaims must be interpreted the same for both validity and infringement analyses. Smith Kline Diagnostics, Inc. v. Helena Lab Corp., 859 F.2d 878, 882 (Fed. Cir. 1988)
71Patent InfringementTo ascertain the meaning of words of a patent’s claims, courts consider three primary sources: the patent’s claims, its specification, and its prosecution history (“intrinsic evidence”). Extrinsic evidence, such as testimony of how those skilled in the art would interpret the claim language, may also be considered. Markman I, 52 F.3d at 979
72HistoryPatent claims were an American invention. Robert Fulton, inventor of the steamboat, included a claim in a patent in They first were mentioned in a statute in the Patent Act of 1836, ch. 357, § 6. Inclusion of a claim in the patent did not become a requirement until the Patent Act of 1870.
73HistoryAs early as 1848, the Supreme Court held that construction of a patent claim is a matter of law exclusively for the court. Hogg v. Emerson, 47 U.S. (6 How.) 437, 484. This principle was repeated in the leading patent treatises of the 19th century, including 2 Robinson, The Law of Patents for Useful Inventions, § 732 at (1890); Walker, Patent Laws § 75 at 173 (1895).
74HistoryBeginning at the turn of the 20th century, the trial of patent infringement cases diminished until in 1961, there were no patent infringement cases tried to a jury.
75HistoryIn the 1960’s and 1970’s, there was wide divergence in the treatment of patent cases by the district and circuit courts. The most extreme was the 8th Circuit, where 19 consecutive appeals resulted in invalidity of the patents in suit.
76HistorySince 1980, a dramatic shift has occurred. By 1994, 70% of patent cases tried were to a jury. That level has continued to the present. What caused the shift?
77HistoryFirst, forum shopping, inconsistent decisions, and non- uniformity in interpretation of the patent laws by the courts were recognized as problems, and were addressed by Congress with the Federal Court Improvement Act of 1982.
78HistoryThe Act created the U.S. Court of Appeals for the Federal Circuit.Exclusive jurisdiction over patent-related appealsPurpose – promote uniformity and consistency
79History Second, jury trials in IP cases found a champion $19.6 million jury award in a trademark case involving infringement of the mark “BigFoot”. Big O Tire Dealers v. Goodyear (1977)Duane Burton, Big O trial counsel, created BigFoot Press and began publishing Jury Instructions for IP Cases
80HistoryThird, results of jury trials were much more favorable to patent ownersLess likely to find invalidityMore likely to find infringementMore generous damage awards
81Inconsistency at the Federal Circuit 1983 – First opinion deciding a question of claim construction, held that claim construction was a matter of law. SSIH Equip SA. v. U.S. ITC, 718 F.2d 365, 376 (Fed. Cir. 1983)
82Inconsistency at the Federal Circuit 1984 – “If…the meaning of a term of art in the claims is disputed and extrinsic evidence is needed to explain the meaning, construction of the claims could be left to a jury.” Envirotech Corp v. Al George, Inc., 730 F.2d 753 (1984)
83Inconsistency at the Federal Circuit Thereafter, cases going both ways, until 1995 – Markman I
84Markman ITrial:Judge instructed jury on what to consider in interpreting claimsEvidence included testimony by inventor and an expert on meaning of disputed claim languageAfter jury found infringement of two claims, judge interpreted the disputed claim language and granted JMOL
85Markman I Federal Circuit: Claim construction is a question of law solely for the judgeReview of claim construction is subject to the de novo standard
86Markman II Supreme Court: Claim Construction is a question of law solely for the judgeThe 7th Amendment right to jury trial is not violatedSilent as to de novo review
87Aftermath of Markman I and II Left to District Courts to determine procedures for how and when the claim construction would be performed
88Aftermath of Markman I and II Federal Circuit embarked on a multi-year, case-by-case development of the analytical process to be used by the judges in performing claim construction.
89Aftermath of Markman I and II Claim Construction CasesVitronics Corp. v. Conceptronics, Inc. (1996)Johnson Worldwide Associates v. Zebco Corp. (1999)Rexnord Corp. v. Laitram Corp. (2001)Texas Digital Systems v. Telegenetics, Inc. (2002)Liebel-Flarsheim Co. v. Medrad, Inc. (2004)Phillips v. AWH Corp. (2005)
90Aftermath of Markman I and II Federal Circuit panels disagreed on whether the de novo standard or the “clearly erroneous” standard of review should apply to claim construction
91Cybor Corp. v FAS Technologies, Inc. (1998) Federal Circuit en banc:Claim construction is purely a legal issue, is reviewed on a de novo reviewRader (now Chief Judge) and Newman disserted
92Reversal RatesMuch criticism has been leveled at the reversal rates of patent appeals based on claim construction. Rates of reversal of over 40% have been reported.
93Reversal RatesJ. Jonas Anderson and Peter S. Menell have recently presented results of a comprehensive empirical analysis of the Federal Circuit’s claim construction jurisprudence from 2000 to Informal Deference: An Historical, Emirical, and Normative Analysis of Patent Claim Construction, Northwestern University Law Review, Vol. 108.
94Reversal RatesReversal rates have dropped significantly since Phillips (2005)All time low of 17% in 2011All judges on Federal Circuit are now more likely to affirm claim construction than previouslyNearly every technology sector is more likely to be affirmed on appeal
95Revisiting CyborIn Phillips, Circuit Judge Mayer dissenting, called on the court to revisit holdings of Markman I and Cybor that claim construction is a pure question of law subject to de novo review.Resurfaced in dissents or concurring opinions in 2006, 2008, 2010, and 2011.
96Revisiting CyborThe Supreme Court indicated a willingness to revisit the standard of review when reviewing a petition for cert in Retractable Techs. Inc. v. Becton Dickinson and Co., and invited the U.S. Solicitor General to file a brief.The Solicitor General urged the Supreme Court not to grant cert because the district court had not made factual finding or resolved evidentiary disputes in interpreting the claims.
97Lighting BallastDistrict court judge resolved claim construction issue of whether claim elements were “means plus function” elements under 35 U.S.C. § 112(f):“An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.”(emphasis added)
98Lighting BallastDefendant argued that the patent claims were invalid because the patent did not disclose any structure corresponding to the “voltage source means providing a constant or variable magnitude DC voltage between the DC input terminals.”The judge relied on testimony of the inventor and an expert on that a person of ordinary skill would readily ascertain structures capable of performing recited function.
99Lighting Ballast Federal Circuit reversed: Found that patent did not disclose structure to perform the function“testimony of one of ordinary skill in the art cannot supplant the total absence of structure in the specification”
100Lighting Ballast Request for Rehearing granted March 15, 2013 Should this court overrule Cybor?Should this court afford deference to any aspect of a district court’s claim construction?If so, which aspects should be afforded deference?
101Lighting Ballast Lighting Ballast Brief overrule Cybor referred to Solicitor General’s brief in Retractableavoided the issue of whether the testimony relied upon by the District Court Judge could cure the lack of any explicit disclosure in the specification of structure for performing to recited function
102Lighting Ballast Universal brief Clear error review of rulings that resolve disputed issues of historical facts based on extrinsic evidenceUrged caution “lest such a change be perceived as opening the door to every claim construction being portrayed as a disputed factual issue that invites a battle of experts on how they read a patent for purposes of litigation”De novo review of construction based solely on the intrinsic record
103Lighting Ballast Amicus Briefs AIPLA ABA Fact finding should be reviewed under Clearly Erroneous standard9 questions that should be characterized as findings of fact – listed in “Agenda for 21st Century Patent Reform”, ABA Section of IP Law (Sept. 2010)AIPLAReview underlying facts arising from intrinsic and extrinsic evidence for clear errorReview the import of underlying facts de novo
104Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today
105Kinney & Lange IP Seminar Fair Use and Copyright in Higher Education – An Evolving View from the Ivory TowerKinney & Lange IP SeminarJune 14, 2013
106A flash mob did what at the union??? Fair Use and Copyright in Higher Education – An Evolving View from the Ivory TowerKinney & Lange IP SeminarJune 14, 2013
107Only one thing is impossible for God: To find any sense in any copyright law on the planet. - Mark Twain’s Notebook,
108Whenever a copyright law is to be made or altered, then the idiots assemble. - Mark Twain’s Notebook,
109Advising Higher Education Clients A unique challengeFaculty
110Advising Higher Education Clients A unique challengeFaculty
111Advising Higher Education Clients A unique challengeFacultyWork for hire (17 USC § 101)By employee and within scope of employmentOwned by the EMPLOYER (17 USC § 201(b))Turned on its head in academiaNot by law; seldom by contractInstead by policy and customDefault to faculty ownership
112Advising Higher Education Clients A unique challengeFacultyStaffLibrariansIP/Technology TransferOthers (indirect)StudentsCommunity at large
113Advising Higher Education Clients Delivery of client serviceEducationInformationPoliciesProceduresChecklistsLegal opinionsProactiveReactive
114Issues in Higher Education Copies for classroom useElectronic course managementDigitization and special collectionsPublic performancesLive musicSporting venuesCommon areas in residential hallsFile sharing
115Issues in Higher Education Flash mobs / viral YouTube videosHarlem Shake (2013)Team practices/locker roomsSporting venues during gamesDorms / Libraries / Common areas
116Courtesy, Paul Daniel Rodriguez, youtube.com/user/iPaulTV
117Issues in Higher Education Flash mobs / viral YouTube videosHarlem Shake (2013)Team practices/locker roomsSporting venues during gamesDorms / Libraries / Common areasCall Me Maybe (2012)Improvisational dancing in vansHarvard baseball team has 17M+ views
118Leveling the Playing Field Statutory Protection (17 USC)Fair Use (§ 107)Libraries (§ 108)Face to face teaching (§ 110(1))Distance learning (§ 110(2))Statutory damages (§ 504(c)(2))
119Defenses to Copyright Infringement Non-infringing useIndependent creationInvalidity of copyrightMisuse by copyright owner (e.g., unreasonable conduct; against public policy)Abandonment by copyright owner (e.g., explicit grant of work into public domain)
120Defenses to Copyright Infringement Non-infringing useIndependent creationInvalidity of copyrightMisuse by copyright owner (e.g., unreasonable conduct; against public policy)Abandonment by copyright owner (e.g., explicit grant of work into public domain)
123Avoiding Infringement Online Hyperlinking is not “copying” for purposes of copyrightAs long as the site or target is itself an authorized copy, a link is permissibleOrdinary due diligence to determineThe “Source” web-site is preferableGood alternative to copying contentNeed to monitor/maintain the link
125Public Domain Expiration of Copyright All works published before 1923 All works published without notice betweenAll works published without notice and without subsequent registration within five years between 1978 and March 1989All works published with notice but not renewed
126Public Domain Expiration of Copyright (cont’d) All unpublished works by authors who died before 1943All unpublished anonymous and pseudonymous works created before 1893All unpublished works where date of author’s death is unknown created before 1893
127Public Domain Invalidated through litigation, court order All works published that were prepared by an officer/employee of the US government as part of his/her official dutiesWorks dedicated to the Public DomainUsually by way of express giftHOWEVER, Courts are reluctant to recognize such ‘gifts’Questionable except in extreme cases
128Relying on Public Domain Trend has been to extend protectionTerm restoration legislationRemoval of formalitiesRegistrationRenewalLiberal adherence to treaties and foreign law
130Teaching Exceptions 17 USC § 110(1) Exempts performances “in the course of face-to-face teaching activities…in a classroom or similar place devoted to instruction”Does not extend to streaming electronically (i.e., for distance learning purposes)May not even extend to places on campus
131Teaching Exceptions 17 USC § 110(2) Exempts certain performances by government bodies and accredited, non-profit educational institutionsElectronic transmission of “nondramatic literary or musical work[s]” and “reasonable and limited portions” of any other works (e.g., motion pictures)
132Teaching Exceptions 17 USC § 110(2) (cont’d) Must be “directly related and of material assistance to the teaching content”The copy must have been lawfully made or acquiredTransmission must be limited to officially enrolled students
133Teaching Exceptions 17 USC § 110(2) (cont’d) Institution must have adequate policiesMust describe and promote complianceMust provide notice of copyright protectionInstitution must utilize technologyPrevent retentionPrevent retransmission or dissemination
134Non-Infringing Activities HYPERLINKINGPUBLIC DOMAINTEACHING EXCEPTIONSFAIR USE
135Fair Use CONSIDERATIONS Purpose and character of use (commercial vs. non-profit)Nature of copyrighted workAmount of work used versus work as a wholeEffect of use on market value of copyrighted work
136Fair Use Enumerated purposes (non-exclusive) Criticism Comment News ReportingTeachingScholarshipResearch
137Fair Use Enumerated purposes (non-exclusive) Criticism Comment News ReportingTeachingScholarshipResearch
138Fair Use “Fair use” of a copyrighted work is allowed No liability for infringement and author is not entitled to a royaltyNo need to obtain permissionTends to be a subjective and difficult determination
139Fair Use NOT carte blanche; there are restrictions Competing interests must be balancedHistorically – and officially – no mathematical formula or hard and fast rules to determine whether use is ‘fair’Until recently, very little guidance for universities, esp. re: new technologies
140Cambridge U. Press v. Becker Academic and textbook publishersCambridge University PressOxford University Press, Inc.SAGE Publications, Inc.Backed by Copyright Clearance Center (CCC)To whom university libraries pay royalties
141Cambridge U. Press v. Becker Sued Georgia State University over its e-reserve practicesNamed several individuals as defendantsGSU PresidentProvostDean of LibrariesMembers of the Board of Regents
142Cambridge U. Press v. Becker Plaintiffs identified > 100 worksGSU asserted a fair use defense; had an imperfect policy but followed itCourt found that fair use applied to e-reserves and specifically to textbooksCourt ruled in favor of GSU on all but a handful of works
143Cambridge U. Press v. Becker Believed to be the first case in which a court has analyzed copyright and fair use in light of contemporary higher education practices and current technologyAttracted a lot of attention from the academy as well as the publishing industryCourt rendered a thorough, 300+ page decision analyzing each work
144Cambridge U. Press v. Becker Court refused Plaintiffs’ attempt to remove GSU’s practices from scope of fair use protectionCourt did note that for purposes of the third fair use factor, “decidedly small” portions favor the userNo “upper range,” but 18.52% found to be “close” to a loss of fair use
145Cambridge U. Press v. Becker Against the weight of precedent, and the letter and spirit of the statute, the court did establish quantitative guidelinesUp to 10% of pages for books with fewer than 10 chaptersUp to 1 complete chapter of books having 10 or more chaptersMost courts have declined to adopt such hard limits
146Cambridge U. Press v. Becker Court awarded GSU attorney fees and costsCase now on appealHelpful guidanceLimited scopeImpact to be determined
147Authors Guild v. HathiTrust HathiTrust engaged in a mass digitization project with GoogleGoal is to have books archived, readily searchable, and accessible to persons having impaired visionAuthors sued HathiTrust and participating universitiesAlleged copyright infringement
148Authors Guild v. HathiTrust Defendants asserted fair use as a defenseCourt found that the project goals are primarily transformative usesCourt recognized that it is sometimes “necessary to copy entire works”Court not persuaded that Plaintiffs’ claimed loss of prospective licensing revenue constituted market impact
149Authors Guild v. HathiTrust “The totality of the fair-use factors [in this case] suggest that copyright law’s ‘goal of promoting the Progress of Science…would be better served by allowing the use than by preventing it.’”“The public derives tremendous benefit…and authors stand to gain very little if the public is deprived of this resource”
150Authors Guild v. HathiTrust “Although I recognize that the facts here may on some levels be without precedent, I am convinced that they fall safely within the protection of fair use”“I cannot imagine a definition of fair use that would not encompass …Defendants’ [project]”Judgment granted for Defendants
151Authors Guild v. HathiTrust As with Georgia State, this is only one trial court opinionAlso on appealApplies fair use to real-world activities that have a direct impact on higher educationAuthors and publishers are sure to take noteImpact on future litigation?Google case is ongoing
152AIME v. UCLA Educational video producers Ambrose Video PublishingAss’n for Information Media and EquipmentSued Cal Regents, UCLA ChancellorAlleged that licensed DVDs were copied and distributed/streamed onlineDefendants moved to dismiss
153AIME v. UCLA Court granted motion to dismiss AIME lacked associational standingSovereign immunity as to certain DefendantsQualified immunityReasonable person would not have known that conduct infringed copyrightAmbiguity as to whether fair use appliedTerms and conditions in license agreement also ambiguous (open system vs. closed system)
154AIME v. UCLA Court granted motion to dismiss (cont’d) Certain activities were licensedCopying was incidental fair useCopy must be created to upload content for streamingStreaming is not distributionNo circumvention in violation of DMCAHad lawful accessClaims dismissed with prejudice
156Can I use it? Things are definitely looking up E-reserves Digitization GSU case: up to 10% of pages or 1 chapter will almost always be OK, but courts will impose an upper limitDigitizationHathiTrust case: transformative uses are OKStreamingUCLA: courts will strictly construe existing licenses against licensor; fair use can be ambiguous; qualified immunity available
157Can I use it? Two “safe harbors” Everything else involves risk Get permissionDon’t do itEverything else involves risk
158Can I use it? Risks must be managed Is it worth it? Alternatives? Public domain materialMaterial released under a Creative Commons, GNU, or similar free license
160Getting Permission Usually via a license Up-front fees and/or royaltiesNon-profit, educational use MAY bring out the goodness in people, but no guaranteeOften subject to negotiationsFailed negotiations DO NOT preclude a later assertion of fair useDoes put you on their radar screen, though
161Getting Permission You may already have it! Institutional licenses Music publishing rightsASCAPBMISESACExisting arrangementsElectronic publishersContent aggregators
162It is easier to beg for forgiveness than to ask for permission.
164Fair Use Assessment What is the nature of the work to be used? CommercialPopularMainstream mediaFactualNon-profitObscureReadily available or out-of-print
165Fair Use Assessment What is the nature of the desired use? Commercial Non-profitEducationalProportionalityProper attribution“Transformative”New expression or meaningNew insights and understandings
166Building a Good Faith Case Put forth a genuine effort to identify the rights holder(s)Won’t always be easy or even possibleBuy or use an authorized copyAt least someone is getting paidDocument, document, documentGet a legal opinion
167Legal Opinions Excellent evidence of GOOD faith Must be bona fide, prepared by competent legal counselPreferably in writingAdvice of counsel defense does not excuse infringement but may limit remedies
168Legal Opinions Avoid increased statutory damages, attorney fees BUT BEWARE…Jeopardizes the attorney-client privilegeClient needs to understand that counsel’s words of caution are likely to be used against her
181Third Party Prior Art Submissions May be filed after publication of a pending application, within 6 months of publication or before a first office action on the meritsSubmission consists of a listing of prior art and a concise description of relevance, which may be in the form of a claim chart but may not be a proposed rejection of claims
182Supplemental Examination May only be filed by the patent ownerMay be filed any time after issuance of patentMay be based on items of information that include publications and other information that may raise a substantial new question of patentabilityIf a substantial new question of patentability is found by the PTO, ex parte reexamination commences
183Ex Parte Reexamination May be filed by patent owner or a third partySubstantial new question of patentability must be based on a patent or printed publicationfiled per yearAverage pendency: 27.9 monthsAll claims confirmed: 21%, claims changed: 68%, all claims canceled: 11%
184Inter Partes ReviewSimilar in many respects to inter partes reexaminationAvailable 9 mos. after patent issuance (or after post-grant review, if any, is completed); unavailable >1 year after served with infringement complaint520 inter partes reexamination requests filed in 2012 (374 in 2011); 66% of patents were in litigation; 215 inter partes reviews filed in first 7.5 mos.Average pendency (inter partes reexam): 39.5 monthsInter Partes Review will be completed in 1 year – major changeInter partes reexam - all claims confirmed: 11%; claims changed: 45%; all claims canceled/disclaimed: 44%Estoppel – extends to grounds raised or reasonably could have raised
185Post Grant Review Available for patents filed after March 16, 2013 Must be filed within 9 months of issuance of patentMay challenge based on any grounds (not just 102 and 103)Final determination will be issued within 1 year
186Inter Partes Review – examples Based on a representative decision on a request for inter partes review available on the USPTO website, the requirement of showing a reasonable likelihood of prevailing on at least one claim will be more stringent than the substantial new question of patentability standard that was used in inter partes reexaminationThe decision on the request for inter partes review is made ground by ground – that is, inter partes review is granted only for grounds where there is a reasonable likelihood of prevailing
187Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today
188in the Corporate Environment IP Licensingin the Corporate EnvironmentKinney & Lange 2013 IP SeminarIntellectual Property: Key Topics forIn-House Counsel and Business Lawyers Today
190Business Context for License Grant Exclusive or Nonexclusive?Competitive spaceMinimize riskFreedom to operateAvoid legal expense (opinion, opposition, etc)Primary purpose of agreement?End result of developmentSupply agreement – often used as a backup to failure to supplyCan go “under the radar” – business may not realize the effect of wordingSettlementPost AcquisitionIntercompany agreementsThe other side?CustomerSupplierCompetitor
191Allocation of IP Rights Between Parties Licensed productsPatent licenseProduct licenseIntellectual Property Rights involvedPatents and patent applicationsKnow-howTrademarksCopyrightFuture developments/grantbacksAlternate form of consideration for licensorAvoid unintended or unforeseeable improvementsBlocking patents obtainedKnow-how or data generated by licensee
192Exclusivity, Field and Territory Maximize royalty returnExclusive license by fieldMultiple non-exclusive licensesScope of field definitionCurrent marketsAdjacent or new marketsTest the definitionAbility to control downstream usesRegional or global territorySufficient presence regionally/globally to fully exploit the license throughout the territory licensedNeed to grant sublicenses to third parties
193Royalties, Rates and Fees Maintenance/Access feesFixedNonrefundableRoyalty ratesPaid-upRunningPercentage of net salesIncreasing or decreasing by volumeDefinition of Net SalesPer unit priceAllows pricing flexibility by licenseeMinimumsExclusivityCreditable against running royaltiesConversion to nonexclusive or terminate
194Patent Filing/Prosecution Background patent applicationsImportance to other interests of licensorForeground inventions conceived during agreementInventorship disputesSharing of draft patent applications between partiesOutside counsel to file and prosecute patent applications
195Right/Responsibility to Enforce Patents Enforcement of licensed patentImportance to other interests of licensorResponsibility for costsDamage recovery should parallelIndemnificationMulti-country enforcement
196Term/Termination of Transaction How is term definedBy patent life on a country-by-country basisBy a single finite termDoes licensee obtain IP rights limited in time?License under know-how become paid-upWhen is a party entitled to terminate the transaction?Failure to exploit licenseBankruptcyRequirements at termination
197Dispute Resolution Binding Arbitration vs. Litigation Governing Law Choice can be outcome determinativeGoverning LawLaws country-to-country vary significantlyStrict contract interpretation vs. consideration of equitiesVenueHome forum advantageAvailability or extent of discovery
198Other Considerations Continued shift to law of the contract Law of the contract law rather than patent law will determine economics of exploiting the patent rightsPatent Exhaustion –(Quanta, Monsanto)Foreign salesConditional salesMay influence reasonable royalties and the ability to obtain an injunction (E-Bay)Invalidity challenge provisions (MedImmune)Creative licensing controls and interplay with antitrustpostsale restraintsTyingPatent MisuseEU Block exemption
199Possible StrategiesLicense the end-user (as far downstream as possible)More difficult without manufacturing sourceParse the grantMake and have madeusesellField-of-use restrictions (General Talking Pictures Corp v. Western Electric Co., 304 US 175 (1938))Geographically definedDefined by channelDefined by product
200Possible Strategies Link license and supply where possible Draft as one contractConsequences of one with another (e.g., breach) where drafted separatelyDesignate third party manufacturer if NPEPlace burden on the licensee to take action and provide appropriate consequencesCease selling in addition to noticeTerminationbreach of contract damages that encompass consequential damages?Control title of the article that substantially embodies the patented methodCan work well in a consumable/instrument construct
201Negotiation Tips Negotiation grid Term sheet First positionWalk-awaysTerm sheetDue diligence on third partyP&LMarginsSale priceProject managementTimelinesDeliverablesScheduled callsIn person meetingControl of the draftTrust
204Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today
205Oracle v. Google and Its Impact on Software Development and Protection Austen ZuegeImportant case for what should be protectable in softwareUsual arguments against IP (in general) and that software should or should not be treated like everything else (literature, etc.)Lotus v. Borland revisited
206Overview Background Issues being litigated Impact on copyrightability of softwareThe future of licensing and “open source” softwareImplications for open source software development (open source and other licenses may not be required in certain circumstances)
207IP Litigation Today56% of patent suits filed in 2012 were by patent trollsClashes of the titans continue tooCopyright suits steady/upwardPatent litigation up 24% from 2011https://lexmachina.com/2013/04/09/lex-machina-releases-the-aia-500-expanded/Delaware is most active district court for patent disputes (E.D. TX is second)Copyright litigation up in 2012, but lower than 2008 highsOracle seemed to fall back on copyright after patent allegations fell through
208Java – The Product Developed by Sun Microsystems Released in 1996Platform-independent programming languageWindows, Macintosh, LinuxPre-made “packages” of software for common functions:Declaring codeImplementing codeOracle bought Sun (including Java) in 2010$7.4 Billion purchase price“Write once, run anywhere” Sun/Oracle Java sloganFavors smaller programmers/app writers (saves them effort)Disfavored by many competing software giants who want exclusivity (and have the resources to reinvent the wheel)Packages avoid re-inventing the wheelExample packages:Open a secure internet connectionReturn the maximum of two numbersDeclaring code: AKA declarations, headers, signatures, or namesIncludes connections/interfaces, parameters, exceptions, fieldsImplementing code:The actual working code
209Java – The Product (cont.) Virtual MachineApplicationComputer/DevicePackagesVM
210Java – A History of Litigation Sun v. MicrosoftAntitrust suit commenced in October, 1997Microsoft documents showed a “Strategic Objective” to “Kill cross-platform Java by grow[ing] the polluted Java market.”Settled in 2001$20 Million to SunMicrosoft exited marketSun v. Microsoft IICommenced in 2002 over Java support in Windows XPAntitrust and patent issues settled in 2004 for around $2 BillionMicrosoft’s “J++”BIG money involved in this – Billion with a “B”2004 settlement was approximately the GDP of the entire country of Niger for 2002 (IMF estimate)
211Oracle v. Google – The Dispute Licensing negotiations begin in 2005Copyright InfringementGoogle’s Android products (Dalvik VM)37 package definitions copied verbatim (admitted)Patent InfringementResolution of data references in code, and static initializationA clash of business modelsOracle writes software code and wants compensation for useGoogle (primarily) sells ads and will give away software to get adsIn negotiations, Google wanted to have exclusivity for mobile devices (no more platform-independence)Google wants to lock-in in search engine to Android-based devices, to generate ad revenue from mobile device Internet searchesAlso, same 3rd party app (from an app store) won’t work on different mobile device platforms“What is Dalvik?” By Mark Murphy -
212Oracle v. Google – The Dispute Java Application Programming Interfaces (APIs) and packagesJava.package.Class.method()Oracle offers three licenses:General Public License (“GPL” or “open source”) - free of charge, but licensees may only use the packages (both declaring code and implementing code), if they “contribute back” the new work publicly.Specification License - licensee can use only the Specification—the declaring code—but must write its own implementing code.Commercial License – licensee can use and customize the full Java code in commercial products and keep its code secret.Oracle disputed whether only about APIsAPI: Specification (like a library) for interactions (Oracle: “trivial communication protocol to pass information between programs.”)Packages: (Oracle: “programs to perform often-needed functions and arranged in an intricate hierarchy”)“[C]ode, documentation, specifications, libraries, and other materials that comprise the Java platform[,]” including “Java method and class names, definitions, the content and organization of Java's documentation.”Google copied ≥7000 lines of declaring codeDefining code: most creative (Oracle) or not protectable (Google)The Lawsuit as a whole is really about whether Oracle’s “Specification License” is enforceable under copyright law.Google did not take Oracle’s licensing scheme as a givenRather than take a license, Google gambled that the declaring code is not copyrightable.
213Oracle v. Google - District Court Northern District of California (Case No. 10-cv-3561)Oracle sought $6 Billion and injunctionPatent InfringementSeven patents asserted: U.S. Patent Nos. 6,125,447; 6,192,476; 5,966,702; 7,426,720; RE38, 104; 6,910,205; and 6,061,520.Dismissed all but ‘104 and ‘520Copyright Infringement
214Oracle v. Google - District Court (cont.) Writ of Mandamus to Fed. Cir. (2012)Google’s assertion of privilege over an that stated in part:“What we’ve actually been asked to do (by Larry and Serge[y]) is to investigate what technical alternatives exist to Java for Android and Chrome. We’ve been over a bunch of these, and think they all suck. We conclude that we need to negotiate a license for Java under the terms we need.”Found non-privilegedwas from Google engineer Tim LindholmLarry Page and Sergey Brin are Google’s co-founders
215Oracle v. Google - District Court (cont.) Verdict/Judgment (June 2012)Patents:Google wins declaratory judgment of non-infringement (deadlocked jury)Google loses validity challengesCopyright:Oracle wins on copying “rangeCheck code in TimSort.java and ComparableTimSort.java, and the eight decompiled files (seven ‘Impl.java’ files and one ‘ACL’ file), [damages] of zero dollars (as per the parties’ stipulation).”Jury found infringement, but judge said copied material not copyrightableGoogle wins on the restGoogle loses on waiver and implied license defenses
216Oracle v. Google - District Court (cont.) Judge Alsup on copyrightability of declaring code (5/31/12 order)Merger doctrine bars copyrightabilityThe idea/expression dichotomyUnprotectable names and short phrasesStructure and organization was unprotectable command structure for a system or method of operation (17 U.S.C. §102(b))Fiest – no sweat of the brow protectionUsed the common abstraction-filtration-comparison approach to filter out unprotectable elements and compare the restIdea expression dichotomy: Baker v. Selden, 101 U.S. 99 (1879)Merger doctrine: if underlying idea can only be expressed one way, the idea and expression have merged and can’t be protected under copyrightJudge Alsup: “under the Copyright Act, no matter how creative or imaginative a Java method specification [Oracle: “declaring code”] may be, the entire world is entitled to use the same method specification (inputs, outputs, and parameters).”Focused on interoperability for copyrightabilityPatentable?Compare SAP America, Inc. v. Versata Dev. Group, Inc., Case CBM (PTAB) U.S. Pat. No. 6,553,350 (unpatentable under §101)
217Reactions Jury Foreman Greg Thompson: Google attorneys: Oracle’s IP would be against public interestA feeling that Google had done something wrongGoogle attorneys:GC Kent Walker: “The case illustrates the cost when the patent system doesn’t work well.”Renny Hwang: Oracle was “overstepping copyright law into claiming ideas.”Oracle CEO Larry Ellison:“It's really a copyright case.” “We won on infringement.”
218The AppealBoth parties appeal (consolidated as Fed. Cir. Case: )Oracle’s main arguments:The sky is falling for softwareHarry Potter books analogyProtectable expression:Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539 (1985) (magazine’s advance publication of portions of ex-President Ford memoir)Structure and organization protectable:Atari Games Corp. v. Nintendo of America, Inc., 975 F.2d 832 (Fed. Cir. 1992) (no merger)Johnson Controls Inc. v. Phoenix Control Systems, Inc., 886 F.2d 1173 (9th Cir. 1989)Lamps Plus, Inc. v. Seattle Lighting Fixture Co., 345 F.3d 1140, 1147 (9th Cir. 2003)No appeal of patent issuesFed. Cir. Applies 9th Cir. copyright lawTry to distinguish Lotus v. Borland on the facts as not involving copying codeOracle emphasizes there were alternative structures and organizations available, so argue no merger (somewhat contrary to lines of software cases on that point)Examples of protectable structures and organizations (non-software):Numerous non-copyrightable elements with sufficiently original selection and arrangement (9th Cir.)Chinese yellow pages (2nd Cir.)Dental procedure directory (taxonomy) (7th Cir.)Did District Judge dissect the work too minutely? Should software really be treated differently?Would Oracle have been better off suing only on copyright and not patent claims?Would a trademark cause of action have worked?Still would have functionality issues to resolveAnalogy of going to the library for a printed book. Should another book on same topic be able to use the same title so that someone used to one could pick up the second?
219The Appeal (cont.) Google’s main arguments: Oracle failed to challenge jury instruction on 7000 lines of codeInteroperability not copyrightable under §102(b)Apply a “filter”Sega Enters. Ltd. v. Accolade, Inc., 977 F.2d 1510 (9th Cir. 1993)Sony Computer Ent’mt, Inc. v. Connectix Corp., 203 F.3d 596 (9th Cir. 2000)Lotus Dev. Corp. v. Borland Int’l, Inc., 49 F.3d 807 (1st Cir. 1995) aff’d by an equally divided court 516 U.S. 233 (1996)Functional elements are patentable but not copyrightableBaker v. Selden, 101 U.S. 99 (1879)Fair use anywayCross-appeal: copying was de minimus compared to registered wholeFocus on how things must be expressed precisely to achieve interoperabilityThis was the district judge’s ruling, but is it factually correct?Filter: ex post (Google) or ex ante (Oracle)?Under Google’s view (Borland, Sega), copyrightability could exist then become lost based on later success (so more protection for less successful software)A curious view of “interoperability”Sega case dealt with ability of an entity writing software (e.g., video game) for a console made by another and console maker couldn’t lock out other software vendors through copyrightBut Google is not blocked from writing software for its own VM, they are trying to piggyback on existing software (Java) to avoid 3rd party programmers from having to learn new taxonomy for Google’s Java-like Android /Dalvik software (end user vs. programmers)Should someone be able to write a complete knock off of a given OS so that all programs written for Windows are “interoperable” with the knock off?Borland case is closest, but different circuit and S.Ct. split - dealt with menu emulation and found not copyrightable (Oracle says code not copied in that case)“degree of interoperability” – Oracle notes Android apps not compatible with Kindle Fire (Android-forked)It could be that fine distinctions between different packages will produce different outcomes
220The Appeal (cont.) Six Amicus briefs supporting Oracle Ralph Oman (former U.S. Register of Copyrights)Microsoft, EMC, NetappBSA | The Software AlliancePicture Archive Council of America, Graphic Artists GuildScott McNealy and Brian SutphinEugene Spafford, Zhi Ding, Lee HollaarFive Amicus briefs supporting GoogleIntellectual Property Law ProfessorsComputer & Communications Industry AssociationComputer ScientistsApiary, Inc. et al.Rackspace, Inc., Application Developers Alliance, et al.Most focus on district court’s alleged errors in applying the law for copyrightabilityFocus on how judge’s emphasis on “interoperability” was allegedly wrongA few focus on Google’s alleged nefarious motives andPicture Archive focuses on Google’s lack of a fair use defenseRalph Oman’s brief probably the one most worth readingOracle, Microsoft and others are part of BSA (but not Google)Supporting Google are some that are almost always opposed to IP protections, on the basis that technology (only or especially software) doesn’t work well with copyrights and/or patentsplus those who think early cases (many from other circuits) should be maintained - AltaiChances of reversal?
221Conclusion Timing was important If reversed on appeal, may see more negotiations or battles over damagesIf cert. granted to S.Ct. eventually, could get definitive ruling on Lotus v. Borland issuesRecent actions surrounding “unlocking” cell phones lacking exemption (Copyright Office and Library of Congress) is contrary to the theory of the Borland holdingIn terms of copyrightability, this case may be somewhat limited to those entities releasing a new programming language platform or other software that involves external callsIn terms of licensing, this case is huge.Two of Oracle’s Java licenses are in jeopardy in this caseOpen source software could be closed offAlso potential implications for:Library classification systems (Dewey® Decimals)– owned by Online Computer Library Center (OCLC))Medical procedure/billing coding systems
222Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today
223Securing and Protecting Your Brand through your Domain Name Catherine A. Shultz
224Domain NamesSubstitute for unique IP address for the source computer of a website enabling users to access an online resourceAssociated with you and/or your products or servicesEasy for customers to findMemorable
226Domain Names v. Trademarks Identify the source of goods or servicesRegional registrations and rightsDomain NamesInternationalFirst come, first-serve registration
227Domain Names v. Trademarks 2nd Shift Sewer & PlumbingCall Someone Who Gives A ShiftMarch 2012Registration No. 4,328,324Kokomo, Indiana USABill’s Second Shift PlumbingCall Someone Who Gives a ShiftJanuary 2012Common law rightsSydney, Australia
228Domain Name Dispute Resolution Options LitigationFederal or state courtsBased on any applicable state or federal law for trademarksUniform Domain Name Dispute Resolution Policy.com, .net and .org domainsUniform Rapid Suspension Systemnew gTLD’s
229Uniform Domain Name Dispute Resolution Policy Internet Corporation for Assigned Names and Numbers“dedicated to preserving the operational stability of the Internet; to promoting competition; to achieving broad representation of global Internet communities; and to developing policy appropriate to its mission through bottom-up, consensus-based processes.”coordinates the Domain Name System (DNS), Internet Protocol (IP) addresses, generic (gTLD) and country code (ccTLD) Top-Level Domain name system, and root server system; andstructure to resolve domain name disputes
230Uniform Domain Name Dispute Resolution Policy Implemented in 1999Applicable to all .com, .net and .org domain namesSets forth terms and conditions that an administrative resolution service provider will use to govern a disputeRegistration of a domain name includes the registrant:confirming that registering the domain name "will not infringe upon or otherwise violate the rights of any third party," andagreeing to UDRP terms if a third-party asserts a claim arising from alleged abusive registration
231Uniform Domain Name Dispute Resolution Policy Disputes are submitted to Service ProvidersNational Arbitration ForumWorld Intellectual Property OrganizationFees depend on the number of panelists$1500, one panelist$4000, three panelistsProceedings are all done through written submissionsTypical proceedings are completed in 60 days
232Uniform Domain Name Dispute Resolution Policy Domain Name Hijacking ClaimClaimant must show:Trademark rights in the markRespondent’s domain is confusingly similar to the claimant’s trademarkRespondent does not have rights or a legitimate interest in the domainDomain was registered and is being used in bad faithBad Faithregistration was primarily for the purpose of selling or transferring the domain namepattern of conduct to prevent the trademark owner from reflecting the mark in a domain namedomain name registered primarily for the purpose to disrupt business of the claimantintentionally attracting users for commercial gain by creating likelihood of confusion with claimant’s mark
233UDRP Proceeding Bill’s Second Shift Plumbing Call Someone Who Gives a ShiftJanuary 2012Common law rightsSydney, Australia2nd Shift Sewer & PlumbingCall Someone Who Gives A ShiftMarch 2012Registration No. 4,328,324Kokomo, Indiana USA2nd Shift registered July 2012Bill tries to register same domain August 2012Bill files UDRP Complaint with WIPO September 2012 seeking transfer of the domainTrademark Rights in the markDomain confusingly similarRespondent lacks rightsBad Faith registration and use
234UDRP Proceeding Bill’s Second Shift Plumbing Call Someone Who Gives a ShiftJanuary 2012Common law rightsSydney, AustraliaSally OpportunitySally Opportunity registered July 2012Offers to sell Bill the domain for $10,000Bill files UDRP Complaint with WIPO September 2012 seeking transfer of the domainTrademark Rights in the markDomain confusingly similarRespondent lacks rightsBad Faith registration and use
235UDRP Proceeding Sally Opportunity Bill’s Second Shift Plumbing Sally Opportunity registered July 2012Sally sets the domain as a landing page for pay-per-click advertising unrelated to plumbingOffers to sell Bill the domain for $10,000Bill files UDRP Complaint with WIPO September 2012 seeking transfer of the domainBill’s Second Shift PlumbingCall Someone Who Gives a ShiftJanuary 2012Common law rightsSydney, AustraliaTrademark Rights in the markDomain confusingly similarRespondent lacks legitimate interestBad Faith registration and use
236Reverse Domain Name Hijacking "using the UDRP in bad faith to attempt to deprive a registered domain-name holder of a domain name”Paragraph 15(e) UDRP:"after considering the submissions the panel finds that the complaint was brought in bad faith, for example in an attempt at Reverse Domain Name Hijacking or was brought primarily to harass the domain-name holder, the panel shall declare in its decision that the complaint was brought in bad faith and constitutes an abuse of the administrative proceeding"Can be requested by the respondent or can be brought up by the panelists themselvesNo penalties, beyond the “shaming” of a finding of RDNH
237Reverse Domain Name Hijacking Factors:Claimant’s ability to prove the factorsActions of the trademark owner before and during UDRP proceedingsHarassment by trademark ownerDishonest with panelLong period between learning of the website and bringing the proceedingRespondent informed Claimant of circumstances showing it was not domain name hijacking, but chose to bring the complaint anywayWhether represented by counsel
238Reverse Domain Name Hijacking Jessica Perkins and James Perkins - Mama May I, LLC. v. Chris Phillips, NAF Claim No. FA (July 2, 2012)Phillips purchased the domain name mamamayi.com in Feb. 2009The Perkins later wanted the domain name mamamayi.com for an online storePhillips backed out of each negotiation for purchase, sometimes at the last minuteThe Perkins applied for and were granted a U.S. trademark registration for MAMAMAYIThe Perkins filed a UDRP complaint requesting domain name transferFindings:Reverse Domain Name Hijacking by The Perkins
239Reverse Domain Name Hijacking Jessica Perkins and James Perkins - Mama May I, LLC. v. Chris Phillips, NAF Claim No. FA (July 2, 2012)Findings:No transfer of the domain nameReverse Domain Name Hijacking by The PerkinsTrademark Registration post-dated the domain name registrationPerkins were dishonest with the panelPerkins tried to buy the domain name first, indicating they knew Phillips had a legitimate claim to the domain name
240UDRP – Post Panel Findings Either party to a UDRP proceeding unsatisfied with the outcome, can file a suit for judicial relief under the Anticybersquatting Consumer Protection Act (“ACPA”)Panel’s finding under UDRP has no preclusive effectsCourt does not give any deference to panel’s findingCan reverse a transfer orderMay give monetary sanctions for cases of reverse domain name hijacking
241Uniform Rapid Suspension System Applicable to the new gTLD’sICANN approved service providersEven cheaper and more efficient system for suspending domain names14 days for respondent to respond to a complainSpeculated cost of around $500Suspension of domain only (not transfer)Teeth for Reverse Domain Name HijackersAppeals procedure
242URS Proceeding Bill’s Second Shift Plumbing Sally OpportunitySally Opportunity registered for 2 yearsSally set up a pay per click site directing to plumbing businesses and at one point has a link to Bill’s website,Offers to sell Bill the domain for $10,000Bill files URS Complaint with NAF seeking suspension of the domainBill’s Second Shift PlumbingCall Someone Who Gives a ShiftJanuary 2012Common law rightsSydney, AustraliaTrademark Rights in the markDomain confusingly similarSally’s domain name is suspended for the remainder of her two year registration periodRespondent lacks rightsBad Faith registration and use
243Trademark Clearinghouse International database for registering trademarks$150 fee for one yearSupport both Trademark Claims and Sunrise Services, required in all new gTLDsMarks that can be included in the Clearinghouse:Nationally or regionally registered word marksWord marks that have been validated through a court of law or other judicial proceedingWord marks protected by a statue or treaty in effect at the time the mark is submitted to the ClearinghouseOther marks that constitute intellectual property may be recorded in the Clearinghouse by arrangement with a registry
244Trademark Clearinghouse Sunrise ServicesAdvance opportunity to register domain names corresponding to their marks before available to publicAt least 30 daysTrademark ClaimsAnyone attempting to register a domain name matching a recorded mark will receive notice of the markClearinghouse sends notice of registration to the trademark holder if the notified party proceeds to registerAfter sunrise services and runs for at least the first 90 days of general operation and registration
245Practice Tips Register your trademarks National registrationTrademark ClearinghouseKnow your options for dealing with cases of domain name hijackingUDRP ProceedingsURS ProceedingsLitigation
246UDRP Proceeding Domain Name Hijacking Reverse Domain Name Hijacking Enforce your rights upon learning of violationReview overview of WIPO panel views on selected UDRP Questions and/or panel decisionsAppeal options and timeframeReverse Domain Name HijackingInform claimant of the reasons the claim will failSelect to have 3 panelists and research panelists comfortable with a RDNH findingRequest and advocate for a reverse domain name hijacking finding
247Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today
248Divided Infringement After Akamai v. Limelight Michael A. Collins
251Akamai Technologies1995 – MIT professors address what they dub the “world-wide wait” issue.HTML ContentDomain Name Server (DNS)1. URL (uspto.gov)2. IP AddressContent Provider Site3. Request4. HTML Content
252Akamai Technologies The Solution: HTML document is still provided by thecontent provider siteEmbedded objects served fromghost serversRequires modifying theURL of embedded objectsGhost Servers
253Akamai’s Patent 19. A content delivery service, comprising: replicating a set of page objects across a wide area network of content servers managed by a domain other than a content provider domain; [Limelight]for a given page normally served from the content provider domain, tagging the embedded objects of the page so that requests for the page objects resolve to the domain instead of the content provider domain; [Limelight’s customers]responsive to a request for the given page received at the content provider domain, serving the given page from the content provider domain; and [Limelight]serving at least one embedded object of the given page from a given content server in the domain instead of from the content provider domain. [Limelight]
254Pre-Akamai Theories of Infringement - Direct 35 U.S.C. § 271(a) Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.Single Entity Rule: Requires a single actor to perform ALL steps/elements of the claim.UNLESS … an agency-like relationship exists between multiple participants.
255Pre-Akamai Theories of Infringement - Indirect 35 U.S.C. §271(b) - Whoever actively induces infringement of a patent shall be liable as an infringer.Direct infringement under 271(a) is a predicate to a finding of induced infringement. BMC Resources v. Paymentech, LP (Fed. Cir. 2007)Accused infringer must have “knowledge” of the patent.No direct infringement because there is no single actor, therefore no finding of indirect (induced) infringement is possible.
256Absurd Result!Better for Limelight to perform at least ONE of the claimed steps, than to perform NONE of the claimed steps.
257Federal Circuit Decision in Akamai Overruled the Fed. Cir’s 2007 decision in BMC Res. V. PaymentechHeld: Induced infringement does not require a single actor perform each step.Remanded, providing that Limelight could liable for Induced Infringement under 271(b) if:(1) Limelight knew of Akamai's patent,(2) it performed all but one of the steps of the method claimed in the patent,(3) it induced the content providers to perform the final step of the claimed method, and(4) the content providers in fact performed that final step.
258Federal Circuit Decision in Akamai Dissent by Judge NewmanAgreed that inducement should not be predicated on direct infringement by a single actor;Argued that a single-actor rule should not be required for direct infringement either.Dissent by Judges Linn, Dyk, Prost, and O’MalleyWould have affirmed the “single-actor” rule of BMC.
259Direct vs. Indirect Infringement after Akamai Remains unchanged.Scope of induced infringement widened.Strict Liability.No longer requires direct infringement as a predicate (no single actor rule).Joint Infringement available if an agency relationship exists between the parties.Still requires knowledge of a patent and intent to infringe.No agency relationship required, but the inducer must cause, urge, encourage or aid the infringing conduct.
260Supreme Ct. Review?Petitions have been filed…awaiting decision from the S. Ct. (should come soon)Strong disagreement within the Federal Circuit surrounding the statutory language of § 271(a)-(c) .
261Winners post-AkamaiPatent-holders/Non-Practicing Entities (patent trolls)Clearly, much easier to enforce method patents on theories of inducement.Particular relevant to the software patents of today, where steps may be easily bifurcated among a number of parties.Practicing EntitiesCreates uncertainty with respect to a number of patents.May have to re-visit previous patents avoided through bifurcation of steps.
262Tips for Practitioners Draft single-actor claims!!Rule is still unsettled until we hear from the S. Ct.Draft claims from the perspective of different participants to a method.E-commerce transaction involved a user, a merchant and a bankDraft one set of claims that only requires participation from the user, another that only requires participation from a merchant, and another that only requires participation from a bank.Make use of apparatus and system claims.
263Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today
264Design Patents: Review & Developments Matt DeRuyter
265Roadmap Design patent review Apple v. Samsung lawsuits International design protectionThe Hague Agreement
266Overview of Design Patents 35 U.S.C. §171: Whoever invents any new, original and ornamental design for an article of manufacture may obtain a patent therefor….Protect ornamental features of a productDrawings of critical importanceApplications are examined by the USPTO14-year term (likely to change to a 15-year term soon)Limiting elements shown by solid linesNon-limiting elements shown by broken linesDesigns must be novel and non-obviousLimited to a single inventive concept
267Example Design Patent D672,543 Filed August 31, 2012 Granted December 18, 2012NIKE, Inc.Claim: The ornamental design for a shoe outsole, as shown and described
268Liability for Infringement 35 U.S.C. §289: Whoever during the term of a patent for a design, without license of the owner,(1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or(2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit….Potential for substantial damage awardsInfringer’s total profitNot subject to apportionment
269Test for Infringement Claim construction “Ordinary observer” test Generally pictorial - side-by-side comparison“Ordinary observer” test“[whether] an ordinary observer, familiar with the prior art designs, would be deceived into believing that the accused product is the same as the patented design”. David A. Richardson v. Stanley Works, Inc., 597 F.3d 1288, 1295 (Fed. Cir. 2010).Not conducted in a vacuum, but in view of the prior art. Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665 (Fed. Cir. 2008).Prior art sometimes used in comparisonVerbal (not per se error)
270Comparison to Other Forms of IP Design PatentsUtility PatentsTrade DressSubject matterOrnamental designsUseful inventionsVisual appearance of product or packagingTerm14 years from issue20 years from filingUse requirementMaintenance feesNone4, 8 and 12 yearsRenewals for registrationsInfringementVisual evaluation;ordinary observer deceived?Element-by-element analysisMust show:1) non-functional;2) distinctive; and3) likely to cause confusionDamagesInfringer’s total profit; not subject to apportionmentReasonable royalty or lost profits; subject to apportionmentDamages plus infringer’s profit
272Apple, Inc. v. Samsung Electronics Co. Many interesting facetsRelationship of partiesProceedings in multiple jurisdictionsParties not “playing nicely”Design patents play an important roleCases still pendingDemonstrates the power that design patents can holdPast iPhones contained nearly 50% Samsung parts (LCD screens, chips, etc.)Apple allegedly approached Samsung multiple times more than a year before litigation began
273Apple ComplaintApril 2011: Apple sues Samsung for “slavishly” copying its “elegant and distinctive” products and designsNorthern District of CaliforniaTrade dress infringementTrademark infringementUnfair business practicesUnjust enrichmentDesign patent infringementPatent (utility) infringementApple seeks permanent injunction and damages7 utility patents, 3 design patentsJudge: Lucy H. Koh
274D627,790Graphical user interface for a display screen or portion thereofFiled August 20, 2007Granted November 23, 2010Icon grid of the iOS homescreenPhone, bezel and button design not claimed
275D602,016 Electronic Device Filed June 6, 2008 Granted October 13, 2009 Device shellTwo embodimentsFace and back surface - black; sides - silver, grey or chromeFace and back surface - white; sides - silver, grey or chromeButton and screen not claimed
276D618,677 Electronic Device Filed November 18, 2008 Granted June 29, 2010Surface of the device
277Allegedly Infringing Samsung Products SmartphonesCaptivateShowcaseContinuumFascinateVibrantNexus SGalaxy S 4GGemEpic 4GTransformIndulgeInterceptMesmerizeAcclaimTabletsGalaxy Tab
278Samsung Responds Samsung files patent infringement suits against Apple Power reduction, 3G technology, wireless data communicationKoreaJapanGermany3G wireless communication elements and user interfacesUnited StatesBy October 2011, Apple and Samsung are involved in more than 20 legal battles in 10 countries50 by July 2012No focusing on design patent aspects of a few of the controversies
279Setbacks for Samsung Preliminary injunctions against Samsung EU (except Netherlands): Galaxy Tab 10.1EU Community design registrationApple amends U.S. complaint to include additional claims of infringementLater scaled back to just GermanyUpheld on appeal
280Samsung Rebound November 2011 December 2011 Samsung redesigns Galaxy Tab 10.1 (10.1N) to get around injunction in GermanyDecember 2011Apple’s request for preliminary injunction in U.S. is deniedFrame wraps around left and right sidesApple’s design illustrates edge-to-edge glass
281Preliminary Injunction Denied Apple was likely to succeed in proving infringement for some patentsApple failed to meet its burden of demonstrating irreparable harmD618,677D593,087D504,889Likely validLikely invalidSubstantial questions concerning validityLikely infringedLikely no irreparable harmIrreparable harm likely
282D‘889 Patent ValidityThe D‘889 design created the same visual impression as an earlier prototype (Fidler)HP Compaq Tablet TC1000 was cited to show a flat glass screen (lacking in Fidler)
283More on the Preliminary Injunction Apple’s briefs explain ways to work around Apple patents (i.e. alternate designs)Used to demonstrate that the features are not functional/utilitarianNon-rectangular shapeNo rounded cornersNon-horizontal speaker slotsNo front bezelApple appeals denial of preliminary injunction
284The Battles Continue… January 2012 February 2012 May 2012 Apple files suit in Germany alleging infringement of design rightsRedesigned Galaxy Tab 10.1NSamsung smartphones (Galaxy S Plus, Galaxy S II)February 2012No preliminary injunction against Galaxy Tab 10.1N in GermanyMay 2012Allegations of destruction of evidence levied against SamsungCAFC affirms and remands preliminary injunction decisionCourt-ordered mediation attempt fails
285CAFC Preliminary Injunction Ruling Denial of preliminary injunction was affirmed for 3 patents (D’087, D’677 and the ‘381 utility patent)Determination on the 4th (D’889) remanded to the district courtReverses Judge Koh’s ruling that the D‘889 patent is invalid“The District Court erred in finding that the Fidler tablet created the same visual impression as the D’899 patent.”Dissent: don’t remand; just enter a preliminary injunction
286U.S. Trial Approaches… June 2012 July 2012 Apple wins preliminary injunction against Galaxy Tablet 10.1 in U.S.Samsung appeals immediatelyJuly 2012UK judge: Galaxy Tab does not infringe Apple’s iPad designModels of the Galaxy Tab “do not have the same understated and extreme simplicity which is possessed by the Apple design”“[T]hey are not as cool”Apple loses suit in Germany against redesigned Galaxy Tab 10.1NBut wins against Galaxy Tab 7.7
287Just Before Trial July 2012 U.S. trial parameters set Each side gets25 hours for arguments125 exhibitsSamsung sanctioned for destroying evidenceCourt granted Apple’s request for “adverse jury instruction”
288U.S. Trial Four design patents remain part of the case: D618,677
289U.S. Trial Almost 40 iPhone and iPad prototypes revealed Samsung unsuccessfully attempts to use a film and a UK television program as prior artDetails of licensing attempts revealed$30 per phone / $40 per tabletJudge Koh frustrated by attorneys for both partiesSamsung sends rejected evidence to media“…unless you're smoking crack you know these witnesses aren't going to be called!”2001: A Space OdysseySamsung attempted to show invalidity using earlier Sony phone
290Closing and Verdict Damages Jury verdict Apple Samsung Asks for more than $2.5B in damagesSamsung$519M profits from accused devicesAsks for $422M for Apple’s infringementJury verdictSamsung products infringe 3 utility and 3 design patents and dilute Apple’s iPhone trade dress$1,049,343,540
291Aftermath Apple unsuccessfully pursues permanent injunctions Apple seeks to ban additional smartphones in a later filed case against Samsung’s Galaxy NexusPreliminary injunction against Galaxy Tab 10.1 liftedNo new trial based on juror misconductDamages award reduced by $450.5M
292More AftermathUK court - Apple required to issue public notice stating that the Galaxy Pad does not infringe the iPadApple complies (sort of)“So while the U.K. court did not find Samsung guilty of infringement, other courts have recognized that in the course of creating its Galaxy tablet, Samsung willfully copied Apple's far more popular iPad.”Apple reprimanded and ordered to pay Samsung’s legal feesCases and appeals still pendingWe’ll continue to hear more about Apple v. Samsung
293The Hague SystemHague System for the International Registration of Industrial DesignsGoal: minimize formalities and expenseOne applicationOne languageOne set of feesAdministered by the International Bureau of WIPOMechanism for registering a design in multiple countries
294What is an Industrial Design? WIPO: An industrial design constitutes the ornamental or aesthetic aspect of an article. A design may consist of three- dimensional features, such as the shape or surface of an article, or of two-dimensional features, such as patterns, lines or color.EU: “Design” means the appearance of the whole or a part of a product resulting from the features of, in particular, the lines, contours, colours, shape, texture and/or materials of any industrial or handicraft item itself and/or its ornamentation.Language is not quite the same as a U.S. design patentAll three touch on ornamentation
295Filing Particulars Application Fees Filed in English, French or SpanishUp to 100 different designs can be included in one applicationTypically submitted directly to the IBFeesBasic feePublication feeFee for each Contracting Party (country to be entered)As long as they all belong to the same classState Office in some circumstances
296Examination International Bureau of WIPO Checks compliance with formal requirementsRecords in the International RegisterOffice of each Contracting PartyPerforms normal examinationRefusal of protection must be communicated to WIPO within 6-12 monthsRemedies are the same as if the application was directly filed with the officeCannot deny rights based on non-compliance of formal requirementsNo determination of novelty is made by WIPOExamination could be substantive or just registrationNo refusal within the prescribed time limit has the effect of a grant
297Additional NotesDifferent examination standards in different Contracting StatesSubstantive examination: Office reviews for novelty & non-obviousnessNon-examination: validity challenged during litigation or other proceedingApproved registrationsInitial period of 5 yearsRenewable for additional 5 year periodsHague System is an agreement for international procedure onlyUp to the total term of protection allowed by the Contracting PartyDecision to grant or refuse rights determined by Contracting Parties, not WIPO
298The U.S. and the Hague System Three international treatiesThe Geneva Act of July 2, 1999The Hague Act of November 28, 1960The London Act of June 2, 193413 years in the makingU.S. Senate did not ratify until 2007Final implementing legislation signed into law on December 12, 2012Likely to take effect on or shortly after December 12, 2013The U.S. was one of the original signatories to the Geneva Act
299What to Expect from the Hague System AdvantagesPotential cost and time savingsUp to 100 designs in a single applicationLimitationsOnly 60 Contracting Parties as of 01 June 2013China, Japan, South Korea, Canada, Mexico, Brazil, Russia not membersAlready a “backdoor” for non-member countries“a real and effective industrial or commercial establishment, or a domicile, in at least one of the Contracting Parties”Simplify foreign design portfolio80% of the world’s designs are filed in China, Japan, South Korea and the U.S.
300In Closing Design patents Can be a meaningful part of an intellectual property portfolioContinued international harmonization will likely allow owners to obtain international design protection more easily
301Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today
303Growing relevance of IP SCOTUS is hearing an increasing % of IP cases“Still, the presence of four core IP cases among the 48 grants to date for OT2012 …, 8% of the argument calendar, is remarkable. For comparison, I count 5% IP cases in OT2011 (4/75) and 6% in OT (5/84). To get a sense for longer trends, ten years ago the Court decided 3 IP cases out of 73 opinions (4%) and twenty years ago only 2 out of 114 (2%).”Ronald Mann, Is the new economy driving the Court’s docket?, SCOTUSblog (Oct. 15, 2012, 1:51 PM), economy-driving-the-courts-docket/The quote shows the number of Cert. grants at the time of printing.Title of the article from which this is taken asks if the “new economy” is driving the Court’s docket.New economy implies transition from manufacturing to service-based economy.
304What’s Recently Passed! Association for Molecular Pathology v. Myriad Genetics, Inc.No , June 13, 2013Patentable Subject Matter
305What’s Passed Bowman v. Monsanto Co. (No. 11-796, May 13, 2013) Patent ExhaustionKirtsaeng v. John Wiley & Sons (No , March 19, 2013)Copyright ExhaustionAlready, LLC v. Nike, Inc. (No , January 9, 2013)Jurisdiction for Trademark ValidityGunn v. Minton (No , February 20, 2013)Jurisdiction for Patent Malpractice
306What’s to Come Medtronic Inc. v. Boston Scientific Corp. et al. 695 F.3d 1266 (Fed. Cir. 2012)Burden of showing patent infringement under license agreementFederal Trade Commission v. Watson Pharmaceuticals Inc.677 F.3d 1298 (11th Cir. 2012)Pharmaceutical “pay-for-delay” arrangement in patent infringement settlement
307A new economy or a new politic? Who is the alleged infringer?A competitor?A consumer?What is the IP owner’s strategy?Protecting what’s rightfully theirs?Battling with equal competitor/Protecting market share?Aggressive assertion/Stifle competition?The issues in these cases are easily understood to a wide audienceI.e. the IP at play potentially impacts a large segment of consumersWhat is the role of the IP attorney?
308Patent ExhaustionAssociation for Molecular Pathology v. Myriad Genetics, Inc.Patentable Subject Matter1) Are naturally occurring segments of human DNA patent eligable by virtue of their isolation from the rest of the human genome?2) Is synthetically created cDNA patent eligible?
309Patent Eligibility Naturally Occurring DNA Segment cDNA Is a product of natureNot patentablecDNANot naturally occurringPatentableThe issues in these cases are easily understood to a wide audienceI.e. the IP at play potentially impacts a large segment of consumersWhat is the role of the IP attorney?
310Noteworthy Language“Myriad’s principal contribution was uncovering the precise location and genetic sequence of the … genes within [the] chromosomes.”“Groundbreaking, innovative, or even brilliant discovery does not by itself satisfy the §101 inquiry.”“But extensive effort alone is insufficient to satisfy the demands of §101.”The issues in these cases are easily understood to a wide audienceI.e. the IP at play potentially impacts a large segment of consumersWhat is the role of the IP attorney?
311Patent Language “It is a discovery of the present invention ….” The Detailed Description describes the “iterative process” of discoveryThe Claims were directed to the genetic sequence in the geneNot a specific chemical composition of a particular moleculeThe issues in these cases are easily understood to a wide audienceI.e. the IP at play potentially impacts a large segment of consumersWhat is the role of the IP attorney?
312Patent Exhaustion Bowman v. Monsanto Co. et al. Question Presented 1) Does patent exhaustion exist after an authorized sale?2) Is there an exception to patent exhaustion for self-replicating technologies?
313Patented & Licensed Seeds Resistant to herbicides including Monsanto’s RoundupPatented5,352,605 & RE39,247Sold under licenseCan be planted in only one seasonCan be 1) consumed or 2) sold as a commodity to grain elevator for later animal or human consumptionWhat’s Missing?Cannot be replanted under terms of license
314Actual Exhaustion1st authorized sale of a patented article exhausts patent rightsEatFirst SaleExhaustionNon-Infringing UsesRe-SellDestroy
315Licensed Use: “Planting” The Monsanto WayProtected SeedConsume:“Eat”First SaleLicensed Use: “Planting”Authorized ReproductionSellThe next year you repeat this process.
3168 The Bowman way Bootleg Seed Licensed Use, Production & Sale Deceptive Purchase & Unauthorized UseInfringing ReproductionFirst Sale8Public Perception?Bowman is a customer not a competitor.
317Bowman’s Arguments Patent Exhaustion “Blame-the-Bean” “[T]he initial authorized sale of a patented item terminates all patent rights to that item.”Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617, 625 (2008).“Blame-the-Bean”Seeds are meant to be plantedExtending patent protection produces an exception to the Patent Exhaustion doctrineBowman didn’t reproduce (make) anythingThe seed reproduced itself
318Supreme Court Rule Patent Exhaustion It is “well settled” principle “that the exhaustion doctrine does not extend to the right to ‘make’ a new product.”Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 346 (1961).
319Decision & Analysis Patent not Exhausted “Because Bowman reproduced Monsanto’s patented invention, the exhaustion doctrine does not protect him.”Exception to Doctrine not CreatedSelf-replication is “Using” and “Making”There may be self-replicating software issuesThe reproduction is a “new transaction” covered by the patent not related to the first sale.Seeds are meant to be planted – otherwise they would not be purchasedSold with a license to use the seedsNon-replicating use as commodity is availableThis is not an exception for “self-replicating” technologyHolding limited to facts of this caseDoes not apply to other self-replicating technology such as softwareJust using the seed the way intended is part of self-reproductionLicense permits select authorized uses such as plantingExhaustion does not extend to new productionThis is an additional transaction to the ordinary use that triggers ExhaustionSoftwareWhat industries will benefit from the analysis?
320Copyright Exhaustion Kirtsaeng v. John Wiley & Sons, Inc. Question Presented1) How do the importation provisions and the first sale doctrine of the Copyright statutes impact copies that are legally made outside the U.S. and later imported without permission?
321The Wiley Way Copyrighted Textbook Manufactured in the U.S. Manufactured AbroadFirst Sale Abroad$First Sale in the U.S.$$
323The Kirtsaeng Way “Exhausted” Textbook Public Perception? Imported to U.S.Manufactured AbroadFirst Sale Abroad$Sold in the U.S.$$
324The Statutes § 106(3): Exclusive right to distribute copies § 109(a): Exclusive rights limited by “First Sale Doctrine”Extends to works “made lawfully under this title”§ 602(a)(1): Importation into the U.S. of works that have been acquired outside the U.S. “is infringement of the exclusive right to distribute copies … under section 106”
325Grey Market GoodsIt is lawful to “re-import” domestically produced works that have been exportedQuality King Distributors, Inc. v. L’anza Research Int’l, Inc., 523 U.S (1998)Can works legally produced abroad be imported?KirtsaengDoes “lawfully made under this title” of the “first sale” doctrine modify the “importation” provision of the statute?
326“Lawfully made under this title” Kirtsaeng: Non-Geographical LimitationFirst Sale Doctrine applies to all legal salesWiley & Sons: Geographic LimitationFirst Sale Doctrine does not apply to copies made abroadEquivalent to “in accordance with” or “in compliance with” the Copyright ActApplies only to particular copies made in territories in which the Copyright Act is law
327Decision & Analysis Non-Geographic Interpretation is proper Legislative HistoryStatutory InterpretationConstitutional Objectives for CopyrightsPractical ConcernsEconomic “horribles”It is lawful to import into the U.S. for re-sale a copyrighted work legally purchased abroad when the work was legally made abroad (or in the U.S.)Protecting the consumerProtecting industries outside of the publisherWill this drive printing of books back to the U.S.?
328Trademark Jurisdiction Already, LLC v. Nike, Inc.Question PresentedIs a federal court divested of jurisdiction for a federal trademark validity challenge if the registrant promises not to assert the mark?
330Proceedings Nike sued Already for TM infringement Already counterclaimed that TM is invalidNike issued “Covenant Not to Sue”Sought to dismiss its claims and Already’s claims w/o prejudice on the grounds that the case or controversy had been extinguishedJurisdiction in Federal Court under Article III
331Covenant Not to Sue Nike admits that Already no longer infringes Nike promises not to raise a TM claim against AlreadyUnconditional and Irrevocable“At a level that warrants litigation”Existing productsAny future designs that are “colorable imitations” of current products
332Legal TheoryBoth the District Court & the Second Circuit ruled in favor of NikeJurisdictionVoluntary Cessation DoctrineCovenant was sufficientAlready failed to show continuing controversy that warranted jurisdictionAn “actual controversy” must exist through “all stages” of litigationThe allegedly wrongful behavior must reasonably be expected to not recur
333Supreme Court Nike Already Met formidable burden of showing that wrongful behavior (e.g. aggressive TM assertion) would not recurAlreadyFailed to show an injury that would give rise to jurisdiction“[I]t is hard to imagine a scenario that would potentially infringe [Nike’s tradmark] and yet not fall under the Covenant”Did not show that it engages in or has plans to engage in activities not covered by the covenant
334Decision & Analysis Already Nike’s “wrongful behavior” Would have to admit infringementNike’s “wrongful behavior”Trademark BullyingPublic Perception?ALREADYThe Court accepted Nike’s contention that an exact copy of the AF1 shoe would be outside the CovenantA copy is a counterfeit, not a “colorable imitation”Could/Would not admit to infringing the Nike TM with a shoe that is not a copy of the AF1 and not a colorable imitation of the SugarNIKEApparently sued not thinking Already would counterclaimDid not want to risk validity of TM registration
335Patent Jurisdiction Gunn et al. v. Minton Question Presented Do state law legal malpractice claims relating to substantive patent matters “arise under” jurisdiction of the federal courts?Minton’s ActionsDeveloped a computer program for securities tradingLeased software to a securities brokerageFiled a patent over a year after making the leaseFiled a patent infringement suit in Federal District Court against NASDAQ after the patent issuedPROCEEDINGSNASDAQ moved for summary judgmentThe District Court granted summary judgmentMinton filed a Motion to ReconsiderArgued for first time that leased system was part of “ongoing testing”The District Court denied the MotionThe argument was waivedThe Federal Circuit affirmed
336The Malpractice Claim State District Court On Appeal Minton argued that failure to raise experimental use defense led to invalidityOn AppealMinton argued that because the error “arose” under patent law, it “arises under” federal jurisdictionSupreme Court of TexasDecided it was a Federal Court issueState District Court: Minton failed to produce evidence of experimental useGunn: Would have lost anywayGunnArgued that the lease was not experimentalCourt of AppealsMintonTrial court should be vacatedRejected Minton’s argumentSupreme Court of TexasReversed: Minton’s claim was “a substantial federal issue”
337The Legal StandardFederal jurisdiction over state law claim will lie if the issue is:1) necessarily raised;2) actually disputed;3) substantial; and4) capable of resolution in federal court without disrupting the federal- state balance approved by Congress
338Supreme Court Minton’s claim fails to meet: 3) The federal issue is not substantial “in the relevant sense”The issue is substantial to the partiesThe issue is not substantial to the federal system as a whole4) Malpractice is a state issueFederal Court jurisdiction over patent case established by Congress is not intended to displace State interest in regulating the legal professionMinton’s claim meets:1) Resolution of federal question is necessary;The fictional case-within-a-case relates to experimental use2) The federal issue is actually disputedThe on-sale bar determines the outcome of the initial patent infringement caseThe malpractice claim is “backward looking”The outcome will not produce new patent law precedentFederal IP law issue does not automatically result in Federal jurisdictionDistrict Courts have already remanded malpractice claims to State Courts in view of Gunn.
339Still going … SCOTUS is not done yet! Medtronic Inc. v. Boston ScientificMust the patentee prove infringement?orMust the licensee prove non-infringement?Federal Trade Commission v. Watson Pharmaceuticals Inc.Settlement agreement in a patent dispute1) A restriction on generic entry until a future date, and2) The brand’s payment of money or other value to the genericAnti-Trust issue?Myriad: Oral arguments heard in AprilMedtronic: Certiorari granted in May
340Conclusions IP is at the Frontlines Could filter down to being a more visible political issueProposed Congressional actionsImportance of having an IP enforcement planWho are you going to license?Who are you going to sue?How far are you going to take it?What will the public perception be?Issues are relevant to larger segment of the population
341Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today