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1 Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today

2 Welcome! 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.

3 Handouts 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.

We have a website! The website includes information about the firm including information about attorneys presenting today as well as slides from the presentations today You will also find links to electronic resources related to intellectual property law. The website also includes a link to (next page)

5 Kinney & Lange Newsletter
The Kinney & Lange Newsletter Published 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.

6 Kinney & Lange IP Law Desk References
Intellectual Property Law for Business Lawyers ( edition, West) Patents, trademarks, and copyrights Trade secrets, advertising, the right of publicity, and foreign intellectual property rights Federal Intellectual Property Laws and Regulations (2013 edition, West Additional 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 annually Includes 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

7 Thrivent Facilities Our 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

8 CLE Credit for attending
Anticipated Minnesota credits: hours Anticipated Wisconsin credits: hours Kinney & 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.

9 Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today

Alan Koenck


12 Review – Changes Made by the AIA
Priority given to first inventor to file (not first to invent) New post-grant review proceedings and supplemental exam Best mode defense eliminated Prioritized examination Prior user rights Deceptive intent Filing by assignee

13 Further changes after AIA implementation
Some significant changes in USPTO fee structure Micro 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 Board Inter Partes Review and Post Grant Review are more expensive than Inter Partes Reexamination had been Issue Fee will be reduced beginning 1/1/2014

14 First 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 date A 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

15 Old 35 U.S.C. 102 vs. New 35 U.S.C. 102

16 First to publicly disclose/publish?
If you inherit a set of facts… Start with inventor’s effective filing date If 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

17 First to publicly disclose/publish?
If you are making your facts… Do not plan to rely on being first to publish Instead, make a filing as the first step Why? 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.


19 Other AIA issues -- declarations
Applications filed after Sept. 16, 2012 need a signed declaration that complies with the revised language prescribed by the AIA This includes continuation and divisional applications, which could otherwise be filed with a copy of the parent declaration Keep contact information for inventors that leave your company, you may need new declarations signed for continuing applications While it is possible to file without a signed declaration if the inventor cannot be found, it is still more straightforward to file with signatures

20 Other 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 granted For 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

21 Other 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 patent Proceed with caution relying on this defense Transferability is limited Does not apply if asserted patent was patented by a university Risk/reward analysis for maintaining a process as a trade secret should still be employed in a similar manner as under existing law

22 Other 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 invention By contrast, some provisions of the AIA will place high importance on recordkeeping and on documenting disclosure dates 1-year novelty grace period for public disclosure/publication Derivation Prior user rights

23 Other 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

24 AIA: What to remember As always, the best strategy for important inventions is to file a patent application promptly Consider prioritized examination for inventions that would benefit from faster issuance of a patent Continue to keep records of innovative activity, they are still useful Be wary of young, polite texters who think AIA means “appreciated in advance”

25 Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today

26 Intellectual Property Damages
Jeffrey J. Cordray Christensen Associates

27 Christensen Associates
Economic consulting firm Areas of litigation support include: Intellectual property Business disputes Anything else that requires a damages calculation

28 What damages are recoverable in patent infringement cases?
Plaintiff’s lost profits on lost sales Incremental profit margin (no fixed expenses—higher margin) Defendant’s profits (unjust enrichment) only for design patents Price erosion lost profits Reasonable royalty

29 Lost profits: incremental profits

30 Different margins Incremental margin Gross margin Operating margin
Net margin

31 How does an expert determine the incremental expenses?
Some categories are obvious If a good is purchased and resold Talk to finance/accounting personnel Can run regression to check for a positive correlation of expenses with sales volumes

32 What 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

33 Four 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 product Absence of acceptable, non-infringing substitutes Manufacturing and marketing capability to exploit demand (i.e., make the sales) An accurate accounting of lost profits Panduit Corp v. Stahlin Bros Fibre Works Inc., 575 F. 2d 1152 (6th Cir. 1978).

34 Lost profits (cont.) Plaintiff needs to prove the sales and profits it would have made A reasonable royalty will be paid on the remaining accused sales

35 Plaintiff’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 calculation Market can have more than two players

36 What 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? Geography Is the accused product only sold in certain areas? Distribution channel Does Plaintiff or Defendant only sell over the internet or also in stores?

37 Defendant’s design-around options
Design-around options available at the time of the first accused sale In 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.”

38 Lost profits summary Plaintiff needs to prove level of lost sales
Plaintiff has the burden of profit rate calculation Plaintiff’s incremental margin is applied Plaintiff needs to prove the capacity to make sales

39 Intel Corp. - gross margin vs. operating margin
Source: Intel Corp. SEC Form 10-K for the fiscal year ended December 29, 2012.

40 What products are included in the lost sales and royalty base?
Entire market value rule Functional units Basis of demand

41 Price erosion lost profits
Lower price needs to be due to accused sales Take into account other market factors Overall economy Competitors in the marketplace (including other products being sold by the defendant) Need to consider law of demand Need quantity offset for higher price (unless good is perfectly inelastic, etc.)

42 How are reasonable royalty rates calculated?
Georgia-Pacific analysis Willing licensee and willing licensor Date of 1st accused sale Full information 15 Georgia-Pacific factors Analytical approach Cost savings

43 Details 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).

44 Georgia-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.

45 Georgia-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.

46 Recent precedent on damages
Other licenses must be explained in detail if they are used Lucent 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

47 Recent precedent on damages (cont.)
Rule of thumb analysis is gone Uniloc 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 focus Incremental sales analysis and associated profits Incremental pricing analysis Incremental cost savings

48 Any questions on patent damages before we move on to other IP damages?

49 Plaintiff’s lost profits Infringer’s profits (unjust enrichment)
What damages are recoverable in copyright and trademark infringement cases? Plaintiff’s lost profits Infringer’s profits (unjust enrichment) Cannot be duplicative of lost profits Statutory damages Reasonable royalty

50 How is the calculation for the defendant’s unjust enrichment (profits) different than the plaintiff’s lost profits calculation Defendant’s burden to apportion profits Defendant’s burden to deduct expenses

51 According 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.”

52 considered damages under
What profits are considered damages under unjust enrichment??? Incremental margin Operating margin Net margin

53 Defendant’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!

54 Which expenses are generally incremental?
Manufacturing expenses? Factory overhead? Need a 3rd shift, etc. (step variable expenses) The amount of sales can change a category Sales personnel salaries? Sales commissions?

55 Intel Corp. - gross margin vs. operating margin
Source: Intel Corp. SEC Form 10-K for the fiscal year ended December 29, 2012.

56 Unjust enrichment copyright example
Hypothetical: a Burger King® Sidney Crosby bobble head doll is alleged to infringe the plaintiff’s copyright Plaintiff provided accused revenues for doll and food sales over the period the doll was sold What will the defendant look at?

57 Unjust enrichment calculations (cont.)
How much higher were food (and doll) sales specifically due to the doll being of Sidney Crosby? Wayne Gretzky Alex Ovechkin Due to the specific design vs. other available options? Younger likeness Different stick or skate It is the defendant’s burden to apportion, generally Subtract all relevant expenses

58 If plaintiff is seeking its lost profits
Plaintiff needs to prove level of lost sales Plaintiff has the burden of profit rate calculation (incremental profit margin) Plaintiff needs to prove the capacity to make sales Marketing capacity Manufacturing capacity

59 Questions?

60 Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today

David Fairbairn

62 REHEARING EN BANC Friday, September 13, 2013
Lighting Ballast Control LLC v. Philips Electronics North America Corp. REHEARING EN BANC Friday, September 13, 2013

63 Lighting 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?

64 Cyber 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.”

65 Patent 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)

66 Patent Infringement Infringement 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)

67 Patent 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”)

68 Patent Infringement In the aftermath of Markman I and II, the first step--Claim construction--is recognized as the most important step in modern patent litigation.

69 Patent Infringement Claim construction is now generally conducted by the judge in a claim construction hearing typically referred to as a “Markman Hearing”

70 Patent Infringement Claims 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)

71 Patent Infringement To 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

72 History Patent 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.

73 History As 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).

74 History Beginning 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.

75 History In 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.

76 History Since 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?

77 History First, 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.

78 History The Act created the U.S. Court of Appeals for the Federal Circuit. Exclusive jurisdiction over patent-related appeals Purpose – promote uniformity and consistency

79 History 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

80 History Third, results of jury trials were much more favorable to patent owners Less likely to find invalidity More likely to find infringement More generous damage awards

81 Inconsistency 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)

82 Inconsistency 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)

83 Inconsistency at the Federal Circuit
Thereafter, cases going both ways, until 1995 – Markman I

84 Markman I Trial: Judge instructed jury on what to consider in interpreting claims Evidence included testimony by inventor and an expert on meaning of disputed claim language After jury found infringement of two claims, judge interpreted the disputed claim language and granted JMOL

85 Markman I Federal Circuit:
Claim construction is a question of law solely for the judge Review of claim construction is subject to the de novo standard

86 Markman II Supreme Court:
Claim Construction is a question of law solely for the judge The 7th Amendment right to jury trial is not violated Silent as to de novo review

87 Aftermath of Markman I and II
Left to District Courts to determine procedures for how and when the claim construction would be performed

88 Aftermath 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.

89 Aftermath of Markman I and II
Claim Construction Cases Vitronics 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)

90 Aftermath 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

91 Cybor Corp. v FAS Technologies, Inc. (1998)
Federal Circuit en banc: Claim construction is purely a legal issue, is reviewed on a de novo review Rader (now Chief Judge) and Newman disserted

92 Reversal Rates Much criticism has been leveled at the reversal rates of patent appeals based on claim construction. Rates of reversal of over 40% have been reported.

93 Reversal Rates J. 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.

94 Reversal Rates Reversal rates have dropped significantly since Phillips (2005) All time low of 17% in 2011 All judges on Federal Circuit are now more likely to affirm claim construction than previously Nearly every technology sector is more likely to be affirmed on appeal

95 Revisiting Cybor In 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.

96 Revisiting Cybor The 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.

97 Lighting Ballast District 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)

98 Lighting Ballast Defendant 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.

99 Lighting 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”

100 Lighting 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?

101 Lighting Ballast Lighting Ballast Brief overrule Cybor
referred to Solicitor General’s brief in Retractable avoided 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

102 Lighting Ballast Universal brief
Clear error review of rulings that resolve disputed issues of historical facts based on extrinsic evidence Urged 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

103 Lighting Ballast Amicus Briefs AIPLA ABA
Fact finding should be reviewed under Clearly Erroneous standard 9 questions that should be characterized as findings of fact – listed in “Agenda for 21st Century Patent Reform”, ABA Section of IP Law (Sept. 2010) AIPLA Review underlying facts arising from intrinsic and extrinsic evidence for clear error Review the import of underlying facts de novo

104 Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today

105 Kinney & Lange IP Seminar
Fair Use and Copyright in Higher Education – An Evolving View from the Ivory Tower Kinney & Lange IP Seminar June 14, 2013

106 A flash mob did what at the union???
Fair Use and Copyright in Higher Education – An Evolving View from the Ivory Tower Kinney & Lange IP Seminar June 14, 2013

107 Only one thing is impossible for God: To find any sense in any copyright law on the planet.
- Mark Twain’s Notebook,

108 Whenever a copyright law is to be made or altered, then the idiots assemble.
- Mark Twain’s Notebook,

109 Advising Higher Education Clients
A unique challenge Faculty

110 Advising Higher Education Clients
A unique challenge Faculty

111 Advising Higher Education Clients
A unique challenge Faculty Work for hire (17 USC § 101) By employee and within scope of employment Owned by the EMPLOYER (17 USC § 201(b)) Turned on its head in academia Not by law; seldom by contract Instead by policy and custom Default to faculty ownership

112 Advising Higher Education Clients
A unique challenge Faculty Staff Librarians IP/Technology Transfer Others (indirect) Students Community at large

113 Advising Higher Education Clients
Delivery of client service Education Information Policies Procedures Checklists Legal opinions Proactive Reactive

114 Issues in Higher Education
Copies for classroom use Electronic course management Digitization and special collections Public performances Live music Sporting venues Common areas in residential halls File sharing

115 Issues in Higher Education
Flash mobs / viral YouTube videos Harlem Shake (2013) Team practices/locker rooms Sporting venues during games Dorms / Libraries / Common areas

116 Courtesy, Paul Daniel Rodriguez,

117 Issues in Higher Education
Flash mobs / viral YouTube videos Harlem Shake (2013) Team practices/locker rooms Sporting venues during games Dorms / Libraries / Common areas Call Me Maybe (2012) Improvisational dancing in vans Harvard baseball team has 17M+ views

118 Leveling 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))

119 Defenses to Copyright Infringement
Non-infringing use Independent creation Invalidity of copyright Misuse by copyright owner (e.g., unreasonable conduct; against public policy) Abandonment by copyright owner (e.g., explicit grant of work into public domain)

120 Defenses to Copyright Infringement
Non-infringing use Independent creation Invalidity of copyright Misuse by copyright owner (e.g., unreasonable conduct; against public policy) Abandonment by copyright owner (e.g., explicit grant of work into public domain)


122 Non-Infringing Activities

123 Avoiding Infringement Online
Hyperlinking is not “copying” for purposes of copyright As long as the site or target is itself an authorized copy, a link is permissible Ordinary due diligence to determine The “Source” web-site is preferable Good alternative to copying content Need to monitor/maintain the link

124 Non-Infringing Activities

125 Public Domain Expiration of Copyright All works published before 1923
All works published without notice between All works published without notice and without subsequent registration within five years between 1978 and March 1989 All works published with notice but not renewed

126 Public Domain Expiration of Copyright (cont’d)
All unpublished works by authors who died before 1943 All unpublished anonymous and pseudonymous works created before 1893 All unpublished works where date of author’s death is unknown created before 1893

127 Public 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 duties Works dedicated to the Public Domain Usually by way of express gift HOWEVER, Courts are reluctant to recognize such ‘gifts’ Questionable except in extreme cases

128 Relying on Public Domain
Trend has been to extend protection Term restoration legislation Removal of formalities Registration Renewal Liberal adherence to treaties and foreign law

129 Non-Infringing Activities

130 Teaching 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

131 Teaching Exceptions 17 USC § 110(2)
Exempts certain performances by government bodies and accredited, non-profit educational institutions Electronic transmission of “nondramatic literary or musical work[s]” and “reasonable and limited portions” of any other works (e.g., motion pictures)

132 Teaching 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 acquired Transmission must be limited to officially enrolled students

133 Teaching Exceptions 17 USC § 110(2) (cont’d)
Institution must have adequate policies Must describe and promote compliance Must provide notice of copyright protection Institution must utilize technology Prevent retention Prevent retransmission or dissemination

134 Non-Infringing Activities

Purpose and character of use (commercial vs. non-profit) Nature of copyrighted work Amount of work used versus work as a whole Effect of use on market value of copyrighted work

136 Fair Use Enumerated purposes (non-exclusive) Criticism Comment
News Reporting Teaching Scholarship Research

137 Fair Use Enumerated purposes (non-exclusive) Criticism Comment
News Reporting Teaching Scholarship Research

138 Fair Use “Fair use” of a copyrighted work is allowed
No liability for infringement and author is not entitled to a royalty No need to obtain permission Tends to be a subjective and difficult determination

139 Fair Use NOT carte blanche; there are restrictions
Competing interests must be balanced Historically – 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

140 Cambridge U. Press v. Becker
Academic and textbook publishers Cambridge University Press Oxford University Press, Inc. SAGE Publications, Inc. Backed by Copyright Clearance Center (CCC) To whom university libraries pay royalties

141 Cambridge U. Press v. Becker
Sued Georgia State University over its e-reserve practices Named several individuals as defendants GSU President Provost Dean of Libraries Members of the Board of Regents

142 Cambridge U. Press v. Becker
Plaintiffs identified > 100 works GSU asserted a fair use defense; had an imperfect policy but followed it Court found that fair use applied to e-reserves and specifically to textbooks Court ruled in favor of GSU on all but a handful of works

143 Cambridge 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 technology Attracted a lot of attention from the academy as well as the publishing industry Court rendered a thorough, 300+ page decision analyzing each work

144 Cambridge U. Press v. Becker
Court refused Plaintiffs’ attempt to remove GSU’s practices from scope of fair use protection Court did note that for purposes of the third fair use factor, “decidedly small” portions favor the user No “upper range,” but 18.52% found to be “close” to a loss of fair use

145 Cambridge U. Press v. Becker
Against the weight of precedent, and the letter and spirit of the statute, the court did establish quantitative guidelines Up to 10% of pages for books with fewer than 10 chapters Up to 1 complete chapter of books having 10 or more chapters Most courts have declined to adopt such hard limits

146 Cambridge U. Press v. Becker
Court awarded GSU attorney fees and costs Case now on appeal Helpful guidance Limited scope Impact to be determined

147 Authors Guild v. HathiTrust
HathiTrust engaged in a mass digitization project with Google Goal is to have books archived, readily searchable, and accessible to persons having impaired vision Authors sued HathiTrust and participating universities Alleged copyright infringement

148 Authors Guild v. HathiTrust
Defendants asserted fair use as a defense Court found that the project goals are primarily transformative uses Court recognized that it is sometimes “necessary to copy entire works” Court not persuaded that Plaintiffs’ claimed loss of prospective licensing revenue constituted market impact

149 Authors 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”

150 Authors 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

151 Authors Guild v. HathiTrust
As with Georgia State, this is only one trial court opinion Also on appeal Applies fair use to real-world activities that have a direct impact on higher education Authors and publishers are sure to take note Impact on future litigation? Google case is ongoing

152 AIME v. UCLA Educational video producers
Ambrose Video Publishing Ass’n for Information Media and Equipment Sued Cal Regents, UCLA Chancellor Alleged that licensed DVDs were copied and distributed/streamed online Defendants moved to dismiss

153 AIME v. UCLA Court granted motion to dismiss
AIME lacked associational standing Sovereign immunity as to certain Defendants Qualified immunity Reasonable person would not have known that conduct infringed copyright Ambiguity as to whether fair use applied Terms and conditions in license agreement also ambiguous (open system vs. closed system)

154 AIME v. UCLA Court granted motion to dismiss (cont’d)
Certain activities were licensed Copying was incidental fair use Copy must be created to upload content for streaming Streaming is not distribution No circumvention in violation of DMCA Had lawful access Claims dismissed with prejudice


156 Can 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 limit Digitization HathiTrust case: transformative uses are OK Streaming UCLA: courts will strictly construe existing licenses against licensor; fair use can be ambiguous; qualified immunity available

157 Can I use it? Two “safe harbors” Everything else involves risk
Get permission Don’t do it Everything else involves risk

158 Can I use it? Risks must be managed Is it worth it? Alternatives?
Public domain material Material released under a Creative Commons, GNU, or similar free license


160 Getting Permission Usually via a license
Up-front fees and/or royalties Non-profit, educational use MAY bring out the goodness in people, but no guarantee Often subject to negotiations Failed negotiations DO NOT preclude a later assertion of fair use Does put you on their radar screen, though

161 Getting Permission You may already have it! Institutional licenses
Music publishing rights ASCAP BMI SESAC Existing arrangements Electronic publishers Content aggregators

162 It is easier to beg for forgiveness than to ask for permission.


164 Fair Use Assessment What is the nature of the work to be used?
Commercial Popular Mainstream media Factual Non-profit Obscure Readily available or out-of-print

165 Fair Use Assessment What is the nature of the desired use? Commercial
Non-profit Educational Proportionality Proper attribution “Transformative” New expression or meaning New insights and understandings

166 Building a Good Faith Case
Put forth a genuine effort to identify the rights holder(s) Won’t always be easy or even possible Buy or use an authorized copy At least someone is getting paid Document, document, document Get a legal opinion

167 Legal Opinions Excellent evidence of GOOD faith
Must be bona fide, prepared by competent legal counsel Preferably in writing Advice of counsel defense does not excuse infringement but may limit remedies

168 Legal Opinions Avoid increased statutory damages, attorney fees
BUT BEWARE… Jeopardizes the attorney-client privilege Client needs to understand that counsel’s words of caution are likely to be used against her

169 What have we learned?

170 Flash mob.

171 Viral video.

172 Non-university employee.
Copyright lawyer. Non-university employee.

173 Thank you.

174 Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today

Alan Koenck

176 Review of patents and published applications
Third party (pre-issuance) submissions Supplemental examination Post grant review Ex parte reexamination Inter partes review

177 USPTO Statistics

178 USPTO Statistics

179 USPTO Statistics

180 USPTO Statistics

181 Third 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 merits Submission 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

182 Supplemental Examination
May only be filed by the patent owner May be filed any time after issuance of patent May be based on items of information that include publications and other information that may raise a substantial new question of patentability If a substantial new question of patentability is found by the PTO, ex parte reexamination commences

183 Ex Parte Reexamination
May be filed by patent owner or a third party Substantial new question of patentability must be based on a patent or printed publication filed per year Average pendency: 27.9 months All claims confirmed: 21%, claims changed: 68%, all claims canceled: 11%

184 Inter Partes Review Similar in many respects to inter partes reexamination Available 9 mos. after patent issuance (or after post-grant review, if any, is completed); unavailable >1 year after served with infringement complaint 520 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 months Inter Partes Review will be completed in 1 year – major change Inter partes reexam - all claims confirmed: 11%; claims changed: 45%; all claims canceled/disclaimed: 44% Estoppel – extends to grounds raised or reasonably could have raised

185 Post Grant Review Available for patents filed after March 16, 2013
Must be filed within 9 months of issuance of patent May challenge based on any grounds (not just 102 and 103) Final determination will be issued within 1 year

186 Inter 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 reexamination The 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

187 Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today

188 in the Corporate Environment
IP Licensing in the Corporate Environment Kinney & Lange 2013 IP Seminar Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today

189 Topics Business Context Key terms Legal issues Negotiation tips
Questions Today’s agenda.

190 Business Context for License Grant
Exclusive or Nonexclusive? Competitive space Minimize risk Freedom to operate Avoid legal expense (opinion, opposition, etc) Primary purpose of agreement? End result of development Supply agreement – often used as a backup to failure to supply Can go “under the radar” – business may not realize the effect of wording Settlement Post Acquisition Intercompany agreements The other side? Customer Supplier Competitor

191 Allocation of IP Rights Between Parties
Licensed products Patent license Product license Intellectual Property Rights involved Patents and patent applications Know-how Trademarks Copyright Future developments/grantbacks Alternate form of consideration for licensor Avoid unintended or unforeseeable improvements Blocking patents obtained Know-how or data generated by licensee

192 Exclusivity, Field and Territory
Maximize royalty return Exclusive license by field Multiple non-exclusive licenses Scope of field definition Current markets Adjacent or new markets Test the definition Ability to control downstream uses Regional or global territory Sufficient presence regionally/globally to fully exploit the license throughout the territory licensed Need to grant sublicenses to third parties

193 Royalties, Rates and Fees
Maintenance/Access fees Fixed Nonrefundable Royalty rates Paid-up Running Percentage of net sales Increasing or decreasing by volume Definition of Net Sales Per unit price Allows pricing flexibility by licensee Minimums Exclusivity Creditable against running royalties Conversion to nonexclusive or terminate

194 Patent Filing/Prosecution
Background patent applications Importance to other interests of licensor Foreground inventions conceived during agreement Inventorship disputes Sharing of draft patent applications between parties Outside counsel to file and prosecute patent applications

195 Right/Responsibility to Enforce Patents
Enforcement of licensed patent Importance to other interests of licensor Responsibility for costs Damage recovery should parallel Indemnification Multi-country enforcement

196 Term/Termination of Transaction
How is term defined By patent life on a country-by-country basis By a single finite term Does licensee obtain IP rights limited in time? License under know-how become paid-up When is a party entitled to terminate the transaction? Failure to exploit license Bankruptcy Requirements at termination

197 Dispute Resolution Binding Arbitration vs. Litigation Governing Law
Choice can be outcome determinative Governing Law Laws country-to-country vary significantly Strict contract interpretation vs. consideration of equities Venue Home forum advantage Availability or extent of discovery

198 Other Considerations Continued shift to law of the contract
Law of the contract law rather than patent law will determine economics of exploiting the patent rights Patent Exhaustion –(Quanta, Monsanto) Foreign sales Conditional sales May influence reasonable royalties and the ability to obtain an injunction (E-Bay) Invalidity challenge provisions (MedImmune) Creative licensing controls and interplay with antitrust postsale restraints Tying Patent Misuse EU Block exemption

199 Possible Strategies License the end-user (as far downstream as possible) More difficult without manufacturing source Parse the grant Make and have made use sell Field-of-use restrictions (General Talking Pictures Corp v. Western Electric Co., 304 US 175 (1938)) Geographically defined Defined by channel Defined by product

200 Possible Strategies Link license and supply where possible
Draft as one contract Consequences of one with another (e.g., breach) where drafted separately Designate third party manufacturer if NPE Place burden on the licensee to take action and provide appropriate consequences Cease selling in addition to notice Termination breach of contract damages that encompass consequential damages? Control title of the article that substantially embodies the patented method Can work well in a consumable/instrument construct

201 Negotiation Tips Negotiation grid Term sheet
First position Walk-aways Term sheet Due diligence on third party P&L Margins Sale price Project management Timelines Deliverables Scheduled calls In person meeting Control of the draft Trust

202 Questions? Questions?

203 Thank you Thank You!

204 Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today

205 Oracle v. Google and Its Impact on Software Development and Protection
Austen Zuege Important case for what should be protectable in software Usual arguments against IP (in general) and that software should or should not be treated like everything else (literature, etc.) Lotus v. Borland revisited

206 Overview Background Issues being litigated
Impact on copyrightability of software The future of licensing and “open source” software Implications for open source software development (open source and other licenses may not be required in certain circumstances)

207 IP Litigation Today 56% of patent suits filed in 2012 were by patent trolls Clashes of the titans continue too Copyright suits steady/upward Patent litigation up 24% from 2011 Delaware is most active district court for patent disputes (E.D. TX is second) Copyright litigation up in 2012, but lower than 2008 highs Oracle seemed to fall back on copyright after patent allegations fell through

208 Java – The Product Developed by Sun Microsystems
Released in 1996 Platform-independent programming language Windows, Macintosh, Linux Pre-made “packages” of software for common functions: Declaring code Implementing code Oracle bought Sun (including Java) in 2010 $7.4 Billion purchase price “Write once, run anywhere” Sun/Oracle Java slogan Favors 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 wheel Example packages: Open a secure internet connection Return the maximum of two numbers Declaring code: AKA declarations, headers, signatures, or names Includes connections/interfaces, parameters, exceptions, fields Implementing code: The actual working code

209 Java – The Product (cont.)
Virtual Machine Application Computer/Device Packages VM

210 Java – A History of Litigation
Sun v. Microsoft Antitrust suit commenced in October, 1997 Microsoft documents showed a “Strategic Objective” to “Kill cross-platform Java by grow[ing] the polluted Java market.” Settled in 2001 $20 Million to Sun Microsoft exited market Sun v. Microsoft II Commenced in 2002 over Java support in Windows XP Antitrust and patent issues settled in 2004 for around $2 Billion Microsoft’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)

211 Oracle v. Google – The Dispute
Licensing negotiations begin in 2005 Copyright Infringement Google’s Android products (Dalvik VM) 37 package definitions copied verbatim (admitted) Patent Infringement Resolution of data references in code, and static initialization A clash of business models Oracle writes software code and wants compensation for use Google (primarily) sells ads and will give away software to get ads In 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 searches Also, same 3rd party app (from an app store) won’t work on different mobile device platforms “What is Dalvik?” By Mark Murphy -

212 Oracle v. Google – The Dispute
Java Application Programming Interfaces (APIs) and packages Java.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 APIs API: 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 code Defining 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 given Rather than take a license, Google gambled that the declaring code is not copyrightable.

213 Oracle v. Google - District Court
Northern District of California (Case No. 10-cv-3561) Oracle sought $6 Billion and injunction Patent Infringement Seven 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 ‘520 Copyright Infringement

214 Oracle 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-privileged was from Google engineer Tim Lindholm Larry Page and Sergey Brin are Google’s co-founders

215 Oracle v. Google - District Court (cont.)
Verdict/Judgment (June 2012) Patents: Google wins declaratory judgment of non-infringement (deadlocked jury) Google loses validity challenges Copyright: Oracle wins on copying “rangeCheck code in and, and the eight decompiled files (seven ‘’ files and one ‘ACL’ file), [damages] of zero dollars (as per the parties’ stipulation).” Jury found infringement, but judge said copied material not copyrightable Google wins on the rest Google loses on waiver and implied license defenses

216 Oracle v. Google - District Court (cont.)
Judge Alsup on copyrightability of declaring code (5/31/12 order) Merger doctrine bars copyrightability The idea/expression dichotomy Unprotectable names and short phrases Structure 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 protection Used the common abstraction-filtration-comparison approach to filter out unprotectable elements and compare the rest Idea 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 copyright Judge 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 copyrightability Patentable? Compare SAP America, Inc. v. Versata Dev. Group, Inc., Case CBM (PTAB) U.S. Pat. No. 6,553,350 (unpatentable under §101)

217 Reactions Jury Foreman Greg Thompson: Google attorneys:
Oracle’s IP would be against public interest A feeling that Google had done something wrong Google 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.”

218 The Appeal Both parties appeal (consolidated as Fed. Cir. Case: ) Oracle’s main arguments: The sky is falling for software Harry Potter books analogy Protectable 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 issues Fed. Cir. Applies 9th Cir. copyright law Try to distinguish Lotus v. Borland on the facts as not involving copying code Oracle 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 resolve Analogy 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?

219 The Appeal (cont.) Google’s main arguments:
Oracle failed to challenge jury instruction on 7000 lines of code Interoperability 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 copyrightable Baker v. Selden, 101 U.S. 99 (1879) Fair use anyway Cross-appeal: copying was de minimus compared to registered whole Focus on how things must be expressed precisely to achieve interoperability This 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 copyright But 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

220 The Appeal (cont.) Six Amicus briefs supporting Oracle
Ralph Oman (former U.S. Register of Copyrights) Microsoft, EMC, Netapp BSA | The Software Alliance Picture Archive Council of America, Graphic Artists Guild Scott McNealy and Brian Sutphin Eugene Spafford, Zhi Ding, Lee Hollaar Five Amicus briefs supporting Google Intellectual Property Law Professors Computer & Communications Industry Association Computer Scientists Apiary, Inc. et al. Rackspace, Inc., Application Developers Alliance, et al. Most focus on district court’s alleged errors in applying the law for copyrightability Focus on how judge’s emphasis on “interoperability” was allegedly wrong A few focus on Google’s alleged nefarious motives and Picture Archive focuses on Google’s lack of a fair use defense Ralph Oman’s brief probably the one most worth reading Oracle, 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 patents plus those who think early cases (many from other circuits) should be maintained - Altai Chances of reversal?

221 Conclusion Timing was important
If reversed on appeal, may see more negotiations or battles over damages If cert. granted to S.Ct. eventually, could get definitive ruling on Lotus v. Borland issues Recent actions surrounding “unlocking” cell phones lacking exemption (Copyright Office and Library of Congress) is contrary to the theory of the Borland holding In terms of copyrightability, this case may be somewhat limited to those entities releasing a new programming language platform or other software that involves external calls In terms of licensing, this case is huge. Two of Oracle’s Java licenses are in jeopardy in this case Open source software could be closed off Also potential implications for: Library classification systems (Dewey® Decimals)– owned by Online Computer Library Center (OCLC)) Medical procedure/billing coding systems

222 Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today

223 Securing and Protecting Your Brand through your Domain Name
Catherine A. Shultz

224 Domain Names Substitute for unique IP address for the source computer of a website enabling users to access an online resource Associated with you and/or your products or services Easy for customers to find Memorable


226 Domain Names v. Trademarks
Identify the source of goods or services Regional registrations and rights Domain Names International First come, first-serve registration

227 Domain Names v. Trademarks
2nd Shift Sewer & Plumbing Call Someone Who Gives A Shift March 2012 Registration No. 4,328,324 Kokomo, Indiana USA Bill’s Second Shift Plumbing Call Someone Who Gives a Shift January 2012 Common law rights Sydney, Australia

228 Domain Name Dispute Resolution Options
Litigation Federal or state courts Based on any applicable state or federal law for trademarks Uniform Domain Name Dispute Resolution Policy .com, .net and .org domains Uniform Rapid Suspension System new gTLD’s

229 Uniform 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; and structure to resolve domain name disputes

230 Uniform Domain Name Dispute Resolution Policy
Implemented in 1999 Applicable to all .com, .net and .org domain names Sets forth terms and conditions that an administrative resolution service provider will use to govern a dispute Registration 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," and agreeing to UDRP terms if a third-party asserts a claim arising from alleged abusive registration

231 Uniform Domain Name Dispute Resolution Policy
Disputes are submitted to Service Providers National Arbitration Forum World Intellectual Property Organization Fees depend on the number of panelists $1500, one panelist $4000, three panelists Proceedings are all done through written submissions Typical proceedings are completed in 60 days

232 Uniform Domain Name Dispute Resolution Policy
Domain Name Hijacking Claim Claimant must show: Trademark rights in the mark Respondent’s domain is confusingly similar to the claimant’s trademark Respondent does not have rights or a legitimate interest in the domain Domain was registered and is being used in bad faith Bad Faith registration was primarily for the purpose of selling or transferring the domain name pattern of conduct to prevent the trademark owner from reflecting the mark in a domain name domain name registered primarily for the purpose to disrupt business of the claimant intentionally attracting users for commercial gain by creating likelihood of confusion with claimant’s mark

233 UDRP Proceeding Bill’s Second Shift Plumbing
Call Someone Who Gives a Shift January 2012 Common law rights Sydney, Australia 2nd Shift Sewer & Plumbing Call Someone Who Gives A Shift March 2012 Registration No. 4,328,324 Kokomo, Indiana USA 2nd Shift registered July 2012 Bill tries to register same domain August 2012 Bill files UDRP Complaint with WIPO September 2012 seeking transfer of the domain Trademark Rights in the mark Domain confusingly similar Respondent lacks rights Bad Faith registration and use

234 UDRP Proceeding Bill’s Second Shift Plumbing
Call Someone Who Gives a Shift January 2012 Common law rights Sydney, Australia Sally Opportunity Sally Opportunity registered July 2012 Offers to sell Bill the domain for $10,000 Bill files UDRP Complaint with WIPO September 2012 seeking transfer of the domain Trademark Rights in the mark Domain confusingly similar Respondent lacks rights Bad Faith registration and use

235 UDRP Proceeding Sally Opportunity Bill’s Second Shift Plumbing
Sally Opportunity registered July 2012 Sally sets the domain as a landing page for pay-per-click advertising unrelated to plumbing Offers to sell Bill the domain for $10,000 Bill files UDRP Complaint with WIPO September 2012 seeking transfer of the domain Bill’s Second Shift Plumbing Call Someone Who Gives a Shift January 2012 Common law rights Sydney, Australia Trademark Rights in the mark Domain confusingly similar Respondent lacks legitimate interest Bad Faith registration and use

236 Reverse 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 themselves No penalties, beyond the “shaming” of a finding of RDNH

237 Reverse Domain Name Hijacking
Factors: Claimant’s ability to prove the factors Actions of the trademark owner before and during UDRP proceedings Harassment by trademark owner Dishonest with panel Long period between learning of the website and bringing the proceeding Respondent informed Claimant of circumstances showing it was not domain name hijacking, but chose to bring the complaint anyway Whether represented by counsel

238 Reverse 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 in Feb. 2009 The Perkins later wanted the domain name for an online store Phillips backed out of each negotiation for purchase, sometimes at the last minute The Perkins applied for and were granted a U.S. trademark registration for MAMAMAYI The Perkins filed a UDRP complaint requesting domain name transfer Findings: Reverse Domain Name Hijacking by The Perkins

239 Reverse 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 name Reverse Domain Name Hijacking by The Perkins Trademark Registration post-dated the domain name registration Perkins were dishonest with the panel Perkins tried to buy the domain name first, indicating they knew Phillips had a legitimate claim to the domain name

240 UDRP – 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 effects Court does not give any deference to panel’s finding Can reverse a transfer order May give monetary sanctions for cases of reverse domain name hijacking

241 Uniform Rapid Suspension System
Applicable to the new gTLD’s ICANN approved service providers Even cheaper and more efficient system for suspending domain names 14 days for respondent to respond to a complain Speculated cost of around $500 Suspension of domain only (not transfer) Teeth for Reverse Domain Name Hijackers Appeals procedure

242 URS Proceeding Bill’s Second Shift Plumbing
Sally Opportunity Sally Opportunity registered for 2 years Sally 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 $10,000 Bill files URS Complaint with NAF seeking suspension of the domain Bill’s Second Shift Plumbing Call Someone Who Gives a Shift January 2012 Common law rights Sydney, Australia Trademark Rights in the mark Domain confusingly similar Sally’s domain name is suspended for the remainder of her two year registration period Respondent lacks rights Bad Faith registration and use

243 Trademark Clearinghouse
International database for registering trademarks $150 fee for one year Support both Trademark Claims and Sunrise Services, required in all new gTLDs Marks that can be included in the Clearinghouse: Nationally or regionally registered word marks Word marks that have been validated through a court of law or other judicial proceeding Word marks protected by a statue or treaty in effect at the time the mark is submitted to the Clearinghouse Other marks that constitute intellectual property may be recorded in the Clearinghouse by arrangement with a registry

244 Trademark Clearinghouse
Sunrise Services Advance opportunity to register domain names corresponding to their marks before available to public At least 30 days Trademark Claims Anyone attempting to register a domain name matching a recorded mark will receive notice of the mark Clearinghouse sends notice of registration to the trademark holder if the notified party proceeds to register After sunrise services and runs for at least the first 90 days of general operation and registration

245 Practice Tips Register your trademarks
National registration Trademark Clearinghouse Know your options for dealing with cases of domain name hijacking UDRP Proceedings URS Proceedings Litigation

246 UDRP Proceeding Domain Name Hijacking Reverse Domain Name Hijacking
Enforce your rights upon learning of violation Review overview of WIPO panel views on selected UDRP Questions and/or panel decisions Appeal options and timeframe Reverse Domain Name Hijacking Inform claimant of the reasons the claim will fail Select to have 3 panelists and research panelists comfortable with a RDNH finding Request and advocate for a reverse domain name hijacking finding

247 Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today

248 Divided Infringement After Akamai v. Limelight
Michael A. Collins

249 …and in 1996

250 …and in 1996

251 Akamai Technologies 1995 – MIT professors address what they dub the “world-wide wait” issue. HTML Content Domain Name Server (DNS) 1. URL ( 2. IP Address Content Provider Site 3. Request 4. HTML Content

252 Akamai Technologies The Solution:
HTML document is still provided by the content provider site Embedded objects served from ghost servers Requires modifying the URL of embedded objects Ghost Servers

253 Akamai’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]

254 Pre-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.

255 Pre-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.

256 Absurd Result! Better for Limelight to perform at least ONE of the claimed steps, than to perform NONE of the claimed steps.

257 Federal Circuit Decision in Akamai
Overruled the Fed. Cir’s 2007 decision in BMC Res. V. Paymentech Held: 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.

258 Federal Circuit Decision in Akamai
Dissent by Judge Newman Agreed 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’Malley Would have affirmed the “single-actor” rule of BMC.

259 Direct 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.

260 Supreme 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) .

261 Winners post-Akamai Patent-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 Entities Creates uncertainty with respect to a number of patents. May have to re-visit previous patents avoided through bifurcation of steps.

262 Tips 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 bank Draft 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.

263 Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today

264 Design Patents: Review & Developments
Matt DeRuyter

265 Roadmap Design patent review Apple v. Samsung lawsuits
International design protection The Hague Agreement

266 Overview 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 product Drawings of critical importance Applications are examined by the USPTO 14-year term (likely to change to a 15-year term soon) Limiting elements shown by solid lines Non-limiting elements shown by broken lines Designs must be novel and non-obvious Limited to a single inventive concept

267 Example Design Patent D672,543 Filed August 31, 2012
Granted December 18, 2012 NIKE, Inc. Claim: The ornamental design for a shoe outsole, as shown and described

268 Liability 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 awards Infringer’s total profit Not subject to apportionment

269 Test 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 comparison Verbal (not per se error)

270 Comparison to Other Forms of IP
Design Patents Utility Patents Trade Dress Subject matter Ornamental designs Useful inventions Visual appearance of product or packaging Term 14 years from issue 20 years from filing Use requirement Maintenance fees None 4, 8 and 12 years Renewals for registrations Infringement Visual evaluation; ordinary observer deceived? Element-by-element analysis Must show: 1) non-functional; 2) distinctive; and 3) likely to cause confusion Damages Infringer’s total profit; not subject to apportionment Reasonable royalty or lost profits; subject to apportionment Damages plus infringer’s profit

271 Who Files For Design Patent Protection?
Granted design patents ( ) Samsung Honda Sony Black & Decker Nike Kohler Proctor & Gamble Apple - 911 Microsoft 3M - 754 Goodyear Interlego - 599 Callaway - 424 March 2013 USPTO Design Patents Report

272 Apple, Inc. v. Samsung Electronics Co.
Many interesting facets Relationship of parties Proceedings in multiple jurisdictions Parties not “playing nicely” Design patents play an important role Cases still pending Demonstrates the power that design patents can hold Past iPhones contained nearly 50% Samsung parts (LCD screens, chips, etc.) Apple allegedly approached Samsung multiple times more than a year before litigation began

273 Apple Complaint April 2011: Apple sues Samsung for “slavishly” copying its “elegant and distinctive” products and designs Northern District of California Trade dress infringement Trademark infringement Unfair business practices Unjust enrichment Design patent infringement Patent (utility) infringement Apple seeks permanent injunction and damages 7 utility patents, 3 design patents Judge: Lucy H. Koh

274 D627,790 Graphical user interface for a display screen or portion thereof Filed August 20, 2007 Granted November 23, 2010 Icon grid of the iOS homescreen Phone, bezel and button design not claimed

275 D602,016 Electronic Device Filed June 6, 2008 Granted October 13, 2009
Device shell Two embodiments Face and back surface - black; sides - silver, grey or chrome Face and back surface - white; sides - silver, grey or chrome Button and screen not claimed

276 D618,677 Electronic Device Filed November 18, 2008
Granted June 29, 2010 Surface of the device

277 Allegedly Infringing Samsung Products
Smartphones Captivate Showcase Continuum Fascinate Vibrant Nexus S Galaxy S 4G Gem Epic 4G Transform Indulge Intercept Mesmerize Acclaim Tablets Galaxy Tab

278 Samsung Responds Samsung files patent infringement suits against Apple
Power reduction, 3G technology, wireless data communication Korea Japan Germany 3G wireless communication elements and user interfaces United States By October 2011, Apple and Samsung are involved in more than 20 legal battles in 10 countries 50 by July 2012 No focusing on design patent aspects of a few of the controversies

279 Setbacks for Samsung Preliminary injunctions against Samsung
EU (except Netherlands): Galaxy Tab 10.1 EU Community design registration Apple amends U.S. complaint to include additional claims of infringement Later scaled back to just Germany Upheld on appeal

280 Samsung Rebound November 2011 December 2011
Samsung redesigns Galaxy Tab 10.1 (10.1N) to get around injunction in Germany December 2011 Apple’s request for preliminary injunction in U.S. is denied Frame wraps around left and right sides Apple’s design illustrates edge-to-edge glass

281 Preliminary Injunction Denied
Apple was likely to succeed in proving infringement for some patents Apple failed to meet its burden of demonstrating irreparable harm D618,677 D593,087 D504,889 Likely valid Likely invalid Substantial questions concerning validity Likely infringed Likely no irreparable harm Irreparable harm likely

282 D‘889 Patent Validity The 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)

283 More 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/utilitarian Non-rectangular shape No rounded corners Non-horizontal speaker slots No front bezel Apple appeals denial of preliminary injunction

284 The Battles Continue… January 2012 February 2012 May 2012
Apple files suit in Germany alleging infringement of design rights Redesigned Galaxy Tab 10.1N Samsung smartphones (Galaxy S Plus, Galaxy S II) February 2012 No preliminary injunction against Galaxy Tab 10.1N in Germany May 2012 Allegations of destruction of evidence levied against Samsung CAFC affirms and remands preliminary injunction decision Court-ordered mediation attempt fails

285 CAFC 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 court Reverses 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

286 U.S. Trial Approaches… June 2012 July 2012
Apple wins preliminary injunction against Galaxy Tablet 10.1 in U.S. Samsung appeals immediately July 2012 UK judge: Galaxy Tab does not infringe Apple’s iPad design Models 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 10.1N But wins against Galaxy Tab 7.7

287 Just Before Trial July 2012 U.S. trial parameters set
Each side gets 25 hours for arguments 125 exhibits Samsung sanctioned for destroying evidence Court granted Apple’s request for “adverse jury instruction”

288 U.S. Trial Four design patents remain part of the case: D618,677

289 U.S. Trial Almost 40 iPhone and iPad prototypes revealed
Samsung unsuccessfully attempts to use a film and a UK television program as prior art Details of licensing attempts revealed $30 per phone / $40 per tablet Judge Koh frustrated by attorneys for both parties Samsung sends rejected evidence to media “…unless you're smoking crack you know these witnesses aren't going to be called!” 2001: A Space Odyssey Samsung attempted to show invalidity using earlier Sony phone

290 Closing and Verdict Damages Jury verdict Apple Samsung
Asks for more than $2.5B in damages Samsung $519M profits from accused devices Asks for $422M for Apple’s infringement Jury verdict Samsung products infringe 3 utility and 3 design patents and dilute Apple’s iPhone trade dress $1,049,343,540

291 Aftermath Apple unsuccessfully pursues permanent injunctions
Apple seeks to ban additional smartphones in a later filed case against Samsung’s Galaxy Nexus Preliminary injunction against Galaxy Tab 10.1 lifted No new trial based on juror misconduct Damages award reduced by $450.5M

292 More Aftermath UK court - Apple required to issue public notice stating that the Galaxy Pad does not infringe the iPad Apple 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 fees Cases and appeals still pending We’ll continue to hear more about Apple v. Samsung

293 The Hague System Hague System for the International Registration of Industrial Designs Goal: minimize formalities and expense One application One language One set of fees Administered by the International Bureau of WIPO Mechanism for registering a design in multiple countries

294 What 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 patent All three touch on ornamentation

295 Filing Particulars Application Fees
Filed in English, French or Spanish Up to 100 different designs can be included in one application Typically submitted directly to the IB Fees Basic fee Publication fee Fee for each Contracting Party (country to be entered) As long as they all belong to the same class State Office in some circumstances

296 Examination International Bureau of WIPO
Checks compliance with formal requirements Records in the International Register Office of each Contracting Party Performs normal examination Refusal of protection must be communicated to WIPO within 6-12 months Remedies are the same as if the application was directly filed with the office Cannot deny rights based on non-compliance of formal requirements No determination of novelty is made by WIPO Examination could be substantive or just registration No refusal within the prescribed time limit has the effect of a grant

297 Additional Notes Different examination standards in different Contracting States Substantive examination: Office reviews for novelty & non-obviousness Non-examination: validity challenged during litigation or other proceeding Approved registrations Initial period of 5 years Renewable for additional 5 year periods Hague System is an agreement for international procedure only Up to the total term of protection allowed by the Contracting Party Decision to grant or refuse rights determined by Contracting Parties, not WIPO

298 The U.S. and the Hague System
Three international treaties The Geneva Act of July 2, 1999 The Hague Act of November 28, 1960 The London Act of June 2, 1934 13 years in the making U.S. Senate did not ratify until 2007 Final implementing legislation signed into law on December 12, 2012 Likely to take effect on or shortly after December 12, 2013 The U.S. was one of the original signatories to the Geneva Act

299 What to Expect from the Hague System
Advantages Potential cost and time savings Up to 100 designs in a single application Limitations Only 60 Contracting Parties as of 01 June 2013 China, Japan, South Korea, Canada, Mexico, Brazil, Russia not members Already 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 portfolio 80% of the world’s designs are filed in China, Japan, South Korea and the U.S.

300 In Closing Design patents
Can be a meaningful part of an intellectual property portfolio Continued international harmonization will likely allow owners to obtain international design protection more easily

301 Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today

302 Supreme Court IP Review
Stephen M. Komarec

303 Growing 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.

304 What’s Recently Passed!
Association for Molecular Pathology v. Myriad Genetics, Inc. No , June 13, 2013 Patentable Subject Matter

305 What’s Passed Bowman v. Monsanto Co. (No. 11-796, May 13, 2013)
Patent Exhaustion Kirtsaeng v. John Wiley & Sons (No , March 19, 2013) Copyright Exhaustion Already, LLC v. Nike, Inc. (No , January 9, 2013) Jurisdiction for Trademark Validity Gunn v. Minton (No , February 20, 2013) Jurisdiction for Patent Malpractice

306 What’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 agreement Federal Trade Commission v. Watson Pharmaceuticals Inc. 677 F.3d 1298 (11th Cir. 2012) Pharmaceutical “pay-for-delay” arrangement in patent infringement settlement

307 A 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 audience I.e. the IP at play potentially impacts a large segment of consumers What is the role of the IP attorney?

308 Patent Exhaustion Association for Molecular Pathology v. Myriad Genetics, Inc. Patentable Subject Matter 1) 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?

309 Patent Eligibility Naturally Occurring DNA Segment cDNA
Is a product of nature Not patentable cDNA Not naturally occurring Patentable The issues in these cases are easily understood to a wide audience I.e. the IP at play potentially impacts a large segment of consumers What is the role of the IP attorney?

310 Noteworthy 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 audience I.e. the IP at play potentially impacts a large segment of consumers What is the role of the IP attorney?

311 Patent Language “It is a discovery of the present invention ….”
The Detailed Description describes the “iterative process” of discovery The Claims were directed to the genetic sequence in the gene Not a specific chemical composition of a particular molecule The issues in these cases are easily understood to a wide audience I.e. the IP at play potentially impacts a large segment of consumers What is the role of the IP attorney?

312 Patent 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?

313 Patented & Licensed Seeds
Resistant to herbicides including Monsanto’s Roundup Patented 5,352,605 & RE39,247 Sold under license Can be planted in only one season Can be 1) consumed or 2) sold as a commodity to grain elevator for later animal or human consumption What’s Missing? Cannot be replanted under terms of license

314 Actual Exhaustion 1st authorized sale of a patented article exhausts patent rights Eat First Sale Exhaustion Non-Infringing Uses Re-Sell Destroy

315 Licensed Use: “Planting”
The Monsanto Way Protected Seed Consume: “Eat” First Sale Licensed Use: “Planting” Authorized Reproduction Sell The next year you repeat this process.

316 8 The Bowman way Bootleg Seed Licensed Use, Production & Sale
Deceptive Purchase & Unauthorized Use Infringing Reproduction First Sale 8 Public Perception? Bowman is a customer not a competitor.

317 Bowman’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 planted Extending patent protection produces an exception to the Patent Exhaustion doctrine Bowman didn’t reproduce (make) anything The seed reproduced itself

318 Supreme 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).

319 Decision & Analysis Patent not Exhausted
“Because Bowman reproduced Monsanto’s patented invention, the exhaustion doctrine does not protect him.” Exception to Doctrine not Created Self-replication is “Using” and “Making” There may be self-replicating software issues The 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 purchased Sold with a license to use the seeds Non-replicating use as commodity is available This is not an exception for “self-replicating” technology Holding limited to facts of this case Does not apply to other self-replicating technology such as software Just using the seed the way intended is part of self-reproduction License permits select authorized uses such as planting Exhaustion does not extend to new production This is an additional transaction to the ordinary use that triggers Exhaustion Software What industries will benefit from the analysis?

320 Copyright Exhaustion Kirtsaeng v. John Wiley & Sons, Inc.
Question Presented 1) 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?

321 The Wiley Way Copyrighted Textbook Manufactured in the U.S.
Manufactured Abroad First Sale Abroad $ First Sale in the U.S. $$

322 Disclaimers The Fine Print

323 The Kirtsaeng Way “Exhausted” Textbook Public Perception?
Imported to U.S. Manufactured Abroad First Sale Abroad $ Sold in the U.S. $$

324 The 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”

325 Grey Market Goods It is lawful to “re-import” domestically produced works that have been exported Quality King Distributors, Inc. v. L’anza Research Int’l, Inc., 523 U.S (1998) Can works legally produced abroad be imported? Kirtsaeng Does “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 Limitation First Sale Doctrine applies to all legal sales Wiley & Sons: Geographic Limitation First Sale Doctrine does not apply to copies made abroad Equivalent to “in accordance with” or “in compliance with” the Copyright Act Applies only to particular copies made in territories in which the Copyright Act is law

327 Decision & Analysis Non-Geographic Interpretation is proper
Legislative History Statutory Interpretation Constitutional Objectives for Copyrights Practical Concerns Economic “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 consumer Protecting industries outside of the publisher Will this drive printing of books back to the U.S.?

328 Trademark Jurisdiction
Already, LLC v. Nike, Inc. Question Presented Is a federal court divested of jurisdiction for a federal trademark validity challenge if the registrant promises not to assert the mark?

329 Trademark Dispute Nike “Air Force 1” Already “Sugars”
TM Reg. No. 3,451,905 Already “Sugars” U.S. Design Pat. No. D594,641

330 Proceedings Nike sued Already for TM infringement
Already counterclaimed that TM is invalid Nike 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 extinguished Jurisdiction in Federal Court under Article III

331 Covenant Not to Sue Nike admits that Already no longer infringes
Nike promises not to raise a TM claim against Already Unconditional and Irrevocable “At a level that warrants litigation” Existing products Any future designs that are “colorable imitations” of current products

332 Legal Theory Both the District Court & the Second Circuit ruled in favor of Nike Jurisdiction Voluntary Cessation Doctrine Covenant was sufficient Already failed to show continuing controversy that warranted jurisdiction An “actual controversy” must exist through “all stages” of litigation The allegedly wrongful behavior must reasonably be expected to not recur

333 Supreme Court Nike Already
Met formidable burden of showing that wrongful behavior (e.g. aggressive TM assertion) would not recur Already Failed 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

334 Decision & Analysis Already Nike’s “wrongful behavior”
Would have to admit infringement Nike’s “wrongful behavior” Trademark Bullying Public Perception? ALREADY The Court accepted Nike’s contention that an exact copy of the AF1 shoe would be outside the Covenant A 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 Sugar NIKE Apparently sued not thinking Already would counterclaim Did not want to risk validity of TM registration

335 Patent 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 Actions Developed a computer program for securities trading Leased software to a securities brokerage Filed a patent over a year after making the lease Filed a patent infringement suit in Federal District Court against NASDAQ after the patent issued PROCEEDINGS NASDAQ moved for summary judgment The District Court granted summary judgment Minton filed a Motion to Reconsider Argued for first time that leased system was part of “ongoing testing” The District Court denied the Motion The argument was waived The Federal Circuit affirmed

336 The Malpractice Claim State District Court On Appeal
Minton argued that failure to raise experimental use defense led to invalidity On Appeal Minton argued that because the error “arose” under patent law, it “arises under” federal jurisdiction Supreme Court of Texas Decided it was a Federal Court issue State District Court: Minton failed to produce evidence of experimental use Gunn: Would have lost anyway Gunn Argued that the lease was not experimental Court of Appeals Minton Trial court should be vacated Rejected Minton’s argument Supreme Court of Texas Reversed: Minton’s claim was “a substantial federal issue”

337 The Legal Standard Federal jurisdiction over state law claim will lie if the issue is: 1) necessarily raised; 2) actually disputed; 3) substantial; and 4) capable of resolution in federal court without disrupting the federal- state balance approved by Congress

338 Supreme Court Minton’s claim fails to meet:
3) The federal issue is not substantial “in the relevant sense” The issue is substantial to the parties The issue is not substantial to the federal system as a whole 4) Malpractice is a state issue Federal Court jurisdiction over patent case established by Congress is not intended to displace State interest in regulating the legal profession Minton’s claim meets: 1) Resolution of federal question is necessary; The fictional case-within-a-case relates to experimental use 2) The federal issue is actually disputed The on-sale bar determines the outcome of the initial patent infringement case The malpractice claim is “backward looking” The outcome will not produce new patent law precedent Federal IP law issue does not automatically result in Federal jurisdiction District Courts have already remanded malpractice claims to State Courts in view of Gunn.

339 Still going … SCOTUS is not done yet!
Medtronic Inc. v. Boston Scientific Must the patentee prove infringement? or Must the licensee prove non-infringement? Federal Trade Commission v. Watson Pharmaceuticals Inc. Settlement agreement in a patent dispute 1) A restriction on generic entry until a future date, and 2) The brand’s payment of money or other value to the generic Anti-Trust issue? Myriad: Oral arguments heard in April Medtronic: Certiorari granted in May

340 Conclusions IP is at the Frontlines
Could filter down to being a more visible political issue Proposed Congressional actions Importance of having an IP enforcement plan Who 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

341 Intellectual Property: Key Topics for In-House Counsel and Business Lawyers Today

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