Friday, 21 November 2014

Standard Essential Patents Lose Ground

Colm Ahern
PatLit has received the following item from Spain, written by Colm Ahern (of Elzaburu, Madrid) including Colm's comment on the Advocate General's opinion on a reference to the Court of Justice (CJEU) of a case outlined in a previous post:
The Advocate General’s conclusions in Huawei v ZTE (C‑170/13) which were published today amount to a significant departure from the very strict conditions laid down by the BGH in the Orange Book case regarding standard essential patents and anti-trust law. They also vindicate the Commission’s position which has been openly critical of Orange Book. 
The Advocate General rejects the application of the rules established by the BGH in the Orange Book case, because that dispute concerned a de facto standard whereas the patent in suit concerns a standard which was agreed as part of a standardization process undertaken by the European Telecommunications Standards Institute in which both Huawei and ZTE had taken part. Huawei had agreed to provide licenses to competitors on fair, reasonable, and non-discriminatory terms (FRAND).

The BGH held that the seeking of a cessation injunction by a patent holder with a dominant position, would only constitute abuse of that position if the alleged infringer had made un unconditional and binding license offer which could not be limited to cases where patent infringement had been proven. By contrast the Advocate General places the burden on the patent holder to first send a notice letter setting out not only the alleged infringement but also the terms of license offer under FRAND conditions of a type normally used. The alleged infringer could then respond with a counter-offer setting out alternative terms. The patent holder could only seek an injunction if the counter-offer were held not to be serious and to constitute a mere delaying tactic. The alleged infringer could also reserve the right to later challenge both patent validity and the existence of infringement.

If the CJEU now accepts the Advocate General’s conclusions, the rights held by owners of SEP patents under the “Orange Book Standard” will be significantly curtailed.

ZTE-Huawei and FRAND ( Case C 170/13) - The Advocate General has spoken

Melchior Wathelet Senior
Melchior Wathelet junior
In the case ZTE-Huawei, the Düsseldorf District Court had referred a number of questions to the Court of Justice. It is seeking to ascertain whether — and, if so, in what circumstances — an action for infringement brought by the holder of a patent which is ‘essential to a standard developed by a standards body’ (standard-essential patent (SEP)) against a manufacturer of products which comply with that standard constitutes an abuse of a dominant position for the purposes of EU competition law where the patent holder has made a commitment to grant licences on FRAND terms.

In yesterdays opinion, Advocate General Melchior Wathelet proposes to respond as follows (cited from the press release:
Where the proprietor of a standard-essential patent (SEP) has made a commitment to a standards body to grant third parties a licence on fair, reasonable and non-discriminatory (FRAND) terms, it constitutes an abuse of a dominant position for that proprietor to request corrective measures or to seek an injunction against a company that has infringed the SEP (‘the infringer’)4 (an action which, if successful, may cause the products and services supplied by the offending company to be excluded from the markets covered by the standard), where it is shown that the SEP holder has not honoured its commitment even though the offending company has shown itself to be objectively ready, willing and able to enter into such a licensing agreement.
In order to honour that commitment and to avoid abusing a dominant position, the SEP holder must, before making a request for corrective measures or seeking an injunction, alert the infringer to the infringement at issue in writing, giving reasons, and specifying the SEP concerned and the way in which it has been infringed by that company, unless it has been established that the alleged infringer is fully aware of the infringement. The SEP holder must, in any event, present the alleged infringer with a written offer of a licence on FRAND terms and that offer must contain all the terms normally included in a licence in the sector in question, including the precise amount of the royalty and the way in which that amount is calculated.
The infringer must respond to that offer in a diligent and serious manner. If it does not accept the SEP holder’s offer, it must promptly present the latter with a reasonable counter-offer, in writing, in relation to the clauses with which it disagrees. An application for corrective measures or for an injunction does not constitute an abuse of a dominant position if the conduct of the infringer is purely tactical and/or dilatory and/or not serious.
If negotiations are not commenced or are unsuccessful, the conduct of the alleged infringer cannot be regarded as dilatory or as not serious if it requests that FRAND terms be fixed either by a court or by an arbitration tribunal. In that event, it is legitimate for the SEP holder to ask the infringer either to provide a bank guarantee for the payment of royalties or to deposit a provisional sum at the court or arbitration tribunal in respect of its past and future use of the patent.
Nor can an infringer’s conduct be regarded as dilatory or as not serious during negotiations for a licence on FRAND terms if it reserves the right, after entering into an agreement for such a licence, to challenge before a court or arbitration tribunal the validity, use and essential nature of that patent.
In taking legal action to secure the rendering of accounts, the SEP holder does not abuse a dominant position. It is for the national court in question to ensure that the measure is reasonable and proportionate.
In bringing a claim for damages in respect of past use of the patent, for the sole purpose of obtaining compensation for previous infringements of its patent, the SEP holder does not abuse a dominant position.
The full text of the Opinion can be found here.

Tuesday, 18 November 2014

No unitary patent before establishment of unified court, advises Advocate General

Advocate General Bot's combined Opinion today in Case C-146/13 Spain v Parliament and Council and C-147/13 Spain v Council was directed principally at Spain's challenges to the legality of Regulation 1257/2012 on the unitary patent. However, his stance -- which is likely to be accepted by the Court of Justice of the European Union -- also makes reference to the Unified Patent Court. This can be seen from the following extract of the Curia media release issued this morning:
Spain claims that the regulation [on the unitary patent] provides for a specific judicial regime for the European patent with unitary effect which is contained in the Agreement on a Unified Patent Court. It claims that the content of that agreement affects the Union’s powers and confers on a third party the power to determine unilaterally the application of the regulation. The Advocate General takes the view that the Court does not have jurisdiction to review the content of the Agreement on a Unified Patent Court in an action for annulment of the regulation. The Advocate General observes that the Agreement on a Unified Patent Court does not fall within any of the categories of acts the lawfulness of which is subject to judicial review by the Court. It is an intergovernmental agreement negotiated and signed only by certain Member States on the basis of international law. Moreover, the regulation does not approve an international agreement or implement such an agreement, but is intended to implement enhanced cooperation in the area of creation of unitary patent protection.  
Spain claims that the application of the regulation is absolutely dependent on the entry into force of the Agreement on a Unified Patent Court, and that the effectiveness of the power exercised by the European Union through the contested regulation thus depends on the will of the Member States which are party to the Agreement on a Unified Patent Court. The Advocate General states that the EU legislature provided for the establishment of a court having jurisdiction in respect of European patents with unitary effect, to be governed by an instrument setting up a unified patent litigation system for European patents and European patents with unitary effect. The EU legislature considered that the establishment of such jurisdiction was essential in order to ensure the proper functioning of the European patent with unitary effect, consistency of case-law and hence legal certainty. In the Advocate General’s view, the objective of the regulation is to ensure such proper functioning. It would be contrary to such principles to apply the contested regulation when the Unified Patent Court has not yet been established.  
The principle of sincere cooperation requires the participating Member States to take all appropriate measures to implement enhanced cooperation, including ratification of the Agreement on a Unified Patent Court, as such ratification is necessary for its implementation. By refraining from ratifying the Agreement on a Unified Patent Court, the participating Member States would infringe the principle of sincere cooperation in that they would be jeopardising the attainment of the Union’s harmonisation and uniform protection objectivesMoreover, the link between the regulation and the Agreement on a Unified Patent Court is such that it would have been inconsistent not to make the application of the contested regulation conditional on the entry into force of that agreement. 

FTC announces settlement with patent assertion entity MPHJ

Almost a year ago, the Federal Trade Commission initiated an investigation into the conduct of MPHJ Technology Investments LLC, a patent assertion entity which allegedly employed deceptive tactics to persuade small businesses to acquire licenses for technologies related to networked scanning systems. The FTC examined in detail the modus operandi of the company, observing that MPHJ typically targeted small companies (having between 20 and 99 employees) in specific sectors (e.g. veterinary services, lawn and garden services, building maintenance services, etc.), employing a three stage process to induce such businesses to conclude licensing agreements:
  1.  MPHJ sent a letter in the name of one of its subsidiaries, identifying itself as the licensing agent for a specific set of patents (known as the Klein patents), deemed to cover computer management systems capable of transmitting electronic images, graphics, and/or documents through a communications network from a network addressable scanner, digital copier, or other multifunction peripheral to external devices, files, and applications. The letter, sent to ca. 16,465 small businesses in the US, alleged that the recipient was likely infringing the Klein Patents by using common office equipment (e.g. a digital copier/scanner/multifunction equipment), and stated that MPHJ was willing to initiate licensing negotiations. The letter also contained some distinctive features, such as the indication of a positive response by the industry to earlier licensing requests made by the patent assertion entity ("most businesses, upon being informed that they are infringing someone’s patent rights, are interested in operating lawfully and taking a license promptly" and “[m]any companies have responded to this licensing program in such a manner"), and the identification of a fair price for a license ($1,200 per employee), allegedly based on prior licensing negotiations.

  2. In case of no response, most of the targeted businesses (over 10,000 of the original 16,465) received a second letter signed by MPHJ's counsel, the law firm Farney Daniels. The letter stated that "our client [has] reasonably assume[d] you have an infringing system and need a license [and] has referred the matter to [Farney Daniels]"; the law firm added that its representation of MPHJ, or of one of the patent assertion entity's subsidiaries, could involve litigation, but reiterated the willingness to enter into a licensing agreement.

  3. The third letter, sent to almost 5,000 companies, was again signed by Farney Daniels' attorneys and contained a draft complaint related to an action for patent infringement that the law firm threatened to initiate, on behalf of MPHJ, within two weeks.
In its complaint, the FTC took issues with the allegedly deceptive, false and/or misleading statements contained in the three letters mentioned above. In particular, the FTC noted that, at the time of the sending of 7,366 first letters, MPHJ had not yet sold a single license for the Klein patents (and had concluded only one licensing agreement by the time it sent the following 1,077). The FTC also observed that different versions of the same letter contained different statements concerning the fair price calculated on the basis of the (non-existent) prior licenses. Further, the authority added that neither MPHJ nor Farney Daniels were, at the time of the sending of the third letters, ready to initiate legal actions for infringement of the Klein patents against the targeted businesses, and did not intend to promptly initiate such litigation. Thus, the FTC's complaint argued that such false and/or misleading statements constituted deceptive acts or practices affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act. MPHJ brought an action against the FTC in the Western District of Texas, alleging a violation of its First Amendment rights and of the Separation of Powers Doctrine; the action was dismissed in September. In the meanwhile, several states conducted parallel investigations into the deceptive tactics employed by MPHJ, employing different means to prevent the patent assertion entity and its counsel from persevering in such activities (see, for example, our previous posts here, here, and here).

On 6 November, the FTC announced that MPHJ and Farney Daniels have agreed to settle the charges. The FTC's proposed consent order, in addition to provisions on record-keeping, compliance reporting and notification, contains specific requirements meant to prevent the use of false and misleading statements in future letters sent by the respondents. In particular, the draft consent order would prevent MPHJ and Farney Daniels from making, in a patent assertion letter, any representation, expressly or by implication:
  • that a particular patent has been licensed to a substantial number of licensees at particular prices or within particular price ranges, or any other representation concerning the results of licensing, sale, settlement, or litigation of a particular patent, unless such representation is non-misleading and based on reliable evidence, at the time the representation is made;

  • about the licenses for a patent or the responses of recipients of a patent assertion letter, unless the representation is non-misleading and based on reliable evidence, at the time the representation is made;

  • that MPHJ, its subsidiaries or counsel have taken any action with respect to the filing of a lawsuit, unless the representation is true and non-misleading;

  • that MPHJ, its subsidiaries or counsel will take any action with respect to the filing of a lawsuit, unless at the time such representation is made, they have decided to take such action and possess and rely upon competent and reliable evidence sufficient to substantiate such statement.
Public comments on the proposed consent order are due, through this dedicated webpage, by Monday 8 December.

Friday, 14 November 2014

When a Delay turns into a Monster - T 0480/12

In the third game of the World Chess Championship in Sochi, challenger Viswanathan had put a  pawn on c7 quite early. Initially, the pawn did not look very dangerous but slownly tunred into a true monster pawn binding major parts of Carlsen's energy the longer the game lasted.

The crucial role of the seemingly harmless expression "data transmission delay" in the decision T0480/12 reminds me of this monster pawn of Viswanathan Anand. In the end, these words turned out to be as fatal as was the pawn for Magnus Carlsen:

Here is a quote from the grounds of opposition (emphasis added):

The feature "data transmission delay or latency" was introduced to replace "delay of data" during the examination procedure at which the latter had been regarded as unclear, because of leaving the reader in doubt as to the kind of processing referred to, e.g. processing delay, queuing delay or transmission delay (see communication of 4 November 2004, point 1.3). In the course of the opposition procedure the term "or latency" was deleted in the aim to overcome an objection as to added subject-matter. The respondent objected to the remaining feature "data transmission delay" for lack of clarity and argued that the term was no longer clear due to the deletion of "or latency".  
Moreover, the interpretation of the term "data transmission delay" on the basis of the description, see in particular paragraphs [0076], [0082] and [0083] was different from how this term was used by the skilled person. 
.......... 
While the appellant pointed out that the expression "data transmission delay" was clear in the light of the description of the patent by referring to paragraphs [0076], [0082] and [0083], the board agrees with the respondent that a claim has to be clear per se (see T 1129/97 dated 23 June 1998, point 2.1.2). However, when referring to "data transmission delay" in claims 1 and 7, in particular since the words "or latency" were removed from "data transmission delay", the skilled person would have an understanding of the expression different from the description. As is apparent from e.g. prior art document
A8: Rosado, Sosa C et al: Jitter compensation scheduling schemes for the support of real-time communications ,ICC 98, Conference Record, 1998 IEEE International Conference On Atlanta, GA, USA 7-11 June 1998, NEW YORK, NY, USA, IEEE, US, 7 June 1998, pages 885-890,

referred to by the respondent during oral proceedings, there are different types of delay like propagation delay, processing delay, queuing delay, transmission delay etc. (see e.g. section 2.1). Without further specification, the skilled person would interpret the expression "data transmission delay" in claim 1 to refer to this special type of delay rather than to the whole delay. The skilled  person would not understand claim 1 in a way that it is referred to more than the transmission of the data without further considering the description.
This means that:
  • words used in the claims must have a clear meaning per se;
  • the claim is unclear in cases where this meaning is modified when reading the claim in the context of the specification (which is always true to some degree...).
Looks like a blueprint for clarity attacks to virtually every amendment made after grant to this blogger!

Monday, 10 November 2014

Fleas, Lice, Flies and Late Filed Docoments - T 0584/09

The decision in the matter T 0584/09 has been issued almost one year ago but has not yet been sufficiently bemoaned in the blogosphere.

The patent in suit related to the use of agonists and antagonists of the nicotinergic acetylcholine receptors of insects for the non-systemic control of parasitic insects, such as fleas, lice and flies, on humans and on animals.

While this blogger supposes that appellants popping up with late-filed documents may be as pesky as fleas, lice and flies for members of the technical board of appeal, only the former enjoy the benefit of the right to be heard.

In the decision T 0584/09, the board considers the documents 9 to 12 as late filed although they had been filed (but not admitted) in the 1st instance no less than 5 years prior to the date of the oral proceedings.

This is how the board justifies this surprising decision (emphasis added, translation from German):

3. Admissibility of documents in the legal proceedings 
3.1. Documents (9) and (12) 
3.1.1. These documents were filed by the opponent in the opposition proceedings with letters dated February 22 and October 2008, however, they were not admitted by the Opposition Division to the legal proceedings. 
3.1.2. Pursuant to Article 12(4) of the Rules of Procedure of the Boards of Appeal the Board (RPBA) has the power “to hold inadmissible evidence… which could have been already presented in the first instance proceedings or were not admitted, there” (see Supplement to the Official Journal EPO 1/2013, pages 39-49). 
3.1.3. As part of the examination of the decision of the Opposition Division not to admit documents into the legal proceedings, a Board of Appeal should only overrule the way in which the first instance has exercised its discretion if the Board comes to the conclusion that the first instance has exercised its discretion according to the wrong criteria, without taking into account the right criteria, or in an unreasonable way (see T 640/91, Official Journal EPO 1994, 918, issue 6.3. of the decision grounds). 
3.1.4. Based on the written decision of the Opposition Division as well as on the protocol of the Oral Proceedings it is presented clearly and concisely, that the admissibility of these documents was discussed (see pages 5 to 7 of the decision of the Opposition Division and issue 2 of the protocol of the Oral Proceedings). This was not contested by any party. 
It was emphasized in the contested decision, that these documents were presented with a delay and it was sufficiently reasoned, why these documents are not relevant. 
Hereby, the Opposition Division has applied the criterion of relevance on the document presented with a delay, as it is proposed in the Examination Regulations (see Guidelines for Examination in the European Patent Office, E-III 8.6, December 2007 Edition). 
As a consequence, the Opposition Division has sufficiently reasoned its discretion and exercised according to the right criteria. Whether or not the Opposition Division may have erred in the judgment of the relevance of the documents, as the appellant argued, is not of any relevance here and has not to be examined by the Board. 
3.1.5. Therefore, the Board has decided not to admit the documents (9) and (12) into the legal proceedings.
In brief, the Technical Board of Appeal argues that it has no discretion on its own to admit documents which have not been admitted in the first instance for good reasons.

The board confuses two points: the cited decision T 640/91, Official Journal EPO 1994, 918, issue 6.3. of the decision grounds relates to the question whether a refund of the appeal fees is justified because opposition division has violated the right to be heard by not admitting documents at a late stage and examines the way in which the first instance has exercised its discretion for this purpose.

According to the established (and hopefully still valid) case-law, documents filed with the grounds of appeal should be admitted unless there are indications that the late-filing amounts to a procedural abuse.

PatLit hopes that this decision remains isolated.

The file wrapper can be found here.

Friday, 7 November 2014

Nov. 10 Program To Explore Market-Based
Alternatives To Patent Litigation

One approach to resolving or deterring patent threats, especially those posed by patent assertion entities or aggressive non-practicing entities, is the use of market-based alternatives to traditional litigation. If you are interested in learning more about this trend, consider attending an interesting program, "Toward Patent Non-Aggression: Market-Based Approaches to Deterring Legal Risks and Neutralizing Litigation," to be presented by the Washington Legal Foundation on Monday, Nov. 10, 2014, 2:00 p.m.-3:15 p.m. EDT (New York Time).

http://www.wlf.org/communicating/mediareg.asp?resolution=HI&ID=262
Click to Register for Webcast

In the spirit of their own technological innovation, small and large businesses have created “self-help” entities aimed at deterring and defending against costly patent litigation.  Each of the panelists and the organizations with which they are affiliated offer varied approaches to mutual cooperation, from cross-licensing to challenging questionable patents before the PTO.  The program will explore these private-ordering solutions function and discuss how they may be effective in reducing patent litigation, including non-practicing entities’ assertions and patent “privateering.”

Presenters will include:

Keith Bergelt
Chief Executive Officer
Open Invention Network

Kevin Jakel
Chief Executive Officer
Unified Patents, Inc.

Tim Kowalski
Senior Patent Counsel
Google Inc.

You can attend the program in person (if you happen to be in Washington) or via a webcast.  The program will take place at 2009 Massachusetts Ave., NW, Washington DC, and you can rsvp by email to Glenn Lammi at glammi@wlf.org.

The free webcast will be available live online at www.wlf.org.  You should pre-register for the webcast at this LINK.




Tuesday, 4 November 2014

Should All U.S. Patent Issues (Even Those Arising In State-Law Claims) Be Decided In Federal Court?

(The following is a guest contribution from Mark A. Cantor of Brooks Kushman P.C., a patent and technology law firm with offices in Detroit and Los Angeles. Mark is President of BK and Co-Chair of the firm's litigation practice. He can be contacted at mcantor@brookskushman.com.)

In the United States, we usually think of patent litigation as a federal court practice. However, significant patent issues can arise in IP-related state law claims. One question that arises frequently is whether those issues should be tried in state courts or federal court. Although the Supreme Court’s 2013 ruling in Gunn v. Minton, ___ U.S. ___, 133 S. Ct. 1059 (2013) restricted the types of state-law claims that are subject to federal court jurisdiction, the Federal Circuit may be poised to reassert jurisdiction to avoid potentially conflicting rulings in state and federal forums.

Federal Jurisdiction Under the Gunn
 
The federal courts exercise exclusive subject matter jurisdiction over claims for relief “arising under any Act of Congress relating to patents[.]” 28 U.S.C. § 1338(a). In the past, in addition to typical patent infringement actions, federal courts exercised “arising under” jurisdiction to a variety of state-law claims, including suits alleging breach of patent license agreements, defamation, and legal malpractice.

In Gunn, the Court held that a state-law claim “arises” under the Patent Act if patent issue implicated in a claim 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. Of particular importance is the requirement that the issue be “substantial.” As Gunn explained, it is not enough for the issue to be important to the outcome of the claim. Instead, an issue is substantial only if it is important “to the federal system as a whole.”

The state-law action in Gunn was for legal malpractice. The defendant attorney allegedly neglected to raise an argument in a patent infringement action that would have rebutted an alleged infringer’s argument that the patent was invalid due to a statutory bar. The Supreme Court held that while that argument was pivotal to the success of the malpractice claim, its “backward-looking” nature prevented federal jurisdiction:
Because of the backward-looking nature of a legal malpractice claim, the question is posed in a merely hypothetical sense: If Minton’s lawyers had raised a timely experimental-use argument, would the result in the patent infringement proceeding have been different? No matter how the state courts resolve that hypothetical “case within a case,” it will not change the real-world result of the prior federal patent litigation. Minton’s patent will remain invalid.

133 S. Ct. at 1068. For a more lengthy comment on Gunn, see “Gunn v. Minton: Supreme Court Pokes Another Hole In Exclusive Federal Jurisdiction Over Patent Rights,” SSRN No. 2232879 (Mar. 13, 2013).

Courts Apply Gunn To Expand State Court Jurisdiction

In applying Gunn, courts have focused on whether the patent law issue to be decided in the action is “backward-looking” or forward-looking. In other words, does the issue only relate to the state-law claim, or could it affect patent rights in future cases?

In Forrester Environmental Services, Inc. v. Wheelabrator Tech., Inc., 715 F.3d 1329 (Fed. Cir. 2013), the Federal Circuit applied Gunn to decline federal jurisdiction over a state court defamation action based on the defendant’s statements that the plaintiff was infringing three patents. The court noted that pre-Gunn cases in which it had recognized jurisdiction over disparagement claims “may well have survived the Supreme Court’s decision in Gunn.” 715 F.3d at 1334. Forrester’s claim did not survive, however, because any state court rulings on the scope or infringement of the patents would have no forward-looking affect: The patents all had expired and the defamatory statements referenced conduct in Taiwan, which would not be infringement in any event.

Like the Federal Circuit in Forrester, the majority of courts applying Gunn have failed to recognize federal question jurisdiction. However, unlike Forrester, many of those involved patents which are not invalid or expired. The courts tend to brush aside patentee arguments that any determination of patent law issues could have future preclusive effects.

In MDS (Canada) Inc. v. Rad Source Techs., Inc., 720 F.3d 833 (11th Cir. 2013), the court ruled that the Federal Circuit lacked appellate jurisdiction over a breach of license dispute that turned on whether the licensee’s product infringed three patents. The court held that the issue of patent infringement was not substantial. Notably, the court stated that infringement of the patent was not a substantial issue because, “Both the highly specialized nature of patent claims and the niche market for [the accused] blood irradiation devices suggest that the resolution of this issue is unlikely to impact any future construction of claims.” 720 F.3d at 842. The court did not mention that the licensed patents do not expire until 2022.

A review of other decisions applying Gunn reveal that courts have interpreted it to broadly discourage federal jurisdiction even when the underlying claim involves the validity or infringement of “live” patents. See, e.g., Bonnafant v. Chico’s FAS, Inc., Case No. 2:13-CV-893-FTM-29CM, 2014 WL 1664554 (M.D. Fla. Apr. 25, 2014) (whistleblower case lacked federal question jurisdiction when issue whether employee was instructed in infringe patent “will hardly call into question the entire federal trademark/patent system. Instead, it will require the application of a set body of law to the facts at hand.”); Airwatch LLC v. Good Technology Corp., No. 1:13-cv-2870-WSD, 2014 WL 1651964 (N.D. Ga. Apr. 24, 2014) (no federal jurisdiction over defamation action because infringement issue was “context-specific”); Transcardiac Therapeutics, Inc. v. Yoganathan, No. 1:13-CV-3089-AT, 2014 WL 1624086 (N.D. Ga. Feb. 28, 2014) (breach of contract, interference and fraud claims involving inventorship dispute lack federal question where inventorship was “not substantial in any relevant sense”).

Jang v. Boston Scientific: The Fed. Cir. Strikes Back?

More recently, the Federal Circuit has signaled that federal jurisdiction may continue over state-law claims in similar circumstances. In Jang v. Boston Scientific Corp., No. 2014-134, 2014 WL 4746002 (Fed. Cir. Sept. 16, 2014), the court considered whether it had appellate jurisdiction over a patent license dispute. The appeals court distinguished Forrester and stressed the risks of allowing other courts to rule on patent validity or infringement:
Permitting regional circuits to adjudicate questions of patent validity, for example, could result in inconsistent judgments between a regional circuit and the Federal Circuit, resulting in serious uncertainty for parties facing similar infringement charges before district courts within that regional circuit. Maintaining Federal Circuit jurisdiction over such contractual disputes to avoid such conflicting rulings is important to “the federal system as a whole” and not merely “to the particular parties in the immediate suit.” Gunn, 133 S.Ct. at 1066.

Jang, 2014 WL 4746002 at *3. As a result, the appeals court ruled that the patent issues raised by Jang’s breach of license claim were substantial and triggered “arising under” jurisdiction. This was true even though Jang’s patent had been invalidated as a result of reexamination proceeding. The Federal Circuit reasoned that jurisdiction must be assessed at the time an action is commenced, and since the patent only was invalidated later, federal jurisdiction attached to Jang’s claim.

The Jang decision suggests that the Federal Circuit, the regional circuit courts of appeals, and potentially state courts will continue to struggle with jurisdiction over patent issues arising in the context of state-law claims. Despite broad language in Gunn, it is likely that the Federal Circuit will tend to find jurisdiction in cases involving patents which remain in effect and where the application of patent law may affect future market activity or be the subject of future litigation.

Monday, 3 November 2014

Litigation-proof patents: a new title

Litigation-Proof Patents: Avoiding the Most Common Patent Mistakes is the title of a new book by this blogger's friend, US patent attorney and author Larry M. Goldstein. The book is so new that it was only published four days ago and no review copy has yet been procured. Having said that, the book's title alone qualifies it for a mention on the PatLit weblog.

According to the information available from the Amazon page from which it is being sold, it
" ... explains the principles of excellent patents, presents the ten most common errors in patents, and details a step-by-step method for avoiding these common errors. Specific patents are analyzed and shown to commit or avoid the most common patent mistakes. 
The book includes four chapters. 
• First, a step-by-step process for writing outstanding patents that capture all the innovative points of an invention and that avoid the most common patent mistakes. 
• Second, principles of litigation-proof patents, including characteristics of good patent claims, Key Claim Terms, patent value, seminal patents, and tips for writing patent applications. 
• Third, the ten most common mistakes that appear frequently in patents, and that destroy both patent quality and patent value. 
• Fourth, five patents that illustrate the concept of “litigation-proof patents”. 
These patents include the Hedy Lamarr frequency hopping patent from World War II, the patents for the board game Monopoly®, and the “slide-to-unlock” mobile phone patent that Apple asserted against Samsung ..." 
Perhaps unsurprisingly this book is intended for (i) anyone writing a patent who wants to achieve the highest-possible quality, (ii) patent evaluators who want to understand whether patents being reviewed suffer from value-destroying mistakes, and (iii) patent managers and heads of IP departments who are managing significant patent portfolios and want to understand the relative quality of their portfolios -- in other words, for everyone except patent litigators.

Litigation-Proof Patents turns out to be the second of three books the make up the author's Patent Quality Series (the first, True Patent Value, is reviewed by Neil Wilkof on IP Finance here and the third, Patent Portfolios: Quality, Creation, and Cost, will be published soon.

This blogger must reveal his personal prejudice at this moment: in his view, the thing that makes a patent litigation-proof is the sad reality that it isn't in anyone else's way so that (i) no-one ever infringes it and (ii) its validity is never challenged.  But that's another matter ...