PWC's 2015 Patent Litigation Study - A change in patentee fortunes

I suggest reading PWC's 2015 Patent Litigation Study - A change in patentee fortunes.

Here are PWC's observations for what happened in 2014 with a few comments:

1. Patent lawsuits filed dropped 13%. Congress should consider this with respect to patent reform.
2. Median damage awards second-lowest point in two decades. Is the median skewed by lack of mega damage awards in 2014?
3. Juries decided 67% of the patent cases and median jury award were 31 times greater than median bench awards, which indicates patent owners should request jury trials 100% of the time. 
4. Differences exist in awards based on industry; from highest to lowest: biotech /pharma, telecommunications, and medical devices, and consumer products. 
5. Median time to trial grew to about 2.4 years.
6. Top five districts favoring patents remain: ED Texas, Virginia Eastern, Delaware, Wisconsin Western, Florida Middle. Northern District of California has lots of cases filed, but is not as favorable to patent owners.
7. Damages for non-practicing entities (NPEs) 4.5 times greater than for practicing entities. This is surprising given the media fed to the public (see juries) about "patent trolls."
8. Federal Circuit modifies some ruling of the trial court in about 50% of the cases.

Copyright © 2015 Robert Moll. All rights reserved.

Fortune - Let Oracle Own APIs, Justice Dept Tells Top Court in Surprise Filing

I suggest reading the Fortune article: Let Oracle Own APIs, Justice Dept Tells Top Court in Surprise Filing and DOJ's filing.

The DOJ filing which is worth reading encourages the US Supreme Court to deny Google's petition to hear its arguments to deny copyright protection to Oracle's Java related application programming interfaces (APIs).

It does a good job of explaining the scope of copyright protection for software:

Petitioner (Google) contends, however, that even if the declaring code is an “original work[] of authorship” under Section 102(a), it is not entitled to copyright protection because it constitutes a “method of operation” or “system” within the meaning of Section 102(b). That argument is incorrect. . . . Section 102(b) is not a limitation on what kinds of expressive works may be protected by a copyright. Rather, it is a limitation on how broadly the copyright extends.

DOJ stated, among other things, in the filing: "The Android platform uses the Java programming language, but [Google] purposely designed Android not to be compatible with the Java platform or interoperable with Java programs."

Google's response: "We still look forward to defending the concepts of interoperability that have traditionally contributed to innovation in the software industry."

Copyright © 2015 Robert Moll. All rights reserved.

Supreme Court - Commil USA, LLC v. Cisco Systems - Belief of Patent Invalidity No Defense to Induced Infringement Claim

In Commil USA, LLC v. Cisco Systems, the US Supreme Court held that a defendant's belief that a patent is invalid is not a defense to a claim it induced infringement.

Commil USA, LLC, the owner of a patent relating to a method of implementing wireless networks, had sued Cisco Systems, Inc., for making and selling wireless networking equipment that directly infringed and for inducing others to infringe the patent by selling them infringing equipment.

Cisco was found liable for direct and induced infringement, but had raised the defense to induced infringement that it had a good-faith belief Commil’s patent was invalid. The trial court ruled evidence to show the belief inadmissible. On appeal, the Federal Circuit stated the trial court erred in excluding Cisco’s evidence of its good-faith belief.

The Supreme Court has had a pattern of reversing the Federal Circuit in recent years, and this case was no different. It held a defendant’s belief that a patent is invalid is not a defense to a claim of induced infringement. Induced infringement under 35 U. S. C. §271(b) only applies when a defendant knew of the patent and that the induced acts constitute infringement. Similarly, contributory infringement under 35 USC §271(c) requires knowledge of the patent and knowledge of patent infringement.

This contrasts with direct infringement under 35 USC §271(a), which is a matter of strict liability where the defendant’s mental state is irrelevant.

The Supreme Court reminded that Global-Tech requires knowledge that the induced acts constitute patent infringement and that the defendant's actions demonstrated it knew it would be causing customers to infringe patent.

The Supreme Court said induced infringement and validity are separate defenses, and said it was unwilling to undermine the presumption that a patent is valid under 35 USC §282(a) proof otherwise must rebut the presumption by clear and convincing evidence. See Microsoft Corp. v. i4i Ltd. Partnership.

The Supreme Court noted accused inducers who believe a patent is invalid can seek ex parte reexamination of the patent by the USPTO and that district courts can dissuade frivolous suits by sanctioning attorneys, e.g., under Rule 11 or awarding attorney fees under 35 USC 285.

Copyright © 2015 Robert Moll. All rights reserved.

USPTO - Patents Dashboard: Tracks Pendency, Quality and Timeliness of US Patents

US Commissioner of Patents Peggy Focarino informs the USPTO recently updated the Patents Dashboard that estimates examination dates and pendency of applications. See Redesigned and Updated Patents Dashboard.

Copyright © 2015 Robert Moll. All rights reserved.

Federal Circuit - Akamai Technologies, Inc. v. Limelight Networks, Inc. - Infringement by Inducement Requires Direct Infringement

In Akamai Technologies, Inc. v. Limelight Networks, Inc. the Federal Circuit held that the patent owner Akamai failed to prove infringement by inducement by Limelight, because Akamai failed to show direct infringement.

The Federal Circuit held that direct infringement only occurs when a single party or a joint enterprise performs all of the steps of the method. Further, encouraging or instructing others to perform an act is not the same as performing the act and will not result in direct infringement. Instead, multiple entities must be in a principal-agent relationship, a contractual arrangement, or in a joint enterprise.

This case relates to U.S. Patent No. 6,108,703 (the '703 patent). It describes an invention that, among other thing, stores web pages at the content provider (web site) and stores their embedded objects at another domain closer to the client. This is one of inventor Daniel Lewins' contributions to the Web: store popular web pages at the web site so hits can be tracked, but store their embedded objects at domains closer to the browsers to reduce page latency.

Claim 19 of the '703 patent recites 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;
• 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;
• responsive to a request for the given page received at the content provider domain, serving the given page from the content provider domain; and
• 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 performed all the steps of claim 19 except for the step of "tagging the embedded objects of the page so that requests for the page objects resolve to the domain instead of the content provider domain," which it encouraged customers perform.

Such is insufficient, and the Federal Circuit explained: "In the present case, the asserted claims were drafted so as to require the activities of both Limelight and its customers for a finding of infringement. Thus, Akamai put itself in a position of having to show that the allegedly infringing activities of Limelight’s customers were attributable to Limelight. Akamai did not meet this burden, because it did not show that Limelight’s customers were acting as agents of or otherwise contractually obligated to Limelight or that they were acting in a joint enterprise when performing the tagging and serving steps. Accordingly, we affirm the district court’s grant of Limelight’s motion for JMOL of non-infringement under § 271(a)."

In general, a method claim should be written so that a single entity performs each step to avoid the requirement that the multiple entities that perform the claim be in a principal-agent relationship, a contractual arrangement, or in a joint enterprise.

Copyright © 2015 Robert Moll. All rights reserved.

USPTO - Transition from the United States Patent Classification (USPC) to the Cooperative Patent Classification (CPC) System

In a blog post Successful Transition to the Cooperative Patent Classification System, the USPTO Commissioner for Patents Peggy Focarino informs of the USPTO's adoption of an international classification scheme and addition of prior art documents from the EPO, China, and Korea:

"On January 1, 2015, the USPTO successfully transitioned to the Cooperative Patent Classification (CPC) system from the United States Patent Classification (USPC) system. The CPC is a collaborative venture between the United States Patent and Trademark Office (USPTO) and the European Patent Office (EPO), designed to develop a common, internationally compatible classification system for technical documents used in the patent granting process. It offers a more robust and agile classification system for both offices’ user communities and enables more technical documents to be classified, because the USPTO and EPO are both entering documents into the system. Since its launch, the USPTO has successfully issued about 47,000 U.S. patent documents under the CPC.

As we transitioned to the CPC, we made sure to keep patent applicants and owners updated on the transition process. Leading up to the changeover, throughout 2013 and 2014, numerous bilateral CPC events were held with external stakeholders, providing notice that the USPC would become a static document collection for utility patents after December 2014. Stakeholders may continue to see a limited number of U.S. patent grants still issuing with USPC symbols due to allowed applications already in the publication cycle, but the USPTO will no longer actively assign USPC symbols to issued utility patents. However, plant and design patents are not covered in the CPC, so they will continue to be published with USPC symbols.

To facilitate searching for documents, the USPTO’s existing tools have been modified to provide all users the ability to search documents classified in the CPC, the USPC (now a static document collection), and the International Patent Classification (IPC) systems. USPTO examiners are now required to classify and search using the CPC, and we want our user community to understand that the CPC will be continuously updated through bilateral revision and reclassification projects between the USPTO and the EPO. We are also working on creating a bilateral examiner-focused collaborative environment for discussions, work-sharing initiatives and training opportunities.

As a leader in the global patent community, the USPTO is dedicated to providing a quality classification system for employees and stakeholders, and one that is compatible with the international patent community. Most importantly, we will ensure that the quality of the classification system remains strong and agile.

The CPC provides a more comprehensive search result set that includes national documents from China and Korea, as well as several other countries that are classifying their national documents into the CPC; documents that were not previously available for viewing or retrieval under the USPC. We intend to keep the quality of the CPC documents at a high level by helping more countries classify their national documents into the CPC, and we will continue to work with the EPO to perform an ongoing number of CPC revision projects.

We welcome your thoughts on the transition from the USPC to the CPC. More information, including frequently asked questions, is available on the CPC page ...."

Copyright © 2015 Robert Moll. All rights reserved.

Hague Agreement Concerning the International Registration of Industrial Designs - Effective on May 13, 2015

As a reminder, US applicants will be able to file an international design application with either the World Intellectual Property Organization (WIPO) or the USPTO through the Hague Agreement concerning the International Registration of Industrial Designs (the Hague Agreement) on or after May 13, 2015.

The design application filed under the Hague agreement can contain one or more inventions and designate one or more of the 64 countries that are party to the Hague agreement. A US design patent resulting from an application filed under the agreement will have a 15-year patent term from the issue date.

USPTO website details: Hague Agreement Concerning International Registration of Industrial Designs.

See my related articles: USPTO - Hague Agreement - Single Design Patent Application Registers up to 100 Designs in Over 62 Territories and USPTO - US Residents Filing A Design Application under Hague Agreement?

Copyright © 2015 Robert Moll. All rights reserved.

Supreme Court - Amendments to the Federal Rules of Civil Procedure - Reducing Litigation Costs

Chief Justice Roberts of the United States Supreme Court submitted amendments to the Federal Rules of Civil Procedure to Congress on April 29. The amendments most likely to impact US patent litigation are as follows:

1. Rule 26 is amended so that it no longer permits discovery of any information that may reasonably lead to the discovery of admissible evidence. Further, discovery must be proportional to the needs of the case. This sounds like a helpful change, but it's hard to predict if this will reduce the discovery costs in patent litigation.

2. Rule 84 is deleted, including Form 18, the standard patent infringement complaint form. This may promote greater specificity in the patent infringement complaint, which is helpful.

Unless Congress objects the amendments become effective on December 1, 2015. I expect lobbyist to face an uphill battle if they challenge these two amendments given they are intended to make litigation less costly.

Copyright © 2015 Robert Moll. All rights reserved.