In this issue:
Note from the Editors
It was a busy fall for IP law, thanks in part to the Federal Circuit’s ruling in In re Bilski (click on the case name to read our analysis). With patent law getting so much attention lately, we wanted to make sure this edition of the newsletter covered some important developments in copyright and trademark law. We first assess the effects of the Supreme Court’s decision in eBay v. MercExchange on copyright cases. Next, we take a look at trademark enforcement, which got a boost from Congress and the president with the October signing of the Prioritizing Resources and Organization for Intellectual Property Act. Not to neglect the ever-changing landscape of patent jurisprudence, we include articles on the Federal Circuit’s findings in Broadcom v. Qualcomm and Proveris v. InnovaSystems. In the Broadcom article, we discuss the relevance of opinions of counsel to showing intent for inducement. For life sciences companies, the Federal Circuit’s ruling in Proveris applies new guidance on infringement in the area of research tool patents. Finally, our recurring section on reexaminations discusses the protection from patent infringement offered by intervening rights.
We hope you find this edition of the IP Newsletter informative. As always, we will continue to monitor the latest developments in IP law and make sure to keep our clients and readers updated with analysis of current events.
Bidding for a Copyright Injunction After eBay
by Jacqueline Charlesworth
The Supreme Court’s 2006 decision in eBay Inc. v. MercExchange addressed the standard for permanent injunctive relief to prevent future infringement of a business-method patent for an electronic marketplace. In eBay, the Court rejected the presumption in favor of granting a permanent injunction upon a finding of patent infringement and held that a court’s decision whether to grant or deny such relief is “an act of equitable discretion.” The Court then set forth a traditional four-factor test for courts to follow when considering permanent injunctive relief in the patent context, requiring a plaintiff to demonstrate: “(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.” Notably, in reaching its decision, the Court drew a parallel between the rights of a patent owner and those of a copyright owner, observing that the Court has “consistently rejected invitations to replace traditional equitable considerations with a rule that an injunction automatically follows a determination that a copyright has been infringed.”
Click here to read the full text of this article.
New Law Expected to Add Teeth to Current Counterfeiting Laws
by Jennifer Lee Taylor and Ted Hasse
Recognizing that the increase in willful violations of U.S. counterfeiting laws pose a serious threat to the economy, both chambers of Congress finally passed the Prioritizing Resources and Organization for Intellectual Property Act (“the PRO IP Act”). The bill has had the strong support of IP owners from the beginning, but was not without criticism from those who have viewed it as pandering to the recording industry as it continues its efforts to stop peer to peer file sharing. Nevertheless, after several modifications, it passed with bipartisan support in both the House and the Senate, including a unanimous vote in the Senate. The bill will enhance remedies for willful trademark counterfeiting, enhance civil and criminal penalties for counterfeiters, provide more funding and personnel for federal and state enforcement, and establish a new cabinet-level IP enforcement coordinator who will report directly to the president and Congress. The bill was signed by President Bush on October 13, 2008.
Click here to read the full text of this article.
Intervening Rights: Protection from Liability After Reexamination
by Robert Saltzberg
In response to a request by either a patentee or another interested party, the USPTO will reexamine an issued patent in light of prior art that creates a “substantial new question of patentability” compared to issues considered during the original examination. Accused infringers in patent litigation are increasingly requesting reexaminations of asserted patents, recognizing reexamination as a relatively low-cost, potentially high-impact adjunct to a lawsuit. A similar procedure, “reissue,” allows a patentee to apply for a reissued patent based upon an error made during the original prosecution, including the patentee claiming more or less that he or she had a right to claim.
Click here to read the full text of this article.
Opinions of Counsel Ride Again: Federal Circuit Finds Opinions Relevant to Intent for Induced Infringement in Broadcom v. Qualcomm
by Elizabeth Richardson
As the Federal Circuit reaffirmed in Seagate, opinions of counsel are not required to fend off allegations of willful infringement. But in Broadcom Corp. v. Qualcomm Inc., 543 F.3d 683 (Fed. Cir. 2008), the Federal Circuit recently held that such opinions are relevant to intent to induce infringement under 35 U.S.C. § 271(b).
Because inducement and willfulness both require intent, there is some overlap in relevant evidence as well as jurisprudence between these two issues. But in separate en banc opinions in the last couple of years, the Federal Circuit has adopted different quanta of intent necessary to establish inducement and willfulness. In DSU, the court required proof of “specific intent” to induce infringement, including knowledge of the patent; mere knowledge of another’s acts subsequently found to constitute direct infringement were deemed insufficient. Although the court noted that the alleged inducer in DSU had obtained non-infringement opinions as part of the evidence considered by the jury, which returned a verdict of no inducement, the Federal Circuit did not directly discuss the role of opinion of counsel evidence in DSU.
Click here to read the full text of this article.
Research Tool Patents: A Light At The End Of The Tunnel?
by Katherine Nolan-Stevaux, Ph.D.
In Merck KgA v. Integra Life Sciences I, Ltd., the Supreme Court held that the safe harbor under 35 U.S.C. § 271(e)(1) extended to the use of patented compounds in pre-clinical studies, provided there is a reasonable belief that the experiments would provide information relevant for submission to the F.D.A. However, the Court declined to reach the question of whether infringement of so-called “research tool” patents would also fall within this safe harbor. The Federal Circuit’s recent decision in Proveris Scientific Corp. v. InnovaSystems, Inc. suggests that life sciences companies holding research tool patents need not fear that competitors may infringe them with impunity.
Click here to read the full text of this article.
Intellectual Property Practice News
Awards and Accolades
Morrison & Foerster’s Intellectual Property practice continues to garner awards and top rankings. In the most recent Managing Intellectual Property rankings of IP groups, Morrison & Foerster was ranked as having the fourth largest IP practice in the U.S., with 249 lawyers devoting at least 75% of their time to IP work.
GC California magazine honored our IP practice in a number of categories in its inaugural annual survey of in-house counsel. We ranked #1 in the categories of IP Transactions (Except Patent) and Licensing Transactions, and #2 in IP Litigation (Except Patent). The firm ranked highly in a number of other categories, including #2 rankings in Business Savvy and Bet-the-Company Litigation.
Fourteen lawyers from the IP practice’s U.S. offices were named by their peers to the 2009 Best Lawyers in America Directory. Best Lawyers in America listings represent 79 specialties in all 50 states and Washington, D.C., and are compiled through an exhaustive peer-review survey, in which thousands of the top lawyers in the United States anonymously evaluate their professional peers. The 14 Morrison & Foerster IP lawyers are:
Charles Barquist, Los Angeles
Peng Chen, San Diego
Thomas Ciotti, Palo Alto
David Doyle, San Diego
Paul Goldstein, San Francisco
Michael Jacobs, San Francisco
Rachel Krevans, San Francisco
Jack Londen, San Francisco/Tokyo
Harold McElhinny, San Francisco
Gladys Monroy, Palo Alto
Kate Murashige, San Diego
James Pooley, Palo Alto
Rory Radding, New York
Mark Wicker, San Diego
From the Docket
Our IP trial lawyers racked up resounding plaintiff and defense wins for several technology clients in recent months. Some of our biggest victories came in key venues, such as the Eastern District of Texas and the International Trade Commission.
Respondents Beat Tessera’s Patent Infringement Claims in the ITC
Morrison & Foerster represents respondent Flash memory companies Spansion, Inc., and its affiliate in a closely watched ITC patent suit filed by Tessera Technology, Inc. On December 1, after a full trial on the merits, the Administrative Law Judge presiding over the case issued an initial determination that Spansion and the other respondents did not violate Section 337 of the Tariff Act because Tessera’s patents were not infringed. This tremendous victory for the respondents is the first decision that we know of that has been adverse to Tessera and the patents it has widely licensed and asserted against the semiconductor industry.
The Washington, D.C. team was led by partners Alexander Hadjis and Kristen Yohannan, with assistance from Of Counsel Chip Terrill and Michael Maas, and associates Matthew Vlissides, Robert Giles, Yan Wang, Paul Kletzly, Nabila Isa-Odidi, and Alex Haliasos.
Walt Disney Wins Summary Judgment and Sanction Awards
To win a patent case is great. To win and recover attorneys’ fees is even better. That’s what Morrison & Foerster did for Walt Disney Co. against Triune Star, Inc., which filed a patent infringement suit in 2007 against Disney and several other defendants in the Central District of Illinois. The case involved infrared camera technology for cell phones. In late November, Judge Michael Mihm of the Central District of Illinois granted summary judgment in favor of the defendants, finding Triune’s assertions did not “pass the red face test” and that there was no literal infringement of Triune’s patent. Referring to the plaintiff’s case as “frivolous,” Judge Mihm also granted the defendants’ motion for Rule 11 sanctions, concluding that the plaintiff filed a case unwarranted in fact and law.
San Francisco partner Michael Jacobs and Of Counsel Grant Kim led the winning team for Disney.
East Texas Jury Awards Pioneer $60 Million
Morrison & Foerster secured a major victory in October for Pioneer Corporation in a patent infringement suit against Samsung Electronics Co., Ltd., and its affiliates. After an eight-day trial, and only four hours of deliberation, a jury in the Eastern District of Texas decided three Samsung entities had willfully infringed the patents in suit and awarded $59.3 million in compensatory damages to Pioneer. We are now seeking enhanced damages due to the jury’s conclusion that the infringement was willful. Filed in the fall of 2006, the suit asserted that plasma televisions manufactured by Samsung infringed two plasma display technology patents held by Pioneer.
In a press release announcing the outcome of the trial, Pioneer stated: “This significant decision in favor of Pioneer represents recognition of the strength of Pioneer’s intellectual property rights in the field of plasma displays.”
The winning team was led by Harold McElhinny (San Francisco office), Karen Hagberg (New York office), and Andrew Monach (San Francisco office) with assistance from partners Peter Stern (Tokyo office) and Taro Isshiki (Tokyo office), Of Counsel Sherman Kahn (New York office), and associate Kyle Mooney (New York office).
Victory for Funai in the ITC
In November, Morrison & Foerster secured a victory for Funai Electric Co., Ltd., and its affiliate, Funai Corporation, Inc. (collectively “Funai”), in a patent infringement case against 14 manufacturers and importers of digital televisions and other related products. An Administrative Law Judge of the ITC issued an Initial Determination concluding that accused digital televisions of Vizio, TPV, Amtran, Proview, Syntax-Brillian, and other respondents infringe asserted claims of one of Funai Electric’s U.S. patents. The Administrative Law Judge has recommended the full ITC grant a limited exclusion order barring importation of the infringing products into the United States, as well as a cease and desist order to prevent sale or distribution of such infringing products in the United States.
The Morrison & Foerster winning team was led by partner Karl Kramer (Palo Alto office), with assistance from partners Harold McElhinny (San Francisco office), Hector Gallegos (Los Angeles office), Brian Busey (Washington, D.C. office), Louise Stoupe (Tokyo office), Moto Araki (Tokyo office), Nicole Smith, Mark Danis (Tokyo office), and Anthony Press (Los Angeles office).
Favorable Settlement Reached for Veeco in Nanotechnology Patent Dispute
In August, Morrison & Foerster client Veeco Instruments, Inc., announced it had settled the patent infringement case it had brought against Asylum Research Corporation in 2003. Veeco is the world leader in atomic force and scanning probe microscopy, with an installed base of more than 8,000 systems at university and research/nanotechnology centers worldwide.
In this lawsuit, Veeco alleged that the manufacture, use, and sale of Asylum’s MFP-3D atomic force microscope constituted infringement of Veeco patents. As part of the terms of the settlement, Veeco and Asylum agreed to drop all pending claims against each other and to enter a five-year, worldwide cross-license of each company’s patents and a mutual covenant not to sue on patents either party has a right to assert. Asylum will make a net payment plus an ongoing royalty to Veeco for the five-year term of the cross license.
John R. Peeler, chief executive officer of Veeco, commented, “We are pleased to have reached this favorable settlement with Asylum that values our technology and validates our patents. Veeco has invested tens of millions of dollars in intellectual property and research and development for AFM technology, and this investment has helped us to bring the best AFM products to the marketplace. This settlement is a significant milestone for our employees, customers and shareholders, and we will continue to protect our valuable intellectual property, as necessary, in the future.”
The winning team was led by partner Charles Barquist (Los Angeles office), along with partners Eric Acker (San Diego office), Mehran Arjomand (Los Angeles office), and Laurie Hane (San Francisco office).