Back when I was losing on False Patent Marking.

Proof of objective facts and subjective intent are essential to success on a false patent marking claim (as well as on the inequitable conduct defense).  Showing that ‘patented’ was in some form marked on a product should not be hard.  In all ‘false’ conduct actions, the most difficult aspect is proving intent.

In a case some years past, the Judge issued fairly straightforward rulings that “intent” raised fact questions precluding summary judgment on a false patent marking claim. The court noted that the product was promoted as “patented” before an application had been filed, and that notice of the misidentification was received, also before the patent application was filed. The one promoting it may have believed it was patented. 

Seemed plain – accepting favorably an inference of ‘good faith’  despite a mistaken belief that the product was “patented.”  This did not spawn hordes of mismarking cases, and intent should remain difficult to prove.

Still Curious Why Written Description Compels a Factual Inquiry.

Many en banc decisions lose impact soon after being issued.  Ariad v. Lilly raised such a threshold issue, about the written description necessary to obtain a valid patent, that it might have had a lasting impact.  Instead, clever patent prosecutors will adapt their practice, add more species and more research results, and go on obtaining duly examined, issued and presumtively valid patents.

One rub of the decision was  its answer to an issue, embedded in the 2nd en banc question, of whether the written description requirement will be assessed by the judge or a trier of fact.  This was nearly the first question asked at oral argument, and one not addressed in the parties’ brief.

The amicus brief filed by the UK IP Law Society urged that written description issues be melded with the Markman hearing, and decided as a matter of law.  The en banc ruling disagreed.  It held, on page 24 of the slip opinion, that the “test requires an objective inquiry into the four corners of the specification from the perspective of a person of ordinary skill in the art.”  Maybe it’s just me, but that sounds a lot like how the Judge reads the specification to interpret the claims.

Having a separate inquiry, for the “separate requirement” of a written description, leads to duplicative inquiries.  Again, the judge read the specification and file history to interpret the claims, then months later, instructs a jury to engage in that “objective inquiry into the four corners…” to decide the facts about the written description.  And, that’s not all.  There too is overlap between the written description inquiries and the Wands factors for enablement.  The experts in Ariad discussed the degree of experimentation possibly needed to replicate the claimed, but not adequately described, but apparently enabled, inventions.  So, are the Wands factors extended to the inquiry about written description?

Why then, did the en banc court decide it was a fact question.  It derives, possibly, from the grammatical parsing of 112P1.  Ariad, Lilly and the amicis, put forth readings of the provision, and suggested how to parse the subordinate clauses and the commas.  It was decided that the written description clause and the enablement clause were inseparably bound by the passage on “any person skilled.”  This answered Ariad’s argument that having a separate requirement for written description was one “without a legal standard” (slip op. pg. 8).  The decision give that contention enough weight to join the two requirements around that one prepositional phrase.  This may not have “violat[ed] the rules of grammar,” but because it ended up making written description a factual inquiry, rather than one decided as a matter of law, the embedded logic must have violated something fundamental to fair and efficient resolution of patent cases.

Word density

Why is that parties are limited to only so many words or pages, or density of type when pleading a cause, but courts can use unlimited pages to set out their decisions.  Presumably, the pleader is the better editor, relying on clearer, declarative sentences, while the deciders just let it all flow across endless pages. 
Maybe some judicial decisions should be released on  twitter.

Licensed to Pay, But Cancelled One Day.

Licensing disputes so often involve termination provisions.  Someone wants out, but has to manufacture a way out – and, the other party sues for wrongful termination.  Many of the decisions are fairly pedestrian contract interpretation ruling, but then there’s Brunskill Associates, Inc. v. Rapid Payroll, Inc., 2010 WL 779688 (Cal.App. 2nd Dist. March 09, 2010).

A software developer named Olsen licensed his payroll processing package to Mr. & Mrs. Brunskill, who grew from one-client to a @2M/yr business.  As business grew, they relied on the Olsen software, and paid the license fee.  The license (possibly not authored by counsel) did not allow either party to cancel.  It too assured support to the licensees, and if that was not provided, the source code would be delivered to them.

Along comes Paychex, another one-client outfit that grew into a really huge firm.  At the behest of its founder, Thomas Golisano, a subidiary Rapid Payroll was set up, which acquired the software and licensing clients of Olsen.  Internal memos indicated a plan to expand in a market not served by Paychex.  After providing substantial assurances to the licensees, including the Brunskills, all of the software licenses were cancelled by Rapid.

The Brunskills’ business was ‘hard-wired’ to use of the Olsen software, and the loss of its use caused significant lost business and revenue.  A jury determined that the cancellation was wrongful, and that pretextual reasons were given for it.  Possibly as a tactic to limit liability, Rapid declared bankruptcy, ostensibly because cancelling the licenses ended its receipt of licensing revenues.  The automatic stay was lifted.

A substantial judgment was assessed against defendants, and too, punitive damages of $10Mil were awarded to the Brunskills against Paychex founder Golisano (reportedly, a billionaire).  These judgments were affirmed.  This was not your average disagreement between geekhead software types and payroll clerks, for as the court stated: “Golisano followed a strategy of falsely and publicly assuaging licensees’ fears while secretly planning to take over their businesses by vaporizing the software that was their economic lifeline.”  That’s not contract interpretation.

NFP means for reaching result.

In a NFP order, the CAFC affirmed trial court rulings of not invalid and enforceable, in a suit about patents for those clunky tag devices and sensors used to deter shoplifters.  Defendants appeared for trial in 2008 and stipulated to infringement, choosing to defend on invalidity and unenforceability grounds.  Earlier, the defendants filed for re-exam, and with one possibly important exception, the claims survived. 

The trial presentation on invalidity apparently relied on references submitted in the re-exams, and in consonant fashion, the court upheld the patents as valid. 

The inequitable conduct ruling, and the remarks in the CAFC order, are curious or provoke this curiosity.  In the re-exam, a claim was rejected based on the `033 patent, which defendants contended was withheld during prosecution.  Quare: would not rejection based on that reference be prima facie proof that it was “material to patentability.”  Even if that `033 reference was not enough to reject the claim, it at least would seem to be “material” prior art. 
At trial, one of the inventors explained why he felt the `033 disclosed less than the examiner had said in the re-exam.  On that basis, the trial Judge ruled that “the `033 patent was not material.”  Per curiam, the CAFC affirmed, but stated “we do not address the question whether the information that was not disclosed was material.”  It affirms based on the finding that the inventors “did not act with intent to deceive.”  That’s a bit oblique to the district court’s specific findings that the non-disclosed art was cumulative and/or non-material, which was disconnected from the conclusory ruling that defendant “have not shown” the references were “intentionally withheld ..with an intent to deceive.”

Perhaps, here’s the difference between for-publication and NFP rulings by the CAFC: publication is needed to articulate how to reach the result on appeal; a ruling NFP comes to the right result, so there no need to say more about it.  Sensormatic v. Von Kahle, (CAFC 2009-1193, 2/17/2010).

Escaping the Rune Realm Anti-Circumvention Patrol.

An argument lost, an opportunity renewed.  Way back, before online multiplayer games were so viral, copyright interests made comments against passage of the DMCA.  Particularly questioned were prohibitions on DRM circumvention measures, but the DMCA, with those prohibitions, was enacted by Congress.
Just filed is a case making a most interesting accusation under the DMCA.  Owners of the online game RuneScape® sued claiming damages from ‘bots’ and ‘scripts’ that allegedly “circumvent security measures” that the owners intended to “protect its copyrighted works.”  The suit is Jagex v. Impulse Software filed in federal court in Boston.
Never played this game, so only the complaint and the news guide my thoughts.  One concern with adding a prohibition against any “technological measure that effectively controls access to a work protected” by copyright, was it might be extended to protect what is not protected by copyright. 
A fair difference can be seen between hacking in to use copyrighted, password-protected software [being bad], and modifying uncopyrighted software, which comes in a box with a copyrighted picture on it. 
In this new suit, there is no claim that the game software is copyrighted – rather, there are visual elements that are copyrighted – a “fish icon,” a “pickaxe icon,” etc.  That provoked the question whether the ‘bots’ let you access these icons, when the real gripe is access to uncopyrighted game routines.
A story in a London newspaper said one wondrous aspect of the game was that no special software was needed – it works within any browser.  Also, the complaint says that the software is “accessed using a web browser to interact with servers in” the UK.  That suggests that users “interact” with software resident on servers outside the territory of U.S. copyright, and so, unlike a player in the U.S. licensing downloaded game software to use.
One further observation is that the complaint enters that realm of infringement by contract – that any departure from ‘terms & conditions’ agreed to by users becomes transformed into an infringement of copyright.  A gameplayer agrees not to use bots or scripts to “gain an unfair advantage,” but the suit is not pleaded against the mighty horde of game players.  If a player cheats, the RuneScape masters remedy should be banishment from the realm.

The DMCA’s anti-circumvention prohibitions have gained strength in the few cases that have considered various “technological” measures to control “access” to copyrighted work.  We will have to think that this case will write a further chapter in the DRM gamebook.

Is What is Wired, Tied?

A newly-filed suit in Michigan, accusing Comcast of tying premium cable TV with the rental of a set-top box, presumably will add to the cases before the Multidistrict Judicial Panel, 626 F.Supp.2d 1353 (MDL 2009).  In Rogers v. Comcast, 2:10-CV-10547 (E.D. Mich.), the class pleads a Sherman §1 claim along with Michigan Consumer Protection Act claim.

The class alleges upon “information and belief, the set-top box is required for the class to view the premium and/or digital channels” provided by Comcast. ¶23.  It alleges that the “market for cable boxes separate and apart from the market for …cable [TV] services.” ¶52.  Although set-top boxes can be bought elsewhere, class members allegedly are “forced to rent a set-top box from” Comcast to “fully view” premium content from the cable TV provider.  Early on, Comcast is accused of conspiring with “its officers and owners …to violate the Sherman Anti-Trust Act …by purposefully creating an unlawful tying arrangement” between premium cable and set-top boxes.

The Rogers complaint tracks what is alleged in the cases collected under the MDL order.  Still, one wonders (what is latin for ‘I wonder, ergo I blawg’). 
Pleading a Sherman Act tying claim leads to a rule of reason analysis.  That pretty much opens the season for hunting down every economic species known to experts in the field.  There too are limits in the law on whether tied items are separate or integral, e.g., Virtual Maint., 11 F.3d 660 (6th Cir. 1993), and whether cable TV is a good or a service, Morrison v. Viacom, Inc., 66 Cal.App.4th 534 (Cal.App. 1st Dist. 1998).  Conspiracy with corporate “officers and owners” is less favored in the law than a concert with those outside one’s company.
The MDL order conditionally consolidated the Sherman Act, i.e., the rule of reason cases. 
Consider though that §3 of the Clayton Act, which may provoke a rule of per se illegality, makes it “unlawful …to lease …commodities ..on the condition …that the lessee ..shall not use or deal in the goods” of others. 

We will watch the wire for continuing developments.  Recalled however is that cartoon, with two neighbors talking over the fence, and one observes: ‘I’ve got 387 channels now, and there’s not a darn thing on any of them.’

Spring IP lectures.

Per an earlier post, this Spring semester has a lot of IP to offer.  Tomorrow afternoon, 2/10, Prof. Donald Chisum will sum up some of the most significant patent cases from 2009.  Then, on Thursday afternoon, 2/11, Prof. Janice Mueller will give the Randall-Park lecture on The ‘Impossible Issue’ of Non-Obviousness in Design Patents.

Both lectures are in the main courtroom at the UK Law School, Lexington, KY.

FTC Thinks Surround Sound Comparable to Stereo.

The FTC decided, after public comment, to retain the Amplifier Rule, which is for consumers to compare power outputs of amps used in home entertainment products.

It decided there was no present reason to amend the rule due to the multi-channel home theater and surround sound systems, which now take up a lot of the market.

When you bought that last amp for your home sound system, did you use the Amplifier Rule or the ‘that one sounds better than that one’ standard?