March 31, 2010 by thomason.

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.

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March 29, 2010 by thomason.

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.

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March 10, 2010 by thomason.

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.

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