YourPatentGuy

Here is the bluetooth patents family that assertedly include claims directed to various cellphone manufacturer’s implementation of bluetooth.

From what I can tell, the argument is that the bluetooth standard, as a standard, does not assertedly infringe. The chips used by some bluetooth cellphone manufacturers (those made by Cambridge Silicon Radio) are not licensed and assertedly infringe. Washington Research Foundation did not sue CSR, asserting the patents against CSR’s customers (a famous tactic for gaining the attention of your real target).

While we can review the claims of the patents in the patent family, it is harder to gain access to some of the necessary details of the CSR chips so evaluation of the merits of these infringement claims is more difficult.

Periodically, the US Court of Appeals for the Federal Circuit is asked when someone other than the patent owner of record may bring a patent infringement suit. The answer: the patentee (person that the patent issued to) and successors in title to the patentee. If the analysis stopped there, you could sue only if you held legal to the patent. PROPAT INTERNATIONAL CORP. et al. v. RPOST, INC., and RPOST US, INC., et al. helps explain other instances when suit is proper.

It is sometimes the case that a patentee does not transfer formal legal title, but otherwise effects transfer of ownership for standing purposes when the patentee conveys all substantial rights in the patent. The transferee is treated as the patentee and may sue others in its own name.

The patent owner retained enough rights that it did not transfer all substantial rights. In this case, the patent owner expressly retained ownership, and included the right to maintain the patent which is an additional indication of retained ownership.

Further, the patent owner retained an economic interest in the patent and a substantial measure of control over decisions affecting the patent rights. The patentee enjoyed an equity position in the proceeds of licensing and litigaiton activities, including among other things a right to veto power over licensing and litigation. Additionally, the patentee held an unrestricted power to prevent the licensee from transferring its interest in the patent.

Finally, if the licensee failed to meet certain benchmarks, the patentee could terminate the contract and end all of the licensee’s rights.

An express clause that grants the licensee the right to sue was ineffective in actually enabling the licensee to sue, at least absent transfer of all substantial rights.

In this case, the court went further and dismissed the case rather than add the patent owner into the litigation. Since the licensee was held to be a bare licensee and lacked sufficient interest in the patent to give it standing even as?  co-plaintiff. Without being a legal owner or a transferee of all substantial rights, a party still has standing to sue if that party has a legally protected interest in the patent created by the Patent Act - sufficient that it suffers legal injury from an act of infringement. An exclusive licensee is considered to have such an interest.

An en banc opinion of the Court of Appeals for the Federal Circuit in DSU Medical v. JMS helps us understand what it means for Inducing Infringment. Infringement can be direct (for example “Dirty Rotten Infringer” or DRI makes, uses, sells, offers for sale or imports a product that satisfies all the limitations of at least one valid claim of an issued patent) or indirect. Indirect was usually contributory infringement or inducing infringement.

Here is 35 USC Section 271(b) and (c):

b) Whoever actively induces infringement of a patent shall be liable as an infringer.

(c) Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination, or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.

What the opinion seems to say: inducement of infringement requires the necessary mens rea to have an intent to induce actual infringement, which necessarily requires knowledge of the patent. (More than an intent to do acts which lead to direct infringement) - you as a patent holder now need to show evidence of a culpable conduct, directed to encouraging another’s infringement.

In this case, the defendant produced evidence that it believed that the accused infringement was not infringement (done through opinon of counsel and testimony from company representatives).

Another reason to consult with your patent professional and understand your actions in connection with another’s patent rights.

The US Supreme Court issued an opinion today in Medimmune, Inc. v. Genetech, Inc., et al. that held (8 to 1) that, under the facts of that case,? a licensee was not required terminate its existing license or be in breach prior to seeking a declaratory judgment that the licensed patent was invalid, unenforceable, or not infringed.

This was one of the long-standing issues confronting a patent licensee, and for licensees having similar fact patterns this question is resolved in their favors. Namely, you can keep your license and challenge the underlying patent.

This opinion of the court does not say that the parties could not have agreed to limits of the licensee’s ability to challenge the validity/enforceability/infringement of the patent, just that they could not find any basis to say that the licensee was in fact constrained based upon the particular license agreement.

In other words, it is not inherently the case that signing up for a license automatically prevents challenges to the licensed technology.

Bloomberg.com has an interesting article about patent damages for 2006, asserting that the $1Billion awards level was almost triple the level in 2005. There are some interesting quotes and statistics. One thing I did not like about the article was the assertion that damages were this high because of increased efforts to “fend off competition” by the patent owners. This is just more of that patents are anti-competitive theme that seems to run through much of the current writings. Check out my “About” page linked from this blog to see where I stand.

A patent is property, just like your house. If I were to come uninvited to your house and sleep in your bed, would you be fending off competition for your bed and the food in your refrigerator by kicking me out? As an owner, you expect to be able to throw me out, rent a room, or sell me the house. Patent owners do the same things to their patent properties. Recouping investments, being rewarded for progressive forward thinking, stopping infringements (patent infringement is a tort of trespass), these are all attributes that patent owners should enjoy for production and development of their patent properties.

Calling a patent owner a patent troll just because one doesn’t want to pay for the right to use? her or his property doesn’t help our discussions. Patent owners are not anti-competitve…? they are not the bad? guys.? 

Back to damages …. below are some awards for 2006 as reported by Bloomberg.com.

Top 10 Patent Awards in 2006:

Award                 Winner                     Loser

1. $307 million     Rambus                    Hynix Semiconductor

2. $133 million     Z4 Technologies         Microsoft, Autodesk

3. $112 million     Texas Instruments     GlobespanVirata

4. $78.9 million    Finisar                       DirecTV Group

5. $74 million       TiVo                          EchoStar Communications

6. $65.2 million    Ariad Pharmaceuticals  Eli Lilly

7. $53.4 million    LG Philips LCD            Tatung

8. $52.5 million    LG Philips LCD            Tatung

9. $38.5 million    MuniAuction Inc.         Thomson

10. $34 million     Power Integrations      Fairchild Semiconductor

Blaise Moutet has compiled a list of his top 10 US Nanotechnology patents for 2006. You can see his list here. The list is weighted towards nanotubes, but includes other patented technology. Now, if only we could all agree on a definition for nanotechnology…

A new website was officially launched today: FedCirc.Us. This is what the site says about its purpose: “FedCirc.us is a portal of patent caselaw information built on a foundation of timely, accurate and considerate reviews of appellate level court decisions.?  Content is organized to provide quick updates on the latest developments in the law and to facilitate focused legal research.”

From my experience, the value of this site will depend upon the quality, quantity, and timeliness of the information, just like everything else on the ‘Net. I hope that the site is successful, it could be a tremendous resource.

Important - just as the site disclaims - the content is for informational purposes. Just like anything you read here, if the summary/characterization sounds interesting, go look at the original source and see what it actually says and then always discuss with your competent counsel prior to undertaking any action.

PriceWaterhouseCoopers has made a damages study available - a summary that asserts that damage awards are increasing and trial tactics are changing. You may use this link to sign up to receive the short 32 page brief study.

I found this study by reviewing this post. My comments to the post are reproduced below.

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Thank you for pointing out this PWC Study - I enjoyed the overview and agree with several points.

However, I have reviewed the study and find some points where I disagree with your characterizations. First, while 53% of the cases result in damage awards according to the study, since the study does not count injunctions, summary judgements, and motions to dismiss. The “success” of a plaintiff in achieving an injunction can sometimes be far more valuable than damages. In this case, the 53% damages figure from the survey does not directly support the assertion that plaintiffs “win barely more than one half of the time.”

Second, while the survey does assert that 30% of the damage decisions issued by US federal district courts were affirmed, the ‘other’ 70% were overturned, adjusted, or remanded. The survey does not indicate what happens in these 70% of the cases, from my experience the damage awards can be increased.

There are, of course, other costs of litigation not directly quantified in this survey, particularly the mind share and distractions of the executives and technologists in participating in the litigation. I am not sure that many people who have been sued feel victorious, no matter the outcome.?