Patent Law

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By: Audrey A. Millemann

Over the last 15 years, the United States Patent and Trademark Office has issued many business method patents.  Many of these patents seem overly broad or obvious, and the tech industry has been strongly critical of the PTO for issuing these patents.

Congress has been listening.  Under a new program enacted as part of the America Invents Act (“AIA”), business method patents can be challenged in a specific procedure in the PTO.  The program, called the “Transitional Program for Covered Business Method Patents” and referred to as CBM Review, is set forth in section 18 of the AIA.  CBM Review went into effect in September 2012 and has a sunset provision of September 2020.

Under the CBM Review program, a defendant accused of infringement of a patent covering a business method may challenge the validity of the patent in the PTO.  CBM Review is conducted before a new administrative law board, the Patent Trial and Appeal Board (“PTAB”).     Section 18 (d)(i) of the AIA defines a covered business method to be a method or apparatus directed to data processing or other activities used in financial products or services.  The statute excludes patents covering “technological inventions,” which the PTO has defined as inventions that solve a technical problem using a technical solution.

The purpose of CBM Review is to provide a quick and less costly alternative to federal court litigation for determining the validity of business methods patents.  Under the CBM Review program, a patent may be challenged as invalid on any number of grounds, including that the claims are directed to unpatentable subject matter under 35 U.S.C. section 101, in particular, abstract ideas.  Business method patents can also be challenged on the basis or prior art. 
Continue Reading Challenging Business Method Patents

The United States Supreme Court was presented with the question of who has the burden of proof when a licensee files an action seeking a declaration of non-infringement against the patentee. In Medtronic Inc. v. Mirowski Family Ventures, 187 L.Ed.2d 703 (Jan. 22, 2014), the Supreme Court reviewed a decision by the Federal Circuit Court, which held that the plaintiff licensee has the burden of proving non-infringement. The Federal Circuit Court, in interpreting the Declaratory Judgment Act, found that Medtronic, as the plaintiff, carried the burden of proof to prove all elements of its claim, as does any other plaintiff. The Supreme Court reversed.

The defendant, Mirowski Family Ventures (“Mirowski”), owned numerous patents relating to implantable heart stimulators. Medtronic entered into a license with Mirowski to practice certain of Mirowski’s patents in exchange for royalties. Pursuant to the terms of the license, Mirowski notified Medtronic of Mirowski’s contention that several of Medtronic’s products violated Mirowski’s patents and, therefore, additional royalties were due. Medtronic disputed the claim, filed an action for declaratory relief, and accrued the disputed unpaid royalties in an escrow account as permitted under the license.Continue Reading PATENT HOLDERS BEAR THE BURDEN OF PROOF EVEN AS A DEFENDANT

By: Audrey A. Millemann

On January 22, 2014, the United States Supreme Court decided that a patent owner has the burden of proving infringement in an action filed by a licensee for a declaratory judgment of noninfringement. This case, Medtronic, Inc. v. Mirowski Family Ventures, LLC, 2014 U.S. LEXIS 788 (2014), reversed a Federal Circuit Court of Appeals decision holding that in such a case, the burden of proof shifts to the licensee to prove it did not infringe.

In 1991, Medtronic and Mirowski entered into a license. Medtronic made medical devices, including cardiac devices, and Mirowski owned patents covering heart simulator implants. The license provided that if Mirowski believed that a new product of Medtronic was covered by the patents, Mirowski would give notice to Medtronic. Medtronic could then choose one of three options: agree to pay royalties for the new product, pay royalties and also challenge Mirowski’s finding of infringement, or not pay royalties, when which would allow Mirowski to terminate the license and sue Medtronic for patent infringement. The parties later modified the license to allow Medtronic to pay royalties into an escrow account if it decided to challenge Mirowski’s finding of infringement, with the winner receiving those royalties.Continue Reading Patent Owners have Burden of Proof in Declaratory Judgment Actions

By Audrey A. Millemann

            The Federal Circuit has loosened the standard for recovering attorneys’ fees in patent infringement cases, making it easier for winning defendants to obtain their fees from plaintiffs. 

            The case is Kilopass Technology, Inc. v. Sidense Corp. (Fed. Cir. Dec. 26, 2013), 2013 U.S. App. LEXIS 25671. Kilopass and Sidense were competitors in the market for memory cells used in transistors. Kilopass obtained several patents on its technology. After reviewing a published patent application of Sidense for its memory cells, Kilopass embarked on an interesting course of conduct.

            First, Kilopass engaged counsel to determine whether Sidense infringed Kilopass’ patents. Based on the product described in Sidense’s patent application, Kilopass’ counsel believed that there might be an infringement case, and sent Sidense a letter inviting Sidense to license Kilopass’ patents or explain why Sidense’s products did not infringe Kilopass’ patents. Sidense replied with a specific explanation of why its products did not infringe Kilopass’ patents. Sidense also offered to subject its products to a confidential infringement analysis by a third party expert to prove its position. Kilopass then obtained a diagram of Sidense’s product and provided it to Kilopass’ counsel.  Counsel then concluded that Sidense had designed around Kilopass’ patents and that its products probably did not literally infringe the patents. In response, Kilopass retained a second counsel to analyze infringement. The second counsel made a preliminary finding that Sidense’s products probably did not literally infringe the patents, but might infringe under the doctrine of equivalents, and said that further investigation was needed to confirm this. Kilopass did not conduct further investigation with this counsel, but instead engaged a third counsel to analyze infringement. Then, based primarily on Kilopass’ own engineer’s findings, Kilopass concluded that Sidense infringed under the doctrine of equivalents. 

 Continue Reading Patent Infringement: Attorneys’ Fees A Little Easier to Get

 By: Lisa Y. Wang

This month, the Trademark Trial and Appeals Board ruled that Bottega Veneta, a luxury Italian fashion brand, well known for its "weave design" handbags and accessories, could register a trademark for that specific design. Bottega Veneta handbags and accessories do not have obvious logos on the outside, signifying its origin. Instead, the weave patterns, multiple thin strips of leather forming a weave pattern (much like a basket weave) at a 45 degree angle, serves as its "trademark" and source of origin. Bottega Veneta claims that it created this very specific leather weaving technique and pattern, known as intrecciato, in the 1960’s.   Since there is no logo, this easily made weave pattern is constantly copied by fast fashion retailers and other brands, hence Bottega Veneta’s attempt to register a trademark for that specific pattern.

Continue Reading Weaving a Trademark