patent infringement

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The Federal Circuit Court of Appeals recently addressed Audrey-Millemann-03_weban issue of first impression: what is the “actual notice” required under 35 U.S.C. §154(d) for a patent owner to recover damages for a defendant’s infringing conduct that occurred before the patent issued?

Most people assume that a plaintiff cannot recover damages for patent infringement for infringing actions that took place before the patent issued (pre-issuance damages). However, the American Inventors Protection Act of 1999 does for just that. Section §154(d) provides that a patent owner can recover damages from the defendant infringer for infringement that occurred after the patent application was published if the defendant had actual notice of the published patent application and if the invention claimed in the published patent application is substantially identical to the invention claimed in the issued patent. For patent litigators, the situation rarely exists because the published claims are almost always amended during prosecution, resulting in different claims in the issued patent.

Rosebud LMS, Inc. sued Adobe Systems, Inc. for infringement of three different patents, from 2010 through 2014 in the district court of Delaware. The first and second cases were dismissed. The third case, filed in 2014, alleged that Adobe infringed Rosebud’s U.S. patent no. 8,578,280. The ‘280 patent and was a continuation of the second patent, which was a continuation of the first patent. All three of the patents covered methods for allowing collaborative work on a computer network.Continue Reading Pre-Issuance Damages for Patent Infringement – A Very Rare Remedy

Two weeks ago, the Federal Circuit Court of Appeals Audrey-Millemann-03_weblimited the factors a district court may consider in determining the amount of attorneys’ fees to award in an “exceptional” patent infringement case. Lumen View Tech., LLC v. Findthebest.com, Inc. (January 22, 2016) 2016 U.S. App. LEXIS 1087.

Lumen was the exclusive licensee of a patent covering a method for facilitating bilateral and multilateral decisionmaking. The method required analyses of preference data from two groups of people. Findthebest.com (FTB) offered a website with a search feature called “AssistMe” that gave the user information on products and services related to the user’s specific input.

Lumen sued FTB in the Southern District of New York for patent infringement. FTB’s counsel told Lumen on several occasions that FTB’s search method did not use a bilateral or multilateral process. Lumen ignored FTB’s statements, and filed its infringement contentions before obtaining any discovery. FTB then filed a motion for judgment on the pleadings on the grounds that the patent was invalid under 35 U.S.C. §101 as directed to an unpatentable abstract idea. The district court ruled in favor of FTB and dismissed the case. FTB then filed a motion seeking a determination that the case was “exceptional” under 35 U.S.C. §285 and for recovery of its attorneys’ fees on that grounds.

The district court ruled that the case was exceptional and that FTB was entitled to fees. The court awarded FTB the lodestar amount with a multiplier of two, for a total of about $300,000. The court found that the multiplier was justified in order to deter Lumen from filing similar frivolous lawsuits in the future. The court said that the lodestar amount was too small, because the case had been resolved at an early stage, to be an effective deterrent, and so chose to use the multiplier of two.Continue Reading Federal Circuit Limits Attorneys’ Fees in Exceptional Cases

The Federal Circuit Court of Audrey-Millemann-03_webAppeals has established a new test for “divided” patent infringement. Direct infringement of a method patent exists when a single party performs all of the steps of the claimed method. 35 U.S.C. §271(a). Divided infringement occurs when all of the steps are not performed by a single party, but by two or more parties under circumstances such that one party is still responsible for the infringement.

The law of divided infringement has been a subject of much debate. The question is: should direct infringement be expanded so that a single party is liable for infringement of a method claim even if another party performed some of the steps of the method? Those who say “no” argue that one party cannot infringe a method patent if it does not perform all of the steps of the claimed method, and that any other interpretation is so broad that it would make infringers out of innocent parties. Those who say “yes,” however, argue that infringers can escape liability for patent infringement simply by dividing up the steps of the claimed method among two or more parties.

In its previous decision in this case, a panel at the Federal Circuit had held that a party can be liable for divided infringement if it shares a principal-agent relationship, a contract, or a joint enterprise with the other party who performs some of the steps. On appeal to the United States Supreme Court, however, the Supreme Court vacated that decision and remanded the case to the Federal Circuit, stating that the Federal Circuit’s test for divided infringement may have been too narrow.Continue Reading Divided Infringement: A Stronger Sword for Plaintiffs

On February 5, 2015, Congressman Bob Goodlatte reintroduced the “Innovation Act”; a bill designed to implement several changes to the legal framework governing United States patent law. The law is designed to make it more difficult for non-practicing entities (also known as “patent trolls”) to maintain patent infringement lawsuits. The law appears to have significant support among both houses of Congress, and may soon become law.

If passed, the Innovation Act purportedly will create several disincentives aimed at increasing the risk faced by non-practicing entities when bringing patent infringement lawsuits. First, the Innovation Act would require non-practicing entities to meet a heightened pleading requirement. Non-practicing entities would be required to plead “with detailed specificity” how the accused products allegedly infringed their patents. Additionally, the Innovation Act contains a fee-shifting provision which would allow the court to award attorneys’ fees to the prevailing party. This provision was included in the Act to address the fact that most lawsuits brought by non-practicing entities are settled by the accused party because the defense costs and legal fees associated with defending patent infringement cases often run into the millions of dollars.
Continue Reading Congress is Reconsidering “Anti Troll” Legislation

One of the more important intellectual property cases decided in 2014 is the U.S. Supreme Court’s decision in Octane Fitness, LLC v. ICON Health & Fitness, Inc. (2014) 134 S.Ct. 1749.  In that case, the Supreme Court announced a new test for awarding attorneys’ fees in patent infringement cases, holding that the existing test used by the Federal Circuit Court of Appeals was “overly rigid.”

The plaintiff, Octane Fitness, and the defendant, ICON Health, both made elliptical exercise machines.  ICON owned a U.S. patent for its machine.  ICON sued Octane for patent infringement.  The district court granted summary judgment of noninfringement in favor of Octane.  Octane filed a motion to seeking its attorneys’ fees under 35 U.S.C. section 285.  The district court denied the motion.  On appeal, the Federal Circuit Court of Appeals affirmed.

The Supreme Court reversed, stating that “the framework established by the Federal Circuit in Brooks Furniture Mfg. v. Dutailier International (Fed. Cir. 2005) 393 F.3d 1378 is unduly rigid, and it impermissibly encumbers the statutory grant of discretion to district courts.”  Id. at 1755.  The Court held that the Federal Circuit’s test in Brooks Furniture was “overly rigid.”  Id. at 1756.  Under that test, a case was exceptional if there was either:  (1) litigation-related misconduct, or (2) subjective bad faith and objective baselessness.  According to the Federal Circuit, the first alternative, litigation misconduct, would be found it there was willful infringement, vexatious litigation, a Rule 11 violation, or fraud or inequitable conduct in obtaining the patent.  Under the second alternative, subjective bad faith was met only if the plaintiff actually knew that its suit was objectively baseless, and objective baselessness was met if no reasonable litigant could believe they would prevail.  In addition, the Brooks court held that a defendant had to prove an exceptional case by clear and convincing evidence.
Continue Reading Attorneys’ Fees for Patent Infringement – Easier to Obtain!