IP Law Observer

After Ten Years of Litigation and Three Appeals, Claims for Semiconductor Wafer Tracking Are Deemed Obvious

2008-10-10T15:53:00.000-07:00

Case: Asyst Technologies Inc. v. Emtrak Inc., Fed. Cir. No. 07-1554 (10/10/08)

The One Sentence Summary: On the third appeal of a case involving patents for tracking semiconductor wafers through a manufacturing process, the panel affirmed the district court's finding on a judgment as a matter of law that the asserted claims were obvious in light of the test announced in the Supreme Court's KSR decision.

Federal Circuit Holdings:

The substitution of a multiplexer for an electrical bus found in the prior art was obvious because multiplexers and buses were the two common ways for connecting and transmitting signals.
The objective indicia of nonobviousness found by the jury — commercial success, long-felt need, and industry praise - were not linked to the features not disclosed by the prior art. Thus, the commercial success did not indicate that the invention was not obvious.
The district court properly allowed defendant to introduce new invalidity defenses after the claim scope was interpreted by the Federal Circuit in a prior appeal.

Implied Statutory Warranty to Deliver Goods Free from Rightful Claims by Third Parties Can Be Breached by Non-Frivolous Trademark Infringement Claims

2008-10-10T09:37:00.000-07:00

Case: Pacific Sunwear of California, Inc. v. Olaes Enterprises, Inc., No. D051391 Fourth Dist., Div. One. (Oct. 9, 2008)

The One Sentence Summary: Unsuccessful trademark infringement claims asserted against the buyer of "Smile Now, Cry Later" Hot Sauce Monkey shirts supported the buyer's claim that the seller breached the statutory implied warranty of section 2312(3) of the California Uniform Commercial Code to provide goods that were free of "rightful claims."

What They Were Fighting About: Oales sold Hot Sauce Monkey t-shirts to Pacific Sunwear. These shirts depict on the front, a monkey drinking a bottle of hot sauce and, on the back, the same monkey in apparent pain, expelling fire. Centered underneath each of the images is a two-word caption: on the front, the phrase "Smile Now"; on the back, the phrase "Cry Later." SNCL, the holder of a registered trademark for Smile Now, Cry Later, made trademark infringement claims against Pacific Sunwear. In the trademark litigation in Hawaii, the court denied a motion for preliminary injunction, finding there was no likelihood of confusion after which the case settled.

Pacific Sunwear then sued Olaes for breaching the statutory warranty that the Hot Sauce Monkey T-shirts were "free of the rightful claim of any third person by way of infringement or the like." (§ 2312(3).)

The trial court granted summary judgment for Olaes, holding that the underlying claims of infringement were not "rightful claims" in light of the federal court's ruling that there was no likelihood of confusion.

California Uniform Commercial Code section 2312 states as follows:

"(1) Subject to subdivision (2) there is in a contract for sale a warranty by the seller that

"(a) The title conveyed shall be good, and its transfer rightful; and

"(b) The goods shall be delivered free from any security interest or other lien or encumbrance of which the buyer at the time of contracting has no knowledge.

"(2) A warranty under subdivision (1) will be excluded or modified only by specific language or by circumstances which give the buyer reason to know that the person selling does not claim title in himself or that he is purporting to sell only such right or title as he or a third person may have.

"(3) Unless otherwise agreed a seller who is a merchant regularly dealing in goods of the kind warrants that the goods shall be delivered free of the rightful claim of any third person by way of infringement or the like but a buyer who furnishes specifications to the seller must hold the seller harmless against any such claim which arises out of compliance with the specifications."

California Court of Appeal Holdings:

The phrase "free of the rightful claim of any third person by way of infringement or the like" in California Uniform Commercial Code section 2312 should be interpreted by reference to the commentary to section 2-312 of the Uniform Commercial Code in the absence of other evidence of legislative intent as to the meaning of "rightful claim."
The commentary to the Uniform Commercial Code makes it clear that the term "rightful claim" as used in the statute is intended to broadly encompass any nonfrivolous claim of infringement that significantly interferes with the buyer's use of a purchased good.
Other states have interpreted their statutes enacting section 2-312 of the Uniform Commercial Code consistently with the commentary that a rightful claim need not be a meritorious claim.
Public policy reasons also support interpreting section 2312 to extend to nonfrivolous claims. A merchant regularly dealing in goods of the kind has superior knowledge of potential claims and more incentive to resolve them than a buyer. Additionally, the parties can expressly contract to alter the implied warranty under section 2312.
The existence of a reverse warranty from buyer to seller in the case of buyer-supplied specifications under section 2312(3) supports the interpretation of section 2312.
Interpreting section 2312 to extend to nonfrivolous claims provides a clear allocation of risk that provides certainty to parties entering a commercial transaction.
"[T]he warranty against rightful claims applies to all claims of infringement that have any significant and adverse effect on the buyer's ability to make use of the purchased goods, excepting only frivolous claims that are completely devoid of merit."
Summary judgment against the plaintiff's warranty claim was inappropriate due to triable issues of fact as to whether the underlying infringement claim was nonfrivolous.
Triable issues of fact precluding summary judgment also existed as to whether any damages such as Pacific Sun's litigation expenses were proximately caused by Olaes' failure to disclose the potential trademark claims by SNCL. The factual issues include whether Pacific Sun knew of the potential claims.

Reissued Patent Claim Did Not Impermissibly Broaden the Scope of the Original Claim

2008-10-10T08:05:00.000-07:00

Case: Predicate Logic, Inc. v. Distributive Software, Inc., Fed. Cir. No. 2007-1539 (10/9/08)

The One Sentence Summary: The district court erred in finding that claims for software analysis modified during reexamination were broader and different in scope than original claims.

Federal Circuit Holdings:

A claim reissued after reexamination was not invalid due to broadening. The reissued claim was no broader because no hypothetical accused process could be conceived that would violate the reissued claim but not the original claim.
Another reissued claim was not different in scope from the original claim, so activities before reissuance could still be infringing activities.

District Court's Five Year Delay in Issuing Opinion After a Patent Trial Did Not Warrant Reassignment of the Case on Remand

2008-10-08T15:29:00.000-07:00

Case: Cohesive Tech. Inc. v. Waters Corp., Fed. Cir. No. 08-1029 (10/7/08)

The One Sentence Summary: The panel considered several issues in affirming in part rulings by the district court on a dispute about patents for high pressure liquid chromatography, and refused to reassign the case despite a five year delay after trial before the district court issued its opinion.

Federal Circuit Holdings:

Patentee did not expressly disavow claim scope and limit the term "rigid" to exclude polymeric molecules by submitting a declaration distinguishing certain polymeric molecules in a prior art references as non-rigid.
Expert testimony provided sufficient evidence that the accused particles were "rigid" as required by the claim construction.
The district court erred in refusing to allow the jury to consider an "iffy" anticipation argument in light of the obviousness argument. Anticipation and obviousness are separate defenses, and a jury could find anticipation even if it did not find obviousness.
The district court did not err in rejecting an inequitable conduct argument by finding no intent to deceive. The district court accepted witness testimony that the prosecuting attorney felt that the information withheld from the PTO (an expert's disagreement as to whether flow was "turbulent") was not material.
The district court erred in construing the term "greater than about 30 microns" to exclude the accused device. Claims must be construed in light of the claim language, not in light of the accused device.
The district court's construction improperly read out of the claim the "about" language. The phrase "greater than about 30 microns" is broader than "greater than 30 microns." The meaning of "about" in this context must be determined in light of the purpose of the limitation in the invention. In light of the variation in particle sizes cited in the specification, the panel concluded that the proper construction of “greater than about 30 μm” in claim 1 of the ’874 patent is: either (1) greater than 25.434 μm, or (2) both greater than 23.044 μm and of sufficiently large size to assure that the column is capable of attaining turbulence.
The district court's finding of no literal infringement by 25 micrometer particles was in error due to the claim construction and issues of fact as to the diameter of the accused particles.
Although the doctrine of equivalents can be applied to broad claims, the use of the word "about 30 micrometers" necessarily included the scope of claims that would be encompassed by the doctrine of equivalents.
The panel remanded for a determination of whether 20 micrometer columns were an acceptable non-infringing substitute for the damage analysis.
The court affirmed a finding of non-willfulness based upon a close question of whether the claims were limited to non-polymeric materials.
Enhanced damages were not available absent willfulness.
Despite a 5 year delay by the district court in issuing its opinion, the panel would not reassign the case to another judge.

Patent for Controlling Gas Flows Invalidated for Inequitable Conduct Where Witness Could Not Explain the Failure to Disclose References to the PTO

2008-10-08T14:39:00.000-07:00

Case: Praxair, Inc. v. ATMI, Inc., Fed. Cir. No. 2007-1483, 2007-1509, 9/29/08

The One Sentence Summary: The panel affirmed in part, reversed in part and remanded after considering inequitable conduct, indefiniteness, and claim construction challenges.

Federal Circuit Holdings:

The panel affirmed the district court's finding of inequitable conduct and unenforceability of the '115 patent for failing to disclose restricted flow orifices that were similar to the capillaries claimed in a patent to control discharge of high pressure fluids and gases. The RFO prior art was highly material because it was inconsistent with statements made in the prosecution of the patent. There was no credible explanation of the reason why the reference was not submitted to the PTO (general statements of not having an intent to deceive were entitled to no weight, and the witness could not recall specifically why the reference had not been submitted). Thus, the court properly inferred intent to deceive the PTO.
An inequitable conduct finding as to a second patent (the '609 patent) was reversed because there was no basis for a finding of high materiality. The prosecution history statements relied upon in establishing materiality for the '115 patent did not infect the prosecution of the '609 patent.
The panel reversed the district court's conclusion that the '895 patent was unenforceable due to 35 U.S.C. section 112 indefiniteness in the term "port body." The port body was sufficiently described in the specification and figures, it was not exclusively defined by its functionality, and extrinsic evidence of an expert's inability to identify the port body did not affect the legal interpretation of the term.
The district's court's claim construction of the term "flow restrictor" was incorrect in requiring "severe" flow restriction when that was simply a preferred embodiment. However, the panel rejected the broader construction of any flow restriction where the specification made clear that the very character of the invention as described in the specification required that the flow restriction be sufficient to prevent hazardous flows of gases.
The district court properly relied on a dictionary definition for construction of the term "capillary" that was not contradicted by the specification.
Although "uniformity" of capillaries was often mentioned in the specification, it was simply a preferred embodiment, and it was added as a limitation by dependent claims to earlier independent claims, and thus should not be part of the claim construction.

Implied License to Use Custom Created Software Defeats Copyright and Trade Secret Claims

2008-09-11T08:23:00.000-07:00

Case: Asset Marketing v. Gagnon, 9th Cir. No. 07-55217 (9/9/08)

The One Sentence Summary: An implied license to use and modify software arose between a contractor who created customized software for a customer and the customer.

Ninth Circuit Holdings:

Implied, unlimited license arose under copyright law from relationship where plaintiff created customized software for defendant where the contract was silent regarding a license, the contractor was paid on an hourly basis, and software was delivered without indication that there were any limits on use by the defendant.
Trade secrets alleged to be in the software were not misappropriated where defendant had an implied license to use and modify the software.
A non-compete agreement for plaintiff's fomer employees was unenforceable absent any trade secrets due to California Business & Professions Code section 16600.

Watches Manufactured Abroad Bearing US Copyrighted Design Cannot Be Imported Without Copyright Owner's Consent According to Ninth Circuit

2008-09-09T08:23:00.000-07:00

Case: Omega S.A. v. Costco Wholesale, 9th Cir. No. 07-55368 (09/03/08)
The Two Sentence Summary: The Ninth Circuit panel reaffirmed their precedent holding that importation and sale of imported "gray market" watches manufactured overseas bearing a copyrighted design registered in the United States was an infringement of copyright. The panel distinguished the Supreme Court’s decision in Quality King Distributors, Inc. v. L’anza Research International, Inc., 523 U.S. 135 (1998), which held that the first sale doctrine allowed resale of gray market products which had been manufactured in the United States.

Breach of Open Source Software License Allows Injunction for Copyright Infringement

2008-08-18T08:07:00.000-07:00

Case: Jacobsen v. Katzer, Fed. Cir. No. 2008-1001 (8/13/08)

The One Sentence Summary: Applying Ninth Circuit law, the Federal Circuit reversed a denial of preliminary injunction, holding that an open source copyright license requiring attribution as a condition of use and distribution of software could be enforced by preliminary injunction and remanded for a determination of whether preliminary injunction standards were met.

Federal Circuit Holdings:

The Federal Circuit had jurisdiction over the appeal because of patent claims in the case, but would apply Ninth Circuit law to the copyright issues on this appeal.
In determining whether to issue a preliminary injunction, the Ninth Circuit requires demonstration of (1) a combination of probability of success on the merits and the possibility of irreparable harm; or (2) serious questions going to the merits where the balance of hardships tips sharply in the moving party's favor.
In copyright cases, the Ninth Circuit has applied a presumption of irreparable harm, but this presumption may need to be reconsidered in light of the Supreme Court's decision in eBay Inc. v. MercExchange, 547 U.S. 388 (2006).
Generally, a copyright owner who grants a nonexclusive license to use his copyrighted material waives his right to sue the licensee for copyright infringement, and can sue only for breach of contract. Sun Microsystems, Inc. v. Microsoft Corp., 188 F.3d 1115, 1121 (9th Cir. 1999); Graham v. James, 144 F.3d 229, 236 (2d Cir. 1998). If, however, a license is limited in scope and the licensee acts outside the scope, the licensor can bring an action for copyright infringement. See S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1087 (9th Cir.1989); Nimmer on Copyright, section 1015[A] (1999).
The Artistic License at issue created conditions to use of the software, and was a restriction on the scope of the license. Accordingly, plaintiff could sue for copyright infringement and seek an injunction.

Even Reasonable and Narrow Non-Compete Agreements Are Barred by California Statute

2008-08-07T17:26:00.000-07:00

Employment contracts with non-competition clauses are common outside of California, but a California statute, section 16600 of the California Business and Professions Code, prohibits non-compete contracts outside of a few statutory exceptions. In a decision issued on August 7, 2008, Edwards v. Arthur Anderson, No. S147190, the California Supreme Court held that section 16600 prohibits non-competition contracts even if the non-compete clause is reasonable or imposes only a “narrow restraint.” The Court further held that the employer had engaged in a wrongful act by requiring the employee to sign a release of claims under the non-competition contract.

Background:

Section 16600 provides that

“Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”

Statutory exceptions to section 16600 allow non-compete contracts in certain circumstances, including in connection with the sale of goodwill of a business (§ 16601) and the dissolution of a partnership (§ 16602) or limited liability corporation (§ 16602.5).

In Edwards, the plaintiff Edwards had signed a non-competition agreement as an employee of Arthur Anderson. The agreement barred Edwards from serving within 18 months any Anderson clients with whom Edwards had worked, and barred solicitation of clients of Anderson’s Los Angeles office. After Anderson became embroiled in the Enron scandal, HSBC sought to hire a group of employees including Edwards. HSBC and Anderson required the moving employees to sign a “Termination of Non-Compete Agreement” which released “any and all” claims against Anderson. Edwards refused to sign the termination agreement because he did not want to release indemnity claims against Anderson, and was therefore not hired by HSBC. Edwards then sued Anderson and HSBC for claims including interference with prospective economic advantage. Edwards lost in the trial court against Anderson but won at the California Court of Appeal (click here for a discussion of the lower court decision). The California Supreme Court then took the case.

California Supreme Court Holdings:

The first question before the California Supreme Court was whether Anderson’s enforcement of the non-competition agreement (by forcing Edwards to sign an agreement terminating it) was a wrongful act. The Court held that enforcing the non-competition agreement was illegal under section 16600 and enforcing it was a wrongful act that could lead to liability for interference with prospective economic advantage. The Court noted that
section 16600 reflects “a settled legislative policy in favor of open competition and employee mobility, . . . [it] ensures that every citizen shall retain the right to pursue any lawful employment and enterprise of their choice [and it] protects the important legal right of persons to engage in businesses and occupations of their choosing.”

In light of the broad statutory language of section 16600 and the limited statutory exceptions, the Court rejected decisions of federal courts which had ruled that section 16600 allowed “reasonable” non-compete contracts that imposed only a “narrow restraint” on competition. The Court stated “Section 16600 is unambiguous, and if the Legislature intended the statute to apply only to restraints that were unreasonable or overbroad, it could have included language to that effect.”

In a second part of the decision unrelated to the non-competition agreement issue, the Court also held that the release sought by Anderson as the employer for “any and all” claims was not unlawful because it could not be interpreted to release non-waivable employee indemnity rights under California Labor Code section 2802(a).

Unsuccessful Patent Claims Did Not Allow Later Malicious Prosecution, Unfair Competition and Antitrust Claims

2008-07-08T15:33:00.000-07:00

Case: Fisher Tool Co., Inc. v. Gillet Outillage, 9th Cir. No. 06-55996, 06-56165 (June 30, 2008)

The One Sentence Summary: District court properly granted summary judgment for defendants on malicious prosecution, Lanham Act, state law tort and antitrust claims arising out of earlier patent suit on plier patents where defendant and its attorneys had good faith basis to assert patent infringement.

Ninth Circuit Holdings:

Summary judgment for defendant on a malicious prosecution claim arising from a dismissed patent infringement case was appropriate where the client relied on advice from an attorney, and where the attorney was not on notice of facts that plaintiff claimed made the patent invalid.
Summary judgment against the malicious prosecution claim was also appropriate because the attorneys had probable cause to believe that infringement existed. Sheldon Appel Co. v. Albert & Oliker, 765 P.2d 498, 501 (Cal. 1989). The narrow Markman ruling by the district court did not mean that probable cause did not exist.
Demand letters threatening suit did not allow a cause of action under the Lanham Act because they were not written in "bad faith."
Antitrust claim was barred by the Noerr-Pennington doctrine because the underlying patent lawsuit was not objectively baseless.

Exact Digital Models of Cars Not Protected by Copyright

2008-06-27T14:36:00.000-07:00

Case: Meshworks v. Toyota, Tenth Cir. No. 064222 (June 17, 2008)

The One Sentence Summary: Exact digital models of cars were not copyrightable because there was no creativity involved in their creation.

Tenth Circuit Holdings:

In derivative works cases, the court must separate out the preexisting work to determine what is copyrightable by the new author.
Conveying reality does not create a copyrightable work.

California Appellate Court Defines Statute of Limitations Period for Third-Party Trade Secret Actions

2008-06-20T09:20:00.000-07:00

Case: Cypress Semiconductor Corp. v. Superior Ct. (Silvaco Data Systems), No. H032114 (Cal. Ct. App. May 30, 2008)

The One Sentence Summary: Court holds that the statute of limitations on a cause of action for third-party trade secret misappropriation begins to run when the plaintiff has any reason to suspect that the third-party knows or reasonably should know that the information is a trade secret.

What They Were Fighting About: Plaintiff Silvaco Data Systems had developed source code, which it held as a trade secret. A former employee with access to plaintiff's trade secret left for a competitor and used the secret source code in a competing software. Plaintiff sued the competitor for trade secret misappropriation and reached a settlement whereby the competitor admitted misappropriation. The competitor, however, had sold its infringing software to its customers. One customer, defendant Cypress Semiconductor Corporation, continued to use plaintiff's trade secret. Plaintiff sued for misappropriation under California's Uniform Trade Secrets Act (Civ. Code § 3426 et seq.). Defendant argued that the three year statute of limitations period had expired (Id. § 3426.6).

California Appellate Court Holdings:

The court rejected the single-claim rule, whereby a plaintiff for misappropriation has but one claim and the clock on the statute of limitations commences when the plaintiff learns of the original misappropriation. Instead, the court held that "a plaintiff may have more than one claim for misappropriation, each with its own statute of limitations, when more than one defendant is involved."

The court also rejected the plaintiff's argument that the statute of limitations should begin when a third-party defendant learns that it possesses plaintiff's trade secrets. Instead, the court held that the "proper focus, for purposes of the running of the statute of limitations, is not upon the defendant’s actual state of mind but upon the plaintiff’s suspicions." As such, the court held that the statute of limitations on a cause of action for third-party trade secret misappropriation begins to run when the plaintiff has any reason to suspect that the third-party knows or reasonably should know that the information is a trade secret.

In the case at hand, the court concluded that whether the statute of limitations had expired was a factual question for the jury. The jury was tasked with determining "When did Silvaco first have any reason to suspect that a CSI customer had obtained or used DynaSpice [the infinging product] knowing, or with reason to know, that the software contained Silvaco’s trade secrets?

Statutory Damages Were Not Available for Series of Infringements Where Work Was Registered After 1st Infringement

2008-06-15T22:17:00.000-07:00

Case: Derek Andrew, Inc. v. Poof Apparel Corp., No. 07-35048, Ninth Circuit, June 11, 2008

The One Sentence Summary: Statutory damages for copyright infringement were not available where the first infringement in a series occurred before registration.

What They Were Fighting About: Defendant Poof had infringed hang tags on clothing, and default judgment was awarded against it, along with statutory damages and attorneys' fees.

Ninth Circuit Holdings:

Statutory damages for copyright infringement were not available where the first infringement in a series occurred before registration.
Attorneys' fees for willful infringement under Lanham Act were available where default was entered under complaint alleging willful infringement.

Patent Exhaustion Doctrine Prevented Pursuit of Customers of a Licensee

2008-06-15T22:06:00.000-07:00

Case: Quanta Computer, Inc., et al. v. LG Electronics, Inc., Supreme Court No. 06-937, June 9, 2008.

The One Sentence Summary: The patent exhaustion doctrine prevented an action against a buyer of a patented article from a licensee.

Supreme Court Holdings:

The authorized sale of an article that substantially embodies a patent exhausts the patent holder's rights and prevents the patent holder from invoking patent law to control postsale use of the article. Here, LGE licensed Intel to practice any of its patents and to sell products practicing those patents. Intel's microprocessors and chipsets substantially embodied the LGE Patents because they had no reasonable noninfringing use and included all the inventive aspects of the patented methods. Nothing in the License Agreement limited Intel's ability to sell its products practicing the LGE Patents. Intel's authorized sale to Quanta thus took its products outside the scope of the patent monopoly, and as a result, LGE can no longer assert its patent rights against Quanta.

Parody Web Site That Criticized Critics of the LDS Church Did Not Infringe Trademarks or Constitute Cyber-Squatting

2008-06-02T23:05:00.000-07:00

Case: Utah Lighthouse Ministry v. Discovery Computing, 10th Cir. No. 07-4095 (05/29/2008)

The One Sentence Summary: The panel affirmed summary judgment in favor of parody web site and domain names that used the mark of UTAH LIGHTHOUSE, a site criticizing the LDS Mormon church, to direct internet users to sites with opposing views.

Tenth Circuit Holdings:

Evidence of search rankings was not sufficient evidence of secondary meaning:
A mark acquires a secondary meaning if the words “have been used so long and so exclusively by one producer with reference to his goods or articles that, in that trade and to that branch of the purchasing public, the word or phrase [has] come to mean that the article is his product.” Educ. Dev. Corp. v. Econ. Co., 562 F.2d 26, 29–30 (10th Cir. 1977) (internal quotation marks omitted) (modification in original). The number of search engine hits, standing alone, is inadequate to demonstrate that consumers associate the mark with a particular product or producer, or perceive UTAH LIGHTHOUSE as a distinctive mark.

Links on accused infringer's site to commercial sites via roundabout paths did not render the defendants' use of the trademark a use in commerce.
Mere interference with sales on the plaintiff's site due to diversion in traffic was not a use in commerce under the Lanham Act.
The court declined to hold that any use of a trademark on the internet was use “in connection with goods or services.”
District court correctly concluded that parody web site did not create a likelihood of confusion.
Registration of a domain name identical to trademark was not a violation of anti-cybersquatting act in absence of evidence of distinctiveness of mark or bad faith intent to profit from mark. Parody of mark was not an attempt to profit.
Safe harbor under ACPA applied. Provision of ACPA precludes a finding of bad faith intent if “the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.” 15 U.S.C. § 1125(d)(1)(B)(ii). Defendant's belief that this was a parody precluded a finding of bad faith attempt to profit.

Preparing Designs for Infringing Products Was Sufficient Preparation to Allow Declaratory Judgment Jurisdiction

2008-05-28T19:05:00.000-07:00

Case: Cat Tech. LLC. v. Tubemaster Inc., Fed. Cir. No. 07-1443 (5/28/08)

The One Sentence Summary: The second prong of the Federal Circuit's declaratory judgment test survives after the Supreme Court's Medimmune decision, and was met here where the accused infringer had made preparations to infringe.

What They Were Fighting About: The Federal Circuit panel affirmed summary judgment of non-infringement for reactors that did not meet spacing requirements set out in claim language.

Federal Circuit Holdings:

"[A]lthough MedImmune articulated a “more lenient legal standard” for the availability of declaratory judgment relief in patent cases, the issue of whether there has been meaningful preparation to conduct potentially infringing activity remains an important element in the totality of circumstances which must be considered in determining whether a declaratory judgment is appropriate. If a declaratory judgment plaintiff has not taken significant, concrete steps to conduct infringing activity, the dispute is neither “immediate” nor “real” and the requirements for justiciability have not been met." Slip opinion at 12.
Preparation of CAD drawings of 3 versions of devices, and production of one was sufficient "meaningful preparation to conduct potentially infringing activity" to allow declaratory judgment action.
Design of four infringing configurations met "reality" test for declaratory judgment because the accused configurations were fixed and not fluid.
District court properly exercised discretion in ruling on declaratory judgment in order to give certainty to accused infringer without requiring betting the farm.
Claim language interpretation of "a spacing" smaller than a particle size required that all spacings be smaller.
Prosecution history of parent application supported interpretation that all spacings must be smaller than the particle size.

Summary Judgment for Defense Affirmed in Copyright Action Where the Similarity in Architectural Plans Was in Unprotectable Concepts and Not Expression

2008-05-18T22:13:00.000-07:00

Case: Oravec v. Sunny Isles Luxury Ventures, L.C. , No. 06-14495 (11th Cir. 5/14/08)

The One Sentence Summary: Summary judgment of non-infringement for defendants of copyright in architectural plans is upheld where similarities were only in non-protectable ideas and concepts rather than in expression of ideas.

Eleventh Circuit Holdings:

"[N]on-infringement may be determined as a matter of law on a motion for summary judgment, either because the similarity between two works concerns only non-copyrightable elements of the plaintiff’s work, or because no reasonable jury, properly instructed, could find that the two works are substantially similar.”
In comparing works, the court must determine if there is substantial similarity in expressions of ideas rather than the ideas themselves which cannot be copyrighted.
"[W]hile individual standard features and architectural elements classifiable as ideas are not themselves copyrightable, an architect’s original combination or arrangement of such features may be."
Differences in the designs "preclude a finding of substantial similarity. While it is true that Oravec’s designs and the Trump Buildings have a number of features in common, those elements are similar only at the broadest level of generality. At the level of protected expression, the differences between the designs are so significant that no reasonable, properly instructed jury could find the works substantially similar. As the district court observed, to conclude otherwise would require a finding that Oravec owns a copyright in the concept of a convex/concave formula or in that of using three external elevator towers that extend above the roof of a building. Such a conclusion would extend the protections of copyright law well beyond their proper scope."
Protection of broad concepts under copyright would not be allowed because it would diminish the store of ideas available to other architects.
Construction of a plan registered as a pictorial, graphic or sculptural work rather than as an architectural work under the Copyright law was not an infringement.
“[A]lthough an owner of copyrighted architectural plans is granted the right to prevent the unauthorized copying of those plans, that individual . . . does not obtain a protectable interest in the useful article depicted by those plans.”
Effective registration doctrine did not allow protection of unregistered elements of models in later registration as a pictorial, graphic or sculptural work that did not incorporate those models.
The district court did not abuse discretion in denying late amendment of plaintiff's complaint.

Assignment Agreement Incorporating Patent Law Terms Should Have Patent Law Principles in Jury Instructions

2008-05-18T21:50:00.000-07:00

Case: Medtronic v. White, Ninth Circuit No. No. 06-16229, (May 15, 2008)

The One Sentence Summary: The Ninth Circuit panel reversed and remanded a jury verdict in a dispute over ownership of a patent where the district court gave agency instructions to the jury in lieu of patent law instructions regarding interpretation of a contract assigning inventions "conceived" or "reduced to practice" during employment.

Ninth Circuit Holdings:

Objections to agency instructions were adequately preserved.
The parties to a contract assigning inventions "conceived" or "reduced to practice" during employment incorporated patent law principles by reference to a policy stating that patent law principles would apply.
Giving agency instructions rather than instructions defining the law of inventorship under patent law principles was clear error.
An admission against interest by the inventor could be allowed without corroborating evidence although it concerned reduction to practice - corroborating evidence is only required with respect to reduction to practice when the inventor is the proponent of the testimony.

In Doors Rock Band Dispute, Ninth Circuit Finds Insurer Duty to Defend Against Trademark Claims

2008-04-01T17:41:00.000-07:00

Case: Manzarek v. St. Paul Fire & Marine Ins. Co., 9th Cir. No. 06-55936 (3/25/08)

The One Sentence Summary: District court erred in dismissing an advertising injury insurance coverage and bad faith lawsuit involving members of the rock band, The Doors, and claims of trademark infringement.

Ninth Circuit Holdings:

Dismissal of plaintiff's complaint for insurance coverage for advertising injury and bodily injury was improper. A duty to defend existed due to a potential of coverage for claims alleging sale of trademarked merchandise and infliction of emotional distress. The "field of entertainment" exclusion relied upon by the defendant insurance company did not exclude all potential for coverage.
The trial court should have allowed plaintiff an opportunity to amend his complaint.

Patent Office Rule Changes Blocked by District Court's Permanent Injunction

2008-04-01T12:50:00.000-07:00

Case: Tafas v. Dudas, Nos. 1:07cv846, 1:07cv1008 (E.D. Va. 4/1/08)

Judge James Cacheris of the United States District Court in Alexandria, Virginia issued a permanent injunction blocking the USPTO from implementing new rules for patent prosecution. The rules had been previously held up by a preliminary injunction issued on October 31, 2007.

In issuing the injunction, the court granted summary judgment to plaintiffs, holding that the rules were substantive rather than procedural, and that the USPTO did not have authority to issue the rules.

The litigation is likely not over because the ruling could be appealed to the Federal Circuit by the USPTO.

Antisuit Injunction Not Available to Stop Litigation in China Despite Prior California Settlement

2008-03-31T21:57:00.000-07:00

Case: TSMC North America v. Semiconductor Mfg. Int'l Corp., California Court of Appeal No. A117182, March 27, 20008

In Brief: After the parties settled an earlier patent infringement suit with a settlement agreement providing for California choice of law and submission to California courts for jurisdiction, disputes again arose causing one party to file litigation in California and the other to file a suit in the Peoples' Republic of China. The trial court denied a motion for an antisuit injunction barring further litigation of the case in China, citing concerns of international comity, and rejecting claims that the litigation in China would violate plaintiff's rights. The court of appeal affirmed.

Use of Trademark in Keyword Search Caused Initial Interest Confusion

2008-03-04T13:57:00.000-08:00

Case: Storus Corp. v. Aroa Mktg. Inc., N.D. Cal. C-06-2454 (Feb. 15, 2008)

The One Sentence Summary: Summary judgment of initial interest confusion under the Lanham Act was granted for plaintiff where defendant purchased keyword search advertisements using plaintiff's trademark and the advertisement displayed the trademark leading searchers to click on the advertisement.

District Court Holdings:

SMART MONEY CLIP mark was a valid mark. Defendant failed to present any evidence that "smart money clip" was a general laudatory term.
Applying the internet trinity of Sleekcraft confusion factors, (1) the similarity of the marks, (2) the relatedness of the goods or services, and (3) the parties’ simultaneous use of the Web as a marketing channel, the court found a likelihood of confusion due to initial interest confusion. Defendant's purchase of the trademark keywords "smart money clip" on Google AdSense leading to defendant's advertisement titled "Smart Money Clip" led to 1,374 clicks out of 36,164 displays. This diversion of potential customers was initial interest confusion under the Lanham Act.
For a second defendant, summary judgment was denied in the absence of evidence that a search for the term "smart money clip" would lead to a page with that phrase advertising a competing product.

Amounts Paid By Settling Copyright Defendants Reduces Judgment Against Non-Settling Defendants Under One-Satisfaction Rule

2008-03-01T21:03:00.000-08:00

Case: Buc Int'l Corp. v. Int'l Yacht Council Ltd, 11th Cir. No. 05-16151 (2/25/08)

The One Sentence Summary: Defendants found liable for copyright infringement should have been allowed to reduce the judgment against them under Federal Rule of Civil Procedure 60(b)(5) by the amount paid by settling defendants because one satisfaction rule applies to copyright claims.

Unfair Competition and Copyright Claims Against Karaoke Competitor Dismissed

2008-03-01T16:23:00.000-08:00

Case: Sybersound v. UAV Corp., 9th Cir. No. 06-55221(2/27/08)

The One Sentence Summary: Claims that a competitor in the karaoke business infringed copyrights and competed unfairly were dismissed.

Ninth Circuit Holdings:

Lanham Act 43(a) (15 U.S.C. § 1125(a)) claim for misrepresentations regarding copyright license status could not be brought by competitor who did not own copyrights, so dismissal of claim was proper.
Co-owner of copyright could not assign exclusive right to sue for infringement of karaoke license.
Dismissal of RICO claim under 18 U.S.C. § 1962 was proper because plaintiff could not show proximate cause of damage, and complicated questions as to multiple recoveries would arise.
Dismissal of RICO claim was also proper because plaintiff could not show not show injury caused by reinvestment of RICO proceeds.
State law claims for interference with contract and breach of California's Unfair Competition Law, Business & Professions Code section 17200, were preempted to the extent they were based on claims of copyright infringement. Claims that third parties were induced to enter contract by defendants' claims of copyright compliance could not be enforced by plaintiff who was not directly involved.
Claim under Bus. & Prof. Code § 17043 for below cost sales were dismissed because there was no claim of a purpose to harm plaintiff.

Attorneys' Fees for Bad Faith Trade Secret Claim Improper Where Complaint Did Not Allege Trade Secret Misappropriation

2008-02-21T21:08:00.000-08:00

Case: CytoDyn, Inc. v. Amerimmune Pharm., Inc., No. B187661 (Cal. Court of Appeal, 2/20/08)

The One Sentence Summary: Complaint alleging unjust enrichment in taking of patents and trademarks did not allow award of attorneys' fees to defendants under California Trade Secrets Act despite erroneous claim for attorneys' fees under Trade Secrets Act in prayer for relief.