Friday, 28 August 2015

What determines the plaintiff’s court selection in patent litigation?

"What determines the plaintiff’s court selection in patent litigation?" This question is being addressed at a conference, European Policy for Intellectual Property, which is taking place at the University of Glasgow next week on Wednesday 2 and Tuesday 3 September. One of the papers is "WWhat to Buy When Forum Shopping – Determinants of Court Selection in Patent Litigation" by Fabian Gaessler, a Research Fellow at the Max Planck Institute for Innovation and Competition in Munich, Germany. The abstract of his paper is available online and reads as follows. in relevant part:
Patent infringement disputes frequently fulfil territorial jurisdiction requirements at multiple courts, giving the patent holding plaintiff the option to freely select the court of his choice to seek remedies. While these so-called forum shopping activities are frequently observed, the factors influencing court selection have remained largely unexplored. New academic research ... examines the determinants of the plaintiff’s court selection at German regional courts. The study ... finds that plaintiffs consider the expected economic loss from delayed judgment when choosing their court. Speedy patent enforcement is in particular valued, if plaintiff and alleged infringer compete in the product market.

German regional courts differ primarily in their time until judgment

To analyse forum shopping in patent litigation, the researcher utilises a dataset of patent litigation cases in Germany which covers all proceedings filed at the regional courts in Düsseldorf, Mannheim, and Munich between 2003 and 2008 [presumably the age of the dataset does not affect the author's conclusions; this would not be so for eg England and Wales, where subsequent reforms have rendered the data from that period little more than a historical curiosity]. These three courts account for approximately 80 to 90% of all patent infringement proceedings in Germany.

The results indicate that judges at the three courts differ in their tendency to draw on time-consuming expert opinions depending on the patent’s technology. Furthermore, judges seem to differ in their propensity to stay the proceeding due to a parallel validity challenge.

Overall, judges at the Düsseldorf regional court are less likely to call for an expert opinion or to grant a stay than judges in Mannheim and Munich. Although ordinary proceedings take the longest at the Düsseldorf regional court, the low likelihood of delays gives it the lowest expected length of proceeding for a major share of patent disputes, which explains the popularity of the Düsseldorf regional court among patent holders.

The results of the study further show that the distance to a particular court has a significant negative effect on court selection. Especially small plaintiffs highly value local access to court.

Valuable insights for the discussion about the design of the unified patent court

The study’s findings are of particular importance for the discussion about the design of the Unified Patent Court (UPC), which is scheduled to commence operations in late 2016. Although the implementation of the UPC has in general been welcomed as a solution to the currently fragmented European patent litigation system, practitioners, scholars, and policy makers disagree how well the UPC will balance the trade-off between uniform judicial decision-making and the provision of local access to court.

In its currently planned form, the UPC will consist of multiple entry courts spatially dispersed over Europe to provide litigants with the option to seek remedies in close proximity – namely, a central division in Paris, regional divisions in London and Munich, and a still unspecified number of local divisions. The provision of multiple entry courts will assure that small patent holders are not disfavoured due to the lack of a nearby court when trying to enforce their patents [though the risk of fragmentation in judicial behaviour will presumably increase with every additional court].

However, the plurality of courts has also raised concerns that plaintiffs may exploit differences in decision-making and case management. While a centralized appeals court at the UPC will promote uniformity in judicial decision-making, judges maintain considerable discretion in the form of procedural options prior to rendering a judgment on the merits, such as whether to transfer the proceeding, stay the proceeding, or decide on validity. Refined procedural rules seem crucial to avoid additional court heterogeneity resulting from different interpretations of statutes by judges [there's a difference between different interpretation of statutes -- which is clearly something to avoid -- and different subjective evaluations of the facts and the weight of parties' arguments in relation to the same interpretation of statutes, which may be impossible to eradicate -- as experience of the harmonised European trade mark law has shown].
Thanks go to Chris Torrero for providing this information.

Tuesday, 25 August 2015

US Patent Law for European Patent Professionals: a new book

US Patent Law for European Patent Professionals, by Audrey Nemeth, is an extremely handy volume for those of us who, being based in Europe, are obliged to keep an eye on developments in the United States on a piecemeal basis but who do not have the luxury of the time to gain a proper appreciation of this complex, important patent culture -- a culture that is so alien and out-of-step in the eyes of those from that small insignificant domain called The Rest of the World.

This is what the publishers say about the book:
This is the first book that has been designed to make communication between European and US patent law professionals more comprehensible.

It explains exactly what is required at every stage of a patent proceeding in the United States, helping European patent professionals understand and act upon the facts. It ensures that both parties have a common understanding of basic US legal terms, and that you – a EU practitioner – will understand the available courses of action for the most common procedural scenarios.

United States patent law, like the European Patent Convention (EPC), is based on a hierarchical code of statutes, regulations and administrative guidelines. However, there are numerous important distinctions, which you’ll need to know if you are looking to successfully protect and leverage intellectual property in the United States.

This highly practical and detailed work is divided into five main parts, covering the basics of US patent law, prosecution of US applications, US patent and post grant proceedings, procedural elements, and advanced topics.
The author, who is Europe-based herself, does not merely describe the framework of the US system and its manner of operation; she leads readers towards the US from the elements of the European system which she can rely on as being familiar to readers, or at least resonating with them. That is not to say that this book is of no value to non-Europeans, since its clear, concise and undramatic description and explanations will benefit anyone who wants an overview of the US law -- especially in its post America Invents Act phase -- and who can set aside a relatively modest amount of time to sit down and read it.  The text is nearly devoid of footnotes, but references to the patent statute (35 USC) are more than adequate for anyone who wants to measure the author's text against the primary legal source.

The focus of the book is principally on the side of patent law that deals with USPTO-facing activities, which can best be compared with EPO-facing activities in Europe; it is not, and does not pretend to be, an infringement litigation manual. But that is its strength and its justification.

Bibliographic data: hardback, xxviii + 215 pages. ISBN 9789041160447. Book's web page here

You can read Audrey Nemeth's blogpost introducing this book on the Kluwer Patent Blog here.

Monday, 24 August 2015

Microsoft v Motorola: did the US Court of Appeals for the Ninth Circuit have jurisdiction?

From our good friend Kevin Winters (trainee solicitor, Shepherd & Wedderburn) comes the following guest item on the jurisdictional dimension of the very lengthy ruling one of the most fascinating and complex pieces of patent litigation to emerge from the United States this year. This is what he writes:
Microsoft v Motorola: did the US Court of Appeals for the Ninth Circuit have jurisdiction?
In Microsoft v Motorola, Inc (here), the United States Court of Appeals for the Ninth Circuit affirmed the decision of the district court that Motorola had breached its obligations to offer reasonable and non-discriminatory (RAND) licences to its patents in good faith.  In addition to the substantive arguments, the Court of Appeals had to decide whether the Ninth Circuit or the Federal Circuit had jurisdiction over the case.  
 The background 
In late 2010 both Motorola and Microsoft sued in the U.S. International Trade Commission (ITC) and the Western District Court of Washington, alleging infringement of smartphone patents.  During this litigation the parties entered into discussions about a cross-licensing agreement that would grant Motorola licences to Microsoft’s smartphones in exchange for licences to any of Motorola’s patents that Microsoft’s products may have been infringing.  
In late October Motorola provided Microsoft with letters offering to license two patent portfolios, 802.11 and H.264 HEP, at 2.25% of the price of the end product incorporating the patents, regardless of the manufacturer: Microsoft was to pay Motorola 2.25% of the sale price of an Xbox game console or of any computer using Microsoft Windows.  Both letters which were identical in material terms represented that the offer was in keeping with Motorola’s reasonable and non-discriminatory (RAND) commitments.  After Microsoft received the letters it filed a diversity action in the Western District of Washington, alleging that Motorola had breached its RAND commitments to the IEEE and ITU.  It alleged that Motorola’s letters constituted a refusal to license Motorola’s standards-essential patents (SEPs) on RAND terms.  The next day Motorola filed suit against Microsoft in an attempt to enjoin Microsoft from using its H.264 patents.  The cases were consolidated in the Western District of Washington. 
Motorola also filed patent-enforcement suits with the ITC, seeking an exclusion order against importing Microsoft’s Xbox products into the USA, and with a German court, seeking an injunction against sales of Microsoft’s H.264-compliant products.  To avoid the economic loss it would suffer if an injunction against the use of Motorola’s two German H.264 patents was granted – Microsoft’s European distribution centre for Windows and Xbox products was in Germany – Microsoft moved its distribution operations to the Netherlands.  It also obtained an anti-suit injunction barring Motorola enforcing any injunction it might obtain in a German court against Microsoft’s use of Motorola’s 1h.264 SEPs until the district court could decide whether an injunction was an appropriate remedy for Motorola to seek.  The Court of Appeals upheld the anti-suit injunction in 2012, while the German court ruled that Motorola was entitled to an injunction. 
In the district court Microsoft altered its complaint to allege that Motorola’s filing of injunctive actions constituted a breach of contract, owing to the fact that the obligation to offer RAND licences to all seekers prohibited Motorola from seeking injunctive relief for violations of patents subject to that obligation.  In response the court granted a joint motion to stay all patent-infringement claims in the consolidated cases until the RAND issues were resolved. 
The district court issued a range of orders that, among other things, recognised that RAND commitments create enforceable obligations between Motorola and the SSO concerned and that Microsoft – as a standard user – could enforce those contracts as third-party beneficiary.  It also issued orders that Motorola’s commitments to the ITU and IEEE required initial offers by Motorola to license its SEPs to be offered in good faith, but needn’t be on RAND terms, provided that a RAND licence is eventually issued.  Further, the court decided that Motorola was not entitled to an injunction on its H.264 or 802.11 patents. 
In November 2012 the district court conducted a bench trial to determine a RAND rate and range for Motorola’s H.264 and 802.11 patents.  It concluded that the RAND royalty for Motorola’s H.264 portfolio was .555 per cent end-product unit, with an upper bound of 16.389 cents per unit, and the 802.11 portfolio was 3.71 cents per unit, with a range of .8 cents to 19.5 cents. 
The case was then the subject of a jury trial on the breach of contract claim.  While Motorola objected, Microsoft introduced the RAND rate’s determined at bench trial, along with testimony that Motorola and its parent company, Google Inc, had previously been investigated for failing to licence patents relating to smartphones, tablets and videogame systems on RAND terms.  Microsoft sought damages in the form of attorneys’ fees, costs in defending the injunction actions that Motorola had raised and in relocating the distribution centre from Germany to the Netherlands.   
In September 2013 the jury returned a verdict in favour of Microsoft for the amount of $14.52 million.  The verdict form asked jurors the general question of whether Motorola “breached its contractual commitment[s]” to the IEEE and ITU and, the specific question, in determining damages, whether Motorola’s “conduct in seeking injunctive relief, apart from Motorola’s general course of conduct,  violated Motorola’s dut[ies] of good faith and fair dealing with respect to Motorola’s contractual commitment[s].”  The jury answered “yes” to all questions unanimously.  
Motorola sought judgement as a matter of law both at the close of evidence and at the close of Microsoft’s case-in-chief.  Having heard the jury’s verdict, the court denied Motorola’s motions concluding that (i) the evidence was enough for the jury reasonably to conclude that Motorola breached its duty of good faith and fair dealing by seeking injunctions against Microsoft, and (ii) the damages award was proper.  Microsoft’s motion for entry of final judgement on the breach of contract jury verdict was granted. 
Motorola appealed the judgement on the breach of contract claim to the Federal Circuit which, on Microsoft’s motion, transferred the appeal to the Court of Appeals for the Ninth Circuit. 
The question of jurisdiction 
Motorola took issue with the decision of the Federal Circuit to transfer the case to the Ninth Circuit.  It argued that the Federal Circuit was the correct forum for the case to be heard, owing to the dispute “arising under” federal patent law.  The Ninth Circuit considered this argument and quickly dispensed with Motorola’s challenge to its jurisdiction. 

The Ninth Circuit pointed out in the first instance that both the interlocutory appeal and the Federal Circuit’s decision to transfer the appeal to the Ninth Circuit were both in-keeping with the ‘law of the case’ doctrine.  This doctrine requires that significant deference is given to prior court decisions that are higher in the court hierarchy, unless there are convincing reasons not to do so: 

“…we may now decline jurisdiction only if “(1) the [earlier] decision[s] w[ere] clearly erroneous; (2) there has been an intervening change in the law; (3) the evidence on remand is substantially different; (4) other changed circumstances exist; or (5) a manifest injustice would otherwise result.”
The court was of the view that Motorola’s argument that the district court “constructively amended” the complaint by holding a bench trial on the RAND rate implicitly invoked the “changed circumstances” exception.  However the court pointed out that, given that it had decided upon jurisdiction of the appeal knowing that the RAND bench trial would take place, and the Federal Circuit’s decision to transfer the case was made after the bench trial, there was no evidence of changed circumstances. 

Furthermore it was pointed out in the court judgement that the fact that the district court decided to hold a trial on the RAND rate, did not affect the application of the law of the case doctrine: the Court of Appeals was aware of the district court’s intention to determine the RAND rate and it owed deference to the Federal Circuit’s decision to transfer the case – a decision that was taken after the district court had determined the RAND rate. 

The court also addressed the argument that there was a “clear error” or “manifest injustice” in the determination of the RAND rate. It pointed out that this did not transform the case so as to require the determination of a substantial question of federal patent law:
“A complaint that alleges breach of contract and seeks damages sounds in contract; its nature “does not change because the contract is a patent license… Even if a court, in interpreting a contract and assessing damages, deems it appropriate to apply the law of patent infringement, that of itself does not change the complaint into one arising under the patent law.”
While the court acknowledged Motorola’s argument that the Federal Circuit had exercised its jurisdiction in some breach-of-contract cases, it pointed out that those involved some determination of patent law.  The case before the Ninth Circuit was a breach of contract action.  

Monday, 17 August 2015

All change for priority at the EPO? A referral is reviewed

EPO: some important issues have been flagged
for close attention and an authoritative ruling
The European patent fraternity has been buzzing with excitement over the referral of some of its most controversial issues involving the priority of patent claims to an Enlarged Board of Appeal of the European Patent Office for what, it is hoped, will be some definitive answers. If nothing else, this referral is likely to press the pause button on a substantial number of ongoing proceedings, as interested parties apply for a stay until such time as the Enlarged Board delivers its ruling.  This clear, helpful guest post from Carpmael & Ransford's David Holland, explains why these questions are being asked, so readers can appreciate what their real-world significance might be.
All change for priority at the EPO? 
A new referral to the EPO’s Enlarged Board means that there could be a new test for partial priority at the EPO. At the very least, the referral invites the Enlarged Board to provide clarification of the current test set out in an earlier Enlarged Board decision G 2/98. The UK Courts regularly refer to G 2/98 when assessing priority, as seen in Nestec v Dualit in which Arnold J refused a request for partial priority on the basis of the test set down in G 2/98.  It therefore seems likely that any changes instituted by the Enlarged Board will be felt not just at the EPO but in the national courts too. 

Partial priority: what is it and what does it do? 
Partial priority allows part of a claim which is contained in a patent application to be entitled to an earlier date, where some but not all of the alternatives covered by the claims appear in the priority document (a provisional filing), a concept permitted by Article 88(2) of the European Patent Convention (EPC). The current test for applying Article 88(2) EPC was set down by the Enlarged Board in G 2/98 and permits partial priority provided “it gives rise to the claiming of a limited number of clearly defined alternatives” (Reasons 6.7).

Eugene Markush
For example, a claim to “compounds A or B” where only compound A appeared in the priority document would be entitled to the earlier date, but in relation to compound A only. The “A or B” scenario is simple and uncontested. The divergence between the EPO decisions that led to this referral occurs where a claim generically covers compound A, e.g. by using a generic term or Markush grouping, but does not “clearly define” compound A as an alternative in the text of the claim. Certain EPO decisions (such as T 1222/11 and T 571/10) are generous and assign partial priority by “conceptually” dividing the claim into the “limited number of clearly defined alternatives” required by G 2/98.  The conflicting strict decisions (such as T 1877/08 and T 476/09) argue that mere “conceptual” division of a claim is not permitted by G 2/98, and that instead the text of the claim must identify those alternatives in order for partial priority to be acknowledged. 

The strict test can seemingly never be satisfied by ranges or other generic terms in a claim, as the text of such terms cannot be divided into a limited number of alternatives, whereas the generous approach may allow these generic terms to be divided up and so awarded partial priority.  For example, a range of “5 to 6” in a priority document that had been broadened to a range of “5 to 7” in the claims of the application would completely lose priority under the strict approach, but have partial priority in the range “5 to 6” under the generous approach. Clearly, these two different approaches have serious implications for patent validity where there is intervening art.

The first four questions: how to assess partial priority? 
The questions referred to the Enlarged Board not only ask the Board to decide between these strict and generous approaches, but also give the Board the option of totally abandoning the G 2/98 test  for partial priority, replacing it with a new test, or providing clarification as to how the test should be applied.

Question 1 asks if it is ever possible to deny priority for subject-matter first correctly disclosed in the priority document, where that subject-matter falls within a generic claim: 
“1. Where a claim of a European patent application or patent encompasses alternative subject-matters by virtue of one or more generic expressions or otherwise (generic "OR"-claim), may entitlement to partial priority be refused under the EPC for that claim in respect of alternative subject-matter disclosed (in an enabling manner) for the first time, directly, or at least implicitly, and unambiguously, in the priority document?”
Question 1 therefore invites the Enlarged Board to remove G 2/98’s “limited number of clearly defined alternatives” test altogether, at least for “generic” claims.  It is unusual for the Enlarged Board to overrule its previous decisions, but this is by no means impossible (e.g. G 1/84 was overruled by G 9/93).

If the Enlarged Board answers “no” to question 1, it would accept that subject-matter first disclosed and enabled in the priority document and encompassed by the claim is entitled to priority regardless of any other considerations. This outcome would end the referral, as the other questions are conditional on an answer of “yes” to question 1. 

Nestec: not just a storm
in a coffee-cup ...
An answer of “no” to question 1 would contrast with the UK Court’s approach in Nestec v Dualit, where Arnold J held that three different housing arrangements covered by the claim were not clearly defined alternatives and so did not qualify for partial priority [2013] EWHC 923 (Pat), paragraph 96.  As a result, Arnold J held that the patent lacked novelty over the publication of the priority document under the UK’s equivalent to Article 54(3) EPC (section 2(3) UK Patents Act), a so-called “poisonous priority” attack. 

If the Enlarged Board considers that the mere disclosure of subject-matter in the priority document (as described in question 1) is not enough to permit partial priority for that part of a generic claim, it has to answer yes to question 1 and so move on to question 2:
2. If the answer is yes, subject to certain conditions, is the proviso "provided that it gives rise to the claiming of a limited number of clearly defined alternative subject-matters" in point 6.7 of G 2/98 to be taken as the legal test for assessing entitlement to partial priority for a generic "OR" claim?
Question 2 therefore asks whether the “limited number of clearly defined alternatives” test from G 2/98 is the correct test to use for generic claims.  If the G 2/98 test is found to be the correct one, then the Enlarged Board will move on to question 3, which asks how to use this test: 
3. If the answer to question 2 is yes, how are the criteria "limited number" and "clearly defined alternative subject matters" to be interpreted and applied?
If the Enlarged Board disagrees with the G 2/98 test, it does not need to consider question 3 but is instead asked to set a new test in question 4:
4. If the answer to question 2 is no, how is entitlement to partial priority to be assessed for a generic "OR"-claim?
Accordingly, in answering these four questions the Enlarged Board should either remove or clarify the existing partial priority test from G 2/98. A review of the decision referring these questions suggests that the referring Board may have formed a view regarding the correct answer to at least the first four questions. 

The questions referred are accompanied by around 60 pages of legal background produced by the referring Board, including a comprehensive review of the EPO’s case law and how this has been interpreted by the UK Courts (including Nestec v Dualit).  The referring Board concludes that, before G 2/98, a more generous approach was accepted.  The Board finds no mention of the G 2/98 test in these earlier decisions and states that they were not explicitly overruled in G 2/98. The Board also notes that one of the reasons underlying the decision in G 2/98 (evidence of the legislative intent from a contemporaneous FICPI Memorandum) may seem to support a more generous approach to partial priority.

These observations, coupled with the sweeping nature of question 1 as asked by the referring Board, perhaps suggest that this referring Board favours total abandonment of the G 2/98 test for partial priority. The Enlarged Board will make its own decision, and it is likely that it will be assisted by a significant number of amicus briefs from interested parties.

The fifth question: toxic divisionals 
The referring Board was faced with the “toxic divisional” attack, as discussed at length on Tufty the Cat’s blog here, an attack closely related to the “poisonous priority” attack in Nestec v Dualit. The fifth and final question ensures that the Enlarged Board must address this attack even if it requires a strict test for partial priority:
5. If an affirmative answer is given to question 1, may subject-matter disclosed in a parent or divisional application of a European patent application be cited as state of the art under Article 54(3) EPC against subject-matter disclosed in the priority document and encompassed as an alternative in a generic "OR"-claim of the said European patent application or of the patent granted thereon?”
Grandpa: one family member
who retained his priority date
In the “toxic divisional” attack, the strict G 2/98 approach to partial priority is applied by an opponent in order to invalidate a priority claim. The opponent then argues that a family member (a parent or divisional of the patent in suit) is novelty destroying under the EPO’s novelty-only prior art provisions (Article 54(3) EPC).  This attack relies on a more specific disclosure in the priority document (often an example) which is entitled to priority, set against a generic claim which is not entitled to priority (often because the claims were broadened when filing the application claiming priority).  As a result, the patent loses priority for the broadened claims, but the more specific disclosure in the family member retains its earlier date and so is citable as novelty-only prior art.  

Nestec v Dualit was not a toxic divisional attack because the novelty citation was the priority document (which had, unusually, been allowed to publish as a conventional patent application), rather than a parent or divisional.  While the toxic divisional attack has yet to be the subject of a UK Court decision, it was apparently accepted by an EPO Technical Board of Appeal in T 1496/11, although the issue is hardly discussed in the written decision leading many to question whether it is good law. 

If the Enlarged Board considers that the disclosure of subject-matter in the priority document (as described in question 1) is enough to permit partial priority for that part of a generic claim, then this would provide a permanent antidote to the “toxic divisional” problem.  If the Enlarged Board takes this route (by answering “no” to question 1) then all toxic divisional attacks must fail, because the generic claim would be always entitled to partial priority for any disclosure that appeared in the priority document.  As a result, no family member (parent or divisional) could contain a novelty-destroying disclosure with an earlier effective date.  This would be a simple solution to years of argument on this “toxic divisional” topic, but could potentially cause other complications.

The referring Board clearly appreciates the importance of comprehensively addressing the “toxic divisional” problem, because if the Enlarged Board either confirms and clarifies the G 2/98 test (question 3), or creates a new test (question 4), it must then answer question 5.  Question 5 asks whether a family member (parent or divisional) can ever be novelty-only prior art, regardless of partial priority.  There are a number of underlying legal and public policy points that have been used by patentees to argue that family members are never citeable for novelty against each other. It will therefore be fascinating to see how the Enlarged Board chooses to clarify the law in this area, if such clarification is still required following the answer to question 1.

Time for clarity -- and for dispelling spectres?
The answers to the referred questions will rewrite, or at least clarify, the concept of partial priority. It seems likely that patentees with ongoing actions in which partial priority is pleaded may request a stay until the referred questions have been answered.  If allowed, any stay would last for at least a year, as it is unlikely that the Enlarged Board will issue a decision for quite some time.   

No matter how the Enlarged Board answers the first four questions, it will have to address the “toxic divisional” problem head on.  In light of the increasing number of “toxic divisional” attacks following their apparent validation in T 1496/11, many will hope that the Enlarged Board both clarifies the law regarding partial priority and conclusively dispels the spectre of “toxic divisionals”.

This article is based on a client practice note available from Carpmaels & Ransford’s website here and first publicised on twitter by @CRPharmaIP.

Patent Litigation in China: a new edition

Patent Litigation in China, by Douglas Clark, is the second edition of this refreshingly readable and accessible paperback published from the US desk of Oxford University Press.  The author, a member of Hogan Lovell's China practice team for some two decades before heading off to the Hong Kong Bar, has an impressive array of experience under his belt, having litigated more than 100 pieces of patent litigation in China -- this representing just 5% of his total IP case load.

The text itself is lean, clean and unornamented, which makes it easy to navigate; it also spells out the problems facing litigants in China (whether foreign or domestic) in no uncertain terms. The problems are not limited to patent law, and include the difficulties faced in obtaining evidence and then having to explain in the clearest possible terms the significance of that evidence.

The publishers have this to say about the new edition:
The rise of China's economy has led to a substantial increase in disputes involving intellectual property rights, including patents. Not only are foreign companies suing domestic companies and domestic companies suing foreign companies, but patent disputes between foreign companies are also being litigated in the Chinese courts.

Patent Litigation in China, by Douglas Clark, provides U.S. and other non-Chinese practitioners with an overview of the patent litigation system in China. Strategic commentary is provided to enable those contemplating or involved in patent litigation in China to better comprehend the risks and challenges they face, as well as to ensure better decision-making by those responsible for bringing or defending patent actions. The book covers the tests for patentability grounds for invalidating patents before focusing on evidence gathering, litigation strategy and procedure, as well as considering defenses and remedies. The key differences between the Chinese, U.S. and other more mature patent systems are highlighted throughout the book.
The author tackles all the conventional aspects of patent law that one would expect, plus the relevant anti-monopoly rules and a separate section on patent litigation in Hong Kong. Appendices include Chinese-to-English translations of the Patent Law of the People's Republic of China, plus implementing regulations, judicial interpretations and various other significant items -- readers should however appreciate that the appendices occupy some 150 pages of the volume.

Bibliographic details: paperback, xxxi + 359 pages. ISBN 978-0-19-872444-5. Price £147.50; also available as an e-book. Book's website here.

Friday, 14 August 2015

PTAB Decisions Add Some Clarity to Estoppel in AIA Post-Grant Proceedings

This guest post is contributed by Kristin L. Murphy, a Shareholder at Brooks Kushman PC in Southfield, Michigan. Kristin's bio is available here
The Leahy-Smith America Invents Act (“AIA”) created three new mechanisms for members of the public, including competitors, to challenge the validity of an issued U.S. Patent. As of June 30, 2015, 3,160 petitions for inter partes review (“IPR”), 362 petitions for covered business method patent (“CBM”) review, and 10 petitions for post-grant review had been filed with the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (“PTAB”). Although AIA post-grant proceedings have been available since September 16, 2012, several procedural issues remain unclear, and the U.S. Court of Appeals for the Federal Circuit has not yet had the opportunity to consider many of the USPTO’s practices in conducting AIA trials.
Recently, the PTAB issued two decisions that cast some light on one thorny AIA trial issue: the breadth of the preclusive effect of AIA trial proceedings through the AIA’s estoppel provision, 35 U.S.C. § 325(e)(1), and related Patent Rule, 37 C.F.R. § 42.73(a).
Estoppel Effects Only Patent Claims For Which Review Is Granted
In Westlake Services, LLC v. Credit Acceptance Corp., Case No. CBM2014-00176, the PTAB considered a petitioner’s challenge to U.S. Patent No. 6,950,807, titled “System and method for providing financing.” The ‘807 patent claims methods for facilitating the sale of goods on credit, such as automobiles, by using information about the seller’s current inventory and a prospective customer’s credit worthiness to provide financing scenarios for each product available for sale.
The petitioner originally filed a petition for CBM review for all 42 claims of the ‘807 patent. The PTAB granted the petition for some claims, but denied it with respect to others. Subsequently, after the Supreme Court’s latest decision on patent eligibility of computer-implemented methods, the petitioner filed a second petition challenging the ‘807 patent. The PTAB granted the petition for CBM review as to the claims for which it did not previously grant review in the first petition. See, e.g., Alice Corp. Pty. Ltd v. CLS Bank Int’l, 134 S. Ct 2347 (2014). Subsequently, the PTAB issued a final decision on the first petition, ruling that the claims at issue in the trial were unpatentable.
The patent owner then moved the PTAB to find that petitioner’s challenges to the remaining ‘807 patent claims in the second proceedings were barred by the AIA’s estoppel provision, 35 U.S.C. § 325(e)(1), which requires that:
The petitioner in a post-grant review of a claim in a patent under this chapter that results in a final written decision under section 328(a), or the real party in interest or privy of the petitioner, may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that post-grant review.
The patent owner argued that since the initial petition resulted in a final decision, the estoppel applied to all issues that the petitioner raised or could have raised in that proceeding, even though the petition was not granted as to some claims.
In an opinion listed as a “Representative Decision” on the USPTO website, the PTAB denied the motion and refused to apply estoppel so broadly. The PTAB ruled that the estoppel required by § 325(e)(1) must be applied on a “claim-by-claim” basis, and that it only attaches to the claims in a petition that result in a final decision, not claims merely included in a petition when review is not granted as to those claims. Among other things, the USPTO’s comments to the proposed revised Patent Rules implementing AIA post-grant proceedings included the observation that a “determination not to institute an inter partes review, post-grant review, or covered business method patent review is not a final written decision within the meaning of 35 U.S.C. § 318(a), as amended, and 35 U.S.C. § 328(a), and thereby does not trigger the estoppel provisions under . . . 35 U.S.C. § 325(e).” 77 Fed. Reg. 48680, 48703-04 (Aug. 14, 2012).
The PTAB also declined to consider whether the second petition challenging the ‘807 patent should be barred under 35 U.S.C. § 325(d), which proscribes redundant petitions. The PTAB stated that it had considered the effect of § 315(d) when it originally granted the second petition as to the claims not included in its first decision to institute review, and determined that the provision did not bar the second petition.
The complete decision is available here.
Estoppel From Prior Proceeding Limited To Claims, Not Defenses
In a second decision involving an IPR proceeding, the PTAB ruled that estoppel does not apply to issues in a prior post-grant proceeding that were defenses, not grounds for invalidating a challenged patent. Arris Group, Inc. v. C-Cation Techs., LLC, Case No. IPR2015-00635 (designated “Informative Decision”).
In Arris Group, the patent owner sought discovery in an attempt to establish that the petitioner was in privy with a petitioner in an earlier IPR proceeding challenging the same patent. The prior IPR concluded with the patent owner expressly disclaiming one claim and the PTAB entering an adverse judgment. If the petitioner in the later IPR proceeding was in privity with the petitioner in the earlier proceeding, the second petition would be untimely under 35 U.S.C. § 315(b).
The petitioner argued that discovery would not lead to useful information because the patent owner was estopped from raising privity as a defense. The patent owner relied on 37 C.F.R. § 42.73(a), which provides that, “[a] judgment, except in the case of a termination, disposes of all issues that were, or by motion reasonably could have been, raised and decided.” The petitioner argued that rule precluded the patent owner from raising privity as a defense.
The PTAB rejected the patent owner’s argument and allowed the requested discovery. The panel held that, “§ 42.73(a) relates to the scope of a judgment, not its preclusive effect with regard to other proceedings. In other words, the rule provides that a judgment disposes of all issues in a particular proceeding that were, or reasonably could have been, raised and decided. Petitioner cites no authority for its contention that the adverse judgment entered in [the earlier IPR proceeding] with respect to claim 14 has preclusive effect beyond that proceeding.”
The PTAB also ruled that the privity argument was not barred by res judicata, since a defense is not a “claim” that can be barred under that doctrine. See Foster v. Hallco Mfg. Co., 947 F.2d 469, 478 (Fed. Cir. 1991) (contention that asserted patent was invalid is a defense, not a “claim” subject to claim preclusion).
The full PTAB opinion is available here.

Tuesday, 11 August 2015

Aldgate for London's Unified Patent Court: what they say ...

The British patent profession seems to be welcoming the news that the London division of the Unified Patent Court will be located in Aldgate, on the 8th floor of Aldgate Tower. Here are the first two swift reactions:

Andrea Brewster, President of the Chartered Institute of Patent Attorneys (CIPA) said:
“We are confident that the court will be a success and will help to make the UK’s capital the centre for all patent-related legal activity in chemical and pharmaceutical innovation. The Government is working assiduously to bring the UPC into existence. The presence of part of the central division in London allows the UK to maintain its strong position as a centre of excellence for patent litigation. The UK can use the Court’s presence to build on London’s existing reputation and turn the capital into a global hub for intellectual property law.”
For the IPKat weblog, Annsley the AmeriKat chimed in:
Although this location is sure to make some Holborn-based litigators, including possibly some potential judges, a bit miffed, the AmeriKat considers that this is actually a good compromise when compared to the prospect of a longer trek to Building 1000 in the Docklands. There was also some sentiment that the location needed to represent the Best of British in order to showcase to court users that the UK was taking the location seriously (i.e., "Please, dear client, admire this beautiful Georgian architecture and gold-plated eagle motif.").
Annsley's post contains the statement that the new building is a 55 minute drive from Heathrow Airport.  This is probably not the Heathrow Airport, where aeroplanes take off and land on a regular basis, but a pub of the same name that's about 600 metres from Aldgate Tower: never, never take your car into town, even if you don't need to park it ...

Sunday, 9 August 2015

Transitions in European Patent Law and the new patent package: a new book

Here's a new book that might appeal to PatLit readers.  This blogger has yet to see it (though he has just asked for a copy), but it looks both topical and significant, in that it is a serious academic perspective on an issue that has been well-nigh monopolised by patent practitioners (to be fair, the German practitioners can hold their own in academic company, as can a fair number of their colleagues in other jurisdictions).

The book in question is Transitions in European Patent Law. Influences of the Unitary Patent Package by Rosa Maria Ballardini, Marcus Norrgård and Niklas Bruun.  It's published by Wolters Kluwer, who have this to say about it:
New complex technological sectors like software and biotechnology pose unprecedented challenges for patent law. In Europe, this situation has engendered patent law reforms which, after several years of struggling, seem to have finally concretized in the Agreement on the Unitary Patent and the Unified Patent Court signed by twenty-five EU Member States in February 2013 (the so-called EU Patent Package). In this ground-breaking book – derived from the work of the highly respected and penetrating PatLim project in Finland [you can read all about PatLim here] – nineteen prominent experts explore issues arising in the context of the emerging European patent system. The book analyses how substantive and procedural patent law rules in highly complex technologies interact within each other’s frameworks and within the overall IP framework, as well as within the frameworks of other intellectual property rights and other fields of law, such as competition law. Topics and issues include the following:
* judicial independence of specialized courts;
* the concept of dynamic patent governance;
* legal certainty in patent law;
* the inventive step and patent policy;
* prior rights, conflicting applications, and secret prior art;
* patent interpretation and the doctrine of equivalents;
* preliminary injunctions in the Unified Patent Court; and
* misuse of patent application procedures.
There is also a valuable comparison with the most recent transatlantic patent reforms, such as the America Invents Act of 2011. This is the first book to put the current evolution of European patent law in legal, economic, historical, and technological perspectives. As such, this important collection provides a rich understanding of the ways that patent law reacts to and provokes complex technological phenomena. The controversial issues raised and solutions and interpretations offered will be well worth the study of patent professionals within and beyond the European patent ecosystem.
At £118 it's not even dear for a book on patents these days. Further particulars are available from Wolters Kluwer here.