Thursday, 28 October 2010

Killed by its own bullet

If you claim patent infringement and defendant’s product was prior to your patent then…

I read in here that “a federal judge has dismissed a patent infringement suit brought by Teva Pharmaceuticals after finding that its claims of infringing product formulations in the cholesterol drug Crestor were "conceived of and reduced to practice" by AstraZeneca Pharmaceuticals prior to Teva's patent”.

Teva sued AstraZeneca for patent infringement, alleging that CRESTOR® prescription drug products infringe US Patent RE39,502 here.

As we read in the decision here, AstraZeneca argued that “if the accused products infringe, as Teva alleges, then the asserted ‘502 patent claims are invalid because AstraZeneca “made,” i.e., conceived of and reduced to practice, the drug formulations that are now sold as CRESTOR® before Teva invented the subject matter of the ‘502 patent, and because AstraZeneca has not abandoned, suppressed, or concealed those formulations”.

The Judge, Mr. William H. John, considered undisputed that:

“(1) AstraZeneca made the accused product formulations before Teva invented the subject matter of the asserted claims, (2) appreciated that the formulations were stable, and (3) did not abandon, suppress, or conceal the formulations”.

AstraZeneca also asserted counterclaims for a declaratory judgment of invalidity of the RE39,502 patent, due to prior invention.

What evidence was used? Teva’s own words.

The Judge agrees with AstraZeneca that “it may satisfy its burden to show that its earlier-made CRESTOR® products meet all the limitations of the asserted claims of Teva’s ‘502 patent by conceding, for purposes of this summary judgment motion only, Teva’s allegations of infringement”.

Thus, the bullet turned all around and "killed" the plaintiff. Mr. John's conclusion:

"AstraZeneca has presented clear, convincing, and undisputed evidence with which a reasonable jury could not disagree that it conceived and reduced to practice an embodiment meeting the limitations of the asserted claims of Teva’s ‘502 patent before Teva did, and that it did not abandon, suppress, or conceal its invention. There is no genuine issue of a material fact. Accordingly, the court will grant AstraZeneca’s motion for summary judgment of invalidity under § 102(g)(2)".

Tuesday, 26 October 2010

To PCC or not to PCC? Here's a helpful chart

Published here in the current issue of the UK Intellectual Property Office's IP Insight, in "IP enforcement in UK: Cheaper and simpler new procedure", but first published here as one of its IP Updates, is a very helpful chart prepared by international IP firm Marks & Clerk.  PatLit thanks Graham Burnett-Hall for letting us reproduce it for the benefit of our readers.

Patents County CourtHigh Court
(including Patents Court)
Types of IPR handledAllAll
Types of claimGenerally suited to simpler, lower value claims up to £500,000 in damages valueMore complex, higher value claims
Statements of caseMust contain the facts and detailed arguments on which the parties relyRelatively brief: must contain the facts on which the parties rely
Extensions to time limits for filing statements of caseOnly if allowed by the courtMay be made by consent or by order of the court
Standard disclosure of relevant documentsNoYes (but scope of disclosure limited in patent cases)
Specific disclosure of documentsOnly if ordered by the court at the case management conferenceIf ordered following an application to the court
Fact evidenceOnly if ordered by the court at the case management conferenceYes
Expert evidenceOnly if ordered by the court at the case management conferenceGenerally permitted
ExperimentsOnly if ordered by the court at the case management conferenceGenerally permitted in relevant cases
Written submissions (skeleton arguments) prior to trialOnly if ordered by the court at the case management conferenceYes
Cross examination at trialOnly if ordered by the court at the case management conferenceYes
Trial length1-2 daysTypically 2-15 days: often 4-5 days or more for patent cases
Costs recoveryCapped at £50,000 for cases determining liabilityGenerally the loser pays the winner’s costs, typically around 70% of amount spent - no cap

The PCC Page, no.3: The biter bitten? – Watching your pre-action steps

In this, the third in the series of PCC Pages, the Chartered Institute of Patent Attorneys (CIPA) takes us through the next stage when contemplating using the Patents County Court for England and Wales for what are promised to be cheaper, easier infringement proceedings.  Here CIPA President Alasdair Poore warns of problems even at the pre-action stage, suggesting how best to avoid them.
Cautious Co. (which we introduced last week, being a company that is anxious to get even with a competitor in the PCC) now wants to throw caution to the wind. “I really want to get a move on. Now write and clobber them! No need to worry about a costly case.” You understand that these are instructions.

A word of caution?

There are of course ethical considerations about just writing a letter “clobbering them”. There is also all that guidance in the CPR about pre-action behaviour (paragraph 7.1(1) and Annex A (paragraph 2) of the Practice Direction (Pre-Action Conduct)), which means that normally you are expected to approach the other party and tell them that you are about to clobber them (with appropriate details). If you can certify that you have taken that step then the time limit allowed for a defence is reduced from 70 days to 42 days (CPR 63.22(2) and (3)). Incidentally that gives rise to an interesting question: since the client will not usually know whether you have complied with these provisions, it seems you will also have to add your name to the statement of case to confirm this – the statement of truth must be signed by someone “with knowledge of the facts alleged” (CPR 63.21).

You may even be able to get come further guidance on the sort of things which might be said in your pre-action letter from the draft Code which was prepared some time ago, but shelved when the Ministry of Justice concluded that pre-action protocols were proliferating.

So is that what you should do?

Less haste, more speed

As an IP practitioner you will already be aware of the problem with groundless threats under Patents Act 1977, s 70, and Trade Marks Act 1994, s 21, but being 100% confident of your client’s case you feel this is one case where writing a fierce demanding letter would be perfectly justified.

This is where things might go wrong. The new PCC rules make forum-shopping a reality. If you do send a letter which is threatening, or indeed a letter which might arguably be construed as threatening, that might easily form a basis on which the competitor could bring proceedings against your client (or you) IN THE HIGH COURT. You can try to step within the bounds of the section 70(4) and (5) of the Patents Act, or 21(1)(a) to (c) of the Trade Marks Act, but that is always a potentially risky exercise (as in Prince Plc v Prince Sports Group [1998] FSR 21 (“the person making such communication wishes to take advantage of one or more of the excepting paragraphs of section 21(1), it is incumbent upon him to indicate this in terms”) and for example very recently Grimme Landmaschinenfabrik Gmbh & Co. KG v Derek Scott (T/A Scotts Potato Machinery, here: see para 170 etc.). And it is not enough to have a defence, because the threatened party can still bring the action.

The manufacturer or importer exclusion (s 70(4)(b)) for patent threats is now much clearer; or possibly you can rely on genuine without prejudice correspondence (Best Buy Co Inc v Worldwide Sales Corp [2010] EWHC 1666), but that path is littered with problems and probably will not satisfy CPR 63.22(2).

Or you can always apply to have the claim transferred out of the High Court after the event, and even argue that the infringer should have complied with the preaction procedure before bringing the threats action!   But will your client be pleased with that?

A bite repellant?

Why not just issue proceedings? After all you may not be saving time by writing first, as you have to provide a reasonable time for reply. And there is a reasonable excuse for not complying with the requirements of the pre-action procedure: Annex A, 2.2(3) and 3.6), noted in the draft Code above (para 2.2). You probably don’t have to do so if there is a risk of a threats action. But where does that leave you if you think that the competitor is really a manufacturer or importer? Comments please.

Monday, 25 October 2010

Google sued for patent infringement (Street View)

Last week CHRISTIE, PARKER & HALE stated that they have sued Google on behalf of their client Vederi LLC, for patent infringement based on Google street view (here). They tell us that “the complaint alleges that Google's Street View product infringes four of Vederi's patents by allowing a user to visually navigate streets within a geographic area”.

The history:
“Enrico Di Bernardo and Luis Goncalves, the founders of Vederi, LLC, met at Caltech while pursuing doctoral degrees. In 2000, when Luis was looking for a new apartment and wanted to know about different neighborhoods, they conceived of the idea to build a system to let Internet users look at street-level views of neighborhoods. They envisioned that their service could be syndicated in a number of online properties, including travel sites, business listings, real-estate listings, map and directions sites. That July, Luis and Enrico drove around Pasadena in Enrico's personal car, with a camera mounted on top of the car, collecting images and corresponding GPS coordinates for their first system, the ScoutTool, later renamed the StreetBrowser. The StreetBrowser system, that lets Internet visitors look at panoramas of streets and visually navigate around a neighborhood, was hosted on the website of the City of Pasadena for several years in the early 2000s. Vederi's first provisional patent application for its system was filed in October 2000” [I’m sure the patent was filed before hosting the system in the Internet]
The invention:

First patent application was filed on October 6, 2000. Apparently the patent wasn’t granted, but benefits were claimed in Patent no. 6,895,126 (here). Among other things it claims:
“12. A method for creating a composite image database of a particular geographic area, the method comprising: recording a plurality of images of a series of objects using an image recording device moving along a path; obtaining position information of the image recording device as the image recording device moves along the path; associating the position information with the plurality of images; processing image data acquired from the plurality of images to create a composite image depicting a view of the series of objects from a particular location; partitioning the path into a plurality of discrete segments; associating the composite image to one of the discrete segments; and storing the composite image and association information in the composite image database”.
“28. A system for creating a composite image of a series of objects, the system comprising: an image recording device moving along a path and recording a plurality of images of the objects; a means for receiving position information of the image recording device as the image recording device moves along the path; and a processor receiving the plurality of images and position information, the processor being operable to execute program instructions including: associating the position information with the plurality of images; and processing image data acquired from the plurality of images to create a composite image representing the object, wherein the composite image simulates a view of the object from a particular location that is situated off of the path of the image recording device”.
I wonder why it has taken more than three years to file the action. Street View was launched on May 25, 2007 (here) and Patent no. 6,895,126 was granted on May 17, 2005. Is this a new chapter of “living in strange times”? (here). Time will tell.

Sunday, 24 October 2010

When an expert witness casts aspersions on sufficiency: national threat to European patent

A reader who practises in Italy has written to PatLit with the following question:
"Our client owns a European patent, on which basis he sued another company for infringement, counterfeiting and unfair competition since that company manufactured and sold an invention carrying features deemed equivalent to the claims contained in our client's patent. Our client first filed an application to the court, asking for the seizure of the counterfeiter's invention as a urgent protective order, so as not to let it be further traded, and alleging pecuniary loss. 
After the seizure was ordered, ordinary civil proceedings were initiated with our client filing a claim for counterfeiting and unfair competition plus damages. The opponent/respondent (counterfeiter) inter alia challenged the validity of the patent.  Accordingly an assessment by an expert witness was ordered by the judge. This assessment eventually stated that the patent was not sufficiently described to enable the person skilled of the art to use it.  In consequence of this we risk cancellation of the patent by the Italian judge even though the EPO granted it.
Here's my question: under European IP law and practice, is it somehow possible to override an expert witness in order to preserve the European patent's validity as stated by the EPO when the patent was granted?"
I don't know very much about the legal system in Italy, but I had assumed that, in Italy as elsewhere in the countries covered by the European Patent Convention, the European patent once granted is no more than a bunch of independent national patents which may be upheld or annulled by patents courts in each jurisdiction on the basis of the evidence placed before them.  I think that the real question is a tactical one: what is the best approach to take with regard to the validity of a European patent overall, when its validity is challenged in one jurisdiction (in this case, Italy). In any event,  thoughts and comments from readers would be appreciated.

Wednesday, 20 October 2010

PCC Update 1: new regime, new judge, old case, old rules

Judge Colin Birss QC, the recently-appointed judge for the recently-revamped Patents County Court, gave an instructive judgment for prospective PCC litigants and their professional representatives today in Technical Fibre Products Ltd & Anor v Bell & Ors [2010] EWPCC 011. The dispute revolves round a patent application which the claimants say belongs to them, not to their former employee and his associates. The claimants also allege breaches of confidence, contract and fiduciary duty, passing off and infringement of database right.

The action began in the High Court in October 2009 but was transferred to the Patents County Court in February 2010. Today's ruling is the outcome of a rather belated Case Management Conference (CMC), which was put off while the parties tried to negotiate a settlement but only succeeded in pruning the outstanding issues a bit. Said Judge Birss, in businesslike fashion: "... the court's task now is to get on and give directions to bring the case to an orderly trial".  Having done so, he then focused, at paragraphs 5 to 11, on something completely different: the new Patents County Court procedures [PatLit has provided the emphasis in bold]:
"The new Patents County Court procedures came into force on 1 October 2010. They consist of new CPR [for non-England and Wales readers and first-time visitors to PatLit, that's the Civil Procedure Rules] Pt 45.41 – Pt 45.43 and corresponding section 25C of the Costs Practice Direction; CPR Pt 63, Section V Patents County Court, consisting of CPR Pt 63.17 – 63.26; and Section V of the Practice Direction 63 – Intellectual Property Claims paragraphs 27 – 31.
As a preliminary matter the parties raised the question of whether the new procedural provisions applied to this case. Submissions were made on the point in the parties respective skeleton arguments and I am very grateful to Mr Geoffrey Pritchard on behalf of the Defendants and Ms Anna Edward-Stuart on behalf of the Claimants for their assistance on the matter. In my judgment the new procedural rules do not apply to this case. However since both sides made the same submission (that the new rules did not apply) it must be made clear that I have not heard full argument on the point between parties making rival submissions. Nevertheless having regard to the practical importance of the matter for practitioners in this Court, the parties invited me to provide my reasons in summary form in this judgment. That seems to me to be a helpful course.
In brief, my reasons are as follows:
i) Although there are no express transitional provisions forming part of the new rules, nothing in the provisions bringing the new rules into effect states expressly that they should apply to existing cases and if so how.
ii) The new Patents County Court procedures are intended to be radically different from the familiar rules of procedure under the CPR. The rules address statements of case, statements of truth, case management, conduct of trials, costs and other matters. The new procedures consist of a package of measures which interact with each other and were intended to operate as such. To best achieve that objective the rules need to be applied as a whole. The rules cannot be applied as a whole to an existing case. The position of a case started in the High Court and transferred into the Patents County Court after the new rules have come into force is not before me and may raise different considerations.
iii) Litigation which had been started in the Patents County Court before the 1st October 2010 was commenced under a regime in which costs were dealt with in the familiar way. There is a general presumption against retrospective legislation (16(1) of the Interpretation Act 1978) which applies to subordinate legislation as much as to primary legislation (Nicholls v Greenwich [2003] EWCA Civ 416).
If the new rules do apply to existing cases in the Patents County Court, it seems to me strange results would ensue. The new provisions on costs in CPR Pt 45.41 – 45.43 provide for a ceiling on the overall costs of a case (subject to certain irrelevant exceptions). To impose the costs ceiling on costs incurred by parties in litigation when, at the time they were incurred, the ceiling did not apply seems to me to be potentially unfair, retrospective and likely to lead to injustice. One could conceive of an argument for saying that the costs rules could apply to all costs incurred after 1st October 2010 in all cases in the Patents County Court list as at that date but the risk of injustice in that course seems to me to remain. Although the table of scale costs includes a breakdown for different steps and stages of a claim (section 25C of the Costs Practice Direction (CPR Pt 45)), the scale system operates as a limit on the total costs at the determination of the claim (CPR Pt 45.42(1)). If the costs incurred prior to 1st October 2010 and assessed in the normal way produce a figure above the ceiling (£50,000) where does that leave the ceiling?
Accordingly in my judgment the new procedural rules set out in paragraph 5 above apply to cases commencing in the Patents County Court on or after 1st October 2010. The new procedural rules set out in paragraph 5 above do not apply to cases which were already pending in the Patents County Court before 1st October 2010.
So far in this judgment I have referred to the new procedural rules set out in paragraph 5 above. That does not include the new provisions on transfer in Practice Direction 30 which supplements CPR Pt 30. These new provisions (new paragraphs 9.1 and 9.2 of the Practice Direction) seem to me self evidently to apply from 1st October 2010 to all cases whenever they commenced.
I have not addressed the application of the rules to cases transferred into the Patents County Court after 1st October 2010 by the High Court and since that is not this case I will say only the following. There is no doubt that in general terms the new rules apply to cases transferred from the High Court into the Patents County Court as much as to cases commenced in this Court. Equally it seems to me that a Court transferring a case into the Patents County Court after 1st October 2010 is likely to do so in the expectation that the new procedures (in some form, perhaps suitably modified as appropriate) will apply to such a case. These issues should be dealt with on a case by case basis as and when they arise in future".

Tuesday, 19 October 2010

The PCC Page, no.2: "PCC Tips: Is the PCC my cup of tea?"

In this, the second in the series of regular Tuesday features on the new regime for litigation before the recently revamped Patents County Court (PCC) for England and Wales, Chartered Institute of Patent Attorneys (CIPA) President Alasdair Poore explains that the PCC is not suitable for every action -- it is necessary to satisfy yourself that it matches your needs:
"I just read last week's notes about the PCC. A competitor has been getting my goat for some time now but all this litigation business just looked like too much time and money. Is the PCC the place for me?"
You’re not an agony aunt. This is an established client, Cautious Co., and this in your moment to impress. Otherwise, what point is there in all these applications you file? You had better be one step ahead of Cautious reading this column.

Is the PCC the court for you?

The PCC sounds like the suitable forum. Cautious has been deterred from bringing proceedings because of the time and cost – of course, that could be true of many clients, but it’s a good start.

A lot of thought went into what should go into the provisions laying down what was suitable for the High Court and what was suitable for the County Court. And a lot of thought concluded that the less said, the better – at least in the rules. The Intellectual Property County Court Guide will contain more rules, but at present you are flying by the seat of your pants.
• Key is access to justice for small and medium sized enterprises – if it were not for this court, the case would not be going anywhere. That sounds just the ticket, but a bit of critical questioning is in order;
• Second – proportionality: there are lots of cases where the cost of a High Court action would simply swamp the benefits of bringing the case or, if they do not swamp them, at least take a hefty bite out of them. Again this sounds fine, but you need to learn how much is really at stake -- and maybe how complicated the case could be. The aim is that cases in the PCC can be heard in a day or two (with the very streamlined procedure), but some cases may be just too complicated: lengthy expert evidence, essential detailed experiments or difficult evidence of prior use. But proportionality should still rule here. If all that difficult evidence makes it pointless fighting, then a pretty cut-down approach seems fully justified.
• Are the costs rules an issue? Can you realistically take the steps within the costs bands listed (for which click here and scroll down)? If you cannot, is the client happy to bear the brunt? This is difficult, although there will be guidance in the Guide. Even on statements of case this could be difficult – full but concise, no tomes. Perhaps patent attorneys may be in the best position to assess, with their experience of EPO proceedings.
• And damages? Currently there is no limit on recoverable damages – Parliament could not find time yet. However it may still be a factor in relation to proportionality in deciding whether it is a suitable case to be heard in the PCC.
Other factors

Insurance: Don’t forget some other factors: the cap on costs includes any insurance premium, which might limit the enthusiasm of some “after-the-event insurers” for this forum. You had better ask them first, something that you must surely have had in mind! Sources tell me that very few IP disputes get considered for after-the-event insurance although it might be negligent not to. More on that later.

Terrible transfers: what about the possibility that a case is transferred out of the PCC? More on that in later installments, after looking at pre-action activities, forum-shopping and ADR. But you can be pretty sure that the Courts will treat applications rapidly, robustly and skeptically.

AND NOW FOR AN ADVANCE WARNING: On 24 November 2010, at 5.30pm for 6pm, the AIPPI UK Group is hosting a talk. "The Patents County Court is changing". This is "a first dispatch from the coal face by its new judge, His Honour Judge Birss Q.C.". The venue is the London office of Baker & McKenzie LLP. Registration details are not yet available but PatLit will pop them into the side bar when they are known.

Friday, 15 October 2010

So which non-UK patent jurisdictions are "leading"?

This morning the Court of Appeal gave judgment in Grimme Landmaschinenfabrik GmbH & Co. KG v Derek Scott (trading as Scotts Potato Machinery) [2010] EWCA 1110 Civ, an appeal against the decision of Mr Justice Floyd at [2009] EWHC 2691 (Pat), noted briefly here. According to Graham Burnett-Hall (Marks & Clerk Solicitors LLP, representing Grimme in these proceedings)
there's some interesting analysis of contributory patent infringement under s.60(2) [of the Patents Act 1977], which also considers German case law on this point, plus an observation (para 80) that the UK courts should in the interests of uniformity seek to follow authoritative rulings of other leading patent jurisdictions unless the court "is convinced that the reasoning of a court in another member state is erroneous".
PatLit wonders how observations of this nature are viewed by courts and litigants in other jurisdictions. In particular, is "leading patent jurisdictions" a coded term for "Germany" alone? Does it include the Netherlands? Which economically significant countries does the term seek to exclude? Readers' opinions are invited.

Thursday, 14 October 2010

Evidence "not a question of principle", so no appeal

In an earlier post, PatLit reported on Molnlycke Health Care v BSN Medical Ltd [2010] EWCA Civ 988, in which the Court of Appeal for England and Wales dismissed an appeal against a refusal to stay UK proceedings on the basis that a Swedish court was already seised of the matter in dispute. Jacob LJ said then that, when the matter first came before his court, it was not entirely clear from the papers whether the Swedish court was seised with the same issue as that in the English proceedings. The court approached the Swedish judge, who responded "immediately and helpfully in that spirit of cooperation between European judges which could not have existed even 20 years ago". The immediate and helpful response was that she was seised of different issues. The UK action would not therefore be stayed.

BSN then sought permission from the Court of Appeal to lodge a further appeal to the Supreme Court. Jacob LJ (giving the Judgment of the Court) has refused that request. As Jacob LJ explained:
"1. The Court has considered a number of written representations from the solicitors for BSN seeking permission to appeal to the Supreme Court from our decision of 30th July 2010. No application for such permission was made at the time we gave that decision, though it obviously could have been.
2. The case turned on whether the Swedish Court was first seized of the issue of whether or not the Mölnlycke patent claim covered the BSN actual products. We asked the Swedish Judge whether that was in issue and got a clear answer – not “as the case stands now.”
3. The matter relied upon for permission to appeal concerns communications between the Swedish Judge and the lawyers for BSN subsequent to our decision and a subsequent decision in Germany. The suggestion is that these materials show that the Swedish court may be seized of the issue.
4. Whether it is already so seized turns entirely on the evidence. As the evidence stood before us it was clearly not so seized. No question of principle - still less one of general importance – arises.
5. For that reason we refuse permission to appeal to the Supreme Court".

Interim and protective measures in Italy: subtle shifts ahead in patent practice

"Code of Industrial Property reform simplifies protection measures", by Cesare Galli (IP Law Galli, Italy), gives an account of the recent improvements to that country's Code of Industrial Property.  While the reforms affect all areas of IP, this article makes some patent-specific comments:
* "Applications for interim measures ... are promptly examined. ... Parties seeking measures (in particular, description orders) to protect patents must take account of the time needed for expert consideration and the judge's review of the evidence, but such recourse is usually available within a few months [This seems a very long time and appears to suggest that more attention is paid to issues within the purview of an expert -- i.e. technical issues relating to the content of patent claims and validity -- rather than on the current and likely future positions of the parties in the event that provisional relief is granted or refused]".
* "... such measures may be jointly sought. .. This will allow IP rights owners and their professional advisers to develop new and more effective protection strategies [So presumably a patent troll or university R&D institute might have little chance of obtaining interim injunctive relief when it makes and sells nothing itself, while an application for such relief made with a manufacturing licensee will have a better prospect of success]. A new procedural instrument has been introduced. Preventive expertise is useful in cases where a patent owner is unsure about a possible infringement and needs a prompt technical assessment of the issues of validity and infringement, which can then be used in a subsequent legal action or to reach settlement more quickly".
* " ... In order to address ... uncertainty ... the reform clearly codifies the right to obtain an assessment of non-infringement (which may be sought in an interim context). This formal confirmation may be useful to prevent wrongful uses of IP rights (particularly invention patents), which is often a criminal problem [It would be good to know more about the criminal dimension of patent infringement: can any reader help?]. The reform also clarifies (in a rule applicable to pending proceedings) that in patent invalidity actions it is sufficient to summon the party indicated as the rights owner in the relevant public register; the inventors who transferred the right and the licensees are not required. This change significantly simplifies merit proceedings in such matters, as well as saving time and money [what took so long?]".
You can read the full article online here.

Wednesday, 13 October 2010

Fulbright report still confident on patent litigation trends

It's one minute past midnight -- time to break the news: the findings and conclusions of the Fulbright & Jaworski 2010 Litigation Trends Survey are now available. As the firm explains,
"Annually, hundreds of corporate counsel participate in our Litigation Trends survey and offer some interesting perspectives on what trends they are seeing in the world of litigation. The majority of respondents this year reported that they expect litigation to continue at the same pace or to trend upward in the year ahead, and say stricter regulation is a major concern".
Of particular interest to readers of this weblog is what the survey has to say about patent litigation.  At paragraphs 21-22 the Survey observes as follows:
"Slightly More Popular: Patent claims may not be as high as they once were, but there was a slight increase in the number of respondents this year who said they have been involved in a patent infringement proceeding as a claimant or plaintiff. In the past year, 20% of all respondents filed one or more patents claims compared to 17% of respondents to the 2009 survey. Manufacturing, engineering and real estate all reported increases in the number of patent suits they filed in the previous year, with manufacturers doubling their filings from last year, to 52%. The outlier was tech/communications industry respondents, who indicated a drop from 38% to 15%. Meanwhile, public companies were three times more likely than private companies to file patent suits.
Protecting Patents: A majority of respondents think patent offense and defense will stay the same in the coming year. Hot sectors for patent suits in 2011 may be in health care and manufacturing companies, where 17% and 16%, respectively, say they expect to file more patent suits in the year ahead. Meanwhile, retail/wholesale and manufacturing respondents say they may be on the defensive end of that equation with 21% of retail/wholesale survey participants and 20% of manufacturing participants gearing up for an increase".
Any reader who is interested in looking behind this post to the full 64-page report can access it by clicking here and completing the registration procedure.

Tuesday, 12 October 2010

Ministers lock horns in tussle over patent lingo

Ministers continue to lock horns, but users say patents are too "deer"
It's no secret, but "Ministers still deadlocked on EU patent" is still a much talked-about feature of the current IP scene.   According to EU news site Euractiv today "A final deal on the EU patent was still being held hostage [PatLit wonders whether the use of such pejorative terms does much to ease the negotiating difficulties] by divergent national interests yesterday (11 October) at a Competitiveness Council held in Luxembourg".  While the grant of patents in Europe is not specifically a litigation issue, it has repercussions for litigation too.  Anyway, the Euractive piece continues:
"Moves to develop a single patenting system for the EU began in 2003 but progress has been hampered by linguistic, technical and legal difficulties. ...
The Commission presented in July a proposal to end the deadlock on linguistic disputes. The EU commissioner in charge of the dossier, Michel Barnier, proposed to maintain English, French and German as official languages for filing an EU patent (EurActiv 02/07/10). But this is opposed by other member states, namely Spain and Italy.
The Belgian Presidency has said overcoming legal and linguistic problems will be a top priority during its six months at the helm of the European Council (EurActiv 24/06/10).
EU ministers remain split between a group of countries led by France and Germany which support a trilingual system for the EU patent as proposed by the European Commission, and another group of states that oppose this solution and alternatively back a monolingual or multilingual regime.
The language used to file, contend and spread information about a patent is a crucial detail for countries' competitiveness. Researchers and small and medium-sized enterprises (SMEs) capable of using their mother tongue for patents will have an advantage over competitors that speak different languages [Linguistic competitiveness crops up elsewhere too.  Where official texts of Court of Justice rulings or Advocate Generals' Opinions are not made available in English, for example, until they have been made available in other official EU languages, English-speaking IP lawyers cannot confidently advise clients with regard to their content].
On the other hand, the current system, which protects all EU languages, has produced legal uncertainty and soaring costs, making patents more difficult and expensive to file in Europe than in other industrialised regions of the world [but a lot cheaper than easier than was the case 30 years ago.  It's easy to forget that a lot of progress has been made very quickly in historical terms].
At yesterday's Competitiveness Council, Belgium, which currently holds the rotating presidency of the EU, pointed out that under the existing system, a company willing to commercialise the same patent in all 27 countries must pay something like 25,000 EUR in legal and administrative costs. Some critics argue that this is in fact rather unlikely since most companies only register their patents in specific markets. Only a few multinationals are interested in taking on all the cost of operating their patents in every EU member state. SMEs, on the other hand, tend to use their patents only in bigger EU markets.
The negative consequences of this situation are two-fold, analysts have found. Firstly, the concept of the internal market is undermined at its roots as fragmentation between national markets remains the rule [But fragmentation exists with other IP rights, which may be national because there is no harmonisation, as in the case of second-tier patent protection, or because of cultural relativity, as in the case of trade marks which may be distinctive in one EU language, descriptive in a second and obscene in a third]. Secondly, countries where a patent is not registered often become hubs for counterfeit goods, which are then exported to all of Europe.
As an example, if a company decides to register a patent in Germany, France, the UK and Italy, the biggest national markets, the same patent would be left without legal protection in all other member states. In this scenario, if a cargo of counterfeit products were to arrive at the port of Antwerp in Belgium or Madrid airport in Spain, the owners of the patent would not be able to claim their rights against fraudulent activities [If the counterfeit products are merely in transit and have not been placed on the market within the EU, trade mark registrations are currently of no avail -- so if there's no local patent there's not much the producer of the genuine product can do]. ...".
PatLit will continue to watch negotiations with interest.
Unlocked Horns here

The PCC Page, no.1: "All change at the Patents County Court"

Starting today, PatLit is delighted to host a regular Tuesday feature on the new regime for litigation before the recently revamped Patents County Court for England and Wales. This feature is an initiative of the Chartered Institute of Patent Attorneys (CIPA), a body which, in conjunction with others, has taken a close and active interest in the direction of patent litigation reform in the UK. It is intended to provide a clear, concise explanation of how the court now works and will also comment on actual cases as they go through the new procedures and reach their resolution.  The first article in this new series, written by CIPA President Alasdair Poore, goes like this:
All change at the Patents County Court

Two weeks of change: new rules, an exceptional judge, His Honour Judge Fysh, retiring, and an exceptional member of the Bar, His Honour Judge Birss (right), replacing him.

The new rules have been well flagged in advance. They make a step change in procedure and its consequences for clients. IP advisors need to understand these changes: they open up avenues for clients which have for a long time been closed; and they open up opportunities for patent and trade mark attorneys to use these avenues, especially with procedures closer to those they already work with.

But like all procedures, there are rules, they need to be complied with, and jumping in without learning what they are could lead to rather burned feet.

More detail on these in weeks to come, but first the key elements (and one elements which has not quite made it) for those who have slept through the changes.

The headlines are (i) the written pleadings; (ii) the procedure up to and at trial; (iii) costs you can recover and (iv) damages you can recover:

Written pleadings set out CONCISELY as much of the case as possible

• Full statements of case including all facts and arguments – full but concise. No repetition of some of the mountainous statements under the original pre-Woolf rules. We can expect a pretty firm hand here – and some guidance soon in a revised PCC Guide.
• Statements of case signed with a statement of truth from someone who ACTUALLY knows the facts. It makes for more commitment (and identifies who might need to be cross-examined, should that be permitted).

Procedure up to and including trial is short and sharp, with bells and whistles silenced:

• 6 weeks or 10 weeks are allowed for a defence to be filed (depending on whether the claimant has complied with the required pre-action steps – more on this later) and 2 weeks for a reply, so you need to be on the ball here.
• A case management conference just a few weeks after the last statement of case, where the judge sets out the procedure, but almost certainly with a view to limiting disclosure (only for specifically identified items), cross examination, expert evidence etc. WHEREVER POSSIBLE the trial will go ahead just on the statements of case, and the parties may consent to a decision on the papers.
• Trial will be soon, and should not last more than one or at the most two days.

Costs under control:

• Costs recovery is limited – not necessarily what you spend, but what you can get back from the other side or they from you,. Of course you can’t play the fool. Abusive behaviour will be penalized by abusive costs.
• BE WARNED: everyone talks of a cap of £50,000 for a full case and £25,000 for enquiry into damages. That is a maximum and each stage has its own maximum (eg particulars of claim = £6,125, preparing witness statements = £5,000, preparing experts reports = £7,500 (including what you pay the expert), etc.

Damages you can recover:

• This one hasn’t made it yet. Damages are intended to be limited to £500,000. But Parliament could not run fast enough – so for at least the first six months, the proposed rule to limit damages will not be in effect.

More on the details in due course. For those who cannot wait, they are here, but make sure you read them with the other bits.
CIPA welcomes all comments and feedback. You can contact CIPA directly here or post a comment at the end of this article.

Monday, 11 October 2010

Costs: Amsterdam "nearer Newport" than other parts of UK, rules IPO

From Amsterdam ...
In Loadhog Ltd v Polymer Logistics BV, BL O/337/10, 29 September 2010, the UK's Intellectual Property Office was faced with a challenge to a costs claim in favour of Polymer, the defendant patent proprietor, in failed revocation proceedings. Polymer's costs claim applied the "evidence" element set out in Tribunal Practice Notice 4/2007 ("Preparing evidence and considering and commenting on the other side's evidence") in respect of each piece of evidence filed in the proceedings. The IPO hearing officer held that this was not the way the scale was meant to be applied and that the evidence element of any costs order should be between £500 and £2,000 in total, not per item: in general, if any item in the table was applied more than once in any award of costs, this would defeat one of the fundamental purposes of the published scale -- predictability of costs.

One area in which Polymer did succeed was in its costs claim for the cost of importing and accommodating a Dutch expert witness, who arrived at Newport in rather unusual circumstances:
... to Newport, by boat?
"7 I have examined the travel and accommodation expenses for the defendant’s expert witness, and I am satisfied that they are reasonable in the circumstances. I have therefore awarded the full amount sought in this category. The claimant has commented that the mileage element of Mr ten Bok’s travel expenses is high because the claimant chose to rely on an expert witness from Holland. I don’t know where in Holland Mr ten Bok lives, but I note that Amsterdam (roughly in the centre of Holland) is closer to Newport than some parts of the UK.

8 Moreover it is likely that when the defendant chose Mr ten Bok as their expert witness for this case, they anticipated that he would fly to the UK if required to attend a hearing. (In the event, when the time came for Mr ten Bok to attend the hearing to be cross-examined, a cloud of ash from an Icelandic volcano had closed European airspace and he had to drive to the hearing.)

9 The defendant has claimed three nights’ hotel expenses for Mr ten Bok in relation to his attendance at the hearing. Although Mr ten Bok’s cross-examination was concluded during the first day of the hearing, I think it is reasonable that the defendant should want to make sure that he was available during the second day, either to support its legal team or in case he was required to clarify some part of his evidence".

Friday, 8 October 2010

Broad patents, big settlements: are we living in strange times?

Sharing Sound is meant to be fun ...
"Apple Settles Lawsuit Over Online Music Distribution Patent" is the title of an article which was drawn to my attention by Antonio Selas (partner, Cremades & Calvo-Sotelo, Madrid) earlier this week. This article outlines the success enjoyed by US company Sharing Sound in securing payments arising from its patent for online music distribution.  The article describes Sharing Sound a a patent troll and the patent is termed 'ridiculously broad'.

Companies against which infringement actions were targeted were named as Apple (iTunes), Microsoft (Zune), Napster, Rhapsody, Brilliant Digital Entertainment (Kazaa) and Sony / Sony Ericsson;  proceedings have also reportedly been filed against Amazon, Netflix, Wal-Mart, Barnes & Noble and GameStop.  It is claimed that the patent – U.S. Patent Number 6,247,130, “Distribution of musical products by a website vendor over the Internet” – would essentially prevent the use of any type of online store environment which provides "song previews, a shopping cart or even a music player".

Apart from Brilliant Digital Entertainmentand Rhapsody, the listed companies are all said to have moved to settle Sharing Sound's claims. Apple's settlement was signed off by Judge David Folsom (U.S. District Court for the Eastern District of Texas, a court known to be well disposed towards patents.

Disappointed that "no specifics on the terms of the deal were revealed", I wasn't going to take this further, but Antonio has provided some fuel for debate.  He writes
"Just to give you a short opinion about this case, since it can show a big problem we are facing in the patent field, with weak patents used to force the industry to pay a royalty if they want to avoid the risk (even if low, there is always a risk) of been condemned to stop and, at the same time, having to “invest” important amounts in legal advice during litigation.

In this case, the patent seems to be extremely broad (and weak?). You can find the patent here. What do you think about the abstract?

“The system and method permit the purchase of audio music files over the Internet. The PC user logs onto the vendor's web site and browses the songs available for purchase. The songs can be arranged by artist, music style, etc., as mentioned above. Further, the vendor can provide suggestions on the web site, directing the PC user to songs that might be desirable, based on that PC user's previous purchases, her indicated preferences, popularity of the songs, paid advertising and the like. If interested in a song, the PC user has the option of clicking on a song to "pre-listen" to it--hearing a 20-second clip, for example. If the PC user then wishes to purchase the song, she can submit her order by clicking on the icons located next to each song/album. The order will be reflected in the shopping basket, always visible on the screen. As the PC user selects more items, each and every item is displayed in the shopping basket. At any point in time, the PC user can review her selections, deleting items she no longer desires”.

And the claims?

1. A system for digitally distributing music comprised of tracks and albums over the Internet to a plurality of the Internet users, comprising:
means for assigning a key to a track for downloading to a user;
means for inserting the assigned key into said track prior to the downloading;
means for transferring the same assigned key to said user prior to downloading said track;
means for combining the transferred key with additional data to generate an identifier that uniquely identifies a customer's computer; and
means for verifying that said key extracted from said track matches information that is based on the generated identifier to enable the playback of said track.
2. The system according to claim 1, wherein the assigning means assigns said key that is unique to said user in correspondence to a username and password combination.
3. The system according to claim 2, wherein said user enters said username and password combination to access said track in a database prior to the assignment of said key.
4. The system according to claim 3, wherein said track is downloaded only if said user purchases said track prior to the downloading.
5. The system according to claim 4, further comprising means for storing said identifier in said user's computer for subsequent verification of the authorized downloading of tracks.
6. The system according to claim 5, wherein said additional data uniquely identifies a hardware/software component of said user's computer.
7. The system according to claim 6, wherein the inserting means inserts the assigned key into a header of said track.
8. A method for digitally distributing music comprised of tracks and albums over the Internet to a plurality of the Internet users, comprising:
assigning a key to a track for downloading to a user;
inserting the assigned key into said track prior to the downloading;
transferring the same assigned key to said user prior to downloading said track;
combining the transferred key with additional data to generate an identifier that uniquely identifies a customer's computer; and
verifying that said key extracted from the downloaded track matches information that is based on the generated identifier to enable the playback of said track.
9. The method according to claim 8, wherein the assigned key is unique to said user in correspondence to a username and password combination.
10. The method according to claim 9, wherein said user enters said username and password combination to access said track in a database prior to the assignment of said key.
11. The method according to claim 10, wherein said track is downloaded only if said user purchases said track prior to the downloading.
12. The method according to claim 11, further comprising storing said identifier in said user's computer for subsequent verification of the authorized downloading of tracks.
13. The method according to claim 12, wherein said additional data uniquely identifies a hard drive of said user's computer.
14. The method according to claim 13, wherein the assigned key is inserted into a header of said track.

Would the information provided in the patent be enough for the invention to be carried out by a person skilled in the art? And, if so, does this invention involve an inventive step? Isn’t it too broad? Bear in mind that, as we read, the plaintiff sued almost all the industry: Microsoft (Zune), Napster, Rapsody, Brilliant Digital Entertainment (Kazaa),Sony / Sony Ericsson, Amazon, Netflix, Wal-Mart, Barnes & Noble and GameStop.

It seems to me that we are living in strange times. Where are we going? How will the Patent wars end? Would this mean the end of the patent system as we know it?

All this brings my mind to the US report Protecting Consumer Access to Generic Drugs: the Benefits of a Legislative Solution to Anticompetitive Patent Settlements in the Pharmaceutical Industry (here) and the Executive Summary of the Pharmaceutical Sector Inquiry Report by the EU Commission (here), in the second of which we read:
“Like in any other industry the inquiry's findings show, however, that litigation can also be an efficient means of creating obstacles for generic companies, in particular for smaller ones. In certain instances originator companies may consider litigation not so much on its merits, but rather as a signal to deter generic entrants”.
Antonio has made some powerful points here, which go to the heart of the function of the patent system in rewarding the disclosure of technical advances in the art, the nuisance value of unmeritorious litigation and the selectivity of competition authority reviews of settlements.  Readers' comments are very much welcome.