Yangaroo can't jump the border

Vancouver-based company Destiny Media Technologies, Inc. last week obtained summary judgment for non-infringement of a US patent claim brought by its Canadian competitor Yangaroo, Inc. The disputed patent covered technology for the secure transmission of music and media files to authorized computers in the US by way of file servers located in Canada. Destiny Media developed its Play MPE system, which the recording industry uses for the secure internet distribution of pre-releases to trusted computers at radio stations and other media outlets. Yangaroo’s patent claimed a “method of distributing content” performed on a server. According to Yangaroo, Destiny’s servers in Canada perform the patented process to “manufacture” the music files that were then transmitted into the US.

The case was heard in the Federal Court, Eastern District of Wisconsin, where Judge William C. Greisbach gave summary judgment on 7 June, saying: "the claimed method of the ‘712 patent does not embrace the method of manufacturing the content prior to distributing it".

Destiny opted for the court's "Fast Track” summary judgment procedure to dispose of the case speedily on the ground that Yangaroo's single patent claim could not be asserted against the activities of Destiny's server computers located in Canada and the UK. Relying on NTP, Inc. v Research in Motion, Ltd, No. 3:01CV767 (E.D. Va. August 5, 2003) the judge held that a patent claim over a method of distributing data does not establish liability under US patent law since transmitted data is not a “product” manufactured by the claimed process.

Source: MarketWatch here. Thanks, Bruce Berman, for drawing this to PatLit's attention.

The New Zealand tortoise: should we nip it in the bud?

In "Has the patent tortoise almost reached the finish line?", New Zealand law firm Simpson Grierson comments on the extremely slow progress of replacing that jurisdiction's ancient Patents Act 1953 with a fresh, new Act. According to this note,

" ... The Patents Bill, which will provide a complete re-write and reform of New Zealand's patent law, has been reported back from Parliament's Commerce Select Committee and is heading for its second reading in Parliament. And in a new twist on the old fable, the Select Committee has added a few hare-like twists to this tortoise of a piece of legislation.

Oppositions are Back

Back at the start of the reform process, the Institute of Patent Attorneys advocated a re-examination system, asserting that the opposition process was inefficient and unpopular. When the draft Patents Bill was circulated (in 2002), the Institute did a u-turn, and advocated for retaining oppositions. It is no wonder the Select Committee was confused.

The result is that the Bill provides for both re-examination and oppositions.

Revocation is of course also available. There are limited restrictions on the number of bites at the cherry a party can take. This proposal is unlikely to achieve efficiency in the system. The dual system instead adopts a "worst of both worlds" approach, and will give determined opponents plenty of opportunities to disrupt, and add to the expense of, patent applications".

Being in the mood for a mixed metaphor, I'd like to ask whether we should nip this tortoise in the bud. Following a recommendation in The British Patent System: report of the committee to examine the patent system and patent law [the Banks Report], Cmnd 4407, 1970, the UK was happy to scrap before-and-after challenges. It seemed quite outrageous that an opponent, having lost in Patent Office proceedings and then failed on appeal to the Patents Appeal Tribunal, the Court of Appeal and the House of Lords, could then wait till the patent was granted and then apply, on the same ground. to revoke the patent and pursue its application for revocation all the way up to the House of Lords again. I don't think this ever actually happened, through the prospect that it might -- though a boon for patent litigators -- was distinctly unattractive to litigants and legislators alike.

The UK, like the European Patent Office, operates a system in which a patent can be challenged only after grant, and this too has its unattractive side. Can any reader think of a better way to do things?

NPEs find a friend in the ITC

It seems to be the topic du jour: NPEs are on their way to becoming downright respectable. In April the United States International Trade Commission (ITC) delivered a boon to these once-scorned entities. The Commission's decision in Certain Coaxial Cable Connectors, Investigation No. 337-TA-650, stated that an NPE's patent enforcement litigation activity can establish a "domestic industry" in a product -- sufficient to prevent the importation of infringing items into the U.S.

To win an exclusion order, an ITC complainant must show that it has established, or is in the process of establishing, a domestic industry in relation to a disputed patent. Under the Tariff Act of 1930, 19 U.S.C. § 1337(a)(2) and (3), this may be accomplished by demonstrating a "substantial investment" in exploiting the patent in the United States, including related licensing activities. In Certain Coaxial Cable Connectors, complainant PPC sought to bar multiple respondents from marketing an item on which PPC owned the patent. PPC did not manufacture the product, own a plant or equipment, or employ workers. Instead the company argued that its legal bills that resulted from enforcing its patent constituted a significant investment in exploiting its patent. Therefore, PPC claimed, it had a domestic industry that deserved protection. The ITC agreed.

For its reasoning the ITC relied largely on the Tariff Act's plain meaning and legislative history. In 1988, the U.S. Congress deliberately added licensing as a qualification for domestic industry, specifically in order to overturn the ITC's previous Gremlins decision. From this the Commission concluded that Congress intended to encourage the practical application and propagation of patents and their protected products. Thus, any licensing-related activity that tends to bring a patented item to use or to the market may pass muster -- even if the activity is intended solely to earn revenue from the item.

The Commission did limit its decision. Patent enforcement litigation in itself may not constitute exploitation, because it does not necessarily involve licensing. But a patent enforcement lawsuit or other activity may qualify, if the documented activity is "related to licensing and pertain[s] to the patent at issue." Merely owning a patent won't meet the domestic industry requirement; a patent owner must actively take steps "leading to the exploitation of the intellectual property." And whether a complainant's investment is "substantial" must be determined according to the facts of each case. But it's notable how broad a reading the ITC gave for licensing activities, which may include, "among other things ... sending cease and desist letters ... conducting a patent infringement litigation, conducting settlement negotiations, and negotiating, drafting, and executing a license."

Unfortunately for NPEs, the ITC cannot order an award for damages. It can, however, issue an injunction barring an infringing product from importation into the United States. In this way an ITC order provides a patentee with a useful bargaining chip to potentially obtain a sizable settlement from an infringer. According to The Prior Art blog, this can matter quite a lot, since

"... only a tiny fraction of district court infringement cases go to trial, with the typical defendant paying an estimated average of $5 million per case. By contrast, 40 percent of ITC cases go to trial and the average defendant there can expect to rack up as much as $10 million in litigation costs over a much shorter period of time."

Low-level protection drives up Russian patent litigation threat

Writing for International Law Office, Eugene A. Arievich (Baker & McKenzie - CIS Limited), in"Patently absurd? Fear of patent trolls drives protective utility model filings" (here), explains how the threat of patent trolls has driven some companies to extremes in their attempts to protect their rights. He teasingly asks:

"How many people would recognize this object?

"The vessel in cross-section features the boundaries of its outer and internal sides. At least on the outer boundary and/or the internal boundary, part of the boundary of at least one of the cross sections is executed as a fragment or a combination of fragments of a slanting conical cut of a right circular cone."

The description, he explains, comes from a patent filing for an ordinary bottle, adding that in Russia commercial parties have taken to patenting the most obvious things in order to protect themselves against patent trolls, whose tactics come close to a form of hostile takeover and redistribution of property. Although such wrongful practices are not new to Russia, Eugene observes that they thrive in the environment created by Russia's legal system.

After describing how patents can be obtained for inventions and utility models, he notes that many well-established law firms, eager to play safe and protect their clients' interests, have started obtaining utility model patents for almost anything imaginable ("Patenting a wooden stick for a lollipop might sound ridiculous, but such decisions simply recognize the precarious reality of patent law. Foreign companies must take patent searches seriously, as things that no one would think of patenting elsewhere in the world may need this form of legal protection in Russia").

The article concludes with a dire warning about the threat of a trip to court:

"Russian trolls pose a greater threat than their overseas equivalents because in addition to pursuing civil lawsuits, they press for criminal proceedings against the target company's management, often using underhand methods. For many years the chief representative of a UK company had to comply with a recognizance not to leave, merely because a group of Russian do-it-yourself enthusiasts had obtained a utility model patent for the suspended floors that the company had long manufactured, and had accused the company's management of wrongfully exploiting the technology in question.

In order for businesses in Russia to enjoy proper protection against patent trolls, a Supreme Arbitrazh Court decision is needed to resolve a particular case or review relevant practices in general. The court's position in previous litigation has been that as long as legal protection remains in force, a rights holder may uphold its rights by any lawful means. However, it makes sense for the courts to consider such cases in the context of the abuse of rights and the principle that a rights holder's goal should be commensurate with its efforts to obtain the patent. In the United States, litigation initiated by patent trolls is considered in light of this principle of proportionality. The approach allows the courts to discourage dishonest approaches and protect companies that invest in innovation".

UPLS: "We will fight them on the beaches ..."

The Court of Justice of the European Union has received submissions in Opinion 1/09 Unified patent litigation system. In this Report for the Hearing, almost all possibilities regarding the legality of the proposed unified patent litigation system are contemplated:

"16 The observations submitted argue one of the following: (i) that the request for an opinion is inadmissible or (ii) that the draft agreement is incompatible with the Treaty [establishing the European Community] or (iii) that it is necessary to make amendments to the draft agreement in order to ensure its conformity with the Treaty or (iv) that the draft agreement is compatible with the Treaty".

This document, outlining the views of the those submitting them, is 35 pages long. More or less half of its length is taken up with those who maintain that the draft agreement is compatible with the Treaty. You can browse it for yourself here. For the record, those who consider the proposal okay from the word "go" include the jurisdictions which already handle the most patent litigation and which, in the opinions of some, may have the most to lose from the Europeanisation and consequent dilution of their special talent and experience for patent litigation: Germany, the Netherlands and the United Kingdom. Those who consider the proposal incompatible with the Treaty include Greece, Spain, Cyprus and Italy -- where the Union's best and most beautiful beaches are to be found.

Pharma pay-for-delay OK?

Bound by precedent, last month a U.S. Court of Appeals (2d Cir. E.D.N.Y.) panel decided in In re Ciprofloxacin Antitrust Litigation that Bayer AG and several generic drug makers did not violate antitrust laws when they agreed to a reverse exclusionary payment -- or "pay-for-delay" -- settling a patent infringement suit. However, seemingly unhappy with its own decision, the panel encouraged plaintiffs to request re-examination of the case before the full court, in order to address public interest concerns.

In the original infringement suit, generic drug makers (including Barr Laboratories, The Rugby Group, and Watson Pharmaceuticals) had filed Abbreviated New Drug Applications (ANDAs), in order to obtain federal approval to sell generic versions of Bayer's patented antibiotic ciprofloxacin ("Cipro"). Bayer then sued to prevent such approval. As so often happens, Bayer and the generics settled the case with a pay-for-delay arrangement in which Bayer agreed to give Barr more than $398 million in exchange for the generics' promise to delay introduction of generic versions of Cipro. In response, several trade unions and pharmacies slapped Bayer and the generics with over 30 antitrust lawsuits, which the New York trial court consolidated and eventually dismissed in favor of defendants. Citing In re Tamoxifen Citrate Antitrust Litigation, the District Court ruled that pay-for-delay did not violate antitrust laws, and explained,

"The ultimate question ... is not whether Bayer and Barr had the power to adversely affect competition for ciprofloxacin as a whole, but whether any adverse effects on competition stemming from the Agreements were outside the exclusionary zone of the '444 Patent. It goes without saying that patents have adverse effects on competition. However, any adverse effects within the scope of a patent cannot be redressed by antitrust law." (emphasis added)

Interestingly, this case showcases a conflict between the Federal Trade Commission, which views reverse payment agreements as per se illegal, and the courts' more pragmatic approach. At present, Tamoxifen remains judicially binding; unless a patent or its enforcement is fraudulent or "baseless," then no antitrust laws are broken -- "as long as competition is restrained only within the scope of the patent." 

The panel declared itself unable to review plaintiffs' additional argument that reverse-payment agreements violate public policy by depriving consumers of lower-cost generic drugs. Notably, the U.S. government filed an amicus brief urging the Court to overturn Tamoxifen and deem pay-for-delay settlements presumptively illegal, on public interest grounds. Apparently somewhat swayed, the panel suggested:

"[W]e believe there are compelling reasons to revisit Tamoxifen with the benefit of the full Court's consideration of the difficult questions at issue and the important interests at stake. We therefore invite the plaintiffs-appellants to petition for rehearing in banc."

A tale of trolls and false clouds

PatLit has never been particularly happy about the use of the term 'patent troll' to describe a patent proprietor who, while not manufacturing anything himself, seeks to enforce a patent by collecting a rent for its use by others, backed by the threat of injunctive relief to prevent the non-payer continuing to manufacture. The term 'patent troll' is imprecise, judgmental and, in its widest form, broad enough to include such worthy enterprises as university research institutions and their commercialisation offices. Perhaps for this reason the expression, despite its power as a vivid metaphor, has been decreasingly used -- at least on my side of the Atlantic -- and appears to be yielding on both sides of the Pond to the curious terminology 'non-practising entity' or 'NPE'

Proof that 'patent troll' has assumed a Pythonesque dimension of silliness may be found in the recent news (reported here on pcworld.com but also in many places elsewhere) that Salesforce.com Chairman and CEO Marc Benioff has bestowed the title 'patent troll' on software giant Microsoft. Says the article,

"Last week, Microsoft sued Salesforce.com, alleging that the company infringed nine of its patents. The suit -- a rare example of Microsoft using the courts to defend its patent portfolio -- covers several broad patents, including one for a system used to display a Web page with embedded menus. Another patent covered by the suit covers a method for stacking toolbars in a computer display.

... [Saleforce.com chairman and CEO Marc] Benioff declined to comment on specifics of the suit, but reiterated his description of Microsoft as a patent troll.

"Patent trolls are part of the industry today, that's just the way it is. We've dealt with them before and we'll deal with this situation in the same exact way," Benioff said, noting that the Microsoft lawsuit would have no material impact on the company.

... Benioff repeatedly mocked Microsoft, describing the company's products as old technology that's out of sync with the emergence of cloud computing, a catch-all term used to describe IT infrastructure and applications delivered as a service over the Internet. ... earlier ... Benioff questioned Microsoft's recent release of a new version of its Office productivity suite, which includes a free Web version. The Web version of Office 2010 is Microsoft's attempt to add cloud-computing capabilities to its productivity suite, but Benioff said it falls short.

"It's a false cloud," he said".

Original Syn

In what some have characterized as the first step toward a "new industrial revolution," American scientists have created a synthetic genome -- resulting in the first man-made, self-reproducing, living cell.

The J. Craig Venter Institute (JCVI) has synthesized a genome from scratch in a laboratory and applied for patents on both the genome and the resulting organism. Dr. Venter, JCVI's chief executive officer, led the '90s-era race to map the human genome. This time around, his research team sequenced the genetic code of a bacterium (M. gen­i­tal­ium), and then used computer data and "four bottles of chemicals" to construct a copy from scratch. The new, synthetic genome M. mycoides -- dubbed "Synthia" by the watchdog organization ETC Group -- was then inserted into the cell of an existing bacterium. Subsequently, the host cell "booted up" with the Synthia genome and began producing Synthia's synthetic proteins, instead of its own.

Having partially funded JCVI's research, the U.S. government's Department of Energy holds "certain rights" to the Venter Institute's US Patent application no. 20070122826 and international patent application WIPO no. WO2007047148, the latter application seeking monopoly rights in more than 100 countries. JCVI has proposed using artificial life forms to devour greenhouse gases, create new chemicals and food ingredients, clean up water, and accelerate vaccine production. Venter insists that his team has participated in White House-level bioethical reviews, and is "being thoughtful" about the implications of their work.

But watchdog organizations warn of Synthia's potential dangers, including unintended biological consequences and military or terrorist misuse. The ETC Group has challenged JCVI's patent on ethical and public safety grounds, and also complains: “Ven­ter’s en­ter­prises are po­si­tion­ing them­selves to be the Mi­crosoft of syn­thet­ic bi­ol­o­gy.” ETC previously won a 13-year challenge to a Monsanto soybean patent. Nonetheless, their present challenge looks less promising, since JCVI's Synthia research was backed by such heavyweights as the U.S. government, BP, and Exxon Mobil.

Since Diamond v. Chakrabarty courts have restricted the ability to patent life forms, by excluding naturally-occurring organisms from such monopoly rights. Synthia presents a major game-changer; Venter's success may give biotech companies the means to circumvent these restrictions by simply creating synthetic versions of organisms. This could have far-reaching effects on Myriad, patent law, and our collective perceptions and definitions of "life."

Ricoh undercuts NPE profit potential

If other U.S. courts follow the lead of Wisconsin District Court Judge Barbara Crabb, NPEs (non-practicing entities, or "patent trolls") may soon see an end to their massive settlement winnings. Last month, office equipment manufacturer Ricoh won an infringement action against Taiwanese company Quanta Computer. But Crabb rejected Ricoh's request for an injunction to prevent Quanta from selling the patented optical drives at the heart of the suit. Pointing to eBay (547 U.S. 388 (2006)), the judge diverged from traditions of presumptive injunctive relief in cases of patent infringement cases, and instead appeared to establish certain criteria for distinguishing among types of patent holders. Such criteria seemed intended as a direct hit against NPEs.

Crabb was unpersuaded that Ricoh would suffer irreparable harm if an injunction did not issue. To justify this analysis, she relied on the eBay concurring opinion:

"When the patented invention is but a small component of the product the companies seek to produce and the threat of an injunction is employed simply for undue leverage in negotiations, legal damages may well be sufficient to compensate for the infringement and an injunction may not serve the public interest."

This language appears to specifically target NPEs; Judge Crabb explicitly contrasted such "entities" with researchers, independent inventors, and direct market competitors -- the latter classes apparently being more deserving of injunctive relief against infringers. Because Ricoh does not manufacture or sell the patented optical disc drive, Crabb reasoned that the plaintiff was not Quanta's direct competitor, and thus would not suffer irreparable harm in the absence of an injunction.

But she also turned an eye to the plaintiff's intent; since Ricoh had previously licensed its patent to numerous companies, Crabb decided that Ricoh's main motive was not "to narrowly limit the practice of its invention," but was rather to "simply maximize a potential licensing fee." And: "[b]ecause that is not an adequate ground for an injunction, plaintiff’s motion for a permanent injunction will be denied." The parties were ordered to negotiate a compulsory license for future use.

This policy-based decision may be one court's way of addressing the U.S. Congress's failure to heed the pleas of large companies and end the plague of the "patent trolls." It does remove one bargaining chip from the NPEs' stable of tricks. By hitting NPEs where it hurts -- in their pocketbooks -- the court may well accomplish what Congress never could.

Read the decision here.

Perini appeals dismissed

In August 2009 PatLit asked "When do you sue a holding company?", the question being as to the circumstances -- if any -- in which one should join as a defendant in patent infringement proceedings a company whose only involvement is that it is the holding company for another company which purchased infringing goods from the principal defendant. In the opinion of Mr Justice Floyd (Patents Court, England and Wales) in Fabio Perini SPA v LPC Group Plc & others [2009] EWHC 1929 (Pat), the holding company should not have been joined: the case against it was based only on the fact that the letter from the patent owner (Perini) before action, addressed to LPC Limited (its subsidiary which purchased the infringing goods from the principal defendant, PCMC) elicited a response on LPC Group's notepaper which affirmed "We purchased the equipment from PCMC".

Last Friday, in [2010] EWCA Civ 525, the Court of Appeal dismissed both the appeal and the cross-appeal and affirmed the position taken by the trial judge. Many issues were discussed in the 125 paragraph leading judgment of Lord Neuberger MR -- but this issue was not one of them.

Interim injunctive relief in Spain

Writing for International Law Office earlier this week ("Novartis's endeavours to obtain interim injunctions come to naught"), Sara Pelaz (Grau & Angelo) explains what happened last December when pharma company Novartis applied for an interim injunction against Medis EHF, Laboratorios Stada, SL and ratiopharm España, SA alleging infringement of its EP948320 patent on pharmaceutical compositions for the sustained release of fluvastatin, a patent which was amended during EPO opposition proceedings.

As the title of the article indicates, Novartis failed. The saga is an interesting one, since it deals with the curious situation in which a plaintiff relies on patent claims which appear to be in constant flux as the patent passes from the Opposition Division to the Board of Appeal, where the patentee requests that issues be remitted to the Opposition Division following the submission of fresh documents and the joinder of further parties in the EPO proceedings. Defendants often appear to present a moving target; less often can the same be said of the plaintiff's patent.

Infringement action won't be stayed pending foreign decision in non-patent claim

Stay of proceedings is always an important issue where litigation breaks out between the same parties in different jurisdictions in respect of the same patent -- but it's not so common to find an application for a stay of patent infringement proceedings in the UK pending the outcome of proceedings unrelated to patent infringement abroad. For this reason the extempore decision of Mr Justice Kitchin in Elmotech Ltd and another v Guidance Ltd and another (Patents Court, England and Wales, 13 May 2010) is instructive (this decision was picked up by subscription service Lawtel).

In these proceedings Guidance applied to stay an infringement action brought against them by Elmotech in relation to its patent for tracking devices, pending the outcome of related French proceedings. In those French proceedings, Elmotech had challenged the award of a state tender to a consortium, which included the second applicant in these proceedings, to supply personal monitoring equipment in France. Elmotech, as a member of a consortium that had made an unsuccessful bid, claimed that the award of that tender and the subsequent contract signed by the parties should be set aside because of the procedural violations of EU law and French procurement contract rules. Elmotech, opposing the application for the stay, maintained that it was likely to take around four and a half years to resolve the French proceedings and to receive any relief if it was successful. The French proceedings did not involve any allegations of infringement of patent rights or any issue as to the validity of any patent rights.

Kitchin J refused the application for a stay. In his view, in these circumstances it would not be right to deprive Elmotech of the opportunity to establish the validity of its patent in suit; rather, it was appropriate to allow the patent infringement action to proceed.

Hearing next week on UPLS

According to the Newsletter -- Court of Justice of the European Union, next Tuesday, 18 May at 9:00am the Court of Justice is holding its Hearing in Opinion 1/09 on the compatibility with European Union law of the Unified European Patent litigation system (on which see, eg here and here):

"The Council has requested an opinion from the Court of Justice regarding the compatibility of a proposed agreement creating a European and Community Patents Court with the EC Treaty. The draft international agreement would be concluded between Member States, the European Union and the non-EU Member States of the European Patent Office and will have jurisdiction in respect of European and Community patents.

This special "Opinion" procedure, provided for by Article 300(6) of the EC Treaty (not to be confused with an Advocate General's Opinion), exists to allow the EU's institutions to seek advice from the Court of Justice about the compatibility of an international agreement with EU law before signing it (to avoid the EU entering into a treaty which is subsequently declared illegal by the Court). One of the specificities of this procedure is that it will be heard by the entire court (all 27 Judges and 8 Advocates General). At the hearing, the Court will hear the submissions of various EU institutions and Member States".

Thank you, Chris Stothers (Arnold & Porter), for spotting this.

Where to sue and be sued in the US: some real research

Thank you, Natalie Nathon, for news of this draft article which has recently been posted on the SSRN website, Mark A. Lemley's "Where to File Your Patent Case" (April 29, 2010). This 39-page document is replete with data concerning US patent trials. Says the author, a Stanford-based professor, in his abstract:

"Patent lawyers spend a great deal of time figuring out the best districts in which to file patent cases. Based on a comprehensive study of all patent lawsuits over the past ten years, I identify the best – and worst – districts for patent owners along a variety of metrics. The answers will surprise you".

The conclusions are indeed quite gripping, even for non-Americans. Says the author:

"The results, in short, seem fairly stable across a variety of likely preferences. And they reflect received wisdom only in part. Accused infringers should be trying to litigate in the Eastern District of Wisconsin, the Southern District of Ohio, or the District of Columbia, none of which are much on the radar screen of patent lawyers. Patentees should be suing in a variety of districts, including the District of Delaware, the Eastern District of Virginia, and the Western District of Wisconsin. Virginia and Wisconsin aren’t much of a surprise, but patent lawyers seem to overvalue the Eastern District of Texas and undervalue the District of Delaware. ..."

Dream, Wish or Reality? This year's Laddie Lecture

The Second Annual Sir Hugh Laddie lecture, "From National Patent Litigation to a European Patent Court: a Dream, a Wish or Soon Reality?", takes place on 15 June 2010 in the Cruciform Building, Gower Street, London. This year's speaker is well chosen for the subject, being none other than Raimund Lutz (President of the Bundespatentgericht). The event is hosted by IBIL (the Institute of Brand and Innovation Law), which is part of the Law Faculty, University College London. Professor Jan Brinkhof is in the chair.

The theme of this year's lecture is as follows:

"For more than four decades experts and politicians have endeavored to create a European Patent Court. Such a European Patent Litigation System would be indispensable for a future Community Patent, or as it is now called, an EU-Patent. Some also believe it would be desirable to make this court responsible for the European Bundle Patents in order to unify the decisions made regarding the whole of these bundles.

President Lutz will discuss the status and future of this project, as well as possible alternatives to some of the details of the proposed solutions".

President of the Court since 2006, Herr Lutz was formerly Head of the Subdivision for Trade and Business Law at the Federal Ministry of Justice, Berlin, where his primary focus was on intellectual property.

You can click here for full details and registration.

Patent ethics in court: a new title

In many countries any sort of IP litigation is a specialist activity, but in large, sophisticated and litigation-aware jurisdictions like the United States each area of IP is a discrete field of expertise and even within each field it is possible to discern sub-specialities. Outside the US there can be few jurisdictions on the planet where the volume and nature of legal activity could support a title such as Patent Ethics: Litigation, the latest work by Professor David Hricik, and which would permit nearly 300 pages of sources and analysis.

According to the publishers' web-blurb

"Patent Ethics: Litigation serves as a guide to the ethical issues arising in the course of the patent litigation process. By providing relevant rules and case law, it allows practitioners to identify ethical problems before they arise and to address them most effectively when they do. Patent Ethics: Litigation is the second of two volumes on patent ethics-the first is on prosecution-written by Professor David Hricik and Drinker Biddle partner Mercedes Meyer. This treatise is the first of its kind to combine the PTO rules with commentary by the author, which distills the author's own experience and expertise in patent litigation into effective practice strategies.

Readership: U.S.-based patent litigators, private-practice attorneys and agents, in-house intellectual property departments, foreign law practitioners overseeing U.S. operations, and law schools".

The book is not yet on the bookstore shelves, or indeed available online, but its home page can be accessed here. Published from the US desk of Oxford University Press, its ISBN is 978-0-19-536709-6. The UK price is to be £135.

Grounds for challenge of UK Comptrollers' Opinions remain narrow

In Nationwide Filter Company v Berni Hambleton BL O/091/10 Nationwide, the owner of a UK patent (GB 2411367), sought a review of a Comptroller's Opinion in which the examiner considered its patent -- which was for a method of forming a filter unit of the type comprising a filter element located in a peripheral encasement frame with a seal between the periphery of the filter element and the frame -- invalid for lack of inventive step over a prior French patent document. J. Elbro, hearing the review, cited the principles articulated by Mr Justice Kitchin in DLP Limited [2007] EWHC 2669 and concluded that, since the examiner’s opinion was not clearly wrong and no error of principle was alleged, there was no basis on which to set aside any portion of the Opinion.

The hearing officer also declined to consider an alternative obviousness argument which was based on a US document, which was raised unsuccessfully by Ms Hambleton. Since this argument had been rejected in the Opinion, it was not within the scope of review sought by Nationwide under the Patents Act 1977, Section 74B.

Making directors liable in Australia: what must be proved?

The current issue of the Allens Arthur Robinson Intellectual Property Newsletter features a good note by Trevor Davies and Rob Silberstein, "Patent infringement and company directors", on the 22 February 2010 ruling of Bennett J (Federal Court of Australia) in Inverness Medical Switzerland GmbH v MDS Diagnostics Pty Ltd and others [2010] FCA 108. Issues raised in this note include the liability of a director for an infringement performed by a company as well as liability for authorising the company's infringement.

In this case the third respondent (Dr Appanna) was recorded on the company website as being the managing director and founder of the first respondent, MDS; he also controlled the MDS companies as shareholder. but was he liable for the acts of MDS as a joint tortfeasor? Australian case law has developed three separate tests for establishing director's liability: Bennett J affirmed that, as the Full Court decided in Allen Manufacturing Co Pty Limited v McCallum & Co Pty Limited [2001] FCA 1838, it is not necessary to determine which test is the correct one, but had no doubt in concluding that Dr Appanna was liable. The following paragraph of the judgment, with key words highlighted, points to evidential targets:

"I am satisfied that Dr Appanna’s position as the Managing Director of MDS NZ and his participation in the procurement and distribution of the MDS devices in New Zealand and Australia are sufficient to establish that he deliberately, wilfully or knowingly pursued a course of conduct that resulted in MDS selling products that infringed the Inverness patents. Further, he was aware of competing products on the market and was indifferent as to whether or not those products were protected by patents. In taking part in the activities of MDS NZ and MDS Aus as a director and in the management of those companies, Dr Appanna directed or procured the obtaining of and the selling of the products that infringed Inverness ’ patents".

As to authorising infringing conduct under section 13(1) of the Patents Act 1990 (Cth), it is infringement of a patentee's exclusive rights not only to exploit an invention but also to authorise another person to exploit it. The judge agreed. Liability is established where it is shown that the alleged infringer authorised exploitation in that he sanctioned, approved or countenanced the act of infringement. Here it was shown that Dr Appanna knew that the infringing act of the sale of the products would occur, had the power to prevent those acts and was under a duty to interfere but failed to do so.

An expensive loss: what profiteth a man who loses his money ...

In Betson Medical (Ireland) Ltd v Comptroller General of Patents [2010] EWHC 687 (Pat), an appeal to Mr Justice Kitchin (Patents Court, England and Wales) from the Comptroller in which judgment was given on 31 March 2010, the issue before the Court involved non-payment of renewal fees and its consequences.

In short, Betson filed his patent application in December 1996. Nearly three years later, in October 1999, he assigned his application to Betson Medical, the company he set up to exploit his invention. Although Betson and his company were well aware of the renewal date, neither could pay the renewal fee for the patent in December 2003 for lack of funds. Betson himself sought funding both from banks and pfrom rivate investors, but no money was made available to him to pay either the renewal fee and additional fee within the time limits and the patent lapsed.

In July 2005, Betson Medical filed an application for restoration under rule 41(1)(a) of the Patents Rules 1995. The Intellectual Property Office did not consider that even on a prima facie basis had the requirements for restoration been met. Betson Medical was given a hearing date for September 2009. At that hearing the application was considered under s 28(3) of the 1977 Act (as it then stood):

"If the comptroller is satisfied that - (a) the proprietor of the patent took reasonable care to see that any renewal fee was paid within the prescribed period or that the fee and any prescribed additional fee were paid within six months immediately following the end of that period, the comptroller shall by order restore the patent on payment of any unpaid renewal fee and any prescribed additional fee".

The respondent comptroller refused the application to restore since Betson Medical had not exercised reasonable care to see that the renewal fee was paid in time, or during the six month grace period. Betson Medical appealed and Kitchin J had then to consider whether Betson Medical, as proprietor of the patent, or Betson himself on its behalf, had taken reasonable care to see that the renewal fee and the prescribed additional fee in respect of the patent were paid by the expiry of the grace period.

Kitchin J appeared to face no difficulty in dismissing this appeal. On the evidence, the company had faced severe financial difficulties in the period up to and including June 2004 and Betson himself had made strenuous efforts to secure funding in order (i) to ensure the commercial exploitation of his invention and (ii) to pay renewal fees for all its patents. However, on the application of settled principles, Betson had not shown that he had taken reasonable care to see that the limited sum in respect of the patent in question was paid by June 2004.

PatLit feels that it is such a shame that, having not had the money when he had the patent, the claimant had to deploy his funds so fruitlessly once he did have it.

Some thoughts from Fordham on industrial applicability

"The chances are that if two sides are squabbling about a patent, it has some industrial applicability" -- so said Lord Hoffmann when introducing the topic at today's session of the 2010 Fordham Intellectual Property Conference. His Lordship then reviewed the Court of Appeal's decision earlier this year in Eli Lilly v Human Genome Sciences (here), in which the question arose as to the degree of proof required for predictability of the likelihood of a specific outcome (in this case, treatment for an unspecified disease of the immune system). The EPO had considered that likelihood of treatment for a class of diseases was sufficient, while the trial judge had considered that the likelihood had to be narrowed to a specific condition. This issue relates to that of breadth of claims, which are likely to be wider in juvenile sciences such as biotech. In this case the Court of Appeal did not describe the difference between the EPO approach and that of the British courts as one of policy; Lord Justice Jacob's court had undermined the principle that the British courts should keep their decisions in line with those of the EPO and was therefore wrong.