Earlier this month, the ITC issued a landmark decision and exclusion order, ruling that certain Apple products should be excluded from entry into the United States because they infringe a Samsung 3G-essential patent.  As we explained in a follow-up post, the ITC doesn’t have the final word, though — by law, the President has the power to disapprove of an exclusion order for public policy reasons.  (This power has since been delegated to the Office of the United States Trade Representative (USTR).)  In a high-stakes, high-profile case such as Samsung-Apple, you’d expect the parties to continue the fight at every level — and sure enough, that’s what has happened.

As noted by Florian Mueller of FOSS Patents, last week both Apple and Samsung submitted arguments to the USTR.  Mr. Mueller got his hands on public, redacted versions of the documents, which we’ve linked to below:

After the jump, we’ll take a more in-depth look at each party’s arguments.

Continue Reading Apple, Samsung take their standard-essential patent battle to the U.S. Trade Representative

Today, Tuesday, June 25, 2013, in Commil USA v. Cisco Systems, No. 2012-1042, the Federal Circuit (Newman (concur/dissent), Prost, and O’Malley (concur/dissent)) reversed a finding of induced infringement where the jury instruction erroneously used a negligence standard and the district court erroneously excluded rebuttal evidence of the accused infringer’s good faith belief that the patent was invalid.  This case provides incremental insight into the intent requirement for induced infringement.

The jury was instructed to find inducement if “Cisco actually intended to cause the acts that constitute direct infringement and that Cisco knew or should have known that its actions would induce actual infringement.”  The Court held that this instruction erroneously applied a negligence standard for induced infringement, in violation of the Supreme Court’s requirement in Global-Tech v. SEB that the plaintiff show that the defendant have “actual knowledge or willful blindness” that the induced acts constitute patent infringement.

The Majority also held that the district court erred by excluding evidence of the accused infringer’s good faith belief that the patent was invalid to rebut a charge of induced infringement.  The Majority held that such evidence—while not dispositive—“should be considered by the fact-finder in determining whether an accused party knew ‘that the induced acts constitute patent infringement.’”  The Majority explained that such an approach is consistent with precedent holding that a good faith belief of non-infringement is relevant evidence that should be considered by the fact-finder.

Judge Newman dissented on the latter point, indicating that only a good faith belief of non-infringement — not any belief regarding validity — is relevant to the issue of induced infringement.

An annotated copy of the case is at this link: Commil v. Cisco.

On June 21, 2013, in Ultramercial v. Hulu, No. 2010-1544, the Federal Circuit (Rader, Lourie (concur), O’Malley) reversed the district court’s grant of a Rule 12(b)(6) motion to dismiss on grounds that the computer-implemented invention was not patent eligible under § 101.  This case provides incremental insight into the patent eligibility of computer-implemented inventions following the Federal Circuit’s recent en banc stalemate in CLS Bank.

The patent claims are at issue directed to a method that allows a consumer to receive a copyrighted product (e.g., song, movie, book) for free over the internet in exchange for viewing an advertisement where the advertiser pays for the copyrighted product.  The patent challenger (WildTangent) filed a Rule 12(b)(6) motion to dismiss based on the patent not claiming patent-eligible subject matter.  The district court granted the motion.

The majority opinion, written by Judge Rader, initially noted that it should be “rare” to dismiss a patent case at the pleading stage based on patent eligibility given the many factual issues that such an invalidity defense entails.  The majority then reviewed patent eligibility jurisprudence, concluding that Section 101 defined broad categories of patent subject matter, that the definition of “process” itself was intended to be broad, and that judicially-created exceptions (laws of nature, physical phenomena, and abstract ideas) must be narrowly applied.  The majority further stated that patent ineligibility must be proven under the high clear and convincing evidence standard.

The majority then reviewed several “guideposts” on patent eligibility given by the Supreme Court, which will be more readily reviewed in the attached annotated version of the decision.

This particular case involved the “abstract idea” exception—particularly, the “age-old idea that advertising can serve as currency.”  The majority ruled that the abstract idea exception did not apply in this case, because the claims are directed to “a particular internet and computer-based method for monetizing copyrighted products” consisting of ten steps where “may of these steps required intricate and complex computer programming.”

The majority also supported the patentability of computer programs generally, stating that “a programmed computer contains circuitry unique to that computer” and “could be claimed in terms of a complex array of hardware circuits, or more efficiently, in terms of the programming that facilitates a unique function.”

Judge Lourie concurred “in the result” but expressed concern that the majority opinion many not have “concisely and faithfully” followed the Supreme Court’s Prometheus decision and “track[ed] the plurality opinion of five judges” in the Federal Circuit’s recent en banc CLS Bank decision.

Yesterday we noted that Microsoft and Motorola are arguing over a couple of issues in the lead-up to the August breach of contract jury trial taking place in Judge Robart’s court in Seattle.  The two issues are only tangentially related: Microsoft would like Judge Robart to release the $100 million bond that he previously required Microsoft to post as security for the preliminary injunction that prevented Motorola from enforcing a German standard-essential patent injunction; Motorola argues that Microsoft has failed to produce discovery that supports its claim for RAND breach-related damages that stems from measures Microsoft took to move its German distribution center, in case Motorola did obtain and enforce an injunction.

Judge Robart set an expedited “letter-briefing” schedule on these issues and will hold a telephonic oral argument next week.  After the jump, we’ll take a quick look at the parties’ briefs and arguments.

Continue Reading Microsoft-Motorola update part two: “Bond. $100M Bond.”

It’s been relatively quiet in the Western District of Washington over the past couple weeks, as Motorola and Microsoft move forward toward an August jury trial on Microsoft’s RAND-based breach of contract claims.  But according to a minute order filed by the court this past Tuesday, this week the parties raised two separate disputes for expedited court resolution:

  1. Microsoft is requesting that Judge Robart release the $100 million bond that he previously ordered Microsoft to post in connection with his imposition of a preliminary injunction preventing Motorola from enforcing standard-essential patent-related injunctions in Germany.  Microsoft claims that it has tendered the amount it would owe under Judge Robart’s RAND-setting opinion for past damages to Motorola, and that its total payments could never come anywhere near the $100M bond amount.  Thus, Microsoft argues that the bond is no longer necessary to secure Microsoft’s payment of RAND royalties.
  2. The issue raised by Motorola is one we have heard about before — Microsoft’s claim for RAND breach-related damages based on Microsoft moving its European distribution center from Germany to The Netherlands.  Motorola claims that it has been attempting to take discovery regarding the decision-making process surrounding the distribution center move, but that Microsoft’s corporate witnesses have been ill-prepared to testify (or have asserted privilege).  According to Motorola, Microsoft has refused to present additional witnesses.  Motorola wants the court to compel Microsoft to produce a prepared corporate designee for a deposition, or alternatively preclude Microsoft from advancing its damages theory at trial.

Judge Robart directed the parties to file opening briefs by June 18, responsive briefs by June 20 (today), and reply briefs by June 24.  He also scheduled a telephone conference for June 25 at 3pm to hear the parties’ arguments.

We’ll provide a summary later today or tomorrow addressing the arguments set out in Microsoft’s and Motorola’s respective opening and responsive briefs.  But if you can’t wait for that, you can take download the parties’ opening briefs from the links below.

[13.06.18 MS Letter to Court re Release of Bond]

[13.06.18 Motorola Letter to Court re Discovery Dispute]

Back in 2011, Intellectual Ventures fired off a patent infringement complaint against Motorola Mobility in the District of Delaware.  That case is scheduled to go to trial early in 2014  But today, Intellectual Ventures upped the ante, announcing that it has filed a second patent infringement complaint against Google subsidiary Motorola Mobility, choosing this time to file in the Southern District of Florida (where Motorola has a facility, in Plantation, FL).

[Intellectual Ventures v Motorola Mobility (S.D. Fla.)]

IV has asserted a total of seven new patents against Motorola.  The accused functionality appears to include both technology standards and non-standard features of Motorola’s products.  The specific standards implicated by IV’s infringement claims are the IEEE 802.11 Wi-Fi standards, as well as certain ETSI/3GPP cellular standards (GPRS and LTE).

As a remedy for the accused infringement, IV is seeking damages, plus costs and attorneys’ fees (but no injunction).  The full list of patents asserted by IV is below, along with a brief description of the accused functionality:

  1. U.S. Patent No. 5,790,793, titled “Method and system to create, transmit, receive and process information, including an address to further information.”  Motorola’s products implementing MMS (multimedia messaging service) technology are accused of infringing this patent.
  2. U.S. Patent No. 7,136,392, titled “System and method for ordering data messages having differing levels of priority for transmission over a shared communication channel.”  Motorola’s products that comply with the IEEE 802.11n wireless networking standard are accused of infringing this patent.
  3. U.S. Patent No. 6,121,960, titled “Touch screen systems and methods.”  Motorola’s products that use Google’s Android operating system are accused of infringing this patent.
  4. U.S. Patent No. 7,382,771, titled “Mobile wireless hotspot system.”  Motorola’s products that provide “Wi-Fi hotspot access” via the IEEE 802.11n wireless networking standard are accused of infringing this patent.
  5. U.S. Patent No. 7,564,784, titled “Method and arrangement for transferring information in a packet radio service.”  Motorola’s products that comply with the ETSI General Packet Radio Service (GPRS) cellular standard are accused of infringing this patent.
  6. U.S. Patent No. 6,170,073, titled “Method and apparatus for error detection in digital communications.”  Motorola’s products that comply with the ETSI 3GPP and/or 4G Long-Term Evolution (LTE) standards are accused of infringing this patent.
  7. U.S. Patent No. 7,848,353, titled “Method, communication system and communication unit for synchronization for multi-rate communication.”  Motorola’s products that comply with the LTE standard are accused of infringing this patent.

It should come as no surprise to those familiar with Intellectual Ventures that IV was not the original assignee of the patents-in-suit — these patents have been assigned to IV over the years, with former owners of the patents including Nokia, Spyder Navigations (who, according to this site, is a Nokia-related “privateer” that was managed by IV), Ninety Portals, IPWireless, Inc., Intersil, Conexant, In Motion Technology, and Infologix, among others.

  • In case you missed it on Friday, an en banc Federal Circuit ruled that it has jurisdiction to hear an appeal of liability issues prior to a determination on damages or willfulness.  Many have speculated this will lead to increased bifurcation of liability and damages issues during patent cases.  (Patent Alert – Bosch v. Pylon)

Today, June 14, 2013, in Robert Bosch LLC v. Pylon Manufacturing Corp., No. 2011-1363, 1364, an en banc Federal Circuit ruled that parties can appeal a decision on liability in patent infringement cases before there has been a trial on damages or willfulness.

Under 28 U.S.C. § 1292(c), the Federal Circuit has exclusive jurisdiction “of an appeal from a judgment in a civil action for patent infringement which … is final except for an accounting.”  The issues presented were whether, in a case where infringement liability is bifurcated from damages and willfulness, the Federal Circuit has jurisdiction to hear an appeal from the liability phase while damages and willfulness have yet to be tried — essentially, “what is an accounting?”

The court analyzed the history of an accounting, finding that the high cost of an accounting was relevant to the decision (before the merger of law and equity) to allow for appeal before an accounting.  The court found that reasoning relevant today.  “Modern patent damages trials, with their attendant discovery, are notoriously complex and expensive.”  The court thus found that an accounting included a determination of damages.

The majority also found that a determination of willfulness fell within the definition of an accounting, citing historical cases and the appellant’s failure to cite cases that show , in enacting § 1292(c), Congress “intended to disturb the practice of determining willfulness as part of an accounting.”

The Federal Circuit further stated “we wish to make clear that district courts, in their discretion, may bifurcate willfulness and damages issues from liability issues in any given case [and] have the authority to try these issues together or separately.”

Judges Moore and Reyna dissented from the court’s finding that willfulness was part of an accounting.  Judges O’Malley and Wallach dissented from the court’s ruling as to both damages and willfulness.

Over the past couple weeks, a jury trial was held in Tyler, Texas on Ericsson’s November 2010 complaint that wireless equipment makers D-Link Corp., Belkin International, Netgear, Acer, Gateway, Dell, and Toshiba infringe several Ericsson patents related to the IEEE 802.11 wireless networking standard and 802.11-compliant equipment (case no. 6:10-cv-00473).  Yesterday, the jury returned its verdict, finding that the defendants infringe the claims of several patents and awarding damages to Ericsson.

[Ericsson v D-Link Jury Verdict]

The jury awarded approximately $8 million in total damages to compensate Ericsson for the defendants’ past infringement, apportioned as follows:

  • D-Link: $435,000
  • Netgear: $3,555,000
  • Acer/Gateway: $1,170,000
  • Dell: $1,920,000
  • Toshiba: $2,445,000
  • Belkin: $600,000

Note that the jury verdict really only addressed infringement, validity, and past damages issues.  We will keep an eye on the post-trial developments in this case to see if any particularly interesting standard-essential patent issues (injunctive relief, RAND royalty limitations, etc.) arise.

Earlier this week, we provided an update on the multitude of WiFi-related infringement lawsuits brought by non-practicing entity Innovative Wireless Solutions LLC against various hotels and restaurants in Texas, noting that IWS had dismissed these suits (albeit without prejudice).  We had discussed that this was a decidedly “un-Innovatio-like” turn in the cases — but yesterday brought a development that makes this series of disputes much more like the ones in the Northern District of Illinois involving Innovatio:  Cisco Systems Inc., a supplier of WiFi equipment for many of the hotels accused of infringement, got involved.  And Just like it did with Innovatio, Cisco here filed a declaratory judgment action against IWS, seeking declarations of invalidity and non-infringement as to IWS’s three asserted patents.

[UPDATE] In addition to Cisco, Hewlett-Packard has also filed a declaratory judgment action against IWS.  The link is below, and more details on that complaint are at the bottom of this post — including information about a potential license defense. [/UPDATE]

[SECOND UPDATE] On Friday, June 14, Ruckus Wireless, another WiFi equipment supplier, also filed a declaratory judgment complaint against IWS.  This complaint is very similar to the one filed by Cisco. [/SECOND UPDATE]

[Cisco Systems Inc v Innovative Wireless Solutions LLC Complaint]

[Hewlett-Packard-Company v. Innovative-Wireless-Solutions-LLC Complaint]

[Ruckus Wireless v. Innovative Wireless Solutions Complaint]

Cisco’s complaint, filed in the Western District of Texas (where Rackspace has chosen to take on noted NPE Parallel Iron in another DJ action), includes some particularly harsh words for IWS — Continue Reading WiFi equipment suppliers Cisco and HP step in and file declaratory judgment actions against Innovative Wireless Solutions LLC