Yesterday, March 6, 2013, in Radio Systems Corp. v. Lalor, No. 2012-1233, the Federal Circuit (Newman, Moore, and Reyna) held that equitable estoppel barred infringement claims for one patent against an alleged infringer’s successor-in-interest, but did not bar infringement claims for a related patent that issued after the misleading conduct began.  The court also held that “invalidity cannot be an alternative ground for affirming a judgment of noninfringement absent a cross-appeal.”  This case provides incremental insight into both equitable estoppel and appellate procedure.

In February 2005, Lalor and Bumper Boy, Inc. (collectively, “Bumper Boy”) sent a demand letter to Innotek, accusing Innotek’s UltraSmart electronic dog collar of violating Bumper Boy’s U.S. Patent No. 6,830,014.  Innotek responded in April 2005, claiming that the patent was invalid based on prior art.  Bumper Boy did not respond and remained silent for about four-and-a-half years.  In December 2005, Bumper Boy filed a continuation-in-part of the ’014 Patent that issued in September 2007 as U.S. Patent No. 7,267,082.  Meanwhile, in September 2006, Innotek was acquired by Radio Systems.  In November 2009, Bumper Boy sent a demand letter to Radio Systems accusing infringement of both the ‘014 and ‘082 Patents by the UltraSmart electronic dog collar and other products.

Radio Systems filed this declaratory judgment action against the patentee Bumper Boy.  The district court granted summary judgment on the issue of infringement based upon claim construction for several of the accused Radio Systems products, and upon equitable estoppel grounds for the UltraSmart electronic dog collar.  Bumper Boy appealed.

The Federal Circuit affirmed much of the noninfringement decision, agreeing with the district court’s claim construction-based decision.  The Federal Circuit also agreed that equitable estoppel barred Bumper Boy from enforcing the ’014 patent against Innotek’s UltraSmart collar due to: the four-and-a-half-year silence following the 2005 demand letter was misleading, Innotek’s relied on that silence in expanding its product line and selling ownership of Innotek to Radio Systems, and material economic prejudice would arise in enforcing patents now after Innotek’s substantial investment in new products.  The Federal Circuit also confirmed that equitable estoppel protects successors-in-interest of alleged infringers where privity has been established—e.g., Radio Systems’ acquisition of Innotek.

The Federal Circuit, however, reversed the district court’s decision to equitably estop enforcement of the ’082 patent (the continuation-in-part), holding that “[r]egardless of whether the ’082 patent claims are supported by the subject matter in the ’014 patent—and therefore entitled to claim priority to its filing date—the patents contain claims of a different scope.  Quite simply, the ’082 patent claims could not have been asserted against Innotek or Radio Systems until those claims issued.”

The Federal Circuit also granted Bumper Boy’s motion to strike on appeal Radio Systems’ alternative invalidity argument.  Because a judgment of invalidity is broader than a judgment of noninfringement, allowing invalidity to be argued as an alternative ground for affirmance of the patentee’s appeal would impermissibly enlarge the scope of the noninfringement judgment and exceed the Federal Circuit’s jurisdiction.  The Federal Circuit noted that a separate cross-appeal would be the appropriate vehicle for raising invalidity arguments in an appeal of a noninfringement judgment.

  • Over at Patent Progress, Dan O’Connor has an interesting post
    Image courtesy of athenatechs.com

    in which he addresses the recent use of standard-essential patents in the “smartphone wars” within the larger context of the standard-essential patent universe.  Like several of the entities who submitted public comments on the FTC-Google consent decree, O’Connor argues that when it comes to dealing with patent issues in the high-technology arena, standard-essential patent issues are just a small part of a larger puzzle.

  • In other standard-essential patent news, a group of economists from the Competition Policy Institute recently published a paper calling for greater clarity in standard-setting organization patent and licensing policies.  More from Law360.
  • This past Friday, Judge Lucy Koh issued an order vacating nearly half of the $1.05B verdict that a Northern District of California jury had awarded to Apple for Samsung’s infringement of various Apple intellectual property.  Because the jury had based its damages figures for some of the Samsung products on improper legal theories or incorrect notice dates, Judge Koh ordered a new trial for damages on these products.  More on Judge Koh’s ruling from Groklaw and AllThingsD.
  • Lastly, you can’t get away from sequestration talk — not even here.  Dennis Crouch at Patently-O takes a look at how the sequester will affect the USPTO and the Federal Circuit.

Last week, it was reported that Apple won a decision against Samsung in Tokyo, Japan, where a judge ruled that Samsung failed to negotiate in good faith with Apple before bringing patent infringement claims over its standard-essential patents.  Until today, the court’s actual ruling was not publicly available.  But yesterday, Apple submitted a “Notice of New Facts” and a redacted copy of a translation of the Tokyo court’s decision to the U.S. International Trade Commission in ITC Inv. No. 337-TA-794, and this submission hit the ITC’s docket this morning.

Recall that the -794 case is the ITC’s investigation over Apple’s alleged infringement of several Samsung patents (including two 3G cellular standard-essential patents), and that a Final Determination by the Commission is due no later than this Thursday, March 7 — and that the issue of the propriety of issuing an exclusion order for standard-essential patent infringement has been hotly debated here.  Apple argues that the Tokyo court’s decision and factual findings “underscore that it would be against the public interest to issue an exclusionary remedy to Samsung on declared-essential patents.”

Continue Reading Apple cites recent Japanese court ruling as evidence against standard-essential patent exclusion order (ITC Inv. No. 337-TA-794)

ShieldThere’s been much ado in the patent community over the past week over the re-introduction of H.R. 845, the Saving High-Tech Innovators from Egregious Legal Disputes Act of 2013 — more commonly known as the SHIELD Act.  This legislation, co-sponsored by Rep. Peter DeFazio (D-OR) and Rep. Jason Chaffetz (R-UT), seeks to “protect American tech companies from frivolous patent lawsuits that cost jobs and resources” by  implementing a “loser pays” fee-shifting paradigm for patent infringement cases brought by certain types of non-practicing entities.  (A prior version introduced last year, H.R. 6245, was much more limited in its implementation of fee-shifting.)

While this is a bit off-topic for our blog, we thought this proposed legislation is sufficiently important to our readers that we’d do a brief post on it — especially given the penchant by some NPEs to assert standard-essential patents.  The legislation (at least as it’s currently drafted) has raised a lot of questions and issues and has generated a lot of commentary (both pro and con) from the business and legal communities.  After the jump, we’ll run through a quick summary of the provisions of the SHIELD Act, some first impressions about questions it may raise, and provide some links to a variety of others’ views on the proposed law.

Continue Reading The new (and improved?) SHIELD Act

A couple of weeks ago, we noted a peculiar minute order emanating from Judge James L. Robart’s courtroom in the Microsoft-Motorola RAND case.  Based on his review of Google’s AVC/H.264 standard-essential patent pool license agreement with MPEG LA, Judge Robart asked the parties to submit short letter briefs addressing two questions regarding the relevance of the Enterprise License provision (Section 3.1.7) to any grantback license that Motorola (as a subsidiary of Google) might owe to Microsoft.

Late Friday, the parties submitted their respective answers to the court’s questions (Microsoft’s / Motorola’s).  The parties’ answers and arguments show just how millions of dollars in royalties could turn on the interpretation of just a couple of short phrases in the MPEG LA agreement.  After the jump, we’ll provide a short summary of both Microsoft’s and Motorola’s positions.  Essentially, though, the parties’ arguments boil down to this — Was the MPEG LA agreement’s grantback provision designed to extend to all affiliates of a given licensee, whether those affiliates receive any benefits under the agreement or not?

Continue Reading Microsoft, Motorola submit final arguments to Washington court on the relevance and effects of Google-MPEG LA AVC/H.264 agreement to a Microsoft-Motorola RAND license

Earlier this week we noted that Huawei and ZTE have asked the ITC to stay its investigation into InterDigital’s complaint of 3G/4G standard-essential patent infringement.  This was done in part because Huawei and ZTE have requested that the District Court of Delaware to expedite a determination of a FRAND rate for InterDigital’s patents.  Yesterday, InterDigital filed virtually identical opposition briefs in both cases (Opp. to Huawei / Opp. to ZTE), in which it urged the court to deny the motions — arguing that it is improper for Huawei and ZTE “to seek a purely hypothetical and advisory opinion in the form of an expedited ‘FRAND rate’ determination” while still maintaining an ability to refuse to pay in the event the patents are later found invalid or non-essential/not infringed.  This is an interesting issue surrounding FRAND licensing that has been the topic of much debate lately.

Continue Reading InterDigital calls Huawei/ZTE’s requests for expedited FRAND determinations “impractical” and “improper”

On March 5, 2013 at 2:00pm, the Intellectual Property Owners Association is holding a webinar to discuss the potential implications that the FTC-Google consent decree may have on the world of standard-essential patents.  The webinar is taking place as part of of IPO’s weekly IP Chat Channel series.  David W. Long, a member of Dow Lohnes’s Litigation group and a co-author of The Essential Patent Blog, will be one of the webinar presenters.  Details on the webinar and information on how to register for it is after the jump.

Continue Reading Upcoming IPO webinar on standard-essential patents and FTC-Google consent decree features Dow Lohnes’s David Long

A quick update for those interested in the Apple-Motorola Federal Circuit FRAND appeal:

Last week, the U.S. Supreme Court issued its opinion in Gunn v. Minton, where the Court determined that a plaintiff’s patent litigation-related state law malpractice claim did not “arise under” the federal patent laws and did not create federal jurisdiction under 28 U.S.C. § 1338(a) (the provision that provides for federal jurisdiction of patent cases).  Earlier this week, Motorola Mobility filed a Submission of Supplemental Authority with the Federal Circuit, arguing that the Supreme Court’s decision bolsters Motorola’s argument that Apple’s FRAND-related appeal should be dismissed or transferred to the Seventh Circuit.  Motorola asserts that just as in Gunn — where the Supreme Court found that the presence of some insubstantial patent-related issues were insufficient to create federal jurisdiction — Apple’s claims here “do not require the resolution of any necessary or substantial patent issues.” (emphasis in original)

Apple submitted a brief response to Motorola’s submission regarding the applicability of Gunn, where Apple argues that Gunn is distinguishable from the facts of the Apple-Motorola case.  According to Apple, the Supreme Court’s decision “has no bearing” on Federal Circuit jurisdiction here, because Apple’s declaratory judgment claims were created by federal patent law (whereas in Gunn, the legal malpractice claims were created by state law).  Motorola appears to dispute Apple’s contention that Apple’s DJ claims were actually created by the patent laws, so this is an issue that the Federal Circuit is going to have to sort out.

FTCYesterday we covered several public comments submitted to the FTC by various professional organizations and trade/industry associations surround the FTC-Google consent decree.  Today, we’re here to tackle the submissions from several large companies that chose to comment on the FTC order.  These companies include Apple, Ericsson, Microsoft, Qualcomm, and Research in Motion.

Continue Reading FTC-Google public comments round-up #2: Tech companies have their say