April 2010

Of late, we have commented on several malpractice actions brought by disgruntled clients against their patent attorneys. However, the most unusual malpractice case to come to our attention involves a claim that a patent application was rejected by the Patent Office because it contained material copied from a patent previously granted to another party. (Cold Spring Harbor Lab v. Ropes & Gray)

Occasionally we read about a lawsuit which causes us to question the business acumen of the plaintiff. In other words, what the heck were they thinking when they filed the suit? One such suit is North Face Apparel Corp. v. James Winkleman et al.

For a long time, it was believed that N.P.E.s (nonpracticing entities or trolls, depending upon your viewpoint) lacked standing to bring a patent infringement action in the I.T.C. (the International Trade Commission) because they could not satisfy the “domestic industry” requirement, i.e. that a domestic industry exists or is in the process of being established, with regards to the specific articles protected by the patent for which enforcement was sought. Then, the I.T.C.

Sometimes a patentee, no matter how well “prepared” (lawyerspeak for “coached or rehearsed”), simply can’t remember his lines and deviates from the prepared script, offering testimony establishing that the patent-in-suit is invalid. Not surprisingly, this can prove fatal to the patentee’s case. (Delaware Valley Floral Group, Inc. et al. v. Shaw Rose Nets, LLC et al.)

Late last month, Data Treasury, an N.P.E., won a judgment of $27M against U.S. Bancorp for infringement of two business method patents related to processing of checks. The jury found the infringement to be willful, opening the door to a possible trebling of the damages amount. Granted, this was an East Texas jury, but an award of this magnitude to a non-practicing entity (a “troll” in corporate lingo) with respect to business method patents is rather remarkable and merits some study. How did the plaintiff achieve this remarkable result?

Much has been written about “patent reform” and the proposed role of the trial judges as “gate keepers” with respect to damages theories and evidence. Well, everyone can stop writing; the courts have already enacted this “reform.” (IP Innovation, LLC v. Red Hat, Inc. et al.)

A few weeks ago, we commented on the briefs submitted by the parties seeking summary judgment on the issue whether isolated human genes comprise patentable subject matter under U.S. patent law (see Let’s Get Serious). (Association for Molecular Pathology et al. v. U.S. Patent and Trademark Office et al.)

Way back in 2008, the C.A.F.C. overturned what had been considered well-established law, holding that the ONLY test for infringement of a design patent was the impression of the “ordinary observer.”

Infringement no longer required that the accused product incorporate the “point of novelty” of the patented design. Like a pebble thrown into a pond, this decision created ripples. Now, we are seeing two of them.

We've written a couple of blog posts about the travails of the Greenberg Traurig law firm, which has been accused of legal malpractice by Leviton Manufacturing Co., Inc. (see "What Were They Thinking?" and "Round Two").

Just a couple of weeks ago, we wrote about the “new patent trolls” – the folks who seek to make a living out of suing product manufacturers allegedly guilty of “mismarking” their products, that is to say, marking the products with the numbers of expired patents or patents which do not cover the product on which they are marked.

While we hesitate to claim credit for it – notice the author’s becoming modesty – there is a clear and growing backlash to this new and rapidly growing industry.

If you change your mind about an agreed settlement and refuse to sign the settlement document, you’re not bound by the settlement agreement, right? Wrong! (MedPointe Healthcare v. Walter Kozachuk)

Infringers, those who fear that they may be accused of infringement, and those planning to infringe, have been emboldened by recent decisions of the C.A.F.C. to bring a declaratory judgment action. The underlying premise, when bringing a declaratory judgment action, is that litigation is inevitable.

So rather than waiting for the axe to fall, the plaintiff in such an action seeks to litigate at a time and, most importantly, in a venue of its choosing. The limiting factor is the need for “standing,” i.e. the existence of a controversy of “sufficient immediacy and reality.”

Much has been written, of late, about so-called “patent trolls,” i.e. small patent owners with the temerity to sue large corporations for patent infringement.¹ Patent trolls allegedly buy patents with the sole purpose of enforcing them – the scoundrels!

Well, now there is a new kind of troll, the “marking troll,” which doesn’t have to even buy a patent! The marking troll sues companies which “mismark” their products – mark them with the number of a patent which doesn’t actually cover the product or, more often, the number of an expired patent.

You would think that it would be easy to determine where a corporation’s “principal place of business” is located. If so, you would be wrong. (Hertz Corp. v. Friend)

Early last month, two very wise attorneys from Pepper Hamilton LLP wrote a brief paper extolling the advantages of settling disputes through face-to-face meetings, rather than a stream of letters or email messages. The points they make are worthy of the reader’s serious consideration.