Tag Archives: patent litigation

Future Issue: PATENT TYING.

Thinking about the possible future issues with regard to larger companies entering the “patent pooling” / patent enforcing business model, I believe a future issue might be the concept of “tying,” (a concept I learned about during my time in China) where a company is approached to take a license for patents relating to one or more of their products, and as a condition to accepting a license [in lieu of a threat to be sued for patent infringement], that company is forced to take licenses on patents that are only remotely relevant (or not relevant at all) to the subject matter in which their products cover. In other words, it seems to me that this could lead to an abuse of the patent system where companies would be forced to take licenses to practice patents they have no intention of practicing just to get the license that is forced upon them regarding the patent they are actually being accused of infringing. It obviously goes the other way too, namely, that companies seeking licenses for patents which they wish to practice might be forced to take licenses which they really don’t need just to get the license they are seeking. With companies having so much muscle these days, I see this as becoming a real threat that can cause some damage within the patent law system.

For example, see the articles, IEEE joins move to patent pools by Rick Merritt @ EE Times, and IEEE to get into the patent pool business? by Lawrence Ebert, to which I posted the comment below:

The prospect of another company (or organization) entering the “patent pooling” business is not unexpected. The patent pooling business model in my opinion is quite effective, profitable, and certainly poses more of a threat to infringing companies who would otherwise be hesitant to take a license where they were clearly infringing certain patents.

One topic I foresee as a future issue which I would enjoy reading in one of your future blogs is the idea of “tying” in regard to companies being coerced to take licenses to patents they don’t need and wouldn’t want. I would say that is a possible and realistic outcome of these big companies with litigation and licensing muscle entering the patent world.

If you are interested in a patent litigation attorney or a patent attorney in Houston, TX, I have started an informative website using the name Patent Prophet which will be a resource for those who wish to obtain a patent or for those who would like to find out how to prevent companies from stealing their inventions. Services include help with entering into IP Agreements & Licensing options, IP Enforcement and Litigation, Strategic Counseling, and much more.

Solicitor General’s patent infringement suit against California.

Solicitor General patent infringement suit against an aggressive State of California hiding behind 11th Amendment.

I was reading this morning’s post on the Patently-O Patent Law Blog about the Biomedical Patent Management Corp. (BPMC) v. California Department of Health Services (on petition for certiorari) brief by the Solicitor General.

In short, I feel that the Court is spending too much time looking for the perfect case to justify the ruling (a.k.a. law) they are looking to implement. However, I believe that injustice is being done because bad law is being formed on the lower courts because the Court is not hearing these poorly-decided cases. I feel this is bad practice, and I implore the courts to stop this practice. Their job at their level is not to “legislate from the bench,” but to resolve issues where the lower courts have made errors. My comments to the Patently-O article is below:

TJ, I think the problem is that the SG is looking to pick and choose the best cases to create the law they’re looking to implement. Metabolite v. Labcorp was a good candidate to take on the “thinking step” patentability issue, but nothing significant happened, thus no material change to the patent law system. Now, we have a case where the Cali gov’t is enforcing their patents, but hiding under 11th Amendment immunities. Again, the SG claimed this was not the right case to create this kind of law, noting that the issue is really a problem. I can think of a few more examples of this off the top of my head.

Pardon the baseball analogy, but it’s unfortunate that the courts are looking for a slow pitch down the middle to assert the law they wish to implement. Perfect cases only come once in a while, and we are racking up issues that need to be addressed, and the courts keep going silent. This is not justice — not for the litigants, not for the patent law system, and not for the country. Stop looking for the perfect cases, and make the wronged litigants whole by hearing cases where there has been an injustice done at the lower courts, because by being SILENT, you are creating precedent and BAD LAW. Just stop it.

The Court needs to put a stop to looking for the “perfect” cases so that they can “legislate from the bench” and must return to adjudicating cases to right a wrong when the lower courts have gone awry.

If you are interested in a patent litigation attorney or a patent attorney in Houston, TX, I have started an informative website using the name Patent Prophet which will be a resource for those who wish to obtain a patent or for those who would like to find out how to prevent companies from stealing their inventions. Services include help with entering into IP Agreements & Licensing options, IP Enforcement and Litigation, Strategic Counseling, and much more.

Aristocrat Technologies v. Int’l Game Technology (IGT) decision.

I just read the US Court of Appeals opinion for the Aristocrat v. International Game Technology (IGT) case, and I want to mention that I am unhappy with the decision and I feel that the judge played semantics with the availability of defenses for patent infringement suits, although I do believe he properly applied the law on its face. My opinion is that the law in its present form is broken and needs a bit of revision.

To summarize the lower court’s decision, in short, when Aristocrat was prosecuting their gaming patent, they paid a fee one day late. While this is a minor oversight, bottom line, according to the rules, this is enough to have the USPTO determine that the patent was abandoned and they did. Now according to the law, the applicants can only revive the abandoned application by stating that the lateness and its resulting abandonment was unavoidable. Yes, there are provisions regarding fees that state the cost of reviving an abandoned patent under the “unintentional” standard, but reading the statute on its face only allows an abandoned patent to be revived under the higher “unavoidable” standard. Whether this should be changed is a moot issue for now. The applicants claimed that the abandonment was “unintentional,” the USPTO said okay and revived the application, which later issued into US 7,056,215. Aristocrat later filed a continuation patent which also issued into US 7,108,603.

The lower court held that because the USPTO revived the abandoned application under the “unintentional” standard, because this type of revival is not supported by the statute on its face, the ‘215 patent is invalid (as is its child, the ‘603 patent).

Here in the US Court of Appeals decision, the judge reversed the lower court opinion stating that regardless of whether the patent is valid or not, “improper revival” of an abandoned patent is NOT a valid defense in an infringement action. What?!? He then goes ahead citing weak proofs as to why certain defenses are defenses and why others are not, and because improper revival was not one of those defenses that were explicitly listed as a defense, the judge precluded its availability completely ignoring the catch-all provision of 35 USC s.282(4) “Any other fact or act made a defense by this title.”

Now here is the pickle. Judge Jenkins appears to be technically correct in that improper revival is not explicitly stated as a defense to an infringement action so it’s not so clear whether section 282(4) applies to improper revivals of abandoned actions. However, the USPTO improperly revived the application and issued a patent which it should not have because it went beyond the powers granted to it.

So what do we do here? The patent should NOT have been issued, so technically, it SHOULD be invalid, as should its child. But, the appellate court interpreted the issue of availability of a certain defense, not the issue of invalidity based on a procedural and/or legal defect in the prosecution.

My opinion is that IGT will likely appeal to the Supreme Court, but regardless of whether they hear the case, their decision will spark some legislative controversy. If the Supreme Court hears the case and determines that 35 USC section 282(4) applies to the defense of improper revival, people will ask “what else constitutes a defense?” In my opinion, this is not a bad thing. I believe that if an examiner makes an error in the prosecution and a patent issues which should not have issued, there is nothing wrong with a patent litigation attorney later “combing the file-wrapper” looking for procedural and/or legal reasons why the patent being asserted is invalid. This is and should continue to be an available method of invalidating a patent. In short, if a patent should not have been issued, it should not have been issued, period! The problem with this alternative is that the Supreme Court by invalidating the patent will loosely interpret section 282(4) and strictly read the provision requiring the higher “unavoidable” standard, and this would be a contradiction.

Alternatively, if the Supreme Court hears the case and determines that the Court of Appeals was correct, it will essentially provide the rule that “notwithstanding certain exceptions which we will deal with on a case-by-case basis, regardless of what error the USPTO examiner committed during prosecution, if a patent issues, it is valid.” In its essence, the Supreme Court would give the USPTO full power to act outside its legislated powers awarding patents which should be invalid and vice versa. This is not an acceptable option. The USPTO is bound by the laws just as any federal agency should be. It has no rights to interpret the laws to mean something that is contra to powers explicitly granted. Thus, if the Supreme Court hears the case and affirms the Court of Appeals’ decision, who will control the USPTO and its examiners who make incorrect decisions?

In sum, this is one more case of where the law should have written something that it didn’t, and like many others, it needs a revision to clarify Congress’ position of 1) whether the unintentional standard is enough to revive an abandoned patent, and 2)whether 35 USC s.282(4) should include other defenses not explicitly stated as being a defense.