The Dolcera Blog

Microsoft was sued in 2007 by i4i, a company from Canada, or infringing on its patent for an editing tool it co-opted for MS Word. The technology gave Word 2003 and Word 2007 users an improved way to edit XML. In the initial hearings the lower courts ruled Microsoft willfully infringed on the Canadian company i4i’s patent.

Microsoft was ordered to pay i4i damages of $290 million. Also through an injunction it was prevented selling versions of Word containing i4i’s technology.

The case in point is the standard of proof that must be met by the company that challenges the validity of a patent in court. According to the law, the patents which are issued by the Patent Office solely on the basis of supporting information submitted by the patent applicant should be presumed valid. Since the 1980s, however, the Federal Circuit Court of Appeals, which oversees patent appeals, has required a challenge to a patent’s validity be proved by a heightened standard of “clear and convincing evidence,” which was an argument used by i4i and as opposed to the lower “preponderance of evidence” standard routinely applied in civil lawsuits which was used by Microsoft. The issue is far more than a technicality, as it can have far-ranging effects on innovation and technology businesses.

In the court, Microsoft argued that the patent held by i4i is invalid because the invention covered by the patent was already on sale by i4i more than a year before the patent application was even filed. Under the current patent law, a patent cannot be issued in such a situation.

However, in the case of i4i, the USPTO never considered the evidence of this sale in the first place. In this case, i4i itself discarded the evidence and hence itwasn’t available. The lawyers of i4i argued to the jury that since such evidence wasn’t available, Microsoft could not prove its invalidity case under the heightened “clear and convincing” standard. The jury agreed to this argument and an appeal was affirmed by the Federal Circuit.

Microsoft which was backed in this case by many giants like Apple, Facebook, Cisco etc. argues that creativity and innovation should be promoted and that simply patent laws should not govern such cases. They also argued for a change in the law which is being followed by the congress.

Smaller tech companies and venture capital firms, meantime, were rooting for i41. Lawyers for i4i and the Obama administration argued, however, that there’s little point in granting patents to inventors if corporations can simply infringe upon them with impunity.

Loudon Owen, i4i’s chairman said, “The bottom line is whether there’s a robust patent system, and whether or not if you get a patent, it means something. If the law goes the way Microsoft wants it to, it will mean it will be very easy to invalidate patents, which will make it hard to justify why one seeks a patent in the first place.”

In this tussle between a small firm and a giant of the IT industry, the ruling has been in the favor of i4i. Read the supreme court ruling here. This will not only impact Microsoft, but also smart-phone manufacturers and technology developers. With very few patent cases coming through to the supreme court, this ruling would also act as a reference for such legal cases. The decision of the jury increases the confidence of small firms in defining their progressions based on innovation and intellectual property assets.

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Shall we say the era of complete information disclosure has just begun? and hence the importance of full text patent searching. This blog post is subsequent to our recent post where we cited a classic patent suit where the ‘test of enablement’ was exercised.
Under section US112, the test of enablement requires the claims to be backed by full disclosure of the preferred embodiment in the specification. This tactic has been used by lawyers extensively to invalidate patents in the courts of law.
Hence, as a commercial information service provider the provision of the full text data becomes extremely important to search and analyze since the import of the inventive step may not be fully available from the claims.
In other words, there is potent challenge to perform a thorough patent search given the commercial patent database providers providing just the thumb nail view of the first page. My random informal meetings with Dolcera’s analysts go on to concur on one simple fact that in order to understand the utility of an invention, it is highly advised that a patent search is done on the full specifications of the patent.  They believe that the title, abstract and claims typically make one to understand the novelty and non obviousness while most patents have their utility residing in the full specification.
Further, it is only prudent to have a thorough patent search involving full specifications of the patents where the purpose of patent search is for litigations involving invalidation / infringement and also while searching the prior art. Time and again, it has become a thumb rule for a patent searcher to understand that the patents are often written with a purpose to obscure the patented invention.  We believe that the above reiterates the need to search on the full text and hence the key for future patent searches.
Alternately, the patent dashboard’s new version allows searching the full text of the patent even with simple boolean operators. The search snippets provided beside the pdf documents of patents is where the searched keyword is highlighted on the full text.

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http://www.cafc.uscourts.gov/opinions/09-1001.pdf

It is our contention that in the globalized world of manufacturing, where most of the manufacturing activity happens outside the developed world, having legally valid patents in the manufacturing hubs of China, Mexico or India can pay off handsomely. A legal right in those countries can ease gathering of evidence as can be seen in the case below where video shots of manufacturing process used in Mexico is used as admissible evidence.

This case pertains to an infringement claim won by Gemtron Corp. against Saint Gobain for refrigerator shelf manufacturing method and design.

Background:
Saint Gobain manufactures refrigerator components in Mexico and sells them in the United Sates. Gemtron Corp. has a patent for manufacture of refrigerator shelves where by a glass portion of the shelf is held to a polymeric base using ‘fingers’ and not ‘adhesive’ ( a traditional method) filed in both USA and Mexico.

Gemtron Corp. alleged that Saint Gobain was infringing on its patents since it was using a similar method for manufacturing its shelves - in which a glass portion is held to its polymeric base using ‘fingers’. Saint Gobain was countering Gemtron Corp. allegation saying that the claim 23 of the ‘673 Gemtron patent was only a ‘process’ patent and hence the end result from the process (the end design or the structural component) was not claimed. The CAFC rejected Saint Gobain’s plea on the grounds that the result of a claimed process which lead to a unique structural change were also by default patentable subject matter.

In order to refute Saint Gobain’s claims that its manufacturing process was significantly different than claimed in the patent, Gemtron Corp. showed videos of the manufacturing process used at Saint Gobain’s manufacturing site in Mexico. The video clearly proved similarity in the process used at Saint Gobain manufacturing site.

In the overall case argument, while the moot point was the ’structural component’ or the design of the shelf, it can be argued that the video showing Saint Gobain’s manufacturing process was also helpful in winning a non-technical jury’s verdict to prove wilful infringement at the district court level.

- Lakshmikant Goenka

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Red Hat Inc. and Novell Inc. are being sued by IP Innovation LLC. and Technology Licensing Corp. for patent infringement. The court filing claims that Novell and Red Hat infringed on the plaintiff’s patent for User Interface with Multiple Workspaces for Sharing Display System Objects as well as two other similar patents. This is the first patent infringement lawsuit involving Linux.

According to the lawsuit filed with the U.S. District Court for the Eastern District of Texas, Novell and Red Hat are accused of infringing on the patents by selling the Red Hat Linux system, the Novell SUSE Linux Enterprise Desktop, and the Novell SUSE Linux Enterprise Server. IP Innovation LLC. and Technology Licensing Corp. further further contend that the defendants “deliberately and willfully” infringed on the patents, stating that the defendants were previously notified of the infringement.

IP Innovation LLC. and Technology Licensing Corp. are seeking an injunction from the District Court plus damages including other relief that the court might find proper. Novell withheld comment until their attorneys could further review the court filing.
Red Hat Inc and Novell Inc are accused of violating three patents.

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Vonage has agreed to settle partially on a patent suit with Verizon after the company was faced with possible interruption of its service. Verizon alleges that Vonage is infringing on seven of its patents on voice-over-IP technologies. A joint statement read succinctly “The parties are pleased to have resolved this matter.”

In March of this year, a jury found that Vonage is infringing on three of the seven patents, awarding Verizon with $58 million in damages. The judge issued an injunction which was stayed pending an appeal. Nevertheless in September, the U.S. Court of Appeals upheld the earlier court decision. Vonage then filed a petition for a rehearing.

If Vonage wins a rehearing on either the ‘574 or ‘711 patent, or if the injunction is vacated as to the ‘574 or ‘711 patent, Vonage will have to pay Verizon $80 million. If Vonage does not win a rehearing on either the ‘574 or ‘711 patent, or if the stay is lifted reinstating the injunction, Vonage will pay Verizon $117.5 million.

Things got more interesting as AT&T filed a lawsuit against Vonage on October 17 for a patent on connecting a traditional telephone to the Internet. The suit was filed after two years of unsuccessful negotiations, however Vonage said they would resolve the matter with AT&T to prevent court proceedings.

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Apple agreed to settle a patent dispute with Burst.com, ending two years of litigation. Burst agreed not to sue Apple over current or pending DVR patents.

Under the agreement, Apple will pay Burst.com $10 million and get access to Burst.com’s patent portfolio, with some exceptions. Apple won’t have access to four of Burst.com’s current and pending patents, including three pending patents relating to digital video recorder (DVR) technology. Court costs, expenses and attorney’s fees will reduce the proceeds to Burst.com to $4.6 million.

Burst alleges that Apple infringed four patents for transmission of compressed audio and video files in iTunes, iLife, QuickTime and the iPod.

Apple was asked by Burst in 2004 to license some of its patents, saying they were at the pioneering heart of the iPod. In January 2006, Apple sued Burst.com in the U.S. District Court for the Northern District of California, seeking a judgment that the Burst.com patents were invalid and not infringed upon. Burst.com countersued in April 2006, alleging that Apple infringed four of its patents.

Bust also won a $60 million financial settlement from Microsoft in 2005 after a patent dispute over the transmission of music and video with its Windows Media Player.

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