March 2012

Divided Infringement and Non-Infringement

A patent claim for configuring a “satellite” credit card of a main credit card was not infringed directly by any defendant, nor was the claim directly infringed by any third party, and therefore it could not be indirectly infringed.  Spendingmoney LLC v. American Express Co., No. 3:08cv1376 (D. Conn. March 27, 2012).  The claim of U.S. Patent No. 5,864,830 at issue was directed to a “data processing method of configuring a satellite spending card linked to a host credit card and issued by an issuer, the host credit card being held by a host cardholder and having an available balance defined in an associated host account data processing record of a data processing device, a predetermined spending capacity of the satellite card being selectively determined by the host cardholder.”  The plaintiff alleged that certain products of American Express and Visa infringed this claim. Based on the court’s claim constructions, the question of direct infringement turned on usage restrictions on the accused cards and whether they functioned as credit cards.  The court explained that “[i]t is not enough that the defendant‟s card was capable of infringing the patent.”  Rather, the plaintiff had to “present evidence that the apparatus actually infringed the… Read More »Divided Infringement and Non-Infringement

Notice Pleading Patent Infringement Requires Some Specificity

Even after bringing suit against 33 parties just before the America Invents Act’s prohibition on joining unrelated defendants took effect, the notice pleading requirements of the Federal Rules of Civil Procedure still required that a plaintiff identify specific ways in which infringement was alleged to take place.  Select Retrieval, LLC v. American Apparel, LLC, No. 11cv2158 (S.D. Cal. March 23, 2012). On September 15, 2012, Select Retrieval, LLC brought its suit for alleged infringement of U.S. Patent No. 6,128,617 (“Data display software with actions and links integrated with information”).  The defendants moved to dismiss the plaintiff’s amended complaint for failure to state a claim on which relief could be granted.  Like the court in Gradient Enterprises, Inc. v. Skype Technologies S.A, the court here skirted the issue of whether a complaint for patent infringement is sufficient if it follows Form 18 attached to the Federal Rules of Civil Procedure; the court instead simply questioned the sufficiency of the plaintiff’s pleading. As the court put it, McZeal v. Sprint Nextel Corp., 501 F.3d 1354 (Fed. Cir. 2007), “doesn’t stand for the proposition that a plaintiff may use Form 18 as a model, but then obscure the nature of the claims with other… Read More »Notice Pleading Patent Infringement Requires Some Specificity

Enforceability of a Forum Selection Clause in a Clickwrap Agreement

Here are two cases that provide a further reminder of the power of clickwrap agreements, and that a party offering a clickwrap agreement can avail itself of that power only by properly presenting essential clickwrap agreement terms.  In Rassoli v. Intuit, Inc., Civil No. H-11-2827 (S.D. Tex. March 19, 2012), the court enforced a forum selection clause that was included in a scrollable clickwrap agreement accepted by the plaintiff.  However, in Jerez v. JD Closeouts.com,  No. CV-024727-11, 2012 NY Slip Op. 22070 (N.Y. Dist. Ct., Nassau Cty., March 20, 2012), the court declined to enforce a forum selection clause that was found on the defendant’s web site, but not in a clickwrap agreement. Rassoli After the the plaintiff, Rassoli, filed suit in Texas state court, Intuit removed the case to federal court, and then moved to dismiss or transfer venue based on a forum selection clause that specified California. The plaintiff did not dispute that a valid contract existed between the parties; as the court noted, both Texas and California law (which governed the agreement) recognized the validity of clickwrap agreements.  Further, the interpretation of a forum selection clause was a matter of federal, not state law.  Under Fifth Circuit… Read More »Enforceability of a Forum Selection Clause in a Clickwrap Agreement

Software Claims Held Patent Eligible

A Northern District of California court has rejected an argument that “a method of executing an instruction” was not patent eligible subject matter.  Nazomi Communications, Inc. v. Samsung Telecommunications, Inc., No. C-10-05545 (N.D. Cal. March 21, 2012).  The representative claim, reproduced below, recited a method by which a Java interpreter could more efficiently access byte codes. Analogizing to Gottschalk v. Benson, 409 U.S. 63 (1972), which held that a method of converting binary-coded decimal  (BCD) numbers to pure binary numbers was not patent eligible, the defendant argued that the claims covered “abstract steps of obtaining a piece of data, using said data to determine a next step to be taken, and then potentially modifying said piece of data.”  The patent owner countered that “when read in light of the specification, [the claims] are clearly directed toward execution of computer instructions and thus are not abstract.” The court found that the claims were “clearly more specific than [the defendant’s] generalized description” because “the claims specify that the data obtained must include data from a resolution data field, that the next step to be taken is a resolving step, and that the modification is to indicate that a reference is resolved.”  Further,… Read More »Software Claims Held Patent Eligible

Inequitable Conduct After Therasense Does Not Always Require “But-for” Materiality

Even under the heightened “but-for” materiality standard for proving inequitable conduct in patent prosecution set forth by the Federal Circuit in Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1287 (Fed. Cir. 2011) (en banc), a pleading would be sufficient that set forth “affirmative egregious misconduct, such as the filing of an unmistakably false affidavit.”  Based on allegations that the patent applicant lied to the examiner about certain prior art, the court in Touchtunes Music Corp. v. Rowe International Corp., No. 07 Civ. 11450 (S.D.N.Y. March 13, 2012), allowed the counterclaim-defendant (i.e., for present purposes, the defendant) to amend its complaint to allege inequitable conduct. The Touchtunes Music court first noted that the defendant had satisfied the notice pleading standard, even under the heightened requirements for pleading fraud under Federal Rule of Civil Procedure 9(b), by setting forth sufficient detail of the patent applicant’s alleged false statements.  Specifically, the defendant plead that the patent applicant “intentionally made false statements to the PTO regarding the scope and content of karaoke prior art and concealed the relevance of prior art karaoke references,” including a false declaration “that prior art karaoke machines were not capable of coin operation and did not… Read More »Inequitable Conduct After Therasense Does Not Always Require “But-for” Materiality

How Far Do the DMCA’s Anti-circumvention Provisions Go?

Taking a practical “I-know-it-when-I see-it” approach, a Nevada court considered the applicability of the Digital Millennium Copyright Act (“DMCA”), 17 U.S.C. § 1201(a)(2), and other statutes, to mechanisms that allowed users to receive proprietary satellite programming for free.  The court entered a preliminary injunction, and authorized impoundment of devices and codes used to access the proprietary satellite programming.  However, the court declined to authorize impoundment of other products, and Defendants’ websites, that appeared to be used for legitimate sales.  Dish Network v. DiMarco, No. 2:11-cv-01962 (D. Nev. March 13, 2012). The device in question was a receiver that could retrieve an encryption key from an Internet site that could then be used to decrypt, and avoid paying for, a satellite signal.  However, the receiver allegedly could be used for legitimate purposes; it had no built-in means of reaching the Internet, but required an adapter for this purpose.  Moreover, Defendants had stopped selling the codes used to circumvent the Plaintiffs’ encryption.  Defendants thus argued “that they are not liable for their customers’ misuse of their products, which have legitimate uses.” The court concluded that “Plaintiffs are likely to succeed on their DMCA claims that Defendants’ trafficking in the [adapters] and .… Read More »How Far Do the DMCA’s Anti-circumvention Provisions Go?

Software Patent (and Other) Lessons From Prometheus v. Mayo

In addressing claims directed to medical diagnoses, the Supreme Court’s opinion in Mayo Collaborative Services v. Prometheus Laboratories, Inc. may actually lend some clarity to questions of patentability pertaining to software patents.  True, a clearer understanding of software patentability might not be the most obvious take-away from Prometheus.  And we are still a long way from reliable predictability for litigants concerning questions under 35 U.S.C. § 101.  But Prometheus did feature some relatively straightforward analysis, and certain clear statements of law, concerning Section 101. I will not repeat the able summaries of the Court’s opinion that others have already provided.  But I would like to share ideas about some general lessons to be drawn, and extrapolated to the realm of software patents.  You may not agree with all of my thoughts, but these are certainly the things that any practitioner should be thinking about. Section 101 cannot be ignored in favor of other validity analyses (i.e., 35 U.S.C. §§ 102, 103, and 112). The Court rejected the idea that “virtually any step beyond a law of nature itself should transform an unpatentable law of nature into a potentially patentable law of nature” under Section 101.  Invalidity analysis based on prior art,… Read More »Software Patent (and Other) Lessons From Prometheus v. Mayo

Amending Patent Infringement Contentions

When do the results of claim construction proceedings justify a patent plaintiff in amending its infringement contentions?  A court in the Eastern District of Texas allowed the plaintiff to accuse certain software components for the first time following the conclusion of claim construction proceedings.  SSL Services, LLC v. Citrix Systems, Inc., No. 2:08-cv-158-JRG (E.D. Texas March 16, 2012). The court’s Local Patent Rule 3-6 allows “a party claiming patent infringement” that “believes in good faith that the Court’s Claim Construction Ruling so requires,” to “serve ‘Amended Infringement Contentions’ without leave of court” within 30 days of the Claim Construction Ruling.  The rule further allows amendment of infringement contentions “upon a showing of good cause.” In this case, the court adopted constructions of several claim terms that had been urged by neither party.  The plaintiff, SSL, then amended its claim charts to accuse several of Citrix’s software components that had not previously been identified in its infringement claim charts, and to add two new theories of infringement under the doctrine of equivalents. The court allowed SSL to proceed with its amended infringement contentions because “the Court [was] convinced that the constructions adopted by the Court were sufficiently ‘different’ to justify amendment… Read More »Amending Patent Infringement Contentions

Enforcing Trade Secrets and IP Contract Rights

What happens when parties to a joint development agreement don’t follow agreed-to procedures for identifying technology created under the agreement?  Lawyers can ensure that joint development agreements are larded with procedures under which rights in joint technology are protected.  But do we do enough — and can we do enough — to ensure that such provisions are followed?  A recent California case illustrates the perils of failing to properly identify joint technology, and also drives home the need to investigate and enforce possible trade secrets misappropriations as soon as misappropriations are at all suspected.  Gabriel Technologies Corp. v. Qualcomm, Inc., Civil No. 08CV1992 (S.D. Cal. March 13, 2012). Background Plaintiffs entered into a license agreement with Defendants for Global Positioning System software and locating technology.  The agreement defined “Program Technology” as “those items of work carried out by the parties in connection with this Agreement that are identified as Program Technology in the Project Plan.”  Defendants subsequently filed patent applications and took other actions that Plaintiffs contended constituted misappropriation of their trade secrets and misuse of Program Technology.  Plaintiffs admittedly never identified Program technology in the Project Plan, but argued that “because the Project Plan expressly states what is not… Read More »Enforcing Trade Secrets and IP Contract Rights

Misrepresenting Infringement Under the DMCA

A pro se plaintiff was unable to plead adequately that Viacom had knowingly misrepresented that the plaintiff infringed Viacom’s copyrights when Viacom sent DMCA takedown notices to various content providers.  Ouellette v. Viacom International, Inc., No. CV 10-133-M-DWM-JCL (D. Mont. March 13, 2012).  Therefore, the court granted Viacom’s motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c).  In so doing, the court provided useful guidance concerning what allegations would have amounted to a sufficient pleading of a copyright owner’s bad faith in promulgating a DMCA takedown notice. Background One provision of the Digital Millennium Copyright Act, 17 U.S.C. § 512, allows copyright owners to send a “takedown notice” directing online providers to remove content that the copyright owner alleges to be infringing.  The takedown notice must include a statement that the copyright owner has a good-faith belief that the complained-of material is infringing.  17 U.S.C. § 512(c)(3)(A)(v).  Further, the copyright owner is liable for “knowingly materially misrepresent[ing]” that the removed “material or activity is infringing.”  17 U.S.C. § 512(f). Viacom sent takedown notices to various hosting providers seeking removal of allegedly infringing content that the plaintiff, Todd Ouellette, had posted.  Ouellette contended that the content consisted of non-infringing… Read More »Misrepresenting Infringement Under the DMCA