October 2012

Patent Complaint Fails Form 18 Pleading Standard

Two different district judges have dismissed the same patent plaintiff’s complaint (with leave to amend) where the complaint failed to identify accused products or link them to patent claims. PB&J Software, LLC v. BackupAgent B.V., No. 4:12CV691 CDP (E.D. Mo. Oct. 15, 2012). The court first explained that, as the Federal Circuit set forth in In re Bill of Lading Transmission & Processing Sys. Patent Litig., No. 2010-1493 (Fed. Cir. June 7, 2012), patent complaints following Form 18 attached to the Federal Rules of Civil Procedure “cannot be successfully attacked.” Where there is “a conflict conflict between Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and the Forms, the Forms control.” Here, the plaintiff had simply accused software and services described as performing something called “seed loading.” According to the plaintiff, “the patent-in-suit generally relates to computer software for backing up computer data with a ‘seed’ function, and it identifies the infringing software as BackupAgent software that incorporates the ‘seed’ function.” Although the plaintiff contended this was more detail than Form 18 required, the court noted that the plaintiff had not attached the patent to, or described it in, the complaint. Therefore, it was unclear how “seed loading” related… Read More »Patent Complaint Fails Form 18 Pleading Standard

Path Cleared for Ninth Circuit to Address Copyright First Sale Doctrine Burdens of Proof

Adobe has been granted partial judgment under Federal Rule of Civil Procedure 54(b) in a copyright infringement case so that the Ninth Circuit may determine which party bears the burden of proof when the first sale doctrine is raised as a defense to copyright infringement. Adobe Systems, Inc. v. Christenson, No. 2:10-CV-00422-LRH-GWF (D. Nev. Oct. 16, 2012). The court had previously granted summary judgment to the defendants on Adobe’s copyright and trademark infringement claims because discovery sanctions precluded Adobe’s use of evidence (i.e., contracts and licenses) that it contended would have overcome the defendants’ first sale defense. As previously discussed on this blog, in its earlier decision the court had placed the burden on the defendants in raising the first sale defense to show that they had lawfully obtained the copyrighted material. However, the court had also held that the burden then shifted to the plaintiff to show that the software had been licensed, and not sold. Adobe now sought “partial judgment under Rule 54(b) in order to appeal the adverse evidentiary rulings.” In granting Adobe’s Rule 54(b) motion, the court explained that “the gravamen of Adobe’s claims and the basis for its Rule 54(b) appeal are dissimilar: the claims… Read More »Path Cleared for Ninth Circuit to Address Copyright First Sale Doctrine Burdens of Proof

Hi-Jacked LinkedIn Account Doesn’t Cause “Loss” Under the CFAA

A plaintiff’s claim under the Computer Fraud and Abuse Act, 18 U.S.C. §§ 1030(a)(2)(C) and 1030(a)(5)(C), based on her ex-employer’s alleged hi-jacking of her LinkedIn account, has failed to survive the defendant’s motion for summary judgment because the plaintiff failed to show a “loss” under the CFAA.  Eagle v. Morgan, No. 11-4303 (E.D. Pa. Oct. 4, 2012). The plaintiff had maintained a LinkedIn account identifying her as the defendant’s president while she was so employed.  After the defendant fired her, it changed the password on the plaintiff’s LinkedIn account so as to deny her access.  The defendant also edited the LinkedIn account to identify it with the defendant’s new president. As discussed elsewhere on this blog, different courts have taken different approaches to defining “loss” under the CFA.  According to this court, a legally cognizable “loss” under the CFAA requires “impairment or damage to a computer or computer system,” or at least “lost revenue resulting from an interruption of service or the inoperability of computers.”  Mere allegations of harm to an ongoing business are insufficient. Here, the plaintiff had adduced at most evidence that she had “missed out” on professional opportunities because of her inability to access the LinkedIn account.… Read More »Hi-Jacked LinkedIn Account Doesn’t Cause “Loss” Under the CFAA

Breach of Duty to Offer RAND Licensing Terms?

A lawsuit brought against a patent owner based on an alleged failure to offer a patent license on reasonable and nondiscriminatory (RAND) terms has largely survived the patent owner’s motion to dismiss.  Realtek Semiconductor Corp. v. LSI Corp., No. C-12-03451 RMW (N.D. Cal. Oct. 10, 2012). The defendants, who contended that the patents at issue were essential for practicing the IEEE 802.11 “Wi-Fi” wireless networking standard, had instituted an International Trade Commission proceeding against the plaintiff, Realtek.  Before the 802.11 standard was released, the patent owner had submitted to the IEEE “Letters of Assurance” that it would grant RAND licenses.  However, the defendants had offered to license their patents to Realtek, allegedly in exchange for a royalty that would have exceeded the selling price of Realtek’s products.  Realtek also alleged that the defendants breached their RAND obligations by licensing their patents to other parties for royalties that did not exceed the selling prices of those parties’ products. Realtek had stated a cause of action for breach of contract, asserting that the defendants’ initial license offer had to be on reasonable and nondiscriminatory terms, a theory rejected by the court in Microsoft v. Motorola, No. C10-1823JLR (W.D. Wash. Feb. 27, 2012).  Nonetheless, the… Read More »Breach of Duty to Offer RAND Licensing Terms?

En Banc Fed. Cir. To Reconsider Computer-Implemented Inventions

Vacating a 2-1 panel decision that had held software-implemented business method claims patentable, the Federal Circuit has now ordered an en banc rehearing of the patent owner’s appeal of the district court’s judgment that patent claims were invalid. In its order in  CLS Bank Int’l. v. Alice Corp., No. 2011-1301 (Fed. Cir. October 9, 2012), the Court directed the parties to brief: a. What test should the court adopt to determine whether a computer-implemented invention is a patent ineligible “abstract idea”; and when, if ever, does the presence of a computer in a claim lend patent eligibility to an otherwise patent-ineligible idea? b. In assessing patent eligibility under 35 U.S.C. § 101 of a computer-implemented invention, should it matter whether the invention is claimed as a method, system, or storage medium; and should such claims at times be considered equivalent for § 101 purposes? The first question is interesting given recent practice by the USPTO, and the second question almost seems rhetorical.  That is, concerning the first question, my recent experience is that patent examiners often withdraw Section 101 rejections if the applicant inserts the recitation of “a computer” or the like into the rejected claim.  On the other hand, I have always… Read More »En Banc Fed. Cir. To Reconsider Computer-Implemented Inventions

Estoppel and Inter Partes Review of Patent Validity

Do the estoppel provisions of the inter partes re-examination statute preclude a third party from relying on prior art in litigation where, after the third party has included the prior art in its request for inter partes re-examination, the USPTO has determined that the prior art does not present a substantial new question of patentability? The Federal Circuit, in dicta that some may find surprising, recently left this possibility open in a case decided under the inter partes re-examination provisions that applied prior to the America Invents Act taking effect on September 16, 2012.  Belkin International, Inc. v. Kappos, No. 2012-1090 (Fed. Cir. Oct. 2, 2012). Further, this possible hole in the inter partes estoppel provision may also exist in the provision applicable to the post-September 16, 2012, inter partes review regime. The issue in this case was whether the (as of September 16, 2012, defunct) Board of Patent Appeals and Interferences “lacked jurisdiction to consider arguments based on three references that the Director [of the USPTO] had previously determined did not raise a substantial new question of patentability.” Belkin had filed its inter partes re-examination request alleging that four references raised ten substantial new questions of patentability concerning claims… Read More »Estoppel and Inter Partes Review of Patent Validity

E.D. Texas Awards Enhanced Damages for Willful Infringement

Listing an infringed patent in two contracts, and the apparent awareness of a Citrix executive of the patent, was enough to justify a finding of willfulness and enhanced damages against Citrix.  SSL Services, LLC v. Citrix Systems, Inc., No. 2:08-cv-158-JRG (E.D. Tex. Sept. 17, 2012).  Before the jury was charged, the court had issued a finding of defendant Citrix’s objective recklessness based on plaintiff SSL’s presentation of “evidence that Citrix acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.”  The jury then found that Citrix was a willful infringer.  After weighing the factors applicable to enhanced damages under 35 U.S.C. § 284, the court enhanced the jury’s award of $10 million to $15 million. The court weighed various factors as follows: Copying — SSL attempted to argue that circumstantial evidence demonstrated that Citrix had copied its technology, e.g., Citrix knew of SSL’s patent.  However, the record demonstrated that SSL had developed its technology independently.  Therefore, this factor did not weigh in the enhanced damages analysis. Investigation and Good Faith Belief of No Liability — although Citrix argued that only one executive knew of the patent, the record showed that Citrix, not the executive, was… Read More »E.D. Texas Awards Enhanced Damages for Willful Infringement