Anticipate This!™ | Patent and Trademark Law Blog

Alice Corp. v. CLC Bank Int’l: Notable Quotes from the Oral Arguments.

Posted in Litigation Commentary by Kristen Fries on April 18, 2014

The link to the transcript for the March 31, 2014 oral arguments before the SCOTUS in Alice Corp. v CLC Int’l can be found here.

Background: Alice Corporation, petitioner, owns the four patents-in-suits which are directed toward a computerized trading platform for the execution of a previously agreed-upon exchange, known as “settlement.” The inventions include electronically maintained accounts for each party in the settlement and after receiving transactions from each party, the computer system effects the exchange. The United States District Court for the District of Columbia declared each of Alice’s patents invalid for not defining patent-eligible subject matter. The U.S Court of Appeals for the Federal Circuit affirmed the decisions, in an en banc rehearing.

Issue: Whether claims to computer-implemented inventions – including claims to systems and machines, processes, and items of manufacture – are directed to patent-eligible subject matter within the meaning of 35 U.S.C. § 101 as interpreted by this Court.

Per usual, we will preface our thoughts with the following disclaimer:  “It is generally a futile effort to predict how the Supreme Court will rule on any given issue.”  That being said, below are some quotes that we found of particular interest:

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Hyatt v. USPTO – Procedural Limbo in the Patent Process?

Posted in Litigation Commentary by Jake Ward on March 2, 2014

Gil Hyatt

(Photograph Courtesy of Gilbert P. Hyatt)

Gilbert P. Hyatt v. USPTO (D. Nevada 2014)

We recently had an opportunity to speak with Mr. Gil Hyatt.  Gil is a well-known and prolific inventor in early computer technology, being named on more than 70 issued patents.  Over the years, he has also been a successful litigant in many patent-related matters.  As recently as 2012, Gil prevailed in a case at the U.S. Supreme Court against the U.S. Patent and Trademark Office (USPTO).

On January 3, 2014, Gil filed a complaint against the USPTO relating to two appealed patent applications.  The appealed patent applications have been pending at the USPTO since the early 1970s, i.e., over 40 years.  Gil alleges that the delay of the USPTO in these appealed patent applications is unreasonable under the Administrative Procedure Act, 5 U.S.C. § 701(1).

As a patent practitioner, the facts of this case are quite shocking.  According to USPTO statistics, the typical amount of patent pendency is 28.3 months.  This means that, if an inventor were to file a patent application today, the inventor would normally expect to receive a patent in about 2-1/2 years.  Gil’s patent applications have been pending for 16x longer than is normal.

According to Gil’s complaint, the USPTO has engaged in “a deliberate strategy to deny him adjudication of his pending patent applications.”  In both cases, the USPTO has apparently furnished no written answer to the filed appeal briefs, and no decision has been made by the Appeal Board.  Many formal petitions for action on the merits and requests for status updates have purportedly been filed by Gil, also to no avail.  A number of interviews with USPTO officials have also taken place, allegedly without resulting in any action.

These conversations with USPTO officials have also caused Gil to believe that the USPTO is intentionally refusing to grant any more patents to him.  Indeed, no patent has issued to Gil since 1997.  According to the complaint at paragraph 46:

During an in-person conference with the Director of the Technology Center responsible for examination of Mr. Hyatt’s patent applications – which is documented in the record of two of Mr. Hyatt’s patent applications – Mr. Hyatt pointed out “the scenario of applications going round and round from the examining groups to the Board and then back to the examining groups and then back to the Board.” The Director confirmed that this was the policy that the PTO was pursuing toward him.

The Hyatt patent applications apparently exist in a state of procedural limbo at the USPTO.  There is no doubt that this situation is quite unusual.  However, since his patent applications are not published, the “file wrappers” or official records of actions taken by both Gil and the USPTO remain secret at this time.  There is also no way of knowing the importance of the inventions being claimed, or the general impact that the patents would have if they were to issue.  We will be following this case closely, and are most interested in reading the USPTO’s answer to the complaint when filed.

For other articles on Mr. Gilbert P. Hyatt, and his actions in court and at the USPTO, see the following links:

http://articles.latimes.com/keyword/gilbert-hyatt

http://www.marketsandpatents.com/articles/wp_value.html

http://patentlyo.com/patent/2014/01/hyatt-v-uspto-three-generations-of-poor-examination-are-enough.html

http://www.bloomberg.com/news/2014-02-24/inventor-waits-43-years-for-another-chance-to-shock-tech.html

Importance of Design Patents in the Recent Apple-Samsung Litigation.

Posted in Litigation Commentary by Jake Ward on August 28, 2012

An interesting article at Forbes yesterday, on the increasing importance of design patents for technology companies.  Highly suggested read.

Bilski v. Kappos: Notable Quotes from the Oral Arguments.

Posted in Litigation Commentary by Jake Ward on November 9, 2009

The link to the transcript for the November 9th oral arguments before the SCOTUS in Bilski v. Kappos can be found here.

Per usual, we will preface our thoughts with the following disclaimer:  “It is generally a futile effort to predict how the Supreme Court will rule on any given issue.”  That being said, below are some quotes that we found of particular interest:

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Scheduled SCOTUS Oral Arguments in Bilski v. Kappos – November 9, 2009.

Posted in Litigation Commentary by Jake Ward on November 9, 2009

Oral arguments in Bilski v. Kappos are scheduled for today, November 9, 2009.  Previous AT! coverage of Bilski here, here, here, and here.

In short, the CAFC in Bilski has held that business methods are not patentable unless they satisfy the machine-or-transformation test.  In other words, patentable business methods must either: 1) transform matter into a different state or thing, or 2) be tied to particular machine.  The Bilski decision expressly held inadequate the 1998 ruling in State Street Bank, which had established that business methods were patentable if they produced a “useful, concrete, and tangible result”. 

The questions presented in the petition for U.S. Supreme Court review were:

1. Whether the Federal Circuit erred by holding that a “process” must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing (“machine-or-transformation” test), to be eligible for patenting under 35 U.S.C. § 101, despite this Court’s precedent declining to limit the broad statutory grant of patent eligibility for “any” new and useful process beyond excluding patents for “laws of nature, physical phenomena, and abstract ideas.”

2. Whether the Federal Circuit’s “machine-or-transformation” test for patent eligibility, which effectively forecloses meaningful patent protection to many business methods, contradicts the clear Congressional intent that patents protect “method[s] of doing or conducting business.” 35 U.S.C. § 273.

Further details on Bilski v. Kappos may be found via the SCOTUS  Wiki here.  A transcript of the oral arguments will follow, as soon as available.

Tafas v. Dudas; SmithKline Beecham Corp. v. Dudas – Hearing Today.

Posted in Litigation Commentary by Jake Ward on February 8, 2008

The Summary Judgment hearing for Tafas/GSK v. USPTO in U.S. District Court (E.D. Virginia) is scheduled for today, Friday, February 8, 2008, at 10:00 AM.  As previously posted by AT!, the litigation is related to the USPTO’s proposed claims and continuations rules and a preliminary injunction of the rules is presently in place.  See here, here, here, and here.  The Patent Docs have some exceptional background on the litigation, including copies of briefs filed, here.

Some are speculating that a decision from Judge James C. Cacheris may be rendered from the bench today.  The PLI Blog will be report-blogging on the case throughout the day.  Stay tuned.

JW Update (2/8/08 – 2:05PM) – Per Gene Quinn at the PLI Blog, the court has taken the matter under advisement and has recessed for the day.  A decision is expected within the next few days to weeks.

Scrabulous: Not a Triple-Word Score.

Posted in General Commentary, Litigation Commentary by Mike Dockins on January 21, 2008

According to Reuters, Mattel and Hasbro have recently warned Facebook that the online application Scrabulous may be infringing Mattel and Hasbro’s copyright and, presumably, trademark in relation to the popular board game Scrabble®. 

If you have not yet been hooked by the Scrabulous phenomenon, consider yourself lucky. Sources indicate that it can be quite addictive.  Scrabulous has a registered user base of 2.3 million, 600,000 of which play the game daily.  The move to shut down Scrabulous has also prompted a new community on Facebook named “Save Scrabulous”.  The “Save Scrabulous” community has over 12,000 members.

So is there copyright infringement?  Independent creation is a defense to copyright infringement, but only if independent creation is a possibility.  If you were to put enough monkeys with typewriters in a room on Mars, for example, they may independently create Shakespeare and have a valid copyright in the work. 

One test for copyright infringement is access and substantial similarity.  The creators of Scrabulous cannot in good faith claim, however, that they never had access to Scrabble®.  The game of Scrabble® is sold in 121 countries in 29 different languages. One hundred million games have been sold worldwide, and estimations are that Scrabble is found in one out of every three American homes. 

As for substantial similarity, well, we have not played Scrabulous ourselves, so it is impossible to make a first-hand determination.  However, below is a comment from one of the more reasonable Scrabulous fans at “Save Scrabulous”, as reported at this Forbes article:

The copyright infringement is obvious and, in retrospect, the developers of Scrabulous should have done more to create their own spin on it [rather than using the same color schemes and numerical systems and having the rules to Scrabulous game link to the Scrabble Wikipedia page].

You be the judge.  Images of the respective games are reproduced below.

 Scrabulous Image           Scrabble Image

Scrabulous                            Scrabble®

Access?  Check.  Substantial similarity? Check. 

But what about trademark infringement?  In trademark law, two words or phrases do not have to be identical for there to be a trademark infringement.  An infringement may be found wherever there is a likelihood of confusion as to the source, sponsorship, or ownership of the goods (or services).  A likelihood of confusion in this instance appears to be very high.  The goods (the game) are nearly identical in the way they are played as well as how they look.  Further, the marks themselves are very similar, sharing the same first five letters (S-C-R-A-B).

Similar marks?  Check.  Substantially identical goods?  Check.  Trademark infringement seems to be yet another obstacle the Scrabulous makers will have to hurdle.

So what options do Facebook and/or the creators of Scrabulous (JW Edit - 1/25/2008; good comment tekel) have?  The most reasonable recourse may be to consider selling Scrabulous to Mattel/Hasbro, or obtaining a license as soon as possible.  Any comments from our readers?

Quanta Computer v. LG Electronics: Notable Quotes from the Oral Arguments.

Posted in Litigation Commentary by Jake Ward on January 16, 2008

Per usual, we will preface our thoughts with the following disclaimer:  “It is generally a futile effort to predict how the Supreme Court will rule on any given issue.”  That being said, below are some quotes that we found of particular interest:

Transcript at page 4.

JUSTICE STEVENS: Ms. Mahoney, can I just get one thing straight in my mind. Which transaction triggered the exhaustion doctrine in your judgment, the general license to Intel or the sale by Intel to Quanta.

MS. MAHONEY (ON BEHALF OF PETITIONERS): I think they work in combination here, Your Honor, because once the sale was — once the license was entered into with Intel and once unrestricted rights were given to make, use and sell components that would infringe, otherwise infringe these patents, there was really nothing else that could happen - 

Transcript at page 8.

CHIEF JUSTICE ROBERTS: So the parties are unwilling to spell out exactly how this is going to work out in their contract, and each side, it prefers to take their chances on how the Federal Circuit’s going to rule. It’s easier to sell these things if they’re not encumbered by these additional license requirements and the manufacturer presumably gets a lot more, but there’s a lot of uncertainty, uncertainty that could have been cured by how the contract was drafted, and people prefer to live with that uncertainty and litigate rather than clear it up in the contract.

Transcript at pages 19-20.

CHIEF JUSTICE ROBERTS: A mere license can prevent the application of the patent-exhaustion doctrine?

MR. HUNGAR (ON BEHALF OF THE UNITED STATES, SUPPORTING THE PETITIONERS): Well, only at the — only at the level of the licensee. That is, if it is true, as Ms. Mahoney said, if the — if LG here had given a restricted license that restricted the right to sell, that said you can only sell in these instances, and if Intel then sold outside those permitted instances, that would be patent infringement.

CHIEF JUSTICE ROBERTS: And it would be patent infringement by the use of the product by the people that Intel sold to?

MR. HUNGAR: Yes, because it was an unauthorized sale.

Transcript at page 21.

JUSTICE BREYER: But you couldn’t put in -you are authorized to sell the bicycle pedals that I have patented only if you impose a restriction that will tell the bicycle user that he must send me a check for $15 in addition to whatever he pays you. That sounds unlawful under contract law.

MR. HUNGAR: Well, it might be lawful. You could certainly do what, in fact, I think some of the seed companies -

JUSTICE BREYER: Or you are going to have -I mean, there’s a doctrine that you cannot impose equitable servitude’s upon chattel.

MR. HUNGAR: Yes.

Transcript at pages 23-24.

MR. HUNGAR: Fine. If they have that restriction and they sell and they do not — they do not obtain the contractual promise of the party that they are obligated to obtain, they’re violating the terms of their right to sell. It’s patent infringement by the seller, and if the buyer uses it it’s patent infringement by them as well.

CHIEF JUSTICE ROBERTS: Exactly. That’s the critical point. You’re telling me that if the buyer, in other words, the kind of third person in this chain, uses the patented article in a way that is contrary to the license that was given to the second person in the chain, then he is liable for contributory infringement under the patent laws and not, as I understood you to answer to Justice Breyer, only under contract law.

Transcript at page 44.

JUSTICE SOUTER: They’re saying the reason they have done so is that the following distinction is significant. There’s a distinction between a license that says you can’t sell this unless certain conditions are satisfied and, on the other hand, a license that says you can sell this, but if you sell it to a buyer who is described by conditions A and B, you’ve got to tell the buyer that we’re going to make a claim against A and B. And the ones — in the first example, there is a limit to the right to sell. In the second example, there is no limit on the right to sell, but there’s a warning about what we’re going to do if you do sell under certain conditions. And I think they’re saying that unless you have a contract of the former sort which limits your right to sell, then when you do sell, exhaustion applies and whatever you may do against the ultimate buyer is — is a contract problem or what-not, but it’s not — it’s not a matter of patent.

MR. PHILLIPS (ON BEHALF OF THE RESPONDENT): Right, and the problem -

JUSTICE SOUTER: Number one, do you think I am being correct in characterizing, describing the distinction they make?

MR. PHILLIPS: I think so.

JUSTICE SOUTER: And B, if I am, why isn’t that distinction an answer to your argument?

MR. PHILLIPS: Because, because it ignores the fact that there are separate patents involved in this case. There is no question that — there is an issue. I mean I don’t think there’s a question that -you know, as to how far you can go down the road in trying to condition a particular sale. I thought this Court may have resolved this already. Mallinckrodt leaves that issue open, but that’s not — that’s not the question.

The issue here is if I sell to you, Justice Souter, a particular chip, whether I condition it or not, I think that’s — to me that’s unenforceable. But the question is, can you then take that chip and use it to violate a separate patent? And the reason you know that it’s not exhaustion -

Transcript at page 50.

MR. PHILLIPS: To be sure, Intel has the authority to sell these things, and it has the authority to sell — it depends on what the things are. It has the authority to sell the chips. It has the authority to sell the systems, but what it doesn’t have the authority to do is to allow somebody downstream to take the chips and put them into the separately patented systems, and the — and the people downstream know that they don’t have that entitlement.

Transcript at page 53. 

MR. PHILLIPS: . . .It seems to me the fundamental issue here is they have a limited right when they purchase that product. They didn’t get the right to make other products. They didn’t get the right to breach or infringe a completely separate patent. And that is the basis on which the judgment of the Court of Appeals, which is all that is before the Court, should be affirmed.

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