patent infringement

Woodard Emhardt Obtains Dismissal of Patent Infringement Complaint Under Section 101

May 12, 2016

Judge Stivers of the U.S. District Court for the Western District of Kentucky recently ordered that a patent infringement lawsuit filed against operators of historical horse racing games should be dismissed as the three patents asserted failed to claim patent eligible subject matter under 35 U.S.C. 101. In dismissing all three infringement claims, the Court wrote “[Plaintiff]’s patents encompass subject matter facially unpatentable under Section 101. The only plausible reading of the ‘150, ‘887, and ‘737 patents reflects that they are ineligible for patent protection. The Asserted Patents are abstract ideas, and [plaintiff] has failed to demonstrate an inventive concept required to transform these claims into patentable subject matter within the meaning of Section 101. Thus, the claims asserted in the Amended Complaint must be dismissed.” The opportunity for companies facing the threat of infringement from patent holders to obtain either invalidate those patents or obtain prompt and efficient dismissal such as this in litigation has significantly increased following the Supreme Court’s decision in Alice. Woodard Emhardt attorneys Spiro Bereveskos and Bill McKenna are representing the Defendants.

Saving High-tech Innovators from Egregious Legal Disputes, or SHIELD Act

March 18, 2013

Representatives Peter DeFazio (D-Ore.) and Jason Chaffetz (R-Utah) recently reintroduced H.R. 845, the Saving High-tech Innovators from Egregious Legal Disputes, or SHIELD Act. The bill seeks to “protect American tech companies from frivolous patent lawsuits that cost jobs and resources” by implementing a “loser pays” system for patent infringement cases brought by some types of non-practicing entities (sometimes referred to as “patent trolls). The SHIELD Act would not apply to plaintiffs in lawsuits where the plaintiff invented the patent or produced evidence of having made a substantial investment in bringing the patent to market.

Both members of Congress first submitted the bill last August, but it failed to get enough support to pass. This time around, the co-sponsors believe its chances of passing are much better. It now covers all industries, not just the high tech industries covered in the previous bill. Support for the new bill has come from groups like the Consumer Electronics Association, the Electronic Frontier Foundation, Engine Advocacy, the National Retail Federation, the Coalition for Patent Fairness, and the Consumer and Communications Industry Association.

Also, President Obama has made recent statements suggesting he is in favor of making further changes to the patent system in this area as well. During a recent Google Hangout appearance online, President Obama specifically mentioned the problem patent trolls present to businesses, old and new. He stated that the America Invents Act passed last year and fully in effect this month “hasn’t captured all the problems.” He addressed the issue of non-practicing entities that “don’t actually produce anything themselves” but that are “just trying to essentially leverage and hijack somebody else’s idea” to “see if they can extort some money out of them.” President Obama mentioned that “our efforts at patent reform only went about halfway to where we need to go” and an additional consensus needed to be reached on “smarter patent laws.”

As H.R. 845 has resurfaced in a new form, new questions regarding its final wording, the scope of its coverage, and its effectiveness in dealing with patent trolls have reappeared as well. We will continue to provide you with updates regarding this important legislation as it proceeds through Congress.

Patent Infringement by the U.S. Government under § 1498

November 19, 2012

What should you do if the U.S. Government infringes your patent?  Under 28 U.S.C. §1498, whenever the government uses or manufactures a invention covered by a patent of the United Stated, without a license from the owner, the owner may only bring an action against the United States in the United States Court of Federal Claims.  The section serves both as an express waiver of the government’s immunity and an assumption of liability by the government for any direct liability attributable to any contractor, so long as they acted with the government’s authorization or consent.  Often times, a close review of the contract will be required in order to determine if the contractor in fact had the government’s consent to undertake the act which resulted in the infringement.

As a result, a qualifying government contractor enjoys, as an affirmative defense, immunity from any claim of patent infringement based upon goods produced “for the government.”  However, many government contracts provide for indemnification of the government by the contractor for patent infringement.  Therefore, in these instances, while statutorily the liability falls upon the government and the forum is fixed, the contractual relationship between the government and the contractor may ultimately see the contractor being liable and/or forced to defend the action.

The scope of §1498 was recently reconsidered, en banc, by the Federal Circuit in the context of carbon fiber panels which were partially manufactured abroad only to be imported and finished in the United States.  The Federal Circuit reversed its prior holding and found that §1498 did apply to the importation of a product made by a patented process.  In so holding, the court clarified that the correct interpretation of 1498(a) is that it creates a cause of action for direct infringement that is separate and different from 271(a), and that it could include conduct falling under 271(g). See Zoltek Corporation v. United States (Fed. Cir. 2012).

A Summary of the America Invents Act

September 15, 2011

On September 16, 2011, President Obama signed into law the “America Invents Act”which makes sweeping changes to the U. S. patent system. Congress’s primary goals were to further enhance opportunities for innovation and entrepreneurial investment, to better harmonize U. S. patent laws with those of other countries, and to streamline patent office procedures. Over the next 18 months, the U. S. patent laws will change so that by the spring of 2013, there will be new issues and new proceedings for patent practitioners, inventors and businesses to consider. The most important of these new issues and procedures are:

Moving to a “first-to-file” system: The United States has always had a “first-to-invent” system, meaning that deciding whether an invention was new or not obvious involved determining the state of the art at the time the invention was conceived, not at the time the application was filed. Most other patent systems around the world consider the state of the art when the application was filed. The America Invents Act changes the U. S. system to likewise require that applications be examined against prior art dated before an application’s filing date (with some exceptions for inventor disclosures). The date of invention will no longer be relevant in determining what is prior art against future applications.

Assignee prosecution opportunities: Traditionally, a patent application is filed on behalf of an inventor, and the resulting patent is issued in the inventor’s name. Inventors can assign (e.g. sell or transfer) their patent rights to a third party such as a business or another person, for example the inventor’s employer. Traditionally these third parties (assignees) could move the application through the Patent Office with certain authorizations from the inventor. The new law still requires the original inventor be identified. However, if the inventor is required to assign the invention to a third party, the assignment can authorize the third party to take control the application as it moves through the Patent Office. The resulting patent would issue in the third party’s name.

Personal infringement defense based on prior use.The act provides a broader “prior use” defense, for use in cases in which a business is using a process or machine as part of a process, and has been doing so for more than one year prior to the effective filing date of a patent that would cover the process or machine. The defense is personal to the user, and can only be transferred with the business to which the process or machine relates. The defense addresses situations in which private first-users have been accused of infringement of another’s later-filed patent, where the non-public first use cannot be used to invalidate the patent.

Post-grant review of patents.: Perhaps the most anticipated aspect of the new act creates proceedings in the Patent Office to challenge issued patents. Two separate proceedings are created by the new law: An “inter partes” review and a “post-grant” review. The “inter partes” review permits allegations of invalidity over prior art. The “post-grant” review permits allegations of invalidity on any ground in the statute, and must be filed within nine months of the patent’s issuance. The Patent Office will be creating rules to govern these procedures in the coming months.

Supplemental examination: The act provides a procedure for supplemental examination of a patent by the owner. The supplemental examination is not a re-examination. However, if the Patent Office discovers a substantial new question of patentability during a supplemental examination, a re-examination will be ordered using the current re-examination procedure. A supplemental examination can be used to “cure” what might be inequitable conduct in the original prosecution, if the previously unconsidered or incorrect information was considered or corrected in the supplemental examination.

Filing fees: In addition to the existing large entity and small entity patent fees, the act creates a “micro entity” fee structure, which will most commonly be used by independent inventors. A “micro entity” is any small entity that has filed no more than four applications, and has an income that is less than certain specified limits. Micro entities are charged significantly lower fees that are only 25% of the large entity fee (i.e. $250 for filing, examination and search fees).

Other provisions remove the ability to invalidate a claim or patent based on failing to disclose the best mode of carrying out the invention, permit “virtual” marking of a patent number, limit suits based on claims of false patent marking, and codify the principle that failure to obtain, or choosing not to disclose, advice of counsel cannot be used to prove willful infringement.

Most of these provisions will take effect within the next 18 months, although some will take effect immediately. Regardless, it is not too early to consider how these sweeping changes to the U. S. patent system will affect your innovation strategies and business practices. If you have questions regarding how best to protect your ideas under the new patent laws, contact our experienced patent attorneys at Woodard, Emhardt, Moriarty, McNett & Henry LLP.