GOLDEN GATE UNIVERSITY SCHOOL OF LAW: Brian Mitchell PATENT LITIGATION

Justin Beck Robert B. Morrill Brian E. Mitchell January 9, 2012

Beck:

Morrill:

(408)938-7900 jbeck@beckross.com (415) 823-8214 morrilladr@gmail.com (415) 766-3514 brian.mitchell@mcolawoffices.com

Mitchell:

Provide an overview of a patent case for:

Focus is on strategy and tactics

Civil litigators involved in patent litigation Patent prosecutors providing litigation support Patent prosecutors involved in post-grant review of an issued patent

Inventor discloses the invention Public benefits from that disclosure Public in return gives inventor a patent grant for a limited period of time

Patents are obtained from a government agency But it is not like a trip to the DMV

Courts will often show a 17 minute video An Introduction to the Patent System from the Federal Judicial Center

Who will like this video better the patent owner or accused infringer?

Available from the Centers web site or YouTube Comes with a sample patent

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Largest revision of patent laws in 60 years Final changes become effective in March Modified first to file system (but it will be years before new case law evolves. PTO post grant review revised

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Exotic and non intuitive governing law Can be extremely expensive Specialized procedural rules Often technical, hard to explain subject matter No intrinsic morality Hard to evaluate Can be bitter and acrimonious

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Claims/claim construction Prior art and obviousness Doctrine of Equivalents Willful infringement Inequitable conduct Damages Burden of proof/evidentiary rules

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Less than $1million at risk: $650,000 $1-$25 million at risk: $2,500,000 Over $25 million at risk: $5,000,000

[P]erhaps the most profitable kind of litigation other than plaintiffs contingency-fee cases.
Peter Zeughauser

AIPLA 2011 Economic Survey, Appendix A, Median Costs

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Special pretrial rules for patent cases

Claim construction required in each case PTO procedures

Reviewed de novo by the Federal Circuit Post Grant Review Reexamination

Rules vary district by district Infringement contentions, invalidity contentions, claim construction

International Trade Commission - an alternate forum

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Juries (and Judges) may not understand the technology Extensive use of analogies Technical expert testimony is essential

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Protective cover for laptop computer Ear Tip

U.S. Patent No. 7,643,274 U.S. Patent No. 7,681,577

Exercise Kit and Method of Using Same

Helically Grooved Foam Football
U.S. Patent No. RE33449 U.S. Patent No. 6,258,014

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Often boring cases Complicated issues Few heroes/villains

So what can be the themes?

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They stole/copied my invention Goodness of invention Patent approved by government (the ribbon) David v. Goliath

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Im the real innovator I am the real owner of the patent Patentee didnt keep bargain no full disclosure Patentee cant compete in the market Patentee is trying to suppress a better product David v. Goliath

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Words, not facts, at issue Unpredictable court rulings Befuddled juries (and judges) De novo Federal Circuit review Plaintiffs case gets worse from day 1

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These patent cases involve more acrimony than any other category of cases which I have, including an actual fistfight in a deposition. Anonymous District Court Judge
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First, determine what your client wants Second, determine if you can deliver what the client wants

Third, determine how much it will cost (and tell your client)

Analyze remedies at the beginning of the case

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Planning

Organization Trial Binder

Goals Deadlines Costs

Staffing Roles Communication Actual or virtual?

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 Formed

in 1982 Non-regional (jurisdiction not geographical) Hears all appeals from patent cases including non-patent issues Historically considered pro-patent

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2011 Pilot program for 14 districts Non-specialist judges may decline patent cases, which will then be assigned to specialists Good or bad idea?

Northern, Central and Southern Districts of California and District of Nevada among others

Northern District: Ware, Whyte, White, Koh and Davila

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Does the law of the Regional Circuit or the Federal Circuit apply? The rule:

Issues not unique to patents Use Regional Circuit law Issues unique to patents Use Federal Circuit law

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What were the facts and the issue?

Biodex moved for a directed verdict at the close of testimony Jury verdict for Loredan Biodex did not renew motion or make a JNOV (JMOL) motion after verdict Was Biodex required to renew its motion for directed verdict or make a JNOV motion to obtain appellate review of sufficiency of evidence?

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Whose law applied? Why?

Federal Circuit law applied Because of need for uniformity, rather than different District Court procedures

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Patents are issued to individual inventors Patents are transferred by assignment Patent rights are granted by license
License = Agreement not to sue Can be multiple licenses on the same patent Exclusive or nonexclusive license Geographic limitations on license Line of business limitations on license One or more One or more

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Who can sue?

Who can be sued?

Sole owner, all co-owners, or exclusive licensee of patent Why? Direct infringers, inducers of infringement, or contributory infringers may be sued Officers, affiliates, customers, etc. Exporters and importers

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Ortho sued as exclusive licensee of Amgen Amgen license exclusive in certain fields except against Amgen License granted Ortho right to sue in certain circumstances Held:

Non-exclusive license Grant of right to sue insufficient for standing

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How do you distinguish an exclusive from an non-exclusive license?

Territorial limitations Reserved rights and exclusions Temporal limitations Termination rights

How do you join an unwilling patentee? When is a patentee indispensable? Pre-assignment damages

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Poly-America obtained a judgment for $7M lost profits and $5 M reasonable royalty from GSE The sales were made by Poly-Flex, a sister company Reversed as to lost profits
However . . .

Poly-America owned the patents

Poly-Flex was a non exclusive licensee

A patent owner cannot recover the lost profits of its licensees

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Affirmed as to reasonable royalty

Should Poly-Flex have joined in the suit?

1303 (Fed. Cir. 2004)

A patent owner does not have to have sales to recover a reasonable royalty

Only an exclusive licensee may recover damages

Poly-America, LP v. GSE Lining Technology, 383 F.3d

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Lear hired Adkins to develop an improved gyroscope Adkins promptly developed an improved low cost method of building gyroscopes Lear agreed to pay royalties in two written licenses Lear refused to pay royalties based on patent invalidity arguments CA Supremes: A licensee is estopped to deny the validity of the licensors patent
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What was the Federal Issue involved? Federal law governs U.S. patents California was enforcing a license

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A patent license may challenge the validity of the licensed patent Why?

There is a public policy against monopolies, and patents are an exception It is good to get invalid patents off the books Who has more incentive to challenge patent validity than one who is paying royalties?

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Adkinss license to Lear included the period prior to issuance of his patent Could Lear challenge its obligation to pay royalties during this period, where no ideas existed? A matter of state law, consistent with the Federal policy

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Diamonds employee-Dr. Welter-developed a swine vaccine He assigned all rights in patent application to Diamond He then left and started Ambico, also making swine vaccine Sued for patent infringement He defended by asserting patent invalidity

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Can Dr. Welter claim that his own patent is invalid?

Or is he precluded by assignor estoppel?

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Held: A patentee generally may not challenge the validity of the patent which he has assigned Why different than Lear v. Adkins?
1. Unfair and unjust; 2. Implicit representation that patent has value; and 3. Dr. Welter executed an inventors oath

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The rule is not automatic, but requires a weighing of the equities If the claims are different than those which Dr. Welter approved, perhaps he can challenge them

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Q: How infectious is the estoppel?