DEVELOPMENTS LAST WEEK

Scott Daniels | March 30, 2010

(1) Some Claims of Often Litigated Patent Emerge from Reexamination

The rejection of the claims of U.S. Patent No. 5,539,930, owned by A.L.S. Enterprises, was partially reversed and partially affirmed yesterday.

The ‘930 patent claims an odor absorption system comprising an article of clothing coupled with a storage pack containing an odor absorbing agent.  The system is worn by a person in the wild to prevent wildlife from detecting the person’s natural odors.  The ‘930 patent has been the subject of eleven law suits, eight of them still pending.

Though the Board has affirmed the examiner’s rejection of all original claims, it  has reversed the rejection of new claims 54-59, finding that the prior art fails to disclose “an inner layer of air permeable material” and “an outer layer of air permeable material,” with an odor absorbing agent in between.

More interestingly, the Board reversed the rejection of claims 46-53, 58, 62-63 and 71-93, relying upon the strong commercial success of odor absorption systems containing “activated charcoal,” as required by those claims.  “Commercial success,” as an argument for the non-obviousness of a claimed invention, seems to be less persuasive at the Board than it is in District Courts.

It is difficult for us to predict how this outcome will affect the pending court cases.  Still, it appears that with rejection of the original ‘930 claims, damages for past infringement would no longer be an issue.  A.L.S. may now appeal the adverse portion of the Board’s decision to the CAFC.

(2) A Stay in Cameras Onsite v. Digital Management Systems

Judge Ewing Werlein of the Southern District of Texas decided on March 24 to stay the patent portion of the law suit in Cameras Onsite v. Digital Management Systems et al., pending resolution of ex parte reexamination at the PTO.

The patentee had contended that a stay would be unduly prejudicial because defendants’ continued sales of infringing products would damage it in the market.  Judge Werlein disagreed, finding that there would be no undue prejudice to the patentee because the patentee had not shown that it was entitled to a preliminary injunction during the course of the litigation – the patentee’s assertions that its patent was valid and infringed were mere assumptions.

Judge Werlein also noted that the case was in its early stages, with a docket call set for a year and a half in the future.

On the issue of whether reexamination would simplify the issues for trial, Judge Werlein acknowledged that defendants would not be estopped, by an ex parte determination by the PTO of validity, from reasserting their invalidity arguments at trial.

Interestingly, Judge Werlein implied that there would be a de facto estoppel, explaining that “the PTO’s findings of validity nonetheless would be admissible” at trial, and that “a finding of validity will as a practical matter make it more difficult for Defendants to bear their burden” of showing anticipation or obviousness.

Judge Werlein then balanced the factors and stayed the case.

(3) No Stay in Optimum Processing v. ADM

Judge Timothy Batten of the Northern District of Georgia is not changing his mind in Optimum Processing v. ADM, et al. The defendants had previously moved for a stay pending resolution of an ex parte reexamination request filed December 18, 2009.  On February 22, 2010, Judge Batten denied the request.

After the PTO granted the reexamination request, defendants renewed their stay request citing the grant as a “new fact” justifying reconsideration.  Judge Batten was not impressed and on March 23rd denied reconsideration, correctly noting that 92% of reexamination requests are granted.  Presumably, Judge Batten is not confident that reexamination will simplify the issues in dispute.

The other defendants in the case are Intel, Broadcom, STMicroelectronics and Sun Microsystems.  The patent-in-suit is U.S. Patent No. 5,115,497 entitled “Optically Intraconnected Computer Employing Dynamically Reconfigurable Holographic Optical Element.”

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