2013 May : US PTO Litigation Alert™

“$1,000 Per Employee” Scanning Patents Hit with Inter Partes Review Requests, Week of May 20, 2013

| May 28, 2013

The Vermont Attorney General made quite a splash last week when it filed a “Consumer Protection Complaint” against MPHJ Technology Investments, a patent assertion entity, accusing it of “unfair and deceptive acts” – specifically addressing misleading patent litigation warning letters to numerous small businesses in Vermont.  The Patent Office will also play a role in this controversy, in view of an inter partes review request filed by Ricoh and Xerox against one of the MPHJ patents (see inter partes review Request No. (5)) and an inter partes review request filed by HP against a second MPHJ patent (see inter partes review Request No. (11))  Requests against the other two MPHJ patents in question are likely to be in the works.

According to the Attorney General’s Complaint, MPHJ sent the letters “through forty wholly-owned shell subsidiary companies,” each located at the same UPS store in Newark Delaware.  The letters state that “[w]e have identified your company as one that appears to be using the patented technology” of four specific patents and one pending patent application.  The letters summarize the technology as permitting “the scanning of a document directly to [an] employee email address as a pdf document.”  Then comes the threat” “[a]s your organization almost certainly uses in its day-to-day operations digital copier/scanner/multifunction equipment which is interfaced to a separate central office computer (an office network), so that digital images may be scanned and transmitted to one or more destinations such as email accounts and other applications, you should enter into a license agreement with us at this time.”  Finally, the punch-line: settlement without court action will require “a payment of $1,000 per employee.” (emphasis added; the per employee fees requested ranged from $900 to $1,200).  This initial letter was typically followed by two, more threatening letters from the shell company’s legal counsel.


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Norman IP Privacy Patent Challenged, Week of May 13, 2013

| May 20, 2013

Norman IP Holdings has filed many lawsuits alleging infringement of U.S. Patent No. 5,592,555, most recently in a case filed in Texas last Monday against ADTRAN, Inc.  On Wednesday Creston Electronics requested inter partes review of the ‘555 patent (see inter partes review Request No. (1)) The patent, which claims methods for “privately communicating signals over a wireless communications network,” is already the subject of a reexamination (90/012,783) filed by Volkswagen.

The following inter partes review requests were filed:

(1)         IPR2013-00278 (electronically filed) – U.S. Patent No. 5,592,555 entitled WIRELESS COMMUNICATIONS PRIVACY METHOD AND SYSTEM and owned by Norman IP Holdings, LLC. Filed May 15, 2013 by Creston Electronics, Inc. The ‘555 patent is currently the subject matter of a plethora of litigations initiated by Norman IP Holdings and Saxon Innovations LLC, including Norman IP Holdings, LLC v. Creston Electronics, Inc. (Case no. 6:20cv-00394 (E.D. Tex.));  Norman IP Holdings, LLC v. BMW North America, LLC (Case No. 6:12-cv-00510 (E.D. Tex.)); Norman IP Holdings, LLC v. Lexmark International, Inc. (Case No. 6:11-cv-00495 (E.D. Tex.)); and Saxon Innovations LLC v. Gateway Companies, Inc. (Case No. 6:08-cv-00464 (E.D. Tex.); to name a few.

(2)         IPR2013-00285 (electronically filed) – U.S. Patent No. 8,019,479 entitled CONTROL ALGORITHM OF VARIABLE SPEED PUMPING SYSTEM and owned by Pentair Water Pool and Spa, Inc. Filed May 17, 2013 by Hayward Industries, Inc. The ‘479 patent is currently the subject matter of a litigation styled Pentair Water Pool and Spa, Inc. and Danfoss Drives A/S v. Hayward Industries, Inc. and Hayward Pool Products, Inc. (Case No. 5:11-cv-459 (E.D.N.C.)).


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Ariosa Diagnostics Attacks Verinata Fetal Testing Patent, Week of May 6, 2013

| May 13, 2013

Ariosa Diagnostics filed two requests for inter partes review of U.S. Patent Nos. 8,318,430 owned by Verinata Health, one challenging claims 1-18 and the second, claims 19-30 (see inter partes review Request Nos. (11) & (12)).  The ‘430 patent claims methods for detecting fetal abnormalities by testing a maternal blood sample for the number of DNA fragments to determine whether there is an abnormal level of DNA associated with the chromosome suspected of being “aneuploid.”  Verinata has sued Ariosa for infringement of the ‘430 patent.

Oracle “completed,” in essence, earlier inter partes requests against two Clouding IP patents, this time attacking the claims that had not been attacked in the earlier petitions (see inter partes review Request Nos. (6) & (8)).

And Sprint Communications requested ex parte reexamination of three Comcast IP Holdings patents (see ex parte Request Nos. (3), (6) & (7)).  The two companies are involved in an infringement action in Delaware regarding the patents.


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Judge Grewal Compromises in Prosecution Bar Cases

| May 9, 2013

Disputes over the role of infringement litigation counsel in parallel reexamination/review proceedings at the Patent Office are becoming commonplace.

The patent owner typically prefers that its lawyers who are handling the litigation also work on the prosecution before the PTO – they hope to minimize attorney fees and to avoid conflicting arguments in the two forums.  The accused infringer, on the other hand, worries that the patent owner’s litigation counsel might improperly use proprietary information obtained through the protective order to gain an unfair advantage in reexamination or review.  The accused infringer therefore asks that the protective order prohibit the patent owner’s litigation counsel from participating in any way in PTO proceeding.

Judge Paul Grewal of the Northern District of California was called upon to resolve this dispute in two cases this week – Grobler v. Apple, Inc. 2013 U.S. Dist. LEXIS 65048 & John v. Lattice Semiconductor Corp., 2013 U.S. Dist. LEXIS 65121 – and managed a compromise between the respective positions.  In two nearly identical decisions, Judge Grewal will allow the limited participation of the patent owner’s litigation counsel in the co-pending reexamination, but prohibit litigation counsel from participating in the amendment of original claims or the addition of new claims.


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Board Takes “Hard Line” with Patent Owners in IPR Institution Decisions

| May 6, 2013

We have previously commented that the Board has been strict with petitioners in its decisions on whether to institute inter partes review.  Inter partes review is denied where the petition fails to abide by all the formal requirements prescribed by the PTO Rules, or where it fails to clearly explain and link the claim limitations to specific prior art disclosures.  Proposed grounds for review are rejected, as well, where they appear to overlap other proposed grounds.

We also see that the Board is equally strict with patent owners.  The Board’s decision last Tuesday instituting inter partes review in Innolux v. Semiconductor Energy Laboratory, IPR2013-00064 is a good example.  In that case, the patent owner SEL filed a preliminary response asserting that the proposed combinations of prior art references did not justify review, but also asserting that review should not be instituted because of two other, “more procedural,” reasons.  With the same rigor as it applies to petitioners’ arguments, the Board looked at the patent owner’s arguments and found them lacking.

First, the patent owner contended that the petition was improper under 35 U.S.C. § 325(d) because each of the cited references, except for a cumulative secondary reference, had been cited during the prosecution of the application leading to the patent.  The Board was not persuaded – it explained that the fact that the references were considered in the original prosecution is a factor which the Board “may take into account” under 35 U.S.C. § 325(d).  The patent owner, however, failed to show that the original examiner had considered “substantially the same . . . arguments,” as presented in the petition.  “Absent a showing of ‘substantially the same . . . arguments,’ id., and considering that petition includes evidence not before the original patent examiner,” including the secondary reference, even if cumulative, and an expert declaration, the patent owner “does not show that the inter partes review of the ‘311 Patent would be improper under 35 U.S.C. § 325(d).”


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Sprint Requests Reexamination for Three More Comcast Patents, Week of April 29, 2013

| May 6, 2013

Last Monday we reported that Sprint had requested ex parte reexamination of two telecommunications data accessing patents owned by Comcast IP HoldingsSprint has since requested reexamination of three more Comcast patents (see ex parte Request Nos. (2), (3) & (8)).  The two companies are involved in an infringement action in Delaware, related to the patents.

Motorola Mobility has filed inter partes review petitions against two Internet content display patents owned by SoftView (see inter partes review Request Nos. (1) & (2)).  Softview has sued Apple and AT&T Mobility for infringement of the patents.

Oracle has requested inter partes review of two Clouding IP patents (see inter partes review Request Nos. (5) & (6)).  Oracle had previously filed a petition for inter partes review of the ‘799 patent, challenging a number of claims of the ‘799 patent (see IPR2013-00073). In the instant petition, Oracle is now seeking review of the remaining three independent claims of the ‘799 patent that were not addressed in the earlier petition.  The second petition follows an earlier request for inter partes review of the ‘891 patent, in which Oracle requested review of claims 1 to 8 of the patent (see IPR2013-00100). In the instant petition, Oracle seeks review of independent claim 9.


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