Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
IP NEWS
Jury Orders eBay to Pay $35M for Infringing Patent
On May 27, 2003, a jury in the Eastern District of Virginia found that eBay willfully infringed patents held by MercExchange of Great Falls, VA and awarded MercExchange $35 million dollars in damages. The jury found that eBay's fixed price consignment articles known as 'Buy it Now' and its integrated automated payment system willfully infringed two MercExchange business method patents, U.S. Patents 6,085,176 and 5,845,265. Both sides have entered post-trial briefs relating to the jury award.
The patents were developed by Thomas Woolston, a former CIA technology expert who helped to build the CIA's communications network. Woolston attempted to license the technology to eBay before the suit, but the two sides could not come to an agreement. Previously, Woolston sued Overture Services, Inc., known as GoTo.com, for infringement of the '176 patent. That case settled before trial. Woolston also commenced an infringement suit against Priceline.com on a similar patent.
USPTO Calls for Comments on the Unity of Invention Standard
The United States Patent and Trademark Office is studying the changes that would be needed in order to implement a Unity of Invention standard in the United States. Currently, under 35 U.S.C. '121 the USPTO can restrict two or more independent inventions claimed in one application or restriction may be elected for related inventions such as a process and the apparatus for carrying out the process. The Unity of Invention standard, which is a component of many foreign patent laws, would allow claims with the same 'special technical feature' to be examined together in a single application. The basis for such a policy is that if the claims are so linked together that they form a single general inventive concept, then the claims should be examined together in one application. As long as the same special technical feature is present in every single claim and that special technical feature makes a contribution to the prior art, then the claims would not be subject to a restriction requirement by the USPTO.
The USPTO acknowledged that adoption of a Unity of Invention standard would have a significant impact on current practices. Comments on the proposed changes should be emailed to [email protected], mailed to Mail Stop Comments ' Patent, Commissioner for Patents, PO Box 1450, Alexandria VA 22313-1450 or faxed to (703) 872-9411 marked to the attention of Robert Clarke. All comments must be received by July 21, 2003.
Federal Circuit Finds an Implied License when Patentee Sells Part of a Patented Combination
In Anton/Bauer v. PAG, Ltd., 2003 U.S. App. LEXIS 9826 *3 (Fed. Cir. 2003), the Federal Circuit reversed a preliminary injunction finding that the district court erred in the application of the doctrine of implied license. The patentee, Anton/Bauer, had a patent for the combination of male and female plates on battery packs for cameras and camera chargers. Anton/Bauer sold the female and the male plates separately while the PAG sold the male plate for use in conjunction with the Anton/Bauer's female plate. Claiming contributory and induced infringement, Anton/ Bauer requested and received a preliminary injunction against PAG's male plate product. On appeal, the issue rested on whether Anton/Bauer could prove that its own customers directly infringed when they used PAG's male plate with Anton/Bauer's female plate.
The Federal Circuit held that the patent covered the combination of products, and since Anton/Bauer sold the unpatented female plate, it extinguished its right to control the use of the plate. Further, the court held that the unrestricted sale of an item that does not have a non-infringing use grants an implied license to the customers to use the patented combination for the life of the item, in this case the female plate. Since the court held that there was no direct infringement by the customers, PAG could not be a contributory infringer. The court stated that a patentee's ability to assert contributory infringement is limited 'where the patentee has chosen to sell part, but not all, of its patented combination. It is the involvement of the patentee in this case that saves PAG from being a contributory infringer.'
The Battle for LINUX Heats Up
On June 16, 2003, the SCO Group terminated IBM's right to use or distribute any software based on the UNIX System V source code. SCO announced it was using its termination rights under the licensing agreement between SCO's predecessor and IBM after sending IBM a termination notice on March 6, 2003 in the latest stage of the very public lawsuit between the two. In March 2003, SCO filed a $1 billion lawsuit against IBM alleging that IBM leaked proprietary UNIX technology to the open source community to develop the LINUX operating system. The case was filed in the third judicial district of Utah, docket number 2:03CV0294. Claiming misappropriation of trade secrets, unfair competition, breach of contract and tortious interference with SCO's business in the complaint, SCO then sent letters to various LINUX customers alerting them to the potential legal liability of end users. In a letter to SCO's partners, SCO suspended all future sales of the LINUX operating system, but promised to provide support to existing LINUX customers.
On May 28, 2003, in a published letter from Novell's CEO, Novell challenged SCO's assertion that it owned UNIX. SCO acquired the rights to UNIX through a licensing agreement with Novell, and Novell claimed that it and not SCO still owned all the patents and copyrights for the UNIX system. Novell also challenged SCO to point to the specific language in LINUX that they claimed had been stolen from UNIX. In a press release on the same day, SCO stated that its claims were not based on the patents or copyrights, but on contracts and that '[f]rom a legal standpoint, contracts end up being far stronger than anything you could do with copyrights.' Days later, at the behest of companies such as LINUX user SuSE Linux A.G., a German court ordered SCO to stop claiming that LINUX was an illegal derivative of UNIX.
On June 6, 2003, SCO fired back at the Novell accusations by disclosing a newly found amendment to the SCO Novell agreement that gave ownership of certain copyrights to SCO. With IBM stating it had no intention of reaching a quick settlement, SCO terminated IBM's license and amended the complaint to include further causes of action. Currently, SCO has only sued IBM, but the company has not ruled out suing other LINUX users.
Kathlyn Card-Beckles is an associate with the New York office of Kenyon & Kenyon. She can be reached at 212-908-6478.
Jury Orders eBay to Pay $35M for Infringing Patent
On May 27, 2003, a jury in the Eastern District of
The patents were developed by Thomas Woolston, a former CIA technology expert who helped to build the CIA's communications network. Woolston attempted to license the technology to eBay before the suit, but the two sides could not come to an agreement. Previously, Woolston sued Overture Services, Inc., known as GoTo.com, for infringement of the '176 patent. That case settled before trial. Woolston also commenced an infringement suit against Priceline.com on a similar patent.
USPTO Calls for Comments on the Unity of Invention Standard
The United States Patent and Trademark Office is studying the changes that would be needed in order to implement a Unity of Invention standard in the United States. Currently, under 35 U.S.C. '121 the USPTO can restrict two or more independent inventions claimed in one application or restriction may be elected for related inventions such as a process and the apparatus for carrying out the process. The Unity of Invention standard, which is a component of many foreign patent laws, would allow claims with the same 'special technical feature' to be examined together in a single application. The basis for such a policy is that if the claims are so linked together that they form a single general inventive concept, then the claims should be examined together in one application. As long as the same special technical feature is present in every single claim and that special technical feature makes a contribution to the prior art, then the claims would not be subject to a restriction requirement by the USPTO.
The USPTO acknowledged that adoption of a Unity of Invention standard would have a significant impact on current practices. Comments on the proposed changes should be emailed to [email protected], mailed to Mail Stop Comments ' Patent, Commissioner for Patents, PO Box 1450, Alexandria VA 22313-1450 or faxed to (703) 872-9411 marked to the attention of Robert Clarke. All comments must be received by July 21, 2003.
Federal Circuit Finds an Implied License when Patentee Sells Part of a Patented Combination
In Anton/Bauer v. PAG, Ltd., 2003 U.S. App. LEXIS 9826 *3 (Fed. Cir. 2003), the Federal Circuit reversed a preliminary injunction finding that the district court erred in the application of the doctrine of implied license. The patentee, Anton/Bauer, had a patent for the combination of male and female plates on battery packs for cameras and camera chargers. Anton/Bauer sold the female and the male plates separately while the PAG sold the male plate for use in conjunction with the Anton/Bauer's female plate. Claiming contributory and induced infringement, Anton/ Bauer requested and received a preliminary injunction against PAG's male plate product. On appeal, the issue rested on whether Anton/Bauer could prove that its own customers directly infringed when they used PAG's male plate with Anton/Bauer's female plate.
The Federal Circuit held that the patent covered the combination of products, and since Anton/Bauer sold the unpatented female plate, it extinguished its right to control the use of the plate. Further, the court held that the unrestricted sale of an item that does not have a non-infringing use grants an implied license to the customers to use the patented combination for the life of the item, in this case the female plate. Since the court held that there was no direct infringement by the customers, PAG could not be a contributory infringer. The court stated that a patentee's ability to assert contributory infringement is limited 'where the patentee has chosen to sell part, but not all, of its patented combination. It is the involvement of the patentee in this case that saves PAG from being a contributory infringer.'
The Battle for LINUX Heats Up
On June 16, 2003, the SCO Group terminated IBM's right to use or distribute any software based on the UNIX System V source code. SCO announced it was using its termination rights under the licensing agreement between SCO's predecessor and IBM after sending IBM a termination notice on March 6, 2003 in the latest stage of the very public lawsuit between the two. In March 2003, SCO filed a $1 billion lawsuit against IBM alleging that IBM leaked proprietary UNIX technology to the open source community to develop the LINUX operating system. The case was filed in the third judicial district of Utah, docket number 2:03CV0294. Claiming misappropriation of trade secrets, unfair competition, breach of contract and tortious interference with SCO's business in the complaint, SCO then sent letters to various LINUX customers alerting them to the potential legal liability of end users. In a letter to SCO's partners, SCO suspended all future sales of the LINUX operating system, but promised to provide support to existing LINUX customers.
On May 28, 2003, in a published letter from Novell's CEO, Novell challenged SCO's assertion that it owned UNIX. SCO acquired the rights to UNIX through a licensing agreement with Novell, and Novell claimed that it and not SCO still owned all the patents and copyrights for the UNIX system. Novell also challenged SCO to point to the specific language in LINUX that they claimed had been stolen from UNIX. In a press release on the same day, SCO stated that its claims were not based on the patents or copyrights, but on contracts and that '[f]rom a legal standpoint, contracts end up being far stronger than anything you could do with copyrights.' Days later, at the behest of companies such as LINUX user SuSE Linux A.G., a German court ordered SCO to stop claiming that LINUX was an illegal derivative of UNIX.
On June 6, 2003, SCO fired back at the Novell accusations by disclosing a newly found amendment to the SCO Novell agreement that gave ownership of certain copyrights to SCO. With IBM stating it had no intention of reaching a quick settlement, SCO terminated IBM's license and amended the complaint to include further causes of action. Currently, SCO has only sued IBM, but the company has not ruled out suing other LINUX users.
Kathlyn Card-Beckles is an associate with the
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
'Huguenot LLC v. Megalith Capital Group Fund I, L.P.': A Tutorial On Contract Liability for Real Estate Purchasers
In June 2024, the First Department decided Huguenot LLC v. Megalith Capital Group Fund I, L.P., which resolved a question of liability for a group of condominium apartment buyers and in so doing, touched on a wide range of issues about how contracts can obligate purchasers of real property.
CoStar Wins Injunction for Breach-of-Contract Damages In CRE Database Access Lawsuit
Latham & Watkins helped the largest U.S. commercial real estate research company prevail in a breach-of-contract dispute in District of Columbia federal court.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.