IP News

Federal Circuit Issues New Decision in Blackberry Case

In response to defendant Research in Motion, Ltd.'s (“RIM”) motion for rehearing, the Federal Circuit issued a new opinion in NTP, Inc. v. Research in Motion, Ltd., No. 03-1615, 2005 WL 1806123, (Fed. Cir. Aug. 2, 2005), which replaced its earlier decision reported at 392 F.3d 1336 (Fed. Cir. 2004).

The main issue in this case is whether NTP's patents are infringed in the United States when two domestic users communicate via their BlackBerry' devices and a RIM relay located in Canada. In its new opinion, the court adhered to its earlier position that NTP's electronic mail system claims are infringed by BlackBerry users in the United States because “use of a claimed system under section 271(a) is the place at which the system as a whole is put into service” and it is RIM's U.S.-based customers that control the transmission of the originated information and benefit from such an exchange of information. The court also maintained its position that the district court had erred by broadly construing the claim term “originating processor,” but had correctly construed all other terms. The court reversed its position, however, on infringement of method claims, because all of the steps of a method must be performed in the United States in order for infringement to occur under '271(a). The court discussed the differences between infringement of system and method claims and rejected NTP theories for infringement of method claims under ”271(f) and (g).

As it ordered previously, the Federal Circuit vacated the injunction against RIM and remanded to the district court for a determination whether the erroneous claim construction prejudiced the jury's verdict. If prejudice is found, the district court will have to set aside the verdict as to those claims.

President Bush Appoints New Coordinator of International Intellectual Property Enforcement

President Bush has created a new position in the Commerce Department to coordinate efforts to enforce intellectual property rights globally and appointed Christian Israel to fill this role. Israel will be the head of the National Intellectual Property Law Enforcement Coordination Council, an interagency panel covering five government agencies and will report to Commerce Secretary Carlos Gutierrez. Prior to his appointment, Israel was deputy chief of staff for Secretary Gutierrez. According to the Commerce Department, U.S. businesses lose $250 billion in sales per year as a result of intellectual property theft.

Federal Circuit Rules Exporting Software from U.S. to Be Copied and Combined into Patented Combination Is Infringement

On July 13, 2005, the U.S. Court of Appeals for the Federal Circuit upheld a judgment that Microsoft infringed an AT&T patent by “supplying” master disks containing the Windows' operating system that were copied outside the United States and installed on a computer that became a combination covered by the AT&T patent. AT&T Corp. v. Microsoft Corp., 414 F.3d 1366 (Fed. Cir. 2005). The court found that Microsoft's activities implicated 35 U.S.C. '271(f), which makes it infringement to “supply” a “component” to be combined into a patented invention outside the United States. Relying on its March 2005 decision in Eolas Techs. Inc. v. Microsoft Corp., 399 F.3d 1325 (Fed. Cir. 2005), the Federal Circuit said the software was clearly a “component.” The court then ruled that exporting the master disk with the intent that it be copied outside the United States was “supplying.” The court held that “for software 'components,' the act of copying is subsumed in the act of 'supplying' such that sending a single copy abroad with the intent that it be replicated invokes '271(f) liability for those foreign-made copies.” Although Judge Randall Rader wrote the Eolas opinion in which the court decided software is a “component,” he dissented in the AT&T case on the grounds that '271(f) does not cover copying activities occurring abroad.

USPTO to Implement New Re-examination Procedures

The U.S. Patent and Trademark Office (“USPTO”) announced the creation of a specialized re-examination office that will employ 20 senior patent examiners. Previously, re-examinations were assigned to examiners according to technology. Now, the examiners who work in the re-examination office will have experience across all industries. Re-examinations where an initial decision has been made will remain with the examiner originally assigned, while all other re-examinations will be reassigned to the newly formed re-examination unit. The USPTO's goal is to resolve all re-examinations that have been pending with an examiner for more than 2 years by Oct. 1, 2005. The USPTO also stated that all future proceedings will be completed within 2 years.

Federal Circuit Finds Inequitable Conduct in Patent Did Not Infect Related Patent in Which Terminal Disclaimer Was Filed

In Pharmacia Corp. v. Par Pharm., Inc., Nos. 04-1478, 04-1496, 2005 WL 1876150 (Fed. Cir. Aug. 10, 2005), the Federal Circuit upheld the district court's ruling that Pharmacia committed inequitable conduct when obtaining U.S. Patent 5,422,368 (“the '368 patent). The court also upheld a ruling that U.S. Patent 5,296,504 (“the '504 patent”), a related patent obtained by Pharmacia in which a terminal disclaimer was filed, was not unenforceable due to inequitable conduct committed when procuring the '368 patent.

The '368 and '504 patents are listed in the Food and Drug Administration's “Orange Book” as covering Pharmacia's Xalatan' glaucoma treatment. After a bench trial, the district court found that Pharmacia made intentional, misleading statements about test results to the USPTO during prosecution of the '368 patent and failed to disclose prior art that conflicted with the statements.

Par also asserted that Pharmacia's inequitable conduct tainted the '504 patent as well because the terminal disclaimer effectively combined the two patents. The district court and the Federal Circuit rejected Par's argument, finding that the record showed no inequitable conduct during the prosecution of the '504 patent and that a terminal disclaimer without more did not bind the two patents together for purposes of unenforceability.

Federal Circuit Remands to District Court in Accupril' ANDA Case

In Warner-Lambert Co. v. Teva Pharms. USA, Inc., No. 04-1506, 2005 WL 1903759 (Fed. Cir. Aug. 11, 2005), an ANDA litigation involving the hypertension drug Accupril', the Federal Circuit affirmed-in-part, reversed-in-part, and remanded the case to the district court for further proceedings.

Teva filed an ANDA in 1999, seeking approval to market a generic version of Warner-Lambert's Accupril'. In connection with its ANDA, Teva filed a “paragraph IV certification” alleging that the patent covering Accupril', U.S. Patent 4,743,450 (“the '450 patent”), was invalid. Warner-Lambert responded by suing Teva in the U.S. District Court for the District of New Jersey for patent infringement.

After discovery, each side filed various summary judgment motions on the issues of infringement, invalidity, and enforceability. Among other things, the district court granted summary judgment in favor of Warner-Lambert Co. on the issues of enablement and infringement. After a bench trial, the district court ruled that the '450 patent is not unenforceable because of inequitable conduct.

On appeal, the Federal Circuit affirmed the district court's ruling on inequitable conduct, but reversed the grant of summary judgment with respect to enablement. The court noted that the district court did not address enablement in its decision granting summary judgment to Warner-Lambert. Because Teva presented fact-based arguments that had not been considered by the district court, the Federal Circuit reversed the grant of summary judgment for validity and remanded the case for further proceedings on enablement. The court also found that the district court erred by granting summary judgment on infringement because of the existence of genuine issues of fact.

Federal Circuit Issues New Decision in Blackberry Case

In response to defendant Research in Motion, Ltd.'s (“RIM”) motion for rehearing, the Federal Circuit issued a new opinion in NTP, Inc. v. Research in Motion, Ltd., No. 03-1615, 2005 WL 1806123, (Fed. Cir. Aug. 2, 2005), which replaced its earlier decision reported at 392 F.3d 1336 (Fed. Cir. 2004).

The main issue in this case is whether NTP's patents are infringed in the United States when two domestic users communicate via their BlackBerry' devices and a RIM relay located in Canada. In its new opinion, the court adhered to its earlier position that NTP's electronic mail system claims are infringed by BlackBerry users in the United States because “use of a claimed system under section 271(a) is the place at which the system as a whole is put into service” and it is RIM's U.S.-based customers that control the transmission of the originated information and benefit from such an exchange of information. The court also maintained its position that the district court had erred by broadly construing the claim term “originating processor,” but had correctly construed all other terms. The court reversed its position, however, on infringement of method claims, because all of the steps of a method must be performed in the United States in order for infringement to occur under '271(a). The court discussed the differences between infringement of system and method claims and rejected NTP theories for infringement of method claims under ”271(f) and (g).

As it ordered previously, the Federal Circuit vacated the injunction against RIM and remanded to the district court for a determination whether the erroneous claim construction prejudiced the jury's verdict. If prejudice is found, the district court will have to set aside the verdict as to those claims.

President Bush Appoints New Coordinator of International Intellectual Property Enforcement

President Bush has created a new position in the Commerce Department to coordinate efforts to enforce intellectual property rights globally and appointed Christian Israel to fill this role. Israel will be the head of the National Intellectual Property Law Enforcement Coordination Council, an interagency panel covering five government agencies and will report to Commerce Secretary Carlos Gutierrez. Prior to his appointment, Israel was deputy chief of staff for Secretary Gutierrez. According to the Commerce Department, U.S. businesses lose $250 billion in sales per year as a result of intellectual property theft.

Federal Circuit Rules Exporting Software from U.S. to Be Copied and Combined into Patented Combination Is Infringement

On July 13, 2005, the U.S. Court of Appeals for the Federal Circuit upheld a judgment that Microsoft infringed an AT&T patent by “supplying” master disks containing the Windows' operating system that were copied outside the United States and installed on a computer that became a combination covered by the AT&T patent. AT&T Corp. v. Microsoft Corp., 414 F.3d 1366 (Fed. Cir. 2005). The court found that Microsoft's activities implicated 35 U.S.C. '271(f), which makes it infringement to “supply” a “component” to be combined into a patented invention outside the United States. Relying on its March 2005 decision in Eolas Techs. Inc. v. Microsoft Corp ., 399 F.3d 1325 (Fed. Cir. 2005), the Federal Circuit said the software was clearly a “component.” The court then ruled that exporting the master disk with the intent that it be copied outside the United States was “supplying.” The court held that “for software 'components,' the act of copying is subsumed in the act of 'supplying' such that sending a single copy abroad with the intent that it be replicated invokes '271(f) liability for those foreign-made copies.” Although Judge Randall Rader wrote the Eolas opinion in which the court decided software is a “component,” he dissented in the AT&T case on the grounds that '271(f) does not cover copying activities occurring abroad.

USPTO to Implement New Re-examination Procedures

The U.S. Patent and Trademark Office (“USPTO”) announced the creation of a specialized re-examination office that will employ 20 senior patent examiners. Previously, re-examinations were assigned to examiners according to technology. Now, the examiners who work in the re-examination office will have experience across all industries. Re-examinations where an initial decision has been made will remain with the examiner originally assigned, while all other re-examinations will be reassigned to the newly formed re-examination unit. The USPTO's goal is to resolve all re-examinations that have been pending with an examiner for more than 2 years by Oct. 1, 2005. The USPTO also stated that all future proceedings will be completed within 2 years.

Federal Circuit Finds Inequitable Conduct in Patent Did Not Infect Related Patent in Which Terminal Disclaimer Was Filed

In Pharmacia Corp. v. Par Pharm., Inc., Nos. 04-1478, 04-1496, 2005 WL 1876150 (Fed. Cir. Aug. 10, 2005), the Federal Circuit upheld the district court's ruling that Pharmacia committed inequitable conduct when obtaining U.S. Patent 5,422,368 (“the '368 patent). The court also upheld a ruling that U.S. Patent 5,296,504 (“the '504 patent”), a related patent obtained by Pharmacia in which a terminal disclaimer was filed, was not unenforceable due to inequitable conduct committed when procuring the '368 patent.

The '368 and '504 patents are listed in the Food and Drug Administration's “Orange Book” as covering Pharmacia's Xalatan' glaucoma treatment. After a bench trial, the district court found that Pharmacia made intentional, misleading statements about test results to the USPTO during prosecution of the '368 patent and failed to disclose prior art that conflicted with the statements.

Par also asserted that Pharmacia's inequitable conduct tainted the '504 patent as well because the terminal disclaimer effectively combined the two patents. The district court and the Federal Circuit rejected Par's argument, finding that the record showed no inequitable conduct during the prosecution of the '504 patent and that a terminal disclaimer without more did not bind the two patents together for purposes of unenforceability.

Federal Circuit Remands to District Court in Accupril' ANDA Case

In Warner-Lambert Co. v. Teva Pharms. USA, Inc., No. 04-1506, 2005 WL 1903759 (Fed. Cir. Aug. 11, 2005), an ANDA litigation involving the hypertension drug Accupril', the Federal Circuit affirmed-in-part, reversed-in-part, and remanded the case to the district court for further proceedings.

Teva filed an ANDA in 1999, seeking approval to market a generic version of Warner-Lambert's Accupril'. In connection with its ANDA, Teva filed a “paragraph IV certification” alleging that the patent covering Accupril', U.S. Patent 4,743,450 (“the '450 patent”), was invalid. Warner-Lambert responded by suing Teva in the U.S. District Court for the District of New Jersey for patent infringement.

After discovery, each side filed various summary judgment motions on the issues of infringement, invalidity, and enforceability. Among other things, the district court granted summary judgment in favor of Warner-Lambert Co. on the issues of enablement and infringement. After a bench trial, the district court ruled that the '450 patent is not unenforceable because of inequitable conduct.

On appeal, the Federal Circuit affirmed the district court's ruling on inequitable conduct, but reversed the grant of summary judgment with respect to enablement. The court noted that the district court did not address enablement in its decision granting summary judgment to Warner-Lambert. Because Teva presented fact-based arguments that had not been considered by the district court, the Federal Circuit reversed the grant of summary judgment for validity and remanded the case for further proceedings on enablement. The court also found that the district court erred by granting summary judgment on infringement because of the existence of genuine issues of fact.