IP News

Symbol and its co-plaintiffs design, manufacture, and sell bar code scanners and related machine vision products, including laser and CCD bar code readers. Symbol filed a declaratory judgment action against Lemelson Foundation after its customers began to receive letters from Lemelson Foundation stating that the use of Symbol's products infringed Lemelson Foundation's patents. The district court concluded, inter alia, that Symbol's prosecution laches cause of action failed to state a claim upon which relief could be granted. Symbol appealed this decision to the Federal Circuit, which reversed the district court's judgment. Upon remand, the district court held that Lemelson Foundation's patents were unenforceable due to prosecution laches, invalid for lack of enablement, and not infringed. In support of its finding of prosecution laches, the district court pointed to the 18- to 39-year time period that elapsed between the filing and issuance of the patents in suit and found that Lemelson Foundation had engaged in “culpable neglect,” and that businesses were adversely affected because they were unable to determine what was patented and what was not patented.

On appeal, the Federal Circuit concluded that the district court did not abuse its discretion in finding Lemelson Foundation's patents unenforceable under the doctrine of prosecution laches. It, however, did not set forth clear guidelines for the application of the doctrine. Instead, the Federal Circuit stated that “there are no strict time limitations for determining whether continued refiling of patent applications is a legitimate utilization of statutory provisions or an abuse of those provisions. The matter is to be decided as a matter of equity, subject to the district court before which the issue is raised.” The court also noted that the doctrine should be used “sparingly.”

Since the court affirmed the district court's finding on prosecution laches, it did not address the district court's conclusions on priority dates, enablement, claim construction, infringement, or invalidity.

Federal Circuit Rules That Finding of Equivalence of Rotatably Mounted Seat Support Vitiated Limitation from Patent Claims

In Freedman Seating Co. v. Am. Seating Co., Nos. 04-1216, 04-1248, 2005 WL 1903786 (Fed. Cir. Aug. 11, 2005), the Federal Circuit overturned a ruling that American Seating Co. had infringed Freedman's patent under the doctrine of equivalents. In so doing, the court invoked the “all limitations” (a.k.a. “all elements”) rule, which holds that an element is not equivalent to a claim limitation if such a finding would “entirely vitiate” the limitation.

Freedman manufactures stowable seats, which have the ability to fold away to create more interior space in a vehicle. Freedman also owns U.S. Patent 5,492,389 (the '389 patent), titled “Stowable Seat.” The claims of the '389 patent require a support member “slidably mounted” to the seat base.

Defendants American Seating and Kustom Fit also manufacture seating products for the transportation industry, including a seat known as the Horizon EZ Fold. While the invention claimed in the '389 patent requires a “slidably mounted” support member, the Horizon EZ Fold device uses a rotatably mounted support (ie, the moveable end of the EZ Fold's support member does not slide or otherwise move along the seat base).

After Freedman sued both American Seating and Kustom Fit for patent infringement, both sides filed motions for summary judgment on the issue of infringement. The parties agreed that there was no dispute as to claim construction and that the EZ Fold literally meets all of the limitations of claim 1 of the '389 patent except for the “slidably mounted” limitation. The sole issue before the district court, therefore, was whether the EZ Fold's support member was equivalent to the support member in the '389 patent. The district court granted summary judgment on the issue of infringement by equivalence, finding that each device performed “substantially the same function in substantially the same manner to achieve substantially the same result.”

On appeal, the Federal Circuit agreed with American Seating and Kustom Fit and found that the district court's decision violated the “all limitations” rule. According to the Federal Circuit, “courts must consider the totality of the circumstances of each case and determine whether the alleged equivalent can be fairly characterized as an insubstantial change from the claimed subject matter without rendering the pertinent limitation meaningless.” The court found that the structural difference in the mounting of the moveable end to the seat base is not a “subtle difference in degree,” but rather, “a clear, substantial difference or difference in kind.” The court also considered other factors, including the fact that the patent involved “relatively simple and well known technologies” and that Freedman stated it was aware of other mechanisms besides the slidably mounted type.

Federal Circuit Interprets Copyright Act Safe Harbor for Machine Maintenance Or Repair

In a case of first impression, the Federal Circuit interpreted section 117(c) of the Copyright Act, which provides a limited copyright exemption for machine maintenance or repair. Storage Tech. Corp. v. Custom Hardware Eng'g & Consulting, Inc., No. 04-1462, 2005 WL 2030281 (Fed. Cir. Aug. 24, 2005). The Federal Circuit overturned a preliminary injunction against Custom Hardware Engineering & Consulting, Inc. (“Custom”), an independent service provider that maintains automated tape cartridge libraries manufactured by Storage Technology Corp. (“StorageTek”).

In its complaint, StorageTek alleged that Custom committed copyright infringement, violated the Digital Millennium Copyright Act, and misappropriated its trade secrets by intercepting error messages (known as fault symptom messages) transmitted by StorageTek's software, and by copying maintenance code. In order to reconfigure the maintenance code, Custom had to override a password protection scheme implemented by StorageTek. The U.S. District Court for the District of Massachusetts agreed with StorageTek, and issued a preliminary injunction preventing Custom from performing the aforementioned acts.

On appeal, the Federal Circuit found that Custom's activities fall within the safe harbor of section 117(c) because they constituted “maintenance” of the storage libraries as that term is defined by the Copyright Act. The court also sided with Custom on issues of copyright license, the Digital Millennium Copyright Act, and trade secrets. Judge Randall Rader dissented, stating that the “court's opinion today destroys copyright protection for software that continually monitors computing machine behavior.”

Eric Agovino is an associate in the New York office of Kenyon & Kenyon. He can be reached at 212-908-6858.

Federal Circuit Affirms District Court in Lemelson Case

In Symbol Techs., Inc., v. Lemelson Med., Educ. & Research Found., LP, No. 04-1451, 2005 WL 2173572 (Fed. Cir. Sept. 9, 2005), the Federal Circuit affirmed the decision of the district court that the patents-in-suit are unenforceable under the doctrine of prosecution laches. The district court had found that Lemelson Foundation's asserted patent claims were invalid for lack of enablement, unenforceable under the doctrine of prosecution laches, and not infringed by Symbol's products.

The late Jerome H. Lemelson filed a patent application in 1954 that disclosed methods and an apparatus for performing the inspection and measurement of objects. In 1956, Lemelson filed a second application, which issued as U.S. Patent 3,081,379 (the '379 patent). Also in 1963, but before the '379 patent issued, Lemelson filed a continuation-in-part application from the 1954 and 1956 applications, adding drawings and text. In 1972, he filed another continuation-in-part that eventually became the basis for 16 additional patent applications filed between 1977 and 1993. Defendant Lemelson Medical, Education & Research Foundation, LP (“Lemelson Foundation”) is the assignee of approximately 185 unexpired patents and patent applications of Lemelson. This patent portfolio has generated license agreements from more than 1000 companies for royalties upwards of $1.5 billion.

Symbol and its co-plaintiffs design, manufacture, and sell bar code scanners and related machine vision products, including laser and CCD bar code readers. Symbol filed a declaratory judgment action against Lemelson Foundation after its customers began to receive letters from Lemelson Foundation stating that the use of Symbol's products infringed Lemelson Foundation's patents. The district court concluded, inter alia, that Symbol's prosecution laches cause of action failed to state a claim upon which relief could be granted. Symbol appealed this decision to the Federal Circuit, which reversed the district court's judgment. Upon remand, the district court held that Lemelson Foundation's patents were unenforceable due to prosecution laches, invalid for lack of enablement, and not infringed. In support of its finding of prosecution laches, the district court pointed to the 18- to 39-year time period that elapsed between the filing and issuance of the patents in suit and found that Lemelson Foundation had engaged in “culpable neglect,” and that businesses were adversely affected because they were unable to determine what was patented and what was not patented.

On appeal, the Federal Circuit concluded that the district court did not abuse its discretion in finding Lemelson Foundation's patents unenforceable under the doctrine of prosecution laches. It, however, did not set forth clear guidelines for the application of the doctrine. Instead, the Federal Circuit stated that “there are no strict time limitations for determining whether continued refiling of patent applications is a legitimate utilization of statutory provisions or an abuse of those provisions. The matter is to be decided as a matter of equity, subject to the district court before which the issue is raised.” The court also noted that the doctrine should be used “sparingly.”

Since the court affirmed the district court's finding on prosecution laches, it did not address the district court's conclusions on priority dates, enablement, claim construction, infringement, or invalidity.

Federal Circuit Rules That Finding of Equivalence of Rotatably Mounted Seat Support Vitiated Limitation from Patent Claims

In Freedman Seating Co. v. Am. Seating Co., Nos. 04-1216, 04-1248, 2005 WL 1903786 (Fed. Cir. Aug. 11, 2005), the Federal Circuit overturned a ruling that American Seating Co. had infringed Freedman's patent under the doctrine of equivalents. In so doing, the court invoked the “all limitations” (a.k.a. “all elements”) rule, which holds that an element is not equivalent to a claim limitation if such a finding would “entirely vitiate” the limitation.

Freedman manufactures stowable seats, which have the ability to fold away to create more interior space in a vehicle. Freedman also owns U.S. Patent 5,492,389 (the '389 patent), titled “Stowable Seat.” The claims of the '389 patent require a support member “slidably mounted” to the seat base.

Defendants American Seating and Kustom Fit also manufacture seating products for the transportation industry, including a seat known as the Horizon EZ Fold. While the invention claimed in the '389 patent requires a “slidably mounted” support member, the Horizon EZ Fold device uses a rotatably mounted support (ie, the moveable end of the EZ Fold's support member does not slide or otherwise move along the seat base).

After Freedman sued both American Seating and Kustom Fit for patent infringement, both sides filed motions for summary judgment on the issue of infringement. The parties agreed that there was no dispute as to claim construction and that the EZ Fold literally meets all of the limitations of claim 1 of the '389 patent except for the “slidably mounted” limitation. The sole issue before the district court, therefore, was whether the EZ Fold's support member was equivalent to the support member in the '389 patent. The district court granted summary judgment on the issue of infringement by equivalence, finding that each device performed “substantially the same function in substantially the same manner to achieve substantially the same result.”

On appeal, the Federal Circuit agreed with American Seating and Kustom Fit and found that the district court's decision violated the “all limitations” rule. According to the Federal Circuit, “courts must consider the totality of the circumstances of each case and determine whether the alleged equivalent can be fairly characterized as an insubstantial change from the claimed subject matter without rendering the pertinent limitation meaningless.” The court found that the structural difference in the mounting of the moveable end to the seat base is not a “subtle difference in degree,” but rather, “a clear, substantial difference or difference in kind.” The court also considered other factors, including the fact that the patent involved “relatively simple and well known technologies” and that Freedman stated it was aware of other mechanisms besides the slidably mounted type.

Federal Circuit Interprets Copyright Act Safe Harbor for Machine Maintenance Or Repair

In a case of first impression, the Federal Circuit interpreted section 117(c) of the Copyright Act, which provides a limited copyright exemption for machine maintenance or repair. Storage Tech. Corp. v. Custom Hardware Eng'g & Consulting, Inc., No. 04-1462, 2005 WL 2030281 (Fed. Cir. Aug. 24, 2005). The Federal Circuit overturned a preliminary injunction against Custom Hardware Engineering & Consulting, Inc. (“Custom”), an independent service provider that maintains automated tape cartridge libraries manufactured by Storage Technology Corp. (“StorageTek”).

In its complaint, StorageTek alleged that Custom committed copyright infringement, violated the Digital Millennium Copyright Act, and misappropriated its trade secrets by intercepting error messages (known as fault symptom messages) transmitted by StorageTek's software, and by copying maintenance code. In order to reconfigure the maintenance code, Custom had to override a password protection scheme implemented by StorageTek. The U.S. District Court for the District of Massachusetts agreed with StorageTek, and issued a preliminary injunction preventing Custom from performing the aforementioned acts.

On appeal, the Federal Circuit found that Custom's activities fall within the safe harbor of section 117(c) because they constituted “maintenance” of the storage libraries as that term is defined by the Copyright Act. The court also sided with Custom on issues of copyright license, the Digital Millennium Copyright Act, and trade secrets. Judge Randall Rader dissented, stating that the “court's opinion today destroys copyright protection for software that continually monitors computing machine behavior.”

Eric Agovino is an associate in the New York office of Kenyon & Kenyon. He can be reached at 212-908-6858.