IP News

After a 14-day jury trial, both parties moved for judgment as a matter of law, and the district court granted Broadcom's motion, ruling that Emulex infringed one claim of the '150 patent. The jury subsequently found that Emulex had not shown that the asserted claims were obvious. The court further found that Emulex's own expert had conceded that the accused device infringed “at least some of the time.” Id . at 7. The district court concluded that Broadcom suffered irreparable harm, and was entitled to an injunction, but included an 18-month sunset period during which original equipment manufacturers (OEMs) could continue to sell devices containing infringing chips. Id . at 22.

The Federal Circuit affirmed the district court's JMOL of infringement, finding that Emulex's half-rate architecture “corresponds to a frequency offset as required by [the asserted claim],” and dismissed Emulex's argument that the language “corresponding to” limits the claim to full rate architecture. Id. at 11. The Federal Circuit found that the language of the specification did not suggest that “corresponding to” meant “equal to,” and further noted that under Emulex's claim construction, disclosed quarter-rate architecture embodiments of the invention would not be covered by the claims. Id. Further, the Federal Circuit agreed with the district court's finding that Emulex's expert had conceded that the accused device “reduced the offset at least some of the time,” meaning that it satisfied all claim limitations at least some of the time, and thus infringed. Id. at 12.

The Federal Circuit affirmed the district court's finding of non-obviousness, finding that the closest prior art did not address the same problem as the '150 patent, and lacked the '150 patent's “critical ' data recovery function.” Id. at 14. The Federal Circuit held that one of skill in the art would not have had a reason to modify the prior art to include a data recovery function, nor would there have been a reasonable expectation of success had he or she decided to do so. Id. at 14'15.

Finally, the Federal Circuit affirmed the district court's grant of a permanent injunction with an 18-month sunset period. The Federal Circuit noted with approval the district court's finding that the market in this case was characterized by “design win scenarios,” in which component manufacturers compete for the business of four major OEM manufacturers, who then commit to using the winner's component until the next design cycle. Id. at 17. The incumbency effect inherent to a design-win market was, according to the district court, the primary cause of irreparable harm to Broadcom. The Federal Circuit contrasted the market in this case with that of Apple, Inc. v. Samsung Electronics Co., 678 F.3d 1314 (Fed. Cir. 2012), which involved the sale of products to individual customers. Slip. Op. at 19. Because of the differences in market type, Emlux's reliance on Apple was misplaced, and the district court had properly concluded that “Broadcom's exclusion from a fair opportunity to compete for design wins constituted irreparable harm.” Id. at 20. Finally, the Federal Circuit pointed out that in Apple, plaintiffs sought a preliminary injunction, and thus had to establish likelihood of success on the merits as well as likelihood of irreparable harm, whereas here, Broadcom had already succeeded on the merits and had suffered irreparable harm. Thus, the balancing done in Apple was unnecessary, and the district court did not abuse its discretion in granting a permanent injunction. Id.

Federal Circuit Upholds Inequitable Conduct Ruling

On Oct. 9, 2013, a Federal Circuit panel of Judges Prost, Moore, and O'Malley issued an opinion in Intellect Wireless, Inc. v. HTC Corp. and HTC America, Inc., No. 2012-1658. The unanimous opinion, authored by Judge Moore, affirmed the district court's judgment that two of Intellect's patents (U.S. Patent Nos. 7,266,186 and 7,310,416) were unenforceable due to inequitable conduct. Specifically, in order to overcome a prior art reference during prosecution, the sole inventor of the patents, Daniel Henderson, submitted a declaration under 37 C.F.R. '1.131, in which he falsely stated that “the claimed invention was actually reduced to practice ' in July of 1993.” Slip Op. at 3'4. The district court found, however, that none of the inventions was ever reduced to practice, nor were the false statements in the declarations withdrawn. Id . at 4. Citing Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556 (Fed. Cir. 1983), the Federal Circuit held that in submitting affidavits containing false statements and failing to “openly advise the PTO of [the] misrepresentations,” Henderson's inequitable conduct was per se material, and these submissions “raise[] a strong inference of intent to deceive,” which Henderson was unable to overcome. Slip Op. at 7, 9-10.

EFF Files for Inter Partes Review of Podcasting Patent

Employing one of the new provisions of the America Invents Act, the Electronic Frontier Foundation (EFF) on Oct. 16 challenged the so-called “podcasting patent” that one company has asserted against podcasters in order to obtain licensing fees.

The EFF filed a petition for inter partes review with the U.S. Patent and Trademark Office to challenge a patent held by Personal Audio LLC. (See the petition at http://bit.ly/17VU5gJ.) In January, Personal Audio began suing individual podcasters, including comedian Adam Carolla and three major television networks, claiming they were infringing its patent. See, www.google.com/patents/US8112504. The company has also sent demand letters to other podcasters requesting they pay a licensing fee, EFF said.

Personal Audio's business model is based on leveraging its patents and does not do any podcasting itself ' making it a non-practicing entity, also known disparagingly as a “patent troll.”

“As we show in our petition, Personal Audio is not the true inventor of this technology and should not be demanding a payout from today's podcasters,” EFF staff attorney Daniel Nazer said in a statement. “If you look into the history of podcasting, you won't see anything about Personal Audio.”

Nazer told The Intellectual Property Strategist's ALM affiliate CorpCounsel.com that inter partes review is a great way to challenge a patent because it is cheaper and faster than conventional litigation. But the expense is still prohibitive for most podcasters who work out of a garage or attic, he said, noting that it costs $23,000 to file a petition for review. “It shows how stacked the system is against small players,” he said.

EFF also used crowdsourcing to find prior art or earlier examples of podcasting that could be used to invalidate the patent. In the petition, EFF cites three examples: Internet Pioneer Carl Malamud's “Geek of the Week” online radio show, and Web broadcasts by CNN and the Canadian Broadcasting Corporation (CBC).

Demonstrating the public outrage over patent trolls and the popularity of podcasts, members of the public donated $76,160 to fund EFF's “Save Podcasting” campaign ' more than twice the amount EFF originally requested.

' Lisa Shuchman , Corporate Counsel

Howard Shire is a partner and Wyatt Delfino is an associate in the New York office of Kenyon & Kenyon LLP.

Federal Circuit Upholds Permanent Injunction In 'Design Win' Market

On Oct. 7, 2013, a Federal Circuit panel of Judges Rader, Lourie, and Wallach, issued its unanimous opinion, authored by Judge Rader, in Broadcom Corp. v. Emulex Corp., No. 2012-1309. In it, the Federal Circuit affirmed the district court's finding that high-speed broadband controller chips sold by Emulex infringe Broadcom's patent, and upheld the district court's permanent injunction with “a well-crafted sunset period.” Slip Op. at 2.

According to the Federal Circuit, Broadcom's patent, U.S. Patent No. 7,058,150 (“the '150 patent”), solved the problem of sampling high data rate analog signals to extract the data they contain, by using “a phase interpolator to perform high speed sampling of a signal using a technique known as clock and data recovery.” Id. at 4. The invention also solves the problem of interference caused by multiple oscillators on an IC chip, by using a single “master oscillator in a multiple receiver environment.” Id. (internal quotations omitted).

After a 14-day jury trial, both parties moved for judgment as a matter of law, and the district court granted Broadcom's motion, ruling that Emulex infringed one claim of the '150 patent. The jury subsequently found that Emulex had not shown that the asserted claims were obvious. The court further found that Emulex's own expert had conceded that the accused device infringed “at least some of the time.” Id . at 7. The district court concluded that Broadcom suffered irreparable harm, and was entitled to an injunction, but included an 18-month sunset period during which original equipment manufacturers (OEMs) could continue to sell devices containing infringing chips. Id . at 22.

The Federal Circuit affirmed the district court's JMOL of infringement, finding that Emulex's half-rate architecture “corresponds to a frequency offset as required by [the asserted claim],” and dismissed Emulex's argument that the language “corresponding to” limits the claim to full rate architecture. Id. at 11. The Federal Circuit found that the language of the specification did not suggest that “corresponding to” meant “equal to,” and further noted that under Emulex's claim construction, disclosed quarter-rate architecture embodiments of the invention would not be covered by the claims. Id. Further, the Federal Circuit agreed with the district court's finding that Emulex's expert had conceded that the accused device “reduced the offset at least some of the time,” meaning that it satisfied all claim limitations at least some of the time, and thus infringed. Id. at 12.

The Federal Circuit affirmed the district court's finding of non-obviousness, finding that the closest prior art did not address the same problem as the '150 patent, and lacked the '150 patent's “critical ' data recovery function.” Id. at 14. The Federal Circuit held that one of skill in the art would not have had a reason to modify the prior art to include a data recovery function, nor would there have been a reasonable expectation of success had he or she decided to do so. Id. at 14'15.

Finally, the Federal Circuit affirmed the district court's grant of a permanent injunction with an 18-month sunset period. The Federal Circuit noted with approval the district court's finding that the market in this case was characterized by “design win scenarios,” in which component manufacturers compete for the business of four major OEM manufacturers, who then commit to using the winner's component until the next design cycle. Id. at 17. The incumbency effect inherent to a design-win market was, according to the district court, the primary cause of irreparable harm to Broadcom. The Federal Circuit contrasted the market in this case with that of Apple, Inc. v. Samsung Electronics Co., 678 F.3d 1314 (Fed. Cir. 2012), which involved the sale of products to individual customers. Slip. Op. at 19. Because of the differences in market type, Emlux's reliance on Apple was misplaced, and the district court had properly concluded that “Broadcom's exclusion from a fair opportunity to compete for design wins constituted irreparable harm.” Id. at 20. Finally, the Federal Circuit pointed out that in Apple, plaintiffs sought a preliminary injunction, and thus had to establish likelihood of success on the merits as well as likelihood of irreparable harm, whereas here, Broadcom had already succeeded on the merits and had suffered irreparable harm. Thus, the balancing done in Apple was unnecessary, and the district court did not abuse its discretion in granting a permanent injunction. Id.

Federal Circuit Upholds Inequitable Conduct Ruling

On Oct. 9, 2013, a Federal Circuit panel of Judges Prost, Moore, and O'Malley issued an opinion in Intellect Wireless, Inc. v. HTC Corp. and HTC America, Inc., No. 2012-1658. The unanimous opinion, authored by Judge Moore, affirmed the district court's judgment that two of Intellect's patents (U.S. Patent Nos. 7,266,186 and 7,310,416) were unenforceable due to inequitable conduct. Specifically, in order to overcome a prior art reference during prosecution, the sole inventor of the patents, Daniel Henderson, submitted a declaration under 37 C.F.R. '1.131, in which he falsely stated that “the claimed invention was actually reduced to practice ' in July of 1993.” Slip Op. at 3'4. The district court found, however, that none of the inventions was ever reduced to practice, nor were the false statements in the declarations withdrawn. Id . at 4. Citing Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556 (Fed. Cir. 1983), the Federal Circuit held that in submitting affidavits containing false statements and failing to “openly advise the PTO of [the] misrepresentations,” Henderson's inequitable conduct was per se material, and these submissions “raise[] a strong inference of intent to deceive,” which Henderson was unable to overcome. Slip Op. at 7, 9-10.

EFF Files for Inter Partes Review of Podcasting Patent

Employing one of the new provisions of the America Invents Act, the Electronic Frontier Foundation (EFF) on Oct. 16 challenged the so-called “podcasting patent” that one company has asserted against podcasters in order to obtain licensing fees.

The EFF filed a petition for inter partes review with the U.S. Patent and Trademark Office to challenge a patent held by Personal Audio LLC. (See the petition at http://bit.ly/17VU5gJ.) In January, Personal Audio began suing individual podcasters, including comedian Adam Carolla and three major television networks, claiming they were infringing its patent. See, www.google.com/patents/US8112504. The company has also sent demand letters to other podcasters requesting they pay a licensing fee, EFF said.

Personal Audio's business model is based on leveraging its patents and does not do any podcasting itself ' making it a non-practicing entity, also known disparagingly as a “patent troll.”

“As we show in our petition, Personal Audio is not the true inventor of this technology and should not be demanding a payout from today's podcasters,” EFF staff attorney Daniel Nazer said in a statement. “If you look into the history of podcasting, you won't see anything about Personal Audio.”

Nazer told The Intellectual Property Strategist's ALM affiliate CorpCounsel.com that inter partes review is a great way to challenge a patent because it is cheaper and faster than conventional litigation. But the expense is still prohibitive for most podcasters who work out of a garage or attic, he said, noting that it costs $23,000 to file a petition for review. “It shows how stacked the system is against small players,” he said.

EFF also used crowdsourcing to find prior art or earlier examples of podcasting that could be used to invalidate the patent. In the petition, EFF cites three examples: Internet Pioneer Carl Malamud's “Geek of the Week” online radio show, and Web broadcasts by CNN and the Canadian Broadcasting Corporation (CBC).

Demonstrating the public outrage over patent trolls and the popularity of podcasts, members of the public donated $76,160 to fund EFF's “Save Podcasting” campaign ' more than twice the amount EFF originally requested.

' Lisa Shuchman , Corporate Counsel

Howard Shire is a partner and Wyatt Delfino is an associate in the New York office of Kenyon & Kenyon LLP.