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As if the recent attacks on the tax-exempt status of Internet transactions were not enough for e-commerce vendors to worry about, a new problem has come to light for companies that sell goods or services via an Internet Web site. PanIP, LLC (PanIP), a company based in San Diego, has initiated lawsuits in the U.S. District Court for the Southern District of California against over 50 companies transacting business over their Internet Web sites, alleging that such activity constitutes infringement of two patents owned by PanIP.1 The patents asserted by PanIP are generally directed to "data processing systems designed to facilitate commercial, financial and educational transactions between multimedia terminals"2 and to "a system for filing applications with an institution from a plurality of remote sites, and for automatically processing said applications in response to each applicant's credit rating obtained from a credit reporting service."3
The FDA has just approved (April 24) the first drug eluting stent for angioplasty procedures to open clogged coronary arteries. In most cases, a stent is left permanently in the artery to keep the vessel open after angioplasty. The new stent slowly releases a drug, and has been shown in clinical studies to significantly reduce the rate of re-blockage that occurs with existing stents.
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Due to the rising cost of "defensive medicine," the U.S. House of Representatives recently passed legislation to limit or ban punitive damages in product liability lawsuits over injuries allegedly caused by FDA-approved products. 2003 H.R. 5. The HEALTH "Help Efficient, Accessible, Low-Cost Timely Healthcare" Act of 2003 was introduced in the House on February 5. This bill passed in the House on March 13 and is currently on the calendar of the Senate.
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The Supreme Court's decision in <i>Festo</i> has been hailed by many as being one of the most significant cases to impact the patent system. <i>Festo Corp. v. Shoektsu Kinzoku Kogyo Kabushiki Co., Ltd.</i>, 122 S.Ct. 1831 (2002). Some say that more significant than <i>Festo</i> is <i>Johnson</i>, in which the Federal Circuit held that subject matter disclosed but not claimed in a patent cannot be covered by the doctrine of equivalents. See <i>Johnson & Johnston Associates Inc. v. R.E. Service Co.</i>, 285 F.3d 1046 (Fed. Cir. 2002) (<i>en banc</i>).
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Over the years, I have worked with many in-house counsel as their outside litigation counsel. These experiences serve as the basis for this article, which discusses some of the things that in-house counsel can do with respect to their outside counsel to improve their company's chances of prevailing in patent litigation.
Generally, patent attorneys and patent agents are aware that under its regulations, the Patent and Trademark Office (USPTO) allows certain parties, such as small businesses (referred to generally as "small entities"), to pay reduced fees. This can be a big benefit to small businesses and individual inventors, many of whom have only limited funds with which to prosecute a patent. Most attorneys and agents evaluate a client for small entity status based on the "500 employee rule" — if the client has fewer than 500 employees, they are a small entity. This rule serves well for a quick "ball park" determination and the elimination of large clients from eligibility, however determining whether a party truly qualifies as a small entity is more complicated. For example, in certain circumstances, a company that qualifies as a small business under the Small Business Administration's (SBA) guidelines might not necessarily qualify as a small entity for the purpose of paying reduced USPTO fees. Improperly claiming small entity status can open the patent to attack during litigation, and the cost of defending against such a claim can easily exceed the savings on government fees.