·       In Soverain Software LLC v. Newegg Inc. the Federal Circuit vacated in part and reversed in part an Eastern District of Texas decision finding Newegg Inc. liable for infringement of U.S. Patent Nos. 5,715,314, 5,909,492, and 7,272,639, all relating to electronic commerce.  The Federal Circuit offered clarifying insight on the obviousness doctrine.  The background facts are as follows:  Soverain Software purchased three software patents through bankruptcy proceedings and then proceeded to sue seven different entities for infringing the patents.  Six of the defendants settled and entered paid up license agreements with Soverain.  The seventh defendant, Newegg, refused to settle and argued that the asserted patents are all invalid and even if valid, Newegg’s system is different and non-infringing.  At trial, the district court refused to permit Newegg to present its obviousness argument to the jury and ruled that the patents were valid as a matter of law.  The jury found that Newegg had infringed two of the patents but not the third; the district court, however, entered judgment as a matter of law that Newegg infringed the third patent.  Newegg appealed and the Federal Circuit found all three patents obvious.  The federal circuit had three major discussion points:  (1) each element of the disputed claims was found in the prior art, (2) combining those elements would be obvious to one of skill in the art, and (3) licenses entered in settlement to a lawsuit do not constitute evidence of commercial success. 

·       In Rexnord Industries, LLC v. Kappos the Federal Circuit reversed a BPAI decision holding claims for a mechanical conveyor belt patentable.  The patent in question was asserted by Habasit Belting, Inc. against Rexnord Industries in an infringement suit in Delaware district court.  Rexnord filed a request for inter partes reexamination.  The examiner in the reexamination found all of the claims to be unpatentable for anticipation or obviousness. Habasit appealed the examiner’s findings, and the BPAI reversed, concluding that the claims of the patent were not anticipated by any of the references cited in the reexamination, and were unobvious over the cited references.  Rexnord appealed the BPAI decision to the Federal Circuit, arguing that the BPAI erroneously refused to review all of the arguments that Rexnord had presented as grounds for unpatentability.  The PTO countered that the BPAI only needed to consider the issue raised by Habasit on appeal, and had no obligation to consider other grounds that had been presented during reexamination, relying on a BPAI rule that “bars the presentation of new arguments outside appellant’s opening brief.”  The Federal Circuit noted that Rexnord was not the appellant before the BPAI since Habasit appealed the examiner’s decision, and concluded that the alternative bases for obviousness raised in the reexamination were properly raised on appeal to the Federal Circuit because they were fully raised in the reexamination and were not an issue for patentability until after the Board reversed the examiner.  The court then found the claims obvious on these additional grounds.

·       In Hall v. Bed Bath & Beyond, the Federal Circuit affirmed a Southern District of New Your district court’s dismissal of counts against Bed Bath & Beyond (BB&B) executives and counterclaims filed by BB&B, but concluded that the district court’s dismissal of Hall’s design patent infringement, unfair competition, and misappropriation claims for failure to state a claim on which relief can be granted under Federal Rule of Civil Procedure 12(b)(6).  BB&B argued in its motion to dismiss, and the district court agreed, that the complaint was insufficient because if failed to include any claim construction, but the Federal Circuit held the complaint met the requirements for pleading design patent infringement previously set out by the court in Phonometrics, Inc. v. Hospitality Franchise Systems, Inc.  Specifically, the court found the complaint (i) alleged ownership of the patent, (ii) named each defendant, (iii) cited the patent that was allegedly infringed, (iv) stated the means by which the defendant allegedly infringed, and (v) pointed to the sections of the patent law invoked, and in doing so met its burden to withstand a motion to dismiss under Rule 12(b)(6), Twombly and Iqbal. 

Last month, the UK Department for Culture, Media, and Sport released Digital Britain, a report regarding the future of communications infrastructure in the UK, how to deal with challenges of a digital economy (such as copyright infringement), and containing policy recommendations regarding how to move forward.  Click below for our thoughts on the report and associated documents.

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The Supreme Court of Canada recently made significant changes to its obviousness standard for patentability. The case addressed a dispute arising between the brand-name pharmaceutical manufacturer, Sanofi, and the Canadian generic manufacturer, Apotex.  The decision by the Supreme Court of Canada brings its obviousness standard closer to the standard recently set forth by the U.S. Supreme Court in KSR v. Teleflex. However, the Canadian obviousness standard still appears to be less stringent than the U.S. obviousness standard.  

More on Apotex, Inc. v. Sanofi-Synthelavo Canada after the jump.

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In a decision last week, the Ninth Circuit reversed a district court's grant of summary judgment to a copyright defendant on the basis of the "first sale" doctrine, codified at 17 U.S.C. § 109(a).  The defendant obtained the products bearing the copyright from a third party who legally purchased them outside the United States.  The court held that the first sale doctrine did not insulate this action from liability under 17 U.D.C. § 602(a), which states unauthorized importation is a violation of the copyright holder's distribution right. 

In doing so, the court held there was no clear inconsistency with its precedents allowing a defendant in a copyright infringement action to claim the "first sale doctrine" as a defense only where the disputed copies of a copyrighted work were either made or previously sold in the United States with the authority of the copyright owner, and the Supreme Court's decision in Quality King Distributors, Inc. v. L'anza Research International, Inc..  There, the issue was whether copies produced in the United States, shipped abroad, and then ultimately re-imported and sold without consent constituted infringement; the Court held it did not.  Here, it was undisputed the copies were manufactured and obtained abroad, thus taking them outside the decision in Quality King.  As a result, the defendant could not use the first sale doctrine as a defense to avoid liability for infringement.
 
More concerning Omega S.A. v. Costco Wholesale Corp. after the jump.

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In a decision last week, the Fifth Circuit affirmed a district court's conclusion it had subject matter jurisdiction over a trademark case, as well as its grant of a preliminary injunction.  While the activities giving rise to the claim of trademark infringement took place in Mexico, they had a "substantial effect" on United States commerce, and thus were within the court's subject matter jurisdiction.  

After ruling on subject matter jurisdiction, the court moved on to the issue of preliminary injunction.  The Fifth Circuit affirmed the preliminary injunction, stating the district court did not abuse its discretion concluding the plaintiff would likely prevail on the issue of likelihood of confusion, and that the likelihood of confusion would lead to an irreparable injury.  Unfortunately for practitioners, however, the court did not address the potential applicability of the Supreme Court's eBay decision to the commonly-applied presumption of irreparable harm in trademark cases, making it the second circuit court to pass on the issue (the Eleventh Circuit did likewise last month).

More concerning Paulsson Geophysical Servs., Inc. v. Sigmar after the jump.

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In a decision yesterday, the Federal Circuit affirmed a district court's denial of the defendant's motion to dismiss for lack of subject matter jurisdiction.  The court also denied the defendant's post-verdict motion for judgment as a matter of law.  The defendant contended that because it shipped its allegedly infringing products f.o.b. from its place of business in Canada, it did not sell or import the product in the United States, and thus there was no subject matter jurisdiction over the plaintiff's infringement claims.  Alternatively, the defendant argued these same facts in support of its motion for judgment as a matter of law.

The Federal Circuit noted that the district court had erred in considering the issue of whether allegedly infringing products had been sold or imported in the United States as an issue implicating the court's subject matter jurisdiction.  Instead, this issue was simply an element of the claim to be proven that did not affect the court's ability to hear the case.  On the merits, the Federal Circuit rejected the contention that because legal title to the products changed in Canada that there was not a "sale" in the United States as contemplated by § 271(a), given that the customer was in the United States and the products were shipped there.  As a result, the court affirmed the finding of infringement.

More detail of Litecubes, LLC v. N. Light Prods., Inc. after the jump.

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In a ruling today, the Federal Circuit affirmed in part a decision by the International Trade Commission (ITC) concerning the application of 19 U.S.C. § 1337 and 35 U.S.C. § 271(e)(1) to imported products and products imported produced via a patented process.  

The main issue before the court was whether the safe harbor against infringement provided by § 271(e) applies in proceedings under § 1337 relating to method patents.  The court determined that applying the safe harbor exemption would further congressional policy of removing patent-based barriers to federal regulatory approval of medical products, and therefore the safe harbor applied.

In a partial dissent, Judge Linn agreed that the policies of § 271(e) would be furthered by its application to § 1337 proceedings, but that the plain text of the statute precluded that result.  In his words:

I see no basis for concluding that Congress did not intend what it said.  I do not disagree with the majority's policy judgment that § 1337 and § 271 should be brought into synchrony.  But that is not a decision for a court to make, particularly in light of the legislative history.

The court also determined that jurisdiction was appropriate as the ITC's assignment is to prevent and remedy unfair acts flowing from infringement.  The ITC's jurisdiction under § 1337, according to the court, is broad, and it therefore erred in holding that it lacked jurisdiction absent an actual sale or contract for sale of the imported product.

More detail of Amgen, Inc. v. Int'l Trade Comm'n after the jump,

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In a recent decision, the Second Circuit decided the one outstanding issue from a case it had previously decided in March 2007 (previously blogged here), namely whether the "famous marks" doctrine the court held Congress has not yet incorporated into federal trademark law might support a New York common law claim for unfair competition.  The Second Circuit certified two questions to the New York Court of Appeals before resolving the issue.  With the answers back, the court affirmed the district court grant of summary judgment to the defendants in its entirety.

With the case now fully decided by the Second Circuit, the way is now clear for a possible appeal to the Supreme Court, as this case conflicts with the Ninth Circuit's 2004 decision in Grupo Gigante S.A. de C.V. v. Dallo & Co., which recognized the "famous marks" doctrine rejected by the Second Circuit in this case.

More detail of ITC Ltd. v. Punchgini, Inc. after the jump.

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In a recent decision, the Fifth Circuit affirmed a district court's finding of infringement and disgorgement of profits, but increased the amount of profits awarded because the defendant failed to provide evidence of its costs to reduce the award.  Interestingly, the infringement took place entirely outside the United States, namely in Saudi Arabia.  Even though the products were not sold in the United States, under the Fifth Circuit's decision in American Rice, Inc. v. Arkansas Rice Growers Cooperative Association, enforcement of trademark rights extraterritorially was permitted if it was not an affront to Saudi sovereignty.  Here, there was no such evidence of record (such as a finding by a Saudi court that there was no infringement), so the court determined that jurisdiction was properly exercised.

The court also vacated the district court's award of attorney's fees on the basis that it represented an inconsistent award.  The district court awarded profits, but no attorney fees under the Lanham Act, and attorney's fees, but no other damages under a breach of contract theory.  Because an award of both attorney fees and profits would mean portions of the award would come from different legal theories under Texas law, the court did not permit recovery of both.

More detail of Am. Rice, Inc. v. Producers Rice Mill, Inc. after the jump.

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In a decision Tuesday, the Federal Circuit addressed the issuance, stay, and subsequent dissolution of a permanent injunction.  Further, the court addressed how damages should be allocated from infringement during a stay.  The district court took the jury's reasonable royalty for pre-verdict infringement and trebled it to determine the applicable post-verdict royalty. 

The Federal Circuit vacated this decision, noting that this calculation did not take "into account the fact that the sales, although authorized under the terms of the district court's stay, were nevertheless infringing and subject to an injunction."  The district court's use of willfulness was not the correct inquiry "when the infringement is permitted by a court-ordered stay," but instead should have taken "into account the change in the parties' bargaining positions, and the resulting change in economic circumstances, resulting from the determination of liability."

The court also remanded the case for a determination of whether the post-verdict damages should be altered in light of the Supreme Court's decision in Microsoft v. AT&T.

More detail of Amado v. Microsoft Corp. after the jump.

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