Monday, May 2, 2016

U.S. Supreme Court to Consider Whether Laches Remains a Defense to Patent Damages Claims

The U.S. Supreme Court today granted cert in SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, Case No. 15-927.  Here is the question presented in the petition for certiorari:
Whether and to what extent the defense of laches may bar a claim for patent infringement brought within the Patent Act’s six-year statutory limitations period, 35 U.S.C. § 286.
Back in September I blogged about the Federal Circuit decision that led to the cert petition, in which the majority held that "Congress codified a laches defense in 35 U.S.C. § 282(b)(1) that may bar legal remedies," notwithstanding the Supreme Court's decision in Petrella v. Metro-Goldwyn-Mayer that "the equitable defense of laches (unreasonable, prejudicial delay in commencing suit)" does not bar a claim for damages occurring within copyright's three-year limitations period.  The Federal Circuit just recently reaffirmed the holding in SCA Hygiene in its March decision in Romag Fasteners, Inc. v. Fossil, Inc., which I blogged about here. 

Here is the docket page for SCA Hygiene as maintained by Scotus Blog.  The Court also granted cert today in a copyright case Star Athletica, LLC v. Varsity Brands, Inc., to address the question "What is the appropriate test to determine when a feature of a useful article is protectable under § 101 of the Copyright Act?"

Friday, April 29, 2016

Comments on India's DIPP Paper on SEPs and FRAND

Recently I published a post linking to the India Department of Industrial Policy and Promotion (DIPP) Discussion Paper on Standard Essential Patents and Their Availability on FRAND Terms (available here) and the comments submitted by the the Global Antitrust Institute, George Mason University School of Law, on the India Department of Industrial Policy and Promotion's Discussion Paper on Standard Essential Patents (available here).  Some of the other comments that were received prior to the April 22 deadline are available on the Centre for Internet and Society website here, and I understand that others may yet be added.  The ones available thus far include:

Comments by Professor Jorge Contreras (who brought this collection of comments to my attention); 

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In other news, the U.S. Court of Appeals for the Federal Circuit today denied a petition for a writ of mandamus in In re T.C. Heartland LLC, a case in which the petitioner challenged the Federal Circuit's long-standing interpretation of the federal patent venue statute.  Though not directly related to patent damages, the court's interpretation makes it very easy for patent plaintiffs to engage in forum shopping, which is a major reason why so many U.S. patent actions are filed in the Eastern District of Texas or (as here) the District of Delaware.  I'd expect a petition for rehearing en banc or cert petition.

Thursday, April 28, 2016

Two New Papers on Postexpiration Royalties

1.  Wei-Lin Wang has published an article titled A Study on the Legality of Royalty Collection Clauses after Expiration of Patent Rights, 15 J. Marshall Review of Intellectual Property Law 213 (2016).  Here is a link to the article, and here is the abstract:
Whether a contract clause may permit a patent owner to continuously collect royalty payments from a licensee after the expiration of its patent rights is a highly controversial issue in practice. Some believe that because patent rights are a kind of monopoly granted by the government, it shall not be extended after expiration; otherwise, it shall be regarded as patent misuse and/or unfair competition as the case may be. Nonetheless, others believe that this kind of clause is actually beneficial to a licensee because the licensee is allowed to make royalty payments throughout the whole patent term and even after expiration, which is helpful in terms of innovation. Regarding such debate, the Supreme Court of the United States adopts the view of the former, strongly opposing the collection of royalties after a patent’s expiration. Recently in Kimble v. Marvel, the Supreme Court reviewed this issue all over again. The Supreme Court reasoned that, although its former judgment might have certain flaws, there are no special justifiable reasons to correct such former judgment, and according to the doctrine of stare decisis, a court must abide by its former judgment in order to maintain the reliability of judicial decisions. The Supreme Court leaves such issues to the hand of Congress, waiting for future amendments to the law. Hence, this issue has not yet been settled and needs further clarification by the judicial and legislative branches of the United States. The author believes that such clauses might be simultaneously good and bad for innovation and economic efficiency depending upon the circumstances and, therefore, the correct approach is to examine such clauses based on the “rule of reason” principle. The author offers suggestions regarding this issue after comparing different views and approaches adopted by the relevant authorities of the United States and Taiwan.
Note that, although the abstract refers to "relevant authorities of the United States and Taiwan," I don't see anything in the article referencing Taiwanese authorities.
2.  Richard H. Stern has published an article titled Kimble:  Patent Misuse Through the Lens of Patent Policy, Not Antitrust Policy, 38 European Intellectual Property Review 182 (2016).  (For those of you with Westlaw accounts, this journal is available on Westlaw under "International Materials > European Union > European Union Journals".)  Here is the abstract:
In its first important patent misuse decision in more than four decades, the Kimble case, the US Supreme Court rejected several decades of efforts in the Federal Circuit and other lower courts to limit the scope of the patent misuse doctrine. That doctrinal counter-movement had sought to confine assertion of a misuse defence to cases where the practice challenged as misuse had severe anti-competitive effects in a relevant market that were comparable to those required to support a conclusion of antitrust violation. In addition, the Federal Circuit had carved out of the misuse and exhaustion doctrines all "conditional" sales by patentees (sales that the patentee had made subject to conditions such as limitations on use), drastically curtailing the application of those doctrines. Yet the Supreme Court had, early in the 20th century, held that patentees could not lawfully impose conditions on products they sold, expressly overruling cases upholding that practice. In its Kimble decision, the Supreme Court rejected the application of antitrust policies to the analysis of patent misuse. Misuse is based on patent policy, the Kimble court held, not antitrust policy, and it seeks to further the accomplishment of goals of the patent system, not those of the antitrust laws. Kimble thus calls for a return to the patent misuse doctrines that the Supreme Court declared during the first half of the 20th century and a rejection of the later contrary movement in the last part of the 20th century. The reasoning of the court not only rejects any requirement of anti-competitive market effects for making a misuse holding, but it undercuts any use of "conditional" sales for imposing restrictions.
I'd note only that the Federal Circuit's recently-decided en banc decision in Lexmark Int'l, Inc. v. Impression Products, Inc. (see my post here) doesn't read Kimble or other Supreme Court case law as preventing conditional sales (a possibility Mr. Stern himself foresaw, see p.189).  There is a cert petition pending in that case, though.  For my own (negative) view of Kimble, see my post here.

Monday, April 25, 2016

Patent Remedies at the ALEA Annual Meeting

The American Law & Economics Association will hold its annual meeting at Harvard Law School May 20-21.  Information is available here, and the program here.  Norman Siebrasse and I will be presenting our paper The Value of the Standard, which I have previously mentioned on the blog here.  In addition, Erik Hovenkamp will be presenting a paper titled A Broader Look at Patent Royalties and Antitrust, which I mentioned on the blog here, and Mengxi Zhang will be presenting his paper Optimal Remedies for Patent Infringement (coauthored with Keith Hylton), which I mentioned on the blog here.  There also will be several other papers dealing with various aspects of intellectual property law, among other fields, in what looks to be a very stimulating conference.  I'm looking forward to it.

In other news, the U.S. Supreme Court today hears oral argument in Kirtsaeng v. John Wiley & Sons, Inc., on the question of the appropriate standard for awarding the prevailing party its attorneys' fees in copyright cases; and in Cuozzo Speed Technologies, LLC v. Lee, on issues relating to inter partes review.  Ronald Mann has a nice write-up on each of these cases over at Scotus Blog (see here and here).

Friday, April 22, 2016

Patent Remedies at the Upcoming AIPLA Spring Meeting

The American Intellectual Property Law Association (AIPLA) will be holding its spring meeting in Minneapolis from May 18-20 (information available here).  Of particular interest to readers of this blog:  on Thursday, May 19, at 2 p.m. there will be a session titled "Litigation:  The New Era of Patent Litigation:  Recent Developments in Damages and Discovery," featuring individual presentations on "Sanctions After Recent Amendments to the Federal Rules," "The Practicalities of Proving Patent Damages Given Changes in Case Law," and "Trends in Willfulness and Fee Petitions."  (I wonder if the Supreme Court will have decided Halo and Stryker by then?)  At the same time this session is going on, I will be speaking on another panel (which I also commend to your attention!), on copyright's fair use defense; and a third panel will be addressing "Patent Litigation: Sinking Ships and Rising Seas."  There's also a session on Wednesday, May 18, on patent licensing, and of course several other panels on a wide range of IP topics.

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While on the subject of conferences, as noted earlier this week next Tuesday, April 26, from 8:30 a.m. to 1:00 p.m. the University of Minnesota Law School will be hosting its Fifth Annual Patent Symposium, cosponsored by Briggs and Morgan P.A., on the subject "Keeping Up With Patent Remedies:  What You Need to Know About Injunctions and Damages in Patent Infringement Cases."  This event is free.  Hope to see some of you there.

Thursday, April 21, 2016

A Recent German Case on Urgency and Preliminary Injunctions

Several of the German decisions I've blogged about over the past three years have focused on the question of whether the party moving for a preliminary injunction has acted with the requisite "urgency" (Dringlichkeit) (see here, here, here, and here).  A recent addition to the mix is the Judgment of the Karlsruhe Oberlandesgericht of Sept. 23, 2015, 6 U 52/15, reported in the December 2015 issue GRUR-RR at pp. 509-12 under the title “Voraussetzungen für eine einstweilige Verfügung in Patentsachen") (Conditions for a Preliminary Injunction in Patent Cases).  The facts, a little complicated, are as follows.  Plaintiff is the owner of European Patent 2,295,299B1 for "[a] kit for inflating and repairing inflatable articles."  A company (designated "X" in the judgment) filed a postgrant opposition, which the EPO rejected on April 30, 2014.  This decision was affirmed on appeal on July 1, 2015.  The patent owner also commenced infringement proceedings against X, prevailing before both the district court and (on November 12, 2014) the court of appeals.  It was only during this appeal that the patent owner added a claim (successfully) for infringement of EP 2,295,299B1, pursuant to article 145 of the German Patent Act (stating that "Any person who has brought an action pursuant to section 139 may bring a further action against the defendant for the same or the same kind of act by virtue of another patent only where he was, through no fault of his own, not in the position to also assert this patent in earlier proceedings").  Meanwhile, the patent owner had become aware in May 2014 that a sister company of X was distributing this same accused product in Germany, but it held off sending a warning letter until November 26, 2014, that is, shortly after the appellate court's decision in the case against X.  The sister company rejected the warning on December 5, 2014, and as a result the patent owner filed a motion for a preliminary injunction that same day and sued the sister company for infringement on January 9, 2015.  The district court granted the preliminary injunction, and the sister company/defendant appealed.

On appeal, the court affirmed, rejecting the defendant's argument that the patent owner had not acted with the requisite urgency by waiting until December 2014, seven months after learning that the defendant was selling the accused product, to move for a preliminary injunction.  The patent owner had filed its motion within a month of learning that the defendant was not planning to pull the product from the market notwithstanding the infringement judgment against its sister X.  Had it proceeded earlier, its litigation risk would have been greater, and had it sought to join the defendant in the proceeding against X in which the claim was widened to include EP 2,295,299B1 the additional time saving would have been minimal.

Tuesday, April 19, 2016

Upcoming Patent Damages Event in Minneapolis

On Tuesday, April 26, the University of Minnesota Law School will be hosting its Fifth Annual Patent Symposium, cosponsored by Briggs and Morgan P.A., from 8:30 a.m.-1:00 p.m.  This year's topic is "Keeping Up With Patent Remedies:  What You Need to Know About Injunctions and Damages in Patent Infringement Cases."  I'll be leading things off with an overview of injunctions and damages; topics to be covered will include, among others, the pending Supreme Court cases on attorneys' fees and design patent damages.  More information is available here and here.  The event is free, so if you're in the Twin Cities area next Tuesday, please stop by.