Friday, July 31, 2020

The Second Edition of "Remedies in U.S. Patent Law: An Open-Source Casebook" Is Now Available

I am pleased to announce that LawCarta has published the second edition of my casebook, Remedies in U.S. Patent Law:  An Open-Source Casebook.  You can download a copy for free, or buy a hard copy for $22.50.  Here is a link, and here is the book description:
Remedies in U.S. Patent Law:  An Open-Source Casebook is a free, 'open' textbook designed for a one or two-credit course in U.S. patent remedies.  The casebook covers the law of permanent and preliminary injunctions, damages, and declaratory judgments. Thomas Cotter has used these materials for courses on patent remedies that he has taught at the University of Minnesota and the University of Iowa. Instructors may request access to the teacher's manual by emailing cotte034@umn.edu and creating a LawCarta account.  Model syllabi, upon request.
There is also a short teacher's manual available to instructors.

Wednesday, July 29, 2020

More FRAND News

1.  Enrico Bonadio and Luke McDonagh published a post on the Kluwer Patent Blog titled Another CJEU ruling on standard-essential patents and FRAND looks inevitable.  The post discusses, among other things, the German Federal Cartel Office's filing of an amicus brief requesting the Mannheim District Court to refer certain questions relating to SEPs to the Court of Justice for the European Union--among them, whether owners of FRAND-committed SEPs have a duty to license to any entity within the supply chain.  For previous discussion of this issue on this blog, see here, here, here and here.

2.  Also discussing the license-to-all versus access-to-all issue is a post on IPKat titled Academic spotlight (II):  Borghetti, Nikolic and Petit on FRAND licensing levels, which discusses, and takes issue with some of the conclusions, in a paper previously mentioned here.    IPKat also has an interesting post titled Academic spotlight (I):  Sterzi, Rameshkoumar and Van der Pol on NPE Activity, which discusses this recent paper on NPE activity in Europe.

3.  Via the Munich IP Dispute Resolution Forum, Professor Peter Picht hosted expert panels on Sisvel v. Haier (previously discussed here), part 1 featuring Judge Thomas Kühnen, and part 2 three German patent litigators.  Here is the link; the videos are in German. 

4.  On Law360, Bonnie Enslinger published an article titled TCL Seeks To Stay UK Suit In Philips Phone Patent Battle.  The article discusses a hearing earlier this week before the Patents Court for England and Wales, regarding whether the court should stay an upcoming infringement trial between SEP owner Philips and TCL in deference to a pending French action on whether Philips offered TCL a FRAND-compliant license.  

Monday, July 27, 2020

Rathod on Interim Injunctions in India

Sandeep Rathod has published a short but informative paper titled Interim Injunctions and Working of Patents:  A Short Note from India, 16 J. Generic Meds. 72 (2020).  Here is a link to the paper (behind a paywall), and here is the abstract:
The article looks at how jurisprudence has evolved in Indian courts on granting or refusing injunctions to patentees, especially when such patentees are not working/commercially using their patented product in India. The author also presents his views on the recent Eisai v. Dr Reddys case. 
The paper discusses, among other cases, Bayer Intellectual Property GmbH v. Ajanta Pharma Ltd. and Bayer v. BDR (previously noted on this blog here, here, and here), and the November 2019 decision of Delhi High Court in Merck Sharp & Dohme Co. v. Gupta, CS(COMM) 823/2018 (Delhi High Ct. Nov. 18, 2019), which granted an interim injunction against the domestic manufacture for export of an anti-diabetes drug.  I found this particular decision of interest in connection with a paper I'm writing on extraterritorial damages, because the court specifically rejected the argument granting the injunction amounted to the extraterritorial application of Indian patent law.

Thursday, July 23, 2020

Thursday Miscellany: Attorneys' Fees, FRAND, License-to-All versus Access-to-All

1. On Law360, Lionel Lavenue, Amanda Stephenson, R. Benjamin Cassidy, and Brooke Willner published an article titled Evolving Case Law Elucidates Atty Fees for Patent Litigants.  The article discusses some recent case law addressing who counts as a "prevailing party" under Patent Act section 285, and exactly when a court has jurisdiction to award fees (e.g., if the plaintiff has voluntarily dismissed its claims).  Definitely worth a read.  For previous discussion on this blog, see, e.g., here.

2.  Also on Law360, Dani Kass published an article titled 3 Takeaways from Landmark German FRAND Decision.  The article discusses the BGH's recent decision in Sisvel v. Haier, and states that the three takeaways are that "licensees must play ball," "different isn't discriminatory," and "patent owners decide the scope."  For previous discussion of the case on this blog, see here.

3.  Also of possible interest is a paper by Anne-Layne Farrar and Richard J. Stark, titled License to All or Access to All?  A Law and Economics Assessment of Standard Development Organizations' Licensing Rules,  Geo. Wash. L. Rev. ___ (forthcoming).  Here is a link, and here is the abstract:
In the continuing debate over licensing standard essential patents (SEPs) with FRAND commitments (to license on fair, reasonable, and non-discriminatory terms and conditions), one of the most heated topics is whether FRAND commitments should be interpreted to require licensing all comers, or whether access to standards can be achieved through other, less rigid means. This article evaluates both the legal and the economic arguments underlying this debate. This article concludes that neither the law nor economic welfare justifies a “license to all” interpretation of FRAND commitments. To the contrary, such a regime is not supported by patent, contract or antitrust law, and likely would be harmful to social welfare.
For previous discussion of this issue on this blog, including a link to an analysis I published on Law360, see here, here and here.

Monday, July 20, 2020

New Book on Enforcement of IP Rights in Africa

As noted recently on the Afro-IP Blog, Oxford University Press has recently published a new book Marius Schneider and Vanessa Ferguson, titled Enforcement of Intellectual Property Rights in Africa.  Here is a link to the OUP webpage, and here is a link to the Amazon webpage.  Here is the book description:
Africa is rising: with double-digit growth figures in many countries, its growing middle and upper class, the continent represents an untapped, dynamic, fast-moving and competitive market that businesses can scarcely ignore. Intellectual property right owners are increasingly paying attention to this new African dynamic and have started to invest into African markets. Unfortunately, so have counterfeiters. Taking action against counterfeit and pirated products in Africa is a challenge against which right holders and their representatives often feel overwhelmed.
Filling a gap in the market, this is the only book providing a detailed overview of the law and practice in relation to intellectual property rights enforcement in all 54 African countries and through the two main regional intellectual property organisations, the OAPI and the ARIPO. For the first time, a comprehensive manual on the conditions and procedures under which the civil and criminal courts, the police and customs take action with regard to counterfeit and pirated goods is available.
Arranged in a systematic manner, the reader will find for every jurisdiction information on the factual background, the organisation of the courts, the legal context, the judicial, civil and criminal enforcement of patents, trade marks and copyrights as well as information on the scope, requirements and practical application about customs recordals.
Counterfeiting and piracy constitutes a dire problem in Africa but as the book will show, solutions, often unknown and unexplored, do exist. With this publication, the authors aim at demystifying intellectual property rights enforcement in Africa by providing valuable information to right holders, judges, lawyers and law enforcement officials.
Cover for 

Enforcement of Intellectual Property Rights in Africa

Friday, July 17, 2020

Cook on Violence and Economic Activity

This is not directly related to patent remedies, but I thought it might be of interest to readers.  Professor Lisa Cook's article Violence and Economic Activity:  Evidence from African American Patents, 1870-1940, has received some well-deserved attention recently (see, e.g., here and here).  For readers who would like to read her paper, here is the link to the article as published in the Journal of Economic Growth (for which you will need a subscription), and here is a link from Professor Cook's website (for which you don't).  Here is the abstract:
Recent studies have examined the effect of political conflict and domestic terrorism on economic and political outcomes. This paper uses the rise in mass violence between 1870 and 1940 as an historical experiment for determining the impact of ethnic and political violence on economic activity, namely patenting. I find that violent acts account for more than 1100 missing patents compared to 726 actual patents among African American inventors over this period. Valuable patents decline in response to major riots and segregation laws. Absence of the rule of law covaries with declines in patent productivity for white and black inventors, but this decline is significant only for African American inventors. Patenting responds positively to declines in violence. These findings imply that ethnic and political conflict may affect the level, direction, and quality of invention and economic growth over time.

Wednesday, July 15, 2020

Federal Circuit Reverses Pre-Suit Damages Award for Failure to Mark

Yesterday the Federal Circuit published its decision in Packet Intelligence LLC v. NetScout Systems, IncThe principal issue in the case is patent eligibility.  The majority (opinion authored by Judge Lourie, joined by Judge Hughes) affirms the district court's judgment that the claims in suit are valid, over a dissent by Judge Reyna.  All three judges agree on the other issues, affirming a judgment that the claims in suit are not invalid under section 102(f); that the patentee is not entitled to pre-suit damages, for failure to comply with the Patent Act's marking statute (35 U.S.C. § 287(a)); and affirming the damages awarded for post-suit infringement, as well as an enhancement of those damages and an ongoing royalty.  I'll focus on the marking issues.

As described in the majority opinion, "Packet Intelligence owns the ’725, ’751, and ’789 patents, which teach a method for monitoring packets exchanged over a computer network" (p.3).  The ’789 patent also recites apparatus claims, however, and the plaintiff asserted two of these claims, as well as method claims of the other two patents.  On the marking issue, the district court's jury instruction, in the panel's view, is at odds with a subsequent Federal Circuit decision I blogged about in late 2017 (see here).  Here is the panel's discussion, edited for conciseness (pp. 18-22):
. . . Before filing the instant suit, Packet Intelligence licensed the asserted patents to Exar, Cisco, and Huawei, which were alleged to have produced unmarked, patent-practicing products. The ’789 patent is subject to the marking requirement of 35 U.S.C. § 287(a), and the availability of pre-suit damages for the ’789 patent hinges on whether Exar’s MeterFlow product was appropriately marked. . . .
When the district court charged the jury in this case, this court had not yet ruled on which party bears the burden of proving compliance with the marking statute. After the verdict, we held that an alleged infringer “bears an initial burden of production to articulate the products it believes are unmarked ‘patented articles’ subject to [the marking requirement]” in Arctic Cat Inc. v. Bombardier Recreational Prods. Inc., 876 F.3d 1350, 1368 (Fed. Cir. 2017). We held that the initial burden was a “low bar” and that the alleged infringer needed only to put the patentee on notice that certain licensees sold specific unmarked products that the alleged infringer believes practice the patent. Id. The burden then fell on the patentee to prove that the identified products do not practice the patent-at-issue. Id.
Here, the district court’s jury instruction is in tension with the later decision in Arctic Cat, as it appears to place the burden on NetScout to show that the Exar, Huawei, and Cisco products practice the ’789 patent . . . .
NetScout argues that Packet Intelligence is not entitled to pre-suit damages for the ’789 patent because it failed to prove that MeterFlow, an unmarked product, did not practice the ’789 patent. Specifically, NetScout faults the court for relying on Mr. Dietz’s testimony because he testified about MeterWorks, not MeterFlow, and because he did not testify that the MeterFlow product did not practice the patent.
In response to NetScout’s argument, Packet Intelligence appears to argue that NetScout bears the burden of establishing that the MeterFlow products practiced any claims of the ’789 patent because it failed to object to the district court’s jury instruction or seek a new trial based on Arctic Cat.
As a preliminary matter, we disagree that the failure to object decides this matter. . . .
Under the standard articulated in Arctic Cat, NetScout bore the preliminary burden of identifying unmarked products that it believed practice the ’789 patent. It is undisputed that NetScout adequately identified Exar’s MeterFlow product. Packet Intelligence then bore the burden of proving that MeterFlow did not practice at least one claim of the ’789 patent. . . .  
Packet Intelligence submits that it met its burden in two ways: (1) by showing that the MeterFlow product was mentioned in a provisional application that the ’789 patent claims priority from and that the inventors removed that reference before filing non-provisional applications, and (2) with testimony from Mr. Dietz, a named inventor, who stated that MeterWorks, a different product, did not embody his invention. This evidence is, however, insufficient to carry Packet Intelligence’s burden of proving that the MeterFlow product does not practice the ’789 patent. The fact that the inventors chose to cease referencing MeterFlow in later patent applications does not support the inference that MeterFlow does not practice the patent. Mr. Dietz testified that the reference to MeterFlow was removed because MeterFlow was software that “evolved,” and using the term would have suggested that past versions of the software using the “marketing term” MeterFlow “were the current version.” . . . Crediting Mr. Dietz’s testimony, it appears that the exclusion of MeterFlow was to prevent “confusion” about an evolving product . . . not to comment on whether MeterFlow practiced the ’789 patent.
Packet Intelligence also relies on Mr. Dietz’s testimony that MeterWorks did not embody the invention. But Mr. Dietz was not qualified as an expert in this case and did not provide an infringement opinion regarding the MeterFlow product. Mr. Dietz testified to the ultimate question of noninfringement about a different Exar product, MeterWorks. Even if Mr. Dietz had testified about the correct product and was permitted to offer an expert opinion on whether MeterFlow practiced the asserted claims, his conclusory testimony failed to address what claim limitations were purportedly missing from the product and would have been insufficient to carry Packet Intelligence’s burden of proving that MeterFlow did not practice the ’789 patent. . . .
Alternatively, the plaintiff argued that pre-suit damages were available for infringement of the method claims of the other two patents.  (When a patentee asserts one patent's apparatus claims and another patent's method claims, and fails to mark its own patent-practicing products, it can recover damages for the infringement of the product patent only from the date on which it puts the infringer on actual notice; but it can recover damages for the infringement of the process patent from the date the infringement began.  See ActiveVideo  Networks, Inc. v. Verizon Comm’ns, Inc., 694 F.3d 1312, 1333-35 (Fed. Cir. 2012).).  But that argument doesn't work here either, on the facts:
    . .  . Packet Intelligence cannot simply count sales of the software accused of infringing the ’789 patent as sales of the method claimed in the ’725 and ’751 patents. Instead, Packet Intelligence was required to produce evidence that the claimed method was actually used and hence infringed. Packet Intelligence advanced a theory that NetScout’s internal testing, customer support, and customer training was pre-suit activity infringing the method patents and thus supporting damages. But there is no evidence supporting damages caused by or resulting from these pre-suit activities. Mr. Bergman, Packet Intelligence’s damages expert, applied a calculated reasonable royalty to revenue from NetScout’s sales of the GeoBlade and GeoProbe G10 products—occurring both before and after the suit was filed. The damages base was not tailored to any alleged internal use of the claimed methods (p.24).
The amount of post-suit damages ($2.25 million) and the royalty rate for the ongoing royalty (1.55%) are, apparently, uncontested.  The panel affirms the award of enhanced damages in the amount of $2.8 million, which (I think) were based on post-suit conduct only.  See the district court's opinion on enhancement, pp. 3, 11-12 (which, however, explicitly refers to only to the ’725 patent at these pages).

For the record, as I have stated on several previous occasions (see, e.g., here), I think that the way the U.S. patent marking requirement works is unduly formalistic and leads to results that make little if any policy sense.  I would abolish the whole thing, if it were up to me.

Monday, July 13, 2020

OxFirst Webinar on License-to-All versus Access-to-All

OxFirst will be putting on a free webinar, organized by the ICom Institute for Competitiveness, on Wednesday, July 15, from 16:00-17:30 British Standard Time (that's 11:00 a.m.-12:30 p.m. Eastern Standard Time).  The title is "Standardisation and Access in Digital and 5G Markets."  Here is OxFirst's description: 
The event will address one of the most crucial questions in the 5G ecosystem: under FRAND commitments and EU competition law, can players claim licensing rights at each level in the industry value chain? Or, instead, licensing at FRAND conditions can be circumscribed within the standardisation process to a specific implementing level?
Standardisation is a crucial pillar also for telecom markets, especially within the 5G ecosystem, which is based on innovative patented technologies as well as on unprecedented intense interactions among all the stakeholders involved in its extended value chain. FRAND arrangements for standard essential patents seek to represent a balanced competition safeguard, working both at horizontal level within the Standard Setting Organisations, and at the vertical level between patent holders and licensees. It aims therefore to balance incentives to invest in complementary technologies, engagement in efficient standardisation process and effective access to the standard.
Speakers will include Stefano da Empoli, Antonio Nicita, Roya Ghafele, Damien Geradin, Bowman Heiden, and Igor Nikolic.  A slightly more detailed description, as well as a link to the agenda, can be found on ICom's website here.  Registration is available here.
For previous discussion on this blog of the license-to-all versus access-to-all issue, see here and here.  For another recent paper touching on this and related issues, see John "Jay" Jurata, Jr. & Emily N. Luken, Glory Days: Do the Anticompetitive Risks of Standards-Essential Patent Pools Outweigh Their Procompetitive Benefits?, 58 San Diego L. Rev. __ (forthcoming 2021), available on ssrn here.

Friday, July 10, 2020

A couple of thoughts on Sisvel v. Haier

I don't have very much to add, at this point, to Peter Picht and Erik Habich's excellent analysis of the German Federal Supreme Court's decision in Sisvel v. Haier, which I recommend (see previous post here).  I'll note just two things that I thought were of particular interest.

First, as Picht and Haber point out, the decision puts a great deal of emphasis on whether, at step two of the Huawei v. ZTE framework, the implementer has adequately expressed its willingness to conclude a license on FRAND terms--to the extent of actually disagreeing, at one point, with the lower court's analysis of the evidence (see decision para. 95).  Presumably, then, in future cases much will depend on how well (or how poorly) the implementer can document its efforts to negotiate in good faith.  See, e.g., para. 83 (stating, in the Arnold Ruess translation of the decision, that "the infringer . . . must clearly and unequivocally declare his willingness to conclude a licence agreement with the patent proprietor on reasonable and non-discriminatory terms and must also subsequently participate in the licence agreement negotiations in a target oriented manner"). 

Second, although the court notes the difficulty, in the SEP/FRAND context, faced by implementers in discovering and clearing all relevant patents in advance of launching a product--and cites this as one reason for the competition-law defense to make it more difficult for patent owners to obtain injunctions than in other types of patent cases (see para. 74 of the decision)--the court doesn't see this difficulty as a reason for departing from the traditional German rule that allows courts to award damages based on the assumption that a defendant who launches a product without clearing the relevant patent rights first is, in general, negligent (see para. 109).  The court therefore clears the way for owners of FRAND-committed SEPs to recover damages against infringers under any of the three methods available in Germany (lost profits, reasonable royalty, or defendant's profits), though it notes that if the defendant's competition-law counterclaim succeeds, the damages would be to some extent offset and the plaintiff would only recover the value of a FRAND royalty (paras. 110-12).  I'm not sure this rule is economically sound, particularly in the FRAND context, where the nature of the commitment is such that the plaintiff should expect to recover only a FRAND royalty.  I realize, of course, that if the reason the competition-law defense doesn't apply is that the implementer has been negotiating in bad faith, some remedy above the value of the FRAND royalty may be necessary for deterrence purposes (and enhanced damages, as such, are not an option in Germany); though one would think the injunction itself would have much the same function, as Dan Burk has pointed out (though maybe not in a case like Sisvel v. Haier, where the patent in suit expired before the appeals had all run their course).  I also recall that one of the Supreme Court judges on the Sisvel panel, Dr. Meier-Beck, has previously written that in his view the damages awarded under any of the three methods should, in principle, converge (a point with which I disagree); see previous discussion here

For discussion elsewhere of the damages courts may award in FRAND cases, see this chapter from Patent Remedies for Complex Products.          

Wednesday, July 8, 2020

IPKat Post on Sisvel v. Haier

In early May I noted reports that the German Federal Supreme Court had decided an important FRAND case, Sisvel v. Haier, but that the court's written decision was not available yet.  It now is, in the original German here, and by way of the IPKat Blog in an English-language translation provided by the Arnold Ruess firm here.  And here is a link to the IPKat post published yesterday by Léon Dijkman, providing an analysis of the decision by Peter Picht and Erik Habich.  I will read through the decision myself and may have more to say about it in due time.