Vermont was the first state in the country to sue an alleged “patent troll” for consumer protection violations.

Vermont’s case against MPHJ Technology Investments, LLC (MPHJ) is now over two years old and virtually nothing has been decided.  No discovery has been done; no documents have been produced; and no depositions have been taken.  But much time has been spent; much ink has been spilled; many, many briefs have been filed; and much money has been spent.  In the two years, only a jurisdictional battle has been fought:  whether the case involves MPHJ’s patent rights, and therefore is governed by federal law, and therefore belongs in federal court – as MPHJ contends.  Or – as the Attorney General contends – whether it is merely about state law, i.e., whether MPHJ’s sending of patent infringement “cease and desist”-type letters to many Vermont companies, which letters the Vermont Attorney General contends contained false statements, violates Vermont consumer protection law, regardless of whether MPHJ’s patents are valid and enforceable, such that the case belongs in state court.  This is stuff only a legal wonk could love.

While all this jurisdictional back-and-forth has played out over the last two years, involving two appeals to higher federal courts, MPHJ has recently “upped the ante,” so to speak, by filing a separate lawsuit against Attorney General Sorrell, claiming that Vermont’s efforts to stop or restrict MPHJ’s activities in Vermont infringe MPHJ’s federal civil rights.

Thus, there are now two legal cases involving the alleged "patent troll" MPHJ and the Vermont Attorney General pending in Vermont.  In the second case, federal Judge William Sessions just issued an important decision.

But before turning to that decision, some background.  In the original case, State of Vermont v. MPHJ, the Vermont Attorney General sued MPHJ in Vermont state court, claiming that MPHJ's activities in sending threatening "cease and desist"-type letters to Vermont companies violates Vermont's consumer protection law.  As noted above, all of the activity in that case so far has involved whether the case belongs in state or federal court.  MPHJ has twice tried to "remove" the case to federal court on the grounds that no matter how Attorney General Sorrell frames his Complaint, it is fundamentally about MPHJ’s federal patent rights.  Federal Judge Sessions has twice ruled against MPHJ and "remanded" the case back to state court, finding that the case is not about the validity of MPHJ’s patents per se, but only about its allegedly fraudulent activity in sending threatening letters to Vermont companies, which is a matter of state consumer protection law, not patent law, and, hence, there is no federal jurisdiction.  The first time Judge Sessions remanded the case, MPHJ appealed the remand order but it was affirmed by the federal appeals court, confirming that there was no issue of federal law and that the case belongs in state court where the Attorney General had filed it.  In its second attempt at removal, MPHJ argued that an amendment to the Attorney General’s Complaint invoked Vermont’s brand new anti-troll act, 9 V.S.A. § 4195 (effective July 1, 2013), which gave MPHJ a new basis for seeking federal jurisdiction.   The Attorney General responded that the Amended Complaint does not in fact invoke the anti-troll act and that the suit against MPHJ in no way relies on the anti-troll act but rather only upon pre-existing consumer protection law.  Judge Sessions agreed with the Attorney General, again sending the case back to state court.  MPHJ is now appealing that second remand order.

In the second case, MPHJ v. Sorrell, filed in federal court and also before Judge Sessions, MPHJ is the plaintiff.  MPHJ alleges that the State of Vermont is violating MPHJ’s federal civil rights by interfering (supposedly) with MPHJ’s rights to enforce its patents by sending its "cease and desist" letters into Vermont.  In the latest activity in that case, Judge Sessions has just thrown out most of the MPHJ’s Complaint.  See Opinion and Order dated June 3, 2015.  The only claim that Judge Sessions has allowed to proceed, for the time being at least, is MPHJ’s challenge to the constitutionality of the new anti-troll act.  Although MPHJ is not currently being sued under that act, Judge Sessions found that MPHJ’s fear of future prosecution under that act is justified because MPHJ: a) says that it does plan to continue its practice of sending “cease and desist” letters to suspected Vermont infringers, and b) can reasonably fear that that activity will be prosecuted under the anti-troll act.  Thus, MPHJ will be allowed to challenge the constitutionality of that act.

Thus, both of the Vermont lawsuits involving MPHJ and its alleged “patent trolling” activities will continue to grind away. 

There will surely be more to come.

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In a significant legal decision with a connection to Vermont’s farming community, the United States Court of Appeals for the Federal Circuit has affirmed that organic farmers cannot obtain a judicial declaration to prevent Monsanto from suing them in the future for violating its patents on seeds.  The Federal Circuit court is the court of appeal for all patent cases, below only the U.S. Supreme Court.  The court said that the farmers do not have “standing” to seek such a declaration against Monsanto because they are themselves in no danger of being sued by Monsanto for “inadvertent” infringement of Monsanto’s seed patents.

Monsanto owns a number of patents on transgenic crop seeds – seeds that are genetically engineered to survive the spraying of herbicides to control weeds in the crop fields.  Farmers who purchase Monsanto’s GMO seeds must agree not to harvest the seeds from the resulting adult crops and use the harvested seeds for planting without Monsanto’s permission.  In effect, when a farmer purchases Monsanto’s patented GMO seeds, he or she is agreeing to use the seeds – i.e., Monsanto’s patented technology – for one-time use.  Monsanto has a history of suing farmers who harvest and replant its seeds.  Because Monsanto owns the patents on the seeds, their use without Monsanto’s permission constitutes patent infringement.

A large group of organic farmers and anti-GMO organizations, including Chittenden County state senator David Zuckerman, who owns an organic farm in Hinesburg known as Full Moon Farm, Inc.,  Northeast Organic Farming Association of Vermont (NOFA), and Rural Vermont, filed suit in federal court in New York in March of 2011.  They sought what is known as a “declaratory judgment” – an anticipatory legal ruling that Monsanto’s GMO seed patents are invalid and that Monsanto should be barred from suing them if their crops are inadvertently pollinated by crops grown in nearby fields with Monsanto’s GMO seeds.  “Inadvertent” pollination can occur if, for example, corn plants grown in a field using non-Monsanto seeds are pollinated by corn pollen blown in on the wind from a nearby field of Monsanto corn.  The non-Monsanto corn plants that are inadvertently pollinated by Monsanto corn pollen then produce seeds that contain Monsanto’s GMO technology.

In deciding whether to grant a declaratory judgment, the question before the New York federal court was: were any of the organic farmer plaintiffs in actual danger of having to face a patent infringement lawsuit by Monsanto if their crops were inadvertently pollinated?  The court said no.  True, Monsanto has a history of suing farmers who use harvested Monsanto seeds for replanting.  In fact, as recently as May, the U.S. Supreme Court in a 9-0 decision sided with Monsanto against a farmer in Indiana. The Court held that Vernon Bowman’s harvesting and replantation of Monsanto soybeans was patent infringement against Monsanto.  In this case, however, Monsanto made public that it had no intention of suing organic farmers whose crops might be inadvertently pollinated by Monsanto corn.  In response to Monsanto’s statement, the plaintiffs demanded a blanket promise from Monsanto never to sue them.  The New York federal court concluded that, because the plaintiffs were not in any real danger of being sued by Monsanto, they had no legal standing to seek a declaratory judgment that Monsanto cannot sue them.

Indeed, the court stated that the plaintiffs’ demand for a blanket promise from Monsanto never to sue them was an attempt to create a legal controversy where none existed.  The court dismissed plaintiffs’ argument that they felt threatened by Monsanto’s refusal to give a blanket promise never to sue them.  The court characterized plaintiffs’ arguments as “baseless” and “groundless” and their tactics as “not to be tolerated” and “unacceptable.”  The court further stated that plaintiffs’ demand of a blanket promise from Monsanto “was clearly intended to be used as a prop in this litigation,” and a “transparent effort to create a controversy where none exists.”  The court therefore dismissed the lawsuit.  Not content, plaintiffs appealed to the Federal Circuit.

The Federal Circuit court affirmed the dismissal, agreeing with the lower court that the plaintiffs had no standing to ask for a declaratory ruling when they were in no real danger of being sued by Monsanto, although the Federal Circuit’s language was not as critical of the plaintiffs was as the lower court’s.  The Federal Circuit pointed out that the plaintiffs’ alleged fear of a lawsuit from Monsanto was “too speculative.”

So, was the lawsuit by the organic farmer-plaintiffs merely an effort to attract attention to their anti-GMO, anti-Monsanto cause?  If so, is that a proper use of the court system?

This blog was originally posted on The IP Stone by Walter Judge on June 25. Click here to see the original post. 

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Today, the United States Supreme Court unanimously ruled in Association for Molecular Pathology v. Myriad Genetics, Inc., No. 12-398, that a naturally-occurring DNA segment (or gene) is not patent eligible even if it has been isolated from a genome (reversing the Federal Circuit). The Court also ruled that cDNA (complementary DNA) is patent eligible because it is not naturally occurring (affirming the Federal Circuit). Justice Thomas wrote the opinion for the unanimous Court, and Justice Scalia wrote a short concurrence. We have been following this case for some time (see here, here, and here).

The Court began by restating its position that laws of nature, natural phenomena, and abstract ideas are not patentable subject matter under 35 U.S.C. § 101. The question for the Court was whether Myriad’s patents claimed any new and useful composition of matter.

To answer this question, the Court looked at what Myriad claimed. With respect to the DNA claims, Myriad claimed the DNA segment it found in nature, and it did not change or alter any of the genetic information in that segment. Because it claimed something naturally found in nature, it was not patent eligible subject matter.

With respect to the cDNA claims, the Court reached a different result. The cDNA is not found in nature, but is created in the laboratory. This key difference meant that it was patent eligible subject matter. The Court did not address whether these claims met the other requirements of the patent statute, such as §§ 102, 103, and 112.

The Court was also very clear on what it was not deciding in this case. There were no method claims at issue, such as an innovative method for manipulating genes. Similarly, there were no  claims directed to how this new knowledge might be applied to achieve some useful result. The Court suggested (without holding) that those types of claims would be patent eligible. Finally, it noted that the claims were not directed to naturally occurring genetic code that had been altered to create some new and not natural DNA. The Court refused to suggest how it might address claims like those.

In the end, the Court stated that “[w]e merely hold that genes and the information they encode are not patent eligible under § 101 simply because they have been isolated from the surrounding genetic material.”

This blog was originally posted by Robert Wagner on June 13 on the PIT IP Tech Blog, An Intellectual Property and Technology Law Blog from the Pittsburgh Law Firm of Picadio Sneath Miller & Norton, P.C. Click here to see the original post. 

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The Vermont House and Senate have approved a first-in-the-nation bill that provides a legal tool for Vermont companies who face extortionate claims of patent infringement from “patent trolls.”  In brief, the legislation gives Vermont companies the ability to bring a lawsuit against patent owners who – acting in bad faith — threaten to sue, or who actually sue a Vermont company.  Gov. Peter Shumlin signed the bill into law on May 22. The anti-patent trolling bill, as passed by the Vermont House and Senate, has the designation H.299.

The legislation was spearheaded by Vermont Rep. Paul Ralston, D-Middlebury, and Vermont Chamber of Commerce President Betsy Bishop in response to concerns raised by an informal coalition of Vermont companies. These companies, many of whom are my firm’s clients,  have been threatened and injured by extortionate claims of patent infringement asserted by patent trolls.  They have experienced anxiety, frustration and a deep sense of powerlessness after receiving a demand letter from a patent troll.  My colleague Eric Poehlmann and I were instrumental in developing the legal approach that is codified in the new legislation, and I testified three times before House and Senate committees that crafted the legislation.  For the first time, Vermont companies now have a tool to help level the playing field against patent trolls.

The new law allows Vermont companies to seek recovery of their legal fees, damages and other remedies if they can show that the patent troll acted in bad faith.  Whether a company asserting a claim of patent infringement is a “patent troll” or is making a legitimate effort to enforce a patent is notoriously difficult to determine.  Only “bad faith” assertions of patent infringement violate the new Vermont legislation.  The legislation requires a court to apply a multi-factor test to decide whether the patent infringement claim was made in “bad faith.”

The factors the court may look at as an indicator of bad faith include the following:

If the demand letter sent by the alleged patent troll does not include specific allegations of how the Vermont company’s technology infringes particular claims in the patent;
If the demand letter sent by the alleged patent troll demands that the Vermont company pay a license fee within an unreasonably short period of time;
If the demand letter sent by the alleged patent troll is deceptive;
If the alleged patent troll knew or should have known that the claim of patent infringement is meritless.

By contrast, several factors tend to show that the claim of patent infringement is legitimate, and therefore would not constitute a violation of the Vermont legislation:

If the alleged patent troll has made a good faith effort to establish whether the target of the claim has infringed the patent and has made an effort to negotiate an appropriate remedy;
If the alleged patent troll is the inventor or a university;
If the alleged patent troll has successfully enforced the patent against another company.

In addition to the right given to Vermont companies to sue the alleged patent troll, the legislation enables the Vermont Attorney General to bring a suit against an alleged patent troll.

The legislation is highly innovative, but does not undermine the rights of patent holders to threaten and bring legitimate claims of patent infringement.  The new law asks the court to make a determination of “bad faith” based on a range of factors.  The structure of the Vermont bill is similar to federal legislation aimed at cybersquatters, enacted in the federal Anti-Cybersquatting Consumer Protection Act. The Vermont legislation is also derived from a series of federal patent decisions that recognize that a defendant in a patent infringement lawsuit can assert a counterclaim under state law if the plaintiff (the patent owner) asserts a patent infringement claim in bad faith.

Accordingly, while we expect that a patent troll sued under the Vermont law may well try to defend by counter-claiming that the Vermont legislation is pre-empted by federal patent law, we believe that a proper claim of bad faith under this legislation will survive a pre-emption challenge.

The Vermont solution is certainly not the end of the effort to curb extortionate patent claims.  A complete solution can only be achieved through changes in federal patent law. Indeed, several proposals for changing federal patent law are under consideration.  In the meantime, this Vermont law will provide a valuable tool for Vermont companies confronted with an extortionate patent claim.

I look forward to our readers’ comments and questions about this legislation.

*This blog was originally posted on May 23 by Peter Kunin for The IP Stone. Click here for the original post. 
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An important federal appeals court has determined that a Connecticut court has jurisdiction over a Canadian citizen whose only act in Connecticut was accessing information on a computer server located in Connecticut.  In MacDermid, Inc. v. Deiter, 702 F.3d 72 (Dec. 26. 2012), a Connecticut-based company, MacDermid, Inc., sued its former employee, Deiter, a Canadian citizen who worked from Canada, in federal court in Connecticut for misappropriation of MacDermid’s trade secrets.  MacDermid alleged that Deiter sent confidential company information from her company email account to her personal email account.  The lower court dismissed the case, saying that Connecticut courts did not have jurisdiction over Deiter because she never set foot in Connecticut and only used a computer terminal in Canada.  MacDermid appealed.  The U.S. Court of Appeals for the Second Circuit, in New York, reversed, holding that it was proper for a Connecticut court to exercise personal jurisdiction over a Canadian employee of a Connecticut company because, even though she was located in Canada and physically interacted only with a computer in Canada, she “used” a server in Connecticut.


MacDermid is a chemical company located in Connecticut.  Dieter, a resident of Ontario, Canada, worked for MacDermid’s Canadian subsidiary.  The email system for both MacDermid and its Canadian subsidiary is located on a server in Waterbury, Connecticut.  Just before Dieter was about to be fired, she forwarded what MacDermid claims is confidential information from her MacDermid email account to her personal email account.  In doing so, Dieter accessed MacDermid’s email server in Connecticut, even though she did so while located in Canada and physically interacting only with her computer terminal in Canada (albeit a company computer).  MacDermid sued Dieter in Connecticut for trade secrets misappropriation, and Dieter moved to dismiss, arguing that Connecticut courts did not have jurisdiction over her, as she had never left Canada.  The issue was whether the Connecticut “long arm” statute gave Connecticut courts jurisdiction over someone outside of Connecticut, and whether such jurisdiction would be constitutional.  One section of the “long arm” statute gives Connecticut courts jurisdiction over someone who “uses a computer” or “a computer network” located in Connecticut.  Therefore, the issue became whether accessing email via a server located in Connecticut constituted “using” a Connecticut computer or network.


The lower court dismissed the case because it found that Dieter had not “used” a Connecticut computer or Connecticut computer network, but had only sent email from one computer in Canada to another computer in Canada.  The Second Circuit court disagreed.  It concluded that “using” a computer or network may involve more than just the act of physically interacting with a computer.  While Dieter had physically interacted only with her terminal in Canada, she had “used” MacDermid’s network in Connecticut by accessing it electronically when she sent an email from her company account to her personal account.  The Second Circuit pointed out that the “long arm” statute does not require that user be located in Connecticut, but only that the computer or network – i.e., the thing that is “used” – be located there.  In other words, the “long arm” statute extends to people who access Connecticut computers or networks remotely.

But, having determined that Connecticut’s “long arm” statute extended to Dieter, the Second Circuit still had to determine whether exercising jurisdiction over Dieter would be  constitutional.  It found that it was.  The court found that Dieter knew that, in using MacDermid’s email system, she was accessing a server in Connecticut.  Even though Dieter would have to travel from Ontario to Connecticut to defend herself in the lawsuit, that would not be an unreasonable burden on her.  Furthermore, according to the court, Connecticut has a significant interest in interpreting its misappropriation laws.  The Second Circuit concluded that it was proper for Dieter to be sued in Connecticut for the wrong she was alleged to have committed.


While this decision was based on Connecticut law, the Second Circuit federal appeals court covers New York, Connecticut, and Vermont.  Moreover, it is considered an important authority on commercial law.  So its analysis on personal jurisdiction could be persuasive in other courts.


The lesson here is that if you think you are safe from suit in a particular state in the U.S. just because you access a computer from the comfort of a faraway state – or even, as in this case, another country – you might be gravely mistaken.

Walter Judge is a litigation partner at Downs Rachlin Martin PLLC who blogs on intellectual property litigation topics
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On February 20, 2013, department stores  J.C. Penney Inc. and Macy’s Inc. faced off in a new arena – a New YorkState courtroom.  The two retailers are going to trial over Martha Stewart.  Macy’s suit accuses J.C. Penney of attempting to convince Martha Stewart to break her company’s exclusive merchandise contract with the department store chain – a contract Macy’s says gives them the exclusive rights to sell certain Martha Stewart products until 2018.  Part of Macy’s lawsuit reads: “J.C. Penney want[s] to rob Macy’s of market share and destroy the competitive advantage that it enjoys as a result of its existing exclusive agreement with (Martha Stewart Living).”

J.C. Penney argues that Macy’s rights to the Martha Stewart merchandise are not nearly as broad as Macy’s claims.  According to J.C. Penney: “Macy’s should stop competing in the courtroom and start competing in the marketplace.”

The move to market the Martha Stewart line is one of several initiatives by J.C. Penney to revive its struggling business.  As part of its new plan, J.C. Penney acquired a 16.6% stake in Martha Stewart’s company in December of 2011, subsequently announcing its plan to open up Martha Stewart ‘mini shops’ in most of its stores.  In response, Macy’s immediately sued J.C. Penney and was granted a preliminary injunction prevent the sale of the Martha Stewart goods at J.C. Penney while the trial played out.

A central issue of the case is whether or not the court agrees that the mini-shops fall under the exclusivity clause of the Macy’s/Stewart agreement.

Macy’s, J.C. Penney go to court over Martha Stewart

As originally posted on February 22 at

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On Friday, August 24, a nine member jury entered a verdict in favor of Apple and awarded almost $1.05 billion in damages.  Apple filed suit against one of its largest competitors, Samsung Electronics, in April 2011, and alleged that Samsung’s Galaxy line of smartphones and tablets infringed seven of Apple’s patents covering the iPhone and iPod products.  In turn, Samsung countersued alleging that Apple infringed Samsung’s patents covering various wireless software components of its products.  After more than a year of highly contentious litigation and following a trial that began at the end of July and lasted the better part of August, the jury deliberated for less than three days before delivering the verdict in favor of Apple. 

Prior to trial, Apple received a significant e-discovery victory when the court sanctioned Samsung for its failure to preserve emails after Samsung should have anticipated the lawsuit by Apple.  The court determined that Samsung had a duty to preserve evidence as of August 23, 2010, and while Samsung issued a litigation hold and provided instructions detailing how to save emails using its email system, Samsung failed to disable the auto-delete function of its email system, which automatically deleted all emails every two weeks in Samsung’s Korean offices.  The court ordered that, as part of the sanctions, the jury would be allowed to draw an adverse inference against Samsung and that the jury would be told to presume that relevant evidence was destroyed and that the lost evidence was favorable to Apple.  

The court also entered pretrial preliminary injunctions against Samsung barring the sale of the Galaxy Nexus phone and the Galaxy Tab 10.1 in the United States. Moreover, the court delivered various ruling for and against both parties on various in limine motions.  One ruling against Samsung appeared to be very significant: Samsung took issue with the court’s ruling that, because Samsung failed to disclose in time contentions that Samsung’s designs were in development before the iPhone, Samsung was precluded from using slides containing images of the Samsung designs.      

In opening statements and during trial, Apple set forth its theory that Samsung had ripped off the unique design features of the iPad and iPhone and infringed certain utility patents.  Apple focused on comparisons between Samsung’s phones from 2006 to its newer smartphones from 2010.  Also, Apple relied on internal documents from Samsung comparing Samsung’s products with the iPhone hardware.  On the other hand, Samsung maintained the position that Apple had no right to claim a monopoly on certain design features that were not revolutionary.  Samsung’s theory to demonstrate non-infringement was to get the jury to focus on the specific legal requirements relating to each of Apple’s patents.  Samsung also went on the offensive by attempting to prove that Apple’s products use certain Samsung features for mobile devices, such as the process for emailing photos and the technology relating to easily finding photos in an album.  Moreover, Samsung attempted to demonstrate that Apple’s patents were invalid due to developments in technology that existed before Apple claimed to have invented such technology.  The parties relied on various liability and damages experts to support their respective positions. 

During closing arguments, counsel for Apple argued that Samsung copied Apple’s designs after realizing that Samsung could no longer compete with Apple.  Samsung, in turn, argued that a verdict in favor of Apple would severely suppress competition and reduce consumer choices.  In the end, with more than 100 pages of legal instructions, the jury was able to complete a 20 page-long verdict form and return a verdict in less than three days.    
For the specific articles from which the information in this summary was obtained, please visit  

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Welcome one and all to something that will undoubtedly change both history and the world as we know it: the first installment of what will hopefully be a regular publication which we have decided to call From the “What the…?”File.  Basically, I’ll be picking up on out-of-the-mainstream stuff which any of us could have lived without knowing, but it will at least be stuff that is both interesting and has a bit of a twist.  At least in theory, anyway.  So, without further ado, here goes the collector’s item first issue.  I can confidentially say that that when you’re done, you too will be saying “What the…?”

European Copyright – The Write Stuff?

OK, not many of us care about Euro Copyright issues – I fully admit that.  But this is actually kind of interesting (even if it is Euro-centric).  It seems that way back in 2006, a Hollywood-funded, Netherlands-based anti-piracy group (known as ‘BREIN’, and please don’t ask me what it stands for) asked a musician to compose music for an anti-piracy video. The video in question was to be shown at a local film festival, and under these strict conditions the composer accepted the job.

However, the anti-piracy ad was recycled for various other purposes apparently without the composer’s permission. When the composer bought a Harry Potter DVD early 2007 (presumably a licensed one), he noticed that the campaign video with his music was on it. According to the composer And this was no isolated incident. He is now claiming that his work has been used on tens of millions of Dutch DVDs, without him receiving any compensation for it. The total claimed lost revenue is roughly a million Euros (which is about $1.3 mil US). 

But wait -- there’s more.  You’d think that the guy would have received some collection support from local rights societies.  You’d think.  But soon after he discovered the unauthorized distribution and after contacting a local music royalty collection agency not only did he not receive any royalties, one of their Board members offered to help ONLY if the composer assigned all his rights to the organization AND gave the guy a third of what was collected.   Ultimately the board member resigned and the anti-piracy group denied it was their fault in the first place.  But what’s more shocking – that anti-pirates are pirates themselves, or that there is corruption in the music industry? Hmmm – tough question.

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Mobile Wars: Apple v. Samsung

Posted on July 7, 2011 03:31 by Chad Godwin

Yesterday, Bloomberg reported that the legal rift between Apple, Inc. and Samsung Electronics Co. widened when Apple filed a complaint seeking to block imports of Samsung Galaxy S mobile phones and Galaxy Tab computers for alleged patent infringement.  Apple claims that Samsung is infringing on seven of its patents related to the technology and design of the devices.  Apple filed its first complaint against Samsung in April, but the current salvo is a counter to a similar complaint filed last week by Samsung, who sought to ban imports of Apple’s iPhone and iPad.  The ferocity of the legal battle between the two companies is surprising given the fact that Samsung supplies computer chips for some Apple devices.  Although Apple does not normally license its intellectual property, analyst Brian Marshall, with Gleacher & Co. in San Francisco, feels that they may have no choice in this case because Samsung owns a number of patents that Apple may need. 

Analysts are not surprised at Apple’s litigation strategy, as the company continues its effort to hold on to what once was a dominant market share in the mobile-device arena.  Android is now the most popular mobile-device operating system, with 38.1 percent of the market share, ahead of Apple’s iOS, which accounts for 26.6 percent of the market.  In a similar trend, Samsung secured 4,518 patents last year, while Apple secured just 563.  The new civil case is currently pending in the U.S. District Court for the Northern District of California and although Apple requested a quick trial, Samsung countered by claiming that Apple is “attempting to create an emergency where none exists.” Given the fierce competition in the mobile-based market and the rise of tablet-style devices from manufacturers such as Samsung and BlackBerry, the litigation associated with the intellectual property behind such devices is likely to increase.

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House Passes Patent Reform Bill

Posted on June 27, 2011 04:14 by Stephen J. Lieb

On June 23, the House passed patent reform legislation that may significantly change the patent system in the United States.  By a vote of 304-117, the House passed the America Invents Act (H.R. 2149).  In March, the Senate passed its version of the bill. (S. 23)  Differences between the House and the Senate versions now need to be worked out before a final version can be sent to the White House.  President Obama has expressed support for the bill. 

Assuming the legislation is ultimately enacted close to its present form, it will change the patent system in the United States from “first to invent” to “first inventor to file.”  Currently, an inventor that can prove he or she was the first person to conceive of an invention and reduce it to practice is entitled to a patent, even if another person files an application for a patent to that invention first.  Disputes about priority of invention are now typically resolved by an interference proceeding in the Patent Office.  The legislation would do away with interference proceeding.  Instead, the first party to get its application on file is the one entitled to the invention regardless who was the first to invent.  This change harmonizes patent practice in the U.S. with most other countries.

Among other things the legislation also adds a post-grant review procedure, modifies judicial review of inter partes reexaminations, and adds a derivation proceeding where a party can challenge an earlier-filed patent application on the basis that the earlier-filed invention was derived from the party’s own work.

The House and Senate versions of the bill are very similar.  Perhaps the most significant issue to be worked out in conference is how fees collected by the PTO will be distributed.  Right now PTO fees go to the public fisc and the PTO’s budget is separately appropriated by Congress. By allowing the PTO to use the fees it collects, the Office will have more money available to hire examiners and speed the examination process.  Both versions of the bill provide a fund to hold the fees collected by the PTO for use in paying PTO operations expenses.  In the House version, in language added by a Manager’s Amendment, Congress must appropriate moneys from this fund to the PTO.  Under the Senate version, the PTO can use collected fees without prior appropriation but subject to congressional reporting and budgeting requirements.


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