• IP BLAWG

    Sexing for Bovines

    Beverly A. Berneman
    6/16/20

    Sex predicting technology for bovines is an extremely lucrative business. The revenues are $200 million industry worldwide with about $50 million of that in the USA.

    Inguran, Inc. d/b/a Sexing Technologies owns patents that sort bovine semen as it is prepared for artificial insemination. This helps breeders control how many bulls and how many cows will be born. Obviously, the technology is very valuable in the dairy industry and in the cattle breeding business.

    ABS Global Inc. filed an antitrust suit against Sexing Technologies. ABS alleged that Sexing Technologies used anti-competitive contracts and acquired about 60 patents in order to corner the market on sexed bovine semen.

    Sexing Technologies filed a counterclaim against Sexing Technologies for infringing on about 6 patents.

    The matter went to trial in 2016. The jury returned a mixed verdict finding that Sexing Technologies did improperly corner the market but that ABS was not entitled to damages because it didn’t prove anti-competitive harm. The jury found in Sexing Technologies’ favor on the counterclaim and awarded it $2 million. 

    The decision was appealed. The Seventh Circuit Court of Appeals reversed the decision. The Seventh Circuit found the jury verdict “somewhat puzzling” and contradictory. The verdict had invalidated a claim that was dependent on a validated claim. So the Seventh Circuit remanded the matter back to the trial court for a new trial.

    At the conclusion of the new trial, the jury found in Sexing Technologies’ favor again and also found that two other patents were infringed. The jury added another $8.5 million to the original judgment raising the total award to Sexing Technologies to almost $11 million.

    WHY YOU SHOULD KNOW THIS.  Patent infringement litigation can be long, arduous and expensive. Sometimes, there are rewards at the end. Sometimes there aren’t. The outcome of patent litigation is not as easy to predict as breeding livestock with sexed bovine semen. ABS took a huge risk when it pursued antitrust litigation. Patents, by their nature, are anti-competitive. A patent gives the owner a monopoly on the use of the invention for 20 years. The owner can use the invention pretty much any way they want during the life of a patent. That doesn’t mean that a patent forecloses antitrust litigation. It just means that the anti-completive activity has to be more than practicing the patent.

  • IP BLAWG

    Back Off Mr. Postman

    Beverly A. Berneman
    6/18/19

    Return Mail, Inc. obtained a patent for a computerized system of bar coding so that companies can track returned and undelivered mail. The U.S. Postal Service was interested in licensing the technology. Before they could ink a licensing agreement, the Postal Service walked away and developed its own system. And that’s when the litigation began.

    The Postal Service tried to invalidate Return Mail’s patent before the Patent Trial and Appeal Board. The Board held that the patent was valid. Return Mail sued the Postal Service under the Federal Claims Act for using a patented process without a license. Using a proceeding that was created by the America Invents Act (“AIA”), the Postal Service got a ruling that invalidated the patent. Return Mail appealed. The case landed before the U.S. Supreme Court. Justice Sonya Sotomayor, writing for the 6 to 3 majority stated that the AIA proceeding is only available to a “person”. Governmental units such as the Postal Service were not included in the definition of a “person” under AIA. So the Postal Service can’t use the AIA to invalidate the patent.

    WHY YOU SHOULD KNOW THIS. When faced with any dispute, don’t assume anything. In this case, Return Mail, Inc. questioned whether the Postal Service had standing to challenge its patent. Following the 11th Commandment, “Thou shall not assume”, Return Mail, Inc. won the day.

  • IP BLAWG

    Patent Turf Wars

    Beverly A. Berneman
    7/3/18

    The Patent Office can invalidate a patent even if a court did not. Oils States Energy LLC won a patent infringement judgment against Green Energy Group LLC. But then, the Patent Trial and Appeal Board (“PTAB”) invalidated the patent leaving Oil States emptyhanded. Oil States appealed arguing that the PTAB, an Article III (of the US Constitution) administrative tribunal, couldn’t come out differently from an Article I court. The US Supreme Court decided against Oil States. SCOTUS held that patents are a “public right”. They are a public franchise granted by the government to the owner of the patent for a period of 20 years. So, the administrative body can determine patent validity without paying homage to a different decision by a federal court.

    WHY YOU SHOULD KNOW THIS. This decision addresses the fundamental nature of a patent. Patents are different from other types of Intellectual Property. You own a copyright the minute you fix your work in a tangible means of expression. You own your trade secret as long as it’s not generally known and you take reasonable measures to keep it secret. You own a trademark as long as you use it as a source or product identifier. But a patent isn’t a patent until the US Patent Office issues the patent. So, you can win a patent infringement judgment in court and still have your patent invalidated by the PTAB.

  • IP BLAWG

    Will Assign Doesn’t Mean Did Assign

    Beverly A. Berneman
    4/24/18

    Agreeing to assign a patent in the future isn’t an assignment at all. Three co-inventors of a patent were employed by Company A. The co-inventors signed an employment agreement stating they “will assign” their rights to any patentable invention they created during their employment. Company A transferred its assets to Company B. Only two of the inventors assigned their patent rights to Company B. Based upon the employment agreement between the original company and the third inventor, the USPTO allowed Company B to prosecute the patent without the third inventor actually assigning the patent. Company B dissolved and its assets were transferred to Advanced Video Techs, LLC. Advanced Video then brought a patent infringement suit against HTC Corp. The district court dismissed the case holding that Advanced Video didn’t have standing to bring a patent infringement suit without joining the non-assigning inventor in the suit. On appeal, the Federal Circuit Court of Appeals affirmed the decision that Advanced Video didn’t have standing. The Federal Circuit reasoned that the agreement to assign something in the future, is not an assignment. The third co-inventor only promised to assign a future patent so she still had part ownership of the patent and had to be a party to the infringement suit.

    WHY YOU SHOULD KNOW THIS. Inventors hold the rights to a patentable invention until those rights are assigned. Over the years, employment agreements contemplated that employee-inventors would always be innovating and there’s no way to anticipate which inventions will be patented. So a lot of employment agreements have the employee agree to assign inventions to the employer in the future. According to this decision, just having an agreement to assign something in the future, isn’t a present assignment. So what’s an employer to do? A two prong approach may be required. First, instead of a future assignment, have the employee make a present assignment of all Intellectual Property rights. Second, decide at what point in the research and development process, the employee will assign his or her patent in a particular invention and then follow through with it. One thing that the decision didn’t seem to address is whether the employer would have a cause of action against the employee who breached the employment agreement by failing to assign the patent as agreed.

  • IP BLAWG

    Danish Enzyme Bites Chinese Dragon

    Beverly A. Berneman
    3/7/17

    The conventional wisdom is that in a foreign company v. Chinese company patent suit, the Chinese company will always win. Maybe not. Danish company, Novozymes, had patented an enzyme for use in bioenergy and beverages. Novozymes sued two Chinese companies, Shandong Longda Bio Products and Jiangsu Boli Bioproducts for patent infringement. Novozymes brought the case in China. After six years of litigation, the Supreme People’s Court entered judgment against the Chinese companies. Two things make this victory even sweeter. First, certain types of biotechnology are harder to support under Chinese patent rules than patent rules in the U.S. and Europe. Second, the Chinese government devotes significant resources to Chinese companies’ research and development in the area of biotechnology.

    WHY YOU SHOULD KNOW THIS. This result is not typical. That’s why it’s newsworthy. High tech innovation is always vulnerable to patent infringers who want to get there faster without the expense of research and development. Patent enforcement can be hard in foreign, and sometimes hostile, jurisdictions. For a company, patent enforcement problems can be a critical element when looking to expand into extraterritorial markets. If the Supreme People’s Court has started a trend towards protecting the patents of non-Chinese companies, new market expansion evaluations may change.

  • IP BLAWG

    Episode IV of Smartphone Wars: A New Hope

    Beverly A. Berneman
    12/13/16

    These are not the Apple damages that you are looking for. On December 6, 2016, a unanimous U.S. Supreme Court reversed a Federal Circuit ruling that Samsung had to pay Apple $399 million for infringing on Apple’s smartphone design patent for its interface. The judgment was calculated using Samsung’s profit on its entire phone and not just the profit related to the interface. At issue was how to interpret 120 year old design patent case. In the older case, the court held that a design patent infringer who applies any “article of manufacture” would be liable to the owner for its total profit. SCOTUS clarified this holding. In the case of a multicomponent product, the relevant “article of manufacture” for arriving at damages award, could be the end product. It could also be only a component of that product. SCOTUS refused to articulate a bright light test for determining whether the entire product or just the interface should be the basis for damages. The case has been remanded to determine the damages issue.

    WHY YOU SHOULD KNOW THIS. Samsung has had a dismal year considering that its fire hazard Galaxy 7 had to be taken off the market. This decision is a win for Samsung but with a lot of loose ends. Samsung will have to convince the trial court that the damages should be calculated by the component and not the whole product. Then Samsung will have to find valuation experts who can accurately trace the profits to just the interface. Certainly, Apple will find its own valuation experts to do the same analysis. Then it will come down to a battle of the experts. For any business facing an infringement suit, whether as plaintiff or defendant, the issue of damages can make or break the case. A party has to be clear about what is being valued. Then the party has to find a valuation expert who can give an opinion as to the object being valued.

  • IP BLAWG

    A Serious Dent in a Patent Pirate's Treasure

    Beverly A. Berneman
    6/28/16

    SCOTUS tells the Federal Circuit to back off of patent damages rules. Under the Patent Act, a court may increase the damages up to three times of a judgment. Last year, in two decisions, the Federal Circuit Court of Appeals imposed strict limits on the plaintiffs’ ability to get enhanced damages. The Federal Circuit required a plaintiff to show two things: (1) that there was a high likelihood that the infringer’s actions constituted infringement; (2) that the infringer knew the risk. Under this standard, any defense by an accused infringer that was not frivolous would get them off the hook. SCOTUS reversed the Federal Circuit recognizing that the Patent Act left enhanced damages to the discretion of the trial court. SCOTUS acknowledged that Federal Circuit’s test was trying to keep enhanced damages for egregious cases only. But the test was too rigid. Justice Roberts wrote: “[The] threshold requirement excludes from discretionary punishment many of the most culpable offenders, such as the “wanton and malicious pirate” who intentionally infringes another's patent—with no doubts about its validity or any notion of a defense—for no purpose other than to steal the patentee's business.” The two cases will go back to the trial courts to determine the availability of enhanced damages using a less rigid and more neutral test.

    WHY YOU SHOULD KNOW THIS. This decision demonstrates a tension between a trial court and an appellate court. The trial court hears the evidence and decides the facts while applying the laws. The appellate court is supposed to determine whether the court below decided the facts according to the law. In these cases, SCOTUS decided that the appellate court had overreached and encroached on something that should be left to the trial court. The Patent Act recognizes that in certain egregious situations, the willful infringer should pay not only actual damages but enhanced damages to punish the infringer and further compensate the plaintiff. The Federal Circuit’s rigid test wasn’t warranted by the Patent Act and interfered with the trial court’s ability to award enhanced damages.