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Archive for the ‘Patent Enforcement Errors’ Category

Patent Litigation in Good Faith

On July 29, 2001, the Court of Appeals for the Federal Circuit issued an important decision regarding patent litigation: Eon-Net LP v. Flagstar Bancorp (Fed. Cir. 2011).  Eon-Net is a patent holding company that primarily earnings as revenue through litigation and licensing fees, rather than developing manufacturing or marketing (also known as a patent troll).   The court awarded Flagstar $489,150.48 in attorney fees and costs and $141,984.70 in sanctions against Eon-Net.  Slip  Op. at 3.  In view of this opinion, patent owners may be wondering how to enforce and license their valid patent rights without incurring liability like Eon-Net.

The court imposed sanctions under 35 U.S.C. 285, which allows sanctions to punish exceptional cases of misconduct.  Specifically, the court found that Eon-Net violated Rule 11 of the Federal Rules of Civil Procedure because “(1) the patentee brought the litigation in bad faith; and (2) the litigation is objectively baseless.”  Slip Op. at 17.

The district court noted that Eon-Net’s behavior had an “indicia of extortion”.  Slip Op. at 22.  After evaluating Eon-Net’s behavior, the court noted that Eon-Net filed over 100 lawsuits, immediately followed by offers to settle at a price far lower than the cost to defend the litigation. Slip Op. at 22.  Settlements were offered at between $25,000-$75,000 based on the annual sales of the defendant.  Slip  Op. at 22-23.  Because these settlement offers were far lower than the cost of defending a patent litigation, the great majority of defendants chose to settle.

Furthermore, the court noted that EonNet failed to engage the claim construction process in good faith because Eon-Net destroyed relevant and important documents, attempted to evade a careful analysis of the claim terms in litigation, failed to offer a construction for any disputed claim terms, lodged incomplete and  misleading extrinsic evidence with the court, and submitted declarations that contradicted earlier deposition testimony by the declarants. Slip Op. at 18-19.

The court acknowledged that patentees should be able to fit be able to defend and profit from their intellectual property.  However, the court noted that this was not a case where the claims present a close call; rather, the specification unequivocally compels the claim constructions adopted by the district court.  Slip Op. at 15-16.

Before engaging in litigation, a patentee should have a valid argument that the opposing party is infringing its patent.  The infringement argument should be based on a good-faith interpretation of the claims.  If you believe your intellectual property rights are being violated, contact us if you need a patent attorney in Los Angeles to evaluate your case. Your patent attorney has the expertise to help you determine the scope of your intellectual property rights.

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Somebody is copying my patented invention. What do I do?

Patent infringement is a complex factual and legal issue.  If you believe someone is infringing your invention, the best course of action will depend on your specific situation.  Therefore, it is best to seek the advice of an experienced patent attorney.   However, you can collect information to help your lawyer understand the situation quickly and efficiently.  This information includes:

                Your U.S. Patent serial number

                Information about the infringing product, such as documentation, photographs, samples, country of manufacture, and when the infringement began

                Information you have on the potential infringer

                Any correspondence you have had with the potential infringer regarding the issue, including dates

                Whether you have marked any products with your patent number

                How you have been affected by the infringing activities

This information will help your IP attorney determine the next step, which may include a cease and desist letter, a demand for royalties, negotiation proceedings, and/or filing a complaint to initiate a lawsuit.  If you are looking for a patent attorney in the Los Angeles area, feel free to inquire about your case.

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Mirror Worlds LLC wins jury trial against Apple Inc.

On October 1st, 2010, a jury awarded Mirror Worlds LLC $625.5 million in a patent infringement lawsuit against Apple Inc. over three patents. The three patents at issue include the prominent “Cover Flow” feature in Apple’s iPod, iPhone and Mac operating systems. Mirror Worlds is a small technology company founded by Professor David Gelernter of Yale University. The Mirror World patents are directed to the display of documents on a computer screen.

Mirror Worlds LLC v. Apple Inc. highlights the importance of protecting intellectual property, especially in small companies. A comprehensive patent portfolio brings value to emerging technology companies. In the United States, inventors lose the right to obtain a patent if an application is filed more than a year after first public disclosure of the claimed technology. To obtain international protection in most other countries, a patent application must be filed before any public disclosure. It is important to develop a strategy early in order to retain your intellectual property rights.

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