Attorneys’ Fees for Patent Suit Winners? Supreme Court to Clarify the Law

Attorneys’ fees are generally not awarded to the winning party in a suit. However, under the patent statute1 a court may award reasonable attorney fees in “exceptional” cases. The Federal Circuit has addressed how to decide if a patent lawsuit is exceptional, and now the Supreme Court has decided to review that decision in Octane Fitness, LLC v. ICON Health & Fitness, Inc.2

The fact that the Supreme Court is continuing to guide the Federal Circuit is more important than eventual ruling itself. The Federal Circuit has ways of applying general federal civil procedure statutes to patent lawsuits in a manner different from application to general lawsuits.

For example, the Federal Circuit created a rule based on the declaratory judgment statute3. This rule clarified when an accused patent infringer could sue a patentee for a declaration of noninfringement without having to wait for the patentee to file an infringement suit first. The Supreme Court reversed the Federal Circuit decision. While the rule was useful and made sense, the rule did not have a firm basis in the statute it was supposed to interpret.

The Supreme Court has decided that in the absence of a reason to the contrary, the Federal Circuit should not interpret federal law differently for patent cases. This guidance should help make the Federal Circuit’s decision making process more consistent with that of other federal appeals courts and provide greater certainty in interpreting general civil procedure laws in patent cases.

1. 35 U.S.C. § 285 (2012)
2. 496 Fed. Appx. 57; 2012 U.S. App. LEXIS 22096; cert granted, 186 L. Ed. 2d 962, 2013 U.S. LEXIS 5133 (U.S. 2013)
3. 28 U.S.C. § 2201 (2012)

Losing Your Patent Rights – Now Easier than Ever

Inventor Unenlightened creates the ultimate in widget technology. She sells a prototype of this revolutionary device to finance its IP protection. This gadget is sure to net her company millions of dollars. Or it would have, if Inventor had not just lost all patent rights resulting from ignorance of the new patent law. The America Invents Act can also lead to the loss of your patent rights.

Sale of an invention before filing a patent application will generally bar the right to obtain a patent. Publication or other disclosure will affect rights in the United States and it will bar the right to obtain a patent in other countries.

From 1839 until March 2013, an inventor in the United States could sell or disclose an invention and have a grace period during which the inventor could still file for a patent application. This grace period is largely eliminated under the new patent law.

There are confusing exceptions to the new rules. The courts will take several years to interpret and unify their consistent application. It is a good idea to talk to your IP attorney about filing a patent application, whether provisional or non-provisional, prior to sale or disclosure of an invention.

Consult your IP attorney to protect your work before losing out like Inventor Unenlightened.

Apple Wins Injunction Against the Sale of Samsung’s Galaxy Nexus Phone

On Friday, June 29, 2012 the Federal District Court in San Jose granted a pretrial injunction prohibiting Samsung electronics from selling its new Galaxy Nexus phone. The judge ruled that Apple was likely to succeed in its patent infringement claim against Samsung’s S Voice digital assistant software. This is a major element in establishing exclusivity of Apple’s marquee feature, the “Siri” voice-automated virtual assistant. This patent relates to a key element in the implementation of “Siri.” Apple’s US Patent No. 8,086,604 describes a technique in which a phone’s computer processor searches multiple databases, and uses a heuristic function to determine relevant responses. Heuristic functions use real-life experience gained through trial and error rather than performing comparisons in a mechanical manner.

Grant of a pretrial injunction is a stunning victory for Apple. Pretrial injunctions against patent infringement are difficult to obtain, and the Supreme Court has made them even more difficult to obtain in recent years. Apple must post a $95.6 million bond to cover the possible losses of Samsung if Apple loses the lawsuit.

The week before this decision, Chicago federal court judge Richard Posner ruled that Apple could not pursue an injunction against Google’s Motorola Mobility. It is likely that the patent battles will continue at least until the technology becomes obsolete.

Supreme Court Allows Congress to Take Works Out of the Public Domain

It is now necessary to check copyright status of foreign origin works in order to avoid copyright infringement. Many works that were free to use are now back in copyright. In a January 18, 2012 decision1, the Supreme Court upheld a law, the URAA2, that takes many foreign origin works out of the public domain. The law restores copyrights in the United States on all works that were still in copyright in their countries of origin as of January 1, 1996. The law is the United States’ implementation of a section of a treaty3 that seeks to equalize international recognition of copyrights among 162 countries.

Classic movies that were formerly in the public domain include Metropolis (1927), Things to Come (1936) from the H.G. Wells novel, and The Third Man (1949). They are now back in copyright. The music of Igor Stravinsky which had formerly been in the public domain is now in copyright in the United States.

The Court, in effect, said that the Constitution gave Congress the right to do pretty much as it pleases with respect to copyright law. The petitioners, people and entities, had been using works that were in the public domain. The decision has left them with a situation in which they must abandon investments in enterprises which were perfectly legitimate expressions of First Amendment speech. The lower court had found that, “Congress could have complied with the Convention without interfering with Plaintiffs’ protected speech.” Many in the legal community feel that the Supreme Court allowed Congress to exceed its Constitutional authority. Apparently, ideology played no part in the result. The opinion was written by Ginsburg and joined in by Scalia. The dissent was written by Breyer and joined in by Alito.

Exercise caution. We do not yet know how intense the avalanche of copyright infringement suits will be.

1. Golan v. Holder, Case No. 10–545, January 18, 2012, 565 U.S. ___ (2012)

2. Uruguay Round Agreements Act (URAA), 17 U.S.C. 104A (1994), URAA §514

3. Berne Convention for the Protection of Literary and Artistic Works, September 9, 1886, as last revised at Paris on July 24, 1971, 1161 U.N.T.S. 30

 

For Non-IP Attorneys: Intellectual Property Assets in Businesses and Estates – a program by Continuum Law on January 9, 2012 in the San Diego County Law Library series

Monday, January 9, 2012 from 12:00 PM to 1:00 PM  Downtown at Esquire Solutions 402 West Broadway 16th Floor, Emerald Plaza San Diego Register http://mcleunappreciated2011jan09-eorg.eventbrite.com/

About the Program

Recognition of IP is an often overlooked tool in business, estate, divorce, and accounting practices. IP goes well beyond the realm of patents, trademarks, and copyrights. Recognition of IP provides a new dimension for transactions, property division, and estate planning when the traditional valuation measures of cash flow, comparables, or replacement cost are not available. 1 hour General Participatory credit

About the Speaker

Robert Cogan is Principal Attorney at Continuum Law in San Diego. In the course of his extensive experience, he has had responsibility for the worldwide patent, trademark, and copyright portfolios of public companies and for protecting rights of software companies. He also works with individual artists in visual arts, web design, and music. Mr. Cogan received his law degree from the George Washington University National Law Center.