It was a wild ride in intellectual property law during 2011, and more excitement waits in store — this year Congress tore up the old patent law rule book. Staff reporter Sheri Qualters surveys some of the highlights.
The U.S. Court of Appeals for the Federal Circuit rang in 2011 by bidding farewell to a common patent damages calculation canon. The unanimous panel in Uniloc USA Inc. v. Microsoft Corp. on Jan. 4 essentially told the so-called 25% “rule of thumb” to hit the highway. The rule was commonly considered a licensee’s opening reasonable royalty offer to a patent holder during a hypothetical negotiation. “The court is basically setting forth additional guidelines in terms of what is appropriate and inappropriate in a damages case,” said Uniloc’s Federal Circuit lawyer Donald Dunner, a partner at Washington’s Finnegan, Henderson, Farabow, Garrett & Dunner.
Intellectual property lawyers have been in a back-to-school mode since the Sept. 16 enactment of sweeping patent reforms. One high-impact feature of the Leahy-Smith America Invents Act bars whistleblower lawsuits against companies that falsely label products as patented. Another curbs lawsuits against multiple defendants. There’ll be more to learn next September, when new patent review procedures go online at the U.S. Patent and Trademark Office. An even bigger mind-shift awaits — in March 2013, the United States adopts first-to-file.
Luxury shoemaker Christian Louboutin might take a strategic breakfast at Tiffany’s before heading to the U.S. Court of Appeals for the 2d Circuit for arguments on whether his shoes’ red-lacquered outsole can trademarked. The court is slated to hear Christian Louboutin S.A. v. Yves Saint Laurent America Holding Inc. on Jan. 24. Jeweler Tiffany & Co., known for the shade of robin’s egg blue it has trademarked as Tiffany Blue, and the International Trademark Association have filed amici briefs. U.S. District Judge Victor Marrero shook the trademark world on Aug. 10 by denying Louboutin’s preliminary injunction to stop its competitor’s sales of shoes with red outsoles.
Lawyers breathed a collective sigh of relief when the Federal Circuit heightened the standards for proving fraud on the patent office in Therasense Inc. v. Becton Dickinson & Co. The doctrine “has plagued not only the courts but also the entire patent system,” Chief Judge Randall Rader wrote in the majority opinion. A split en banc panel said on May 25 that an accused infringer must prove that a patent applicant misrepresented or omitted material information before the U.S. Patent and Trademark Office “with the specific intent to deceive.”
The U.S. Supreme Court in Microsoft Corp. v. i4i L.P. upheld a $290 million verdict against the software giant, buoying patent plaintiffs by affirming that proving a patent invalid requires clear and convincing evidence. The Court on June 9 rejected Microsoft’s bid to lower the standard to preponderance of the evidence. The higher standard is appropriate, the Court said, even when the U.S. Patent and Trademark Office overlooks so-called prior art — published information about the claimed invention’s subject matter, including issued patents, that could disqualify a patent application.
When the decision came down, i4i’s lawyer, Seth Waxman, the former U.S. solicitor general and chairman of Wilmer Cutler Pickering Hale and Dorr’s appellate and Supreme Court practice, said i4i “depends on its patents.” The opposite ruling “would have completely upended a long stable regime that is essential to the innovation economy.”
American businesses and trade groups want Congress to stop a worldwide expansion of the Internet that they fear will melt brand value. As of Jan. 12, almost any word in any language will be able to be used as a generic top-level domain such as .com. There are now only 22 generic top-level domain names. The Internet Corp. for Assigned Names and Numbers’ approval of the expansion in June hasn’t stopped the flow of complaints from international groups, including nonprofits. Domain-name expansion will have “billions of dollars of impact on Internet brand holders,” said Dan Jaffe, executive vice president for government relations for the coalition’s leader, the Association of National Advertisers, in November.
Colder winter weather hasn’t cooled the scorching rhetoric about efforts to curb digital piracy and copyright theft. Introduced in the House of Representatives on Oct. 26, the Stop Online Piracy Act (SOPA) has become a flashpoint with critics claiming it would be the end of Internet. U.S. Sen. Ron Wyden (D-Ore.) placed a hold on SOPA’s Senate counterpart in May. He’s teamed with House Oversight Committee Chairman Darrell Issa (R-Calif.) on an alternate draft version of SOPA. “I am not willing to muzzle speech and stifle innovation and economic growth,” Wyden said.
The Federal Circuit is almost back to its full strength. Wilmer Cutler Pickering Hale and Dorr appellate litigation partner Edward DuMont withdrew his nomination, which had languished in the Senate since April 2010. President Obama then nominated Richard Taranto of Washington appellate boutique Farr & Taranto. Former U.S. Court of International Trade Judge Evan Wallach was confirmed in November. Former Williams Mullen partner Jimmie Reyna joined in April.
Apple Inc. won the first battle in the smartphone patent war when the International Trade Commission ruled on Dec. 19 that HTC Corp. Android phones infringe one of Apple’s patents. Apple has similar cases against Motorola Mobility Holdings Inc. and Samsung Electronics Co.