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Damages Trends in Patent and Lanham Act Cases by psq21886

VIEWS: 300 PAGES: 20

									Wab Kadaba, Outgoing Chair
Andrew Crain, Incoming Chair
Editors (Outgoing):
Alison Danaceau
Tina McKeon
                                                                                                                                              Summer 2009

Damages Trends in Patent and Lanham Act Cases
By J. Shawn McGrath and Kathleen M. Kedrowski1
Navigant Consulting, Inc.

P    laintiffs who prevail in patent
infringement or Lanham Act cases can be
                                                The average and median patent damages
                                                award has also increased over time.
                                                During the period from 1982 through
                                                                                                                        with a median award of $785,000. Between
                                                                                                                        1990 and 1999 the average award increased
                                                                                                                        to approximately $13.2 million (excluding
awarded monies under different theories of      1989, total damages awarded in patent                                   the Polaroid Company v. Eastman Kodak
monetary damages depending on the               cases averaged approximately $6.2 million,                                                                     (Continued on page 7)
circumstances of the case. The authors of
this article have studied reported damages
awards to successful plaintiffs in cases
involving patent infringement and
trademark infringement from 1982 through
2008, and false advertising from 1998
through 2008.2 This article summarizes
some key trends noted by the authors from
their study.
Trends in Patent Damages
Overall, the number of patent cases that
commenced in U.S. District Courts grew
over the past ten years from 2,218 cases in
1998 to 2,909 in 2008. In fact, the number
of cases filed grew every year from 1998
until reaching a peak of 3,075 cases filed in
2004. In 2005, the number shrunk by
approximately 12% to 2,720, but since then
has increased to about 95% of the 2005
peak in 2008. The chart right shows the
number of patent cases that commenced in                               Top 10 Patent Damages Awards (1982—2008)
U.S. District Courts during the period from
                                                Year                                Case                                       PatentIndustryDesc            Bench/Jury   Damages Awarded
1998 through 2008: 3                             1991 Polaroid Corporation v. Eastman Kodak Company                  Instant photography patents            Bench               $873,158,971
                                                      Advanced Medical Optics, Inc. v. Alcon Laboratories, Inc. and  Eye irrigation method used in eye 
The percentage of patent cases filed that
                                                 2005 Alcon Manufaturing, Ltd.                                       surgery                                Jury                $213,900,000
reach trial have remained consistently                                                                               Prewired wall panels & desk 
between 3% and 5% from 1998 through              1996 Haworth Inc v. Steelcase Inc.                                  components                             Bench               $211,499,731
2008.4                                                                                                               Rock bits ‐ Seal means for drill bit 
                                                 1986 Smith International, Inc. v. Hughes Tool Co.                   bearings                               Bench               $204,809,349
Our study of patent cases includes 342                                                                               Balloon catheters used in angioplasty 
decisions reported from 1982 through 2008        2008 Medtronic Vascular, Inc. v Boston Scientific Corp. et al.      procedures                             Jury                $186,090,000
in which damages were awarded for patent                                                                             Heat‐shrinkable biaxially stretched 
                                                 1999 Viskase Corporation v. American National Can Company           film                                   Jury                $164,925,789
infringement totaling slightly over $5                                                                               Method for limiting the 
billion.5 A case decided in 1991, Polaroid                                                                           unauthorized use of computer 
Corporation v. Eastman Kodak Company,6           2006 z4 Technologies, Inc v Microsoft Corp and Autodesk, Inc        software.                              Jury                $160,300,000
remains the single largest patent damages             Union Carbide Chems. & Plastics Tech. Corp. and Union 
award at $873 million, representing about             Carbide Corp. v. Shell Oil Co., Shell Chemical Co., and CRI    Silver catalysts used in the 
                                                 2005 Catalyst Co.                                                   production of ethylene oxide           Jury                $153,615,774
17% of the total patent damages awarded
                                                      Fonar Corporation and Dr. Raymond V. Damadian v. General  Medical diagnostic equiptment ‐ 
since 1982.                                      1997 Electric Co. and Drucker & Genuth MDS, P.C.                    MRI Testing                            Jury                $128,700,000
                                                 1992 3M v. Johnson & Johnson Orthopaedics                           Water‐activated casting material       Jury                $116,797,696
In This Issue                                                  Outgoing Chair’s Corner
1    Damages Trends in Patent and Lanham Act Cases             By Wab Kadaba
2    Chair’s Corner                                            Kilpatrick Stockton LLP
3    After In re Bilski: More Clues Needed
4    IP Member In Focus: Sole Practitioners
     Committee Reports
     Larson v. Aluminart: More Inequitable Conduct Guidance
                                                               I t is hard to believe the 2008-2009 Bar year is coming to an
                                                               end. As we reported in our last newsletter, the IP Section once
     from the Federal Circuit                                  again hosted a successful IP Institute in Cabo San Lucas,
13   Upcoming Events Calendar                                  Mexico.
15   Divided Infringement of Method Patent Claims: A           Back home, the IP Section didn’t skip a beat, hosting numerous
     Tough Sell                                                programs touching on a variety of hot IP topics. These
18   IP Crossword                                              programs included the state of patentable subject matter after the
                                                               In Re Bilski decision, transformative fair use in the copyright
19   IP in Pictures, News & Notes                              arena, ethical conflicts in IP prosecution, and litigation and
20   Letter From the Editors                                   lessons from the Adidas v. Payless case, which resulted in the
                                                               largest trademark damages verdict to date.
                                                               In addition to the wealth of nationally recognized IP attorneys
                                                               within our own community who presented on these topics, we
                                                               were also able to bring you leading experts from other
                                                               jurisdictions. These speakers included Chief Judge Spencer of
                                                               the U.S. District Court for the Eastern District of Virginia, Paul
2008-2009 IP Section Officers                                  Gardner of the internationally know PATENT RESOURCES
                                                               GROUP®, and Trademark Office Commissioner Lynne
and Committee Chairs                                           Beresford. I hope you were able to take advantage of these
                                                               insightful programs right here in our own backyard.
Wab Kadaba, Chair              Shane Nichols, Secretary
Kilpatrick Stockton LLP        King & Spalding LLP             Recognizing we all need some recreation as well, the IP Section
                                                               planned a few social events for you. In December, we joined
Andrew Crain, Chair Elect      Philip Burrus, Treasurer        forces with the IP Section of the Atlanta Bar and brought back a
Thomas, Kayden, Horstemeyer    Burrus Intellectual Property    tradition from several years ago, the IP Section Holiday Party.
& Risley LLP                   Group                           It was a festive event that was very well attended. On June 18,
                                                               2009 the Section once again hosted its annual event welcoming
Steven Wigmore. Vice Chair     Todd S. McClelland, Immediate   summer associates interested in IP to Atlanta. This event was
The Sentry Law Group           Past Chair                      open to all section members.
                               Alston & Bird LLP               I would like to thank the Executive Committee, which includes
COMMUNICATIONS COMMITTEE       LICENSING COMMITTEE             the Officers and Committee Chairs of the IP Section, for all their
Alison Danaceau, Co-Chair      Andria Ellen Beeler-Norholm,    hard work this year. Their efforts have made the 2008-2009 Bar
Carlton Fields                 Chair                           year an unquestionable success.
Tina McKeon, Co-Chair          Alston & Bird LLP
Fish & Richardson
                               LITIGATION COMMITTEE
COPYRIGHT COMMITTEE            Wilson L. White, Chair
Philip Walden, Chair           Kilpatrick Stockton LLP
Turner Entertainment Group,
Inc.                           PATENT COMMITTEE
                               Bradley K. Groff, Chair
IN HOUSE COMMITTEE             Gardner Groff Greenwald &
Kevin Glidewell, Chair         Villanueva, P.C.
Turner Broadcasting System,
Inc.                           SOCIAL COMMITTEE
                               Lauren Estrin, Chair
                               Kilpatrick Stockton LLP

                               TRADEMARK COMMITTEE
                               Jim Johnson, Chair
                               Sutherland Asbill & Brennan     Tina McKeon, Wilson White, and Wab Kadaba at an IP
                               LLP                             Section Happy Hour.

Page 2 — Georgia IP Law Section Newsletter, Summer 2009
After In re Bilski: More Clues Needed
By Brenda Holmes, Jim Sangston, and Eric Zaiser
Kilpatrick Stockton LLP

T    he initial reaction to the decision in In re Bilski, 545 F.3d 943
(Fed. Cir. 2008) (“Bilski”) was focused on its impact on “business
                                                                           govern in determining whether a process is patent-eligible subject
                                                                           matter under Section 101.
                                                                           In a lengthy opinion addressing the meaning of “process,” the
method” patents. Although the decision did not hold that                   Federal Circuit concluded that the only test for identifying a
business methods are unpatentable per se, such patents will                statutory § 101 “process” requires that a claimed process: (1) be
undoubtedly be harder to obtain as a result of Bilski. Since the           tied to a particular machine or apparatus, or (2) transform a
decision the application of Bilski by both the courts and the Board        particular article into a different state or thing, as outlined by the
of Patent Appeals and Interferences raises continuing questions            Supreme Court in Diehr. The Federal Circuit rejected other tests,
both about the ultimate reach of the decision and its application.         including the “useful, concrete and tangible result” test, the
The Supreme Court recently granted certiorari, however, and may            Freeman-Walter-Abele test, a “technological arts” test, and a
address the remaining questions.                                           “physical steps” test. Although the Court did not overrule its
In Bilski, the Federal Circuit faithfully followed Supreme Court           decisions in State Street Bank and AT&T Corp., it did overrule the
precedent and rejected claims directed to a method of hedging risk         portions of those opinions relying solely on the "useful, concrete,
in commodity purchases because the claims were neither limited to          and tangible result" analysis.
a particular machine nor did they recite an eligible transformation        The Court held that a patent applicant cannot circumvent the
of an article and therefore were not directed to patentable subject        requirements of § 101 simply by including a machine or
matter under 35 U.S.C. § 101. The Federal Circuit discussed the            transformation in the claim language. Use of either a machine or a
cases summarized in the following section in announcing a single           transformation must impose meaningful limits on claim scope, and
test for patent-eligible subject matter. Whether the Supreme Court         a claim cannot preempt use of a fundamental principle.
approves the test remains to be seen.                                      Furthermore, neither field-of-use limitations nor insignificant
                             Background                                    “extra-solution activity,” such as adding a step of gathering data,
Prior to Bilski the United States Supreme Court in Diamond v.              can save the patent eligibility of an otherwise patent-ineligible
Diehr, 450 U.S. 175 (1981), excluded “laws of nature, natural              process claim. Transformable articles include 1) physical objects
phenomena, and abstract ideas” from patent protection under 35             and substances, and 2) electronic representations of underlying
U.S.C. § 101 and analyzed the statutory meaning of the term                physical objects and substances. The Court only applied the
“process,” noting that “[t]ransformation and reduction of an               transformation branch of the test since it was undisputed that the
article ‘to a different state or thing’ is the clue to the patentability   claims at issue were not tied to a machine.
of a process claim that does not include particular machines.” 450         According to vigorous dissents, the In re Bilski majority has added
U.S. at 192 (quoting Gottschalk v. Benson, 409 U.S. 63, 70 (1972)).        uncertainty and disrupted well-settled principles of law. At least
Later, the Federal Circuit in State Street Bank & Trust Co. v. Signature   one of the dissents would have simply declared the claims in this
Fin. Group, 149 F.3d 1368, 1373 (Fed. Cir. 1998) held that                 case unpatentable as directed to an abstract idea. More
                                                                           categorically, another dissent would have declared business
          [T]ransformation of data, representing discrete                  methods in general to be unpatentable. Although the Federal
          dollar amounts, by a machine through a series                    Circuit refused to go that far, In re Bilski leaves unanswered
          of mathematical calculations into a final share                  questions regarding how process claims directed to business
          price, constitutes a practical application of a                  method and software-related inventions will be considered in the
          mathematical algorithm, formula, or calculation,                 future.
          because it produces “a useful, concrete and
          tangible result” . . . .                                                            Courts’ Application of Bilski
The State Street holding has been widely interpreted to create a           Since the Bilski decision, courts have applied it to invalidate claims
“useful, concrete and tangible” test to assess whether an abstract         directed to a series of transactions related to acquiring and selling
idea such as an algorithm constitutes patentable subject matter as         real estate, Fort Properties Inc. v. American Master Lease, LLC No.
well as to establish that business methods are patentable subject          SACV07-365AGJCX 2009 WL 249205 (C.D. Cal. Jan. 22, 2009),
matter.                                                                    and directed to a method of determining the effect of an
                                                                           immunization schedule on disorders in treatment of mammals,
A year later the Federal Circuit, acknowledging that abstract              Classen Immunotherapies v. Biogen IDEC, No. 2006-1364, 2006-1649,
mathematical algorithms are not patentable, held in AT&T Corp. v.          2008 WL 5273107 (Fed. Cir. December 19 2008).
Excel Commc’ns, Inc., 172 F.3d 1352 (Fed. Cir. 1999) that a
computer-based algorithm constitutes patentable subject matter             Note that the Classen case did not involve either a business method
where it produces a “useful, concrete and tangible result.”                or software, thus showing that the reach of Bilski is not limited to
                                                                           these classes. Moreover, from these court cases it appears that a
                    The Decision in In re Bilski                           Bilski defense of invalidity due to ineligible subject matter is
The most pressing consideration facing the en banc Federal Circuit         available to accused infringers. However, at least one court has
in In re Bilski was the determination of what standard should              refused to allow a defendant to add such a defense to a case

                                                                Georgia IP Law Section Newsletter, Summer 2009 — Page 3
pending when the Bilski opinion issued. (Transamerica Life Ins. Co. v.   contexts. For example, is there a transformation when a human or
Lincoln Nat. Life Ins. Co., No. C06-110-MWB (N.D. Iowa December          animal is treated? As another example, when does transformation
5, 2008)).                                                               of data satisfy the requirement of a transformation of an article?
The Bilski decision resulted from an appeal during prosecution of        The US Supreme Court will weigh in shortly and may address
an application. An accused infringer’s use of Bilski, however, would     some of these questions. For now, though, examiners armed with
be in the context of contesting the validity of an issued patent.        Bilski and the subsequent Board decisions have a powerful tool to
What happens to the presumption of validity in this situation? The       reject various classes of claims as patent ineligible—not just
answer to this question was not addressed by Bilski and is not yet       business method claims. Additionally, the current enthusiasm of
clear.                                                                   the Board in applying Bilski, even when not raised by the
                    BPAI Application of Bilski                           examiner, may be an important factor to consider in deciding
                                                                         whether to appeal an examiner’s rejection or to reach a
The Board of Patent Appeals and Interferences quickly cited Bilski       compromise with the examiner.
in overturning an examiner’s rejection of computer program
product claim (sometimes known as a “Beauregard” claim). In Ex
parte Bo Li, Appeal No. 2008-1213, (BPAI Nov. 6, 2008), the
examiner rejected a Beauregard claim as directed to nonstatutory
subject matter under § 101 for failing the "useful, concrete, and
tangible result" test. The Board followed Bilski and refused to
                                                                         IP Member in Focus:
recognize this test as viable. Additionally, the Board noted that the
claim in question recited patent-eligible subject matter by its use of   Sole Practitioners
the Beauregard format. However, a subsequent Board case took an          By Robert T. Neufeld
inconsistent position by requiring that a Beauregard claim satisfy the   King & Spalding, LLP
Bilski test even though the claim was not a method claim. Ex Parte

Cornea-Hasegan, 89 U.S.P.Q.2d 1557 (Bd. Pat. App. & Int. 2009).
The Board has wholeheartedly embraced Bilski to find patent claims             his issue's IP Member In Focus article is dedicated to some of
to be directed to ineligible subject matter. In particular, the Board    the successful sole practitioners in the IP Section. The sole
has based at least 18 decisions on Bilski, including several decisions   practitioners who volunteered to offer insights for this article are
in which the Board raised § 101 as a new ground for rejection and        Philip Burrus, Joan Dillon, Doug Isenberg, and Nora
others in which the Board sent the case back to the examiner to          Tocups. While sole practitioners may not receive the attention
consider eligibility under § 101. In essence, it appears that if the     that larger firms do, they are a thriving component of the IP
Board can construe a claim broadly to cover an ineligible process, it    Section. As the comments below indicate, intellectual property law
will reject that claim under Bilski.                                     offers an opportunity for sole practitioners to have a sophisticated
                        Unanswered Questions                             practice that is both challenging and rewarding. This article begins
                                                                         with brief introductions to each of the members we are
Several questions remain. Clearly not patent-eligible are method
                                                                         featuring. The article then follows a "question and answer" format
claims that recite neither a machine - such as a computer - nor
                                                                         wherein our featured members offer experiences and insights in
transformation of an article from one state to another. In particular
                                                                         response to certain questions.
method claims that involve manipulation of financial risk or legal
obligations, but do not recite use of a particular computer to           To introduce our featured
implement those manipulations, are not patent-eligible. However, it      members, we begin with
is not clear what effect the recitation of a computer or processor       Philip Burrus who established
will have.                                                               his firm - Burrus Intellectual
At the Board, it appears mere recitation of a computer or processor      Property Group -
does not suffice to satisfy the machine prong of Bilski. (See, for       approximately four years ago
example, Ex Parte Gutta, No. 2008-3000 (Bd. Pat. App. & Int. Jan.        after practicing as an in-
15, 2009)). In Bilski, the Federal Circuit emphasized that a             house patent attorney with
“particular” machine is needed, but explicitly left to subsequent case   Motorola. Phil is an inventor
                                                                         himself, having received a       Philip Burrus
law developments clarification of just what constitutes a sufficiently
particular or specific machine. However, it is no longer clear that      patent on a golf swing
what traditionally has been thought of as a machine, for example a       training aid in addition to other patents. After receiving his
server in a computer network, will be considered a machine that          Bachelor’s and Master’s degrees in Electrical Engineering from
satisfies Bilski, especially if the “machine” can be implemented with    Georgia Tech and working as an engineer, Philip assumed a patent
software. See, for example, Ex Parte Harris, No. 2007-0329 (Bd.          agent position at Motorola while obtaining his law and business
Pat. App. & Int. January 13, 2009) where the Board found that a          degrees at Emory.
method claim reciting a network and a server failed the machine          Joan Dillon has been practicing law for over thirty-five years,
prong since the claim could encompass a “societal network” and           primarily focused in the areas of trademark law, copyright law, and
“(human) servers” collecting bids.                                       licensing. Joan had experience practicing in both large and small
In addition, even though Bilski applied the transformation prong in      law firms, as well as in-house legal departments, before deciding to
the context of a business method, there are still unanswered             open her own practice. Joan says without a doubt that running her
questions about what will satisfy this part of the test in other         own practice has been the best job she has ever had.

Page 4 — Georgia IP Law Section Newsletter, Summer 2009
                             Doug Isenberg, a past chair of the IP      major in marketing/retailing and a have a degree in business from
                             Section, founded his own firm - The        Washington University. I assume my education, combined with a
                             GigaLaw Firm - after launching a           very pragmatic and perfectionistic approach to life, have helped
                             successful website                         me in the business.
                             ( providing
                                                                        Philip Burrus: In connection with my invention of a golf swing
                             information about legal issues and the
                                                                        training aid, I drew up plans and worked with a tooling company
                             Internet. Prior to starting his own
                                                                        to have the device tooled, built, and packaged for sale through
                             firm in 2005, Doug worked as a
                                                                        retail channels. Separately, during the 1990s I ran my own small
                             newspaper reporter and gained
                                                                        business making and selling cigar humidors and cigar accessories.
                             experience practicing in both a general
                                                                        Additionally, my professional experience as an engineer and as an
                             practice firm (Alston & Bird) and an
                                                                        in-house patent attorney managing a patent portfolio for a large
                             IP boutique firm (Needle &
                                                                        corporation helped take some of the “edge” and worry out of
                             Rosenberg). Among other
                                                                        hanging my own shingle.
                             accomplishments, Doug also has
                             published a book entitled The              Question: What advantages can you offer a prospective client as
Doug Isenberg.               GigaLaw Guide to Internet Law.             compared to a medium or large size law firm?
Nora Tocups is a registered patent attorney who has been                As one would expect, one of the primary advantages a sole
practicing intellectual property law for nearly thirty years. Nora      practitioner can offer is less overhead which translates to lower
was introduced to technical language and writing at an early age        billing rates for clients. Other advantages the panel members
working with her father, who was an electrical engineer. Nora           identified include: (i) deep experience in a particular area of the law
received her Bachelor’s degree in Electrical Engineering from           on which the practitioner focuses; (ii) the time to get to know the
Georgia Tech while practicing at the Jones & Askew law firm.            client’s business and needs; and (iii) the ability to respond with
After working at both IP boutique firms and a large, general            alacrity to client requests.
practice firm, Nora launched her successful solo practice in 2002.
                                                                        Question: What challenges have you faced in establishing and
With the goal of learning about what it takes to start and run a        running your own practice?
successful law practice as a sole practitioner, I posed a series of
questions to our panel of featured IP Section members.                  I received many similar responses to this question including: (i) the
Regardless of the setting in which you practice IP law, I believe       absence of colleagues in the same office with whom you can easily
you will find the following discussion both interesting and             collaborate or discuss novel legal issues; (ii) managing
informative.                                                            administrative and IT tasks so that they do not divert too much
                                                                        time from the practice of law; and (iii) the inability to get away
Question: Were there any particular experiences that motivated          from the practice for extended periods of time because the entire
or inspired you to start your own law practice?                         business depends upon you, the sole practitioner.
A common response from several of the members interviewed was           Question: Can you provide any examples of clients or matters
the freedom and excitement that accompanies running your own            you have worked on that you found particularly enjoyable or
business and being your own boss. Several of the members                satisfying?
interviewed also pointed out that the nature of their practice does
not require a large office or staff and that the only necessary tools   Joan Dillon: My favorite story is the time I argued the appeal of
to meet their clients needs are a computer, Internet access, and a      the denial of a preliminary injunction before the Third Circuit. My
telephone, coupled with the legal skills they bring to the table.       daughter, 13 years old at the time, and I, took the train up from
                                                                        D.C. to Philadelphia. She sat behind the rail at the oral argument,
Question: Did you have any prior experience as an entrepreneur          right behind me. After my argument, and when I was sitting
or in a small business setting that you found to be helpful in          down, she leaned forward and whispered, “Is it appropriate to
setting up your own practice?                                                                                 applaud?” I told her I loved
                                                                                                              the sentiment, but that no, it
Nora Tocups: My Dad always had an engineering consulting
                                                                                                              would be inappropriate. I
business. Everyone in our family helped with the business at times
whether it was bookkeeping, making copies, or running errands.
Because English was my Dad’s third language, I would often help                                                Nora Tocups: It has been
him with proofreading reports and presentations.                                                               gratifying to continue
                                                                                                               working with clients who
Doug Isenberg: In addition to practicing law, I am also the co-
                                                                                                               followed me from my
founder of a company called cc:Clients (,
                                                                                                               previous firms to the
which provides marketing services to law firms via effective e-mail
                                                                                                               establishment of my own
newsletters. At both cc:Clients and my solo legal practice, I have
                                                                                                               practice. I take pride in that
learned that customer (or client) service is essential. Everyone
                                                                                                               vote of confidence from my
appreciates prompt and helpful attention, and providing it can go a
long way to establishing a great working relationship.
                                                                        Joan Dillon, policing the quality      Philip Burrus: I enjoy
Joan Dillon: I had no experience in running a business, but I had
                                                                        of goods associated with an            resolving intellectual property
been selling salve, punch cards, pictures of my Dad’s band, and
                                                                        important trademark.                   issues for my clients. For
various and sundry things, since I was six years old. I did however

                                                              Georgia IP Law Section Newsletter, Summer 2009 — Page 5
example, I find it enjoyable every time I get a patent or trademark      generous. I don’t know if it is as true for lawyers in general, but
issued. For some of my smaller corporate clients, it may be a first      I’ve found IP attorneys to be willing to help me on just about any
patent or one that is critical to their business plan. For larger        issue. I’ve met some great people in the IP Section. For those
corporate clients, it may be                                             interested in starting a practice, feel free to contact me. I’d be
related to a product launch.                                             happy to share my experience.
Protecting innovation is
                                                                         Nora Tocups: Network as much as possible, these will be the
very rewarding. Other work
                                                                         people you can turn to for advice, for business, and for support.
I find satisfying includes
                                                                         The IP Section offers a great avenue for networking and keeping
opinion and licensing work.
                                                                         up to date with the law and the local IP community.
It is incredibly satisfying to
license a client’s patent. The                                           Joan Dillon: I recommend that the attorney be well-grounded in
client is thrilled to actually                                           the law, have the commercial background formed through
make money from what is                                                  substantial years of experience, have the contacts and connections
normally considered a cost                                               to get the job done, and know how to run the business of law.
center – legal services.                                                 Substantial experience in private practice and in an in-house legal
That’s a thrill. I also tend to                                          department can provide a great foundation, illustrate different
do work with some clients                                                approaches to managing a law practice, and help one identify the
on defensive matters -                                                   best approach for their practice. I moderated a panel at the 2009
perhaps a patent owner calls                                             INTA conference on “Law Firm Best Practices” in which
and threatens to sue. This                                               experienced trademark practitioners from a variety of firms shared
threat can appear                                                        their approaches.
overwhelming for some
businesses at first.                                                     Conclusion
However, if I can resolve                                                All of the panel members agreed that the Atlanta area offers many
that issue for them, they are                                            great opportunities for sole practitioners looking to serve clients in
                                 Nora Tocups and her junior as-
really appreciative.                                                     the IP field. The foregoing comments offer interesting
                                 sistant Bailey.
Doug Isenberg: I often                                                   perspectives on what is involved in establishing and running a
describe my practice as very narrow, but also very deep. In 13           successful solo practice. We thank Phil, Joan, Doug, and Nora for
years of practicing law, I have spent more time helping clients          sharing their thoughts and hope that you have found their
resolve domain name disputes than anything else -- which also            comments interesting and helpful for your practice.
means I have spent more time on this topic than most other
lawyers have. As a result, I have created a niche practice as a solo
where I have more experience in my area of the law than most
lawyers at firms of any size. Thus, I am actually able to provide
my clients with more experience than they can find almost
anywhere else.
Question: What aspects of having your own practice do you
enjoy most?
All of the panel members agreed that flexibility in deciding when
and where you work is one of the highlights of practicing on your
own. The panel members also pointed to the control one has in
deciding which clients to accept, what areas of your practice to
focus upon, and how best to deliver superior client service. One
panel member also mentioned the opportunity to have an office
Question: What advice would you offer to a lawyer considering
launching a solo practice?
Doug Isenberg: I have met an increasing number of sole
practitioners who, like me, have developed niche practices and
have great experience, often from large law firms. I have talked
with some of them about creating a formal network in Atlanta
where we can share best practices and even client relationships. If
other sole practitioners who read this want to help with this effort,
I encourage them to contact me!
Philip Burrus: I would recommend the IP Section as a resource.
The IP attorneys I’ve met in the Section are all incredibly willing to
help, whether they’re in large or small firms. If I’ve got a question,
I can pick up the phone and get an answer. Everyone is very

Page 6 — Georgia IP Law Section Newsletter, Summer 2009
(Continued from page 1)
Corporation case), with a median award of
$2.1 million. Damages awards continued to
increase from 2000 through 2008, with
average and median damages awards of
$17.8 million and $2.8 million, respectively.
Even with average and median patent
damages awards on the rise, still 43% of the
patent damages awards resulted in $1
million or less for the plaintiff.
The table above lists the ten largest patent
damages awards from 1982 through 2008.
This list includes only patent damages
awards that have not yet been appealed, the
appeal is awaiting decision or have
withstood appeal. The list does not include
patent damages awards that have been
vacated, remanded or reversed, and it does
                                                while only 24% were lost profits. During   trademark cases filed in U.S. District
not include settlements. For example,
                                                the 1990s, lost profit damages and         Courts has been declining. The chart
Microsoft Corporation was sued by Alcatel-
                                                reasonable royalties were split more       below shows the number of trademark
Lucent over the infringement of several
                                                equally, with reasonable royalties         cases that commenced in U.S. District
audio patents. In February 2007, a jury
                                                accounting for 47% of compensatory         Courts during the period 1998 through
awarded the largest patent damages verdict
                                                damages awarded and lost profits making    2008:9
to date of approximately $1.5 billion;
                                                up 48% of damages. Since 2000,
however, this verdict was overturned in                                                    The percentage of trademark cases filed
                                                reasonable royalties make up over 80% of
August 2007 for a variety of reasons.7                                                     that reach trial have remained consistently
                                                the compensatory damages awarded and
                                                                                           between 1% and 2% from 1998 through
Upon review of the top ten patent damages       lost profits have declined to only 18%.
awards, a few observations were noted:          The chart above summarizes the
                                                percentage damages awarded by type over    Our analysis includes only a study of
First, the top ten awards, totaling             time.                                      federal trademark infringement cases filed
approximately $2.4 billion, account for
                                                                                           and does not include a review or analysis of
nearly half of the total patent damages of      Trends in Trademark Damages
                                                                                           trademark infringement cases filed in state
approximately $5 billion awarded since
                                                With the exception of a spike in the       courts. Monetary damages were awarded in
                                                number of trademark cases that             205 published trademark infringement
Second, only one of the top ten patent          commenced in U.S. District Courts from     cases during the period from 1982 to 2008.
damages awards preceded 1990. Of the            1998 to 2000, the number of trademark      Damages awarded between 1982 and 2008
remaining nine, five of the top ten patent      cases has remained relatively stable. To   total approximately $340 million. The
damages awards occurred during the 1990s        wit, 3,448 trademark cases were filed      largest single award noted was $117 million
and four of the top ten patent damages          during 1998, and an almost identical       in the 2002 matter of Qwest Communications
awards occurred between 2000 and 2008.          amount was filed ten years later during    Intl, Inc. and Qwest Communications Corp. v.
                                                2008, (3,449). Since 2006, the number of   OneQwest LLC,11 which represents
Third, the bench awarded 53% of the top
ten patent damages awards while 47% was
awarded by a jury. And with the exception
of the 1992 3M v. Johnson & Johnson
Orthopaedics award, the three bench awards
are the oldest cases listed in the top ten
patent damages award list.
In patent infringement cases, damages can
generally be awarded in the form of lost
profits and/or reasonable royalties, along
with enhanced damages, interest and
attorney’s fees and costs.8 Lost profits may
also include price erosion and convoyed
sales. Over time, the most noticeable
change in the components of patent
damages has been seen in lost profit
damages and reasonable royalties. From
1982 through 1989, 71% of compensatory
damages awarded were reasonable royalties

                                                           Georgia IP Law Section Newsletter, Summer 2009 — Page 7
approximately 34% of the $340 million
total damages awarded since 1982.
Our study of the trademark damages
awards indicates the total amount of
damages awarded has been increasing over
time. The average damages award
increased during the 1990s before
experiencing a slight decrease during the
2000s. During the period from 1982
through 1989 total damages awarded in
trademark cases averaged approximately
$329,245, while the median award was
approximately $75,000. Between 1990 and
1999 the average trademark damages award
increased to approximately $1.4 million,
with the median award increasing to
$167,000. The average trademark damages
award decreased slightly to approximately
$1.2 million from 2000 through 2008, with
a median award of $301,777, excluding the
Qwest matter noted above. Even given the
                                                                                                                   $117 million, were excluded from our
noted increase in average and median                       of $340 million awarded since 1982.
                                                                                                                   analysis in order to avoid skewing the
trademark damages awards, still
                                                           Second, none of the top ten trademark                   results.
approximately 68% of the trademark
                                                           damages awards preceded 1990. Of the
damages awards were $500,000 or less.                                                                              From 1982 through 1989, of the
                                                           remaining nine, three of the top ten
                                                                                                                   compensatory components, 43% of
The following is a list of the top ten                     trademark damages awards occurred
                                                                                                                   trademark damages awarded were
trademark damages awards from 1982                         during the 1990s and seven of the top ten
                                                                                                                   defendant’s profits, 19% were lost profits,
through 2008. As illustrated by this table,                trademark damages awards occurred
                                                                                                                   and 23% were other damages (primarily
the trademark damages awards drop off                      between 2000 and 2008.
                                                                                                                   statutory). During the 1990s, the balance
substantially after the largest award. This
                                                           Third, the bench has decided all of the top             shifted with defendant’s profits accounting
list includes only trademark damages
                                                           ten trademark damages awards.                           for 76% of trademark damages awarded
awards that have either not yet been
                                                                                                                   and reasonable royalties making up 17%.
appealed, the appeal is awaiting decision or               Damages can be awarded to a trademark
                                                                                                                   Lost profits awards were minimal. Since
have withstood appeal. The list does not                   owner under prevailing law in the
                                                                                                                   2000, other damages, primarily statutory
include trademark damages awards that                      following areas: lost profits, price erosion,
                                                                                                                   damages, reached their highest level
have been vacated, remanded or reversed,                   costs for corrective advertising, harm to
                                                                                                                   comprising 49% of trademark damages
and it does not include settlements.                       reputation, defendant’s profits (unjust
                                                                                                                   awarded with defendant’s profits
                                                           enrichment), reasonable royalties, as well
Upon review of the top ten trademark                                                                               accounting for 39%, and lost profits and
                                                           as punitive damages, attorney fees and
damages awards, a few observations were                                                                            reasonable royalties making up only 6%
                                                           other costs of the action.12 The chart
noted:                                                                                                             and 1%, respectively.
                                                           above summarizes the percentage of
First, the top ten awards, totaling                        compensatory damages awarded by type                    Additionally, during the period from 2006
approximately $246 million, account for                    from 1982 through 2008. The damages                     through 2008, we noted an increase in
over 72% of the total trademark damages                    awarded in the Qwest case, which totaled                accompanying claims for unfair
                                                                                                                   competition, false advertising, and
                                                                                                                   copyright infringement along with the
                Top 10 Trademark Damages Awards (1982—2008)                                                        reported trademark infringement claims.
  Year                                      CASE                                 Bench/Jury   Damages Awarded      Where possible, we have excluded damages
           Qwest Communications Intl, Inc. and Qwest Communications Corp. v.                                       for those accompanying claims from our
    2002   OneQwest LLC                                                         Bench               $117,000,000   analysis trademark damages. However, in
    2006   Nike Inc., Adidas‐Salomon A.G., et al. v. Top Brand Co., et al.      Bench                $38,247,889   some circumstances, damages awarded for
    1992   Sands, Taylor & Wood Co. v. The Quaker Oats Co.                      Bench                $26,517,408
                                                                                                                   these other claims could not be separated
    1997   Playboy Enterprises Inc. v. HSIN I. Chen                             Bench                $18,537,766
                                                                                                                   in the reported decision and are, therefore,
    2003   Tommy Hilfiger Licensing, Inc. v. Goodyʹs Family Clothing            Bench                $11,076,441
                                                                                                                   included in the above data and analysis.
    2003 Symantec Corp., Quarterdeck Corp. v. CD Micro and Vincent Webb         Bench                $10,329,632   Trends in False Advertising Damages
    2002 GTFM Inc. and GTFM, LLC v. Solid Clothing, Inc. d/b/a ZAM              Bench                 $7,044,271
    1996 A&M Records Inc. v. Abdallah                                           Bench                 $7,000,000   From our study, we identified twelve cases
    2008 Cache La Poudre Feeds, LLC v. Land Oʹ Lakes, Inc.                      Bench                 $5,268,686   in which damages were awarded for false
         Ford Motor Company v. Money Makers Automotive Surplus, Inc.;                                              advertising during the period from 1999
    2005 Midwest Motor Parts & SAF Autoparts                                    Bench                 $5,000,000

Page 8 — Georgia IP Law Section Newsletter, Summer 2009
          Top 10 False Advertising Damages Awards (1999—2008)                                                                 more closely examine the cases identified in
                                                                                                                              our study.
                                                                                                         False Advertising 
                                                                                                                              1J.Shawn McGrath is an Associate Director at
Year                                           Case                                         Bench/Jury       Damages
                                                                                                                              Navigant Consulting, Inc. Kathleen M. Kedrowski is
2006 First Act v. Brook Mays Music Company                                                 Bench                $16,198,370   a Managing Director at Navigant Consulting, Inc.
2005 Wildlife Research Center, Inc. v. Robinson Outdoors, Inc.                             Bench                 $4,799,438   Both authors are members of Navigant Consulting,
2004 Playtex Products, Inc. v. Procter & Gamble Company                                    Jury                  $2,960,000   Inc.’s Intellectual Property practice. The authors
2000 Braun Inc. and The Gillette Company v. Optiva Corporation                             Jury                  $2,500,000   would like to recognize Jill Rusk, Erin Wikman, Andy
                                                                                                                              Ackel, Sara Eynon, Leigh Lovelady and Marc Peckler
2005 Callaway Golf Company v. Dunlop Slazenger                                             Bench                 $1,100,000   for their assistance in gathering and analyzing the data
2008 Pedinol Pharmacal v. Rising Pharmaceuticals                                           Bench                   $774,448   that is the basis for this article. The content of this
2008 Imig, Inc. v. Electrolux Home Care Products, Ltd.                                     Bench                   $272,153   article does not reflect any opinions or advice of the
2003 Donald W. Nutting v. RAM Southwest, Inc.                                              Bench                    $63,774   authors or Navigant Consulting, Inc.
1999 Hot Wax, Inc. v. S/S Car Care                                                         Bench                    $52,000   2The  authors have gathered data from reported
2007 Societe Civile Succession Richard Guino v. Beseder Inc. (dba Rima Fine Art), et al.   Jury                     $45,000   decisions in The United States Patent Quarterly
2008 Days Inn Worldwide, Inc. v. Amar Hotels, Inc.                                         Bench                    $37,978   (“USPQ”) and Lexis/Nexis where damages were
                                                                                                                              awarded for findings of patent infringement,
2007 Edward Allen v. The Ghoulish Gallery, Tim Turner and April Turner                     Bench                     $2,500   trademark infringement and false advertising. Damage
                                                                                                                              awards that have been vacated, reversed or remanded
through 2008.13 A total of about $28.8                             approximately 20% of the false advertising                 on appeal have been excluded from the analysis. The
                                                                                                                              information in this article includes data from a patent
million in compensatory damages were                               damages awards while approximately 80%                     damages database owned by one of the authors,
awarded for false advertising claims in                            were awarded by the bench. Further, two-                   Kathleen M. Kedrowski.
these cases. During the period from 1999                           thirds of the false advertising damages                    3Source: Each year represents the
through 2003, total compensatory damages                           awards have been awarded since 2005,                       number of cases filed for the twelve-month period
awarded for false advertising claims                               with these awards making up about 80%                      ending September 30th.
averaged approximately $870,000, with a                            of the total damages.                                      4Source:
median award of about $64,000. Between
                                                                   For claims of false advertising, monetary                  5This total represents reported damages opinions
2004 and 2008 the average award increased
                                                                   damages awards include lost profits,                       where the amount of damages has been included in
to approximately $2.9 million, with a                                                                                         the decision. In some matters, the total damages
                                                                   defendant’s profits and corrective
median award of about $774,000. The                                                                                           award is not contained in the reported decision.
                                                                   advertising, as well as prejudgment
largest single award noted was just over $16
                                                                   interest, attorney’s fees, and other costs.15              6Polaroid Corporation v. Eastman Kodak Company, (17
million in the 2006 matter of First Act, Inc.                                                                                 USPQ 2d 1711)
                                                                   The chart below summarizes the
v. Brook Mays Music Co.,14 which represents
                                                                   percentage of compensatory damages                         7Lucent Technologies et al. v. Gateway Inc. et al, (2007 U.S.
approximately 56% of the $28.8 million                                                                                        Dist. LEXIS 57135)
                                                                   awarded by type.
total damages awarded since 1999.
                                                                                                                              835   USC § 284
While our study included a search for false                        Conclusion                                        Each year represents the
advertising damages awards in both federal                                                                                    number of cases filed for the twelve-month period
and state cases, only damages awards                               Based on our study of patent and Lanham                    ending September 30th.
reported in federal court cases were found.                        Act cases, both the volume and amount                      10Source:
The chart below lists each of the twelve                           of damages awards have generally
                                                                                                                              11Qwest  Communications Intl, Inc. and Qwest Communications
cases reported where damages were                                  increased during the period from 1982                      Corp. v. OneQwest LLC, (2002 U.S. Dist. LEXIS
awarded for claims of false advertising by                         through 2008. It is the authors’ hope that                 25469)
damages amount. A jury awarded                                     our study will encourage the reader to                     1215   USC § 1117
                                                                                                                              13The authors were unable to obtain data regarding the
                                                                                                                              number of false advertising claims that commence
                                                                                                                              each year.
                                                                                                                                    Act Inc. v. Brook Mays Music Co., 429 F. Supp. 2d

                                                                                                                              429, 440 (D. Mass. 2006)
                                                                                                                              1515   USC § 1117

                                                                                   Georgia IP Law Section Newsletter, Summer 2009 — Page 9
Copyright Committee Report
                                                                        ated and Bill Brewster gave the inside story.
                                                                        If you have any ideas or suggestions for future seminars, please
Chair: Philip Walden, Turner Entertainment Group                        advise the committee chair.

I  n passing the often-criticized Sonny Bono Act (aka Mickey
Mouse Protection Act) in 1998, Congress extended copyright
                                                                        The Trademark Public Advisory Committee's (TPAC) hearing in
                                                                        Washington, DC on February 20 was web cast for the first time to
                                                                        my knowledge. A transcript of the hearing is available on the
terms to the life of an author plus 70 years, and of a corporate        USPTO's website (USPTO.GOV). During the course of the hear-
author (e.g., Disney) to 120 years after creation or 95 years after     ing, I raised the Bar's discontent with the Trademark Trial and
publication. In justifying this and other extensions, Congress relied   Appeal Board's (TTAB) decisions regarding the Medinol line of
upon predictions by economists that bad things happen to works          cases in a friendly discussion with David Sams, the Chairman of
that fall into the public domain. Some economists claim that as the     the TTAB. I said that many in the Bar feel that there should be an
copyright in some valuable works expires, they will be                  intent requirement to prove fraud. I did thank the Chairman for
underexploited and their value dissipated.                              the TTAB's recent decision in which it ruled that fraud in one class
                                                                        in a multi-class registration would not taint the other classes. See
On June 16 the Copyright Committee and the Copyright Society            G&W Labs. Inc. v. G.W. Pharma Ltd., Opp. No. 91169571, 2009
hosted a luncheon featuring Paul Heald, the Allen Post Professor        TTAB LEXIS 2 (Jan. 29, 2009). For a discussion of the case,
of law at the University of Georgia. Professor Heald has been           please see Jim Johnson’s article at
instrumental in blocking term extensions in England and
elsewhere. He has spent much of his academic career exploring the       On May 13, 2009, the Trademark Trial and Appeal Board
economic assumptions of intellectual property laws, in particular       (“TTAB” or the “Board”) took the unusual step of re-classifying a
copyright terms. At the luncheon, he discussed his empirical            non-precedential opinion as precedential in Zanella, Ltd. v. Nord-
studies of early 20th century music and late 20th century films,        strom, Inc., Opposition No. 91177858 (TTAB Oct. 23, 2008).
which he believes show the conventional economic wisdom to be           Zanella addressed the question of whether the amendment of a
flawed, calling into question the rationales for copyright term         registration to remove goods for which there was never use before
extensions.                                                             a challenge to the validity of the registrations can avoid a finding
                                                                        of fraud under Medinol Ltd. v. Neurovasx, Inc., 67 U.S.P.Q.2d 1205
Many thanks to James Trigg from the Copyright Society for               (TTAB 2003). On June 9, 2009 during the public hearing of the
arranging this very insightful and thought provoking luncheon.          The Trademark Public Advisory Committee, I thanked David
                                                                        Sams for his efforts in re-classifying a non-precedential opinion as

Joint In-House and Licensing
                                                                        precedential on this important issue.

Committee Report
Chair In-House: Kevin Glidewell, Turner Broadcasting System
Chair Licensing: Andria Beeler-Norrholm, Alston & Bird
                                                                        Letter from the Incoming Chair
                                                                        Andrew Crain
                                                                        Thomas | Kayden
O      n June 25, 2009, the licensing committee and the in-house
committee co-sponsored a CLE program entitled The Intersection of
Insolvency and Intellectual Property. Matt Owens, Senior Counsel at
Solvay Pharmaceuticals, and Will Sugden of Alston & Bird LLP
                                                                        A     s the incoming IP Section chair, I am excited about the 2009-
                                                                        2010 bar year. As always, the IP Section will offer a number of
were the featured presenters. They spoke on issues associated           CLE programs and social events for members to stay current on
with the treatment of intellectual property and intellectual prop-      legal developments and to network with colleagues.
erty-related contracts in bankruptcy. The IP Section, as well as the
Copyright and In-house Committees, would like to thank the              One of the IP Section’s larger events, the IP Institute, is scheduled
speakers and all who attended.                                          for November 11-15, 2009 at the all-inclusive Paradisus Palma Real
                                                                        Resort in Punta Cana, Dominican Republic. The IP Institute will
                                                                        offer a full year worth of CLE credits for attendees and is an
Joint Trademark and Litigation                                          excellent opportunity to network with attorneys from law firms
                                                                        and corporate legal departments from all over the country during
Committee Report                                                        the CLE program and the many social events scheduled. The IP
                                                                        Section is particularly excited to have three Federal Circuit judges
Chair Trademark: James H. Johnson, Sutherland, Asbill &
                                                                        committed to attend and participate in the CLE program,
Brennan                                                                 including in a mock appellate argument session that promises to be
Chair Litigation: Wilson White, Kilpatrick Stockton                     an informative and spirited part of the program.

T    he Trademark and Litigation Committees presented a case
study of trade dress and damages in the Adidas case on May 13,
                                                                        The IP Section is also working with the Court of Appeals for the
                                                                        Eleventh Circuit, the U.S. District Court for the Northern District
                                                                        of Georgia, all of Georgia’s law schools, and the IP Section of the
2009 at the Sutherland Offices. Jim Johnson of Sutherland moder-        Atlanta Bar Association in efforts to invite the Court of Appeals

Page 10 — Georgia IP Law Section Newsletter, Summer 2009
for the Federal Circuit to sit in Atlanta in 2010. We are excited at   Bilski standard for patentable subject matter and discussed practice
this prospect of having the Federal Circuit visit Georgia, as it       pointers under the new standard. Forty-six IP Section members
would be a wonderful experience not only for the IP Section but        were in attendance for this topical and instructive program.
also for our entire legal community.
                                                                       The Patent Committee also joined forces with the American Bar
                                                                       Association’s Section of Intellectual Property Law to present a
These are just some of the things that are in the works for this new
                                                                       panel and roundtable discussion on “The KSR Standard for
bar year. As always, the IP Section welcomes your input and
                                                                       Obviousness: A Pendulum Shift to 20/20 Hindsight?” The
participation. Check us out at and contact us
                                                                       program was held on June 10, 2009 at the State Bar headquarters.
for more information or, better yet, to get involved.
                                                                       Michell G. Stockwell of Kilpatrick Stockton LLP, and Arthur A.
                                                                       Gardner of Gardner Groff Greenwald & Villanueva, PC led the
                                                                       program. Over fifty attorneys attended the program.
                                                                       Mr. Gardner and Mr. Stockwell reviewed the KSR standard of
                                                                       analyzing obviousness, the pre-KSR standards including Graham
                                                                       and the T-S-M test, the U.S. Patent and Trademark Office’s
                                                                       obviousness guidelines, and post-KSR decisions. The program
Patent Committee Report                                                was then opened for comments and discussion in a roundtable
                                                                       format, and members of the audience shared their insights and
Chair: Brad Groff, Gardner Groff Greenwald & Villanueva                strategies.
                                                                       Projects currently in the development stage include a roundtable

T    hank you to everyone who
participated in the Patent
                                                                       discussion to make proposals for revisions to the Northern
                                                                       District of Georgia’s Local Patent Rules, and possible involvement
                                                                       in preparation of an amicus brief on the challenge to the Patent
Committee’s February 6                                                 Office’s claims and continuation practice rulemaking.
“Inequitable Conduct Under
                                                                       Our Committee members are:
Current Federal Circuit Law”
program, presented with the Patent                                     Nigam Acharya (Gardner Groff)
Resources Group®. Paul Gardner                                         Benjie Balser (Thomas Kayden)
of PRG gave a dynamic and                                              Shari Corin (Kilpatrick Stockton)
informative presentation, covering                                     Karen Borelli Etheridge (Newell Rubbermaid)
the nuances of Federal Circuit                                         Joseph Gleason (Alston & Bird)
precedent on inequitable conduct.                                      Bill Isaacs (King & Spalding)
Over forty members of the State Bar                                    Rivka Monheit (Pabst Patent Group)
                                     Paul Gardner of PRG,
IP Section took advantage of the                                       Ryan Pumpian (Bryan Cave / Powell Goldstein)
60% discount we were able to work presenting on inequitable            Tremesha Willis (Buchanan Ingersoll & Rooney)
out with PRG on the registration fee conduct cases.
                                                                       Please contact Brad Groff (bgroff@gardnergroff) if you would like
for this excellent program.
                                                                       to join our committee, or if you have suggestions for programs.
The Patent Committee was also pleased to present “The
Aftermath of Bilski,” on December 9. Karen Borelli Etheridge of
NewellRubbermaid and T.J. DoVale of Ballard Spahr reviewed the

Guests at an IP Section Happy Hour included Jill Wasserman of King & Spalding (left) and summer associates from Kilpatrick
Stockton (right).

                                                           Georgia IP Law Section Newsletter, Summer 2009 — Page 11
Larson v. Aluminart: More Inequitable Conduct
Guidance from the Federal Circuit
By Michael Asam1
Fish & Richardson P.C.

W       e now have another Federal Circuit decision addressing the
materiality of office actions in related and concurrently prosecuted
                                                                          inequitable conduct finding. With a little more specificity, in
                                                                          Larson, the Federal Circuit found that office actions in co-pending
                                                                          cases with similar claims are material if they contain “an
patent applications. In Larson Manufacturing Company of South             interpretation and adverse decision by another examiner that
Dakota, Inc. v. Aluminart Products Limited, 599 F.3d 1317 (Fed. Cir.      refute the patentability of the claim limitations” that are also
2009), the Federal Circuit found that, at least under certain             present in the claims at issue. Larson, 539 F.3d at 1339, n.4. While
circumstances, office actions in related cases are material to            this guidance is helpful, whether the claim limitations are also
examination. The determination of whether the patent in question          present in the claims at issue may present a point of dispute.
in Larson is unenforceable due to inequitable conduct, however,           Second, Larson also provides some guidance on determining what
was reversed and remanded to the district court for further               is cumulative. The real lesson of Larson, however, is that if there is
determination.                                                            even a question as to whether a prior art reference or an office
                                                                          action from a related application is relevant, we should be sure to
At issue in Larson was the district court’s determination that            disclose it.
reexamined patent 6,618,998 C1 (“the ‘998 patent”) was
unenforceable due to inequitable conduct during the                       As a practical matter, what are our options for prosecution
reexamination proceeding. During the early stages of the                  practice in light of the Federal Circuit’s decisions in Larson and
reexamination of the ‘998 patent, the prosecuting attorney                McKesson? The Federal Circuit has made it clear we need to
“disclosed” two office actions that issued in a parallel continuation     disclose material office actions but has not stated how to do so. In
application (Serial No. 10/606,039, “the ‘039 continuation”) of the       Larson, the Federal Circuit indicated the prosecuting attorney
‘998 patent. However, the attorney subsequently failed to disclose        submitted an information disclosure statement disclosing the ‘039
third and fourth office actions that later issued in the parallel         Continuation and the second Office Action from the ‘039
prosecution of the ‘039 continuation. Additionally, the attorney          Continuation.3 In the information disclosure statement in
failed to disclose three references in the reexamination of the ’998      question, the prosecuting attorney provided several references on a
patent that an examiner cited in the ‘039 continuation, one of            PTO-1449 form and made the following statement:
which an examiner cited in the fourth office action.
                                                                                    Copies of the references were cited by or
The district court found the third and fourth office actions and                    submitted to the Office in related Patent
three references material and found intent to deceive because the                   Application No. 10/606,039, filed June 25,
applicant failed to disclose all five items. The district court did not             2003. Copies of the cited references are
consider intent with respect to the five items individually. The                    provided.
district court’s determination of intent based on the five items
together is important because the Federal Circuit found that the          See ‘998 Reexamination Proceeding (Control No. 90/007,223),
three references were cumulative of references submitted by the           Supplemental Information Disclosure Statement of June 10, 2005,
patentee and thus vacated the district court’s finding of intent.         at page 2. Neither the ‘039 Continuation application nor the
                                                                          second office action are listed on the PTO-1449 form, and, based
The case has been remanded to the district court for determination        on the language of the letter, the applicant did not provide a
of (1) whether intent can be found after the three references were        physical copy of the second office action to the Patent Office.
found to be cumulative and (2) if intent is found, whether                Thus, there appears to be a discrepancy between the Federal
“balancing that level of intent with the level of materiality warrants    Circuit opinion, which states that “the [prosecuting attorney] also
holding the ‘998 patent unenforceable.” Larson, 539 F.3d at 1340.         submitted a supplemental IDS on June 10, 2005, disclosing the co-
The Federal Circuit also provided a series of steps for the district      pending ‘039 Continuation, the existence of the second office action in the
court to follow in its analysis and cautioned the district court that,    prosecution of the ‘039 Continuation, and three additional references
“[d]espite Larson’s failure to expressly notify the Reexamination         cited during the prosecution of the ‘030 Continuation,” and the
Panel of the Third and Fourth Office Actions, the court should            specific language used in the information disclosure statement.
consider whether its disclosure to the Reexamination Panel of the         Larson, 539 F.3d at 1324.
parallel proceedings, nevertheless, points away from deceptive
intent and must be given weight.” Id. at 1341.                            Given this discrepancy, whether pointing to a co-pending
                                                                          application puts an examiner on notice of office actions in the co-
So, what does Larson teach patent prosecutors about the disclosure        pending application appears to remain an open question. The
of office actions from related applications? First, Larson appears to     underlying documents, i.e., the June 10, 2005 Information
reaffirm what we learned from McKesson,2 i.e., not citing office          Disclosure Statement, suggest that such a disclosure may be
actions in related cases to the patent office may lead to an              sufficient. However, the Federal Circuit’s choice of language

Page 12 — Georgia IP Law Section Newsletter, Summer 2009
referring to the disclosure of the “existence” of the second office       actions is needed to avoid potential inequitable conduct findings in
action indicates it may have been relying on a statement regarding        litigation. Simply put, we are required to disclose such information
the disclosure of the second office action from the record of the         to the examiner, although a variety of measures may be sufficient
trial court. Thus, we are left with some doubt whether inclusion          to disclose such related proceedings and potentially material office
of language similar to that above in an information disclosure            actions.
statement will satisfy the duty of disclosure.
                                                                          1The views expressed herein are solely those of the author and should neither be
One step further, without citing office actions specifically, might       construed as the view of Fish & Richardson or its clients nor be construed as legal
be to bolster the language with an indication that office actions         advice.
may be present. Such language might be along the following lines:         2McKesson   Information Solutions, Inc. v. Bridge Medical, Inc., 487 F.3d 879 (Fed. Cir.
         The examiner is invited to review related Patent                 3The first office action from the ‘039 continuation was used in the ‘998 Reexam
         Application No. ________, filed __________.                      request, so it was considered to have been previously disclosed.
         The prosecution history of this application may                  4Ifthe district court on remand finds no intent because the related application was
         contain documents the examiner finds relevant                    disclosed, some of the ideas suggested here may be in excess of what would appear
         to prosecution of the present application.                       to be required, but would certainly fulfill the duty of disclosure and reduce the
                                                                          potential of a future finding of inequitable conduct along these lines.
At an additional level of detail, the statement could also list any
office actions in the co-pending case without providing copies or
listing on a PTO-1449 form. A further option that may remove
later questions about a prosecuting attorney’s actions would be to
                                                                          Upcoming Events Calendar
use a statement similar to that above, but also to submit copies of
the office actions and list them on a PTO-1449 form. Making the           GEORGIA BAR IP SECTION EVENTS
examiner aware of the concurrent prosecution and potentially              November 11-15, 2009
relevant documents may be more practical and less expensive.              15th Annual IP Institute
However, submitting the entire file history of the related                Paradisus Palma Real, Punta Cana, Dominican Republic
application is the most conservative approach.                            More information: or
The language provided above also can be included in responses to
Office Actions. For example, applicants can remind the examiner           OTHER LOCAL IP EVENTS
of related prosecution in a paragraph prior to the concluding
                                                                          July 28, 2009
remarks with a statement similar to that described above. Adding
such statements in information disclosure statements and office           5th Annual Georgia IP Law Job Fair
action responses may help to account for all the events in the            More information:
prosecution of the related application up to the time the
statements are submitted (as evidenced by the ‘988 patent                 September 17, 2009, 12:00—1:30
prosecuting attorney’s apparent disclosure of the second office           2009 IP Legends Awards Luncheon
action in Larson using similar language).                                 Four Seasons Hotel (Midtown Atlanta)
                                                                          Honoring the Honorable Stanley F. Birch, Ted Turner, and
On remand, the district court might find intent on the part of the        Anthony Askew
patent prosecutor for his failure to update the examiner on the           More information:
new events in the related application, i.e., the third and fourth
office actions.4 Adopting a practice of continually updating an
examiner on related proceedings using filings that are otherwise          NATIONAL AND INTERNATIONAL IP EVENTS
made during prosecution, i.e., office action responses, may not be        October 15-17, 2009
a complete answer, however, because this practice could leave a           AIPLA Annual Meeting
hole at the end of prosecution that may need to be proactively            Marriott Wardman Park, Washington, D.C.
filled. Such a hole in a particular patent’s prosecution would occur      More information:
if an office action issues in a related case after an applicant’s final
communication in the present prosecution, but before the present          October 18-22, 2009
patent issues. This situation can be treated like any other material      Embrace the Education & Diversity
prior art references discovered during this time, e.g., by filing a       San Francisco Marriott, San Francisco, CA
request for continued examination and a supplemental information
                                                                          More information:
disclosure statement (if prior to a notice of allowance). If the
timing of the office action is after payment of the issue fee, the
patent might need to be withdrawn from issue to make sure the             November 11-14, 2009
office action is disclosed to the examiner.                               INTA Leadership Meeting
                                                                          Miami Beach, FL
McKesson and Larson are among the latest cases to put patent              More information:
prosecutors on notice that continually and proactively pointing
examiners to related proceedings and potentially material office          Visit for a full calendar of events.

                                                            Georgia IP Law Section Newsletter, Summer 2009 — Page 13
Mike Hobbs and Fred Hewitt tour the art gallery.
                                                           Contributing Artist Theresa Sicurezza displays
                                                           her work.

Page 14 — Georgia IP Law Section Newsletter, Summer 2009
Divided Infringement of Method Patent Claims: A Tough Sell
By Michael A. Cicero
Womble Carlyle Sandridge & Rice, PLLC1

T     wo primary types of patent claims are product claims and
method claims. A method claim recites a list of steps and is
                                                                        view of insufficient evidence that Paymentech exercised control
                                                                        over the debit networks or financial institutions involved in the
                                                                        accused process.8
infringed when a person, without permission from the patent
                                                                        In BMC Resources, the Federal Circuit openly acknowledged that its
owner, performs all of the steps recited in the claim. Where two
                                                                        “direct or control” test allowed parties to enter into arms-length
or more parties perform the steps of a method claim required for
                                                                        agreements to avoid infringement. It then stated, however, that
infringement, their actions are known as “divided infringement.”
                                                                        the effects of such agreements “can usually be offset by proper
For example, suppose that Claim 1 in a patent recites Steps A, B,
                                                                        claim drafting.”9 It observed that BMC could have drafted claims
C, D, and E, that a named Defendant only performs Steps A-C,
                                                                        with steps featuring “a single party's supplying or receiving each
and that a third party performs Steps D and E. Infringement of
                                                                        element of the claimed process.”10 The court cited to a legal
Claim 1 is “divided” between Defendant and the third party.
                                                                        article, which offered the following example to illustrate
The patent owner must overcome high hurdles to prevail against a        differences in claiming a method to secure communications
Defendant in this situation. This article discusses recent case law     between browsers and websites (with differences between Claims 1
raising the threshold for patent holders, specifies action plans for    and 2 being italicized, and omissions being shown in strikethrough
patent applicants and owners of patents less than two years old to      font):11
consider, and discusses litigation considerations.
                                                                                     Claim 1                            Claim 2
                        Recent Case Law
BMC Resources                                                             A method for negotiating a         A method for negotiating a
                                                                          secure communications ses-         secure communications ses-
In BMC Resources, Inc. v. Paymentech, L.P.,2 BMC’s patents claimed a      sion, comprising:                  sion, comprising:
method for telephonically processing debit transactions without a
personal identification number. The figure below graphically
illustrates the flow of data recited in the claimed steps.                (a) transmitting a request         (a) receiving a request from a
                                                                          to a server;                       client;

                                                                          (b) in response to the re-         (b) in response to the re-
                                                                          quest, supplying from the          quest, supplying from the
                                                                          server a server certificate, the   server a server certificate, the
                                                                          server certificate including       server certificate including
                                                                          the server’s public key;           the server’s public key;

This figure shows that the claimed method required at least three         (c) generating at the client       (c) receiving from the client a
different entities to complete an act of infringement: (1) the payee;     a unique client key and com-       unique client key and com-
(2) the remote payment network, and (3) the financial institution.        municating the unique client       municatinged the unique cli-
The defendant, Paymentech, marketed a similar system, though the          key to the server using the        ent key to the server using
parties agreed that Paymentech did not itself perform every step of       server’s public key; and           the server’s public key; and
BMC’s claimed method. In the trial court, BMC and Paymentech
both moved for summary judgment on the infringement issue.                (d) thereafter communicat-         (d) thereafter communicat-
Paymentech argued “that it did not perform all of the steps of the        ing information using a            ing information using a
patented method by itself or in coordination with its customers           crypto-algorithm that em-          crypto-algorithm that em-
and financial institutions.”3 The trial court granted Paymentech’s        ploys a derivative of the          ploys a derivative of the
motion, and on appeal, the U.S. Court of Appeals for the Federal          unique client key and the          unique client key and the
Circuit affirmed.4                                                        server’s public key.               server’s public key.
The Federal Circuit observed: “Courts faced with a divided
infringement theory have also generally refused to find liability       The author of the cited article explains that Claim 2 avoids the
where one party did not control or direct each step of the patented     divided infringement problem inherent in Claim 1, because in
process.”5 It stressed: “Direct infringement requires a party to        Claim 2, only one entity (the server) performs the recited steps.12
perform or use each and every step or element of a claimed              Additionally, that author indicates that Claim 2 itself could be
method or product.”6 The Federal Circuit also observed: “[T]he          redrafted to focus solely upon the client and not the server, which
law imposes vicarious liability on a party for the acts of another      can overcome problems associated with extraterritorial application
in circumstances showing that the liable party controlled the           of U.S. law if the infringing server is located overseas.13
conduct of the acting party.”7 Applying those standards, the
Federal Circuit upheld the finding of no infringement as proper, in

                                                           Georgia IP Law Section Newsletter, Summer 2009 — Page 15
Muniauction                                                                       “[A] contracting party is not vicariously liable for the
                                                                                  actions of an independent contractor unless that party
In Muniauction, Inc. v. Thomson Corp.,14 the patent claims were directed to
                                                                                  controls the details of the independent contractor’s work
methods for conducting municipal bond auctions over an electronic
                                                                                  to the extent that the contractor cannot perform the
network. Thomson, the accused infringer, ran a central server that
                                                                                  work as he chooses.”25
enabled many of the same auction services claimed in Muniauction’s
patent. The litigants agreed that no single party performed every step            “‘There must be such a retention of a right of supervision
of the asserted claims, and the court cited to Claim 1 of the patent, in          that the contractor is not entirely free to do the work in
which a bidder performed a data input step, with the majority of the              his own way.’”26
remaining steps being performed by the auctioneer’s system.15 At trial,
                                                                                  “The control must also ‘relate to the activity that actually
Muniauction obtained an infringement judgment against Thomson.
                                                                                  caused the injury.’”27
However, the Federal Circuit reversed, finding noninfringement as a
matter of law.16                                                              In granting summary judgment of noninfringement, the Emtel
                                                                              court, like the BMC Resources decision, pointed out that the
The Muniauction court framed the infringement issue as “turn[ing] on
                                                                              claims could have been drafted to avoid divided infringement.
whether Thomson sufficiently controls or directs other parties (e.g., the
                                                                              For instance, the court mentioned that the claimed step
bidder) such that Thomson itself can be said to have performed every
                                                                              “diagnosing a medical condition” could have been drafted to
step of the asserted claims.”17 Quoting portions of BMC Resources, the
                                                                              read: “receiving in a central medical video conferencing station a
Muniauction court elevated the vicarious liability standard to a liability
                                                                              physician’s diagnosis,” so as to focus upon the
                                                                              videoconference system provider rather than upon the
         Accordingly, where the actions of multiple parties combine to        physicians.28
         perform every step of a claimed method, the claim is directly
                                                                              Global Patent Holdings
         infringed only if one party exercises “control or direction”
         over the entire process such that every step is attributable to      Another recent district court decision demonstrates that if
         the controlling party, i.e., the “mastermind.”                       there is a divided infringement situation in which the
                                                                              complaint lacks sufficiently specific allegations of facts that
The Federal Circuit observed that Muniauction failed to articulate any
                                                                              would tend to establish the requisite level of control over the
theory under which Thomson (the auctioneer) could be held vicariously
                                                                              third party’s actions, then the plaintiff’s case might not even
liable for the actions of the bidders.18
                                                                              make it past the pleading stage.
                                                                              In Global Patent Holdings, LLC v. Panthers BRHC, LLC,29 the
In Emtel, Inc. v. Lipidlabs, Inc.,19 the plaintiff sued four                  plaintiff owned a patent (“the ‘341 Patent”) for a “Remote
videoconferencing network link providers, claiming infringement of its        Query Communication System,” and alleged that the
patent directed to a method of using videoconferencing to allow a             defendant directly infringed claim 17 of that patent by
physician at one location to communicate with another physician and a         supplying remote users “Javascript programs and html-based
patient located at a remote healthcare facility. Three of those providers     web page material.”30 The ‘341 Patent “require[d] two
moved for summary judgment of noninfringement, on the ground that             individuals or entities to complete all of the method’s steps . .
all the steps recited in the asserted claims were not performed or            . a remote computer user, and the website server.”31
controlled by one entity.20 The U.S. District Court for the Southern
                                                                              The defendant moved to dismiss the complaint for failure to
District of Texas granted that motion.21
                                                                              state a claim for infringement, because the complaint alleged
The court not only discussed BMC Resources and Muniauction, but also          neither that the defendant performed every step of Claim 17,
surveyed recent district court decisions that applied those cases, before     nor that it exercised sufficient “direction or control” over
precisely articulating the elements necessary to prove vicarious liability.   third-party “joint infringers.”32 The U.S. District Court for
Resorting to general principles of agency law, the Emtel court                the Southern District of Florida granted that motion and
announced the following legal points:                                         dismissed the case “with prejudice,” because the plaintiff
                                                                              acknowledged that any amendment of the complaint would be
    “[T]o raise a fact issue as to direct infringement under the
                                                                              futile given the court’s rulings.33
    direction-or-control standard, the alleged infringer must cause
    third parties to perform steps of the claimed method in accordance        The district court began its analysis by quoting the Supreme
    with specific instructions and requirements.”22                           Court’s 2007 decision in Bell Atlantic Corp. v. Twombly:
    “BMC Resources and Muniauction make clear that providing data to              [A] plaintiff’s obligation to provide the “grounds” of his
    third parties to perform some of the claimed steps of the patented            “entitlement to relief” requires more than labels and
    method, instructing these third parties on certain aspects of their           conclusions, and a formulaic recitation of the elements of
    performance, and facilitating or arranging for these third parties to         a cause of action will not do. Factual allegations must be
    perform the steps, generally do not establish the type of direction           enough to raise a right to relief above the speculative
    or control necessary for direct infringement.”23                              level.34
    “These cases make clear that for liability to attach, the                 Applying that standard, in light of BMC Resources and
    ‘mastermind’ must so control the third party in its performance of        Muniauction, the district court found fatal flaws in the
    the infringing steps that the third party does so as the defendant's      complaint:
                                                                                  Plaintiff has, in no way, alleged that remote users are

Page 16 — Georgia IP Law Section Newsletter, Summer 2009
     contractually bound to visit the website, it has not alleged that     patent issued again in corrected form.”45 Reissue applications can
     the remote users are Defendant's agents who visit the website         only correct “errors” of the type mentioned in the governing
     within the scope of their agency relationship nor has it alleged      statute, but such errors include “the patentee claiming . . . less than
     any facts which would render Defendant otherwise vicariously          he had a right to claim in the patent,”46 which would logically
     liable for the acts of the remote user. Using Plaintiff's analogy,    apply to divided method claims amenable to recasting. Though
     Defendant may give home users the keys to the truck, but              potentially beneficial, reissue applications carry certain risks.
     home users have no obligation to use those keys to start the          Importantly, such an application undergoes a repeated substantive
     truck and drive away.35                                               examination of the “old” claims, as well as substantive
                                                                           examination of the new ones. The entire patent can be rejected
       Patent Prosecution Action Plan to Avoid Divided
                                                                           over prior art not located during the examination of the original
                   Infringement Problems
                                                                           application.47 Additionally, unlike original applications, reissue
Pending Applications                                                       application examinations are open to the public.48 Patent counsel
                                                                           can help assess whether potential benefits of filing a reissue
For existing (or yet-to-be-drafted) patent applications, the               application outweigh the risks.
applicant should ensure that the claims, if at all possible, be cast as:
(1) product claims; (2) unitary (as opposed to divided) method              Litigation Considerations Regarding Divided Infringement
claims; and (3) system claims. Item (1) may be loosely defined as a                                 Scenarios
“machine, manufacture, or composition of matter.”36 Item (2) is a
                                                                           Before contemplating litigation, the patent owner should
method claim drafted such that all steps can be performed by only
                                                                           determine if filing a reissue application is possible and necessary
one single infringer (see “Claim 2,” supra).
                                                                           (see preceding section of this article). If filing such an application
Regarding Item (3), the “BlackBerry” litigation provides insight           is not possible or is unnecessary, then the patent owner should
into the distinction between method claims and system claims.              determine which, if any, claims in the patent avoid the divided
There, the patentee held patents claiming both an e-mail system            infringement problem. If some exist, then consideration should be
and related methods, limitations in the method claims including            given to focus any action for infringement on those claims.49
the steps of “transmitting . . . from the interface switch,”
                                                                           If the patent owner concludes that it must pursue infringement of
“receiving at the interface,” and “receiving the originated
                                                                           a claim that raises divided infringement issues, then the complaint
electronic mail at the interface.”37 The patents also recited system
                                                                           must specifically allege facts reflecting the requisite level of control
claims, a preamble for an exemplary system claim reading, in part:
                                                                           by the alleged “mastermind,” and that “mastermind” must be
“A system for transmitting originated information from one of a
                                                                           named as a defendant.
plurality of originating processors in an electronic mail system . . .
.”38 The accused wireless system for the Blackberry device used a          If the complaint can survive a dismissal motion, then detailed
relay component located in Canada.39 The Federal Circuit                   discovery can be conducted into the relationship between that
observed that under U.S. patent law, “the concept of ‘use’ of a            defendant and all third parties who performed claimed method
patented method or process is fundamentally different from the             steps, with the goal of establishing that the relationship rose to the
use of a patented system or device.”40 To infringe a method claim,         level of an agency. “Relevant discovery requests would include
the court explained, the infringer must perform every step of that         those seeking internal communications, as well as communications
claim in the United States, whereas with systems, “the components          between the third-party user and the defendant concerning what
are used collectively, not individually,” and “[t]he use of a claimed      the defendant instructed the third party to do in regard to the
system . . . is the place at which the system as a whole is put into       relevant product [or process].”50
service, i.e., the place where control of the system is exercised and
                                                                           As alternatives, or in addition to, U.S. district court litigation, the
beneficial use of the system obtained.”41 Thus, the Federal Circuit
                                                                           patent owner may consider initiating proceedings in: (1) the U.K.,
held, the Canada location of the relay component negated
                                                                           to enforce a U.K. patent obtained for reasons stated in the
infringement of the method claims, but not the system claims,
                                                                           preceding section of this article; and (2) the International Trade
which were infringed because users of the BlackBerry system were
                                                                           Commission (“ITC”), in situations involving importation of
located in the U.S.42
                                                                           infringing items into the U.S. Though a detailed discussion of ITC
Finally, a patent applicant should consider obtaining a British            proceedings is beyond the scope of this article, suffice it to say that
patent as well as a U.S. patent if it appears there are not viable         they can have certain advantages over district court litigation.51
alternatives to claiming an invention other than with a divided
method claim. In the U.K., “many of the problems with litigating
divided infringement claims in the United States may simply not            In U.S. district courts, liability for divided infringement of a
arise under U.K. law.”43                                                   method patent claim is difficult to impose and requires proof of an
                                                                           agency relationship between the “mastermind” defendant and the
Issued Patents Less Than Two Years Old: Investigate
                                                                           third party (or parties) performing the remaining steps recited in
Reissue Possibility
                                                                           the claim. Therefore, patent owners need to assess their patents to
An owner of any patent less than two years old should determine            ensure that they can rely on other types of claims in their patents,
if that patent contains divided method claims that can be recast as        and to ascertain whether they should file a reissue application if the
unitary method claims.44 If so, the owner should consider timely           patent is less than two years old, so that they may be able to recast
filing a reissue application with the U.S. Patent and Trademark            any divided method claims as unitary method claims. Alternative
Office to obtain a reissued patent with such rewritten claims. A           adjudication forums should also be considered. Such steps can
reissue application is “an application that seeks to have an existing      help the patent owner to properly prepare for any litigation that

                                                             Georgia IP Law Section Newsletter, Summer 2009 — Page 17
                                                                                              4635  U.S.C. § 251.
may arise, and in so doing maximize chances for successful
enforcement of patent rights.                                                                 475 PATENT PRACTICE at 22-43.
                                                                                              48Manual of Patent Examining Procedure § 1430 (8th ed. Rev. 3 2005).
1Mr.   Cicero is a Member at Womble Carlyle Sandridge & Rice, PLLC (“Womble
                                                                                              49Lemley et al., supra, at 279 (“Because of the many problems inherent in proving
Carlyle”), where his practice concentrates on intellectual property. The views
expressed are solely those of the author and are not necessarily the views of                 infringement of such [divided] claims, every effort should be made to minimize
Womble Carlyle or its clients, are set forth only for purposes of discussion of the           reliance on them.”).
state of the law as of the date of this article, and should not be construed as legal         50Id. at 281.
advice. Any questions concerning the application of legal principles to particular            51Id. at 280. For instance, an ITC action to block infringing imports is not subject
facts should be presented in confidence to appropriate legal counsel.
                                                                                              to certain statutory defenses that would otherwise apply in district court litigation.
2498 F.3d 1373 (Fed. Cir. 2007).
                                                                                              Kinik Co. v. Int’l Trade Comm’n, 362 F.3d 1359, 1361-63 (Fed. Cir. 2004) (defenses in
3Id., 498 F.3d at 1377.                                                                       § 271(g) of the Patent Act do not apply to ITC proceedings). For a detailed
4Id. at 1378 & 1382.
                                                                                              discussion of ITC proceedings, see L. Roberts and W. White, “Stopping Infringing
                                                                                              Goods at the Docks: An Overview of the International Trade Commission,”
5Id. at 1380 (emphasis added). Hereinafter, for subsequent case citations, all
                                                                                              Georgia Bar Journal, Vol. 14, No. 4, at 28 (Dec. 2008).
emphasis placed upon quoted text shall be understood to have been added by the
author, except where otherwise noted.
6Id. at 1378.


8Id. at 1381.


                                                                                              Interruption of Proceedings before the
11Mark A. Lemley, et. al., Divided Infringement Claims, 33 AIPLA Q.J. 255, 272-73             European Patent Office
(Summer 2005) (cited in BMC Resources, 498 F.3d at 1381).
12Lemley et al., supra, at 273.

13Id. at 273-74.

14532 F.3d 1318 (Fed. Cir. 2008), petition for certiorari filed, 77 U.S.L.W. 3412 (Dec. 22,
                                                                                              I   n the event of an applicant’s bankruptcy proceeding, it is
                                                                                              possible, and perhaps advisable, to file an interruption request in
2008).                                                                                        the European Patent Office under Rule 142 EPC. According to
15Id., 532 F.3d at 1328-29.                                                                   Rule 142, “Proceedings before the [EPO] shall be interrupted . . .
16Id. at 1330.                                                                                in the event of the applicant for or proprietor of a patent, as a
17Id. at 1329.                                                                                result of some action taken against his property, being prevented
18Id. at 1330.                                                                                by legal reasons from continuing the proceedings . . .” All costs
19No. H-07-1798, 2008 WL 4450310 (S.D. Tex. Sept. 30, 2008).
                                                                                              and actions are suspended until the proceedings are resumed.
20Id., 2008 WL 4450310, at *1.

21Id. at *28.

22Id. at *19.

23Id. at *20.                                                                                                                IP Crossword
24Id. at *23.

25Id. at *21.

26Id. (citation omitted).

27Id. (citation omitted).

28Id. at *24 (emphasis in original).

29586 F.Supp.2d 1331 (S.D. Fla. 2008).

30Id., 586 F.Supp.2d at 1333.

31Id. at 1335.

32Id. at 1333.

33Id. at 1336.

34550 U.S. 544, ___, 127 S.Ct. 1955, 1965-65 (2007) (quoted in Global Patent Holdings,

586 F.Supp.2d at 1333).
35Global Patent Holdings, 586 F.Supp.2d at 1335.

36See 35 U.S.C. § 101 (listing such categories separately from the category “process”

among inventions patentable).
37NTP, Inc. v. Research In Motion, Inc., 418 F.3d 1282, 1318 nn.14-15 (Fed. Cir. 2005).

38Id., 418 F.3d at 1298.

39Id. at 1290.

40Id. at 1317.

41Id. at 1317-18.


43Lemley et al., supra, at 280.

44There may be situations in which certain divided method claims cannot be recast

as unitary method claims. The question of whether such recasting is possible is
best addressed to patent counsel.
455 PATENT PRACTICE 22-37 (PRG 4th ed. 1989).

Page 18 — Georgia IP Law Section Newsletter, Summer 2009
IP in Pictures, News & Notes
David Kappos Nominated to
Lead Patent & Trademark

D      avid Kappos, currently vice president
and assistant general counsel for intellectual
property at IBM, is President Obama’s
nominee for Under Secretary of Commerce
for Intellectual Property and Director of
the U.S. Patent and Trademark Office.
Kappos spent his career to date at IBM,
where he managed patent and trademark            Anne Yates and Jim Johnson.                     Chad Pannell and Jaimie Anderson.
portfolios in a broad range of fields. He
also serves on the Boards of Directors of
the American Intellectual Property Law
Association (AIPLA) and the Intellectual
Property Owners Association (IPO). If
confirmed by the Senate, Kappos will
assume leadership of an office with a
backlog of more than 770,000 patent
applications and, according to many
authorities, an office with an outdated

Is Tweeting Protectable?

C      urious about Twitter and Tweeting or
are you already an addicted user? Did you
know Twitter, Inc. has filed a trademark
application to register the word TWEET as
applied to (1) telecommunication services;
telecommunications services, namely,
providing online and telecommunication
facilities for real-time interaction between
and among users of computers, mobile and          Ann Fort, Jeff Blake, and Rhett White with the Sutherland summer associates.
handheld computers, and wired and
                                                  services; providing a website on the
wireless communication devices; enabling
                                                  internet for the purpose of social
individuals to send and receive messages
                                                  networking; providing on-line computer
via email, instant messaging or a website on
                                                  databases and on-line searchable databases
the internet in the field of general interest;
                                                  in the field of social networking?
providing on-line chat rooms and
electronic bulletin boards for transmission       The application is currently under a non-
of messages among users in the field of           final rejection, so the outcome of the
general interest; providing an online             application remains to be seen.
community forum for users to share
information, photos, audio and video
content about themselves, their likes and
dislikes and daily activities, to get feedback
from their peers, to form virtual
communities, and to engage in social
networking; (2) providing on-line journals,                                                          Karen Borelli Etheridge and T.J. DoVale,
namely, blogs featuring user-defined                                                                 speakers at a Patent Committee event
content; and (3) online social networking                                                            regarding Bilski.

                                                  Georgia IP Law Section Newsletter, Winter Summer 2009 — Page 23
Letter from the Editors
By Tina Williams McKeon (Fish & Richardson) and Alison Danaceau (Carlton Fields)

I  t is hard to believe that the
summer of 2009 has already
                                                                                                                IP Institute, see
                                                                                                                Steve Wigmore steps up
arrived. We have seen quite a                                                                                   as Chair Elect, Shane
few changes in the legal arena                                                                                  Nichols becomes Vice
over the last year and are                                                                                      Chair, Philip Burrus
anxious to see what comes                                                                                       assumes the Secretary
next. The IP Section and the                                                                                    position, and Tina
Communications Committee                                                                                        McKeon steps into the
similarly have seen great                                                                                       Treasurer role.
activity over the past year but
                                                                                                                Although committee
are poised for change.
                                                                                                                positions of the IP
The IP Section hosted many                                                                                      Section are currently in
educational programs,                                                                                           flux, we plan to
teaching a cadre of attorneys                                                                                   relinquish our
a variety of IP topics from                                                                                     responsibilities as
                                Outgoing Communication Committee Co-Chairs Tina Williams McKeon and
the general to the              Alison Danaceau.
sophisticated and beyond.                                                                                       Committee Co-Chairs
The IP Section also hosted                                                                                      but maintain active roles
several well-attended and fun social networking events. We fully    within the Section. We are pleased with the quality and quantity of
expect this trend to continue as the IP Section changes leadership  substantive articles we bring to you in our farewell issue of this
for the 2009-2010 year.                                             newsletter. As always, we thank those who provided articles and
                                                                    we give a shout out to our Committee members (Bob Neufeld,
The Executive Committee of the IP Section is currently in
                                                                    Lauren Fernandez Staley, Chris Curfman, and Chris Glass).
transition. Wab Kadaba steps down as the Section Chair, and
                                                                    Without them, there would be no newsletter and no Section
Andrew Crain assumes that position. We thank Wab Kadaba for
                                                                    website. We appreciate their commitment to the Section, their
his strong leadership and dedication to ensuring that the IP
                                                                    brain power, and, especially, their patience with us.
Section provides the best quality service to its members during his
tenure, and we look forward to watching Andrew create his own       We have enjoyed our run as Communications Committee Co-
legacy as Section Chair. By the way, Andrew is off to a fast start  Chairs. We have forged many friendships in this role and maybe
with the upcoming IP Institute. (For details about the upcoming     even made a few enemies. It was worth it.

State Bar of Georgia
Intellectual Property Law Section
104 Marietta Street, NW
Suite 100
Atlanta, GA 30303

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