October 2012

October 26, 2012, by Mandour & Associates, APC

Los Angeles – GlaxoSmithKline LLC and Teva Pharmaceutical Industries Ltd. illegally conspired to delay the entry to the market of a generic version of Glaxo’s epilepsy drug Lamictal in order to preserve the validity of Glaxo’s patent for the drug and allow Teva generic exclusivity, a union healthcare fund alleged in a new class action on Thursday.

The International Brotherhood of Electrical Workers Local 595 Health and Welfare Fund is seeking in its complaint in New Jersey federal court to represent a class of all those who purchased or paid for Lamictal-brand lamotrigine tablets from Glaxo or a generic version from Teva.

Glaxo has manufactured, marketed, and sold Lamictal tablets since 1994 for the treatment of medical conditions such as epilepsy, other seizure disorders, and bipolar disorder, as well as several off-label uses. Lamictal was a highly successful and profitable drug, but Glaxo’s patent for it expired in 2008.

In 2002 Teva filed abbreviated new drug applications with the U.S. Food and Drug Administration for approval to market generic versions of Glaxo’s Lamictal tablets. Glaxo then sued Teva alleging willful infringement of the Lamictal patent.

On the final day of a bench trial in the patent case, the judge issued a ruling invalidating the independent claim of the Lamictal patent, and said a ruling on its other three dependent claims would be issued shortly.

“Faced with the likelihood that its first effort to delay entry of generic versions of Lamictal would fail, Glaxo sought another vehicle to create delay and preserve its lucrative monopoly for as long as possible,” the complaint says. “With those goals in mind, in February 2005, it entered into purported settlement negotiations with Teva.”

The two companies entered into an allegedly anticompetitive settlement that same month, according to the union fund. Glaxo offered Teva a range of financial inducements in exchange for Teva’s agreement to settle the patent litigation in a way that preserved the validity of the Lamictal patent, while delaying Teva’s launch of its generic version, the fund says.

Teva agreed to delay launching its generic version of Lamictal until as late as July 2008, the expiration date of the patent. The settlement basically ignored the fact that Teva had already prevailed in its efforts to invalidate the primary patent claim, the fund says.

In exchange for the delay, Teva received the right to sell a limited quantity of generic Lamictal tablets beginning in June 2005.

“Glaxo and Teva guaranteed themselves supra-competitive revenues for several months, which resulted in anti-competitive overcharges paid by indirect purchasers of Lamictal tablets such as plaintiff and its beneficiaries,” the complaint says.

In the absence of the agreements, Teva would have brought its generic version to the market three years earlier, either because it prevailed in the Patent Litigation or chose to launch its generics “at risk,” the fund says. Other generic manufacturers would also have entered the market earlier, causing lower prices for generic Lamictal once Teva’s 180-day exclusivity period would have expired, it says.

October 24, 2012, by Mandour & Associates, APC

Los Angeles – The Federal Circuit on Tuesday called for more clarity in determining the proper standards with which it should weigh claim construction decisions made in the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board, with a majority panel opinion that asked for en banc review of its own decision.

The immediate case on appeal involved a bid by Flo Healthcare Solutions LLC to overturn a PTAB decision that upheld a PTO examiner’s rejection on reexamination of numerous claims of its patent for a mobile computer workstation intended for use in medical care environments. Flo originally sued Rioux Vision Inc. in Georgia federal court for infringing the patent, and Rioux initiated the reexamination proceeding that led to the current appeal.

The Federal Circuit affirmed the board’s conclusion, but got there by a different route, saying the board’s analysis was incorrect.

“Based on our review of the record, we are satisfied that the factual determinations underlying the board’s decision are supported by substantial evidence, and that the board came to the correct legal conclusions based on those facts,” the majority opinion, authored by Circuit Judge S. Jay Plager, said.

The decision, though, intentionally elided the question of the standard of review the Federal Circuit should apply to the board’s claim construction decisions, Judge Plager said.

“Whichever way this court’s review rule should be cast, and for whatever reasons, it is perhaps time that the court definitively decide en banc on an agreed review standard, one that provides clear direction to the PTO and the inventor community,” he said in additional views filed alongside the three-judge panel’s opinion.

Although the review standard may not always dictate the result, as a matter of basic law there should be one standard uniformly applied by the court to Board claim constructions, Judge Plager said.

“When, as here, there exists an unnecessary lack of clarity in our rules, I believe we have an obligation as a court to address the problem and, if possible, correct it,” Judge Plager.

One of the principal purposes behind the creation of the Federal Circuit was to provide national uniformity in patent matters, and a uniform standard for review of claim construction matters, regardless of the forum whose decision is being appealed, would be consistent with that purpose, he said.

Circuit Judge Pauline Newman agreed in her own additional views, saying that the goal of uniformity underlying the Federal Circuit’s genesis “is being undermined by a hodgepodge of procedural rulings, inferences, and presumptions that ignore the routine mechanisms of patent examination, that confound the standards of review, and that misapply the principles of administrative deference.”

“The loser is the technology community, whose incentive for innovation and commerce the patent system serves,” she said.

October 22, 2012, by Mandour & Associates, APC

Los Angeles – Samsung Electronics Co. and Apple Inc. traded fire on Friday over whether Samsung’s allegations of misconduct on the jury foreman’s part in the trial of the pair’s epic tablet and smartphone patent infringement lawsuit merits overturning the jury’s $1 billion award and holding a new trial.

Earlier in October Samsung accused jury foreman Velvin Hogan of lying about his past involvement in litigation and past ties to Samsung’s law firm, saying he failed to answer truthfully during the voir dire portion of jury selection. Samsung said the misconduct warrants at least a new trial, if not judgment as a matter of law in its favor, an assertion Apple blasted on Friday.

“Samsung fails to meet the high bar to obtain judgment or new trial on any claim,” Apple’s opposition said. “Samsung also falls far short of showing the ‘grossly excessive or monstrous’ damages ‘clearly not supported by the evidence, or based only on speculation or guesswork’ required to disturb the jury’s award.”

When asked by the court whether he was ever involved in a lawsuit, Hogan disclosed one lawsuit but failed to mention two others, including one in which his former employer Seagate Technology Inc. sued him for breach of contract after he failed to repay a promissory note, Samsung claimed.

Samsung has a “substantial strategic relationship” with Seagate, which culminated in the widely publicized 2011 sale of a Samsung division to Seagate in a deal worth $1.375 billion, Samsung said. Samsung is now the single largest direct shareholder of Seagate.

The attorney who sued Hogan on Seagate’s behalf is the husband of a partner at Quinn Emanuel Urquhart & Sullivan LLP, the law firm that is representing Samsung in the Apple litigation, according to Samsung. Samsung should have been allowed to explore those ties in questioning, it claimed.

Samsung waived its objections, though, because it knew of or could have discovered the alleged lies before the verdict, Apple said.

Samsung, meanwhile, said Friday that Apple is not entitled to the permanent injunction or additional damages it is seeking, accusing its rival of “seeking to compound an already excessive, improper jury award.”

“Apple’s motion for an injunction attempts to convert the jury’s specific infringement findings into a broad injunction that it can use to bully Samsung and third parties in an effort to stifle lawful, fair competition,” Samsung said.

In its pursuit of the injunction, Apple is seeking to deprive consumers not only of the products that Apple has accused but also unspecified other products that Apple will argue infringe or merely include a feature “not more than colorably different” from features that Apple accuses, according to Samsung.

October 17, 2012, by Mandour & Associates, APC

Los Angeles – TiVo Inc. told a Texas federal court Monday that its damages for its digital video recording technology patent infringement claims against Motorola Mobility Inc. and Time Warner Cable Inc. may amount to billions of dollars, due to the vast scope of the alleged infringement.

“Motorola’s massive production of infringing DVRs dwarfs the numbers of accused products at issue in TiVo’s previous cases, TiVo said in a reply in support of its motion to consolidate the case with a related one involving Cisco Systems for pretrial purposes.

“TiVo’s damages claim is likely to run into the billions of dollars,” the motion said. “TiVo seeks its day in court as quickly as possible under a schedule that allows this case to be fully, fairly and efficiently adjudicated.”

Adjusting the schedules in the Motorola and Cisco cases by a matter of months would serve all of those goals, the company said.

In opposing TiVo’s motion, Motorola and Time Warner are ignoring the fact that consolidation of the cases would prevent duplicative Markman hearings, depositions, document discovery and other pretrial proceedings, according to TiVo.

Motorola argued in its opposition to TiVo’s motion that it has its own patent claims against TiVo that have nothing to do with Cisco, and that the motion came too late as the judge has already split the two apart for separate proceedings. Motorola is further along in the process than Cisco, it said.

The court has expressly stated that administering both cases will allow it to coordinate them efficiently, which is precisely what TiVo is requesting in its motion, TiVo said.

“Instead of discussing the practical issues that favor consolidation, Motorola repeats its unfounded claim that TiVo is seeking to delay this case,” the reply said. “This charge is wrong and makes no logical sense.”

TiVo’s high expectations for damages are based in part on earlier multimillion dollar patent settlements to its advantage.

In September TiVo reached a deal to settle its DVR patent infringement lawsuit against Verizon Communications, under which Verizon agreed to pay $250.4 million and enter a mutual patent licensing arrangement.

The company also previously struck deals with Dish Network for $600 million and with AT&T for $215 million.

October 11, 2012, by Mandour & Associates, APC

Los Angeles – A new study has revealed that 40 percent of all patent litigation in the U.S. in the past year was filed by non-practicing entities, also known as patent trolls, which amounts to double the proportion of patent cases such entities filed five years ago.

The study, soon to be published in the Duke Law & Technology Review and made available online on Oct. 7, was authored by Robin Cooper Feldman of the University of California Hastings College of Law, Sara Jeruss of Lex Machina Inc. and Joshua W. Walker of the Intellectual Property Litigation Clearinghouse.

The study was completed at the behest of the Government Accountability Office, which Congress told in 2011 to study the effects of patent trolls on patent litigation, as part of the patent reform-minded America Invents Act. The study refers to trolls as “patent monetization entities,” or simply “monetizers.”

Such entities were also heavily represented among those filing the most lawsuits, with trolls accounting for four of the five parties who filed the greatest number of lawsuits in the last five years, the study shows.

Universities, meanwhile, which are sometimes considered non-practicing entities on the theory that they do not make any products, accounted for only a miniscule 0.2 percent of the first-named plaintiffs who filed lawsuits in the period studied. The number rises slightly when second-named plaintiffs are included, but remains quite small, the authors said.

The study also shows that cases filed by patent trolls are unlikely to advance very far in the trial process, and are often settled prior to the summary judgment phase of litigation.

“The data confirm in a dramatic fashion what many scholars and commentators have suspected: patent monetization entities play a role in a substantial portion of the lawsuits filed today,” the study says.

The study’s results are even more striking, the authors say, considering the fact that it only looked at patent infringement disputes that reached the courtroom.

“From all appearances, lawsuits filed are only the tip of the iceberg, and a major operating company may face hundreds of invitations to license for every lawsuit,” the study says. “Much of the bargaining, posturing and payment concludes without any party filing suit. Thus, one can only imagine the magnitude of the impact that patent monetization has on the patent system, and on the economy, as a whole.”

October 10, 2012, by Mandour & Associates, APC

Los Angeles – A Seattle federal judge on Wednesday denied Motorola Mobility’s bid to dismiss Microsoft Inc.’s claim seeking to hold Motorola to a reasonable and non-discriminatory license agreement to be determined by the court for a set of wireless and video standards-essential patents the companies have been feuding over.

“Without the ability to create (or at the very least enforce creation of) the very license Motorola has promised to grant, Motorola’s obligations would be illusory,” Judge James L. Robart ruled in denying Motorola’s motion for partial summary judgment. “The court finds such a result illogical and declines to adopt Motorola’s position.”

Microsoft and Motorola are both members of international standards settings organizations the Institute of Electrical and Electronics Engineers and the International Telecommunication Union.

These organizations have adopted rules related to the disclosure and licensing of essential patents, which require or encourage their members to license essential patents on RAND terms to anyone who requests a license.

The current lawsuit involves two standards, the IEEE 802.11 wireless local area network standard and the ITU H.264 advanced video coding technology standard. Motorola has submitted numerous communications to the standards setting organizations that it will grant licenses on RAND terms for the patents essential to those two standards.

Microsoft sued Motorola in 2010 claiming that Motorola was seeking unreasonable royalty rates for the patents and so was breaching its obligations to the IEEE and ITU to grant license on RAND terms. Microsoft is seeking a declaration that it is entitled to a license on RAND terms for all of the patents and a judicial accounting of a RAND royalty rate.

In its counterclaims, Motorola is seeking a judgment that it has not breached any RAND obligations and that Microsoft repudiated or rejected the benefits of Motorola’s RAND obligations, thereby sacrificing its entitlement to a license to the standards-essential patents.

Judge Robart previously ruled that Motorola’s statements to the ITU and IEEE did indeed constitute binding agreements to license its essential patents on RAND terms, and that Microsoft has a right to such a license.

“The court has already twice rejected Motorola’s contention that Motorola’s agreements with the ITU and IEEE only require it to negotiate towards a RAND license,” the judge said.

“The RAND license must eventually execute between the parties, and interminable good faith negotiation by Motorola will not uphold its end of the bargain,” he said. “As the court previously explained, any other conclusion would be contrary to the purpose of Motorola’s commitments to the IEEE and ITU, which is to ensure widespread availability to standard essential patents to all implementers on RAND terms.”

Judge Robart said he will conduct a bench trial beginning Nov. 13 to determine a RAND royalty rate, to be followed by a jury trial on Microsoft’s breach of contract claim.

October 10, 2012, by Mandour & Associates, APC

Los Angeles – The Federal Circuit said Tuesday it will convene a full en banc panel of its judges to reconsider a hotly contested three-judge panel July ruling of the appeals court upholding four financial software patents, for which the court has come under assault for allowing a too-abstract idea to receive patent protection.

On rehearing, the appeals court directed appellant Alice Corp. and CLS Bank International, which sued Alice for a declaratory judgment that its patents were invalid and unenforceable, to file additional briefs on what test the court should adopt to determine whether a computer-implemented invention is a patent ineligible abstract idea, and when, if ever, the presence of a computer in a claim lends patent eligibility to an otherwise patent-ineligible idea.

The Federal Circuit also requested more briefing on the question of whether, in assessing the patent eligibility of a computer-implemented invention, it should matter whether the invention is claimed as a method, system, or storage medium, and whether such claims should at times be considered equivalent for Section 101 purposes.

The 2-1 panel ruling in July reversed a lower court’s summary judgment order invalidating Alice’s U.S. Patent Numbers 5,970,479, 6,912,510, 7,149,720 and 7,725,375.

The majority opinion, authored by Circuit Judge Richard Linn and joined by Circuit Judge Kathleen O’Malley, held that the patents’ system, method, and media claims at issue are not drawn to mere abstract ideas but rather are directed to practical applications of invention falling within the categories of patent eligible subject matter.

The patents cover a computerized trading platform for exchanging obligations in which a trusted third party settles obligations between a first and second party so as to eliminate “settlement risk.” Settlement risk is the risk that only one party’s obligation will be paid, leaving the other party without its principal.

The July ruling set off panic in the technology sector over the patentability of abstract concepts that do not specify how to put a given invention into practice. Industry players including Google Inc., Twitter, Hewlett-Packard and Red Hat filed an amicus brief with the appeals court in support of rehearing, as did the Electronic Frontier Foundation.

The Federal Circuit panel’s majority opinion came hand in hand with a sharply worded dissent from Circuit Judge Sharon Prost.

“The majority resists the Supreme Court’s unanimous directive to apply the patentable subject matter test with more vigor,” she said. “Worse yet, it creates an entirely new framework that in effect allows courts to avoid evaluating patent eligibility under Section 101 whenever they so desire.”

October 9, 2012, by Mandour & Associates, APC

Los Angeles – The Aliso Viejo, Calif.-based drug manufacturer Avanir Pharmaceuticals Inc. filed a new patent infringement lawsuit against Impax Laboratories Inc. in Delaware federal court Monday over Impax’s proposed generic version of Avanir’s neurological disorder treatment Nuedexta.

Avanir’s U.S. Patent Number 8,277,484, titled “Pharmaceutical compositions comprising dextromethorphan and quinidine for the treatment of neurological disorders,” issued in July.

Hayward, Calif.-based Impax recently filed an abbreviated new drug application with the U.S. Food and Drug administration seeking to make and sell its own dextromethorphan and quinidine combination treatment. In connection with the ANDA filing, Impax claimed that the claims of the ’484 patent are either invalid or will not be infringed by the generic version.

Upon FDA approval of the ANDA, Impax will induce infringement of the patent and directly and contributorily infringe the patent itself, according to Avanir.

“Impax has had and continues to have knowledge that Impax’s proposed product is especially adapted for a use that infringes the ’484 patent and that there is no substantial non-infringing use for Impax’s proposed product,” the complaint says.

Avanir is asking the court to find that Impax’s ANDA and accompanying plans to make, sell and market its generic Nuedexta infringe the ’484 patent, and for an order keeping the FDA from approving the ANDA until the patent’s expiration. It is also seeking an injunction against the sale of the generic Impax product or any other infringement on the generics maker’s part, plus damages if Impax does sell the drug and the costs of the action.

Nuedexta is used to treat “emotional lability” arising from brain damage in patients suffering from strokes, head injuries and the like.

The terms emotional lability and pseudobulbar affect are used by psychiatrists and neurologists to refer to a set of symptoms that are often observed in patients who have suffered brain damage from a head injury, stroke, brain tumor, or encephalitis. The term is also used in association with those who are suffering from a progressive neurodegenerative disease such as Lou Gehrig’s disease, Parkinson’s disease, Alzheimer’s disease or multiple sclerosis.

Emotional lability is characterized by intermittent spasmodic outbursts of emotion, usually manifested as intense or even explosive crying or laughing, at inappropriate times or in the absence of any particular provocation.

October 6, 2012, by Mandour & Associates, APC

Los Angeles – The U.S. Supreme Court on Friday said it would take up a soybean farmer’s appeal of Monsanto Co.’s successful patent infringement claims against him over his use of second-generation patented herbicide-resistant seeds.

The case presents the question of how far the limits of patent infringement protection extend with regard to farmers planting the progeny of genetically altered seeds covered by U.S. patents. In September 2011 the Federal Circuit affirmed an Indiana district judge’s grant of summary judgment to Monsanto in its case against Vernon Bowman alleging infringement of U.S. Patent Numbers 5,352,605 and RE39,247E

Monsanto invented and developed technology for genetically modified “Roundup Ready” soybeans that exhibit resistance to glyphosate-based herbicides, such as Monsanto’s Roundup product. The ’605 and ’247E Patents cover different aspects of the Roundup Ready technology.

The company has marketed and sold Roundup Ready soybean seeds under its own brands since 1996, and licenses the technology to seed producers who insert the Roundup Ready genetic trait into their own seed varieties.

All sales of Roundup Ready to growers are subject to a license agreement, under which Monsanto restricts the grower’s use of the licensed Roundup Ready seed to a single commercial crop season because the patented Roundup Ready® genetic trait carries forward into each successive seed generation.

Although the express terms of the agreement forbid growers to sell the progeny of the licensed Roundup Ready seeds, or second-generation seeds, for planting, Monsanto authorizes growers to sell second-generation seeds to local grain elevators as a commodity, without requiring growers to place restrictions on grain elevators’ subsequent sales of that seed.

Commodity seeds are a mixture of undifferentiated seeds harvested from various sources, including from farms that grow Roundup Ready soybeans and those that do not. 94 percent of Indiana’s acres of soybeans planted in 2007 were planted using herbicide resistant varieties.

Bowman planted Roundup Ready seeds as his first crop in each growing season from 1999 through 2007 and, in line with the license agreement, did not save seed from his first crop during any of those years. In 1999, ne also purchased commodity seed from a local grain elevator for a late-season planting, or second crop.

Because Bowman considered the second crop to be a riskier planting, he purchased the commodity seed to avoid paying the significantly higher price for Pioneer’s Roundup Ready seed. Unlike his first crop, Bowman saved the seed harvested from his second crop for replanting additional second crops in later years. He also supplemented his second crop planting supply with periodic additional purchases of commodity seed from the grain elevator.

Monsanto investigated Bowman’s activities, and sued him in 2007 after determining that his second crop soybean seeds contained the patented Roundup Ready technology. The district court granted summary judgment of infringement in 2009 and awarded Monsanto roughly $85,000 in damages.

The Federal Circuit rejected Bowman’s argument that patent exhaustion applied to his accused second crop plantings.

October 3, 2012, by Mandour & Associates, APC

Los Angeles – Samsung Electronics Co. on Tuesday accused the foreman of the jury that handed down a $1 billion patent infringement award in favor of Apple Inc. of lying about his past involvement in litigation and past ties to Samsung’s law firm, saying the jury verdict must be scrapped in favor of a new trial.

Jury foreman Velvin Hogan failed to answer truthfully during the voir dire portion of jury selection, Samsung argued in its matter for judgment as a matter of law and a new trial.

When asked by the court whether he was ever involved in a lawsuit, Hogan disclosed one lawsuit but failed to mention two others, including one in which his former employer Seagate Technology Inc. sued him for breach of contract after he failed to repay a promissory note, Samsung claims.

Samsung has a “substantial strategic relationship” with Seagate, which culminated in the widely publicized 2011 sale of a Samsung division to Seagate in a deal worth $1.375 billion, the motion says. Samsung is now the single largest direct shareholder of Seagate, it says.

The attorney who sued Hogan on Seagate’s behalf is the husband of a partner at Quinn Emanuel Urquhart & Sullivan LLP, the law firm that is representing Samsung in the Apple litigation, acording to Samsung. Samsung should have been allowed to explore those ties in questioning, it claims.

Hogan’s public statements also suggest that he failed to answer the court’s questions truthfully in order to secure a seat on the jury, in which case bias is presumed, Samsung says.

His self-reported conduct during the jury deliberations presents the reasonable possibility that extraneous material could have affected the verdict, according to Samsung.

“Mr. Hogan’s conduct during voir dire and jury deliberations must be fully examined in a hearing with all jurors and can be cured only by a grant of new trial,” Samsung’s motion says.

Hogan, for his part, told Bloomberg News there was no misconduct whatsoever, saying the court’s instructions only required disclosure of any litigation within the last 10 years, and the Seagate case fell well outside that range.

He said he was surprised Samsung didn’t know about the litigation history given the connection to Quinn Emanuel the company cited in its motion, Bloomberg reported.

The accusations and request for a new trial come one day after Samsung asked to add the iPhone 5 to another case in its ongoing infringement war with Apple.

The California federal judge overseeing the litigation also lifted a sales ban on Monday barring Samsung from purveying its Galaxy Tab 10.1 tablet, at the direction of the Federal Circuit.

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