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December 2013
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Medtronic Corevalve, LLC v. Edwards Lifesciences Corp.

Medtronic CoreValve, LLC, the assignee of U.S. Patent No. 7,892,281 (“’281 patent”), appeals from the judgment of the United States District Court for the Central District of California granting summary judgment to Edwards Lifesciences Corp., Edwards Lifesciences LLC, and Edwards Lifesciences (U.S.) Inc. (collectively, “Edwards”) of invalidity of certain claims of the ’281 patent. The judgment rests on the district court’s grant of partial summary judgment that the ’281 patent is limited to a priority date of no earlier than April 10, 2003. Medtronic CoreValve, LLC v. Edwards Lifesciences Corp., No. 11-CV- 961 (C.D. Cal. Nov. 13, 2012) (Minute Order) (“SJ Order”). For the reasons set forth below, we affirm.

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Smith, Jr. v. Casey, et al.

At issue in this appeal is whether the author of a musical composition who assigned his rights in exchange for royalties may rely for purposes of standing to sue for infringement under the Copyright Act on a registration his publisher filed. Ronald Louis Smith, Jr., as representative for the estate of his late father, sued several entities with whom Ronald Louis Smith, Sr. (Smith), recorded music in the late 1970s. The estate alleged infringement of Smith’s copyright in a musical composition entitled “Spank,” along with a claim for breach of contract and a claim seeking a declaration of the validity of copyright transfer terminations the estate filed under 17 U.S.C. § 203. Concluding the estate lacked statutory standing to sue for infringement, the district court dismissed that claim and denied a motion to amend the complaint as futile. The court then concluded the declaratoryjudgment claim was not ripe and declined to exercise supplemental jurisdiction over the contract claim. Because the conclusion that the estate lacked statutory standing to sue for copyright infringement was erroneous, we reverse.

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MEDTRONIC, INC. v. MIROWSKI FAMILY VENTURES, LLC

Held:

1. The Federal Circuit did not lack subject-matter jurisdiction inthis case. Title 28 U. S. C. §1338(a) gives federal district courts exclusive jurisdiction over “any civil action arising under any Act ofCongress relating to patents,” and §1295(a)(1) gives the Federal Circuit appellate jurisdiction over any case where jurisdiction in the district court “was based, in whole or in part, on section 1338.” The Declaratory Judgment Act does not “extend” the federal courts’ “jurisdiction,” Skelly Oil Co. v. Phillips Petroleum Co., 339 U. S. 667, 671; and federal courts determining declaratory judgment jurisdiction often look to the “character” of the declaratory judgment defendant’s “threatened action,” Public Serv. Comm’n of Utah v. Wycoff Co., 344 U. S. 237, 248, i.e., whether the defendant’s hypothetical “coercive action” “would necessarily present a federal question,” Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U. S. 1, 19. Here, if Medtronic had acted consistent with the understanding of its rights that it seeks to establish through the declaratory judgment suit (by ceasing to pay royalties), Mirowski couldterminate the license and bring a suit for infringement. That suit would arise under federal patent law because “patent law creates thecause of action.” Christianson v. Colt Industries Operating Corp., 486 U. S. 800, 809. Thus, this declaratory judgment action, which avoidsthat hypothetical threatened action, also “arises under” federal patent law. See, e.g., Security-First Nat. Bank of Los Angeles v. Franchise Tax Bd. of Cal., 368 U. S. 3, 19. Pp. 4–6.

2. When a licensee seeks a declaratory judgment against a patenteethat its products do not infringe the licensed patent, the patenteebears the burden of persuasion on the issue of infringement. Pp. 6– 11.

(a) This conclusion is strongly supported by three settled legal propositions: First, a patentee ordinarily bears the burden of proving infringement, see, e.g., Agawam Co. v. Jordan, 7 Wall. 583, 609; second, the “operation of the Declaratory Judgment Act” is only “procedural,” Aetna Life Ins. Co. v. Haworth, 300 U. S. 227, 240, leaving “substantive rights unchanged,” Beacon Theatres, Inc. v. Westover, 359 U. S. 500, 509; and third, “the burden of proof” is a “ ‘substantive’aspect of a claim,” Raleigh v. Illinois Dept. of Revenue, 530 U. S. 15, 20–21. Practical considerations lead to the same conclusion. Shiftingthe burden based on the form of the action could create postlitigation uncertainty about a patent’s scope. It may also create unnecessary complexity by compelling a licensee to prove a negative. Finally,burden shifting is difficult to reconcile with the Declaratory Judgment Act’s purpose of ameliorating the “dilemma” posed by “putting”one challenging a patent’s scope “to the choice between abandoninghis rights or risking” suit, MedImmune, Inc. v. Genentech, Inc., 549 U. S. 118, 129. To the extent that the Federal Circuit’s burden shifting rule makes the declaratory judgment procedure disadvantageous,that rule recreates the dilemma that the Declaratory Judgment Actsought to avoid. Pp. 6–9.

(b) Several arguments to the contrary are unconvincing. First, Schaffer v. Weast, 546 U. S. 49, which noted the “ordinary default rule” that “plaintiffs” have the “risk of failing to prove their claims,”does not support the Federal Circuit’s conclusion. Schaffer was not a declaratory judgment case, and it described exceptions to its basic burden of proof rule. For reasons explained in this case, declaratoryjudgment suits like this one are an exception to Schaffer’s default rule. Second, the fact that the Federal Circuit limited its holding tothe circumstance where a license forecloses an infringement counterclaim by a patentee cannot, by itself, show that the holding is legallyjustified. Third, contrary to one amicus’ concern that this Court’s holding will permit licensees to force patent holders into full-blowninfringement litigation, such litigation can occur only when there is agenuine and sufficiently “immedia[te]” dispute about a patent’s validity or application, MedImmune, supra, at 127. Here, Mirowski set this dispute in motion by accusing Medtronic of infringement, and there is no convincing reason why burden of proof law should favor the patentee. General considerations relating to the public interestin maintaining a well-functioning patent system are, at most, in balance, and do not favor changing the ordinary burden of proof rule. Pp. 9–11.

695 F. 3d 1266, reversed and remanded.

BREYER, J., delivered the opinion for a unanimous Court.

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Nazomi Communications, Inc. v. Nokia Corp.

Plaintiff Nazomi Communications, Inc. (“Nazomi”) appeals from a decision of the United States District Court for the Northern District of California construing disputed claim language and granting summary judgment of non-infringement in favor of defendants Western Digital Corporation and Western Digital Technologies, Inc. (collectively, “Western”), and Sling Media, Inc. (“Sling”). We affirm.

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In re: Enhanced Sec. Research LLC

Enhanced Security Research, LLC (“ESR”) appeals from the decision of the Board of Patent Appeals and Interferences (“Board”), now the Patent Trial and Appeal Board, in an ex parte reexamination of U.S. Patent No. 6,119,236 (“the ’236 patent”). The Board affirmed the Patent and Trademark Office (“PTO”) examiner’s rejection of claims 1-5 and 7-19 as obvious. We affirm.

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In re: Giannelli

Raymond Giannelli (“Giannelli”) appeals from the decision of the United States Patent and Trademark Office (“PTO”) Patent Trial and Appeal Board (“the Board”) affirming the rejection of claims 1–25 of U.S. Patent Application 10/378,261 (Mar. 3, 2003) (the “’261 application”) under 35 U.S.C. § 103(a)1 as obvious over U.S. Patent 5,997,447 (the “’447 patent”). Ex Parte Giannelli, No. 2010-007582, slip op. at 5 (P.T.A.B. Oct. 29, 2012) (“Board Decision”). Because the Board erred in concluding that the claims of the ’261 application would have been obvious in view of the ’447 patent, we reverse.

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Proveris Scientific Corp. v. Innovasystems, Inc.

Innovasystems, Inc. (“Innova”) appeals from two final judgments of the U.S. District Court for the District of Massachusetts holding Innova in contempt of that court’s May 11, 2007 injunction and awarding sanctions in the amount of $878,205. Proveris Scientific Corp. (“Proveris”) cross-appeals the district court’s denial of sanctions for certain of Innova’s sales. Because we conclude that the district court erred in failing to construe the disputed claim language, we vacate the contempt order and remand for claim construction and renewed contempt proceedings.

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Novartis AG v. Lee

Novartis AG, Novartis Vaccines and Diagnostics, Inc., and Novartis Corporation (collectively, Novartis) filed suits that challenged the determinations by the Patent and Trademark Office of how much time to add, under 35 U.S.C. § 154(b), to the otherwise-applicable term of various Novartis patents. Of the eighteen patents before us, the district court dismissed Novartis’s claims regarding fifteen as untimely asserted. For the other three, the court rejected the PTO’s construction of the statutory provision that governs patent term adjustment here.

We affirm the district court’s ruling on timeliness as to the claims at issue, agreeing with its interpretation of § 154(b)(3) and (b)(4). As to the standards for patent term adjustment, however, we conclude that the PTO was partly correct and partly incorrect in its interpretation of § 154(b)(1)(B). The result is that, for three patents,Novartis is entitled to most, but not all, of the patent term adjustment it seeks.

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Pacific Coast Marine v. Malibu Boats, LLC

Pacific Coast Marine Windshields Limited (“Pacific Coast”) is the assignee of all rights in U.S. Patent No. D555,070 (“the ’070 patent”) for an ornamental boat windshield design. Pacific Coast brought suit against Malibu Boats, LLC, Marine Hardware, Inc., Tressmark, Inc., MH Windows, LLC, and John F. Pugh (collectively “Malibu Boats”) in the Middle District of Florida, alleging infringement. The district court granted Malibu Boats’ motion for summary judgment of non-infringement, finding that prosecution history estoppel barred the infringement claim. Pacific Coast appeals. We hold that the principles of prosecution history estoppel apply to design patents, but reverse the district court’s summary judgment of non-infringement because the accused infringing design was not within the scope of the subject matter surrendered during prosecution, and remand for further proceedings.

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Inhale, Inc. v. Starbuzz Tobacco, Inc.

Affirming the district court’s grant of summary judgment and award of attorneys’ fees in favor of the defendant, the panel held that the shape of a hookah water container was not entitled to copyright protection.

The panel held that the hookah water container, a useful article, was not copyrightable because it did not incorporate sculptural features that could be identified separately from, and were capable of existing independently of, the container’s utilitarian aspects. Adopting the reasoning of the Copyright Office, the panel held that whether an item’s shape is distinctive does not affect conceptual separability.

The panel also held that the district court did not abuse its discretion in awarding attorneys’ fees to the defendant under 17 U.S.C. § 505. The panel awarded attorneys’ fees for the appeal in an amount to be determined by the district court.

Concurring in part, Judge Bea wrote that he concurred with the majority’s opinion, except for the part of Part II.C that discusses the level of deference owed to the Copyright Office’s interpretations of the Copyright Office. Judge Bea wrote that because the statute was not ambiguous, it was unnecessary to look to the Copyright Office for further guidance.

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