Virginia Patent Foundation’s Motion for Reconsideration Denied – Intervening Rights Still Absolve GE of Damages for Activities before Reexamination Certificate Issue Date

On Tuesday, Judge Moon denied Virginia Patent Foundation’s (“VPF”) Motion for Reconsideration of his decision dated November 9, 2010 in which he had granted partial summary judgment for General Electric (“GE”) based on intervening rights stemming from VPF’s amendment “in effect” of claim 1.  The effect of a reexamined patent on alleged infringers during the period prior to issuance of the reexamination certificate is governed 35 U.S.C. § 307(b) that triggers 35 U.S.C. § 252.

Judge Moon decided in his original Opinion that this statute applies because Claim 1 was “amended in effect” as a result of the statements the patent owner made in reexamination, together with its cancellation of Claim 4, which altered the scope of Claim 1.  See Opinion 43-44.

The Patent Foundation predictably took issue with Judge Moon’s interpretation of §307(b), arguing that the term “amended” in the statute requires explicit change of the wording of a claim in reexamination, and that §252 is not triggered by §307(b) because the wording of Claim 1 was never explicitly changed during the reexamination.

Judge Moon defends his interpretation by answering what he defines as an “issue of first impression” in the negative:

Whether the term “amended” limits the application of §307(b) to only explicit wording changes, as opposed to changes through other means–such as prosecution disclaimer–appears to be an issue of first impression.  No reexamination case law on this topic has been located, and the parties have supplied no definitive evidence bearing on Congress’s intent.

Judge Moon admits that there is little legislative history on §307(b), but contends that his interpretation is consistent with the House Report, which states:

Subsection 307(b) provides intervening rights similar to those provided by patent law section 252 with respect to reissued patents. Thus, a person practicing a patented invention would not be considered an infringer for the period between issuance of an invalid patent and its conversion through reexamination to a valid patent. 

(Emphasis in Opinion).   Fortel Corp. v. Phone-Mate, Inc., 825 F.2d 1577, 1579 (Fed. Cir. 1987) (quoting H.R. Rep. No. 96-1307 (1980), reprinted in 1980 U.S.C.C.A.N. 6460, 6467) (emphasis modified). Thus, Judge Moon states that although no amendment was made, “the Patent Foundation’s actions obtained the “conversion through reexamination” of the ’282 Patent to a valid patent.”

Judge Moon also finds that “[i]t is unlikely that Congress would shield infringers from liability where there has been an explicit change in claim language, but not where argument and the cancellation of a dependent claim changes the meaning of the claim.”

So, I ask again, given the above scenario, can the Court justify granting intervening rights to GE?

"Latta" Problems With H.R. 243 (False Marking)

Rep. Latta recently introduced a false marking bill, H.R. 243, in the House.  If passed, it would revise Section 292 as follows:

(a)  . . .  Whoever marks upon, or affixes to, or uses in advertising in connection with unpatented articles the word "patent" or any word or number importing the same is patented, for the purpose of deceiving the public; or

Whoever marks upon, or affixes to, or uses in advertising in connection with one or more articles the words "patent applied for," "patent pending," or any word importing that an application for patent has been made, when no application for patent has been made, or if made, is not pending, for the purpose of deceiv­ing the public --

Shall be fined not more than $500, in the aggregate, for all offenses in connection with such articles.

(b)  A person who has suffered a competitive injury as a  result of a violation of this section may bring a civil action in the appropriate district court of the United States against the person violating this section for recovery of not more than $500 in damages to compensate for the injury.

Here are my thoughts: 

H.R. 243 is effectively a repeal of the false marking statute.  ($500 cap on damages and only brought by competitors.)  Perhaps a better approach would be to simply require that a person suffer a competitive injury.  Or better yet, leave the current statute alone.  (The number of false marking claims will likely decrease over time as businesses adapt to the new reality.)

Plus, H.R. 243 basically eliminates any need for a company to be diligent about marking.   Why not mark a product with expired patent(s) and even patent(s) that do not cover the product?  It makes sense from a business, marketing, and legal perspective.  Overmark (if that's even a word) and provide notice to the world in case there is a future infringement.  If there is, then let your litigation attorneys decide whether it makes sense to argue that your products are covered by the claims.

What do you think?

Yelp! and LinkedIn Sued Over Web Profile Patent

EIT Holdings, LLC ("EIT") sued several Web 2.0 companies, including Yelp! and LinkedIn for infringing the seemingly broadest claims (40 and 41) of US Pat. No. 5,828,837.

40.          A master program module coupled to a master node and a master database for connecting information providers and user nodes for a computer network comprising:

means for registering a first-time user of the computer network;

means for receiving, through the master node, a user id and respective network address corresponding to a current user of the user node;

means for accessing from the master database user profile information corresponding to the user id;

means for transmitting to the user node, through the master node, a reference to target information corresponding to the accessed user profile; and

means for storing a user report from the user node.

41.          A method for connecting information providers and user nodes coupled to a master node and a master database comprising the steps of:

receiving through the master node a user id corresponding to a current user of the user node;

accessing from the master database user profile information corresponding to the user id and respective network address;

transmitting to the user node, through the master node, a reference to target information corresponding to the accessed user profile; and

storing a user report from the user node.

EIT chose not to assert the following independent claims: 1, 10, 11, 12-14, 21, 27-33, 42, 47-49, 54, and 55. 

Interestingly, each of these unasserted claims includes the following limitation:  a user report identifying the displayed target information and user-selected information.  Whereas, the claims in dispute do not expressly limit the phrase "user report" in the same manner.  

It appears that the meaning of the phrase "user report" will be at the center of this dispute.  

My guess, based on EIT's selection of asserted claims, is that EIT will attempt to construe this phrase broadly in order to capture the computer network system and method being used by Yelp! and LinkedIn.

However, EIT might run into difficulties.  Based on the specification, an argument can be made that the phrase"user report" in claims 40 and 41 must be interpreted to include both displayed target information and user-selected information.  From the specification:

It is further desirable to generate a report of user responses for information providers with accurate assessment of user demand to create a more attractive and dynamic network service environment.  (Col. 2, lines 15-20)

In accordance with the purpose of the present invention ... the invention provides ... a user report identifying the displayed target information and user-selected information.  (Col. 2, lines 25-54)

The user node also compiles and transmits a user report identifying the displayed target information and user-selected information.  (Col. 3, lines 3-5)

Client 122 also compiles and generates a user report containing display statistics, such as target information displayed, time and date of display, duration of display, optional request using the MORE icon, and accounting information.  (Col. 7, lines 4-8) 

Whether Yelp! or LinkedIn advances this argument will likely depend on whether they utilize a computer network system and method that stores a user's displayed target information and user-selected information.

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UPDATE - Article One Partners was on the hunt for '837 prior art.  Check it out.  In fact, the reward was pegged at $5K for the highest quality submission of prior art.  The preferred deadline for submissions passed on April 28th.  I wonder how many responses were received.  Does anybody know?  

6,269,343 Reasons Why Groupon is Sounding Like Travie McCoy

You have probably heard a lot about Google's rumored $6B acquisition of Groupon.

It has created a lot of buzz from Silicon Valley to Wall Street and everywhere in between.

Dan Butcher (associate editor at www.mobilemarketer.com) remarked that "despite the popularity of Groupon’s online and mobile platforms, the benefits of the acquisition are not immediately apparent, especially given that the business model seems easy to replicate."

However, what Mr. Butcher and others might have overlooked is one of Groupon's key assets ... U.S. Pat. No. 6,269,343 ("On-line Marketing System and Method").  The '343 claims appear broad and potentially date back to 1998, which means that it could be difficult to invalidate them with prior art. (To date, no reexamination request has been filed.)

So, if you "wanna be a billionaire", then remember to take your intellectual property issues seriously.  Without the '343 patent (and other IP rights), Groupon's business model might in fact be “easy to replicate" and we wouldn't be hearing rumors of a $6B acquisition.