HOT TOPICS IN PATENT LITIGATION

1. HOT TOPICS IN PATENT LITIGATION ABA – IP Section, April 9, 2011 Committee 601 – Trial and Appellate Rules & Procedures Moderator: David Marcus Speakers: Chief Judge Paul Michel, Chief Judge James Spencer, Judge Sue Robinson, Judge Roderick McKelvie

2. Stays of Litigation Pending Reexamination • Should Litigation be stayed pending Reexamination? • Should it matter if it is an Inter-Partes Reexamination? • House Bill • Will the threshold of review on Inter-Partes Reexamination change? • Will the procedures for Ex-Parte and Inter-Partes Reexamination change? • Addition of inter partes review? • Civil action challenging validity of a claim of a patent would be automatically stayed if the civil action is filed after the inter partes review unless: • Patent owner requests to lift the stay; • The patent owner files a claim alleging the petitioner infringed the patent; or • The petitioner requests to dismiss the civil action. • This does not apply to a counter-claim of invalidity.

3. Patent Reform Bills • First inventor to file standard • Preissuance submissions by third parties • A third party may submit relevant material if: • Prior to a notice of allowance; or • Prior to the later of 6 months after the date a confidential application is published or the date of the first rejection in a reexamination. • Tax related patents • Tax strategies deemed within the prior art • Any strategy for reducing, avoiding, or deferring tax liability, shall be prior art. • Differences between the House Bill and the Senate Bill

4. Bilski • Are claims based on business method patents fading away? • House Bill • Statutory proposals relating to business method patents • Transitional post-grant review for reviewing the validity of business method patents. • Action for infringement may be brought in a judicial district: • Where the defendant has a principal place of business or is incorporated; • Where the defendant has committed acts of infringement and has a regular place of business; • Where the defendant has consented to be sued; or • For foreign defendants – in accordance with 28 U.S.C. § 1391(d).

5. KSR and Summary Judgment • Are district court judges more inclined to grant summary judgment of obviousness after KSR? • Does the clear and convincing evidence standard make it difficult to grant summary judgment of invalidity? • Should clear and convincing evidence be the standard?

6. Federal Standards of Care for Patent Lawyers • Should Federal Courts have exclusive jurisdiction over malpractice claims against patent lawyers? • Federal Circuit Cases: • Warrior Sports, Inc. v. Dickinson Wright, P.L.L.C., 631 F.3d 1367 (Fed. Cir. 2011) • Carter v. ALK Holdings, Inc., 605 F.3d 1319 (Fed. Cir. 2010). • Davis v. Brouse McDowell, L.P.A., 596 F.3d 1355 (Fed. Cir. 2010)

7. Warrior Sports, Inc. v. Dickinson Wright, P.L.L.C. • Claim: Warrior Sports, Inc. filed a malpractice action against the law firm of Dickinson Wright, P.L.L.C. for legal malpractice arising out of a patent dispute (relating to inequitable conduct charges and failure to pay maintenance fees of a patent). • Jurisdiction: Federal courts have jurisdiction under section 1338 to cases (1) in which patent law creates the cause of action and (2) in which the right to relief necessarily depends on resolution of a substantial question of federal patent law. • Holding: When ‘proof of patent infringement is necessary to show that the plaintiff would have prevailed in the underlying litigation, patent infringement is a necessary element of the malpractice claim and provides the federal court with jurisdiction under § 1338. • The Federal Circuit compared the facts of this case to Air Measurement Technologies, Inc. v. Akin Gump Strauss Hauer & Feld, L.L.P., 504 F.3d 1261 (Fed. Cir. 2007)

8. Carter v. ALK Holdings, Inc. • Claim: Count VIII – alleged a breach of fiduciary duty in violation of 35 U.S.C. et seq., 37 CFR et seq., and the Manual of Patent Examination Procedure (breach of duty was based on the representation of two inventors with conflicting interests over who the actual inventor of a patent application was). • Jurisdiction: 28 U.S.C. § 1338(a) “a district court's jurisdiction under § 1338(a) extend[s] only to those cases in which a well-pleaded complaint establishes either that federal patent law creates the cause of action or that the plaintiff's right to relief necessarily depends on the resolution of a substantial question of federal patent law, in that patent law is a necessary element of one of the well-pleaded claims.” • Holding: The Defendant’s compliance with the MPEP and CFR is a necessary element of the malpractice cause of action because the MPEP and CFR establish the fiduciary duties of the Defendant to his client, and thus, involves and substantial question of law.

9. Davis v. Brouse McDowell, L.P.A. • Claim: Malpractice claim was based on the failure to timely file three PCT applications and “other omissions.” The “other omissions” were alleged to relate to the filing of U.S. patent applications. • Jurisdiction: 28 U.S.C. § 1338(a) “jurisdiction extends to those cases in which a well-pleaded complaint establishes either that federal patent law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal patent law, in that patent law is a necessary element of one of the well-pleaded claims.” • Holding: There was federal jurisdiction over the malpractice claim because the plaintiff had to prove that she would have obtained patents on her inventions but for the negligence of the attorney. • The Federal Circuit discussed the “case-within-a-case” doctrine – that certain malpractice cases require the plaintiff to prove success in the underlying litigation.

10. Relevance of Settlement Agreements to a Reasonable Royalty • Are settlements with co-defendants relevant to a reasonable royalty? • Are related company licenses relevant to a reasonable royalty? • ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860 (Fed. Cir. 2010). • ResQNet’s damages expert used seven licenses in his calculation of a reasonably royalty. • Five of the licenses used had no relationship to the claimed invention. • The Federal Circuit held that it was legal error for the trial court not to link the licenses to the infringed patent or review the factual findings that accounted for the technological and economic differences between the licenses and the patent.

11. Compensation of Witnesses • What are the ground rules for compensating fact witnesses? • What about former employees/inventors of an opposing party?

12. Limitations on Electronic Discovery • What are reasonable limitations on electronic discovery? • Asymmetry of burden on large corporations? • Should the large corporation be forced to pay for OCR services for a small plaintiff?

13. Willful Infringement • Are decisions from the US Patent and Trademark Office in Reexaminations relevant and admissible in response to a claim for willful infringement?

14. Multiple Defendants and Multiple Claims • How are we addressing the issue of multiple defendants and multiple claims? • How many defendants are too many? • How many claims are too many? • Is the ten deposition limit reasonable with multiple defendant/multiple claim cases?