Intellectual Property - Laurence P. Colton, Kerri Hochgesang, Todd Williams, and Dana T. Hustins

• Publication year: 2010

Intellectual Propertyby Laurence P. Colton^*

Kerri Hochgesang^**

Todd Williams^**** and Dana T. Hustins^****

I. Introduction

This Article surveys caselaw developments in the area of intellectual property relevant to the Eleventh Circuit during the 2009 calendar year.¹ Intellectual property law comprises several discrete yet overlapping areas of law. The four primary areas of intellectual property law are patent law, trademark law (including areas such as domain name law and "cybersquatting"), copyright law, and trade secret law.² Because patent law and copyright law are provided for in the United States Constitution,³ cases in these areas are litigated exclusively in federal courts. Trademark law and trade secret law have both federal⁴ and state aspects, and the cases in these areas are based on federal or state law. However, the more interesting cases often are litigated in the federal courts.

The Authors have not attempted to include all cases that touch upon intellectual property but instead have selected decisions that are ofmore significance or interest or that may indicate a particular direction in the areas of law. While the cited cases often have multiple issues, the Authors have included only the more relevant or interesting intellectual property issues. As such, this Article will focus on developments selected from the federal courts that are controlling on federal courts in the Eleventh Circuit and will also discuss appropriate and interesting state law cases.

II. Patent

Following its recent yearly tradition of shaking up United States patent law, the United States Court of Appeals for the Federal Circuit, which hears all patent-related appeals, has reinterpreted the penalty that may be imposed against a patent owner for falsely marking articles as patented. As a result of this reinterpretation, greater total fines may potentially be imposed against an entity that falsely marks an article as patented. In Forest Group, Inc. v. Bon Tool Co.,⁵ the Federal Circuit issued a potentially far-reaching holding regarding the penalty provision of 35 U.S.C. Sec. 292,⁶ the patent false-marking statute.⁷ The decision in Forest Group turned on the definition of the word offense in 35 U.S.C. Sec. 292(a), which provides, "Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article, the word 'patent' or any word or number importing that the same is patented for the purpose of deceiving the public . . . [s]hall be fined not more than $500 for every such offense."⁸

The issue in Forest Group was whether every decision to falsely mark an article or group of articles, which can include a single production run of a million articles, constituted an "offense" (as the district court had held), or whether every article that had been falsely marked constituted a separate "offense."⁹ The Federal Circuit chose the latter approach for multiple reasons. First, the court noted that as a matter of statutory interpretation, 35 U.S.C. Sec. 292(a) "prohibits false marking of 'any unpatented article,' and it imposes a fine for 'every such offense.'"¹⁰ Second, the court noted that the policy considerations that informed the false-marking statute—in particular, the consideration that "[a]cts of false marking deter innovation and stifle competition in the market-place"—also supported an interpretation of "offense" on a per-article basis.¹¹ As the court stated, "These injuries occur each time an article is falsely marked. The more articles that are falsely marked the greater the chance that competitors will see the falsely marked article and be deterred from competing."¹² Finally, the court determined that a per-decision interpretation of "offense" would render the statute ineffective because it would provide insufficient deterrence against false mark- ing.¹³

The expansive "per-article" interpretation of the term offense adopted by the court in Forest Group is significant because 35 U.S.C. Sec. 292, as a qui tam statute, allows private citizens to bring suit to enforce the government's interest in preventing patent false marking.¹⁴ Thus, as the Federal Circuit acknowledged, its interpretation could give rise to a new "cottage industry" of false-marking litigation brought by "marking trolls" who have not suffered any direct harm but who stand to collect potentially massive damage awards based on the number of articles a company places into commerce with a false marking on them.¹⁵

While the potential for this type of litigation is a real concern, the Federal Circuit may soon have the opportunity to limit the reach of its Forest Group decision. Because Forest Group involved a company that falsely marked its product with patents that never covered the products at all,¹⁶ it is not yet clear whether the Federal Circuit will apply the same expansive interpretation of "offense" to cases in which a company falsely marks a product with a patent that formerly covered the product but has since expired. Of course, it makes little sense from a statutory construction standpoint to have one definition of offense for falsely marking a product with expired patents and another for falsely marking a product with patents that never covered the product at all. But from a policy standpoint, the distinction is sound because the deterrence rationale noted in Forest Group may apply less when expired patents have been falsely marked, and the sin is not necessarily one of commission but could rather be one of omission (failing to pull a product's packaging from the market as soon as one of the patents it is marked with expires). This is especially true given that 35 U.S.C. Sec. 287(a)¹⁷ requires a product to be marked for the patentee to recover damages (unless the patentee can prove that the infringer had notice of the patent).¹⁸ If products are covered by more than one patent, owners who are caught between the Scylla of 35 U.S.C. Sec. 287(a) and Charybdis of 35 U.S.C. Sec. 292(a) will have to constantly monitor and change out their inventory as various patents expire.

This issue may soon be resolved in the pending appeal of Pequignot v. Solo Cup Co.¹⁹ In Solo Cup, a company marked a product with two patents that formerly covered the product but had since expired.²⁰ Before the Federal Circuit issued its opinion in Forest Group, the United States District Court for the Eastern District of Virginia in Solo Cup held that in expiration cases the presumption of intent to deceive is weaker than when a company falsely marks a product with patents that never covered the products at all because both the possibility of actual deceit and the benefit to the false marker are diminished.²¹ Further, the district court interpreted the term offense under 35 U.S.C. Sec. 292 on a per-decision, not a per-article, basis.²² Thus, it remains to be seen how the Federal Circuit will reconcile its interpretation of offense in Forest Group with the facts of Solo Cup in the pending appeal.²³

In Abbott Laboratories v. Sandoz, Inc.,²⁴ the Federal Circuit resolved a split in its own jurisprudence regarding the test for infringement of product-by-process claims.²⁵ As the name suggests, a "product-by-process" claim is a claim in a patent directed toward the manner of making or manufacturing a particular product.²⁶ Such claims have sometimes been employed when it is difficult to describe the particular structure or composition ofa new product, such as a novel pharmaceutical compound.²⁷

At issue in the case was Abbott's patent covering its Omnicef antibiotic drug. Sandoz and other generic drug manufacturers had filed Abbreviated New Drug Applications with the United States Food and Drug Administration, seeking approval to manufacture generic versions of Omnicef. During litigation in the lower courts, Abbott asserted its product-by-process claims against the generic manufacturers despite the fact that the manufacturers used different processes to make their generic versions of the drug.²⁸

On appeal, an en banc Federal Circuit elected to resolve a split created in the early 1990s by two of its panels in Scripps Clinic & Research Foundation v. Genentech, Inc.²⁹ and Atlantic Thermoplastics Co. v. Faytex Corp.³⁰ The panel in Scripps held that a product-by-process claim was directed toward the product—not the process—and that a manufacturer was liable for infringement if it manufactured a product (by whatever method) that was equivalent to the product claimed in the patent.³¹ By contrast, the panel in Atlantic Thermoplastics held that process limitations were key limitations of any product-by-process claim and that a manufacturer was only liable if it manufactured the product using the same process as claimed in the patent.³² In siding with the panel in Atlantic Thermoplastics, the en banc Federal Circuit in Sandoz cited the patent statute and noted that a patentee was required to disclose the particular details of the invention in exchange for the monopoly grant of a patent:

In sum, it is both unnecessary and logically unsound to create a rule that the process limitations of a product-by-process claim should not be enforced in some exceptional instance when the structure of the claimed product is unknown and the product can be defined only by reference to a process by which it can be made. Such a rule would expand the protection of the patent beyond the subject matter that the inventor has "particularly point[ed] out and distinctly claim[ed]" as his invention . . . .³³

Thus, for the time being, process limitations in a product-by-process patent claim are considered key limitations on the claim, and entities will only be liable for infringement of that claim if the entity manufactures the product using the same process as claimed in the patent.

In Revolution Eyewear, Inc. v. Aspex Eyewear, Inc.,³⁴ the Federal Circuit applied the United States Supreme Court's 2007 MedImmune, Inc. v. Genentech, Inc.,³⁵ standard for exercising declaratory judgment...