Intellectual Property - Laurence P. Colton, Nigamnarayan Acharya, and John C. Bush

• Publication year: 2007

Intellectual Propertyby Laurence P. Colton^* Nigamnarayan Acharya^** and John C. Bush^***

I. Introduction

This Article surveys case law developments relevant to Georgia in the area of intellectual property during the period from January 1, 2006 to December 31, 2006. Intellectual property law comprises several discrete yet overlapping areas of law. The four primary areas of intellectual property law are patent law, trademark law, copyright law, and trade secret law.¹ Because patent law and copyright law are provided for in the united States constitution,² these decisions are based in federal law and are litigated in federal courts. Trademark law and trade secret law have both federal³ and state aspects, and the cases regarding these areas are based on federal or state law. However, the more intricate cases are often litigated in the United States federal courts.

The Authors have not attempted to include all cases that touch upon intellectual property but instead have selected decisions that are of more significance or interest or that may indicate a particular direction in these areas of law. Although the cited cases often have multiple issues, the Authors have reported only on the more relevant or interesting intellectual property issues. As such, this Article will focus on developments selected primarily from the federal courts that are controlling or binding on federal courts in Georgia.

II. Patent Cases

A. Claim Construction

Patent claims are usually in the form of a series of numbered expressions that follow the description of the invention in a patent or patent application. Patent claims define, in technical or scientific terms coupled with legal terms, the protection conferred by a patent, and they are often paramount both in patent application examination proceedings in the United States Patent and Trademark Office ("USPTO") and in litigation in the courts.

In cases involving patent infringement, the claims must be first construed to determine the metes and bounds of the patent, that is, the scope of coverage or protection of the patent.⁴ Patent claims are construed using a number of factors, and patent applicants can be their own lexicographers by defining terms in the patent or during the prosecution of the patent application in the USPTO. As will be seen, claims construction has been a dynamic area over the last year.

In Curtiss-Wright Flow Control Corp. v. Velan, Inc.,⁵ the Federal Circuit Court of Appeals ("Federal Circuit")⁶ overturned the grant of a preliminary injunction and held that the lower court had misapplied claim differentiation⁷ by interpreting the word "adjustable" too broad- ly.⁸ The lower court granted a preliminary injunction in part over the use of the term "adjustable"⁹ in two independent claims and its absence in a third independent claim, which the lower court interpreted to mean that all ranges of adjustability were covered by the patent.¹⁰ Noting that "(1) claim differentiation takes on relevance in the context of a claim construction that would render additional, or different, language in another independent claim superfluous; and (2) claim differentiation 'can not broaden claims beyond their correct scope,'" the Federal Circuit vacated the preliminary injunction.¹¹

In Conoco, Inc. v. Energy & Environmental International, L.C. ("EEI"),¹² the Federal Circuit held that a typical percentage composition range in a solution's preferred embodiment should not be read to narrow the claim.¹³ In a patent relating to gas lines, Conoco used the closed-ended term "consisting of" instead of the more open-ended transition term "comprising" in the claim language, and EEI argued that the closed term did not permit the inclusion of impurities.¹⁴ The court noted that the use of "consisting of" in the claim language did not exclude additional components that were unrelated to the invention, similar to the way that "impurities that a person of ordinary skill in the relevant art would ordinarily associate with a component" do not exclude infringement.¹⁵ Specifically, although impurities were not part of the invention as claimed by Conoco, the court held that the presence of ordinary impurities would not preclude infringement of the patent.¹⁶

In Energizer Holdings, Inc. v. International Trade Commission,¹⁷ the Federal Circuit held that a patent claim that fails to provide a proper antecedent basis to an element may not necessarily be indefinite and invalid.¹⁸ In a case before the International Trade Commission ("ITC"), Energizer alleged that various importers infringed a patent for an electrolytic alkaline battery cell by importing batteries into the United States. The ITC found that the patent was invalid for indefiniteness under 35 U.S.C. Sec. 112, paragraph 2¹⁹ because the patent claims referenced an element ("said zinc anode")²⁰ that lacked an antecedent basis.²¹ In reversing the ITC's finding, the Federal Circuit held that while the claim did not conform to accepted claim drafting practices, the claim was not indefinite as a person of ordinary skill in the art would have understood the scope of the claim.²²

From these representative cases, the Federal Circuit appears to be relying more on the patent specification to interpret the breadth and scope of the claims. As such, it is becoming even more imperative for the patent practitioner to use care to avoid limiting language when drafting a patent application.

B. Standing

As federal courts cannot grant advisory opinions under Article III of the U.S. Constitution, an actual case or controversy—standing—must exist to obtain a declaratory judgment.²³ Over the last year, several cases have examined standing for issuing a declaratory judgment in patent cases. Not surprisingly, the Federal Circuit examined cases involving standing.

In Aspex Eyewear, Inc. v. Miracle Optics, Inc.,²⁴ the Federal Circuit held that a patentee retains standing even when the patent has been exclusively licensed for a limited period.²⁵ Aspex Eyewear appealed a decision dismissing an action against Miracle Optics and Viva Optique on the ground that Aspex lacked standing to sue for infringement of a patent that had been exclusively licensed²⁶ to Chic Optic for a limited period.²⁷ While an exclusive licensing agreement can be tantamount to an assignment if it substantially conveys all of the rights in a patent (which negates standing),²⁸ the court held that the limited duration of the license agreement allowed Aspex to retain rights in the patent sufficient to have standing for a patent infringement lawsuit against a party other than the exclusive licensee.²⁹

In Microchip Technology, Inc. v. Chamberlain Group, Inc.,³⁰ the Federal Circuit held that Microchip's threats against Chamberlain's customers did not create an actual controversy for seeking a declaratory judgment.³¹ Chamberlain had threatened one of Microchip's customers with litigation but subsequently settled the matter before this litigation arose.³² The court rejected efforts to impute legal threats to one of Microchip's customers as a basis for establishing a claim for Chamberlain, who was otherwise at "patent peace" with the patentee.³³

C. Preliminary Injuction

In eBay, Inc. v. MercExchange, LLC,³⁴ the U.S. Supreme Court held that traditional equity principles must be applied in deciding whether to grant permanent injunctive relief in patent infringement cases.³⁵ In that case, the plaintiff, MercExchange, held a business method patent directed to "establishing a central authority to promote trust among participants" in an electronic marketplace.³⁶ Half.com, which later became a wholly-owned subsidiary of eBay, infringed on this patent.³⁷ The Court held that the standard for granting a permanent injunction in a patent infringement case should follow well-established principles of equity in that a plaintiff must demonstrate:

(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is

warranted; and (4) that the public interest would not be disserved by a permanent injunction.³⁸

The Court noted that in the context of copyright infringement, it has "consistently rejected invitations to replace traditional equitable considerations with a rule that an injunction automatically follows a determination that a copyright has been infringed."³⁹

Accordingly, the Supreme Court held that the lower courts, including the Federal Circuit, had erred by imposing additional criteria that cut against having these factors.⁴⁰ Specifically in this case, the Federal Circuit had imposed a general rule that a permanent injunction should follow a finding of patent infringement.⁴¹ Furthermore, the Federal Circuit had incorrectly suggested that an inventor's willingness to license the patented product should weigh against granting a permanent injunction on the inventor's behalf.⁴² Nonetheless, the Court noted that a patent was a grant of the right to exclude.⁴³ The Court modified the longstanding policy of granting a permanent injunction as a remedy to infringing on those rights; it opined that a permanent injunction should be enforced only to the extent necessary to maintain those rights and is not always necessary when monetary damages are adequate to address the infringement.⁴⁴

In PHG Technologies, LLC v. St. John Companies,⁴⁵ the Federal Circuit vacated a preliminary injunction where the district court failed to make any "explicit finding" regarding the utility of the invention in a design patent.⁴⁶ The district court granted a preliminary injunction against St. John and found that PHG was likely to succeed in proving patent infringement of two design patents covering certain ornamental designs for medical label sheets.⁴⁷ St. John initially alleged that the patents at issue were invalid because the invention was functional,⁴⁸ but on...