For more information or to register to attend the PLI Advanced Patent Prosecution Workshop click here.

To download the complete PLI workshop program guide click here.

7 a.m., Tuesday, May 8, 2012

The panel will discuss:   Taking the mystery out of IP for PE and VC firms can be a daunting task. But those who embrace IP and use IP to increase the value of their portfolio companies, are increasing their returns and set themselves apart from the competition. PE and VC firms need to know what exactly is the IP in the firms they are buying, how to evaluate that IP, and then how to develop an IP strategy for their holding companies so that it is aligned with their business strategy. The panel will discuss the pitfalls of not sufficiently protecting and evaluating your IP and how that has impacted deals for any size business.
 

WHEN: Tuesday, May 8, 2012   7:00 a.m. – 9:00 a.m.

WHERE:  Oakland Hills Country Club

3951 West Maple Road
Bloomfield Hills, MI

REGISTER: Visit the ACG website to Register

 To read complete bios on the panelists, please click here.

In Fort Properties v. American Master, the Federal Court of Appeals on summary judgment via de novo review, affirmed the district court ruling that each of the 41 method claims of United States Patent No. 6,292,788 (‘788 Patent) were invalid because those claims failed to transform the abstract investment concept into patent-eligible subject matter under 35 U.S.C. § 101. Fort Properties v. American Master, No. 2009-1242, (Fed Cir. February 27, 2012)(“American Master”).

Under 35 U.S.C. § 101, “[w]hoever invents or discovers any new and useful process … may obtain a patent.” Further, the Supreme Court in Bilski v. Kappos, 130 S. Ct. 3218 (2010)(Bilski) clarified that the machine-or-transformation test, although not the exclusive test for patentability, is a useful and important clue for distinguishing a patentable process from an abstract idea. The machine-or-transformation test provides that if a process is implemented in a particular machine or transforms a particular article then that process may be patent eligible under § 101.

Independent claim one of the ‘788 Patent recites:

“A method of creating a real estate investment instrument adapted for performing tax-deferred exchanges comprising:

aggregating real property to form a real estate portfolio;

encumbering the property in the real estate port-folio with a master agreement; and

creating a plurality of deedshares by dividing title in the real estate portfolio into a plurality of tenant-in-common deeds of at least one predetermined denomination, each of the plurality of deedshares subject to a provision in the master agreement for reaggregating the plurality of tenant-in-common deeds after a specified interval.”

Using claim one as the representative claim, the court stated that the claims require the aggregation of a number of properties into a real estate portfolio, where the property interests in this portfolio are then divided into shares (called “deedshares”) and sold to investors much in the same way that a company sells stock. American Master at *3. The court explained that the ‘788 Patent permits a master agreement to reaggregate the deedshares after a predetermined time interval to provide flexibility to deedshare owners wishing to sell their properties. Id. The court further explained that a master oversees and manages the deedshares through administrative duties, such as paying insurance, property taxes, and rents, while a “qualified intermediary” (essentially a straw man) facilitates sales and purchases of deedshares for property owners. Id.

In arguing validity, FortProperties’s position was that under Bilski the investment tool’s intertwinement with deeds, contracts, and real property transforms the abstract method into a patentable process. American Master at *10. (See also Bilski at 3223-3224, hedge fund claims were tied to the physical world through at least two tangible means: commodities and money). The court agreed with Fort Properties in that, like the claims in Bilski, the ‘788 Patent claims were tied to the physical world through tangible means (i.e. contracts and real property); however, the court further reasoned these ties are insufficient to render the abstract concept of a real estate investment tool that enables tax-free ex-changes as transformed. Id. (See also Bilski at 3223-3224, mere connections to physical world do not transform the abstract concept of hedging into patentable subject matter).

Thus, the Federal Court of Appeals concluded that because “claims 1-41 of the ‘788 patent attempt to capture unpatentable abstract subject matter, they are invalid under 35 U.S.C. § 101,” and invalided a computer method patent for claiming an abstract concept for the second time this year. American Master at *13.

Our takeaway from American Master is that the machine-or-transformation test as taught by Bilski requires more than the insertion of a tangible means to connect the abstract concept to the physical world. For more information on this pitfall and techniques to avoid computer methods being construed as abstract ideas please contact Rader, Fishman & Grauer at info@raderfishman.com. See opinion: Fort Properties v. American Master. See also Bilski Smacks Down Abstract Computer Method Patent.

In Dealertrack v. Huber, Dealertrack sued Finance Express for the alleged infringement of Dealertrack’s computer-aided method and system patent for processing credit applications over electronic networks. Dealertrack v. Huber, No. 2009-1566, -1588 (Fed Cir. January 20, 2012)(“Dealertrack”) On appeal, the Federal Court of Appeals found on summary judgment that U.S. Patent No. 7,181,427 (‘427 Patent) was invalid, as the claims were directed to an abstract idea preemptive of a fundamental concept foreclosing innovation. Independent claim 1 of the ‘427 Patent, in part, recites:

“A computer aided method of managing a credit application, the method comprising the steps of:

receiving [step A] credit application data from a remote application entry and display device;

selectively forwarding [step B] the credit application data to remote funding source terminal devices;

forwarding [step C] funding decision data from at least one of the remote funding source terminal devices to the remote application entry and display device;

wherein the selectively forwarding the credit application data step further comprises … .”

The court stated that independent claim 1, in its simplest form, includes three steps: receiving data from one source (step A), selectively forwarding the data (step B), and forwarding reply data to the first source (step C). In essence, the claim explains the basic concept of clearing information or using a clearinghouse. The court reasoned that clearing information is just like the basic concept of hedging claimed in Bilski v. Kappos, 130 S. Ct. 3218, 3231(2010), which was found to not satisfy the statutory requirements of 35 U.S.C. § 101. Thus, the court concluded that the steps of the ‘427 Patent constitute a method with no imposed meaningful limits. See In re Bilski, 545 F.3d 943, 961-962 (Fed. Cir. 2008); and see also Gottschalk v. Benson, 409 U.S. 63, 71-72 (1972)(“Benson”)).

Under this ruling, the court expressly disagreed with Dealertrack’s primary argument of the claims being limited by the “computer-aided” limitation in the preamble. The court reasoned that, although the district court construed “computer aided” as a limitation, the ‘427 Patent does not specify how the computer hardware or computer databases are specially programmed to perform the steps claimed in the patent. That is, the ‘427 Patent claims are silent as to how a computer aids the method, the extent to which a computer aids the method, or the significance of a computer to the performance of the method. Plainly, the undefined phrase “computer-aided” is no less abstract than the idea of a clearinghouse itself.

“Because the computer here “can be programmed to perform very different tasks in very different ways,” Aristocrat, 521 F.3d at 1333, it does not “play a significant part in permitting the claimed method to be performed.” Cybersource, slip op. at 19 (citing SiRF Tech., 601 F.3d at 1333). Simply adding a “computer aided” limitation to a claim covering an abstract concept, without more, is insufficient to render the claim patent eligible. See SiRF, 601 F.3d at 1333 (“In order for the addition of a machine to impose a meaningful limit on the scope of a claim, it must play a significant part in permitting the claimed method to be performed, rather than function solely as an obvious mechanism for permitting a solution to be achieved more quickly, i.e., through the utilization of a computer for performing calculations.”).” Dealertrack at *35-*36.

“The claims here do not require a specific application, nor are they tied to a particular machine. The computer here does no more than the computer in Benson to limit the scope of the claim. The process in Benson covered the use of binary-coded decimal (“BCD”) to pure binary con-version in “the operation of a train[, or the] verification of drivers’ licenses[, or the] researching [of] the law books for precedent . . . performed through any existing machinery or future-devised machinery.” [Benson,] 409 U.S. at 68. Similarly, here, the claims cover a clearinghouse process using any existing or future-devised machinery.” Dealertrack at *36.

Thus, because neither Dealertrack nor any other entity is entitled to wholly preempt the clearinghouse concept and because Dealertrack’s claims to a clearinghouse concept do not require a specific application, nor are they tied to a particular machine, the court held the ‘427 Patent to be invalid. For more information on this pitfall and techniques to avoid computer methods being construed as abstract ideas please contact Rader, Fishman & Grauer at info@raderfishman.com.  See opinion: Dealertrack v. Huber.

The new .XXX domains open up another opportunity for cyber squatters to steal and tarnish your valuable corporate brand. And whether an entity is a brand owner in the adult entertainment industry or not, anyone can now own a .XXX top level domain. 

Rader, Fishman & Grauer, in January, 2012, won one of the first Rapid Evaluation System (RES) proceedings on behalf of a significant worldwide brand owner.  In this case, the new RES proceeding favored our client (the legitimate trademark or brand owner) more so than the older, traditional Uniform Domain-Name Dispute-Resolution Proceeding (UDRP). 

But what is RES? A Rapid Evaluation System proceeding is a faster, less costly version of a UDRP.  More specifically, RES is a VERY fast process with a preliminary decision in some cases in just two days.  This relief can temporarily shut down the infringing domain, akin to a preliminary injunction.  This sort of relief is not available in a UDRP Proceeding and traditionally could only be obtained through federal court litigation.  The RES process is unique to the .XXX domain market. How fast is RES? Most cases last only 3 weeks.  In comparison, UDRP actions may be considerably longer, while federal court litigation may take months or years. If efficiency is not convincing, then the relative costs should prove valuable. RES proceedings have proven to be a minor expense when compared to the cost of traditional trademark enforcement mechanisms. Companies are complimenting the new RES process to enforce legitimate trademark rights, giving brand owners another option to thwart cyber squatters.  One day, this form of faster relief through RES may become a widely available option for other new domains and possibly for the new generic top-level domains (gTLDs).

If you discover that someone else illegitimately owns your BRAND.XXX domain, we can assess your specific case and walk you through RES and other options. For more information, please contact our expert team at info@raderfishman.com

MarTec brought suit against Johnson and Johnson, and its subsidiary, Cordis, asserting two patents related to surgical devices having a heat bonded polymeric material. The Federal Court of Appeals affirmed the district court’s summary judgment and agreed that MarcTec’s suit against Johnson & Johnson was brought in subjective bad faith and was objectively baseless, under 35 USC §285. Establishing bad faith is a two-step determination where a district court must determine whether the prevailing party has proven by clear and convincing evidence that the case is exceptional and if the case is found to be exceptional, the court must determine whether an award of attorney fees is appropriate. iLor v. Google, 631 F.3d 1372, at 8 (Fed. Cir. 2011).

During prosecution of the asserted patents, the inventor, Dr. Bonutti, distinguished his applications over several references. Specifically, Dr. Bonutti amended the claims to recite that the material bonded to the claimed implant “is non-flowable and non-adherent at room temperature and becomes flowable, tacky, and adherent upon the application of heat.” Dr. Bonutti also distinguished the claims over a reference directed to a “balloon expandable stent” by arguing that his applicants disclose an assembly for use in surgical applications I human.”

During the Markman hearing, MarcTec argued that no construction of the disputed claim terms was needed because each term had a plain and ordinary meaning. The district court rejected this argument noting that the specification “is the single best guide to the meaning of a disputed term.” The court thus found that the term “bonded” meant bonded by the application of heat. The court further found that stents were disclaimed during prosecution in order to obtain allowance.

The defendant then moved for summary judgment of noninfringment, asserting that the patents in suit require heat bonding, that the accused device is a stent (not a surgical device), and under the doctrine of prosecution history estoppel, the accused device cannot infringe the asserted claims. MarcTec responded by presenting expert testimony that spraying the polymer coating onto the accused device at nearly the speed of sound would cause an increase in temperature and therefore involve heat in the bonding process. In response to defendant’s argument that the accused device is a stent, MarcTec simply replied that the specification or prosecution history did not preclude coverage of stents.

The district court granted the defendant’s motion for summary judgment of non-infringement and MarcTec appealed. The Court of Appeals affirmed the district court’s holding. After the grant of summary judgment in their favor, the defendant file a motion to make the case exceptional under 35 USC §285. The district court held that the case was exceptional and awarded the defendant over $3.6 million in attorney fees and over $800,000 in expert fees. MarcTec appealed.

In affirming the judgment on appeal, the Court of Appeals specifically noted that the documents produced during discovery show that the accused product’s polymer coating is applied at room temperature without the use of heat; that stents were specifically disclaimed during prosecution to obtain allowance and that MarcTec turned around and asserted the patents against the same; and that MarTec mischaracterized the claim construction adopted by the court and the expert testimony did not meet the requirements for scientific reliabpatility or reliance under FRE 702. The court also explained that even though MarTec could not predict the court’s claim construction, MarTec failed to present any reasonable application of the principles enunciated in Phillips v. AWH to support is position.  The court also affirmed that MarcTec had engaged in litigation misconduct and that MarTec ignored the doctrine of prosecution history estoppel.  See opinion here.

• What is Intellectual Property (IP)?
• How is IP important to your business?
• Pitfalls of not sufficiently protecting your IP.
• Developing an IP strategy for your holding companies.
• How to align the IP strategy to your business strategy.
• Pitfalls of not doing proper IP due diligence.

When:  Tuesday, March 27th Noon – 1:00 P.M.

Where: In-person at Rader, Fishman & Grauer – 39533 Woodward Avenue, Bloomfield Hills, MI

or via Webinar. Click here to register!

Lunch will be provided for in-person seminar attendees.

The focus of this new e-publication will be the intersection of software and intellectual property law. As Mr. Bieneman noted, “There are a lot of blogs out there covering intellectual property law, and a few covering software issues, but there really isn’t much focusing on the nexus between those two.”

Mr. Bieneman explained that software patents were almost a topic unto themselves, but added “The SWIP Report is going to cover much more than that.” Mr. Bieneman plans for the new blog to cover issues ranging from protecting software to software licenses to cloud computing, with special attention to the impact on software of the traditional “Big Four” of intellectual property law: patents, copyrights, trademarks, and trade secrets. Initial posts cover software patents, software licensing issues, and concerns about cloud computing customer agreements.

“The Software Intellectual Property Report” offers a free e-mail newsletter that will be sent on a periodic basis. Anyone can sign up for the newsletter by going to http://swipreport.com and clicking on the “Subscribe” link. An RSS feed is also available.

Mr. Bieneman currently serves as 2011-2012 Chair of the State Bar of Michigan Information Technology Law Section. Prior to joining Rader, Fishman & Grauer, he was a patent examiner with the U.S. Patent and Trademark office, where he examined claimed inventions in the areas of computer software, databases, and the World Wide Web. Mr. Bieneman holds a J.D., cum laude from University of Michigan Law School, B.S. in Computer Science from University of Maryland and a Bachelor of Arts from St. John’s College in Sante Fe.

Rader, Fishman & Grauer PLLC is a national intellectual property law firm in the United States, ranking annually in the top 10 percent in the number of new patents and trademarks obtained nationwide (IP Today). The firm is a leader in intellectual property litigation and operates its high-tech courtroom. Its practice is focused exclusively on patents, trademarks, copyrights, trade secrets and associated litigation, licensing, freedom-to-use opinions and due diligence investigations. Rader, Fishman & Grauer attorneys provide intellectual property legal counsel and services globally from offices in Bloomfield Hills, Michigan; Washington, D.C.; Orange County, California; Silicon Valley, California and Tokyo.

See Charles Bieneman’s biography.