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Douglas Panzer
May 7, 2015

Software Patents with Means-Plus-Function Claims Must Disclose Algorithm

Software patents are a challenging field these days.  The big news of late has been the effect of the Supreme Court’s June 2014 ruling in Alice v. CLS Bank, which has caused many patents — especially in the business method and software realms — to fall into the category of unpatentable abstract ideas.  A decision this week by the Court of Appeals for the Federal Circuit — the court tasked with all federal patent appeals — further illustrates the stringent requirements for software patents and the danger of claiming software inventions in the means-plus-function form permitted under the Patent Act.

In a decision yesterday, May 6th, 2015, the CAFC affirmed a lower court decision invalidating a patent asserted by plaintiff EON Corp. IP Holdings, LLC against AT&T Mobility, Sprint, HTC, Qualcomm and Wirefly.

The Patent Act permits patent claims to be written in so-called “means-plus-function” language. 

Section 112, paragraph 6 states that:

An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.

35 U.S.C. § 112 ¶ 6.

That is, the claim may say “a means for <doing some function>” without specifying in the claim what the means is.  In order to properly achieve patentability, however, the patent’s specification must detail a structure corresponding to the claimed function.  Essentially, the specification has to disclose a means.  If it fails to do so, the patent does not fully teach one of skill in the art how to implement the invention and is indefinite (therefore invalid).

In this case, the CAFC reminded us that while some inventions are amenable to the disclosure of a physical structure, “[i]t is well-established that the corresponding structure for a function performed by a software algorithm is the algorithm itself.”  In this case it was also “uncontested that the only structure disclosed in the ’757 patent is a microprocessor,” not the algorithm.

EON, despite admitting the lack of structure, attempted to save its case and its patent.  The court summarized: “EON relies on an exception to the algorithm rule created in In re Katz Interactive Call Processing Patent Litigation, 639 F.3d 1303 (Fed. Cir. 2011). Katz held that a standard microprocessor can serve as sufficient structure for ‘functions [that] can be achieved by any general purpose computer without special programming.’ Katz, 639 F.3d at 1316. In Katz, claim terms involving basic ‘processing,’ ‘receiving,’ and ‘storing’ functions were not necessarily indefinite because a general purpose computer need not ‘be specially programmed to perform the recited function.’ Id. However, other claim terms involving conditionally coupling calls were indefinite because those functions required special programming.”

The court called the Katz exception a “narrow” one and wrote, “it is only in the rare circumstances where any general-purpose computer without any special programming can perform the function that an algorithm need not be disclosed.”  This case was not that rare circumstance.

The message to patent attorneys and those seeking software patents is clear.  If claiming software in means-plus-function form, the actual algorithm must be disclosed in the specification.  Patent attorneys should not rely on the general microprocessor exception as even the simplest control structures, such as an if-statement, may cause the algorithm to fall outside of the very narrow general purpose computer exception.

April 9, 2015

DietGoal Patent is Abstract Under Alice, Bravo!

Posted By Douglas Panzer @ 10:33 am
Filed under: Alice,Eligibility,Patent Litigation

THIS CAUSE having been heard and considered, it is
PER CURIAM (DYK, MAYER, and REYNA, Circuit Judges).
AFFIRMED. See Fed. Cir. R. 36.

That’s all she wrote.  Literally.  So read the entire order of The Court of Appeals for the Federal Circuit yesterday affirming the Southern District of New York’s summary judgment determination that a patent owned by seeming patent troll DietGoal represents an abstract idea, unpatentable under Section 101.  This can’t bode well for DietGoal’s dozen or so other suits against website owners and app producers.  The patent in suit is the latest to fall to the Supreme Court’s Alice standard.

The Abstract of the ’516 patent, while not determinative of the scope of the patent, certainly couldn’t have helped the plaintiff’s cause.  It reads:

The method can include the following steps. First, the Meal Database and the Food Database can be prepared. Second, the user can use the Picture Menus to choose meals for a particular time period to correspond to a customized eating plan. Third, the user can decide whether or not to change one or more of the meals he has chosen for the particular time period. If the user decides to change his chosen meals, the user can edit or create new meals using the Meal Builder. If the user decides not to change his choices, or after the user changes his choices, the user can save the meals for the particular time period.

So…yeah.  Make a list of meals (with pictures), pick one or more of those meals that you like and either change them or save them.  That’s some innovative stuff right there.  Judge Engelmayer of the Southern District of New York didn’t think so either, opining on summary judgment that “[t]he claims of the ’516 patent recite nothing more than the abstract concept of selecting meals for the day, according to one’s particular dietary goals and food preferences.”  This suit, filed in 2012, likely would never have made it to court post-Alice.

March 24, 2015

Breaking News: Supreme Court Says TTAB Finding of Confusion Can Bar Litigation of Same Question

Posted By Douglas Panzer @ 11:46 am
Filed under: Likelihood of Confusion,Litigation,Registration,Trademarks,TTAB

The 18-year trademark dispute in B&B Hardware, Inc. v. Hargis Industries, Inc. has been decided by the Supreme Court in an opinion issued this morning (case 13-352).  The Court summarized the facts as follows:

Respondent Hargis Industries, Inc. (Hargis), tried to register its trademark for SEALTITE with the United States Patent and Trademark Office pursuant to the Lanham Act. Petitioner, B&B Hardware, Inc. (B&B), however, opposed registration, claiming that SEALTITE istoo similar to B&B’s own SEALTIGHT trademark. The Trademark Trial and Appeal Board (TTAB) concluded that SEALTITE should not be registered because of the likelihood of confusion. Hargis didnot seek judicial review of that decision.Later, in an infringement suit before the District Court, B&B argued that Hargis was precluded from contesting the likelihood of confusion because of the TTAB’s decision. The District Court disagreed.The Eighth Circuit affirmed, holding that preclusion was unwarranted because the TTAB and the court used different factors to evaluate likelihood of confusion.

In a ruling that seems surprising at first blush, the Supreme Court held “[s]o long as the other ordinary elements of issue preclusion are met, when the usages adjudicated by the TTAB are materially the same as those before a district court, issue preclusion should apply.”

This holding therefore permits issue preclusion before an Article III court to be based upon a finding by an administrative agency of the executive branch.  The majority thoroughly and carefully explained that this was appropriate based on the “straightforward” idea that “once a court has decided an issue, it is forever settled as between the parties.”  Citing the Restatement of Judgments, the Court explained further that the precluded issue need not be raised in two courts, but also “where a single issue is before a court and an administrative agency, preclusion also often applies.”

The Court’s opinion dealt with several technical issues, including the fact that Hargis did not advance an argument that giving issue preclusive effect to an administrative decision would be unconstitutional.  Rather, Hargis based its argument on a narrow construction of the Lanham Act.  Nonetheless, the Court did away with any Constitutional question, mentioning that “the Court has already held that the right to a jury trial does not negate the issue preclusive effect of a judgment, even if that judgment was entered by a juryless tribunal. See Parklane Hosiery Co. v. Shore, 439 U. S. 322, 337 (1979).”

The majority opinion summarized its reasoning:

The real question, therefore, is whether likelihood of confusion for purposes of registration is the same standard as likelihood of confusion for purposes of infringement. We conclude it is, for at least three reasons. First, the operative language is essentially the same; the fact that the registration provision separates “likely” from “to cause confusion, or to cause mistake, or to deceive” does not change that reality.3 See 2 Gilson §5.01[2][a], at 5—17 (explaining that “the same statutory test” applies). Second, the likelihood-of-confusion language that Congress used in these Lanham Act provisions has been central to trademark registration since at least 1881. See Act of Mar. 3, 1881, ch. 138, §3, 21 Stat. 503 (using a “likely to cause confusion” standard for registration). That could hardly have been by accident. And third, district courts can cancel registrations during infringement litigation, just as they can adjudicate infringement in suits seeking judicial review of registration decisions. See 15 U. S. C. §1119; 3 McCarthy §21:20.

While seemingly well-reasoned and thorough in its analysis, Justice Thomas writes in his dissent, “[t]he majority does not address the distinction between private rights and public rights or the nature of the power exercised by an administrative agency when adjudicating facts in private-rights disputes. And it fails to consider whether applying administrative preclusion to a core factual determination in a private-rights dispute comports with the separation of powers.”

The 7-2 decision firmly establishes that TTAB findings of likelihood of confusion can bar litigation of the same question in federal court and no separation of power question exists.

Opinion [PDF]: 13-352_B&B Hardware v Hargis SCOTUS

March 13, 2015

Large Attorney’s Fees Award in Patent Case Threatens National Security

Posted By Douglas Panzer @ 12:14 pm
Filed under: Attorney's Fees,Litigation,Patent Litigation

You gotta hear this one!  In the ongoing saga of Kilopass v. Sidense, a patent infringement case in the Northern District of California.  Kilopass brought the suit alleging infringement of three patents, false advertising, disparagement, intentional interference…the kitchen sink.  Through several rounds of motions, the claims were all eventually dismissed and the dismissal affirmed by the Federal Circuit.  Sidense moved for its attorney’s fees, asking for over $5 million (and a bump to $9 million based on a contingency bonus clause in its fee agreement).

Arguing against the fee assessment, Kilopass actually filed a brief arguing that faced with such a large fee award, ”Kilopass (a) would go bankrupt, (b) it would no longer be able to fulfill contracts with defense contractors, (c) these contractors would not be able to find adequate substitutes, and (d) this would in some way – which Kilopass has failed to articulate – result in harm to our nation’s safety.” Yes, they really made that argument.  The fee award against them would be a threat to national security.  A hail Mary if ever there was one.

As the judge said…the court was not persuaded.  Fee award for $5.3 million.

PDF of the Order Here: Kilopass v Sidense Attorney’s Fees Order

March 6, 2015

Hall & Oates Go All Maneater on Haulin’ Oats Cereal Maker Over Trademark

Posted By Douglas Panzer @ 11:56 am
Filed under: Music,Offbeat,Trademarks

Lawyers on behalf of Darryl Hall and John Oates filed a complaint in federal district court in New York on Wednesday alleging trademark and service mark infringement, as well as unfair competition against Brooklyn, NY company Early Bird Foods & Co., LLC, based on the latter’s marketing and sale of (exorbitantly expensive) granola under the brand name “Haulin’ Oats.” One interesting part in all of this is that Hall and Oates aren’t just suing Early Bird because the company came up with a (semi-)creative, but unauthorized play on the singers names. No, Hall and Oates’ business entity, Whole Oates Enterprises, actually owns a federally registered trademark in the phrase “Haulin’ Oats” (U.S. Reg. No. 4345444). “This mark was assigned to Whole Oats in 2014 by a Monterey, California/Nashville, Tennessee cereal entrepreneur who appears to have been the first to go to market with the witty breakfast brand. According to the complaint against Early Bird, Whole Oats “entered into a business relationship [in 2014] whereby Haulin’ Oats assigned to Whole Oats its trademark and service mark rights in and to the mark HAULIN’ OATS (including the United States Trademark and Service Mark Registration identified above) and [Whole Oats] granted a royalty-based license back to Haulin’ Oats.”

So, everybody thought this was just about Hall & Oates protecting their music-related brand. Nope – they actually are in the cereal business. Who knew?!

I almost forgot to throw in the musical puns:

Hall & Oates say “I can’t go for that” over competing cereal brand…

Hall & Oates hope you say “your grits are on my list”…

Cereal maker trying to trade off the Hall & Oates name - say it isn’t so…

Read the complaint here: Whole Oats v Early Bird Complaint

February 20, 2015

Frozen Copyright Suit is a Bit of a Fixer-Upper

Posted By Douglas Panzer @ 1:19 pm
Filed under: Copyrights,Movies

Actually, it’s beyond fixing. But let me back up.

I frequently receive calls, questions or comments claiming that famous creative works infringe the copyright in a lesser known work. Whether it’s a Katy Perry song, a Stephen King book or a Disney movie, others frequently believe they are entitled to some credit (and compensation) for the origination of the idea behind the famous creative work. And therein lies the most widely held misunderstanding of copyright law; that the idea itself may be protected at all.

“It is a fundamental premise of copyright law that an author can protect only the expression of an idea, but not the idea itself.”

See Kay Berry, Inc. v. Taylor Gifts, Inc., 421 F.3d 199, 208 (3d Cir. 2005).

On Thursday, a New Jersey federal district court dismissed a copyright suit brought by self-published author Isabella Tanikumi against Disney, which alleged that Disney’s mega-huge-ginormous hit movie Frozen was a ripoff of Tanikumi’s book Yearnings of the Heart. Barring some massive lapse of legal understanding by the court, the case was doomed from its inception.

Tanikumi alleged such similarities between the two works as the love between two sisters, one of the sister’s love for a “dark haired tall and fair man,” and themes of love under the moonlight. These themes are precisely that – themes. However, copyright law protects actual creative expression of themes; not the themes themselves. We call this the “idea-expression dichotomy.”

In dismissing the case, Judge Martini wrote that “Plaintiff only alleges that Disney plagiarized broad thematic elements of her memoir…The themes that both appear in Frozen and Yearnings of the Heart are expressed in vastly different ways. The setting, plot, and characters have no close similarities. No lay person could find that Disney improperly appropriated from Yearnings of the Heart because copyright law does not protect the generic, thematic elements of Tanikumi’s work.” The works may share ideas, but the do not express those ideas in the same way.

So, chalk this one up to an easy read for the court and a reminder to all that copyright protects original expression – not ideas.

Read the original opinion here:

Frozen Opinion: Tanikumi v. The Walt Disney Company, Civ. No. 14-5877

January 29, 2015

Business Flexibility in Trademark Licensing as Taught by Taylor Swift

Posted By Douglas Panzer @ 4:27 pm
Filed under: Licensing,Music,Registration,Trademarks

Website Vox.com reported on January 28 (with a citation to Twitter user @imbeccable) that Taylor Swift has filed an application to register the trademark “This Sick Beat.” What most don’t know is this is just another step in Swift’s clearly well-advised operation of her growing business empire.

Swift presently has 100 live trademark registrations or applications (and a few dead ones). The marks even include registrations in 19 different classes for the name “Taylor Swift” or a stylized version of the name.

So why is this worthy of an intellectual property law blog entry? There is actually a good business lesson to be learned here.

From a legal practice note perspective, it’s interesting that Swift’s attorneys chose to file a separate application for each class of use for each mark. While not necessary, this certainly provides a very convenient mechanism – despite the initial data entry – for record keeping relating to, and potential licensing or assignment of, any of the individual registrations. The use of, for example, “Taylor Swift Fearless” could be easily licensed to one manufacturer by reference to the 3966410 registration, without any confusion regarding the right to use the mark on other classes of goods, while another manufacturer could be licensed to use the same mark on posters by reference to the 3966409 registration. Similarly, cancelation, abandonment, opposition or any other legal event affecting the registration itself remains contained to the individual registration.

And in case you’re wondering, registration and renewal fees would be the same whether filed as one application with multiple classes, or multiple registrations, each for a single class. Pretty good lawyering you got there, Taylor.

In case you’re curious, here are Taylor Swift’s current registrations and pending applications:

Taylor Swift Trademarks

Taylor Swift Trademarks

Taylor Swift Trademarks

Taylor Swift Trademarks

Taylor Swift Trademarks

(h/t Gretchen Geisser for cueing up this topic.)

Trade Secrets: It’s All About the Bacon…’Bout the Bacon

Posted By Douglas Panzer @ 3:49 pm
Filed under: Litigation,Patents,Risk Management,Trade Secrets

The court set the stage on the technology:

Unitherm developed what it called the “Unitherm Process” for preparing pre-cooked sliced bacon. This process involved the use of a spiral ovens [sic] and super-heated steam. According to Unitherm, before it developed this process, there was no acceptable process for pre-cooking sliced bacon because all attempts had resulted in bacon that did not resemble a pan-fried product.

The relationship between the parties appears to have been a bit of a soap opera from the start. Unitherm, which claimed that its process was a trade secret, met with Hormel in June 2007, to discuss a potential business deal between the two companies regarding the process. No signed NDA was provided in court as evidence, but Hormel did not dispute the claim that one was signed around July 20, 2007. Of course, Unitherm also claimed that Hormel disclosed some Unitherm confidential information to a Unitherm competitor (FMC Technologies) at some point between the June meeting and the July 20 NDA. Hormel claimed to have remedied that situation and the parties entered into a joint development agreement in September 2012, despite the early hiccup.

Despite Unitherm’s position that its process was a confidential trade secret, the company filed a patent application on the process in January 2008, which published in due course in July of 2009. In April 2010, Hormel terminated the joint development agreement with Unitherm and less than 5 months later filed its own patent application on the process. After the Hormel patent application published, Unitherm sued Hormel alleging, among other counts, that Hormel misappropriated Unitherm’s trade secrets (under Minnesota law).

On Hormel’s motion to dismiss, the court dealt Unitherm the harsh reality of Trade Secret 101:

“[I]t is axiomatic that a thing patented cannot also remain a secret.”

In order for information to constitute a trade secret, it must be kept secret. As a quid pro quo for patent protection, one must publish a specification detailing the process to be patented. Unitherm published the information it claimed constituted its trade secret. The court, therefore, held that any activity regarding the supposed trade secret information after the July 2009 date of publication could not constitute misappropriation of a trade secret since no trade secret remained. In the court’s words: “The publication of the patent means that Unitherm no longer had a trade secret in the Process, and its misappropriation claim fails.”

While the full details of this particular story contain significant additional complexities, the lesson is pretty simple – trade secrets must be kept strictly confidential or they will be lost, period.

Plaintiff: Unitherm Food Systems, Inc.
Defendants: Hormel Foods Corporation; Hormel Foods Corporate Services, LLC
Decision Date: January 27, 2015
Case Number: Civ. No. 14-4034 (D.Minn.)

Unitherm-v-Hormel-Trade-Secret-14-4034 (Opinion on Motion to Dismiss)

October 30, 2014

26-Judge Judicial Conference Makes Recommendations to Control Litigation Costs

Posted By Douglas Panzer @ 10:28 am
Filed under: Discovery,E-Discovery,Litigation

The Judicial Conference of the United States has recommended changes to the Federal Rules of Civil Procedure aimed at reducing the staggering costs of discovery in federal litigation.

According to the original story at Corporate Counsel, the Conference made the following 3 recommendations:

1) Discovery is to be “proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.”

2) Judges have more discretion to require the requesting party to share the cost of locating the requested information.

3) Place limits on the sanctions that may be levied on parties for loss of electronically stored information (“ESI”) by requiring analysis of any prejudice to the other party and that sanctions should be no greater than necessary to cure the prejudice.”

The Supreme Court will now review the recommendations for adoption.

See: “New Discovery Rules to Rein in Litigation Expenses,” October 29, 2014.

September 16, 2014

Hey Hey Hey, Robin Thicke! Drunk and High Doesn’t Obviate Copyright Infringement

Posted By Douglas Panzer @ 4:08 pm
Filed under: Civil Liability,Copyrights,Music,Sound Recordings

Robin Thicke has been pretty well skewered the last year. He’s been called a misogynist and folks have called his huge hit song “Blurred Lines” such colorful descriptors as “rapey” and “a rape song.” As I discussed a while back, he also got involved with litigation against the heirs of Marvin Gaye over whether the same song ripped off Marvin. And now, according to every news outlet under the sun (since this is the most important story around), Robin Thicke is piling on Robin Thicke, saying he was high and drunk all last year. He’s also adding to his own slimeball factor by throwing the super-talented Pharrell Williams under the bus in the Gaye family copyright litigation.

So what does this have to do with this blog?!

Well, Thicke seems to be trying to a) cast off any claim to authorship of the song despite his earlier statements to the contrary; and b) relieve himself of any culpability for copyright infringement by claiming that he was too wasted to consciously infringe Gaye’s copyright. There’s just one problem here…but it’s big. There is no such thing as innocent copyright infringement. Courts use the analogy that “you can’t unring a bell.” That is, once you’ve heard a song, you can’t un-hear it. So you may or may not have consciously or intentionally infringed a copyright by writing or recording a substantially similar song, but if the songs are substantially similar and the copyright in the earlier work is valid, you still infringed the copyright.

Copyright infringement requires two factors to be shown: 1) Ownership of a valid copyright. 2) Copying of the plaintiff’s copyrighted work by the defendant.

Direct, purposeful copying is very infrequently capable of demonstration. Therefore, the analysis of copying frequently relies on whether a) the defendant had access to the plaintiff’s work, and b) whether the two works are substantially similar. In this case, access is a slam dunk. Not only was “Got To Give It Up” a big hit for Marvin Gaye (which in and of itself would be enough to show access), but Thicke even mentioned the song in a Billboard interview last year, according to CNN. This will come down to the analysis of substantial similarity. If the similarity is there, those who wrote “Blurred Lines” and those who recorded it are liable for copyright infringement.

I guess Thicke announced himself as a substance abuser and burned his bridges with Pharrell for no good reason. Nice move.

See also:
Daily Beast calls Blurred Lines “rapey”

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