Blockchain & Business: Improving Your Companies’ Future

By Pablo N. Garcia Rodriguez As a second post on this blog series regarding Blockchain, Stein IP introduces “Blockchain & Business: Improving Your Companies’ Future.” Considering the power of Blockchain, it is not surprising that it can also be applied to business. In fact, companies such as Walmart and FedEx implement Blockchain technology as a way to manage their supply chains since it makes possible tracking a product from its origin[1] and controlling assets’ conditions instantly. There are a lot of applications for this technology in the business field, such as smart contracts and transactions recording which can be achieved thanks to Blockchain being a distributed ledger. But what is a distributed ledger and why is everyone talking about it? A distributed ledger is a decentralized, synchronized and shared database where information is recorded. Decentralized: Data doesn’t rely on a central point of control, it is stored within a network of nodes. Due to lack of a single authority[2], is

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Per se legal? The Eleventh Circuit Rejects FTC’s “Unlikely to Prevail” Antitrust Challenge to “Reverse Payment” Patent Settlements

By Meera El-Farhan In F.T.C. v. Watson Pharmaceuticals, Inc., 677 F.3d 1298 (11th Cir. 2012) the U.S. Court of Appeals for the Eleventh Circuit rejected the Federal Trade Commission’s (“FTC”) antitrust challenge to “reverse payment” patent settlements. Under the terms of the “reverse payment” (or “pay-for-delay”) agreement, the patent owner of AndroGel, Solvay Pharmaceuticals, Inc. (“Solvay”), agreed to make over $20 million annual payments to the generic challengers Watson Pharmaceuticals, Inc., Par Pharmaceuticals, Inc., and Paddock Laboratories, Inc. In return, the generic challengers agreed to stay out of the market until 2015, unless another generic version was to enter the market before then.   The FTC brought suit against all parties to the agreement. The FTC challenged the “pay-for-delay” settlement on the basis of unfair restraint of trade (the settlement allegedly being an “unlawful agreement not to compete,” in violation of section 5(a) of the Federal Trade Commission Act[1] (“FTCA”)). The FTC argued that such monopolies allow both generic and

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eBay Reseller of OEM Software Denied First Sale Defense

By Zi Wang In Adobe Sys. v. Hoops Enter. LLC (N.D. Cal. 2012), the court rejected the first sale defense asserted by an eBay reseller of original equipment manufacturer (OEM) copies of software, drawing a distinction between licenses and sales of copyrighted works. Adobe sued the defendants for copyright infringement, alleging that the defendants sold OEM copies of Adobe software through the use of eBay and other websites.  The defendants countersued Adobe for a declaratory judgment of copyright misuse.  In particular, the defendants contended that Adobe’s assertion of copyright protection contravened the first sale doctrine, as codified in 17 U.S.C. § 109.  The defendants also asserted the first sale doctrine as an affirmative defense. The defendants obtained OEM copies of Adobe software that had been unbundled from the hardware with which they were originally packaged, such as Dell and Hewlett-Packard computers.  The defendants then re-bundled the software with items such as a piece of photo paper, a blank DVD, or

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Federal Circuit Finds Assigned “Inventions and Discoveries” Extends to Continuation Applications

In MHL Tek, LLC v. Nissan Motor Co., 99 USPQ2d 1681 (Fed. Cir. 2011), MHL Tek, LLC (“MHL”), the controversy surrounds the ownership of U.S. Patent Nos. 5,663,496 (“the ′496 patent”), 5,741,966 (“the ′966 patent”), and U.S. Patent No. 5,731,516 (“the ′516 patent”), all of which relate to a tire pressure monitoring system (“TPMS”) and have the same inventors.  Two of the patents, the ‘496 and ‘966 patents, are divisionals of the same parent application (the “Parent Application), while the third patent, the ‘516 patent, has a separate specification from the ‘496 or ‘966 patents or to the Parent Application. The Parent Application was filed on August 3, 1993, while the ‘496 and ‘966 patents were both filed on June 6, 1995, and the ‘516 patent was filed on May 2, 1996.  On August 5, 1993, two days after the Parent Application was filed, the inventors executed an assignment to Animatronics, Inc. (“Animatronics”), assigning all rights to “the inventions and

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Federal Circuit Clarified Intersection of Patent Misuse and Antitrust

En Banc Court Finds Block Licensing Of Essential and Non-Essential Patents Does No Provide Patent Misuse Defense In Princo Corp. v. Int’l Trade Comm’n, 2010 U.S. App. LEXIS 18101 (Fed. Cir. August 30, 2010) (en banc), Sony and Philips own patents related to CD-R/RW technology as defined in a standard, the Orange Book standard.  In arriving at this standard, there were competing methods of encoding position information on the disc: The Philips approach, which is outlined in the “Raaymakers patents,” and the Sony approach, which is outlined in the “Lagadec patent.”  Eventually, both Sony and Philips decided on using the Philips approach for the Orange Book standard since the Sony approach was difficult to implement and prone to error.  In order to provide a convenient mechanism for licensing the necessary patents to conform to the Orange Book standard, Philips managed block license packages.   The block license packages included both the Raaymakers patents and the Lagadec patent.

Federal Circuit finds Covenant Not to Sue Divests Court of Jurisdiction Where Basis of Declaratory Judgment Was Invalidity

In Dow Jones & Company, Inc. and Dow Jones Reuters Business Interactive, LLC v. Ablaise LTD. and General Inventions Institute A, Inc., Docket No. 09-1524 (Fed. Cir. May 28, 2010), Ablaise LTD. (Ablaise) owns U.S. Patent No. 6,961,737 (the ‘737 patent) and No. 6,295,530 (the ‘530 patent).  Both patents claim methods for a Web server to send individualized content and formatting instructions in the form of Web pages that are generated on the fly in response to user preference information encoded in the user’s HTTP request for the specific Web page. In 2006, Ablaise accused Dow Jones & Company,  Inc. (Dow) of infringing its ‘737 and ‘530 patents and simultaneously offering Dow a licensing agreement.  Dow refused, and sued saying both patents were invalid and not infringed.  Abliase counterclaimed for infringement on both patents.  The district court rejected Abliase’s motion to dismiss Dow Jones’ invalidity claim against the ‘530 patent and found the ‘737 patent as invalid due to obviousness

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Supreme Court Finds NFL Not Single Entity for Purposes of Antitrust Analysis of IP Licensing

In American Needle Inc., v. National Football League et al., 2010 U.S. LEXIS 4166, 94 U.S.P.Q.2D 1673 (2010), the appellee American Needle Inc. (Needle) sued defendants including the National Football League (NFL), the NFLP, and Reebok for violations of §1 and 2 of the Sherman Act.  Between 1963 and 2000, the NFLP granted nonexclusive licenses to various vendors including Needle.  In 2000, the teams authorized the NFLP to grant exclusive licenses.  The NFLP granted a 10 year exclusive license to Reebok, and declined to renew Needle’s nonexclusive license. The district court and the court of appeals believed the main issue in the case was “whether with regard to the facet of their operations respecting exploitation of intellectual property rights, the NFL and its 32 teams are, in the jargon of antitrust law, acting as a single entity.” American Needle Inc. v. New Orleans LA. Saints, 496 F. Supp. 2d 941, 943 (2007).  Both the district court and the court of

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Federal Circuit Affirms that the Right to “Make, Use, And Sell” a Licensed Product Inherently Includes Right to have that Licensed Product Made by a Third Party.

In CoreBrace v. Star Seismic, 566 F.3d 1069 (Fed. Cir. 2009), CoreBrace owned U.S. Patent 7,188,452 (“452”) which claims a brace for use in the fabrication of earthquake-resistant steel-framed buildings.  The inventor of the 452 patent and Star entered into a “Non-exclusive License Agreement” (“license”) through which Star received a license under the 452 patent.  The inventor later transferred his interest to CoreBrace.  The license to Star grants it a non-exclusive right to “make, use, and sell” licensed products.  Star did not explicitly have the right to have the licensed product made by a third party.  Further, the license explicitly stated that Star may not “assign, sublicense, or otherwise transfer” its rights to any party other than an affiliated, parent or subsidiary company.  The license also reserved to CoreBrace “all rights not expressly granted to” Star.  The license further provided that if a breach occurred, the license could be terminated after written notice of the breach and a thirty-day opportunity

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Federal Circuit Finds Prior Licensing Activity Does Not Per Se Prevent Permanent Injunction

In Acumed v. Stryker Corp., 551 F3d 1323; 89 USPQ2d 1612 (Fed. Cir. 2008), Stryker Corporation, Stryker Sales Corporation, Stryker Orthopedics, and Howmedica Osteonic Corporation (collectively, “Stryker”) appealed the District Court for the District of Oregon’s grant of a permanent injunction in favor of Acumed.  Acumed LLC is the assignee of U.S. Patent 5,472,444 (“the ‘444 patent”), which is directed to a proximal humeral nail (“PHN”) used for treatment of fractures of the upper arm bone. Acumed’s PHN is sold under the name Polarus®. Stryker sold a competing product: the T2 PHN.   Acumed sued Stryker in April 2004 for infringement of the ‘444 patent based on the sales of the T2 PHN. Stryker was found to have willfully infringed the ‘444 patent and was granted a reasonable royalty and lost profits.  Acumed moved for a permanent injunction.  Upon a hearing in February 2006, the district court granted Acumed’s motion for a permanent injunction, applying the old rule that as long

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Report On FTC Hearing on the Evolving IP Marketplace Held December 5, 2008

By James G. McEwen[1] Introduction On December 5, 2008, the Federal Trade Commission (FTC) conducted its first of multiple hearings to explore the continuing evolution of intellectual property marketplace and the effect of this marketplace on competition.  Entitled The Evolving IP Marketplace, the hearings are a continuation of the FTC work first published in To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy A Report by the Federal Trade Commission (October 2003) (hereinafter the “2003 FTC Report”), and to revise its findings in light of changes in law since 2003.  Of special interest, according to William Kovacic, Chairman, Federal Trade Commission, is to ensure that the FTC is able to obtain empirical solutions to IP marketplace issues as they affect competition law, and to determine the extent to which the theory meets practice in regards to optimizing the interface between IP and competition law.  As such, the December 5, 2008 hearing is only one of multiple

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