Patent Infringement

August 4, 2011

Federal Circuit Court Affirms Attorney Fee Award and Rule 11 Sanctions Of More Than $600,000 in Patent Infringement Case

Washington, D.C. – In an unusual decision; the Court of Appeals for the Federal Circuit has affirmed attorney’s fees and sanctions against a plaintiff who filed a meritless patent infringement lawsuit and committed other litigation misconduct. The case was appealed from the Western District of Washington, which had awarded Flagstar $489,150 in attorney’s fees and costs and $141,984 in Rule 11 sanctions.

EON-NET is a patent holding company and owning the patents at issue in this suit, patent numbers, 6,683,697, Information processing methodology, 7,075,673, Information processing methodology, and 7,184,162, Information

processing methodology, which have been issued by the US Patent Office. EON-NET had a long history of litigating claims related to these patents, including filing suit against Flagstar Bancorp, which became the decision here. Essentially, the district court had concluded that the lawsuit filed by EON-Net against Flagstar was meritless and little more than an attempt to extort a settlement from the defendants.

The appellate court found “the district court correctly construed the claims of the asserted patents, did not commit clear error in its exceptional case finding under 35 U.S.C. § 285, and did not abuse its discretion in invoking Rule 11 sanctions[.]” Therefore, the court affirmed. Judge Lourie, writing for the court, noted that “[m]eritless cases like this one unnecessarily require the district court to engage in excessive claim construction analysis before it is able to see the lack of merit of the patentee’s infringement allegations.” He further noted that Eon-Net’s settlement offer of less than 10 percent of what Flagstar spent defending its suit, “effectively ensured that Eon-Net’s baseless infringement allegations remained unexposed, allowing Eon-Net to continue to collect additional nuisance value settlements.”

Practice Tip: Federal Rule of Civil Procedure 11 allows for sanctions when a claim or defense is presented for an improper purpose such as “to harass, cause unnecessary delay, or needlessly increase the cost of litigation [,]” is a frivolous argument, or is not supported by factual evidence. Of particular note, the court may impose sanctions on the party, the party’s attorney or both. An award of sanctions under Rule 11 is rare, however, when awarded; the punishment is quite severe, as it was in this case.

August 2, 2011

Gian Biologics v. Biomet, Patent Infringement Lawsuit Over Centrifuge Tube Assembly, Transferred to the Northern District of Indiana

By Overhauser Law Offices, LLC

South Bend, IN – A patent infringement lawsuit that was originally filed in the District Court of Delaware was transferred to the Northern District of Indiana. Patent lawyers for Gian Biologics LLC of Delaware filed a patent infringement suit in the District Court of Delaware alleging Biomet, Inc. of Warsaw, Indiana infringed patent no.6,835,353 CENTRIFUGE TUBE ASSEMBLY, which has been issued by the US Patent Office.

The patent at issue is used for holding blood and separating blood product in to discrete components. The complaint alleges that Biomet makes, uses, sells, offers for sale and/or imports infringing products, namely several Biomet product lines including Plasmax Concentrator and Gravitational Platelet Separation Systems. The complaint alleges one count of patent infringement and seeks injunction, damages, attorney’s fees and costs. Gian’s patent attorneys filed the complaint in October 2010.

The case has now been transferred to the Northern District of Indiana by stipulation of the parties. It appears that initially Gian resisted transfer, and the Delaware District Court allowed limited discovery on the issue of transfer. According to the Delaware IP Law Blog, it was revealed that Gian had only been incorporated in Delaware for four months before the lawsuit was filed. The Delaware District Court had then stayed further discovery until the venue issue was resolved and noted it had doubts about whether the case should remain its court. In the parties’ stipulation agreeing to transfer, it was noted that “In order to conserve resources – and in light of the fact that the parties are engaged in a parallel patent infringement case in Germany that is scheduled for a bench trial on November 8, 2011 – Gian has concluded that the most efficient resolution would best be accomplished through a stipulated transfer at this time.”

Practice Tip: 28 U.S.C. 1404 allows transfer of a case from one district court to another by order of the court or by stipulation and consent of the parties.

August 1, 2011

Lilly Wins Appeal Protecting Attention-Deficit Disorder Drug Patent

By Overhauser Law Offices, LLC

Washington, D.C. – Indianapolis-based Eli Lilly & Co. won a lawsuit against seven other pharmaceutical companies that sought FDA approval to sell competing drugs that would have utilized Lilly’s patented drug formula. The seven defendants, Actavis Elizabeth LLC, Sun Pharmaceuticals, Sandoz Inc., Mylan Pharmaceuticals, Apotex Inc., Aurobindo Pharma Ltd., and Teva Pharmaceuticals, had filed an Abbreviated New Drug Application (ANDA) seeking to utilize Lilly’s patented formula and claiming invalidity of Lilly’s patent, No. 5,658,590, Treatment of attention-deficit/hyperactivity disorder, which has been issued by the US Patent Office. The patented drug is marketed under the name Strattera and is used to treat Attention-Deficit Disorder.

Upon the filing of the ADNA, Lilly’s patent attorneys immediately filed this patent infringement lawsuit in the United States District Court of New Jersey. The district court sustained the ‘590 patent against the defendants’ challenges on the grounds of inequitable conduct, anticipation, obviousness, and non-enablement. However, the court held the claims invalid for lack of utility, which the court called “enablement/utility.” The Federal Circuit Court went further in protecting Lilly’s patent and upheld the patent in its entirety. The ruling ensures that Lilly’s patent will be fully enforceable through its expiration in 2017.

According to the Indianapolis Business Journal, the drug generated $577 million in sales for Lilly last year.

The case is Eli Lilly & Co. v. Actavis Elizabeth LLC et al, Case No. 2010-1500 in the Court of Appeals for the Federal Circuit, decided July 29, 2011. The opinion notes it is “nonprecedential.”
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July 15, 2011

Eli Lilly Company Sues APP Pharmaceuticals LLC for Patent Infringement of Chemotherapy Drug

By Overhauser Law Offices, LLC

Indianapolis, IN – Patent lawyers for Eli Lilly Company of Indianapolis, Indiana filed a patent infringement judgment suit in the Southern District of Indiana alleging APP Pharmaceuticals LLC of Schaumburg, Illinois infringed patent no.7,772,209 , Antifolate combination therapies, which has been issued by the US Patent Office.

The complaint states that APP has filed an abbreviated new drug application with the Food and Drug Administration seeking to sell a generic version of the drug ALIMTA, which is patented by Lilly, prior to the expiration of the patent. Lilly alleges that APP will begin to market and sell the generic drug. ALIMTA is a chemotherapy drug used to treat mesothelioma and other lung cancers. Lilly’s patent attorneys contend that the marketing and sale of APP’s generic version will infringe Lilly’s patent. The complaint alleges two counts of patent infringement and seeks a judgment of infringement, injunction, costs and attorney’s fees.

Practice Tip: This case has been filed before APP actually marketed or sold any of the infringing product. Rather, Lilly appears to have become concerned about infringement due to the new abbreviated new drug application and notice that APP provided to Lilly. It is common for a patent infringement lawsuit, seeking an injunction and declaratory judgment, to be filed after a new abbreviated new drug application is filed with the Food and Drug Administration. The Patent Act, 35 U.S.C. § 283, allows a court with jurisdiction to grant an injunction “to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.”

June 23, 2011

Bear Archery, Inc. Sues Impact Archery, Inc. for Patent Infringement of Bow Sight with Fiber Optics.

By Overhauser Law Offices, LLC

Evansville, IN – Patent lawyers for Bear Archery, Inc. of Evansville, Indiana, filed a patent infringement lawsuit alleging Impact Archery, Inc. of Alpharetta, Georgia, infringed Patent Nos. 7,159,325 and 7,343,686, both called, BOW SIGHT WITH FIBER OPTICS which has been issued by the US Patent Office.

Bear Archery owns the rights to the ‘325 and ‘686 patented bow sights. The Compliant alleges that Impact Archery “has manufactured and continues to manufacture, use, sell, offer to sell and distribute fiber optic sights which infringe certain claims of the Patents-In-Suit.” Bear Archery seeks a declaratory judgment, injunction, impounding order, damages, costs, and attorney’s fees.

This case has been assigned to Chief Judge Richard L. Young and Magistrate Judge William G. Hussmann in the Southern District Court, and assigned Case No. 3:11-cv-00079-RLY-WGH.

Practice Tip: Bear Archery has been aggressive in defending its patent rights, and appears to have been involved in about ten patent infringement lawsuits in the Southern District of Indiana since 2007.
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June 20, 2011

Indian Industries Seeks Non-Infringement Declaration over Tethered Ball Practice Device Patent Owned by Swingaway Sports Products

By Overhauser Law Offices, LLC

Evansville; IN – Patent lawyers for Indian Industries, Inc. of Evansville, Indiana filed a patent infringement lawsuit in the Southern District of Indiana seeking a declaratory judgment that it is not infringing Patent No. 5,795,250 Tethered ball practice device, which has been issued by the US Patent Office and is assigned to SwingAway Sports Products, Inc. of Lubbock, Texas

The complaint states that the patent lapsed in September, 2010 due to failure to pay the required maintenance fee. Indian Industries, doing business as Escalade Sports, learned of the lapse in November 2010 and began developing a product similar to the patented technology, which culminated in sales and marketing of a product called the Springer Trainer batting trainer. The complaint states Escalade Sports marketed the new product at a trade show on June 18, 2011. The owner of SwingAway observed the new product, approached Escalade employees and alleged that the new product infringed the ‘250 patent. On that date, SwingAway contacted the US Patent Office and paid the fee for the ‘250 patent. The complaint alleges that SwingAway partners with Mid-America Sports Advantage in Jasper, Indiana.

Practice Tip: Escalade Sports claims it is entitled to the defense of absolute intervening rights, 35 USC 41(c)(2). That provision does provided that anyone who begins using, manufacturing or selling a product using the patented technology during the period when the patent has lapsed will generally not be liable for patent infringement. The court, in such cases, may allow the person to continue utilizing the patented technology, even if the patent maintenance fee is then paid.

June 17, 2011

Medical Monitoring and Paging LLC Sues Philips Electronics for Patent Infringement of System and Method for Automatic Critical Event Notification.

By Overhauser Law Offices, LLC

Indianapolis; IN – Patent lawyers for Medical Monitoring and Paging LLCof Newport, California filed a patent infringement lawsuit in the Southern District of Indiana alleging Philips Electronics North America Corporation of Andover, Massachusetts, Oridion Capnography, Inc. of Needham, Massachusetts, IWT Solutions, Inc. of Evansville, Indiana, and Oxford Biosignals, Inc. of Indianapolis,Indiana infringed Patent No. 5,942,986, System and method for automatic critical event notification, which has been issued by the US Patent Office.

The complaint alleges that each defendant manufactures, provides, sells, offers for sale, imports and/or distributes products and services that infringe the patent at issue, which is described as “a novel and clinically important critical event notification system that can continuously monitor patient statistics and lab data to detect complex critical events[.]” The complaint states that each defendant has developed and now sells its own system performing similar functions and that each defendant’s system infringes Medical Monitoring’s patent.

Practice Tip: The plaintiff here has alleged that each defendant separately developed and markets an infringing system. While two of the defendants are Indiana companies, the other two defendants are not located in Indiana, and the complaint does not state a basis for bringing the claims against them in the Indiana district court.

June 14, 2011

Heartland Recreational Vehicles LLC Sues Forest River Inc. for Patent Infringement of Travel Trailer Turning Radius

By Overhauser Law Offices, LLC

South Bend, IN – Patent lawyers for Heartland Recreational Vehicles, LLC of Elkhart, Indiana filed a patent infringement lawsuit alleging Forest River, Inc. of Elkhart, Indiana infringed Patent No. 7,878,545, Travel trailer having improved turning radius, which has been issued by the US Patent Office.

Both Heartland and Forest River sell travel trailers in Elkhart, Indiana. The ‘545 patent was issued to Heartland on February 1, 2011. The complaint alleges that Forest River is making, using, selling or offering for sale travel trailers, specifically the Silverback product, that infringe Heartland’s patent. Heartland seeks a declaration of infringement, an injunction, damages, treble damages, attorney’s fees and costs.

This case has been assigned to Judge Jon E. DeGuilio and Magistrate Judge Christopher A. Nuechterlein in the Northern District of Indiana, and assigned Case No. 3:11-cv-00250-JD –CAN.

Practice Tip: The Patent Act, 35 U.S.C. 287(a), does not allow a patent holder to collect damages from an infringer unless the patentee has given notice of the patent, normally by affixing the patent number on the product or packaging. In this case, the patent was issued only five months ago so there may be an issue about whether Forest River had notice. The Patent Act, 35 U.S.C. 287(a), however, provides that the filing of a patent infringement lawsuit constitutes the required notice.
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June 13, 2011

AirFx LLC Sues Custom Cycle Control Systems, Inc., J.D. Braun, Dr. V-Twin, Inc. and M.C. Advantages for Patent Infringement of Motorcycle Suspension

By Overhauser Law Offices, LLC

Indianapolis, IN – Patent lawyers for AirFx LLC of Indianapolis, Indiana filed two patent infringement lawsuits in the Southern District of Indiana alleging Custom Cycle Control Systems, Inc. of Las Vegas, Nevada, J.D. Braun, of Los Angeles, California, doing business as Goldenstate Custom Cycles, Dr. V-Twin, Inc. of Sherman Oaks, California, and M.C. Advantages, of Grimes, Iowa, infringed Patent No. 7,559,396 B2, Motorcycle air suspension system, which has been issued by the US Patent Office.

In the first case, the complaint alleges that AirFx received a defective product made by Custom Cycle Control Systems from a customer, who believed he had purchased an AirFx product that utilized the patented technology. AirFx claims that Custom Cycle has been manufacturing and selling products that infringe its patent and that the inferior products of Custom Cycle have damaged the reputation of AirFx. This case has been assigned to Chief Judge Richard L. Young and Magistrate Judge Tim A. Baker in the Southern District of Indiana, and assigned Case No. 1:11-cv-00803-RLY-TAB.

In the second patent infringement suit, the complaint alleges that J.D. Braun created a motorcycle suspension system called the “Shotgun Shock” that infringes AirFx’s patent. The complaint alleges that all three defendants manufacture and sell the infringing “Shotgun Shock.” AirFx has made a claim of patent infringement against Braun, Dr. V-Twin and M.C. Advantages and an unfair competition claim against J.D. Braun, claiming that Braun has falsely told customers that he invented the patented technology.

Practice Tip: The claims alleged by AirFx seem to indicate that there is some confusion in the marketplace about the origin and inventor of the patented motorcycle suspension technology. In addition to the patent infringement claims, AirFx might consider adding trademark-related claims if any of the defendants are using AirFx’s trademarks for their sales.

June 9, 2011

U.S. Supreme Court Affirms Strong Presumption of Patent Validity in Microsoft v. i4i LP

By Overhauser Law Offices, LLC

Washington, D.C. – The United States Supreme Court has issued a decision in Microsoft v. i4i LP, against Microsoft and unanimously reaffirming that patents are presumed to be valid at the standard of clear and convincing.

Microsoft had argued for a lower standard of the presumption of validity. The decision will require Microsoft to pay i4i over $290 million in damages.

Patent attorneys for i4i brought this suit against Microsoft alleging that Microsoft infringed i4i’s patent for a method of editing computer documents. Microsoft used the patented technology in its Microsoft Word program.