Patent Infringement

January 5, 2011

Hillenbrand, Batesville Casket Company win ban of knockoff coffins from Mexico from the U.S. International Trade Commission

Batesville, IN – Patent attorneys for Batesville-based Hillenbrand Inc., and its subsidiary Batesville Casket Company, the largest U.S. maker of coffins, have won an order to ban imports of knockoff caskets from Mexico in a patent infringement decision.

The U.S. International Trade Commission (USITC) in Washington said Monday that Ataudes Aguilares, a Mexican company, will be barred from importing caskets with patented memorabilia compartments and ornamental corner pieces. Batesville has patented caskets with memorabilia compartments, which is a drawer where family members can put personal mementos, Batesville said in its complaint. The patented ornamental corner pieces allow funeral directors to easily change the pieces quickly and easily. The four patents for the caskets with memorabilia compartments, U.S. Patent Numbers 5,611,124; 5,727,291; 6,836,936; 6,976,294; and, and the parent for the quick change corner attachment, Number 7,340,810, are registered with the US Patent Office. Batesville has also patented the specialty coffins in Canada and Mexico.
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January 4, 2011

25% Rule of Thumb for Patent Royalty Damages Rejected By Court of Appeals for the Federal Circuit

By Overhauser Law Offices, LLC

Washington DC – The “25% Rule” has often been used by damages experts in assessing damages in patent infringement cases. The rule states that in determining a base royalty rate in a hypothetical negotiation, a starting point is to consider that a reasonably royalty would be 25% of the marginal profits that would be realized by using the patented improvement. USE OF THE 25 PER CENT RULE IN VALUING IP, 37 les Nouvelles 123, 123 (Dec. 2002). On January 4, 2011, the Court of Appeals for the Federal Circuit resoundingly rejected this theory in Uniloc USA v. Microsoft. The Court stated:

“This court now holds as a matter of Federal Circuit law that the 25 percent rule of thumb is a fundamentally flawed tool for determining a baseline royalty rate in a hypothetical negotiation. Evidence relying on the 25 percent rule of thumb is thus inadmissible under Daubert and the Federal Rules of Evidence, because it fails to tie a reasonable royalty base to the facts of the case at issue.”

This has been a much-anticipated case, because the jury had awarded Uniloc damages of $388 million – a huge amount by any measure.

Practice Note: Although this case did not originate in Indiana, appeals in all patent infringement litigation are made to the Court of Appeals for the Federal Circuit. Thus, this ruling impacts patent infringement cases in every State, including Indiana.

This opinon is also notable because it comments on other important subjects in patent law, such as:

The Entire Market Value Rule – “The entire market value rule allows a patentee to assess damages based on the entire market value of the accused product only where the patented feature creates the ‘basis for customer demand’ or ‘substantially create[s] the value of the component parts. . . This case provides a good example of the danger of admitting consideration of the entire market value of the accused where the patented component does not create the basis for customer demand.”

Standard of Review of Jury Verdicts The Court ruled that de novo review applies in cases where “the parties conceded that under one claim construction there was infringement and under the other there was none, and were arguing only over which claim construction was appropriate.” In contrast, if “the claim construction itself is not contested, but the application of that claim construction to the accused device is,” the substantial evidence standard governs

Willful Infringement. A court can “treble” damages and award attorneys fees when “willful infringement” occurred. The Court stated, “If the accused infringer’s position is susceptible to a reasonable conclusion of no infringement, the first prong of Seagate cannot be met.” Slip Op. at 32. Particularly obtuse is the court’s triple-negative articulation of the factual holding: “Uniloc has not presented any evidence at trial or on appeal showing why Microsoft, at the time it began infringement, could not have reasonably determined that [Microsoft’s algorithms] did not meet the “licensee unique ID generating means,” “licensee unique ID,” or “registration system”/”mode switching means” limitations.”

Clear and Convincing Standard for Proving Patent Invalidity. Microsoft had vigorously argued that patent invalidity need only be shown by a preponderance of the evidence as opposed to clear and convincing evidence . However, the Court did not rule in Microsoft’s favor, stating, “Until changed by the Supreme Court or this court sitting en ban, this is still the law.”

Given the amount of damages at issue, the case is likely to be appealed to the U.S. Supreme Court.

The opinion appears below

December 17, 2010

ERICO International Sued by NIBCO for Patent Infringement

By Overhauser Law Offices, LLC

South Bend, Indiana – Patent lawyers for NIBCO, Inc., of Elkhart, IN, have filed a patent infringement suit alleging ERICO International Corporation of Solon, OH, has infringed the following patents issued by the U.S. Patent Office: Patent Nos. 6,517,030,. 6,953,174, 7,191,987, and. 7,441,730. All four patents have the same title, SWAY BRACE FITTING, which is a device for “bracing pipes and other loads, suspended below ceilings and beams, against sway and seismic disturbances.”

The plaintiff is a manufacturer of support system products. Citing photographs and an advertisement, the complaint states that the defendant is making, using, selling, offering for sale, or importing sway brace products which infringe these patents. As is usually the case in intellectual property litigation, the plaintiff seeks both damages and injunctive relief.
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December 2, 2010

GS Cleantech Files Patent Infringement Lawsuit Against Flottweg in Indiana

By Overhauser Law Offices, LLC

Indianapolis, Indiana – In a case which was transferred from federal court in Connecticut, patent lawyers for GS Cleantech Corporation of New York City have filed a lawsuit alleging Flottweg Separation Technologies, Inc. of Norwalk, CT, and Flottweg AG of Germany are infringing Patent No. 7,601,858, titled METHOD OF PROCESSING ETHANOL BYPRODUCTS AND RELATED SUBSYSTEMS and issued by the U.S. Patent Office.

The complaint notes that a separate lawsuit, filed by ICM, Inc., is pending in federal court in Kansas. The plaintiff in that case requests a declaratory judgment of non-infringement and invalidity of the ‘858 patent.
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November 10, 2010

Zimmer, Inc. Obtains Transfer of MedIdea Patent Infringement Complaint to Indiana

By Overhauser Law Offices, LLC

A patent infringement suit filed in Illinois by MedIdea LLC against Zimmer, Inc. of Warsaw, Indiana has been transferred to the Northern District of Indiana. The suit alleges infringement of the following patents issued by the U.S. Patent Office: 6,200,350 and 6,383,225, which relate to Hips, and Nos. 6,267,785, 6,379,391, 6,398,812, 6,821,300, and 7,229,478 which relate to shoulders.

November 10, 2010

Draper, Inc. Sues MechoShade Systems and Joel Berman Associates for Declaratory Judgment of Non Infringement of Shade Positioning System Patent and Trade Dress

By Overhauser Law Offices, LLC

Indianapolis, Indiana – Patent lawyers for Draper, Inc. of Spiceland, IN, have filed a declaratory judgment lawsuit against MechoShade Systems, Inc., and Joel Berman Associates, Inc., both of Long Island City, NY. In particular, the suit seeks a ruling that Patent No. 6,164,428, titled Wrap Spring Shade Operator (“the ‘428 patent”) and issued by the U.S. Patent Office, as well as certain of the defendants’ trade dress, are invalid and not infringed.

According to the complaint, the plaintiff Draper sells window shades. The defendant Mr. Berman alleged that Draper’s brackets for mounting window shades infring the ‘428 patent and the defendants’ trade dress. The plaintiff, in turn, alleges that the ‘428 patent is invalid for failing to meet the requirements for patentability in Sections, 102, 103, and 112 of the Patent Act and that the appearance of defendants’ brackets is functional, generic, and not capable of protection as trade dress.

November 9, 2010

Geocel, LLC sues Chem Link, Inc. for Declaratory Judgment on Pitch Pocket and Sealant Patent

By Overhauser Law Offices, LLC

South Bend, Indiana – Patent lawyers for Geocel, LLC of Elkhart, IN, filed a declaratory judgment suit against Chem Link, Inc. of Schoolcraft, MI, requesting that Chem Link’s patent be found to be invalid and not infringed. The patent at issue is Reissue Patent No. RE41,586, titled Pitch Pocket and Sealant, which has been issued by the U.S. Patent Office. The basis for patent invalidity includes alleged violations of the “recapture rule,” which is unique to reissued patents, as well as violations of Sections 102 and 103 of the Patent Act and inequitable conduct.

This case has been assigned to Judge Theresa Springmann in the Northern District of Indiana, and assigned case no.3:10-cv-00474-TLS.
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November 4, 2010

Biomet, Inc. Obtains Transfer of Hudson Surgical Patent Infringement Complaint to Indiana

By Overhauser Law Offices, LLC

A patent infringement suit filed in Illinois by Hudson Surgical Design, Inc. against Biomet, Inc. of Warsaw, Indiana has been transferred to the Northern District of Indiana. The suit alleges infringement of Patent No. 7,344,541, “Methods and Apparatus for Femoral and Tibial Resection” which was issued by the U.S. Patent Office. In ordering the transfer, Judge Ruben Castillo of the Northern District of Illinois stated, “After a careful review of the Defendants’ pending motion to transfer and Plaintiff’s response thereto, the pending motion to transfer is granted for the reasons outlined by Judge William Hart in the related case of Hudson v. DePuy, 10 C 2103 and for the reasons set forth in the pending motion pursuant to 28 U.S.C. §1404(a). In the Indiana Court, the case has been assigned to Chief Judge Philip P. Simon and Magistrate Judge Christopher A. Nuechterlein.
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October 27, 2010

Romary Associates Sues Renegade Custom Coaches for Infringement of Mobile Banking Vehicle Patent

By Overhauser Law Offices, LLC

Fort Wayne, Indiana – Patent lawyers for Romary Associates, Inc. of Fort Wayne, IN, filed a lawsuit alleging that Kibbi LLC d/b/a Renegade Custom Coaches and Trailers, McKibbin Enterprises, Inc., and Kibbi Incorporated, all of Bristol, IN, have infringed Patent No. 7,475,809, MOBILE BANKING VEHICLE, as issued by the U.S. Patent Office. Additional counts allege federal unfair competition, breach of contract, tortious interference with a business relationship, and misappropriation of trade secrets under state law.

Factually, the complaint alleges that, subsequent to the execution of a non-disclosure agreement, Romary disclosed its “mobile banking concepts and designs,” including a prototype, to the defendants. Afterwards, the defendants are said to have commenced selling their own mobile banking units, with the sales going to intended or potential Romary customers.

October 22, 2010

Indiana Court Confirms Disqualification Patent Infringement Counsel Barnes & Thornburg in Capital Machine v. Miller Veneers

By Overhauser Law Offices, LLC

Indianapolis, Indiana – In what has turned into a real “dog” of a case, Judge Jane E. Magnus-Stinson of the Southern District of Indiana has confirmed her ruling disqualifying the Barnes & Thornburg LLP (“B&T”) law firm in a patent infringement suit. The disqualification bars B&T’s from representing defendant Miller Veneers, Inc., based on B&T’s “substantially related” earlier legal work for plaintiff Capital Machine Company, Inc. B&T had represented Capital for at least 20 years in the 1980’s, 1990’s and 2000’s.

About a year after the suit was filed, B&T entered its appearance for Miller Veneers, and Capital promptly moved to disqualify B&T as counsel. Capital argued that five areas in which B&T had previously represented Capital were “substantially related” to the patent infringement issues with Miller Veneer. , Judge Jane E. Magnus-Stinson granted the Motion to Disqualify based on B&T’s prior work for Capital “regarding employment matters generally, and specifically, as they relate to: (a) the ownership of inventions; and (b) Capital’s employment relationship with Defendant Robert Brand.” This decision is discussed here.

Unhappy with this ruling, Miller Veneers filed a motion for reconsideration of the disqualification order. In denying the motion for reconsideration, the Court not only confirmed that B&T’s work regarding invention ownership and employment matters required disqualification, but so did other areas of work B&T had performed for Capital. These other areas included: patent prosecution, including a patent relating to a “Dog Systems;” Capital’s assets, joint ventures, and acquisitions; and tax matters.

Interestingly, the infringed patents included those relating to a “dog system,” and Miller Veneers had recently filed a claim construction statement arguing that “dogs” meant “mechanical devices having . . . a shape which . . . resembles that of a pin.” However, B&T’s work for Capital in the 1980’s had included obtaining Patent No. 4,503,896, DOG SYSTEM FOR VENEER SLICER, (expired in 2002) which showed that the dogs could be rectangular and have teeth. Here are excerpts of Miller’s claim construction statement and Capital’s patent:

In commenting on this issue the court stated

“In this case, Miller, and thus B&T, are seeking to have “dogs” construed differently than the term is used in the original patent that B&T prosecuted. Miller argues this is a “red herring ” and asserts that B&T should be able to argue that the term “means one thing in one patent and one in another patent, even where the prior patent was cited as prior art.” But Miller omits a significant fact in its theory about B&T’s purported freedom of argument – B&T is making the argument in support of a client in one circumstance and in opposition to that same former client in the second circumstance.”

Practice Note: This ruling exemplifies how providing patent prosecution services can lead to disqualification in future matters involving similar technology for a different client. In 1984, B&T filed Capital’s patent application for a “Dog System for Veneer Slicer” and the the resulting patent expired in 2002. However, Miller’s decision to seek construction of the term “dog” as used in Capital’s later patents made the present infringement suit “substantially related” to B&T’s prior patent prosecution work for Capital, resulting in B&T’s disqualification.

This Court’s opinion elaborates on the Seventh Circuit’s three-step analysis for disqualifying counsel in litigation generally, as articulated in La Salle Nat’l Bank v. County of Lake, 703 F.2d 252, 255 (7th Cir. 1983):

(1) Determining the scope of the prior representation;
(2) Asking whether “it is reasonable to infer that the confidential information allegedly given would have been given to a lawyer representing a client in those matters;” and if so,
(3) Asking whether that confidential information “is relevant to the issues” raised in the present action.

This opinion also illustrates the dangers of filing a motion for reconsideration. Sometimes, a ruling on a motion for reconsideration is not only denied, but includes more reasons why the original ruling was proper. This makes the ruling less likely to be overturned on appeal.

The patent litigation attorneys of Overhauser Law Offices, the publisher of this site, represented Capital Machine Company in obtaining disqualification of B&T. The Case No. is 1:09-cv-00702-JMS-DML, and the Order on the Motion for Reconsideration is below.