TLJ News from August 16-20, 2005

Federal Circuit Addresses Priority Date of Patents Originating from Foreign Applications

8/19. The U.S. Court of Appeals (FedCir) issued its opinion [9 pages in PDF] in Broadcast Innovation v. Charter Communications, a patent infringement case involving the issue of determining the priority date, for the purposes of 35 U.S.C. § 102(b) and 35 U.S.C. § 120, of patents originating from foreign applications. The technology involved in this case is a distributed database system with applicability to data broadcasting and data casting communications media. The District Court held that the patent in suit is invalid for having been anticipated by an earlier foreign application. The Court of Appeals held that the District Court used the wrong date for priority, and reversed. The case will now continue in the District Court.

IO Research Pty Ltd., an Australian company, is the owner of U.S. Patent No. 6,076,094, titled "Distributed database system and database received therefor". Broadcast Innovation LLC is the exclusive licensee of this patent in the US.

IO had previously disclosed this technology in patent applications in Australia, which were later consolidated into a single international application (PCT), filed on November 26, 1993. This became a national stage application in the United States on July 18, 1995, as No. 08/436,336.

Broadcast Innovation filed a complaint in U.S. District Court (DColo) against Charter Communications and Comcast alleging infringement of this patent. IO later joined the litigation. Comcast has settled with the plaintiffs.

The District Court granted summary judgment of invalidity to Charter on the basis that its earliest priority date, July 18, 1995, falls more than one year after its publication of the same technology.

The Court of Appeals reversed on the grounds that the District Court court improperly determined the patent’s priority date. It held that the correct date is November 26, 1993, the PCT filing date, notwithstanding the fact that the patent in suit, '094, states that is was "filed Jul. 18, 1995", and "does not include a specific reference to the PCT application on its cover or in its specification".

35 U.S.C. § 102(b) provides, in part, that "A person shall be entitled to a patent unless ... (b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States".

35 U.S.C. § 120, which is titled "Benefit of earlier filing date in the United States", provides that "An application for patent for an invention disclosed in the manner provided by the first paragraph of section 112 of this title in an application previously filed in the United States, or as provided by section 363 of this title, which is filed by an inventor or inventors named in the previously filed application shall have the same effect, as to such invention, as though filed on the date of the prior application, if filed before the patenting or abandonment of or termination of proceedings on the first application or on an application similarly entitled to the benefit of the filing date of the first application and if it contains or is amended to contain a specific reference to the earlier filed application. No application shall be entitled to the benefit of an earlier filed application under this section unless an amendment containing the specific reference to the earlier filed application is submitted at such time during the pendency of the application as required by the Director. The Director may consider the failure to submit such an amendment within that time period as a waiver of any benefit under this section. The Director may establish procedures, including the payment of a surcharge, to accept an unintentionally delayed submission of an amendment under this section." (Emphasis added.)

The Court of Appeals summarized the history. "The ’336 application eventually matured into U.S. Patent No. 5,737,595 (the ’595 patent). Before issuance of the ’595 patent, the applicant filed a continuation application as 09/054,896 (the ’896 application). The ’896 application, in turn, matured into U.S. Patent No. 5,999,934 (the ’934 patent). Again before issuance of the ’934 patent, the applicant filed a divisional application 09/316,164 (the ’164 application). This divisional matured into the ’094 patent which is at issue in the present case."

The Court continued that "The ’094 patent includes a specific reference to its predecessors, the ’934 patent and the ’595 patent, but does not include a specific reference to the PCT application on its cover or in its specification. Thus, the issue before this court is purely a question of law – namely, what is the priority date of the ’094 patent in the absence of a specific reference to the PCT application?"

The Court of Appeals held that even though Section 120 uses the term "specific reference to the earlier filed application", since the patent in suit, '094, refers to the '595 and '934 patents, reference to the PCT application is not required, and the patentee is entitled to the priority date of the filing of the PCT.

And since this date is not more than one year after disclosure, the patent is not invalid under Section 102(b).

The Court of Appeals did not address the claim construction issue. It remanded the case to the District Court for further proceedings.

This case is Broadcast Innovation LLC and IO Research Pty Ltd. v. Charter Communications, Inc. and Comcast Corporation, U.S. Court of Appeals for the Federal Circuit, App. Ct. No. 05-1008, an appeal from the U.S. District Court for the District of Colorado, D.C. No. 03-WY-2223-AJ (BNB), Judge Alan Johnson presiding. Judge Rader wrote the opinion of the Court of Appeals, in which Judges Dyk and Randolph joined.

WTO Sets Deadline for US Compliance with Internet Gambling Order

8/19. The World Trade Organization (WTO) released an order [31 pages in PDF] of the Arbitrator, Claus-Dieter Ehlermann, in the WTO proceeding regarding whether various state and federal laws affecting internet gambling violate the treaty obligations of the US. The order provides that the US must implement the April 20, 2005 order by April 3, 2006.

On November 10, 2004, a Dispute Resolution Panel (DRP) of the WTO released its report [287 pages in PDF] on Antigua and Barbuda's complaint against the US. It held that various federal laws, including the Wire Act, and various state laws, violate the General Agreement on Trade in Services (GATS). See, story titled "WTO Panel Instructs Congress to Amend Wire Act to Legalize Internet Gambling" in TLJ Daily E-Mail Alert 1,016, November 11, 2004.

However, on April 7, 2005, the WTO's Appellate Body issued its report [146 pages in PDF] that reversed key parts of the DRP's findings. The report of the Appellate Body "finds that the Wire Act, the Travel Act, and the Illegal Gambling Business Act are ``measures ... necessary to protect public morals or to maintain public order´´" and therefore do not violate treaty obligations. The report of the Appellate Body also reversed the panel's findings regarding the state gambling laws. However, it let stand some parts of the November 10, 2004 DRP report. See also, story titled "WTO Appellate Body Upholds U.S. Laws Affecting Internet Gambling" in TLJ Daily E-Mail Alert No. 1,111, April 8, 2005.

On April 20, 2005, the DRP issued an order that adopted the Appellate Body's report. The US and Antigua and Barbuda have not reached agreement regarding the deadline for the US to implement those portions of the DRP's original report that were not overturned on appeal. The just released order sets a deadline of April 3, 2006.

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8/19. Microsoft and Artemis Solutions Group (ASG) announced that they "have reached a confidential settlement agreement resolving a trademark infringement action filed by ASG regarding its registered trademark, BioCert". They further stated that "As part of the settlement, ASG will retain its trademark rights and will dismiss its action against Microsoft". See, Microsoft release and ASG release.

10th Circuit Construes Removal Provisions of Class Action Fairness Act

8/18. The U.S. Court of Appeals (10thCir) issued its amended opinion [15 pages in PDF] in Pritchett v. Office Depot, another case involving interpretation of the removal provisions of the Class Action Fairness Act (CAFA).

Earlier this year, the Congress enacted the CAFA in response to the large number of meritless class action lawsuits being brought in class action friendly state courts. It allows certain cases, that are "commenced" after February 18, 2005, to be removed to federal court. See, S 5, the "Class Action Fairness Act of 2005", which is now Public Law No. 109-2. See also, story titled "Bush Signs Class Action Reform Bill" in TLJ Daily E-Mail Alert No. 1,080, February 18, 2005.

The present case is a class action, filed in state court in Colorado, in 2003, against Office Depot, alleging violation of Colorado law regarding payment of overtime wages. After February 18, 2005, and just before the beginning of the trial in state court, Office Depot removed the action to the U.S. District Court (DColo). This appeal addresses whether the District Court does have removal jurisdiction under the CAFA.

Office Depot advanced the imaginative argument that its removal of the action commenced an action in the federal court, and that this constitutes an action "commenced" after February 18, 2005, within the meaning of the CAFA. The Court of Appeals rejected this argument.

Office Depot's argument is contrary to the understanding of members of Congress who drafted and voted for the CAFA. Also, this argument, if adopted by the courts, would render the statutory cut off date meaningless. Finally, allowing removal of cases that have advanced to the trial stage, such as this one, would result in litigation chaos.

This case is Romia Pritchett v. Office Depot, Inc., U.S. Court of Appeals for the 10th Circuit, App. Ct. No. 05-0501, an appeal from the U.S. District Court for the District of Colorado. Judge Ebel wrote the opinion of the Court of Appeals, in which Judges O'Brien and McConnell joined.

People and Appointments

8/18. John Doll was named Commissioner for Patents at the U.S. Patent and Trademark Office (USPTO). He has been acting Commissioner for Patents since April of 2005. He has worked for the USPTO since 1974. Doll was previously Deputy Commissioner for Patent Resources and Planning directing information processing and technology, and budget formulation and execution for patent operations. Before that, he was Special Assistant to the Under Secretary. The USPTO stated in a release that he was "a group director from 1995-2005 in the technology center responsible for examination of biotechnology, organic chemistry, and pharmaceutical patent applications. He was an integral part of the team responsible for last year's implementation of the Image File Wrapper (IFW), the USPTO’s electronic patent application processing system."

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8/18. The Bureau of Industry and Security (BIS), which regulates exports, announced that it fined The McFarland Cascade Pole and Lumber Company $454,000, and fined The Oeser Company $83,200, for exporting lumber to Canada in violation of the BIS's Export Administration Regulations (EARs). See, BIS release. Specifically, the two companies exported Western Red Cedar (Thuja Plicata), a softwood of exceptional beauty and durability that is used for making furniture, patio decks, and wall, ceiling and sauna paneling. Section 754.4 of the EARs pertains to Western Red Cedar. The authority for the EAR is the expired Export Administration Act of 1979. The Act's primary purpose was to regulate exports to protect national security. The BIS also regulates the export of computers, software, encryption products, and other information technology products.

8/18. A grand jury of the U.S. District Court (SDFl) returned a criminal indictment that charges Chin Kan Wang and Robin Chang conspired to export and did export radio communication encryption modules, from the US to the Republic of China (Taiwan) in violation of 18 U.S.C. § 371 (conspiracy) and 50 U.S.C. § 1702. See, BIS release.

Federal Circuit Issues Order in Integra v. Merck

8/17. The U.S. Court of Appeals (FedCir) issued an order [PDF] in Integra LifeScience v. Merck. On June 13, 2005, the Supreme Court issued its opinion [17 pages in PDF] vacating the opinion of the U.S. Court of Appeals (FedCir). This is a case regarding the limited statutory exemption to patent infringement, codified at 35 U.S.C. § 271(e)(1), for research using DNA and genetic manipulation techniques.

The Supreme Court issued a short opinion that merely construed the statute, without engaging in any discussion of the common law research exemption, or the policy implications of allowing research exemptions.

On August 17, the Court of Appeals ordered as follows:

"(1) The mandate is hereby recalled and the appeal is reinstated.
(2) The case is returned to the original merits panel.
(3) New briefs shall be filed, with particular attention paid to the Supreme Court decision.
(4) The appellants' principal brief shall be due within 60 days of the date of filing of this order. The dates for filing the remaining briefs shall be in accordance with Fed. Cir. R. 31(a). An original and 22 copies of all briefs shall be filed, and two copies shall be served on opposing counsel. The court sua sponte allows amicus briefs."

See also, story titled "Supreme Court Rules on Research Exemption to Patent Infringement" in TLJ Daily E-Mail Alert No. 1,153, June 14, 2005, and story titled "Supreme Court Takes Case Involving Research Exemption to Patent Infringement" in TLJ Daily E-Mail Alert No. 1,053, January 11, 2005.

FCC Seeks Further Comments on USF Proposals

8/17. The Federal Communications Commission (FCC) released a Public Notice [27 pages in PDF] that requests public comments regarding four proposals (which are attached to the Public Notice) submitted to the FCC by members and staff of the FCC's Federal-State Joint Board on Universal Service regarding universal service subsidies for rural carriers. One of these proposals also proposes expanding the services that are taxed to support universal service subsidies.

One of the proposals was written by Robert Nelson, a former Commissioner of the Michigan Public Service Commission. It is titled "Holistically Integrated Package", or HIP. He wrote that "The time has come to consider the integration of the rural HCF, the non-rural fund, the impact of intercarrier compensation and contribution methodology holistically." (See, Public Notice, at page 18.)

He added that "The dramatic decrease in traditional long distance wireline traffic and the increase in the use of VoIP and the deployment of IP networks has changed the dynamics of USF so irrevocably that immediate attention to the issue is required. Consideration of the expansion of contributions is necessary to continue to provide the support contemplated in the rest of the HIP".

Deadline to submit initial comments is September 16, 2005. The deadline to submit reply comments is October 3, 2005. This Public Notice is FCC 05J-1 in CC Docket No. 96-45.

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8/17. The U.S. Attorneys Office for the Northern District of California announced the indictment, arrest, and arraignment of Behzad Mofrad on criminal charges of mail fraud and conspiracy to commit mail fraud. The indictment alleges that Mofrad engaged in a scheme to defraud Cisco Systems of internet networking equipment in 2002. See, USAO release.

Federal Circuit Affirms in Pause v. Tivo

8/16. The U.S. Court of Appeals (FedCir) issued its opinion [20 pages in PDF] in Pause Technology v. Tivo, affirming the District Court's summary judgment of non-infringement in favor of Tivo. This is a patent infringement case involving digital video recorder (DVR) technology.

Pause Technology is the holder of U.S. Reissue Patent No. 36,801, titled "Time delayed digital video system using concurrent recording and playback". Tivo makes digital video recorders for home entertainment systems.

On September 25, 2001, Pause filed a complaint in the U.S. District Court (DMass) against Tivo alleging patent infringement. See, Pause release. Tivo filed an answer and counterclaim in which it asserted the affirmative defenses of invalidity and non-infringement. It also counterclaimed for a declaratory judgment of invalidity and non-infringement.

The District Court entered summary judgment for Tivo on its claims that its DVR products, versions 2.0 and above, do not infringe the patent in suit.

Pause appealed. It challenged to the District Court’s claim construction rulings. The Court of Appeals affirmed.

This case is Pause Technology LLC v. Tivo, Inc., U.S. Court of Appeals for the Federal Circuit, App. Ct. No. 04-1263, an appeal from the U.S. District Court for the District of Massachusetts, D.C. No. 01-11657-PBS, Judge Patti Saris presiding. Judge Linn wrote the opinion of the Court of Appeals, in which Judges Lourie and Newman joined.

8th Circuit Addresses District Court's E-Mail Service Failures

8/16. The U.S. Court of Appeals (8thCir) issued its opinion [PDF] in American Boat Company v. Unknown Sunken Barge. The underlying action pleads negligence by the U.S. in maintaining navigable rivers. The appeal issue concerns the consequences of incompetence of the District Court in fulfilling its duties to serve papers by e-mail or regular mail. The plaintiff missed the deadline to file an appeal because the District Court neglected to serve its final order on the plaintiff's attorneys. The District Court then denied a motion to extend time. The Court of Appeals reversed.

This case involves a dispute about liability for damage to a barge on the Mississippi River cause by a submerged sunken barge. American Boat Company sued the United States for failure to maintain the navigable channel of the lower Mississippi River. The District Court entered judgment for the U.S. However, the present appeal has nothing to do with collisions with sunken barges. It is about the consequences of the District Court's failure to provide notice by e-mail, or by paper mail, to the parties.

The District Court operates an electronic case filing and case management system. Litigants can register to receive e-mail notice of case filings, in which case they are not entitled to service of paper copies. Alternatively, litigants can receive paper copies. At the relevant time, American Boat's trial counsel had not registered to receive e-mail notice. However, its local counsel, and his secretary, had registered to receive e-mail notice. Counsel for the U.S. were similarly split, with some not electing to receive e-mail service, but some electing the e-mail method.

None of the attorneys for American Boat, or the U.S., who elected to receive paper service, actually received service of the key order. With the one exception of the local U.S. Attorney, the Attorneys for American Boat, and the U.S., who elected to receive e-mail service, did not receive service. That is, the defense counsel, who are adverse to American Boat, corroborated the testimony of the attorneys for American Boat.

Since no one at American Boat knew of the District Court's final order, it did not file a notice of appeal within the 60 day time limit set by Rule 4(a)(1)(B) of the Federal Rules of Appellate Procedure (FRCP) [66 pages in PDF].

When it learned of the final order, from PACER, it filed a motion to reopen the time to file an appeal, which the District Court denied. It then filed a motion for reconsideration, which the court also denied. During the pendency of this motion, some of the attorneys for American Boat registered to receive e-mail service, but still did not receive notices from the District Court. American Boat filed a second motion to reconsider. The evidence in support of these motions included affidavits from attorneys, law office staff, a computer technician, and a network operations director for an internet service provider. The Court received no sworn testimony from the office of the clerk of the court. The Court denied a request for an evidentiary hearing.

Rule 4(a)(6) of the FRAP provides that the District Court may extend the time for filing a notice of appeal. It provides that "The district court may reopen the time to file an appeal for a period of 14 days after the date when its order to reopen is entered, but only if all the following conditions are satisfied:
  (A) the motion is filed within 180 days after the judgment or order is entered or within 7 days after the moving party receives notice of the entry, whichever is earlier;
  (B) the court finds that the moving party was entitled to notice of the entry of the judgment or order sought to be appealed but did not receive the notice from the district court or any party within 21 days after entry; and
  (C) the court finds that no party would be prejudiced.

The District Court relied solely upon a clerk's docket entries. It held that there is a presumption of delivery if the docket entries say so. It held that American Boat is not entitled to an extension of time under Rule 4(a)(6).

However, the docket entries, even if true, did not state that service has been made. Rather, the docket stated that "Notice will be electronically mailed to", and then listed four e-mail addresses. It also stated that "Notice will not be electronically mailed to”, and then listed four names. Both of these entries are written in the future tense. They state that service "will" be made, not that service has been made.

American Boat appealed. The Court of Appeals reversed, and remanded to the District Court for an evidentiary hearing.

The Court of Appeals wrote that "We agree with the district court that a presumption of delivery should apply to e-mails." However, it held that "the appellants have made a sufficient showing to at least be entitled to an evidentiary hearing on the issue of whether they have adequately rebutted the presumption."

The Court noted that proving a negative, such as non-service, is difficult. It wrote that "In cases involving lack of notice, there is often little a party can do except swear he or she did not receive the communication. Here, where several intended recipients, most of whom are officers of the court, all said they did not receive notice, there is enough evidence to warrant an evidentiary hearing on the rebuttal of the presumption of delivery and receipt."

This case is American Boat Company, Inc., et al. v. Unknown Sunken Barge et al., U.S. Court of Appeals for the 8th Circuit, App. Ct. No. 04-3388, an appeal from the U.S. District Court for the Eastern District of Missouri, D.C. No. 1:01-cv-21. Judge Melloy wrote the opinion of the Court of Appeals, in which Judges Bright and Murphy joined.

Bush Names McCallum Acting Deputy Attorney General

8/16. President Bush announced his intent to designate Robert McCallum to be acting Deputy Attorney General (DAG) at the Department of Justice. See, White House release.

Robert McCallumThe DAG is the number two position at the DOJ. McCallum (at right) is currently the Associate Attorney General, which position oversees many of the civil units of the DOJ, including six key divisions: Civil, Antitrust, Tax, Environment and Natural Resources, and Civil Rights. The Associate Attorney General also oversees many other units, but not the Solicitor General, the Office of Legal Counsel, or any of the crime related units. See, DOJ Organizational Chart.

McCallum was previously the Assistant Attorney General in charge of the Civil Division. Before that, he was a partner in the Atlanta office of the law firm of Alston & Bird. He focused on civil litigation, including appeals, commercial real estate litigation, insurance class action litigation and medical malpractice defense.

The designation comes now because of the departure of James Comey. President Bush nominated Timothy Flanagan to be the new DAG back in May, but the Senate has not confirmed him.

See, full story.

More People and Appointments

8/16. President Bush announced his intent to nominate Donald Winter to be Secretary of the Navy. Unlike most political appointees, Winter has a background in technology. He has three degrees in physics, and has worked on laser physics. He also worked in the early 1980s for the Defense Advanced Research Projects Agency (DARPA). He is currently Corporate Vice President and President of Northrop Grumman Mission Systems, in Reston, Virginia. Before that, he was P/CEO of TRW Systems. See, White House release.

Michael Wynne8/16. President Bush announced his intent to nominate Michael Wynne to be Secretary of the Air Force. He is currently Principal Deputy Under Secretary of Defense for Acquisition, Technology and Logistics (ATL). He has also been the Under Secretary of Defense for ATL, by recess appointment. The ATL office oversees, among other things, the Defense Advanced Research Projects Agency (DARPA), which is involved in numerous information technology related projects. He is also a former employee of General Dynamics. See, White House release and story titled "Bush Announces Appointments to Key DOD Post" in TLJ Daily E-Mail Alert No. 1,108, April 4, 2005.

8/16. The National Institute of Standards and Technology (NIST) and the Information Technology Laboratory (ITL) announced that they are seeking someone to fill the position of Division Chief for the Computer Security Division (CSD). See, notice.

Go to News from August 11-15, 2005.