Indiana Intellectual Property Law News

August 23, 2011

Proposed “Patent Reform” Legislation Passes U.S. House; Bill Reconciliation Next

Washington, DC – A popular topic among patent lawyers across the country is the proposed “patent reform” legislation being debated and considered by members of the House of Representatives and the Senate. Titled the “Leahy-Smith America Invents Act,” the pending legislation in the House, H.R. 1249, passed by a 304-117 vote on June 23, 2011. A version in the Senate, S. 23, passed on March 8, 2011, by a vote of 95-5. The bill will go through the reconciliation process after Labor Day, and President Obama has indicated that he will sign the law.

“First-to-File” System

Notably, the proposed legislation would switch the United States from a “first-to-invent” to a “first-to-file” system. What this means is that, in order to gain patent protection for his or her invention, an inventor would have to be the first person to actually file a patent application claiming the invention. Under current law, through the “interference” process, an inventor may challenge an earlier-filed patent application by arguing that he or she had an invention date prior to the applicant’s filing date. Proponents of this change believe it would simplify the application process and bring U.S. patent law into harmony with the laws of all other countries, which already operate on the “first-to-file” system. Critics of the “first-to-file” system say that it disadvantages independent inventors, who often lack the resources to support early-stage patent filings for their inventions.

Post-Grant Review

The legislation would also add a new window for “post-grant review” following the issuance or re-issuance of a given patent. This procedure would allow a third-party to challenge the patent on a broader range of issues than is currently available via reexamination. A post-grant review petitioner would have to show that “it is more likely than not” that at least one of the claims challenged in the petition is unpatentable or establish that the case raises “a novel or unsettled legal question that is important to other patents or patent applications.”
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August 22, 2011

Choice Hotel Sues SBQI, Inc. for Trademark Infringement of QUALITY Mark at South Bend Hotel

By Overhauser Law Offices, LLC

South Bend, IN – Trademark lawyers for Choice Hotels International, Inc. of Silver Spring, Maryland filed a trademark infringement suit in the Northern District of Indianaalleging SBQI, Inc. of South Bend, Indiana and eight Illinois individuals infringed trademark registration no. 0,886,881 for the mark QUALITY, which has been registered with the US Trademark Office.

Choice is a hotel franchise company that owns the numerous trademarks at issue in this suit. According to the complaint, SBQI, Inc. entered a franchise agreement to operate Choice franchise in South Bend, Indiana. As part of the franchise agreement, SBQI was granted license to use the Quality mark on various items including: signs, stationary, lobby displays, and items in the hotel rooms. In November 2010, Choice sent SBQI a notice of default claiming SBQI had not paid franchise fees due under the contract. In December 2010, Choice sent SBQI a letter terminating the franchise agreement due to continued breach of the contract. The letter demanded that SBQI immediately take down and cease to use all of the items bearing the Quality trademarks. The complaint alleges that in May 2011, SBQI continued to use the Quality mark on its sign. Choice’s trademark attorneys have made claims of federal and Indiana trademark infringement, false designation of origin, and unfair competition and are seeking damages, injunction, punitive damages, costs and attorney fees.

Practice Tip: When a franchise agreement terminates, typically the franchisee must promptly cease using and return all signs and other equipment containing trademarks. Failure to do so may result in a lawsuit for breach of contract as well as trademark infringement.

August 19, 2011

The Guardian Reports on BitTorrent Litigation Citing TorrentFreak Calculation That 200,000 John Does Have Been Sued

By Overhauser Law Offices, LLC

London, U.K. – The Guardian newspaper of London recently reported on the rash of BitTorrent lawsuits that have been filed in the United States. The Guardian reports on the claims of a blogger named TorrentFreak who has been vigorously tracking the BitTorrent lawsuits. Notably, TorrentFreak tracks that over 200,000 “John Does” have been named as defendants in BitTorrent-related copyright infringement lawsuits. According to these reports, a majority of the suits involve online music sharing.

TorrentFreak describes the BitTorrent-related copyright infringement lawsuits as “pay-up-or-else schemes” and describes the economics behind the suits. She notes “Copyright holders have embraced this new revenue stream by the dozen and new lawsuits are being filed every week.” The reports note that after the identity of the “John Doe” is disclosed through discovery on Internet Service Providers, the copyright holders contact the person and offer to settle for $2,500. Because most John Does prefer to pay the $2,500 rather than face legal costs and possible $150,000 fine, none of the cases have gone to trial.

Practice Tip: Indiana Intellectual Property Law News has been closely following the Bittorrent litigation recently Indiana, all of which so far involve adult entertainment file sharing, rather than music. Our reports are available here:

August 16, 2011

Alleging Infringement of Container Patent, Mead Johnson Sues Nestle and Gerber

By Overhauser Law Offices, LLC

Evansville, IN – Through its patent attorneys, Mead Johnson Nutrition Co., of Glenview, Illinois, has filed a patent infringement lawsuit against Nestle S.A. of Switzerland; Nestle USA Inc. of Glendale, California; and Gerber Products Co. d/b/a/ Nestle Infant Nutrition of Florham Park, New Jersey. The complaint alleges infringement of U.S. Patent No. 7,040,500, which is titled “Container and Scoop Arrangement.” The ‘500 patent is directed to a container for housing granulated products which includes a recessed base and, for easy product removal, a circumferential channel capable of receiving a scoop.

The patent lawyers for the plaintiff Mead Johnson point to two Internet postings, both made in March of 2011, announcing Gerber’s EASYSCOOP™ plastic packaging and the new packaging to be used for Gerber’s GOOD START® infant formula. Alleging that the EASYSCOOP™ packaging is currently in commerce and directly infringes the ‘500 patent, the plaintiff also includes in its complaint counts claiming that the defendants have induced infringement by third-parties through offering the GOOD START® product in the EASYSCOOP™ container for sale, selling it, and advertising it to retailers and consumers. The plaintiff seeks a permanent injunction against the defendants as well as a tripling of damages based on alleged willful infringement.

Practice Tip: U.S. patent law provides that making, using, selling, offering to sell, or importing a patented invention is direct patent infringement. In addition, 35 U.S.C. § 271(b) provides that “[w]hoever actively induces infringement of a patent shall be liable as an infringer.” Thus, a holder of a method patent could have an inducement claim against a product manufacturer if the patent is infringed by consumers using the manufacturer’s product. Under the latest precedent of the Federal Circuit (the federal appeals court with jurisdiction over appeals from patent trials and Patent Office proceedings), the standard for inducing patent infringement requires a showing of actual knowledge of a patent or “willful blindness” to the existence of one.

August 15, 2011

Indiana Court of Appeals Affirms Counterfeiting Conviction and Seven and a Half Years Suspended Sentence for Mail Order Form Counterfeit

By Overhauser Law Offices, LLC

Indianapolis, IN – The Indiana Court of Appeals examined Indiana’s criminal counterfeiting law in affirming a criminal counterfeiting conviction and sentence. The defendant was charged with five counts of counterfeiting, a Class D felony, after he filled out mail order forms and caused an Indiana State Trooper to receive and become indebted for “various collectable items that neither he nor any member of his household had ordered.” The defendant argued that the verdict should be overturned because the order forms were not “written instruments” as defined by the criminal counterfeiting statute. The court found that the order forms were written instruments. They examined the definition, citing I.C. § 35-43-5-1(t) and noted “a written instrument is defined as ‘a paper, a document, or other instrument containing written matter and includes ‘a list of specific items and ‘other objects or symbols of value, right, privilege, or identification.’

The court also affirmed the trial court’s sentence of seven and a half years, suspended with five years of probation. The sentence represented eighteen months for each of the five counterfeiting convictions to run consecutively. The court noted that crimes were committed “to retaliate against Trooper Kaizer for carrying out his duties as a police officer by issuing Trainor a traffic citation.” The court described how the Trooper had cited Trainor for making an illegal U-turn just before committing the criminal acts. Trainor contended his actions were a “prank.”

Practice Tip: Intellectual property attorneys sometimes make additional claims in trademark and copyright infringement cases that allege violations of criminal laws, particularly Indiana’s counterfeiting and conversion criminal statutes. For example, Indiana Intellectual Property Law News reported in February on a trademark infringement case that also made a claim of conversion, knowingly or intentionally exerting control over property of another. In June, Coach filed two trademark infringement lawsuits that also made claims under Indiana’s criminal counterfeit and forgery laws.

August 12, 2011

Lilly Wins Patent Infringement Suit Regarding Chemotherapy Drug

By Overhauser Law Offices, LLC

Wilmington, DE – Indianapolis-based Eli Lilly & Company has won patent infringement protection of the drug Lilly’s drug ALIMTA drug, which is a chemotherapy drug used to treat mesothelioma and other lung cancers. Lilly co-owns the patent with Princeton University. The lawsuit arose from an Abbreviated New Drug Application filed with the Food and Drug Administration that had been filed by Teva Parenteral Medicines of Israel, alleging APP Pharmaceuticals LLC of Schaumburg, Illinois, and Barr Laboratories of Montvale, New Jersey. Their ANDA sought approval to sell generic versions of ALIMTA prior to the expiration of the patent.

As soon as the ADNA was filed, Lilly’s patent attorneys filed a patent infringement lawsuit in the District Court of Delaware. The defendants had claimed that the ALIMTA patent, patent no. 5,344,932, N-(pyrrolo(2,3-d)pyrimidin-3-ylacyl)-glutamic acid derivatives, which has been issued by the US Patent Office, was invalid “under the doctrine of obviousness-type double patenting because the claimed invention is an obvious modification of inventions claimed in commonly-owned U.S. Patent Nos. 5,028,608 (“the ‘608 patent”) and 5,248,775 (“the ‘775 patent) in light of the relevant prior art.” The court held a five day bench trial in November 2010.

The Chief Judge Gregory Sleet wrote for the court in upholding the validity of the patent. “The court concludes that the examples found in the ‘775 patent specification do not support a finding of invalidity for obviousness-type double patenting because this case does not present a situation in which separate patents are sought for a claim to a compound and a claim to using that compound for the disclosed utility of the original compound.”

According to WISHTV.COM, Alimta was Lilly’s third best selling drug and had sales of $1.64 billion in first three quarters of 2010. The Alimta patent has been the subject of much litigation. On July 15, 2011, Lilly filed a patent infringement lawsuit regarding the same patent and against APP Pharmaceuticals, also a defendant in this case. Indiana Intellectual Law News blogged on the case here.

August 4, 2011

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

By Overhauser Law Offices, LLC

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

Indiana Patent Attorneys Obtain 110 Patents for Indiana Companies in July, 2011

By Overhauser Law Offices, LLC

Indiana patent attorneys obtained issuance of the following 110 patents from the US Patent Office to persons and businesses in Indiana in July, 2011:

	PAT. NO.	TITLE
1	RE42,576	Human spinal disc prosthesis
2	D642,303	Front portion of a vehicle headlamp
3	D642,242	Faucet wand
4	D642,241	Faucet hub
5	D642,225	Target for a tossing game

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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