Maryland Intellectual Property Law Blog : Maryland Intellectual Property Lawyer & Attorney : Brian Wm. Higgins : Serving Baltimore, Columbia, Frederick

Summary:  Maryland residents are latest targets of record industry lawsuits aimed at stopping digital music file sharing

     Last week, the Recording Industry Association of America (RIAA) sent 403 pre-litigation settlement letters to 22 universities, including the University of Maryland - College Park, alleging illegal copying and distribution of RIAA-member copyrighted sound (music) recordings. In addition to the letters, the RIAA filed 24 copyright infringement lawsuits against previous recipients of pre-litigation letters who allegedly ignored "settlement opportunities." According to an RIAA statement, the lawsuits were filed in federal courts against students, including students reportedly attending the University of Maryland. As shown below, two of the lawsuits were filed in the District Court for the District of Maryland by Matthew J. Oppenheim, Esq., RIAA's lawyer (and a Maryland resident himself, according to public property records).

     One of Mr. Oppenheim's lawsuits, BMG Music et al v. Norwood, 07cv02480 (D. Md. 2007), was served on Sarah Norwood, a St. Leonard, MD (Calvert County), resident (according to RIAA's complaint).  The suit is predicated solely on a claim that on April 28, 2007, Ms. Norwood distributed 377 audio files over the Gnutella peer-to-peer network from a computer having the IP address 69.251.74.83 (which is a Comcast.net IP address: click here to see for yourself).

     The Record Industry vs The People blog describes what happens during RIAA-initiated litigation, which could best be described as somewhat heavy handed. Here's how the authors of the blog describe the "settlement opportunities":

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     The U.S. District Court for the District of Maryland was chosen as the forum for litigating the following case(s), as published by Justia:

• Stertil B.V. et al v. Automotive Lifts & Machinery Corp., Case Number 1:2007cv02411, filed September 12, 2007
  
  According to court papers, Plaintiffs Stertil B.V. (The Netherlands) and Stevensville, Maryland-based Stertil-Koni, Inc., have sued Defendant Automotive Lifts & Machinery Corp. (ALM) for direct and/or indirect infringement of U.S. Patent No. 6,315,079. The '079 patent is directed to heavy vehicle lifting devices.

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Summary:  The Court of Appeals for the Federal Circuit clarifies the standard for assessing whether two different entities are jointly liabile for patent infringement.

     As illustrated in a post on this web site over a month ago, consider the hypothetical situation where a business performs steps A and B of a patented process, and another company performs steps C and D. Neither company would appear to be a direct infringer of a patent claim reciting steps A, B, C, and D. And as long as no one is directly infringing the claim by practicing all steps A through D, neither company should be held liable for contributory or induced infringement of the claimed process either. That's where the theory of "joint" or "divided" patent infringement liability comes into play. In BMC Resources, Inc. v. Paymentech, L.P., 2006-1503 (Fed. Cir. 2007), the Federal Circuit considered the proper standard for joint or divided infringement by multiple parties of a single claim.

     At the outset, the Federal Circuit reiterated that liability for patent infringement requires a party to make, use, sell, or offer to sell a patented invention, meaning the entire patented invention. For example, direct patent infringement requires a party to perform or use each and every step of a claimed method. When a defendant participates in or encourages infringement but does not directly infringe a patent, the normal recourse under the law is for the court to apply the standards for liability under a theory of indirect infringement. However, the court said, indirect infringement requires, as a predicate, a finding that some party amongst the accused actors has committed the entire act of direct infringement.

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Summary: The House version of the Patent Reform Act of 2007 would bar submission of search reports prepared by non-U.S. citizens.

     H.R.1908, the Patent Reform Act of 2007, was introduced in the House of Representatives on April 18, 2007. As proposed, the Bill did not include Section 12, entitled "Additional Information," which made its way into the legislation when the House debated, and eventually passed, H.R.1908 on September 7, 2007. The table below, left column (after the jump), shows the original language of the provision, which would add a new Sec. 123 to Title 35 U.S.C. and grant the PTO authority to require prior art search reports. House Report 110-314 describes the measure as follows:

"The USPTO has discussed the need for some sort of examination support document [ESD] or applicant quality submission to improve the examination process. It may include a thorough search of the art in the field of the invention and in related fields in which one skilled in the art pertaining to the invention would expect to find information applicable to the invention. It is also expected that the information discovered by the search that is material to the patentability of the claimed invention be disclosed to the USPTO along with an analysis of how the information relates to the claimed invention and how the claimed invention is distinguished over the prior art information."

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     In Wyeth v. Lupin, Ltd. and Lupin Pharmaceuticals, Inc., No. 07, Civ. 0632 (D. Md Sep. 11, 2007), the District Court for the District of Maryland denied Baltimore-based Lupin Pharmaceuticals, Inc.'s (LPI) motion to dismiss an action against it and its parent, Mumbai, India-based Lupin Ltd. (Lupin), brought by pharmaceutical giant Wyeth. In reaching its decision, the District Court concluded that "when a wholly-owned U.S. subsidiary of a foreign corporation exists to distribute foreign-produced generic drugs in the U.S. and is actively involved in the ANDA process, the subsidiary also 'submits' an ANDA application" making it subject to the Hatch-Waxman Act like its parent.

     This case began when Lupin filed an Abbreviated New Drug Application (“ANDA”) with the FDA seeking approval to market a generic version of EFFEXOR® in the U.S. Under the Hatch-Waxman Act, the filing of an ANDA is an act of infringement. Accordingly, Wyeth, which owns U.S. Patents 6,274,171; 6,403,120; and 6,419,958 for venlafaxine hydrochloride (marketed by Wyeth as EFFEXOR® XR capsules), sued LPI and Lupin within the statutory 45-day period after receiving Lupin's "Paragraph IV" Notice Letter on January 30, 2007.

LPI's Motion to Dismiss

     LPI moved, under F.R.C.P. Rule 12(b)(6), to dismiss the complaint against it, arguing that under the Hatch-Waxman Act, the only act of direct infringement under 35 U.S.C. § 271(e)(2)(A) was Lupin's filing of the ANDA with the FDA. Wyeth sought to maintain LPI in the lawsuit, arguing that there is no “one-defendant-per-ANDA” rule under the Hatch-Waxman Act. LPI, Wyeth said, acted in concert with Lupin to violate Wyeth’s patents.

     The District Court began its analysis by noting that Lupin had made the same arguments, unsuccessfully, in Aventis Pharma Deutschland GMBH v. Lupin Ltd., 403 F. Supp. 2d 484, 494 (E.D. Va. 2005). In that case, the district court found:

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     Yesterday, Part 1 of this post identified issues of potential concern regarding the impacts of the new U.S. Patent & Trademark Office (PTO) rules on the number of continuation, continuation-in-part (CIP), and Request for Continued Examination (RCE) applications being prosecuted at the PTO for an invention. Below are some suggestions for dealing with the rule's limitations on the number of claims permitted in those patent applications, as suggested by Peter Weissman, a Partner at Blank Rome LLP.  In particular, patent applicants and their representatives should:

• Carefully consider all claims in an application to ensure they add benefit to the application;
  
  
• Review pending unexamined applications that exceed the 5/25 number of claims limitation in preparation to limit the number of claims or conduct a search prior to receiving a notification from the PTO; 
  
  
• Be mindful of disclosed but unclaimed embodiments in the specification;
  
  
• Consider conducting a search prior to filing an application, because a search could be used for the combined purpose of accelerating examination in one application and requesting additional claims beyond the allotted 5/25 limit in another application. But remember that these procedures could have a substantial negative impact on the scope of claims.

Comments:

• Click here for part 1 of this post
  
  
• Final Rule:  "Changes To Practice for Continued Examination Filings, Patent Applications Containing Patentably Indistinct Claims, and Examination of Claims in Patent Applications" 72 FR 46716 (Aug. 21, 2007)
  
  
• Thanks to Peter Weissman for granting permission to use his article"Patent Prosecution Considerations under the New U.S. Patent & Trademark Office Rules," which may be found here

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     Although there are 45 days remaining before the new U.S. Patent & Trademark Office (PTO) patent rules take effect November 1, 2007, the number of visitors to this blog looking for information about the rules suggests that patent applicants and their representatives are actively looking for the best ways to comply with the rules today. That’s not a bad idea, considering how the new rules will substantially limit how patent applications are prosecuted at the PTO, and may require applicants to modify their patent filing strategies for both prospective as well as pending patent applications. According to Peter Weissman, a Partner at Blank Rome LLP, applicants should begin considering strategies for complying with the new rules.  In particular, Peter says, given the limited number of continuations, continuation-in-part (CIP), and Request for Continued Examination (RCE) applications allowed under the new rules, applicants should:

• Consider relying more on interviews with Examiners, particularly personal interviews, which tend to substantially advance prosecution and reduce the need for filing continuations and RCEs;
  
  
• Carefully review all claims, including dependent claims, after a first action on the merits (FAOM) to ensure that the case is in condition for an appeal; all “formal” matters should be resolved at that stage as well;

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     The Copyright Office issued an announcement that it is conducting beta testing of its web-based registration system, which will be part of the new "electronic Copyright Office" (eCO). According to the announcement, participants in eCO beta testing will file basic registration claims at a reduced fee established for electronic filings (i.e., $35, which is $10 less expensive than the current paper filing fee). Individuals prepared to register at least one basic claim that would like to be considered for participation in eCO beta testing can complete and submit a short request form available here. Reportedly, groups of beta testers will be selected from requests received periodically throughout the duration of the beta testing. The announcement does not state how long beta testing will last.

Comments:

• The U.S. Patent & Trademark Office already provides for electronic filing of patent and trademark applications, as well as electronic filing of assignment documents

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     The U.S. District Court for the District of Maryland was chosen as the forum for litigating the following case(s), as published by Justia:

• Extra Space Storage, LLC v. Maisel-Hollins Development Co. et al , Case Number 1:2007cv02351, filed September 5, 2007

According to court papers filed September 5, 2007, Plaintiff Extra Space Storage, LLC, a Delaware entity based in Salt Lake City, Utah, sued Maryland-based Defendants Maisel-Hollins Development Co., Extra Space Management Co. LLC, Annapolis Self Storage Limited Partnership LLP, Silver Spring Extra Space LLC, Annapolis Extra Space LLC, and Post Management Co., for alleged trademark infringement under 15 U.S.C. § 1114.  The mark at issue is Plaintiff's federally-registered mark "Extra Space Storage" (the image above shows the mark used in commerce on Plaintiff's web site).

Plaintiff notes in its complaint that the State of Maryland issued a registration for the trademark "Extra Space Self Storage" to Defendant Maisel-Hollins Development Co.  Maryland's trademark records show that the mark was first used in Maryland in 1985; the mark has a registration date of June 15, 2007.  Plaintiff is seeking to cancel this registration in Maryland, among other requested relief.

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     With so much talk about climate change, it's good to see that Congress, including a few notable Presidential candidates, is pursuing meaningful technology-based legislation that tackles at least some of the complex issues associated with global warming. In January of this year, Senator Joe Lieberman introduced S.280, the Climate Stewardship and Innovation Act of 2007, which was quickly co-sponsored by 11 Senators, including Presidential candidates Hillary Clinton, Barack Obama, and John McCain.  The bill was referred to the Committee on Environment and Public Works, which held a hearing in July.

     Of particular interest is Section 318 of the Act, entitled "Patent Study," which calls for the Director of the Patent and Trademark Office, in consultation with representatives of interested parties in the private sector, to conduct a study to determine the extent to which changes to the United States patent system are necessary to increase the flow of climate change-related technologies. The Study is suppose to address:

(1) the balance between the protection of the inventor and the disclosure of information;

(2) the role of patents in innovation within the covered sectors;

(3) the extent to which patents facilitate increased investments in climate change research and development;

(4) the international deployment of United States developed climate change related technologies on the United States patent system;

(5) ways to leverage databases as innovation tools;

(6) best practices for collaborative standard setting; and

(7) any other issues the Director deems appropriate.

     It's not clear what is meant by "increas[ing] the flow of climate change-related technologies," but the language suggests that one goal of the Study is to find ways to make obtaining patents less of a burden and faster to get, which would, presumably, encourage innovation (or at least not stymie innovation).  To get a sense of the number of climate change-related patents already issued, I did a quick search of the PTO on-line database for patents issued with the term "global warming" and came up with the following trend:

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     The Port of Baltimore is the destination for approximately 40 million tons of bulk and container cargo each year, making the Port one of the busiest in the nation. Its popularity is the result of geography: two-thirds of the U.S. population lives within an overnight drive of Baltimore. With all that cargo coming into Baltimore, the Port is an obvious entry point for counterfeit goods that infringe federally-registered U.S. trademarks.

     The Department of Homeland Security plays a role in preventing infringing goods from entering U.S. markets by enforcing “parallel imports” regulations. According to Customs Directive No. 2310-008A, it is the policy of the U.S. Customs and Border Protection (part of DHS) to exclude from entry into the U.S., detain, and/or seize, violative trademarked goods. Under its intellectual property rights (IPR) enforcement regime, CBP may detain goods at ports where there is a “reasonable suspicion” that the goods bear marks which violate a federally registered trademark. The detaining Customs officers are tasked with assessing whether marks are counterfeit or confusingly similar to U.S. registered marks, making them the first line defenders against infringement originating at the borders. See Addressing Parallel Imports Goods Under U.S. Laws for more information about this subject (used by permission).

Notes:

• Thanks to Dave Weslow, co-author of the linked article, for the idea for this post

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     The table below shows how Maryland was represented on the House floor during yesterday's vote on passage of H.R.1908, the Patent Reform Act of 2007. 

Comments:

• To see how other legislators voted, click on Final Vote Results for Roll Call 863
  
  
• The see the resolution that was approved by an earlier vote, click on House Report 110-319
  
  
• Click on the Patent Reform Act link to the right for more on this topic

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     The House of Representatives today voted to pass H.R.1908, which is entitled the "Patent Reform Act of 2007."  The final vote, covered live by C-SPAN this afternoon, was 220 in favor of passage, 175 against. The House Report 110-319 can be found here, and includes several Amendments not included in the introduced version of the bill.

Comments:

• Attention now turns to the Senate to see if patent reform will finally see passage in Congress after three years of debate
  
  
• To illustrate how divisive patent reform has become, one Representative called H.R.1908 the "Steal America's Inventions Act" during the debate

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     The table below shows how Maryland ranks among other states in terms of the number of lawsuits filed in federal district courts that raise patent, trademark, and/or copyright issues.  The table values are for the last twenty months.

Notes:

• Rankings are based on number of complaints filed between January 1, 2006, and August 31, 2007, and include cases filed in the District of Columbia.  States with multiple jurisdictions/divisions are combined.  Complete table available (please email me a request).
  
  
• Source: Justia.com.

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Summary:  Foreign supplier of active pharmaceutical drug to U.S. applicant seeking FDA approval to market generic Lexapro® was enjoined along with the U.S. applicant based on supplier's commercial partnership with the U.S. applicant.  Case:  Forest Laboratories, Inc. v. Ivax Pharmaceuticals, Inc., 07civ1059 (Fed. Cir. 2007) (Schall, J., dissenting-in-part).

     Ivax Pharmaceuticals, Inc., submitted an Abbreviated New Drug Application (ANDA) to the FDA seeking approval to market generic tablets containing escitalopram oxalate (“EO”), the active ingredient in Lexapro®.  Forest Laboratories, Inc., which owns the patent for Lexapro®, sued Ivax under the Hatch-Waxman Act, which provides that the mere filing of an ANDA is an act of infringement.  During discovery, Forest learned that part of Ivax's ANDA submission included information provided by Mumbai-based Cipla, Ltd., Ivax's alleged EO drug supplier. Cipla was joined in the lawsuit. After the parties stipulated to infringement and the district court found the patent-at-issue not invalid nor unenforceable, it included Cipla in the injunction against Ivax.

     On appeal, the Federal Circuit agreed with the district court's decision to include Cipla:

"Here, we do not know if Cipla first approached Ivax or vice versa, but the plan to manufacture, import, market, and sell the EO products described in the ANDA was undoubtedly a cooperative venture, and Cipla was to manufacture and sell infringing EO products to Ivax for resale in the United States. Under the standards for inducement which we apply to 35 U.S.C. § 271(b), Cipla has therefore actively induced the acts of Ivax that will constitute direct infringement upon approval of the ANDA, and it was thus not inappropriate for the district court to include Cipla within the scope of the injunction."

     The Federal Circuit cited Allergan, Inc. v. Alcon Labs, Inc., 324 F.3d 1322 (Fed. Cir. 2003) for the notion that merely filing an ANDA is a constructive act of infringement, and may support a cause of action for induced infringement.

     The dissent asserted that the safe harbor provision of § 271(e)(1) exempted Cipla from being enjoined with Ivax; however, the majority disagreed with that conclusion, saying:

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     As reported last month, the first seven month of 2007 saw a decline in the number of patents granted to Maryland inventors compared to the previous year. That trend continued into August. U.S. Patent & Trademark Office (PTO) records show that for the period January through August 2006, the PTO granted 1,425 patents naming at least one Maryland resident as an inventor or joint inventor (based on residence addresses supplied by patent applicants to the PTO). However, the PTO only issued 1,313 patents to Maryland inventors for the same period in 2007, an eight percent decline over 2006 numbers. 

     For the month of August 2007, the PTO granted 150 patents naming at least one Maryland resident as an inventor or joint inventor. The PTO had issued 207 patents to Maryland inventors in August 2006, a 28% difference.

     The number of published patent applications naming at least one Maryland inventor in August 2007 was also down, continuing a trend seen in the first seven months of 2007 (compared to 2006). According to the PTO, 296 patent applications naming at least one Maryland inventor were published in August 2007, compared to 307 patent applications published during the same period in 2006, a four-percent difference.

Comments:

• See related posts for June and July.
  
  
• Although an eight percent decline in the number of patents issued to Maryland inventors is not insignificant and clearly suggests a decline in innovation, it would be incorrect to conclude that the number of issued patents (or published patent applications) is the best indicator of the level of innovation in Maryland, as many other variables also correlate with innovation.  There may also be certain conditions affecting the number of patents being issued by the PTO today compared to last year.

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