Moving Away from Billable Hours in Patent Litigation

William Lee, patent litigator and co-managing partner at Wilmer Hale, will be discussing fixed fees and the state of patent litigation for clients and law firms on a webinar at November 12, 2009 at 2:00PM.

Intellectual Property Owners Association’s weekly one-hour webinar on current topics in IP, hosted by Pamela Sherrid, former editor of IP Law & Business magazine.

REGISTRATION FEE
$100 per user per webinar
To register, click: www.ipo.org/IPChatChannel

MOVING AWAY FROM THE BILLABLE HOUR
IN PATENT LITIGATION

Thursday, November 12, 2:00pm – 3:00pm ET

The demise of the billable hour has been predicted for years, but today’s economic woes are finally pushing alternative fee arrangements into the mainstream. Fixed fees seem an odd fit for high-stakes patent litigation, but that doesn’t mean they haven’t been tried. Hear how the experiment works out for clients and top law firms.

Speakers:

Kevin Rhodes is the President and Chief Intellectual Property Counsel of 3M Innovative Properties Company in St. Paul, Minnesota, where he is responsible for managing the intellectual property assets of 3M Company and its worldwide affiliates.

John Adkisson is a patent litigation partner in the Twin Cities office of Fish & Richardson. He has represented 3M in several cases, including 3M Innovative Properties Co. v. Avery Dennison Corp. which ended with a permanent injunction.

William Lee is a patent litigator and co-managing partner of WilmerHale. He has tried more than 50 patent cases to judgment and argued more than 30 appeals before the Court of Appeals for the Federal Circuit.

Medtronic wins $57M amid a sea of payouts

In the first phase of a patent infringement lawsuit Minneapolis medical device giant Medtronic filed against its fellow Twin Cities firm AGA Medical Corp, a San Francisco jury sided with Medtronic in federal district court — although the $57 million is only half the amount Medtronic asked for in the suit.

Medtronic accused AGA of infringing a pair of patents with AGA’s Amplatzer Occluder and vascular plug product lines. The decision also calls for AGA to pay 11% royalties to Medtronic on future U.S. sales of the devices through 2018.

AGA had a different outlook on the ruling. In a press release, AGA stated it looks forward to the second, non-jury phase “dealing with other issues of invalidity and unenforceability of the Medtronic patents”. Further litigation is slated to resume later this year and could affect the final outcome. The Medtronic patents in question cover self‐expanding medical devices using a metal alloy such as Nitinol, a shape memory alloy containing nickel and titanium that expands to its original shape after deployment.

The decision is a rare win for device giant Medtronic as recent weeks have brought a string of tough decisions to the company dockets. These include a nearly $180 million judgment against it in a pedicle screw patent dispute with DePuy Spine Inc., the recall of nearly 60,000 insulin infusion sets, its inclusion in a “qui tam” whistleblower lawsuit along with six other firms that stand accused of promoting the off-label use of microwave cardiac ablation products and bilking the Medicare system.

Also in the news, Medtronic made a $400 million settlement payment to Abbott Laboratories, preventing the companies from suing each other over heart stents or delivery systems for at least 10 years. The new agreement follows earlier deals this year resolving heart stent patent disputes with Boston Scientific and Johnson & Johnson, two other stent rivals. Medtronic now believes it has resolved or settled “substantially all” intellectual property litigation surrounding stent design and delivery.

Jury tells Microsoft to fork over $200M

A Texas jury sided with Toronto’s i4i and their US Patent 5,787,499 and ordered Microsoft to pay $200 million for patent infringement involving its Microsoft Office products.

i4i, a collaborative authoring and document-management software company, filed the case in March 2007. Karen Heater, President “felt vindicated” with the decision.

Patent Issues around Swine Flu Threat

The drug Tamiflu so far is the most effective treatment for combating the threat of

Demand for antiviral increased in 2004 with the threat of the virulent bird flu, and so all 50 states and many other nations now have large enough  stockpiles of the drug for 220 million people. Roche has stated it could ramp up production to 400 million courses a year.

The Obama administration said it would seek $1.5 billion from Congress to combat the threat of a swine flu pandemic and is in talks with Roche about increasing production. Those with high fevers and consistent symptoms within 48 hours of illness are appropriate patients to receive the drug. Other vulnerable populations such as the elderly and home bound are also being considered candidates for the antiviral.

The flu sweeping Mexico and now appearing in several other countries is a strain never seen before by experts; it is a mix of genetic material from humans, birds and pigs. CDC officials told a Senate hearing Tuesday the agency was considering whether to develop a vaccine for just this strain of flu or a combination of flu viruses.

Gilead Sciences, Inc., Foster City, CA, is the patent holder, (Patent #5763483 for oseltamivir) having been assigned it by the five named researchers who invented this particular compound. Gilead Sciences’ patent on oseltamivir will not expire until December 26, 2016. Originally discovered by Gilead, Tamiflu was licensed to Roche for late-phase development and marketing. Roche produces and markets the anti-viral medication oseltamivir (as “Tamiflu®”)

Roche has made 5 million courses of Tamiflu available to the World Health Organization and has licensed other manufacturers to make the drug. Earlier this month, Gilead was denied patent protection for Tamiflu (formally known as oseltamivir) by India’s Patent Protection Office, and so the Indian pharmaceutical maker Cipla Ltd. has since moved its own version of the drug into production.

Similar issues arose with the 2005 avian flu threat, when Taiwan amidst a rising threat and frustrating negotiations with Roche, eventually moved forward with production of a generic version of Tamiflu. As a show of good faith, Taiwan’s National Health Research Institutes did not market the drug and  limited it to public use.  Arguments were that the NHRI could produce the drug more quickly and at lower cost, and being that negotiations fell apart they moved forward with their generic in the interest of their people. These past and present issues raise concern over the handling of these situations by the pharmaceutical Roche, still trying to strongly enforce patent rights abroad when threats are imminent. Only time will tell but let us hope that all parties involved handle the delicate situation and more delicate threat appropriately.

Samsung Writes Check to Spansion for $70 Million

Earlier this afternoon, Spansion announced that it will receive $70 million from Samsung to settle current patent litigation.  The original lawsuit was filed in November 2008, and was centered around flash memory which retains data when an electrical device is turned off.  In addition, the two companies will also license their respective patent portfolios, according to Barron’s.  However, the deal is still subject to bankruptcy court because Spansion has filed for Chapter 11.

The history of the dispute between Samsung and Spansion may only be a few months old, but in that time it has spanned across continents.  Following the Spansion lawsuit in November, Samsung filed a patent infringement complaint last January in Japan.  Yet, both lawsuits will be dismissed in accordance with the agreement, and neither company will admit liability.

Spansion shareholders enjoyed a nice boost after the deal was announced, as shares jumped 70%, to 23 cents.

Tate & Lyle Suffer Sweetener Setback

Tate & Lyle, the sugar and sweetener company, suffered a setback late yesterday when the U.S. International Trade Commission upheld an earlier ruling against the British company.  According to Reuters, the ruling confirms a September 2008 decision that Tate had infringed on patents held by certain manufacturers of Chinese sucralose, a zero-calorie sweetener.

This decision will impact Tate as a fifth of their profits come from the sale of sucralose, which is sold under the Splenda brand name.  It’s rumored that the case against the Chinese manufacturers was filed to test Tate’s patents on the sweetner.

After the decision, Tate stated that they will review that ITC’s ruling and evaluate any appeal options.

Ford Settles Parts Dispute with LKQ

The automobile-parts recycler, LKQ Corp., has settled their dispute with Ford Motors Co.  The dispute had been filed by Ford over some of their design patents on collision parts, and according to Reuters, this agreement now makes LKQ the only distributor of copies of Ford’s replacement car parts.  The agreement extends through September 20, 2011, which is when Ford’s design patent expires.

More details of the agreement reveal that LKQ will pay Ford a royalty for each part they sell.  The companies also say that they will work together to stop infringement of Ford’s patents, while continuing to compete against each other.

Although I’m not sure as to the extent that these two companies will be able to compete while also protecting Ford’s IP, LKQ definitely seems like they are pleased with the agreement.  As Joseph Holsten, the Chief Executive of LKQ, said in a statement:

As the sole distributor of new non-original equipment aftermarket parts protected by Ford design patents, we will have the sole right to sell these parts in the United States for all of Ford’s models.

Nvidia & Intel Trade Punches

Can’t we all just get along?

Last February, Intel filed a lawsuit against Nvidia over a cross-licensing  agreement that was signed in 2004.  The chipmaker claimed that the agreement they had signed with Nividia did not apply to the latest lines of processors which contain onboard memory controllers.  Thus, these processors should not qualify under the agreement.  However, according to Vnunet.com, Nvidia has fired back.

Nvidia has filed a countersuit against Intel, and is seeking to end Intel’s access to its patent portfolio.  In addition, Nvidia also claims that Intel is acting out of spite due to the growing power of the graphics processing units that are manufactured by Nvidia.

“We must defend ourselves and the rights we negotiated when we provided Intel with access to our valuable patents.  Intel’s actions are intended to block us from making use of the very licence rights that they agreed to provide,” said Nvidia president and chief executive Jen-Hsun Huang.

Microsoft, TomTom End Legal Dispute

The high-profile legal dispute between Microsoft and TomTom has reportedly come to an end.  Although specific terms of the agreement were not disclosed, TomTom will pay Microsoft for coverage under its patents, and Microsoft will receive coverage under four TomTom patents as well, reports MarketWatch.

The dispute originated in February, as Microsoft filed suit against TomTom, alleging that the GPS maker was infringing on eight of its patents related to car-navigation.  TomTom countersued soon after, stating that its intellectual property was being infringed by Microsoft.

Shortly after filing their countersuit, TomTom joined the Open Invention Network, an organization that accumulates defensive patents in order to protect Linux from patent infringement lawsuits.  This maneuver led many to believe that there might be a bigger fight on the horizon between the Open Invention Network and Microsoft.

Yet, this agreement has quieted any such conflict.  In addition to paying Microsoft, TomTom has also agreed to remove some of its functionality related to file-management system patents within two years.  Also, TomTom’s coverage for Microsoft’s patents is designed to be compliant with the free software-licensing system adhered to by open-source providers.

Oracle & Alcatel-Lucent Settle Litigation

The patent infringement lawsuit surrounding Oracle and Alcatel-Lucent has now come to an end.  As reported by the Daily Herald, Oracle had sued Alcatel-Lucent in May, claiming that their OmniTouch My Messaging system infringed on Oracle patents.  Although terms of the agreement are confidential, one can safely assume that the agreement pleased both parties, as Alcatel-Lucent had countered the suit by claiming that Oracle’s patents were invalid.

The dispute started in December 2007, when Alcatel-Lucent wrote a letter claiming that Oracle’s Data Mining, E-mail Center, Data Guard and other products infringed on their patents.  Since then, 13 patents have come into question, five of which belong to Oracle, and seven to Alcatel-Lucent.  The last patent is the property of Siebel System Inc., which was acquired by Oracle in 2005.

The case was ordered closed on March 26, by a California district judge.  While Oracle was not available for comment, Alcatel-Lucent stated that they were “glad to put this matter behind us.”

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