The district court’s September 30 Order in Ethox Chemical, LLC vs. The Coca-Cola Company, 6:12-1682-KFM (D.S,C.2015) is an important reminder to pay close attention to the contributions made by vendors and consultants, and in particular to plan in advance for the possibility of such contributions.

Coca-Cola’s packaging group pioneered the use of polyethylene terephthalate (“PET”)
beverage containers.  One disadvantage of PET was that it is porous to gas, so the carbonation in beverages would gradually escape from the bottle.  Coca-Cola scientists identified an additive, BPO-1, that functioned as a gas barrier, and sought the assistance of several vendors including Ethox to make BPO-1 on a commercial scale.  Ethox determined that it it was not commercially feasible to use BPO-1, but one if its employees, Dr, Tanner, proposed PEM as an alternative.

Coca-Cola proceeded with a patent application on PET containers, and included PEM, which eventually resulted in the issuance of U.S. Patent No. 8,110,265.  However Coca-Cola did not include Dr. Tanner as a co-inventor.  Ethox and Dr. Tanner sued to have Dr. Tanner named as a co-inventor, and in the Order issued on September 30, the court agreed.  While adding Dr. Tanner as a co-inventor would not affect Coca-Cola’s access to the technology under 35 U.S.C. 262, it would affect Coca-Cola’s ability to block competitor from using the technology.  While the dispute is not yet over, and Coca-Cola may yet prevail, the dispute could have been avoided entirely with some advance planning.

Whenever a business deals with a third party who could potentially solve a technical problem it is facing, that business should address  the possibility upfront taking steps to secure access to the solution, and if desired secure exclusivity over the solution.  In addition, when preparing a patent application, the potential contributions of anyone who might have contributed to the invention should be vetted..

Many of the states have passed legislation purporting to restrict a patent owner’s right to make accusations of infringement.  Some of these statutes seem to be of questionable validity, but we will have to wait for a determination.  In State of Vermont v, MPHJ Technology Investments, LLC, [2015-1310] (September 28, 2015), the Federal Circuit affirmed the district court’s remand back to state Court, finding that the Vermont Bad Faith Assertions of Patent Infringement Act (“BFAPIA”) had not (yet) been raised by the state.

The State of Vermont initiated an action under the Vermont Consumer Protection Act, 9 V.S.A. § 2453(a) for unfair trade practices and deceptive trade practices arising from MPHJ’s conduct in sending patent infringement warnings in the State of Vermont.  The district court found that Vermont was not seeking an injunction that requires MPHJ’s compliance with the Vermont Bad Faith Assertions of Patent Infringement Act (“BFAPIA”), 9 V.S.A. §§ 4195–99.. Given this conclusion, the Federal Circuit agreed that if the State
prevails on the merits in state court, it may not seek an injunction requiring MPHJ to comply with the BFAPIA.  The Federal Circuit found that because MPHJ relies
on the BFAPIA as its basis for removal under § 1442(a)(2), the necessary consequence of our decision is that we find no grounds for removal to federal court.

The Delaware Court of Chancery recently dismissed Joseph Alfred’s Complaint against the Walt Disney Company for its breach of implied contract resulting from Disney’s refusal to negotiate with Mr. Alfred for a license to Disney’s T-65 X-wing fighter plane and thereby stalling the next evolution of human transportation.  The crux of Mr. Alfred’s complaint, if there is one, is that Disney varied from its standard policy not to accept unsolicited proposals, and in so doing created an expectation in Mr. Alfred that his proposal would be accepted.

While such policies are often cited as being short sighted and stifling, they do in fact protect businesses from litigation, and a variance from such a policy invites trouble, as Mr. Alfred has proven.  Disney was able to get the suit dismissed in its early stages, but its doubtful that the Disney employees who participated in July 22, 2014, call had factored in the cost in both money and time, of taking the initiative with an unsolicited disclosure.

So far the USPTO reports a total of only 1382 submissions, about 25% of which were deficient.

 Of the 1044 “proper” submissions, how many resulted in an Office Action relying upon the submitted art?  Just 12.5%.  Given that some interested party went to the effort and expense of making a submission, the fact that only 1 out of 8 is relied upon suggests that the Examining Corps is ignoring these submissions.

Curious about the prior art the USPTO is ignoring?  There are average of about 3.2 references per submission, which is likely due to the fact that there is no fee for a submission of three references or less.  28% of the submitted art are prior patents, 20% are prior published applications, 19% are foreign references, and 32% are non-patent literature.

One of the few benefits to inventors in the AIA was the creation of Supplemental Examination, a procedure by which a patent owner could “cure” possible inequitable conduct.  However in two years, only 80 requests for Supplemental Examination have been filed.

Of course the one reason why Supplemental Examination has languished is the Therasense’s but for materiality standard.  See, Therasense v. Becton Dickinson 99 U.S.P.Q. 2d 1065, 1074 (Fed. Cir 2011).  After Therasense,  If the invention is not found unpatentable over the reference, then that reference is not material (of course even if the patent survives the litigation, it might still be found unpatentable over the reference under the Patent Office’s lower evidentiary standard.

Of course there are other ways to commit inequitable conduct besides failing to disclose material prior art, such as false claim of small entity status (Outside the Box Innovations v. Travel Caddy), false statements regarding late payment of maintenance fees (Network Signatures, Inc. v. State Farm Mut. Auto. Ins. Co.), false statements in supporting declarations  (eSpeed v. Brokertec); failure to disclose the relationship between the declarant and the applicant (Ferring B.V. v. Barr Laboratories, Inc.).

With just 80 takers in over two years, Supplemental Examination seems like a solution in search of a problem.

There has been a lot of press recently about nature photographer David Slater’s claim of copyright in a “selfie” taken by a macaque monkey that picked up Slater’s camera and began snapping hundreds pictures.  The selfie, taken by a crested black macaque (Macaca nigra) in an Indonesian forest in 2011, found its way to the Wikipedia Commons website.

To be copyrightable, a work must be the result of human authorship.  Emile Borel’s infinite monkeys at infinite typewritters might create a Shakespeare play, but it would not be copyrightable, and neither is a macaque selfie.

Slater’s monkey business is an important reminder about the importance of authorship to the ownership of copyright rights.  Works prepared by an employee in the scope of their employement are works made for hire, and the employer is considered the author and the owner of the work.  However with the exception of certain specified types of works created pursuant to a prior written agreement, the owner of a copyrightable work is the author.  This means that merely hiring and paying an independent contractor does not transfer ownership of the copyright in their work product, a critical lapse for someone who wants to modify (prepare derivatives of), or reproduce or distribute copies of, the work.  It’s also important to remember that while co-author of a copyrighted work can generally do whatever he or she wants with the jointly created work, each co-author but has to account to the other co-owners for the use of the co-owned work, and not necessarily in proportion to the contributions of the co-authors.

Whenever a non-employee is engaged to create a work  or contribute to a work, have a writen work-made-for-hire agreement (if appropriate), or an assignment.  Otherwise you may not be able to do what you want with that work.

In Energy Recovery, Inc. v. Hague, [2013-1515] (March 20, 2014), Judge Wallach and the Federal Cricuit gave a definition.  In 2001, Hauge was ordered to assign all intellectual prioperty rights in pressure exchangers to Energy Recovery.  Years later, Hague was in the business of making pressure exchangers, and Energry Recovery moved for a contempt citation,arguing that he was using Energy Recovery’s technology.  Hague argued that he did in fact assign all of the intellectual property as required,  The district court found that Hague violated the letter and spirit of the agreement, but the Federal Circuit disagreed.    The Federal Circuit Hague was required to transfer intellectual property rights, and found that nothing prohibited Hague from using any manufacturing process, distinguishing between the underlying technology and the rights protecting the technology.  The Federal Circuit said that Hague may be infringing the assigned patents or trade secrets, but he is not in contempt of the order.

One of the actual benefits of the AIA to inventors and patent holders was the creation of virtual patent marking.  Virtual patent marking allows the patent owner to mark its products by posting the patent information on a website, rather than on the product itself.  Virtual patent marking allows the patent owner to quickly add new patents as they are issued thereby preserving the ability to collect damages for infringements before suit is filed.  Virtual patent marking also allows patent owners to remove patents as they expire or their scope changes, thereby avoding liability for false patent marking.

35 U.S.C. 287 requires:

Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by fixing thereon the word “patent” or the abbreviation “pat.”, together with the number of the patent, or by fixing thereon the word “patent” or the abbreviation “pat.” together with an address of a posting on the Internet, accessible to the public without charge for accessing the address, that associates the patented article with the number of the patent, or when, from the character of the article, this can not be done, by fixing to it, or to the package wherein one or more of them is contained, a label containing a like notice.

A patent owner can thus take advantage of this method of marking by putting a simple reference to the website on the product or, if appropriate, the product package:

Patent: www.company.com/patents

Pat.: www.company.com/patents

The website must “associate” the patented article with the number of the patent.  This can be done in a number of ways.  Some websites list the products in a table with the corresponding patent numbers.  See, for example Tivo’s site: http://www.tivo.com/legal/patents or Symantec’s site: http://www.symantec.com/about/profile/policies/virtual_patent_marking.jsp or Rapidscan’s site:  Other websites provide an index with links to seprate product pages.  See, for example, Abbott’s site: http://www.abbott.com/patents/vision-technologies.htm.  Still other webpages link to a single or to multiple .pdf listings.  See, for example, Bunn’s site: http://www.bunn.com/pdfs/misc/BUNN_Patent_List.pdf; Hill-Rom’s site: http://www2.hill-rom.com/usa/PDF/Patent_20120609.pdf, or Kimberly Clark’s site: http://www.kimberly-clark.com/ourcompany/innovations/patents.aspx.  Finally, some websites provide a searchable index.  See, for example, St. Jude Medical’s site: http://patent.sjmneuro.com/Public.