TIPLJ: Volume 9
Issue 1 – Fall 2000
Challenging the Reliability of Experts in Intellectual Property Cases
Citation: 9 Tex. Intell. Prop. L.J. 1 (2000)
Author: Stephen D. Dellett
About: Mr. Dellett is a partner with the law firm of Fulbright & Jaworski LLP, Austin, Texas.
Abstract: The Supreme Court’s March 1999 decision in Kumho Tire v. Carmichael alerted federal court litigants that all expert witnesses could have their methods challenged before they take the stand. Kumho held that every expert, not just experts who use “junk science,” will be subject to the Daubert reliability test. As a result, trial court judges will act as gatekeepers for the reliability of every expert witness, including experts in patent, trademark, and trade secret cases.
Only a few reported decisions show challenges to reliability of methods used by experts on issues of patent claim construction and infringement. Several experts have been challenged in intellectual property damages cases, but experts have been excluded only if they failed to use well-established methods.
Amended Rule 702 does not prevent courts from using the Daubert factors to assess the reliability of scientific expert testimony. According to the Advisory Committee’s Notes to proposed Rule 702, the new three-prong test will still require consideration of any or all of the Daubert factors, plus other factors that courts have applied in evaluating admissibility of expert testimony.
Litigants have nothing to lose by moving to exclude opposing experts who use unreliable methods in intellectual property cases. When challenged, the proponent of the expert has the burden to establish that the methods are reliable. The proposed amendment of Rule 702, if adopted, may encourage more challenges to expert witnesses before trial.
From the Dead Sea Scrolls to the Digital Millennium; Recent Developments in Copyright Law
Citation: 9 Tex. Intell. Prop. L.J. 19 (2000)
Author: Neil Weinstock Netanel
About: Arnold, White & Durkee Centennial Professor of Law, University of Texas School of Law; Of Counsel, Fulbright & Jaworski L.L.P. I wish to thank Bethanie Steensma for her research assistance. The views expressed and any errors that persist in this Article are mine alone.
Abstract: This Article reviews selected developments in copyright law during the period of September 1999 through August 2000. Copyright developments during this period trace the rapid digitization and globalization of copyright markets. They also reflect new legal regimes, including the Digital Millennium Copyright Act and the Agreement on Trade-Related Aspects of Intellectual Property, designed to bolster copyright in the face of digitization and globalization. Partly because of these changes, the past year has also seen numerous constitutional challenges to copyright law. This Article reviews those challenges as well as a number of cases concerning more traditional copyright issues. The Article concludes with a case spanning back to the parchment millennium, the Israeli Supreme Court decision in the Dead Seas Scrolls litigation.
Now What? A Look at What Remains for Patent Infringement
Citation: 9 Tex. Intell. Prop. L.J. 65 (2000)
Author: Stacey L. DeRosa
About: J.D. candidate, May 2001, Quinnipiac University School of Law, Hamden, Connecticut.
Abstract: “[C]onsistency, uniformity, and familiarity with the extensive and relevant body of patent jurisprudence are matters of overriding significance in this area of the law.”
In Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, the U.S. Supreme Court held that the Patent Remedy Act could not be sustained as legislation enacted to abrogate the states’ sovereign immunity from patent infringement suits in federal court. This decision, although seemingly sincere in its practical application due to its championing of states’ rights and its concern with the livelihood of the Eleventh Amendment, changes the future of patent litigation enormously.
As the dissent pointed out, the Patent Remedy Act was essential to protecting patent owners. This decision reverts the patent laws back to the pre-1992 system where patentees’ only available remedy was in state court. Congress’ attempt to rectify this inequity and inconsistency was well supported by the congressional record evincing constitutional violations. Why the Court is effectively forcing the nation to endure such inequity is unknown.
It is interesting to note one of the dissent’s final observations of the congressional record that this Casenote did not previously address. The dissent first reiterated how the majority demonstrated itself as a proponent of states’ rights. The dissent went on to note that although the majority may have considered its opinion as doing the states a favor, the states never illustrated a desire to possess the rights given to them. When Congress conducted its hearings on the Patent Remedy Act, the states were invited to participate in testifying against the abrogation of their immunity. None were so inclined.
An appropriate summary of the Supreme Court’s then recent jurisprudence regarding issues of federal and state rights was advanced over two decades ago. It was suggested that Justice Rehnquist’s then recent opinions were guided by three basic principles. The first was that conflicts between an individual and the government should be resolved against the individual, whenever possible. The second principle was that conflicts between federal and state authorities should be resolved in favor of the states, whenever possible. The third principle was that when questions arise as to the exercise of federal jurisdiction, they should be resolved against such exercise, whenever possible.
Surprisingly, and strangely enough, after twenty-two years, this assessment of the former Supreme Court is applicable to and on point with the majority in Florida Prepaid. Maintaining the states’ individual rights is a respected goal in our country, as they are vital in keeping the central government from exceeding its granted authority. However, other respected goals are uniformity and consistency in our laws, as they help foster our country’s success. The majority’s decision in Florida Prepaid severely threatens these latter goals.
Arguments for the Need for Statutory Solutions to the Copyright Problem Presented by RAM Copies Made During Web Browsing
Citation: 9 Tex. Intell. Prop. L.J. 97 (2000)
Author: Gretchen McCord Hoffmann
About: J.D. candidate 2001, The University of Texas School of Law. The author wishes to thank the Dallas office of Sidley & Austin for their continued sponsorship of the Texas Intellectual Property Law Journal Best Note competition; Neil Netanel, Arnold, White & Durkee Centennial Professor in Law at The University of Texas School of Law, and the members of his Spring 2000 Advanced Copyright Seminar for their critiques and comments on this note; and Peter Briggs Hoffmann and Myrtis McCord, whose assistance has been invaluable.
Abstract: This Article will focus on one of the most significant differences and its implications for our copyright law system, which is dealing with copies created in a user’s computer RAM when he browses the World Wide Web. It is the most significant difference because of both its basic role in using the Web and its central role in modern copyright law. Part II of this Article provides a brief explanation of how the World Wide Web works and why this is important for copyright purposes. This Part also discusses the potential implications for end-users of the World Wide Web. Part III argues that the right to control the making of RAM copies resulting from browsing the World Wide Web is not a right that should be accorded to copyright owners. Specifically, it explores the original purpose of the reproduction right, pre-cyberworld, including examining various theories of intellectual property. Finally, Part III explains why current defenses, including fair use, implied license, and Section 117 of the Copyright Act, are not sufficient to address the problem. Part IV examines licensing and technological controls that are being used as alternatives to copyright for protecting intellectual property. This Part argues that these copyright alternatives can and sometimes do create the same problems created by protecting RAM copies.
Issue 2 – Winter 2001
The Evolving Interplay of Patent Rights and Antitrust Restraints in the Federal Circuit
Citation: 9 Tex. Intell. Prop. L.J. 137 (2001)
Author: James B. Gambrell
About: New York University, LL.B., 1957; Columbia University, M.A. Econ., 1950; University of Texas at Austin, B.S. Mech. Eng., 1949. Professor, The University of Texas School of Law.
Abstract: While there has been a warming trend in the relationship between the patent and antitrust laws, as evidenced by the promulgation of the 1995 Antitrust Guidelines for the Licensing of Intellectual Property (“Antitrust Guidelines”), issued jointly by the Department of Justice and the Federal Trade Commission (FTC), it would be inaccurate to say they are really friends. Indeed, it is doubtful that they will ever be friends in the conventional sense of the word, because an inherent tension exists between the assertion of patent rights and the restraints that antitrust imposes on any bundle of patent rights. The Chairman of the FTC recently made this point in a positive way in a speech to the American Antitrust Institute:
[T]he history of the last 110 years has treated antitrust and intellectual property as complementary regimes, both designed to encourage innovation within appropriate limits. As a matter of policy, we are comfortable rewarding innovation through patents and copyrights so long as the compensation is not significantly in excess of that necessary to encourage investment in innovation, and the market power that results is not used to distort competition . . . .
The clear import of this message is that the allocational dividing line between patent rights and antitrust restraints must balance the necessary encouragement of innovation with the need to prevent the distortion of competition. This is a more moderate statement of the venerable antitrust principle that the bundle of rights granted the patent owner should be no greater than those necessary to call forth the innovation.
The dividing line between the bundle of rights that patents give their owners and the restraints on competition that the antitrust laws forbid has to be drawn even though it is still a work in progress. The open question is which appellate court(s) in the federal system has the responsibility to draw the line or stake out the boundaries. The FCIA and prior decisions of the Federal Circuit left little doubt that the regional circuits retained that responsibility even after the creation of the Federal Circuit.
Regardless of how important it was to establish a single court to hear appeals concerning patent law issues—and this writer was a strong advocate for the creation of the Court of Appeals for the Federal Circuit—the court must accept the limitations Congress placed on its choice of law or substantive jurisdiction. If the Federal Circuit continues to try to reform patent law, as well as make over the laws of unfair competition, antitrust, etc. that touch its exclusive jurisdiction over patents, it will lose respect and become a self-fulfilling prophesy for those who felt all along that the creation of a court with exclusive jurisdiction over patents was a mistake.
The Scope of Claim Amendments, Prosecution History Estoppel, and the Doctrine of Equivalents after Festo VI
Citation: 9 Tex. Intell. Prop. L.J. 159 (2001)
Author: Peter Corcoran
About: J.D., American University Washington College of Law, 2001, and visiting student in Intellectual Property Law, Georgetown University Law Center; M.S.E.E., John Hopkins University; B.S.E.E., Florida Institute of Technology. Mr. Corcoran is a senior staff member of the American University Admin. L. Rev.
Abstract: The doctrine of prosecution history estoppel precludes a patentee from resurrecting subject matter in litigation that necessarily was surrendered during prosecution to obtain allowance. Where prosecution history estoppel applies, the scope of the estoppel should be ascertained to determine whether application of the doctrine of equivalents is barred under the particular facts of the case. In general, determining whether a claim amendment creates prosecution history estoppel should depend on the reason for the amendment. Established Federal Circuit case law and Supreme Court decisions prior to Festo VI expressly rejected the view that all equivalents are lost following a claim amendment. Determining the scope of the estoppel should require an objectivelybased, case-specific, factual inquiry into the nature of the amendment, the prior art, and other factors that prompted the amendment. Moreover, the proposed methodology to determine the scope of an estoppel is useless for unexplained amendments, and the application of the doctrine of equivalents to these types of amendments should be barred.
The overriding concern of this Article is the balance between the rights of patent holders to a fair scope of protection and the rights of their competitors to know where that scope of protection ends. The flexible approach taken by the Federal Circuit prior to Festo VI should be the guide for applying prosecution history estoppel. Estoppel should not depend on whether an amendment responds to certain enumerated statutory grounds, but whether a competitor would reasonably believe that the applicant surrendered subject matter during prosecution. This approach best serves the “public notice” function of the prosecution history while allowing patent holders an adequate scope of protection for their patented inventions.
Drafting a More Predictable Letter of Intent—Reducing Risk and Uncertainty in a Risky and Uncertain Transaction
Citation: 9 Tex. Intell. Prop. L.J. 185 (2001)
Author: Keith E. Witek
About: Wilson Sonsini Goodrich & Rosati, Technology Transactions Group, Austin, Texas. B.S., Electrical Engineering, B.S., Computer Science, University of Wisconsin—Madison; J.D., University of Texas. Member of the Texas Bar.
Abstract: In the past, letters of intent (LOIs), memorandums of understanding (MOUs), agreements to agree, memorandums of agreement, and similar documents were used rather sparingly and in very narrow transactional circumstances. Traditionally, an LOI was used only in conjunction with very high dollar transactions and/or complex arrangements. Such transactions typically included asset divestitures, mergers, large joint venture formation and operation, acquisitions involving large corporations or a combination thereof. Today, however, an LOI seems to be a common precursor even to routine transactions such as software licenses, joint development agreements, buy-sell arrangements, co-marketing arrangements, Internet deals, manufacturing services agreements, intellectual property licenses, and other similar transactions. In addition, these LOIs are being used in a business climate that is more fast-paced than ever before, where multi-million and multi-billion dollar transactions begin, and sometimes catastrophically fail, on a daily basis. Further, large high-tech corporations engaged in the global marketplace participate in more inter-company transactions now than ever before. The fast-paced and rapidly-changing transaction-generating machine that characterizes modern business, coupled with common and almost careless execution of LOIs, creates a situation in which the form and content of the LOI may mean the difference between litigation and an amicable termination to the negotiations.
Section II of this Article explains what an LOI document is and its possible legal effects. Section III then identifies common situations in today’s business environment that are likely to give rise to the use of an LOI and whether or not an LOI is advisable in those contexts. Section IV discusses the numerous factors that U.S. courts generally consider when making a determination as to whether an LOI is contractually binding, partially binding, or non-binding upon the signatory parties. Building on this information, Section V introduces a proposed model instrument that is referred to as a semi-binding LOI, or semi-binding memorandums of understanding. Section V also generally discusses the recommended terms that likely would be present in both the binding and non-binding sections of this semi-binding instrument.
Recent Developments in Trademark Law: Cybersquatters Run for Cover, while Copycats Breathe a Sigh of Relief
Citation: 9 Tex. Intell. Prop. L.J. 231 (2001)
Author: William G. Barber, Louis T. Pirkey, & Mark T. Garrett
About: Mr. Barber: Fulbright & Jaworski, L.L.P., Austin, Texas; J.D., The University of Texas School of Law. Mr. Pirkey: Partner, Fulbright & Jaworski, L.L.P., Austin, Texas; J.D., The George Washington University Law School. Mr. Garrett: Associate, Fulbright & Jaworski, L.L.P., Austin, Texas; J.D., The University of Texas School of Law.
Abstract: The arrival of the new millennium was accompanied by a flurry of activity in trademark law. Indeed, some landmark events distinguished the past year as a truly watershed year in the field.
Use of the Internet and e-commerce continues to grow exponentially, bringing more and more businesses into the realm of international commerce. Strong trademarks—and strong systems for protecting trademarks—are vitally important to the success of these businesses. As the business world continues to develop and expand, trademark law must develop with it—both on the domestic and international front. As the past year illustrates, these developments are likely to continue at a dizzying pace as trademark law struggles to keep up with technology.
Copyright Misuse or a Right to Compete?: A Critique of Alcatel USA v. DGI Technologies
Citation: 9 Tex. Intell. Prop. L.J. 269 (2001)
Author: Theodore Dorenkamp
About: J.D. University of Minnesota Law School. Winner of the Jenkens & Gilchrist 1999–2000 Competition.
Abstract: In the face of increasing pressures to more clearly define the scope and extent of a copyright in software, Congress created the Digital Millenium Copyright Act, ostensibly aimed at promoting competition and interoperability among computer software programs. However, the Act effectively conferred new power upon software copyright owners to restrict access to the ideas, concepts, procedures and processes embedded in copyrighted material. Against this tide, the Fifth Circuit has taken a strict approach, finding that an attempt by an owner of copyrighted software to restrict access to ideas through use-restriction licensing agreements effectively forfeits its copyright, creating a right to compete.
This Comment proposes that in cases where a license agreement in fact extends an otherwise valid software copyright to protect an unprotected item that forms an essential component of the function of the software, courts should apply an equitable misuse doctrine which recognizes not only a balancing of copyright interests, but also a balancing of equities. Willful infringers should not be allowed to profit in hopes of a misuse finding. A use restriction in a software licensing agreement which actually restricts infringement and which incidentally effects an anti-competitive extension of copyright should not be grounds for misuse.
Issue 3 – Spring 2001
Ex-parte Seizure of Intellectual Property Goods
Citation: 9 Tex. Intell. Prop. L.J. 307 (2001)
Author: William P. Glenn, Jr
About: William P. Glenn, Jr. is a partner with Royston, Rayzor, Vickery & Williams, L.L.P.
Abstract: Billions of dollars have been lost by American business due to the unauthorized use of trademarks, copyrights, patents, designs, and trade secrets. The loss attributed to product counterfeiting, passing off, and infringement has reached dramatic levels since U.S. Trade Representative Carla A. Hill’s 1986 report to Congress that U.S. companies have lost an estimated $43 to $61 billion due to ineffective intellectual property protection.
With the increased counterfeiting of goods, practitioners will be faced with requests for advice from clients on how to combat such debilitating activities. The purpose of this Article is to discuss the civil ex-parte remedies available to intellectual property rights owners in the State of Texas. This Article also discusses the procedures a practitioner should consider and pitfalls to avoid when making an ex-parte application to the court.
When obtaining ex-parte seizure of intellectual property goods, the practitioner should be mindful of the procedural means used to obtain the seizure. Understanding the procedural limits of Rules 64 and 65 as well as the substantive law, will assist the practitioner in assessing the facts to determine whether or not a seizure or TRO is justified. The practitioner should always plead, if available, the justification for the ex-parte relief. Failure to do so may result in a denial or significant alteration of the proposed order. It may further expose the applicant and its attorney to counterclaims if the order is granted. The All Writs Act and the general provisions of the Lanham Act and Copyright Act can be helpful in this regard. Furthermore, the practitioner should always be aware of possible counterclaims which could be levied should the seizure occur. Understanding the basis for such counterclaims can be important in crafting the application in the first hand. In short, the practitioner should refrain from overstating the facts, law, and relief requested. Finally, when crafting ex-parte applications and moving the court to provide such relief, the practitioner should be keenly aware of her duty as an officer of the court. Failure to do so exposes the applicant and practitioner to counterclaims, sanctions and/or disciplinary action.
Jurisdiction and Recognition in Transatlantic Patent Litigation
Citation: 9 Tex. Intell. Prop. L.J. 329 (2001)
Author: Fritz Blumer
About: LL.M., Harvard Law School, 2000; Dr. iur., St. Gallen University, 1996; Visiting Researcher, Max-Planck-Institute for Foreign and International Patent, Copyright, and Competition Law, Munich, 1992/93; Diploma in Electrical Engineering, ETH Zurich, 1986. Attorney-at-Law, Zurich, Switzerland. Special thanks to Professor Peter L. Murray for his valuable advice and caring guidance. Special thanks also to Professor Arthur T. von Mehren, Professor Dieter Stauder, and the management and staff of the Harvard Law School Library. [Ed.’s note: For some foreign sources and translations, the Journal relies on the author’s expertise.]
Abstract: Both American and European enterprises are uncomfortable being sued for patent infringement in a court located on the other side of the Atlantic. The reason for the unease is not only uncertainty about the outcome of the proceedings under the applicable law but also the uncertainty about jurisdiction and possible recognition of foreign judgments. In the American business world, stories are told about American companies that became defendants in Dutch proceedings even though they never did any business in Holland. In Europe, enterprises are often surprised when sued before a U.S. court in cases which are, in their view, purely “European.” This inquiry on transatlantic patent litigation attempts to present the legal situation and the underlying principles with respect to jurisdiction and recognition in a systematic way. Claims for declaratory judgment are only treated in connection with their impact on jurisdiction. No reference is made to arbitration proceedings and prorogation of jurisdiction.
The rules for jurisdiction and recognition depend on the place where relief is sought (European or American courts), the role distribution (plaintiff, defendant) and the basis of the claim (European or U.S. patent). If national courts adjudicate the validity of foreign patents at all, they do it in infringement proceedings, issuing inter partes judgments or addressing validity questions as incidental questions. For this reason, the main emphasis of the jurisdiction and recognition inquiry is on infringement proceedings. At the end of the study, the significance of the draft Hague Convention on Jurisdiction and Recognition on transatlantic patent litigation shall be summarized. The conclusions concentrate on the desirability and feasibility of common rules on jurisdiction and recognition.
Business Method Patents: Update Post State Street
Citation: 9 Tex. Intell. Prop. L.J. 403 (2001)
Author: Peter R. Lando
About: The author is an attorney in the Outsourcing Technology Solution Section with Hughes & Luce, LLP.
Abstract: When State Street Bank & Trust Co. v. Signature Financial Group, Inc. burst onto the legal stage in 1998, it put the world on notice that “methods of doing business” (MDB) were patentable subject matter in the United States under 35 U.S.C. Section 101. The Federal Circuit extended the court’s State Street pronouncements in its AT&T Corp. v. Excel Communications, Inc. decision. These decisions, along with the rapid growth of the Internet, caused many to prophesize that MDB patents would become the ultimate gatekeeper of successful Internet business models.
This Article attempts to step back from the past three years and all that has been written about MDB patents since State Street was decided, to determine where State Street has actually taken us and where MDB patents are likely to take the business world in the future.
Recent Developments in Patent Law
Citation: 9 Tex. Intell. Prop. L.J. 429 (2001)
Author: Michael O. Sutton & Christopher G. Darrow
About: Mr. Sutton received his J.D. with honors, Order of the Coif, George Washington Law School, 1973; B.S. Aerospace Engineering, cum laude, University of Alabama, 1969. He is firm-wide Leader of the Intellectual Property Law Section of Locke Liddell & Sapp. Mr. Darrow received his J.D., cum laude, Wayne State University Law School, 2000; B.S., Chemical Engineering, Michigan State University, 1997. Associate at Sidley & Austin’s Dallas office.
Abstract: This Article contains recent developments from the Federal Circuit Court of Appeals in patent law over the past year (2000). For brevity and maximum usefulness to the practitioner, this Article limits its discussion to recent Federal Circuit case law that presents a novel or interesting twist in patent law.
Without doubt, the most significant opinion from the Federal Circuit the past year was the en banc decision of Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co. The Federal Circuit decided four issues, the most significant of which is that a patentee is not entitled to rely upon the doctrine of equivalents to prove infringement of a particular element, if that element has been narrowed for any purposes related to patentability during the prosecution history. This was a fairly dramatic change in the law, which had generally held that the range of equivalents after a narrowing amendment was dependent upon the nature of the invention, the prior art, and whether the prosecution history indicated that subject matter had been clearly relinquished. Unless reversed by the Supreme Court, the repercussions of the decision surely will be felt for the next couple of decades.
One welcomed decision in the year 2000 was In re Spalding Sports Worldwide, Inc., which clarified the attorney-client privilege for patent practitioners. There is certainly more to clarify in the attorney-client privilege area. Nonetheless, not only did In re Spalding clarify the attorney-client privilege as it relates to patent law, but it also gives new hope that the Federal Circuit will grant mandamus more frequently in future cases.
One last decision that deserves special attention for the year 2000 is Winner International Royalty Corp. v. Wang, which held that the standard of review for interference appeals is de novo where a party puts on the same live testimony in the district court. Therefore, if a practitioner loses an interference case in the PTO, she should appeal to the district court to try her case de novo.