Inventive Steps

Two patent decisions in the Federal Court …

In Dynamite Games Pty Ltd v Aruze Gaming Australia Pty Ltd [2013] FCA 163 the Court has revoked two patents registered to Dynamite Games, a developer of gaming products. The Court found that the patents, for specifications that provided a guaranteed event of benefit to players within set amount of game play, lacked the requisite inventive step.

In Delnorth Pty Ltd v Commissioner of Patents [2013] FCA 165 Nicholas J has upheld an appeal by the patentee against the Commissioner's decision of 21 July 2011 - reported as Re Delnorth Pty Ltd (2011) 93 IPR 326 - to revoke several claims of Australian standard patent No 2004249786.  That patent involves an invention relating to "roadside posts for supporting signage or delineating paths, roadways or boundaries", with claim one describing the post as "comprising an elongate body formed of sheet spring steel and having a longitudinal axis, a front face and a rear face, wherein: said body is elastically bendable through 90 degrees from an unbent state about a transverse axis transverse to said longitudinal axis, said front and rear faces transversely extending generally parallel to said transverse axis".

Under s 101(4) of the Act the Court is required to exercise de novo the power conferred on the Commissioner to revoke a standard patent on the grounds that, when compared with the prior art base as it existed before the priority date, it was not novel or it did not involve an inventive step. The Commissioner's decision to revoke the relevant claims of the Patent was preceded by two re-examination reports (in July and November 2010). The patentee responded only to the first report but applied to make amendments to the claims which were allowed. The Commissioner decided to revoke various claims, notwithstanding the amendments, with claims 1 to 10, 13 to 21, 24 to 28, 32 and 36 on the ground that none of them involve an inventive step.

Nicholas J indicates that "The question for decision is whether, on the evidence now before me, any of the relevant claims should be revoked on the ground that it did not involve an inventive step as at the priority date of 23 June 2003", going on to consider evidence prior to a conclusion that "In my view the evidence does not justify a finding that any of the claims which were revoked by the delegate is invalid. Accordingly, the decision of the delegate under s 101(1) of the Act to revoke claims 1 to 10, 13 to 21, 24 to 28, 32 and 36 of Australian Patent No 2004249786 should be set aside".

NCAT

The Civil and Administrative Tribunal Act 2013 (NSW) establishes the Civil and Administrative Tribunal of New South Wales - aka NCAT - a supertribunal along the lines of ACAT (in the ACT) and VCAT (in Victoria), with effect from January 2014.

The object of the Act is "to establish an independent Civil and Administrative Tribunal of New South Wales to replace various existing tribunals". Those tribunals are  the

• Aboriginal and Torres Strait Islander Health Practice Tribunal of NSW
• Chinese Medicine Tribunal of NSW
• Chiropractic Tribunal of NSW
• Dental Tribunal of NSW
• Medical Radiation Practice Tribunal of NSW
• Medical Tribunal of NSW
• Nursing and Midwifery Tribunal of NSW
• Occupational Therapy Tribunal of NSW
• Optometry Tribunal of NSW
• Osteopathy Tribunal of NSW 
•  Pharmacy Tribunal of NSW
•  Physiotherapy Tribunal of NSW 
•  Podiatry Tribunal of NSW
• Psychology Tribunal of NSW
• Aboriginal Land Councils Pecuniary Interest and Disciplinary Tribunal 
• Administrative Decisions Tribunal of NSW 
•  Charity Referees (under s 5 of the Dormant Funds Act 1942 (NSW))
• Consumer, Trader and Tenancy Tribunal of NSW 
• Guardianship Tribunal 
• Local Government Pecuniary Interest and Disciplinary Tribunal 
• each local land board constituted under the Crown Lands Act 1989 (NSW)
• Victims Compensation Tribunal.

Void

Given my interest in workplace privacy I was delighted to see Void Where Prohibited: Rest Breaks and the Right to Urinate on Company Time (Cornell University Press, 1998) by Marc Linder & Ingrid Nygaard, a 265 page work now available through the HathiTrust.

Linder & Nygard comment that

 Fashionable theories of post-industrialism and post-Fordism have blinded many to the uncomfortable reality of working conditions in the United States that are more evocative of the accounts drawn by Engels and Dickens than of the imagined anodyne workplace of the 21st century This book focuses on the persistence of one such aspect of industrial life - the lack of a universal entitlement to withdraw from the inexorable flow of production in order to rest and void during the workday. Although federal and state law requires employers to provide toilets, incredibly, government agencies do not require employers to permit workers to use them. In placing this regulatory breakdown in the broader context of the history of capital-labor struggles over rest periods, the book focuses on the physiological consequences for workers who are prohibited from interrupting work to rest or urinate.

Judicial Archives

'Judges and Their Papers' by Kathryn A. Watts in (2013) New York University Law Review comments

Who should own a federal judge’s papers? This question has rarely been asked. Instead, it has generally been accepted that the justices of the U.S. Supreme Court and other federal judges own their own working papers, which include papers created by judges relating to their official duties, such as internal draft opinions, confidential vote sheets, and case-related correspondence. This longstanding tradition of private ownership has led to tremendous inconsistency. For example, Justice Thurgood Marshall’s papers were released just two years after he left the bench, revealing behind-the-scenes details about major cases involving issues like abortion and flag burning. In contrast, Justice David Souter’s papers will remain closed until the 50th anniversary of his retirement, and substantial portions of Justice Byron White’s papers, including files relating to the landmark case of Miranda v. Arizona, were shredded. In addition, many collections of lower federal court judges’ papers have been scattered in the hands of judges’ families. Notably, this private ownership model has persisted despite the fact that our country’s treatment of presidential records shifted from private to public ownership through the Presidential Records Act of 1978. Furthermore, private ownership of judicial papers has endured even though it has proven ill-equipped to balance the many competing interests at stake, ranging from calls for governmental accountability and transparency on the one hand to the judiciary’s independence, confidentiality and collegiality on the other.

This Article is the first to give significant attention to the question of who should own federal judges’ working papers and what should happen to the papers once a judge leaves the bench. Upon the 35th anniversary of the enactment of the Presidential Records Act, this Article argues that judges’ working papers should be treated as governmental property — just as presidential papers are. Although there are important differences between the roles of President and judge, none of the differences suggest that judicial papers should be treated as a species of private property. Rather, the unique position of federal judges, including the judiciary’s independence, should be taken into account when crafting rules that speak to reasonable access to and disposition of judicial papers — not when answering the threshold question of ownership. Ultimately, this Article — giving renewed attention to a long forgotten 1977 governmental study commissioned by Congress — argues that Congress should declare judicial papers public property and should empower the judiciary to promulgate rules implementing the shift to public ownership. These would include, for example, rules governing the timing of public release of judicial papers. By involving the judiciary in implementing the shift to public ownership, Congress would enhance the likelihood of judicial cooperation, mitigate separation of powers concerns, and enable the judiciary to safeguard judicial independence, collegiality and confidentiality.  

Patents

'A Rational System of Design Patent Remedies' by Mark A. Lemley at Stanford Law School argues that

A design patent owner who wins her suit is entitled to the defendant's entire profit from the sale of the product, whether or not the design was the basis for buying the product. No other IP regime has this rule, and it makes no sense in the modern world, where a design may cover only a small component of a valuable product. The culprit is section 289 of the Patent Act, a provision added in the nineteenth century, when design patents were very different than they are today. We should abolish section 289 and bring rationality to design patent remedies.

Lemley comments that

In the summer of 2012, a jury in San Jose, California awarded Apple the largest extant patent damages verdict in history, over $1 billion, in its case against Samsung The case attracted enormous press attention. The verdict was rightly portrayed as a big win for Apple, but also generally understood to be just one small piece in a much larger smartphone patent fight that has entangled all the companies and led to more than fifty lawsuits. While everyone agrees $1.05 billion is a lot of money, it also seems to be just a cost of doing business for Samsung, one of many costs in a global fight that has cost nearly $20 billion so far and shows no signs of abating. In one important respect, however, $1.05 billion is not simply a cost of doing business. For the phones at issue in the case, it was the entirety of the business. $1.05 billion wasn’t a reasonable royalty on the sale of technology covered by a patent; it represented Samsung’s entire profit from the products at issue in the case. Never mind Samsung’s own patents, its engineering and design work, or the technologies of Google and countless other inventors incorporated in the Samsung phones. The jury awarded all the profit from the sale of those phones, regardless of source, to Apple as damages. And curiously, it was parts of Apple’s product design, not any technical features, that was responsible for the overwhelming majority of the damages award.

The jury did this because current law required it to. Unlike patents on technical inventions, or for that matter copyrights or trademarks, design patent law requires that infringers – even innocent infringers – pay the plaintiff their entire profit from the sale of the infringing product, even if the design was only a small feature of that product.

That rule, developed more than a century ago, makes no sense. As applied to a modern, multi-component product it drastically overcompensates the owners of design patents, and correspondingly undervalues technical innovation and manufacturing know-how. It punishes even innocent infringers, particularly now that one can infringe a design patent merely on a finding that two independently developed designs are too similar to the ordinary observer. And it leaves troubling questions about what to do with all the other claimants to a share of the defendant’s profits. There can be no question that the entire profits rule has to go; the only question is how to get rid of it. I begin in Part I by discussing how we got to this unfortunate pass. In Part II, I describe the problems the entire profits rule creates for innovation and competition. I conclude in Part III by offering some suggestions for what to do about the rule.

DRM

'A Political History of DRM and Related Copyright Debates, 1987-2012' by Bill D. Herman in (2012) 14 Yale Journal of Law & Technology 162-225 comments that

 Scholars who discuss copyright often observe that the voices for stronger copyright have more financial and political capital than their opponents and thus tend to win in Congress. While those facts are historically true, since the turn of the century, the politics around the issue have shifted substantially and become much messier and less predictable. This study illustrates this changing policy dynamic via a detailed political and legislative history of the major proposals regarding digital rights management and related areas of copyright, from 1987 to the present day.

In 1987, there was no organized opposition to copyright’s expansion. Within fifteen years, however, there was a substantial coalition of opposition, including public intellectuals, allied journalists, and newly-founded nonprofits. By the mid- 2000s, this coalition had substantially slowed the expansion of copyright and even won substantial legislative support for proposals to limit copyright’s reach. Despite being badly outspent and having far fewer allies in Congress, the “strong fair use” coalition had fought the “strong copyright” coalition to a draw in two key debates in the mid-2000s. In early 2012, the strong copyright coalition tried to push through a pair of bills with far- reaching implications for the Internet ecosystem — and it looked like they would ultimately prevail, until Internet activism led millions of voters to contact Congress in opposition. By looking at the political histories of all of these proposals in one place, this article shows an unmistakable trajectory in the politics of copyright, from an era of relatively easy inter-industry negotiation toward an era in which copyright industries face a permanent, principled opposition, emboldened by having executed the largest online protest in history.

ACPA v UDRP

'What is in a Name?' A Comparative Look at the ICANN Uniform Domain Name Dispute Resolution Policy and the United States Anti-Cybersquatting Consumer Protection Act' by Terrence Fernbach is a 54 page Munich Intellectual Property Law Center (MIPLC) Master's Thesis.

Fernbach argues that

Since the establishment and rise of the Internet, there have been situations where others have tried to capitalize on the unique nature of domain names by registering domain names of popular trademarks and/or individuals’ names, and then turning around and selling these domain names to the owners of the trademark or to the individual. This action, known as “cybersquatting”, has been the reason for the enactment of multiple dispute resolution systems by both governments and private institutions. Further, the amount of cybersquatting cases has increased over the years, with the World Intellectual Property Organization reporting increases in cybersquatting cases over the past few years.

This thesis is designed to be more of a practical guide for an American attorney who is faced with domain name dispute case. As a result, this thesis will focus on the International Corporation for Assigned Names and Numbers’ (ICANN) Dispute Resolution Policy, and the Anti-Cybersquatting Consumer Protection Act (ACPA). This thesis will provide three different hypothetical scenarios that may arise in domain name disputes: where two parties have the same name, or where an individual in engaging in a form of cybersquatting, or where a group has created a website for the purposes of criticizing a corporation. This thesis will also highlight the advantages and disadvantages of the ICANN procedures as laid out in the Uniform Domain Name Dispute Resolution Policy (UDRP) and the procedures available under United States federal law as laid out in the ACPA, and discuss legal strategies and probable outcomes for the three different hypothetical scenarios. Finally, this thesis will conclude that while ICANN’s Dispute Resolution Policy has some disadvantages when compared to the ACPA, it is the better dispute resolution option to use for most cybersquatting activities due to its relative speed, efficiency and lower cost, but the Lanham Act provisions as outlined by the ACPA are better suited for those cases where the client wishes for more remedies than just the transfer or the cancellation of the disputed domain name.

 In discussing ACPA he comments that

There are a few advantages in using the ACPA. First, the ACPA is a good method to use in trying to acquire an infringing domain name from a foreign cybersquatter. This is because of the ACPA’s in rem provisions, and the ACPA does not have the same burdens of proof that are found in the UDRP. However, it is important to note that the in rem provisions only apply if the disputed domain name was registered with a registrar or other domain name authority that is located within the United States.

Second, the ACPA also allows for monetary damages, statutory damages and injunctive relief, in addition to the same remedies available under the UDRP. This gives a wide array of remedies available to a plaintiff, most of which are unavailable by the UDRP. Also, the ACPA has the same remedies at its disposal as the UDRP, so the plaintiff can still seek the same relief that would be afforded by the UDRP while also seeking other remedies.

Third, unlike the UDRP, the parties can freely engage in discovery. This allows the plaintiff to access information regarding prior registrations done by the defendant, if any, and to access other information that could help establish the bad faith aspects of the plaintiff’s claim. Also, since this is a federal court action and not an arbitration panel, the parties can attack the credibility of each other’s testimony. This can not happen in the UDRP proceedings, which has the potential of becoming a sort of “I said – he said” situation, with both parties stating their respective submissions are accurate to the best of their knowledge.

Fourth, under the ACPA, the plaintiff can also seek damages from the domain name registrar, provided the plaintiff can prove the registrar acted with bad faith to profit from the registration and maintenance of the infringing domain name. While the UDRP does not have any liability provisions for domain name registrars, the ACPA, through its safe harbor provisions, only waives a registrar’s liability if they act in due diligence and in good faith. This provision allows a plaintiff a cause of action against domain name registrars who basically aid in cybersquatting. Combined with the in rem provisions of the ACPA, the plaintiff can get a cause of action against the domain name itself and, if applicable, get monetary damages from the domain name registrar.

Finally, unlike the ICANN arbitration panels, the federal courts are better suited to handle more complex litigation issues, such as affirmative defenses of acquiescence and fair use. Also, false advertising and unfair competition claims are outside the realm of the UDRP arbitrators. Meanwhile, these issues can be dealt with fairly in the federal courts. As a result, if a plaintiff would have a more complex domain name dispute issue, they would probably be better off using the ACPA instead of the UDRP.

Disadvantages of the ACPA

While there are benefits in using the ACPA for a domain name dispute, there are some disadvantages as well. First, federal litigation is not very fast. In fact, it may take months or even years to finally get a case resolved in federal court. This is not a great option for the plaintiff who wants to quickly get a domain name from the registrant/defendant.

Second, federal litigation is expensive. While arbitration under the UDRP may cost around the mid four-figure range, including agency and arbitration panel fees and attorney’s fees, federal litigation will cost a lot more, and could range in the tens of thousands of dollars at least. Considering the usual remedies involved in a domain name dispute, the plaintiff in an ACPA action might end up winning a Pyrrhic victory, spending a huge sum of money for what could have been achieved, at a much lower cost, using an arbitration proceeding under the UDRP.

Third, while the in rem provisions seem like an advantage, it may not prove to be much of an advantage when compared to the UDRP. In the ACPA, the plaintiff can get in rem jurisdiction only if the applicable domain name registrar is within a federal judicial district. On the other hand, the UDRP Policy applies to any domain name registrar that has agreed to be bound by the UDRP Policy. This gives the complainant an opportunity to get relief under the UDRP with a foreign domain name registrant as opposed to the in rem provisions of the ACPA, since the UDRP Policy can apply to domain name registries and registrars outside of the United States, which the ACPA only applies to American registries and registrars. Considering the remedies are the same for these two different provisions, it might be a better option for a plaintiff to use the UDRP Policy instead of the ACPA. Fourth, as eluded to earlier, federal judges may not necessarily be experts in trademark law. It is quite possible that a federal litigation using the ACPA may be presided over by a judge with no real experience in trademark law or with domain name issues. While having a case presided over by a judge who is unfamiliar with the nuances of the legal issues behind the case is a potential problem with any federal litigation, it could be a problem in a domain name dispute case, especially when dealing with concepts such as parody and fair use.

Just like the UDRP, the ACPA has a series of advantages and disadvantages that will require the plaintiff to consider whether they want to use the ACPA or use the cheaper and faster UDRP arbitration proceedings.