Microsoft Word + custom XML = no more?

Tuesday, Judge Davis of the Eastern District of Texas entered a permanent injunction against Microsoft, enjoining the company from:

1. selling, offering to sell, and/or importing in or into the United States any Infringing and Future Word Products that have the capability of opening a .XML, .DOCX, or .DOCM file (“an XML file”) containing custom XML;

2. using any Infringing and Future Word Products to open an XML file containing custom XML;

3. instructing or encouraging anyone to use any Infringing and Future Word Products to open an XML file containing custom XML;

4. providing support or assistance to anyone that describes how to use any infringing and Future Word Products to open an XML file containing custom XML; and

5. testing, demonstrating, or marketing the ability of the Infringing and Future Word Products to open an XML file containing custom XML.

The Court also entered final judgment, with damages:

• $200 million for infringement
• $40 million for willful infringement
• ~$11.8 million for post-verdict damages
• ~$38 million in pre-judgment interest
• (for a total of ~$290 million)

i4i sued Microsoft for infringing U.S. Patent No. 5,787,449 directed to separately manipulating the architecture and content of a document. The '449 invention relied upon a "metacode map," which allowed a reliable method of manipulating the structure of a document without reference to its content. Claims 1-13 were found to be invalid for being indefinite under 35 U.S.C. § 112 ¶ 2.

Claim 14 provides:

14. A method for producing a first map of metacodes and their addresses of use in association with mapped content and stored in distinct map storage means, the method comprising:

providing the mapped content to mapped content storage means;

providing a menu of metacodes; and

compiling a map of the metacodes in the distinct storage means, by locating, detecting and addressing the metacodes; and

providing the document as the content of the document and the metacode map of the document.

Direct Infringement

Microsoft's offered 3 arguments that there was no direct infringement: (1) no evidence that Word created a "data structure," as required by the Court's construction of the term "metacode map;" (2) insufficient evidence that Word contained "metacodes;" and (3) improper construction of the terms "distinct map storage means," "mapped content storage means," and "mapped content storage." The Court was not persuaded by any of these arguments.

Indirect Infringement

Microsoft next argued that contributory and inducement infringement was also improper. The Court explained:

A cause of action for contributory infringement flows from 35 U.S.C. § 271(c). That section provides:

Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.

35 U.S.C. § 271(c).

Induced infringement is a separate cause of action from contributory infringement. “In order to prevail on an inducement claim, the patentee must establish first that there has been direct infringement, and second that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another's infringement.” ACCO Brands, Inc. v. ABA Locks Mfr. Co., 501 F.3d 1307, 1312 (Fed. Cir. 2007) (internal quotation marks omitted). “[I]nducement requires evidence of culpable conduct, directed to encouraging another's infringement, not merely that the

inducer had knowledge of the direct infringer's activities.” Id. at 1306. Furthermore, “[t]he plaintiff has the burden of showing that the alleged infringer's actions induced infringing acts and that he knew or should have known his actions would induce actual infringements.” DSU Med. Corp. v. JMS Co., 471 F.3d 1293 (Fed. Cir. 2006) (quoting Manville Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544, 553 (Fed. Cir. 1990)).

Both forms of indirect infringement require the plaintiff to prove corresponding acts of direct infringement. See DSU Med. Corp., 471 F.3d at 1303. Importantly however, a patentee may prove both indirect infringement and the corresponding direct infringement by circumstantial evidence. See Liquid Dynamics Corp. v. Vaughan Co., 449 F.3d 1209, 1219 (Fed. Cir. 2006). “There is no requirement that direct evidence be introduced, nor is a jury's preference for circumstantial evidence over direct evidence unreasonable per se.” Id. Moreover, “[t]he drawing of inferences, particularly in respect of an intent-implicating question . . . is peculiarly within the province of the fact finder that observed the witnesses.” Rolls-Royce Ltd. v. GTE Valeron Corp., 800 F.2d 1101, 1110 (Fed. Cir. 1986); see also Fuji Photo Film Co. v. Jazz Photo Corp., 394 F.3d 1368, 1378 (Fed. Cir. 2005) (declining to disturb jury's verdict because intent to induce infringement “is a factual determination particularly within the province of the trier of fact”).

Microsoft offered 3 arguments concerning contributory infringement: (1) insufficient evidence that Microsoft knew Word was "patented and infringing;" (2) insufficient evidence that Word did not have a substantial non-infringing use; and (3) the software couldn't form the basis of a contributory infringement claim because the only claims asserted were process claims. The Court was not persuaded by any of these arguments.

Willfulness

To prevail on a charge of willful infringement, the patentee must show the accused infringer acted with objective recklessness. In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007). First, the patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions infringed a valid patent. Id. The accused infringer's state of mind is irrelevant to this objective inquiry. Id. If the patentee meets this threshold objective standard, the patentee must further demonstrate that the accused infringer knew or should have

known of this objectively high risk. Id. Whether infringement is willful is a question of fact and reviewed for substantial evidence. Metabolite Labs., Inc. v. Labs. Corp. of Am. Holdings, 370 F.3d 1354, 1359 (Fed. Cir. 2004).

Microsoft offered a number of arguments, none of which were convincing to the Court, including: (1) because the Court invalidated some claims of the '449 patent, Microsoft asserted defenses to the remaining claims, and i4i involuntarily dismissed some accused products, there was no willfulness; and (2) insufficient evidence of whether Microsoft knew of the likelihood of infringement.

The Court then addressed obviousness and anticipation, as well damages.

The Court's claim construction order (also granting partial summary judgment of invalidity) can be found here. Supplemental claim construction here.

The Court's 65-page memorandum and order can be found here. The permanent injunction can be found here. And the final judgment can be found here.

i4i Ltd. v. Microsoft Corp., Case No. 6:07-CV-00113-LED (E.D. Tex. Aug. 11, 2009).

Computer programs are functional, and are patent eligible when recorded on computer-readable medium.

William Bodin and Derral Thorson invented a virtual camera and method for editing and browsing images for virtual cameras. Claims 17-24 were rejected under 35 U.S.C. § 101 as being directed to non-statutory subject matter. For example, claim 17 claimed:

A computer program product for digital imaging, the computer program product comprising: a recording medium; means, recorded on the recording medium, for creating, in the virtual camera, an unedited image request for an unedited digital image; ...

The Examiner found these claims non-statutory because the claims were directed to the computer program product itself, which is not embodied on a computer readable medium. The Board of Patent Appeals and Interferences disagreed. First, the law:

Under § 101, there are four categories of subject matter that are eligible for patent protection: (1) processes; (2) machines; (3) manufactures; and (4) compositions of matter. 35 U.S.C. § 101. But even if a claim fits within one or more of the statutory categories, it may not be patent eligible. In re Ferguson, 558 F.3d 1359, 1363 (Fed. Cir. 2009).

“[A]n applicant may show that a process claim satisfies § 101 either by showing that his claim is tied to a particular machine, or by showing that his claim transforms an article” into a different state or thing. In re Bilski, 545 F.3d 943, 961 (Fed. Cir. 2008) (en banc), cert. granted, 77 U.S.L.W. 3442, 3653, 3656 (U.S. June 1, 2009) (No. 08-964); see also Gottschalk v. Benson, 409 U.S. 63, 70 (1972).

“[A] machine is a concrete thing, consisting of parts, or of certain devices and combination of devices. This includes every mechanical device or combination of mechanical powers and devices to perform some function and produce a certain effect or result.” Ferguson, 558 F.3d at 1364 (quoting In re Nuijten, 500 F.3d 1346, 1355 (Fed. Cir. 2007), reh’g denied en banc, 515 F.3d 1361 (Fed. Cir. 2008), and cert. denied, 129 S. Ct. 70 (2008)).

IBM, who owns the patent application, argued that the claims expressly include "a recording medium" and the means-plus-function clauses "record on the recording medium for digital imaging." The Board then explained:

Computer programs and data structures are deemed “functional descriptive material,” which impart functionality when employed as a computer component. When functional descriptive material is recorded on some computer-readable medium, it becomes structurally and functionally interrelated to the medium and will be statutory in most cases since use of technology permits the function of the descriptive material to be realized. Compare In re Lowry, 32 F.3d 1579, 1583-84 (Fed. Cir. 1994) (claim to data structure stored on a computer readable medium that increases computer efficiency held statutory) with In re Warmerdam, 33 F.3d 1354, 1361-62 (Fed. Cir. 1994) (claim to computer having a specific data structure stored in memory held statutory product-by-process claim but claim to a data structure that referred to ideas reflected in nonstatutory process rather than referring to a physical arrangement of the contents of a memory held nonstatutory).

Finally, the Board found that the "recording medium" disclosed in the Specification was equivalent to a computer-readable medium, and thus the Examiner's rejection was reversed.

Ex parte Bodin, 2009-002,913 (BPAI Aug. 5, 2009)

University of South Florida's amicus brief in Bilski

USF has filed an amicus brief in Bilski (which you can find on patently-o here).

USF argues that Bilski's impact on medical innovations is particularly troublesome. USF starts its discussion with the Constitution, and argues that medicine had been known for thousands of years as one of the "useful Arts." From Hippocrates (whose oath refers to medicine as "the art") to the first edition of the Encyclopædia Britannica (which defined medicine as "The art of preserving health...") to Thomas Jefferson (whose letters showed that he considered medicine one of the "useful Arts"), medicine was and is a "useful art." When Article I, Section 8 of the Constitution was drafted, the framers intended to include medicine as one of the "useful arts" to be protected.

USF next moves to Congress, and argues that when it enacted the first Patent Act, and ever since, it has consistently intended to include protecting medical innovations with patents. USF concludes:

The Federal Circuit’s “machine-or-transformation” test as set forth in In re Bilski is more restrictive than required by this Court’s precedent and finds no support in any legislation. In practice, it has already been applied to strike down patents directed to methods of immunizing patients with improved efficacy and safety thereby casting a cloud on the validity of a great many process patents in the medical and biotechnological fields.

The “machine-or-transformation” test is a useful starting point for analysis of patent eligibility of process claims. However, if a process claim is not tied to a particular machine or does not recite transformation of an article into a different state or thing, the inquiry should not stop there, as the process may still be patent eligible as long as it does not attempt to claim “laws of nature, natural phenomena, [or] abstract ideas.” Diamond v. Diehr, 450 U.S. 175, 185 (1981).

Naked Cowboy dismisses lawsuit against Clear Channel

The Naked Cowboy had sued Clear Channel to protect his trademark. Bloomberg covered it here. Tampa blogs covered it here. (And completely unrelated to this post, but he's also running for mayor of New York.)

His complaint (filed May 28, 2009) was that a Tampa radio station, 93.3 FLZ, infringed his rights when it aired an "imposter" Naked Cowboy. He also alleged that 51 videos of the imposter were put on youtube, which the station then linked to on its website. He alleged that one of the station's employees appeared in the Naked Cowboy's signature attire: a white cowboy hat, white cowboy boots, white underpants, and an acoustic guitar.

Very exciting. Yesterday, he dismissed his lawsuit against Clear Channel.

Robert Burck d/b/a The Naked Cowboy v. Clear Channel Communications, Inc., Case No. 2:09-CV-02560-SDW-MCA (D.N.J.)

Hotels + .com is still generic

Hotels.com sought to register its service mark HOTELS.COM for the services of "providing information for others about temporary lodging; travel agency services, namely, making reservations and bookings for temporary lodging for others by means of a telephone and the global computer network." The Trademark Trial and Appeal Board upheld the Examiner's reject and found it to be generic for those services.

Hotels.com argued on appeal that HOTELS.COM is not generic because the website does not provide lodging, and thus is not synonymous with the word "hotel" and because Hotels.com offered survey evidence showing its mark was widely associated with applicant, and not viewed as a generic term.

The Federal Circuit explained the law:

Whether a particular term is generic, and therefore cannot be a trademark or service mark, is a question of fact. In re Reed Elsevier Props., Inc., 482 F.3d 1376, 1378 (Fed. Cir. 2007). The Patent and Trademark Office (PTO) bears the burden of establishing that a proposed mark is generic, In re Merrill Lynch, Pierce, Fenner, & Smith, Inc., 828 F.2d 1567, 1571 (Fed. Cir. 1987), and must demonstrate generic status by clear evidence. See Trademark Manual of Examining Procedure 1209.01(c) (i) (4th ed. 2005) (“The examining attorney has the burden of proving that a term is generic by clear evidence.”); 2 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition §12:12 (4th ed. 2008) (“As Judge Posner remarked [in Ty Inc. v. Softbelly’s Inc., 353 F.3d 528, 531 (7th Cir. 2003)]: ‘To determine that a trademark is generic and thus pitch it into the public domain is a fateful step.’”).

* * *

A generic term cannot be registered as a trademark, for generic terms by definition are incapable of indicating source. Merrill Lynch, 828 F.2d at 1569; see H. Marvin Ginn Corp. v. Int’l Ass’n of Fire Chiefs, Inc., 782 F.2d 987, 989-90 (Fed. Cir. 1986) (a generic term is the common name for the genus of goods or services being sold). However, a term that is descriptive, but not generic, may acquire distinctiveness and serve as a trademark. “Whether a term is entitled to trademark status turns on how the mark is understood by the purchasing public.” In re Montrachet S.A., 878 F.2d 375, 376 (Fed. Cir. 1989). In the generic-descriptive-suggestive-arbitrary-fanciful continuum of words and their usage as marks of trade, there is no fixed boundary separating the categories; each word must be considered according to its circumstances. See In re K-T Zoe Furniture, Inc., 16 F.3d 390, 393 (Fed. Cir. 1994) (“[D]escriptive terms describe a thing, while generic terms name the thing. . . . there is only a fine line between describing and naming.” (quoting 1 McCarthy, §12.05[1] (3d ed. 1992))).

The Court agreed with the lower tribunals and found that the word "hotels" did not lose its genericness simply by being combined with ".com"

Rejection affirmed.

In re Hotels.com, L.P., Case No. 2008-1429 (Fed. Cir. July 23, 2009)

USPTO was arbitrary and capricious over $10

The PTO granted Jorge Taylor U.S. Patent No. 5,178,701 relating a chemical sealant device for fixing flat tires. Mr. Taylor's 7 1/2 year maintenance fee was due between January 12, 2000 and January 12, 2001. If he paid between January 12, 2000 and July 12, 2000, the fee was $975. If he paid between July 13, 2000 and January 13, 2001, the fee was $975 plus a $65 surcharge, for a total of $1,040.

Mr. Taylor claims the PTO told him by telephone that the fee to pay was $1,030. So that's what he paid on January 13, 2001. The PTO kept the cash.

In 2004, Mr. Taylor called the PTO in advance of paying the 11 1/2 year maintenance fee (perhaps to find out how much?). The PTO then informed him that his patent was expired because he hadn't paid the 7 1/2 year maintenance fee.

Mr. Taylor then sent a number of letters asking for resinstatement (the PTO treated these each as petitions, but denied them without reviewing the merits as Mr. Taylor did not submit the $200 petition fee). Mr. Taylor explained that he could not afford the $200 petition fee, but that he "would not wave [sic] my money nor my patent without a fight." He explained:

1) You never billed me, but told me over the phone that my fee was $1030.00. I paid you that much.

2) You cashed my check, pocketed my $1030.00 and expired my patent for lack of payment. You then never informed me otherwise. I also have proof that I paid this amount of $1030.00. You kept me in the dark over a $10.00 discrepancy for over 3 years so that you could keep the $1030.00 and expire my patent, without my knowledge, for lack of payment. If I did not pay the fee why would you cash my check? How convenient, like a thieve [sic] in the night, never informed me of your malfeasant [sic]. If there were any discrepancies as to the fee owed and the fee paid, you should have made me aware so that the transaction could have been corrected.

2 year laters, Mr. Taylor sued the PTO for misappropriation of his $1,030, and sought damages of $1 billion (his estimated value of his patent). The district court dismissed under Fed. R. Civ. P. 12(b)(6). Mr. Taylor appealed to the Federal Circuit in forma pauperis.

Keeping Mr. Taylor's money while expiring his patent was not cool:

This court finds that the Office’s course of action in accepting Mr. Taylor’s deficient payment on the one hand, while on the other hand expiring his patent without notifying him under MPEP § 2531 that his payment was inadequate, was arbitrary and capricious.

The Court then remanded the case to the district court with instructions to exercise its equitable powers and reinstate Mr. Taylor's patent upon receipt of payment of all outstanding maintenance fees.

Taylor v. U.S. Patent and Trademark Office, Case No. 2009-1133 (Fed. Cir. Aug. 4, 2009)

It's no Goud (sorry -- weak pun)

Goud and Zimmer invented a system abstraction layer for a basic input/output system (BIOS) program which enables selection from among at least 2 different processor abstraction layer (PAL) components.

Claims 1 is illustrative:

1. A method comprising:

providing at least two selectable processor abstraction layer B components within one basic input/output system program

The Examiner rejected this claim as being directed to non-statutory subject matter. The Board explained the basics:

Under § 101, there are four categories of subject matter that are eligible for patent protection: (1) processes; (2) machines; (3) manufactures; and (4) compositions of matter. 35 U.S.C. § 101. While the scope of patentable subject matter encompassed by § 101 is “extremely broad” and intended to “‘include anything under the sun that is made by man,’” it is by no means unlimited. In re Comiskey, 554 F.3d 967, 977 (Fed. Cir. 2009) (quoting Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980)). For example, laws of nature, abstract ideas, and natural phenomena are excluded from

patent protection. Diamond v. Diehr, 450 U.S. 175, 185 (1981).

It is the second exclusion noted above—abstract ideas—that is relevant to the appeal before us. Thus, even if the claimed invention nominally recites subject matter that falls within the enumerated categories under § 101, the claimed invention would still not recite patentable subject matter if the claim as a whole is nonetheless directed to an abstract idea. As the U.S. Supreme Court has noted, “‘[a]n idea of itself is not patentable[]’….‘A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right.’” Id. at 185 (citations omitted).

In determining whether a claim as a whole is directed to an abstract idea, the Court has drawn a key distinction between (1) claims that seek to wholly pre-empt the use of a fundamental principle, and (2) claims that are merely limited to foreclosing others from using a particular application of that fundamental principle. See In re Bilski, 545 F.3d 943, 957 (Fed. Cir. 2008) (en banc), cert. granted, 77 U.S.L.W. 3442, 3653, 3656 (U.S. June 1, 2009) (No. 08-964).

Machine or Transformation? -- It's "rife with physical materials"

Applicants argued that claim 1 is "rife with physical materials" because it calls for processor abstraction layer B components and a BIOS program. Thus, according to Applicants, "the claim is statutory because it recites at (1) program, and (2) a concrete and tangible result, namely a BIOS program 'with certain characteristics never before seen in the prior art.'" The Board did not agree.

Claim 1 is not tied to a particular machine

[E]ven assuming, without deciding, that a machine were required to implement the recited method, such a machine would not be a particular machine as Bilski requires. See Bilski, 545 F.3d at 961-62. At best, such a nominal structural recitation would be a tantamount to a general purpose computer and would not tie the process to a particular machine or apparatus.⁵ Indeed, such a nominal recitation of physical structure tantamount to a general purpose computer is analogous to the recitation of storing binary coded decimal signals in a shift register that the U.S. Supreme Court found to be unpatentable in Benson. See Benson, 409 U.S. at 73 (listing claim 8 which calls for, in pertinent part, “storing the binary coded decimal signals in a reentrant shift register”) (emphasis added). In any event, “[n]ominal recitations of structure in an otherwise ineligible method fail to make the method a statutory process.” Ex parte Langemyr, App. No. 2008-1495, slip op., at 20 (BPAI May 28, 2008) (Informative) (citing Benson, 409 U.S. at 71-72), available at http://www.uspto.gov/web/offices/dcom/bpai/informative_opinions.html (last visited Mar. 15, 2009).

Claim 1 also does not transform a particular article into a different state or thing

We also find that claim 1 does not transform a particular article into a different state or thing. Merely providing selectable components within a program, in effect, provides a particular program with those components. Merely providing a program with particular components, however, falls well short of transforming a particular article into a different state or thing as Bilski requires.

^5. In Gottschalk v. Benson, 409 U.S. 63 (1972), the Court held that claims directed to a method for converting binary-coded-decimal (BCD) numerals into pure binary numerals for use with a general-purpose digital computer were nonstatutory under § 101.

Rejections affirmed.

Ex parte Goud, No. 2008-003121 (July 20, 2009)