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IP, Patent

An Examination Of Patent Sausage-Making

As I’ve discussed on this blog, and elsewhere, the Interval Licensing case against Google and several other search, advertising and e-commerce companies makes for a fascinating study on many levels.  In particular, the actions of lawyers on both sides of this case speak volumes about how your IP rights are treated during litigation.  Consider, for example, the current argument over whether the complaint filed by Interval provides enough specificity to Google and the other defendants:

Paul Allen’s patent infringement complaint against the world and its dog has been dismissed.

So proclaims Groklaw, discussing Judge Pechman’s decision to summarily dismiss Interval Licensing’s patent infringement lawsuit.  However, while Google and its co-defendants may have won this battle, the war is far from over, since Interval will have another chance to amend its complaint before year end. A scheduling conference was scheduled for yesterday, and the likely result of that hearing will be an order identifying a date when Interval will have to disclose the claims and basis for its infringement accusations.  Examining the background and resolution of this in more detail, anyone making or defending accusations of patent infringement should look at this scenario and realize the resources that were expended to accomplish so little.  Other than a moral victory, and justification for the billable hours consumed on this early motion practice, the end result will offer little benefit to the defendants.  Over at Techdirt, Mike Masnick chalk’s the issue up to “sloppy lawyering.” I can’t really say that Mike is wrong with that assessment, as the amount of specificity that’s required is still fairly minimal, and Interval’s lawyers not only failed to meet that requirement, but made the mistake of fighting (and losing) Google’s motion.  However, all of this was likely intentional, so if knowingly leaving your shirt untucked is sloppy, then so was this execution.  More on that in a minute, but first a little legal background.

The federal court system provides a form complaint for patent infringement, which includes the following allegation of infringement:

The defendant has infringed and is still infringing the Letters Patent by making, selling, and using electric motors that embody the patented invention, and the defendant will continue to do so unless enjoined by this court.

The form complaint is strengthened by Federal Rule 84, which says that “The forms in the Appendix suffice under these rules and illustrate the simplicity and brevity that these rules contemplate.”  Unfortunately for Interval, the Judge wasn’t persuaded:

“The Court does not find it necessary to determine whether Form 18 is no longer adequate under Twombly and Iqbal because Plaintiff’s complaint fails to satisfy either the Supreme Court’s interpretation of Rule 8 or Form 18.”

Given such a vague example, and the apparent strength of relying on the rule, the outcome is really surprising.  What sort of allegation could be more vague than “electric motors that embody the patented invention”?  With that in mind, take a look at one of Interval’s infringement allegations:

24.  Defendant Google has infringed and continues to infringe one or more claims of the ’507 patent. Google is liable for infringing the ’507 patent under 35 U.S.C. § 271 by making and using websites, hardware, and software to categorize, compare, and display segments of a body of information as claimed in the patent.

Interval’s allegation has its own reference to the patent (“categorize, compare, and display … as claimed in the patent”).  The key difference is really Interval’s description of “websites, hardware and software” compared with the form complaint’s accusation of “electric motors.”   While one might reasonably argue that these descriptions are equally vague, given the vast array of hardware and software used by any large enterprise (contrasted with the volume and types of electric motors made by a manufacturer), it’s probably generous to say that Interval’s allegation are bare-bones.

Unfortunately, it’s only natural for Interval’s lawyers to want to push these boundaries.  “Litigation is war, so why give the enemy more information if you don’t have to?” or so the thinking goes.  But consider Interval’s real motivation behind the lawsuit? Are they more interested in fighting a war, or making money?  Chances are, its the latter, which is a fact utterly lost on most litigators.  Withholding such basic information typically discourages deal-making and causes the parties to mistrust one-another.

Meanwhile, on the other side of the fence, Groklaw cheers the defendants on:

Go Google. That was their argument in their motion to dismiss, along with AOL’s. Google said the complaint was too vague to meet the standard under Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) and Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). Then, after Interval Licensing brought up the lower patent form standard it thought should apply instead, AOL jumped in saying the complaint was too vague under even that standard, and the court agreed. I’m happily surprised.

So what did Google win, exactly?  Let’s take a closer look at the order:

The Court gives Plaintiff leave to file an amended complaint [on] the same date by which Plaintiff contends it will file its purportedly curative and detailed infringement contentions.  …

***

In amending the complaint, Plaintiff must identify which of Defendants’ products, devices, or schemes allegedly infringe on Plaintiff’s patents. Plaintiff need not describe how the accused devices satisfy each limitation of each asserted claim. See McZeal, 501 F.3d at 1357. Plaintiffs should, where possible, set forth the specific websites that are at issue and identify the hardware and software with adequate detail for Defendants to know what portions of their business operations are in play in this litigation.

Looking at the second emphasized portion first, the Judge specifically instructs Interval that any specifics about its reasoning are not required, meaning Google and its co-defendants are likely to get less information than what was provided in this report (see link on page 2).  Interval is only required to identify which products are accused, and any other specifics are only requested “where possible.”  The description that the defendants are likely to see in return will be only marginally more informative than this description from a recent Kodak lawsuit:

8. Shutterfly has infringed at least claim 1 of the ‘306 patent by using the patented invention, and/or by making, selling, and/or offering to sell photographic prints through its website, shutterfly.com, made in a manner that uses the patented invention.

Next, looking at the first emphasized portion, Interval’s amended complaint is due on the same day as its infringement contentions, which is a reference to this order, which specifies a date when Interval provide to each of the defendants:

(1) the identity of each claim of each patent alleged to be infringed; (2) the identity of the opposing party’s accused device/method/etc. by specific name/model number/etc. for each claim asserted; (3) a chart that identifies specifically where each element of each asserted claim is found within each accused device/method/etc.; (4) whether each element is literally or equivalently infringed; and (5) the priority date to which each asserted claim allegedly is entitled, if priority is an issue.

In other words, the date that Interval is required to update its complaint to include more specificity is the same date that it has already committed to provide more specificity. While some reports might try to spin this as a “win” for Google, consider this: If you punish your children by making them do something they were required to do anyway, do you consider that effective parenting?

Formalities abound in litigation practice, and while some lawyers will blindly assert a client’s right to have each and every dispute formally resolved, federal judges have openly questioned whether such lawyers have their client’s best interests in mind when they do so.

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