Virginia Business Litigation Lawyer Blog: Patents Archives

Last Friday, the Court of Appeals for the Federal Circuit threw out a jury verdict against Acushnet Company and vacated a permanent injunction that had prevented it from selling the Titleist Pro V1 line of golf balls that Acushnet had introduced to the market in 2000. The court ordered a new trial because the jury had reached a verdict that was impossible to interpret due to internal inconsistencies. The trial court had found the confusing verdict to be "harmless," but the Federal Circuit disagreed and held that the only way to resolve the inconsistency was to order a new trial.

Acushnet had argued that patents for the golf balls, owned by Callaway Golf Company, were invalid due to patent doctrines known as "obviousness" and "anticipation." The requirement that a patent be nonobvious generally means that the differences between the patented invention and the prior art must amount to more than a mere rearrangement of prior art elements with each element predictably performing its same function in the new combination, as viewed from the standpoint of one with ordinary skill in the field. Similarly, a patent will be void for "anticipation" if a single, prior art document decribes every element of the claimed invention, such that a person of ordinary skill in the art could practice the invention "without undue experimentation." In other words, Acushnet essentially argued that Callaway's golf-ball patents were nothing special because any competent manufacturer could have come up with the idea simply by reviewing existing golf-ball-related patents.

In reviewing a particular independent claim of the relevant patent, the jury found that it was nonobvious and valid. However, the jury also found that one of its dependent claims to be invalid for obviousness. This finding, the court held, was incomprehensible: "A broader independent claim cannot be nonobvious where a dependent claim stemming from that independent claim is invalid for obviousness." (See Opinion at 21-22, quoting Ormco Corp. v. Align Tech., Inc., 498 F.3d 1307, 1319 (Fed. Cir. 2007)).

The appeals court ruled that the inconsistency could not be reconciled because there was evidence submitted at trial that would be sufficient to support either of the two inconsistent verdicts. It therefore ordered an entirely new trial on the issue of obviousness. Whether, given this second opportunity, the jury will be able to comprehend the highly technical evidence, involving how things like low-acid ionomer resins and "Shore D hardness" affect golf ball playability characteristics, remains to be seen.

Posted by Lee E. Berlik | Permalink | Email This Post

Posted In: Intellectual Property , Patents

TiVo won its patent infringement case against EchoStar, DISH, and affiliated companies back in 2006, obtaining a ruling that EchoStar's digital video recorder ("DVR") violated certain claims of U.S. Patent No. 6,233,389, owned by TiVo, and obtaining an injunction against future patent violations. In response to the ruling, EchoStar developed a supposed "workaround." On June 2nd, 2009, the court held that the workaround did not cure the infringement. The court held them in contempt of court for violating the injunction and again ordered them to stop using TiVo's technology.

EchoStar, the company behind the DISH Network satellite television service, designs digital video recorders that it provides to customers who subscribe to its satellite T.V. service. TiVo's '389 Patent relates to a similar system that allows for simultaneous storage and playback of television signals from sources such as cable and satellite providers.

At the conclusion of the 2006 trial, the jury found that EchoStar's DVR receivers infringed nine claims of the '389 Patent, either literally or under the doctrine of equivalents. After the verdict, EchoStar and its engineers went to work redesigning their DVR machines to avoid infringing the '389 Patent. Two years later, TiVo moved to hold EchoStar in contempt, arguing that the redesigned DVR's continued to infringe TiVo's patent.

The seminal case governing contempt proceedings in patent cases is KSM Fastening Systems, Inc. v. H.A. Jones Company, Inc., 776 F.2d 1522 (Fed. Cir. 1985), which held that a contempt proceeding for violation of an injunction issued in a patent case, "while primarily for the benefit of the patent owner, nevertheless, involves also the concept of an affront to the court for failure to obey its order." The KSM case also held that contempt is to be viewed as a "severe remedy" which should not be employed if there is any doubt with respect to whether the defendant has violated the terms of the injunction.

Despite EchoStar's allegations that it had changed 5,000 of the 10,000 lines of DVR source code and that it had spent over $700,000 in its redesign efforts (neither allegation of which the court found to be relevant to its analysis), the court found that (1) any differences between the product found earlier to be infringing and the redesigned DVR were "no more than colorable" and that (2) the redesigned DVR machines continued to infringe on TiVo's patent. (Note: TiVo also pointed out that EchoStar spent much more--approximately $50,000,000--on its "Better than TiVo" advertising campaign, though the court didn't find that fact particularly relevant, either). Consequently, the court held EchoStar in contempt of its permanent injunction.

The court deferred ruling on monetary sanctions, but expect the eventual award to be substantial. "The harm caused to TiVo by EchoStar's contempt is substantial," the court wrote. "EchoStar has gained millions of customers since this Court's injunction issued, customers that are now potentially unreachable by TiVo."