Monthly Archives: July 2010

Microsoft’s Efforts-A Model for Policing Counterfeiting?

It is difficult to determine the number of counterfeits produced for any software on the market.  The Digital Millennium Copyright Act (“DMCA”) and the US Copyright Act provide some leverage to assist software and copyright owners.  However, the trick is to identify and prove that the software developed and sold by others is counterfeit.

If a software or copyright owner can establish that someone is peddling counterfeit or fake software, then significant remedies and penalties can be invoked.  It is estimated that counterfeiting costs the software industry about $10 billion dollars.  Often the significant criminal penalties that are associated with counterfeiting are necessary to put counterfeiters out of business.

Without criminal penalties, counterfeiters are often willing to pay civil fines, and continue their infringing activities in a different manner.  However, to establish counterfeiting often more evidentiary issues are involved than a traditional copyright or trademark infringement lawsuit.  One of the leaders in the software industry is Microsoft.

Microsoft has developed a method of using investigators and unique disc manufacturing to assist in policing counterfeiters.  Differences in color, grooves, and ridges can assist in establishing counterfeiting.  Microsoft even has investigators policing the web to identify sources and locate the origin of counterfeiters.

Once, counterfeiters are located Microsoft will enlist the aid of local law enforcement to put the counterfeiters out of business for good.  If you have any concerns or questions implementing policing mechanisms, prosecuting or defending against counterfeiting claims, then feel free to contact us.

Patients’ Preferences may not be a Defense to Discrimination claims.

In a recent Seventh Circuit decision, the Court reversed an Indiana District Court’s decision granting summary judgment to an Employer (“Plainfield Health Care Center”) on an Employee’s (“Chaney”) claims of a hostile work environment based on racial biases and wrongful termination.

Chaney claimed that there was a resident at the Plainfield Health Care Center (“Plainfield”) that did not want assistance from black certified nursing assistants. Plainfield complied with the Resident’s requests by informing Chaney in writing that blacks individuals should not provide any care to this Resident or enter this Resident’s room.

The Equal Employment Opportunity Commission submitted an Amicus brief in support of Chaney’s appeal. Interestingly, this case pits a patient’s demand for white nursing assistants with an employee’s rights to a non-discriminatory work place. Although the appeal only overturned the grant of summary judgment to Plainfield, the Court did express that such a policy violates title VII by creating a hostile work environment.

Chaney’s claims will now proceed further with the district court to see, if she can prevail at trial. However, this case firmly establishes that hostile work environment claims can be based on race and that patient’s preferences may not provide a sufficient defense to overcome discrimination claims.

It will be interesting to see how the case resolves, but one could see that having policies based on client or patient preferences may subject an employer to liability under Title VII. In other words, saying that the patient or client wants to work with individuals that are White, Black, Asian, Japanese, or Indian may be the basis for discriminatory employment practices.

This is a difficult road to navigate for Employers given that quite often clients or patients are allowed to select the individuals that work with them or provide treatment for them. We will see how courts will interpret and apply this opinion.

If you want to review the opinion, then please see: Chaney v. Plainfield

Increased Scrutiny of Patented and Generic Drug Settlements!

The Federal Trade Commission (“FTC”) is increasingly reviewing settlement agreements between companies owning branded patented drugs and their generic drug competition. The remarks from FTC Chairman, Jon Leibowitz characterize these as “Pay-for-Delay” agreements.

According to the FTC these “Pay-for-Delay” agreements are costing consumers $3.5 billion dollars a year as they deny patients access to cheaper equally effective drugs.  The controversy stems from branded patented drug owners practice of initiating a lawsuit for patent infringement against the generic drug owner.

After filing the lawsuit, the branded patented drug owner will turn around and pay off the generic drug manufacturer.  Typically, the generic drug manufacturer will get a large some of money to hold off on bringing the generic drug to the market.  The branded or patented drug owner believes that it should be entitled to enter into such an agreement to continue to be able to recoup its research and development costs.

The generic drug manufacturer may be able to use the monies to conduct its own research and development, and bring the generic drug to the market.  However, there is an increased cost to that the consumer is bearing during the agreed period of delay.  The FTC has picked up on this increased cost and is challenging these “Pay-for-Delay” agreements by filing Antitrust Complaints against the branded patented drug owner and generic manufacturer. 

It is not clear how receptive courts will be to using the Antitrust Laws to invalidate the “Pay-for-Delay” agreements.  However, if the judicial option is not available, then you may very well see legislative action in this arena.  If you or someone you know has any concerns or questions relating to this matter, then please feel free to contact us. 

See: FTC Chairman Remarks_061410

Business Method Patents Are Still Alive After Bilski!

In a recent decision by the U.S. Supreme Court, the Court held that business method patents may still be acquired and enforced in the United States.  The Court reviewed a patent examiner’s decision to deny a patent claim on a method of how buyers and sellers in the energy mark can protect or hedge against the risk of price changes.

Specifically, the Patent Examiner rejected claims 1 and 4, which describe a series of steps on how to hedge against risk and the expression of those steps into a mathematical formula.  The Patent Examiner denied the claims, because they were not tied or limited to an apparatus or a machine that carried out the steps.  The Patent Examiner rejected the claims stating that they are merely expressions of abstract ideas and solve a purely mathematical problem.

The Board of Patent Appeals and Interferences agreed and the Federal Circuit Affirmed.  However, the Federal Circuit’s en banc panel rejected the “useful, concrete and tangible result” test for determining whether an invention or process is patentable.  Instead, the Federal Circuit held that the only test for determining whether a claimed process is patentable is the “machine or transformation” test.

The “machine or transformation” test states that in order for a process to be patentable it must do the following: 1) be tied to a particular machine or apparatus; or 2) transform a particular article into a different state or thing.  However, the Supreme Court decision rejects this holding.  The Supreme Court held that the “machine or transformation” test is a useful test, but it is not the only test.

The Supreme Court stated that the novelty requirement can be met by a business method that is useful, concrete and produces a tangible result.  Moreover, the Supreme Court went on to reject the assertion that business method patents should be categorically excluded from the Patent Act’s definition of patentable subject matter.  Categorically excluding business method patents is contrary to the following: 1) the broad or wide scope that Congress intended for patent protection; 2) section 100 (b)’s use of the term method and its ordinary definition; and 3) section 273 (b) (1)’s allowance for a prior use defense for method patents.

However, the Supreme Court affirmed the decision to deny patent protection to claims 1 and 4, because they attempted to patent abstract ideas.  Thus, although business method patents are still viable and can be patented; they must be more concrete, useful, and tangible or meet the machine or transformation test.  It is unclear as to how this will impact patent prosecution, litigation, licensing, and acquisition strategies. This will also have an impact on business research and development strategies.

However, it is clear that business method patents are viable, but the range of subject matter that can be patented is further restricted to more concrete expressions of a process.  Moreover, claims of business methods may have to be drafted more narrowly to ensure that they are granted.  Business method claims will likely have to be interpreted more narrowly to avoid potential invalidity findings during a lawsuit.

See:  Bilski-U.S. Supreme Court Decision on Business Methods