Tuesday, March 1, 2011

Northern California Judges Rule in Patent Cases

A drawing from the '338 patent
Two Judges on the U.S. District Court for the Northern District of California recently ruled in patent cases.

Ritz Camera & Image v. SanDisk is a Walker Process claim that SanDisk conspired with Eliyahou Harari to monopolize the NAND flash memory devices. Specifically, Mr. Harari stole trade secrets from his former employer to procure two patents 5,172,338 which deals with circuitry in NAND memory and 5,991,517 which deals with cell-by-cell storage in NAND memory.  The motion to dismiss raises the interesting question of whether a direct purchaser has standing to sue under a Walker Process claim.  In re Remeron Antitrust Litigation (D.N.J. 2004) is the only other court to consider the issue.  The Court in Remeron found that standing was lacking for direct purchasers.  The ruling has been a subject of scholarly debate.

Judge Jeremy Fogel sided with Ritz Camera:
Defendants argue that, “giving Walker Process standing to... [direct purchaser] plaintiffs... could result in an avalanche of patent challenges, because direct purchasers otherwise unable to challenge a patent’s validity could do so simply by dressing their patent challenge with a Walker Process claim.” [In re DDAVP Direct Purchaser Antitrust Litigation (2d. Cir. 2009)] (discussing concerns raised by Defendants). However, because viable Walker Process claims are rare, it is unlikely that many direct purchasers will be in the same position as Ritz is here. Moreover, as the Supreme Court observed in Walker Process, “the interest in protecting patentees from ‘innumerable vexatious suits’ [may not] be used to frustrate the assertion of rights conferred by the antitrust laws.”
and he allowed the Walker Process claim into discovery.

Microsoft v. TiVo is a patent infringement case.  At this stage, TiVo would like to enter a counterclaim to add its own patent into the fray.  Patent No. 6,792,195 covers a method and device for implementing time functions on data.  A drawing from the patent is shown to the right.

The legal issue is whether Judge Lucy H. Koh would allow TiVo to amend the complaint.  Microsoft has accused TiVo of infringing seven of its patents and would like to proceed in discovery with invalidity concerns on those which are scheduled for May.  Judge Koh allowed the amendment and changed the briefing schedule for the '195 patent so that the tutorials will begin in June.

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