Archive for October, 2011

Judicial Economy

Sunday, October 23rd, 2011

I am always amazed when I look at this 2008 statistic cited by Chief Justice Roberts: the Federal Judiciary accounts for 0.2% of the United States’ budget.

In his annual report in 2008, Chief Justice Roberts made these comments:

The Judiciary, including the Supreme Court, other federal courts, the Administrative Office of the United States Courts, and the Federal Judicial Center, received a total appropriation in fiscal year 2008 of $6.2 billion. That represents a mere two-tenths of 1% of the United States’ total $3 trillion budget. Two-tenths of 1%! That is all we ask for one of the three branches of government—the one charged “to guard the Constitution and the rights of individuals.” Alexander Hamilton, Federalist No. 78.

 

Despite the miniscule amount the Judiciary adds to the cost of government, the courts have undertaken rigorous cost containment efforts, a process begun four years ago, long before the current economic crisis. In September 2004, the Judicial Conference—the judges who set policy for the Judiciary—endorsed a cost-containment strategy that called for examining more than fifty discrete operations for potential cost savings. My predecessor, Chief Justice William H. Rehnquist, was well known for insisting that the courts operate efficiently. The Judiciary nevertheless has found new ways to achieve significant savings in three general areas: rent, personnel, and information technology.

 

The Judiciary has initiated a program to contain rent costs, which accounted for about 19% of our 2004 budget. We first identified and eliminated rental overcharges through an extensive audit of rent expenditures. We then adopted growth caps, which will result in space limitations for judicial personnel—including judges—and deferring new construction. Those efforts have produced significant savings. In 2004, the Judiciary estimated that it would devote $1.2 billion of its 2009 budget to rent. The Judiciary now estimates its rent requirement will be $1.0 billion, a 17% reduction.

 

We have also examined ways to control the growth of personnel costs, which accounted for 57% of the Judiciary’s 2004 budget. The majority of the Judiciary’s personnel budget—nearly 90%—is for support staff, including clerks, secretaries, and administrative personnel. The Judiciary has revised the way it sets salaries for court employees to ensure that compensation is not out of line with employee responsibilities, job skills, and performance. The courts are continuously looking for other ways to do more with less. For example, judges now employ not more than one career law clerk to assist them with legal research and associated duties, where in the past many judges employed two or even more. Judges instead are making greater use of less experienced “term” law clerks who can provide useful service for one or two years at a lower cost. As additional measures, the Administrative Office and the Federal Judicial Center instituted selfimposed hiring freezes, trimmed budget requests, and voluntarily declined to fill vacant positions to reduce expenses. In aggregate, those measures should save as much as $300 million from 2009 through 2017.

 

The Judiciary is steeped in history, but not tied to the past: We have increased efficiency through the use of information technology, which accounted for 5% of the Judiciary’s 2004 budget. The courts now routinely use computers to maintain court dockets, manage finances, and administer employee compensation and benefits programs. The Judiciary has achieved significant savings through more cost-effective approaches in deploying those systems. For example, the courts have found that they can employ new technology in tandem with improvements in their national data communications network to consolidate local servers and other information technology infrastructure. The Judiciary’s consolidation of its jury management program resulted in a savings of $2.0 million in the first year and an expected annual savings of $4.8 million through 2012. A similar consolidation of the probation case management system is projected to save $2.6 million over the same period. The Judiciary is currently undertaking a consolidation of technology in its national accounting system, which is expected to achieve savings and cost avoidances totaling $55.4 million through 2012. Those at the Office of Management and Budget or the Congressional Budget Office may not be impressed by these numbers, but don’t forget: The entire Judicial Branch accounts for only 0.2% of the Nation’s budget. For us, these are real savings.

 

The Supreme Court itself has worked hard to contain costs, holding back on requests for new funding until absolutely necessary. For 2009, the Court submitted a budget that called for no new spending and requested only the standard, government-wide inflationary adjustments to its budget. The Court’s personnel have kept an eagle eye on expenditures for an ongoing building renovation—the first since the building was completed in 1935—to update and repair antiquated systems and improve security. That renovation, now expected to be completed in 2010, has fallen behind schedule. That apparently is not unusual in Washington. But this project remains on budget despite those setbacks—a welcome departure from the Washington norm.

 

As all these efforts illustrate, the Judiciary is committed to spending its tiny share of the federal budget responsibly and will continue to make sacrifices to contain the costs of administering justice. We have worked amicably with our appropriators in Congress to achieve these results. But the courts cannot preserve their vitality simply by following a non-fat regimen. The Judiciary must also continue to attract judges who are the best of the best.

 

During these times, when the Nation faces pressing economic problems, resulting in business failures, home foreclosures, and bankruptcy, and when Congress is called upon to enact novel legislation to address those challenges, the courts are a source of strength. They guarantee that those who seek justice have access to a fair forum where all enter as equals and disputes are resolved impartially under the rule of law.

 

The courts decide issues of momentous importance to the litigants and to a broader community of persons affected by the outcomes of precedentsetting decisions. The legal issues in today’s global, technology-driven economy are increasingly complex, and judges must respond with wisdom and skill acquired from study, reflection, and experience. If the Nation wants to preserve the quality of American justice, the government must attract and retain the finest legal minds, including accomplished lawyers who are already in high demand, to join the bench as a lifelong calling.

 

I suspect many are tired of hearing it, and I know I am tired of saying it, but I must make this plea again—Congress must provide judicial compensation that keeps pace with inflation. Judges knew what the pay was when they answered the call of public service. But they did not know that Congress would steadily erode that pay in real terms by repeatedly failing over the years to provide even cost-of-living increases. Last year, Congress fell just short of enacting legislation, reported out of both House and Senate Committees on the Judiciary, that would have restored cost-of-living salary adjustments that judges have been denied in past years. One year later, Congress has still failed to complete action on that crucial remedial legislation, despite strong bipartisan support and an aggregate cost that is miniscule in relation to the national budget and the importance of the Judiciary’s role. To make a bad situation worse, Congress failed, once again, to provide federal judges an annual cost-of-living increase this year, even though it provided one to every other federal employee, including every Member of Congress. Congress’s inaction this year vividly illustrates why judges’ salaries have declined in real terms over the past twenty years.

 

Our Judiciary remains strong, even in the face of Congress’s inaction, because of the willingness of those in public service to make sacrifices for the greater good. The Judiciary is resilient and can weather the occasional neglect that is often the fate of those who quietly do their work. But the Judiciary’s needs cannot be postponed indefinitely without damaging its fabric. Given the Judiciary’s small cost, and its absolutely critical role in protecting the Constitution and rights we enjoy, I must renew the Judiciary’s modest petition: Simply provide cost-of-living increases that have been unfairly denied! We have done our part—it is long past time for Congress to do its.

You can read the entire report here: [Link].

IP Man

Monday, October 17th, 2011

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I finally got a frame for my “IP Man” movie poster.  Food for thought if you are looking for that unique gift for the discerning IP professional.

I believe that in this particular shot, IP Man is shown wielding the “Staff of Beauregard” just in case he should encounter the Cybersource panel and have to engage them in a battle of wits.  (A peculiar feature of the “Staff of Beauregard” is that although it appears to be a physical article of manufacture, to some it is just an abstract idea.)

Here’s a better look at the IP Man movie poster: [Link].

Federal Circuit Advisory Committee Adopts Model Order for E-Discovery

Monday, October 17th, 2011

The E-discovery committee of the Federal Circuit Advisory Committee has published a model court order for e-discovery for U.S. district courts.  The announcement and model order are available here: [Model Order]. 

The e-discovery committee is made up of: Chief Judge James Ware (ND Cal), Judge Virginia Kendall (ND Ill), Magistrate Judge Chad Everingham (ED Tex), Chief Judge Randall Rader (Fed. Cir.), Tina Chappell, Richard “Chip” Lutton, Joe Re, Edward Reines, Steve Susman, and John Whealan.

Supreme Court Patent Case of the Week — Shaw v. Cooper (1833)

Sunday, October 16th, 2011

JOSEPH SHAW, PLAINTIFF IN ERROR
v.
JOSEPH COOPER.

32 U.S. 292 (1833)

Supreme Court of United States.

299*299 The case was submitted to the court, on printed arguments, by Mr Paine, for the plaintiff in error; and Mr Emmet, for the defendant.

310*310 Mr Justice M’LEAN delivered the opinion of the Court.

This writ of error brings before this court, for its revision, a judgment of the circuit court of the United States for the southern district of New York.

An action was brought in the circuit court by Shaw against the defendant Cooper, for the violation of a certain patent right, claimed by the plaintiff. The defendant pleaded the general issue, and gave notice that on the trial he would prove “that the pretended new and useful improvement in guns and fire arms, mentioned and referred to in the several counts in the declaration; also that the said pretended new and useful improvement, or the essential parts or portions thereof, or some or one of them, had been known and used in this country, viz. in the city of New York and in the city of Philadelphia, and in sundry other places in the United States, and in England, in France, and in other foreign countries, before the plaintiff’s application for a patent as set forth in his declaration,” &c.

On the trial, the following bill of exceptions was taken: “to maintain the issue joined, the plaintiff gave in evidence certain letters patent of the United States, as set forth in the declaration, issued on the 7th day of May 1829; and also that the improvement for which the letters were granted, was invented or discovered by the plaintiff in 1813 or 1814; and that the defendant had sold instruments which were infringements of the said letters patent.

“And the defendant then proved, by the testimony of one witness, that he had used the said improvement in England, and had purchased a gun of the kind there, and had seen others use the said improvement, and had seen guns of the kind in the duke of York’s armoury in 1819. And also proved by the testimony of five other witnesses, that, in 1820 and 1821, they worked in England at the business of making and repairing guns, and that the said improvement was generally used in England in those years; but that they had never seen guns 311*311 of the kind prior to those years: and also proved that in the year 1821, it was used and known in France; and also that the said improvement was generally known and used in the United States after the 19th day of June 1822.

“And the plaintiff, further to maintain the issue on his part, then gave in evidence, that he not being a worker in iron in 1813 or 1814, employed his brother in England, under strict injunctions of secrecy, to execute or fabricate the said improvement for the purpose of making experiments. And that the plaintiff afterwards, in 1817, left England and came to reside in the United States; and that after his departure from England, in 1817 or 1818, his said brother divulged the secret for a certain reward to an eminent gun maker in London. That on the arrival of the plaintiff in this country, in 1817, he disclosed his said improvement to a gun maker, whom he consulted as to obtaining a patent for the same, and whom he wished to engage to join and assist him. That the plaintiff made this disclosure under injunctions of secrecy, claiming the improvement as his own, declaring that he should patent it. That the plaintiff treated his invention as a secret after his arrival in this country, often declaring that he should patent it; and that this step was only delayed, that he might make it more perfect before it was introduced into public use: and that he did make alterations which some witnesses considered improvements in his invention, and others did not. That in this country the invention was never known nor used prior to the said 19th day of June 1822; that on that day letters patent were issued to the plaintiff, being then an alien, and that he immediately brought his invention into public use. That afterwards, and after suits had been brought for a violation of the said letters patent, the plaintiff was advised to surrender them on account of the specification being defective; and that he did accordingly, on the 7th day of May in the year 1829, surrender the same into the department of the secretary of state, and received the letters patent first above named.

“And the plaintiff also gave in evidence that prior to the 19th day of June 1822, the principal importers of guns from England in New York and Philadelphia, at the latter of which cities the plaintiff resided, had never heard any thing of the 312*312 said invention, or that the same was used or known in England; and that no guns of the kind were imported into this country, until in the years 1824 or 1825. And that letters patent were granted in England on the 11th day of April 1807, to one Alexander J. Forsyth, for a method of discharging or giving fire to artillery and all other fire arms; which method he describes in his specification as consisting in the `use or application as a priming, in any mode, of some or one of those chemical compounds which are so easily inflammable as to be capable of taking fire and exploding without any actual fire being applied thereto, and merely by a blow, or by any sudden or strong pressure or friction given or applied thereto, without extraordinary violence; that is to say, some one of the compounds of combustible matter, such as sulphur or sulphur and charcoal, with an oxmuriatic salt; for example, the salt formed of dephlogisticated marine acid and potash (or potasse), which salt is otherwise called oxmuriate of potash; or such of the fulminating metallic compounds as may be used with safety; for example, fulminating mercury, or of common gunpowder mixed in due quantity with any of the above mentioned substances, or with any oxmuriatic salt, as aforesaid, or of suitable mixtures of any of the before mentioned compounds; and that the said letters patent continued in force for the period of fourteen years from the time of granting the same.”

And the defendant, further to maintain the issue on his part, gave in evidence a certain letter from the plaintiff to the defendant, dated in December in the year 1824, from which the following is an extract: “some time since I stated that I had employed counsel respecting regular prosecutions for any trespass against my rights to the patent; I have at length obtained the opinion of Mr Sergeant of this city, together with others eminent in the law, and that is, that I ought (with a view to insure success) to visit England, and procure the affidavits of Manton and others, to whom I made my invention known, and also of the person whom I employed to make the lock at the time of invention; for it appears very essential that I should prove that I did actually reduce the principle to practice, otherwise a verdict might be doubtful. It is, therefore, my intention to visit England in May next for this purpose; in the mean time 313*313 proceedings which have commenced here are suspended for the necessary time.”

And the court, on these facts, charged the jury that the patent of the 7th of May 1829, having been issued, as appears by its recital, on the surrender and cancelment of the patent of the 19th day of June in the year 1822; and being intended to correct a mistake or remedy a defect in the latter; it must be considered as a continuation of the said patent, and the rights of the plaintiff were to be determined by the state of things which existed in the year 1822, when the patent was first obtained.

That the plaintiff’s case, therefore, came under the act passed the 17th day of April 1800, extending the right of obtaining patents to aliens; by the first section of which the applicant is required to make oath, that his invention has not, to the best of his knowledge or belief, been known or used in this or any foreign country. That the plaintiff most probably did not know, in the year 1822, that the invention for which he was taking out a patent, had, before that time, been in use in a foreign country; but that his knowledge or ignorance on that subject was rendered immaterial by the concluding part of the section, which expressly declares, that every patent obtained pursuant to that act, for any invention which it should afterward appear had been known or used previous to such application for a patent, should be utterly void. That there was nothing in the act confining such use to the United States; and that, if the invention was previously known in England or France, it was sufficient to avoid the patent under that act. That the evidence would lead to the conclusion that the plaintiff was the inventor in this case, but the court were of opinion that he had slept too long on his rights, and not followed them up as the law requires, to entitle him to any benefit from his patent. That the use of the invention, by a person who had pirated it, or by others who knew of the piracy, would not affect the inventor’s rights, but that the law was made for the benefit of the public as well as of the inventor; and if, as appears from the evidence in this case, the public had fairly become possessed of the invention before the plaintiff applied for his patent, it was sufficient, in the opinion of the court, to invalidate the 314*314 patent; even though the invention may have originally got into public use through the fraud or misconduct of his brother, to whom he entrusted the knowledge of it.

Under this charge the jury found a verdict for the defendant, on which a judgment was entered.

There is a general assignment of errors, which brings to the consideration of the court the principles of law which arise out of the facts of the case, as stated in the bill of exceptions.

It may be proper, in the first place, to inquire whether the letters patent which were obtained in 1829, on a surrender of the first patent, have relation to the emanation of the patent in 1822, or shall be considered as having been issued on an original application.

On the part of the plaintiff it is contended, that “the second patent is original and independent, and not a continuation of the first patent.” That in adopting the policy of giving, for a term of years, exclusive rights to inventors in this country, we adopted at the same time the rules of the common law as applied to patents in England: and that by the common law, a patent when defective may be surrendered to the granting power, which vacates the right under it, and the king may grant the right de novo either to the same or to any other person.

(more…)

Briefs in Akamai v. Limelight and McKesson v. Epic en banc appeals

Wednesday, October 5th, 2011

The oral arguments for two en banc patent cases dealing with the issue of divided infringement are set for November 18, 2011.  Here are the parties’ briefs to the Federal Circuit for these two en banc cases:

Akamai Technologies, Inc. v. Limelight Networks, Inc. 

Akamai’s Principal Brief as Plaintiff-Appellant: [Link].

Limelight’s Principal Brief as Defendant-Cross-Appellant:  [Link]. 

Akamai’s Reply Brief:  [Link].

Vacated Federal Circuit Panel Decision:  [Link].

Previous oral argument in front of initial three judge panel: [Listen]
 

McKesson Technologies, Inc. v. Epic Systems Corp.

McKesson’s Principal Brief as Plaintiff-Appellant:  [Link].

Epic’s Response Brief as Defendant-Appellee:  [Link].

McKesson’s Reply Brief :  [Link].

Vacated Federal Circuit Panel Decision:  [Link].

Previous oral argument in front of initial three judge panel:  [Listen]

Oral Argument of the Month: Ultramercial v. Hulu

Sunday, October 2nd, 2011

The oral argument in Ultramercial, LLC  et al. v. Hulu LLC et al., 2010-1544 (Fed. Cir. September 15, 2011) is one that I think will interest many practitioners.  The case deals with the issue of subject matter eligibility under 35 U.S.C. section 101 for a claim directed at distributing copyrighted products (e.g., songs, movies, and books) over the Internet.  Claim 1 reads as follows:

1)  A method for distribution of products over the Internet via a facilitator, said method comprising the steps of:

a first step of receiving, from a content provider, media products that are covered by intellectual property rights protection and are available for purchase, wherein each said media product being comprised of at least one of text data, music data, and video data; a second step of selecting a sponsor message to be associated with the media product, said sponsor message being selected from a plurality of sponsor messages, said second step including accessing an activity log to verify that the total number of times which the sponsor message has been previously presented is less than the number of transaction cycles contracted by the sponsor of the sponsor message;

a third step of providing the media product for sale at an Internet website;

a fourth step of restricting general public access to said media product;

a fifth step of offering to a consumer access to the media product without charge to the consumer on the precondition that the consumer views the sponsor message;

a sixth step of receiving from the consumer a request to view the sponsor message, wherein the consumer submits said request in response to being offered access to the media product;

a seventh step of, in response to receiving the request from the consumer, facilitating the display of a sponsor message to the consumer;

an eighth step of, if the sponsor message is not an interactive message, allowing said consumer access to said media product after said step of facilitating the display of said sponsor message;

a ninth step of, if the sponsor message is an interactive message, presenting at least one query to the consumer and allowing said consumer access to said media product after receiving a response to said at least one query;

a tenth step of recording the transaction event to the activity log, said tenth step including updating the total number of times the sponsor message has been presented; and

an eleventh step of receiving payment from the sponsor of the sponsor message displayed.

‘545 patent col.8 ll.5-48.

Judge Lourie inquired that one looks to the claim language to determine the steps of a method rather than relying on some sort of general idea: [Listen].

His statement for the court in Ariad Pharmaceuticals, Inc. v. Eli Lilly and Co., 598 F.3d 1336, 1347 (Fed. Cir. 2010)(en banc) is consistent with the approach that claims define subject matter:

Claims define the subject matter that, after examination, has been found to meet the statutory requirements for a patent. See In re Vamco Mach. & Tool, Inc., 752 F.2d 1564, 1577 n. 5 (Fed.Cir.1985). Their principal function, therefore, is to provide notice of the boundaries of the right to exclude and to define limits; it is not to describe the invention, although their original language contributes to the description and in certain cases satisfies it. Claims define and circumscribe, the written description discloses and teaches.

But, Chief Judge Rader asked why in a section 101 analysis does one have to worry about particular claim terms, since all one is evaluating is subject matter eligibility. Shouldn’t one just look to the field that “this” is in in order to see if that field is precluded under 35 U.S.C. section 101: [Listen].  This line of questioning would echo his questions from the oral argument in Research Corp. Techs. v. Microsoft Corp., 627 F.3d 859 (Fed. Cir. 2010): [Listen]. 

At another point in the oral argument, Judges Rader and O’Malley took defendant-appellee’s counsel to task for asserting that economic ideas such as a “transaction” were by definition abstract: [Listen].

Finally, Judge O’Malley echoed the sentiment of the patent bar when she commented that she wasn’t sure what the Supreme Court made clear in Bilski: [Listen].

You can listen to the entire oral argument here: [Listen].
You can read the court’s opinion here: [Read].