Tuesday, November 21, 2006

Has CSIRO spent about $10 million in the WiFi wars?

Of the CSIRO WiFi business, Cynthia Karena reported: The CSIRO has denied it is using money earmarked for research to pay legal bills arising from its costly stoush over US patents, despite reports it has just cancelled an award-winning medical project to cut costs.

Independent sources estimate the CSIRO's legal action, in which it is fighting to win royalties for a wireless network technology used all over the world, has already cost up to $10 million.

IPBiz notes that URochester spent about $10 million in the COX-2 litigation and ended up with an invalid patent. IPBiz assumes the Rochester war was also a "costly stoush."

Of royalties: But patent attorney Chris O'Sullivan, from FB Rice & Co, predicted that some of these companies would start to break ranks and negotiate licence and royalty settlements with CSIRO.

"No one will want to be the last man standing and face litigation," Mr O'Sullivan said. "They will no doubt do more searching to try to undermine the patent, but I would expect to see them. . . break ranks and sign up (with the CSIRO). The more licences are taken, the more pressure will build on those without them."

IPBiz had reported the flip side of the royalty game: The case does illustrate a problem an industry "outsider" (like CSIRO) faces in licensing a patent: CSIRO spent several years attempting to get companies to license its technology without success. "A lot them said we'll pay it if the other guy pays it," explains Furniss. "No one wants to pay a royalty if the competition doesn't pay too."

One also has the text:

Most of the outstanding legal actions are in California courts. Stephen Wilson, a principal at Australian patent attorneys Griffith Hack, says the Buffalo judgement is probably not binding on the courts in California.

IPBiz notes that saying "not binding" is probably not the best way to put the issue. As the CAFC said in Pharmacia v. Mylan: The Supreme Court held that "once the claims of a patent are held invalid in a suit involving one alleged infringer, an unrelated party who is sued for infringement of those claims may reap the benefit of the invalidity decision under the principles of collateral estoppel." Mendenhall v. Barber Greene Co., 26 F.3d 1573, 1577, 31 USPQ2d 1001, 1003 (Fed. Cir. 1994) (summarizing the Supreme Court's holding in Blonder-Tongue). An unrelated accused infringer may likewise take advantage of an unenforceability decision under the collateral estoppel doctrine. See General Electro Music Corp. v. Samick Music Corp., 19 F.3d 1405, 1413, 30 USPQ2d 1149, 1155-56 (Fed. Cir. 1994) ("The principle of Blonder-Tongue . . . respecting collateral estoppel also applies to unenforceability.").

Thus, a patent once found invalid (through pertinent levels of appeal) is invalid as to all. HOWEVER, a patent once found valid may still be challenged, although later assertions of invalidity would presumably be based on different arguments.

In the CSIRO matter, if the California DJ plaintiffs used the same arguments as Buffalo did in ED Texas, they would likely not be successful.


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