Saturday, September 27, 2008

CAFC affirms Microsoft win over Alcatel-Lucent in mp3 area

Of Microsoft's victory over Alcatel/Lucent, the Boston Globe had a quote: The ruling is "a victory for consumers of digital music and a triumph for common sense in the patent system," Tom Burt, deputy general counsel for Redmond, Wash.-based Microsoft said in an e-mail.

The CAFC merely affirmed the district ruling, in which one patent was found not infringed and the other validly licensed: The US Court of Appeals for the Federal Circuit yesterday affirmed the lower court's decision that one of the two patents wasn't infringed and that Microsoft, the world's biggest software maker, had a valid license for the second one. The valid licensing came through licensing by a joint owner.

Of the joint ownership matter, AT&T entered into a "joint development agreement" [JDA] with Fraunhofer in 1988. The JDA explicitly stated "All New Work is treated as joint work." In 1997, Microsoft obtained a license from Fraunhofer for an mp3 decoder and incorporated the technology into Windows Media Player.

Various lawsuits developed. At one point in the district court proceedings, it was determined because certain patent claims arose from "New Work", Lucent lacked standing to sue without joining Fraunhofer. On appeal, Lucent challenged the finding that these claims arose from "New Work," and even if they did, the district court erred in finding that Fraunhofer was co-owner of the patents in question.

Of the first point, the CAFC stated: "We cannot adopt Lucent's strained interpretation of the JDA."

Of the second point, the CAFC noted: "According to Lucent, by law a patentee may only assign title to an entire patent; a transfer of less is only a license." The CAFC noted the issue in the Lucent case was determining ownership of the patent in the first instance.

The CAFC brought up the case of Israel Bio-Engineering, 475 F.3d 1256. In that case, there was a five year contract between Israel Bio-Engineering Project [IBEP] and Yeda. Yeda would apply for patents, but IBEP would be the owner of the patents. AFTER the contract ended, a patent issued, naming Yeda as assignee. One of the four inventors (Rubinstein) had joined the research project AFTER the contract ended. The subject matter of claims 2 and 3 of the patent arose from work by Rubinstein. Rubinstein had assigned his rights to Yeda. IBEP sued Amgen over claim 1. The question became: did IBEP have to join Yeda? The CAFC held that Rubinstein was a presumptive co-owner of the patent because he was an inventor of claims 2 and 3 (and was indeed listed as an inventor). Thus, IBEP lacked standing to sue in the absence of joining Yeda, even though the claim at issue in the litigation was covered by the five year contract.

The CAFC determined that Fraunhofer was co-owner of the patents in question, and Lucent lacked standing to sue without joining Fraunhofer.

The CAFC then stated in the Lucent case: Israel Bio-Engineering holds that an inventor of one or more claims of the patent is the owner of all claims in the patent.

One notes that the legal issue determined was that Lucent had no standing to sue because Lucent had not joined a co-owner of the patent. It is separately true that a co-owner of the patent has the right to license the patent.


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