Saturday, May 29, 2010

Fishwrap and Bobo kill Ablaise '737 patent claims

One of the more interesting aspects of Dow Jones v. Ablaise
resides in the nature of the prior art documents used in the case,
going under such names as Fishwrap and Bobo. Ablaise
countered with the Krakatoa Chronicle, an email exchange
between a student and a professor, and an MIT undergrad thesis
(recall Wheeler's recently-discussed Harvard undergrad thesis was plagiarized).

Prior art is going to be interesting in the future.

As a preliminary matter, the CAFC took a whack at some
jurisdictional musings by the district court judge. In this case,
Super Sack ruled and Dow Jones lost on the jurisdictional point as
to one patent (the '530) but Dow Jones won on the substantive
point as to the other patent (the '737).


Dow Jones & Co., Inc. v. Ablaise Ltd., 583 F. Supp. 2d 41,
44 (D.D.C. 2008). However, the district court noted that
he regarded our Super Sack-Benitec rule to be inapplica-
ble to this case, for what he believed to be “sound pruden-
tial reasons” and for “reasons of the efficient utilization of
the litigation resources of both bench and bar.” Id. at 268.

**Bottom line. CAFC says no subject matter jurisdiction-->

In the case at bar, Ablaise’s cove-
nant not to sue avowed that Ablaise would not sue Dow
Jones for any acts of infringement of its ’530 patent. The
covenant therefore extinguished any current or future
case or controversy between the parties, and divested the
district court of subject matter jurisdiction. Subject
matter jurisdiction is a threshold requirement for a
court’s power to exercise jurisdiction over a case, and no
amount of “prudential reasons” or perceived increases in
efficiency, however sound, can empower a federal court to
hear a case where there is no extant case or controversy.

**On the subject of "affiliates":

Dow Jones fails to provide a precise definition of what
it means by “affiliates”, but with respect at least to News
Corporation, its attempt to insinuate the latter as a party
into this case fails. News Corporation, of which Dow
Jones is a subsidiary, is a legally distinct entity from Dow
Jones, and it is well-settled law that, absent a piercing of
the corporate veil (which neither party alleges), a parent
company is not liable for the acts of its subsidiary. See,
e.g., Penick v. Frank E. 160, 165 (D.D.C. 1984).

Judge Robertson in D. D.C. is reversed:

We therefore
reverse the order of the district court’s denial of Ablaise’s
motion to dismiss Dow Jones’ claim seeking inthe ’530 patent.

The question of obviousness:

The district court granted Dow Jones’ motion for
summary judgment of invalidity of the ’737 patent on the
grounds that the asserted claims were obvious under 35
U.S.C § 103. A claim is obvious if: “the differences be-
tween the subject matter sought to be patented and the
prior art are such that the subject matter as a whole
would have been obvious at the time the invention was
made to a person having ordinary skill in the art to which
said subject matter pertains.” 35 U.S.C. § 103(a).

Obviousness here:

The district court found that there was undisputed
evidence that a modification incorporating location-
changing HTML tags into the Bobo prior art reference
would have been straightforward and obvious to an arti-
san of ordinary skill. As an example, the district court
pointed to the undisputed fact that the Bobo patent
employs the HTML tag, which is used to display
an image on the Web page. Ablaise conceded that such a
tag, accompanied by an alignment tag, would meet the
“formatting data” limitation of claim 1. Therefore, a
person of ordinary skill in the art would simply have to
add an alignment tag (already well known in HTML) to
the existing tag recited in the Bobo patent to
meet all of the limitations of claim 1 of the ’737 patent.
Because “[t]he combination of familiar elements according
to known methods is likely to be obvious when it does no
more than yield predictable results”, the district court
found that claim 1 was invalid as obvious under 35 U.S.C.
§ 103. KSR, 550 U.S. at 416. Further, the district court
credited Bestavros’ testimony that, with respect to an
artisan’s motivation to combine the elements, “[b]etween
1990 and May 15, 1995, with the pervasiveness and wide
acceptance of the web, there was a tremendous amount of
technological development seeking to increase the usabil-
ity of web pages and to bring the established features of
various computer programs to the web platform.” More-
over, the court noted that both parties acknowledged that
one of the “established feature” of non-web programs was
the capacity to personalize formatting. Taken together,
the court found that these facts presented clear and
convincing evidence of both design need and market
pressure to add location-changing HTML tags to the Bobo patent.

Secondary considerations got no traction. Further, there was
coercive licensing: the use
of coercive licensing agreements that had more to do with
avoiding the costs of litigation than with the novelty of the the patent.

**Curiously, although the district court/CAFC worked through
an OBVIOUSNESS rejection over Bobo, the USPTO was finding
an ANTICIPATION rejection over Bobo:

In a recent submission to this court, Dow Jones
presented a copy of a final Office Action, dated December
23, 2009, by the U.S. Patent and Trademark (“PTO”)
Office in connection with an ex parte reexamination of the
’737 patent. The Office Action constitutes a final rejection
by the Examiner of claims 1-6 of the ’737 patent (includ-
ing the claims asserted in this appeal) as invalid under 35
U.S.C. § 102(a) as anticipated by the Bobo prior art refer-
ence as well as another prior art reference not raised in
this appeal (Varela). An ultimately final rejection of the
claims by the PTO would fatally undermine the legal
presumption of the validity of the ’737 patent and would
be sufficient by itself to moot this entire portion of the
appeal and warrant affirmation of the district court’s
finding of invalidity of the ’737 patent (although on
grounds of anticipation rather than obviousness). How-
ever, the ex parte pletely resolved.


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