Green Patent Blog

After losing three in a row to hybrid technology company Paice, first by jury verdict in the district court, then in the court of appeals and then being rejected by the Supremes, the Toyota Prius has finally prevailed in a patent infringement suit.  Earlier this month, the U.S. Court of Appeals for the Federal Circuit (the court that hears appeals of patent decisions from district courts and administrative agencies) held that Toyota did not infringe a patent owned by Connecticut hybrid technology company Solomon Technologies (Solomon).

Solomon’s U.S. Patent No. 5,067,932 (’932 patent) covers a combination motor and transmission device having a continuously variable speed of rotation.  According to the patent, the invention permits a hybrid engine to operate at peak power over a greater range of rotational speed, or rpm.

As is often the case in patent litigation, claim construction (the court’s interpretation of the legal scope of a patent’s claim language) was critical here.  The disputed language was in claim 7 of the ‘932 patent, which requires an “integral combination” of a motor element and a transmission unit element and requires that one of the two elements be located “within an envelope” containing the other element.

The Federal Circuit affirmed that the “integral combination” element means the motor and transmission are directly attached without the presence of shafts, bearings or other components in between.  Because Toyota’s transaxles have rotor shafts between the motor-generators and the transmission unit, the court found they did not infringe.

The court also held that the term “within an envelope” means that one of the two elements (motor or transmission unit) is within the imaginary space defined by the rotation of the other element.  As an additional basis for non-infringement, the Federal Circuit found that Toyota’s transmission gears were outside of the imaginary space defined by the motors’ magnet assemblies.

So the Prius is off the schneid in patent litigation, and the win comes as Toyota celebrates a happy milestone - the Prius went platinum this month, with over one million sold worldwide.

In 2004, shortly after being sued by Osram GmbH (Osram) in the International Trade Commission (ITC) for infringement of ten LED patents, Malaysian LED maker Dominant Semiconductors (Dominant) hauled Osram into court in northern California, accusing the Siemens subsidiary of trade libel and unfair competition.  Dominant claimed that Osram made false and misleading statements in press releases and correspondence to customers and distributors about Dominant’s alleged infringement of the LED patents. 

One of the communications at issue was a 2003 e-mail prior to the infringement lawsuit that attached a patent attorney analysis concluding that Dominant’s white LEDs infringed several Osram patents and warning Osram’s distributors that importation of the LEDs into the U.S. could be barred.  There were also two 2004 press releases after Osram filed suit describing the suit and the infringement allegations and announcing that one if its U.S. distributors had agreed to stop importing the allegedly infringement LEDs. 

The ITC infringement case and the California libel suit both proceeded for about a year until, in May of 2005, the ITC found that Dominant infringed one of the asserted Osram patents (on appeal three more patents were found to be infringed), and, in June of 2005, the California court cleared Osram of libel and unfair competition and disposed of the case. 

Last month, the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) affirmed the California court’s summary judgment ruling that Osram could not be held liable for the communications because its statements were not objectively baseless and therefore were not made in bad faith.  Patent law court decisions protect a patent holder from liability for publicizing information about its patents so long as the patent holder does not act in bad faith. 

To prove bad faith on the part of Osram, Dominant had to show that Osram’s claims of infringement were objectively baseless, that is, the infringement allegations had no reasonable chance of succeeding in court.  Of course, Dominant had an uphill battle because Osram’s infringement allegations did succeed in the ITC, which had found infringement one month before the California court disposed of the libel charges. 

Dominant argued that the infringement analysis conducted by Osram’s patent attorney was improper and unreliable and, therefore, the infringement claims in Osram’s communications were objectively baseless.  The Federal Circuit concluded that, while Dominant’s contentions might bear on Osram’s subjective intent, they could not show objective baselessness in view of the ITC’s determination that Dominant’s LEDs were infringing.  In essence, Dominant’s loss in the infringement suit doomed it in the libel suit.

Oddly, this isn’t the first case this year in which one LED manufacturer accused another of making false and misleading statements regarding patent infringement charges.  In March, Nichia sued Seoul Semiconductor (Seoul) for false advertising for publishing press releases in which Seoul allegedly mischaracterized a patent infringement verdict finding Seoul infringed several of Nichia’s LED design patents. (read my previous post on the case)

My esteemed colleague Mike D. brought a couple of interesting patents to my attention.  U.S. Patent No. 7,353,118, which issued last month, and U.S. Patent No. 7,117,117 are owned by Japanese office equipment maker and document management solutions provider Ricoh Company. 

The patents are directed to a system for assessing a company’s environmental impact and is embodied in what Ricoh calls its Eco Balance and Environmental Impact Evaluation.   The patented system helps companies collect information from all points of a product’s life cycle, including manufacturing points and chemical materials used to make the products, sales and distribution points, end use points, maintenance and collection/recycling of the products.  The system also collects and analyzes data from other facets of a business such as personnel and account information and the company’s environmental conservation activities.   In addition, the system includes a database of environmental laws, regulations and standards.

The system then registers and manages all the collected information in a database and generates reports containing numerical figures that reflect the environmental impact of each area of the business.  Ricoh uses these figures to formulate environmental action plans, which suggest specific areas where improvements can be made in productivity, technological development and energy conservation to minimize a company’s impact on the environment. 

In this age of corporate social responsibility and heightened awareness of sustainable business practices, these could be very valuable patents for Ricoh. 

Last month the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy announced millions of dollars of available funding for clean energy development, including grants for biomass to biofuel research, biomass pyrolysis research, hydrogen storage technology and concentrating solar power research.

An important question when the government provides funding for private development is who owns the intellectual property fruits of such research.  If an invention is conceived or built as part of federally funded research or development the government probably will have some rights in the patentable technology.  The rights enjoyed by the government can range from a non-exclusive license to the innovation to full ownership of the patent rights and depends on the amount of government funding involved and which agency provides the funding.

These issues are governed by the Bayh-Dole Act of 1980, titled “Patent Rights in Inventions Made with Federal Assistance” and the Federal Acquisition Regulation (FAR).  The Bayh-Dole Act and the FAR permit a private contractor to retain title to patented or patentable subject matter developed using federal funding so long as the entity, within a specified time period, discloses to the federal agency the existence of the subject invention and makes a written election to retain title.  The private entity must also diligently file a patent application on the subject invention.  Failure to take any of these steps gives the government the opportunity to obtain title in the subject invention.

FAR also contains three patent clauses that provide the basic building blocks for delineating patent rights in government contracts.  FAR 52.227-11 is a short form clause generally applicable to small businesses and non-profits that provides for retention of title by the contractor.  FAR 52.227-12 is a long form clause, generally used by the Department of Defense, that provides for retention of title by the contractor.  FAR 52.227-13 is typically used by the Department of Energy and NASA and provides for acquisition of title by the government.  The determination of which clause applies depends on both the agency involved and the size and nature of the private entity, including whether it is a large business, small business or non-profit organization.  An entity entering into a funding agreement with the federal government should pay close attention to which patent clause is included in the contract.

Even if the contractor complies with the disclosure, election and patent filing requirements to retain title, under any of the patent clauses, the government nevertheless acquires a non-exclusive license to practice the subject invention or have others practice it on behalf of the U.S.  That means not only the government, but private entities, even direct competitors of the patent owner, may be able to practice the subject invention.  So although federal funding can be important for development of clean technologies, companies looking for federal dollars should weigh the high price of taking advantage of it.

For me at least, the clean technologies are rife with problems of nomenclature and categorization.  I didn’t realize until I read this Green Tech Gazette piece that water power had so many subcategories.  The article sums it up nicely:

Hydropower is generated from dams . . . . Current power is generated from rivers and streams . . . . Tidal power uses the predictable flow of the tides to generate electricity around the ocean shores. And, ocean power . . . involves water turbines that are offshore and a bit farther out to sea than the tidal devices.

In view of these definitions, yesterday’s post should have opened with a reference to “water power” instead of the more limiting “wave power.”  It also probably should have specified that Marine Current Turbines’ technology harnesses tidal power, and Verdant Power’s turbines are designed primarily for current power. 

I’ve also changed my water category heading from “Hydropower” to the broader and more inclusive “Water Power.”