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.”

There has a been a lot of activity in wave power recently, with the world’s first commercial tidal energy turbine installation completed in Northern Ireland last week, another project being developed in the Ontario River near Cornwall, Canada, and possible expansion of a small installation in New York City.  The technology for the Ireland project was developed by British firm Marine Current Turbines, and the NYC and Canada installations were designed by Verdant Power, a New York-based company (read the Matter Network stories on Ireland here and Canada here).

Water turbines operate in much the same way as wind turbines, but the greater density of water presents somewhat different technological challenges.  The increased density of water means that water turbine blades can function with smaller wingspans than air turbines.  However, the effects of drag and wake formation are greater in water and can cause a large thrust force on the turbine blades, interfering with the flow through the turbine rotor.  In addition, the flow rate varies significantly with the depth of the water.

Some of Marine Current Turbines’ patents seek to address these problems with their turbine installation designs.  U.S. Patent No. 7,331,762 is directed to a turbine support structure having the turbine rotors situated between two parallel decks.  The upper and lower deck each have a different streamlined cross-section, with one being more convex than the other.  This design accelerates the flow of water over the more convex surface to eliminate the difference in flow rates between the upper and lower water streams, thereby reducing interference with the rotor.  

U.S. Patent No.7,307,356 (‘356 patent) covers a bifurcated column design having a vertical gap designed to support twin turbine blades.  The two blades spin in opposite directions to operate in bi-directional water flows (i.e., both ebb and flood tides).  This setup also is beneficial because the two rotors offset each other’s torque.  A horizontal turbine support structure extends perpendicular to the column with a portion extending through the vertical gap.  This design minimizes water drag and wake formation so the bi-directional water flow doesn’t interfere with the rotor.  The technology deployed in Northern Ireland, Marine Current Turbines’ SeaGen, appears to be an embodiment of the ‘356 patent. 

Verdant Power’s patent application Pub. No. 2007/0063520 is directed to a system for generating power from slow moving water flows for use in non-tidal flowing water such as man-made canals or aqueducts.  The system consists of a water flow flume with a network of slopes and curves, including an acceleration zone to increase flow velocity and create kinetic energy from water movement. 

Looks like this is just the beginning for commercial tidal power installations and for Marine Current Turbines in particular, which has other projects slated for the next few years, including in Vancouver and Wales.

Last week, the U.S. Supreme Court denied Toyota’s petition for certiorari, refusing to review a lower court’s ruling that the Prius, Lexus RX400h and Highlander SUV hybrid cars infringe a patent owned by hybrid technology company Paice LLC. (read my previous post on Toyota’s appeal)  Toyota had argued that Paice’s statements in its patent that prior technology had “substantial deficiencies” and was “compex and difficult to manufacture” precluded infringement under the doctrine of equivalents because Toyota’s hybrid vehicles used an aspect of that prior technology.  But the appeals court ruled that language in a patent criticizing a prior invention had to be clear as to which aspect of the invention is being criticized for a court to deny that the patent scope covers the prior invention as an equivalent.   

So the decision by the U.S. Court of Appeals for the Federal Circuit will stand.  In that decision, the Federal Circuit affirmed a $4.3 million jury verdict that Toyota’s hybrid drive trains infringed U.S. Patent No. 5,343,970 as an equivalent system but vacated the district court award of a $25 per vehicle ongoing royalty.  (read my previous post on the Federal Circuit decision) Now the case will go back to the trial court to determine the amount of ongoing royalty Toyota will have to pay Paice.

As is typical, the Supreme Court did not give a reason for its decision to deny review.  But the denial means that fewer than four justices favored review of the case (if four justices vote to review, the high court grants the petition for certiorari).  I remember one of my law professors used to describe his exams as consisting of big issues, little issues and non-issues and advised students to figure out which is which and not spend any time on the non-issues.  Here, Toyota tried to dress up a non-issue as a big issue, and the Supremes wisely declined to spend any time on it.

 

Australian solar cell company Dyesol has developed transparent dye-infused solar cells that can be sandwiched between two panes of glass to transform windows into energy collection devices.  In a process based on how plants generate energy, Dyesol’s cells use a dye analogous to chlorophyll to absorb light and generate electrical energy.  The cell consists of a nano-particulate porous film formed on a conductive substrate, a layer of dye, a transparent conductor and an electrolyte placed between the dye and the substrate.  The dye-coated nano-particles increase the surface area available for light absorption.  (read more about the technology on Ecogeek and Inhabitat)

Dyesol owns a patent application directed to its proprietary method of manufacturing the dye solar cells.  U.S. Application No. 2008/0105362, which published last week, claims a manufacturing method that comprises forming a nano-particulate layer on a conductive substrate, applying a dye to the nano-particulate layer and treating the nano-particulate layer with an electrolyte.

The resulting dye solar cells differ from traditional solar cells in how light is absorbed and how charge carriers are generated.  In ordinary photovoltaic cells, sunlight is absorbed by a semiconductor material such as silicon, which knocks electrons loose from their atoms, creating electricity.  Here, the dye chemically absorbs the sunlight and generates electrons to carry charge through the conductive substrate.  Thus, instead of photovoltaic or photoelectrical (light to electricity) cells, by virture of the added dye, these are photoelectrochemical cells.

Last month Silicon Valley electric sports car company Tesla Motors sued rival car maker Fisker Automotive for allegedly stealing Tesla’s trade secrets, including confidential design ideas for a hybrid electric sedan.  The lawsuit, filed in California state court in San Mateo County, also names as defendants Fisker Automotive’s CEO, Henrik Fisker, its COO, Bernhard Koehler, and Fisker and Koehler’s design company, Fisker Coachbuild.  (read the New York Times story here)

According to the complaint, Tesla hired Fisker Coachbuild to aid with Tesla’s “WhiteStar” project to design an electric-hybrid sports sedan.  Tesla alleges that the defendants used the trade secret and confidential information on high-performance electric-hybrid sports car technology acquired during the engagement to secretly design their own directly competing sedan, the Karma (shown above and in this Inhabitat.com piece), which Fisker recently launched.  Among other things, the complaint alleges that the defendants fraudulently concealed their intentions to make a competing vehicle, breached the parties’ service contract and violated California trade secrets law. 

Trade secrets differ from patents in that they only protect information that is kept secret and only can be enforced against those who gain access to the information by improper means, including by breaching a promise to keep the information confidential.  (see IP Watchdog’s summary of trade secrets here)

From perusing the complaint, it seems that interpretation of the contract could be a major issue in the case.  While the contract has a confidentiality clause and a provision guaranteeing that Tesla would own any resulting work product, it also states that Fisker Coachbuild was permitted to provide the same design services to other car makers while working for Tesla.  Fisker Coachbuild may argue that building a competing car for Fisker Automotive constituted providing vehicle design services to another automaker, which it had every right to do under the contract.  In the complaint, Tesla asserts that Fisker Coachbuild’s complete involvement in the design of the competing car went beyond the scope of merely providing design services. 

Of course, that defense would not win the day for Fisker Coachbuild if it did in fact disclose Tesla’s proprietary information to Fisker Automotive and used the hybrid technology to build the competing car.  So the case might ultimately come down to a comparison of Tesla’s and Fisker’s hybrid-electric technology, which would be fun for us patent and greentech observers. 

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