Thursday, September 28, 2006

Håkan Lans Is Back at The Federal Circuit (and Sweden Will Be Watching)

In one of the strangest, and most controversial patent infringement cases in recent history, Håkan Lans (aka Uniboard Aktiebolag) returns to the Federal Circuit on October 6, where the court will determine his fate on the disastrous enforcement effort regarding U.S. Patent No. 4,303,986 (Panel J: Friday, October 6, 2006, 10:00 A.M., Courtroom 203 - 2006-1070 Lans v. Gateway 2000) .

A prolific inventor and a folk hero in his native Sweden, Lans was granted the '986 patent in 1981, which covered Video Graphics Array (VGA) technology. In 1989, Lans agreed to license the ’986 patent to IBM. However, for tax reasons, Lans wanted to have his shell company, Uniboard, grant the license. To assure that Uniboard possessed the rights it was purporting to license, IBM requested that Lans first execute an assignment of the ’986 patent to Uniboard. Lans executed the assignment to Uniboard personally and then, on behalf of Uniboard, executed the license to IBM. Lans soon obtained licenses from others, including Hitachi, HP, and Apple.

In 1996, Lans sent letters to the computer industry accusing numerous companies of infringing the ’986 patent. The letters identify Lans as “the inventor and owner” of the ’986 patent, but did not mention Uniboard.

In 1997, Lans personally sued numerous companies for infringement of the ’986 patent. The complaint did not include Uniboard as a plaintiff. During discovery, the defendants found out about the assignment, and concluded that Lans had no business asserting the patent claim, because he wasn't, in fact, the owner.

And that's when everything started to unravel for Lans.

The computer companies moved for summary judgment that Lans lacked standing to sue because he did not own the ’986 patent. Lans moved under FRCP Rules 15 and 17 to amend the complaint to substitute Uniboard for himself as plaintiff. The district court denied the motion for leave to amend and granted summary judgment for the computer companies.

Under Rule 15, the district court held that Lans could not amend the complaint to create standing because, without standing, there was no action to amend. The district court also found that its denial of leave to amend created no prejudice for Lans since Uniboard remained free to file suit against the computer companies.

Under Rule 17, the district court again found that Lans could not create standing where none existed before amendment. Despite Lans’s contention that he had forgotten about the assignment, the district court found that Lans’s bringing the action in his own name was not due to an honest and understandable mistake.

In November 1999, six days after the district court granted summary judgment in the first case, Uniboard (aka Lans) re-filed the lawsuit against the computer companies.

This time, the computer companies moved to dismiss the complaint for failure to state a claim on which relief may be granted. The computer companies noted that the ’986 patent had expired on January 9, 1999 (11 months earlier). The computer companies argued as well that § 287(a) precluded any damages because Uniboard’s licensees had not properly marked patented products and Uniboard had not properly notified the computer companies of infringement before expiration of the ’986 patent.

The district court held that the notice Lans gave the computer companies in his personal capacity was insufficient because § 287(a) requires that the patentee give notice, which he wasn't at the time. Accordingly, the district court held that it could not provide Uniboard any relief and dismissed Uniboard’s complaint. The Federal Circuit affirmed the decision.

Furthermore, the district court determined that Lans had intentionally deceived his lawyers regarding the ownership of the patent. The court ordered Lans to pay court expenses including those of the remaining defendants (Gateway and Dell).

When Lans sued his own lawyers later for malpractice, the same judge found against him and decided he should pay their costs too. The exact amount has not been calculated, but it's estimated that Lans could be on the hook for as much as $100 million.

The case has attracted a lot of attention in Europe and, obviously, in Sweden. Margot Wallstrom, vice-president of the European Commission (and a blogger as well), has already asked the World Trade Organization to look into the case, and is questioning whether non-American patent holders are properly protected in American courts.

More interestingly, Judge Kimberly Moore published a paper in 2003, titled "Xenophobia in American Courts." Judge Moore found that, while domestic and foreign parties won at equal rates with judges, in patent jury cases between domestic and foreign parties, the domestic party won 64% of the time, with the foreign party winning in the remaining 36% of cases.

1 Comentário:

Anonymous said...

Oh what a tangled web we weave, when first we practice to deceive

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