Hal Wegner provided a report on a fascinating situation developing in the case of
Ethos Technologies, Inc. v. RealNetworks, which was tried in the district court of Massachusetts.
In 2002, Boston-based company Ethos Technologies asserted that Real infringed on two patents relating to downloading technology. In April of 2006, a jury returned a unanimous verdict finding that Real did not infringe on any of the 10 asserted claims, and that 7 of the 10 asserted claims were invalid. Ethos has since appealed the case to the CAFC (06-1552).
On thing quite unusual about this case was that the judge decided, in the interest of fairness, that the defendant should be allowed to proceed first with evidence of invalidity, before the plaintiff proceeds with infringement. Since patentees enjoy a presumption of validity, the court reasoned, it only seems fair to allow defendants the equalize their position by addressing the presumption early in the case. The court indicated that it intends to continue this approach in subsequent cases.
In a footnote, the court explains its rationale (and also cites Judge Moore's paper titled "Judges, Juries and Patent Cases: An Empirical Peek Inside the Black Box"):
The Court employed one procedural innovation in the trial of this patent case, requiring the defendant to present the issues of anticipation and obviousness to the jury followed by the plaintiff's rebuttal. Next, the plaintiff presented its evidence of infringement and the defendant rebutted. Last, the plaintiff proceeded to the damages phase. This approach was eminently satisfying. Presentation of the
anticipation defense allows the jury at once to consider the patented advance against the backdrop of the prior art.
The Court intends to continue using this approach to evaluate its fairness and functionality. As the Court explained in The Holmes Group,Inc. v. West Bend Housewares, LLC, Civ. No. 05-11367-WGY [Doc. No. 44], at 46-47 (D.Mass. Sept. 27, 2006) (transcript of Markman hearing):
I've done this once and I liked it so much I'm going to do it again. If anticipation, obviousness are defenses, and they are, I take it prior art ... is a defense, when we get before the jury[, the defendants are]going first. And the reason I like that, and now I'm talking it up, is that the statistical, the studies by [Kimberly Moore suggest] that these cases go [in favor of] plaintiff because the plaintiff is the patent holder. [Kimberly Moore, Judges, Juries, and Patent Cases - An Empirical Peek Inside the Black Box, 99 Mich. L.Rev. 365, 385, 391 (2000).]
I think a case should be tried right down the middle. And the commentators keep saying, well, the jury is in love with inventors and inventors hold the patents and therefore the inventor wins. [Id. at 372 (collecting citations).]
[The defendants are] just going to go first. We're not going to then send the jury out. But [the defendants will] put on prior art, all of those defenses. I will charge as to clear and convincing evidence, then [the plaintiff will] put on infringement, and then we'll deal with damages and [the defendants can] rebut damages. That's how we will try the case.
The great advantage of that is the jury sees what's out there and then they can assess how the patented device advances on the knowledge that's out there generally. I find that very helpful."
The appellant-patentee has appealed to the CAFC that it was unfair for the accused infringer
to put on an invalidity attack before the patentee put on his case.
A number of big questions stem from this case: (1) will the CAFC uphold this approach? (2) will other jurisdictions follow suit? And more importantly, (3) will this case open the door for bifurcation of obviousness in patent cases (see here and here)?