Mitros:Homework (3/23/11)

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Orion IP, LLC v. Hyundai Motor America (2010) [605 F.3d 967]

This case was held in the United States Court of Appeals, Federal Circuit. In this case, Orion was suing Hyundai alleging that Hyundai's online sales system (hyundaiusa.com and hyundaidealer.com) infringed upon two of Orion's patents (referred to as patents '627 and '342). Prior to reaching the court of appeals, the district court had ruled the Hyundai had infringed upon the patents and ruled that patent '627 was valid. Therefore, the district court had entitled Orion to damages and royalties.

The '627 patent contained a method for assisting a salesperson in selecting appropriate parts corresponding to a customer's particularized need using a computerized system in place of paper catalogs and order forms. Essentially, the system's user would enter the type of part desired along with the desired characteristics of the part and the system would identify all parts that would meet the user's particular needs. Then, the system would compile all the parts into a proposal that would include, among other things, the price of the parts as well as images of the parts. Hyundai responded to Orion's allegations by claiming that the '627 patent was invalid because of the prior existence of a different database system which contained the same steps and procedures as the '627 patent. This system known as the IDB2000 was developed by a different party prior to patent '627. The district court had ruled that the critical date of the '627 patent was November 10 1988. The Court of Appeals upheld this date as the critical date. The Court was able to determine that the IDB2000 was developed and sold by the company Bell & Howell to Reynolds & Reynolds in 1987. Reynolds & Reynolds then began to demonstrate and sell the system to car dealerships through a promotional publication entitled "Electronic Parts Catalog". The Court sought to determine if this catalog satisfied the requirements of section 102 (b) to invalidate patent '627. Specifically, the court wanted to determine if the invention was in a printed publication more than a year before the critical date and whether or not the publication was made accessible to persons interested and ordinarily skilled in the subject matter to which the advertisement relates. Through testimony it was shown that the catalog was copyrighted in 1987 and that the catalog was used as a mail piece to car dealerships and by salesmen to demonstrate the machine to potential buyers. As such, the Court ruled the invention was contained within a readily available publication more than a year before the filing date of the '627 patent. Additionally, the court had to determine if the catalog properly disclosed the invention such that one of ordinary skill in the art could make the invention without further undue experimentation. It was determined that the catalog, which contained an example of the process used by the salesmen, sufficiently demonstrated the process used. Therefore, in light of all this, the court found the prior art publication anticipated the disputed claims of the patent and ruled these claims to be invalid.

Also worth noting, on appeal Hyundai also had accused Orion of inequitable conduct. The Court ruled that Hyundai did not provide sufficient evidence that Orion did not disclose any critical evidence.

Therefore, the Court's final ruling was that they affirmed the prior ruling that the '627 patent was not unenforcable due to inequitable conduct, Reversed the district court's ruling on the validity of the '627 patent claims, finding them invalid, and vacated the the remainder of the district court's rulings (ie, the damages and royalty fees awarded to Orion).