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Exam Notices: 1) This is an open book examination

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Exam Notices:

1) This is an open book examination.  You may use any books, notes, or printed materials that you desire.  No electronic materials or communication with others during the test is permitted.

2.This exam consists of three questions worth 100 total points.  The points allocation and suggested time is as follows:

 

                                Question I:                          40 Points              (70 Minutes)

                                Question II:                        40 Points              (70 Minutes)

                                Question III:                       20 Points              (40 Minutes)

3.            You will be given three hours to complete these three questions.  Budget your time carefully. 

4.            Be sure to read each question carefully and think through your answer before beginning to write.  Outlining is highly recommended.  In writing your answers to the questions, keep the following in mind:

?             Analyze all issues plausibly presented by a question.

?             If you believe that an element or an issue can only be plausibly analyzed in one way, do not skip it.  Rather, support that conclusion in your analysis.  However, do not waste time discussing issues that we may have covered in class but that are not suggested by the facts of the question.  

?             If you find the facts of a question to be ambiguous or unclear, indicate this and how the different possible interpretations of the facts would affect your analysis.  In some questions I may have purposely left out key facts. In those instances, you should indicate what, if any, additional facts you might need to know to answer the question more completely.

?             If you believe the relevant law is unclear, is unsettled, or varies among jurisdictions, indicate this, the results under different variations of the law, and the law a court is likely to apply.

5.            Good luck!

Question 1 (70 Minutes – 40 Points)

You are a new associate in the patent litigation practice at a law firm.  In your first week on the job, one of the partners stops by your office and says, “You’ve been doing such a good job this week, I’ve decided to throw you a project.  One of our clients is deciding to invest in a new company, and he wants you to take a look at the company’s situation and figure out what their patent liability is, if any.”

He hands you a document describing the background of the company, and says, “Write me an objective memo describing any potential patent issues with this business, including infringement, validity, possible defenses, and anything else that jumps out at you.  Make sure you give me an objective legal analysis that is organized, and come to some legal conclusions.”  As the partner walks out the door, he says, “I decided to give you the hard case.  There was a much easier memo about a windmill patent, but I decided to give that to the other associate.”

You begin to read the document:

Tarcom Industries – Background

Tarcom Industries is a startup company with a novel business model.  The CEO of Tarcom has become aware of a computer system called the Speedamatic that is incredibly fast and compact.  The Speedamatic is made by Conglomerate United (CU), a company which specializes in making high-performance computer systems.  The Speedamatic has a unique internal component known as the flux capacitor, which makes it much faster than comparable systems.  CU has a patent on the Speedamatic computer system, including its internal design with the flux capacitor.  This patent is known as the ’500 patent, and was issued in 2005.

CU makes a great deal of money by selling thousands of Speedamatic computers to a secretive government agency for $10,000 apiece.  The government agency uses each Speedamatic for about one year, and then discards them at the dump.  Before they discard the Speedamatic, the agency removes and destroys the hard drive and the video card, rendering the Speedamatic unusable at that point.  Every year CU releases a new version of the Speedamatic with an updated, faster flux capacitor that is capable of meeting published government decryption standards. The government agency replaces each discarded Speedamatic with the newest Speedamatic version.

Recently declassified documents reveal that the unnamed government agency has been using versions of the Speedamatic system since at least 2003 through an internal program which has been evaluating the Speedamatic to see if it meets the government’s decryption needs.

Tarcom Industries has figured out a unique business niche.  The CEO realizes that he can buy the discarded Speedamatic machines from the dump for $20 apiece.  Tarcom can then install new, high-end hard drives and video cards in the discarded Speedamatic computers through a complex engineering process which enables the Speedamatic computers to work again.  Tarcom then sells these Speedamatics as a high-speed computer system known as the Game Station.  The Game Stations will sell for $300 apiece, and are the fastest known gaming computers in the world, thanks to the flux capacitor inside.

The specification for the ’500 patent states, “The Speedamatic is designed to solve one of the major problems facing government agencies, namely, the decrypting of encrypted email messages sent by private citizens.  Normally decryption is a slow process.  The Speedamatic is designed to keep up with the rate of advances in encryption, which becomes roughly twice as slow to crack each month as encryption technology becomes more advanced.  At the time of the submission of this patent, the flux capacitor easily meets and exceeds the government’s published 2005 decryption standards.”  The specification then goes on to define and describe in detail the operation of the flux capacitor and how it was able to meet and exceed the 2005 decryption standards.

The only claim of the ’500 patent states, “I claim a computer system comprising a fast flux capacitor processor that is capable of meeting the strongest government decryption standards published by the government for the current calendar year, through increasing processing power.”

Write an objective memo describing any potential patent liability, including any potential defenses, for Tarcom Industries, if they were to enter this business area.

Question 2 (70 Minutes – 40 Points)

You are a law clerk for a federal district court judge and are working on a patent infringement case.  The patent at issue – the ’205 patent – was issued in 2009.  The ’205 patent is owned by SipAndStay Inc., a nationwide chain of coffee shops.

The specification of the ’205 patent states, “This patent describes a novel operating method within the café industry.  It is common for customers to read at cafes while consuming their beverages.  However, customers frequently arrive at cafes without any reading materials.  Customers need to be entertained.  This method solves this problem by asking the customer their preferred reading materials, such as a newspaper, magazine, or book, during the beverage order process.  While the beverage order is being prepared, the café staff load an electronic entertainment device, such as an Amazon Kindle or a Sony E-Book Reader, with the book or magazine of the customer’s choice.  By the time the beverage is ready, the customer is presented with an electronic device loaded with their selected entertainment, along with their drink.  Before leaving the café, the customer returns the electronic device.”

The specification continues, “Another novel aspect of our invention is the incorporation of an instant roaster in the ordering process.  Using only the finest ancient traditions of roasting, we are able to compress hot air to quickly roast coffee beans to perfection.  This speedy process turns unroasted beans into roasted beans.”

Claim 1 reads, “A method for selling hot beverages consisting of a centralized operator capable of receiving orders for beverages and entertainment materials, a means of recording said order, a means of propagating the beverages and entertainment to customers and, including with said beverage, an electronic entertainment device capable of playing or displaying the ordered entertainment material to the customer.”

Claim 2 reads, “The process as claimed in Claim 1, whereas the hot beverage is coffee made from coffee beans roasted in an instant roaster during the order process.”

The accused infringer, E-Café, owns a small chain of coffee shops.  Since 2007, E-Café has operated its cafés under the following business model:  Customers first order their hot coffee drinks at the front of the cafe and the orders are entered into the order system.  Upon submitting their order, customers are loaned a WiFi-enabled IPod music player.  For as long as customers are in the café, they can use the IPod to receive music beamed wirelessly from the café’s vast music collection.  Customers love this experience, and spend hours listening to their IPods while drinking coffee.  In addition, E-Café has invented a process known as “flash cooking,” where they use microwaves to cook previously-roasted coffee beans during the order process, to instantly give the coffee a fresh roasted flavor.

SipAndStay has sued E-Café for patent infringement under both claims of the ’205 patent, and has made a motion to the court for a preliminary injunction. 

The judge gives you the following evidence submitted as part of the motion:

                A section of the prosecution history file containing SipAndStay’s attorney’s response to an office action from the Patent Office during the prosecution of the ’205 patent.  The response distinguishes the ’205 patent from the prior art, stating that, “Our ‘entertainment’ in this context is necessarily passive, and does not focus on interaction with the customer.  This is different from the prior art which involves ‘interactive’ video game machines.”

                A dictionary definition submitted to the Court by the patent holder for this motion, that defines “entertainment” as ‘that which provides pleasure, delight, or diversion to the recipient.’

                A written affidavit from the inventor, SipAndStay’s vice president, taken for this motion, stating, ‘The ’205 patent was intended to cover all forms of entertainment, electronic, non-electronic, you name it.’

                A dictionary entry submitted by the patent holder for this motion, defining “coffee roasting” as “any of a variety of interchangeable coffee preparation techniques which heat coffee beans in order to bring out flavor in preparation for brewing.”

                A printed business plan that the CEO of E-Café circulated to 10 venture capitalist firms in 2006, when he was trying to raise money from investors so that he could start his company.  The business plan was circulated at an “entrepreneurship fair,” where budding entrepreneurs pitch their business plans to potential investors.  The business plan explains in detail E-Café’s business model, which was described above.

The judge asks you to write him an objective memo about whether the preliminary injunction should be granted.  In particular, he wants you to focus on the first factor, “likelihood of success on the merits by the party seeking the injunction.”  He wants you to systematically go through all of the possible patent law issues that might prevent the patent holder from ultimately winning the infringement suit on the merits.

Question 3 (40 Minutes – 20 points)

You are the assistant to Senator Patrick Leahy.  He would like to submit a patent reform bill in the Senate soon.  He asks you to write him a memo describing a minimum of 2 suggestions for patent reform.  He says that you can add a third suggestion to get “extra credit” with him.  For each suggestion, he wants you to describe the current state of the law.  In particular, he wants to know the goals and policies of the part of the law you are improving as well the relevant rules from the case law.  He tells you that you don’t have to name specific case names if you do not want to.  Finally, he wants to know how your suggestion will further the underlying policies of the area of patent law that you are improving.

Before he leaves your office, Senator Leahy says, “DO NOT suggest changing our system from a ‘first to invent’ to a ‘first to file system’ or anything related to changing the system for determining priority of invention.  That suggestion is obvious and will not get you credit with me.”