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IPO DAILY NEWS™

Tuesday, September 7, 2010

IPO’S FEDERAL CIRCUIT SUMMARIES™:

* * * * En Banc Federal Circuit Decides No Misuse of Philips Patents for Producing Compact Discs Complying With Industry Standard -- Princo Corp. v. Int’l Trade Comm’n 2007-1386 -- On August 30 in a 42-page majority opinion by Judge Bryson, an en banc Federal Circuit concluded that U.S. Philips Corp. did not misuse patents covering an industry-wide standard for producing recordable compact discs, which Philips asserted against Princo, by allegedly agreeing with Sony Corp. that Sony would not license a patent for a different technology. Philips and Sony collaborated in developing technology for positioning discs. Philips and Sony engineers agreed that the solution in the Philips patents was better, and the companies incorporated it into the standard. Princo took a license under a package of patents for producing discs complying with the standard, but stopped paying licensing

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LAW/ADVOCACY UPDATES

Dissenting Opinion Sees Alleged Agreement Between Philips and Sony as an Illegal Agreement to Suppress an Alternative Technology -- Princo Corp. v. Int’l Trade Comm’n 2007-1386 -- Judge Dyk, joined by Judge Gajarsa, filed a 32-page dissenting opinion on August 30.  Dyk, taking a broader view of the patent misuse doctrine than the majority, said the alleged agreement between Philips and Sony was an anticompetitive agreement to suppress an alternative technology.  He said the alleged agreement not to license the Sony patent was “part and parcel of the agreements governing the asserted patents.”  He also said the majority erred in holding that the burden rested on Princo to show anticompetitive effects.  Judge Prost, joined by Judge Mayer in a concurring opinion, agreed with the majority that a misuse finding was unwarranted because Princo failed to make a threshold showing of anticompetitive effects, but doubted that the contours of the misuse doctrine are as “narrow or expansive as each [the majority and the dissent] respectively suggests.”

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