Patent Law

October 15, 2013, by Mandour & Associates, APC

Los Angeles - Nestle has encountered a huge setback as the European Patent Office (EPO) this week threw out a patent that has to do with its popular Nespresso single serve coffee system.   The regulatory body, which covers 28 European countries, did not set forth its exact reasons for invalidating the patent, but noted that such an explanation will be forthcoming in the next few weeks.   This blow comes at a crucial time for Nestle as it has been publicly attempting to stop several rivals, such as Ethical Coffee Company SA and Mondelez International Inc., from producing coffee pods that fit in the Nespresso machines.

The now thrown out patent was originally granted by the EPO in 2010 and covered the way the pods fit into and are ejected from the device.   With its patent protection now eliminated, Nestle is in a weakened position to prevent others from making compatible pods.  In April of this year, a London Judge ruled that Nespresso customers have a right to purchase coffee pods from any maker they choose and that Nestle could not prevent this.  Just a few months before that ruling, courts in Germany and Switzerland refused to ban the unlicensed sale of coffee pods that fit into Nespresso machines.   Notably, the Nespresso brand coffee pods are the only ones authorized by Nespresso and cost about three times the price of the rival brands.

With so many recent impediments, Nestle executives are predictably upset.   In a recent statement, a spokesperson responded to the patent revocation stating, “We believe that the decision fails to recognize the unique innovations inherent in the design of the Nespresso system.”  The statement went on to say that the invalidation was unlikely to significantly impact Nespresso sales.   This comes as welcome news for investors of the brand, which makes up about 4% of Nestle’s total $100 billion in annual sales.

Despite Nestle’s predictions of how much the recent drawbacks will or will not affect Nespresso, several outside sources have identified a negative effect already taking place.  One estimate proffered by Bank Vontobel said that Nespresso sales growth momentum has decelerated to 16% in 2012, down from 28% three years prior.

September 18, 2013, by Mandour & Associates, APC

Los Angeles - Apple and Google are back in court, this time to argue over whether a judge should reopen a case over patented technology featured in their smartphones.   The latest in the blow by blow between the two companies happened last week when Motorola Mobility, Inc., a subsidiary of Google, Inc. filed an appeal that an older case be reopened.   The original lawsuit, filed in 2010, quickly snowballed into a tangle with each company claiming that the other had infringed the other’s patents by including certain technology in their respective smartphones.   Notably, Motorola charged that Apple had infringed one of its most basic essential patents that functions to make the phone power on.

Given the complexity of the original back and forth lawsuits, the cases were consolidated only to be thrown out by famed IP expert Judge Richard Posner.   In his dismissal of the cases, Judge Posner found that neither company had presented sufficient evidence to sustain the claims brought forth.   It is in response to this dismissal that Motorola petitioned that the case be reopened.

In last week’s hearing, the Google-owned Android operator argued that the case should be remanded so that it may have the chance to prove that Apple should pay for use of its patented technology.   The three-judge panel who presided over the hearing focused their questions on whether or not the two companies had tried hard enough to work out a deal between themselves outside of court.

The trio of judges expressed concern that one or both of the companies could be classified as an “unwilling licensee,” referring to a party who does not in good faith attempt to pay to license an invention it has infringed upon.  Counsel for Apple argued vigorously on this point, claiming that Apple was far from being an unwilling licensee and that Motorola had unfairly demanded that Apple pay over 12 times what it had asked to license the subject technology in the past.

Aside from the licensing issues, both sides also presented arguments over each other’s expert witnesses.  Ultimately,  Judge Posner denied one of Apple’s proposed experts and two of Motorola’s.   Now that the hearing for remand has taken place, the Federal Circuit appeals court could take up to a year to decide whether or not the lawsuit will be reopened.   If it is, depending on the specifics of the ruling,  the companies will likely be able to pursue their substantive patent infringement arguments in lower court proceedings.