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Titan of
Tech Trials
PAGE 4 OF 7
MC: It was the first trial, jury or non-jury, ever involving a patent on computer software. If you go back enough years ago computer software didn't exist. And then there was a pretty long period of time when the U.S. Patent Office did not issue patents on software, viewed them as being unpatentable. Then the law changed and the Patent Office began some time in the 70s to issue patents on software. That's the first case that ever went to trial involving computer software.
Candle Corporation was the alleged infringer. The kind of software they sell today and then has to do with very large mainframe installations, very complex computer systems. It's like a complex traffic system for a city. There are bottlenecks and traffic jams that slow down the system, so you have to decide where to build a bridge, where not to build a bridge. That's a rough analogy, but it's a highly complex set of software because it has to go in while the computer system is running into the deepest darkest recesses of the computer system to determine what's going on and make a diagnosis and make a recommendation.
The people who started [Candle] said this is stuff that you can't see and it's dark; it's like a candle that lights up what's going on inside the computer system. They had a head-to-head competitor named Boole & Babbage which had a patent on software that related to these kinds of products. I was defending Candle corporation. The jury unanimously ruled that the patent was invalid.
GS: Patent cases are tried before juries?
MC: They don't have to be. Many people would choose not to try them before a jury but there is a right to trial by jury in a patent case and this was tried to a jury.
GS: Do you prefer jury trials to court trials.
MC: I like jury trials, I think they're a little bit more fun, but I enjoy both jury trials and trials before the court.
GS: It's been 17 years but do you recall the fact or issue on which the decision turned?
MC: There were two grounds on which the jury found the patent was invalid. One had to do with a legal doctrine called inequitable conduct. It used to be called fraud on the patent office. When the patent applicant does not provide important information to the patent office, the patent can be found unenforceable because of inequitable conduct. That was one ground that would have been sufficient to invalidate a patent. A separate independent ground was that the patent's owner had placed its product on sale more than a year before filing its application. The patent laws then as now grant you a limited monopoly. then it was 17 years. the law is that you can't begin to sell a product and delay for years before filing a patent application. You begin to sell a product, within one year you have to file a patent application. Otherwise you lose all rights.
CONTINUED BELOW
GS: What was the inequitable conduct in which you claimed Boole & Babbbage had engaged?
MC: Closely related to the on-sale issue, they didn't tell the Patent Office that they had commercial activity. Sometimes you may say to the Patent Office, 'This is what we did -- we went to a trade show, or we did the following, but we should still be entitled to file the patent application.' But instead of doing that, Boole & Babbage hid all that information from the Patent Office.
GS: It doesn't sound like a slam-dunk case. It sounds like a somewhat obscure basis for invalidating a patent.
MC: It was not a slam dunk case by any means. Second, I would never consider something obscure if it's strong enough to invalidate a patent granted by the U.S. Patent Office where there is a very high burden of proof. In a normal civil case the burden of proof is by a preponderance of the evidence. In a patent case to invalidate a patent, you must demonstrate it's invalid by a clear and convincing proof, so it's a much heavier burden.
GS: It seems like you had a heavy burden to make that showing based on what must have been a few trivial-seeming events like attending a trade show.
MC: It was a heavy burden, a hard fought case, vigorously fought and fought well and good representation on the other side and obviously both parties took the matter very very seriously. and if Boole and Babbage had won, they would have obtained a permanent injunction that would have put Candle Corporation permanently out of business.
GS: Were you the lead trial counsel?
MC: Yes.
GS: Was that the case that put you on the map with the legal profession?
MC: I wouldn't point to any one particular case. I had other cases that attracted a lot of attention. One of the early ones was when I had been practicing for about a year. It was another patent case. It was the first patent case I ever did, it was the first patent case anyone at Irell & Manella ever did.
GS: So you started that area of practice.
MC: At the firm, yeah. I had been practicing for about a year in 1978. We had a client that decided it wanted me to handle a case involving two patents. A patent owner was allegintg that the company had infringed these two computer-related patents. Of course I was a very junior lawyer, very wet behind the ears. The senior people said, 'That doesn't make very much sense. Nobody here knows anything about patent law. Morgan doesn't know anything about patent law or know anything about computer technology.'
But the client said, 'No, I think this is a case he will handle and handle well. We'll hire some patent lawyers from a patent firm to work on the case and we'll hire computer experts to assist and it will all work.' That case went to trial in about nine months. We ended up with a finding that both patents were invalid and not infringed. That actually started our patent litigation practice in a sense. There were no trumpets blowing or anything, but it was word of mouth after that. People would ask others, 'Who do you think might be good?' Someone else would ring our doorbell and say, 'I've got a tough case. This is what it's about.' That was quite a bit before the Candle case.
And I had also had a case involving First Amendment issues, represented a reporter who had written a story about one of the Americans taken hostage in Iran. In 1979 student radicals in Iran stormed the U.S. embassy. They took everyone hostage. Only one person taken hostage was not a U.S. employee. It was a private citizen who happened to be in the embassy at the time. For months before this occurred everyone was warned to leave the counry because there was a political upheaval. The Americans were held in captivity for 444 days.
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| "Nobody here knows anything about patent law. Morgan doesn't know anything about patent law or know anything about computer technology." |