Google, Cisco fail to win patent reform bid

Companies couldn't convince Supreme Court to hear a case they argue is key to preserving a "balanced" patent system.

Google and Cisco Systems aren't too happy about the U.S. Supreme Court's decision this week in a lawsuit over vehicle drive shafts of a certain very specific size.

It's no joke. The justices on Tuesday refused to hear a hotly contested patent case involving drive shafts of "substantially uniform wall thickness" that pitted American Axle and Manufacturing against Dana Corp.

While the two Silicon Valley firms may have little interest in the mechanics of drive shaft manufacturing, they share a keen interest in the mechanics of patent laws. In a legal brief urging the justices to take up the case, the companies say they hold more than 1,400 patents and want to promote a patent system with a reasonable "balance" among inventors, users and follow-on improvers.

The two firms are worried about what they view as a disturbing trend in which appeals courts second-guess trial judges regarding whether a patent is valid. In that process, ending in what's called a "Markman" hearing (named after a 1996 Supreme Court case), both sides present detailed evidence to a trial judge about the scope of the patent and its history.

Nowadays, the companies argue, the Federal Circuit reverses trial judges more than one-third of the time--resulting in less incentive for companies to settle suits early, aggressive defenses of clear cases of infringement and pursuit of questionable cases. Permitting this trend to continue, they say in a brief written by Stanford law professor Mark Lemley, creates legal uncertainty and "prolonged and wasteful litigation rather than innovation."

In the current case, Dana sued American Axle, alleging that its drive shafts had a thickened end tube, in violation of Dana's patents. The Federal Circuit threw out a trial judge's decision, which had favored American Axle. The case now returns to the same trial court.

The Supreme Court did weigh in on in a patent case watched by many tech companies in May 2002 by curbing a decision that could have encouraged "copycat" products.

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