Robert Jacobsen v. KAM Detailed Patent Issues

This article is limited to providing an academic in depth analysis of patent related issues in Jacobsen v. Katzer, based upon the court record in the case.
Katzer declared to the Court that he shipped model train software, within the one year statutory time period for filing a patent in the United States, that used a client/server protocol Katzer filed a patent in June 1998 with the United States Patent and Trademark Office, consisting of 53 method claims involving client/server control of model trains which can be infringed by computer software.
KAM owns a series of patents titled "Model Train Control System". The first of which was filed in 1998. Continuations of this patent were filed and granted by the patent office, each of which was subject to a terminal disclaimer.
On April 14, 2002, the JMRI project published a new capability in their code, over 4 years after KAM presented their client/server architecture, On March 11, 2003 the patent office granted the patent claiming those exact capabilities.
On September 17, 2002, Katzer sent infringement letters to two model railroad hobbyists companies, DigiToys Systems and Freiwald, for patent infringement and filed lawsuits. These lawsuits were never served and were dropped in December 2002. DigiToys Systems noted WinLok 1.5 from 1993 (which DigitToys Systems did not indicate was client-server), WinLok 2.0 from 1995 (which DigiToys Systems did not indicate was client-server), and ROSA from 1997 (which DigiToys Systems did not indicate was client-server). DigiToys Systems also noted WinLok released in 1998 which is not prior art. This information was provided to the file history of the '329 patent, by the two model railroad hobbyists, which is the parent of the pending continuation patent. Manual Patent Examining Procedures 707.05 states "In all continuation and continuation-in-part applications, the parent applications should be reviewed for pertinent prior art." Accordingly, the references cited by the two model railroad hobbyists were before the patent office in the '329 patent.
On March 8, 2005, Katzer sent patent infringement letters and later notices, and that more than $200,000 was due for licensing fees of previously distributed versions of the project. to the United States Department of Energy, based on use of a Department of Energy e-mail address used to sponsor the JMRI project. This letter was based upon JMRI including the "exact same capabilities" in its software. The Department of Energy determined that Mr. Bob Jacobson apparently used his LBNL e-mail account in connection with JMRI related correspondence, and that the JMRI project is not an LBNL funded, sponsored or supported acitvity, and nor performs any duties for or in support for the JMRI project. Jacobsen filed for a declaratory judgment against Katzer. In it, Jacobsen alleged that the June 1998 patent is invalid due to prior art, and that Katzer's patents have been granted by the patent office in error. He further alleged that Katzer deliberately failed to provide the patent office with the prior art.
Prior to the second Settlement Conference, the settlement judge requested that Katzer had to "provide to Plaintiff basic supporting facts and legal argument sufficient to explain its position on validity, enforceability and infringement of the patent.". On February 1, 2009, Katzer filed two disclaimers with the U.S. Patent Office, effectively making two of his patents unenforceable in their entirety. The result of the disclaimer was to remove all patent issues from the case. As stated by the Court:
:"Counts one, two and three of the second amended complaint must be dismissed as moot because of Defendants’ disclaimer of the patent sued upon. The Defendants filed a Disclaimer in Patent under 37 C.F.R. § 1.321(a) with the Patent and Trademark Office on February 1, 2008, disclaiming all claims in the ’329 patent. ... There is no dispute that the patent at issue in this case has been disclaimed and there is therefore no further substantial controversy between the parties of “sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” See MedImmune, Inc. v. Genentech, Inc., 127 S. Ct. 764, 771 (2007).
After these patents were disclaimed by Katzer, Jacobsen attempted to include other Katzer patents in the case based on Katzer's use of the plural "patents" in the earlier demand letters and legal filings. In oral argument, Katzer's lawyer told the Court that Katzer was not then considering, and never had considered, JMRI to infringe other patents, and the court mooted those claims. The Court stated in its order that:
:"Jacobsen also alludes to the possibility that Defendants own other patents which may be relevant to this litigation. However, there is nothing in the record to support the position that there is a substantial controversy between the parties to merit retaining jurisdiction over the declaratory claim. Defendants maintain they have no intent to sue Jacobsen over alternate patents and any determination regarding patents not yet in suit would render the Court’s opinion merely, and impermissibly, advisory. See Micron Technology, Inc. v. Mosaid Technologies, Inc., 518 F.3d 897, 901-02 (Fed. Cir. 2008).
KAM stated, under oath in a declaration, that KAM disclaimed the '329 patent because patent litigation is extremely expensive and time-consuming, especially given the aggressive litigation tactics of Jacobsen. KAM further stated, under oath in a declaration, that the disclaimer of the '329 patent was purely based upon economic considerations to avoid the cost of patent litigation.

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