A lawyer/inventor by the name of Erik Cherdak of Maryland is suing Apple, Nike, PhatRat and a key individual by the name of Curtis Vock. Mr. Vock is shown to be both a partner at the law firm of Lathrop & Gage and an inventor on the patent that was issued to PhatRat. Erik Cherdak, who has sued companies like Wal-Mart Stores, Payless, Nordstrom, Kmart and others in the past, has an interesting complaint. Basically Cherdak is claiming that Apple and Nike have either licensed certain patents or were assigned certain patents from PhatRat to legally protect the Nike + iPod product lines, but that PhatRat deceived the USPTO during a patent examination in gaining the patent grants. There's a lot of money on the line here and this case may even slow down other sporting products that Apple may be working on at present.
Overview of this Case as it Pertains to Apple
Although the Plaintiff Erik B. Cherdak is dragging Apple and Nike into this patent infringement lawsuit as the monopolizing villains that are infringing on the Cherdak patents, the Plaintiff has to first convince the presiding Judge Liam O'Grady of the Eastern Virginia District Court that the patents used by Apple and Nike were in fact invalid as they were, in his words, "improperly obtained by the USPTO."
The patents that Apple and Nike were relying on for legal protection were originally obtained from PhatRat. Examples of Apple working with PhatRat and/or Curtis Vock could be seen in Patently Apple reports in June and March 2009. The patent figure below is associated with the March 2009 patent report.
Cherdak's formal complaint states that Apple is in business with Nike via their Nike + product lines including Nike + iPod and its extension to the iPhone and other products like Nike + Sensor. The court document goes on to state that "Nike and Apple, either individually and/or in concert, are each presently and have in the past engaged in the design, importation, distribution, sale, and offering for sale of athletic shoes and related and paired technologies and products including, but not limited to, those which incorporate technologies covered by the Cherdak Patents." The plaintiff claims that Nike and Apple have allegedly infringed on his patents 5,452,269 and 5,343,445.
Now, in order for Apple to be found guilty of infringing the plaintiff's patents, the plaintiff included an action with the court seeking Declaratory Relief in the hopes of having the judge declare competing patents 5,636,146 and 5,960,380 (or '146 and '380) and any and all patents claiming priority, in whole or in part, invalid as improperly obtained from the USPTO. Both of these patents cover much of the same territory that we presented in our March 2009 report noted above in respect to skiing and extreme sports.
The plaintiff states that it's his belief that PhatRat either licensed or assigned ownership and/or rights in its invalid patent assets to either or both Apple and Nike after PhatRat first sued Nike and Apple on Nike's and Apple's alleged infringement of PhatRat's knowingly invalid patents.
The plaintiff then argues how PhatRat made false and misleading statements against the plaintiff's patents in a fraudulent effort to win allowance of their patents. According to the plaintiff states that Vock via PhatRat "defrauded the USPTO, the Patent Examiner, and the American People."
The plaintiff states in their complaint that PhatRat's inequitable conduct either was known or reasonably should have been known to Nike and Apple during their due diligence of their business dealings with PhatRat and its owners (include Vock).
It's clear by reading the complaint that the plaintiff really dislikes Mr. Vock of PhatRat as later on the plaintiff states that "Such conduct includes egregious and false and misleading statement made directly by Co-Inventor and Patent Attorney Curtis A. Vock during the initial examination proceeding related to the '146 and '380 patents and the perpetuation of such inequitable conduct for years after the filing of the '146 and '380 patents."
The thing that's difficult to understand in this case as an outsider, is that at least one exhibit brought by the plaintiff shows the incredible detail of the PhatRat patents. Seemingly patent details include and describe the use of sensors like an accelerometer or GPS for tracking the user's route while exercising. I guess the plaintiff wanted to point out that the defendant's patents used words like "jump" or "jumping" which is heavily covered in the plaintiff's patents. That may be applicable to the PhatRat patents pertaining to ski jumps, though that even sounds like a bit of a stretch – but how this plays out in respect to Apple's Nike + iPod product line relating to running is a bit of a head scratcher.
The Apple, Nike Monopoly
Section C of the Plaintiff's complaint is titled "Defendant's Attempted and Actual Monopolization through use of Fraudulently Obtained Patents." In this section, the plaintiff states that the "Nike + iPod products and related technologies and products have been some of the most successful consumer products ever marketed and sold throughout the world. The success of such products offerings has created a relevant marketplace and a modern phenomenon known as NikePlus.com where runners, athletes, and the public in general can learn about new products, buy shoes, clothing, and technologies under the Nike + trademark, share information about the activities in which they use the Nike + iPod products, virtually compete against each other and share stories about their successes and challenges. As a result of their extensive marketing, the Nike + iPod family of products have become market leaders worldwide."
The bottom line is that the market-monopolizing Nike + iPod family of products are using patents by PhatRat instead of the Plaintiff's patents. The Plaintiff states at the 123 mark of the complaint: "Vock saw the Plaintiff's Cherdak's patents as huge obstacles in pursuit of his unfair and anticompetitive trade practices. Instead of attempting to purchase the rights from Cherdak, Vock chose instead to materially misrepresent the metes and bounds of the Cherdak patents to the USPTO and the American People. Defendants' use of numerous invalid patents to extract revenue from parties in the market (and exclude others from that market) is clear evidence of the predatory practices in the market."
It will be interesting to see how this case plays out, as it could affect how Apple and Nike move forward with the Nike + iPod product lines. On the other hand, Apple has been working very hard on "Apple-Native-Patents" relating to sporting including smart shoes and advancing a pedometer for some time now. In fact, Apple was just granted a Nike + iPod related patent yesterday that has nothing to do with either PhatRat or Curtis Vock. You could also check out our "Tech: Sports" patent archive to review other patents that have no relationship with third parties.
Obviously Mr. Cherdak believes that he has a case here, and being that he's wrestled with some of the largest companies in the US in the past, who will argue with him. Yet some will in fact accuse Cherdak of being nothing but another patent troll. I'll refrain from that position because he's listed as the inventor on the patents listed in this lawsuit and therefore isn't a patent troll by definition. Yet there's another reason for refraining: I received an email recently from an Australian IP Attorney who said that one man's patent troll is another man's IP Defender. After assuring me that he didn't wear a cape, tights and a mask to court as the "IP Defender!" – I had to acknowledge that there was a grain of truth to his position – even though I still can't get that super-hero image of IP Defender out of my head – Ha!
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