Friday, December 14, 2007

Diaper Suit Filed Against Kimberly Clark Over Patents

Private label diaper manufacturer Arquest, a privately-held company spun off from Johnson & Johnson, filed suit in federal district court in New York against Kimberly-Clark seeking declaratory judgment, according to this Reuters article. Kimberly-Clark, which sells Huggies-brand diapers, had told Arquest that some of its products violated patents held by Kimberly-Clark for disposable diapers. The parties were unable to reach an agreement after attempting to negotiate the dispute.

According to a patent litigation survey released by Fulbright & Jaworski (and discussed here in the Patent Law Blog), most patent claims are asserted by very large companies, while most defendants are more concerned about the cost of litigation rather than a potential injunction.

For those interested in patent law, it's worth noting that Congress is currently considering the Patent Reform Act of 2007 (H.R. 1908, S. 1145). The House passed it as H.R. 1908, and the Senate may soon consider S. 1145.

Commentators supporting passage of the measure, including conservative Viet Dinh, argue, inter alia, that reform is needed to ensure innovations are properly rewarded, and to deter frivolous litigation.

Other commentators oppose the measure, responding that the number of patent lawsuits has not kept pace with the number of new patent fiings and rapid reform of patent laws is not needed. Furthermore, because injunctive relief is less certain after the Supreme Court's Ebay ruling, damages should be increased but the reforms will decrease damages, argues Richard Epstein. The Patent Reform Act will also allegedly weaken the patent system becuase it switches to a first to file rule (rather than first to invent).

Not everyone considers the consumer packaged goods ("CPG") / retail industry a high-tech industry, but technological developments and innovations are increasingly important to industry stakeholders. Last year, for example, I worked on a lawsuit involving a patent dispute over RFID tags, a technology that is increasingly being adopted by CPGs and retailers.

The increasing complexity of modern business and litigation is demonstrated by the Kimberly-Clark case. While diapers were once a rudimentary garment, they are now subject to multiple patents, and are the subject of high-stakes litigation. See Arquest, Inc. v. Kimberly-Clark Worldwide, Inc., No. 2007cv11202 (S.D.N.Y filed Dec. 12, 2007).


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