Patent Law Blog (Patently-O)

Mettler-Toledo v. B-Tek: Limiting Claim Elements to the Preferred Embodiment

By Jason Rantanen

Mettler-Toledo, Inc. v. B-Tek Scales, LLC (Fed. Cir. 2012) Download 11-1173-1200
Panel: Bryson, Moore (author), Reyna

In my Introduction to Intellectual Property class this week we discussed the classic tension between (1) reading the claims in light of the specification and (2) not importing limitations from the specification into the claims.  In most instances the court attempts to strike a balance between these two canons (exemplified by Phillips).  When means-plus-function claims are involved, however, different rules apply - as this case illustrates.

At issue in Mettler-Toledo was technology for weighing objects, such as large commercial trucks. The first of Mettler's asserted patents, No. 4,815,547, describes an individual load cell; the second, No. 4,804,052, describes a system and method for correcting weight measurements based on the location of objects on a scale.  Following jury findings that the patents were not infringed and that the '052 patent would have been obvious, the district court denied Mettler's JMOL.  Mettler appealed.

On appeal, Mettler challenged a key construction of the '547 patent claims: that several of the means-plus-function terms require a multiple slope integrating A/D converter, and equivalents thereof, rather than any generic A/D converter.  Mettler contended that by limiting the claims in this way the district court erred by importing the structure of only the preferred embodiment into the claims. 

The CAFC rejected this argument.  "Our case law is clear that a means-plus-function claim limitation is limited to the structures disclosed in the specification and equivalents."  Slip Op. at 7.  Here, the patentee chose to disclose only a single embodiment; thus, the means-plus-function claim was necessarily limited to that embodiment.  "If a patentee chooses to disclose a single embodiment, then any means-plus-function claim limitation will be limited to the single disclosed structure and equivalents thereof."  Id.  Nor was a single reference to an "A/D converter" in the Abstract sufficient to compel a broader structural disclosure because it was not linked to any claimed function.

Obviousness: The CAFC also affirmed the district court's denial of JMOL of nonobviousness of the '052 patent.  Mettler's challenge was based on the argument that a prior art reference did not teach correcting for load position, an element of each claim of the '052.  The CAFC rejected this argument, first noting that the issue of what is disclosed by a prior art reference is a question of fact, then concluding that substantial evidence supported the jury's finding as to the teaching of the 'prior art reference. 

B-Tek's Cross Appeal for Sanctions: During the litigation B-Tek requested documents relating to Mettler's manufacturing capacity in order to rebut Mettler's lost profits damages claim.  Although Mettler stated that it had no such documents, during trial a Mettler employee admitted that certain documents existed (a production schedule and plant diagram).  Mettler further admitted that it provided some of these documents to its damages expert.  The district court denied B-Tek's motion for sanctions on the grounds that the possible existence of these documents had been disclosed during a deposition, these documents were of marginal relevance, and that B-Tek could not show any harm or prejudice given that it prevailed on the issue of infringement. 

On appeal, the CAFC concluded that the district court did not abuse its discretion in declining to sanction Mettler, correctly considering the relevance of the documents and the any harm to B-Tek.

Edited to clarify the first sentence. 

Federal Circuit: COACH not a sufficiently famous brand and therefore cannot oppose a similar mark on a trademark dilution principle.

Coach Services v. Triumph Learning (Fed. Cir. 2011)

Coach is a famous American handbag maker.  Coach bags sell for $300 or more each and the company typically earns billions of dollars in revenue each year selling Coach branded products.  Triumph Learning makes test prep materials it also sells under the trade name "Coach."  Triumph's success has been driven by the no-child-left-behind testing requirements and the company sells most of its Coach-branded products to schools hoping to prepare their students for state mandated exams.

The dispute here arose when Coach Services opposed Triumph's trademark registration for use of the COACH mark. Triumph won at the Trademark Trial and Appeal Board (TTAB) and has now won on appeal.

Here, Coach Services had little success showing a likelihood of confusion because the two companies operate in such distinct market areas and offer products that are distinct from one another.  The most interesting aspect of the appeal for trademark law is the court's rejection of Coach Services' dilution claim under the Trademark Dilution Revision Act of 2006 ("TDRA"), 15 U.S.C. § 1125(c).  For patent attorneys considering practicing before the future Patent Trial and Appeal Board (PTAB) the most important aspects of the opinion focus on the odd but forceful rules of evidence applied by the Board and supported here by the Federal Circuit.

Trademark Dilution: The holder of a famous mark has trademark rights that go beyond the normal likelihood of confusion test found in the Lanham Act. In a dilution claim a famous mark holder can also stop uses that are likely to blur or tarnish the mark even in the absence of potential customer confusion.  Here, Coach Services argued that Triumph's use of COACH for its services blurred the power of the mark by using it for non-related, non-luxury goods.

Not Famous: In a dilution claim, the law requires that the mark holder prove that its mark is widely recognized by the general public. When the mark is also a common word - such as COACH – the mark holder must also demonstrate that those ordinary "uses of the mark are now eclipsed by the owner's use of the mark . . .  in almost any context" and that the mark has become "a household name."  Coach services failed to convince the judges that its mark was sufficiently famous to qualify.

For its case, Coach presented a set of facts to prove that its mark was sufficiently famous. These included: (1) sales and advertising figures for years 2000-2008; (2) its sixteen federal trademark registrations on the mark; (3) extensive unsolicited media attention referring to the mark; (4) joint marketing efforts for the mark; (5) two Second Circuit decisions finding the Coach hang-tag, which features the COACH mark, to be famous; and (6) Coach Services' internal brand awareness survey showing extensive awareness among 18-24 year old consumers.

None of these factual arguments persuaded the judges that the COACH mark was famous. In particular, the court rejected the company's sales and advertising figures because they had not been properly authenticated and admitted as evidence before the TTAB. Further, none of the facts presented by Coach Services actually lead to the conclusion that the word mark COACH is a household name that overwhelms the ordinary use of the word coach.

Notes:

• In some of my courses, I have historically used an image of a coach bag to think through some trademark and trade dress principles. This year, I had to go through three students before someone recognized the brand.

Suffolk Law Event

by Dennis Crouch

On Friday (2/24) I will be speaking at a Suffolk University Law School day-long patent law symposium.  My panel will focus on patentable subject matter and will include commentary from Chief Judge Rader, USPTO Solicitor Ray Chen, and Boston attorneys Marry Murray, Paul Cronin, and Scott Pierce. Later in the day panels will discuss patent reform as well as ongoing litigation strategies.  I hope to see you there. http://www.law.suffolk.edu/academic/als/coursedetail.cfm?cid=746

 

Tune in today (Feb 21) for the USPTO's Senior Leadership Webinar at 4:30-5:30 pm EST. (Submit questions early to webinar@uspto.gov). The webinar will include Director Dave Kappos; Deputy Director Terry Rea, Patents Commissioner Peggy Focarino, General Counsel Bernie Knight, and BPAI Chief Judge James Smith. USPTO Chief of Staff Peter Pappas will moderate.

To join, direct your browser to: https://uspto-events.webex.com/uspto-events/onstage/g.php?d=998930187&t=a. Use the secret password: 123456. Phone in at 408.600.3600 (Access code: 998 930 187).

Supreme Court: No Move Yet on Denying Human Gene Patents

The Supreme Court is in the midst of deciding whether to grant the Ass'n of Molecular Pathology's petition for a writ of certiorari in the Myriad gene patent case. The petition, led by public interest patent attorney Dan Ravicher, poses a simple question to the court: "Are human genes patentable?" Petitioners also ask the Supreme Court to provide more latitude for public interest groups to challenge patents even in the absence of any personal or direct threat of an infringement action – arguing that the Federal Circuit is not following the Supreme Court's guidance set forth in MedImmune.

In addition to the party briefs, ten amici briefs were filed with the court from a variety of medical associations, hospitals, and professors – all in support of the petitioners. None of the major patent law associations filed briefs in the case.

The briefs were complete and distributed to the Justices on January 25 in preparation of a February 17 conference. In patent cases, the typical result of the conference is that the court either (1) grants certiorari; (2) denies certiorari; (3) invites comments from the Solicitor General; or (4) does nothing until the next conference. We learned today that the Supreme Court is following path number 4 – no action until next time. At some point before the close of term, the Supreme Court will revisit the case and announce that it is following one of the other paths. In an e-mail, Hal Wegner noted that the Supreme Court is scheduled to release new orders three times during next five weeks.

The delay may well be related to the fact that the Court is in the midst of drafting a merits decision in another § 101 patent-eligibility case of Mayo v. Prometheus. Although the Mayo case focuses on medical methods rather than genes per se, there is still a good chance that outcomes will be linked.

Other Denials: The court today did deny certiorari in several patent cases, including Janssen Biotech, Inc. v. Abbott Laboratories; Hynix Semiconductor v. Rambus; and Eastman Chemical Co. v. Wellman, Inc.

In Janssen Biotech, the patentee unsuccessfully challenged the de facto heightened written description standard that the court has placed on biotechnology focused patents. In Hynix, the accused infringer unsuccessfully asked the Supreme Court to follow principles of equity in preventing infringement claims over industry-standard products by a patentee who had concealed its pending patent applications from the standard setting organization and had amended its claims during prosecution to cover the agreed-upon standard. In Eastman Chemical, the Supreme Court refused to consider whether the Federal Circuit should add some teeth to the indefiniteness doctrine codified in 35 U.S.C. §112(2).

APPLE V MOTOROLA in the EPO and Germany – patentability of user interface features

Guest Post by Paul Cole of the UK firm of Lucas & Co.

According to BBC News last Friday, Apple has succeeded in the German courts in enforcing a patent for a user interface feature for its mobile devices. The ruling demonstrates the value of European patents for "software" inventions where a "technical" effect can be demonstrated. The claims in the granted patents and the problems that they solve provide insight about what features of a user interface might be regarded as "technical" by the EPO. The advantages to a software developer of being able to patent innovative interface features that are important to the "look and feel" of the device and the software running on it are self-evident.

The affirmed patent is EP-B-1964022 which relates to the "slide to unlock" feature found in iPhones. The claim as granted is set out below:

A computer-implemented method of controlling a portable electronic device comprising a touch-sensitive display, comprising:
-detecting contact with the touch-sensitive display while the device is in a user-interface lock state;
-transitioning the device to a user-interface unlock state if the detected contact corresponds to a predefined gesture; and
-maintaining the device in the user-interface lock state if the detected contact does not correspond to the predefined gesture; characterized by
moving an unlock image along a predefined displayed path on the touch-sensitive display in accordance with the contact, wherein the unlock image is a graphical, interactive user-interface object with which a user interacts in order to unlock the device.

A copy of the decision is not yet available online, but study of the online file of the European patent application (which was not opposed after grant) is instructive. The Examining Division accepted that the provision of a device control method with visual feedback was a technical problem but objected that the claimed subject matter was obvious because dragging and dropping were known. In their reply, Apple argued that the objective technical problem was to provide a more efficient user-friendly procedure for unlocking a portable device and to provide a sensory feedback to the user regarding progress towards satisfaction of a user input condition that was required for unlocking to occur. As set out in the claim, the unlock image signalled to the user that the device was locked and simultaneously indicated a contact point that a user had to touch in order to unlock the device. The displayed path indicated to the user where and how the unlock image had to be moved and the current position of the image indicated progress already made towards the unlocked condition. The method was easier than in the prior art where a sequence of operations had to be memorised.

The second patent, EP-B-2059868 which relates to the handling of digital images, has not yet been ruled on by the German courts However, the granted claim and the reasons for grant are also of interest since any iPhone user will be familiar with the "Camera-Roll" feature in question.The main claim is set out below.

A computer-implemented method, comprising: at a device with a touch screen display:
-detecting a first movement of a physical object on or near the touch screen display;
-while detecting the first movement, translating a first digital object displayed on the touch screen display in a first direction, wherein the first digital object is associated with a set of digital objects; characterized in that:
-in response to display of a previously hidden edge of the first digital object and continued detection of the first movement, displaying an area beyond the edge of the first digital object;
-after the first movement is no longer detected, translating the first digital object in a second direction until the area beyond the edge of the first digital object is no longer displayed;
-detecting a second movement of the physical object on or near the touch screen display; and
-in response to detecting the second movement while the previously hidden edge of the first digital object is displayed, translating the first digital object in the first direction and displaying a second digital object in the set of digital objects.

It appears from the file of the granted patent (which again was not opposed) that the technical effect of allowing a user to navigate within an image and to switch between images with a minimum of user input types was sufficient to support patentability.

The EPO acted as International Searching Authority, International Preliminary Examination was not necessary since the written opinion accompanying the search was favourable to patentability, and no objections were raised on entry into the European regional phase. The advantages to US applicants of using the EPO as ISA and possibly subsequently IPEA if allowable subject matter is likely to be identified are also self-evident.

It is instructive to compare these two granted European patents with another "look and feel" application which was refused by the EPO (EP1249014, Appeal Board decision T 0050/07; US 6396520). Interestingly this is the only Apple patent or application which appears to have been the subject of proceedings before an EPO Appeal Board. The invention concerned transition of a window between a maximised state and an icon state on the taskbar.

The main claim before the EPO Appeal Board read:

A method of transitioning a window on a computer screen between an open state and a minimized state, comprising the steps of:
-obtaining location information associated with a first window position in the open state;
-obtaining location information associated with a second window position in the minimized state;
-defining a set of curves, wherein said curves connect two selected points that relate to a dimension of said window in its first position to corresponding points of said window in its second position; and
-displaying said window at successive positions within said curves from said first position to said second position while scaling said dimension of the window to fit within said curves in a manner so as to give the appearance of sliding.

The issues before the Appeal Board provide an object lesson in how the state of the art at the application date, the exclusions as to patentable subject matter under a.52 EPC and the limitations of the disclosure of the application itself can exert a collective "squeeze" such that the result is refusal.

The closest prior art was US 6002402 (Schacher, Symantec) which showed a window transitioning between a maximised and an icon state, and novelty was to be found in the set of curves through which the transition took place producing a "funnel-like" effect and the display of the window at successive positions while it was being scaled down.

Arguments based on improved functionality received short shrift, the Appeal Board observing:

"Moreover, the alleged ergonomic improvement achieved by directing the user's attention to the final destination of the minimized window, so that the user will remember its location and, thus, find it again more rapidly, is not convincing either. As far as the precise location of the minimized window on the task bar is remembered at all by the user, this will only be ergonomically valuable to the user for a short amount of time, after which it will normally be forgotten. Furthermore, as minimized windows are at any rate typically arranged according to some predefined scheme (typically added at the end of the task bar or returned to the corresponding application button on the task bar) the user would already know where to find the minimized window. Therefore, the board is not convinced that there would be any added ergonomic value in drawing the user's attention to the final destination of the minimized window in the claimed manner."

The differences between the invention and the prior art were therefore held to reside in the production of an aesthetic effect. Since that effect had no technical character, it could not in itself contribute to inventive step. However, it could be taken into account in formulating the objective technical problem over Schacher which was how to achieve the specified "funnel-like" effect. The information in the specification in this regard was limited, as indicated by the flowchart below:

The description did not show that there was any difficulty in the shifting and scaling operations, and on the contrary the description explained that a variety of techniques for doing this would be apparent to those of ordinary skill in the art. Unsurprisingly, therefore, the Appeal Board held that the achievement of the indicated technical effect was held to be straightforward for a designer of graphical user interfaces.

If Apple had drilled further down into the transition method than they did, was there anything else that could have saved the application? The look and feel of a window as it transitions to and from the taskbar is a striking effect which it is submitted impresses most users each time they see it happen. The specification explains that the display is updated line-by-line during the transition and the image is recalculated for each line, but that was evidently not enough for allowance and in any event would be easy to avoid. However, in addition to software the invention is in the field of moving images where visibility and human persistence of vision are important. Was there an optimum time, or a range of optimum times within which the transition could take place without interfering with the operation of the computer and which would display the most clearly visible and most aesthetically satisfying sequence of images to the user? It is possible that the range of times for which the "micro-movie" that users see at each window transition lasts would not have been held to be obvious and instead would have been held to require thought both from the operating system point of view and from the standpoint of user trials. A limitation along these lines could have been something that the Appeal Board might have found less easy to treat dismissively.

One take-away message for US applicants is the need to draft applications bearing in mind the exclusions under the EPC: stating as one of the main objects of the inventions "to provide more aesthetically pleasing operations" plays straight into the hands of an Examining Division or Appeal Board within the EPO and even if such objects can and should be stated, functional objects are best set out first. Another message is not to overlook the role of the human user in the invention: in the refused application the needs of the computer and the attractiveness of the micro-movie as a matter of shape were explained but what was necessary for the user to see the "micro-movie" and how long it should last were left unstated.

Whither Obviousness: Narrow Range Anticipated by Broader Range in Disclosure

By Dennis Crouch

ClearValue v. Pearl River Polymers (Fed. Cir. 2012) (Opinion by Judge Moore, joined by Judges PROST and SCHALL)

This case presents a classic law school hypothetical of an invention that is anticipated but likely not obvious. According to the appellate panel, the prior art fully discloses and enables the invention but also teaches that the proposed invention is impractical and does not work well. As discussed below, however, the anticipation holding itself is somewhat controversial because it is based upon the conclusion that a broad range disclosure found in the prior art ("less than 150 ppm") anticipates the narrower range found in the claims ("less than 50 ppm").

A jury found ClearValue’s patent valid and infringed and the district court denied the defendants motions to set the patent verdict aside. On appeal the Federal Circuit reversed based upon the appellate court's own factual finding that a single prior art reference teaches and enables each element of the asserted patent claim.

Background: The patent at issue is directed to a process for clarifying water using a flocculated suspension of aluminum along with high molecular weight quarternized polymers. The listed inventor, Richard Haase continues to be an owner of the patent and also CEO of ClearValue. Haase has filed more than 50 water purification and energy related patents and is also a graduate of the University of Missouri (ChemE + Mathematics + Economics). The defendant, Pearl River was once ClearValue’s customer but later began making its own version of the patented process.  ClearValue and Haase sued for patent infringement and for trade secret violation (for using the process without authority even before he filed for patent protection).

Anticipation versus Obviousness: The appeal focused on anticipation. Pearl River argued that all of the elements of CV's asserted claim were previously disclosed in U.S. Patent No. 4,800,039 (Hassick). The jury found otherwise. As a matter of procedure, a jury's verdict must be supported by "substantial evidence." If not, it must be set aside either by the district court or on appeal. At trial, the defendants had presented their case that Hassick taught each element of the claimed invention while the plaintiffs pointed only to "teaching away" found in patent. Unfortunately for the plaintiffs, "teaching away" is legally irrelevant to the question of anticipation. See Celeritas Techs., Ltd. v. Rockwell Int'l Corp., 150 F.3d 1354, 1361 (Fed. Cir. 1998). Rather, under 35 U.S.C. § 102 a claim will be anticipated and therefore invalid if a single prior art reference describes "each and every claim limitation and enable[s] one of skill in the art to practice an embodiment of the claimed invention without undue experimentation." Quoting Am. Calcar, Inc. v. Am. Honda Motor Corp., 651 F.3d 1318, 1341 (Fed. Cir. 2011).

Genus Species Anticipation: The only gap in the prior art disclosure was that Hassick generally disclosed "low-alkalinity systems (i.e., 150 ppm or less)" and "alkalinity of between 60-70 ppm" while the asserted patent claimed "alkalinity less than or equal to 50 ppm." In its 2006 Atofina decision, the Federal Circuit addressed a similar genus-species situation involving a narrow claimed temperature range and a broader temperature range found in the prior art. Atofina v. Great Lakes Chem. Corp., 441 F.3d 991 (Fed. Cir. 2006). In Atofina, the court held that a broad genus range disclosure in the prior art did not anticipate the narrow species range claimed. There, both the hypothetical “person having skill in the art”  (PHOSITA) and the patentee agreed that there was something special or “critical” about the claimed temperature range. The court distinguished this case from Atofina based upon its factual conclusion that “there is no allegation of criticality or any evidence demonstrating any difference across the range.”  Based upon the logical analysis that the narrow range is not critically different from the broad range, the Federal Circuit held that the claimed narrow range was fully disclosed by the broad range and therefore is unpatentable.

Comment – Whither Obviousness: Interesting notion: The mechanism that the court used to distinguish this case from Atofina are very much akin to obviousness principles — looking essentially for synergy or unexpected results that make the narrow range qualitatively different from the broad range.  It seems to me, however, that if these obviousness principles can be used to extend the anticipatory scope of prior art, then other obviousness principles (such as teaching away) should also be relevant.

Trade Secret Negated by Prior Art?: The Texas jury found Pearl River liable for trade secret misappropriations. However, the district court rejected that conclusion based upon an implicit admission by ClearValue that all of the elements of the alleged trade secret were publicly known at the time and found in the Hassick reference.  On appeal, the Federal Circuit affirmed without further analyzing the extent that public availability of knowledge in the form of a third-party prior art document is sufficient to disqualify the knowledge as a trade secret. I am not an expert on Texas trade secret law, but the at least the Restatement of Torts is clear that a trade secret “may be a device or process which is clearly anticipated in the prior art.”

 

 

USPTO Maintenance Fees

by Dennis Crouch

[This is an update of my 2009 post on the topic]

Over half of the USPTO operational budget is derived from maintenance (or renewal) fees paid by patentees. Fees are due at 3½, 7½, and 11½ years after issuance and each subsequent fee is substantially higher. Thus, under the current schedule, the first fee is $1,130, the second fee is $2,850, and the third fee is $4,730.  For the USPTO, this comes without any costs — all the work of examining is already complete.  The funds are used to subsidize ongoing examination. The USPTO has proposed to increase the maintenance fees substantially in near future as a mechanism of raising further funds for patent operations. 

The chart below shows the percentage of patents where maintenance fee payments are made for patents grouped by year of patent issuance.  The vast majority of patentees pay the first fee, but only about 50% pay all three. The 12–year delay in paying fees makes the chart appear to be missing data on the right side.

USPTO revenue from maintenance fees has been growing over time — lead primarily by an increase in the number of patents issued; an increase in the percentage of fees paid; an increase in the fees charged; and a decrease in the percentage of small entities who pay only ½ fare.

All USPTO fees are subject to market whims and macro-economic effects.  Maintenance fees are a particular problem because a decrease in maintenance fee payments does not lead to any decrease in workload for the Office. In 2009, the USPTO was suffering under a budget shortfall and I noted that the greatest cause of that shortfall was the dropping rate of renewal.

As an aside – it is interesting to note that, even though small entities receive a 50% discount on maintenance fee payments, they are much more likely to abandon their patents and not pay the mantenance fees. [Link]

Tags: Maintenance+Fees, Academic+Studies, Fees

Patently-O Bits & Bytes by Lawrence Higgins

USPTO Patent Externship

• The USPTO will be accepting application for their patent externship until February 29. Last year there were about 200 students who participated in the program. The program will last anywhere from 8-10 weeks and is at the USPTO headquarters in Alexandria, Virginia. This is a great opportunity for anyone who wants to work in the patent field. [Link]

Chisum Patent Academy

• The Chisum Patent Academy will hold its next Intensive Patent Law Training Seminar in New York City on Feb. 22-24, 2012. Topics to be addressed include the America Invents Act of 2011, recent nonobviousness decisions, inequitable conduct post-Therasense, and the continuing schism in the Federal Circuit over patent claim construction. The Chisum Patent Academy offers what CLE providers and patent bar review courses simply can't: premium-quality patent law education in a unique seminar-style setting. Co-taught by leading patent law scholars Donald Chisum and Janice Mueller, the intensive three-day seminars are limited to ten (10) participants and conducted in roundtable, interactive style. [Link]

Patent Jobs:

• Stoel Rives is searching for an associate attorney with 3-5 years of experience in patent prosecution and an EE background to work at their Salt Lake City office. [Link]
• Weaver Austin Villeneuve & Sampson is seeking a patent attorney with 3-5 years of experience and a background in EE to work at their Oakland office. [Link]
• Schwegman, Lundberg & Woessner is looking for patent attorneys with 2+ years of experience or 5+ years of experience if telecommuting. [Link]
• Holland & Knight is searching for 2 IP litigation associates with 4-6 years of experience to work at their Boston or Chicago offices. [Link]
• Howard & Howard is seeking IP associates with 4-8 years of experience of patent prep experience to work at their Royal Oak, Michigan office. [Link]
• Armstrong Teasdale is looking for patent attorneys with 2-6 years of experience to work in one of their offices. [Link]
• Pramudji Law Group is searching for a patent agent/attorney/engineer with at least 2 years of patent experience to work at their Houston office. [Link]
• Shook, Hardy & Bacon is seeking a litigation associate with 3-4 years of litigation experience work in their Kansas City office. [Link]
• Paul Hastings is searching for a patent litigation associate with a computer science degree and experience with patent litigation to work in their Atlanta office. [Link]
• Krieg DeVault is looking for an IP associate with 3-7 years of experience to work in their Indianapolis office. [Link]
• UTC Power is searching for an IP paralegal with 2-4 years of IP experience to work at their South Windsor, Connecticut location. [Link]
• Fennemore Craig is seeking an experienced patent attorney to work in their Phoenix or Denver office. [Link]
• Gore Medical Products is searching for an IP technical specialist to work at their Flagstaff location. [Link]
• Wells St. John PS is looking for a patent attorney with 4+ years of experience in all aspects of IP practice to work at their Spokane office. [Link]
• Sutherland is seeking a patent associate/agent with 2-5 years of experience and a degree in chemical engineering to work at their Atlanta office. [Link]

Upcoming Events:

• IBC Legal's 20^th Annual Biotech & Pharmaceutical Patenting Conference 2012 will be held on February 21-22 in Munich, Germany. Get advice and analysis from a diverse team of international life science and IP experts on recent case law and developments, patent filing, patent life cycles, SPCs, patent infringement, EC Bolar implementation and more! Patently-O readers get a 10% discount when registering with this link. [Link]
• Fitch, Even, Tabin & Flannery LLP will present a free one-hour CLE webinar, "Patent Reexaminations in Parallel with Litigation," on February 22, 2012 at 12 noon EST. Joseph E. Shipley will discuss the factors that should be considered in deciding whether to seek reexamination as an alternative or adjunct to litigating patent validity in the federal courts. Topics will include what can and cannot be achieved in reexamination, current statistics on outcome, associated risks and costs, time frames, and reexamination options and alternatives. The upcoming new USPTO procedures--Post-Grant Review and Inter Partes Review--will also be covered. [Link]
• The 7^th Annual Conference on EU Pharma Law & Regulation will be held on February 22-23 in London. The conference will bring together eminent in-house counsel from the world's largest pharma and biotech companies, top legal practitioners and regulatory experts in an outstanding speaker panel. (Patently-O readers register with PO 10 for a discount). [Link]
• Maurer School of Law Center for IP Research will hold a CLE Fundamentals of Federal Circuit Advocacy event on February 23. Greg Castanias will lead a discussion of patent appeals before the Federal Circuit. Also appearing: Center for Intellectual Property Research senior advisor Donald Knebel, Prof. Mark D. Janis, and former Federal Circuit clerk Allison Kerndt. [Link]
• The Florida Bar 3^rd Annual IP Law Symposium will be held on March 1-2 on Orlando. The IP Symposium will address recent developments and important issues in IP law, including: Perspectives on the America Invents Act, Copyright Law and the First Sale Doctrine, Third Party Liability in IP, Enforcing IP on the Internet, Latest Developments in Patent, Trademark, and Copyright Law, and Recent Developments at the TTAB. Guest speakers include; Anne Gilson LaLonde, Scott Bain, John Welch, and many others. [Link]
• Section 101 Gatekeepers: Finding the Patentable Subject Matter Line in a Judicial Sandstorm, webinar will be hosted by AIPLA on March 7. The webinar will be presented by Professor Christopher Holman and attorney Robert H. Fischer. [Link]
• LES (USA & Canada) 2012 Winter Meeting will be held March 12-14 in Anaheim, CA. The meeting will focus on cutting-edge issues in the high tech space with overlapping content in related industries, including clean tech, nanotech, and medical devices. Featured speakers include Honorable Randall Rader, Chief Judge, U.S. Court of Appeals for the Federal Circuit; Catherine Casserly, CEO, Creative Commons; and Patrick Ennis, Head of Global Technology, Intellectual Ventures. Patently-O readers save $100 with code PO1. [Link]
• C5's 22 Forum on Biotech Patenting conference will take place March 14-15 in Munich, Germany. The conference brings together experienced in-house counsel from both innovator and generic pharma and biotech companies and their expert legal advisors from various jurisdictions across the globe. Session will cover the patentability of gene sequence patents in Europe and the US, current developments on biotech products and patent considerations for bio-deposits, and many other sessions. (Patently-O readers register with PO 10 for a discount). [Link]
• American Conference Institute's FDA Boot Camp conference is scheduled for March 20-21 in New York, NY. ACI's FDA Boot Camp has been designed to give products or patent litigators, as well as patent prosecutors, industry in-house counsel, and life sciences investment and securities experts, a strong working knowledge of core FDA competencies. (Patently-O readers register with PO 200 for a discount). [Link]
• American Conference Institute's PTO Procedures Under the America Invents Act conference is scheduled for March 26-27 in New York, NY. This conference will serve as a practical and tactical guide for PTO practice post-Patent Reform. (Patently-O readers register with PO 200 for a discount). [Link]
• The European Generic Medicines Association is hosting the 10th EGA International Symposium regarding Biosimilar Medicines on April 19-20 in London. Greenblum & Bernstein is providing a pre-symposium workshop on April 19, 2012 titled: Biosimilars In America: IP Strategy and Due Diligence. The workshop will explore the mechanics of the Biologics Act with an emphasis on how the Act relates to the involved intellectual property and how the intellectual property may impact the biosimilar applicant's strategy for entering the market. [Link]

Contact Lawrence.Higgins@patentlyo.com with leads for future Bits and Bytes.

Predicting Patent Litigation - A Response by Professor Chien

In the preceding post, I highlighted two recent critiques of Professor Colleen Chien's recent article on predicting patent litigation.  Below, Professor Chien responds to these critiques. - Jason

By Colleen V. Chien, Assistant Professor of Law, University of Santa Clara School of Law

In my article Predicting Patent Litigation, I describe the relationship between a number of intrinsic and previously unexplored acquired patent variables and the likelihood of the patent being litigated.  In the article, I state that “from the starting point presented here, there are a number of directions that follow-up research could take to improve the resolution of the ranking approach described here that, while promising, does not provide a ‘commercial grade’ solution to outstanding patent-clearance problems.” Along this vein, Petherbridge and Kesan et al provide thoughtful suggestions and questions about how the analysis could be verified, refined, and extended.  Their input is timely as efforts to do so are just getting underway, as part of adapting this exploratory project to commercial settings. Looking at more, and more recent patents, replicating the analysis, and adding additional variables, where it makes sense, will necessarily be part of this effort.

Since my paper was published I have been approached by a dozen or so parties interested in testing and applying the paper’s insights. The diversity of these interests addresses the two questions raised by the commentators. First, how precise must the model be? Though Petherbridge’s answer is “much more so,” the answer necessarily depends on the context of the application. On one hand, no level of precision in the algorithm can best a patent lawyer’s expert analysis of the claims and in very few cases would it make sense to proceed solely based on a mere calculation. On the other hand, if an insurance company is trying to use this as one of a variety of variables for calculating defense insurance rates, or for related applications where this filter is applied with others, this kind of algorithm can be useful. Likewise, the question, what variables should be considered? cannot be answered in a vacuum. Kesan et al suggest variables such as whether the particular patent is embodied in a product and the historical revenue of the patent owner. But even assuming these are better than other variables, the difficulty of getting them may make them impractical in many cases.

My article flags the difficulties with tracing what happens to a patent after issue as a potential problem but was not intended to definitively recommend that recordation rules be changed. Indeed, as I have explained in my recent comment “The Who Owns What Problem in Patent Law,” there are many reasons, the majority of which are economic and inadvertent rather than strategic, that it’s hard to determine who owns what patents. As part of the Kappos administration’s helpful efforts to improve access to patent data (examples here and here), the PTO has recently solicited input on this very question. While greater applicant disclosure is worth considering, I believe that the PTO could do much more with the information it already has. Currently, you cannot search among only in-force patents, or easily tell who the owner of record of patent is, how many times it has been cited, how much longer it may be in force, whether it has been reexamined, who requested the reexamination, or whether or not the current owner is a large or small entity. Yet making this information, which already exists, more accessible and supportive of business decision-making, could go a long way to enhancing the public’s ability to assess patent risks and opportunities.

 

 

The Unpredictability of Patent Litigation

By Jason Rantanen

In her article Predicting Patent Litigation, recently published in the Texas Law Review (and available here.), Professor Colleen Chien proposed a model for predicting which patents are most likely to be litigated based on a combination of intrinsic and acquired patent file characteristics.  The article has since spawned two short responses, one by Professor Lee Petherbridge of Loyola Los Angeles and the other by Professors Jay Kesan (Illinois), David Schwartz (Chicago-Kent), and Ted Sichelman (San Diego), both published by the Texas Law Review. Both acknowledge Chien's substantial contribution to the literature, but express caution about the extent to which it is possible to perform practically useful data-driven patent litigation prediction given the current state of knowledge.

In On Predicting Patent Litigation, Lee Petherbridge argues that data-driven patent litigation prediction presents difficult modeling problems, especially when models are constructed from the types of data identified in Predicting Patent Litigation.  He points out that models used to identify which patents are likely to be litigated need to be both specific and sensitive in order for them to be useful to innovators and their advisors. He also explains that models that rely on causal relationships between acquired patent characteristics (such as reexamination) and patent litigation can be adversely affected by problems such as omitted variable bias and simultaneity. These concerns, he argues, limit such models’ predictive usefulness because they can suppress the specificity and sensitivity necessary to make models practically useful. The response is available here.

Kesan et. al. also express reservations about Professor Chien's model in Paving the Path to Accurately Predicting Legal Outcomes, but do so from the angle of methodological concerns.  In particular, Kesan et. al. identify and discuss the merits and the limitations Chien's dataset and empirical methodology, also raising the endogeneity concerns discussed by Petherbridge.  In addition, they question the connection between Chien’s observations and her policy recommendations regarding patent record-keeping. The response is available here.

Taken together, these three works provide both a great starting point and a useful guide for anyone considering a data-driven approach to predicting patent litigation.

The USPTO’s Proposed Fees: Understanding Context and Keeping Sight of the Big Picture

Guest Post by Rick D. Nydegger. Mr. Nydegger is the former Chair of the Patent Public Advisory Committee and a Past President of the AIPLA.

The USPTO's release last week of its Proposed Patent Fee Schedule will likely spawn a wide range of reaction. Almost certainly some will raise a "hue and cry" and claim that the USPTO is needlessly enriching its coffers in a way that unfairly disadvantages the community of USPTO users. Others, like Horacio Gutierrez, Corp. VP and Deputy GC for Microsoft, will tend toward a more balanced view. In comments posted Feb. 9, 2012, Mr. Gutierrez observed that "Arguably there is no good time for a fee increase, and some will question whether increasing fees in challenging economic times is the right thing to do. But to us, there should be no question that now is the right time to have a discussion about the benefits of investing in further improvements in patent quality and the potential costs of delaying that investment." Mr. Gutierrez is right – this is the right time to have a discussion, and that discussion, at least in the initial stages, should focus on the big picture questions:

• How important is reaching 10 months to first action and reducing total pendency to 22.9 months by 2015? This is a major assumption that cuts across virtually all the proposed fees.
• How important is it to build a reserve fund equivalent to 3 months of the USPTO's annual operating expense, and how quickly does that need to be done? By some estimates, the reserve may be being funded at levels ranging from 150 million to 300 million dollars per year. Does this rank in importance with reducing pendency? In other words, should the user community be willing to simultaneously fund both of these objectives through higher fee increases, or would the user community prefer to see a more gradual, staged approach to building the reserve fund so that fee increases need not be quite so steep, at least for the next few years?
• Will the currently proposed fee schedule permit adequate investment in critical USPTO resources such as improving its IT systems, and continued hiring, training and retention of qualified examiners? What are the projected costs and time frames for accomplishing such investments in human and physical resources? And do these costs rank in importance with reducing pendency and creating a meaningful reserve fund? One could argue that investment in critical resources such as its IT systems and the hiring, training and retaining of qualified examiners is one of the best things the USPTO could do to improve and insure patent quality.

With any proposal as sweeping as this one, and particularly where the impact goes right to the bottom line, there will be a tendency to want to dig in and debate whether the fee changes proposed for each part of the USPTO examination process are justifiable. This will have a tendency to compartmentalize the debate in a way that may not be helpful. That is not to say that it is inappropriate at some stage to have a candid and probing dialogue between the Office and the user community that is designed to help the user community understand the methodology, models and assumptions behind the USPTO's proposed fees. This can only ultimately help the user community provide more meaningful response and guidance to the USPTO. But before that happens, we should first attempt to provide some sense of priority to the Office on the big picture questions, since those will impact fee setting across the board, and in a very substantial way. In other words, as users, we need to help the Office understand what is most important to us, and then be willing to help fund those priorities.

Once that happens, we can then invite the Office to share the assumptions and modeling (such as cost recovery assumptions, front-end fee vs. back end fees as mechanisms for cost recovery, etc.) that will invite productive dialogue and input on the specific fee proposals on a more individualized basis.

In any discussion of this type, the process has to begin someplace. The USPTO's Proposed Patent Fee Schedule released last week is just that – a starting point for discussion. As users of USPTO services, we will have the opportunity on Feb. 15th and Feb. 29th to engage the process and begin providing response to the Office. PPAC should be applauded for providing a set of thoughtful questions to guide those hearings, with focus on the big picture issues. Hopefully, those of us who participate in the process will understand the need to start with the big ticket issues, and will not let the discussion become embroiled in minutiae.

By Dennis Crouch

Tomorrow (Feb 16), I will be speaking at Professor Rantanen's home institution – the University of Iowa College of Law. Our session runs from 3:30 to 5:00 pm and will include additional commentary from Professor Rantanen and patent attorneys Jay Hamilton, Ryan Carter, Michael Gilchrist and Christopher Voci.

The public is welcome. I look forward to seeing you there and discussing issues of patent law reform. [LINK]

BPAI Appeals Cyclic Decision Making

By Dennis Crouch

The USPTO's Board of Patent Appeals (BPAI) has an incredibly large backlog of ex parte appeals pending – more than 25,000. In 2006, that figure was less than 1,000 pending appeals. Since then, the backlog has grown month-after-month-after-month. Cases being decided by the BPAI now were fully briefed more than two years ago, and began the appeal briefing process more than three years ago. Most of those are on applications filed at least five years ago with priority claims reaching back even further. The current USPTO solution is to hire more Administrative Patent Judges – 100 new judges this fiscal year with at least that many arriving next year. I agree that this is an important part of the solution. However, in my view simply hiring more judges is insufficient.

The following chart looks at the number of BPAI decisions each month. The pattern reveals the results of a performance rating system (i.e., quota system) used to judge the Judges. Ordinarily, BPAI judicial performance is reviewed two times per year, and that process is reflected in a systematic incentive for the judges to do more work at the end of the fiscal year (September) and at the midpoint (March). The chart shows those months as the high-points for BPAI output and the subsequent months as low-points.

It seems to me that the current cadre of Administrative Patent Judges have proven that they have the capability of increasing their throughput by 60% or more in any given month. But, the Judges only act on that capability when properly motivated. I hate to play the "if I were manager" game, but once these phenomena are recognized, a likely general solution is fairly obvious – provide motivation for the Judges to more often work to their potential. Economists have shown that people almost always act in their own self-interest – that's why personal incentives work. However, in a team environment, personal incentives are rarely sufficient. Most highly successful teams also rely on team and other goal oriented incentives that suggest a culture of success. In my mind, the chart showing high-effort-as-deadline-approaches suggests a commitment to personal achievement but also a lack of commitment to the broader timeliness goal of ex parte patent appeal administration. Of course, timeliness is only one variable in the time-quality-cost equation, and the other important elements cannot be ignored.

As the PTO moves to more than double the size of the Board, now is the time to make structural changes to ensure a better future for this important segment of the Office.

Note - A key feature of the chart above is that the figures for FY2012 are significantly higher than for prior years. Unfortunately, the increase in productivity is still only slowing the growth of the backlog. With the increase in judges, I expect for the backlog to begin declining by the end of this fiscal year. Further, once implemented, the proposed increased appeal fees will also tend to reduce appeals filed.

BPAI On Statutory Subject Matter

By Dennis Crouch

Two cases where the Board found statutory subject matter:

Ex Parte Hu, App. No. 2010-000151 (BPAI 2012). The examiner rejected claims under Section 101. On appeal, the BPAI held that the claimed "computer-readable storage medium" is "directed to a tangible storage medium, which can be read by a computer" and therefore fall "within one of the four statutory classes of 35 U.S.C. § 101" and qualify as patentable subject matter. The Board distinguished from a broader claim of a "computer readable medium" that would not qualify as tangible.

Ex Parte Svendsen, App. No. 2011-012505 (BPAI 2012). The claim included some machine-like elements such as a wired communication interface. However, the machine elements were all known in the prior art. The Examiner had thus rejected the claims as lacking patentable subject matter – noting that the physical ties were merely "extra-solution activity." On appeal, the Board reversed – holding that the "extra-solution activity" doctrine "is more properly applicable to cases where Appellant is attempting to circumvent the prohibition on patenting abstract ideas by adding insignificant and unrelated activity. . . . Here, however, the storing and transmitting steps are clearly integral to the selection and delivery of media previews."

Three cases where the Board found no statutory subject matter:

Ex Parte Rigoutsos, App. No. 2009-010520 (BPAI 2012). The Board affirmed a Section 101 rejection of the claimed "method for annotating a query sequence." The method included three steps: "accessing patterns associated with a database comprising annotated sequences; assigning attributes to the patterns based on the annotated sequences; and using the patterns with assigned attributes to analyze the query sequence." In its analysis, the Board found that the claimed method failed to satisfy the Machine-or-Transformation test and therefore failed satisfy the patentable subject matter test of Section 101. "Appellant's argument does not identify a statutory transformation, and we will sustain the rejection of representative independent claim 1 and its dependent claims 2-17."

Ex Parte Webb, App. No. 2010-008274 (BPAI 2012) The Board affirmed a Section 101 rejection of the claimed "method for playing a card game." The method includes the seeming physically transformative step of "dealing two cards to a player." However, the specification was clear that the cards could be either physical or virtual. In analyzing the meaning of "cards," the Board determined that cards as claimed "are not an apparatus [or a] machine [but rather are] directed to a general concept that is abstract and sweeping as to cover both known and unknown uses of the concept and be performed through any existing or future-devised machinery." This rejection is akin to the Supreme Court's rejection of Morse's telegraph patent that attempted to claim the use of electro-magnetism to transmit a signal – regardless of the machine used to generate, transmit, or decode the signal. Here, the Board found that the "card limitation" added no patentable subject matter hook because it contains "no limitations as to the mechanism for playing the game. The claimed method does not sufficiently recite a physical instantiation. We conclude that Appellant's claims attempt to patent and preempt an abstract idea of the game in all fields, and thus is ineligible subject matter under 35 U.S.C. § 101."

Ex Parte Edelson, App. No. 2011-004285 (BPAI 2012). Edelson's patent application is directed to a "computer implemented method" for creating asset backed derivatives. Other than the preamble, the claims do not recite any particular link to a particular machine. Thus, the Board easily rejected the claim as reciting "no more than the abstract concept of issuing an abstract intangible asset. As in Bilski, a patent including these claims would allow the Appellant to pre-empt the use of this approach in all fields, and would effectively grant a monopoly over an abstract idea."

The Path Forward for Intervening Rights: Presaging the En Banc Decision in Marine Polymer v. Hemcon

Guest Post by Scott McKeown, Greg Gardella, and Lisa M. Mandrusiak all of OBLON, SPIVAK, MCCLELLAND, MAIER & NEUSTADT, L.L.P.[1]

The Court of Appeals for the Federal Circuit is currently considering en banc the panel decision in Marine Polymer Technologies, Inc. v. Hemcon, Inc. The panel decision can be interpreted as suggesting that intervening rights can arise from an argument made during a post grant patent proceeding, such as a patent reexamination proceeding,[2] even if the patent owner is merely urging a claim interpretation that is consistent with the manner in which the term would have been understood at the time the underlying patent application was filed. In cases where the post grant record simply clarifies the way in which a skilled artisan would have understood a claim term at the time of filing, or reiterates the positions of the previous intrinsic record, the scope of the claims cannot properly be said to have been altered during the subsequent proceeding.

Post grant PTO patent proceedings often focus on the meaning of different aspects of originally issued claim language than were considered during the earlier application prosecution. Therefore, much of the argument made by the patent owner during the subsequent PTO proceeding is directed to new issues not previously considered by the PTO. It is to be expected that re-opening the intrinsic record via post grant file histories will often include substantively new discussion of various claim terms.

For example, during post grant proceedings patent claims are accorded the broadest reasonable interpretation ("BRI"). Determining the BRI requires a different analysis than carried out in a district court during claim construction, and notably, there is no requirement that the PTO consider the earlier prosecution record in ascertaining the BRI and meaning of an originally issued patent claim. This often places patent owners in the position of having to re-argue distinctions which were implicitly or explicitly accepted by the previous patent examiner. When the PTO requires amendment of a claim in post grant proceedings the amendment may in fact be a simple restatement of previously agreed upon claim scope, which should not give rise to intervening rights.

The rule adopted by the Court should be flexible so as to accommodate the foregoing situations and permit intervening rights only in the appropriate circumstances. The application of argument-based intervening rights should be limited to situations in which the patent owner clearly and unambiguously revises the issued claim scope by urging that a limitation has a meaning that is plainly at odds with the interpretation a court would have given the originally issued claim language.

USPTO Proposed Budget Just Shy of $3B

President Obama has released his proposed FY2013 budget that would begin October 1, 2012. The budget proposes to provide the USPTO with full access to its fee collections at an estimated $2.95 billion ($250 million over FY2012 and more than $1 billion over 2009.  The revenue gives Director Dave Kappos the funds he has needed to hire examiners and BPAI judges and to revamp the USPTO's defunct IT system.  Lets see how it rolls.

By Dennis Crouch

This is fun – Managing IP just listed me on the shortlist for its IP Thought Leader award for 2012. [List] Others on the list include Eric Goldman, Mark Lemley, Daniel Ravicher, and Hal Wegner. I obviously don't deserve the award, but it is nice to be recognized in print. MIP is also awarding the top IP practitioner and top IP law firms in various categories.

CIPA Guide to the Patents Acts (UK & European Law)

by Dennis Crouch

I just received my new copy of the CIPA guide to the Patents Acts – Seventh Edition, published by Sweet & Maxwell in the UK. CIPA is the Charted Institute of Patent Attorneys and represents about 3,200 patent attorneys, trainees, and other UK intellectual property law professionals. The guide is edited by Paul Cole and Stephen Jones. The book – affectionately known as the "Black Book" – is actually black and has been in print continuously since 1980. Although the book focuses primarily on UK law, it is highly relevant to considerations of both European and American law. Both Lord Justice Jacob and Chief Judge Rader wrote forwards to the book. In his forward, Judge Rader remarked positively on the growing dialogue between US courts and those of Europe and Asia and noted that US patent courts should be prepared to understand and – at times – apply the law of other nations. Point being – this book is relevant to those in the US practice of patent law. Lord Justice Jacob wrote "I shall continue to keep the book within easy reach. So should anyone else concerned with European or British patents."

Parallel to Judge Rader's thoughts, in a working paper (not yet public) I argue that the America Invents Act further compels US courts to consider the law of other nations in order to implement the harmonization mandate found in the newly enacted legislation.

In his summary of the work, Paul Cole writes that this book is "intend to provide the most comprehensive single-volume reference work for patent law in the UK and under the EPC." The book references over 3300 decisions of the UK IP Office and courts and of the EPO Appeal Boards as well as all relevant statutes.

You can purchase the book for £250 (about $400) from the publisher. [LINK]

Congratulations and Cheers!

As an aside – I will be leading a CIPA short course this summer in London at Lord Jacob's home institution of the University College of London (UCL) Faculty of Laws. The course is primarily intended for UK and European patent law professionals and will focus on the new American law and how the changes will impact prosecution, litigation, and licensing of patent rights.

By Dennis Crouch

Astrazeneca v. Apotex, et. al (Fed. Cir. 2012)

Next year, I will be teaching the required first year course here at Mizzou titled Civil Procedure II. It would not be too difficult to almost fill an entire civil procedure casebook with patent cases.  In this decision, the court focused on the difference between dismissal for lack of subject matter jurisdiction and dismissal for failure to state a claim.

Here, the defendant generic pharmaceutical manufacturers filed an abbreviated new drug application (ANDA) with the Food & Drug Administration (FDA) requesting permission to begin selling a generic version of Astrazeneca's CRESTOR statin drug. The ANDA requested approval only for a limited set of drug uses. And, as it turns out, none of the applied-for uses are covered by the method patents listed in the Orange Book. (Astrazeneca has a composition patent that is being litigated in a separate lawsuit).

A generic ANDA must provide some indication as to why the generic application should be approved despite any patent rights held by the branded manufacturer. This explanation is typically identified as a Paragraph I, II, III, or IV certification.

• Paragraph I Certification indicates that the Orange Book lists no patents relevant to the ANDA.
• Paragraph II Certification indicates that the listed patents have expired.
• Paragraph III Certification indicates that the generic manufacturer will stay off market until the patents expire.
• Paragraph IV Certification indicates that the generic manufacturer believes that the listed patents are either invalid or would not be infringed by the generic compositions.

21 U.S.C. § 355(j)(2)(A)(vii)(I-IV). The generic ANDA may alternatively include a statement that excludes all uses claimed in any listed patents. 21 U.S.C. § 355(j)(2)(A)(viii). Here, the generic filers followed this alternative approach and explicitly excluded any and all uses of the compounds claimed in AZ's listed patents.

The patent statute creates a quirky cause of action for generic drug patent litigation. Rather than requiring a patentee to wait for infringement by manufacture or sale under 35 U.S.C. § 271(a), the law includes a shortcut under Section 271(e)(2) that creates a cause of action based simply on filing an ANDA for the purpose of gaining approval to manufacture or sell a generic version of a drug before the associated patent expires.

It shall be an act of infringement to submit—(A) an [ANDA] under [section 355(j)] for a drug claimed in a patent or the use of which is claimed in a patent … if the purpose of such submission is to obtain approval … to engage in the commercial manufacture, use, or sale of a drug … claimed in a patent or the use of which is claimed in a patent before the expiration of such patent.

35 U.S.C. § 271(e)(2). AZ seemingly agreed that the generic filing, by its terms did not seek approval for any use that would infringe AZ's patent claims. However, Astrazeneca sued the generic filers for infringement anyway. AZ's argument was - once approved - the drug would certainly be sold and used for infringing purposes and that the FDA will eventually require the generic filers to amend their ANDA to cover all approved uses of the drug. The district court rejected these claims and dismissed the case for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1).

On appeal, the federal circuit rejected that conclusion – holding instead that the court's subject matter jurisdiction persists because the complaint alleged infringement under the patent act. The court wrote "the requirements for jurisdiction in the district courts are met once a patent owner alleges that another's filing of an ANDA infringes its patents under §271(e)(2), and this threshold jurisdictional determination does not depend on the ultimate merits of the claims."

Although the court rejected the dismissal on Rule 12(b)(1), the court went on to affirm the judgment based on Rule 12(b)(6) – dismissal on the pleading for failure to state a viable claim. The rules of adjudging 12(b)(6) issues allow the court to consider whether it would be possible for the plaintiff to win based upon facts alleged in the pleadings. Here, the appellate panel held that the complaint failed because "an ANDA seeking to market a drug not covered by a composition patent for unpatented methods of treatment cannot infringe under § 271(e)(2)."

Dismissal Affirmed.