Patent Law Blog (Patently-O)

US Patent Office Wins Case Against The Invention Submission Corporation

Stephen Nipper of the Invent-Blog directs us to to an interesting case regarding the Invention Submission Corporation.

Invention Submission Corporation v. Dudas (4th Cir. 2005).

In 2002, the USPTO launched a media campaign to counter invention promotion scams that included customer testimony from a disgruntled Invention Submission Corporation customer.  Although the ads did not mention Invention Submission by name, a reporter was able to uncover the customer’s identity and report on the link.

Invention Submission Corporation then sued the PTO, alleging that the advertising campaign was directed at Invention Submission to “penalize it and ultimately to put it out of business.”

The district court dismissed Invention Submission’s claim because it was not a “final agency action” that would be reviewable under the APA.  On appeal for a second time on this issue, the Fourth Circuit agreed and affirmed the district court’s dismissal for lack of subject matter jurisdiction.

Links:

• Nipper’s Review of the Case.
• The 4th Circuit Opinion.  
• More Information on the Case (From Patently-O 2004).
• Nipper’s Warnings On Invention Promotion Companies.

Global argument in PTO response limits scope of all claims

SeaChange Int'l. v. C-Cor (Fed. Cir. 2005).

In another warning to attorneys, the CAFC has limited the term "network for data connection" to include point-to-point connections based on a patent applicant's response to a first office action.

Seachange sued C-Cor for infringement of its patent on a computer cluster for redundantly storing data. After claim construction in favor of Seachange, C-Cor stipulated to infringement and then lost invalidity issues at trial. 

On appeal, C-Cor argued that the lower court's improperly applied an ordinary meaning to claim terms whose scope had been disclaimed during prosecution. The CAFC agreed with C-Cor, finding that "Applicant's response to the First Action was a deliberate surrender of claim scope, unmistakable in its effect because it is not suitable to multiple interpretations."  Interestingly, the court rejected SeaChange's arguments to distinguish claim 1 that specifically called out the point-to-point system from claim 37 that did not do so -- finding that applicant's "global arguments" in the Office Action Response applied to all the claims.

As Professor Joseph Miller correctly states, this case also shows that the use of dictionaries “appears to be alive and well in Federal Circuit claim construction.  In this case, the court relied extensively on The New IEEE Standard Dictionary of Electrical and Electronics Terms.

CAFC appears to give implicit deference in claim construction.

Northpoint Technology v. MDS (Fed. Cir. 2005).

Northpoint owns patents covering a method of communication through geosynchronous DBS satellites and sued MDS for infringement.  A jury found infringement, but also concluded that the claims were invalid.  The court then denied motions for JMOL & a new trial.

The appeal centered around claim construction of the term “directional reception range.”  In a split decision, the majority panel (Bryson, Schall, JJ) implicitly gave deference to the district court’s construction.  Rather than construing the claims de novo, the majority simply relied on the district court’s broad interpretation of the term — finding that Northpoint’s argument was a “misinterpretation of the trial court’s construction.”  Under the broad construction, the patents Northpoint were clearly invalid as anticipated.

Dissenting in part, Judge Dyk argued that the majority’s claim construction was “plainly incorrect.”  Using an internal analysis of claim language and the “object of the invention,” Judge Dyke found that the disputed term should have been much more narrowly construed.

Links:

• File Attachment: Northpoint Decision.pdf (139 KB)

Grokster Loses at Supreme Court

MGM v. Grokster (2005).

by Cory Hojka

The Supreme Court, in a unanimous decision, has rejected the 9^th Circuit’s holding that secondary liability could not apply to a defendant who has no direct knowledge of, nor direct control over, acts of copyright infringement committed by users of the defendant’s file-sharing network. The 9^th Circuit’s error, according to Justice Souter’s majority opinion, was that such a ruling overextended the protection offered by the “substantial non-infringing” test in Sony Corp v. Universal Studios. Instead, the Court found that a device’s capability for lawful use is irrelevant to secondary liability when evidence shows that a party has promoted the usefulness of a product they distribute as a means to commit infringement. To support this conclusion for secondary liability, the Court explicitly incorporated into copyright law the inducement theory of liability from patent law:

[O]ne who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement of third parties.

In addition, the court addressed what evidence was sufficient to support intent toward inducement. First, it was compelling that both defendants had sought to satisfy a known source of demand for copyright infringement by pursuing former Napster users. Second, the Court focused on the defendants’ lack of attempts to discourage infringement by users of the file-sharing network. The Court though was careful to note in a footnote that such negative evidence alone is not sufficient, since that result would be contrary to Sony. Third, the Court held that the business models developed by the defendants lend support to a finding of intent, as their revenues were primarily dependent on the scale of infringement occurring on their networks.

 

Finally, in separate concurrences with equal support Justices Breyer and Ginsburg decided to duke it out over what are “substantial non-infringing” uses under Sony. Ginsburg argued that the burden of proof in Sony requires a showing of “substantial or commercially significant” non-infringing uses. To her, potential capability or future possible prospects of substantial non-infringing uses are insufficient. In contrast, Breyer contended that Grokster met the Sony standard based on the evidence provided and its potential for future non-infringing uses. Breyer concludes with an extensive argument that the overall harm to technological developments would outweigh the benefits to copyright holders if the Court were to move to a heightened standard in Sony.

Note: Cory Hojka is a law clerk at McDonnell Boehnen Hulbert & Berghoff LLP and a law student at the University of Chicago Law School in Hyde Park.

Decision:

• File Attachment: Grokster Decision.pdf (135 KB)

Links:

• Professor Eric Goldman’s Analysis (via InternetCases.com)
• Corante . . . Ernest
• Tech Law Advisor
• SCOTUSblog

Both Parties Lose Patent in Interference Proceeding

Gary Rasmusson v. SmithKline Beecham (Fed. Cir. 2005).

Finasteride, a 5aR inhibitor, is thought to be a useful drug in the fight against prostate cancer — as well as hair loss.  In 2001, the PTO declared an interference between an application by Rasmusson and one filed on behalf of SmithKline.  The dispute revolved around whether Rasmusson’ should be allowed to claim the beneficial filing date of its earlier applications — i.e., whether the early applications enabled the later drafted claims.

Relying on articles demonstrating that various multi-active 5aR inhibitors were effective in treating prostate cancer, Rasmusson argues that a person of ordinary skill in the art at the time of his applications would have believed that administering a therapeutically effective amount of finasteride could be used for treating human prostate cancer. For that reason, Rasmusson asserts that he did not need to provide any data to demonstrate the efficacy of finasteride.

Based on published articles and expert testimony, the CAFC agreed with the BPAI that the later drafted claims were not enabled: although it was known that 5aR inhibitors blocked DHT production, at that the time of filing, “it was not clear wither DHT or testosterone caused prostate cancer.” 

Rasmusson also argued that SmithKline’s patent claims were anticipated by a reference that disclosed the claimed method of administering finasteride. SmithKline, contended that the reference could not be anticipatory because is not enabling (since the reference purports to show data that finasteride could not be used to treat prostate cancer). Agreeing with Rasmusson, the CAFC found that “proof of efficacy is not required in order for a reference to be enabled for purposes of anticipation.”

In conclusion: Rasmusson loses interference to SmithKline, but SmithKline’s patent is anticipated.  Perhaps the parties should have settled. . . .

USPTO News: Electronic Submission of Chemical & Biological Structural Data

To underscore an earlier post, the USPTO is considering enacting a rule that would require Applicants to submit structural data on chemical compounds and biological molecules in electronic format.  The PTO believes that such a rule would aid in the processing and examination of patent applications that include structural data, and the submission of structural data to searchable public databases (upon application publication).

 

From a brief reading of the questions presented for comment (pp. 35575-77 in the Federal Register link below), the PTO appears undecided as to a number of issues, including:

- whether submission of any type of structural data would be required or optional;

- to which type of molecule(s) the new rules would apply (e.g., small inorganic/organic molecules, large biomolecules);

- whether the rules would apply only to new data, or also include compounds/data cited (prior art) in applications;

- whether the PTO would form partnerships with one or more third party database providers (share data upon publication);

- what format/software would become the standard for electronic submission of structural data.

The PTO has set a deadline of August 22, 2005 for comments to its questions. Comments to are preferably sent via e-mail to AB91.Comments@uspto.gov. Federal Register Link.

 

NOTE: This USPTO News Update was written by Christopher Singer.  Chris has a PhD in bio-inorganic chemistry from Northwestern University and is a patent attorney at MBHB.  He has also agreed to take a more active role in the blog and will be handling the bulk of USPTO News updates. [Singer Bio].

BlackBerry Patent Lawsuit Rises Again; NTP Responds to Patent Office Rejections

NTP v. Research-In-Motion (BlackBerry lawsuit).

In December 2004, the Federal Circuit released its opinion that pushed against the territorial bounds of patent law.  In that opinion, the CAFC found that U.S. patent law covers instances where infringing elements are located abroad — so long as the “control and beneficial use” of the infringing system is within U.S. territory.  Soon thereafter, RIM filed a motion for rehearing en banc that is still pending. 

The CAFC’s decision, strongly in favor of NTP, paved the way for a March 2005 “settlement” that reportedly included $450 million for NTP.  The original settlement announcement was based on a 1/2 page term-sheet reportedly signed by the parties.  As would be expected, 50 square inches of paper turned out to create a whole new level of disagreement between the parties who have been working through court mediation to flesh out the agreement.

Settlement Breakdown: In early June, the settlement issue came to a head and the parties staked out their positions on paper.  In a motion filed with the CAFC, RIM argues that the term-sheet was a settlement of the case, and, as such, the case is now moot.  RIM asked the CAFC to stay its decision on the for rehearing and remand the case to the district court to decide whether there has been a settlement.  On the other hand, NTP has argued that the term-sheet was not a settlement and that there was never a “meeting of the minds.”  The filed motions are attached below:

• RIM’s Motion to Stay Rehearing and Remand;
• NTP’s Response to RIM’s Motion;
• RIM’s Reply Brief.

Reexamination: In a parallel action, the patents at issue in the case (owned by NTP) are undergoing reexamination at the USPTO.  As occurs in almost all inter partes and director-ordered reexaminations, the patent office has issued a non-final rejection in each NTP case that it has examined.  Although this first rejection is a good sign for RIM, a final decision in the reexam will not be any time soon. (i.e., will not be for several years).  NTP has the opportunity to file a response to the non-final rejection.  The PTO may then issue a final rejection, at which point NTP may ask for reconsideration, appeal to the PTO’s internal board (BPAI), and then appeal to the federal courts (i.e., the courts that have already determined that the patents are valid).

This week, NTP filed its first response to a rejection in the reexamination for Patent No. 5,631,946. In the response, NTP made no amendments to existing claims, but did add over 100 new claims — including many multiple dependent claims.  The filed papers are attached below (THESE ARE BIG FILES):

• NTP’s Response to PTO’s Rejection;
• Declaration of Dr. Rhyne Accompanying Response;
• Declaration of William White Accompanying Response;
• Information Disclosure Statement Disclosing New Art Found by RIM.

Bottom Line: Unless the parties come to another settlement agreement, this case will continue for several more years.

GAO issues report on Patent Office

The Government Accounting Office (GAO) recently issued its 2005 report to Congress on the USPTO.  The report focuses the PTO’s progress with in its “Strategic Plan” framework.  The report’s bottom line is that the PTO has made great strides in enhancing technical capabilities of its examination corps.  However, the Office is finding it difficult to attract and retain qualified examiners.  Among problems cited by the report is a lack of a “collaborative culture” and an employee reward system that is based on outdated information.

Read the Report.

Case on Obviousness Jurisprudence Gains Support -- Microsoft Files Amicus Brief

KSR International v. Teleflex (On Petition for Certiorari)

Strong support is beginning to mount for a small case that may have major consequences on the patent law landscape.

In a petition for a writ of certiorari, KSR has asked the Supreme Court to review the “teaching-suggestion-motivation test” for obviousness that has been a stalwart of Federal Circuit jurisprudence for twenty years.  During that time, the Supreme Court has not heard a single obviousness case.  Noted law professor John Duffy is on the KSR brief, which argues that the CAFC’s obviousness test goes against Supreme Court precedent, against precedent of other circuits, and is bad policy.

Now, A consortium of five major corporations, including Microsoft, Cisco, and Hallmark have filed as amicus supporting the petition.  Their brief argues that the current structured test for obviousness is too easy a hurdle for patentees and that the formalities of the test undermines courts ability to truly determine whether an invention is obvious to one skilled in the art.

In addition, Teleflex has filed its opposition to the petition — arguing that (1) obviousness is well settled law and need not be revisited; (2) the CAFC’s test is consistent with Graham; and perhaps most importantly (3) this case does not hinge on the obviousness issue.

Documents:

• Party Briefs
• KSR’s Petition for Cert (Including the CAFC and District Court decisions in Appx A & B);
• Teleflex’s Brief in Opposition
• KSR Reply Brief (314 KB)
• Amicus Briefs
• 24 Law Professors in support of petition;
• Progress Freedom Foundation in support of petition;
• Microsoft, Cisco, Hallmark, et al. in support of petition.

Links:

• Patently-O Prior Discussion of the CAFC decision;
• Patently-O Prior Discussion of Law Professors Brief.

Prima Tek II v. Polypap

Prima Tek II v. Polypap (Fed. Cir. 2005).

Prima Tek and Polypap both sell disposable devices for holding flowers.  Prima sued Polypap for infringement of two of its related patents.

After first construing the claims, the Southern District of Illinois court granted summary judgment of non-infringement to Polypap.  That decision was reversed in 2003 based on an error in claim construction.

On remand, and after a bench trial, the district court found the patents not invalid and infringed and thus issued an injunction against Polypap.  Now Polypap appeals the new claim construction.  And, the CAFC has reversed once again, finding that the district court erred by adding a limitation to the term “floral holding material" that deviated from the term’s ordinary meaning.

Based on the new construction, the CAFC determined that the claims were anticipated based on a piece of prior art considered during prosecution — thus deciding the case.

In a seeming jab at the Patent Office, the majority noted that the whole patent system “depends primarily on the Patent and Trademark Office’s ("PTO’s") care in screening out invalid patents during prosecution.” In this case, the court found that the PTO had not lived up to its gatekeeper role.

CAFC Finds Jurisdiction To Hear Declaratory Judgment Issues After Patentee Files Covenant Not To Sue

Fort James Corp. v. Solo Cup (Fed. Cir. 2005).

Fort James sued Solo for infringement of its patents on paper plates. After a trial, the jury found that the patents were not invalid but were likewise not infringed.  Solo then sought attorney’s fees and a counterclaim of unenforceability.  The district court, however, dismissed Solo’s counterclaim as moot after Fort James submitted a covenant not to sue on the patents at issue. Solo appealed that ruling.

On appeal, the CAFC reversed — finding that the “district court’s literal application” of CAFC precedent was improper.

The district court erred as a matter of law in holding that it did not have jurisdiction to hear Solo Cup's counterclaim. The case is remanded for resolution of the issues properly before the court prior to its order to bifurcate, namely Solo Cup's claims of unenforceability on the basis of inequitable conduct and its request for attorney fees pursuant to 35 U.S.C. § 285.

Citing the recent Teva v. Pfizer case, Judge Schall argued in dissent that “Fort James’s covenant not to sue eliminated any live case or controversy between the parties and thereby rendered Solo Cup’s unenforceability counterclaim moot.”

Patently-O Patent Law Blog wins TechnoLawyer Award as Best Practice Area Blog

I am happy to announce that Patently-O was awarded the TechnoLawyer @ Award as the Favorite Practice Area Blog for 2005.  This award means a lot to me because it was Patently-O readers who made it happen.  I would like to personally thank everyone who took time to vote. (Drop me a line and I’ll take you out to coffee).

Runners-up in the category include Sabrina Pacifici excellent law & technology blog beSpacific and Broc Romanek’s corporate & securities law blog at TheCorporateCounsel.net.  Fellow Chicagoan Bryan Sims of James, Gustafson and Thompson was named “Technolawyer of the year.”

USPTO Loosens Amendment Procedures

Over the past year, the USPTO has been a stickler for proper amendment practice.  However, the Office has now waived certain requirements of 37 CFR 1.121(c) and may accept non-compliant amendments under 37 CFR 1.121(c) where the non-compliance is limited to:

 

    1) The inclusion of text of a canceled claim, or a not entered claim, and

    2) Use of certain variations of status identifiers in a claim listing.

 

 

Reasons for the waiver: Although the revised amendment practice has been in effect for over 18 months, the Office is apparently still receiving a large number of non-compliant amendments. Correction of the non-compliant items causes extra work for applicants, examiners and the Office’s Technical Support Staff, delays prosecution and increases pendency of applications. Upon review, the Office determined that some of the requirements of 37 CFR 1.121 are not essential and that waiver of certain provisions of 37 CFR 1.121 will still allow an examiner to clearly understand exactly what amendments have been made in an Image File Wrapper application. The Office will propose changes to 37 CFR 1.121 consistent with this notice in a rule making in due course.

• Link

USPTO News: New Rules for Fee Refunds and Electronic Submissions

Rule Change for Refund of National Stage Search Fee: The Office will now refund all or a portion of the search fee associated with a national stage application based on a PCT under certain circumstances (such as filing the search from the International Searching Authority). Link.

Proposed Refund of Search Fees for Expressly Abandoned Applications: The PTO is considering amending its rules to allow a refund of the search fee for Expressly Abandoned applications that have not yet been taken-up for examination. Comments are requested to AB79.Comments@uspto.gov.  Link.

Proposed Changes on Electronic Submission of Chem/Bio Data: The PTO is considering amending its rules to require submission of chemical and 3–D biologic structural data in electronic format.  Comments are requested to AB91.Comments@uspto.gov. Link.

Who's Your Inventor?: Contradictory Declarations Leads to Summary Judgment Reversal

Checkpoint Systems v. All-Tag Security  (Fed. Cir. 2005).

by Marcus Thymian.

Checkpoint asserted its patent on disposable, deactivatable security labels against All-Tag and Sensormatic, a customer of All-Tag.  The district court granted summary judgment of invalidity to All-Tag and Sensormatic under 35 U.S.C.  § 102(f) for failing to name an inventor.  In support of its motion for summary judgment, All-Tag had submitted recent declarations of three people, including the named inventor and the supposed omitted inventor, stating that the sole named inventor was one of two actual inventors.

The Federal Circuit reversed and remanded, agreeing with Checkpoint that earlier declarations by the same three people, made during prosecution, contradicted the more recent declaration, thus creating a "clear" genuine issue of material fact on the issue of inventorship.

The Court frames several issues that are potentially more interesting than the main inventorship issue, but declines to rule on those issues, given its reversal.  These issues include:  (1) applicability of the doctrine of assignor estoppel to a party that is merely in privity with the assignor; (2) applicability of the corroboration rule to testimony by inventors/assignors challenging validity; and (3) whether 35 U.S.C. § 256 (allowing the patent office to correct inventorship upon application of the parties/assignees) could be used to correct inventorship, if it were found to be incorrect in this case.

Marcus Thymian is a partner at McDonnell Boehnen Hulbert & Berghoff LLP in Chicago.  Concentrating primarily on the electrical, software, and mechanical arts, he is experienced in planning, creating, enforcing, and defending against patent portfolios. [Marcus Thymian's Bio]

[Copyright 2005 – Originally published at www.patentlyo.com]

Supreme Court to Reexamine the Interplay Between Patents and Unlawful Tying Agreements

The Supreme Court has decided today to hear Illinois Tool Works v. Independent Ink (04-1329). 

In this case, the Court of Appeals for the Federal Circuit determined that a rebuttable presumption of market power sufficient to restrain trade under antitrust law arises from the patentee’s possession of a patent used in an explicit tying agreement.

The suit involves an ink jet device patented by Trident, a subsidiary of Illinois Tool Works.  Independent Ink manufactures unpatented ink that is usable in Trident’s patented device.  However, Trident’s license/purchase agreements require use of Trident’s ink under certain circumstances.

Independent Ink sued alleging an illegal tying arrangement in violation of Section 1 of the Sherman Act.  The district court dismissed the claim on summary judgment, but the CAFC reversed — ordering the lower court to presume market power based on the patent tying agreement.

In its opinion, the CAFC admonished the district court for not following clearly established Supreme Court precedent and for dismissing the High Court's holdings as “vintage.”  The appellate panel noted that, although it may be time to abandon the doctrine, it is up to the Supreme Court or Congress to expressly overrule its own precedent -- this prerogative does not lie with the district courts.  The High Court is expected to hear the case next fall.

Amicus briefs in the petition were filed by the AIPLA, ABA, Pfizer, and the IPO.

Link:

• CAFC Opinion
• Patently-O’s report on the CAFC decision
• SCOTUS Blog
• Ernest Miller’s Review

Will US Courts Adjudicate Foreign Patents or Will Comity Prevail?

Voda v. Cordis Corp. (Fed. Cir. 2005)

The past year has seen an expansion of the reach of U.S. patent laws based on the Federal Circuit’s decisions in Eolas v. Microsoft and RIM v. NTP. A third case in the pipeline is now ready to burst at the seams.

In August 2004, an Oklahoma district court granted Dr. Jan Voda’s motion to amend the complaint to add claims of infringement of five foreign patents. In February, the CAFC granted an interlocutory appeal request, which will likely be heard this fall.

Dr. Voda is a cardiologist in Oklahoma City who has patented a number of catheters and other medical devices used in the practice of medicine. Voda has alleged that Cordis has infringed patents both on U.S. soil and abroad. In order to save resources and establish a uniform judgment, Voda has asked, and the court has granted, permission to consolidate the world-wide patent issues into a single case.

In an impressive brief, Cordis argues forcefully that the supplemental jurisdiction statute (28 USC 1637) does not apply to foreign patent claims.

Two major IP organizations (AIPLA & IPO) have recently filed amicus briefs asking the CAFC to reverse the lower court’s decision — essentially arguing that “comity” should rule. Of course, the CAFC only months ago rejected comity arguments in both Eolas and RIM. Noted commentator and professor Hal Wegner has listed Voda atop his “Top Ten Pending Patent Cases.”

 

Links:

• File Attachment: Cordis Corp brief.pdf (2485 KB) 
• File Attachment: VODA BRIEF GOVT.pdf (733 KB)
• File Attachment: FCBA Brief.pdf (645 KB);
• AIPLA BRIEF;
• IPO BRIEF;
• RIM & Eolas.

"Optional" disclosure in prior art reference overcomes negative claim limitation.

Upsher-Smith Labs. v. Pamlab (Fed. Cir. 2005).

Upsher-Smith asserted to patents against Pamlab.  The patents cover a vitamin supplement consisting of vitamin B12 and other active components.  The claims also provide a negative limitation that the supplement is “essentially free of antioxidants.”

The district court dismissed the suit — finding the patents anticipated and obvious based on prior art that disclosed the identical compounds but that “optionally includes” antioxidants.

On appeal, the CAFC affirmed — finding that the optional inclusion of the antioxidants teach “vitamin supplements that both do and do not contain antioxidants. . . . Consequently, Pamlab presented a prima facie case of anticipation.” 

 

On Remand: Knorr-Bremse District Court Finds Willfulness Even Without Adverse Inference Rule

Knorr-Bremse v. Dana Corp. (E.D. Va. 2005).

In a 2004 landmark decision, an en banc panel of Federal Circuit judges found that “no adverse inference that an opinion of counsel was or would have been unfavorable flows from an alleged infringer's failure to obtain or produce an exculpatory opinion of counsel.”Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., et al., 383 F.3d 1337 (Fed. Cir. 2004).  Because the adverse inference comprised a portion of the district court’s decision, the CAFC vacated the original finding.

On remand, Judge T.S. Ellis, III in the Eastern District of Virginia took a new look at the issues of treble damages for willful infringement and attorney’s fees under the “exceptional case” standard.  In doing so, the court found that even absent the prohibited adverse inference, there were sufficient factors supporting the finding of willful inference.

[T]he totality of the circumstances presented here — and wholly without the now-proscribed adverse inference — still compels the conclusion that defendants’ use of the Mark II air disk brake, and indeed their continued use of the Mark II air disk brake throughout the instant litigation, amounted to willful infringement of the ‘445 patent.

Regarding attorney fees, the court noted that “an award of attorney’s feed does not automatically follow from a finding of willful infringement.”  In this case, the court determined that Knorr had “failed to establish by clear and convincing evidence that defendants engaged in any bad faith litigation or inequitable conduct” and the defendant’s willful infringement was “not so egregious . . . as to justify an award of attorney’s fees.”

“Means-plus-function” Claim Indefinite For Lack Of Corresponding Structure

Default Proof Credit Card System v. Home Depot (Fed. Cir. 2005).

By Richard Machonkin

Default Proof sued Home Depot, and other defendants, claiming that the defendants’ gift cards infringed a patent directed to a system for dispensing and validating prepaid debit and credit cards. The district court held on summary judgment that claim 1 was indefinite and, therefore, invalid, because the specification did not disclose any structure corresponding to the limitation “means for dispensing at least one debit card for each transaction.” The Federal Circuit affirmed.

The Federal Circuit explained that in order for a means-plus-limitation to meet the definiteness requirement of § 112, there must be structure disclosed in the specification that is “clearly linked to and capable of performing the function claimed by the means-plus-function limitation.” The Federal Circuit concluded that the specification did not disclose any such structure. A point-of-sale (POS) terminal disclosed in the specification did not constitute corresponding structure because the specification did not clearly link the POS terminal, or any part of it, to the function of dispensing debit cards, nor did the specification describe any parts of the POS terminal capable of dispensing debit cards.

Testimony from Default Proof’s witness that the POS terminal included structures corresponding to the “means for dispensing” was unavailing. A patent specification need not disclose details of structures well known in the art, but must nonetheless disclose some structure. Thus, when a specification discloses some corresponding structure, expert testimony can be used to elaborate on the disclosure. In this case, however, the specification did not disclose any structure capable of dispensing debit cards. The testimony of Default Proof’s witness could not make up for the total absence of such structure from the specification.

NOTE: Richard Machonkin is a partner at McDonnell Boehnen Hulbert & Berghoff LLP.  Rick has litigated patent and trademark cases in federal courts and before the International Trade Commission and the Trademark Trial and Appeal Board.  He has also prosecuted patent applications and rendered opinions on issued patents in a variety of technologies. [Brief Bio]

Links

• File Attachment: Home Depot Opinion.pdf (177 KB)

CAFC: Patent Laws Preempt Unjust Enrichment Claim

Ultra-Precision Manufacturing v. Ford Motor Co. (Fed. Cir. 2005).

Ultra disclosed an engineering design to Ford without any confidentiality agreement.  Ford later began selling a product that allegedly included the design. Ultra then sued for unjust enrichment — arguing that Ford owed a portion of the savings accrued through using the product.

The CAFC affirmed the district court’s dismissal of the claim, holding that the claim was preempted by the patent statute:

Ultra-Precision seeks a patent-like remedy for Ford’s conduct in making, using, and selling products embodying information Ultra-Precision was not successful in protecting under the federal patent laws and which is free for all the world to enjoy. In the absence of an incremental benefit conferred, any attempt to obtain a patent-like royalty for the making, using, or selling of a product in the public domain under the rubric of state unjust enrichment law is preempted.

 The appellate panel drew a line between contract claims and unjust enrichment claims — finding that states had a right to enforce contracts, but that unjust infringement “has the potential to take aim at the federal scheme.”

 File Attachment: Ultra-Precision v. Ford.pdf (173 KB).

SmithKline Beecham v. Apotex: A Conclusion?

SmithKline Beecham Corp. (SKB) v. Apotex Corp. (Fed. Cir. 2005).

Case History:

• 2003.03.03 Judge Richard Posner, sitting by designation, found the patent valid but either (i) not infringed or (ii) if infringed, the infringement excused under Posner’s newly created equitable defense.
• 2004.04.23 CAFC (RADER, J.) affirms, but on other grounds — finding that the drug (PHC hemihydrate) had been in public use during clinical trials.  Specifically, the court found that the clinical trials tested only the safety and efficacy of PHC hemihydrate as an anti-depressant and did not qualify as an experimental use. In concurrence Judge Gajarsa derided the Majority's approach, saying that it has created "unfortunate precedent that will complicate future considerations of the experimental use doctrine."
• 2005.04.08 Without opinion, en banc CAFC vacates the experimental use portion of the original panel decision.  Judge Newman’s dissent from the order declining to hear the case en banc was essentially a written as a dissent from the new panel decision issued the same day.
• 2005.04.08 The original CAFC panel issues a new opinion dropping the experimental use issue and basing the decision on “inherent anticipation.”
• 2005.06.15 CAFC denies a petition for an en banc rehearing of the new panel decision, but does not issue any opinion.

Links:

File Attachment: SKB Apotex en banc order (49 KB)

File Attachment: SKB Apotex Panel Decision (230 KB)

SKB Apotex Original Panel Decision (From Georgetown Law Center)

File Attachment: SKB Apotex District Court.pdf (2443 KB)

Discussion of the original panel opinion: Part I, Part II, Part III, and part IV.

Discussion of the en banc order and new appellate opinion: Part V, Part VI.

Howard Bashman provides an excellent commentary on the case via one of his readers.

Branding-Energy of the Volkswagen Beetle

I have been planning a post about U.S. published application No. 2005–0055221 for ages, but I just could not find any words to describe my emotions.

The abstract reads:

A branding-energy amplifier for amplifying the branding-energy of the Volkswagen Beetle. Branding-Energy Amplifier established upon the principle of Node Plurality.

As explained in the specification:

If you were to see a singular Marilyn Monroe walking down the street, you probably would notice.  If, however, you were to see 88 Identical Marilyn Monroes's single filing fashionably in parade-dress parade, you would likely stop whatever you were doing and stare in exasperated amazement wondering all the while what in the world was going on. . . . By extension then, a Volkswagen beetle limousine with 88 humps, does not look the same, does not function the same, and is, in fact, not the same, as a Volkswagen beetle with 1 hump because they do not share identical Automotive DNA.

View the patent: DOWNLOAD.  The warp-drive has nothing on this one.

Seed License Agreement Does Not Implicate Plant Variety Protection Act

Showmaker v. Advanta USA (Fed. Cir. 2005)

By Alison Baldwin

Illinois farmer, Edward Showmaker, filed suit against Advanta USA, claiming that the language of the shrinkwrap license agreement on Advanta's soybean seed violated the misbranding provision of the Plant Variety Protection Act (PVPA). The Advanta's Garst Brand Seed D445N, Variety 57004 purchased by Mr.. Showmaker was neither patented or PVPA certified. However, the agreement on each of Advanta's bags stated:

"The soybean seed in this bag contains genetics developed, licensed or owned by Seller. All rights to make, produce or sell seed products derived from this seed reside solely with Seller. Buyer acknowledges this ownership and agrees to the following conditions: … Buyer will not resell or supply any of this seed to any other person or entity. Furthermore, Buyer is strictly prohibited from saving or selling, for seed purposes, any gain products from this seed. Buyer further agrees not to alter, or permit the alteration of the seed … through either genetic engineering, conventional breeding activities or other techniques."

The United States District Court for the Southern District of Illinois dismissed the case for failure to state a claim upon which relief can be granted because the contractual language in the Agreement did not implicate the PVPA's misbranding provisions. The Federal Circuit affirmed because Advanta's shrinkwrap license did not specifically reference the PVPA, any issued PVPA certificates or any pending PVPA applications. Furthermore, Advanta's shrinkwrap license did not use the terms "Unauthorized Propagation Prohibited" or "Unauthorized Seed Multiplication Prohibited," which are specifically set forth in PVPA Section 2568(a)(3). The Court stated that Advanta's contract language did not put the potential purchaser or the public on notice of a plant variety owner's rights, it merely restricted some activities of the buyer.

NOTE: Alison Baldwin is a partner at McDonnell Boehnen Hulbert & Berghoff LLP in Chicago.  Her patent litigation experience has covered a diverse range of topics, from recombinant DNA technology to digital television. In addition to her law degree, Ms. Baldwin holds degrees in biochemistry and plant pathology and has conducted research on the molecular mechanisms involved in plant disease resistance. [Brief Biography].

PTO Board: Disclosure of Sequence Enables at least 5% of Natural Variance.

Ex parte Bandman, No. 2004-2319, (BPAI 2005)

By Donald Zuhn

In an appeal from a final rejection, the PTO Board reversed rejections based on both the written description and enablement requirements of 35 U.S.C. § 112, first paragraph, and entered a new ground of rejection under 35 U.S.C. § 112, second paragraph one of the claims. (U.S. Application No. 09/915,694). 

Pointedly, the Board found that claims directed to a naturally occurring amino acid (or polynucleotide) sequence at least 95% identical to the disclosed amino acid (or polynucleotide) sequence were enabled and met the written description requirement.

Merck v. Integra: Supreme Court Reverses, Broadens Statutory Experimental Use Safe Harbor

Merck v. Integra, 545 U. S. ___  (2005).

In a unanimous decision, the Supreme Court has set aside the Federal Circuit’s holding that narrowly interpreted the statutory safe harbor of §271(e)(1). Writing for the Court, Justice Scalia found that:

"As an initial matter, we think it apparent from the statutory text that §271(e)(1)'s exemption from infringement extends to all uses of patented inventions that are reasonably related to the development and submission of any information under the FDCA." (emphasis in original).

This includes:

• Clinical and Preclinical studies of patented compounds that are appropriate for submission to the FDA;
• Studies intended to generate pharmacological, toxicological, pharmacokinetic, and biological qualities of the drug in animals;
• Studies intended to generate information regarding a “risk-benefit assessment of the appropriateness of [a proposed clinical] trial.”; and
• Safety related tests even if not compliant with FDA regulations.

The court recognized that “scientific testing is a process of trial and error.”  As such, 271(e)(1) must also protect research for which an IND is not ultimately filed.

Congress did not limit §271(e)(1).s safe harbor to the development of information for inclusion in a submission to the FDA; nor did it create an exemption applicable only to the research relevant to filing an ANDA for approval of a generic drug. Rather, it exempted from infringement all uses of patented compounds reasonably related to the process of developing information for submission under any federal law regulating the manufacture, use, or distribution of drugs.

Patent Attorney Jason Rantanen points out that the court declined to address two big questions:

The common law experimental use exception and the effect of 271(e)(1) on "research tools."  The latter issue the Court explicitly declined to address, noting in a footnote that it was not expressing a view about whether 271(e)(1) exempts from infringement the use of "research tools" in the development of information for the regulatory process.

Of course, any future case involving research tools will cite Merck v. Integra as persuasive authority of the proposition that 271(e)(1) covers those as well.  Rather than settling the law, the Court appears to have created an unfortunate uncertainty regarding the value of patents covering research tools.

Case vacated and remanded to determine whether Integra can prove its case under the Court’s new interpretation of the law.

Links:

• File Attachment: Merck v. Integra.pdf (103 KB) (The opinion is only 15 pages and easy to read).
• Background

Janssen Pharmaceutica v. Eon Labs

Janssen Pharmaceutica v. Eon Labs (Fed. Cir. 2005).

Eon filed an ANDA seeking approval to make a generic version of Sporanox® (itraconazole) — an antifungal used to treat toenail fungus.  Janssen brought suit — asserting that Eon’s ANDA infringed Janssen’s patent. (U.S. Patent No. 5,633,015).

After a bench trial, the district court found that a claimed parameter of “about 600 to about 700 µm” should be as measured at the time of manufacture. Based on that finding, the Court determined that Eon did not infringe.

On appeal, the CAFC affirmed, finding that the lower court had correctly defined the terms according to their ordinary meaning and that Eon’s ANDA does not include the same size limitation (no infringement).

Affirmed.

Patent Reform: Redlined Version of Patent Statute

Shashank Upadhye of Eon Labs & I have created a marked-up version of the Patent Act showing changes that would be implemented if the Act was enacted into law.  This document is very useful to help better understand what changes are being made and what sections are left unchanged.

• Download Redlined Patent Act of 2005.doc (NOTE: In this version, we do not include sections that were not changed.  Full version of the Patent Act to follow). [Last updated June 21, 2005]

CAFC: Distinguishing Feature of Invention Reflected in Claim Construction

Boss Control v. Bombardier and Sports Cars, Inc. (Fed. Cir. 2005).

In a dispute over a power interrupter, the CAFC affirmed a summary judgment of noninfringement, finding that the patentee had given a special limiting definition to a disputed claim term during prosecution.

Specifically, the court looked to how the patentee had distinguished the invention from prior art and incorporated that distinguishing feature into the claim language.

File Attachment: Boss Control.pdf (56 KB)

 

CAFC: Jury's conclusions on obviousness reviewed de novo.

Princeton Biochemicals v. Beckman Coulter (Fed. Cir. 2005).

Princeton owns a patent on a capillary electrophoresis device and sued Beckman for infringement.  A jury decided in favor of Princeton on all issues including infringement and nonobviousness.  However, in a post-trial judgment, the district court issued a JMOL setting aside the jury verdict — instead finding all counts in favor of Beckman.

Princeton appealed.

According to the CAFC, a jury’s “conclusions on obviousness” are a question of law — reviewed without deference.  The underlying findings of fact are reviewed for substantial evidence.

The legal conclusion, that a claim is obvious within § 103(a), depends on at least four underlying factual issues: (1) the scope and content of the prior art; (2) differences between the prior art and the claims at issue; (3) the level of ordinary skill in the pertinent art; and (4) evaluation of any relevant secondary considerations. Graham v. John Deere.

In this case, the CAFC agreed with the district court, that there was not substantial evidence to support the jury verdict.

JMOL of obviousness affirmed.

Patent Reform: Patent Act of 2005

On Wednesday, June 8, 2005, Congressman Lamar Smith (R-TX) introduced the Patent Reform Act of 2005. (H.R. 2795). This proposed legislation includes sweeping reforms to fundamental aspects of the U.S. patent laws and procedures, including:

• Change to a first-to-file system (including elimination of the 1-year grace period for certain third party public disclosure);
• Elimination of the best mode requirement;
• Changes to the duty of candor (violations will be adjudged by the PTO rather than in Federal Court);
• Damages to be limited to the inventive contribution rather than calculated on the selling price of an entire product;
• Limitations on damages for willfulness;
• Adding a factor of "fairness"to the determination of whether to enter an injunction;
• Automatic stay of injunctions for appeals;
• Limits on scope of continuation applications (to be made by PTO); and
• Introduction of a post-grant opposition procedure and submission of prior art by third parties, etc.

Although some of the provisions in the proposed legislation are toned-down from the discussion draft distributed this spring, this version still has something to offend almost every interest. Congressman Smith has called the bill "without question, the most comprehensive change to U.S. patent law since Congress passed the 1952 Patent Act.”

 

The reform is currently enjoying bipartisan support — The nine cosponsors include five Democrats.

Rep Berman, Howard L. [CA-28] - 6/8/2005

Rep Boucher, Rick [VA-9] - 6/8/2005

Rep Cannon, Chris [UT-3] - 6/8/2005

Rep Coble, Howard [NC-6] - 6/8/2005

Rep Conyers, John, Jr. [MI-14] - 6/8/2005

Rep Goodlatte, Bob [VA-6] - 6/8/2005
Rep Issa, Darrell E. [CA-49] - 6/8/2005

Rep Lofgren, Zoe [CA-16] - 6/8/2005
Rep Schiff, Adam B. [CA-29] - 6/8/2005

Resources:

• Proposed Legislation
• Buchanan’s Patent Reform Library
• Story by Declan McCullagh at CNET News
• Red Herring Article

Pain for Purdue Pharma: CAFC affirms inequitable conduct finding

Purdue Pharma L.P. v. Endo Pharms. Inc. (Fed. Cir. 2005).

by Marcus Thymian

The Federal Circuit affirmed a finding by the District Court for the Southern District of New York that Purdue's Oxycontin patents-in-suit are unenforceable due to inequitable conduct that occurred during prosecution of the patents.  The decision, if it withstands further appeal efforts, would open the door to generic equivalents of Purdue's popular controlled-release pain treatment medication.  According to various news stories on the Federal Circuit ruling, Purdue has indicated it plans to request en banc review of the 3-judge panel decision by the full 12-judge Federal Circuit. 

The inequitable conduct determination was based primarily on variations of the following Purdue statement:

It has now been surprising discovered that the presently claimed controlled release oxycodone formulations acceptably control pain over a substantially narrower, approximately four-fold [range] (10 to 40 mg every 12 hours -- around the clock dosing) in approximately 90% of patients.  This is in sharp contrast to the approximately eight-fold range required for approximately 90% of patients for opioid analgesics in general.

The district court found that Purdue repeatedly referred to this "surprising discovery" during prosecution, but did not inform the PTO that the "discovery" was based on "insight" without "scientific proof."  The Federal Circuit decided that the district court did not error in finding the two elements of inequitable conduct: materiality and intent.

Materiality was based on the district court's examination of the entire record.   Purdue had repeatedly argued that the four-fold dosage range distinguished the invention over prior art, according to the district court.  The district court found that Purdue's use of language that "implied, if not suggested" experimental results, when in reality the "discovery" was based solely on inventor "insight," constituted withholding material information from the PTO.

Intent was inferred from the context in which Purdue's statements were made.  Purdue's "carefully chosen language suggests that it had obtained clinical results, and that suggestion was left unclarified by any disclosure that discovery of the four-fold dosage range for oxycodone was based on insight."  The Federal Circuit agreed that Purdue had engaged in a "clear pattern of misdirection throughout prosecution of Purdue's controlled release oxycodone patents."

This case is an interesting exercise in standards of review and burdens of proof and persuasion.  Inequitable conduct requires a showing by "clear and convincing evidence," which is quite high (patent infringement requires only a showing by a "preponderance of the evidence").  The Federal Circuit conducted a deferential review of the district court's inequitable conduct ruling.  This heightened standard involves reviewing the materiality and intent factual findings for "clear error" and reviewing the ultimate inequitable conduct conclusion for an "abuse of discretion."  So, while an initial inequitable conduct showing is a tough burden, if a district court's ruling is well supported, it may be relatively tough to overturn. 

Marcus Thymian is a partner at McDonnell Boehnen Hulbert & Berghoff LLP in Chicago.  Concentrating primarily on the electrical, software, and mechanical arts, he is experienced in planning, creating, enforcing, and defending against patent portfolios. [Marcus Thymian's Bio]

[Copyright 2005 – Originally published at www.patentlyo.com]

CAFC affirms evidentiary rulings: Inventor is not Expert

Air Turbine Technology v. Atlas COPCO (Fed. Cir. 2005).

Air Turbine (ATT) sued Atlas for infringement of its patent on pneumatic turbine pencil grinder as well as Lanham Act violations and for unfair competition under Florida law.  The district court dismissed the non-patent claims on summary judgment. At trial, however, the jury returned a verdict against ATT on patent infringement.

On appeal, ATT argued that the court should have granted a new trial on the patent infringement claim because of three “prejudicial evidentiary rulings.”  Specifically, ATT complained that (i) its infringement expert was prevented from fully testifying (about a matter not disclosed under FRCP 37(c)(1)); (ii) certain co-inventor testimony was excluded because the co-inventor was not considered an expert; and (iii) an Atlas employee located in Sweden was not properly produced via teleconference because the court believed it lacked jurisdiction to compel testimony.

Applying 11th Circuit precedent that evidentiary rulings are only reversed for clear abuse of discretion, the CAFC affirmed.  Finding that:

(i) A court may properly exclude expert testimony that is not disclosed in the expert report;

(ii) An inventor is not necessarily an expert — especially an expert on the accused device; and

(iii) Determining whether to allow testimony in open court via contemporaneous transmission from a different location is well within the discretion of the district court.

Non-infringement affirmed.

[Copyright 2005 Dennis D. Crouch – Originally published at www.patentlyo.com]

PTO Takes (Baby) Step to Further Limit Submarine Patents

The PTO has changed its “final action” practice for patent applications filed prior to June 8, 1995. 

New Rules: The next Office action following timely filing of a submission under 37 CFR 1.129(a) will be equivalent to the next Office action following a reply to a non-final Office action. (i.e., the action will be a “final.”)

This change is a further attempt to get rid of the remaining submarine patents.

Link: USPTO Notice

Hatch-Waxman 180-Day Exclusivity Does Not Restrict NDA-Holder's Ability to Sell Generic Version of Patented Drug

Teva Pharmaceuticals v. Crawford (FDA), No. 05–5004, (D.C. Cir. 2005).

As the first ANDA filers on a generic version of gabapentin (Neurontin), Purepac & Teva (joint agreement) were eligible for a 180–day exclusivity period during which no other ANDA for the same drug may be approved.

However, Teva also sued to stop the patentee Pfizer from selling a generic version of its name brand Neurontin during the 180 day period of exclusivity.  After losing at the district court level, Teva appealed to the D.C. Circuit, arguing for a “functional” interpretation of the statute (21 USC 355(f)(5)(B)(iv)).

Teva argued that the purpose of the statute was to grant the first ANDA filer complete generic exclusivity for 180 days, and that allowing the patentee to sell the generic would “defeat the statutory purpose.”

Writing for the panel, Chief Judge Ginsberg affirmed the lower court’s judgment. 

[A]s Teva’s counsel conceded at oral argument, prior to the Hatch-Waxman Amendments, nothing in the Act prohibited the holder of an approved NDA from marketing a "brand-generic" version of its drug; thus Teva asks the court to declare that a previously lawful practice became unlawful when the Congress passed a statute that said nothing about that practice.

Thus, the court affirmed that the exclusivity provision “clearly does not prohibit the holder of an approved NDA from marketing, during the 180–day exclusivity period, its own ‘brand-generic’ version of its drug.”

Links:

• File Attachment: Teva v. FDA.pdf (29 KB)
• FDA Guidance on the 180–day period of exclusivity

Does the First Sale Doctrine Apply to Digital Music?

The Berkeley IP weblog has an interesting post regarding the the “first sale doctrine” and its application to music downloads. The controversy is whether Warner Music Group (WMG) content downloaded through Rhapsody/iTunes is licensed or purchased. 

Tom Waits’ contract with WMG entitled him to a high royalty for third-party licenses but a lower royalty for the sale of copies.  In a case filed last week, by Waits’ former production company, WMG is likely to take the position that its downloads are sold just like physical products — thus resulting in a lower royalty. Of course, WMG’s expected argument flies in the face of the “terms of service” agreed to by users to any of the popular mp3 download sites.

All of this begs the question of whether associating the sale of mp3 files with the sale of physical CD’s gives purchasers the right to resell under the first sale doctrine. (The U.S. Gov’t thinks not.)

Links:

• Link: Reuters Article
• Link: Duke Law & Technology iBrief on First Sale
• Link: EBay restrictions on resale of digital music

USPTO Restriction Practice Proposal

The Patent Office is in the midst of reworking its restriction practice.  In a recently published “green paper,” the Office has proposed four “options” and requested public comment. The PTO ranked the options according to its preferences.

Option I: Maintain current restriction standards but permit applicants to pay for concurrent examination of additional inventions.

Option II: Modify the “unity of invention” standard to require any (unclaimed) “common feature” between inventions comply with the patentability requirements.  Applicants would be given the option of concurrent examination of additional inventions for a fee.

Option III: A three-tiered fee structure depending on whether multiple inventions are “substantially similar,” “related,” or “unrelated.”

Option IV: Allow a restriction only when the claimed inventions are “independent and distinct.”

Links:

• Read the Green Paper on Restrictions

• Comments addressed to unity.comments@uspto.gov by August 5, 2005.

Next Steps in Patent Reform

Patent reform is expected to be taken to a new level this week with two events.

• A version of the patent reform committee draft is expected to be introduced in the House of Representatives — perhaps as early as Tuesday, June 7, 2005. The House subcommittee on the Courts and Intellectual Property is scheduled to hold a hearing on the legislation on June 9, 2005.
• Also on June 9, 2005, the NAS and AIPLA are hosting a wrap-up conference on patent reform in DC.  (Conference schedule). 

Matthew Buchanan has created the Patent Reform Library to serve as a repository of available material on patent reform including legislative material, articles, and background information. Bookmark it.

Samples not warranted to ensure injunction compliance.

Kemin Foods v. Pigmentos (S.D. Iowa 2005).

In a battle over Kemin’s patented form of purified lutein a jury that Pigmentos had infringed one of Kemin’s patents. (Lutein is a color additive with no vitamin A activity).

A jury found for Kemin on one patent.  In addition to requesting a permanent injunction, Kemin also asked for the court to order the defendant to provide representative samples of its products to ensure compliance with the injunction.

In considering this motion, the district court found that that it had the power to “fashion an appropriate remedy” to ensure that the injunction would be enforceable.  However, the injunction should not be“a sword for wounding a former infringer who has made a good-faith effort to modify a previously adjudged or admitted infringing device to remain in the marketplace.”

As a result, court refused to order the samples — holding that “Kemin has been able to obtain samples in the past, and despite the affidavit provided by Kemin, the Court is not convinced it will be unable to do so in the future.”

Links:

• Kemin order

Indecipherable Patents

The June 2005 Corporate Legal Times includes an interesting roundtable discussion on patent reform.  The participants were all in-house patent counsel.  In the discussion, Richard Rodrick of S.C. Johnson raised an issue that has not been touched by any of the proposed patent reforms.

You can write a patent application today that is almost indecipherable, and you’ve got a good chance of getting it out of the patent office with a patent. 

Anyone who regularly reads patent documents knows that Rodrick is right on the money.  Should the Patent Office be issuing more rejections based on a lack of clarity in the specification based on the requirements of Section 112?

LINKS:

• Kim Weatherall provides an Aussie Academic perspective
• Corporate Legal Times
• Phil Mann’s straight talk
• Peter Zura on the topic

• 35 U.S.C. §112. Specification: The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.

CAFC: Patent Licensee in Good Standing has No Standing for Declaratory Relief

MedImmune v. Centocor (Fed. Cir. 2005).

Centocor is the exclusive licensee of a patent on lymphocytic cells that produce chimeric immunoglobulins. (U.S. Patent No. 5,807,715). After a period of negotiations, MedImmune sub-licensed the patent and began paying royalties. Even after signing the agreement, MedImmune asserted to Centocor that it did not infringe and that the patent was unenforceable/invalid.  Centocor responded that “it expected MedImmune to continue to adhere to its license obligations.”

MedImmune then filed suit, asking for declaratory judgment that it owes no royalties. The district court, however, dismissed the case for lack of an actual controversy.  On appeal, the CAFC affirmed — finding Gen-Probe v. Vysis (Fed. Cir. 2004) dispositive.

In Gen-Probe, we considered the case of a licensee in good standing who sought a declaratory judgment that it was not infringing the licensed patent, and that the licensed patent was invalid. . . . [W]e determined that the license, "unless materially breached, obliterated any reasonable apprehension of a lawsuit," and that once the licensor and licensee "formed the license, an enforceable covenant not to sue, the events that led to the formation [of the license] became irrelevant."

MedImmune argued that Gen-Probe should not be followed because it is “inconsistent with Supreme Court Precedent and with prior Federal Circuit precedent.”  The CAFC rejected that argument — finding the cited opinions to be consistent with Gen-Probe.

From a policy perspective, the Court rejected MedImmune’s argument that Gen-Probe creates an unacceptable “Hobson’s choice.”

Every potential infringer who is threatened with suit, or who is sued, for patent infringement must decide whether to settle or fight. In short, the "Hobson’s choice" about which MedImmune complains arises not from Gen-Probe, but from Article III’s requirement that, before a district court exercises jurisdiction in a declaratory judgment suit, there must be an actual controversy between the parties. For the reasons set forth above, such a controversy does not exist here.

Dismissal affirmed.