Patent Law Blog (Patently-O)

CAFC Narrows Experimentation Defense to the On Sale Bar

Electromotive Division of GM v. Transportation Systems of GE (Fed. Cir. 2005).

EMD appealed after its patents on diesel turbochargers were found invalid. On appeal, the CAFC affirmed, finding that the patented invention was subject to commercial sales before the pre-critical date that were not primarily experimental. 

EMD had sold its product more than one year before its patent application filing date, but argued that those sales were negated by an experimental use defense. The appellate panel, however, disagreed.

In its decision, the Federal Circuit panel first provided a full analysis of the law of experimental use in relation to the Section 102(b) public use and on sale bars.  Then, the court tightened its rules — finding that ordinarily, a patentee must prove that (i) control over the experiment and (i) that the customer was aware of the experiment.

Our precedent has treated control and customer awareness of the testing as especially important to experimentation. Indeed, this court has effectively made control and customer awareness dispositive. Accordingly, we conclude that control and customer awareness ordinarily must be proven if experimentation is to be found.

Invalidity Affirmed.

Eighth Circuit Decides Patent Case -- Adopts Federal Circuit Precedent

Schinzing v. Mid-States Stainless (8th Cir. 2005)

Schinzing sued Mid-State in Minnesota state court alleging breach of a license agreement for Mid-State' failure to pay royalties due for its wheel-chair washing machine products. Mid-State removed the case to federal court and raised a number of affirmative defenses and counterclaims, including patent invalidity and non-infringement.  After a bench trial, the district court found that the license had been breached and that the patents were not invalid.

The appeal was taken-up by the Eighth Circuit Court of Appeals because the patent issues were raised in a counterclaim rather than in the properly pled complaint.

Basing its decision on Federal Circuit law, the Eighth Circuit panel found that the court had failed to apply an element-by-element comparison of the patent claims to the prior art references presented at trial.

We note that on remand the district court’s comparison of the ’375 patent to the device described in [prior art] should reflect the Federal Circuit’s observation that 35 U.S.C. § 102(b) may bar patentability by anticipation if the earlier device includes every limitation of the later claimed invention, or by obviousness if the differences between the claimed invention and the earlier device would have been obvious to one of ordinary skill in the art. Netscape Communications Corp. v. Konrad, 295 F.3d 1315, 1321 (Fed. Cir. 2002).

Remanded.

Intellectual Property Experience of Nominee John G. Roberts

In a recent newsletter, the AIPLA profiled recent Supreme Court Nominee John Roberts — focusing on his intellectual property experience.  The general consensus is that Roberts is in favor of strong, principled intellectual property rights and that those rights are well founded in the language of the constitution.

Example Roberts cases:

1. Feltner v. Columbia Pictures, 523 U.S. 340 (1998) (Seventh Amendment guarantees the right to a jury trial on statutory copyright damages);
2. TrafFix v. Marketing Displays, 532 U.S. 23 (2001) (utility patent is strong evidence but not conclusive evidence that trade dress claim is invalid);
3. Intergraph v. Intel, 195 F.3d 1346 (Fed. Cir. 2001) (question of whether prior license covered patents in suit); and
4. Universal Studios v. Peters, No. 04–5138 (D.C. Cir. 2005) (business meter stamp is not equivalent to a postal service stamp when attempting to cure a late claim)

Great topic for a law review comment on patent law

An eager law student with some statistics skills (you know who you are) needs to take-up the following project that will eventually result in a law review article.

Many people, including myself are concerned about delays at the U.S. Patent & Trademark Office.  While the Office has made great strides in recent years, many patentees are still faced with long periods of waiting for PTO action.  There is also a great variance between individual applications — making it difficult to manage client expectations and to plan for any business development based on an eventual issued patent.  While the table below provides some ways understand and overcome the variance problems, it not sufficient.  An analysis of PTO data is clearly needed to understand what factors affect time to first-action from the PTO. 

Potential factors that may be important to the amount of time that it takes the PTO to give its initial response include: technology area; continuation vs. non-continuation; examiner type (primary vs. secondary); number and complexity of claims; based on a foreign priority; based on a provisional application; length and complexity of the specification; small vs. large entity; etc. 

Let me know if you are interested in taking-up this topic.

Listing of Expected Patent Prosecution Delay

The PTO has begun reporting the “average filing date of applications receiving a first office action” broken down by technology center.  (Link).  I took those most recent numbers and calculated an average backlog in months.  The results are sorted below:

Tech Center	Tech Center Description	Average Backlog (Months)
1660	Plants	10
2900	Designs	13
3640	Aeronautics, agriculture, fishing, trapping, vermin destroying, plant and animal husbandry, weaponry, nuclear systems and licensing & review	14
2810	Static memory and digital logic	15
3740	Thermal and combustion technology, motive and fluid power systems	15
3610	Surface transportation	15
3670	Wells, earth boring/moving/working, excavating, mining, harvesters, bridges, roads, petroleum, closures, connections, and miscellaneous hardware	15
3630	Static structures, supports and furniture	16
2890	Semiconductor, Electrical, Optical Systems & Components	16
3680	Machine elements and power transmissions	16
2870/2880	Liquid crystals, optical elements, optical systems, fiber optics, lasers, electric lamps, registers, optics measuring and radiant energy	17
3750	Fluid handling and dispensing, and Textile Manufacturing and Apparel	17
2820	Semiconductors and electrical circuits	17
3720	Packages and containers, manufacturing devices and processes, machine tools and hand tools	17
3650	Material handling and article handling	17
3710	Amusement and education devices	17
1720	Fluid separation and agitation, metal foundry, welding, plastic molding apparatus, fuels and related compositions	18
1620	Organic chemistry	18
3660	Computerized vehicle controls and navigation, radio wave optical and acoustic wave communication	18
2850/2860	Photocopying, recorders, measuring and testing, printing	18
1750	Chemical products and processes, solar cells and sputtering apparatuses	19
1710	Synthetic resins	19
1770	Stock materials and miscellaneous articles	19
2830/2840	Power generation and distribution, music, electrical components and control circuits	20
1730	Glass and paper making, tobacco, non-metallic molding, adhesive bonding, tires and coating apparatus	22
3760	Body treatment, kinestherapy, and exercising	22
1650	Fermentation, microbiology, isolated and recombinant proteins/enzymes	23
1610	Organic compounds: bio-affecting, body treating, drug delivery, steroids, herbicides, pesticides, cosmetics, and drugs	23
1760	Food technology, petroleum processing, coating and etching	23
2670	Computer graphics	24
1740	Metallurgy, electrochemistry, cleaning, disinfecting, sterilizing, analytical chemistry and wave energy	24
1630	Molecular biology, bioinformatics, nucleic acids, recombinant DNA and RNA, Gene regulation, gene therapy, nucleic acid amplification, animals and recombinant plants, combinatorial/computational chemistry.	26
2650	Dynamic information storage and retrieval	26
2680	Radio Telecommunications	26
2180	Computer architecture	27
1640	Immunology, receptor/ligands, cytokines, recombinant hormones, and molecular biology thereof	28
2630	Digital, optical, and general communications	30
2110	Computer architecture	30
2640	Audio, speech processing and wired telephone	30
2120	Miscellaneous computer applications	31
2160/2170	Graphical user interface, data bases	34
3620	Electronic Commerce	35
2190	Interprocess Communications & Software Development	36
2620	Image analysis,	37
2140/2150	Computer networks	38
2610	Television	39
2130	Cryptography, security	39
2660	Multiplex communication	40

Although this is unconfirmed, I believe that these numbers are somewhat skewed because they include continuing applications that generally have a shorter delay before receiving a first office action.  As such, the expected delay for a newly filed non-continuation may be greater than that listed. Nonetheless, the table is useful for providing a new applicant a better estimate of the expected timetable.

Notes:

• Thanks to Russ Krajec and Carl Oppedahl for the heads-up on this PTO practice.
• Link: Stephen Nipper has provided a concise explanation of how to use the pendency table.
• John Doll, the PTO’s Acting Commissioner for Patents recently gave a presentation on this and other topics at the NAPP meeting: File Attachment: John Doll Presentation.ppt (1209 KB)

Patent Office to Improve Interference Searching Procedures

The PTO announced that Examiners will now perform interference searches using the electronic PGPub database, instead of using the prior practice of searching through paper application files. The search will be performed when applications are deemed in condition for allowance, and will be text-based. In situations where a particular sequence is claimed, the search will also include the electronic sequence database. While this search will not include unpublished applications, the Office expects that a "new system" will one day allow for them to search unpublished applications as well. Although unstated, it is a logical conclusion that that these broader interference searching procedures will result in more office initiated interferences.

Under the “two-way test” for determining whether subject matter is interfering, an interference exists if the subject matter of a claim of one party would, if prior art, would have anticipated or rendered obvious the subject matter of a claim of the opposing party and vice versa.  Thus, the interference requires that each invention obviate the other. 

By Christopher Singer & Dennis Crouch.

Library of Congress Issues Report on Proposed Patent Reform

Wendy Schacht along with Georgetown Professor Jay Thomas have authored a new report on patent reform on behalf of the Library of Congress. Without being judgmental, the report outlines the major elements of the proposed patent reform bill H.R. 2795. The report reviews changes in the following areas, and importantly, how the specific change would affect particular groups and industries (individual inventors; universities; technology companies; biotech; etc.).

• First Inventor to File
• Grace Period
• Elimination of Sections 102(c), (d) and (f)
• Assignee Filing
• Elimination of the Best Mode Requirement
• Inequitable Conduct
• Publication of Pending Applications
• Pre-Issuance Submissions
• Continuation Applications
• Prior User Rights
• Injunctions
• Limitation Upon Damages
• Willful Infringement
• Post-Issuance Opposition Proceedings

Link: File Attachment: Schacht-Thomas Report on Patent Reform (183 KB)

Suggestion to Combine References Flows from Ordinary Knowledge of those Skilled in the Art

In re Battiston (Fed. Cir. 2005) (NONPRECEDENTIAL)

by Cory Hojka

In Teleflex v. KSR, a case now awaiting a petition decision at the Supreme Court, the Federal Circuit ruled that the correct “teaching-suggestion-motivation test” for obviousness determination requires “a court to make specific findings showing a teaching, suggestion, or motivation to combine prior art teachings in the particular manner claimed by the patent at issue.”

Joseph Battiston, therefore, appealed a decision by the PTO Board – claiming that the board applied the wrong standard of obviousness. Particularly, Battiston argued that the PTO “used impermissible hindsight to combine the cited art and failed to make findings on a motivation to combine the cited art.” The appellate panel did not agree – rather the panel found substantial evidence supporting the Board’s finding that ordinary knowledge of one skilled in the art would suggest a combination of references. In further support of their position, the CAFC cited In Re Rouffet, noting that “the suggestion to combine references may flow from the nature of the problem . . . [or] the teachings of the pertinent references or from the ordinary knowledge of those skilled in the art that certain references are of special importance in a particular field[.]”

Battiston also failed to convince the court that the PTO improperly grouped his rejected claims. Citing In re McDaniel, the court reaffirmed its rule that "in the absence of a clear statement asserting separate patentability of the claims, the Board is free to select a single claim for each group of claims subject to a common ground of rejection as representative of all claims in that group and to decide the appeal of that rejection based solely on the selected representative claim."

Rejection Affirmed.

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.

Patent Drafting In the Wake of Phillips v. AWH -- Initial Thoughts

In a few months, we will know more about how the en banc Phillips v. AWH decision will be used precedentially.  However, there are a few key points to take-home today. 

1) The game is no longer about careful claim drafting — now, you must carefully draft the entire patent document.* 

2) Be absolutely consistent between the claims and the specification.  A stray modifier of a claim term in the specification can easily lead to unintended consequences.

3) Every word in the claims will be read in the context of the specification.  Therefore the desired scope of every claim term must be fully supported in the specification.

4) Your initial reaction may be to make the ensure that the specification contains no limiting features. — That approach may not be the best.  Your patent will be worthless if it attempts to cover the entire world of technology.  Focused patents that stay within their bounds can be extremely powerful.

5) Give the courts 6–months to sort out some details. — But, set-up a docket reminder for January 15, 2006 for a review of all pending applications to (i) ensure that current claim terms are properly defined within the specification and (ii) whether any preemptive amendments are be in order.

Notes:

• * Of course, you were doing this already.
• University of Pennsylvania law professor Polk Wagner has been writing extensively about claim construction for the past several years.  His thoughtful comments and criticism of my tips are available here.
• Profs Wagner and Joe Miller (Lewis & Clark) have proposed that patent drafters should “leave nothing to chance” and present a glossary of claim terms in the specification.  This “clear thinking” approach would be helpful down the road when you are trying to spot infringers as well. Comment?

 

Patently-O Tidbits

• FEDERAL CLERKSHIPS: Cliff Holmes, a college classmate of mine, has written the book on Federal Clerkships.  The 2005–2006 guide is now available online.  Access is free to GWU, Northwestern & Emory Law student — everyone else will have to pay.
• PTO INSIDER INFO: I recently ran across a great new patent law weblog — “Just a Patent Examiner.”  This patent examiner writes anonymously and opens up a window to his examination process.  Great work!
• PATENT BLOG: Another nice patent law blog is by Robert Plotkin. Check out “Automating Invention.”
• INTERNET CASES: Attorney Evan Brown’s review of disputes involving the Internet is one of the best resources on the net. www.internetcases.com.
• PATENT REFORM: Minnesota based patent attorney Brad Pedersen presented the following commentary and suggestions on the Patent Act of 2005.  File Attachment: Comments on HR 2795.DOC (70 KB). 
• PRACTICE TIPS: Form PTO-1449A asks for more information information that is required under the rules of practice.  This form [GenericIDS.rtf (69 KB)] may help you provide the required information without looking like you are hiding anything.

Claim Construction -- Dictionaries are Still OK.

North American Container v. Plastipak (Fed. Cir. 2005).

Although this case may be too close on the heels of Phillips v. AWH to serve as a predictor.*  The CAFC affirmed a trial court’s reliance on the Online Oxford English Dictionary when construing the disputed claim term “generally.”  Based on a mostly-proper claim construction by the district court, the CAFC affirmed-in-part a grant of summary judgment of noninfringement. 

* This case did not cite the recent Phillips case.

No Appellate Jurisdiction Because Counterclaim Left Undecided

Enzo Biochem v. Gen-Probe (Fed. Cir. 2005).

Enzo owns a patent on nucleic acid probes that selectively hybridize to Neisseria gonorrhoeae.  In an oral hearing, the district court invalidated the patent for violating the on-sale bar — holding that there were “no triable issues of fact” and granting Gen-Probe’s motion for summary judgment.  The district judge then asked the parties if there were any other outstanding issues that he should rule upon, and counsel for both parties responded that the court had “covered all the issues raised.”  The clerk then entered judgment under Rule 58 holding that the claims were invalid and that “the case was closed.”

On appeal, however, the CAFC refused to reach the merits — finding that the lower court had not reached a “final judgment” because Gen-Probe’s unenforceability counterclaim remained unadjudicated. The appellate panel agreed with Gen-Probe that “the district court’s belief that the judgment was final is irrelevant to whether jurisdiction is satisfied.”

Although it is true that the district court here did make a clear statement that the case was at an end, it was mistaken, because an unadjudicated counterclaim remained. Gen-Probe’s brief to this court, supported by the record, and unrefuted by Enzo, makes that clear. While it is, to say the least, regrettable that a party with a remaining counterclaim that it wishes to pursue, as well as its opponent, leaves a trial judge with the impression that no claims remain in the case, we have no choice but to take cognizance of the nonfinality created by the unquestioned existence of that counterclaim.

Case dismissed for lack of appellate jurisdiction.

• File Attachment: Enzo v Gen-Probe.pdf (34 KB)

CAFC Transfers Patent Case to Fifth Circuit

University of Texas v. NTT (Fed. Cir. 2005).

UT filed suit in Texas state court against NTT for breach of contract, tortious interference, etc.  That case was removed to federal court under 28 USC 1338(a) after the district judge found that UT’s tortious interference claim required a finding that UT’s patents overlapped with NTT’s patents.  The district court then ruled on a motion to dismiss, NTT appealed to the CAFC.

On appeal, the CAFC determined that it did not have jurisdiction over this case because it did not necessarily implicate substantial questions under the federal patent laws. 

Here there is no question that the claims framed in the Complaint assert only causes of action created by the state law of Texas and not the federal patent laws.  Accordingly, the issue becomes whether the state law claims asserted or the relief requested by Plaintiffs ‘necessarily depends on resolution of a substantial question of federal patent law.’ . . . [T]his court has held that issues of inventorship, infringement, validity and enforceability present sufficiently substantial questions of federal patent law to support jurisdiction under section 1338(a).  NTT is incorrect, however, in asserting that such issues are raised by Plaintiffs’ claim for tortious interference. This is so primarily because patent law issues identified by NTT are not essential to the resolution of Plaintiffs’ claim.

Thus, since the tortious interference could be proven without delving into substantial patent issues, the appellate panel determined that it did not arise under the patent laws.

The Federal Circuit then transferred the remaining issues to be determined on appeal to the Fifth Circuit.

Federal Circuit Shows How to Protect Software Patents In Europe: AT&T v. Microsoft

AT&T v. Microsoft Corporation (Fed. Cir. 2005).

In a companion case to Eolas v. Microsoft, the CAFC has taken another step in expanding the potential use of 35 U.S.C 271(f) to obtain damages for actions done abroad.

AT&T’s patent covers certain speech codecs that are included in Microsoft’s Windows product.  As shown above, Microsoft generates its source code in the U.S.  That source code is copied and shipped abroad to Foreign computer manufacturers who, pursuant to their license agreement with Microsoft, generate 2nd generation copies of the software that are then installed and sold.

The district court found that Microsoft could be liable for foreign sales under Section 271(f) for shipping components of a patented invention.

On appeal, Microsoft argued that (i) software code cannot be a “component” under 271(f) and (ii) the 2nd generation copies are not “supplied” from the U.S.  Rather, Microsoft argued that those 2nd generation copies are manufactured abroad.

Component: The majority panel made quick-work of the “component” argument, finding that the issue was fully determined by Eolas.

Supplied: Using a simple statutory analysis, the majority determined that “supplying” of software necessarily implies making a copy.  “Copying, therefore, is part and parcel of software distribution.”

Rule: Thus, “sending a single copy abroad with the intent that it be replicated invokes § 271(f) liability for those foreign-made copies.”  Therefore, the district court properly held Microsoft liable for the foreign activity.

In a well reasoned dissent, Judge Rader, decried the majority’s “extraterritorial expansion” — arguing that the court “should accord proper respect to the clear language of the statute and to foreign patent regimes by limiting the application of § 271(f) to components literally ‘shipped from the United States.’” as is required under Pellegrini.  

File Attachment: AT&T v. Microsoft.pdf (73 KB)

En Banc Federal Circuit Panel Changes The Law of Claim Construction

Phillips v. AWH Corp. (Fed. Cir. 2005) (en banc).

[PRINTABLE PDF VERSION] In a much anticipated opinion, the CAFC has refocused its approach to claim construction — moving away from extrinsic evidence offered by dictionaries and encyclopedias toward a more detailed analysis of the patent specification.  In the process, the majority en banc panel rejected the claim construction approach of Texas Digital Systems v. Telegenix (Fed. Cir. 2002) and its progeny.

In Texas Digital, the court noted that "dictionaries, encyclopedias and treatises are particularly useful resources to assist the court in determining the ordinary and customary meanings of claim terms." . . .  Although the concern expressed by the court in Texas Digital was valid, the methodology it adopted placed too much reliance on extrinsic sources such as dictionaries, treatises, and encyclopedias and too little on intrinsic sources, in particular the specification and prosecution history. . . . That approach, in our view, improperly restricts the role of the specification in claim construction.

The court logically found that the problem of using dictionaries in claim construction is that they focus the inquiry on the abstract meaning of words rather than on the meaning of claim terms within the context of the patent.

Yet heavy reliance on the dictionary divorced from the intrinsic evidence risks transforming the meaning of the claim term to the artisan into the meaning of the term in the abstract, out of its particular context, which is the specification.

Interpreting 35 U.S.C. 112, the CAFC determined that the statute requires that the specification inform the claim construction.

In light of the statutory directive that the inventor provide a "full" and "exact" description of the claimed invention, the specification necessarily informs the proper construction of the claims.

The majority acknowledged that this decision does not fully clarify claim construction jurisprudence.  Leaving the real analysis to be done on a case-by-case basis.

In the end, there will still remain some cases in which it will be hard to determine whether a person of skill in the art would understand the embodiments to define the outer limits of the claim term or merely to be exemplary in nature. While that task may present difficulties in some cases, we nonetheless believe that attempting to resolve that problem in the context of the particular patent is likely to capture the scope of the actual invention more accurately than either strictly limiting the scope of the claims to the embodiments disclosed in the specification or divorcing the claim language from the specification.

In addition to the majority opinion, a dissent and a dissent-in-part were filed. In dissent, Judges Mayer and Newman continued their longstanding vocal objections to the rule that claim construction is a “matter of law” that should be decided de novo.

Now more than ever I am convinced of the futility, indeed the absurdity, of this court’s persistence in adhering to the falsehood that claim construction is a matter of law devoid of any factual component. Because any attempt to fashion a coherent standard under this regime is pointless, as illustrated by our many failed attempts to do so, I dissent.

Bottom Line:

• Careful patent drafting is now more important than ever.  Under Phillips, the specification “necessarily” informs proper claim construction.  Whether a patent drafter acts intentionally or not, the specification is now likely to shape the meaning of the claims.  Best make it intentional.


• Textual analysis will be key: for example, because claims referred to “steel baffles,” a court may draw an inference that, in general, baffles can be made a non-steel materials.


• District court claim construction decisions will continue to be overturned on a regular basis.

Links:

• File Attachment: Phillips en banc Decision (253 KB);


• Phillips en banc Amicus Briefs;


• Transcript of en banc Oral Arguments;


• Patent World Article on Phillips v. AWH (pre-opinion).

USPTO Implements Pre-Appeal Brief Conference

Effective July 12, 2005, the USPTO begins a new program that allows Applicants to request formal review of the legal and factual basis of pending rejections in an application prior to filing an appeal brief. Under this program, a panel of examiners will review the case and determine whether the status of the application is appropriate for appeal, prior to filing an appeal brief. 

The panel decisions will issue in one of four possibilities:

1. Application remains on appeal (at least one issue remains for appeal);
2. Prosecution is reopened and an Office communication will issue in due course (panel may suggest amendments);
3. Application allowed on the pending claims and prosecution remains closed; and
4. Request dismissed for failure to comply with submission requirements.

This program is designed to reduce costs associated with the preparation of appeal briefs. The normal appeal practice remains available to Applicants.

See the Official Gazette notice (link) for complete details regarding this procedural option, including: General Provisions, Conditions Necessary to Request a Panel Review, Content of Request, Content of Remarks or Arguments, USPTO Consideration of the Request, Format of Panel Decision, Time Periods Before/After a Panel Decision, and Administrative Matters.

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.  [Singer Bio].

Notes:

• Patently-O Coverage of the Pre-Appeal Brief Conference;
• Thanks to Randolph Smith for the heads-up on the change.

Inter Partes Reexaminations On The Rise, Becoming Popular Amongst Potential Defendants

The USPTO’s inter partes reexamination procedure has been questioned for its failings, and many potential requesters fear the associated estoppel provisions.* However, a comprehensive analysis of inter partes reexaminations recently updated by Joseph Cohen shows that (1) inter partes reexam filings are clearly on the rise and (2) these reexams are getting good results for the requester (not for the patentee).

The past four one–year periods were analyzed by Cohen, who found that inter partes filings are clearly on the rise:

• Year Ending: Number of Filings
• June 30 2002:  4
• June 30 2003:  18
• June 30 2004:  26
• June 30 2005:  52

Results have been strong for the inter partes requester.  In the past four years, 98% of requests for inter partes reexam have been granted and, thus far, only 1% of cases have seen an action that allowed all reexamined claims without change.

* Estoppel: Under Section 315(c) of the Patent Act, a third party that requests inter partes reexamination is estopped from later raising the same issues in a court proceeding. The proposed Patent Act of 2005 would change the estoppel provision and would allow inter partes reexams to apply to all patents (rather than only those filed since 1999). 

Links:

• Joseph Cohen’s paper was published as What’s Really Happening in Inter Partes Reexamination, 87 JPTOS 207 (2005).  An updated version of his paper is available online here.
• USPTO’s 2004 report to Congress on Inter Partes Reexaminations.
• Gholz and Pous article on acceptance of Inter Partes Reexams by Patent Attorneys.

Practice Tip -- Information Disclosure Statements

Filing an information disclosure statement to the PTO is now quite easy.  If you are only submitting U.S. patent documents (including published and unpublished patent applications), then the only items to submit are (i) completed form PTO-1449a; (ii) transmittal; and (iii) a return receipt post-card.  Form 1449a serves as the Information Disclosure Statement, as such, there is no need to submit a separate ‘statement’ listing or describing the references.  Likewise, under the PTO’s new rules, there is no need to submit copies of any of the U.S. patent documents (except for unpublished patent applications in certain cases).  This is a nice practice change that saves paper as well as the clients’ money.

Links:

• Current USPTO Forms

CAFC: Reasons For Allowance Without Comment Does Not Create Disclaimer

Salazar v. Procter & Gamble (Fed. Cir. 2005)

In the mid 1990’s, Alfred Salazar of Bixby Oklahoma applied for and received a patent on a toothbrush that contained both elastic stimulator rods (for stimulating the gums) and elastic polishing rods (for cleaning the teeth).

Acting pro se, Salazar sued P&G for infringement, but lost on summary judgment after the district court determined that P&G’s products do not infringe because they included nylon rather than elastic.  The district court had distinguished nylon from elastic based on the examiner’s Reasons of Allowance that discussed a prior art bristle as “made of nylon, which is not considered elastic."

On appeal, the CAFC reversed, finding that a unilateral statement of an examiner in stating reasons for allowance does not create a clear and unambiguous disavowal of claim scope nor give rise to prosecution history estoppel.*

An applicant’s silence in response to an examiner’s characterization of a claim does not reflect the applicant’s clear and unmistakable acquiescence to that characterization if the claim is eventually allowed on grounds unrelated to the examiner’s unrebutted characterization."). After all, the applicant has disavowed nothing. . . . Procter & Gamble does not present any case law that stands for the proposition that an examiner’s unilateral statements in a Notice of Allowance constitute a clear and unambiguous disavowal of claim scope.

In dissent, Judge Bryson agreed that “an applicant is not bound by every statement made by an examiner during the course of the prosecution.” However, Judge Bryson argued that in this case, “the examiner made clear his understanding of the meaning of the term ‘elastic’ as used in the patent . . . [I]n light of the central importance of the examiner’s understanding of the meaning of the term to his decision to allow the claims, the absence of any indication that the patentee intended the claim term to be broader supports the district court’s conclusion that the ‘elastic’ stimulator rods should not be construed to include rods made of nylon.

*Note: The CFR section regarding comments on reasons for allowance has been amended since the patent in this case issued. This case was decided based on the old regulations.

CAFC: Prosecution Disclaimer Does Not Preclude Infringement Suit Against Product Exhibiting Disclaimed Element

SanDisk v. Memorex (Fed. Cir. 2005).

SanDisk holds a patent on Flash EEPROM with an improved architecture that extends the useful life of the device. 

When construing the claims, the trial court ruled that the claims did not cover systems with any memory cells grouped into non-partitioned sectors.  Because the accused devices included many sectors of memory cells that included non-partitioned sectors, the lower court granted defendants’ summary judgment motion that the devices did not infringe.

On appeal, the CAFC reviewed claim construction de novo, and reversed. First, the court looked at the plain language of the claim:

A method of operating a computer system including a processor and a memory system, wherein the memory system includes an array of non-volatile floating gate memory cells partitioned into a plurality of sectors that individually include a distinct group of said array of memory cells that are erasable together as a unit . . .

The appellate court found that the “including” transition, which is “a patent law term of art [meaning] ‘comprising.’”

Second, the appellate court rejected the district court’s finding that SanDisk had, during prosecution of the patent, disclaimed any cells grouped into non-partitioned sectors — finding that although the patent had been distinguished based on the partitioning, the disclaimer only applies to elements “subject to the claimed method, and no more.”  Thus, with open claim language, a device may be found to infringe a patent even if the device includes elements that were disclaimed during prosecution.

[T]here is no prior reason why that memory cell array or the discussion of it should be presumed to exhaust every cell on every EEprom in the "memory system" recited in the claim preambles. Given the open language in the claims, there is no reason for the court to read the prosecution argument with such a presumption in mind. Put differently, the reference to "each sector" means "each sector" subject to the claimed method, and no more. In short, SanDisk’s reading of this prosecution argument is at least reasonable. Thus, focusing on this passage alone, there is no "clear and unmistakable surrender" within the meaning of Golight.

Summary Judgment of Noninfringement Vacated and Remanded

In Nonprecedential Opinion, Judges Spar Over Use of Patent Specification in Claim Construction

Izumi Products v. Koninklijke Philips (Fed. Cir. 2005) (NONPRECEDENTIAL)

In the wake of the CAFC’s recent foray into disposable razors, the appellate panel has now made its mark on the world of electric rotary razors.

In 2002, Izumi sued Philips for infringement of its electric razor patent that discloses a specialized recess in the blade that helps ensure that “shaving debris” don’t adhere to the blades. After construing the claims, the district court granted summary judgment of non-infringement in Philips favor. On appeal, the CAFC (Lourie, Newman, JJ.) found an error in the district court’s claim construction based on their review of the patent specification and logical analysis, but without any mention of a dictionary analysis.

In a concurring opinion, Judge Linn remarked the disputed term, “recess,” should be given the “full scope of its ordinary and customary meaning” and not be limited by definitions “improperly read” from the specification. 

 

Ex-Post Figures Allowed in Hypothetical Royalty Calculation

Honeywell v. Hamilton Sundstrand (HSC) (D. Del. 2005).

Conflicts between these two companies have already generated Federal Circuit precedent.  Now, in a case involving Honeywell’s patented power supply, the Delaware District Court has determined that HSC’s ex-post sales figures should be used in the calculation of a reasonable royalty.

Once infringement is found, a patentee is entitled to damages that are “in no event less than a reasonable royalty for the use made of the invention by the infringer.” 35 USC 284. The reasonable royalty is generally calculated through a legal fiction known as a “hypothetical negotiation” that would have occurred at a time before infringing activity began.

In this case, the patent issued in 2000, after HSC was already selling its allegedly infringing product. Demand changes due in part to the 9/11 tragedy caused product sales to increase dramatically in 2004 and 2005.  Honeywell argued that, despite their later date, these sales projections could not be ignored in the hypothetical negotiation.  HSC disagreed, arguing that post-negotiation sales projections should be rejected in the context of the hypothetical negotiation construct — particularly where pre-negotiation projections exist.

The court, noting a direct conflict between Fromson v. Western Litho (Fed. Cir. 1998) (later figures may be used) and the 2003 CAFC’s decision in Integra v. Merck KGaA (post-negation figures excluded because they change “risks and expectations of the parties”), sided with Honeywell and held that the post-negotiation figures could be used.

[T]he court is presented with two cases, both of which are binding, that dictate opposite results. . . . HSC suggests that the court should resolve the conflict by following the more recent case, Integra. The court disagrees. The recent vintage of a case has no bearing on how well it was reasoned. In this case, the court is persuaded that the result dictated by Fromson is the most sensible. First, it promotes flexibility in damage calculations by not erecting an unnecessarily rigid barrier to relevant post-negotiation information. Second, it discourages infringement by placing the risk of success on the infringer. Third, it protects the quid pro quo underlying patent law by preventing a premature valuation of the patent. Finally, it permits a damage award more in keeping with the plain language of § 284 by adequately compensating the plaintiff for the "the use made of the invention" by the defendant. This list is probably not exhaustive, but is, in the court’s view, sufficient to demonstrate that Fromson should control in this case.

HSC’s motion to preclude post-negotiation sales figures denied.

Links:

• Download the Decision.

Choosing the Next Judicial Appointment for the Court of Appeals for the Federal Circuit

In a recent article picked up by Howard Bashman, Legal/Technology reporter Brenda Sandburg began speculation on President Bush’s next potential appointment to the Court of Appeals for the Federal Circuit (CAFC). The CAFC consists of a panel of twelve judges plus several judges who have taken senior status.  There are currently no openings on the court.  However, it is expected that at least one of the judges will move to senior status this year — leaving room for a patent law expert to fill the slot. 

Contenders:

In a preemptive move, the Federal Circuit Bar Association has put its weight behind District Court Judge Ronald Whyte of San Jose who, for his part, is reportedly not dead-set against the idea.  Judge Whyte has received strong praise from both patent litigators and academics.  During his 12 year tenure as a district court judge, Whyte has handled more patent cases than any other district court judge in the country. 

The CAFC has the highest reversal rate of any federal appellate court, and many believe that a judge with trial experience is needed to bridge the gap between trial courts and the appellate court.  In an impromptu survey, one patent litigator commented “my bottom line is that I want a trial judge on the court — and as many as we can get!”

Because CAFC opinions rarely tread on political hot-button issues, appointments to the court are often made “inside the belt-way.”  One DC name that rises to the top is Judge Ed Damich, who is the Chief Judge of the Claims Court and former academic.  Three other judges who were mentioned include Judge Roderick McKelvie, who recently stepped down from his office as a Delaware District Court Judge, Judge James Holderman of the Northern District of Illinois, and Judge Kathleen O’Malley of the Northern District of Ohio. All of these judges “know a great deal about patent law, and command the respect of the Federal Circuit judges.”

The top litigator in-line for the job may be John Whealan, who has racked up an impressive record of wins before the CAFC as Solicitor for the United States Patent & Trademark Office.  Two other politically active possibles are Robert Armitage of Eli Lilly and Michael Kirk of the AIPLA.  There is another group advocating for a true academic on the court.  According to one law professor, “the Federal Circuit has heretofore paid little attention whatsoever to the large (and growing) body of legal and economic research on the patent system — and has even actively resisted such information at times.  Given its position in the US patent system, the dialog between academy and the court needs to be much better, and perhaps the appointment of an academic could move this along.”  Several professors suggested by Patently-O readers include John Duffy (clerk for Justice Scalia), Mark Lemley (Stanford), and Mark Janis (Iowa).  Of course, Berkeley’s Robert Merges may be the most likely professorial candidate.  Merges is well respected by both his peers and industry and his book (co-authored by John Duffy) sets the standard in law schools.