Patent Law Blog (Patently-O)

Patently-O Bits and Bytes No. 38: New Blogs

• Two new IP Blogs — both from a growing set of solo patent attorneys. 
  • Effective IP: Longtime Blogger Matt Buchanan has started his own law firm and a new blog.
  • Boswell IP: Former Perkins Coie attorney, Mason Boswell started his own firm and accompanying blog focusing on IP law for software & startups.
• Two new patent search & analytic tools:
  • Sumo Brain: Full-text cross-collection searching of US & EP patents and applications.
  • Espresso(TM): An “emerging technology information search engine.”
  • We’ve already discussed PriorSmart.
• Design Patent “Town Hall Meeting” at the Patent Office June 16, 2008. The current debate is primarily over whether auto parts should be protectable under design patent law. Insurance companies and others argue that design patents unduly raise the cost of repair. File Attachment: design_town_hall.pdf (116 KB).
• Design Patent Top Ten: Top Ten Receipients of US Design Patents in 2007.
  1. Samsung
  2. Microsoft
  3. Sony
  4. Nike
  5. P&G
  6. LGE
  7. Wolverine
  8. Hon Hai Precision
  9. Honda
  10. Matsushita (Panasonic)
• Recent Patent Law Job Postings:
  • Patent Attorney - Large Corporation - San Diego, Calif.
  • Patent Attorney - Small Corporation - Bellevue, Wash.
  • Sr. Patent Counsel - Small Corporation - Bellevue, Wash.
  • Patent Attorney - Small Corporation - Las Vegas, Nev.
  • Patent Associate - Law Firm - Alexandria, Va.
  • Patent Attorney - Law Firm - Denver, Colo.
  • Patent Associate - Law Firm - Alexandria, Va.
  • Associate Director, Assistant General Counsel-Patents - Large Corporation - Chicago, Ill.
  • Patent Attorney - Law Firm - Springfield, Mass.
  • Patent Attorney - Affinergy - Research Triangle North Carolina

USPTO Examiner Guidance on Business "Processes"

Patent Attorney Jeff Spangler recently attended the PTO’s business method partnership where he received a copy of the written clarification given to examiners to help them determine when a claimed business method is eligible for patent protection as a statutory process under 35 USC 101.  According to the memo:

“Based on Supreme Court precedent and recent Federal Circuit decisions, the Offic’s guidance to examiners is that a Section 101 process must (1) be tied to another statutory class (such as a particular apparatus) or (2) transform underlying subject matter (such as an article or material) to adifferent thing. If neither of these requirements is met by the claim, the method is not a patent eligible process under Section 101 and should be rejected as being directed to non-statutory subject matter.

An example of a method claim that would not qualify as a statutory process would be a claim that recited purely mental steps. Thus, to qualify as a Section 101 statutory process, the claim should positively recite the other statutory class (the thing or product) to which it is tied, for example, by identifying the apparatus that accomplishes the method steps, or positively recite the subject matter being transformed, for example by identifying the material that is being changed to a different state.

 

Patently-O Bits and Bytes No. 37

• Design Patents En Banc: On June 2, the CAFC is hearing the en banc Egyptian Goddess case to consider the proper method for determining infringement of a design patent. That afternoon, the FCBA is hosting a post-argument discussion with a panel including attorneys for the parties as well as as several amicus. Participate either live or via Webex.
• Big Verdict: “Howrey Loses $250 Million IP Verdict in East Texas” [Medtronic wins over Boston Scientific]. This case may well be ongoing for some time through post-trial motions and appeal.
• Malpractice: “Morgan Lewis Faces Malpractice Suit Over Patent Application.”  See also Patent Malpractice a Federal Issue.

The Multi-Factor Test for Declaratory Judgment Jurisdiction in Patent Cases

Cat Tech LLC v. TubeMaster, Inc. (Fed. Cir. 2008)

Cat sued TubeMaster — alleging infringement of its patent covering a method of using a catalyst loading devices to simultaneously load thousands of tube reactors.  Cat’s infringement allegations were focused on one particular TubeMaster commercial configuration. During the litigation, TubeMaster filed a counterclaim for declaratory relief that its other three configurations did not infringe. On appeal, the CAFC first looked to see whether the district court had proper jurisdiction over the declaratory relief counterclaims.

In MedImmune, the Supreme Court rejected the Federal Circuit’s “rigid” two prong test for DJ jurisdiction that required that the DJ plaintiff (1) have a reasonable apprehension that the patentee will file suit and (2) conduct “meaningful preparation” to conduct potentially infringing activity.  The MedImmune decision eliminated the first prong — finding the that the “reasonable apprehension” test excluded at least some actual “cases and controversies” under Article III of the U.S. Constitution. 

New Multi-Factor Test for Declaratory Judgment Jurisdiction: In Cat Tech, the Federal Circuit found that the second prong of “meaningful preparation” is still intact — at least as a factor working to determine whether a dispute is immedate and real.

“[T]he issue of whether there has been meaningful preparation to conduct potentially infringing activity remains an important element in the totality of circumstances which must be considered in determining whether a declaratory judgment is appropriate. . . . If a declaratory judgment plaintiff has not taken significant, concrete steps to conduct infringing activity, the dispute is neither ‘immediate’ nor ‘real’ and the requirements for justiciability have not been met.”

From this decision by Judge Mayer, it appears that the new test for DJ jurisdiction has moved from two prongs to a broader “totality of the circumstances” under the umbrella of a “fundamental inquiry” of “whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”  (quoting MedImmune). Meaningful preparation toward potential infringing activity is important (but perhaps not a required element) in this fundamental inquiry because actual steps taken toward infringement are indicators of both “immediacy and reality.”

On the facts of this case, the CAFC found “meaningful preparation” toward each product was sufficiently shown by “AutoCAD drawings for each of its four configurations”; successful manufacture of one of the configurations; being ready to deliver products under any configuration “within a normal delivery schedule” after receiving an order; and because the company “does not expect to make substantial modifications to its loading device designs once production begins.”

Finally, although also a factor in the analysis, the fact that TubeMaster had not created any sales literature or begun advertising its alternate configurations did not negate the immediacy and reality of the controversy.

Affirmed.

Federal Circuit Contract Interpretation

Lawler Mfg. v. Bradley Corp. (Fed. Cir. 2008)(nonprecedential)

In 2001, Lawler and Bradley settled a patent infringement lawsuit and entered into a contractual license agreement. Bradley was given the right to practice Lawler’s plumbing valve patents in exchange for a 10% royalty.  The license included a combination royalty provision. The royalty licensed parts sold in combination would be charged at a separate (likely lower) royalty rate. 

The dispute on appeal was whether a set of example combinations included in the contract limited the “combination” royalty rate to only a limited set. The particular contract provision read as follows:

“If a Licensed Unit is invoiced or shipped in combination in another product such as an emergency shower or eyewash, [then the combination rate applies.]”

De Novo Construction: Looking much like a claim construction opinion, the CAFC reviewed the contract language de novo (following Indiana law) and reversed the lower court interpretation. In particular, the court found that the “such as” language of the contract limited the combination royalty to only a limited set of combinations. The CAFC found its interpretation necessary to give meaning to the such as clause. As with Federal Circuit claim construction law, Indiana contract law has a preference for giving meaning and effect to all written terms.

“The question before us is whether that term, read in the context of the agreement, is restrictive, as Lawler urges, or merely explanatory, as the court found. We find that it is restrictive. “Such as” refers to items similar to what are recited rather than indicating that the recited items are just examples of what is covered by that provision. . . . The parties’ inclusion of the “such as” phrase … must either have been intended to provide some guidance as to the limited types of combinations that the parties contemplated … or to provide meaningless surplusage. Indiana law constrains us from finding the latter.”

Reversed and remanded.

In dissent, Judge Mayer saw the “such as” language as merely providing examples in much the same way that embodiments provide example implementations of an invention. “[E]mergency eyewashes and showers are examples of combination products, but they are not the only combination products covered by section 3.1 of the licensing agreement.”

First Sale Doctrine: Copyright & Patent

In some ways, the Supreme Court case of Quanta v. LGE is a symbol of the ongoing struggle between property law and contract law.  With concepts like the first sale doctrine (and the rule against perpetuities), property law has typically operated to limit dead hand and downstream control over property rights.  These limiting doctrines are largely ignored in a freedom of contract regime.

Vernor v. Autodesk (W.D. WA 2008)

A federal copyright case last week landed on the side of property & the first sale doctrine.  The court denied summary judgment to Autodesk — finding instead that Vernor may well have a legitimate right to re-sell his copies of AutoCAD. Autodesk argues that he only holds a contractual license to use the software (via shrink-wrap license) and does not actually hold full property interests in the programs.

“[T]he transfer of AutoCAD packages from Autodesk to CTA was a sale with contractual restrictions on use and transfer of the software. Mr. Vernor may thus invoke the first sale doctrine, and his resale of the AutoCAD packages is not a copyright violation.”

In copyright law, the first sale doctrine is codified in statute — allowing the owner of a particular copy to resell that copy even if the owner had contractually agreed not to do so. 

“[T]he owner of a particular copy or phonorecord lawfully made under this title … is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.” 17 USC 109.

In patent law, the first sale doctrine – also known as patent exhaustion – has no statutory support. Rather, like the doctrine of equivalents, patent exhaustion is grounded in common law principles.  The Quanta case is fairly technical and could result in a narrow low-impact opinion. However, it is also quite possible that the Supreme Court will re-solidify the property concepts.  Expect a decision within the next few weeks.

Notes:

• Patry and InternetCases have more details on the Autodesk case.
• More on Quanta v. LGE.
• Comment on Chain of Title: M. Slonecker: “For the sake of factual accuracy, AutoDesk "sold" the software to CTA. At a later date CTA auctioned off its assets, and Mr. Vernor was the winning bidder for the software program discs. With copies in hand, Mr. Vernor placed the discs he purchased at the auction on sale at eBay. Apparently AutoDesk is not pleased with this state of affairs and has been engaged in a running battle with Mr. Vernor about his eBay activities.”

... and See What Sticks: Claim Construction Appeals

Rattler Tools v. Bilco Tools (Fed. Cir. 2008) (nonprecedential)

Rattler sued Bilco in the Eastern District of Louisiana -- alleging that Bilco's magnetic scrapper (used to clean out oil wells) infringed several patents. After a bench trial, the district court found the patents completely non-infringed. In particular,the district court held that the "accused products and methods did not meet any of the thirteen limitations ofthe ten asserted claims."

Rattler appealed -- asking for a new claim construction for each of those thirteen limitations.  Without any detail analysis, the CAFC politely showed Rattler the door.  "We have considered all of Rattler’s arguments. Having done so, we see no reason to disturb the careful and thorough post-trial decision of the district court."

This case is unremarkable in its short analysis, but does serve as a reminder of the current state of patent appeals.  The conventional wisdom that the CAFC re-writes a large percentage of claim construction decisions leads most losing parties to appeal on claim construction.  At the same time, appellants are also including more claim construction arguments in each appeal. 

CAFC: Failing to Submit Invention Inspiration OK; Failing to Submit Product Code of Preferred Input Not OK.

TALtech v. Esquel Apparel (Fed. Cir. 2008) (nonprecedential)

Summary: (1) An applicant need not disclose its own prior work or inspiration for invention if merely cumulative of other references cited; (2) Failing to identify the brand of adhesive tape used in the invention was a best mode violation — resulting in claim invalidation; (3) There is no presumptive order of the steps in a process claim – unless the claim language “requires an ordering of steps” either implicitly or explicitly.

One of TAL’s employees – John Wong – was inspired by TAL’s use of heat-fusible adhesive tape in manufacture raincoats. Over a long process of trial and error, Wong figured out how to use a particular variety of adhesive tape to create a dress shirt that does not pucker after washing. 

After receiving a US utility patent, TAL became embroiled an patent litigation with another Hong-Kong based manufacturer – Esquel Apparel. In that litigation, the district court found TAL’s patent unenforceable due to inequitable conduct during prosecution and invalid for failing to submit fulfill the “best mode” requirement of 35 U.S.C. 112 (inter alia).  Based on the inequitable conduct, the court also awarded attorney fees to Esquel.

Inequitable Conduct: “In this case, the district court found TAL liable for inequitable conduct because inventor John Wong had not disclosed the raincoat seam that inspired his invention to the PTO.” On appeal, the CAFC first dispelled any notion that a patent applicant is required to disclose the inspiration for the invention. Although not stated by the court, 35 U.S.C. 103(a) arguably indicates that the inspiration is not relevant to the patentability inquiry: “Patentability shall not be negatived by the manner in which the invention was made.”

Here, the CAFC noted that TAL’s raincoat may well have been “merely cumulative” to a German patent application that was submitted during prosecution. “If the undisclosed raincoat seam was merely cumulative to [the German application], then no inequitable conduct lies in its nondisclosure.”

Best Mode: At the time of filing, Wong had settled upon a particular type of adhesive tape – known as Vilene SL33 – as the best way to form the seams.  The patent application did not, however, disclose Vilene SL33.  A patent may be invalidated for failing to submit a “best mode” if (1) the inventor possessed a best mode at the time of filing; and (2) the written description fails to disclose the best mode in a way to allow one reasonably skilled in the art to practice that mode.

Possession of the Best Mode: The evidence clearly showed that Wong “experimented with many adhesives but settled on a preference for one.” Thus, the court agreed that the first prong was met — the inventor did possess a best mode at the time of filing – i.e., Vilene SL33.

On the second prong the CAFC disregarded the applicant’s argument that the PTO “prefers the use of generic names of products” and that there is no evidence that the Vilene brand products are actually better quality than other brands.  Instead, the court honed-in on the result of the first prong – that Vilene SL33 was the best mode known to the inventor – and agreed that the best mode had not been disclosed. “TAL has not explained how the written description teaches one having reasonable skill in the art the way to practice the best mode as found in the analysis of the first prong – the use of Vilene SL33.”

Process Order: “Generally, there is no presumption of order, and so a claim with many steps can be infringed by an accused process performing the claimed steps in any order. However, we will find that the claim requires an ordering of steps when the claim language, as a matter of logic or grammar, requires that the steps be performed in the order written, or the specification directly or implicitly requires such a narrow construction.”

In this case, the claimed process implicitly requires a particular ordering. In particular, the bonding adhesive must be presented before a folding step because the folding step requires that the garment abut the bonding element.

Conclusion: The asserted claims were found invalid and not infringed. The remand appears only necessary to determine inequitable conduct and consequently potential attorney fees.

USPTOExaminers.com

According to the website, USPTO Examiners (www.usptoexaminers.com) “is a website designed for professionals to anonymously review, rank, and learn about a patent examiner or a trademark examining attorney who works at the United States Patent and Trademark Office (USPTO).” Law Firms are also reviewed.  The site’s motto is “We Examine the Examiners.”

The owners of the site are anonymous. In addition, the comments are anonymous, but pointed. As an example, the following comment was recently published about a particular examiner (named on the site):  

“The work I have reviewed from him plainly indicates his incompetence. I have had to appeal every case where he was the examiner. And I got him reversed at the Board every time. I think he falls into some kind of job protected category. That is the only reason I can think of why he has not been fired.”

You can also find positive comments about particular examiners, such as the following:

“I have called Primary Examiner Truong several times regarding my searches. Primary Examiner Truong is helpful and knowledgeable about the topic and the classification system. If you are trying to do a search, I recommend calling Primary Examiner Truong. If Primary Examiner Truong is not available I recommend calling Primary Examiner Mendoza in the same Group Art Unit.”

Although the owners of the site have not revealed their names, I sat down the other day and had a virtual conversation with UE.

Patently-O: I understand that you want to remain anonymous. However, can you give readers some clue as to who you are? [a patent attorney; group of attorneys; law students; patent examiners; PTO Director] UE: I am an intellectual property practitioner.  Patently-O: Why did you start the USPTO Examiners site and what is its purpose? UE: I have always believed in providing high quality work to my clients without their incurrence of unnecessary costs.  When I first started practicing intellectual property law, in my personal opinion, patent examiners and the patent practitioners (e.g., patent attorneys and patent agents) were working towards accomplishing the goal of promoting technological advancement.  To that end, there was a mutual exchange of ideas in a collegial environment. However, over the past few years, at least in my opinion, it appears as though some of the patent examiners are less interested in learning the patent rules, applying the patent rules appropriately when examining a patent application, and/or the consequence of their decision.  Moreover, some of the patent examiners have developed an “us (examiners) against them (patent practitioners) attitude.” As a result of some of the patent examiners’ actions and mentality, the cost of prosecuting a patent application has increased.  One option to potentially prevent making costly arguments that fall on deaf ears would be to know what successful strategies other patent practitioners used when working with a particular patent examiner.  Another option would include increased training for examiners so that the patent practitioners do not spend their clients’ money teaching the patent examiners the law and the application of the law to the specific facts of a case.  As such, I created a vehicle in which patent and trademark practitioners can post information about their individual experiences, as well as their opinions (their concerns and their satisfaction) about patent examiners and trademark examining attorneys with whom they have worked. I believe that the experiences and the opinions of patent and trademark practitioners can potentially serve four purposes.  First, if an individual who reads the information posted on my website is a patent or trademark practitioner, that individual may factor in the posted experiences and opinions of other patent and trademark practitioners when determining the competency and responsiveness of a particular patent examiner or trademark examining attorney to better serve their clients.  Second, if an individual who reads the information posted on my website is in charge of training patent examiners or trademark examining attorneys, that individual may decide that it is necessary to investigate whether an examiner or a trademark examining attorney needs additional training in particular areas.  Third, the positive comments will encourage and praise the competent patent examiners and trademark examining attorneys to continue doing the great job that they have been doing.  Finally, the non-positive comments will hopefully encourage the affected patent examiners and trademark examining attorneys to improve their work product or their mentality. It is likely that some of the patent examiners in the same technology Group Art Unit and some of the trademark examining attorneys in the same Law Office discuss the strengths and weaknesses of a particular patent or trademark practitioner to better strategize their Office Action.  I am not doing anything different with this website.  I have simply created a forum that allows patent and trademark practitioners to anonymously discuss their opinions about a particular patent examiner or trademark examining attorney to better strategize their responses to Office Actions.  For example, one post mentioned that the patent practitioner had an appointment to meet with an examiner.  However, the examiner was not in his office at the designated time and even after arriving at his office a couple of hours later, he still ignored the patent practitioner who was waiting at the security desk.  When a patent practitioner reads a comment like the one above, he or she can better determine whether meeting this particular examiner for an interview would or would not be a good use of the clients’ money.  It is important for everyone to realize that there is no way to check the accuracy of an anonymous posted comment.  Therefore, each posted comment should be taken for what it is, and the individuals who read the website should not base their entire strategy on a posted comment. Patently-O: Do you expect that these reviews will improve the examination process? UE: I believe that patent examiners and trademark examining attorneys have a difficult and stressful job.  I hope that my website will make a small contribution in improving the examination process by improving the work product and knowledge of the examiners as discussed above.  Furthermore, I hope the patent and trademark practitioners can use the information to save time and their clients’ money.  Patently-O: Why are you remaining anonymous? Do you expect that you'll be 'outed' at some point? UE: As some of the comments made on some of the IP blogs indicate, this website appears to be somewhat controversial.  I have gone out of my way to program the website so that the identity of the individuals who post their opinions remain anonymous.  This is to ensure that those individuals may post their opinions without the fear of reprisal from a patent examiner or a trademark examining attorney.  For the same reason, I would like to remain anonymous. With respect to being outed, it is likely that I will be outed at some point.  I hope that by that time, this website is well respected, is seen as a source for improving the patent process system, and is used as a factor to better strategize prosecuting a patent or trademark application.  Patently-O: Users have already posed what appear to be defamatory comments on the site. Are you planning to monitor the site and take any action to stop such activity? UE: I do not continuously monitor the messages.  However, I do review my e-mail at contact@usptoexaminers.com once a day.  As stated on the top portion of the message board, “USPTO Examiners’ message board is provided simply as an informational resource. Information is provided as is; no guarantees, warranties or representations are made as to its accuracy or completeness. The posted messages are simply opinions of the message drafters and do not represent opinions of USPTO Examiners, its affiliates, officers, directors, employees, consultants, contractors, and agents. If you find an offensive, defamatory, or inappropriate message or comment, please report it to us at contact@usptoexaminers.com.”  Furthermore, the legal notice provides the terms and conditions for using the website.  Most of the users of this website are professionals who, I would hope, would use their common sense as to what is or what is not an appropriate comment.  Patently-O: Any suggestion on folks I could talk with about the site who would go on record? UE: Not at this time. Patently-O: Gracias

Patently-O Bits and Bytes No. 36

• [Not a] Patent Race: IPO released its annualy survey of top utility patent assignees. IBM again leads the way with over 3,000 utility patents issued in 2007. The organization leads the report with the interesting statement: “IPO DOES NOT INTEND TO ENCOURAGE MORE PATENTING IN U.S.”. [LINK]
• Tafas v. Dudas: On May 19, the CAFC released its notice of docketing in the case — starting a 60 day clock for the PTO to submit its opening brief. I expect that they will take the entire time.
• Inter Partes Reexaminations: Joff Wild highlights a new report on PTO Inter Partes Reexaminations: “Without appeal, the average pendency period for inter partes re-exam is 43.5 months, much longer than the 28.5 months reported by the USPTO – a 95% confidence interval would put the pendency between 34 and 53 months….To date, there has never been a single inter partes re-examination that has gone through the entire re-examination process (including appeal) and made it to completion. Only three have ever received a decision by the Board of Patent Appeals and Interferences.” [LINK][Report][Zura comments]
• MBHB Snippets: In the past, I have published several practice focused articles in MBHB’s Snippets publication. The newest edition is now online. Articles include:
  • Aaron Barkoff, Patent Litigation Under a Future Biosimilars Act
  • Kevin Noonan, Follow-on Biologic Drugs and Patent Law: A Potential Disconnect?
  • Jim McCarthy & Marcia Ireland Rosenfeld, It’s Not Easy Selling Green
  • Benjamin Huber, Seagate: Reports of the Death of Opinions of Counsel Have Been Greatly Exaggerated
  • [Read Snippets]
    
    

Theory of Dependent Claims: Survey Results

Patent claims define the scope of an invention much like metes and bounds define real property boundaries or a statute delineates the difference between criminal and non-criminal activity.  Often, patent applicants submit a series of claims all directed toward the same invention. Various independent claims allow an applicant to focus on various aspects of the invention. These broad aspects may be directed to various nodes of a larger system or regions of a compound, processes for creating or using various elements, etc.  Dependent claims by definition add additional limitations. Thus, for instance disputed claim 1 and 2 from the recent Lovanex dispute reads as follows:

1. A heterogeneous intimate admixture of sulfated heparinic polysaccharides … consisting essentially of

from 9% to 20% of polysaccharide chains having a molecular weight less than 2,000 daltons
from 5% to 20% of polysaccharide chains having a molecular weight greater than 8,000 daltons, and
from 60-86% of polysaccharide chains having a molecular weight of between 2,000 and 8,000 daltons ….

2. The heterogeneous polysaccharide admixture as defined by claim 1, comprising less than 2% of dermatan sulfate.

Claim 2 is interpreted to include all the limitations of claim 1 with the additional limitation of “less than 2% of dermatan sulfate.” See 37 CFR 1.71(c).

Earlier this week, I polled Patently-O readers on why they file dependent claims and received just over 1000 responses. (Listed below).

Theory of Dependent Claims
Why do you file dependent claims?
	Percent of Responses
Answer Options	Strongly Agree	Mostly Agree	Neither Agree nor Disagree	Mostly Disagree	Strongly Disagree	Rating Average
Dependent claims are backup in case the independent claim is rejected in prosecution.	59%	34%	4%	2%	0%	1.51
Dependent claims are backup in case the independent claim is found invalid in litigation.	59%	31%	6%	3%	1%	1.56
Claim Differentiation: The dependent claims expand or alter scope of other claims.	47%	37%	8%	6%	3%	1.82
Dependent claims focus on particular commercial embodiments to make infringement easier to explain to a jury.	29%	44%	21%	4%	2%	2.07
I primarily include dependent claims with nonobvious additional limitations.	19%	45%	25%	9%	1%	2.29
I was taught to draft dependent claims.	26%	34%	26%	8%	7%	2.35
USPTO fees: Patent office does not charge extra for first twenty-claims.	26%	34%	24%	9%	7%	2.36
Dependent structure better supports foreign filing.	7%	19%	58%	11%	3%	2.84
Dependent claims are easier to draft and manage than independent claims.	6%	23%	37%	23%	11%	3.08
Client demands a certain number of claims.	6%	16%	29%	25%	23%	3.42
Dependent claims help avoid restriction requirements.	2%	13%	39%	31%	15%	3.44
A longer application is more valuable.	2%	13%	29%	34%	22%	3.60
					answered question	1029
					skipped question	0

Responses were also allowed to add additional reasons in the comment section. I have compiled a few of those individual responses below.

• Drafting Process: A few responses commented on the iterative process of drafting a patent. For some, drafting the dependent claims helps refocus and redefine potentially problematic terms from the independent claims. For many, the dependent claims also serve as a guide for fully drafting the specification.
• Prosecution Process: Some responses proposed that the dependent claims are helpful during prosecution for several reasons. First, there is a perception amongst patent practitioners that examiners read and consider the claim-set before looking at the actual specification. For that reason, the claims should be considered as a way to teach the examiner about the features and purpose of the invention.  For some, obvious limitations in a dependent claim are useful in that regard to show the examiner an intended use (practical embodiment) of the invention.  For those who see patent prosecution as a negotiation, a series of narrowing dependent claims speed up the the process — the applicant and examiner need only agree upon how narrow the claims need be.  Some propose at least some dependent claims being “super narrow” to serve as a “foot in the door” to increase the likelihood that there is at least some patentable subject matter.  Once you have agreed that a patent will issue, it may be easier to debate the scope of the eventual claims. On a practical note, the existence of dependent claims means that an applicant can get to a post-final rejection allowance without filing a request for continued examination. These practical concerns are important considering that the vast majority of patent applicants amend their claims during prosecution.
• Claim Differentiation: Most practitioners agreed that the claim differentiation benefit of dependent claims is important. The doctrine encourages courts to consider that each claimed element covers something different than the others. Pushing that line, a typical reasoning is that two or more dependent claims providing alternative implementations of a term from an independent claim will help ensure that the independent claim element is not limited to a single embodiment. Some folks quibbled with my statements regarding dependent claims “expanding scope” of other claims and instead used a more PC version of “aiding construction.”  It is important to realize that the originally filed dependent claims also form part of the specification and can thus help overcome enablement and written description hurdles.
• Appeasing Clients: Many inventors see their invention narrowly — as their particular embodiment. Dependent claims provide an easy way to satisfy the inventor’s desire to claim their invention without limiting legal rights. On this “politics” side — dependent claims also give reason to add joint inventors, which may be good for office politics. “An invention may only warrant one independent claim embodiment, but many clients like to see many claims. They believe the more claims they have the stronger the patent and that they are getting value for there money.So you add them, e.g., a blue widget, a red widget. It is like chicken soup for a cold, it can't hurt.”
• Ease of Analysis: “Filing dependent claims rather than only independent claims makes it much easier for several parties (attorneys prosecuting the application, examiners and the BPAI examining the patent, attorneys analyzing the issued patent, courts analyzing the issued patent) to more readily evaluate the differences and similarities of claims.”  Others noted that it is also useful as a way for potential licensees to know that the proposed product is literally and explicitly covered. For some patent owners, this “ease of analysis” is actually a negative. (Try to read NTP’s $600,000,000 claims). A long claim-set makes it more likely that a potential defendant will easily cave rather than pursue an expensive invalidity / noninfringement study.
• Capture “minor inventions”: Dependent claims allow an applicant “to capture improvements to the invention that are not important enough to justify a separate application, but that one would want to avoid having a competitor step in and patent something similar.”
• Tradition: There is nothing wrong with tradition and custom. It helps ensure that we’re all on the same page.  For many the 3/17 rule of independent/dependent claims serves as a default rule that can be adapted for unique circumstances.
• International: Internationally, patents use fewer independent claims than in the US. One European attorney made the following comment: “Multiple independent claims in the US style cause major headaches and costs in Europe, so one good independent, with well gradated dependents, is the best solution for me.”
• I will attach the full comments once reformatted.

New Counsel On Appeal Does Not Overcome Waiver of Novelty Argument

Golden Bridge Tech. v. Nokia and Lucent Tech. (Fed. Cir. 2008)

Golden Bridge’s patent covers a CDMA mobile communication scheme that gradually ramps-up the communication power signal in order to avoid interference with other mobile phones.  On summary Judgment, the E.D.Texas court held that Golden Bridge’s patent CDMA mobile communication scheme asserted claims were anticipated by the prior art.

Anticipation is a question of fact normally decided by a jury. However, it may be amenable to summary judgment “if the record reveals no genuine dispute of material fact.”

Waiver of Novelty Argument: On appeal, Golden Bridge argued that the prior art does not disclose a claimed synchronization element. That factual contention, however, was only first presented on appeal. Finding that Golden Bridge had ample opportunity to raise the contention at the district court level, the CAFC found that any appeal on the synchronization issue had been waived.

“There is no reason why Golden Bridge could not have raised the issue of whether the synchronization limitation was disclosed in the Häkkinen [prior art] reference during the summary judgment proceedings either before the magistrate judge or before the district court judge. . . Golden Bridge cannot simply choose to make its arguments in iterative fashion, raising a new one on appeal after losing on its other at the district court. This is an appellate court and as such we abide by the general rule that new arguments will not be decided in the first instance on appeal.

New Counsel: Golden Bridge argued that it should be given another opportunity to raise the issue because it had hired new counsel on appeal. The appellate panel quickly rejected that argument — holding that “[n]ew appellate counsel does not present an exceptional case or circumstance in which our declining review will result in injustice. To hold otherwise would open the door to every litigant who is unsuccessful at the district court to simply hire new counsel and then argue he should get to raise new issues on appeal.”

Not Fact Finders: Although not directed at any particular colleagues, Judge Moore’s opinion here strongly re-states the the limited role of the Federal Circuit as an appellate panel: “Appellate courts review district court judgments; we do not find facts. Middleton v. Dep’t of Def., 185 F.3d 1374, 1383 (Fed. Cir. 1999) (‘[A]s an appellate court, we may not find facts . . . .’).”

Notes:

• Based on a request by Nokia, the patent is concurrently under reexamination at the USPTO.

Anti-TrafFix: Design Patent Provides Evidence of Non-Functionality in Trade Dress Claim

In TrafFix Devices v. Mktg. Displays, the Supreme Court held that the existence of an expired utility patent covering a particular product design provides strong evidence that the design is “functional.”* Consequently, a party would be had-pressed to claim non-functional trade dress protection for the previously patented design. In Keystone Mfg. v. Jaccard Corp., the W.D.N.Y. federal court explored how trade dress protection is impacted by an expired design patent.

Expired Design Patent: Jaccard’s hand held meat tenderizer is covered by its U.S. Design Patent No. D 276,685. The design patent expired in 1998 – seemingly leaving an open avenue for direct copycat competition.  As part of a larger lawsuit, however, Jaccard asserted trade dress rights over its product.

Functionality: Jaccard argues that design patents should be treated as the mirror image of utility patents in a functionality analysis: If a utility patent creates strong proof of functionality, a design patent should provide presumptive evidence of non-functionality.

The district court rejected the suggestion that the design patent creates a presumption of non-functionality.  Instead, the court held that the design patent simply serves as another piece of evidence to be used by the jury in determining non-functionality. This conclusion comports with McCarthy on Trademarks:

“A design patent, rather than detracting from a claim of non-functional trade dress or trademark, may support such a claim . . . [W]hile a design patent is some evidence of non-functionality, alone it is not sufficient without other evidence.”

Curiously absent from this decision is any analysis of the populist notion that expiration of a patent transfers to the public a right to copy and use the patented elements.  

• * Although there are various definitions of functionality, in trade dress law the term generally refers to whether the element is essential for the product’s use or affects the cost/quality of the product. Only non-functional designs are protectable as trade dress.
• Keystone Mfg. v. Jaccard Corp., 2007 U.S. Dist. LEXIS 13094 (W.D.N.Y. Feb 26, 2007).
• There are several cases in conflict with Keystone Mfg on this point. Fuji Kogyo Co., Ltd. v. Pac. Bay Int'l, Inc., 461 F.3d 675 (6th Cir. 2006) (noting that a design patent serves as presumptive evidence of non-functionality).

 

Federal Circuit Jurisdiction Extends to Non-Patent Portion of Consolidated Case

Cytologix Corp. v. Ventana Medical Systems (1^st Cir. 2008).

CytoLogic filed two separate lawsuits against Ventana — alleging (1) patent infringement and (2) antitrust violations.  Both cases were managed by the same judge who held two trials. In a post trial order, the court stated that the cases had been informally consolidated and ordered that they be consolidated “nunc pro tunc.” CytoLogix appealed to the First Circuit (and also to the Federal Circuit).

The Court of Appeals for the Federal Circuit has exclusive jurisdiction over all appeals arising under the federal patent laws.  Here, the antitrust action did not arise under the patent laws. However, the First Circuit held that upon consolidation, jurisdiction for the case as a whole was at least partially based on the patent laws — thus providing the Federal Circuit with exclusive jurisdiction over the appeal.

Appeal dismissed.

• Note: The parties have subsequently settled.
• Cite: 513 F.3d 271.

A Theory of Dependent Claims

I am working on a post involving dependent claims and would like some thoughts from practitioners on why you file. The one-minute survey is anonymous.

Click on the survey — Preliminary results will be posted on Thursday, May 22.

Patently-O Bits and Bytes No. 35: Politics

• Senator Clinton on Patent Reform: Rough Quote ~ “I oppose anything in the bill that would hurt manufacturers.” [LINK]
• More Politics: Kevin Noonan Says “Bush Administration Continues Attempt to Destroy U.S. Patent System.”
• Chinese Generics: Via Pharmalot.
• Chinese Patents: More than 700,000 patent applications last year. Peter Zura says “Protection of design patents continues to be an untapped resource for foreign filers - the U.S. and other foreign entities make up about 5% of the 270,000 Chinese design patent applications.”  (NOTE: The 700,000 includes 270,000 design patent applications and 180,000 utility model applications). Read the SIPO (State IP Office of PRC) Stats. (Thanks to Hal Wegner for the tip).
• IPEG: New website for the European patent blog IPEG. http://www.ipeg.eu/blog/.
• NEW Patent Law Jobs:
  • Patent Attorney - Law Firm - Springfield, Mass.
  • Patent Attorney - Affinergy - Research Triangle North Carolina
  • Patent Associate - Law Firm - Seattle, Wash.
  • Patent Agent/IP Technical Specialist - Law Firm - Irvine, Calif.
  • Patent Attorney - Law Firm - Silicon Valley, Calif.
  • Patent Agent - Large Corporation - Dublin, Calif.
  • Patent Counsel - Johns Hopkins University - Baltimore, Md.
  • Patent Agent/IP Technical Specialist - Law Firm - Irvine, Calif.
  • Business Method Patent Attorney/Student - Remote
  • Patent Attorney - Law Firm - Austin, Texas

Inequitable Conduct: Failure to Submit Full Experimental Details

Aventis v. Amphastar Pharmaceuticals and Teva (Fed. Cir. 2008)

Summary: The CAFC affirmed a ruling that the Lovenox patents – owned by Aventis – are unenforceable due to a failure to submit important experimental information during prosecution.  In dissent, Judge Rader could not find clear and convincing evidence of intent to deceive the PTO.

Inequitable Conduct: The Aventis patents are directed toward a heparin based drug used to help prevent blood clots. The specification includes a particular set of experimental examples that show an increased half-life of the claimed admixture.  During prosecution, the applicant used those examples along with additional data to prove that its drug was inherently different from a prior art drug. 

Aventis did not report to the PTO that its experiments showing an increased half-life of the claimed admixture used a different dosage than those testing the prior art drug.  In a non-precedential 2006 opinion, the CAFC found the withheld information was material to prosecution — especially because Aventis argued that the benefit of the longer half-life was a potentially lower dosage. [non-prec decision].

By itself, a material omission does not render a patent unenforceable. Rather, a defendant must also show that the patentee acted with intent to deceive the patent office.  The district court found intent through circumstantial evidence, and the CAFC affirmed after failing to find any clear error in the way that the district court interpreted the facts.

Dissent: In a strongly worded dissent, Judge Rader argued that inequitable conduct should only be found in “extreme cases of fraud and deception.”  In particular, Judge Rader has seen that the intent requirement has lost its import as the court increasingly allows intent to be inferred from loose circumstantial evidence.

“More recently, however, the judicial process has too often emphasized materiality almost to the exclusion of any analysis of the lofty intent requirement for inequitable conduct. Merging intent and materiality at levels far below the Kingsdown rule has revived the inequitable conduct tactic.”

Here, Judge Rader argues that there is also compelling evidence that Aventis did not intend to deceive the patent examiner. For instance, Judge Rader noted that that Aventis actually “submitted all of the underlying data to the patent office with [its] second declaration on June 9, 1994.”  Furthermore, focusing on the Aventis scientist who submitted the half-life studies, Judge Rader noted that his stellar reputation should also sway the court:

“I find it difficult to fathom that a scientist of Dr. Uzan's caliber and reputation would engage in such deception. As the district court points out, Dr. Uzan has had a magnificent fifty year career with Aventis, has published over 350 scientific articles and has received numerous prestigious awards including the Galien Research Prize, France's highest award for drug discovery. This world-class scientist would hardly risk his reputation and tarnish his brilliant career for a single example in the prosecution of a patent for an invention in which he was not even involved.”.

Result: The direct narrow result of this case is that patent applicants should clearly state experimental differences when comparing a claimed compound or method with the prior art.  More broadly, this decision creates yet another reason for applicants to favor short & clean prosecution. It also emphasizes the importance of using a patent attorney or agent that truly understands the science behind each submission.

Federal Circuit: State of the Court

On May 15, 2008, Federal Circuit Chief Judge Michel presented his “State of the Court” address at the well attended Federal Circuit Judicial Conference.  As usual with the Chief Judge, his remarks were upbeat but unsatisfied.  Several particular issues were emphasized:

• Aging of the CAFC Judges: Within two years, eight of the twelve regular active CAFC judges will be eligible for senior status. 
• Settlements: About half of all CAFC appeals settle prior to decision.
• Speeding Up: “Expedition is a top priority.” Median time from docketing to disposition was nine-months for FY07. The current inventory of cases is now just over six months.
• More Clerks: Judge Michel has requested a fourth law clerk for each judge to keep up with the complexity of the appeals.
• En Banc and Supreme Court Review: Continue to be exceedingly rare. “Despite news reports of a surge in the last three years in the Supreme Court review of our patent cases, the data shows little change. I believe these data illustrate how well our panels do in nearly all appeals. We can all be proud of the work of the Federal Circuit.”
• Read the remarks. Judge Michel’s charts are reproduced below. (Click to expand).

 

 

 

 

 

 

Phillips Claim Construction: Changed Methodology but Unchanged Results

Mangosoft v. Oracle (Fed. Cir. 2008)

Mangosoft’s patent covers a networked virtual memory system. The virtual memory is formed by pooling storage capacity on the local networked computers (nodes) rather than relying on a primary server.  Oracle’s Real Application Clusters do something similar – but use a cluster of memory devices (akin to a RAID).

The appeal focuses on the definition of a “local” storage device.  The CAFC agreed with the district court that the “local” limitation requires that the storage device be individually linked to a computer to form a network node.

Here, the district court had relied on a technical dictionary for its definition (in a pre-Phillips opinion). On appeal the CAFC again affirmed that dictionaries are still useful in claim construction. More particular to this case, however, the court found that virtually any system of claim construction would reject the patentee’s proposed broad construction.

“Having found support for the district court’s claim construction in the claim language, the specification, and the prosecution history …, we note that this construction is also consistent with the technical dictionary definition proffered by Oracle.”

Summary judgment of non-infringement is affirmed.

This case could be seen to emphasize the point that for the majority of claim construction decisions, Phillips altered the methodology but not the ultimate result. 

Notes:

• Mangosoft had originally sought $500 million in damages from Oracle.

 

 

CAFC Gives Patentee Leeway in Claiming Priority and Correcting PTO Mistakes

E.I. du Pont v. MacDermid Printing (Fed. Cir. 2008).

Rapid Appeal: The first thing that is surprising about this opinion is the quick decision pace. The N.J. district court denied DuPont’s preliminary injunction on August 13, 2007. The CAFC heard oral arguments on April 9, 2008 and then issued its precedential opinion on May 14, 2008. The decision time is well under half of the average in-process time for precedential CAFC opinions. Knowing that, it is not surprising that the opinion was written by Chief Judge Paul Michel and included CIT Judge Pogue sitting by designation. One of Judge Michel’s top priorities as Chief is to speed the appeal process and help avoid serious detriment caused by delay.

Summary: The CAFC vacated a lower court’s denial of preliminary relief — finding that the lower court had improperly refused to recognize DuPont’s patent priority claim to an earlier provisional application.

Claiming Priority: DuPont first filed a provisional application; followed eleven months later by a non-provisional utility application claiming priority using non-standard language. (“This application is a non-provisional of provisional 60/273669 2001-03-06 WHICH IS PENDING.”) The issued patent did not reference the original provisional until after DuPont obtained a certificate of correction.  To complicate the matter, DuPont’s litigation counsel originally made “incorrect statements as to the priority date” — apparently forgetting the legal effect of a provisional application.

35 U.S.C. § 119(e)(1) provides four requirements to claim priority to a provisional application:

1. The provisional must adequately disclose the claimed invention;
2. The non-provisional must be filed within 12–months of the provisional;
3. Inventorship must overlap; and
4. The non-provisional must include a specific reference to the provisional.

Overlapping Inventorship: The specification of the provisional and non-provisional were identical. However, the provisional named only one inventor while the non-provisional named five. The defendant here argued that the provisional application should have been amended to properly identify the five inventors. On appeal, the CAFC rejected that argument in two steps: First, the appellate panel held that – as a matter of law – inventorship overlaps when both applications include at least one common inventor. Second, the panel re-affirmed that correction of inventorship for a provisional application is only necessary to establish an overlap of inventorship. See MPEP § 201.03. 

Specific Reference to the Original: DuPont used non-standard language in the non-provisional application data sheet (ADS) to claim priority to the provisional. On appeal, the CAFC held that there are no “magic words” required by MPEP § 201.11.  Rather, the standard is whether a “reasonable person reading the language … would have concluded that the applicant was claiming priority to an earlier provisional application.”  There is no question here that the language used by DuPont conveys the proper message.

Notice of PTO Error: The prosecution history included evidence that the PTO did not originally recognize DuPont’s priority claim. MacDermid argues that once an applicant is on notice of a PTO error — it should be required to ensure that the error is corrected before the application issues. In essence, MacDermid argues that the error in failing to reference the provisional in the originally issued application was DuPont’s error because the company was on notice of the PTO mistakes. On appeal, the CAFC rejected the notion that an applicant’s failure to diligently prosecute converts a PTO error into an applicant error.

“We hold that a lack of diligence during prosecution, at least under the facts of this case, does not convert a PTO error into an applicant error for the purpose of seeking a post-issuance certificate of correction. . . . It is, of course, desirable to have applicants correct the PTO’s mistakes in pending applications as soon as possible so that the correct information is reflected in published applications and issued patents. Nevertheless, nothing in the statute conditions eligibility for a certificate to correct PTO error on the applicant’s diligence in correcting the mistake, and the statute does not set any time limit for seeking such corrections.”

Vacated and Remanded

Patently-O Bits and Bytes No 34: PPAC

• PPAC Nominees: Due by May 30. Three new PPAC members will be appointed by the Secretary of Commerce for a three year term. [LINK]
• Design Patents on Automotive Parts: Perhaps the most controversial subject matter for design patents involve automotive parts.  Many of the car companies are using design patents to help ensure that body shops use “authorized” parts when repairing a crash-damaged vehicle. Deputy Director Peterlin is looking for input from folks on the issue. [LINK]
• PTO web-site may be down until sometime May 15. www.uspto.gov. (UPDATE: Partially working again)

Patent Infringement Claim Preclusion: Only When Accused Device is "Essentially the Same" as Prior Adjudicated Device

Acumed v. Stryker 07–1115 (Fed. Cir. 2008)

Acumed and Stryker have been battling for years over patented orthopedic surgery equipment.  The original suit ended with a final judgment in April 2006 for Acumed. This second suit, filed in May 2006, alleges that one of Stryker’s new orthopedic nails infringes the patent.  The new version (named T2) was developed and put on the market during the original litigation, and Acumed deliberately chose not to include allegations against that product for fear of delaying the first trial.

The Oregon federal district court dismissed Acumed’s second lawsuit – finding the claim precluded by the prior judgment on the merits.

On appeal, Acumed successfully argued that its second infringement action is not precluded by the first action even though (1) the original action was concluded by a final judgment on the merits; (2) the parties and patents of the second suit are identical to those of the original suit; and (3) Acumed was in a position to assert infringement against T2 in the original suit but consciously chose not to pursue an infringement claim against T2. 

Claim Preclusion: Following a final judgment on the merits, claim preclusion binds parties from re-litigating the merits presented and also from raising “any other admissible matter which might have been offered” on the merits.  Although the particular elements of claim preclusion may vary, the Ninth Circuit finds preclusion only when the original litigation was terminated by a final judgment on the merits and second action has the same parties or privies as the original and the same claim or cause of action.

Taking a narrow view of “same claim or cause of action” – the Federal Circuit held that in patent law, claim preclusion can only be found where the accused products in the two actions are “essentially the same.”

‘[C]laim preclusion does not apply unless the accused device in the action before the court is "essentially the same" as the accused device in a prior action between the parties that was resolved by a judgment on the merits… Accused devices are “essentially the same” where the differences between them are merely “colorable” or “unrelated to the limitations in the claim of the patent.”…Finally, the party asserting claim preclusion has the burden of showing that the accused devices are essentially the same.’ 

In its opinion, the court rejected a “could have” defense — instead holding that “claim preclusion does not bar a claim merely because it could have been raised in a prior action between the parties that was resolved by a final judgment on the merits.”  Along this same line, a patentee therefore does not lose rights by filing suit against only some of an accused infringer’s products (because “two claims for patent infringement do not arise from the same transactional facts unless the accused devices in each claim are ‘essentially the same’”).

Stryker admitted that the T2 was not essentially the same as its prior product — thus eliminating any possibility of claim preclusion. Stryker’s admission is the result of a tough litigation decision. To win on claim preclusion, it must argue that the new product is the same as the old product. However, if it did not win on claim preclusion, that argument would place the defendant’s non-infringement argument in serious peril. 

Notes:

• As the court noted, claim preclusion refers to a legal action rather than a patent claim.
• 2006 Acumed appeal on claim construction

 

Patently-O Bits and Bytes No. 33: Supreme Court

• Patentable Signals at the Supreme Court: In Nuijten, the CAFC held that transitory propagating signals are not patentable subject matter because they do not fit within any of the four statutory invention categories of “process, machine, manufacture, or composition of matter.” Now, Nuijten has petitioned the Supreme Court for certiorari in a case captioned Nuijten v. Dudas. The petition focuses on the CAFC’s decision that arguably requires patentable inventions be (1) tangible; (2) non-transitory; and (3) measurable without “special equipment.” [Petition][About Nuijten]
• Design Patents at the Supreme Court: In Calmar v. Arminak, the design patent holder is asking the Supreme Court to reverse the Federal Circuit’s narrow infringement analysis. ISDA has filed an amicus brief arguing that the CAFC’s application of the “ordinary observer” test improperly excludes the most natural ordinary observer – a retail customer. [Brief][About Calmer]
• These two pending Supreme Court petitions are both important and well argued.  The fact that they are well presented also makes it more likely that the follow–on cases of Bilski and Egyptian Goddess will receive attention from the Supreme Court.

RIM v. NTP Continues to Trouble Patent Office

Although NTP v. RIM settled years ago, the PTO’s reexamination of NTP’s patents have continued to plod along. In the background are allegations by NTP that PTO officials improperly (and covertly) met with RIM CEO Jim Balsillie and other RIM representatives regarding the ongoing (ex parte) reexaminations.

During ex parte reexaminatoin, third-party communications are strictly forbidden.  It is clear, however, that in the months leading up to the NTP settlement, the PTO was feeling a tremendous amount of political pressure from RIM as well as Congress and the Senate.

Now, Congressman Howard Berman has demanded information from the PTO regarding these meetings “hand-delivered” by “May 19, 2008.”

“Did this meeting [with Balsillie and counsel] take place? What was discussed at this meeting? What is the USPTO’s policy concerning ex parte communications between senior USPTO officials and parties who have an interest in the outcome of proceedings before the office? In what other instances, if any, did senior USPTO officials engage in similar ex parte communications with parties that had an interest in the outcome of a proceeding being conducted before the Office?”

Hopefully the Office will be able to provide Chairman Berman with a tidy set of evidence to clarify the rules and exactly what happened.

Documents:

• NTP’s Allegations (8 MB) Check out pp 74+ and also pp 61 – 74.
• Time Article by Daren Fonda.
• Thanks to Hal Wegner and Greg Aharonian for the tip.

US Court Refuses to Stay Pending Outcome of Parallel Canadian Inventorship Litigation

Wyeth v. Dr. Wolfe, 08-0754 (E.D.Pa. May 8, 2008)

Dr. Wolfe holds a patent on a low dose progesterone therapy.  Wolfe and Wyeth worked together for several years to bring Wolfe’s product to market. Later, Wyeth filed at least one similar patent application without listing Wolfe as an inventor. As a Canadian, Wolfe filed suit in Canada requesting that he be listed as the inventor and also requesting compensation for breach of contract, etc.

Wyeth then filed a declaratory judgment action in the Eastern District of Pennsylvania.

On May 8, the court denied Wolfe’s motion to stay the later-filed US proceedings. Without going into the merits of the stay or any patent specific law, the court looked to its own precedent holding refusing to stay where the foreign litigation is still “in its incipiency.” 

“Here, the Canadian actions are not far enough along in the process to warrant a stay in this Court. In the case filed in the Ontario Superior Court of Justice, there is a pending Motion to Dismiss, which that Court will not rule on until June 25, 2008. Similarly, the case filed in the Federal Court of Canada is also in its beginning stages. While some evidence has been submitted on the matter, the case has not yet been scheduled for hearing. Thus, it is unlikely that either Canadian case will soon be resolved. Staying the proceedings in this Court would, therefore, only serve to delay the progress of this action. As such, the Court finds that a stay in this Court is inappropriate at this time.”

Parallel US & foreign patent litigation is an increasingly common occurrence.  In addition to the cost, these cases raise important issues of inconsistent application of laws.

CAFC Hears En Banc Bilski Case

May 8th’s en banc oral arguments in Ex parte Bilski reveal a court clearly grappling with the difficult problem of defining the scope of patentable subject matter in a way that is both administratively workable and supportive of future innovation and technology surges.  The Federal Circuit’s leeway is limited by Supreme Court precedent. The en banc panel notably focused on Diamond v. Diehr, 450 U.S. 175 (1981), and the meaning of “transformation.” 

Hitting upon an argument found in several amici briefs, the court questioned whether the statutory limits of Section 101 are necessary at all — given the administrability of Sections 102, 103 and 112. No counsel presented clear “harms” of an overbroad interpretation of a statutory “process.” (The potential issues were best described in Prof Sarnoff’s brief.)

Notes:

• Listen to the oral argument in the en banc hearing of In re Bilski here for Part One and here for Part Two.
• Economist.com
• Quinn

Tea leaves (FWIW):

• PTO’s decision will be affirmed by shaping the facts (e.g., by calling the invention an abstract idea).
• State Street will not be overruled.
• The court will not implement a “machine test.”

Tafas v. Dudas: PTO Announces its Intent to Appeal

The Patent Office has filed a notice of appeal in the case of Tafas v. Dudas. This case involves the PTO’s attempt to limit the number of continuation applications and the number of claims per patent that may be filed based on an original disclosure.  In April, 2008, District Court Judge Cacheris granted plaintiffs motions for summary judgment — finding that the new rules are an improper extension of the PTO’s statutory authority.

“Because the USPTO’s rulemaking authority under 35 U.S.C. § 2(b)(2) does not extend to substantive rules, and because the Final Rules are substantive in nature, the Court finds that the Final Rules are void as ‘otherwise not in accordance with law’ and ‘in excess of statutory jurisdiction [and] authority.’ 5 U.S.C. § 706(2).”

The appeal will be heard by the Court of Appeals for the Federal Circuit.  The basis of the original declaratory judgment action is that the PTO’s proposed rules violate the PTO’s limited rulemaking authority granted by 35 U.S.C. § 2(b). Thus, there is no question that this case arises under the Patent Act and, consequently, that the Federal Circuit has exclusive jurisdiction on appeal.

Notes:

• PTO Notice of Appeal.
• Patently-O Discussion of the April 1 decision.

John McCain and Patents

John McCain today announced the members of his “Justice Advisory Committee” — a group of fifty leading attorneys and law professors in the country.

Members include Ed Reines who is president of the Federal Circuit Bar Association and a senior partner at Weil Gotshal; Professor John Duffy who will be arguing later this week in the en banc Bilski case; Professor Michael Abramowicz who has written several articles about patent law and most recently proposed an auction system for extending patent terms; and Professor Eugene Volokh of the Volokh conspiracy. Chuck Fish, former Chief Patent Counsel at Time Warner, is apparently working full-time for the campaign. 

This is a very strong group that tends to provide solid, practical advice. I speak with some experience – having received advice from each of these members about various aspects of the law.*

Notes:

• * Prof Volokh’s advice came from his book.

 

Canons of Claim Construction: Cancelled Claims Narrows Construction for Asserted Claims

PSN Illinois v. Ivoclar Vivadent, et al. (Fed. Cir. 2008)

PSN’s patent claims a method of making porcelain veneers. PSN sued fourteen companies for infringement, most of whom settled early. The remaining defendants successfully argued that their veneer process was non-infringing.

On appeal, the CAFC looked at claim construction. In a passing breath, the court made the distinction that Phillips applies to “undefined” claim terms:

“We determine the ordinary and customary meaning of undefined claim terms as understood by a person of ordinary skill in the art at the time of the invention, using the methodology in Phillips v. AWH Corp., 415 F.3d 1303, 1312-19 (Fed. Cir. 2005) (en banc).”

Here, the court needed to determine the meaning of the undefined term “ready for mounting.” Relying upon the patentee’s use of the word ‘MAY’ in describing the claimed process, the CAFC held that the term should be rather broadly construed to optionally include ‘finishing’ steps. (Specification: “While still on the statue, the veneer casing may be subject to a finishing treatment to improve the esthetics.")

The appellate panel noted that, within reason, claims should normally be construed to cover the described embodiments. The panel cautioned however, that each claim does not necessarily cover each embodiment. To the contrary, in some cases unasserted or cancelled claims directed to a particular disclosed embodiment may actually serve as evidence that the scope of remaining asserted claims does not extend to that embodiment.

“[C]ourts must recognize that disclosed embodiments may be within the scope of other allowed but unasserted claims. Likewise, during prosecution, an applicant may have cancelled pending claims but not amended the specification to delete disclosure relevant only to the cancelled claims. In such cases, unasserted or cancelled claims may provide ‘probative evidence’ that an embodiment is not within the scope of an asserted claim.”

Here, although the CAFC reversed on claim construction, it still found that summary judgment of non-infringement was proper.

Patently-O Bits and Bytes No. 32: Patent Law Jobs

• IP for Wireless & New Media: The World Research Group (WRG) is hosting its The 2nd Annual Summit on Intellectual Property for Wireless Tech & New Media — June 17–18 in San Francisco. It appears to be a great conference both for networking and for learning about IP strategy & IP practice.  The conference is expensive, but we have a $300 discount for Patently-O readers (Code: SMS775). www.worldrg.com/ip. WRG has become a “Media Partner” with Patently-O Jobs.
• Recent Patent Law Jobs:
  • Patent Agent - Large Corporation - Dublin, Calif.
  • Patent Counsel - Johns Hopkins University - Baltimore, Md.
  • Patent Agent/IP Technical Specialist - Law Firm - Irvine, Calif.
  • Business Method Patent Attorney/Student - Remote
  • Patent Attorney - Law Firm - Austin, Texas
  • Paralegal - Law Firm - Seattle, Wash.
  • Patent Attorney/Agent - Law Firm - Tysons Corner, Va.
  • Patent Attorney/Agent - Law Firm - Seattle, Wash.
  • Patent Counsel - Large Corporation - San Diego, Calif.
  • Chemistry Patent Attorney/Agent - Small Corporation - San Francisco, Calif.

Purchasing Canadian Drugs & Patent Infringement

In the recent Litecubes case, the Court of Appeals for the Federal Circuit (CAFC) held that a product may be considered “sold” in the US even though title is transferred abroad.  [Background] A broad restatement of the court’s focus is that the sale is “within the United States” whenever the selling act would be sufficient to create personal jurisdiction over the accused infringer.  That conclusion is bolstered by the CAFC’s continued reliance of personal jurisdiction cases in its analysis.

One astute Patently-O comment by patent attorney Paul Morgan queried whether Litecubes could open the door to patent infringement litigation against Canadian pharmacies who sell to US customers who cross the border to purchase cheaper drugs.  There are some strong parallels between Litecubes and the pharmacy example that should give some reason to believe that such a lawsuit has some merit — especially if Canadian drug sellers knew they were selling to US nationals for transport back to the US. However, direct infringement would be a stretch from the facts of Litecubes:

“Since the American customers were in the United States when they contracted for the accused cubes, and the products were delivered directly to the United States, under North American Philips and MEMC there is substantial evidence to support the jury’s conclusion that GlowProducts sold the accused cubes within the United States.”

Litecubes focused on the issue of direct infringement.  Canadian sellers might alternatively be liable as indirect infringers under theories of inducement and/or contributory infringement.

Some have suggested that the a patentee should not be allowed to block importation of drugs that the patentee sold abroad.  I.e., if Pfizer sells Lipitor in Canada at a low price, the patentee should not be allowed to control the downstream free market — even if the result is US imports that undercut the company’s US price.  In patent lingo, this follows the theory of patent exhaustion.  However, US Courts have made clear that a patentees foreign sales do not exhaust its US patent rights.*

This type of case may never come to pass. However, that result may be more due to politics and difficulties in detection and enforcement rather than a lack of a strong legal case.

Notes:

• Patent Exhaustion is currently being considered by the Supreme Court in a case titled Quanta v. LGE.
• * Jazz Photo v. ITC, 264 F.3d 1094 (Fed. Cir. 2001), cert. denied, 536 U.S. 950 (2002)("United States patent rights are not exhausted by products of foreign provenance. To invoke the protection of the first sale doctrine, the authorized first sale must have occurred under the United States patent.").

Forging A Patent Document

18 U.S.C. § 497 creates a the felony crime of forging a patent document. According to the statute:

“Whoever falsely makes, forges, counterfeits, or alters any letters patent granted or purporting to have been granted by the President of the United States; or Whoever passes, utters, or publishes, or attempts to pass, utter, or publish as genuine, any such letters patent, knowing the same to be forged, counterfeited or falsely altered--

The punishment is “not more than ten years” of federal prison.  I was unable to find any reported decisions that apply or even interpret Section 497.  Unlike the marking statute, there is no provision that would allow a private action against under this statute. 

A general fraud claim would create standing for a civil action. However, the plaintiff would need to show particular harm — unlike a Section 292 plaintiff.

Patently-O Bits and Bytes No. 31

• In re Volkswagen(5^th Cir. en banc). A self-titled “ad hoc committee of intellectual property trial lawyers in the Eastern District of Texas” have filed a brief in the pending VW case arguing on the substance that the E.D.Tex. courts do not excessively retain cases in a way that is any different from other jurisdictions.  The AIPLA amicus brief in the same case argues that too many cases are being heard in Texas. [Trial Lawyer Brief] [More Info].
• The non-profit IP Hall of Fame is asking for nominations for inductees in the 2008 IP Hall of Fame.  The award is designed to honor individuals who have made significant contributions to today’s Intellectual Property System. www.iphalloffame.com. The award will be limited to five inductees this year. A couple of notes: (1) The Hall of Fame is non-profit, but sponsored by the for-profit IAM-Magazine. (2) I am a member of the Hall of Fame Academy and will vote on the inductees. (Being on the academy is different from being an inductee).
• John Doll (Commissioner for Patents) will be taking questions on May 13 (11:00 am CST) as part of a webinar sponsored by Kirkpatrick & Lockhart. It appears that you must pre-register for this FREE event. LINK.
• While much of the proposed patent reform legislation has been directed toward easing pain felt by major corporations being sued for patent infringement, one proposed measure would move inequitable conduct issues to the PTO for a decision. NY Times discussed this last week as a battle between Innovator and Generic Pharma – with the lobbyists winning. [LINK]
• USPTO Publishes Common Application Format for EPO and JPO  [Via IP/Updates]
• Pfizer's Lipitor '893 Patent Survives Reexamination [Via Patent Docs]

CAFC Rejects Patent on Invention to Overcome the Second Law of Thermodynamics

In re Speas (Fed. Cir. 2008)

In a short non-precedential opinion, the CAFC affirmed the PTO’s rejection of Speas patent application as both non-enabled and lacking utility. The application claims:

"all devices and systems which operate in such a manner as to violate the second law of thermodynamics as it is currently understood.”

The CAFC briefly described operation of an embodiment:

‘According to the specification, the invention raises a ferrofluid out of a reservoir by a magnetic column into a mass. The ferrofluid then escapes a "gradually decreasing magnetic field which holds it up against gravitational force" and is drawn away via tubular element by a capillary force aided by Brownian motion. At the end of the tubular element, drops of this ferrofluid accumulate and drop back into the reservoir below, spinning a wheel along their downward paths. Thus, the movement of the ferrofluid imparts mechanical energy upon the wheel. Speas claims that because this ferrofluid is moved and adds energy to the paddle wheel "without input into the system other than ambient thermal energy," it is proof that the second law of thermodynamics is not inviolate – an object of the invention.’

Notes:

• Although this type of case is fun to read, it also provides an interesting lesson — that the patent office has tools to reject inadequate patent applications on their merits without resorting to broad exclusions of particular subject matter. 
• Speas is the inventor of several issued patents covering more practical applications such as an internal combustion engine and an adjustable bicycle drive mechanism. His home of record is in the town of Haiku on the island of Maui.

False Marking

A US patentee can only recover damages for patent infringement activity that occur after the infringer is “notified of the infringement.”  35 U.S.C. 287(a). The major exception to this limit on damages is through marking of goods. Goods that are properly marked as protected by a particular patent serve as a constructive notice to the world that the item is patented. Id.

Although marking serve as a benefit, the patentee must also be wary of statutory false marking. Under 35 U.S.C. 292, false marking includes marking unpatented product as “patented” or marking a product as “patent pending” when no patent is pending. These false marking activities are only actionable if done “for the purpose of deceiving the public.”

Section 292 is a criminal provision with only a monetary penalty - usually payable to the government.  The statute also spells out a qui tam right for “any person” to sue for false marking. One-half of any damages would then be awarded to the civil plaintiff, and the US Government collects the other half. Damages are limited to “not more than $500 for every such offense.” Some courts* appear to interpret “every such offense” broadly. Thus, for example, 100,000 mislabeled cups, would be seen as 100,000 offenses. The text from Section 292 has remained remarkably fixed since the Patent Act of 1870 the primary differences being that the old statute included a minimum penalty of $100 per offense and used the word “moiety” instead of “one-half.”

Recently, a Washington DC patent attorney, Matthew Pequignot, filed at least two Section 292 lawsuits in the Eastern District of Virginia alleging false marking. These include Pequignot v. Solo Cup and Pequignot v. Gillette and P&G.

In the first case, Pequignot alleged that Solo Cup marks its paper products with patents that had expired more than ten years ago. In a motion to dismiss, Solo Cup argued that marking with an expired patent cannot be considered false marking. Furthermore, the defendant argued, it should not be held liable because the markings were written in the tentative voice: indicating that the products “may be covered” by various patents.

Holding: Judge Brinkema denied Solo Cup’s motion to dismiss, holding: (1) that, as a matter of law, listing of expired patents may constitute false marking; and (2) the use of permissive language (“may be covered”) in the marking does not create a safe harbor against liability for patent marking. In his Treatise, Don Chisum addresses this point — finding “little authority on whether continued use of a patent number of an article after expiration of the patent constitutes culpable mismarking.”

The complaint against Gillette and P&G similarly lists over thirty products being marked by those companies with expired patents or patents that do not cover the marked product.

Documents:

• File Attachment: Pequignot v. Solo Cup Decision (2667 KB)
• File Attachment: Pequignot v. Gillette Complaint (376 KB)
• Section 287(a) reads as follows: “In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice.”
• * Updated to add my own permissive language of “some” courts.