Patent Law Blog (Patently-O)

Changing the USPTO Count System: Incrementally

USPTO Director David Kappos has announced a set of proposed changes to the patent examiner count system. The proposed changes are not dramatic, but they may have some incremental benefit of reducing RCE churning (see below). The proposal also provides for an additional hour of examination time per case with the expectation that the added time will be used up-front in an interview or in preparing a quality first office action on the merits (FAOM).

The Count System: Under the current count system, examiners receive "counts" for various actions and must meet a certain quota every two-weeks. (The quota varies according to art unit and examiner grade.) Under the rules, one count is awarded when the examiner issues an initial office action rejection and a second count is awarded when the case is disposed-of. Because no counts are awarded for second or subsequent office action rejections, the current system is supposed to encourage examiners to quickly move a case to its conclusion.

RCE Churning: When an applicant files a request for continued examination (RCE), the examiner receives a count as a disposal. At that point, the current count system treats the application as new - thus the examiner can receive a second count for mailing another office action rejection and one more count for eventually allowing the application to issue as a patent. Thus, by "forcing" the RCE, the examiner receives four counts instead of only two. (Note - "Forcing" is in quotation marks because examiner's do not actually applicants to file RCEs.) A similar practice takes place with restrictions where the examiner pushes an applicant to divide a single patent application into multiple applications. In that scenario, the examiner can at times earn multiple counts for reexamining what are essentially identical inventions.

The proposed package would make some modifications - focusing especially on RCE practice. Under the proposal, the first RCE would only be worth 1.75 total counts (rather than 2) and any subsequent RCE can only be worth 1.5 counts. Examination of the original application would still be worth the same 2 counts, but the distribution is slightly shifted. Under the proposal, the first office action on the merits (FAOM) would garner 1.25 counts; a final rejection earns 0.25 counts; and eventual disposal leads to 0.5 more counts. If no final rejection is issued, then the disposal would be worth 0.75 counts. Thus, examiners will still receive credit for examining RCE's - just less credit than before. The proposal does not appear to address the restriction practice.

Encouraging substantive interviews: The proposal would also regularly grant one-hour of "non-examining time" for preparing for and conducting interviews. This would effectively reduce the examination quota of examiners who conduct interviews.

Examiner Mistakes: The PTO management appears to have come to an agreement with the examiner union POPA on these reforms, although the membership will still be asked for their approval. Interestingly, the documents distributed by the joint task force appears to show some changes on the review of examiners for mistakes in office actions. Notably, the proposal would not allow an examiner to be negatively treated "based upon a single clear error in Patentability Determination" even if the examiner has already received a warning for prior mistakes.

The proposal also includes a new "formal policy" of "working on the earliest filed applications on [an examiner's] Regular New Case docket first." This would block the game played by some examiners of cherry picking easier cases to examine earlier.   

Documents: briefing_for_corps_final_draft-093009.pdf

Claim Construction: A Structured Framework*

Guest post by Professor Peter S. Menell (UC-Berkeley School of Law); Matthew D. Powers (Weil, Gotshal & Manges LLP); and Steven C. Carlson (Fish & Richardson PC) 

The construction of patent claims plays a critical role in nearly every patent case. It is central to evaluation of infringement and validity, and can affect or determine the outcome of other significant issues such as unenforceability, enablement, and remedies. Yet jurists and scholars have long lamented the challenges of construing patent claim terms. The Federal Circuit's en banc decision in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005), stands as the most authoritative decision on claim construction doctrine. But while putting to rest various controversies, many core tensions in claim construction persist. Moreover, the decision itself does not provide a step-by-step approach to construing claims. This commentary provides a structured road map.

Bilski Briefing: Government Argues that Section 101 "Processes" are limited to "technological and industrial processes."

Bilski v. Kappos (Supreme Court 2009) 08-964bsUnitedStates.pdf

In its responsive brief, the Obama Administration asks the Supreme Court to confirm that a patentable process must be tethered to technology - either "directed to the operation of a particular machine or apparatus" or "involve the transformation of matter into a different state or thing."

Interpreted in light of the historical scope and development of the patent laws, as well as the statutory context, the term “process” encompasses all technological and industrial processes, broadly conceived. But it does not extend patent-eligibility beyond those bounds, to methods of organizing human activity that are untethered to technology—e.g., methods by which people conduct economic, social, or legal tasks, such as entering into contracts, playing poker, or choosing a jury. Such methods fall outside of the broad expanse of technological and industrial fields that “the statute was enacted to protect.” Parker v. Flook, 437 U.S. 584, 593 (1978). Because petitioners’ hedging method relates solely to human conduct, untethered to any technology—any machine or transformation of matter—it falls outside the coverage of Section 101.

. . .

This Court has long recognized that the distinguishing feature of a technological process is that it concerns a particular machine or apparatus or effects a transformation of matter to a different state or thing.

Although Bilski's claim does not relate directly to software, the machine-or-transformation could be seen to limit the patentability of software processes acting on a general purpose computer (as opposed to a "particular machine"). The Government brief suggests that the Federal Circuit test leaves software substantially patentable when tied to a general purpose computer - citing favorably to In re Alappat, 33 F.3d 1526, 1545 (Fed. Cir. 1994) (en banc) (“[A] general purpose computer in effect becomes a special purpose computer once it is programmed to perform particular functions pursuant to instructions from program software.”).

In any event, the machine-or-transformation test contemplates that many forms of “software” inventions are patent-eligible. . . . [However,] software code that is claimed by itself, uncoupled from any storage medium or computer, may be nothing more than “an idea without physical embodiment,” and therefore would not be patent-eligible.

Here, the brief did not address the reality that a software process can be "technological and industrial" without be limited in its association to a particular computer.

As a fall-back, the Government appears to suggest an additional exception to the patentable subject matter test for "methods of organizing human activity."

Methods of organizing human activity are not patent-eligible “process[es]” within the meaning of Section 101.

The brief spends a considerable amount of time focusing on the statutory interpretation on the word "process" and its predecessor "useful arts" - paying special attention to provide an originalist style analysis. Here, the government attempts to show that finance (i.e., business methods) were not originally considered useful arts. Additionally, the government argued that even though tremendous advances took place in finance and insurance industries during the 18th and 19th centuries, those innovations were not traditionally patented.

In sum, because the initial patent statutes were intended to foster the “useful arts,” they were directed to technological and industrial inventions, as opposed to fields of purely human activity—including financial and economic activity unconnected to technology—which fell within the sciences or liberal arts.

Amicus briefs in support of the government position are due this Friday.

Bits and Bytes No. 131

• IP Czar: George Mason visiting professor Victoria Espinel has been selected as the IP Enforcement Coordinator for the Administration - known as the IP Czar. The role will likely be more focused on international trademark and copyright issues rather than patent law issues. Her nomination must be confirmed by the senate. [LINK]
• DC in DC: Next Thursday (1:30 p.m., October 1), I'll be the opening speaker in GWU's IP Speaker Series. My presentation considers the proposed first-to-file legislation and includes a new set of data the (low) frequency that applicant's attempt to rely on their invention date during prosecution. The talk is open to GWU students, alumni as well as "friends." Other speakers include Edward Walterscheid (Oct. 27); Zahr Stauffer (Oct. 29); Joseph Miller (Nov. 5); and Chris Cotropia (Nov. 19). [LINK]

Using Reexaminations to Avoid Willfulness Damages

Most patents currently being reexamined at the PTO are also being litigated in parallel proceedings in district court. This rise in importance of parallel reexaminations leads directly to both Constitutional controversies and practical problems. Although the Federal Circuit has nimbly attempted to avoid the problem, the truth is that both the PTO (an Article II executive agency) and the Article III Courts focus on the same question of validity of patent claims. These races to conclusion raise questions of both separation of powers and res judicata.

A practical issue is raised by Microsoft in the i4i case relates to the relevance of non-dispositive reexamination events to the question of willful infringement. In Microsoft's case, the ex parte reexamination request was initially granted, and that grant was followed by a non-final office action rejection. On appeal, Microsoft argued that the PTO's rejections of i4i's claims on obviousness grounds should result in a per se finding that its its infringement defenses were not objectively reckless. Rather, according to Microsoft, the PTO's grant of reexamination and non-final rejection at least serve to prove that its defenses were credible. i4i argues on the other side that the non-dispositive reexamination events are irrelevant because of the different standard for review, different claim construction approach, and lack of finality.

At the Santa Clara Law School conference that I attended yesterday, one panelist made a seeming reasonable suggestion - that courts should begin to reexamination results once an applicant agrees to amend or cancel claims being asserted during litigation. At that point, it is a foregone conclusion that the resulting reexamination certificate will not confirm the patentability of those pre-amended claims.

BPAI Statistics

The Board of Patent Appeals and Interferences has seen a tremendous upswing in its workload over the past couple of years. The swing was largely triggered by the prospect of rules limiting the filings of requests for continued examination (RCEs). However, it appears that applicants and patent attorneys - who are now familiar with the process - are continuing to see appeals as a viable alternative even though the RCE limits appears dead-in-the-water. Of course, the appeals have also been driven by the increasing percentage of applications being finally rejected by examiners.

In a recent presentation, BPAI Chief Judge Fleming provided a useful survey of the "state of the Board." Highlights below.

• In FY2009, the BPAI is expected to have decided over 7,000 cases. That represents more than a 40% increase over FY2008.
• In addition, it is expected that over 15,000 cases will have been docketed to the BPAI in FY2009. That number is well over double those docketed in FY2008. This leaves an 'inventory' of about 12,500 cases.

In its current form, the BPAI cannot keep up with demand. By the end of FY2010, Judge Fleming expects the backlog to extend over 21,000 cases. The office currently has a three-prong approach to fixing the situation: (1) hiring more BPAI judges; (2) hiring more patent attorneys who essentially serve as law clerks, drafting opinions that are eventually approved by the Board; and (3) improving BPAI efficiency.

Notes:

View the presentation: bpai_092109.pps

Using Claim Terms and their Synonyms

Edwards Lifesciences v. Cook, Inc. (Fed. Cir. 2009)

The four Edwards patents all relate to internal blood-vessel grafts for treating aneurisms. The grafts are designed to be inserted endovascularly without the need for open surgery. After construing the claims, N.D. Cal. District Court Judge Jeffrey White granted summary judgment of non-infringement to the two defendants, Cook and Gore. On appeal, the Federal Circuit affirmed.

Lumpy Claim Construction: Patent claim construction serves as a prime example of how litigators can take a simple issue and make it quite complicated. For their part, judges are keen to limit the issues. A common approach in claim construction is to group similar claim terms together and give them identical meaning. In this case, the patent used the terms "graft," "graft body," graft structure", "bifurcated base structure," and "bifurcated base graft structure." Examining these terms, the appellate panel agreed that these terms could properly be analyzed together because the applicant had used them "interchangeably in the specification," at least with respect to the disputed differences.

This risk of synonymous meaning is not necessarily bad. Using various terms to describe the same idea helps to flesh out the detail and scope of the idea. However, in most cases, applicants would probably be better off emphasizing distinctions between similar terms. The distinctions may well be useful for ensuring varied claim coverage.

The point from this case is that the distinctions between similar terms must be explicitly emphasized if the applicant wants to have confidence that it can later rely on the differences.

Broadening Claims:During prosecution, Edwards seemingly broadened some of its claims by amending the "intraluminar graft" elements to simply "graft" elements. Despite that change, the court found that the specification's written description still required that all grafts be intraluminal.

Public Accessibility of Prior Art: PTO Must Provide Evidence of Indexing Date

In re Lister (Fed. Cir. 2009)

Lister is attempting to patent his method of playing golf that allows a player to tee-up each shot (except for hazards and greens). He filed his patent application in 1996. Two years prior, however, Lister had registered a copyright on his manuscript describing the game (acting pro se).

Based on the copyright submission, the examiner rejected the application as anticipated under Section 102(a) and barred under Section 102(b). The Board, however, eliminated the Section 102(a) rejection because "[Dr.] Lister could not have disclosed his own invention before he invented it." However, the board did agree that manuscript's availability at the copyright office did constitute prior publication under the statutory bar of Section 102(b). The touchstone for publication under Section 102(b) is public accessibility.

[The Board] concluded that an interested researcher would have been able to find the manuscript by searching the Copyright Office's catalog by title for the word "golf" in combination with the word "handicap." Additionally, the Board found that an individual seeking to view the manuscript would have been able to do so by visiting the Copyright Office. Finally, the Board rejected Dr. Lister's arguments that the inconvenience of visiting the Copyright Office and the Copyright Office's rules prohibiting individuals from making copies of the manuscript precluded a finding of public accessibility. With respect to the unavailability of copies, the Board found that the inventive concept was straightforward enough that it could be understood and retained by a person of ordinary skill in the art upon reading the manuscript without any need to obtain a copy.

Although there was no evidence that anyone actually looked at the manuscript, the Board held that public accessibility does not require that the document have been actually accessed.

On appeal, the Federal Circuit reversed – finding that (1) the availability of a manuscript in the copyright office does not necessarily meet the accessibility requirement of Section 102(b); and (2) in this case, the PTO did not prove that the document was publicly accessible.

This case is akin to other "library" cases where prior art is found covered in dust in a secluded section of a library. In those cases, the material is considered public if "it could be located by persons interested and ordinarily skilled in the subject matter or art exercising reasonable diligence."

Here, the court found that the Library of Congress records did not create accessibility because those records were (at that time) not searchable by subject or keyword. Rather the LOC records could on be searched by title (beginning with the first word of the title of the article) or author last name.

The automated catalog was not sorted by subject matter and could only be searched by either the author's last name or the first word of the title of the work.

On the other hand, LOC records (although not the full manuscript text) are also available through Westlaw and Dialog. In its decision, the appellate panel indicated that the search features available through those paid services were sufficient to make the records "publicly accessible." However, the record did not indicate when Lister's records became available through Westlaw or Dialog and thus those sources cannot be relied on as prior art.

Absent evidence of the date that the disclosure was publicly posted, if the publication itself does not include a publication date (or retrieval date), it cannot be relied upon as prior art under 35 U.S.C. 102(a) or (b). Quoting M.P.E.P. § 2128.

. . . .

Essentially, the evidence shows that at some point in time Westlaw and Dialog incorporated the Copyright Office's automated catalog information about the Lister manuscript into their own databases. There is no indication as to when that occurred or whether it was prior to the critical date. We see little difference between the evidence in this case and a situation in which an examiner comes across an undated reference that discloses an invention for which an applicant is seeking the patent. We surely would not view the mere existence of the reference in the latter scenario as prima facie evidence that it was available prior to the applicant's critical date.

. . . absent any evidence pertaining to the general practices of the Copyright Office, Westlaw, and Dialog, or the typical time that elapses between copyright registration, inclusion in the Copyright Office's automated catalog, and subsequent incorporation into one of the commercial databases, any presumption along those lines would be pure speculation.

On remand, the PTO can legitimately reject the application again if it can prove that the LOC records were available through Westlaw or Dialog more than one year prior to the 1996 patent application date.

President Obama's Strategy for American Innovation

President Obama's speech today focused on its newly formed "strategy for American innovation" -- his "strategy to foster new jobs, new businesses, and new industries by laying the groundwork and the ground rules to best tap our innovative potential. . . . [R]ooted in a simple idea: that if government does its modest part, there's no stopping the most powerful and generative economic force that the world has ever known, and that is the American people. . . . [Beginning with] the building blocks of innovation: education, infrastructure, research."

The Administration's policy paper focuses briefly on two aspects of intellectual property and patent law divided between a need for strong international enforcement and a call for reform of the US system.

Enforce our trade agreements to ensure access for American products abroad. Over the last eight years the enforcement of trade agreements slowed dramatically, with the United States bringing only an average of three WTO cases per year – as opposed to the approximately 11 annually from 1995 to 2001. In this era, the United States lost its focus on ensuring that other countries lived up to their promises to open their markets, not violate America’s intellectual property, and not use dumping or subsidies to penetrate America’s markets. Under President Obama, USTR and the Department of Commerce are committed to a new emphasis on enforcing our existing agreements.

Protect intellectual property rights. Intellectual property is to the digital age what physical goods were to the industrial age. We must ensure that intellectual property is protected in foreign markets and promote greater cooperation on international standards that allow our technologies to compete everywhere. The Administration is committed to ensuring that the United States Patent and Trademark Office has the resources, authority, and flexibility to administer the patent system effectively and issue high-quality patents on innovative intellectual property, while rejecting claims that do not merit patent protection.

The administration's talking points on the USPTO link-in with Professor Rai's calls for greater patent office power and autonomy - "ensuring that the [USPTO] has the resources, authority, and flexibility to administer the patent system efficiently."

• SEPT 20 Innovation Whitepaper_FINAL.PDF

Patently-O Bits and Bytes No. 130

New Job Postings:

• Klarquist Sparkman (Portland) is looking to hire a patent attorney or patent agent with an advanced degree in organic chemistry and 3+ years patent prosecution experience.
• AstraZeneca has listed four opening:
• • Senior Patent Attorney - Neuroscience (Wilmington, DE)
  • Principle Patent Attorney - Neuroscience (Wilmington, DE)
  • Senior Patent Litigation Attorney (Wilmington, DE)
  • Senior Patent Attorney - Oncology and Infection (Boston, MA)
    
• Leading-Edge Law Group - a small boutique firm in Richmond, VA is looking to find an experienced patent attorney to join their firm.

Upcoming Events:

• Sept 25 at Santa Clara Law School - Sources of Uncertainty in Patent Litigation. This looks to be an awesome half-day event at a low price: $150 for law firm folks; $75 for in-house counsel.
• Nov 5-3 in NYC: TechNet Patent Forum. Use code EAG476 to get a $300 discount.

Troll Tracker Defamation Lawsuit: Trial Underway

Eric Albritton's defamation lawsuit against Rick Frenkel and his former employer Cisco Systems is underway in the Eastern District of Texas. In my opinion, the case is ridiculous. However, it should serve as a reminder that those vehemently against certain types of speech can often shut-down that speech. Frenkel has indicated that he will not revive his troll tracker blog.

The whole controversy began when Albritton's litigation team (on behalf of ESN) filed a patent infringement action against Cisco in the Eastern District of Texas. The electronic timestamp of the filing was October 15, 2007 even though the patent did not issue until October 16. Of course, a patentee has no standing to file a lawsuit until the patent issues. I reported on that discrepancy in an October 16 Patently-O post. [Link].

A few days later, Frenkel reported that the filing date had been changed by the clerk without notice or motion. In his report, Frenkel suggested that

"ESN's local counsel called the EDTX court clerk and convinced him/her to change the docket to reflect an October 16 filing date, rather than the October 15 filing date. I checked, and sure enough, that's exactly what happened – the docket was altered to reflect an October 16 filing date and the complaint was altered to change the filing date stamp from October 15 to October 16. Only the EDTX Court Clerk could have made such changes. . . . This is yet another example of the abusive nature of litigating patent cases in the Banana Republic of East Texas."

In a later posting, Frenkel identified Albritton as ESN's local counsel.

Albritton apparently does not dispute the fact that the original docket sheet indicated October 15 or that his office convinced the clerk to change the date stamp. However, he explains that the change was proper because the electronic filing had been started prior to midnight, but was not finally submitted until after midnight.

Albritton subsequently filed a defamation suit against Frenkel, several of his colleagues at Cisco, and against Cisco itself. The basis of the defamation suit is the underlying implication that Albritton acted illegally in getting the docket sheet changed.

Complicating the case are the issues that: (1) Frenkel was at the time posting anonymously as the "Patent Troll Tracker;" (2) the docket sheet change involved a case against Frenkel's employer Cisco; (3) Frenkel also mentioned another attorney, Johnny Ward, son of E.D.Tex. Judge Ward; and (4) The lack of respect for the E.D.Tex. apparent in the Troll Tracker posts.

Joe Mullin has been reporting on the details of the trial. [Link]

An Appeal to the New Patent Office Director: Repeal the Single Sentence Rule

Guest Post by Stephen Schott of Volpe & Koenig 

[File Attachment: PDF Version of this Article (135 KB)]

Like all elementary school graduates, I learned that a single sentence should be short. One source suggests that a well-written work should average 20 to 25 word sentences.[1] With that as the guide, sentences averaging 50 words would raise the ire of a 3^rd grade teacher. Those averaging 100 words would drive a sane person mad. And a 250 plus word sentence would drive even Proust to distraction.

 

But sentences of such prodigious lengths are commonplace in patent law. The offending sentences are patent claims.[2] These claims are a U.S. patent’s most important feature. It is here that the inventor, or more likely the inventor’s attorney, sets forth the “metes and bounds” that define the invention. The claims serve as property lines: Cross into those lines with your product and you infringe the patent.

 

With such importance placed on claims, you would expect them to be quite readable. You would at least expect them to have been the subject of the “plain English” movement, perhaps best summed up by Albert Einstein when discussing science: “Most of the fundamental ideas of science are essentially simple, and may, as a rule, be expressed in language comprehensible to everyone.” But the claims—despite the substantial time spent drafting and interpreting them—are not a place where the discerning reader finds linguistic respite.

An Initial Comment on Prometheus: The Irrelevance of Intangibility

By Kevin Emerson Collins, Associate Professor of Law, Indiana University Maurer School of Law—Bloomington [BIO][Articles][PDF Version of this Post]

Background: The Machine-or-Transformation Test of Bilski

Last fall, the Federal Circuit articulated the "machine-or-transformation" test for patent eligibility in its landmark case In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc). It held that a method is eligible for patent protection only if it is either (a) limited to a "particular machine" or (b) responsible for transforming a "particular article" into a different state or thing. Id. at 954. Additionally, in a classic example of language that adds judicial wiggle room, the machine or transformation that satisfies either of these prongs "must impose meaningful limits on the claim's scope," it "must be central to the purpose of the claimed process," and it must not be part of "insignificant extra-solution activity" or a "mere data-gathering step." Id. at 961–62 (emphases added).   

The Supreme Court has accepted certiorari in Bilski, but the impending Supreme Court opinion has not stopped the Federal Circuit from issuing what is perhaps its most important case to date applying the machine-or-transformation test: Prometheus Laboratories, Inc. v. Mayo Collaborative Services. There have been two distinct types of claims that have taken center stage in recent debates over the section 101 doctrine of patent eligibility: "business methods" and what I will call "determine-and-infer methods." The claim at issue in Bilski describes a classic business method. In contrast, Prometheus involves a determine-and-infer method. The Federal Circuit's opinion in Prometheus opens a new window into the import of the machine-or-transformation test. Regardless of one's views of the soundness of Federal Circuit's reasoning in Prometheus, herein lies one of the opinion's greatest virtues. By issuing Prometheus before the Court's oral arguments in Bilski, the Federal Circuit has helped to clarify the stakes of the Court's decision to sanction, reformulate, or reject the machine-or-transformation test.   

Kappos: Earn Accelerated Examination Rights by Abandoning Worthless Applications

One portion of my prior post on PTO Director Kappos' speech at the IPO annual meeting seems to have created some confusion. In particular, many questioned how Kappos planned to implement a system of "easing the acceleration of valuable cases while creating mechanisms for the worthless cases to be more quickly abandoned without wasting resources."

Aligning with the Obama-Sunstein strategy of soft paternalism, Kappos does not suggest that the PTO should set any hard-line rules for determining value and worthlessness. Rather, Director Kappos is intent on introducing a system that provides applicants with an incentive of abandoning applications prior to the first office action by offering accelerated examination for a still pending application. The following is a quote from the printed version of the Kappos speech:

We are working on new programs to help cut pendency across the board, such as one that would allow an applicant to select an application to advance in the queue in exchange for each application they withdraw before substantive examination.

We hope this will benefit applicants who are abandoning applications without response to first office actions, while saving the office from unnecessarily examining applications that are no longer important to applicants.

I suspect that this approach will work to help applicants abandon their own applications that they see as worthless. Here, applications may be seen as worthless either because they cover worthless technology or because they are unlikely to be patentable. A potential problem with the program is that it creates the opportunity to file straw-man applications that are subsequently abandoned in order to accelerate examination. To avoid this, the rule should also allow applicants to simply pay the equivalent of the application fee in order to accelerate examination. The program would also be much more successful if it offered a refund of the search & examination fees when applicants abandon early.

It is unclear whether the right to an accelerated examination would be transferrable.

Perhaps the positive takeaway from this small part of Director Kappos' speech is that he is willing to explore wholly new approaches if they have some potential for improving the system.

Links:

• Read the printed version of Director Kappos speech to the IPO
• Ready my prior discussion of the speech

Patentable Subject Matter: Federal Circuit Upholds Patentability of Drug Dosage Method Claim

Prometheus Labs. v. Mayo Clinic (Fed. Cir. 2009)

In a unanimous panel opinion, the Federal Circuit has rejected Mayo's patentable subject matter challenge under 35 U.S.C. 101 - holding that the claimed methods for calibrating a drug dosage were properly the subject of patent protection. The lower court had found the claims invalid under Section 101.

In its decision, the Federal Circuit applied its recent Bilski precedent.

The proper inquiry under § 101 is whether these methods meet the Supreme Court’s machine or transformation test articulated in Benson and Diehr, and applied in Bilski, and, if so, whether the machine or the transformation is central to the purpose of the claims.

Of course, Bilski is now on appeal at the Supreme Court.

The claimed method is essentially an iterative testing mechanism where the treatment drug is injected in the patient and the patient's subsequent metabolic response is measured. The next dosage is then re-calibrated based upon the measured metabolic response.

Holding: Following Bilski, the Federal Circuit ruled that the required administration of a drug "transforms an article into a different state or thing" and that the transformation was an "integral" part of the calibration method. As such, the claims satisfy the patentable subject matter test of Bilski.

To be patentable, the claim must not wholly preempt the use of a natural process. Here, the court only weakly rebutted Mayo's argument:

The claims cover a particular application of natural processes to treat various diseases, but transformative steps utilizing natural processes are not unpatentable subject matter. Moreover, the claims do not preemptnatural processes; they utilize them in a series of specific steps.

Method of Diagnosis: The court was clear to distinguish the Prometheus claims from diagnosis claims that merely requiring data gathering and correlation rather than an injection of drugs.

The asserted claims are in effect claims to methods of treatment, which are always transformative when a defined group of drugs is administered to the body to ameliorate the effects of an undesired condition. . . .

The crucial error the district court made in reaching the opposite conclusion was failing to recognize that the first two steps of the asserted claims are not merely data-gathering steps. . . . [T]he administering and determining steps are part of a treatment protocol, and they are transformative.

Thus, this decision at least suggests that the asserted diagnosis claim in LabCorp v. Metabolite would not be patentable. That claim involved only two steps: (1) assaying a body fluid for its homocysteine level; and (2) correlating high homocysteine with a vitamin deficiency.

Despite the stated distinctions, this case could be seen as a muted challenge to the Supreme Court and especially to Justice Breyer's dissent from the Court's late dismissal of its grant of certiorari. In its one sentence reflection on Breyer's dissent, the Federal Circuit opinion merely indicates that opinion's lack of precedential value and that the claims are "different."

In reaching its conclusion, the district court relied heavily on the opinion of three justices dissenting from the dismissal of the grant of certiorari in Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc., 548 U.S. 124 (2006) (Breyer, J., dissenting). . . . That dissent is not controlling law and also involved different claims from the ones at issue here.

The court was clear the parties did not dispute other validity issues such as obviousness or novelty, but rather focused solely on the question of patentable subject matter.

Chances for Supreme Court Review: The setup of this case makes is a good candidate for Supreme Court review especially if the Court is not fully satisfied by its Bilski decision. The Supreme Court has regularly used case clustering in the past when considering patent issues: Nonobviousness (John Deere (1966), Adams (1966), & Anderson's-Black Rock (1969)); Patentable subject matter (Flook (1978), Charkabarty (1980), Diehr (1980)); Prosecution history estoppel (Warner-Jenkinson (1995) & Festo (2000)).

Notes: Judge Lourie drafted the opinion which was joined by Chief Judge Michel. District Court Judge Clark (E.D.Tex.) joined the panel sitting by designation.

USPTO Director Kappos Discusses USPTO 2010

Director David Kappos today offered his first public speech directly to the intellectual property law community since taking office as Director. The 600+ patent attorneys in attendance at the Intellectual Property Owners Association (IPO) appeared cautiously hopeful.

Some highlights:

1. Kappos intends to focus on process-focused reform in an attempt to drop pendency and increase examination effectiveness. In particular, Kappos suggested a reengineering of the USPTO examiner count system to better encourage compact prosecution; pre-first-office-action interviews as a mechanism to quickly focus on the important issues; easing the acceleration of valuable cases while creating mechanisms for the worthless cases to be more quickly abandoned without wasting resources. While waiting for broad reforms to take effect, Kappos also suggests mechanisms for shortening pendency for focused sectors of technology. As part of this, Kappos also suggested that plans at creating a "nationwide workforce" of patent examiners.
2. Legislative patent reform is one of the "highest priorities" of both the USPTO and the Commerce Department. (Kappos did not develop the particular areas of reform).
3. In the Q&A session, Kappos was asked about Tafas v. Dudas and its potential resolution. He joked that it might aptly be renamed Kappos v. Kappos based upon his history of opposing the rules package and his new role as PTO director. Despite his predilection against those particular reforms, Kappos may not have power to extricate the Government from its position.
4. In the background, is the "big overhanging problem . . . funding." Kappos reported an expected $200 million shortfall for FY2010. Leaving little money to make improvements or to even keep-up the "extremely fragile" information technology system.

Lucent v. Microsoft: Damages

Lucent v. Gateway & Microsoft (Fed. Cir. 2009)

Lucent's patent-in-suit claims was filed in 1986 and generally focuses on using an on-screen keyboard to enter information into a computer. In 2002, Lucent sued Microsoft and others for infringement. Since then, the patent has expired, but the litigation continues over past damages. Perhaps most notably, this case may serve as a reminder that a twenty year patent term represents a major span in the worlds of business and technology.

The primary infringing portion of Microsoft's software appears to be the "date picker" function found in Microsoft calendars. In litigation, the jury sided with Lucent and awarded the patent holder with $350 million in damages. Here, I discuss three aspects of the opinion: damages; obviousness; and inducement.

Damages: Most of the action in the Federal Circuit decision revolves around damages. The parties appear to agree that Microsoft sold 110 million accused units with a total sales value of $8 billion. Based on that figure, Lucent requested $561 million in damages based on an 8% royalty rate of Microsoft's sales revenue. Microsoft argued that the correct licensing rate should result in only $6 million lump sum in damages. On appeal, the Federal Circuit vacated the $350 million dollar award and remanded for a new trial solely on the issue of damages - finding that the original verdict was not supported by substantial evidence.

Reasonable Royalty Calculation: The Patent Act requires that a court award damages at least in the amount of a "reasonable royalty." The hallmark of that calculation involves a hindsight reconstruction in an attempt to calculate the patentee's differential "pecuniary condition . . . if the infringement had not occurred." This is often done through a "hypothetical negotiation" reconstruction based on the Georgia-Pacific factors. See Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116, 1120 (S.D.N.Y. 1970); see also Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1554 n.13 (Fed. Cir. 1995) (en banc).

Entire Market Value: When a patentee proves that the patent related feature serves as the predominant basis for customer demand, courts allow damages to be based upon the "entire market value" of the product (i.e., 8% of the sales revenue of Microsoft Office) rather than focusing on the incremental value of the innovation. Here, the Federal Circuit held that the "only reasonable conclusion" is that the date-picker function is not a substantial driver of Office sales. "There was no evidence that anybody anywhere at any time ever bought Outlook . . . because it had a date picker."

Patentees typically prefer to invoke the entire market value rule because it seemingly tends to lead to higher total damage payouts. Of course, the market value only sets a base. Interestingly, the Federal Circuit recognized here that the bar on using the entire market value of a product is rather arbitrary.

Although our law states certain mandatory conditions for applying the entire market value rule, courts must nevertheless be cognizant of a fundamental relationship between the entire market value rule and the calculation of a running royalty damages award. Simply put, the base used in a running royalty calculation can always be the value of the entire commercial embodiment, as long as the magnitude of the rate is within an acceptable range (as determined by the evidence). . . . Microsoft surely would have little reason to complain about the supposed application of the entire market value rule had the jury applied a royalty rate of 0.1% (instead of 8%) to the market price of the infringing programs. Such a rate would have likely yielded a damages award of less than Microsoft’s proposed $6.5 million.

The Court goes on to suggest that the entire market value rule has a place in cases where the invention is only a small portion of the product.

Some commentators suggest that the entire market value rule should have little role in reasonable royalty law. See, e.g., Mark A. Lemley, Distinguishing Lost Profits From Reasonable Royalties, 51 Wm. & Mary L. Rev. (forthcoming 2009) ... Amy Landers, Let the Games Begin: Incentives to Innovation in the New Economy of Intellectual Property Law, 46 Santa Clara L. Rev. 307, 362 (2006) ... But such general propositions ignore the realities of patent licensing and the flexibility needed in transferring intellectual property rights. The evidence of record in the present dispute illustrates the importance the entire market value may have in reasonable royalty cases.

Georgia Pacific Factors: In its opinion, the Federal Circuit emphasized the flexibility of its jurisprudence in deciding damages with an understanding that actual licensing (much less a hypothetical negotiation) is "complicated" and "inexact." Ultimately, the case is being sent back for a new trial because the jury's award was not logically tied to the evidence. ("[T] damages evidence of record was neither very powerful, nor presented very well by either party.") Most notably lacking are comparable licensing agreements.

First, some of the license agreements are radically different from the hypothetical agreement under consideration for the Day patent. Second, with the other agreements, we are simply unable to ascertain from the evidence presented the subject matter of the agreements, and we therefore cannot understand how the jury could have adequately evaluated the probative value of those agreements.

Damages award vacated

Power Behind the Black Box of Obviousness: In a string of recent cases, the Federal Circuit has reinvigorated the notion that jury verdicts on the question of obviousness will likely be upheld on appeal. Here, Microsoft argued for a particular interpretation of the prior art that it presented. While being sympathetic to Microsoft's argument, the court held that the defendant's arguments did not meet the necessary burden.

When the underlying facts are taken in the light most favorable to Lucent, the non-moving party, the evidence reasonably permitted the jury to have decided that Microsoft did not prove by clear and convincing evidence that claim 19 would have been obvious.

Nonobviousness affirmed.

Inducement: Lucent's case was built on the notion of contributory infringement. Microsoft's software does not - just by itself - directly infringe Lucent's asserted method claims. Rather, by selling the software, Microsoft leads its customers to directly infringe. Contributory infringement and inducement both require proof of underlying direct infringement. At trial, Lucent was unable to point to any actual instance where a Microsoft customer used Microsoft products to perform the claimed method. On appeal, the Federal Circuit affirmed the infringement finding by holding that circumstantial evidence was sufficient to support a conclusion that at least one person (other than the experts in the case) used the products in an infringing manner.

As in Moleculon, the jury in the present case could have reasonably concluded that, sometime during the relevant period from 2003 to 2006, more likely than not one person somewhere in the United States had performed the claimed method using the Microsoft products.

Infringement affirmed.

Federal Circuit Debates Stays Pending Reexamination; Injunctions when Claims are of “Suspect Validity”

Fresenius USA, Inc. v. Baxter International, Inc. (Fed. Cir. 2009)

Three judges, three opinions with a unanimous majority opinion written by Judge Gajarsa and two competing concurring opinions by Judges Dyk and Newman. The majority opinion (see below) renders most of Baxter's asserted dialysis claims obvious. The two concurring opinions focus on the fact that the remaining still-valid claims are currently under reexamination at the USPTO and question whether a stay is appropriate.

Judge Dyk suggests that a final determination of the case may need to be stayed "pending the outcome of the reexamination." Notably, Judge Dyk argues that the currently-valid claims are "of dubious validity in light of our holding."

I join the majority opinion on the understanding that it does not foreclose the district court in its discretion from staying further proceedings pending the outcome of the reexamination before the U.S. Patent and Trademark Office. While Fresenius did not establish the invalidity of claims 26–31 of the '434 patent in the district court proceeding, those claims on their face are of dubious validity in light of our holding that claims 1–3 and 13–16 of the '131 patent and claim 11 of the '027 patent are invalid. It is entirely possible that the U.S. Patent and Trademark Office will finally conclude that claims 26–31 of the '434 patent are also invalid.

Judge Newman writes in response to Judge Dyk and argues that a stay would be

[inappropriate] at this stage in this protracted litigation, after full trial and decision in the district court, after full appeal and ruling of the appellate court and with only a modified remedy remaining on remand. . . . A stay of finality, after the issues of validity and infringement have been litigated and decided by the district court and appealed to the Federal Circuit, is a distortion of the role of reexamination.

I remain a strong supporter of the principle of reexamination. It can be a useful and powerful tool for the benefit of both patentees and those interested in restricting or eliminating adversely held patents. However, if routinely available to delay the judicial resolution of disputes, the procedure is subject to inequity, if not manipulation and abuse, through the delays that are inherent in PTO activity.

Majority Opinion:

The jury held that Baxter's patents covering a hemodialysis machine with a touch-screen interface were invalid as obvious. In a post-jury JMOL decision, district court Judge Armstrong (N.D.Cal.) held that the jury verdict was not supported by substantial evidence – and thus that the claims remained valid. On appeal, the Federal Circuit largely reversed – finding that the jury had sufficient evidence to decide either way.

The jury yes/no decision here shows signs of the 'black box' effect that renders such decisions largely unassailable. Rather than attacking the jury's reasoning, the appeal can only question whether the defendant had provided sufficient evidence of obviousness (regardless of whether the jury actually relied upon that evidence).

Where, as here, the jury made no explicit factual findings regarding obviousness, we must determine whether the implicit findings necessary to support the verdict are supported by substantial evidence.

Permanent Injunction: The court had ordered a permanent injunction to stop ongoing infringement. On appeal, the Federal Circuit vacated that decision after finding some of the claims invalid. On remand, the district court is instructed to "revise or reconsider the injunction in light of the fact that only claims 26–31 of the '434 patent remain valid and infringed."

Based on Judge Dyk's argument regarding dubious validity, this case appears to now create a situation suggested by Justice Kennedy in his eBay concurrence. In that opinion, Kennedy argued that the "suspect validity" of patent claims "may affect the calculus under the four-factor test." Thus, even though the claims have been held valid, their marginal validity could weaken the patentee's case for permanent injunctive relief.

Notes:

• This is an interesting and nuanced opinion that includes much more than what is discussed here.

 

Mystery Graph of the Day

I created the following graph after reading the Federal Circuit's 3-2 claim construction reversal in Martek. Can you guess what the graph represents?

Mystery Solved by Joe Helmsen from Pepper Hamilton. Joe writes

“I think that the graphs represent the percent chance of having a majority decision in a particular direction given that each of x judges has a y% chance of deciding in that way.  For example, the top line represents 1 judge at 90%, 2 judges have to go 2-0 (.9*.9=81%), 3 judges have to go 3-0 or 2-1 (.9^^3 + 3*.9*.9*.1 =97.2%, etc.).” 

Right. One point of the graph is to illustrate the interesting phenomenon that the odds of convincing a “majority” are much higher when the panel has an odd number of judges. This is easy to understand when comparing a two-judge panel with a three-judge panel. A two-judge panel offers no room for error because requires that you convince both judges. On the other hand, a three-judge panel will side with you if you convince two of the three judges.

The graph also illustrates a second point – that in theory multiple judges tend to make marginal cases more predictable. Thus, an argument that will convince a judge 70% of the time would be predicted to carry the day in almost 90% of 12–member en banc panels.

Of course, this discussion relies on several false premises.  Most notably, the analysis assumes that each panel member decision is independent of the decision made by other panel members. That is is clearly not true.  Rather, the judges and clerks communicate and influence one another.  In addition to independence, the analysis presented here presumes that each judge has the same likelihood of deciding the case in a particular direction. 

Patently-O Bits and Bytes No. 129

• Law Student Scholarship: The Richard Linn American Inn of Court is sponsoring a newly established scholarship in honor of Mark T. Banner who died in 2008. Mark was a major force in the patent community and was very helpful to me early in my career. Although the Linn AIC is located in Chicago, the organization is taking applications nationally, now through October 10, 2009. The award is open to any student interested in pursuing a career in intellectual property. However, some preference may be given to students who are involved in a local Inn of Court. Intellectual property focused Inns are located in Chicago, DC, San Francisco Bay Area, Philadelphia, New Jersey, NYC, LA, and Boston. [Download The Richard Linn Inn Mark T. Banner Scholarship Materials][About American Inns of Court].
• Job Board Sponsor: I'm happy to announce that Franklin Pierce Law Center has become a sponsor of the Patently-O job board. The law school continues its focus on patent law with a particular emphasis on practical training. I was teaching there in the summer of 2007 and very much enjoyed my stay in southern New Hampshire.  

Professor Arti Rai to join the PTO?

Tech Law Reporter Andrew Noyes today reports on rumors that Duke University Law Professor and occasional Patently-O contributor Arti Rai will be joining the USPTO executive suite as head of external affairs. That position typically leads both intra– and inter-governmental relations. 

Professor Rai’s primary research focus over the past decade has been on the administrative powers of the USPTO and regulatory methods of promoting regulation especially in the areas of health care and biotechnology. In a 2009 article, Professor Rai suggests that the PTO should continue to use the courts to secure additional control over its own rulemaking and procedural authority.

Given the difficulties of securing congressional action—particularly when Congress may be unwilling or unable to separate relatively simple administrative reform from highly contentious issues like damage awards in litigation—the judiciary is probably the more promising venue for conferring such control.

Additionally, Rai argues that the PTO should move forward with inequitable conduct reform.

The progress that could be achieved through inequitable-conduct reform is difficult to overstate. With such reform, interactions with applicants could be regulated in a much more rational manner. In addition to accelerated examination, inequitable-conduct reform could also create opportunities (where appropriate) for more intensive, on-the-record engagement between the examiner and the applicant. For example, in appropriate cases, on-the-record pre-first-office-action interviews that obviate the need for multiple subsequent rounds of negotiation between examiner and applicant might be possible.

Professor Rai has long ties with President Obama. They were law school classmates at Harvard Law School and she worked tirelessly on the campaign. Prior to becoming a law professor, Rai clerked for Judge Patel (N.D. Cal.) and was an associate at Jenner & Block.

Her patent law expertise and close ties to President Obama also place her on a short list of Federal Circuit nominees should a vacancy arise.

Claim Preclusion and Vitiation

Nystrom v. Trex and Home Depot (Fed. Cir. 2009)

Ron Nystrom's patent covers a type of decking board that is shaped in a way to shed water. In a prior case, the Federal Circuit, limited the claim term "board" to cover only boards made of "wood cut from a log." Nystrom's case was one of the first examples of how Phillips v. AWH could be used to limit claim scope based on statements in the specification and prosecution history – even when those statements do not rise to either a disavowal of scope or definition of a term. Because the Trex's product is a wood-composite, it did not literally infringe the asserted claims. The district court also held that Nystrom had waived its right to argue infringement under the doctrine of equivalents.

A few days after losing the first case, Nystrom filed a second lawsuit against Trex and its distributors (Home Depot, et al.). Asserting infringement under the doctrine of equivalents against a second generation of Trex products.

On appeal, the Federal Circuit has held that the second lawsuit is barred by the claim preclusion doctrine of res judicata. 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. In patent law, claim preclusion only arises when the accused product in the second suit is "essentially the same" as the accused product in the first suit.

For claim preclusion in a patent case, an accused infringer must show that the accused product or process in the second suit is "essentially the same" as the accused product or process in the first suit. Foster, 947 F.2d at 480. "Colorable changes in an infringing device or changes unrelated to the limitations in the claim of the patent would not present a new cause of action." Id. Where an accused infringer has prevailed in an infringement suit, "the accused devices have the status of noninfringements, and the defendant acquires the status of a noninfringer to that extent." Young Eng'rs, Inc. v. U.S. Int'l. Trade Comm'n, 721 F.2d 1305, 1316 (Fed. Cir. 1983).

Notably, claim preclusion applies applies even against issues that are waived – as here – rather than contested in open court.

In the present case, Trex admits that its new products are different, but argues that they avoid infringement in the same way – namely that its boards are not "cut from a log." The Federal Circuit recognized this as a novel question of whether the “essentially the same” requirement should focus only on the claim terms at issue in the original case:

This court has previously emphasized that the focus for claim preclusion should be on "material differences" between the two accused devices, but has not addressed directly whether the focus of the "material differences" test is on the claim limitations at issue in each particular case.

Agreeing with the accused infringer Trex, the Federal Circuit ruled that claim preclusion applies – since the second suit would involve Nystrom "attempting to prove infringement of the same claim limitations as to the same features of the accused devices."

Vitiation: Judge Rader authored the majority opinion, which was joined by Chief Judge Michel and Judge Prost. In addition, Judge Rader filed three pages of "additional views" focusing on the doctrine of equivalents (DOE) and its sub-doctrine of claim vitiation. DOE allows a patentee to prove infringement even when an accused device is missing certain claim limitations – so long as the difference from the claimed limitation is only insubstantial. One limitation of the DOE is that does not apply where its application would "vitiate a claim limitation."

Judge Rader argues that the two potentially inconsistent doctrines can be reconciled into a single doctrine that both focus on the "substantiality of a missing claim limitation." In other words, Judge Rader argues that vitiation is not a separate sub-doctrine, but rather is wholly "subsumed within the test for equivalents itself."

[C]laim vitiation, by definition, simply rewinds and replays the doctrine of equivalents test for substantiality of a missing claim limitation. Thus, a finding of insubstantial difference to show equivalency obviates any further vitiation analysis—the wholly insignificant equivalent, by definition, would not vitiate the claim. On the other hand, a finding of substantial difference renders vitiation unnecessary. Thus, the vitiation doctrine is really subsumed within the test for equivalents itself. In other words, the all elements rule is simply a circular application of the doctrine of equivalents.

The problem with this approach is the hodge-podge of law vs. fact differentiation created by the Federal Circuit. Notably, DOE is a question of fact (decided by juries) while vitiation is a question of law (decided by judges).

This case can serve to illustrate this situation. Trex argued to the district court that a finding of equivalents on a product comprised of forty to fifty percent wood would necessarily vitiate the claim language requiring the board to be "made [entirely] from wood." The district court agreed and barred Nystrom from pursuing an infringement theory based on equivalents. Would the result be different, however, if the accused device was comprised of fifty-five or sixty percent wood? Seventy percent? Should this question be resolved by a jury, by a judge, or by both?

The Rising Importance of Method Claims

The chart above shows the percentage of issued patents that have at least one method claim grouped according to the year of issuance of the patent. Here, I defined a method claim as one which includes either the term "method" or the term "process."

As is apparent, the use of method claims has risen steadily over the past thirty five years.

Most Common Preambles

The following is a list of the most commonly used preambles based on an analysis of the first listed claim of the 2.1 million patent applications that have been published by the USPTO. Although the most common preambles are quite generic, the listed top-26 preambles represent fewer than 5% of the published applications.

When is it better to use the generic "a method" preamble verses a more detailed preamble such as a "method for content selection of digital media stored in a memory coupled to a digital media processor and playable on a digital audio-visual playback device"?

About 25% of the first-listed claims were directed toward some type of method or process.

Most Common Preambles

1. A method
2. An apparatus
3. A semiconductor device
4. A system
5. A composition
6. An image forming apparatus
7. A device
8. A display device
9. A semiconductor memory device
10. A liquid crystal display device
11. A pharmaceutical composition
12. An integrated circuit
13. An image processing apparatus
14. An electronic device
15. A computer-implemented method
16. An isolated nucleic acid molecule
17. A computer system
18. A method of manufacturing a semiconductor device
19. An information processing apparatus
20. An isolated polynucleotide
21. A liquid crystal display
22. A memory device
23. Apparatus
24. An article
25. A circuit
26. An isolated polypeptide

Federal Circuit: Is a Human An Animal? Written Description; Enablement; and Inventorship

Martek Biosciences v. Nutrinova and Lonza (Fed. Cir. 2009)

[Read part I of the discussion of Martek]

Sitting in as an expanded five-member panel, the Court of Appeals for the Federal Circuit has largely affirmed a jury verdict finding Martek's patents valid and infringed. The case involves issues of written description, enablement, sufficiency of infringement evidence, corroboration of prior inventorship arguments, and claim construction of the word "animal." The five members agreed as to all issues except for claim construction. On that claim construction issue, the majority opinion of Judges Newman, Gajarsa, and Moore held that a human is an animal. Judges Lourie and Rader argued in dissent that the patentee's use of animal suggested that it did not include humans.

Is a human an animal: The four patents in suit cover various aspects of making and using the omega-3 fatty acids. Nutrinova sells allegedly infringing products for human consumption. One of the patents claims a method for achieving high concentrations of the omega-3 acids in an "animal," and the parties contested whether an a human is an animal. The majority based its decision on the maxim that the patentee is free to be its own lexicographer. "When a patentee explicitly defines a claim term in the patent specification, the patentee's definition controls." In its specification, Martek appears to plainly define the term animal in the following sentence: "The term 'animal' means any organism belonging to the kingdom Animalia." It is undisputed that humans are classified within the kingdom Animalia – and thus, humans fit within the claims animal limitation. Q.E.D.

According to the court, once a patentee defines a term, extrinsic evidence of that term's meaning "is simply irrelevant." On remand, the district court will need to consider whether the patent is infringed under the broader definition.

The dissent does not disagree with the traditional maxim, but argues that the patent is not so clear in its definition:

This case illustrates the unusual situation in which a purported definition of a claim term in the written description is totally negated by the remainder of the text of the patent. Martek's attempt at lexicography does not conform to the way in which it otherwise describes its invention.

In particular, the dissent points to the fact that the claim in question is "a method of raising an animal" in a way that increases the "content of omega-3 highly unsaturated fatty acids in said animal" and that the field of the invention looks toward "food products derived from such animals." The specification and claims spell out a variety of animals that could be so-raised: poultry, swine, cattle, shrimp, shellfish, milk producers, and goats. However, the specification only refers to humans when it discusses the benefits of ingesting the milk and meat of those animals.

Written Description: The accused infringers argued that the patentee had added new matter to the claims of one of the patents during prosecution and that the claims are consequently invalid under the traditional written description requirement of 35 U.S.C. § 112. The Federal Circuit disagreed – finding that the jury had sufficient evidence to reject the written description argument. In particular, the '594 patent generally claims "a food product." Although that claim term had been added during prosecution, the Federal Circuit found that it was sufficiently supported by the original disclosure – noting again that "the earlier application need not describe the claimed subject matter in precisely the same terms as found in the claim." Tech Licensing (Fed. Cir. 2008). Rather, the test is "whether the disclosure of the application relied upon reasonably conveys to the artisan that the inventor had possession at that time of the later claimed subject matter."

Evidence of Infringement: The claims of the '281 patent recite a limitation that the claimed microorganisms designed to create the omega-3 fatty acids caused less vessel damage than another other cultural medium (which used more sodium chloride). Martek did not provide results of any physical analysis of the accused infringing product to ensure that it met this limitation. Rather, Martek's experts discussed the "literature" on the topic and a conceptual analysis of the known effects of a high chlorine concentration. On appeal, the Federal Circuit affirmed that the expert testimony was sufficient for a jury to find infringement – holding that there is no "general rule requiring one who alleges infringement of a claim containing functional limitations to perform actual tests or experiments on the accused product or method. Rather, a "patentee may prove infringement by any method of analysis that is probative of the fact of infringement." Forest Labs. 239 F.3d 1305 (Fed. Cir. 2001).

Evidence of Prior Inventorship: It is improper to say that 'prior inventorship' is a defense to patent infringement. However, an accused infringer can invalidate a patent under 35 U.S.C. § 102(g)(2) by showing clear and convincing evidence that it (1) conceived of the invention before the patentee and (2) either reduced the invention to practice or was diligent in reducing the invention to practice from a time beginning before the patentee's conception date; and (3) did not abandon, suppress, or conceal the invention. In this case, the defendants had filed a patent application on a similar invention prior to the patentee. However, that application had gone abandoned. The application properly serves as evidence of conception, but – because it was abandoned – does not serve as constructive reduction to practice. Here, the accused infringer's defense failed because it could not provide other corroborating evidence of reduction to practice or diligence.

Enablement: The claims of the '567 patent were found invalid on JMOL due to lack of enablement due to a genus-species issue. Claim 1 broadly discusses growing "euryhaline microorganisms" while the specification only discloses two examples of thraustochytrium and schizochytrium organisms. The defendants' experts testified that there were at least 10,000 different qualifying species and the district court agreed that two species were insufficient. On appeal, it appears that the patentee gave-up on its claim 1, but the Federal Circuit agreed that the other claims had been improperly invalidated because they included limitations to the specific examples proffered in the specification. Evidence presented indicated that the species of those dependent claims together encompassed "only 22 known species."

Appellate Court Stays Injunction Against Microsoft Word

Microsoft v. i4i (Fed. Cir. 2009)

Without substantive opinion the Federal Circuit has stayed enforcement of an injunction against Microsoft that could have forced the software giant to stop selling its flagship product Word. Absent further rulings, the stay will be in force until Microsoft's appeal is decided on the merits -- likely extending into 2010. In August 2009, the lower court found Microsoft liable as a willful infringer of i4i's patent relating to xml document processing - a function of Word '03 and '07. That court ordered Microsoft to stop infringing by October 10, 2009.

The Stay order indicates that:

"Without prejudicing the ultimate determination of this case by the merits panel, the court determines based upon the motion papers submitted that Microsoft has met its burden to obtain a stay of the injunction."

Interestingly, the stay order indicates that it is a per curiam decision, but the order was signed by the Federal Circuit Clerk Jan Horbaly "for the court." I see this as an indication that the judges assigned to the merits panel do not yet want to reveal their identities.

The unfortunate part of this decision is that it does not define what it takes to meet the "burden to obtain a stay of the injunction" - especially in the wake of eBay. How does the court go about deciding whether to stay relief? How important is the fact that briefing of the merits are being expedited? What role did the amicus briefs by HP and Dell play in the decision?

Google’s Patent on its GOOGLE.COM Home Page

Earlier this week, the USPTO issued a design patent to Google that covers the "ornamental design for a graphical user interface [GUI] … as shown and described." Pat. No. D. 599,372. Design patent coverage is essentially defined by the images include in the issued patent. Here, the image looks roughly the same as the company's ubiquitous Google.com homepage. (See image below.)

To be clear, many patent professionals would argue that it is misleading to ever simply call this "a patent." Rather, it is a design patent. Design patents have limited scope in that they only cover ornamental designs rather than technological advances. The USPTO has been granting design patent protection for screen shots and icons for many years. However, to my (limited) knowledge, none of those design patents have ever been enforced in court. As with most design patents, it appears that during prosecution, the PTO never issued a substantive rejection based on novelty or obviousness. [UPDATE – I updated this paragraph based on messages from two of the leading design patent experts Saidman and Carani who rightly indicated that in the past several years, few design patents have been found invalid]

Dashed or "ghost" lines in the drawing indicate features that are not claimed. Thus, patent would be infringed by someone using an identical layout even if they replaced the "Google" mark with their own mark. You can note at the bottom that the design patent drawing is marked with a circle-c ©. That indicates that Google is also claiming copyright protection for this layout. In addition, in the design patent, Google indicates that it is also claiming trademark protection for portions of the layout and – perhaps – for the layout as a whole.

Although there is some conflict in the precedent, modern courts have generally allowed companies to overlap design patent, copyright, and trademark protection in the same way that a prosecutor may charge someone with multiple crimes that all stem from the same bad act. This only becomes a problem when applicants also attempt to include utility patent protection in the mix. The problem arises because inventions protected by utility patents are required to be "functional" while design patent, copyright, and trademark laws only protect "non-functional" elements. [The non-functionality doctrine varies considerably between the regimes.]

I like to think of the three regimes (design patent, copyright, and trademark) as essentially creating different rules of evidence to prove the same thing. All of the regimes have some sort of distinctiveness doctrine. For design patents, the design must be a novel and nonobvious advance; for trademark, the mark must help distinguish goods or services in the minds of consumers; for copyright, the work must be original. Likewise the elements of infringement are similar, but different enough to provide added value to someone concerned with protecting an underlying valuable asset.

Allowing overlapping protection has problems. Most notably, the 'piling on' effect may make it too expensive to challenge Google's rights even if their claim to rights appears overreaching. In the criminal justice system, this has the same effect of pushing folks to plea bargain.

Google operates in part on its reliance on the fair use doctrines of copyright and trademark laws and has been a strong advocate of open access of copyrighted works (think Google books and Google's indexing) and limited trademark rights (so that others can bid for Google ads on a competitors trade name). By relying on design patents, Google positions itself in a way that it can protect its rights based on patent doctrines while still arguing for weaker rights in those other areas.

Design patents remain in force for 14-years from the date of issue. Thus, Google's design patent is set to expire on Sept 1, 2023.

I have taken a screen shot of the Google.com website from Sept 3, 2009. It pretty clearly would not infringe because of the differences between layout in the patent and the layout on the site.

Notes:

• Read the computer programmer response on Slashdot.
• File Attachment: patd599372.pdf (72 KB). Also, see Google’s patent on Google Patents.
• It is pretty amazing that the patent lists ten inventors for that simple thing. Did each of those individuals contribute inventive material?
• Inequitable Conduct?: According to the face of the patent, Google did not submit any prior art. The examiner found 13 largely irrelevant pieces of prior art. Google should have at least submitted a copy of its home-page from 1 year before its March 2004 application date. The screen-shot below is the Google page from one-year before its patent priority date. (via Internet Archive). The Screen Shot serves as 102(b) prior art and also serves as a non-infringing alternative for competitors.

• Gawker’s ValleyWag has more background in a post titled “Google Patents World's Simplest Home Page.”
• Continuations: This patent is part of a family of at least seven design patents. Six of them are still pending, but one issued as a patent in 2006 (D533,561) covering the layout of search results. The recently issued ‘372 patent was filed in 2006, but claims priority to the 2004 filing date of the ‘561 patent.

Federal Circuit Expanded Panel

Martek Biosciences Corp. v. Nutrinova, Inc. (Fed. Cir. 2009) (expanded panel)

Sitting in as an expanded five-member panel, the Court of Appeals for the Federal Circuit has largely affirmed a jury verdict finding Martek’s patents valid and infringed. The case involves issues of written description, enablement, sufficiency of infringement evidence, corroboration of prior inventorship arguments, and claim construction of the word “animal.”  The five members agreed as to all issues except for claim construction. On that issue, the majority opinion of Judges Newman, Gajarsa, and Moore held that a human is an animal.  Judges Lourie and Rader argued in dissent that the patentee’s use of animal suggested that it did not include humans.

I’ll write more about the case in a separate post, but here I want to focus on the procedure of an expanded panel.

Expanded Panel: It appears that the expanded panel was prompted in-part as a show dignitaries who were visiting the court.  The court claimed authority under 28 U.S.C. 46(b) which indicates that the “Federal Circuit . . . may determine by rule the number of judges, not less than three who constitue a panel.”  There is a problem with this authority. The statute calls for the court to create a “rule” for determining the number of judges. Rather than following a rule, however, the expanded panel here appears to be an ad-hoc creation. 

Notes:

• Parallel Reexamination: As with most litigation, the patents are also under reexamination at the PTO.  As usual – and perhaps as required by the law – the Federal Circuit entirely ignored that proceeding.

Next Commissioner for Patents: Robert (Bob) Stoll

The USPTO has released a press release indicating that PTO Director Kappos has nominated "longtime USPTO executive Robert ("Bob") Stoll" for a five year term as Commissioner for Patents and has appointed Margaret ("Peggy") Focarino as Deputy Commissioner for Patents. It is the duty of Gary Locke (Secretary of Commerce) to actually appoint the Commissioner. 35 U.S.C. � 3. The press release indicates that Secretary Locke has already "expressed support" for the nomination.

"Bob brings to this position a rare expertise in patent policy and practice, as well as a strong command of the inner-workings of the USPTO and the federal government," Kappos said.  "Working hand-in-hand with Peggy, who has shown incredible skill in Patents management and operations, I know they will meet the formidable challenges facing the Patent organization, including the need to drastically reduce pendency, improve quality and boost efficiency, all while managing costs in a tough budgetary environment."

For his part, Secretary Locke again indicated his focus on patent prosecution pendency: "I have directed the USTPO to pursue an aggressive agenda to significantly reduce the time it takes to process patent applications. The length of time it takes causes uncertainty for inventors and entrepreneurs, stifles innovation and impedes our economic recovery."

Patent Attorney Work Week

I built a dataset of all original patent applications that have been published January - August 2009. Using that dataset, I created the chart below showing the patent applications grouped by the day of the week that the application was filed (based on filing date listed in publication). As is apparent, Friday filings are the most prevalent while only 2% of applications were filed on the weekends. As shown in the second and third charts, the Friday filed applications on average (1) include more claims and (2) include more words in the detailed description as compared to applications filed on other days of the week. Applications filed on the weekend are significantly shorter - a phenomenon likely explained by the larger proportion of independent inventor filings on the weekend.

Rethinking the USPTO Examiner Count System

The USPTO uses a count system as one way to measure patent examiner productivity. Examiners receive one count for sending out an initial office action and a second count when the case is "disposed." As you might guess, a case is disposed of when it either issues as a patent or is abandoned by the applicant. However, many folks are surprised that the applicant's filing of a request for continued examination (RCE) also counts as a disposal. As the chart shows below, this count incentive may well be driving a flood of RCE filings. The system also provides some incentive for aggressive restriction practice that forces the applicant to divide a single application into multiple applications. Notably, (1) the examiner does not receive any extra credit for examining a larger or more complex application and (2) the eventual divisional application is ordinarily routed to the original examiner who can do the search more quickly and still get the same counts.

One of the initial missions of new PTO director David Kappos is to rethink the count system and to figure out a way to ensure that examiners have "the time they need to do their job properly" and which also "incentivizes compact prosecution." Giving a hint at the final solution, Director Kappos also suggests that the count system should encourage "the use of interviews." The eight member task force includes four examiner union (POPA) representatives and four PTO managers – perhaps ensuring that the solution will not be a dramatic shift. [Quotes come from an internal PTO communication.]

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