Patent Law Blog (Patently-O)

Patents and Vegetable Crop Diversity

Much of attention on genetically modified food patents has focused on soybeans and corn. In an interesting study, UGA law professor Paul Heald and anthropology professor Susannah Chapman focus on patents covering vegetables (excluding corn, soybeans, and canola) as well as their commercialization rates. Their study covers both plant variety protection certificates and utility patents for 42 vegetable varieties. They find that - for the most part - patents have not had a large impact on the vegetable market. They highlight their findings as follows:

• Only 3.8% of varieties available in 2004 were ever subject to protection under patent law or the Plant Variety Protection Act (PVPA);
• More than 16% of all vegetable varieties that have ever been patented were commercially available in 2004; and
• In 2004, approximately 4.5% of protected, or once protected, varieties consisted of inventions that were at least twenty years old.

Read the paper here.

In an earlier paper, the pair showed that vegetable crop diversity increased in the past century -- a finding that cuts against conventional wisdom in the field. Read that paper here.

Recent Jury Verdicts

Cerner v. Visicu, 4-cv-1033 (W.D. Mo., December 8, 2009) (Visicu's asserted claims held not infringed and invalid as obvious).

Hologic, Inc. et al v. SenoRx, Inc, 08-cv-0133 (N.D. Cal. December 17, 2009) (Hologic asserted claims held not infringed and obvious).

DNT, LLC v. Sprint Nextel Corporation, 03-cv-0021 (E.D. Va. December 14, 2009) (DNT's claims held not infringed and lacking written description & enablement)

Retractable Technologies, Inc. v. Occupational & Medical Innovations, Ltd., 08-cv.-0120 (E.D. Tex. December 18, 2009) (patent claims held infringed and valid with damages of $1.5 m). Verdict included additional $2.2m for trade secret misappropriation.

Presidio Components Inc v. American Technical Ceramics Corp, 08-cv-0335 (S.D. Cal. December 16, 2009)(patent claims held infringed and valid with damages of $1.0 m in lost profits).

Underlying data via http://lexmachina.com.

  

Internet Law & Electronic Commerce Exam 2009

Essay 1 (50 points)

Peter recently started a new social networking (“matchmaking”) company named Whistle Stop. Biographical information of users is stored on Whistle Stop servers. In addition, users install a small program (or “APP”) on their mobile phones. The APP works by regularly updating Whistle Stop servers with the location of its users. When one user is in close proximity to another “compatible” user, the mobile phone plays a provocative whistle. The volume and character of the whistle may vary according to the intensity of compatibility. The idea is that the whistle helps promote less formality in meeting and also promotes the likelihood of first-glance butterflies associated with love-at-first-sight. The site’s online address is http://whistlestop.com. The service has been somewhat successful, especially in more urban areas.

(a)   Seeing the success of Peter’s business, Edmund begins a competing business that he calls whistleMATCH available through http://whistlematch.com. Edmund also starts a FaceBook page using his competitor’s name – thus the website http://facebook.com/whistlestop directs users to the whistleMATCH website. What legal avenues are available to Peter to stop what he sees as this unfair competition?

(b) In another genius move, Edmund hires-away one of Peter’s network administrators. The new employee shows Edmund a major flaw in Peter’s security system that allows access to user biographical and location information via the Internet without any password protection. As a way of expanding his growing network, Edmund configures his systems to whistle when one of Peter’s customers is near. Identify the potential legal liabilities raised by this situation.

(c)   It turns out the whistle tune played on the Whistle Stop mobile devices is under copyright. Title to the musical work is held by Lucy while the sound recording rights are owned by the Aslan Corporation. Peter had purchased a digital version of the recording through an online store. Is Peter potentially liable for copyright infringement? What about his users? During installation, a copy of the recording is placed on each mobile device. That recording is then triggered by the proximity signal. Does it help Peter to include a provision in his terms of use that would bar users from suing him (or his company) for copyright infringement?

(d) Diggory is a Whistle Stop customer. However, he went online Friday morning and turned-off his account for 24-hours. You see, Diggory had a romantic date scheduled with Polly and he wanted to avoid any problematic situations. During the date, Polly saw her friend Susan. As Susan approached the couple, her mobile device whistled – indicating mutual compatible between her and Diggory. It is fair to say that the whistle created some tension that lasted for hours. Does Diggory have a cause of action?

(e)   What are the greatest potential legal problems facing this new venture?

BPAI Rules for Ex Parte Appeals: Request for Comment and Notice of Roundtable

The USPTO is still considering modifying its rules that govern appeals to the Board of Patent Appeals and Interferences (BPAI) in ex parte appeals.  Before moving forward , the office is “seeking further public comment on possible revisions to portions” of the final rules originally published in 2007. A roundtable will be held January 20, 2010 from 9:30 am – 12:30 pm at the USPTO.  Requests to participate must be submitted by January 8, 2010 to linda.horner@uspto. Written comments on potential revisions should be submitted by February 12, 2010 to BPAI.Rules@uspto.gov.

Background: The USPTO has seen an incredible influx of appeals. In FY 2007, the BPAI received fewer than five-thousand appeals. By FY 2009, that number had more than tripled — leaving a backlog of over thirteen thousand cases today.  This deluge of cases is the primary motivation behind the proposed rule changes.  The office is looking for ways to ensure that the BPAI can make better decisions in a more timely manner.  

The BPAI rule change has been something of a debacle — perhaps largely due to a backlash against the unrelated claim and continuation rule changes. The BPAI rules were proposed in 2007 and finalized in June 2008 with a December 10, 2008 effective date. However, on the day before its implementation, the USPTO withdrew the rules based on a failure to follow OMB information collection rules.

Specific “changes-to-the-changes” being considered:

• (1) Deleting portions of the rule that require the filing of a petition to the Chief Administrative Patent Judge seeking extensions of time to file certain papers after an appeal brief is filed in an ex parte appeal or seeking to exceed a page limit;
• (2) deleting portions of the rule that require the filing of a jurisdictional statement, table of contents, table of authorities, and statement of facts in appeal briefs, a table of contents, table of authorities, and statement of additional facts in reply briefs, and a table of contents and table of authorities in requests for rehearing filed in ex parte appeals;
• (3) deleting portions of the rule that require an appellant to specifically identify which arguments were previously presented to the Examiner and which arguments are new;
• (4) deleting portions of the rule that require specific formatting requirements and page limits for appeal briefs, reply briefs, and requests for rehearing; and
• (5) deleting portions of the rule that require appellants to provide a list of technical terms and other unusual words for an oral hearing. The Office is also considering a revision to the final rule so that an examiner may continue to enter a new ground of rejection in an examiner's answer (as is allowed under the current rules).
• the Office is also considering not allowing an examiner to file a supplemental examiner's answer in response to a reply brief.
• the Office is also considering revising the final rule to make clear that the Chief Administrative Patent Judge, rather than the Board, may remand an application to the examiner.

Documents:

• December 2009 BPAI Rule Modification Proposals (Note, the newest proposals are written in an odd way because they are modifications of the previously finalized rules).
• June 2008 Final Rules [Discussion on Patently-O]
• August 2004 Rules (Present Rules in Practice found at 37 CFR 41.30 – 41.54)

 

Patent Law Exam: Pioneering Patents

Here is the ‘policy question’ from my 2009 patent law exam:

Essay 3 (15 points)

 

Congressman I. N. Venter has proposed an amendment to the Patent Act that would create a special right known as a “pioneering patent.” According to the proposal, pioneering patents would be awarded for inventions that are both the product of genius and that dramatically alter the technology landscape. Examples might include the airplane and the polymerase chain reaction (PCR).  The pioneering patent would require greater evidence of nonobviousness, but the applicant would be allowed to pursue broader claims that might not otherwise satisfy the enablement and written description requirements of Section 112.  What are the pros and cons of this proposal? Would a better approach be to extend the patent term a number of additional years for inventions determined to be pioneering? (I.e., longer patents instead of broader patents).

 

 

Patently-O Bits and Bytes No. 308

• Microsoft has released a patch which it believes brings Word 2007 within compliance of the permanent injunction order issued by the court in i4i v. Microsoft.  The patch is “required for the United States” and blocks updated versions of Word from reading “the Custom XML elements contained within DOCX, DOCM, or XML files.” According to the documentation, the DOCX files will continue to open, but any “Custom XML elements will be removed.” The documentation concludes that such custom XML elements are “not typically used by most end users of Word.” [LINK][About i4i v. Microsoft]
• I recently ran across a blog by Franklin Pierce Law Student Trent Ostler: A Budding Patent Lawyer’s Perspective.
• BPAI Rules: The USPTO is reconsidering new BPAI briefing rules. I will post more on this in the coming days. Of immediate importance to practitioners is the notice that as of mid-January, all briefs must comply with rules now-in-place.  (This ends a probationary period where the BPAI accepted briefs filed under the not-yet-effective new rules.)
• BPAI Rules: Find them at 74 FR 67987 [File Attachment: E9-30402.pdf (233 KB)] 
• In a December 16, 2009 statement, Rep. John Conyers made a statement on the House Floor in “gratitude for the service of George C. Elliott.”  Elliott spent two years (2007 and 2009) with the Judiciary Committee but is now returning to the USPTO as co-director of TC 1600.
   

USPTO Seeks to Rehire Limited Number of Former Examiners

The USPTO has had a fairly large attrition rate over the past 15 years. Part of the cause of the attrition has been within USPTO. However, I believe that the real driving forces have been (1) the private great demand during that time for patent law professionals; and (2) the fact that many of the USPTO new hires were young college graduates who expected to leave their first job within a couple of years.

Training of replacement examiners is slow and expensive and also frustrates patent applicants who expect a professional examination for their $1000+ fee.

Now that the private law market has shifted, the USPTO now sees its opportunity to hire experienced individuals — folks who will “hit the ground running” and who will likely be more stable in their life goals. As a first step, the USPTO is “reaching out to former patent examiners, inviting them to return to the agency.”

In a media quote, USPTO Director David Kappos said: “These examiners can have an immediate impact on the patent examination backlog and reducing the backlog is our top priority.”

The immediate limited program is focused on former examiners who passed their probationary requirements and who resigned less than three years ago or have more than three years experience examining patents. See www.USAJobs.gov (GS 9–14).

Patently-O is Closed for the Season

A method for reducing a latent distance 20. 

Patent Law Bits and Bytes: Holiday Cheer

• Attorney Marketing professional Robert Denney publishes an annual year-end report entitled "What's Hot and What's Not in the Legal Profession." First on his list for What's Hot: Intellectual Property. Not only litigation. Patent prosecution is heating up again. [LINK]
• One of the more interesting aspects of the recent i4i decision involved the Federal Circuit's interpretation of the first eBay factor: that the patentee "has suffered an irreparable injury." The court held that evidence of past irreparable harm is sufficient to satisfy the requirement of the first factor since the term "has suffered" indicates a past event. [Link] This is only odd because a primary purpose of equitable relief is to prevent future harm.
• Judge Rader will be riding circuit next year. He is scheduled to preside over the patent infringement trials for three Eastern District of Texas Cases. (Based on pacer documents and a preliminary report by Michael Smith.)
• Widevine v. Merimatrix, Case No. 07–cv-0321; Patent No. 7,165,175.
• Performance Pricing v. Google, Case No. 07–cv-0432; Patent No. 6,978,253.
• IP Innovation v. Red Hat & Novell, Case No. 07–cv-0447; Patent Nos. 5,072,412 and 5,394,521.

Appellate Court Enforces Permanent Injunction against Microsoft Word

By Dennis Crouch

i4i Limited Partnership v. Microsoft Corp. (Fed. Cir. 2009) (Judges Schall, Prost, & Moore; opinion by Judge Prost)

The i4i district court decision created some turmoil this past summer when the Eastern District of Texas court ordered Microsoft to stop selling versions of its flagship MS Word product that infringe i4i's patent covering xml editing technology. The injunction was stayed pending appeal, but now the Court of Appeals for the Federal Circuit (CAFC) has affirmed the lower court's findings of validity and willful infringement and its award of enhanced damages and permanent injunctive relief. The only modification made by the court was to push-back the effective date of the injunction from sixty-days to five months (from the original order). Thus, "[t]he injunction's effective date is now January 11, 2010."

To be clear, the permanent injunction "applies only to users who purchase or license Word after the date the injunction takes effect. Users who purchase or license Word before the injunction's effective date may continue using Word's custom XML editor, and receiving technical support." Beginning January 11, 2010, Microsoft will be prohibited from "(1) selling, offering to sell, and/or importing into the United States any infringing Word products with the capability of opening XML files containing custom XML; (2) using Word to open an XML file containing custom XML; (3) instructing or encouraging anyone to use Word to open an XML containing custom XML; (4) providing support or assistance that describes how to use Word to open an XML file containing custom XML; and (5) testing, demonstrating, or marketing Word's ability to open an XML file containing custom XML."

Because the injunction only applies to future purchasers, Microsoft does not need to back-fix its already-distributed software. Rather, it only needs to ensure that software sold on or after January 11, 2010 is non-infringing. Microsoft may request another emergency stay of relief in order to seek en banc review of the decision. However, that process has a low likelihood of success. Because of the large damage award of $240 million, Microsoft will likely push-forward with requests for rehearing en banc and eventually a petition for a writ of certiorari to the U.S. Supreme Court.

Judging Injunctive Relief: A patentee seeking a permanent injunction must show that (1) it has suffered an irreparable injury due to the infringement; (2) remedies available at law (typically monetary damages) are inadequate to compensate for that injury; (3) considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) the public interest would not be "disserved" by a permanent injunction. eBay, 547 U.S. at 391. Here the irreparable harm was proven by "evidence that Microsoft's infringement rendered i4i's product obsolete for much of the custom XML market, causing i4i to lose market share and change its business strategy to survive." Monetary damages were inadequate because "a loss of market share, brand recognition, and customer goodwill" typically defy valuation "particularly when the infringing acts significantly change the relevant market, as occurred here." The balance of the hardships favor i4i because the patented technology is "central" to i4i's business, but only a small factor in Microsoft's business. Here, the court held that the "cost of redesigning the infringing products" is irrelevant to the hardship consideration. "Microsoft is not entitled to continue infringing simply because it successfully exploited its infringement." Likewise, the public interest favors upholding patent rights especially here where the injunction is of a "narrow scope." "By excluding users who purchased or licensed infringing Word products before the injunction's effective date, the injunction greatly minimizes adverse effects on the public."

Notes:

• I4i Appellate Briefs
• Microsoft v. i4i: Relevance of the Pending Reexamination
• Microsoft Ordered to Stop Selling MS Word
• Microsoft Requests Emergency Stay of Injunctive Relief

Patentable Subject Matter of a Machine that Uses a Mathematical Algorithm

Ex Parte Gutta (BPAI 2009)(Precedential)

In its fourth precedential opinion of 2009, an enlarged panel of the BPAI has created a new test for judging whether a claimed machine (or article of manufacture) that takes advantage of a mathematical algorithm falls within the patentable subject matter requirements of 35 U.S.C. Section 101. The two-part test parallels the Federal Circuit’s Bilski decision that focused on the patentablility of method claims. Of course, Bilski is now pending before the Supreme Court and a decision is expected in the Spring of 2010.

The BPAI’s test for a claimed machine (or article of manufacture) involving a mathematical algorithm asks two questions. If the a claim fails either part of the two-prong inquiry, then the claim is unpatentable as not directed to patent eligible subject matter.

(1) Is the claim limited to a tangible practical application, in which the mathematical algorithm is applied, that results in a real-world use (e.g., “not a mere field-of-use label having no significance”)?

(2) Is the claim limited so as to not encompass substantially all practical applications of the mathematical algorithm either “in all fields” of use of the algorithm or even in “only one field?”

In Gutta, the BPAI applied its new test to find its system claim unpatentable. Gutta’s system claim (claim 14) includes two coupled components — namely a memory and a processor.  The claim indicates that the processor is configured to identify a “mean item” whose symbolic value minimizes the variance of a set.  On those facts, the BPAI found that the claim failed the first prong by not limiting itself to any “tangible practical application in which the mathematical algorithm is applied that result in a real-world use.” Likewise, the claim failed the second prong because it “encompasses substantially all practical applications” of the algorithm.  “That is we are unable to identify any other practical application [of the algorithm] outside of the broadly defined claim.”

Interestingly, the decision was issued in August 2009, but made precedential in December 2009. By then, Gutta had abandoned the application. The patent application (SN 10/014,192) is assigned to Koninklijke Philips Electronics.

 

 

 

 

Patently-O Bits and Bytes NO. 306

• A University of Missouri student and entrepreneur was recently sued by the North Face for trademark infringement. The student’s company is called “the South Butt.” On the issue of confusion, the South Butt’s attorney indicated that the public knows the “difference between a face and a butt.” [AP]  The complaint [Download NorthFaceComplaint] includes allegations of trademark infringement, dilution (which does not require proof of confusion), false designation of origin, contributory trademark infringement, common law trademark infringement, common law unfair competition, and violation of the Missouri anti-dilution statute.  I think that SouthButt has a good chance of winning the straight trademark claims based simply on likelihood of confusion.  The defense of parody often turns on the judge's sense of humor.  
• The judge assigned to the South Butt case (Judge Sippel) has presided over several trademark cases in his 12 years on the bench.  His most recent case involves a solar panel manufacturer using the name PRG suing another company who had registered the domain name PRG.com and was selling other solar panels on that site. Patterson v. ABS Consulting. The most recent opinion in that case involved the denial of the defendant's motion to dismiss for failure to state a claim. 
• Google has been ordered to stop scanning French books. The Google Book project has scanned upwards of 10,000,000 books. [NYTIMES]
• I just agreed to speak at the Texas IP Symposium two months from now in Austin (Feb 19). [Info will be available soon]
• Listen to Kevin Noonan (MBHB & PatentDocs) and Dan Ravicher (PubPat) debate Gene Patenting on NPR’s Science Friday. [Link]
• Recent Presumption if Irreparable Harm Cases:
• • Multiquip Inc. v. Water Mgmt. Sys. LLC, 2009 U.S. Dist. LEXIS 117022 (D.Id December 16, 2009)(in breach of contract case, holding that plaintiffs are given no presumption of irreparable harm in the context of a preliminary injunction)
  • Apple Inc. v. Psystar Corp., 2009 U.S. Dist. LEXIS 116502  (N.D. Cal. December 15, 2009) (“Except for trademark infringement claims, there is no presumption of irreparable harm with respect to permanent injunctions.”)
  • BorgWarner, Inc. v. Dorman Prods., 2009 U.S. Dist. LEXIS 115871 (E.D.Mich. December 11, 2009) (in a patent case, finding that the presumption of irreparable harm had not been overcome in the context of a preliminary injunction)
  • Bushnell, Inc. v. Brunton Co., 2009 U.S. Dist. LEXIS 110612 (D. Kan November 25, 2009)(“The Court is persuaded by the reasoning of those courts which have found that the presumption does not apply to preliminary injunctions in patent cases.”)
• See also (cites from Bushnell opinion),
• • Voile Mfg. Corp., 551 F. Supp.2d at 1306 (eBay eliminated presumption of irreparable harm in preliminary injunction context);
  • Tiber Labs., LLC v. Hawthorn Pharms., Inc., 527 F. Supp.2d 1373, 1380 (N.D. Ga. 2007) (eBay eliminates presumption of irreparable injury in patent cases, whether raised at preliminary or permanent injunction phase);
  • Sun Optics, Inc. v. FGX Int'l, Inc., No. 07-137-SLR, 2007 U.S. Dist. LEXIS 56351, 2007 WL 2228569, at *1-3 (D. Del. Aug. 2, 2007) (presumption of irreparable harm in preliminary injunction analysis did not survive eBay);
  • Torspo Hockey Int'l, Inc. v. Kor Hockey Ltd., 491 F.Supp.2d 871, 881 (D. Minn. 2007) (same);
  • Chamberlain Group v. Lear Corp., No. 05 C 3449, 2007 U.S. Dist. LEXIS 56351, 2007 WL 1017751, at *5 (N.D. Ill. March 30, 2007) vacated on other grounds, 516 F.3d 1331 (Fed. Cir. 2008) (same);
  • Canon Inc. v. GCC Int'l Ltd., 450 F.Supp.2d 243, 254 (S.D.N.Y. 2006) (consistent with equitable principles set out in eBay, preliminary injunction movant must demonstrate likelihood of irreparable injury in absence of requested injunction);
  • z4 Techs., Inc. v. Microsoft Corp., 434 F.Supp.2d 437, 440 (E.D. Tex. 2006) (eBay eliminated irreparable harm presumption in permanent injunction context)).
• But see
• • Christiana Indus. v. Empire Elecs., Inc., 443 F.Supp.2d 870, 884 (E.D. Mich. 2006) (eBay did not eliminate presumption);
  • Idearc Media Corp. v. Nw Directories, Inc., 623 F. Supp. 2d 1223, 2008 WL 2185334, at *9 (D. Or. 2008) (copyright case).

Gifts for a Patent Attorney: The Patent Office Director Game!

The USPTO has released its patent pendency simulator so that you can play at home. 

The Patent Pendency Model (PPM) is a Simulation Tool that predicts patent production output based on actual historical data and input assumptions.   The model uses historical patterns in funding, staffing and pendency.  The model uses an interactive spreadsheet  to make calculations and to create graphs of predicted outcomes.

The Simulator works in Microsoft Excel. Players set various inputs each year, including the number of examiners hired, atrition rate, examiner overtime hours, examiner attrition rate, change in application filings, change in the percent of filings that are RCEs. (In the game, the PTO continues with its notion that RCE’s count as applications…)

Although not quite an FPS, the game is at least free!

• Directions: http://www.uspto.gov/patents/stats/patent_pend_model.jsp
• Play the Simulator: http://www.uspto.gov/patents/stats/pendency_model.xls

If you want to spend money:

PTO Asks for Comments on Improving Patent Quality

The PTO is on a mission to “improve the quality of the overall patent examination and prosecution process, to reduce patent application pendency, and to ensure that granted patents are valid and provide clear notice.”

To that end, the PTO recently released a Request for Comments (RFC) on Enhancement in the Quality of Patents. [PDF]. The RFC asks for public comment on ideas that the PTO can implement (without changes in the rules or laws or much increased expenditure) that improve patent quality and the quality of the examination process. Generally, the office is looking for practical suggestions of ways to obtain measurable quantites that are linked to meaningful outcomes.  The suggestions should all be directed toward the PTO’s goal of providing the strongest quality patent possible in the shortest time permits.

The RFC identifies seven categories of inquiry:

1. How should the office measure quality of the examination process as well as quality of the final product (issued or abandoned patent)?
2. What stages of the prosecution process should be most closely monitored for quality problems?
3. Are there ways to reduce pendency while increasing quality? (How has the flux of continuations and RCE’s impacted quality and pendency?)
4. What pilot prograrms are working: Peer-to-Patent; Pre-Appeal Brief Conference; First Action Interview; CLE for Practitioners? Ideas for pilots?
5. How should customers be surveyed for their information regarding patent quality?
6. Are there specific tools (software, processes, etc.) that the PTO should be using to increase quality?
7. Incentives: Are there ways to provide incentives to both applicants and examiners to improve quality?

The RFC additionally identifies “areas of particular USPTO interest”

1. Prior Art: How to identify the “best” prior art in ways that it can be used by an examiner.
2. Higher Quality Patent Applications: Are there ways that the USPTO can help (or push) applicants to write better applications that do a better job of describing the invention and that include claims in the initial application that actually take the prior art into consideration?
3. Comprehensive First Office Action: How can we measure whether examiners are doing a good job in their initial office actions? Are there better ways for examiners to communicate rejections?
4. Interviews: How should interviews be used in a way that improves quality and pendency?

Please e-mail comments to patent_quality_comments@uspto.gov by February 8, 2010.

In the context of this inquiry, a “quality patent” has been defined as:

A patent: (a) For which the record is clear that the application has received a thorough and complete examination, addressing all issues on the record, all examination having been done in a manner lending confidence to the public and patent owner that the resulting patent is most likely valid; (b) for which the protection granted is of proper scope; and (c) which provides sufficiently clear notice to the public as to what is protected by the claims. The present quality improvement effort has, as one goal, reduction of overall application pendency and is thus also directed towards identifying quality issues that give rise to process inefficiencies. The term ‘‘quality patent’’ as used herein does not include the economic value of the resulting patent, which is a result of market conditions and not the patent process itself. Rather, providing the strongest quality patent possible in the shortest time permits making the best use of a patent, given any set of marketing conditions.

Read the full RFC here before you add your comments: PDF.

Information on the Public Patent Advisory Committee

The USPTO’s Patent Public Advisory Committee (PPAC) is charged with reviewing the “policies, goals, performance, budget, and fees” of the USPTO.  The PPAC tends to work closely with USPTO upper management, including the director. PPAC members are public officials and are also paid by the government for their services at a rate well above my salary.

Although the PPAC serves only an advisory role, its members do have a direct-line to the PTO director that is mandated by statute.  Folks with particular concerns may do well to contact the members directly. Since the USPTO does not offer contact-information for these officials, so I thought I would do so here.

Current PPAC Members:

• Marc Adler, former Chief IP Counsel at Rohm & Haas, now an independent consultant. [Contact].
• Louis Foreman, product designer, inventor, and author. [Contact].
• F. Scott Kieff, professor at GWU Law School and Senior Fellow at Stanford’s Hoover Institution. [Contact].
• Damon Matteo, IP director (intellectual capital management) at the Palo Alto Reserach Center (parc). [Contact].
• Steve Pinkos, former Deputy PTO Director, now a lobbyist and IP Advisor. [Contact].
• Maureen Toohey, Patent attorney at her own law firm (Toohey Law Group). [Contact].

When have Novelty Rights Been Important?

In the next few days, I’ll be distributing a draft of my working paper on the role the invention date in ex parte prosecution.  I’m looking for citations for the following proposition:

Supporters of invention-date-based novelty rights argue that such rights, although rarely asserted, make a big difference in big cases. 

Ideally, I’m looking for cases outside of the interference context that turned on the ability of a patentee or patent applicant to antedate would-be prior art. Thanks for any help!!

The Presumption of Irreparable Harm?

By Dennis Crouch

In a non-precedential opinion, the Federal Circuit  recently decided the important and open question of whether the Supreme Court’s decision 2006 in eBay v. MercExchange eliminated the presumption of irreparable harm that has been traditionally associated with the ongoing infringement of a patent that has been valid and enforceable. Automated Merchandising Systems (AMS) v. Crane Co. (Fed. Cir. 2009). The AMS opinion (authored by Chief Judge Michel and signed by Judges Clevenger and Dyk) holds that there is no presumption of irreparable harm “based just on proof of infringement.”

[T]he district court relied on . . . the old presumption that harm from patent infringement was irreparable, [and consequently that] the burden was on the defendant to demonstrate that the potential harm from not granting a preliminary injunction was finite, calculable, and compensable. This is no longer the law, as these cases all pre-dated the Supreme Court’s decision in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 392-94 (2006), in which the presumption of irreparable harm, based just on proof of infringement, was discarded. The burden is now on the patentee to demonstrate that its potential losses cannot be compensated by monetary damages.

Interestingly, neither party raised the presumption issue in their briefs except for a footnote by the defendant Crane arguing that the question of “whether such a presumption still exists or applies here is not at issue in this appeal.”

In two prior cases, the Federal Circuit refused to consider this same question — instead deciding the cases on other grounds. In Broadcom Corp. v. Qualcomm, Inc., 543 F.3d 683 (Fed. Cir. 2008), the court indicated that “[i]t remains an open question whether there remains a rebuttable presumption of irreparable harm following eBay.” Likewise, in Amado v. Microsoft Corp., 517 F.3d 1353 (Fed. Cir. 2008), the court refused to consider the question. Incidentally, the court in AMS could have also avoided the issue because the lack of irreparable harm was one of two alternate justifications for its judgment. (The court also held that the patentee had not shown a sufficient likelihood of success on the merits.). Both the Broadcom and Amado opinions were written by Judge Linn. (The Broadcom panel included Judges Linn, Friedman, and Prost while the Amado panel included Judges Bryson, Clevenger, and Linn).  District court cases have been decided both ways, although the predominant approach is to deny the presumption and instead force the patentee to provide evidence of irreparable harm.

The AMS decision could be isolated as a preliminary injunction decision using the policy grounds that preliminary relief should require a higher standard of proof.  However, the court’s reliance on eBay (a permanent injunction case) suggests such isolation is incorrect. Another potential distinguishing feature is the AMS’s statement that “the presumption of irreparable harm, based just on proof of infringement, was discarded.”  Permanent injunctive relief is typically based on ongoing infringement (not just infringement) and typically include a judgment that the patent is valid (not invalid) and enforceable (not unenforceable).  Of course, those features were also present in the eBay decision that serves as the Federal Circuit’s source of law. 

Of course, the AMS case does not serve as precedent and future panels (and lower courts) are still free to fill-in-the-blank left by eBay.

The Interplay between Reexaminations, Preliminary Injunctions and Stays of Litigation

by Dennis Crouch

Automated Merchandising Systems (AMS) v. Crane Co. (Fed. Cir. 2009)(nonprecedential)

We are approaching the point that most patents being litigated are also undergoing a parallel reexamination at the patent office. Defendants file reexamination requests as both (a) a way to invalidated claims and (b) a litigation strategy.  One aspect of the litigation strategy is the notion that a district court may completely stay proceedings until the outcome of the reexamination (typically a multi-year delay). This case also suggests that a pending reexamination may help a defendant defeat a preliminary injunction. Finally, this case is important because it holds that a patentee has no presumption of irreparable harm based on proof of infringement.

AMS & Crane compete in the market for vending machines. AMS asserted patents cover the “use of optical technology to determine whether a [purchased product] has actually been delivered.”  In the infringement litigation, the West Virginia federal district court took the unusual approach of simultaneously (1) granting the patentee’s motion for a preliminary injunction and (2) granting the defendant’s motion to stay proceedings until the outcome of the copending reexamination.

The Federal Circuit has interlocutory jurisdiction over appeals from orders granting or denying preliminary relief. 28 U.S.C. § 1292(a)(1).  Using that jurisdictional hook – the court also considered the stay.  (The court also held that the right to appeal attaches once the PI motion is decided – regardless of whether a PI bond is posted.). 

The Federal Circuit has previously held that a “district court ordinarily should not grant both a preliminary injunction and a stay.” Procter & Gamble, 549 F.3d at 849 (Fed. Cir. 2008).  On appeal, the Federal Circuit reversed the preliminary injunction, but affirmed the stay.

Preliminary Relief: The equitable remedy of a preliminary injunction is governed by a four-factor test much like those outlined in the Supreme Court’s case of eBay v. MercExchange.  These four factors include: (1) the likelihood of the patentee’s success on the merits; (2) irreparable harm if the injunction is not granted; (3) the balance of hardships between the parties; and (4) the public interest.  In the factors for permanent injunctive relief is that preliminary relief considers the likelihood of success on the merits. That factor is not relevant to permanent relief because that injunction question is only asked after the patent has been held valid and infringed. The first two factors must each be established before preliminary relief may be granted. Thus, although identified as factors, they are more properly seen as required elements.

On appeal, the Federal Circuit found that the district court had abused its discretion in finding that the patentee had established a likelihood of success and irreparable harm.

Irreparable Harm: In a definitive statement, the appellate panel held that there is no presumption of irreparable harm “based just on proof of infringement.” Although prior cases have found a presumption, those cases were overturned by eBay.

[T]he district court relied on . . . the old presumption that harm from patent infringement was irreparable, [and consequently that] the burden was on the defendant to demonstrate that the potential harm from not granting a preliminary injunction was finite, calculable, and compensable. This is no longer the law, as these cases all pre-dated the Supreme Court’s decision in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 392-94 (2006), in which the presumption of irreparable harm, based just on proof of infringement, was discarded. The burden is now on the patentee to demonstrate that its potential losses cannot be compensated by monetary damages.

In looking at the patentee’s evidence of irreparable harm, the Federal Circuit held that its evidence of lost sales and arguments of lost market share were insufficient. “[L]ost sales standing alone are insufficient to prove irreparable harm” because they are presumed to be compensable through damages. Lost market share and price erosion could lead to a conclusion of irreparable harm. However, those must be proven or “at least substantiated with some evidence” and shown to be caused by ongoing infringement. 

More Than de Minimis: The patentee did provide evidence of one lost contract (Mountain Coin Machines) due to the ongoing infringement. However, the Federal Circuit rejected that “loss of one distributor” as sufficient to show irreprable harm. “We cannot agree that, under the circumstances of this case, the defection of a single distributor from the patentee’s camp to the accused infringer’s camp is sufficient to demonstrate irreparable harm.”

Likelihood of Success: The patentee must show that it is “reasonably likely to succeed in the case-proper in order to win a preliminary injunction. In other cases, the Federal Circuit has held that a “substantial question” of patent validity is sufficient to derail a preliminary injunction. On appeal here, the Federal Circuit found such a substantial question based on the prior-art presented by the defendants.  Most of the court’s analysis, however, is directed at the district court’s analysis that was “too quick to dismiss Crane’s invalidity argument.” 

Reexamination and Likelihood of Success: Although dicta, the court suggests that the PTO’s decision to reexamine the pending reexamination also impacts the likelihood of success because reexamination is premised on a decision that the patent faces a “substantial question of patentability.”

Because it logically seems that there cannot simultaneously be a substantial issue of patentability and no substantial issue of patentability, stays pending reexamination are typically inappropriate in cases in which preliminary injunctions are appropriate.

The Federal Circuit’s suggestion is off-base for many reasons – most notably that the PTO grants reexamination requests in almost every case.  Interestingly, the one reexamination request from this case that I pulled-up (90/009,231) was denied by the PTO because the submitted reference was not prior art. 

Based on the adjudged “weaknesses” of the patentee’s proof of likelihood of success and irreparable harm, the Federal Circuit reversed the lower court’s grant of preliminary relief.

Stay Pending Reexamination: A court’s discretion in managing its docket appears broader than its discretion in granting or denying injunctive relief. Here, the Federal Circuit gave the challenge to the stay only cursory review.

AMS’s claims against Crane are still in their very early stages: Crane requested the stay only two months after the complaint was filed, and the district court entered the stay order before any discovery was conducted. Because the stay was granted pending the outcome of patent reexamination proceedings, it may simplify the issues for trial. It might even render a trial unnecessary. Given these facts, and given the wide discretion the district court generally has to manage its docket, this seems to be a case in which the stay could have been correctly granted or denied. We cannot say that the district court abused its discretion here by granting the stay.

Stay affirmed.

Notes: PAIR Docket Information

 

The Role of the Patentee's Expert in Proving Infringement

Intellectual Science and Technology v. Sony Electronics (Fed. Cir. 2009).

This decision follows a long line of cases warning against the use of means-plus-function claim language. The decision should also be seen as guidance to technical experts (to be more technical).

Intellectual Science's Patent No. 5,748,575 covers a computer configured to simultaneously access multiple optical discs (such as CD-ROMS). According to the description, an "intelligent time-division multiplexer" is used to combine the multiple information sets into a single data stream for the host computer to process. Following the advice of an appointed special master, the district court on summary judgment held the patent not-infringed. On appeal, the Federal Circuit affirmed.

The appeal focused on the claimed "data transmitting means." The parties agreed that the limitation should be interpreted under 35 U.S.C. 112p6 as a means-plus-function term. The dispute turned on whether the claimed means covers the accused device.

For a means-plus-function claim term, the term literally covers an accused device if the relevant structure in the accused device performs the identical function recited in the claim and that structure is identical or equivalent to the corresponding structure in the specification.

The patentee's problem was that its technical expert's report failed to tie the accused device to the claimed means and its corresponding structures found in the patent specification.

[T]he problem . . . is the absence of any showing that the identified structure accomplishes the same function in the same way as the claimed structure. . . . [T]he record must specifically identify the infringing features of those components and the reason that one of skill in the art would recognize them as infringing. Without that further identification and explanation, a reasonable juror would not be able to determine that those allegedly infringing components are actually present.

A court can properly find summary judgment of non-infringement if the patentee's expert fails to provide "foundation for his infringement opinion in sufficient detail for the court to be certain that features of the accused product would support a finding of infringement under the claim construction adopted by the court, with all reasonable inferences drawn in favor of the non-movant." Here, the Federal Circuit held that the patentee's expert had failed that test.

Judgment of NonInfringement Affirmed.

Notes: There is nothing "wrong" with writing means-plus-function claim language -- especially to accompany a well drafted specification. However, an applicant should not expect that its broadest claim is the MPF.

Claim 1 of the patent reads as follows:

1. An information processing apparatus with multitasking function, the information processing apparatus comprising:

   (a) a plurality of turntables, each comprising a disc-setting table for mounting an optical disc;

   (b) a plurality of optical units, each comprising a driving means and an optical read head, wherein said driving means is provided for moving said optical read head in a radial direction of said optical disc to a predetermined disc position on a surface of said optical disc;

   (c) means for simultaneously controlling a plurality of said driving means to move a plurality of said optical read heads to a plurality of predetermined disc positions on at least two optical discs for retrieving information stored thereon;

   (d) a plurality of signal-process systems for converting a plurality of information sets retrieved by said plurality of optical read heads from a compact disc format to the original state of the information; and

   (e) data transmitting means for transmitting a plurality of the information sets converted by said plurality of signal-process systems to a host computer.

Judge versus Jury (Again): Who Should Decide the Question of Obviousness?

Acushnet Co. v. Callaway Golf Co . (on petition for certiorari 2009)

The Supreme Court recently rejected Medela's petition for certiorari arguing that the conclusion of obviousness should be made by a judge rather than a lay jury.

In the wake of Medela's failure, Acushnet (maker of Titleist) is now asking the Supreme Court to hold that "a court reviewing a jury's [obviousness] verdicts must always independently render its own legal conclusion regardless of whether one or all of the jury's underlying findings are accepted as adequately supported by the evidence." Taking that a step-further, Acushnet argues that a jury's verdict on the question of obviousness should be seen as "entirely advisory as to the ultimate legal conclusion."

Ascushnet takes-issue with the Federal Circuit's holding that the "jury could have reasonably concluded that Acushnet failed to prove invalidity due to obviousness." In petitioner's view, the appellate panel should not have given any regard to the jury's legal finding.

AcushnetPetition.pdf

Cases where Written Description is Satisfied, but Enablement is Lacking

In Ariad, an en banc Federal Circuit is set to determine whether (and how) the written description requirement is separate and distinct from enablement. The questions presented read as follows:

1. Whether 35 U.S.C. § 112, paragraph 1, contains a written-description requirement separate from the enablement requirement.

2. If a separate written-description requirement is set forth in the statute, what is the scope and purpose of that requirement?

I'm interested in finding cases where the written description requirement has been critical to the outcome. More particularly, I'm interested in seeing cases where the invention is sufficiently described but is not enabled. The recent major written description cases are seemingly only tied to written description doctrine because the panels chose to focus on that argument rather than enablement. A case-in-point is Ariad v. Eli Lilly. As in most written description cases, Ariad's patent was also challenged on enablement grounds. However, rather than reaching the enablement question, the panel majority held that question moot in the wake of their finding that the asserted claims were invalid on written description. The same result occurred in University Of Rochester v. G.D. Searle & Co., Inc., 358 F.3d 916 (Fed. Cir. 2004) (holding that "in view of our affirmance of the district court's decisions [invalidating the claims] on the written description ground, we consider the enablement issue to be moot and will not discuss it further."). The LizardTech decision held the asserted claim invalid under both enablement and written description doctrines.

Using the language lf LizardTech, what are examples of cases where the specification provides enough disclosure "to convince a person of skill in the art that the inventor possessed the invention" but not enough to "enable such a person to make and use the invention without undue experimentation."

Best Mode at the BPAI

Ex parte Lin, Appeal No. 2009-4275, Application No. 10/255,216 (BPAI October 30, 2009)

The Examiner rejected Lin's patent application for failure to comply with the best mode requirement of 35 USC § 112p1. The Board reversed that rejection because Lin had not disclosed any embodiments. "The best mode provision of 35 U.S.C. § 112 is not directed to situations where no mode has been set forth, and therefore we cannot sustain this rejection." (Citing Spectra-Physics and In re Glass)

Although Lin won that argument, the board affirmed parallel rejections of lacking enablement, utility, and definiteness.

Under the Federal Circuit's 2002 precedent of Bayer v. Schein Pharma, the best mode requires "actual disclosure regardless of whether [the best mode] would be within the knowledge of one of ordinary skill in the art."

Predicted 2009 Patent Application Filings

via CNN in an article titled: "Recession's latest victim: U.S. innovation."

Dennis Crouch's Comment: Patent filings are clearly down, but I don't know that I agree with the reporter's conclusion that therefore "U.S. innovation took a step backward for the first time in 13 years."

There is almost certainly a link between patenting and innovation. However, a single-year drop in patenting does not necessarily correlate with a drop in innovation -- especially since there is often a lag of 6-12 months from the invention date to the utility patent filing date.

Further, I tend to attribute huge rise in patenting activity over the past two decades more to a perceived strengthening of the patent right and less to an actual increase in innovations. In recent years, court decisions and threatened action from congress may have reduced the perceived potential value of the patent right -- thus lowering demand. Perhaps now, applicants are filing fewer 'junk' patents.

Finally, the report also misses the reality that about half of US patent applications stem from a non-US entity and those filings often have a multi-year lag between the innovation and the US patent application filing. It will be interesting to see which group (US vs. Foreign entities) have seen greater reduction in their patent filing activity.

First-to-File versus First-Inventor-to-File

In the US, an inventor's evidence of pre-filing conception, diligence, and reduction-to-practice can help win a priority contest against a competing inventor and can also negate would-be prior art. Around the world, the vast majority of other countries ignore pre-filing invention activity -- instead relying only on an inventors patent application filing date to establish priority. Colloquially, we call the US system a "first-to-invent" (FTI) while the non-US systems are referred to as "first-to-file" (FTF).

Yesterday's guest post discussed the potential legislative change to US patent law that would largely eliminate any consideration of pre-filing invention evidence. Interestingly, the authors refer to the potential new system as "first-inventor-to-file" (FITF) as a way to distinguish between our traditional FTI system and the European FTF system.

Although the guest authors here used the term as a way to distinguish, my experience is that the first-inventor-to-file (FITF) terminology is more frequently used as a propaganda tool by proponents of the new US legislation. By adding "inventor" to the name, proponents of the switch are hoping to sideline the FTI argument that a later inventor is not actually an inventor. Perhaps most notable on this front is PTO Director David Kappos. In a recent article directed to independent inventors, Kappos repeatedly referred to the benefits of the "first-inventor-to-file" system. [Link] In a recent speech, Director Kappos also distinguishes between FTF and FITF systems -- suggesting that a FTF system allows non-inventors to file patent applications.   

The new process isn’t a “first to file” system, it’s the “first inventor to file” system. So there is no risk of someone who learns about your invention being able to beat you to the patent office; because they’re not an inventor. As you know, any filer has to sign an oath and declaration under penalty of criminal sanctions. [Link]

Of course, there is no country in the world today that grants patents on stolen ideas. (Although some, including the US historically allowed what might be termed "patents of importation.")

Invention-Date-Focused vs. Filing-Date-Focused: I would argue that all of these naming systems are incorrect because they improperly focus attention on the priority contests between two inventors claiming rights over the same subject matter. Most priority issues arise in the context of putative prior art reference used in an obviousness analysis and the question is whether the invention date evidence can be used to negate the prior-art effect of the reference. In that context the FTI and FTF language do not really make sense. I would propose a switch in terminology to distinguish between systems that are filing-date-focused and those that are invention-date-focused.

The "Matrix" for First-Inventor-To-File: An Experimental Investigation into Proposed Changes in US Patent Law

Guest Post by Brad Pedersen and Justin Woo (Read their Full Article at http://ssrn.com/abstract=1518660)

The Patent Reform Act of 2009 would replace the current “first-to-invent” (FTI) system with a new “first-inventor-to-file” (FITF) system. While touted as a way to harmonize the US system with “first-to-file” (FTF) systems used in other countries, an experimental investigation of a matrix of two hundred typical fact patterns for two competing inventors was analyzed under all three systems (FTI, FITF and FTF) to test this assumption. Based on the matrix analysis, it appears that if FITF is adopted there likely will be changes in applicant behavior and significant extra costs for at least several years as a result of the transition to a new system; and, it is unclear whether FITF really gets the US any closer to patent harmonization.

 Caption: Scenarios where both parties have filed applications

The proposed FITF system has a tendency to behave as an entirely different system in certain scenarios, rather than as a midway point between the existing FTI and FTF systems. A raw analysis of the results reveals a discrepancy wherein a larger percentage of second inventors are awarded a patent under the FITF system than predicted by a shift toward a FTF system. A weighted analysis reflecting likely applicant behavior from the implementation of the FITF system emphasized, rather than diminished, these discrepancies with expected results.

It appears that the “springing public disclosure” exception created under the proposed FITF system to replace the one-year grace period found in current US patent law is one of the primary reasons for the discrepancies. This exception allows applicants to control the start of the grace period that disqualifies the public disclosures and even prior filed applications of others from being prior art based on the timing of the applicant's own public disclosure. The springing nature of this exception provides unique incentives for applicants to manipulate the timing of the public disclosure of their inventions in order to manipulate the grace period, thereby creating results seemingly inconsistent with core principles of the existing FTI and FTF systems.

For a link to the entire paper, go to:http://ssrn.com/abstract=1518660

The Requirement that the Written Description be Concise

By Dennis Crouch

The Patent Act requires that the written description of an invention be “concise.”  35 U.S.C. 112p1. The meaning of that requirement is unclear, but but the language of Section 112 at least suggests that a written description needs to be concise in order to satisfy the enablement requirement. Of course, there is a tension between providing a disclosure that is “concise” and at the same time “full.” In Markman v. Westview, the Supreme Court recognized this tension — noting that the description must be “complete yet concise.”

In a 1967 district court case, the court focused briefly on the requirement — noting that the “descriptions contained in the patent in suit are sufficiently concise and clear to enable one skilled in the art to construct that which is taught by the patent.” San Marino Electronic Corp. v. George J. Meyer Mfg. Co., 155 U.S.P.Q. (BNA) 617 (C.D. Cal. 1967).

In my brief search, I found no cases invalidating a patent because its description was not concise. The most on-point case appears to be a pre-1952 Eighth Circuit case where the court came close to invalidating a family of patents based on their wordiness:

We think that the patents are unnecessarily prolix in verbiage and there should have been fewer claims more simply stated. They border on failure to comply with the statutory requirements concerning succinct description and particular pointing out and claiming. But consideration of the file wrappers and the trial court record has persuaded that those skilled in the art have understood them and the courts have had them explained.

National Aluminate Corp. v. Permutit Co., 145 F.2d 175 (8^th Cir. 1944). It is interesting that part of the court’s problem with the patents was that they had too many claims. The USPTO does reject individual claims that it deems overly wordy or “prolix.” The idea behind those rejections is that sometimes overly-wordy claims may have the “net result of which is to confuse rather than to clarify.” However, the USPTO prolix rejections are grounded in Paragraph 2 of Section 112 — for failing the requirement of “particularly pointing out and distinctly claiming the subject matter.”

The probably more accepted use of the “concise” requirement is explained in the decision captioned Application of Knowlton, 481 F.2d 1357 (C.C.P.A. 1973). In that case the precurser to the Federal Circuit relied on the requirement to limit the power of the enablement requirement.

[I]t must be borne in mind that the disclosure need not only be full, clear and exact to satisfy the statute, it must also be concise, and that the disclosure is directed to those skilled in the art. The amount of precision necessary in any given case is always a matter of degree. Absent special circumstances it is not required that every nut, bolt and rivet actually used in mechanical inventions be described, or, in chemical cases, that the electron orbital patterns for a claimed compound be set forth.

In the right case, a defendant may well convince a court to give the concise requirement its full weight and invalidate a patent whose specification is written in confusing and overly-wordy language.

Notes:

• The Rising Size and Complexity of the Patent Document
• I searched the BPAI database of decisions (1997–2009) and found only one case reviewing a rejection where the Examiner found claims invalid as prolix “since they contain long recitations or unimportant details which hide or obscure the invention.” Ex parte Nagano, App. No. 1996–4094 (Bd. Pat. App. Inter. 1999). In Nagano, the Board reversed the rejection – finding no support for the Examiner’s generalized assertions that the claims were confusing because of their length or contained unimportant details.

Patently-O Bits and Bytes No. 305

• Worksharing: Website of the five IP Offices: http://www.fiveipoffices.org.
• GoogleNexis?: Google Scholar now includes judicial opinions and law review articles. [Link] The site does a nice job of ranking opinions according to citation history. However, as with their patent database, Google's caselaw database does not appear to be kept up-to-date. The search features will be useful as a powerful free first-cut, but attorneys will not use the site for any type of comprehensive search or full citation-check. As Law School Librarian Richard Leiter wrote, "I don't think that West or Lexis have much to worry about."
• ABANexis?: If you want to search only law reviews (that are available online), you might look at the ABA's Search Engine (powered by Google). [Link]
• Is the 1981 CCPA case of Rasmussen still good law? [Updated with the right year of the case]

Patents and the Movie Industry: Stopping Nicholas Cage

By Dennis Crouch

Global Findability v. Summit Entertainment (D.D.C. 2009)

In an earlier post, I reported on an odd complaint that charges Summit Entertainment with patent infringement based on that company's making and distributing the film "Knowing" that stars Nicholas Cage. In preparation for this post, I watched the movie this past weekend and also contacted the attorneys representing Global Findability.

In the movie, Cage plays the role of an MIT physics professor who sees a string of numbers and correctly determines that those numbers represent prophetic information about particular catastrophic events. In particular, the string of numbers were indicative of the coordinates of the event (lat and long) as well as the date and number of people killed in each event. (Screenshot below). It turned out that the numbers were whispered to little kids by angels/aliens. (I thought they were angels, but my daughter (age 5) thought they were aliens.) The kids then wrote-down the numbers.

As it turns out, Global Findability's asserted patent (No. 7,107,286) covers devices, mediums, and methods for storing global position information (longitude, latitude & altitude) as a single "all natural" number.

Without revealing their particular theory of infringement, Global Findability's attorney agreed that the allegation is "based on the claimed method being performed in the movie." In perhaps the most relevant sequence from the movie, Cage's character identifies a particular sequence of numbers and enters them into Google Maps as a latitude and longitude. The result is a New York City location. Those latitudes and longitudes appear to be actual (rather than made-up) -- providing some amount of credibility to the claims of infringement.

As far as I know, this is the first time that I have seen charges of infringement based upon a performer's actions.

If the case continues to judgment, its outcome will likely turn on questions of infringement and patentable subject matter. Notably, the asserted method is for encoding the single number, while Cage's character only decoded the material. Likewise, there was no indication that the child-actors writing the codes performed the "converting step." Rather, that was done by the angels/aliens presumably acting outside of the US. See RIM v. NTP (each step of a method must be performed within the US). Of course, in creating the script/props, the production company most likely performed the encoding step. One problem with that theory is that the movie was filmed in Australia. These issues could be eliminated if the plaintiffs somehow proved that the "use" distributing/screening the film involved "use" of the method. However, in my mind that theory is extremely lacking.

This case is also interesting as it sits in the shadow of the Supreme Court's hearing in Bilski v. Kappos. That case questions the patentability of newly created methods that are not directly tied to a "machine." In 2004, Andrew Knight filed a series of patents covering various storylines or plots. Cleverly, Knight included a limitation that the plot is within a movie stored on a DVD (or other computer-readable file). Those patents have been rejected as lacking patentable subject matter under Section 101 and are now on appeal to the Board of Patent Appeals (BPAI). In his rejection, the examiner indicated that:

"It is only the technological uses of ... ideas that are patentable -- not merely the association of technology with those ideas. Recording a movie on a DVD is not a patentable technological use [of] and idea because ... this does not do anything unexpected or novel. DVDs play movies. Recording a movie that has a different plot on a DVD does not change the technology of the DVD."

As is often the case, the Examiner's conclusions regarding Knight's patent applications likely correct even though his explanation is lacking.

Notes: During prosecution, the applicant (Global Findability) amended the claims to indicate that the single number representation of location was an "all-natural" number. That point was boldly emphasized in a response to an office action rejection. However, "all-natural numbers" are not defined in the specification or in the prosecution history.

Europe Moves Toward European Patents and European Patent Court

The European Union (EU) is working toward a major reform of its patent laws that would create a European Patent and a European Patent Court for handling patent infringement litigation. Although the European Patent Office (EPO) serves as the primary examining body for most patents being prosecuted in Europe, the actual issuance of patent rights as well infringement litigation are still handled country-by-country.

In a December 4, 2009 meeting, a unanimous EU Competitiveness Council adopted a set of conclusions supporting the new regime. Under the proposal, the new patent court would have exclusive jurisdiction over civil litigation related to EU and European patents. The new regime would likely require a revision of the European Patent Convention (EPC).

The Leading UK Patent Blog IPKat indicates that this is "happy news." IPKat quotes a UK IPO press release that "This business-friendly deal will make patenting and innovating easier and more affordable for British companies. In particular, innovative SMEs will have more flexibility when choosing how to patent across Europe".

The EU Press Release suggests that lowering costs is one of the most important goals: "The creation of an EU Patent would help to improve the current situation where a patent designating only 13 EU Member States is already 11 times more expensive than a US patent."

Although more likely now than ever, this same debate has been ongoing for the past 40 years in Europe.

Links:

• IPKat
• CitySpur
• EU Press Release

Federal Circuit Lowers Bar for Declaratory Judgment Jurisdiction When Patentee is a Holding Company

Hewlett-Packard v. Acceleron 09-1283.pdf (Fed. Cir. 2009)

Acceleron's patent No. 6,948,021 covers a hot-swappable server blade. In September 2007, Acceleron wrote to "call [HP's] attention to the referenced patent." HP responded that they "would be willing to agree not to file" a declaratory judgment action for 120 days. Going back, Acceleron simply suggested that no declaratory judgment jurisdiction existed.

Rather than negotiating, HP filed a declaratory judgment action in Delaware District court. However, Judge Robinson dismissed that case - finding the potential for litigation by Acceleron "too speculative a prospect to support declaratory judgment jurisdiction."

On appeal, the Federal Circuit found Acceleron's actions were sufficient to support a declaratory judgment action -- a holding that the court admits "undoubtedly marks a shift from past declaratory judgment cases."

The Constitution limits federal court jurisdiction to actual cases and controversies. Under the Supreme Court's 2006 MedImmune decision, the question of declaratory judgment jurisdiction is answered after considering "all the circumstances" rather than any bright line rule. Subsequently, the Federal Circuit indicated that declaratory judgment jurisdiction exists when a patentee asserts rights against "certain identified ongoing or planned activity of another party, and where that party contends that it has the right to engage in the accused activity without license.” (Quoting SanDisk). Likewise, a party who has "actually been charged with infringement of a patent" will be able to identify declaratory judgment jurisdiction. (quoting Cardinal Chem).

Here, Acceleron argues that a patent owner should have some mechanism for contacting another party to discuss patent rights without raising declaratory judgment jurisdiction. Without disagreeing with that premise, the Federal Circuit held that this is not such a case.

Although Acceleron made no direct charges of infringement, the company did indicate that its patents were "relevant" to HP's product line; that HP's response must come within two-weeks; and asked HP not to file a DJ action. "Under the totality of the circumstances, therefore, it was not unreasonable for HP to interpret Acceleron’s letters as implicitly asserting its [patent] rights."

Although dicta, the Federal Circuit also suggested that the "totality of the circumstances" analysis should included the fact that Acceleron is "solely a licensing entity." That fact apparently creates a greater shadow of litigation because "without enforcement [Acceleron] receives no benefits from its patents."

David Kappos and The Impact of KSR – a unique opportunity for our profession

Guest Post by Paul Cole, Visiting Professor, Intellectual Property Law, Bournemouth University, UK

On Tuesday 24 November, David Kappos made a posting on the Director’s Forum including the following statement:

Some have suggested that the Office is determining obviousness in a way that stifles innovation by refusing patents for truly inventive subject matter. They’ve asked us to provide examples of non-obvious claims in view of KSR. Such examples would serve as a complement to the examples of obvious claims already in the guidelines.

David Kappos gave a presentation at the AIPLA Annual Meeting in Washington on October, and in a question and answer session that followed there were three questions which concerned KSR, more than any other topic. The two questioners who preceded me expressed dissatisfaction with seemingly unjust and arbitrary rejections for lack of inventive step. I asked whether the US examination guidelines on inventive step could be brought into line with those of the EPO, where positive and negative examples are carefully balanced, and the suggestion created a burst of applause from the audience.

More detained comments on the suggestion are found in a paper on KSR that was published in the John Marshall Review of Intellectual Property Law in 2008[1]. For convenience of reference, the final section is set out here:

The USPTO has been accused of having become significantly less applicant-friendly following the KSR decision. This may reflect concerns about “patent quality” and is reflected in the Guidelines given to examiners. A big difference is noticeable between the EPO Examination Guidelines and those of the USPTO.

The EPO Examination Guidelines at Part C Chapter IV give examples relating to the requirement of inventive step. Considerable care has been taken to balance these examples. Examples illustrating the application of known measures in an obvious way and in which inventive step can be ruled out are balanced by further examples showing the application of known measures in a non–obvious way and in which an inventive step is therefore to be recognized. An example of an obvious and consequently non-inventive combination of features is balanced by an example of a non-obvious and consequently inventive combination of features. Examples of obvious and consequently non-inventive selection are balanced by examples of non-obvious and consequently inventive selection. The single example relating to overcoming a technical prejudice shows a situation where the application should be allowed, not refused. A reader of these Guidelines is made aware that although many applications are open to objection, there are many others that cover meritorious inventions and should be allowed.

When the USPTO issued its post-KSR Guidelines, from the standpoint of a prosecution attorney they made depressing reading. For example, the first heading which refers to combining prior art elements according to known methods to yield predictable results gives two examples, one of which is Andersons-Black Rock, Inc. v. Pavement Salvage Co. and the other of which is Ruiz v SAB Chance Co. in both of which obviousness was established. There is no balancing example in which inventive character was established. There follow five other headings illustrated by examples, each and every one of which shows the claimed subject matter to be obvious. The final heading concerns the TSM test which is not illustrated by any example. Under the heading “Consideration of Applicants Rebuttal Evidence” there are cursory indications that an applicant might have something relevant to say in reply, and that, for example, they might argue that the claimed elements in combination do not merely perform the function that each element performs separately. Might it not have been a good idea to inform the Examining Corps that if an applicant can demonstrate a new and unexpected result, this is strong prima facie evidence of inventive step, that this fact is supported by several opinions of the U.S. Supreme Court and that where such evidence is available an applicant should unless there are compelling reasons to the contrary expect a grant decision to follow? Experience in the EPO is that where an applicant can demonstrate a credible technical problem that he has solved, he will almost always be granted a patent and that although other objections, e.g. “one–way-street” or “bonus effect” are available, circumstances where such objections succeed are rare, as acknowledged by the U.K. High Court in Haberman.

Instructions to examiners are of general importance to the public because they are the main tool used during examination and the important event for most applicants is grant or refusal by the patent office, litigation of patents (even in the U.S.) being uncommon. Instructions are even more important for examiners who are trainees and those who have only recently acquired signatory authority because they are likely to rely chiefly on those instructions and to take some time to achieve a deep understanding of case law. It is important to teach examiners when to make objections and the appropriate grounds for doing so, but is it not equally important to teach them when applications should be allowed and to show them examples of patents whose validity has been upheld, as the EPO does? Quality patent examination is not just a matter of ensuring that applications lacking merit are reliably refused but also of ensuring that meritorious applications are reliably granted.

It now seems that there is at least a chance that the suggestion that I and apparently others have made will be acted on, and that the possibility is under active consideration in the USPTO. Examples of decisions on new function or result which are contained in my paper include the nineteenth century Supreme Court cases Winans v Denmead and Washburn & Moen Manufacturing, Co. v. Beat’Em All Barbed-Wire Co, these decisions being selected on the basis of their instructive character and accessibility to the widest possible range of readers.

For the most to be made of this opportunity, we as students and users of the patent system can help by suggesting additional positive decisions which it would be good for the USPTO to include in the revised inventive step Guidelines. Hopefully readers will respond with references to good Board of Appeals, District Court and CAFC cases, and I look forward to reviewing a large number of hopefully constructive suggestions posted here in response.

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[1] Paul Cole, KSR and Standards of Inventive Step: A European View, 8 J. MARSHALL REV. INTELL. PROP. L. 14 (2008)., downloadable from http://www.jmripl.com/Publications/Vol8/Issue1/Cole.pdf.

Disclosing “Related Cases” at the Federal Circuit: Eli Lilly’s Written Description “Secret”

Guest Post by Ted Sichelman, University of San Diego School of Law

As any diligent reader of Patently-O would know, the Federal Circuit is considering en banc whether to retain the written description requirement—and, if so, in what form—in the pending case, Ariad Pharmaceuticals v. Eli Lilly & Co.

Lilly, which was found liable in the district court, argues in its en banc brief that the Federal Circuit should retain a strong and independent written description requirement. In the event Lilly’s arguments are successful—and Ariad’s patent is invalidated—Lilly stands to save roughly $250 million (in present value) of potential damages and likely settlement payments. (For an explanation of the calculation, click here.)

Yet, in another case pending at the Federal Circuit, Lilly v. Teva, Lilly—as the patentee—is on the other side of the fence on the written description issue. Specifically, Lilly appealed a finding that some of its patents are invalid for lack of written description. If Lilly wins this appeal, assuming infringement holds up, it stands to gain roughly $750 million (in present value) in on-going profits from the sale of its blockbuster osteoporosis drug Evista. (Ironically, Evista is one of the accused infringing drugs in Ariad.)

Thus, in simple dollar terms—focusing on Lilly’s pending patent cases at the Federal Circuit—Lilly has more money to gain by losing the Ariad appeal than winning it. Presumably, Lilly has other financial interests motivating its position in Ariad. For instance, Lilly has been subject to more than several accusations of infringement over the years and its financial wherewithal to engage in intensive R & D may make its patents relatively immune to written description attacks.

But, even so, Lilly might not care as much as the usual appellant if it loses the Ariad case. To be fair to Lilly and its lawyers, I have not seen any evidence showing that they have not vigorously argued their case. Nevertheless, Lilly’s large financial interest in Teva is concerning, especially given that Ariad could be one of the most important Federal Circuit decisions in recent years.

So when I read Lilly’s en banc brief to the Federal Circuit in Ariad, I was surprised that Lilly did not disclose its position in Teva. And it seems very unlikely that Lilly’s lawyers in Ariad were unaware of the issue in Teva, since at least three of them are working on both cases. Moreover, the district court in Teva mentioned the pending Ariad case in its final order, noting that it was bound by existing precedent to apply an independent written description requirement.

The Federal Circuit has a rule that requires litigants to disclose certain information about other pending cases. The applicable rule, Fed. Cir. R. 47.5, reads in relevant part:

Each principal brief must contain a statement of related cases indicating: …. (b) … any case known to counsel to be pending in this or any other court that will directly affect or be directly affected by this court’s decision in the pending appeal. If there are many related cases, they may be described generally, but the title and case number must be given for any case known to be pending in the Supreme Court, this court, or any other circuit court of appeals.

In my view, one could read the rule such that Lilly should have disclosed the Teva case in its Ariad brief. Unfortunately, the scope of this rule is sufficiently ambiguous to be construed otherwise. In particular, it is unclear whether “related cases” in the preamble of Rule 47.5 is, so to speak, a “limitation”—namely, does a case qualifying under Rule 47.5(b) need to be a “related case” in addition to meeting the requirements stated in that sub-section, or does that sub-section fully define the kinds of “related cases” that need to be disclosed? Arguably, the latter is the better reading, but it does not seem compelled by the language of the rule. Moreover, it is unclear exactly what “directly affect or be directly affected by this court’s decision” means. Since the rule contemplates that there may be “many related cases,” arguably this clause should be read broadly, but again, such an interpretation does not seem mandated by the rule.

What does seem clear, though, is that the roughly $750 million Lilly potentially has to gain in Teva from losing the Ariad case is important information that any Federal Circuit judge would want to know when reading Lilly’s briefs and listening to its arguments. As such, the Federal Circuit should clarify the scope of Rule 47.5—like it has done in a few cases (here and here)—or explicitly revise the rule to ensure that parties are clearly required to disclose cases like Lilly v. Teva.

For example, the Federal Circuit could—similar to DC Circuit Local Rule 28(a)(1)(C)—define a “related case” as including “any pending case involving at least one of the same parties and the same or similar issues.” Such a definition would capture cases like Lilly v. Teva, but would not overly burden litigants. With this sort of rule in place, potentially contrary interests of parties in other cases—particularly those worth large sums—would be appropriately unveiled on appeal.

Ted Sichelman is an Assistant Professor at the University of San Diego School of Law, where he teaches patent law and other intellectual property courses. He has neither represented nor has any financial interest (other than from market index funds) in Ariad Pharmaceuticals, Eli Lilly, or Teva.

Patently-O Bits and Bytes No. 304

• Next Monday (December 7, 2009) at 2:00 P.M. in Room 201, the Federal Circuit will hear en banc arguments in the case of Ariad Pharmaceutical v. Eli Lilly. The case questions whether Section 112 of the Patent Act creates a written description requirement that is separate and distinct from the enablement requirement. An audio version of the oral arguments is expected to be available that same day. [Calendar]
• PATracer reports on the pending Federal Circuit case of Kawasaki v. Bombadier. In that case, Kawasaki had sued to enforce the terms of a settlement agreement. Rather than enforcing the agreement, Judge Folsom of the E.D. Tex. dismissed the lawsuit – holding that his court lacked subject matter jurisdiction over what had become a contract dispute. In the 1994 case of Kokkonen v. Guardian Life, the Supreme Court held that unless incorporated into a court order, disputes over a settlement agreement must stand on its own jurisdictional feet. [LINK]
• Eriq Gardner asks Can a Science-Fiction Movie Infringe a Tech-patent? His question is prompted by a lawsuit where – you guessed it – a patentee (Carl Burnett & his company Global Findability) has sued Summit Entertainment for making/distributing the Nicholas Cage film entitled "Knowing" in which Cage is portrayed as acting like he is using an allegedly infringing geo-locator. The complaint was filed by the Cahn Samuels firm in Federal Court in Washington DC. In the movie setup, the geo-locating technology is based on information provided in 1958 (and rediscovered in 2008). If pretending to be an infringer is actionable, this reconstructed history may also render the patent obvious… The movie was critically panned, but Cage's star power still helped bring in almost $80 million in box office revenues.
• Global Findability's patent is actually quite interesting. It focuses on a mechanism that converts latitude, longitude, & altitude readings into a "single discrete all-natural number." I.e., one number to uniquely identify a position anywhere (relative to the earth). [LINK]

 

Design Law: Protecting Copyrighted Designs

Design Ideas v. Things Remembered, 3:07-cv-03077 (C.D. Ill. Filed March 16, 2007)

Perry Saidman is a frequent contributory to Patently-O -- especially when the topic turns to design patent law. In a recent case, his firm used copyright law to protect its client's wire-flower design. The flowers were incorporated into candle holders and other small useful objects.

Although cheap ($35), early copyright registration is important for collecting infringement damages. Registration is also helpful in establishing priority and ownership. In this case, the designer registered early and was awarded $750k for willful infringement.

Notes:

Case: Design Ideas, Ltd., v. Things Remembered, Inc., Case No. 3:07-cv-03077 (C.D. Ill. Filed March 16, 2007) (Garfield Goodrum served as lead attorney for the plaintiffs).

Jury Verdict Form: 2000005312.pdf

The original complaint also included charges of trademark and utility patent infringement. The broadest claimof the utility patent (No. 6,398,058) includes a limitation that "loops formed to simulate a flower" are used to connect the base to the top:

1. A container constructed of metal wires, comprising:

   a base including a lower support wire bent to establish the predominant shape of said base;

   a top including an upper support wire bent to establish the predominant shape of said top;

   a plurality of wire figures, each of said wire figures having a first wire forming a central body and a second wire forming a plurality of loops outwardly extending from the central body and circumferentially offset from one another, said central body and said plurality of loops formed to simulate a flower, wherein said first wire and said second wire are separately formed and coupled together; and

   a sidewall connecting said lower support wire and said upper support wire to space said lower support wire from said upper support wire, said sidewall comprising said plurality of said wire figures.

Federal Circuit Affirms Summary Judgment of Obviousness for Bulk EMail Patent

Perfect Web Technologies v. InfoUSA (Fed. Cir. 2009)

Perfect Web's asserted patent covers a method of managing bulk e-mail distribution. Claim 1 of the application (filed in 2000) reads as follows:

1. A method for managing bulk e-mail distribution comprising the steps:

(A) matching a target recipient profile with a group of target recipients;

(B) transmitting a set of bulk e-mails to said target recipients in said matched group;

(C) calculating a quantity of e-mails in said set of bulk e-mails which have been successfully received by said target recipients; and,

(D) if said calculated quantity does not exceed a prescribed minimum quantity of successfully received e-mails, repeating steps (A)-(C) until said calculated quantity exceeds said prescribed minimum quantity. (Pat. No. 6,431,400).

The district court held the claims invalid as anticipated and obvious as well as for failing to claim statutory subject matter under Section 101. On appeal, the Federal Circuit upheld the obviousness finding and left the alternative reasons undecided.

Of course, in 2000, targeted bulk e-mail was already around, and the defendants provided prior art evidence of steps (A)-(C). That is, marketers were already identifying target recipients, sending out e-mails, and calculating the percent received. Missing from the prior art was step (D) - iteratively repeating steps (A)-(C) until the number of recipients reaches the a prescribed quantity.

Evidence of Common Sense: The district court held on summary judgment that KSR style "common sense" would lead one of ordinary skill in the art to perform the iterative step (D). On appeal, the Federal Circuit affirmed that finding - holding particularly that the finding of common sense does not require "explication in any reference or expert opinion."

Although a court need not have documentary support of its common sense analysis, a court (or patent examiner) must at least clearly explain its reasoning.

We reiterate that, on summary judgment, to invoke “common sense” or any other basis for extrapolating from prior art to a conclusion of obviousness, a district court must articulate its reasoning with sufficient clarity for review.

In this case, the appellate panel agreed that the idea of repeating already known steps until a threshold is met was simply a common sense extension:

Thus, this last step, and the claim as a whole, simply recites repetition of a known procedure until success is achieved. Recognizing this, the district court explained: “If 100 e-mail deliveries were ordered, and the first transmission delivered only 95, common sense dictates that one should try again. One could do little else.”

The court added an interesting caveat regarding expert testimony and the level of one of skill in the art -- noting that expert testimony may well be necessary for "complex" technology.

If the relevant technology were complex, the court might require expert opinions. Here, however, the parties agreed that ordinary skill in the relevant art required only a high school education and limited marketing and computer experience. No expert opinion is required to appreciate the potential value to persons of such skill in this art of repeating steps (A)-(C).

Obvious to Try: As a corollary to its common sense holding, the appellate court also held that the additional step (D) would have been "obvious to try" under KSR. "[S]imple logic suggests that sending messages to new addresses is more likely to produce successful deliveries than re-sending messages to addresses that have already failed. . . . [I]ndeed, the predictable and actual result of performing step (D) is that more e-mail messages reach more recipients."

Long-felt Need: The patentee argued that a nonobviousness conclusion was supported by evidence of the secondary consideration of long-felt need. Particularly, the method helps solve the recognized competing problems of reaching customers without "burning up" the mailing list by oversending.

The Federal Circuit rejected these arguments because the patentee had failed to provide any evidence of improved efficiency beyond "bare assertion." In addition, the court suggested that any proof of long-felt need would be insufficient to "overcome [the] strong prima facie showing of obviousness." (quoting Asyst Techs (2008))

Claim Construction: Interestingly, the court issued its summary judgment order prior to claim construction. The Federal Circuit found no error because construction of the disputed claim terms would not have changed the obviousness outcome.

Notes: The patent was originally titled "Statement regarding federally sponsored research or development." That is apparently a typographical error fixed in a subsequent certificate of correction.   

Federal Circuit Orders Another Case Transferred Out of Texas

In re Hoffamann-La Roche

(Fed. Cir. 2009)(on writ of mandamus)

Novartis sued Roche and its partners in the Eastern District of Texas for infringement of its HIV treatment patent. After being denied by District Court Judge Folsom, Roche petitioned the Federal Circuit for a writ of Mandamus -- asking the appellate court to order the case to be transferred to the Eastern District of North Carolina. Following its own TS Tech precedent as well as the 5th Circuit's Volkswagen case, the Federal Circuit complied and has ordered the case transferred.

Under TS Tech, the appellate court will order a transfer on mandamus when the alternate forum is "clearly more convenient." Here, the appellate court found that important sources of proof are found in North Carolina (the location where the accused drug was developed); that the trial would impact the ongoing reputation of North Carolina residents (Duke professors); and that several non-party witnesses would be within the subpoena power of the North Carolina court. At the same time, the appellate court saw "no connection between this case and the Eastern District of Texas except that in anticipation of this litigation, Novartis' counsel in California converted into electronic format 75,000 pages of documents . . . and transferred them to the offices of its litigation counsel in Texas." Although not completely disregarding these litigation-preparation activities, the appellate court clearly deemed them less important in the venue considerations.

Patently-O Bits and Bytes No. 303

• Professor Lichtman and his students at UCLA reenact Bilski v. Kappos. [Download the MP3]
• Jeremy Grushcow discusses “three need-to-know Canadian patent decisions that impact pharma, biotech and generic companies”: [LINK]
• • Lundbeck v. Ratiopharm (the Canadian Patent Act imposes a duty of candor).
  • Bayer v. Canada (the government will only list a formulation pharma patent in its patent register (i.e., Orange Book) if the patent claims include limits to “all of the approved medicinal ingredients” in the formulation).
  • Sanofi-Aventis v. Hospira (a disclaimer of scope may be filed after receipt of a notice of allegation).
• Director Kappos discuses the “impact of KSR” on his blog: [LINK]

KSR has unquestionably refocused the obviousness inquiry by reinvigorating the fundamental questions of Graham. Because the Supreme Court clarified that teaching-suggestion-motivation was not the sole test of obviousness, the Graham analysis is not to be carried out in a rigid manner. As a result, some claims that may have been found to be non-obvious before KSR will now correctly be found to be obvious.

Inventors and practitioners will need to take these developments into account when preparing and prosecuting applications. For example, it may be necessary to review a broader cross-section of prior art than was previously necessary, or to consider filing evidence of unexpected results earlier rather than later in the course of prosecution. By being proactive, practitioners will expedite prosecution and avoid unnecessary fees and RCE filings.  

• New lawsuits against Kappos (in his role as PTO director)
• • Cephalon France v. Kappos (patent term adjustment recalculation).
  • Komipharm International v. Kappos (demanding that it be recognized as the assignee of its patent rights).
  • Tolerx v. Kappos (patent term adjustment).
  • Centre National De La Recherche Scientifique v. Kappos (patent term adjustment).
  • Mosaid Tech. v. Kappos (patent term adjustment).

ABA Journal's Top 100 Legal Blogs

For the third-year running, the ABA Journal has selected Patently-O as one of the top 100 legal weblogs — “the best legal blogs as selected by the Journal's editors.” Last year, readers also voted Patently-O as the best blog covering a niche area of law. This year, the voting will likely be more competitive. I would appreciate your vote – this year, the ABA Journal is requiring that voters first register (free). [VOTE HERE]

IP Related Blogs that made the list include:

• Dennis Crouch’s Patently-O
• Eugene Quinn’s IPWatchDog
• Eric Goldman’s Tech & Marketing Blog
• Susan Scafidi’s Counterfeit Chic
• Harvard’s Citizen Media Law Project
• Karst & Wasserstein’s FDA Law Blog
• Ben Scheffner’s Copyright Blog
• Mark Herrmann’s Drug & Device Law Blog
• Marc Randazza’s Satyricon

For Patently-O readers, the listing is probably most useful for locating non-patent blogs that look interesting (especially since many of the best patent-focused blogs were not included in the list).

Blocking Attorneys from Simultaneously Litigating and Prosecuting Patents

In re Deutsche Bank Trust (Fed. Cir. 2009) (on motion for stay of order)

Island IP and its corporate parent Double Rock sued Deutsche Bank and others for infringement of their patent covering a bank account management technique to improve “deposit sweep” services. Pat. No. 7,509,286. Charles Macedo is the lead counsel for the patentee. Macedo also handles patent prosecution prosecution for the patentee.

During the litigation, the defendants requested a “patent prosecution bar” be placed against Macedo that would exclude him from continued involvement in prosecution of Double Rock’s patents. The defendants argue that Macedo’s access to the defendants' confidential information in the litigation will be used for competitive decisionmaking during prosecution.

The district court (adopting the magistrate decision) rejected the defendants’ argument – finding that a party’s right to choose its own counsel prevails over the potential risk of disclosure. This decision would lift an interim protective order that had prevented Macedo from prosecuting patents.

The Federal Circuit has now granted a stay of the order pending its decision on whether to grant a writ of mandamus. [Link] In its argument, Deutsche Bank cited a half dozen similar cases where district courts limited the litigating attorney from prosecuting the patents at the same time.

"The majority of district courts, including the courts in the Second Circuit, have found that an attorney who has obtained access to an adversary’s confidential information during the course of litigation should not be permitted to make use of that information in prosecuting his own client’s patent applications." (Quote form DB brief)

Notes:

• File Attachment: DB Brief.pdf (47 KB)
• Macedo has been a past contributor to Patently-O and recently published a book “The Corporate Insider’s Guide to US Patent Practice.
• The patentee recently submitted a brief in the Bilski case arguing for broad patent subject matter. [Link]. The patent claims asserted here will pretty clearly face an uphill battle under the Federal Circuit's Bilski analysis. Claim 1 is reproduced below:

1. A method for managing funds of a plurality of respective client accounts associated with a plurality of respective clients participating in a program, comprising:

maintaining a plurality of FDIC-insured and interest-bearing aggregated deposit accounts, each of the aggregated deposit accounts being interest-bearing, with one or more of the aggregated deposit accounts held in each different one of a plurality of financial institutions in the program;

maintaining funds of a plurality of the clients in the plurality of aggregated deposit accounts so that each aggregated deposit account holds funds of a plurality of the clients, with each client account in a subset of the plurality of client accounts having funds in their respective client account over a predetermined amount, with each of the respective client accounts in the subset having funds deposited in a plurality of the aggregated deposit accounts;

maintaining or having maintained or accessing by computer an electronic database, on one or more computer-readable media, comprising a respective balance of funds for each of a plurality of the respective client accounts in the subset and information on funds held by each of the plurality of clients of the subset in the plurality of aggregated deposit accounts;

receiving electronic client transaction data describing debit and/or credit transactions made by a plurality of clients against their respective client accounts;

updating the respective balance of funds in the database associated with each of the respective client accounts in the subset based on one or more debit and/or credit transactions made by the respective client;

determining electronically for each of the plurality of the client accounts in the subset of client accounts a respective interest rate from among a plurality of interest rates in an interest-allocation procedure based at least in part on the updated balance of funds associated with the respective client account in the subset;

calculating electronically a respective interest for a period to be posted to each of a plurality of respective client accounts in the subset, with the respective interest to be posted to a respective client account determined based on the respective interest rate determined for that respective client account in the subset, with the calculating being independent from the respective client account pro rata share in earnings posted to the plurality of the aggregated deposit accounts holding funds of the respective client account;

determining interest earned during the period by each of the plurality of aggregated deposit accounts in the program; and

posting electronically the respective interest calculated for each of the plurality of respective client accounts based on the respective interest rate determined for the respective client account.