Patent Law Blog (Patently-O)

Top Ten Most Cited Patent Cases 2007-2010

In the common law tradition, virtually every written opinion from the Federal Circuit cites to prior precedent. I looked at the past few years of Federal Circuit decision to discover the most cited patent cases.

The following list is ranked based on citations found in Federal Circuit patent decisions that were decided January 1, 2007 - May 26, 2010. The ranking is a combined score of both (1) the number of times a case was cited and (2) the depth-of-analysis associated with the citation. I excluded non-patent cases from the list.

1. Phillips v. AWH Corp., 415 F.3d 1303 (Fed.Cir. 2005).
2. Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448 (Fed.Cir. 1998).
3. KSR Intern. Co. v. Teleflex Inc., 127 S.Ct. 1727 (2007).
4. Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed.Cir. 1995).
5. Graham v. John Deere Co. of Kansas City, 86 S.Ct. 684 (1966).
6. Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576 (Fed.Cir. 1996).
7. In re Calmar, Inc., 854 F.2d 461 (Fed.Cir. 1988).
8. Warner-Jenkinson Co., Inc. v. Hilton Davis Chemical Co., 117 S.Ct. 1040 (1997).
9. MedImmune, Inc. v. Genentech, Inc., 127 S.Ct. 764 (2007).
10. Christianson v. Colt Industries Operating Corp., 108 S.Ct. 2166 (1988).
11. Kingsdown Medical Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed.Cir. 1988).
12. Rite-Hite Corp. v. Kelley Co., Inc., 56 F.3d 1538 (Fed.Cir. 1995).
13. In re Seagate Technology, LLC, 497 F.3d 1360 (Fed.Cir. 2007).

Transition: Chief Judge Michel --> Chief Judge Rader

Transition: May 31 is Chief Judge Paul Michel’s last day on the bench.  Judge Randall Rader will become the next Chief Judge of the Court of Appeals for the Federal Circuit. 

The Court today released two interesting patent opinions authored by the Chief: Dow Jones v. Ablaise (finding patent invalid as obvious) and Leviton v. Universal Security Instruments (vacating summary judgment of inequitable conduct). 

There are several pending en banc cases, including Princo v. ITC (patent pools and antitrust), Hyatt v. Kappos (Admissibility of new evidence in a Section 145 action), Therasense v. BD (standards of inequitable conduct), and TiVo v. EchoStar (contempt proceedings against adjuged infringer who introduced new infringing products). 

Combinatorics: With Chief Judge Michel gone, it may be more difficult for en banc panels to overturn prior precedent.  With Chief Judge Michel, the court has 11 members and needs a 6–judge majority to overturn prior precedent. Without the Chief, the court will have only 10 members but will still need 6–judges for such a “majority.” With the 11–judge panel, half of the potential outcomes result in majority panel sufficient to overturn prior precedent. With a 10–judge panel, only 38% of the potential outcomes have the same result. (This assumes a binary yes/no on the potential majority position).  Chief Judge Michel is particularly important because of his tendancy to side with the majority. In the past decade, Judge Michel has filed fewer dissinting opinions than any other Judge on the Circuit except for Judge Moore (who has only been on the bench for three years).  (Judge Newman has filed the most dissenting opinions.)

Next Vacancies: Several other Federal Circuit judges are currently eligible to take senior status. These include Judges Newman, Mayer, Lourie, Gajarsa, and Dyk. Judge Byrson will be eligible in August 2010.

Next Chief Judge After Judge Rader: Judge Kimberly Moore sits as the heir apparent following Judge Rader — assuming that he remains Chief Judge for a full seven years. If Judge Rader vacates the Chief position within six-years, Judge Prost would become Chief.

JOTWELL: Journal of Things we Like (LOTS)

[JOTWELL] Many of us enjoy legal theory of all sorts (even that outside of patent law) but we do not have time to sift through the several thoursand law review articles published each year. 

A new project headed by Professor Michael Froomkin (Miami) focuses attention on legal scholarship that is new and noteworthy — and does so in digestable 1,000 word essays.

[Patent Utility Redux] In a recent JOTWELL essay, Professor John Duffy (GWU) discusses a new article by Professer Michael Risch (soon to be Villanova). Risch’s article is titled Reinvinting Usefulness and is forthcoming in the BYU Law Review (SSRN Draft). Duffy writes:

Michael Risch reexamines patent utility doctrine and advances creative and insightful arguments for requiring that all inventions demonstrate “commercial utility” prior to patenting.  The highest compliment I can pay this article is not that I agree with it—I’m still somewhat doubtful—but that the article has forced me to think hard about an area I foolishly thought to be largely barren.  The article is memorable precisely because its thesis is unsettling; it demands rethinking of utility doctrine and other aspects of the patent law.

The JOTWELL IP section can be followed here: http://ip.jotwell.com/.

Notes:

• Read Professor Duffy’s Review
• Read JOTWELL

 

 

 

Judge Plager: "The Walls Surrounding the Claimed Invention [Should] be Made of Something Other than Quicksand"

Enzo Biochem and Yale University v. Applera Corp. (Fed. Cir. 2010)

The district court initially held Enzo’s patent claims invalid as indefinite because of the ill-defined term “not interfering substantially.” On appeal, the Federal Circuit reversed — finding that the someone of skill in the art “would understand what is claimed.”

Applera requested a panel rehearing and rehearing en banc which the Federal Circuit recently denied. However, as part of that denial, Judge Plager penned an important dissent — arguing that indefiniteness law should be given more teeth and that claim construction commands too large of a role in the litigation process.

“In my view, this court’s definiteness doctrine could go considerably further in promoting that objective than it currently does, with the not inconsequential benefit of shifting the focus from litigation over claim construction to clarity in claim drafting. . . . The court now spends a substantial amount of judicial resources trying to make sense of unclear, over-broad, and sometimes incoherent claim terms. It is time for us to move beyond sticking our fingers in the never-ending leaks in the dike that supposedly defines and figuratively surrounds a claimed invention. Instead, we might spend some time figuring out how to support the PTO in requiring that the walls surrounding the claimed invention be made of something other than quicksand.”

Read the full dissent here:

Judge Plager: I respectfully dissent from the denial of the petition for panel rehearing on the question of indefiniteness.

Despite the varying formulations that this court has used over the years in describing its “indefiniteness” jurisprudence . . . , the general conclusion from our law seems to be this: if a person of ordinary skill in the art can come up with a plausible meaning for a disputed claim term in a patent, that term, and therefore the claim, is not indefinite. At least not so indefinite as to run afoul of the statutory requirement that claims shall “particularly point[ ] out and distinctly claim[ ] the subject matter which the applicant regards as his invention.” 35 U.S.C. § 112, second paragraph.

The corollary derived from this understanding is that if several persons of ordinary skill come up with competing but plausible interpretations of a disputed terms is typically the case with competing “expert witnesses” in patent infringement litigation—the problem is not one of an inherently ambiguous and potentially indefinite claim term, but rather the problem becomes simply one of picking the “right” interpretation for that term. Since picking the “right” interpretation—claim construction—is a matter of law over which this court rules, and since the view of the trial judge hearing the case is given little weight, so that the trial judge’s view on appeal becomes just a part of the cacophony before this court, it is not until three court of appeals judges randomly selected for that purpose pick the “right” interpretation that the public, not to mention the patentee and its competitors, know what the patent actually claims. The inefficiencies of this system, and its potential inequities, are well known in the trade.

The United States Patent and Trademark Office (“PTO”), by contrast, appears to be taking steps to give the statutory requirement real meaning. In 2008, the patent examining corps was given a five-page instruction on “Indefiniteness rejections under 35 U.S.C. 112, second paragraph.” The memo initially observes that “[t]he primary purpose of the definiteness requirement for claim language is to ensure that the scope of the claims is clear so that the public is informed of the boundaries of what constitutes infringement of the patent.” The memo reviews in detail a recent opinion of this court, following which the memo states the position of the PTO: “If the language of a claim, considered as a whole in light of the specification and given its broadest reasonable interpretation, is such that a person of ordinary skill in the relevant art would read it with more than one reasonable interpre-tation then a rejection of the claim under 35 U.S.C. 112, second paragraph, is appropriate.”

This memo was followed later in the year by a rare precedential opinion issued by the Board of Patent Appeals and Interferences (“Board”) in Ex parte Miyazaki. The Board noted that this court has in post-issuance patent infringement cases held “that the definiteness requirement ‘does not compel absolute clarity’ and ‘[o]nly claims “not amenable to construction” or “insolubly am-biguous” are indefinite.’” Recognizing that this court has never set forth a different standard of review for indefiniteness under 35 U.S.C. § 112, second paragraph, for pre-issuance pending claims as compared with post-issuance patent claims, the Board concluded that the Federal Circuit’s reading of the indefiniteness requirement was counter to the PTO’s broader standard for claim construction during prosecution. Accordingly, the Board announced that, “rather than requiring that the claims are insolubly ambiguous, we hold that if a claim is amenable to two or more plausible claim constructions, the USPTO is justified in requiring the applicant to more precisely define the metes and bounds of the claimed invention by holding the claim unpatentable under 35 U.S.C. § 112, second paragraph, as indefinite.”

The Board is clearly right in recognizing that the circumstances are different between pre-issuance and post-issuance application of the definiteness standard with regard to claim terms. At the same time, the PTO and the Board are clearly right in insisting that, if the public notice function of the patent law is to be honored, claim terms must particularly point out and distinctly claim the subject matter of the invention. In my view, this court’s definiteness doctrine could go considerably further in promoting that objective than it currently does, with the not inconsequential benefit of shifting the focus from litigation over claim construction to clarity in claim drafting.

To begin the discussion of how this court could move in that direction, I would grant the petition for panel rehearing. The court now spends a substantial amount of judicial resources trying to make sense of unclear, over-broad, and sometimes incoherent claim terms. It is time for us to move beyond sticking our fingers in the never-ending leaks in the dike that supposedly defines and figuratively surrounds a claimed invention. Instead, we might spend some time figuring out how to support the PTO in requiring that the walls surrounding the claimed invention be made of something other than quicksand.

I respectfully dissent from the loss of that opportunity through the panel’s denial of rehearing.

Substantially: As a claim limitation, “substantially” is being used less frequently than ever before. The chart below shows the percentage of issued patents that include “substantially” as a claim limitation. The data is grouped accourding to the patent issue year. (For the 1980’s and 1990’s, I grouped the data by decade.)

 

 

 

USPTO Grant Rate by Technology Center

The following graph is based on the file histories of about 25,000 utility patent applications from the past few years. I looked to find the percent that were issued as compared to the total number of disposals (issued patents + abandoned applications). I grouped the results according to the technology center associated with the respective patent examiner.

Patent Grants 2010

Over the past few weeks, I have been reporting on the dramatic rise in the number of patents being issued by the USPTO each week. That trend continues. In the past three weeks, the USPTO has granted more utility patents than in any three week period in history -- at a rate more than 40% greater than in 2009.

Kyle Jensen of PriorSMart reports on an interesting phenom: For the first-time, the number of issued patents exceeds the number of published applications.

Orion v Hyundai on Novelty: Expanding the Scope of a Printed Publication with Oral Testimony

Orion IP v. Hyundai Motor America (Fed. Cir. 2010)

Orion sued Hyundai and twenty other automobile manufacturers for infringement of its patent covering a “computer-assisted parts sales method.” The invention took computer and database technology available in 1988 and applied that technology to a specific solution. All of the defendants settled except Hyundai who was stuck with a $34+ million verdict jury. On appeal, the Federal Circuit reversed — holding that the asserted patent is invalid as anticipated by a promotional publication for an electronics parts catalog.  Note, this post deals with the anticipation issues. I will discuss inequitable conduct in a separate post.

The asserted prior art is a brochure for the IDB2000 system that was distributed by Bell & Howell at least one year prior to the Orion priority date.* [DTX133.pdf (5979 KB)] The brochure does not specifically state that the system generates a customer proposal as required by claim 1 of Orion's patent.  However, at trial, Hyundai presented evidence that the IDB2000 system was “designed to, and did” generate customer proposals.  The Federal Circuit latched-onto this testimony regarding the prior art system and used it to expand the coverage of the prior art brochure — holding that the “testimonial and documentary evidence regarding the Electronic Parts Catalog reference establish that the Electronic Parts Catalog reference anticipates claim 1 of the ’627 patent.”

I have genuine problems with the analysis in this opinion.  The appellate panel expanded the scope of the asserted anticipatory prior art reference by relying on testimonial evidence of how the associated system was used at the time. There are two separate problems. First, the scope of a "printed publication" should be examined for what it disclosed to one of skill in the art rather rather than to how underlying prior art systems were used at the time. Contemporaneous use would be important for an analysis of whether the invention was "in public use" more than one year before the filing date. However, this decision’s doctrinal focus is solely on anticipation by the prior art brochure as a printed publication. If the IDB2000 system itself anticipated the patent then the defendants should have presented evidence under the public use prong of 102(b).  The second problem with the court’s decision is that the oral testimony relied on here opens the door to potentially self-serving testimony that is not ordinarily allowed in invalidity/priority proceedings because it does not satisfy the clear and convincing standard. 

• * The asserted prior art reference was apparently printed after the Orion filing date. However, Hyundai presented oral testimony that a very similar brochure had been distributed earlier.

Chief Judge Michel: State of the Court

Chief Judge Paul Michel will be retiring from the bench later this month after more than twenty-two years on the bench and five as the chief judge.  He recently offered his annual “state of the court” address at the court’s annual judicial conference. [Read Judge Michel’s remarks].

As Chief, Judge Michel has taken a specific interest in ensuring that the court runs efficiently and quickly. His remarks:

By every measure our decisions continue to be issued more rapidly. As a result, our inventory of pending appeals has dropped from over 1,400 just a few years ago to only 819 as of April 30. Indeed, as of October 1, 2009 it was 897, so the reductions continue.

One benefit is that we hear cases more quickly. In Fiscal year 2006, for example, only 49% of ready cases could be scheduled for argument without delay. By last year, the number was 84%. This year it will likely rise even further.

Another metric we watch is the percentage of appeals decided within 90 days of argument. This number has ranged recently from 75 to 83%. Likely it will reach 85% this year.

Judge Michel also briefly discussed the pending en banc cases:

• Last October we agreed to rehear en banc Princo v. ITC, involving a patent misuse defense based on a patent pool licensing agreement. Argument was held in March. [This case was argued by Edward DuMont. DuMont has been nominated to fill Judge Michel’s place on the bench]
• In February, we granted rehearing en banc in Hyatt v. Kappos, asking the parties to brief any limitations on admissibility of evidence in § 145 patenting actions in district court. Argument is scheduled for July 8.
• In March, we agreed to rehear Slattery v. United States, a Winstar case, asking whether the FDIC is a non-appropriated funds instrumentality and how the answer to that affects the jurisdiction of the Court of Federal Claims.
• In April we granted rehearing en banc in Therasense v. Becton, Dickinson, in which we will reconsider the standards for determining inequitable conduct. 
• This month, we granted rehearing in TiVo v. Echostar, concerning when contempt proceedings are appropriate as opposed to a new infringement trial on a product that has been altered after the original was found to infringe.
• And of course all eyes are on the impending decision in In Re Bilski, concerning the test for patent eligibility.

Although stepping-down from the bench, Chief Judge Michel is “not retiring, but merely changing mission.” He reports that he expects to play a greater role for campaigning for stronger support the courts and USPTO and may also spend some time as a mediator.

Patently-O Bits and Bytes

• Trademark / Antitrust: The Supreme Court has ruled against the National Football League (NFL) in an antitrust suit involving the NFL's exclusive apparel licensing deal with Reebok/Adidas. The court held that the NFL was not a single business entity, but rather 32 separate business entities. Any antitrust violation involves an underlying market. Here, the supreme court identified that as the market for intellectual property: "Directly relevant here, the teams are potentially competing suppliers in the market for intellectual property. When teams license such property, they are not pursuing the common interests of the whole league, but, instead, the interests of each corporation itself." In Princo, the Federal Circuit is now considering antitrust issues in the scope of patents and standard-setting organizations. [Read NFL v. American Needle] [Read about Princo v. ITC]
• The Chisum Patent Academy is offering its second annual Intensive Patent Law Training Workshop in Seattle on July 29-31, 2010. See http://www.chisum-patent-academy.com. The workshop will focus on substantive patent law (patentability and enforcement) through analysis of critical Federal Circuit and Supreme Court decisions. [Syllabus for 2009 workshop]. New material for 2010 likely include business method patentability post-Bilski, written description requirement compliance post-Ariad, and the evolving landscape of inequitable conduct as reflected by the Federal Circuit's recent grant of rehearing en banc in Therasense. The workshop is team-taught in seminar style (maximum of 10 students) by Donald Chisum, author of the treatise Chisum on Patents, and Professor Janice Mueller, author of Patent Law, 3d Edition (Aspen 2009). Chisum and Mueller have a combined total of over 40 years experience teaching patent law. The workshop's coverage is geared for junior patent attorneys, summer associates, engineers, scientists, paralegals, information specialists, and attorneys experienced in non-patent fields who desire an intensive introduction to patent law. Eighteen hours of CLE credit have been applied for.
• USPTO News:
  • The USPTO is further developing its patent prosecution highway and has eliminated the associated fee. [Link]
  • USPTO is on Facebook [Link][Me on Facebook]
  • Green Technology: The USPTO has expanded the number of technology classes that count as "green technology" and that are therefore eligible for expedited processing. [Link]

Kathy Bates on NBC as a former patent attorney. Best quote of the clip is 30–seconds-in.

 

 

Patent Pendency

Thus, about 10% of applications filed in 2004 are still pending while over 60% of those filed in 2007 are still pending.

USPTO Rising Allowance Rate

The USPTO issued more patents during the past two weeks than in any fortnight in history.  A primary driver of that upswing appears to be a dramatic rise in the allowance rate. This change is demonstrated in the chart below.

Methods: The chart is based on 4,400 patent applications that have either been abandoned or issued as patents – i.e., “disposed of.”  The allowance rate was calculated for each quarter based on the disposal date.  Only published applications were used.

The graph above is similar to the PTO allowance rate chart seen below through the end of FY2008. (As with the PTO pink line below, my chart does not count RCE filings as abandoned cases.)

 

Patently-O Bits and Bytes

• Grant Rate: The USPTO’s high patent grant numbers continue. The past two weeks respectively rank Nos. 1 and 2 in terms of the most patents granted in a single week in US history.
• USPTO Application Exchange: The USPTO has announced that it is opening its “application exchange program” to all applicants. Any applicant with at least two pending applications can “receive expedited review of one application in exchange for withdrawing an unexamined application.” For 2010, the program will be limited to 15 applications per entity. Applicants with questions may contact Pinchus Laufer (Office of the Associate Commissioner for Patent Examination Policy) Pinchus.Laufer@uspto.gov.
• PTO/DOJ/FTC Workshop on May 26th at the USPTO. The FTC's work and report on problems in the patent system has been a driving force behind many of the proposed patent reform initiatives over the past several years. Later this month, the FTC will be joining the PTO and DOJ for a workshop on the role of intellectual property in competitive markets. Particular topics include PTO Reform (quality and timing); Permanent Injunctions and the ITC; and Standard Setting. Webcast available. [Link]
• Ombudsman Program: The PTO has implemented a new ombudsman program intended to help applicants who feel that the ordinary prosecution process has broken-down. [Link] I would like to hear any comments on the value of the program.

-- Dennis

Defending Yourself in Inequitable Conduct Proceedings

An en banc rehearing is now pending before the Federal Circuit in the case of Therasense (Abbott) v. BD. The case focuses on questions of patent unenforceability due to the patentee’s inequitable conduct during prosecution.  The court opinions focus on the actions of Mr. Lawrence S. Pope who was the attorney responsible for prosecution of the asserted patent.  The district court held that pope “acted with specific intent to deceive” the patent examiner and the USPTO. Based on that finding, Pope has been investigated by both the PTO Office of Enrollment & Discipline (OED) and the Illinois Attorney Registration and Disciplinary Commission (ARDC).

There is no doubt that the finding of intentional deception has substantially and negatively impacted Mr. Pope.  As a pro-active attorney, Mr. Pope (who is no longer with Abbott) attempted to intervene in the case to defend his own record. After receiving briefs on the motion to intervene, the Federal Circuit denied the request. 

Writing as the motions judge, Judge Gajarsa wrote:

Pope asserts that he meets the standards for intervention, i.e., that he has a substantial interest in the appeal, that his interests will not be adequately represented by Abbott, and that intervention will not cause any undue delay or harm. . . . In Nisus Corporation v. PermaChink Systems, Inc., 497 F.3d 1316, 1319-20, 1322-23 (Fed. Cir. 2007), we affirmed a district court's denial of a motion to intervene by an attorney who had prosecuted a patent and who sought to challenge factual findings concerning his conduct that were related to a finding of unenforceability. We expressly distinguished Penthouse Int'l because it involved an attorney who sought to intervene after a district court sanctioned the attorney and directed the attorney to pay a sanction. In this case, Pope has shown no similar type of sanction. Nisus, 497 F.3d at 1319 ("Critical comments, such as in an opinion of the court addressed to the issues in the underlying case, are not directed at and do not alter the legal rights of the nonparty.").

Documents:

• Download Order
• Pope_Motion for Leave to Intervene.PDF (3850 KB)
• BD_Nova_Opposition to Motion.PDF (7006 KB)
• Bayer Opposition to Motion.PDF (365 KB)
• Pope Reply in Support of His Motion.PDF (408 KB)

Patenting Numbers

Two interesting statistics that came-out in today’s USPTO Roundtable on Patent Quality:

• The number of examiner interviews have increased 60% over last year.
• The action-per-disposal rate has fallen from about 2.9 actions-per-disposal to 2.3 actions-per-disposal as compared with last year.

Chien: Recent History Suggests that Supreme Court will Rule Bilski's Claim Unpatentable

Professor Colleen Chien (Santa Clara) has written an interesting new article on the importance of amicus briefs in patent cases. Her article is titled Patent Amicus Briefs: What the Courts' Friends Can Teach Us About the Patent System and is available online at SSRN.

Bilski v. Kappos: Professor Chien reminded me that as Solicitor General, Elena Kagan authored both the US government's merits brief in Bilski case arguing that Bilski's claim is unpatentable and the US government's brief opposing cert. The article reports that "in the last 20 years, every single amicus brief authored by the US Government in a Supreme Court patent case except one predicted the case outcome." Chien writes "If history is any indication, the Supreme Court will almost certainly follow the US Government's lead and rule that the method is unpatentable and likely adopt some of its reasoning as well." (Note that Bilski is a bit different because the Government is a party).

The abstract:

Over the last two decades, more than 1500 amici, representing thousands of organizations, companies, and individuals, have signed onto amicus briefs in over a hundred patent cases, many of them representing landmark decisions. This paper turns the spotlight on these "behind-the-scenes" actors in the patent system. It combines theoretical insights with an empirical study of amicus briefs filed in patent cases over the last 20 years in an examination of who is interested in the patent system, the positions they have advocated, and the effectiveness of their advocacy. Amicus filers have been instrumental in shaping the courts' agenda; the Supreme Court was seven times more likely to grant cert, and the Federal Circuit eight times likely grant a petition for en banc rehearing, if urged to by an amicus. However, while certain briefs have been important, overall the balance of briefs on the merits have not had a measurable impact on the courts' rulings. One exception has been the briefs of the US Government, which have been exceptionally prescient. Over the 20 years studied, every single amicus brief authored by the US Government in a Supreme Court patent case except one predicted the case outcome. That is to say, in almost all cases, the Court affirmed or rejected the lower court holding when the Government told it to, and in one case, dismissed cert as improvidently granted when the Government recommended doing so. In terms of who files briefs and their agenda, the results are somewhat surprising. Although debates about the patent system are usually cast as a fight between the pharmaceutical and hi-tech industries, patent lawyers comprise a powerful interest group, filing the most briefs of any single group. In addition, among companies, what seems largely to determine how they advocate is their business model – non-practicing entities, for example, nearly always weighed in for the patentee and public companies, often against the patentee. These and other results have implications for those seeking to understand the patent system and those seeking to influence it.

Download the article.

Bits and Bytes: Cybaris

William Mitchell’s new IP Journal “Cybaris” recently published its first issue. Each article is accopmanied by a videotaped interview and discussion with the author(s). Readers may also leave comments on the site.  The first issue includes:

• A complete version the Matrix for Changing First-To-Invent by Brad Pedersen & Justin Woo that was originally discussed on Patently-O [Link]
• Trying to Agree on Three Articles of Law: The Idea/Expression Dichotomy in Chinese Copyright Law by Stephen McIntyre [Link]
• Buffering and the Reproduction Right: When is a Copy a Copy? by Steven Foley [Link]
• Note: The Best of Intentions: Why the Proposed Changes to the Canadian Access to Medicines Regime Should Not Be Implemented by Carly L. Huth [Link]
• Note: In Defense of TRIPs: It Only Seems Imperialistic by Anthony R. Noss [Link]
  Note: The Statutory Damages Regime of Copyright Law: The Non-Commercial User and Capitol Records, Inc v. Thomas-Rasset by Heather N. Kjos [Link]

En Banc Federal Circuit: Adjudged Infringers and their "New" Products

TiVo v. EchoStar (Fed. Cir. 2010)

The Federal Circuit has announced an en banc rehearing of the TiVo appeal focusing on the process of chasing-down defendants to enforce an injunction — especially where the defendant has introduced a new device that is arguably infringing.  The patentee here has asked that the enforcement operate through a contempt proceeding while the accused infringer has demanded a new trial on the merits for the new device.

The questions on appeal include:

a) Following a finding of infringement by an accused device at trial, under what circumstances is it proper for a district court to determine infringement by a newly accused device through contempt proceedings rather than through new infringement proceedings? What burden of proof is required to establish that a contempt proceeding is proper?

b) How does “fair ground of doubt as to the wrongfulness of the defendant’s conduct” compare with the “more than colorable differences” or “substantial open issues of infringement” tests in evaluating the newly accused device against the adjudged infringing device? See Cal. Artificial Stone Paving Co. v. Molitor, 113 U.S. 609, 618 (1885); KSM Fastening Sys., Inc. v. H.A. Jones Co., 776 F.2d 1522, 1532 (Fed. Cir. 1985).

c) Where a contempt proceeding is proper, (1) what burden of proof is on the patentee to show that the newly accused device infringes (see KSM, 776 F.2d at 1524) and (2) what weight should be given to the infringer’s efforts to design around the patent and its 2009-1374 2 reasonable and good faith belief of noninfringement by the new device, for a finding of contempt?

d) Is it proper for a district court to hold an enjoined party in contempt where there is a substantial question as to whether the injunction is ambiguous in scope?

On-point amicus briefs are welcomed.

 

Inequitable Conduct: Forming the Doctrinal Boundaries

Taltech v. Esquel Enterprises (Fed. Cir. 2010)

After a prior remand, the W.D. Washington district court held Taltech’s patent unenforceable due to inequitable conduct during prosecution and awarded over $6 million in attorney fees and costs to the defendant.

Section 285 of the patent statute allows a prevailing party to obtain reasonable attorney fees in “exceptional cases.” Typically, exceptional cases involve misconduct during either prosecution or litigation. Here, the lower court found three independent grounds for finding an exceptional case: (1) Taltech’s inequitable conduct in failing to disclose a prior-art raincoat seam to the PTO (labeled the “undisclosed raincoat seam” or URS); (2) Taltech’s inequitable conduct in misrepresenting the double top-stitch seam; and (3) abusive litigation tactics.  On appeal, the Federal Circuit (Judges Mayer and Friedman) found no clear error with the lower court ruling.

The compelling element of the decision comes from Judge Gajarsa’s dissent:

This case exemplifies the ongoing pandemic of baseless inequitable conduct charges that pervade our patent system. For the reasons stated below, I respectfully dissent from the majority opinion.

Defendants’ inequitable conduct claim rests on a handmade drawing that the inventor, John Wong, sketched on a piece of paper during his deposition. Defendants’ counsel requested that Wong draw the prior art that “inspired” him to experiment in making pucker-free seams in dress shirts. In response, he sketched a prior art seam used to waterproof raincoats manufactured in the TAL factory. During litigation, Wong’s drawing was labeled the “Undisclosed Raincoat Seam” (“URS”). After a bench trial, the district court found that Wong committed fraud on the U.S. Patent and Trademark Office (“PTO”) because he failed to disclose the URS as the “inspiration” for his invention. 

We vacated the inequitable conduct finding on the first appeal because there is no legal requirement that an inventor disclose the “inspiration” for his invention to the PTO. We remanded the case for a proper substantive inquiry into whether the URS was merely cumulative of the prior art on record with the PTO. Taltech Ltd. v. Esquel Enters., Inc., 279 F. App’x 974, 977 (Fed. Cir. May 22, 2008) (“If the undisclosed raincoat seam was merely cumulative to Robers, then no inequitable conduct lies in its nondisclosure.”).

On remand, the district court again found that Wong had committed inequitable conduct based on his failure to disclose the URS, but did so based on a flawed cumulativeness inquiry. The district court erroneously limited the teachings of both the URS and the Robers reference in order to render them non-cumulative prior art. Had the district court properly interpreted the teachings of both references, it would have found that the URS was merely cumulative of Robers.

The district court also improperly inferred intent to deceive from the materiality of the non-disclosed reference and several statements Wong made to the PTO. In both instances, the district court drew an inference of bad faith despite an equally plausible, and likely more reasonable, inference of good faith. Such an analysis has been rejected by this court and is legally erroneous. See Scanner Techs. Corp. v. ICOS Vision Sys. Corp., 528 F.3d 1365, 1376 (Fed. Cir. 2008) (“Whenever evidence proffered to show either materiality or intent is susceptible of multiple reasonable inferences, a district court clearly errs in overlooking one inference in favor of another equally reasonable inference.”). The district court’s numerous legal and factual errors are discussed in more detail below. . . .

 

 

Therasense: Background Documents For Those Preparing Amicus Filings

The Federal Circuit recently granted Abbott’s request for an en banc rehearing of its Therasense decision. The rehearing will focus on the fundamental elements of inequitable conduct.  Inequitable conduct is a non-statutory (i.e., judge-made) doctrine and the court is entertaining arguments on how it should re-structure the doctrine.

The following documents will be helpful to anyone planning to file an Amici brief in the case:

Court Opinions on Inequtiable Conduct:

• Order re Petition for Rehearing En Banc.PDF (187 KB)
• Federal Circuit Panel Decision.pdf (225 KB)
• DistrictCourtDecision.pdf (330 KB)

Party Briefs Requesting Rehearing:

• Petition for Rehearing En Banc of Plaintiffs-Appellants Abbott.PDF (630 KB)
• Bayer_s Response to Abbott_s Petition for Rehearing.PDF (501 KB)
• BD_s Response to Abbott_s Petition fo Rehearing.pdf (811 KB)
• Reply of Plaintiffs-Appellants Abbott.PDF (233 KB)

Amicus Briefs on Rehearing Request:

• Amici Curiae Nine Intellectual Property Law Professors.pdf (927 KB)
• Amici Curiae Ole K. Nilssen.pdf (1671 KB)
• Amici Curiae The Honorable Bruce A. Lehman.pdf (3654 KB)
• Amici Curiae Washington Legal Foundation.PDF (472 KB)

Arguments to the Original Panel:

• Audio File of Oral Arguments
• Appellant Opening_Brief to Merits Panel NO APPX.pdf (730 KB)
• Bayer_s Response on Merits Panel.pdf (689 KB)
• BD_s Response on Merits Panel.pdf (727 KB)
• Appellant Reply Brief to Merits Panel.pdf (445 KB)

Lawrence Pope’s Motion to Intervene:

• Download Order
• Pope_Motion for Leave to Intervene.PDF (3850 KB)
• BD_Nova_Opposition to Motion.PDF (7006 KB)
• Bayer Opposition to Motion.PDF (365 KB)
• Pope Reply in Support of His Motion.PDF (408 KB)

Download all the documents in a big zip file. [Does not include POPE documents]

 

Patenting Computer-Implemented-Inventions (CIIs) in the EPO

The following note was written by European Patent Attorney Paul Cole who is also the Visiting Professor of IP at Bournemouth University

EPO Enlarged Appeal Board decision in G 0003/08 Programs for computers/PRESIDENT’S REFERENCE

The EPO President asked the Enlarged Board to consider a set of questions concerning the patentability of programs for computers (computer-implemented inventions, CIIs) on which she deemed the Boards of Appeal to have given different decisions and which she held to be of fundamental importance within the meaning of a. 112(1) EPC. Her referral had been preceded by an informal letter from her predecessor, Alain Pompidou, dated 22 February 2007, in which Lord Justice Jacob's suggestion in the Aerotel/Macrossan judgment of 27 October 2006 ([2006] EWCA Civ 1371) of referring the issue of CII patentability to the Enlarged Board had been dismissed as unnecessary.  About 100 Amicus curiae briefs had been filed, amongst which a number questioned the admissibility of the referral, a view which was supported inter alia by Lord Hoffmann who was until his recent retirement the member of the UK House of Lords Judicial Committee who usually wrote the opinion of the House in cases involving IP.

 The opinion of the Enlarged Board is available here. 

and a more extended file of the case including the questions originally referred and the reasons for the reference can be found here.

In the outcome, the doubts proved well-founded and the referral was rejected as inadmissible. The views of the Enlarged Board are summarised in the official headnote:

“1. In exercising his or her right of referral a President of the EPO is entitled to make full use of the discretion granted by Article 112 (1) (b) EPC, even if his or her appreciation of the need for a referral has changed after a relatively short time.

2. Different decisions by a single Technical Board of Appeal in differing compositions may be the basis of an admissible referral by the President of the EPO of a point of law to the Enlarged Board of Appeal pursuant to Article 112 (1) (b) EPC.

3. As the wording of Article 112 (1) (b) EPC is not clear with respect to the meaning of “different/abweichende/divergent” decisions the provision has to be interpreted in the light of its object and purpose according to Article 31 of the Vienna Convention on the Law of Treaties (VCLT). The purpose of the referral right under 112 (1) (b) EPC is to establish uniformity of law within the European patent system. Having regard to this purpose of the presidential right to refer legal questions to the Enlarged Board of Appeal the notion “different decisions” has to be understood restrictively in the sense of “conflicting decisions”.

4. The notion of legal development is an additional factor which must be carefully considered when interpreting the notion of “different decision” in Article 112 (1) (b) EPC. Development of the law is an essential aspect of its application, whatever method of interpretation is applied, and is therefore inherent in all judicial activity. Consequently, legal development as such cannot on its own form the basis for a referral, only because case law in new legal and/or technical fields does not always develop in linear fashion, and earlier approaches may be  abandoned or modified.

5. Legal rulings are characterised not by their verdicts, but by their grounds. The Enlarged Board of Appeal may thus take obiter dicta into account in examining whether two decisions satisfy the requirements of Article 112 (1) (b) EPC.

6. T 0424/03, Microsoft does deviate from a view expressed in T 1173/97, IBM, concerning whether a claim to a program on a computer-readable medium necessarily avoids exclusion from patentability under Article 52(2) EPC. However this is a legitimate development of the case law and there is no divergence which would make the referral of this point to the Enlarged Board of Appeal by the President admissible.

7. The Enlarged Board of Appeal cannot identify any other inconsistencies between the grounds of the decisions which the referral by the President alleges are divergent. The referral is therefore inadmissible under Article 112(1)(b) EPC.”

 As regards the relationship between excluded subject mater and inventive step, the Enlarged Board concluded: 

“Indeed if the Boards continue to follow the precepts of T 1173/97 IBM it follows that a claim to a computer implemented method or a computer program on a computer-readable storage medium will never fall within the exclusion of claimed subject-matter under Articles 52(2) and (3) EPC, just as a claim to a picture on a cup will also never fall under this exclusion. However, this does not mean that the list of subject-matters in Article 52(2) EPC (including in particular "programs for computers") has no effect on such claims. An elaborate system for taking that effect into account in the assessment of whether there is an inventive step has been developed, as laid out in T 154/04, Duns. While it is not the task of the Enlarged Board in this Opinion to judge whether this system is correct, since none of the questions put relate directly to its use, it is evident from its frequent use in decisions of the Boards of Appeal that the list of "non-inventions" in Article 52(2) EPC can play a very important role in determining whether claimed subject-matter is inventive … It would appear that the case law, as summarised in T 154/04, has created a practicable system for delimiting the innovations for which a patent may be granted.” 

The Enlarged Board did not attempt ant definition of technical effect, but commented: 

“While the referral has not actually identified a divergence in the case law, there is at least the potential for confusion, arising from the assumption that any technical considerations are sufficient to confer technical character on claimed subject-matter, a position which was apparently adopted in some cases (e.g. T 769/92, Sohei, Headnote 1). However T 1173/97, IBM sets the barrier higher in the case of computer programs. It argues that all computer programs have technical effects, since for example when different programs are executed they cause different electrical currents to circulate in the computer they run on. However such technical effects are not sufficient to confer "technical character" on the programs; they must cause further technical effects. In the same way, it seems to this Board, although it may be said that all computer programming involves technical considerations since it is concerned with defining a method which can be carried out by a machine, that in itself is not enough to demonstrate that the program which results from the programming has technical character; the programmer must have had technical considerations beyond "merely" finding a computer algorithm to carry out some procedure.” 

The fine print of the opinion will attract obsessive attention from specialists in this area, but the bottom line for the time being is that the status quo will be maintained. European practitioners await the Bilski decision with, if anything, even more interest.

Federal Circuit Denies Apple's Motion to Transfer Venue out of Texas

In re Apple (Fed. Cir. 2010)

In a split decision, a Federal Circuit panel has denied Apple's petition for a writ of mandamus that had asked the court to transfer Apple's litigation out of the Eastern District of Texas.   

Three weeks before filing suit, the patent holder formed "Personal Audio LLC" in Beaumont, Texas and then assigned the patent rights to the new company and transferred files relating to the patents to that location (which happen to be the office of its litigation counsel). Personal Audio LLC then sued Apple, Sirius XM, and others.

In its decision on mandamus, the Federal Circuit disagreed with the lower court that the Texas court had a particular interest in adjudicating the dispute because Personal Audio was a local company. Rather, the Federal Circuit noted that the "company’s presence in Texas appears to be both recent and ephemeral—its office is apparently the office of its Texas litigation counsel, and it appears not to have any employees in Texas."

Still, the Federal Circuit refused to order a transfer because the defendants could not show that their chosen venue of Massachusetts was clearly better "particularly in light of the fact that none of the defendants is headquartered there."

Change of venue DENIED.

The majority opinion was filed by Judges Mayer and Bryson per curiam. Judge Lourie dissented without opinion.

* * * * *

The company PatentFreedom recently reported that Apple faced more NPE patent lawsuits during 2004-2009 than any other company. [LINK]

Judge Michel: USPTO Should Receive $1 Billion Infusion of Cash

Chief Judge Paul Michel recently spoke to USPTO patent examiners on the topic of “American economic security” and the threat posed by “the outflow of jobs, talent, technology and production.”  Judge Michel argued that private investment in US R&D is the only politically feasible solution and that goal will be supported by a well operating patent system: “The answer is faster, sounder and clearer patents, plus faster, stronger enforcement.”

If more R&D is done here, [technologically talented individuals] will come here and stay. If not, foreign talent studying at our universities will all return home. Our own leading technologists will also go elsewhere, just as is now happening in firms such as Intel and Applied Materials, both of whom will soon open large new labs in China headed by their top American researchers.

What is wrong with the current patent system:

First, and foremost: delay. In some technologies it now takes 4-6 years even to get a patent. . . . That is because for two decades the patent office has been underfunded and losing ground. It operates entirely on user fees set by Congress long ago at levels that can no longer finance necessary operations. It lacks both enough examiners, especially experienced examiners, and modern computer systems. Imagine, the government's own technology agency is using 30 year old computer technology! These are the reasons delays are so long. Even worse, because most applications must by law be published at 18 months, others, including foreign competitors, can pirate inventions for years before the patents issue, for until then patent owners have no rights.

The patent system is failing primarily because the patent office is failing. In a word, it is dysfunctional. Over 700,000 applications sit unread in a warehouse in Alexandria, Virginia, often for years. Although 400,000 are under examination, their progress is far too slow. And every year almost 400,000 more are filed. 

Using money to fix the problem:

. . . Although the PTO should remain financed by user fees, it I needs a transfusion of public money to overcome its dysfunction. It needs thousand of additional examiners, salary increases to retain experienced examiners, new computer systems and space to house an expanded work force. (At present, many employees, although lacking extensive experience, work at home where adequate supervision is more difficult and applicant interviews are problematic.) Thus, even if Congress raised fees, which it should, resolving the current crisis requires a large infusion of public money. And it is needed soon. Deferral will have corrosive consequences that cannot be undone. Therefore, I suggest an immediate capital investment of one billion dollars. It could be spent over the next several fiscal years, but it must be appropriated immediately. . . . Is my suggestion unrealistic? Maybe, but not if our nation followed proper priorities.

Would such a transfusion as a capital investment fix the patent office? Mostly. . . .

Read the text of Judge Michel’s Speech at the JPTOS Website.

Menell: Patent Authority of the International Trade Commission

Berkeley Law School professor Peter Menell has published a new essay in the Patently-O Patent Law Journal that discusses the Section 337 authority of the International Trade Commission (ITC).

The ITC now conducts more full patent adjudications on an annual basis than any district court in the nation. The ITC's six Section 337 administrative law judges (ALJs) focus almost exclusively upon patent investigations, making the ITC the only specialized trial-level patent adjudication forum in the nation. Given the importance of international trade to high technology markets, the ability to exclude goods at the border provides a valuable strategic option for patent owners. Consequently, all patent litigators and in-house patent counsel should be familiar with the ITC's Section 337 authority. This article summarizes its key elements and calls attention to an upcoming conference – The ITC Comes to Silicon Valley (May 18, 2010) in San Jose – and the development of a comprehensive, up-to-date treatise: Section 337 Patent Investigation Management Guide.

The essay also includes a useful table comparing differences in rights and procedures between district court patent adjudication and ITC patent investigations.

Documents:    

• Read the Essay: Peter S. Menell, The International Trade Commission's Section 337 Authority, 2010 Patently-O Patent L.J. 79.
• Conference: The ITC Comes to Silicon Valley (May 18, 2010).
• ITC Guide: Section 337 Patent Investigation Management Guide.

Patent Grants Continue to Rise

Two-weeks ago, I reported on the rising number of patent grants at the PTO. That trend has continued.  The chart below shows the average number of patents issued per week through May 11, 2010.  In the past three weeks, the USPTO issued an average of 4,517 patents per week. That figure is more than 40% above the 2009 weekly average. 

The USPTO issues new patents each Tuesday morning.  Of the weeks with the most patent grants, eight of the top-ten weeks are from this year (2010).  The other two high-grant weeks were in 1999 while Todd Dickinson was director.

 

Vegas Trade Show Satisfies Minimum Contacts Test

Patent Rights Protection Group v. Video Gaming Technologies (VGT), (Fed. Cir. 2010)

Patent Rights holds patent rights to several slot-machine patents and sued a host of companies for infringement. The Nevada-based district court dismissed the suits against VGT and SPEC for lack of personal jurisdiction. In particular, the district court held that personal jurisdiction would be “unreasonable.”

Although patent law is nationalized and litigation is handled in federal courts, the courts are only empowered to take action against defendant have sufficient contacts with the state where the court is located. This analysis of minimum contacts falls under the rubric of “personal jurisdiction” and has been well developed by the US Supreme Court in cases such as Burger King (1985) and International Shoe (1945). Here, the personal jurisdiction question is whether the defendants’ contacts with the Nevada are sufficient such that exertion of power by a Nevada-based court “would comport with ‘fair play and substantial justice.’ i.e., whether exercising jurisdiction would be reasonable.” (Nevada’s long-arm statute extends to the Constitutional limits.)

VGT and SPEC had only de minimis sales of their products in Nevada. However, both companies had attended several Las Vegas trade shows.

Writing for the unanimous court, Judge LINN [updated to correct typo] held that it would not be “prohibitively burdensome” for either defendant to defend this suit in Nevada. “Indeed, their admitted presence at numerous trade shows in Nevada indicates that, despite their arguments to the contrary, neither company faces a particularly onerous burden in defending itself in Nevada.” Here, the court concluded that exhibiting products at a Vegas trade show (“one of the world’s larger gaming markets”) was likely done with the prospect of commercial benefit and that use of a Nevada business opportunity satisfies the minimum contacts test.

On remand, the district court will likely consider further elements of the personal jurisdiction test (specific vs general jurisdiction) as well as venue.

Director Kappos Testimony to Congress

On May 5, 2010, Director Kappos testified to the House Judiciary Committee. The prepared testimony included three specific USPTO goals:

• By the year 2014, reduce the average time to first office action on the merits for patent applications to 10 months;
• By the year 2015, reduce total average pendency for patent applications to 20 months; and
• Create an IT infrastructure that permits end-to end electronic processing in patent and trademark IT systems. 

To reach these goals, the PTO is focusing on several specific initiatives:

International worksharing: The USPTO, EPO and JPO have agreed to use PCT search and examination results in their worksharing approach.  Director Kappos sees that option as having “the potential to dramatically increase the number of applications eligible for [Prosecution Highway] processing.”  The prosecution highway “concept is fairly straightforward.”

[W]hen an office determines that one or more claims are patentable in one application, the applicant may request fast-track examination of the same or similar claims in the second, related application filed with the second office. To have the request for fast-tracking accepted, the applicant must make available to the second office the relevant work of the first office as well as any necessary translations. By restricting the scope of claims presented to the second office, and by requiring the applicant to make the relevant work from the first office available to the second office, the PPH promotes a high degree of reutilization of first office work. The PPH also respects the principle of sovereignty noted above because each office maintains responsibility for the final determination of patentability in accordance with applicable law.

Hiring: The USPTO is looking to hire 1000 additional patent examiners over the next two years. The bulk of these examiners would preferably be experienced IP professionals but could be part of a “nationwide workforce.”   With the absence of funding, the PTO has hired only nine (9) examiners during FY2010 and 127 examiners have left their positions.

Funding: Director Kappos would hope for fee setting authority to allow for an “interim fee adjustment on patent fees to provide resources in the intermediate term; and an operating reserve to ensure adequate reserves to address multi-year budget plans and fluctuations in revenues.”

In his testimony, Damon Matteo, Chairman of the PPAC also indicated that “temporary” administrative fee-setting authority may well be the best first-step in patent office reform. 

We believe that to assure adequate funding levels for the long term, the USPTO needs authority to set and adjust fees administratively, so that it can properly establish and align fees in a timely, fair and consistent manner to recover the actual costs of USPTO operations and without going through the inherently long delays in the legislative process. This will afford the USPTO the opportunity to reform its funding model holistically to operate in a more businesslike fashion. After a period of time, or once the USPTO is on firmer fiscal footing, the fee-setting authority can be revisited.

Documents:

• Prepared Testimony

Patenting by Small-Entities

The number of small-shop innovators continues to dwindle. In a sample of recently issued patents,* only 20% claim “small entity” status. Of those, 30% (6% of the total) are held by the original inventors.** According to the PTO Rules, large universities and non-profits still qualify as for the small entity price-break so long as the patents-in-question have not be assigned or licensed to a non-qualifying entity. At least 12% of the small entity patents are assigned to universities or non-profits. These small entities include multi-billion-dollar operations including Battelle Energy Alliance, California Institute of Technology, Princeton University, and the Korean government funded ETRI. The remaining small entity patents are largely held by companies and partnerships such as Audible Magic, PixArt Imaging, and Alverix.

US versus Foreign: Only 45% of the large-entity assignees are US based while 69% of the small-entity assignees are US based and 77% of the un-assigned patents include at least one US based inventor. (See Graph at Right).

• * This data comes from a set of 1700 utility patents issued on April 27, 2010.
• ** I.e., the USPTO has no assignment on record associated with the patent.

Donald Chisum: Ariad (2010) and the Overlooked Invention Priority Principle

In a new essay for the Patently-O Patent Law Journal, Donald Chisum considers the "invention priority principle" and its role in the written description analysis. 

There may be a solution: application of an established patent law priority principle. The principle focuses on a specific embodiment of a generically claimed invention as a constructive reduction to practice, that is, as a completion of the inventive process. Adopting this solution would preserve the written description of the invention's (WDIs) independence and applicability to original claims but would remove WDI as a standard for assessing the scope of a patent claim. WDI would continue to govern whether, at the time an applicant files an application, he or she has completed the inventive process, that is, "possesses" the invention. But only enablement would govern how broadly the applicant is entitled to claim that invention. It may be possible to implement this priority principle interpretation of Ariad without contradicting its clear holdings.

Cite as Donald S. Chisum, Written Description of the Invention: Ariad (2010) and the Overlooked Invention Priority Principle, 2010 Patently-O Patent L.J. 72.

Other Patently-O Patent Law Journal publications: 

• Kevin Collins, An Initial Comment on Ariad: Written Description and the Baseline of Patent Protection for After-Arising Technology, 2010 Patently-O Patent L.J. 60.
• Etan Chatlynne, Investigating Patent Law’s Presumption of Validity—An Empirical Analysis, 2010 Patently-O Patent L.J. 37.
• Michael Kasdan and Joseph Casino, Federal Courts Closely Scrutinizing and Slashing Patent Damage Awards, 2010 Patently-O Patent L.J. 24.
• Dennis Crouch, Broadening Federal Circuit Jurisprudence: Moving Beyond Federal Circuit Patent Cases, 2010 Patently-O Patent L.J. 19. 
• Edward Reines and Nathan Greenblatt, Interlocutory Appeals of Claim Construction in the Patent Reform Act of 2009, Part II, 2010 Patently-O Patent L.J. 7.
• Gregory P. Landis & Loria B. Yeadon, Selecting the Next Nominee for the Federal Circuit: Patently Obvious to Consider Diversity, 2010 Patently-O Patent L.J. 1.
• Edward Reines, and Nathan Greenblatt, Interlocutory Appeals of Claim Construction in the Patent Reform Act of 2009, 2009 Patently-O Patent L.J. 1.
• Paul Cole, Patentability of Computer Software As Such, 2008 Patently-O Patent L.J. 1.
• Mark R. Patterson, Reestablishing the Doctrine of Patent Exhaustion, 2007 Patently-O Patent L.J. 38
• Arti K. Rai, The GSK Case: An Administrative Perspective, 2007 Patently-O
  Patent L.J. 36.
• Joshua D. Sarnoff, BIO v. DC and the New Need to Eliminate Federal Patent Law Preemption of State and Local Price and Product Regulation, 2007 Patently-O Patent L.J. 30
• John F. Duffy, Are Administrative Patent Judges Unconstitutional?, 2007 Patently-O Patent L.J. 21.
• Joseph Casino and Michael Kasdan, In re Seagate Technology: Willfulness and Waiver, a Summary and a Proposal, 2007 Patently-O Patent L.J. 1.

Divisional of a Divisional: Avoid Terminal Disclaimers

Boehringer Ingelheim International GMBH v. Barr Laboratories, Inc. (Fed. Cir. 2010) (denial of en banc rehearing)

In January 2010, the Federal Circuit expanded the scope of the safe-harbor created by 35 USC 121 against double patenting allegations. Namely, the court held that a divisional-of-a-divisional still qualifies for the safe harbor so long as the later-filed applications do not violate the Examiner's original grouping suggestions.

Now, the court has denied generic drugmaker Mylan request for rehearing en banc. Mylan had presented two questions:

1.    Whether a divisional of a divisional patent application is a "result of a restriction requirement imposed on an original application, entitling a patentee to invoke 35 U.S.C. § 121's safe harbor from invalidity due to double patenting, where the second divisional was filed voluntarily for strategic reasons and was not mandated by the original restriction requirement."

2.    Whether a divisional application is "consonant" with a restriction requirement, entitling a patentee to invoke the safe harbor of 35 U.S.C. § 121, where the divisional disregards the lines drawn by the examiner in imposing the restriction requirement.

Judges Gajarsa and Dyk dissented from the en banc denial. In the dissent, Judge Gajarsa wrote:

Because the majority's decision improperly expands the statutory safe-harbor provision of 35 U.S.C. § 121 beyond Congress's intended scope, I respectfully dissent from the court's denial of Mylan's petition for rehearing en banc. While the Supreme Court has not construed § 121, the majority's expansive opinion is inconsistent with our longstanding precedent, and will work a major change in our jurisprudence. The purpose of § 121 is to prevent the inequity that resulted from an examiner's improper restriction requirement (separating out supposedly patentably distinct inventions that were in fact the same or not patentably distinct), whereby a patentee's compliance with an examiner's incorrect restriction would result in the original application being used as a reference against the later divisional application and a rejection on double patenting grounds. See Pfizer, Inc. v. Teva Pharms. USA Inc., 518 F.3d 1353, 1361 (Fed. Cir. 2008); Studiengesellschaft Kohle mbH v. N. Petrochem. Co., 784 F.2d 351, 359 (Fed. Cir. 1986) (Newman, J., concurring). Thus, § 121 "effects a form of estoppel" against the PTO, "that shields the applicant from having to prove the correctness of the restriction requirement in order to preserve the validity of the second patent." Studiengesellschaft, 784 F.2d at 361. In our past decisions, we have limited § 121 in accordance with its language and clear purpose to situations in which the patent applicant has been forced to divide his application by action of the PTO. We have interpreted the statute to include a requirement of consonance, requiring that the later application or applications follow the original examiner's restriction requirement, and we have interpreted the statute to include a requirement that the later application or application be filed "as a result of" the original PTO restriction. In addressing § 121, the majority opinion commits two legal errors. First, it significantly undermines this court's "consonance" precedence by permitting a patentee to ignore the examiner's demarcation of independent and distinct inventions in subsequent divisional applications. Second, it engages in an impermissible and expansive reading of § 121's "as a result of" language. Either error in isolation would be worthy of en banc review; coupled together, the errors threaten to significantly broaden § 121's safe-harbor provision in clear defiance of this court's "strict test for application of § 121." Geneva Pharms., Inc. v. GlaxoSmithKline PLC, 349 F.3d 1373, 1382 (Fed. Cir. 2003).

 

Gary Locke: Patent Office Needs Self-Control of Funding and Enhanced Post-Grant Review

The following essay was written by Secretary of Commerce Gary Locke and originally published in Politico. Locke is the former Governor of Washington and former partner at Davis Wright Tremaine. As you may know, the US Patent & Trademark Office operates as a branch of the Department of Commerce. 

* * * * *

As Congress hurtles toward the midterm elections, there are two things everyone agrees Washington needs to keep working on: spurring job creation and promoting continuing economic recovery.

Fortunately, there’s legislation now before Congress that has bipartisan support, can boost our economy and doesn’t add a cent to our federal debt. This bill aims to fix the outdated patent system, which has left the U.S. Patent and Trademark Office with a backlog of 750,000 applications — a backlog that’s threatening America’s ability to innovate. 

And that’s a big problem, because innovation is the lifeblood of the U.S. economy. The introduction of new products and services accounts for three-quarters of America’s annual growth rate since World War II. This innovation is fueled by businesses, inventors and entrepreneurs who depend on patent protection to attract capital investment and to promote and protect their products and services in the global marketplace. Today, America’s patent system – and by extension our entire innovation system – isn’t working. As a result, we are jeopardizing our edge in the global economy.

America may still be a world leader in key metrics of economic success – like levels of entrepreneurship, R&D investment and IT infrastructure – but a report last year from the Information Technology and Innovation Foundation concluded that no advanced economy has done less than the United States to improve its competitive position over the past decade. President Barack Obama sees the urgency of this problem and has announced a formal National Innovation Strategy, which, among other things, calls for doubling the budgets of agencies like the National Science Foundation so they can better support the basic research that spawns new products and services.

But to unleash the full power of America’s innovators, we’ve got to repair an overloaded and inefficient patent system. The unacceptably long backlog at the patent office – in which the average time it takes to grant or deny a patent is more than 34 months – is a striking signal of the system’s dysfunction. Since taking over at the patent office last August, David Kappos has already made significant strides in reforming the workplace, improving productivity and boosting morale. These steps and others have been applauded by all sectors of the innovation community. But additional, desperately needed reforms require action by Congress. The Commerce Department just released a white paper that quantifies the effect America’s patent system has on the economy and job creation and describes the benefits of two key elements of pending patent reform legislation.

First, Congress will grant fee-setting authority to the patent office, which will enable it to adjust the actual costs of the services it provides. This could contribute significantly to the office’s ability to reduce the application backlog by 40 percent. Second, creating an enhanced post-grant review procedure within the office will provide an alternative to costly – and often lengthy – litigation. It could also provide greater marketplace certainty – at lower cost. This review procedure is expected to be 50-100 times less expensive than litigation.

The patent reform legislation being considered by both chambers will also improve patent quality, streamline the patent examination process, promote international harmonization of patent law and limit litigation expenses. All these provisions will foster innovation and contribute to long-term economic growth. As we move forward on reforming our patent laws, we need to remember that the ultimate goal is to create more American jobs that can provide dignity, security and a sense of hope for the future. After a decade fueled by speculation and short-term thinking, the United States needs to refocus on nurturing innovations that generate real value for society and spur sustainable job creation. It’s not the role of the federal government to predict or dictate exactly how this new economy will take shape. Our job is to create the right set of incentives, regulations and laws that allow innovators to experiment with new ideas, build new businesses and follow their dreams. Patent reform legislation is a key part of this strategy. To promote continued economic recovery, it is critical for Congress to create a business environment that fosters innovation and risk taking ‹ accelerating economic growth and job creation and expanding America’s ability to innovate. Now is the time to act. Congress should seize this opportunity and send patent reform legislation to the president’s desk. Gary Locke is the secretary of commerce.

Patent Litigation Forum Shopping

Professor Mark Lemley has released a draft of his new study on patent forum shopping titled "Where to File Your Patent Case." Professor Lemley suggests three primary factors that influence a patentees choice of forum: (1) likelihood of winning; (2) likelihood of getting to trial; and (3) speed of getting to trial. Professor Lemley used the Stanford IP Litigation Clearinghouse database to classify these factors for 25 most-active district courts. (http://ssrn.com/abstract=1597919).

Win Rate: "The variation in win rates ranges from a high of 55% in the Northern District of Texas to a low of 11.5% in the Northern District of Georgia." Interestingly, Lemley finds that "the Eastern District of Texas, while it has a higher than average plaintiff win rate, is not in the top five districts. And the districts that are in the top five (the Northern District of Texas, the Middle District of Florida, the District of Nevada, the District of Delaware, and the District of Oregon) are not normally thought of as plaintiff patent jurisdictions of choice. Indeed, accused infringers often choose the District of Delaware, filing declaratory judgment actions there. Conversely, patent plaintiffs often file suit in districts like the District of New Jersey that have a surprisingly low win rate."

Best Venues: When you add-in speed and likelihood of trial, Lemley argues that the best districts include the Middle District of Florida, District of Delaware, Eastern District of Virginia, and the Western District of Wisconsin. The best districts for accused infringers include Eastern District of Wisconsin, the Southern District of Ohio, or the District of Columbia because patent cases in those districts move slowly and more-frequently end with summary judgment in favor of the accused infringer.

Caveats: Prof Lemley hints at a few caveats to his study. Namely, the win-rate in the Eastern District of Texas might be lower than Delaware because of the cases filed there. I.e., patentees with low-quality patents might be more likely to flock to Texas rather than Delaware. 

Read the Paper: http://ssrn.com/abstract=1597919

Note: The data provided here by Prof Lemley is similar to that used by patentees when deciding where to file and in arguing change-of-venue motions.  It is unlikely that the parties are making ignorant choices.  Rather, patentees are deliberately filing cases in the Eastern District of Texas despite these statistics.  The next step in this analysis is to query why?

The heat-map above shows patent litigation filings for the past year and was provided by the Stanford IP Litigation Clearinghouse.

Patent Pendency: Reconsidering Expedited Examination

On September 19, 2009, Oleg Zaitsev filed his patent application directed to a computer-hardware implemented anti-virus system.  Zaitsev included a petition for accelerated examination along with pre-examination search results and an examination support document explaining the validity of the drafted claims.

In a December 10, 2009 telephonic interview, the applicant (through his attorney) agreed to add an additional limitation into the independent claims via examiner amendment. On December 17, 2009, the examiner from Art Unit 3685 issued a notice of allowance. The patent then issued February 2, 2010.

The less-than-three-month notice of allowance is especially important since patent applications from AU 3685 have an average pre-issuance pendency of over 5.5 years.

See Patent No. 7,657,941.

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The 2010 patent with the earliest application date is No. 7,673,565.  That application was filed in 1977 and is directed toward infra-red proximity fuzes for missiles. The US Department of Defense had stalled the processing of the application through a secrecy order.

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The 66,000 patents issued Jan 10, 2010 – April 27, 2010 had an average prosecution pendency of 3.8 years from filing or 4.8 years from the earliest US priority date. For applications with at least one non-provisional US parent application, the average pendency was 7.0 yeasr from the earliest US priority date.

How Long Do I Wait for a First Office Action

Based on the USPTO's most recent numbers on examination, I created an updated table of the average delay until a first office action is mailed from the PTO. These numbers reflect an average for each technology center as it operates today. The 3.25 year delay in Electronic Commerce (TC 3620) means that the applications receiving first office actions during the past three months had been pending for 3.25 years ago on average — taking us back to applications filed around new-years 2007. One-year-ago, the delay for TC 3620 was 3.9 years from filing to FAOM. The numbers do not necessarily reflect how long it would take for an application filed today to make it through. (Although it is perhaps one of the better estimates that we have on hand.).

Tech Center	Area of Technology	Average Years Delay Before First Action on the Merits
2900	Designs	1.13
1660	Plants	1.40
1640	Immunology receptor ligands	1.95
3670	Wells earth boring	1.96
3610	Surface transportation	2.12
1620	Organic chemistry	2.17
3640	Aeronautics	2.19
1650	Fermentation microbiology	2.21
1630	Molecular biology	2.25
3630	Static structures	2.25
3720	Manufacturing devices	2.25
3760	Body treatment	2.41
3650	Material handling and	2.43
2180	Computer architecture	2.49
3660	Computerized vehicle	2.49
2160	Database and file management	2.55
2110	Computer architecture	2.56
3710	Amusement and	2.60
3740	Thermal and combustion	2.65
3750	Fluid handling and	2.68
1610	Pharmaceutical formulations	2.72
2120	Miscellaneous computer	2.76
3730	Bio and Organic	2.79
3780	Bio and Organic	2.79
3770	Respirators Therapeutic	2.83
2610	Digital Communications General	3.06
2620	Television and TV Recording	3.12
3620	Electronic Commerce	3.25
2190	Interprocess communications	3.98

USPTO News: Patent Grants up 35% over 2009

In 2009, the United States Patent & Trademark Office (USPTO) issued 167,349 utility patents at an average rate of 3,218 per week. Since then, the PTO has significantly picked-up-the-pace.  The chart below shows the average number of patents issued per week for January-April 2010.  In April 2010, the USPTO issued an average of 4385 patents per week. The April figure represents a more-than 35% increase from the 2009 weekly average. If the April 2010 figures hold for the rest of 2010, we should expect about 220,000 issued utility patents for the year. That 50,000 year-to-year increase in patent grants for 2010 would represent the largest single-year jump in history.