Guest Post by Professor Tun-Jen Chiang of George Mason University.
Patent litigators are all familiar with the Eastern District of Texas. The reason that this otherwise-unexceptional district is able to dominate patent litigation comes down to a little known case, VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990), which created nationwide venue for virtually every patent case.
Some background is in order. 28 U.S.C. § 1400(b) allows a patent infringement action to be brought, inter alia, where the defendant "resides." Intuitively, one would think that residence refers to the state of incorporation or principal place of business, and under that version few defendants reside in East Texas.
28 U.S.C. § 1391(c) adds a wrinkle. It states: "For purposes of venue under this chapter, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction." By the plain language of the statute, a corporation that makes any sales in East Texas is then deemed to reside there. This is the basic analysis of VE Holdings.
But the Supreme Court decision in Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957) is very much to the contrary. Fourco dealt with the prior version of § 1391(c), which stated: "A corporation may be sued in any judicial district in which it . . . is doing business, and such judicial district shall be regarded as the residence of such corporation for venue purposes." The respondent in Fourco specifically argued that old § 1391(c) was clear and deemed a corporation to "reside" wherever it did business. The Supreme Court nonetheless held it did not apply to § 1400(b):
We think it is clear that § 1391 (c) is a general corporation venue statute, whereas § 1400(b) is a special venue statute applicable, specifically, to all defendants in a particular type of actions, i.e., patent infringement actions. In these circumstances the law is settled that [h]owever inclusive may be the general language of a statute, it will not be held to apply to a matter specifically dealt with in another part of the same enactment. . . .
We hold that 28 U.S.C. § 1400 (b) is the sole and exclusive provision controlling venue in patent infringement actions, and that it is not to be supplemented by the provisions of 28 U.S.C. § 1391(c).
The Federal Circuit in VE Holdings distinguished Fourco because the statutory language had changed. See 917 F.2d at 1579. But the change in language was immaterial to the underlying rationale of Fourco: the new § 1391(c) was and is still a "general corporation venue statute," and § 1400(b) was and is still a "special venue statute applicable, specifically, to . . . patent infringement actions."
What we have is the familiar situation where the Federal Circuit tosses aside a Supreme Court decision by invoking a slim excuse. See KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398 (2007). Until very recently the Supreme Court indulged this. But the Court seems to have changed, and this would be a good time to revisit VE Holdings.
I should add one thing, which is that one can very much question whether Fourco itself is correctly decided. But this is, of course, not a question the Federal Circuit should arrogate upon itself to decide.
"What's the difference between a circuit and a process?" you ask. "One of them does not require a circuit." I answer.
Then you respond suggesting that it is my position that a circuit does not require a circuit?
Then you accuse me of being silly?
101, if you really want people to even read your posts, you have to do a little bit better than this.
101, your posts are very good.
The problem is that Heller, Lemley, Moore, Stern, have no interest in fairly characterizing information processing methods and machines. That is the great irony. They have helped create problem by not trying to understand it.
This latest no structure business is just another example. Rather than trying to understand what the inventor should be entitled to in a fair fashion we have this intellectual dishonest claim that all information processing is structureless.
They want to double down on Benson. If you read Lemley he is clearly using Benson as a template to try and find a way to justify the result in Benson. Lemley is amoral. He publishes in a vanity press and pretends it is similar to a scientific journal like Nature. You should not be permitted to use journal on publication name Lemley. You shame all of Stanford. He is, I will repeat it, the most dangerous man ever to come close to patents. Clever, in tune with what the SCOTUS is thinking, and amoral with a hidden agenda.
You see, there is a real problem here. How to claim information processing inventions and how to deal with some of the real issue of scope of enablement, but under the current blitz it is impossible to have a real debate. Thank you, Lemley for your filth.
And, by the way, Lemley, in any real debate with a moderator, I’d wipe the floor with you.
What?
By saying a circuit doesn’t require a circuit you think you have defined or explained something?
Mr. Heller you have defined nothing and explained even less.
Let along proven a point.
You have merely descended into your silly word play as you normally do when you have lost a debate on the merits.
yeah, you really should cite at least one of the many articles that discuss this rather than trying to present it as your own idea. Close to plagiarism.
Sure I did.
Wrong. You failed to explain the difference between a circuit and a process.
101, you got me there.
Well, whats wrong with a new use of an old machine being a valid patent?
Even using your iphone example, lets say I put a water proof casing on the phone, program it with a electronic signal that attracts fish like crazy and makes them strike. Seems reasonable to me that I can get a patent at least on the new use of a smart phone, as a fishing lure, providing it overcomes the prior enabled art.
Hey, 101, I was right. A method for navigating a circuitous pathway does not require a circuit.
On the Saunders patent, why don't you give us the patent number so that we can comment on it.
Rich never saw a machine patent for an new use of an old machine that he did not think valid.
“One does not require a circuit”
Tell that to Clarence Saunders whose 1916 (IIRC) patent on a “Circuitous Pathway” would be called a process under today’s law. (Post 1952 Patent Act.)
And no doubt labeled by you as a business method, since that pathway lead to financial transactions.
Interestingly enough you would have 6 claiming Saunders “Circuitous Pathway” was an abstract mental concept that pre-empted all “Circuitous Pathways” and therefore the invention was abstract under 101.
And even more telling such an invention today would use some form of information processing that would get half the nation riled up and most big business too, all crying it’s an abstract concept because computers and/or an algorithm is involved.
The bottom line Mr. Heller is that your concepts of pre 1952 patent law, and pre E=MC Square science & technology completely fall apart when applied to real inventions and claims, past or present.
Maybe that is why you refused to accept my challenge to perform “Integration Analysis” on Ultramercial’s claims.
Even Saunder’s “Circuitous Pathway” would pass “Integration Analysis” of today.
Anyway a “Circuitous Pathway” is process whether that pathway is found for queueing through:
An open air forrest,
A two wall enclosed canyon,
A four walled enclosure of non electronics,
or
A completely enclosed boxed of state of the art metal and synthetic parts for blogging on the Internet.
“101 Integration Expert,
I wonder if 6 is ready to put his money where his mouth is and take you up on your integration challenge.”
I sincerely doubt that. For one I do not believe 6 has the intellectual competence to perform “Integration Analysis”.
Which is very disturbing for someone that purports to be an Examiner, since that would make “Integration Analysis” his/her job.
But none the less, my challenge still remains open for 6 to perform “Integration Analysis” on Ultramercial’s claims according to the USPTO Official Guidelines on Integration.
Rich in infamy?
Really Mr. Heller??
Rich legacy is indeed Rich, in many ways including:
Keeping business methods the law of the land.
Making sure software was patent eligible subject matter.
And most profoundly in “Integration Analysis”
There’s no requirement that applicant disclose every species of a genus to support a generic claim. If the algorithm is disclosed, and one of ordinary skill in the art could program a computer to perform the necessary steps to achieve the claimed function, the claim is supported.
Greg is not everybody’s cup of tea. He can be the fly in the ointment. He rarely fails to entertain though.
Night, regarding patentable subject matter, a you suggesting that both Le Roy v. Tatham and O'Reilly v. Morse are not the law because the Supreme Court does not have the authority to interpret the statutes? Both cases pinned their authority by what we now know to be section 112.
Regarding functional claiming, I you suggesting that the Supreme Court does not have the authority to suggest that a claim that is functional at the point of novelty is not indefinite, when the statutes require that the claims particular point out and distinctly claim the invention?
guy sure knows how to rant doesn’t he? That reminds me of NWPA’s rants. He’s got some few things correct, about the genus species problem, but what goes unmentioned by both Lemley and Greg is that the genus species problem in functionally claimed software patents in b claim form (and many others) renders them 112 1sted due to lack of written description.
OK.
Now, what did Alappat hold?
Anon, since you haven't even stated a position on what the law was prior to 1952 regarding functional elements of claims, you might be correct, but none of us here reading Patently O would know that.
Now what was that law?
Anon, not really.
anon, you may have a point.
One does not require a circuit.
There’s an app for that.
“In a sense, 101. You, for example, might use you brand new iphone as a fishing lure. File a patent on that and see how far you get.”
Ned, thank you for once again providing an example that defeats your own arguments. Here is an example of meeting 112 but perhaps not 101 as to utility. You can easily teach how to use an electronic device (in the form of a cell phone; for example suitably waterproofed with the right app) as a fishing lure. 112 easily met. Perhaps not so with 101.
Anon, what you say is true. The SCOTUS 101 monkey business in another reason we have the USTPO, Fed. Cir., and the SCOTUS all interpreting and doing different things for 101.
The problem, I think, is that SCOTUS does indeed make law.
You will notice however that they hide their law making (at least on the judicial exceptions) under the guise of “implicit” in 101 (and notably per the 9-0 Prometheus decision solely in 101 – no dead letters allowed).
Ned: “Supreme Court never intended to authorize”.
I think you have your head on backwards. The SCOTUS job is only to say what is unconstitutional or interpret the statute. Congress and the President are responsible for making the laws.
Congress should just put patents out of the jurisdiction of the SCOTUS.
You continually, just don’t get law. All of the SCOTUS 101 jurisprudence is all exceptions that should be as narrowly interpreted as possible. And should be seen has invalid being invalidated after new laws are passed.
You really just don’t get it. The SCOTUS does not make law.
Yes, and now the form of self promotion has reached the point of creating little videos.
Dennis, you meant to include “broadest reasonable interpretation In light of the specification?”
Right?
Ned, this is fact and law (regardless of State Street).
Hint: Alappat.
Ned, try using post 1952 case law cites.
101 Integration Expert,
I wonder if 6 is ready to put his money where his mouth is and take you up on your integration challenge.
Emphasis on “reasonable?”
You just supplied more material that shows that I am correct and that you are incorrect.
Will you stop citing bad law in your arguments now?
Please.
Irrelevant.
We are indeed.
“But a process is a sequence of acts. If one finds a path, how is that a process?”
Does it require your “sequence of acts” to discover?
“How is that even a machine?”
Does it require a combination of devices to produce a result?
“101, there is a difference”
Oh really? What exactly is the difference between a circuit and a process?
That’s just a concept. Give me an application and integration and that will get me pass 101 guaranteed. And you failed to disprove that…
“If I discover a path between two or more points along which an electronic current can be carried, and figure out how to make it work, and no other circuits are using that path, there is nothing That says I can’t get a patent on that process itself.”
Now you may continue meandering away from the above point you just lost.
Night, there is nothing wrong, nothing wrong at all, with describing known items functionally, generically or whatever. The invention is not in the old item, but in its combination with other things.
The Supreme Court in Faulkner v. Gibbs made it manifestly clear that they had no problem with functionally defined old elements in combination claims. None at all.
Think about this for a minute, then get back to me.
So, if I claim a picture frame comprising four pieces of wood arranged in a frame held at their edges by fastening means, and I disclose only a nail, is the claim invalid. Does a screw infringe?
The problem arises if a picture frame is old, and the use of a nail is old. Instead of a nail, I use glue. I then claim “a picture frame comprising four pieces of wood arranged in a frame held at their edges by fastening means.” This claim literally reads on the prior art and does not define the novelty at all. The claim is indefinite.
The Supreme Court never intended to authorize such claims, but perversely, Judge Rich in Donaldson overruled the Supreme Court once again and held that such a claim was definite.
Ugh.
There are many reasons as I understand it.
For awhile it was very hard to get any cases transferred to another jurisdiction out of ED tex, but idk about that today.
It is rumored they have favorable juries for patentees on the whole.
Are we applying broadest reasonable interpretation?
Anon, from Ladas and Parry’s summary of US patent law, at note 39:
“This provision was intended as a partial statutory overruling of the Supreme Court’s decision in Halliburton Oil Well Cementing Co v. Walker 71 USPQ 175 (1946) which had held that any definition of a component of a claim by the function that it was to perform lacked clarity and constituted an “overhanging threat” which could serve to “frighten[] from the course of experimentation … inventive genius [which] may evolve many more devices to accomplish the same purpose.”
link to ladas.com
That statement reflected general understanding of the bar, or at least, their general concern. Even Lemley said it was the general belief.
112, p.6, was enacted to overturn what people understood Halliburton to stand for. But in the end, the Supreme Court made it clear in Faulkner that functional elements in combination claims was not the problem.
I think the bar acted out of extreme caution, just to make sure. But there is nothing in the act to authorize single means claims, and these include claims that add to the single means nominal or conventional elements.
The novelty is in the single means.
As such, the claim fall afoul of numbers of Supreme Court cases besides Halliburton, including Wabash, Perkins Glue and O’Reilly v. Morse.
“Modern science and technology is far removed from patent law?”
Nah, but your misunderstanding thereof is. They were using big words in those classes you supposedly took, and most of them went over your head.
“6, is not an authority.”
Technically incorrect.
Modern science and technology is far removed from patent law?
Really 6?
If one understands “integration analysis” which you obviously have no clue about, then one would know science and technology is an inherent part of patent law. For there can be no invention and therefore no patents without science and technology.
Mr. Heller:
6, is not an authority.
and your statement: “But it comes from the Supreme Court”, is not a proper pin-cite.
If you have a Supreme Court case that so holds your view then cite it. Otherwise do what you have never done before, admit defeat, learn and grow.
In a sense, 101. You, for example, might use you brand new iphone as a fishing lure. File a patent on that and see how far you get.
101, there is a difference. But a process is a sequence of acts. If one finds a path, how is that a process? How is that even a machine? Is it a composition of matter? What is it?
I’m not a patent attorney, so could someone please explain to me why the Eastern District of Texas is so popular for litigation? Thanks.
If one person can use it, it is useful.
What does it matter?
Is a circuit not always a circuit and a process not always a process?
I'm sorry, anon, but there was a lot of angst at the time. IIRC Lemley cited some case commentary. However, the fact that the bar wanted to "overturn" Halliburton independently demonstrates the angst.
“While it may be true that a process does not require a particular machine, every course I ever took on cognitive psychology, neuroscience, systems analysis and complex information processing, all taught me that, “processes” require structure. ”
If you ever actually did take such classes (which I doubt), that explains why your view of what a “structure” is is so far removed from what we are actually discussing in patent law as to be lolable.
“See Lemely’s article…
Given that assumption, what Frederico said is clear.”
Thanks for proving my case Ned.
You can pretty much take any assumption by Lemley and use it as proof of its counterpoint.
Plus, directly to our conversation, you STILL have to show how you take Frederico’s exact words and turn them 180 degrees around to reach the fallacy of mere codification.
The reason why you have not done so is simple: you cannot do so.
On top of that, you are STILL trying to use the point of novelty and I have shown you that the Court has repeatedly ruled that the point of novelty is the claim. The whole claim.
Stop using fallacy in your arguments. It’s not working.
Not typically, but who knows? Perhaps I’ve fired him off a few times. I couldn’t tell you for sure, but it isn’t in my form paragraphs or anything.
anon, the bar generally believe Halliburton had banned functional claiming in apparatus claims.
See Lemely's article. He agrees with this proposition.
Given that assumption, what Frederico said is clear.
In sum, The patent bar believed that Halliburton had banned the use of functionally defined claim terms in combination claims. Based upon this belief the bar urged §112, paragraph 6.
This does not mean that section 112 paragraph 6 was intended to authorize claims that were functional at the point of novelty. These are single means claims. Federico said that section 112 paragraph 6 did not authorize a single means claims.
“anon, asked and answered”
Respectfully Ned, not at all. Perhaps you thought you answered by email, but such answer is not present here on the web site.
Again, explain the explicit words of Frederico saying Halliburton was made obsolete by the 1952 Act, and make this copacetic with your notion of “merely codified.”
You still need circuits.
anon, asked and answered.
Anon, tell us, please, what the law regarding functional claims was prior to Halliburton?
link to blog.hiplegal.com
What is the invention?
Mr. 101, what about utility?
“Oh I can’t remember the silly case name”
Come back when you do.
Still looking MM? You’ve been gone for awhile now.
“Give me an example”
How about the Morse claims that were allowed.
“But, generally, A to D converters are circuits.”
Generally?
This is a path I have tried in the past to help you walk Ned. Are you ready to take those three steps to understanding software?
Ned,
Explain Frederico’s words.
Do so with case law after the passage of the 1952 Act.
Once again, you appear to be too selective in your “remembering,” and conveniently excising those things that get in the way of your agenda. Sorry Ned, but you have too deal with these things.
And finally, stop with the Point of Novelty fallacy. The Supreme Court (post 1952) has made clear that the point of novelty is the claim itself – the whole claim. Any statement from you must deal with this. Any statement from you must deal with claims composed entirely of non-novel elements. Your attempts at painting a foundational view with any Point of Novelty must fail given these points and your ignoring them does not make them go away. Your mindlessly repeating “codification” does not make it so. Your writing an article does not make it so. All you are doing is closing your eyes, sticking your fingers in your ears and chanting “nananana.” Remove your fingers so that you can hear your own offered evidence from Frederico. Open your eyes to the actual words and open your mind to understanding what those words actually say – not what you want them to say.
“Even the idea of that is obnoxious.”
Mr. Heller:
What is the difference between a circuit and a process?
When you can answer that honestly, you may discover that the only idea that is obnoxious is your own.
Mr. Heller:
Well if I discover a path between two or more points along which an electronic current can be carried, and figure out how to make it work, and no other circuits are using that path, there is nothing in the statute, or Constitution that says I can’t get a patent on that process itself.
Mr. 101, if you invent one circuit, you cannot get a patent on all circuits that perform the same function. Even the idea of that is obnoxious.
Ask 6.
But it comes from the Supreme Court.
Give me an example.
anon, I know in minute detail the entire process behind 112, p.6. I co-wrote the defining article with Rudy Hoffman. I have described the process in detail many times. Rich was codifying Faulkner v. Gibbs and Westinghouse.
However, as everyone recognized, right after Halliburton, there was broad concern that all forms of functional claiming in combination claims was proscribed. It was this concern that prompted a proposed amendment. But what happened was instead a codification because Faulkner v. Gibbs clarified Halliburton. The SC made clear that functional elements in combination claims were acceptable where the novelty was in the combination.
Such claims were already construed, per Westinghouse, to cover the corresponding structure recited in the specification and equivalents. Nothing new there at all.
Codification.
Nothing about overruling, which would have required saying something about PON. Indeed Frederico specifically said 112, p. 6, did not apply to single means claims or their equivalent, which was the exact and entire problem with the Halliburton claims.
anon, not it does not. Your icon Rich may have said so in State Street Bank, but that case had joined Rich in infamy.
Mr. 101, agreed. If you can claim the process of conversion in some fashion, then you are not limited to specific apparatus or circuits.
But, generally, A to D converters are circuits.
anon, that Frederico did not appreciate the rule of construction (from Westinghouse) was already the law can be understood. He was not a litigator. However, the portion about "combination" in 112, p.6, was clearly a codification of Faulkner. If it was not, you will have to explain why congress did not say something about "point of novelty." They said nothing at all. Nothing. If they had intended to OVERRULE Halliburton, one would think that congress might have said something about PON.
Instead, Faulkner clarified that functional elements in combination claims were OK. That is what congress enacted. Why in the fricken world do you think that Halliburton overturned Faulkner or Halliburton?
As I said, the construction clause was "new." But this was simply a codification.
You might want to also add that the original proposal from the Milwaukee Patent Law Assn. did propose a flat out overruling of Halliburton. But that was not the language proposed. What was proposed was simply a clarification of what Halliburton/Faulkner had actually held.
And, 6, do you use the term “overclaim” in your office actions?
Night, “You are entitled to claim the full scope of what you have enabled.”
Ned :Obviously, you avoid the issue.
101 Integration Expert: How has Night Writer Patent Attorney avoided the issue exactly?
The issue is, you have invented on apparatus for converting analog to digital. Can you claim all apparatus that perform this function?
101 Integration Expert: That is obviously a question of scope that comports with Night Write Patent Attorneys answer above, Is it not?
On the other hand I find it a rather telling display of hypocrisy on your part to accuse someone of avoiding anything, the way you have avoided the issues of anon up thread.
And of course there is that little thing of “Integration” that keeps coming up, and is avoided by you.
As concerns Lemley, you only need be reminded of the old axiom: those who can Do, and those who can’t…teach. For the love of G*d I don’t know why anyone pays attention to a person who is not even a registered practitioner and – from all indications – never wrote a patent application in his life or helped prosecute a patent. And lets not get started on how a poly sci major with no technical education or experience seems to think he is qualified to opine on how computing systems work. His biggest achievement to date seems to be ….self-promotion.
“Processes do not require particular machines or structure.”
Mr. Heller:
May I ask, what authority to you rely on for the above statement?
While it may be true that a process does not require a particular machine, every course I ever took on cognitive psychology, neuroscience, systems analysis and complex information processing, all taught me that, “processes” require structure.
In fact processes not only require structure, processes are structure.
If it is written so as to comply with Section 112, my guess is that it would no longer be considered to be “abstract.”
It appears that my comment did not take.
Iin a nutshell, your pre-1952 cases were in fact NOT codified per your own beloved Frederico.
You, Ned, after all, are the one who supplied the very source of this information.
I really don’t understand how you can quote pre-1952 law and claim something completely at odds with what Frederico stated.
One major problem Ned: configuring does in fact and in law create a new machine.
Without fact and without law, all you have for your position is policy. Too bad your policy argument is nonexistent.
Well, Mr. Heller:
That will depend on the category one files under. A process is much broader than say a claim to a particular machine or apparatus. If your invention is limited to the converter box itself, then you may be limited in scope to the box in your drawings and the description of the specification. However, if your invention is the process of conversion from analog to digital you may indeed have a broad scope. And if you are the pioneer of converting analog to digital then you most certainly can foreclose others from the use of your analog to digital conversion process, without having to describe every single embodiment in your specification.
But still even a patent with the broad scope of a pioneering process, or just a process itself, will not prevent inventors from discovering faster, and more efficient ways of performing the process, and filing a patent on the improvement.