Patent Law Blog (Patently-O)

Federal Circuit Gives PTO Free Rein To Demand Information Beyond That Defined By Section 1.56 As Material to Patentability

Star Fruits S.N.C. and Institute of Experimental Botany v. United States and Department of Commerce (Fed. Cir. 2005)

By Alison Baldwin

What appears on its face to be a strictly procedural case actually raises a few interesting policy issues.

Procedurally, Star Fruits filed a U.S. Patent Application directed to a variety of peach tree.  In a subsequent office action, the examiner included a "Requirement For Information Under 37 C.F.R. 1.105" that included a request for "any information available regarding the sale or other public distribution of the claimed plant variety anywhere in the world" and "copies of the application, published proposed denomination and published Breeder's Right grant."  Star Fruits declined to provide the information requested under 37 C.F.R. 1.105 on the grounds that the material requested was "not material to patentability of the new variety."  Because Star Fruits did not comply with the Examiner's request, the Office issued a Notice of Abandonment.  Star Fruits petitioned the Director pursuant to 37 C.F.R. 1.181 and the petition was denied.  Subsequently, Star Fruits appealed to the district court under the Administrative Procedure Act.

In addressing 37 C.F.R. 1.105, the Federal Circuit has interpreted the rule to include "a zone of information beyond that defined by section 1.56 as material to patentability, and beyond that which is directly useful to support a rejection or conclusively decide the issue of patentability."  The court held that, so long as the request from the examiner for information is not "arbitrary or capricious," the applicant must comply with the request.

Furthermore, the Federal Circuit noted that if Star Fruits believed that the requested information was going to be used to support a wrongful rejection under 35 U.S.C. 102, it should have provided the information and then subsequently argued against the wrongful use.  The court held that Star Fruits had no right to object to the potential use of the information. 

Interestingly, in her dissenting opinion, Judge Newman argued that Star Fruits did exactly what it was supposed to do, when faced with an agency's change in law and practice.  Star Fruits was challenging the PTO's 2001 change in practice holding that a foreign sale or use of a plant that has foreign Breeder's Rights registration may bar United States patentability of that plant.  This information requested by the examiner was for support for a rejection based upon this policy change.  This internal change in practice is arguably an attempt by the PTO to broaden 35 U.S.C. 102 without the required notice-and-comment rulemaking procedures.  Judge Newman criticized the panel for ignoring the real issue of law underlying this dispute. 

NOTE: Alison Baldwin is a partner at McDonnell Boehnen Hulbert & Berghoff.  Her patent litigation experience has covered a diverse range of topics, from recombinant DNA technology to digital television. In addition to her law degree, Ms. Baldwin holds degrees in biochemistry and plant pathology and has conducted research on the molecular mechanisms involved in plant disease resistance. [Brief Biography].

Federal Circuit: Court Erred in Finding Case "Exceptional"

Spectrum Labs v. Tech International (Fed. Cir. December 29, 2004).

Spectrum sued Tech Int'l for infringement for its patent related to a method of removing unwanted substances from human urine samples.  The purification method allows urine to be tested without interference from the unwanted substances.  The Nevada District Court granted summary judgment of non-infringement to Tech and granted Tech's motion for attorney's fees -- noting that the suit was frivolous and in bad faith. 

Tech appealed the award of attorney's fees.

On appeal, the Federal Circuit reversed -- finding that the case was not "exceptional" under the statute (35 USC 285).

The CAFC listed types of cases that may create an "exceptional" circumstance: inequitable conduct before the PTO, litigation misconduct, vexatious and otherwise bad faith litigation, frivolous suit or willful infringement.  However, the Appeals Court found "none of those circumstances present" in this case.

A district court must provide reasoning for its determination that a case is exceptional for us to provide meaningful review. Further, an exceptional case finding is not to be based on speculation or conjecture but upon clear and convincing evidence.  The facts cited in the section 285 order do not provide clear and convincing evidence that Spectrum’s investigation and credit check constituted vexatious behavior. The section 285 order merely highlighted the fact that the credit check and background investigation occurred after issuance of the summary judgment order. Section 285 Order, slip op. at 3. The district court’s open speculation about the purpose of Spectrum’s investigations adds no support to its finding.

The Law: The determination whether to award attorney’s fees under section 285 involves a two-step process. First, the district court must determine whether Tech proved by clear and convincing evidence that this case is "exceptional." . . . Second, if the court finds the case to be exceptional, it must then determine whether an award of attorney’s fees is appropriate.

Comment: This case is really a commentary on claim construction jurisprudence.  In my view, the court could not call this an exceptional case because of the uncertainty associated with claim construction.

Anheuser-Busch loses patent infringement appeal: case remanded to district court

Anheuser-Busch v. Crown Cork & Seal (Fed. Cir. Dec. 23, 2004) (unpublished)

In an unpublished decision, the Court of Appeals for the Federal Circuit (CAFC) has revived Crown's case against Anheuser-Busch -- sending the patent dispute back to the Wisconsin district court to determine whether A-B's aluminum cans violate Crown's patent No. 6,065,634.

Specifically, the Appellate Court disagreed with the lower court's claim construction -- finding that the district court erred by importing a limitation into the claims that was not required by the specification. 

The patent does not indicate that the shape of the chuck wall is necessary to accomplish the [strength] goal.  THus, no basis exists for the court to import the "flat" limitation from the preferred embodiment into the claims.

The district court must now re-construe the claims and determine whether the new construction alters its prior conclusion that Anheuser-Busch did not infringe Crown's patent.

The CAFC also affirmed the dismissal of Anheuser-Busch's claim that Crown violated A-B's design patent No. D387,987.

The Scoop on Geico v. Google

Geico v. Google

(E.D. Va. Dec. 15 2004) (On Oral Arguments).

Summary:

Google's use of a trademarked term for advertising keywords does not create customer confusion -- and thus does not violate the Lanham Act.  However, the use of the trademarked term itself in sidebar ads does create customer confusion and may violate the Lanham Act.

More Details:

Geico has sued Google for trademark infringement.  Geico is upset that Google users may find a competitor's ads after searching for "Geico."  Essentially, the issue is whether the use of trademarks as keywords for paid advertising violates the Lanham Act.  A bench trial began last week in U.S. District Court in Alexandria Virginia.

As plaintiff, Geico first presented case-in-chief (excluding damages).  At the close of Geico's case, Google asked the court to grant judgment as a matter of law under Rule 52(c).

Federal Rules of Civil Procedure Rule 52(c) Judgment on Partial Findings. If during a trial without a jury a party has been fully heard on an issue and the court finds against the party on that issue, the court may enter judgment as a matter of law against that party with respect to a claim or defense that cannot under the controlling law be maintained or defeated without a favorable finding on that issue . . . Such a judgment shall be supported by findings of fact and conclusions of law.

In its oral decision on the motion, the court sided with Google in-part.  First, the court noted that Geico had not established that the "mere use of its trademark" as an advertising keyword violates the Lanham Act. 

Having heard the plaintiff's case, the Court is satisfied that the plaintiff has not established that the mere use of its trademark by Google as a search word or keyword or even using it in their AdWord program standing alone violates the Lanham Act because that activity in and of itself, there's no evidence that that activity standing alone causes confusion.

However, on the issue of whether Google's sponsored ads that actually use GEICO's name in the title or text of the ad, the court found that the plaintiff had presented sufficient evidence of confusion to allow the case to continue.

However, as to the narrow issue of whether the plaintiff has presented sufficient evidence at this point to let the case continue on the issue of whether Google is liable for violating the Lanham Act for those sponsored ads using GEICO's name in either the title or the text that appear next to a -- and a GEICO organic listing as a result of the AdWord program, at this point, there has been enough evidence of confusion as a result of Dr. Ford's report to deny the motion and to allow the case to continue so the Court can consider the defendant's evidence as to whether or not this situation creates a likelihood of confusion in the marketplace and, if so, what damages might be appropriate.

When presenting its case Google will continue to argue that it has a policy in place to prevent the use of the GEICO trademark in competitor's ads -- and that Google should not be held liable when those competitors violate the policy.

The case has been stayed until early January -- awaiting the judge's written decision.

Comment:

Is Google a stand-up company or what!  Most defendants who are being sued over their core technology would take any available legal self-help measures.  Is anyone surprised that a Google search for Geico still turns up Geico?  [Link]

Links:

• Transcript of the oral decision. [txt];
• Google's Memo in Support of their Motion [pdf];
• Geico's Answer [Unavailable -- filed under seal];
• Google's Reply [pdf];
• Who Represents Google & Geico.

Federal Circuit: Pieczenik v. Dyax

Pieczenik v. Dyax (Fed. Cir. December 16, 2004) (Unpublished Opinion).

George Pieczenik owns several patents relating to a method of inserting DNA sequences into DNA vectors.  (For Example, U.S. Patent No. 4,528,266-A).

In an infringement lawsuit against Dyax, the district court granted summary judgment in favor of Dyax -- ruling that Dyax did not infringe the asserted patents. 

After the close of the case, Pieczenik filed a motion for reconsideration under Rule 60(b).

Rule 60(b): "On motion and upon such terms as are just, the court may relieve a party or a party’s legal representative from a final judgment, order, or proceeding” under specified circumstances, including: “(2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b).”

Pieczenik alleged that he had uncovered new information that established the falsity of an affidavit of Dyax's Senior VP that had been submitted in support of its motion for summary judgment.  The district court denied the motion to reopen the case. 

On appeal, the Federal Circuit affirmed -- finding that (i) the evidence presented was not "newly-discovered" because it would have been available to Pieczenik if he had followed through with discovery; and (ii) Pieczenik did not show how the new evidence would alter the district court's claim construction.

Will the PTO soon be issuing Search Reports?

Back in the day, when you filed a patent application, you would send in a filing fee that covered filing expenses, searching, and examination -- all for one low price of around $700 (less for small entities).  In the recent rash of Fee Changes, the filing fee has been reduced to $300!  "Hold-on now," you're saying, "patent office (and attorney) fees are never reduced."  The trick is that the PTO added a search fee $500 and an examination fee $200.  Bringing the total due on filing to $1,000.

This break-down of the fees suggests that the PTO may also change its practice.

Is there some chance that the PTO will adapt to the PCT practice of providing a search report?  What a grand idea.

Iron Grip v. USA Sports: Three-Hole Weight Plate Obvious

Iron Grip Barbell v. USA Sports (Fed. Cir. 2004).

Iron Grip is the assignee to U.S. Patent No. 6,436,015, which covers a weight plate with a triad of dispersed grip locations.  USA makes allegedly infringing plates.  The district court granted USA's motion for summary judgment that the patent was obvious, finding that "it would have been obvious to a layman to combine the prior art."  On appeal, the Federal Circuit affirmed:

Because the claimed invention falls within a range disclosed in the prior art, and the patentee has not shown that the prior art taught away from the invention or new and unexpected results from a three elongated grip weight plate as compared to those in the prior art, we conclude that the claims are obvious absent substantial evidence of pertinent secondary factors supporting patentability.

Finding of obviousness affirmed

Barbell companies have been getting rejected at the trademark side of the PTO as well.  John Welch filled me in on the recent case of in re Ivanko Barbell Company (not precedent).

In Ivanko, the TTAB refused to register the weight plate design (shown above) for two reasons: (i) functionality and, in the alternative, (ii) failure to establish distinctiveness.  The applicant had essentially admitted functionality -- that is a bad move at the TTAB or when applying for a design patent.

As required by the statute, we must consider whether applicant’s design as a whole is functional. 15 U.S.C. § 1052(2)(5). Here, the evidence supports the examining attorney’s position that the design is de jure functional. Applicant touts the utilitarian advantages of safety and ease of handling of its design.

The Board noted that, because the designs are functional, any evidence of distinctiveness is moot.  However, for the sake of completeness, the board discussed the applicant's contention that its designs had acquired secondary meaning.  The applicant had presented survey information in an attempt to show secondary meaning associated with the 7-hole weight plate:

Applicant has the burden of proving that its mark has acquired distinctiveness. . . . Of the survey respondents who were familiar with the Ivanko barbell weigh weight [sic] plate in question with all indicia removed (Picture A-1), 58.65% associated the appearance of the barbell weight plate shown with Ivanko and an additional 8.65% associate it [with] one company.”

However, the majority of survey participants were upper level employees in the barbell business, and thus, the court could not tell whether potential consumers have assigned any secondary meaning to the designs.

BlackBerry Maker RIM wins Partial Victory in Patent Appeal

NTP v. Research in Motion (Fed. Cir. 2004).

In this highly anticipated patent case, the Federal Circuit has vacated the district court's judgment and injunction.

Accordingly, the judgment and the injunction are vacated, and the case is remanded to the district court for further proceedings consistent with this opinion. We affirm the district court’s judgment in all other respects. We thus affirm-in-part, vacate-in-part, and remand.

HOWEVER, RIM's win is marginal at best -- NTP remains in a strong position as the case returns to the district court.  The decision is remanded for the district court to determine what portion, if any, of the jury verdict should be set aside, based on the prejudicial effect of the court's misconstruction of a single claim term.

Specifically, the Appeals Court only questioned the infringement decision on five of NTP's patent claims.  Presumably, the verdict of infringement on the other eleven claims is upheld.

Background:

NTP's patents are directed toward an "electronic mail system with RF communications to mobile processors." (e.g., U.S. Patent No. 5,436,960). NTP sued RIM, maker of the BlackBerry for patent infringement.

The district court “construed the disputed terms according to their plain and ordinary meaning, as supported by the specification and prosecution history.”  Based on the claim construction, the district court granted summary judgment to NTP on several patent claims -- finding that the BlackBerry infringed some of the claims.  The remaining claims were decided by the jury.

On every issue presented, the jury found in favor of the plaintiff, NTP. The jury found direct, induced, and contributory infringement by RIM on all asserted claims of the patents-in-suit. The jury also found that the infringement was willful. It rejected every defense proposed by RIM. Adopting a reasonable royalty rate of 5.7%, the jury awarded damages to NTP in the amount of approximately $23 million.

The court awarded monetary damages totalling more than $53 million, with the following approximate division: (1) compensatory damages of $33 million; (2) attorneys’ fees of $4 million; (3) pre-judgment interest of $2 million; and (4) enhanced damages of $14 million. The court also entered a permanent injunction against RIM, enjoining it from further manufacture, use, importation, and/or sale of all accused BlackBerry systems, software, and handhelds.

Claim Construction:

The Court of Appeals for the Federal Circuit reviewed the claims construction de novo, taking an ordinary meaning approach: "In the absence of an express intent to impart a novel meaning to the claim terms, the words take on the full breadth of the ordinary and customary meanings attributed to them by those of ordinary skill in the art," using the written description as examined through the viewing glass of a person skilled in the art to give context to the claim language.

The CAFC agreed with the RIM on only one point:

that the district court misconstrued the term "originating processor."  The Appeals Court found that the originating processor as claimed by NTP refers to only one processor - and not three separate processors.

On all other points, the CAFC affirmed the district court ruling, these include (i) construction of all other terms; (ii) a decision that RIM's Canadian server location does not prevent application of U.S. Patent Laws to the e-mail system; (iii) Denial of RIM's motion for JMOL; and (iv) exclusion of RIM's expert and demonstrative testimony.

Conclusion:

RIMM won the appeal on a sliver of an argument, but is still in a position to lose the case.

AFFIRMED-IN-PART, VACATED-IN-PART, AND REMANDED

by Dennis Crouch

Links:

• Federal Circuit's Decision [pdf];
• cNet Article;
• How Appealing;
• RIM Trading Halted.

Notes:

• The decision was a rare unanimous claim construction decision written by Judge LINN and signed by MICHEL & SCHALL.
• The opinion is 60 pages in length [pdf].
• Comment from a Reader

The CAFC reversal of the claim construction of the District Court does not affect all of the asserted and infringed claims. According to the opinion 'some' of the claims are definitely infringed on. However, it was remanded because the jury did not outline how much royalties apply to each infringed claim. The CAFC only reversed the claim construction of "originating processor" found in some claims and not of the comparable "originating device" found in the other claims. The District Court had construed these terms them separately and RIM only appealed "originating processor" and not "originating device". So I guess it can be said the NTP won a "Judgement-in-Part."

• You should also note that the re-examination of NTP's patents continues at the USPTO.
• If the BlackBerry's infringe, why did the the Appeals Court reinstate the injunction against RIM?

A Tom Kirby, a Patently-O Reader, answers my question:

Vacating an judgment often does not imply disapproval, but merely clears the deck for further action by a lower court.  The U.S. Supreme Court has an established practice known as GVR.  When it decides a case there may be several other arguably similar cases in the pipeline from the Court of Appeals.  The Supreme Court will (i) Grant review of the case, (ii) Vacate the decision below, and (iii) Remand for reconsideration in light of the recent decision.  Very often the Courts of Appeals conclude that little or nothing needs to be changed and simply reinstate their previous ruling.

Foreign Infringement:

Today, this case is important because of the millions of BlackBerry users in the U.S.  However, the doctrinal significance of this case will be the Federal Circuit's stance on the inclusion of foreign components in the infringement analysis. 

Under the Patent Act [35 U.S.C. 271(a)], patent rights are limited by the territory of the United States.  However, in this case, the court found that plain language of section 271(a) does not preclude infringement where a system such as RIM’s, alleged to infringe a system or method claim, is used within the United States even though a component of that system is physically located outside the United States."

According to the Court, the test is not whether the infringement took place within the United States, but whether "control and beneficial use" of the infringing system was within the United States.

This liberal interpretation of the territoriality restrictions of the Patent Act bodes well for Eolas in the recently heard Microsoft v. Eolas appeal.

Federal Circuit Court of Appeals Gives Broad Construction to Means Claim

Versa v. Ag-Bag (Fed. Cir. 2004).

Versa owns a patent on an apparatus for creating air channels in bagged compost materials. The air channels allow for decomposition of the material.

Versa filed suit against Ag-Bag for patent infringement.  However, in the wake of an adverse Markman hearing, Versa admitted that it could not prove infringement based on the district court's claim construction. After filing the appeals, the parties entered into a settlement agreement that resolved all issues on appeal other than the proper construction of the “means . . . for creating air channels” limitation. The parties have also agreed that, if we conclude the flutes are required, Ag-Bag will pay Versa an agreed royalty. Thus, the sole question before us is whether under a proper claim construction the claimed bagging machines must include flutes.

The Federal Circuit found that the means-plus-function claim language did not require flutes.

Accordingly, since we hold that flutes are not required structure, the judgment of non-infringement based on the district court’s incorrect claim construction is REVERSED.

In Dissent, Newman:

This case does not present a new question, and it should not have a new answer. The question is, can a patent claim clause written in means-plus-function form be construed, as a matter of law, literally to cover a device that is not the invention described in the specification, that is not shown in any of the drawings, that was not examined for patentability, that was excluded by prosecution arguments, and that is not an asserted equivalent. Statute and precedent require that the question be answered in the negative. Until today.

Eolas v. Microsoft: On the briefs

Eolas v. Microsoft (04-1234)(On appeal at the Federal Circuit)

The parties in this case include Eolas and the University of California as plaintiffs and Microsoft as the defendant. In addition to the parties, a number of amicus briefs were filed at the Federal Circuit by interested parties.  These parties include: AOL; Association for Competitive Technology; Autodesk; Bentley Systems; Intel; Macromedia; Netscape; Oracle; Professor Joe Miller; Sun Microsystems; and Wacom Technology.

Amicus Briefs:

All of the Amicus briefs support Microsoft's position -- looks like nobody supports the little guy anymore.

• Association for Competitive Technology amicus brief [PDF]. ACT argues that the District Court made a major mistake by failing to undertake "reasonable efforts to find out" what was known or obvious to those skilled in the art at the time of the patent application.
• Autodesk, Bentley, Macromedia, WACOM, Professor Miller amicus brief [PDF].  This group argues that section 271(f) was incorrectly expanded by the district court.
• Netscape, AOL, Intel, Sun Microsystems amicus brief [PDF].  Netscape & friends argue that the Court should find "that section 271(f) does not apply to components manufactured outside of the U.S., even if they are manufactured using code, prototypes, molds, or templates designed and developed domestically."

Party Briefs:

• Microsoft opening brief [PDF].
• EOLAS answer [PDF].
• Microsoft reply [PDF].

Thanks to Gerry Stegmaier (ACT's attorney of record) and John Vandenberg (attorney of record for Autodesk, et al.) for providing copies of the briefs.

Robins Kaplan represents Eolas -- they have a unique trial preparation technique: Hung Jury.

Supreme Court Closer to Reviewing Hatch-Waxman Safe Harbor Patent Case

Merck v. Integra LifeSciences (On petition for writ of cert. at the Supreme Court).

The Drug Price Competition and Patent Term Extension Act (Hatch-Waxman) created a safe harbor that permits drug manufacturers to perform the experiments needed to obtain FDA approval of their drugs without incurring liability for patent infringement, even if their activities infringe others patent rights.

However, the statute, codified at 35 USC § 271(e)(1), was limited by a 2003 decision by the Court of Appeals for the Federal Circuit.  The Federal Circuit affirmed a lower court's finding that the safe harbor against patent infringement does not apply to pre-clinical activities to identify and develop new drugs that will eventually be subject to FDA approval -- and thus, that Merck was liable to Integra for patent infringement.

The Case: Integra alleged that Merck and Scripps infringed patents owned by Integra relating to peptides involved in interactions between cell surfaces and the extracellular matrix.  Under contract from Merck, Scripps identified several potential anti-tumor peptide candidates and selected the most promising peptide by conducting in vivo and in vitro experiments to evaluate the specificity, efficacy, and toxicity of the peptide candidates for various diseases. Scripps also performed tests to assess the histopathology, toxicology, circulation, diffusion, plasma half-life, and proper mode of administering of the peptides candidates.

The Appeals Court held that these activities did not fall under the safe harbor (§ 271(e)(1)) because they were not done "solely for purposes reasonably related to the development and submission of information" to the FDA.

"the focus of the entire exemption is the provision of information to the FDA . . . [a]ctivities that do not directly produce information for the FDA are already straining the relationship to the central purpose of the safe harbor." (CAFC Opinion).

"Expansion of § 271(e)(1) to include the Scripps-Merck activities would effectively vitiate the exclusive rights of patentees owning biotechnology tool patents."

Supreme Court:

Merck has now appealed the case to the Supreme Court of the United States, petitioning the High Court to hear the question:

Under 35 U.S.C. 271(e)(1), it is generally not an act of infringement to use a patented invention “solely for uses reasonably related to the development and submission of information under a Federal law” regulating the manufacture, use, or sale of drugs. The question presented is whether the court of appeals erred in limiting that exemption to clinical studies designed to provide information for Food and Drug Administration approval of a new drug.

Only a small percentage of cases appealed to the Supreme Court are accepted for hearing.  However, the Merck case took a major step closer to being heard last week.  On request from the Court, the Solicitor General of the U.S. submitted the Government's view that the case should be heard.  The Government brief makes two major points, one legal and the other social:

Gov't Brief: The decision of the court of appeals reflects an incorrect view of the law, and is likely to restrict significantly the development of new drugs. Fairly read, the decision below holds that “pre-clinical” research regarding a potential new drug is not protected by the FDA exemption because that exemption is limited to “clinical” research necessary to obtain ultimate FDA approval of a new drug. That holding is inconsistent with the text of the FDA exemption, reflects a mistaken and unduly narrow view of the types of information relevant to the FDA’s two-step process for evaluating potential new drugs, and is in tension with this Court’s decision in Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661 (1990). Moreover, the court of appeals’ decision poses a direct and substantial threat to new drug research by dramatically narrowing the scope of protections enacted by Congress in Section 271(e)(1). Although this case is not an ideal vehicle for considering the issue, see p. 18, infra, the potential impact of the court of appeals’ legal conclusion is sufficiently important that the petition for a writ of certiorari should be granted.

The Court is expected to decide whether to hear the case within the next two months. Wyeth, the AARP, and Eli Lilly are each expected to file Amicus Briefs in support of the petition to rehear the case.

Judge Richard Posner (In Lessig Blog) has advocated the creation of a fair-use exception for patents on research tools:

Link: For example, a generic drug manufacturer is permitted to use the patented drug to demonstrate that its generic equivalent is indeed therapeutically equivalent (the "testing" exception created by the Hatch-Waxman Act). More broadly, an inventor can use the information in the patent to try to invent around the patent. And Landes and I advocate an expansion of the patent fair-use principle to allow scientists to use patented research tools (such as the oncomouse) without license--provided the scientists aren't allowed to use the tools to produce their own patented products!

In response, Lichtman has noted that Judge Posner's proposal "is problematic for the simple reason that, often, the key market for research tools is to sell those tools to other researchers. If a researcher's use of patented research tool is fair use, that would significantly degrade the incentive to create those research tools inthe first place. Moreover, even if your approach works, it is in sharp conflict with the Bayh-Dole instinct that society might very well be better off in a world where academic researchers patent their work. As you know, that legislation was passed in response to evidence that university breakthroughts were sitting on the shelves both because (a) they could not be owned exclusively under old NIH rules; and (b) universities had too little incentive to bring their work to the attention of industry."

Owners of Duragesic (R) win patent appeal

Alza v. Mylan Labs., (Fed. Cir. 2004) (04-1344).

Alza sued Mylan for infringement of its patents relating to administration of fentanyl through the skin.  Because fentanyl, a narcotic, is prone to abuse, the inventors developed a patch that minimized the amount of drug that would be used in the system.  The patch is sold by Janssen as Duragesic (R).

Alza won at the district court level.  On appeal, Mylan argued that (i) the claims were not correctly construed and (ii) one of the patents was unenforceable due to inequitable conduct.

Claim construction: The appeals court looked only to the specification and prosecution history to determine that "fentanyl citrate" was not a "skin permeable form" of fentanyl -- thus avoiding prior art.

In determining the meaning of a disputed claim term, a court looks first to the intrinsic evidence of record, examining, in order, the claim language itself, the specification, and the prosecution history.

Inequitable Conduct: The district court found that a statement made by the applicants during prosecution was literally true, but "had the potential to mislead the examiner."  However, on the question of intent, the district court could not find the requisite deceitful intent associated with inequitable conduct. 

The Federal Circuit affirmed: "We discern no clear error or abuse of discretion."

Dissent (in part) by Dyk: Judge Dyk would have found inequitable conduct.

Here, the patentee made an untrue assertion and simultaneously submitted accurate facts not in accord with that assertion.  Such a submission of accurate facts does not cure a false statement.

NOTE: The patent expires January 23, 2005 -- Mylan must wait until then to begin selling a generic version of the patch.

Federal Circuit Rejects Professor's Attempt to Patent Cold Fusion Technique

In re Dash and Keefe (Fed. Cir. 2004) (Unpublished).

In 1990 professor John Dash filed a patent application for producing heat energy using nuclear fusion at a low temperature.  Experimental results suggesting that nuclear fusion occurred in their apparatus were submitted to the Patent Office in support of Dash's attempts to overcome utility rejections mounted by the PTO. 

Dash appealed the Board's rejection of his application for lack of enablement and utility.

On appeal, the CAFC relied on the "scientific community's considerable doubt" regarding the utility of "cold fusion" in sustaining a prima facie case for lack of utility and enablement -- even though the articles relied upon by the PTO were anectodal and not peer-reviewed.

We are aware of no rule that forbids the examiner from relying on related technology, anecdotal information or sources that are not peer-reviewed to establish a case of inoperability. . . .

The Examiner must only establish that a person of ordinary skill in the art would reasonably doubt the asserted utility.

The court then rejected Dash's Rebuttal Evidence:

For each type of evidence Dash produced, the examiner found at least one sound reason to disbelieve the evidence.

Rejection Affirmed.

Comment: (i) All this comes in the wake of the DOE's report that they are accepting quality research proposals on cold fusion. (ii) If this were a published opinion, it would be quite a precedent -- giving some real teeth to the utility requirement. 

Here is the conflict: Applicants use statements from experts saying "a certain result cannot be accomplished" to prove that the result is nonobvious.  Now, the court brings a double-edged sword -- finding that those statements can now be used to show a lack of utility.

Eolas v. Microsoft On Appeal

Eolas v. Microsoft (04-1234)(On appeal at the Federal Circuit)

At the district court level, Eolas won a $500 million+ verdict for Microsoft's alleged patent infringement.  The technology at issue involves a method of using a web browser to open third-party applications using plug-ins.  Now, the case is on appeal at the Federal Circuit, with oral arguments being held today, December 9, 2004. Microsoft is expected to argue both improper claim construction and error in including Microsoft's foreign sales in damage calculations.

The foreign sales portion of the case falls under 35 U.S.C. 271(f).  271(f)(1) provides for liability for causing components of a patented invention to be supplied for assembly abroad.  In Eolas, however, no physical component of the patented invention had shipped from the U.S.  However, the District Court ruled that Microsoft's shipment of information on a "golden master" disk created a sufficient nexus with the U.S. 

The foreign damages are expected to be overturned by the Federal Circuit appeals court based on its holding in the recent case of Pellegrini v. Analog.  In Pellegrini, the Federal Circuit essentially held that there is no liability for patent infringement unless components of a patented invention are physically shipped from the United States.  Two weeks ago, the Supreme Court denied Pellegrini's petition for writ of certiorari.

The asserted patents are also undergoing a reexamination at the United States Patent Office.

Parties Involved:

The asserted patents are owned by the University of California but exclusively licensed to Eolas.  The two reportedly have an agreement that Eolas will pay the University 25% off the top of any award.  Microsoft is the defendant.  In addition to the parties, a number of amicus briefs were filed by interested parties.  These parties include: AOL; Association for Competitive Technology; Autodesk; Bentley Systems; Intel; Macromedia; Netscape; Oracle; Professor Joe Miller; Sun Microsystems; and Wacom Technology. 

Comment:

Although I have not reviewed these amicus briefs, I expect that they generally support Microsoft's contention that the Eolas patents are invalid and that the reach of the patents should not extend beyond the borders of the U.S.  Paul Festa at cNet has written a brief article on the appeal.

Supreme Court Upholds Fair Use Defense in Trademark Case: Finds that some consumer confusion is compatible with fair use

KP Permanent Make-Up v. Lasting Impressions I, 543 U.S. ___ (2004).

FACTS: Both KP Permanent Make-Up and Lasting use the term “micro color” in marketing permanent cosmetic makeup.  KP has used a single-word version of the term since 1990 or 1991.  In 1992, Lasting registered a trademark that included the words “Micro Colors” under 15 U. S. C. §1051, and, in 1999, the registration became incontestable, §1065. When Lasting demanded that KP stop using the word “microcolor,” KP sued for declaratory relief, asserting the statutory affirmative defense of fair use, §1115(b)(4). The Ninth Circuit ruled consumer confusion is an element of fair use and appeared to place the burden of proof (to show an absence of confusion) on KP.

ISSUE: Does a party raising the defense of fair use to a claim of trademark infringement have a burden to negate any likelihood that the practice complained of will confuse customers about the origin of goods or services affected?

HOLDING: (Souter) A party raising the statutory affirmative defense of fair use to a claim of trademark infringement does not have a burden to negate any likelihood that the practice complained of will confuse consumers about the origin of the goods or services affected.

(a) Even if a mark is incontestable (under §1115(b)), a trademark holder has the burden of showing that the defendant’s actual practice is “likely to cause confusion, or to cause mistake, or to deceive” consumers about the origin of the goods or services in question, see, e.g., Two Pesos, Inc. v. Taco Cabana, Inc., 505 U. S. 763, 780.  While cases such as Baglin v. Cusenier Co., 221 U. S. 580, are consistent with taking account of the likelihood of consumer confusion as one consideration in deciding whether a use is fair, they cannot be read to make an assessment of confusion alone dispositive or provide that the defense has a burden to negate it entirely.

(b) Since the burden of proving likelihood of confusion rests with the plaintiff, and the fair use defendant has no free-standing need to show confusion unlikely, the Court recognizes (contrary to the Ninth Circuit’s view) that some possibility of consumer confusion is compatible with fair use. . . . The Court does not rule out the pertinence of the degree of consumer confusion under the fair use defense.

(c) VACATED and REMANDED.

Supreme Court Opinion
9th Circuit Opinion

 

Conclusory Statements by Patent Examiner are Inadequate to Support Motivation to Combine References

In re Bruce Beasley (Fed. Cir. December 7, 2004) (04-1225 Unpublished Opinion).

In 1991, Beasley filed a patent application directed to the generation of images on a video screen using a light pen that operates by mapping the screen into a memory on a point-by-point basis. 

The patent appeals board (BPAI) found that the invention was obvious based on prior art patents cited by the patent examiner during prosecution.  Beasley then appealed to the Court of Appeals for the Federal Circuit (CAFC).

On appeal, Beasley argued that the examiner never established a prima facie case of obviousness.  Specifically, Beasley urged reversal because there was no motivation or suggestion to combine the references cited by the Examiner and BPAI.

The Court agreed with Beasley and reversed the BPAI's rejection -- finding that:

The record reflects that the examiner and the Board have managed to find motivation for substituting one type of memory for another without providing a citation of any relevant, identifiable source of information justifying such substitution. The statements made by the Examiner, upon which the Board relied, amount to no more than conclusory statements of generalized advantages and convenient assumptions about skilled artisans. At least under the MPEP then in effect, such [conclusory] statements and assumptions are inadequate to support a finding of motivation, which is a factual question that cannot be resolved on subjective belief and unknown authority.

Vacated and Remanded.

In Dissent, Judge Dyk would have affirmed the obviousness rejection.

I see no error in the Board’s reliance on the PTO’s own specialized knowledge [for a motivation to combine]. The effect is merely to create a prima facie case, and to shift the burden to the patent applicant. Here the applicant did not refute the factual findings of the Board and the patent examiner, but merely offered lawyer argument to contradict the Board’s findings. Under these circumstances the application was properly rejected.

With this said, I agree that the MPEP provision in effect at the time is not a model of clarity and can be read as recognizing only a very limited scope for the use of the PTO’s expertise. MPEP § 2144.03 (7th ed. 1998). However, the current version appears to allow greater latitude. MPEP § 2144.03 (8th ed., rev. 2, 2004). In future cases, where the PTO has provided us with an interpretation of the new MPEP provisions, we will need to address the extent to which the new version of the MPEP gives the PTO greater scope to rely on its own expert knowledge.

 

Amazon wins patent suit . . . for now: Pinpoint's case dismissed without prejudice

Pinpoint v. Amazon (N.D. Ill. December 6, 2004) (No. 03 C 4954, Richard A. Posner, sitting by designation).

After an evidentiary hearing on the eve of trial, Judge Posner has determined that Pinpoint was not the owner of the asserted patents at the time the complaint was filed -- and thus, that Pinpoint does not have standing to sue.

The case was dismissed without prejudice.  After ensuring that the patents are properly assigned, Pinpoint may re-file the suit.

Read the opinion here: Download Pinpoint.pdf.
Read more about the lawsuit here, here, and here. 

CAFC: Expert Testimony Essential for Finding of Infringement

Centricut v. ESAB (Fed. Cir. 2004) (03-1574).

At the district court, Esab Group won a multi-million dollar judgment against Centricut for infringement of Esab's patent relating to plasma welding products.  Centricut appealed the judgment and the measurement of damages.  Esab cross-appealed, asking for a modification of the judgment on damages.

On appeal, Centricut argued that ESAB had not satisfied its burden of proof on infringement because it failed to present expert testimony comparing the claims as construed with the accused device.  The Appeals Court agreed that expert testimony was essential in this case:

[E]ach of Esab’s three theories [of infringement] suffers from the same deficiency: none is supported by expert testimony. The first theory, adopted by the district court, rests on the district court’s own interpretation of the evidence. The latter two theories rest on the testimony of witnesses who were admittedly not experts on [the specific technology].

... This case stands as an apt example of what may befall a patent law plaintiff who presents complex subject matter without inputs from experts qualified on the relevant points in issue when the accused infringer has negated infringement with its own expert.

Infringement Reversed

The Court went on to say that experts are not necessary for cases where the technology is "easily understandable." And, that there is no "per se rule that expert testimony is required to prove infringement when the art is complex."  However, "where the accused infringer offers expert testimony negating infringement, the patentee cannot satisfy its burden of proof by relying only on testimony from those who are admittedly not expert in the field." 

35 U.S.C. 103(a): Disclosure of alternative embodiments does not constitute teaching away.

In a case involving the design of shoe tred, the Federal Circuit provided further insight into the motivation to combine references under 103(a).

In re Fulton (Fed. Cir. 2004) (04-1267).

After receiving an obviousness rejection at the Board of Patent Appeals and Interferences (BPAI), inventors Fulton and Huang appealed to the Federal Circuit.  Their utility patent application is directed to a shoe sole with increased traction.  The BPAI found that the prior art as a whole suggested a combination of the orientation of hexagonal surfaces found in the application. 

Motivation to Combine Need Not Come from Preferred Alternatives: On appeal, the inventors argued that there was no motivation to combine because the characteristics disclosed in the references were not the preferred alternative.  The CAFC rejected this argument -- finding that "our case law does not require that a particular combination must be the preferred or the most desirable, combination described in the prior art in order to provide motivation for the current invention."  The appeals court went on to clarify that the "prior art's mere disclosure of more than one alternative does not constitute a teaching away from any of these alternatives" unless the disclosure criticizes, discredits, or otherwise discourages the solution.

Rejection for obviousness affirmed.

Carlos Gutierrez nominated as Secretary of Commerce

Kellogg Executive Carlos Gutierrez has been nominated by President Bush to replace Don Evans as Secretary of Commerce.  The Commerce Department manages the Patent & Trademark Office as well as other utilitarian functions of the government such as the census, weather forecasting, and standard setting.

Gutierrez fled Castro's Cuba in the 1960's and worked his way up the corporate ladder -- eventually taking the helm at Kellogg in 1999.  He is credited with revitalising the company that had been knocked from its perch at the top of the cereals business.

Bush called Gutierrez a "great American success story" and a visionary executive, who understands the world of business from the "first rung on the ladder to the very top."

Kellogg is no stranger to the PTO, more than sixty years ago Kellogg brought a case to the Supreme Court over whether the pillow shape of Nabisco's shredded wheat was trademarked.  In Kellogg v. National Biscuit, the Court ruled that a "product shape that is the subject of a [utility] patent goes into the 'public domain' when the patent expires." 306 U.S. 111 (1938).

Marking Estoppel: CAFC Vacates but Leaves Possibility

Slip Track Systems v. Metal Lite (Fed. Cir. December 1, 2004) (unpublished) ("Slip Track III").

In a long-running dispute involving patents directed to earthquake resistant wallboard structures that permit a wallboard to slide vertically with respect to the supporting wall studs, the Federal Circuit vacated the district court's infringement holding.

The district court barred Defendant Metal Lite from contesting infringement for three reasons. 1) Because of a prior partnership with Slip Track, Metal Lite had marked its product with the asserted patent number -- thus creating a marking estoppel. 2) In an earlier decision, ("Slip Track II"), the CAFC had found the asserted patent to cover identical subject matter as another product that Metal Lite admittedly infringed -- thus, Metal Lite must also infringe the asserted patent. And 3) Metal Lite's tardy presentation of non-infringement arguments were contrary to Fed. R. Civ. Pro. R. 26 of "fully airing each parties' theories of the case well in advance of trial."

On appeal, the CAFC vacated-in-part:

Marking Estoppel: While deliberate mismarking of a product may provide grounds for applying estoppel, there is no evidence in this case that Metal Lite believed its product to fall outside the scope of the patent's claims when it made the decision to mark its product.  Thus, marking estoppel does not apply in this case. 

NOTE: The Court explicitly refused to endorse the doctrine of marking estoppel -- "We find it unnecessary to address this issue because, even assuming the doctrine remains viable, it does not apply to the facts of this case."

Identical Scope of Second Patent: Patent infringement analysis requires the court to compare construed claims to the accused product. In bypassing this step, the district court failed to consider that Metal Lite's products do not necessarily infringe the patent.

Metal Lite's Litigation Conduct: In its answer, Metal Lite denied infringement -- and thus, was not tardy.

Accordingly, we hold that the district court abused its discretion in granting Slip Track's motion in limine barring Metal Lite from contesting infringement.

In Dissent: Judge Newman could "not discern reversible error."

Mobile Phone Manufacturers Win Design Patent Suits

Earlier this month, the Federal Circuit ruled that Tony Colida's patented cell phone design was not infringed by Matsushita's GU87 phone.  (link).  Now, Colida's parallel suit against Kyocera Wireless and Sanyo have been struck down. 

Colida v. Sanyo (Fed. Cir. December 2, 2004) (unpublished)

A design patent is for the visual appearance of a useful article. Durling v. Spectrum Furniture Co., 101 F.3d 100, 104-05 (Fed. Cir. 1996). To infringe a design patent, the accused device must have substantially the same appearance as the patented device, and contain the points of novelty as compared with the prior art, such that the ordinary observer would believe that they are the same product.

We agree with the district court that there is no view of the facts whereby a reasonable trier of fact could find infringement, and that summary judgment of non-infringement was properly entered.

Judgment of non-infringement affirmed.

============================================

 

Kyocera v. President Electronics and Tony Colida (Fed. Cir. November 30, 2004) (unpublished).

Mr. Colida [] argues that the Kyocera 2200 phones are substantially similar to the design in the '184 patent. The district court pointed to significant differences in the Kyocera 2200 phones, in that they do not have as pronounced a curvature, have additional buttons taller screens, and different arrays of holes in the earpiece.

[T]he district court's summary judgment of non-infringement has not been shown to be incorrect. Error has not been shown as to the district court's analysis. The district court's identification of the many differences in the features of the designs has not been disputed.

The judgment of non-infringement is affirmed.

============================================

Colida v. Matsushita (Fed. Cir. 2004) (unpublished opinion).

Facts: Tony Colida owns design patents covering the design of mobile phones designated A.  Matsushita owns a patent on the design for mobile phone B.  In addition Matsushita makes a GU87 phone that matches up with its patented design.  After comparing the phone with the figures from Colida's patents, the district court dismissed Colida's infringement suit - finding that there was no infringement as a matter of law.

Appeal: Reviewing the summary judgment de novo, the appellate panel affirmed, finding no error in the district court's conclusion that "no reasonable trier of fact could find infringement of the [patents] by the GU87 phone in this case."

Summary Judgment of Noninfringement Affirmed.

Federal Circuit: Claims Should Be Interpreted for Internal Consistency and Operablility

Frank's Casing Crew v. Weatherford Intl. (Fed. Cir. 2004).

Frank's Casing owns a patent on a device for remotely controlling an oil-well casing.  (U.S. Patent No. 5,049,020). Because sections of casing can be up to 36 inches in diameter and weigh 300 pounds per foot, manual alignment is difficult and poses a significant risk of injury.  Frank's Casing brought suit against Weatherford, charging patent infringement.

The district court (W.D. Oklahoma) granted summary judgment of noninfringement after interpreting the means-plus-function claim language of Frank's patent. 

On appeal, Frank's Casing argued that the district court improperly imported structure into the term "means for selectively pivoting" that was unnecessary to perform the function of pivoting a boom about a horizontal axis. 

The Federal Circuit affirmed, finding that the district court's interpretation is necessary and "to conclude otherwise would render the patent internally inconsistent and the invention inoperable."

Noninfringement Affirmed.

Judge Posner to hear Amazon Patent Case

Pinpoint v. Amazon. (N.D. Ill. Aug 31, 2004) (Posner, J.).

Pinpoint has sued Amazon for infringement of its patented system for scheduling broadcast and providing access to video programs. (E.g., U.S. Patent No. 5,758,257). Pinpoint claims that Amazon's website infringes by providing personalized book and music video suggestions. 

In its most recent press release, Pinpoint announced that Judge Richard A. Posner of the 7th Circuit, U.S. Court of Appeals will be sitting by designation as the district judge presiding over the jury trial.  According to Judge Posner's order in the case, the jury trial will begin at 9:00 am on December 6.

Always Controversial

Judge Posner has a reputation for thinking outside the box.  In his last patent case, Posner created a new equitable defense to infringement that would bar enforcement of a patent when the patentee’s own conduct significantly inhibits non-infringing practice of the prior art.  That case, SKB v. Apotex [I, II, III, IV], involving hemihydrates, was affirmed by the Federal Circuit but is currently being considered for an en banc rehearing. 

It is speculated that the Apotex case has sparked some contention within the halls of the CAFC.  This speculation stems from the fact that the en banc petition has been sitting undecided for over six months.

Now a Blogger

After a stint as a guest blogger at Professor Larry Lessig's blog, Judge Posner has started a blog in cooperation with Nobel Winner Gary Becker.  The Becker-Posner blog is not fully functional yet, but keep your eyes peeled.

Links:
My Prior Post on Pinpoint v. Amazon
More Info on the Pinpoint v. Amazon

Coolsavings wins patent appeal

Catalina Marketing v. Coolsavings (Fed. Cir. 2004) (03-1548) (unpublished).

Catalina owns a patent on a method for distributing electronic coupons. Coolsavings runs a website that uses user demographics to target coupon offers. Catalina sued Coolsavings for Infringement. Catalina appeals the district court's claim construction and subsequent dismissal for noninfringement.

On appeal, the Federal Circuit affirmed the district court's opinion, finding that the District Court had properly construed means-plus-function language by importing limitations from the specification.

Dismissal of Catalina's Infringement suit Affirmed.

McFarling v. Monsanto: On Petition for Writ of Certiorari

McFarling v. Monsanto (Supreme Court Docket No. 04-31).

After being shut-out at the district and appeals courts, Mississippi Delta Farmer Homan McFarling has petitioned the Supreme Court of the United States for a writ of certiorari -- asking the high court to hear his case.

Roundup-Ready (R) soybeans have become extremely popular in the the U.S.  The genetic modification added by Monsanto allows soybean plants to resist the broad-leaf herbicide.  Monsanto's patents on the genetically modified seed is even more important now because Roundup has gone off-patent. 

When a farmer purchases seeds from Monsanto, the company requires that the farmer agree not to retain any seeds from the resulting crop for replanting.  These second generation seeds are genetically identical to the ones originally purchased -- and thus, fall under the scope of the patents.  Monsanto brought suit against McFarling after the farmer violated his agreement and saved second generation soybean seeds to replant his 5,000 acre farm.

McFarling now questions whether Monsanto has any right to control the trade of the second generation seeds -- Is Monsanto's limitations on use of the second generation seeds an unlawful restraint of trade?

In my quick review of the briefs for and against certiorari, it appears that Monsanto's attorneys have put their best foot forward by showing that there are no true circuit splits, a key feature in the Supreme Court's decision whether to accept a case on appeal.  All the same, McFarling's case has a certain flair that may push the court to accept the case.

Links:

• McFarling Petition [PDF]
• Monsanto Opposition [PDF]
• Questions on Appeal
• Federal Circuit Case
• Monsanto v. Ralph

Supreme Court Requests Bush Administration's View on Seed Patent Controversy

McFarling v. Monsanto (Supreme Court Docket No. 04-31).

Homan McFarling was sued by Monsanto for saving seeds and replanting them.  The seeds had been genetically modified by Monsanto to resist Roundup (R) herbicide and were patented. (U.S. Patents 5,633,435 and 5,352,605). 

At the Federal Circuit, McFarling argued that the Sales Agreement from Monsanto involved an unlawful misuse of Monsanto’s patents by restricting use of “god-made” second-generation seeds. The Appellate Court disagreed. Because the first-generation seeds (sold by Monsanto) were nearly identical copies to the second-generation seeds, the Court found that the patent scope includes both generations. Thus, the Court rejected McFarling's appeal and held that the Sales Agreement did not impermissibly extend Monsanto's rights.

Now, McFarling has taken the suit to the Supreme Court.  In case No. 04-31, McFarling is asking the Court to to overturn the Federal Circuit's ruling and presents two questions:

1. May a patent holder lawfully prohibit farmers from saving and replanting seed as a condition of the purchase of patented technology?

2. Does obtaining patents on products which are the subject of licensing agreements afford an absolute defense to any claim that the licensing agreements violate the Sherman Act?

The Supreme Court has asked the Solicitor General to brief in this case expressing the views of the United States.  It is expected that the Bush Administration, through the Solicitor General, will support Monsanto's position. 

Military Contractor Forfeits Patent Rights: Company Failed to Properly Disclose Invention

Campbell Plastics v. Les Brownlee, Secretary of the Army (Fed. Cir. November 10, 2004) (03-1512). 

The Case:

In 1992, Campbell Plastics (as it is now known) entered into a cost-plus-fixed-fee contract with the Army to develop components of an aircrew protective mask. Section I of the contract required Campbell to disclose any invention developed pursuant to the government contract and further provided that the government could obtain title if Campbell failed to disclose the invention within two months.

Campbell invented a new type of gas mask, but the company did not disclose the invention to the Government. Campbell then obtained a patent on the invention, noting that the Government has a "paid-up license in this invention." 

The government, however, wanted more than just a license.  In a decision by the Armed Services Board of Contract Appeals, ruled that Campbell had forfeited title to the patent by failing to comply with disclosure requirements of the contract.

The Appeal:

The Federal Circuit Court of Appeals, interpreting both the Bayh-Dole Act and the contract, sided with the Army.

Campbell Plastics failed to comply with the disclosure provisions of the parties' contract. The contract unambiguously provides that in such a case, the government may obtain title to the subject invention. The decision of the Board to deny Campbell Plastic' appeal is affirmed.

The Result:

Campbell failed comply with its contract to disclose inventions to the Army.  As a result, the Army may obtain title to the related patents.

Comment: This case should serve as a warning to government contractors. You cannot rely on the friendly face of the Technology Tranfer Office always being there. Contractors should implement a regular practice of documenting engineering work associated with government contracts to ensure that inventions are accurately reported in a timely manner.

University of New Mexico v. Knight

University of New Mexico v. Knight (Fed. Cir. November 9, 2004) (unpublished).

After an earlier remand from the Federal Circuit, defendants Knight and Scallen attempted to amend their counterclaims to indicate precisely how they were damaged by actions arising from the University's actions. However, the district court denied their motions to amend and dismissed all but one counterclaim as barred by the statute of limitations and the New Mexico Tort Claims Act.

On appeal, the appellate panel again sided with the University, finding that Scallen and Knight's arguments to be "without merit."  Barring a rehearing or appeal to the Supreme Court, this case is closed.

Link: Senior U.S. District Judge John Conway said it was unfortunate the university's lawsuit against two former UNM researchers was not resolved by cooperation and "searching for the greater good" outside the courts to benefit cancer patients.

Patent holder barred from reopening malpractice arbitration

Theis Research v. Brown & Bain (Now Perkins Coie) (9th Cir. 2004).

B&B was Theis’s attorney in patent litigation that turned out badly. Theis demanded arbitration of claims against B&B for legal malpractice, breach of fiduciary duty, fraud and breach of contract. In commenting on the litigation that spawned the arbitration, the arbitrator stated:

Viewed as a whole, the litigation that is the subject of this arbitration was an almost unmitigated disaster both for [Theis] and for B&B. The hopes of [Theis] and its investors were dashed; years of work by Mr. Theis and others went unrequited; B&B got no return on millions of dollars of invested time, and had to chalk up a major loss on its results chart.

The arbitrator awarded no compensation for Theis.  Theis then filed a lawsuit for damages and to vacate the arbitration award.

On appeal, the Ninth Circuit first determined that the amount in controversy was sufficient for federal jurisdiction even though the arbitration award had been zero.  The Appellate Panel then Affirmed, finding that Theis could not re-open arbitration as he had not shown that the "arbitral result ... was a manifest disregard of the law, an implausible interpretation of the contract, the award was procured by corruption, fraud, or undue means, or the arbitrator exceeded his powers."

2004 U.S. App. LEXIS 21753

Federal Court has no jurisdiction over suit to recover patent-infringement litigation proceeds

General Technology Applications v. Exro (4th Cir. 2004).

GTA and Exro pursued a joint business venture to produce and market a drag reduction additive (DRA) for petrolium products.  The startup company, EXG, never successfully produced or marketed any DRA.  However, GTA successfully sued Conoco for infringement of its DRA patents -- $60 million.  Neither EXG or Exro were parties to that litigation. 

Once Exro learned of the award, it demanded its share.  According to Exro, EXG held an exclusive license to the GTA patents, thus making the infringement award property of EXG.  However, the district court dismissed Exro's claims on summary judgment.

On appeal, the 4th Circuit Court of Appeals reversed -- finding that the district court lacked diversity jurisdiction over the claims.  The case remanded to Virginia state court.

Federal Circuit Court of Appeals warns that future appellate rule violations will likely result in sanctions

In Re Violation of Rule 28(c) (Fed. Cir. 2004) (Unpublished Order)

At the district court, Esab Group won a multi-million dollar judgment against Centricut for infringement of Esab's patent relating to plasma welding products.  Centricut appealed the judgment and the measurement of damages.  Esab cross-appealed, asking for a modification of the judgment on damages.

While not yet deciding on the merits of the case, the Federal Circuit gave Esab's attorney a written reprimand for filing a reply brief in violation of Rule 28(c) of the Federal Rules of Appellate Procedure. 

Rule 28(c) limits the content of a cross-appeal reply brief to issues presented by the cross appeal.  Further, the Practice Notes accompanying Rule 28 specifically caution counsel to limit the reply brief "to the issues presented by the cross-appeal."   However, Esab's reply brief consisted of 23 pages, about 20 of which related only to the main appeal and not the cross appeal.

The appellate panel declined to impose sanctions against the offending attorney, but noted that "we wish to make clear that it is the duty of counsel to familiarize themselves with applicable rules, and that, in future cases, serious violations of applicable rules, whether or not 'inadvertent,' will potentially subject counsel to sanctions."

A decision on the merits of Centricut v. Esab Group is expected later this year.

Notes:

Fed. R. App. P. 28(c) Reply Brief. The appellant may file a brief in reply to the appellee's brief. An appellee who has cross-appealed may file a brief in reply to the appellant's response to the issues presented by the cross-appeal. Unless the court permits, no further briefs may be filed. A reply brief must contain a table of contents, with page references, and a table of authorities-cases (alphabetically arranged), statutes, and other authorities with references to the pages of the reply brief where they are cited.

 

Dell sued for infringement of international e-commerce patent

DE Technologies v. Dell

DE Technologies owns the patent on multi-lingual e-commerce.  (U.S. Patent No. 6,460,020). The patent, originally filed in 1997, covers a method carried out on a computer that allows international commercial transactions.  Claim 1 of the patent includes the following steps: 

(a) selecting a language from a menu;
(b) selecting a currency from a menu;
(c) selecting a product to be purchased and a destination for shipping;
(d) obtaining from a database i) price information; ii) an international goods classification of the product; and iii) international shipping information;
(e) calculating shipping costs;
(f) determining a total cost;
(g) confirming existence of available funds; and
(h) accepting the order and generating a shipping invoice

Yesterday, BusinessWeek reported that DE has sued Dell for infringement of this patent.  According to the article, If litigation goes forward, it will focus on whether, as DE contends, it really was the first company to demonstrate a system for processing international sales online when it filed for patent protection in 1997.

(Thanks Lisa).

District Court's Review of Figures in Design Patent Sufficient for Summary Judgment.

Colida v. Matsushita (Fed. Cir. 2004) (unpublished opinion).

Facts: Tony Colida owns design patents covering the design of mobile phones designated A.  Matsushita owns a patent on the design for mobile phone B.  In addition Matsushita makes a GU87 phone that matches up with its patented design.  After comparing the phone with the figures from Colida's patents, the district court dismissed Colida's infringement suit - finding that there was no infringement as a matter of law.

Appeal: Reviewing the summary judgment de novo, the appellate panel affirmed, finding no error in the district court's conclusion that "no reasonable trier of fact could find infringement of the [patents] by the GU87 phone in this case."

Summary Judgment of Noninfringement Affirmed.

Patent Case: Bard v. United States Surgical

Bard v. U.S. Surgical (Fed. Cir. 2004). 

Bard owns a patent on a method of repairing hernias with a flexible mesh plug. Bard sued U.S. Surgical for infringement and for inducing surgeons to infringe. Because in the prosecution history and specification Bard defined the claimed plug as having pleats, the district court's claim construction requiring "pre-formed pleats" was affirmed.  Noninfringement affirmed.

Concurrence by Judge Prost:

In this case, the inventors clearly and deliberately disclaimed any coverage of non-pleated plugs they might otherwise have had when they stated during reexamination that “the surface of the inventive plug is pleated” in an attempt to overcome the prior art-based rejections of claims 19 and 20. Under the theory that the inventors acted as lexicographers, the majority holds that this statement, among others, shows that the inventors “clearly defined the plug of claim 20 as having pleats.”  The statement, in my view, is a surrender of claim scope, which precludes Bard from recapturing coverage of non-pleated plugs. Litton Sys., Inc. v. Honeywell, Inc., 140 F.3d 1449, 1458 (Fed. Cir. 1998). Because the inventors clearly disclaimed coverage of non-pleated plugs in the reexamination, I believe we may affirm the judgment of the district court on that basis alone; accordingly, I find it unnecessary to reach the remaining grounds for affirmance relied upon by the majority.

 

Patent Suit Alleges Disney Stole fastPass Idea

Disney's patented fastPass system allows customers to reserve a time to ride an attraction, rather than waiting in line.  (U.S. Patent No. 6,173,209). 

According to a report by Sean Mussenden at the Sun Sentinel, a Tennessee man has sued Disney for stealing his idea for the line management system. 

After Robert Keyes watched a man pass out in a ride queue at Disney-MGM Studios, he had an epiphany, he said: Theme park visitors do not have to stand in line.

So, according to a patent lawsuit Keyes filed this month in federal court in Orlando, he sent a letter to Disney executives in 1991 describing a system that would allow some theme-park visitors to wait in a "standby" line but give others a ticket to return later and avoid the wait.

A top Disney executive sent him a letter back a month later, telling him the idea wouldn't work and would result in "more guest inconvenience," according to Keyes' lawsuit.

Now, Keyes has sued Disney for "stealing his idea."  In the complaint, he has requested correction of inventorship and damages for unjust enrichment.

On their website, Disney notes that "we are unable to accept or examine any creative idea, suggestion or document other than those solicited by the company itself.  We hope that you understand the aim of this policy, which is designed to prevent any future misunderstandings or problems which might arise if projects developed by [Disney] were to show a resemblance to creative work originated from third parties."

Links:
Download the complaint against Disney.
Download Disney's patent.

In a parallel case, the 9th Circuit Court of Appeals, in Jeff Grosso vs. Miramax Film Corp., found that movie and television executives enter an implied contract every time they read a script or hear a pitch.

Caterpillar Jury Trial Vacated Because Juror's Spouse Was an Employee

Caterpillar v. Sturman (Fed. Cir. October 28, 2004). 

The Court of Appeals for the Federal Circuit (CAFC) today vacated a jury verdict in a trade secret and contract dispute involving Caterpillar. 

The technology at issue involved the use of residual magnetic latching in a fuel injector.  (See, for example, U.S. Patent 3,646,898).  The Appellate Panel, led by Judge Newman, decided several important issues in this case.  One of the most interesting involved Juror No. 3 whose spouse was a current Caterpillar employee.

At the beginning of trial, during the jury selection process, Sturman moved to dismiss for cause any current or former Caterpillar employees and their spouses. The district court denied Sturman’s blanket objection, but specifically allowed Sturman to show cause for individual jurors. . . . Sturman did not individually challenge for cause Juror No. 3, the spouse of a current Caterpillar employee, nor did it use one of its peremptory challenges to have her removed. Juror No. 3 ultimately sat on the jury.

Sturman appealed the district court's opinion to allow Juror No. 3 to sit on the jury.

Potential for bias reviewed de novo.

Normally, the question of whether an individual juror is biased is a factual determination entitled to deference on appeal.  However, the CAFC ruled that a district court's decision on "implied bias, as opposed to actual bias" is reviewed de novo.

Spouse of Employee is Biased as a Matter of Law.

Applying Seventh Circuit law, the court found that implied bias is demonstrated by "showing that the juror has a personal connection to the parties or circumstances." 

Juror No. 3 had a financial interest in this case because her husband worked for Caterpillar at the time of the trial. As noted in Polichemi, even a tiny financial interest is enough to warrant dismissal. And it is legally irrelevant whether this financial interest arose due to his employment in management or under a union contract. . . . In addition, we find no distinction in the law between the financial interest of an at-will management employee and the interest of an employee under a union contract, nor do we advocate creating one.

Jury verdict vacated. Case remanded for a new trial.

Patents: Federal Circuit Defines Requirements For Declaratory Judgment Action

Capo v. Dioptics (Fed. Cir. 2004).

Background

Dioptics produces "wear-over" sunglasses that are adapted to fit over or clip onto eyeglasses.  Capo is a wholesale marketer of sunglasses.  Prior to suit, the president of Dioptics (Henry Lane) called the president of Capo (Mark Ascik):

Lane left a voice mail message stating that if he did not hear promptly from Ascik, he would have to "presume that you are just ducking and racing forward to infringement;" Lane cautioned Ascik about "charging down a path here that's going to end up into a multi-million dollar lawsuit." Ascik then phoned Lane, and Ascik's affidavit states that Lane said that Dioptics had thirteen United States patents and would soon have forty, and that these patents covered all of the basic wear-over sunglass frame shapes. Lane said that Dioptics would have no choice but to defend its patents against infringement, and that he was sure he would win an infringement suit.

After the conversations, Capo filed a declaratory judgment complaint, asking for a preemptive noninfringement holding.  Dioptics moved for dismissal of the declaratory action, on the ground that Dioptics could not have threatened suit because no one at Dioptics had seen Capo's product or analyzed it for infringement.

The district court dismissed the declaratory action, finding that the dispute was not "sufficiently crystallized" for declaratory action.  On appeal, the Federal Circuit reversed:

Objective Apprehension Of Being Sued Sufficient For Declaratory Judgment Action.

Dioptics' argument that it could not have ethically filed suit at that time may be relevant to whether Dioptics acted responsibly, but it is irrelevant to whether the patentee's threats of suit instilled a reasonable apprehension of suit.  Although Dioptics now characterizes Lane's words as "cursory," the record well supports the conclusion that Capo had the objectively reasonable apprehension that it would be sued by Dioptics for patent infringement. This objective apprehension was deliberately and intentionally created by the president of Dioptics. It is irrelevant whether Dioptics had adequately investigated the basis of its threats, if they created the requisite objective apprehension. . . . We conclude that the district court clearly erred in declining to find that Capo had a reasonable apprehension of suit.

Failure to Raise Counterclaims Does Not Warrant Dismissal.

The district court gave weight to Dioptics failure or refusal to make compulsory counterclaims for infringement.  The Appellate Court found that Dioptics' waiver of the claims should not add any weight to the argument for dismissal.

The Existence of Pending Patent Applications Does Not Justify Dismissal.

The district court also gave weight to Dioptics' argument that it had pending patent applications that upon issuance would strengthen its case for infringement.  The Appeals Court disagreed with this finding:

Capo is entitled to resolution of the infringement accusations already made, for the patents that already exist. The possibility of future patents is irrelevant to present rights and liability.

Conclusion

Resolution of this dispute is within the court's capability, and it is the district court's responsibility to resolve it. Declining to do so is an abuse of discretion.

We conclude that the dismissal was improperly granted. The dismissal is vacated, and the case is remanded for further proceedings.

 

Federal Circuit Denies Petitions to Rehear

Today, the Federal Circuit, without opinion, denied several petitions for rehearing en banc:

• Toro v. White Consolidated Industries petition for rehearing DENIED.
• Home Diagnostics v. LifeScan petition for rearing DENIED.
• Chamberlain Group v. Skylink Technologies petition for rehearing DENIED.

Earlier this week, the CAFC denied petitions for en banc rehearings in Monsanto v. Ralph and International Rectifier v. IXYS.

Barring an appeal to the United States Supreme Court, the holdings on appeal represent the final rule of law.

California Appeals Court Upholds Genentech Verdict

City of Hope v. Genentech (Cal. App. 2004) (B161549). 

Decision: A California state appellate court has upheld a $500 million verdict against Genentech for back payment of royalties on drug sales from a 1976 agreement with City of Hope National Medical Center.  The court found that Genentech breached a fiduciary duty to City of Hope.

Genentech does not dispute that it failed to disclose various licenses and pay royalties on those licenses. Rather, it contends that it did not breach any fiduciary duty so long as it was adhering to an erroneous but legally tenable interpretation of the agreement. In essence, Genentech would have us hold that even if it followed an interpretation it knew was contrary to what the parties intended and agreed upon, it could not be held liable so long as that interpretation was objectively sustainable under the law. . . . None of [the cases cited by Genentech] allows a party to profit from a legally tenable contract interpretation when the party knows that the agreement has a wholly different meaning. In any event, it would be antithetical to the very nature of the obligations imposed on fiduciaries for us to hold that a fiduciary could act in the manner suggested by Genentech.

To the extent Genentech contends that its interpretation of the agreement was held in good faith, that contention fails. The jury’s finding of fraud or malice demonstrates that it believed that Genentech acted in bad faith. That finding . . . is supported by substantial evidence and is sufficient for concluding that Genentech breached its fiduciary duty.

According to a California based patent attorney, several amici curiae -- including Intel Corp., TechNet and the California Chamber of Commerce -- pleaded with the court to reverse the judgment, saying that imposing fiduciary status as a cost of using third-party intellectual property would impede innovation.  Genentech has announced its plans to appeal the decision to the California Supreme Court.

About the Case: In 1978, City of Hope biologists Arthur Riggs and Keiichi Itakura developed a technique for splicing into a bacteria gene the DNA for human insulin, which became the world's first biotechnology drug. Genentech agreed to pay City of Hope 2% on net sales of products that were tied to the DNA provided by the cancer center.  (see Patent No. 4,704,362). Royalties had been paid for sales of insulin and on sales growth hormone products, but the cancer center is asking for royalties on products made under 20 other license agreements. 

UK High Court Rejects Doctrine of Equivalents

Hal Wegner recently reviewed the House of Lords case of Kirin-Amgen v. Hoechst Marion.  This case presented the first opportunity for the British high court to interpret the "new" patent law (introduced a quarter-century ago).

According to Hal, the court "held that the 'purposive construction' test for determination of patent scope should be maintained and is consistent with the European Patent Convention. The doctrine of equivalents as an alternative test is expressly repudiated."

There will be occasions upon which it will be obvious to the skilled man that the patentee must in some respect have departed from conventional use of language or included in his description of the invention some element which he did not mean to be essential. But one would not expect that to happen very often.

In rejecting the American style doctrine of equivalents, the Lord Hoffman noted that:

I cannot say that I am sorry [that our precedent is antithetical to a doctrine of equivalents] because the Festo litigation suggests, with all respect to the courts of the United States, that American patent litigants pay dearly for results which are no more just or predictable than could be achieved by simply reading the claims.

Invention Submission Corporation versus Jon Dudas, USPTO Director

In January 2002, the PTO initiated an advertising campaign to warn the public of invention promotion scams. In a press release describing the campaign, the PTO noted that the agency's advertisements would feature "an actual inventor, Edward Lewis, who lost several thousand dollars." In the advertisements, Lewis described how he had spent $13,000 dollars on the services of an invention promotion company but "ha[d]n't seen a penny." The advertisements did not accuse any particular promotion company of engaging in scams, nor did they identify the company to which Lewis referred.

A news organization then published a story on the Invention Submission Corporation, noting that Lewis had filed a complaint against ISC and how the FTC had investigated the ISC for "misrepresentation in patent marking schemes."

The Invention Submission Corporation then sued the PTO under the Administrative Procedure Act (APA) alleging that the PTO's advertisements exceeded its statutory authority and were done in order to penalize ISC.

Both the district court and 4th Circuit Court of Appeals dismissed ISC's claims, noting that the PTO's ad campaign was not a "final decision" as required for jurisdiction under the APA.

 Now, ISC has petitioned the Supreme Court of the United States for a hearing on the case.  ISC argues that the the PTO's actions constitute a sanction against the company, and is therefore reviewable under the APA.

The government brief in opposition to the petition is available here. The briefs have been distributed for conference scheduled for October 29.

 

Courts Rely on Internet Articles to Deny Trademark Application

In re DSS Environmental (Fed. Cir. 2004) (unpublished).

The USPTO refused to register DSS's trademark DUALSAND on the grounds that the term is merely descriptive.

Under 15 USC 1052(e)(1), the PTO may refuse to register a mark if the mark, “when used on or in connection with the goods of the applicant,” is “merely descriptive” of the applicant’s goods. 

The Federal Circuit agreed with the PTO, concluding that the PTO's decision was supported by substantial evidence.

Interestingly, the Appellate Panel supported the PTO's reliance on articles from the Internet. 

DSS argues that the articles in the record lack credibility because their source was the Internet. However, the examining attorney was not relying on the articles for their accuracy, but merely to ascertain how the term “dual sand” is used in the context of water wastewater filtration. In making such a determination, the examining attorney may obtain evidence from “any competent source, such as dictionaries, newspapers, or surveys.” . . . The Internet articles in this case, including on-line copies of newspaper articles, fully satisfy that requirement.

Refusal to register mark affirmed.

 

Design patents: Bernhardt v. Collezione Europa

Bernhardt v. Collezione Europa (Fed. Cir. 2004) (04-1024).

Bernhardt sued low cost furniture dealer Collezione for infringement of six design patents. The district court, however, held that several of patents were invalid under 102(b) for prior public use.  Specifically, the court found that Bernhardt's disclosure of the designs at a Pre-Market exhibition rendered the patents invalid.  In addition, the court found that Collezione's products did not infringe the patents.

On appeal, the Federal Circuit vacated and remanded:

I. Public use analysis for a design patent requires substantially similar appearance in the eyes of ordinary user as compared to the claimed designs or their points of novelty.

While the court concluded that each of Bernhardt’s furniture pieces ... were “similar to” the furniture design “shown in” each of Bernhard’s design patents, the analysis does not discuss or explain whether the furniture designs actually displayed at Pre-Market were substantially similar in appearance in the eyes of an ordinary observer to the claimed designs or appropriated the points of novelty of the patented designs. Only after making these determinations could the district court properly assess whether an invalidating public use within the scope of § 102(b) had occurred.

II. Witness testimony is not required to establish infringement of design patent.

The court apparently did not consider the evidence actually introduced—the design patents, their prosecution histories, and the cited prior art—from which Bernhardt’s proposed points of novelty and contentions regarding how Collezione’s accused designs appropriated Bernhardt’s proposed points of novelty might have been discerned. Because the district court incorrectly required Bernhardt to explain its points of novelty through the testimony of a witness, and concluded, based on the absence of such testimony, that Bernhardt failed to prove that Collezione had appropriated the novel ornamental features of the patents-in-suit, we vacate the district court’s judgement of non-infringement, and remand the infringement issue to the district court for further proceedings consistent with this opinion.

States May Face Patent Liability For Importing Drugs

In a recent paper, Penn State Professor Daniel Cahoy analyzed the importation of inexpensive drugs from Canada and other countries. His research looked at potential liability for patent infringement by various levels of government. Cahoy arrived at several conclusions:

• Both private organizations and municipalities share the same, crushing liability under the Patent Act;
• Despite Eleventh Amendment immunity, state governments face nearly equivalent liability for takings claims based on the Fourteenth Amendment;
• The federal government confronts liability under the Fifth Amendment that broadens its exposure under the recognized just compensation statute; and
• Attempts by Congress to modify the Patent Act to permit importation would likely constitute an unconstitutional taking.

Cahoy, Daniel R., "Patent Fences and Constitutional Fence Posts: Property Barriers to Pharmaceutical Importation" . Fordham Intellectual Property, Media & Entertainment Law Journal, Vol. 15, Winter 2005. http://ssrn.com/abstract=603121

Note: Under U.S. Law, the first sale (AKA "Exhaustion") doctrine does not apply to products sold in a foreign country.

United States patent rights are not exhausted by products of foreign provenance. To invoke the protection of the first sale doctrine, the authorized first sale must have occurred under the United States patent.

Jazz Photo v. ITC, 264 F.3d 1094 (Fed. Cir. 2001), cert. denied, 536 U.S. 950 (2002).

Eolas, Microsoft and Pellegrini

The recently filed petition in Pellegrini may ultimately decide the damage award in Eolas v. Microsoft.  Both cases discuss the international application of U.S. Patent Law, and the requirements of 35 U.S.C. 271(f)(1).

271(f)(1) provides for liability for causing components of a patented invention to be supplied for assembly abroad:

Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer. 35 U.S.C. 271(f)(1).

At the district court level, Eolas won a $500 million verdict for Microsoft's alleged patent infringement.  A portion of the award fell under 271(f).  In Eolas, no physical component of the patented invention had shipped from the U.S.  However, the District Court ruled that Microsoft's shipment of information on a "golden master" disk created a sufficient nexus with the U.S.  The Eolas case is now on appeal.

Similarly in Pellegrini, no physical components were shipped from the U.S.  However, the evidence indicates that the accused infringer made sales and controlled manufacture of components from the U.S.  Unlike in Microsoft, the Federal Circuit found no infringement because no physical components of the patented invention were shipped from the U.S. 

Now, Pellegrini has asked the Supreme Court to review its case.  In addition to solidifying the meaning of the infringement statute, the outcome may also help determine the utimate damages in Eolas.

UPDATE: Professor Joe Miller reminded me of another related case that is pending appeal: AT&T v. Microsoft, (S.D.N.Y. 2004).  That case involved another "Golden Master" disk shipped by Microsoft.  In AT&T, the court held that object code contained on the disk constituted a component under 271(f) even though the object code on the disk was replicated abroad before being incorporated into the final product.

Contingent Patent Cases

Link: The American Jobs Creation Act of 2004 is ready for President Bush's signature.   The act may be a boon for patent litigators who work on contingency. 

The IRS has previously forced victorious plaintiffs to pay taxes on the entire award, then taxed the attorneys for their contingent fee.  In essence, a large chunk of the earnings are double taxed.  The Jobs Creation Act of 2004 reportedly eliminates this double taxation -- thus increasing the size of the pot to be split between the plaintiff and its attorneys.

Patent Case: On-Line Technologies v. Perkin-Elmer

On-Line Technologies v. Perkin-Elmer (Fed. Cir. 2004).

On-Line sued Perkin-Elmer for infringement of its patent that provides a method of increasing the light-path in a spectrometer with corrected astigmatism and reduced diffusion. (U.S. Patent No. 5,440,143).  After construing the claims, the district court granted summary judgment of noninfringement. 

On appeal, On-Line argued that the claims were too narrowly construed, and that the allegedly infringing mirrors having a toroidal surface fall within the claim limitation of a substantially spherical surface. Perkins-Elmer disagreed, noting that On-Line specifically omitted toroidal surfaced mirrors from its claims, and thus "that On-Line had dedicated surfaces of that shape to the public."

The Federal Circuit agreed with On-Line that toroidal surfaces are covered by the claims.

We reach that conclusion because the specification makes clear that the claim language referring to spherical surfaces with cylindrical components includes toroidal surfaces. 

The court vacated and remanded this portion of the district court decision, but affirmed the rest.

 

Can Dependant Claims Define Structure of Means-Plus-Function Term?

Ghaly v. Hasbro - Re-mix

Ghaly has asked the Court of Appeals for the Federal Circuit for a rehearing based on perceived errors in its prior ruling on the case.  Rehearings are rarely granted.  However, in this case, Ghaly may have a point.

Ghaly's patent claims an "entry control means" limitation.  A major bone of contention is whether the control means is limited to bi-stable switches (Hasbro's position) or include momentary switches (Ghaly's position).  In its initial decision, the CAFC sided with Hasbro, finding that the disclosure limited the claim to bi-stable switches. 

However, Ghaly raises two interesting points in his petition to rehear: 1) In its opinion, the CAFC defined momentary switches to be "like keys on a keyboard [that] revert to their original status the moment a user stops pressing on them."  2) In the dependent claims, Ghaly disclosed that the "entry control means" could be a "key pad switch."  Ergo, argues Ghaly, a key pad switch is a momentary switch.

Ghaly does not cite any cases directly on point, and thus raises the following legal question:

Should means-plus-function language be interpreted in light of the claims as well as the body of the specification?

Hasbro's counsel, Tony Sitko disagrees with Ghaly's interpretation of the case. He noted that "Hasbro thinks that the Court's opinion speaks for itself, and quite frankly, that the Court got it right."

Honeywell Enforces LCD Patent

This week, Honeywell sued some of the biggest names in the consumer technology industry for infringement of its patents related to liquid crystal display (LCD) technology. (Patent No. 5,280,371).  The patent claims a backlight diffuser consisting of two sheets of cylindrical lenses between the backlight and the screen. 

Included on the list of defendants are Apple, Casio, Dell, Kodak, Fuji, Fujitsu, Nikon, Nokia, Pentax, Sony, Toshiba, and more. The two largest producers of flat panel monitors, LG Philips and Samsung, have already taken licenses under the patent.