Zyprexa Patent Upheld on Appeal

Eli Lilly v. Zenith Goldline (Fed. Cir. 2006)

Lilly’s patent covers olanzapine (Zyprexa®) and its use for the treatment of schizophrenia. Three generic manufacturers (Zenith (IVAX), Dr. Reddy’s, and Teva) filed an ANDA and Lilly responded with a complaint in the Southern District of Indiana.  After a bench trial, the district court agreed with Lilly that the patent was valid, infringed, and enforceable.  The defendants appealed to the Court of Appeals of the Federal Circuit.

Anticipation: To anticipate the invention, a prior art reference “must disclose each and every feature of the claimed invention, either explicitly or inherently.”  However, in both Petering and Schaumann, prior art references that disclosed the family of the claimed compound were found to anticipate the claimed compound — even though the claimed compounds were not specifically discussed.

Here, the CAFC found that those cases were not applicable because the closest reference to olanzapine did not spell out “a definite and limited class of compounds that enabled a person of ordinary skill in the art to at once envisage each member in this limited class.”

Obviousness: The CAFC agreed that the prior art references did not suggest a the compound. In addition, Lilly provided strong evidence of secondary considerations, including: “(1) a long-felt and unmet need; (2) failure of others; (3) industry acclaim; and (4) unexpected results.”

The record shows a long-felt need for a safer, less toxic, and more effective clozapine-like drug; a decade (or more) of failure to find a replacement for clozapine; a reasonable amount of commercial success for olanzapine; and a number of awards for olanzapine as indicators of industry acclaim.

Public Use: Prior to filing the patent application, Lilly conducted Phase I clinical safety trials. The court found, however, that the trials were well within the experimental use exception:

In this case, Lilly tailored its tests to their experimental drug safety and efficacy purpose, adequately monitored for results, and maintained confidentiality throughout the duration of the study. The trial court did not err in finding no public use.

 

Plumtree: DJ Jurisdiction, On-Sale Bar

Plumtree v. Datamize (Fed. Cir. 2006)

Declaratory Judgment Jurisdiction: The Datamize patents cover software authoring tools for creating software kiosks. Datamize had earlier sued Plumtree for patent infringement and had also told Plumtree that it would be infringing the soon-to-issue continuation application. When the continuation did issue, Plumtree filed a declaratory judgment action — giving the CAFC one last opportunity to opine on its reasonable apprehension test before the Supreme Court issues its MedImmune decision in early 2007.

A declaratory judgment action requires an actual controversy between interested parties. The DJ plaintiff must show (1) some action by the patentee that creates a reasonable apprehension of facing a patent infringement lawsuit and (2) some activity on the part of the DJ plaintiff that could constitute infringement. With a few bright-line exceptions (such as that seen in MedImmune), the court looks to the totality of the circumstances when determining whether a reasonable apprehension of suit exists. 

Here, the court found that the prior suit on similar technology exhibited a “course of conduct” indicating a “willingness to protect [its patented] technology”and thus “created a reasonable apprehension of suit.”

On Sale Bar: Once jurisdiction was established, the CAFC looked to determine whether the Datamize patents were invalid for being on-sale more than one year prior to the filing of the application. Here, the appellate panel found that sale of a kiosk did not violate the on-sale bar because the patents did not cover the kiosks themselves.  The court noted, however, that the on-sale bar would be triggered if either (1) the sales contract required use of the patented method or (2) the patented method was actually used to complete the contract prior to the critical date.  Plumtree, however, could not prove either of those — the agreement “did not unambiguously require use of the patented method” and there was no evidence that the patented method was actually performed prior to the critical date.

Notes: This is the second CAFC opinion involving these two parties. The earlier case involved the same technology but a different patent.  That patent was invalid as indefinite because the claims included the terms “aesthetically pleasing.”

Judge Moore Opinions: Short, Focused, and To-The-Point

In re Hays (Fed. Cir. 2006) (Nonprecedential)

New Circuit Court Judge Kimberly Moore’s first opinion is likely to be predictive of her future work — short, focused, and to-the-point. 

This case involves a pretty neat invention of a tissue holder for an automobile visor. The BPAI had rejected the claims as anticipated, but the PTO later conceded that the cited reference (relating to a golf-tee holder that clips to a lapel) was not anticipatory.

The PTO is fully expected to present a new grounds of rejection.  In all likelihood, the patent will never issue because another round of appeal would be prohibitively expensive for this type of invention.

Vacated and Remanded.

• This does not really count as Judge Moore’s first opinion because it is a non-precedential opinion. In a few weeks, we’ll get the real one.

Microsoft v. AT&T: Transnational Patent Law At The Supreme Court

Microsoft v. AT&T (Supreme Court 2006)

Transnational patent law is a hot topic, and one the Supreme Court cannot ignore. The issue de jour involves the question of unauthorized export of patented software.  AT&T holds the speech compression patent that is infringed by Microsoft Windows. (RE 32,580). Microsoft exports the software code from Redmond to various international locations.  Once abroad, the code is then copied and installed in computers that are then sold abroad.  As the invention is claimed, the code alone does not infringe. Rather, infringement would only occur once the code is combined with the computer hardware. 

Under traditional notions of patent law, Microsoft’s actions are not infringement because the code alone does not infringe the patent, and (for the purposes of this case) the code is not combined with the hardware within the U.S. 

Here, however, traditional notions of territoriality have been supplanted by statute.  Under 35 U.S.C. 271(f), supply of only a portion of a component of a patented invention from the U.S. can be infringement.

35 U.S.C. 271(f) prohibits the “suppl[y] . . . from the United States . . . [of] all or a substantial portion of the components of a patented invention . . . in such manner as to actively induce the combination of such components outside of the United States,” as well as the “suppl[y] . . . from the United States [of] any component of a patented invention that is especially made or especially adapted for use in the invention.” 

Microsoft, of course, wants to avoid infringing the U.S. patent for its activity abroad and gives two separate reasons why its activity of exporting software do not fall within the parameters of 271(f). (I) Software code is an intangible string of information not a “component” as required by the statute. (II) Because copies of the code were used to create the infringing software/hardware combination, no physical particle that Microsoft exported actually became part of the finished product.  According to Microsoft, this means that nothing in the infringing combination was actually supplied from the U.S. as required by the statute. I term these two arguments the tangibility requirement and the molecular conservation requirement.

Microsoft and its supporters have now filed their merits briefs to the Supreme Court, and my reading of their arguments is that there is strong support for molecular conservation, but only weak support for tangibility. The Bush Administration supports this distinction in its brief filed jointly by the DOJ and PTO. 

On tangibility, the Government argues that software can certainly be a component, and that the statute is not limited to “only tangible components” as Microsoft suggests. Although not cited by the Government, Section 271(c) provides a statutorily distinct way of limiting components.  In referring to infringement through importation, that clause identifies only components of certain types of inventions such as machines and compositions.

On molecular conservation, the Government correctly notes that the statute requires that the exported components be the same components that are combined in the infringing manner. “Conduct that merely induces the combination of foreign-made components does not violate Section 271(f).” The statute, according to the Gov’t, leaves foreign manufacturers “free to manufacture and assemble copies of the identical components overseas” so long as none of the components actually assembled were made within the US.  Applying their argument to this case, we know that the software was copied and only those copies were combined with hardware in a would-be infringing manner.

A group of electronics companies led by Amazon filed a colorful brief that also supports the requirement of molecular conservation.

No matter where their unique arrangement was invented or dictated, if each molecule in the machine was supplied from outside the U.S., then no component was supplied from the U.S. In the present case, Microsoft did not supply even a single molecule of the foreign machines at issue.

Amazon also raises the slippery slope issue.  According to the brief, if Microsoft is liable here, then the Court would open the door to infringement for export of blueprints or a CAD/CAM design scheme.  That result, the brief argues, goes against congressional intent. As an aside, Amazon cited Wikipedia but did not include it in its list of “authorities.”  Although they do not cite it, the Pellegrini case holds that plans or instructions for a patented item cannot serve as components under 271(f).

In support of the molecular argument, a group of professors led by professors Lemley (Stanford) and Duffy (GWU), looked appropriately at the language of 271(f):

[A]s a matter of grammar that the phrase “such components” refers back to the components that have been “supplied” from United States. Thus, the plain language of the statute requires that inducing an extraterritorial combination constitutes an act of infringement if and only if the combined components are in fact the same components that were “supplied in or from” the United States.

For the professors, supplying exact copies does not meet the requirement. Most of the briefs come-up with some hypothetical metaphor to explain their situation — a guy memorizing some code and flying on an airplane, a hard-copy print out of some code that runs a fuel-injection system, CAD/CAM instructions, blueprints, etc.  The idea apparently is that if we allow copies of software to be considered components, then these situations necessarily also provide for infringement actions.  More accurately, however, they are just poor hypotheticals.

Software as Patentable Subject Matter: The anti-patent activist group SFLC led by Dan Ravicher and Eben Moglen also filed a brief that may be the dark-horse of this debate.  Their brief asks the Court to take a fresh look at the patentability of software.

Software can not be a “component[] of a patented invention” under 35 U.S.C. § 271(f) because software is not patentable subject matter under 35 U.S.C. § 101. As such, the Federal Circuit’s holding to the contrary in this case is erroneous and should be reversed.

It would be odd for the Court to decide the 101 issue in this case after dismissing LabCorp earlier this year.  However, I expect at least one concurring opinion supporting the ideas in this brief.

Impact on Software Industry: If Microsoft loses here, it will at least have a clear avenue to avoid future infringement. Unfortunately for US business, that avenue is to move all software development activities abroad so that components are never exported. This harmful effect was recognized and discussed in SIIA’s brief. SIIA is an industry group of software & technology companies who want to continue to design products in the US, but manufacture those products abroad. This argument is punctuated by BSA’s questionable hyperbole: “The purpose of patent protection is to encourage domestic innovation, not to drive it overseas.”

Impact in Biotech: Although not yet a viable industry, this could have a potentially large impact on biotechnology patent issues.  Like software, DNA code (or other biologics) could be shipped from the U.S. to be copied abroad and incorporated into an organism in an infringing manner.  Even more abstract, the export may merely involve transmitting a sequence listing that would be used to reproduce the sequence abroad.  Any decision on software should consider the potential impact on these areas as well.

Methods: What Professor Wegner has called the “Bizarre Twist” of this case involves the CAFC’s notion of export of components of method claims. In Union Carbide v. Shell, the court found that methods could indeed have components, and those included items used in the method (such as a catalyst).  Thus, in that case, the defendant could be held liable for exporting a stock catalyst if it intended to use the ingredient in a would-be infringing manner. Shell settled its case with Union Carbide, but has filed an amicus brief in this case, arguing that the Federal Circuit “seriously erred” by declaring that “every form of invention eligible for patenting falls within the protection of section 271(f).” 

Statutory Construction Excludes Methods?: Shell compares the use of the term “component” in 271(f) its use in 271(c) — the section addressing importation.  In 271(c), Congress explicitly limited components to “component[s] of a patented machine, manufacture, combination, or composition,” but also included a provision excluding importation of materials used in a patented process.  Shell’s argument: because 271(f) does not include the provision discussing materials used in a patented process, it cannot cover processes.  Of course, the unstated counter-argument to shell is that components discussed in 271(c) are specifically limited to components of machines, while 271(f) components are not so limited — indicating that “component” in 271(f) should receive a broader interpretation.

International Law: All of the transnational patent issues have an impact on international law issues. FICPI, a Swiss-based organization of patent folks filed its brief asking the the U.S. to keep its patents territorial and avoid stomping on the toes of others (as “young nations” are bound to do). FICPI’s implication that the Supreme Court is bound by the Paris Convention is plainly wrong.  The Paris Convention is not U.S. law. However, their point is well-taken, if 271(f) covers software, it thwarts the efforts of other countries to eliminate software patents.

Documents:

• On the Merits
• Petitioner: Microsoft Brief;
• Amicus: US Government;
• Amicus: Law Professors (Lemley & Duffy);
• Amicus: Amazon;
• Amicus: SIIA (Industry Org.);
• Amicus: SFLC (Moglen & Ravicher);
• Amicus: Shell Oil (Method Claims);
• Amicus: Intel;
• Amicus FICPI;
• Amicus Autodesk
• Amicus BSA (Industry will be destroyed if AT&T wins);
• Amicus Yahoo!.
• On Petition for Certiorari
  • Petitioner: Microsoft Petition
  • Petitioner: Microsoft Petition Appendix
  • Respondent: AT&T Opposition
  • Petitioner: Microsoft Reply in Support
  • Respondent: AT&T Supplemental Brief
  • Petitioner: Microsoft Supplemental Brief
  • Amicus: Software and Information Industry Association in Support of Microsoft
  • Amicus: Government in Support of Microsoft

Important recent 271(f) cases:

• NTP v. Research in Motion, (271(f) “component” would rarely if ever apply to method claims).
• AT&T v. Microsoft, 414 F.3d 1366 (Fed. Cir. 2005) (271(f) “component” applies to method claims and software being sold abroad);
• Union Carbide v. Shell Oil (Fed. Cir. 2005) (271(f) “component” applies to method claims).
• Eolas v. Microsoft, 399 F.3d 1325 (Fed. Cir. 2005) (271(f) “component” applies to method claims and software);
• Pellegrini v. Analog Devices, 375 F.3d 1113 (Fed. Cir. 2004) (271(f) “component” does not cover export of plans/instructions of patented item to be manufactured abroad);
• Bayer v. Housey Pharms, 340 F.3d 1367 (Fed. Cir. 2003) (271(g) “component” does not apply to importation of ‘intangible information’).

Notes:

• I will be updating this page as more briefs are filed.
• I will be talking about cross-border liability at Santa Clara University’s 25th Annual Computer & High Technology Law Journal Symposium on January 26 in San Jose. Information here.

Even under DOE, "predetermined" combo must be determined beforehand

Planet Bingo v. Gametech (Fed. Cir. 2006).

Planet Bingo is the exclusive licensee of two patents covering a way to play bingo.  This game combines the numbers with an indicator (such as the color red) to give enhanced awards. The patent claims a “predetermined” winning combination, and that is where the dispute lies.

In the accused game of “rainbow bingo,” the color of the first ball chosen serves as the indicator.  Since that color is not known before the game begins, the court found it was not “predetermined.” as required by the claims.

Planet Bingo, however, asserted infringement under the DOE. Although the defendant’s indicator color is not known before the game begins, it is known immediately after the first bingo ball is drawn — something that is equivalent.  The CAFC disagreed, finding that under Warner-Jenkinson, a color that is “predetermined” cannot, as a matter of law, be equivalent to a color that is selected immediately after the game starts.

Here, the court focused particular attention on foreseeability of the asserted equivalent — apparently assuming that most variations in the bingo-arts would be foreseeable.

Unjust Enrichment For Stealing Ideas Does Not Create Patent Jurisdiction

Thompson v. Microsoft (Fed. Cir. 2006).

Thompson sued Microsoft for unjust enrichment under Michigan law.  Arguing that Microsoft stole his idea, patented it, and implemented it in various products. In its motion to dismiss, Microsoft argued that the claim was preempted by federal patent law. (citing Ultra-Precision).

Instead of hearing the appeal, however, the CAFC declined jurisdiction because the case did not arise under federal patent laws as required by Christianson & Holmes v. Vornado.

Thompson’s well-pleaded complaint does not establish that the right to relief necessarily depends on resolution of a substantial question of federal patent law. Thus, the district court’s jurisdiction does not "aris[e] under" section 1338.

In particular, the court noted that preemption alone does not create jurisdiction. An inventorship issue might create an issue, but Thompson’s claim could have theoretically succeeded without proving inventorship (in the strict patent sense).

Case transferred to the Sixth Circuit Court of Appeals.

In Preliminary Injunction Decision, CAFC Forecasts Post-eBay Jurisprudence

Sanofi v. Apotex (Fed. Cir. 2006)

Generic manufacturer Apotex wants to make something similar to Sanofi’s Plavix (clopidogrel bisulfate) and filed an ANDA alleging that Sanofi’s patents were invalid.

The two parties worked together to negotiate a settlement.  The agreement, however, was not accepted by state attorneys general even after new terms were presented. Under provisions of the agreement, the regulatory denial killed the settlement and the parties resumed litigation.

Sanofi then filed a motion for preliminary injunction to stop Apotex from selling its product. Within 21 days, the district court issued a PI. (During that time, Apotex shipped six-months of product). Apotex then appealed the PI.  Preliminary injunction jurisprudence has its own four-factor test that is similar to that of permanent injunctions. The plaintiff must show:

• Reasonable likelihood of success on the merits of the case;
• Irreparable harm if an injunction is not issued;
• Balance of hardships tipped in favor of the plaintiff; and
• Public interest that is not negatively impacted.

The major difference between the factors for consideration in preliminary injunctive relief and those for permanent relief is that preliminary relief requires a showing of a likelihood of success while permanent relief requires success on the merits as a precondition. Thus, the final three factors will give some indication of how the court will rule in post-eBay injunction cases.

Likelihood of success on the merits: Apotex took the odd position of arguing anticipation based on a broadly worded claim of a prior art patent that was examined during prosecution.  The CAFC confirmed that this made the burden of proving invalidity at trial “especially difficult.”  On obviousness, the CAFC confirmed that the unpredictability of enantiomer activity made the claimed dextrorotatory formation nonobvious even if the molecule as a whole was known.

On Irreparable Harm: The settlement agreement between the parties included a provision that capped any damages for infringement by Apotex — seemingly an admission that Sanofi would settle for money damages. The court did not buy-into this argument, but only because of the technicality that the agreement also contemplated an injunction.

Balance of hardships tip entirely in Sanofi’s favor because Apotex chose to launch its product under threat of injunctive relief.  It could have avoided the situation altogether and thus should not benefit from this factor.

Public Interest: The CAFC continued its line of the “importance of the patent system in encouraging innovation.” Interestingly, the court focuses on how the expense of pharmaceutical inventions necessitates strong patent protection. . . . begging the question of whether less expensive innovations (such as software) have less of a public interest in strong patent protection.

Court Retains Article III Jurisdiction To Determine Attorney Fees

Highway Equipment v. Feco (Fed. Cir. 2006).

The district court dismissed the case with prejudice after the plaintiff gave the defendant a covenant not to sue. Just before trial, the plaintiff gave up and granted a covenant not to sue. The district court dismissed the case, but retained jurisdiction to decide the issue of attorney fees (fees denied).

On appeal, the CAFC first decided the issue of Article III jurisdiction — holding that even after dismissing the case major, the lower court properly retained jurisdiction over the attorney fee issue. The appellate panel then agreed that attorney fees were not justified in this case.

Supreme Court: Current Test of Obviousness is "Gobbledygook"

KSR v. Teleflex (Supreme Court 2006, Oral Arguments).

The doctrine of nonobviousness is the cornerstone of American patent law.  I was reminded today by Phil Swain that our nonobviousness statute, section 103(a) of the Patent Act, was drafted by Judge Giles Rich.  Judge Rich is the most celebrated patent judge of this century.  His statutory masterpiece eliminated the amorphous concept of a “flash of genius” and replaced it with our now ubiquitous objective standard of a person having ordinary skill in the art.  In Graham v. John Deere, the Supreme Court reinforced 103(a) with its concept of case-by-case consideration of secondary indicia of nonobviousness as a way to avoid potential hindsight bias. 

Later, as the Federal Circuit developed its own patent jurisprudence, the court hit upon the teaching-suggestion-motivation test as another anti-hindsight rule.  That test requires evidence of some reason to combine various references that each teach part of an invention.  Thus, if there is no evidenced reason to combine the references, then the invention will be deemed nonobvious. The test, known by acronymists as “TSM,” has been labeled as a poster-child for bad patent behavior.  According to opponents of the test, the bright-line test makes patents too easy to obtain — resulting in a glut of patents covering trivial improvements. Those patents, in turn, hold-up industry research and greatly increase transaction costs and legal fees. 

In KSR v. Teleflex, the Supreme Court is questioning whether the TSM test should exist as the sole determinant of obviousness.  Question presented:

Whether the Federal Circuit has erred in holding that a claimed invention cannot be held ‘obvious’, and thus unpatentable under 35 U.S.C. § 103(a), in the absence of some proven “‘teaching, suggestion, or motivation’ that would have led a person of ordinary skill in the art to combine the relevant prior art teachings in the manner claimed.”

Until a few months ago, the common myth of the TSM test was that it required at least some hard evidence that provided at least a minimal reason to combine various prior art references.  It is that myth that provided the impetus for Supreme Court review. In recent months, however, we have learned that the CAFC’s version of the test allows for evidence that is implicit, based on common knowledge, found generally in the prior art as a whole, based simply on the nature of the problem or simple logic, or concluded by experts. See Kahn, Dystar, Ormco, Alza.  This jitterbug by the CAFC actually gives KSR much of what it wanted and smears the edges of the mythical bright-line rule.  Justice Scalia picked up on transition during oral arguments — noting that the recent cases leave the test “meaningless. [The CAFC] essentially said ‘our test simply reduces to what [KSR seeks] in this litigation.’ . . . this is gobbledygook. It really is, it’s irrational.” Justice Alito had a similar concern with the “new” TSM test:

J. Alito: “But what is the difference between asking whether something is implicit in the, in the prior art and simply asking whether it would have been obvious to a person of ordinary skill in the art?:

As discussed earlier on Patently-O, all the major patent bar associations filed briefs that support the current TSM test.  In a brilliant move, KSR neutralized those briefs by implying bias based on “the enormous fees that litigation of invalid patent claims can generate.” KSR Reply Brf. CJ Roberts appeared to buy-in to that analysis, joking that the filings “just indicate[] that this is profitable for the patent bar.” KSR Oral Arg.

One concern of the Court is whether modification of the obviousness doctrine would spoil long-settled rights.  The Justices, however, mentioned on several occasions that over the past year, the CAFC may have already upset any settled rights.

Mr Goldstein [for Teleflex]: “[The CAFC has had decades to look at this to try and elaborate a standard.”
J Breyer: “And it so quickly modified itself.”

Decision in February: Reports from the hearing noted that Justice who used the term “TSM” spoke with disdain and were highly critical of the test.  Although oral arguments are always full of counterfactuals and wild theory testing, the level of criticism supports the conventional wisdom that the TSM test is likely to be eliminated as “the exclusive” test.  Cases will rather be decided on a case-by-case basis using the standards of Graham v. John Deere. Already issued patents will still be given a presumption of validity, although it will be difficult for some courts to do this with a straight face.  The new key to avoiding invalidity will be secondary indicia of nonobviousness. Look for a 9–0 decision in early February.

TSM is not Dead: Much of the oral argument was filled with an attempt to simply understand the TSM test, and to figure out what is meant by a “motivation.”  If they cannot figure-out the test, they would likely completely trash-it as unworkable. Of course, by the time the opinion is penned, they will understand the current test and the test will not be scrapped as a whole. Rather, they will follow the Government’s suggestion that TSM continue to be used as a “valid means of proving obviousness.” In addition, however, flexibility will be added to allow for other ways of determining nonobviousness.

Here are some quotes from oral arguments:

CJ Roberts: “[T]the Federal Circuit’s approach focuses . . . on prior art — as opposed to, I would say, common sense.” 

J Scalia: “And in the last year or so, after we granted cert in this case after these decades of thinking about [the obviousness doctrine, the CAFC] suddenly decides to polish it up.”

J. Breyer: “I’ve read it about 15 or 20 times now, I just don’t understand what is meant by the term ‘motivation.’”

Mr. Hungar [for US Gov’t]: “Construed as the sole means of proving obviousness the teaching suggestion motivation test is contrary to the Patent Act, irreconcilable with this Court's precedents and bad policy. It asks the wrong question and in cases like this one, it produces the wrong answer. It should be rejected and the judgment of the Court of Appeals should be reversed. . . . It’s just foreign to this Court’s precedents as a mandatory prerequisite for obviousness.”

Mr. Dabney [for KSR]: “[T]here is no legal regime that is a greater generator of patent litigation than the teaching suggestion motivation test that is urged by the respondent.” [DDC: Is this true?].

Documents and Links:

• Oral Argument Transcript;
• Commentary from the Gallery on the Oral Arguments:
• Zura;
• Armstrong;
• Miller;
• Kerr;
• ScotusBlog (Run by Teleflex’s Counsel)
• Gordon Smith;
• Patent Baristas;
• LawFont;
• Hawk;
• Brooks;
• Leo Stoller;
• Ebert;
• Law School Innovation;
• DragonFly
• KSR Shifts Obviousness Debate to "Mere Aggregations" and Presumptions of Non-Obviousness;
• Discussion of Response Briefs;
• Discussion of Petitioner and Supporting Amici’s Briefs on the Merits;
• Discussion of Government's Brief in Support of Certiorari;
• Discussion of Microsoft’s Amicus Brief;
• Discussion of the CAFC decision;
• Discussion of Law Professors Brief;
• Discussion of In re Kahn;
• Discussion of Petition for Certiorari;
• Prediction Certiorari;
• Professor Wagner and Strandburg debate obviousness in Penn’s new online law reivew:PENNumbra;
• Prof Miller: KSR Lift-off!
• Prof Miller: Discussion of Gov’t Brief;
• Patent Hawk: Becoming Less Obvious;
• Patent Hawk: Hindsight Problem;
• Buchanan: "[O]nce again, patent reform has left the Capitol and walked across First Street to the Supreme Court." [Link];
• Petherbridge & Wagner Empirical Article [link]
• Cotropia Article: [link].
• Shane Popp Article on Section 103 background [link]
• Mark Smith, a student at Santa Clara Law has these three posts in SCU’s great new Tech Law Forum:
  • http://www.techlawforum.net/blogs/a-precursor-to-obviousness/
  • http://www.techlawforum.net/blogs/per-se-or-not-per-se/
  • http://www.techlawforum.net/blogs/hey-teacher-leave-our-test-alone/
• The Patent at issue: [link] [link]

Cite as Dennis Crouch, “KSR Gobbledygook,” Patently-O, available at http://www.patentlyo.com.

Are Design Patents Worthless? Preliminary Injunction Vacated

PHG Tech v. St. John (Fed. Cir. 2006).

PHG’s design patents cover ornamental designs for medical label sheets.  PHG sued St. John’s for infringement and was awarded a preliminary injunction based on the court’s belief that PHG had a reasonable likelihood of success on the merits.

St. John’s appealed the preliminary injunction (PI) to the Court of Appeals for the Federal Circuit (CAFC).

The CAFC reviews a PI grant for abuse of discretion, and only vacates a PI when there is “clear error.”  In general, however, a PI should only issue after weighing "(1) the likelihood of the patentee’s success on the merits; (2) irreparable harm if the injunction is not granted; (3) the balance of hardships between the parties; and (4) the public interest."

The first factor is a deal-breaker — if the plaintiff does not show a likelihood of eventually succeeding in the case then a PI should not be awarded. Here, St. John’s argued only the first factor based on its argument that PHG’s patents impermissibly cover designs that are primarily functional. 

Functionality in design cases is a tricky beast. 35 USC 171 requires that a design be “ornamental,” and this has been interpreted to exclude designs that are “primarily functional rather than ornamental.”  Of course, every design has some function . . . One way that the court gets at functionality is to see whether there are equally useful alternative designs.  If an alternative design would reduce the utility, then it is “not truly an alternative.”

In this case, the lower court found that there were “a multitude of alternative designs,” but the lower court did not make specific findings as to whether or not those alternative designs altered the utility. St. John’s did, however present expert testimony that the “alternative” designs were not as useful. On appeal, the CAFC was swayed by St. John’s expert and found “clear error” because the lower court (1) did not make any “explicit findings” regarding utility of the alternatives and (2) failed to even mention St. John’s expert report.

“The evidence presented by St. John, in our view, was sufficient to raise a substantial question of invalidity.”  Preliminary Injunction Vacated.

 

In Fractured Decision, CAFC Refuses to Reexamine De Novo Claim Construction

Amgen v. HMR (CAFC en banc denial)

Cybor is the much reviled CAFC decision holding that the construction of patent claim language is a question of law that is reviewed de novo — without any regard to the lower court’s reasoning or ruling.  The Cybor rule is believed by many to have dramatically increased uncertainty in patent litigation as well as likelihood of appeal.  Importantly, the associated reversal rate also demoralizes district court judges who already often struggle with the technical and legal complexity of patent cases.

In Amgen, the appellate panel reviewed construction of the term “therapeutically effective amount” of erythropoietin and, in the process illustrated how Cybor gives the court a “capacity for arriving at its own idiosyncratic construction.” (Quoting Prof. Kevin Noonan). Here, the CAFC panel reversed the lower court’s construction based on its interpretation of the specification. 

HMR’s request for rehearing en banc has been denied, but a contingent of six separate dissenting and concurring opinions show the internal conflict.

Chief Judge Michel, who also dissented from the original panel decision, led the charge against Cybor. “I have come to believe that reconsideration is appropriate and revision may be advisable.”  CJ Michel, who was joined in the opinion by J Rader, cited four practical reasons for eliminating de novo review:

1. High reversal rate;
2. Lack of predictability of outcomes — something that decreases settlement and frustrates lower courts;
3. The disregard of time spent by district court judges in understanding the evidence and patent information;
4. The mind-numbing minutia of claim construction decisions faced by the court in “nearly every patent case.”

Claim construction, although similar to statutory construction is different for many reasons and is intertwined with facts that make the foundation for de novo review questionable. The arguments of CJ Michel are further highlighted by Judge Newman’s dissent.

J Newman focuses on how scientific and technological evidence serve as the backdrop for any claim construction and how claim construction should focus on the invention rather than following formalistic requirements that trip over every statement in a patent application. Finally, Newman argues that a Daubert framework is more appropriate for claim construction.

The Federal Circuit's position that patent interpretation requires more rigorous appellate review than other fact/law issues has not well withstood the test of experience. It is time to reopen the question and to rethink, en banc, the optimum approach to accuracy, consistency, and predictability in the resolution of patent disputes, with due attention to judicial structure, litigants' needs, and the national interest in invention and innovation. (Newman dissenting).

Judge Rader agreed with both CJ Michel and J Newman, but filed his own opinion. Rader gave some legal basis for reviewing Cybor — noting the Supreme Court’s opinion that claim construction "falls somewhere between a pristine legal standard and a simple historical fact." (Markman). Rader maintained his long-standing position that district courts should be given deference because they are better versed in the facts and the issues.

“Trial judges can spend hundreds of hours reading and rereading all kinds of source material, receiving tutorials on technology from leading scientists, formally questioning technical experts and testing their understanding against that of various experts, examining on site the operation of the principles of the claimed invention, and deliberating over the meaning of the claim language. If district judges are not satisfied with the proofs proffered by the parties, they are not bound to a prepared record but may compel additional presentations or even employ their own court-appointed expert." (Rader dissenting in Cybor).

Judge Moore: In what appears to be her first patent opinion, New CAFC Judge Moore also set her target on Cybor — stating that the court should “reconsider its position on deference.” 

Judges Gajarsa, Linn, and Dyk all concurred with the decision not to rehear this particular case, but noted that “In an appropriate case we would be willing to reconsider limited aspects of the Cybor decision.”  In particular, those three judges appear to believe that de novo is still appropriate when the intrinsic evidence (written description and prosecution history) on its face resolves “the question of claim interpretation.”

SUPREME COURT NEXT: This leaves us in the situation where at least eight of the twelve Federal Circuit judges believe that Cybor should be revisited if an “appropriate case” arises. This fractured decision is also ripe for Supreme Court review, and along with the Tamoxifen antitrust cases, are the two most likely to be granted certiorari in 2007.

Details: Judges Michel, Newman, Rader, Mayer, and Moore have all bluntly criticized Cybor. Judges Gajarsa, Linn, and Dyk have a more limited criticism.

Documents:

• AMGEN EN BANC DENIED
• Amgen v. HMR (CAFC Decision)

Obviousness: Skill in the Art Avoids Death Ray

Optivus and Loma Linda v. Ion Beam Apps. (Fed. Cir. 2006).

Focused proton beam therapy offers real promise to cancer victims. Optivus and Loma Linda control rights to several relevant patents including a multi-room proton therapy apparatus. The pair sued IBA for patent infringement as well as various business torts (unfair competition) based on IBA’s marketing of its devices without FDA approval.

The district court granted summary judgment in the defendant IBA’s favor on invalidity, noninfringement, and unfair competition. Optivus and Loma Linda appealed.

Appellate Practice Waiver of Arguments: In their opening brief, appellants argued a lack of motivation to combine various pieces of prior art, but did not raise an argument as to whether the prior art contained all of the claim elements.  They then attempted to raise that issue in their reply brief. The CAFC, however, dismissed that issue as a matter of procedure — holding that the argument was “waived because it was not raised in Loma Linda’s opening brief.”

Death Ray: On motivation to combine prior art, Loma Linda argued that modifying a UW Neutron therapy center by sending protons to the patient would create a “death ray” that would kill the patient. After defining “skill in the art” as familiarity with particle beam technology uses in medical treatment, the CAFC dismissed this “teaching-away” because our PHOSITA would know to turn down the intensity. 

Unfair Competition: Marketing Non-Approved Device: The CAFC reversed the dismissal of the California unfair competition claims — holding that California law provides a right of action on unfair competition even where the claim is based on violation of a law and the law does not provide for a private right of action. 

Doctrine of Equivalents, Avoiding the Tronzo-Trap

Depuy Spine v. Medtronic (Fed. Cir. 2006).

Medtronic won summary judgment of non-infringement for its Vertex spinal implants, but the jury found that its MAS spinal screws were infringing. Both sides appealed, and we discuss two issues here:

Claim Construction:  Depuy tried to get the CAFC to buy into its argument that a the conical wall of the Vertex model was also a spherical wall.  Although impressed with its novel argument, the CAFC did not bite at the elementary calculus or basketball analogy showing how, at the limit, cones and spheres are virtually indistinguishable.

Doctrine of Equivalents and Vitiation: This case seems right-on-point with Tronzo, and the patentee learned the appropriate lesson. In Tronzo, the theory of equivalence would have allowed any shape to be equivalent to “generally conical.”  Here, however, the patentee argued that there was a special nexus between the claimed spherical shape and the alleged equivalent conical shape. The tailored argument made the difference, and the CAFC agreed that equivalents could apply without vitiating the term. The CAFC also found it important to the DOE analysis that the patent does not label other shapes as either prior art or inferior. [Practice Tip…].

• Read the Decision
• Tom Fairhall Discusses the Specific Exclusion Principle in Patently-O

KSR Shifts Obviousness Debate to "Mere Aggregations" and Presumptions of Non-Obviousness

KSR v. Teleflex (Supreme Court 2006).

Section 103 of the Patent Act focuses on “differences between the subject matter sought to be patented and the prior art.”  In the 1976 Sakraida case, the Supreme Court held that simply aggregating old elements together does not pass the patentability test if the elements are each performing the same functions that they were already known to perform.

The “mere aggregation” test of Sakraida, however, has not been followed by the Court of Appeals for the Federal Circuit (CAFC). Instead, the CAFC’s approach has allowed mere aggregations to be patented so long as there is no evidence suggesting that the elements be combined.

The pending case of KSR v. Teleflex squarely addresses this debate. KSR recently filed reply brief closes the written arguments in this landmark case, and oral arguments are scheduled for November 28, 2006.

KSR’s attorneys, including GWU Professor John Duffy, argue strongly that 103(a) has been wrongly interpreted as merely a way to challenge patentability rather than a “condition of patentability” as the section is titled. Under the current suggestion test, claims “cannot be held invalid . . . no matter how trivial might be the differences” from the prior art unless evidence suggesting the difference is found in the art.  As noted by Hal Wegner, the Court’s reaction to this argument could shift the strong presumptions of non-obviousness.

KSR has gone beyond its attack on the Federal Circuit suggestion/teaching/motivation test and raised as a further issue the point that it should win under a preponderance of the evidence standard for challenging patent validity.

In the process, KSR takes a shot at the AIPLA’s “balanced” position.

It is by no means clear why patent bar groups would have a systematic interest in a “balanced” standard of patentability, in view of the enormous fees that litigation of invalid patent claims can generate.

Briefs and Documents:

• On the Merits
  • In Support of Petitioner
    • Petitioner's Brief on the Merits;
    • Petitioner's Reply Brief on the Merits;
    • Government's Brief in Support of Petitioner;
    • Law and History Professors (Sarnoff) in Support of Petitioner;
    • Law Professor (Strandburg) in Support of Petitioner;
    • Electronic Frontier Foundation in Support of Petitioner;
    • Judge Colianni in Support of Petitioner;
    • Intel and Micron in Support of Petitioner;
    • Progress and Freedom Foundation in Support of Petitioner;
    • Cisco and GM in Support of Reversal (Petitioner);
    • CCIA in Support of Petitioner;
    • Business Software Alliance in Support of Petitioner;
    • Time Warner, IAC, and VIACOM in Support of Petitioner;
    • AARP.
  • In Support of Neither Party
    • IBM in Support of Neither Party;
    • Ford & DaimlerChrysler in Support of Neither Party;
    • DC Bar Assn (Eccelston);
    • Professor Hollaar.
  • In Support of Respondent
    • Respondent’s Brief on the Merits;
    • Intellectual Property Owners in Support of Respondent;
    • AIPLA in Support of Respondent;
    • ABA in Support of Respondent;
    • Automotive Suppliers in Support of Respondent;
    • Big Innovative Companies (3M, et. al) in Support of Respondent;
    • Technology Properties Limited in Support of Respondents;
    • United Inventors Association in Support of Respondent;
    • Intellectual Ventures and other Small Companies with Large Patent Portfolios in Support of Respondent;
    • Law Professors in Support of Respondent;
    • Professor Tom Field (Franklin Pierce) in Support of Respondent;
    • IPLAC in Support of Respondent;
    • Harold Milton (attorney who drafted the claims in the Teleflex patent) in Support of Respondent;
    • Tessera, Qualcomm, and Amberwave in Support of Respondent;
    • Science Professors in Support of Respondent;
    • Lee Thomason in Support of Respondent.
    • [Briefs also available at SCOTUS BLOG]
• Petitions Stage
  • Party Briefs
    • KSR’s Petition for Cert (Including the CAFC and District Court decisions in Appx. A & B);
    • Teleflex’s Brief in Opposition;
    • KSR Reply Brief (314 KB);
    • Teleflex Supplement.
  • Amici
    • Government in support of petition;
    • 24 Law Professors in support of petition;
    • Progress Freedom Foundation in support of petition;
    • Microsoft, Cisco, Hallmark, et al. in support of petition.

Links:

• Discussion of Response Briefs;
• Discussion of Petitioner and Supporting Amici’s Briefs on the Merits;
• Discussion of Government's Brief in Support of Certiorari;
• Discussion of Microsoft’s Amicus Brief;
• Discussion of the CAFC decision;
• Discussion of Law Professors Brief;
• Discussion of In re Kahn;
• Discussion of Petition for Certiorari;
• Prediction Certiorari;
• Professor Wagner and Strandburg debate obviousness in Penn’s new online law reivew:PENNumbra;
• Prof Miller: KSR Lift-off!
• Prof Miller: Discussion of Gov’t Brief;
• Patent Hawk: Becoming Less Obvious;
• Patent Hawk: Hindsight Problem;
• Buchanan: "[O]nce again, patent reform has left the Capitol and walked across First Street to the Supreme Court." [Link];
• Petherbridge & Wagner Empirical Article [link]
• Cotropia Article: [link].
• Shane Popp Article on Section 103 background [link]
• Mark Smith, a student at Santa Clara Law has these three posts in SCU’s great new Tech Law Forum:
• http://www.techlawforum.net/blogs/a-precursor-to-obviousness/
• http://www.techlawforum.net/blogs/per-se-or-not-per-se/
• http://www.techlawforum.net/blogs/hey-teacher-leave-our-test-alone/
• The Patent at issue: [link]

Cite as Dennis Crouch, “KSR Shifts Obviousness Debate to ‘Mere Aggregations,’ Patently-O, available at http://www.patentlyo.com.

On the Merits

In Support of Petitioner

Petitioner's Brief on the Merits;

Petitioner's Reply Brief on the Merits;

Government's Brief in Support of Petitioner;

Law and History Professors (Sarnoff) in Support of Petitioner;

Law Professor (Strandburg) in Support of Petitioner;

Electronic Frontier Foundation in Support of Petitioner;

Judge Colianni in Support of Petitioner;

Intel and Micron in Support of Petitioner;

Progress and Freedom Foundation in Support of Petitioner;

Cisco and GM in Support of Reversal (Petitioner);

CCIA in Support of Petitioner;

Business Software Alliance in Support of Petitioner;

Time Warner, IAC, and VIACOM in Support of Petitioner;

AARP.

In Support of Neither Party

IBM in Support of Neither Party;

Ford & DaimlerChrysler in Support of Neither Party;

DC Bar Assn (Eccelston);

Professor Hollaar.

In Support of Respondent

Respondent’s Brief on the Merits;

Intellectual Property Owners in Support of Respondent;

AIPLA in Support of Respondent;

ABA in Support of Respondent;

Automotive Suppliers in Support of Respondent;

Big Innovative Companies (3M, et. al) in Support of Respondent;

Technology Properties Limited in Support of Respondents;

United Inventors Association in Support of Respondent;

Intellectual Ventures and other Small Companies with Large Patent Portfolios in Support of Respondent;

Law Professors in Support of Respondent;

Professor Tom Field (Franklin Pierce) in Support of Respondent;

IPLAC in Support of Respondent;

Harold Milton (attorney who drafted the claims in the Teleflex patent) in Support of Respondent;

Tessera, Qualcomm, and Amberwave in Support of Respondent;

Science Professors in Support of Respondent;

Lee Thomason in Support of Respondent.

[Briefs also available at SCOTUS BLOG]

Petitions Stage

Pharmaceutical Patent Doctrine of Equivalents Survives Challenge

Abraxis (AstraZeneca) v. Mayne (Fed. Cir. 2006).

Mayne attempted to around Abrxis’s anesthetic formulation patent covering DIPRIVAN. The district court, however, found that Mayne’s product still infringed, both directly and under the doctrine of equivalents, despite its replacement of EDTA (“edetate”) with DTPA. 

On appeal, the CAFC reversed the direct infringement based on claim construction, but agreed that there was infringement under the DOE.

Infringement under the doctrine of equivalents is reviewed for clear error.  To infringe under the DOE, the accused device must perform “substantially the same function in substantially the same way to obtain the same result” as the patented invention.

During the design-around, the defendant had attempted to identically match the characteristics and stability function of the Abraxis product.  They eventually chose the DTPA replacement because it is “structurally similar to edetate, [and therefore] product stability is predicted to be unaffected."

Even so, the defendant argued under the modern DOE exclusion principle that the patentee’s use of the “restrictive term edetate,” rather than a more generic term, precluded extension of equivalents coverage as a matter of law. The CAFC disagreed, finding that equivalents could be asserted because the inventors “did not clearly disavow” broader coverage.

There is no evidence that the patentees made a clear and unmistakable surrender of other polyaminocarboxylates, or calcium trisodium DTPA in particular, during prosecution.

Furthermore, because the use of DTPA was admittedly unforeseeable, it is proper to extend DOE.

The defendant also asserted that DOE should not be extended to cover DTPA because Mayne was able to obtain a patent to cover that modification. The CAFC did not buy that argument either. As noted above, the patent shows that the equivalent was unforeseeable at the time of the invention (weighing in favor of DOE).  In addition, the district court’s fact finding of “substantial evidence of equivalence” withstood CAFC scrutiny.

 

Claim Term Limited to "Scoop of the Invention"

Akeva v. Adidas (Fed. Cir. 2006, NON-PRECEDENTIAL)

Akeva's patent covers shoes with a rear sole "secured" to the heel of the shoe.  The patent is clear that the rear sole may be detachable or rotatable.  In order to capture Adidas's activity, Akeva also argued that "secured" could mean permanently secured.  The court disagreed with that claim construction based on the language of the specification:

the language of the '471 specification specifically states that the invention of the '471 patent is an athletic shoe with a detachable heel: "However, in a radical departure from conventional shoes, the shoe of the present invention incorporates a heel structure, including a detachable rear sole, that significantly alleviates heel wear problems associated with conventional soles and provides enhanced cushioning and/or spring.".

Once again describing the "present invention" resulted in the specification serving to limit the scope of the claim terms.  The truth is, however, the seeming requirement of a detachable sole pervades the patent and, in CAFC terminology, was "the scoop of the invention."  The "field of the invention," for instance, was written "as athletic shoes with interchangeable/detachable rear soles."

As could be expected, the boilerplate language at the end of the specification was deemed worthless even though the language asserts that the specification is not limiting in any way.

The court did find this case distinguishable from others because the detachable sole is "not one of several features, it is the primary feature of the invention." 

New Appreciation of Composition's Properties are Not Patentable

Abbott Labs. v. Baxter Pharm. (Fed. Cir. 2006).

Way-back-when, Abbott went through a recall of its inhalation anesthetic sevoflurane because of excess Lewis acid buildup.  Abbott’s scientists figured-out that mixing water in the solution would bind an deactivate Lewis acids, and stabilize the product. Abbott changed its product and also obtained patent protection.

When Baxter filed its Abbreviated New Drug Application (ANDA) to begin selling its version of a sevoflurane inhaler, Abbott sued for infringement.  After a bench trial, the patent was found valid, but not infringed.  Abbott appealed.

The CAFC pointed its laser vision on the question of validity.  A prior reference had indicated that water could be combined with sevoflurane, but had not realized that the composition would work to prevent the acid buildup. Framed in this manner, the prior-art was found to be anticipatory:

Our cases have consistently held that a reference may anticipate even when the relevant properties of the thing disclosed were not appreciated at the time.

The CAFC went-on to find that a claim directed to the newly discovered property of the prior art cannot support a patent because it is inherently disclosed by the art.

This rule holds equally well to process claims:

an inventor may not obtain a patent on a process having the same steps as a prior art process, in which the new process merely identifies a new, advantageous property of the prior art process.

Reversed on validity.

Parallel Finding of Invalidity Did Not Relieve Licensee's Pressure to Pay Royalties for Urinary Catheter Patent

Go Medical v. Inmed (Fed. Cir. 2006).

Go Medical owns a patent on a urinary catheter with a specialized sheath designed to reduce the chance of bacterial contamination. The parties entered into a long-term licensing contract and the defendant began manufacturing and selling the device.  In another lawsuit, Go’s patent was found invalid, but that finding was later reversed on appeal.  Several months after the invalidity finding (but before its reversal), the defendant stopped paying royalties — placing them in escrow. Go eventually sued for infringement, but the patent was found invalid. (invalidity affirmed on appeal).

The defendant then asked for some of its money back — arguing that the it should not have to pay for the licensing of an invalid patent. Under Kohle, however, a licensee is liable for contract damages up to the date “the licensee first challenges the validity of the patent.”

In other words, a licensee "cannot invoke the protection of the Lear doctrine until it (i) actually ceases payment of royalties, and (ii) provides notice to the licensor that the reason for ceasing payment of royalties is because it has deemed the relevant claims to be invalid."

Thus, according to the CAFC, the original invalidity finding did not relieve the defendant of its responsibilities to continue to pay its license fees. Further, the defendant’s movement of payments to escrow was not sufficient to avoid license fees because the defendant did not explicitly state that it was “ceasing payments [because it deemed the] patent to be invalid.”  Merely placing royalty payments in escrow “until the validity of the patent was resolved on appeal” is insufficient to relieve a licensee from license payments.

Notes:

• Zura discusses the best mode issues here. 

Arbitration: Incorporation of AAA rules in license creates clear and unmistakable intent to arbitrate

Qualcomm v. Nokia (Fed. Cir. 2006).

A 2001 license agreement between Nokia and Qualcomm includes an arbitration clause.  The agreement apparently does not cover all of Nokia’s products, and in 2005, and Qualcomm sued Nokia for patent infringement. The parties disputed whether the arbitration clause should apply here. Writing for a two-judge majority, Judge Prost explained that the parties “clearly and unmistakably” intended that the patent questions be arbitrated instead of a court as evidenced by the agreement’s incorporation of the AAA rules.

On remand, the district court will send the dispute to arbitration unless the arguments supporting arbitrability of the issues would be “wholly groundless.”

Notes:

• Read the Opinion
• One-line dissent by Newman

E.D. Tex.: Halliburton's Fragile Gel Patent Found Indefinite

Halliburton v. M-I LLC (E.D. Tex., Oct 18, 2006).

Halliburton decided to take advantage of the E.D. Texas patent excitement and sued M-I for infringing its patents directed to a method of drilling a borehole without losing “fragile gel” drilling fluid. 

On motion, the district court granted summary judgment of invalidity based on indefiniteness. In particular, the court could not find any way to give meaning to the claim term “fragile gel.”

Datamize makes clear that adequate support in the specification can make a purely subjective claim term definite. However, when, as here, the specification provides only a subjective definition for a subjective claim term, there is no "objective anchor" by which skilled artisans can identify the bounds of the claims.

Notes:

• Michael Smith’s Blog Notes

KSR v. Teleflex: In Support of the Status Quo

 KSR v. Teleflex (Supreme Court 2006).

By Dennis Crouch [dcrouch@gmail.com]

Background: Teleflex and its supporters have now filed their briefs in defense of the Federal Circuit’s methodology for determining whether a patent is “obvious.” [Copies of briefs are provided below]. The doctrine of nonobviousness is fundamental to our patent system.  In order to be eligible for a patent an invention must be both novel and non-obvious.  Novelty is generally narrowly applied to cases where the invention is identical to something already in the public domain.  Obviousness, however, is a more difficult beast and is intended to ensure that patent rights are only granted to inventions that move us a significant distance past the prior art. 

Obviousness has always been a “squishy” term, but over the past twenty-five years, the Court of Appeals for the Federal Circuit has developed a somewhat objective nonobviousness doctrine using a teaching/suggestion/motivation (TSM) test. According to the test, when various pieces of prior art each contain elements of an invention, the prior art can be combined together to invalidate a patent on the invention only when there is some motivation, suggestion, or teaching to combine the prior art. One problem with any obviousness test is hindsight bias. It is all-to-easy to look-back and assert that an invention would have been obvious. One purpose of the objective TSM test is to avoid this type of hindsight bias.

KSR has asked the Supreme Court to rethink that approach and take a fresh look at the obviousness standard for patentability. The petition questions whether obviousness should require any proof of some suggestion or motivation to combine prior art references.

Question Presented: Whether the Federal Circuit erred in holding that a claimed invention cannot be held "obvious," and thus unpatentable under 35 U.S.C. sec. 103(a), in the absence of some proven "'teaching, suggestion or motivation' that would have led a person of ordinary skill in the art to combine the relevant prior art teachings in the manner claimed"?

Interestingly, the Supreme Court has not heard an obviousness since well before the founding of the Federal Circuit. In that case (Sakraida 1976), the Court held that a combination which only unites old elements with no change in their respective functions is precluded from patentability under 103(a).  Under the Sakraida standard, the Teleflex patent is arguably obvious.  In an article several years ago, Professor John Duffy identified this obviousness issue as one that should attract the Supreme Court’s attention.

[The Federal Circuit’s suggestion] test, which tends to make even seemingly trivial developments patentable, is entirely the Federal Circuit’s product.  It has no basis in the Supreme Court’s case law and may, in fact, be inconsistent with the Court’s most recent pronouncement on the subject (though that precedent is now more than a quarter century old).

Duffy, The Festo Decision and the Return of the Supreme Court to the Bar of Patents, 2002 S.Ct. Rev. 273, 340-41 (2003).  Now, Duffy, a former clerk of Justice Scalia, is part of the KSR team that is trying to change the rule of law. The KSR case itself concerns a patent covering a gas pedal for an automobile. KSR makes pedals for GM & Chevy trucks and was sued for infringement of the Teleflex patent.

A discussion of briefs in support of the petitioner are found here: Discussion of Breifs Supporting Petitioner.

What follows is a discussion of briefs in support of the respondent: (i.e., in support of the status quo).

Respondent Teleflex: Brief on the Merits

Settled Law: Respondent begins with a compelling exposition on the power of stare decisis. “Millions of patents” have issued based on the suggestion test, and modifying that test would in Hal Wegner’s words, “threaten the validity of literally hundreds of thousands of existing patents still in force.”

Non-Rigid Test: Respondent defines the suggestion test as a “flexible [test that] looks to any available indication that a practitioner in the art would have had some reason to select the elements of the invention from among the prior art and combine them in the manner claimed by the invention.”

 KSR v. Teleflex (Supreme Court 2006).

By Dennis Crouch [dcrouch@gmail.com]

By Dennis Crouch [dcrouch@gmail.com]

Background: Teleflex and its supporters have now filed their briefs in defense of the Federal Circuit’s methodology for determining whether a patent is “obvious.” [Copies of briefs are provided below]. The doctrine of nonobviousness is fundamental to our patent system.  In order to be eligible for a patent an invention must be both novel and non-obvious.  Novelty is generally narrowly applied to cases where the invention is identical to something already in the public domain.  Obviousness, however, is a more difficult beast and is intended to ensure that patent rights are only granted to inventions that move us a significant distance past the prior art. 

Obviousness has always been a “squishy” term, but over the past twenty-five years, the Court of Appeals for the Federal Circuit has developed a somewhat objective nonobviousness doctrine using a teaching/suggestion/motivation (TSM) test. According to the test, when various pieces of prior art each contain elements of an invention, the prior art can be combined together to invalidate a patent on the invention only when there is some motivation, suggestion, or teaching to combine the prior art. One problem with any obviousness test is hindsight bias. It is all-to-easy to look-back and assert that an invention would have been obvious. One purpose of the objective TSM test is to avoid this type of hindsight bias.

KSR has asked the Supreme Court to rethink that approach and take a fresh look at the obviousness standard for patentability. The petition questions whether obviousness should require any proof of some suggestion or motivation to combine prior art references.

Question Presented: Whether the Federal Circuit erred in holding that a claimed invention cannot be held "obvious," and thus unpatentable under 35 U.S.C. sec. 103(a), in the absence of some proven "'teaching, suggestion or motivation' that would have led a person of ordinary skill in the art to combine the relevant prior art teachings in the manner claimed"?

Interestingly, the Supreme Court has not heard an obviousness since well before the founding of the Federal Circuit. In that case (Sakraida 1976), the Court held that a combination which only unites old elements with no change in their respective functions is precluded from patentability under 103(a).  Under the Sakraida standard, the Teleflex patent is arguably obvious.  In an article several years ago, Professor John Duffy identified this obviousness issue as one that should attract the Supreme Court’s attention.

[The Federal Circuit’s suggestion] test, which tends to make even seemingly trivial developments patentable, is entirely the Federal Circuit’s product.  It has no basis in the Supreme Court’s case law and may, in fact, be inconsistent with the Court’s most recent pronouncement on the subject (though that precedent is now more than a quarter century old).

Duffy, The Festo Decision and the Return of the Supreme Court to the Bar of Patents, 2002 S.Ct. Rev. 273, 340-41 (2003).  Now, Duffy, a former clerk of Justice Scalia, is part of the KSR team that is trying to change the rule of law. The KSR case itself concerns a patent covering a gas pedal for an automobile. KSR makes pedals for GM & Chevy trucks and was sued for infringement of the Teleflex patent.

A discussion of briefs in support of the petitioner are found here: Discussion of Breifs Supporting Petitioner.

What follows is a discussion of briefs in support of the respondent: (i.e., in support of the status quo).

Respondent Teleflex: Brief on the Merits

Settled Law: Respondent begins with a compelling exposition on the power of stare decisis. “Millions of patents” have issued based on the suggestion test, and modifying that test would in Hal Wegner’s words, “threaten the validity of literally hundreds of thousands of existing patents still in force.”

Non-Rigid Test: Respondent defines the suggestion test as a “flexible [test that] looks to any available indication that a practitioner in the art would have had some reason to select the elements of the invention from among the prior art and combine them in the manner claimed by the invention.”