February 2005

Phillips v. AWH: Review of Oral Arguments on Claim Construction Methodology

Patent, Patent Cases 2005,

baffle

Today, the Federal Circuit held oral arguments in Phillips v. AWH. Over 250 people attended the arguments and over 30 briefs were filed in the appeal. It was expected that this case would weigh in heavily on policy issues concerning claim construction.  Surprisingly, however, the court did not ask any questions regarding the use of prosecution history, prior art, or expert testimony for claim construction.  Likewise, there was very little discussion of the use of competing dictionaries, such as the use of technical dictionaries versus general dictionaries.

However, the court did delve into the dictionary/specification dichotomy.  A major concern that the court had was in the are of express versus implied limitations in the specification.  Specifically, should claims be limited by a contextually implied definition of a term? Although not briefed by the parties, Judges Rader and Mayer were interested pursuing the idea of giving deference to district court decisions on claim construction.

In my point of view, this case is not about whether or not a dictionary is used prior to the specification.  What matters here is giving a framework to district court judges so that their opinions will not be overruled so often.  Others have made the argument, however, that even with a clear decision framework, the Federal Circuit will continue to reverse because the CAFC judges see themselves as often being in a better position to determine claim language — reasons: (i) the CAFC handles technology issues all the time and they are not going to close their eyes to areas of technology that they see everyday and (ii) the CAFC focuses on patent law, and thus should have less deference.  Interestingly, although none of the briefs suggested it, the PTO’s solicitor John Whealan was asked about his position that patent examiners do not rely on dictionaries.

My Predicted Outcome: (but don’t rely on it). 

  • The new rule will be: Even when the specification does not explicitly define a term, the court should interpret claims in the context of the specification and rely on dictionaries and other sources when the district court judge needs more clarity. Thus, dictionaries will receive a lower emphasis.
  • The CAFC is going to do the best it can to provide a framework for district court decisions, but I’m not convinced they will find a solution without broaching the issue of deference.
  • Even though everyone wants some deference given to lower courts on claim construction, this issue will not be decided in this opinion.

Claim construction is at issue in almost every patent infringement lawsuit.  This case will likely change the structure of arguments over claim construction at the district court.

Notes:

Olympia Group v. Alltrade: Preliminary Injunction Denied — Plaintiff did not show likelihood of infringement

Patent, Patent Cases 2005

Gorilla Bar

Olympia v. Alltrade (Fed. Cir. 2005).

Olympia makes the Gorilla Bar, an embodiment of their patented pry-bar invention.  Alltrade makes the Cobra Bar, "a slightly curved pry-bar with an hourglass-shaped shank.

Olympia sued for infringement and requested a preliminary injunction (PI).  However, the California district court denied the PI because "Olympia had not shown a substantial likelihood that the Cobra Bar infringed . . . because Alltrade’s Cobra Bar did not have an elliptical cross section or a linear shank" as required by the claim language.

On appeal, Olympia asked the Federal Circuit to overturn the PI denial based on improper claim construction by the district court.

In its decision, the appellate panel first noted that before determining if there is a likelihood of infringement, a district court "must first construe the meaning of the relevant claims."

Although the appellate panel found errors in the district court’s construction, based on the district court’s proper analysis with respect one claim element, Olympia did not meet its burden of showing a likelihood of success on the merits of the infringement claim.

The decision of the district court is therefore affirmed, and Alltrade may legally continue to sell the Cobra Bar.

Comment:

It is difficult to get an appellate court to overturn a denial of a preliminary injunction on appeal.  "[W]hen a preliminary injunction is denied, the movant carries a heavier burden to obtain a reversal." New England Braiding Co. v. A.W. Chesterton Co., 970 F.2d 878, 882 (Fed. Cir. 1992).  The Federal Circuit’s standard of review for a denial of a PI is as follows:

This court reviews a denial of a preliminary injunction by the district court for abuse of discretion, which can be established by showing the district court decision is based on clearly erroneous factual findings, an error of law, or a clear error of judgment in weighing the relevant factors.

Links:

CAFC refuses to hear arguments not raised in JMOL.

Patent

Junker v. Eddings & Galt (Fed. Cir. 2005)

Junker holds a design patent on a funny looking sheath used to insert catheters.  Junker had been hired by the defendant to help design the catheters, and the defendant also obtained a patent on the device, but did not name Junker as an inventor.

The Texas jury found that Junker’s patent was valid and that he had sustained $813,550 in damages, and the court awarded Junker this amount at final judgment.  The district court also awarded Junker attorney fees of $275,000 under 35 U.S.C. § 285.

On appeal, the defendant argued that "no reasonable jury could have concluded that Junker was first to invent the design claimed in the patent."  However, the court refused to hear the argument because the defendant "did not adequately raise the issue" in its post-trial JMOL motion.  Thus, the Appellate Panel held that Galt cannot now pursue that contention.

The court did vacate the award of attorney fees because the district court did not adequately describe the reasons for the award.

As in Water Technologies, "we are unable to find sufficient support in the record to perform a meaningful review of the reasonableness of the attorney fees award." 850 F.2d at 674. Accordingly, as in that case, we vacate the award of attorney fees and remand to the district court for further proceedings. In so doing, we intimate no view on what would be a reasonable attorney fee, in this case — a determination that lies primarily within the discretion of the district court. We assume that the district court will fully explain the basis for any subsequent award of attorney fees it may make.

Judges: Newman, FRIEDMAN, Bryson

USPTO Requests $1.7 Billion in FY 2006 Budget; Request Includes 900 New Patent Examiners

Patent

The USPTO has announced its budget request for FY 2006.  President Bush and the PTO hope to spend $1.7 billion — an amount “equaling anticipated FY 2006 fee collections from patent and trademark filings.”  This represents an increase of about $150 million over FY 2005.

A key element of the new budget is the plan to hire 900 new patent examiners and 75 new trademark examining attorneys. “By the end of FY 2006, the USPTO expects to have over 4,500 patent examiners and over 350 trademark examining-attorneys.”

LINK.

Patent Law Fiction

Patent

Robert Ambrogi at Jaffe Associates directed me to an announcement of the National Legal Fiction Writing Competition for Lawyers.

Is your inner Grisham goading you to leave law? Are you convinced you have the talent of Turow? Here is the chance to show your stuff: the National Legal Fiction Writing Competition for Lawyers. [Caution: link is to PDF]. Sponsored by Seak Inc., first prize is a $1,000 gift certificate and lunch with lawyer/authors Lisa Scottoline and Stephen Horn.

Turow is an attorney at a law firm less than a block from where I’m sitting.  He wrote his best selling novel Presumed Innocent on the commuter train to Chicago — 25 minutes each morning. 

I hope that the next great legal fiction artist will emerge from the intellectual property field. (We already have the best poker player.) 

Although not himself a patent attorney, Brian C. Coad has published his second Wally Mason book. This one titled “Notes of a Patent Attorney: The Wally Mason Stories.” According to his bio, Mr. Coad holds about twenty patents, and has published technical papers, poetry, and op-ed pieces for local newspapers in addition to his fiction.

wally_mason

Patent claims still on the increase

Patent

Patent Examiners spend their time searching for prior art and comparing claims in patent applications to the relevant prior art.  However, Examiners often feel a time-crunch — finding it difficult to have enough time to really dig in and understand both the claims and the prior art.  Of course, the number of claims in an application is a major factor in the amount of time it takes to review the claims.  According to the most recent Newsletter of the Patent Office Professional Association (POPA) and the Office of Inspector General, the number of claims per application has been on a steady rise for the past several years.

 

According to POPA, “Examiners would gladly accept this incremental increase [of 7% per year] in their time per case each year.”

How to Jump-Start your Business Method Cases: Part V

Patent, Patent Prosecution

Keeping the invention secret:

  The financial service industry has been dramatically changed by the availability of patents on computer-implemented methods of doing business – often thought of as software patents.  Most large financial institutions now have in-house patent counsel who manage prosecution, licensing, and potential litigation. Many of these institutions have aggressive patenting strategies and are hoping to amass large patent portfolios both to protect their own business and for licensing. 

  Financial institutions have a history of being quite secretive in their practices.  In one sense, this practice stops with the emergence of the patentability option.  In order to obtain a patent, an inventor must publicly disclose the details of the invention.  However, many institutions are opting to request that at least the patent application be left unpublished in order to maintain secrecy of the patent until the date the patent is issued (if ever).

  Formerly, patent applications were kept in confidence at the PTO until the resulting patent issued.  However, in 1999, in order to comply with the international TRIPS agreement, the PTO began a program of publishing (or “laying-open”) patent applications eighteen months after filing.  One clause of the ’99 law guarantees that the PTO will keep the application in secret if the patentee promises to not obtain foreign patent rights.  Foreign patent offices are quite sour on financial service-type business method patents.  Thus, the applicants do not give up much by agreeing to only obtain U.S.rights on their new methods of doing business.

By requesting nonpublication, financial institutions are generally able to maintain secrecy of the invention until the patent issues.  Further, if it appears that the patent will not issue or that the patent would disclose important trade secret information, then the institution may abandon the patent rather than risk public disclosure.

Links:

Los Angeles: A discussion of the good & bad of outsourcing patent work

Conference or CLE, Patent

Loyola Law School in Los Angeles is hosting a conference on the cost effectiveness of outsourcing of patent prosecution that promises to raise a number of provocative issues. (Link).

Speakers include:

  • Mozelle Thompson, former FTC Commissioner;
  • Stephen Kunin, who was with the PTO until recently;
  • James Sullivan, Assistant GC at FMC Technologies;
  • and others

Logistics: Friday, March 4th from 8:30 a.m.-2:00 p.m. on the Loyola Law School campus in downtown Los Angles; $195 includes continental breakfast, lunch and all program materials; registration deadline February 28th.  Contact: IP-FOCUS@LLS.EDU

Federal Circuit Announces Logistics for Phillips v. AWH rehearing.

Patent,

Howard Bashman, author of the excellent appellate litigation blog, known as "How Appealing" clued me in to today’s notice at the Federal Circuit regarding Phillips v. AWH.

The Highlights of the notice:

  • Oral hearing will be at 10:00 A.M., February 8, 2005 in Courtroom 402.
  • Attendance is expected to be high.
  • Seating is on a first-come, first-serve basis.  There is no reserved public seating.
  • 60 seats in the courtroom, 47 seats on the second floor lobby (audio feed), ample standing room.
  • Audio tapes will be available on Wednesday, February 9th for $26.

Links:

Patent TRIVIA CONTEST: Fluid-Filled Lens (WINNER FOUND)

Inventors, Patent

The trivia contest posted last week generated lots of interest.  Thanks for everyone who tried their hand at searching.  The contest goal was to find a seminal U.S. patent that teaches a fluid lens.  The question included the clues that the lens was patented prior to WWII, had no cited prior art, 14 independent claims, and no dependent claims. A small non-monetary prize was promised to the winner.

However — there will be no prize, because the winner is one of our fine USPTO Patent Examiners (Examiner-H) who was able to find U.S. Patent No. 2,062,468.  Ethical rules bar us from sending him a prize, and Examiner-H would prefer to remain anonymous.  Greg Aharonian would be proud.

About the patent: This "optical device" was patented by Charles H. Matz in 1936 teaches a "fluid lens." The strength of the lens can be altered by varying the curvature of the surface of the liquid.  Interestingly, Matz introduces the concept of varying the surface curvature (surface tension) by varying the voltage across the fluid lens.

NOTES:

  • Download The Patent
  • We’re making the contest a bi-annual event (every 6 months). Feel free to send me suggestions for contest. (patent law blogger — Dennis Crouch).
  • LINK: Paul Schwander from the EPO regularly provides a similar quiz in the IPR-helpdesk newsletter to help searchers build up their skills. FYI: IPR = Intellectual Property Rights.

Federal Circuit: Cryogenically Cooled Components Obvious

Patent, Patent Cases 2005,

Cryogenically Cooled Base Station Patent

ISCO International v. Conductus and Superconductor Technologies (Fed. Cir. 2005) (Unpublished).

Background: ISCO sued Conductus for infringement of ISCO’s patent directed to a receiver front end for a cellular base station.  The claims in question provide for the base station having cryogenically-cooled components.  At trial, the jury sided with the defendants — finding that the patent was invalid, not infringed, and unenforceable for inequitable conduct.  The Jury also found that ISCO had engaged in unfair competition — a verdict that was overturned on JMOL by the district court.  ISCO appealed the remaining decision.

Holding: In contrast with its track record with bench trial appeals, the Federal Circuit is rather unlikely to overturn a jury verdict of invalidity.  This case provides no exception.  On appeal, the court was unable to find any grounds for reversal:

[O]ur review of the record under the substantial evidence standard accorded to the jury’s conclusions provides us with no grounds for disturbing the verdict.

Judgment for Defendant affirmed.

Consent Decree Remains In Force Despite Terminal Disclaimer

Patent, Patent Cases 2005

Chicago Brand Industrial, Inc. v. Mitutoyo Corp. (Fed. Cir. 2005).

In a non-precedential case, the Federal Circuit today refused to reconsider an earlier consent decree even though the patentee later filed a terminal disclaimer that cuts short the life of the patent.

In July 2000, after being sued for infringement, Chicago Brand agreed to a settlement with Mitutoyo. The consent decree signed by the district court found that Chicago Brand infringed the Mitutoyo’s patent, that Chicago Brand was enjoined from further infringement during the term of the patent, and that the patent expires on May 10, 2005.  Later, Mitutoyo allegedly filed a terminal disclaimer in the parent case — making the patent only enforceable up to December 13, 2000. 

Chicago Brand sued for a declaratory judgment that the patent had expired as a result of the terminal disclaimer.  Both the district and appellate courts refused to reopen the consent decree — finding that "the principles of res judicata require that Chicago Brand now live with its earlier agreement in the Consent Judgment and Decree that the patent expires on May 10, 2005."

Dismissal Affirmed

Upcoming Events in the Patent World

Conference or CLE, Patent, ,

There are several events taking place next week that interest me, and might interest you. They are listed in chronological order.

1) Phillips v. AWH en banc oral arguments, Washington DC, Tuesday, February 8, 2005: This is going to be a big event at the Federal Circuit in DC. 

2) Chicago’s IP Roundtable will be on February 10, 2005 and is hosted by Foley & Lardner.  IP attorneys who are interested in participating in a lively discussion of current hot topics are invited to attend.  The agenda includes a discussion of Phillips v. AWH, Rader’s sharp dissent in last week’s Fosamax case, Merck v. Integra at the Supreme Court, and patent extraterritoriality.

From the Flyer: Featured participants include the author of the most popular and widely read patent blog, "Patently-O", Dennis Crouch of McDonnell Boehnen Hulbert & Berghoff LLP . . . The co-moderators are Sharon R. Barner, Gregory S. Norrod and Harold C. Wegner. RSVP: Jean Shim jshim@foley.com. The conference venue is Foley & Lardner LLP, 321 N. Clark Street – Suite 2800, Thursday, February 10, 2005, 4:00 p.m. – 6:00 p.m. CST [RSVP deadline to guarantee space February 7, 2005]

3) The APLF is hosting a discussion of "What is Your Case Worth?"  This all important question is very useful to help plaintiffs and defendants plan their tactics in the courtroom and at the settlement negotiation table. Dan Boehnen of MBHB along with Aron Levko of PriceWaterhouseCoopers will lead the discussion that takes place February 11, 2005, 11:30-12:30 CST. RSVP: info@aplf.org in order to obtain toll free dial in number. The roundtable discussions are a free service to in-house counsel involved in IP matters that want to receive very timely and accurate summary information on business-relevant patent law matters, and APLF member firm attorneys.

4) FTC’s town-hall meeting on patent reform will be held in Chicago on March 4, 2005.  Kenneth Dam, University of Chicago Professor [emeritus] and formerly of the Deputy Secretary of Treasury will be a keynote speaker.  USPTO Director Jon Dudas will be speaking as well. [Brochure] [Online Registration].

5 )The ABA’s TECHSHOW will be held in Chicago on March 31-April 2.  Sessions include: How to Jump Start Your Practice; Meet the Bloggers; and Using Technology to Avoid Malpractice. [Registration] [More info here, here, here, here, and here].

Hybrid engine patents found invalid because patentee “dawdled” in reviving abandoned application

Patent, Patent Cases 2005

Screenshot032

Field Hybrids v. Toyota (D. Minn. 2005).

Field Hybrids sued Toyota for infringement of its hybrid engine patents.  During prosecution, however, Field Hybrids had failed to respond to an office action and the case had gone abandoned.  The case was eventially revived through a petition claiming "unintentional abandonment."  Ultimately two patents issued based on the revived case.

Toyota moved for summary judgment of invalidity based on abandonment.  Toyota’s argument rests on the argument that Field Hybrids "falsely claimed the delay in responding to the Office Action was unavoidable or unintentional."  Toyota used letters from Field Hybrids’ attorneys warning of abandonment as proof that the delay was not unintentional. 

The court agreed with the defendant Toyota.  In addition, the court found that Field Hybrids’ "dawdling in attempting to revive the petitions" was "sufficient enough to warrant a finding" that the revival of the abandoned application should be overturned.

Notes:

  • Field Hybrids had waited to file the petition to revive until "the last day available" according to then applicable MPEP 711.03(c). [Not this has ben amended].  Then, after receiving a notice that the original petition was defective, Field Hybrids waited another six months to file a corrected petition.
  • Link to the Decision.
  • Practice Issue — It appears that a major reason why Field Hybrids lost (this issue) was because their attorney wrote a CYA letter warning of the possibility of abandonment if Field Hybrids did not respond to the OA. Is it right to put that type of letter on file even if it will eventually hurt the client?