2005

Patent Reform: Bloggers Take Sides

Yesterday I posted a note discussing special interest groups in the patent reform debate.  I noted three major coalitions forming:

1) Large high-tech / software companies, including Microsoft and Intel, with the goal of reducing the strength of patents. These companies have major patent portfolios, but fear small companies and individuals that may develop blocking patents.  This group is also garnering support from denouncers of software patents.

2) Other large patent holders, including Big Pharma, with the goal of strengthening and streamlining patents by changing to a first-to-file system and encouraging a post-grant opposition.

3) Start-ups and individual inventors, with the goal of keeping the status quo.

I received a few of great responses from patent bloggers:

  • [Link] Russ Krajec correctly notes the irony in Microsoft taking the same position as the FFII. “FFII and their ilk have tirelessly protested, rallying their troops by proclaiming that the big software companies will exert their patents to harm the small companies. When the truth is uncovered, the big companies are actually intimidated by the small companies, not the other way around.”
  • [Link] Stephen Nipper takes issue with my interest group #3 — Steve notes that “small entities in general support reformations to the patent system in fact, small entities support a number of the current proposals.  HOWEVER, they will not support those ‘reforms’ proposed by large entities for no purpose other than to avoid liability/damages.”
  • [Link] Always able to bring parties together, Matt Buchanan notes that Steve is right and that I am right.  “Based on the record, it is clear that small entities, which includes individual inventors, adamantly oppose changing the injunctive relief provision of the patent law. . . . [However,] small entities have expressed support for many of the reform proposals that are on the table.”

Overlapping Ranges Create Prima Facie Case of Obviousness

PatentlyOImage046In re Harris (Fed. Cir. 2005).

By Mark Chael and Dennis Crouch

The CAFC today upheld a Patent Office determination that pending claims relating to a chemical composition were obvious in view of overlapping prior art ranges.  The patent application at issue relates to nickel-based superalloys for turbine engines that operate under high temperatures. (e.g., CMSX-486®). The superalloy includes 12 elements, with the balance being nickel and incidental impurities. Claim 1, for instance includes:

A nickel-base superalloy comprising, in percentages by weight, from about 4.3% to about 5.3% chromium, (Cr), from about 9.0% to about 10.0% cobalt (Co), . . . the balance being nickel and incidental impurities.

The PTO rejected the claim as obvious in view of prior art references that disclosed overlapping ranges of elemental quantities. Harris appealed to the CAFC.

The PTO has the initial burden of showing prima facie obviousness by presenting evidence that the ranges of a claimed composition overlap the ranges disclosed in the prior art.  In this case, all twelve ranges in claim 1 overlapped the ranges disclosed in the art, and eleven of them were completely encompassed. Despite that fact, Harris argued that the disclosures were too broad to teach any specific alloy falling within the ranges. The CAFC disagreed, finding that the ranges were prima facie obvious because they “sufficiently overlap the [claimed] ranges.”

Rejection affirmed

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Patent Reform: Congress Choosing Sides

The partisan nature of politics often falls apart on patent reform issues. For instance, IP subcommittee leaders Lamar Smith (R) and Howard Berman (D) both support patent reform efforts — although it is unclear if either support all the provisions in the proposed draft legislation.  Now, the New Democrat Coalition (NDC), a group 43 of “pro-growth” Democratic Representatives, has sent an open letter to Smith and Berman supporting the legislative initiative.  The NDC is specifically supporting some of the most controversial aspects of the legislation — including limits to injunctions and damages.

[W]e urge you to include the following among the many important patent reform items in your legislation:

1) Third Party Submission of Prior Art. . .

2) Injunctions: We believe injunctive relief is an important legal reform element of patent reform and we encourage the Committee to take aim at those who seek to abuse the patent system for profit.

3) Treble Damages: . . . this legal standard should be revised. While courts should be able to assess higher damage amounts when a defendant’s actions warrant, treble damages should be limited to those cases where intentional or egregious conduct warrants a punitive measure of damages.

4) Apportionment of Damages: . . . Today, complex products such as semiconductors or software programs include thousands of features, many of which are patented.  As these products have become more complex, the old methods for determining the value of infringement have become strained and have led to some unfair results.

From the side of special interests, I see three major coalitions forming:

1) Large high-tech companies, including Microsoft and Intel, with the goal of reducing the strength of patents. These companies have major patent portfolios, but fear small companies and individuals that may develop blocking patents.  This group is also garnering support from denouncers of software patents.

2) Other large patent holders, including Big Pharma, with the goal of strengthening and streamlining patents by changing to a first-to-file system and encouraging a post-grant opposition.

3) Start-ups and individual inventors, with the goal of keeping the status quo.

The question is: where does your company fit into the picture?

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Wise patent attorneys

This week, Franklin Pierce gave an honorary degree to C. Yardley Chittick — the oldest practicing patent attorney in the U.S. Chittick is 104 years old. According to NPR,

Chittick, who is 104, lived across the hall from Humphrey Bogart in 1917 at Phillips Academy in Andover, Mass. He turned down a job with Thomas Edison after graduating from MIT with a degree in mechanical engineering. He later earned his law degree from George Washington University.

Although not nearly as advanced, over the past year, I have gotten to know Jim Hawes (Reg. No. 19,680).  Jim is a long-time author of a number of books published by West.  Most recently, he asked me to help him update Patent Application Practice. PAP is already in its second edition and still going strong with updates every six-months.  I would love to hear comments from anyone who has used the book.

May 2005 Report on New Academic Research

AcademicEach month I post a note discussing new research from the academic side of patent law.  The May 2005 edition includes three great articles from a range of topics:

1. Donald S. Chisum, Reforming Patent Law Reform, 4 J. Marshall Rev. Intell. Prop. L. 336 (2005).  In a short and accessible article, Professor Chisum discusses the nuts and bolts behind patent law reform and asks “reformers” to take a high road.  Specifically, the article proposes six “principles” that any proposed patent legislation should follow: (i) simplicity; (ii) zero-based budgeting; (iii) cost sensitivity; (iv) completeness and generality; (v) international compatibility; and (vi) clarity on effective dates.  As demonstrated by Chisum, the proposed legislation fails each of these principles.  Download the article. (Also, check out footnote 31). (Thanks to Karl Maersch for the tip).

2. Douglas G. Lichtman, Substitutes for the Doctrine of Equivalents: A Response to Meurer and Nard, U Chicago Law & Economics, Olin Working Paper No. 244 (May 2005). In a preemptive strike, Professor Lichtman has taken issue with the forthcoming patent claim scope article by Professors Michael Meurer and Craig Nard. Lichtman argues that the doctrine of equivalents (DOE) is still useful in today’s patent world.  Making three major points, Lichtman argues that the DOE (i) ensures patent viability despite language and foresight limitations; (ii) discourages wasteful efforts to “perfect” claim language; and (iii) allows the patent system to make decisions based on todays knowledge rather than living in the false construct that time stopped at the date of the invention.  Remembering the article’s title, Lichtman argues that the DOE has no equivalent substitutes. Meurer Nard Article, Lichtman Article. (The Meurer Nard article will be published in the Georgetown L.J. later this year).

3. Mark H. Webbink, A New Paradigm for Intellectual Property Rights in Software, 2005 Duke L. & Tech. Rev. 0012 (2005). Webbink is deputy GC at Red Hat.  In this critique, Webbink presents a dissenting voice against a recent article by Microsoft’s GC Bradford Smith (71 U. Chi. L. Rev. 241 (2004)).  In that article, Smith, and his co-author Susan Mann (also of Microsoft) argued that growth in the software industry is a direct result of implementation of strong intellectual property regimes for software.  Webbink makes the case that many other developments were much more important to the explosion in the software industry in the 1980’s and 1990’s.  He lists the development of the personal computer as one such cause for the explosion in off-the-shelf software.  Webbink also gives Microsoft as a test-study — showing that Microsoft did not escalate its patent filings until 1994, “long after the company had become well established.” Read the Article.

 

CAFC Interprets Knorr-Bremse — Finds Willful Infringement

PatentlyOImage044Imonex Services v. W.H. Munzprefer Dietmar Trenner (Fed. Cir. 2005).

In one of the first willfulness decisions since Knorr-Bremse, the Court of Appeals for the Federal Circuit (CAFC) has affirmed a district court’s denial of JMOL after a jury verdict of willfulness.

This case involves a mechanical money sorter that differentiates according to coin diameter. Imonex sued several defendants and won a jury verdict that included increased damages for willfulness. 

According to the CAFC, “willfulness requires a showing that the totality of the circumstances evince the egregious conduct that constitutes willful infringement.” (citing Knorr-Bremse). 

In this case, Imonex had disclosed the patented device (that was properly marked) to employees of the defendants several years before filing suits. Likewise, Imonex brochures and literature included statements that the products were patented.  These facts, according to the CAFC, were sufficient to raise a duty of due care. 

“The jury could have reasonably concluded that several instance recounted in the record triggered the [Defendants’] duty of care.”

Once the duty of care exists, the defendants must take steps to ensure that they do not violate the patent.

Affirmed.

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