February 2006

Patently-O Scholars

AcademicEggHeadThere are a couple of interesting new patent papers:

Linguistics and Claim Construction by Kristen Osenga (available here).  

Professor Osenga explores linguistic theory for truths that can be applied to claim construction.  She writes about five particular “notions” that could be used to make claim construction more consistent:

1) every reader, including a judge, possesses a mental lexicon with a common sense (or conventional) understanding of word meaning which is a point from which to start when interpreting claims;

2) there is an appropriate place for dictionary usage, which is to inform the judge’s common sense understanding about a word where he has none;

3) patent claims have their own grammar which must inform the syntactical and contextual analysis, but may also skew the reader’s common understanding that was obtained either from a mental lexicon or from a dictionary;

4) regardless of the common sense understanding, the PHOSITA must be returned to the analysis and changes made to the law to effectuate the return of the PHOSITA; and

5) extensive resort to the specification and prosecution history to divine the patentee’s intent is inappropriate.

Patent Metrics: The Mismeasure of Innovation in the Biotech Patent Debate by David Adelman and Kathryn DeAngelis (available here).

Adelman and DeAngelis have written what they claim to be “the first comprehensive empirical study of biotechnology patents.”  Their conclusions — there is little evidence that the rise in biotechnology patenting is adversely affecting innovation. The pair also provides a general criticism of “the current enthusiasm for empirical” at the expense of exploring “the obvious complexity of innovative processes.”

CAFC: Gross Negligence Does Not Constitute Inequitable Conduct

AIPLATalk150M. Eagles Tool v. Fisher Tooling (Fed. Cir. 2006, 05–1224).

On summary judgment, the district court found that Fisher’s patent was unenforceable due to inequitable conduct.  Specifically, the court found that a device that the patentee had been selling for twenty years contained many of the same components present in the patented invention and thus would have been material to the examiner’s analysis.  It was also undisputed that the inventors were familiar with the prior-art device.

On appeal, the CAFC took an opportunity to caution against overzealous findings of inequitable conduct:

Although it is not impermissible to grant summary judgment of inequitable conduct, this court “urges caution” in making an inequitable conduct determination at the summary judgment stage.

Here, the patentee took the position that “even if the failure to disclose the [prior art] constituted gross negligence, that cannot be the sole basis for finding an intent to deceive.”  The CAFC agreed.

The district court’s finding of inequitable conduct . . . essentially amounted to a finding of strict liability for nondisclosure. Such is not the law. Even if there were evidence of gross negligence in nondisclosure, which was not found, that would not necessarily constitute inequitable conduct.


Website: Comprehensive Intellectual Property Law Book Reviews

James Hawes is an intellectual property attorney with more than 40 years experience in all aspects of IP.  For many years, Hawes has been at the forefront of IP practice — he has been the President of the National Inventors Hall of Fame, the Los Angeles Intellectual Property Law Assn., and on the Board of the AIPLA. Hawes also has four books published by West (including our Patent Application Practice, 2nd ed.). Now, through HSC Press, Hawes has developed a new website called IP Law Book Reviews. From the Press Release:

IP Law Book Reviews is a compilation of all currently published Intellectual Property books for practicing IP attorneys. At present there are more than 170 IP books cited and reviewed on the website. Each review includes the cost of the book, its updating frequency and update costs, actual or projected, as well as a candid, descriptive review of the book, often comparing it to other similar books and discussing its suitability for use by practicing IP attorneys.

Until now collecting all currently published IP books on a particular topic has been a real challenge. Many, but not all, IP book publishers mail flyers describing some of their books. Some also call IP attorneys from time to time. A Google search on the internet turns up a lot of IP books. But until IP Law Book Reviews there has not been a single compilation of all IP books now being published. In addition, few publishers give complete information about their books. Often they are described in sort of a generic marketing language. IP Law Book Reviews describes the coverage of each book reviewed in a way IP attorneys will welcome, and compares the book to other, similar books. It also gives the basic purchase and update costs for the book, and has a link to the publisher to expedite purchasing the book.

Check out the site – www.IPlawbookreviews.com. Take a look at your favorite IP books, and submit your own review if you like. The publisher welcomes all user reviews, and says that many will be included to give other IP attorneys a well-rounded description of the books reviewed.

If you are a publisher of IP books, check out the site to make sure your books are there and that what is said about them is accurate. Also, the publisher welcomes advertising and alliances with others in the IP field.

Supreme Court Asked To Determine Extraterritorial Scope of U.S. Patent Laws

Microsoft has given the Supreme Court its third opportunity in as many years to tackle the Federal Circuit’s controversial interpretation of 35 U.S.C. 271(f). That statute allows a U.S. patentee to collect damages for foreign sales of a patented invention based on the export of one or more of its components.  The statute has been extended to the export of software code (AT&T, Eolas) as well as to the export of elements used in a patented method (Union Carbide).

In Microsoft v. AT&T, the software giant has asked the Court to answer:

  1. Whether digital software code . . . may be considered a “component[] of a patented invention” within the meaning of Section 271(f)(1); and
  2. Whether copies of such a component made in a foreign country are “supplie[d] . . . from the United States.”


Here, Microsoft’s software code was generated in the U.S. and then shipped abroad where copies were generated.  AT&T claims (and courts have thus far agreed) that sales of those foreign copies infringe the U.S. patent and create liability.  If it stands, this case could have far-reaching effects in the fields of biotechnology (DNA/cell replication) as well as foreign piracy (shipping product from the U.S. to reverse engineer and copy in a foreign country).

From a business perspective, this interpretation of the statute gives business executives another reason to send software jobs overseas.  If the component was not exported from the U.S., there will be no damages under 271(f).

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);
  • 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’).


Product-by-Process Patent Must be Directed to New Product

SmithKline Beecham v. Apotex (Fed. Cir. 2006, 04–1522).

SmithKline’s U.S. Patent No. 6,113,944 is directed to paroxetine (Paxil) made through an allegedly novel process (product-by-process). In 1998, Apotex filed its ANDA and paragraph IV certification asserting that the patent was invalid — thus provoking action from SmithKline.

On summary judgment, the district court found the patent invalid as anticipated by prior knowledge of paroxetine. Specifically, the lower court determined that the claimed process steps were not limiting.  Thus, any prior disclosure of the end-product was anticipating.

Product-by-Process: On appeal, the CAFC affirmed, finding that product-by-process claims cannot recapture the end-product from the public domain.

[O]nce a product is fully disclosed in the art, future claims to that same product are precluded, even if that product is claimed as made by a new process.

This rule of law follows the MPEP, which states that:

[Even] though product-by-process claims are limited by and defined by the process, determination of patentability is based on the product itself. The patentability of a product does not depend on its method of production. If the product in the product-by-process claim is the same as or obvious from a product of the prior art, the claim is unpatentable even though the prior product was made by a different process.

MPEP § 2113 (8th ed., Rev. 2, May 2004) (quoting In re Thorpe, 777 F.2d at 698).

Differences from Prior-Art Product: In a footnote, SmithKline’s attorneys noted that the product made through the claimed process is actually different (lacked a pink hue and did not contain spherical granules).  The district court ignored these differences because they were “not required by the patent claims or specification.” 

However, the appellate panel the differences at least interesting — “If those product-by-process claims produced a different product than that disclosed by the [prior art], there would be an argument that the [prior art] disclosure did not anticipate.” In the end, the panel refused to consider the issue because it was only raised in a footnote:

This footnote is the only statement that even approaches a substantive argument on novelty in the entire Argument section of SmithKline’s opening brief. . . . We find that these mere statements of disagreement with the district court as to the existence of factual disputes do not amount to a developed argument. . . . Further, arguments raised in footnotes are not preserved.

Invalidity affirmed.

PTO Rule Change: Reexamination Filing Date

On February 23, 2006, the USPTO published a rule change titled “Clarification of Filing Date Requirement for Ex Parte and Inter Partes Reexamination Proceedings.”  The rules are being revised to specifically require that requests for reexams must “meet all the applicable statutory requirements before a filing date is accorded to the request.”  The rule change will be effective March 27, 2006, although comments will be accepted until April 24, 2006.

According to 37 C.F.R. 1.510(b), a request for reexamination must include the following parts:

(1) A statement pointing out each substantial new question of patentability based on prior patents and printed publications.

(2) An identification of every claim for which reexamination is requested, and a detailed explanation of the pertinency and manner of applying the cited prior art to every claim for which reexamination is requested. If appropriate the party requesting reexamination may also point out how claims distinguish over cited prior art.

(3) A copy of every patent or printed publication relied upon or referred to in paragraph (b)(1) and (2) of this section accompanied by an English language translation of all the necessary and pertinent parts of any non-English language patent or printed publication.

(4) A copy of the entire patent including the front face, drawings, and specification/claims (in double column format) for which reexamination is requested, and a copy of any disclaimer, certificate of correction, or reexamination certificate issued in the patent. All copies must have each page plainly written on only one side of a sheet of paper.

(5) A certification that a copy of the request filed by a person other than the patent owner has been served in its entirety on the patent owner at the address as provided for in § 1.33(c). The name and address of the party served must be indicated. If service was not possible, a duplicate copy must be supplied to the Office.

USPTO NEWS: Changes to private PAIR and electronic filing

The USPTO unveiled yesterday a revised version of private PAIR (PAIR 6.0). A highlight of the updated system includes a direct login feature that allows access to Private PAIR through a web browser window, rather than having to access through USPTO Direct. In theory, this would allow one to access PAIR from a remote computer as long as he or she has copied their EPF file to that particular computer. Another noted feature is an estimated date for issuance of a first Office action. This is intended to save practitioners from having to make status inquiries to the Office by mail.

A replay of yesterday's USPTO presentation can be viewed at: http://webex.client.ninesystems.com/uspto

Also announced in yesterday's presentation, but not in detail, is a new electronic filing system that will allow applicants to file electronically using PDF files. This electronic filing system is scheduled for a March 17 release. The program will also provide nearly instantaneous verification and validation of applications, an option to pay fees by deposit account charge, and a printable filing receipt which will have the same force as an Express Mail filing receipt and stamped postcard. The PTO should have more information on the new electronic filing system in the coming weeks.

NOTE: This USPTO News Update was written by Christopher Singer.  Chris has a PhD in bio-inorganic chemistry from Northwestern University and is a patent attorney at MBHB.  [Singer Bio]

NTP v. RIM — Pending Injunction

February 24, 2006 is a big day in the ongoing NTP v. RIM BlackBerry dispute. The District Court may issue its decision on an injunction at the scheduled hearing.  NTP’s patents continue to be rejected at the PTO, but the PTO’s decision may be found worthless until it is eventually made final.

News Reports:

Quotes from the articles:

  • “Research In Motion Ltd. will probably be ordered to halt most of its U.S. BlackBerry e-mail service after a judge hears arguments today on a proposed shutdown.” Bloomberg News
  • “In my 30 years of practice, I’ve never seen an accused infringer take a harder line in the face of a potential injunction that could cripple its business,” San Diego patent attorney John Benassi
  • “The least likely thing to happen is that at 5 p.m. Friday (today) everybody’s BlackBerry is going to get shut off.” Scott Creasman, Powell Goldstein
  • “[Judge Spencer is] quick to make up his mind.” Jim Stuckey (Former clerk).
  • “There are no legal reasons why the judge shouldn’t [grant the injunction].” Richard Kelly, Oblon Spivak.
  • “If its software design-around was really a satisfactory option and plainly does not infringe, I believe they would have distributed it months ago.” George Wheeler, McAndrews Held Malloy.
  • “The judge does not appear phased by the [PTO’s] reexamination of the patents, and is not giving in to the government’s efforts to slow the process on hardship grounds.” Douglas Miro

Supreme Court to Determine Licensee’s Right to Sue for Declaratory Judgment of Invalidity or NonInfringement

ChimericImmunoglobulinMedImmune v. Genentech* (Supreme Court 2006).

The Supreme Court has granted certiorari to determine when a patent licensee in good standing can challenge the validity of a patent.  In two separate opinions, the CAFC dismissed MedImmune’s cases — holding that a licensee has no standing to sue for declaratory judgment because it is not under threat of being sued for patent infringement.

This issue harks back to the 1969 Lear v. Adkins case that limited the ability of a licensee to sign-away its right to later challenge the validity of a licensed patent.  In Lear, the High Court found that the public’s interest in invalidating bad patents was strong enough to warrant a limit on the licensee’s ability to give up its future right to challenge validity. 

The question presented is:

Does Article III’s grant of jurisdiction of “all Cases . . . arising under . . . the Laws of the United States,” implemented in the “actual controversy” requirement of the Declaratory Judgment Act, 28 U.S.C. 2201(a), require a patent licensee to refuse to pay royalties and commit material breach of the license agreement before suing to declare the patent invalid, unenforceable or not infringed?

* A second petition MedImmune v. Centocor is also pending before the Court with the parallel question of: 

Does the “actual controversy” requirement of the Declaratory Judgment Act, 28 U.S.C. 2201(a) require a material breach of a license agreement by a licensee prior to suit for declaratory relief for patent infringement, invalidity, or unenforceability?



New IP Blogs

Link: The Intellectual Property Owners Association (IPO) is one of the most powerful and respected IP association. Marc Adler, president of the IPO has started a blog with the goal of providing a discussion forum for the IP community.

Link: The IP Institute at the University of Richmond Law School has started the “Richmond IP Blog” (beta) and appears to be focused primarily on tech-copyright issues.

Link: Mark Reichel, an associate at Ice Miller has started his “Daily Dose of IP.”



Design Patents: References are Properly Combined in Point of Novelty Test Without Motivation

AIPLATalk070Lawman Armor v. Winner Int’l (Fed. Cir. 2006, 05–1253).

To show infringement, a design patent holder must satisfy two separate tests: (a) the ‘ordinary observer’ test and (b) the ‘point of novelty’ test.

The “ordinary observer” test requires comparison of the two designs from the viewpoint of the ordinary observer to “determine whether the patented design as a whole is substantially the same as the accused design.” 

Under the “point of novelty” test, a court must determine whether “the accused device . . . appropriate[s] the novelty in the patented device which distinguishes it from the prior art.”

Regarding points of novelty — Lawman pointed to eight specific points of novelty of its patented design for the sliding hook portion of a vehicle lock. On summary judgment, the district court found that all eight points of novelty could be found in a combination of prior art references.  As a consequence, the lower court ruled that the patent was not infringed.

Lawman appealed, arguing that there was no suggestion to combine the references in the art.  The CAFC, however, affirmed, finding that, for the point of novelty test, multiple references can be combined without any prior suggestion or motivation for doing so.

What Lawman’s contention comes down to is that the D’621 patent contains a ninth “point of novelty,” namely, the combination in a single design of the eight non-novel “points of novelty” it embodies. This argument is inconsistent with, and would seriously undermine, the rationale of the “points of novelty” test.

Supreme Court Denies Phillips v. AWH Petition for Certiorari

Phillips v. AWH Corp. (Supreme Court).

The Supreme Court has denied AWH’s bid for certiorari on the question of whether “all aspects of a district court’s patent claim construction may be reviewed de novo on appeal.”  That single rule of law has often been cited as the primary reason for the unusually high reversal rate of patent cases.

Book Review: Math You Can’t Use

MathMath You Can’t Use
by Ben Klemens

$19 from Amazon

Klemens is a scholar, but doesn’t really write like one — rather he tells a story and wraps the story around his argument.  His bottom line argument is that software should not be patentable. Here are some of his arguments:

1) Software is simply math (Church-Turing thesis) and math is not patentable.  His conclusion — that software should therefore be unpatentable — strikes me as odd.  Klemens leads us down the parade of horribles of granting 15 years of exclusivity to mathematical algorithms.  The bad results are (a) mathematicians being forced to pay royalties when a patent is valuable and (b) the Church-Turing thesis itself being patented.

2) The PTO is bad at granting patents and therefore should not grant software patents.

3) Patents only work well in industries with a few major players.  The software industry is decentralized (with lots of small players) and therefore should not be covered by patents. . .

Of course, Klemens may gain more traction with his explanation of how aggressive patent enforcement could kill the internet as a whole.


J. Newman: Inequitable Conduct Charges Again on the Rise

Ferring v. Barr Labs (Fed. Cir. 2006).

The Ferring decision seems to have again expanded the scope of inequitable conduct in patent cases.  In a twenty-page dissent, Judge Newman took issue with this expansion.

I agree with J. Newman that inequitable conduct is “a serious charge” that should not be taken lightly. In the past, the defense has been “grossly misused . . . with inequitable conduct charged in almost every case in litigation.”  Certainly, these charges do nothing to help the current popular distrust of the patent system.

After the CAFC decision in Kingsdown v. Hollister (requiring objective evidence of material misconduct + intent to deceive), charges of inequitable conduct were pushed to the background and taken-out of many cases. However, in this decision, Newman sees a revival:

My colleagues on this panel have regressed to that benighted era, rejecting the efforts of Kingsdown to bring objectivity to charges of inequitable conduct, instead reviving the culture of attack on inventor rights and attorney reputations based on inference and innuendo. My colleagues, endorsing several novel and unsupportable presumptions of wrongdoing, do injury to the reasonable practice of patent solicitation, even as they defy the rules of summary judgment.

Here, Newman argues, the panel has found materiality based on a “should have known ” standard:

The panel majority, steeped in adverse inferences, holds that good faith is irrelevant and presumes bad faith. Thus the court resurrects the plague of the past, ignoring the Kingsdown requirements of clear and convincing evidence of a misrepresentation or omission material to patentability, made intentionally and for the purpose of deception. I respectfully, but urgently, dissent.


PTO Requests Model of Warp Drive Invention

The Worsley-Twist warp drive does not depend upon traditional emissions of matter to create thrust.  Rather, the drive creates a change in the curvature of the space-time continuum — thus allowing travel by warping space-time.  Worsley & Twist patent application recently suffered another setback. The Examiner has now requested a working model:

Applicant is required to furnish a model of the instant invention. 35 U.S.C. 114. See Also 37 C.F.R. 1.91.

Among other rejections, the Examiner has asserted a rejection under 35 U.S.C. 101 for lack of utility — finding that the invention is inoperable.



More Interesting Patent Applications (From Keith Nagel)

  • U.S. Pub. No. / Title

Patentee Must Disclose Affiliations of Declarants

Ferring v. Barr Labs. (Fed. Cir. 2006).

By Grantland Drutchas

Ferring is a rather interesting CAFC decision on inequitable conduct. The CAFC affirmed summary judgment of inequitable conduct based solely on the applicant’s failure to disclose that individuals who submitted declarations in support of the patentability of the claims had affiliations with the assignee of the application.

One of the declarants was an employee of the assignee, one was a paid consultant; but the third was simply a researcher (presumably a clinician) whose employer had assisted with some clinical studies for the assignee and received some funding for those clinical studies from the assignee. The CAFC found the failure to disclose each of these relationships was material.

The appellate panel also held that an inference of intent can be found when the patentee fails to show a “credible explanation” for the patentee’s deception of the PTO. Importantly, the Court found that the patent holder has the burden to prove the credible explanation. Simply arguing plausible or possible explanations for the deception is not enough to rebut an inference of intent to deceive.

Grant Drutchas, a founding partner of MBHB, has nearly 20 years of experience in the practice of intellectual property law, with a particular emphasis on litigation, licensing, and client counseling.

Patent Cases in the Northern District of Illinois

This morning I conducted a quick study to determine some case outcomes here in the Northern District of Illinois.  Since 2000, 933 patent cases have been filed here and 783 of those have closed. The following table breaks down the number of patent cases filed by year and, of those, how many have been closed.

* as of 2/16/2006.

Using the data from patent cases filed in 2000, I then created the following table to show how long each case took to close.  About 8% of the cases were disposed of within a month of filing.


The following table shows that most patent cases are closed before the one-year mark, and 75% are done before two years have gone by.


Cite as Dennis Crouch, Patent Cases in the Northern District of Illinois, Patently-O, February 16, 2006, available at http://patentlyo.com.

Appellate Procedure: No Cross-Claims for Winning Party on Winning Issues

AIPLATalk061Nautilus v. ICON (Fed. Cir. 2006, 05–1577o).

ICON won on summary judgment.  On appeal, ICON filed a cross-appeal requesting review of several claim construction rulings in the event the CAFC reversed the lower court’s ruling. However, the appellate panel refused to hear ICON’s arguments for new claim construction because ICON won below:

a party who prevails on noninfringement has no right to file a ‘conditional’ cross-appeal to introduce new arguments or challenge a claim construction, but may simply assert alternative grounds in the record for affirming the judgment.

AIPLATalk062In dissent, Judge Newman essentially argued that the practical nature of claim construction appeals should allow all claim construction issues to be reviewed at one time.

The burden on the district court and the parties, requiring them to conduct a trial on un-reviewed claim constructions, when objections have been raised and are ripe for review, is an entirely unnecessary burden.


Knorr-Bremse does not Preclude Inference of Reckless Behavior for Failure to Obtain Opinion

AIPLATalk060Golden Blount v. Robert H. Peterson Co. (Fed. Cir. 2006, 04–1609).  

Opinions of Counsel: This case holds that Knorr-Bremse does not prevent a court from finding that a defendant was at least reckless by obtaining an oral noninfringement opinion but failing to obtain a written opinion.  Rather, Knorr-Bremse only precludes an inference that an undisclosed written opinion would have been negative.

Damages: The defendant here was on the hook for contributory infringement — actual infringement occurred when customers assembled the fireplaces.  On damages, the CAFC partially reversed the lower court’s ruling.  The appellate panel found that lost-profit damages must be reduced by any products that were returned to the defendant without being opened by the customer — because in those cases the underlying direct infringement never occurred.


Filed Briefs: