June 2006

Small Entity Status — be careful of non-exclusive licenses.

Is a company’s “small entity” status with the PTO put in jeopardy by granting a non-exclusive license to a major corporation — assuming that the non-exclusive license does not convey any right to exclude others from making or using the invention?

According to 37 CFR 1.27, a small entity includes:

an inventor . . . who has not assigned, granted, conveyed, or licensed, and is under no obligation under contract or law to assign, grant, convey, or license, any rights in the invention. . . .

MPEP 509.02 defines “rights in the invention” in this section of the rules as “the right to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States.”  This therefore appears to indicate that a non-exclusive license to a large entity that does not convey any right to exclude others would not fall within rule. However, if you read further in the MPEP, you notice a discrepancy involving non-exclusive licenses:

A grant of a non-exclusive license to a “non-small” entity will disqualify applicant from claiming small entity status. See Ulead Systems, Inc. v. Lex Computer & Management Corp., 351 F.3d 1139, 1142 (Fed. Cir. 2003).

In yesterday’s decision in Nilssen v. Osram Sylvania (N.D. Ill. 2006), the district court found Nilssen’s patents unenforceable because, inter alia, Nilssen had failed to pay a large entity fee even though the patents-in-suit were nonexclusively licensed to Philips Electronics.

In addition, the patents were unenforceable due to: (a) a patentability declaration submitted by an undisclosed business partner; (b) Nilssen’s admission that he “opposes government fees, taxes, and the present legal system;” (c) Nilssen’s improper priority claims; (d) failure to disclose ongoing litigation to the PTO; (e) failure to disclose material prior art; and (f) unclean hands due a failure of decorum and courtesy in interactions with the PTO.

Regarding Nilssen’s unclean hands, the Court cited a petition to the Commissioner that reads as follows:

a) [The Examiner] cannot be characterized as being skilled in the arts to which subject applications pertain . . .
b) [The Examiner] is severely deficient in his understanding and use of reason and logic . . .
c) [The Examiner] has an inadequate command of the English language . . .
d) [The Examiner] has repeatedly shown himself to be overtly non-cooperative and non-caring.

Bruckelmyer Stands — Expands Scope of Available Prior Art

Bruckelmyer v. Ground Heaters (Fed. Cir. 2006).

Bruckelmyer has two patents on methods of thawing frozen ground so that a layer of concrete can be laid on top of the ground. In a decision earlier this year, the CAFC found that Bruckelmyer’s patents were obviated by the contents of a Canadian patent file history — thus affirming a summary judgment of invalidity.

On appeal, Bruckelmyer argued that the unpublished Canadian patent documents were not a “printed publication” under 35 U.S.C. Section 102(b) and thus, was not prior art. The CAFC found that the originally filed application was “publicly accessible,” and thus a prior art “printed publication” because the Canadian prosecution file was open to the public more than a year before Bruckelmyer filed his application.  Here, the Court found that this particular application could be located because the related patent discussed a solution for the same problem addressed by Bruckelmyer’s patents.

The CAFC has now denied Bruckelmyer’s request for rehearing en banc.  However,  Judge Newman presented a forceful dissent from the denial of rehearing:

It is undisputed that these [disclosures] are not available in any database or any library, and that no index, no catalog, no abstract suggests their existence or their content. It is not contested that the only way to obtain these [disclosures] (although their existence was unknown) is to personally go to the Canadian Patent Office in Hull, Quebec, and ask to examine the file wrapper (the prosecution history) of this particular patent, which is entitled “Portable Construction Heating System”. This is not the method for heating frozen ground in preparation for pouring concrete, which is the subject of the patent in suit. The only lead to this particular Canadian prosecution record, we are told, is to observe that the broad recitation in the Canadian patent that “other typical uses [of the invention] are . . . thawing frozen ground,” and then to travel to Quebec to examine the file wrapper to see if it might contain information that was deleted from the Canadian application before issuance. This excised and unpublished and unreferenced material is not a “printed publication,” no matter how generously that concept is defined. This court improperly relies on it to invalidate the United States Patents here at issue. . . . As Judge Linn observes in his dissent, a person searching for prior art cannot be reasonably expected to look in the prosecution history of a foreign patent that does not disclose the invention, on the off chance that its inventor might have invented something relevant to the search, and then cancelled it from the application before grant.


Red Hat Faces Patent Infringement Suit

Software company FireStar has filed suit against open source seller Red Hat, alleging patent infringement.  The suit, filed in the Eastern District of Texas, asserts infringement of U.S. Patent No. 6,101,502 that is directed to a method of interfacing an object oriented software application with a relational database.  Red Hat recently purched JBoss maker of the specific accused product Hibernate 3.0.

Claim 1 of the ‘502 patent reads:

1. A method for interfacing an object oriented software application with a relational database, comprising the steps of:

  • selecting an object model;
  • generating a map of at least some relationships between schema in the database and the selected object model;
  • employing the map to create at least one interface object associated with an object corresponding to a class associated with the object oriented software application; and
  • utilizing a runtime engine which invokes said at least one interface object with the object oriented application to access data from the relational database.

Red Hat has its own patent policy “that software patents generally impede innovation in software development and that software patents are inconsistent with open source/free software.”


  • File Attachment: FireStar Complaint.pdf (140 KB)
  • File Attachment: Patent 6101502.pdf (593 KB)
  • File History [Not yet]
    • Paxil Patent Case: New Mandate

      PatentlyOImage017SmithKline Beecham v. Apotex (Fed. Cir. 2006, 04–1522o).

      In February 2006, the CAFC affirmed a lower court’s invalidation of Apotex’s Paxil patent — finding that its product-by-process claims were invalid because they attempted to recapture the end-product from the public domain. According to that decision, “once 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.”

      On petition, the CAFC has now refused to rehear the case.  However, the court indicated that a new “mandate of the court will issue on June 29, 2006.”

      Judge Newman dissented from the rehearing decision.  She argued that this case should be used to clarify the difference between products that could only be described by the way they are made (Scripps) and products whose production require use of a certain process (Atlantic Thermoplatics). 

      This decision holds that a product-by-process claim that, for instance, claims “product X made by performing steps A, B, and C,” will be invalid if product X is known in the art — regardless of whether the known X was made through those steps.  This makes the claimed steps (A, B, and C) meaningless or, in Judge Newman’s words, “expands on the existing confusion by suggesting that the specific language of the claims is not relevant to anticipation.”

      Paxil Cases: There are at least two Paxil patent cases that are ongoing. In 2005, the CAFC ruled that the patent covering the drug compound was inherently anticipated. The Supreme Court recently declined to hear that case on appeal.

      Supreme Court: Time to Rethink Obviousness

      PatentlyOImage025_smallKSR v. Teleflex (Supreme Court 2006).

      The Supreme Court has granted KSR’s writ of certiorari and now will address fundamental questions of patentability that have been raised. The doctrine of nonobviousness ensures that patent rights are not granted on inventions that are simply throw-away modifications of prior technology.  Questions of obviousness are at play in virtually every patent case, in both proceedings before the USPTO and during infringement litigation.

      Over the past twenty-five years, the Court of Appeals for the Federal Circuit has developed its nonobviousness doctrine using a motivation/suggestion/teaching 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.

      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 High 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.

      Professor John Duffy has done a masterful job of shepherding this case through the system.  In an article several years ago, Duffy predicted the current rise of Supreme Court interest in patent case.  In fact, at that time he announced that the very issue now being debated in KSR was ripe for adjudication:

      One very good candidate for [Supreme Court] review is the law governing whether an invention is not ‘‘obvious’’ at the time of invention. . . . [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). . . . None of this is to say that the Court will necessarily reject the doctrine developed by the Federal Circuit; it is only to suggest the Court is likely to end its long absence from this doctrinal area soon.

      The Festo Decision and the Return of the Supreme Court to the Bar of Patents, 2002 S.Ct. Rev. 273, 340-41 (2003).  Robert Brauneis another GWU law professor led a group of 24 law professors in support of the petition. Although he did not file a brief (to my knowledge) Richmond Professor Christopher Cotropia argues that (1) recently, the CAFC has removed some rigidity from the obviousness determination and (2) the requirement for proof of a suggestion to combine should be thought of as a rule of evidence. [link].

      According to Professor Duffy, the preliminary amici briefing schedule is as follows:

      • Amici supporting petitioner or neither side: August 10, 2006 (45 days after cert granted).
      • Amici supporting respondent: September 14, 2006 or 35 days after petitioner brief is filed — whichever is less.

      Crouch’s Commentary: For those of you concerned about the potential impact of this case — It is very likely that the CAFC’s motivation test will be changed and briefs simply requesting “no change” are unlikely to to be given much weight.  Proposed solutions, including analogies to other areas of law (and foreign law) may be helpful.  In this case, I also believe that would be useful to provide the Court with a number of real-world examples of how the system works or how it should work.



      PTO Proposes New “Accelerated Examination” Procedures

      In response to unrelenting criticism of the “backlog,” the USPTO has announced a new “accelerated examination” program that promises a 12–month final decision on patentability. This creative solution will give applicants the chance to cut in line if they meet certain criteria. To qualify, a patent applicant must:

      • File the application electronically with a petition to make special (with fees paid and appropriate declaration);
      • Conduct a search of prior art;
      • Submit all prior art that is closest to their invention;
      • Identify all the limitations in the claims that are disclosed in the submitted references (with pin cites to the references)
      • Explain what the prior art teaches and how their invention is different (claim by claim);
      • Explicitly discuss how the invention is useful and show how the written description supports the claimed invention;
      • Include only 20 claims (3 independent);
      • Agree to have an interview with the Examiner; and
      • Agree to base claims of patentability only on the independent claims.

      The applicant will only be given one-month (non-extendable) to reply to any office action. An applicant may abandon the accelerated application in favor of a continuing application, and the continuing application will not be given special status under the accelerated examination program (unless so requested).

      The change in examination requirements will apply to all petitions to make special filed on or after August 25, 2006. Comments concerning petition to make special practice may be sent by email to mpepfeedback@uspto.gov.

      According to the PTO, the accelerated examination procedure is designed to give applicants quality patents in less time. In exchange for quick examination, patent examiners will receive more focused and detailed information about the invention and the closest prior art from the applicants.  This increased disclosure up-front by applicants will help examiners more quickly make the correct decision about whether a claimed invention deserves a patent.

      Caution: The rules and restrictions for this procedure are quite specific (onerous?) and have some potential for loss of rights for your clients. Make sure that you understand the rules completely before signing-up.

      Link: http://www.uspto.gov/web/offices/com/sol/notices/71fr36323.htm

      Aside: I had heard some rumors that the PTO would be enacting its proposed changes to continuation practice in August of this year.  Those do not appear to be true — Rather, that this change appears to be the August change and the new rules are likely around the end of the year.

      Jury Trial Not Required For Inequitable Conduct Issues

      ComputerAGFA v. CREO Products (Fed. Cir. 2006).

      In patent litigation involving patented computer-to-plate printing technology, the Massachusetts district court held a bench trial on the issues of inequitable conduct and enforceability before a jury trial on infringement and invalidity. In that bench trial, the patent was found unenforceable.

      AGFA appealed — asserting that inequitable conduct and enforceability should have been tried by a jury. The CAFC disagreed — holding that the Seventh Amendment right to a jury trial does not extend to questions of inequitable conduct and enforceability.

      Dissent by Newman:

      The panel majority holds that the factual questions of both intent to deceive and materiality of deceptively withheld information are not subject to the jury right. This is a departure from the established jury right, for materiality and intent are quintessential questions of fact, and have been tried to a jury throughout the nation’s history. There is no basis for removing these factual questions from the jury when the jury is trier of fact. I respectfully dissent from the court’s holding that there is no right to a jury, and that the jury demand can be rejected at the trial court’s discretion.

      More to come later . . .

      In its first post-eBay injunction decision, CAFC vacated Abbott’s preliminary injunction

      Macrolides (Clarithromycin)Abbott Labs v. Andrx Pharma (Fed. Cir. 2006, 05–1433).

      Abbot was awarded a preliminary injunction (PI) against Teva to stop alleged infringement of its patents relating to extended release clarithromycin. The CAFC reviewed that holding for abuse of discretion or clear error. 

      Looking at the prior art, the lower court found no motivation to combine several prior art references that discussed azithromycin rather than clarithromycin.  On appeal, the CAFC found the motivation in the form of an implicit admission made by Abbott in one of its prior patents.  In that prior patent, the specification discussed only clarithromycin, but the claims were directed at both azithromycin and clarithromycin. 

      Because the [earlier Abbott] patent explicitly discloses only clarithromycin controlled release compositions, yet claims azithromycin compositions, we conclude that Abbott has represented to the U.S. Patent and Trademark Office ("PTO") that the differences between clarithromycin and azithromycin were such that azithromycin could be substituted into a controlled release clarithromycin composition by a person of ordinary skill in the art without undue experimentation.

      Based on the earlier Abbott patent, the CAFC found a substantial argument that a jury could find a motivation to combine the references with a reasonable expectation of success.

      Regarding potential irreparable harm, the CAFC held that direct competition “alone does not establish that Abbott’s harm will be irreparable.” 

      And, on the question of public interest, the appellate panel “agree[d] with the district court that the public is best served by enforcing patents that are likely valid and infringed.”  But, because of the chance that Abbott’s patents are invalid, the panel concluded “that the public interest is best served by denying the preliminary injunction.”

      In dissent, Judge Newman argued that the majority opinion constituted de novo rule and did not give significant deference to the lower court — as is required by law.

      My colleagues do not discuss the trial judge’s careful explanations, but, upon finding that Teva has raised a "substantial question" about patent validity, they hold that Teva should be permitted to practice the Abbott invention before patent validity is decided. With all respect to my colleagues’ concerns, they misapply not only the criteria of the preliminary injunction but also the standard of appellate review.

      Newman argues that the criteria used by the majority for determining likelihood of success on the merits were not correct:

      Thus my colleagues conclude that claim 4 of the ’718 patent is "vulnerable to allegations of invalidity," and find "a substantial argument" as to other claims. These are not the criteria of likelihood of success.

      CAFC: Use of Phrase “This Invention” Limits Claim Scope

      FuelPumpHoneywell v. ITT Industries (Fed. Cir. 2006).

      On appeal of a summary judgment of noninfringement, the CAFC considered the meaning of the claim term “fuel injection system component.” 

      On four occasions, the specification refers to to “this invention” as relating to a “fuel filter.”  And, the specification does not indicate that a fuel filter is merely a preferred embodiment.

      Consequently, the CAFC concluded that the patentee limited the scope of the patent claims to require a fuel filter.


      A patent success story

      Simvastatin StructureToday I am truly proud of the patent system.  The block-buster drug Zocor (simvastatin) has transitioned off-patent and into the world of generics.  Unlike other areas of IP law, patents really are valid only for “limited Times” and when those years have passed the property right evaporates — leaving the inventions “free as the air to common use.” (In the words of Justice Brandeis).

      There is no question that patent rights played a major role in providing incentive to Merck to develop and test Zocor and to push it through the difficult FDA approval process.  The incentive worked, Merck recouped its investment, and now generic versions will be sold at an unbelievably low price that is very near its production costs.

      Exhale: Supreme Court Dismisses Metabolite Controversy

      Patent holders are breathing a sigh of relief with today's dismissal of LabCorp v. Metabolite -- a case pending before the Supreme Court.  That case had the potential of dramatically altering the landscape of patentable subject matter -- especially relating to method patents.  The case was dismissed as improvidently granted (DIG). In the IPO Amicus brief, we made this argument (as well as others) [IPO Brief]

      Dissent: Three justices, led by Justice Breyer would have heard the case and would have found the patent invalid:

      There can be little doubt that the correlation between homocysteine and vitamin deficiency set forth in claim 13 is a "natural phenomenon." . . . [The claimed] process instructs the user to (1)obtain test results and (2) think about them. . . . At most, respondents have simply described the natural law at issue in the abstract patent language of a "process." But they cannot avoid the fact that the process is no more than an instruction to read some numbers in light of medical knowledge.

      The dissent also took shots at the State Street decision that started the business method craze.

      Neither does the Federal Circuit’s decision in State Street Bank help respondents. That case does say that a process is patentable if it produces a "useful, concrete, and tangible result." But this Court has never made such a statement and, if taken literally, thestatement would cover instances where this Court has held the contrary. The Court, for example, has invalidated a claim to the use of electromagnetic current for transmitting messages over long distances even though it producesa result that seems "useful, concrete, and tangible." Morse. Similarly the Court has invalidated apatent setting forth a system for triggering alarm limits inconnection with catalytic conversion despite a similarutility, concreteness, and tangibility. Flook. And the Court has invalidated a patent setting forth a process that transforms, for computer-programming purposes,decimal figures into binary figures—even though theresult would seem useful, concrete, and at least arguably (within the computer’s wiring system) tangible. Gottschalk.


      Question: Intentionally Obscure Prior Art

      A recent newsgroup posting included the following request for information:

      I’m [looking for] ways to file a disclosure so that it is beyond argument technically “publicly available” but is very difficult to find.

      The questioner was hoping to find an obscure way to create prior art without really giving away trade secret information.  Of course, this approach is directly contrary to the purpose of the public disclosure requirement of 35 U.S.C. 102, and overt gaming of the system would likely raise the ire of a U.S. jury. 

      However, if the prior art is intentionally indexed only in a remote off-line Ghanaian library, will it still serve as prior art?

      In other news, the PTO is killing its document disclosure program.

      New USPTO Website

      USPTO has launched a new website design: www.uspto.gov.

      In an effort to better serve those who visit uspto.gov for business and information purposes, we have redesigned our homepage to make it more user-friendly. Our homepage “makeover” is the first step of a larger plan to redesign the entire website over the coming months.

      We are very interested in your comments on the changes we have just made and solicit your suggestions for changes to the rest of the website. Please let us hear from you at new_web_look@uspto.gov.

      Meet me at the ABA 2006 Summer IPL Conference June 21 in Boston

      Aba20summer20ipl I will be at the ABA Summer IPL Conference on Wednesday and Thursday.  John Welch along with the ABA Staff have put together a “Bloggers’ Corner” at the “get acquainted” reception on Wednesday, June 21st, from 6:00 to 7:00 P.M. The cage-match will start at 6:30 — Battle-of-the-Blogs. Come see:

      For a brief description of the bloggers, read this flier. John Welch has put together a set of photos that vaguely represent the bloggers (although Dannenberg may actually be only an avatar).  Stephen_barista

      Buchanan, Crouch, Dannenberg, Gesmer, Welch, and the Coffee Meistro
      Aaron Barkoff
      Barkoff (Orange Book Blog) can’t make it

      Greg Aharonian’s Public Comments on the PTO’s Interim Guidelines for Patentable Subject Matter

      June 17, 2006 Ray Chen / Linda Therkorn Office of the Deputy Commissioner of Patent Examination Policy

      c/o Mail Stop Comments
      P.O. Box 1450
      Alexandria, VA 22313-1450

      Dear Ray / Linda,

      Your office is currently seeking comments on the "Interim Guidelines for Examination of Patent Applications for Patent Subject Matter".

      One of the questions you ask is: "Is the distinction between physical transformation and data transformation appropriate in the context of the Patent Subject Matter Eligibility Interim Guidelines?"

      My first comment is that this question is worded incorrectly. Something more appropriate would be:

      – Is the distinction between physical transformation and data/information transformation appropriate in the context of the Patent Subject Matter eligibility Interim Guidelines? –

      given that one standard definition of "information" is a "set of data".

      To this latter question, and even the original question, the answer based on modern physics is "NO" – transforming data and transforming information is always a physical transformation, in light of information’s role as a fundamental physical quantity of modern physics.

      Included in this mailing is a copy of a book for your reading, titled "Decoding the Universe: how the new science of information is explaining everything in the cosmos from our brains to black holes" by Charles Seife (Viking Press, 2006). It is an excellent introduction to the physics of information, and should help your Office relate the question you ask to developments in modern physics.

      Information is physical. Transforming information is a physical transformation. Any other view is a denial of the science of modern physics, a science the patent system helps progress. There is no progress in denying any aspect of such science. If you have any questions, please contact me.


      Greg Aharonian

      Citation of Unpublished Opinions

      FedcirThe CAFC has previously taken a hard-line against citation of nonprecedential opinions. In one case, the court threatened sanctions for future violations of its citation rules. However, in the wake of the Supreme Court’s amendments to the Federal Rules of Appellate Procedure, the CAFC will begin to allow parties to cite the court’s nonprecedential opinions. The proposed new CAFC Rule 32.1 reads as follows:

      (c) Parties’ Citation of Nonprecedential Dispositions. Parties are not prohibited or restricted from citing nonprecedential dispositions issued after January 1, 2007. This rule does not preclude assertion of claim preclusion, issue preclusion, judicial estoppel, law of the case, and the like based on a nonprecedential disposition issued before that date.

      (d) Court’s Consideration of Nonprecedential Dispositions. The court may refer to a nonprecedential disposition in an opinion or order and may look to a nonprecedential disposition for guidance or persuasive reasoning, but will not give one of its own nonprecedential dispositions the effect of binding precedent. The court will not consider nonprecedential dispositions of another court as binding precedent of that court unless the rules of that court so provide.

      Any comments on the proposed rule changes are due to the CAFC Clerk by August 18, 2006.

      The CAFC continues to issue many nonprecedential opinions.  In my opinion, a significant number of these opinions should instead be precedential.  As an example, in today’s case of Bennett Regulator v. Canadian Meter, the CAFC issued a 13 page nonprecedential opinion that included a dissent by Judge Mayer. The case involved the difficult question of whether a pre-filing, but not-fully-enabling public disclosure can invalidate a patent.  This one should be precedential. 

      Prior Discussion:

      eBay Casualty: E.D. Texas Court Denies Injunctive Relief to Halt Microsoft’s Infringing Activities

      Z4I’m writing a paper on this very topic, but history is happening faster than I can type . . .

      z4 Technologies, Inc. v. Microsoft (E.D.Texas 2006)

      z4 Tech appears to be the first post-eBay decision denying a permanent injunction after a patent has been valid and infringed. Here, the jury found that the patents were willfully infringed by Microsoft and that there was insufficient evidence to find the patents invalid. z4 then asked the Court to enjoin Microsoft from making, using, or selling its infringing product (Windows XP).

      The Court followed the “traditional four-factor test used by courts of equity.” to determine whether to issue an injunction:

      I. Irreparable Injury to Patentee: The patentee argued that infringement of a patent created a rebuttable presumption of irreparable harm to the patentee.  The district court dismissed this “creative” argument as lacking precedential foundation:

      z4′s arguments for the application of a presumption of irreparable harm are creative, but z4 cannot cite to any Supreme Court or Federal Circuit case that requires the application of a rebuttable presumption of irreparable harm with regard to a permanent injunction.

      In fact, the court cited the Supreme Court case of Amoco Production for the proposition that a presumption of irreparable harm in the context of an injunction is “contrary to traditional equitable principles.” 

      Because z4 does not create any products, the Court found that z4 the first factor weighed in favor of the willful infringer, Microsoft.

      In the absence of a permanent injunction against Microsoft, z4 will not suffer lost profits, the loss of brand name recognition or the loss of market share because of Microsoft’s continued sale of the infringing products. These are the type of injuries that are often incalculable and irreparable. The only entity z4 is possibly prevented from marketing, selling or licensing its technology to absent an injunction is Microsoft. As . . . z4 can be compensated for any harm it suffers in the way of future infringement at the hands of Microsoft by calculating a reasonable royalty for Microsoft’s continued use of the product activation technology. Accordingly, z4 has not demonstrated that it will suffer irreparable harm absent a permanent injunction.

      II. Remedies Available at Law (Is Money Sufficient?): Here, the court cited Kennedy’s concurring opinion from eBay:

      Justice Kennedy specifically mentioned the situation where a “patented invention is but a small component of the product the companies seek to produce” and states that in such a situation, “legal damages may well be sufficient to compensate for the infringement and an injunction may not serve the public interest.” . . .

      Here, product activation is a very small component of the Microsoft Windows and Office software products that the jury found to infringe z4′s patents. The infringing product activation component of the software is in no way related to the core functionality for which the software is purchased by consumers. Accordingly, Justice Kennedy’s comments support the conclusion that monetary damages would be sufficient to compensate z4 for any future infringement by Microsoft.

      In addition, Microsoft has promised that its new version of Windows (2007) will phase out all the infringing components.  Thus, any ongoing royalty would only last for a couple of years.  “For the reasons stated above, z4 has not demonstrated that monetary damages are insufficient to compensate it for any future infringement by Microsoft.”

      III. Balance of Hardships: Microsoft argued that it would be really hard to redesign even a small component of Microsoft office.  From what I have heard about the complicated code noodle, that assertion must be true. Thus, the court found that the balance of the hardships weigh in favor of Microsoft.

      IV. Public Interest: Microsoft office is really popular, and “it is likely that any minor disruption to the distribution of the products in question could occur and would have an effect on the public due to the public’s undisputed and enormous reliance on these products. . . . Although these negative effects are somewhat speculative, such potential negative effects on the public weigh, even if only slightly, against granting an injunction.

      Commentary: As I predicted earlier, one way to avoid an injunction is to be a very successful infringer.  I would have suspected that Microsoft’s willfulness would have weighed in z4’s favor, but the court did not even mention willfulness in its analysis of the equitable relief factors. 

      In a forthcoming paper code-named Injunction Denied, I address the issue of injunctive and monetary relief in patent cases.  In particular, I focus on the situation where equities favor the defendant, and ask the question what monetary remedy a court should then impose? My answer may surprise you. . .


      Primos v. Hunter: No Festo Estoppel When Newly Added Term is Found in the Accused Product

      PrimosPrimos v. Hunter’s Specialties (Fed. Cir. 2006, 05–1001).

      Primos owns patents on game calls for hunting. In an infringement suit, a jury found that Hunter’s products literally infringed one patent and infringed another under the doctrine of equivalents (DOE).

      On appeal, Hunter challenged the DOE decision arguing both (1) Festo Estoppel and (2) Vitiation.  In a surprise boost to the DOE, the CAFC affirmed — finding that the DOE could be asserted.

      Estoppel:  Hunger argued that a claim amendment made during prosecution created an estoppel that, under Festo, prevented assertion of the DOE.  Primos countered that Festo estoppel should not apply because the “amendment bears no more than a tangential relationship to the accused element.”

      As the Supreme Court explained in Festo, when a patent claim is amended during prosecution for reasons relating to patentability, there is a presumption that the patentee surrendered all the territory between the original claim limitation and the amended claim limitation. 535 U.S. at 740. There are situations, however, in which a patentee may overcome that presumption. Id. One such situation is when the “rationale underlying the amendment may bear no more than a tangential relation to the equivalent in question.” Id. at 740-41.

      Here, Primos had twice amended the claim to: (1) require that the “plate” have “a length” and (2) require that the plate be “differentially spaced” above the membrane.  Because “every physical object has a length,” the first amendment did not narrow the scope of the claim.  The accused product included a differentially spaced dome rather than a differentially spaced plate as claimed.  “Because the accused device’s dome includes the spacing, the amendment was merely tangential to the contested element in the accused device, and thus prosecution history estoppel does not apply to prevent the application of the doctrine of equivalents.”

      Thus, this holding implies that Festo estoppel does not apply when the newly added limitation (or term) is found in the accused product. 

      Vitiation: The Court had streak expanding the vitiation doctrine under the all-elements rule.  Here, Hunter asserted that allowing a “dome” to be considered an equivalent to a “plate” would eliminate (or vitiate) that limitation from the claim.  The CAFC balked at Hunter’s implicit suggestion that there might be no equivalent for the claimed plate:

      Our precedent has recognized that “[t]here is no set formula for determining whether a finding of equivalence would vitiate a claim limitation, and thereby violate the all limitations rule. Rather, courts must consider the totality of the circumstances of each case and determine whether the alleged equivalent can be fairly characterized as an insubstantial change from the claimed subject matter without rendering the pertinent limitation meaningless.” Thus, because Primos’s theory of equivalence (i.e., that a dome is equivalent to the claimed “plate”) does not “effectively eliminate . . . [the ‘plate’ limitation] in its entirety,” it does not violate the all limitations rule.

      This case is in line with my alternate theory that vitiation only applies to linkages and noun modifiers.


      Interim Method Examination Guidelines

      In a recent notice, the USPTO has given the public until July 31, 2006 to provide comments on the PTO’s proposed guidelines for determining whether an invention is “patentable subject matter.”  This delay is intended to give the public a chance to react to the upcoming Supreme Court decision in LabCorp v. Metabolite. That decision is expected to discuss the patentability of various “methods” including business methods.