August 2006

EchoStar v. TiVo Patent Case Stayed Pending Inter Partes Reexamination

First, I’m happy to report that one of my favorite patent blogs, the 271 Patent Blog by Peter Zura is back in business. Welcome back Peter.

I’ve been covering the TiVo v. EchoStar case here. Peter has information about the companion case EchoStar v. TiVo here.  In the first case TiVo sued EchoStar for patent infringement, and in the second, EchoStar sued TiVo for patent infringement. This is great fodder for an antitrust article (or blog post). We have what may be a market duopoly with each side holding potentially essential intellectual property rights.

The take-home for patent attorneys involves the second case — the one filed by EchoStar.  That case was recently stayed pending the outcome of an inter partes reexamination filed by TiVo. In its decision to stay, the magistrate judge gave a good amount of weight to the fact that the reexam was inter partes — thus giving both sides an opportunity to continue the litigation in another form — as well as the statutory litigation estoppel effect against TiVo if the validity EchoStar’s patents are reaffirmed in the reexamination process.  In other words, the fact that the reexam is inter partes made the court more likely to stay the litigation.

CAFC and the Nebulous Motivation to Modify

Ormco v. Align Technology (Fed. Cir. 2006).

Align owns a couple of patents covering a system of using a series of sequential orthodontic retainers.  Each retainer in the series is used to shift the teeth a bit.  Claim 1 is typical and, according to the CAFC:

essentially requires (a) three or more appliances with geometries selected to progressively reposition teeth; (b) instructions regarding order of use; and (c) provision of the appliances in a single package to the patient.

On summary judgment, the patent was found not invalid and infringed.  The defendant appealed on obviousness and won.  

The opinion is interesting because the court gives only lip-service to the requirement of proof of motivation to modify the the teaching of prior art to achieve the claimed invention.  The prior art reference taught the progressive retainers, but did not teach the single package provisioning limitation. The only motivation modify provided by the court is as follows:

Under these circumstances, we do not think that the single package limitation makes the device of the ‘611 patent claims patentably distinct. Providing the devices to the patient in one package, as opposed to two packages or three packages is not a novel or patentable feature in the light of the well-known practice of packaging items in the manner most convenient to the purchaser.

The prior art reference actually appeared to teach away from the single package provisioning by stating that each subsequent retainer should be applied by a professional in an office visit.  Here the court dismissed that argument because the supposed teaching away of the prior art (requiring a professional visit for installation) does not necessarily mean that all of the retainers cannot be all packaged together. Although not explicit, this decision appears to diverge from the traditional thought of teaching away as a “suggestion” or implication and moves it to a world where the teaching away is explicitly and definite.

Regarding the instruction limitation — that limitation will never make an invention patentable in the medical field:

statutes and regulations promulgated under the Food, Drug, and Cosmetic Act (“FDCA”) generally require instructions for medical devices. Whether or not these regulations apply to the specific orthodontic devices involved here, they supply ample evidence of a motivation to provide instructions as to how to use the devices.

Note: The timing of this case is exceptional.  As the respondent and oppositional amici in KSR are preparing their briefs, this decision appears showing the flexibility of the modification test and its ability to allow the court to bend over backwards to achieve the right results. . . .

Lets hear from Experienced PTO Examiners: Are you willing to move?

UHaulSerious engineers and scientists don’t necessarily fit well in the policy-wonk culture of DC. Rumor has it that the whole Potomac area is a bit of a revolving door with the transient politico-intelligencia moving in-and-out as politics shift and families grow.  The USPTO is no different, and it is no secret that the agency is having trouble hiring qualified patent examiners as well as retaining those who are there and doing a great job.

One serious solution floated in the newest “Strategic Plan” calls for establishing regional offices, perhaps in Denver or Chicago, that could take some of the load.  For these regional offices to be successful, a cadre of experienced examiners would need to make the move to server as leaders in the new officers.  If you are an examiner, would you be willing to move west to the Windy City or Ski country? Comments are open.

Scherer on Compulsory Licensing

In 1977, noted economist F.M. Scherer wrote a monograph entitled “The Economic Effects of Compulsory Patent Licensing.”  At that time, there was pending legislation on compulsory licensing of nuclear technology.  In some ways, Scherer’s analysis thirty years ago can serve as the starting-point for determining whether to issue an injunction in our post-eBay environment. Specifically, Scherer argues that compulsory licensing should not be favored when any of the following are true:

  1. The patent holder’s share of the product market averaged less than 20% over the preceding five years; or
  2. The patent holder’s total sales of related products during the past five years as well as the reasonably anticipated sales over the next five years are less than ten-times the patentee’s R&D budget; or
  3. The patent holder exercised extraordinary creative initiative or extraordinary technical and financial risks in its innovative effort.

Scherer was concerned that injunctive relief was most important for small and especially micro-sized firms whose barriers to entry and lack of non-patent competitive advantages increased their relative valuation of patent importance.

Anticipated by the Internet

Doesn’t anyone think that debates over “combinations of references” are outdated? I usually only use one reference — Google.  Occasionally I combine Google with a directed PTO search — although even that will likely become more rare as Google continues to digest and index the history of written word. We are information rich, and arguments that exclude certain bits of knowledge from “prior art” based on inaccessibility do not make sense when that information was freely available online and indexed by Google. 

On another note, in the current regime, where the Internet is not a single reference, couldn’t a showing that two references would have both been retrieved with a single Google search serve as evidence of a motivation to combine the two?

Of course, these teasers suggest a new business model: Archiving of Google search results for later use during litigation.

PTO’s Strategic Plan

The PTO has released a draft “strategic plan” for the next five years. (2007–2012). I have not had a chance to review the draft yet except to note that the PTO continues to see human resources as its greatest challenge.  One interesting bit may foreshadow future changes:

An open question that the USPTO will address [is whether] there is some combination of examination processes and patent products that will better allow applicants to choose what determinations and results they need and what are the most efficient processes to pursue those results and at the same time provide a more efficient use of the examination resources of the USPTO by only providing the level of examination required by the applicant. 

Anyone in practice will agree that patents on biotech and pharmaceutical inventions are pursued in a much different fashion than are most mechanical or electrical type applications. An upcoming academic conference at Michigan will focus on this “diversity in innovation” and will focus on whether our current unified system should remain so. As with many of the trends in patent law today, Mark Lemley is out in front on this one as well.

Besides diversity across areas of technology, there is also a diversity amongst what patent owners want from the patent system.  A so-called “gold plated” system was proposed by Lemley, Doug Lichtman, and Bhaven Sampat earlier this year.

The PTO is asking for comments and will hold a public forum on September 26, 2006 at the Office.


KSR v. Teleflex: Rethinking Obviousness

Telefleximage KSR v. Teleflex (Supreme Court 2006).

By Dennis Crouch

The first round of briefs have now been filed in the much anticipated KSR case that will address fundamental questions of patentability. [Copies of briefs are found below] 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.

Obviousness has always been a “squishy” term, but over the past twenty-five years, the Court of Appeals for the Federal Circuit has developed a somewhat objective nonobviousness doctrine using a teaching/suggestion/motivation (TSM) test. According to the test, when various pieces of prior art each contain elements of an invention, the prior art can be combined together to invalidate a patent on the invention only when there is some motivation, suggestion, or teaching to combine the prior art.

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

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

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

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

Duffy, The Festo Decision and the Return of the Supreme Court to the Bar of Patents, 2002 S.Ct. Rev. 273, 340-41 (2003).  Now, Duffy, a former clerk of Justice Scalia, is part of the KSR team that is trying to change the rule of law.

The case itself concerns a patent covering a gas pedal for an automobile. KSR makes pedals for GM & Chevy trucks and was sued for infringement of the Teleflex patent.

Crouch’s notes: In my view, the question is not correctly presented because it focuses on the aspect of “proof.” Of course any decision on obviousness should be based on some sort of proof. I expect that the Court will, as they often do, ignore this particular question and instead answer the broader question of how “a court should go about deciding whether matter claimed in a patent should be deemed ‘non-obvious' subject matter.”  In fact, in its merits brief, KSR implicitly recognizes this more fundamental question in its summary of the case.

It is very likely that the Federal Circuit’s home-grown TSM test will be eliminated.  This leaves us with a gaping hole — the most likely successor is a return to Sakraida that would require a showing of some functional-shift caused by a combination of old elements. 

Petitioner KSR and a group of amici have recently filed their briefs on the merits.  Looking at the Amici thus far, you can see that KSR’s supporters are primarily law professors and large companies likely to get sued for patent infringement.  They are hoping to lower the obviousness standard — making it easier to invalidate a patent during litigation.  It is not clear, however, that the Sakraida standard is actually a higher patentability bar — that all depends on the meaning of a “functional-shift.”  That said, many of the potential defendants will be happy if the law becomes more unsettled — the result at least gives them more reason to appeal and would thus increase the plaintiff’s litigation costs (marginally lowering the number of infringement suits filed).  Notably, none of the major bar associations support the petitioner.

What follows is a brief review of those documents. The original documents themselves are accessible through links at the bottom of the article.

Petitioner KSR’s Brief

KSR’s strongest case is that the way the courts determine obviousness today (the TSM test) is not based on any statutory language nor is it based on any Supreme Court jurisprudence. Rather, the CAFC has created the TSM test out of whole cloth and crafted it in a way that inappropriately rejects Supreme Court precedent.  The extremely well researched and written brief traces the history of obviousness jurisdiction and uses that history as the primary basis for its conclusions.

One interesting argument is KSR’s position that provides 103(a) a condition for patentability rather than a condition for challenging patentability.  This appears to be an argument directed primarily to patent prosecution — that the applicant should be the one making an up-front showing of non-obviousness to satisfy section 103(a) rather than the PTO being forced to open with its rejection.   

Finally, KSR makes clear that the TSM test sets the patentability bar too low and allows too many technically trivial inventions to receive patent protection.

The only thing lacking here is any strong guidance for what obviousness test should arise to replace the soon to be displaced TSM test. KSR argues for little more than “adherence to [the Court’s] precedents.”  The result will certainly be a number of years of turmoil — especially on the side of patent prosecution.

Bush Administration in Support of Petitioner

The Government argues that the CAFC has “inappropriately broadens the category of nonobvious and therefore patentable inventions” by limiting the obviousness determination to a single rigid test. Rather, the Government would return to the rules of Graham v. John Deere, that try to determine “whether the claimed invention manifests the extraordinary level of innovation, beyond the capabilities of a person having ordinary skill in the art, that warrants the award of a patent.”

In particular, the brief points out that the TSM test is not wrong.  Rather, the problem is that the TSM test should not be the only test available to determine whether an invention is obvious. For instance, the Government argues that PTO Examiners should be able to reject claims based on their “basic knowledge” or “common sense.”

Law and History Professors (Sarnoff) in Support of Petitioner

Professor Sarnoff along with six other professors add to the debate by recognizing that the Supreme Court’s precedent, although “sound,” needs to be clarified: The professors

suggest [as a clarification to Graham] that the Court hold that the obviousness inquiry is designed to prohibit patents on inventions that could have been made by those skilled in the art within a reasonable period of time (following the time that the invention at issue was actually made) and within reasonable budgetary constraints.

The professors also suggest several modifications (clarifications) of the burdens of proof of patentability.  Their first suggestion would be to remove the evidentiary burden on the PTO (or challenger in litigation) to satisfy the TSM test. Thus, even if the TSM test remains in effect, the initial burden would presumably be shifted to the patentee to prove that the test is not satisfied.

Another clarification would relate to the presumption of validity.

[T]he Court should clarify that a clear and convincing burden of proof should not apply to issues for which the relevant evidence was not previously considered by the Patent Office.

Progress and Freedom Foundation in Support of Petitioner

PFF is a think tank that supports free markets and usually strong property rights. (Richard Epstein and John Duffy are both members of PFF advisory counsel).  A strong property regime in the patent system means that issued patents should be valid and should clearly show their scope of coverage.  PFF’s contribution is to explore how improper hindsight can be avoided even without strict evidentiary requirements:

But adopting the correct standard does not require that USPTO or the courts give in to subjective whim, because there are administrative mechanisms that can be used to make the exercise of subjective judgment fair and reasonably consistent over time.

For example, USPTO could adopt the current Federal Circuit test as a first cut, because it does indeed represent a crucial benchmark. Any invention which fails the “teaching-suggestion-motivation” test is clearly not patentable. But this need not end the inquiry. If the examiner thinks he/she has a special case in which this test does not capture the reality of the situation, perhaps the matter could be referred to a multiperson review committee, thus eliminating the influence of a single examiner’s whim. Or perhaps boards of outside experts could be established, or community peer review processes conducted over the Internet.



Cite as Dennis Crouch, “KSR v. Teleflex: Rethinking Obviousness,” Patently-O, available at

CAFC Condones District Court Preliminary Injunction Jurisdiction Despite Ongoing ITC Exclusion Order

CameraPatent.jpgFuji Photo Film v. Benun (Fed. Cir. 2006).

Fuji’s disposable camera patent litigation against Jazz Photo and Benun (Jazz’s owner) is ongoing.  (See, e.g.,  here and here).  The lower court granted a preliminary injunction stopping Benun from importing any otherwise infringing disposable cameras that did not originate from camera shells that were first sold in the U.S.  Because the ITC has an ongoing Exclusion Order for these products, the defendants challenged the district court’s jurisdiction to enjoin the activity.

Benun tied its jurisdiction argument to the ITC’s grant of jurisdiction.  Under 28 U.S.C., 1581(a), the ITC has “exclusive jurisdiction of any civil action commenced to contest the denial of a protest, in whole or in part, under section 515 of the Tariff Act of 1930.”  As the CAFC aptly found, however, the statute does not “even vaguely suggest[] that the statutory scheme for protesting a seizure . . . divests a district court of jurisdiction to consider an injunction on goods subject to a general exclusion order.” 

According to the CAFC, this distinction makes sense because of the major differences between a general exclusion order and a preliminary injunction to stop patent infringement. Specifically, a general exclusion order is a government action that merely excludes goods from entry.  The district court infringement case, however, can lead to damages and attorney fees as well as potential contempt proceedings for violation of a preliminary injunction.

Statistical Interlude: First 100 Published Applications

Interesting sideline results from some empirical work that I’m doing:

In 2001, the PTO began publishing patent applications 18 months after filing unless the applicant filed a nonpublication request.  To date, more than 1.2 million pending applications have been published. Of the first 100 published applications, 73 applications have issued as patents and 27 were abandoned.  None of the originally filed applications are still pending, and only one of the abandoned application still has a pending continuation. 19 of the abandoned applications have at least one family-member that is an issued patent.  Thus, leaving only 8 that are “fully dead” (i.e., with no known issued patents or pending family members).


Litigation Misconduct and Enhanced Damages

z4 v. Microsoft (E.D. Tex. 2006).

The Eastern District of Texas has been busy leading the post-eBay anti-injunction craze.  z4’s motion for injunctive relief against Microsoft was denied (see z4), but the small holding company was still awarded $115,000,000 in damages against the software giant.

Now, the court has added another $25,000,000 in enhanced willfulness damages and $2.3 million in costs and attorneys’ fees. z4 and its owner David Colvin successfully played the underdog:

[T]here is ample circumstantial evidence that to Microsoft[,] Colvin and his patent rights were insignificant because Microsoft never thought Colvin would be able to pursue his rights against it. The evidence presented at trial suggests that Microsoft considered z4 a small and irrelevant company that was not worthy of Microsoft’s time and attention, even if Microsoft was potentially infringing its patents.

In economics literature, this potential for “underenforcement” is a classic justification of punitive damages. 

The court then went through a laundry list of examples of Microsoft’s litigation misconduct that formed the basis for the finding of an exceptional case as well as a partial basis for the enhanced willfulness damages.  Some of these are listed below:

The Moncau email. It wasn’t until the Sunday one-day before trial that z4 was finally a able to depose Microsoft’s witness Moncau, and during that deposition Moncau revealed information about an important email that had been sent to two other Microsoft witnesses discussing critical information regarding operation of Microsoft’s product.  That email had never been produced even though Moncau testified that he had provided all his documents to Microsoft’s counsel over one year before the deposition.

Nevertheless, the email had never been produced by Microsoft during discovery despite the fact that it was between three Microsoft employees referenced in the email, all of whom allegedly gave all of their relevant documents to Microsoft’s counsel for production. Making matters even worse, Defendants admit they were aware of the Moncau email several hours before Moncau’s deposition, but still withheld it from z4 until z4 found out about it during questioning during the deposition. This raises a serious question as to whether the email would have ever seen the light of day, had z4 not uncovered it during Moncau’s deposition the day before trial.

At trial, the Court indicated to the Jury that Microsoft had improperly withheld the communication.

The Hughes Database. Microsoft attempted to use a summary chart at trial based on an underlying database.  In his deposition, however, Hughes, the chart’s creator, testified that the database did not exist.  One week after the deposition, Microsoft did, in fact, produce the data stored in file on a CD labeled “Source Code,” but z4 never found the database and, even after z4 asked, Microsoft never corrected Hughes original testimony or informed z4 of the database. 

It also turned out that the summary was an inaccurate representation of the database and that Microsoft had not accurately disclosed the method used to create the summary chart.

The Court determined that Microsoft had attempted to mislead z4, the Court, and the jury and excluded Hughes from testifying with regard to the database and his summary chart.

Voluminous Exhibit Tactic. Microsoft marked over 3,000 exhibits for trial, but only admitted 107 of these.

The Court concludes that Defendants attempted to bury the relevant 107 exhibits admitted at trial in its voluminous 3,449 marked exhibits in the hope that they could conceal their trial evidence in a massive pile of decoys. This type of trial tactic is not only unfair to z4, but creates unnecessary work on the Court staff and is confusing and potentially misleading to the jury.


Finally, the Court is greatly disturbed by the repeated instances where Defendants actions go beyond what can be dismissed as a mere appearance of impropriety and collectively appear to represent a pattern which is of disappointment to the Court and a disservice to legitimate advocacy. The repeated examples, some of which are not even mentioned here, of what can be described as nothing less than misleading on the part of Defendants, justify a conclusion that Defendants committed litigation misconduct. This conduct, coupled with the fact that Microsoft was found to have willfully infringed the patents-in-suit results in this case being deemed exceptional. Accordingly, the Court awards z4 reasonable attorneys’ fees and expenses, excluding expenses related to expert witnesses.

Microsoft is expected to appeal this decision.  z4 will likely cross-appeal the denial of injunction.


Patent Reform Bills: Do Not Forget the Details

ED: The following note was submitted for anonymous publication by a practicing patent attorney:

For all the public debate over controversial broad objectives in the various pending patent reform bills, there has been remarkably little published academic or other attention to whether or not the extensive new specific draft language in these bills will accomplish those objectives without drafting errors creating unintended ambiguities in judicial interpretations.  This note will particularly question, an example that seems to be in common to the pending bills, the draft language for the crucial definition of the “effective date” of an application or patent. 

The seriousness of current patent reform legislative efforts has been more than adequately demonstrated over the past two years.  There have been a number of Congressional hearings, other public debates and IPL association activities over the [evolving] versions of H.R. 2795 in 2005, the Berman/Boucher H.R. 5299 in 2004, major FTC and other studies and reports on patent reform, etc.  Now, on August 4, 2006 Senators Hatch and Leahy have introduced “their own” Bill, S. 3818, the “Patent Reform Act of 2006”( for which there will be a House equivalent).  Although there will be considerable further debate into the next term of Congress, passage of some form of major new patent legislation next year seems quite likely.   Many of these patent reform proposals are not that controversial.  In particular, clarifications of “willful infringement,” §103(c), inter partes reexaminations, assignee filing, restoration of the prior patent venue statute, an “opposition system” of some kind, elimination of most interferences (and other “secret prior art” business investment uncertainties) with some form of “first inventor to file” plus some form of associated changes in §102 and “prior user” defenses,  etc.  Thus, there are highly likely to be a number of major changes in the present patent statute even if the most controversial provisions end up removed or amended in the final legislation.   

This note is not about any controversial issues.  Rather, the intent here is simply to encourage better reviewing, by both the patent bar and academia, of specific drafting language issues that might present serious future ambiguities or unintended legal consequences, which seems to be getting insufficient attention.   Whatever version of any of these draft bills is enacted, it will generate a great deal of new statutory language for which there will be no legal precedents.  This new language will at best only be eventually interpreted in “cases of first impression” by individual panels of the Federal Circuit.   That should give readers pause to consider that some Federal Circuit interpretations of even relatively old patent law language have been quite controversial, and some have even been unanimously overruled by the Supreme Court.  This in turn should strongly suggest that very careful attention be paid to completely new and untested statutory language to insure that it is as completely unambiguous and as completely free of possible unintended interpretations as possible.   All members of the patent bar and their clients will be greatly affected by any of the pending “patent reform” bills. 

No doubt those authoring the specific legislative language consider that it does not have any possible ambiguities or misinterpretations, to them.  However, legal and Congressional history is full of such surprises.   The frequent necessity for subsequent “technical corrections” legislation is evidence enough.  For example, it took several years for passage of technical correction legislation to fix an unintended problem created by the 1999 AIPA legislation’s amendment of 35 USC §102(e).  Patent law is a specialized legal area of uniquely semantically clever lawyers, who unfortunately rarely apply themselves to legislation in advance.   Furthermore Congressional staff members, no matter how brilliant, are highly unlikely to have sufficient patent law practice background to be able to anticipate all of the possible interrelated consequences of major changes in patent statutory language. 

Thus, there should logically be a much broader participation by the patent bar in careful and critical reading of draft legislation and providing thoughtful comments on specific wording in time to fix it.  That is, not just depending on brief summaries of the intentions or alleged effects of this legislation by proponents or opponents.   Especially from lobbyists who have never practiced patent law, “planted” newspaper and magazine articles, and other very incomplete and unreliable sources.  More advance consideration is needed by those who can actually understand this legislation, the legal problems it is addressing, and the full ramifications of the specific legislative language.  In many cases this may be merely to suggest minor wording changes.  Even if the legislation itself is not changed, the legislative history might be improved in some cases.  This would also seem to be a far more meaningful activity for law school professors than non-pending legislative proposals which no one with any influence is supporting.  

To pick just one example in this draft legislation language, consider the critical S. 3818 definition of the term “effective filing date of a claimed invention,” which is identical or similar to that of  other patent reform Bills.   All competent patent attorneys are familiar with this date and its criticality.  It is even more crucial for the proposed “first to file” system.  Under long established current case law it means the filing date of a patent application having full 35 USC §112 support for what is being presently claimed (in its subsequent patent or in any other pending applications claiming priority date benefit therefrom).  It has not ever meant the filing date of an application containing a bare unsupported claim with no §112 enablement of any kind.  

So, let us consider the actual language of S. 3818 “SEC. 3” on p. 2.   It contains in subsections (h)(1) and (2) a new definition of the “effective filing date of a claimed invention.”  It states that the “effective filing date of a claimed invention” is:

“(1) the filing date of the patent or the application for patent containing the claim to the invention;  or 

 (2) if the patent or application for patent is entitled to a right of priority of any other application under  .. or an earlier filing date in the United States under .., the filing date of the earliest such application in which the claimed invention is disclosed in the manner provided by the first paragraph of section 112.” [Emphasis supplied]

First, note that SEC.3 (h) subsections (1) and (2) are defined in the alternative – “or”.  Note that the first alternative, (h)(1), has no §112 requirement at all.  It would literally provide an “effective filing date” for an application or patent merely “containing the claim” irrespective of whether or not it ever had any §112 enablement support as of its filing date, incongruously unlike the alternative (h)(2).  [As all patent attorneys know, a §112 enablement attempted to be added after the filing date is illegal “new matter.”]  Thus a literal reading of Sec. 3 (h)(1), especially as read in contrast to alternative (h)(2) (normal statutory interpretation) would give an “effective filing date” to a patent application filed with a bare claim to an invention even if there was no enablement example or description whatsoever for that claimed invention!   That is, granting a “first inventor to file” date for a bare concept suggestion with no teaching of any way to make or use it.   Yet, if that same application or patent had a foreign or U.S. priority claim it would not get that date benefit, because then (h)(2) would apply instead, appropriately requiring that “the claimed invention is disclosed in the manner provided by the first paragraph of section 112.”  Furthermore, would not applicants filing a continuation or divisional also lose this literally defined (h)(1) original effective filing date by thereby converting the application and its ultimate patent from (h)(1) to (h)(2)?

It someone can clearly explain why a normal judge would not read this proposed statute this way if it is enacted, this reader would gratefully appreciate the enlightenment.

Now, confusing this reader further, please note that on page 5 of this Bill you will find in a new §102(b)((3) another, different, and not cross-referenced definition [why?] of the same critical term for when a patent or application is “effectively filed,” but here only “under subsection (a)(2).” This effective filing date definition is only with respect to “subject matter described in the patent or application -”..”as of the filing date ..” [emphasis supplied]  

There is also a subparagraph Sec. 3 (h)(2)(i) on page 3 stating that:

 “(i) The term “claimed invention” means the subject matter defined by a claim in a patent or an application for a patent.”

Why is this Sec. 3 (h)(2)(i) definition presented only as a subparagraph of (h)(2), thus by normal statutory interpretation only defining the term “claimed invention” just in (h)(2)?  As noted above, the same term “claimed invention” also appears in (h) itself prior to both (h)(1) and (h)(2).  Was this deliberate for some reason?

Further as to the vital question of what would still be prior art, or not, this p. 3 et sec S. 3818 version of a whole new 35 USC §102 definition of prior art seems shorter and simpler than that of  prior bills.  That may be desirable, but it should also trigger patent attorney and client interest in what is being left out of the present statute and all its case law, and how situations will be handled if this Bill becomes law.  For example, the present and very important “on sale” bar defense would be eliminated in this and other pending legislation. However, the prior pending H.R. 2795 §102 had been revised to make it clear that software in one’s own sold products would remain prior art to later attempts of others to patent it.  That was widely considered vital to avoid judicial debates over whether or not that internal software would be considered “publicly known,” since that would be the only other §102 defense left for this now-common situation under this new §102 .   Yet S. 3818 seems to have left out that vital provision. 

Finally, just for a couple of other drafting examples, the S. 3818 amendment of §103 in (c)(1)(A) on page 6 restores an undisputed typographical error previously caught and corrected in the amended version of H.R. 2795.  Namely, “through” instead of “though” in: “A patent for the claimed invention may not be obtained through [sic] the claimed invention;..”   Also, what does the last line of S. 3818 Sec. 5 (b)(2) on p. 20 mean by “..such claim, the infringer.”?  

In conclusion, there are undoubtedly other potential unintended interpretations or drafting errors subject to unpredictable D.C. and Federal Circuit de novo interpretations in all this new language that ought to be under a lot more academic and other public discussion.   Especially those relating to 35 USC §102 and other extremely important statutory sections affecting all aspects of patent law practice.  The introductory remarks for S. 3818 by Senator Hatch have welcomed further useful input on this draft legislation.  Careful and timely review and correction of specific language ought to be provided by all those in a position to do so.

Cite as NOTE, “Patent Reform Bills: Do Not Forget the Details”, Patently-O, available at

Specific Exclusion Exception to the Doctrine of Equivalence

MucosalLayerCook Biotech v. ACell (Fed. Cir. 2006).

Cook’s claims were directed to a urinary bladder submucosa derived tissue graft composition that is entirely delaminated from “the luminal portion of the tunica mucosa.”  The graft can be implanted to support damaged tissues.  A number of claim construction and inventorship issues were raised.  However, an interesting aspect of the case is the court’s further development of the specific exclusion exception to the doctrine of equivalents.

The specific exclusion exception can be considered part of the “all limitations rule” and operates to exclude from the doctrine of equivalents, any elements “specifically excluded by a claim limitation.”

A claim that specifically excludes an element cannot through a theory of equivalence be used to capture a composition that contains that expressly excluded element without violating the “all limitations rule.”

Here, the accused infringing product contains at least a portion of the luminal portion of the tunica mucosa.  ACell argued, and the CAFC agreed, that the DOE cannot be extended to the accused product without rendering the delamination requirement meaningless.

Permitting appellees to assert such a theory of equivalence would effectively remove the requirement that the urinary bladder submucosa be delaminated from “the luminal portion of the tunica mucosa.”

Although the CAFC does not use the term “vitiation” here, the specific exclusion exception is essentially the same concept. As the court held in the 2005 Freedman Seating case,

an element of an accused product or process is not, as a matter of law, equivalent to a limitation of the claimed invention if such a finding would entirely vitiate the limitation.


Patently-O: Judge Takes Stand Against Forum Shopping

Collaboration Properties v. Tandberg ASA, 2006 U.S. Dist. LEXIS 43930 (N.D.Cal. 2006)

Defendant Tandberg waited for six months before moving to amend its answer to add certain defenses and counterclaims.  At about the same time, Tandberg filed its own patent infringement lawsuit (through a holding company) against Collaboration Props in the Eastern District of Texas. Judge Patel of the Northern District of California was clearly peeved at Tandberg’s litigation strategy and forum shopping. 

The court’s concerns about gamesmanship have not diminished, particularly in light of Tandberg’s ongoing aggressive and arguably frivolous motion practice.

Despite these concerns, Judge Patel granted leave to amend subject to a “reasonable condition” that Tandberg’s holding company submit to personal jurisdiction in California and allow the case to be consolidated there.  Tandberg refused and so the court also refused to allow the amended answer and counterclaims.

Note: A reader e-mailed the decision to me because it is apparently the first federal court decision citing Patently-O. In particular, the court cites a draft version of patent reform legislation that I have stored online. At his blog, Ian Best, has compiled a directory of all 27 cases that thus far cite to legal blogs.  (A total of 8 legal blogs have been cited).  Mr. Best has also compiled a directory of all 489 law review articles that cite to legal blogs.  It turns out that Patently-O is in the top-ten with seventeen citations, thirteen of them coming in the past four months.

Presumption of Irreparable Harm

ScreenShot031Christiana Inds. v. Empire Electronics, 2006 U.S. Dist. LEXIS 54210 (E.D.Mich. 2006).

One of the first questions likely to be decided post-eBay is whether infringement of a patent provides any presumption of irreparable harm when judging the equitable factors associated with a permanent injunction. In z4 Tech, a Texas district court could find no support for “the application of a rebuttable presumption of irreparable harm with regard to a permanent injunction.”  In Christiana, however, the district court found that such a presumption continues to exist — at least for preliminary injunctions:

Defendant asserts that in Ebay, the Supreme Court eliminated the presumption of irreparable harm for preliminary injunctions upon a showing of validity and infringement. Plaintiff argues, and this Court agrees, that Ebay did not invalidate the presumption

Christiana (Denying motion for reconsideration of order granting preliminary injunction.)

In the recent case of Abbott v. Andrx, the CAFC took a step towards answering that question — loosely (with a double-negative) implying that a presumption of irreparable harm in a preliminary injunction may be established by showing a likelihood of success on the merits.

[W]e conclude that Abbott has not established a likelihood of success on the merits. As a result, Abbott is no longer entitled to a presumption of irreparable harm.

Abbott v. Andrx. Earlier cases have applied the presumption to permanent injunctive relief as well.  For instance, in the 2004 case of Arthrocare v. Smith & Nephew, the Delaware district court held that “[a]s the patentee, Arthrocare presumptively has suffered irreparable harm throughout the duration of Smith & Nephew’s infringing activities.” Even the District Court in eBay v. MercExchange found that a presumption of irreparable harm flowed to the patentee, although in that case, the court found the presumption to be rebutted.

Injunction Granted to TiVo; Injunction Denied in Favor of Toyota.

TiVo v. EchoStar (E.D.Tex. 2006)

TiVo has been granted an injunction against EchoStar stopping it from installing or selling infringing DVR’s and ordering EchoStar to disable DVR functionality in the majority of its installed customer equipment. In granting the injunction, the most compelling factor appears to be that TiVo and EchoStar compete head to head in the DVR marketplace.

Defendants compete directly with Plaintiff – Defendants market their infringing products to potential DVR customers as an alternative to purchasing Plaintiff’s DVRs. The availability of the infringing products leads to loss of market share for Plaintiff’s products.

The court did not stay the injunction pending appeal. According to the district court, “[w]ithout a stronger showing that the jury’s verdict will be overturned in its entirety on appeal . . . allowing the ongoing infringement is not within the public’s interest.” However, in an emergency appeal, Chief Judge Michel has granted a temporary stay to “preserve the status quo while the court is considering the parties papers.” Briefing on the Stay will be completed by the end of August.

Paice v. Toyota (E.D.Tex. 2006).

One day earlier, the same Judge (Judge David Folsum) denied Paice its injunction against Toyota. Toyota was found to infringe Paice’s patents on hybrid vehicles under the doctrine of equivalents.  Paice, however, does not manufacture or sell any vehicles, but is geared toward licensing.  Because Paice could not show how its licensing activities would be irreparably harmed from the injunction (and because Toyota would certainly be irreparably harmed) the court denied the request for an injunction. In its findings, the Court made the following rulings:

  • A patentee has no presumption of irreparable harm even after the patent is found valid and infringed.
  • The patents relate to only a small portion of the Toyota products — thus an injunction would be quite onerous on Toyota.
  • Plaintiffs have offered to license the technology to Toyota — a demonstration that money is sufficient.

The court did not explicitly assign any weight to the fact that (1) infringement was only under the DOE and (2) infringement was not found to be willful.  There is some precedential weight, however, to the position that a strong showing of infringement should lead to a greater likelihood of a permanent injunction.


Monsanto’s Roundup Ready Patents Survive Appeal

Monsanto v. Scruggs (Fed. Cir. 2006).

Back in 2000, Monsanto sued Scruggs for infringement of its patents covering Roundup Ready (R) soybeans and cotton. Scruggs, a Mississippi farmer, had allegedly replanted seeds that he had grown on his farm. Monsanto won the infringement case on summary judgment and an injunction issued.

First Sale Doctrine: On appeal, Scruggs argued that because he purchased the seeds in an unrestricted sale, he was entitled to use those seeds in an unencumbered fashion under the doctrine of patent exhaustion. Scruggs’ first sale argument failed for two reasons. First, although Scruggs never obtained a license to use the seeds, he was supposed to under Monsanto policy — therefore the sale was not “unrestricted.” Second, as the CAFC held in McFarling, rights to second generation seeds are lost by unencombered sale of first generation seeds.

The fact that a patented technology can replicate itself does not give a purchaser the right to use replicated copies of the technology. Applying the first sale doctrine to subsequent generations of self-replicating technology would eviscerate the rights of the patent holder.

Antitrust Counterclaims: As a countermeasure, Scruggs asserted that Monsanto was misusing its patents and violating antitrust laws through its licensing requirements that include “an exclusivity provision, a no replant policy, a no research policy, . . . the payment of a technology fee,” and use of Roundup brand herbicide (with certain limitations). The CAFC made quick-work of these arguments — many of which were previously decided in the 2004 MacFarling case. By rearguing the previously decided in MacFarling, Scruggs appears to be set-up for a petition for certiorari based on those general principles.

In dissent from the antitrust conclusion, Judge Dyk argued Monsanto’s Roundup requirement to be unlawful tying.  More particularly, the requirement to use Roundup branded herbicide should be considered unlawful tying even if not other manufactuer had regulatory approval because that license term would chill activity of competitors in seeking their own regulatory approval.

A potential herbicide competitor thus would be concerned that, even if it secured government approval of its product, use of the approved herbicide would still be barred under the contracts. The elimination of such potential competition is not permissible under the antitrust laws.

Interestingly, neither the majority nor the dissent questioned the “no research” requirement of the license that prohibited research and/or experimentation on the seeds.  In fact, all three judges explicity agreed that restriction is a legitimate “field of use” restriction.  (Perhaps legitimizing a contract-based anti-circumvention requirement à la DMCA.).

The CAFC appears to have also ignored the State of Mississippi’s amicus brief arguing, inter alia,

Permanent Injunction: The lower court had issued a permanent injunction based on the CAFC’s “traditional rule.”  Based on eBay, the CAFC vacated the permanent injunction and remaneded for a full reconsideration of that final issue.


“Consisting Of” Claim Transition Does Not Exclude Unclaimed Impurities

Conoco v. EEI (Fed. Cir. 2006).

Conoco’s asserted claims were directed to drag reducing agents for gas pipelines.  EEI lost a bench trial and appealed on claim construction.  One claim in particular included the transition “consisting of” rather than the more open-ended “comprising.”

First, the CAFC refused to review the construction de novo because it had not been properly objected to at trial. Reviewing for clear error (substantial evidence) the appellate panel easily found that certain impurities found in the accused product did not allow EEI to escape infringement even though the closed “consisting of” language was used.

[I]mpurities that a person of ordinary skill in the relevant art would ordinarily associate with a component on the “consisting of” list do not exclude the accused product or process from infringement.


Federal Court Rejects Jurisdiction Over Inventorship Claim

Stevens v. Broad Reach, 79 USPQ2d 1501 (W.D.Mo. 2006).

Feeling he had been slighted by not being listed as the inventor on a patent application directed to a liquid polymer blender, Kirt Stevens sued — seeking a judgment that he is the inventor of the claimed invention and an injunction forcing an amendment to the pending application.

On motion, however, the court dismissed the claims for lack of subject matter jurisdiction. In particular, the court found that amendment of inventorship in a patent application is governed by 35 U.S.C. § 116.  That statute provides that amendment be made before the PTO and, according to the court "does not provide a private right of action in federal court to resolve inventorship disputes in patent applications."

Case dismissed.

Notes: Of course, Stevens cannot take action under Section 116 without the cooperation of the other side.  Suggestions for Stevens? The application, filed in October 2004, has apparently neither been published nor issued as a patent.

Object when jury instructions include disputed claim constructions

Serio-US v. Plastic Recovery Tech (Fed. Cir. 2006).

The jury found that PRT did not infringe Serio’s patents on automatic trash dumpster locks.   

Post-Trial Practice: After the jury’s finding, the plaintiff did not move for JMOL or a new trial — thus forclosing an appeal on the question of infringement except for prejudicial error (which was not found). In addition, the plaintiff did not object to the jury instructions which included the court’s claim interpretations — without an objection these instructions cannot be overtuned unless they are a "miscarriage of justice."  No miscarriage was found.

Exceptional case: The lower court did not find this to be an exceptional case — a finding affirmed on appeal:

Exceptional cases usually feature some material, inappropriate conduct related to the matter in litigation, such as willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, conduct that violates Federal Rule of Civil Procedure 11, or like infractions. . . . Absent misconduct in the litigation or in securing the patent, a trial court may only sanction the patentee if both the litigation is brought in subjective bad faith and the litigation is objectively baseless.

Because there was evidence that the case was not brought in bad faith, the refusal to award attorney fees was justified.


Noonan’s Corner Office: Amgen v. HMR

By Kevin Noonan.

The peripatetic case of Amgen v. HMR has once again been reviewed by the Federal Circuit.  No. 05-1157, decided August 3, 2006.  Once again the Court has failed to lay the several issues in the case to rest.  While affirming infringement and validity of two of the patents in suit, the court has remanded the matter once again to the district court in view of its de novo claim construction, and perhaps predictably disagreed with the lower court and reversed a determination of infringement under the Doctrine of Equivalents.

The case has two interesting aspects.  First, citing the rubrics of Phillips the court came to its own determination of the meaning of the term “therapeutically effective amount” with regard to a claim for recombinant erythropoietin (EPO).  EPO is a naturally-occurring hormone that stimulates the body to produce red blood cells, and its absence (or insufficiency) causes anemia.  The standard clinical measure of anemia is the hematocrit, or the percent of whole blood comprised of red blood cells. In construing the term “therapeutically-effective amount,” the district court had required that EPO falling within the scope of the claim containing the term increase hematocrit and have any other biological properties of naturally-occurring EPO. 

The Federal Circuit disagreed, and in doing so provided a nice illustration that Phillips has not changed the Court’s capacity for arriving at its own idiosyncratic construction.  The Court determined that the lower court had improperly focused on hematocrit, which is one of EPO’s biological properties recited in the specification, to the exclusion of several others, including increasing stimulation of reticulocyte response, development of ferrokinetic effects, erythrocyte mass changes, and stimulation of hemoglobin.  The Court noted in particular that the specification recited that the therapeutic properties of recombinant EPO “included” all of these, and that the specification further stated that recombinant EPO was therapeutically useful even if it lacked some but not all of these properties. 

Of course, the Court seems to have not considered the fact that all of the recited properties are related to the clinical measurement of hematocrit, since they are all part of the biological developmental pathway leading to an increase in the number of red blood cells in blood.  Thus, by cherry-picking the language of the specification, the Court was able to arrive at a facially-reasonable claim construction that seems to run contra to clinical reality.  This portion of the matter has been remanded, for further consideration in view of the Court’s claim construction, on the issue of invalidity over prior art references to EPO preparations that did not increase hematocrit but may have had one of the other recited biological properties.

The second issue is the doctrine of equivalents.  The “predicted” recombinant EPO protein contains 166 amino acids, but as produced naturally (and using HMR’s recombinant process) EPO has only 165 amino acids.  The issue before the Court was whether Amgen was entitled to assert claims to HMR’s recombinant EPO as an equivalent.  The district court twice found in the affirmative, and the Federal Circuit remanded in its first review so the lower court could consider the issue in view of Festo. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 740–41 (2002).  The district court having arrived at the same conclusion, infringement under the doctrine of equivalents, the Federal Circuit reversed, finding estoppel arising during prosecution.  Specifically, the Court held that  preliminary amendments resulting in claim language reciting the 166 amino acid species were not made for reasons tangentially related to the asserted equivalent, as found below, but raised prosecution history estoppel that precluded asserting the claim against HMR’s 165-amino acid species.  The Court’s holding was based in part on Amgen’s cancellation of claim limitations related to “fragments” of the 166-amino acid species, and in part because it found erroneous the district court’s determination that the amendments were made to limit the species to human EPO (the Court noted that if Amgen had intended to so limit the claims the mere addition of the word “human” would have been sufficient).  Finally, the Court rejected the notion that amendments made to avoid a double-patenting rejection were “tangential to patentability.”

For those keeping score, the Court in its two decisions has affirmed the district court’s judgment that two of Amgen’s patents are not invalid and are infringed, also affirmed that another Amgen patent is invalid, reversed a finding of infringement under the doctrine of equivalents (but affirmed that this patent is also not invalid), and for one patent remanded the issue of invalidity to the district court while affirming that if valid this patent is also infringed.  As noted in Judge Michel’s dissent (over the claim construction issue), the district court is now in position to decide whether to grant an injunction, keeping HMR’s competing EPO product off the market until at least the expiration of two of Amgen’s patents.  For the parties, that may be (or have to be) enough.