November 2006

Supreme Court: Current Test of Obviousness is “Gobbledygook”

KSR v. Teleflex (Supreme Court 2006, Oral Arguments).

The doctrine of nonobviousness is the cornerstone of American patent law.  I was reminded today by Phil Swain that our nonobviousness statute, section 103(a) of the Patent Act, was drafted by Judge Giles Rich.  Judge Rich is the most celebrated patent judge of this century.  His statutory masterpiece eliminated the amorphous concept of a “flash of genius” and replaced it with our now ubiquitous objective standard of a person having ordinary skill in the art.  In Graham v. John Deere, the Supreme Court reinforced 103(a) with its concept of case-by-case consideration of secondary indicia of nonobviousness as a way to avoid potential hindsight bias. 

Later, as the Federal Circuit developed its own patent jurisprudence, the court hit upon the teaching-suggestion-motivation test as another anti-hindsight rule.  That test requires evidence of some reason to combine various references that each teach part of an invention.  Thus, if there is no evidenced reason to combine the references, then the invention will be deemed nonobvious. The test, known by acronymists as “TSM,” has been labeled as a poster-child for bad patent behavior.  According to opponents of the test, the bright-line test makes patents too easy to obtain — resulting in a glut of patents covering trivial improvements. Those patents, in turn, hold-up industry research and greatly increase transaction costs and legal fees. 

In KSR v. Teleflex, the Supreme Court is questioning whether the TSM test should exist as the sole determinant of obviousness.  Question presented:

Whether the Federal Circuit has erred in holding that a claimed invention cannot be held ‘obvious’, and thus unpatentable under 35 U.S.C. § 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.”

Until a few months ago, the common myth of the TSM test was that it required at least some hard evidence that provided at least a minimal reason to combine various prior art references.  It is that myth that provided the impetus for Supreme Court review. In recent months, however, we have learned that the CAFC’s version of the test allows for evidence that is implicit, based on common knowledge, found generally in the prior art as a whole, based simply on the nature of the problem or simple logic, or concluded by experts. See Kahn, Dystar, Ormco, Alza.  This jitterbug by the CAFC actually gives KSR much of what it wanted and smears the edges of the mythical bright-line rule.  Justice Scalia picked up on transition during oral arguments — noting that the recent cases leave the test “meaningless. [The CAFC] essentially said ‘our test simply reduces to what [KSR seeks] in this litigation.’ . . . this is gobbledygook. It really is, it’s irrational.” Justice Alito had a similar concern with the “new” TSM test:

J. Alito: “But what is the difference between asking whether something is implicit in the, in the prior art and simply asking whether it would have been obvious to a person of ordinary skill in the art?:

As discussed earlier on Patently-O, all the major patent bar associations filed briefs that support the current TSM test.  In a brilliant move, KSR neutralized those briefs by implying bias based on “the enormous fees that litigation of invalid patent claims can generate.” KSR Reply Brf. CJ Roberts appeared to buy-in to that analysis, joking that the filings “just indicate[] that this is profitable for the patent bar.” KSR Oral Arg.

One concern of the Court is whether modification of the obviousness doctrine would spoil long-settled rights.  The Justices, however, mentioned on several occasions that over the past year, the CAFC may have already upset any settled rights.

Mr Goldstein [for Teleflex]: “[The CAFC has had decades to look at this to try and elaborate a standard.”
J Breyer: “And it so quickly modified itself.”

Decision in February: Reports from the hearing noted that Justice who used the term “TSM” spoke with disdain and were highly critical of the test.  Although oral arguments are always full of counterfactuals and wild theory testing, the level of criticism supports the conventional wisdom that the TSM test is likely to be eliminated as “the exclusive” test.  Cases will rather be decided on a case-by-case basis using the standards of Graham v. John Deere. Already issued patents will still be given a presumption of validity, although it will be difficult for some courts to do this with a straight face.  The new key to avoiding invalidity will be secondary indicia of nonobviousness. Look for a 9–0 decision in early February.

TSM is not Dead: Much of the oral argument was filled with an attempt to simply understand the TSM test, and to figure out what is meant by a “motivation.”  If they cannot figure-out the test, they would likely completely trash-it as unworkable. Of course, by the time the opinion is penned, they will understand the current test and the test will not be scrapped as a whole. Rather, they will follow the Government’s suggestion that TSM continue to be used as a “valid means of proving obviousness.” In addition, however, flexibility will be added to allow for other ways of determining nonobviousness.

Here are some quotes from oral arguments:

CJ Roberts: “[T]the Federal Circuit’s approach focuses . . . on prior art — as opposed to, I would say, common sense.” 

J Scalia: “And in the last year or so, after we granted cert in this case after these decades of thinking about [the obviousness doctrine, the CAFC] suddenly decides to polish it up.”

J. Breyer: “I’ve read it about 15 or 20 times now, I just don’t understand what is meant by the term ‘motivation.’”

Mr. Hungar [for US Gov’t]: “Construed as the sole means of proving obviousness the teaching suggestion motivation test is contrary to the Patent Act, irreconcilable with this Court's precedents and bad policy. It asks the wrong question and in cases like this one, it produces the wrong answer. It should be rejected and the judgment of the Court of Appeals should be reversed. . . . It’s just foreign to this Court’s precedents as a mandatory prerequisite for obviousness.”

Mr. Dabney [for KSR]: “[T]here is no legal regime that is a greater generator of patent litigation than the teaching suggestion motivation test that is urged by the respondent.” [DDC: Is this true?].

Documents and Links:

Cite as Dennis Crouch, “KSR Gobbledygook,” Patently-O, available at http://www.patentlyo.com.

Revising the Northern District of California’s Local Patent Rules

Northern District of California enacted its patent rules in January 2001.  The district is now ready to reevaluate those rules and has asked for public comments and concerns. Ed Reines, who is on the N.D. Patent Local Rules Committee has asked whether Patently-O readers have some input on potential improvements to the rules:

The committee knows that the patent community has a variety of views on patent local rules.   Because a healthy debate and full ventilation of issues is likely to lead the best outcome, the committee seeks broad input on potential changes to the patent local rules.

The Northern District of California patent rules have served as a set of model for a number of districts contemplating their own patent specific local rules. In addition, many district judges across the country require litigants to follow some form of the rules. Comments should be e-mailed to patentlocalrulescommittee@gmail.com and submitted by December 15, 2006.

My initial comments: (1) We need to revisit claim construction proposals and get the court involved with the technology a bit earlier.  As we have seen in several CAFC cases, the claim construction process requires a very good understanding of both the invention and the accused infringing device.  The CAFC has also now clarified the roles of various types of evidence used in claim construction. Claim construction proposals should include clear tables showing how the various levels of evidence support the proposed claim construction. (2) In addition, the court should set-up rules to ensure that there is an early understanding of whether the plaintiff has a chance at obtaining injunctive relief.  This will help guide settlement.

Are Design Patents Worthless? Preliminary Injunction Vacated

PatentlyO2006002PHG Tech v. St. John (Fed. Cir. 2006).

PHG’s design patents cover ornamental designs for medical label sheets.  PHG sued St. John’s for infringement and was awarded a preliminary injunction based on the court’s belief that PHG had a reasonable likelihood of success on the merits.

St. John’s appealed the preliminary injunction (PI) to the Court of Appeals for the Federal Circuit (CAFC).

The CAFC reviews a PI grant for abuse of discretion, and only vacates a PI when there is “clear error.”  In general, however, a PI should only issue after weighing “(1) the likelihood of the patentee’s success on the merits; (2) irreparable harm if the injunction is not granted; (3) the balance of hardships between the parties; and (4) the public interest.”

The first factor is a deal-breaker — if the plaintiff does not show a likelihood of eventually succeeding in the case then a PI should not be awarded. Here, St. John’s argued only the first factor based on its argument that PHG’s patents impermissibly cover designs that are primarily functional. 

Functionality in design cases is a tricky beast. 35 USC 171 requires that a design be “ornamental,” and this has been interpreted to exclude designs that are “primarily functional rather than ornamental.”  Of course, every design has some function . . . One way that the court gets at functionality is to see whether there are equally useful alternative designs.  If an alternative design would reduce the utility, then it is “not truly an alternative.”

In this case, the lower court found that there were “a multitude of alternative designs,” but the lower court did not make specific findings as to whether or not those alternative designs altered the utility. St. John’s did, however present expert testimony that the “alternative” designs were not as useful. On appeal, the CAFC was swayed by St. John’s expert and found “clear error” because the lower court (1) did not make any “explicit findings” regarding utility of the alternatives and (2) failed to even mention St. John’s expert report.

“The evidence presented by St. John, in our view, was sufficient to raise a substantial question of invalidity.”  Preliminary Injunction Vacated.

 

02 Micro v. Monolithic Power (Fed. Cir. 2006).

02 Micro holds a patent covering an DC/AC conversion circuit to allow a laptop batter to control a fluorescent lamp. 02 Micro sued Monolithic for infringement.

Following the local patent rules of the Northern District of California, 02 Micro filed its final infringement contentions within 30 days of the district court’s claim construction hearing. At that time, discovery was still ongoing, and during a late deposition, 02 Micro discovered another (much better) theory of infringement based on the defendant’s design.  After an extended period of negotiation, the defendant refused to stipulate to an amended infringement contention. Then finally, three months after the deposition, 02 Micro submitted a motion to amend.

The case is on appeal because the magistrate judge denied 02 Micro’s motion to amend.  The N.D.Cal. rules allow amendments for “good cause.” However, the magistrate found that the three-month delay showed no diligence, that the negotiation time did not justify a delay because no settlement was reached, and that allowing the amended infringement contentions would prejudice the defendant and reopen discovery. The new theory of infringement was the only viable theory, and without that theory, summary judgment quickly followed.

Applying typical formalism, but no real analysis of the language of the rule, the CAFC affirmed summary judgment — finding that the required “good cause” requires diligence:

If the parties were not required to amend their contentions promptly after discovering new information, the contentions requirement would be virtually meaningless as a mechanism for shaping the conduct of discovery and trial preparation.

The two stated purposes of discovery are to (1) allow the parties to “develop facts and support” their theories and defenses; and (2) allow the parties to pin down the other side’s theories and defenses.  In this case, 02 Micro proposed amending contacted the defendant within three weeks of learning the new information about the defendant’s products.  All the parties knew of the new theory, there was just bickering over procedure.

In Fractured Decision, CAFC Refuses to Reexamine De Novo Claim Construction

Amgen v. HMR (CAFC en banc denial)

Cybor is the much reviled CAFC decision holding that the construction of patent claim language is a question of law that is reviewed de novo — without any regard to the lower court’s reasoning or ruling.  The Cybor rule is believed by many to have dramatically increased uncertainty in patent litigation as well as likelihood of appeal.  Importantly, the associated reversal rate also demoralizes district court judges who already often struggle with the technical and legal complexity of patent cases.

In Amgen, the appellate panel reviewed construction of the term “therapeutically effective amount” of erythropoietin and, in the process illustrated how Cybor gives the court a “capacity for arriving at its own idiosyncratic construction.” (Quoting Prof. Kevin Noonan). Here, the CAFC panel reversed the lower court’s construction based on its interpretation of the specification. 

HMR’s request for rehearing en banc has been denied, but a contingent of six separate dissenting and concurring opinions show the internal conflict.

Chief Judge Michel, who also dissented from the original panel decision, led the charge against Cybor. “I have come to believe that reconsideration is appropriate and revision may be advisable.”  CJ Michel, who was joined in the opinion by J Rader, cited four practical reasons for eliminating de novo review:

  1. High reversal rate;
  2. Lack of predictability of outcomes — something that decreases settlement and frustrates lower courts;
  3. The disregard of time spent by district court judges in understanding the evidence and patent information;
  4. The mind-numbing minutia of claim construction decisions faced by the court in “nearly every patent case.”

Claim construction, although similar to statutory construction is different for many reasons and is intertwined with facts that make the foundation for de novo review questionable. The arguments of CJ Michel are further highlighted by Judge Newman’s dissent.

J Newman focuses on how scientific and technological evidence serve as the backdrop for any claim construction and how claim construction should focus on the invention rather than following formalistic requirements that trip over every statement in a patent application. Finally, Newman argues that a Daubert framework is more appropriate for claim construction.

The Federal Circuit's position that patent interpretation requires more rigorous appellate review than other fact/law issues has not well withstood the test of experience. It is time to reopen the question and to rethink, en banc, the optimum approach to accuracy, consistency, and predictability in the resolution of patent disputes, with due attention to judicial structure, litigants' needs, and the national interest in invention and innovation. (Newman dissenting).

Judge Rader agreed with both CJ Michel and J Newman, but filed his own opinion. Rader gave some legal basis for reviewing Cybor — noting the Supreme Court’s opinion that claim construction "falls somewhere between a pristine legal standard and a simple historical fact." (Markman). Rader maintained his long-standing position that district courts should be given deference because they are better versed in the facts and the issues.

“Trial judges can spend hundreds of hours reading and rereading all kinds of source material, receiving tutorials on technology from leading scientists, formally questioning technical experts and testing their understanding against that of various experts, examining on site the operation of the principles of the claimed invention, and deliberating over the meaning of the claim language. If district judges are not satisfied with the proofs proffered by the parties, they are not bound to a prepared record but may compel additional presentations or even employ their own court-appointed expert." (Rader dissenting in Cybor).

Judge Moore: In what appears to be her first patent opinion, New CAFC Judge Moore also set her target on Cybor — stating that the court should “reconsider its position on deference.” 

Judges Gajarsa, Linn, and Dyk all concurred with the decision not to rehear this particular case, but noted that “In an appropriate case we would be willing to reconsider limited aspects of the Cybor decision.”  In particular, those three judges appear to believe that de novo is still appropriate when the intrinsic evidence (written description and prosecution history) on its face resolves “the question of claim interpretation.”

SUPREME COURT NEXT: This leaves us in the situation where at least eight of the twelve Federal Circuit judges believe that Cybor should be revisited if an “appropriate case” arises. This fractured decision is also ripe for Supreme Court review, and along with the Tamoxifen antitrust cases, are the two most likely to be granted certiorari in 2007.

Details: Judges Michel, Newman, Rader, Mayer, and Moore have all bluntly criticized Cybor. Judges Gajarsa, Linn, and Dyk have a more limited criticism.

Documents:

Obviousness: Skill in the Art Avoids Death Ray

Optivus and Loma Linda v. Ion Beam Apps. (Fed. Cir. 2006).

Focused proton beam therapy offers real promise to cancer victims. Optivus and Loma Linda control rights to several relevant patents including a multi-room proton therapy apparatus. The pair sued IBA for patent infringement as well as various business torts (unfair competition) based on IBA’s marketing of its devices without FDA approval.

The district court granted summary judgment in the defendant IBA’s favor on invalidity, noninfringement, and unfair competition. Optivus and Loma Linda appealed.

Appellate Practice Waiver of Arguments: In their opening brief, appellants argued a lack of motivation to combine various pieces of prior art, but did not raise an argument as to whether the prior art contained all of the claim elements.  They then attempted to raise that issue in their reply brief. The CAFC, however, dismissed that issue as a matter of procedure — holding that the argument was “waived because it was not raised in Loma Linda’s opening brief.”

Death Ray: On motivation to combine prior art, Loma Linda argued that modifying a UW Neutron therapy center by sending protons to the patient would create a “death ray” that would kill the patient. After defining “skill in the art” as familiarity with particle beam technology uses in medical treatment, the CAFC dismissed this “teaching-away” because our PHOSITA would know to turn down the intensity. 

Unfair Competition: Marketing Non-Approved Device: The CAFC reversed the dismissal of the California unfair competition claims — holding that California law provides a right of action on unfair competition even where the claim is based on violation of a law and the law does not provide for a private right of action. 

Doctrine of Equivalents, Avoiding the Tronzo-Trap

Depuy Spine v. Medtronic (Fed. Cir. 2006).

PatentlyO027Medtronic won summary judgment of non-infringement for its Vertex spinal implants, but the jury found that its MAS spinal screws were infringing. Both sides appealed, and we discuss two issues here:

Claim Construction:  Depuy tried to get the CAFC to buy into its argument that a the conical wall of the Vertex model was also a spherical wall.  Although impressed with its novel argument, the CAFC did not bite at the elementary calculus or basketball analogy showing how, at the limit, cones and spheres are virtually indistinguishable.

PatentlyO2006001

Doctrine of Equivalents and Vitiation: This case seems right-on-point with Tronzo, and the patentee learned the appropriate lesson. In Tronzo, the theory of equivalence would have allowed any shape to be equivalent to “generally conical.”  Here, however, the patentee argued that there was a special nexus between the claimed spherical shape and the alleged equivalent conical shape. The tailored argument made the difference, and the CAFC agreed that equivalents could apply without vitiating the term. The CAFC also found it important to the DOE analysis that the patent does not label other shapes as either prior art or inferior. [Practice Tip…].

KSR Shifts Obviousness Debate to “Mere Aggregations” and Presumptions of Non-Obviousness

KSR v. Teleflex (Supreme Court 2006).

Section 103 of the Patent Act focuses on “differences between the subject matter sought to be patented and the prior art.”  In the 1976 Sakraida case, the Supreme Court held that simply aggregating old elements together does not pass the patentability test if the elements are each performing the same functions that they were already known to perform.

The “mere aggregation” test of Sakraida, however, has not been followed by the Court of Appeals for the Federal Circuit (CAFC). Instead, the CAFC’s approach has allowed mere aggregations to be patented so long as there is no evidence suggesting that the elements be combined.

The pending case of KSR v. Teleflex squarely addresses this debate. KSR recently filed reply brief closes the written arguments in this landmark case, and oral arguments are scheduled for November 28, 2006.

KSR’s attorneys, including GWU Professor John Duffy, argue strongly that 103(a) has been wrongly interpreted as merely a way to challenge patentability rather than a “condition of patentability” as the section is titled. Under the current suggestion test, claims “cannot be held invalid . . . no matter how trivial might be the differences” from the prior art unless evidence suggesting the difference is found in the art.  As noted by Hal Wegner, the Court’s reaction to this argument could shift the strong presumptions of non-obviousness.

KSR has gone beyond its attack on the Federal Circuit suggestion/teaching/motivation test and raised as a further issue the point that it should win under a preponderance of the evidence standard for challenging patent validity.

In the process, KSR takes a shot at the AIPLA’s “balanced” position.

It is by no means clear why patent bar groups would have a systematic interest in a “balanced” standard of patentability, in view of the enormous fees that litigation of invalid patent claims can generate.

Briefs and Documents:

Links:

Cite as Dennis Crouch, “KSR Shifts Obviousness Debate to ‘Mere Aggregations,’ Patently-O, available at http://www.patentlyo.com.

Pharmaceutical Patent Doctrine of Equivalents Survives Challenge

TestAbraxis (AstraZeneca) v. Mayne (Fed. Cir. 2006).

Mayne attempted to around Abrxis’s anesthetic formulation patent covering DIPRIVAN. The district court, however, found that Mayne’s product still infringed, both directly and under the doctrine of equivalents, despite its replacement of EDTA (“edetate”) with DTPA. 

On appeal, the CAFC reversed the direct infringement based on claim construction, but agreed that there was infringement under the DOE.

Infringement under the doctrine of equivalents is reviewed for clear error.  To infringe under the DOE, the accused device must perform “substantially the same function in substantially the same way to obtain the same result” as the patented invention.

During the design-around, the defendant had attempted to identically match the characteristics and stability function of the Abraxis product.  They eventually chose the DTPA replacement because it is “structurally similar to edetate, [and therefore] product stability is predicted to be unaffected.”

Even so, the defendant argued under the modern DOE exclusion principle that the patentee’s use of the “restrictive term edetate,” rather than a more generic term, precluded extension of equivalents coverage as a matter of law. The CAFC disagreed, finding that equivalents could be asserted because the inventors “did not clearly disavow” broader coverage.

There is no evidence that the patentees made a clear and unmistakable surrender of other polyaminocarboxylates, or calcium trisodium DTPA in particular, during prosecution.

Furthermore, because the use of DTPA was admittedly unforeseeable, it is proper to extend DOE.

The defendant also asserted that DOE should not be extended to cover DTPA because Mayne was able to obtain a patent to cover that modification. The CAFC did not buy that argument either. As noted above, the patent shows that the equivalent was unforeseeable at the time of the invention (weighing in favor of DOE).  In addition, the district court’s fact finding of “substantial evidence of equivalence” withstood CAFC scrutiny.

 

Claim Term Limited to “Scoop of the Invention”

ScreenShot063Akeva v. Adidas (Fed. Cir. 2006, NON-PRECEDENTIAL)

Akeva’s patent covers shoes with a rear sole “secured” to the heel of the shoe.  The patent is clear that the rear sole may be detachable or rotatable.  In order to capture Adidas’s activity, Akeva also argued that “secured” could mean permanently secured.  The court disagreed with that claim construction based on the language of the specification:

the language of the ’471 specification specifically states that the invention of the ’471 patent is an athletic shoe with a detachable heel: “However, in a radical departure from conventional shoes, the shoe of the present invention incorporates a heel structure, including a detachable rear sole, that significantly alleviates heel wear problems associated with conventional soles and provides enhanced cushioning and/or spring.”.

Once again describing the “present invention” resulted in the specification serving to limit the scope of the claim terms.  The truth is, however, the seeming requirement of a detachable sole pervades the patent and, in CAFC terminology, was “the scoop of the invention.”  The “field of the invention,” for instance, was written “as athletic shoes with interchangeable/detachable rear soles.”

As could be expected, the boilerplate language at the end of the specification was deemed worthless even though the language asserts that the specification is not limiting in any way.

The court did find this case distinguishable from others because the detachable sole is “not one of several features, it is the primary feature of the invention.” 

Filing of Sequence Listings on EFS-Web Version 1.1

SingerBy Chris Singer, PhD

With the release of EFS-Web 1.1 on October 14, 2006, the USPTO has streamlined the filing of sequence listings for practitioners and patentees. The prior version of EFS-Web was limited because it allowed submission of files in .pdf format only and was not enabled to handle sequence listings, which are typically written as text files (.txt). The latest version of EFS-Web overcomes this limitation and allows practitioners to submit electronically files such as sequence listings, computer program listings, and mega tables. This eliminates the need to submit these types of files on supplemental electronic media (e.g., CD-R, 3.5″ disk, etc.), which avoided fees relating to application size (currently $250 for large entities and $125 for small entities per 50 pages after the first 100).

According to sources at the USPTO Electronic Business Center, the requirements of Title 37 of the Code of Federal Regulations (37 C.F.R. §§ 1.52(e), 1.821-1.825) have been relaxed for sequence listings that are filed using EFS-Web 1.1. Specifically, filers need only submit a single .txt file containing the sequence listing and an amendment that incorporates the sequence listing into the specification. Practitioners no longer need to include the compliance statement under 37 C.F.R. § 1.821(f) or the paper copy of the sequence listing (or the duplicate copies of the sequence listing on CD-R in lieu of a paper copy) when filing sequence listings using EFS-Web. However, the USPTO recommends that filers include a statement that the content of the sequence listing does not extend beyond the original disclosure (i.e., does not contain new matter), either as a separate document, or as a part of the “Applicant arguments/remarks made in an Amendment” section of a response.

For the time being, the USPTO will also accept sequence listings filed through EFS-Web 1.1 in a .pdf format; however the practice is strongly discouraged, since the USPTO must convert such .pdf files to .txt files to accommodate the sequence listing in its database. As a result, filing sequence listings in .pdf format creates the possibility that conversion could introduce errors in the sequence that could compromise its capacity to be accurately processed and searched, and could even affect sufficiency of disclosure under 35 U.S.C. § 112.

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

Hindsight Bias

In my patent policy seminar at Boston University Law School, we recently studied hindsight bias and how it can play-out in the innovation sphere.  Professor Gregory Mandel at Albany Law School has a pair of great empirical papers on the topic here and here.  Mandel concludes that a juror’s knowledge of the invention makes the juror much more likely to believe that the invention would have been obvious.

To reach a proper non-obvious conclusion, the decision-maker must step backward in time to a moment when the invention was unknown. Unfortunately, Humans are cognitively incapable of ignoring what they have learned, as required for the proper ex ante analysis.

In class, I followed-suit and gave the students a test of their own hindsight bias.  In one group, students were given a problem and were also told how it was solved.  The other group was simply given the problem. Both groups were asked to rate the nonobviousness of a solution.

ForesightHindsightII

Although not statistically significant because of the small seminar size, my class results closely followed Mandel’s results.  Students who did not know of the solution were more likely to think that a solution was nonobvious.  However, after students learned how the problem was solved, they were then more likely to think that the solution was obvious. This is the crux of hindsight bias. 

Notes:

  • Something that makes the results even stronger is that before the class, all the students were assigned the Mandel hindsight bias reading and they also knew that the topic of the day was hindsight bias. 
  • Professor Joseph Miller at Lewis & Clark Law School is working on this issue as well — he gave me the idea for this specific problem-solution.
  • Peter Zura discusses hindsight bias here.

Upcoming Events

  • E-Discovery: On Wednesday, November 15 at 2:00 p.m. CT., Richard Carden and Jennifer Kurcz from MBHB will present a FREE one-hour webinar on how the new e-discovery rules will impact future litigation and discovery efforts. Register here: http://mbhb.netspoke.com/.  If you prefer, you can just read the new rules as of 12/1/06: link.
  • Blog Law: Still room for this two-day conference held in NYC and run by Cathy Kirkman. November 16–17.
  • Software Patents: Come visit my temporary home at Boston University Law School for an academic debate on the continued viability of software patents.  The results of this debate may well serve as the backbone of future legislative activities. Nov. 17. (Registration only $35).
  • 618L07-BOSBiotech Patents: Cut through the confusion of the myriad new challenges facing biotech patent practice. I’ll be there presenting.

New Appreciation of Composition’s Properties are Not Patentable

SevofluraneAbbott Labs. v. Baxter Pharm. (Fed. Cir. 2006).

Way-back-when, Abbott went through a recall of its inhalation anesthetic sevoflurane because of excess Lewis acid buildup.  Abbott’s scientists figured-out that mixing water in the solution would bind an deactivate Lewis acids, and stabilize the product. Abbott changed its product and also obtained patent protection.

When Baxter filed its Abbreviated New Drug Application (ANDA) to begin selling its version of a sevoflurane inhaler, Abbott sued for infringement.  After a bench trial, the patent was found valid, but not infringed.  Abbott appealed.

The CAFC pointed its laser vision on the question of validity.  A prior reference had indicated that water could be combined with sevoflurane, but had not realized that the composition would work to prevent the acid buildup. Framed in this manner, the prior-art was found to be anticipatory:

Our cases have consistently held that a reference may anticipate even when the relevant properties of the thing disclosed were not appreciated at the time.

The CAFC went-on to find that a claim directed to the newly discovered property of the prior art cannot support a patent because it is inherently disclosed by the art.

This rule holds equally well to process claims:

an inventor may not obtain a patent on a process having the same steps as a prior art process, in which the new process merely identifies a new, advantageous property of the prior art process.

Reversed on validity.

Election punditry on Patent Reform

VoteFrom IP Law360

“A Democratic takeover of the U.S. House of Representatives on Tuesday could deal a blow to broadly criticized efforts by the [USPTO] to change continuing applications procedures, observers say.”

The article only cites an unnamed former PTO official as its source. 

Although my old law school professor (Barack Obama) is not running this term, this is still an important election. Get out and vote. 

GO GO GO JOSEPH, Reject That Business Method

JosephProfessor Joshua Sarnoff of American University just directed me to a gem of a response by occasional Patently-O reader Dean Alderucci.  The Examiner rejected Walker Digital’s the pending claim 2 with the most ancient of references:

In Genesis, Chapter 41, we are told that Pharoah appointed Joseph to be his representative and instructed him to enter into contracts to purchase grain.  These contracts included an offer with an activity (supply grain) and a benefit (get paid for the grain). Payment was made upon delivery of the grain.  The story of Joseph is about 4,500 years old. . . . the principal/agent relationship is of immemorial antiquity.  It no doubt predates civilization itself. . . . Many of Applicant’s [other] claims could also be rejected using the same reference.

Dean.bmpIn response, Alderucci notes that the Examiner “has completely misinterpreted the most popular and analyzed book in all of human history. . . . [Nevertheless], the claims as pending have been carefully amended to steer clear of embracing of any of ancient practices of Joseph, the Pharoah, or the [ancient] Egyptians.” 

File Attachment: Bible Response.pdf (218 KB)

The application (10/212,636) is sitting on a response after final. Amended claim 2 reads as follows:

2. A method comprising:

  determining a recipient;
  determining an offer which includes an activity and a benefit;
  transmitting to a representative instructions to provide the offer to the recipient;
  determining whether the recipient has performed the activity; and
  providing the benefit to the recipient if the recipient has performed the activity, in which the recipient is a player at an electro-mechanical gaming device.

Encouraging Consumer Suits

MeijerGrocer Meijer has reportedly filed an antitrust suit against drug maker Eisai for monopolization of the U.S. market for its billion-dollar GERD treatment Aciphex.  (S.D.N.Y.). Meijer charges that the patent was obtained fraudulently and that it is either invalid or unenforceable.  Meijer runs pharmacies in its stores, and the patent threat keeps generics out and prices high.

Although there is some precedent for these consumer-led cases, they tend to be few and far-between.  In the wake of several innovator-generic reverse-payment settlements, there appears to be some political will to find another market lever that encourages challenges to potentially unenforceable patents.  One suggestion is to boost-up the antitrust damages that could be collected by companies in Meijer’s situation.  Another suggestion is to facilitate cooperation and cost-sharing between the potential plaintiffs (e.g., pharmacies).

Caution: Disclosure of Opinion’s Conclusions Waived Attorney-Client Privilege

In re Target Technology (Fed. Cir. 2006, Non-Precedential).

On mandamus, the CAFC affirmed a district court’s discovery order compelling disclosure of three letters between two different law firms and the president of the defendant.

Although such communications are ordinarily protected by attorney-client privilege, the appellate court found that privilege was waived by the President by his statement in a sales letter that “I also asked my patent attorney to conduct a search in the US patent literature, and no potential infringement was found.”

Applying 9th Circuit law, the panel fount that the company president’s extrajudicial disclosure that revealed the attorney’s conclusion waived privilege to the contents of the letter even though the disclosure did not reveal the details of the privileged communication.

The CAFC was careful to note that the waiver only applied to portions of the communications relating to the disclosed conclusions.

Aside:

  • Cite: 2006 U.S. App. LEXIS 26240.
  • CAFC Clerks: Please Post ALL Opinions Online: I found this opinion by chance through a LexisNexis search.  The CAFC does a good job of posting its opinions online.  For some unknown reason, however, the court rarely posts its Mandamus orders.  These orders are especially important in cases such as the recent TiVo case where the court granting a temporary stay of the injunction.  The stock market reacted to this order, but because it was not publicly posted, certain insiders may have received the information first.