Plumtree: DJ Jurisdiction, On-Sale Bar

UntitledPlumtree v. Datamize (Fed. Cir. 2006)

Declaratory Judgment Jurisdiction: The Datamize patents cover software authoring tools for creating software kiosks. Datamize had earlier sued Plumtree for patent infringement and had also told Plumtree that it would be infringing the soon-to-issue continuation application. When the continuation did issue, Plumtree filed a declaratory judgment action — giving the CAFC one last opportunity to opine on its reasonable apprehension test before the Supreme Court issues its MedImmune decision in early 2007.

A declaratory judgment action requires an actual controversy between interested parties. The DJ plaintiff must show (1) some action by the patentee that creates a reasonable apprehension of facing a patent infringement lawsuit and (2) some activity on the part of the DJ plaintiff that could constitute infringement. With a few bright-line exceptions (such as that seen in MedImmune), the court looks to the totality of the circumstances when determining whether a reasonable apprehension of suit exists. 

Here, the court found that the prior suit on similar technology exhibited a “course of conduct” indicating a “willingness to protect [its patented] technology”and thus “created a reasonable apprehension of suit.”

On Sale Bar: Once jurisdiction was established, the CAFC looked to determine whether the Datamize patents were invalid for being on-sale more than one year prior to the filing of the application. Here, the appellate panel found that sale of a kiosk did not violate the on-sale bar because the patents did not cover the kiosks themselves.  The court noted, however, that the on-sale bar would be triggered if either (1) the sales contract required use of the patented method or (2) the patented method was actually used to complete the contract prior to the critical date.  Plumtree, however, could not prove either of those — the agreement “did not unambiguously require use of the patented method” and there was no evidence that the patented method was actually performed prior to the critical date.

Notes: This is the second CAFC opinion involving these two parties. The earlier case involved the same technology but a different patent.  That patent was invalid as indefinite because the claims included the terms “aesthetically pleasing.”

28 thoughts on “Plumtree: DJ Jurisdiction, On-Sale Bar

  1. Blaise-

    I actually agree with most of what you state, and in a perfect world we could function in that way. Un fortunately in my practice area we have moved so far to one extreme in prosecution that I cannot ask the client to pay for all the possible claims in a patent application. This could be solved by treating biotech like what it now is – a predictable art – but I am not holding my breath for the USPTO to wake up to this.

    You guys also miss the implications for foreign practice. A patent (or several patent) needs to cover all the embodiments of an invention or you risk the first filed patent being used as art against in you in future filed applications in Europe and elsewhere as they do not have terminal disclaimers and CIPs.

  2. Tony-

    Based on your comments I think you misunderstand my position. Some inventors can actually read an issued patent and can recognize alternative ways to solve the problems discussed in the patent that are NOT disclosed in the patent specification. Usually said inventors will file their own patent application on their alternative solution. This is good for competition.

    However, what often happens in continuation practice is that broadened claims which may remove limitations from the parent claims are presented for examination. Thus while said inventors may have tried their best to develop their competing solution while at the same time avoiding the claims of the parent patent they may be trapped by future unknown broader claims.

    One might argue that said inventors should anticipate the most perfect, most broadly recited claims possible based on the specification of the parent patent. However, there are many different ways to write broad claims and it is pretty much impossible to predict how such broadened claims could be written. This results in a scenerio in which inventors are reluctant to even attempt to generate competing solutions to a problem mentioned in a patent since they don’t know how broad claims of future continuations will be. This is bad for competition.

    By the way I’m not against continuations in all cases. For cases of restriction of originally filed claims I think there is value in continuation practice. However, it has to be kept in mind that one of the purposes of having patent claims is to give the public notice about what can and can not be used by competitors. Continuation practice as it exists today can be used to avcid such public notice and is thus damaging to the competitive nature of the patent system.

  3. Blaise,

    Good comments.

    You wrote, “It is a lot harder for competitors to work around an entire specification than to work around just the claims. In my opinion the patent system works best when it promotes competition, therefore it is better to give some sort of reasonable limit to continuation practice and give competitors sufficient knowledge at an early stage so that they can figure out alternative ways to solve the same problem.”

    That’s where we agree: Competitors should be able to choose alternatives before the end of the 20 year patent term. I’d prefer those alternatives to be ones other than those disclosed in the patent itself, which is what a pending continuation helps to ensure.

    It’s certainly riskier to design around a specification (as opposed to claims) because the competitors have to determine what new and non-obvious claims could be supported by the specification and thus obtained. After all, once competitors release their products any patent attorney can draft and obtain picture claims that read on those products — subject to the enablement and written description limitations.

    Unfortunately, competitors have to be more careful and sometimes avoid alternatives slightly outside the borders of a patent’s disclosure simply because they can’t be sure that the USPTO will do its job and enforce enablement and written description. I’m not completely comfortable with this, since it effectively gives the patent applicant greater exclusive power than they could legally obtain.

    However, if I have to chose between (1) our current continuation practice that allows innovators to receive slightly greater exclusive power than they could have obtained in a patent claim and (2) the USPTO-proposed limited continuation practice that allows copyists to leverage the inherent weaknesses of claim drafting, I’ll choose our current continuation practice.

  4. Blaise,

    This is why the clearance opinion was invented. If you do not take the time to find out whether there are any patents or applications pending whose claims may cover your product, you may deserve everything that happens.

    In addition, how can the ways of solving a problem be alternative if they are already described in a specification of a patent?

    There are already reasonable limitations on continuations in terms of length of time of monopoly and equitable estoppel principles, if the court deems it necessary.

  5. anon-

    You must have never dealt with the special patent rules that started in the ND CA. I am dealing with them now thus this patent prosecutor also seems to understand patent litigation somewhat better than you.

  6. It is a lot harder for competitors to work around an entire specification than to work around just the claims. In my opinion the patent system works best when it promotes competition, therefore it is better to give some sort of reasonable limit to continuation practice and give competitors sufficient knowledge at an early stage so that they can figure out alternative ways to solve the same problem.

  7. anon,

    your scenario has a number of problems:

    1) each application has to have at least one claim. Claims are actually what are being infringed, not the specification.

    2) the legal process takes a large amount of time, and you do not have any rights until a patent issues. Assuming your original patent issues in 3 years, and you file a lawsuit at that time, it usually takes several years before the case gets to discovery, let alone trial, appeal, etc…
    (see Judge Michels dissenting-in-part opinion in link to fedcir.gov).

    The upshot is that it is more unusual to have a continuation pending by the time a lawsuit has gotten to the latter stages, and even if one is, a new suit would have to be filed on the new patent (issued with the useful claims).

    I do not see how this is unfair. The competitor has warning about what is in the spec, including the claims at issue in the original case. One might suspect that, if the original claims do not cover its product and assuming a continuation is pending whose claims could be extended to cover the product, the competitor will have enough time to be able to design around or take a license on the patent in the time it takes for the new continuation claims to issue and a lawsuit to make its way to the courts. If not, perhaps the competitor should have come up with the invention in the first place.

  8. Anon wrote, “It seems to me that the patent prosecutors here like continuations because they can modify the claims (subject to the 112 requirement) for the entire 20 year term of the patent, and that they think this is a reasonable reward for invention.”

    Unfair or not, twenty years of an exclusive right is precisely the reward contemplated. Keeping a continuation pending is an effective and efficient way to enforce that exclusivity.

  9. It seems to me that the patent prosecutors here like continuations because they can modify the claims (subject to the 112 requirement) for the entire 20 year term of the patent, and that they think this is a reasonable reward for invention. The logical endpoint of this analysis is this: the patentee need not write any claims at all in the patent.

    The patentee can just write a spec., file a lawsuit, and then write claims after the getting full discovery about the accused product and the prior art found by the accused infringer. The jury can then determine in the first instance whether the claims are supported by the written description. Needless to say this system is incredibly unfair to competitors, but that is functionally what continuation practice permits today.

  10. As a side note about uncertainty, if we are going to scrap continuations, shouldn’t we scrap broadening reissues as well (or even reissues in general)?

  11. Blaise-

    To your comment to Blaise:

    Isn’t that a good thing? Doesn’t that simply mean that the public policy that underlies patent laws works! Namely, the disclsoure required by a patent allows competitiors to make improvements – and that is a VERY good thing for everyone.

    To your comment to SF:

    Please look at the above scenario which I deal with every day. My client must expose everything and the “kitchen sink” in their patent in order to fulfill the high 112 standard in my area. If I file a patent claiming everything I can claim the new claim charges create a situation where every filing is prohibitively expensive for almost all filers. Now, I get RR that splits the patent into 25 different inventions. First – I have not claimed every aspect of each of those 25 inventions so I will need continuations/leave to amend claims broadly in order to get the client the protection they deserve. Second – I have to guess which of the 25 inventions is most likley to be infringed while at the same time balancing which invention is likely to teach the Examiner enough that he/she can understand the invention and the art. How can I do that without liberal continuation practice? I can’t – it may take me two or three bites at the apple just to get the Examiner to understand what the hell is going on.

  12. Blaise,

    You observed, “The difference between a perfect patent claim in an original patent and a perfect patent claim as a result of an ongoing chain of continuations is that competitors can plan according to what was actually patented instead of wondering whether or not such a perfect patent claim will eventually come into existence.”

    With a perfect initial patent, competitors can’t plan to use any of the disclosed technology because the perfect patent precludes it. With a continuation pending, competitors can’t plan to use any of the disclosed technology because of the risk that the patent applicant will later submit perfect claims. In either case, the competitor has to wait for the full statutory term, which is why I said I didn’t see much of a difference.

    Nevertheless, I am concerned when the uncertainty relating to continuations extends beyond that which the patent applicant could legally claim. In particular, competitors cannot antipate whether the patent applicant will unjustifiably obtain claims that are not enabled or supported by written description. That’s certainly unfair. But, as mentioned above, I believe that problem is better addressed by enforcing those requirements at the USPTO than by limiting continuation practice.

    On another note, given our liberal written description requirement, continuation practice can be abused to cover later developed technologies that we never contemplated. The EPO solves that problem with a rigid rule for new matter. I don’t think we have to go that far, but there should be some way to prevent such abuses without limiting continuation practice.

  13. SF said “I don’t see much difference between having to wait for a perfect patent to expire and having to wait for a chain of continuations to expire.”

    The differece between a perfect patent claim in an original patent and a perfect patent claim as a result of an ongoing chain of continuations is that competitors can plan according to what was actually patented instead of wondering whether or not such a perfect patent claim will eventually come into existance.

    Tom Kulga-
    While most products on the market employ technology patented within the last 20 years they also rely on earlier patents to provide the fundamental foundation for the technology. For example, the original integrated circuit patents were issued in the 1960′s and while most ICs used today are based on vastly improved designs some of the broad claims from these fundamental patents may read on even the most cutting edge designs. So while the specification of most patents written 20 years ago may be obsolete the claims of these older patents may be broad enough to cover technologies several decades or even hundreds of years into the future.

  14. Professor Lemley wrote, “It’s worth keeping in mind that if the problem is indefiniteness, as it was here, you don’t need a later continuation to solve that problem. Write multiple claims with different wording.”

    I agree with Professor Lemley to the extent that good patent attorneys can anticipate and avoid most indefiniteness issues by careful claim drafting. Apparently, the phrase in this case (“aesthetically pleasing”) might have been avoided. See Alun Palmer’s comment (“So, the real questions are, who would draft such a thing and who would allow it?”).

    And, in theory, Professor Lemley is correct. You don’t need a continuation for indefiniteness. You can write better claims. That’s the “solution” that the USPTO and other critics of continuation practice erroneously propose for all problems touched by claim construction: You don’t need a continuation to preclude others from copying your invention, just write better claims. You don’t need a continuation to avoid the prior art, just write better claims.

    In practice, that’s no solution at all. As I mentioned above, reasonable minds can and will disagree about the meaning of claims terms, which can unnecessarily clog the courts and drive up litigation costs. Continuation practice provides an efficient way to address invalidity (such as indefiniteness, anticipation, obviousness …) and infringement.

  15. Blaise said “Basically almost all contemporary electronic, mechanical, and chemical products in everyday [use] rely on technology patented less than 20 years ago. Creating uncertainty for this long a time period is simply unacceptable with the present rate of technological progress.”

    If all current technology is less than 20 years old, then current technology has a life of less than 20 years. Many say most tech products have a life of 5 years or less. If that is the case, then any uncertainty will last much less than 20 years. So, what’s the big deal with uncertainty? After the technology is obsolete, who cares about the patent?

  16. Blaise,

    You observed, “Basically almost all contemporary electronic, mechanical, and chemical products in everyday rely on technology patented less than 20 years ago. Creating uncertainty for this long a time period is simply unacceptable with the present rate of technological progress.”

    Assume that a patent applicant obtained a perfect patent that included claims that completely protected the disclosed technology. Would it be unacceptable to have to wait 20 years for that perfect patent to expire? I don’t see much difference between having to wait for a perfect patent to expire and having to wait for a chain of continuations to expire.

    The only uncertainty that I find a little troubling is not knowing whether the patent applicant will obtain claims that are not enabled or supported by written description. But that problem is better addressed by enforcing those requirements at the USPTO than by limiting continuation practice.

  17. Along the same lines,

    It would be all well and good if the PTO always issued well-reasoned rejections that required amendment to the claims. However, this is not the case. As me, above, points out, a fair portion of the time the rejections are not particularly good depending on the art and particular Examiner. Many times, the Examiner will then just repeat his rejection and make it final, necessitating either an RCE, continuation, or appeal.

    Most companies do not appeal due to the costs. In addition, in general companies want to get something for their money. Thus, they are likely to take allowable subject matter and file a continuation.

    The practice of limiting RCEs and continuations proposed by the PTO not only does not have a statutory basis, but would appear to me to eventually place a higher cost on companies, as well as straining the appeals system.

    Also, as you are limited to 20 years from the parent, filing multiple continuations does not give the patentee extra advantages. As SF mentioned, there is already inherent uncertainty in a patent simply due to the English language. Uncertainty regarding what can be claimed should be somewhat alleviated as anyone reading the patent can see what it contains. If a continuation is pending, a company may have to roll the dice if they want to produce a product that is described and enabled in the specification (but not yet claimed).

  18. Huh? I am a Ph.D. and a patent attorney thus I think I can fairly comment on both the pace of change as a bench researcher and a litigator/prep and pros attorney.

    What are you guys talking about? In order to protect all of the embodiments in a well written application will takes years and many continuations/divisionals in any complex scientific area. If you want to hammer mechanical guys for not writing twenty claims that cover all aspects/methods used in a patent feel free, but try out biotech sometime. In the biotech arts we get a 112 rejection on every case (an Examiner told me this is their practice – always) thus we HAVE to enable the invention to the n-th degree. This leads to methods/products/compositions all in the same patent and all inter-related in complex ways and 2,500 possible combinations to claim (I’m not kidding – true is recent filed app for a major research University). When you add the overzealous use of restriction practice to the mix it gets really fun! We need continuations and a less zealous restriction practice, but we also need the members of the bar to look at more than their single technology area when making statements.

  19. It’s worth keeping in mind that if the problem is indefiniteness, as it was here, you don’t need a later continuation to solve that problem. Write multiple claims with different wording.

  20. I suggest that you take a survey of all of the products you use in your everyday life and ask yourself the question “How much of this technology was available 20 years ago?” Basically almost all contemporary electronic, mechanical, and chemical products in everyday rely on technology patented less than 20 years ago. Creating uncertainty for this long a time period is simply unacceptable with the present rate of technological progress.

  21. Blaise,

    Good comments.

    I’m not defending mediocre patent attorneys that can’t figure out how to claim their clients’ trivial inventions. I’m defending the practice of keeping continuations pending to allow patent applicants to best protect their inventions.

    While good patent attorneys can anticipate and avoid many pitfalls, reasonable minds can disagree about the meaning of almost any claim term — and they most certainly will disagree once in litigation. Given the unpredictability of district courts and the Federal Circuit, continuation practice makes good sense.

    In particular, continuation practice allows applicants to quickly address non-infringement arguments that could clear Rule 11 and/or summary judgment, but would most likely lose at trial. Why clog the courts with lawsuits costing $500,000 or more when one can spend $5,000 to get claims that directly overcome such arguments?

    As you correctly note, there continuation practice has a cost: uncertainty for the public and competitors. But now that the patent term is calculated from the filing date, that uncertainty is no longer “neverending.”

    The public and the competitors get the full benefit of the patent’s disclosure and the invention. Applicants should get the full benefit of their innovations by being able to keep a continuation pending for the full 20 years. Limiting continuation practice as the USPTO has proposed will short-change applicants in the quid pro quo.

  22. John Whitaker-

    No, continuation is not the only option. If the inventor modified thier product over 3-5 years than they should have filed new patent applications on the modifications. If the inventor was granted a patent on the original design and the modifications provide non-obvious advantages than a subsequent patent would likely be granted on new claims which add the modified features to the original claims. Simply trying to milk the original application for more patent protection without the quid pro quo of a new patent application explaining the modified features robs the public of the inventive disclosure which the patent system was designed to promote.

  23. I agree completely with SF. It would be different if a patent applicant had an expectation that his patent would issue in a reasonable amount of time. But when patents take 3 to 5 years to issue from filing, often the inventor’s own products no longer infringe the claims that were originally filed. Continuation practice is the only viable option available. I’m appalled that some people expect patent practitioners to see into the future, yet don’t seem to have any complaints that the patent office can’t push a patent through in less than 4 years.
    As to the question of who would draft or allow this patent, in what way is that relevant at all?

  24. Any claim that depends for its meaning on language that lauds the product instead of describing it is indefinite, and I can’t beleive that there is anyone with a reg. no. that wouldn’t already realise that even if this decision had never been written. So, the real questions are, who would draft such a thing and who would allow it?

  25. SF-
    Neverending continuations create uncertainty for the public and competitors. If you can’t figure out how to claim your inventions within the 2-4 years that patents typically take to issue than the invention is probably either trivial or you’re not a good patent attorney. If you complain that future improvements happening 10 years down the line could not have been anticipated when you initially wrote the claims my answer to this is simple. Tough. True invention is about being able to anticipate the future before it happens and if you and the inventors you represent don’t understand your inventions well enough to do this then don’t expect people to feel sorry for you.

  26. Notwithstanding patent practitioners’ competent efforts, claims can be held invalid or not infringed, which is why continuation practice is so important to patent applicants. This case illustrates the point. Here, the patent applicant was able to seek and assert additional claims, which did not include the indefinite phrase “aesthetically pleasing.” Even if these additional claims eventually fail a couple of years from now, the applicant has additional continuations pending (see PAIR at USPTO) via which the applicant may seek still other claims.

    Given the less-than-speedy dockets of many federal district courts, it may take years before a court invalidates claims or finds them not infringed. Until then, applicants cannot be sure how well their claims will hold up in court. Thankfully, continuation practice currently provides a legitimate way for allowing applicants to assert their patents, while reserving the ability to seek modified claim scope in the event that their original patent claims fail in court.

    Unfortunately, the USPTO’s proposed rules on continuation practice will effectively end this legitimate use of continuation practice, which I don’t find pleasing.

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