March 2008

CAFC Overturns Jury Verdict of Non-Obviousness Because Combination Yields Predictable Results

Woodstream-aAgrizap v. Woodstream Corp (Fed. Cir. 2008)

Agrizap holds a patent covering a method of electrocuting rats and gophers. The product is sold under the trade name “Rat Zapper.”  Woodstream (maker of the Victor rat trap) first licensed the product then began manufacturing its own version.
The jury found the patent nonobvious and held Woodstream liable for both infringement (and for fraud based on its actions during the license.) In a post-verdict decision, the district court granted JMOL of non-infringement.

On appeal, the CAFC (Judge Moore) zeroed-in on the question of obviousness:

“[A]s the ultimate conclusion of obviousness is a question of law, it remains our duty as the appellate court to ensure that the law has been correctly applied to the facts. . . . In other words, we review de novo the conclusion on obviousness . . . [keeping in mind] that ‘[t]he combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results.’” (Quoting KSR v. Teleflex, 127 S. Ct. 1727, 1739 (2007)).

Here, the CAFC found, as a matter of law, that Agrizap’s own commercial product (the “Gopher Zapper”) rendered the claimed invention obvious. The only difference between the two was the type of trigger mechanism, and the Rat Zapper’s claimed electrical switch was already well known in the cattle-prod art.

Secondary Considerations: When faced with a mere combination of familiar elements, even strong secondary evidence of nonobvious will not save the application. Here, Judge Moore took as true “the commercial success of the Rat Zapper, copying by Woodstream, and a long felt need in the market for electronic rat traps.” However, that evidence is “insufficient to overcome the overwhelming strength of Woodstream’s prima facie case of obviousness.”


  • Judges Bryson, Moore, and Wolle (S.D.Iowa).
  • This case should be contrasted with Ortho-Mcneil v. Mylan , also decided this week. (Judges Michel, Rader, and Linn).
  • Perhaps a strategic misstep by Agrizap?: During prosecution, the PTO made the identical argument as that made by Judge Moore. The only difference was that the PTO examiner rejected the Rat Zapper patent application based on the “Gopher Zapper” patent instead of the commercial product.  Instead of arguing around the asserted reference, Agrizap amended inventorship and filed a terminal disclaimer.  This left the Examiner’s rejection glaringly un rebutted when it turned out that the commercial embodiment (102(b) prior art) could not be swept away so easily. [See Patently-O discussion of whether to file a 131 declaration or argue over a reference.]

Computer Implemented Means-Plus-Function Element Must be Supported by Specific Algorithm in Specification

ScreenShot014Aristocrat Technologies Australia (ATA) v. International Gaming Technology (IGT) (2007-1419) (Fed. Cir. 2008)

ATA and IGT have two parallel cases pending before the CAFC. This appeal focuses on whether ATA’s asserted claims are invalid as indefinite. (U.S. Pat. No. 6,093,102). The other pending case questions whether the PTO properly revived ATA’s unintentionally abandoned national stage application. (U.S. Pat. Nos. 7,056,215 and 7,108,603) [See Patently-O discussion of revival case].

This case focuses on a patent covering an electronic slot machine patent that allows players to pre-select which combination of symbol locations will be used to determine a winner.

Claims Indefinite: The district court held the claims invalid as indefinite under 35 U.S.C. § 112 ¶ 2. Its opinion focused on the claimed means-plus-function element “game control means” — finding the term indefinite because the specification did not provide “structure” to perform the claimed functions.  The specification did include the statement that the control means could be a microprocessor-based gaming machine with “appropriate programming.” However, the lower court focused on the absence of any “specific algorithm” or “step-by-step process for performing the claimed functions.”

On appeal, the CAFC affirmed, holding that computer implemented means-plus-function claims must include “more than simply a general purpose computer or microprocessor.”  The purpose of the requirement, according to Judge Bryson’s opinion, is to avoid overbroad “pure functional” claims.  Because of the ubiquity of general purpose computers, a bare microprocessor cannot be considered a sufficiently specific structural disclosure:

For a patentee to claim a means for performing a particular function and then to disclose only a general purpose computer as the structure designed to perform that function amounts to pure functional claiming.

Within PHOSITA’s Ability: The algorithm missing from ATA’s disclosure is almost certainly within the ability of an ordinary game programmer.  In fact, I believe that it would only take me (a law professor) only a few hours to create a rough algorithm showing how the ATA software program could operate.  Judge Bryson shot-down that argument: Structure for a means-plus-function element must be provided in the specification regardless of whether the structure is already well known in the art.

What is Required: “Source code” is not required to be disclosed, nor is a “highly detailed description of the algorithm.”  However, a computer oriented application using means-plus-function claims must “at least disclose the algorithm that transforms the general purpose microprocessor to a “special purpose computer programmed to perform the disclosed algorithm.” (Quoting WMS Gaming)


Patent Challenge of the Week: When does a patent expire?

Last week, I wrote about whether an infringement lawsuit can properly be filed at 12:01 am on the date that the patent is scheduled to issue. A plaintiff only has standing to sue once a patent is issued, and it is not clear to me that patent has actually issued by that point (even if the patentee holds exclusive rights for the entire day once the patent has issued).*

Expiration Date: At the other end of the spectrum is the patent expiration date. The language for the new twenty year term reads as follows:

35 U.S.C. 154(a)(2) TERM.-Subject to the payment of fees under this title, such grant shall be for a term beginning on the date on which the patent issues and ending 20 years from the date on which the application for the patent was filed in the United States …

The optional seventeen year term language is parallel to the twenty year term, although slightly different: “The term … shall be the greater of the 20-year term as provided in subsection (a), or 17 years from grant.” 35 U.S.C. 154(c)(1).

The Question: Is the standard patent term (a) twenty years from filing, or is it (b) twenty years from filing plus one day?  I.e., if a patent is set to expire on April 2, 2008, can a generic manufacturer begin to make and sell the product on the morning of the 2nd without infringing? I would initially argue that the term should be (a) twenty years from filing — perhaps primarily because 154(c)(1) refers to the “20–year term.” However, I have heard of generic manufacturers who wait the extra day to be safe. (In certain drug cases, this extra day may be worth several hundred thousand dollars). What is the answer?


  • As a comment noted, Fed. R. Civ. P. 6(a) spells out the rules that courts should “apply in computing any time period specified in these rules or in any local rule, court order, or statute.” Rule 6(a)(1) states that “the day of the act, event, or default that begins the period” should be excluded.  In addition, under Rule 6, a time period is extended if it would otherwise end on a Saturday, Sunday, legal holiday.”
  • 37 C.F.R. 1.7 may also be relevant. 
  • * One bit of hard evidence answering last week’s question comes from dicta in a 1952 Helene Curtis patent case. In that case, the SDNY district court noted that the lawsuit had been filed “fifty-nine minutes after the patent had issued at noon of December 4, 1951” — and thus, was proper. See 105 F. Supp. 886. [Link]

Patently-O Bits and Bytes No. 26

  • BusinessWeek: Michael Orey has written another interesting Troll Tracker article: Busting a Rogue Blogger.
  • A recent comment raised an interesting question: Why do the pharmaceutical companies rarely (if ever) file their patent infringement suits in the Eastern District of Texas?
  • In a tight economy, is there a tendency file more patents (to secure some assets as insurance against business failure) or fewer patents (to tighten the outflow of cash)?

Ex Parte Bilski: Once Again Rethinking the Scope of Patentable Subject Matter

We can expect over one dozen friendly briefs in the pending en banc case captioned Ex Parte Bilski by the amicus deadline of April 7. The Bilski case involves questions of whether an invention can fit within the requirements of 35 U.S.C. 101 if the invention does not specifically require the use of “technology.” 

35 U.S.C. 101: Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

I was part of the team that drafted and submitted IPO’s 2006 brief to the Supreme Court in the Metabolite case. There, we argued on policy grounds that the court should not set arbitrary limits on the types of innovations that should be patentable. Instead, we asked the court to “support the expectation that innovations in yet unknown areas of technology will be eligible for patent protection.”  There will be at least one Bilski brief arguing along the same lines. It will, of course, be interesting to see whether the IPO and AIPLA have altered their positions in the past two years.

If the court chooses to narrow subject matter, the 2007 Comiskey decision will quickly become an elephant in the room. In that opinion, the Federal Circuit implicitly held that a patent applicant cannot rely on nonpatentable subject matter portions of an invention to prove nonobviousness.  Comiskey’s arguably unique inventive contribution was a method of arbitration. By itself, that method was considered an unpatentable mental process. And, Comiskey’s attempt to tie the process to a microprocessor were also unsuccessful:

“The routine addition of modern electronics to an otherwise unpatentable invention typically creates a prima facie case of obviousness. Moreover, there is no pertinent evidence of secondary considerations because the only evidence offered is of long-felt need for the unpatentable mental process itself, not long-felt need for the combination of the mental process and a modern communication device or computer.”

The implicit holdings here: (1) during nonobviousness analysis, any portion of an invention that constitutes nonstatutory subject matter will be considered de facto obvious; and (2) evidence of secondary considerations do not apply to portions of an invention that are not considered “patentable subject matter.”

Depending upon how it is interpreted, the Comiskey decision may greatly influence the impact of a rule narrowing patentable subject matter. For that reason, I hope that at least one brief will focus its effort on this important issue.


Patently-O Bits and Bytes No. 25


E.D. Texas Venue Case Goes En Banc; AIPLA Amicus Brief

The AIPLA believes that the Eastern District of Texas is hearing too many patent cases. Legally, the organization has decided that E.D. Texas judges are “misapplying federal transfer rules by giving too much weight to plaintiffs’ choice of venue.”

In re Volkswagen is up for an en banc hearing in the 5th circuit court of appeals. The VW case is a product liability case stemming from a VW Golf crash that killed a 7–year old girl. The accident occurred in Dallas (location of the N.D. Tex.), but the case was filed 150 miles away in Marshall. 

VW argues that the District Court (Judge Ward) abused its discretion in denying the defendant’s §1404 venue transfer motion — arguing that it would be “unduly burdensome” for the multinational to litigate in the Eastern District of Texas rather than the Northern District of Texas.

28 U.S.C. §1391, the venue statute, broadly allows cases to proceed in any venue where a defendant corporation “is subject to personal jurisdiction at the time the action is commenced.”  Even when venue is proper, a court may still transfer the case to a more convenient location. 28 U.S.C. §1404 provides that a district court may transfer a civil action when it is both more convenient for the parties and witnesses and is “in the interest of justice.” 

In an amicus brief filed in the case, the AIPLA argues that there are many cases sitting in the Eastern District of Texas that should more properly be heard elsewhere, and that the district court has been too slow to transfer venue.

“The routine filing of patent infringement complaints in the Eastern District of Texas that have essentially no connection to that district has been encouraged by the seeming reluctance of courts in that district to transfer cases under § 1404(a).”

As a backstop to its arguments, the AIPLA also raised the threat of legislation:

“It is also worth noting that legislation on patent reform currently before Congress seeks to narrow drastically venue in patent cases, driven to a great extent by a desire to address the kind of forum shopping that occurs in the Eastern District of Texas.4 Providing the district courts clear guidance on applying the transfer provision will go a long way toward solving the forum shopping problem that is the impetus behind the pending venue legislation.”

The AIPLA Argument:

  1. The location of filing should only be a presumptive starting point in the venue analysis. If a defendant shows “good cause” reason to transfer, then the presumption should evaporate.
  2. “Proximity of evidence” should be a major factor.
  3. This decision is made at a very early stage in the litigation, thus the court should not require a high level of precise evidence to prove convenience.
  4. The “public interest” is usually a sham argument. (That the people of E.D. Tex. have an interest in having their courts adjudicate patent cases if the goods are sold there).

Read the AIPLA Brief

Intramurals: The European Patent Divide

European IP Attorney Severin de Wit writes one of the best patent focused blogs on the European continent: IPEG. With his permission, I am reposting his article on European Patent No. 0455 750 B1 owned by the US company Document Security Systems, Inc. (DSS).

PatentLawPic253You are a European institution, the European Central Bank (ECB), and you seek the invalidation of what has been granted as a valid right by another European institution, the European Patent Office (EPO). The last weeks we got a taste of how The Great Patent Divide, the most un-European experience in patent law, has turned into Europe’s Patent Demise.

Threatened by a patent infringement claim of a US company, Document Security Systems, Inc. (DSS) the ECB seeks invalidation in several European countries. The UK patents court (in first instance) invalidates the patent, EP 0455 750 B1 for a ‘Method of making a nonreplicable document’ on March 26, 2007. A day later the German Federal Patent Court (“BundesPatentGericht”) disagrees with the UK court and finds the patent valid. By judgment of March 12, 2008 the District Court in The Hague, Netherlands, upheld the patent as valid and follows Germany. Just a few weeks earlier, on 9th January 2008, the French court (“Tribunal de Grande Instance de Paris”) agreed with the UK court in first instance and distances itself from the German court and found the patent invalid.

On March 19, 2008, the UK Appeal Court affirmed the invalidity findings of its first instance colleagues. Patent dead, in the UK and France (so far, appeal in France still pending).

You still with me?

What a disgrace. What a sorry state European patent law is in. We know that Europe is lacking a European view on validity (and infringement for that matter), but how can this be explained? The view, generally held, is that UK courts are (very) critical on what comes out of the European Patent Office. [According to the UK,] Patent 0455750 should not have been granted. France, not yet known as “patent-unfriendly” has chosen the side of the UK in this case. Is this a scary sign of what is there to come? Maybe (just) an incident and no forbode of what is next (France as the next patent basher)? One begins to wonder, are the Germans more fond of what comes out of their (“own”) EPO, located in Munich? Is Holland more inclined to accept what comes out of Munich as well? Or is this all “coincidence”? We think not. We have seen this divide before (on stents: Angiotech’s patent for Taxus stent revoked by UK Court of Appeal, (partially) upheld by the Dutch District Court, but then it was only for Germany & Holland versus the UK. Is France now joining the chorus of “we-know-it-all-better-than-the-EPO” ?

Recent Patent Law Job Postings on Patently-O


Disavowal of Claim Scope: CDS v. Dell

PatentLawPic251Computer Docking Station v. Dell (Fed. Cir. 2008)

More than any other patent litigation issue, a winning claim construction argument needs to do more than simply convince the district court judge.  Rather, the best argument will both convince the district court judge and will also teach that judge how to write a claim construction opinion that holds up on appeal.

Limiting Preamble: CDS’s patent was filed in 1991 and includes the claim preamble: “portable computer.” In interpreting that preamble term, the CAFC found that it must be limiting because statements in the specification and prosecution history emphasize portability, but the portability limitation is not found in the claims.

“The written description and applicants’ statements during prosecution emphasize this feature of the invention, yet this limitation does not appear in the body of the claims. As a result, this court finds that the terms “portable computer” and “portable computer microprocessing system” limit the scope of the asserted claims.”

Disavowal of Claim Scope: The CAFC also found that CDS had, through its statements in the specification and during prosecution, disavowed coverage of a laptop computer device that included an attached keyboard and screen.  In claim scope disavowal, the court always looks for a linguistic hook in the claims. Here, it relied again on the “portable computer” preamble term — finding that the patentee had disavowed coverage of portable computers that included those features.

Attachable features: In several figures, the patentee showed how a keyboard and screen could be coupled with its device. However, the CAFC noted that those attachments were only temporary and did not become part of the portable computer. “Thus, a cable connects the physically separate keyboard to the main housing. The keyboard is neither built-in nor attached.”

Exceptional Case: The patentee is not liable for attorney fees because this is not an ‘exceptional case’ under 35 USC 285. In particular, the court noted that it was not “self-evident” at the beginning of the claim construction analysis that laptop coverage had been disavowed. (Of course, this finding cuts directly against the finding that the public was on notice of a clear disavowal of claim scope)

LinkedIn describes PTO Employees

PatentLawPic252The social networking site LinkedIn has created a profile of USPTO employees (Based on LinkedIn members). In their data, the most common career path is from ASRC (a major Gov’t Contractor) to the USPTO; then to Bingham McCutchen. Folks leave Bingham for Perkins Coie and Goodwin Procter. From there, they branch out to Ropes & Gray, Foley Hoag, Microsoft, Amazon, Expedia, Wilson Sonsini, and Google.

With all this job-hopping, LinkedIn helps me keep track of patent law folks I have met along the way (even after we change jobs and move across the world).

Patent Troll Tracker & Cisco’s New Blog Policy

WorldisflatMost major companies are still trying to get their heads wrapped around the flat world concepts that Thomas Friedman presented in his 2005 bestseller. The reputational power of the internet is now driving many corporate balance sheets.  The business issue: ensuring that the reputation is going right way.  Certainly, this management may be a bit like herding cats: In less than five minutes, anyone with an internet connection and skills with a mouse can become an anonymous online publisher to the world without spending a dime.  The impact of cheap worldwide distribution is multiplied by a seeming societal shift away from a desire for privacy, away from strong employee loyalty, and away from a respect for intellectual property in favor of free speech and free software.

Cisco Systems found itself in the midst of a potential reputation firestorm when the popular anonymous blogger known as the Patent Troll Tracker (PTT) revealed himself as a Cisco IP Director Rick Frenkel.  The PTT blog focused on patent enforcement companies — so called patent trolls — that have sued major technology companies such as Cisco, Microsoft, Sprint, and others.  Frenkel and Cisco have been accused of defaming two Texas plaintiffs attorneys and have also been accused of a stealth anti-patent lobbying campaign. (Cisco is a major part of the “Coalition for Patent Fairness” — an organization lobbying for weaker patent rights).

One way that Cisco can emerge as a publicity winner is to promote and encourage employee publication and free speech.  Cisco appears to be taking this road. I discussed the Frenkel case with a Cisco spokesperson today who indicated that Cisco is defending against the lawsuit; that Cisco is “committed to supporting [its] employees and their right to online expression”; and that Frenkel will certainly be allowed to continue blogging while a Cisco employee.

The internet’s ease of anonymity is in tension with the prevailing blog notion of transparency.  The problem with anonymous corporate blogs is the potential for customer backlash when they discover the true content provider.  The other major problem with anonymous publication is the tendency of anonymous authors to become reckless authors. (See, e.g., anonymous Patently-O comments). Cisco’s new employee publishing policy takes these issues into consideration. The policy: No anonymous blogging or comments on issues associated with your Cisco job.

“If you comment on any aspect of the company’s business or any policy issue the company is involved in where you have responsibility for Cisco’s engagement, you must clearly identify yourself as a Cisco employee in your postings or blog site(s) and include a disclaimer that the views are your own and not those of Cisco. In addition, Cisco employees should not circulate postings that they know are written by other employees without informing the recipient that the source was within Cisco.”

I disagree with many of Cisco’s patent reform suggestions, but I admire the way the company is handling this issue.


CAFC Again Vacates Preliminary Injunction: No Likelihood of Success

PatentLawPic250A G Design v. Trainman Lantern (Fed. Cir. 2008) (nonprecedential)

AG sued Trainman for infringement of its hand-held RR Lantern patent. (US Pat. No. 7,118,245).  The W.D. Washington district court issued a preliminary injunction after hearing an expert report that Trainman’s product was essentially identical to the patented device (except for one claim element).

On appeal the CAFC vacated the preliminary injunction — finding that the lower court had committed legal error in finding that the patentee had “a likelihood of success on the merits.”

Legal Standard for Preliminary Relief: The CAFC nominally applies a four factor standard for determining whether preliminary relief is warranted. However, two factors are requisite and typically determinative: (a) Likelihood of success on the merits and (b) irreparable harm associated without preliminary relief.

Likelihood of Success: A likelihood of success on the merits requires some proof that the defendant “infringes at least one valid and enforceable claim” of the asserted patent. The likelihood of success may be rebutted by an accused infringer who raises a “substantial question” regarding the patent’s validity, enforceability, or whether the accused device infringes the asserted claims.  In a recent case, the a different panel (Judges Rader & Dyk) found the substantial question threshold met by evidence that “cast[s] doubt on the [claim’s] validity.” Erico Int’l v. Vutec & Doc’s Marketing (Fed. Cir. 2008).

Lacking a Claim Element: Because the accused device here lacked a claim element (a ‘plurality of ports’ in the reflector), it could not literally infringe. Likewise, the CAFC found that the ‘plurality of ports’ limitation had been added during prosecution to narrow the claims — presumptively foreclosing infringement by equivalents. (Unless AG can show that the “rationale for the amendment is tangential to the equivalent in question.”).

Validity Questions: The CAFC also found error in the district court opinion because the court did not specifically analyze whether a disclosed prototype included “all of the limitations of any of the asserted claims.”  Instead, for the purposes of the PI, the district court had only noted that the prototype was “different” from the patent claims.

Expired Non-Compete: The parties here have a history including a non-compete agreement that expired during the appeal.  Because it is now expired, the CAFC found that the non-compete could not serve as a basis for preliminary relief.



Courts Resist Using the Term Patent Troll

Despite being used en gross by accused defendants, courts have largely resisted using the term “patent troll” in their decisions. A Westlaw search revealed only seven examples of the pejorative term in court decisions:

  • IP Innovation v. (Fed. Cir. 2005) (The CAFC noted that the term had been used in the defendant’s argument, but refused to engage in a discussion of its implication).
  • Colida v. Sanyo (Fed. Cir. 2004) (In dissent, Judge Newman argued that attorney fees should not be granted against an accused “patent troll”)
  • Hynix Semiconductor v. Rambus (N.D. Cal. 2008) (Judge Whyte granting Rambus motion in limine to prohibit use of the term “patent troll” during the trial)
  • Taurus IP v. DaimlerChrysler (W.D. Wisc. 2007) (Citing Magliocca’s article; piercing the corporate veil of the accused “nonpracticing entities”)
  • InternetAd Systems v. Opodo ( N.D. Tex. 2007)  (Defining a patent troll as a “small company that did not manufacture products or supply services based on patents in question but enforced patent rights against accused infringers in attempt to collect licensing fees”).
  • v. Furnace Brook (D.Utah 2005) (The court indicated a preference for finding that “patent trolls should be subject to more general jurisdiction, perhaps as a way of deterring coercive baseless litigation.” However, the court could not find a legal hook for such a holding.).
  • Black & Decker Mfg. v. Baltimore Truck Tire Service (D.Md. 1928) (Patent was issued to Mr. Fred Troll)

In the eBay decision, the Supreme Court ruled that the status of the patent owner may not operate as a categorical exclusion from the prospect of injunctive relief.

Oakley’s Sunglasses and Design Patents

Patent.Law070Oakley recently sued Fox, Marvel, and others for infringement of its design sunglasses design patent No. D470,166. According to the complaint, the movie industry has knocked-off Oakley’s design to promote Silver Surfer DVDs.

Oakley owns over 100 design patents on its various sunglass designs. Since 2004, the fashion trend-setter has filed over 30 complaints against accused infringers.

Apparently, Mardsen wore genuine Oakley in his role as Cyclops. What damages if they had been fakes?

Absolute Novelty, First-to-File, and Foreign Bias

Patent.Law068The comments to my recent post on the First-to-File legislation raised several important issues that need some unpacking. 

Separating First-to-File from Absolute Novelty: There is a tendency to conflate a first-to-file system with a system requiring absolute novelty.  At the surface, these two systems may appear linked — Both rules shift the legal inquiry from the date of invention to the date of application filing.  This natural linkage has been reflected in the various patent laws: first-to-file countries generally also require absolute novelty, while the US (the first-to-invent country) allows a grace period. 

Despite their usual link, the two policies are separable. We could implement a first-to-file system that conclusively determines competing priority claims by looking only to effective filing dates but, at the same time, allow a one-year grace period when judging novelty and nonobviousness.  From my experience, the concerns of most patent applicants are more focused on the problem of novelty rather than rare interference issues.

As Mark Lemley has noted the current legislation already does this in two ways: (1) granting a grace period for inventor-originated disclosures; and (2) providing that the first-to-file system will only be implemented after the rest of the world adopts the grace period (in House bill only).

Patent.Law067When you try to help, you actually harm: One of our European readers commented that the American grace period is essentially a subsidy to the rest of the world.  According to the story, the grace period lulls American inventors into disclosing prior to filing for protection.  Those inventors can still pursue US patent applications, but will be unable to obtain patents elsewhere. The quote: “Thank goodness USA perseveres with the grace period. Otherwise ROW really would be dominated by US IPR.”

Rule 131 Declarations: How weak does your patent become after filing a Rule 131 declaration? If you received an office action rejection and had solid arguments of both (1) your prior invention and (2) nonobviousness.  Would you rather (1) file a Rule 131 declaration and avoid characterizing the reference and your invention; (2) explain why the claimed invention is not obvious even in light of the asserted art; or (3) both.

Ex Parte Bilski: Briefing Round I

As requested by the CAFC, both the PTO and Bilski’s attorneys (the Webb Firm) simultaneously filed briefs addressing the en banc that probe the scope of patent-eligible subject under 35 U.S.C. § 101. The Bilski facts focus on the patentability of a method of managing risk that is not tied to any particular form of technology. More generally, the CAFC appears prepared to reevaluate its decade-old State Street Bank decision.

A bevy of amici briefs are expected to be filed in early April.

Patently-O Bits and Bytes No. 24

  • Using Prosecution Histories: I’m going to do a survey next week on how prosecution history is used in practice, but I would like some reader input to help me create the survey. What are some examples of times when you look at the prosecution history of an application?  This survey will span prosecution, litigation, licensing, FTO, patent families and related applications, and will also touch on the cost associated with reviewing a prosecution history. [Comment or e-mail]
  • Call for Papers: Seton Hall Law Review asked that I post a call for papers for their October symposium titled: Preparing for a Pharmaceutical Response to Pandemic Influenza.  If you would like to participate, submit a 200 word abstract by tax day: April 15. [LINK]
  • Patent.Law069A Sad Comment on Comments: Reader comments are very useful in providing additional analysis; anecdotes; pointing out my own biases and typos; etc. However, I want to keep this blog on the topic of patent law — not random constitutional and gun control theory; not clothing choices of other readers; no defamation; and not personal attacks against other posters.
  • Appointing CAFC Judges: For at least the second time in the past two months, a Federal Circuit judge has publicly discussed the fact that eight of the current twelve CAFC judges will be up for “senior status” within the next two years. The Honorable Kimberly Moore discussed this issue at a recent IPO conference in DC. The next President can expect to shape the face of Patent Law through these appointments.

In Defiance of Kinik: 271(e)(1) Safeharbor Applies to ITC Action Against Importation of Product Made by Patented Process

United_States_International_Trade_Commission_sealAmgen v. ITC and Roche Diagnostics (Fed. Cir. 2008)

Majority Opinion by Judge Newman: In a Section 337 action, the International Trade Commission (ITC) sided with the accused infringer Roche — finding that Roche’s (proposed) importation of recombinant human erythropoietin (EPO) were exempt from charges of infringement under the safeharbor of 35 USC Section 271(e)(1). Amgen had alleged that the importation violated Section 337’s prohibition on importing products made by a patented process.

On appeal, Amgen argues that the 271(e)(1) safeharbor does not apply to process patent liability in Section 337 Tariff Act actions.

This case relates to Kinik, where the CAFC held that the limitations of 271(g)(1) do not apply to ITC actions. In that case, however, the 271(g)(1) limitations were specifically linked to infringement under 271(g) and not tied to infringement in general.

By its terms, 271(e)(1) is not expressly limited to the Patent Act. Amgen argues, however, that the 271(e)(1) exceptions should not apply to excuse importation of a product made by a patented process. Rather, patent holder claims that the statute should only apply to accused infringers who “make, use, offer to sell, or sell within the United States or import into the United States a patented invention.” (quoting 271(e)(1)). And, as an extension, the exception does not apply to infringing actions not listed in the exception — here that infringement is importation of a product made by a patented process.

The Federal Circuit Found that the Exception Should Receive an Expansive Reading: In two cases, the Supreme Court has held that the 271(e)(1) exception should be broadly interpreted.

In both Merck and Eli Lilly the [Supreme] Court stressed the congressional purpose of removing patent-based barriers to proceeding with federal regulatory approval of medical products. This purpose and its application in precedent weigh heavily against selectively withholding the ’271(e)(1) exemption depending on whether the infringement action is in the district court or the International Trade Commission. We thus affirm the Commission’s ruling that the safe harbor statute applies to process patents in actions under Section 337, when the imported product is used for the exempt purposes of ’271(e)(1).

Thus, this case creates an internal split with the authors of Kinik.

Each Use Must Be Analyzed: Amgen did win on another point — that the 271(e)(1) exception does not excuse all activities while a defendant is seeking FDA approval. Rather a court (or Commission) must “consider the exempt status of each study [or use] for which question has reasonably been raised.”

In Dissent, Judge Linn stated the situation clearly. Congress likely intended for the safe harbor to include ITC actions, but the safe harbor statute does not – by its terms – actually extend that far.

The thrust of the majority’s position is that Congress probably intended § 271(e)(1) to apply in section 337 proceedings the same way it applies in patent infringement litigation under Title 35.  While I agree that it would make sense for section 337 to apply that way, the problem remains that if that is what Congress intended, it is not what Congress unambiguously said. . . .

Indeed, it is worth noting that there are also potential policy arguments in support of the textual reading of the statute. Congress may not have intended to extend the same benefits of § 271(e)(1) to foreign pharmaceutical companies as it extended to domestic ones, or it may have intended to discourage the importation of pharmaceuticals that have not yet been approved by the FDA.