July 2008

Checklist to Avoid Inequitable Conduct

Debra Anderson recently published her checklist for ensuring that the PTO is notified of all relevant prior art and public uses of an invention. What is on your checklist?

  1. Remind your client of the duty to disclose relevant prior art, including related copending applications (and make sure to file this prior art with the United States Patent and Trademark Office).
  2. Make sure that the examiner at the patent office is aware of activity in related cases, if handled by other examiners.
  3. Ask [inventors and in-house attorneys] about attendance at conferences [including notes taken], posters, and abstracts submitted to journals.
  4. Remember to file prior art uncovered in foreign searches.
  5. Ask about offers for sale or other public disclosures through use or publication.
  6. If you are filing a declaration, make certain that it is clear to the PTO where the interests of the declarant lie. Do not conceal from the PTO facts known to you that are adverse to your client’s position (such as negative data), in order to advance your client’s case.
  7. Discuss the date of invention and related evidence with your client.


  • Bracketed portions are my edits.
  • Read the whole article in IP Today.


Claim Construction Not Required Before Preliminary Injunction Decision

PatentLawPic388Novo Nordisk v. Sanofi-Aventis (Fed. Cir. 2008) (nonprecedential)

Novo sued Sanofi alleging infringement of its patent covering an insulin pen. In a Feb 19, 2008 order, the district court denied Novo’s request for a preliminary injunction – finding that Sanofi has a strong non-infringement argument. On appeal, the CAFC quickly affirmed.

The decision to not issue a preliminary injunction rests within the discretion of the district court.

We will reverse such a decision only when an appellant demonstrates that the “factors relied on by the district court [were] clearly erroneous” and “that a denial of the preliminary relief sought would amount to an abuse of the court’s discretion upon reversal of an erroneous finding.” New Eng. Braiding Co. v. A.W. Chesterton Co., 970 F.2d 878 (Fed. Cir. 1992).

In this case, the district court did not construe the claims prior to denying the PI request. It did note, however, that “questions exist” as to whether the patented invention requires direct gearing and a non-rotatable piston — elements not found in the accused product.

In its appellate decision, the CAFC found that the lower court had acted properly in denying the PI request without deciding the claim construction issue: 

At the preliminary injunction stage, however, it is irrelevant whether this case presents greater issues of claim construction or validity—the existence of one or both of these issues is sufficient to justify the district court’s decision to deny a preliminary injunction.


  • Note: My former firm, MBHB, represents Sanofi-Aventis in this appeal.



Patently-O Bits and Bytes No. 53

  • Late Requests for Patent Term Extension: An earlier post noted that the PTO had rejected AstraZeneca’s request for a patent term extension because it was filed one day late. Interestingly in its filing, Astra found 14 other PTE requests that were filed on the 61st day and were still granted: 5,827,937 (RESTYLANE); 5,639,639 (Luveris); 5,532,221; 5,441,745; 4,941,093; 4,874,749; 4,836,217 (ALLERGEN PATCH); 4,830,010; 4,702,253; 4,513,006; etc.
  • The following histogram shows the distribution of patent term extensions granted by the PTO. The average extension is just over 2 1/2 years. The PTE list includes about 100 patents that would have expired already, but are still in force due to the extension. See http://www.uspto.gov/web/offices/pac/dapp/opla/term/156.html.


  • Question: The CAFC reviews BPAI factual findings for substantial evidence. If an applicant appeals a Board ruling to a district court, how does that court treat the BPAI’s facutal findings? (Please cite a case or give your experience)
  • SC Law Review: When I was born, my dad was attending USC — that’s right the Gamecocks of South Carolina.  The South Carolina Law Review transforming to a a peer review journal and is looking for help & comments. http://www.sclawreview.org/peerreview/index.php.

USPTO Rejects SYMBICORT Patent Extension

PatentLawPic386In re Patent Term Extension for Patent No. 5,674,860 (Commissioner for Patents 2008)

Summary: The USPTO has rejected AstraZeneca’s request for an extension of its patent term on Symbicort. In its decision, the office gave two reasons: (1) new combinations of old drugs do not receive extensions; and (2) AstraZeneca missed the filing deadline by a day.

Intro: AstraZeneca’s drug Symbicort has two active ingredients: formoterol fumarate dihydrate and budesonide. Global Symbicort sales were $1.6 billion in 2007.  The original patent application covering the combo invention was filed in 1991 by two of Astra’s Swedish scientists. The US version issued in 1997.

“Human drug products” require pre-market FDA approval – a long and expensive process. The FDA approved Symbicort in July 2006 – some 15 years after the original patent application was filed.  This long delay is common, and the Hatch-Waxman provision of 35 USC 156 provides for an extension of the patent term based on these delays.

In this case, however, the USPTO has rejected Astra’s extension petition — finding the patent ineligible.

Combo Drugs: Under the statute, extensions are only granted if the patented “product … is the first permitted [and FDA approved] commercial marketing use of the product.”  35 USC 156(a)(5)(A). It turns out that each active ingredient in the Symbicort has been previously marketed – although the combination was new to the market.  Applying the rule to the facts, the PTO found that the “product” had been previously marketed:

“Because both active ingredients in SYMBICORT have been previously approved for commercial marketing or use before the approval of SYMBICORT, Applicant’s approval of SYMBICORT does not qualify as the first permitted commercial marketing or use of either active ingredient, as required by section 156(a)(5).”

Synergy is Irrelevant: Importantly, the PTO rejected the argument that the relevant “product” must include both active ingredients because they have synergistic value when combined.

“The term “product” as used in 35 U.S.C. 156 includes any new drug or antibiotic drug, “as a single entity or in combination with another active ingredient.” 35 U.S.C. 156 (f)(2). Section 156(f)(2) says nothing about whether a combination is synergistic.”

This decision follows the CAFC precedent found in Arnold Partnership v. Dudas, 362 F.3d 1338 (Fed. Cir. 2004). In that case, the court rejected a PTE extension for Vicoprofen (hydrocodone/ibuprofen) announcing that the statute requires a component-by-component analysis for PTE extension:

“This statutory language requires this court to examine a drug product patent’s eligibility for extension on a component-by-component, or an ingredient-by-ingredient basis.  The final phrase in subsection (f) –“including any salt or ester of the active ingredient, as a single entity or in combination with another active ingredient” – emphasizes this point.  This final phrase of subsection (f) shows that the statute refers to a drug product on a component-by-component basis, not as a whole.” Arnold Partnership.

MPEP 2751 includes the interesting statement that “an approved product having two active ingredients, which are not shown to have a synergistic effect or have pharmacological interaction, will not be considered to have a single active ingredient made of the two active ingredients.”  The PTO in its decision rejected the negative implication of this statement.

One Day Late: As an alternative reason for its decision, the Commissioner found that the PTE Petition had been filed one day late. It is always a trick to figure out whether the first day of a time period “counts.” 

Section 156 announces that the due date is: “within the sixty-day period beginning on the date the product received [FDA] permission.” PTO rules spell this out more particularly – requiring the application be submitted “within the sixty day period beginning on the date the product first received permission.” 37 C.F.R. 1.720(f). Based on a “plain language” reading of the statute and rule, the PTO decided that the day that permission was granted counts as day one rather than day zero.

Because the FDA granted permission on July 21, 2006, PTO found that the sixty-day period ended on September 18, 2006. Astra filed its petition on September 19.

Astra can appeal “within TWO MONTHS of the mailing date of this letter.”  The PTO’s letter was sent on June 13 – query whether the reply is due on the 12th, 13th, or 14th?

PTO Press Release: Deputy Peterlin Leaving PTO

Margaret Peterlin has announced that she will be leaving the PTO in August.  She has sparked resistance from the patent community ever since her appointment as deputy director of the USPTO in May 2007. She is considered an expert at legislative tactics at a time when the PTO was asking for legislation opposed by many patent practitioners.  In late 2007, a DC District dismissed a lawsuit against the USPTO requesting that Peterlin be removed from office. The complaint alleged that she lacked the intellectual property law experience required by statute for her position.  In many ways, the negative reaction to Peterlin was simply a reflection of frustrations felt by many patent practitioners.  In an internal message to PTO employees, Director Jon Dudas indicated that Peterlin is also expecting her first child later this year.  Congratulations and Good Luck!! (more…)

BPAI Factual Findings Affirmed Based on Substantial Evidence

In re Stauffer (Fed. Cir. 2008) (nonprecedential)

PatentLawPic381This is a nice idea: A device for automatically printing out caller ID records. What I prefer (and have used in the past) is to receive an e-mail receipt for all incoming calls and with messages attached in an mp3.

SEI (the party in interest) has a simple enough claim:

1. A caller ID printing device, comprising:

a controller configured to detect caller ID information from an incoming call; and
a printer configured to automatically print the caller ID information; and
a message template onto a call record immediately after the first receipt of a first ring signal and without user intervention.

The BPAI rejected the claim as obvious. On appeal, the CAFC reminded the applicant that the BPAI’s underlying factual determinations need only be supported by “substantial evidence.”

‘Substantial evidence is evidence that “a reasonable mind might accept as adequate to support a conclusion.” In re Gartside, 203 F.3d 1305 (Fed. Cir. 2000). “[W]here two different inconsistent conclusions may reasonably be drawn from evidence in the record, an agency’s decision to favor one conclusion over the other is the epitome of a decision that must be sustained upon review for substantial evidence.” In re Jolley, 308 F.3d 1317 (Fed. Cir. 2002). This court will not determine that a decision made by the Board is unsupported “simply because the Board chose one conclusion over another plausible alternative.” Id.’

In this case, the panel easily found that two references combined teach each element of the invention and render it obvious.

Secondary Considerations of Obviousness in a Patent Case: The Seldom-Used “Simultaneous Invention” Factor

Secondary considerations are most often used by patentees as circumstantial evidence that an invention was nonobvious.  “Negative” secondary considerations – those used as circumstantial evidence of obviousness – have received less attention and less support in the case law. However, Brent Yamashita discusses the potential use of one negative secondary consideration: the simultaneous invention factor.  Brent gave his permission to publish this short article on the topic.

PatentLawPic382By Brent Yamashita*

Introduction: In nearly every patent litigation, the accused infringer will argue that the asserted patent claims are obvious (if not anticipated) by the prior art and therefore should be ruled invalid.  The U.S. Supreme Court substantially altered the law of obviousness in KSR when it held that an accused infringer does not necessarily need to show “a teaching, suggestion, or motivation” (“TSM”) in the prior art to combine known elements in order to show that the combination was obvious.  See KSR Int’l Co. v. Teleflex Inc., 550 U.S. ___, 127 S. Ct. 1727, 1741 (2007).  Now that proving obviousness no longer requires establishing TSM, the secondary considerations of obviousness and nonobviousness have taken on greater importance in obviousness determinations, as KSR left that doctrine fully intact.

The concept of secondary considerations originated in Graham, where the Supreme Court stated that secondary considerations can serve as relevant “indicia of obviousness or nonobviousness” and might be utilized “to give light to the circumstances surrounding the origin of the subject matter to be patented.”  See Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 17-18 (1966).  The Court further stated that secondary considerations can include commercial success, long-felt but unsolved need, and the failure of others.  See Id.  Other factors recognized by the Federal Circuit after Graham include whether the prior art teaches away from the invention, whether others have copied the invention, and whether the invention has received industry acclamation.  See, e.g., Ecolochem, Inc. v. Southern California Edison Co., 227 F.3d 1361 (Fed. Cir. 2000), cert. denied, 532 U.S. 974 (2001).

The Simultaneous Invention Factor: Another secondary consideration-and one which appears to have been discussed and applied much less frequently by the Federal Circuit than the other secondary considerations-is the simultaneous invention consideration.  The Federal Circuit has stated that, “[T]he possibility of near simultaneous invention by two or more equally talented inventors working independently,… may or may not be an indication of obviousness when considered in light of all the circumstances.”  Ecolochem, 227 F.3d at 1379 (quoting Lindemann Maschinenfabrik GMBH v. American Hoist and Derrick Co., 730 F.2d 1452, 1460 (Fed. Cir. 1984)).  In other words, the fact that another person simultaneously and independently created the same invention claimed in the patent-in-suit can serve as an indication that the invention was obvious.

Every accused infringer should consider this often-overlooked secondary consideration in preparing its obviousness defense.  This factor can be particularly useful in a situation where the simultaneous inventions occurred shortly after an enabling technology was introduced.  Some inventions only become possible-or relevant-once a foundational technology becomes known.  For example, tires could not have been invented before the wheel and would have been meaningless before the wheel.  An enabling technology can serve as a chronological starting point for the simultaneous inventions that follow, which can be useful in gauging obviousness of the invention.

In this particular context, I propose that the simultaneous invention factor be modified as follows:  Simultaneous invention by a first inventor and a second inventor is indicative of obviousness when the development by the two inventors occurred independent of one another in a simultaneous manner shortly after an enabling technology emerged and where there is a nexus between the enabling technology and the development by the two inventors.  Applying the simultaneous invention factor in this manner would reflect the fact that if more than one person develops the claimed invention quickly once all of the necessary enabling technology becomes available, then the invention arguably was obvious.

PatentLawPic383As an example, imagine the following sequence of events: 

  • March 1, 1925:  Company A introduces the world’s first TV.  The TV includes an antenna for receiving broadcast signals.  (Admittedly, TV content is hard to come by at this time.)
  • May 1, 1925:  Inventor B develops a TV antenna that improves the reception of Company A’s TV.  Inventor B files a patent application on his invention and eventually obtains the patent.
  • May 15, 1925:  Inventor C, independently of Inventor B, develops a TV antenna that improves the reception of Company A’s TV.  Inventor C’s antenna practices the claims of Inventor B’s patent when it ultimately issues.

Under the simultaneous invention factor, an accused infringer in a lawsuit brought by the owner of Inventor B’s patent could argue that the fact that Inventor B and Inventor C each independently created a TV antenna shortly after an enabling technology (i.e., Company A’s TV) emerged suggests that the claimed invention was obvious once the enabling technology existed and that the invention would have been invented sooner had the enabling technology been available sooner.  In addition, the simultaneous invention factor in this context would counteract the ability of the patent holder to argue that a long-felt but unsolved need for the claimed invention shows that the patent was nonobvious, since the “long” aspect of the long-felt need in this context was a result of the amount of time that elapsed before the TV emerged and was not a result of the amount of time taken to develop the invention once the enabling technology existed.

From a litigation strategy standpoint, in most instances the accused infringer under this proposed rule would do whatever it could to find technology that preceded the invention and argue that it was enabling and that the invention occurred only once that technology existed.  The proposed modification of the simultaneous invention rule potentially could become a “knee-jerk” obviousness argument by every accused infringer, and courts therefore must be diligent about identifying and rejecting spurious arguments.  In that regard, requiring litigants to establish a nexus between the simultaneous inventions and the enabling technology will help to prevent the abuse of this secondary consideration.  The nexus will be most apparent if both inventors began their work only after the enabling technology emerged and if the inventions never could have been developed or built without that enabling technology in place.  In this sense, the enabling technology must be a genuine prerequisite or foundation for the invention.

Conclusion:  In appropriate circumstances, litigants should utilize the often-overlooked simultaneous invention factor in its obviousness defense.  If applied in the manner proposed in this article, the simultaneous invention factor properly recognizes the fact that in some instances inventions do not occur after years and years of toiling in a laboratory, but rather, after a minimal effort (executed by others independently and simultaneously) after a breakthrough in an enabling technology that is not itself the subject of the invention.


Obviousness of Chemical Compounds; Split over Inequitable Conduct


Eisai’s blockbuster ulcer drug AcipHex boasts over $1 billion in annual worldwide sales.  The company holds a patent covering the active ingredient – rabeprazole – and its salts. Dr. Reddy’s and Teva each filed ANDAs and Eisai filed suit to block generic entry.

Eisai won a summary judgment decision that the patent is infringed and enforceable. The appeal focuses on obviousness and inequitable conduct.

Obviousness of Chemical Compounds: Structural similarity is the touchstone of the obviousness inquiry for patents claiming a novel chemical compound. A looming question for pharmaceutical companies, however, is how the Supreme Court’s decision in KSR v. Teleflex will impact chemical patents.

In KSR, the Supreme Court eased a defendant’s pathway for invalidating a patent as obviousness. KSR’s focus, however was on inventions created by combining known elements.  Here, the individual components of Eisai’s claimed compound were all known. However, the Eisai decision cabins-in KSR’s importance by showing that the assumptions found in KSR often do not apply to chemical compound cases.

“The Supreme Court’s analysis in KSR thus relies on several assumptions about the prior art landscape. First, KSR assumes a starting reference point or points in the art, prior to the time of invention, from which a skilled artisan might identify a problem and pursue potential solutions. Second, KSR presupposes that the record up to the time of invention would give some reasons, available within the knowledge of one of skill in the art, to make particular modifications to achieve the claimed compound. Third, the Supreme Court’s analysis in KSR presumes that the record before the time of invention would supply some reasons for narrowing the prior art universe to a “finite number of identified, predictable solutions.” In Ortho-McNeil Pharmaceutical, Inc. v. Mylan Laboratories, Inc., 520 F.3d 1358, 1364 (Fed. Cir. 2008), this court further explained that this “easily traversed, small and finite number of alternatives . . . might support an inference of obviousness.” To the extent an art is unpredictable, as the chemical arts often are, KSR’s focus on these “identified, predictable solutions” may present a difficult hurdle because potential solutions are less likely to be genuinely predictable.”

Thus, in chemical compound cases, “a prima facie case for obviousness for a chemical compound still, in general, begins with the reasoned identification of a [prior art] lead compound.”  Obviousness can then based on structural similarity along with some “motivation that would have led one of ordinary skill in the art to select and then modify a known compound (i.e. a lead compound) in a particular way to achieve the claimed compound.”  Although the motivation to modify the prior art can come from many different fields, some motivation is needed. In chemical cases, this motivation may be proved by showing a ‘sufficiently close relationship’ between the prior art and claimed compound that would ‘create an expectation . . . that the new compound will have similar properties to the old.’ (internal quotation marks removed). In other words, an obvious substitution would be ‘predictable.’

In this case, the lead compound – Lansoprazole – is quite similar to the claimed compound Rabeprazole. The difference is only found in a trifluroethoxy substituent at the 4–position (see figure) versus a methoxypropoxy substituent.  Although structurally similar, the CAFC could not find any motivation to substitute the active groups. In particular, the court noted that it would not make sense to drop trifluroethoxy from the prior art — since it is that substituent that activated Lansoprazole.

“The record, however, shows no discernible reason for a skilled artisan to begin with lansoprazole only to drop the very feature, the fluorinated substituent, that gave this advantageous property.”

Nonobviousness affirmed.

A High Bar for Inequitable Conduct: As usual, Judge Rader took a hard stance against inequitable conduct. He writes:

“Inequitable conduct in prosecuting a patent application before the United States Patent & Trademark Office may take the form of an affirmative misrepresentation of material fact, a failure to disclose material information, or the submission of false material information, but in every case this false or misleading material communication or failure to communicate must be coupled with an intent to deceive.  Innogenetics, N.V. v. Abbott Labs., 512 F.3d 1363, 1378 (Fed. Cir. 2008).  Materiality, defined as “what a reasonable examiner would have considered important in deciding whether to allow a patent application,” and intent are both questions of fact, and require proof by clear and convincing evidence.  Id.  To satisfy the “intent” prong for unenforceability, “the involved conduct, viewed in light of all the evidence, including evidence indicative of good faith, must indicate sufficient culpability to require a finding of intent to deceive.”  Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 876 (Fed. Cir. 1988) (en banc) (citing Norton v. Curtiss, 433 F.2d 779 (CCPA 1970)).  Gross negligence is not sufficient.  Id.  This is a high bar.”

This opinion along with Judge Rader’s recent dissent in the Aventis case may show a growing split within the court on the issue of inequitable conduct.


  • I updated this report to add a squishy word: “often.” The modified sentence now reads: “However, the Eisai decision cabins-in KSR’s importance by showing that the assumptions found in KSR often do not apply to chemical compound cases.”

Reading Quanta Narrowly

David McGowan is a law professor at the University of San Diego School of Law. Much of his research involves the interplay between new technologies and antitrust law. I asked him to comments on the Supreme Court’s recent patent-antitrust decision: Quanta.

By David McGowan

To the extent possible, parties and not courts should set the terms for practicing inventions.  Parties have better information than courts; they are likely to set more efficient terms.  The Supreme Court’s opinion in Quanta Computer, Inc. v. LG Electronics, Inc, does not embrace this principle, though it may not reject it very broadly. The opinion may and should be narrowly construed.

PatentLawPic380I presume readers of this blog are generally familiar with the ruling. Intel took from LG electronics a license providing Intel a defense to infringement and immunity from contributory infringement by Intel’s customers, who knew Intel’s license did not extend to them.  The Court nevertheless held the Intel license exhausted LG’s rights insofar as Intel chips were concerned.

The Court’s analysis on the main point is too formal. Because the chips embodied substantially all the relevant LG inventions and had no substantial use unrelated to practicing those inventions, the Court thought it irrelevant that Intel customers knew their chips implied no LG license.

But an invention is an intellectual achievement distinct from its embodiment in a product.   There is no logical reason the sale of a product should exhaust rights in an invention.  There is a logical objection: Forcing patentees to load up initial sales with all the terms necessary to tailor rights to potential uses will tend to increase transaction costs of initial licenses and probably result in lumpier, less tailored contracting in general.  Better to let Intel buy its peace at a price that reflects its business and let its customers do the same. 

The statute does not compel the Court’s holding, which rests on history.  The Court should have limited rather than extended the cases it relied on.  These, such as Bauer and Motion Picture Patents, invoked exhaustion to defeat post-sale restrictions on use of a product.  But such restrictions may facilitate price discrimination or make sense for other business reasons.  Intel and LG, and firms like them, know better than courts when this is the case. 

Against this it might be argued that a robust exhaustion doctrine economizes on downstream transaction costs.  Conceptually that is true, and perhaps persuasive at the retail consumer level, but Quanta was not such a case.  Taken to its logical conclusion, this argument implies patentees are better off suing everyone and negotiating settlements than licensing anyone and giving up the ability to tailor terms.  That implication is perverse.

The Court’s devotion to history is odd because it has not shown much regard for history of late.  In eBay v. Mercexchange it was unimpressed by the long history of presumptive injunctive relief for infringement.  In the antitrust context, in Leegin Creative Leather it recently overruled the longstanding per se prohibition on minimum resale price maintenance.  And in Illinois Tool Works the Court reversed the relatively longstanding presumption that patents imply market power in tying cases. 

Quanta is at least in tension with Leegin and Tool Works.  Those cases recognize that post-sale restrictions may be efficient, a point Leegin makes directly and which is implicit in Section 271(d)(5) of the Patent Act, on which the Tool Works Court relied. In placing economic substance over transactional form, Leegin and Tool Works follow Continental TV, Inc. v. GTE Sylvania, which overruled the Court’s per se prohibition on vertical nonprice restraints.  Like exhaustion, that rule had been based on transactional formalism rather than economic analysis.

Both Leegin and Tool Works reject doctrines that trace to the same cluster of cases, such as Bauer and Motion Picture Patents, the Quanta Court cites favorably. Yet the Quanta Court said nothing to explain how its holding relates to antitrust precedents (or Section 271(d)(5)) recognizing that post-sale restrictions may be efficient.  One therefore might try to read Quanta as qualifying even its recent antitrust cases.

On this reading, at least insofar as pass-through restrictions are concerned Quanta implicitly qualifies the Federal Circuit’s Mallinckrodt precedent, which, in the misuse context, upholds patentees’ ability to impose lawful conditions on use.   Professor Ghosh has suggested (http://lawprofessors.typepad.com/antitrustprof_blog/2008/06/the-quandry-of.html) the Court’s footnote seven, which says exhaustion does not necessarily bar breach of contract claims, may point in this direction.

This reading of Quanta is neither compelled nor desirable.  It is possible to reconcile Quanta with the Court’s recent (and sensible) antitrust decisions by focusing on two things not at issue in Quanta

First, the initial license to Intel was not conditional.  The cases the Court cited also involved unconditional sales. Quanta therefore should not be read to extend to conditional licenses, and thus not to undercut Mallinckrodt directly.  Second,  Quanta presented no question regarding pass-through conditions and should not be held to govern them.  Intel merely bought immunity from suit for contributory infringement.  The Court did not stress this fact, but it is fair to repay the woodenness of its analysis with a strict reading of its holding.

A weakness of this reading is that it renders Quanta trivial.  One wonders why the Court would take a such a case.  Possibly the Court believes patent law and the Federal Circuit have got out of hand and must be reigned in.  But its majority opinions have not matched the robust commentary cert grants have prompted.  They are fairly narrow and unambitious.  So is Quanta, and it deserves to be read that way. 

Applying Festo to Claim Construction: Construing an Amended Claim

University of Texas v. BENQ, et al. (Fed. Cir. 2008)

In 2005, UT filed suit against a total of fifty-six defendants alleging infringement of claims 10 and 11 of its patent that converts text messages into binary syllabic elements before transmission.  After claim construction, the district court granted summary of non-infringement. 

Construction of Amended Claim: The appeal focuses on the term “syllabic element.” UT wanted the phrase to be broader than “a character set of one syllable.”  In its analysis of claim construction, the CAFC looked to the prosecution history.

After receiving a rejection during prosecution, UT added the “syllabic element” term to replace “an alphabetic character string” and cancelled a dependent claim directed toward matching whole words.  On appeal, the CAFC gave “substantial weight” to these amendments — presuming that the amended phrase could not be as broad as the original:

“[C]laim 10 originally recited matching with an alphabetic character string, while one of its dependent claims specified that this string comprised a word. After the examiner identified a reference that showed matching with a word, the Board of Regents limited claim 10 to require matching with syllabic element(s) and canceled the dependent claim that required matching with words. The cancellation of this dependent claim indicates that the set of “syllabic elements” does not include all words.”

In addition, because the amendment was made in order to overcome a prior art reference, the CAFC found it would be nonsensical to give the claim a definition as broad as the original:

“Moreover, if “syllabic elements” included words, then [the prior art] disclosure of matching with words would teach the portion of claim 10 that was amended to distinguish [the prior art]. We decline to adopt a construction that would effect this nonsensical result.”

Finally, the CAFC chose to hold the prosecution history against the patentee by ignoring potential arguments that lack explicit support in the intrinsic record.

“While the Board of Regents might have been able to distinguish [the prior art] on this ground, the intrinsic record fails to support the argument that it actually did so.”

Intermittent Infringement: The asserted method claim uses a comprising transition and requires that “each pre-programmed code being representative of a syllabic element.”  The accused products do use pre-programmed codes, but only some of them are representative of syllabic elements. Thus, the question on appeal was whether the claims require a vocabulary that includes only syllabic elements.  With some sophistry, the CAFC arrived at the result that an infringing vocabulary would only include syllabic elements. In particular, the claim reads as follows:

“…matching said binary code with one or more pre-programmed codes, each pre-programmed code being representative of a syllabic element; [and]

[f]orming a representation of the word from the one or more syllabic elements represented by the matched one or more pre-programmed codes…“

 Here, the CAFC used its grammatical analysis to find that the “matched” pre-programmed codes are a subset of the whole set of “each” pre-programmed code. The claim requires each pre-programmed code to be a syllabic element, ergo the entire set of pre-programmed codes must be in syllabic element form. q.e.d.

Claim construction and resulting summary judgment affirmed.



Patently-O Bits and Bytes No 52

  • PatentLawPic379Judge Ward to BSC Counsel: “The court has never had counsel so recklessly disregard its orders before this trial” [Smith Discusses]
  • David Donoghue directs us to Victoria Pynchon’s article on ‘negotiating by e-mail.’ Bottom line: e-mail negotiations increase hostility. [Article][Donoghue]
  • I’m looking for a legal analysis of the potential pitfalls of outsourcing of patent proseuction. Anyone? dcrouch@patentlyo.com.
  • Paul Caron’s Law Prof Blog Ranking puts Patently-O tied for 5th in the nation based on web site visits in the past year.

Outsourcing of Patent Preparation: PTO Says Beware

In a recent notice, the PTO has indicated that it may be illegal to outsource invention information to a foreign county for the purposes preparing a US patent application.

  1. A foreign filing license from the USPTO does not authorize the exporting of subject matter abroad for the preparation of patent applications to be filed in the United States.
  2. Applicants who are considering exporting subject matter abroad for the preparation of patent applications to be filed in the United States should contact the Bureau of Industry and Security (BIS) at the Department of Commerce for the appropriate clearances.


What’s Sauce For the Private Goose…

Ilya Shapiro is a Senior Fellow at the libertarian Cato Institute in DC. He was also my classmate in both college and law school. In a recent op-ed for the Legal Times, Shapiro supported BPMC’s contention that the state of California should not be immune from charges of patent infringement.

What’s Sauce For the Private Goose…

by Ilya Shapiro (This article appeared in the Legal Times on June 2, 2008.)

… In Biomedical Patent Management Corp. v. California Department of Health Services, the biotechnology company known as BPMC is suing the state of California for patent infringement—specifically, of the company’s patent on a form of prenatal screening for fetal abnormalities. Ignoring the merits of the suit, the federal district court in San Francisco dismissed it on the ground of “sovereign immunity”: Under the Supreme Court’s reading of the 11th Amendment, a state cannot be sued in federal court without its consent. The U.S. Court of Appeals for the Federal Circuit—which handles all appeals in patent litigation—affirmed the lower court decision.

So BPMC has turned to the Supreme Court, which in recent years has been increasingly willing to reverse the Federal Circuit. The company wants the Court to strip California’s immunity in this case because the state’s Department of Health Services previously waived immunity when it joined a suit brought by a state contractor about the same patented procedure. That is, after California actively litigated the earlier suit (which sought and failed to obtain a declaratory judgment that the contractor was not infringing BPMC’s patent), the state should be precluded from turning around to claim immunity when it gets sued over the same issue.

Moreover, as BPMC notes, the University of California (among other state agencies) routinely submits to federal court jurisdiction when it pursues claims for violations of its own patent rights. Given that California uses the patent system (and courts’ enforcement thereof), it has relinquished whatever sovereign immunity the state enjoys—immunity that is legally suspect in any event when the sovereign engages in commercial activities.

And, boy, does California use the patent system. The state universities alone own more than 3,300 patents that generate $210 million in annual revenue. California has filed 21 patent infringement suits since 1990 and won more than $900 million in judgments since 2000.

And yet the state has also wielded sovereign immunity arguments to get suits dismissed at least six times since 1987 (including suits by Genentech and Eli Lilly & Co.).

While the worst peddler of this double standard, California is by no means alone. At least 32 states have filed at least 173 patent suits since the mid-1990s.


Business groups hope that the Supreme Court will remove what they see as a competitive advantage enjoyed by state entities: Private patent holders can’t seek recompense for a state’s unlicensed use of software or medical devices, while states can turn to the courts to protect their patents. Medical innovators and technological entrepreneurs in the private sector suffer.

“It’s audacious for a state to use the federal courts to sue for patent infringement, but to block infringement suits against it as a sovereign that cannot be sued,” says Robin Conrad of the National Chamber Litigation Center in a press release. The center has filed an amicus brief on behalf of the U.S. Chamber of Commerce in the case—only the second time the Chamber has ever filed in a Supreme Court patent case.

This hypocrisy should not even be in play any more, not since Congress passed the Patent Remedy Act of 1992. That legislation was intended to “clarify that states .?.?. are subject to suit in federal court by any person for infringement of patents.”

That sounds clear enough. But in 1999 the Supreme Court ruled in a trademark case, College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board, that Congress’ legislative powers under Article I of the Constitution were insufficient to trump states’ sovereign immunity. Except in 2006 the Court held the opposite in a federal bankruptcy case, Central Virginia Community College v. Katz. The votes in these seemingly contradictory decisions were 5-4.

In fact, neither case should have been close: When a state repeatedly and voluntarily invokes federal court jurisdiction in a series of similar cases—under patent or any other law—it generally has waived immunity against suits brought by private parties under those same laws. And the precedent is well established that a state waives sovereign immunity when it seeks to adjudicate its rights in federal court. For example, the Supreme Court unanimously held in the 2002 case of Lapides v. Board of Regents of the University System of Georgia that a state loses its 11th Amendment immunity when it removes a case from state to federal court.


So, as the solicitor general’s office collects agency views and mulls the administration’s position, it should recognize that Biomedical Patent Management Corp.—an unwieldy name for an important case—not only represents the chance to right the balance between a state and its citizens with respect to intellectual property. It also provides the perfect opportunity for the Court to clarify its jurisprudence on the relationship between Congress’ Article I powers and states’ 11th Amendment immunity.

Sovereign immunity is properly a shield against lawsuits challenging a state’s governmental action, not a sword with which to carve out economic advantage over private competitors. If the Supreme Court declines to hear this case, thereby letting the Federal Circuit ruling stand, it would reinforce that unfair advantage—and strike a blow against private sector innovation.

Whoever it is that replaces the outgoing Paul Clement should not agonize over this one. The next solicitor general should advise the Supreme Court to grant this petition for review. And the justices should take his advice.

TAFAS v. DUDAS: PTO Asks CAFC To Allow Office to Implement Limits on Continuations and Claims

Tafas v. Dudas (on appeal at the CAFC)

After being rejected by the district court, the USPTO has appealed its case to the Federal Circuit. On appeal, the USPTO asks the appellate court to allow the patent agency to implement new rules that place limits on the number of claims filed with each patent application and the number of continuations that may stem from each patent application. [File Attachment: pto tafas brief (144 KB)]

The PTO asks the CAFC to review three specific issues:

  1. Whether the PTO's new limits on claims and continuations are within the scope of the Office's statutory rulemaking authority;
  2. Whether the new limits conflict with the Patent Act; and
  3. Whether the PTO must provide additional notice and comment for its rule changes.

The PTO summarizes its arguments as follows:

1. The Final Rules are within the scope of the USPTO's rulemaking authority under the Patent Act. The Act's primary grant of rulemaking authority, Section 2(b)(2), authorizes the Office to issue rules that "govern the conduct of proceedings in the Office," "facilitate and expedite the processing of patent applications," and "govern the recognition and conduct of agents, attorneys, or other persons representing applicants or other parties before the Office." The USPTO correctly determined that the Final Rules fit within these grants of rulemaking authority. By setting filing and documentation requirements, the rules regulate the conduct of proceedings in the Office and the conduct of attorneys and other representatives, and by discouraging unnecessarily repetitive filings and providing examiners with needed information, they facilitate and expedite the processing of patent applications.

In holding that the Final Rules are ultra vires, the court made no effort to measure the Final Rules against the actual terms of Section 2(b)(2), nor did the court give the USPTO's interpretation of that provision the deference required by Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), and its progeny. Instead, the court held that the Office is confined to issuing procedural rules and that the Final Rules are impermissibly substantive. But the cases on which the district court relied do not engraft a rigid procedural/substantive distinction onto Section 2(b)(2). And even if they did, the Final Rules would still pass muster, for they regulate the procedures used in proceedings before the Office rather than the substantive criteria for the awarding of patents. The district court's conclusion that the rules are substantive rather than procedural rests on APA cases that do not involve that distinction at all, and the court's standards for measuring the "substantiveness" of rules are at odds with the Supreme Court's jurisprudence under the Rules Enabling Act.

The court compounded these errors by erroneously holding that Section 2(b)(2)(B), which provides for the USPTO to issue rules "in accordance with" 5 U.S.C. § 553, requires the Office to engage in notice-and-comment rulemaking even when Section 553 expressly provides that notice and comment are not required.

2. In the course of its ultra vires analysis, the district court held that the Final Rules are inconsistent with other provisions of the Patent Act. That holding is likewise incorrect. The court mischaracterized the effects of the Final Rules, misconstrued the statutory provisions, misunderstood the judicial precedents concerning those provisions, and failed to give the USPTO's construction of the provisions the deference required by Chevron.

The district court held that Rules 78 and 114 conflict with Section 120 and 132(b), respectively, because the rules place "hard limits" on the number of continuation applications and RCEs that an applicant may file, while the statutory provisions entitle applicants to make an unlimited number of such filings. But the rules do not in fact limit the number of continuation applications and RCEs that may be filed; they simply require an applicant to show the need for further filings once a threshold number of filings has been made. And even if the rules did impose fixed limits, they would not conflict with Sections 120 and 132(b). Section 120 was enacted by Congress simply to provide a statutory basis for continuation practice, not to vest applicants with the right to file an endless stream of continuation applications.

Likewise, Section 132(b), which directs the Office to issue regulations providing for continued examinations, does not entitle applicants to file an endless series of RCEs. The district court held that Rules 75 conflicts with Section 112 ¶2 by limiting the number of claims that may be included in a single application. But Rule 75 places no limit whatsoever on the number of claims in an application, and Section 112 ¶ 2 does not address the permissibility of such a limit in any event. The court also held that Rule 75 and 265 conflict with the provisions of the Patent Act that assign the USPTO the burden of examination and the burden of establishing a prima facie case of unpatentability. But there is no conflict between those provisions and the rules, which merely require applicants to provide information about their claims and prior art so examiners can discharge their burdens more accurately and efficiently.

The Death of Google’s Patents?

By John F. Duffy* [File Attachment (42 KB)]

            The Patent and Trademark Office has now made clear that its newly developed position on patentable subject matter will invalidate many and perhaps most software patents, including pioneering patent claims to such innovators as Google, Inc.

            In a series of cases including In re Nuijten, In re Comiskey and In re Bilski, the Patent and Trademark Office has argued in favor of imposing new restrictions on the scope of patentable subject matter set forth by Congress in § 101 of the Patent Act.  In the most recent of these three—the currently pending en banc Bilski appeal—the Office takes the position that process inventions generally are unpatentable unless they “result in a physical transformation of an article” or are “tied to a particular machine.”[1] Perhaps, the agency has conceded, some “new, unforeseen technology” might warrant an “exception” to this formalistic test, but in the agency’s view, no such technology has yet emerged so there is no reason currently to use a more inclusive standard.[2]  

            The Bilski en banc hearing attracted enormous attention, and yet there has remained a sense among many patent practitioners that the PTO’s attempts to curtail section 101 would affect only a few atypical patent claims.  The vast bulk of patents on software, business and information technology are thought by some not to be threatened because those innovations are typically implemented on a machine—namely, a computer—and the tie to a machine would provide security against the agency’s contractions of § 101.  Even if that view were right, the contraction of patent eligibility would be very troubling because the patent system is supposed to be designed to encourage the atypical, the unusual and the innovative.  But that view is wrong.

            The logic of the PTO’s positions in Nuijten, Comiskey and Bilski has always threatened to destabilize whole fields of patenting, most especially in the field of software patents.  If the PTO’s test is followed, the crucial question for the vitality of patents on computer implemented inventions is whether a general purpose computer qualifies as a “particular” machine within the meaning of the agency’s test.  In two recent decisions announced after the oral arguments in the Bilski case, Ex parte Langemyr (May 28, 2008) and Ex parte Wasynczuk (June 2, 2008),[3] the PTO Board of Patent Appeals and Interferences has now supplied an answer to that question: A general purpose computer is not a particular machine, and thus innovative software processes are unpatentable if they are tied only to a general purpose computer.  


Patent Appeals: The Elements of Effective Advocacy in the Federal Circuit

PatentLawPic374Book: Patent Appeals: The Elements of Effective Advocacy in the Federal Circuit
Author: Mark Davies
Publisher: Oxford University Press

Cost: $85.00 from Amazon

Mark Davies recently authored the user manual for Federal Circuit appeals.  From its 300 spiral-bound pages, you can tell that the book is designed to serve the appellate attorney during the process of crafting a brief. Davies argued dozens of appeals as a DOJ appellate attorney and is now doing the same at O’Melveny in DC.

The book is very easy to read and understand, and it does an especially good job of providing concrete advice on how to draft an effective and clearly written brief while staying within the rules.

Davies adapts Strunk & White’s Elements of Style into a top five list that would benefit any writing: (1) Omit needless words; (2) Make the paragraph the unit of composition; (3) Use parallel and consistent writing form; (4) Use the active voice; and (5) Use definite, specific, concrete language.

His biggest general piece of advice is in all caps: DO NOT USE A DISTRICT COURT BRIEF AS A SHELL!

If you have an appeal pending, you better use the book.


Are these appeal timing estimates correct?


The PTO is asking whether these numbers are accurate under the newly finalized Appeal Brief rules. (This will impact whether the Whitehouse allows the new rules to be implemented). Comments are due by August 8, 2008, to Susan Fawcett (Susan.Fawcett@uspto.gov), who will in turn be required to provide them to OMB. 

The numbers above include “the time to gather the necessary information, prepare the briefs, petitions, and requrests, and submit them to the USPTO.”