Patent Law Blog (Patently-O)

Law Review 2008: Ideas for Student Notes.

• Impact of prior Arbitration Clauses (and other ADR agreements) for Section 337 (patent) investigations within the International Trade Commission (ITC).
• Federal Jurisdiction over Patent Malpractice Lawsuits (http://www.patentlyo.com/patent/2007/10/patent-malpract.html).
• First Amendment and National Security: How Export Administration Regulations Fit in the Borderless World of the Internet. (See its applications to patent law here: http://www.patentlyo.com/patent/2008/07/outsourcing-of.html).
• Copyright: Enforcement of Open Source Licenses: Jacobson (2008) (http://www.patentlyo.com/patent/2008/08/open-source-lic.html).
• Biotech Patent: Research Tools and the FDA Safe Harbor: (http://www.patentlyo.com/patent/2008/08/research-tool-1.html).
• A statistical analysis of patent term extensions granted by the PTO. (http://www.patentlyo.com/patent/2008/07/patently-o-bi-5.html).
• Eisai v. Dr. Reddy's Lab (The new law of obviousness applied to pharmaceutical cases). (http://www.patentlyo.com/patent/2008/07/obviousness-of.html).
• How Twombly is impacting patent cases. (Look at counterclaims…)
• A statistical analysis of the timing of CAFC decisions (Including a comparison of the various judges and a discussion of how the various circuits reign-in slow judges).
• The potential impact of eBay v. MercExchange on ITC Actions.
• Rationalizing the CAFC's Inequitable Conduct decisions of 2008 (compare Star Scientific and Eisai with Nilssen and Aventis).
• An analysis of the new PTO rules of ethics (http://www.patentlyo.com/patent/2008/08/pto-revises-rul.html).

Let me know if you use one of these. dcrouch@patentlyo.com.

Patently-O Bits and Bytes

• Duplicate fee forms no longer required at the PTO [LINK]
• As previously announced, PTO fees will be up 5% beginning October 2. Is it worth $50 to get you application in a few days early? [LINK]
• Admission to Practice before the PTO: Franklin Pierce professor Tom Field recently petitioned the USPTO to loosen its limits on eligibility to practice patent law before the PTO – especially with respect to folks with a background in computer science [LINK]. In addition to Professor Field's suggestions, I would add that the limitations on those who can practice design patent law are silly. At least any attorney who passes the registration exam should be allowed to practice design patent law.
• CLE Requirement: Rumors are that the PTO continues to move forward with a proposal mandatory continuing education for registered patent practitioners. I applaud the move – especially if regular reading of Patently-O can count toward the requirement…
• Foreign Outsourcing: The ABA says foreign outsourcing can be ethical. [LINK]. The new ethics opinion does not address commerce department concerns regarding export restrictions. [Link]

The Clarified Law of Inequitable Conduct

Although not new writing law, in Star Scientific, Chief Judge Michel does a nice job of clearly breaking down inequitable conduct analysis into simple two steps. The case clarifies that threshold levels of materiality and intent must each be proven by clear and convincing evidence.

Inequitable Conduct Two Step Analysis:

1. Whether the accused infringer proven threshold levels of (a) intent to deceive the PTO and (b) materiality, both with clear and convincing evidence. Although the intent element may be proven by circumstantial evidence. The clear and convincing standard requires that the evidence must be strong enough to point to "intent to deceive" as the "single most reasonable inference able to be drawn from the evidence."
2. If both elements are proven by clear and convincing evidence, the court should "look to the equities" to determine whether the evidence warrants a finding of inequitable conduct and thus unenforceability. It is only at this second stage when the court may balance the relative weight of proof. In particular, "[t]he more material the omission or the misrepresentation, the lower the level of intent required to establish inequitable conduct, and vice versa." (Quoting Critikon, 120 F.3d 1253 (Fed. Cir. 1997)(J. Rich)).

Still unclear is the meaning of "threshold." Presumably proving a "threshold level of intent" should be easier than simply proving "intent."

Documents:

• Read Star Scientific
• Read the Patently-O review of Star Scientific [Part I]

Important Inequitable Conduct Decision: Defendant Must Prove its Case

Star Scientific v. R.J. Reynolds Tobacco (Fed. Cir. 2008)

After a bench trial, the district court held that Star's tobacco curing patents were unenforceable due to inequitable conduct during prosecution and invalid as indefinite. This post will discuss the inequitable conduct issues.

The Star patents are directed at a method of making healthier tobacco (same nicotine, but fewer nitrites and other chemicals). Higher end organic or green tobacco is perhaps the only growth market in the lagging US market. The inequitable conduct issues in this case revolve primarily around a letter received by the prosecuting attorneys from a Star scientist indicating that Chinese tobacco already had lower levels of nitrites due to "their use of old [radiant heat] flue-curing techniques." Neither the letter nor a set of similar data were ever disclosed to the PTO.

An accused infringer can defang a patent by showing the patentee guilty of inequitable conduct during prosecution. To successfully prove inequitable conduct, the accused infringer must present "evidence that the applicant (1) made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information, and (2) intended to deceive the [PTO]." An issued patent is presumed valid and enforceable – thus, the "burden of proving inequitable conduct lies with the accused infringer. The patentee need not offer any good faith explanation unless the accused infringer first carried his burden to prove a threshold level of intent to deceive [and materiality] by clear and convincing evidence." Further, "[e]ven if a threshold level of both materiality and intent to deceive are proven by clear and convincing evidence, the court may still decline to render the patent unenforceable."

"The need to strictly enforce the burden of proof and elevated standard of proof in the inequitable conduct context is paramount because the penalty for inequitable conduct is so severe, the loss of the entire patent even where every claim clearly meets every requirement of patentability. . . . [C]ourts must ensure that an accused infringer asserting inequitable conduct has met his burden on materiality and deceptive intent with clear and convincing evidence before exercising its discretion on whether to render a patent unenforceable. . . . If a threshold level of intent to deceive or materiality is not established by clear and convincing evidence, the district court does not have any discretion to exercise and cannot hold the patent unenforceable regardless of the relative equities or how it might balance them.

Specific Intent: As the CAFC held the 1995 Molins case, the intent requirement is "specific intent to . . . mislead[] or deceiv[e] the PTO."

"Rather, to prevail on the defense, the accused infringer must prove by clear and convincing evidence that the material information was withheld with the specific intent to deceive the PTO."

When circumstantial evidence is used to prove intent, that evidence "must still be clear and convincing" and intent to deceive the PTO must be "the single most reasonable inference able to be drawn from the evidence." As a flat rule, information is not material if it is cumulative to that already disclosed.

In this case, prosecution was begun at the Sughrue Mion firm and then moved to the Banner Witcoff firm. RJR's theory of intent was that the firm switch was necessary to avoid disclosing the letter. Star's witness stated that the "reasons behind the replacement of the Sughrue firm were that a key partner passed away and that [the witness] observed a Sughrue attorney perform unsatisfactorily in an unrelated prosecution." The district court, however, rejected that testimony as unbelievable. On appeal, however, the CAFC reversed:

"[E]ven if Star's explanations are not to be believed, it remained RJR's burden to prove its allegation regarding the reason for the Sughrue firm's dismissal. RJR cannot carry its burden simply because Star failed to prove a credible alternative explanation."

Here, the court found that RJR had simply not proven its case:

"RJR failed to elicit any testimony or submit any other evidence indicating that Star knew what the Burton letter said prior to replacing the Sughrue firm, or that the letter was a reason for changing firms. RJR admitted at oral argument that it failed to even ask [Star's] executives about these critical facts, and RJR failed to identify any testimony or other evidence when specifically asked by us to do so in supplemental briefing. Further, a review of the record shows that Williams actually testified, in response to a different question, that he had never seen the Burton letter prior to his deposition in the present litigation. This statement was never impeached, questioned, or explored by RJR's counsel. RJR identified Perito, Star's chairman, as the officer who made the decision to terminate the Sughrue firm, but Perito was never asked whether he had knowledge of the Burton letter or whether it played any role in his decision to change firms.

In the end, the court concluded, that RJR had simply failed to provide sufficient facts to support an inference of intent to deceive. Reversed and Remanded.

Notes:

• The decision gave Star's stock (STSI) a nice bump:

Of course, there is no "legal" impact, but I query the importance of the fact that both prosecution firms (Sughrue Mion and Banner Witcoff) are well known and well respected in the legal communities.

Greg Aharonian Discussed the WSJ’s “Idiotic Article on Patent Tr-lls”

By Greg Aharonian [LINK]

The 11 August 2008 edition of the Wall Street Journal, page R6, has an idiotic article on patent licensing, starting with a review of the Microsoft v. Avistar squabbles. Microsoft earlier was in talks with Avistar to license its technology, but in the midst of discussions, filed reexam requests challenging 29 Avistar patents, causing Avistar a month later to fire 25% of its workforce (27 employees). Avistar is crying foul, while Microsoft is arguing it found legitimate prior art that the PTO must use to reassess the validity of the patents.

I looked at a few of Avistar's patents (7412482, 7398296, 7152093 – some of the earlier patents are assigned to Collaboration Properties or Vicor Incorporated). On the side of Avistar, many of their patents cite an excellent amount of patent and non-patent prior art. On the side of Microsoft, the patents are in the crowded area of network communications, so a priori I would not be surprised if a company like Microsoft that can afford to spend tons of money for prior art searching has found additional prior art to use in the reexam requests. Unless the prior art they cited is bogus in order to cause delays to squeeze Avistar, I would say that Microsoft's countermove is a legitimate tactic.

In short, this is a case that has little to do with tr-lls, but rather is a case that should be the basis for an article on the tactics of prior art searching (how much should small companies spend on searching during patent prosecution versus how much should they spend before entering into negotiations or litigation?). Indeed, if anyone has seen any of the Microsoft reexam requests, I'd be interested in knowing the quality of the new prior art that they found. But the article uses this squabble as an intro into the ill-defined, made up problem or tr-lls (tr-lls being the restless-leg-sydrome of the IP world). The author of the article, not wanting to do much thinking, sets the stage of the article as follows:

At the epicenter of the struggle are so-called 'patent tr-lls', a derogatory term for small firms whose only business is to buy patents and assert them in court in hope of obtaining large settlements or damages.

This is a sentence of economic nonsense. First, is 'tr-ll' really a derogatory term if tr-lls are using the same tactics as the infamous non-tr-ll tr-ll, IBM? If, when IBM was doing this, it didn't earn the label of derogatory, it shouldn't be applied now except as a compliment.

Worse, this paragraph completely betrays free markets (something the Journal is glad to do when it is in the interests of its big company buddies), because it forgets the fact that a patent is an asset created by the government in exchange for an inventor's public disclosure of a new and useful invention. When the asset is so created, there is absolutely nothing freakin wrong with people doing with patents what they do with all other financial assets - buying, selling and exploiting them. To attack this practice is to attack free market economics. If an inventor doesn't have enough money to fully enforce his or her patent, it is pure free market economics for that inventor to sell the patent (for a fixed sum and/or royalty) to another economic player who can fully enforce the patent. To complain about this is to attack free markets (something too prevalent in big increasingly-uninnovative companies).

Speaking of which, the article quotes head abuse-patent-reform leader Mark Chandler of Cisco (who I would be glad to debate this issue with, while I am totally drunk, and still win):

Mark Chandler, general counsel of Cisco Systems, says companies that don't produce anything can buy low-cost patents, hire contigency fee lawyers and file lawsuits seeking massive damages for patents that contribute negligible value to a product. Proposed patent reform that links damages to the economic value of the patent would help solve the problem, he says.

Again, Chandler is attacking free-market economics, in that there is absolutely nothing wrong with companies raising funds to help enforce patents where the original inventor does not have the financial resources to do so. And I don't think that is what Mark is whining about.

Rather what I think he is whining about is that a) companies like Cisco refuse to spend much time and money monitoring issued patents in their field to anticipate such problems (something the bio-pharma-chem companies, acting like grownups, routinely spend lots of money doing so), and b) companies like Cisco (and most of Silicon Valley) refuse to pool their monies and talents to build prior art resources and tools to help kill much of the crap being issued by the PTO that is used to harass children such as Cisco. I have asked around for 15 years in Silicon Valley for funding to build two prior art collections, one to remain in the Valley for everyone's use, and the second to be donated to the PTO for examiner's use. No interest whatsoever, and not just no interest in not funding me (hey, I know I am a jerk), but they don't want to fund anyone to effectively solve the prior art problem. Because the large companies like Cisco (lead by .... IBM) want to continue to get their crappy patents (which would be threatened by any serious prior art effort - that patent peer review project being a logistic scam at IBM's behest to prevent serious treament) while whining about smaller companies' crap.

So anyone use the full word 'tr-ll' with the 'o' in the patent world is either an idiot or a liar. Or both. No crappy patents should be asserted in courts for only one reason - that such crappy patents don't issue in the first place. But will companies' like Cisco use their clout to get Congress to investigate incompetent and corrupt PTO management? NO. Until they do, they should stop whining. If someone gives me his address, I will send Mark a pink blankee he can wipe his tears with.

Notes:

• Comment by Stephen Kinsella

Patent Law Bits and Bytes No 61

• Three Bits from the files of Hal Wegner:
  • BPAI Evidence: In a recent petition in Reexamination No. 90/006,707 (2008 Westlaw 2938366), the Commissioner of Patents barred an applicant from submitting a reply brief that contained new evidence. The proffered evidence was a citation to a dictionary definition. This should serve as a reminder to applicants that the evidence for a BPAI appeal should be laid prior to the appeal.
  • Classen v. Biogen: This case has been waiting an appellate decision since oral arguments one year ago. At least one patent is challenged under 35 U.S.C. 101 as it arguably covers the process of "thinking about" an immunization schedule and then immunizing.
  • Great upcoming conference in London, November 11: http://www.ucl.ac.uk/laws/ibil/index.shtml?events.

Albritton v. Patent Troll Tracker: Patently-O’s Subpoena

I have now received a nonparty subpoena in Eric Albritton's defamation case against Cisco and the Patent Troll Tracker. The requests are quite broad. Blog commentators may want to check Request Number 2 that could require disclosure of their information. 

2. All DOCUMENTS REFERRING or RELATING to comments, emails, COMMUNICATIONS or responses to THE BLOGS regarding (1) the integrity, reputation or ability of ERIC M. ALBRITTON; (2) the filing of Civil Action No. 5:07-CV-00156, styled ESN, LLC v. Cisco Systems, Inc., in the United States District Court for the Eastern District of Texas; or (3) the October 16-17, 2007 postings on www.trolltracker.blogspot.com. [File Attachment: albrittonsubpoena.pdf (109 KB)]

In part, this request is seeking information about the identity of anonymous blog commentators and those who have sent me private emails regarding this case. As I have mentioned previously, my blogging service retains additional information regarding the identity of commentators (such as IP address, etc.), and a full response to the subpoena request could include that information. In a letter to Albritton's attorney, I objected to the subpoena requests for several reasons including the following specific objection to Request Number 2:

Request Number 2 asks about comments on THE BLOGS. Comments are posted on Patently-O and are publicly available at no charge to you. Because these comments are already available online, this request is likewise unduly burdensome and overbroad. Furthermore, most commentators post anonymously with a strong expectation of privacy in their identity. Similarly, I often receive communications sent under the condition and/or expectation of privacy and anonymity. This happens with any reporter – but is especially common in law and politics where we often find negative retribution for speaking out. I strongly support this right of anonymity and do not plan to reveal particular information that could lead to the identity of those sources without a specific court order on the topic. As the Supreme Court recently held, "Anonymity is a shield from the tyranny of the majority. . . . It thus exemplifies the purpose behind the Bill of Rights, and of the First Amendment in particular: to protect unpopular individuals from retaliation . . . at the hand of an intolerant society." McIntyre v. Ohio Elections Comm'n, 514 U.S. 334, 357 (1995). Eighth Circuit law supports this ideal – especially as regard to reporters and their sources. In Continental Cablevision, Inc. v. Storer Broadcasting Co., 583 F. Supp. 427, 435 (E.D. Mo. 1984), for instance, the district court held that "news reporters enjoy a qualified privilege, derived from the first amendment guarantee of a free press, to withhold from discovery in a civil case confidential or non-confidential sources, materials, or other information where such discovery would impinge on the ability of the media to gather and disseminate news. Said privilege may be defeated in a particular case where the party seeking discovery can demonstrate that the testimony, material or information sought is relevant enough, and otherwise unavailable, to outweigh the first amendment interest of the media. A balancing analysis is the benchmark." You have provided no such balancing.

Time will tell whether a motion to quash will be necessary.

Public & Experimental Use: Reduction to Practice Requires Knowledge that Invention Works for Intended Purpose

In re Omeprazole Patent Litigation (Fed. Cir. 2008)

The CAFC has affirmed a lower court trial finding that AstraZeneca's Prilosec (omeprazole with an enteric coating and a subcoating) patents are infringed by the ANDA filings of Apotex, Torpharm, and Impax. (See U.S. Patent Nos. 4,786,505 and 4,853,230). This complex consolidated case has been handled by Judge Jones of the Southern District of New York. The case includes several important procedural issues, but here I focus on public use.

Public Use of a Pharmaceutical Formulation: Under 35 U.S.C. § 102(b), a patent will be considered invalid if the invention was "in public use" more than one year before the filing date. (i.e., before the "critical date"). The use in question was Astra's large clinical trials used to test its omeprazole formulation. The district court ruled for Astra on two separate grounds: First that the clinical trials were an "experimental use" and therefore cannot qualify as public uses and second that the formulation was not yet ready for patenting until after the trials were completed.

Experimental Use and Reduction to Practice: In a series of cases over the past decade, the Federal Circuit has made clear that the experimental use defense "cannot negate a public use" that occurs after the invention is reduced to practice. At the same time, public use now requires proof that an invention is "ready for patenting" which generally requires reduction to practice (or at least being enabled to practice). For the most part, this rather new interpretation of public use subsumes the experimental use defense.

Here, the pills had been manufactured and were being used by clinical subjects. However, there were not "reduced to practice" because RTP requires knowledge "that the invention would work for its intended purpose." On appeal, the Federal Circuit refused to overturn the lower court's factual findings – instead agreeing the formulation was not reduced to practice because the company lacked experience of how it would perform clinically:

[Astra's expert witness] testified that as of May 1983 the Astra scientists did not have enough information to satisfy themselves that the Phase III formulation would work for its intended purpose. Instead, he testified that the Astra scientists thought the Phase III formulation "had a good possibility to be used as a marketing drug" but that the team did not have long-term stability data and had "no experience of how it performed in clinical studies."

….

The Astra scientists had long understood that omeprazole could provide a safe and effective treatment for certain gastrointestinal diseases. The challenge they faced was developing a formulation to deliver omeprazole to the small intestine, a challenge that was made difficult by omeprazole's sensitivity to acidic environments, such as the stomach. Impax has not demonstrated that, without conducting the Phase III clinical tests, the inventors knew that the Phase III formulation would achieve the goals of long-term stability and in vivo stability such that it would be effective as a treatment for gastrointestinal disease.

Because the efficacy of the formulation was not reduced to practice, its use could not be a public use.

Notes:

• Of interest here is the idea that reduction to practice requires knowledge that the invention will work for its "intended purposes." The specification of these patents detail the need for stability, so that purpose is clear. Because "purposes of the invention" have been used to limit claim scope, many modern patent applications don't include such information. In those cases, will the purpose be found in extrinsic evidence?
• The court here focused on reduction to practice to fulfill the "ready for patenting" prong of the public use analysis. Seemingly, the defendants may have had a better shot trying to show ready for patenting based on evidence that "prior to the critical date the inventor had prepared drawings or other descriptions of the invention that were sufficiently specific to enable a person skilled in the art to practice the invention."

The Surprising Efficacy of Inter Partes Reexaminations

An Analysis of the Factors Responsible For Its 73% Patent Kill Rate And How To Properly Defend Against It

     By Andrew S. Baluch and Stephen B. Maebius, Foley & Lardner LLP[i]

INTRODUCTION

In creating inter partes reexamination, Congress hoped to provide a faster, cheaper alternative for resolving questions of patent validity in the U.S. Patent & Trademark Office (USPTO) rather than in the courts.  As a measure of the procedure’s growing popularity and availability, the rate of requests for inter partes reexamination has steadily increased each year, totaling over 308 since the procedure was created in November 1999.[ii]  But, while the pace of reexam requests continues to increase, the end results of completed proceedings have received relatively little attention.

Here, we report the outcomes of all inter partes reexaminations completed as of August 2008.  Surprisingly, the proceedings displayed a high 73% “kill” rate (complete elimination of all claims targeted by the requesters) — a rate which is far above that in litigation (33%)[iii] and ex parte reexamination (12%)[iv]. 

Is the high kill rate explained by the fact that especially weak patents were targeted?  Did the patent owners simply give up because the patents were commercially unimportant?  Or is inter partes reexamination truly the best procedure for a party to use in the U.S. to invalidate a patent? 

For both requesters and patent owners, the present study highlights the factors and strategies favoring success in inter partes reexaminations.  Although the reported statistics appear to favor requesters, a patent owner has unique procedural tools at its disposal both in the courts and at the USPTO.

KEY FINDINGS

·         Requester’s Success Rate:  Third-party requesters succeeded in having all claims cancelled or disclaimed in 73% (22) of the first 30 completed inter partes proceedings in which a certificate issued.  These early certificates are likely skewed in favor of quick dispositions in which the patent owner simply failed to respond to a first Office action, which occurred in 43% (13) of the proceedings.  However, when the patent owner did respond to the first Office action, the requester’s success rate fell to 53% (9 out of 17).  In any event, the requester’s likelihood of a complete victory in inter partes reexams is substantially greater than that in ex parte cases during the same period: only 12% of all ex parte reexams since January 2000 resulted in all claims being cancelled.[v]

·         Pendency:  The inter partes proceedings had an average pendency (measured from request date to certificate issue date) of 33.3 months.  Like the requester’s success rate, the overall pendency is skewed by the numerous early cases in which the patent owner simply failed to defend its patent.  Eliminating these uncontested cases dramatically increases the average pendency up to 42.5 months.

·         Grounds of Rejection:  In a first Office action, obviousness was the sole ground of rejection in only 20% (6) of the proceedings, whereas anticipation was a ground of rejection in 73% (22) of the proceedings.  Nevertheless, obviousness-only rejections did not improve the patent owner’s chances of success: 83% (5 out of 6 obviousness-only cases) resulted in all claims being cancelled or disclaimed.

·         No Board Decisions:  None of the first 30 inter partes reexamination certificates was the product of a Board decision.  Only one party, a patent owner, filed a notice of appeal, but then dropped the appeal by declining to file an appeal brief.  In all cases where examiners found claims to be patentable, the third-party requesters did not bother to appeal the finding.

·         Litigation:  Five (17%) of the 30 inter partes reexaminations involved concurrent litigation between the patent owner and third-party requester.  The causes of action were split:  2 declaratory judgment (DJ) actions brought by the third-party requester, and 3 infringement suits brought by the patent owner.  The only still-pending cases involve reexaminations favoring the plaintiff:  one DJ action in which all reexamined claims were cancelled, and one infringement suit in which all reexamined claims were confirmed.

[READ THE FULL REPORT]

---

[i]  The authors are patent attorneys at Foley & Lardner LLP and further acknowledge their past and current involvement in both ex parte and inter partes reexaminations.  The views expressed herein are solely those of the authors and should not be attributed to their firm or any of its clients.  Comments may be directed to smaebius@foley.com.

[ii] USPTO Inter Partes Reexamination Filing Data (Sept. 30, 2007).

[iii] See Kimberly A. Moore, Judges, Juries, and Patent Cases – An Empirical Peek Inside the Black Box, 99 Mich. L. Rev. 365 (2000) (between 1983 and 1999, validity was upheld in 67% of cases — 64% of bench trials; 71% of jury trials).

[iv] See Dennis Crouch, Ex Parte Reexamination Statistics II, Patently-O, available at http://www.patentlyo.com/patent/2008/06/ex-parte-reexam.html (posted Jun. 25, 2008) (between January 2000 and June 2008, all claims were cancelled in 12% of proceedings).

[v] See Crouch, supra.  See also USPTO Ex Parte Reexamination Filing Data (Dec. 31, 2007) (reporting 12% cancellation rate for all ex parte reexams initiated by third-party requester).

Cooper Techs: PTO’s Interpretation of “Original Application” Given Chevron Deference

Cooper Techs. v. Dudas (Fed. Cir. 2008)

Inter partes reexamination is relatively new. The 1999 AIPA provides that it is available for "any patent that issues from an original application filed in the United States on or after" November 29, 1999. Cooper's original patent application was filed prior to the 1999 deadline, but a continuation application was filed after the deadline. The debate here was whether the continuing application should be considered an "original application" under the statute. The PTO argued that the continuation should be considered an original application and that its interpretation should be given a high level of deference.

On appeal, the CAFC affirmed. In doing so, the court first found that PTO's interpretation of "original application" is was a procedural determination leading the court to grant Chevron-level deference to the PTO's interpretation.

We have also previously held that 35 U.S.C. § 2(b)(2) does not authorize the Patent Office to issue "substantive" rules. See Merck & Co. v. Kessler, 80 F.3d 1543 (Fed. Cir. 1996). "A rule is 'substantive' when it 'effects a change in existing law or policy' which 'affect[s] individual rights and obligations.'" … In this case, the Patent Office's interpretation of "original application" does not effect any change in existing law or policy; rather, it is a prospective clarification of ambiguous statutory language regarding a matter of procedure. It is therefore "interpretive"--rather than "substantive"--under the definitions put forward in Animal Legal Defense Fund. We conclude that the Patent Office had the authority under 35 U.S.C. § 2 to interpret section 4608, because that interpretation both governs the conduct of proceedings in the Patent Office, not matters of substantive patent law, and is a prospective clarification of ambiguous statutory language.

….

Because the Patent Office is specifically charged with administering statutory provisions relating to "the conduct of proceedings in the Office," 35 U.S.C. § 2(a)(2)(A), we give Chevron deference to its interpretations of those provisions. See Lacavera ("Because the PTO is specifically charged with administering this statute, we analyze a challenge to the statutory authority of its regulations under the Chevron framework."); see also Bender v. Dudas, 490 F.3d 1361 (Fed. Cir. 2007) (applying Chevron framework to Patent Office regulations for the conduct of proceedings in the Patent Office); Ethicon, Inc. v. Quigg, 849 F.2d 1422 (Fed. Cir. 1988) (same).

Under the familiar two-step Chevron analysis, "[w]e always first determine 'whether Congress has directly spoken to the precise question at issue.'" Hawkins v. United States, 469 F.3d 993, 1000 (Fed. Cir. 2006) (quoting Chevron, 467 U.S. at 842). "We do so by employing the traditional tools of statutory construction; we examine the statute's text, structure, and legislative history, and apply the relevant canons of interpretation." Delverde, SrL v. United States, 202 F.3d 1360, 1363 (Fed. Cir. 2000). "If we find 'that Congress had an intention on the precise question at issue, that intention is the law and must be given effect . . . .'" Hawkins, 469 F.3d at 1000 (quoting Chevron, 467 U.S. at 843 n.9.) If we conclude that "Congress either had no intent on the matter, or that Congress's purpose and intent is unclear," Delverde, 202 F.3d at 1363, then we proceed to step two, in which we ask "whether the agency's interpretation is based on a permissible construction of the statutory language at issue," Hawkins, 469 F.3d at 1000.

….

We conclude that the Patent Office's interpretation of section 4608 is permissible and therefore entitled to deference.

This is a relatively minor case, and the true issue is whether it provides any indication of how the court will proceed in Tafas v. Dudas.

Patently-O Bits and Bytes No. 60: Nintendo Wii, etc.

The PatentBuddy website has mined your registration data from the USPTO and created some interesting results. They have found that folks are leaving large law firms more quickly than before. [LINK]. Speaking of jobs: Ten new job listings in the past ten days on the Patently-O Job Board.

• Senior Patent Counsel - Large Corporation - San Francisco, Calif.
• Patent Agent/Clerk/Specialist - Law Firm - Washington D.C.
• Patent Associate - Law Firm - Washington D.C.
• Patent Agent - Law Firm - Alexandria, Va.
• Associate Director, Assistant General Counsel-Patents - Large Corporation - Chicago, Ill.
• IP Technical Specialist - Small Corporation - Ithaca, N.Y.
• Patent Attorney/Agent - Law Firm - Research Triangle, N.C.
• Patent Associate - Law Firm - Washington D.C.
• Patent Prosecution Associate - Law Firm - Washington D.C.
• Intellectual Property Specialist - Hong Kong Polytechnic University - Hong Kong

Public Interest in Patent Law Declining: The graph below shows the relative frequency of Google searches for Patent Law.

Nintendo Wii: I was planning to buy the Wii as soon as it reaches Columbia Missouri . . . Now the company Hillcrest Labs has filed both an ITC complaint and a federal patent case requesting that the commission institute a Section 337 investigation of the Wii and its "three-dimensional pointing devices." The complaints allege infringement of four Hillcrest patents: U.S. Patent Nos. 7,139,983, 7,158,118, 7,262,760, and 7,414,611. The patents include several broad claims directed toward pointing devices that use internal accelerometers to track movements (and the lack of movement) and have a priority date of sometime in 2004. The '611 patent issued on August 19, 2008 and the claims appear directed at capturing the Wii.

Damages Tally Begin as Soon as Defendant is Given Notice of Infringement

DSW Shoe Warehouse v. Shoe Pavilion (Fed. Cir. 2008)

DSW holds a utility patent and a design patent on a shoe display system. In 2006, DSW notified off-brand competitor Shoe Pavilion that its displays were infringing. Wanting to avoid trouble, Shoe Pavilion took immediate action and removed the infringing displays. (Although immediately begun, the whole take-down process took seven months.) DSW was not satisfied that the replacement design avoided infringement and subsequently sued.

Damages and Notice: The case raises several issues, but here I will focus on damages. On summary judgment, the district court held that Shoe Pavilion owed no damages for infringement by the initial design because the defendant took immediate action to stop infringing. On appeal, the CAFC vacated that opinion.

The Patent Marking Statute limits damages that may be recovered by a patentee.

In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. 35 U.S.C. §287(a).

The Pre-1952 Patent Statute included a similar restriction on damages. That statute was interpreted by the Supreme Court in Wine Railway (1936). There, the court held that the recovery by patentee who failed to mark products covered by the patent would be limited to damages incurred after actual notice was provided to the infringer.

The policy behind this approach is to give some level of protection to innocent infringers. However, damages begin to accrue as soon as notice is given. Thus, in this case, Shoe Pavilion is liable for the damages that occurred during the seven-month take down process.

"Without a doubt, the law offers an infringer no exception to liability for the time it takes to terminate infringing activities, no matter how expeditious and reasonable its efforts."

Vacated and remanded.

Notes:

• The court also vacated based on an error of claim construction – finding that the claimed "track and roller" was not limited by the preferred embodiment found in the specification.

Marking of Prescription Drug Does Not Create DJ Jurisdiction for Generic Competitor

Prasco LLC v Medicis Pharmaceutical Corp. and Imaginative Research (Fed. Cir. 2008)

Imaginative Research owns of several patents covering a prescription strength benzoyl peroxide wash. Medicis is the exclusive licensee and sells the product under the brand name TRIAZ.  The patents are listed on the box.

Prasco makes a generic version (OSCION) and allegedly competes directly with TRIAZ.

Wanting to avoid the cloud of potential infringement, Prasco filed a declaratory judgment lawsuit against the patentee and licensee alleging non-infringement of the listed patents. The case was dismissed for lack of declaratory judgment jurisdiction, Prasco appealed.

Prasco admits that the DJ defendants did not know about the generic competition until it received the complaint. However, Prasco argued that Article III jurisdiction exists because the defendants (1) listed its patents on a directly competitive product and (2) Medicis had previously sued Prasco (for infringement of a different patent by a different product).  The defendants also refused to sign a covenant not to sue.

Cases or Controversies: Article III of the Constitution limits the reach of federal judicial power to the adjudication of “cases” or “controversies.”  This requirement has been interpreted to encompass only disputes that are “definite and concrete, touching the legal relations of parties having adverse legal interests," "real and substantial," and "admi[t] of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts."

In MedImmune, the Supreme Court rejected the CAFC’s original test for DJ Jurisdiction that required a “reasonable apprehension” of immanent litigation and replaced it with an amorphous requirement of a “substantial controversy . . . of sufficient immediacy.”

On appeal, the CAFC affirmed that Prasco’s controversy is not sufficient to be justiciable.

Although MedImmune clarified that an injury-in-fact sufficient to create an actual controversy can exist even when there is no apprehension of suit, it did not change the bedrock rule that a case or controversy must be based on a real and immediate injury or threat of future injury that is caused by the defendants—an objective standard that cannot be met by a purely subjective or speculative fear of future harm.

The court further held that DJ jurisdiction does not exist “without some affirmative act by the patentee.”

Regarding marking, the court found that the marking of “products with the applicable patents provides little, if any evidence that [the patentee] will ever enforce its patents.”

Patently-O Bits and Bytes No. 59

• The Patent Hawk Strikes: Gary Odom enjoyed inventing and patenting so much that he became a patent searcher. He also writes the Patent Hawk blog from his Oregon roost. He has now sued Microsoft in the Eastern District of Texas for infringing his Patent covering toolbar groupings (Patent No. 7,363,592). If you are using Office 2007, you might check to see whether your Microsoft click-through license includes indemnification.
• Law students ask me about law firm titles, so I created the following "Glossary of Patent Law Firm Professionals"
  • Associate: A lawyer who is not yet a partner, but is on that track.
  • Partner: Could be either equity partner or non-equity partner.
  • Equity Partner: An owner of the firm. Firms may have complex ownership structures and various levels of equity.
  • Non-Equity Partner: A senior associate with a fancy title. Many firms do not tell its clients which partners are equity vs non-equity.
  • Of Counsel: Catch-all used when an attorney wants to work a reduced load or not be fully engaged with the firm. Also, many firms hire lateral would-be partners as of counsel until the firm decides to make a partnership offer.
  • Special Counsel: Same as of counsel.
  • Senior Counsel: Same as of counsel, but indicates a senior level attorney
  • Technical Advisor: non-lawyer, often a patent agent. Some firms separate patent agents from technical advisors based on PTO registration.
  • Law Clerk: non-lawyer, typically also a law student.
  • Docketing clerk: Typically a paralegal. The most important job in a patent prosecution firm.
  • Patent Paralegals and Secretaries: The most difficult positions to fill with qualified individuals willing to work with patent attorneys.
  • Contract Attorney: The person who is treated the worst but is paid fairly well. Spends the day doing document review and checking facebook.
• Quote of the week: "Next time wear a tie. This is the Federal Circuit." CAFC Judge to appellate counsel.
• Inventor Gil Hyatt gets $388 million more – this time from the California Franchise Tax Board. The lawsuit by Hyatt was filed in 1998 after California assessed Hyatt with millions of dollars of income tax while Hyatt claimed he did not live in the state. In the case, the Supreme Court had rejected California's immunity argument – finding that a Nevada court was not required to give full faith and credit to California's self-immunity statute. [Link] Gilbert Hyatt is known for receiving a broad patent on the microcontroller. Before the patent was invalidated, Hyatt received $70 million+ in royalties.

   

CAFC Finally Affirms a Finding of Infringement by Equivalents

Dr. Voda v. Cordis Corp. (Fed. Cir. 2008)

Dr. Voda’s case is an exciting tale of an individual inventor litigating against a major corporation in the red sandy soil of western Oklahoma. 

A jury found that Cordis catheters infringed Voda’s patents and adjudged a reasonable royalty to be 7.5% of gross sales. The jury also found the infringement willful and the patents not invalid.  The district court then affirmed the jury verdict but denied Voda’s request for injunctive relief.

Claim Construction: Voda’s claim included the requirement that the catheter be engaged “along a line” of the aorta. The district court, however, found that the claim is not limited to linear portions of the aorta. On appeal, the CAFC confirmed the construction — reminding us that “the context in which a term is used in the asserted claim can be highly instructive.” Phillips. When engaged, it is clear that the catheter may curve along the aorta.

The specification does indicate that the “present invention [includes a] straight portion.” However, the CAFC refused to see that statement as a “clear disavowal of claim scope” because the specification discusses other instances where the same portion could be curved.

Doctrine of Equivalents: Cordis had redesigned some of its products to avoid literal infringement. However, these were found to infringe under the Doctrine of Equivalents. In particular, a “second straight portion” claim element was not literally found in the Cordis products, but the jury found that the products did include an equivalent element.

At the court’s option, either of two tests of equivalent may be used:

Under the insubstantial differences test, “[a]n element in the accused device is equivalent to a claim limitation if the only differences between the two are insubstantial.” Honeywell Int’l Inc. v. Hamilton Sundstrand Corp., 370 F.3d 1131, 1139 (Fed. Cir 2004). Alternatively, under the function-way-result test, an element in the accused device is equivalent to a claim limitation if it “performs substantially the same function in substantially the same way to obtain substantially the same result.” Schoell v. Regal Marine Indus., Inc., 247 F.3d 1202, 1209-10 (Fed. Cir. 2001).

The CAFC looked to Voda’s experts to find evidence of insubstantial difference. In particular, Voda’s expert testified that the Cordis “curve portion” was essentially straight and that “cardiologists would have difficulty distinguishing the two during use.”  In addition, Voda introduced evidence that the Cordis curve portion “performed the same function as a straight portion, in the same way, to achieve the same result. . . . Accordingly, we affirm the jury’s findings of infringement with respect to these claims.”

Notes:

• EBay: Voda argued for an injunction based on the irreparable harm to its exclusive licensee. The CAFC rejected that justification — finding that the irreparably harmed must be the party seeking the injunction.
• Seagate: The CAFC vacated the willfulness finding that was based on pre-Seagate law.
• Festo: The CAFC did find that some of Voda’s claims were not infringed under the DOA. Those claims had been narrowed during prosecution and were subject to prosecution history estoppel.
• Prior Appeal: In the 2007 appeal in this case, the CAFC held that Voda could not assert its foreign patents covering the same product in US courts. [LINK]
• See Lemley & Allison: THE (UNNOTICED) DEMISE OF THE DOCTRINE OF EQUIVALENTS

 

Reissue Claim is Improperly Broadened if “Broader in Any Respect.”

Brady Construction Innovations v. Perfect Wall (Fed. Cir. 2008) (Non Precedential).

This case is simple. Brady filed for a reissue more than two years after the patent issued. The reissue broadened the claims. Those claims are therefore invalid.

Brady's original patent issued July of 1992. After losing an infringement action in 2003, Brady filed for a reissue patent. The reissue patent issued as RE39,462 in 2007 and Brady again filed suit. The patentee's press release at the time tells the story:

"Previously, the Court of Appeals had limited the original slotted track patent in a way that Brady never intended. This new patent removes the limitation recently imposed by the Court of Appeals. From this date forward, anyone who manufactures and sells [any style of] slotted track will infringe Brady's new patent regardless of how the slotted track is installed."

35 U.S.C. 251 spells out the guidelines for reissue patent applications. Generally, a reissue is available to correct an error made by the patentee. Although the statute specifically allows a reissue to correct an error in "claiming more or less than he had a right to claim in the patent," the statute also places a strict two-year time limit on enlarging the scope of any claims.

"No reissued patent shall be granted enlarging the scope of the claims of the original patent unless applied for within two years from the grant of the original patent."

Any enlargement in scope of any claim element will generally run afoul of the limitation. In particular, the CAFC has repeatedly held that a claim will be considered to be enlarged under Section 251 if "it contains within its scope any conceivable apparatus or process which would not have infringed the original patent. A reissue claim that is broader in any respect is considered to be broader than the original claims even though it may be narrower in other respects."

Here, based on the construction of the original patent by the CAFC, it was clear that the new claim had been broadened – rendering it invalid.

Patently-O Bits and Bytes No. 57

• New PTO Fees: Up 5% to account for inflation. [LINK]
• Patently-O Job site has a new media partner: the Inhouse Blog. The Inhouse blog has its own job board with inhouse jobs.
• Duffy Provision: Duffy expressed his "skeptic[ism] about the constitutionality of the retroactivity provision." [LINK]
• Speedo's torso-swimsuit patent is still pending. See http://www.pat2pdf.org/patents/pat20080141431.pdf.

Book Docket: Looking for Law School Book Lists

I am looking for the booklists for a couple of law schools for Fall 2008: Northwestern University Law School and Stanford Law School. I'll pay $30 for each list of books for this upcoming term in the following format:

Course Title

Professor

Book Title

ISBN

Whether Required or Optional

 

Thanks, Dennis Crouch (dcrouch@patentlyo.com)

Note: I'll only pay for the first complete list from each school.

Todd Dickinson To Take AIPLA Helm

The AIPLA recently announced that Q. Todd Dickinson will become the new Executive Director of the organization. Dickinson is widely considered the most popular PTO director in recent history. Dickinson is also an Obama supporter and would be a likely return-appointee as PTO director if the democratic contender is elected. After leaving the PTO, Dickinson took the job of chief IP counsel for GE after working as a partner at Howry LLP. Dickinson is also known for his ability to bring parties together for compromise solutions – that may bode well for patent reform issues that have begun to divide both the AIPLA and the IPO. Michael Kirk, who has successfully led the AIPLA for more than a decade, is retiring.

Albritton v. Patent Troll Tracker

Thomas Claburn in InformationWeek recently published an article about the defamation cases by Eastern District of Texas attorney Eric Albritton against Rick Frenkel in his role as the Patent Troll Tracker, Cisco, and others. [Patently-O Discussion of the Case]. According to the article, Albritton has now subpoenaed Google – requesting its help uncovering facts.

The subpoena demands, inter alia, that Google turn over 'all documents referring or relating to communications to or from (1) Richard Frenkel a/k/a/ "The TrollTraker," (2) Dennis Crouch, individually and sub.nom. "Patently O," … (7) the blogs [defined as Patently-O and PatentTrollTracker blogs]" regarding Albritton, the filing of the ESN lawsuit, or related TrollTracker postings.' The subpoena also requests related Google search records ("all documents referring or relating to user searches of the internet and/or the blogs regarding (1) Eric M. Albritton…") and other records ("all documents referring or relating to the establishment, creation, maintenance, and financial support for the blogs").

PTO Revises Rules of Ethics and Professionalism

The USPTO has published its final rules implementing changes to its rules of discipline and professionalism that governing patent attorneys, patent agents and trademark attorneys.

Limits on Patent Agents: The most notable portion of the rules may be Section 11.5(b)(1), which defines exactly what PTO registration authorizes. This includes: "preparing and prosecuting any patent application, consulting with or giving advice to a client in contemplation of filing a patent application or other document with the Office, drafting the specification or claims of a patent application; drafting an amendment or reply to a communication from the Office that may require written argument to establish the patentability of a claimed invention; and drafting a communication for a public use, interference, reexamination proceeding, petition, appeal to the Board of Patent Appeals and Interferences, or other proceeding." This also includes drafting patent assignments "if the practitioner is filing or prosecuting the patent application, and assignment does no more than replicate the terms of a previously existing oral or written obligation of assignment from one person or party to another person or party."

In a comment, the PTO makes clear that PTO registration does not authorize offering an "opinion of validity of another party's patent when the client is contemplating litigation and not seeking reexamination" because such activity "could not be reasonably necessary and incident to the preparation and prosecution" of a client's patent. Further, the PTO sees "no circumstance [where] practice before the Office [would] include the rendering of opinions on infringement."

Of course, these limits are directed to patent agents. When practicing within their state, patent attorneys have overlapping authority from state bar registration.

Notes:

• Effective Date, September 15, 2008
• Read the Rules
• These rules are a full revision of the disciplinary procedures. I have not yet read them all.

Open Source License Conditions Enforceable Through Copyright Law

Jacobson v. Katzer (Fed. Cir. 2008)

In an interesting decision, the CAFC held that open source license conditions are enforceable under the copyright laws. Jacobson's open source license at issue here allowed anyone to use his software so long as his conditions are met (such as making any modified code freely available).

Copyright vs Contract: The district court held that violation of the open source conditions are remedied through a contract claim rather than copyright. The CAFC sided with the copyright holder – holding that "Copyright holders who engage in open source licensing have the right to control the modification and distribution of copyrighted material."

Copyright holders who engage in open source licensing have the right to control the modification and distribution of copyrighted material. As the Second Circuit explained in Gilliam v. ABC, 538 F.2d 14, 21 (2d Cir. 1976), the "unauthorized editing of the underlying work, if proven, would constitute an infringement of the copyright in that work similar to any other use of a work that exceeded the license granted by the proprietor of the copyright." Copyright licenses are designed to support the right to exclude; money damages alone do not support or enforce that right. The choice to exact consideration in the form of compliance with the open source requirements of disclosure and explanation of changes, rather than as a dollar-denominated fee, is entitled to no less legal recognition. Indeed, because a calculation of damages is inherently speculative, these types of license restrictions might well be rendered meaningless absent the ability to enforce through injunctive relief.

. . . .

The clear language of the Artistic License creates conditions to protect the economic rights at issue in the granting of a public license. These conditions govern the rights to modify and distribute the computer programs and files included in the downloadable software package. The attribution and modification transparency requirements directly serve to drive traffic to the open source incubation page and to inform downstream users of the project, which is a significant economic goal of the copyright holder that the law will enforce. Through this controlled spread of information, the copyright holder gains creative collaborators to the open source project; by requiring that changes made by downstream users be visible to the copyright holder and others, the copyright holder learns about the uses for his software and gains others' knowledge that can be used to advance future software releases.

This decision is based on the court's interpretation of 9^th Circuit law. However, its impact on patent law may be a reminder that the court will allow patent infringement actions even when the infringement is based on violation of an intricate or exotic licensing contract.

Patently-O Bits and Bytes No. 56

• Patent Reform 2008: The "Duffy Provision" correcting the BPAI appointments problem has now been signed into law by President Bush. [LINK]
• Patent Reform 2008: The Duffy Provision is the only reform measure expected to pass before the November presidential elections. However, several reports indicate that there will be a push for reforms in September.
• Secrets Revealed: A recent Law.com article raises more questions about Research-in-Motion's ex parte lobbying at the PTO. The article lays the blame full on RIM attorneys but does not explain why the PTO is resisting efforts to eliminate wrongdoing. [LINK]
• Patently-O Jobs: Ryan Swarts has revamped the Patent Law Job site. [LINK] I'm always happy to hear when we have helped link an employee and employer!

Serendipity and Patentability

In 1966, the DC circuit court wrote about how "serendipity is consistent with patentability" and how patent law leaves room to reward luck. California Research Corp. v. Ladd, 356 F.2d 813 (1966).

In some ways, serendipitous inventions are easier to defend as patentable because defendants are less able to point to "ordinary research steps" as the cause of the invention. This may be especially true post-KSR. Dissenting in Pharmastem, Judge Newman argued that this love of luck had gone too far – arguing the majority's denial of patentability was akin to "limiting the patent system to the serendipitous and the unexpected." Pharmastem Therapeutics, Inc. v. Viacell, Inc., 491 F.3d 1342 (2007).

No Inequitable Conduct if Examiner Finds Withheld Reference while Searching

Teva Pharm. Indus. v. Apotex, 2008 U.S. Dist. LEXIS 60418 (D.N.J. 2008)

In 2007, Teva sued Apotex infringing its carvedilol patents. Apotex counterclaimed with charges of inequitable conduct – alleging that Teva had failed to disclose "any of the English language counterparts" of a submitted prior art reference.

The examiner actually found the withheld references in his search, and Teva argued no harm, no foul, no materiality. Apotex disagreed and argued that the examiner's serendipity "does not, as a matter of law, absolve an applicant from a charge of inequitable conduct."

New Jersey District Court Judge Brown agreed with the patentee Teva – holding that a reference cannot be considered "withheld from the examiner" if it is actually before the examiner.

"In Scripps Clinic & Res. Found. v. Genentech, Inc., 927 F.2d 1565, 1582 (Fed. Cir. 1991), the Federal Circuit stated that "[w]hen a reference was before the examiner, whether through the examiner's search or the applicant's disclosure, it can not be deemed to have been withheld from the examiner."

. . .

The duty to disclose all information known to be material to patentability is deemed to be satisfied if, all information known to be material to patentability of any claim issued in a patent was cited by the Office or submitted to the Office in the manner prescribed by §§ 1.97(b) -(d) and 1.98.

. . .

It is undisputed that the document allegedly withheld by Teva was found by the examiner. Therefore, in light of the fact that the alleged failure to disclose the English language counterparts of EP 0 127 099 is the only basis for Apotex's inequitable conduct counterclaim, the Court concludes that Apotex's inequitable conduct counterclaim should be dismissed with prejudice."

Patently-O Bits and Bytes No. 55: IP Scholars Edition

• A Debate on Patent Policy: Obama (representatives) vs. McCain (representatives). August 28 in Denver (on the last day of the Democratic convention). See Professors Sprigman and Rai defenda Obama against Reines and Gifford. [LINK]
• Stanford's IP Scholars Conference included lots of interesting academic works in progress. Here are a few examples [LINK].
  • Chiang (George Mason): Ex Post Claiming – "Patent law permits moving the fence to enclose the neighbors' new house, and then evicting the neighbors for trespassing." Chiang proposes a rule to eliminate any claim amendments made after a patent has issued (i.e., no continuation amendments). Pre-allowance amendments would be given the priority date of the amendment.
  • Chien (Santa Clara): The Cold War is not over. Discussing how the arms-race justification of filing patents is alive and well.
  • Cotropia (Richmond): Proposing a requirement that inventions be reduced to practice before patent filing.
  • Crouch (Missouri): Considering the justification of design patent protection as an alternative rule of evidence for protecting trade dress rights.
  • Greenbaum (Stanford): Explaining why University Tech Transfer offices should be abolished and university inventors should get to keep their rights.
  • Hemphill (Columbia): Empirical work on generic drug settlements in the shadow of Hatch-Waxman.
  • Kapczynski (Berkeley): India's progress in implementing TRIPS obligations for pharmaceutical inventions.
  • Liivak (Cornell): Examining ways of modifying patent law to encourage competition without relying solely on granting anti-competitive rights.
  • Masur (UChicago): Discussing the positive value of costly patent prosecution. It serves as a screen to block many worthless patents.
  • Pulsinelli (Tennessee): Proposing that new matter restrictions be softened to allow the addition of best mode information. This is important for international applicants who do not face the best mode requirement in their home countries.
  • Sichelman (Berkeley): Proposing a new form of intellectual property based on commercialization of new technology.
  • Vermont (George Mason): Narrowing the doctrine of equivalents over time.
• Non-patent, but really interesting:
  • Bartow (South Carolina): Counterfeits, Copying, Class, and Confusion.
  • Oliar and Sprigman (Virginia): IP norms in Stand-up Comedy.
  • Rowe (Florida): New Generation Employees and Trade Secrets

Inventorship Disputes: Six-Year Laches Presumption Applies Despite Intermediate Reexamination

Dr. Serdarevic v. Advanced Medical Optics (Fed. Cir. 2008)

In 2006, Dr. Serdarevic filed an inventorship claim against Advanced Medical (AMO). She argued that AMO's patented inventions were hers that she had developed during her ophthalmology residency at Columbia Presbyterian. Two of her attending physicians are listed as the inventors of the six patents in suit. Unfortunately for Serdarevic, all her witnesses died before she filed suit.

The district court dismissed Serdarevic's claims – finding the inventorship claim barred by laches. It turns out that Serdarevic claimed to have invented back in the early 80's. She learned of the patents in 1998, but waited until 2006 to file suit.

Inventorship Laches: The 1993 Scimed case held that a "delay of more than six years after the omitted inventor knew or should have known of the issuance of the patent will produce a rebuttable presumption of laches." Here, Serdarevic knew of the patent for more than eight years before filing suit – creating a presumption that laches applies.

Reexamination Does Not (Necessarily) Reset Laches: One of the patents had undergone reexamination during the eight-year period. Serdarevic argued that the laches clock should be restarted at that point. The CAFC rejected the notion of any such rule:

"One thing is clear, and accordingly we so hold: there is no rule that the issuance of a reexamination certificate automatically resets the six-year clock for the presumption of laches in each and every case."

In one older case, the CAFC allowed reset the laches clock after a reissue. Vaupel (Fed. Cir. 1991). The CAFC distinguished that case because the excluded inventor had participated in the reissue and had given notice that it would pursue its claim after the reissue.

PTO: Some Claim & Continuation Rules will Not be Effective Until After Injunction is Lifted

PTO Notice:

"USPTO is identifying the applicability date of those regulatory provisions relating to applications containing patentably indistinct claims which are enjoined in Tafas v. Dudas, 530 F. Supp. 2d 786 (E.D. Va. 2008). Should the injunction be lifted, those regulations will apply only to applications filed on or after any new effective date that would be published by the USPTO in the future.

. . . .

The USPTO anticipates that it will be some time before the litigation concerning the Claims and Continuations Final Rule is finally resolved. The USPTO is concerned that some applicants may be taking preparatory action anticipating the new requirements of 37 CFR 1.78(f)(1) and (2), as added by the Claims and Continuations Final Rule, due to the possibility that the injunction by the district court in Tafas will be removed. The purpose of this notice is to aid applicants who might otherwise feel the need to take such preparatory actions by identifying the applicability date of the provisions of 37 CFR 1.78(f) in the event that the injunction by the district court in Tafas is removed. Specifically, the changes in 37 CFR 1.78(f)(1) and (f)(2) will only apply to applications filed on or after any new effective date that would be published by the USPTO after the removal of the injunction. Thus, in the event the referenced injunction is lifted, applicants will only need to comply with the identification requirements of 37 CFR 1.78(f)(1) in applications having an actual filing date on or after this new effective date. Likewise applicants will only have to identify other commonly owned applications that satisfy the conditions set forth in 37 CFR 1.78(f)(1)(i) in applications that have a filing date on or after this new effective date. Similarly, the rebuttable presumption of 37 CFR 1.78(f)(2) will only apply to applications having an actual filing date on or after the effective date. Furthermore, the rebuttable presumption will only exist with respect to an application that satisfies the conditions set forth in 37 CFR 1.78(f)(2)(i) and also has a filing date on or after this new effective date.

Trends in Inventing: Design Patents

Most design patents are based on the work of a single inventor. Although the average "inventor count" per design patent is still under two a time series appears to show that the lone-mind story of inventing continues to shift to a collaborative effort. Two additional points of information: design patents associated with an assignee have a higher average inventor count as do design patents that list a law firm as handling the patent. Part of the story may be that patent attorneys are getting better at ferreting out the true inventor. However, I suspect that the trend does reflect a shift in the process of invention and product development.

Notes:

• This data is based on an analysis of all 300,000+ design patents issued since 1976.
• I'll redo this graph for utility patents. I suspect that the results will be similar – especially the continued trend toward more inventors per patent.
• In response to a comment, I parsed the number of inventors by country of assignee. Outcome: Amongst the 10 countries with the most design patent holders, US assignees have the highest average number of inventors per patent. (Non-assigned patents are left out of this analysis). (Click on graph to expand)
• In response to another comment, I looked at the patent with the most inventors. U.S. Patent No. Des. 563,280 has ten inventors listed. The patent covers the "ornamental design for a car" and is owned by the Chinese auto company Shenyang Brilliance Jinbei Automotive Co. The company manufactures BMW's Chinese 3 and 5 series. (Image below).

Inequitable Conduct: Out of the Frying Pan?

By Prof. Paul M. Janicke, HIPLA Professor of Law, University of Houston Law Center

In the 1980s patent practitioners were being pressed by clients to keep costs down. At the same time they were seemingly presumed by courts to understand right away any prior-art reference that made its way into their offices, and how that reference might relate to patent applications they were writing or prosecuting. They were rather upset with the drift of the law on inequitable conduct. It seemed the courts were allowing something short of intentional deception to make out that defense and to ruin a client’s otherwise solid case for validity and infringement. Language like “gross negligence” had crept into some of the appellate decisions. With enough time and funding by the challenger, many non-cited things in a patent practitioner’s possession could be made years later to look important to patent prosecution, and explanations for non-citation always seemed at that late date a little lame. All the challenger needed to do is find one of those things and persuade the judge to label the non-citation as gross negligence.

The Federal Circuit recognized the problem and in 1988 handed down Kingsdown Medical Consultants Ltd. v. Hollister Inc.,[1] wherein the court reiterated that intent to deceive the PTO had to be proved by clear and convincing evidence. In an in banc section of the opinion labeled “Resolution of Conflicting Precedent,” the court held that gross negligence could not alone suffice to make out inequitable conduct.[2] The profession breathed a little easier. They were perhaps out of the frying pan.

However, shortly after Kingsdown a number of other cases rightly pointed out that deceivers seldom come forth and say they acted with intent to deceive. “Such intent usually can only be found as a matter of inference from circumstantial evidence.”[3] Through the 1990s the Federal Circuit appreciated the continuing need to make an actual finding that a particular person acted to mislead the PTO in a particular way. It told us "a finding of intent to deceive the PTO is necessary to sustain a charge of inequitable conduct."[4] In a withholding-type accusation, reaching that conclusion of course requires a subsidiary finding that the person appreciated the significance of the withheld item. Without that appreciation, he can hardly be trying to deceive the examiner about the item. 

In the last three years Federal Circuit panels have slipped back into “should have known” language to arrive at the conclusion of intent to deceive or mislead the PTO.[5] That is the language of simple negligence. Even more troublesome, they seem to have reached the “should have” finding by reference to the importance (materiality) of the item to the prosecution proceeding, the logic of which is somewhat elusive. In 2008 a number of cases have now explained how all this is consistent with Kingsdown. Negligence alone might not be enough, but when material information is found in the hands of persons connected to patent prosecution, they need to provide a “credible explanation” or suffer a finding of bad intent.[6]

The trouble with this approach is that it allows even simple negligence (“should have known”) to shift the burden of persuasion on intent to the patent owner. This shift will happen in just about every case, because the finding of materiality in a combative courtroom setting will nearly always generate the “should have known” prong, shifting the entire burden of credibly showing benign intent onto the patentee. In the dynamic of actual patent litigation years after the events in question, that burden is indeed a fearsome one. In life, consider how often we ask ourselves when bad situations arise: “Why did I do that? Why didn’t I see the connection?” Credible-sounding explanations are not that easy to come by, even when we know we are innocent. Explanations on the ground of human fallibility feel hollow, and this is especially so in the majestic setting of a court proceeding. The patent bar and their clients have gone out of the frying pan and into the fire.

Some rays of hope have appeared for rectifying the situation. Judge Newman dissented in Nilssen, the small-entity status case.[7] And Judge Rader has seen the problem in what I regard as its proper light. In May of this year two panel judges sitting with him upheld a district court’s finding of inequitable conduct in a withholding-of-information case. The two were unwilling to reverse the lower court’s conclusion that the explanation given for non-citation was not credible.[8] Dissenting, Judge Rader said: “[M]y reading of our case law restricts a finding of inequitable conduct to only the most extreme cases of fraud and deception. . . Although designed to facilitate USPTO examination, inequitable conduct has taken on a new life as a litigation tactic. The allegation of inequitable conduct opens new avenues of discovery; impugns the integrity of patentee, its counsel, and the patent itself; excludes the prosecuting attorney from trial participation (other than as a witness); and even offers the trial court a way to dispose of a case without the rigors of claim construction and other complex patent doctrines.”[9] Amen to that. This is not the place to try to rectify perceived weaknesses in the patent examination process or to make amends with district judges by according more weight to their rulings. Worthy and important goals those may well be, but shifting burdens on inequitable conduct is not the way.

Inequitable conduct burdens have in the past rightly been placed on the challenger. Establishing this defense has required a finding not about what a person should have known, but that the person involved actually did appreciate of the significance of the information to the prosecution process. Now the burden on the intent prong has de facto shifted. Hopefully it will return to where it was. I have always thought the relative importance of the item as seen years later has little to do with finding an intent to mislead. Most of the time it is just as easy in life to fail to connect important dots as unimportant ones.

---

[1] 863 F.2d 867 (Fed.Cir. 1988), cert. denied, 490 U.S. 1067 (1989).

[2] Id. at 876.

[3] Hewlett-Packard v. Bausch & Lomb, 882 F.2d 1556, 1562 (Fed. Cir. 1989).

[4] RCA Corp. v. Data General Corp., 887 F.2d 1056, 1065 (Fed. Cir. 1989), emphasis in original.

[5] See Ferring BV v. Barr Labs. Inc., 437 F.3d 1181, 1191-92 (Fed. Cir. 2006) (applicant should have known non-disclosed relationships of affiants to assignee company were important); Cargill Inc. v. Canbra Foods Ltd., 476 F.3d 1359, 1367-68 (Fed. Cir. 2007) (applicant should have known lab tests on a property were important); Bruno Indep. Living Aids Inc. v. Acorn Mobility Services Ltd., 394 F.3d 1348, 1351 (Fed. Cir. 2005) (from what was said to FDA, applicant should have known prior powered staircase was important to PTO).

[6] See Nilssen v. Osram Sylvania, Inc., 528 F.3d 1352, 1359-60 (Fed. Cir. 2008) (inequitable conduct finding upheld based on wrongful claiming of small entity status, where explanation testimony was not credible); Pfizer Inc. v. Teva Pharms. USA, 518 F.3d 1353, 1367 (Fed. Cir. 2008) (finding of no inequitable conduct in non-citation of reference showing similar structure affirmed where explanation was credible); Monsanto Co. v. Bayer Bioscience N.V., 514 F.3d 1229, 1241 (Fed. Cir. 2008) (inequitable conduct finding upheld where explanation for non-citation of meeting notes was not credible).

[7] Supra, note 6, 528 F.3d at 1362-65.

[8] Aventis Pharma S.A. v. Amphastar Pharm. Inc., 525 F.3d 1334, 1349 (Fed. Cir. 2008).

[9] Id. at 1349-50.

Judge Rader Again Defends Patentee Against Charges of Inequitable Conduct

Research Corporation Technologies v. Microsoft (Fed. Cir. 2008)

In the third of a trio of inequitabe conduct opinions by Judge Rader, the CAFC reversed the lower court’s ruling that RCT’s digital halftoning patents were unenforceable. Amazingly, the appellate panel found instead that it was storied district court judge Manny Real who was guilty of bad behavior. [Discussion of the district court case.]

The panel – Judges Newman, Rader, & Freeman – could not have been better for a patentee accused of inequitable conduct.  Here, the CAFC held that the lower court clearly erred by failing to establish the materiality of RCT’s actions during prosecution.

“The trial judge found inequitable conduct because the inventors did not disclose [the inventor’s] post-filing K factor tests to the USPTO. Because [the inventor’s] work occurred after she and Dr. Parker had filed the patent application, these K factor experiments were not material to their inventive activity. In the circumstances of this case, therefore, the inventors had no obligation to report their later tests to the USPTO.”

The next quote will be taken out of context and often used:

“Importantly, [the inventor] and her coauthors published the K factor tests to the scientific community. Publication is an act inconsistent with an intent to conceal data from the USPTO.”

 

CAFC Refuses Mandamus to Stay ITC Proceeding Pending Reexamination

In re Freescale Semiconductor (Fed. Cir. 2008) (non-precedential)

Although this case arises from an ITC action, it still serves as a good example the difference between a court deciding whether to stay a proceeding versus the decision on preliminary injunctive relief. Both decisions are within the discretion of the lower court. However, only the preliminary injunction decision is immediately appealable.

In an ITC Section 337 action begun by patentee Tessera against Motorola, Freescale, Quallcom and others, the Administrative Law Judge (ALJ) granted a stay of its proceedings pending reexamination of the patent. On appeal, the Commission rejected the stay and ordered the proceedings reinstated. Freescale filed a petition for a writ of mandamus asking the CAFC to stay the proceedings.

Tessera’s 6,465,893 patent broadly covers a semiconducter chip arrangement:

a) a first semiconductor chip having a front surface, a rear surface and contacts on said front surface;

b) a second semiconductor chip having a front surface, a rear surface and contacts on said front surface, said rear surface of said second semiconductor chip being juxtaposed with said front surface of said first semiconductor chip;

c) a first backing element having electrically conductive first terminals, said first backing element being juxtaposed with said rear surface of said first semiconductor chip so that at least some of said terminals overlie said rear surface of said first semiconductor chip, at least some of said contacts on said first and said second semiconductor chips being electrically connected to at least some of said terminals; and

d) a substrate having contact pads thereon, said first terminals being connected to said contact pads of said substrate, said substrate being adapted to connect the assembly with other elements of a circuit, at least some of said first terminals overlying said rear surface of said first semiconductor chip.

The CAFC rejected Freescale’s request for mandamus — holding that the accused infringer had not shown any special need for a stay.

“The Commission provided a sufficient basis for denying the stay. Furthermore, that a petitioner may suffer hardship, inconvenience, or an unusually complex trial does not provide a basis for a court to grant mandamus.”

Patently-O Bits and Bytes

• On Friday, I'll be speaking at a Stanford Conference. The topic is the Quasi-Trademark Properties of Design Patent Protection. A recent lawsuit filed by Simply Orange Juice (Coca-Cola) is typical of the approach. SOJ's design patent covers its recognizable orange juice bottle. These days, design patents are regularly obtained more easily, cheaper, and quicker than the accompanying trade dress registration. The design patent can then be used as evidence of non-functionality in the future trade dress proceedings.
• The IP Dispute Resolution Blog (IP ADR) hosted "Blawg Review #171" with dozens of links to recent interesting IP articles. [LINK]
• Today's Washington Post includes info on "A Junket that is Patently Enviable." [An all expense paid trip to Copenhagen for PTO Officials and Congressional Staffers]
• Recent Patently-O Jobs:
  • Patent Attorney - Small Corporation - Bellevue, Wash.
  • Patent Associate/Agent - Law Firm - Washington D.C.
  • Assistant/Associate Clinical Professor of Law - University of Connecticut - Hartford, Conn.
  • Paralegal - Non-Profit - Seattle, Wash.
  • Director of IP - Non-Profit - Menlo Park, Calif.
  • Patent Attorneys - Law Firm - Dallas, Texas
  • Associate Director, Assistant General Counsel-Patents - Large Corporation - Chicago, Ill.
  • Patent Associate - Law Firm - Washington, D.C.
  • Patent Counsel - Large Corporation - Sunnyvale, Calif.
  • Patent Attorney - Small Corporation - Bellevue, Wash.

     

Research Tools: No 271(e)(1) Safe Harbor for Non-Regulated Equipment

Proveris Scientific Corp v. InnovaSystems, Inc. (Fed. Cir. 2008)

Innova's optical spray analyzer is used in connection with FDA regulatory submissions. In particular, the device can be used to measure the quality of aerosol sprays used for drug delivery. In a pre-trial order, much experienced Judge Young of Massachusetts ruled that the safe harbor of 35 USC 271(e)(1) does not immunize Innova's activities.

Section 271(e)(1) is designed to facilitate FDA regulatory approval process by immunizing submission related activity from charges of patent infringement. In particular, the safe harbor immunizes activities associated with a patented invention "solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products."

On appeal, the CAFC affirmed Judge Young's decision – holding that "the Section 271(e)(1) safe harbor does not immunize the OSA from infringement."

"In short, Innova is not a party seeking FDA approval for a product in order to enter the market to compete with patentees. Because the OSA device is not subject to FDA premarket approval, and therefore faces no regulatory barriers to market entry upon patent expiration, Innova is not a party who, prior to enactment of the Hatch-Waxman Act, could be said to have been adversely affected by the second distortion. For this reason, we do not think Congress could have intended that the safe harbor of section 271(e)(1) apply to it. Put another way, insofar as its OSA device is concerned, Innova is not within the category of entities for whom the safe harbor provision was designed to provide relief. We thus agree with the district court that Innova is not entitled to the benefit of the section 271(e)(1) safe harbor."

Note:

1. Jeff Light of "Patients not Patents" filed an amicus brief in this case.

Why Use Anonymous Searchers?

I was looking through a file history today and ran across the interesting note.

"This file is in disarray because a Public Searcher from the Law Firm of ***** LLP copied the file and did not put the paper back in order."

Guest Editorial: Obama Put Forward Sound Priorities on Patents Last Year. McCain May (Finally) Get To It Soon.

Editorial by Arti Rai, Elvin R. Latty Professor of Law, Duke University

From the perspective of a candidate running for President, articulating a position on the subject of patent reform might appear a fool's errand. For many (perhaps most) voters, the subject will be impossibly arcane. Within the small group that closely follows the highly divisive debate (e.g. patent litigators and prosecutors, stakeholders in the various industries most affected by patents), virtually any position a candidate takes will alienate a significant percentage.

Complicating the situation further is the reality that the patent system has so many moving parts. In particular, for better or for worse, a large chunk of patent policy is currently made through Federal Circuit decisions. For good reasons, the Constitution insulates Article III judges from direct Presidential control. But the result of this lack of control means that reform proposals that a President can readily implement, and that might appear sensible on first examination, can be undermined by judicial action. For example, requiring disclosure of prior art by applicants (who presumably know a lot about their area of invention) might seem sensible. But the reasoning behind the policy is undermined if the Federal Circuit decides to invoke a highly aggressive doctrine of inequitable conduct.

So ignoring the subject – as Senator John McCain has done, at least thus far, may be the politically expedient course. (We will see if the McCain technology plan, about which McCain advisor Michael Powell has been dropping hints and which is supposed to be unveiled formally soon, talks about patents.) But politically expedient behavior on an issue as important to innovation, and our country's future, as sound patent policy is hardly what we want from our next President.

What is striking about Senator Barack Obama's approach is that he has not only articulated a position, but that he did so back in November 2007, as the patent reform wars were raging in Congress. (Senator Obama's position appears in the technology platform that he released at Google last November.)

Senator Obama's approach reflects a nuanced understanding of the concerns of the various stakeholders. It also reflects an ability to rise above narrow interest group politics and suggest creative solutions not contemplated by the interest groups most active in the latest round of the Congressional reform wars.

For example, the Senator says that when "dubious patents are being asserted, the PTO could conduct low-cost, timely administrative proceedings to determine patent validity." Thus he comes out in favor of a "second window" for post-grant administrative review of patent validity at the time the patent is asserted. As IT firms that are faced with constant litigation threats have pointed out (and as other countries' experience with post-grant review shows), this option could represent a real savings relative to expensive litigation over patent validity. Moreover, at least in the long term, the availability of this option might reduce the incentive to file dubious patent applications in the first instance (and hence might reduce the current backlog of over 700,000 patent applications).

At the same time, Senator Obama's plan accommodates the interests of those firms (e.g. biotechnology and pharmaceutical firms) that have made reasonable arguments about their need for early certainty about patent validity. It provides for an option not contemplated in the Congressional debate – self-selection ex ante into "rigorous and public peer review that would produce a 'gold-plated' patent." Under default principles of administrative law, gold-plated patents would be much less subject to future administrative or judicial challenge.

Of course, much of the devil will be in the details. For example, as the GAO has recently pointed out, management and personnel practices at the PTO need to be improved substantially in order for the PTO to retain the qualified examiners necessary for implementing even existing procedures. New procedures will require even more attention to reform of internal PTO practices.

A Presidential candidate's policy proposals cannot include all of the details he might contemplate. But Senator Obama's willingness to stake out some clear reform positions early in his campaign, and at a time of great sensitivity over the issue, performs what economists call a signaling function. The Senator has sent a signal that he would take patents seriously, both in terms of substantive proposals and in terms of the people he would appoint to formulate and implement these proposals.

End of an Era; End of a Blog

Bill Patry has decided to stop his popular copyright law blog. He gives two reasons:

1. Although the blog is his personal work, most folks who quote the blog draw some link to Google policy. (I'll do it here: Patry is Google's top copyright attorney).
2. Copyright law is too depressing:

   "[W]e are well past the healthy dose stage and into the serious illness stage. Much like the U.S. economy, things are getting worse, not better. Copyright law has abandoned its reason for being: to encourage learning and the creation of new works. Instead, its principal functions now are to preserve existing failed business models, to suppress new business models and technologies, and to obtain, if possible, enormous windfall profits from activity that not only causes no harm, but which is beneficial to copyright owners. Like Humpty-Dumpty, the copyright law we used to know can never be put back together again: multilateral and trade agreements have ensured that, and quite deliberately.

   It is profoundly depressing, after 26 years full-time in a field I love, to be a constant voice of dissent. I have tried various ways to leaven this state of affairs with positive postings, much like television news shows that experiment with "happy features." I have blogged about great articles others have written, or highlighted scholars who have not gotten the attention they deserve; I tried to find cases, even inconsequential ones, that I can fawn over. But after awhile, this wore thin, because the most important stories are too often ones that involve initiatives that are, in my opinion, seriously harmful to the public interest. I cannot continue to be so negative, so often. Being so negative, while deserved on the merits, gives a distorted perspective of my centrist views, and is emotionally a downer.
   
   So between the inability or refusal of some people to accept the blog for what it is -- a personal blog --- and my inability to continue to be Cassandra, I decided it was time to pull the plug."

Patent Reform 2008: (fixing constitutional errors)

The only patent reform bill to make it through both the House and Senate in 2008 may well be the “Duffy Provision.” In an article first published in Patently-O on July 23, 2007, Professor John Duffy of GWU Law School argued that current provisions for appointing members of the Board of Patent Appeals and Interferences are unconstitutional. According to Duffy’s article, the constitution requires that these inferior officers (BPAI judges) must be appointed by either the President of the US or a “Head of Department” such as the Secretary of Commerce. I conducted a study in June 2008 and found that 83% of recent BPAI decision panels included at least one panel member that had been illegally appointed under the Duffy construction. In my study, a significant number of panels (44%) included a majority of illegally appointed judges, and about half of the opinions were authored by illegally appointed judges. John Welch, an expert on the Trademark Trial & Appeal Board suggested that TTAB judges would fall in the same category. [LINK] 

The House and Senate have acted on the issue and have now sent a Bill to the President that would correct the appointment process for both the BPAI and the TTAB by placing the appointment duty in the hands of the Secretary of Commerce.

The Bill also includes a “defense to challenge appointment.”  In particular, the new statute would read that “It shall be a defense to a challenge to the appointment of an administrative patent judge on the basis of the judge's having been originally appointed by the Director that the administrative patent judge so appointed was acting as a de facto officer.”

Notes:

1. Library of Congress Information on the Bills;
2. Duffy is also a member of the McCain Justice Advisory Committee.