December 2009

Patents and Vegetable Crop Diversity

Much of attention on genetically modified food patents has focused on soybeans and corn. In an interesting study, UGA law professor Paul Heald and anthropology professor Susannah Chapman focus on patents covering vegetables (excluding corn, soybeans, and canola) as well as their commercialization rates. Their study covers both plant variety protection certificates and utility patents for 42 vegetable varieties. They find that – for the most part – patents have not had a large impact on the vegetable market. They highlight their findings as follows:

  • Only 3.8% of varieties available in 2004 were ever subject to protection under patent law or the Plant Variety Protection Act (PVPA);
  • More than 16% of all vegetable varieties that have ever been patented were commercially available in 2004; and
  • In 2004, approximately 4.5% of protected, or once protected, varieties consisted of inventions that were at least twenty years old.

Read the paper here.

In an earlier paper, the pair showed that vegetable crop diversity increased in the past century — a finding that cuts against conventional wisdom in the field. Read that paper here.

Recent Jury Verdicts

Cerner v. Visicu, 4-cv-1033 (W.D. Mo., December 8, 2009) (Visicu’s asserted claims held not infringed and invalid as obvious).

Hologic, Inc. et al v. SenoRx, Inc, 08-cv-0133 (N.D. Cal. December 17, 2009) (Hologic asserted claims held not infringed and obvious).

DNT, LLC v. Sprint Nextel Corporation, 03-cv-0021 (E.D. Va. December 14, 2009) (DNT’s claims held not infringed and lacking written description & enablement)

Retractable Technologies, Inc. v. Occupational & Medical Innovations, Ltd., 08-cv.-0120 (E.D. Tex. December 18, 2009) (patent claims held infringed and valid with damages of $1.5 m). Verdict included additional $2.2m for trade secret misappropriation.

Presidio Components Inc v. American Technical Ceramics Corp, 08-cv-0335 (S.D. Cal. December 16, 2009)(patent claims held infringed and valid with damages of $1.0 m in lost profits).

Underlying data via http://lexmachina.com.

  

Internet Law & Electronic Commerce Exam 2009

Essay 1 (50 points)

Peter recently started a new social networking (“matchmaking”) company named Whistle Stop. Biographical information of users is stored on Whistle Stop servers. In addition, users install a small program (or “APP”) on their mobile phones. The APP works by regularly updating Whistle Stop servers with the location of its users. When one user is in close proximity to another “compatible” user, the mobile phone plays a provocative whistle. The volume and character of the whistle may vary according to the intensity of compatibility. The idea is that the whistle helps promote less formality in meeting and also promotes the likelihood of first-glance butterflies associated with love-at-first-sight. The site’s online address is http://whistlestop.com. The service has been somewhat successful, especially in more urban areas.

(a)   Seeing the success of Peter’s business, Edmund begins a competing business that he calls whistleMATCH available through http://whistlematch.com. Edmund also starts a FaceBook page using his competitor’s name – thus the website http://facebook.com/whistlestop directs users to the whistleMATCH website. What legal avenues are available to Peter to stop what he sees as this unfair competition?

(b) In another genius move, Edmund hires-away one of Peter’s network administrators. The new employee shows Edmund a major flaw in Peter’s security system that allows access to user biographical and location information via the Internet without any password protection. As a way of expanding his growing network, Edmund configures his systems to whistle when one of Peter’s customers is near. Identify the potential legal liabilities raised by this situation.

(c)   It turns out the whistle tune played on the Whistle Stop mobile devices is under copyright. Title to the musical work is held by Lucy while the sound recording rights are owned by the Aslan Corporation. Peter had purchased a digital version of the recording through an online store. Is Peter potentially liable for copyright infringement? What about his users? During installation, a copy of the recording is placed on each mobile device. That recording is then triggered by the proximity signal. Does it help Peter to include a provision in his terms of use that would bar users from suing him (or his company) for copyright infringement?

(d) Diggory is a Whistle Stop customer. However, he went online Friday morning and turned-off his account for 24-hours. You see, Diggory had a romantic date scheduled with Polly and he wanted to avoid any problematic situations. During the date, Polly saw her friend Susan. As Susan approached the couple, her mobile device whistled – indicating mutual compatible between her and Diggory. It is fair to say that the whistle created some tension that lasted for hours. Does Diggory have a cause of action?

(e)   What are the greatest potential legal problems facing this new venture?

BPAI Rules for Ex Parte Appeals: Request for Comment and Notice of Roundtable

The USPTO is still considering modifying its rules that govern appeals to the Board of Patent Appeals and Interferences (BPAI) in ex parte appeals.  Before moving forward , the office is “seeking further public comment on possible revisions to portions” of the final rules originally published in 2007. A roundtable will be held January 20, 2010 from 9:30 am – 12:30 pm at the USPTO.  Requests to participate must be submitted by January 8, 2010 to linda.horner@uspto. Written comments on potential revisions should be submitted by February 12, 2010 to BPAI.Rules@uspto.gov.

Background: The USPTO has seen an incredible influx of appeals. In FY 2007, the BPAI received fewer than five-thousand appeals. By FY 2009, that number had more than tripled — leaving a backlog of over thirteen thousand cases today.  This deluge of cases is the primary motivation behind the proposed rule changes.  The office is looking for ways to ensure that the BPAI can make better decisions in a more timely manner.  

The BPAI rule change has been something of a debacle — perhaps largely due to a backlash against the unrelated claim and continuation rule changes. The BPAI rules were proposed in 2007 and finalized in June 2008 with a December 10, 2008 effective date. However, on the day before its implementation, the USPTO withdrew the rules based on a failure to follow OMB information collection rules.

Specific “changes-to-the-changes” being considered:

  • (1) Deleting portions of the rule that require the filing of a petition to the Chief Administrative Patent Judge seeking extensions of time to file certain papers after an appeal brief is filed in an ex parte appeal or seeking to exceed a page limit;
  • (2) deleting portions of the rule that require the filing of a jurisdictional statement, table of contents, table of authorities, and statement of facts in appeal briefs, a table of contents, table of authorities, and statement of additional facts in reply briefs, and a table of contents and table of authorities in requests for rehearing filed in ex parte appeals;
  • (3) deleting portions of the rule that require an appellant to specifically identify which arguments were previously presented to the Examiner and which arguments are new;
  • (4) deleting portions of the rule that require specific formatting requirements and page limits for appeal briefs, reply briefs, and requests for rehearing; and
  • (5) deleting portions of the rule that require appellants to provide a list of technical terms and other unusual words for an oral hearing. The Office is also considering a revision to the final rule so that an examiner may continue to enter a new ground of rejection in an examiner’s answer (as is allowed under the current rules).
  • the Office is also considering not allowing an examiner to file a supplemental examiner’s answer in response to a reply brief.
  • the Office is also considering revising the final rule to make clear that the Chief Administrative Patent Judge, rather than the Board, may remand an application to the examiner.

Documents:

 

Patent Law Exam: Pioneering Patents

Here is the ‘policy question’ from my 2009 patent law exam:

Essay 3 (15 points)

 

Congressman I. N. Venter has proposed an amendment to the Patent Act that would create a special right known as a “pioneering patent.” According to the proposal, pioneering patents would be awarded for inventions that are both the product of genius and that dramatically alter the technology landscape. Examples might include the airplane and the polymerase chain reaction (PCR).  The pioneering patent would require greater evidence of nonobviousness, but the applicant would be allowed to pursue broader claims that might not otherwise satisfy the enablement and written description requirements of Section 112.  What are the pros and cons of this proposal? Would a better approach be to extend the patent term a number of additional years for inventions determined to be pioneering? (I.e., longer patents instead of broader patents).

 

 

Patently-O Bits and Bytes No. 308

  • Microsoft has released a patch which it believes brings Word 2007 within compliance of the permanent injunction order issued by the court in i4i v. Microsoft.  The patch is “required for the United States” and blocks updated versions of Word from reading “the Custom XML elements contained within DOCX, DOCM, or XML files.” According to the documentation, the DOCX files will continue to open, but any “Custom XML elements will be removed.” The documentation concludes that such custom XML elements are “not typically used by most end users of Word.” [LINK][About i4i v. Microsoft]
  • I recently ran across a blog by Franklin Pierce Law Student Trent Ostler: A Budding Patent Lawyer’s Perspective.
  • BPAI Rules: The USPTO is reconsidering new BPAI briefing rules. I will post more on this in the coming days. Of immediate importance to practitioners is the notice that as of mid-January, all briefs must comply with rules now-in-place.  (This ends a probationary period where the BPAI accepted briefs filed under the not-yet-effective new rules.)
  • BPAI Rules: Find them at 74 FR 67987 [File Attachment: E9-30402.pdf (233 KB)
  • In a December 16, 2009 statement, Rep. John Conyers made a statement on the House Floor in “gratitude for the service of George C. Elliott.”  Elliott spent two years (2007 and 2009) with the Judiciary Committee but is now returning to the USPTO as co-director of TC 1600.
     

USPTO Seeks to Rehire Limited Number of Former Examiners

The USPTO has had a fairly large attrition rate over the past 15 years. Part of the cause of the attrition has been within USPTO. However, I believe that the real driving forces have been (1) the private great demand during that time for patent law professionals; and (2) the fact that many of the USPTO new hires were young college graduates who expected to leave their first job within a couple of years.

Training of replacement examiners is slow and expensive and also frustrates patent applicants who expect a professional examination for their $1000+ fee.

Now that the private law market has shifted, the USPTO now sees its opportunity to hire experienced individuals — folks who will “hit the ground running” and who will likely be more stable in their life goals. As a first step, the USPTO is “reaching out to former patent examiners, inviting them to return to the agency.”

In a media quote, USPTO Director David Kappos said: “These examiners can have an immediate impact on the patent examination backlog and reducing the backlog is our top priority.”

The immediate limited program is focused on former examiners who passed their probationary requirements and who resigned less than three years ago or have more than three years experience examining patents. See www.USAJobs.gov (GS 9–14).

Patent Law Bits and Bytes: Holiday Cheer

  • Attorney Marketing professional Robert Denney publishes an annual year-end report entitled "What's Hot and What's Not in the Legal Profession." First on his list for What's Hot: Intellectual Property. Not only litigation. Patent prosecution is heating up again. [LINK]
  • One of the more interesting aspects of the recent i4i decision involved the Federal Circuit's interpretation of the first eBay factor: that the patentee "has suffered an irreparable injury." The court held that evidence of past irreparable harm is sufficient to satisfy the requirement of the first factor since the term "has suffered" indicates a past event. [Link] This is only odd because a primary purpose of equitable relief is to prevent future harm.
  • Judge Rader will be riding circuit next year. He is scheduled to preside over the patent infringement trials for three Eastern District of Texas Cases. (Based on pacer documents and a preliminary report by Michael Smith.)
    • Widevine v. Merimatrix, Case No. 07–cv-0321; Patent No. 7,165,175.
    • Performance Pricing v. Google, Case No. 07–cv-0432; Patent No. 6,978,253.
    • IP Innovation v. Red Hat & Novell, Case No. 07–cv-0447; Patent Nos. 5,072,412 and 5,394,521.

Appellate Court Enforces Permanent Injunction against Microsoft Word

By Dennis Crouch

i4i Limited Partnership v. Microsoft Corp. (Fed. Cir. 2009) (Judges Schall, Prost, & Moore; opinion by Judge Prost)

The i4i district court decision created some turmoil this past summer when the Eastern District of Texas court ordered Microsoft to stop selling versions of its flagship MS Word product that infringe i4i’s patent covering xml editing technology. The injunction was stayed pending appeal, but now the Court of Appeals for the Federal Circuit (CAFC) has affirmed the lower court’s findings of validity and willful infringement and its award of enhanced damages and permanent injunctive relief. The only modification made by the court was to push-back the effective date of the injunction from sixty-days to five months (from the original order). Thus, “[t]he injunction’s effective date is now January 11, 2010.”

To be clear, the permanent injunction “applies only to users who purchase or license Word after the date the injunction takes effect. Users who purchase or license Word before the injunction’s effective date may continue using Word’s custom XML editor, and receiving technical support.” Beginning January 11, 2010, Microsoft will be prohibited from “(1) selling, offering to sell, and/or importing into the United States any infringing Word products with the capability of opening XML files containing custom XML; (2) using Word to open an XML file containing custom XML; (3) instructing or encouraging anyone to use Word to open an XML containing custom XML; (4) providing support or assistance that describes how to use Word to open an XML file containing custom XML; and (5) testing, demonstrating, or marketing Word’s ability to open an XML file containing custom XML.”

Because the injunction only applies to future purchasers, Microsoft does not need to back-fix its already-distributed software. Rather, it only needs to ensure that software sold on or after January 11, 2010 is non-infringing. Microsoft may request another emergency stay of relief in order to seek en banc review of the decision. However, that process has a low likelihood of success. Because of the large damage award of $240 million, Microsoft will likely push-forward with requests for rehearing en banc and eventually a petition for a writ of certiorari to the U.S. Supreme Court.

Judging Injunctive Relief: A patentee seeking a permanent injunction must show that (1) it has suffered an irreparable injury due to the infringement; (2) remedies available at law (typically monetary damages) are inadequate to compensate for that injury; (3) considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) the public interest would not be “disserved” by a permanent injunction. eBay, 547 U.S. at 391. Here the irreparable harm was proven by “evidence that Microsoft’s infringement rendered i4i’s product obsolete for much of the custom XML market, causing i4i to lose market share and change its business strategy to survive.” Monetary damages were inadequate because “a loss of market share, brand recognition, and customer goodwill” typically defy valuation “particularly when the infringing acts significantly change the relevant market, as occurred here.” The balance of the hardships favor i4i because the patented technology is “central” to i4i’s business, but only a small factor in Microsoft’s business. Here, the court held that the “cost of redesigning the infringing products” is irrelevant to the hardship consideration. “Microsoft is not entitled to continue infringing simply because it successfully exploited its infringement.” Likewise, the public interest favors upholding patent rights especially here where the injunction is of a “narrow scope.” “By excluding users who purchased or licensed infringing Word products before the injunction’s effective date, the injunction greatly minimizes adverse effects on the public.”

Notes:

Patentable Subject Matter of a Machine that Uses a Mathematical Algorithm

Ex Parte Gutta (BPAI 2009)(Precedential)

In its fourth precedential opinion of 2009, an enlarged panel of the BPAI has created a new test for judging whether a claimed machine (or article of manufacture) that takes advantage of a mathematical algorithm falls within the patentable subject matter requirements of 35 U.S.C. Section 101. The two-part test parallels the Federal Circuit’s Bilski decision that focused on the patentablility of method claims. Of course, Bilski is now pending before the Supreme Court and a decision is expected in the Spring of 2010.

The BPAI’s test for a claimed machine (or article of manufacture) involving a mathematical algorithm asks two questions. If the a claim fails either part of the two-prong inquiry, then the claim is unpatentable as not directed to patent eligible subject matter.

(1) Is the claim limited to a tangible practical application, in which the mathematical algorithm is applied, that results in a real-world use (e.g., “not a mere field-of-use label having no significance”)?

(2) Is the claim limited so as to not encompass substantially all practical applications of the mathematical algorithm either “in all fields” of use of the algorithm or even in “only one field?”

In Gutta, the BPAI applied its new test to find its system claim unpatentable. Gutta’s system claim (claim 14) includes two coupled components — namely a memory and a processor.  The claim indicates that the processor is configured to identify a “mean item” whose symbolic value minimizes the variance of a set.  On those facts, the BPAI found that the claim failed the first prong by not limiting itself to any “tangible practical application in which the mathematical algorithm is applied that result in a real-world use.” Likewise, the claim failed the second prong because it “encompasses substantially all practical applications” of the algorithm.  “That is we are unable to identify any other practical application [of the algorithm] outside of the broadly defined claim.”

Interestingly, the decision was issued in August 2009, but made precedential in December 2009. By then, Gutta had abandoned the application. The patent application (SN 10/014,192) is assigned to Koninklijke Philips Electronics.

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Patently-O Bits and Bytes NO. 306

  • A University of Missouri student and entrepreneur was recently sued by the North Face for trademark infringement. The student’s company is called “the South Butt.” On the issue of confusion, the South Butt’s attorney indicated that the public knows the “difference between a face and a butt.” [AP]  The complaint [Download NorthFaceComplaint] includes allegations of trademark infringement, dilution (which does not require proof of confusion), false designation of origin, contributory trademark infringement, common law trademark infringement, common law unfair competition, and violation of the Missouri anti-dilution statute.  I think that SouthButt has a good chance of winning the straight trademark claims based simply on likelihood of confusion.  The defense of parody often turns on the judge's sense of humor.  
  • The judge assigned to the South Butt case (Judge Sippel) has presided over several trademark cases in his 12 years on the bench.  His most recent case involves a solar panel manufacturer using the name PRG suing another company who had registered the domain name PRG.com and was selling other solar panels on that site. Patterson v. ABS Consulting. The most recent opinion in that case involved the denial of the defendant's motion to dismiss for failure to state a claim. 
  • Google has been ordered to stop scanning French books. The Google Book project has scanned upwards of 10,000,000 books. [NYTIMES]
  • I just agreed to speak at the Texas IP Symposium two months from now in Austin (Feb 19). [Info will be available soon]
  • Listen to Kevin Noonan (MBHB & PatentDocs) and Dan Ravicher (PubPat) debate Gene Patenting on NPR’s Science Friday. [Link]
  • Recent Presumption if Irreparable Harm Cases:
    • Multiquip Inc. v. Water Mgmt. Sys. LLC, 2009 U.S. Dist. LEXIS 117022 (D.Id December 16, 2009)(in breach of contract case, holding that plaintiffs are given no presumption of irreparable harm in the context of a preliminary injunction)
    • Apple Inc. v. Psystar Corp., 2009 U.S. Dist. LEXIS 116502  (N.D. Cal. December 15, 2009) (“Except for trademark infringement claims, there is no presumption of irreparable harm with respect to permanent injunctions.”)
    • BorgWarner, Inc. v. Dorman Prods., 2009 U.S. Dist. LEXIS 115871 (E.D.Mich. December 11, 2009) (in a patent case, finding that the presumption of irreparable harm had not been overcome in the context of a preliminary injunction)
    • Bushnell, Inc. v. Brunton Co., 2009 U.S. Dist. LEXIS 110612 (D. Kan November 25, 2009)(“The Court is persuaded by the reasoning of those courts which have found that the presumption does not apply to preliminary injunctions in patent cases.”)
  • See also (cites from Bushnell opinion),
    • Voile Mfg. Corp., 551 F. Supp.2d at 1306 (eBay eliminated presumption of irreparable harm in preliminary injunction context);
    • Tiber Labs., LLC v. Hawthorn Pharms., Inc., 527 F. Supp.2d 1373, 1380 (N.D. Ga. 2007) (eBay eliminates presumption of irreparable injury in patent cases, whether raised at preliminary or permanent injunction phase);
    • Sun Optics, Inc. v. FGX Int'l, Inc., No. 07-137-SLR, 2007 U.S. Dist. LEXIS 56351, 2007 WL 2228569, at *1-3 (D. Del. Aug. 2, 2007) (presumption of irreparable harm in preliminary injunction analysis did not survive eBay);
    • Torspo Hockey Int'l, Inc. v. Kor Hockey Ltd., 491 F.Supp.2d 871, 881 (D. Minn. 2007) (same);
    • Chamberlain Group v. Lear Corp., No. 05 C 3449, 2007 U.S. Dist. LEXIS 56351, 2007 WL 1017751, at *5 (N.D. Ill. March 30, 2007) vacated on other grounds, 516 F.3d 1331 (Fed. Cir. 2008) (same);
    • Canon Inc. v. GCC Int'l Ltd., 450 F.Supp.2d 243, 254 (S.D.N.Y. 2006) (consistent with equitable principles set out in eBay, preliminary injunction movant must demonstrate likelihood of irreparable injury in absence of requested injunction);
    • z4 Techs., Inc. v. Microsoft Corp., 434 F.Supp.2d 437, 440 (E.D. Tex. 2006) (eBay eliminated irreparable harm presumption in permanent injunction context)).
  • But see
    • Christiana Indus. v. Empire Elecs., Inc., 443 F.Supp.2d 870, 884 (E.D. Mich. 2006) (eBay did not eliminate presumption);
    • Idearc Media Corp. v. Nw Directories, Inc., 623 F. Supp. 2d 1223, 2008 WL 2185334, at *9 (D. Or. 2008) (copyright case).

Patently-O Bits and Bytes NO. 306

  • A University of Missouri student and entrepreneur was recently sued by the North Face for trademark infringement. The student’s company is called “the South Butt.” On the issue of confusion, the South Butt’s attorney indicated that the public knows the “difference between a face and a butt.” [AP]  The complaint [Download NorthFaceComplaint] includes allegations of trademark infringement, dilution (which does not require proof of confusion), false designation of origin, contributory trademark infringement, common law trademark infringement, common law unfair competition, and violation of the Missouri anti-dilution statute.  I think that SouthButt has a good chance of winning the straight trademark claims based simply on likelihood of confusion.  The defense of parody often turns on the judge's sense of humor.  
  • The judge assigned to the South Butt case (Judge Sippel) has presided over several trademark cases in his 12 years on the bench.  His most recent case involves a solar panel manufacturer using the name PRG suing another company who had registered the domain name PRG.com and was selling other solar panels on that site. Patterson v. ABS Consulting. The most recent opinion in that case involved the denial of the defendant's motion to dismiss for failure to state a claim. 
  • Google has been ordered to stop scanning French books. The Google Book project has scanned upwards of 10,000,000 books. [NYTIMES]
  • I just agreed to speak at the Texas IP Symposium two months from now in Austin (Feb 19). [Info will be available soon]
  • Listen to Kevin Noonan (MBHB & PatentDocs) and Dan Ravicher (PubPat) debate Gene Patenting on NPR’s Science Friday. [Link]
  • Recent Presumption if Irreparable Harm Cases:
    • Multiquip Inc. v. Water Mgmt. Sys. LLC, 2009 U.S. Dist. LEXIS 117022 (D.Id December 16, 2009)(in breach of contract case, holding that plaintiffs are given no presumption of irreparable harm in the context of a preliminary injunction)
    • Apple Inc. v. Psystar Corp., 2009 U.S. Dist. LEXIS 116502  (N.D. Cal. December 15, 2009) (“Except for trademark infringement claims, there is no presumption of irreparable harm with respect to permanent injunctions.”)
    • BorgWarner, Inc. v. Dorman Prods., 2009 U.S. Dist. LEXIS 115871 (E.D.Mich. December 11, 2009) (in a patent case, finding that the presumption of irreparable harm had not been overcome in the context of a preliminary injunction)
    • Bushnell, Inc. v. Brunton Co., 2009 U.S. Dist. LEXIS 110612 (D. Kan November 25, 2009)(“The Court is persuaded by the reasoning of those courts which have found that the presumption does not apply to preliminary injunctions in patent cases.”)
  • See also (cites from Bushnell opinion),
    • Voile Mfg. Corp., 551 F. Supp.2d at 1306 (eBay eliminated presumption of irreparable harm in preliminary injunction context);
    • Tiber Labs., LLC v. Hawthorn Pharms., Inc., 527 F. Supp.2d 1373, 1380 (N.D. Ga. 2007) (eBay eliminates presumption of irreparable injury in patent cases, whether raised at preliminary or permanent injunction phase);
    • Sun Optics, Inc. v. FGX Int'l, Inc., No. 07-137-SLR, 2007 U.S. Dist. LEXIS 56351, 2007 WL 2228569, at *1-3 (D. Del. Aug. 2, 2007) (presumption of irreparable harm in preliminary injunction analysis did not survive eBay);
    • Torspo Hockey Int'l, Inc. v. Kor Hockey Ltd., 491 F.Supp.2d 871, 881 (D. Minn. 2007) (same);
    • Chamberlain Group v. Lear Corp., No. 05 C 3449, 2007 U.S. Dist. LEXIS 56351, 2007 WL 1017751, at *5 (N.D. Ill. March 30, 2007) vacated on other grounds, 516 F.3d 1331 (Fed. Cir. 2008) (same);
    • Canon Inc. v. GCC Int'l Ltd., 450 F.Supp.2d 243, 254 (S.D.N.Y. 2006) (consistent with equitable principles set out in eBay, preliminary injunction movant must demonstrate likelihood of irreparable injury in absence of requested injunction);
    • z4 Techs., Inc. v. Microsoft Corp., 434 F.Supp.2d 437, 440 (E.D. Tex. 2006) (eBay eliminated irreparable harm presumption in permanent injunction context)).
  • But see
    • Christiana Indus. v. Empire Elecs., Inc., 443 F.Supp.2d 870, 884 (E.D. Mich. 2006) (eBay did not eliminate presumption);
    • Idearc Media Corp. v. Nw Directories, Inc., 623 F. Supp. 2d 1223, 2008 WL 2185334, at *9 (D. Or. 2008) (copyright case).

Gifts for a Patent Attorney: The Patent Office Director Game!

Monopoly-manThe USPTO has released its patent pendency simulator so that you can play at home. 

The Patent Pendency Model (PPM) is a Simulation Tool that predicts patent production output based on actual historical data and input assumptions.   The model uses historical patterns in funding, staffing and pendency.  The model uses an interactive spreadsheet  to make calculations and to create graphs of predicted outcomes.

The Simulator works in Microsoft Excel. Players set various inputs each year, including the number of examiners hired, atrition rate, examiner overtime hours, examiner attrition rate, change in application filings, change in the percent of filings that are RCEs. (In the game, the PTO continues with its notion that RCE’s count as applications…)

Although not quite an FPS, the game is at least free!

If you want to spend money:

PTO Asks for Comments on Improving Patent Quality

The PTO is on a mission to “improve the quality of the overall patent examination and prosecution process, to reduce patent application pendency, and to ensure that granted patents are valid and provide clear notice.”

To that end, the PTO recently released a Request for Comments (RFC) on Enhancement in the Quality of Patents. [PDF]. The RFC asks for public comment on ideas that the PTO can implement (without changes in the rules or laws or much increased expenditure) that improve patent quality and the quality of the examination process. Generally, the office is looking for practical suggestions of ways to obtain measurable quantites that are linked to meaningful outcomes.  The suggestions should all be directed toward the PTO’s goal of providing the strongest quality patent possible in the shortest time permits.

The RFC identifies seven categories of inquiry:

  1. How should the office measure quality of the examination process as well as quality of the final product (issued or abandoned patent)?
  2. What stages of the prosecution process should be most closely monitored for quality problems?
  3. Are there ways to reduce pendency while increasing quality? (How has the flux of continuations and RCE’s impacted quality and pendency?)
  4. What pilot prograrms are working: Peer-to-Patent; Pre-Appeal Brief Conference; First Action Interview; CLE for Practitioners? Ideas for pilots?
  5. How should customers be surveyed for their information regarding patent quality?
  6. Are there specific tools (software, processes, etc.) that the PTO should be using to increase quality?
  7. Incentives: Are there ways to provide incentives to both applicants and examiners to improve quality?

The RFC additionally identifies “areas of particular USPTO interest”

  1. Prior Art: How to identify the “best” prior art in ways that it can be used by an examiner.
  2. Higher Quality Patent Applications: Are there ways that the USPTO can help (or push) applicants to write better applications that do a better job of describing the invention and that include claims in the initial application that actually take the prior art into consideration?
  3. Comprehensive First Office Action: How can we measure whether examiners are doing a good job in their initial office actions? Are there better ways for examiners to communicate rejections?
  4. Interviews: How should interviews be used in a way that improves quality and pendency?

Please e-mail comments to patent_quality_comments@uspto.gov by February 8, 2010.

In the context of this inquiry, a “quality patent” has been defined as:

A patent: (a) For which the record is clear that the application has received a thorough and complete examination, addressing all issues on the record, all examination having been done in a manner lending confidence to the public and patent owner that the resulting patent is most likely valid; (b) for which the protection granted is of proper scope; and (c) which provides sufficiently clear notice to the public as to what is protected by the claims. The present quality improvement effort has, as one goal, reduction of overall application pendency and is thus also directed towards identifying quality issues that give rise to process inefficiencies. The term ‘‘quality patent’’ as used herein does not include the economic value of the resulting patent, which is a result of market conditions and not the patent process itself. Rather, providing the strongest quality patent possible in the shortest time permits making the best use of a patent, given any set of marketing conditions.

Read the full RFC here before you add your comments: PDF.

Information on the Public Patent Advisory Committee

The USPTO’s Patent Public Advisory Committee (PPAC) is charged with reviewing the “policies, goals, performance, budget, and fees” of the USPTO.  The PPAC tends to work closely with USPTO upper management, including the director. PPAC members are public officials and are also paid by the government for their services at a rate well above my salary.

Although the PPAC serves only an advisory role, its members do have a direct-line to the PTO director that is mandated by statute.  Folks with particular concerns may do well to contact the members directly. Since the USPTO does not offer contact-information for these officials, so I thought I would do so here.

Current PPAC Members:

  • Marc Adler, former Chief IP Counsel at Rohm & Haas, now an independent consultant. [Contact].
  • Louis Foreman, product designer, inventor, and author. [Contact].
  • F. Scott Kieff, professor at GWU Law School and Senior Fellow at Stanford’s Hoover Institution. [Contact].
  • Damon Matteo, IP director (intellectual capital management) at the Palo Alto Reserach Center (parc). [Contact].
  • Steve Pinkos, former Deputy PTO Director, now a lobbyist and IP Advisor. [Contact].
  • Maureen Toohey, Patent attorney at her own law firm (Toohey Law Group). [Contact].

When have Novelty Rights Been Important?

In the next few days, I’ll be distributing a draft of my working paper on the role the invention date in ex parte prosecution.  I’m looking for citations for the following proposition:

Supporters of invention-date-based novelty rights argue that such rights, although rarely asserted, make a big difference in big cases. 

Ideally, I’m looking for cases outside of the interference context that turned on the ability of a patentee or patent applicant to antedate would-be prior art. Thanks for any help!!

The Presumption of Irreparable Harm?


PatentLawPic858By Dennis Crouch

In a non-precedential opinion, the Federal Circuit  recently decided the important and open question of whether the Supreme Court’s decision 2006 in eBay v. MercExchange eliminated the presumption of irreparable harm that has been traditionally associated with the ongoing infringement of a patent that has been valid and enforceable. Automated Merchandising Systems (AMS) v. Crane Co. (Fed. Cir. 2009). The AMS opinion (authored by Chief Judge Michel and signed by Judges Clevenger and Dyk) holds that there is no presumption of irreparable harm “based just on proof of infringement.”


[T]he district court relied on . . . the old presumption that harm from patent infringement was irreparable, [and consequently that] the burden was on the defendant to demonstrate that the potential harm from not granting a preliminary injunction was finite, calculable, and compensable. This is no longer the law, as these cases all pre-dated the Supreme Court’s decision in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 392-94 (2006), in which the presumption of irreparable harm, based just on proof of infringement, was discarded. The burden is now on the patentee to demonstrate that its potential losses cannot be compensated by monetary damages.

Interestingly, neither party raised the presumption issue in their briefs except for a footnote by the defendant Crane arguing that the question of “whether such a presumption still exists or applies here is not at issue in this appeal.”

In two prior cases, the Federal Circuit refused to consider this same question — instead deciding the cases on other grounds. In Broadcom Corp. v. Qualcomm, Inc., 543 F.3d 683 (Fed. Cir. 2008), the court indicated that “[i]t remains an open question whether there remains a rebuttable presumption of irreparable harm following eBay.” Likewise, in Amado v. Microsoft Corp., 517 F.3d 1353 (Fed. Cir. 2008), the court refused to consider the question. Incidentally, the court in AMS could have also avoided the issue because the lack of irreparable harm was one of two alternate justifications for its judgment. (The court also held that the patentee had not shown a sufficient likelihood of success on the merits.). Both the Broadcom and Amado opinions were written by Judge Linn. (The Broadcom panel included Judges Linn, Friedman, and Prost while the Amado panel included Judges Bryson, Clevenger, and Linn).  District court cases have been decided both ways, although the predominant approach is to deny the presumption and instead force the patentee to provide evidence of irreparable harm.

The AMS decision could be isolated as a preliminary injunction decision using the policy grounds that preliminary relief should require a higher standard of proof.  However, the court’s reliance on eBay (a permanent injunction case) suggests such isolation is incorrect. Another potential distinguishing feature is the AMS’s statement that “the presumption of irreparable harm, based just on proof of infringement, was discarded.”  Permanent injunctive relief is typically based on ongoing infringement (not just infringement) and typically include a judgment that the patent is valid (not invalid) and enforceable (not unenforceable).  Of course, those features were also present in the eBay decision that serves as the Federal Circuit’s source of law. 

Of course, the AMS case does not serve as precedent and future panels (and lower courts) are still free to fill-in-the-blank left by eBay.

The Interplay between Reexaminations, Preliminary Injunctions and Stays of Litigation

PatentLawPic857by Dennis Crouch

Automated Merchandising Systems (AMS) v. Crane Co. (Fed. Cir. 2009)(nonprecedential)

We are approaching the point that most patents being litigated are also undergoing a parallel reexamination at the patent office. Defendants file reexamination requests as both (a) a way to invalidated claims and (b) a litigation strategy.  One aspect of the litigation strategy is the notion that a district court may completely stay proceedings until the outcome of the reexamination (typically a multi-year delay). This case also suggests that a pending reexamination may help a defendant defeat a preliminary injunction. Finally, this case is important because it holds that a patentee has no presumption of irreparable harm based on proof of infringement.

AMS & Crane compete in the market for vending machines. AMS asserted patents cover the “use of optical technology to determine whether a [purchased product] has actually been delivered.”  In the infringement litigation, the West Virginia federal district court took the unusual approach of simultaneously (1) granting the patentee’s motion for a preliminary injunction and (2) granting the defendant’s motion to stay proceedings until the outcome of the copending reexamination.

The Federal Circuit has interlocutory jurisdiction over appeals from orders granting or denying preliminary relief. 28 U.S.C. § 1292(a)(1).  Using that jurisdictional hook – the court also considered the stay.  (The court also held that the right to appeal attaches once the PI motion is decided – regardless of whether a PI bond is posted.). 

The Federal Circuit has previously held that a “district court ordinarily should not grant both a preliminary injunction and a stay.” Procter & Gamble, 549 F.3d at 849 (Fed. Cir. 2008).  On appeal, the Federal Circuit reversed the preliminary injunction, but affirmed the stay.

Preliminary Relief: The equitable remedy of a preliminary injunction is governed by a four-factor test much like those outlined in the Supreme Court’s case of eBay v. MercExchange.  These four factors include: (1) the likelihood of the patentee’s success on the merits; (2) irreparable harm if the injunction is not granted; (3) the balance of hardships between the parties; and (4) the public interest.  In the factors for permanent injunctive relief is that preliminary relief considers the likelihood of success on the merits. That factor is not relevant to permanent relief because that injunction question is only asked after the patent has been held valid and infringed. The first two factors must each be established before preliminary relief may be granted. Thus, although identified as factors, they are more properly seen as required elements.

On appeal, the Federal Circuit found that the district court had abused its discretion in finding that the patentee had established a likelihood of success and irreparable harm.

Irreparable Harm: In a definitive statement, the appellate panel held that there is no presumption of irreparable harm “based just on proof of infringement.” Although prior cases have found a presumption, those cases were overturned by eBay.

[T]he district court relied on . . . the old presumption that harm from patent infringement was irreparable, [and consequently that] the burden was on the defendant to demonstrate that the potential harm from not granting a preliminary injunction was finite, calculable, and compensable. This is no longer the law, as these cases all pre-dated the Supreme Court’s decision in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 392-94 (2006), in which the presumption of irreparable harm, based just on proof of infringement, was discarded. The burden is now on the patentee to demonstrate that its potential losses cannot be compensated by monetary damages.

In looking at the patentee’s evidence of irreparable harm, the Federal Circuit held that its evidence of lost sales and arguments of lost market share were insufficient. “[L]ost sales standing alone are insufficient to prove irreparable harm” because they are presumed to be compensable through damages. Lost market share and price erosion could lead to a conclusion of irreparable harm. However, those must be proven or “at least substantiated with some evidence” and shown to be caused by ongoing infringement. 

More Than de Minimis: The patentee did provide evidence of one lost contract (Mountain Coin Machines) due to the ongoing infringement. However, the Federal Circuit rejected that “loss of one distributor” as sufficient to show irreprable harm. “We cannot agree that, under the circumstances of this case, the defection of a single distributor from the patentee’s camp to the accused infringer’s camp is sufficient to demonstrate irreparable harm.”

Likelihood of Success: The patentee must show that it is “reasonably likely to succeed in the case-proper in order to win a preliminary injunction. In other cases, the Federal Circuit has held that a “substantial question” of patent validity is sufficient to derail a preliminary injunction. On appeal here, the Federal Circuit found such a substantial question based on the prior-art presented by the defendants.  Most of the court’s analysis, however, is directed at the district court’s analysis that was “too quick to dismiss Crane’s invalidity argument.” 

Reexamination and Likelihood of Success: Although dicta, the court suggests that the PTO’s decision to reexamine the pending reexamination also impacts the likelihood of success because reexamination is premised on a decision that the patent faces a “substantial question of patentability.”

Because it logically seems that there cannot simultaneously be a substantial issue of patentability and no substantial issue of patentability, stays pending reexamination are typically inappropriate in cases in which preliminary injunctions are appropriate.

The Federal Circuit’s suggestion is off-base for many reasons – most notably that the PTO grants reexamination requests in almost every case.  Interestingly, the one reexamination request from this case that I pulled-up (90/009,231) was denied by the PTO because the submitted reference was not prior art. 

Based on the adjudged “weaknesses” of the patentee’s proof of likelihood of success and irreparable harm, the Federal Circuit reversed the lower court’s grant of preliminary relief.

Stay Pending Reexamination: A court’s discretion in managing its docket appears broader than its discretion in granting or denying injunctive relief. Here, the Federal Circuit gave the challenge to the stay only cursory review.

AMS’s claims against Crane are still in their very early stages: Crane requested the stay only two months after the complaint was filed, and the district court entered the stay order before any discovery was conducted. Because the stay was granted pending the outcome of patent reexamination proceedings, it may simplify the issues for trial. It might even render a trial unnecessary. Given these facts, and given the wide discretion the district court generally has to manage its docket, this seems to be a case in which the stay could have been correctly granted or denied. We cannot say that the district court abused its discretion here by granting the stay.

Stay affirmed.

Notes: PAIR Docket Information

 

The Role of the Patentee’s Expert in Proving Infringement

Intellectual Science and Technology v. Sony Electronics (Fed. Cir. 2009).

This decision follows a long line of cases warning against the use of means-plus-function claim language. The decision should also be seen as guidance to technical experts (to be more technical).

Intellectual Science’s Patent No. 5,748,575 covers a computer configured to simultaneously access multiple optical discs (such as CD-ROMS). According to the description, an “intelligent time-division multiplexer” is used to combine the multiple information sets into a single data stream for the host computer to process. Following the advice of an appointed special master, the district court on summary judgment held the patent not-infringed. On appeal, the Federal Circuit affirmed.

The appeal focused on the claimed “data transmitting means.” The parties agreed that the limitation should be interpreted under 35 U.S.C. 112p6 as a means-plus-function term. The dispute turned on whether the claimed means covers the accused device.

For a means-plus-function claim term, the term literally covers an accused device if the relevant structure in the accused device performs the identical function recited in the claim and that structure is identical or equivalent to the corresponding structure in the specification.

The patentee’s problem was that its technical expert’s report failed to tie the accused device to the claimed means and its corresponding structures found in the patent specification.

[T]he problem . . . is the absence of any showing that the identified structure accomplishes the same function in the same way as the claimed structure. . . . [T]he record must specifically identify the infringing features of those components and the reason that one of skill in the art would recognize them as infringing. Without that further identification and explanation, a reasonable juror would not be able to determine that those allegedly infringing components are actually present.

A court can properly find summary judgment of non-infringement if the patentee’s expert fails to provide “foundation for his infringement opinion in sufficient detail for the court to be certain that features of the accused product would support a finding of infringement under the claim construction adopted by the court, with all reasonable inferences drawn in favor of the non-movant.” Here, the Federal Circuit held that the patentee’s expert had failed that test.

Judgment of NonInfringement Affirmed.

Notes: There is nothing “wrong” with writing means-plus-function claim language — especially to accompany a well drafted specification. However, an applicant should not expect that its broadest claim is the MPF.

Claim 1 of the patent reads as follows:

1. An information processing apparatus with multitasking function, the information processing apparatus comprising:

   (a) a plurality of turntables, each comprising a disc-setting table for mounting an optical disc;

   (b) a plurality of optical units, each comprising a driving means and an optical read head, wherein said driving means is provided for moving said optical read head in a radial direction of said optical disc to a predetermined disc position on a surface of said optical disc;

   (c) means for simultaneously controlling a plurality of said driving means to move a plurality of said optical read heads to a plurality of predetermined disc positions on at least two optical discs for retrieving information stored thereon;

   (d) a plurality of signal-process systems for converting a plurality of information sets retrieved by said plurality of optical read heads from a compact disc format to the original state of the information; and

   (e) data transmitting means for transmitting a plurality of the information sets converted by said plurality of signal-process systems to a host computer.