In six weeks or so, Judge Randall R. Rader will take-over as Chief Judge of the Court of Appeals for the Federal Circuit. Gene Quinn recently sat-down with Judge Rader to discuss the Federal Circuit and his new role as Chief Judge. Gene has published the entire interview here. The content of the interview is interesting as is the fact that Judge Rader was willing to sit-down to record an unscripted give and take with Gene (a blogger and avid critic).
I have posted a few excerpts below:
Following on the heels of the Federal Circuit en banc opinion in Ariad Pharmaceuticals, Inc. v. Eli Lilly & Co., Professor Kevin Collins asks "What next?"
Before Ariad, the uncertainty channeled much of the scholarly conversation about the written description doctrine into a binary debate, pitting those who it applied to original claims versus those who believed that it did not. After Ariad, the stage is now set for greater participation in more nuanced conversations about the role that the written description requirement does and should play in curtailing patent protection. Ariad may end one facet of the debate over written description, but it would be a lost opportunity if Ariad were interpreted to end the debate over written description more broadly and cut off these more nuanced conversations.
In this short essay, Professor Collins suggests that patent law scholarship should adopt a "trans-doctrinal approach" directed to the broader purposes and limitations of patent law rather than being confined to doctrinal silos. The essay indicates that this holistic approach may also be helpful in explaining a perception that patent law varies greatly according to the area of technology. [Download Collins.Ariad]
Read: Kevin Collins, An Initial Comment on Ariad: Written Description and the Baseline of Patent Protection for After-Arising Technology, 2010 Patently-O Patent L.J. 24.
Guest Post by Professor Ted Sichelman, University of San Diego School of Law
A general patent counsel at a Fortune 500 company recently remarked, "[T]he Federal Circuit does a coin flip and reverses district court decisions left and right. You might as well just roll the dice."[1] When I was in legal practice, many patent litigators echoed this sentiment.
In a recent article, I collected data from the University of Houston's PatStats project, Professor David Schwartz's exhaustive study on claim construction appeals, internal studies by the Federal Circuit, and the Administrative Office of the Courts to test this seemingly widespread belief.
By and large, the belief is false. Reversal rates for patent cases at the Federal Circuit are not particularly high, and roughly the same as civil reversal rates in other circuits, especially those for complex civil cases. On an issue-by-issue level, although claim construction, § 102(a) anticipation, indefiniteness, and a few other issues have noticeably high reversal rates, for most patent law issues, the rates are about average when compared with rates for private civil appeals in other circuits.
Figure 1 below shows case-by-case reversal rates at the Federal Circuit from 2000-2009 for patent infringement cases appealed from district courts. (This data includes cases that were fully reversed or vacated, and appears to take into account summary affirmances.)
Figure 1. Reversal Rates at the Federal Circuit for District Court Patent Appeals (2000-2009).
In comparison to the 8-18% rates shown in Figure 1, the private civil litigation reversal rates across the regional circuit courts are roughly 7-18%. The reversal rate in 2009 for bankruptcy cases in the regional circuit courts was 15.1%. Although it is somewhat out-of-date, the most exhaustive study of securities and contract appeals in federal courts reports reversal rates of 29.4% and 22.8%, respectively, from 1988-1997. In sum, the case-by-case reversal rates at the Federal Circuit are roughly the same or lower than the reversal rates in the regional circuits for private civil actions, particularly complex ones, like bankruptcy, securities, and contracts cases.
Figure 2 below shows issue-by-issue reversal rates at the Federal Circuit from 2000-2007 for those issues appealed in at least 20 cases (for a more exhaustive set of reversal rates, see my article). According to the data sources I used to compile these figures, these rates derive from all appeals decided by the Federal Circuit, including summary affirmances. (However, I believe some of the summary affirmances from the early 2000s may be missing from one of the sources–if so, this would only lower the issue-by-issue reversal rates, strengthening my argument.)
As Figure 2 shows, the average reversal rate across all issues (other than claim construction) is 18% and 21% (including claim construction). Of course, a number of issues appear to have inordinately high reversal rates–with the oft-appealed issue of claim construction (at 33%) near the top of the list. But like the case-by-case reversal rates, the average reversal rate across all issues–that is, even taking into account the large number of claim construction reversals–is roughly the same as the overall civil reversal rate in other circuits, and roughly the same or lower than case-by-case reversal rates for complex civil cases.
Thus, the actual reversal rates–whether generated on a case-by-case or issue-by-issue basis–belie the assertion that appeals at the Federal Circuit are a "coin flip" or "dice roll." When compared with reversal rates for private and complex civil actions in other circuits, the Federal Circuit rate is no different, perhaps even lower. So why do so many attorneys believe otherwise?
I think two forces are at work here. First, nearly all of the widely publicized studies on the Federal Circuit have focused on claim construction and obviousness–both of which have high reversal rates. And some of these studies excluded summary affirmances, a practice which artificially inflates the reversal rates by roughly 30%. Second, my sense is that many attorneys who regularly appear before the Federal Circuit are subject to "memory bias." Specifically, as a number of psychologists have generally recognized, these attorneys very likely recall their unpredictable appeals and forget their predictable ones.
Hopefully, the data presented here and in my article will help dispel these widespread myths and diminish some of the undeserved criticism of the Federal Circuit regarding appeals.
Ted Sichelman is an Assistant Professor at the University of San Diego School of Law, where he teaches patent law and other intellectual property courses.
[1] Patent Troubles: Does The Patent System Need Fixing?, Corporate Legal Times, June 2005, at 61 (statements of Richard J. Rodrick, General Patent Counsel, S.C. Johnson & Son Inc.).
Vanderbilt Univ. v. ICOS Corp. (Fed. Cir. 2010)
Vanderbilt and ICOS have been locked in an inventorship dispute for several years over patent rights to tadalafil, the active ingredient in Cialis. The University argues that its scientists should be listed as inventors on the patents because they provided provided the building-blocks that Glaxo used in its discovery of tadalafil. (ICOS now holds the patent rights).
The district court ruled against Vanderbilt – holding that the Vanderbilt researchers could not be inventors because they did not have an independent understanding of the “complete compound claimed.” On appeal, the Federal Circuit rejected that misinterpretation of the law of joint inventorship, but affirmed the final holding based on its conclusion that Vanderbilt had not provided clear-and-convincing evidence that it contributed to the invention.
The Patent Act provides some foundation for the law of joint inventorship.
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When an invention is made by two or more persons jointly, they shall apply for patent jointly and each make the required oath, except as otherwise provided in this title. Inventors may apply for a patent jointly even though (1) they did not physically work together or at the same time, (2) each did not make the same type or amount of contribution, or (3) each did not make a contribution to the subject matter of every claim of the patent. 35 U.S.C. § 116 (1988). |
The statute does not spell-out the minimum threshold level of contribution that is required of an inventor, but the Federal Circuit has held that a joint inventor must have contributed “to the conception of the claimed invention.”
Although physical collaboration is not required, the Federal Circuit has also held that some level of collaboration is required. Collaboration can certainly be one-way. Thus, the Vanderbilt researchers might have some claim to inventorship rights if the Glaxo researchers had relied upon information provided by the Vanderbilt researchers. The Federal Circuit rejected that conclusion based on the lack of factual support – even though the Vanderbilt researchers did provide important material to Glaxo (in the UK), there was no evidence that the Glaxo researchers (operating in France) relied upon the material in their inventive process.
Writing in dissent, Judge Dyk argued that the proper course of action was to remand for a better decision. Judge Dyk picked up on confusion in the district court opinion that both accepted and rejected the notion that the Vanderbilt researchers contributed to the inventive process. Additionally, Judge Dyk argued that the district court’s factual conclusions were directed toward reaching a conclusion to the erroneous question of law (discussed above) and that those factual conclusions were tainted by the error in a way that requires remand.
A number of jobs have been recently posted to the Patently-O Job Board.
Patent-Law Job Outlook?:
Note – I have no justification for the 2nd order polynomial trendline that I used except that it satisfies my hope that we have hit some bottom and that things are moving up.
A number of jobs have been recently posted to the Patently-O Job Board.
Patent-Law Job Outlook?:
Note – I have no justification for the 2nd order polynomial trendline that I used except that it satisfies my hope that we have hit some bottom and that things are moving up.
Pressure Products Medical Supplies, Inc. v. Greatbatch Ltd. (Fed. Cir. 2010)
A five-judge Federal Circuit panel has narrowed the district court’s construction of the patentee’s means-plus-function claim limitations. This decision might be seen as the foil to the Federal Circuit’s recent broad interpretation of a means-plus-function element in Hearing Components v. Shure. Interestingly, Judges Lourie and Rader signed both opinions.
The Pressure Products patent covers a mechanism for inserting and removing catheters and pacemaker leads. The asserted claims include a “means for” facilitating the removal of both a hemostatic valve and a sheath from the disposed catheter. The parties agreed that this limitation should be interpreted as a means-plus-function limitation, but disagreed as to the proper scope of the limitation. Under 35 USC 112p6, a means-plus-function limitation is construed to “cover the corresponding structure, material, or acts described in the specification and equivalents thereof.” The district court judge held that the corresponding structure described in the specification used a “score line” to allow the hemostatic valve to separate. During trial (after the close of the plaintiffs case) the Judge updated its definition to include a “linear perforation; slit; slot; tab; line; severing; weakening; or tear that can be partial or complete.” The jury found infringement and awarded $1.1 million in past damages.
On appeal, the Federal Circuit reversed.
Claim Construction During Trial: The Federal Circuit first looked at the lower court’s procedure and held that the timing of claim construction is in the discretion of the lower court so long as the court works to avoid “surprise and prejudice” that could accompany a late change to the construction.
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While recognizing the potential for surprise and prejudice in a late adjustment to the meaning of claim terms, this court also acknowledges that the trial court is in the best position to prevent gamesmanship and unfair advantage during trial. Moreover, this court understands that a trial judge may learn more about the technology during the trial that necessitates some clarification of claim terms before the jury deliberates. |
Scope of the Corresponding Structure: The “score line” structure was discussed in the specification and was clearly a “corresponding structure” to the means-for element. At dispute, however, was the scope of the structure disclosed. Namely, the patent specification included a “laundry list” of prior art references and the district court used the disclosures from those references to expand the definition of a “score line” beyond the structure that was literally described in the specification. On appeal, the Federal Circuit held that approach was wrong and that “the trial court impermissibly expanded the corresponding structure of claim 1 to include structures not described in the specification.”
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Trial courts cannot look to the prior art, identified by nothing more than its title and citation in a patent, to provide corresponding structure for a means-plus-function limitation. . . . Although many of the disclosed alternatives may well be determined to be structural equivalents permitted by section 112, paragraph 6—a question of fact for the jury—these alternative methods . . . cannot be treated as the disclosed structures for the removal means. Simply mentioning prior art references in a patent does not suffice as a specification description to give the patentee outright claim to all of the structures disclosed in those references. |
“This court remands for further proceedings in light of the proper construction of the term ‘score lines.'”
Writing in Dissent, Judge Newman argued that the patentee should have been allowed to rely upon the disclosures discussed in the specification in order to identify the scope of the disclosed corresponding structure.
Inequitable Conduct: This case also includes an important procedural decision on inequitable conduct – affirming the district court’s refusal to allow the defendant to amend its answer to include an inequitable conduct defense.
MedPointe Healthcare v. Walter Kozachuk (Fed. Cir. 2010)(nonprecedential)
Kozachuk is a former employee of MedPointe’s predecessor company and as part of his employment agreement, Kozachuk had agreed to assign “any and all inventions, discoveries, or improvements made, discovered, or conceived by him during his employment.” About 18-months after leaving his job, Kozachuk began filing patent applications on clinical uses of the drug Felbamate for the treatment of neurological problems. In 2004, MedPointe sued – claiming ownership rights and breach of the employment agreement.
Settlement: In May 2008, the parties reached an agreement on the material terms of a settlement. The terms (including the transfer of patent rights to MedPoint and a small payment ($60k) to Kozachuk) were put “on the record” by the magistrate judge who was mediating the settlement negotiations. Kozachuk, however, refused to sign the final settlement agreement and instead argued that he had been inadequately represented in the negotiations. Despite the lack of a signed document, the district court agreed to enforce the settlement, ordered Kozachuk to sign the documents and hit Kozachuk with $30k in sanctions.
On appeal, the Federal Circuit affirmed. Applying New Jersey law, the court found that a settlement agreement “is a binding contract enforceable regardless whether it has been reduced to writing” and that a contract is created once the parties agree upon the “essential terms of the settlement.” The kicker here was that Kozachuk had agreed to the terms on the record.
Kozachuk’s complaints of inadequate assistance of counsel went nowhere: “In light of Kozachuk’s high level of education, his obvious familiarity with the litigation process, and his failure to express any lack of understanding except after the fact, the court did not clearly err in finding that a binding settlement agreement had been formed.”
Appellate Jurisdiction: One issue not addressed by this case is why the Federal Circuit is hearing the appeal of an employment dispute. I looked up the original complaint to find the answer: The complaint seeks to correct inventorship of the patents under 35 U.S.C. § 256. As such, the case arises under the US patent laws and therefore provides the Federal Circuit with appellate jurisdiction over the final judgment. Hunter Douglas, Inc. v. Harmonic Design, 153 F.3d 1318, 1330 (Fed. Cir. 1998).
Innovative Therapies, Inc. (ITI) v. Kinetic Concepts, Inc. (KCI) (Fed. Cir. 2010)
ITI is an upstart company formed by former KCI employees. Before launching their negative-pressure wound product (that would compete directly with KCI), ITI filed a declaratory judgment action arguing that KCI's patents were invalid. As of the time of the lawsuit, no one at KCI had seen or evaluated ITI's new product.
The district court dismissed the case for lack of subject matter jurisdiction. On appeal, the Federal Circuit affirmed – holding that no "actual controversy" existed between the parties at the time the complaint was filed.
In MedImmune v. Genentech, 549 U.S. 118 (2007), the Supreme Court broadened the scope of declaratory judgment jurisdiction and rejected the Federal Circuit's somewhat formalist test that required a reasonable apprehension of suit in order to establish jurisdiction. Rather, the Supreme Court held that the totality of the circumstances should be examined to determine the existence of "a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant relief." (quoting Maryland Casualty, 312 U.S. 271 (1941)).
Here, the DJ Plaintiff (ITI) argued that the actual controversy was evident based on three factors: (1) that ITI had obtained pre-marketing approval from the FDA based on representations that its product had the "same technological characteristics" as KCI's already approved device and that KCI new of that representation; (2) that KCI employees had indicated over the telephone that the company would react "aggressively" to competitive entry into the marketplace; and (3) that KCI has a history of using litigation to enforce its patent rights.
The Federal Circuit held that these facts were insufficient to create declaratory judgment jurisdiction. In particular, the representations to the FDA were not tied directly to KCI's patent rights and therefore did not create any actual controversy over those rights. The telephone conversations (initiated by ITI) were lacking because they were initiated by ITI (rather than by the patentee) and were directed to individuals who were not in "decision-making positions" or informed about the sub rosa purpose behind the conversations. Finally, while the patentee's enforcement history can contribute to DJ jurisdiction, that fact alone is insufficient for such jurisdiction.
Comment: The practical fight in this case is not about whether litigation will continue, but rather whether the litigation should be sited in Delaware (the choice of the alleged infringer) or in North Carolina (the choice of the patentee). Soon after ITI filed its DJ action in Delaware, KCI (the patentee) filed an infringement complaint in North Carolina. The Delaware case is out for now because the court did not have DJ Jurisdiction over the case when it was originally filed. ITI had also asked the North Carolina court to transfer its case to Delaware – that motion was denied.
Although the subsequent events (KCI's filing of a lawsuit) indicated the existence of an actual case or controversy, post-filing events cannot create jurisdiction even if the complaint is amended to encompass those events.
On the Concurring Opinions Blog, Professors Magliocca (Indiana) and Miller (Lewis & Clark) have been wondering when the Supreme Court will release its decision on patentable subject matter.
Professor Miller writes the following:
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I … did a little digging on opinions issued from the Court’s first two sittings – the one starting Oct 5, and the one starting Nov 2. Bilski was in the second of these two sittings . . . If the past is any indication, one would expect each Justice to write about 3 majority opinions from this group. Perhaps Justice Sotomayor, as a newbie, would be assigned 2. . . . The Court has issued opinions in 18 of the 26 cases from its first two sittings; thus [8] remain. Among those yet to issue, there are some that are likely to produce fireworks, such as (a) Stevens, the animal cruelty video/free speech case; (b) Buono, the religious symbol on gov’t land; (c) McGhee, the prosecutorial immunity case; and (d) Graham and Sullivan, both challenging Florida’s life-without-parole sentences for juveniles. From those two sittings, the following Justices have written the stated number of majority opinions:
I don’t know when Bilski will issue. But I’m pretty confident Justice Stevens will author the majority opinion. He is, of course, the author of Parker v. Flook and the principal dissenter in Diamond v. Diehr. |
The USPTO is seeking comments on a fee-deferral program that would allow patent applicants to delay patent application processing for 12-months before paying the full non-provisional application fee. This process could be coupled with provisional application filings – effectively providing a 24-month delay.
Provisional applications have become hugely popular with almost 150,000 being filed each year. The vast majority of provisional filers use the form to delay non-provisional filing for at least 11-months. Allowing these applicants to delay further will help relieve the immediate queue of applications pending examination. From the press release:
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The proposal would benefit applicants by giving them additional time to determine if patent protection should be sought – enabling them to defer additional fees and enabling applicants to focus efforts on commercialization during this expanded provisional period. The proposal would benefit the USPTO and the public by adding publications to the body of prior art, and by removing from the USPTO’s workload those nonprovisional applications for which the applicants have decided not to pursue examination. |
The mechanism of operation of this new option is somewhat clunky*: At the end of the 12-month provisional term, the applicant would then file a non-provisional application along with the basic filing fee (currently $330) and oath. The applicant would then receive a notice of missing parts with a 12-month-from-filing response period. To “complete” the application and put it in the examination queue, the applicant must then pay the additional filing fees ($760) along with a delay surcharge ($130?).
Director Kappos writes the following:
I thought I would let you know about a new streamlined procedure we have instituted for review of briefs filed in ex parte appeals in patent applications. Under the new procedure, the Chief Judge of the Board of Patent Appeals and Interferences (BPAI) will have the sole responsibility for determining whether appeal briefs comply with the formality requirements governing the content of these briefs. This new procedure eliminates two layers of review; previously the Patent Appeal Center and the examiner were required to review patent appeal briefs and evaluate their compliance with the formality requirements.
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Under the streamlined procedure, only the Chief Judge and his staff will conduct a compliance review of appeal briefs, and will do so at the time the appeal brief is filed. If a brief is determined not to comply with the applicable regulations, the Chief Judge will promptly send the appellant a notice and provide a time period within which an appellant can file a corrected brief. The Chief Judge will also have the sole responsibility for determining whether corrected briefs comply with the applicable regulations and addressing any inquiries and petitions regarding notices of noncompliant briefs. Because this change affects only the internal process within the USPTO, applicants should continue to follow all procedures set forth in the regulations.
We expect this new procedure to reduce appeal pendency from the filing of a notice of appeal to the docketing of the appeal. We expect a further reduction in pendency because the streamlined procedure will increase the consistency of the review, and thereby reduce the number of notices of noncompliant appeal brief and non-substantive returns from the BPAI that require appellants to file corrected appeal briefs.
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Additional details about this new procedure are outlined in a Federal Register notice publishing presently. As always, comments are welcome. In fact, this entire change is the product of IP community comments. Thanks for keeping them coming!
As part of the PTO’s efforts to streamline appeal practice, the office has (internally) announced a new procedure for reviewing appeal brief formalities. Notably, the BPAI has been given the “sole responsibility” for determining whether appeal briefs are in compliance with the formalities required by 37 CFR 41.37. The USPTO has also indicated briefs will be accepted even if they contain “minor informalities” so long as those informalities do not affect the BPAI’s decisionmaking ability.
The BPAI will review each opening brief before forwarding the brief to the examiner for consideration. Once the brief is accepted by the BPAI, neither the examiner nor the Patent Appeal Center will have any power to later reject the brief as non-compliant. The non-compliance form paragraphs are also being removed from the examiner’s OACS computing system.
In a 2007 study of the prosecution files of 720 cases on appeal, I found that a full 25% had been rejected as ‘defective’ based on formalities. [Link]. A major purpose behind this power-shift is to reduce this paperwork churning and to create more uniformity in appeal processing. This shift also allows the BPAI to collect better data on the number and types of appeals being filed.
The announcement is signed by Bob Bahr, Associate Patent Commissioner (for patent examination policy).
File Attachment: bpai_revised_procedure_20100329.pdf (217 KB)
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The chart below shows the backlog of ex party BPAI appeals (excluding reexaminations). These only include cases where appellate briefing has been completed and jurisdiction transferred from the Examiner/TC to the BPAI.
The BPAI will be holding a roundtable on April 7.
Hearing Components, Inc. v. Shure, Inc., Appeal No. 09-1364 (Fed. Cir. 2010)
This case has three interesting issues: (1) the definiteness of “terms of degree” claim elements; (2) interpreting means-plus-function claim limitations; and (3) the standard for appellate review of a jury’s non-obviousness determination. In this decision, the resolution of each of these issues favors the patentee, Hearing Components.
Terms of Degree: The patents-in-suit all relate to hearing-aide elements. Claim 1 included a long-preamble with the statement that the device is configured to be “readily installed and replaced by a user.” The district court had difficultly drawing a boundary between devices that are readily installed and those that are not readily installed and therefore found the claim indefinite and invalid. On appeal, the Federal Circuit reversed.
In Datamize, the Federal Circuit held the claim term “aesthetically pleasing” to be indefinite. In the process, however, the court noted that these seemingly loose terms of degree will not be considered indefinite if the patentee “provides some standard for measuring that degree.” In the present case, the court found several hints as to the standard for “readily installed.” First, the patentee had argued that the readily limitation helped the claim avoid prior art – thus defining a category of items that were not readily installed. Second, the patent application discussed user installation “without tools.” The Federal Circuit held that this discussion suggested another way to measure “readily.” Based on these findings, the appellate panel rejected the indefiniteness holding because – in the words of Datamize – the specification “supplies some standard for measuring the scope of the phrase.”
Means-Plus-Function Claims: The patent claimed a “means … for disposably attaching” a duct of the hearing aide to a connector. The specification included several examples, but did not include the specific arrangement of the accused device. The jury found infringement, but the district court flipped that decision in a post-verdict order. On appeal, the Federal Circuit confirmed and reinstated the jury verdict of infringement.
Means-plus-function claims often appear to be broadly written, but are limited to specific structures described in the specification and equivalents to those structures. Thus, a means-plus-function element is infringed if the accused device includes a relevant structure that performs the same function as described in a way that is at least equivalent to one described in the specification.
Here, Federal Circuit held that the jury had permissibly found that the accused product’s “interference fit” was equivalent to the “screw threads or ball-and-socket attachment” disclosed in the application.
There was evidence that the inventors knew of the potential of using an interference fit attachment but chose not to disclose it in the specification. The defendant argued that evidence of prior knowledge should limit the scope of equivalents under a doctrine akin to estoppel. Instead, the Federal Circuit held that the “known interchangeability” weighs in favor of a finding of equivalence.
Reviewing a Non-Obviousness Determination: In John Deere, the Supreme Court divided the issue of obviousness into a series of factual inquiries leading to an ultimate conclusion of whether a patent is obvious. The ultimate question of obviousness is an issue of law reviewed de novo on appeal. However, a jury’s findings regarding the question’s many underlying factual predicates are reviewed for substantial evidence. This structure is normally ignored in a jury decision because the jury is typically not asked to explain its factual predicates. Rather most juries just answer the yes/no question: “Is the claim obvious?” When unpacking the decision on appeal, the Federal Circuit gives the jury the benefit-of-the-doubt by looking for any way that the evidence presented can support the jury’s conclusion. Thus, the question on appeal boils down to whether the factual evidence presented could be sufficient to support the legal conclusion on obviousness.