August 2010

Federal Circuit Holds-Line on Patent Misuse Defense

Doctrine of Patent Misuse, Infringement, Patent, Patent Cases 2010,

By Dennis Crouch

In a split decision, an en banc Federal Circuit has held that the non-statutory equitable doctrine of patent misuse should be narrowly applied. Here, the court held that an anticompetitive agreement between companies to suppress a given technology would not constitute misuse of a patent covering an alternative technology being promoted by the companies. Thus, the patents can still be enforced. Of course, companies following this pathway could still be liable for antitrust violations.

Princo Corp. v. International Trade Commission and U.S. Philips Corp. (Fed. Cir. 2010) (en banc)

The alleged patent misuse was associated with a CD-R/RW patent-pool arrangement between Philips and Sony. The two companies chose a particular method (Raamaker) of encoding location information on the CD to serve as the standard and then allegedly suppressed another method (Lagadec). (Both methods were covered by patents held by the companies.)

Princo argued here that creation of the patent pool licensing the Raamaker method and the suppression of the Lagadec method constituted patent misuse and should render the patents undenforceable.

Patent Misuse:     

The doctrine of patent misuse is … grounded in the policy-based desire to 'prevent a patentee from using the patent to obtain market benefit beyond that which inheres in the statutory patent right.' Mallinckrodt, 976 F.2d at 704. It follows that the key inquiry under the patent misuse doctrine is whether, by imposing the condition in question, the patentee has impermissibly broadened the physical or temporal scope of the patent grant and has done so in a manner that has anticompetitive effects. B. Braun, 124 F.3d at 1426. Where the patentee has not leveraged its patent beyond the scope of rights granted by the Patent Act, misuse has not been found. See Monsanto, 363 F.3d at 1341 ("In the cases in which the restriction is reasonably within the patent grant, the patent misuse defense can never succeed."); Virginia Panel, 133 F.3d at 869 (particular practices by the patentee "did not constitute patent misuse because they did not broaden the scope of its patent, either in terms of covered subject matter or temporally"). . . .

Given that the patent grant entitles the patentee to impose a broad range of conditions in licensing the right to practice the patent, the doctrine of patent misuse "has largely been confined to a handful of specific practices by which the patentee seemed to be trying to 'extend' his patent grant beyond its statutory limits." USM Corp. v. SPS Techs., Inc., 694 F.2d 505, 510 (7th Cir. 1982).

Recognizing the narrow scope of the doctrine, we have emphasized that the defense of patent misuse is not available to a presumptive infringer simply because a patentee engages in some kind of wrongful commercial conduct, even conduct that may have anticompetitive effects. See C.R. Bard, Inc. v. M3 Sys., Inc., 157 F.3d 1340 (Fed. Cir. 1998) ("Although the defense of patent misuse . . . evolved to protect against 'wrongful' use of patents, the catalog of practices labelled 'patent misuse' does not include a general notion of 'wrongful' use."). Other courts have expressed the same view. See Kolene Corp. v. Motor City Metal Treating, Inc., 440 F.2d 77 (6th Cir. 1971) (There is no such thing as "misuse in the air. The misuse must be of the patent in suit. An antitrust offense does not necessarily amount to misuse merely because it involves patented products or products which are the subject of a patented process." (citations omitted)); McCullough Tool Co. v. Well Surveys, Inc., 395 F.2d 230 (10th Cir. 1968) (the defense of patent misuse has been allowed "only where there had been a misuse of the patent in suit"). While proof of an antitrust violation shows that the patentee has committed wrongful conduct having anticompetitive effects, that does not establish misuse of the patent in suit unless the conduct in question restricts the use of that patent and does so in one of the specific ways that have been held to be outside the otherwise broad scope of the patent grant.

On appeal, the en banc Federal Circuit held that this case does not fit with other misuse precedent. "This case presents a completely different scenario from the cases previously identified by the Supreme Court and by this court as implicating the doctrine of patent misuse." In particular, the alleged misuse was alleged agreement to suppress "an entirely different patent that was never asserted." "Even if such an agreement were shown to exist, and even if it were shown to have anticompetitive effects, a horizontal agreement restricting the availability of Sony's Lagadec patent would not constitute misuse of Philips's Raaymakers patents or any of Philips's other patents in suit."

Reduced to its simplest elements, the question in this case comes down to this: When a patentee offers to license a patent, does the patentee misuse that patent by inducing a third party not to license its separate, competitive technology?

The court answered this question with a resounding "no" – such an action "would not fall within the rationale of the patent misuse doctrine as explicated by the Supreme Court and this court." In particular, the patent-in-suit there must be a direct connection between the patents-in-suit and the alleged misconduct.

Dissent: Judge Dyk (joined by Judge Gajarsa) wrote a 32-page dissent arguing that the patent misuse doctrine should be given teeth:

Evidently the majority thinks it appropriate to emasculate the doctrine so that it will not provide a meaningful obstacle to patent enforcement. . . . Indeed, the majority goes so far as to suggest that the misuse doctrine be eliminated entirely. I read the relevant Supreme Court cases and congressional legislation as supporting a vigorous misuse defense, clearly applicable to agreements to suppress alternative technology. The majority cabins the doctrine in contravention of this Supreme Court authority. I respectfully dissent.

Guest Post: Keys to Hiring Newly-Minted Patent Lawyers

Guest Post, Law School, Patent,

by Thomas G. Field, Jr., Professor, University of New Hampshire (UNH) School of Law (formerly Franklin Pierce Law Center)

There is much ado about generalist and specialty law school rankings, but it is difficult to understand why they should make much difference in hiring new, much less experienced, patent lawyers.

Technical training figures prominently too, but that is difficult to factor in. As has been discussed on this blog, two others and I published a paper concerning the correspondence between the percentage of attorneys with formal training in computer science (our focus) or engineering and the percentage of computer-based patents issued. There we argued, as I strongly believe, that the PTO’s discrimination against computer science graduates is irrational.

The paper also implies that one needs formal training in a particular art to competently draft and prosecute applications in that art. Most patent attorneys would reject the idea. Despite co-authorship, I do too.

I regard the most important technical criteria to be attorneys’ (or agents’) capacity to be educated by inventors and, as one of our alumni put it several years ago, function as a mediator between inventors and examiners. In that regard, I recall the late Robert Shaw. Prior to coming to Pierce in the mid-1970s, where he taught claim drafting and prosecution until he retired, Bob was a full-time attorney for MIT. It’s difficult to imagine that he could have had much expertise with regard to the wide range of applications drafted and prosecuted on behalf of an incredibly sophisticated faculty. Yet there is no reason to doubt the quality of his work for people there or at other universities. I do not envy those who attempt to judge such capacity from college transcripts and unrelated work experience.

Moving from technical to legal training, I regard the most important criteria to be the capacity to identify what decision makers will find critical, spot flaws in opponents’ positions and to argue effectively for their own. Regarding potential clerks, Justice Scalia famously stated, “I’m going to be picking from the law schools that . . . admit the best and the brightest, and they may not teach very well, but you can’t make a sow’s ear out of a silk purse. If they come in the best and the brightest, they’re probably going to leave the best and the brightest, O.K.?” (as quoted by Adam Liptak, On the Bench and Off, the Eminently Quotable Justice Scalia, N.Y. TIMES, May 12, 2009, at A13. If so, what’s gained from the education? There’s also risk of loss. I was struck by the observation that, “For most of the past fifty years, attending Harvard Law School was a miserable experience for the majority of its students.” Kevin K. Washburn, Elena Kagan and the Miracle at Harvard (2010). It is difficult to see how students would be better off for such an experience — unlikely to be unique.

General ranking may be useful for identifying some of the best and the brightest. But many choose schools based on a variety of other factors including cost, effects on partners, and quality of life. It would therefore seem that indicia of drive and intelligence other than that reflected in decisions of law school admissions committees deserve consideration.

In tough economic times, hiring seems more likely to turn on the skills and knowledge candidates have, rather than what they are capable of acquiring. If so, hires may be based on program rankings. But, as I have pointed out at length in Ranking Law Schools’ Special Programs, 50 IDEA 335 (2010), all rankings are suspect, whether based on the number and fame of faculty, the number of specialty courses offered or something else. In that article, at 344, I ultimately wonder whether “anyone other than a fool would favor one candidate over another based on reputations of professors neither candidate may have seen or lists of courses neither may have taken.” You might too.

Interval Licensing v. AOL, Apple, eBay, Facebook, Google, etc.

License, Obviousness, Patent,

Interval Licensing LLC v. AOL, Apple, eBay, Facebook, Google, Netflix, Office Depot, OfficeMax, Staples, Yahoo!, and YouTube (W.D. Wash. 2010).

Microsoft co-founder Paul Allen started Interval Research in 1992. During the 1990’s, the company filed for several user-interface related patents that were primarily intended to improve a computer user's online experience. The patents focus on what I might call “lightweight” usability ideas such as a occupying the peripheral attention of a user; organizing audio/visual for display in a browser; and alerting users to items of current interest.

When Interval closed its doors, the patents were transferred to Vulcan Patents LLC (presumably another Paul Allen company) and then to Interval Licensing which remains a Paul Allen company.

PatentLawPic1133

The patents are well drafted. Of course, even excellent drafting cannot cure obviousness problems. I suspect that the litigation will focus primarily on whether these inventions were obvious back when the patents were filed? In addition to arguing in court, I expect that the defendants will also appeal to the US Patent Office — asking the agency to take a second look at the patents via reexamination.

Take claim 1 of asserted Patent No. 6,757,682 (filed in 2000) as an example.

1. A system for disseminating to a participant an indication that an item accessible by the participant via a network is of current interest, comprising:

a computer configured to

receive in real time from a source other than the participant an indication that the item is of current interest;

process the indication;

determine an intensity value to be associated with the indication and an intensity weight value, and adjusting the intensity value based on a characteristic for the item provided by the source; and

inform the participant that the item is of current interest; and

a database, associated with the computer, configured to store data relating to the item.

I don’t have any prior art on hand, but the claim sure feels obvious (in hindsight)…

Of course, the system embodied in claim 1 above represents an important core feature of services provided by all of the listed defendants. (A similar story can be told of the other asserted patents.) Thus, if the patents are valid, the damage award could be quite large.

It may be important to note that the complaint does not suggest that any of the defendants copied the invention from Paul Allen's company or that the defendants even knew about the patents before today. Of course, a patentee does not have to show copying in order to prove patent infringement and back-damages can still be available even when the infringement occurred without knowledge of the patent. (Additional punitive damages may be awarded if the infringement was willful).

It will be interesting to see how the Supreme Court’s foray into patent law over the past four-years will impact this case. I look to three important decisions:

  1. In KSR v. Teleflex, the Supreme Court raised the patentability standard of nonobviousness — making it more likely that these patents will be held invalid as obvious.
  2. In Bilski v. Kappos, the Supreme Court held that certain business method inventions are not patentable. Some of the claims in the patents-in-suit may be susceptible to a similar attack. However, most of the asserted claims appear to be tied closely to a technological implementation in a way that may avoid problems under Bilski.
  3. In EBay v. MercExchange, the Supreme Court made it more difficult for patent holding companies (such as the plaintiff here) to obtain an injunction to stop ongoing infringement. Of course, it is unlikely that Interval actually wants to stop infringement — rather, the company is looking for a large license fee.

Final point: The vast majority of patent cases settle. Here, however, all of the parties have large amounts of cash-on-hand. In addition, some of the defendants are repeat patent infringement defendants. Those factors tend to make settlement less likely.

Patently-O Bits and Bytes

Bits and Bytes, Patent

If you are a law professor teaching a general course on intellectual property, you might consider a cheap text-book alternative:

  • Franklin Pierce Professor Tom Field freely gives-away PDF versions of his 470 page book titled Fundamentals of Intellectual Property.
  • Lewis & Clark Professors Joe Miller and Lydia Loren have started their own publishing company and offer their book titled Intellectual Property Cases and Materials for a suggested fee of $30.
  • Students who want a bound-book can take the document to Kinkos with a $20 bill.
  • [This semester, I am teaching Patent Law and have assigned the casebook by Merges & Duffy. Although not cheap, that book has the lowest cost per pound of any on the market.]

Recent Patent Law Jobs:

Some Recent Patent Lawsuits:

  • Allure Home Creation Co. Inc. v. Maytex Mills Inc. (D.Del.) — Patent covers a shower-curtain hook.
  • Simonian v. Mitchell-Vance Labs (E.D.Ill.) — False marking action against maker of “ScarAway” whose product packaging lists an expired patent.
  • AGA Medical Corp. v. W.L. Gore & Associates (D.Minn) – Patent covers a device that can be inserted via a catheter for blocking leakage of an internal body organ.
  • De Beers UK Limited v. Kohls & Adwar Casting (W.D.Mo.) – Design patents cover jewelry.

Patently-O Bits and Bytes

Bits and Bytes, Patent

If you are a law professor teaching a general course on intellectual property, you might consider a cheap text-book alternative:

  • Franklin Pierce Professor Tom Field freely gives-away PDF versions of his 470 page book titled Fundamentals of Intellectual Property.
  • Lewis & Clark Professors Joe Miller and Lydia Loren have started their own publishing company and offer their book titled Intellectual Property Cases and Materials for a suggested fee of $30.
  • Students who want a bound-book can take the document to Kinkos with a $20 bill.
  • [This semester, I am teaching Patent Law and have assigned the casebook by Merges & Duffy. Although not cheap, that book has the lowest cost per pound of any on the market.]

Recent Patent Law Jobs:

Some Recent Patent Lawsuits:

  • Allure Home Creation Co. Inc. v. Maytex Mills Inc. (D.Del.) — Patent covers a shower-curtain hook.
  • Simonian v. Mitchell-Vance Labs (E.D.Ill.) — False marking action against maker of “ScarAway” whose product packaging lists an expired patent.
  • AGA Medical Corp. v. W.L. Gore & Associates (D.Minn) – Patent covers a device that can be inserted via a catheter for blocking leakage of an internal body organ.
  • De Beers UK Limited v. Kohls & Adwar Casting (W.D.Mo.) – Design patents cover jewelry.

Patent Attorneys and Agents: Years of Hands-On Technical Experience Before Focusing on Patent Law

Patent, Survey

Yesterday’s post included a cumulative frequency chart that some readers found confusing. I have replaced that chart with one showing essentially the same material in more reader-friendly format.

PatentLawPic1132

These results come from a survey of Patently-O readers conducted August 23–25.  In the survey, 626 responders self-identified as US patent attorneys and 116 self-identified as US patent agents.  Each was then asked to enter their “Years of hands-on technical experience before focusing on patent law (if none, enter 0).”  Responses ranged from 0–40 years.  Fewer than 1% left the field blank. 

[File Attachment: SurveyResults.v1.xlsx (58 KB)]

Who is Behind H.R. 5980?

Patent, Patent Legislation

H.R. 5980 is a Bill "To amend Federal law to encourage the repatriation of jobs to the United States, and for other purposes." The bill includes three major tweaks to US patent law.

  1. Ending the publication of pending applications [as discussed here].
  2. Dramatically narrowing 35 U.S.C. 102(e) so that it only applies to patents that were subject to an international patent application.
  3. Giving "priority to the examination" of applications "made by" any "institution of higher education" or any "patent holding company affiliated with such an institution.”

Other portions of the bill would create several commissions and task forces to try to figure out how to bring jobs back to the US.

The sponsor of the bill, Frank Wolf is a Republican from north-west Virginia. Co-Sponsors include Randy Forbes (Republican from south-east Virginia), Daniel Lipinski (Democrat from Chicago), Candice Miller (Republican from northern Michigan), Hal Rogers (Republican from eastern Kentucky), and Rob Wittman (Republican from eastern Virginia).

The patent amendments appear out of the blue and have no logical link to repatriation. 

Preliminary Results on Patent Law Survey.

Patent, Survey

I recently posted a survey on Patently-O titled “Why Patent Law?”. The introduction to the survey indicated that was “designed primarily for patent law professionals” and focuses on why individuals chose patent law as a career rather than working primarily in their technical areas of expertise as engineers, scientists, or developers.  This post includes some preliminary results on the demographics of the 939 survey responses that I received.  I am working on compiling responses to the lone long-form question outlined above.

The vast majority of responders self-identified as US Patent Attorneys (67%) followed by US Patent Agents (12%). 

PatentLawPic1125

The most common asserted area of technical background in my survey was electrical engineering (33%). 

PatentLawPic1126

The Clifford-Field-Cavecchi dataset (CFC) indicated a lower proportion both electrical engineering professionals and a Software/IS professionals. CFC reported on “electrical fields” and “computer fields” which should, theoretically, be broader than my “electrical engineering” and “software or information systems.” (See graph at right.) I believe that there are several explanation for my findings.  First, CFC make the assumption that an individual’s technical background is equivalent to their college major.  My survey was more flexible and allowed individuals to indicate their technical background without providing documentation from an accredited institution. Second, the CFC data is more than four-years-old. During the interim, it is likely that EE/Software experts have entered the patent law field at a greater rate than other technical experts. Finally, it may also be true that EE/Software patent professionals read Patently-O and respond to Patently-O surveys as a greater rate than do other technical experts.

Attorney and Agent Technical Experience: According to my survey, US patent agents are likely to have more technical expertise than their patent attorney counterparts.  Namely, patent agents are much more likely to hold a PhD or equivalent (38% of responding patent agents listed a PhD compared with 13% of patent attorneys) and tend have many more years of “hands-on technical experience before focusing on patent law” (patent agents indicated 10.0 years of technical experience on average compared with 4.7 years for patent attorneys; medians of 9 and 3 years respectively).  The final chart below compares patent agent and patent attorney pre-patent-law technical experience.

PatentLawPic1131

 

Guest Post: Patent Abstracts Are Not The Answer To Repatriating Jobs

Guest Post, Patent, Patent Legislation, ,

by Jeremy Kriegel of Marshall, Gerstein & Borun

In an effort to promote repatriation of jobs, H.R. 5980 was introduced on July 29, 2010. The Bill proposes replacing the 18-month publication of U.S. patent applications in their entirety with a requirement that the U.S. Patent & Trademark Office (USPTO) publish only the abstract of an application until it issues as a patent. This change would detrimentally impact the ability to monitor competitors’ pending applications (provided the full text of the applications were not otherwise still available via Public PAIR, an on-line resource provided by the USPTO that supplies free access to all patent documents exchanged between patent applicants and patent examiners upon publication of an application).

The proposed shift would potentially impact companies that have come to depend on access to published patent applications as a source of lawful competitive intelligence and freedom-to-practice planning.

With knowledge that only an application’s abstract will be made available to the public, it would likely just be a matter of time before applicants become more evasive in the drafting of patent abstracts. Even today, patent abstracts rarely provide meaningful detail as to the scope of the claims of a patent application, and are limited by USPTO regulations to 150 words or less. 37 CFR 1.72(b).

While a change to the statutory term of U.S. patents and a judicially-created “prosecution laches” defense eliminated most concerns over “submarine” patents (where an applicant would keep at least one of a chain of patent applications pending before springing an issued patent on an unsuspecting party or industry), limiting public access to only the abstract of a pending application would invite a return to such undersea tactics in patent prosecution.

To the extent publishing only the abstracts of patent applications has any potential to reduce the loss of American jobs, this protection is illusory in most situations. Many patent applications on products having significant commercial potential are filed not only in the United States, but also in foreign countries (and/or internationally under the Patent Cooperation Treaty). Most foreign countries already require publication of the entire patent application 18 months from the earliest priority filing date, so publishing only the abstract in the U.S. would merely invite interested third parties to search for foreign counterpart applications published in their entirety.

For applicants concerned about foreign competitors learning of the details of their inventions prior to issuance of their patents, U.S. patent law already provides an avenue even more secure than limiting publications of applications to abstracts as proposed in H.R. 5980. So long as an applicant agrees at the time of filing a U.S. application to forego foreign patent filings in countries that publish applications 18 months after filing, the application may include a request for non-publication. The USPTO will then maintain the entire application in secrecy until the application issues as a patent. The option of foregoing foreign filings in exchange for non-publication of a U.S. patent application was proposed to assuage concerns over the disparate impact pre-grant U.S. publication might have on small businesses. This was known as the Kaptur Amendment and was initially limited to “small entities” (i.e., entities with fewer than 500 employees, universities and independent inventors), but the small entity requirement was ultimately removed.

Alternatively, 35 U.S.C. Section 154(d) provides provisional rights to obtain a reasonable royalty for infringement occurring prior to the issuance of a patent, beginning as early as the date of publication of the application. Recovery of pre-issuance royalties requires the infringed claims ultimately issuing in a patent to be substantially identical to claims of the published application and requires actual notice to the infringer of the published patent application. If claims are substantially amended during prosecution, an applicant may, for a fee, electronically request republication of the application with the amended claims. H.R. 5980 would limit provisional rights to claims of published PCT applications that later mature into U.S. patents. Ironically, this disparity would favor foreign applicants of US patents (who typically file PCT applications prior to filing a US national phase application) over US inventors who opt not to file a PCT application. Foreign patentees in some situations would effectively have a longer term to collect patent damages than their US counterparts.

Another problem with the “Patent Protection” proposal of H.R. 5980 is that it runs contrary to commitments the United States made to Japan under the U.S.-Japan Letters of Agreement signed August 16, 1994 by then-Commerce Secretary Richard H. Brown and Japanese Ambassador Takakazu Kurizama. In exchange for U.S. commitments to publish applications 18 months after filing, expand the grounds for requesting patent reexamination, and permit increased third party participation in reexaminations, Japan agreed to eliminate dependent patent compulsory licenses, end third party pre-grant oppositions, and offer an accelerated examination procedure. It took five years for mandatory publication of applications to become law with passage of the American Inventors Protection Act of 1999.

Though mandatory publication of U.S. patent applications is barely a decade old, H.R. 5980’s bid to substitute abstracts for full publication of U.S. applications would return a cloak of secrecy to some U.S. patent applications. However, for patent applications also filed abroad, the reality is that corresponding applications filed in other countries would still be published in their entirety. Given the ubiquitous access to published foreign patent applications made possible by the Internet, publishing only patent abstracts in the U.S. would not provide a meaningful obstacle to foreign companies seeking to capitalize on U.S. ingenuity.

Jeremy R. Kriegel is a partner at Marshall, Gerstein & Borun LLP in Chicago. This article expresses the views of the author, and does not necessarily reflect the views of Marshall, Gerstein & Borun or its clients.

Attorney Versus Agent

Law Firm Practice, Patent

PatentLawPic1123As a continuation of the previous posts on patent attorney demographics, I looked at the status of registered US patent practitioners.  As the chart above demonstrates, more recently registered practitioners are less likely to be registered as patent attorneys. 

It is not surprising that a high percentage of recently registered practitioners are agents.  Many current patent agents will eventually become patent attorneys.  In addition, some practitioners never update their status even after becoming attorneys. However, I suspect that those factors do not explain the entire trend.

For those who do not know, an individual can become a patent agent upon passing the patent practitioner registration examination (patent bar exam).  To become a patent attorney, the individual must also be licensed to practice law in at least one US state.

  • Thanks to my research assistant Lawrence Higgins (2L) for helping obtain some of this data.

Survey: Why Patent Law

Patent, Survey

The following survey is designed primarily for patent law professionals and asks why you became a patent law professional rather than staying within your technical area of expertise and working as an engineer, scientist, developer, etc.?

I will post preliminary results tomorrow evening.

Backgrounds of Registered Patent Practitioners

Academic Studies, Patent

PatentLawPic1057

Tom Field and his co-authors have been kind enough to make their patent practitioner background database available to the public [Download 5mb database]. Their data is based on the registration applications that hopeful patent attorneys & agents submitted to the PTO. Using their data, I created a few interesting charts and tables on the educational background of registered patent law professionals.  

As the top chart shows, there is a very wide educational gap between practitioners in the chemical and biological fields and those in the mechincal, electrical, and computer fields. (Here, I included MD, DVM, EdD, and other similar degrees within the PhD category). Overall, 99% of the registration registered practitioners hold a bachelors degree, 29% hold a masters degree, and 15% hold a PhD or equivalent.  Although certainly not a dime-a-dozen, patent law professionals with a biological sciences PhD are more likely to have earned that degree at Harvard than at any other school.

The chart below shows the undergraduate degrees received broadly grouped according to area of technology. 

PatentLawPic1055

 Notes:

  • The PTO anonymized the information before releasing it.

Lack of “Engineering Details” in Claim Hampers NonObviousness Argument

Obviousness, Patent, Patent Cases 2010,

Martin v. Alliance Machine (Fed. Cir. 2010)

In considering secondary indicia of nonobviousness, Chief Judge Rader tends to focus on whether a nexus exists between the presented objective evidence and the invention as claimed. Here, Judge Rader applied a similar methodology in examining the differences between the prior art and the claimed invention. (Deere).

Martin's patent covers an improved machine for splitting cardboard bundles. The patented design uses top-down pneumatic pistons to hold the bundles in place. The prior art design uses bottom-up pneumatic pistons. In arguing non-obviousness, Martin's expert pointed-out that it would not work to simply flip the prior-art design on its head. Rather, any such conversion would require extensive engineering detail. Judge Rader rejected that argument — holding that the "engineering details" argument was irrelevant because the claims did not identify any of those details.

[Martin] relies on the testimony of Alliance’s own Director of Research and Development that, “from an engineering standpoint,” one cannot simply take the Pallmac design and flip it from bottom to top. That testimony, however, is irrelevant to the obviousness analysis. With one exception, discussed below, the claims themselves do not recite engineering details but merely require that the compliance structures be mounted to clamps that are “above” the conveyor belts.

After rejecting all of Martin's nonobviousness arguments, the appellate panel affirmed the lower court's invalidity holding.

Patent Attorney Backgrounds

Academic Studies, Patent

Professors Ralph Clifford, Tom Field, and Jon Cavicchi have published an interesting study on the technical backgrounds of patent attorneys and agents. After the trio submitted a FOIA request, the PTO handed-over 50,000 pages of patent bar registration applications.  Using that information, the trio created a database of registered patent attorneys and their associated degrees/schools. 

The paper makes the legitimate argument that the PTO should allow folks with a computer science degree to register — especially with the rise in the number of inventions related to computer science. “[A]n institutional bias exists within the PTO that prevents software-savvy individuals from registering with the Office.” 

The following table is excerpted from the article and shows the top-ten institutions where patent attorneys/agents received non-law degrees.

 

Rank Non-Law Degree University Count
1 Univ. Illinois  929
2 Massachusetts Inst. Tech. 908
3 Univ. Michigan 743
4 Cornell Univ. 631
5 Univ. California Berkeley 623
6 Purdue Univ. 602
7 Univ. Texas 582
8 Univ. Wisconsin 545
9 Univ. Maryland 520
10 Univ. Washington 503

Notes:

 

Patently-O Bits and Bytes

Bits and Bytes, Patent
  • Rational Ignorance at the PTO: I received many interesting comments on The Lemley-Cotropia-Sampat article yesterday.  Many of the comments pushed-back against the authors’ conclusions with reasons why applicant-cited art is more-rarely asserted in prior art rejections. Query: Do you have suggestions for going about proving/disproving their conclusion that USPTO patent examiners “effectively ignore” applicant-submitted prior art.
  • Patent Law in Print:
    • Joe Mullin at Corporate Counsel (an ALM Magazine) reports on Patent Attorney Wes Whitmeyer’s patent infringement lawsuits against Brinks Hofer, Dinsmore & Shohl; Benesch Friedlander; Edwards Angell; and WilmerHale. [Link]
    • Susan Pan and Natalya Dvorson have a useful article in IPToday on how to obtain refunds from the USPTO. [Link]
    • Abigail Rubenstein of Law360 has a brief article about the en banc request in Telcordia Tech v. Cisco. In that case, Cisco is asking the Federal Circuit hold that Judges (rather than Juries) should decide whether patent claims are invalid as indefinite.  Microsoft and GM filed a joint brief in support of the petition. [Link]
    • Sharon Oriel has published a short article in Intellectual Asset Managament (IAM) magazine describing “a three-step process to persuade a company that it can prosper and grow through investing in intellectual asset management.” [Link]
  • Recent Patent Law Jobs:
    • Amazon is looking for business-minded corporate counsel with at least 5–years of patent prosecution experience and combination of in-house and law firm experience. [Link]
    • Miller Nash law firm is looking for a patent attorney (or attorneys) with 4+ years experience and a focus on medical devices and life-science related software. [Link]

Patently-O Bits and Bytes

Bits and Bytes, Patent
  • Rational Ignorance at the PTO: I received many interesting comments on The Lemley-Cotropia-Sampat article yesterday.  Many of the comments pushed-back against the authors’ conclusions with reasons why applicant-cited art is more-rarely asserted in prior art rejections. Query: Do you have suggestions for going about proving/disproving their conclusion that USPTO patent examiners “effectively ignore” applicant-submitted prior art.
  • Patent Law in Print:
    • Joe Mullin at Corporate Counsel (an ALM Magazine) reports on Patent Attorney Wes Whitmeyer’s patent infringement lawsuits against Brinks Hofer, Dinsmore & Shohl; Benesch Friedlander; Edwards Angell; and WilmerHale. [Link]
    • Susan Pan and Natalya Dvorson have a useful article in IPToday on how to obtain refunds from the USPTO. [Link]
    • Abigail Rubenstein of Law360 has a brief article about the en banc request in Telcordia Tech v. Cisco. In that case, Cisco is asking the Federal Circuit hold that Judges (rather than Juries) should decide whether patent claims are invalid as indefinite.  Microsoft and GM filed a joint brief in support of the petition. [Link]
    • Sharon Oriel has published a short article in Intellectual Asset Managament (IAM) magazine describing “a three-step process to persuade a company that it can prosper and grow through investing in intellectual asset management.” [Link]
  • Recent Patent Law Jobs:
    • Amazon is looking for business-minded corporate counsel with at least 5–years of patent prosecution experience and combination of in-house and law firm experience. [Link]
    • Miller Nash law firm is looking for a patent attorney (or attorneys) with 4+ years experience and a focus on medical devices and life-science related software. [Link]

Transocean v. Maersk: Speeding Up Deepsea Drilling

Enablement, Infringement, Obviousness, Patent, ,
By Jason Rantanen

Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc. (Fed. Cir. 2010)
Panel: Gajarsa, Mayer, Moore (author)

Drilling rigTransocean brought suit against Maersk for infringement of three patents relating to an improved apparatus for offshore drilling.  Offshore drilling involves lowering a variety of equipment, including the drill bit, a series of long pipes, and a blow-out-preventor, to the ocean floor in order to drill and stabilize a borehole that reaches a subterranean oil reservoir.  These components are moved by a derrick (the tower on the picture to the right), which is equipped with a station that raises and lowers them to the ocean floor.  To begin the drilling process, the rig lowers the drill bit to the ocean floor, adding sections of pipe until the bit reaches the floor.  Periodically as the drill descends into the seabed, it must be brought back up to the surface so that casings can be inserted into the borehole.  Conventional rigs utilized a derrick with only a single station for performing these steps, thus requiring that they be performed sequentially – a time consuming process. 

The patents-in-suit describe a derrick that includes two stations – a main advancing station and an auxiliary advancing station – that can each assemble the strings of drilling materials and lower them to the ocean floor.  According to the patent, this "dual-activity" rig can significantly decrease the time required to complete a borehole.  The accused infringer, Maersk, contracted with a U.S. company to build a rig with two stations for use in the Gulf of Mexico.  However, prior to delivery of the rig, Maersk implemented a modification that, it argued, precluded Transocean from claiming infringement.  It also argued that the claims were invalid.

The district court granted summary judgment in favor of Maersk, holding that the asserted claims were obvious and not enabled.  The court further ruled that Maersk's activities did not constitute either an offer for sale or a sale within the United States.  Transocean appealed these rulings, along with the district court's grant of summary judgment of collateral estoppel and no willful infringement.

Obviousness
The Federal Circuit's obviousness ruling is notable because, although it found that the references cited by Maersk created a prima facie case of obviousness, it concluded that the district court had erred by ignoring Transocean's significant objective evidence of nonobviousness.  This included evidence of industry skepticism about a dual drill string approach, industry praise for its dual activity rig, copying, and commercial success, in that its dual activity rigs commanded a higher licensing premium then standard rigs.  Although Maersk presented counter evidence, the Federal Circuit concluded that it was improper to resolve these disputes on summary judgment. 

Enablement
The Federal Circuit also reversed the grant of summary judgment of lack of enablement, finding that factual issues precluded such a ruling.  In particular, it noted that while the patent must enable one of ordinary skill in the art to practice the claimed invention without undue experimentation, it does not need to enable the most optimized configuration (unless it is an explicit part of the claims). 

Infringement
The district court's noninfringement ruling did not rest on a comparison of the accused device to the claim, but rather on a conclusion that there was no offer for sale or sale within the United States.  Although the contract at issue was between two U.S. companies, and specified an "Operating Area" for the rig that was in U.S. territorial waters, it was negotiated and signed outside of the United States.

The Federal Circuit disagreed that these activities fell outside the scope of 35 U.S.C. 271(a).  With respect to the "offer for sale" provision, after reviewing the legislative history of this language, analyzing its literal text, and considering the policy implications, the court concluded that it covered a contract between two U.S. companies for performance in the U.S., regardless of whether it was negotiated or signed within the U.S.  Likewise, the court concluded that, because the contract was for the sale of a patented invention with delivery and performance in the U.S., it constituted a sale for purposes of 271(a) as  a matter of law.

Note: Although the court used the term "patented invention," it was careful to note that there remained a dispute over whether the rig described in the contract actually infringed the patents-in-suit.

The Federal Circuit did, however, affirm the district court's ruling that Transocean was collaterally estopped from arguing that the rig Maersk ultimately delivered infringed the patents.  In another litigation, Transocean had obtained by an injunction requiring the defendant GlobalStantaFe Corp. ("GSF") to make a particular modification to its rig in order to avoid infringing the patents-in-suit.  Prior to delivering the rig to the United States, Maersk had learned about this injunction and made the relevant modification.  The Federal Circuit concluded that the ruling in the GSF litigation estopped Transocean from arguing that rigs with the modification infringed its patents.

The panel also affirmed the district court's ruling of no willful infringement, concluding that Maersk's activities were insufficient to create an objectively high risk of infringement.

Examiners Ignore Applicant-Submitted Prior Art

Inequitable Conduct, Patent, Patent Applications, Prior Art,

Professors Mark Lemley, Chris Cotropia, and Bhaven Sampat recently released a draft of their new article titled “Do Applicant Patent Citations Matter? Implications for the Presumption of Validity.” [Download Here.]

For the article, the trio analyzed the file histories of 1,500+ utility patents issued in 2007 and compared references used in office action rejections with the list of references cited on the patent cover-pages.  The objective was to figure-out the role of applicant-cited prior-art in the examination process.

Findings: Patent examiners rarely rely on applicant-submitted prior-art when making rejections.  Only 13% of the prior art used in office action rejections was applicant-submitted (despite the fact that 74% of cited references are applicant-submitted). Generally, the study found that examiners “effectively ignored” applicant-submitted prior art regardless of how few or how many references were cited; regardless of the timing of the IDS filing; and regardless of whether the submission included an EPO search reports identifying the references as “X-references.”

Implications: The authors suggest several implications of their findings: (1) That it likely does not make sense to find inequitable conduct when an applicant withholds prior art (since the art would not have been used in a rejection anyway); (2) That the presumption of validity associated with patents may be too strong; and (3) That studies based on patent citations likely lack merit.

Notes: I have privately e-mailed Professor Lemley with several comments on the article. Patent prosecutors will not likely be surprised that US examiners tend to rely on their own search results. However, I was surprised at the extent to which they found that this occurs.  As a matter of patent office policy, I would think that some minor changes could alter these results. For instance, examiners should be given a tool for performing text-searches that are limited to submitted (and identified) prior art references.  The office may also want to educate examiners on how to read European search/examination reports.

There are several rational reasons for examiners to cite their own prior art. Because of the backlog, PCTs, and provisional applications, US examination often begins several years after the application was originally filed.  During that interim, many references become available that were not known at filing.  Thus, it is not surprising that applicants rarely cite 102(e) prior art, but examiners cite loads of it.  There is some reason to think that this “newer” prior art is probably better because of technological developments.  It may also be true that the applicant and examiner references are cited for different purposes — namely, applicants cite references that are generally relevant to the invention while examiners are looking for references that teach each particular element in the filed claims.  A third issue is that applicants tend to modify their claims during prosecution. That modification may make their originally cited art less relevant. 

In the words of Lawrence Solum: Download it while its hot.

Construing the “Function” of a Means-Plus-Function Claim Element

Claim Construction, Claim Drafting Tips, Means Plus Function, Patent, Patent Cases 2010,

Gregory Baran v. Medical Device Technologies (Fed. Cir. 2010)

Dr. Baran sued MDTech for infringing his patents covering automated biopsy instruments. Soon-to-be Federal Circuit Judge Kathleen O’Malley over-saw the district court case. After construing several disputed claims, Judge O’Malley ordered summary judgment of non-infringement. On appeal, the Federal Circuit affirmed.

Means-Plus-Function: I’ll focus on an interesting question raised regarding Baran’s means-plus-function (MPF) limitation. The limitation reads as follows: a “release means for retaining the guide in the charged position.” 

35 USC 112 p6 provides for MPF claim elements expressed “as a means or step for performing a specified function.”  The statute calls for the limitation to be “construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.”  Federal Circuit precedent has logically added that the statutory “corresponding structure” are structures that perform the claimed function.

What is the Claimed Function?: Here, the Federal Circuit was asked to construe Baran’s MPF element to identify the claimed function.  MDTech argued that the claimed “release means for retaining” required a structure that exhibited both a releasing function and a retaining function.  Dr. Baran argued that the claimed function was only that of retaining.  On appeal, the Federal Circuit agreed with the lower court that the means-preamble “release” added a functional limitation to the claim element.

[T]he claim language recites both a release function and a retention function. Dr. Baran’s argument regarding the placement of the term “release” is unavailing. The relevant inquiry is whether the term at issue is purely functional. See Signtech USA, Ltd. v. Vutek, Inc., 174 F.3d 1352, 1356 (Fed. Cir. 1999) (construing “ink delivery means” to be equivalent to “means for ink delivery” because “ink delivery” was purely functional language); Al-Site Corp. v. VSI Int’l, Inc., 174 F.3d 1308, 1318 (Fed. Cir. 1999) (“[W]hen it is apparent that the element invokes purely functional terms . . . the claim element may be a means-plus-function element despite the lack of express means-plus-function language.”). In the context of the ’797 patent, the term “release” is not an idle description but a vital function to be performed by the means-plus-function element. The patent does not recite a biopsy instrument that retains indefinitely without release; rather, the contemplated function is to retain for the express purpose of producing a spring-loaded release on demand. The claim language ties both functions to the same means-plus-function element, so it is appropriate that the element be construed accordingly.

Although it is difficult to take-away lessons from claim construction decisions, a potential best-practices approach to drafting MPF claims may be to eliminate any adjectives tied directly to the “means.”  Of course, my best practice suggestion is intended for those times when you want to draft MPF claims with clarity.

Adams Respiratory Therapeutics v. Perrigo – construction of pharmacokinetic claim terms

Claim Construction, Doctrine of Equivalents, Patent, Patent Cases 2010, Rantanen,

Adams Respiratory Therapeutics, Inc. v. Perrigo Company (Fed. Cir., August 5, 2010)
Panel: Linn, Moore (author), Friedman

By Jason Rantanen

Adams holds patent number 5,372,252, which covers an extended release formulation containing guaifenesin (an expectorant used to thin, loosen, and help expel mucus that causes congestion).  Perigo sought FDA approval for a generic version of Adams' product, Mucinex®.  After construing the claims, the district court granted summary judgment of noninfringement.  Adams appealed that decision.

The claim terms in dispute related to pharmacokinetic parameters.  These parameters are used to characterize the rate and extent of absorption of the active pharmaceutical ingredient ("API").  The primary term at issue, Cmax, indicates the maximum concentration of the API following dosing.

"Equivalent Cmax"
The parties' main dispute was over the meaning of the term "equivalent" in the context of "provides a Cmax in a human subject equivalent to the Cmax obtained when the first of three doses of a standard immediate release formulation having one third the amount of guaifenesin is dosed."  For purposes of FDA approval, a formulation is considered to be bioequivalent if, among other things, its Cmax is within 80% to 125% of the value with which it is being compared at a 90% confidence interval. The district court agreed with Perrigo that "equivalent" should be construed to mean equivalent under the FDA bioequivalence guidelines.

On appeal, Adams challenged the requirement of a 90% confidence interval, arguing that it makes sense when seeking FDA approval, but not when proving infringement. 

The Federal Circuit agreed with Adams.  In doing so, it rejected Perrigo's argument that the inventors had expressly defined "equivalent" as te FDA's bioequivalence guidelines.  Rather, the court construed Adams' reference to the FDA guidelines as referring specifically to the 80-125% range, not to the requirement of a 90% confidence interval.  According to the court:

Requiring a 90% confidence interval would inappropriately raise the bar for establishing infringement.  Adams must show that it is more likely than not that Perrigo's ANDA product will have a Cmax within the 980-125% range. Adams is not required to show that Perrigo's product will meet this requirement 9 times out of 10.

Slip Op. at 8.

Comment: This interpretation opens up a box of statistical worms, and I suspect that down the line the court may regret its venture into probability theory.  For the time being, however, it gives parties useful language to quote when attempting to prove infringement (and perhaps invalidity) via clinical results. 

A ≈ B ≈ C therefore A ≈ C
Adams also appealed the district court's ruling that it  impermissibly compared the accused product to Mucinex.  Adams' argument was that because the accused product was bioequivalent to Mucinex, and Mucinex was bioequivalent to a standard immediate release ("IR") product, then the accused product had a Cmax equivalent to the IR product. 

The Federal Circuit agreed that, under the circumstances of this case, Adams' argument was sufficient to preclude summary judgment of noninfringement.  The court cautioned, however, that "[i]f Adams had relied on the mere fact of bioequivalence of the two sets of products (and no PK data or Cmax values, that would not be enough to survive summary judgment."  Slip Op. at 11.  Here, however, Adams presented actual PK data and Cmax values, which a fact-finder could look at when assessing equivalence between the accused product and an IR product. 

"Bioavailable"
The court also addressed the meaning of the term "bioavailable" in the context of the '252 patent.  The dispute hinged on whether the phrase "fully bioavailable in the subject's stomach" meant "both release and availability in the stomach for absorption, wherever that absorption might occur." 

Perrigo argued that because "bioavailable" is commonly understood to mean absorption, thus requiring the guaifenesin to be absorbed in the stomach.  Because guaifenesin is primarily absorbed in the small intestine, this construction would preclude a finding of infringement.

The court rejected the proposed construction as inconsistent with the specification: "Although the specification never expressly defines bioavailable, it uses the term when describing the availability of the drug for absorption, not the actual absorption."  Slip Op. at 14.  The court further noted that Perrigo's construction would exclude the preferred embodiment, which "is rarely, if ever, correct and would require highly persuasive evidentiary support."

Doctrine of Equivalents
Finally, Adams argued that the district court erroneously precluded it from relying on the doctrine of equivalents with respect to a dependant claim requiring that the total amount of guaifenesin released in to the patient be at least 3500 hr*ng/mL.  The panel concluded that the use of a numerical limit did not preclude Adams from arguing that an amount of 3494.38 hr*ng/mL was equivalent to 3500 hr*ng/mL.