September 2010

Challenging the Clear and Convincing Standard of Proof for Invalidating Patents in Court

Microsoft Corp. v. i4i Limited Partnership (on petition for certiorari 2010)

By Dennis Crouch

In 2009, an Eastern District of Texas jury awarded $200 million to i4i after finding that Microsoft willfully infringed the Canadian company’s patent. Judge Davis subsequently added-on $40 million of punitive damages for willful infringement.  The judge also issued an injunction ordering Microsoft to stop selling Word products with the capability of using “custom XML.” That injunction was stayed by the Federal Circuit pending appeal.  On appeal, the Federal Circuit affirmed the lower court’s findings of validity, willful infringement, enhanced damages, and permanent injunctive relief. Despite the injunction, Microsoft continues to sell its software based on a “patch” that apparently prevents the use of custom XML in Word.

Meanwhile, the USPTO conducted a reexamination of the i4i patent and confirmed that the claims at issue were properly patentable.   However, the reexamination did not consider what Microsoft's (now) argues is its key invalidity argument.  That invalidity argument is based on a prior offer-for-sale, and offers-for-sale are excluded from consideration during reexaminations.  The prior offer-for-sale was likewise not considered during the original prosecution of the i4i patent.

This summer, Microsoft petitioned the Supreme Court to take a fresh look at the case —  specifically asking the Court to reject the Federal Circuit's requirement that invalidity be proven with “clear and convincing evidence” when the invalidity argument is one that was not specifically considered by the Patent Office when granting the patent.  Microsoft raised the following  question:

The Patent Act provides that “[a] patent shall be presumed valid” and that “[t]he burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity.” 35 U.S.C. § 282.The Federal Circuit held below that Microsoft was required to prove its defense of invalidity under 35 U.S.C. § 102(b) by “clear and convincing evidence,” even though the prior art on which the invalidity defense rests was not considered by the Patent and Trademark Office prior to the issuance of the asserted patent. The question presented is:

Whether the court of appeals erred in holding that Microsoft’s invalidity defense must be proved by clear and convincing evidence.

This petition is one similar to that raised by Microsoft in z4. That petition was withdrawn when the parties settled

Eleven parties have filed amicus briefs supporting the petition for certiorari.  Microsoft's counsel makes the point that the companies signing in their own name “employ more than three million people and the publicly-traded companies have a combined market capitalization of more than $1.2 trillion.”  Briefs opposing the petition as well as i4i's opposition appear to be due on October 29, 2010.

Chief Judge Roberts has recused himself from the case.

A review of the briefs follow.  Many of the briefs cover similar material and I have attempted to point out some of the differences. Of course, all of these briefs listed argue that the current evidentiary standard is too-high.

* * * * *

Briefs in support of the Petition:

36 Professors led by Mark Lemley:  The professors suggest that the clear and convincing standard does not make sense based on the known bureaucratic difficulties of the USPTO and the result that many issued patents would not survive a serious Section 103(a) analysis. The professors also write that the Supreme Court offered a signal in KSR that the Federal Circuit should reconsider its standard, but that the Federal Circuit has refused to do so.

Brief by Acushnet, SAP, and Others: James Dabney and John Duffy collaborated to examine the history of invalidity defenses. The brief does an especially good job of spelling out different aspects of an invalidity argument that may need a higher standard of proof.  Thus, Acushnet seemingly argues that uncorroborated oral testimony should still be excluded even if the general standard of proof was lowered.  This is one of the more nuanced briefs.

Teva, Cisco, and the Generic Pharma Association: The current standard creates an incentive for patent applicants to conceal material information from the USPTO. An issued patent is valuable — even if it would eventually be found invalid. The cost of invalidating a patent is so high that a patentee can usually obtain significant settlements even for a patent that should have never issued.

Google, Verizon, Dell, HP, Wal-Mart: A preponderance-of-the-evidence is the default burden of proof in civil cases.  The Federal Circuit has no legal justification for its clear-and-convincing standard that unduly burdens accused infringers.  The USPTO normal examination of patents is insufficient to warrant a high level of deference.

Yahoo!: “In requiring clear and convincing proof of facts bearing on patent invalidity, the Federal Circuit’s rule conflicts with this Court’s teaching that a heightened evidentiary standard should not apply where a statute does not prescribe the heightened standard.”

Intel: We have “a thicket of invalid patents that stifles competition and impedes further innovation.”

Securities Industry and Financial Markets Association:  “The Federal Circuit’s stance is contrary to the guidance of this Court as well as to the standards applied by the regional circuits before 1982.”  The flood of bad patents is especially troublesome in the area of business methods and financial software. New transparency laws make it more likely that these patents will be enforced.

Facebook, Netflix, et al.: An important goal of the patent system is to encourage innovation without disrupting other-innovation through mistaken government “grants of monopolies.” To harmonize with the reexamination statute, court's should at least lower the threshold for proving invalidity once a substantial new question of patentability is established.  (I wonder if Facebook's loose use of the “monopoly” term here will come back to haunt them.).

EFF et al.: Giving value to illegitimate patents creates perverse incentives.  These problems are particularly concerning in the software and internet realms for several reasons, including that they impede alternative innovation models such as FOSS.  In addition, the clear and convincing standard is a non-statutory extension of the law.

Apple: Apple argues that the current system makes it too difficult and costly to obtain a judicial decision that a patent is invalid. “”The clear and convincing standard shields a growing number of poor quality patents from the truthseeking function of our adversarial system.”

CTIA –  The Wireless Association: The clear and convincing standard makes a difference in litigation — making it much more likely that a patent will survive validity attacks.  This reality has created practical problems in dealing with holders of low-quality patents who seek large damage awards.




Patently-O Bits and Bytes

  • USPTO Technical Training for Examiners: The USPTO is looking for folks to provide free scientific & technical training to examiners. The program does not allow guest lecturers to discuss their own pending applications or provide advice on the patentability of any particular claims. [Participate Here]
  • Top-25: IP Reporter Joe Mullin and his crew have created a list of "The 25 Most Influential People in IP." The list includes Professors Lemley & Duffy; PTO Director Kappos; Judges Rader, Michel, & Ward; Justice Kennedy, Senator Leahy; Bob Armitage (Lilly); John Amster (RPX, son of Mort Amster); and Chip Lutton (Apple).
  • London Conference: International Patent Litigation 2010 — IBC Legal is holding a conference on International Patent Litigation 2010 in London on December 6th-7th. Use code KW8093PO to get a 10% discount.
  • Reexaminations: In 1998, an anonymous requester filed a request for ex parte reexamination of U.S. Patent No. 5,583,216 owned by Takeda Pharmaceuticals. Earlier this week (and after 12-years in-process) the USPTO issued a reexamination certificate confirming that the original claims are patentable. Hal Wegner handled the reexamination for Takeda, including multiple appeals to Federal Court. The average reexamination certificate in FY10 was issued about 2.5 years after the reexamination request was filed.

Patently-O Bits and Bytes

  • USPTO Technical Training for Examiners: The USPTO is looking for folks to provide free scientific & technical training to examiners. The program does not allow guest lecturers to discuss their own pending applications or provide advice on the patentability of any particular claims. [Participate Here]
  • Top-25: IP Reporter Joe Mullin and his crew have created a list of "The 25 Most Influential People in IP." The list includes Professors Lemley & Duffy; PTO Director Kappos; Judges Rader, Michel, & Ward; Justice Kennedy, Senator Leahy; Bob Armitage (Lilly); John Amster (RPX, son of Mort Amster); and Chip Lutton (Apple).
  • London Conference: International Patent Litigation 2010 — IBC Legal is holding a conference on International Patent Litigation 2010 in London on December 6th-7th. Use code KW8093PO to get a 10% discount.
  • Reexaminations: In 1998, an anonymous requester filed a request for ex parte reexamination of U.S. Patent No. 5,583,216 owned by Takeda Pharmaceuticals. Earlier this week (and after 12-years in-process) the USPTO issued a reexamination certificate confirming that the original claims are patentable. Hal Wegner handled the reexamination for Takeda, including multiple appeals to Federal Court. The average reexamination certificate in FY10 was issued about 2.5 years after the reexamination request was filed.

Patent Term Adjustments – Accounting for Rejections Withdrawn after Appeal-Brief Filings

The next Patent-Term-Adjustment (PTA) challenge appears to be simmering.

The ordinary term of a patent is twenty-years from the original patent application filing date. The first several years of that term are generally worthless because they are spent prosecuting the application. The Patent Act provides for a patent term adjustment in cases where the patent prosecution process is unduly slow. With the current USPTO backlog, about 80% of issued patent receive some term adjustment. The average PTA for recently issued patents is just shy of two years. Thus, any discussion of the US twenty-year patent term must consider the real impact of PTA. In Wyeth v. Kappos, 591 F.3d 1364 (Fed. Cir. 2010), the Federal Circuit held that the USPTO had been substantially under-calculating the PTO due to patentees. That change boosted the average calculated PTA by about six-months.

Now, a new PTA challenge appears to be brewing in relation the dramatic increase in the number of appeals to the Board of Patent Appeals & Interferences (BPAI). There is typically a fairly long delay between (1) the point that a patent applicant files a notice of appeal and (2) the point that the appeal is docketed at the BPAI. That delay is due to a lengthy briefing and review period. The patent examiner maintains control over the case during that entire briefing period. It turns out that the majority of appeals never actually reach the BPAI. Rather, the most common occurrence is that at some point during the briefing-period the patent examiner withdraws the appealed rejection and subsequently either issues (1) a notice of allowance or else (2) a new rejection.

The brewing patent term adjustment issue involves how to account for the prosecution delay when a patent applicant appeals a rejection that is later withdrawn prior to a BPAI decision . The delay from notice-to-appeal to withdrawal-of-rejection is often around eight months.

PTA calculations are somewhat complex. 35 U.S.C. 154(b)(1) divides the "patent term guarantee" into three parts: (A) adjustments for delayed USPTO office responses; (B) adjustments for application pendency of more than three years; and (C) adjustments for delays due to appeals, interferences, and secrecy orders. Each Part considers aspects of appeals to the BPAI: Part (A) accounts for any USPTO delay that is more than four-months in responding to "an appeal taken under section 134" or to a decision by the BPAI where allowable claims remain; Part (B) states that the three-year pendency guarantee does not include "any time consumed by appellate review by the Board of Patent Appeals and Interferences or by a Federal court;" while Part (C) accounts for time in appellate review, but only if "the patent was issued under a decision in the review reversing an adverse determination of patentability."

In recent papers, the USPTO petitions office has rejected any PTA for the situation discussed above – where the applicant files a notice of appeal and appeal brief but then the examiner withdraws the rejection, so long as the withdrawal occurs within four-months of the appeal brief filing date. Running through the three-parts, the PTO argues that: Part (A) does not apply because the response to the appeal occurred within four months of the appeal brief. (37 U.S.C. §1.703 specifically interprets "appeal taken" to mean filing of the appeal brief rather than notice of appeal.) Part (B) does not apply because the USPTO interprets every day subsequent to the notice of appeal as being "consumed by appellate review." Finally, Part (C) does not apply because the board did not reach a decision.

Wrong Interpretation: The PTO's interpretation of the statute is not clearly right and is probably wrong because of the inconsistency in how the Office interprets the timing of BPAI review and because the current interpretation frustrates the "guarantees" provided in the statute. In particular, for Part (A) the USPTO states that an appeal is "taken" (and PTA counting-started) only after the applicant files the appeal brief while for Part (B) the USPTO states that time is being consumed by appellate review (and PTA counting-delayed) as soon as a notice of appeal is filed. The better interpretation is that "appellate review by the Board" for Part (B) does not begin until after the examiner answer. Certainly, until that point, the case-file remains under the examiner's control and not under review by the Board.

Trademark Rights for Sound Recordings

Carl Oppedahl lost his case to register the mark “”  However, that setback did not dissuade him from continuing to push against trademark law limitations. 

Recently, the USPTO issued a trademark registration certificate for his “sensory mark.” The mark consists of a sixteen-second musical introduction that Oppedahl uses for his recorded lectures on patent law practice. 

During the trademark prosecution, the USPTO examining attorney initially suggested that "due to the length of the proposed mark, consumers may consider the sound to be a mere entertaining prelude to the sound recording, more suitable as a copyrightable work than as a trademarkable source indicator."  Oppedahl responded by pointing-out that the PTO had registered the THX sound recording [THX.MP3] which is apparently 25–seconds in length as registered.  I recently (and unsuccessfully) attempted to use a similar argument when pulled-over for speeding.  Apparently, I have no right to speed just because others speed without getting caught. 

The USPTO has registered a number of sound marks, including the NBC chimes in 1972.  Harley Davidson eventually withdrew its application to register a mark on the sound made by the roar of its V-Twin engine.  


Guest Post: An Interesting Preview of Myriad?

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

The Myriad case from the Southern District of New York, involving patent eligibility of DNA isolates derived from naturally occurring DNA, drew a great deal of attention. The court basically held such isolates ineligible for patent coverage as being too similar to the natural substances, and hence barred by the product-of-nature case law. In the district court Myriad drew twenty-three amici briefs and a great deal of press attention. It is now on appeal at the Federal Circuit, where the first brief is due to be filed October 22. However, in a little-noticed partial dissenting opinion in another case, Circuit Judge Timothy Dyk has given a preview of his likely views on this important question.

The appellate case was Intervet Inc. v. Merial Ltd., decided by a Federal Circuit panel on August 4. The case involved DNA sequences encoding viruses harmful to pigs. According to the patent involved, knowledge of such sequences facilitates detection methods and production of vaccines against the harmful viruses. The patent specification gave full-length DNA sequences for five strains of these types of viruses, and a sequence for a similar but harmless pig virus for comparison purposes. The issues raised below and on appeal were: (i) whether the district court’s constructions of certain claim terms were correct; and (ii) whether a narrowing amendment made in the PTO while a claim was under prior art rejection foreclosed all access to the doctrine of equivalents for the territory between the original language and the amended language or left some of it open. No statutory subject matter issue was raised below or in the appeal.

The Intervet panel majority, consisting of Judges Prost and Bryson, decided those issues largely in favor of the patentee, Merial. Judge Dyk issued an opinion concurring in part and dissenting in part on the appealed questions. However, he also took the occasion to caution that the court’s decision in the case did not mean the court was acquiescing in the patent-eligibility of DNA, even in isolate form: “I write separately primarily to make clear that in construing the claims, we are not deciding that the claims as construed are limited to patentable subject matter.” He proceeded to address the main issue pending in Myriad, namely, whether isolates of DNA similar to DNA found in natural sources like humans or animals are eligible for patenting, or whether they run afoul of the Supreme Court’s pronouncements about products of nature in cases such as Funk Bros., Chakrabarty, and the recent Bilski decision. Judge Dyk indicated he did not think claiming the DNA in its isolated form was sufficient to distinguish it, for eligibility purposes, from the naturally occurring substance. He read the Supreme Court cases to require subject matter that is “qualitatively different” from the naturally occurring substance, and said it was “far from clear” that DNA isolates as claimed here met that test.[8] Perhaps foreshadowing his position in Myriad, he stated:  

The mere fact that such a DNA molecule does not occur in isolated form in nature does not, by itself, answer the question. It would be difficult to argue, for instance, that one could patent the leaves of a plant merely because the leaves do not occur in nature in their isolated form.

The impact of Judge Dyk’s views is difficult to predict. His is certainly an important judicial voice. However, he may not be on the panel drawn to hear the Myriad appeal, and the case may never be heard en banc. Moreover, these might not be Judge Dyk’s final positions on the issues. Only time will tell how this important case plays out. 

* * * * *

[1] Association for Molecular Pathology v. United States Patent & Trademark Office, 2010 U.S. Dist. LEXIS 35418 (S.D.N.Y. April 2, 2010). Myriad Genetics was a co-defendant and co-owner of at least one of the patents in this declaratory action and exclusive licensee under others, hence Myriad has become the popular name of the case.

[2] 2010 WL 3064311 (Fed. Cir. 2010).

[3] See U.S. Patent 6,368,601, col. 1, lines 6-10.

[4] Id. at *9.

[5] Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948).
[6] Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980). 

[7] Bilski v. Kappos, 130 S.Ct. 3218 (2010).

[8] Intervet, 2010 WL 3064311 at *11.

[9] Id.

Written Description, Claim Scope, and Showing Possession of Hidden Embodiments

PatentLawImage001Laryngeal Mask Co. v. Ambu AS (Fed. Cir. 2010)

The district court rejected LMA’s patent on summary judgment — holding that the claims covering a laryngeal mask device were invalid for lack of written description.

The written description issues here are similar to those presented in Liebel-Flarsheim and Lizard Tech.  The patented invention included both (1) a “cuff” with a “thicker and stiffer” region and (2) a “backplate.”  The described embodiments all showed the thick-stiff region of the cuff connected to the backplate,  but the accused device’s cuff-backplate connection was in a different location. The claims themselves did not expressly limit the connection-site with reference to the thick-stiff region and therefore arguably covered the accused device.  Given that broad construction of the claims (as requested by the patentee), the district court held the patent invalid on written description grounds because the patent document failed to describe or show possession of the invention as embodied by the accused device.

On appeal, the Federal Circuit panel of Chief Judge Rader, Judge Lourie, and Judge Moore rejected the district court’s findings — holding instead that the factual question of written description should be left for the jury in this case. 

Rather than focusing on affirmative evidence of possession, the Federal Circuit highlighted that nothing in the specification suggested that that design of the connection between the cuff and backplate was important or necessary to the invention.

“We agree with LMA that one of ordinary skill in the art could read these disclosures as providing for a cuff reinforcement in the distal region that need not be connected to the backplate. In addition, we agree with LMA that one of ordinary skill in the art could read the Cuff Wall Thickening Passage as disclosing a thickened cuff portion that need not be connected to the backplate.”

Because those factual conclusions raised issues of material fact, the appellate panel reversed the summary judgment holding and remanded.

The Court’s approach implicitly presumes that the asserted patent satisfies the written description requirement and then looks to see whether the evidence is sufficient to overcome that presumption. That method of analysis makes sense based on the procedural setup of the case: Namely, (1) clear and convincing evidence is required to prove that the patent lacks written description; (2) the decision being reviewed was one of summary judgment; and (3) written description is a question of fact.


  • The court also reversed a claim construction holding that had led to summary judgment of non-infringement.
  • The asserted claims were all added during prosecution. The original claims required that the backplate be “hermetically bonded to a periphery of the main-cuff” and the new claims have a seemingly broader requirement that the backplate be “attached” to the cuff.  The original claim appears broad enough to cover the link as embodied in the accused device.



Stays Pending Appeal

August Technology Corp. v. Camtek (Fed. Cir. 2010) (non-precedential order)

A jury ruled that Camtek's semiconductor wafer inspection system infringed August's patent rights. The district court then issued a permanent injunction ordering the adjudged infringer to refrain from making, using, selling or offering-for-sell the infringing device. The court also ordered that Camtek not communicate with third parties located in the US for the purposes of offering to sell the device.

Along with its appeal on the merits, Camtek filed an emergency motion to stay the injunctive relief until the appeal is resolved. 

Under Federal Circuit law, the court will stay injunctive relief if either (1) the moving party shows a substantial likelihood that the injunction will be lifted as part of the merits decision; or (2) the moving party presents a strong case on the merits and the relative harms associated with the stay favor the moving party.  

Writing for the panel, Judge Lourie denied the stay — writing only that Camtek had not “met its burden.” 

Guest Post: Open Season on Copyright Infringement Claims? All Hail, or Hate, the “Troll”?

By Robert W. Zelnick, McDermott Will & Emery LLP

Is it me, or has there been a noticeable uptick in publicity about copyright infringement claims in 2010? There is the prolific new so-called "copyright troll," Righthaven LLC, which has sued more than 120 parties on behalf of its sole newspaper client, the Las Vegas Journal-Review (including against some high-profile defendants, such as politician Sharron Angle). The Fox network has been defending against claims that it violated a plaintiff's copyright when it ran footage of Bernard Madoff, and now the Fox network (in an unrelated claim) is suing politician Robin Carnahan for alleged unauthorized use of Fox clip in a political ad. Some blame the poor economy, some blame the lawyers, some blame a heated election season. Maybe it is all of those reasons, or none of those. But at the end of the day, it doesn't appear that anything has really changed in the substantive copyright law.

Although the nuances of copyright law can be sometimes challenging to understand and interpret, at its heart copyright law stands for a relatively simple proposition – don't copy. The copyright laws are not an act of "judicial activism" to codify a common-sense grammar school lesson. Instead, these laws find their basis in the U.S. Constitution: Article I authorizes Congress to "Promote the progress of science and the useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries." Some of the comments in the blogosphere – including some rather nasty and ad hominem attacks against the "copyright troll of 2010" Righthaven LLC – seem to overlook that the easiest way to avoid copyright infringement claims is to avoid copying.

So, why all the angst related to enforcement of IP laws, now particularly centering on the concept of a copyright troll? In part, there are some of the same criticisms that have long been aimed at so-called "patent trolls": opportunistic lawyers, recoveries that are disproportionate to the "sweat of the brow" of the actual inventor/author, a drag on corporate profitability, etc. However, there are significant differences between a so-called patent troll and a so-called copyright troll.

First, the stakes and business model so far for the copyright cases seem to be quite different from the patent model. Righthaven's model, at least so far, has seemed to be a high-volume of cases that often individually settle in the range of a few thousand dollars.

Second, the policy issues are different. Revenue problems have cause newspapers to disappear at an alarming rate, and copyright revenue gives troubled businesses a new revenue stream from an existing asset. On the other hand, even those bloggers who infringe a copyright are usually creating knowledge, and there may be other counterconsiderations.

Third, some forms of clearinghouse model for copyright licensing/enforcement have existed for decades. For example, ASCAP, BMI, Copyright Clearance Center and others have generated revenue for themselves and for copyright owners by pursuing users of copyrighted works.

Fourth, it seems that courts may have a significant role in influencing policy when it comes to so-called "copyright trolls." For example, the courts have latitude in setting statutory damages in copyright cases within a wide range spanning $200 to $300,000; the exercise of that discretion can directly affect whether a so-called troll's business model will be profitable.

Most of all, though, parties being sued by Righthaven seem to feel a sort of "gotcha" moment. Sure, these defendants saw the copyright notices on the newspapers and websites whose content they allegedly copied, and they knew at some level that copying often has some element of "wrong" to it. But perhaps they figured that there was a safe harbor in doing what everyone else seemed to be doing. Compare the rumored – and often very dangerous – "rules of thumb" about things like the percent of content that can "safely" be copied, the supposed "free pass" that comes from a direct link to the original (copyrighted) article, the breadth of applicability of the fair use defense, and so on.

Perhaps the one aspect of the Righthaven model that many defendants feel most indignant about is that they were sued before receiving a cease-and-desist demand. As another example of the many disconnects between expectations and reality in IP enforcement, a demand letter is not a prerequisite to a complaint. There is no guaranteed "free bite at the apple" when it comes to infringement, and for good reason. Indeed, what would be the value of opinion counsel in the IP arena if the ultimate outcome were that liability only starts to accrue after a party elects to continue infringement after being actually warned of potential claims? Cease-and-desist demands have a place in certain infringement scenarios; however, they are sometimes a waste of time and money, and there is a strong deterrent to infringement when a defendant cannot escape liability for past acts simply by ceasing accused conduct when directly asked by the IP owner. Righthaven has apparently decided that such warning letters do not fit into its business model, which seems to be its prerogative.

The other major factor that contributes to the sense of "gotcha" is undeniably the role of the internet, email and related technologies. In short, acts of infringement can be publicized to the world at the speed of light, via a few keystrokes. Infringement over the internet is also much easier to identify, via increasingly-sophisticated searching and tracking technologies. It comes as no surprise that Righthaven reportedly uses a proprietary technology to identify suspected infringements before offering to buy the underlying copyrights from the copyright owner.

It will be interesting to see whether the Righthaven model, or some other models of so-called "copyright troll," will be sustainable. So far, to my knowledge, none of the 120+ Righthaven defendants has litigated what appear in some cases to be potentially valid "fair use" theories. Indeed, so far, Righthaven reportedly has been willing to settle individual cases for a few thousand dollars, which is far less than it would typically cost a defendant to secure copyright counsel and answer a federal complaint (both without any guarantee of success). I have heard rumblings that some defendants are pursuing discussions to form a defense coalition of sorts, to share costs and to combine expertise and effort. I will be curious to see how Righthaven handles serious defenses to the complaints, and whether pursuing active litigation fits Righthaven's business model.

In the meantime, the publicity surrounding this so-called "copyright troll" and the other high-profile copyright infringement claims of 2010 have served a useful purpose in reminding the public (and even non-copyright lawyers) about best practices regarding copyright law. Said differently, this is a very good time for clients to revisit their copyright practices. Maybe the economy and the election cycle have motivated more parties to enforce their copyrights, and maybe there could be a sustainable entrepreneurial enforcement model for a new kind of "troll," but the copyright law – as always – still prevents copying.

Fujitsu Ltd. v. Netgear

By: Jason Rantanen

Fujitsu Ltd. v. Netgear (Fed. Cir. 2010)
Panel: Lourie, Friedman, and Moore (author)

Indirect infringement claims are particularly relevant in the context of industry-wide interoperablity standards, because frequently companies simply manufacture products capable of particular behavior while the relevant methods are actually carried out by end users.  Patent No. 4,974,952 raises an example of this issue.  The '952 patent claims a method of sending wireless messages involving fragmenting the messages in a particular manner.  Philips, the patent holder, contended that any product that complied with certain sections of the IEEE 802.11 standard infringed the asserted claims, and that by complying with the standard Netgear indirectly infringed the '952 patent (presumably by selling the accused products).

The district court granted summary judgment of noninfringement in favor of Netgear, determining that Phillips had failed to establish either contributory infringement or inducement.  On appeal, the Federal Circuit determined that the district court had erred on some points, but nevertheless affirmed summary judgment of noninfringment with respect to all but four products. 

Use of Standards to establish Direct Infringement: The court's discussion of the use of industry-wide standards to prove infringement may become the most widely-cited portion of this opinion.  After considering the parties' arguments, along with that of amicus Association of Corporate Counsel Intellectual Property Committee, the court held that:

[A] district court may rely on an industry standard in analyzing infringement. If a district court construes the claims and finds that the reach of the claims includes any device that practices a standard, then this can be sufficient for a finding of infringement. We agree that claims should be compared to the accused product to determine infringement. However, if an accused product operates in accordance with a standard, then comparing the claims to that standard is the same as comparing the claims to the accused product….An accused infringer is free to either prove that the claims do not cover all implementations of the standard or to prove that it does not practice the standard.

We acknowledge, however, that in many instances, an industry standard does not provide the level of specificity required to establish that practicing that standard would always result in infringement. Or, as with the ’952 patent, the relevant section of the standard is optional, and standards compliance alone would not establish that the accused infringer chooses to implement the optional section. In these instances, it is not sufficient for the patent owner to establish infringement by arguing that the product admittedly practices the standard, therefore it infringes. In these cases, the patent owner must compare the claims to the accused products or, if appropriate, prove that the accused products implement any relevant optional sections of the standard.

Slip Op. at 8-9. Applying this holding, the panel concluded that because the fragmentation feature in the 802.11 standard was optional, and (although present in the Netgear devices) was turned off by default, Phillips was required to prove that customers actually used the infringing feature. On this point, the Federal Circuit agreed with the district court that there was only evidence of actual infringing use with respect to four products.

Substantial Noninfringing Uses: The Federal Circuit applied the analysis of i4i v. Microsoft, focusing on the specific feature at issue.  Here, because the specific feature was infringing when it was activated, there was no substantial noninfringing use.

Material Part of the Invention: Phillips accused two classes of products: those that only fragmented messages and those that only defragmented messages.  Because the claims of the '952 patent were specifically drawn to the fragmenting steps, not the defragmenting steps, the district court concluded that the accused defragmenting products could not infringe.  Phillips argued that because fragmentation necessarily infringes the asserted claims, than the defragmenting products are useful only for infringement, and Netgear should be liable for them.  The panel rejected this argument: even though the usefulness of the claimed method would be lost without data receivers capable of defragmenting messages, the lack of defragmentation steps in the claims means that products that only defragment messages cannot constitute a "material part" of the invention. 

Mental State Components of Indirect Infringement: In analyzing the respective mental state components for contributory infringement and inducement of infringement, the panel found that Netgear's receipt of letters identifying the '952 patent and alleging infringement by any 802.11 compliant standard were sufficient to survive summary judgment.

Comment: my current research focuses on mental state issues in patent law, including in the context of indirect infringement.  In the near future, I'll discuss this subject in more depth. 

Other issues: In addition to the above indirect infringement issues, the Federal Circuit also concluded that the district court had erred in limiting damages based on the patent marking statute (35 U.S.C. § 287), because the claims covered a method and § 287 does not apply where the patent is directed to a process or method.  The Federal Circuit also analyzed the district's construction of relevant claim terms in Patent Nos. 6,018,642 and 6,469,993, and affirmed its grant of summary judgment of noninfringement of those patents.  The analysis in this section may be particularly relevant to those operating in the wireless technology area.

Follow-up comment: Michael Barclay also noted the importance of the standard-as-evidence holding on his blog, IPDuck.  See

Patent Claims Continue to Drop


The chart above shows the percentage of patent applications published with more than twenty claims, grouped by publication date. I use the twenty-claim threshold because patent applicants are required to pay a surcharge to the USPTO for each claim over that limit.

As the chart shows, the percentage of applications with more than twenty claims has been declining for much of the past decade. This change is even more dramatic when looking at applications with forty or more claims.


Of course, if the percentage of high-claim applications is decreasing, the percentage of mid– or low-claim applications must show some increases.  The chart below presents a time series showing the percentage of patent applications with fifteen-to-twenty claims.


Facilitating Freedom-to-Operate Searches

by Dennis Crouch

A good freedom-to-operate (FTO) search will include a search of pending patent applications with an eye toward potential future threats. Over the past decade, the USPTO has published over 2.5 million patent applications. One problem with using that database for freedom-to-operate searches is that most of the published applications are either (1) already patented or (2) abandoned. Over the past three months (June –  August 2010), for instance, about 80,000 published applications were “disposed of.” If we include unpublished applications, during that period, 36,862 US utility patent applications were abandoned and 62,686 utility patents were issued.

Patent academics argue about the vague nature of pending applications (largely because claims can be modified prior to issuance). However, up to now, the database of published applications has been difficult to use as a FTO search database for a far simpler reason — most of the results in a patent application search are for applications that are no longer pending.  Those concluded cases unnecessarily clog the results.

As far as I know, no search-software-vendor has taken on the task of offering US patent application search results that include only pending applications.  Part of the difficulty of accomplishing that result is that it has been difficult to identify which applications have been abandoned.  

As part of its data transparency project, the USPTO recently began publishing a list of abandoned patent applications. [LINK]. In the near future, I expect that this newly available data will be helping to facilitate your FTO searches.

* * * * *




Stanford and Samsung offer $130,000 in Prize Money for Articles on Patent Remedies

Last week, President Obama’s administration released its new CHALLENGE.GOV website. Today stanford law school announced the Samsung-Stanford Patent Prize — this year focusing on patent remedies. All Patently-O readers are eligible:

Call for Papers: Samsung-Stanford Patent Prize

Topic: Patent Remedies

Samsung Electronics and Stanford Law School are proud to co-sponsor the inaugural Samsung-Stanford Patent Prizes. We are seeking outstanding papers and paper proposals on the topic of patent remedies. We will award up to seven Prizes in the amount of $10,000 each to academics, lawyers, and other professionals in any field who submit the best papers or abstracts. In addition, we will award up to 12 Prizes in the amount of $5,000 each to full-time students in any field who submit the best papers or abstracts. The winners are expected to attend and participate in a conference on the subject of patent damages to be held at Stanford Law School on February 18, 2011. Travel expenses will not be separately reimbursed, but should be paid out of the prize money.

Applicants should submit a precis of their draft or proposed paper (not to exceed five pages) by email to Brian Love at Stanford Law School ( no later than October 31, 2010. Winners will be notified by approximately November 15, 2010. To be eligible for the Prize, winners must submit a draft of their paper in advance of the conference, by February 1, 2011.

The purpose of this prize is to encourage new research; eligible papers must not have been published before December 31, 2010.

Prometheus v. Mayo: Patenting Medical Methods

Prometheus Labs. v. Mayo Collaborative Services (Mayo Clinic) (Fed. Cir. 2010)

This case is one of several pending Federal Circuit appeals that are questioning whether medical diagnostic and treatment methods are the proper subject of patent protection.

The claims asserted by Prometheus are directed toward a method of “optimizing therapeutic efficacy” by first administering an active drug (6-thioguanine) to a subject and then using the subject’s metabolite blood-level to adjust future doses of the drug.  (U.S. Patents 6,355,623 and 6,680,302). Thus, most of the claims are centered around three ordered-steps of:

  1. administering the drug to the subject;
  2. determining the amount of drug in the subject’s blood; and
  3. re-calibrating the drug dosage based on step-2.

A broader claim (claim 46 of the ‘632 patent) eliminates the administering step of claim 1 above.

The district court found the claims invalid as lacking patentable subject matter under 35 U.S.C. 101.  On appeal, the Federal Circuit reversed — holding that the steps of “administering a drug” and “determining the level of 6-thioguanine” were both sufficiently transformative of “a particular article into a different state or thing.”  That Federal Circut decision was based on the court’s machine-or-transformation test that was subsequently discredited by the Supreme Court in Bilski v. Kappos (2010).  In the wake of its Bilski decision, the Supreme Court vacated the Federal Circuit’s Prometheus decision and remanded for a new opinion.  Seeing this as a potential watershed case, Mayo immediately requested that the Federal Circuit hear the case en banc.

Briefing by October 1: The Federal Circuit has apparently denied the en banc request and has moved-forward with a rapid briefing schedule: By October 1, 2010, both parties are scheduled to submit 20–page briefs “addressing the effect of the Supreme Court’s Bilski decision on the disposition of this case. No additional briefing or oral argument is contemplated at this time.”  The scheduling order was signed by the court clerk Jan Horbaly.

Judges in Charge: The scheduling order suggests that the remand will be taken as a supplement to the original decision. A quirk of that original decision is that the three-member panel included two judges who are not on the Federal Circuit (Chief Judge Paul Michel (Ret.) and E.D. Texas District Court Judge Ron Clark). The third member of the panel is Judge Lourie.  Federal Circuit rules indicate that Judge Clark can retain on the panel on remand, but would not be part of any en banc hearing.

Related cases include Classen Immunotherapies Inc. v. Biogen Idec (method of determining an immunization schedule) and Association for Molecular Pathology v. Myriad Genetics (gene patents). 

Successor Company Holds Patents Assigned to Predecessor Company (Even if Assigned after Predecessor Dissolved)

Tri-Star Electronics Int'l. v. Preci-Dip Durtal SA (Fed. Cir. 2010)

Mr. Kerek (from Ohio) invented the claimed “socket contact” while an employee of Tri-Star and he duly executed an assignment of his rights to to Tri-Star.  The year prior to the invention, Tri-Star (OHIO) had merged and become Tri-Star (CALIFORNIA).  However, Kerek's assignment clearly stated that the assignment of rights was to Tri-Star (OHIO) — even though that Ohio company no longer existed. Later, Tri-Star (CALIFORNIA) merged and became Tri-Star (DELAWARE).

Here, the accused infringer has challenged whether Tri-Star (DELAWARE) has standing as owner of the patent rights.  The Federal Circuit accepted this interlocutory appeal and held that Tri-Star (DELAWARE) is the owner of the patent rights.  

In making its decision, the Federal Circuit found two points of law important:

First, contract law attempts to satisfy the mutual intent of the parties, and here, it was clear that the employee had intended to transfer rights to his employer as required by the employment contract.

Second, even after a merger, a predecessor company continues to exist under Ohio law for the purposes of allowing its property to vest.

Based on these two points, the Federal Circuit held that the stated transfer to the merged Tri-Star (OHIO) equated to a transfer to its successor Tri-Star (CALIFORNIA). The later transfer to Tri-Star (DELAWARE) was not disputed.

* * * * *

I have no problem with the Federal Circuit's statements regarding Ohio law — it is correct as far as I know. However, I do have some concern with the ongoing fallacy that there is no Federal law or policy controlling the transfer of patent rights. On point, there is a Federal Law requiring that patent assignments be done “in writing.” 35 U.S.C. 261. Based on that statute, the court should have considered how the supposed transfer from Kerek to Tri-Star (CALIFORNIA) fits within that statutory requirement. In addition, we have seen an increasing number of companies playing games with the patent recordation system by using shell corporations and by mis-recording assignment records. Here, for instance, the assignment record showed ownership by Tri-Star (CALIFORNIA) despite the documentation in the underlying assignment.  Those concerns are important — especially if we believe that the public properly has an interest in knowing the identity of patent owners.


Guest Post by Martin Goetz


Back on November 30, 2009, Patently-O published my article “In Defense of Software Patents” in response to the editorial “Abandoning Software Patents” by Ciaran O’Riordan, Director of End Software Patents (posted on Patently-O on November 6, 2009) which had as its premise that software companies are trying to protect “software ideas”.


In this article I comment on the Bilski Opinion as well as give some concrete examples of software-only patents as well as hardware/software patents. Also, my previous article received hundreds of comments, many being negative, and part of this new post is in response to those negative comments.


Since the June 28th Supreme Court Bilski decision there have been many articles[1] on what the Opinion stated and inferred about the patentability of software.


The Opinion restated what previous Supreme Courts concluded: that laws of nature, physical phenomena, mathematics, mathematical formulas (by themselves), algorithms (by themselves), and abstract ideas (which would include software ideas) are not eligible for patent protection.


While the Bilski Opinion never directly questioned the patentability of software, the Justices wrote extensively about the meaning of Section 101, the meaning of the term “process” and why the test for patent eligibility should not exclusively be “the machine-or –transformation test”. Justice Kennedy, with the concurrence of all other Supreme Court members, wrote that the Information Age puts innovation in the hands of more people and raises new difficulties for the patent law (and the Patent Office) to determine who should or should not receive patent protection.[2]


My November 2009 Patently-O article “In Defense of Software Patents” produced hundreds of comments. Many wrote that they were against the patenting of software because software was an “algorithm” or “mathematics”. In that article my primary argument was that a computer software invention is as patentable as a computer hardware invention and the only difference is the mode of implementation. My thesis was that Software Product companies in the Software Industry are looking to patent a machine process and not a computer program, which is protected by the copyright law. I showed why software product companies can be viewed as high technology manufacturing entities and should be just as eligible for patent protection as computer hardware companies.   


In this article I give examples of patents where the preferred implementation of an inventive machine process is in software (via a computer program[3]), hardware (via circuitry), or a combination of both software and hardware.


There is little argument that “processes” and “machine processes” are patentable subject matter[4] The question has always been about the nature of software and what one is trying to patent. For over 40 years I have been involved in that argument since I received the first software patent in 1968 for an innovative way to sort large amounts data on a computer that had tape drives that could only read and write data in a forward direction (See Patent # 3,380,029, Sorting System, Issued April 23, 1968).


The Sorting System patent was dubbed a software patent but it could also have been a computer hardware patent. It was dubbed a software patent solely because the preferred implementation (the disclosure) was a logic chart (which is recognized by the patent office as a proper disclosure). My Sorting System patent would not have been controversial if the disclosure had been hardware circuitry since there were many hardware patents for sorting data on special-purpose computers and special apparatus. In my patent application I referenced six of those patents which all had unique hardware circuitry in their patent disclosure. Three of them are available online, courtesy of Google Patent Search[5].


From 1968 through 1980 my previous company, Applied Data Research filed Amicus briefs in the Prater & Wei, Benson, Johnson, Flook, and Diehr cases in which we argued that a machine process patentable in hardware is equally patentable in software. Here is exactly how we posed a “Question of Law” “in our 1980 Diehr brief:

Whether a computerized machine or industrial process that is patentable subject matter under 35 USC 101 when constructed with a hardware program (wired circuits) would also be patentable subject matter when constructed with a stored computer program (i.e., firmware or software)?

The USPTO is currently in agreement with that “Question of Law” when in 1996 it published its Examination Guidelines for Computer-Related Inventions (Final Version).  The Guidelines stated in its Introduction the following: “The Guidelines alter the procedure office personnel will follow when examining applications drawn to computer-related inventions and are equally applicable to claimed inventions implemented in hardware or software.”


In that 1980 Diehr brief we also posed the following argument to the Supreme Court:

An inventor demonstrates his new invention to his patent attorney with great pride; he has developed a cabinet for reading books out loud to the blind. The cabinet contains both a reading and talking computer. After the demonstration, the patent attorney responds:


What's inside the cabinet? Did you build it with software or hardware (a stored program or hardware circuitry)? If built with a hardware program, your machine would be patentable. But if you built it with a stored program, the Patent Office would say it was merely mathematics and, therefore, unpatentable.”

The example above of a hypothetical “cabinet for the blind” invention was back in 1980 in our Diehr Amicus brief.


Twenty years later, in 2000, a renowned inventor, Ray Kurzweil received a patent named Reading System which Reads Aloud From An Image Representation Of A Document. The patent disclosure shows a diagram of a monitor, scanner, speakers, and a PC computer composed of a processor, storage and a keyboard. The essence of the disclosure and the invention is a logic chart describing a machine system which interacts with a speech synchronizer and the various devices.  


The first sentence of the abstract in the patent stated “a reading system includes a computer and a mass storage device including software comprising instructions for causing a computer to accept an image file generated from optically scanning an image of a document.”


At that time, Ray Kurzweil’s company, Kurzweil Educational Systems marketed a special purpose hardware/software system called the Kurzweil 3000 Reading Machine which was marketed to the blind and poor readers. Their 2000 year patent protected this product from imitators. Today the company sells a software only system called Kurzweil 3000 and continues to have the protection of the patent system thru his original 2000 patent and with additional patents e.g., Reducing processing latency in optical character recognition for portable reading machine (which is a software-only patent).


Few would argue that the Kurzweil 3000 Reading Machine was not an invention and not deserving of a patent.


While I am a strong advocate for software-related patents I have always been opposed to the patenting of Business Method Patents (BMPs). In my 2006 article Patents: Where's the Invention? I stated that the Patent Office should do what the European Patent Convention did when it  ruled that anything that consists of "schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers" is not an invention and therefore not patentable.” Justice Stevens, in his Opinion[6] also wanted to ban BMP’s from being patentable subject matter when he concluded that a method of doing business is not a “process” under 101.


Although the Bilski Opinion disallowed the Bilski application they stated that under certain conditions business methods could still be patentable subject matter. On July 27th the USPTO set up more stringent rules for the issuance of BMPs in their Interim Guidance for Determining Subject Matter Eligibility for Process Claims in View of Bilski v. Kappos. In many ways those guidelines are similar to the way computer software and hardware patents are currently being treated under the 1996 Guidelines for Computer-Related Inventions.    


One of the greatest challenges facing the Patent office today for BMPs, software or hardware patent applications is in discovering prior art and determining if there is an invention. The USPTO “Peer to Patent” pilot project” which  allows the public (including professionals in their respective fields) to comment on patent applications is still in its infancy, but offers the potential to assist the Patent Office in rejecting the large number of applications that are filed each year. The stated goal of the pilot project was to “connect the USPTO to an open network of experts online.”   Also, private companies e.g., the Article One Partners, a patent research firm, have the potential to significantly reduce the large number of patent litigation cases.


In conclusion, while I am a strong proponent of software patents I am very aware, and agree with, many of the arguments against patents because of patent trolls, frivolous patents, e.g. Amazon’s one-click patent, and frivolous patent litigation that can put companies out of business. And I support changes in the Patent Law to reduce those problems. But if one believes in the how the Patent System has fostered innovation and helped the US grow and prosper, then there is no rational reason to eliminate technology inventions that use software as its implementation.


In my previous article there were many comments from die-hards that continued to believe that software companies are trying to patent a computer program,  Whether those die-hards still  believe that a computer program is mathematics, or a mathematical formula, or an algorithm, or an abstract idea, so be it. Computer software programs are not what software companies are trying to patent. A software patent invention is on a unique machine process —- nothing more and nothing less. And the criteria should be 1. Innovation 2. A proper disclosure and 3. Usefulness — the same requirement that is the criteria for all patentable subject matter.

[1] Click below for a sample of many of these articles. Reading the Bilski Tea Leaves For What The Supreme Court Thinks Of Software Patents Comments on Bilski and Software Patents; Here's Bilski: It's Affirmed, But . . .No Decision on Software Patentability; Supreme Court Decision Raises Software Patent Questions; Supreme Court 'Bilski' ruling doesn't rule out software, business-method patents; Software patent debate rages on; Software, pharmaceutical, and business method patents survive; Patent Office Says No to Supreme Court and Software PatentsDeath Knell For Software PatentsSoftware Is Not Necessarily Business MethodSoftware Patents and Business Method Patents Still Possible after Bilski Supreme Court Decision.


[2](Underlining and bold added) (pages 9 & 10) “The machine-or-transformation test may well provide a sufficient basis for evaluating processes similar to those in the Industrial Age—for example, inventions grounded in a physical or other tangible form. But there are reasons to doubt whether the test should be the sole criterion for determining the patentability of inventions in the Information Age. As numerous amicus briefs argue, the machine-or-transformation test would create uncertainty as to the patentability of software, advanced diagnostic medicine techniques, and inventions based on linear programming, data compression, and the manipulation of digital signals. See, e.g., Brief for Business Software Alliance 24– 25; Brief for Biotechnology Industry Organization et al. 14–27; Brief for Boston Patent Law Association 8–15; Brief for Houston Intellectual Property Law Association 17–22; Brief for Dolby Labs., Inc., et al.”


The Opinion went on to state:

It is important to emphasize that the Court today is not commenting on the patentability of any particular invention, let alone holding that any of the above-mentioned technologies from the Information Age should or should not receive patent protection. This Age puts the possibility of innovation in the hands of more people and raises new difficulties for the patent law. With ever more people trying to innovate and thus seeking patent protections for their inventions, the patent law faces a great challenge in striking the balance between protecting inventors and not granting monopolies over procedures that others would discover by independent, creative application of general principles. Nothing in this opinion should be read to take a position on where that balance ought to be struck.

[3] While the implementation is in a computer program, the disclosure for one skilled in the art, are thru flow charts (also called logic charts) and thru block diagrams.

[4]. The Bilski Opinion closely examined the meaning and the words of 35 U.S.C 101. From 35 U.S.C. 101: Inventions patentable: Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent there for, subject to the conditions and requirements of this title.

[5] The Sorting Patents below were described thru and/or gates, and as methods and apparatus for sorting data. Sorting Device, Fillebrown, 5/1961 #2,985,864; Sorting Apparatus, Guerber, 5/1960 #2,935,732; Apparatus for sorting of Recorded Digital data, Dirks 3/1966 #3,242,466.


[6] (page 15) Because the text of §101 does not on its face convey the scope of patentable processes, it is necessary, in my view, to review the history of our patent law in some detail. This approach yields a much more straightforward answer to this case than the Court’s. As I read the history, it strongly supports the conclusion that a method of doing business is not a “process” under §101.


Single-Attorney Prosecution; Compact Prosecution; and the USPTO Backlog

The US Patent Office has long favored a “compact prosecution” examination approach. With compact prosecution, once substantive examination begins, the Office focuses its attention on promptly conducting and concluding the examination.  By reducing the duration of substantive prosecution, it is more likely that the case will be examined by an individual examiner and less likely that the examiner will have to re-learn the technology each go-round. 

From the Patent Office perspective, the long backlog-queue does not hamper compact prosecution because substantive examination generally begins only once the patent application makes its way to the front of the backlog queue. 

The applicant perspective is somewhat different. For applicants, substantive prosecution begins with preparing the patent application and eventually continues with office action responses and potential agreement on final claim language.  I am beginning a project that looks at how the backlog impacts prosecution from the attorney side. As the first blunt analysis, I looked at the prosecution history files for 90 randomly selected recently issued patents and compared the practitioner signature of (1) the application as filed; (2) the first response to a non-final office action (if any); and (3) the issue fee transmittal.

Findings: The signing practitioner (attorney/agent) changed in 71% of the cases.  Of the cases with response to a non-final office action rejection, the practitioner that signed the application was different from the practitioner that signed the initial response 61% of the time. (+/–  11% at 95% CI).



Preambles as Limitations

By Jason Rantanen

American Medical Systems, Inc. v. Biolitec, Inc. (Fed. Cir. 2010)
Panel: Bryson (author), Dyk (dissenting), and Prost

It may come as no surprise that the law on whether claim preambles can serve as limitations is unclear.  The Federal Circuit is aware of this issue, and at least one judge suggests that it may be time for the court to address this issue en banc.

The patent in this case, No. 6,986,764, relates to technology for vaporizing tissue using laser radiation.  The invention can be used to treat Benign Prostatic Hyperplasia, a condition in which growth of the prostate gland restricts the passage of urine out of the bladder and through the urethra.  By vaporizing or ablating some tissue, the size of the prostate is reduced, thus reducing bladder outlet obstructions.  Although laser radiation was known in the art, various problems were associated with its use.

The inventors of the '764 patent determined that by using high "volumetric power density" (a high amount of energy delivered to a given volume of tissue) they could produce increased vaporization efficiency while minimizing one of the problems associated with the procedure, residual coagulation.  The patent is directed to various methods and devices for achieving this high volumetric power density by manipulating variables such as wavelength, output power, beam quality, irrigant composition, and distance between the optical fiber and the tissue.

The dispute on appeal hinged on whether the preamble constituted a limitation.  Claim 31 is representative of the method claims. (The apparatus claims are similar, but recite "[a]n apparatus for photoselective vaporization of tissue.")  It recites:

A method for photoselective vaporization of tissue, comprising:

delivering laser radiation to a treatment area on the tissue, the laser radiation having a wavelength and having irradiance in the treatment area sufficient to cause vaporization of a substantially greater volume of tissue than a volume of residual coagulated tissue caused by the laser radiation, wherein the delivered laser radiation has an average irradiance in the treatment area greater than 10 kiloWatts/cm2 in a spot size at least 0.05 mm2.

During claim construction, the district court determined that the preamble phrase "photoselective vaporization" was a "fundamental characteristic" of the invention, and construed the term to mean "using a wavelength that is highly absorptive in the tissue, while being absorbed only to a negligible degree by water or other irrigant."  Based on this construction, the court granted summary judgment in favor of the accused infringer.

On appeal, the majority disagreed, concluding that the preamble phrase "photoselective vaporization of tissue" does not limit the claims of the '764 patent.  The court first noted the limited circumstances in which the preamble may limit claim scope:

“Generally,” we have said, “the preamble does not limit the claims.”  Nonetheless, the preamble may be construed as limiting “if it recites essential structure or steps, or if it is ‘necessary to give life, meaning, and vitality’ to the claim.” A preamble is not regarded as limiting, however, “when the claim body describes a structurally complete invention such that deletion of the preamble phrase does not affect the structure or steps of the claimed invention.”  If the preamble “is reasonably susceptible to being construed to be merely duplicative of the limitations in the body of the claim (and was not clearly added to overcome a [prior art] rejection), we do not construe it to be a separate limitation.”  We have held that the preamble has no separate limiting effect if, for example, “the preamble merely gives a descriptive name to the set of limitations in the body of the claim that completely set forth the invention.”

Slip Op. at 8-9 (internal citations omitted).  After rejecting a prosecution history-based argument and the argument that the preamble phrase provided a necessary antecedent basis, the court determined that the phrase "does not embody an essential component of the invention":

Instead, the term “photoselective vaporization” is simply a descriptive name for the invention that is fully set forth in the bodies of the claims….The bodies of the asserted apparatus claims (claims 63-64) describe a structurally complete device, including a laser adapted to deliver “radiation at a wavelength and irradiance . . . sufficient to cause [tissue] vaporization[.]” The bodies of those claims identify the covered wavelengths by function (“sufficient to cause vaporization”), and nothing in the claim language suggests that the term “photoselective” further limits those wavelengths.

Slip Op. at 10 (internal citations omitted).

Judge Dyk disagreed.  After first noting the confusing and unclear nature of the court's jurisprudence on this issue, he suggested that the court should dispense with the current articulation and instead apply the rule that preambles always limit claims:

It seems to me that a rule recognizing that all preambles are limiting would make better sense and would better serve the interests of all concerned. There is, after all, little to be said in favor of allowing an applicant, in the claim drafting process, to include material in the claims that is not binding. If patentees are allowed to include material in the claim definitions that is not bind-ing, patentees can suggest or imply one position before the U.S. Patent & Trademark Office (“PTO”) to secure allowance of the patent on the theory that the preamble is limiting and another, inconsistent position in infringe-ment litigation on the theory that it is not limiting. Principles of fairness thus dictate that the patentee should be required to clearly define the claimed inven-tion’s scope. By creating a uniform rule that all pream-bles are limiting, we would ensure the patentee has the burden of drafting a patent that avoids confusion as to the scope of the claims….Neither the Supreme Court nor our court sitting en banc has ever addressed the preamble limitation issue. I think the time may have come for us to eliminate this vague and confusing rule.

Dissent at 3-4.  He then turned to the issue of whether the preamble phrase in this case limited the scope of the patent, and concluded that it did based on the prosecution history and what he viewed as a definition of the term in the Summary of the Invention.  He also disagreed with the majority that the district court's construction would be inconsistent with the specification. 

GPG v. ITC: Federal Circuit Review of ITC Determinations

By Jason Rantanen

General Protecht Group v. International Trade Commission (Fed. Cir. 2010)
Majority opinion authored by Judge Dyk, joined by Judge Prost.  Dissenting opinion by Judge Newman.

ITC determinations are subject to review by the Federal Circuit under the standards of the Administrative Procedure Act, which allows for de novo review of legal determinations and review of factual findings for substantial evidence.  Although the parties in this appeal largely agreed on the meanings of the relevant claim terms, the majority concluded that the ITC's infringement finding lacked substantial evidence.  Writing in dissent, Judge Newman asserted that the majority's conclusion was based on issues never raised by the appellants.  

* * * *

The three appellants in this appeal, GPG, Trimone, and ELE, import ground fault circuit interrupters ("GFCIs") into the United States.  Pass & Seymour, Inc. obtained an exclusion order from the ITC following the Commission's finding that the devices infringed three patents: 7,283,340; 5,594,398; and 7,164,564. 

On appeal, although the appellants raised "numerous issues" challenging the Commission's determination of infringement, the panel found most of them unpersuasive.  Nevertheless, the majority did conclude that the Commission had erred in some respects, finding that (1) GPG's 2003 and 2006 GFCIs and ELE's 2006 GFCIs do not infringe the '340 patent because they lack a "detection circuit; (2) Trimone's 2006 GFCI's and ELE's 2006 GFCIs do not infringe the '340 patent because they lack the "load terminals" of the patent; and (3) GPG's 2006 GFCI's do not infringe the '398 patent because they perform the function of the "latching means" in a substantially different way than the structure disclosed in the patent.  In all other respects, the court affirmed the lower tribunal's determination.

The disagreement between the majority and dissent is illustrated by their positions on the "detection circuit" claim term, although it permeates the determinations on the other two terms as well.  The Administrative Law Judge construed "detection circuit" to mean "at least one detection circuit having a circuit segment connected between the line terminals and configured to generate a predetermined signal in response to detecting a proper wiring condition, which occurs when the line terminals are connected to a source of AC power.”  Neither ELE nor GPG challenged the construction on appeal; however, they argued that the Commission erred in adopting the ALJ's infringement finding.  The majority agreed that this element was not infringed: 

The construed claims require the “detection circuit” to “generate a predetermined signal in response to detecting a proper wiring condition.” Initial Determination, slip op. at 85 (emphasis added). But as Dr. Harman’s own testimony makes clear, his “predetermined signal” is merely the “current flow” originating from the hot line terminal. J.A. 40,396. The identified circuit does not generate this current; it is the current that comes from the AC power connection. So instead of detecting a proper wiring condition and generating a signal in response, as the properly construed claim requires, the accused GFCIs simply have power to operate, or not. Dr. Harman’s testimony is not substantial evidence to support a finding that ELE’s 2006 GFCIs infringe claims 14, 18, and 30 of the ’340 patent.

(Slip Op. at 9).  The majority applied similar reasoning with respect to GLG. 

In describing both ELE and GPG's arguments, the majority paid particular attention to the dissent's assertion that the appellants did not raise this issue, responding in a footnote that:

The dissent suggests that the parties did not raise this argument, but ELE clearly argued that “[b]y treating the ‘predetermined signal’ as including whatever AC power happens to arrive at a building from the local power plant, the Commission has broadened this limitation beyond all recognition and effectively reads it out of the claim.”

(Slip Op. at 8, fn. 3).

In a strident dissent, Judge Newman took a significantly different view of the ITC decision and majority opinion on appeal:

The Initial Decision of 170 pages and the Commission’s supplemental rulings of 32 pages present a full understanding of the technology, with rigorous discussion of the evidence and extensive analysis, findings, and conclusions. This court now finds its own facts, applies theories that were not raised by any party, uses incorrect standards of review, and creates its own electrical technology contrary to the uniform and unchallenged expert testimony.

(Dissent at 2).  With respect to the majority's "detection circuit" reasoning, after an extensive discussion of the Commission findings, Judge Newman concluded that:

[t]he court creates a theory not proposed by any party, and rules that a signal that originates from the line terminal is not generated by the detection circuit and thus is not “generated.” See Maj. Op. at 9 (“The identified circuit does not generate this current; it is the current that comes from the AC power connection.”). There is no support for this theory. The only signal generated in response to proper wiring as described in the ’340 patent is “generated” in the same way as in the accused devices, that is, the detection circuit uses power from the properly wired line terminals to supply a signal (claim 14) or response (claim 30) that allows the device to be reset. That is how the Commission, and the parties, interpreted the term. The court’s new interpretation of “generate” was not debated and is not briefed.

(Dissent at 8-9).


  • I understand that Pass & Seymour is seeking a rehearing and rehearing en banc on the ground that the majority's approach is in conflict with the APA, and intends to raise the argument that the court based its determination on issues not preserved or presented by the parties, thus unfairly prejudicing the party against whom the issues were decided and wasting the resources of the parties and ITC.
  • The Federal Circuit also issued a companion opinion addressing Pass & Seymour's appeal from the ITC's determination that GPG's 2003 devices and Trimone's 2006 devices do not infringe the '398 patent, and that ELE's 2003 and 2006 devices, GPG's 2003 and 2006 devices, and Trimone's 2006 devices do not infringe Patent No. 7,212,386.  The appeal turned on questions of claim construction, with the majority opinion affirming the ITC's constructions largely by applying a "plain meaning" approach.  Judge Newman concurred in the result, but took the position that, with respect to the '386 patent, the majority should have adhered to the Commission's construction, rather then adopting its own construction. 

CHALLENGE.GOV: Prizes as an Additional Incentive Layer

In my patent law course last week, we had discussion of the role of a patent system as compared with other potential governmental pro-innovation initiatives such as grants or prizes.  Our current patent system does not provide any strong mechanisms for channeling innovation toward particular identified issues.  Rather, investors and inventors choose their own paths according to their own subjective perception of the potential market upside.  When an important challenge is publicly identified, we may want to add an additional layer of incentive to funnel research in a particular direction. In that vein, the Obama Administration's Chief Technology Office Aneesh Chopra and Chief Information Officer Vivek Kundra unveiled CHALLENGE.GOV at yesterday's GOV 2.0 conference.  CHALLENGE.GOV identifies 35 challenges and offers prizes for folks who provide novel solutions.

Identified challenges include:

  • Create nutritious food that kids like — $12,000 prize.
  • Reducing waste at college football games — school prestige award.
  • Best original research paper as judged by the Defense Technical Information Center.
  • Provide a whitepaper on how to improve reverse osmosis membranes — up to $100,000.
  • Digital Forensics Challenge
  • Federal Virtual Worlds Challenge (Create the best virtual world for the US Army) — $25,000 in prizes.
  • Advance the field of wireless power transmission — $1.1M for a team that can wirelessly drive a mechanical climber to 1 kilometer height at a speed of at least 5 meters/sec. 
  • Strong Tether Challenge — create a material with 50% more tensile strength than anything on the market for $2 million.
  • etc.