January 2012

Streck v. Research Diagnostic Systems: Dismissal of Invalidity Counterclaims, Written Description, and Enablement

Patent, ,

By Jason Rantanen

Streck, Inc. v. Research & Diagnostic Systems, Inc. (Fed. Cir. 2011) Download 11-1044
Panel: Newman, O'Malley (author), and Reyna

Streck, Inc. sued Research & Diagnostic Systems, Inc. for infringement of three patents relating to hematology control technology using integrated reticulocyte controls.  In response, R&D counterclaimed for declaratory judgment of noninfringement and invalidity.  During the district court litigation, R&D argued that the claims were unsupported by adequate written description, that they were not enabled, and that it was entitled to priority.  The district court granted summary judgment in Streck's favor on written description, JMOL in Streck's favor on enablement, and a jury ruled for Streck on the issue of priority.  Following trial, the district court entered a permanent injunction.

Dismissal of Invalidity Counterclaims:  On appeal, the CAFC concluded that the district court properly dismissed R&D's invalidity counterclaims against unasserted claims.  During the litigation, Streck submitted a series of infringement contentions in which it progressively limited the specific claims asserted, while R&D amended its invalidity contentions to ultimately encompass all but one claim of the patents-in-suit.  When R&D moved for summary judgment of invalidity on two of the unasserted claims, the district court dismissed the invalidity counterclaims for those claims citing a lack of "reasonable apprehension" of suit on R&D's part as to those claims.

On appeal, the Federal Circuit agreed with the District Court's dismissal.  Even in the wake of MedImmune, a declaratory judgment plaintiff must show the existence of a case or controvery, as evaluated on a claim-by-claim basis. Drawing upon the reasoning of a New Jersey district court opinion addressing the same issue, Hoffman-La Roche Inc. v. Mylan Inc., No. 2:09cv1692, 2009 U.S. Dist. LEXIS 114784, at *17-18 (D.N.J. Dec. 9, 2009), the Federal Circuit held that "consistent with MedImmune, a counterclaimant must show a continuing case or controversy with respect to withdrawn or otherwise unasserted claims."  Slip Op. at 20.

The CAFC further concluded that R&D failed to satisfy this requirement.  Although the district court technically erred by relying exclusively on the reasonable apprehension of suit test, "there is no evidence that R&D met its burden of showing a continuing case or controversy with respect to the unasserted claims."  Id. at 23. Nor was the court persuaded by R&D's arguments based on Scanner Technologies Corp. v. ICOS Vision Systems Corp., 528 F.3d 1365 (Fed. Cir. 2008):

"unlike the situation in Scanner Technologies, where all of the claims were at issue and were never withdrawn or altered by either party, here, both parties were on notice from the start of litigation that the scope of claims at issue was only a subset of the full patents-in-suit and, significantly, did not include Claim 3 of any patent."

Id. at 22.

Written Description Satisfied: Streck v. Research Diagnostic is also notable for its reliance on the knowledge of a PHOSITA in the context of written description.  In this instance, the asserted claims covered both the use of a "true" reticulocyte or an analog of a reticulocyte in the claimed control composition.  The two parties' technical lineage differed based on this distinction: the inventor of Streck's patents used only a reticulocyte analog when he reduced the invention to practive, while R&D developed its composition using a true reticulocyte.  Leveraging this distinction into a written description argument, R&D contended that the patents-in-suit failed to provide adequate written description for a true reticulocyte integrated control.

On appeal, the CAFC agreed with Streck and the district court that the patents contained sufficient disclosures to support claims encompassing the use of true reticulocytes when combined with the knowledge of a PHOSITA, namely, that "use of true reticulocytes in stand-alone controls was well-known in the prior art."  Slip Op. at 28.  Based on the disclosures of the patents, "one skilled in the art would have recognized that the claimed integrated controls could be made using either true reticulocytes or reticulocyte analogs." Id.

Enablement: Focus on the "Novel Aspect" of the patents-in-suit: The CAFC also affirmed the district court's grant of JMOL of enablement, agreeing with Streck's claims that the "novel" aspect of the invention was an integrated control using both reticulocytes and white blood cells and that true reticulocytes are "virtually indistinguishable" from analogs.  While "the specification, not the knowledge of those skilled in the art, 'must supply the novel aspects of an invention,'" id. at 32-33 (quoting Automotive Technologies v. BMW, 501 F.3d 1274 (Fed. Cir. 2007), the court apparently did not view the type of retriculocytes as a novel aspect of the invention in this case.  "Here, there was unrebutted evidence that true reticulocytes and Ryan’s reticulocyte analogs 'work in exactly the same way in a hematology control, and are virtually indistinguishable, even to one skilled in the art.'”  Id. at 33.

The CAFC also affirmed on the issue of priority, citing its earlier and controlling decision in Streck, Inc. v. Research & Diagnostic Systems, Inc., 659 F.3d 1186 (Fed. Cir. 2011), and concluded that the wording of the permanent injunction was not overly broad. 

Patently-O Bits & Bytes by Lawrence Higgins

Patent,

Kodak accuses HTC and Apple of patent infringement

  • Kodak is trying to prohibit Apple's iPhones, iPads, and iPods and HTC's smartphones and tablets, from entering the US because they claim that the products infringe their patents on its digital imaging technology. Kodak has filed suit at the ITC and in the Western district of New York against Apple and HTC. [Apple Complaint][HTC Complaint] 
  • Kodak has been in the news lately with the threat of bankruptcy. However, Kodak has a very large number of patents in their portfolio and from the looks of the pending patent infringement suits; they plan to enforce their patents. This could be the start of a busy year for Kodak and their patent attorneys, if they plan on going after all potential infringers. Could Kodak's patent portfolio potentially save the company from bankruptcy? Only time will tell.

USPTO will host educational roadshows

  • USTPO officials will travel to seven educational roadshows regarding the America Invents Act, allowing the public to speak with the USPTO officials about the implementation of the Act. Discussions will mainly focus on the USPTO's recently proposed rules regarding provisions of the Act. The locations that USPTO officials will hold the roadshows are Alexandria, VA, Sunnyvale, CA, Salt Lake City, Dallas, Ft. Lauderdale, Boston, and Chicago. [Link]

The Nuts and Bolts of Federal Circuit Practice

  • On January 19, at 3p.m. eastern time, the Federal Circuit Bar Association will hold the Nuts and Bolts of Federal Circuit Practice. The webcast will provide a practical "How To" discussion of the rules and issues that practitioners and companies must face when appealing to the Federal Circuit. Many questions will be answered such as: How does the Court handle the many highly technical issues that come before it? What are the time limits for filing a notice of appeal and briefs? The panelists for the event are Pamela Twiford, Jan Horbaly, and James Benjamin. [Link]

Patent Jobs:

  • A patent firm is seeking a contract patent attorney/agent with at least 4 years of experience and a background in CS. (telecommuting option) [Link]
  • Stoel Rives is seeking a patent attorney with 3-5 years of experience to work in their Portland or Seattle office. [Link]
  • NSIP Law is searching for a patent attorney with at least 3 years of experience to work at their Washington DC office. [Link]
  • Hiroe & Associates is seeking a patent attorney with 2-5 years of experience to work in Japan. [Link]
  • Alston & Bird is seeking a patent prosecution associate with 2-3 years of experience and a background in electrical engineering to work at their Charlotte office. [Link]
  • Google is searching for a patent litigation counsel with 3 years of litigation experience to work at their New York office. [Link]
  • The USPTO is seeking patent examiners with engineering backgrounds and experience in the patent field. [Link]
  • Ice Miller is looking for a patent attorney with 2+ years of experience to work at their Indianapolis office. [Link]
  • Ice Miller is seeking a 2012 law school graduate eligible to sit for the patent bar. [Link]

Upcoming Events:

  • What You Need to Know About… The New ND Cal Patent Pilot Program, session will be hosted by Stanford Law School on January 18. Guest include Chief Judge Randall Rader, Jeff Fehervari, Laura Storto, Judge Nathanael Cousins, Judge Elizabeth Laporte, Judge Lucy Kohand many others.
  • The American Bar Association Section of Intellectual Property Law, Young Lawyers Division, ABA-IPL Young Lawyers Action Group and the ABA Center for Continuing Legal Education will sponsor a webinar on January 20 at 1 p.m. Eastern time. The webinar, Prosecution Strategies: Tackling USPTO Obviousness Rejections will explore how the KSR standards have been applied in various technology areas and provide guidance for effective avenues of argument based on the technology area. Speakers include: Janet Hendrickson, Gregory Hillyer, Michelle O'Brien, and Zachary Stern. [Link]
  • The American Conference Institute (ACI) The Comprehensive Guide to Patent Reform For Life Science Companies, conference is scheduled for January 31- February 1 in New York. (Patently-O readers register with PO 200 for a discount). [Link]
  • The 7th Annual Conference on EU Pharma Law & Regulation will be held on February 22-23 on London. The conference will bring together eminent in-house counsel from the world's largest pharma and biotech companies, top legal practitioners and regulatory experts in an outstanding speaker panel. (Patently-O readers register with PO 10 for a discount). [Link]
  • LES (USA & Canada) 2012 Winter Meeting will be held March 12-14 in Anaheim, CA. The meeting will focus on cutting-edge issues in the high tech space with overlapping content in related industries, including clean tech, nanotech, and medical devices. Featured speakers include Honorable Randall Rader, Chief Judge, U.S. Court of Appeals for the Federal Circuit; Catherine Casserly, CEO, Creative Commons; and Patrick Ennis, Head of Global Technology, Intellectual Ventures. Save $100 before January 31. [Link]

Contact Lawrence.Higgins@patentlyo.com with leads for future Bits and Bytes.

Patently-O Bits & Bytes by Lawrence Higgins

Patent,

Kodak accuses HTC and Apple of patent infringement

  • Kodak is trying to prohibit Apple's iPhones, iPads, and iPods and HTC's smartphones and tablets, from entering the US because they claim that the products infringe their patents on its digital imaging technology. Kodak has filed suit at the ITC and in the Western district of New York against Apple and HTC. [Apple Complaint][HTC Complaint] 
  • Kodak has been in the news lately with the threat of bankruptcy. However, Kodak has a very large number of patents in their portfolio and from the looks of the pending patent infringement suits; they plan to enforce their patents. This could be the start of a busy year for Kodak and their patent attorneys, if they plan on going after all potential infringers. Could Kodak's patent portfolio potentially save the company from bankruptcy? Only time will tell.

USPTO will host educational roadshows

  • USTPO officials will travel to seven educational roadshows regarding the America Invents Act, allowing the public to speak with the USPTO officials about the implementation of the Act. Discussions will mainly focus on the USPTO's recently proposed rules regarding provisions of the Act. The locations that USPTO officials will hold the roadshows are Alexandria, VA, Sunnyvale, CA, Salt Lake City, Dallas, Ft. Lauderdale, Boston, and Chicago. [Link]

The Nuts and Bolts of Federal Circuit Practice

  • On January 19, at 3p.m. eastern time, the Federal Circuit Bar Association will hold the Nuts and Bolts of Federal Circuit Practice. The webcast will provide a practical "How To" discussion of the rules and issues that practitioners and companies must face when appealing to the Federal Circuit. Many questions will be answered such as: How does the Court handle the many highly technical issues that come before it? What are the time limits for filing a notice of appeal and briefs? The panelists for the event are Pamela Twiford, Jan Horbaly, and James Benjamin. [Link]

Patent Jobs:

  • A patent firm is seeking a contract patent attorney/agent with at least 4 years of experience and a background in CS. (telecommuting option) [Link]
  • Stoel Rives is seeking a patent attorney with 3-5 years of experience to work in their Portland or Seattle office. [Link]
  • NSIP Law is searching for a patent attorney with at least 3 years of experience to work at their Washington DC office. [Link]
  • Hiroe & Associates is seeking a patent attorney with 2-5 years of experience to work in Japan. [Link]
  • Alston & Bird is seeking a patent prosecution associate with 2-3 years of experience and a background in electrical engineering to work at their Charlotte office. [Link]
  • Google is searching for a patent litigation counsel with 3 years of litigation experience to work at their New York office. [Link]
  • The USPTO is seeking patent examiners with engineering backgrounds and experience in the patent field. [Link]
  • Ice Miller is looking for a patent attorney with 2+ years of experience to work at their Indianapolis office. [Link]
  • Ice Miller is seeking a 2012 law school graduate eligible to sit for the patent bar. [Link]

Upcoming Events:

  • What You Need to Know About… The New ND Cal Patent Pilot Program, session will be hosted by Stanford Law School on January 18. Guest include Chief Judge Randall Rader, Jeff Fehervari, Laura Storto, Judge Nathanael Cousins, Judge Elizabeth Laporte, Judge Lucy Kohand many others.
  • The American Bar Association Section of Intellectual Property Law, Young Lawyers Division, ABA-IPL Young Lawyers Action Group and the ABA Center for Continuing Legal Education will sponsor a webinar on January 20 at 1 p.m. Eastern time. The webinar, Prosecution Strategies: Tackling USPTO Obviousness Rejections will explore how the KSR standards have been applied in various technology areas and provide guidance for effective avenues of argument based on the technology area. Speakers include: Janet Hendrickson, Gregory Hillyer, Michelle O'Brien, and Zachary Stern. [Link]
  • The American Conference Institute (ACI) The Comprehensive Guide to Patent Reform For Life Science Companies, conference is scheduled for January 31- February 1 in New York. (Patently-O readers register with PO 200 for a discount). [Link]
  • The 7th Annual Conference on EU Pharma Law & Regulation will be held on February 22-23 on London. The conference will bring together eminent in-house counsel from the world's largest pharma and biotech companies, top legal practitioners and regulatory experts in an outstanding speaker panel. (Patently-O readers register with PO 10 for a discount). [Link]
  • LES (USA & Canada) 2012 Winter Meeting will be held March 12-14 in Anaheim, CA. The meeting will focus on cutting-edge issues in the high tech space with overlapping content in related industries, including clean tech, nanotech, and medical devices. Featured speakers include Honorable Randall Rader, Chief Judge, U.S. Court of Appeals for the Federal Circuit; Catherine Casserly, CEO, Creative Commons; and Patrick Ennis, Head of Global Technology, Intellectual Ventures. Save $100 before January 31. [Link]

Contact Lawrence.Higgins@patentlyo.com with leads for future Bits and Bytes.

Celsis: Federal Circuit Upholds Preliminary Injunction over Dissent

Patent, ,

by Dennis Crouch

Celsis In Vitro v. CellzDirect and Invitrogen (Fed. Cir. 2012)

This case is important because it provides an important incremental analysis of when a validity challenge is sufficiently substantial to lead a court to reject a motion for preliminary injunctive relief.

Majority opinion by Chief Judge Rader (author) and Judge Prost. Dissent by Senior Judge Gajarsa.

Celsis owns Patent No. 7,604,929 — claiming as its invention a method and system of freezing and preserving human liver cells using multi-cryopreservation.  In a split opinion, the Federal Circuit affirmed the lower court's preliminary injunction order stopping the defendants from practicing the invention. 

When appealed, a preliminary injunction is reviewed for abuse of discretion that requires clear error, either in “judgment in weighing relevant factors” or in the exercise of “discretion based upon an error of law.”  A decision on preliminary relief is immediately appealable. 

Dissent on Substantial Question of Obviousness: Writing in dissent, Judge Gajarsa argued that this case is not amenable to the “extraordinary and drastic remedy of a preliminary injunction” because the defendants “raised a substantial question as to the validity” of the asserted patent.  Focusing on the burden of proof, Judge Gajarsa noted that a preponderance of the evidence is sufficient to prove the “substantial question” and that “it is unnecessary to prove a substantial question of invalidity by clear and convincing evidence.”

The the key dispute between the majority and dissent was on the issue of obviousness.  Judge Gajarsa wrote:

In my judgment, the district court abused its discretion in finding that Celsis had demonstrated a likelihood of success on the merits because the claimed invention is nothing more than a repetition of steps already known in the art.  Moreover, the majority perpetuates this error, and in so doing applies the wrong standard for obviousness and rationalizes the issuance of the preliminary injunction because it would prevent competition with a patented process which may be proven to be invalid. 

In particular, Judge Gajarsa argued that the district court and majority improperly rejected the obviousness argument by seeking some teaching or suggestion (TSM) in the prior art that would lead someone to attempt to combine the known elements of the claimed invention.

In particular, the majority wrote that the key prior art does not disclose “micro-cryopreservation” as claimed nor does it suggest this step as a solution to problems known in the art.  Chief Judge Rader wrote “This court has not seen [the Defendants] identify any teaching, suggestion, or motivation in the [prior art] that multiple rounds of freezing would somehow increase rather than decrease cell viability.”  The majority agreed with the lower court that the obviousness argument lacked credibility because "not a single one of that astonishingly large body of literature was devoted to the subject of multi-cryopreservation of hepatocytes."  Judge Gajarsa felt this fact was inconsequential because multi-cryopreservation simply involved repeating steps that were already known.  

DDC Comment: The TSM test for combining prior art was eliminated by the Supreme Court KSR v Teleflex in much the same way that the MOT test for patentable subject matter was eliminated in Bilski. In both cases, the strict tests remain probative, if inconclusive, tools.  However, in the context of a preliminary injunction a defendant's failure to provide a motivation to combine prior art may well be sufficient find a patent “likely nonobvious.” 

Although identified as a “factor”, the likelihood of success factor turns out to be a necessary element of a successful motion for preliminary relief.  In other words, if the plaintiff is unable to prove that it has a sufficient likelihood of success on the merits of the case then the district court will deny the preliminary injunction motion.  This case provides some assistance in determining when that threshold has been met.

Motivation versus Long Felt Need:  Chief Judge Rader is known for playing logical games with the secondary indicators of nonobviousness. Here, the accused infringers provided evidence of a “market need” for the solution and argued that those market forces would prompt the variation found in the patent.  That argument follows the statement in KSR that “market forces can prompt variations” of known design elements.  Judge Rader flipped the argument and instead noted that such market need is when “properly linked to the claimed invention, is actually probative of long felt need under objective criteria analysis and supportive of non-obviousness.”

Preliminary Injunction Standards: A preliminary injunction is decided on a four-factor test that is almost identical to the test outlined for permanent injunctions in eBay v. MercExchange.  Namely, a court must consider (1) likelihood of success on the merits, (2) irreparable harm, (3) balance of hardships, and (4) public interest.  In the context of permanent relief, the likelihood of success on the merits is no longer a factor because permanent relief is only determined after the patentee wins on the merits. In eBay, the Supreme Court included an additional factor –  that monetary damages are insufficient.  However, that factor is likely wholly subsumed by the “irreparable harm” factor.

Here irreparable harm was shown by expert testimony and evidence of "price erosion, damage to ongoing customer relationships, loss of customer goodwill (e.g., when an effort is later made to restore the original price), and loss of business opportunities." And, the public interest factor is normally presumed to be met in patent cases because the public interest favors enforcement of valid patents.

New Detroit Office

Patent

Patent2011061

The USPTO has announced that the new Detroit Branch of the USPTO will be located in the old Parke-Davis Lab on River Place Drive and next to the Detroit Riverwalk. The office is expected open by July 2012 and emply about 100 individuals –  mainly patent examiner.  Prospective employees can e-mail detroitHiring@uspto.gov.  The new site is next-door to an Omni Hotel.

The City of Detroit has a population of about 700,000 — that includes only 21 active patent practitioners. General Motors is the only entity with a significant patent-attorney presence in the city proper.  However, the surrounding suburban area is thick with patent law professionals.  The Detriot site makes economic sense because the of the access to highly-trained but under-employed engineers, low cost of living, and low cost of commercial real estate. 

The USPTO is in the process of selecting two additional satellite offices.  Public comments on the location of the next two satellite offices is due by January 30, 2012 to satelliteoffices@uspto.gov.

 


View Larger Map

Patent2011060

Preliminary Report on Track I: Prioritized Patent Examination Program

Patent

By Dennis Crouch

The USPTO’s new Commissioner for Patents is Peggy Focarino. In a recent post to Dir. Kappos Blog, Commissioner Focariono provided a report on the PTO’s “Track I Prioritized Patent Examination Program.” Under Track I, a patent applicant can complete a simple one page form and pay a $4,800 fee to have their patents processed quickly. The goal is that patents will be “processed to completion” within 12-months of an application entering the Track I program. Track I was authorized by the Leahy-Smith America Invents Act that was enacted on September 16, 2011. The program became effective on September 26, 2011.

As of January 3, 1,694 Track I petitions applications had been filed and the Office has granted 99% of the petitions it has decided. First office actions are being sent – on average – about one month after approval of the petition. So far, the longest delay has been 70 days from grant of the petition to mailing of the first office action.

* * * *

This morning I identified the first Track I patent issued thus far – U.S. Patent No. 8,094,942 owned by Google and directed to a method and system of character recognition for overlapping textual user input. The application was filed on September 30, 2011 along with a Track I request. The request was granted on November 1, 2011. The applicant then filed an IDS and a proactive terminal disclaimer associated with a parent case. The case was handled by a primary examiner who had handled the parent case and who allowed the claims with examiner-proposed amendments following an interview.

* * * *

Commissioner Focariono added the following note to her post: “For those applicants or practitioners concerned about whether Track I applications will be treated differently from others in terms of grant/denial rate, our examiners are being given exactly the same training, credits and incentives to accurately examine Track I cases as for all other cases, and no training, credits or incentives are being given to bias examiner decisions in any way. And as for the data, given the statistics provided above, so far there is no basis to believe there is any difference in result for Track I versus non-Track I processing, other than the significantly faster responsiveness.”

USPTO Notice and Comments

Patent, ,

The USPTO currently has nine published notices and proposed rule changes that are open for comment. Most of these involve changes to USPTO procedure that implement aspects of the Leahy-Smith America Invents Act (AIA). Under the AIA, the USPTO has been granted broader authority through this notice-and-comment period.

  • Proposed Rule: Eliciting More Complete Patent Assignment Information – Comments Due January 23, 2012. The USPTO is proposing a rule that would require the timely recordation of patent and application ownership and changes to ownership. [DDC: This appears to be a straw-man proposal and will likely be significantly changed or dropped based upon public input.]
  • Proposed Rule: Revision of Patent Term Adjustment Provisions Relating to Appellate Review – Comments Due January 27, 2012. [DDC: The new rule would largely lengthen PTA, but in some circumstances would reduce PTA depending upon the results of your appeal to the BPAI.]
  • Notice: Request for Comments on Additional USPTO Satellite Offices for the Nationwide Workforce Program – Comments Due January 30, 2012. The USPTO is planning to open additional satellite offices in 2012-2013 and is seeking input on the proper location.
  • Proposed Rule: Changes to Implement the Pre-issuance Submissions by Third Parties Provision of the Leahy-Smith America Invents Act – Comments Due March 5, 2012. Third party submissions will be allowed beginning in September 2012. The proposed rules sets up requirements that such a submission must include "a concise description of the asserted relevance of each document submitted." The proposed rule suggests that a fee of $180 for the submission of up to ten documents. In order to promote submissions, the Office has proposed a fee exemption for the first submission by each third-party for each application (with a limit of three documents in that submission). Under the new rules, submissions must be filed by the later of: (i) Six months after the date on which the application is first published by the Office or (ii) The date the first office action.
  • Proposed Rule: Implementation of Statute of Limitations Provisions for Office Disciplinary Proceedings – Comments Due March 5, 2012. The AIA sets a new statute of limitations for USPTO disciplinary proceedings at the earlier of (i) 10 years after the date on of the alleged misconduct; or (ii) one year from the date on which the misconduct was made known to an officer or employee of the USPTO. The rule proposed by the PTO would further define the one-year deadline as being triggered only once the USPTO has completed a preliminary review of the case and received a "complete, written response" from the accused practitioner. Depending upon the circumstances, the one-year deadline may otherwise be triggered by the OED's receipt of a certified copy of a record of censure from another Bar or conviction of a serious crime. [DDC: The USPTO's interpretation of the one-year deadline appears to be in tension to the text of the new statute, but the PTO may be fine because of the deference for OED matters under Lavacara v. Dudas.]
  • Proposed Rule: Changes to Implement Miscellaneous Post Patent Provisions of the Leahy-Smith America Invents Act – Comments Due March 5, 2012.
  • Proposed Rule: Changes to Implement the Inventors Oath or Declaration Provisions of the Leahy-Smith America Invents Act – Comments Due March 6, 2012.
  • Notice: Changing the USPTO's Collection of Information in Matters Related to National Medal of Technology and Innovation Nomination Application – Comments Due February 6, 2012.
  • Notice: Changing the USPTO's Collection of Information in Matters Related to Patent Appeals – Comments Due March 5, 2012.

Chief Judge Rader & Band DeNovo to “Rock” San Diego’s House of Blues

Patent

Guest Post by Ted Sichelman, Professor, University of San Diego School of Law

Aside from his international and national speaking tours, Chief Judge Rader recently embarked on a musical “tour” with his band, DeNovo. After playing a few IP-related events and a recent Federal Circuit holiday party, DeNovo—which also includes Professor Sean O’Connor of the University of Washington and Matthew Bryan of WIPO—is hitting the big time by playing at the House of Blues in downtown San Diego on Thursday, January 19. Bands from NuVasive and Qualcomm will open, and Dean for IP Studies at George Washington School of Law and former SG of the USPTO, John Whealan will MC. The bands are performing as part of University of San Diego’s Second Annual Patent Law Conference (click here for more info), taking place Friday, January 20. Chief Judge Rader will give the keynote address—other panelists include Judge Marilyn Huff, Judge Janis Sammartino, and Magistrate Judge Cathy Ann Bencivengo (Southern District of California), as well as Professors Colleen Chien, Mark Lemley, Robert Merges, Shine Tu, and John Whealan, and distinguished local attorneys.

Fed Cir HOB

Reviewing the New USPTO Post Grant Review System with Reference to EPO Oppositions

Articles and Publications, Patent, , , ,

by Dennis Crouch

Time is flying and the newly revamped host of USPTO administrated post-grant patent procedures is on its way.  As we speak, the USPTO is continuing to develop its rules and internal operating procedures for handling the new options.  This post focuses on the new post-grant review (A.K.A. opposition proceeding), which is being created by splitting the current inter partes reexamination system into two parts: post-grant review and inter partes review.  Current reexamination practice focuses solely on questions of novelty and obviousness based upon prior art in the form of printed publications. The new post-grant review system broadens the bases for review to virtually any validity challenge.   However, post-grant reviews will only be available during a 9–month window following patent issuance. 

Full implementation of the post-grant review system will not be until 2013 & 2014 because the review is only available for patents with a priority date on or after March 16, 2013. The 2013 date is also the implementation date of the new Filing-Date-Priority rules. We will, however, get a preview of the PGR system once it becomes available to go against Business Method patents beginning September 16, 2012.

EPO Opposition Popularity: Europe has a popular opposition system and there is a natural comparison between our new post-grant review and their oppositions.  Around 5% to 7% of EPO-issued patents are opposed during the 9–month post-grant window.  This figures are an order-of-magnitude greater than the proportion of US patents that go through the inter partes reexamination system.

Obstacles to US Post-Grant Popularity: I do not expect that the US system will see the same level of utilization –  at least for some time.  The major legal impediment to filing a post-grant review is the tough new threshold that requires a showing “that there is a reasonable likelihood that the petitioner will prevail with respect to at least one claim challenged.”  If the threshold is not met, the petition for review will be rejected. This threshold is substantially greater than the USPTO’s historic standard requiring a “substantial new question of patentability.” The EPO does not have a similar threshold. Rather, so long as certain formalities are met, the opposition proceeds with a full review with opportunity for appeal, etc.  That said, the EPO opposition proceeding results in cancellation or at least amendment in about 75% of cases.

The other major roadblock to popularity for US post-grant review will be cost.  Current behind-the-scenes discussion peg the USPTO filing fees at over $40,000 for a post-grant review. The equivalent fee for an EPO opposition is under $1,000 (€705).  The availability of limited discovery suggest that the legal fees for post-grant oppositions will also be fairly high.

Patent Law Blogs and the ABA

Patent

I am pleased to announce that Patently-O was selected by the American Bar Association (ABA) Journal as their favorite IP Law blog for 2011. It is an honor that Patently-O has been chosen as one of the top-100 legal blogs by the ABA Journal each year for the past five years. This year, the list includes two patent law focused blogs: Patently-O along with Gene & Renee Quinn's IP Watchdog. Gene was running his popular site and working as a law professor even before I started law school. IP Watchdog was a great resource for me during law school both for Gene's straightforward explanation of the law as well as his practical guidance for those new to the profession.

Along with the listing of top-100 blogs, the ABA also conducts a public voting for the most popular blogs. In 2010, IP Watchdog was the winner, this year Patently-O won with a 49% to 41% final vote. Thanks to everyone who supported our cause! It is a great sign of the community and cooperative spirit associated with patent law professionals that both of our sites received more votes than 99% of the other law blogs. (I.e., only one site received more votes).

Of course, the Patent Law "blog-o-sphere" is not limited to our two sites. A few excellent sites that would have made my list include PatentDocs (Noonan, Zuhn, et al.), FOSSPatents (Mueller), IPKat & PatLit (Phillips, et al.), Biotech IP Blog (Holman), Inventive Step Blog (Osenga), PharmaPatents (Brinckerhoff), IP Spotlight (Singer), Just-a-Patent-Examiner, Patent Librarian (White), Green Patent Blog (Lane), All things Pros (Hazzah), TacticalIP (ZWM), Kappos Blog (Kappos), Gray on Claims (Gray), and Patent-Post-Grant, Chicago IP Litigation (Donoghue), SpicyIP, and ReexamAlert. (I apologize for missing a few good ones here). In my view, two holes are the absence of Joe Mullen's Prior Art blog and Frankel's Patent Troll Tracker. Although they don't have "blogs" per se, Hal Wegner and Greg Aharonian both deserve honorable mention here as the Deans and perhaps the Dons of patent blogs.  

2011 Patent Grants: A New Record

Patent

By Dennis Crouch

The USPTO issued more utility patents in calendar year 2011 than in any year in history. The 2011 total – just shy of 225,000 issued patents – is only a small increase over 2010, but towers above all other historic figures. The previous record was set in 2006 with about 173,000 issued utility patents. The dramatic rise in issuance rate is not tied directly to an increase in filings (although there has been a small increase in new application filings). Rather, the two-year increase appears to be the result of regime changes instituted by USPTO Director David Kappos who took office mid-year 2009 after being nominated by President Barack Obama.

Notes:

Loser Pays: Federal Circuit Affirms $4 Million Award of Attorney Fees and Costs

Patent

By Dennis Crouch

MarcTec LLC v. Johnson & Johnson and Cordis Corp. (Fed. Cir. 2012) (O’Malley, J.) on appeal from the Southern District of Illinois

In this decision, the appellate panel (Judges Newman, Prost, and O’Malley) focused on the question of whether the district court properly found the case “exceptional” leading to the award of attorney fees and expenses of over $4 million. Its answer –  Yes.

The patents in suit are directed to various surgical implants heat-bonded to antibiotic-containing polymer material. The district court construed the term “bonded” in a way that excluded the accused Cordis devices and thus resulted in a summary judgment of non-infringement. That decision was affirmed on appeal in 2010.

On remand, the district court determined that the case was “exceptional” because the patentee MarcTec’s attorneys had “engaged in litigation misconduct.” The particular misconduct was that MarcTec alleged theories of claim construction and infringement that were clearly incorrect.

MarcTec engaged in litigation misconduct when it: (1) misrepresented both the law of claim construction and the constructions ultimately adopted by the court; and (2) introduced and relied on expert testimony that failed to meet even minimal standards of reliability, thereby prolonging the litigation and the expenses attendant thereto.

Regarding its claim construction argument, the court found that MarcTec had improperly argued for a plain meaning interpretation of the term “bonded” despite clear language in the specification and prosecution history that contradicted the plain meaning being advanced. In the process, MarcTec misrepresented the law on claim construction and encouraged the court to ignore the specification unless it found an insoluble “ambiguity” in the claim language.  This mischaracterization of the law coupled with its unsupported allegations of infringement was sufficient to support the conclusion of litigation misconduct.

Patented or Described in a Printed Publication

Patent,

By Dennis Crouch

The newly revised 35 U.S.C. § 102 states that no patent shall issue if “the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention…” 35 U.S.C. §102(a).

My question for the hour is whether (or not) the word “patented” in this fundamental provision is entirely superfluous. In other words, when is a claimed invention “patented” but not described in a printed publication? I should note at this point that the pre AIA Section 102 also includes the statement that an invention is not patentable if it was already “patented or described in a printed publication.”

Patented but not Published: It is largely safe to assume that patents are published and, therefore, any disclosure found in a patent should also be considered to be “described in a printed publication.” A narrow exception to this aforementioned assumption can be derived from regular SNAFUs that occur in patent offices around the world that allow for patents to issue without actually being published. Historically, some countries also granted patentee’s a period of post-grant secrecy. US courts have ruled that these foreign patents still count as patented under the statute so long as the secrecy is only temporary and the patent is eventually and meaningfully “laid open for public inspection.” See In re Kathawala, 9 F.3d 942, 28 USPQ2d 1789 (Fed. Cir. 1993) and In re Carlson, 983 F.2d 1032 (Fed. Cir. 1992). The statute covers patents issued in any country and because the US has no direct control over how any particular country publishes its patents, the “patented” clause has the potential of potentially becoming meaningful if countries decide to again limit publication.

Patented but not Described?: There is also some potential that, even when a patent is published, a particular element in the prior art will covered by the patent claims but not sufficiently described to qualify under the “printed publication” leg of the clause. The enablement and written description requirements of 35 U.S.C. § 112 (as well as their worldwide equivalents) largely eliminate this possibility. However, the truth is that patents regularly issue that are directed to particular inventions but that are not fully enabled by the specification. In those cases it is quite possible that an invention be “patented” without being “described in a printed publication.” (Of course, this may be unlikely because US courts have placed such a low enablement requirement on prior art).

Thoughts?

2011 Recap: The Practically Important Elements of the America Invents Act of 2011

Patent, , , ,

As a new year begins, Paul Morgan reflects on the practical importance of the Leahy-Smith America Invents Act of 2011 – the major patent reform effort that was enacted in September 2011. Although admittedly oversimplified (like any short-list), Paul's list provides some food for thought for patent strategists. He looks forward to comments.

By Paul Morgan

1. Regarding the hyper-hyped "first inventor to file" replacing of "first to invent" — the number of situations in which two different parties file patent applications on the same or substantially the same invention, and the second to file obtains valid dominant patent claims, is miniscule (now less than 20 a year). Cases involving invention "derivation" are a small percentage of even that miniscule number. In other words, the removal of alleged prior "invention date" arguments is not a significant AIA change.

2. The most significant AIA changes, which will affect almost every patent applicant, are in the definitions of what counts as prior art. The AIA provides a considerable simplification (albeit with a few ambiguities). Also, most prior art will now become instant "bars-to-patentability." U.S. application foreign priority filing dates and foreign public disclosure dates both becoming U.S. prior art dates will provide a significant prior art increase. The ending of PTO Rule 131 alleged prior invention dates declarations "swearing behind" earlier prior art dates will have a limited effect on some patent grants, but little or no effect on successfully litigating patents. [Rule 131 declarations are ex parte, uncontested, and often inadequately examined, so they rarely survive litigation challenges and easily raise inequitable conduct issues.]

3. Delaying filing patent applications after publicly disclosing one's invention is foolishly dangerous now, and will remain so. It will also continue to destroy foreign patent rights. There is a [sole remaining] one year "grace period" for doing that, but that grace period is ambiguous as to its disclosure extent requirements and effect. Delaying the filing of at least provisional applications for new products still under development will become more dangerous even if kept secret, due to the above changes in prior art and its effective dates.

4. The AIA significant increases the value of trade secrecy protection (instead of or even in addition to patenting) for any inventions which can be kept secret while being commercially exploited. There is potential dual IP protection from the AIA elimination of "best mode" defenses. Even more so if disputed ambiguities in AIA 102(a)(1) are held to overrule the long-established Metalizing Engineering doctrine that "forfeits" patenting after having already commercially exploited an invention, which would allow tacking on full term patent protection after unlimited years of trade secrecy protection. A rather surprising impact of "patent" legislation.

5. The ability to eliminate any inequitable conduct defense before patent litigation is provided in the new "Supplemental Examination." [An ex parte reexamination solely for patent owners to request and participate in, and thus a potentially powerful new tool for patent enforceability, although its PTO rules and actual usage remain to be seen.]

6. Ending the "false marking suits" plague and the naming of numerous defendants in the same patent suit [to avoid venue transfers] is already accomplished. Also, there is a new "virtual" marking system that really ought to be used.

Finally, the practical effects of many other text-extensive AIA changes, such as the new or amended and Board-run inter partes reexaminations and 9 month only PGR opposition systems, are too soon to predict. Especially given their potentially dangerous estoppels, predictable higher costs, un-issued PTO rules, and the limited number of them that the PTO will accept each year.

Judge Newman Rejects Reexamination following Validity Verdict (in Dissent)

Patent, ,

by Dennis Crouch

There is a significant and growing overlap between patents in reexamination and patents in litigation.  These parallel processes raise practical issues priority and precedence between decisions by a court compared with actions by an executive agency.  In her recent dissent in the appellate decision of In re Construction Equipment Company (CEC), —- F.3d —-, 2011 WL 6224539 (Fed. Cir. 2011), Judge Newman argued that a reexamination proceeding requested by an accused infringer (PowerScreen) after a court had already finally rejected the accused infringer's obviousness defense should be considered an an unconstitutional violation of separation of powers and a violation of principles of res judicata and issue preclusion.  The majority (Judges Prost and O'Malley) affirmed the PTO determination on reexamination that CEC's claimed invention is obvious and therefore unpatentable.

The facts of the case are simple:

Litigation: In 1996, CEC sued PowerScreen for infringement. PowerScreen argued that the patent was invalid as both obvious and anticipate. However, the district court rejected those arguments and upheld the patent's validity and issued a permanent injunction. The Federal Circuit affirmed that decision in 2000. Powerscreen then unsuccessfully petitioned the Supreme Court for a writ of certiorari.

Reexamination: In 2007, PowerScreen decided to take another bite at the apple and filed a reexamination request - identifying the same prior art references rejected in the district court decision as well as a few others. See Reexam No. 90/008,447 (Fed. Cir. 2011).  The examiner rejected the claim, BPAI affirmed, and CEC appeal to the Federal Circuit. 

Back to Litigation: Based upon the reexamination results, PowerScreen would like for the district court to lift the permanent injunction.

Judgment:

The Majority rejected Judge Newman's contentions largely based upon the Federal Circuit's 2008 Swanson decision.  In that case, the court allowed a reexamination to proceed even though the requesting party had unsuccessfully asserted some of the same prior art in litigation of the same patent.  There, the court explained the general principle that issue preclusion does not apply to patent validity judgments (although it does apply to patent invalidity judgments).

Open door to estoppel: Although the majority agreed that the patent was properly invalidated during the reexamination, it refused to opine on whether the adjudged infringer “might or might not be entitled to seek abrogation of the injunction” based upon the reexamination results.

Invalidity affirmed.

Notes on the Case:

  • As an aside, at oral arguments, Judge O'Malley asked the patentee to explain the “points of novelty” of the invention.
  •  Scott A. McKeown writes that under this case “the infringer could attempt to 'undo' the effect of the earlier, final, court judgement by invalidating the patent via the EXP filing.”
  • Michael Barclay writes “Judge Newman sure likes patents.”
  • PHawk writes that the “ruling is merely exemplary of the present policy to eviscerate patent protection for all but large corporations.”