May 2012

Mintz v. Dietz & Watson: Hindsight and Common Sense

By Jason Rantanen

Mintz v. Dietz & Watson, Inc. (Fed. Cir. 2012) Download 10-1341
Panel: Rader (author), Newman, Dyk

Although concerns about hindsight never disappeared from Federal Circuit opinions on obviousness following KSR, it did seem for a time that the court backed away from strong language about hindsight.  The court's opinion in this case exhibits no such timidity.

The Mintzes invented a casing structure for meat products that permits the meat to bulge between netting strands while avoiding the more complex stuffing process associated with prior knitted meat encasements (Patent No. 5,413,148). Package Concepts & Materials, Inc., a former distributor of Mintz products, filed a declaratory judgment action against Mintz and Mintz filed a patent infringement action against PCM.  During the consolidated infringement proceeding the district court granted summary judgment of obviousness as to the '148 patent.  On appeal, the Federal Circuit reversed. 

Hindsight as a major continuing concern: The most striking aspect about the Federal Circuit's opinion is the strong language it uses when discussing the need to avoid hindsight bias when analyzing obviousness.  The opinion uses the word "hindsight" repeatedly, warning against "the forbidden use of hindsight" and the "prohibited reliance on hindsight," as well as the need for "a court to walk a tightrope blindfolded (to avoid hindsight)."  Compare this with KSR: "A factfinder should be aware, of course, of the distortion caused by hindsight bias and must be cautious of arguments reliant upon ex post reasoning…Rigid preventative rules that deny factfinders recourse to common sense, however, are neither necessary under our case law nor consistent with it."  KSR v. Teleflex, 550 U.S. 398, 421 (2007).  (Mintz does not cite KSR at any point).

Consistent with its view on hindsight, the opinion seeks to avoid such bias in three ways: by requiring that "common sense" be articulated, by avoiding the use of the patent itself in defining the problem the invention solves, and by emphasizing the need to analyze the objective indicia of nonobviousness. 

"Common sense" must be articulated: In its obviousness determination, the district court relied on a "common sense approach" to conclude that it would have been "obvious to try" an element of the claimed invention.  The CAFC held that more is required than simply saying the words "common sense": "With little more than an invocation of the words "common sense" (without any record showing that this knowledge would reside in the ordinarily skilled artisan), the district court overreached in its determination of obviousness."  Slip Op. at 9.

Nonobvious question/obvious solution: The CAFC also found that the district court erred by using the invention to define the problem that the invention solves.  This was problematic because it may be the problem itself that is nonobvious – once the problem is known the solution may be virtually certain.  "Often the inventive contribution lies in defining the problem in a new revelatory way."  Slip. Op. at 9. This is consistent with KSR - solutions to a problem cannot be "obvious to try" if the problem itself is not known or obvious. 

Objective indicia of nonobviousness: A classic tool for avoiding reliance on hindsight is use of the objective indicia of nonobviousness.  They "help inocolate the obviousness analysis against hindsight,"  Slip Op. at 10, and "turn back the clock and place the claims int he context that led to their invention."  Id. at 11.  Consideration of these indicia is not discretionary; it is mandatory.  By failing to give substantive consideration to the objective evidence of nonobviousness presented by Mintz, the district court erred.   

Summary judgment of noninfringement was also at issue on appeal; the CAFC affirmed the district court on that issue. 

Guest Post by Michael Risch: America’s First Patents

Guest Post by Michael Risch, Associate Professor of Law, Villanova University School of Law

My forthcoming Florida Law Review article, America’s First Patents, examines every available patent issued during the first 50 years of patenting in the United States.  A full draft is accessible at this SSRN page. The article reaches three conclusions:

  1. Our patentable subject matter jurisprudence with respect to methods can, in part, blame its current unclarity on early decisions by a few important judges to import British law into the new patent system.
  2. Early patenting trends suggest that Congress has never intended new subject areas be limited until Congress explicitly allowed the new subject area.
  3. The machine-or-transformation test, which allows a method patent only if the process involves a machine or transforms matter, has no basis in historic patenting practices.

When the Federal Circuit first issued its en banc opinion in In re Bilski, I believed that its machine or transformation rule could not have been based on history. I wrote in my 2010 article Forward to the Past that:

in its effort to deal with high technology, the [Federal Circuit] abandoned low technology. There are many patented processes that have nothing to do with machines or transformations—methods for measuring fabric, methods for harvesting fruit, and methods for manufacturing products by hand (for example, forming wrought iron). At worst, these types of historically patentable inventions would now be unpatentable. At best, determining what is patentable and what is excluded became much more difficult.

However, I did not have any real proof to support this statement, so I thought I would test the assertion with some quasi-empirical evidence. I spent the summers of 2010 and 2011 working with several research assistants, and we read every available patent we could find, a total of about 2500 before 1836 (most of our pre-1836 patents were destroyed in an 1836 Patent Office fire), and 1200 between 1836 and 1839. The goal was, first, to categorize patents as methods and, second, to determine whether each method used a machine or transformed matter to a new thing.

This was no easy task. Many early patents were difficult to read, and not just because they were handwritten. At the time, inventors did not have to claim their subject matter. As a result, patents usually described how to make or do something, and nothing more. It was often difficult to tell whether the making or the thing made was purportedly inventive. Even after more inventors started using claims, patentees would claim the exclusive right to “manufacture product X by doing Y,” which still left matters unclear.

This difficulty leads to my first conclusion. While courts often talked about “principles” in early judicial opinions, quite often they were attempting to determine the “principle of the machine” to identify what was patented for infringement purposes. Even when courts mentioned that principles were not patentable, the statement was usually a side issue and “principles” meant very basic principles, like “motion.” Because principles were not patentable, courts attempted to construe the patent in a way that was not a principle. This, it seems, is contrary to how we do things under recent cases.

In reading this old history, I discovered something interesting (and I don’t claim to be the first person to discover it – merely the first to tie the content of old patents to support the conclusion). Specifically, early judges imported British law into interpretation of the American statute. This might seem reasonable, except that methods were not patentable in England until after 1840.  But methods were explicitly patentable (called “art” in the statute) in the U.S. Indeed, the very first patent covered a method of making pot and pearl ash. But Justice Story, who sat as a Circuit Justice in many patent cases, did not think methods should be patentable, and as such issued statements in many cases about what could not be patented – statements that have been repeated even until today. My article looks at these statements in detail, and shows how unclarity in early patents allowed the courts to perpetuate a (wrong) view that we must limit method patents in particular ways.

In the second part of the article, I discuss some general findings about the patents. Some were dangerous (lead paint and asbestos), some were ridiculous, and some were enduring. There were many business methods related to teaching , music, and exercise, and there was even a rudimentary software patent (on a Jacquard loom, though I know some think that this is not really software). This was an entertaining part of the article to write; it was interesting to see how industries developed through patents. However, there is one overriding theme: the patents started simple, grew more complex over time, and expanded to new subject matter over time. Further, very little of the subject matter that dominates today’s inventions—such as electronics, chemicals, and pharmaceuticals—was apparent in early patenting. My conclusion from this analysis is that the patent system was designed to handle new subject matter as it is invented, and that Congress never expected to step in and approve new subject matter over time.

The final part of the article examines the motivating issue: whether the machine or transformation test was historically used. Because patents from 1793-1836 were not examined by the Patent Office but those from 1836-1839 were, I could test whether inventors had a different view of this issue than patent examiners had. It turns out that the groups did not differ; the results are statistically the same before and after 1836.

And those results show that our first inventors did not limit methods to those that used machines or transformed matter. About 40% of the methods patents between 1790 and 1793 did not use a machine or transform matter.  These would all be invalid under the modern test. To be sure, the test was very good at identifying business methods—nearly all of the business methods fell into that 40%, so it is hard to fault the test for failing to identify early business methods.  Of course, today’s business methods do use machines, so I am not sure how accurate the test would be today.

However, there were many patents –many more than the business methods—that did not use a machine or transform matter.  This, to me, suggests that among the tests other failings, it has no real basis in past practice or understanding. While we can debate the merits of the recent Prometheus opinion, I applaud its rejection (again) of the machine or transformation test as a way to determine patentable subject matter.

This post presents the basic conclusions of my article. There is obviously much more in this 50 page paper than I can write here. I detail my methodology (and its limits), 19th century law, and the patents in the full paper.

Racing Procedures: Federal Circuit Refuses to Stay Reexam Appeal to Wait for Parallel District Court Appeal

by Dennis Crouch

Bunzl Processor Distribution v. Kappos (Fed. Cir. 2012) (nonprecedential order)

Bunzl and Bettcher are in a longstanding battle over the exclusive rights to make and sell a rotary knife blade used in meat processing. The patents include Bettcher’s Patent Nos. 7,000,325 and 8,074,363 and the pending lawsuits include three district court cases and an inter partes reexamination.

The ‘325 infringement lawsuit and the parallel inter partes reexamination were filed in 2008.  Bunzl recently filed a declaratory judgment action on the newly issued ‘363 patent.

Bettcher is winning the reexamination.  The USPTO Board of Appeals recently re-affirmed the examiner’s decision to confirm the patentability of the pending claims. Bunzl initially won the infringement lawsuit, but after being partially reversed on appeal, that case appears to be headed for a new trial in the near future. 

In light of the pending infringement trial, Bunzl asked the Federal Circuit to stay the reexamination appeal proceedings so that the whole case could be appealed at once.  In a short non-precedential opinion, Judge Newman has rejected that plea. She writes:

The power of the Court to stay proceedings is incidental to its inherent power to control the disposition of the cases on its docket. See Landis v. North Am. Co., 299 U.S. 248, 254 (1936). Here, we cannot say Bunzl has shown that staying proceedings for such a lengthy period of time is warranted.

Thus, the cases will continue in parallel. The appellate briefs will likely be due before the trial and jury verdict.  The appellate decision will then likely issue around the same time as the judge’s post-verdict order on the inevitable motions. There is a likelihood that the results from the two bodies will be inconsistent.  However, our system has a fairly consistent approach to determining the hierarchy of decision in patent cases.  

Parallel patent proceedings within the US have created a whole new set of litigation strategies and difficulties.  Of course, those strategies will change once again in the coming years as we implement the new post grant review proceedings of the AIA.

Note: In this order, Judge Newman was the sole decision maker acting in her role as motions judge for the month.

Survey Response: Is the patent invalid?

by Dennis Crouch

PatentlyO144Last week I asked readers their thoughts on the validity of claim one of U.S. Patent No. 8,185,967.  The patent issued recently to Digimarc and is titled a Method and apparatus for content management.  Of the 917 responses, I removed 4 for inconsistent responses* and 11 for failing to complete the one-question survey.   Of the remaining, 24% concluded that the claim was valid; 65% concluded that the claim was invalid, and 11% had no answer. The most common reason for invalidity: Obviousness followed by lacking patentable subject matter under section 101.** 

PatentlyO145

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* Four of the responses indicated that the claim was both valid and invalid.

** The survey allowed for the selection of multiple answers. About 9% of responses selected two or more answers. The most common multiple selection was that the patent was both invalid under 101 and invalid as obvious.

 

 

 

Substantial Evidence on Appeal

by Dennis Crouch

In re Hyon (Fed Cir. 2012)

Hyon’s patent covers a method for producing a high molecular weight polyethylene to be used as a prosthesis.  In a broadening reissue application, Hyon added several claims.  Those claims were rejected as obvious by the examiner and the Board of Patent Appeals (BPAI). In a split opinion, the Federal Circuit has now affirmed those rejections. 

The question on appeal was whether the PTO properly combined the two identified prior art references in forming an obviousness rejection.  Because this issue is considered a factual question, the PTO decision making is given deference and only overturned if the decision lacks substantial evidentiary support.  This "substantial evidence" standard is quite low and requires the Federal Circuit to affirm even when the panel might have reached a different conclusion in a de novo review.

The “existence of a reason for a person of ordinary skill to combine references” is a question of fact that we review for substantial evidence. Because the Board’s findings concerning motivation to combine are supported by substantial evidence, we affirm.

The dissent by Judge Newman argues that the one skilled in the art would not have been motivated to combine the two references as suggested by the PTO. Interestingly, Judge Newman does not mention the substantial evidence standard while the Bryson majority repeats the standard six times in the ten page opinion.

Appellate attorneys understand the importance of the standard of review.  This case highlights this reality and suggests that applicants may be better served to include arguments directed to the ultimate question of obviousness (de novo review) rather than merely challenging the PTO's factual findings.  Although perhaps cost prohibitive, challenging PTO factual findings are best pursued in a civil action.

Patent of the Day: Protecting Copyright through Patents

This morning I was browsing through some patents. The first one I looked at is Patent No. 8,185,967 issued to Digimarc and titled a Method and apparatus for content management.  The patent claims priority to a series of continuations that lead back to a provisional application filed in 1999.  And, the gist of the invention appears to be a technological method for enforcing a licensing agreement that limits the number of times a video is accessed by users.  

The patent’s claim 1 includes two basic steps: (1) maintaining a list of identifiers associated with previously accessed A/V items; and (2) restricting access to those A/V items.  The claim includes a limitation that the steps occur using “electronic memory” and a “programmed electronic processor” that are part of a “portable device.”

Claim 1 reads as follows:

1. A method comprising:

utilizing electronic memory housed in a portable device, maintaining a listing of up to N identifiers associated with previously accessed audio or video items, where N is an integer, and where each previously accessed audio or video item has an identifier associated therewith;

utilizing a programmed electronic processor housed in the portable device, i) restricting access to an encountered audio or video item if an identifier associated with the encountered audio or video item is one of the N identifiers associated with the previously accessed audio or video items, or ii) limiting a number of content items each with a different user identifier associated therewith that can be accessed in a certain amount of time. 


 

Guest Post: Myriad Misunderstandings of Parke-Davis v. Mulford

Guest Post by Jon M. Harkness. Dr. Harkness is a historian and a newly minted patent attorney. This post is based on his examination of the 1911 Learned Hand adrenaline case, Parke-Davis v. Mulford, which undergirds some of the policies at stake in AMP v. Myriad. His recently published JPTOS article covers the topic in more detail. Download 93JPTOS2011Readers can reach Dr. Harkness directly at jon.harkness@comcast.net.

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Students of patent law are taught that purified or isolated products of nature possessing utility can be patented because—essentially—"Learned Hand said so" in a case about adrenaline:

[E]ven if it were merely an extracted product without change, there is no rule that such products are not patentable. Takamine [the inventor] was the first to make it available for any use by removing it from the other gland-tissue in which it was found, and, while it is of course possible logically to call this a purification of the principle, it became for every practical purpose a new thing commercially and therapeutically. That was a good ground for a patent. Parke-Davis & Co. v. H.K. Mulford Co., 189 F. 95, 103 (C.C.S.D.N.Y. 1911)

Briefs in the AMP v. Myriad "gene patent" suit are thoroughly sprinkled with references to this language, and all four judicial opinions that have been rendered to date in Myriad have discussed this aspect of Learned Hand's 1911 adrenaline opinion.

But it seems that no one has previously taken a close look at what actually happened in this old case. In the spring of 2011, I decided to quench my curiosity by visiting the New York branch of the National Archives to examine approximately 1,000 pages of records from Parke-Davis held there. (Coincidentally, my first day in the archives was the same day that the Federal Circuit initially heard oral arguments in Myriad.)

Two major revelations emerged from my research. First, the prosecution of the Adrenalin patent application, between the fall of 1900 and the spring of 1903, involved an extended debate on the product-of-nature problem. Perhaps my most important finding is that this debate took place within the bounds provided by an 1889 case, Ex parte Latimer, in which a patent on the isolated fibrous core of a pine needle had been rejected as constituting unpatentable subject matter. Download 1889 Dec Commr Pat 123 ex parte Latimer. Relatively early in the Adrenalin patent application process, the applicant, Jokichi Takamine, and his attorneys acknowledged that Latimer provided "the official interpretation of the doctrine involved." Thus, Takamine was forced to argue that his product was chemically different than the hormone—not just purified or isolated. (The arguments were somewhat abstract because the applicant did not know the precise chemical formulae for either his medical product or the naturally occurring hormone.)

The patent examiner, James B. Littlewood (an M.D. with formal training in patent law, who had been head of the USPTO's Division of Chemistry for a decade) was not easily convinced. For example, after one lengthy attempt by Takamine to argue that Adrenalin was "a new article . . . not anticipated by a naturally existing article as was Latimer's claim," Littlewood stated his objections in especially blunt and revealing terms: "The argument of applicant has been carefully read but it is fatally defective for the reason that the product he obtains . . . is simply separated from impurities." Littlewood explicitly pointed to Latimer to justify his rejection: "The examiner does not assert that the active principle [of the adrenal gland] exists, freed from impurities in nature; neither did Latimer's fibre; but it did exist and therefore is not patentable." (A copy from this exchange can be seen here: Download 889-890 Littlewoood rejection.)

Takamine's attorneys never argued that the Latimer rule was invalid nor did they argue that Littlewood's understanding of the rule was flawed. Instead, they repeatedly attempted to convince Littlewood that Adrenalin was something other than a purified or isolated version of the naturally occurring hormone. Eventually, Littlewood accepted this line of argumentation and granted a product patent.

The second major revelation that emerged from my research is that—by contrast to patent prosecution for Adrenalin—the patent litigation between Parke-Davis and Mulford had nothing to do with Adrenalin being an isolated or purified product of nature. It was basically a protracted priority/novelty dispute. None of the briefs submitted to Learned Hand mentioned the product-of-nature issue. And here's some especially striking evidence: each side had a top-notch expert witness, and during a combined total of 53 (!) days of depositions neither expert was asked a single question on the issue of whether Adrenalin was an unpatentable product of nature. Perhaps most significantly, Latimer was not mentioned in a single brief, and Learned Hand (who was less than two years removed from a Wall Street law practice when he wrote his Parke-Davis opinion) seems to have been completely unaware of Latimer—as is implied by Hand's blanket assertion that there was "no rule" against patenting "an extracted [natural] product without change."

Hand's dicta from Parke-Davis essentially lay dormant until 1958, when it was relied upon by Fourth Circuit judges grappling with the patentability of vitamin B12. Merck & Co. v. Olin Mathieson Chemical Corp., 253 F.2d 156 (4th Cir. 1958). By 1958, Learned Hand had, of course, become a living legal legend. His judicial colleagues did not recognize that 47 years earlier, a 39-year-old district court judge had made an under-informed mistake in Parke-Davis. In the years since 1958, Hand's Parke-Davis pronouncements have ascended from obscurity to conventional wisdom.

The major policy point of my article is that those concerned with patent law should no longer view Learned Hand's product-of-nature language in Parke-Davis as flowing from the pen of a jurisprudential giant who had weighed vigorously debated points and counter-points on a challenging legal question. In reality, what we have are poorly informed musings of a young district court judge grappling with one of his first patent cases. If the Federal Circuit (or, later, the Supreme Court—or even Congress) should decide that granting patents on isolated sections of DNA is legitimate, this would not change the historical reality that Learned Hand misstated the law as it existed in 1911. We might, however, need to reclassify his error as a lucky mistake.

USPTO Proposes CPI Fee Increase

The USPTO has published a new set of fee increase for patent prosecution based on inflation as calculated by the Consumer Price Index (CPI).   Although the exact rise in fees is not set, the PTO expects that the increase will be approximately 2.9% and become effective on October 1, 2012.  The PTO interprets its CPI fee adjustment power as separate from its newfound fee setting authority provided in the America Invents Act of 2011.  Thus, this increase will likely stack onto the proposed fee structure alterations that are expected to be finalized later this summer. 

Written comments are due by June 13, 2012 and can be submitted through the US Government’s eRulemaking portal or by emailing Gilda.Lee@uspto.gov

(RIN) RIN 0651–AC55.

Appealing Obviousness not the Factual Basis for Obviousness

Plasmart v. Kappos & Wang (Fed. Cir. 2012)

Jar Chen Wang‘s company Wincell sells the TwistCar and owns patent No. 6,722,674. PlaSmart sells the similar product – PlasmaCar. The toy cars look virtually identical to one another and operate the same way – twisting the handlebars make them go. 

Wang threatened, PlaSmart sued for DJ and then filed for inter partes reexamination in 2008. As with all reexaminations, the issue is whether the prior art renders the claimed invention unpatentable. The BPAI found several of the claims patentable. On appeal, however, the Federal Circuit has reversed.

USPTO Board factual findings are reviewed for substantial evidence. This is a low standard that results in an affirmance so long as more than a scintilla of evidence supports the Board’s conclusions. Legal conclusions made by the Board are reviewed de novo. Thus, as you might imagine,

Obviousness is somewhat tricky – the ultimate conclusion of obviousness is a question of law. However, that conclusion must be based upon factual predicates outlined in Graham v. John Deere Co., 383 U.S. 1 (1966). In KSR, the Supreme Court wrote that “[t]he combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results.” KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007). That statement seems to be one applied as part of the final question of obviousness that would also be reviewed de novo on appeal.

Factual versus Legal Conclusions: The language of the opinion here is somewhat unclear, but the Federal Circuit appears to have accepted all of the BPAI’s factual findings regarding the scope and content of the prior art; the level of skill in the art; and the differences between the claimed invention and the prior art. However, the court rejected the BPAI’s ultimate conclusion obvious – holding that the “minor distinctions” identified by the Board were insufficient to distinguish the claimed invention from the prior art.  Another way to look at the case is that the court rejected the Board’s factual conclusion that the differences between the claimed invention and the prior art were major.

This case highlights the trouble that I have in our obviousness jurisprudence. In most cases, the Graham analysis does not do a very good job of leading to an answer of the obviousness question.  Thus, even after determining the scope and content of the prior art; the differences between the claimed invention and the prior art; the level of ordinary skill in the prior art; and any secondary factors, the court (or PTO) still has a large amount of analysis/discretion in determining whether those factors lead to a conclusion of obviousness. 

Patentable Subject Matter: Supreme Court Challenges Chief Judge Rader’s Broad Notion of Software Patentability

by Dennis Crouch

WIldTangent v. Ultramercial (Supreme Court 2012) Docket No 11-962

The Supreme Court has rejected another Federal Circuit patentable subject matter decision with a GVR and has ordered the appellate court to review its patentability decision with further consideration of Mayo Collaborative Services v.Prometheus Laboratories, Inc., 566 U.S. ___ (2012). In its standard GVR language, the Supreme Court wrote:

The petition for a writ of certiorari is granted [G]. The judgment is vacated [V], and the case is remanded [R] to the United States Court of Appeals for the Federal Circuit for further consideration in light of Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. ___ (2012).

The patent at issue in this case claims a particular method for distributing copyrighted products over the Internet. Patent No. 7,346,545. The basic gist of the invention is that the consumer receives a copyrighted product in exchange for viewing an advertisement — and it all takes place over the internet and with a particular monetization scheme.

In its broadly written opinion, the Federal Circuit (Rader, C.J.) found the claimed invention patentable under Section 101 based upon the requirement that a computer be used to perform the method and the programming complexity required to carry out the claimed elements. The court wrote that while “the mere idea that advertising can be used as a form of currency is abstract, just as the vague, unapplied concept of hedging proved patent-ineligible in Bilski,…the ’545 patent does not simply claim the age-old idea that advertising can serve as a currency. Instead, the ’545 patent discloses a practical application of this idea.”

Following the Federal Circuit decision in Ultramercial, the Supreme Court decided Mayo v. Prometheus. In that case, the Supreme Court rejected the Prometheus patent as effectively encompassing an unpatentable law of nature. That revives the historic notion that the scope of knowledge held in the prior art is an important aspect of the Section 101 analysis.

The Supreme Court issued a parallel GVR in the gene-patent case of Myriad Genetics. Other pending 101 appeals include Fort Properties v. American Master Lease (en banc petition); Accenture Global v. Guidewire; Bancorp Services v. Sun Life; and others.

Claim one the ’545 patent reads as follows:

1. A method for distribution of products over the Internet via a facilitator, said method comprising the steps of:

a first step of receiving, from a content provider, media products that are covered by intellectual-property rights protection and are available for purchase, wherein each said media product being comprised of at least one of text data, music data, and video data;

a second step of selecting a sponsor message to be associated with the media product, said sponsor message being selected from a plurality of sponsor messages, said second step including accessing an activity log to verify that the total number of times which the sponsor message has been previously presented is less than the number of transaction cycles contracted by the sponsor of the sponsor message;

a third step of providing the media product for sale at an Internet website;

a fourth step of restricting general public access to said media product;

a fifth step of offering to a consumer access to the media product without charge to the consumer on the precondition that the consumer views the sponsor message;

a sixth step of receiving from the consumer a request to view the sponsor message, wherein the consumer submits said request in response to being offered access to the media product;

a seventh step of, in response to receiving the request from the consumer, facilitating the display of a sponsor message to the consumer;

an eighth step of, if the sponsor message is not an interactive message, allowing said consumer access to said media product after said step of facilitating the display of said sponsor message;

a ninth step of, if the sponsor message is an interactive message, presenting at least one query to the consumer and allowing said consumer access to said media product after receiving a response to said at least one query;

a tenth step of recording the transaction event to the activity log, said tenth step including updating the total number of times the sponsor message has been presented; and

an eleventh step of receiving payment from the sponsor of the sponsor message displayed.

Guest Post by Sarah Burstein: Apple v. Samsung

Guest post by Sarah Burstein, who will joining the faculty of University of Oklahoma College of Law this August.  Her research focuses on design patents, an important piece in the smartphone wars. – Jason

Apple, Inc. v. Samsung Electronics Co., Ltd. (Fed. Cir. 2012) Download 12-1105

Panel:  Bryson (author), O’Malley (concurring in part and dissenting in part), Prost

On May 14th, the Federal Circuit issued its first opinion in the world-wide, multi-front patent war between Apple and Samsung.  In this opinion, the Federal Circuit considered the district court’s denial of Apple’s motion for a preliminary injunction based on infringement of three design patents and one utility patent, affirming in part and vacating in part.  The opinion provides notable holdings in the areas of irreparable harm and nonobviousness.

In the motion, Apple argued that Samsung’s Galaxy S 4G and Infuse 4G smartphones infringed U.S. Des. Patent No. 618,677 (“the D’677 patent”) and U.S. Des. Patent No. 593,087 (“the D’087 patent”) and that Samsung’s Galaxy Tab 10.1 tablet computer infringed U.S. Des. Patent No. 504,889 (“the D’889 patent”).  Apple also argued that all three of the devices—along with Samsung’s Droid Charge phones—infringed U.S. Patent No. 7,469,381 (“the ’381 patent”), which claims the iPad and iPhone “bounce” feature.  The district court denied the motion based on, among other things, its findings that:  (1) Samsung had raised substantial questions regarding the validity of the D’087 and D’889 patents; and (2) although the D’677 and ’381 patents were likely valid and infringed, Apple had failed to provide sufficient evidence on the issue of irreparable harm.

On appeal, the Federal Circuit affirmed the denial of preliminary injunctive relief with respect to the D’677, D’087, and ’381 patents based on a lack of irreparable harm.  The Federal Circuit concluded that the district court had not abused its discretion in finding no likelihood of irreparable harm with respect to the D’677 and ’381 patents.  And although the Federal Circuit rejected the district court’s conclusion that the D’087 was likely anticipated, it still found no abuse of discretion in the denial of the preliminary injunction “[b]ecause the irreparable harm analysis is identical for both smartphone design patents.”

On the issue of irreparable harm, the Federal Circuit rejected Apple’s argument that the district court erred in requiring Apple to demonstrate a nexus between the claimed infringement and the alleged harm.  According to the Federal Circuit:  “If the patented feature does not drive the demand for the product, sales would be lost even if the offending feature were absent from the accused product.  Thus, a likelihood of irreparable harm cannot be shown if sales would be lost regardless of the infringing conduct.”  On appeal, Apple had argued that the district court had erred in rejecting Apple’s dilution theory of irreparable harm.  The Federal Circuit disagreed, noting that “[t]he district court's opinion thus makes clear that it did not categorically reject Apple's ‘design erosion’ and ‘brand dilution’ theories, but instead rejected those theories for lack of evidence.”  However, the Federal Circuit agreed with Apple that it “would have been improper” for the district court to completely reject “design dilution as a theory of irreparable harm.”  The Federal Circuit did not explain why it “would have been improper” or provide any further explanation.

The Federal Circuit did, however, vacate the denial of preliminary injunctive relief with respect to the D’889 patent.  The district court had found that the D’889 patent was likely obvious, using a 1994 tablet design (the “Fidler tablet”) as the primary reference.  In the design patent context, any finding of obviousness must be supported by a primary reference—i.e., there must be “something in existence” that has “basically the same” appearance as the claimed design.  If a primary reference is found, then the analysis proceeds.  But if there is no primary reference, the inquiry ends—the design cannot be obvious.  The Federal Circuit disagreed with the district court, holding that the Fidler tablet was not a proper primary reference.  The Federal Circuit stated that “[a] side-by-side comparison of the two designs shows substantial differences in the overall visual appearance between the patented design and the Fidler reference,” pointing to the following illustration: 

  References

Without a primary reference, the district court’s finding that Apple was unlikely to succeed on the merits could not stand.  And the district court had found that Apple had demonstrated a likelihood of irreparable injury with respect to the D’889 patent.  However, because the district court had not made any findings on two of the preliminary injunction factors—the balance of harms and the public interest—the Federal Circuit remanded this portion of the case for further proceedings. 

In her partial dissent, Judge O’Malley disagreed that the case should be remanded for further proceedings.  According to Judge O’Malley, the district court’s discussion of these factors with respect to the other smartphone patents supported the entry of an injunction against the Galaxy Tab 10.1.  Judge O’Malley also expressed concern that the remand would create undue delay, stating that “courts have an obligation to grant injunctive relief to protect against theft of property—including intellectual property—where the moving party has demonstrated that all of the predicates for that relief exist.”

Comment:  The Federal Circuit’s conclusion regarding the Fidler tablet was surprising.  Only a few years ago, a leading commentator observed that “[a]s a practical matter, [the requirement that the designs have ‘basically the same’ design characteristics] means that the primary . . . reference in a §103 design case needs to illustrate perhaps 75-80% of the patented design.”  Perry J. Saidman, What Is the Point of the Point of Novelty Test for Design Patent Infringement?, 90 J. Pat. & Trademark Off. Soc’y 401, 419 (2008).  Using that rule of thumb—or really, any ordinary meaning of the phrase “basically the same”—the Fidler tablet would easily qualify as a primary reference.  Of course, that would not mean that the D’889 patent was obvious; indeed, there does not seem to be (at least from the public portion of the record) any persuasive evidence that an ordinary designer would have been motivated to modify the Fidler tablet in the manner shown in the D’889 patent.  But this strict reading of the “basically the same” requirement may make it more difficult to prove obviousness in future design patent cases.  And while it’s too early to declare a trend, it is worth noting that the Federal Circuit affirmed a rather strict reading of this requirement last year in Vanguard Identification Systems, Inc. v. Kappos (a case I discussed in a recent article). 

The other especially striking portion of this opinion is the Federal Circuit’s unquestioning acceptance of Apple’s “design dilution” theory of irreparable harm.  This sort of express equation of the harm caused by design patent infringement with the harm caused by trademark dilution is unprecedented in design patent case law (although not in the academic literature) and Apple’s theory deserves more attention and consideration than the Federal Circuit appears to have given it in this case.

Federal Circuit Annual Conference

I’m sorry that I can’t make it to Thursday’s Federal Circuit Judicial Conference at the Grand Hyatt in DC. The program looks excellent, including discussions from most of the Federal Circuit Judges, Supreme Court Chief Justice Roberts, Congressman Issa, David Kappos, BPAI Director Smith and many others.  Perhaps most interesting will be a set of mock-oral arguments before a set of German judges followed by a discussion of differences. Register at the conference for $425. http://pacer2.cafc.uscourts.gov/conf/

 

 

Patently-O Bits & Bytes by Lawrence Higgins

Freedom of Speech and Facebook

  • Technology is forever changing, and with technological change there is also legal change. In a recent Virginia District Court case, the judge decided that liking a Facebook page is not protected speech. The judge stated that, "It is the court's conclusion that merely 'liking' a Facebook page is insufficient speech to merit constitutional protection. In cases where courts have found that constitutional speech protections extended to Facebook posts, actual statements existed in the record." I would like to think that if I like a page or a comment on Facebook or any other website with similar features that it is protected under law. Eugene Volokh of the University of California recently stated in a blog post that: A Facebook "like" is a means of conveying a message of support for the thing you're liking. That's the whole point of the "like" button; that's what people intend by clicking "like," and that's what viewers will perceive… I would treat "liking" as verbal expression — though it takes just one mouse-click, it publishes to the world text that says that you like something. But even if it's just treated as symbolic expression, it is still constitutionally protected, as cases such as Texas v. Johnson (1989) (the flag-burning case) show." [Link] Case

AOL Will "Supposedly Give Shareholders Proceeds From Patent Sale

  • Last month AOL sold an estimated 800 patents to Microsoft for around $1 billion. When making the sale, AOL stated that they would give significant amount of the sales proceeds to shareholders. Subsequently, AOL shares rose 35% in April and is currently trading around $26.50 per share. AOL's CEO recently stated that AOL will give 100% of the proceeds of the sale to shareholders, with details to be released. [Link] [Link]

Chisum Patent Academy

  • Earn Advanced Patent Law CLE in Spectacular Seattle This Summer: The Chisum Patent Academy is now accepting registrations for its 4th annual summer seminar in Seattle, July 30 – August 1, 2012. Their uniquely insightful, interactive seminars are limited to 10 participants. All sessions are taught by Donald Chisum and Janice Mueller. For further details on seminar coverage and registration information, see http://www.chisumpatentacademy.com or e-mail mailto:info@chisum.com

Patent Jobs:

  • Faegre Baker Daniels is seeking a patent associate with 2-6 years of experience to work at their Minneapolis office. [Link]
  • Luminex is searching for a patent associate with 3-6 years of experience and a graduate degree in molecular bio to work at their Austin, Texas location. [Link]
  • Faegre Baker Daniels is looking for a patent litigation associate with 1-2 years of experience to work at their Indianapolis office. [Link]
  • North Star IP is seeking patent associates with 3 to 4+ years of experience and a background in EE, CS, or CE to work at their Washington DC office. [Link]
  • Finnegan is searching for an attorney with a background in electrical technologies and 1 to 3 years of experience in patent prosecution or litigation to work at their Reston, VA office. [Link]
  • Tarolli, Sundheim, Covell & Tummino is looking for a patent attorney with at least 4 years of experience and a chemical or biochemical background to work at their Cleveland office. [Link]
  • Hickman Palermo Truong Becker Bingham Wong is seeking attorney with 2+ years of experience and a degree in CS, EE, CE, or physics to work at their San Jose office. [Link]
  • Dickstein Shapiro is searching for 2 IP associates with 2-5 years of experience in prosecution and litigation and a degree in EE to work at their DC office. [Link]
  • Tokyo Electron is looking for a patent agent/attorney with 5 years of experience and an advanced degree in EE to work at their Austin, Texas location. [Link]
  • Hiscock & Barclay is seeking patent attorneys and patent agents with 3-5 years of experience to work in their upstate NY office. [Link]
  • Hodgson Russ is searching for a patent attorney with at least 2 years of experience with a degree in EE to work at their Buffalo, NY office. [Link]
  • Myers Wolin is looking for a partner level attorney (patent or trademark) for their Morristown, NJ office. [Link]
  • Brooks Kushman is seeking a patent attorney with an EE or CS degree and 3-6 years of experience to work at their Southfield, Michigan office. [Link]
  • Michaud-Kinney Group is searching for an IP attorney with a chem or bio background and at least 3 year of experience to work at their Middletown, Connecticut office. [Link]
  • Sutherland is looking for an associate or patent agent with a degree in EE, CE, CS, or a related discipline to work at their Atlanta or Austin office. [Link]
  • Abel IP is seeking a patent associate with 4+ years of experience in the chemical and/or ceramic materials art areas to work at their Austin, Texas office. [Link]
  • Murphy, Bilak & Homiller is searching for a patent attorney or patent agent with 1-4 years of experience and a degree in EE to work at their Cary, NC office. [Link]
  • Sheppard Mullin Richter & Hampton is looking doe a mid-level associate with a CS or EE degree to work at their Palo Alto office. [Link]
  • The Ovidian Groupis is seeking Director, IP asset development, to work at their Berkeley, CA location; this person will have a JD degree and 2-5 years of patent pro experience. [Link]

Upcoming Events:

  • LES 2012 Spring Meeting – "Licensing to Solve the Innovation Gap" will be held May 15-17, Boston, MA. Speakers from GE Healthcare, Harvard, Hoffmann-LaRoche, Intel, Johnson & Johnson, Merck, MIT, Pfizer, Stanford and more will share their expertise on licensing to solve the innovation gap. (Patently-O readers save $100 by using promo code PO12 when registering) [Link]
  • The World Research Group is holding its 4th Annual Corporate IP Counsel Forum on May 16-17 in NYC. The Corporate IP Counsel Forum will address key issues and uncover latest developments related to IP in the form of case studies and panel discussions. Some of the topics include, but are not limited to: The America Invents Act and its impact on patent litigation and prosecution, IP monetization strategies for small and mid-size companies, Patent valuation, The top 10 most influential court cases in IP this year, Patent eligibility, Invention mining, Divided infringement, Best practices for combating non-practicing entities, Appeals to the U.S. Court of Appeals for the Federal Circuit, Copyright infringement. [Link]
  • The Annual DRI Business Litigation and Intellectual Property Seminar will be held May 16-18, 2012, in New York City. Attendees will learn trial and appellate advocacy skills in business litigation get up-to-date on the last trends in intellectual property and business litigation, and network with in-house counsel, business and intellectual property trial lawyers and experts from across the country. Speakers include: Former ABA President, Dennis W. Archer, Dennis Archer PLLC, and David Leitch, VP and General Counsel of Ford Motor Company. [Link]
  • Fitch, Even, Tabin & Flannery, LLP will present a free one-hour CLE webinar, "Inequitable Conduct After Therasense: Materiality and the Intent to Deceive in Aventis Pharma S.A. v. Hospira, Inc.," on May 23, 2012 at 12 noon EST. On April 9, 2012, for the first time after the Therasense decision, the Federal Circuit affirmed a finding of inequitable conduct in Aventis, signifying that inequitable conduct based on failure to cite prior art to the U.S. Patent and Trademark Office is still a viable patent infringement defense. During this webinar, Fitch Even partner Alison Aubry Richards will discuss how to defend against an inequitable conduct defense; how to maximize the chances of a successful inequitable conduct defense; and how to avoid inequitable conduct as a prosecuting attorney, before and during litigation. [Link]
  • The San Francisco Intellectual Property Law Association is hosting its annual seminar in Healdsburg, the center of one of California's best wine regions, from June 1-3. Speakers include Hon. Margaret A. (Peggy) Focarino, USPTO Commissioner of Patents, Hon. Robert Stoll, former USPTO Commissioner of Patents, Hon. Gerard F. Rogers, Chief Administrative Trademark Judge of the TTAB, Hon. Randall R. Rader, Chief Judge of Federal Circuit, Hon. Susan Illston, Judge of N.D.CA, Hon. Edward J. Davila, Judge of N.D.CA, as well as professors and leading practitioners. [Link]
  • On May 21-22 Ronald Slusky will hold a seminar in Chicago, the seminar teaches a comprehensive approach to analyzing inventions and capturing them in a sophisticated set of patent claims. The seminar is based on Ronald's book, Invention Analysis and Claiming: Patent Lawyer's Guide. [Link]
  • ACI will hold a Biosimilars conference May 22-23 in New York, NY. The conference will focus on the legal, regulatory, and commercial realities of biosimilars. [Link]
  • The Los Angeles Intellectual Property Law Association invites you to join us for the 2012 LAIPLA Spring Seminar at the beautiful Lodge at Torrey Pines in La Jolla, California, on June 8-10, 2012. The Spring Seminar features nine hours of panel discussions and presentations on the latest developments in intellectual property law, provides excellent networking opportunities at the cocktail receptions and dinners, and allows sufficient time for relaxation and enjoyable outdoor activities, including a golf tournament at the Torrey Pines Golf Course, home of the 2008 U.S. Open. Speakers and panelists include federal judges, practitioners (including in-house attorneys), and academics. [Link]
  • The C5's 11th Annual International Conference on Maximising Pharma Patent Lifecycles conference will be held June 20-21 in London. Patent lifecycle management is becoming more crucial for pharmaceutical companies with the cost of research and drugs continually rising and companies constantly trying to obtain the maximum financial benefit from existing patent terms. In addition to protecting existing IP rights and seeking methods to extend current patent lifecycles, pharmaceutical companies are faced with the challenge of inventing new drugs and diversifying portfolios to replace sales on older and generic drugs. [Link]
  • The ACI 3rd annual Hatch-Waxman Boot Camp will be held June 25-26 in San Diego. Topics to be covered include: the organization, jurisdiction of the FDA and the PTO and their interplay in the patenting of drugs and biologics, how the approval process for drugs and biologics is connected to the patenting of these products, how the Hatch-Waxman Act established the paradigm for market entry of generic small molecule drugs – and how biosimilar and many others. [Link]

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

Patently-O Bits & Bytes by Lawrence Higgins

Freedom of Speech and Facebook

  • Technology is forever changing, and with technological change there is also legal change. In a recent Virginia District Court case, the judge decided that liking a Facebook page is not protected speech. The judge stated that, "It is the court's conclusion that merely 'liking' a Facebook page is insufficient speech to merit constitutional protection. In cases where courts have found that constitutional speech protections extended to Facebook posts, actual statements existed in the record." I would like to think that if I like a page or a comment on Facebook or any other website with similar features that it is protected under law. Eugene Volokh of the University of California recently stated in a blog post that: A Facebook "like" is a means of conveying a message of support for the thing you're liking. That's the whole point of the "like" button; that's what people intend by clicking "like," and that's what viewers will perceive… I would treat "liking" as verbal expression — though it takes just one mouse-click, it publishes to the world text that says that you like something. But even if it's just treated as symbolic expression, it is still constitutionally protected, as cases such as Texas v. Johnson (1989) (the flag-burning case) show." [Link] Case

AOL Will "Supposedly Give Shareholders Proceeds From Patent Sale

  • Last month AOL sold an estimated 800 patents to Microsoft for around $1 billion. When making the sale, AOL stated that they would give significant amount of the sales proceeds to shareholders. Subsequently, AOL shares rose 35% in April and is currently trading around $26.50 per share. AOL's CEO recently stated that AOL will give 100% of the proceeds of the sale to shareholders, with details to be released. [Link] [Link]

Chisum Patent Academy

  • Earn Advanced Patent Law CLE in Spectacular Seattle This Summer: The Chisum Patent Academy is now accepting registrations for its 4th annual summer seminar in Seattle, July 30 – August 1, 2012. Their uniquely insightful, interactive seminars are limited to 10 participants. All sessions are taught by Donald Chisum and Janice Mueller. For further details on seminar coverage and registration information, see http://www.chisumpatentacademy.com or e-mail mailto:info@chisum.com

Patent Jobs:

  • Faegre Baker Daniels is seeking a patent associate with 2-6 years of experience to work at their Minneapolis office. [Link]
  • Luminex is searching for a patent associate with 3-6 years of experience and a graduate degree in molecular bio to work at their Austin, Texas location. [Link]
  • Faegre Baker Daniels is looking for a patent litigation associate with 1-2 years of experience to work at their Indianapolis office. [Link]
  • North Star IP is seeking patent associates with 3 to 4+ years of experience and a background in EE, CS, or CE to work at their Washington DC office. [Link]
  • Finnegan is searching for an attorney with a background in electrical technologies and 1 to 3 years of experience in patent prosecution or litigation to work at their Reston, VA office. [Link]
  • Tarolli, Sundheim, Covell & Tummino is looking for a patent attorney with at least 4 years of experience and a chemical or biochemical background to work at their Cleveland office. [Link]
  • Hickman Palermo Truong Becker Bingham Wong is seeking attorney with 2+ years of experience and a degree in CS, EE, CE, or physics to work at their San Jose office. [Link]
  • Dickstein Shapiro is searching for 2 IP associates with 2-5 years of experience in prosecution and litigation and a degree in EE to work at their DC office. [Link]
  • Tokyo Electron is looking for a patent agent/attorney with 5 years of experience and an advanced degree in EE to work at their Austin, Texas location. [Link]
  • Hiscock & Barclay is seeking patent attorneys and patent agents with 3-5 years of experience to work in their upstate NY office. [Link]
  • Hodgson Russ is searching for a patent attorney with at least 2 years of experience with a degree in EE to work at their Buffalo, NY office. [Link]
  • Myers Wolin is looking for a partner level attorney (patent or trademark) for their Morristown, NJ office. [Link]
  • Brooks Kushman is seeking a patent attorney with an EE or CS degree and 3-6 years of experience to work at their Southfield, Michigan office. [Link]
  • Michaud-Kinney Group is searching for an IP attorney with a chem or bio background and at least 3 year of experience to work at their Middletown, Connecticut office. [Link]
  • Sutherland is looking for an associate or patent agent with a degree in EE, CE, CS, or a related discipline to work at their Atlanta or Austin office. [Link]
  • Abel IP is seeking a patent associate with 4+ years of experience in the chemical and/or ceramic materials art areas to work at their Austin, Texas office. [Link]
  • Murphy, Bilak & Homiller is searching for a patent attorney or patent agent with 1-4 years of experience and a degree in EE to work at their Cary, NC office. [Link]
  • Sheppard Mullin Richter & Hampton is looking doe a mid-level associate with a CS or EE degree to work at their Palo Alto office. [Link]
  • The Ovidian Groupis is seeking Director, IP asset development, to work at their Berkeley, CA location; this person will have a JD degree and 2-5 years of patent pro experience. [Link]

Upcoming Events:

  • LES 2012 Spring Meeting – "Licensing to Solve the Innovation Gap" will be held May 15-17, Boston, MA. Speakers from GE Healthcare, Harvard, Hoffmann-LaRoche, Intel, Johnson & Johnson, Merck, MIT, Pfizer, Stanford and more will share their expertise on licensing to solve the innovation gap. (Patently-O readers save $100 by using promo code PO12 when registering) [Link]
  • The World Research Group is holding its 4th Annual Corporate IP Counsel Forum on May 16-17 in NYC. The Corporate IP Counsel Forum will address key issues and uncover latest developments related to IP in the form of case studies and panel discussions. Some of the topics include, but are not limited to: The America Invents Act and its impact on patent litigation and prosecution, IP monetization strategies for small and mid-size companies, Patent valuation, The top 10 most influential court cases in IP this year, Patent eligibility, Invention mining, Divided infringement, Best practices for combating non-practicing entities, Appeals to the U.S. Court of Appeals for the Federal Circuit, Copyright infringement. [Link]
  • The Annual DRI Business Litigation and Intellectual Property Seminar will be held May 16-18, 2012, in New York City. Attendees will learn trial and appellate advocacy skills in business litigation get up-to-date on the last trends in intellectual property and business litigation, and network with in-house counsel, business and intellectual property trial lawyers and experts from across the country. Speakers include: Former ABA President, Dennis W. Archer, Dennis Archer PLLC, and David Leitch, VP and General Counsel of Ford Motor Company. [Link]
  • Fitch, Even, Tabin & Flannery, LLP will present a free one-hour CLE webinar, "Inequitable Conduct After Therasense: Materiality and the Intent to Deceive in Aventis Pharma S.A. v. Hospira, Inc.," on May 23, 2012 at 12 noon EST. On April 9, 2012, for the first time after the Therasense decision, the Federal Circuit affirmed a finding of inequitable conduct in Aventis, signifying that inequitable conduct based on failure to cite prior art to the U.S. Patent and Trademark Office is still a viable patent infringement defense. During this webinar, Fitch Even partner Alison Aubry Richards will discuss how to defend against an inequitable conduct defense; how to maximize the chances of a successful inequitable conduct defense; and how to avoid inequitable conduct as a prosecuting attorney, before and during litigation. [Link]
  • The San Francisco Intellectual Property Law Association is hosting its annual seminar in Healdsburg, the center of one of California's best wine regions, from June 1-3. Speakers include Hon. Margaret A. (Peggy) Focarino, USPTO Commissioner of Patents, Hon. Robert Stoll, former USPTO Commissioner of Patents, Hon. Gerard F. Rogers, Chief Administrative Trademark Judge of the TTAB, Hon. Randall R. Rader, Chief Judge of Federal Circuit, Hon. Susan Illston, Judge of N.D.CA, Hon. Edward J. Davila, Judge of N.D.CA, as well as professors and leading practitioners. [Link]
  • On May 21-22 Ronald Slusky will hold a seminar in Chicago, the seminar teaches a comprehensive approach to analyzing inventions and capturing them in a sophisticated set of patent claims. The seminar is based on Ronald's book, Invention Analysis and Claiming: Patent Lawyer's Guide. [Link]
  • ACI will hold a Biosimilars conference May 22-23 in New York, NY. The conference will focus on the legal, regulatory, and commercial realities of biosimilars. [Link]
  • The Los Angeles Intellectual Property Law Association invites you to join us for the 2012 LAIPLA Spring Seminar at the beautiful Lodge at Torrey Pines in La Jolla, California, on June 8-10, 2012. The Spring Seminar features nine hours of panel discussions and presentations on the latest developments in intellectual property law, provides excellent networking opportunities at the cocktail receptions and dinners, and allows sufficient time for relaxation and enjoyable outdoor activities, including a golf tournament at the Torrey Pines Golf Course, home of the 2008 U.S. Open. Speakers and panelists include federal judges, practitioners (including in-house attorneys), and academics. [Link]
  • The C5's 11th Annual International Conference on Maximising Pharma Patent Lifecycles conference will be held June 20-21 in London. Patent lifecycle management is becoming more crucial for pharmaceutical companies with the cost of research and drugs continually rising and companies constantly trying to obtain the maximum financial benefit from existing patent terms. In addition to protecting existing IP rights and seeking methods to extend current patent lifecycles, pharmaceutical companies are faced with the challenge of inventing new drugs and diversifying portfolios to replace sales on older and generic drugs. [Link]
  • The ACI 3rd annual Hatch-Waxman Boot Camp will be held June 25-26 in San Diego. Topics to be covered include: the organization, jurisdiction of the FDA and the PTO and their interplay in the patenting of drugs and biologics, how the approval process for drugs and biologics is connected to the patenting of these products, how the Hatch-Waxman Act established the paradigm for market entry of generic small molecule drugs – and how biosimilar and many others. [Link]

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

In Memoriam Best Mode

By Jason Rantanen

When Congress passed the America Invents Act and President Obama signed it into law, courts were stripped of the power to declare patents either invalid or unenforceable for failure to disclose a best mode.  While it is true that amended section 112 of Title 35 still technically "requires" patent applicants to disclose a best mode if they know of one, courts will no longer enforce the requirement. For all practical purposes, the requirement that a patent applicant disclose a best mode is effectively dead.

Yet, perhaps in moving to eliminate the best mode requirement Congress acted too hastily.  In a recent online essay published by the Stanford Law Review, Lee Petherbridge and I draw attention to a benefit the best mode requirement provides (or perhaps "provided" is more accurate) that directly challenges the conventional attitude toward best mode, arguing that best mode works closely with the nonobviousness requirement to establish the level of "inventiveness" that the U.S. patent system has long considered optimal.

You can read the complete essay here: http://www.stanfordlawreview.org/online/in-memoriam-best-mode

 

Judge Wallach and Claim Construction

By Jason Rantanen

Chicago Board Options Exchange, Inc. v. International Securities Exchange, LLC (Fed. Cir. 2012) Download 11-1267-1298
Panel: Rader, Wallach (author) and Fogel

If my own conversations are any indicator, many people who follow the Federal Circuit's claim construction jurisprudence have developed strong opinions about the longstanding members of the court.  More of an unsolved puzzle are the more recent appointees.  In Chicago Board Options Exchange, we get a glimpse into the newest member of the court's thoughts on claim construction in his debut patent law opinion.  That opinion suggests an approach closely tied to the patent itself, analyzing the text of the document without reference to extrinsic sources.

Means plus function: One of the claim terms at issue in this appeal was "system memory means for storing allocating parameters for allocating trades between the incoming order or quotation and the previously received orders and quotations."  Although the court noted that the parties expressly agreed during claim construction that this was a means-plus-function limitation, the court nonetheless dropped a footnote indicating that even had the argument not been waived, the presumption arising from the use of the word "means" was not overcome because the limitation "system memory means" articulates a function and nowhere includes a "specific and definite structure."  Given this statement, it is possible that Judge Wallach may take a broad approach to 112(f), interpreting a wide array of terms to fall within its scope.  Or I may be overreading the footnote, given that the claim element did include "means" after all.

In the end, however, the distinction did not matter, as the CAFC interpreted the corresponding structure of "system memory means" to be "system memory."  After examining the specification to determine which structure was linked to the means-plus-function element's function, and applying the canon of claim construction that different terms convey different meanings, the court concluded that the "[t]he clearly linked structure associated with this function is “system memory.” Slip Op. at 13-14.  It did not include the additional elements identified by the district court.

Looking at the Claims, then the Specification: The CAFC also construed several non-means-plus-function terms, taking a similar approach to each.  For each term, the court first looked to the claim language itself to divine any meaning the claims might offer, then turned to the specification to examine whether it provided further support or rebutted the meaning as indicated by the claim.  As in the preceding section, the court relied heavily on the different terms/different meanings canon of claim construction.

Specification disavowal: Although for most terms the court found that the specification either supported or did not rebut the meaning of the terms as established by the claims, the court found clear disavowal of claim scope for one term: "automated exchange."  "The specification goes well beyond expressing the patentee’s preference for a fully automated exchange over a manual or a partially automated one, and its repeated derogatory statements about the latter reasonably may be viewed as a disavowal of that subject matter from the scope of the Patent’s claims."  Slip Op. at 21.  Thus, the district court correctly interpreted this term to mean "fully computerized, such that it does not include matching or allocating through use of open out-cry."  Id.

The USPTO Patent Backlogs: Falling and Rising

By Dennis Crouch

Under Director Kappos’ tenure, the USPTO has focused on reducing the backlog of unexamined cases. That approach has been quite successful. The table below shows a 10% reduction in the backlog of unexamined cases over the past year. As you might expect, those cases do not disappear. Rather, the bolus is being pushed down the line toward eventual issuance or abandonment. Thus, as the number of unexamined cases drops, the RCE backlog and BPAI backlog continue to grow. I suspect that we’ll eventually think of these cases as the “baby boom” of patents.

In this study, unexamined cases include only those that have not yet received a first action on the merits (FAOM) and do not include RCE cases. The rise in the RCE backlog is a direct result of USPTO policy to focus more attention on the unexamined cases.

In March 2012, the BPAI disposed of 911 cases — more than any month in recent history. This slowed the growth of the BPAI backlog. However, with 1,343 new appeals docketed, the growth continued.