August 2012

Logical Conclusion?: Claimed Open-Ended Ranges Lack Enablement

By Dennis Crouch

Magsil Corp. and MIT v. Hitachi (Fed. Cir. 2012)

In a unanimous opinion, the Federal Circuit has affirmed a district court summary judgment holding that the asserted claims of MIT's patent are invalid for a lack of enablement. The patent covers read-write sensors for computer hard disk drive storage systems and relies upon quantum tunneling in operation.

The courts have derived an enablement requirement from Section 112 of the patent statute. Under the doctrine, after studying the patent specification, a person of skill in the relevant art should be able to (theoretically) make and use the full scope of the claimed invention without undue experimentation. Patents ordinarily include many different claims that identify various legal rights given to the patentee. Enablement is judged independently on a claim-by-claim basis. Any claim that lacks enablement will be deemed invalid and thus unenforceable.

One of the murkiest areas of the doctrine is determining whether the "full scope" of the claim is enabled. The commonly used open ended "comprising" claim language allows for an infinite number of potential variants to be embodied within the scope of a single claim. In almost every case, it is possible to theoretically define an embodiment that falls within the claim scope but that is not fully enabled by the specification. Obviously, the fact that a particular theoretical covered embodiment is not enabled can't be sufficient to invalidate a claim. The difficult legal issue then is finding when a patent claim crosses the threshold from legitimately having a few non-enabled potential embodiments to illegitimately failing to enable the full scope of the claim.

Unbounded Range: Here, the patent claims that the device switch has a change in resistance of "at least 10%." Although it is desirable to have a device with a greater ΔR, the inventors best pre-filing device only reached 11.8%. The accused infringing devices had a greater ΔR and thus the patentee argued that the "at least 10%" claim scope could cover a ΔR of 100% or even 1,000%." The defendant (Hitachi) was able to prove that those ΔR levels could not have been achieved at the time of the patent filing without undue experimentation. The Federal Circuit found this sufficient to find the claim lacking enablement.

In sum, this field of art has advanced vastly after the filing of the claimed invention. The specification containing these broad claims, however, does not contain sufficient disclosure to present even a remote possibility that an ordinarily skilled artisan could have achieved the modern dimensions of this art. Thus, the specification enabled a marginal advance over the prior art, but did not enable at the time of filing a tunnel junction of resistive changes reaching even up to 20%, let alone the more recent achievements above 600%.

This case follows in re Fisher (CCPA 1970). In that case the court ruled that a claimed potency of "at least 1 International Unit of ACTH per milligram" was invalid as lacking enablement after the patentee attempted to enforce the patent against products with potentials of much greater than the 2.3 IUs disclosed in the specification.

The court particularly addressed the comprising issue discussed above. One key distinction is that the high ΔR range here is an explicit element of the claimed invention rather than being a mere latent vestige of the claim structure.

Not a Groundbreaking Invention: In both Fisher and here, the patentees' actual experiments were at ranges just above that already known in the art. That seeming small advance reflected in claiming a range that barely avoided the prior art at the lower bound but then attempted to claim an infinite range at the upper bound. In this case, the court identifies the advance as "marginal over the prior art." The suggestion from the court is that a marginal advance such as this is deserving of a much narrower scope than would be given a groundbreaking invention. The court is on the right track with this approach however, the language of the opinion can also be read to limit potentially broad scope of even groundbreaking inventions when the accused infringer (or others) have spent significant time and energy on developing a particular embodiment covered by the invention.

Whither Open-Ended Ranges and a Plurality of Members?: The opinion can also be read to eliminate the potential for open-ended ranges. The court writes that "the '922 patent specification only enables an ordinarily skilled artisan to achieve a small subset of the claimed range." Of course, a mathematician will explain that any claim with a range that potentially reaches to infinity (e.g., "a plurality of members") will suffer from this same defect – that only a small subset of the claimed range will be enabled (assuming that infinity is not enabled).

Transformative Research to Avoid Infringement: As mentioned above, the opinion relies somewhat heavily on the fact that extensive post-patent-filing research was conducted; and that the research eventually led to a new state-of-the-art that is much more advanced than that imagined by the inventors (even though still literally covered by the claims). This opens the door to manufacturing companies to offer testimony related to their extensive research and development programs and offer an argument akin to transformative copying in copyright law. If the research is sufficiently transformative (and took sufficient effort) then the patent will be deemed invalid for failing to enable that covered embodiment.

Enablement Doctrine Allows Follow-on Research: The court is straightforward in stating that a strong enablement requirement will help prevent over broad patent claims and thus allow room (and incentives) for "follow-on or improvement inventions."

Invalidity affirmed.

Meyer v. Bodum: A Waste of Public and Private Resources?

Meyer Intellectual Properties Limited v. Bodum, Inc. (Fed. Cir. 2012) Panel: Dyk (concurring), Moore, O'Malley (author) Download 11-1329

At its heart, Meyer v. Bodum is essentially an obviousness case, although for reasons having to do with the procedural posture, the court never gets to the merits of that issue, instead remanding the case for further proceedings based on numerous errors committed by the district court, which the opinion portrays as misguided and lacking an understanding of the basics of patent law.  

Judge Dyk's concurrence, reproduced in its entirety at the end of the post, goes even further, concluding that "this case is an example of what is wrong with our patent system…Such wasteful litigation does not serve the interests of the inventorship community, nor does it fulfill the purposes of the patent system."  Slip Op. at 46-47.

BodumBackground: Frank Brady was an independent sales representative for Bodum from 1986-1996, during which time he marketed and sold products including Bodum's French press coffee makers.  In the mid-1990's, Brady came up with the idea of a milk frother that used aeration instead of steam, and in 1996, he filed a patent application directed to a "Method for Frothing Liquids" that led to two issued patents, Nos. 5,780,087 and 5,939,122.  The claims essentially involve four steps: "(1) providing a container that has a height to diameter aspect ratio of 2:1; (2) pouring liquid (e.g., milk) into the container; (3) introducing a plunger that includes at least a rod and plunger body with a screen; and (4) pumping the plunger to aerate the liquid."  Slip Op. at 5. Brady also sold milk frothers through his company, BonJour, which was subsequently sold to Meyer. 

Bodum2In 1999, Bodum began selling the first generation of its accused milk frothers.  The figures  accompanying this post are the opinion's comparisons of Bodum's Version 1 frother with the '087 patent. Shortly after Meyer filed an infringement suit in 2006, Bodum changed its designs, removing the spring element holding the screen against the inside wall of the container and replacing it with an O-ring.  The O-ring was later removed to create the Version 3 frother. 

Following a jury trial in which the jury held the patents to be valid and willfully infringed, awarding $50,000 in damages, the district court trebled the damages, declared the case exceptional, and awarded Meyer its attorney fees of $756,487,56.  Bodum appealed, alleging a panopoly of errors by the district court.  The Federal Circuit agreed. 

Infringement: The CAFC vacated the district court's grant of summary judgment of infringement due to a lack of any evidence of direct infringement in the record.  Rather, the district court relied only on assumptions of direct infringement.  "We find it troubling that the district court based its direct infringement analysis on what it assumed happened, rather than on actual evidence of record. This assumption contradicts our well-established law that a patentee must prove infringement by a preponderance of the evidence."  Slip Op. at 26.

Evidentiary Rulings: Prior to and during trial, the district court made a number of evidentiary rulings that sharply limited Bodum's ability to present its case.  In an uncommon move, the Federal Circuit concluded that the district court had abused its discretion in these rulings, holding that (1) the district court erroneously limited the scope of prior art to only two references (one of which was subsequently excluded), despite sufficient disclosure of several additional references; (2) the district court  erroneously excluded Bodum's expert from testifying despite a report containing a sufficiently detailed statement of his opinions and the bases for his conclusions, especially given the non-complex nature of the technology; and (3) the district court erroneously precluded lay witnesses from testifying to authenticate one of the two allowed prior art references.  The CAFC thus remanded for a new trial on obviousness.

Inequitable Conduct: The CAFC also held that the district court erred by dismissing Bodum's inequitable conduct claims on a motion in limine.  Under Seventh Circuit law, "a motion in limine is not the appropriate vehicle for weighing the sufficiency of the evidence."  Slip Op. at 41-42.  The district court thus "erred in addressing the sufficiency of Bodum's inequitbale conduct defense on an evidentiary motion." Id. at 42. 

Willful Infringement and Enhanced Damages: Because the CAFC remanded the case for a new trial on infringement and invalidity, it vacated the wilfulness verdict and enhanced damages award.  In doing so, it suggested that the district court use Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 682 F.3d 1003 (Fed. Cir. 2012) (in which the Federal Circuit held that threshold "objective prong" of the willfulness inquiry is a question of law) as a starting point.

Judge Dyk's Concurrence: Writing in concurrence, Judge Dyk questioned why this patent issued in the first place and why it was not found obvious on summary judgment: 

While I agree with and join the thorough majority opinion, in looking at this case from a broader perspective, one cannot help but conclude that this case is an example of what is wrong with our patent system. The patents essentially claim the use of a prior art French press coffee maker to froth milk. Instead of making coffee by using the plunger to separate coffee from coffee grounds, the plunger is depressed to froth milk. The idea of frothing cold milk by the use of aeration rather than steam is not new as reflected in the prior art Ghidini patent.  Under the Supreme Court’s decision in KSR International Co. v. Teleflex, Inc., 550 U.S. 398, 420 (2007), and its predecessors, it would be reasonable to expect that the claims would have been rejected as obvious by the examiner, and, if not, that they would have been found obvious on summary judgment by the district court. But no such thing. The parties have spent hundreds of thousand of dollars and several years litigating this issue, and are invited by us to have another go of it in a second trial. Such wasteful litigation does not serve the interests of the inventorship community, nor does it fulfill the purposes of the patent system.

Judge Dyk specifically refers to the private costs of this litigation – the hundreds of thousands (at least a million, if both parties' costs are taken into account) of dollars spent by the parties on legal fees.  The public, too, has spent a substantial amount of resources on this case: the district court's time and resources, the jury's time (and perhaps a future second jury), and the Federal Circuit's own time spent correcting the errors – as evidenced by its thorough 44-page opinion.  Beyond these monetary costs, Judge Dyk's concurrence hints at an even greater public cost: the undermining of public confidence in the ability of the patent office and the courts to get patentability decisions on even relatively technologically simple inventions right.

Recent Federal Circuit Nonobviousness Opinions: Kinetic Concepts

By Jason Rantanen

Kinetic Concepts, Inc. v. Smith & Nephew, Inc. (Fed. Cir. 2012)  Panel: Bryson, Dyk (concurring in the result), O'Malley (author) Download 11-1105

Dennis will be writing about the advisory jury issue in Kinetic Concepts in more detail, so I'll provide only a brief summary here.  Wake Forest, the patent holder, appealed a district court grant of JMOL of invalidity for obviousness of a claimed invention for treating difficult-to-heal wounds by applying suction (negative pressure).  The CAFC reversed, holding that (1) the jury's "advisory" opinion on the ultimate issue obviousness gave rise to implied findings of facts that the district court was required to accept provided that they were supported by substantial evidence, despite the presence of special interrogatories on the verdict form; (2) the jury's implied findings of facts on the Graham factors were supported by substantial evidence; and (3) the ultimate conclusion of obviousness was that the claims were not obvious. 

In arriving at the ultimate (legal) conclusion of nonobvious, the Federal Circuit focused its discussion on the lack of a reason to combine the prior art references (itself a factual finding), referencing concerns about hindsight reconstruction.  In a statement suggesting a technology-based limitation on the use of common sense, the court held that "although expert testimony regarding motivation to combine is not always required, the technology at issue here is not the type of technology where common sense would provide the motivation to combine these references."  Slip Op. at 45.

Recent Federal Circuit Nonobviousness Opinions: Alcon v. Apotex

By Jason Rantanen

I'm catching up with recent Federal Circuit opinions this week.  First up, a trio of precedential opinions involving nonobviousness, a surprisingly hot topic.

Alcon Research, Ltd. v. Apotex Inc. (Fed. Cir. 2012).  Panel: Prost, Moore (author), O'Malley Download 11-1455

Apotex submitted an Abbreviated New Drug Application to the FDA seeking approval to market a generic version of the anti-allergy eye drop PATANOL; in response, Alcon sued Apotex for patent infringement under 271(e)(2)(A).  In a bench trial, the district court held that eight of the asserted claims of the patent were nonobvious, and Apotex appealed.

The Federal Circuit reversed on six of the claims.  Focusing on the primary issue, whether there was a motivation to adapt the formulation disclosed in the prior art (which was tested in guinea pigs) for use in in treating humans, the CAFC concluded that the district court had applied an overly strict reason to modify requirement to the six claims involving a range that overlapped with the prior art.   Given the district court's factual finding that "animal tests, including guinea pig models, are predictive of a compound's antihistaminic activity and its topical ocular activity in humans," the "district court clearly erred when it concluded that a person of skill in the art would not have been motivated to use the olopatadine concentration disclosed in Kamei in human eyes."  Slip Op. at 12.  It did not help Alcon's argument that its patent was based only on in vitro tests of the compound in human cells. 

The CAFC reached a different conclusion on two claims that did not cover a range of the active compound that overlapped with the prior art, finding no clear error in the district court's conclusion that "a person of ordinary skill in the art would not have a reasonable expectation of success for increasing the highest dosage used in [the prior art] by an order of magnitude."  Slip Op. at 17. 

While the CAFC considered the objective evidence, it played a relatively secondary role.  On the six claims that the panel concluded were obvious, despite agreeing with the district court that the objective considerations fell in Alcon's favor, the CAFC nevertheless concluded that after balancing the objective evidence against the strong case of obviousness presented by Apotex the claims were obvious.  No explanation of why this was so was offered.  Similarly, on the two claims in which there was no reasonable expectation of success, the court commented that the objective evidence "further supports" the nonobvious holding, citing particularly evidence of commercial success.

Comment:  The opinion avoids labeling the first part of the analysis as a "prima facie" case of obviousness, perhaps in response to recent concerns about the confusing use of that term in infringement suits.  See In Re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litigation, 676 F.3d 1063 (Fed. Cir. 2012)The court refers to it only as the "evidence of obviousness discussed above" when contrasting it with the objective indicia of nonobviousness.  But this is somewhat cumbersome, and sparks the question of how should we refer to this stage of the obviousness analysis if not as the "prima facie case of obviousness?"  Possible suggestions, all of which have their problems: the first three Graham factors; the 'paper case' of obviousness; the 'theoretical' case of obviousness. Other suggestions? 


The Proposed Unified Patent Court for Europe: conditio sine qua non for a Unitary Patent or unavailing venture into the unknown?

The following is an invited guest post by William Bull. Mr. Bull is a researcher at the Maastricht European Private Law Institute (M-EPLI) at Maastricht University in the Netherlands

European countries have now almost reached agreement on the creation of a European Union patent with unitary effect and a 'Unified Patent Court' (UPC) to be established (primarily) in Paris in 2014 or so. The plan is to introduce a patent right valid throughout the territory of 25 of the 27 EU Member States (Italy and Spain remaining outside the process due to objections to the proposed linguistic regime) and, in tandem, a single patent court at European level with exclusive jurisdiction in infringement and revocation proceedings covering the same territory, in lieu of domestic courts. The UPC is to consist of two divisions; a Court of First Instance and a Court of Appeal. The former is to be further sub-divided into a Central Division (located in Paris, albeit itself with 'thematic branches' in London and Munich!) and additional regional and local divisions situated in various Member States.

It is by now de rigueur for any commentary on the European patent project to begin with a reminder of its protracted history. The idea of creating some form of common European patent system can be traced all the way back to the 1960s, and has been plagued by drawbacks and delays ever since. The most recent attempt to revive the project came in 2000 with a proposal for a Regulation on a Community Patent (following on from the Regulation establishing a Community Trade Mark (CTM) adopted some years earlier), and continued with an accompanying proposal for a Community Patent Court of 2003. The former would introduce a unitary patent right covering the entire European Union, while the latter would lead to the creation of a unified patent court with exclusive jurisdiction over both the new patent right and existing 'European' patents (that is, bundles of national patents) obtained under the European Patent Convention (EPC) system. Together, these proposals were to be the 'building blocks' for a future EU system, designed to overcome the difficulties posed by the need to acquire and litigate patent rights in different Member States.

Of course the European legislator is faced with this core dilemma in virtually any of the areas of law in which it has some competence to act, and European intellectual property law is by no means the only field where there have been lengthy deliberations over the need, form and likely success of measures seeking to instigate some 'harmonisation' of the law (in one way or another). The debate on the harmonisation of European private law (and particularly contract law) immediately springs to mind as an example, for this also began some decades ago, leading to the drafting of various academic principles, from the Principles of European Contract Law (PECL) in the course of the 80s and 90s, through the Draft Common Frame of Reference in the 2000s, and culminating in a proposal for a Common European Sales Law only last year. What makes the European patent project unique is the fact that it has focused on the introduction of an apposite pan-European court system as well as on matters of substantive law. The creation of a unified patent court for the EU is considered by many – not least the European Commission – to be a conditio sine qua non for the proper functioning of the proposed unitary patent. This is the case even though such a court would be unprecedented, and was not seen as necessary for either the CTM or the Community design introduced in 2002 (both of which are adjudicated upon by designated national courts collaborating with the Court of Justice of the EU (CJEU) via the general EU preliminary reference procedure). So it is the importance attached to this aspect of the patent debate that will readily come as a surprise to those operating in other areas of European law, including the sphere of European private law (EPL).

In spite of the many parallels that can be drawn between the debate on harmonisation of European IP law and that of private law more generally (not to mention other areas of EU law), however, there is a distinct lack of interaction among actors in the various subfields. This means that often similar arguments are used, but without benefiting from insights in the other field. It is therefore against this backdrop of academic fragmentation that we would encourage further comparison between the European harmonisation debate in areas such as patent law and contract law, as this should lead to lessons on what to encourage or to avoid in developing the two fields. In particular, since in EPL there has been hardly any discussion about the introduction of a European court in order to ensure uniform interpretation, we cannot help but wonder whether the significance of this issue in patent law is not overestimated. This is a particularly worthwhile question bearing in mind that if an alternative to the unified patent court could be found, this would greatly help the present political process, which now appears to be stuck on the issue of involvement of the CJEU.

In our view, there is nothing against splitting the two building blocks: in a paper that I wrote together with Jan Smits (available on SSRN) I argue that it may indeed be useful to introduce the unitary European patent, but I do not see the advantage of creating the proposed European patent court system, given a) the disadvantages of such a system and b) the possible alternative. First: the disadvantages of the proposed patent court system. From the perspective of end users, a rational patent litigation system depends on three main factors; expertise of the judges, the ability to make a speedy decision, and low costs. We doubt whether the new system would be able to provide these, certainly (but not only) in the short- to medium-term. Given that the regional and local divisions of the Unified Patent Court will be spread across Europe and necessarily composed of multi-national panels with the discretion to decide whether or not to bifurcate proceedings, it is difficult to see why the UPC as it is envisaged would fare much better against the obstacles to efficient litigation and uniform interpretation of differing levels of judicial expertise, patent cultures and language barriers. Second, a possible alternative to the now proposed unified patent court could consist of a competitive model of convergence of patent law. This model is based on the present European practice in which 50 to 70% of all patent cases in Europe end up before the courts of a very limited number of countries (and in particular before the German courts, of which the Düsseldorf district court is seen as market leading, dealing with more than 600 new infringement cases every year from all over Europe). The popularity of the German court system among European litigants apparently stems from its speed, high quality, commercial sense and the fact that the staying of an infringement procedure due to revocation is only rarely allowed.

In short, our point is that successful harmonisation of IP law may indeed be dependent on uniform interpretation of European rules, but this uniformity need not come from a common European court. It can also be provided by a national court, as long as individual claimants are allowed to choose the court of their liking. In fact, in the absence of any meaningful political compromise on a European court system in the last 40 years, such a market for patent litigation has already partly come to exist. Of course that is not to say that such an alternative is not without its own problems, but we believe that a competitive model of convergence has a lot of merit over the proposed European court system, which could easily prove to be an unavailing venture into the unknown.

* * * * *

These questions are discussed in detail in the working paper by Jan M. Smits and William Bull entitled 'European Harmonisation of Intellectual Property Law: Towards a Competitive Model and a Critique of the Proposed Unified Patent Court', available at:

Google’s Improved Patent Search

by Dennis Crouch

Two updates on Google’s patent search tools:

  1. EU patents are now available; fully searchable; and automatically translated.
  2. Google has implemented a new prior art search button that attempts to identify the ten most relevant prior art documents in its search database.  In my 10–minute test, the identified prior art did not appear to be directly on-point. Of course, my criticism likely suffers from the Nirvana fallacy.  Every prior art search methodology suffers from major deficiencies.  The proper question for Google’s tools is whether the new system has a role in the patenting process.  At minimum, it is likely an improvement on the quick pre-filing “sanity check” searches that are often conducted by patent applicants and patent attorneys. In its press release, Google indicated that the company will “be refining and extending the Prior Art Finder as [it] develop[s] a better understanding of how to analyze patent claims and how to integrate the results into the workflow of patent searchers.”

AIA Shifts USPTO Focus from Inventors to Patent Owners

by Dennis Crouch

The new rules on inventor oaths make practical business sense, but they leave me somewhat pessimistic.  Metaphysically, the rules serve to crystallize the the US patent system's shift in focus away from inventors and toward corporate owners (and other non-human juristic entities).  Up to now, corporations were never considered patent applicants.  Rather, inventors were the applicants.  Even when the ultimate rights were owned by a corporate entity, the USPTO still focused on the inventors as the patent applicants.  Under the new rules being implemented on September 16, 2012, the status of “patent applicant” will no longer be keyed to inventorship but instead ownership.  Thus, any juristic entity who can show a proprietary interest will be permitted to file and prosecute a patent application as the patent applicant.  Of course, this change makes a fool of the first-inventor-to-file label given to the new US priority system during the political debates. Rather, the system truly is the first-owner-to-file. However, the change does fit within the same mental construct as the shift to a first-to-file system that largely turns a blind eye to inventive activities and instead focuses on paperwork (the essence of a corporate entity).  In recent years, we have seen a steady decrease in the percentage of inventor-owned patents.  For better or worse, there is no reason to believe that trend will change any time soon.

On a practical level, the change to the oath requirement itself is fairly narrow and will not ordinarily arise.  Under the new rules, the inventor will still ordinarily submit an oath or declaration of inventorship unless the inventors are unavailable or refuse. However, there are two major important changes: (1) a right-holding entity may file the patent application and wait to file the inventor's oath until the time that the application is otherwise in condition for allowance; and (2) defects in the listing of inventors can now (apparently) be corrected even if the original filing was done with deceptive intent.  These changes relieve some headache for corporate patent attorneys. However, I believe that this streamlined process does increase the likelihood that unscrupulous entities will overreach.

One “cure” for this potential problem is that the Office will now require all juristic entities (non-people) prosecuting applications to do so via a registered patent practitioner.  “Thus, all papers submitted on behalf of a juristic entity must be signed by a patent practitioner…”  Obviously, this is a boon for US patent attorneys and patent agents.  It will create some struggle for very small corporate entities that continue to file applications pro se. However, my understanding of the rules is that the requirement to use a patent attorney/agent only exists if the juristic entity files as the applicant.  To avoid the requirement, the application could still be filed in the name of the actual inventors who retain the option of prosecuting the application pro se.

Judge Alsup Orders Google and Oracle to Reveal Relationships with Bloggers, Journalists and Academics

Near entry of judgment, Judge Alsup orderd Oracle and Google in a major IP tussle to reveal ties to bloggers, journalists, and academics — including apparently at least one person who blogged for a long while without revealing that he was a paid consultant to one of the parties. The order is here:  "each side and its counsel shall file a statement herein clear identifying all authors, journalists, commentators or bloggers who have reported or commented on any issues in this case and who have received money (other than normal subscription fees) from the party or its counsel during the pendency of this action"

The judge ordered both parties to reveal any relationship with not just bloggers, but journalists and academics with whom either had a financial relationship. A longer article is here.

My first reaction is that it's a good idea.  I draw the analogy to "sponsored" scientific research. I know some say it would describe disclosure of blogs with "adsense" but that seems wrong to me, given the "other than normal subscription fees" language.  Thoughts?

[Full disclosure: I gave a cle at Google once!  Cool place to visit.]




Why Isn’t Patent Law as Straightforward as Real Estate Law?: Maybe it Is

by Dennis Crouch

Professor Adam Mossoff recently posted a draft of his essay Trespass Fallacy in Patent Law. The essay is quite short (17 pages) and accessible. Mossoff is able to encapsulate his basic idea in one paragraph. He writes:

One common refrain [from patent critics] is that patents fail as property rights because patent infringement doctrine is not as clear, determinate and efficient as trespass doctrine is for real estate. This essay explains that this is a fallacious argument, suffering both logical and empirical failings. Logically, the comparison of patent boundaries to trespass commits what philosophers would call a category mistake. It conflates the boundaries of an entire legal right (a patent), not with the boundaries of its conceptual counterpart (real estate), but rather with a single doctrine (trespass) that secures real estate only in a single dimension (geographic boundaries). Estate boundaries are defined along the dimensions of time, use and space, as reflected in numerous legal doctrines that secure estates, such as adverse possession, easements, nuisance, restrictive covenants, and future interests, among others. The proper conceptual analog for patent boundaries is estate boundaries, not fences. Empirically, there are no formal studies of how trespass or even estate boundaries function in litigation; thus, complaints about the patent system’s indeterminacy are based solely on an idealized theory of how trespass should function; it’s the nirvana fallacy. Furthermore, anecdotal evidence and related studies suggest that estate boundaries are neither as clear nor as determinate as patent scholars assume it to be. In short, the trespass fallacy is driving an indeterminacy critique in patent law that is both empirically unverified and conceptually misleading. 

In this essay, Mossoff makes an important contribution to the rhetoric of patent policy.  The most convincing element of his argument is that the trespass metaphor fails. In my view, his broader real estate metaphor also fails because it also does not fit well with the U.S. patent system except in its level of complication and dispute potential.  The reality is that all metaphors fail to fully mirror their subject — by definition a metaphor is something different from its subject.  With that in mind, I see the essay as raising a cautionary flag against over-reliance rather than a complete indictment.  

My more important critique of Mossoff's argument is derived from his suggestion that we hold-off improving the patent system until we know which metaphor is best and whether issued patents are more indeterminate than real estate deeds.  Mossoff writes: 

Until firm factual grounding for this normative critique is first established, commentators, legislators and courts might want to pause before continuing to make fundamental structural changes to the American patent system.

Even if Mossoff's base critiques of the trespass metaphor are all correct, we still know that the U.S. patent system has room for improvement.  The fact that the real estate market is in shambles should not serve as a justification for officials (or comentators) to fail in their duty to make our system the best that it can possibly be. 


Supplemental Examination Final Rules

By Jason Rantanen

As Dennis writes below, tomorrow the USPTO will publish five final rules packages for implementing the America Invents Act.  This post focuses on the Supplemental Examination Rules, available here.  In large part, the Final Supplemental Examination Rules mirror the proposed rules, which I discussed in a previous post

The biggest change from the proposed rules relates to the elimination of some of the specific content requirements. Originally, the rules articulated several very specific categories of information that the requestor was required to provide.  The final rules are more streamlined, paralleling the content requirements for submitting an ex parte reexamination. They do, however, retain the requirement of a "A separate, detailed explanation of the relevance and manner of applying each item of information to each claim of the patent for which supplemental examination is requested." 37 C.F.R. § 1.610. (This requirement parallels the ex parte reexamination requirement of 37 C.F.R. § 1.510(b)(2).)

The PTO considered other potential changes, but in each case decided either to retain the original rule or concluded the change was mooted by its change to the content requirements.  It slightly bumped up the limit on the number of items of information that could be submitted from 10 to 12.

The cost for filing a supplemental examination request remains steep: $5,140 for the initial request plus $16,120 for the ex parte re-examination fee. Both must be paid at the time of initial request, and the $16,120 will be refunded if no re-examination is ordered.  The rules also finalize the substantial increase in the fee for filing a request for ex parte reexamination: $17,750.  Initially the small- and micro-entity reductions will not apply to these fees, although the PTO's proposed fee structure under Section 10 of the AIA do allow for such reductions. (USPTO fee website).

Given these costs, together with the realities of how patent litigation actually works and how inequitable conduct claims are generally developed, I remain highly skeptical of the PTO's projection that it will receive about 1,430 requests for supplemental examination annually.  Indeed, I suspect this number will actually be much, much smaller.  Most information that might be submitted in a supplemental disclosure request will be discovered too late for supplemental examination to matter.    For similar reasons, I am dubious of the PTO's prediction that supplemental examination will reduce the number of district court patent infringement cases in which inequitable conduct is plead as a defense. 

More USPTO Final Rules

The USPTO is in the process of publishing five final rules packages for implementing the America Invents Act (AIA) as well as one guide to the new style of trial practice before the Office.  The new rules are scheduled to be published tomorrow, but are now available in the Federal Register Reading Room and through the links below:

The USPTO has already published final rules on the statute of limitations for disciplinary hearings and Citation of prior art and written statements.  The USPTO is currently considering amendments to its proposed rules governing the first-inventor-to-file system.  Those rules will not likely be finalized until early 2013, but at least prior to the March 16, 2013 implementation of the new system.

According to an announcement by the USPTO, no additional new rules are expected to be released before September 16, 2012, the one-year anniversary of the AIA. 

The USPTO has scheduled a “roadshow” to discuss the new rules and their impact on patent practice.



And on the General Ethics Front: Civility and Professionalism Codes in the News

I co-wrote an "appellate lawyer's creed" in Texas back in the day, and I've also served on committees that write disciplinary rules, and the former always seemed duplicative and mushy, but they said that they were just rough guides, so, I thought, who cares.

A new article wants them to be clearer:

It is a well-settled and often-recited fact that lawyers are “officers of the court.” That title, however, is notoriously hortatory and devoid of meaning. Nevertheless, the Eleventh Circuit recently took the somewhat unprecedented step of utilizing the officer-of-the-court label to, in effect, sanction an attorney for the purportedly uncivil act of failing to provide defendant attorneys with pre-suit notice. While the author applauds the court’s desire to place greater emphasis on lawyer-to-lawyer collegiality as a component of officer-of-the-court status, the uncertainty the decision creates in terms of a lawyer’s role will potentially force litigators to compromise important client-centered duties. This Article argues that it would be preferable for courts to define sanctionable officer-of-the-court duties by reference to well-defined, existing procedural and ethical norms, thereby enhancing predictability and imbuing the label with much-needed substance.

The full article is here.

Non-Public Litigation: The Hidden Story of Monsanto v. DuPont

Guest Post by Professor Bernard Chao

Last year, I wrote about the problem of courts that injudiciously seal records in patent cases. See Bernard Chao, Not So Confidential: A Call for Restraint in Sealing Court Records, 2011 Patently-O Patent L.J. 6. In that essay, I explained how allowing access to court records is important because it teaches the public about our legal system. This in turn provides an important check on the law. Public outcry over unjust decisions can often lead to legislative or judicial reform.

Unfortunately, this problem has raised its ugly head again in the high profile Monsanto v. DuPont patent case. This case has made headlines because Monsanto has recovered $1 billion in damages even though DuPont has never even been accused of selling any seeds that infringe Monsanto’s patent for genetically modified Roundup Ready soybeans. Rather, the infringement is based on some Roundup Ready soybeans that the defendants developed but did not sell and the award appears to be based on the royalties that DuPont would have paid had it negotiated a license ahead of time. I use “appears” because Monsanto’s damages theory is hidden from the public view.

I have previously written on patent damages and was puzzled by how DuPont could be liable for $1 billion when it did not actually sell any infringing seeds. Consequently, I went to the case’s docket in the Eastern District of Missouri hoping to learn about Monsanto’s damages theory. There are several entries that might explain the theory that led to a $1 billion verdict. For example, DuPont filed a motion to exclude the opinions of Monsanto’s damages expert, Michael Keeley. Of course Monsanto filed a response and DuPont replied. These briefs and their exhibits were filed entirely under seal. In other words, there is no public redacted version of any of these documents. What’s more there is nothing in the docket that shows how the district court ruled on the DuPont’s motion. Even if the court’s ruling were in the docket, it probably would not have been available. Other docket entries show that the court has regularly sealed many of its other rulings including decisions on several motions for partial summary judgments, a motion to compel and a motion to strike. In other words, there is no way to understand many of the basic theories underlying Monsanto’s case and Dupont’s defenses.

Now you don’t need to read all the press coverage to understand that Monsanto v. DuPont is one of the most important cases in patent law. There appears to be a novel damages theory that led to $1 billion verdict. There are likely issues of first impression that relate to patents on genetically modified organisms. Indeed, the outcome has important ramifications for agribusiness generally. Yet, the critical court records are under seal and everyone is left in the dark. I won’t repeat my entire argument here. But, I will repeat my plea. At a minimum, the court should force parties in patent cases to file public versions of their briefs. They can leave out their profit margins and trade secrets. We don’t care about such things. But the public needs to know the basic facts and theories underlying these cases. Similarly, to the extent that courts seal their decisions, they need to publish public versions that explain the reasoning underlying their rulings.

“No” to Software Patents Per Se: Software is Only a Means to an End.

Guest Post by Martin Goetz

In Dennis Crouch's July 29, 2012 Patently-O essay "Ongoing Debate: Is Software Patentable?" he concludes by writing "It is simply ridiculous that after 40 years of debate, we still do not have an answer to the simple question of whether (or when) software is patentable"

One of the main reasons for this long debated argument about the patentability of software is that the wrong question is being debated. The current debate is mainly on the question "Should software be Patentable? And whether software, in the form of a computer program, is patentable subject matter?" Software is just a means to an end.  The debate should be about the invention.  

If the debate was on the question "Is an invention that is patentable in hardware, equally patentable if implemented in software?" there would be much less controversy. Hardware implemented inventions have been issued for well over a hundred years, long before the advent of the digital computer.

Back in October 2011 I wrote an article for a UK publication "Should software be patentable? That's the wrong question to ask". Because of the many comments to that article, many of which were critical of my arguments, I was asked for a follow up article "Pioneer Goetz rebuts software patent critics". In these two articles I tried to stress that software (a computer program) is purely part of a proper disclosure

Article 29 of the US Patent Office's application guidelines covering "Disclosure Obligations" states "…An applicant for an invention shall disclose the invention in a manner sufficiently clear and complete for the invention to be carried out by a person skilled in the art and may require the applicant to indicate the best mode for carrying out the invention…."

Clearly, if the best mode is a computer program, then that disclosure would be described through diagrams, flow charts, and descriptive text. In many inventions, the best mode is a combination of hardware and software. (Or if the best mode is not hardware and/or software but cams, pistons, and flywheels or water or wind power, so be it.)

If the Patent Office's examiners focused on the invention, and not on how the invention was disclosed, it would reject many, if not most Software and Business Method Patents. Unfortunately, the Patent Office is bound by a plethora of confusing Supreme Court and lower courts decisions and opinions. Yet, the US Patent Office does have flexibility in how it interprets the US Supreme Court's many rulings. This gets us back to the US Patent Office and its examiners who must be better trained to recognize true inventions. Easily said, and a gigantic challenge for the US Patent Office. But, unfortunately, that is where we are today.

Postscript: Back on November 30, 2009, Patently-O published my blog "In Defense of Software Patents" in response to the editorial "Abandoning Software Patents" by Ciaran O'Riordan, Director of End Software Patents (posted on Patently-O on November 6, 2009) which had as its premise that software companies are trying to protect "software ideas". In that article I commented on the Bilski Opinion as well as gave some concrete examples of software-only patents as well as hardware/software patents. That article also received hundreds of comments, many being negative, and in response in September 2010 I had a follow up article "In Defense of Software Patents – Part 2". Both those articles explained why software companies and other companies should not be denied patent protection on true inventions solely because part or all of the disclosure involves a computer and a computer program. It goes on to describe why many software companies are high technology companies that employ many highly educated people fully capable of inventing.

Cole Richter from my old law firm (MBHB) has written a short alert highlighting a number changes taking effect on September 16, 2012 at the USPTO.

  • Third-party pre-issuance submissions allowed
  • BPAI becomes the PTAB
  • Inter partes review begins (September 15 last day to file for inter partes reexamination)
  • Transitional post-grant review for business methods
  • Changes to the inventor's oath
  • Inventorship can now be corrected despite deceptive intent (by implication)

Read the alert.

Loser Pays System Introduced in Congress

Congressman Peter Defazio recently introduced H.R. 6245.  The working title of the bill is the “Saving High-Tech Innovators from Egregious Legal Disputes Act of 2012” also known as SHIELD.  The Bill would permit the award of attorney fees to successful defendants accused of infringing a computer hardware or software patent if the action “did not have a reasonable likelihood of succeeding.” Currently attorney fees are only awarded in “exceptional cases” under 35 U.S.C. 285 or as a sanction for violation of Fed. R. Civ. Pro. R. 11.

The statute would read:

(a) In General- Notwithstanding section 285, in an action disputing the validity or alleging the infringement of a computer hardware or software patent, upon making a determination that the party alleging the infringement of the patent did not have a reasonable likelihood of succeeding, the court may award the recovery of full costs to the prevailing party, including reasonable attorney’s fees, other than the United States.

The computer hardware and software would both be broadly defined by the new statutory provision.

Most jurisdictions around the world follow a loser-pays rule in civil litigation.  In theory (and with certain assumptions) a loser pays rule results in more meritorious claims and fewer non-meritorious claims.  The system (again in theory) allows a legally vindicated party to walk away without direct financial loss due to the litigation. A major difference between those systems and that proposed here is that the normal loser-pays system is two-way while this bill proposes a one-way system that only injures patentees.  The stated purpose of the bill is to reduce the amount of patent litigation brought by “patent trolls.”  For several reasons, I think that it is unclear whether the bill would achieve that result in any respect.

Anonymous Ex Parte Reexam Requests Again Permitted

A short article covering this topic by Foley & Lardner entitled "USPTO reverses course to permit anonymous ex parte reexamination requests" is here.  Boiled down, the PTO decided that identification of the real party in interest requesting reexam was not required because the practitioner requesting reexam is required to include a "certification by the third party requester that the statutory estoppel provisions of 35 U.S.C. 315(e)(1) or 35 U.S.C. 325(e)(1) do not prohibit the requester from filing the ex parte reexamination request."

However, the article notes;

In eliminating the requirement to identify the real party in interest, the USPTO has left open the possibility that a requester’s estoppel certification might be called into question during the ex parte reexamination proceeding:

If the Office becomes aware of facts that call the certification into question, the Office will determine, on a case-by-case basis, whether the request for ex parte reexamination is prohibited by statute.

Thus, patent owners may have a new way to terminate an ex parte reexamination against their patents if they learn the identity of the real party in interest — or of its privies – and are able to bring that information to the USPTO’s attention.

I can see this set up creating some potential for mischief, and understand why the Office first wanted identification.  Thoughts?