All posts by Jason Rantanen

About Jason Rantanen

Jason is a Law Professor at the University of Iowa College of Law.

Reverse Bifurcation in Practice

Patent

By Jason Rantanen

Patent litigation can be particularly frustrating and inefficient when litigation costs far exceed the potential damages resulting from an infringement.  This issue is particularly problematic when the patent holder's expected litigation costs are significantly lower than those of the accused infringer, such as in the instance of the prototypical "patent troll," because under such circumstances the settlement value is largely driven by the expected cost of litigation to the accused infringer as opposed to the actual damages from the infringement, resulting in a windfall for the patent holder.

One strategy for addressing this issue – and for streamlining patent litigation generally – is to decide cheaper and easier issues early in the litigation process, a concept discussed by Dennis Crouch and Robert P. Merges in their article Operating Efficiently Post-Bilski by Ordering Patent Doctrine Decision-Making, 25 Berkeley Tech. L.J. 1673 (2010).  An example of the strategy is "reverse bifurcation," in which the damages phase is moved to the front of the litigation sequence with the goal of figuring out how much is really at stake.  This procedural move may be particularly appropriate in the case of patent holders who sue a large number of parties, including parties with relatively small potential damages pools, in the hopes of extracting the aforementioned undeserved rents. 

This approach was recently employed by Otter Products LLC in its suit with Gellyfish Technology of Texas.  Earlier this year, Gellyfish sued Otter and 36 other defendants for infringement of Patent No. 6,847,310.  After being served with the Complaint, Otter attempted to identify the products accused of infringing the patent, finding that only two of the products named in the Complaint were ever sold by Otter, and those products (which have since been discontinued) had trival sales with potential damages estimated in the $800-$1200 range. 

When Otter's settlement offer was rejected, it filed a motion seeking to sever itself from the existing case and requesting a "reverse bifurcation" procedure in the new matter so that damages discovery and trial would precede liability discovery and trial.  A copy of that motion is available here:  Download Gellyfish v Alltel Motion.  The motion appears to have had some effect: shortly after it was filed, Otter withdrew the motion citing additional discussions between the parties that suggested an amicable resolution.

While no order issued in response to Otter's motion, Otter's approach makes considerable sense.  From a judicial and party efficiency standpoint, forcing patent holders to identify the accused products early on during litigation may greatly simplify discovery and perhaps eliminate the need for a merits determination, which itself can be extremely complex.  It may also help to discourage patent holders from bringing suits in instances where the potential damages are minimal compared to litigation costs.  And forcing patent holders to think about a realistic universe of damages (as opposed to pipe-dreams of every product sold by the accused infringer) may encourage earlier settlement – as perhaps occurred here.

Note: Thanks to Robert Merges for pointing me to the Otter case and the EDTexweblog.com for background on the case. 

Patently-O Bits & Bytes by Lawrence Higgins

Patent

BPAI's Backlog

  • Currently the BPAI receives about 1,200 new cases every month, but only decides around 600 cases per month. As shown in the graph below the BPAI's backlog has been increasing exponentially since 2005. In 2005, the BPAI had a backlog of only 882 cases; however, currently the backlog is well over 20,000 cases. The average time for a case to work its way through the system is over 30 months. There are many reasons that can be contributed to the BPAI's backlog, but the 3 most important reasons are:
    • The increase in the amount of cases filed per month. In 2005, the BPAI only received about 220 new cases per month; however, in 2011, this number was well over 1,000.
    • The increase in the amount of patent applications filed per year. In 2005, the PTO received 390,000 new utility patent applications; however in 2010 the PTO received 490,000 new applications. Numbers for 2011 are not available, but it can be presumed to be about 500,000 new applications.
    • The amount of money the PTO has to hire new judges. A BPAI judge salary is over $150,000 per year, and to effectively handle the caseload the BPAI would need to more than double the amount of judges that they currently have. To hire about 90 more judges, it would cost the PTO over 13.5 million dollars.

BPAI Statistics

Schmirler v. Kappos: This case seems to raise some interesting issues about joint inventors (liability and rights) and patent fees.

  • In Schmirler, full issue fee was paid by one of three inventors on his AMEX card. Power of attorney (POA) was transferred by all three inventors to a law firm to wrap up prosecution and POA by its terms was to cease when attorney received issued patent. There is some evidence that, after the POA was transferred, one of the inventors requested a refund from AMEX, not the USPTO. About 2 weeks after the patent issued, AMEX executed a chargeback to take the issue fee back from the PTO. The PTO did not discover the fee discrepancy until 3 years later, and when they did discover it they sent out a letter regarding the fee discrepancy. The PTO did not receive any response, so in January 2005 the patent was vacated. The case focuses on essentially one question; should Schmirler be allowed to proceed on his own to protect his patent rights that were vacated by the PTO? Complaint Schmirler-MSJ-Memo PTO-MSJ-Memo Schmirler-Response PTO-Response

The Smithsonian and USPTO collaborate on an exhibition

  • The exhibition The Great American Hall of Wonders examines the nineteenth-century American belief that the people of the United States shared a special genius for innovation. It explores this belief through works of art, mechanical inventions, and scientific discoveries, and captures the excitement of citizens who defined their nation as a "Great Experiment" sustained by the inventive energies of Americans in every walk of life. The exhibition opened on July 15, 2011 and will close on January 8, 2012. [Link]

Patent Jobs:

  • Snyder, Clark, Lesch & Chung is seeking a patent attorney with at least 2 years of experience to work in their Herndon, Virginia office. [Link]
  • BASF is seeking an IP Counsel to work at their Florham Park, New Jersey location. [Link]
  • Klarquist Sparkman is searching for patent associates or patent agents to work in their Portland office. [Link]
  • Ambature is seeking patent attorneys/patent agents. [Link]

Upcoming Events:

  • World Research Group is holding the 8th Annual Patents for Financial Services Summit on July 27-28th in New York. Guest speakers include David Cunningham, Larry Bromberg, Matthew Krigbaum, and Moshe Malina. (Patently-O readers can use Promo Code ENN794 for a $200 discount) [Link]
  • The 2nd European Pharmaceutical Regulatory Law Forum will be held in Brussels, Belgium September 21-22nd. The forum will focus on recent developments affecting the pharma industry in Europe and will discuss the impact of US developments on European companies. (Patently-O readers can register with code PO 10 for a 10% discount) [Link]
  • American Conference Institute's Life Sciences Business Development & Acquisitions in Emerging Markets conference is scheduled for September 26-27 in New York, NY. (Patently-O readers can register with code PO 200 for a discount) [Link]
  • IPMI is holding the IP Law & Management Institute on November 6th – 8th at the Rancho Las Palmas in Palm Springs, CA. Hailed as "One of the few programs geared to experienced in-house IP Counsel", the Institute is a CLE-accredited program designed to provide time-starved Heads of IP with the Opportunity to meet and network with their peers, learn from the best practices and validate solutions and services. [Link]

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

Recent Patent Law Scholarship

Patent, , ,

By Jason Rantanen

Several interesting new articles are currently making the rounds.  Two particularly noteworthy ones are summarized below:

James Bessen, A Generation of Software Patents
Do patents benefit software firms? James Bessen examines this issue through both a survey of existing literature and a new empirical study.  Bessen finds that although the number of software-related patents has grown rapidly over the past decade, the share of those patents obtained by software firms has remained relatively small, and is largely accounted for by the activity of a small number of large software firms.  In other words, most software patents go to firms outside the software industry.  Bessen also provides data that brings into question the value of patents to startup software firms and examines changes in the probability that a software patent will be involved in litigation during the first four years of its patent life.

The complete article is available via ssrn here.

Mark Lemley, The Myth of the Sole Inventor
In his most recent major article, Mark Lemley challenges the canonical story of the lone genius inventor while proposing a novel justification for the patent system.  Professor Lemley first breaks down the idea that invention occurs independantly, created by a handful of extraordinary inventors, through a series of vignettes about famous inventions: the steam engine, steamboats, the cotten gin, and other classic examples of pioneering inventions.  Rather than lone inventors, Lemley argues, history is replete with examples of simultaneous invention, calling into question the traditional incentive justification for the patent system.  Nor do any of the other conventional justifications for the patent system work, Lemley suggests.  What is needed instead is a new theory, which he offers: patents encourage patent racing, which drives innovation to occur faster, and in a more diverse manner, than it otherwise would.

The complete article is available via ssrn here.  Written Description blog offers a more in-depth discussion of the article.

Patently-O Bits & Bytes by Lawrence Higgins

Patent

District Courts Selected for Patent Pilot Program

  • Fourteen federal district courts have been selected to participate in a 10-year pilot project designed to enhance expertise in patent cases. To be eligible to participate, courts had to be among the 15 district courts in which the largest number of patent and plant variety protections cases were filed in 2010. Some of the selected courts are the; Eastern District of Texas, Northern District of Texas, Southern District of California, and Southern District of California. Among the courts selected, the Eastern District of Texas has seen the most patent litigation in recent years. Will this patent program cause a shift in the amount of cases that the Eastern District of Texas (or any of the courts selected) receives or will they continue to receive a high number of patent cases? [Link]

Group of 6 Buys Over 6,000 Patents

  • The winning bid for the Nortel patents was a staggering $4.5 billion dollars, roughly equal to $750,000 dollars per patent. The 6 companies that came together to outbid Google and others were; Apple, EMC, Ericsson, Microsoft, RIM and Sony. John Amster the CEO of RPX, a company who participated in the auction, stated that “a number of… companies clearly wanted to both own the patents themselves and keep them away from Google.” While none of the winning companies have reported exactly why they wanted the patents and what they plan to do with the patents, presumptions can be made. For example, it can be presumed that Apple and RIM wanted the patents to try to keep Google out of the mobile communications market. Also, it can be presumed that the 6 companies wanted the patents for the same reason Google wanted the patents, which was for a means to stay out of patent infringement lawsuits. [Link]

IP Podcast and Suffolk Law!

  • Professor Andrew Beckerman-Rodau and Ian Menchini of Suffolk Law School produce a series of IP Law podcast. These podcast are available for free on ITunesU. The podcasts are downloaded approximately 1,000 times weekly and discuss many interesting IP topics. [Link] If anyone is interested in doing a podcast, they should contact Ian Menchini by email. (imenchin@suffolk.edu) Also, the Suffolk Law School has an IP Concentration for law students and a Patent law specialization for law students who may be interested in practicing IP law. [Link]

Patent Jobs:

  • Grimes & Battersby is seeking senior IP attorneys with experience in IP litigation, prosecution and licensing. [Link]
  • Edell, Shapiro & Finnan is searching for associates with backgrounds in electrical engineering and mechanical engineering, to work in their Rockville, Maryland office. [Link]
  • An Orange County based IP firm seeks to fill 2 positions. One is a part time litigator and the other is a full time litigator/prosecutor. [Link]
  • Fenwick & West is looking for a patent litigation associate with 2-4 years of patent litigation and a Ph.D. in a life science discipline. [Link]

Upcoming Events:

  • World Research Group is holding the 8th Annual Patents for Financial Services Summit on July 27-28th in New York. Guest speakers include David Cunningham, Larry Bromberg, Matthew Krigbaum, and Moshe Malina. (Patently-O readers can use Promo Code ENN794 for a $200 discount) [Link]
  • The 2nd European Pharmaceutical Regulatory Law Forum will be held in Brussels, Belgium September 21-22nd. The forum will focus on recent developments affecting the pharma industry in Europe and will discuss the impact of US developments on European companies. (Patently-O readers can register with code PO 10 for a 10% discount) [Link]

  • American Conference Institute’s Life Sciences Business Development & Acquisitions in Emerging Markets conference is scheduled for September 26-27 in New York, NY. (Patently-O readers can register with code PO 200 for a discount) [Link]
  • IPMI is holding the IP Law & Management Institute on November 6th – 8th at the Rancho Las Palmas in Palm Springs, CA. Hailed as “One of the few programs geared to experienced in-house IP Counsel”, the Institute is a CLE-accredited program designed to provide time-starved Heads of IP with the Opportunity to meet and network with their peers, learn from the best practices and validate solutions and services. [Link]

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

Calcar v. Honda: CAFC’s First Post-Therasense Inequitable Conduct Opinion

Patent, , ,

By Jason Rantanen

American Calcar, Inc. v. American Honda Motor Co., Inc. (Fed. Cir. 2011) Download 09-1503-1567
Panel: Lourie (author), Bryson, and Gajarsa

In its first decision addressing the issue of inequitable conduct since Therasense v. Becton Dickinson, the Federal Circuit affirmed the district court's finding of materiality with respect to one patent, but remanded for further findings on materiality (in connection with the two remaining patents) and intent (with respect to all three patents).

The inequitable conduct issues in this case revolve around a family of patents sharing a common specification.  One of the patents, No. 6,330,497 ("the Three-Status patent"), relates to "a system that allows a user to select an option from a list, to be shown a preview of information about it, and then to activate it."  Slip Op. at 12.  Two other patents, Nos. 6,438,465 and 6,542,795 ("the Search patents") claim a system for performing searches on a system in a vehicle. 

Prior to the filing of the patent application, the inventors closely examined an Acura 96RL that contained a navigation system with features similar to those later claimed in the Three-Status and Search patents.  Although the 96RL system is described in the background section of the patent application, that description is limited to the navigation aspect of the system, not the user interface aspects.  Thus, the inventors "never disclosed to the PTO the aspects of the 96RL system relating to the three-status feature or the search feature."  Slip Op. at 14.This failure to disclose formed the basis of the district court's finding of inequitable conduct, which Calcar sought to overturn on appeal.

Jury Verdict Merely Advisory
In reaching its conclusion of inequitable conduct, the district court disregarded an advisory jury verdict of no inequitable conduct.  The CAFC rejected Calcar's argument that this constituted error.  "Inequitable conduct is equitable in nature, with no right to a jury, and the trial court has the obligation to resolve the underlying facts of materiality and intent…Where a court submits the question to a jury, and both parties agree that the jury findings will be advisory, the court shall treat them as such. [] That is the universal rule."  Slip Op. at 23 (internal citations omitted).

Appliation of Therasense
The CAFC next turned to the substance of the district court's findings.  With respect to the Three-Status patent, the panel concluded that, even under the "but-for" standard of Therasense, the district court had correctly found materiality.  "We agree with Honda that the undisclosed 96RL information was material to the Three-Status patent because the jury found, and the court upheld, the asserted claims as anticipated by the 96RL system, and ACI has not appealed that decision to us."  Slip Op. at 25. 

The materiality of the Search patents was more questionable, given that the jury had rejected Honda's invalidity arguments based on the 96RL system.  Nevertheless, "the withheld information may be material if it would have blocked patent issuance under the PTO's preponderance of the evidence standard, giving those patents' claims their broadest reasonable construction."  Id.  As a result the CAFC remanded to the district court to assess materiality under a "but-for" standard, applying the evidentiary standard and claim scope used by the PTO.  The CAFC did not give any guidance as to how the latter might differ from the scope previously applied by the district court.

The CAFC reached a similar result on intent, concluding that the district court had relied on a sliding scale standard, "basing its finding of intent significantly on the materiality of the 96RL system to the claimed invention."  Slip Op. at 26.  That approach was rejected in Therasense, and the CAFC remanded for further consideration in light of that opinion.

Note: The court also affirmed the district court's rulings of noninfringement as to several other patents and reversed its denial of judgment as a matter of law that another patents was invalid. 

For those who find this information noteworthy, the panel in this case included two members of the dissent in Therasense.  Judge Lourie, the author of this opinion, was a member of the Therasense majority.

Patently-O Bits & Bytes by Lawrence Higgins

Bits and Bytes

Constitutional Challenge to False Marking Statute

  •  Oral arguments in the case of United States, ex rel. FLFMC, LLC v. Wham-O, Inc., will take place on July 7th. The Federal Circuit will be resolving the constitutional challenge to the false marking statute (35 U.S.C. § 292(b)). The merits panel agreed to allow the government and the U.S. Chamber of Commerce to participate in oral arguments. The court expanded the oral argument time to 20 minutes per side. This case could set the precedent to eliminate false marking lawsuits. Regardless of how the Federal Circuit rules in this case, it is likely to be appealed to the Supreme Court. [FMLC-Reply-Brief] [Order-Re-Wham-O-Oral-Arg] [Cato-Brief] [Brief-of-Amicus-Curiae-Chamber-of-Commerce] [USA-Brief-in-Wham-O] [Wham-O-Brief]

Article One launches 3 Patent Studies Focused on 4 Patents on by Lodsys

  •  In response to the lawsuit Lodsys filed against several Apple iPhone developers, [Link] Article One is offering a $5,000 reward per study for the best prior art reference that provides a path to invalidity. The patents at issue are 7,133,834, 5,999,908, [Link] 7,222,078, [Link] and 7,620,565. [Link]To date Lodsys has sued 27 companies for patent infringement, so there is no way of knowing exactly who is funding the study that Article One is overseeing. [Link]

Google Granted Patent for “Detecting and Rejecting Annoying Documents”

  •  On June 28th Google was granted patent # 7,971,137, for a system and method for evaluating documents for approval or rejection and/or rating. The method comprises comparing the document to one or more criteria determining whether the document contains an element that is substantially identical to one or more of a visual element, an audio element or a textual element that is determined to be displeasing.  

What Impact Will Patent Reform Have on the Patent Office?

  •  The Patent Reform legislation will allow the PTO to keep fees they receive from applicants in an account that Congress can’t touch. The PTO will likely start hiring more patent examiners in order to try to decrease the backlog of patent applications, which currently stands at around 685,000. The satellite office in Detroit more likely than not will open sometime in the near future, possibly followed by more satellite offices. Track one of the Three-Track program, which allows applicants to pay extra money to receive a first office action within a certain amount of time will go into effect. Patent Examiners will likely receive more training and be able to resume working overtime.

Patent Jobs:

  • Salix Pharmaceuticals is searching for an IP and Licensing Attorney with at least 3 years of experience in pharmaceutical patent prosecution. [Link]
  • BASF is seeking a Patent Counsel with 8 or more years of experience in IP transaction work and at least 5 years of experience in patent prosecution. [Link]
  • Sutherland LLP is looking for an Associate of Patent Agent with 1-4 years of experience in patent prosecution and a background in Electrical Engineering. [Link]

  • Baker Botts is searching for a Patent Agent with 1-3 years of experience. [Link]

Upcoming Events:

  • The National Association of Patent Practitioners (NAPP) will hold their 2011 Annual Meeting and Nuts & Bolts Short Course at the Venetian Palazzo Hotel in Las Vegas, Nevada on July 16-19, 2011. [Link]
  • The American Conference Institute (ACI) will hold a Hatch-Waxman Boot Camp July 18-19 in San Diego. ACI’s Hatch-Waxman Boot Camp has been designed to give counsel and advisors to brand name and generic drug critical insights into commercialization and the pre-approval process, and also provide an in-depth review of Hatch-Waxman and other IP basics relative to small molecules and biologics. [Link]
  • World Research Group is holding the 8th Annual Patents for Financial Services Summit on July 27-28thin New York. Guest speakers include David Cunningham, Larry Bromberg, Matthew Krigbaum, and Moshe Malina. (Patently-O readers can use Promo Code ENN794 for a $200 discount) [Link]
  • The 2nd European Pharmaceutical Regulatory Law Forum will be held in Brussels, Belgium September 21-22nd. The forum will focus on recent developments affecting the pharma industry in Europe and will discuss the impact of US developments on European companies. (Patently-O readers can register with code PO 10 for a 10% discount) [Link]

 

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

 

 

 

Patently-O Bits & Bytes by Lawrence Higgins

Patent

Should anyone really be allowed to request Reexamination?

  •  Since 1981, there has been over 11,000 ex parte reexam request submitted to the PTO. As you would guess the majority (66%) being filed by a 3rd party and 33% being filed by the actual patent owner. In 1982 there were only 187 reexam request compared to 780 in 2010, this is over a 300% increase in request. Also, reexam certificate results show that the actual claim changed 66% of the time. Out of the total request for reexam, only 8% of the requests were denied. This leads me back to my question; should the PTO allow anyone from the general public to request a reexam? I would argue no, essentially because a single individual or company could in theory request a reexam for any and every patent.  [USPTO Ex Parte Reexam Statistics]

Will Apple Sue?

  •  On June 21st Apple was granted patent # 7,966,578 for a “Portable multifunction device, method, and graphical user interface for translating displayed content” essentially a touchscreen device such as the IPad or IPhone. Apple could potentially use patent “578” to force their competitors to either, stop manufacturing infringing products or pay licensing fees. This patent is extremely broad and could cover a lot of items currently on the market such as smartphones, e-readers, and tablets to name several. One of Apple’s competitors will surely request a reexam on this patent and patent “578” is more than likely to end up in litigation. [Link]

USPTO Appoints New Deputy Commissioner for Trademark Operations

  •  Mary Boney Denison has been appointed the new Deputy Commissioner for Trademark Operations. Denison will oversee the examination and processing of applications in the trademark division of the USPTO. [Link]

Patent Jobs:

  • Baker & Daniels is looking for an IP associate with up to 5 years of experience prosecuting patents, to work at their Fort Wayne, Indiana office. [Link]
  • Amgen is looking for an individual with 4 or more years of experience in patent or IP law to join their company as Senior Counsel. [Link]
  • Monsanto is seeking a patent scientist with a MS degree or higher and 2+ year’s research experience. [Link]
  • The Marbury Law Group is seeking an IP associate with 2-8 years patent experience and a telecommunications background, to work at their Reston, Virginia office. [Link]

Upcoming Events:

  • The National Association of Patent Practitioners (NAPP) will hold their 2011 Annual Meeting and Nuts & Bolts Short Course at the Venetian Palazzo Hotel in Las Vegas, Nevada on July 16-19, 2011. [Link]
  • The American Conference Institute (ACI) will hold a Hatch-Waxman Boot Camp July 18-19 in San Diego. ACI’s Hatch-Waxman Boot Camp has been designed to give counsel and advisors to brand name and generic drug critical insights into commercialization and the pre-approval process, and also provide an in-depth review of Hatch-Waxman and other IP basics relative to small molecules and biologics. [Link]
  • World Research Group is holding the 8th Annual Patents for Financial Services Summit on July 27-28th in New York. Guest speakers include David Cunningham, Larry Bromberg, Matthew Krigbaum, and Moshe Malina. (Patently-O readers can use Promo Code ENN794 for a $200 discount) [Link]

 

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

 

 

 

 

The Big Government Patent Bill: Guest Essay By John Duffy

Patent

Posted by Jason Rantanen

There are many sophisticated and nuanced reasons to oppose H.R. 1249, the 140-page patent bill currently pending before the House of Representatives, but the clearest reason for opposition can be stated in quite simple and stark terms: The proposed legislation would undeniably expand the size of the federal bureaucracy and increase the cost and complexity of the American patent system.

Thus begins a new and timely essay about the patent reform bill written by Professor John Duffy of George Washington University Law School, in which he focuses on three fundamental issues raised by H.R. 1249 that should concern any publicly-minded citizen.  The complete essay can be downloaded here: Download The Big Government Patent Bill

Tyco v. Mutual Pharmaceutical: Obviousness of a Pharmaceutical Formulation

Patent

By Jason Rantanen

Tyco Healthcare Group LP v. Mutual Pharmaceutical Company, Inc. (Fed. Cir. 2011) Download 10-1513
Panel: Newman, Bryson (author), Gajarsa

Pharmaceutical formulation patents often make for challenging obviousness determinations, as the difficulty of reducing a new formulation to practice is balanced against the prior art, which typically includes the relevant pharmaceutical compound itself.  The formulation in this case, however, raised few such concerns for the Federal Circuit.

A pharmaceutical formulation is a particular form, such as a tablet or suspension, into which a chemical compound (often referred to as an Active Pharmaceutical Ingredient, or API) is placed in order to be easily administered to patients.  Pharmaceutical formulations may vary in a number of ways, such as in their effect (for example, an extended release formulation may prolong the release period of the API) or their dosage (5, 10, or 15 mg of the API, for example).

Patent No. 9,211,954 provides an example of the latter.  It claims a formulation of the API temazepam, a drug used for the treatment of insomnia. The patent claims priority to September 1986.

The obviousness issue in this case revolved around whether the formulation claimed by the '954 patent, which incorporates a 6-8 mg dosage unit of temazapam, was obvious in light of Tyco's prior 15 and 30 mg formulations of temazepam in light of a 1983 edition of the British National Forumulary reference.  Formulations of temazepam have been marketed since the 1970's, including Tyco's own RESTORIL. It was undisputed that the only difference between the earlier formulations of RESTORIL and the claimed formulation was the dosage (Tyco's earlier formulations contained 15 and 30 mg doses).  The district court granted summary judgment of obviousness based on Tyco's earlier RESTORIL product, together with the BNF dosing guidelines for temazepam.

On appeal, the Federal Circuit affirmed the obviousness ruling.  The most interesting aspect of the opinion is the section addressing Tyco's argument that the BNF reference – which recommended a 5-15 mg dosage for elderly patients – did not teach the 6-8 mg range of the '954 patent because it did not include or cite any evidence demonstrating that this range would be effective in the treatment of insomnia.  The CAFC rejected this argument:

The ’954 claims do not discuss the intended use of the capsules in a particular treatment regimen. The manufacture of a 7.5 mg temazepam capsule with the disclosed claim limitations would infringe both claims of the ’954 patent, irrespective of the efficacy of the product. Dr. Orr’s statements did not contest the fact that the BNF refers to dosages of temazepam between 5 and 15 mg. His statements are directed to the utility of temazepam as a treatment for insomnia.

Tyco argues that all the properties of a composition of matter relevant to patentability must be considered in evaluating whether that composition would have been obvious in light of the prior art, and that the unclaimed property of effectiveness in treating insomnia renders the claims at issue nonobvious. That argument is unavailing. “The discovery of a new property or use of a previously known composition, even when that property and use are unobvious from the prior art, can not impart patentability to the known composition.” In re Spada, 911 F.2d 705, 708 (Fed. Cir. 1990) (noting that “a new use of a known composition . . . may be patentable as a process”). The recommendation in the BNF of a range of temazepam dosages that include the dosages claimed in the ’954 patent renders obvious the claims to those dosages even in the absence of documentation in the BNF of the effectiveness of such dosages.

Slip Op. at 7-8.  The CAFC also rejected Tyco's arguments of teaching away, unexpected results, and commercial success.

Therasense: Further Impressions

Patent

By Jason Rantanen

Two weeks ago, I posted a link to a short essay, written by Lee Petherbridge and myself, about the potential impact of Therasense on the patent system.  We have since received an overwhelming number of thoughtful and clearly informed comments, for which we are extremely grateful.  Attached is a link to an updated draft that incorporates many of the points raised by the comments.  

The most compelling point raised by the comments was a need for a specific section analyzing the impact of Therasense on patent practitioners.  In this updated draft, we provide that specific section.

It begins on page 20, and includes among other things an analysis of the impact of Therasense on the concern about IDS overdisclosure that featured so prominently in the opinion and in the comments we received.  The latest version can be downloaded here: Therasense – First Impression.

As with the prior version, we welcome any comments, either positive or negative.

Inventio v. ThyssenKrupp: Functional Claiming

Patent,

By Jason Rantanen

Inventio AG v. ThyssenKrupp Elevator Americas Corporation (Fed. Cir. 2011) Download 10-1525
Panel: Lourie (author), Prost, Moore

Patent claims may be indefinite due to their use of functional language untethered to any structure.  Prevailing on such an argument, however, can be quite difficult, as Inventio v. ThyssenKrupp illustrates.

The patents in this case relate to a device that allows elevator passengers to enter their floor destination as they call for the elevator.  Central to the claimed invention are two components: a "computing unit," which processes the passenger's input, and a "modernizing device," which acts as an intermediary between the computing unit and the elevator control.  During claim construction, the district court concluded that both claim terms "lacked sufficient structure to avoid § 112 ¶ 6," slip op. at 7, further holding that they were indefinite because the written description failed to disclose corresponding structure to perform the recited functions.  Inventio appealed.

Strong Presumption Against Means Plus Function Construction
Patentees are permitted to include purely functional language in their claims under § 112 ¶ 6.  Under that provision, such limitations "shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof."  Slip Op. at 9.  Whether § 112 ¶ 6 applies depends principally on whether the limitation uses the term "means."  When that term is not used, "we presume that the limitation does not invoke § 112 ¶ 6."  Id.  The presumption "is a strong one that is not readily overcome."  Id. at 10.

Presumption Not Overcome
Given the absence of the term "means" in the disputed limitations, the court focused its analysis on whether ThyssenKrupp had overcome the "strong presumption" against application of § 112 ¶ 6, concluding that it had not.  In reaching this conclusion, the court agreed with Inventio that it should consider the written description in determining whether the claims recite sufficient structure. "[I]t is proper to consult the intrinsic record, including the written description, when determining if a challenger has rebutted the presumption that a claim lacking the term "means" recites sufficiently definite structure."  Slip Op. at 12.  Applying this rule, the court found that the terms "modernizing device" and "computing unit" provided, at least in the context of the two patents at issue, sufficient structure:

"In this case [] the claims recite a “modernizing device,” delineate the components that the modernizing device is connected to, describe how the modernizing device interacts with those components, and describe the processing that the modern-izing device performs. The written descriptions addition-ally show that the modernizing device conveys structure to skilled artisans. Thus, this is not a case where a claim nakedly recites a “device” and the written description fails to place clear structural limitations on the “device.”"

Slip Op. at 15.  The CAFC applied similar reasoning to "computing unit."

Is The Court Effectively Applying a Presumption Against Indefiniteness of Functional Claim Elements?
Under Supreme Court precedent, a claim may be invalid for indefiniteness if it contains functional claim limitations.  See General Electric Co. v. Wabash Appliance Corporation, 304 U.S. 364, 371 (1938); United Carbon Co. v. Binney & Smith Co., 317 U.S. 228, 234 (1942); c.f. Halliburton Energy Services, Inc. v. M-I LLC, 514 F.3d 1244, 1255 (Fed. Cir. 2008). Section 112 ¶ 6 provides the exception discussed above.

I question how viable this aspect of the indefiniteness doctrine is in practice, however, at least under the Federal Circuit's current approach.  Under cases such as Inventio, the CAFC's framework for analyzing indefiniteness based on functional claiming operates like this: (Question One) Is this a means-plus-function claim element?  If No, then it is not indefinite.  If Yes, (Step Two) Does the written description recite sufficient structure? If No, the claim is indefinite; if Yes, it is not.  Since there is a strong presumption in favor of answering "No" to Question One unless the term "means" is used, the effective result is a strong presumption against indefiniteness unless the patent drafter elects otherwise.   This makes it extremely difficult for a party challenging the definiteness of a functional claim element to prevail, and seems somewhat inconsistent with the broader ideas of General Electric and United Carbon.

I could see the CAFC's rule as perhaps being justified on the ground that patents are entitled to a presumption of validity, and the indefiniteness issue is, after all, one type of validity analysis.  But that does not appear to be how the court has justified its rule thus far.  Instead, it has treated it solely as a claim construction question in which deference is given to the patent drafter's choice of language. 

ThyssenKrupp's Motion to Strike
Following the completion of merits briefing, ThyssenKrupp filed a motion to strike portions of Inventio's reply brief on various grounds, including that it contained new and misleading arguments about the disclosure of the '861 and '465 patents.  Unimpressed by ThyssenKrupp's motion, the court rejected it.  "ThyssenKrupp simply disagrees with Inventio's legal arguments, and its motion seems to us to be an improper attempt to obtain the final word in the appeal, a practice that we strongly discourage."  Slip Op. at 3.  FIling such a motion, the court commented, "borders on the type of frivolous and wasteful litigation tactics that we have previously frowned upon."  Id.

Update: For those interested in reading the offending brief, a copy can be downloaded here:  Download SchmitMotionToStrike.  Thanks to Hal Wegner for circulating a copy in his email newsletter. 

Patently-O Bits & Bytes by Lawrence Higgins

Patent

Patent Trial Program Could be a Good Idea

  • California’s Northern District has seen a large increase in the number of patent lawsuits. As a result, this District was picked to participate in a 10-year pilot program that could route patent cases to judges who request them. This program is intended to send patent cases to judges who have an expertise in patent law. If a judge receives a patent law case and does not want it he or she may decline the case, and the case will be sent to the judge with the patent law expertise. Should this program be applied in all District Courts in order to get judges with patent law knowledge to hear patent law cases? [Link]

The House Appropriations Committee Doesn’t Think the USPTO Should Keep Fees

  • The House Appropriations Committee strongly opposes the USPTO to keep funds that it makes. The committee argues allowing the USPTO to keep all their fees would make it financially independent of the budget process and therefore essentially free from congressional oversight. This could possibly mean the language in the Patent Bill that gives the USPTO the right to keep their fees could be removed, in order to pass the remaining parts of the Bill. If this language is removed the USPTO’s budget could possibly get cut again or stay the same, which in both cases the USPTO would remain underfunded. Underfunding the USPTO will cause the USPTO not to be able to effectively decrease the number of patent applications that are backlogged. [Link]

Another Federal Judge Holds the False Marking Law Unconstitutional

  • The first case in which a judge held the false marking statute unconstitutional was Unique Product Solutions Ltd. v. Hy-Grade Valve Inc., which was decided in Ohio. Now a judge in Pennsylvania held in the case of Rogers v. Tristar Products Inc., that the law is unconstitutional. The reasoning this court used was that, the false marking statute has been held to be a criminal law, but that, under its qui tam provision, "the what, when, where, and how of the litigation remain subject to the whims of whomever sees fit to bring the suit." While this decision has practically no precedence, this could be a sign that the false marking law is on its way to the Supreme Court, in order to determine if it is in fact unconstitutional. [Link]

Patent Jobs:

  • Kaleidescape is looking for an in-house patent attorney or patent agent with 3 years of patent experience to work in their California location. (telecommuting is an option) [Link]
  • Meso Scale Diagnostics is seeking a patent attorney with an engineering background and 3-10 years of patent experience to work at their Maryland location. [Link] 
  • Aspen Aerogels is searching for a patent agent or an IP analyst with 5 years of experience to work at their Massachusetts location. [Link]
  • The Coca-Cola Company is seeking to fill 3 patent agent positions at their Atlanta location; individuals must have 2-4 years of patent experience. [Link]

Upcoming Events:

  • The fourth IP Business Congress (IPBC) will take place on June 19-21 in San Francisco. IPBC 2011 will bring together leaders from the worlds of IP business and finance to discuss issues that center on the creation and management of IP value. There will be over 50 highly regarded guest speakers such as; Judge Michel, Judge Rader, Teresa Rea, Tracey Thomas, Loria Yeadon, Benjamin Lee, and Peter Menell just to name few. [Link]
  • The Biotechnology Industry Organization (BIO) will hold its annual BIO International Convention on June 27-30 in Washington, DC. BIO brings together 15,000 – 17,000 industry experts from over 60 countries. The convention will hold several sessions strictly related to IP. [Link]
  • The American Conference Institute (ACI) will hold a Hatch-Waxman Boot Camp July 18-19 in San Diego. ACI’s Hatch-Waxman Boot Camp has been designed to give counsel and advisors to brand name and generic drug critical insights into commercialization and the pre-approval process, and also provide an in-depth review of Hatch-Waxman and other IP basics relative to small molecules and biologics. [Link]

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

Boston Scientific v. Johnson & Johnson

Patent, ,

By Jason Rantanen

Boston Scientific Corp. v. Johnson  & Johnson (Fed. Cir. 2011) Download 10-1230
Judges: Bryson, Gajarsa (concurring-in-part), Moore (author)

The line between written description and enablement analyses is often unclear; Boston Scientific makes it even blurrier, at least in the eyes of one Federal Circuit judge.

The patents involved in this appeal relate to drug-eluting coronary stents using a particular chemical compound.  One set of patents ("the 1997 patents") claims stents using either rapamycin or a macrocyclic lactone analog of rapamycin, while the other patent-in-suit, the '662 patent, claims stents using either rapamycin or a macrocyclic triene analog of rapamycin.  In both cases, the the analog limitations were added well after the patents' priority date.  For purposes of the appeal, both analogs were broadly defined to be any molecule with structural similarity to rapamycin.

The district court granted summary judgment of invalidity of the 1997 patents based on a lack of enablement and lack of adequate written description, and granted summary judgment of the '662 patent based on lack of adequate written description.  The patent holders appealed.

Species-Genus Analysis
On appeal, the majority applied the "species-genus" framework to hold the patents invalid for lack of adequate written description.  Under that approach, "a sufficient description of a genus requires the disclosure of either a representative number of species falling within the scope of the genus or structural features common to the members of the genus so that one of skill in the art can 'visualize or recognize' the members of the genus."  Slip Op. at 17, quoting Ariad, 598 F.3d at 1350.  Here, the 1997 patents contained no examples of macrocyclic lactone analogs of rapamycin and gave no essentially guidance as to how to determine whether a compound falls into that category.  Similarly, the '662 patent, although disclosing the broad genus of "analogs" of rapamycin, failed to disclose the sub-genus of "macrocyclic triene analogs" of rapamycin.

Lack of Examples is Telling
In reaching its conclusion, te majority paid particular heed to the lack of any examples of the claimed genera.   "Although examples are not always required to satisfy the written description requirement, the lack of any disclosure of examples may be considered when determining whether the claimed invention is adequately described."  Slip Op. at 18.

Use of POSITA Knowledge to Fill In the Blanks
Although acknowledging that in some cases it may be appropriate to look to the knowledge of one of skill in the art when performing a written description analysis, the majority imposed a substantial limit on this approach.  "Because the specification is viewed from the perspective of one of skill, in some circumstances, a patentee may rely on information that is "well-known in the art" for purposes of meeting the written description requirement….However, when the four corners of the specification directly contradict information that the patentee alleges is "well-known" to a person of skill at the effective filing date, no reasonable jury could conclude that the patentee possessed the invention."  Slip Op. at 22-23. In this instance, the majority concluded that "specification of the 1997 patents itself refutes any conclusion that the structural elements and its mechanism of action and biological activity was known….Thus, there is insufficient correlation between the function and structure of rapamycin and its analogs to provide adequate written description support for the entire genus of macrcyclic lactone analogs of rapamycin."  Slip Op. at 23 (internal citation omitted).

Judge Gajarsa: Stop Using Written Description When Enablement Will Do
Concurring in the judgment of invalidity and with the majority's ruling on the '662 patent, Judge Gajarsa wrote separately to express the view that "[t]he enablement requirement of 35 U.S.C. § 112 ¶ 1 is the appropriate tool for invalidating claims that are broader than their disclosure."  The result is a blurring of the line between enablement and written description:

The majority’s opinion further extends the written description requirement into the realm of enablement. Much of the confusion in this case is due to the difficulty of determining what constitutes a genus or a subgenus, the relationship between the structure and the function of compounds, and how the written description requirement applies to novel compounds as opposed to novel combinations of known elements. These are legal inquiries predicated on disputed issues of material fact. Applying the enablement requirement would help to clear the thicket of jurisprudence regarding § 112 ¶ 1. As discussed briefly below, in this case, the enablement analysis is simpler and more appropriate.

Therasense v. Becton Dickinson: A First Impression

Patent

by Jason Rantanen

I've got a new essay (with Lee Petherbridge) in which we provide an early analysis of what we think are substantial law and policy concerns raised by Therasense.  In the essay we argue that Therasense could have a much more significant, complex, and nuanced impact on the legal infrastructure of American innovation than the opinion for the court appears to appreciate.  In view of these complexities, we explain why the court may be too sanguine in its expectations for the instrumental effect of its decision.

In a nutshell, we consider the possible impact of Therasense on the efficiency of patent prosecution, on the amount of low quality patents, and on the cost of patent litigation.  In view of the significant impact that newly appointed judges had on the outcome of the appeal, we also consider what, if anything, Therasense may reveal about the characteristics of the new Federal Circuit. 

The essay is available here.  As this is a draft, we welcome any comments.  They can be provided in response to this post or sent to me at rantanen [at] uchastings [dot] edu.

Patently-O Bits & Bytes by Lawrence Higgins

Patent, , ,

Apple iPhone Developers Sued

  • Lodsys has filed a patent infringement suit against several developers of applications for Apple. [Complaint] Lodsys claims that patent numbers 7,620,565 and 7,222,078 were used by the developers without their consent. The suit was filed after Apple sent a warning letter to Lodsys, telling Lodsys to leave the developers alone. Apple claims that the license that they received from Lodsys allows the developers to use the patented technology for making Apps for Apple products. The Apps that the complaint reference are Twitterrific, Labyrinth, and Quickoffice Connect just to name a few. [Link]

USPTO’s Patent Experience Externship Program (PEEP)

  • This year the USPTO will have its largest student program ever; over 200 students (including myself) have been accepted to work at the USPTO. The PEEP gives future patent attorneys and students a view into the day to day operations at the USPTO. Also the PEEP helps the USPTO identify and recruit future patent examiners. The PEEP integrates theories learned at universities with real-world practice and implementation of those theories. The PEEP officially started on June 1 and will run until the middle of August. [Link]

New Secretary of Commerce?

  • President Obama has nominated John Bryson as the next Secretary of Commerce. The current Secretary of Commerce Gary Locke will become the new Ambassador to China. John Bryson is the former CEO of Edison International and co-founder of the Natural Resources Defense Council. [Link]

New Patent Blog!

  • www.ipreglaw.com is a new patent blog started by Scott Bialecki. The blog's purpose is to offer practical advice and insight from a former Federal Trade Commission (FTC) staffer that became an IP litigator. Scott was with the FTC for over 5 years, and brings his regulatory knowledge to the Intellectual Property world to offer great advice on his blog.

Patent Jobs:

  • Toler Law Group is searching for patent attorneys to work in their Austin, TX office. Toler Law group is evaluating both lateral and newly graduated attorneys. [Link]
  • Solazyme is seeking an IP attorney with 4-5 years of experience to work at their San Francisco location. [Link]
  • Sterne, Kessler, Goldstein & Fox is looking for a biotechnology patent attorney with at least 3 years of experience to work in their Washington, DC office. [Link]
  • Choate, Hall & Stewart is searching for an attorney, patent agent or staff scientists with an EE background and 2 years of patent prosecution experience. [Link]

Upcoming Events:

  • The Biotechnology Industry Organization (BIO) will hold its annual BIO International Convention on June 27-30 in Washington, DC. BIO brings together 15,000 – 17,000 industry experts from over 60 countries. The convention will hold several sessions strictly related to IP. [Link]
  • The American Conference Institute (ACI) will hold a Hatch-Waxman Boot Camp July 18-19 in San Diego. ACI’s Hatch-Waxman Boot Camp has been designed to give counsel and advisors to brand name and generic drug critical insights into commercialization and the pre-approval process, and also provide an in-depth review of Hatch-Waxman and other IP basics relative to small molecules and biologics. [Link]
  • American University Washington College of Law will host the first annual Global Congress on Public Interest Intellectual Property August 25-27 in Washington DC. The Global Congress on Public Interest Intellectual Property will serve as a site for the sharing of research, ideas and policy proposals for how international intellectual property law should be constructed to better protect the full range of global public interest concerns. [Link]

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

 

Global-Tech v. SEB: Supreme Court Affirms CAFC Result But Not “Deliberate Indifference” Standard

Patent,

By Jason Rantanen

Global-Tech Appliances, inc. v. SEB S.A. (2011)  Download Global-Tech v SEB
Majority: Alito (author), Roberts, C.J., Scalia, Thomas, Ginsburg, Breyer, Sotomayor, Kagan.  Dissent: Kennedy.

In an 8-1 decision this morning, the Supreme Court affirmed the result in Global-Tech v. SEB, holding that while inducement of infringement of infringement requires knowledge that the induced conduct itself infringes, that knowledge element can be met by a showing of "willful blindness."  In reaching this conclusion, the Court rejected the Federal Circuit's adoption of a "deliberate indifference" standard.  By endorsing a "willful blindness" approach to knowledge – which Justice Kennedy's dissent indicates is a novel move – this opinion may have profound implications well beyond the area of intellectual property law.

Inducement of Infringement Requires Knowledge That the Induced Acts Constitute Patent Infringement
The Court first held that, like contributory infringement, inducement of infringement requires that the accused inducer know that the third party's conduct constitutes an infringement.  This is separate from any intent required to produce the acts themselves (i.e.: making, using, offering to sell, selling, or importing of a patented invention).  After recognizing that there are two conflicting interpretations of 35 U.S.C. § 271(b), the court looked to inducement's common origin with contributory infringement (which the Court in Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U. S. 476 (Aro II) held required knowledge of infringement) and concluded that the same knowledge requirement applies to inducement:

Based on this premise [that contributory infringement requires knowledge of infringement], it follows that the same knowledge is needed for induced infringement under §271(b). As noted, the two provisions have a common origin in the pre-1952 understanding of contributory infringement, and the language of the two provisions creates the same difficult interpretive choice. It would thus be strange to hold that knowledge of the relevant patent is needed under §271(c) but not under §271(b).

Knowledge Requirement Satisfied by Willful Blindness
Turning to the question directly presented by the case, the Court further held that while deliberate indifference does not satisfy the knowledge required for § 271(b), willful blindness does.  In reaching this conclusion, the Court looked to criminal law, which holds that defendants cannot escape the reach of the law by deliberately shielding themselves from clear evidence of critical facts that are strongly suggested by the circumstances.

Willful blindness exists when two requirements are met.  First, "the defendant must subjectively believe that there is a high probabilty that a fact exists."  Slip Op. at 13.  Second, "the defendant must take deliberate actions to avoid learning of that fact."  Id.  According to the Court, "[t]hese requirements give willful blindness an appropriately limited scope that surpasses recklessness and negligence."  Slip Op. at 14.  Furthermore, "[u]nder this formulation, a willfully blind defendant is one who takes deliberate actions to avoid confirming a high probability of wrongdoing and who can almost be said to have actually known the critical facts."  Id.  "By contrast, a reckless defendant is one who merely knows of a substantial and unjustified risk of such wrongdoing, see ALI, Model Penal Code §2.02(2)(c) (1985), and a negligent defendant is one who should have known of a similar risk but, in fact, did not, see §2.02(2)(d)."

While this was not the test applied by the Federal Circuit, the Court concluded that the evidence, when considered under the appropriate standard of review, met its willful blindness standard.  In reaching this conclusion, the Court looked to the Pentalpha's decision to copy all but the cosmetic features of SEB's fryer; its decision to copy an overseas model of SEB's fryer, and its decision not to inform its attorny that the product "was simply a knockoff of SEB's fryer." 

Justice Kennedy: Inducement Should Require Actual Knowledge
Writing in dissent, Justice Kennedy would have held that willful blindness is insufficient to satisfy the knowledge requirement of inducement.  "Willful blindness is not knowledge; and judges should not broaden a legislative proscription by analogy."  Kennedy Dissent at 1.  In particular, the Justice disagreed that the Court had a long precedent of invoking the doctrine of willful blindness as constituting knowledge in the criminal context.  "[T]his Court has never before held that willful blindness can substitute for a statutory requirement of knowledge."  Dissent at 3.

Following from this, Justice Kennedy warns of the enormous ramifications Global-Tech may have:

The Court appears to endorse the willful blindness doctrine here for all federal criminal cases involving knowledge. It does so in a civil case where it has received no briefing or argument from the criminal defense bar, which might have provided important counsel on this difficult issue.

There is no need to invoke willful blindness for the first time in this case. Facts that support willful blindness are like these tend to be the only available evidence in any event, for the jury lacks direct access to the defendant’smind. The jury must often infer knowledge from conduct,and attempts to eliminate evidence of knowledge may justify such inference, as where an accused inducer avoids further confirming what he already believes with good reason to be true. The majority’s decision to expand the statute’s scope appears to depend on the unstated premisethat knowledge requires certainty, but the law often permits probabilistic judgments to count as knowledge.

Dissent at 3-4.

Patently-O Bits & Bytes by Lawrence Higgins

Patent

Pro Bono Patents!

  • Members of the Twin Cities legal community are launching a pilot program to provide pro bono legal services to low-income, independent inventors. One of the programs goals is to put a dent in the USPTO’s backlog of patent applications, by increasing the efficiency of the applications submitted by independent inventors. This Pro Bono program is encouraged by the USPTO and the program’s success may help spark innovation across the nation. [Link]

Should Disney be allowed to trademark "SEAL TEAM 6"?

  • The Navy is challenging Disney’s attempt to trademark the name of the elite squad that took out Bin Laden. On May 3rd Disney filed the mark "SEAL TEAM 6" for various goods and services. [Link] [Link] [Link] However, it looks like the Navy did not like Disney trying to profit off of their work, so the Navy filed for the mark "SEAL TEAM" on May 13th. [Link] It looks like the Navy is trying to create a likelihood of confusion with the mark "SEAL TEAM", so that the USPTO will not issue the mark to Disney under 15 USC 1052(d). [Link]

Groklaw new editor will be Mark Webbink

  • Pamela Jones (PJ) the editor of Groklaw announced in early April that she was not going to write any more articles for Groklaw. However, PJ was bombarded with messages asking to keep the website going, so she asked Mark Webbink to become the new editor. Mark Webbink accepted the proposal and is officially the new writer of Groklaw. Mark is a visiting professor at New York Law School where he runs the Center for Patent Innovations, oversees the Peer To Patent project, and is a senior lecturing fellow at Duke University School of Law where he teaches intellectual property courses. [Link]

Inventor of the Year Award

  • IPO Education Foundation is seeking nominations for its 38th National Inventor of the Year Award. The award presents an opportunity for nominators to obtain major recognition for a deserving employee, client, or colleague as one of America's most outstanding inventors. Nominators could get recognition for themselves and their firm. The deadline for nominations is June 1. [Link]

Patent Jobs:

  • O’Shea Getz is seeking a patent attorney with at least 4 years of experience to work in their Springfield, MA office. [Link]
  • Klarquist Sparkman is looking for an IP litigation associate with 1-2 years of experience to work in their Portland office. [Link]
  • Laird Technologies is searching for an IP manager with 3 years of patent prosecution experience to work at their Chesterfield, MO location. [Link]
  • Ballard Spahr is seeking an IP litigation associate with 3-5 years of experience to work in their Philadelphia office. [Link]

Upcoming Events:

  • The Berkeley Center for Law & Technology (BCLT) and the USPTO are co-hosting a conference on the interface between the PTO and the District Courts on June 7th in Berkeley, California. The keynote address will be delivered by Teresa Stanek Rae. Guest speakers include Robert Bahr, Elaine Gin, and Stuart Graham. [Link]
  • AIPLA’s Chemical Patent Practice Road Show: Prosecution and Litigation Strategies will be held in Chicago on June 23rd. This seminar will cover advanced issues relating to chemical patent prosecution and litigation. Guest Speakers include Sharon Barner, Bradley Crawford (from MBHB), Whitney Remily, Michael Tierney, and Alexander Wilson. [Link]
  • The National Association of Patent Practitioners (NAPP) will hold their 2011 Annual Meeting and Nuts & Bolts Short Course at the Venetian Palazzo Hotel in Las Vegas, Nevada on July 16-19, 2011. [Link]

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

Arris Group v. BT: Vendors and DJ Standing

Patent

By Jason Rantanen

Arris Group, Inc. v. British Telecommunications PLC (Fed. Cir. 2011) Download 10-1292
Panel: Rader, Newman, Dyk (author)

Arris Group manufactures cable telephony and data products for cable system operators, such as its customer Cable One, to use in Voice over Internet Protecol (VoIP) telephone services.  In 2007, British Telecommunications (BT) sent a letter to Cable One accusing it of infringing various system and method patents held by BT and requesting that the parties begin licensing negotiations.  During those negotiations, BT provided Cable One with a 118-page presentation showing how selected claim elements were met by Cable One's services.  That presentation identified Arris's products as embodying numerous elements and performing numerous method steps of the asserted claims; however, the presentation did not assert that Arris directly or indirectly infringed BT's patents.  Nearly two years of negotiations (which were expanded to include Arris) followed, but no license agreement was consummated. 

In 2009, Arris filed a declaratory judgment action seeking a declaration that it does not infringe the BT patents and that the patents are invalid, as well as an injunction preventing BT from instituting infringement proceedings against Arris or its customers.  The district court dismissed the action for lack of subject matter jurisdiction, finding that there was no case or controversy between the parties.  Arris appealed.

An Economic Injury is Insufficient to Establish a Case or Controversy
The CAFC first rejected Arris's contention that there is an Article III case or controversy simply because Arris has suffered an economic injury as a result of BT's infringement threats.  "[I]n patent cases before the Supreme Court's decision in MedImmune, the regional circuits and our court held that economic injury is not alone sufficient to confer standing.  MedImmune did not abandon this rule."  Slip Op. at 8-9.  Rather, there must be an "adverse legal interest," which "requires a dispute as to a legal right – for example, an underlying legal cause of action that the declaratory defendant could have brought or threatened to bring."  Slip Op. at 9 (emphasis added). 

But an Implicit Contributory Infringement Threat is Sufficient
The CAFC did conclude, however, that a case or controversy existed based on BT's implicit assertion that Arris was contributing to the infringement of BT's patents.  "When the holder of a patent with system claims accuses a customer of direct infringement based on the customer's making, using, or selling of an allegedly infringing system in which a supplier's product functions as a material component, there may be an implicit assertion that the supplier has indirectly infringed the patent."  Slip Op. at 11.  Here, the court found that BT's assertion of direct infringement against Cable One, which "made it clear that Cable One's use of Arris's CMTSs and E-MTAs was central to BT's infringement contentions," Slip Op. at 14, established an Article III case or controversy regarding whether Arris was contributorily infringing BT's patent.

The "central" nature of Arris's products, itself not an element of contributory infringement, nevertheless drove the court's conclusion.  Although the court did step through the various elements of contributory infringement, it did so in only a single paragraph, and even that analysis relied heavily on the significant degree to which BT's infringement presentation to Cable One focused on Arris's products.  See Slip Op. at 16-17.  The court also found the inclusion of Arris in BT's licensing and infringement negotiations to be a relevant factor.  Thus, while a discussion of the actual elements of contributory infringement will doubtless be important to future declaratory plaintiffs relying on an indirect infringement theory, the actual outcome may be driven more by the underlying relationship between the patent holder and its infringement allegations to the declaratory plaintiff than by a formal analysis of contributory infringement.

In re Brimonidine Patent Litigation: Reviewing Nonobviousness Determinations

Patent

By Jason Rantanen

In re Brimonidine Patent Litigation (Fed. Cir. 2011) Download 10-1102-1103
Panel: Bryson (author), Dyk (dissenting in part), Prost

Appellate review of obviousness assessments is highly fact-intensive.  Although there are several viable legal approaches that can be applied, from the Graham framework to the "obvious to try" analysis, the Federal Circuit's review of this issue largely boils down to an evaluation of the district court's express or implied factual determinations.  The CAFC's recent opinion in the Brimonidine patent litigation is no exception, and it highlights the degree to which Federal Circuit judges are willing to dig into the factual record to serve as the ultimate arbiters of obviousness.

Background
In the mid-1990's, Allergan introduced ALPHAGAN, an optically administered solution containing 0.2% brimonidine, a drug that reduces an eye problem associated with glaucoma.  An allergic reaction to  brimoninidine among some patients led to the introduction of ALPHAGAN P, a formulation with a lower concentration of brimonidine, higher pH, and solubility-enhancing component.  ALPHAGAN P also uses stabilized chlorine dioxide (SCD) as a preservative instead of benzalkonium chloride, which was known to be an eye irritant.  Although the formulators initially expressed concern that the SCD would oxidize brimonidine, they later found the two were compatible.

Following Apotex and Exela's submission of Abbreviated New Drug Applications seeking permission to market a generic version of ALPHAGAN P, Allergan sued them for infringement of five patents under 35 U.S.C. § 271(e)(2): Patent No. 5,024,078, covering a buffered, aqueous ophthalmic solution generally, and four patents (referred to as the "related patents") more specific to its brominidine-containing product.  The district court found all the patents nonobvious following a bench trial and Apotex stipulated to infringement.  The district subsequently found that Exela infringed one of the related patents and entered an injunction against both defendants.

Buffered Solution Patent: Obvious
The panel first addressed Apotex's challenge to the district court's nonobviousness ruling on the '078 patent.  After analyzing the content of the two prior art patents cited by Apotex, the panel unanimously concluded that the district court was wrong.  "Based on the evidence presented at trial, we are convinced that it would have been obvious to one of skilled in the art to adjust the SCD solution disclosed in Ratcliff to approximate physiologic pH, to include a buffer component to maintain that pH, and to include a tonicity component to approximate physiologic osmoloality."  Slip Op. at 8.  Although a re-evaluation of the evidence is inherent in the panel's analysis, the opinion frames the court's conclusion as one of law: "We therefore hold that the district court committed legal error in concluding that it would not have been obvious to one skilled in the art."  Slip Op. at 9.

"Related" Patents: Nonobvious
The majority reached a different result on the four "related patents," concluding that the district court correctly found the narrowest claims to be nonobvious.  Here, too, the panel engaged in a detailed analysis of the factual determinations made by the district court.  With respect to the "related patents," however, Judges Bryson and Prost agreed that the district court had reached the correct conclusions, giving particular deference to the district judge's weighting of the testimony.  The opposite conclusion was reached by Judge Dyk, who dug deeply into the factual record before concluding that the district court had clearly erred.

Reviewing Prior Art Patents vs Other Evidence of Obviousness
Although neither the majority nor dissent explicitly discussed the standard of review, the different ways in which the court handled the two groups of patents perhaps hints at the manner in which the Federal Circuit reviews obviousness determinations.  The prior art asserted against the '078 patent consisted of two earlier patents.  Although likely not intended by the panel, the opinion's discussion of the '078 patent reads like a de novo review.  The analysis of the "related patents" differs significantly.  Here, the majority explicitly defers to the district court's factual findings in places, while the dissent concludes that the district court made "clearly erroneous findings of fact," Dissent at 3, implicitly referencing the standard of review.  Although somewhat of a subjective assessment, it certainly seems plausible that the CAFC may be much more willing to engage in de novo review on the question of obviousness when the prior art consists of patents as opposed to other forms of evidence

Exela's Noninfringement Appeal
The panel also reversed the district court's determination that Exela's product would infringe one of Allergan's patents.  This section of the opinion is largely noteworthy for its discussion of the effects of statements made in ANDAs and the extent to which companies are bound by those statements.  The CAFC concluded that the statement in Exela's ANDA that its product would be manufactured with a pH of between 6.5 and 6.7 (the claims required a minimum pH of 7.0) overrode Allergan's argument that Exela might produce its product with a higher pH to account for a fall in the pH that occurs over time.  "Here, neither party disputes that if Exela complies with its ANDA, it will never manufacture or sell a product at a pH above 6.7.  We cannot assume that Exela will not act in full compliance with its representations to the FDA, and we accordingly reverse the district court's judgment [of infringement]."  Slip Op. at 22. 

The Rambus Opinions: CAFC rules on the “reasonable forseeability” of litigation

Patent,

By Jason Rantanen

Micron Technology, Inc. v. Rambus Inc. (Fed. Cir. 2011) Download 09-1263
Hynix Semiconductor Inc. v. Rambus Inc. (Fed. Cir. 2011) Download 09-1299-1347
Panel: Newman (concurring and dissenting in part on Hynix), Lourie, Bryson, Gajarsa (concurring and dissenting in part on Micron and Hynix), and Linn (author of both Micron and Hynix)

Rambus is a company founded to commercialize inventions related to DRAM computer memory, including its RDRAM product.  It is currently engaged in several patent suits against manufacturers of SDRAM, an alternate type of memory technology.  Central to these cases is the issue of whether Rambus's destruction of documents – particularly a "shred day" during which thousands of pounds of documents were destroyed – prior to the commencement of the litigation constituted spoliation.  Given this case's discussion of document retention obligations, it has particular relevance for in-house counsel and outside counsel advising companies prior to the commencement of litigation.  Irrespective of the legal question discussed below, the specific factors discussed at pages 16-23 of Micron are worth reading.

Procedural Posture
Although addressing the same fundamental issue, Micron and Hynix arrived at the court in diametrically opposed postures.  In the district court proceedings on appeal in Hynix, Judge Whyte of the Northern District of California concluded that no spoliation occurred, while in the proceedings leading to Micron, Judge Robinson of the District of Delaware ruled that Rambus had engaged in spoliation and entered judgment in Micron's favor as a sanction.

Litigation Must Be Reasonably Forseeable
The resolution of the two appeals turned on the issue of when litigation became "reasonably forseeable," thus triggering Rambus's duty to preserve evidence.  Rambus argued that "to be reasonably forseeable, the litigation must be imminent, at least in the sense that it is probable and free of significant contingencies."  Micron and Hynix, on the other hand, aruged that reasonable forseeability incorporates no requirement of imminence. 

The five-judge panel unanimously concluded that the "reasonably forseeable" standard does not carry an imminence requirement.  While "[t]his standard does not trigger the duty to preserve documents from the mere existence of a potential claim or the distant possibility of litigation…it is not so inflexible as to require that litigation be imminent, or probable without significant contingencies,' as Rambus suggests."  Micron Slip Op. at 12-13. 

Applying this standard, the CAFC determined that the Micron district court had not clearly erred when it concluded that litigation was reasonably foreseeable prior to the critical 'shred day.'  In particular, the CAFC noted that (1) Rambus's document retention policy was not adopted for purposes of business management, but instead to further Rambus's litigation strategy; (2) Rambus was on notice of potentially infringing activities by particular manufacturers; (3) Rambus took several steps in furtherance of litigation prior to the key shredding party; (4) Rambus is the plaintiff-patentee [but see note below], and its decision whether to litigate or not was the determining factor in whether or not litigation would ensue; and (5) the relationship between Rambus and the DRAM manufacturers was not one of mutual benefit that subsequently turned sour, but rather was naturally adversarial. 

Arriving at a consistent outcome in Hynix, three of the five judges (Lourie, Byrson, and Linn) concluded that Judge Whyte erred in determining that litigation was not reasonably forseeable by inappropriately applying the stricter "imminent, or probable without significant contingencies" requirement for reasonable foreseeability.  "In Micron II, this court held that that standard does not carrry a gloss requiring that litigation be "imminent, or probable without significant contingencies….The district court here applied just such a standard. This is evident for three reasons." Hynix Slip Op. at 13 (internal citation omitted).

Yet although the reversal is clear, the majority's reasoning for its conclusion is not.  The majority first held that the district court erred not by considering the presence of contingencies at all, as one might expect given its preceding statement, but by failing to decide "that the resolution of these contingencies was reasonably foreseeable."  Id. at 14.  The majority's reason thus implicitly assumes that contingencies are, in fact, relevant to the foreseeability inquiry.  The second and third reasons – that the evidence of non-foreseeability was insufficient and the Hynix district court was the only court out of four to conclude that litigation was not reasonably foreseeable as of the critical date – similarly have little to do with whether the Hynix district court applied the correct legal standard.  The majority's actual analysis thus seems at odds with its statement that the foreseeability standard does not include a 'probable without significant contingencies' requirement given that its only relevant basis for reversal applies exactly such an analytical framework.  It is further puzzling because it involves an assessment of purely factual issues, not legal standards, to which it applies a de novo standard of review.

The Dissent
Writing in dissent in Hynix, Judge Gajarsa joined by Judge Newman takes the majority to task for its overriding drive to arrive at a consistent result in Hynix and Micron, a drive that in their view produced an erroneous result:

Seizing on the district court’s alleged grafting of an overly strict “gloss” on the reasonably foreseeable litigation standard, the majority claims that the district court erred as a matter of law by applying the wrong standard for spoliation. In so doing, the majority ignores the district court’s well-articulated understanding of the relevant Ninth Circuit law and its factual findings, which demonstrate that the district court applied the very standard that the majority now requires. The majority obtenebrates the facts presented in the district court’s opinion to resolve the conflict between the spoliation determinations in this case and in Micron.

Hynix dissent at 2.  In particular, the dissent criticizes what it perceives to be the majority's attempt to cloak its review of a factual determination as a legal issue in order to avoid applying a deferential standard of review, thus leading to an inconsistent result:

The majority created this standard in Micron with the intention of reconciling the district court’s spoliation determination in that case with the present one. The desires of an appellate tribunal, however, should not drive the outcome of decisions. Divergent district court opinions do not necessarily mean that the trial courts applied different “glosses” on a particular standard. Rather, this court must review district court opinions with the applicable standard of appellate review, which, in this case, is clear error or an abuse of discretion. In refusing to do so, the majority shirks its duties and performs its own factual analysis. The majority castigates the district court here for using a narrower “gloss” on the standard for spoliation just as the majority in Micron castigates the district court for holding the asserted patents unenforceable as a sanction for spoliation.

Id. at 3.

A Meaningless Remand?
Although affirming the Micron district court's conclusion that litigation was reasonably foreseeable, the majority nevertheless vacated the district court's sanction determination.  This move is unlikely to produce in any meaningful change.  The majority's basis for the remand was that the Micron district court opinion failed to provide sufficient detail or analysis in support of its conclusion that Rambus acted in bad faith, that Micron suffered prejudice, or that judgment in Micron's favor was the appropriate sanction to impose.  Given Judge Robinson's prior opinion, however, the inevitable result will be a more detailed opinion that reaches precisely the same conclusion on these issues. 

Judge Gajarsa dissented from this determination as well, again criticizing the majority for reviewing the facts and weighing the evidence "before it substitutes its judgment for that of the district court, deciding that based on the district court's thorough factual analysis, it would not have granted the dispositve sanctions."  Micron dissent at 2.

Note on consistency: In concluding that the Micron district court correctly concluded that litigation was reasonably foreseeable, the CAFC relied on the fact that Rambus was the plaintiff-patentee (and thus controlled the initiation of the litigation). Micron Slip Op. at 22.  Yet both the caption and the opinion's procedural background indicate that Rambus did not initate the lawsuits; rather they were declaratory judgment actions brought by Micron and Hynix. 

Disclosure: Although I had minimal exposure to the Rambus litigations while an attorney with Munger, Tolles, & Olson, note that my former employer did and continues to represent Rambus.