Scholarship Roundup: A Guide to the Legislative History of the America Invents Act

June 21, 2012PatentpaidJason Rantanen

By Jason Rantanen

One of the challenges of working with the Leahy-Smith America Invents Act stems from its legislative history, which is scattered through more than five years of Congressional materials. To address this challenge, Joe Matal, Judiciary Committee Counsel to Senator Jon Kyl, recently published a comprehensive guide to the legislative history of the AIA in the Federal Circuit Bar Journal. Matal's compendium provides both a history of the Congressional discussion leading up to the AIA as well as a roadmap to the relevant legislative materials, linking them to particular provisions of the AIA and explaining how to locate each source. Part I addresses the portions of the AIA that relate to applications before a patent issues, while Part II deals with the portions that apply after a patent is granted. I highly recommend both to anyone who is analyzing or providing legal advice on the AIA.

A copy of Matal's article is available via SSRN:

Thanks to Professor Colleen Chien for bringing Matal's article to my attention.

Selling Patents

June 21, 2012Patentobviousness, paid, VenueDennis Crouch

InterDigital just sold 1,700 worldwide patents and pending applications to Intel for $375 million in cash – boosting Intel’s mobile circuitry patent portfolio. InterDigital was able to transform a substantial number of its fairly non-liquid assets (patents) into cash. On the purchase, InterDigital’s stock price immediately jumped about 28%. The price change represents an increase of Company valuation of around $260 million. One way to look at this price jump is as a reflection in the ongoing difficulty in monetizing patent rights. Before the deal, investors seemingly valued the patents at only 1/3 of their eventual cash value — largely because it would have been much too speculative to predict that the patents could actually be sold for the price asked.

The chart above shows InterDigital’s stock price jump immediately following the deal’s announcement. The chart below looks at InterDigital stock prices for the past six months. The sale date and price jump is seen at the far right. As is obvious, the sale does not make-up for the huge loss in valuation that the company has seen over the past few months.

Although every story is unique, it is reflective upon a fact that business leaders know — although patents are valuable and useful assets, it is exceedingly difficult to rely on patents as a company’s primary revenue source. Kodak knows this well. The company is in bankruptcy and is in the process of selling its final few assets — mainly intellectual property rights that it could not previously fully monetize during.

Selling Patents

June 21, 2012Patentobviousness, paid, VenueJonathan Hummel

Enhanced Damages: The Seagate Objectively Reckless Standard is Now a Question of Law to be Decided by a Judge and Reviewed De Novo on Appeal

June 18, 2012PatentClaim Construction, Damages, Federal Circuit En Banc, First to Invent, paidDennis Crouch

By Dennis Crouch

Bard Peripheral v. W.L.Gore (Fed. Cir. 2012) (on rehearing)

In an important decision, the Federal Circuit has ruled that the “objective prong” of the test for willful patent infringement is a separate question of law. Moving forward, it will be the trial court’s duty to determine whether the defendant’s actions were objectively reckless. Further, the objective prong will now be subject to de novo review on appeal.

This new system somewhat parallels the judge-determined claim construction that must occur before a jury can determine infringement. As with claim construction, this new judge-focused sub-test will likely drive results in most cases. Because it will be prior-in-time, the judicial decision on objective recklessness will filter-out many willfulness allegations before they reach the jury. And the jury, once it is told that the judge has determined the behavior objectively reckless, is likely to find any infringed patent to be willfully infringed.

Right to Jury: The right to a jury decision on the issue of willfulness already stood on shaky foundation because, by statute, the judge decides the monetary award. The changes in the law brought about here in Bard coupled with those outlined in Seagate suggest that right may now be fully eroded. Further, the decision suggests that it may be proper to treat the entire issue of willfulness as a question of law.

+ + + + +

Treble Damages: The text of the Patent Act appears to provide courts with broad power to treble any damages awarded. The statute reads that “the court may increase the damages up to three times the amount found or assessed.” Although the text offers no limitation on that power, the Federal Circuit has limited the use of enhanced damages to only apply when the adjudged infringement is found to be willful. In Seagate, the Federal Circuit defined a two-prong test for willfulness that requires clear and convincing evidence (1) “that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent” and (2) that the infringer had knowledge (or should have known) of this risk.

Willfulness is a question of fact that has been traditionally decided by a jury. However, as the statute suggests, it is the judge who determines the extent of any enhanced damages (with the limit of three-times the compensatory damage award). Here, the infringer argued that a court (rather than a jury) should first decide the sub-question of whether there existed (at the time of the infringement) an objectively high-likelihood that the infringer’s action’s constituted infringement. The appellate court agreed:

After reviewing the Supreme Court’s precedent in similar contexts, as well as our own, we conclude that simply stating that willfulness is a question of fact over-simplifies the issue. While the ultimate question of willfulness based on an assessment of the second prong of Seagate may be a question of fact, Seagate also requires a threshold determination of objective recklessness. That determination entails an objective assessment of potential defenses based on the risk presented by the patent. Those defenses may include questions of infringement but also can be expected in almost every case to entail questions of validity that are not necessarily dependent on the factual circumstances of the particular party accused of infringement.

In considering the standard applicable to the objective prong of Seagate, it can be appreciated that “the decision to label an issue a ‘question of law,’ a ‘question of fact,’ or a ‘mixed question of law and fact’ is sometimes as much a matter of allocation as it is of analysis.” Miller v. Fenton, 474 U.S. 104, 113-14 (1985). When an “issue falls some-where between a pristine legal standard and a simple historical fact, the fact/law distinction at times has turned on a determination that, as a matter of sound administration of justice, one judicial actor is better positioned than another to decide the issue in question.” Id. at 114; see also Markman v. Westview Instruments, Inc., 517 U.S. 370, 388 (1996) (applying this test to determine that claim construction is best left to the judge). We believe that the court is in the best position for making the determination of reasonableness. This court therefore holds that the objective determination of recklessness, even though predicated on underlying mixed questions of law and fact, is best decided by the judge as a question of law subject to de novo review.

On remand, the district court will be required to specifically consider the question of objective recklessness.

+ + + + +

Clear and Convincing Evidence Standard for a Question of Law?: Seagate requires that objective recklessness be proven with clear and convincing evidence. As the en banc court wrote in 2007 “to establish willful infringement, a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.” Normally, clear-and-convincing evidence is a standard for proving facts. Here in Bard, however, the court now holds that the objective recklessness prong is a question of law. Since the panel here has no power to modify Seagate, the odd joining of these decisions is that the issue of law must still be proven by clear and convincing evidence. In a concurring opinion to the i4i decision, Supreme Court Justice Breyer wrote on this topic – noting that the clear and convincing evidence standard of proof “applies to questions of fact and not to questions of law.” The panel opinion here in Bard either did not recognize this problem or chose to ignore it. The tension here between Seagate and Bard is genuine.

+ + + + +

The majority opinion was written Judge Gajarsa (Senior Judge) and joined by Judge Linn. Judge Newman wrote in dissent and argued that there was no need for a remand because the jury willfulness determination was clearly wrong.

+ + + + +

This case has been brewing for 38 years! Initially it was an inventorship dispute that took 28 years to settle at the PTO, followed by a litigation battle for the past 8 years. The patent covers a prosthetic vascular graft used in bypass surgeries and was originally filed as an application in 1974. U.S. Patent No. 6,436,135.

Life of a Patent Attorney

June 15, 2012PatentpaidDennis Crouch

Used with permission from David Malki ! at WONDERMARK

Predicting En Banc Issues

June 13, 2012PatentClaim Construction, Federal Circuit En Banc, Inequitable Conduct, obviousness, paid, USPTO DirectorJason Rantanen

By Jason Rantanen

Dissenting opinions are generally considered to be good predictors of en banc review. On one level, this is largely indisputable: most appeals that the Federal Circuit takes en banc involve a divided panel decision, and appellate practitioners are well aware that the chances of getting en banc review of an opinion that contains a dissent are much better than persuading the full court to review a unanimous opinion. Of course, knowing that dissenting opinions are the more likely candidates for en banc review isn't particularly helpful by itself, since Federal Circuit judges pen more than thirty patent-related dissents each year.

There's an extension of this theory, however, based on the idea that a high number of dissents on a particular patent law issue is a signal that the court may take that issue en banc in the near future. There are several reasons why this extended theory is plausible: dissents may indicate that the court is cognizant of the importance of a particular legal issue; they may demonstrate awareness by the court of an intra-circuit split that it needs to resolve; they may also represent a pre-en banc dialogue between the judges. Dissents are not costless, after all – sometimes they can be as much work or more as writing the majority opinion, and most judges do not write them as a matter of course.

Empirical observations support this theory, at least for some grants of en banc review. In the two years prior to the Federal Circuit's grant of en banc review of inequitable conduct in Therasense v. Becton Dickinson, for example, there were four dissents on the issue of inequitable conduct. On the other hand, in the two years prior to the grant of en banc review in In re Seagate there were no dissenting opinions on the issue of willful infringement. Thus while there may be value in keeping an eye on areas where dissents are common, it's by no means a perfect predictor.

With that caveat, I read through the patent-related dissents for the past two years to assemble a picture of recent Federal Circuit dissents. All together, there were 64 of these dissents in panel opinions. The following chart depicts the authors of those dissents.

The next chart depicts the issues addressed by those dissents that arose with a frequency of greater than 1. Note that there were four dissents that involved two issues. In order to prepare the chart below based on dissenting opinions, I included only the first issue, but the second issue would also be relevant. Those second issues were joint infringement(1), infringement(3), inequitable conduct(2), and doctrine of equivalents(2) (totals dissents addressing this issue in parentheses).

One nuance that is not conveyed by this chart is the degree to which the judges dissent on specific issues. Two are noteworthy: Judge Dyk wrote four of the dissents on claim construction, while four separate judges (Bryson, Moore, Plager and Mayer) wrote the dissents on the issue of subject matter patentability. Judge Newman wrote on a variety of issues.

The final chart depicts the issues that the Federal Circuit declined to consider en banc with at least one judge dissenting from that decision. Note that for several of the issues included in the previous chart (state law malpractice claims, assignment, claim construction, and preliminary injunctions), the court has also declined to consider those issues en banc over the views of at least one judge.

These statistics hardly tell the whole story, of course. Both litigation and appeals – let alone en banc review – are rare events, and thus attempting to divine highly predictive information is difficult. Furthermore, two judges (Judges Newman and Dyk) together wrote almost half of the dissents. Nevertheless, when combined with other insights, the above data may be helpful. Claim construction and obviousness are hot topics (although last fall the CAFC declined to take claim construction en banc). There is also significant disagreement among the judges on subject matter patentability, although they may not be willing address that issue through an en banc court given the Supreme Court's substantial interest in the topic. In addition, my own sense is that there is more disagreement among the judges on the issue of the standard for preliminary injunctions than is apparent from the statistics alone. It would not surprise me if the court were to grant en banc review on this issue – although admittedly it declined to do so recently.

What are your views on the next issue that the Federal Circuit reviews en banc?

For more on predicting en banc review generally, see Tracey E. George, The Dynamics and Determinants of the Decision to Grant En Banc Review, 74 Wash. L. Rev. 213 (1999). For a discussion of Federal Circuit en banc practice, see Christopher A. Cotropia, Determining Uniformity within the Federal Circuit by Measuring Dissent and En Banc Review, 73 Loyola Los Angeles L. Rev. 801 (2010) (available at http://digitalcommons.lmu.edu/cgi/viewcontent.cgi?article=2720&context=llr).

Edit: minor correction to charts.

Judge Posner: No Damages Despite Infringement

June 12, 2012PatentDamages, paidDennis Crouch

by Dennis Crouch

Apple v. Motorola (N.D.Ill. 11–cv-8540) (Order by Judge Posner, June 2012)

Compensating for Harm: In most tort cases, the harm is easy to identify (if not prove). A negligent driving accident results in property damage. Tortious battery leads to medical bills. However, the non-rivalrous nature of intellectual property often makes the harm more difficult to ascertain. No one is directly injured per se when a third party begins to use an inventor's idea without authorization. Rather, the idea is still available and a third party's separate use of the invention does not prevent the inventor from continuing use the invention as well. Competitive injury sometimes comes into play. Of course, in most situations we don't think of competitive injury as an actionable harm, but rather classify it as beneficial competition – survival of the fittest. And, in most US patent lawsuits, the patented invention does not relate to any ongoing market competition between the parties. The legal harm does exist, but it comes from the statutory exclusive right that guarantees an exclusive entitlement to the patentee along the potential for injunctive relief and a reasonable royalty. Patentees expect to collect rents if others use their patented inventions. Litigation damages are those rents.

Judge Richard Posner is sitting by designation as a trial court judge in a pending infringement lawsuit between Apple and Motorola. (N.D.Ill. 11–cv-8540). Judge Posner's opinions are always interesting to read and this case is no exception. In a recent order, Judge Posner canceled the jury trial scheduled for this week and instead opined that the case is moot because there are no damages and therefore, “neither party can establish a right of relief.” In the order, Judge Posner indicated that a full opinion would be forthcoming, likely within the week.

The crux of the order is that, even if Apple's asserted patents are valid and infringed, Apple cannot prove any damages stemming from the infringement nor can it prove that the harm of ongoing infringement is sufficient to demand injunctive relief.

Damages not an Element: For some causes of action, harm is considered an element of the offense that must be proven before liability is found. Ordinary defamation requires harm. Likewise, murder requires a death. However, many other causes of action (including patent infringement) do not require a showing of harm for the substantive case. Rather, the the usual approach in patent cases is to first determine whether infringement has occurred (without regard to the damage caused) and then determine the appropriate damages. This approach is derived by the patent statute that defines infringement in 35 U.S.C. 271 without regard to damages. A separate provision (discussed below) then suggests a damage calculation method.

Patent Infringement but No Damages?: Section 284 of the Patent Act briefly defines the scope of damages available for infringement. The statute indicates that damages should be “adequate to compensate for the infringement but in no event no less than a reasonable royalty for the use made.” Many see the statute as offering a minimum statutory damage award of at least a reasonable royalty. In my view, one implication of the statute is that damages will never be properly calculated as zero. Rather, even a nominal infringement should result in at least a few pennies as the reasonable royalty.

Proving Damages: It is easy to reconcile my notion that infringement damages are always posigive with Judge Posner's conclusion that no damages exist in this case. The missing linkage is the procedural reality that it is the patentee's burden to prove damages. A planitiff that cannot prove damages should not expect a court to speculate on the proper award. Rather, without that proof, the proper award is zero (or perhaps a nominal award of $1). Here, because Apple's damages experts have either been rejected by the court or else have provided unbelievable reports, Apple's award will be zero.

Toshiba v. Imation: Claim Construction Three Ways

June 11, 2012PatentAffirmed Without Opinion, Claim Construction, paidJason Rantanen

By Jason Rantanen

Toshiba Corporation v. Imation Corp. (Fed. Cir. 2012) Download 11-1204
Panel: Moore (author), Schall, and Dyk (concurring-in-part and dissenting-in-part)

Dissents in Federal Circuit opinions dealing with claim construction often reflect disagreements over the correct methodology or execution. Judge Dyk's dissent in Toshiba goes a step further, proposing a claim construction different from those advanced by either side.

The technology in Toshiba involves DVDs. Toshiba's patent No. 5,831,966 claims a recording medium containing a "management region" that contains information about the structure of the medium – specifically, "number-of-recording planes identifying information that represents the number of recording planes of the recording medium." The district court construed this as "information whose purpose is to identify the number of recording planes on the recording medium." Slip Op. at 15 (emphasis in CAFC opinion). This "purpose" construction mattered because the patent holder accused single-sided DVDs of infringing the '966 patent. These single-sided DVDs contain information that identifies the number of planes on that side – effectively providing information on the disc as a whole. Because the purpose of the information on the single-sided DVDs is only to identify the planes on one side of the disc, however, the district court concluded that the accused discs do not infringe.

On appeal the majority disagreed with the district court's construction, agreeing with Toshiba that the limitation should be given its plain and ordinary meaning as recited in the claim itself. "The language of the claim only requires that the information "represents" the number of recording planes." Slip op. at 17. The majority declined to read the embodiments of the specification into the claims. "Absent disclaimer or lexicography, the plain meaning of the claim controls." Slip Op. at 19.

Judge Dyk, writing in dissent, saw the issue differently. In his view, the "number of recording planes" limitation requires the identification of both the number of disc sides and the number of layers per side, a construction neither party advanced. To support this construction, he took a stronger view of the effect of the specification and the prosecution history than the majority. In his opinion, "the specification and the prosecution history of the ’966 patent make clear that the central objective of the patent was to identify whether an optical disc was a one-sided disc or a two-sided disc." Slip Op. at 27. Given this construction, he would have affirmed the district court's grant of summary judgment of non-infringement.

Indirect Infringement: The district court granted summary judgment of no indirect infringement of a second patent, No. 5,892,751, based on the conclusion that recording a DVD without finalizing it (the step necessary to allow the DVD to be played on drives other than it was recorded) was a substantial noninfringing use. On appeal, the Federal Circuit affirmed in the context of contributory infringement but reversed for inducement of infringement. Here, Toshiba failed to present any evidence that the recording and playing of unfinalized DVDs – which does not infringe the '751 patent – is "unusual, far-etched, illusory, impractical, occasional, aberrant, or experimental." Slip Op. at 8 (quoting Vita-Mix, 581 F.3d 1317, 1327 (Fed. Cir. 2009). Furthermore, merely recommending an infringing use (finalizing the DVD) is not evidence that a non-infringing use is not a substantial use. The substantial noninfringing use thus supported the grant of summary judgment of no contributory infringement. However, the district court erred in holding that the existence of a such a use precludes a finding of inducement of infringement. Nor could summary judgment of no inducement be affirmed on the ground that the patentee did not provide evidence of specific acts of infringement: circumstantial evidence can suffice. Here, the circumstantial evidence was stronger than the "capable of infringing" evidence involved in Fujitsu v. Netgear, 620 F.3d 1321 (Fed. Cir. 2010) and ACCO Brands v. ABA Locks, 501 F.3d 1307 (Fed. Cir. 2007).

Pleading Requirements for Direct Infringement; Inducing Infringement; and Contributory Infringement

June 8, 2012PatentDamages, paidDennis Crouch

In re Bill of Lading, No. 2010-1493 (Fed. Cir. 2012)

by Dennis Crouch

In a split decision, the Federal Circuit has partially reversed a lower court’s dismissal for failure to state a claim. Writing for the majority, Judge O’Malley made an important doctrinal distinction between when an offer to sell constitutes direct infringement as compared with indirect infringement. The decision also highlights the tension between recent Supreme Court pleadings cases (Iqbal & Twombly) and the bare-bones form pleadings (Form 18) found in the Federal Rules. Here, the court held a complaint following the Form 18 necessarily satisfies the notice pleading requirements but that Form 18 does not apply to allegations of indirect infringement. The result of this case will likely be to further raise the pleading requirements for indirect infringement cases. Judge Newman dissented — arguing that a Form 18 complaint should normally be deemed insufficient to provide sufficient notice to alleged infringers.

+ + + + +

R+L Carriers is both the plaintiff and DJ defendant in a merged multi-party suit involving a host of alleged infringers. The lawsuit centers on R+L’s U.S. Patent No. 6,401,078. The patent is directed to a system for creating bill-of-lading for individual packages. Basically, the invention directs folks to scan documentation data that is on a package on-board a transporting vehicle; sending that scanned “image” to a remote processing center; and then preparing a loading manifest that directs folks what to do with the package next (such as load it on another vehicle).

Failure to State a Claim: The district court dismissed the lawsuit for failure to state a claim under Fed. R. Civ. Pro. R. 12(b)(6). Patent cases are begun with the filing of a complaint in federal court. Federal Courts follow a “notice pleading” standard that traditionally only requires a limited amount of information in the complaint itself. However, in a pair of recent cases, the Supreme Court raised the standard to require that plaintiffs recite sufficient facts in the complaint to make the case plausible. Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009). The “plausible” standard requires more than showing that liability is merely possible or conceivable. However, a “plausible” is not necessarily “probable.” Thus, Twombly and Iqbal raise the potential that the pleadings will better filter meritless cases. However, many losing cases will still survive motions on the pleadings.

Form 18 Complaint: Despite this seeming increased standard, the rules of civil procedure include a loophole through a standard patent complaint known as Form 18. Form 18 is a threadbare complaint and contains only five sentences that make-up the body of the complaint.

1. This action arises under a federal statute, <_____>.

2. On <Date>, United States Letters Patent No. <__________________> were issued to the plaintiff for an invention in an <Electric Motor>. The plaintiff owned the patent throughout the period of the defendant's infringing acts and still owns the patent.

3. The defendant has infringed and is still infringing the Letters Patent by making, selling, and using <Electric Motors> that embody the patented invention, and the defendant will continue to do so unless enjoined by this court.

4. [If Applicable] The plaintiff has complied with the statutory requirement of placing a notice of the Letters Patent on all electric motors it manufactures and sells and has given the defendant written notice of the infringement.

Therefore, the plaintiff demands: (a) a preliminary and final injunction against the continuing infringement; (b) an accounting for damages; and (c) interest and costs.

In Twombly, the Supreme Court recognized that there may be some conflict between the form complaints and the higher standards suggested by the Court. In those situations, the Court has been clear that the forms control. Thus, the Federal Circuit here held that pleadings fitting within Form 18 cannot be held insufficient to state a claim for patent infringement. In particular, the court noted that a plaintiff need not “plead facts establishing that each element of an asserted claim is met” or “even identify which claims it asserts are being infringed.”

Indirect Infringement Not Covered by Form 18*: When examining Form 18, the court made an important distinction between complaints for direct infringement and indirect infringement. Form 18 is focused on the actions of “making, selling, and using” the patented invention. These are forms of direct infringement. The Federal Circuit here held that the Form 18 only applies to allegations of direct infringement and not indirect infringement. And thus, indirect infringement must be pled in a way that meets the Twombly standard. One exception here is that the court noted that pleading indirect infringement does not require identifying specific customers who perform the underlying direct infringement as long as the facts pled allow an inference of underlying direct infringement. Note – the court did not specifically decide whether Form 18 is sufficient when the direct infringement is in some form other than making, selling, or using (such as offering for sale).

Contributory Infringement: Section 271(c) of the Patent Act creates contributory infringement liability for anyone who sells or offers to sell a component for use in practicing a patented process and that component is material to practicing the invention, has no substantial non-infringing uses, and is known by the party “to be especially made or especially adapted for use in an infringement of such patent.” 35 U.S.C. § 271(c). Here, R+L’s complaints failed to specifically allege that the accused components (scanning equipment) lacked substantial non-infringing uses. On appeal, the Federal Circuit held that the complaint must include that allegation. Thus, these claims were dismissed.

Inducing Infringement: Section 271(b) of the Patent Act creates liability for inducing infringement and includes a mens rea requirement that the alleged inducer have “knowledge that the induced acts constitute patent infringement.” Here, the R+L did plead those specific elements, but the district court dismissed the claim after finding the required inferences of knowledge to be “implausible and unreasonable.” On appeal, the Federal Circuit reversed that finding – holding that a plaintiff need not prove its case in the complaint and that at the pleading stage all reasonable inferences must be determined in favor of the non-moving party.”

Before turning to the individual amended complaints and the specific allegations therein, we note a flaw that pervades the district court’s assessment of R+L’s allegations of induced infringement—its failure to draw all reasonable inferences in favor of the non-moving party. Twombly did not alter this basic premise. Nothing in Twombly or its progeny allows a court to choose among competing inferences as long as there are sufficient facts alleged to render the non-movant’s asserted inferences plausible.

As an example, the complaint identified advertising from one of the defendants that suggested an infringing use and alleged that the advertisement was distributed after receiving a cease and decisit letter from the patentee. The Federal Circuit found that (and similar allegations against other defendants) to be sufficient under Twombly.

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The implication from this case is that Form 18 should be either (1) eliminated or (2) re-written. I suggest elimination. Patent litigators know how to draft a complaint and it is not very difficult to provide a sufficient level of detail and factual allegation in a complaint or counterclaim. For cases involving patents with excessive claims (25+) I would suggest that simply identifying the patent does not provide sufficient notice. Rather, the complaint should also identify the claims alleged to be infringed.

Survey Response: Does the Amendment Violate the Written Description Requirement?

June 7, 2012PatentBroadest Reasonable Interpretation, Claim Construction, paid, Written DescriptionDennis Crouch

by Dennis Crouch

In an earlier post, I mentioned recently issued U.S. Patent No. 8,196,213. During prosecution, the examiner rejected the pending claims as improperly claiming unpatentable subject matter under 35 U.S.C. 101. In particular, the PTO submitted that the claimed “computer readable storage medium” could encompass transitory signals, which are themselves unpatentable. In response, the applicant (Microsoft) amended the claims by adding an express limitation excluding “signals” from the claim scope. The amended claim begins: “1. A computer readable storage medium excluding signals . . . ” This change satisfied the PTO and the patent quickly issued. The original patent application document did not discuss signals or directly define computer readable media other than having the functional qualities of being able to “store data that is accessible by a computer.” However, the application did list several examples of computer readable media, including “magnetic cassettes, flash memory cards, digital video disks, Bernoulli cartridges, random access memories (RAMs), read only memories (ROMs) and the like.”

In a one-question survey, I asked Patently-O readers “does this patent claim violate the written description requirement?” As discussed below, most readers (~75%) agreed that amendment did not invalidate the claim.

Of the 850 responses, almost half (46%) suggested that the claim is valid because the amendment does not go beyond what was originally described in the specification. In its 2012 memo to examiners, the USPTO argued as much:

A claim drawn to such a computer readable medium that covers both transitory and non-transitory embodiments may be amended to narrow the claim to cover only statutory embodiments to avoid a rejection under 35 U.S.C. 101 by adding the limitation “non-transitory” to the claim. . . . Such an amendment would typically not raise the issue of new matter, even when the specification is silent because the broadest reasonable interpretation relies on the ordinary and customary meaning that includes signals per se. The limited situations in which such an amendment could raise issues of new matter occur, for example, when the specification does not support a non-transitory embodiment because a signal per se is the only viable embodiment such that the amended claim is impermissibly broadened beyond the supporting disclosure.

See 1351 Off. Gaz. Pat. Office 212 (Feb 23, 2012). I have some amount of difficulty understanding the explanation given by the PTO — that no new matter problem is created by the amendment “because the broadest reasonable interpretation relies on the ordinary and customary meaning that includes signals per se.” While the USPTO’s interpretation of the law is important during the prosecution process, no deference is given to this type of analysis when a court later considers a patent’s validity.

Another 22% also suggested that the claim is valid because “negative limitations such as this need not be disclosed in the original application.” And 4% argued that the limitation should be ignored because it is found in the claim preamble.

Only one option in the survey led directly to an invalidity conclusion. 26% of responses suggested that the claim limitation excluding signals from the scope was improper because that limitation was not disclosed in the original application and that the claim is therefore invalid under the written description requirement.

In my mind, this entire discussion is ridiculous. The invention in this case (as in several hundred thousand other cases) is a bit of software. Yet, because of these odd rules setup by the U.S. Supreme Court (and their interpretation by the PTO) applicants feel they cannot be straightforward enough to simply obtain a patent on the software.

*****

In the above discussion, I jump quickly between “new matter” and “written description” doctrines. During patent prosecution, the two doctrines are relatively inseparable. The PTO tends to issue new matter rejections under 35 U.S.C. 132. Once a patent issues, the facts that would have created a new matter rejection at the PTO lead courts to invalidate claims for failing the written description requirement of 35 U.S.C. 112.

Patently-O Bits & Bytes by Lawrence Higgins

June 6, 2012PatentClaim Construction, Inequitable Conduct, obviousness, paidLawrence Higgins

2012 Jefferson Medal recipient

The New Jersey Intellectual Property Law Association (NJIPLA) will award the 2012 Jefferson Medal to the Honorable Garrett E. Brown, Jr. (Ret.), Chief Judge, United States District Judge for the District of New Jersey. Following a 60 year tradition, the NJIPLA presents the Jefferson Medal annually to someone who has made exceptional contributions to the field of intellectual property law. Former Medalists include judges, members of Congress, Patent and Trademark Office officials and leaders of the intellectual property bar. Chief Judge Brown will be presented with the Jefferson Medal on June 8, 2012 at the annual Jefferson Medal Dinner at The Hilton at Short Hills, Short Hills, NJ.

Chief Judge Brown recently joined the JAMS panel after a distinguished judicial and legal career. He served twenty-six years as United States District Judge for the District of New Jersey, the last six as Chief Judge, where he led the court-wide effort to provide prompt, efficient justice to civil litigants, and to implement new local patent rules. Prior to appointment to the federal judiciary, he served two years as Chief Counsel to the U.S. Maritime Administration. While in private practice, he concentrated on federal commercial litigation, including antitrust, employment, construction, environmental, banking, intellectual property, and securities matters. [Link]

Will Singapore Become a Patent Hotspot?

Singapore wants foreign IP attorneys and professionals to relocate there. A Patents Bill was introduced to the parliament, which will allow foreign patent professionals to practice in Singapore without going through the long process of passing exams and doing an internship with a local law firm, which is currently required. However, foreign attorneys will only be allowed to engage in work from other countries. The intention behind the proposed changes is that highly skilled IP professionals from across Asia and beyond will relocate to Singapore, where they will be ideally located to handle patent work for the whole Asia region. [Link] Patent Act

Patent Jobs:

Faegre Baker Daniels is seeking a patent associate with 2-6 years of experience and a degree in EE, ME, or ChemE to work at their Minneapolis office. [Link]
Klarquist Sparkman is looking for a patent attorney/agent with an advanced degree in organic chemistry and 3+ years of experience to work at their Portland office. [Link]
Klarquist Sparkman is searching for a patent attorney with 1-4 years of experience and an EE, CS, or physics degree to work at their Portland office. [Link]
Bacon & Thomas is seeking a patent attorney with 1-3 years of experience and a background in ME, EE, or similar to work at their Alexandria, VA office. [Link]
Klein, O'Neill & Singh is looking for a patent attorney/agent with 2-5 years of experience and a degree in EE, CS, or physics to work at their Irvine, CA office. [Link]
Buchanan Ingersoll & Rooney is searching for a trademark associate with 2-4 years of experience to work at their Alexandria, VA office. [Link]
TransTech Pharma is seeking an IP Counsel with 5+ years of experience and a science degree to work at their High Point, NC location. [Link]
Baker & Hostetler is looking for patent attorneys with 2+ years of experience with a degree in ME, EE, or materials to work at their Cincinnati office. [Link]
Solazyme is searching for a patent agent with 3-5 years of experience and a degree in bio sciences to work at their San Francisco location. [Link]
Trop, Pruner & Hu is seeking associates with an EE or CS backgrounds and a minimum of 2 years of experience to work at their Houston or Austin office. [Link]
A law firm in Cupertino has multiple openings for patent attorneys/agents with an Electrical or mechanical background. [Link]
NSIP LAW is looking for associates with a minimum of 4 years of experience in patent prosecution and an EE, CE, or CS degree to work at their Washington, DC office. [Link]
Myers Wolin is seeking a partner level patent or trademark attorney or small practice group with portables to join their firm located in Morristown, NJ. [Link]
Kilpatrick Townsend is searching for a student associate or patent agent with a degree in EE, CS, or physics to work at their Washington, DC office. [Link]
Los Alamos National Lab is looking for an experienced patent attorney with 8 years of experience and a technical background to work at their Los Alamos, New Mexico location. [Link]
Nagoya International Patent Firm is seeking a US patent attorney with 2-5 years of experience to work in Japan. [Link]
Banner & Witcoff is searching for lateral associates with EE or CS backgrounds to work at either their Washington, DC or Chicago office. [Link]
The Webb Law Firm is looking for a senior litigation attorney with a minimum of 7 years of experience to work at their Pittsburgh location. [Link]
The Webb Law Firm is seeking a patent litigation associate with a minimum of 3 years of experience to work at their Pittsburgh location. [Link]
The Webb Law Firm is searching for associates with a degree in CS, CE, or EE and a minimum of 3 years of experience to work at their Pittsburgh location. [Link]
Perkins Coie is looking for a patent associate with a minimum of 3 years of experience and a degree in EE, physics, or CS to work at their Seattle office. [Link]
Fiala & Weaver is seeking patent attorneys/agents with 1+ years of experience and a degree in EE, CS, or physics. [Link]
FLSmidth is searching for a patent attorney with at least 5 years of experience to work in Salt Lake City. [Link]
Hamilton, Brook, Smith & Reynolds is looking for electrical associates with 3-5 years of patent pro or IP litigation experience to work at their Concord, Massachusetts office. [Link]
Sandia National Labs is seeking a patent attorney with 4-8 years of experience and a degree in physics, EE, ChemE or relevant field to work at their Albuquerque location. [Link]
Solazyme is searching for an IP paralegal with 2-5 years of experience to work at their San Francisco location. [Link]
Senniger Powers is looking for an associate attorney with a minimum of 2 years of experience and a degree in EE, CE, or CS to work at their St. Louis office. [Link]
Harness, Dickey & Pierce is seeking an IP litigation associate with 2-4 years of experience to work at their St. Louis location. [Link]
Hoxie & Associates is searching for an experienced patent prosecution paralegal to work at their Millburn, NJ office. [Link]
Faegre Baker Daniels is looking for a Biotech/Biochem/Chemical patent agent with at least 2 years of experience and a Ph.D. to work at their Denver office. [Link]
Schwegman, Lundberg & Woessner is seeking attorneys with 1+ years of experience and a degree in software/Electrical engineering, organic chemistry (Ph.D.), chemical/polymer engineering, and ME. [Link]
Telesign is seeking an IP analyst with at least a bachelor's degree to work at their Marina Del Rey, CA location. [Link]
The Michaud-Kinney Group is seeking 2 IP attorneys with at least 3 years of experience: 1 with a background in chemistry or biology and the other with a background in mechanical or electrical technologies. [Link]
AdvantEdge Law Group is looking for patent attorneys/agents with a degree in EE, CE, or CS and 2-5 years of experience to work at their South Jordan, Utah location. [Link]
Schwabe, Williamson & Wyatt is searching for a patent associate with a background in CS and/ or EE and 4 years of experience to work in either their Seattle or Portland office. [Link]
NXP is seeking a Sr. patent attorney, IP and licensing with 10-15+ years of experience to work at their San Jose location. [Link]
Steptoe & Johnson is searching for IP associates with a minimum of 2 years of experience in patent litigation and a background in EE to work at in their DC office. [Link]
Harrity & Harrity is looking for patent attorneys/agents with a minimum of 2 years of experience and a background in EE, CS, or physics to work in their Fairfax, VA office. [Link]
Turner, Padget, Graham, and Laney is seeking a patent attorney 3-5 years of experience in drafting and litigating patents to work in their Greenville, SC office. [Link]
Weaver Austin Villeneuve & Sampson is searching for a patent attorney/agent with a EE and/or CS background and 3-5 years of experience to work in their Oakland office. [Link]

Upcoming Events:

The Los Angeles Intellectual Property Law Association invites you to join us for the 2012 LAIPLA Spring Seminar at the beautiful Lodge at Torrey Pines in La Jolla, California, on June 8-10, 2012. The Spring Seminar features nine hours of panel discussions and presentations on the latest developments in intellectual property law, provides excellent networking opportunities at the cocktail receptions and dinners, and allows sufficient time for relaxation and enjoyable outdoor activities, including a golf tournament at the Torrey Pines Golf Course, home of the 2008 U.S. Open. Speakers and panelists include federal judges, practitioners (including in-house attorneys), and academics. [Link]
The Louisville Bar Association, IP Section, is hosting a half-day CLE program covering various topics in patent law, including patent-eligible subject matter in light of Mayo, patent claim interpretation, joint and distributed infringement, and inequitable conduct. The CLE will be held on June 12 from 9 AM until 12 PM at the LBA office in downtown Louisville, Kentucky. Speakers include Donald S. Chisum, author of Chisum on Patents, and Janice M. Mueller, author of Patent Law, Third Edition. [Link]
A free webinar on Improving Decision-Making with Patent Claims Analytics hosted by IPVision will take place June 12, 2012 at 1 pm EST/10 am PST. Those who attend will receive a free claims analysis. Sign up here: [Link]
The C5's 11^th Annual International Conference on Maximising Pharma Patent Lifecycles conference will be held June 20-21 in London. Patent lifecycle management is becoming more crucial for pharmaceutical companies with the cost of research and drugs continually rising and companies constantly trying to obtain the maximum financial benefit from existing patent terms. In addition to protecting existing IP rights and seeking methods to extend current patent lifecycles, pharmaceutical companies are faced with the challenge of inventing new drugs and diversifying portfolios to replace sales on older and generic drugs. [Link]
AIPLA's 4th Annual Trademark Bootcamp will be held in Alexandria, VA on June 22. Learn the trademark basics from top trademark practitioners. This day-long course provides a complete overview of the trademark prosecution process from start to finish, with sessions including: pre-filing considerations, the application process, the examination process, and many more. [Link]
The ACI 3^rd annual Hatch-Waxman Boot Camp will be held June 25-26 in San Diego. Topics to be covered include: the organization, jurisdiction of the FDA and the PTO and their interplay in the patenting of drugs and biologics, how the approval process for drugs and biologics is connected to the patenting of these products, how the Hatch-Waxman Act established the paradigm for market entry of generic small molecule drugs – and how biosimilar and many others. [Link]
IP Dispute Resolution 2012 will take place June 28-29 in London. Hear experiences from Kraft Foods, Nokia, Ericsson, Proctor & Gamble, RIM, Google, Unilever…Discuss current litigation issues, procedures & remedies in all relevant jurisdictions. Guest speakers include: Mialeeka Williams, Ignacio de Castro, Michael Bishop, Richard Vary, Kevin Cranman, and many others. [Link] (PatentlyO readers receive a 10% discount)
The AUTM annual meeting will take place July 23-25 in Oklahoma City. There will be many intriguing sessions and lectures to attend. Guest speakers include: Dennis Crouch, Kevin Noonan, Todd Sherer, and many more. [Link]
ACI's Freedom to Operate conference is scheduled for July 30-31, 2012 in Philadelphia, PA. Freedom to operate searching and analysis, always a critical component of any patent counsel's profession, is undergoing its biggest shake-up in a generation. Expansion of the obviousness standard, the America Invents Act provisions now requiring a truly global search, and other developments have left patent attorneys and business development professionals perplexed as they try to protect valuable IP in an increasingly competitive global environment. [Link] Register for with PO 200 for a discount.
Earn Advanced Patent Law CLE in Spectacular Seattle This Summer: The Chisum Patent Academy is now accepting registrations for its 4th annual summer seminar in Seattle, July 30 – August 1, 2012. Their uniquely insightful, interactive seminars are limited to 10 participants. All sessions are taught by Donald Chisum and Janice Mueller. For further details on seminar coverage and registration information, see http://www.chisumpatentacademy.comor e-mail mailto:info@chisum.com
IP Law Summer School will be held August 13-17 in Cambridge, UK. The only residential conference for Intellectual Property lawyers who want to get ahead… an unrivalled resource for the consolidation of, or initiation into all of the central concepts in IP, presented in the context of the latest developments in the industry. [Link] (PatentlyO readers receive a 10% discount)

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

Patently-O Bits & Bytes by Lawrence Higgins

June 6, 2012PatentClaim Construction, Inequitable Conduct, obviousness, paidDennis Crouch

2012 Jefferson Medal recipient

The New Jersey Intellectual Property Law Association (NJIPLA) will award the 2012 Jefferson Medal to the Honorable Garrett E. Brown, Jr. (Ret.), Chief Judge, United States District Judge for the District of New Jersey. Following a 60 year tradition, the NJIPLA presents the Jefferson Medal annually to someone who has made exceptional contributions to the field of intellectual property law. Former Medalists include judges, members of Congress, Patent and Trademark Office officials and leaders of the intellectual property bar. Chief Judge Brown will be presented with the Jefferson Medal on June 8, 2012 at the annual Jefferson Medal Dinner at The Hilton at Short Hills, Short Hills, NJ.

Chief Judge Brown recently joined the JAMS panel after a distinguished judicial and legal career. He served twenty-six years as United States District Judge for the District of New Jersey, the last six as Chief Judge, where he led the court-wide effort to provide prompt, efficient justice to civil litigants, and to implement new local patent rules. Prior to appointment to the federal judiciary, he served two years as Chief Counsel to the U.S. Maritime Administration. While in private practice, he concentrated on federal commercial litigation, including antitrust, employment, construction, environmental, banking, intellectual property, and securities matters. [Link]

Will Singapore Become a Patent Hotspot?

Singapore wants foreign IP attorneys and professionals to relocate there. A Patents Bill was introduced to the parliament, which will allow foreign patent professionals to practice in Singapore without going through the long process of passing exams and doing an internship with a local law firm, which is currently required. However, foreign attorneys will only be allowed to engage in work from other countries. The intention behind the proposed changes is that highly skilled IP professionals from across Asia and beyond will relocate to Singapore, where they will be ideally located to handle patent work for the whole Asia region. [Link] Patent Act

Patent Jobs:

Faegre Baker Daniels is seeking a patent associate with 2-6 years of experience and a degree in EE, ME, or ChemE to work at their Minneapolis office. [Link]
Klarquist Sparkman is looking for a patent attorney/agent with an advanced degree in organic chemistry and 3+ years of experience to work at their Portland office. [Link]
Klarquist Sparkman is searching for a patent attorney with 1-4 years of experience and an EE, CS, or physics degree to work at their Portland office. [Link]
Bacon & Thomas is seeking a patent attorney with 1-3 years of experience and a background in ME, EE, or similar to work at their Alexandria, VA office. [Link]
Klein, O'Neill & Singh is looking for a patent attorney/agent with 2-5 years of experience and a degree in EE, CS, or physics to work at their Irvine, CA office. [Link]
Buchanan Ingersoll & Rooney is searching for a trademark associate with 2-4 years of experience to work at their Alexandria, VA office. [Link]
TransTech Pharma is seeking an IP Counsel with 5+ years of experience and a science degree to work at their High Point, NC location. [Link]
Baker & Hostetler is looking for patent attorneys with 2+ years of experience with a degree in ME, EE, or materials to work at their Cincinnati office. [Link]
Solazyme is searching for a patent agent with 3-5 years of experience and a degree in bio sciences to work at their San Francisco location. [Link]
Trop, Pruner & Hu is seeking associates with an EE or CS backgrounds and a minimum of 2 years of experience to work at their Houston or Austin office. [Link]
A law firm in Cupertino has multiple openings for patent attorneys/agents with an Electrical or mechanical background. [Link]
NSIP LAW is looking for associates with a minimum of 4 years of experience in patent prosecution and an EE, CE, or CS degree to work at their Washington, DC office. [Link]
Myers Wolin is seeking a partner level patent or trademark attorney or small practice group with portables to join their firm located in Morristown, NJ. [Link]
Kilpatrick Townsend is searching for a student associate or patent agent with a degree in EE, CS, or physics to work at their Washington, DC office. [Link]
Los Alamos National Lab is looking for an experienced patent attorney with 8 years of experience and a technical background to work at their Los Alamos, New Mexico location. [Link]
Nagoya International Patent Firm is seeking a US patent attorney with 2-5 years of experience to work in Japan. [Link]
Banner & Witcoff is searching for lateral associates with EE or CS backgrounds to work at either their Washington, DC or Chicago office. [Link]
The Webb Law Firm is looking for a senior litigation attorney with a minimum of 7 years of experience to work at their Pittsburgh location. [Link]
The Webb Law Firm is seeking a patent litigation associate with a minimum of 3 years of experience to work at their Pittsburgh location. [Link]
The Webb Law Firm is searching for associates with a degree in CS, CE, or EE and a minimum of 3 years of experience to work at their Pittsburgh location. [Link]
Perkins Coie is looking for a patent associate with a minimum of 3 years of experience and a degree in EE, physics, or CS to work at their Seattle office. [Link]
Fiala & Weaver is seeking patent attorneys/agents with 1+ years of experience and a degree in EE, CS, or physics. [Link]
FLSmidth is searching for a patent attorney with at least 5 years of experience to work in Salt Lake City. [Link]
Hamilton, Brook, Smith & Reynolds is looking for electrical associates with 3-5 years of patent pro or IP litigation experience to work at their Concord, Massachusetts office. [Link]
Sandia National Labs is seeking a patent attorney with 4-8 years of experience and a degree in physics, EE, ChemE or relevant field to work at their Albuquerque location. [Link]
Solazyme is searching for an IP paralegal with 2-5 years of experience to work at their San Francisco location. [Link]
Senniger Powers is looking for an associate attorney with a minimum of 2 years of experience and a degree in EE, CE, or CS to work at their St. Louis office. [Link]
Harness, Dickey & Pierce is seeking an IP litigation associate with 2-4 years of experience to work at their St. Louis location. [Link]
Hoxie & Associates is searching for an experienced patent prosecution paralegal to work at their Millburn, NJ office. [Link]
Faegre Baker Daniels is looking for a Biotech/Biochem/Chemical patent agent with at least 2 years of experience and a Ph.D. to work at their Denver office. [Link]
Schwegman, Lundberg & Woessner is seeking attorneys with 1+ years of experience and a degree in software/Electrical engineering, organic chemistry (Ph.D.), chemical/polymer engineering, and ME. [Link]
Telesign is seeking an IP analyst with at least a bachelor's degree to work at their Marina Del Rey, CA location. [Link]
The Michaud-Kinney Group is seeking 2 IP attorneys with at least 3 years of experience: 1 with a background in chemistry or biology and the other with a background in mechanical or electrical technologies. [Link]
AdvantEdge Law Group is looking for patent attorneys/agents with a degree in EE, CE, or CS and 2-5 years of experience to work at their South Jordan, Utah location. [Link]
Schwabe, Williamson & Wyatt is searching for a patent associate with a background in CS and/ or EE and 4 years of experience to work in either their Seattle or Portland office. [Link]
NXP is seeking a Sr. patent attorney, IP and licensing with 10-15+ years of experience to work at their San Jose location. [Link]
Steptoe & Johnson is searching for IP associates with a minimum of 2 years of experience in patent litigation and a background in EE to work at in their DC office. [Link]
Harrity & Harrity is looking for patent attorneys/agents with a minimum of 2 years of experience and a background in EE, CS, or physics to work in their Fairfax, VA office. [Link]
Turner, Padget, Graham, and Laney is seeking a patent attorney 3-5 years of experience in drafting and litigating patents to work in their Greenville, SC office. [Link]
Weaver Austin Villeneuve & Sampson is searching for a patent attorney/agent with a EE and/or CS background and 3-5 years of experience to work in their Oakland office. [Link]

Upcoming Events:

The Los Angeles Intellectual Property Law Association invites you to join us for the 2012 LAIPLA Spring Seminar at the beautiful Lodge at Torrey Pines in La Jolla, California, on June 8-10, 2012. The Spring Seminar features nine hours of panel discussions and presentations on the latest developments in intellectual property law, provides excellent networking opportunities at the cocktail receptions and dinners, and allows sufficient time for relaxation and enjoyable outdoor activities, including a golf tournament at the Torrey Pines Golf Course, home of the 2008 U.S. Open. Speakers and panelists include federal judges, practitioners (including in-house attorneys), and academics. [Link]
The Louisville Bar Association, IP Section, is hosting a half-day CLE program covering various topics in patent law, including patent-eligible subject matter in light of Mayo, patent claim interpretation, joint and distributed infringement, and inequitable conduct. The CLE will be held on June 12 from 9 AM until 12 PM at the LBA office in downtown Louisville, Kentucky. Speakers include Donald S. Chisum, author of Chisum on Patents, and Janice M. Mueller, author of Patent Law, Third Edition. [Link]
A free webinar on Improving Decision-Making with Patent Claims Analytics hosted by IPVision will take place June 12, 2012 at 1 pm EST/10 am PST. Those who attend will receive a free claims analysis. Sign up here: [Link]
The C5's 11^th Annual International Conference on Maximising Pharma Patent Lifecycles conference will be held June 20-21 in London. Patent lifecycle management is becoming more crucial for pharmaceutical companies with the cost of research and drugs continually rising and companies constantly trying to obtain the maximum financial benefit from existing patent terms. In addition to protecting existing IP rights and seeking methods to extend current patent lifecycles, pharmaceutical companies are faced with the challenge of inventing new drugs and diversifying portfolios to replace sales on older and generic drugs. [Link]
AIPLA's 4th Annual Trademark Bootcamp will be held in Alexandria, VA on June 22. Learn the trademark basics from top trademark practitioners. This day-long course provides a complete overview of the trademark prosecution process from start to finish, with sessions including: pre-filing considerations, the application process, the examination process, and many more. [Link]
The ACI 3^rd annual Hatch-Waxman Boot Camp will be held June 25-26 in San Diego. Topics to be covered include: the organization, jurisdiction of the FDA and the PTO and their interplay in the patenting of drugs and biologics, how the approval process for drugs and biologics is connected to the patenting of these products, how the Hatch-Waxman Act established the paradigm for market entry of generic small molecule drugs – and how biosimilar and many others. [Link]
IP Dispute Resolution 2012 will take place June 28-29 in London. Hear experiences from Kraft Foods, Nokia, Ericsson, Proctor & Gamble, RIM, Google, Unilever…Discuss current litigation issues, procedures & remedies in all relevant jurisdictions. Guest speakers include: Mialeeka Williams, Ignacio de Castro, Michael Bishop, Richard Vary, Kevin Cranman, and many others. [Link] (PatentlyO readers receive a 10% discount)
The AUTM annual meeting will take place July 23-25 in Oklahoma City. There will be many intriguing sessions and lectures to attend. Guest speakers include: Dennis Crouch, Kevin Noonan, Todd Sherer, and many more. [Link]
ACI's Freedom to Operate conference is scheduled for July 30-31, 2012 in Philadelphia, PA. Freedom to operate searching and analysis, always a critical component of any patent counsel's profession, is undergoing its biggest shake-up in a generation. Expansion of the obviousness standard, the America Invents Act provisions now requiring a truly global search, and other developments have left patent attorneys and business development professionals perplexed as they try to protect valuable IP in an increasingly competitive global environment. [Link] Register for with PO 200 for a discount.
Earn Advanced Patent Law CLE in Spectacular Seattle This Summer: The Chisum Patent Academy is now accepting registrations for its 4th annual summer seminar in Seattle, July 30 – August 1, 2012. Their uniquely insightful, interactive seminars are limited to 10 participants. All sessions are taught by Donald Chisum and Janice Mueller. For further details on seminar coverage and registration information, see http://www.chisumpatentacademy.comor e-mail mailto:info@chisum.com
IP Law Summer School will be held August 13-17 in Cambridge, UK. The only residential conference for Intellectual Property lawyers who want to get ahead… an unrivalled resource for the consolidation of, or initiation into all of the central concepts in IP, presented in the context of the latest developments in the industry. [Link] (PatentlyO readers receive a 10% discount)

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

Avoiding Subject Matter Problems but Creating Written Description Problems

June 5, 2012Patentanticipation, paid, Written DescriptionDennis Crouch

Since Bilski, the USPTO has been understandably struggling with its patentable subject matter procedures. This is especially true in the area of computer software.

U.S. Patent No. 8,196,213 issued this week to Microsoft and is directed to a method of verifying un-trusted code. The original application included claims directed toward “a computer readable storage medium” loaded with varous instructions arranged in a novel manner. In July 2011, however, the examiner and the art unit’s Supervising Patent Examiner (SPE) mailed a final rejection of the claim based upon their conclusion that the claim impermissible encompassed unpatentable subject matter under 35 U.S.C. 101. The examiners reasoned that the storage medium classification was broad enough to include signals and that signals are unpatentable under Section 101. See 1351 Off. Gaz. Pat. Office 212 (Feb 23, 2012).

In response, Microsoft amended the claims – adding an express limitation that excludes signals. The amended claim begins: “1. A computer readable storage medium excluding signals . . . ” This change satisfied the PTO and the patent quickly issued.

The original patent document never discusses signals and only defines computer readable media by reference to various elements “which can store data that is accessible by a computer, such as magnetic cassettes, flash memory cards, digital video disks, Bernoulli cartridges, random access memories (RAMs), read only memories (ROMs) and the like may also be used in the exemplary operating environment.”

The Question: Should the PTO have rejected the amendment for failing the written description requirement?

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Proposed Rules for Micro Entities

June 4, 2012PatentEnablement, Licenses, paidJason Rantanen

By Jason Rantanen

As part of the America Invents Act, Congress created the new "micro entity" category of patent applicants. See Public Law 112-29, 125 Stat. 283, Section 10(g) (2011). Similar to small entity status, micro entities are entitled to a reduction of patent application fees (75% for micro entities versus 50% for small entities). "Micro entity" is a bit of a misnomer: an applicant can qualify as a micro entity either by having an income of less than three times the median household income (approximately $50,000 based on 2010 incomes) or by being under an obligation to assign or license the application to an institution of higher education. The latter route might be particularly attractive to universities, as it enables micro entity status for most university-affiliated researchers.

The USPTO recently published a set of proposed regulations for establishing micro entity status. In large part, these regulations would implement the micro entity status requirements set out in the AIA, while providing some further clarification in a few areas, such as multi-inventor applications (all must meet the micro entity requirements).

The Federal Register publication also notes some complications arising due to the severance of "applicant" from "inventor." Prior to the AIA, the two terms were synonymous. After September 16, 2012, however, it is possible for an application to be made by someone other the inventor. The micro entity section of the AIA uses the term "applicant;" however, as part of the proposed rulemaking the PTO is seeking comments on whether "inventor" should be used in place of "applicant" at any point in the rules for establishing micro entity status.

Finally, keep in mind that even once these proposed rules are finalized, the discount will not be available until the PTO sets or adjusts patent fees under the fee setting authority provision of the AIA, something that it indicates will not formally occur until around March 2013.

The proposed rules are available here: Download 2012-12971 The comment deadline date is July 30, 2012.

Endowed Chair in IP and Junior Faculty Workshop at the University of Indiana McKinney School of Law

June 1, 2012PatentAbstract Idea, paid, Subject Matter Eligibility, USPTO DirectorJason Rantanen

By Jason Rantanen

Two announcements today from the University of Indiana McKinney School of Law. The first is about IU's candidate search to fill its new IP Chair; the second is for a Junior Faculty Workshop on Intellectual Property Issues in the Pharmaceutical Industry that IU will hold in December 2012.

Endowed Chair in Intellectual Property
Indiana University Robert H. McKinney School of Law is pleased to announce that it is launching a search for the first endowed chair created by the gift of Robert H. McKinney to the (aptly named) Indiana University Robert H. McKinney School of Law. The chair will be in Intellectual Property and will also serve as the Director of our Intellectual Property and Innovation Center. The law school is looking for a tenured scholar with a distinguished record of teaching, research, and service. Please forward a cv or any questions to Gerard Magliocca (gmaglioc@iupui.edu).

Junior Faculty Workshop on Intellectual Property Issues in the Pharmaceutical Industry
The Indiana University McKinney School of Law is pleased to announce this year’s Junior Faculty Workshop, on Intellectual Property Issues in the Pharmaceutical Industry. Scheduled for December 7 and 8, 2012, this two-day Workshop offers a unique opportunity for untenured scholars to present their draft scholarship for in-depth critique and commentary by respected senior scholars in the field. The Workshop is perfectly timed for junior faculty participants to revise their articles in time for a spring submission for publication. Indiana University will cover both travel and lodging expenses for all participants.

Any untenured scholars interested in participating in this intensive workshop should submit a detailed abstract or the first several pages of their articles, along with a brief CV, to Nic Terry (npterry@iupui.edu) or Emily Michiko Morris (emmmorri@iupui.edu), by June 22, 2012. Works already in progress are ideal for this workshop and will be given preference. Topics for the workshop may focus on any of a range of intellectual property issues as they relate to the pharmaceutical industry, broadly defined. Acceptable topics may therefore include, but are not limited to, issues involving patent and regulatory exclusivity; patent linkage; the Hatch-Waxman Act; the BPCIA; TRIPs; the Bayh-Dole Act; the AIA; public-private collaborations; and more.

Applicants should also submit the names of established scholars in their area of scholarship who would be able to provide meaningful commentary on their drafts. Junior faculty applicants selected for the workshop must commit to producing complete drafts of their articles well ahead of the workshop (i.e., before Halloween), so that senior faculty participants may have time to review them. Selected participants will be notified by July 1, 2012.

Mintz v. Dietz & Watson: Hindsight and Common Sense

May 30, 2012PatentAffirmed Without Opinion, obviousness, paidJason Rantanen

By Jason Rantanen

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

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

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

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

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

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

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

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

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

Guest Post by Michael Risch: America’s First Patents

May 30, 2012PatentFederal Circuit En Banc, obviousness, paidJason Rantanen

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

May 30, 2012PatentAIA Trials, IPR, paid, PGR, Supreme CourtDennis Crouch

by Dennis Crouch

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

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

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

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

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

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

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

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

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

Survey Response: Is the patent invalid?

May 29, 2012Patentobviousness, paidDennis Crouch

by Dennis Crouch

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

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

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

Substantial Evidence on Appeal

May 29, 2012Patentmotivation to combine, obviousness, paidDennis Crouch

by Dennis Crouch

In re Hyon (Fed Cir. 2012)

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

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

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

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

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