Guest Post on Myriad by Prof. Megan La Belle

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Guest Post by Megan M. La Belle, Assistant Professor at Catholic University of America, Columbus School of Law.

Last Wednesday was an eventful day for patent cases at the Supreme Court.  In addition to oral arguments in Mayo v. Prometheus, the plaintiffs in Ass’n for Molecular Pathology v. USPTO (Myriad Genetics) – another high-profile case concerning patentable subject matter – filed their petition for a writ of certiorari.  The petition presents two questions.  Predictably, the first question addresses the limits of patentable subject matter and asks the Court to decide whether human genes are patentable.  The second and less obvious question focuses on plaintiffs’ standing to sue.  Specifically, the petition asks: “Did the court of appeals err in adopting a new and inflexible rule, contrary to normal standing rules and this Court’s decision in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007)….?”  Some might be surprised that plaintiffs are challenging standing, since the Federal Circuit held the Myriad case justiciable and decided it on the merits.  Yet, as I argue in Standing to Sue in the Myriad Genetics Case, 2 Cal. L. Rev. Circuit 68 (2011), the Federal Circuit’s decision in Myriad raises compelling questions about standing in patent declaratory judgment actions that warrant the Court’s attention. 

In MedImmune, the Supreme Court held that there is standing to bring a patent declaratory judgment action if “the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”  In announcing this all the circumstances standard, the Court criticized the Federal Circuit’s longstanding bright line test for standing, which required plaintiffs to show that: (1) the alleged infringer had a reasonable apprehension of suit at the time it filed the action; and (2) the alleged infringer is conducting infringing activity or has made meaningful preparations toward conducting infringing activity.

Initially, the Federal Circuit responded to MedImmune by abandoning its bright line test and announcing that it would use the all the circumstances standard instead.  More recently, however, the Federal Circuit has backpedaled.  In Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329 (Fed. Cir. 2008), the Federal Circuit held that “proving a reasonable apprehension of suit is one of multiple ways that a declaratory judgment plaintiff can satisfy the more general all-the-circumstances test.”  Similarly, in Cat Tech LLC v. Tubemater, Inc., the court concluded that plaintiffs still must satisfy the second prong of the old test – i.e., the “meaningful preparations” prong – to establish standing.  And finally, with its decision in Myriad, the Federal Circuit has come full circle and is evaluating standing in patent declaratory judgment actions according to a bright line test that is strikingly similar to the one utilized before MedImmune.

In Myriad, twenty plaintiffs filed a declaratory judgment action asking the court to declare certain gene patents invalid.  The trial court held that all twenty plaintiffs had standing.  On appeal, the Federal Circuit affirmed there was standing to sue, but only as to one plaintiff – Dr. Harry Ostrer – and on far narrower grounds.  The Federal Circuit concluded that Dr. Ostrer was the only plaintiff who had suffered an injury-in-fact, a prerequisite for standing in federal court.  In reaching this conclusion, the Federal Circuit claimed to be following MedImmune, yet in reality it had applied a bright line rule:

[T]o establish an injury in fact traceable to the patentee, a declaratory judgment plaintiff must allege both (1) an affirmative act by the patentee related to the enforcement of his patent rights, and (2) meaningful preparation to conduct potentially infringing activity….

Myriad, 653 F.3d at 1344.  The Federal Circuit then found that none of the other plaintiffs had standing, either because they failed to allege “affirmative patent enforcement actions directed at them by Myriad,” or because they had not made “meaningful preparation to conduct potentially infringing activity.”

This return to a formalistic test for standing in patent declaratory judgment actions not only violates the letter and spirit of MedImmune, but it is problematic because it makes it more difficult for plaintiffs to challenge potentially bad patents.  For years, the Supreme Court has adopted flexible legal standards that facilitate lawsuits brought by parties challenging patent validity, in view of the public benefit created when bad patents are eliminated.  More recently, Congress and the President have signaled their intent to encourage patent validity challenges by enacting the America Invents Act, which provides for certain post-grant review proceedings.  Yet, despite these strong messages, the Federal Circuit has heightened the standing requirements and created a procedural bar for many alleged patent infringers.  Although the Supreme Court addressed this standing question just a few terms ago in MedImmune, it seems the Court needs to remind the Federal Circuit of the purpose of declaratory relief and its essentiality to a well-functioning patent system.

Time for Clients to Start Marking?

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Guest post by Paul Morgan

Recent patent legislation has removed almost all of the prior dangers of miss-marking products with patent numbers, including fully removing any risk of leaving expired patent numbers on products. (The new 35 U.S.C. § 292 is reproduced below). Yet the significant potential advantages for infringement damages recovery by marking products under 35 U.S.C. § 287, etc., remain. Patent owners who do not mark their products are prevented by §287 from recovering any damages for any of the infringements occurring prior to serving an actual, specific, notice of infringement, or bringing suit. (As a caveat, products that only “use” a patented process need not be marked under §287).

Also, marking can aid assertions of “willful” infringement – resulting in enhanced damages. Likewise, marking has the potential of aiding in establishing “inducing” infringement assertions.

Under the new statute, “virtual” marking can now be used which is easily maintained or changed and does not require product mold or tooling changes.

So, now is the time for client counseling on the reconsideration of patent marking policies by many companies. Especially those companies that had previously marked some of their products but had stopped due to the recent plague of costly mass-marking-trolls-litigation, now ended by the AIA.

Note: Of course deliberately or recklessly marking a product with a patent number that does not apply to any part of that product is still unwise. It can be potentially indirectly prejudicial for patent enforcement, FTC complaints, etc., even if competitors, or the government, cannot prove any actual damages occurred from that kind of deliberate miss-marking.

————–

35 U.S.C. 292

(a) Whoever, without the consent of the patentee, marks upon, or affixes to, or uses in advertising in connection with anything made, used, offered for sale, or sold by such person within the United States, or imported by the person into the United States, the name or any imitation of the name of the patentee, the patent number, or the words “patent,” “patentee,” or the like, with the intent of counterfeiting or imitating the mark of the patentee, or of deceiving the public and inducing them to believe that the thing was made, offered for sale, sold, or imported into the United States by or with the consent of the patentee; or Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article the word “patent” or any word or number importing the same is patented, for the purpose of deceiving the public; or Whoever marks upon, or affixes to, or uses in advertising in connection with any article the words “patent applied for,” “patent pending,” or any word importing that an application for patent has been made, when no application for patent has been made, or if made, is not pending, for the purpose of deceiving the public – Shall be fined not more than $500 for every such offense. Only the United States may sue for the penalty authorized by this subsection.

(b) A person who has suffered a competitive injury as a result of a violation of this section may file a civil action in a district court of the United States for recovery of damages adequate to compensate for the injury.

(c) The marking of a product, in a manner described in subsection (a), with matter relating to a patent that covered that product but has expired is not a violation of this section.

Average Patent Application Pendency

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In its annual Performance and Accountability Reports, the USPTO publishes a statistic identified as the "Pendency time of average patent application." The reports describe the figure as the "average time (in months) between filing and issuance or abandonment of utility, plant, and reissue applications. This average does not include design patents." I have charted the PTO's reported average pendency below in the first chart. The chart shows that for 2011, the PTO was successful in keeping average pendency under three years.

120711_1926_AveragePate1

Unfortunately, the PTO's numbers are somewhat misleading. The main technical problem with the USPTO numbers is that any request for continued examination (RCE) is counted as an abandonment of an application and a refilling of a new application. Thus, an application that remains pending for four years before issuance and that includes an RCE filing will be counted in the PTO calculations as two applications with an average two-year pendency. The PTO reporting also includes other application "reworkings" such as continuation applications and divisional applications that tend to be processed somewhat faster than original non-provisional applications.

The chart below adds two additional pendency calculations: One calculation ignores RCEs in the pendency calculation – looking instead at the time from non-provisional filing to issuance.  Thus, under my calculation, an application that remains pending for four years before issuance and that includes an RCE filing will be counted as one application with a four-year pendency.  The second calculation also ignores RCE filings and additionally limits the data set to only original non-provisional applications (excluding continuations, divisionals, and CIPs). As expected removing the RCE artifact from the data adds considerably to the average pendency. (Note here that my chart is lacking because it does not include statistics for pendency of abandoned applications.)

120711_1926_AveragePate2

The final chart shows a pendency histogram for patents issued in October and November of 2011 (again ignoring RCE filings). The median pendency is 3-4 years. 98% issued within nine years of filing.

120711_1926_AveragePate3

Mayo v. Prometheus Guest Post: The Hot-Button Issues

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By Denise W. DeFranco of Finnegan, Henderson, Farabow, Garrett & Dunner, LLP.

The decision in Mayo v. Prometheus is sure to be a close one, perhaps even a 5-4 decision, like many other Supreme Court's decisions concerning patent eligibility under section 101 of the patent statute. The outcome of the case will probably turn on two fundamental issues about which the justices wrestled throughout the oral argument.

1) After recognizing the "hornbook law" that a law of nature is not eligible for patent protection, but that the application of a law of nature is, Justice Breyer inquired as to how much needs to be added to a claim to transform it from an unpatentable law of nature to a patent-eligible application of a law of nature. Justice Breyer and others seemed concerned that Prometheus's patent claim simply recites an "observation" of a law of nature, which may not be enough. In response, Prometheus's counsel argued that Prometheus's claims include limitations beyond the mere observation of the natural phenomenon, namely that a particular drug be administered to a patient and that the level of metabolites in the patient's bloodstream be measured. The Supreme Court's decision may ultimately turn on whether limitations like those are adequate to transform a law of nature into an application of a law of nature.

2) Many of the justices wrestled with the question of whether an analysis under section 101 of the patent statute should involve at least a "quick peek" at the issues of novelty and non-obviousness under section 102 and 103, respectively. Mayo's counsel argued that the Supreme Court took such a quick peek in the Bilski case and that such a quick peek is appropriate to provide some measure of protection to the medical community from overbroad patents. In response to an observation by Justice Kennedy that its "hard to resist the temptation to peek," the Solicitor General stated that "taking up the temptation to import a look into novelty and nonobviousness in the 101 inquiry [would] be very destabilizing." He further added that the Court in Bilski made clear that patent eligibility under section 101 is a threshold test that turns simply on "whether there is a process."

As in the Bilski case, the justices — across the board — seemed leery of the patentability of Prometheus's claim. In Bilski, though, both the U.S. Patent & Trademark Office ("PTO") and the U.S. Court of Appeals for the Federal Circuit had already concluded that the claims were patent ineligible under section 101. Here, both the PTO and the Federal Circuit found the claims patent eligible. Perhaps that difference will weigh on the minds of some of the justices as they determine whether their leeriness in fact arises not from issues of eligibility under section 101 but patentability under sections 102 and 103.

Denise W. DeFranco is a partner at Finnegan, Henderson, Farabow, Garrett & Dunner, LLP.  She has been representing companies in patent infringement litigation in both trial and appellate courts for almost two decades. She can be reached at denise.defranco@finnegan.com or 617.452.1670.

Where should we put the next two patent offices?

Patent

The USPTO is seeking input on where to locate two more offices in addition to the DC Metro office (Alexandria, Virginia) and the planned Detroit Office. The chart below shows the distribution of patent attorneys and agents distributed by state. Does this map help us pinpoint the next two spots?: Fayetteville, Arkansas and Boise, Idaho? In this analysis, folks should consider that the new patent offices are likely to be quite small in comparison to the HQ.

Notes:

  • I’m working on a zip code level map and a center-of-gravity calculation.
  • I only looked at Reg No.’s greater than 27,000, which includes the most senior partner at my former firm, MBHB.

Chisum on the New Rules of Patent Priority

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Don Chisum was already a leader in the patent field when his multi-volume treatise – Chisum on Patents – was first published in 1978. His authoritative explanation of the law has been cited by hundreds of court opinions and thousands of law review articles. Mr. Chisum has recently turned his attention to the Leahy-Smith America Invents Act and penned a new article titled Priority Among Competing Patent Applicants Under the American Invents Act. Although he had hoped to produce a straightforward explanation of the new priority rules, Chisum found a series of ambiguities and gaps in the new law that will be important for patent strategists. In a message to Congress, he concluded the paper as follows:

If the America Invents Act were a term paper submitted by a student in a patent law seminar, an instructor would, undoubtedly, send it back with a note: SOME GOOD IDEAS, SOME MUDDLED AND UNSUPPORTED IDEAS, POOR GRAMMAR: PLEASE REVISE AND CLARIFY.

Download the article here.

Patent Pendency as a Function of Claim Count

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This is an updated version of a chart that I made a few years ago — this time using utility patents issued 1/2009 through 11/2011. To create the chart, I grouped patents according to the number of claims in the issued patent and then calculated the average number of claims for each group. As usual, the 20-count claims is an anomaly.

Summary of Mayo v. Prometheus Oral Argument

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Guest Post by Jonas Anderson, Assistant Professor at American University Washington College of Law

Yesterday morning I attended the highly anticipated oral argument in Mayo v. Prometheus at the Supreme Court.  The case raises the question of whether a patent claim that covers correlations between blood tests and patient health is 'patentable' under 35 U.S.C. § 101. 

I assume most PatentlyO readers are familiar with this case, but will provide a very brief background before diving into today's argument.  Prometheus is the owner of a patent that covers a method of analyzing the effectiveness of thiopurine drugs for treating gastrointestinal disorders.  Claim 1 of the relevant patent reads as follows:

    (1) A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising:

(a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and

(b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder,

wherein the level of 6-thioguanine less than about 230 pmol per 8×10^8 red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and

wherein the level of 6-thioguanine greater than about 400 pmol per 8×10^8 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.

Prometheus offers a blood test which analyzes metabolite levels in patients.  Mayo sought to offer a competing blood test at a lower price.  Prometheus promptly sued Mayo for infringement.

I have divided my review into 7 topics.  The topics are ranked based on my impression of the importance that the justices appeared to give to each topic.  Although I have tried to transcribe the key statements made by the justices and advocates as accurately as possible, all quotations are approximate.

1.  The preemption question

The justices and the parties focused much of their discussion on the issue of preemption.  One of Mayo's principal arguments in its brief and at oral argument is that Prometheus's patent preempts the use of a law of nature — namely, the relationship between metabolite levels and patient health. 

Justice Kennedy began the preemption questioning by asking whether a system of measurements that continually monitor drug retention would be patentable.  Mayo's counsel responded that it would depend on the breadth of the claims.  "Claim specificity is key."  According to Mayo, if Prometheus's patent had provided competitors room to develop different, more accurate metabolite levels it may have passed the 101 test.  But, in this case Prometheus's patent preempted any reduction in dosage if a patient's metabolite levels were above 400 pmol.  In Mayo's view, "incidental" steps added to a natural phenomenon were insufficient to avoid preemption.  Thus, any patent consisting only of a natural phenomenon and "incidental steps" would be preempted under Mayo's test.

Justice Breyer, the author of the famous LabCorp dissent, focused nearly all of his questions on the issue of differentiating between a patentable application of a law of nature and an unpatentable law of nature.  He pressed both parties to identify a process by which the court could discern the difference.  Mayo's counsel first suggested that a preemption test could be used to ferret out unpatentable laws of nature.  Later, he suggested that Bilski suggests that courts can determine if the non-novel elements of a claim are "incidental."  "You're getting warmer," Justice Breyer quipped.

Justice Scalia interrupted the exchange and scoffed "I'm not comfortable with that.  It depends on how broad it is?  Is up to 700 [pmol]? Is that OK?  550?  830?  How are we supposed to apply that kind of rule?  It just seems to me not a patent rule that we could apply."  It seems fair to say that Scalia was not convinced by either party that a 101 standard based on preemption could be reliably applied by courts.

Despite Scalia's concerns, preemption seemed to carry the day — with both sides.  Justice Breyer continued the preemption line of questioning with Prometheus's counsel.  "What has to be added to a law of nature to make it a patentable process?  If you put too little to the answer to that question, I believe I can take things like e=mc2 and make them patentable, and if you put too much in you'll wreck your case."  Prometheus's counsel also advocated a preemption test, but its test would be much more limited than Mayo's.  Whereas Mayo would consider any natural phenomenon with "incidental" transformational steps as preempted subject matter, Prometheus would only find preemption when no applicative steps were added.  Prometheus repeatedly cited to the Morse telegraph case as a classic example of preemption under 101.

Of course, Prometheus's suggested application of the preemption test has an obvious problem: Bilski.  The patented hedging method in Bilski was not a naked claim to an abstract idea; the claim was limited by both industry and analysis techniques.  Prometheus's counsel acknowledged this difficulty, but argued that Bilski's abstract idea was merely coupled with other abstract ideas.

2.  The 'creep' of novelty and obviousness

Many of the Justices, but primarily the Chief Justice, expressed concern about the blurred relationship between novelty, non-obviousness and the 101 inquiry.  Chief Justice Roberts wanted to know what efficiencies would be gained, if any, by relying on Section 101 instead of obviousness or novelty to reject invalid patents.  Mayo made the case that 101 is a much more manageable and predictable doctrine than 102 or 103.  Prometheus countered by reference to the very case before the court — clearly Section 101 had not led to a quick resolution of this long-running case.

The Chief Justice asked Prometheus's counsel whether he was advocating for the elimination of a Section 101 limitation on patentability.  In response, counsel conceded that he was urging that courts rely on other patent doctrines in most cases, but that there would be some instances, such as the Morse case, in which 101 would be the proper vehicle for rejecting or invalidating a patent.

3.  The impact (or lack thereof) of LabCorp

In my view, one of the most surprising statements of the day came about as a result of Mayo's suggestion—in response to a question from Justice Scalia—that Justice Breyer's dissent in LabCorp could guide some of the analysis in this case.  Justice Breyer quickly interrupted and seemed to distance himself from his dissent.  Although he was convinced that the patent claims in the LabCorp case were merely directed to an observation of a law of nature, the dissenting opinion, he said, "lacked an explanation of why [the claims in that case were not] an application of the law of nature."

Throughout the argument, he was clearly wrestling with how much "extra" is needed in order to patent a newly discovered natural law.  If, as many have predicted, Justice Breyer pens part of the Prometheus decision, I expect that he will attempt to give some guidance to this most difficult question.

4.  The innovation question.

A healthy amount of discussion centered around the impact on innovation that a decision in this case will have.  Justice Breyer, who had been extremely skeptical of diagnostic method patents in his dissent in LabCorp, noted that discovering laws of nature can be an incredibly expensive process.  His search for a line between phenomenon and application seemed to center around balancing the incentive to discover new laws of nature with a desire to allow access to those laws to follow-on innovators. 

Mayo repeatedly urged the court to overturn the patent at issue by arguing that Promtheus could limit others from developing new, improved, and cheaper alternatives to their blood test and was therefore preemptive.  Mayo argued that if the claims incorrectly correlated metabolite levels and outcomes, "the public is stuck with the erroneous information."  In response, Prometheus stated that there are ways that follow-on innovators can improve on Prometheus's patent; namely, by acquiring an improvement patent or by challenging Prometheus's patent under Section 101's utility requirement.

Finally, as any good appellate attorney would, Mayo's counsel attempted to limit the perceived impact of a reversal.  When asked by Justice Sotomayor how many patents would be impacted by a ruling favoring Mayo, counsel responded "only a couple."

5.  The scope of Prometheus's patent

The newest Justices, Sotomayor and Kagan, directed nearly all of their questions to the scope of the patent claims at issue.  Although claim construction was no longer at issue, the Justices probed the extent to which Prometheus's patent foreclosed competitors.  Justice Kagan wanted to know what, in Mayo's opinion, Prometheus's patent attorney could have done to make their invention patent-eligible.  Mayo's counsel responded by saying that a claim with a more narrow range of relevant metabolite levels and a specified treatment protocol would satisfy 101.  Justice Kagan followed-up by asking whether "the difference is the scope of the ranges, or the treatment protocol."  "Both," Mayo responded.

Justice Kagan followed up with Prometheus.  When asked why the patent drafter had failed to include a therapeutic step (which Mayo conceded would have made the claim patent-eligible), Prometheus's counsel responded that it was unnecessary.  He pointed to numerous patents that merely claimed a method of gathering information: patents on identifying ore deposits (but not requiring removal); patents on navigating boats in fog (but not requiring redirecting the ship); patent to find leak in a water main (but not requiring repair).

6.  Prior decisions: are they helpful?

Justice Scalia seemed genuinely dismissive of the Court's precedents that have held that laws of nature (or natural phenomenon) are not patentable.  "Tell me why you can't patent nature?" he asked Mayo's counsel early in the proceeding.  "Doesn't any medical patent rely on natural processes?  Even if you invent a new drug, what that new drug does is natural.  Whatís the difference [from this case]?"  When Mayo's counsel responded that the specificity would be the key test for preemption, Justice Kennedy responded "I thought your answer to Justice Scalia would be…that [the claims here cover] the measurement of a result.  That's how I would have answered the question.  But that's obviously not the right way to do it."

In a related vein, Justice Breyer openly questioned whether the holdings in Flook and Diehr can be reconciled.  "If you look at the Court's cases, they seem to say Flook, one thing, and Diehr another thing."

7.  The transformation question

Almost no time was devoted to discussing whether the claims at issue meet the machine or transformation test. In fact, I can't recall hearing the words "Machine or Transformation" escape from the Justices.  Perhaps the Court is going to distance itself from the MOT test — or at least give courts another "clue."

Conclusion

Predicting the outcome of Supreme Court rulings in patent cases is a treacherous hobby.  If anything, the argument today revealed a Court troubled by the fact that both sides have urged an application of Section 101 that centers on preemption, but with little guidance on how to apply such a test.  While I would expect a ruling to have some mention of preemption, none of the justices seemed comfortable with either side's suggested application of such a test, while Justice Scalia was dismissive of such an idea. 

Perhaps most surprising was that the Court's most vocal critic of diagnostic patents, Justice Breyer, appeared to distance himself from LabCorp.  I get the feeling that he is still troubled with the idea of granting patent rights covering natural phenomenon, he is genuinely concerned with the impact of the Court's decision in this case on the medical innovation community. 

Justice Breyer: Giving Patent Law the Finger

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In Mayo v. Prometheus, the Supreme Court is again addressing patentable subject matter. During oral arguments, Justice Breyer came-up with a hypothetical invention to help him draw the line on patentable subject matter.

JUSTICE BREYER: Suppose I discover that if … someone takes aspirin … for a headache and, you know, I see an amazing thing: if you look at a person’s little finger, and you notice the color [indicates that] you need a little more, unless it’s a different color, you need a little less. Now, I’ve discovered a law of nature and I may have spent millions on that. And I can’t patent that law of nature, but I say: I didn’t; I said apply it. I said: Look at his little finger.

MR. SHAPIRO: Sure.

JUSTICE BREYER: Okay? Is that a good patent or isn’t it?

MR. SHAPIRO: No … Well, because you — you’ve added to a law of nature [to] just a simple observation of the man’s little finger.

How would you respond to Justice Breyer’s idea with respect to 35 U.S.C. §101?

 

Mayo v. Prometheus

Patent

The memorable line from the KSR oral arguments was Justice Scalia’s criticism of Federal Circuit precedent as “gobbledygook.” 

The Court heard oral arguments today in Mayo v. Prometheus.  The best one-liner from oral arguments comes from Justice Breyer.  As you might expect, Justice Breyer’s statement is not as colorful as Justice Scalia’s, but it is likely more accurate.

JUSTICE BREYER: If you look at the Court’s cases, they seem to say Flook, one thing, and Diehr another thing.

Justice Breyer’s statement highlights a central problem of modern patentable subject matter doctrine — that the quartet of leading decisions contradict one another. The court failed to move the ball in its 2010 Bilski decision and instead simply stated that the proper path is to follow these cases.

  • We’ll be posting a more complete discussion of the oral arguments tomorrow.
  • Read the transcript (draft).

Morgan: Ambiguities in Defining Prior Art under the Leahy-Smith America Invents Act

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In our newest Patently-O Patent Law Journal article, former Xerox patent counsel Paul Morgan highlights two important ambiguities in the new 35 U.S.C. § 102(a)(1) as defined by the Leahy-Smith America Invents Act. This provision replaces Sections 102(a) and 102(b) and, beginning in March 2013 will serve as the fundamental definition of prior art in the US patent system. Under the new statute, no patent can issue if “the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” The language “otherwise available to the public” is new to the patent statute. Morgan makes the counterintuitive case that the catchall phrase actually serve the purpose of limiting limit the scope of prior art under the statute. In particular, the language suggests that the other types of art identified in the statute are also “available to the public.” If so, this statutory change could be seen to overrule doctrines that bar patent rights based upon secret commercialization by the patentee. See, for example, Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts Co., 153 F. 2d 516, 520 (2nd Cir. 1946).

Read the article: Paul Morgan, The Ambiguity in Section 102(a)(1) of the Leahy-Smith America Invents Act, 2011 Patently-O Patent Law Journal 29.  Download Morgan.2011.AIAAmbiguities

Forthcoming Article: Patentable Subject Matter for Diagnostic Methods after in re Bilski

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Review by Dennis Crouch

Professor Eisenberg (Michigan) is one of the leading academics focusing on proprietary rights in biomedical research. She has been writing about biotech patents and other forms of protection since the 1980's. Most recently, Professor Eisenberg provided final version of her forthcoming article titled "Wisdom of the Ages or Dead-Hand Control? Patentable Subject Matter for Diagnostic Methods after in re Bilski." The article will soon be published in the Case Western Reserve Journal of Law, Technology & the Internet, but I wanted to highlight the article today because it speaks directly to the pending case of Mayo v. Prometheus. Oral arguments are scheduled in Prometheus for Wednesday, December 7, 2011.

Prior to its 2010 decision in Bilski v. Kappos, the Supreme Court's leading precedent on patentable subject matter was the quartet of cases issued before the formation of the Court of Appeals for the Federal Circuit. See, Benson, Flook, Diehr, and Chakrabarty. In deciding the patentable subject matter question raised in Bilski, the Supreme Court simply pointed back to its old precedent as controlling. Eisenberg writes: "The Supreme Court reaffirmed the authority of these decisions without explanation in Bilski v. Kappos, thereby demanding formal adherence to stare decisis without following the discipline of common law reasoning."

In her article, Professor Eisenberg asks the Supreme Court to use this next opportunity in Mayo v. Prometheus to "not only to clarify the boundaries of patentable subject matter, but to explain what the doctrine of patentable subject matter is all about." She points to three possible uses of the doctrine: (1) PSM could serve as a threshold inquiry that economizes administrative costs by excluding some kinds of subject matter from the front door of the patent system without the need for a full examination. However, Eisenberg recognized that "patentable subject matter doctrine does not and cannot serve that role in its current form." (2) PSM could be useful in "limiting heterogeneity" of the system by narrowing the technological diversity of patentable inventions and excluding technologies for which "less protection is optimal." (3) PSM could serve as a backstop for when other patentability doctrines fail to protect the public domain, properly limit claim scope, or ensure that building blocks of innovation are available for future innovators.

Notes:

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IP Hall of Fame Nominations

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by Dennis Crouch In 2006, the publishers of the UK based Intellectual Asset Magazine (iam) founded the non-profit IP Hall of Fame to honor individuals who have made an outstanding contribution to the development of IP law and practice. The process begins with nominations from the public and then voting by members of the 45 members of the IP Hall of Fame Academy. The Academy includes previous inductees to the Hall of Fame and a handful of additional members. (I am a voting member of the Academy but not the IP Hall of Fame). The focus is global and includes all areas of intellectual property law and practice.

Call for Nominations: The nomination process closes on December 9, 2011. To nominate someone, simply fill in the nomination form and supply a paragraph of between 50 and 100 words to support your nomination. The award ceremony and gala dinner will be held at the Estoril Casino near Lisbon, Portugal during the IP Business Congress in June 2012.

Recent patentable subject matter decisions at the BPAI

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By Dennis Crouch

Here are several recent BPAI decisions on patentable subject matter eligibility.

New Rejection in Answer: Examiner’s Answer raised new a new Section 101 issue, but applicant failed to respond in the reply brief. BPAI Holding: “We therefore summarily sustain this rejection.” Ex Parte Maeng, 2011 WL 6012458 (BPAI November 30, 2011).

Delay in Adjudication: L’OREAL claims a “method for recommending a beauty product” that includes several steps, including applying a beauty product to a person and then seeing how the person looks under various simulated lighting environments. The examiner rejected the claim as unpatentable based upon its failure to satisfy the machine-or-transformation test. On appeal, the BPAI reversed the rejection, holding that “a full analysis as outlined in Bilski v. Kappos … should have resulted in a finding by the Examiner that the claimed subject matter either was or was not an abstract idea, and hence, respectively, that the claimed subject matter was not patent eligible or was patent eligible in this particular instance.” This case highlights a problem with the growing backlog at the BPAI. The Examiner’s final rejection was mailed in 2009 and she mailed the Examiner’s Answer in February 2010, a few months prior to the Supreme Court’s decision rejecting the machine-or-transformation test as a determinative test of patentable subject matter eligibility. Ex Parte Hessel, 2011 WL 6012477 (BPAI November 30, 2011)

CyberSource Rejections: Citing the Federal Circuit’s recent decision in CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1371 (Fed. Cir. 2011), the BPAI has affirmed a Section 101 rejection of an IBM application that claims a “computer-implemented method for partitioning a domain dataset.” Despite the “computer implemented preamble, the BPAI held that the claimed process was not patent eligible because it “could be performed by a human writing on a piece of paper.” The Board quoted CyberSource for the proposition that “a method that can be performed by human thought alone is merely an abstract idea and is not patent-eligible under § 101.”

IBM had also include claims directed to a “system for partitioning” that included “nominal recitations of conventional hardware in the body of the claim (e.g., ‘a memory’ and ‘a processor’).” As instructed by CyberSource, the court considered the “underlying invention for patent-eligibility purposes” rather than particular nominal claim limitations. Here, the BPAI found that the true invention was the process and that the system claims were simply reformulated versions of the method and therefore, that the system claims should be interpreted as process claims.

In analyzing the underlying invention of independent “system” claims 26, 27, and 28 as a process, we again conclude that the scope of the recited functions (steps) covers functions that can be performed in the human mind, or by a human using a pen and paper (e.g., claim 26: “establish an evaluation function” and “partition said domain subset”). Therefore, we conclude that unpatentable mental processes fall within the subject matter of independent claims 26-28.

IBM also include “Beauregard claims” directed to an “article of manufacture” comprising “a computer readable medium.” The BPAI likewise found those claims unpatentable under 35 U.S.C. §101 as interpreted by CyberSource. Ex Parte Vilalta, 2011 WL 6012377 (BPAI November 29, 2011). On the flip side of this, the BPAI has also been holding that claim scope must be determined before Section 101 analysis can be complete. See Ex Parte Black, 2011 WL 6012476 (BPAI November 28, 2011).

Software Not Patentable: OPNET Tech’s patent application is directed toward a “network monitoring system” that includes a set of “collectors”, “analyzers”, and “reporters” as well as an “automated engine” configured to control the applications in achieving a target task. In the specification, the applicant wrote that each element of the system could be created in software and the Board concluded that “the invention can exist solely as software.” Citing the Federal Circuit’s 1994 Warmerdam decision, the Board held that a claim that covers a “purely software embodiment” cannot be patentable subject matter. Ex Parte Cohen, 2011 WL 6012432 (BPAI November 29, 2011). On the flip side, the BPAI held that a “web based system” is patent eligible because such a network based requires “more than software per se, because a web, upon which a web-based system is based, is physical, in addition to software, in that it requires computers and routers and telecommunications equipment to operate.” Ex Parte Vogel, 2011 WL 6012447 (BPAI November 21, 2011).

Providing, Receiving, and Manufacturing: Small paper manufacturer Grays Harbor has seemingly spent a small fortune prosecuting its patent application No. 09/849,504. The invention relates to their computerized system for processing paper and was filed back in 2001. One step of rejected method claim 11 was written as follow “receiving a promotions order from a third-party advertiser to place promotional material on an enclosure…” OK, nothing brilliant in this limitation (or another limitation involving “providing instructions”) with regard to inventiveness, but the Board’s rejection was odd – holding that that the claim’s “recitation of the steps of receiving and providing are merely abstract ideas because each step is recited in the future tense of ‘to place’, ‘to create’, ‘to deliver’, and hence is only contemplated, rather than executed.” Ex Parte Quigg, 2011 WL 6012448 (BPAI November 22, 2011)

Provisional Patent Application Filing Count

Patent

by Dennis Crouch

Provisional patent applications continue to remain popular, and the number of annual filings continue to rise at a moderate pace. In FY2011, more than 150,000 provisional applications were filed. That number is roughly the same as the number of original non-provisional applications filed by US entities during the same period. (Here, “original” means that the filing was not based on a prior non-provisional application or a foreign patent application).  Of recent US patents issued that do not claim international priority, more than 1/3 claim priority to a provisional application filing. (This excludes applications claiming foreign & PCT priority).

PatentlyO122

Federal Circuit Holds Defendant’s State of Incorporation (Delaware) Improper Venue

Patent, , , ,

By Dennis Crouch

54727largeLogoIn re Link_A_Media Devices Corp. (LAMD) (Fed. Cir. 2011)    

Introduction: The Federal Circuit has again asserted mandamus power to order a patent case to be transferred to a more convenient forum under 28 U.S.C. § 1404(a) – holding that Judge Robinson's denial of transfer out of Delaware was an abused of discretion.

Three facts make the case somewhat interesting and novel. First, the transfer is not out of Texas, but rather from Delaware to the Northern District of California. Second, the defendant, LAMD, who requested the transfer is a Delaware Corporation (although its operations are in California). Finally, the plaintiff, Marvell Int'l., is a foreign entity based in Bermuda although its subsidiary, Marvell Semiconductors, and the named inventors are all based in California.

Legal Background: The due process clauses of the US Constitution have been read to place personal jurisdiction limitations on the power of courts to pass judgment on non-resident parties. In patent cases, personal jurisdiction is rarely an issue because most defendants are national-players that have sufficient minimum contacts in every local jurisdiction.

Even when a court has personal jurisdiction over a case, the laws of civil procedure allow a court to transfer a case to a different jurisdiction "[f]or the convenience of the parties and witnesses, in the interest of justice." 28 U.S.C. § 1404(a). This provision in the law is derived from the common law doctrine of forum non conveniens and there continues to be cross-talk between the two docrines.

Lower Court Decision: In her decision to keep the case in Delaware, Judge Robinson primarily gave weight to three factors: (1) the plaintiff's choice of forum; (2) the defendant's choice of Delaware as its state of incorporation; and (3) the international (rather than regional) nature of the defendant. In addition, the court found no "congestion" problems or identified problems "with discovery or witness availability."

On appeal, the Federal Circuit reversed – holding that the fact that a defendant is incorporated in the forum state is only one factor to be considered in the analysis.

The Federal Circuit particularly pointed to four errors in the district court's analysis.

Choice-of-Forum: First, the court indicated that "far too much weight" was given to the plaintiff's choice of forum. While some weight may be given to that choice, the plaintiff's choice is given less deference when the forum is not the home-forum of the plaintiff. (Note, this result has the potential of being discriminatory to foreign entities under TRIPs because the foreign entities have no "home forum" in the US.)

State of Incorporation: Second, the appellate court held that heavy reliance on state of incorporation is inappropriate.

Neither § 1404 nor Jumara [the leading 3rd Circuit 1404 case] list a party's state of incorporation as a factor for a venue inquiry. It is certainly not a dispositive fact in the venue transfer analysis, as the district court in this case seemed to believe.

Convenience of Records: Judge Robinson refused to give weight to the convenience of witnesses and location of books and records – holding that those traditional 1404 factors are "outdated" except where truly regional defendants are litigating. The Federal Circuit held that at least some consideration should have been given to these factors.

Public Interest: Finally, the court looked to the interest of the forum jurisdiction (Delaware) in deciding the case and found it had very little interest because the state had no connection to the dispute and no connection to the parties other than the fact that LAMD is incorporated there.

Holding: The District Court is ordered to direct transfer of the case to the United States District Court for the Northern District of California.

  • It is important to note here that the Federal Circuit based its mandamus decision on 3rd Circuit law rather than Federal Circuit law.
  • Pilar G. Kraman discussed the district court decision at the Delaware IP Law Blog.

Patently-O and the Top 100 Legal Blogs: Vote Here

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The ABA Journal has again chosen Patently-O as one of the top-100 legal blogs along with Gene & Renee Quinn's IP Watchdog and Evan Brown's Internet Cases. This is the fifth year that the ABA Journal has published this list, and Patently-O has made the list each and every year. 

We've made a number of major improvements to Patently-O's coverage over the past year. Most notably, Professor Jason Rantanen is now a co-author, Lawrence Higgins is covering Bits and Bytes, and we have published a number of excellent guest posts both on the blog and in the associated short form Law Journal. Ryan Swarts is managing the Patently-O Job Board and he reports that we've had more job postings the past year than ever before (36 last month) and more readers as well (500,000 page views).

Some Stats: During the past year there have been more than 700,000 unique visitors to the Patently-O website and the vast majority of visits are return-visits. In addition, these days well over 20,000 patent law professionals receive Patently-O through a free daily e-mail service.

We have several projects that we hope to implement over course of the next few months. Most importantly, we'll be rolling-out a complete of the site on a new blogging platform that allows for better control of comments through moderation and comment-ranking as well as easier navigation through the site archives and a high quality mobile version of the site. We're also talking with several potential regular contributors who could provide additional case studies on patent prosecution, litigation, examination and licensing. As always, please let me know if you have concerns or ideas for the site. dcrouch@patentlyo.com.

How can you help: In addition to the top-100 list, the ABA is also holding a popularity contest. I would appreciate your vote in the IP Law Category. To vote, you have to register but you don't have to provide the ABA with actual identifying information. VOTE HERE.

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Thanks again!

Dennis