Search Results for: "sas institute"

Bt-Corn Patent Unenforceable Due to Failure to Submit Internal Employee Notes

Patent,

PatentLawPic167Monsanto v. Bayer (Fed. Cir. 2008)

Bayer holds several patents relating to genetically modified Bt corn.  This case arose when Monsanto sued Bayer in Missouri for a declaratory judgment stating that the patents were not infringed; invalid; and unenforceable.  The Eastern District of Missouri Court (Judge Webber) held all the patents unenforceable due to inequitable conduct during prosecution. On appeal, the Federal Circuit affirmed the holding of unenforceability.

Bt corn contains a gene that codes for Bt toxin — an insect repellent protein found naturally in Bacillus thuringiensis (Bt) bacteria. Bayer’s patents cover the chimeric Bt-plant-promoter gene; plant cells expressing Bt toxin; plants expressing Bt toxin; and the method of modifying plants to express Bt toxin.

Notes from a Conference: Before Bayer’s patent application, another scientist (Dr. Wayne Barnes) attended a conference and presented a poster on Bt genetic issues.  One Bayer scientist attended the conference and took extensive notes from the poster. Those notes were given to other Bayer Bt scientists including the individual responsible for prosecuting Bayer’s patent applications.

During prosecution, Bayer submitted Dr. Barnes Abstract, but did not submit the notes. According to the court, those notes were material because they provided evidence of Dr. Barnes disclosure. (A reasonable examiner would have considered them “important in deciding whether to allow the … application”). The inference of intent was easily made since Bayer took a position at the PTO that was directly refuted by information contained in the note.

Not Prior Art: One important – but unstated – aspect of this case is that the notes are not prior art. Rather, in this case the prior art was the publicly displayed poster.  Thus, the reminder: Rule 56 requires submission of prior art as well as information about the prior art that is either (1) material to patentabilty or (2) a reasonable examiner would consider important in deciding whether to allow the application. 

Declaratory Judgment Power: Monsanto filed its DJ action against four Bayer patents. In response, Bayer provided a “statement of non-liability” along with a promise not to sue Monsanto on three of the patents. Under CAFC precedent, such a statement normally removes a court’s jurisdiction over those patents — except where, as here, the court retains separate jurisdiction based on a Section 285 request for attorney fees. Thus, because the patents are still before the court, it retains jurisdiction to hold them unenforceable. In addition, the CAFC noted that the recent Nilssen case also allows a court to hold patents unenforceable even after being dropped from the lawsuit.

Computer Based Patent Bar Exam Statistics

Patent

In order to become a US Patent Attorney or Patent Agent, an otherwise qualified individual must pass the PTO’s registration examination — often termed the patent bar exam. Since July 2004, the examination has been offered on computer in centers throughout the country. The computer-based examination continues the tradition of a fairly low passage rate:

  • 2,113 individuals took the exam between July 2004 and June 2005. Of those, 56.4% passed the exam.
  • 4165 individuals took the exam between June 2005 and October 2006. Of those, 58.2% passed the exam.

Since 2000, the paper based exam passage rate has ranged from a low of 37% to a high of 70%. 

When is an Electronic Document a Printed Publication for Prior Art Purposes?

Patent

ScreenShot001Wynn W. Coggins — the PTO’s Chief Examiner of eCommerce patent applications — recently published a useful article about how her art unit deals with electronic prior art. The following are some highlights.

Internal documents:

Internal documents intended to be confidential are not “printed publications” and are unavailable for use as prior art. This is regardless of how many copies are distributed. Additionally, note that “[w]hile distribution to government agencies and personnel alone may not constitute publication…distribution to commercial companies without restriction on use clearly does.” Garrett v. US., 422 F.2d 874 (Ct. Cl. 1970).

Electronic Publications:

An electronic publication, including an on-line database or Internet publication, is considered to be a “printed publication” within the meaning of 35 U.S.C. § 102(a) and (b) provided the publication was accessible to persons concerned with the art to which the document relates. Thus, “whether information is printed, handwritten, or on microfilm or magnetic disk or tape, etc., the individual who wishes to characterize the information as a printed publication…should produce sufficient evidence of its dissemination or that it has been otherwise available and accessible to persons concerned with the art to which the document relates…” Wyer, 655 F.2d 227, Amazon.com v. Barnesandnoble.com, 73 F. Supp. 2d 1228 (W.D. Wash. 1999).

Web Pages Must Be Static:

Prior art disclosures on the Internet or in an on-line database are considered to be publicly available as of the date the item was publicly posted. This is provided that the item is dated and not temporal, and can be indexed for subsequent retrieval. An example of a temporal item is a web broadcast that cannot be saved, retrieved or printed, e.g., a live simulcast feed that is not archived, and a “streaming” audio or video that “flashes” across the screen.

Read the Article. (Via Michael White)

Tafas v. Dudas: Discovery and Scheduling

Patent

Tafas v. Dudas, 07–cv-0846 (E.D.Va 2007)

As is well known in the patent prosecution community, Tafas and SmithKline Beecham (GSK) filed suit against the USPTO — asking the Federal Courts to block implementation of a new set of rules that would limit the number of claims and continuation applications that can be filed based on a single original patent application.  The Eastern District of Virginia District Court has issued a preliminary injunction (PI) that temporarily blocks implementation of the new rules. Now, the Patent Office is fighting to change the outcome in the final decision.

The PTO has now submitted its answer to the complaints filed Tafas. In its answer, the PTO presents three defenses:

  • The rules were promulgated in accordance with appropriate rules (and the US Constitution) and comply with the Patent Act;
  • Plaintiff (Tafas) has waived all objections that he did not make during the rulemaking process; and
  • Plaintiff (Tafas) lacks standing on many of the asserted counts.

As is usual, the answer did not develop any factual background for these particular defenses.

Discovery and Scheduling: During the PI Hearing, the PTO argued for an extended period for filing Summary Judgment motions. At that time, the Tafas attorney indicated that the schedule should go much more quickly.  Of course, now that the rules have been stayed the parties have flipped their positions. The PTO wants a quick decision and Tafas is content to allow the proceeding to drag-on a bit longer.

From the PTO Scheduling Brief:

“In order to halt Tafas and GSK’s stalling efforts, clarify that no discovery is permitted, and allow the Court reach the merits expeditiously so that the Final Rules are not preliminarily enjoined longer than necessary, Defendants Jon Dudas and the USPTO (collectively “the USPTO”) respectfully request that the Court enter an Order clarifying that a standard scheduling order will not issue in these consolidated cases because the cases may promptly be decided on cross-motions for summary judgment without discovery.”

The PTO would have all summary judgment briefs filed prior to the Christmas Holiday. The next hearing is scheduled for November 16, 2007.

Before deciding the scheduling, the district court will need to determine whether to allow any discover. The plaintiffs — Tafas & GSK — are asking for discovery (including depositions of PTO leaders). The defendants — PTO & Dudas — argue that no discovery is necessary.

There is usually very little discovery when a court reviews administrative rules — rather, the new rules usually stand or fall based on the administrative record. Of particular interest in this case are public (and private) statements by PTO officials regarding the purpose and likely effect of the rule package — especially because some of those statements speak to purposes and effects not found in the ‘official’ reasoning published by the Office.  Tafas adds that its Constitutional claims (apart from its APA claims) deserve discovery.

Files:

USPTO.2007.11.answer.Tafas.pdf
USPTO.2007.11.09.memorandum.scheduli.pdf
Tafas.1007.11.memo.schedule.pdf
GSK.2001.11.memorandum.schedule.pdf

Patent Law News

Patent
  • PTO Battle over Rules: PTO Director Jon Dudas and Deputy Director John Doll have now been served with deposition notices from Mr. Tafas’ attorneys. The Dudas deposition is scheduled for Friday, December 7, 2007 at the law office of Kelley Drye in DC.  Deposition dates are rarely firm.
  • E.D.Texas Not Waning: Patent Troll Tracker provides more stats in response to my post suggesting that the “magnetism of the Eastern District of Texas may be beginning to wane.” (Of course, TT’s work looks to the past, and my post was primarily thinking about the future).
  • S.1145: As the Senate Judiciary committee gets rolling again. Now is the time to contact your Senator to discuss the pros and cons of various aspects of patent reform.  [Contact] Interestingly, the Senate has disbanded its Judiciary subcommittee on Intellectual Property [Link]
  • Tafas v. Dudas et al Documents: My friends at Justia have agreed to provide links to all the court documents for the Tafas case: Justia on Tafas.  On November 5, 2007, the PTO withdrew its motion for partial summary judgment under Rule 12(b)(6).
  • Be a Fellow at Princeton: Those of you ready to spend time thinking and writing about patent law might consider a Fellowship in Princeton’s Program in Law and Public Affairs. One of the six fellowships is slotted to be awarded to an IP scholar. (funded by Microsoft). “Outstanding faculty, independent scholars, lawyers, and judges” are all invited to apply. Info: http://lapa.princeton.edu. [Other patent law jobs]

USPTO Continuation and Claim Rules: AIPLA Request Injunction to Halt New Rules

Patent,

Feeling some pressure from its members, the AIPLA has now filed an amici brief in support of GSK’s motion for a preliminary injunction to stop enforcement of the PTO’s new rules on continuations and claim count.

A preliminary injunction requires the moving party to satisfy a four factor test of equitable relief:

  • Likelihood of success on the merits of the case;
  • Irreparable harm that will persist without relief;
  • Balance of hardships weights in favor of relief; and
  • The public interest supports relief.

In its brief, the AIPLA focused on how the new rules work to destroy established interests. The brief focuses on a tradeoff between patents and trade-secrets — indicating that the inventions embodied by many currently pending applications would have been kept as trade-secrets but for the longstanding “guarantee of a full and fair opportunity to seek a spectrum of patent protection.”  According to the AIPLA, the limitations on claims and and continuations severely inhibit that guarantee and thus create an irreparable harm to current applicants.

David Kappos, Chief of IP at IBM, filed a declaration in support of the AIPLA brief. Kappos noted the incredible cost that it will incur to review its 25,000+ pending patent applications to ensure compliance. Writing on behalf of SanDisk, two attorneys noted that the technology company will lose at least $200,000 in filing fees due to required consolidation. Writing as a paid expert for SKB, former PTO Director Harry Manbeck has filed a declaration explaining why, in his view, the new rules are illegal.

Files:

Links:

New Patent Fees

Patent

TenThe PTO has enacted a modest fee increase of roughly 3%. The largest bump is in appeal fees. An appeal with oral arguments now costs $2050 in fees. (I would query whether this appeal fee increase is meant to cover costs or as a disincentive)

Due on filing:

  • Utility Filing Fee: $310
  • Utility Search Fee: $510
  • Utility Examination Fee: $210
  • Total: $1030 (was $1000)

Due later:

  • Notice of Appeal: $510 (was $340 in 2005)
  • Appeal Brief: $510 (was $340 in 2005)
  • Oral Hearing: $1030 (was $340 in 2005)
  • Utility Issue Fee: $1440
  • 3.5 Year Maintenance Fee: $930
  • 7.5 Year Maintenance Fee: $2,360
  • 11.5 Year Maintenance Fee: $3,910

Fee Schedule

 

Priority to Foreign Application Requires “Inventor’s Knowledge or Consent” at the Time the Foreign Application was Filed

Inventors, Patent, Patent Cases 2007, Priority Rights, Statutory Construction

PatentLawPic009Boston Scientific SciMed v. Medtronic Vascular (Fed. Cir. 2007).

SciMed’s patent application was originally filed by a European company (MinTec) in February 1994 as an European Patent Application. At that time, however, the inventors (Cragg & Dake) had not yet assigned rights to MinTec. Cragg assigned his rights a few months later. Dake did not assign his rights until 1996.

Medtronic has a US priority filing date of June 1994 on the same invention. In the interference, the question is whether a US patent applicant claim priority to a foreign application filed by an entity that was not acting on behalf of the US applicant at the time of filing? CAFC Answer: No priority unless foreign application was filed on behalf of the US applicant.

Under the court’s ruling here, 35 USC 119(a) provides a personal right to the inventor. Consequently, there must be a “nexus…between the inventor and the foreign applicant at the time the foreign application was filed.” That nexus requires at least “knowledge or consent” of the inventor.

“Indeed, as a matter of pure logic, an entity could not have filed a foreign application “on behalf of” an inventor without the inventor’s knowledge or consent; that the foreign application may have been filed in accordance with the laws of the country in which it was filed has no bearing here.”

Holding:

“[A] foreign application may only form the basis for priority under section 119(a) if that application was filed by either the U.S. applicant himself, or by someone acting on his behalf at the time the foreign application was filed.” (emphasis in original)

Notes:

  • This decision [LINK]: Scimed Life Sys., Inc. v. Medtronic Vascular, Inc., — F.3d — (Fed. Cir. 2007).
  • Final BPAI Decision: Patent Interference No. 104,192, Paper No. 187, 2001 WL 1339890 (B.P.A.I. July 21, 2001).
  • Trial Court Decision: Scimed Life Sys., Inc. v. Medtronic Vascular, Inc., 486 F. Supp. 2d 60 (D.D.C. 2006).

 

Do Patents Discourage Innovation?

Patent

Meurer_white_65wTwo former Boston University Law School Colleagues occupied New York Times headlines on Sunday in a discussion of the economics of patent law.   Michael Meurer and Jim Bessen are both economists and both law professors. Over the past few years, the pair has compiled a tremendous amount of economic data regarding patents and companies who patent.

Meurer & Bessen’s bottom line: On average, the patent system is bad for innovation.  They agree innovator firms often profit from their own patents. However, the pair’s data shows that the innovator firms are also the ones most likely to be targeted by other patent holders. (litigation, licensing, etc.) In today’s system, they find, the disincentives created by other people’s patents outweighs the incentives to build your own portfolio.  I.e., on average, the patent system discourages innovation. (Patents do a much better job in pharmaceuticals and much worse job in IT.)

Bessen_jamesMeurer & Bessen do not suggest dismantling the patent system — rather, they believe that a number serious reform measures are needed to shift the balance back to a positive state where patents incentivize innovation.

Their reform proposals call for clear predictable patent boundaries — something that every patent practitioner knows is a serious problem. Unfortunately, the current reform proposals hardly even touch this major issue.

Their book, Do Patents Work?, will be out in 2008 (Princeton). For now, you can find snippits of the research at the following links:

Continuation Changes: Where we stand and What to Do

Patent

600px-Seal_Of_The_President_Of_The_Unites_States_Of_America_svgCurrent status of the USPTO’s changes to continuation and claiming practice:

  1. Rules Approved: Two sets of final rules have been approved by the Bush administration (OMB).
  2. Preliminary Rules Softened?: The preliminary rules published by the PTO limited the number of continuations that could be filed based on any given invention (continuation limitations) and also limited the number of claims per application that would be examined (claim limitations).  Unsourced leaks from within the PTO indicate that the final approved rules are somewhat softened from those originally released. The exact content of the final rules will not likely be available until the PTO publishes them in the Federal Register.
  3. Potential Rules: Hal Wegner and others have indicated that the new rules will potentially limit continuations for new applications to one RCE and two continuations. Further continuations would likely be available after showing cause. For applications already filed, the PTO may allow three continuations. Claim may be limited to twenty-five total claims, five of them independent.
  4. Timing: The PTO apparently has the green-light to move forward. The rules can become effective within 30–days of publication in the Federal Register.  My expectation is that the publication will occur in the range of Aug-Oct and the effective date will be in the range of Sept-Nov.
  5. Currently Pending Applications: It is almost certain that currently pending applications will fall within the continuation rules.  The currently pending applications will likely be allowed a third continuation. However, there are some indications (rumors) that recently filed applications (that have not yet received an office action) will be limited to two continuations. Any continuations filed after the rule change will fall within the claim-number limitations.
  6. What to do now?: Many companies have reportedly already filed continuation applications in the hope of avoiding some of rule-change sting.  That approach appears prudent – especially for valuable cases where multiple continuations have already been filed. You may want to talk with David Boundy (DBoundy@Cantor.com) about fighting the rules and Kevin Noonan (noonan@mbhb.com) about how your company should handle the rule changes. It appears that neither the IPO or AIPLA are actively opposing the rule changes.

 

OMB approves proposed changes to continuation practice.

Patent

The ORIA has concluded its review of the PTO proposed rules with approval . . .finding them “consistent with change.”

Links:

=====

AGENCY: DOC-PTO RIN: 0651-AB93
TITLE: Changes to Practice for Continuing Applications, Requests for Continued Examination Practice, and Applications Containing Patentably Indistinct Claims
STAGE: Final Rule ECONOMICALLY SIGNIFICANT: No
RECEIVED DATE: 04/10/2007 LEGAL DEADLINE: None  
** COMPLETED: 07/09/2007 COMPLETED ACTION: Consistent with Change
AGENCY: DOC-PTO RIN: 0651-AB94
TITLE: Changes to Practice for the Examination of Claims in Patent Applications
STAGE: Final Rule ECONOMICALLY SIGNIFICANT: No
RECEIVED DATE: 04/10/2007 LEGAL DEADLINE: None  
** COMPLETED: 07/09/2007 COMPLETED ACTION: Consistent with Change

Notes: Thanks to Brad Pedersen for the tip.

Patent Law Jobs by Patently-O

Patent

On July 1, Patently-O released its new job site: Patent Law Jobs by Patently-O. The site already has thirteen new job postings that have been viewed by several thousand patent law prospects. 

As usual with Patently-O, function predates style. We have job opportunities and patent professionals who need jobs. In the coming days, we’ll be working on a prettier design.

Hopefully, we can serve as a match-maker for each of these potential employers.

If you need patent help, please forward this info to your recruiting coordinator!

Notes:

  • Patent Law Jobs: www.patentlyo.com/jobs
  • Job Submissions: Post a patent law job
  • E-mail me comments (dcrouch@gmail.com)
  • Job postings are also going-out on the news wires via Google news. (not guaranteed…)
  • New job offers can always be found in the right sidebar on Patently-O. New jobs will also be included in the Patently-O e-mail service.

Patently-O TidBits

Patent
  • Advisory Office Action: A Patently-O reader queries why 35 U.S.C. 133 does not extend to after-final advisory actions. Under Section 133, "any action" by the PTO must allow at least thirty-days for a response.
  • Chief Judge Michel continues to operate behind-the-scenes to block certain elements of patent reform.  In a letter to Howard Berman’s staff, Judge Michel argues again that the proposed economic apportionment provisions damage would be difficult to implement. The letter also highlights the recent damages analysis by former AIPLA president BIll Rooklidge while taking a dig at the credibility of law professors who have been pushing for reform — "Lawyers employed by particular companies, like most law professors, have little or no experience [in patent litigation]. Mr. Rooklidge, by contrast, has several decades of litigation experience in precisely these types of cases." MICHEL LETTER , ROOKLIDGE ARTICLE.
  • Despite a strong brief, the Supreme Court has denied Zoltek’s petition for certiorari that challenges the CAFC’s determination that Governmental patent infringement is not a 5th amendment takings. LINK.
  • Republicans on Patent Reform: Slow down and get it right. LINK.

Patently-O Comment Wars

Patent

The Patently-O daily full-text e-mailer is a great resource, but it has one major problem — The e-mail readers miss the extensive commentary posted by other Patently-O readers.  Over the past year, Patently-O readers have transformed the site from a primarily one-way resource into a rich community. The growth of reader comments is shown below (Graph).

Patent.Law003

Although only about 1/3 of the comments contain high-level useful commentary, this is still above-average for lawyerspeak. Like most readers, the comments also arrive primarily during business hours. (Graph).

Patent.Law004

As might be expected, the majority of comments are written under pseudonyms. Of the top-ten most frequent commentators, it appears that only one uses his real name: Michael Slonecker — a patent attorney primarily retired from practice.  Malcolm Mooney, an anonymous and acerbic patent attorney is leading the pack with over 600 comments.  [Mooney is likely ascorbic as well]

When comments are posted, I receive an e-mail with your IP address. Based on those addresses, the majority of comments come from law firms, quickly followed by government agencies (US Courts, USPTO, FAA, etc.) and businesses.  There is also a large group of comments associated with more generic ISPs (Verizon, Comcast, AT&T, etc.).

Three comment related projects:

  1. Threading of comments so that you can more easily follow various posts.
  2. Ranking of comments (as on SlashDot) so that you can exclude low-ranking posts.
  3. A comment [RSS] feed. So that you can more easily follow the most recent comments. (Thanks to Adam Kessel for this idea)

Of course, I do all the programming and configuration for Patently-O — Let me know if you have easy solutions for any of these projects! dcrouch@gmail.com.

Continuation and Claim Limitation Rules Submitted for Final Review: Final Publication in Early July

Patent, Patent Legislation

Hal Wegner has done the legwork to evidence the rumors.  On April 10, 2007, the USPTO Submitted two sets of final rules to the Office of Management & Budget for regulatory review:

  • RIN: 0651-AB93: Changes to Practice for Continuing Applications, Requests for Continued Examination Practice, and Applications Containing Patentably Indistinct Claims
  • RIN: 0651-AB94: Changes to Practice for the Examination of Claims in Patent Applications

Summer Implementation Likely: According to self-reports, Bush OMB has maintained a fairly strict adherence to a 90-day time-limit for review. Thus, barring unusual circumstances, publication of the rules can be expected in early July. Implementation would require a 30-day window following publication.

Get Involved: The Review Office has a policy "to meet with any party interested in discussing issues, whether they are from State or local governments, small business or other business or industry interests, or from the environmental, health or safety communities." In addition, third parties may submit written comments on any rule under review. [VIA FAX at (202) 395-3047 or 202-395-5806 or (202) 395-6566]. 

Earlier this month, Susan Dudley was named the new director of the Office of Information and Regulatory Affairs (OIRA) through a recess appointment. Her office is quite powerful because it "will have an opportunity to change or block all regulations proposed by government agencies."

Patent Reform Act of 2007

Patent,

On April 18, 2007, bipartisan legislators in both the Senate and House of Representatives introduced sweeping patent reform measures in legislation termed the Patent Reform Act of 2007. The reform measures include the following provisions: 

  • First-to-file rights and elimination of interference proceedings;
  • Reform to make it easier to file a patent application without the inventor’s cooperation;
  • Limitation of damages to only the economic value of the improvement as compared to the prior-art;
  • Specific limitations on when damages may be trebled for willfulness;
  • Post-grant opposition proceedings with a reduction in the litigation estoppel effect;
  • Limitations on patent venue;
  • Authority to the PTO director to create further regulations.

Although couched in terms of the importance of patents and patent quality. The thrust of many of the measures are clearly directed at “limiting litigation abuses.”  Although a detailed analysis has not been completed, the two versions appear virtually identical.

Legislative Documents:

Congressional Players:

  • The Senate version was introduced by Senators Leahy, Hatch, Schumar, and Cornyn
  • The House version was introduced by Representatives Berman, Smith, Conyers, Coble, Boucher, Godlatte, Zoe Lofgren, Issa, Schiff, Cannon, and Jackson-Lee

Lobbying Players:

  • www.innovationalliance.net (Tech Companies who want strong patents)
  • www.ipo.org (Industry group — Formerly supported strong IP rights — now a consensus builder)
  • www.phrma.org (Big Pharma: Strong patent rights)
  • www.patentsmatter.com
  • www.patentfairness.org (“Over-broad patent grants stifle future innovators, while unjustified lawsuits that aim to extort settlements”)
  • www.aipla.org (Group of lawyers who are, for the most part, unwilling to take a stand)
  • www.bsa.org (Microsoft, Apple, HP — all supporting dramatic patent reform that curbs litigation in favor of the more genteel cross-licensing).

Who is writing about patent reform:

News:

Patently-O plans to publish a couple of well written editorials on patent reform within the next two weeks. Feel free to submit yours to dcrouch@gmail.com.

CAFC Expands Scope of Declaratory Judgment Jurisdiction

Patent,

SanDisk v. STMicroelectronics (Fed. Cir. 2007).

SanDisk and ST were undergoing explicitly “friendly discussions” regarding cross-licensing of flash-memory technology rights. At a “settlement” meeting, ST showed a powerpoint presentation that mapped its claims to SanDisk technology and openly discussed SanDisk’s [alleged] infringement.

Apprehension: To avoid a declaratory judgment suit, ST’s attorney told SanDisk that “ST has absolutely no plan whatsoever to sue SanDisk.”  SanDisk agreed that it would at least wait until the following Tuesday to sue.   License proposals were exchanged, but SanDisk eventually didn’t like the deal.  About one month after the initial meetings, SanDisk sued for declaratory judgment of noninfringement and invalidity.

Case Dismissed: The district court dismissed the case — finding no actual controversy under the Declaratory Judgment Act “because SanDisk did not have an objectively reasonable apprehension of suit.”  Under Article III of the constitution, courts only have jurisdiction over actual “cases and controversies.” In regards to patent related declaratory judgment actions, the Federal Circuit has held that such a case or controversy only exists when a party has an objectively reasonable apprehension of being sued for patent infringement.

Deleting The Reasonable Apprehension Test: In the meantime, the Supreme Court decided MedImmune v. Genentech — tearing a large hole through the CAFC’s DJ reasonable apprehension test. 

“The Supreme Court’s opinion in MedImmune represents a rejection of our reasonable apprehension of suit test.”

Under the CAFC’s new rule, a patentee can create a situation amenable to declaratory judgment jurisdiction by making statements far short of threatening legal action. In particular, DJ jurisdiction can exist when the patentee’s position vis-a-vis a DJ plaintiff either (1) indicate that the DJ plaintiff is taking illegal actions or (2) pushes the DJ plaintiff toward abandoning legitimate activities.

“Article III jurisdiction may be met where the patentee takes a position that puts the declaratory judgment plaintiff in the position of either pursuing arguably illegal behavior or abandoning that which he claims a right to do.”

In particular, the following should be closely considered when writing cease and desist letters:

“We hold only that where a patentee asserts rights under a patent based on certain identified ongoing or planned activity of another party, and where that party contends that it has the right to engage in the accused activity without license, an Article III case or controversy will arise and the party need not risk a suit for infringement by engaging in the identified activity before seeking a declaration of its legal rights.”

Here, the CAFC found that ST’s activities were sufficient to create DJ jurisdiction.  In particular, the claim charts mapping out infringement along with ST’s discussion of SanDisk’s “infringement” were sufficient to create jurisdiction. There was no need to cut-off license negotiations prior to filing suit. Furthermore, ST’s self-serving statement that it did not intend to sue did “not moot the actual controversy created by its acts.” 

Vacated and remanded.

Notes:

  • The rule still requires some activity by the patentee: “In the context of conduct prior to the existence of a license, declaratory judgment jurisdiction generally will not arise merely on the basis that a party learns of the existence of a patent owned by another or even perceives such a patent to pose a risk of infringement, without some affirmative act by the patentee.”
  • Concurrence: In a concurring opinion, Judge Bryson spells the fear of many patent holders: “it would appear that under the court’s standard virtually any invitation to take a paid license relating to the prospective licensee’s activities would give rise to an Article III case or controversy if the prospective licensee elects to assert that its conduct does not fall within the scope of the patent.”

Patent Term Adjustment for Fun and Profit

Patent

PTAThe phrase “Patent Term Adjustment” elicits two divergent reactions from patent prosecution specialists.  PTA is wonderful because it provides a strong counterbalance to USPTO delays. On the other hand, PTA rules are complicated and it is easy for a practitioner to unintentionally lose-time.

In general, the PTA is an attempt to retain a patent term of approximately 17–years from issuance.  Under the rules, the statutory 20–year term is increased for certain PTO-related delays and is decreased for other Applicant-related delays.

Scott Kamholz of Foley Hoag has written a great guide to PTA entitled “Patent Term Adjustment for Fun and Profit.” The guide was originally published this Fall in IP Today, but is now available on Patently-O: File Attachment: PTA for Fun and Profit.pdf (147 KB).

Highlights of the article include:

  • CIP’s are more likely than continuations to capture PTA;
  • Extensions, non-compliant responses, and RCEs all decrease the PTA;
  • Late filing of formal drawings decreases PTA;
  • Written restrictions count as an office action — thus, consider making oral elections of species;
  • Express Mail or Fax improves PTA;
  • Terminal disclaimers are problematic;
  • Examine the PAIR system for docketing errors;
  • Appeal rejections;
  • Do not file papers after allowance;
  • Ask questions!

At some point, this may become moot as the PTO is considering simplifying the PTA.

Book Review: Innovation and its Discontents

Book Review, Patent

Review by Professor Thomas G. Field, Jr.

Jaffelerner Innovation and its Discontents: How Our Broken Patent System is Endangering Innovation and Progress, and What to Do About It (2004).
by Adam Jaffe and Josh Lerner

The 2004 book, Innovation and Its Discontents, has received too much attention to ignore. There, and more recently in the Wall Street Journal and elsewhere, Professors Jaffee and Lerner maintain that the patent system is broken, endangering innovation and progress. To their credit, they acknowledge that the alarm has been sounded for centuries. But such ground was well covered in Fritz Machlup’s agnostic study, An Economic Review of the Patent System, published by the U.S. Senate in 1958. Also, to their credit, they criticize, at 158, Nobel Laureates for exceeding the scope of their expertise. Yet, their often-rambling book suffers from the same fault.

Ironically, an introductory section beginning at 18 is entitled "patent medicine." As noted by Wikipedia, for example, "One memorable group of patent medicines — liniments that allegedly contained snake oil, supposedly a universal panacea — made snake oil salesman a lasting synonym for a charlatan." The authors aren’t charlatans, but it is difficult for anyone who knows much about patents to take Discontents seriously.

Jaffee and Lerner put a fresh face on prophesies of doom by linking them to two recent process changes in the patent system — a shift from tax to user-fee funding for the PTO and the creation of the U.S. Court of Appeals for the Federal Circuit. Although they argue that patent policy is too important to leave to patent lawyers, both problems and proposed solutions seem more related to process than policy.

The authors could be taken more seriously if they didn’t persist in flagging a few patents as evidence that, according to their subtitle, "our patent system is broken, endangering innovation and progress." Three mentioned in their book and elsewhere are for sideways swinging, exercising cats with laser pointers, and wristwatches for dogs. They might not resort to such examples, however, if they appreciated that the first is unenforceable, the second could not be enforced except possibly under § 271(b), and the third if enforced would seem unlikely to endanger much of anything.

By citing such patents, Jaffee and Lerner are hardly alone in subjecting the PTO to ridicule, but I fail to see how altered funding of the PTO could have increased the frequency of such patents. Nor do I see how their proposals would reduce it. Although they advocate, for example, earlier publication and expanded opposition, who other than the humorless would oppose? And how much time or money might such humorless individuals be willing to spend?

The relationship between the shift in PTO funding, on the one hand, and the issuance of patents for silly or trivial inventions, on the other, is remote. Indeed, I can think of nothing more likely to deter applications to protect inventions of little or no economic value than the substantial fee increases that followed the shift.

It is unlikely that those who got the swinging and cat-exercising patents harbored delusions about their economic value. Jaffee and Lerner, with most other patent system critics, however, seem not to appreciate why applicants often find such assessments difficult. As I’ve argued repeatedly, applicants unaware of the market value of inventions have far less incentive to scour the literature for potentially fatal art than infringers who subsequently become aware of the stakes. Anyone who understands that should not be surprised that patents are sometimes invalidated. Nor should they protest overmuch that infringers intending to do so must meet a heightened burden of proof. Moreover, they should not be sanguine about the prospects for early opposition.

Turning to Jaffee and Lerner’s claim that the Federal Circuit was a bad idea, I’m even more skeptical. Prior to 1982, only two courts had appellate jurisdiction to review PTO decisions directly — the D.C. Circuit and the CCPA. The 1966 report of an expert commission established by President Johnson faulted the latter as too quick to favor applicants. Fearing erosion of a strong presumption of validity, the Johnson Commission recommended that the CCPA be more deferential. It also recommended that the Office be allowed to appeal from the CCPA to the D.C. Circuit. Because that circuit was unlikely to see infringement appeals, I regard the post-1982 situation as an improvement over what was proposed.

If the Federal Circuit, reviewing directly, adopts rules unduly favoring applicants, the consequences must be faced in collateral review. The substantial price paid for that possibility, apparently unappreciated at the time — and perhaps even now, was the dearth of precedents bearing on the many issues that arise only in the latter context.

Beyond that, some things for which Jaffee and Lerner fault the Federal Circuit, e.g., the strength of the validity presumption, preceded its creation. Others, e.g., the role of juries in patent litigation, are best addressed by Congress or by Supreme Court justices who have made a hash of fact-law distinctions in patent law.

If Jaffee and Lerner, with many others, fear that the fox has been set to watch the hen house, they need to re-evaluate their assumptions about the Federal Circuit and the patent bar. Even if the court were inclined to be the handmaiden of that bar, how would it deal with the many internal conflicts manifested by the diversity of amici in the eBay case? How would it deal with the fact that, for many attorneys, patents are both sword and shield?

On balance I am anything but contented with Innovation and its Discontents. Those who share my belief that two relative newcomers have little grasp of key problems, much less meaningful solutions, should not stand silent.

Note: This review was originally published in PatentCafe’s IPFrontLine. Republished with permission.