Rounding Errors in Patent Law

by Dennis Crouch

Astrazeneca AB v. Mylan Pharmaceuticals Inc. (Fed. Cir. 2021)

This case helps show that patent law has arrived at Nerdsville.  Actually, I’ve been here for a while and so welcome to all you newcomers.  In my view, the case also suggests that our claim construction doctrine has gone too far attempting to discern meaning where none exists.  Rather, I would suggest that the issues here are really about infringement rather than claim construction.

The claims require “0.001%” of a formulation be the inactive ingredient PVP K25.  The allegedly infringing formulation is slightly different — lets say 0.0008% — but it is within standard rounding error if 0.001% is seen as having one significant digit (0.0005 to 0.0014).  Mylan argued that 0.001% should be given a narrower range — “the precise number, with only minor variation.”  Mylan’s outcome would result in a range of something like 0.00095 to 0.00104.

The district court sided with the patentee — holding that standard scientific notion indicates that a physical measure such as this includes the rounding error according to the number of significant digits shown. If they had wanted a more precise number, then scientific notation permits the addition of more significant digits — such as 0.0010%.  On appeal though the majority rejected that approach based upon statements from the specification comparing 0.001% against 0.0005% (a value that should be within the rounding error).

Thus, taken as a whole, the intrinsic record supports a narrower construction of 0.001% to reflect that term’s application to the PVP concentration in particular, and the testing evidence in the written description and prosecution history showing that very minor differences in the concentration of PVP—down to the ten-thousandth of a percentage (fourth decimal place)—impact stability.

Slip Op.  The court noted that the patentee could have used the term “about” to extend the range.  Judge Stoll wrote the majority opinion that was joined by Judge Hughes.

Judge Taranto in dissent first noted the uncontested conclusion that the ordinary meaning follows the broader rounding range:

The significant-figure convention for real-world-measurement situations supplies an answer by giving a well-defined interval as the ordinary meaning, in the art, of a statement of a single number like the statement at issue here. Under this ordinary-meaning approach, the significant-figure interval meant by “0.001%” is 0.0005% to 0.0014%, based on rules of rounding and the single significant figure at the third decimal place.

Dissent.

Judge Taranto then argues that the proposed “minor variations” limit creates confusion because it lacks precision.  Of course, we’re talking about rounding and measurement errors here and so they already lack precision.

This video was suggested by a friend as relevant:

Federal Circuit Draws a Hard Line Against “Obvious to Try” Analysis

by Dennis Crouch

Teva Pharmaceuticals, LLC  v. Corcept Therapeutics, Inc., Dockt No. 21-1360 (Fed. Cir. 2021)

This is an interesting pro-pharma obviousness decision coming out of the PTAB regarding obviousness of particular drug dosages.  Here, the particular drug was known to work well, but there were concerns about drug safety.  And, there were a couple of particular tests that clearly would have been obvious to try.  In fact, the patentee was legally required by the FDA to conduct the tests in order to ensure drug safety.  Still, the outcome of the tests were not predictable. Nobody knew whether the particular dosage being was going to turn out to be “safe.” (Here “safe” is interpreted as having “an acceptable risk-benefit profile.”)  The patentee ran the tests, found the dosage to be safe, and then patented a method of administering that safe-dosage to patients.  Teva challenged the patent, but the PTAB and the Federal Circuit both sided with the patentee. They held that the unpredictable outcome of the test meant that the outcome was not obvious since there was no “reasonable expectation of success.”

I expect that the Supreme Court would reject the hard line drawn in this case in the same way that it rejected the TSM requirement in KSR v. Teleflex.  I.e., obviousness is a flexible, open analysis asking “is there an invention here?”  Former Kennedy clerk J.C. Rozendaal handled the appeal for Teva, and so I won’t be surprised to see a petition for writ of certiorari in 2022.

The rest of the story: Corcept’s patent covers a method of treatment of some Cushing’s syndrome  symptoms with the drugs mifepristone and ketoconazole (a “strong CYP3A4 inhibitor”).  U.S. Patent No. 10,195,214.  The basic problem is that these two drugs can interact in problematic ways, and the patent calls for a reduced dose of mifepristone when being taken alongside ketoconazole.  When taken alone, mifepristone is prescribed in dosages of up to 1,200 mg per day; but when taken with ketoconazole, the patent calls for reduction of down to 600 mg per day.

The prior art all comes from earlier interaction between Corcept and the FDA.  Initially, Corcept filed a New Drug Application (NDA) seeking to market mifepristone in dosages of 300, 600, 900, and 1,200 mg per day.  The FDA gave its approval, but suspected interaction with ketoconazole.  That suspicion led to the two key prior art references:

  1. The Korlym Label: The FDA-approved label for Corcept’s original drug product Korlym allowed for dosage of mifepristone at 300, 600, 900, or 1,200 mg increments and also offered a warning against co-administration with a strong CYP3A.  In particular it limited the “mifepristone dose to 300 mg per day when used with strong CYP3A inhibitors.”  Thus, an easy reading of the label seems to be a strong suggestion that dosages of 600, 900, or 1,200 might be problematic.  This label also appears to totally anticipate a dose of 300 mg when taken along with a strong CYP3A inhibitor.
  2. The FDA Suggestion (“Lee”): The FDA also suggested the possibility of interaction between CYP3A and mifepristone and required Corcepts to study that interaction.

When I think about these two references, I see a strong suggestion of an interaction between the drugs, and also a strong motivation to look into that interaction. In fact, the first two research questions implicitly demanded by the prior art is (1) whether a 300 mg dose interacts with CYP3A and (2) whether a 600 mg dose interacts with CYP3A.  Yet, while the two references expressly call for research, the references do not suggest the outcome of the 600 mg test.  If anything, the original label suggested that 600 mg dose would be a problematic — since the FDA limited dosage to only 300 mg if also taking the other drug.

The PTAB followed these lines of analysis and eventually concluded that the references failed to prove obviousness.  In particular, the Board hung its hat on “reasonable expectation of success” — finding that the references did not suggest that 600 mg would be a safe dosage.

On appeal, the Federal Circuit has affirmed — holding that invalidating the claim would require proof of “a reasonable expectation of success in achieving the specific invention claimed, a 600 mg dosage.”

Because there was no expectation of success for any dosage over 300 mg per day, there was no expectation of success for the specific 600 mg per day dosage.

Slip Op.  Affirmed.

Note – Mifepristone is new name for the drug RU-486.

Ski at Vail: January 5-8, 2022 (and talk IP Law)

I’m looking forward to being part of the revitalized Colorado IP&SKI this winter in Vail.  The program is chaired by Scott Alter (Michael Best) and David Bernstein (Debevoise).  I’ll be speaking there along with a bunch of greats — including Judges Chen (CAFC) and Andrews (D.Del); Erika Arner (Finnegan); Dale Cendali (K&E); Deane Maynard (MoFo); and William Jay (Goodwin); David Gooder (Comm’r for TM); and more.

See you there. EVENT LINK.

Venue over Foreign Defendant; and Seeking Rehearing before Mandamus

by Dennis Crouch

In re: accessiBe Ltd., Docket No. 22-113 (Fed. Cir. 2021) (non-precedential)

This mandamus petition has been denied, although the Federal Circuit has suggested that Judge Albright reconsider his denial of venue transfer. [2021.10.29 56 Public Version – Memorandum Opinion]

AudioEye sued accessiBe for patent infringement (US10423709, et al.) as well as claims under the Lanham Act (false advertisement & product disparagement) and under New York State Law (product disparagement, tortious interference, etc).  But, instead of suing in New York, AudioEye sued in W.D. Tex.  The focus here is on screen-reader used to help individuals with disabilities better access the internet.  The software particularly helps to fix non-compliant websites to make them more accessible.

Suing a Non-Resident for Patent Infringement: In TC Heartland, the Supreme Court severely limited the scope of “proper venue” in patent cases.  Generally, the patentee can only sue a defendant in either (1) its state of incorporation or (2) some venue where it has a regular-and-established place of business.  These limitations stem back more than 100 years, and the “limitation” offered in TC Heartland might be more properly seen as a rejection of venue-expansion by the Federal Circuit.  One gap in the Supreme Court’s analysis in TC Heartland is how to treat foreign companies.  The answer though is pretty clear under Brunette Machine Works, Ltd. v. Kockum Industries, Inc., 406 U.S. 706 (1972).  In Brunette, the Supreme Court held that the more-expansive rules of the general law (Section 1391) apply when the defendant is not a US entity.  In particular, the statute states plainly that venue is proper in any judicial district:

(3) a defendant not resident in the United States may be sued in any judicial district …

28 USC 1391(c)(3).  Obviously, the court must also satisfy the constitutional requirement of personal jurisdiction.  And, the defendant may also pursue a change-of-venue based upon inconvenience under 28 USC 1404(a).

Motion to Transfer: accessiBe moved to transfer the case to W.D.N.Y. as a “clearly more convenient forum” under section 1404(a).   But, the statute only permits transfer to a venue where the case “might have been brought.”  In his decision, Judge Albright concluded that the movant had not shown personal jurisdiction was proper in NY state court — and therefore denied the transfer motion.  The mandamus motion indicates that neither party had argued that particular issue and instead that Judge Albright had “go[ne] out of [his] way to contrive a basis for denying accessiBe’s request for a transfer.” [Petition for Mandamus]

The Federal Circuit has now denied the mandamus petition, but has suggested that the petitioner first request reconsideration from the district court:

To obtain mandamus relief, this court must be satisfied that a petitioner has no “adequate alternative” means to obtain the desired relief. Mallard (1989). Here, we cannot say that it would be futile for accessiBe to ask the district court to first reconsider its decision in light of its arguments. We therefore deny the petition without prejudice to refiling after accessiBe first asks the district court for reconsideration. Any new petition for a writ of mandamus from the district court’s ruling on reconsideration will be considered on its own merits.

Slip Op.

Personal Jurisdiction: At the district court, the defendant had also argued for dismissal of the non-patent claims for lack of personal jurisdiction.  A court needs personal jurisdiction over the parties before moving forward.  Due process fails absent personal jurisdiction — and that’s a Constitutional violation.   The Supreme Court has offered three paths for finding personal jurisdiction in a court housed in a particular state: (1) waiver (the plaintiff is generally thought to waive personal jurisdiction by filing the lawsuit; defendants also waive by not immediately complaining); (2) general jurisdiction (defendant is truly resident in the jurisdiction); or (3) specific jurisdiction (the actions that led to the cause-of-action are directed to the state).  Here, the theory is specific jurisdiction.

Specific jurisdiction over the patent claims is easier to show. The defendant has Texas-based customers and is alleged to infringe the patent by providing services to those folks.  In other words, intentional infringement of the patent in TX ==> personal jurisdiction over the patent claims in TX.

The difficulty though with specific jurisdiction is that we also look at specific jurisdiction on a claim-by-claim basis. The defendant argues that the NY State claims are based upon actions that are somewhat separate from just selling software (alleged tortious interference activity beyond just selling software).   Still, Judge Albright found that “accessiBe’s website is sufficient to establish specific personal jurisdiction over accessiBe in Texas” with regard to most of the Lanham Act claims. The court then decided to exercise “pendent personal jurisdiction” over the New York state law claims since they “share a common nucleus of operative fact.”  The defendant did not petition for mandamus on the personal jurisdiction questions and so that issue appears dead until a post-judgment appeal.

 

Easy Patent law Quiz for 2021:

You should be able to easily answer these questions: 

Prof. Crunch stays fit with his rebounder (a mini-trampoline).  These already exist, but Crunch has designed a new model that includes a handle (for stability) and also a touchscreen control that can be used to stream audio/video instructions.  (These are shown in the figure below). He plans to sell a higher end model that includes displaying the bouncing-tempo on the screen and also energy-exerted (using movement-sensors in the rubber-bands or springs).

Crunch recently filed a utility patent application (February 2021) with the USPTO seeking to patent the following two claims:

1. An exercise apparatus comprising: 
  a mini-trampoline; 
  a support handle secured to the mini-trampoline that includes a grip-bar; and
  a touch-screen electronic device attached to the support handle and configured with software for displaying real-time exercise instructions. 

2. The apparatus of claim 1, further comprising motion sensors attached to the mini-trampoline and configured to provide data to the touch-screen electronic device and wherein the touch-screen electronic device is configured to use the data provided to calculate and display energy-exerted by a user in real-time.

Crunch admits that all of the elements of his invention were individually available in the prior art.  In particular, mini-trampolines with handles were already available, as were touch screens for displaying real-time instructions. Likewise, motion sensors are available, as well as algorithms for calculating energy use while trampolining.  However, he has not seen any prior art that combines everything together in this particular way.

Question 1. (100 words) Are Crunch’s claims directed toward eligible subject matter?

Question 2. (80 words) Provide a concise argument why the USPTO should reject claim 1 as indefinite.

Question 3. (300 words) Based upon what you know so far, do Sections 102 or 103 create any hurdle to patentability?

Question 4. (100 words) Five years later … Crunch has obtained his patent exactly as claimed above and business is booming.  Crunch recently found that GummyBearCo is selling a product that he thinks is infringing his claim 1. The only differences are that (1) it is a large 15-foot trampoline and (2) there is no “handle” per se. Rather, the screen is simply mounted to a pole at the edge of the trampoline. Also, although the GummyBearCo product is sold in the USA, it is actually manufactured in China. Can he prove infringement?

COVID Patents at the Federal Circuit (Moderna Loses)

by Dennis Crouch

Moderna Therapeutics v. Arbutus BioPharma (Fed. Cir. 2021) (20-1184 Decision) (20-2329 Decision)

Arbutus owns several patents related to a lipid-based delivery system for nucleic-acid-based treatments.  U.S. Patent 8,058,069 and 9,364,435 are the two at issue here. The claims are directed to the creation of a “acid-lipid particle” that includes some RNA along with lipids to stabilize the sequence, including particular percentages of cationic lipids, non-cationic lipids, and conjugated lipids.

COVID: If you have been following the news, you know that the COVID-19 vaccines distributed by Moderna and Pfizer deliver mRNA to the cells using lipid nanoparticles.  Although Arbutus has apparently not threatened Moderna with an infringement action, it has apparently requested a broader license agreement and refused to issue a covenant-not-to-sue.  Moderna recognizes “a substantial risk” that Arbutus will assert the patents in an infringement lawsuit “targeting Moderna’s COVID-19 vaccine.”

Pre-COVID: Moderna had been working on mRNA delivery systems and had previously licensed the patents for research work using a milestone payment scheme.  Moderna challenged the patents via IPR in 2018 and 2019 so that it could use the inventions without royalty payments or other reporting.  IPR2018-00739;  IPR2019-00554. This was all before COVID, but the risk and value have ramped-up exponentially.  The PTAB granted the IPR petitions but substantially sided with the patent holder:

  • ‘069 patent — all claims confirmed (not proven invalid); and
  • ‘435 patent — claims  7–8, 10–11, 13, and 16–20 are confirmed; Claims 1–6, 9, 12, and 14–15 invalid as anticipated.

The parties appealed their respective losses, and the Federal Circuit has now affirmed on all grounds — although a portion of its decision is a procedural shortcut.  Because the patents were left largely intact, we have a good likelihood of further litigation between these parties over the patents (or else a new license in the background). 

The basic idea here is that this area of innovation is extremely tricky and unpredictable.  Thus, although the “general conditions for a nucleic acid-lipid particle were disclosed in the prior art,” the particular claimed lipid profile would not “have been achievable through routine optimization.”

Standing to Appeal: It is pretty clear that at this point the post-COVID relationship between the parties is such that Moderna has standing in court to challenge these patents.  However, as I mentioned, the IPRs were filed pre-COVID and the 2018 IPR was appealed in November 2019 — well before Moderna had an inkling that it would be making a COVID-19 vaccine.  The problem for Moderna here is that the appellate court can only hear cases involving an “actual case or controversy” between the parties.  And, that actual case-or-controversy must persist throughout the entire appeal (from beginning to end).  What Moderna needs to show is that the patent served as a concrete and immediate threat as of that November 2019 date.   I mentioned that there was a license agreement, but the court found that any payments due under that agreement too speculative to generate standing since – at the time – Moderna was not actually doing the planned research.  Further, the patentee (at the time named Protiva) “emphasized that it had never initiated a patent infringement action or directly accused Moderna of infringing its patents.”

Things had changed dramatically by the time Moderna filed its opening brief in May 2020.  But, as I mentioned, courts require continuous standing throughout a lawsuit, and it just wasn’t there in November of 2019.  The result then is that Moderna was not permitted to appeal its loss in the ‘435 case.

 

Question Presented: Is Parker v. Flook Still Good Law?

Yu v. Apple (Supreme Court 2021)

A new petition for certiorari asks the court whether Parker v. Flook, 437 U.S. 584 (1978) is still good law.

Quick answer from Crouch: Yes, it is still good law.

Flook is a divide-and-conquer case that looks a lot like the Alice test itself. The claims were directed setting of “alarm limits” for a catalytic conversion process and the court identified the only novel feature to be a mathematical formula.  The mathematical formula was an abstract idea, and thus offered no patentable weight.  And, the remaining features were admittedly known in the art.

Respondent’s process is unpatentable under § 101 not because it contains a mathematical algorithm as one component, but because, once that algorithm is assumed to be within the prior art, the application, considered as a whole, contains no patentable invention.  Thus, the claim as a whole was ineligible.  Although the court recognized that it had disected the claim into component parts, it also concluded that this approach still took the claim “as a whole:”

Our approach [is] not at all inconsistent with the view that a patent claim must be considered as a whole. Respondent’s process is unpatentable under § 101 not because it contains a mathematical algorithm as one component, but because, once that algorithm is assumed to be within the prior art, the application, considered as a whole, contains no patentable invention. Even though a phenomenon of nature or mathematical formula may be well known, an inventive application of the principle may be patented. Conversely, the discovery of such a phenomenon cannot support a patent unless there is some other inventive concept in its application.

Id.  To be clear, the Federal Circuit treated Flook as effectively repudiated by Diamond v. Diehr, 450 U.S. 175 (1981), but that was apparently never the view of the Supreme Court. I should note here the actual question presented is as follows:

Whether, when applying the test for patent eligibility set forth in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012), a patent claim should be considered “as a whole” in accordance with Diamond v. Diehr, 450 U.S. 175 (1981), or instead, whether all conventional elements of the claim must be disregarded prior to determining its “point of novelty” as set forth in this Court’s older precedent in Parker v. Flook, 437 U.S. 584 (1978).

Read the petition here: 20211129141853759_USSCPetitionforWritofCertiorari.

 

Biden Patent Nominees

On December 1, 2021, the Senate Judiciary Committee held a hearing on two of President Obama’s Biden’s patent related nominees:

  • Judge Leonard P. Stark — Nominated to be a Circuit Judge on the the Court of Appeals for the Federal Circuit.
  • Katherine Vidal — Nominated to be Director of the USPTO and Undersecretary of Commerce for Intellectual Property.

Both nominees have substantial experience handling patent cases. Stark as a district court judge in the patent-heavy district of Delaware (2000+ patent cases) and Vidal as a patent attorney and patent litigator in Silicon Valley.  And, importantly, I expect both nominations  will be swiftly confirmed by the Senate, although Judge Stark will not be seated until after Judge O’Malley retires in March 2022.  Vidal’s testimony offered some clues, suggesting that she may consider rolling back some of the pro-patentee procedural changes to IPRs implemented by Dir. Iancu. But, as is usual with nomination hearings today no concrete details were provided.

Watch it here: https://www.judiciary.senate.gov/meetings/11/24/2021/nominations

 

 

Trees for the Forest: Claiming Endpoints of a Range and Written Description

by Dennis Crouch

In his 1967 Ruschig decision, Judge Rich applied a colorful woodsman metaphor to the written description requirement:

It is an old custom in the woods to mark trails by making blaze marks on the trees. It is no help in finding a trail or in finding one’s way through the woods where the trails have disappeared—or have not yet been made, which is more like the case here—to be confronted simply by a large number of unmarked trees. Appellants are pointing to trees. We are looking for blaze marks which single out particular trees. We see none.

In re Ruschig, 379 F.2d 990, 994–995 (C.C.P.A. 1967).

In Biogen Int’l GMBH v. Mylan Pharma Inc. (Fed. Cir. November 30, 2021), the Federal Circuit has extended that metaphor and found Biogen’s patents invalid for lack of written description.  In the case, Judge Keeley (N.D.W.Va.) held a bench trial and concluded that the asserted claims Biogen’s MS treatment-method patent invalid for lack of written description.  On appeal, a divided Federal Circuit then affirmed, with Judge Reyna penning the majority opinion joined by Judge Hughes, and Judge O’Malley writing in dissent.

Biogen’s U.S. Patent 8,399,514 covers a method of treating multiple sclerosis using the drug dimethyl fumarate (DMF). The claimed method has one step: administering about 480 mg of DMF per day along with an excipient.  Claim 1 is reprinted below:

1. A method of treating a subject in need of treatment for multiple sclerosis comprising orally administering to the subject in need thereof a pharmaceutical composition consisting essentially of (a) a therapeutically effective amount of dimethyl fumarate, monomethyl fumarate, or a combination thereof, and (b) one or more pharmaceutically acceptable excipients, wherein the therapeutically effective amount of dimethyl fumarate, monomethyl fumarate, or a combination thereof is about 480 mg per day.

‘514 patent.

The question in the case is whether the dosage requirement (~480 mg/day) was sufficiently disclosed in the original specification so that it can be specifically claimed.  For this type of analysis, the courts look to the Written Description requirement as one way to ensure that a patent’s exclusive rights are commensurate with what was actually invented.  The doctrine requires that the patent application show “possession of the invention” as judged from the perspective of a person of skill in the art considering the entire original specification, including “words, structures, figures, diagrams, formulas, etc.”  Lockwood v. Am. Airlines, Inc., 107 F.3d 1565, 1572 (Fed. Cir. 1997).  Originally filed claims are seen as part of the specification, and so most often it is sufficient to show that claim limitations were found in the original application.  But seeAriad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336 (Fed. Cir. 2010) (en banc) (original claims can still fail). Despite Ariad, we most often see the power of written description in situations where the claims have been amended to add some limitation that is not clearly expressed in the original specification.

Here, for prior art purposes, the patentee needs to claim priority back to its original provisional application filed back in 2007.  That original application is focused on use of DMF for a variety of neurological conditions, including MS and did not include the ~480 mg/day limitation within any of the included claims.

The ~480 mg/day dosage is listed once in the original specification, describing an effective dose of DMF without particularly specifying that the dosage is for MS.

For example, an effective dose of DMF … can be from about 0.1 g to 1 g per pay, 200 mg to about 800 mg per day (e.g., from about 240 mg to about 720 mg per day; or from about 480 mg to about 720 mg per day; or about 720 mg per day). For example, the 720 mg per day may be administered in separate administrations of 2, 3, 4, or 6 equal doses.

On appeal, the majority classified the disclosure of 480 mg/day as a “sole reference . . appear[ing] at the end of one range among a series of ranges.”  The court contrasted the 480 mg/day disclosure with the specification’s disclosure of 720 mg/day that was specifically identified and elsewhere in the patent shown to be effective.  The inventor also provided testimony that those ranges in the specification could not be extrapolated to a clinical dose.  Based upon all of this, the court affirmed that “a skilled artisan would not have recognized, based on the single passing reference to a DMF480 dose in the disclosure, that DMF480 would have been efficacious in the treatment of MS, particularly because the specification’s only reference to DMF480 was part of a wide DMF dosage range and not listed as an independent therapeutically efficacious dose.”

Biogen later established that the 480 mg/day was effective, but by then prior art was already available and so a new application would have been ineffective.

In a recent decision, the Federal Circuit ruled that written description failed for a claim covering a range of values since the specification only disclosed several points within the range. Indivior UK v. Dr. Reddy’s Labs (Fed. Cir. 2021).  This case is a flip-side — the specification discloses a range, and the court rules that, without more, written description also fails for a claim directed to an endpoint of the disclosed range.

Writing in dissent, Judge O’Malley focused on a separate district court error that, she concludes, tainted its written description analysis.  In particular, the district court applied the doctrine of judicial estoppel to bar the patentee from distinguishing from clinical efficacy (required for FDA approval) and therapeutic effect (as claimed in the patent).   O’Malley concludes that the district court’s analysis erroneously focused on requiring a showing that 480 mg/day was clinically effective and that improperly resulted in invalidity.

Genus-Species in Trademark Law Usage

Brittex Financial v. Dollar Financial (Fed. Cir. 2021)

This is a trademark case. Dollar Financial holds registered trademarks for MONEY MART – the name it uses for its payday and title loan venders as well as pawn shops and pawn brokerages.  The company had been using the name for several years in the payday loan business, and in 2012 expanded into pawn shops and then filed for registration for that usage in 2013.  The USPTO then granted the registrations associated with the new uses.

Brittex had been using its own version of the mark on its south-Texas pawn shops since the early 1990s: MONEY MART PAWN.  In 2015, Brittex petitioned for cancellation of the mark based upon the likelihood of confusion between the two marks.  In particular, Section 2(d) of the Lanham Act bars registration of a mark that:

so resembles . . . a mark or trade name previously used in the United States by another and not abandoned, as to be likely, when used on or in connection with the goods of the applicant, to cause confusion, or to cause mistake, or to deceive.

15 U.S.C. § 1052(d).

There is no question that these marks are confusing vis-à-vis one another. They are virtually identical and associated with identical services.

The dispute in the case is about priority.  Dollar was the first user of the mark, albeit only in the payday loan and loan financing sphere. Dollar holds an incontestable mark in that area.  On the other hand, Brittex was the first to use the mark in the pawn business.

In its decision, the TTAB sided with Dollar — holding that pawn shop services are “covered or encompassed by loan financing.”  The Board reasoned that a major aspect of the pawn business is making collateralized loans.  That expansive reading of financial services meant that Dollar’s prior use and registration served as direct priority for the new pawn-shop registrations.

On appeal, the Federal Circuit rejected the TTAB’s conclusions — holding that the TTAB went too far in creating new law.  In particular, the court found that the registration of a mark generally covering a broad category (genus) of uses did not necessarily establish priority over a specific (species) use covered by the broad category.   The TTAB provided no “sound legal basis” for a conclusion “that a registrant has priority as to a specific service it was second to offer just because it was first to offer a different specific service that is a species of a genus that covers both specific services.”  Further, even if a genus does provide coverage, that does not necessarily mean that the genus holder has rights to register a specific species over a competitor’s prior use.

The court also rejected the Board’s factual finding of overlap.  While there certainly is some overlap, the court found no support for complete overlap — that all pawn shop business is a form of loan financing.

On remand, Dollar might still win the case based upon a separate argument not yet decided by the TTAB. In particular, there is a separate doctrine of “natural expansion” that can also permit a priority claim for an earlier similar use.

Written Description: Four Points Are Not A Range

This is an important written description case involving ranges, and highlights a tension within the court over when special disclosure is required within the specification.

Indivior UK v. Dr. Reddy’s Labs (Fed. Cir. 2021)

IPR challenges are limited only to obviousness and anticipation arguments, and so a patent cannot be directly challenged via IPR for lack of enablement or written description. However, Section 112(a) issues do arise in situations where the challenged patent purports to claim priority back to a prior filing.  The priority claim fails if the earlier filing fails to support the challenged claims, and this permits  assertion of intervening prior art.

Dr. Reddy challenged Invidior’s U.S. Patent 9,687,454 via IPR. The patent claims priority to a chain of prior applications:

  • The ‘454 patent is a continuation of application No. 14/715,462, filed on
    May 18, 2015, now abandoned;
  • The ‘462 Application is a continuation of application No. 14/478,786, filed on
    Sep. 5, 2014, now abandoned;
  • The ‘786 Application is a continuation of application No. 13/964,975, filed on Aug. 12, 2013, now abandoned;
  • The ‘975 Application is a continuation of application No. 13/923,749, filed on Jun. 21, 2013, now abandoned;
  • The ‘749 Application is a continuation of application No. 12/537,571, filed on Aug. 7, 2009, now Pat. No. 8,475,832.

The challenged patent covers a sublingual film containing some drug treatment.   The claims include several different limitations regarding the amount of polymeric matrix used for the film.

  • Claim 1: “about 40 wt % to about 60 wt % of a watersoluble polymeric matrix”;
  • Claims 7 & 12: “about 48.2 wt % to about 58.6 wt %”; and
  • Claim 8: “about 48.2 wt %”;

The problem though is that the original specification does not recite any of these amounts or ranges directly. The specification does include two tables that collectively include four examples that, when calculated-out, all fall within the range of 48.2-58.6%.  However, that calculation process is not express in the specification and the specification does not note particular reason why the particular endpoints form a “range.”  On appeal, the court agreed with the PTAB that “written  description support of a claimed range” requires “more clarity.”

Here, one must select several components, add up the individual values, determine the aggregate percentages, and then couple those aggregate percentages with other examples in the ’571 application to create an otherwise unstated range. That is not a written description of the claimed range.

Slip Op. The court also notes that the specification provided no additional support for particular ranges and instead indicated that “[t]he film may contain any desired level of . . .polymer” and that in one embodiment it is “at least 25%.”

[The patentee] failed to provide persuasive evidence demonstrating that a person of ordinary skill would have understood from reading the ’571 application that it disclosed an invention with a range of 48.2 wt % to 58.6 wt %. A written description sufficient to satisfy the requirement of the law requires a statement of an invention, not an invitation to go on a hunting expedition to patch together after the fact a synthetic definition of an invention. “[A] patent is not a hunting license. It is
not a reward for the search, but compensation for its successful conclusion.” Brenner v. Manson, 383 U.S. 519, 536 (1966).

Slip Op. Although the ranges were not supported, the court did find sufficient evidence to affirm the PTAB’s determination that the individual point of “about 48.2 wt %” was supported by the original specification: “given that claim 8 does not recite a range, but only a specific amount, which can be derived by selection and addition of the amounts of selected, but identified, components, we accept that there is substantial evidence to support the Board’s decision concerning claim 8.”  Without that priority, the claims were clearly invalidated by prior art published between 2009 and 2015.

The majority opinion was filed by Judge Lourie and joined by Judge Dyk.

Judge Linn wrote in dissent, arguing that the majority’s approach creates “an overly demanding standard for written description of ranges” and is contrary to cases such as In re Wertheim, 541 F.2d 257 (C.C.P.A. 1976) and Nalpropion Pharms., Inc. v. Actavis Labs. FL, Inc., 934 F.3d 1344 (Fed. Cir. 2019).  The majority had recognized the value of those precedents, but argued that written description is an intensely fact intensive question.

 

Recoveries in Patent Suits

A patent right is the only property which can be trespassed upon without the owner’s knowledge, in every part of the country, by an innumerable number of trespassers at the same time. The owner can neither watch it, nor protect it by physical force, nor by the aid of the police or of the criminal law. He thus necessarily requires more efficient civil remedies than those do the protection of whose property does not depend upon civil remedies alone.

James Storrow, Money Recoveries in Patent Suits, 13 American Law Review 1 (1879).

 

Guest Post: Design Protection and Functionality: Does the PTO or the Copyright Office Apply a More Rubbery Stamp?

Guest post by Peter S. Menell, Koret Professor of Law; Director, Berkeley Center for Law & Technology; Faculty Director, Berkeley Judicial Institute; University of California at Berkeley School of Law, and Ella Corren, University of California at Berkeley School of Law, J.S.D. Candidate

In Design Patent Law’s Identity Crisis, presented at the Berkeley Center for Law & Technology’s February 2021 “Design Patents” symposium, we traced the origins of design patent law’s ornamentality/non-functionality doctrine and showed how the Federal Circuit, the nation’s de facto design patent emperor over the past four decades, has turned the doctrine on its head: it has upended the 1902 Act’s intent and reversed three-quarters of a century of regional circuit jurisprudence. So much so that the post-1902 Act regional circuit design patent cases invalidating design patents on functionality grounds would come out oppositely under the Federal Circuit’s lax standards. Those standards led to the absurd result that Apple could disgorge Samsung’s profits on its smartphones because they employed rounded rectangular shapes. We showed that the Patent Act limited design protection to original, ornamental articles of manufacture, and excluded protection for functionality.

BCLT invited practitioners and academics to comment on our analysis. While none of the commentators questioned, no less refuted, our core finding that the Federal Circuit has flipped the ornamentality/non-functionality doctrine, several offered fig leaves to clothe the Federal Circuit’s lax standards for design patent eligibility and infringement. In responding to our article, practitioner Perry Saidman and Professor Mark McKenna suggested that the design patent regime can be justified in part based on the tighter functionality screen that the PTO applies to design patents than the low threshold that the Copyright Office applies to copyright registrations to useful articles.

We found the suggestion that the PTO is more rigorous than the Copyright Office in applying the functionality screen intriguing and decided to test it out: Does the PTO or the Copyright Office apply a more rubbery stamp?. This commentary presents some of our findings.

Before turning to some illustrations, we note that the Compendium of U.S. Copyright Practices, in contrast to the Manual of Patent Examining Procedure, implements limiting doctrines in relatively clear and concise terms. As regards originality, the Compendium states that copyright law does not protect “words and short phrases,” “familiar symbols and designs,” “mere variations of coloring,” spatial format and layout design, blank forms, and common geometric shapes, either in two-dimensional or three-dimensional form.” The Patent Office applies no such limitations, notwithstanding that the design patent statute specifically requires that articles of manufacture be original to obtain design patent protection.

Turning to our findings, we begin with Universal Robots’ “UR5” robot arm. In 2015, it sought copyright registration of this useful article as a sculptural work.

The Copyright Office refused registration on the ground that UR5 “is a ‘useful article’ which does not contain any separable authorship.” Universal Robots appealed the decision to the Copyright Office, arguing that the UR5 contains conceptually separable artistic elements that are not necessary to its performance of its utilitarian function, namely its “raised circular caps containing the stylized ‘UR’ design,” and the ‘“T’ shaped, modular interlocking wrist.” The Copyright Office affirmed its rejection, explaining that the UR5 “does not contain any separable, copyrightable features” because “the caps and wrist of the arm are both integrated parts of the ‘overall shape’ of the arm.” In September 2016, Universal Robots filed a second appeal for reconsideration, in which it contended that since the blue caps are “capable of being physically removed from the robotic arm without altering the useful aspects of the article,” and “are not necessary to the utilitarian functioning of the device,” they are “conceptually separable, artistic and protectable.” Universal Robots also asserted that the T-shaped piece was “designed to achieve a sleek, modem and aesthetically pleasing appearance,” is “not necessary to the utilitarian function of the article,” and could have been designed in many other ways, rendering this part protectable as well. Universal Robots claimed that these elements of the Work “embody more than the mere ‘modicum’ of creativity that is required for copyright registration,” highlighting that the designers are Danish and inspired by the Danish Modem movement.

In rejecting the second appeal, the Copyright Office concluded “that the elements Universal Robots identifies as expressive—namely the plastic caps and the T-shaped piece—could be visualized as works of authorship separate and independent from the Work’s utility.” And that “[e]ven if those features could be deemed separable, however, they simply are not sufficiently original to warrant copyright protection.”

Universal Robots then filed a design application for the UR5 in January 2020. See U.S. Design Patent No. D915,487 (Apr. 6, 2021). The Patent Office granted the design patent in April 2021.

Robotic arms with similar functional configuration have long been the subject of utility patents. See, e.g., U.S. Patent No. 4,273,506 (Jun. 16, 1981) (“Industrial Manipulator for Placing Articles in Close Proximity to Adjacent Articles”).

This pattern of copyright registration refusal/design patent grant is a common occurrence. In another poignant example, the Copyright Office declined registration for the Purple® pillow, concluding that the overall shape of the pillow—featuring an interior grid of hollow triangles—is unprotectable and not capable of conceptual separation from the useful article. The Copyright Office explained that the triangles have an “intrinsic utilitarian function” and thus are useful articles themselves,” noting that Purple’s marketing materials make “clear that these triangles are wholly utilitarian,” including that the Work’s “hundreds of little triangles . . . give the core of the pillow lateral strength so it retains its oh-so supportive, head-cradling comfort all night” and emphasizing the word ‘SCIENCE!’ in all capital letters; and “[e]ven if the grid of triangular prisms was not functional, however, it would not be a basis for copyrightability. The Copyright Office’s refusal to register quoted the Compendium of U.S. Copyright Practices: ‘The Copyright Act does not protect common geometric shapes’ including triangular prisms.”

Nonetheless, the design patent application for the Purple Pillow sailed through the Patent Office. See U.S. Design Patent 909,790 (Feb. 9. 2021) (“Pillow”).

The design patentee continues to emphasize the ergonomic advantages of its pillow design: “Unique to the Purple Harmony Pillow, the Deluxe Hex Grid is specially formulated and engineered for head and neck support. The soft hexagon-shaped air channels optimize the dynamic response and airflow for unbelievable comfort.”).

We explore these and other examples in The Design Patent Emperor Wears No Clothes: Responding to Advocates of Design Patent Protection for Functionality.

These minimalist designs raise serious functionality and originality concerns. They demonstrate the rubber stamp quality of the Patent Office and that the design patent system as currently administered results in significant overprotection of functional features and designs. And even though design patents have “only” 15 years of duration, that length of time can be an eternity in some design markets and substantially diminish competition. The utility patent supremacy/channeling principle is about preserving competition in exactly the same way as trademark’s functionality doctrine—the channeling of functionality protection exclusively to utility patents is meant to subject all other, not sufficiently innovative, functional features to unimpeded market competition.

Mandamus Monday

Four new mandamus orders from the Federal Circuit stemming from Judge Alan Albright’s court in Waco Texas.

  • In re Apple, 21-181 (Fed. Cir. Nov 15, 2021).  Abuse of discretion to deny transfer motion. No significant ties between the action and the W.D.Tex.  Apple does have thousands of employees in the district, but the key employees related to the infringement are not in the district.
  • In re Altassian Corp., 21-177 (Fed. Cir. Nov 15, 2021). Abuse of discretion to deny transfer motion even though defendant is from Australia and has a major Austin Office.  None of its employees who work in Austin, Texas possess unique knowledge about the accused products.
  • In re Google, 21-178 (Fed. Cir. Nov 15, 2021). Abuse of discretion to deny transfer motion even though defendant maintains a major office in Austin.  None of its Austin employees were involved with developing the accused functionalities.
  • In re Merkai Integrated Circuit (21-180).  Mandamus was moot, Judge Hughes wrote separately to chastise Judge Albright’s orders.  This case is interesting — can a defendant request transfer, but reserve the right to argue that the new court lacks personal jurisdiction?

Moot Court: Aka Spinning Class at the Law School

by Dennis Crouch

We do a moot court competition every year in my basic patent law course at the University of Missouri.  The students just submitted opening briefs. Responsive briefs are due over the weekend, and oral arguments will be held next week on the 16th and 17th of November. It is a fun capstone for the course, although it is some amount of work for the students.  Folks at McKool Smith have provided some funding and so the winner receives a nice $1,000 check.

[I could use a few more judges — you can sign-up via doodle; or contact my Teaching Assistant Homayoon Rafatijo]

This year’s case is based directly on Judge Gilstrap’s recent patent eligibility decision in  Mad Dogg Athletics v. Peloton Interactive (E.D. Tex. Sept. 15, 2021).   Mad Dogg was the originator of the indoor Spinning market back in the early 1990s (it owns the registered TM on SPINNING and SPINNER).

In the 2000s Mad Dogg entered a new marked for video-led home-indoor cycling and also created its new spinning bicycle that incorporated a touch-screen display and controller.  The patents at issue here cover this new development (2005 priority filing date; 9,694,240 and 10,137,328).   In 2014, Peloton released its own competitor product and has built-up a multi-billion-dollar product line.

In December 2020, Mad Dogg sued in E.D. Tex.  Peloton responded with a 12(b)(6) motion to dismiss for failure to state a claim — arguing that the claimed inventions were improperly directed toward an abstract idea.  And, the district court agreed – dismissing the case.  The court particularly concluded that the claims are directed to the abstract idea of “providing instruction for an exercise bike class.” Regarding Alice Step 2, the court did not actually determine whether the claims recite a sufficient inventive concept, but still dismissed the case — holding that the plaintiff did not plead “enough facts … to avoid a Rule 12(b)(6) dismissal.”

In the real case, Judge Gilstrap dismissed without prejudice–providing Mad Dogg with the opportunity to refile a complaint that asserting additional facts regarding Alice Step 2.  However, I modified the order for our moot court so that the dismissal is with prejudice, thus setting up the appeal. [Read the Case File Here].  In order to facilitate our quick timeline within class, I announced the issues by fiat and required both appellants and appellees to file their briefs simultaneously.

The parties have agreed to limit the appeal to two questions:

  1. Whether the district court erred by placing the burden on the patentee to affirmatively show patent eligibility.
  2. Whether the district court erred by finding that the patentee had failed as to patent eligibility under 35 U.S.C. 101.

As you think about this case, consider claim 1 of the ‘240 patent:

1. An exercise bike, comprising:

a frame that is configured to allow a rider to ride in sitting and standing positions;

a direct drive mechanism that couples a pedal assembly and a flywheel and that facilitates a smooth transition between sitting and standing positions;

a set of handlebars that is coupled to the frame and that provides the rider with at least one hand position;

a mechanism that provides resistance to the flywheel and that is manually adjustable by the rider to vary the pedaling resistance;

a computer that is coupled to the stationary bike, that is configured to connect with the internet or other computer network to access a collection of exercise routines, wherein the exercise routines include instructions regarding cadence, pedaling resistance, and riding positions including sitting and standing positions, and that stores power exerted by the rider;

a display that is coupled to the computer, that displays an exercise routine from the collection of exercise routines so that the rider is provided with instructions for the rider to manually adjust pedaling resistance, and instructions for the rider to vary cadence and riding positions including sitting and standing positions, thereby simulating an instructor-led exercise class, and that displays power exerted by the rider; and

an input device that is coupled to the computer and that enables the rider to input data into the computer.

What do you think of this case? Any thoughts on how you might argue the appeal? Thanks!  Crouch.

Venue: Out of Texas

In re Quest Diagnostics (Fed. Cir. 2021)

Ravgen sued Quest in W.D. Texas for infringing two patents covering pre-natal genetic tests. As the map shows below, Quest has dozens of “places of business” open within the Western District (Waco and Austin areas) where Quest was selling the services.  So, venue was proper under the narrow venue statute for patent cases, Section 1400(b).  Likewise, the court has personal jurisdiction over the defendant with Quest’s Texas-based operations allowing for specific jurisdiction under the minimum contacts test of International Shoe.   But, even when jurisdiction and venue are proper, they may still be inconvenient.

Here, the Federal Circuit has again ordered Judge Albright to release this case and transfer it to a more convenient venue of the Central District of California.  The basic issue is that Quest designed and developed the tests in C.D. Cal., and it uses those same labs to actually conduct the genetic test.  Quest’s primary argument for keeping the case in Waco is that there are already three other cases before Judge Albright involving the same two patents (Ravgen vs PerkinsElmer, vs. Natera, and vs. LabCorp).

The parties did not point to any non-party witnesses, but Quest did point to the long travel time from C.D.Cal., to Waco, and the Federal Circuit indicated that the district court should have placed more weight on that factor and also erred by not considering travel convenience in a more wholistic manner.

In his order, Judge Albright had noted that his familiarity with the patents at issue and his push for quick trial weighed heavily in favor of keeping the case in Waco.  However, the appellate panel found that Albright should not account for any of his familiarity learned after Quest filed its motion for transfer.   In addition, the Federal Circuit restated a prior holding that “it is improper to assess the court congestion factor based on the fact that the Western District of Texas has employed an aggressive scheduling order for setting a trial date.”  Quoting Juniper.

Transfer ordered.

H. R. 5874: Restoring America’s Leadership in Innovation Act of 2021

Rep Massie (R-KY) along with three republican co-sponsors has introduced a new pro-patent-holder legislative proposal. [LINK]

Elements of the proposal:

  1. Restore a first-to-invent system and one-year grace period: “a person shall be entitled to a patent where the inventor is first to conceive of the invention and diligently reduces the invention to practice.”  This includes substantial reversion of Section 102 to its pre-AIA status.
  2. Abolish Inter Partes Review and PGR: “Chapters 31 and 32 of title 35, United States Code, are repealed.”
  3. Allow for civil actions to demand patent rights from the USPTO in any district court.
  4. End Fee-Diversion of USPTO Revenue.
  5. Abrogation of Alice, Mayo, Bilski, and Myriad “to ensure that life sciences discoveries, computer software, and similar inventions and discoveries are patentable, and that those patents are enforceable.”  This includes statutory revision of Section 101.
  6. Expressly establishing a patent as a private property right: “A patent right is a private property right secured to an inventor upon issuance of the patent that shall only be revoked by a court ruling in a judicial proceeding, unless the patent owner consents to an administrative or other procedure.”
  7. End Automatic publication of patent applications.
  8. Patent term tolled during any period of patent validity challenge.
  9. Patent infringement judgment presumptively results in an injunction.
  10. Best mode reestablished as an operative condition of patentability.

What are your thoughts on these proposals?

 

 

 

Dann v. Johnston, 425 U.S. 219 (1976): Invention as the Absolute Prerequisite to Patentability

In the past 50 years, the Supreme Court has decided about 70 patent cases (depending upon how you count).  One of the least cited is the 1976 case of Dann v. Johnston, 425 U.S. 219, 225 (1976). The case was set-up as a showdown on questions of patent eligibility in the “highly esoteric field of computer technology.”  Id. But, in the end, the court focused on the more mundane question of obviousness — a doctrine it continued to refer to as “invention.”

Johnston was seeking to patent a “record-keeping machine system for financial accounts.”  Basically, this was software installed on a bank-owned IBM 1400 that allowed its customers to categorize their income and expenses for better reporting.

The Patent Office rejected the claims, but the CCPA revived them. That 3-to-2 decision included a narrow interpretation of Gottshalk v. Benson, 409 U.S. 63 (1972), concluding that the case only applied to process or method claims.

The issue considered by the Supreme Court in Benson was a narrow one, namely, is a formula for converting binary coded decimal numerals into pure binary numerals by a series of mathematical calculations a patentable process?

In re Johnston, 502 F.2d 765 (C.C.P.A. 1974). Since Johnston was patenting a system, Benson was deemed irrelevant by the CCPA majority.  Judge Rich wrote in dissent, and argued that the invention was barred under Benson. To be clear, Judge Rich was not a fan of Benson, but he took the Court’s decision as law, albeit warty.  He explained:

As the author of the opinion of this court in Benson, which was wholly reversed, I have not been persuaded by anything the Supreme Court said that we made a “wrong” decision and I therefore do not agree with the Supreme Court’s decision. But that is entirely beside the point. Under our judicial system, it is the duty of a judge of a lower court to try to follow in spirit decisions of the Supreme Court— that is to say, their ‘thrust.’

Id. (Judge Rich in dissent).   Still, the big question was what to take-away from Benson and Judge Rich suggested that the focus should not be limited by the Supreme Court’s wording.

I am probably as much – if not more – confused by the wording of the Benson opinion as many others. What the Court did in its decision … contains a message that is loud and clear. If those claims are not to patentable subject matter, neither, in my view, are the claims here, regardless of difference in form.

Id.  Judge Markey also wrote a dissent that foreshadowed the eventual Supreme Court decision. Markey argued that Johnston’s claims were invalid based upon the prior art and that the eligibility questions should be avoided.

After losing before the CCPA, the government then petitioned for Supreme Court review in the name of Marshall Dann, who was President Nixon’s Commissioner of Patents.  The petition includes three questions:

  1. Whether the Supreme Court’s holding in Benson, that a new idea to be implemented by programming an existing computer is unpatentable when claimed as a new “process,” also applies when the programmed computer is claimed as a new “machine system.”
  2. Whether programs for existing general purpose digital computers, however claimed, are patentable under present law.
  3. Whether respondent’s idea of having banks provide an additional bookkeeping service by programming their computers to sort check and deposit data in accordance with category codes was in any event no more than an obvious improvement over the prior art.

Johnston’s attorney Morton Jacobs drafted the patent application and also argued the case all the way to the Supreme Court (eventually losing).  The responsive brief recategorized the questions in an interesting way:

  1. Whether in the absence of specific congressional exclusion, a special purpose computer machine can be excluded from the general class of machines constituting statutory matters under 35 U.S.C. 101 by reason of its construction with software rather than hardware for its programming elements.
  2. Whether the Patent Office denial of patents for “software” emobidments of special-purpose computers while granting patents to “hardware” embodiments is a denial of equal protection of the patent laws.
  3. Whether an automatic record-keeping machine for all types of small-volume users (e.g., merchants, professionals, farmers) that enables each to use an individualistic record-keeping format and bookkeeping procedure, and that employs, inter alia, a general control for directing the processing operations that are common to most users, which control interacts with and is directed by a master control located in the data files for directing the operations that very with each user, is an unobvious improvement over the prior art.

The unanimous Supreme Court decision was authored by Justice Thurgood Marshall and expressly avoided the questions of patentability of software or computer programs.  Rather, the court found the claims obvious.

The opinion began with a recitation of the doctrine:

As a judicial test, “invention” – i.e., “an exercise of the inventive faculty” – has long been regarded as an absolute prerequisite to patentability. However, it was only in 1952 that Congress, in the interest of “uniformity and definiteness,” articulated the requirement in a statute, framing it as a requirement of “nonobviousness.” . . .

This Court treated the scope of § 103 in detail in Graham v. John Deere Co., 383 U.S. 1 (1966). There, we held that § 103 “was not intended by Congress to change the general level of patentable invention,” but was meant “merely as a codification of judicial precedents… with congressional directions that inquiries into the obviousness of the subject matter sought to be patented are a prerequisite to patentability.” While recognizing the inevitability of difficulty in making the determination in some cases, we also set out in Graham, the central factors relevant to any inquiry into obviousness: “the scope and content of the prior art,” the “differences between the prior art and the claims at issue,” and “the level of ordinary skill in the pertinent art.”

Dann v. Johnston, 425 U.S. 219, 226 (1976). In analyzing the claims, the court concluded that it need not find a prior art equivalent to each and every claim limitation.  Rather, the focus of the test is the significance of the differences to one of skill in the art.

[I]t must be remembered that the “obviousness” test of Section 103 is not one which turns on whether an invention is equivalent to some element in the prior art but rather whether the difference between the prior art and the subject matter in question “is a difference sufficient to render the claimed subject matter unobvious to one skilled in the applicable art. . . .”

Id. (quoting Judge Markey’s dissent in Johnston).  It is not entirely clear what point the court was making in noting that the referenced prior art were “closely analogous” but not “equivalent.”

[T]he mere existence of differences between the prior art and an invention does not establish the invention’s nonobviousness. The gap between the prior art and respondent’s system is simply not so great as to render the system nonobvious to one reasonably skilled in the art.

Reversed.

Of note, the court’s statement here of the foundations for obviousness from Graham did not include includes secondary indicia such as commercial success.  Later in the opinion, Justice Marshall added a footnote recognizing that their potential relevance in an obviousness analysis.  However, the opinion also reiterated the statement from the checkout-counter case – Great Atlantic & Pacific Tea Co. v. Supermarket Equipment Corp., 340 U.S. 147 (1950) – that “commercial success without invention will not make patentability.”  Justice Jackson’s concluding statement in that case may be equally applicable to Johnston: [The patentee had] “a good idea, but scores of progressive ideas in business are not patentable, and we conclude on the findings below that this one was not.” Id.

In the end, Dann v. Johnston is something of a dud, a sloppy reverb of Graham. The key takeaways going forward:

  1. Obviousness does not require equivalence in the prior art.
  2. Patentees are charged with awareness of the prior art, even in fast-moving technologies.
  3. “[E]xercise of the inventive faculty [is] an absolute prerequisite to patentability.”
  4. “[C]ommercial success without invention will not make patentability.”

[Read it here]