October 2004

Patent Case: Bard v. United States Surgical

Bard v. U.S. Surgical (Fed. Cir. 2004). 

Bard owns a patent on a method of repairing hernias with a flexible mesh plug. Bard sued U.S. Surgical for infringement and for inducing surgeons to infringe. Because in the prosecution history and specification Bard defined the claimed plug as having pleats, the district court’s claim construction requiring “pre-formed pleats” was affirmed.  Noninfringement affirmed.

Concurrence by Judge Prost:

In this case, the inventors clearly and deliberately disclaimed any coverage of non-pleated plugs they might otherwise have had when they stated during reexamination that “the surface of the inventive plug is pleated” in an attempt to overcome the prior art-based rejections of claims 19 and 20. Under the theory that the inventors acted as lexicographers, the majority holds that this statement, among others, shows that the inventors “clearly defined the plug of claim 20 as having pleats.”  The statement, in my view, is a surrender of claim scope, which precludes Bard from recapturing coverage of non-pleated plugs. Litton Sys., Inc. v. Honeywell, Inc., 140 F.3d 1449, 1458 (Fed. Cir. 1998). Because the inventors clearly disclaimed coverage of non-pleated plugs in the reexamination, I believe we may affirm the judgment of the district court on that basis alone; accordingly, I find it unnecessary to reach the remaining grounds for affirmance relied upon by the majority.


Patent Suit Alleges Disney Stole fastPass Idea

Disney’s patented fastPass system allows customers to reserve a time to ride an attraction, rather than waiting in line.  (U.S. Patent No. 6,173,209). 

According to a report by Sean Mussenden at the Sun Sentinel, a Tennessee man has sued Disney for stealing his idea for the line management system. 

After Robert Keyes watched a man pass out in a ride queue at Disney-MGM Studios, he had an epiphany, he said: Theme park visitors do not have to stand in line.

So, according to a patent lawsuit Keyes filed this month in federal court in Orlando, he sent a letter to Disney executives in 1991 describing a system that would allow some theme-park visitors to wait in a “standby” line but give others a ticket to return later and avoid the wait.

A top Disney executive sent him a letter back a month later, telling him the idea wouldn’t work and would result in “more guest inconvenience,” according to Keyes’ lawsuit.

Now, Keyes has sued Disney for “stealing his idea.”  In the complaint, he has requested correction of inventorship and damages for unjust enrichment.

On their website, Disney notes that “we are unable to accept or examine any creative idea, suggestion or document other than those solicited by the company itself.  We hope that you understand the aim of this policy, which is designed to prevent any future misunderstandings or problems which might arise if projects developed by [Disney] were to show a resemblance to creative work originated from third parties.”

Download the complaint against Disney.
Download Disney’s patent.

In a parallel case, the 9th Circuit Court of Appeals, in Jeff Grosso vs. Miramax Film Corp., found that movie and television executives enter an implied contract every time they read a script or hear a pitch.

Caterpillar Jury Trial Vacated Because Juror’s Spouse Was an Employee

Caterpillar v. Sturman (Fed. Cir. October 28, 2004). 

The Court of Appeals for the Federal Circuit (CAFC) today vacated a jury verdict in a trade secret and contract dispute involving Caterpillar. 

The technology at issue involved the use of residual magnetic latching in a fuel injector.  (See, for example, U.S. Patent 3,646,898).  The Appellate Panel, led by Judge Newman, decided several important issues in this case.  One of the most interesting involved Juror No. 3 whose spouse was a current Caterpillar employee.

At the beginning of trial, during the jury selection process, Sturman moved to dismiss for cause any current or former Caterpillar employees and their spouses. The district court denied Sturman’s blanket objection, but specifically allowed Sturman to show cause for individual jurors. . . . Sturman did not individually challenge for cause Juror No. 3, the spouse of a current Caterpillar employee, nor did it use one of its peremptory challenges to have her removed. Juror No. 3 ultimately sat on the jury.

Sturman appealed the district court’s opinion to allow Juror No. 3 to sit on the jury.

Potential for bias reviewed de novo.

Normally, the question of whether an individual juror is biased is a factual determination entitled to deference on appeal.  However, the CAFC ruled that a district court’s decision on “implied bias, as opposed to actual bias” is reviewed de novo.

Spouse of Employee is Biased as a Matter of Law.

Applying Seventh Circuit law, the court found that implied bias is demonstrated by “showing that the juror has a personal connection to the parties or circumstances.” 

Juror No. 3 had a financial interest in this case because her husband worked for Caterpillar at the time of the trial. As noted in Polichemi, even a tiny financial interest is enough to warrant dismissal. And it is legally irrelevant whether this financial interest arose due to his employment in management or under a union contract. . . . In addition, we find no distinction in the law between the financial interest of an at-will management employee and the interest of an employee under a union contract, nor do we advocate creating one.

Jury verdict vacated. Case remanded for a new trial.

Trademarks granted on Mies van der Rohe’s 1929 furniture designs.

Knoll has received trademark registrations on several Mies van der Rohe furniture designs.  (NYTimes Article). These pieces, originally designed in 1929, have been increasingly copied by furniture importers.  A Knoll spokesman noted that the registration “gives a green light to U.S. customs to stop unauthorized products from reaching this country.”  Knoll’s licensed version of the Barcelona Chair retails at just under $5,000.  Ernest Beck reported that the registration has the potential to “reduce the availability of replicas of [the] classic modern furniture.”

Ludwig Mies van der Rohe was a famous German architect who left for Chicago in the late 1930’s to head the architecture program at the Illinois Institute of Technology. He is known for the International Style of Modernism and for his catch-phrase “less is more.”



iPod Receives Design Patent

Apple has received a design patent on its 3G iPod. The application was filed just days before the public release of the new iPods, and issued as a new patent on October 26. (U.S. Patent No. D497,618). Apple Insider and Steve Nipper have more information.

What is a Design Patent?
A design patent covers ornamental, non-functional characteristics of an article of manufacture. The Patent Act provides that a design patent should be issued for any new, original and ornamental design for an article of manufacture. As such, a design patent only protects the appearance of an article and not any structural or utilitarian elements. A design patent has a term of 14 years from the date of issuance.

LINK: The patent laws provide for the granting of design patents to any person who has invented any new and nonobvious ornamental design for an article of manufacture. The design patent protects only the appearance of an article, but not its structural or functional features. The proceedings relating to granting of design patents are the same as those relating to other patents with a few differences. See current fee schedule for the filing fee for a design application. A design patent has a term of 14 years from grant, and no fees are necessary to maintain a design patent in force. If on examination it is determined that an applicant is entitled to a design patent under the law, a notice of allowance will be sent to the applicant or applicant’s attorney, or agent, calling for the payment of an issue fee. The drawing of the design patent conforms to the same rules as other drawings, but no reference characters are allowed and the drawing should clearly depict the appearance, since the drawing defines the scope of patent protection. The specification of a design application is short and ordinarily follows a set form. Only one claim is permitted, following a set form.

DMCA weakened again: Court overturns Lexmark injunction

Link: Denise Howell has the scoop on the 6th Circuit’s reversal of the Lexmark DMCA injunction.

“We should make clear that in the future companies . . . cannot use the DMCA in conjunction with copyright law to create monopolies of manufactured goods for themselves[.]”

Read the opinion. Coverage by Jason Schultz of Copyfight.

Background on the Case:

Via EFF: Lexmark’s DMCA case against Static Control is aimed at eliminating aftermarket laser printer toner cartridges. Lexmark has implemented an “authentication” handshake between its printers and toner cartridges. When Static Controls reverse-engineered the authentication procedure in order to enable refilled and remanufactured cartridges to work with Lexmark printers, Lexmark sued in Lexington, KY, claiming both copyright infringement and circumvention in violation of the DMCA.

Read the Federal Circuit’s rejection of the DMCA.

Free desktop software for downloading PDF patent documents

freePat: Canadian patent attorney Peter Eliopoulos has written a bit of desktop software that allows you to download PDF patent documents.  The software is free and each download is free — no money changes hand.

Catch: The only problem is that the software is only in Version 0.6.  I.e., beta.  Peter has written a great tool — someone should take Peter’s code and build a nice GUI around it.

Patents: Federal Circuit Defines Requirements For Declaratory Judgment Action

Capo v. Dioptics (Fed. Cir. 2004).


Dioptics produces “wear-over” sunglasses that are adapted to fit over or clip onto eyeglasses.  Capo is a wholesale marketer of sunglasses.  Prior to suit, the president of Dioptics (Henry Lane) called the president of Capo (Mark Ascik):

Lane left a voice mail message stating that if he did not hear promptly from Ascik, he would have to “presume that you are just ducking and racing forward to infringement;” Lane cautioned Ascik about “charging down a path here that’s going to end up into a multi-million dollar lawsuit.” Ascik then phoned Lane, and Ascik’s affidavit states that Lane said that Dioptics had thirteen United States patents and would soon have forty, and that these patents covered all of the basic wear-over sunglass frame shapes. Lane said that Dioptics would have no choice but to defend its patents against infringement, and that he was sure he would win an infringement suit.

After the conversations, Capo filed a declaratory judgment complaint, asking for a preemptive noninfringement holding.  Dioptics moved for dismissal of the declaratory action, on the ground that Dioptics could not have threatened suit because no one at Dioptics had seen Capo’s product or analyzed it for infringement.

The district court dismissed the declaratory action, finding that the dispute was not “sufficiently crystallized” for declaratory action.  On appeal, the Federal Circuit reversed:

Objective Apprehension Of Being Sued Sufficient For Declaratory Judgment Action.

Dioptics’ argument that it could not have ethically filed suit at that time may be relevant to whether Dioptics acted responsibly, but it is irrelevant to whether the patentee’s threats of suit instilled a reasonable apprehension of suit.  Although Dioptics now characterizes Lane’s words as “cursory,” the record well supports the conclusion that Capo had the objectively reasonable apprehension that it would be sued by Dioptics for patent infringement. This objective apprehension was deliberately and intentionally created by the president of Dioptics. It is irrelevant whether Dioptics had adequately investigated the basis of its threats, if they created the requisite objective apprehension. . . . We conclude that the district court clearly erred in declining to find that Capo had a reasonable apprehension of suit.

Failure to Raise Counterclaims Does Not Warrant Dismissal.

The district court gave weight to Dioptics failure or refusal to make compulsory counterclaims for infringement.  The Appellate Court found that Dioptics’ waiver of the claims should not add any weight to the argument for dismissal.

The Existence of Pending Patent Applications Does Not Justify Dismissal.

The district court also gave weight to Dioptics’ argument that it had pending patent applications that upon issuance would strengthen its case for infringement.  The Appeals Court disagreed with this finding:

Capo is entitled to resolution of the infringement accusations already made, for the patents that already exist. The possibility of future patents is irrelevant to present rights and liability.


Resolution of this dispute is within the court’s capability, and it is the district court’s responsibility to resolve it. Declining to do so is an abuse of discretion.

We conclude that the dismissal was improperly granted. The dismissal is vacated, and the case is remanded for further proceedings.


Federal Circuit Denies Petitions to Rehear

Today, the Federal Circuit, without opinion, denied several petitions for rehearing en banc:

Earlier this week, the CAFC denied petitions for en banc rehearings in Monsanto v. Ralph and International Rectifier v. IXYS.

Barring an appeal to the United States Supreme Court, the holdings on appeal represent the final rule of law.

California Appeals Court Upholds Genentech Verdict

Genentech v. City of Hope

City of Hope v. Genentech (Cal. App. 2004) (B161549). 

Decision: A California state appellate court has upheld a $500 million verdict against Genentech for back payment of royalties on drug sales from a 1976 agreement with City of Hope National Medical Center.  The court found that Genentech breached a fiduciary duty to City of Hope.

Genentech does not dispute that it failed to disclose various licenses and pay royalties on those licenses. Rather, it contends that it did not breach any fiduciary duty so long as it was adhering to an erroneous but legally tenable interpretation of the agreement. In essence, Genentech would have us hold that even if it followed an interpretation it knew was contrary to what the parties intended and agreed upon, it could not be held liable so long as that interpretation was objectively sustainable under the law. . . . None of [the cases cited by Genentech] allows a party to profit from a legally tenable contract interpretation when the party knows that the agreement has a wholly different meaning. In any event, it would be antithetical to the very nature of the obligations imposed on fiduciaries for us to hold that a fiduciary could act in the manner suggested by Genentech.

To the extent Genentech contends that its interpretation of the agreement was held in good faith, that contention fails. The jury’s finding of fraud or malice demonstrates that it believed that Genentech acted in bad faith. That finding . . . is supported by substantial evidence and is sufficient for concluding that Genentech breached its fiduciary duty.

According to a California based patent attorney, several amici curiae — including Intel Corp., TechNet and the California Chamber of Commerce — pleaded with the court to reverse the judgment, saying that imposing fiduciary status as a cost of using third-party intellectual property would impede innovation.  Genentech has announced its plans to appeal the decision to the California Supreme Court.

About the Case: In 1978, City of Hope biologists Arthur Riggs and Keiichi Itakura developed a technique for splicing into a bacteria gene the DNA for human insulin, which became the world’s first biotechnology drug. Genentech agreed to pay City of Hope 2% on net sales of products that were tied to the DNA provided by the cancer center.  (see Patent No. 4,704,362). Royalties had been paid for sales of insulin and on sales growth hormone products, but the cancer center is asking for royalties on products made under 20 other license agreements. 

UK High Court Rejects Doctrine of Equivalents

Kirin-Amgen v. Hoechst Marion

Hal Wegner recently reviewed the House of Lords case of Kirin-Amgen v. Hoechst Marion.  This case presented the first opportunity for the British high court to interpret the “new” patent law (introduced a quarter-century ago).

According to Hal, the court “held that the ‘purposive construction’ test for determination of patent scope should be maintained and is consistent with the European Patent Convention. The doctrine of equivalents as an alternative test is expressly repudiated.”

There will be occasions upon which it will be obvious to the skilled man that the patentee must in some respect have departed from conventional use of language or included in his description of the invention some element which he did not mean to be essential. But one would not expect that to happen very often.

In rejecting the American style doctrine of equivalents, the Lord Hoffman noted that:

I cannot say that I am sorry [that our precedent is antithetical to a doctrine of equivalents] because the Festo litigation suggests, with all respect to the courts of the United States, that American patent litigants pay dearly for results which are no more just or predictable than could be achieved by simply reading the claims.

Invention Submission Corporation versus Jon Dudas, USPTO Director

In January 2002, the PTO initiated an advertising campaign to warn the public of invention promotion scams. In a press release describing the campaign, the PTO noted that the agency’s advertisements would feature “an actual inventor, Edward Lewis, who lost several thousand dollars.” In the advertisements, Lewis described how he had spent $13,000 dollars on the services of an invention promotion company but “ha[d]n’t seen a penny.” The advertisements did not accuse any particular promotion company of engaging in scams, nor did they identify the company to which Lewis referred.

A news organization then published a story on the Invention Submission Corporation, noting that Lewis had filed a complaint against ISC and how the FTC had investigated the ISC for “misrepresentation in patent marking schemes.”

The Invention Submission Corporation then sued the PTO under the Administrative Procedure Act (APA) alleging that the PTO’s advertisements exceeded its statutory authority and were done in order to penalize ISC.

Both the district court and 4th Circuit Court of Appeals dismissed ISC’s claims, noting that the PTO’s ad campaign was not a “final decision” as required for jurisdiction under the APA.

 Now, ISC has petitioned the Supreme Court of the United States for a hearing on the case.  ISC argues that the the PTO’s actions constitute a sanction against the company, and is therefore reviewable under the APA.

The government brief in opposition to the petition is available here. The briefs have been distributed for conference scheduled for October 29.


Courts Rely on Internet Articles to Deny Trademark Application

In re DSS Environmental (Fed. Cir. 2004) (unpublished).

The USPTO refused to register DSS’s trademark DUALSAND on the grounds that the term is merely descriptive.

Under 15 USC 1052(e)(1), the PTO may refuse to register a mark if the mark, “when used on or in connection with the goods of the applicant,” is “merely descriptive” of the applicant’s goods. 

The Federal Circuit agreed with the PTO, concluding that the PTO’s decision was supported by substantial evidence.

Interestingly, the Appellate Panel supported the PTO’s reliance on articles from the Internet. 

DSS argues that the articles in the record lack credibility because their source was the Internet. However, the examining attorney was not relying on the articles for their accuracy, but merely to ascertain how the term “dual sand” is used in the context of water wastewater filtration. In making such a determination, the examining attorney may obtain evidence from “any competent source, such as dictionaries, newspapers, or surveys.” . . . The Internet articles in this case, including on-line copies of newspaper articles, fully satisfy that requirement.

Refusal to register mark affirmed.


Design patents: Bernhardt v. Collezione Europa

Bernhardt Bed

Bernhardt v. Collezione Europa (Fed. Cir. 2004) (04-1024).

Bernhardt sued low cost furniture dealer Collezione for infringement of six design patents. The district court, however, held that several of patents were invalid under 102(b) for prior public use.  Specifically, the court found that Bernhardt’s disclosure of the designs at a Pre-Market exhibition rendered the patents invalid.  In addition, the court found that Collezione’s products did not infringe the patents.

On appeal, the Federal Circuit vacated and remanded:

I. Public use analysis for a design patent requires substantially similar appearance in the eyes of ordinary user as compared to the claimed designs or their points of novelty.

While the court concluded that each of Bernhardt’s furniture pieces … were “similar to” the furniture design “shown in” each of Bernhard’s design patents, the analysis does not discuss or explain whether the furniture designs actually displayed at Pre-Market were substantially similar in appearance in the eyes of an ordinary observer to the claimed designs or appropriated the points of novelty of the patented designs. Only after making these determinations could the district court properly assess whether an invalidating public use within the scope of § 102(b) had occurred.

II. Witness testimony is not required to establish infringement of design patent.

The court apparently did not consider the evidence actually introduced—the design patents, their prosecution histories, and the cited prior art—from which Bernhardt’s proposed points of novelty and contentions regarding how Collezione’s accused designs appropriated Bernhardt’s proposed points of novelty might have been discerned. Because the district court incorrectly required Bernhardt to explain its points of novelty through the testimony of a witness, and concluded, based on the absence of such testimony, that Bernhardt failed to prove that Collezione had appropriated the novel ornamental features of the patents-in-suit, we vacate the district court’s judgement of non-infringement, and remand the infringement issue to the district court for further proceedings consistent with this opinion.

Kim v. Dawn Food

Kim v. Dawn Food Products, Inc. (N.D. Ill. October 12, 2004) (10 C 1906).

Historically, potassium bromate has been used in bread-making.  However, the substance causes cancer in laboratory animals.  As a substitute, Yoon Kim invented a potassium bromate replacer that includes ascorbic acid to act as an oxidant. (RE 36,355).

Kim sued Dawn Foods in the Northern District of Illinois, alleging that defendants doughnut mix infringed the patent.  After construing the terms, the court found that Dawn Foods’ products clearly did not infringe. 

Interestingly, Kim’s case may have been hurt most by her rapid succession of representation.

Attorneys for Lord, Bissell & Brook, LLP filed a notice of appearance in this Court to represent Kim on April 30, 2003.  On February 12, 2004, Kim requested that the Court grant the Lord, Bissell, & Brook, LLP attorneys’ motion to withdraw in light of “irreconcilable differences concerning the future handling of the above-captioned case.”  Two months later, attorneys for Ryndak & Suri filed a notice of appearance in this Court to represent Kim.  On July 23, 2004, Kim requested that the Court grant Ryndak & Suri attorneys’ motion to withdraw, citing “conflicts between attorneys and the plaintiff.”


USPTO’s Role is to Protect Intellectual Property Rights

Jon Dudas

USPTO Director Jon Dudas recently gave a stirring speech at the AIPLA annual meeting in Washington DC.  Here is the money quote:

[M]y charge is very clear, the charge of the USPTO is very clear. We are resolved to protect your intellectual property rights. Internationally, we are resolved to protect your rights in the treaties we debate, the enforcement measures that we promote, and the Free Trade Agreements that we negotiate. Domestically, we are resolved to protect your intellectual property rights through administration policy and, perhaps most importantly, by ensuring that you have the highest-quality patents and trademarks in the shortest time possible, in short, to give you the certainty and the quality that you need and deserve.


Canadians hope to Ban Drug Exports to the U.S.

Link: Yesterday, we reported on how Patent Law is likely to shape the debate on drug importation from Canada and other countries.  Now, the AP is reporting that a coalition of Canadian groups is beginning to pressure the government there to ban prescription drug exports.  The coalition argues that the rise in exports is likely to lead to shortages and price hikes in Canada.

Here in Illinois, Governor Rod Blagojevich has been a strong advocate of legalizing imported drugs. (Link). 

Canada may also be able to share its surplus flu vaccine with the U.S. (Link).

States May Face Patent Liability For Importing Drugs

In a recent paper, Penn State Professor Daniel Cahoy analyzed the importation of inexpensive drugs from Canada and other countries. His research looked at potential liability for patent infringement by various levels of government. Cahoy arrived at several conclusions:

  • Both private organizations and municipalities share the same, crushing liability under the Patent Act;
  • Despite Eleventh Amendment immunity, state governments face nearly equivalent liability for takings claims based on the Fourteenth Amendment;
  • The federal government confronts liability under the Fifth Amendment that broadens its exposure under the recognized just compensation statute; and
  • Attempts by Congress to modify the Patent Act to permit importation would likely constitute an unconstitutional taking.

Cahoy, Daniel R., “Patent Fences and Constitutional Fence Posts: Property Barriers to Pharmaceutical Importation” . Fordham Intellectual Property, Media & Entertainment Law Journal, Vol. 15, Winter 2005. http://ssrn.com/abstract=603121

Note: Under U.S. Law, the first sale (AKA “Exhaustion”) doctrine does not apply to products sold in a foreign country.

United States patent rights are not exhausted by products of foreign provenance. To invoke the protection of the first sale doctrine, the authorized first sale must have occurred under the United States patent.

Jazz Photo v. ITC, 264 F.3d 1094 (Fed. Cir. 2001), cert. denied, 536 U.S. 950 (2002).