December 2004

35 U.S.C. Section 103 Amended to Encourage Cooperative Research

Patent, Patent Legislation,

The ‘Cooperative Research and Technology Enhancement Act (CREATE Act) of 2004′ easily passed both the House and Senate and has been signed into law by President Bush today, December 10, 2004. (see Thomas).  The purpose of the Act is to promote cooporative research — such as between a university and start-up company.  The main thrust of the new law is to exclude some prior art from obviousness (103) consideration if the invention arose from a joint research agreement.

What You Need to Know:

If you are involved in cooperative research, you need to have a joint research agreement to ensure that your work will not invalidate patents that you apply for sometime in the future.  If you already have a joint agreement, you may need to make amendments to the agreement to ensure that it qualifies under the new law.

In order to qualify under the law, currently pending applications should be amended to disclose the names of the parties to the joint areement.  You may also consider a broadening reissue if your claims were restricted by now excluded prior art.

Text of the Act:

Section 103(c) of title 35, United States Code, is amended to read as follows:

    (c)(1) Subject matter developed by another person, which qualifies as prior art only under one or more of subsections (e), (f), and (g) of section 102 of this title, shall not preclude patentability under this section where the subject matter and the claimed invention were, at the time the claimed invention was made, owned by the same person or subject to an obligation of assignment to the same person.

    (2) For purposes of this subsection, subject matter developed by another person and a claimed invention shall be deemed to have been owned by the same person or subject to an obligation of assignment to the same person if–

      (A) the claimed invention was made by or on behalf of parties to a joint research agreement that was in effect on or before the date the claimed invention was made;

        (B) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and

          (C) the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement.

          (3) For purposes of paragraph (2), the term `joint research agreement’ means a written contract, grant, or cooperative agreement entered into by two or more persons or entities for the performance of experimental, developmental, or research work in the field of the claimed invention.

        EFFECTIVE DATE

          (a) IN GENERAL- The amendments made by this Act shall apply to any patent granted on or after the date of the enactment of this Act. (Exception: The legislation does not not affect the right of any party in any action pending before the United States Patent and Trademark Office or a court on the date of the enactment of this Act to have that party’s rights determined on the basis of the provisions of title 35, United States Code, in effect on the day before the date of the enactment of this Act.

        MESSAGE TO RESEARCHERS:

        If you work collaborate on work with individuals from other legal entities, you need to have an agreement up front as to how that collaboration is going to be handled. Contact your patent attorney to ensure that the agreement is properly created to fall within the scope of the new law.

        BACKGROUND ON THE LAW:

        Texas Republican Lamar Smith introduced the legislation in 2003 to promote research between universities and the private sector.

        According to co-sponsor Senator Leahy, this Bill will circumvent the ruling in OddzOn Products, Inc. v. Just Toys, Inc. (Fed. Cir. 1997) (holding that non-public information may be used as prior art under certain circumstances), thus allowing more collaboration. Philip McGarrigle published an article in IDEA discussing the OddzOn Products. Brian Murphy disagreed with OddzOn Products in the Fordham IP Law Journal. Additionally, James Gambrell discusses the use of section 102(f)/103 prior art in the Federal Circuit Bar Journal.

        Analysis and discussion of the Act from the House Committee Report:

        In particular, Sec. 103(c) is amended to add a new paragraph that permits reliance on the provisions of 103(c) by parties that have not commonly assigned their rights to subject matter and the invention at the time a claimed invention was made. It does so by construing the phrase `owned by the same person or subject to an obligation of assignment’ in newly redesignated 103(c)(1), to include circumstances in which the parties have entered into a qualifying joint research agreement before to making the invention. The amendments made in this Act do not alter existing law governing inventions under 103(c) where the invention and the subject matter at issue are commonly owned or subject to an obligation of common assignment.

        A party who seeks to gain the benefit of the amended Sec. 103(c) must comply with certain conditions. First, the invention and the subject matter (i.e., prior art or information qualifying solely under 35 U.S.C. 102(f)) that is being excluded must be owned by, or otherwise subject to the control of, one or more of the parties to the joint research agreement. While the subject matter being excluded may pre-date the joint research agreement, the claimed invention must be made after the date of such agreement. Second, the invention must arise from work performed by or on behalf of the natural or legal persons that are party to the eligible joint research agreement. Third, the identities of the parties to the joint research agreement must be disclosed in the patent. This information may be included in the original application, through an amendment to the application, or added by an amendment to the patent (e.g., by a certificate of correction) pursuant to the amended law. The omission of the names of parties to the agreement is not an error that would justify commencement of a reissue or reexamination proceeding.

        Thus, by entering into a joint research agreement before making the claimed invention, disclosing the names of the parties in the patent application or amendment, and ensuring that the claimed invention resulted from activities under the agreement, subject matter developed by another person and the claimed invention will be deemed to be commonly owned.

        Section 2 also defines the term `joint research agreement’ as a `written contract, grant, or cooperative agreement.’ By doing so, Congress does not intend to prescribe the specific form of the agreement parties must use to benefit from this Act nor to require the writing be contained in a single instrument. Congress does intend the writing to demonstrate that a qualifying collaboration existed prior to the time the claimed invention was made and that the claimed invention was derived from activities performed by or on behalf of parties that acted within the scope of the agreement.

        The term `joint research agreement,’ used in section 2 of the Act, is not limited to joint research agreements under the Bayh-Dole Act (Sec. 200 et seq. of the Patent Code), but also includes other governmental or private sector cooperative research agreements, development agreements, and other transaction agreements, including Government Cooperative Research and Development Agreements (15 U.S.C. 3701a), and Department of Defense or National Aeronautics and Space Administration (NASA) `other transaction’ agreements (10 U.S.C. 2371, 42 U.S.C. 2473).

        USPTO Budget

        Patent

        Congress has set the USPTO’s budget at $1.3 billion for fy 2005.  According to the recently enacted Consolidated Appropriations Act of 2005, all of the funding will be derived from fees paid to the Office.  If fees collected are less than the budgeted amount, then the budget “shall be reduced accordingly.”  Although not explicitly stated — if fees collected are greater than those spent, then excess funds will be returned to Congress.

        Interestingly, of that money, $20 million is to be allocated to “protect United States intellectual property overseas.”  This will likely includes Mark Cohen’s foray into China.

         

        Eolas v. Microsoft On Appeal

        Patent, Patent Cases 2004,

        Eolas Microsoft

        Eolas v. Microsoft (04-1234)(On appeal at the Federal Circuit)

        At the district court level, Eolas won a $500 million+ verdict for Microsoft’s alleged patent infringement.  The technology at issue involves a method of using a web browser to open third-party applications using plug-ins.  Now, the case is on appeal at the Federal Circuit, with oral arguments being held today, December 9, 2004. Microsoft is expected to argue both improper claim construction and error in including Microsoft’s foreign sales in damage calculations.

        The foreign sales portion of the case falls under 35 U.S.C. 271(f).  271(f)(1) provides for liability for causing components of a patented invention to be supplied for assembly abroad.  In Eolas, however, no physical component of the patented invention had shipped from the U.S.  However, the District Court ruled that Microsoft’s shipment of information on a "golden master" disk created a sufficient nexus with the U.S. 

        The foreign damages are expected to be overturned by the Federal Circuit appeals court based on its holding in the recent case of Pellegrini v. Analog.  In Pellegrini, the Federal Circuit essentially held that there is no liability for patent infringement unless components of a patented invention are physically shipped from the United States.  Two weeks ago, the Supreme Court denied Pellegrini’s petition for writ of certiorari.

        The asserted patents are also undergoing a reexamination at the United States Patent Office.

        Parties Involved:

        The asserted patents are owned by the University of California but exclusively licensed to Eolas.  The two reportedly have an agreement that Eolas will pay the University 25% off the top of any award.  Microsoft is the defendant.  In addition to the parties, a number of amicus briefs were filed by interested parties.  These parties include: AOL; Association for Competitive Technology; Autodesk; Bentley Systems; Intel; Macromedia; Netscape; Oracle; Professor Joe Miller; Sun Microsystems; and Wacom Technology. 

        Comment:

        Although I have not reviewed these amicus briefs, I expect that they generally support Microsoft’s contention that the Eolas patents are invalid and that the reach of the patents should not extend beyond the borders of the U.S.  Paul Festa at cNet has written a brief article on the appeal.

        Supreme Court Upholds Fair Use Defense in Trademark Case: Finds that some consumer confusion is compatible with fair use

        Patent, Patent Cases 2004

        KP Permanent Make-Up v. Lasting Impressions I, 543 U.S. ___ (2004).

        FACTS: Both KP Permanent Make-Up and Lasting use the term “micro color” in marketing permanent cosmetic makeup.  KP has used a single-word version of the term since 1990 or 1991.  In 1992, Lasting registered a trademark that included the words “Micro Colors” under 15 U. S. C. §1051, and, in 1999, the registration became incontestable, §1065. When Lasting demanded that KP stop using the word “microcolor,” KP sued for declaratory relief, asserting the statutory affirmative defense of fair use, §1115(b)(4). The Ninth Circuit ruled consumer confusion is an element of fair use and appeared to place the burden of proof (to show an absence of confusion) on KP.

        ISSUE: Does a party raising the defense of fair use to a claim of trademark infringement have a burden to negate any likelihood that the practice complained of will confuse customers about the origin of goods or services affected?

        HOLDING: (Souter) A party raising the statutory affirmative defense of fair use to a claim of trademark infringement does not have a burden to negate any likelihood that the practice complained of will confuse consumers about the origin of the goods or services affected.

        (a) Even if a mark is incontestable (under §1115(b)), a trademark holder has the burden of showing that the defendant’s actual practice is “likely to cause confusion, or to cause mistake, or to deceive” consumers about the origin of the goods or services in question, see, e.g., Two Pesos, Inc. v. Taco Cabana, Inc., 505 U. S. 763, 780.  While cases such as Baglin v. Cusenier Co., 221 U. S. 580, are consistent with taking account of the likelihood of consumer confusion as one consideration in deciding whether a use is fair, they cannot be read to make an assessment of confusion alone dispositive or provide that the defense has a burden to negate it entirely.

        (b) Since the burden of proving likelihood of confusion rests with the plaintiff, and the fair use defendant has no free-standing need to show confusion unlikely, the Court recognizes (contrary to the Ninth Circuit’s view) that some possibility of consumer confusion is compatible with fair use. . . . The Court does not rule out the pertinence of the degree of consumer confusion under the fair use defense.

        (c) VACATED and REMANDED.

        Supreme Court Opinion
        9th Circuit Opinion

         

        New Blog Covers Decisions of the Trademark Trial and Appeal Board

        Articles and Publications, Patent

        New York attorney Martin Schwimmer has been covering trademark issues for the past few years at his quality Trademark Blog.

        One area of trademark law where Marty has only rarely taken his readers is into the arcane decisions of the Trademark Trial and Appeal Board (TTAB).  The TTAB is an administrative body of the Patent & Trademark Office that decides various trademark issues such as ex-parte appeals, oppositions, cancellations and concurrent use proceedings.  These decisions are extremely important, but only rarely written about . . . until now.

        At Marty’s encouragement, Boston attorney John Welch has created the TTABlog: Occasional Observations re the Trademark Trial and Appeal Board.  Welch has a wealth of knowledge concerning operation of the TTAB and, perhaps more importantly, is a great writer.  In his posts, John certainly gives you the facts, but he also imparts some of his own insight into the inner workings of the administrative trademark appeal process.

        Recent headlines on the TTABlog:

        Welcome to the blogosphere John Welch.

        Related Links:

        Free Telephone Roundtable Today on Patent Damages

        Conference or CLE, Patent
        Date: December 8, 2004
        Time: 12:30 PM Eastern Duration: 1 Hour
        Phone in #: RSVP to info@aplf.org in order to obtain 1-800 dial-in number
        Fee: Participation is FREE
        Topic: Patent Damages–Beyond the Basics: Lost Profit Consideration

        This discussion will center on patent infringement damages. The presentation will address damage issues beyond the basics of Panduit and Georgia Pacific including recent court decisions on lost profits, reasonable royalty and price erosion. Joseph Egan and Michael Chase, expert witnesses on economic damages with Navigant Consulting, Inc., will also provide case examples from some of their recent engagements and expert testimony. Curt Whitenack, a litigator from McDonnell Boehnen Hulbert & Berghoff LLP, will moderate.

        I had forgotten to post this notice until I saw it on I/P Updates.

        Commerce Department Inspector General Releases Report Critical of Patent Office Examiner Goal and Appraisal System

        Articles and Publications, Patent

        The Inspector General’s Report highlighted several problems with the current system of Examiner Goals and Evaluation:

        • Patent Examiner Goals Have Not Changed Since 1976
        • Patent Examiner Performance Appraisal Plans Are Not Linked to Supervisor and PTO Goals
        • Patent Examiner Award System Is Not Well Structured
        • No “gain-sharing” award is offered between 110-120 percent of the production goal to encourage production at that level
        • Special achievement award does not require higher performance than the gain-sharing award
        • Criteria for pendency reduction award are not tied to pendency reduction

        The Office of the Inspector General of the Commerce Department recently released its report on the Patent Office titled:

        USPTO should reassess how examiner goals, performance appraisal plans, and the award system stimulate and reward examiner production. [Download PDF]

        In addition, the Report made three fairly mild recommendations:

        • Reevaluate current patent examiner goals and assess the merits of revising them to reflect efficiencies in and changes to work processes resulting from automation and other enhancements.
        • Examine the benefits of revising patent examiner performance plans to (a) better reflect agency production, first action and overall pendency goals, and (b) better measure examiner success at processing applications within specified time periods.
        • Evaluate the current patent examiner award system to determine if there is a more effective and efficient way to stimulate higher examiner production.

        Who is the Inspector General of the Department of Commerce?

        In 1999, Johnnie Frazier is the was sworn in as the Inspector General of the U.S. Department of Commerce, and thus assumed responsibility for monitoring the operations of one of the most diverse federal agencies. As Inspector General, Mr. Frazier is charged with (1) promoting economy and efficiency, and (2) detecting and preventing fraud, waste, and abuse in Departmental programs and operations. The Office of Inspector General is created to provide an independent and objective evaluation of Departmental programs and operations.

        Conclusory Statements by Patent Examiner are Inadequate to Support Motivation to Combine References

        Patent, Patent Cases 2004,

        In re Bruce Beasley (Fed. Cir. December 7, 2004) (04-1225 Unpublished Opinion).

        In 1991, Beasley filed a patent application directed to the generation of images on a video screen using a light pen that operates by mapping the screen into a memory on a point-by-point basis. 

        The patent appeals board (BPAI) found that the invention was obvious based on prior art patents cited by the patent examiner during prosecution.  Beasley then appealed to the Court of Appeals for the Federal Circuit (CAFC).

        On appeal, Beasley argued that the examiner never established a prima facie case of obviousness.  Specifically, Beasley urged reversal because there was no motivation or suggestion to combine the references cited by the Examiner and BPAI.

        The Court agreed with Beasley and reversed the BPAI’s rejection — finding that:

        The record reflects that the examiner and the Board have managed to find motivation for substituting one type of memory for another without providing a citation of any relevant, identifiable source of information justifying such substitution. The statements made by the Examiner, upon which the Board relied, amount to no more than conclusory statements of generalized advantages and convenient assumptions about skilled artisans. At least under the MPEP then in effect, such [conclusory] statements and assumptions are inadequate to support a finding of motivation, which is a factual question that cannot be resolved on subjective belief and unknown authority.

        Vacated and Remanded.

        In Dissent, Judge Dyk would have affirmed the obviousness rejection.

        I see no error in the Board’s reliance on the PTO’s own specialized knowledge [for a motivation to combine]. The effect is merely to create a prima facie case, and to shift the burden to the patent applicant. Here the applicant did not refute the factual findings of the Board and the patent examiner, but merely offered lawyer argument to contradict the Board’s findings. Under these circumstances the application was properly rejected.

        With this said, I agree that the MPEP provision in effect at the time is not a model of clarity and can be read as recognizing only a very limited scope for the use of the PTO’s expertise. MPEP § 2144.03 (7th ed. 1998). However, the current version appears to allow greater latitude. MPEP § 2144.03 (8th ed., rev. 2, 2004). In future cases, where the PTO has provided us with an interpretation of the new MPEP provisions, we will need to address the extent to which the new version of the MPEP gives the PTO greater scope to rely on its own expert knowledge.

         

        Commerce One Auctions Patents: Public Interest Groups Complain

        Articles and Publications, Patent

        It is right there in the Patent Act.  Patents are a form of personal property and are freely assignable.  35 U.S.C. §261.  They may be bought & sold, licensed exclusively and otherwise. 

        Now, some patent groups (EFF) are up in arms because a bankrupt company, Commerce One has auctioned its patent portfolio that reportedly covers computerized methods of paying bills and obtaining supplies.  Their objection: “the buyer is to require a substantial rate of return.” 

        Give me a break — what kind of objection is that? The underpinning of the American economy is based on the exchange of property and obtaining a return on investment. 

         

        Snippets

        Articles and Publications, Patent,

        SnippetsTM provides a review of timely developments in intellectual property law. Here is a table of contents of the most recent issue (November 2004):

        1. Thomas Fairhall and Paul Churilla, The Intersection of Trade Secrets and Patent Law: The Prior User Rights Statute, 35 U.S.C. 273, Part 2.
        2. Eric Moran and Dennis Crouch, Drafting the Technology Game Plan Part 5: Domain Name Protection.
        3. Marcus Thymian and Sherri Oslick, On Your Mark! . . . Get Set! . . . Know: Marking Fundamentals.
        4. Alison Baldwin, Patent Validity Assessments: Your Guide to Avoiding the On-Sale Bar, Part 2.

        You can e-mail the editor (snippets@mbhb.com) to receive your FREE copy of the newsletter.

        In the e-mail, you can indicate your technology and legal interest: (Biotech, Electrical, Software, Chemical, Mechanical, Litigation, and/or Prosecution).

        European Patent Organization Continues to Spread

        Articles and Publications, Patent

        Link: The European Patent Organization has announced that Lithuania has now joined the European Patent Convention — pushing the number of member states to 30. European patents are now valid in 36 European states, covering a market of more than 560 million inhabitants.

        Link: There are (as of 1 December 2004) 30 member states: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Liechtenstein, Lithuania, Luxemburg, Monaco, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey and the United Kingdom (see European Patent Convention article for the dates of entry in force in each country).  In addition there are six so-called "extension states" which recognise European Patents but are not member of the EPO. These are Albania, Croatia, Latvia, Macedonia, Serbia and Montenegro and Bosnia and Herzegovina.  Further countries are expected to join the EPO in due course (probably Latvia, Malta and Norway soon).

        In addition, the U.S., Europe, and Japan have agreed to take real steps to coordinate work sharing, electronic business developments to support work sharing, and harmonization or standardization of search strategies, tools and substantive patent law.

        Amazon wins patent suit . . . for now: Pinpoint’s case dismissed without prejudice

        Patent, Patent Cases 2004

        Pinpoint v. Amazon (N.D. Ill. December 6, 2004) (No. 03 C 4954, Richard A. Posner, sitting by designation).

        After an evidentiary hearing on the eve of trial, Judge Posner has determined that Pinpoint was not the owner of the asserted patents at the time the complaint was filed — and thus, that Pinpoint does not have standing to sue.

        The case was dismissed without prejudice.  After ensuring that the patents are properly assigned, Pinpoint may re-file the suit.

        Read the opinion here: Download Pinpoint.pdf.
        Read more about the lawsuit here, here, and here. 

        Blog: Word of the Year

        Articles and Publications, Patent

        In patent law, Merriam-Webster is the cream of the crop.  The Federal Circuit cites Webster’s 3rd International Dictionary more than any other source in claim interpretation.  The CAFC likes dictionaries because they are descriptive of the language – unlike other documents, such as RFC’s, that are seen as prescriptive.

        As the English language changes, so does Webster’s.  Recently, Merriam-Webster named the term "blog" as their number one word of the year — finding that "blog" was the most searched word on its Web sites in 2004.

        In 1999, "blog" was added to Webster’s Collegiate Dictionary.

        Blog: noun; short for weblog; a Web site that contains an online personal journal with reflections, comments, and often hyperlinks provided by the writer.  Blogger; Blogging.

        Now, there is a rumor that Bloggers may be TIME’s people of the year.

        I hope that you enjoy this patent law blog and find it useful for your practice.  Please feel free e-mail feedback: crouch@mbhb.com.

        McDonnell Boehnen Hulbert & Berghoff LLP
        Dennis Crouch
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        Add me to your address book… Want a signature like this?

        CAFC: Expert Testimony Essential for Finding of Infringement

        Patent, Patent Cases 2004

        Centricut v. ESAB (Fed. Cir. 2004) (03-1574).

        At the district court, Esab Group won a multi-million dollar judgment against Centricut for infringement of Esab’s patent relating to plasma welding products.  Centricut appealed the judgment and the measurement of damages.  Esab cross-appealed, asking for a modification of the judgment on damages.

        On appeal, Centricut argued that ESAB had not satisfied its burden of proof on infringement because it failed to present expert testimony comparing the claims as construed with the accused device.  The Appeals Court agreed that expert testimony was essential in this case:

        [E]ach of Esab’s three theories [of infringement] suffers from the same deficiency: none is supported by expert testimony. The first theory, adopted by the district court, rests on the district court’s own interpretation of the evidence. The latter two theories rest on the testimony of witnesses who were admittedly not experts on [the specific technology].

        … This case stands as an apt example of what may befall a patent law plaintiff who presents complex subject matter without inputs from experts qualified on the relevant points in issue when the accused infringer has negated infringement with its own expert.

        Infringement Reversed

        The Court went on to say that experts are not necessary for cases where the technology is “easily understandable.” And, that there is no “per se rule that expert testimony is required to prove infringement when the art is complex.”  However, “where the accused infringer offers expert testimony negating infringement, the patentee cannot satisfy its burden of proof by relying only on testimony from those who are admittedly not expert in the field.” 

        Willful Patent Infringement: An Empirical Look

        Patent

        Professor Kimberly Moore is one of the leading empirical researchers in the area of patent law.  In her latest article, Professor Moore looks into the issue of willful patent infringement.  Some of her findings:

        • Willfulness is alleged all of the time (more correctly in +90% of cases);
        • Willfulness is never decided on summary judgment;
        • About one third of willfulness issues are bifurcated at trial;
        • At trial, willfulness is found about half of the time;
        • The CAFC affirmed over 90% of jury verdicts on willfulness;
        • In bench trials, a noninfringement/invalidity opinion was critical in avoiding a willfulness finding;
        • In jury trials, an opinion did not create a significant impact.

        The study analyzed all patent cases infringement cases that terminated during litigation from 1999-2000.

        Kimberly A. Moore, Empirical Statistics on Willful Patent Infringement, 14 Fed. Cir. Bar J. 227 (2004).

        Means-Plus-Function Claims Lose at the Federal Circuit

        Articles and Publications, Patent

        35 U.S.C. Section 112 paragraph 6 provides a statutory basis for drafting patent claims in what is known as means-plus-function language.  The language allows a patentee to write a claim based on the function of a device rather than its actual structure.  This language is, in the words of Gene Quinn, "dangerously seductive."  Means claims are easy to write, and there is a belief that the means language adds some "fuzzy math" to the court’s calculation of infringement.

        Over the past several years, the Federal Circuit has continually limited the scope of means limitations.  Such a limitation is construed by the court to cover the corresponding structure as described in the specification and equivalents thereof.  Thus, if you use means claim limitations, you should make absolutely sure that the structure is completely (and broadly?) described in the specification.

        In an admittedly unscientific survey of case law, attorney Hal Wegner searched through the last fifteen CAFC opinions that dealt with the interpretation of means-plus-function language. Results:

        Patentee’s construction of "means" term accepted: 0%
        Patentee’s argument that term was not a "means" term accepted: 14
        Summary judgment of non-infringement reversed: 7%
        Losses for Patentee: 80%.

        Thus, the means language was a loser for the patent holder in 80% of cases. (12 of 15 cases). (Hal, thanks for conducting the study).

        Bottom Line: MPF claims are risky.  They are fine to add as insurance after you have drafted more descriptive claims, but they should not be trusted. 

        If you are still writing MPF claims, you are not alone — thousands of patents using such language are issued annually.

        35 U.S.C. 103(a): Disclosure of alternative embodiments does not constitute teaching away.

        Patent, Patent Cases 2004

        In a case involving the design of shoe tred, the Federal Circuit provided further insight into the motivation to combine references under 103(a).

        In re Fulton (Fed. Cir. 2004) (04-1267).

        After receiving an obviousness rejection at the Board of Patent Appeals and Interferences (BPAI), inventors Fulton and Huang appealed to the Federal Circuit.  Their utility patent application is directed to a shoe sole with increased traction.  The BPAI found that the prior art as a whole suggested a combination of the orientation of hexagonal surfaces found in the application. 

        Motivation to Combine Need Not Come from Preferred Alternatives: On appeal, the inventors argued that there was no motivation to combine because the characteristics disclosed in the references were not the preferred alternative.  The CAFC rejected this argument — finding that “our case law does not require that a particular combination must be the preferred or the most desirable, combination described in the prior art in order to provide motivation for the current invention.”  The appeals court went on to clarify that the “prior art’s mere disclosure of more than one alternative does not constitute a teaching away from any of these alternatives” unless the disclosure criticizes, discredits, or otherwise discourages the solution.

        Rejection for obviousness affirmed.

        Federal Circuit Begins Announcing Panel Composition One Week Early

        Articles and Publications, Patent

        Some patent law experts have noticed an internal rift in the Federal Circuit Court of Appeals in the area of claim construction.  Some of the CAFC judges generally decide claim construct based on an "ordinary meaning" approach while others generally rely on patent documents such as the specification and prosecution history to determine the meaning of claims. UPenn Professor Polk Wagner has even created a Federal Circuit Predictor to predict the outcome of a claim construction apeal based on the appellate panel.

        Thus far, Professor Wagner’s predictor has been seen as a cute but ineffective tool because the appellate panel is not given with any advance notice.  The Predictor Tool adds certainty, but the lack of advance notice does not allow for any real settlement negotiations.

        Now, in a public experiment, the Federal Circuit has begun to post the composition of panels the Thursday prior to the week of oral argument. 

        Thus, for instance, we now now that next Thursday  (December 9) that the Panel of Rader, Friedman, & Plager will hear the Eolas v. Microsoft panel.

        The court requests public comment on the experimental change.

        Carlos Gutierrez nominated as Secretary of Commerce

        Patent, Patent Cases 2004

        Kellogg Executive Carlos Gutierrez has been nominated by President Bush to replace Don Evans as Secretary of Commerce.  The Commerce Department manages the Patent & Trademark Office as well as other utilitarian functions of the government such as the census, weather forecasting, and standard setting.

        Gutierrez fled Castro’s Cuba in the 1960’s and worked his way up the corporate ladder — eventually taking the helm at Kellogg in 1999.  He is credited with revitalising the company that had been knocked from its perch at the top of the cereals business.

        Bush called Gutierrez a "great American success story" and a visionary executive, who understands the world of business from the "first rung on the ladder to the very top."

        Kellogg is no stranger to the PTO, more than sixty years ago Kellogg brought a case to the Supreme Court over whether the pillow shape of Nabisco’s shredded wheat was trademarked.  In Kellogg v. National Biscuit, the Court ruled that a "product shape that is the subject of a [utility] patent goes into the ‘public domain’ when the patent expires." 306 U.S. 111 (1938).

        Marking Estoppel: CAFC Vacates but Leaves Possibility

        Patent, Patent Cases 2004

        Slip Track Systems v. Metal Lite (Fed. Cir. December 1, 2004) (unpublished) ("Slip Track III").

        In a long-running dispute involving patents directed to earthquake resistant wallboard structures that permit a wallboard to slide vertically with respect to the supporting wall studs, the Federal Circuit vacated the district court’s infringement holding.

        The district court barred Defendant Metal Lite from contesting infringement for three reasons. 1) Because of a prior partnership with Slip Track, Metal Lite had marked its product with the asserted patent number — thus creating a marking estoppel. 2) In an earlier decision, ("Slip Track II"), the CAFC had found the asserted patent to cover identical subject matter as another product that Metal Lite admittedly infringed — thus, Metal Lite must also infringe the asserted patent. And 3) Metal Lite’s tardy presentation of non-infringement arguments were contrary to Fed. R. Civ. Pro. R. 26 of "fully airing each parties’ theories of the case well in advance of trial."

        On appeal, the CAFC vacated-in-part:

        Marking Estoppel: While deliberate mismarking of a product may provide grounds for applying estoppel, there is no evidence in this case that Metal Lite believed its product to fall outside the scope of the patent’s claims when it made the decision to mark its product.  Thus, marking estoppel does not apply in this case. 

        NOTE: The Court explicitly refused to endorse the doctrine of marking estoppel — "We find it unnecessary to address this issue because, even assuming the doctrine remains viable, it does not apply to the facts of this case."

        Identical Scope of Second Patent: Patent infringement analysis requires the court to compare construed claims to the accused product. In bypassing this step, the district court failed to consider that Metal Lite’s products do not necessarily infringe the patent.

        Metal Lite’s Litigation Conduct: In its answer, Metal Lite denied infringement — and thus, was not tardy.

        Accordingly, we hold that the district court abused its discretion in granting Slip Track’s motion in limine barring Metal Lite from contesting infringement.

        In Dissent: Judge Newman could "not discern reversible error."

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