Lemelson’s patents have priority dates of 1954 and 1956, but through skillful use of the patent rules, several patents have still not expired.
In an infringement suit against Symbol, the district court found that the patents were unenforceable under the doctrine of prosecution laches — holding that the “18 to 39 year delay in filing and prosecuting the asserted claims . . . was unreasonable and unjustified.”
On appeal, the Court of Appeals for the Federal Circuit affirmed, finding that the lower court did not abuse its discretion in holding the patents unenforceable.
The court listed several “legitimate grounds” for filing a continuation in a patent:
Filing a divisional application in response to a restriction requirement (even if you defer filing the divisional until just before the parent issues);
Refiling rejected claims in order to present newly found evidence of unexpected advantage;
Filing a continuation to support broader claims; and
Refiling for other reasons that are “not unduly successive or repetitive.”
However, the panel found that refiling an application solely containing previously-allowed claims for the business purpose of delaying their issuance can be considered an abuse of the patent system — and can constitute laches.
The court was careful to note that a single delay in one particular application would not merit the extraordinary relief of unenforceability. However, a history of a series of delay may trigger laches. “Patent applications should normally be permitted to issue when they have been allowed and the statutory requirements complied with.”
Comment:
Important inventions generally involve at least one continuation application — when filing a continuation, the attorney should consider whether it is justified under one of the listed legitimate grounds.
Because of the 1995 change in the law, this issue is becoming largely moot. Now patents have a 20–year term from the filing date rather than the old 17–years from issuance.
ESTs Unpatentable for Failure to Satisfy 35 U.S.C. § 101 Where Function of Underlying Gene is Unknown
by Sherri Oslick, PhD
In an opinion of great import to biotechnology patent law, the CAFC affirmed the decision of the Board of Patent Appeals that denied a patent to five expressed sequence tags (ESTs) — holding that in the absence of an identification of the function of the underlying genes, “the claimed ESTs have not been researched and understood to the point of providing an immediate, well-defined, real world benefit to the public meriting the grant of a patent.” In its opinions, the CAFC endorsed the 2001 PTO Utility Examination Guidelines, holding that Brenner v. Manson applies broadly to the fields of chemistry and biology and that the PTO had not applied a heightened standard for utility of ESTs.
Monsanto, the real party in interest, had asserted that the claimed nucleic acid sequences found their use as research tools, including use in monitoring gene expression by measuring the level of mRNA through microarray technology and in identifying the presence or absence of polymorphism. The CAFC, however, dismissed this argument and affirmed that, without presenting a specific function for the underlying gene, the claimed invention lacked a specific and substantial utility and the application in question therefore also did not meet the enablement requirement of 35 U.S.C. § 112, as it incorporates the utility requirement of 35 U.S.C. § 101.
Following the directive from the Supreme Court in Brenner, the CAFC noted that any invention must have a substantial and specific utility.
Substantial Utility: “an asserted use must show that the claimed invention has a significant and presently available benefit to the public.”
Specific Utility: “an application must disclose a use which is not so vague to be meaningless” and “an asserted use must [] show that the claimed invention can be used to provide a well-defined and particular benefit to the public.”
Applying these principles, the CAFC found that the asserted utilities met neither the substantial nor the specific test. Rejecting Monsanto’s analogy that ESTs are like a microscope, a patentable research tool used to generate data about a sample of unknown properties, the CAFC found the ESTs to be merely a starting point for further research, providing no presently available benefit.
[W]hile a microscope can offer an immediate, real world benefit in a variety of applications, the same cannot be said for the claimed ESTs. Fisher’s proposed analogy is thus inapt. Hence, we conclude that Fisher’s asserted uses are insufficient to meet the standard for a “substantial” utility under § 101.
The CAFC also held that the asserted uses were not specific. Asserting that any EST from the maize genome could perform any of the recited utilities, the CAFC found that Monsanto had failed to assert any utilities setting the five claimed ESTs apart from the 32,000 plus ESTs disclosed in the application or any EST for that matter. The disclosure of such general utilities was “nebulous” and not sufficiently specific.
In dissent, Judge Rader distinguished Brenner and argued that the majority, without supporting scientific evidence, was too quick to render a value judgment that the utility of the claimed ESTs would not provide enough valuable information, that the information gained through the ESTs was too “insubstantial” to merit patent protection. Scientific research, noted Rader, is an incremental process, and ESTs, like a microscope, possess utility, albeit limited to the laboratory setting, as research tools useful in studying other compounds. ESTs, therefore, provide an identifiable benefit to society. Rader argued that the majority failed to recognize the complex nature of scientific discovery, and that “only the final step of a lengthy incremental research inquiry gets protection” under the majority holding. The decision to deny protection to inventions that contribute to the “useful arts” but not to an extent justifying the exclusive right afforded by a patent, contended Rader, is more properly founded in the nonobviousness requirement of 35 U.S.C. § 103 than in the utility requirement of 35 U.S.C. § 101.
This post was written by Sherri Oslick, PhD. Sherri studied chemistry as an undergraduate at Cornell University, bio-organic chemistry as a graduate student at MIT, and biochemistry and molecular biology as a postdoctoral associate at University of Chicago. She practices biotech patent law as a law clerk at MBHB in Chicago. She is an Hon. Howard T. Markey Distinguished Scholar at the John Marshall Law School and will graduate later this year. [oslick@mbhb.com]
Over the past two weeks, my family’s thoughts and prayers have been going out to the people of New Orleans. I have many relatives in Mississippi and Alabama, but they are lucky to live far enough north to have avoided the brunt of the storm. There are a number of ways to help those who were not so fortunate. One easy action is send a check to a relief organization. My firm, MBHB is matching employee donations and will be sending a chunk of funds to the McCormick Tribune Foundation here in Chicago.
The AIPLA has set up an assistance page to help in the recovery effort. So far, a number of law firms (both large and small) have offered to give free office space, assistance in brief filing, and free tuition to law school for displaced IP attorneys and law students. Lets hope this spirit of generosity continues.
The ABA also has set up Hurricane Katrina Disaster Relief pages for the attorneys, law offices, and many others needing legal assistance who have been caught in the catastrophic effects of Hurricane Katrina. [see Patent Baristas].
Network Commerce sued Microsoft for infringement of its e-commerce patent relating to the purchase of downloadable electronic content. The district court awarded summary judgment to Microsoft, finding that the company did not infringe either literally or under the doctrine of equivalents (DOE).
Specifically, the lower court found that Network Commerce’s extension of the patent to include Microsoft’s metafile downloads would vitiate the claim requirement that the download an executable file or program.
On appeal, the CAFC did not reach the vitiation requirement. Rather, the appellate panel found that even the basic requirements of element-by-element equivalents had not been sufficiently shown by the plaintiff because the expert declaration did not provide sufficiently specific testimony to prove a limitation-by-limitation analysis.
The expert declaration and other evidence relied on by Network Commerce supporting infringement by equivalents are generalized and do not provide particularized testimony and linking argument on a limitation-by-limitation basis. For this reason the evidence did not raise a genuine issue of material fact. Summary judgment of non-infringement under the doctrine of equivalents regarding metafiles was therefore proper.
Crater holds a patent on a coupling device that operates underwater. In a suit involving trade secret violations, the district court determined that the Government’s assertion of “Military and State Secret privilege” made it impossible for Crater to engage in discovery or to make out a prima facie case. The court therefore dismissed the claims.
On appeal, the CAFC found that the lower court correctly sustained the government’s assertion of the state secret privilege, but erred in dismissing the case.
For the state secret privilege to be properly asserted, “the head of the pertinent government department must formally invoke the privilege on behalf of the government. Then, after reviewing the declarations of government officials and the circumstances surrounding invocation of the privilege, the court must determine whether assertion of the privilege is appropriate.”
After reviewing confidential documents submitted by the Government, the CAFC concluded that the Government had claimed a legitimate state secret. Although the appellate panel recognized that proper resolution of the issues would be difficult in light of the state secret restriction on discovery, the court ordered that the facts of Crater’s claims must be further developed before making a determination of whether those claims should be dismissed.
In dissent, Judge Newman argued Crater should be given access to the Government documents and that the case should proceed in camera.
This case does not raise the constitutional debate about public trials; this is a commercial dispute, of interest only to the parties. It seems clear that the court’s requested remand cannot be implemented without risk of violating the secrecy order, with possible penalty. This is the third judicial cycle of this simple dispute. We should remand this case for in camera proceedings that would protect the information from public disclosure, and allow this dispute to come to closure. Trials in camera of issues subject to secrecy restraints are not new, and such trial would be the appropriate procedure in this case.
Noted attorney and author Hal Wegner has released his first review of IP cases for the October 2005 term of the Supreme Court. Of the seven cases reviewed, two are awaiting oral argument (Unitherm and Illinois Tool); four are awaiting a certiorari decision (Schering-Plough, KSR, Lab. Corp. and eBay); and one is still before the CAFC (RIM v. NTP).
1) Unitherm v. Swift Eckrich: Appellate procedure question of when a court of appeals may overturn a civil jury verdict. Argument scheduled for November 2, 2005.
2) Illinois Tool Works v. Independent Ink:Question of whether a patent creates a rebuttable presumption of market power in a Sherman Act tying case. Argument scheduled for November 29, 2005.
3) FTC v. Schering-Plough: Whether pioneer-generic settlement duopoly settlement agreements are permissible when agreement falls within the scope of the patent. On petition for cert. Odds of being heard are good.
4) KSR v. Teleflex: Whether teaching-suggestion-motivation test for obviousness should be changed. On petition for cert. Odds of being heard are OK.
5) Lab. Corp. v. Metabolite: Whether a medical diagnosis method patent is invalid as non-patentable subject matter under Diamond v. Diehr, 450 U.S. 175, 185 (1981). On petition for cert. Odds of being heard are low.
6) eBay v. MercExchange: Whether the current de facto rule of an injunction always resulting from a finding of infringement and validity should be changed. On petition for cert. Odds of being heard are low — although this is a volatile issue.
7) NTP v. Research in Motion: Extraterritorial reach of U.S. patent law. Last fall, the court denied Pellegrini’s petition for certiorari in a somewhat similar case. These issues will be heard by the Court in some case within the next two years.
Arizona Cartridge Remanufacturers Assn. v. Lexmark Int’l. (9th Cir. 2005).
ACRA sued Lexmark for unfair business practices based on Lexmark’s “prebate” program that allows customers to receive $30 off the price of a printer cartridge if they agree to return the empty cartridge to Lexmark — rather than allowing a third-party remanufacturer to refill the cartridge. ACRA argued that this practice was a restriction on alienability that should be barred.
The district court granted summary judgment in Lexmark’s favor, finding that the restriction on further use was a valid agreement and that Lexmark’s statements about the pricing were accurate.
On appeal, the 9th Circuit found that the post-sale restriction was allowable because the product was patented. (citing Monsanto v. McFarling). Post sale conditions are generally allowed if the good is “reasonably within the patent grant.” The EFF filed a brief in the case that was largely ignored.
DDC Commentary:
For me, the interesting part of this opinion is that restrictions on alienation (resale/repair) of consumer goods are generally not enforceable unless the good in question is patented.
In the wake of this and other cases, pundits are predicting that we will be seeing more “shrink-wrap” licenses restricting repair and modification attached to products that might need repair or modification.
If you plan to take such an action, be sure that your product is patented. (Query — will a design patent be sufficient?)
Andrx sued Elan for antitrust violations based on Elan’s enforcement of its patent and settlement agreement. The district court dismissed the case on the pleadings, finding that (i) Noerr-Pennington immunized Elan for its patent infringement litigation and (ii) Elan’s settlement agreements did not support an antitrust action.
On appeal, the Eleventh Circuit affirmed in part and reversed in part.
Noerr-Pennington: The appellate panel agreed that Noerr-Pennington“shields a defendant from antitrust liability for resorting to litigation to obtain from a court an anticompetitive outcome.” The primary exception to the doctrine arises when the litigation is a “sham.” In this case, it was clear that the litigation was “objectively baseless” and thus did not fall within the exception. (Elan had won a CAFC appeal).
Settlement Agreements: Andrx asserted that settlement agreements signed by Elan to terminate patent litigation were anticompetitive. Under the recent case of Schering-Plough v. FTC, the three elements are required to prevail on a Section 1 Sherman Act action: “(1) the scope of the exclusionary potential of the patent; (2) the extent to which the agreements exceed that scope; and (3) the resulting anticompetitive effects” in the relevant market.
The appellate panel found that Andrx should at least pass the pleading stage because the complaint demonstrated that (1) the patent was necessary for the sale of controlled release naproxen; (2) the license agreement was structured to “effectively bar any generic competitors from entering the market;” and (3) if true, this dynamic would have an anticompetitive effect on the market.
Under Section 2 of the Sherman Act, the Panel found that Andrx had properly alleged specific intent to monopolize and preserve a monopoly in the controlled release naproxen market. That pleading, according to the court, was sufficient to overcome a 12(b)(6) motion.
Link: The Supreme Court has been petitioned to hear the Schering-Plough case. If that hearing comes about, Andrx v. Elan may see a new appeal.
A new flurry of appeal briefs further complicates this closely watched case involving the fundamental question of how the U.S. patent laws can be asserted against foreign activities. Canada based Research-in-Motion (RIM) was at the losing-end of a 2003 patent infringement trial that resulted in a permanent injunction against its popular BlackBerry system. That judgment is stayed pending a series of appeals that have included two appellate court opinions. Now, RIM is asking the Court of Appeals for the Federal Circuit (CAFC) to hear the appeal as an en banc panel of all twelve judges.
Background
In August, 2005, the CAFC released a second appellate opinion in the case. The new opinion focused on the extent that a patent must be practiced within the U.S. to fall under the guise of § 271 of the Patent Act and specifically highlighted on the difference between system claims and method claims with relation to international activities. A system, the court held, is used “within the United States” so long as the United States “is the place at which the system as a whole is put into service, i.e., the place where control of the system is exercised and beneficial use of the system obtained.”A method, however, is only used “within the United States” if “each of the steps is performed within this country.”
As such, RIM (RIMM) was able to avoid infringement of NTP’s method claims but not the system claims because “RIM’s customers located within the United States controlled the transmission of information and benefited from the resulting exchange of information.”
The court also opined on the inapplicability of other portions of 271 to method claims:
Sale: The CAFC found it unlikely that a method claim could infringe through the sale provision of 271(a).
Component: Distinguishing Eolas, the CAFC implied that a method claim would rarely if ever trigger 271(f).
Section 271(g): The import provision only applies to physical articles — and thus cannot be used to find infringement of a method for transmitting information (as claimed by NTP).
Rehearing en Banc
In the wake of the revised appellate opinion, RIM has renewed its request for an en banc rehearing – hoping that a full panel of appellate judges will eliminate the “control and beneficial use” standard for transnational infringement.NTP opposes the rehearing.
RIM’s Petition for Rehearing
In its brief, RIM questioned the panel decision that “use” of a “patented invention” occur can “within the United States” under 35 U.S.C. 271(a) even if significant components or acts specified by the claims are outside the United States. RIM further argued that the panel’s distinction between method and system claims was not given any justification and is “untenable.”
The Panel erred on multiple grounds. First, the Panel fails to follow the plain statutory language extraterritorially limiting § 271(a) liability to “uses . . . within the United States.” As a result, the Panel makes an unsupported distinction between method claims and system claims creating a generic rule for all system claims that fails to consider the nature of the actual patented invention. Second, the Panel ignores basic cannons of statutory construction that forbid extending the patent statute extraterritorially absent clear Congressional direction. Third, the Panel erroneously finds § 271(a) liability based on Decca, a case decided under 28 U.S.C. 1498, the statutory language and purpose of which are entirely different from § 271(a). Fourth, the Panel misapplied that analysis and decided fact issues that should be left for the jury.
NTP’s Opposition to the Rehearing
In its opposition brief, NTP continues its barrage on RIM for its “attempts to delay purely for delay purposes.”
The Panel properly focused on the only pertinent activities for the 271(a) question presented: the acts of millions of U.S.-located BlackBerry users that put into service their U.S.-located BlackBerry handhelds to send and receive wireless emails millions of times each day using U.S.-located transceivers and US.-located email systems equipped with thousands of U.S.-located email gateway redirectors sold by RIM. The only pertinent RIM activities are those establishing inducement and contributory liability – activities conceded by RIM on appeal. Other acts that RIM raises are irrelevant. Indeed, under RIM’S reasoning, use by BlackBerry customers in other countries negates the tort of infringement arising from use in the United States. Such analysis lacks any basis in law, precedent, or reason.
NTP argued that the longstanding principles of the Decca case clearly guide this case, and that “unless [the CAFC] sua sponte intends to overturn Decca and Decca II in a manner that the Supreme Court and Congress have refused, RIM presents no issue that warrants further review.”
Microsoft’s Amicus Brief in Support of the Petition
Microsoft took time to point-out the inconsistencies between the NTP decision and the handful of other recent cases involving extraterritorial application of U.S. patent laws, and the software giant asked the court to rehear this case in conjunction with its own pending AT&T v. Microsoft to ensure a “uniform and consistent body of case law concerning the territorial reach of 35 U.S.C. § 271.”
NTP v. Research in Motion, (271(f) “component” does not apply to method claims).
AT&T v. Microsoft, 414 F.3d 1366 (Fed. Cir. Jul. 13,2005) (271(f) “component” applies to method claims and software being sold abroad);
Eolas v. Microsoft, 399 F.3d 1325 (Fed. Cir. Mar. 2,2005) (271(f) “component” applies to method claims);
Pellegrini v. Analog Devices, 375 F.3d 1113 (Fed. Cir. 2004) (271(f) “component” does not cover export of plans/instructions of patented item to be manufactured abroad);
Bayer v. Housey Pharms, 340 F.3d 1367 (Fed. Cir. 2003) (271(g) “component” does not apply to importation of ‘intangible information’).
Regarding policy, Microsoft argued that limiting 271(a) U.S. patent law to not include any foreign actions, would create “an incentive for American companies to locate certain aspects of their systems outside the United States, primarily to avoid infringement liability. Such an outcome would likely result in loss of jobs, skilled workers, capital, and information technology, abroad.” On the other hand, Microsoft argued that allowing infringement for export of components under 271(f) creates “an incentive to move their research aid development abroad.”
Canadian Government’s Amicus Brief in Support of the Petition
In a rare move, the Government of Canada filed a brief supporting the petition for rehearing en banc. The brief notes that the panel opinion does not include any discussion of the principles of comity and international law that should be considered when determining the extent that U.S. laws should be interpreted to limit activities taken on foreign soil.
“The reissued panel opinion lacks any acknowledgment or discussion of the effect of, or the effect upon, long-established international understandings and agreements regarding national jurisdiction over intellectual property. Because the decision of the panel was neither explained nor justified in terms of contemporary, internationally-accepted principles of national jurisdiction, the opinion raises questions concerning fundamental principles upon which this international intellectual property system has harmoniously been based for well over a century.”
The brief recognized that the eventual conclusion may well be that patent laws should extend transnationally. However, the the thrust of this brief is that an expansion of extraterritorial application of the law should include a thorough analysis of the international implications.
Canadian Chamber of Commerce in Support of the Petition
The group of Canadian businesses argue that the standards created by the RIM opinion create confusion by the artificial distinction between system and process claims. Further, the group argue that the court should respect the rule of comity when construing a statute.
As the Supreme Court recently stated, courts “ordinarily construe[] ambiguous statutes to avoid unreasonable interference with the sovereign authority of other nations.” F. Hoffman-La Roche v. Empagran, 542 U.S. 155 (1994).
Seven Networks, Inc. Brief in Support of the Petition
Seven Networks argues simply that patents are “national in scope.” And, without congressional action, patents should remain national in scope.
On its face, 35 U.S.C. §271(a) is national in scope, and the statute has no extraterritorial reach. It applies to “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States”. When a statute is silent as to its extraterritorial application, the presumption is that the statute does not have extraterritorial effect.
With reference to “control and beneficial use” standard derived from Decca, Seven argued that Decca’s decision required ownership of the foreign-located system elements. Because RIM customers do not own the Routers located in Canada, they cannot be said to have control or be beneficially using that element.
Information Technology Association of Canada Brief in Support of the Petition
The ITAC brief takes the stance that method and system claims should be treated consistently. ITAC correctly points out that it is often quite easy to draft a “system” claim that contains the same limitations as a parallel “method” claim.
NTP’s Consolidated Response to the Amicus Briefs
No amici disputes the fact that one of the patents does not even give rise to the issue of territoriality (NTP wants to avoid this altogether and just get paid).
The Canadian Gov’t Brief confirms that U.S. patent laws apply when the RIM system is used Within the U.S.
Microsoft supports the decision finding infringement of the system claims.
The Canadian Chamber of Commerce seeks an improper advisory opinion (on product-by-process claims).
The ITAC brief, prepared by RIM’s patent firm (Kirkland & Ellis) merely rehashes RIM’s old arguments.
Seven Networks hopes to avoid infringement by placing its own routers abroad.
Intel’s Amicus Brief in Support of the Petition
In a brief supporting an en banc rehearing, Intel first noted that this issue is of great importance to today’s economy where many thousands of businesses operate multinationally. Like RIM, Intel could find no “principled or policy basis” for the outcome of a multinational infringement case to depend on the form of the preamble of the claim.
There is no reason to hold that practicing every step is essential to infringement of a claimed process, yet hold that use of every component is not essential to infringement of a claimed system.
Regarding 271(f), Intel discussed the fact that, although the four recent Federal Circuit cases discussing 271(f) purport to distinguish one another, “the ultimate holdings are difficult to square, and they lack a common analytical approach.”(See, Eolas, AT&T, Pellegrini, & NTP). “The Court has yet to take a consistent and holistic view of infringement liability in the transnational context.”
Finally, Intel asked the court to place the burden on patent drafters — arguing that it is possible to draft claims to virtually any invention that avoids the need to extend 271(a) to cover extraterritorial activities.
In a brief filed specifically in response to Intel’s brief, RIM argued (i) that it had been filed after the deadline and thus should be considered untimely; (ii) that Intel does have a financial interest in the case; and (iii) that Intel’s brief simply rehashes old arguments.
Symbol v. Lemelson (Fed. Cir. 2005).
Network Commerce v. Microsoft (Fed. Cir. 2005). 
Crater Corp v. Lucent (Fed. Cir. 2005). 
Arizona Cartridge Remanufacturers Assn. v. Lexmark Int’l. (9th Cir. 2005). 
Andrx Pharma v. Elan (11th Cir. 2005) 
NTP v. Research-in-Motion (en banc review). 
In its brief, RIM questioned the panel decision that 
“The reissued panel opinion lacks any acknowledgment or discussion of the effect of, or the effect upon, long-established international understandings and agreements regarding national jurisdiction over intellectual property. Because the decision of the panel was neither explained nor justified in terms of contemporary, internationally-accepted principles of national jurisdiction, the opinion raises questions concerning fundamental principles upon which this international intellectual property system has harmoniously been based for well over a century.”