September 2007

Design Patents: Corporate Parts Buyer as Ordinary Observer

Design Patent, Patent, Patent Cases 2007,

PatentLawPic036Arminak v. Saint-Gobain Calmer (Fed. Cir. 2007).

In yet another serious blow to design patent protection the Federal Circuit has affirmed a lower court ruling that Arminak’s spray nozzle design is not infringed by Calmer.

Design patent infringement is defined both in 35 U.S.C. 271 and 289.  According to Section 289, a design patent is infringed by unauthorized commercial manufacture, use, or sale of the design or a “colorable imitation.”

Whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or (2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit, but not less than $250, recoverable in any United States district court having jurisdiction of the parties. 35 U.S.C. 289.

Infringement: Overshadowing the statutory guidelines is the CAFC’s judicially created infringement jurisprudence. According to the CAFC, infringement requires satisfaction of two distinct tests: First, in the eyes of an “ordinary observer,” the accused design as a whole must be deceivingly similar to the patented design. Second, the accused design must appropriate one or more points-of-novelty that distinguish the design from the prior art.

Ordinary Observer: Like the PHOSITA in utility patent cases, the ordinary observer is a mythical being. However, instead of being ‘skilled in the art,’ the ordinary observer is aware of the patented design, but is not an expert in the art.

Arminak manufactures and sells spray nozzles. However, Arminak does not sell on a retail level.  Rather, the nozzles are purchased by other manufacturers who join them with bottles full of product.

The corporate nozzle buyers can distinguish between Arminak & Calmer nozzles without much trouble. Once assembled, retail customers have difficulty in distinguishing between the nozzles once assembled.  The case then turns on whether the ordinary observer is defined as the corporate buyer of the nozzle or a retail customer of the fully assembled product.

Sitting by designation, Judge Holderman determined that the ordinary observer should be defined by the patentee’s corporate structure. Because Arminak’s products pass through a middle-man for further processing, it cannot count the downstream retail purchasers as ordinary observers who “buy and use” the sprayer. Rather, the ordinary observer is the corporate nozzle buyer.  (Thus, eventual customer confusion regarding the final product makes no difference).

It was undisputed that a corporate buyer would not be deceived by overall similarities between the accused and patented designs — thus no infringement.

Point of Novelty: The panel also found that the accused design did not appropriate any “points of novelty” of the patented invention. In doing so, the court found that a side-by-side detailed comparison between the accused product and the patent design drawings was appropriate.

To establish infringement in a design patent case, the district court is required to compare the patented design with the accused design. Without comparing the patented design with the accused design, there was no way for the district court to determine whether an ordinary observer would find the accused design deceptively similar and whether the accused design appropriated points of novelty.

For utility patent experts, this type of analysis is second nature. However, for over 100 years prior to founding the CAFC, the rule has been that design patent infringement jurisprudence does not allow for such “side by side” examination. See Gorham Manufacturing Co. v. White, 81 U.S. 511 (1871) (rejecting a side-by-side comparison as leading to an ‘expert’ result rather than that of an ‘ordinary observer’).

Inducement Requires Proof of Underlying Direct Infringement

Contributory Infringement, Patent, Patent Cases 2007

PatentLawPic033ACCO v. ABA Locks and Belkin (Fed. Cir. 2007).

ACCO’s patent covers a method for locking a computer. Belkin’s lock can be used in an infringing manner (as well as in a non-infringing manner). At trial Belkin and ABA were found liable for willfully inducing infringement.

Inducement requires an underlying direct infringement; some action to encourage the direct infringement; and specific intent to encourage the infringement. Direct infringement requires either evidence of “specific instances of direct infringement” or proof that using accused device “necessarily infringes.”

Here, ACCO provided no evidence that any customer (apart from the expert witness) ever used the lock in an infringing manner. And, although the arguably “most natural” way of using the lock would infringe, there were other non-infringing ways of using the lock. (Belkin described a non-infringing use in its instruction manual).

  • The court suggested that a customer survey or other customer testimony would have been appropriate.

Based on ACCO’s failure to prove direct infringement, the CAFC reversed — finding no infringement.

Notes:

  • This decision is a reminder to litigators, not anything new.

IPWatchDog.com For Sale

Patent

Eugene Quinn is known by many as the IP Watchdog. Over the years, Quinn has developed his IPWatchdog.com site as a valuable resource. Now the well-traveled Internet resource including its contents is up for auction at SitePoint.  Minimum bid is $10,000, but the bidding may go well higher. Earlier this year, Patents.com was sold by patent attorney Carl Oppedahl for “an undisclosed amount reportedly between $1 to $2 million.”  (Carl — You’ve got to tell us…). 

Invention Obvious in Part Because Inventors Were Experts

Method Claims, Obviousness, Patent, Patent Cases 2007, PHOSITA

PatentLawPic032Daiichi Sankyo v. Apotex (Fed. Cir. 2007).

Apotex filed an ANDA to begin making a generic version of Daiichi’s patented ear infection medication method – FLOXIN Otic. Daiichi sued and won a bench trial. On appeal, the CAFC reversed — finding the patented invention obvious.

Level of Skill: The nonobvousness doctrine requires an examination of what would be available to a person having ordinary skill in the art (PHOSITA). That inquiry is premised on a definition of the mythical PHOSITA.  The general theory is that highly educated and trained PHOSITA know more and tend to think more inventions are obvious. On the other hand, a PHOSITA with little education or training would have more difficulty in making connections and finding obviousness.

The 1983 Orthopedic Equipment decision outlines factors for determining a PHOSITA – including education level of the inventor.

Here, the CAFC found that the lower court erred by picking a pediatrician as the PHOSITA in creation of compounds to treat ear infections without damaging a patient’s hearing. Rather, the skill level should be an otologist who is engaged in developing pharmaceutical formulations. The court primarily based its PHOSITA Skill Level on the inventors’ skill level and the skill level of their peers (which, almost by definition will be the same).

Obviousness: Based on the high level of skill in the art, the CAFC concluded that an otologist would have found the patented method obvious.

Reversed — Patented Invention is Obvious

DDC Comment: Although the education level of the inventor appears to be relevant to determining the PHOSITA skill level, there are a few reasons why that data point should be excluded from the list of factors. The common major mistake here is to search for a PHOSITA capable of making the invention rather than simply searching for the level of a skilled worker in the area. The PHOSITA skill level inquiry is not a search for what it takes to be a successful inventor. Rather, the PHOSITA is merely a skilled worker.  The inventor’s biographical information may be indicative of a skill level for invention, but that is not the PHOSITA inquiry. 

Under 35 USC 103(a), patentability of an invention “shall not be negatived by the manner in which the invention was made.” Of course, the process of inventing is intimately tied-in with the inventor’s skill and education level. In essence, use of the inventor’s biographical information in determing the PHOSITA skill level allows the court to ask whether the invention would have been obvious to someone standing in the shoes of the inventor. That methodology nothing more than a backdoor approach to asking whether any steps that the inventor took included non-obvous leaps — a legally impermissible question.

Notes:

  • This case was originally decided in July 2007, but was recently republished as a precedential decision. The OrangeBookBlog covered the original release.

Examiner’s Oral Promise Does Not Bind PTO

Patent, Patent Cases 2007, Patent Prosecution

ScreenShot051In re Milton (Patent Petition 2007, App. No. 09/938,465)

During a telephone conversation, the Patent Examiner stated that a replacement office action would be forthcoming. Relying on that statement, the applicant did not respond to the already pending office action. Unfortunately, the Examiner did not issue the new office action and the case went abandoned.

37 C.F.R. 1.2 makes clear that an applicant should not rely on any oral promise from a patent Examiner. Applying this rule, the director of petitions rejected Milton’s petition for revival.

The oral promise could have immediately been memorialized in an interview summary — something that was not done in this case until after the abandonment.

At the time of Petitioner’s reliance, the understanding was a mere oral promise. This section of the C.F.R. expressly prohibits Petitioner’s reliance on the oral understanding, and withdrawal of the holding of the abandonment based on an action which is in contravention to a regulation would be improper.

Petition denied.

Notes:

  • Thanks to Hal Wegner for providing information on this case.
  • The real party here is HP.

KSR Extended to Obviate Component Purified from Known Mixture

Chemical, Obviousness, Patent, Patent Cases 2007, Pharma

Aventis Pharma & King Pharma v. Lupin Ltd. (Fed. Cir. 2007).

Altace is the King/Aventis brand of ramipril – a top-selling ACE inhibitor.  The patent claims ramipril formulated “substantially free of other isomers.” The district court found the patent not invalid, but only by a slim margin. On appeal the CAFC reversed – finding the patent invalid as obvious.

Prior Art: One reference (‘944 patent) was filed as a continuation-in-part of an already abandoned patent application. That application was eventually revived, but Aventis argued on appeal that the ‘944 patent should not be awarded the filing date of the parent.  The CAFC found this a potentially interesting argument, but refused to hear the argument because Aventis had failed to make the argument at the district court level.

The appellate panel also agreed that the experimental results of a Shering Doctor constituted 102(g)/103(a) prior art because the Doctor had not abandoned, suppressed, or concealed her prior invention.

Obviousness of a Purified Form: The district court, ruling pre-KSR, found the patent nonobvious. On appeal, the CAFC took a different view – finding that the purified form of a known mixture is prima facie obvious if a PHOSITA would have some reason to believe that the mixture derives properties from particular components.

However, if it is known that some desirable property of a mixture derives in whole or in part from a particular one of its components, or if the prior art would provide a person of ordinary skill in the art with reason to believe that this is so, the purified compound is prima facie obvious over the mixture even without an explicit teaching that the ingredient should be concentrated or purified.

The prima facie case of obviousness is especially difficult to rebut where, as here, the potency of the mixture varies directly with the amount of isomer in the mixture.

The court implicitly distinguished this case from Forest Labs — noting that obviousness may be rebutted by showing difficulty in purifying the mixture.

[A] purified compound is not always prima facie obvious over the mixture; for example, it may not be known that the purified compound is present in or an active ingredient of the mixture, or the state of the art may be such that discovering how to perform the purification is an invention of patentable

Reversed, Patent Invalid as Obvious

Gillespie v. DWIDAG: Prosecution Arguments Limit Claim Scope

Claim Construction, Patent, Patent Cases 2007

ScreenShot050Gillespie v. DWIDAG Systems (Fed. Cir. 2007)

During prosecution, Gillespie argued around a cited prior art mine roof bolt reference — arguing that the collar of the bolt ‘appears to be cylindrical on the outside, thus impractical…’ Reviewing claim construction de novo, the appellate panel led by Judge Newman limited the claim scope to only cover non-cylindrical collars. (Following the maxim that a “patentee is held to what he declares during the prosecution of his patent.”).

Gillespie argued that the claims should not be limited by his statements because the non-cylindrical collar shape did not turn out to be material to allowance. (The Examiner provided alternative reasons for allowance). The CAFC rejected that potential loophole – finding that Gillespie’s argument was sufficient regardless of its importance in the prosecution process.

DWIDAG’s bolts were thus found to not infringe this new construction.

Notes:

  • The court appears to have been careful not to use the term disclaimer. 

 

Patent Reform 2007: House of Representatives Passes H.1908

Patent, Patent Legislation, , , ,

Legislative patent reform still has a long road to travel before reaching its conclusion. However, the passage of H.1908 by the House of Representatives represents a major leap forward along the path. The following are some highlights of the statute as passed. [H.1908.As.Passed].

First to file system: Obviousness and novelty would now be considered as of the “effective filing date.”  Novelty grace period would be eliminated except for the inventor’s own disclosures. Although unclear, the grace period appears to be completely eliminated for obviousness analysis. Interferences are gone.

Damages: Reasonable royalty calculations (the most common damage awards) would all require courts to conduct a thorough analysis to ensure that damages are equal to the “economic value [of the invention] properly attributable to the patent’s specific contribution over the prior art.” The entire value of a product or process can only be the basis for royalty calculations if the innovation is the “predominant basis” for market demand of the product. (a showing that may be impossible in most cases). Overall this would reduce damage awards.

Search Reports: PTO would be granted discretion in ordering search reports for all applications except those by a new group called ‘micro-entities.’

Treble Damages: The statute explicitly calls-out ‘willfulness’ as the sole reason for enhanced damages then severely limits the facts where willfulness can be found. Overall this reduces the likelihood of awarding treble damages.

Post-Grant Review: In addition to reexamination, a post-grant review proceeding would be available if filed within 12–months of issuance or with the patentee’s permission.

Open Examination: Anyone may submit prior art for any patent or pending application along with an explanation of why the art is important.

Tax Methods: A patent would not be available for a newly invented tax planning method. Tax planning methods do “not include the use of tax preparation software or other tools used solely to perform or model mathematical calculations or prepare tax or information returns.”

Venue and Jurisdiction: Strong limitations on venue would likely eliminate E.D.Texas as a potential choice.

Interlocutory Appeal: A district court would be given discretion to certify interlocutory appeals of claim construction decisions.

Inequitable Conduct: Inequitable conduct must be pled with specificity following FRCP Rule 9b. Inequitable conduct rules would be made explicit in the statute. Overall, this weakens the defense of inequitable conduct.

PTO Regulatory Power: The statute would give the PTO power to make the continuation rule changes that it has already implemented.

Patent Trial and Appeal Board: Following John Duffy’s Suggestion, the statute would have the board appointed by the Secretary of Commerce rather than the PTO Director.

Study of Patent Damages: The PTO will study how damage awards have changed based on the changes in the law.

Patently-O TidBits

Patent
  • Dr. Tafas has submitted an amended complaint and withdrawn his motion for preliminary injuntion to stop implementation of the continuation rules.
  • A sweeping patent reform bill passed in the House of Representatives. Action now moves to the Senate. IPO’s leader Herb Wamsley may force me to eat my hat.
  • BNA is hosting a conference called Patent Obviousness on October 1 at the Arlington Ritz. Given the confusingly similar name, BNA is offering $150 discount to Patently-O readers who sign-up online: go to legaledge.bna.com for online registration and enter discount code “blog” at check out. (Price is still $1000 after discount)

Extending Liebel-Flarsheim: “distinctly different” embodiment of claim elements must be enabled

Enablement, Patent, Patent Cases 2007, Patent Prosecution

ScreenShot049Automotive Technologies International v. BMW, et al. (Fed. Cir. 2007).

ATI’s patent claims are directed to an automotive side impact crash sensor used to trigger an airbag and include the following means-plus-function limitation:

“means responsive to the motion of said mass upon acceleration of said housing in excess of a predetermined threshold value, for initiating an occupant protection apparatus”

Following ATI’s suggestion, the district court construed the means limitation to include both mechanical and electronic sensor structures. Then, based on this interpretation, the district court ruled the patent invalid for lack of enablement. (summary judgment).  

On appeal, the CAFC affirmed the ruling — finding that the specification did not enable the full scope of the claimed invention.

The specification describes the mechanical sensor in detail with multiple figures. The electronic sensor, however, is only shown in a sparse “conceptual” Figure 11 (see image at right) and described in broad terms as potentially operating “through variety of technologies using, for example, optics, resistance change, capacitance change or magnetic reluctance change.”

Enabling One Embodiment Is Insufficient: Following on the heels of Liebel-Flarsheim v. Medrad, this case reaffirms the principle that the full scope of a claim must be enabled. Enablement of a single embodiment is not sufficient. Thus, the patent’s enablement of one mode of practicing the invention (the mechanical sensor) was not sufficient to satisfy the enablement requirement.

Looking back, Liebel-Flarsheim discussed “full scope” enablement as being “at least reasonable enablement of the scope of the [claim] range.” Here, the CAFC further defines that principle by noting that electronic sensors must be particularly enabled because they are “distinctly different” from the enabled mechanical sensor.

Novel Aspects Must Be Enabled: ATI also argued that Figure 11 and its accompanying text were enabling — especially when coupled with the knowledge of one having ordinary skill in the art. This argument was rejected based on the CAFC’s combined measure of law and fact. As a matter of law, enablement of the novel aspects of an invention must be enabled by the specification even if implementation would have been within the PHOSITA’s skill level. As a matter of fact, the CAFC concluded that sensor mechanism must be a novel aspect based on statements in the specification that side impact sensing is a “new field” and that the only available side-impact switch was a crush sensor.

Notes:

  • Its unclear how the enablement doctrine will work in conjunction with the doctrine of equivalents.
  • The summary judgment was reviewed de novo for clear and convincing evidence of non-enablement sufficient to overcome the patent’s presumption of validity.
  • Disclaimer: My former firm, McDonnell Boehnen Hulbert & Berghoff LLP, handled this appeal on behalf of the plaintiff. Although I have not worked on the case, MBHB took-over the case while I was of counsel last year.

Video Explaining the Need for Patent Reform…

Patent

Patent reform is largely being driven by corporate entities who argue that patent protections are currently too strong. The following video offers a skeptical version of this lobbying activity:

The real question: Can Apple & Microsoft combine forces to create a better video about the harms caused by today’s patent laws — and will they allow it to be posted on youtube?

Injunction against “any products” that infringe is overbroad; Injunction against potential future contributory infringer is not overbroad

Patent

PatentLawPic030Forest Labs v. IVAX (TEVA) and CIPLA (Fed. Cir. 2007). (Read Part I of this case analysis)

(J.Lourie) IVAX’s infringement began when it filed an abbreviated new drug application (ANDA) with the FDA for approval to manufacture a generic version of Forest Lab’s blockbuster antidepressant Lexapro. Under 35 USC 271(e)(2), the mere submission of the ANDA is considered an “act of infringement.”

At the conclusion of the case, the district court issued an injunction ordering IVAX to refrain from making or using “any products” that infringe Forest’s patent. CIPLA, IVAX’s planned distributor, was also included in the injunction.

IVAX and CIPLA both appealed the injunctions.

Overbroad Injunction: An injunction may only extend to adjudicated products (or methods) and those “not more than colorably different.” In this case, the CAFC found that the injunction language was overbroad because it applied to “any products” that infringe the patent. The court consequently modified the injunction to specifically focus on the products at issue.  (Note: Under 271(e)(4), the court may issue injunctive relief to prevent the future manufacture and sale of the infringing product).

Injunction against CIPLA for Potential Contributory Infringement: IVAX is a direct infringer based on its ANDA submission. CIPLA, on the other hand, made no such submission and is not a direct infringer.  Likewise, CIPLA is not a contributory infringer based on the ANDA submission. As the majority noted – “Ivax is not currently liable for infringement, as long as it is only pursuing FDA approval.”

Despite any current infringement, the Appellate Panel found that it is proper to issue an injunction to prevent potential future contributory infringement.

“[If the drug were sold] CIPLA would be contributing to the infringement by IVAX, so the injunction should cover both partners.”

Judge Shall dissented – arguing that CIPLA should not suffer under an injunction.

(more…)

Appellate Panel Upholds Forest’s Lexapro Patent

Patent, , ,

PatentLawPic030Forest Labs v. IVAX (TEVA) and CIPLA (Fed. Cir. 2007).

The Court of Appeals for the Federal Circuit today upheld Forest Labs patent on its billion dollar SSRI Lexapro (escitalopram oxalate) — rejecting IVAX’s arguments that the patent is anticipated and obvious. Based on two FDA extensions, the patent is set to expire on March 14, 2012.

This case is an important stepping stone in our new understanding of obviousness.  Interestingly, in its multi-page discussion of obviousness, the appellate panel did not mention the Supreme Court’s recent landmark decision of KSR v. Teleflex. 

History: Forest holds an expired patent on a racemic form of citalopram. After considerable effort, Forest’s scientists doubled the strength of the drug by isolating the (+) stereoisomer (which turned out to be the only active isomer) and patented that isomer in a “substantially pure” form.  A prior art pharmacologic paper had suggested that the (-) stereoisomer would be the potent isomer, but that reference did not describe the preparation of the enantiomer.

(more…)

Patent Reform News

Patent

House Report:Please see the House Report on HR1908 explaining the House’s view of why this particular patent reform bill is necessary. The report includes a marked-up version of the current version of the bill.  A vote is being threatened for this week or next.

Law Firms Loving Reform: Advertising with Google Adwords and other online media is relatively cheap — especially when compared with typical IP firm advertising costs that can easly run $10,000 for a single full sheet ad in an ill-read monthly. Typically, online ads serve as a way for smaller companies receive publicity.  Interestingly, several major lawfirms — notably Fish & Richardson along with Thelen Reid — have set up camp on Google for any searches relating to Patent Reform.

 

Damages: Contentious History Between Parties Justifies High Royalty Rate

Damages, Patent, ,

CaliperMitutoyo Corp v. Central Purchasing (Fed. Cir. 2007)

Mitutoyo and Central have been wrangling for more than a decade over Mitutoyo’s patent covering electronic calipers. The history includes Central’s 1994 agreement to exit the market; a 1995 DJ finding that the patent is not invalid or unenforceable; and a 2006 summary judgment against Central.

Both parties appealed on damages issues:

Reasonable Royalty: On appeal the CAFC found the lower court’s 29.2% reasonable royalty rate acceptable. Although a seemingly high number, Central’s profit margin is around 70%. Most interestingly, the appellate panel held that the parties “contentious history” supports a high royalty rate. This serves as a reminder that a the reasonableness of the royalty still takes-into-account the positions of the parties.

Lost Profits: Although Mitutoyo also sells calipers, Central was able to avoid lost profit damages by showing that the products had little customer or price overlap. (Central’s proof included economic evidence that the market for its $21 product was highly elastic – indicating few of its customers would have instead purchased Mitutoyo’s $100 product.)

Willful Infringement: Mitutoyo’s willful infringement claim was dismissed on the pleadings under FRCP 12(b)(6) for failure to state a claim and failure to prosecute. On appeal the CAFC reversed – finding that Mitutoyo’s allegation of willful infringement coupled with Central’s long history with the patent were “plainly more than sufficient to meet the requirement of Rule 8(a)(2) for pleading a willful infringement claim and avoid dismissal.” Similarly, the appellate court held that failure to file a summary judgment motion on willfulness does not indicate “an intent to abandon [the] willfulness claim.”

In its August 2007 Seagate en banc opinion, the CAFC raised the culpability standard for willful infringement. This case takes a step back to remind courts that the enhanced damages theory does not (yet) require a showing of fraud.

Standing of a licensee to sue: Mitutoyo’s primary US licensee was also a party to the litigation. However, a licensee only has co-plaintiff standing if it holds “at least some of the proprietary rights” of the patent. Here, the licensee has no standing because Mitutoyo also allows one other company to import and distribute its products in the US.

 

Patent Reform News Update

Patent

Design Patent Litigation

Design Patent, Patent

PatentLawPic029In the past twenty years, the US Patent & Trademark Office has issued just over 268,000 design patents. During that time, almost exactly one percent (1%) of those issued design patents have been litigated to some degree. (i.e., at least a complaint was filed asserting infringement of the patent). The most commonly litigated are design patents covering ornamental features of shoes (7% of litigated patents) and lamps (5% of litigated patents). Other commonly litigated products include furniture (chairs & tables), eyeglasses, and golf equipment.

35 USC 171 outlines the scope of design patents as “any new, original, and ornamental design for an article of manufacture.”  The MPEP narrows this definition to only include “visual characteristics” of a design – although a court could force the PTO to include other sensory characteristics.  I suspect a product with ornamental textures – even if not visually distinct — could be protected (especially if the product was designed for blind individuals).  A further (and improbable) stretch would be to define design to include associated music, scent, and taste.

Protection for Fashion

Patent

Many product developers point to a large gap in the US protection for newly created articles and devices. In particular, product designs receive little coverage from any of the major IP regimes of patent, copyright, & trademark. Today, the fashion industry is the squeaky wheel and may be the most likely to receive sui generis coverage from Congress.  If the Senate Bill becomes law, we may finally have true fashion police.