December 2009

Judge versus Jury (Again): Who Should Decide the Question of Obviousness?

Patent

Acushnet Co. v. Callaway Golf Co200912150145.jpg . (on petition for certiorari 2009)

The Supreme Court recently rejected Medela’s petition for certiorari arguing that the conclusion of obviousness should be made by a judge rather than a lay jury.

In the wake of Medela’s failure, Acushnet (maker of Titleist) is now asking the Supreme Court to hold that “a court reviewing a jury’s [obviousness] verdicts must always independently render its own legal conclusion regardless of whether one or all of the jury’s underlying findings are accepted as adequately supported by the evidence.” Taking that a step-further, Acushnet argues that a jury’s verdict on the question of obviousness should be seen as “entirely advisory as to the ultimate legal conclusion.”

Ascushnet takes-issue with the Federal Circuit’s holding that the “jury could have reasonably concluded that Acushnet failed to prove invalidity due to obviousness.” In petitioner’s view, the appellate panel should not have given any regard to the jury’s legal finding.

AcushnetPetition.pdf

Cases where Written Description is Satisfied, but Enablement is Lacking

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In Ariad, an en banc Federal Circuit is set to determine whether (and how) the written description requirement is separate and distinct from enablement. The questions presented read as follows:

1. Whether 35 U.S.C. § 112, paragraph 1, contains a written-description requirement separate from the enablement requirement.

2. If a separate written-description requirement is set forth in the statute, what is the scope and purpose of that requirement?

I’m interested in finding cases where the written description requirement has been critical to the outcome. More particularly, I’m interested in seeing cases where the invention is sufficiently described but is not enabled. The recent major written description cases are seemingly only tied to written description doctrine because the panels chose to focus on that argument rather than enablement. A case-in-point is Ariad v. Eli Lilly. As in most written description cases, Ariad’s patent was also challenged on enablement grounds. However, rather than reaching the enablement question, the panel majority held that question moot in the wake of their finding that the asserted claims were invalid on written description. The same result occurred in University Of Rochester v. G.D. Searle & Co., Inc., 358 F.3d 916 (Fed. Cir. 2004) (holding that “in view of our affirmance of the district court’s decisions [invalidating the claims] on the written description ground, we consider the enablement issue to be moot and will not discuss it further.”). The LizardTech decision held the asserted claim invalid under both enablement and written description doctrines.

Using the language lf LizardTech, what are examples of cases where the specification provides enough disclosure “to convince a person of skill in the art that the inventor possessed the invention” but not enough to “enable such a person to make and use the invention without undue experimentation.”

Best Mode at the BPAI

Patent

Ex parte Lin, Appeal No. 2009-4275, Application No. 10/255,216 (BPAI October 30, 2009)

The Examiner rejected Lin’s patent application for failure to comply with the best mode requirement of 35 USC § 112p1. The Board reversed that rejection because Lin had not disclosed any embodiments. “The best mode provision of 35 U.S.C. § 112 is not directed to situations where no mode has been set forth, and therefore we cannot sustain this rejection.” (Citing Spectra-Physics and In re Glass)

Although Lin won that argument, the board affirmed parallel rejections of lacking enablement, utility, and definiteness.

Under the Federal Circuit’s 2002 precedent of Bayer v. Schein Pharma, the best mode requires “actual disclosure regardless of whether [the best mode] would be within the knowledge of one of ordinary skill in the art.”

Predicted 2009 Patent Application Filings

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200912111021.jpg

via CNN in an article titled: “Recession’s latest victim: U.S. innovation.”

Dennis Crouch’s Comment: Patent filings are clearly down, but I don’t know that I agree with the reporter’s conclusion that therefore “U.S. innovation took a step backward for the first time in 13 years.”

There is almost certainly a link between patenting and innovation. However, a single-year drop in patenting does not necessarily correlate with a drop in innovation — especially since there is often a lag of 6-12 months from the invention date to the utility patent filing date.

Further, I tend to attribute huge rise in patenting activity over the past two decades more to a perceived strengthening of the patent right and less to an actual increase in innovations. In recent years, court decisions and threatened action from congress may have reduced the perceived potential value of the patent right — thus lowering demand. Perhaps now, applicants are filing fewer ‘junk’ patents.

Finally, the report also misses the reality that about half of US patent applications stem from a non-US entity and those filings often have a multi-year lag between the innovation and the US patent application filing. It will be interesting to see which group (US vs. Foreign entities) have seen greater reduction in their patent filing activity.

First-to-File versus First-Inventor-to-File

Patent,

In the US, an inventor’s evidence of pre-filing conception, diligence, and reduction-to-practice can help win a priority contest against a competing inventor and can also negate would-be prior art. Around the world, the vast majority of other countries ignore pre-filing invention activity — instead relying only on an inventors patent application filing date to establish priority. Colloquially, we call the US system a “first-to-invent” (FTI) while the non-US systems are referred to as “first-to-file” (FTF).

Yesterday’s guest post discussed the potential legislative change to US patent law that would largely eliminate any consideration of pre-filing invention evidence. Interestingly, the authors refer to the potential new system as “first-inventor-to-file” (FITF) as a way to distinguish between our traditional FTI system and the European FTF system.

Although the guest authors here used the term as a way to distinguish, my experience is that the first-inventor-to-file (FITF) terminology is more frequently used as a propaganda tool by proponents of the new US legislation. By adding “inventor” to the name, proponents of the switch are hoping to sideline the FTI argument that a later inventor is not actually an inventor. Perhaps most notable on this front is PTO Director David Kappos. In a recent article directed to independent inventors, Kappos repeatedly referred to the benefits of the “first-inventor-to-file” system. [Link] In a recent speech, Director Kappos also distinguishes between FTF and FITF systems — suggesting that a FTF system allows non-inventors to file patent applications.   

The new process isn’t a “first to file” system, it’s the “first inventor to file” system. So there is no risk of someone who learns about your invention being able to beat you to the patent office; because they’re not an inventor. As you know, any filer has to sign an oath and declaration under penalty of criminal sanctions. [Link]

Of course, there is no country in the world today that grants patents on stolen ideas. (Although some, including the US historically allowed what might be termed “patents of importation.”)

Invention-Date-Focused vs. Filing-Date-Focused: I would argue that all of these naming systems are incorrect because they improperly focus attention on the priority contests between two inventors claiming rights over the same subject matter. Most priority issues arise in the context of putative prior art reference used in an obviousness analysis and the question is whether the invention date evidence can be used to negate the prior-art effect of the reference. In that context the FTI and FTF language do not really make sense. I would propose a switch in terminology to distinguish between systems that are filing-date-focused and those that are invention-date-focused.

The “Matrix” for First-Inventor-To-File: An Experimental Investigation into Proposed Changes in US Patent Law

Patent

Guest Post by Brad Pedersen and Justin Woo (Read their Full Article at http://ssrn.com/abstract=1518660)

The Patent Reform Act of 2009 would replace the current “first-to-invent” (FTI) system with a new “first-inventor-to-file” (FITF) system. While touted as a way to harmonize the US system with “first-to-file” (FTF) systems used in other countries, an experimental investigation of a matrix of two hundred typical fact patterns for two competing inventors was analyzed under all three systems (FTI, FITF and FTF) to test this assumption. Based on the matrix analysis, it appears that if FITF is adopted there likely will be changes in applicant behavior and significant extra costs for at least several years as a result of the transition to a new system; and, it is unclear whether FITF really gets the US any closer to patent harmonization.

RawAnalysis WeightedAnalysis
 Caption: Scenarios where both parties have filed applications

The proposed FITF system has a tendency to behave as an entirely different system in certain scenarios, rather than as a midway point between the existing FTI and FTF systems. A raw analysis of the results reveals a discrepancy wherein a larger percentage of second inventors are awarded a patent under the FITF system than predicted by a shift toward a FTF system. A weighted analysis reflecting likely applicant behavior from the implementation of the FITF system emphasized, rather than diminished, these discrepancies with expected results.

It appears that the “springing public disclosure” exception created under the proposed FITF system to replace the one-year grace period found in current US patent law is one of the primary reasons for the discrepancies. This exception allows applicants to control the start of the grace period that disqualifies the public disclosures and even prior filed applications of others from being prior art based on the timing of the applicant's own public disclosure. The springing nature of this exception provides unique incentives for applicants to manipulate the timing of the public disclosure of their inventions in order to manipulate the grace period, thereby creating results seemingly inconsistent with core principles of the existing FTI and FTF systems.

For a link to the entire paper, go to:http://ssrn.com/abstract=1518660

The Requirement that the Written Description be Concise

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ProlixBy Dennis Crouch

The Patent Act requires that the written description of an invention be “concise.”  35 U.S.C. 112p1. The meaning of that requirement is unclear, but but the language of Section 112 at least suggests that a written description needs to be concise in order to satisfy the enablement requirement. Of course, there is a tension between providing a disclosure that is “concise” and at the same time “full.” In Markman v. Westview, the Supreme Court recognized this tension — noting that the description must be “complete yet concise.”

In a 1967 district court case, the court focused briefly on the requirement — noting that the “descriptions contained in the patent in suit are sufficiently concise and clear to enable one skilled in the art to construct that which is taught by the patent.” San Marino Electronic Corp. v. George J. Meyer Mfg. Co., 155 U.S.P.Q. (BNA) 617 (C.D. Cal. 1967).

In my brief search, I found no cases invalidating a patent because its description was not concise. The most on-point case appears to be a pre-1952 Eighth Circuit case where the court came close to invalidating a family of patents based on their wordiness:

We think that the patents are unnecessarily prolix in verbiage and there should have been fewer claims more simply stated. They border on failure to comply with the statutory requirements concerning succinct description and particular pointing out and claiming. But consideration of the file wrappers and the trial court record has persuaded that those skilled in the art have understood them and the courts have had them explained.

National Aluminate Corp. v. Permutit Co., 145 F.2d 175 (8th Cir. 1944). It is interesting that part of the court’s problem with the patents was that they had too many claims. The USPTO does reject individual claims that it deems overly wordy or “prolix.” The idea behind those rejections is that sometimes overly-wordy claims may have the “net result of which is to confuse rather than to clarify.” However, the USPTO prolix rejections are grounded in Paragraph 2 of Section 112 — for failing the requirement of “particularly pointing out and distinctly claiming the subject matter.”

The probably more accepted use of the “concise” requirement is explained in the decision captioned Application of Knowlton, 481 F.2d 1357 (C.C.P.A. 1973). In that case the precurser to the Federal Circuit relied on the requirement to limit the power of the enablement requirement.

[I]t must be borne in mind that the disclosure need not only be full, clear and exact to satisfy the statute, it must also be concise, and that the disclosure is directed to those skilled in the art. The amount of precision necessary in any given case is always a matter of degree. Absent special circumstances it is not required that every nut, bolt and rivet actually used in mechanical inventions be described, or, in chemical cases, that the electron orbital patterns for a claimed compound be set forth.

In the right case, a defendant may well convince a court to give the concise requirement its full weight and invalidate a patent whose specification is written in confusing and overly-wordy language.

Notes:

  • I searched the BPAI database of decisions (1997–2009) and found only one case reviewing a rejection where the Examiner found claims invalid as prolix “since they contain long recitations or unimportant details which hide or obscure the invention.” Ex parte Nagano, App. No. 1996–4094 (Bd. Pat. App. Inter. 1999). In Nagano, the Board reversed the rejection – finding no support for the Examiner’s generalized assertions that the claims were confusing because of their length or contained unimportant details.

Patently-O Bits and Bytes No. 305

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  • Worksharing: Website of the five IP Offices: http://www.fiveipoffices.org.
  • GoogleNexis?: Google Scholar now includes judicial opinions and law review articles. [Link] The site does a nice job of ranking opinions according to citation history. However, as with their patent database, Google’s caselaw database does not appear to be kept up-to-date. The search features will be useful as a powerful free first-cut, but attorneys will not use the site for any type of comprehensive search or full citation-check. As Law School Librarian Richard Leiter wrote, “I don’t think that West or Lexis have much to worry about.”
  • ABANexis?: If you want to search only law reviews (that are available online), you might look at the ABA’s Search Engine (powered by Google). [Link]
  • Is the 1981 CCPA case of Rasmussen still good law? [Updated with the right year of the case]

Patents and the Movie Industry: Stopping Nicholas Cage

Patent

By Dennis Crouch

Global Findability v. Summit Entertainment (D.D.C. 2009)

In an earlier post, I reported on an odd complaint that charges Summit Entertainment with patent infringement based on that company's making and distributing the film "Knowing" that stars Nicholas Cage. In preparation for this post, I watched the movie this past weekend and also contacted the attorneys representing Global Findability.

In the movie, Cage plays the role of an MIT physics professor who sees a string of numbers and correctly determines that those numbers represent prophetic information about particular catastrophic events. In particular, the string of numbers were indicative of the coordinates of the event (lat and long) as well as the date and number of people killed in each event. (Screenshot below). It turned out that the numbers were whispered to little kids by angels/aliens. (I thought they were angels, but my daughter (age 5) thought they were aliens.) The kids then wrote-down the numbers.

As it turns out, Global Findability's asserted patent (No. 7,107,286) covers devices, mediums, and methods for storing global position information (longitude, latitude & altitude) as a single "all natural" number.

Without revealing their particular theory of infringement, Global Findability's attorney agreed that the allegation is "based on the claimed method being performed in the movie." In perhaps the most relevant sequence from the movie, Cage's character identifies a particular sequence of numbers and enters them into Google Maps as a latitude and longitude. The result is a New York City location. Those latitudes and longitudes appear to be actual (rather than made-up) — providing some amount of credibility to the claims of infringement.

As far as I know, this is the first time that I have seen charges of infringement based upon a performer's actions.

Patent.Law186

If the case continues to judgment, its outcome will likely turn on questions of infringement and patentable subject matter. Notably, the asserted method is for encoding the single number, while Cage's character only decoded the material. Likewise, there was no indication that the child-actors writing the codes performed the "converting step." Rather, that was done by the angels/aliens presumably acting outside of the US. See RIM v. NTP (each step of a method must be performed within the US). Of course, in creating the script/props, the production company most likely performed the encoding step. One problem with that theory is that the movie was filmed in Australia. These issues could be eliminated if the plaintiffs somehow proved that the "use" distributing/screening the film involved "use" of the method. However, in my mind that theory is extremely lacking.

This case is also interesting as it sits in the shadow of the Supreme Court's hearing in Bilski v. Kappos. That case questions the patentability of newly created methods that are not directly tied to a "machine." In 2004, Andrew Knight filed a series of patents covering various storylines or plots. Cleverly, Knight included a limitation that the plot is within a movie stored on a DVD (or other computer-readable file). Those patents have been rejected as lacking patentable subject matter under Section 101 and are now on appeal to the Board of Patent Appeals (BPAI). In his rejection, the examiner indicated that:

"It is only the technological uses of … ideas that are patentable — not merely the association of technology with those ideas. Recording a movie on a DVD is not a patentable technological use [of] and idea because … this does not do anything unexpected or novel. DVDs play movies. Recording a movie that has a different plot on a DVD does not change the technology of the DVD."

As is often the case, the Examiner's conclusions regarding Knight's patent applications likely correct even though his explanation is lacking.

Patent.Law185

Notes: During prosecution, the applicant (Global Findability) amended the claims to indicate that the single number representation of location was an "all-natural" number. That point was boldly emphasized in a response to an office action rejection. However, "all-natural numbers" are not defined in the specification or in the prosecution history.

Europe Moves Toward European Patents and European Patent Court

Patent

The European Union (EU) is working toward a major reform of its patent laws that would create a European Patent and a European Patent Court for handling patent infringement litigation. Although the European Patent Office (EPO) serves as the primary examining body for most patents being prosecuted in Europe, the actual issuance of patent rights as well infringement litigation are still handled country-by-country. 200912071129.jpg

In a December 4, 2009 meeting, a unanimous EU Competitiveness Council adopted a set of conclusions supporting the new regime. Under the proposal, the new patent court would have exclusive jurisdiction over civil litigation related to EU and European patents. The new regime would likely require a revision of the European Patent Convention (EPC).

The Leading UK Patent Blog IPKat indicates that this is “happy news.” IPKat quotes a UK IPO press release that “This business-friendly deal will make patenting and innovating easier and more affordable for British companies. In particular, innovative SMEs will have more flexibility when choosing how to patent across Europe”.

The EU Press Release suggests that lowering costs is one of the most important goals: “The creation of an EU Patent would help to improve the current situation where a patent designating only 13 EU Member States is already 11 times more expensive than a US patent.”

Although more likely now than ever, this same debate has been ongoing for the past 40 years in Europe.

Links:

Federal Circuit Lowers Bar for Declaratory Judgment Jurisdiction When Patentee is a Holding Company

Declaratory Judgment, Patent, Patent Cases 2009

Hewlett-Packard v. Acceleron 09-1283.pdf (Fed. Cir. 2009)

Acceleron’s patent No. 6,948,021 covers a hot-swappable server blade. In September 2007, Acceleron wrote to “call [HP’s] attention to the referenced patent.” HP responded that they “would be willing to agree not to file” a declaratory judgment action for 120 days. Going back, Acceleron simply suggested that no declaratory judgment jurisdiction existed.

Rather than negotiating, HP filed a declaratory judgment action in Delaware District court. However, Judge Robinson dismissed that case – finding the potential for litigation by Acceleron “too speculative a prospect to support declaratory judgment jurisdiction.”

On appeal, the Federal Circuit found Acceleron’s actions were sufficient to support a declaratory judgment action — a holding that the court admits “undoubtedly marks a shift from past declaratory judgment cases.”


pic-85.jpg

The Constitution limits federal court jurisdiction to actual cases and controversies. Under the Supreme Court’s 2006 MedImmune decision, the question of declaratory judgment jurisdiction is answered after considering “all the circumstances” rather than any bright line rule. Subsequently, the Federal Circuit indicated that declaratory judgment jurisdiction exists when a patentee asserts rights against “certain identified ongoing or planned activity of another party, and where that party contends that it has the right to engage in the accused activity without license.” (Quoting SanDisk). Likewise, a party who has “actually been charged with infringement of a patent” will be able to identify declaratory judgment jurisdiction. (quoting Cardinal Chem).

Here, Acceleron argues that a patent owner should have some mechanism for contacting another party to discuss patent rights without raising declaratory judgment jurisdiction. Without disagreeing with that premise, the Federal Circuit held that this is not such a case.

Although Acceleron made no direct charges of infringement, the company did indicate that its patents were “relevant” to HP’s product line; that HP’s response must come within two-weeks; and asked HP not to file a DJ action. “Under the totality of the circumstances, therefore, it was not unreasonable for HP to interpret Acceleron’s letters as implicitly asserting its [patent] rights.”

Although dicta, the Federal Circuit also suggested that the “totality of the circumstances” analysis should included the fact that Acceleron is “solely a licensing entity.” That fact apparently creates a greater shadow of litigation because “without enforcement [Acceleron] receives no benefits from its patents.”

David Kappos and The Impact of KSR – a unique opportunity for our profession

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Guest Post by Paul Cole, Visiting Professor, Intellectual Property Law, Bournemouth University, UK

On Tuesday 24 November, David Kappos made a posting on the Director’s Forum including the following statement:

Some have suggested that the Office is determining obviousness in a way that stifles innovation by refusing patents for truly inventive subject matter. They’ve asked us to provide examples of non-obvious claims in view of KSR. Such examples would serve as a complement to the examples of obvious claims already in the guidelines.

David Kappos gave a presentation at the AIPLA Annual Meeting in Washington on October, and in a question and answer session that followed there were three questions which concerned KSR, more than any other topic. The two questioners who preceded me expressed dissatisfaction with seemingly unjust and arbitrary rejections for lack of inventive step. I asked whether the US examination guidelines on inventive step could be brought into line with those of the EPO, where positive and negative examples are carefully balanced, and the suggestion created a burst of applause from the audience.

More detained comments on the suggestion are found in a paper on KSR that was published in the John Marshall Review of Intellectual Property Law in 2008[1]. For convenience of reference, the final section is set out here:

The USPTO has been accused of having become significantly less applicant-friendly following the KSR decision. This may reflect concerns about “patent quality” and is reflected in the Guidelines given to examiners. A big difference is noticeable between the EPO Examination Guidelines and those of the USPTO.

The EPO Examination Guidelines at Part C Chapter IV give examples relating to the requirement of inventive step. Considerable care has been taken to balance these examples. Examples illustrating the application of known measures in an obvious way and in which inventive step can be ruled out are balanced by further examples showing the application of known measures in a non–obvious way and in which an inventive step is therefore to be recognized. An example of an obvious and consequently non-inventive combination of features is balanced by an example of a non-obvious and consequently inventive combination of features. Examples of obvious and consequently non-inventive selection are balanced by examples of non-obvious and consequently inventive selection. The single example relating to overcoming a technical prejudice shows a situation where the application should be allowed, not refused. A reader of these Guidelines is made aware that although many applications are open to objection, there are many others that cover meritorious inventions and should be allowed.

When the USPTO issued its post-KSR Guidelines, from the standpoint of a prosecution attorney they made depressing reading. For example, the first heading which refers to combining prior art elements according to known methods to yield predictable results gives two examples, one of which is Andersons-Black Rock, Inc. v. Pavement Salvage Co. and the other of which is Ruiz v SAB Chance Co. in both of which obviousness was established. There is no balancing example in which inventive character was established. There follow five other headings illustrated by examples, each and every one of which shows the claimed subject matter to be obvious. The final heading concerns the TSM test which is not illustrated by any example. Under the heading “Consideration of Applicants Rebuttal Evidence” there are cursory indications that an applicant might have something relevant to say in reply, and that, for example, they might argue that the claimed elements in combination do not merely perform the function that each element performs separately. Might it not have been a good idea to inform the Examining Corps that if an applicant can demonstrate a new and unexpected result, this is strong prima facie evidence of inventive step, that this fact is supported by several opinions of the U.S. Supreme Court and that where such evidence is available an applicant should unless there are compelling reasons to the contrary expect a grant decision to follow? Experience in the EPO is that where an applicant can demonstrate a credible technical problem that he has solved, he will almost always be granted a patent and that although other objections, e.g. “one–way-street” or “bonus effect” are available, circumstances where such objections succeed are rare, as acknowledged by the U.K. High Court in Haberman.

Instructions to examiners are of general importance to the public because they are the main tool used during examination and the important event for most applicants is grant or refusal by the patent office, litigation of patents (even in the U.S.) being uncommon. Instructions are even more important for examiners who are trainees and those who have only recently acquired signatory authority because they are likely to rely chiefly on those instructions and to take some time to achieve a deep understanding of case law. It is important to teach examiners when to make objections and the appropriate grounds for doing so, but is it not equally important to teach them when applications should be allowed and to show them examples of patents whose validity has been upheld, as the EPO does? Quality patent examination is not just a matter of ensuring that applications lacking merit are reliably refused but also of ensuring that meritorious applications are reliably granted.

It now seems that there is at least a chance that the suggestion that I and apparently others have made will be acted on, and that the possibility is under active consideration in the USPTO. Examples of decisions on new function or result which are contained in my paper include the nineteenth century Supreme Court cases Winans v Denmead and Washburn & Moen Manufacturing, Co. v. Beat’Em All Barbed-Wire Co, these decisions being selected on the basis of their instructive character and accessibility to the widest possible range of readers.

For the most to be made of this opportunity, we as students and users of the patent system can help by suggesting additional positive decisions which it would be good for the USPTO to include in the revised inventive step Guidelines. Hopefully readers will respond with references to good Board of Appeals, District Court and CAFC cases, and I look forward to reviewing a large number of hopefully constructive suggestions posted here in response.

[1] Paul Cole, KSR and Standards of Inventive Step: A European View, 8 J. MARSHALL REV. INTELL. PROP. L. 14 (2008)., downloadable from /media/docs/2011/06/Cole.pdf.

Disclosing “Related Cases” at the Federal Circuit: Eli Lilly’s Written Description “Secret”

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Guest Post by Ted Sichelman, University of San Diego School of Law

As any diligent reader of Patently-O would know, the Federal Circuit is considering en banc whether to retain the written description requirement—and, if so, in what form—in the pending case, Ariad Pharmaceuticals v. Eli Lilly & Co.

Lilly, which was found liable in the district court, argues in its en banc brief that the Federal Circuit should retain a strong and independent written description requirement. In the event Lilly’s arguments are successful—and Ariad’s patent is invalidated—Lilly stands to save roughly $250 million (in present value) of potential damages and likely settlement payments. (For an explanation of the calculation, click here.)

Yet, in another case pending at the Federal Circuit, Lilly v. Teva, Lilly—as the patentee—is on the other side of the fence on the written description issue. Specifically, Lilly appealed a finding that some of its patents are invalid for lack of written description. If Lilly wins this appeal, assuming infringement holds up, it stands to gain roughly $750 million (in present value) in on-going profits from the sale of its blockbuster osteoporosis drug Evista. (Ironically, Evista is one of the accused infringing drugs in Ariad.)

Thus, in simple dollar terms—focusing on Lilly’s pending patent cases at the Federal Circuit—Lilly has more money to gain by losing the Ariad appeal than winning it. Presumably, Lilly has other financial interests motivating its position in Ariad. For instance, Lilly has been subject to more than several accusations of infringement over the years and its financial wherewithal to engage in intensive R & D may make its patents relatively immune to written description attacks.

But, even so, Lilly might not care as much as the usual appellant if it loses the Ariad case. To be fair to Lilly and its lawyers, I have not seen any evidence showing that they have not vigorously argued their case. Nevertheless, Lilly’s large financial interest in Teva is concerning, especially given that Ariad could be one of the most important Federal Circuit decisions in recent years.

So when I read Lilly’s en banc brief to the Federal Circuit in Ariad, I was surprised that Lilly did not disclose its position in Teva. And it seems very unlikely that Lilly’s lawyers in Ariad were unaware of the issue in Teva, since at least three of them are working on both cases. Moreover, the district court in Teva mentioned the pending Ariad case in its final order, noting that it was bound by existing precedent to apply an independent written description requirement.

The Federal Circuit has a rule that requires litigants to disclose certain information about other pending cases. The applicable rule, Fed. Cir. R. 47.5, reads in relevant part:

Each principal brief must contain a statement of related cases indicating: …. (b) … any case known to counsel to be pending in this or any other court that will directly affect or be directly affected by this court’s decision in the pending appeal. If there are many related cases, they may be described generally, but the title and case number must be given for any case known to be pending in the Supreme Court, this court, or any other circuit court of appeals.

In my view, one could read the rule such that Lilly should have disclosed the Teva case in its Ariad brief. Unfortunately, the scope of this rule is sufficiently ambiguous to be construed otherwise. In particular, it is unclear whether “related cases” in the preamble of Rule 47.5 is, so to speak, a “limitation”—namely, does a case qualifying under Rule 47.5(b) need to be a “related case” in addition to meeting the requirements stated in that sub-section, or does that sub-section fully define the kinds of “related cases” that need to be disclosed? Arguably, the latter is the better reading, but it does not seem compelled by the language of the rule. Moreover, it is unclear exactly what “directly affect or be directly affected by this court’s decision” means. Since the rule contemplates that there may be “many related cases,” arguably this clause should be read broadly, but again, such an interpretation does not seem mandated by the rule.

What does seem clear, though, is that the roughly $750 million Lilly potentially has to gain in Teva from losing the Ariad case is important information that any Federal Circuit judge would want to know when reading Lilly’s briefs and listening to its arguments. As such, the Federal Circuit should clarify the scope of Rule 47.5—like it has done in a few cases (here and here)—or explicitly revise the rule to ensure that parties are clearly required to disclose cases like Lilly v. Teva.

For example, the Federal Circuit could—similar to DC Circuit Local Rule 28(a)(1)(C)—define a “related case” as including “any pending case involving at least one of the same parties and the same or similar issues.” Such a definition would capture cases like Lilly v. Teva, but would not overly burden litigants. With this sort of rule in place, potentially contrary interests of parties in other cases—particularly those worth large sums—would be appropriately unveiled on appeal.

Ted Sichelman is an Assistant Professor at the University of San Diego School of Law, where he teaches patent law and other intellectual property courses. He has neither represented nor has any financial interest (other than from market index funds) in Ariad Pharmaceuticals, Eli Lilly, or Teva.

Patently-O Bits and Bytes No. 304

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  • Next Monday (December 7, 2009) at 2:00 P.M. in Room 201, the Federal Circuit will hear en banc arguments in the case of Ariad Pharmaceutical v. Eli Lilly. The case questions whether Section 112 of the Patent Act creates a written description requirement that is separate and distinct from the enablement requirement. An audio version of the oral arguments is expected to be available that same day. [Calendar]
  • PATracer reports on the pending Federal Circuit case of Kawasaki v. Bombadier. In that case, Kawasaki had sued to enforce the terms of a settlement agreement. Rather than enforcing the agreement, Judge Folsom of the E.D. Tex. dismissed the lawsuit – holding that his court lacked subject matter jurisdiction over what had become a contract dispute. In the 1994 case of Kokkonen v. Guardian Life, the Supreme Court held that unless incorporated into a court order, disputes over a settlement agreement must stand on its own jurisdictional feet. [LINK]
  • Eriq Gardner asks Can a Science-Fiction Movie Infringe a Tech-patent? His question is prompted by a lawsuit where – you guessed it – a patentee (Carl Burnett & his company Global Findability) has sued Summit Entertainment for making/distributing the Nicholas Cage film entitled “Knowing” in which Cage is portrayed as acting like he is using an allegedly infringing geo-locator. The complaint was filed by the Cahn Samuels firm in Federal Court in Washington DC. In the movie setup, the geo-locating technology is based on information provided in 1958 (and rediscovered in 2008). If pretending to be an infringer is actionable, this reconstructed history may also render the patent obvious… The movie was critically panned, but Cage’s star power still helped bring in almost $80 million in box office revenues.
  • Global Findability’s patent is actually quite interesting. It focuses on a mechanism that converts latitude, longitude, & altitude readings into a “single discrete all-natural number.” I.e., one number to uniquely identify a position anywhere (relative to the earth). [LINK]

 

Design Law: Protecting Copyrighted Designs

Design Patent, Patent, Patent Cases 2009

Design Ideas v. Things Remembered, 3:07-cv-03077 (C.D. Ill. Filed March 16, 2007)

Perry Saidman is a frequent contributory to Patently-O — especially when the topic turns to design patent law. In a recent case, his firm used copyright law to protect its client's wire-flower design. The flowers were incorporated into candle holders and other small useful objects.

Although cheap ($35), early copyright registration is important for collecting infringement damages. Registration is also helpful in establishing priority and ownership. In this case, the designer registered early and was awarded $750k for willful infringement.

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Notes:

Case: Design Ideas, Ltd., v. Things Remembered, Inc., Case No. 3:07-cv-03077 (C.D. Ill. Filed March 16, 2007) (Garfield Goodrum served as lead attorney for the plaintiffs).

Jury Verdict Form: 2000005312.pdf

The original complaint also included charges of trademark and utility patent infringement. The broadest claimof the utility patent (No. 6,398,058) includes a limitation that "loops formed to simulate a flower" are used to connect the base to the top:

1. A container constructed of metal wires, comprising:

   a base including a lower support wire bent to establish the predominant shape of said base;

   a top including an upper support wire bent to establish the predominant shape of said top;

   a plurality of wire figures, each of said wire figures having a first wire forming a central body and a second wire forming a plurality of loops outwardly extending from the central body and circumferentially offset from one another, said central body and said plurality of loops formed to simulate a flower, wherein said first wire and said second wire are separately formed and coupled together; and

   a sidewall connecting said lower support wire and said upper support wire to space said lower support wire from said upper support wire, said sidewall comprising said plurality of said wire figures.

Federal Circuit Affirms Summary Judgment of Obviousness for Bulk EMail Patent

Anticipation, Obviousness, Patent, Patent Cases 2009, Patentable Subject Matter, , ,

Perfect Web Technologies v. InfoUSApic-79.jpg (Fed. Cir. 2009)

Perfect Web’s asserted patent covers a method of managing bulk e-mail distribution. Claim 1 of the application (filed in 2000) reads as follows:

1. A method for managing bulk e-mail distribution comprising the steps:

(A) matching a target recipient profile with a group of target recipients;

(B) transmitting a set of bulk e-mails to said target recipients in said matched group;

(C) calculating a quantity of e-mails in said set of bulk e-mails which have been successfully received by said target recipients; and,

(D) if said calculated quantity does not exceed a prescribed minimum quantity of successfully received e-mails, repeating steps (A)-(C) until said calculated quantity exceeds said prescribed minimum quantity. (Pat. No. 6,431,400).

The district court held the claims invalid as anticipated and obvious as well as for failing to claim statutory subject matter under Section 101. On appeal, the Federal Circuit upheld the obviousness finding and left the alternative reasons undecided.

Of course, in 2000, targeted bulk e-mail was already around, and the defendants provided prior art evidence of steps (A)-(C). That is, marketers were already identifying target recipients, sending out e-mails, and calculating the percent received. Missing from the prior art was step (D) – iteratively repeating steps (A)-(C) until the number of recipients reaches the a prescribed quantity.

Evidence of Common Sense: The district court held on summary judgment that KSR style “common sense” would lead one of ordinary skill in the art to perform the iterative step (D). On appeal, the Federal Circuit affirmed that finding – holding particularly that the finding of common sense does not require “explication in any reference or expert opinion.”

Although a court need not have documentary support of its common sense analysis, a court (or patent examiner) must at least clearly explain its reasoning.

We reiterate that, on summary judgment, to invoke “common sense” or any other basis for extrapolating from prior art to a conclusion of obviousness, a district court must articulate its reasoning with sufficient clarity for review.

In this case, the appellate panel agreed that the idea of repeating already known steps until a threshold is met was simply a common sense extension:

Thus, this last step, and the claim as a whole, simply recites repetition of a known procedure until success is achieved. Recognizing this, the district court explained: “If 100 e-mail deliveries were ordered, and the first transmission delivered only 95, common sense dictates that one should try again. One could do little else.”

The court added an interesting caveat regarding expert testimony and the level of one of skill in the art — noting that expert testimony may well be necessary for “complex” technology.

If the relevant technology were complex, the court might require expert opinions. Here, however, the parties agreed that ordinary skill in the relevant art required only a high school education and limited marketing and computer experience. No expert opinion is required to appreciate the potential value to persons of such skill in this art of repeating steps (A)-(C).

Obvious to Try: As a corollary to its common sense holding, the appellate court also held that the additional step (D) would have been “obvious to try” under KSR. “[S]imple logic suggests that sending messages to new addresses is more likely to produce successful deliveries than re-sending messages to addresses that have already failed. . . . [I]ndeed, the predictable and actual result of performing step (D) is that more e-mail messages reach more recipients.”

Long-felt Need: The patentee argued that a nonobviousness conclusion was supported by evidence of the secondary consideration of long-felt need. Particularly, the method helps solve the recognized competing problems of reaching customers without “burning up” the mailing list by oversending.

The Federal Circuit rejected these arguments because the patentee had failed to provide any evidence of improved efficiency beyond “bare assertion.” In addition, the court suggested that any proof of long-felt need would be insufficient to “overcome [the] strong prima facie showing of obviousness.” (quoting Asyst Techs (2008))

Claim Construction: Interestingly, the court issued its summary judgment order prior to claim construction. The Federal Circuit found no error because construction of the disputed claim terms would not have changed the obviousness outcome.

Notes: The patent was originally titled “Statement regarding federally sponsored research or development.” That is apparently a typographical error fixed in a subsequent certificate of correction.   

Federal Circuit Orders Another Case Transferred Out of Texas

Patent, Patent Cases 2009, Pharma,

In re Hoffamann-La Roche

pic-78.jpg

(Fed. Cir. 2009)(on writ of mandamus)

Novartis sued Roche and its partners in the Eastern District of Texas for infringement of its HIV treatment patent. After being denied by District Court Judge Folsom, Roche petitioned the Federal Circuit for a writ of Mandamus — asking the appellate court to order the case to be transferred to the Eastern District of North Carolina. Following its own TS Tech precedent as well as the 5th Circuit’s Volkswagen case, the Federal Circuit complied and has ordered the case transferred.

Under TS Tech, the appellate court will order a transfer on mandamus when the alternate forum is “clearly more convenient.” Here, the appellate court found that important sources of proof are found in North Carolina (the location where the accused drug was developed); that the trial would impact the ongoing reputation of North Carolina residents (Duke professors); and that several non-party witnesses would be within the subpoena power of the North Carolina court. At the same time, the appellate court saw “no connection between this case and the Eastern District of Texas except that in anticipation of this litigation, Novartis’ counsel in California converted into electronic format 75,000 pages of documents . . . and transferred them to the offices of its litigation counsel in Texas.” Although not completely disregarding these litigation-preparation activities, the appellate court clearly deemed them less important in the venue considerations.

Patently-O Bits and Bytes No. 303

Patent,
  • Professor Lichtman and his students at UCLA reenact Bilski v. Kappos. [Download the MP3]
  • Jeremy Grushcow discusses “three need-to-know Canadian patent decisions that impact pharma, biotech and generic companies”: [LINK]
    • Lundbeck v. Ratiopharm (the Canadian Patent Act imposes a duty of candor).
    • Bayer v. Canada (the government will only list a formulation pharma patent in its patent register (i.e., Orange Book) if the patent claims include limits to “all of the approved medicinal ingredients” in the formulation).
    • Sanofi-Aventis v. Hospira (a disclaimer of scope may be filed after receipt of a notice of allegation).
  • Director Kappos discuses the “impact of KSR” on his blog: [LINK]

KSR has unquestionably refocused the obviousness inquiry by reinvigorating the fundamental questions of Graham. Because the Supreme Court clarified that teaching-suggestion-motivation was not the sole test of obviousness, the Graham analysis is not to be carried out in a rigid manner. As a result, some claims that may have been found to be non-obvious before KSR will now correctly be found to be obvious.

Inventors and practitioners will need to take these developments into account when preparing and prosecuting applications. For example, it may be necessary to review a broader cross-section of prior art than was previously necessary, or to consider filing evidence of unexpected results earlier rather than later in the course of prosecution. By being proactive, practitioners will expedite prosecution and avoid unnecessary fees and RCE filings.  

  • New lawsuits against Kappos (in his role as PTO director)
    • Cephalon France v. Kappos (patent term adjustment recalculation).
    • Komipharm International v. Kappos (demanding that it be recognized as the assignee of its patent rights).
    • Tolerx v. Kappos (patent term adjustment).
    • Centre National De La Recherche Scientifique v. Kappos (patent term adjustment).
    • Mosaid Tech. v. Kappos (patent term adjustment).

Patently-O Bits and Bytes No. 303

Patent,
  • Professor Lichtman and his students at UCLA reenact Bilski v. Kappos. [Download the MP3]
  • Jeremy Grushcow discusses “three need-to-know Canadian patent decisions that impact pharma, biotech and generic companies”: [LINK]
    • Lundbeck v. Ratiopharm (the Canadian Patent Act imposes a duty of candor).
    • Bayer v. Canada (the government will only list a formulation pharma patent in its patent register (i.e., Orange Book) if the patent claims include limits to “all of the approved medicinal ingredients” in the formulation).
    • Sanofi-Aventis v. Hospira (a disclaimer of scope may be filed after receipt of a notice of allegation).
  • Director Kappos discuses the “impact of KSR” on his blog: [LINK]

KSR has unquestionably refocused the obviousness inquiry by reinvigorating the fundamental questions of Graham. Because the Supreme Court clarified that teaching-suggestion-motivation was not the sole test of obviousness, the Graham analysis is not to be carried out in a rigid manner. As a result, some claims that may have been found to be non-obvious before KSR will now correctly be found to be obvious.

Inventors and practitioners will need to take these developments into account when preparing and prosecuting applications. For example, it may be necessary to review a broader cross-section of prior art than was previously necessary, or to consider filing evidence of unexpected results earlier rather than later in the course of prosecution. By being proactive, practitioners will expedite prosecution and avoid unnecessary fees and RCE filings.  

  • New lawsuits against Kappos (in his role as PTO director)
    • Cephalon France v. Kappos (patent term adjustment recalculation).
    • Komipharm International v. Kappos (demanding that it be recognized as the assignee of its patent rights).
    • Tolerx v. Kappos (patent term adjustment).
    • Centre National De La Recherche Scientifique v. Kappos (patent term adjustment).
    • Mosaid Tech. v. Kappos (patent term adjustment).

Patently-O Bits and Bytes No. 303

Patent,
  • Professor Lichtman and his students at UCLA reenact Bilski v. Kappos. [Download the MP3]
  • Jeremy Grushcow discusses “three need-to-know Canadian patent decisions that impact pharma, biotech and generic companies”: [LINK]
    • Lundbeck v. Ratiopharm (the Canadian Patent Act imposes a duty of candor).
    • Bayer v. Canada (the government will only list a formulation pharma patent in its patent register (i.e., Orange Book) if the patent claims include limits to “all of the approved medicinal ingredients” in the formulation).
    • Sanofi-Aventis v. Hospira (a disclaimer of scope may be filed after receipt of a notice of allegation).
  • Director Kappos discuses the “impact of KSR” on his blog: [LINK]

KSR has unquestionably refocused the obviousness inquiry by reinvigorating the fundamental questions of Graham. Because the Supreme Court clarified that teaching-suggestion-motivation was not the sole test of obviousness, the Graham analysis is not to be carried out in a rigid manner. As a result, some claims that may have been found to be non-obvious before KSR will now correctly be found to be obvious.

Inventors and practitioners will need to take these developments into account when preparing and prosecuting applications. For example, it may be necessary to review a broader cross-section of prior art than was previously necessary, or to consider filing evidence of unexpected results earlier rather than later in the course of prosecution. By being proactive, practitioners will expedite prosecution and avoid unnecessary fees and RCE filings.  

  • New lawsuits against Kappos (in his role as PTO director)
    • Cephalon France v. Kappos (patent term adjustment recalculation).
    • Komipharm International v. Kappos (demanding that it be recognized as the assignee of its patent rights).
    • Tolerx v. Kappos (patent term adjustment).
    • Centre National De La Recherche Scientifique v. Kappos (patent term adjustment).
    • Mosaid Tech. v. Kappos (patent term adjustment).