Endowed Chair in IP and Junior Faculty Workshop at the University of Indiana McKinney School of Law

By Jason Rantanen

Two announcements today from the University of Indiana McKinney School of Law.  The first is about IU's candidate search to fill its new IP Chair; the second is for a Junior Faculty Workshop on Intellectual Property Issues in the Pharmaceutical Industry that IU will hold in December 2012.

Endowed Chair in Intellectual Property
Indiana University Robert H. McKinney School of Law is pleased to announce that it is launching a search for the first endowed chair created by the gift of Robert H. McKinney to the (aptly named) Indiana University Robert H. McKinney School of Law.  The chair will be in Intellectual Property and will also serve as the Director of our Intellectual Property and Innovation Center.  The law school is looking for a tenured scholar with a distinguished record of teaching, research, and service.  Please forward a cv or any questions to Gerard Magliocca (gmaglioc@iupui.edu).

Junior Faculty Workshop on Intellectual Property Issues in the Pharmaceutical Industry
The Indiana University McKinney School of Law is pleased to announce this year’s Junior Faculty Workshop, on Intellectual Property Issues in the Pharmaceutical Industry. Scheduled for December 7 and 8, 2012, this two-day Workshop offers a unique opportunity for untenured scholars to present their draft scholarship for in-depth critique and commentary by respected senior scholars in the field. The Workshop is perfectly timed for junior faculty participants to revise their articles in time for a spring submission for publication. Indiana University will cover both travel and lodging expenses for all participants.

Any untenured scholars interested in participating in this intensive workshop should submit a detailed abstract or the first several pages of their articles, along with a brief CV, to Nic Terry (npterry@iupui.edu) or Emily Michiko Morris (emmmorri@iupui.edu), by June 22, 2012. Works already in progress are ideal for this workshop and will be given preference. Topics for the workshop may focus on any of a range of intellectual property issues as they relate to the pharmaceutical industry, broadly defined. Acceptable topics may therefore include, but are not limited to, issues involving patent and regulatory exclusivity; patent linkage; the Hatch-Waxman Act; the BPCIA; TRIPs; the Bayh-Dole Act; the AIA; public-private collaborations; and more.

Applicants should also submit the names of established scholars in their area of scholarship who would be able to provide meaningful commentary on their drafts. Junior faculty applicants selected for the workshop must commit to producing complete drafts of their articles well ahead of the workshop (i.e., before Halloween), so that senior faculty participants may have time to review them. Selected participants will be notified by July 1, 2012.


Mintz v. Dietz & Watson: Hindsight and Common Sense

By Jason Rantanen

Mintz v. Dietz & Watson, Inc. (Fed. Cir. 2012) Download 10-1341
Panel: Rader (author), Newman, Dyk

Although concerns about hindsight never disappeared from Federal Circuit opinions on obviousness following KSR, it did seem for a time that the court backed away from strong language about hindsight.  The court's opinion in this case exhibits no such timidity.

The Mintzes invented a casing structure for meat products that permits the meat to bulge between netting strands while avoiding the more complex stuffing process associated with prior knitted meat encasements (Patent No. 5,413,148). Package Concepts & Materials, Inc., a former distributor of Mintz products, filed a declaratory judgment action against Mintz and Mintz filed a patent infringement action against PCM.  During the consolidated infringement proceeding the district court granted summary judgment of obviousness as to the '148 patent.  On appeal, the Federal Circuit reversed. 

Hindsight as a major continuing concern: The most striking aspect about the Federal Circuit's opinion is the strong language it uses when discussing the need to avoid hindsight bias when analyzing obviousness.  The opinion uses the word "hindsight" repeatedly, warning against "the forbidden use of hindsight" and the "prohibited reliance on hindsight," as well as the need for "a court to walk a tightrope blindfolded (to avoid hindsight)."  Compare this with KSR: "A factfinder should be aware, of course, of the distortion caused by hindsight bias and must be cautious of arguments reliant upon ex post reasoning…Rigid preventative rules that deny factfinders recourse to common sense, however, are neither necessary under our case law nor consistent with it."  KSR v. Teleflex, 550 U.S. 398, 421 (2007).  (Mintz does not cite KSR at any point).

Consistent with its view on hindsight, the opinion seeks to avoid such bias in three ways: by requiring that "common sense" be articulated, by avoiding the use of the patent itself in defining the problem the invention solves, and by emphasizing the need to analyze the objective indicia of nonobviousness. 

"Common sense" must be articulated: In its obviousness determination, the district court relied on a "common sense approach" to conclude that it would have been "obvious to try" an element of the claimed invention.  The CAFC held that more is required than simply saying the words "common sense": "With little more than an invocation of the words "common sense" (without any record showing that this knowledge would reside in the ordinarily skilled artisan), the district court overreached in its determination of obviousness."  Slip Op. at 9.

Nonobvious question/obvious solution: The CAFC also found that the district court erred by using the invention to define the problem that the invention solves.  This was problematic because it may be the problem itself that is nonobvious – once the problem is known the solution may be virtually certain.  "Often the inventive contribution lies in defining the problem in a new revelatory way."  Slip. Op. at 9. This is consistent with KSR – solutions to a problem cannot be "obvious to try" if the problem itself is not known or obvious. 

Objective indicia of nonobviousness: A classic tool for avoiding reliance on hindsight is use of the objective indicia of nonobviousness.  They "help inocolate the obviousness analysis against hindsight,"  Slip Op. at 10, and "turn back the clock and place the claims int he context that led to their invention."  Id. at 11.  Consideration of these indicia is not discretionary; it is mandatory.  By failing to give substantive consideration to the objective evidence of nonobviousness presented by Mintz, the district court erred.   

Summary judgment of noninfringement was also at issue on appeal; the CAFC affirmed the district court on that issue. 

Guest Post by Michael Risch: America’s First Patents

Guest Post by Michael Risch, Associate Professor of Law, Villanova University School of Law

My forthcoming Florida Law Review article, America’s First Patents, examines every available patent issued during the first 50 years of patenting in the United States.  A full draft is accessible at this SSRN page. The article reaches three conclusions:

  1. Our patentable subject matter jurisprudence with respect to methods can, in part, blame its current unclarity on early decisions by a few important judges to import British law into the new patent system.
  2. Early patenting trends suggest that Congress has never intended new subject areas be limited until Congress explicitly allowed the new subject area.
  3. The machine-or-transformation test, which allows a method patent only if the process involves a machine or transforms matter, has no basis in historic patenting practices.

When the Federal Circuit first issued its en banc opinion in In re Bilski, I believed that its machine or transformation rule could not have been based on history. I wrote in my 2010 article Forward to the Past that:

in its effort to deal with high technology, the [Federal Circuit] abandoned low technology. There are many patented processes that have nothing to do with machines or transformations—methods for measuring fabric, methods for harvesting fruit, and methods for manufacturing products by hand (for example, forming wrought iron). At worst, these types of historically patentable inventions would now be unpatentable. At best, determining what is patentable and what is excluded became much more difficult.

However, I did not have any real proof to support this statement, so I thought I would test the assertion with some quasi-empirical evidence. I spent the summers of 2010 and 2011 working with several research assistants, and we read every available patent we could find, a total of about 2500 before 1836 (most of our pre-1836 patents were destroyed in an 1836 Patent Office fire), and 1200 between 1836 and 1839. The goal was, first, to categorize patents as methods and, second, to determine whether each method used a machine or transformed matter to a new thing.

This was no easy task. Many early patents were difficult to read, and not just because they were handwritten. At the time, inventors did not have to claim their subject matter. As a result, patents usually described how to make or do something, and nothing more. It was often difficult to tell whether the making or the thing made was purportedly inventive. Even after more inventors started using claims, patentees would claim the exclusive right to “manufacture product X by doing Y,” which still left matters unclear.

This difficulty leads to my first conclusion. While courts often talked about “principles” in early judicial opinions, quite often they were attempting to determine the “principle of the machine” to identify what was patented for infringement purposes. Even when courts mentioned that principles were not patentable, the statement was usually a side issue and “principles” meant very basic principles, like “motion.” Because principles were not patentable, courts attempted to construe the patent in a way that was not a principle. This, it seems, is contrary to how we do things under recent cases.

In reading this old history, I discovered something interesting (and I don’t claim to be the first person to discover it – merely the first to tie the content of old patents to support the conclusion). Specifically, early judges imported British law into interpretation of the American statute. This might seem reasonable, except that methods were not patentable in England until after 1840.  But methods were explicitly patentable (called “art” in the statute) in the U.S. Indeed, the very first patent covered a method of making pot and pearl ash. But Justice Story, who sat as a Circuit Justice in many patent cases, did not think methods should be patentable, and as such issued statements in many cases about what could not be patented – statements that have been repeated even until today. My article looks at these statements in detail, and shows how unclarity in early patents allowed the courts to perpetuate a (wrong) view that we must limit method patents in particular ways.

In the second part of the article, I discuss some general findings about the patents. Some were dangerous (lead paint and asbestos), some were ridiculous, and some were enduring. There were many business methods related to teaching , music, and exercise, and there was even a rudimentary software patent (on a Jacquard loom, though I know some think that this is not really software). This was an entertaining part of the article to write; it was interesting to see how industries developed through patents. However, there is one overriding theme: the patents started simple, grew more complex over time, and expanded to new subject matter over time. Further, very little of the subject matter that dominates today’s inventions—such as electronics, chemicals, and pharmaceuticals—was apparent in early patenting. My conclusion from this analysis is that the patent system was designed to handle new subject matter as it is invented, and that Congress never expected to step in and approve new subject matter over time.

The final part of the article examines the motivating issue: whether the machine or transformation test was historically used. Because patents from 1793-1836 were not examined by the Patent Office but those from 1836-1839 were, I could test whether inventors had a different view of this issue than patent examiners had. It turns out that the groups did not differ; the results are statistically the same before and after 1836.

And those results show that our first inventors did not limit methods to those that used machines or transformed matter. About 40% of the methods patents between 1790 and 1793 did not use a machine or transform matter.  These would all be invalid under the modern test. To be sure, the test was very good at identifying business methods—nearly all of the business methods fell into that 40%, so it is hard to fault the test for failing to identify early business methods.  Of course, today’s business methods do use machines, so I am not sure how accurate the test would be today.

However, there were many patents –many more than the business methods—that did not use a machine or transform matter.  This, to me, suggests that among the tests other failings, it has no real basis in past practice or understanding. While we can debate the merits of the recent Prometheus opinion, I applaud its rejection (again) of the machine or transformation test as a way to determine patentable subject matter.

This post presents the basic conclusions of my article. There is obviously much more in this 50 page paper than I can write here. I detail my methodology (and its limits), 19th century law, and the patents in the full paper.

Racing Procedures: Federal Circuit Refuses to Stay Reexam Appeal to Wait for Parallel District Court Appeal

by Dennis Crouch

Bunzl Processor Distribution v. Kappos (Fed. Cir. 2012) (nonprecedential order)

Bunzl and Bettcher are in a longstanding battle over the exclusive rights to make and sell a rotary knife blade used in meat processing. The patents include Bettcher’s Patent Nos. 7,000,325 and 8,074,363 and the pending lawsuits include three district court cases and an inter partes reexamination.

The ‘325 infringement lawsuit and the parallel inter partes reexamination were filed in 2008.  Bunzl recently filed a declaratory judgment action on the newly issued ‘363 patent.

Bettcher is winning the reexamination.  The USPTO Board of Appeals recently reaffirmed the examiner’s decision to confirm the patentability of the pending claims. Bunzl initially won the infringement lawsuit, but after being partially reversed on appeal, that case appears to be headed for a new trial in the near future. 

In light of the pending infringement trial, Bunzl asked the Federal Circuit to stay the reexamination appeal proceedings so that the whole case could be appealed at once.  In a short non-precedential opinion, Judge Newman has rejected that plea. She writes:

The power of the Court to stay proceedings is incidental to its inherent power to control the disposition of the cases on its docket. See Landis v. North Am. Co., 299 U.S. 248, 254 (1936). Here, we cannot say Bunzl has shown that staying proceedings for such a lengthy period of time is warranted.

Thus, the cases will continue in parallel. The appellate briefs will likely be due before the trial and jury verdict.  The appellate decision will then likely issue around the same time as the judge’s post-verdict order on the inevitable motions. There is a likelihood that the results from the two bodies will be inconsistent.  However, our system has a fairly consistent approach to determining the hierarchy of decision in patent cases.  

Parallel patent proceedings within the US have created a whole new set of litigation strategies and difficulties.  Of course, those strategies will change once again in the coming years as we implement the new post grant review proceedings of the AIA.

Note: In this order, Judge Newman was the sole decision maker acting in her role as motions judge for the month.

Survey Response: Is the patent invalid?

by Dennis Crouch

PatentlyO144Last week I asked readers their thoughts on the validity of claim one of U.S. Patent No. 8,185,967.  The patent issued recently to Digimarc and is titled a Method and apparatus for content management.  Of the 917 responses, I removed 4 for inconsistent responses* and 11 for failing to complete the one-question survey.   Of the remaining, 24% concluded that the claim was valid; 65% concluded that the claim was invalid, and 11% had no answer. The most common reason for invalidity: Obviousness followed by lacking patentable subject matter under section 101.** 



* Four of the responses indicated that the claim was both valid and invalid.

** The survey allowed for the selection of multiple answers. About 9% of responses selected two or more answers. The most common multiple selection was that the patent was both invalid under 101 and invalid as obvious.




Substantial Evidence on Appeal

by Dennis Crouch

In re Hyon (Fed Cir. 2012)

Hyon’s patent covers a method for producing a high molecular weight polyethylene to be used as a prosthesis.  In a broadening reissue application, Hyon added several claims.  Those claims were rejected as obvious by the examiner and the Board of Patent Appeals (BPAI). In a split opinion, the Federal Circuit has now affirmed those rejections. 

The question on appeal was whether the PTO properly combined the two identified prior art references in forming an obviousness rejection.  Because this issue is considered a factual question, the PTO decision making is given deference and only overturned if the decision lacks substantial evidentiary support.  This "substantial evidence" standard is quite low and requires the Federal Circuit to affirm even when the panel might have reached a different conclusion in a de novo review.

The “existence of a reason for a person of ordinary skill to combine references” is a question of fact that we review for substantial evidence. Because the Board’s findings concerning motivation to combine are supported by substantial evidence, we affirm.

The dissent by Judge Newman argues that the one skilled in the art would not have been motivated to combine the two references as suggested by the PTO. Interestingly, Judge Newman does not mention the substantial evidence standard while the Bryson majority repeats the standard six times in the ten page opinion.

Appellate attorneys understand the importance of the standard of review.  This case highlights this reality and suggests that applicants may be better served to include arguments directed to the ultimate question of obviousness (de novo review) rather than merely challenging the PTO's factual findings.  Although perhaps cost prohibitive, challenging PTO factual findings are best pursued in a civil action.