May 2005 Report on New Academic Research

Patent

AcademicEach month I post a note discussing new research from the academic side of patent law.  The May 2005 edition includes three great articles from a range of topics:

1. Donald S. Chisum, Reforming Patent Law Reform, 4 J. Marshall Rev. Intell. Prop. L. 336 (2005).  In a short and accessible article, Professor Chisum discusses the nuts and bolts behind patent law reform and asks “reformers” to take a high road.  Specifically, the article proposes six “principles” that any proposed patent legislation should follow: (i) simplicity; (ii) zero-based budgeting; (iii) cost sensitivity; (iv) completeness and generality; (v) international compatibility; and (vi) clarity on effective dates.  As demonstrated by Chisum, the proposed legislation fails each of these principles.  Download the article. (Also, check out footnote 31). (Thanks to Karl Maersch for the tip).

2. Douglas G. Lichtman, Substitutes for the Doctrine of Equivalents: A Response to Meurer and Nard, U Chicago Law & Economics, Olin Working Paper No. 244 (May 2005). In a preemptive strike, Professor Lichtman has taken issue with the forthcoming patent claim scope article by Professors Michael Meurer and Craig Nard. Lichtman argues that the doctrine of equivalents (DOE) is still useful in today’s patent world.  Making three major points, Lichtman argues that the DOE (i) ensures patent viability despite language and foresight limitations; (ii) discourages wasteful efforts to “perfect” claim language; and (iii) allows the patent system to make decisions based on todays knowledge rather than living in the false construct that time stopped at the date of the invention.  Remembering the article’s title, Lichtman argues that the DOE has no equivalent substitutes. Meurer Nard Article, Lichtman Article. (The Meurer Nard article will be published in the Georgetown L.J. later this year).

3. Mark H. Webbink, A New Paradigm for Intellectual Property Rights in Software, 2005 Duke L. & Tech. Rev. 0012 (2005). Webbink is deputy GC at Red Hat.  In this critique, Webbink presents a dissenting voice against a recent article by Microsoft’s GC Bradford Smith (71 U. Chi. L. Rev. 241 (2004)).  In that article, Smith, and his co-author Susan Mann (also of Microsoft) argued that growth in the software industry is a direct result of implementation of strong intellectual property regimes for software.  Webbink makes the case that many other developments were much more important to the explosion in the software industry in the 1980’s and 1990’s.  He lists the development of the personal computer as one such cause for the explosion in off-the-shelf software.  Webbink also gives Microsoft as a test-study — showing that Microsoft did not escalate its patent filings until 1994, “long after the company had become well established.” Read the Article.

 

CAFC Interprets Knorr-Bremse — Finds Willful Infringement

Patent, Patent Cases 2005

PatentlyOImage044Imonex Services v. W.H. Munzprefer Dietmar Trenner (Fed. Cir. 2005).

In one of the first willfulness decisions since Knorr-Bremse, the Court of Appeals for the Federal Circuit (CAFC) has affirmed a district court’s denial of JMOL after a jury verdict of willfulness.

This case involves a mechanical money sorter that differentiates according to coin diameter. Imonex sued several defendants and won a jury verdict that included increased damages for willfulness. 

According to the CAFC, “willfulness requires a showing that the totality of the circumstances evince the egregious conduct that constitutes willful infringement.” (citing Knorr-Bremse). 

In this case, Imonex had disclosed the patented device (that was properly marked) to employees of the defendants several years before filing suits. Likewise, Imonex brochures and literature included statements that the products were patented.  These facts, according to the CAFC, were sufficient to raise a duty of due care. 

“The jury could have reasonably concluded that several instance recounted in the record triggered the [Defendants’] duty of care.”

Once the duty of care exists, the defendants must take steps to ensure that they do not violate the patent.

Affirmed.

Link:

BPAI interprets closed transition phrase for method claims

Patent, Patent Cases 2005

Ex parte Hideaki Ueda (BPAI ) (NOT PRECEDENTIAL)

In a case involving a process for preparing an organic electroluminescent element, the patent examiner issued a rejection for indefiniteness under 35 USC 112, second paragraph.  The examiner indicated that the claimed language of "consisting essentially of" excluded any further steps which materially affect the claimed process. Because the dependent claims included further limitations, the examiner rejected those claims as logically excluded by the "consisting" language.

On appeal at the BPAI, the Board reversed the examiner, finding that the phrase "consisting essentially of" does not limit a claim only to steps specifically recited in the claim — but is only would exclude ingredients which would materially affect basic and novel characteristics.

In this case, the limitations described in the dependent claims were disclosed in the specification.  As such, those elements cannot contradict the basic characteristics of the invention.

Link:

Caterpillar Petitions Supreme Court on Issue of Implied Bias of Jury Members

Patent, Patent Cases 2005,

Caterpillar v. Sturman (on petition for writ of certiorari).

In 2004, the Court of Appeals for the Federal Circuit vacated a jury verdict in a trade secret and contract dispute involving Caterpillar. [Article].  The problem involved Juror No. 3, whose spouse was a current Caterpillar employee — and thus potentially biased.

Normally, the question of whether an individual juror is biased is a factual determination entitled to deference on appeal.  However, the CAFC ruled that the district court’s decision was based on “implied bias, as opposed to actual bias” and thus is reviewed de novo.  Applying Seventh Circuit law, the court found the implied bias is demonstrated by “showing that the juror has a personal connection to the parties or circumstances.”  As such, the spouse’s presence on the jury created an implied bias sufficient to vacate the judgment.

Now, Caterpillar has asked the U.S. Supreme Court to review the case.  In its petition for writ of certiorari, Caterpillar argues that the CAFC’s decision to “automatically disqualify the spouse of an employee of a party” is in conflict with the Second, Fourth, Fifth, Sixth, Eighth, Seventh and Eleventh circuits.  The petition cites Smith v. Phillips (1982) for the proposition that “implied bias doctrine is not viable for parties challenging jurors on a per se basis.  Caterpillar also argues that Sturman should not be able to argue implied bias because the company failed to use its peremptory challenges to protect against potentially biased jurors.

In its brief filed in opposition, Sturman argues that (i) there is “no circuit split” on the issues raised by Caterpillar; (ii) that the CAFC properly applied Seventh Circuit and Supreme Court law; and (iii) that Caterpillar did not raise its current argument below.  Sturman notes that the implied bias has a long history of application “stretching back to Blackstone’s day.”  Sturman also dismisses the importance of the case — since the CAFC’s interpretation of Seventh Circuit law is not binding precedent.

 

Inconsistency Between Views of Two PTO Examiners Found Relevant to Obviousness Determination During Litigation

Patent, ,

PatentlyOImage043Syntex v. Apotex (Fed. Cir. 2005).

Apotex filed an ANDA to begin marketing a generic version of ACULAR, an ophthalmic NSAID protected by a patent owned by Syntex.  Based on the Section IV filing, Syntex filed suit against Apotex for patent infringement.

After a bench trial, the district court determined that the proposed generic infringed the claims of the ACULAR patent and that the patent was not invalid.

Regarding invalidity, the district court concluded that Syntex had overcome obviousness issues by showing that the prior art taught away from the use of the drug/surfactant for opthalmic uses and that such a use created “unexpected results.” In its decision, district court noted that because the prior art at issue had been before the examiner during prosecution, the burden of proving the challenged claims obvious “is particularly high” — and that Apotex had failed to meet this heightened burden. 

On appeal, the CAFC reversed — finding “clear error by the district court in several of the grounds that led it to conclude that the invention claimed by the claims in suit would not have been obvious.” 

Of the several grounds for reversal, the issues of examiner discrepancy, expert testimony, and commercial success may be the most interesting:

Examiner Discrepancies:

Two different PTO examiners worked on various portions of the asserted application and its parent applications and had seemingly inconsistent views regarding patentability of the application.  The CAFC found this relevant to the obviousness determination.

This statement contradicted the express finding of the initial PTO examiner that Syntex’s earlier data failed to show unexpected results. Whether the second examiner was aware of the earlier rejection of Syntex’s claims is unknown. But the relevance of the inconsistency between the views of two examiners is not insignificant.

Although we conclude . . . that Syntex did not commit inequitable conduct . . . we think the unvarnished view of the prosecution history shows some weakness in the conclusion that the patentee established unexpected results for the claimed surfactant.

Expert Testimony:

The Appellate Panel found that the district court erred by failing to examine Apotex’s expert testimony on the question of motivation to combine and unexpected results.

Commercial Success:

The district court relied heavily on the commercial success of ACULAR in its nonobviousness decision.  However, the CAFC requested that the lower court revisit this issue in light of the recent case of Merck v. Teva.

In Merck, the court found that commercial success of an FDA restricted product “has minimal probative value on the issue of obviousness. . . . Financial success is not significantly probative . . . because others were legally barred from commercially testing the [] ideas.”

Concurrence:

In a concurring opinion, Judge Prost disagreed with a portion of the majority opinion that made note of “inconsistency between the views of two examiners” who examined the asserted application and a parent application.

In general, I fail to see how the conduct of a patent applicant is relevant to an obviousness determination. Alleged misconduct at the PTO, in terms of either mischaracterizations or omissions, goes to the heart of an inequitable conduct inquiry but is simply irrelevant to an obviousness inquiry.

 Links:

Does the Constitution Provide for a Right to an Injunction in Patent Cases?

Patent, Patent Legislation

Summer is almost here — How would you fare on this final exam question:

The Progress Clause (Article I, Section 8, Clause 8) of the U.S. Constitution provides that:

“Congress shall have the power… To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

Using this clause as a basis for analysis:  

  1. Would it be Constitutional for Congress to eliminate the right to an injunction for patent infringement?
  2. Would it be Constitutional for Congress to modify the right to an injunction so that one is only available if the patentee is “making use” of the invention?