Updated Business Method Patent Statistics

Patent

On May 4, 2005, Technology Center Director John Love and his able group of e-commerce patent examiners hosted a well attended partnership meeting to discuss current and upcoming issues in the field.  The meeting is an annual event and provides an excellent opportunity to meet with the leadership on a more informal basis. I want to publicly thank the Director Love, Joe Thomas, and the entire crew for being so helpful and forthright.

In the meetings, Director Love always provides some helpful statistics. Perhaps the most telling number from the most resent event is the 11% allowance rate for FY2004 in class 705.  [Calculated as (allowed)/(allowed + abandoned)].  Although this issue was not raised at the meeting, it is clear from the numbers presented at the meeting that the backlog in the class continues to grow.  By using Director Love’s numbers on allowance, percent allowed, and new filings, I created the following table to demonstrate the continued growth in the backlog of business method cases:

Fiscal Year

Number Allowed

Percent Allowed

Disposed (Abandoned or allowed)

New Filings

Cumulative Backlog

2001

433

45%

        962

      8,700

       7,738

2002

492

26%

      1,892

      6,700

      12,546

2003

495

16%

      3,093

      6,000

      15,453

2004

283

11%

      2,572

      6,300

      19,181

Conclusion: Over the past four years, the backlog has increased dramatically.

Second Pair of Eyes: The business method group instituted a ‘second review’ of business method cases as a quality control measure.  Although still termed “second pair of eyes,” the meaning of the term has changed.  The reality is that the second review is now simply a meeting between the examiner, the primary examiner, and the SPE at which the examiner explains his reasons for allowance.  This process will hopefully payoff by helping to reduce the backlog.  Perhaps partly due to this new procedure, allowed cases for FY2005 in Class 705 are projected to shoot over 700.

Links:

 

Blade Wars: Gillette Wins Latest Round in Multi-Blade Razor Patent Litigation

Patent, Patent Cases 2005,

PatentlyOImage032

Gillette’s patent disclosing a three-blade razor also covers a four-blade version.

Gillette Co. v. Energizer Holdings Co. (Fed. Cir. 2005).

By Baltazar Gomez

Gillette owns U.S. Patent No. 6,212,777 for wet-shave safety razors with multiple blades. Gillette sued Energizer in the United States District Court for the District of Massachusetts alleging Energizer’s QUATTRO®, a four-bladed wet-shave safety razor, infringed claims of the patent. The district court denied Gillette’s motion for a preliminary injunction because it found that the claims covered only a three-bladed razor. On appeal, CAFC vacated the district court’s decision and remanded for further proceeding.

The ’777 patent claims a disposable safety razor with a group of blades, each blade placed in a particular geometric position relative to the other blades. Claim 1 describes a progressive blade exposure as follows:

A safety razor blade unit comprising a guard, a cap, and a group of first, second, and third blades with parallel sharpened edges located between the guard and cap… (emphasis added).

In determining the meaning and the scope of claim 1, the CAFC attempted to place the claim language in its proper technological and temporal context. The Court reasoned that the inventors’ statutorily-required written description in the patent itself, including the claims, the specification and the prosecution history, is the primary source of the meaning of disputed claim language.

Using this standard, CAFC determined that the language “comprising . . . a group of first, second, and third blades” can encompass the four-bladed Energizer razors. To begin, CAFC noted that the claim uses “open” claim terms “comprising” and “group of” in addition to other language to encompass subject matter beyond a razor with only three blades. Moreover, although the specification focused on blade units with three blades, the patent also disclosed a plurality of blades showing that the ‘777 patent covers razors with more than three blades. The CAFC further explained that it may be that a four-bladed razor may be less preferred embodiment, but noted that a patentee typically claims broadly enough to cover less preferred embodiments as well as more preferred embodiments, precisely to block competitors from marketing less than optimal versions of the claimed invention.

Further, CAFC also noted that the specification provided further support for interpreting claim 1 to encompass razors with more than three blades. The first sentence of the written description teaches that the invention relates to razors having a plurality of blades. Moreover, the prosecution of patents related to the ’777 patent also supports reading claim 1 as an open claim. Gillette endorsed an open interpretation of “comprising” when it argued to the European Patent Office (EPO) that a virtually identical claim in Gillette’s European counterpart to the ’777 patent would not exclude an arrangement with four or more blades. Accordingly, the CAFC concluded that the district court erred in limiting the claims of the ’777 patent to encompass razors with three blades because no statement in the ‘777 patent excludes a four-bladed razor.

In dissent, Judge Archer argued that claim 1 should not be construed as permitting a group with more than three blades simply because claim 1 contains the open transition term “comprising” in its preamble.   Judge Archer concluded that a three-bladed razor is not merely a preferred embodiment of the invention, but is the invention itself, and that the inventors did not regard a blade unit with four blades arranged in the described geometry as their invention.

Note: Dr. Baltazar Gomez is a scientific advisor at MBHB in Chicago. Dr. Gomez obtained his PhD in biochemistry from the University of Texas and researched retrovirology as a PostDoc at Cornell University.

Case Questions Fundamental Questions of Patentability Requirements of Nucleic Acid Molecules

Patent, Patent Cases 2005,

In re Fisher: EST Patentability Redux

By Donald Zuhn, Ph.D. (Patently-O Guest Author).

On Tuesday, May 3, 2005, the Federal Circuit will hear In re Fisher, in which the Court will address the utility requirement for the first time since the Patent Office set forth revised Utility Examination Guidelines in January 2001.  Specifically, in Fisher, the issue of patentable utility is being raised with respect to nucleic acid molecules.  In commenting on the possible importance of this case, Harold Wegner has described Fisher as having "the potential of being either the single most important pharmaceutical patent case in recent years – or a yawn."  Amicus briefs filed by recognized biotech and pharmaceutical companies such as Affymetrix, Eli Lilly, and Genentech in support of the Board’s decision in Ex parte Fisher suggest that it may be the former as opposed to the latter.

The particular controversy presented in Fisher can be traced back as far as 1991, when a group of NIH investigators led by J. Craig Venter sought to protect thousands of DNA sequences corresponding to portions of expressed genes.  Venter called these gene fragments expressed sequence tags, or ESTs.  Venter’s group sought to protect not only the ESTs themselves, but also the full-length sequences from which the ESTs were derived and the protein products encoded by the full-length sequences, without first determining the biological function of the encoded protein products.  In several applications filed on its ESTs, the NIH asserted a number of utilities, including the design of oligonucleotides for use in chromosomal analysis, PCR amplification, and recovering the corresponding full-length gene.  After receiving a second rejection on its initial filing, the NIH abruptly abandoned its attempts to protect the ESTs, and withdrew all of its pending EST applications from consideration.

While the withdrawal of these applications temporarily quieted the debate surrounding EST patentability, the Patent Office again stoked the fires of controversy in 1995, when it published new Utility Examination Guidelines.  The new Guidelines removed some of the obstacles to EST patenting by only requiring that an applicant assert a utility that was "specific" and "credible."  The new Guidelines had thus omitted the requirement that the assertion of utility also be "substantial," as set forth by the Supreme Court in 1966 in Brenner v. Manson.  In 1997, the Patent Office further declared that since ESTs were acknowledged to have utility apart from the full-length sequences from which they were derived, an applicant would no longer be prevented from securing protection for an EST by the failure to specify the function of the full-length sequence from which that EST was derived.

The Patent Office reversed course again in 2001 when it published revised Utility Examination Guidelines, reinstating the Brenner substantial utility prong.  The revised Guidelines now required that an applicant assert a specific and substantial utility for the claimed invention that would be considered credible by a person of ordinary skill in the art.  The Patent Office also issued Revised Interim Utility Guidelines Training Materials, which provided Examples indicating how the revised Guidelines were to be applied to thirteen different types of biochemical subject matter, including ESTs, as well as definitions of the three utility prongs.  In particular, the Training Materials defined "specific utility" as utility that is specific to the subject matter claimed, as contrasted with a general utility that would be applicable to the broad class of the invention; "substantial utility" as utility having a "real world" use; and "credible utility" as utility that is believable to a person of ordinary skill in the art based on the totality of evidence and reasoning provided.

In the appeal to be heard Tuesday, appellants Dane Fisher and Raghunath Lalgudi (employees of Monsanto Co., the real party in interest) seek to reverse the Board’s decision affirming the final rejection of a claim directed to five ESTs isolated from maize leaf tissue.  The five ESTs constitute only a small portion of the 4,013 sequences that appellants originally claimed and an even smaller portion of the 32,236 sequences that appellants disclosed in their application.  Appellants also asserted a number of utilities for the claimed ESTs in their application, including the use of the ESTs to identify polymorphisms (i.e., alternate forms, or alleles, of the claimed sequences), to design oligonucleotide probes or primers for use in isolating DNA sequences from other plants and organisms, and to measure mRNA expression levels in plant cells using microarray technology.

The Board, in Ex parte Fisher, analyzed Brenner and subsequent CCPA and CAFC decisions in In re Kirk, In re Ziegler, In re Jolles, Cross v. Iizuka, and In re Brana, and determined that "[r]ather than setting a de minimis standard, Section 101 requires a utility that is ‘substantial’," or in the words of the Brenner court, "one that provides a specific benefit in currently available form."  The Board then examined appellants’ asserted utilities and determined that none of the claimed ESTs provided a specific benefit in its currently available form.  In particular, with regard to appellants assertion that the claimed ESTs could be used to measure mRNA expression levels in plant cells using microarray technology, the Board declared that "the asserted utility of the claimed nucleic acid – as one component of an assay for monitoring gene expression – does not satisfy the utility requirement of Section 101."

In briefing the issues before the Federal Circuit, appellants argue that the Board erred in concluding that an EST is "subject to a heightened standard of utility . . . that hinges upon some undefined ‘spectrum’ of knowledge about the function of the gene that corresponds to the EST."  Appellants also contend that the Board erred in concluding that the claimed ESTs lack patentable utility "despite the undisputed existence of eight scientifically useful applications for the claimed ESTs and a commercially successful industry built upon the sale and licensing of ESTs corresponding to genes of unknown function, just like those at issue here."  In arguing against the Patent Office’s application of a "heightened standard" of utility in this case, appellants note that the Patent Office has set forth "three substantially different constructions of the utility standard over the last decade alone," and that the Board has adopted a test "so ambiguous and impracticable that even the PTO cannot articulate with any reasonable certainty when the claimed ESTs – or any other EST – might be entitled to patent protection."  Appellants also contend that the Patent Office has applied the wrong test in determining whether there is an assertion of specific utility, since "the specific utility prong only requires the existence of an identifiable benefit for the claimed invention; it does not require a benefit that is unique to the claimed invention."

The Patent Office, on the other hand, denies that appellants’ ESTs have been subjected to a heightened standard, arguing instead that appellants merely failed to assert a specific and substantial utility for the claimed ESTs that would be considered credible by a person of ordinary skill in the art. In its brief, the Patent Office often focuses on appellants’ failure to satisfy the specific utility prong, arguing, for example, that appellants’ asserted utilities "would apply not only to the over 32,000 ESTs Fisher discloses, and to the over 600,000 ESTs disclosed in Monsanto’s [six] related appeals, but also to any ESTs derived from any organism." In particular, the Patent Office counters appellants’ argument that because each EST only specifically binds to its complement, the specific sequence of each EST makes its use as a probe or primer specific, by stating that "there is no specific reason for using the EST to bind its complement," and therefore, "[t]o the extent that more sequence data could be acquired by using the ESTs as probes, that result would likely be true for any scrap of DNA derived from nature." Finally, in responding to appellants’ assertion that ESTs have a real world value as part of a multi-billion dollar industry, the Patent Office contends that "batches of ESTs of unknown significance are sold for the purpose of finding targets worthy of further development, not because the individual ESTs have any specific currently available benefit."

NOTE: This post was written by patent attorney Donald Zuhn, PhD. Don is a true expert in cutting edge biotech patent law and practices both prosecution and litigation at MBHB LLP in Chicago. (zuhn@mbhb.com). His article "DNA Patentability: Shutting the Door to the Utility Requirement," published in the summer 2001 issue of the John Marshall Law Review, contains a more thorough discussion of the history of the utility requirement, particularly with respect to the patentability of DNA sequences.

Hynix Fails to Beat Rambus on Collateral Estoppel Issue

Patent, Patent Cases 2005

Rambus Hynix Semiconductor v. Rambus (N.D. Cal. 2005).

In an earlier lawsuit against Infineon, a court dismissed Rambus’s patent claims in a bench statement that "I have concluded that [Infineon] has proved, by clear and convincing evidence, a spoilation that warrants dismissal of [the patent infringement case] as the only appropriate sanction after having considered the alternatives."  However, the case settled before the judge issued a written opinion.

Now, Hynix argues that Rambus should be collaterally estopped from re-asserting the spoilage issue.  The N.D. Cal. disagreed with Hynix, finding that the elements for a finding of collateral estoppel were not met.

In the 9th Circuit, a party asserting collateral estoppel must show four elements:

  1. Full and fair opportunity to litigate in the previous action;
  2. Issue was actually litigated in that action;
  3. Issue was lost in a final judgment; and
  4. The person against whom collateral estoppel is asserted in the present action is in privity with the party from the previous action.

Using these elements, the court found (i) that the issue of spoilage (unclean hands) is particular to each litigation and thus had not been litigated in the Infineon case; and (ii) that the Infineon court’s statements from the bench did not constitute a "final judgment" because they were not "sufficiently firm."

While there is no question that Judge Payne was sufficiently settled in his decision that he was willing to dismiss Rambus’s patent claims at the conclusion of the evidentiary hearing on spoliation, he never issued a reasoned opinion, either written or oral, explaining his ruling. Before Judge Payne could issue such a ruling, Infineon and Rambus settled the action between them, stipulating to a dismissal with prejudice.

Seemingly to protect against the CAFC’s veto power, the opinion noted that even if all the elements of collateral estoppel were met, the court would use its discretion to deny the motion because such offensive uses of collateral estoppel are disfavored.

Hynix’s motion to dismiss Rambus’s patent claims for unclean hands on the basis of collateral estoppel is denied.

France: Right To Privacy Includes DVD Copying For Personal Use

Patent

Monsieur Stephane P v. Universal Pictures Video France (Court d’Appeal de Paris 2005).

PatentlyOImage031In a move to protect privacy rights, a French Appellate Court has ordered DVD vendors to stop selling copies of the film “Mulholland Drive.”  The court found that copy prevention software on the DVD violated privacy rights of DVD purchasers because it precluded them from transferring the film onto a VHS tape for personal use.

Assistance — Does anyone have an English translation of the case? (crouch@mbhb.com).

Links:

 

PATENT REFORM: Preventing Inequitable Results Under Knorr-Bremse Willfulness

Patent,

This post is part of our continuing series discussing a US House of Representatives working draft of patent legislation, by Marcus Thymian, Jennifer Swartz, and Dennis Crouch.

In the landmark decision of Knorr-Bremse v. Dana Corp., an en banc panel of Federal Circuit judges recently held that no adverse inference is to be drawn from the absence of an opinion of counsel in willfulness determinations.  This ruling overruled the Court’s earlier precedent in Quantum and was a dramatic change.  The proposed legislation attempts to balance this swing in jurisprudence by adding a section on willfulness that incorporates the Knorr-Bremse holding while carving out broad exceptions.  

The proposed changes repeat the Knorr-Bremse holding that “[t]he absence of an opinion of counsel shall not create an inference that the infringement was willful.”  Further, the legislation makes mere knowledge of a patent or its contents insufficient for a finding of willfulness against the defendant.

The legislation diverges from Knorr-Bremse by listing “other factors” that may be considered in increasing damages against an infringer.  Included as one such factor is intentional copying by a defendant who has specific knowledge he is infringing patented subject matter.  However, unlike Knorr-Bremse, the defendant must rebut proof of specific knowledge by proffering evidence of an “informed good faith belief” that the patent is invalid, not infringed, or unenforceable (i.e. an opinion).  Thus, while no adverse inference of willfulness will be drawn in the absence of an opinion under the proposed changes, the defendant will still have the onus to provide an opinion in cases in which the plaintiff proves the defendant’s specific knowledge of infringement.

Finally, the legislation also proposes adding to the statute for increased damages the “factor” of prior litigation between the parties for substantially similar infringement.  Thus, in a later action between parties for colorably similar infringing conduct, willfulness may be based on the knowledge the infringer has maintained since the earlier litigation.< ?xml:namespace prefix ="" o />

Antitrust: FTC confronts decision that liberally allows patent settlements

Patent, Patent Cases 2005

PatentlyOImage030Schering-Plough v. FTC (11th Cir. 2005) (on petition for en banc review).

In a March 8 decision, the 11th Circuit Court of Appeals set aside an FTC order that barred Schering-Plough from settling an infringement suit with generic makers over the patented blood pressure drug K-Dur.  The FTC had concluded that the settlement was an “unreasonable restraint of trade.”  The 11th Circuit disagreed, finding that because the suit involved patented products, neither a per se nor a rule of reason analysis would be appropriate.

By their nature, patents create an environment of exclusion, and consequently, cripple competition. The anticompetitive effect is already present. “What is required here is an analysis of the extent to which antitrust liability might undermine the encouragement of innovation and disclosure, or the extent to which the patent laws prevent antitrust liability for such exclusionary effects.” Therefore, in line with Valley Drug, we think the proper analysis of antitrust liability requires an examination of: (1) the scope of the exclusionary potential of the patent; (2) the extent to which the agreements exceed that scope; and (3) the resulting anticompetitive effects.

Applying their rule to the facts, the Court concluded that payment from a patent holder to a generic competitor cannot be the sole basis of a violation of antitrust law. Accordingly, the court SET ASIDE the decision of the Federal Trade Commission and VACATED its cease and desist order.

Petition en banc: Now, the FTC has filed a petition for rehearing of the case en banc. In the petition, the Commission raises three primary contentions:

  • Not every patent infringement litigation settlement should be shielded from antitrust scrutiny, so long as entry of the allegedly infringing product is not precluded at any time subsequent to expiration of the patent;
  • That the decision subverts the goals of Hatch-Waxman; and
  • That the decision used an improper standard review of critical disputed facts.

If this petition for rehearing fails, the Government is expected to appeal to the Supreme Court.

Links:

2005 USPTO Partnership Meetings Scheduled for May 4, 2005

Conference or CLE, Patent

On Wednesday May 4, the Patent Office is holding a couple of “Customer Partnership Meetings.”  These meetings are designed to provide insight into how the patent office handles patent applications and tend to give some informal insight into peculiarities of particular technology areas. They are also free of charge.

1) Nanotechnology

The PTO has a newly formed Nanotechnology art unit class.  The Wednesday discussion will provide a look at how the new art unit is collecting and searching the prior art.  In addition, an industry panel will give feedback to the PTO and participants.  There will also be time for an open floor discussion.  Although the deadline for signing up for the conference has passed,

there is still some room for those interested.  Contact Jill.Warden@uspto.gov.

2) Business Methods

Because of a popular believe that business method patents are of lower quality, the PTO has instituted a number of initiatives to improve quality in the art unit.  The PTO is focusing on speeding up a process that currently involves long delays.  John Love, director of art unit handling business method patents as well as other members of the unit will be available to discuss these issues.  This conference may be full — however Joseph.Thomas@uspto.gov may be able to fit you in.

Note: I’m planning to be at the business methods conference.  I look forward to meeting you there.

How should a future patent attorney choose a law school?

Articles and Publications, Patent

AcademicEggHeadThe new USNews law school rankings have been released.  Everyone knows that the rankings are worthless, but we follow them anyway.  Engineers and scientists usually do pretty well on the LSAT and often end up with the following law school options:  

  • Attend a highly-ranked law school;
  • Attend a lower-ranked law school with a renowned intellectual property program; or
  • Attend a lower-ranked law school as a night student and continue making money during the day.

The name of the law school matters most when you are looking for your first job out of law school.  Many people advise students to attend the highest ranked school where they can gain admittance.  Others would advise you to go to the school that offers the best financial package.  Not many advocate part-time solution — because it is such a hard road to work full-time then attend school four nights a week.  However, some of the most skillful attorneys that I know went through school that way.

What is your advice for hopeful pre-law students? Please leave a comment:

PATENT REFORM: Quick highlights from the Senate hearings.

Patent, Patent Legislation

The Senate Intellectual Property subcommittee held hearings on Monday, April 25, 2005 to discuss patent reform.  Some highlights:

  • Jon Dudas, Director of the Patent Office believes in the goal of “educating the world on the importance of patents.”  I believe that a major part of this should be to restore the mystique of the American inventor/entrepreneur.
  • On behalf of the AIPLA, Michael Kirk shot down BSA proposals to limit the availability of injunctive relief and the size of damage awards.  Kirk also mentioned that Congress should consider repealing 35 U.S.C. 271(f).
  • David Simon from Intel promoted changes to the notion of when an injunction should be granted.  In his viewpoint, there should be “a return equitable principles to determine whether an injunction should be granted.”

Patent Claim Construction: Whereby Clause Limits Claim Scope

Patent

PatentlyOImage029Hoffer v. Microsoft Corp. (Fed. Cir. 2005) (per curiam).

By Eric Moran

In Hoffer, the patentee (appearing pro se) appealed a summary judgment holding that defendants Microsoft, IBM, and Ariba did not infringe claim 21 of U.S. Patent No. 5,799,151 (the ‘151 patent) and that claim 22 of the ‘151 patent was invalid for indefiniteness.  The Federal Circuit reversed the judgment on invalidity and affirmed the judgment of noninfringement.  In affirming the judgment of noninfringement, the Federal Circuit affirmed the construction of a “whereby” clause, which “generally states the result of a patented process” and generally does not limit claims.  Here, however, as discussed below, the Federal Circuit held that when a “whereby” clause “states a condition that is material to patentability, it cannot be ignored in order to change the substance of the invention.”

The ‘151 patent involves methods and systems that allow remote users of computer terminals to obtain economic data from an index, and interactively post and receive messages concerning economic topics.  Claim 21 of the ‘151 patent in Hoffer included the phrase:

whereby a trade network supports users at said plurality of [remote user terminals] who are each guided by said [integrated application program interface] to select an economic activity, to identify that index topic that corresponds to said activity, to enter that topic board dedicated to said topic, and who are collectively able to concurrently engage in interactive data messaging on said topic boards.< ?xml:namespace prefix ="" o />

The accused method allows real-time posting of messages, but not interactive data messaging in which users can communicate with each other.

The patentee argued that under Minton v. Nat’l Ass’n of Securities Dealers, Inc., 336 F.3d 1373, 1381 (Fed. Cir. 2003), a “whereby” clause cannot limit method claims when the “whereby” clause simply states the intended result of a method step.  In particular, the patentee contended that the “whereby” clause in claim 21 did not state the mechanics of the claimed method, but only stated an overall objective, and, moreover, his invention does not require interactive messaging.

The Federal Circuit disagreed, finding that, based at least on the “Summary of the Invention” section of the patent and statements in the prosecution history, interactive messaging “is more than the intended result of a process step; it is part of the process itself. . . . [It is] an integral part of the invention.”  Thus, the Federal Circuit held that the “whereby” clause stated a condition that was material to patentability, and claim 21 was limited to interactive messaging and did not extend to real-time posting of messages.

Judge Newman, in a panel that also included Judges Bryson and Dyk, authored a concurrence in which she disagreed with the panel’s failure to decide each of the appealed claim construction issues. 

Eric Moran (moran@mbhb.com) is an attorney at the intellectual property law firm of McDonnell Boehnen Hulbert & Berghoff LLP in Chicago. His practice runs the gamut of intellectual property issues and includes patent, trademark, and domain name disputes.

Notes:

 

Full Panel Denies Rehearing in Fosamax Patent Case

Patent, Patent Cases 2005,

Merck & Co. v. Teva Pharmaceuticals (Fed. Cir. 2005) (on petition for rehearing).

Merck & Co. owns the patent on the best-selling drug Fosamax.  Teva, a generic manufacturer lost an infringement case at the district court after the court found the patent valid and infringed.  In January 2005, the Court of Appeals for the Federal Circuit reversed the district court — vacating the lower court’s finding of validity and infringement. 

Merck, with the amicus support of PhRMA, subsequently filed a petition for rehearing en banc.  The CAFC has denied that the request, thus maintaining the panel decision. 

DISSENT: In a two-page dissent, Judge Lourie, supported by Chief Judge Michel and Judge Newman, argued that the panel decision erroneously concluded that commercial success was not probative to obviousness in this case and by linking commercial success with the failure of others.

Commercial success is a fact question, and, once it is established, as found here by the trial court, the only other question is whether the success is attributable to the claimed invention (“nexus”), rather than to other factors such as market power, advertising, demand for all products of a given type, a rising economy that “lifts all boats,” etc. It is not negatived by any inability of others to test various formulations because of the existence of another patent. Success is success. The panel’s rule is especially unsound in the context of an improvement patent, as here, because it holds in effect that commercial success for an improvement is irrelevant when a prior patent dominates the basic invention.

Commercial success is also independent of any “failure of others,” as that is another, separate secondary consideration.

Respectfully, the full court should have reheard the appeal to eliminate the confusion in the law that the panel opinion creates.

Interestingly, Judge Rader dissented in the three-judge panel opinion, but now agrees with the majority that the case should not be reheard.

The case will be remanded to the district court on April 28, 2005.

A REUTERS article indicates that Merck & Co. plans to petition the Supreme Court to hear an appeal from the CAFC decision.

Links:

Microsoft ordered not to release patented TCP software

Patent, Patent Cases 2005

PatentlyOImage028Alacritech v. Microsoft (N.D. Cal. 2005) (04–C-03284)

In an April 12 decision, Judge Jeffrey White of the Northern District of California granted Plaintiff Alacritech’s motion for a preliminary injunction against Microsoft — thus preventing Microsoft from releasing its TCP Chimney or Longhorn software. Alacritech’s patent covers a software method of establishing a TCP connection with reduced processor load and accelerating digital communication. 

In the thirteen page decision, Judge White determined that the patent was likely to be found valid and infringed and that the balance of hardships weighed in favor of the plaintiff, Alacritech.  Factors considered include:

  • A finding of likelihood of success on the merits leads to a presumption of irreparable harm in patent cases;
  • Because Alacritech is a small start-up, it would not be able to withstand infringing competition from Microsoft; and
  • Microsoft has not yet released the TCP Chimney software

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Patent Applicant’s Claim Takings Claim Barred by Res Judicata

Patent, Patent Cases 2005

PatentlyOImage027Hornback v. U.S. (Fed. Cir. 2005).

Back in 1986, Mr. Alton Hornback applied for a patent on a error slope sensor for a missile.  The invention was found to be patentable but was withheld from issuance because of a secrecy order under 35 USC 181. The secrecy order was renewed annually until 1999, and the patent finally issued in June of 2000.

Hornback requested compensation for the delay in issuance, arguing that it was a taking.  Because Hornback had argued the takings issue in a previous case, the CAFC found that his claim was now barred by res judicata.

Hornback argued that the present case raised new issues because the military had de-classified then reclassified the technology in the interim.  The CAFC rejected that argument, however, finding that the classification action internal to the military did not alter his rights — “because only the Commissioner of Patents may rescind a secrecy order.”

In addition, the Appellate Panel agreed that the Court of Federal Claims “does not have subject matter jurisdiction of an adverse ruling of the PTO director.” 

28 U.S.C. §1361 vests “original jurisdiction” for the issuance of mandamus orders in the district courts, authorizing the district court to hear any action “to compel an officer or employee of the United States or any agency thereof to perform a duty owed to the plaintiff.”

Dismissal affirmed.

Aside: In 1996, Hornback made another precedent when the CFC held that a pro se patent applicant without legal training is not held to the same standard as trained counsel.

Link:

Merck v. Integra: Transcript of Oral Arguments

Patent

On April 20, 2005, the Supreme Court heard oral arguments in the case of Merck KGaA v. Integra (Statutory safe harbor for drug development activity).  A transcript of the oral arguments is attached.

Based on the briefs and the oral arguments, I expect that the CAFC decision narrowly interpreting 35 USC 271(e)(1) will be reversed.  Respondent Integra’s strongest argument is a technicality — that the question on appeal is not based on any case or controversy remaining between the parties.

In many eyes, the question is not whether Merck’s actions are protected by the statutory safe harbor.  Rather, the point of speculation is: How far will the Supreme Court extend the safe harbor?

Merck v. Integra: Supreme Court Hears Drug Development Patent Case

Patent, Patent Cases 2005

On April 20, 2005, the Supreme Court heard oral arguments in the case of Merck KGaA v. Integra (Statutory safe harbor for drug development activity).  However, the oral arguments do not appear to have raised any new issues that will impact the case. 

The High Court was critical of the Federal Circuit prose:

  • “not a crystal clear opinion by any means” (J. Ginsburg).
  • “pretty foggy” (J. Breyer).

These remarks did not extend to the substance of the opinion.  Book-makers expect that the CAFC’s decision will be at least partially reversed — the real question is the eventual breadth of the statute.

In January 2005, Tom Mauro of the Legal Times reported that Justices Sandra Day O’Connor and Stephen Breyer did not participate in the decision to grant cert.  Interestingly, both Justices took part in the oral arguments.

A decision is expected this summer.

Links:

Written Description: Defendant’s Own Expert Deposition Testimony Used to Overturn Summary Judgment of Invalidity

Patent, Patent Cases 2005

PatentlyOImage026Space Systems/Loral  v. Lockheed Martin (Fed. Cir. 2005)

By John Smith

Loral, the owner of U.S. patent 4,537,375 (the ‘375 patent), sued Lockheed for infringement of claim 1. The District Court ruled in favor of Lockheed, finding the claim invalid for violating the written description requirement of 35 U.S.C. § 112.

The ‘375 patent is directed to an improved method for maintaining the orientation and attitude of a satellite in space by a process known as station-keeping.  After an initial thrust, the satellite re-checks its position, and often fires its thrusters again to better correct its position. Station-keeping thus uses the limited fuel supply on board a satellite and contributes to shortening the life of satellites. The ‘375 patent discloses a method directed to improving the efficiency of the corrective procedure.

Claim 1 of the ‘375 patent entails a multi-step procedure of thruster-firing, data storage, checking of position and correction of position, and minimization of error in correction of position. Essentially, the satellite fires its thrusters to correct its position, then checks its position and compares its current error in position to its previous error in position before firing its thrusters again. Lockheed argued that the patent was invalid, because the second step of claim 1 was not adequately described in the specification.

Defendant Lockheed’s expert, when asked at deposition where one would find the second step description, answered (over counsel objections) that the second step was depicted in Item 96 of Figure 2B.  The court found this, along with the testimony of plaintiffs’ expert, established that the specification sufficiently described the claim.

Lockheed also argued that the second step of claim 1 was not inherent in the written description because the specification did not state that the second step was necessarily used in the satellite position correction procedure. On appeal, the Federal Circuit noted that the second step of the claim at issue in the procedure comes only (if at all) after thrusters are fired and actual position error and historical position error are compared. According to the Federal Circuit, this “does not diminish the descriptive content of the specification.”

The Federal Circuit reversed the finding of invalidity, and remanded back to the U.S. District Court for the Northern District of California for further proceedings.

John Smith is an attorney at MBHB LLP in Chicago.  He earned both his JD and PhD (inorganic chemistry) from Vanderbilt University. He has co-authored numerous articles and served as a faculty member in the Chemistry Department of Lipscomb University in Nashville, Tennessee.

Notes:

Groklaw Patent Resource Page

Patent

Pamela Jones at GrokLaw, the fabulous pro-Linux blog, has created a patent resource page with links to all the patent resources that you would like to find:

GrokLaw’s Patent Page:

Bookmark this great new resource. -DDC 

Links:

PATENT REFORM: House and Senate to Hold Hearings this Week

Patent, Patent Legislation

House Subcommittee on the Courts, the Internet and Intellectual Property, chaired by Congressman Lamar Smith (R Tex) has released a patent legislation discussion draft that includes a number of proposed patent reform measures.  The House Subcommittee is scheduled to hold an oversight hearing on the discussion draft on Wednesday, April 20, 2005 at 4:30 PM. [Link].  The witness list includes J. Jeffrey Hawley of Eastman Kodak testifying on behalf of the Intellectual Property Owners Association (IPO); Richard J. Lutton of Apple, testifying on behalf of the Business Software Alliance; Jeffrey Kusham, testifying on behalf of Genentech; and William LaFuze of the ABA.  In a parallel action, the Senate’s newly formed Subcommittee on Intellectual Property is scheduled to hold a hearing on the patent system April 21. [Link]. [NOTE — Strong indications are that the Senate will postpone the hearing to April 25].

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PATENT REFORM: Injunctions Only When Money Is Not Enough

Patent, Patent Legislation

This post is part of our continuing series discussing a US House of Representatives working draft of patent legislation, by Marcus Thymian, Jennifer Swartz, and Dennis Crouch.

The current patent statute (35 USC §283) allows courts to grant injunctions to prevent violation of patent rights, but provides little guidance, specifying only that injunctions be "in accordance with the principles of equity."  The terms of the injunctions need only be "as the court deems reasonable."

The proposed statute would keep the current language intact, but would add another section spelling out the grounds for granting such injunctions.  Under the new language, "a court shall not grant an injunction unless it finds that the patentee is likely to suffer irreparable harm that cannot be remedied by the payment of money damages."  In making this finding, the court is not to presume the existence of irreparable harm, but is instead required to "consider and weigh evidence" relating to equitable factors.  One of these factors is "the extent to which the patentee makes use of the invention."

One result of the proposed new language is that, in a preliminary injunction determination, a reasonable likelihood of success on the merits would no longer lead to a presumption of irreparable harm.  The concept of "irreparable harm" has been extensively adjudicated; that body of case law would seem to remain largely relevant in making the determination called for by the proposed statute.