More on Claiming Clones: Products of Nature and Source Limitations

Guest post by Dr. Jeffrey A. Lefstin, Professor of Law, University of California, Hastings College of Law

Jason’s excellent post on Roslin summarized the case and raised the question of whether the Federal Circuit paid insufficient attention to the inherent differences conveyed by the ‘clone’ limitation of the claims. In this post I address two other issues in Roslin:  the Federal Circuit’s interpretation of Ckakrabarty and Funk Brothers, and Roslin’s consistency with Federal Circuit precedent holding that structural or functional differences between natural and synthetic products must be defined in the claims.

Unaltered by the hand of man: Judge Dyk’s opinion in Roslin unfortunately perpetuates the view, now found in the PTO’s Myriad guidelines, that Chakrabarty requires a claimed invention to be “markedly different” from a natural product for patent-eligibility under § 101.  Myriad itself imposed no such requirement: the Court found BRCA cDNAs patent-eligible without determining that they were “markedly different” from natural sequences. And though Myriad reiterated the “markedly different” language from Chakrabarty, Chakrabarty’s discussion of ‘products of nature’ was entirely dictum. Only the question of whether living organisms were patent-eligible was before the Court in Chakrabarty; the ‘product of nature’ rejection in the case had not been sustained by the Patent Office Board of Appeals.

The Chakrabarty Court noted the claimed bacteria differed markedly from natural bacteria by way of distinguishing the case from Funk Brothers.[1] As Paul Cole’s recent post notes, the patentee had discovered that certain strains of bacteria could be mixed together without inhibiting their nitrogen-fixing capability.  Justice Douglas regarded this compatibility as the unpatentable discovery of a natural phenomenon;  the claims were unpatentable because the patentee’s application – a mixed inoculant – was “a simple step” once the underlying discovery was assumed away.

As I discuss in a recent article, Funk  was nonetheless very much a patent eligibility case. It reflects Douglas’s view – shared by Justice Stevens in Flook, and Justice Breyer in Mayo – that obvious applications of scientific discoveries or abstract ideas are not patent-eligible “inventions” within the meaning of the statute.

Whether or not we share that view, understanding it shows us that Funk was an ‘inventive application’ case, not a ‘product of nature’ case. Douglas made no reference to the ‘product of nature’ doctrine, nor to the recent cases embodying it.[2] Instead, Douglas emphasized the lack of change in the bacteria to establish that the mixed inoculant was obvious (once the patentee’s discovery was assumed away). Under the old doctrine of ‘aggregation,’ it was not invention to combine old elements where the elements were unchanged, and no new function arose from their combination. It was therefore not inventive for the patentee in Funk to combine old bacteria without changing their structure or function.

But just as many combinations of old elements become patentable when a new function emerges, the mixed inoculants of Funk would have been patentable — even if the bacteria remained unchanged — had the mixed inoculant acquired new functions not performed by its constituent bacteria. If Funk Brothers instead stood for the proposition that a combination is unpatentable if its constituents are ‘unaltered by the hand of man,’ then a very large number of inventions become patent-ineligible.  An artificial structure like an arch, formed by piling stones atop each other, would be ineligible unless the stones themselves were altered by the hand of man.  Even as ardent a skeptic of the patent system as Justice Douglas would not have gone that far.

Source limitations and expressly claimed distinctions: The second difficulty with Roslin is its demand that the ‘marked differences’ between the natural organism and the invention must be expressly claimed. As Jason discussed, the applicant in Roslin argued that cloned animals differ from their natural counterparts at least in having mitochondrial DNA derived from the egg donor, rather than the animal which donated the somatic nucleus. The Federal Circuit rejected such arguments because neither the difference in mitochondrial DNA, nor any functional consequence of that difference, was recited in the claims.

However, the same argument, albeit in the context of § 102, was before the Federal Circuit in the extensive litigation over Amgen’s recombinant erythropoietin (EPO) patents. Much like Roslin, Amgen had claims to a ‘copy’ of natural product: in that case EPO produced by mammalian cells in culture. While Amgen’s synthetic EPO differed in glycosylation from the natural product, several of the claims in the case recited only the non-natural source of the EPO, not the structural differences. The Federal Circuit recognized that the novelty of the synthetic EPO claims depended on whether synthetic EPO differed from natural EPO.  Yet the court found novelty based on the unclaimed structural and functional differences between natural and  synthetic EPO, which were demonstrated in part by the specification and prosecution history, and in part by testimony at trial. Amgen Inc. v. F. Hoffman-LaRoche Ltd, 580 F.3d 1340, 1370 (Fed. Cir. 2009). In effect, the court held that the structural and functional differences characterizing the synthetic product were inherent in the source limitations. (The court did not inquire whether all synthetic EPO molecules falling within the scope of the claims would display similar differences in glycosylation.)

Thus under Amgen, a source limitation alone (such as ‘non-naturally occurring’ or ‘purified from mammalian cells grown in culture’) may establish novelty of a product. Assuming the ‘clone’ limitation in Roslin to require derivation from nuclear transfer, then it serves as a source limitation as well. Since Roslin cannot overrule Amgen, we seem to be in a regime where differences between natural and synthetic products may be unclaimed yet confer novelty under § 102, but must be explicitly claimed to establish ‘marked difference’ under § 101. Of course, if Roslin is correct, that doctrinal inconsistency is less significant than the consequence that Amgen-type claims – and perhaps a wider category of product-by-process claims involving natural products – are now ineligible under § 101.

[1] In Chakrabarty, the Commissioner never suggested that the claimed bacteria were unpatentable under Funk, nor even raised the case.  Rather, Chakrabarty argued that if living organisms were not patent-eligible, the Court would have said so in Funk.

[2] In particular, the General Electric and Marden cases denying patentability to purified tungsten, uranium, and vanadium. The defendant had urged General Electric upon the Funk court in its brief.

Guest Post by Tun-Jen Chiang: Functionalism versus Faux Formalism at the Federal Circuit

Guest Post by Tun-Jen Chiang, Assistant Professor of Law, George Mason University School of Law

One of the longstanding myths about the Federal Circuit is that it is formalist.  This is usually levied by academics as a criticism, but no one does more than the Federal Circuit itself to spread the myth.  For judges, being labeled as a jurisprudential machine is a badge of honor.  Thus, even where their true motivation is clearly policy-based, judges invariably couch their opinions in legalistic terms.

The recent dissents from en banc rehearing in Retractable Technologies, Inc. v. Becton, Dickinson & Co. provide perfect examples.  The issue in Retractable is an old one: should the Federal Circuit give deference to district judges on claim construction?  Judge Moore (joined by CJ Rader) and Judge O’Malley both argued the court should.  Their dissents each begin with the assertion that the Supreme Court in Markman held that claim construction is a “mongrel practice” with both legal and factual components, and this counsels for deference to trial judges.

Let me start by debunking this legalistic argument.  The Supreme Court in Markman did not hold that claim construction is a “mongrel practice.”  It started off by observing that claim construction is intrinsically a mongrel practice, and then held that the Court would adopt a legal fiction that claim construction was a pure question of law.

Why do I say this?  If it is correct that Markman held that claim construction has a factual component, then the result under traditional common law principles is not that trial judges get to decide the factual component.  Trial judges do not decide facts; juries do.  Some well-known exceptions are for suits in equity, for jurisdictional facts, and for procedural facts.  But nobody contends that these exceptions apply.  The claim-construction-is-factual line of reasoning is a legalistic and logical dead end.

Rather, the case for deference to district judges on claim construction must succeed, if at all, entirely based on policy-based concerns.  Trial judges have better access to evidence than appellate judges, and yet they are more experienced at dealing with legal documents like patents than juries.  This is a perfectly plausible policy-based argument, and is almost certainly the true reason for Judges Moore and O’Malley to seek deference for trial judges.  Too bad they feel the need to couch the argument in formalist terms.

Telegram for the Federal Circuit: Electronic Case Filing Is Now Available

By Andrew Dhuey

“I’m following your case at the Federal Circuit – would you please send me a PDF of the parties’ briefs? Thanks in advance.” Patent litigators and prosecutors throughout the nation have been sending emails with this request for years, relying on the kindness of strangers for a professional courtesy. They do this because there is usually no easy way for them to obtain Federal Circuit briefs. The reason for that is the Court – charged by Congress to resolve the most important technology disputes in the world – still does not have electronic case filing (ECF).

In the federal judiciary, ECF is now operational in all appellate and district courts, save two: the Supreme Court and the Federal Circuit. Some Supreme Court justices are comically unfamiliar with such cutting-edge technologies as texting and email, though the Chief Justice probably does know more about pagers than the typical 20-something today. Fortunately, the technological backwardness of the Supreme Court’s case filing system is of no consequence – you can get just about any petition or merits stage brief you might want from SCOTUSblog, the American Bar Association and other online sources.

At the Federal Circuit, however, odds are you have only three options when seeking a brief or motion: i) pay several hundred dollars for a messenger to go to the Court and copy it, ii) pay Westlaw or Lexis a similar amount to download it (if available) or iii) ask an attorney in the case for the favor of a PDF (tip: ask really nicely).

The Court’s long delay in implementing ECF is puzzling. In case after case, Federal Circuit judges and their law clerks demonstrate their ability to learn and analyze extremely complex technologies in widely disparate fields. Why then is the Court lagging behind every regional circuit court and all district courts in the nation when it comes to adopting technology in its own operations?

ECF is not a newcomer to the federal courts. District courts started using ECF in 2002; circuit courts in 2005. On June 28, 2007, then Chief Judge Michel announced that the Court hoped to utilize ECF in fall 2007. Since then, nothing. Well, slightly more than nothing. This message appears on Federal Circuit electronic docket sheets: “The following documents, filed after 8/13/07, are available for download: official caption, entry of appearance, certificate of interest. No other case documents are available electronically.” I can scarcely imagine any documents of less interest to others than captions, entries of appearances and certificates of interest, yet these are the ones you can obtain electronically.

The Federal Circuit’s lack of ECF is not merely a hassle for lawyers in search of briefs and motions. Scores of non-lawyers, including inventors, veterans, federal employees and vaccine-case claimants, represent themselves in Federal Circuit appeals. That rather challenging task would be less daunting if they had easy access to well-written appellate briefs of experienced counsel.

Federal Circuit judges, please consider this an amicus filing from someone who has great respect for you and the Court – it is time to roll out ECF.

Guest Post: Industrial Designs – the Wonder Weapon for the German Blitzkrieg?

PatLit is part of a family of excellent IPKat blogs created by UK attorney Jeremy Phillips. As you might guess, the website has a European focus, although not exclusively so. In a recent post, Michael Thesen wrote about the ongoing patent litigation between Samsung and Apple – with a focus on a German preliminary injunction based upon a European Design Registration. The following is reproduced with permission.

* * *

IgunA preliminary injunction granted on the request of Apple for preventing the sales of Samsung's Galaxy Pad in most of Germany has recently caused a fairly big swivet in the IP community. This 1st instance case, featuring an industrial design and a defendant citing somewhat flimsy evidence, has even found its way to the hall of fame of "patent wars" in minimum time.

What is surprising from a patent litigator's point of view is how simple this is. How is it possible that a preliminary injunction is granted based on an unexamined right? [DDC Note: Unlike US Design Patents, Europe Design Rights are registered without substantive examination.] 

As everywhere, the decision to grant a preliminary injunction requires a careful balancing of the right owner's interest in preventing damages of irreparable nature and the defendant's interest in a fair procedure. For any kind of protective right, doubts in the validity and doubts in the question of infringement will lead to a refusing decision in order to safely avoid erroneous judgments due to precipitate action. 

In patent matters, even a successfully completed examination procedure is not necessarily sufficient to prove the enforceability with a sufficient degree of certainty (at least in Germany). Rather, additional conditions have to be met. In the case of unexamined utility models, the burden of substantiating the enforceability is at the plaintiff's side, which must produce at least the results of a professional search carried out on the subject-matter of the utility model or a positive decision of an invalidity procedure.

Nothing of this kind can be found in the judgment of the Düsseldorf court – the reason being fairly simple: the validity is legally presumed in Art. 85(1) of the Community Design Regulation (CDR), i.e. the court has to treat the community design as valid. This legal presumption may be challenged by way of a counterclaim. However, this shifts the burden of proof/substantiation to the defendant's side. The applicability of Art. 85(1) CDR to interim relief has been questioned, but is generally accepted as far as the author of this note knows.

In practice, the short time scale of procedures in interim relief, the lack of search possibilities comparable to those available for patents and utility models and an official search result to start with leaves the defendant defenseless. This has a further crucial effect on the question of infringement because the defendant has practically no possibility to substantiate the existing design corpus such that the judge has to presume a high degree of freedom of the designer and thus a large scope of protection (cf. Art 10(2) CDR).

Further, the Hagen District court holds that the damages caused by infringements of industrial designs are more likely to be of irreparable nature as compared to patents because the industrial value of the former lies primarily in its individual character, which would be "diluted" when admitting counterfeits during the procedure of the merits, whereas the value of the patent basically lies in its technical advantages which are, as such, not affected by counterfeits on the market.

In particular in the world of telecommunication patent wars there is one further feature of industrial designs which makes them frightening weapons: they are not essential for standards and, thus, not subject to FRAND agreements. As a matter of course, there is no way to obtain interim relief against a global competitor on the basis of a standard-relevant patent. 

In other words, you need not bother with being fair, reasonable and non-discriminative when using industrial designs.

The result is that industrial designs are tools which are largely underestimated in the portfolio of most of the IP right holders. Design rights are not expensive, powerful, can be enforced rapidly, easy to understand even for less experienced judges or customs officers, not susceptible for translation errors even in China, and deserve a decent fraction of every company's IP budget.

The original post can be found here:

Sarnoff: Derivation and Prior Art Problems with the New Patent Act

In a new Patently-O Patent Law Journal essay, Professor Joshua Sarnoff (DePaul) highlights a set of important problems in the Leahy-Smith America Invents Act. The essay, titled Derivation and Prior Art Problems with the New Patent Act focuses primarily on the elimination of 35 U.S.C. § 102(f) and its implications regarding the patentability of material that was either wholly or partially derived from another source.

Professor Sarnoff writes: 

Legislation sometimes is enacted that obviously requires either immediate revision or creative administrative and judicial interpretation. The new Leahy-Smith America Invents Act's derivation and prior art provisions fall in that category. Whether or not the move from a first-to-invent to a first-inventor-to-file system is viewed as good policy and as authorized by the Constitution, the particular changes made to the prior art provisions may not prevent or invalidate patents on inventions derived from others, i.e., when the applicant has obtained knowledge of an invention from another, original inventor and then files for a patent on the same or a similar invention. In particular, obvious inventions made with unauthorized derived knowledge will now be patentable, given the elimination of prior art section § 102(f). Absent creative interpretations by the U.S. Patent and Trademark Office (PTO) and the courts, the new derivation proceedings will not prevent a first filer from obtaining a patent even if the first filer's invention is merely an obvious extension of information derived from another. Further, the new act adds a narrow and poorly understood category of prior art that may generate years of needless litigation to re-settle the currently well-understood boundaries of the public domain. I discuss these problems in detail below.

There is some hope that Congress and the Administration will take Professor Sarnoff's concerns to heart.

Read the article: Joshua D. Sarnoff, Derivation and Prior Art Problems with the New Patent Act, 2011 Patently-O Patent Law Review 12 at /media/docs/2012/10/sarnoff.2011.derivation.pdf.

Prior Patently-O Patent Law Journal Articles include:

Guest Post: Accelerated Examination and Prioritized Examination

By: Nicholas Witchey, Ph.D.; Robert D. Fish, Esq.; and the Fish & Associates team

Passage of the Leahy-Smith America Invents Act (AIA) includes many changes to U.S. patent law. This article focuses on one change that might be overlooked: Prioritized Examination ("PE") of patent applications. The PE program allows an applicant to pay an additional $4800 fee ($2800 for small entities) to place an application on a prioritized track where the patent office has a goal to provide final disposition of the application (i.e., final rejection or allowance) within a year on average. Interestingly, the AIA retains the Accelerated Examination ("AE") program established on August 26, 2006, as discussed in MPEP 708.02(a). While the PE program prioritizes an application for prosecution ahead of standard filings, the AE program prioritizes and accelerates the actual prosecution of the application. The prioritized examination and accelerated examination programs co-exist as of September 26, 2011.

We recently had a chance to discuss co-existence of the AE and PE programs with Robert W. Bahr, Acting Associate Commissioner for Patent Examination Policy, during a recent MarcusEvans? IP Law Summit in September, 2011. Mr. Bahr stated there are no current plans to make changes to the AE program to align it with the PE program, or vice versa. He sees both programs as viable examination routes for applicants, and that applicants are expected to make a business decision as to which program should be taken. Therefore, it is up to the applicant to work with their patent practitioners on how best to align patent filing tactics with clients' business objectives.

How do these programs compare and which makes the most sense to use? The AE program and PE program are far from identical and have many differences, which gives rise to possible benefits in aligning patent application filing tactics with a client's business strategy.

One of the major differences is that the PE process does not require a pre-examination search document ("PESD") and an accelerated examination support document ("AESD") whereas these documents are required for the AE program to illustrate how the claims of an AE application are allowable over known related art. Preparation of the PESD and AESD documentation requires significant searching and analysis on part of the practitioner. Following the PE program can save an applicant $10,000 or more over the AE program in searching and analysis costs, but that doesn't necessarily mean the total cost is less expensive over a lifetime of an application's prosecution. Within the AE program, the time spent in searching for related art and in improving/focusing the claims tends to yield stronger claim sets, which contributes to faster allowance possibly within months of being accepted into the AE program. Without such thoroughly analyzed claim sets, an applicant could spend $10,000 and many years going back and forth with the examiner to achieve allowance for an application filed within the PE program.

Other than PESD and AESD considerations, the basic requirements for putting an application on file are the same for AE and PE applications, (e.g., formal drawings, no missing part, correct margins, etc.) except that the AE process allows only 3 independent claims and 20 total claims, while the PE process allows 4 independent claims and 30 total claims subject to excess claim fees. In both cases failure to follow the filing rules will result in the petition being dismissed or denied.

There is also a significant difference in fees. The filing fees of an AE application for a large entity are $1380, which includes $130 in petition fees, $1250 in filing fees, plus any excess page size fees. Corresponding small entity filing fees are $660 plus any excess page size fees. In contrast, the filings fees of a PE application for a large entity are $6480, including $4800 in petition fees, $1250 in filing fees, a $130 processing fee, and a $300 publication fee, plus excess claim and page size fees. The corresponding total for a small entity is $3630, plus excess claims and page size fees. From purely a filing fee point of view, the AE program is less expensive. Micro entity discounts do not apply to a PE application petition fee.

Prosecution is also different. AE turnaround is one month on non-final office actions, and failure to meet that strict time requirement results in abandonment of the application. Within the PE program turnaround is the normal three months. The three month deadlines can be extended as usual, but doing so results in the application falling out of the PE program. Applications that have fallen out of the PE program are placed on an examiner's standard docket. Thus, the AE program returns faster results than the PE program, but also has more severe consequences when the response dates are missed.

There are also some inconsistencies in availability of AE and PE applications. For example, one can file a PE application for a plant, while the AE program can not be used for plant patent applications. At least initially, the PE program is also being limited to 10,000 applications per USPTO fiscal year. There doesn't seem to be a formal limit on the number of AE applications, but there have only been an average of about 800 AE applications filed per year so there is little concern with respect to the USPTO limiting AE submissions.

With the introduction of the AE program, the PE program, and other prosecution tracks, the USPTO appears to be developing a full spectrum of possible approaches for prioritizing patent applications rather than a one-size-fits-all approach. Clients can select a style of examination based on their business needs or available budgets. If a cost-effective immediate feedback is required, the PE program might be a proper path for clients wishing to get prosecution started early. If a strategic set of claims are required, the AE program would likely be the best approach for clients wishing to obtain issued claims quickly. We expect the PE program to likely fill their allocated 10,000 applications per fiscal year quickly. In fact, our office has already started filing application with PE petitions. When the allotted yearly slots are taken, the AE program will remain available.

Our office has substantial experience with the AE program, and, although we are strong advocates of the AE program, we believe that PE program also offers other benefits to clients. Clients now have a greater selection of filing options to meet their business goals or filing budgets. A detailed analysis that one would conduct for an AE application would still have merit when filing an application within the PE program. There may even be cases where an applicant might strategically decide to file an application, or a family of applications, in both programs to obtain an optimized result.

The AIA also allows for changes to other prioritized programs including petitions to make special or important technologies, and patent prosecution highways. These programs can also be leveraged to prioritized examination and offer benefits to clients as well. We encourage readers to explore all the programs currently offered or that will be offered over the next 18 months.

A Response to Professor Chiang

By Jason Rantanen

Professor Tun-Jen Chiang's post on best mode (below) argues that Congress must necessarily have intended that patent applicants would not disclose best mode, given that it was aware of the potential consequences of removing litigation enforcement.  Thus, Professor Chiang concludes, Congress not only abolished best mode, but then went about "lying" about it.  I have serious doubts about this conclusion.

Despite being styled as a reply to Professor Sheppard's description of Congressional thought about best mode, Professor Chiang misses the fundamental point of Professor Sheppard's post: that although Congress recognized that removing the litigation mechanism for enforcing best mode might result in reduced compliance, there remained alternative mechanisms – which Professor Sheppard discussed – for encouraging applicants to comply with the best mode requirement.

While I personally question the efficacy of the alternate mechanisms for enforcement – which rely primarily on criminal sanctions that, historically at least, have been rarely employed even to deal with more significant misconduct – it is clear that Congress has a higher view of these types of enforcement mechanisms than I do, especially given its treatment of inequitable conduct in the America Invents Act.  Thus, I find it difficult to accept Professor Chiang's dichotomy that either Congress must have been "dumb" or "lying," as well as his analogy to a child with matches.  This issue is far more complex than such an oversimplification allows, and it is entirely reasonable (and probably far more accurate) to recognize that Congress was attempting to balance a difficult issue: the costs of patent litigation versus the need or desire for disclosure of best mode, and elected to proceed by relying on alternative enforcement mechanisms that, while perhaps less often enforced, might potentially provide equal deterrence through more severe sanctions.  If one must use an analogy, it is more similar to giving a teenager a car, explaining that speeding might result in a criminal penalty, while nevertheless providing reassurance that you will not take away the car if he or she is caught speeding, than it is to a child with matches.

Guest Post on Best Mode by Tun-Jen Chiang

Was Congress dumb, or was it lying?–A reply to Professor Sheppard

Guest Post by Tun-Jen Chiang, Assistant Professor of Law, George Mason University School of Law

Imagine a parent who gives his child a box of matches, and tells the child not to play with the matches. The parent then assures the child that, if he does play with the matches, there will be no punishment whatsoever, and nobody will be watching him for the next hour.

Unsurprisingly, the child plays with the matches and burns the house down. When the insurance company denies the claim because of intentional arson, the parent screams: “but I told him not to play with the matches!” In this circumstance, the charitable inference is that the parent had a charmingly naïve view about the obedience of his child. The uncharitable inference is that the parent knew the child would play with the matches, and the admonition not to play with them was insincere “cover.”

What does this have to do with best mode? In her post, Professor Sheppard assures us that Congress knew precisely the consequences that would occur. Although she protests that her post was only descriptive and not a defense of the law, one cannot help but sense from her “vehement” disagreement with the critics an implication that those who think Congress didn’t know what it was doing are being unfair in some way (When someone says "You can say X is wrong. I agree X is wrong. But don't say X is dumb.", there is an implication that saying X is dumb is unfair). But the critics are not being unfair; they are being charitable.

With Professor Sheppard's assurance that Congress knew the consequences, the unavoidable conclusion is that Congress intends the probable consequence that patentees would not disclose the best mode. The reason for maintaining a best mode requirement on paper now seems to be to provide political cover to scream “but we told them to disclose the best mode!” whenever the critics talk about lax disclosure requirements. This is much worse than either abolishing best mode outright or keeping best mode with no enforcement on the misguided faith that patentees would still comply — it is Congress abolishing best mode and then lying about it.

The Federal Circuit’s Rare Opportunity to Protect the Public from Agency Misconduct

Guest Post by Richard B. Belzer, Ph.D.

The Federal Circuit has before it an unusual petition for rehearing en banc. It involves an issue that, to my knowledge, has never before been heard by this court, and it's one that hardly anyone who practices patent law even knows about. Indeed, the reason that this issue is arising now is the U.S. Patent and Trademark Office has made an extraordinary (and heretofore successful) effort to prevent inventors and the patent bar from understanding it.

For this reason, my nonprofit organization has filed an amicus brief asking the Court to uphold statutory rights that, until recently, possibly no patent lawyer knew how to defend. If the Court acts favorably, it can undo decades of rogue agency practice at the PTO.

In In re Lovin, the key issue is whether an examiner's failure to state a prima facie case of obviousness, as required by MPEP Chapter 2100, is sufficient ground for the Board of Patent Appeals and Interferences to vacate or reverse a rejection. Lovin's brief alleges that the Board abandoned its longstanding practice of vacating rejections when the examiner had not made this case, and instead required the appellant to make a substantive showing of patentability in their appeal brief—that is, to prove a negative. The amicus brief of CFPH, LLC, a business unit of Cantor Fitzgerald, offered a complementary explanation of why the Board's interpretation of PTO Rule 41.37 was incorrect.

Regulatory Checkbook, the nonprofit I manage, seeks leave to intervene because the PTO lacked any legal authority to compel Lovin to provide this information. In fact, until December 22, 2009, the PTO had no legal authority to require any appellant to comply with any of the material information collections contained in 37 C.F.R. Part 41.

How could that be? To understand why, let's take a short trip to the Office of Management and Budget, which occupies the tall red brick building across Lafayette Park from the tall red brick building housing the Court of Appeals for the Federal Circuit.


Guest Post: Because Inquiring Minds Want to Know – Best Mode – Why is it One-Sided?

(Today PatentlyO is starting a series of periodic guest posts by Professor Christal Sheppard on the underlying rationales for some of the sections of the America Invents Act.  Prior to joining the University of Nebraska Lincoln College of Law this year, Dr. Sheppard was Chief Counsel on Patents and Trademarks and Courts and Competition policy for the United States House of Representatives Commmittee on the Judiciary. – JAR)

By A. Christal Shepard

Since inquiring minds want to know, I will attempt to give, in a series of posts, insights into the underlying rationales for a few sections of the America Invents Act that are causing particular confusion among my friends and new colleagues who were fortunate to not have been as intimately involved in the machinations of the America Invents Act as I have been over the last three Congresses.  


I start this conversation with a blanket statement – these are my recollections of the rationales and do not represent the views of any particular member of Congress.  More importantly, do not shoot the messenger.  This blog is only intended to provide contemporaneous context, not a comprehensive analysis, before the march of time distorts memories.  I will not attempt to defend; I will merely explain.

There has been a great deal of consternation and confusion about the changes to the Best Mode requirement, Section 15 of the America Invents Act.  This section is plain on its face, and yes, it is, and was intended to be, bifurcated. The Best Mode requirement remains a requirement, unchanged, for obtaining a patent under 35 U.S.C. § 112 Paragraph 1; however, under the new law, Best Mode can no longer be used as a defense in any action involving the validity or infringement of a patent.  More specifically, a failure of an inventor to disclose their Best Mode is no longer a basis for invalidating, canceling or making a claim unenforceable even if it is later determined that the inventor unquestionably knew of a Best Mode and intentionally did not disclose it to the United States Patent and Trademark Office (USPTO) during examination.  

The bifurcated reform is a compromise that addresses the legitimate litigation concerns with the subjective nature of Best Mode without undermining the requirement for full disclosure that is the quid pro quo for the grant of a monopoly.  If Best Mode was removed completely, Congress could be seen as removing yet another obstacle to trade secret protections overlapping with monopoly rights.  

The impetus for removal of Best Mode from Section 112 of Title 35 of the U.S.C. came from several recommendations to Congress to limit the subjective portions of patent litigations.  I point to one such recommendation that was highly influential, the National Academies’ A Patent System for the 21st Century

Among the factors that increase the cost and decrease the predictability of patent infringement litigation are issues unique to U.S. patent jurisprudence that depend on the assessment of a partys state of mind at the time of the alleged infringement or the time of patent application… Because the [Best Mode] defense depends on historical facts and because the inventors state of mind usually can be established only by circumstantial evidence, litigation over [Best Mode] especially pretrial discovery can be extensive and time-consuming.[1]

Although the National Academies’ report also states that eliminating Best Mode completely could be accomplished without “substantially affecting the underlying principles that these aspects of the enforcement system were meant to promote.”[2] Their, and others’, primary objection to Best Mode was that it was an unnecessary burden for litigation, similar to inequitable conduct, often pled but rarely found.

While Best Mode may be unnecessarily burdensome for litigation, Best Mode is not a superfluous requirement.  It is intended to implement the constitutional directive of "promoting the progress of science and the useful arts"[3] by preventing an inventor from obtaining patent protection, “the embarrassment of a monopoly,”[4] while simultaneously concealing a trade secret for the preferred embodiments.  “The purpose of this requirement is to restrain inventors from applying for a patent while at the same time concealing from the public preferred embodiments which the inventor has, in fact, conceived.”[5]  There is nothing else in the patentability requirements that mandates an inventor’s disclosure of their Best Mode. 

The fault with Best Mode in litigation is not a fault of principle; it is a fault of execution – the difficulty of understanding the contents of an inventor’s mind.

If one believes in the quid pro quo of full disclosure to the public in exchange for a limited monopoly, then the disclosure of an inventor’s Best Mode is essential.  If monopoly is the carrot in exchange for divulging what otherwise would remain hidden as trade secrets then trade secrets SHOULD be divulged in order to patent.  Changing the Best Mode requirement for obtaining a patent would be a significant deviation from U.S. policy and practice that was unnecessary to correct the perceived problem. 

The law should and still does require disclosure of Best Mode, but has eliminated Best Mode from litigation.  The reform addresses the concerns without undermining the requirement for disclosure. 

Many scholars have questioned the fact that, under the new law, the day after a patent issues, the inventor could state that, yes there was a Best Mode known at the time of application that was not disclosed and yet the intentional nondisclosure would have no effect on the claims.  The claims could not be invalidated, canceled or made unenforceable.  

There has been a lot of criticism that Congress did not contemplate this result.  Nothing could be further from the truth. This result was absolutely contemplated by the decision makers.

Essentially the question was, how does one stop inventors from lying to the patent office, that the inventor has no Best Mode, when the inventor in fact has a preferred embodiment?  The more accurate question to ask is, when there are no obvious ramifications, why would an inventor divulge a Best Mode when they can keep it as a trade secret?  

Congress did take this into account but did not address it in the legislation for a variety of reasons. I present a few of the considerations that were discussed.

  1. Give the USPTO authority to undertake  investigations when it is presented clear evidence from a court or third party that a Best Mode was intentionally not disclosed.  Here, the counterargument is that the USPTO is even less well situated than the courts for such a subjective determination.  Furthermore, it is not practical to move this determination from the courts to the USPTO. 
  2. Present evidence of intentional concealment of Best Mode to the Office of Enrollment and Discipline (OED) at the USPTO with the deterrent being the possible loss of the ability to prosecute patents, removal from the patent bar.  This is arguably already possible under 35 U.S.C. § 32, Suspension or exclusion from practice.  The obvious flaw is the same as in the first example; the USPTO is not well situated for subjective inquiries.  Additionally, it may result in punishing the patent practitioner for situations where the inventor intentionally concealed but the patent practitioner was unaware.
  3. Institute a mechanism, identical to that which ultimately ended up in Section 12 of the America Invents Act – the new Section 257(e), where evidence of material fraud on the USPTO shall be referred to the Attorney General for possible prosecution under 18 U.S.C. § 1001, a criminal statute penalizing anyone who knowingly and willfully “makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry” on any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States. Again, arguably this deterrent, which is up to a five year prison term, is already possible under 18 U.S.C. § 1001 without any change in the law.

Note that all of these resolutions are arguably already possible under existing law.

One suggestion, not put forth, for the answer to the riddle of “when there are no obvious ramifications, why would an inventor divulge a Best Mode when they can keep it as a trade secret?” is make the ramifications more obvious. The USPTO could add a check box to application forms, stating “I (we), the inventor(s) have no preferred Best Mode and are aware that failure to disclose a Best Mode can result in up to a five year jail term.” But that is a matter for the USPTO and not Congress.

Would a “check box” solve the problem?  No.  But it is an affirmative act, as opposed to an intentional omission.  This affirmative act may be useful in the exercise of 35 U.S.C. § 32 and 18 U.S.C. § 1001 should there be abuses and allows Congress to preserve the U.S.'s emphasis on full disclosure in exchange for the government grant of monopoly.

In the end, I do not disagree with the criticisms of the effect of the new law on Best Mode.  But I do vehemently disagree that the consequences were neither considered nor understood by Congress.

[1] Stephen A. Merrill et al., A Patent System for the 21st Century, no. 7, 121 (2004).

[2] See id. at 7.

[3] U.S. Const. art. I, § 8, cl. 8.

[4] Thomas Jefferson to Isaac McPherson, 13 Aug. 1813.

[5] Young Dental Mfg. Co., Inc. v. Q3 Special Products, Inc., 112 F.3d 1137, 1144 (Fed. Cir. 1997).

 A. Christal Sheppard is an Assistant Professor of Law at the University of Nebraska Lincoln College of Law and former Chief Counsel on Patents and Trademarks and Courts and Competition policy for the United States House of Representatives Committee on the Judiciary.  Look for her next PatentlyO posting on Supplemental Examination.

Guest Post: Microsoft v. i4i – Is the Sky Really Falling?

By Paul F. Morgan

The forthcoming Supreme Court decision in Microsoft v. i4i, case number 10-290, seems likely to eliminate the Federal Circuit's judicially imposed "clear & convincing evidence" requirement for invalidating patents, and thus jury instructions thereon, at least for prior art not of record in the patent application file. 

Typical of some of the frightening projections is the January 1, 2011 "Law360" article in which Matthew M. Wolf, a Howrey LLP partner, is quoted as saying that: "it will radically alter the nature of trials in the patent world and will apply to every patent case" and that "if juries are told that the standards are the same for invalidating patents as for infringing patents, there will be a lot more defence verdicts and we are going to see fewer defendants desirous of settlement."

That is, it is argued that this result would flow from patent invalidity challenges having the same "preponderance of the evidence" standard as for proving patent infringement.  Technically, that might become the case.  But how significant would this change be in reality?  

First, more than 97% of patent suits are settled before trial with no judicial validity test.  Of the small percentage of patent cases that do go to trial, the vast majority are decided or settled there or on appeal on non-infringement, not on invalidity.  Considering the many good reasons why the vast majority of accused or actual defendants are willing to settle rather than risk the very high costs and uncertainties of patent litigation, even against numerous dubious troll suits, how much is this one forthcoming change likely to affect patent litigation and settlements overall?

The test is, would this change really dramatically affect anticipated jury decision-making reality?  [Because patent invalidity is rarely decided other than by juries, such as on summary judgment motions, in view of disputed facts.  USPTO patent reexamination standards would not be affected at all by this decision, and are usually delayed too long by the USPTO to be helpful anyway.] 

Removing this higher evidentiary burden might indeed affect some unknown relatively small number of future post-trial JMOL and Fed. Cir. decisions.  But note the relatively small percentage of those based on invalidity as opposed to non-infringement.

So, what is the basis for projecting that the very small percentage of patents now being held invalid by juries would somehow greatly increase due to this one potential change in jury instructions?   [Even if one really believes that juries really do pay close attention to, and fully understand, the typical lengthy jury instructions in a patent infringement suit and are willing split hairs over those instructions.   See, e.g., the length of the  AIPLA model jury instructions.]  Has anyone done a mock jury study to see if leaving out the present jury instruction for "clear and convincing evidence" dramatically changes outcomes?

Could contesting patent validity before a jury realistically become equated to contesting infringement, as alleged?   Attacking the validity of a patent is attacking something granted by the United States Government, while deciding infringement is just considering one private company's arguments against another.  Furthermore, the jury can be shown for emphasis the Government gold seal and blue ribbon on the patent.  Even if the statutory presumption of patent validity could technically be overcome by a mere preponderance of evidence for prior art not of record, the patent owner should be entitled to a jury instruction on the statutory presumption of patent validity.  [Which could be contrasted to no such instruction for deciding infringement].   For example, as indicated Section 5.1 of the June 23, 2009 "National Patent Jury Instructions" and its "Committee Note," presently courts may optionally combine the two existing defense burdens into a single jury instruction that the accused infringer "bears the burden of proving that it is highly probable that the claims are invalid." [Likewise, some other model patent jury instructions.]  However, the express "Committee Note" rationale for that is a presumption that "instructing the jury on the presumption in addition to informing it of the highly probable burden of proof may cause jury confusion as to its role in deciding invalidity. This single instruction therefore omits any reference to the presumption of validity. Some courts, however, follow the more traditional approach, and instruct the jury on the presumption. Both approaches appear consistent with Federal Circuit law."  Thus, if the "clear and convincing evidence" burden is removed, this "highly probable" instruction would have to be removed, and this present rationale for not instructing a jury on the statutory presumption of patent validity would seem to disappear?  

The other public scare story is that this decision will lead to a flood of additional prior art citations in patent applications.  That also lacks factual credibility.  The already-existing fear of personal "inequitable conduct" accusations is far more motivating than the mere possibility getting a slightly better jury instruction.  Furthermore, few applicants would be willing to pay for a much more costly prior art search to add much more art to an IDS just for that remote reason, and also to risk being accused of not having actually read that art in making assertions in claim prosecution.

Whether as a matter of public policy this anticipated change is good or bad for patent law and technical or economic progress is not the subject here.  Even if the extent of the potential impact were factually supported, it may not be very relevant to this Supreme Court decision.   As understood, this case is being contested primarily on to whether or not there is a proper legal basis and/or precedent for the Federal Circuit to have imposed this additional, non-statutory, evidentiary burden for patent litigation.  It is argued that that is inconsistent with modern Supreme Court evidentiary rules for civil cases in general and inconsistent with the evidentiary rules for pre-Federal-Circuit patent suits in the other federal circuits when they were deciding patent cases.  [So it is surprising that this issue has not been this contested before.  Presumably due to most defendants waiving it by failing to object to this jury instruction?]  

The recent decisions controlling the evidence for and/or reducing patent infringement damages recoveries seem to me far more likely to impact patent licensing and settlement negotiations than Microsoft v. i4i.  See Uniloc USA, Inc. v. Microsoft Corp., (Fed. Cir. Jan. 4, 2011),  Lucent v. Gateway (Fed. Cir. 2009), the two E.D. TX D.C. decisions in which Judge Randall Rader sat by designation, Cornell v. HP (March 2009) and IP Innovation v. Red Hat and Novell (March 2010), and Judge Ward's reduction of a jury award of $52 million in LaserDynamics v. Asus Computer International  down to only $6.2 million.

Guest Post: Copyrights, Patents, and International Exhaustion

By Professor Ryan Vacca

Last week, the Supreme Court heard oral arguments in Costco Wholesale Corporation v. Omega, S.A., to determine whether copyrighted works first sold in Switzerland and then imported into the U.S. infringed the copyright owner's right of distribution or whether the first sale doctrine (aka the exhaustion doctrine) applied to make the importation non-infringing.

The facts are fairly straightforward.  Omega is a watch company that manufactures watches in Switzerland.  Omega owns a copyright in a small visual image that is laser-engraved onto each Swiss-manufactured watch.  Costco, a U.S. warehouse retailer, acquired genuine Omega watches from a third party, who had purchased them from an authorized Omega distributor abroad.  Costco subsequently sold these watches in the United States.  Omega alleged that Costco's sale of these watches infringed its exclusive right to distribute copies of its copyrighted work under § 106(3) of the Copyright Act because § 602(a)(1) provides that:

Importation into the United States, without the authority of the owner of the copyright under this title, of copies … of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies … under section 106.

Costco argued that its sales in the U.S. were non-infringing under the exhaustion doctrine codified in § 109, which provides:

Notwithstanding the provisions of section 106(3), the owner of a particular copy … lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy.

As I blogged earlier and others have discussed here and here, the Court is wrestling with what the phrase "lawfully made under this title" means in § 109 of the Copyright Act.

Costco argues that goods manufactured abroad can still fall within this phrase whereas Omega argues that goods manufactured abroad are not "made under this title" unless the goods are made or sold with permission from the copyright owner to import the goods into the United States. At oral argument, the Justices quickly pointed out the difficulties in these two interpretations on both a textual and policy level.

In contrast to the formidable task before the Court in the copyright context, patent law takes a relatively easier approach to the international exhaustion issue. The seminal Supreme Court case on international exhaustion under patent law is Boesch v. Graff, 133 U.S. 697 (1890). In Boesch, the plaintiffs held a U.S. patent and German patent for an improvement to lamp burners. The defendants purchased burners in Germany from Mr. Hecht, who was authorized to make these burners in Germany because of Germany's prior user defense (Hecht was not authorized by the patentees). When the defendants imported these burners into the U.S., the patentees sued for infringement. The defendants argued that their legal purchase in Germany from Mr. Hecht permitted them to import and sell them in the United States. The Court disagreed and held that although Mr. Hecht had a right to make and sell the burners in Germany under German patent law, this had no effect on the U.S. patentee's ability to enforce its U.S. patent in the United States.

Over a century later, the issue of international patent exhaustion arose again in Jazz Photo v. ITC, 264 F.3d 1094 (Fed. Cir. 2001) and Fuji Photo Film v. Jazz Photo, 394 F.3d 1368 (2005), where the Federal Circuit reaffirmed the Supreme Court's holding in Boesch and clarified that the exhaustion doctrine would not apply even if the U.S. patentee or its licensees authorized the first sale abroad. In other words, even if the U.S. patentee permitted the first sale in a foreign country, a subsequent attempt to import such an item into the U.S. would still constitute infringement. In support of its holding, the Federal Circuit noted that the U.S. patentee's "foreign sales can never occur under a United States patent because the United States patent system does not provide for extraterritorial effect."

Based on the dialogue between the Justices and the attorneys in Costco, it appears that the Court may be uncomfortable limiting the exhaustion doctrine in the copyright context solely to situations where the first sale took place within the United States. They seem to be struggling to articulate a standard that allows some foreign sales to take advantage of the exhaustion doctrine while giving the phrase "lawfully made under this title" some meaning.

If, in the end, the rule announced by the Court in Costco differs from the holdings in Boesch and Jazz Photo, then what effect may this have on the future of patent law's exhaustion doctrine? Of course, the Court could maintain a dual approach, where copyright exhaustion and patent exhaustion are treated differently. However, if presented with an international patent exhaustion case, the Court could rely on its Costco holding and try to align the copyright and patent rules. We have seen the Court take this approach recently in MGM Studios v. Grokster, 545 U.S. 913 (2005), when it created a new theory of secondary liability in copyright law (the inducement theory) by relying, in large part, on patent law's recognition of this theory via statute in § 271(a) of the Patent Act.

Another possibility for harmonization of copyright and patent law is that the Court takes its cue from patent law and hold that exhaustion in the copyright context only applies when the copyrighted works were first sold or otherwise distributed in the United States. If this disrupts the policy concerns underlying the exhaustion doctrine, then Congress can always step in to resolve this issue.

UPDATE: Investigating Patent Law’s Presumption of Validity

By Etan S. Chatlynne

Last year, I investigated the role that the presumption of validity, and the evidentiary standard for rebutting it, played in validity challenges adjudged at the Federal Circuit. In March 2010, Professor Crouch graciously published the study's results in the Patently-O Patent Law Journal. [Link]. In response to Microsoft's petition for certiorari challenging the Federal Circuit's hard-line application of a clear and convincing standard, please find updated statistics below that include Federal Circuit decisions through October 2010. To learn the methodology for collecting the data, and to read my understanding of what they suggest (and do not suggest), please refer to the original publication. A spreadsheet of the updated data is available. [Link].

At least eighty-eight of the one hundred nineteen (74%) patent challenges analyzed were evidentiary-standard independent. Of these determinations, forty-one (47%) were based on a granted motion for summary judgment, six (7%) were based on a granted motion for JMOL, twenty-four (27%) resulted from a jury trial, and seventeen (19%) resulted from a bench trial. Twenty-one (24%) determinations were reversals and seventy (80%) resulted in invalidation. The Federal Circuit mentioned the presumption or the evidentiary standard for rebutting it thirty-four times (39%) and expressly applied them eleven times (13%).

At most, thirty-one of the one hundred nineteen (26%) patent challenges may have been evidentiary standard dependent. Of these determinations twenty-three (74%) resulted from a jury trial and eight (26%) resulted from a bench trial. None of these challenges resulted in invalidation, and each was upheld at the Federal Circuit. The Federal Circuit mentioned the presumption of validity or the evidentiary standard twenty-one times (68%) and expressly applied them fifteen times (48%).

Thanks to Lucas Watkins and Steve Kenny for helping to create this update.

Guest Post: What Ultimately Matters In Deciding the “Gene Patenting” Issue?

By Jacqueline Wright Bonilla, PhD, JD. Ms. Bonilla is a partner at Foley & Lardner and filed an amicus brief supporting Myriad's position.

In entering the fray of this discussion, I note that I, along with two of my colleagues at Foley & Lardner LLP, submitted an amicus brief in the AMP v. PTO (a/k/a ACLU v. Myriad) "gene patenting" case on behalf of our clients Rosetta Genomics and George Mason University. In addition to our brief, other colleagues at our firm submitted a different amicus brief on behalf of a different client, Alnylam Pharmaceuticals. Both briefs, along with Myriad's brief and a number of other amicus briefs filed last week, support a reversal of the district court opinion as it pertains to "isolated DNA" composition claims. These briefs agree that such claims are patent eligible under current law, and should continue to meet the threshold of 35 U.S.C. § 101 as a matter of policy and social considerations. We are sensitive to dire consequence to biotech innovation in the face of a possible alternative outcome.

As it turns out, however, while such briefs agree on patent eligibility of "isolated DNA" claims, a number of briefs differ in viewpoints regarding applicable law, and even which cases are relevant versus not. As such, a reading of just the briefs filed with the Federal Circuit so far—even without considering the ACLU brief yet to be filed, much less amicus briefs filed in support of the ACLU's position—underscores a point worth mentioning.

The point is this: reasonable minds can differ on an interpretation of what constitutes relevant case law and how it should be interpreted in this case. This point is often missed in the hubbub we see in the press. For instance, many have commented on the amicus brief filed by the Department of Justice last week. Some have accused the DOJ of misreading the law entirely and attempting to eviscerate biotechnology innovation altogether. Such viewpoints misread the point of the DOJ brief, in my opinion.

Look what the DOJ brief actually says. It argues that the district court got it wrong in certain important respects. As stated in the DOJ brief:

… the district court erroneously cast doubt on the patent-eligibility of a broad range of manmade compositions of matter whose value derives from the information encoding capacity of DNA. Such compositions—e.g., cDNAs, vectors, recombinant plasmids, and chimeric proteins, as well as countless industrial products, such as vaccines and genetically modified crops, created with the aid of such molecules—are in every meaningful sense the fruits of human ingenuity and thus qualify as "'human-made inventions'" eligible for patent protection under section 101. [] The district court therefore erred in invalidating the challenged composition claims, such as claim 2 of the '282 patent, that are directed solely to cDNAs.

DOJ brief, pages 9-10 (citations omitted). As part of this discussion, the DOJ likewise agrees with our position that claims directed to recombinant vectors comprising any isolated DNA—even DNA having a sequence exactly as it exists in nature—constitutes patentable subject matter. See DOJ brief, page 16, discussing claim 8 of the '282 patent. Thus, unlike the district court opinion, the DOJ proposal does not throw the entire biotech baby out with the bath water.

That said, it appears that the DOJ may cut off a hand of the biotech baby. It argues that "isolated DNA" comprising a sequence from genomic DNA as it exists in a body does not constitute patentable subject matter. The DOJ brief (pages 10-11) argues that the "chemical structure of native human genes is a product of nature," even "when that structure is 'isolated' from its natural environment."

This position presents a slippery slope of considerable concern to those affiliated with biotech innovators responsible for actually getting medical products to patients. For example, the DOJ sidesteps an important scientific fact: all isolated nucleotide compositions—regardless of sequence—are, in fact, engineered DNA molecules. Such DNA molecules are necessarily, by definition of their existence in an isolated form, "human made" inventions. These products simply do not exist without human intervention. Thus, how does one successfully distinguish what is really "human made"? Moreover, human involvement is needed to identify valuable isolated nucleic acid molecules, such as DNA vaccines, PCR probes, interfering or micro RNA, etc., and then isolate them. When exactly is the human involvement sufficient to meet § 101? An additional slippery slope in the DOJ position is that many non-nucleotide compositions also exist as "products of nature" in a human body or other natural physical state. These compositions include many valuable small molecule pharmaceuticals, proteins, antibodies, just to name a few. Such compositions could likewise be subject to the same legal reasoning propagated in the DOJ brief. In other words, the fallout of the DOJ's position has wide-sweeping implications, even if not as flabbergastingly debilitating as the district court opinion.

This all said, I propose that it does no good to simply assert that the DOJ (or any party or judge for that matter) incorrectly reads relevant case law and/or misunderstands the science wholesale. As mentioned already, reasonable minds can differ on case law interpretation in this case, and how to apply scientific facts to the law. The sheer number of briefs and differences in positions—see DOJ versus USPTO as just one example—indicates this phenomenon in vivid color.

Thus, at the end of the day, the Federal Circuit and/or Supreme Court may ultimately decide the outcome of this case based on policy and social/economic considerations. The courts will consider case law, of course, but in reality may only apply it after the fact. I also believe that any precedential decision issued here, either way, will necessarily have at least some negative fallout. In fact, the patent system itself intends negative fallout to some people by virtue of granting a right to exclude others for a limited time. Thus, keeping the ideals of patent law in mind, it will be critical for courts to choose a course of action that provides the most amount of good, while causing the least amount of collateral damage. In other words, forget all the clever legal mumbo-jumbo—what do we want to happen here for the better collective good?

My understanding of the patent system is that it exists for the very purpose of stimulating innovation, as well as public disclosure of that innovation. As discussed at length in our amicus brief (and by others), abolishing patent eligibility of genetic inventions—not to mention inventions in other areas of health and medicine potentially impacted by a decision here—will have more of a dampening effect on research, development and innovation than any patent right could ever have.

My hope is that courts will remain ever conscious of slippery slopes created by any one interpretation of the law and application of science. No one wins if we inappropriately dampen incentives for innovators to discover, apply and provide innovation to the benefit of humans.


Guest Post: Counting Defendants in Patent Litigation

PatentLawImage024Guest Post by Kyle Jensen of PIPRA.

I recently looked at some historical litigation trends and was surprised to learn that the number of patent lawsuits filed annually was roughly constant over the past decade. This year, of course, there are a large number of qui tam complaints being filed for false marking (largely by a small handful of plaintiffs); however, the number of infringement cases will not be dramatically different than 2009.

The relative constancy of litigation activity is a bit perplexing and certainly incongruent with the patent-system-gone-awry stories so commonplace in the popular media. I thought there was an "NPE problem" spinning out of control. I thought costs were spinning out of control. Well, they might be, but it's not reflected in increased lawsuit filings. I pulled back-data from PACER to produce the chart below, which shows the number of patent lawsuits and defendants in those lawsuits as a percentage of their levels in 1990.

There are some striking observations here. * The total number of patent litigations filed increased about 300% between 1990 and 2002, but has been nearly constant for the rest of this decade. (Many others have shown this previously. See, e.g. Shrestha, 2010) * The number of cases with more than one defendant followed a similar trend (data not shown). * The number of named defendants increased nearly 600% between 1990 and 2010.

In short, the number of cases filed per year is constant, but the number of defendants keeps growing.

I don't know why this is. The most obvious hypothesis is that it's driven by an increase in many-defendant filings by NPEs. That is, maximizing the ratio of defendants named to cases filed will 1) maximize potential revenue and 2) decrease costs for an NPE or contingency counsel. I can't think of many reasons that a practicing entity would behave similarly.

Numerous sources report that the number of NPE lawsuits is growing and now make comprise about 1/5th of all filings. For example, according to PatentFreedom, NPE lawsuits increased from less than 100 per year in 1998 to roughly 500 in 2009. (There were about 2,600 total cases that year). Also, Colleen Chien showed that in the IT sector NPE suits account for 1 in 6 cases. Given these statistics, it would be interesting to if those cases account for a disproportionate fraction of the named defendants. (This is somewhat more complicated to show.)

If the number of defendants is growing, costs are certainly growing as well. Assuming each case costs each defendant $1MM (many studies show it's higher), defendants would be spending an extra $400MM/yr on litigation each year.

Where's that money go? Certainly attorneys capture some of it. Below I've overlaid the number of attorneys assigned to patent litigations over the years. As you can see, the growth in attorneys outstrips both cases and defendants.

(All this data is available in PACER, so you can verify my numbers. Also the raw data are online. There are a few obvious caveats, e.g. I haven't removed cases in which multiple subsidiaries of the same company are named in the same suit. About me: I work for the Rockefeller-funded non-profit PIPRA where I teach scientists and entrepreneurs in developing economies about IP. I also own the website PriorSmart, which publishes a daily patent complaint alert. It's free, and includes PDFs of the pleadings. You can sign up here if you'd like to get it.)

Guest Post: Origins of the Clear and Convincing Standard

Guest Post by Professor Jeffrey Lefstin (U.C. Hastings)

Microsoft’s petition for certiorari in the i4i case challenges the Federal Circuit’s rule that patent invalidity must be proven by “clear and convincing evidence,” even when the defense rests on prior art not considered by the PTO. Nearly all of the briefs filed in the case, and nearly all academic commentary as well, assume that the rule was devised by the Federal Circuit early in its history. For example, one brief asserts that the “position of the Federal Circuit traces to dicta in a 1983 Federal Circuit panel decision [Connell v. Sears, Roebuck & Co.] that gave no reasoning and cited no authority whatsoever.”

The actual history of the rule challenged in i4i is rather different. The rule was not a creature of the Federal Circuit, but rather of its predecessor court, the Court of Customs and Patent Appeals. The CCPA held in Astra-Sjuco v. ITC, 629 F.2d 682 (CCPA 1980) that patents must be proven invalid by clear and convincing evidence. It had already held, in Solder Removal Co. v. ITC, 582 F.2d 628 (CCPA 1978), that the statutory presumption of validity is not weakened when a challenger introduces prior art not considered by the PTO.

In its first decision, South Corp. v. United States, 690 F.2d 1368 (Fed. Cir. 1982), the Federal Circuit adopted the CCPA’s case law as controlling precedent. The Federal Circuit’s early cases were quite clear: in holding that the presumption of validity was unaffected by prior art not before the PTO, the court was following the binding precedent of the CCPA, rather than creating a new rule of law.[1]

How did the CCPA, which ordinarily heard appeals from the PTO, come to create a rule governing patent litigation? Under the Trade Act of 1974, the International Trade Commission was given the power to bar importation of articles that would infringe U.S. patents. In its final years, the CCPA heard a handful of appeals – Astra-Sjuco and Solder Removal among them – from infringement complaints decided by the ITC.

It is probably not coincidental that the CCPA devised a patentee-friendly rule. For most of its history, the CCPA heard only appeals from the PTO. From this perspective it saw only the benefits of the patent system: inventors bringing their inventions to the PTO. Even in the ITC infringement cases, the CCPA saw only domestic patentees who might be injured by foreign competition.

In contrast, the regional Circuit Courts of Appeals, in their many years’ experience with infringement cases, routinely saw the costs of the patent system: infringers, perhaps even innocent infringers, who were nonetheless forced to pay heavy damages and abandon otherwise legitimate and productive activity. Given that perspective, it is not surprising that prior to 1982, several of the Circuit Courts of Appeals had held that the presumption of validity should be weakened when a challenger presents prior art not considered by the PTO. But intentionally or not, when the Federal Circuit adopted the CCPA’s precedent in South Corp., it instantly consigned any conflicting precedent from the Circuit Courts to the dustbin of history.

However, the precedent from the CCPA is not the end of the story. In South Corp., the Federal Circuit adopted not only the precedent of the CCPA, but also of its other predecessor court:  the United States Court of Claims. The Court of Claims heard patent infringement actions brought against the United States government under 28 U.S.C. § 1498, and the Federal Circuit has repeatedly held that the patent jurisprudence of the Court of Claims is binding upon it. (Most notably, the Federal Circuit maintained that the Court of Claims’ decision in Pitcairn v. United States compelled its narrow view of the experimental use defense in Roche, Embrex, and Madey.)

There was a long line of precedent from the Court of Claims holding unequivocally that the presumption of validity was weakened when a challenger introduced prior art not considered by the PTO: General Elec. Co. v. United States, 572 F2d 745, 761 (Ct. Cl. 1978); Douglas v. United States, 510 F.2d 364, 369 (Ct. Cl. 1975); Nossen v. United States, 416 F.2d 1362, 1371 (Ct. Cl. 1969); Ellicott Mach. Corp. v. United States, 405 F.2d 1385, 1392 (Ct. Cl. 1969); Martin-Marietta Corp. v. United States, 373 F.2d 972, 977 (Ct. Cl. 1967). As far as I can determine, the Federal Circuit has never taken note of these decisions. But under the Federal Circuit’s own case law, the line of authority descending from the Court of Claims is just as binding as that of the CCPA.

Note: Prof Lefstin discusses the how the CCPA’s unique perspective shaped the law it bequeathed to the Federal Circuit in a paper forthcoming in the Loyola of Los Angeles Law Review, available at

[1] See, e.g., D.L. Auld Co. v. Chroma Graphics Corp., 714 F.2d 1144, 1147 n.2 (Fed. Cir. 1983).

Guest Post: Open Season on Copyright Infringement Claims? All Hail, or Hate, the “Troll”?

By Robert W. Zelnick, McDermott Will & Emery LLP

Is it me, or has there been a noticeable uptick in publicity about copyright infringement claims in 2010? There is the prolific new so-called "copyright troll," Righthaven LLC, which has sued more than 120 parties on behalf of its sole newspaper client, the Las Vegas Journal-Review (including against some high-profile defendants, such as politician Sharron Angle). The Fox network has been defending against claims that it violated a plaintiff's copyright when it ran footage of Bernard Madoff, and now the Fox network (in an unrelated claim) is suing politician Robin Carnahan for alleged unauthorized use of Fox clip in a political ad. Some blame the poor economy, some blame the lawyers, some blame a heated election season. Maybe it is all of those reasons, or none of those. But at the end of the day, it doesn't appear that anything has really changed in the substantive copyright law.

Although the nuances of copyright law can be sometimes challenging to understand and interpret, at its heart copyright law stands for a relatively simple proposition – don't copy. The copyright laws are not an act of "judicial activism" to codify a common-sense grammar school lesson. Instead, these laws find their basis in the U.S. Constitution: Article I authorizes Congress to "Promote the progress of science and the useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries." Some of the comments in the blogosphere – including some rather nasty and ad hominem attacks against the "copyright troll of 2010" Righthaven LLC – seem to overlook that the easiest way to avoid copyright infringement claims is to avoid copying.

So, why all the angst related to enforcement of IP laws, now particularly centering on the concept of a copyright troll? In part, there are some of the same criticisms that have long been aimed at so-called "patent trolls": opportunistic lawyers, recoveries that are disproportionate to the "sweat of the brow" of the actual inventor/author, a drag on corporate profitability, etc. However, there are significant differences between a so-called patent troll and a so-called copyright troll.

First, the stakes and business model so far for the copyright cases seem to be quite different from the patent model. Righthaven's model, at least so far, has seemed to be a high-volume of cases that often individually settle in the range of a few thousand dollars.

Second, the policy issues are different. Revenue problems have cause newspapers to disappear at an alarming rate, and copyright revenue gives troubled businesses a new revenue stream from an existing asset. On the other hand, even those bloggers who infringe a copyright are usually creating knowledge, and there may be other counterconsiderations.

Third, some forms of clearinghouse model for copyright licensing/enforcement have existed for decades. For example, ASCAP, BMI, Copyright Clearance Center and others have generated revenue for themselves and for copyright owners by pursuing users of copyrighted works.

Fourth, it seems that courts may have a significant role in influencing policy when it comes to so-called "copyright trolls." For example, the courts have latitude in setting statutory damages in copyright cases within a wide range spanning $200 to $300,000; the exercise of that discretion can directly affect whether a so-called troll's business model will be profitable.

Most of all, though, parties being sued by Righthaven seem to feel a sort of "gotcha" moment. Sure, these defendants saw the copyright notices on the newspapers and websites whose content they allegedly copied, and they knew at some level that copying often has some element of "wrong" to it. But perhaps they figured that there was a safe harbor in doing what everyone else seemed to be doing. Compare the rumored – and often very dangerous – "rules of thumb" about things like the percent of content that can "safely" be copied, the supposed "free pass" that comes from a direct link to the original (copyrighted) article, the breadth of applicability of the fair use defense, and so on.

Perhaps the one aspect of the Righthaven model that many defendants feel most indignant about is that they were sued before receiving a cease-and-desist demand. As another example of the many disconnects between expectations and reality in IP enforcement, a demand letter is not a prerequisite to a complaint. There is no guaranteed "free bite at the apple" when it comes to infringement, and for good reason. Indeed, what would be the value of opinion counsel in the IP arena if the ultimate outcome were that liability only starts to accrue after a party elects to continue infringement after being actually warned of potential claims? Cease-and-desist demands have a place in certain infringement scenarios; however, they are sometimes a waste of time and money, and there is a strong deterrent to infringement when a defendant cannot escape liability for past acts simply by ceasing accused conduct when directly asked by the IP owner. Righthaven has apparently decided that such warning letters do not fit into its business model, which seems to be its prerogative.

The other major factor that contributes to the sense of "gotcha" is undeniably the role of the internet, email and related technologies. In short, acts of infringement can be publicized to the world at the speed of light, via a few keystrokes. Infringement over the internet is also much easier to identify, via increasingly-sophisticated searching and tracking technologies. It comes as no surprise that Righthaven reportedly uses a proprietary technology to identify suspected infringements before offering to buy the underlying copyrights from the copyright owner.

It will be interesting to see whether the Righthaven model, or some other models of so-called "copyright troll," will be sustainable. So far, to my knowledge, none of the 120+ Righthaven defendants has litigated what appear in some cases to be potentially valid "fair use" theories. Indeed, so far, Righthaven reportedly has been willing to settle individual cases for a few thousand dollars, which is far less than it would typically cost a defendant to secure copyright counsel and answer a federal complaint (both without any guarantee of success). I have heard rumblings that some defendants are pursuing discussions to form a defense coalition of sorts, to share costs and to combine expertise and effort. I will be curious to see how Righthaven handles serious defenses to the complaints, and whether pursuing active litigation fits Righthaven's business model.

In the meantime, the publicity surrounding this so-called "copyright troll" and the other high-profile copyright infringement claims of 2010 have served a useful purpose in reminding the public (and even non-copyright lawyers) about best practices regarding copyright law. Said differently, this is a very good time for clients to revisit their copyright practices. Maybe the economy and the election cycle have motivated more parties to enforce their copyrights, and maybe there could be a sustainable entrepreneurial enforcement model for a new kind of "troll," but the copyright law – as always – still prevents copying.

Guest Post: Keys to Hiring Newly-Minted Patent Lawyers

by Thomas G. Field, Jr., Professor, University of New Hampshire (UNH) School of Law (formerly Franklin Pierce Law Center)

There is much ado about generalist and specialty law school rankings, but it is difficult to understand why they should make much difference in hiring new, much less experienced, patent lawyers.

Technical training figures prominently too, but that is difficult to factor in. As has been discussed on this blog, two others and I published a paper concerning the correspondence between the percentage of attorneys with formal training in computer science (our focus) or engineering and the percentage of computer-based patents issued. There we argued, as I strongly believe, that the PTO’s discrimination against computer science graduates is irrational.

The paper also implies that one needs formal training in a particular art to competently draft and prosecute applications in that art. Most patent attorneys would reject the idea. Despite co-authorship, I do too.

I regard the most important technical criteria to be attorneys’ (or agents’) capacity to be educated by inventors and, as one of our alumni put it several years ago, function as a mediator between inventors and examiners. In that regard, I recall the late Robert Shaw. Prior to coming to Pierce in the mid-1970s, where he taught claim drafting and prosecution until he retired, Bob was a full-time attorney for MIT. It’s difficult to imagine that he could have had much expertise with regard to the wide range of applications drafted and prosecuted on behalf of an incredibly sophisticated faculty. Yet there is no reason to doubt the quality of his work for people there or at other universities. I do not envy those who attempt to judge such capacity from college transcripts and unrelated work experience.

Moving from technical to legal training, I regard the most important criteria to be the capacity to identify what decision makers will find critical, spot flaws in opponents’ positions and to argue effectively for their own. Regarding potential clerks, Justice Scalia famously stated, “I’m going to be picking from the law schools that . . . admit the best and the brightest, and they may not teach very well, but you can’t make a sow’s ear out of a silk purse. If they come in the best and the brightest, they’re probably going to leave the best and the brightest, O.K.?” (as quoted by Adam Liptak, On the Bench and Off, the Eminently Quotable Justice Scalia, N.Y. TIMES, May 12, 2009, at A13. If so, what’s gained from the education? There’s also risk of loss. I was struck by the observation that, “For most of the past fifty years, attending Harvard Law School was a miserable experience for the majority of its students.” Kevin K. Washburn, Elena Kagan and the Miracle at Harvard (2010). It is difficult to see how students would be better off for such an experience — unlikely to be unique.

General ranking may be useful for identifying some of the best and the brightest. But many choose schools based on a variety of other factors including cost, effects on partners, and quality of life. It would therefore seem that indicia of drive and intelligence other than that reflected in decisions of law school admissions committees deserve consideration.

In tough economic times, hiring seems more likely to turn on the skills and knowledge candidates have, rather than what they are capable of acquiring. If so, hires may be based on program rankings. But, as I have pointed out at length in Ranking Law Schools’ Special Programs, 50 IDEA 335 (2010), all rankings are suspect, whether based on the number and fame of faculty, the number of specialty courses offered or something else. In that article, at 344, I ultimately wonder whether “anyone other than a fool would favor one candidate over another based on reputations of professors neither candidate may have seen or lists of courses neither may have taken.” You might too.

Guest Post: Patent Abstracts Are Not The Answer To Repatriating Jobs

by Jeremy Kriegel of Marshall, Gerstein & Borun

In an effort to promote repatriation of jobs, H.R. 5980 was introduced on July 29, 2010. The Bill proposes replacing the 18-month publication of U.S. patent applications in their entirety with a requirement that the U.S. Patent & Trademark Office (USPTO) publish only the abstract of an application until it issues as a patent. This change would detrimentally impact the ability to monitor competitors’ pending applications (provided the full text of the applications were not otherwise still available via Public PAIR, an on-line resource provided by the USPTO that supplies free access to all patent documents exchanged between patent applicants and patent examiners upon publication of an application).

The proposed shift would potentially impact companies that have come to depend on access to published patent applications as a source of lawful competitive intelligence and freedom-to-practice planning.

With knowledge that only an application’s abstract will be made available to the public, it would likely just be a matter of time before applicants become more evasive in the drafting of patent abstracts. Even today, patent abstracts rarely provide meaningful detail as to the scope of the claims of a patent application, and are limited by USPTO regulations to 150 words or less. 37 CFR 1.72(b).

While a change to the statutory term of U.S. patents and a judicially-created “prosecution laches” defense eliminated most concerns over “submarine” patents (where an applicant would keep at least one of a chain of patent applications pending before springing an issued patent on an unsuspecting party or industry), limiting public access to only the abstract of a pending application would invite a return to such undersea tactics in patent prosecution.

To the extent publishing only the abstracts of patent applications has any potential to reduce the loss of American jobs, this protection is illusory in most situations. Many patent applications on products having significant commercial potential are filed not only in the United States, but also in foreign countries (and/or internationally under the Patent Cooperation Treaty). Most foreign countries already require publication of the entire patent application 18 months from the earliest priority filing date, so publishing only the abstract in the U.S. would merely invite interested third parties to search for foreign counterpart applications published in their entirety.

For applicants concerned about foreign competitors learning of the details of their inventions prior to issuance of their patents, U.S. patent law already provides an avenue even more secure than limiting publications of applications to abstracts as proposed in H.R. 5980. So long as an applicant agrees at the time of filing a U.S. application to forego foreign patent filings in countries that publish applications 18 months after filing, the application may include a request for non-publication. The USPTO will then maintain the entire application in secrecy until the application issues as a patent. The option of foregoing foreign filings in exchange for non-publication of a U.S. patent application was proposed to assuage concerns over the disparate impact pre-grant U.S. publication might have on small businesses. This was known as the Kaptur Amendment and was initially limited to “small entities” (i.e., entities with fewer than 500 employees, universities and independent inventors), but the small entity requirement was ultimately removed.

Alternatively, 35 U.S.C. Section 154(d) provides provisional rights to obtain a reasonable royalty for infringement occurring prior to the issuance of a patent, beginning as early as the date of publication of the application. Recovery of pre-issuance royalties requires the infringed claims ultimately issuing in a patent to be substantially identical to claims of the published application and requires actual notice to the infringer of the published patent application. If claims are substantially amended during prosecution, an applicant may, for a fee, electronically request republication of the application with the amended claims. H.R. 5980 would limit provisional rights to claims of published PCT applications that later mature into U.S. patents. Ironically, this disparity would favor foreign applicants of US patents (who typically file PCT applications prior to filing a US national phase application) over US inventors who opt not to file a PCT application. Foreign patentees in some situations would effectively have a longer term to collect patent damages than their US counterparts.

Another problem with the “Patent Protection” proposal of H.R. 5980 is that it runs contrary to commitments the United States made to Japan under the U.S.-Japan Letters of Agreement signed August 16, 1994 by then-Commerce Secretary Richard H. Brown and Japanese Ambassador Takakazu Kurizama. In exchange for U.S. commitments to publish applications 18 months after filing, expand the grounds for requesting patent reexamination, and permit increased third party participation in reexaminations, Japan agreed to eliminate dependent patent compulsory licenses, end third party pre-grant oppositions, and offer an accelerated examination procedure. It took five years for mandatory publication of applications to become law with passage of the American Inventors Protection Act of 1999.

Though mandatory publication of U.S. patent applications is barely a decade old, H.R. 5980’s bid to substitute abstracts for full publication of U.S. applications would return a cloak of secrecy to some U.S. patent applications. However, for patent applications also filed abroad, the reality is that corresponding applications filed in other countries would still be published in their entirety. Given the ubiquitous access to published foreign patent applications made possible by the Internet, publishing only patent abstracts in the U.S. would not provide a meaningful obstacle to foreign companies seeking to capitalize on U.S. ingenuity.

Jeremy R. Kriegel is a partner at Marshall, Gerstein & Borun LLP in Chicago. This article expresses the views of the author, and does not necessarily reflect the views of Marshall, Gerstein & Borun or its clients.

Guest Post: The Great Haste and Less Milling of Beer v. United States


Guest Post: The Great Haste and Less Milling of Beer v. United States (Fed. Cir. 2010, cert. pet. pending)

By Andrew Dhuey

When patent litigators hear the term “rocket docket”, they usually think of the U.S. District Court for the Eastern District of Virginia, long-known for its dedication to accelerated justice. The term doesn’t usually call to mind the U.S. Court of Appeals for the Federal Circuit, though its docketing-to-disposition time has averaged a reasonable 9-10 months. The recent case of Beer v. United States, however, shows that it is possible to have the Federal Circuit decide your appeal on the merits and rule on your en banc hearing petition in a mere 85 days, docketing to disposition.

Beer concerns a newsworthy issue dear to the hearts of federal judges: their pay. Eight current and former federal judges seek to recover cost-of-living adjustments Congress promised federal judges in 1989, but failed to deliver in 1995-97, 1999 and 2007. While the Beer parties disagreed on whether this deprivation of COLAs was an unconstitutional diminishing of judicial pay, they all agreed that the Federal Circuit rejected this exact position in Williams v. United States (Fed. Cir. 2001). In 2002, the Supreme Court denied cert. in Williams over the dissent of Justice Breyer, joined by Justices Scalia and Kennedy.

With the issue resolved in Williams, why did these federal judges raise the same pay issue again in a 2009 U.S. Court of Federal Claims case? The answer rests not with any changes in the law, but instead with changes in the makeup of the Supreme Court. All four justices who joined the court since 2002 (Chief Justice Roberts and Justices Alito, Sotomayor and Kagan) replaced justices who voted to deny cert. in Williams. Assuming the Beer judges still have the three Williams dissenters on their side, they can win on the merits with two of the four newest justices.  

Of course, before they could even file their cert. petition, the Beer judges needed to work their way through the Claims and Federal Circuit courts. To expedite that process, the judges conceded that both the Claims court and the Federal Circuit panel were bound to follow Williams. Their purpose was to overturn Williams, which could only be done by the Federal Circuit sitting en banc, or by the Supreme Court.

On Nov. 3, 2009, thirteen days after filing their notice of appeal at the Federal Circuit, the Beer appellants filed a Petition for Initial Hearing En Banc or, in the Alternative, Motion for Summary Affirmance. Alas, the clerk’s office rejected this filing since the appellants included a copy of their trial court complaint, and that apparently is not okay. [Side note to Judge Beer, et al: none of your court clerks can hold a candle to Federal Circuit clerks when it comes to finding a way to reject a filing]. Appellants’ counsel, Christopher Landau of Kirkland & Ellis, resolved this problem the following day, and the case was then before all 12 active Federal Circuit Judges.

On Jan. 15, 2010, the court denied the petition for initial hearing en banc over the dissent of then-Chief Judge Michel, joined by Judges Lourie and Moore, and the separate dissent of Judge Newman. With that denial of the en banc petition, a three-judge panel granted the Beer appellants’ motion for summary affirmance, with a concurrence by Judge Mayer, who reiterated his previous view that Williams was wrongly decided, but that “neither Congress nor the Supreme Court has done anything in the interim that would warrant this court taking the matter up again.” The Federal Circuit had thus resolved Beer on the merits, en banc, only 85 days after docketing.  

So what, you ask? How could this possibly be of interest to you, a patent litigator? Well, you have a point – you probably won’t have occasion to stipulate at the district court or the BPIA, and on appeal, that your client is toast due to applicable, binding Federal Circuit case law. But some patent litigants are out to make a big, precedential splash (e.g. ,the ACLU in its challenges to the BRCA gene patents). Perhaps in some of these “big picture” cases, a litigant has no realistic hope on the merits, absent the overruling of a Federal Circuit panel decision. [This was not the case for the ACLU, which actually won at the district court].  Or perhaps obliterating a binding precedent would be so valuable to a litigant (e.g., a “frequent defendant”) that it would be willing to concede away weak but non-frivolous arguments on the merits in order to directly attack the harmful precedent, post haste.

Maybe you’ll never have a Beer, but in the right, highly-exceptional patent case, you might want to use the Beer strategy.

Andrew Dhuey is an appellate lawyer last seen being chased by a flower-carrying guy in a dress.