Already v. Nike (Supreme Court 2013)
Held: “This case is moot.”
USPTO Grant Rate: 2013 Forecast
by Dennis Crouch
Only two weeks into 2013, the USPTO continues to issue patents at a record pace. New patents are issued each Tuesday morning. On January 8, 2013 the PTO issued 5,633 utility patents – the most ever issued on a single day. The prior two weeks rank second and third on the all-time list. Thus, although we are only two-weeks into the new year, if current projections hold the PTO will issue more than 290,000 patents in 2013. That represents a major jump from 2012’s record of 253,000 issued patents.
Two things are happening to cause this change: (1) the PTO now grants a greater percentage of patents than it did a few years ago – that percentage has continued to rise throughout the past two years; and (2) the PTO has a greater number of disposals – primarily because of the agency’s hiring binge. In 2012, the first of these contributed more to the increased number of grants. I expect that in 2013 the increased throughput will have the greater impact as new examiners get up-to-speed.
The strength of this forecast will largely depend upon whether the Agency continues on the same path after Director Kappos steps-down later this month. Deputy Director Rea is unlikely to move away from this course and may well push for more efficiency during her expected tenure as Acting Director. However, the new appointee (yet unnamed) may be a different story. A second major factor that could negatively impact the grant rate is another budget crisis that would limit the ability of the USPTO to pay examiners for overtime work.
How [Not] to Fight PTAB Obviousness Decisions
By Dennis Crouch
In re Chevalier (Fed. Cir. 2013) (nonprecedential) (Patent Application Ser. No. 11/407,778)
In a non-precedential but instructive opinion, the Federal Circuit has affirmed the USPTO's obviousness rejection of L'Air Liquide's application covering devices used to form gas-liquid dispersions. The Board rejected claim 1 as obvious, over a combination two prior art references – finding that it "would have been obvious to one skilled in the art to modify the Kwak device in view of the teachings of Howk."
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The difficulty with appealing PTAB decisions is that conclusions of fact made by the USPTO's appellate board are reviewed for substantial evidence. In order to win an appeal on a factual question, the patent applicant must go quite a bit further than simply proving that the PTAB's decision was wrong. Rather, the PTAB decision will only be overturned if not based on "more than a mere scintilla" of evidence. Restated, the question is whether the factual conclusion is based upon "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." "[T]he possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Consolo v. Fed. Mar. Comm'n, 383 U.S. 607 (1966).
This case represent the most frequent form of PTAB decision – that the applied-for patent claim is unpatentable as obvious over a combination of references. The ultimate question of obviousness is a question of law (reviewed de novo on appeal). However, that ultimate conclusion is based upon a set of factual underpinnings as explained by Graham v. Deere. The Federal Circuit has also held that "[t]he presence or absence of a motivation to combine references in an obviousness determination is a pure question of fact." In re Gartside, 203 F.3d 1305 (Fed. Cir. 2000).
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Chevalier challenged the combination of references – arguing that the combination of Kwak and Howk would be inoperable. Apparently Chevalier took the drawings from Kwak and Howk and unsuccessfully tried to jam them together. The Federal Circuit saw that process as "misapprehend[ing] the nature of the obviousness inquiry."
The obviousness inquiry does not ask "whether the references could be physically combined but whether the claimed inventions are rendered obvious by the teachings of the prior art as a whole." In re Etter, 756 F.2d 852 (Fed. Cir. 1985) (en banc); see also In re Keller, 642 F.2d 413 (CCPA 1981) (stating "[t]he test for obviousness is not whether the features of a secondary reference may be bodily incorporated into the structure of the primary reference"). Rather, in a case such as this where each of the elements of the claim are known to the art, the obviousness inquiry requires a finding that the combination of known elements was obvious to a person with ordinary skill in the art.
Here, each of the elements of the claim is taught by Kwak with the exception that the Kwak deflector is not attached to the drive shaft. This deficiency in Kwak is supplemented by Howk, which teaches a deflector attached to the drive shaft. The examiner found, and the Board affirmed, that one of ordinary skill would be motivated to modify Kwak in view of Howk because the modification "would facilitate a more rapid and more complete conversion from axial flow to radial flow of the liquid exiting from the bottom of the device." Ex Parte Gilbert Chevalier, 2011 WL 6747404 (B.P.A.I. Dec. 21, 2011). Chevalier does not challenge this finding. Accordingly, we find no error in the Board's determination that Kwak and Howk could be combined to achieve the claimed invention, nor do we find any error in the Board's determination that one of ordinary skill would be motivated to combine these references to achieve an aeration device that more rapidly and more completely converts axial flow to radial flow in the gas-liquid mixture.
The appellate panel then moved to KSR v. Teleflex to bolster its decision:
Our conclusion is strengthened by Chevalier's admission that the deflectors of Kwak and Howk are "recognized equivalents performing the same function of converting axial flow to radial flow." Appellant's Br. 9. The Supreme Court stated in KSR that "when a patent claims a structure already known in the prior art that is altered by the mere substitution of one element for another known in the field, the combination must do more than yield a predictable result." KSR. Here, the claimed invention merely substitutes the deflector of Howk, which is attached to the drive shaft, for the deflector of Kwak, which is attached to the floor of the basin. This substitution achieved only the predictable result of converting the axial flow of the gas-liquid mixture to radial flow.
Rejection affirmed
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The problem with the appeal here is that the appellate arguments are essentially a repeat of the lawyerly discussion of facts made to the examiner and PTAB. When those do not work at the PTO, they are highly unlikely to work on appeal to the Federal Circuit. (No factual affidavits were submitted in the case at the PTO). If Air Liquide had wanted to win the case, they would have been better served to hire expert witnesses to provide testimony either as affidavits to the PTAB or else bring forth that evidence in a civil action. Of course, that approach is likely more expensive and raises a greater potential of inequitable conduct charges down the line – especially in cases like these where other members of the patent family have already issued.
Zumbiel v. Kappos
By Jason Rantanen
The C.W. Zumbiel Company, Inc. v. Kappos (Fed. Cir. 2012) Download 11-1332
Panel: Prost (dissenting-in-part), Moore, Wallach (author)
Prior to KSR v. Teleflex, the Federal Circuit granted significant deference to the PTO on obviousness determinations; following KSR, that deference has only increased. Zumbiel v. Kappos represents possibly one of the more extreme examples of that deference. This appeal is unusual, however, in that it involves substantial deference to the BPAI/PTAB's finding that a claim is nonobvious, deference that is (in the dissent's view) contrary to other aspects of the Court's holding in KSR.
Graphic Packaging International is the assignee of Patent No. 6,715,639, which is directed to a carton or box that holds containers such as cans and bottles. Zumbiel filed for an inter partes reexamination of the '639 patent, arguing that the claims were obvious in light of various prior art references. The BPAI (now the PTAB) determined that some of the claims were obvious (including claim 1) and some were nonobvious (including claim 2). Both parties appealed the adverse determinations.
Representative Claim 1:
1. An enclosed carton for carrying a plurality of containers in two rows, with a top row and a bottom row, said containers each having a diameter, the carton comprising:
a. a top panel, side panels, a bottom panel, and closed ends, at least one of which is an exiting end;
b. a dispenser which is detachable from the carton to form an opening at an exiting end through which the containers may be removed;
c. the dispenser being a unitary structure comprising a portion of the top panel, portions of the side panels, and a portion of the exiting end, said portions being defined by a tear line extending across the top panel, side panels, and exiting end;
d. means for preventing the end container in the bottom row from accidentally rolling out of the carton after the dispenser has been opened, the height of the means above the bottom panel being less than the diameter of said end container; and
e. a finger flap located along the portion of the tear line extending across the top panel for pulling the dispenser open along the tear line,
f. whereby when the dispenser is opened it may optionally remain attached to the carton
at the exiting end to form a basket at the exiting end of the carton.
Representative Dependent Claim 2:
2. The carton of claim 1, in which the finger flap is located between the first and second containers in the top row.
Prior Art Reference 1 (Ellis):
Prior Art Reference 2 (German '718) (note that there were two additional prior art references):
The Federal Circuit began by affirming the PTAB's determination that representative claims 1 and 13 were obvious. Among other issues, the court employed a "predictable variations" approach to conclude that a claimed limitation would be met. German argued that the prior art did not teach the claimed location of the finger flap; the court, however, agreed with the Board that "providing the finger opening on the top wall of the carton would be a predictable variation that enhances user convenience…and is within the skill of a person of ordinary skill in the art." Slip Op. at 15.
The court next turned to Zumbiel's appeal of the PTAB determination that representative claim 2 was nonobvious. The sole additional limitation added by claim 2 is that "the finger flap is located between the first and second containers in the top row." Thus, "the dispute lies in whether the location of the finger flap between the first and second cans is obvious in light of the prior art." Slip Op. at 20. Applying a substantial evidence standard, the majority affirmed the Board's determination that (1) a third prior art reference did not provide the necessary teaching for moving the tear line and (2) "there was little incentive to relocate Ellis's finger flap to a position between cans in order to provide space for the fingers." Slip Op. at 22. Based on these findings, the majority held that claim 2 was nonobvious.
Judge Prost's Dissent: In a plain language dissent, Judge Prost strongly disagreed with the majority's determination of nonobvious:
"Failing to apply KSR to the facts of this case, the Board has concluded that the invention recited in claim 2 is non-obvious. Because I believe that a common sense application of the obviousness doctrine should filter out low quality patents such as this one, I cannot join the majority in endorsing the Board’s incorrect approach on this question. Thus, with respect, I dissent."
…
[L]et’s be clear what claim 2 is about. The claimed invention takes the opening from Ellis, takes the stacked can configuration from another box, and puts them together. The result is—as one would expect—a box that has the known benefits of Ellis’s opening and the known benefits of a stacked can configuration.
Why is this assembly non-obvious? Because, the Board explains, the patentee has solved a difficult implementation problem, the solution to which was supposedly not obvious to box makers who lacked extraordinary skill. The secret lies in the proper positioning of the tear line. That is, according to the Board, ordinary box makers would not have put the tear line between the first two cans in the top row.
Where else could have they put it? There are just four other options: (1) above the first can, (2) above the second can, (3) in front of the first can, (4) behind the second can. The first two alternatives are just offensive to common sense: With the cans right below, there would be no room to push the flap through (the flap is positioned at the center of the tear line). The third and fourth options are not quite as illogical, but even without expertise in box making, one may intuit that they make awkward designs (the third opens too little, the fourth too much).
More importantly, however, whether some of the alternatives would work just as well or not, the patentee’s choice of tear-line-placement involves no more than the exercise of common sense in selecting one out of a finite—indeed very small—number of options. And there are no unexpected results[.]
The point here is not that the Board got the facts wrong. The point is that contrary to the Supreme Court’s instructions, an “overemphasis on the importance of [teachings of prior art]” has insulated the Board’s analysis from pragmatic and common sense considerations that are so essential to the obviousness inquiry. KSR, 550 U.S. at 419. The Board’s approach relegates one of ordinary skill to an automaton. Should this approach become commonplace, it would lower the obviousness bar and
hence hinder competition and innovation. That is why, unlike the majority, I do not see any room for deference to the Board’s determination in this case.
Does License of Future Inventions Invoke Patent Law Based Court Jurisdiction?
By Dennis Crouch
National Pasteurized Eggs v. Davidson (Fed. Cir. 2012)
In yet another patent contract dispute, the Federal Circuit has transferred appellate jurisdiction back to the regional circuit. Here, it appears that the mistake was due to an error by the district court clerk who thought of the case as a patent case.
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National Pasteurized Eggs (NPE) filed the case in 2007 asking the New Hampshire district court to quiet title in several US and foreign patents. From the complaint:
By this action, NPE seeks a declaratory judgment of rightful ownership of three United States patents and two international patent applications and resulting foreign patents, as specified below.
The patents at issue all list Mr. Leon J. Davidson (LJD) as the inventor and involve methods of pasteurizing in-shell chicken eggs and treating eggs with anti-bacterial agents. See U.S. Patent No. 6,322,833.
Davidson founded the Pasteurized Egg Corporation (PEC). When he left the company in 2000, he signed an assignment and further cooperation agreement. [Appendix to Complaint] PEC went bankrupt in 2003 and its intellectual property assets were purchased by National Pasteurized Eggs (NPE) who is looking to ensure all of the Davidson patents are assigned to the company. (Note – the Davidson's brand shown to the right is also owned by PEC).
In considering what rights Mr. Davidson retains, the agreement uses the term "inventiveness." The agreement states:
New processes or intellectual property ("inventiveness") developed prior to January 1, 2001 ("Old Inventiveness"), including a method for extending the shelf life of pasteurized eggs by treatment with antibacterial agents, shall be the property of PEC and LJD shall take such actions as may be reasonably required by PEC to assist PEC to complete the development, improvement, documentation, protection and patenting of such Old Inventiveness.
Inventiveness developed by LJD, whether in combination with "Old Inventiveness" or prior inventiveness, which results in protection from new patents or patent applications providing broader or improved protection, on or subsequent to January 1, 2001 ("New Inventiveness") shall be considered the property of LJD.
It is this poorly written agreement that has led to the legal conflict.
Davidson filed a number of patent applications following the 2001 agreement and argued that those applications involved new inventiveness. In its ruling, the district court sided with NPE – holding that the inventiveness associated with the primary disputed patent occurred prior to the 2001 date since testing had already begun on the new process. Download Davidsonfinaljudgment. It is this decision being appealed.
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After losing at the district court, Davidson filed a Notice of Appeal to the First Circuit. However, the district court clerk sent the docket and certificate to the Federal Circuit. On unopposed motion, the Federal Circuit has now transferred the case to the First Circuit.
In its order, the Federal Circuit suggested, but did not decide, that the First Circuit is the proper site of appellate jurisdiction. In this case, however, the transfer was required because the Fed. R. App. P. 3(d)(1) does not allow a district court clerk to unilaterally change the appellate court.
Fed. R. App. P. 3(d)(1) states that the clerk of the district court "must promptly send a copy of the notice of appeal and of the docket entries .,. to the clerk of the court of appeals named in the notice."
Because of the mandatory language of Rule 3(d)(1), we believe we must transfer this appeal to the First Circuit, i.e., the clerk of the district court was required to send the notice of appeal to that court. Although we do not address jurisdiction, the case appears to involve ownership of patents rights and contract interpretation. See Luckett v. Delpark, Inc., 270 U.S. 496 (1926).
The appeal will now be heard by the Court of Appeals for the First Circuit.
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There is some chance that the Federal Circuit will see the case again – depending upon whether the First Circuit sees a substantial question of patent law buried in whether Davidson's new patents include some "inventiveness developed by LJD . . . subsequent to January 1, 2001."
Judge Bryson Assumes Senior Status
Today, Judge William C. Bryson of the United States Court of Appeals for the Federal Circuit assumed senior status. Judge Bryson joined the court in 1994. A true career civil servant, his experience prior to joining the bench was extraordinary: he served as a law clerk to both Judge Friendly of the Second Circuit and Justice Thurgood Marshall, and spent seventeen years at the Department of Justice (including two stints as Acting Solicitor General) prior to his appointment to the Federal Circuit. His work ethic, keen intelligence, and sense of fairness are legendary on the court.
One short story of my own: A few hours after interviewing with Judge Bryson, I was ecstatic to receive a phone call from the judge offering me a position in his chambers. But Judge Bryson made the offer with a condition: he required me to wait at least a week before I could accept the offer, so that I could really think about the offer and weigh any offers from other judges. In today's day of hour-long exploding clerkship offers, Judge Bryson's practice really stands out in sharp contrast (admittedly, I don't know whether he still follows this rule). Of course, I accepted the offer as soon as I was permitted to!
In celebration of Judge Bryson's service on the Federal Circuit, I reached out to several of his other former clerks for their thoughts on the judge. There were far more than I could possible include here, but the comments below are representative:
- "The best thing I learned working for Judge Bryson is not to be so enamored of the easy parts of your case that you lose sight of the hard parts. Work to find the hardest question that a judge or an opponent might put to your case. If you can’t figure that out, you don’t know your case well enough. Then work to find the best answer to that hard question. If you don’t have a good answer, you are not doing everything that you can to win. Surprisingly, many attorneys arguing at the Court seemed shocked to be challenged or have their arguments tested."
- "I have had many senior partners, clients, superiors, etc. tell me over the years that they want my unvarnished views and don’t want “yes men” to just nod along. Judge Bryson embodied the rare person who really meant that when he said it."
- "Judge Bryson was assigned the standard floor space in the Markey courthouse — three bay windows' worth — and was allowed to configure his chambers as he saw fit. He took none of the windows for his own office. Instead, he sat in a windowless room and used the bay windows for a library and conference room open for use by (and frequently used by) all of chambers staff. This unusual and perhaps unique arrangement speaks volumes to Judge Bryson's humility, collegiality, and work ethic." (This specific recollection was shared by many of Judge Bryson's former clerks).
- "Probably every person that argues in front of Judge Bryson lives in respect of his hypotheticals. He has a good knack for boiling down the essential point of a case into a hypothetical question or statement. As a clerk, the amusing aspect of the hypotheticals was that many attorneys could not decide whether they should agree, or disagree, with his hypothetical. The deer-in-the-headlights look from these attorneys was priceless."
- "If you have a good substantive case, you want Judge Bryson on your panel. If you don’t have a good substantive case, you don’t want to see him show up on your panel."
- "At the end of our clerkship during a recruiting dinner, I had a very senior figure at one of the top patent firms (you’d know his name immediately) say to me “You know… some people would say that Judge Bryson is the smartest judge on the bench.” I’ve had this statement repeated to me many times by members of the Fed Cir bar over the last 11 years."
- "When I brought my kids into chambers, I was worried about them overstaying their welcome and bothering Judge Bryson. To the contrary, I think that if Judge Bryson had had his way, he would have spent the whole afternoon looking up countries on the globe and drawing on the white board with them."
- "I think of Judge Bryson as extraordinarily dedicated to reaching the correct decision in any appeal. For patent cases, I remember that he would always spend a great deal of time attempting to understand the underlying technologies. One time, I saw him studying briefs while he was waiting for the Metro at McPherson Square."
- "During the clerkship, I was endlessly impressed by how Judge Bryson was always able easily to pierce through a complicated record to identify what was central to the disposition of a case — and how he worked through all issues with such integrity. Various former clerks of Judge Friendly (the Second Circuit titan for whom Judge Bryson had also clerked) have often spoken about how their judge didn't really need any law clerks, because his knowledge of the law was just so encyclopedic, and because he was so efficient and self-sufficient; I feel the same way about Judge Bryson. And on top of it all, he is a true and kind mentor. Those of us who have had the privilege of clerking for Judge are truly lucky."
- "Judge Bryson's questions at argument could be difficult to deal with, even for seasoned attorneys. In one example, an attorney attempted to sidestep one of Judge Bryson's questions (or at least buy himself time), arguing that "I'm from Texas, I think slow and I talk slow." Judge Bryson was not so easily brushed aside, responding something like, "I'm from Texas too, but I would like you to answer my question.""
- "Judge Bryson is easily the smartest lawyer I've ever known, and yet also one of the most unassuming people I've ever known. I recently read a biography of Judge Bryson's former boss Judge Friendly. I frequently recalled my year as a clerk for Judge Bryson as I read about Judge Friendly's intellect, work habits, non-ideological approach to judging, and how his clerks apparently had to work hard to come up with things that the judge hadn't already figured out on his own. Much like Judge Friendly was, though, Judge Bryson is not the least bit pretentious or taken with his own intellect — despite having infinitely more skill and experience than his clerks, Judge Bryson treated his clerks as colleagues and was always open to hearing their ideas. I can think of no better way to have started my legal career than the year I spent as a clerk for Judge Bryson."
As a senior judge, Judge Bryson will continue to sit regularly on the court, although with a reduced docket. We can hope that he will do so for many years!
Carani on Design Patent Infringement
Christopher Carani is one of the leading design patent practitioners in the US. His recent ManagingIP article highlights the design patent elements of Apple v. Samsung and other famous design patent cases in order to tease out some methodology for knowing which design patents are likely to be infringed. The four-page article offers a concise design patent infringement primer.
Carani writes:
Indeed, even if well-versed in design patent jurisprudence, one of the most difficult questions an intellectual property practitioner can be asked is whether a given product infringes a design patent. Like it or not, there is an inherent subjective component to the design patent infringement analysis that is often unnerving to seasoned pros and novices alike.
One of the few guiding lights to aid practitioners through these murky waters is a firm grasp of the patented and accused designs implicated in, and the holdings of, past decisions. It is only through this type of empirical study and ocular inspection that one can get a feel for the central question of "how close is too close" for design patent infringement. To that end, set forth below is a visual comparison of exemplary cases where there were findings of infringement, and in others non-infringement.
I've posted the article (with permission) here: Download Carani.apple .
Federal Circuit Refuses to Hear Contract Dispute over Patent Assignment and Royalty Contract
By Dennis Crouch
DeRosa v. J.P. Walsh & J.L. Marmo Enterprises (Marmo) (Fed. Cir. 2013) (nonprecedential)
In the face of Supreme Court scrutiny over its jurisdictional power, the Federal Circuit has taken a step back from its historic approach of expanding patent law jurisdictional reach.
DeRosa is the inventor of a cam-less chuck for use in a router. These have been available for some time with ordinary drills, but the large size and high rotation speed made the same type of assembly more difficult for a router. DeRosa’s provisional patent application was filed back in November 1998 and, at the same time, DeRosa assigned his rights in the invention and “further improvements” to Marmo in return for a promise that a promise that Marmo would manufacture and sell the device and that DeRosa would receive royalties on those sales.
In 2010, DeRosa sued Marmo in Virginia state court – alleging that the company had failed to live up to its continued contractual obligations to manufacture and sell the device. In the lawsuit, Marmo asked for both contract damages and a reversion of ownership rights in the patent. The case was first removed to Federal Court on diversity grounds and then removed to an arbitrator based upon the contract terms. The arbitrator found for DeRosa on breach of contract but held that Marmo was still the proper patent owner. That decision was confirmed by the E.D. Virginia District Court in an April 6, 2012 order.
On appeal, the Federal Circuit has refused to decide the case – holding that it lacks jurisdiction and that the proper venue is the Court of Appeals for the Fourth Circuit. The reason here is that the complaint did not raise any substantial questions of patent law but rather simply focused on the contract. Judge Bryson writes:
Causes of action based on contractual rights in a patent assignment or license agreement as a general rule do not arise under the patent laws. See Luckett v. Delpark, Inc., 270 U.S. 496, 502-03 (1926); New Marshall Engine Co. v. Marshall Engine Co., 223 U.S. 473 (1912). Marmo nonetheless argues that the appeal is properly before this court because the complaint specifically requests a restoration of ownership in patent rights.
That DeRosa’s complaint ultimately sought to restore ownership in the invention is of no great significance. The focus of the jurisdictional inquiry is whether the plaintiff “set up some right, title or interest under patent laws, or at least makes it appear that some right or privilege will be defeated by one construction, or sustained by the opposite construction of these laws.” Christianson v. Colt Industries Operating Corp., 486 U.S. 800, 807-08 (1988).
The complaint in this case did not turn on such a claim. The alleged harm stated was Marmo’s failure to abide by its “contractual and financial obligations under the contract” resulting in DeRosa not having received the “bargained for benefit” of “a steady flow of manufacturing business and the timely payment for the product.” Although a restoration of patent ownership is sought in the complaint, such relief is entirely premised on the claim that Marmo’s failure to fulfill its obligations under the contract warrants a remedy of rescission. As such, this case does not arise under the patent laws, and we do not have jurisdiction.
In Jim Arnold Corp. v. Hydrotech Systems, Inc., 109 F.3d 1567 (Fed. Cir. 1997), a case very similar to this one, this court held that a plaintiff seeking rescission of a patent assignment agreement in order to restore ownership rights in a patent could not meet the jurisdictional test set forth in Christianson. As in the present case, the plaintiff in Jim Arnold had no rights in the patent without judicial intervention and was thus left only to argue that ownership of the patents should be restored based upon a breach of contract claim. Because a plaintiff under such circumstances could at best only present a frivolous allegation of ownership of the patents at issue sufficient to confer jurisdiction under section 1338, we transferred the case to the regional circuit. Since the same outcome is warranted here, pursuant to 28 U.S.C. § 1631, we transfer the case to the Fourth Circuit.
The court ignored Marmo’s most compelling argument – that the action was implicitly a move by DeRosa to quiet title in his further improvements that he later patented and now manufactures through another source. Marmo argued that mapping the contracted-for improvements to the various patents necessarily requires a substantial consideration of patent law issues. The case will now move to the Fourth Circuit to see whether the arbitration award was properly confirmed.
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Minton v. Gunn: This term, the Supreme Court is considering Minton v. Gunn, a patent litigation malpractice case. Legal malpractice is ordinarily a state law claim. Here, however, the court is considering whether the malpractice action arises under the U.S. patent laws in such a way that would confer both federal jurisdiction at the district court level and Federal Circuit jurisdiction on appeal.
America Invents Act: The Leahy–Smith America Invents Act (AIA) expanded the scope of federal jurisdiction to include cases whose only substantial patent claim is filed in a compulsory counterclaim. See 28 U.S.C. § 1295(a)(1) as amended. However, that change in the statute does not impact this case because it only applies to civil actions commenced on or after September 16, 2011.
Notice of Arbitration Awards: 35 U.S.C. § 294(d) requires that a notice of arbitration award be filed with the USPTO. Under the statute, “[w]hen an award is made by an arbitrator, the patentee, his assignee or licensee shall give notice thereof in writing to the Director.” The submission is required to include a number of details as well as “a copy of the award” itself. Under the law, that award becomes a public record and part of the patent file. As a kicker, law states that “[t]he award shall be unenforceable until the notice required by subsection (d) is received by the Director.”
In this case, the notice of award was probably not required because the statute further limits its focus to arbitration of validity or infringement issues. Here, the dispute was over contract terms and ownership.
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Bits & Bytes
- Canadian IP Specialist Barry Sookman has written an analysis of the world’s “most popular intellectual property and technology law blogs” on his eponymous blog: http://www.barrysookman.com/.
- 23 Killer Business Lessons from Shark Tank: http://www.bradaronson.com/shark-tank/
- The FTC has released Google from its antitrust investigation with a “wrist slap.” More from Wired; WashingtonPost; and WSJ. Regarding its industry-standard patents (largely inhereted from Motorola), Google promised again to license those patents in a manner that complies with its FRAND promise of “fair, reasonable and non-discrimantory” terms. Google also promised to commit to binding arbitration of license rates.
Bits & Bytes
- Canadian IP Specialist Barry Sookman has written an analysis of the world’s “most popular intellectual property and technology law blogs” on his eponymous blog: http://www.barrysookman.com/.
- 23 Killer Business Lessons from Shark Tank: http://www.bradaronson.com/shark-tank/
- The FTC has released Google from its antitrust investigation with a “wrist slap.” More from Wired; WashingtonPost; and WSJ. Regarding its industry-standard patents (largely inhereted from Motorola), Google promised again to license those patents in a manner that complies with its FRAND promise of “fair, reasonable and non-discrimantory” terms. Google also promised to commit to binding arbitration of license rates.
Bits & Bytes
- Canadian IP Specialist Barry Sookman has written an analysis of the world’s “most popular intellectual property and technology law blogs” on his eponymous blog: http://www.barrysookman.com/.
- 23 Killer Business Lessons from Shark Tank: http://www.bradaronson.com/shark-tank/
- The FTC has released Google from its antitrust investigation with a “wrist slap.” More from Wired; WashingtonPost; and WSJ. Regarding its industry-standard patents (largely inhereted from Motorola), Google promised again to license those patents in a manner that complies with its FRAND promise of “fair, reasonable and non-discrimantory” terms. Google also promised to commit to binding arbitration of license rates.
Federal Circuit Judicial Nomination Watch
By Dennis Crouch
Failure to Confirm: We all still remember Paul Michel as Chief Judge of the Federal Circuit, but it wasn't yesterday that he stepped down. Rather, we are nearing the three anniversary of his 2010 retirement (as a Federal Judge). In 2010, President Obama nominated Edward DuMont to replace Judge Michel. However, DuMont's nomination floundered. In 2011, President Obama nominated Richard Taranto for the post. However, the Senate has now failed to confirm Taranto's nomination. I expect that President Obama will re-nominate Taranto this month – giving the Senate another two years to consider filling the slot. No Senator has voiced any opposition to Taranto's nomination.
Two additional Openings: President Obama has not yet nominated a replacement for Judge Richard Linn who took Senior Status on November 1, 2012 after thirteen years in office. In addition, Judge William Bryson is scheduled to take Senior Status on January 7, 2013.
Future Openings?: Judges Newman, Lourie, and Dyk are all eligible for senior status.
Over the past two years, Judges Newman, Bryson, Linn, & Dyk have shown the highest propensity for participating in a panel opinion that includes a dissent. Judge Newman continues to be the most frequent dissenting author, followed by Judges Dyk and O'Malley. These results are shown in the chart below that includes results from all Federal Circuit opinions coded in Westlaw (CTAF) for 2011-2012.
Patents per year
by Dennis Crouch
The chart above is titled USPTO Patent Grant Rate. For this post, the "grant rate" refers to how many patents are being granted rather than the percentage of applications that are patented. The chart itself shows an annualized grant rate calculated on a 20-week moving average. In addition, I color-coded the chart to identify the name of the USPTO Director at the helm for each date. Because of the backward-looking 20-week average, calculations in the early months of any Director's term will include some patents issued during the term of a prior director.
The chart generally has an upward trend that corresponds with an increase in the number of patent applications being filed and patents being issued. That information can also be found in charts that only show annual information. This chart is intended to move to a deeper level of granularity to identify trends within a given year. The chart shows a number of peaks and valleys that each have an interesting story.
Federal Circuit Statistics – FY 2012
By Jason Rantanen
Each year the Federal Circuit provides caseload statistics. The court recently released the statistics for FY 2012 (October 2011-September 2012). In terms of overall caseload, the number appeals filed with the court continued to rise, although it remains well below the numbers of appeals filed from 2002-2007.
Source: http://www.cafc.uscourts.gov/the-court/statistics.html
As with last year's increase, this increase largely appears to be due to an increase in the number of patent infringement appeals. The next charge shows that appeals from district courts rose while appeals from most other areas actually declined slightly. According to the court, 471 patent infringement appeals from the U.S. District Courts were filed in FY 2012, up from 426 in FY 2011.
Source: http://www.cafc.uscourts.gov/the-court/statistics.html
One question that people invariably ask about a pending appeal is "How long will it take for the court to issue its opinion?" While there's no answer that can be offered with certainty other than "it varies," the below chart offers some guidance. It also suggests one of two things: either the court's median time to disposition in patent-related appeals is inching upward slightly, or the court is using less Rule 36 summary affirmances in those appeals. For similar reasons, the below data should be read with some caution, as it (presumably) includes two distinct cohorts: appeals disposed of through Rule 36 affirmances (which issue shortly after the scheduled date for oral argument) and appeals for which the court writes a substantive opinion (which generally issue much later). Consequently, the median time to disposition for the cohort of summarily affirmed appeals is probably much less than the indicated median while the median for the remaining appeals is probably greater.
Based on data obtained from http://www.cafc.uscourts.gov/the-court/statistics.html
2012 Trends: New Life in the Doctrine of Equivalents
Guest post by Donald S. Chisum, Chisum Patent Academy
Looking back at the approximately 125 precedential decisions on patent law of the Federal Circuit in 2012, I asked myself: are there any new trends? One trend smiled back: an increase in the number of decisions on the doctrine of equivalents. There were eight, and, surprisingly, four of them showed judicial favor toward application of the doctrine.
Since 1997, the Federal Circuit, with the encouragement of the Supreme Court, has developed various restrictions and limitations on the doctrine. This has led some commentators to assert that the doctrine of equivalent is “dead.” See Allison & Lemley, The (Unnoticed) Demise of the Doctrine of Equivalents, 59 Stan. L. Rev. 955 (2006-2007). That obituary may have been premature. The Supreme Court created the doctrine in 1850 and twice rejected frontal assaults: in 1950 and 1997. The 2012 Federal Circuit decisions show that well supported assertions of equivalency cannot be dismissed.
In particular, Chief Judge Rader wrote two opinions, expanding beyond what was necessary to decide the cases before him. In one, he emphasized that “the Supreme Court declined to let numerous contentions bury the doctrine.” Deere & Co. v. Bush Hog (Dec. 4, 2012). In Deere, Judge Rader attempted to clarify “misperceptions” about the “vitiation” limitation on the doctrine of equivalents. For a comment on Judge Rader’s discussion of vitiation, see Dennis Crouch, Reviving the Doctrine of Equivalents, Patently-O at https://patentlyo.com/patent/2012/12/rader-reviving-the-doctrine-of-equivalents.html.
In the other case, Judge Rader stressed that the doctrine is particularly appropriate when an accused equivalent is made possible only by technological improvements after a patent’s effective filing date. Energy Transportation Group v. William Demand Holdings (Oct. 12, 2012). Judge Rader has long espoused the view that the doctrine should be available when equivalents are not foreseeable but not when the opposite was true. A competent draftsperson should write claims to cover literally equivalents that were foreseeable at the time the application for the patent was prosecuted.
Also significant were two opinions by other judges. In one, the court addressed the recurring issues of equivalency applied to numerical and range limitations and to qualifiers such as “substantially.” Pozen Inc. v. Par Pharmaceutical (Sept. 28, 2012). The majority, by the recently-appointed Federal Circuit Judge Wallach, held that a claim, which required that a drug tablet layer have “substantially all” of an ingredient, and which was construed to mean “at least 90%,” was properly found infringed by equivalency by an accused tablet that had only 85% of the ingredient in the layer.
In another case, the court, in an opinion by Judge Prost, held that a district court erred in applying the “disclosure-dedication” rule and thus erred in granting summary judgment of no infringement under the doctrine of equivalents. Sandisk Corp. v. Kingston Technology Co., Inc. (Oct. 9, 2012).
In the other four cases, the Federal Circuit concluded, essentially, that asserted equivalents were not sufficiently equivalent or involved completely missing claim limitations or failure to claim literally well-known interchangeable elements. Technology Patents LLC v. T-Mobile Ltd. (Oct. 17, 2012); Mirror Worlds, LLC v. Apple Inc. (Sept. 4, 2012); General Electric Co. v. U.S. Int’l Trade Comm’n (July 6, 2012); Wm. Wrigley Jr. Co. v. Cadbury Adams USA LLC (June 22, 2012).
One may ask: why would there be renewed judicial interest in the doctrine of equivalents? One possibility: developments in other areas of patent law, such as the “abstract idea” restriction on Section 101 patent eligible subject matter, are creating pressures on patent applicants to formulate claims that are specific and narrow in literal scope. Courts may use a more robust doctrine of equivalents to provide a scope of protection that is determined to be appropriate in view of the patent’s disclosure, the prior art, and the development of the pertinent technology after a patent’s effective filing date.
H.R. 6621 as amended passed in the House late last night. It is expected that President Obama will sign the bill today before a new Congress begins on January 3, 2013.
More here: http://hdl.loc.gov/loc.uscongress/legislation.112hr6621
Abandoning Provisional Applications
By Dennis Crouch
This post is a follow-up on my November 2012 discussion of provisional rights entitled Provisional Patent Applications as a Flash in the Pan: Many are Filed and Many are Abandoned.
Provisional patent applications continue to be more popular than ever. In FY2012, more than 160,000 provisional patent applications were filed – a new record. Although the number of provisional applications continues to rise, applicants have also been abandoning more of these provisional applications without relying upon them for priority. The bar chart below helps to show this result. The red bars represent the number of provisional applications filed each fiscal year. The blue bars represent the number of provisional applications filed in a given fiscal year that are relied on as a priority document – either in a US non-provisional application or an international PCT application. The difference between the two charts is the number of provisional applications abandoned without being used as a priority document. (Note – reliance/abandonment information is not yet available for FY2012 because those applications have not all been pending for at least one year.)
The second chart (labeled Abandoning Provisional Applications) reformats the information from above to show the percentage of provisional applications that are abandoned without being relied upon as a priority document.
What is apparent from the chart below is a greater percentage of provisional applications are being abandoned without reliance each year. I should note here that my prior estimate of 50% being abandoned was close but still an over-estimate. Rather, 48% of provisional applications filed in FY2011 were abandoned without being relied upon as a priority document.
As I previously wrote, the significant and growing number of provisional that are abandoned-without-reliance is a sign that patent applicants are very much using the non-provisional/PCT application filing as a culling point. These are big numbers – for FY2011 we're talking about over 72,000 provisional applications that are lost in the wind.
Happy New Year!
Carnegie Mellon v. Marvell: Another $1b verdict.
By Dennis Crouch
Marvell's stock price plunged about 10% following news that a jury had awarded well over $1 billion patent infringement verdict to Carnegie Mellon University. Download MarvellVerdict. The verdict is based upon finding of direct literal infringement of claim 4 of Patent No. 6,201,839 and claim 2 of Patent No. 6,438,180. The CMU hometown Pittsburgh jury also found that Marvell induced infringement by encouraging customers to use its chips. Regarding validity, the jury held that the asserted claims were neither anticipated nor obvious. One of the key pieces of evidence in the trial was an old email from a Seagate engineer noting that the CMU invention went well beyond the current state of the art. (Of course, that email was focused on advances found in the disclosure rather than the broad claims asserted by CMU.) Seagate was apparently happy to provide that document to be used against its market competitor. It is that same Seagate engineer's prior patent application that served as the core of Marvell unsuccessful invalidity argument.
An interesting element of the verdict involved particular willfulness questions. The jury particularly held that (1) Marvell knew of the asserted patent before the lawsuit; (2) had no reasonable defense for its actions; and (3) knew or should have known that its actions were infringing. The verdict did not, however, ask whether the action was "willful." CMU will ask the court to rely upon those answers to treble the damage award. If the damage award is trebled (tripled) and interest added, the award will be roughly equivalent to Marvell's $3.8b market valuation. (The award is larger than CMU's current endowment.) In the initial complaint, CMU also requested attorney fees and a permanent injunction.
This is the second billion dollar judgment against a Quinn Emanuel client awarded in the past few months.
Marvell has announced that it will prevail on appeal. In a pretrial ruling, district court judge Nora Fischer denied Marvell's motion for summary judgment of anticipation, but noted that it was a "close call" based upon her construction of the asserted claims. Marvell did not exercise its authority to seek a reexamination of the patent at the USPTO. Over the next six months, both parties will file and respond to post-verdict motions. Judge Fischer announced her intention to make a final ruling in the case in May 2013. If the verdict is confirmed by Judge Fischer, Marvell will then have an opportunity to appeal after posting a "supersedeas bond." If the damage award is roughly equivalent
The asserted patent claims are basically signal processing logic algorithms for determining the value of items coming from a computer memory signal. This is necessary because the "0" and "1" that we normally talk about for binary digital signals is not actually accurate. In particular, the invention indicates that you should apply a "signal dependent" function to calculate the value as a way to overcome noise in the signal. Apparently a key distinguishing factor from the prior art is that the decoding functions used are "selected from a set of signal-dependent functions." The asserted claims do not identify the particular functions used, only that functions are used.
The two infringing claims are as follows:
Claim 4 of US Patent 6,201,839:
A method of determining branch metric values for branches of a trellis for a Viterbi-like detector, comprising:
selecting a branch metric function for each of the branches at a certain time index from a set of signal-dependent branch metric functions; and applying each of said selected functions to a plurality of signal samples to determine the metric value corresponding to the branch for which the applied branch metric function was selected, wherein each sample corresponds to a different sampling time instant.
Claim 2 of US Patent 6,438,180 (Claim 2 is dependent from Claim 1 and I combined the two together):
A method of determining branch metric values in a detector, comprising:
receiving a plurality of time variant signal samples, the signal samples having one of signal-dependent noise, correlated noise, and both signal dependent and correlated noise associated therewith; selecting a branch metric function at a certain time index; and applying the selected function to the signal samples to determine the metric values, wherein the branch metric function is selected from a set of signal-dependent branch metric functions.
Folks focused on subject matter eligibility issues will notice the obvious problems raised by the asserted claims.
Technical Amendment H.R. 6621
H.R. 6621 has passed in the Senate, but only after the Senate eliminated section (m) of the bill that would have brought to light information regarding the hundreds of "pre-GATT" patent applications that have been pending since 1995. According to Capitol Hill rumors, well known patentee Gil Hyatt was able to convince one Senator to put a hold on the bill that would have eliminated possibility of passage barring the amendment. Hyatt apparently has a number of applications pending that claim architecture and logic design of very basic integrated circuits. There are several hundred of these pre-GATT applications pending. The majority are apparently ones delayed because of Department of Defense secrecy orders. However, a substantial number would be properly classified as submarine patents whose existence is currently unknown but that potentially claim a broad scope of coverage that could potentially cover elements of an entire mature industry (such as integrated circuits). Because the Senate amended the bill, it must be passed again by the House and signed by the President before conclusion of the term.