Lexicon Medical v. Northgate Technologies and Smith & Nephews (Fed. Cir. 2011)
Judge Rader begins his claim construction decision with an interesting conclusion:
Because the record amply supports the trial court’s interpretation of this claim term … this court affirms.
Of course the Federal Circuit’s en banc decision in Cybor requires that claims be reviewed de novo and without deference to the lower court decision. Thus ,the proper question on appeal is not whether the evidence supports the lower court’s decision but instead whether the lower court made the correct determination. In its actual analysis of the claim construction, the appellate panel here appears to have actually performed a complete de novo review and concluded that, indeed, the trial court’s conclusions were correct. The seeming slip in the opening statement of the opinion is understandable – district court opinions on claim construction should be given some deference.
Part of the trouble with claim construction is that the analysis is rarely a binary decision for the court. Rather, there are often a large number of potential interpretations for any particular claim phrase and, courts typically construe (or refuse to construe) multiple claim phrases. Thus, the idea that a random claim construction should be correct 50% of the time is completely wrong. We also know that well informed, reasonable decision makers often disagree on the particular “best” construction of a particular claim phrase. In a recent article, Peter Menell wrote “If nothing else, the past two decades revealed the inherent difficulties of using language to define the boundaries of abstract and intangible rights.” Menell, Powers, & Carlson, Patent Claim Construction: A Modern Synthesis and Structured Framework, 25 Berkeley Tech. Law Journal 711 (2011).
District courts do make mistakes in construing claims, and those should be corrected on appeal. However, apart from clear district court errors, there is no evidence that the Federal Circuit judges do a better job of construing claims than do district court judges. Offering some deference to district court decisions would give a modicum of finality to those decisions and would give some credence to the reality that claim construction involves substantial factual analysis. In his article, Menell writes that “the Federal Circuit is likely to formally rule that there is a role for district court fact-finding in the claim construction process.” We will be waiting to see if Menell’s prediction comes true.
Last week, I reported that the new appropriations for the remaining five-months of FY2011 would force the USPTO to cut approximately $100,000,000.00 from its budget. That figure represents more than a 10% cut in what the office was expecting to spend during this period. Today, USPTO Director David Kappos confirmed my statements in a message to USPTO Employees. He writes:
In view of the funding cuts reflected in the final budget and affecting the U.S. government as a whole, we will be unable to expend the additional $85-100 million in fees that we will be collecting during this fiscal year—funds that we had anticipated being able to use to fund operations this year.
… Further, I am mindful of the fact that we may very well be operating at the FY 2011 level for the foreseeable future. As a result, we have had to make some difficult decisions in order to ensure the responsible stewardship of the agency.
Based on the budget cuts, Director Kappos has announced the following changes for the patent examination corps:
No overtime;
Hiring freeze;
Training limited to “mandatory training”;
PCT search funding is cut severely;
Detroit satellite office is indefinitely postponed;
IT infrastructure investments eliminated except for “mission-critical” issues;
Track One expedited patent examination program indefinitely postponed; and
Mandatory reductions in expenses including travel, conferences, and other contracts.
The $85-100 million in fees that the USPTO will collect but not be allowed to spend will be passed to the general federal government coffers to be spent on other non-patent projects. These cuts will obviously have a negative impact on patent quality, patent pendency, and examiner morale.
In a recent blog post, Bill Vobach noted that Edward C. DuMont’s original nomination as a judge for the Court of Appeals for the Federal Circuit has now been awaiting Senatorial action for more than one year.
This hold-up is a shame. DuMont is eminently well qualified. He has spent years as a top litigator at WilmerHale, Sullivan & Cromwell, and the Solicitor General’s Office within the Department of Justice. He graduated from Yale, Phi Beta Kappa and Summa Cum Laude with the highest standing of any humanities student. At Stanford Law School, DuMont graduated with distinction and was honored with membership to the Order of the Coif. After law school, he clerked for conservative thought leader Richard Posner on the Court of Appeals for the Seventh Circuit. DuMont’s litigation experience has focused primarily on appellate practice and he has argued 18 Supreme Court cases. He has also done trial work and handled at least one patent lawsuit through trial. Even though he has not focused on any particular areas of law, DuMont has worked on a number of intellectual property focused lawsuits, including the Lemelson case, Mattel v. MCA (trademark), Eldred (copyright term extension), Gen-Probe v. Vysis (precursor to MedImmune), Merck v. Teva, Princo v. Philips, AFT v. Cardinal, and Tivo v. Echostar. The ABA has rated DuMont as “unanimously well qualified” and he has also been awarded numerous “leading lawyer” awards throughout his 25-year legal career.
While DuMont has been awaiting Senate confirmation, both Jimmie Reyna and Kathleen O’Malley have been given approval and are now Federal Circuit Judges.
Why the Delay: The hold-up for DuMont’s nomination is the fact that he is openly gay. If approved by the Senate, DuMont would be the only openly gay federal appellate judge and one of only three openly gay federal judges. To-date, no federal judicial appointment for an openly gay man has been approved by the Senate. The delay has been entirely behind the scenes and no Senator has been bold enough to publicly announce the ridiculous position that homosexual men should not be allowed to judge patent appeals.
To be fair, the issue of homosexuality does arise occasionally in the federal employment cases heard by the court. Earlier this year, for instance, in Todd M. Jack v. Department of Commerce, the Federal Circuit was asked to consider whether Jack had been properly suspended for 120 days after he accused his USPTO co-workers of being homosexuals, claimed that his co-workers had “hired Chinese homosexuals to stalk and harass him”; and “lunged” at a superior. The Federal Circuit affirmed the Merit Systems Protection Board’s decision that the suspension was not a violation of Jack’s rights. It is hard to see how this case could have been decided any differently even if the judge himself were gay. The cases involving homosexual issues are much less common than those involving other forms of harassment – such as (hetero)sexual and racial harassment.
The bottom line in DuMont’s situation: The subject matter jurisdiction of the Court of Appeals for the Federal Circuit is severely limited in scope, and DuMont’s sexual orientation is highly unlikely to impact his judicial performance in any way. At this point, Senators Leahy (D-Vt) and Grassley (R-Iowa) and the other members of the Judiciary Committee are the ones responsible for holding back. The Federal Circuit Bar Association, AIPLA, and IPO have all given lip service to supporting DuMont’s nomination, but it is time that they begin to push a bit harder.
Akamai Technologies, Inc. v. Limelight Networks, Inc., (Fed. Cir. 2011) (en banc order)
The Federal Circuit has ordered an en banc rehearing of Akamai's appeal focusing on the following question:
If separate entities each perform separate steps of a method claim, under what circumstances would that claim be directly infringed and to what extent would each of the parties be liable?
Briefs of amici curiae may be filed without consent from the parties or leave of the court. This decision follows on the heels of Judge Bryson's recent public plea in McKesson for rehearing en banc on the issue of joint infringement. The leading article on the topic is Mark A. Lemley et al., Divided Infringement Claims, 33 AIPLA Q.J. 255, 283 (2005). In that article, Lemley argues that virtually all divided infringement problems could have been prevented by better claim drafting. To date, I have not seen a careful or complete retort to the Lemley's article.
Tivo Inc. v. Echostar Corp. (Fed. Cir. 2011) (en banc)
At trial, Echostar was held liable as an infringer and was permanently enjoined from making or selling the infringing products as well as “all other products that are only colorably different therefrom.” Echostar then modified and continued to market its product. Rather than filing a new lawsuit, Tivo filed a contempt action arguing that Echostar’s activities violated the permanent injunction already in place. The district court held Echostar in contempt after ruling that the modified product was not colorably different from the infringing product and therefore that its sale violated the permanent injunction.
Normally, a contempt proceeding is the appropriate vehicle for judging violations of a permanent injunction. However, when a company’s new product is sufficiently different from its prior infringing product, courts instead require the patentee to pursue an entirely new case on the merits of the new product. In a rare en banc decision penned by Judge Lourie, the Court of Appeals for the Federal Circuit has provided new guidance as how courts should structure a contempt proceeding when an adjudged infringer releases a new or modified product.
The new rules of contempt proceedings for modified products following an injunction:
Good Faith Design Around: A good faith effort to modify a product in order to avoid infringement will not avoid a contempt proceeding. However, the good faith of someone held in contempt may be used in lessening the penalty for contempt.
Overrule Two-Step Process: The two-step test defined in KSM Fastening Sys., Inc. v. H.A. Jones Co., 776 F.2d 1522, 1530–32 (Fed. Cir. 1985), is overruled as unworkable. That test required courts to first determine whether a contempt proceeding is appropriate based upon the colorable difference test and then determine whether contempt actually occurred. Under the new approach, courts will have broad discretion in judging whether to hold a contempt proceeding so long as the injured party offers “a detailed accusation … setting forth the alleged facts constituting the contempt.”
Appealing Decision to Hold a Contempt Proceeding: A confused aspect of the decision is whether the lower court’s decision to hold a contempt proceeding will be appealable. In one portion of the opinion, the court states that the question of whether the contempt proceeding was proper will not be directly appealable. “As with appeals from findings of civil contempt in other areas of law, we will only review whether the injunction at issue is both enforceable and violated, and whether the sanctions imposed were proper.” In the next paragraph, however, the court notes “that there may be circumstances in which the initiation of contempt proceedings would constitute an abuse of discretion by the district court.” The court then went on to hold that the decision in this particular case was not an abuse of discretion.
Colorably Different: In order win a contempt proceeding, the patentee must show that “the newly accused product is [not] so different from the product previously found to infringe that it raises ‘a fair ground of doubt as to the wrongfulness of the defendant’s conduct.'” In conducting this analysis, the court should focus on the portions of the accused product that were a basis for the prior finding of infringement and consider whether those portions have been significantly modified or removed. “If those differences between the old and new elements are significant, the newly accused product as a whole shall be deemed more than colorably different from the adjudged infringing one” and a contempt finding would be inappropriate. At that point, the patentee could still pursue a full infringement action.
Infringement and Claim Construction: Even when the new product is not colorably different from the prior infringing products, the court must also determine that the new product actually infringes the asserted patent claims. In this process, the court will be bound by its prior claim construction ruling.
In this case, the district court failed to explicitly consider whether Echostar’s modified product met each limitation of the asserted claim. On remand, the district court must make that factual determination.
The court was unanimous as to this new approach to contempt proceedings.
Dissent: The dissent filed by Judge Dyk primarily challenges whether a particular portion of the injunction can be challenged as vague and overbroad in a contempt proceeding. Judge Dyk’s dissent was joined by Chief Judge Rader and Judges Gajarsa, Linn, and Prost. Looking at the tallies, for this portion of the opinion, there were seven judges in the majority and five in dissent. [updated to fix counting error] The majority included Judges O’Malley and Reyna who were not on the bench until well after briefing and oral arguments had been complete.
We have previously discussed Google's $900 million Stalking Horse bid to purchase Nortel's portfolio of more than 6,000 patents. Nortel was a Canadian-based telecommunications equipment manufacturer. The company is now bankrupt and the company's assets have largely been sold to pay its debts. The patent portfolio represents one of the last remaining company assets.
Over the years, Nortel has licensed its technology and its patent rights to various other companies, including Research-in-Motion, Microsoft, Plantronics, Foundry Networks, and others.
An interesting aspect of the proposed transfer would involve "vesting all of Nortel's right, title and interest in and to such patent assets absolutely in the purchaser free and clear of and from all encumbrances." Ongoing licenses would also be rejected and terminated as permissible by law.
Bankruptcy has a tendency to disturb well-settled contracts. In particular, a bankruptcy trustee has the right to either assume or reject executory agreements. Executory agreements are typically seen as any ongoing contract where both parties have ongoing material obligations. When the bankruptcy trustee rejects an executor agreement, the wronged-party has a right to collect for breach of contract, but only as an unsecured creditor. (Unsecured creditors typically receive very little money from the liquidating party.)
Both US and Canadian law provide an important exception for executory licenses of patents and copyrights. See Section 365(n) of the Bankruptcy Code. A patent licensee can continue to enforce its rights under the license if it continues to pay any royalty due. Courts do typically allow the trustee to prevent assignment of non-exclusive licenses. In this case, Nortel's trustee has "affirmatively and reasonably refused to give consent … to any renewal, extension, assignment, amendment, waiver or modification of any license [or] any Cross-License Agreement…. [No licensee] shall have the right or power to transfer any of its obligations, right, title or interest in the licenses." The trustee's proposal also indicates that licensees who do not come forward to explicitly claim their right as licensees will lose their rights: The licenses will be terminated at "closing and shall forever be barred, released and extinguished."
Moving forward, the scope of rights granted to licensees and the potential licensing revenue stream will likely have a major impact on whether competitors bid against Google. Microsoft has publicly claimed its belief that its rights as a licensee will continue to bind subsequent purchasers of the Nortel patents.
In Re Yasuhito Tanaka (Fed. Cir. 2011) Download 10-1262 Panel: Bryson, Linn (author), Dyk (dissent)
Patent No. 6,093,991 issued to Yasuhito Tanaka in 2000. Two years later, Tanaka filed a reissue application seeking to broaden the scope of independent claim 1. During the reissue proceeding, Tanaka gave up the broadening attempt, instead presenting unamended claims 1-7 and new claim 16 depending from claim 1.
The examiner rejected claims 1-7 and 16 on the ground that, because Tanaka's declaration did not specify an error that broadens or narrows the scope of the claims of the issued patent, there was no error correctable by reissue. A seven judge panel of the Board of Patent Appeals and Interferences affirmed the examiner's decision in a precedential opinion, concluding that 35 U.S.C. § 251 "disallow[s] reissue applications that simply add narrow claims to the reissue patent when no assertion of inoperativeness or invalidity for the reasons set forth in § 251 can be made by the patentee" and finding that Tanaka was impermissibly seeking an additional claim on reissue 'in order to hedge against the possible invalidity of one or more of the original claims.'" Slip Op. at 4 (quoting Board decision).
Majority: Addition of Narrower Claims is Permitted On appeal, Judges Linn and Bryson disagreed with the Board's holding. Drawing upon a rule articulated in dicta by Judge Rich in In re Handel, 312 F.2d 943, 946 n.2 (CCPA 1963), an implication of the rule in In re Muller, 417 F.2d 1387 (CCPA 1969), and an assumption of the rule in Hewlett-Packard Co. v. Bausch & Lomb, Inc., 822 F.2d 1556 (Fed. Cir. 1989), the majority held that longstanding precedent and the principles of stare decisis permit patent applicants to file a reissue application solely to add additional claims:
Even though the rule that adding a dependent claim as a hedge against possible invalidity is a proper reason to seek reissue has seemingly never been formally embodied in a holding of this court or its predecessor, articulation of the rule in Handel was not simply a passing observation—it was a considered explanation of the scope of the reissue authority of the PTO in the context of a detailed explanation of the reissue statute. Based on this court’s adoption of that rule and its adherence to the rule in both Muller and Hewlett-Packard, this court rejects the Board’s contrary ruling.
Judge Dyk's Dissent Rejecting the majority's shaky reliance on Handel, Muller, and Hewlett-Packard, Judge Dyk instead pointed to even older precedent – a nineteenth century Supreme Court decision – that, in his view, rendered reissue unavailable when nothing in the original patent was being corrected.
It is plausibly suggested that ‘the claim could be made perfect in form, and consistent with the description of all that portion of the apparatus which relates to the invention, by simply striking out the letter of designation for the upper chest, J, and the letter of designation for the conveyor shaft of that chest, K.’ But that the inventor did not and does not intend so to amend his claim is conclusively shown by his having repeated the same claim, including these very letters of designation, in the [retained] claim of the reissued patent. His attempt is, while he retains and asserts the original claim in all particulars, to add to it an-other claim which he did not make, or suggest the possibility of, in the original patent . . . .
To uphold such a claim . . . would be to disregard the principles governing reissued patents, stated upon great consideration by this court at the last term in the case of Miller v. [Bridgeport] Brass Co., 104 U.S. 350, and since affirmed in many other cases.
Dissent, quoting Gage v. Herring, 107 U.S. 640, 645 (1883) (emphasis added by Judge Dyk). In Judge Dyk's view, Gage thus foreclosed the ability of applicants to retain the original claims without alteration or amendment, or at a minimum created enough conflict with the cases cited by the majority that the court was free to address the issue on the merits.
Comment: As both the majority and dissent seem to implicitly recognize, neither is on particularly solid ground in terms of prior decisions. The majority relies on a rule that it itself admits is dicta, but nevertheless characterizes as the product of longstanding precedent. The dissent foundation's is even less stable, being built on vague language from an opinion that involved an earlier version of § 251. It is not at all clear from Gage that the Court was concerned with the mere addition of a new claim or instead with the addition of a broadening claim, although after reading Gage I think the majority has the more correct interpretation. In the end, though, the majority supports its opinion not just with citation to Handel, but also with reasoning sufficient enough to provide an independent basis for the ruling.
Guest Post by Megan M. La Belle, Catholic University Columbus School of Law
Professor La Belle attended the oral argument in Microsoft v. i4i Limited Partnership this morning and was kind enough to prepare this summary for Patently-O.
Today, the United States Supreme Court heard oral argument in Microsoft Corporation v. i4i Limited Partnership, in which Microsoft has challenged the Federal Circuit’s clear and convincing evidence standard for overcoming the presumption of patent validity set forth in 35 U.S.C. § 282. The argument was held before a full courtroom, with former Deputy Solicitor General Thomas G. Hungar representing Microsoft, former Solicitor General Seth P. Waxman representing i4i, and Deputy Solicitor General Malcolm Stuart arguing as amicus curiae on behalf of the United States in support of i4i.
Mr. Hungar began his argument by referring to the Court’s statement in KSR Int’l Co. v. Teleflex, Inc. that the presumption of validity “seems much diminished” where, as here, the prior art was not considered by the U.S. Patent & Trademark Office. Justice Scalia quickly responded, asking whether Microsoft was arguing that a preponderance of the evidence standard should apply across the board, or only when the prior art was not considered by the USPTO. Mr. Hungar explained that Microsoft’s position is that the more relaxed standard should apply in all cases where patent validity is challenged.
The Justices then asked a series of questions about the state of the law and congressional intent in 1952 when § 282 was enacted, since the statute itself is silent as to the evidentiary standard. The Court focused on Radio Corporation of America (RCA) v. Radio Eng’g Labs., Inc., 293 U.S. 1 (1934), in which Justice Cardozo made some broad statements about the presumption of patent validity, including that the challenger “bears a heavy burden of persuasion” and that the presumption cannot be overcome “except by clear and cogent evidence.” Relying on RCA, i4i argued that Congress intended to codify the existing presumption of patent validity when it enacted § 282, and therefore clear and convincing evidence is the correct standard. Microsoft countered that the law regarding the presumption of validity was “all over the map” in 1952, and that some courts did not recognize any presumption of validity, much less a presumption that could only be overcome by clear and convincing evidence. Microsoft further argued that the quoted language from RCA was mere dicta, and that the case was distinguishable because RCA involved a question of priority of invention, not validity.
In addition to arguing that Congress intended to codify the clear and convincing standard, counsel for both i4i and the United States emphasized Congress’s acquiescence in that standard over the years. They contended that Congress is well aware of the Federal Circuit’s clear and convincing standard, and that Congress has been very active in the patent arena both in the past and in the present. Yet, despite its many other proposals to reform the patent system, Congress has made no attempt to change the long-standing evidentiary standard for overcoming a presumption of validity.
Some Justices inquired about solutions other than altering the evidentiary standard. Justices Breyer and Sotomayor wondered if perhaps the issues raised by this case could be addressed with careful jury instructions. Justice Sotomayor suggested, for example, that a jury could be instructed that the burden of proof to overcome the presumption of validity is clear and convincing evidence, but that the challenger’s burden is more easily satisfied with respect to evidence of prior art that was not considered by the USPTO. Microsoft responded that such a jury instruction could be confusing for the jury, as the Federal Circuit held in an earlier case between Microsoft and z4 Technologies.
Finally, the Court returned to the question as to why the presumption of validity should apply when the prior art was not considered by the USPTO. In response to Justice Ginsburg’s request to justify such a rule, Mr. Waxman offered four reasons. First, a validity challenge is a “collateral attack” on a governmental decision to issue a patent. Second, if a patent is erroneously invalidated, the harm to the patent owner is significant because of the preclusive effect such a determination has under Blonder Tongue v. University of Illinois, 402 U.S. 313 (1971). Third, i4i argued that such a presumption is warranted because patent owners, investors, and licensees rely on patents once they are issued. Finally, i4i claimed that it is “far from black and white what the PTO does or doesn’t consider,” and that rejecting the long-standing clear and convincing standard would marginalize the agency. In response, Justice Breyer stated that i4i’s reasons “are all along the lines of how important patents are and what a disaster [it is when] patents are invalidated.” Justice Breyer then commented that, in today’s world, perhaps a “worse disaster for the country is to have protection given to things that don’t deserve it….”
The Court is expected to issue its decision before the end of June 2011. Chief Justice Roberts recused himself, so the case will be decided by the remaining eight justices.
Megan M. La Belle is an assistant professor at the Catholic University of America, Columbus School of Law, where she teaches and researches in the area of intellectual property law and procedure. Her article "Patent Litigation, Personal Jurisdiction, and the Public Good" recently appeared in the George Mason Law Review.
Patent litigator James Pistorino has emerged from the collapse of Howry as a partner at Perkins Coie. In a recent BNA article, Pistorino provided a brief analysis of patent complaints filed in 2010 with a focus on the Eastern District of Texas. In 2010, E.D. Texas held a slight lead in the absolute number of patent cases filed. Excluding false marking cases, 299 cases were filed in E.D. Texas compared with 255 in Delaware, 225 in the Central District of California, 180 in the Northern District of California, and 179 in the Northern District of Illinois. Pistorino argues that E.D. Texas’s slight lead in the number of cases filed masks the jurisdiction’s continued overwhelming popularity. In particular, he considered the number of defendants sued for infringement and found that in 2010 more defendants were sued in E.D. Texas than in Delaware, California, New Jersey, and Illinois combined. Figure 2 from the article highlights this conclusion. Based upon the data reported, Pistorino goes on to question “whether the forum shopping issue in patent cases (particularly in the Eastern District of Texas) has been solved and whether increased scrutiny of improper joinder of defendants is warranted.”
See James Pistorino, Concentration of Patent Cases in Eastern District of Texas Increases in 2010, 81 BNA Patent, Copyright & Trademark Journal 803 (2011) (Subscriber access only).
Tomorrow, Monday April 18th, the Supreme Court will hear oral arguments in Microsoft v. i4i, which presents the question whether proving invalidity requires clear and convincing evidence when the prior art on which the invaldity defense rests was not considered by the PTO. The full Question Presented can be found here and prior Patently-O posts on the subject are linked below.
In March 2011, the FTC issued a Report entitled “The Evolving IP Marketplace: Aligning Patent Notice and Remedies with Competition.” In that report, the FTC recommended that the ITC adopt the view that “only those licensing activities that promote technology transfer ‘exploit’ patented technology within the meaning of Section 337, and therefore satisfy the domestic industry requirement.” Also, the FTC recommended that the ITC “incorporate concerns about patent hold-up, especially of standards, into the decision of whether to grant an exclusion order in accordance with the public interest elements of Section 337.”
In a new Patently-O Patent Law Journal essay, Benjamin Levi and Rodney Sweetland review the FTC’s recommendations for FTC action and argue that “the recommendations appear to be outcome-driven, as they overlook legal and policy-based factors that counsel against implementation of the recommendations.”
Cite as Benjamin Levi and Rodney R. Sweetland, The Federal Trade Commission’s (FTC) Recommendations to the International Trade Commission (ITC): Unsound, Unmeasured, and Unauthoritative, 2011 Patently-O Patent L.J. 1, at /media/docs/2011/10/levi.ftcunsound.pdf.
Levi & Sweetland are principals in the Washington, DC offices of McKool Smith, P.C.
Jay Walker sues more than 100 of companies for patent infringement
Jay Walker is a successful inventor and entrepreneur. He is the founder of Priceline, a website that offers discounts on hotels, cruises, and other travel related items. Walker has now sued more than 100 companies for patent infringement. He contends that these companies violated various patents that he owns. Walker’s suit against Apple, Google, Samsung, Microsoft and others claim their mapping technology infringes his patents. [Complaint] Walker’s suit against companies like Groupon and Livingsocial claim that they infringe four of his patents. One such patent (6,249,772) called “Systems and Methods Wherein A Buyer Purchases A Product At A First Price And Acquires The Product From A Merchant That Offers The Product For Sale At A Second Price.” [Complaint]
Number of patent applications in Europe hits all-time high
The EPO received 235,000 European patent filings in 2010, the highest number ever in the office’s 34-year history. Over 33% of the filings came from European states, 26% from the US and 18% from Japan. EPO’s president Battistelli states that, “after a 2-year slump, the EU and US are nearly back to their levels of patenting before the crisis.” Is this a sign that the economy is improving? [Link]
Patent issued for bubbles!
On March 22 the USPTO issued patent #7,910,531 titled “Composition and method for producing colored bubbles” to C2C Technologies. However, on that same day Crayola filed a re-exam 95/001,582 which asserts anticipation and obviousness. Crayola filed the re-exam because they already have colored bubbles on sale in stores and would likely be liable for patent infringement if they do not find a way to get the patent invalidated. [Link]
Patent Jobs:
Shumaker & Sieffert is seeking to hire patent attorneys with 1-5 years experience for their Twin Cities office. The firm will consider remote working relationships for experienced attorneys. [Link]
Holland & Hart is searching go trademark attorney with 4+ years experience for their Boulder office. [Link]
Wenderoth, Lind & Ponack is seeking an entry-level patent attorney with a chemical background for their Washington D.C. office. [Link]
Chernoff Vilhauer is looking for their patent attorney with 4+ years of experience for their Portland office. [Link]
Upcoming Events:
William Mitchell College of Law will hold the 2nd annual Patterson Thuente IP Lecture on April 21st. Judge Randall Radar will discuss the most pressing issues in patent law. [Link]
Fordham Intellectual Property Law Institute will host the 19th Annual Intellectual Property Law and Policy Conference April 28th -29th. David Kappos, Victoria Espinel, Judge Newman, Judge Radar, and many others in the IP field will be in attendance. [Link]
Licensing Executives Society (LES) will hold its Spring Meeting in New York May 4th -6th. The Keynote speaker will be David Kappos. Patently-O readers will receive a $200 discount by using promo code PO11. [Link]
The 3rd Annual Corporate IP Counsel Forum will be held May 24-25 in New York. The Corporate IP Counsel Summit is the premier forum to hear about solutions to maximize IP assets, avoid costly litigation, create and maintain efficient infrastructure, fully integrate IP strategies into business plans, prepare for anticipated patent law changes, and much more. Guest speakers include Michael Bishop, Mony Ghose, Mark Costello, Michael Springs, Charles Kwalwasser, and Timothy Wilson. Patently-O readers will receive a $100 discount by using promo code FZA884. [Link]
Jay Walker sues more than 100 of companies for patent infringement
Jay Walker is a successful inventor and entrepreneur. He is the founder of Priceline, a website that offers discounts on hotels, cruises, and other travel related items. Walker has now sued more than 100 companies for patent infringement. He contends that these companies violated various patents that he owns. Walker’s suit against Apple, Google, Samsung, Microsoft and others claim their mapping technology infringes his patents. [Complaint] Walker’s suit against companies like Groupon and Livingsocial claim that they infringe four of his patents. One such patent (6,249,772) called “Systems and Methods Wherein A Buyer Purchases A Product At A First Price And Acquires The Product From A Merchant That Offers The Product For Sale At A Second Price.” [Complaint]
Number of patent applications in Europe hits all-time high
The EPO received 235,000 European patent filings in 2010, the highest number ever in the office’s 34-year history. Over 33% of the filings came from European states, 26% from the US and 18% from Japan. EPO’s president Battistelli states that, “after a 2-year slump, the EU and US are nearly back to their levels of patenting before the crisis.” Is this a sign that the economy is improving? [Link]
Patent issued for bubbles!
On March 22 the USPTO issued patent #7,910,531 titled “Composition and method for producing colored bubbles” to C2C Technologies. However, on that same day Crayola filed a re-exam 95/001,582 which asserts anticipation and obviousness. Crayola filed the re-exam because they already have colored bubbles on sale in stores and would likely be liable for patent infringement if they do not find a way to get the patent invalidated. [Link]
Patent Jobs:
Shumaker & Sieffert is seeking to hire patent attorneys with 1-5 years experience for their Twin Cities office. The firm will consider remote working relationships for experienced attorneys. [Link]
Holland & Hart is searching go trademark attorney with 4+ years experience for their Boulder office. [Link]
Wenderoth, Lind & Ponack is seeking an entry-level patent attorney with a chemical background for their Washington D.C. office. [Link]
Chernoff Vilhauer is looking for their patent attorney with 4+ years of experience for their Portland office. [Link]
Upcoming Events:
William Mitchell College of Law will hold the 2nd annual Patterson Thuente IP Lecture on April 21st. Judge Randall Radar will discuss the most pressing issues in patent law. [Link]
Fordham Intellectual Property Law Institute will host the 19th Annual Intellectual Property Law and Policy Conference April 28th -29th. David Kappos, Victoria Espinel, Judge Newman, Judge Radar, and many others in the IP field will be in attendance. [Link]
Licensing Executives Society (LES) will hold its Spring Meeting in New York May 4th -6th. The Keynote speaker will be David Kappos. Patently-O readers will receive a $200 discount by using promo code PO11. [Link]
The 3rd Annual Corporate IP Counsel Forum will be held May 24-25 in New York. The Corporate IP Counsel Summit is the premier forum to hear about solutions to maximize IP assets, avoid costly litigation, create and maintain efficient infrastructure, fully integrate IP strategies into business plans, prepare for anticipated patent law changes, and much more. Guest speakers include Michael Bishop, Mony Ghose, Mark Costello, Michael Springs, Charles Kwalwasser, and Timothy Wilson. Patently-O readers will receive a $100 discount by using promo code FZA884. [Link]
Jay Walker sues more than 100 of companies for patent infringement
Jay Walker is a successful inventor and entrepreneur. He is the founder of Priceline, a website that offers discounts on hotels, cruises, and other travel related items. Walker has now sued more than 100 companies for patent infringement. He contends that these companies violated various patents that he owns. Walker’s suit against Apple, Google, Samsung, Microsoft and others claim their mapping technology infringes his patents. [Complaint] Walker’s suit against companies like Groupon and Livingsocial claim that they infringe four of his patents. One such patent (6,249,772) called “Systems and Methods Wherein A Buyer Purchases A Product At A First Price And Acquires The Product From A Merchant That Offers The Product For Sale At A Second Price.” [Complaint]
Number of patent applications in Europe hits all-time high
The EPO received 235,000 European patent filings in 2010, the highest number ever in the office’s 34-year history. Over 33% of the filings came from European states, 26% from the US and 18% from Japan. EPO’s president Battistelli states that, “after a 2-year slump, the EU and US are nearly back to their levels of patenting before the crisis.” Is this a sign that the economy is improving? [Link]
Patent issued for bubbles!
On March 22 the USPTO issued patent #7,910,531 titled “Composition and method for producing colored bubbles” to C2C Technologies. However, on that same day Crayola filed a re-exam 95/001,582 which asserts anticipation and obviousness. Crayola filed the re-exam because they already have colored bubbles on sale in stores and would likely be liable for patent infringement if they do not find a way to get the patent invalidated. [Link]
Patent Jobs:
Shumaker & Sieffert is seeking to hire patent attorneys with 1-5 years experience for their Twin Cities office. The firm will consider remote working relationships for experienced attorneys. [Link]
Holland & Hart is searching go trademark attorney with 4+ years experience for their Boulder office. [Link]
Wenderoth, Lind & Ponack is seeking an entry-level patent attorney with a chemical background for their Washington D.C. office. [Link]
Chernoff Vilhauer is looking for their patent attorney with 4+ years of experience for their Portland office. [Link]
Upcoming Events:
William Mitchell College of Law will hold the 2nd annual Patterson Thuente IP Lecture on April 21st. Judge Randall Radar will discuss the most pressing issues in patent law. [Link]
Fordham Intellectual Property Law Institute will host the 19th Annual Intellectual Property Law and Policy Conference April 28th -29th. David Kappos, Victoria Espinel, Judge Newman, Judge Radar, and many others in the IP field will be in attendance. [Link]
Licensing Executives Society (LES) will hold its Spring Meeting in New York May 4th -6th. The Keynote speaker will be David Kappos. Patently-O readers will receive a $200 discount by using promo code PO11. [Link]
The 3rd Annual Corporate IP Counsel Forum will be held May 24-25 in New York. The Corporate IP Counsel Summit is the premier forum to hear about solutions to maximize IP assets, avoid costly litigation, create and maintain efficient infrastructure, fully integrate IP strategies into business plans, prepare for anticipated patent law changes, and much more. Guest speakers include Michael Bishop, Mony Ghose, Mark Costello, Michael Springs, Charles Kwalwasser, and Timothy Wilson. Patently-O readers will receive a $100 discount by using promo code FZA884. [Link]
The U.S. Patent System moved one step closer to a major overhaul. On Thursday, April 14, the Judiciary Committee of the House of Representatives voted 32-3 in favor of the America Invents Act (Patent Reform Act of 2011).
As mentioned in Professor Sichelman’s post, A managers amendment would have changed the definition of prior art to include only (1) patent applications and (2) public disclosures. Under that proposal, non-informing uses, sales, and offers-to-sell would not qualify as prior art. However, that portion of the manager’s amendment failed (the rest of the managers amendment passed and is now included within the bill).
The amended act includes a several additional tweaks, including:
A sunset provision for USPTO fee setting funding authority;
A limitation that the new post-grant supplemental examination procedure (designed to allow an applicant to wash away the threat of inequitable conduct charges) cannot be used if the USPTO finds that the applicant committed fraud on the patent office during the original prosecution;
The establishment of a pro bono program for assisting “financially under-resourced” inventors; and
A few odd statements about the move from “first inventor to use” to “first inventor to file.”
McKesson Technologies Inc. v. Epic Systems Corp. (Fed. Cir. 2011)
The Court of Appeals for the Federal Circuit has again ruled that infringement of a patented method requires that a single entity performs all steps of the method. Other recent cases on point include BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007) and Muniauction, Inc. v. Thomson Corp., 552 F.3d 1318 (Fed. Cir. 2008). According to these cases, actions by third parties only count toward infringement if those parties are acting as agents of or under the control and direction of the single direct infringer.
In McKesson, the patented communications method requires action from a health care provider as well as multiple users. There was no infringement here because the users were not acting under the “control and direction” of the health care provider.
Inducement <> Control: Although the users were encouraged by the health care provider to take the would-be infringing step, encouragement alone is doctrinally insufficient to consider the users as agents of the health care provider. In his opinion for the court, Judge Linn noted that the users were not under a contractual duty to use the system and that the “voluntary actions of patients” were did not create an agency relationship.
An interesting aspect of the decision is that each judge filed an opinion.
Judge Linn, writing the “opinion for the court” indicated that the court was bound by prior precedent, but also argued that patentee’s facing a joint infringement situation simply should have done a better job in claim drafting.
[I]n patent law, unlike in other areas of tort law, the patentee specifically defines the boundaries of his or her exclusive rights and provides notice to the public to permit avoidance of infringement. This stands in sharp contrast to the circumstances surrounding a joint tort where the victim has no ability to define the injurious conduct upfront and where, absent joint liability, the victim would stand uncompensated as a consequence.
This approach is supported by an interesting article by Mark Lemley, et al., that argues most divided infringement situations could be solved by better claim drafting.
Judge Bryson concurred in the judgment based upon binding precedent, but called for an en banc re-hearing.
I agree that the decision in this case is correct in light of this court’s decisions in BMC Resources, Muniauction, and Akamai Technologies. Whether those decisions are correct is another question, one that is close enough and important enough that it may warrant review by the en banc court in an appropriate case.
Judge Newman dissented – arguing that the approach conflicts with prior precedent:
Earlier cases applied the law of infringement as a straightforward matter of tortious responsibility. For example, in Fromson v. Advance Offset Plate, Inc., 720 F.2d 1565 (Fed. Cir. 1985), the court held that contributory infringement was possible when a step of a method claim was practiced by the customer, and explained that “because [the manufacturer’s] customers, not [the manufacturer], applied the diazo coating, [the manufacturer] cannot be liable for direct infringement with respect to those plates but could be liable for contributory infringement.” Id. at 1568. This has been the law. It has never had en banc reversal.
Interestingly, the Fromson case has been repeatedly cited for the notion that customer actions cannot be used to support a direct infringement charge against a manufacturer. The case has only rarely been cited this additional teaching that inducing infringement does not require a single direct infringer. The first Federal Circuit decision holding that inducement requires proof of direct infringement appears to be Met-Coil Systems Corp. v. Korners Unlimited, Inc., 803 F.2d 684, 687 (Fed. Cir. 1986). In several post-1952 cases, the Supreme Court has stated that an invention must actually be infringed – i.e., practiced – before someone can be liable for indirect infringement. However, in those cases, the Supreme Court did not state that the actual infringement must be performed by a single entity, and a fair reading of those cases would allow for infringement-by-conspiracy.
The USPTO’s Patent Public Advisory Committee (PPAC) is an advisory board that advises the USPTO Director on management of the patent operations of the office, including policies, goals, budget, fees, and other office operations. PPAC members are appointed by the Secretary of Commerce – typically on nomination from the PTO Director. Although the PPAC has no direct power, the USPTO Director is bound by statute to at least consider its input.
Most recently, the Secretary of Commerce is in the process of naming Michelle Lee to the PPAC. Ms. Lee is Google’s Head of Patents and Patent Strategy. She was previously a clerk for former Federal Circuit Chief Judge Paul Michel and partner at Fenwick & West. She is a graduate of Stanford Law School (where she was a law review editor) and MIT (where she graduated at the top of her class with an electrical engineering degree). Google is becoming more and more involved in the patent law system. Probably most importantly for the company, Google has been sued hundreds of times for patent infringement. It has been those lawsuits that have pushed the company to call for patent reform that limits the “temptations and opportunities for abuse.” Google has also become a major patent holder – with over 1,000 issued patents and over 1,000 pending patent applications. Google has been active in the market for patents and a large number of its patents and patent applications were purchased from other companies. Last week, Google significantly upped its market profile by offering to $900 million to purchase bankrupty Nortel’s portfolio of 6,000 patents. In addition, Google has taken a lead in providing free access to patent data. Ms. Lee is filling the spot left by former PTO Deputy Director Steve Pinkos.
Earlier this year, the Secretary of Commerce appointed Esther Kepplinger and Wayne Sobon to the PPAC. Ms. Kepplenger was a longtime USPTO employee – spending five years as the Deputy Commissioner of Patents and is now a Wilson Sonsini’s “Chief Patent Counselor.” Mr. Sobon was Director of Intellectual Property for Accenture for many years, but recently took on the role of Chief IP Counsel for Rambus. At that time, Louis Foreman, Founder of Enventys, was also re-appointed to the board.
The following video features politician Charlie Crist apologizing to his body double David Byrne (Talking Heads) for using Byrne’s song to promote Crist’s campaign.
Crown Packaging Technology, Inc. v. Ball Metal Beverage Container Corporation (Fed. Cir. 2011) Download 10-1020 Panel: Newman, Dyk (dissent), Whyte (author)
For the past decade, the Federal Circuit has struggled to reconcile the the written description rules announced in its biotechnology-related opinions with the patentability requirements for patents in other technological fields. Particularly challenging for the court are the implications of a strong written description doctrine for mechanical inventions, which historically were subject to little scrutiny under the broad approach to the written description requirement.
Crown Packaging presents the latest iteration of the court's thinking on this issue. Penned by the highly regarded Judge Ronald M. Whyte of the Northern District of California, the opinion firmly lays to rest one possible argument for challenging mechanical patents on written description ground and confirms that the Problem-Solution approach to analyzing written description issues applied in Revolution Eyewear is alive and well post-Ariad. Given the depth of its treatment of the issue, this is an opinion that should go into every attorney's toolbag for addressing non-biotech related written description issues.
The patents at issue in Crown disclose a beverage can end that reduces the amount of metal wasted during the process of seaming the can end to the can body. (Picture a can of soda. The can end is the top portion that one drinks from. The can body is the part that contains the beverage.) The patents (which share a specification) solve the problem of reducing metal waste in two ways: first, by changing the angle of the vertical portion of the inside wall from nearly perpendicular to significantly angled, and second, by reducing width of the reinforcing bead (the little channel that runs along the inside of the can lip that tends to fill up with soda). Because simply reducing the width of the reinforcing bead can present structural challenges and result in unsightly scuffing, the patent also discloses a particular type of chuck (the portion of the seaming machinery that sits inside the top of the can against which the lip is rolled) that does not drive deeply into the reinforcing bead.
Figure 2 illustrates the prior art; Figure 5 is an embodiment of the invention. In the prior art can end, the peripheral walls are nearly vertical and the chuck (element 17) fully enters the reinforcing bead (element 15); in the embodiment of the invention, the walls are closer to 45 degrees and the chuck (element 31) does not enter the reinforcing bead (element 25).
Crown's two patents, one for a product and the other a method of manufacturing, include claims covering just the use of an angled wall without mentioning the narrow bead or penetration of the chuck. During the district court proceedings, Ball argued that these claims lacked written description support because they covered embodiments both in which the chuck was driven inside the reinforcing channel as well as embodiments in which the chuck was driven outside the bead despite only describing embodiments showing the latter in the specification. The district court agreed with Bell, granting summary judgment of invalidity.
Judge Whyte and Judge Newman disagreed with the district court. After dismissing the species-genus approach to these types of situations, the majority framed the issue in problem-solution terms. Relying on Revolution Eyeware, Inc. v. Aspex Eyewear, Inc., 563 F.3d 1358 (Fed. Cir. 2009), the court agreed with Crown that "[i]nventors can frame their claims to address one problem or several, and the written description requirement will be satisfied as to each claim as long as the description conveys that the inventor was in possession of the invention recited in the claim." Slip Op. at 13, quoting Revolution Eyewear at 1367. Here, there were two separate, clearly described solutions to the problem of improving metal useage: modifying the slope of the wall or limiting the width of the reinforcing bead. Nor does it matter that both solutions relate to the same problem: "we specifically held in Revolution Eyewear that it is a 'false premise that if the problems addressed by the invention are related, then a claim addressing only one of the problems is invalid for lack of sufficient written description." Slip. Op. at 14, quoting Revolution Eyewear at 1367. And the majority distinguished the issue of enablement from that of written description, concluding that Ball's argument relating to whether one of ordinary skill in the art could not seam a can with an increased sloped chuck wall without also avoiding contact with the reinforcing bead presented an issue of enablement, not written description.
One possible limitation on the majority's holding, however, is where the specification mandates that the prior art problems must always be solved together. Here, the specification did not so require – rather, "the specification supports the asserted claims that achieve metal savings by varying the slope of the chuck wall alone." Slip Op. at 15. Yet this will likely be an argument raised by future parties.
The Dissent Although agreeing with the majority on the reversal of the district court's grant of summary judgment of anticipation, Judge Dyk disagreed with its treatment of the written description issue. Judge Dyk's dissent rested on a different reading of Revolution:
Relying on Revolution Eyewear, the majority holds that the claims are valid. However, Revolution Eyewear, in holding that a claim may address only one of the purposes disclosed in the specification, still requires explicit disclosure of the embodiments in the claims: “Inventors can frame their claims to address one problem or several, and the written description requirement will be satisfied as to each claim as long as the description conveys that the inventor was in possession of the invention recited in that claim.” Revolution Eyewear, Inc. v. Aspex Eyewear, Inc., 563 F.3d 1358, 1367 (Fed. Cir. 2009) (emphasis added). Therefore, the claims, whether directed to solving a single problem or multiple problems, must still be grounded in the specification.
Thus in Judge Dyk's view, the claims lack written description:
There is no question that the specification does not teach combining the sloped can end wall together with the wider, prior art bead and driving the chuck into the bead instead of the sloped can end wall. That combination is a new and distinct invention, and our written description jurisprudence requires that it be described in the specification. The fact that the claims are broad enough to cover such an invention or imply that the claims cover such an invention is not sufficient when the invention itself is not described either in the claims or elsewhere in the specification. The failure of the specification to describe the invention requires invalidation of claims 50 and 52.
Commentary: I find it difficult to agree with Judge Dyk's distinguishing of Revolution Eyewear, which was decided on strikingly similar facts, or his deeper view of what constitutes an invention. In Revolution, the patent addressed two problems presented by prior-art magnetic sunglasses that attached to the frame of a pair of glasses: a frame strength problem, which the inventor solved by placing the magnets on protrusions extending from the primary and auxiliary frames, and a stability problem, which the inventor solved by having the protrusions extending from the auxiliary frame rest on top of protrusions extending from the primary frame. The asserted claim covered only the former: placing the magnets on protrusions, and did not include any limitations directed to the stability problem.
In rejecting the written description defense, the Revolution court pointed specifically to Figure 3 of the original patent, reproduced below:
This figure discloses only the combination embodiment: a primary frame with magnet-containing protrusions designed so that the auxiliary frame protrusions will rest on top (element 13/14 on the primary, 21/22 on the auxiliary). The court's opinion did not rely on any embodiments showing only magnet-containing projections without the stability component. Yet, under Judge Dyk's reasoning, such an embodiment could not provide the necessary written description support.
Moving into the abstract, Judge Dyk's view of the nature of an invention also seems problematic to me. Judge Dyk seems to be expressing the Louriean idea that "the invention" must be limited to the identical embodiments disclosed in the patent. Any alteration of those embodiments, such as combining one particular inventive idea disclosed in the patent with the prior art, renders the claim invalid. But this bright line rule ignores one of the underlying tensions in patent law, namely, that it is impossible to describe every single possible permutation of the invention. Patents don't need to specify, for example, that a particular device may be painted every color of the rainbow to provide written description support for a claim that contains no limitations as to color. Yet this seems to be the logical extension of the embodiment-only approach, and one that continues to be trouble me.
For the most part, government accountants do not care that the USPTO is fee-funded rather than taxpayer-funded. Thus, $100 million cut from the USPTO budget counts as $100 million cut from the federal budget. In the current budget climate, you can imagine where this is going.
It appears that the most recent federal budget compromise (H.R. 1473, the Full-Year Continuing Appropriations Act, 2011) would strip approximately $100 million from USPTO collected fees and divert that money to other federal programs. The proposed budget provision is written as follows:
Notwithstanding section 1101, the level for ”Department of Commerce, United States Patent and Trademark Office, Salaries and Expenses” shall be $2,090,000,000, to remain available until expended: Provided, That the sum herein appropriated from the general fund shall be reduced as offsetting collections assessed and collected pursuant to 15 U.S.C. 1113 and 35 U.S.C. 41 and 376 are received during fiscal year 2011, so as to result in a fiscal year 2011 appropriation from the general fund estimated at $0: Provided further, That during fiscal year 2011, should the total amount of offsetting fee collections be less than $2,090,000,000, this amount shall be reduced accordingly.
The USPTO currently expects to receive about $2.19 billion in fee collections for FY2011, but the bill would limit the Agency’s spending to $2.09 billion. That extra $100 million would then go to pay for other government expenditures. Although $100 million only about 5% of the USPTO’s annual budget, the cuts ask for $100 million from the next five months, which would represent a 10% cut in spending over that time period.
The AIPLA has continued to lobby congress to allow the USPTO to spend the fees that it collects. AIPLA executive director Todd Dickinson wrote “The ability of the Office to do an efficient and reliable job depends on these funds, none of which comes from Treasury or has any impact on reducing overall government spending.”
