California’s One-Sided Patent Regime: Litigating With Immunity

Patent

Biomedical Patent Management Corp. (BPMC) v. California Department of Health Services (on petition for certiorari)

BPMC’s patent infringement lawsuit against the California was dismissed after the state asserted immunity under the Eleventh Amendment of the US Constitution – a decision affirmed by the Federal Circuit. In its petition for certiorari, BPMC argues that the State has waived its immunity. BPMC presents two separate theories of waiver – one narrow and one broad. The narrow waiver theory focuses on the facts of this particular dispute – that California had previously voluntarily been a litigant in a case involving the same parties, same patent, and same infringing actions. The prior case was dismissed and then re-filed, but the state refused to participate in the second coming. The broader and more interesting waiver theory focuses on California’s deep and continued involvement in the patent system as a patent applicant, patent holder, patent plaintiff, and patent licensor. Particularly notable for this case is California’s extensive use of the Federal Courts to sue infringers. As posed by BPMC, the broad waiver question is: “Whether or in which circumstances a State may waive its Eleventh Amendment immunity in patent actions by regularly and voluntarily invoking federal jurisdiction to enforce its own patent rights.”

Before granting certiorari in patent cases, the Court often asks the Solicitor General to provide the US Government’s views on the petition. In a recent filing, the Solicitor General recommended that the petition for certiorari be denied. On the narrow waiver question, the Solicitor sees the facts as too narrow to warrant Supreme Court attention. The SG sees the broader question as “undeniably important.” However, the Solicitor sees the proposed focus on whether a state has “regularly and voluntarily invoked federal jurisdiction to enforce its own patent rights” as “unworkable.”

“Under petitioner’s proposed rule, it is not clear at what point a State would be deemed to have voluntarily participated in enough federal court patent suits to have waived its Eleventh Amendment immunity from all such suits. Nor is it evident how a State would know in advance when it was poised to cross the waiver threshold.”

The Solicitor also notes that most of the issues were resolved by Florida Prepaid cases. Although well written, the Solicitor’s brief is just that – brief.

There are several reasons why I do not believe that the SG’s opinion seriously diminishes the chances of being granted certiorari. First, [some]* patent cases in the past decade were granted certiorari despite a SG recommendation against the grant. Second, the Supreme Court has already shown interest in the case by asking for the SG’s recommendation, and the SG recognizes that the issue is important. Third, the SG’s arguments of unworkability and lack of clarity are rather weak. The brief is just that – brief – and does not address many underlying constitutional issues. Fourth, the Supreme Court has already focused on this issue and has experience. However – as the SG notes, the issue raised by BPMC is not directly covered by the court’s prior rulings.

BPMC’s counsel – Andrew Dhuey – indicated that the Supreme Court may consider the petition in its January 9th Conference.

Notes:

  

Patent Practitioner Ethics Update

Patent,

In a recent presentation, PTO Discipline Director Harry Moatz repeated his statements regarding a practitioner’s duty to make reasonably inquiry prior to submitting any papers to the USPTO. “Practitioners submitting papers must read each paper submitted to the Office before it is submitted. Each submitted paper must be read in its entirety … regardless of the source of the paper.” The duty of inquiry is codified in the Federal Regulations as 37 C.F.R. § 11.18(b). That section requires that submitted papers be submitted only for proper purposes and that any claims made be legally warranted. Section (b)(1) requires that all statement made be believed to be true and that no statement “covers up by any trick, scheme or device a material fact.” Section (b)(2) goes on to require that the person filing the paper actually make “an inquiry reasonable under the circumstances” to ensure that the paper is not being presented for any improper purpose and that the contentions are “warranted by existing law or by a nonfrivolous argument [to change] existing law.”

Mr. Moatz provides several examples that could be seen as failure to make a reasonable inquiry: (1) Filing an application with claims that are anticipated by at least one publication authored by one of the inventors. (2) Burying a reference material to patentability among a large number of cumulative references. (3) Filing an application with one or more claims unpatentable over a combination of prior art references cited by applicant in the specification.

37 CFR § 11.18 (b) By presenting to the Office or hearing officer in a disciplinary proceeding (whether by signing, filing, submitting, or later advocating) any paper, the party presenting such paper, whether a practitioner or non-practitioner, is certifying that—

(1) All statements made therein of the party’s own knowledge are true, all statements made therein on information and belief are believed to be true, and all statements made therein are made with the knowledge that whoever, in any matter within the jurisdiction of the Office, knowingly and willfully falsifies, conceals, or covers up by any trick, scheme, or device a material fact, or knowingly and willfully makes any false, fictitious, or fraudulent statements or representations, or knowingly and willfully makes or uses any false writing or document knowing the same to contain any false, fictitious, or fraudulent statement or entry, shall be subject to the penalties set forth under 18 U.S.C. 1001 and any other applicable criminal statute, and violations of the provisions of this section may jeopardize the probative value of the paper; and

(2) To the best of the party’s knowledge, information and belief, formed after an inquiry reasonable under the circumstances,

(i) The paper is not being presented for any improper purpose, such as to harass someone or to cause unnecessary delay or needless increase in the cost of any proceeding before the Office;

(ii) The other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;

(iii) The allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and

(iv) The denials of factual contentions are warranted on the evidence, or if specifically so identified, are reasonably based on a lack of information or belief.

In his presentation, Mr. Moatz listed the primary complaints that he receives against patent practitioners. They include:

  • Neglect.
  • Lack of candor (Either to client or the PTO).
  • Failure to make reasonably inquiry.
  • Failure or delay in filing application
  • Failure to respond to OA (even when client has not paid)
  • Misuse of the certificate of mailing
  • Insufficient funds
  • Failure to pay issue fee
  • Failure to revive
  • Failure to turn over files to new attorney
  • Failure to communicate with client

Additional reasons for ethical sanction include DUIs; unauthorized taking of prescription meds; and disbarment.  Under the new ethics rules (Aug 2008), a practitioner must notify the OED Director within 30 days of being convicted of “any” crime. The PTO will then determine whether the conviction is serious enough to merit interim suspension. Practitioner must also give notice of disbarment within 30 days.  The new rules also provide for “disability inactive status” when a practitioner is judged legally incompetent.

Notes:

Patently-O Bits and Bytes: Vote for Patently-O

Patent

The ABA is running its annual law blog popularity contest, and Patently-O again made the cut of top 100 legal blogs. Apparently, Patently-O is being voted on for the award of best “niche” blog. Unfortunately, I tend to avoid that word (niche) because I don’t want to sound too French (neesh) or too rural (nitch).

Follow the link to Vote for Patently-O (towards the bottom of the ballet) http://www.abajournal.com/blawgs/blawg100_2008/niche. (Only one vote per computer).

Patently-O Bits and Bytes: Vote for Patently-O

Patent

The ABA is running its annual law blog popularity contest, and Patently-O again made the cut of top 100 legal blogs. Apparently, Patently-O is being voted on for the award of best “niche” blog. Unfortunately, I tend to avoid that word (niche) because I don’t want to sound too French (neesh) or too rural (nitch).

Follow the link to Vote for Patently-O (towards the bottom of the ballet) http://www.abajournal.com/blawgs/blawg100_2008/niche. (Only one vote per computer).

Standard Setting and Waiver of Patent Rights

Patent

Qualcomm Inc. v. Broadcom Corp (Fed. Cir., Dec. 1, 2008)

“This patent infringement case involves the consequence of silence in the face of a duty to disclose patents in a standards-setting organization (“SSO”).”

Qualcomm participated in the “Joint Video Team” to set standards for video compression technology. During those meetings, Qualcomm did not disclose that it held two patents that covered technologies required to comply with the standards being developed.

Under participant agreements, however, disclosure was required to help ensure “a simple royalty free baseline profile.” And, under Rambus, even non-explicit disclosure requirements can create a duty to disclose patent rights during standard setting discussions.

Because the patentee intentionally failed to disclose its patents, the court agreed that the patents were unenforceable under the equitable doctrine of implied waiver. However, the court limited the scope of the waiver only to products that were compliant with the new (H.264) standard.

Notes:

  • The court cites Mark Lemley’s 2002 SSO paper

Constitutional Separation of Powers

Patent,

The structure of the US Constitutional is designed to separate governmental powers. In patent law, separation of powers issues continue to arise – largely because the executive branch (PTO) and the judicial branch (Federal Courts)* decide many of the same patent law issues. Post-grant procedures such as reexamination and reissue complicate the scene because those avenues allow for parallel decisionmaking by the two bodies. Notably, most inter partes reexaminations involve parallel patent infringement litigation. Usually, a district court will reach its result before the PTO, and questions then arise as to the PTO’s subsequent power to affirm or deny patentability.

Although it appears to be more of a statutory construction issue, BlackBoard recently sued the USPTO (Dudas) in a case involving these issues. Originally, BlackBoard sued Desire2Learn for patent infringement and Desire2Learn subsequently requested inter partes reexamination of the asserted patent. In February 2008, a Texas jury found the asserted claims valid** and infringed. (**i.e., not invalid). The District Court did not issue its final judgment until May 2008. That case is pending appeal at the Federal Circuit. In the meantime, in March 2008, the PTO issued an initial rejection of the claims and has, more recently, refused to end the reexamination.

Under 35 U.S.C. §317(b), an inter partes reexamination must be stopped by the PTO if the requestor’s invalidity argument is rejected in a civil action and a “final decision has been entered.”

FINAL DECISION – Once a final decision has been entered against a party in a civil action arising in whole or in part under section 1338 of title 28, that the party has not sustained its burden of proving the invalidity of any patent claim in suit … [then] an inter partes reexamination requested by that party or its privies on the basis of such issues may not thereafter be maintained by the Office, notwithstanding any other provision of this chapter. This subsection does not prevent the assertion of invalidity based on newly discovered prior art unavailable to the third-party requester and the Patent and Trademark Office at the time of the inter partes reexamination proceedings. 35 U.S.C. §317(b)

BlackBoard argues that the final decision by the Federal Court in Texas strips the PTO of authority to maintain the inter partes reexamination. The PTO, on the other hand, maintains that the litigation is not really final until Desire2Learn exhausts all appeals.

Notes:

  • In addition to the PTO and Courts, the International Trade Commission (ITC) is a third decisionmaking body that is considered a quasi-judicial governmental agency. There are some cases where the same patent and same parties have been simultaneously involved in disputes in all three forums.
  • BlackBoard complaint
  • Desire2Learn Patent Infringement Blog
  • As a work-around, Desire2Learn has its servers located Canada. The only valid BlackBoard claims are “method” claims, and, under RIM v. NTP, a method claim is only infringed if each step of the method is performed in the USA.

BPAI: “Programmed Computer Method” Not Patentable Subject Matter

Patent

Ex parte Halligan (BPAI 2008)

Halligan’s patent application claims a “programmed computer method” that operates to identify trade secret information. (Claim 119). In essence, the computer program has the common law rules of trade secrets hardcoded, and those rules are applied to determine whether particular information is a “trade secret.” Applying the machine-or-transformation test of Bilski, the Board of Patent Appeals and Interferences (BPAI) rejected Halligan’s claims as lacking patentable subject matter under 35 USC § 101.

Under Bilski, “[a] claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” To avoid preemption the Federal Circuit emphasized that “the use of a specific machine or transformation of an article must impose meaningful limits on the claim’s scope to impart patent-eligibility;” that “the involvement of the machine or transformation in the claimed process must not merely be insignificant extra-solution activity;” and that the transformation “must be central to the purpose of the claimed process.”

Transformation: As in Bilski, the transformation here involves legal rights and “does not represent physical and tangible objects.” Therefore, it fails the transformation prong of the test.

Machine: Claim 119’s only tie to a machine is the preamble statement that the method is a “programmed computer method.” The BPAI listed several reasons why that recitation is insufficient to satisfy the machine prong of Bilski:

“This recitation fails to impose any meaningful limits on the claim’s scope as it adds nothing more than a general purpose computer that has been programmed in an unspecified manner to implement the functional steps recited in the claims. Were the recitation of a “programmed computer” in combination with purely functional recitations of method steps, where the functions are implemented using an unspecified algorithm, sufficient to transform otherwise unpatentable method steps into a patent eligible process, this would exalt form over substance and would allow pre-emption of the fundamental principle present in the non-machine implemented method by the addition of the mere recitation of a “programmed computer.” Such a field-of-use limitation is insufficient to render an otherwise ineligible process claim patent eligible.”

Means-Plus-Function language: A second set of claims were directed to the “programmed computer.” Functional elements of the software were described as “means for ___.” The structure of a means plus function element is presumably particular enough to constitute a “particular machine.” However, the BPAI expressly did not reach that issue – rather, the Board rejected those claims under 35 USC § 112 as indefinite for lacking any description of particular structure in the specification. Following Aristocrat, the opinion noted that software-type means should include a disclosure of an algorithm. “The Appellant has failed to disclose any algorithm, and thus has failed to adequately describe sufficient structure, for performing the recited functions of claims 1 and 121 so as to render the claims definite.”

Notes:

   

Patently-O Bits and Bytes

Patent,
  • Poor Economic Forecast and Patent Prosecution:
    • Bad: Patent value is based on potential market for patented products when the market shrinks, so does the value of the patents;
    • Bad: Patent prosecution is generally a cash-heavy endeavor, and many firms are low on cash/credit;
    • Bad: The smaller market and lack of cash may also depress research & development expenditures – potentially leading to a time-lagged depression in patent applications.
    • Good: When times are tough, folks save their scraps. Patents are one way to do that;
    • Good: Patents are something that can be more easily sold or licensed (as compared with trade secrets, for instance). Companies looking for alternative cash streams; to sell-off portions of the corporation; or to retain some value in bankruptcy may look to patent protection.
  • I spent a summer at Heller Ehrman while in law school. The firm dissolved earlier this fall. Using Patent Buddy, I graphed the number of registered patent practitioners at Heller over the past several years. Their patent department shows problems stretching back to 2007.

  • Figure 2 below shows the same information for the law firm of Akin Gump. Patent Buddy’s data comes directly from the PTO’s enrollment database. That database is usually a bit outdated because many patent attorneys are slow to update their records.

   

  

Patently-O Bits and Bytes

Patent,
  • Poor Economic Forecast and Patent Prosecution:
    • Bad: Patent value is based on potential market for patented products when the market shrinks, so does the value of the patents;
    • Bad: Patent prosecution is generally a cash-heavy endeavor, and many firms are low on cash/credit;
    • Bad: The smaller market and lack of cash may also depress research & development expenditures – potentially leading to a time-lagged depression in patent applications.
    • Good: When times are tough, folks save their scraps. Patents are one way to do that;
    • Good: Patents are something that can be more easily sold or licensed (as compared with trade secrets, for instance). Companies looking for alternative cash streams; to sell-off portions of the corporation; or to retain some value in bankruptcy may look to patent protection.
  • I spent a summer at Heller Ehrman while in law school. The firm dissolved earlier this fall. Using Patent Buddy, I graphed the number of registered patent practitioners at Heller over the past several years. Their patent department shows problems stretching back to 2007.

  • Figure 2 below shows the same information for the law firm of Akin Gump. Patent Buddy’s data comes directly from the PTO’s enrollment database. That database is usually a bit outdated because many patent attorneys are slow to update their records.

 
 

  

Federal Circuit Internal Operating Procedure

Patent

The Court of Appeals for the Federal Circuit generally follows its own set of “internal operating procedures.” Although these are not citable rules, they do represent the usual standard practice for the court. The court provides them to the public to try to steer appellate practice away from a purely old boy system and allow the public to understand the court’s process. Transparency is especially important for the Federal Circuit. Although located in Washington DC, the court’s jurisdiction reaches across the nation. And, lawyers from across the country come to DC to argue on behalf of their clients. The Federal Circuit – especially Judge Michel – should be commended for its work toward a more open system that is more transparent than ever. The court has done an excellent job with its online public release of new opinions that provides equal access to new information. That system is especially important when a case involves a major product (such as a blockbuster pharmaceutical) of a publicly traded company. The audio files have also been useful for non-Washington insiders to understand the impact of particular oral arguments. The court is working on the next step –immediate online access to briefs and other pleadings.

Back to the new procedures: Anyone planning to practice before the court should read the internal operating procedures. In a recent update, the court provided two additional bits of information about its operation. The first statement describes the process of selecting three judge panels. According to the court, the three-judge panels are randomly selected, subject to the availability of each judge.

“The chief judge provides to the clerk’s office a list of judges that are available for each day of an argument session. The clerk’s office runs a computer program that randomly generates three-judge panels for each month, subject to the judges’ availability.”

The second new discussion in the IOP explains how pre-release precedential opinions are circulated to all Federal Circuit judges and the “senior technical assistant” prior to publication. Non-panel members have seven working days to provide comments or request that publication be held pending en banc poll.

“When all panel votes are in on a precedential opinion or order, the authoring judge circulates the opinion and any concurring or dissenting opinions, with a transmittal sheet, to each judge. A copy is also circulated to the senior technical assistant (STA), and the STA shall provide information on potential conflicts between the panel-approved opinion and any other prior opinions of the court or other relevant precedents. The nonpanel members of the court will have seven working days (twelve working days for opinions circulated during the summer period) to review a circulated precedential opinion or order. Nonpanel members may send comments to the authoring judge, to the panel, or to all judges. A nonpanel member judge in regular active service may submit a hold sheet pending a request for an en banc poll. Absent transmittal of a hold sheet or a request for an en banc poll during the circulation period, the authoring judge sends the opinion, and any concurring or dissenting opinions, to the ASO for copying and delivery to the clerk for issuance.”

Notes:

  • Revised IOP [PDF file]
  • Mark Davies Book on Federal Circuit Appellate Procedure:

Federal Circuit Internal Operating Procedure

Patent

The Court of Appeals for the Federal Circuit generally follows its own set of “internal operating procedures.” Although these are not citable rules, they do represent the usual standard practice for the court. The court provides them to the public to try to steer appellate practice away from a purely old boy system and allow the public to understand the court’s process. Transparency is especially important for the Federal Circuit. Although located in Washington DC, the court’s jurisdiction reaches across the nation. And, lawyers from across the country come to DC to argue on behalf of their clients. The Federal Circuit – especially Judge Michel – should be commended for its work toward a more open system that is more transparent than ever. The court has done an excellent job with its online public release of new opinions that provides equal access to new information. That system is especially important when a case involves a major product (such as a blockbuster pharmaceutical) of a publicly traded company. The audio files have also been useful for non-Washington insiders to understand the impact of particular oral arguments. The court is working on the next step –immediate online access to briefs and other pleadings.

Back to the new procedures: Anyone planning to practice before the court should read the internal operating procedures. In a recent update, the court provided two additional bits of information about its operation. The first statement describes the process of selecting three judge panels. According to the court, the three-judge panels are randomly selected, subject to the availability of each judge.

“The chief judge provides to the clerk’s office a list of judges that are available for each day of an argument session. The clerk’s office runs a computer program that randomly generates three-judge panels for each month, subject to the judges’ availability.”

The second new discussion in the IOP explains how pre-release precedential opinions are circulated to all Federal Circuit judges and the “senior technical assistant” prior to publication. Non-panel members have seven working days to provide comments or request that publication be held pending en banc poll.

“When all panel votes are in on a precedential opinion or order, the authoring judge circulates the opinion and any concurring or dissenting opinions, with a transmittal sheet, to each judge. A copy is also circulated to the senior technical assistant (STA), and the STA shall provide information on potential conflicts between the panel-approved opinion and any other prior opinions of the court or other relevant precedents. The nonpanel members of the court will have seven working days (twelve working days for opinions circulated during the summer period) to review a circulated precedential opinion or order. Nonpanel members may send comments to the authoring judge, to the panel, or to all judges. A nonpanel member judge in regular active service may submit a hold sheet pending a request for an en banc poll. Absent transmittal of a hold sheet or a request for an en banc poll during the circulation period, the authoring judge sends the opinion, and any concurring or dissenting opinions, to the ASO for copying and delivery to the clerk for issuance.”

Notes:

  • Revised IOP [PDF file]
  • Mark Davies Book on Federal Circuit Appellate Procedure:

Patent

Leader Tech v. Facebook (D.D.E. 2008)

On November 19, Leader Tech sued Facebook for patent infringement of its U.S. Patent No. 7,139,761. The ‘761 patent claims priority to a provisional application filed in December 2002 – well before Facebook’s 2004 launch. The patent claims are difficult for me to understand:

1. A computer-implemented network-based system that facilitates management of data, comprising:

  • a computer-implemented context component of the network-based system for capturing context information associated with user-defined data created by user interaction of a user in a first context of the network-based system, the context component dynamically storing the context information in metadata associated with the user-defined data, the user-defined data and metadata stored on a storage component of the network-based system; and
  • a computer-implemented tracking component of the network-based system for tracking a change of the user from the first context to a second context of the network-based system and dynamically updating the stored metadata based on the change, wherein the user accesses the data from the second context.

Facebook has also been sued for patent infringement by PA Advisors (Patent No. 6,199,067; dismissed with consent of parties) and Cross Atlantic Capital Partners (Patent No. 6,519,629; Litigation stayed pending reexamination).

Rewarding Breakthrough Innovation

Patent

I understand that design patents are worth only a fraction of their utility patent namesakes. Each year, the number of design patent applications are only a small fraction of the number of utility patent applications filed., and design patents are – on average – less valuable than utility patents.

I do believe that utility patent law can learn something from design patent law. Let’s start with the recent en banc design patent case of Egyptian Goddess v. Swisa. In that case, the Federal Circuit defined the meaning of “infringement” of a design patent. The test created by the court looks to whether an “ordinary observer” who is “familiar with the prior art” would find an accused design “substantially similar” to the patented design. Thus, the test looks for substantial similarity in the context of the prior art.

“When the differences between the claimed and accused design are viewed in light of the prior art, the attention of the hypothetical ordinary observer will be drawn to those aspects of the claimed design that differ from the prior art. And when the claimed design is close to the prior art designs, small differences between the accused design and the claimed design are likely to be important to the eye of the hypothetical ordinary observer.”

Another way of interpreting the Egyptian Goddess test is that the scope of infringement varies inversely with the scope of prior art. When a patented design is in a field crowded with similar prior designs, the only infringing designs will be those that are strikingly similar to the patented design yet different from the prior art. Alternatively, when the patented design stands alone as a breakthrough design, the potential variety of infringing activity actually increases.

I like the idea of rewarding breakthrough innovations that go beyond ordinary invention. Here, Egyptian Goddess does that by increasing the potential claim scope when the invention goes well beyond the prior art. The question here is whether the law of utility patents can be arranged to likewise provide the best rewards for the most innovative creations.

Citation of law review articles

Patent

Citation of law review articles. On a lark, I looked at the table of authorities for about two hundred party briefs filed in the past six months at the Federal Circuit.  These briefs each cited many cases and statutes.  Notably absent, however, were cites to law review articles. Out of the two hundred briefs, only two law review articles were cited — three if you count a citation to John Duffy’s Patently-O Patent L.J. article. The famous articles:

  • Jeffrey S. Dillen, DNA Patentability – Anything But Obvious, 1997 Wis. L. Rev. 1023 (1997)
  • John F. Duffy, Are Administrative Patent Judges Unconstitutional?, 2007 Patently-O Patent L.J. 21.
  • Mark A. Lemley et al., Divided Infringement Claims, 33 AIPLA Q.J. 225(2005).

This result goes along with the rule of thumb for Federal Circuit appellate briefs — cite only Federal Circuit cases unless you have a compelling reason to do otherwise.

Patently-O Bits and Bytes No. 78

Patent
  • FTC Hearings on the “evolving IP marketplace” http://www.ftc.gov/opa/2008/11/ipmarketplace.shtm. December 5. How it will play out: In the next year, the FTC will likely publish a new report on the state of patent law in the US. That report will serve as the basis for any patent reform measures in 2010.
  • Interesting article by Jim Klaiber in IP Today. He writes about a recent nonprecedential CAFC that seemingly expanded the limitations on claim amendments during reexamination. His piece is titled: Reexamination Amendments Made for an Improper Purpose – A New Basis For Invalidity Under 35 U.S.C. § 305.
  • I am now on twitter: http://twitter.com/patentlyo. tweet tweet.
  • The Federal District Courts in New Jersey are contemplating new local patent rules. IPO offers its “six principles” for local patent rules:
    • (1) early identification and mutual mandatory disclosure of essential infringement and validity-related discovery and consideration of staying non-essential discovery until after a claim construction decision is issued in a case;
    • (2) early disclosure and appropriate staging of detailed infringement and invalidity contentions;
    • (3) early supplementation of detailed infringement and invalidity contentions supported by identification of specific evidence produced in the early mandatory disclosures;
    • (4) scheduling any claim construction procedure early in the case but after detailed contentions have been exchanged;
    • (5) identification of claim limitations most important to the outcome of the case; and
    • (6) consideration of dispositive motions as early as appropriate to narrow issues or resolve cases without non-essential discovery.
  • TIME: Best Inventions of 2008
  • Wish List 2008: For the past few years, I have assembled a top-ten list of holiday gifts for patent attorneys and agents. I have heard from several spouses that actually used the list. So – let Santa’s helper (me) know if there are any particular machines or articles that should make the list.

Patently-O Bits and Bytes No. 78

Patent
  • FTC Hearings on the “evolving IP marketplace” http://www.ftc.gov/opa/2008/11/ipmarketplace.shtm. December 5. How it will play out: In the next year, the FTC will likely publish a new report on the state of patent law in the US. That report will serve as the basis for any patent reform measures in 2010.
  • Interesting article by Jim Klaiber in IP Today. He writes about a recent nonprecedential CAFC that seemingly expanded the limitations on claim amendments during reexamination. His piece is titled: Reexamination Amendments Made for an Improper Purpose – A New Basis For Invalidity Under 35 U.S.C. § 305.
  • I am now on twitter: http://twitter.com/patentlyo. tweet tweet.
  • The Federal District Courts in New Jersey are contemplating new local patent rules. IPO offers its “six principles” for local patent rules:
    • (1) early identification and mutual mandatory disclosure of essential infringement and validity-related discovery and consideration of staying non-essential discovery until after a claim construction decision is issued in a case;
    • (2) early disclosure and appropriate staging of detailed infringement and invalidity contentions;
    • (3) early supplementation of detailed infringement and invalidity contentions supported by identification of specific evidence produced in the early mandatory disclosures;
    • (4) scheduling any claim construction procedure early in the case but after detailed contentions have been exchanged;
    • (5) identification of claim limitations most important to the outcome of the case; and
    • (6) consideration of dispositive motions as early as appropriate to narrow issues or resolve cases without non-essential discovery.
  • TIME: Best Inventions of 2008
  • Wish List 2008: For the past few years, I have assembled a top-ten list of holiday gifts for patent attorneys and agents. I have heard from several spouses that actually used the list. So – let Santa’s helper (me) know if there are any particular machines or articles that should make the list.

Software Method Claims: Bilski in light of Benson

Patent,

In re Bilski and Gottschalk v. Benson

It is important to remember that the Supreme Court’s decision in Gottschalk v. Benson is still controlling law. In that 1972 decision, the Supreme Court held unpatentable a method of converting a signal from “binary coded decimal” into “binary.” The Benson method operates by using a “reentrant shift register” – a particular electronic memory circuit of the day. The rejected claim reads as follows:

8. The method of converting signals from binary coded decimal form into binary which comprises the steps of:

  • storing the binary coded decimal signals in a reentrant shift register,
  • shifting the signals to the right by at least three places, until there is a binary `1′ in the second position of said register,
  • masking out said binary `1′ in said second position of said register,
  • adding a binary `1′ to the first position of said register,
  • shifting the signals to the left by two positions,
  • adding a `1′ to said first position, and
  • shifting the signals to the right by at least three positions in preparation for a succeeding binary `1′ in the second position of said register.

In Bilski, the en banc court struggles with Benson because – on its face – the rejected Claim 8 from Benson satisfies the machine-or-transformation test of Bilski. The claimed BCD conversion method is tied to a particular machine. The Bilski majority admits as much: “the claimed process operated on a machine, a digital computer, but was still held to be ineligible subject matter.” According to the en banc panel however Benson’s claim still fails the machine-or-transformation test because the claimed physical limits were “not actually limiting.” In particular, since the only uses of the BCD converter would be on a computer, tying the claims to a computer offered no practical limitation to the otherwise preemptive claim of an algorithm.

“[I]n Benson, the limitations tying the process to a computer were not actually limiting because the fundamental principle at issue, a particular algorithm, had no utility other than operating on a digital computer.”

Thus under Bilski/Benson, tying a software algorithm to particular computer hardware may well be unpatentable subject matter if the patent would still preclude all practical uses of the otherwise unpatentable algorithm.

Notes:

  • Patently-Unobvious suggests that careful drafting could have avoided the whole problem for Benson: “If only the inventors had been less forthcoming, more obtuse, and called their claim a method for operating a shift register, who would have seen that the machine-implemented signal processing method surprisingly also happens to convert a binary coded decimal signal into a binary coded one?”

NonObviousness: Analogous Arts Test Still Strong

Patent,

Andersen v. Pella (Fed. Cir. 2008)(non-precedential)

Andersen sued Pella and WL Gore for infringement of its window screen patent. Apparently, the patented screen allows ventilation and blocks insects, but is easier to see through than traditional screens. The claims focus on the diameter and strength of the screen wires and as well as on the screen’s “transmittance” and “reflectance” properties.

Prior to KSR, the district court had rejected the defendant’s summary judgment motions on obviousness – finding that the prior art references lacked a motivation to combine. After KSR, the district court reversed course – this time granting summary judgment of invalidity based on obviousness of the claimed screen. In its analysis, the district court asked and answered the following question: “would an insect screen manufacturer of ordinary skill have found it obvious to use the [prior art] screening material, decrease its reflectance value, bond it, and place it in a window frame? The answer, plain and simple is ‘Yes.'” According to the lower court, the prior art mesh was the “heart” of the claimed invention, and it was a “simple act of common sense” to slightly modify the mesh and apply it to a window. Although secondary factors of nonobviousness were shown, the lower court found they were not enough to rebut a strong showing of obviousness.

Analogous Arts: On appeal, the Federal Circuit vacated – finding material facts that prevent summary judgment of obviousness. In particular, the appellate panel found that the prior art mesh might not count as nonobviousness type prior art because it “outside the scope and content of the prior art.” The court based its decision on three issues: (1) the prior mesh was not in the same “insect screen manufacturing field”; (2) there was some evidence that the prior mesh would not be useable for an insect screen (teaching away); and (3) the PTO specifically considered the reference before granting the patent and should be given some deference.

Upon our review of the record in the light most favorable to Andersen, we find support adequate to overcome summary judgment on the question of whether the TWP mesh was outside the scope and content of the prior art. Andersen put forth evidence in the record that, one, the TWP mesh was not part of the insect screen manufacturing field, and, two, an insect screen manufacturer would have read the prior art to teach away from using a mesh with the characteristics possessed by the TWP mesh. This field-of-invention and teaching-away evidence, combined with the deference owed to the PTO’s issuance of this patent after reviewing the same prior art references that form the basis of this obviousness challenge, raises a genuine issue of material fact as to whether an ordinarily skilled insect screen designer would have found the combination of the TWP mesh with the other prior art references obvious.

Teaching away and price feasibility: One of the ‘teaching away’ arguments accepted by the Federal Circuit was that of price infeasibility. Andersen had argued that the prior mesh would not have been considered by a designer because it was quite “extraordinarily expensive.” In its holding, the appellate panel gave backing to the notion that a high price would discourage consideration of a potential prior art reference.

As to the third characteristic, pricing, Andersen’s expert, Laurence Armstrong, stated that the TWP mesh was “extraordinarily expensive in comparison with traditional insect screen material, costing about $75.00 per square foot.” It is not unreasonable to suggest that a significant difference in cost could discourage an insect screen designer from using the more expensive mesh. . . . On the whole, we think, the record creates a genuine issue of material fact as to whether the durability, transparency, and pricing of the TWP mesh would have discouraged an ordinarily skilled artisan from incorporating the mesh into an insect screen.

Summary judgment vacated.

New PPAC Members

Patent

The Secretary of Commerce (with the advice of the PTO Director) has named three new member of the Patent Public Advisory Committee (PPAC): Marc Adler; Stephen Pinkos; and Maureen Toohey. Mr. Adler is well known in the patent community as the past president of both the IPO and the ACPC. Adler has called for patent quality reforms that put more responsibilities on both the PTO and Applicants. Stephen Pinkos is a former deputy director of the PTO where he managed daily operations of the office. Maureen Toohey has her own law firm in Boston. She has apparently represented Dean Kamen in the past and clerked for Judge Rader.

The committee’s purpose is to advise the PTO Director on the management of operations of the Office. The nine-member PPAC is on a three-year rotating schedule. Each year three new members are appointed. For each day of actual service, the PPAC members will be paid the equivalent of an Executive Level III salary (annual rate of about $150,000).

Patently-O Bits and Bytes No. 77

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