Intellectual Property in a Public Health Crisis

Academic Studies, Articles and Publications, Patent

On Friday, I will be speaking at the Seton Hall Law Review’s Health Law Symposium. This year’s topic is focused: Preparing for a Pharmaceutical Response to Pandemic Influenza. [LINK] A portion of my talk will focus on how patent law may react during a public health crisis.

The reality is that in a pandemic situation, the patent rights covering important treatments will be ignored. Under TRIPS, during a national emergency would-be patent infringement becomes a legitimate unauthorized use. At some later point, the patent holder should receive payment based on “the economic value of the authorization.” In all likelihood, however, that ex-post payment will be a small fraction of the potential monopoly profits that could have been earned.

There are several legal avenues to allow “unauthorized use” in the US. One avenue is by denying injunctive relief. Even before eBay, no court would order an injunction in the face of a public health crisis that could be mitigated by allowing infringement. The test for injunctive relief specifically looks to the public interest. And here, easy access to treatments would weigh heavily in the public interest. Further, a patentee has no right to injunctive relief if the infringer is the US Government. 28 U.S.C. §1498. Thus, another avenue for unauthorized use is through direct government intervention. In 2001, Congress and the Administration were reported to have seriously considered “breaking” Bayer’s patent on Cipro in order to stockpile the drug against a potential anthrax attack. In the Cipro case, the Government apparently used the threat of breaking the patent to negotiate a long-term contract with Bayer at an unusually low price. This approach might be termed ‘bending’ the patent. Individual states within the US may also apply pressure and threat of unauthorized use while retaining immunity from suit under the 11th Amendment of the Constitution.

What Incentive?: We all understand that governments will not be able to avoid the temptation of breaking (or bending) patents covering important treatments that may be useful in some future crisis. Unfortunately, this prediction of the likely future greatly diminishes today’s incentives to innovate crisis-specific treatments. Many empirical questions remain: Will the ex post compensation be a sufficient incentive to innovate? Will the most valuable treatments have non-crisis uses where patent rights will operate more normally? Are the potential crises so well defined that a grant or prize system could work better?

Notes:

  • The tables below show patenting and patent application data for patents relating to influenza (search influenz$). For applications filed in 2001, almost 2,500 have been published. Less than 50% of those published applications have issued as patents in the seven year interim. Although we will never be sure, it looks like a little under 20% of the “influenza” applications filed in 2001 kept secret rather than publishing.

  • The next chart shows the average number of non-patent references cited in the influenza patents as compared to patents in general.

PatentLawPic533PatentLawPic532   

Rethinking the four ‘factors’ of preliminary injunctive relief

Injunctions, Patent, Patent Cases 2008

Abbott Laboratories v. Sandoz, Inc., (Fed. Cir. 2008)(Newman, J.)

Preliminary injunctions decisions are blessed with their own four-factor equitable test. I like to think of the test as having two required elements (likelihood of success on the merits and potential irreparable harm) and two optional factors (balance of the equities and public interest). A preliminary injunction (PI) will only issue when (1) the first two elements are demonstrated by the patentee and (2) the combined result of all four elements/factors weighs in favor of a PI.

The district court granted a preliminary injunction to Abbott to stop Sandoz from making or selling a generic version of its extended release clarithromycin antibiotic. In 75 pages of split opinion, the Federal Circuit affirmed with Judge Newman writing the majority opinion; Senior Judge Archer signing-on except for the two juicy parts: I and VI; and Judge Gajarsa in vigorous dissent.

The dispute revolves around the meaning of the required PI element of ‘likelihood of success on the merits.’ To win on this element, the patentee typically needs to provide evidence of infringement of at least one valid claim. Often this element turns on the defendant’s rebuttal proof of invalidity. Here, the defendant provided some evidence of potential invalidity, but not conclusive evidence. Thus, while the defendant did raise a substantial question of the vulnerability of the patent, it did not provide any clear and convincing evidence of invalidity.

Judge Gajarsa argued that Federal Circuit precedent requires a PI be denied when substantial questions of validity are raised. This standard is exemplified in the Federal Circuit’s recent Erico decision – which found the threshold “substantial question” met by evidence which simply “cast[s] doubt on the validity” of the asserted claims.

Judge Gajarsa: “Under our precedent, the likelihood of success factor is properly analyzed by considering whether the alleged infringer raises a substantial question as to validity.”

 

On the other side, Judge Newman argues that a patentee may still be likely to succeed on the merits even when vulnerabilities and substantial invalidity questions are raised by the defense.

Judge Newman: “The question is not whether the patent is vulnerable; the question is who is likely to prevail in the end, considered with equitable factors that relate to whether the status quo should or should not be preserved while the trial is ongoing. The presentation of sufficient evidence to show the likelihood of prevailing on the merits is quite different from the presentation of substantial evidence to show vulnerability. “

Both sides are well supported by conflicting precedent, and this case may well be a good vehicle for an en banc discussion of preliminary injunctive relief.

Anticipation Requires More Than Disclosing All the Elements

Anticipation, Means Plus Function, Patent, Patent Cases 2008, ,

Net MoneyIn v. Verisign (Fed. Cir. 2008)

NMI sued Verisign and others for infringing its credit card processing patent. One of NMI’s claims was found anticipated by a single prior art reference. That reference taught each element in the invalidated claim. However, there was no single example that taught all the elements together.

On appeal, the Federal Circuit reversed – holding that anticipation takes more than simply locating each element within the four corners of a single document.

In its rebuttal, the appellate panel focused on the concept anticipating the invention. To anticipate, the prior art must teach all the claim elements and the claimed arrangement.

Section 102 embodies the concept of novelty—if a device or process has been previously invented (and disclosed to the public), then it is not new, and therefore the claimed invention is “anticipated” by the prior invention. . . . Because the hallmark of anticipation is prior invention, the prior art reference—in order to anticipate under 35 U.S.C. § 102—must not only disclose all elements of the claim within the four corners of the document, but must also disclose those elements “arranged as in the claim.”

Focusing for a moment on arrangement – to anticipate, the reference must teach “all of the limitations arranged or combined in the same way as recited in the claim.”

Applying the rule to this case, the appellate panel found that the prior art reference was not anticipating. The reference disclosed two transaction protocols, but neither protocol contained all of the elements combined in the manner claimed. “Thus, although the iKP reference might anticipate a claim directed to either of the two protocols disclosed, it cannot anticipate the system of claim 23. The district court was wrong to conclude otherwise.”

Means Plus Function: After claim construction, the district court also found NMI’s means-plus-function claims invalid because they lacked any corresponding structure in the specification. On appeal, the Federal Circuit affirmed.

The patent statute allows patentees to draft claims in more generic ‘means plus function’ language. That language allows a patentee claim various elements based on their function. However, means plus function claims are only valid if the specification describes some structure to carry out the proposed function. According to the courts, this structure requirement is separate from any enablement requirement. Thus, some structure must be provided in the specification even if one skilled in the art would not need that disclosure to make the invention.

Here, NMI claimed a “[a bank computer including] means for generating an authorization indicia” but did not provide any corresponding structure in the specification to perform that structure.

On appeal, NMI incredibly argued that the claim was not a means-plus-function claim. The Federal Circuit disagreed – finding that the claim lacks structure.

Searching for structure in the specification, NMI pointed to its recitation of a “bank computer.” Of course that recitation is insufficient.

‘To avoid purely functional claiming in cases involving computer-implemented inventions, we have “consistently required that the structure disclosed in the specification be more than simply a general purpose computer or microprocessor.” Quoting Aristocrat

…

Consequently, a means-plus-function claim element for which the only disclosed structure is a general purpose computer is invalid if the specification fails to disclose an algorithm for performing the claimed function.

Holding of MPF claim invalidity affirmed.

Judge Improperly Cut Patentee’s Million Dollar Jury Verdict Without Offering a New Trial

Damages, Patent, Patent Cases 2008

Minks v. Polaris (Fed. Cir. 2008)

Floyd Minks won a jury verdict of $1.3 million based on a judgment of infringement by Polaris. The district court slashed that award by 95% — finding that Minks was adequately compensated by $27,000 in damages and $117,000 in attorney fees and an extra $27,000 for willfulness. On appeal, the Federal Circuit vacated the reduction in damages based on a procedural issue.

As a safety device, many all-terrain vehicles (ATVs) include a reverse-direction governor to prevent operating the vehicle at high speeds while driving backwards. The Minks patent covers a particular type of electronic governor to accomplish this goal.

Through his company, Minks Engineering, Minks designed the electronic governor for Polaris and also patented the design. Later, Polaris found a cheaper vender with a redesigned governor. At that point, Minks sued for infringement.

After the $1.3 million dollar verdict, the district court granted the Polaris motion for a reduction of the damage award “as a matter of law” under Fed. R. Civ. Pro. 50.

In the appeal, the Federal Circuit agreed that some reduction may be proper. However, the appellate panel held the Seventh Amendment of the US Constitution requires that a new trial on damages as a prerequisite to any reduction.

“The issue before us on appeal is whether the Seventh Amendment required the district court to offer Minks the option of a new trial in lieu of accepting the reduced damages award”

The fact-law distinction found throughout patent law is important because of Seventh Amendment’s high regard for factual decisions by a jury. The “reexamination clause” of the Seventh Amendment reads as follows: “no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of common law.” Here, the damage amount is a factual inquiry, and the Seventh Amendment has been interpreted to usually require that a district court offer a new trial on damages as an option when considering setting aside an excessive jury award.

The Eleventh Circuit (where this case arose) allows a judge to reduce a jury verdict without offering a new trial in the limited case where the error was a “legal error” as opposed to an error in adjudging a factual issue. Here, however, the error was in the jury’s determination of the number of infringing sales, royalty base, and royalty rate – all factual issues.

“A comparison of the Georgia-Pacific factors and the standard of a hypothetical negotiation to the evidence of record in this case makes clear that the district court’s reduction of compensatory damages necessarily amounted to an assessment of the sufficiency of the evidence, and as such, the option of a new trial was required.”

This case is in tension with Tronzo v. Biomet (Fed. Cir. 2001). In that opinion, the Federal Circuit agreed that a new trial was not necessary even though the district court had reduced compensatory damages from seven million dollars to only five hundred dollars. The distinction may be that in Tronzo, the reduction was a legal issue because the patentee had presented no credible damages evidence. Here Minks presented at least “limited evidence” of damages.

Vacated and remanded for a new trial on damages.

Protecting Design Patents on Shoes

Design Patent, Patent

Nike v. Wal-Mart (N.D. Ill. 2008)

Nike has sued Wal-Mart for design patent infringement asserting infringement of Pat Nos. D498,914 and D499,248. As with many design patent lawsuits, the patentee here (Nike) also makes a product covered by the design. Design patents have become more important to Nike as the company’s trademark ‘swoosh’ has been less prominent in recent shoe designs. Every year during the past decade, Nike has ranked in the top ten owners of newly issued design patents. 

Damages for design patent infringement may be calculated a few different ways. Section 284 calls for compensatory damages with a base of a “reasonable royalty.” Section 289 looks to disgorge profits from the infringer.

In the late 1990’s, Nike won another shoe design patent case against Wal-Mart. In a damages appeal, the Federal Circuit found that Nike had not properly marked its products — holding that to take advantage of the marking statute, a patentee must prove “that substantially all of the products being distributed were marked, and that the marking was substantially consistent and continuous.” Nike Inc. v. Wal-Mart Stores, 138 F.3d 1437 (Fed. Cir. 1998) (Newman).

Notes:

  • The top image is a portion of the infringement claim chart from the complaint. The second (pink) image is a Nike shoe.
  • First seen on Patent Hawk
  • Nike Complaint

Does the Piracy Paradox apply for Patents?

Academic Studies, Articles and Publications, Patent

A 2006 paper by Kal Raustiala (UCLA) and Chris Sprigman (UVA) titled the Piracy Paradox discusses intellectual property and the fashion industry. The authors conclude that the legal ability of manufacturers to create knock-off versions of fashion designs actually promotes innovation and investment in that industry. Similar phenomena have been explained in other industries. In music, for instance, some studies have shown that peer-to-peer file sharing of copyrighted work actually increases sales because of the increased popularity of the artist. Since the dawn of radio, record companies have paid stations to broadcast their music – even though the broadcast would be considered infringement.

My question is whether there are patent specific examples of this process going on? Are there times when ‘piracy’ of a technology actually encourages further R&D?

Patently-O Bits and Bytes: Partners, Events, and Jobs

Patent,

New Partners at the Patently-O Job Board:

  • Invention Analysis & Claiming Strategies Seminar. Register for Ron Slusky’s unique program for patent prosecutors and receive a $50 discount as a Patently-O reader. The conference offers 13 hours of accredited CLE. Discount code: PO50. The seminar presents principles that enable patent prosecutors to better identify the broad inventive concept and its fallback features and to develop a suite of claims that will maximize the patent’s value to the patent owner.
  • Expert Consultant and Analytical Services. Scitemex, a provider of technology and litigation support, is now a sponsor of the Patently-O Job Board.
  • Michael Heath is working one-on-one with Patently-O Job Board readers to help link employers and employees.
  • American Conference Institute (ACI) has an updated list of conferences. One recently added is a conference on High Tech Patent Prosecution.

Other upcoming events:

Recent Job Postings:

Federal Circuit Finds No Antitrust Liability for Hatch-Waxman Reverse Payment Settlements

Patent,

In re Ciprofloxacin Hydrochloride Antitrust Litigation (Fed. Cir. 2008)

Bayer’s patent on Cipro was challenged by Barr. However, the parties settled on the eve of trial. In all, Bayer paid $398 million to Barr to ensure that it didn’t receive a judgment of invalidity or unenforceability. Subsequently, Bayer filed for reexam to ensure that there would not be a later inequitable conduct problem. When other companies later challenged the patent, it was repeatedly found valid.

To many, the Barr settlement looked like a way to prop-up the drug price at the expense of consumers, health insurance companies. Various groups filed suit – arguing violations of Sections 1 and 2 of the Sherman Act and violations of state antitrust and consumer protection laws.

On summary judgment, the Federal District Court in New York applied a rule of reason to find no antitrust violations as follows:

  1. The relevant market is CIPRO and Bayer had market power in that market.
  2. However, any “adverse effects on competition” due to the settlement could not create antitrust violations because the settlement was “within the exclusionary zone of the ‘444 patent.”

In its holding, the district court rejected the notion that the “exclusionary zone” would be narrowed or altered by the potential invalidity of the patent. Furthermore, the district court held that unenforceability due to prosecution misconduct cannot be the subject to a Walker-Process antitrust violation – rather, the misconduct must be market-based misconduct. And, the Walker-Process argument failed because Bayer later successful litigation showed that its approach with Barr was not a ‘sham.’

On appeal, the Federal Circuit affirmed the summary judgment in favor of the pharmaceutical companies.

Per Se vs Rule of Reason: Some activities are considered so pernicious that they will be considered per se violations of the Sherman Act. Most actions, however, are judged under the rule of reason to determine if the particular activities had a potentially pro competitive impact. Here, the federal circuit could find no basis for “confidently predict[ing]” that such reverse-payment settlement agreements were unlawful – and consequently should be judged under the rule of reason.

Patents and Antitrust: Patents lead to anticompetitive behavior – that is the nature of the right to exclude. A patentee will not have antitrust liability for activity within the “zone of exclusion” of its patent. On appeal, the Federal Circuit agreed that the reverse payment was within the zone of exclusion.

Reverse Payments: In patents, a reverse payment is a payment by a patentee to an accused infringer to end litigation and perhaps to keep the infringer off the market. Remember, typically, it is the patentee who is looking for damages, not seeking to pay. The plaintiffs argued that such a reverse payment could not be considered within the ordinary scope of patentee behavior. The appellate court disagreed, finding that through the payment, Bayer was protecting its market share in its patented product and thus was well within its rights.

Pursuant to the Agreements, the generic defendants agreed not to market a generic version of Cipro until the ‘444 patent expired and not to challenge the validity of the ‘444 patent, and Bayer agreed to make payments and optionally supply Cipro for resale. Thus, the essence of the Agreements was to exclude the defendants from profiting from the patented invention. This is well within Bayer’s rights as the patentee. . . .

A settlement is not unlawful if it serves to protect that to which the patent holder is legally entitled—a monopoly over the manufacture and distribution of the patented invention.

In addition, the court found that settlements are favored even when anti-competitive.

Furthermore, there is a long-standing policy in the law in favor of settlements, and this policy extends to patent infringement litigation. Settlement of patent claims by agreement between the parties—including exchange of consideration—rather than by litigation is not precluded by the Sherman Act even though it may have some adverse effects on competition.

And, settlements normally include a promise not to challenge validity – something allowed under antitrust laws:

Settlements in patent cases, however, frequently provide that the alleged infringer will not challenge the validity of the patent. Thus, the mere fact that the Agreements insulated Bayer from patent validity challenges by the generic defendants was not in itself an antitrust violation.

Affirmed

Notes

  • On the panel were Circuit Judges Schall and Prost and Judge Ward from the Eastern District of Texas sitting by designation. The opinion was written by Judge Prost.
  • Expect petitions for en banc hearing and certiorari. The reverse payment issue has been brewing for some time.
  • During the post-9/11 anthrax scares, the Federal Government threatened to break the patent and begin manufacturing a generic version if sufficient supplies were not available. [Link]

Rethinking the Scope of Prior Art in Obviousness Cases

Obviousness, Patent, Patent Cases 2008, Priority Rights,

In Cohesive Technologies, the Federal Circuit issued a reminder that the novelty analysis of 35 U.S.C. §102 is separate and distinct from the nonobviousness analysis of 35 U.S.C. §103(a). The court notes that some prior art evidence – such as inherent elements of a disclosure – used for anticipation argument may not be used in obviousness analyses. That result is in tension with the traditional understanding that § 102 material may be used for §103(a) analysis.

In a recent e-mail, Professor Isaacs (NKU) saw that tension as a reason to for courts to take a fresh look at the text of §103(a). This is especially timely in light of the recent cases such as eBay, KSR, and MedImmune where the Supreme Court had no trouble altering longstanding precedent.

The most glaring problem with the current interpretation of § 103(a) involves post-invention art and secret prior art that are available as §102(b)/§103(a) and §102(e)/ §103(a) references respectively. These two allowances are contrary to the plain language of §103(a) because the statute focuses on what “would have been obvious at the time the invention was made.”

35 U.S.C. 103(a) A patent may not be obtained though the invention is not identically disclosed or described as set forth in §102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. …

Under a plain reading of §103(a), post-invention references cannot negate patentability because they were not available “at the time the invention was made.” Similarly, secret prior art – almost by definition – could not be known by one of ordinary skill in the art – especially under the Supreme Court’s new “common sense” approach to obviousness.

Of course, these arguments have been tried before – and failed.

  • In re Foster, 343 F.2d 980 (C.C.P.A. 1965) (cert denied) (creating §102(b)/§103(a) prior art)
  • Hazeltine Research, Inc. v. Brenner, 382 U.S. 252 (1965) (creating §102(e)/ §103(a) prior art)

Perhaps the time is right for a challenge.

Patently-O Bits and Bytes

Bits and Bytes, Patent

Researchers at the IP Research Institute of Australia (IPRIA) have a recent paper on pendency at the various patent offices. Professors Jensen, Palangkaraya and Webster looked at almost 10,000 international patent application families filed in the early 1990’s and studied how they fared in the USPTO, EPO, JPO and APO. When examining the same applications, the USPTO had the shortest pendency. The study also shows that many applicants would take advantage of deferred examination if allowed in the US. [Read the Paper]

    

Top 25 referrals to Patently-O in the past month (excluding search-engines). Thanks for the links!

Tafas v. Dudas: Amicus Briefs at the Federal Circuit

Patent

In support of Tafas:

In support of the PTO:

Federal Circuit Vacates ITC’s Broadcom Order

Patent

Kyocera v. ITC (Fed. Cir. 2008) (Broadcom v. Qualcomm)

The ITC found that Qualcomm infringed Broadcom’s ‘983 patents and issued a limited exclusion order against imports by Qualcomm and its customers.

On appeal, the Federal Circuit vacated and remanded — finding that the ITC (1) did not properly find inducement of infringement and (2) lacked authority to issue a limited exclusion order against non-respondents.

Inducement Requires Specific Intent: On their own, Qualcomm’s MSM chipsets do not infringe. However, the ITC found direct infringement in handsets that use the Qualcomm chipset in conjunction with “system determination software.”  The ITC found Qualcomm liable for inducing infringement because it provided the chipsets and the system determination software along with training and customer support.

Inducement requires underlying direct infringement and that the accused infringer “knowingly induced infringement and possessed specific intent to encourage another’s infringement.” This includes an “affirmative intent to cause direct infringement.”

On appeal, the Federal Circuit found that the ITC had based its decision on a lower level of “general” intent without requiring evidence of Qualcomm’s “culpable conduct” of “encouraging another’s infringement.”

In particular, the ITC’s statement that “Qualcomm intends to induce infringement because it provides its customers with the system determination code” is insufficient.  On remand, the ITC must find specific intent.

ITC Exclusion Orders: The ITC may issue either limited exclusion orders directed toward the actions of specific companies or general exclusion orders directed broadly to an industry. In this case, the ITC issued a limited order that excluded, inter alia, downstream manufacturers who were not named parties in the litigation.

On appeal, the Federal Circuit found that limited exclusion orders may not go beyond the named parties.  A general exclusion order may be appropriate. However, additional proof of necessity are required for general orders.

Notes:

  • This case involves different patents than the District Court Broadcom case [Part I][Part II]
  • This case is also involves different patents from the earlier Broadcom v. ITC. In that case, the Federal Circuit also vacated an ITC holding this time in Broadcom’s favor — vacating the ITC’s non-infringement finding. [LINK]

 

Shifting Burden of Production Does Not Shift Burden of Proof; PTO Deference

Attorney Fees, Fee Shifting, Patent, , ,

Technology Licensing Corp v. Videotek (Fed. Cir. 2008)

The independent inventor J. Carl Cooper invented and patented technology separating a sync signal from a video signal to better ensure vertical and horizontal hold on a video screen. Cooper assigned his rights to TLC which sued Videotek for infringement. Videotek pulled-in its supplier Gennum for indemnification. Gennum now remains as the only defendant.

Priority Date: Cooper’s asserted patent claims priority to an earlier application filed in 1992. The district court found specifically that claim 33 could not claim priority all the way back because the claim included a limitation to an “other circuit” which was only disclosed in the subsequent continuation.

Burdens of Proof and Production: Although a defendant ultimately bears the burden of proving invalidity, the burden of producing evidence may shift back and forth during litigation. For instance, once a defendant provides evidence of anticipation, the patentee then has the “burden of going forward with evidence either that the prior art does not actually anticipate, or … that it is not prior art because the asserted claim is entitled to the benefit of a filing date prior to the alleged prior art.” Proving priority requires evidence of the priority claim and also evidence showing that “the written description in the earlier application supports the claim.” Here, the court required cooper to produce “sufficient evidence and argument to show that [the priority document] contains a written description that supports all the limitations of claim 33, the claim being asserted.” Once the evidence is on the table, the claim will only be invalid if the defendant’s proof remains is clear and convincing.

[B]ecause an issued patent is by statute presumed valid, a challenger has the burden of persuasion to show by clear and convincing evidence that the contrary is true. That ultimate burden never shifts, however much the burden of going forward may jump from one party to another as the issues in the case are raised and developed.

Here, the Federal Circuit agreed that the defendants had clearly proven that the original written description was insufficient – and thus that the patentee could not claim priority all the way back.

Deference To and Waiting For the PTO: The PTO issued Cooper’s patent and then, through a reissue, again allowed the challenged claim to issue even after considering the same prior art (the reissue issued while the appeal was pending). On appeal, the Federal Circuit distinguished Ralston v. Far-Mar-Co (Fed. Cir. 1985). In Ralston, the court deferred to the PTO’s determination of priority date. Here, however, there was no evidence that the PTO specifically considered the priority dates. However, the Federal Circuit refused to “add an additional deference-thumb to the scale, or, even more disruptive, our asking the trial court to reopen the entire invalidity question to reweigh the intangible worth of additional deference.”

This is not to say that the determinations made by the corps of examiners are not important, or should not be worthy of appropriate deference to their expertise in these technical matters, especially when we have the benefit of well-reasoned explications. It is to say that when dealing with the intangible worth to be accorded an administrative agency’s decision making, the judicial process cannot be held hostage to the timing of either the agency or the litigants who have invoked the agency’s further review. In some circumstances a party may be able to obtain a stay from the trial court while awaiting the sought-for agency action; absent that, and absent extenuating circumstances not here present, the case must be decided on the record the litigants present for appeal.

Inequitable Conduct:

There has never been an exception [requiring submission of] anticipatory cumulative references, and we are not inclined to create one now.

Definiteness of Means Plus Function Claim: A MPF claim must be supported by structural disclosure found in the patent specification – this requirement is akin to the written description requirement and focuses on actual disclosure rather than enablement.

The question is not whether one of skill in the art would be capable of implementing a structure to perform the function, but whether that person would understand the written description itself to disclose such a structure.

In electronic circuit cases the actual circuit disclosures are not necessarily required. Rather, generic “core logic” may be sufficient. Here, the defendants were unable to provide clear and convincing evidence of a lack of structure.

Federal Circuit Agrees to Hear Interlocutory Appeal on Standing

Patent, Patent Cases 2008

Sky Tech v. SAP (Fed. Cir. 2008 ) (nonprecedential order)

Sky sued SAP in the Eastern District of Texas. SAP argued that Sky lacked standing because a prior assignment of patent rights had not been properly obtained. The district court found standing but gave its approval for an interlocutory appeal – noting that the issue was a close question. At the Federal Circuit, the three-judge panel agreed to hear the case and eventually to determine whether Sky has standing. The Sky patents were purchased by XACP in a foreclosure sale of Ozro’s assets – the question will be whether the foreclosure sale was proper even without a written assignment agreement.

Stay pending appeal: SAP had requested a stay pending appeal. The appellate panel refused to rule on that motion – instead noting that “the better course is for the Texas district court to consider that issue in the first instance.”

Tags:

CAFC allows Venue Transfer to Texas

Patent, Patent Cases 2008,

In re Volkswagen (Fed. Cir. 2008) (nonprecedential denial of mandamus)

In July 2007, MHL filed a patent infringement suit against VW in the Eastern District of Texas. Hoping to avoid that venue, the automobile company countersued in the Eastern District of Michigan. Although primarily a declaratory judgment action, VW included Michigan state law claims of unfair competition, defamation, trade disparagement, and abuse of process. In a preliminary hearing, the Michigan court declined its powers of supplemental jurisdiction over the state law claims and ordered the case be transferred to Texas. Because the transfer was not a final action, VW had no right to an appeal. Instead, it filed a writ of mandamus.

The Federal Circuit considered the writ, but ultimately declined to exercise authority over the case – finding that VW had not shown the importance of immediately deciding the issue. “A party seeking a writ bears the burden of proving that it has no other means of attaining the relief desired.”

In Texas, the 5th Circuit Court of Appeals just released its en banc opinion in another In re VW case. In that case, the 5th Circuit held that the E.D. Texas (Marshall) court had unreasonably refused to transfer VW’s case to a Northern District court in Dallas. The AIPLA filed a brief in that case, noting that the Eastern District of Texas rarely allows an out-transfer. From the AIPLA brief: “The routine filing of patent infringement complaints in the Eastern District of Texas that have essentially no connection to that district has been encouraged by the seeming reluctance of courts in that district to transfer cases under § 1404(a).” [Link]

In another venue case, Judge Patel of the Northern District of California noted that venue games are “perfectly legitimate”

“It is clear that both parties are attempting to achieve tactical advantage in the choice of a forum (which is a perfectly legitimate goal in an adversarial system of justice).” 

In Sorensen v. Phillips, Judge Patel transferred the case to the Southern District of California where a parallel proceeding was already underway (and stayed pending reexamination).

Notes:

 

Tags: ,

Paul Cole, Patentability of Computer Software As Such

Articles and Publications, Patent, Patentable Subject Matter, Software

In Symbian Limited v. Comptroller General of Patents [2008] EWCA Civ 1066, the UK Court of Appeal recently took a broader approach to patentability of software. UK patent attorney and author Paul Cole has written a short article for the Patently-O Patent Law Journal discussing the case and its impact. [Paul Cole Article]. The opinion cites John Duffy’s recent “Death of Google’s Patents” article also published on Patently-O.

Anticipated yet Nonobvious

Anticipation, Obviousness, Patent, Patent Cases 2008, ,

Patent.Law159Cohesive Tech v. Water Corp (Fed. Cir. 2008)

Perhaps the most important portion of this case relates to the notion that novelty and nonobviousness are separate and distinct inquiries. And, that a patent may be found anticipated yet nonobvious.

On summary judgment, the district court Cohesive’s HPLC patent might be obvious, but certainly was not anticipated.  Water appealed — arguing that the judgment was logically incorrect if anticipation truly is the “epitome of obviousness.”  On appeal, however, the Federal Circuit confirmed that novelty and obviousness are separate and distinct — one does not necessarily follow the other.

“While it is commonly understood that prior art references that anticipate a claim will usually render that claim obvious, it is not necessarily true that a verdict of nonobviousness forecloses anticipation. The tests for anticipation and obviousness are different.

The court suggested two circumstances where an anticipated claim might still be nonobvious.  First, secondary considerations of nonobviousness may exist that are not relevant in an anticipation claim. Second, although inherent elements apply in an anticipation, inherency is generally not applicable to nonobviousness. 

“[O]bviousness requires analysis of secondary considerations of nonobviousness, while secondary considerations are not an element of a claim of anticipation. And although anticipation can be proven inherently, proof of inherent anticipation is not the same as proof of obviousness.”

The court also gives an example —

“Consider, for example, a claim directed toward a particular alloy of metal. The claimed metal alloy may have all the hallmarks of a nonobvious invention—there was a long felt but resolved need for an alloy with the properties of the claimed alloy, others may have tried and failed to produce such an alloy, and, once disclosed, the claimed alloy may have received high praise and seen commercial success. Nevertheless, there may be a centuries-old alchemy textbook that, while not describing any metal alloys, describes a method that, if practiced precisely, actually produces the claimed alloy. While the prior art alchemy textbook inherently anticipates the claim under § 102, the claim may not be said to be obvious under § 103.”

Patent.Law160Judge Mayer dissented — arguing that anticipation is a subset of nonobviousness. “Although a claimed invention can be obvious but not anticipated, it ‘cannot have been anticipated and not have been obvious.’ In re Fracalossi, 681 F.2d 792, 794 (CCPA 1982).”

“The majority’s assertion that a claim can be anticipated but not obvious, flies in the face of a long line of precedent to the contrary. Not surprisingly, it is unable to cite a case remanding to the district court for consideration of anticipation, while at the same time sustaining a determination that claims at issue are not obvious.”

The practical impact of this case:

  1. Anticipation still gets to a jury even when the defense has a credible obviousness argument.
  2. The Majority’s example might be seen to narrow the scope of documents available for obviousness arguments along a temporal axis. (References from a long time ago shouldn’t be combined with more recent references.)
  3. In some ways, the ‘common sense’ approach of KSR encourages this decision. While anticipation may still be a formal construct, obviousness should focus on what really would have been obvious at the time of the invention.
  4. Professor Ochoa (Santa Clara) reminded me about the European rule that does not allow “secret” prior art to be used in obviousness (inventive step) analysis.  If the US so modified its rules, perhaps the distinction between obviousness and anticipation would begin to ring true.

ABC is Looking for a “Superstar Family of Inventors”

Bits and Bytes, Patent

The casting producer at “Wife Swap” thought some of our readers may know some great inventors:

WIFE SWAP, ABC’S HIT PRIMETIME SHOW, SEEKS A SUPERSTAR FAMILY OF INVENTORS!

The premise of Wife Swap is that one parent from each household swaps places for a week to experience how another family lives. It is an incredible family experience and opportunity to both learn and teach different family values.

Wife Swap is a fascinating story of what happens when two couples see themselves and their partners in a whole new light. The New York Post says, “It should be called ‘Life Swap’ because it’s not just the wives who learn something here. It’s the families.”

Potential families can live anywhere in the United States, but we ask that families applying for the show consist of two parents and have at least one child, age 7 or older, living at home. Specifically, I’m looking for families who are always looking for the next big invention! To submit for the show please email a family photo and description to: gaby.wifeswap@gmail.com.

Families featured on the show will receive a $20,000 honorarium. If you refer a family that is selected you receive $1,000.

If you are a family unit (two parents and children between the ages of 7 and 17) who love an adventure, I would love to hear from you today! Also, please feel free to send this casting along to any families you feel would be appropriate!

More information is available at: http://abc.go.com/primetime/wifeswap.
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