Preamble Not Limiting in This Case (Despite Being Added in OA Response)

Patent,

PatentLawPic271Symantec Corp. v. Computer Associates (Fed. Cir. 2008)

The district court granted summary judgment of non-infringement to the defendant CA. On appeal, considers preamble claim construction and also examines the defense of laches, inequitable conduct, and inventorship.

This is the third time that the antivirus patent at issue has been seen by the CAFC. In a prior appeal, Symantec was a defendant. After seeing the light, Symantec purchased the patent and continued a pending lawsuit against CA — this time as the plaintiff.

Preamble Limitation: The asserted claim preamble begins as follows: “In a system for transferring digital data for storage in a computer storage medium, a method of screening the data as it is being transferred.” The question on appeal is whether the preamble limits the claim to coverage of screening that occurs only “as [the data] is being transfered.” 

The CAFC found that the preamble term not limiting because the term does not recite “essential structure or steps” nor does is it “necessary to give life, meaning, and vitality” to the claim. One guidepost for ascribing meaning to a claim preamble is a prosecution history of argument based on the preamble. Here, although the preamble term had been added during prosecution, the court found no evidence that the term had its “own independent significance” or that the applicant demonstrated “clear reliance on the preamble during prosecution to distinguish the claimed invention from the prior art.” (Quoting Catalina Marketing, 289 F.3d 801 (Fed. Cir. 2002)).

[I]t is assumed that the preamble language is duplicative of the language found in the body of the claims or merely provides context for the claims, absent any indication to the contrary in the claims, the specification or the prosecution history.

Consequently the preamble term is given no effect. Claim construction reversed and the non-infringement decision vacated in Symantec’s favor. (Based on the new claim construction, validity must also be reconsidered).

Laches: The CAFC dismissed the defendant’s laches claim. Here, the court noted that that laches for delaying litigation is considered on a product-by-product bases and thus the delay is restarted when a defendant substantially changes its product line.

Inventorship: In a cross-appeal, a Mr. Levin asserted that he was a co-inventor to the asserted patent. As a matter of law, a co-inventor’s self-interested testimony is not sufficient to prove inventorship — rather, the inventor must provide corroborating evidence (that is sufficient to prove inventorship by a clear and convincing standard under a rule of reason). Here, Levin proved that he had a meeting with listed inventor and also that the listed inventor lacked proof that he invented a claimed portion. On appeal, the CAFC affirmed that this evidence was not sufficient to prove Levin’s inventorship and that the evidence regarding the listed inventor’s contribution was irrelevant.

Note: My former firm McDonnell Boehnen continues to represent Symantec in this matter.

Post Judgment Collateral Attack on IP through PTO Action Barred by “Defendant Preclusion”

Patent

NylookNasalok Coating v. Nylok (Fed. Cir. 2008)

The blue patch on Nylok’s bolts serves as a permanent bond. The blue patch is also protected by Nylok’s trademark covering “a patch of the color blue on a selected number of threads…” 

After Nasalok was charged with TM infringement and failed to appear in court, a district court entered a default judgment prohibiting Nasalok from selling bolts with a confusingly similar blue nylon locking element. Following that judgment, Nasalok attacked the mark by filing a cancellation proceeding at the USPTO. The TTAB, however, dismissed Nasalok’s arguments on summary judgment — finding the claims precluded by the district court’s default decision.  The CAFC considered two issues on appeal:

Claim Preclusion: Under federal court practice, claims may be precluded as res judicata when there has been an earlier final judgment between the identical parties on the same set of facts. However, the CAFC has narrowly interpreted those same facts — here, for instance, the CAFC found that Nasalok’s potential counterclaim of invalidity (or a cancellation proceeding) was not part of the same facts as Nylok’s infringement charges.

“In this case, therefore, the “essential facts” alleged by Nylok in its infringement action—related to Nylok’s ownership of the mark and Nasalok’s allegedly infringing behavior—do not form the basis of the cancellation claim now asserted by Nasalok, which is based on attributes of Nylok’s mark and on Nylok’s actions in obtaining registration of that mark. The two claims raise different legal and factual issues, will not be supported or refuted by substantially the same evidence, and are not “logically related” in the sense described by the Supreme Court in Moore.”

The court linked this decision with a public policy stemming from Lear that allows for challenges of intellectual property:

“[A] defendant in the first infringement suit should not be precluded from raising invalidity of the mark in the second action simply because it was not raised as a counterclaim in the first action. . . . public policy [is] in favor of allowing challenges to invalid marks weighs in favor of cabining the doctrine of res judicata at the Patent and Trademark Office.”

Thus, the CAFC found that the TTAB had improperly found Nasalok’s claims barred by claim preclusion

Collateral Attacks: Although the cancellation proceeding is not barred by res judicata, the CAFC found that it is properly barred by a rule against collateral attacks of final judgments — so called defendant preclusion. In particular, courts do not allow a former defendant to “undermine a previous judgment” through a collateral action that could have been asserted earlier. Here, the court found that allowing Nasalok to continue with the cancellation proceeding would certainly undermine the permanent injunction and thus “would constitute a collateral attack on the district court’s judgment.”

In a pointed concurring opinion, Judge Newman shows that the claim should be precluded because validity issues were decided by the district court. In addition, Judge Newman properly argues that the public policy for allowing challenges to established trademarks is much weaker than that for allowing challenges of issued patents.

“To state, even in dictum, that Lear favors a trademark system that facilitates attacks on trademark property ignores the differing public purposes of patents and trademarks, as well as misperceives the policy principles of Lear.”

Notes:

  • Anti-Retroactivity: To my knowledge, this is the first case to indicate that a post-issuance decision by the PTO would require vacatur of a decision in a completed case.  This situation is, however, parallel to the Translogic decision where the CAFC used the PTO’s cancellation of Translogic’s patent to retroactively overturn a prior jury verdict simultaneously on appeal. [LINK]

Patentee has no “Presumption of Priority” Unless Specifically Adjudged by the PTO During Prosecution

BPAI, Patent,

ScreenShot017PowerOasis v. T-Mobile (Fed. Cir. 2008)

The district court granted summary judgment to T-Mobile — finding the PowerOasis cell-phone vending machine patents invalid.

The patent family history includes a continuation-in-part (CIP) preceded by a continuation and an original utility patent application. Based on the prior art date, the issue boiled down to whether the asserted patents could claim priority through the CIP to the original application.

Patentee Bears Burden of Proving Priority. Despite the statutory presumption of validity, the CAFC first held that the patentee normally has the burden of proving priority. The exception is when the PTO considers the issue of priority during prosecution.  In drafting the opinion, Judge Moore shifted the decision from a question of validity (where a presumption lies) to a question of effective filing date (where there is no statutory presumption). “When neither the PTO nor the Board has previously considered priority, there is simply no reason to presume that claims in a CIP application are entitled to the effective filing date of an earlier filed application.”

Interestingly, this decision falls runs parallel to Microsoft’s recent petition for certiorari in the z4 case.

Written Description: To claim priority to the original application date, that original application must “convey with reasonable clarity to those skilled in the art, as of the filing date sought, [that the inventor] was in possession of the [claimed] invention.” (Quoting Vas-Cath). Here, the original application disclosed a “display” and “user interface” while the asserted patent claimed a “customer interface.” Although these terms appear quite close, the CIP had added specific examples of a laptop customer interface while the original application only included interface embodiments attached to the vending machine.  This makes a difference because the accused device uses a laptop and the patentee asked for a construction of the term that would include the laptop interface.

Holding: “Because none of this support was present in the Original Application and because the Original Application did not disclose a customer interface apart from the vending machine, the asserted claims are only entitled to the 2000 CIP Application.” 

 

PTO Written Description Guidelines

Patent

PatentLawPic266The PTO has released a new set of Written Description Training Materials that include a series of Seventeen examples of proper written description rejections. According to the accompanying notes, these materials are intended to “supersede and replace the 1999 training materials.”

Because most of the action in written description continues to focus on biochemistry, the bulk of the document is directed toward those issues. However, all practitioners should review the following examples:

  • Example 1: Written description in relation to priority claims;
  • Example 2: Written description in relation to amended claims;
  • Example 3: Written description in relation to flow diagrams;
  • Example 15: Written description in relation to a genus with widely varying species; and
  • Example 16: Written description in relation to a process claim where the novelty resides in the process step.

Documents:

Patently-O Bits and Bytes No. 27

Patent

Ex Parte Bilski: On the Briefs:

CAFC, En Banc, Patent, Software, , , ,

In Ex Parte Bilski, an en banc Federal Circuit plans to reconsider the scope of patentable subject matter as it relates to business methods and so called mental methods. Perhaps more importantly to the patent system as a whole, the court is considering the proper procedures going forward for determining whether a particular invention falls within the scope of 35 USC 101.

In its en banc decision, the CAFC invited non-party amici briefs, which were due April 7. (Scroll down to find the briefs).  In reading through the briefs, the first aspect that caught my attention was a common theme that institutional strengths and weaknesses of the PTO and Courts should help dictate the ultimate subject matter rule.  

  • Prof Morris: Through its examiners, the PTO has expertise in determining the technical questions of novelty, nonobviousness, and indefiniteness. On the other hand, examiners do not have the expertise to decide “philosophical and abstract” issues of statutory subject matter.
  • Prof Lemley*: Arbitrary subject matter boundaries have generally been difficult to enforce and usually result in patent attorneys using “magic words” to avoid the limits. (*NOTE: I signed Prof Lemley’s brief along with 21 other law professors.)
  • Prof Collins: A test that excludes “human cognition” elements is administrable.
  • EFF: Proposed three-step process provides a more “efficient and meaningful” way to administer the Section 101 threshold.
  • AIPLA: Section 112 should guard claim scope rather than Section 101.

Narrow or Expansive: The main thrust of the Bilski arguments, however, focus on whether patentable subject matter should be narrow or expansive. I have categorized the briefs on this axis:

Expansive Subject Matter:

  • Prof Lemley: We cannot predict the next area of innovation, and arbitrary limits on patent scope reduces incentives in those potential areas. “Bad patents” should be dealt with using the true tools of the Patent Act: Sections 102, 103, and 112. “Mental methods” should be allowed if they fall within the other requirements of patentability.
  • Regulatory Data Corp (Prof Duffy): Even under a narrow definition, applied economics is now part of the “useful arts.”  Statutory subject matter should only limit claims directed to abstract ideas, physical phenomena, or principles of nature.
  • AIPLA: We should continue to follow Diehr, State Street, & AT&T.
  • RMC: Business methods should be patentable.
  • American Express: Patenting of business and information management processes encourages the development of those useful societal tools.
  • Accenture: Business methods should be patentable regardless of any physicality limitations. Congress has deemed that business methods should be patentable via 35 USC 273.
  • Greg Aharonian: The Supreme Court’s 1876 Cochraine test does not exclusively define “process.” Rather, a patent eligible process should be broadly defined to include any process or method that yields a “useful concrete and tangible result.”
  • Koninklijke Philips: The court should be wary of relying upon precedent that focused on traditional manufacturing methods. Rather, the court should look at the broad definition of process required by Congress in 35 U.S.C. 100(b).

Narrow Subject Matter:

  • Prof Sarnoff: The court should return to the precedent of Flook. The inventive concept of a patent cannot be an abstract idea (such as hedging risk). Likewise, an information processing method must include significant post-solution activity. State Street is unconstitutionally over-broad.
  • End Software patents: Software should not be patentable even when loaded on a computer. Rather, to be patentable, there must be significant additional (non-information processing) physical activity.
  • American Civil Liberties Union: Patents mental processes would violate the first amendment.
  • EFF: There must be a technological component of a patentable invention.
  • Computer & Communications Industry Association: The CAFC should shed its “patentee-centric approach” and insted try to meet the needs of the modern world. In particular, the court should consider the systemic policy implications of its decisions. The policy implications of broader patent coverage is more litigation & rent seeking.
  • IBM: There is no sound policy for allowing business method patents.
  • American Institute of CPAs: Tax methods should not be patentable because they preempt free use of the tax laws. (Of course, the same could be said of CPAs charging corporations for their service).
  • SAP: A process should both (1) have a concrete, useful, and tangible result and (2) be “sufficiently machine-like” in order to avoid preempting work-arounds. However, software processes should be patentable.
  • Prof Collins: The court should add a “human cognition” exception to Section 101. Steps involving human cognition should receive no consideration in judging patentability.
  • Red Hat: Software patents put a huge kink in the open source software movement.
  • Financial Services Industry: State Street and its progeny are unduly broad. A token inclusion of a ‘machine’ in a claim would not render that claim patentable subject matter.
  • Dell & Microsoft: A patentable invention must operate on “something physical.” To be patentable, software should be tied to a computer and cause some physical transformation (such as movement of electrons). And, following Comiskey, a patent should not be granted under 103 if the inventor merely combined well known computer hardware with inventive but otherwise unpatentable software.

Other?

  • Yahoo! and Prof Merges: A strict “technology” requirement is too inflexible. State Street taught us that such a strict requirement does not fit well with “onrushing technology.” The Yahoo!/Merges test: a patent eligible process must itself be “stable, predictable, and reproducible” and its result must be “useful, concrete, and tangible.”  Bilski’s claims would not be eligible because they do not define a “stable” process.
  • Intellectual Property Owners Association: A process that is either implemented by a machine or that transforms matter into another state is patentable subject matter.  IPO favorably cites the Flook limitations on on information processing.
  • Business Software Alliance: Courts should err on the side of patentable subject matter because Sections 102, 103, and 112 make-up any slack. Software should be patentable. However, Bilski’s invention is not patentable because it is an abstract idea.
  • Washington State IP Law Assn: The CAFC should re-write State Street to be consistent with Supreme Court precedent.
  • Prof Morris: Subject matter questions should be avoided. Rather the PTO and courts should look to the substantive rules of 102, 103, and 112 to decide the issue. Section 101 jurisprudence has been both haphazard and unfair.

The elephant in the room is the recent Comiskey decision. There, it appeared that the court refused to give any patentable weight to the portion of the invention directed to non-statutory subject matter. In its brief, the Boston Patent Law Assn asks the court to clarify the following statement from Comiskey:

“The routine addition of modern electronics to an otherwise unpatentable invention typically creates a prima facie case of obviousness. Moreover, there is no pertinent evidence of secondary considerations because the only evidence offered is of long-felt need for the unpatentable mental process itself, not long-felt need for the combination of the mental process and a modern communication device or computer.”

Notes:

  • I signed Professor Lemley’s brief along with twenty-one other law professors. The theory behind the brief follows the IPO brief that I helped draft in the Metabolite case.

Amici Briefs:

 

 

 

 

Lower Court MUST Construe All Disputed Terms

Claim Construction, Patent, Patent Cases 2008

Patent.Law073O2 Micro v. Beyond Innovation, et. al (Fed. Cir. 2008)

A jury found O2 Micro’s DC/AC converter patents willfully infringed and not invalid. The Eastern District of Texas court (Judge Ward) then issued a permanent injunction.

Waiver of Claim Construction Appeal: During a Markman hearing, the parties sparred over the definition of the term “ONLY IF”. Rather than issuing a claim construction decision, the district court decided that the common phrase needed no explanatory construction. After having lost to the jury, the defendants appealed the lower court’s failure to construe the ONLY IF phrase.  However, because the defendants did not specifically object to the jury instructions, O2 Micro argued that the the defendants has waived their right to appeal. 

The issue of waiver of claim construction has been raised before, and the CAFC dismissed it again — this time by quoting the CAFC’s own 2004 Cardiac Pacemakers opinion:

“When the claim construction is resolved pre-trial, and the patentee presented the same position in the Markman proceeding as is now pressed, a further objection to the district court’s pre-trial ruling may indeed have been not only futile but unnecessary.”

Thus, if disputed at a Markman hearing, claim construction appeal issues are not waived by failure to object to jury instructions. Furthermore, the CAFC will also allow new arguments to be presented on appeal justifying the previously proposed construction.

Construing all the terms: Although the meaning of the phrase “ONLY IF” was disputed by the parties, the district court failed to construe the term. In its decision, the CAFC vacated — finding that the disputed phrase should have been construed. By failing to define the term, the court essentially passed the construction dispute to the jury.

“When the parties raise an actual dispute regarding the proper scope of these claims, the court, not the jury, must resolve that dispute. . . . When the parties present a fundamental dispute regarding the scope of a claim term, it is the court’s duty to resolve it.”

In deciding this issue, the CAFC indicated that claim construction requires determining both the meaning of the words in the claim and the scope encompassed by the claim. Further, even ordinary terms need construed when they are susceptible to multiple interpretations.

Overburdening: Over the past decade, the number of terms being construed (and appealed) has risen dramatically. In its decision, the CAFC at least waived its hands at the problem — recognizing “that district courts are not (and should not be) required to construe every limitation present in a patent’s asserted claims.” (Emphasis in original). No, the court only needs to construe those claim terms that are disputed, subject to alternative theories, that could be helped by clarification, and when otherwise necessary to describe the claim coverage.

Meaning and Scope: This case is quite important because it shifts even more power and importance onto the issue of claim construction and away from a jury’s factual determination of infringement and novelty. 

 

Patent Assignment Must be in Writing; But Some Transfers are not Assignments

Patent, Patent Cases 2007

PatentLawPic260Akira Akazawa v. Link New Tech (Fed. Cir. 2008).

Yasumasa Akazawa was the inventor and owner of a patent covering a new way to change engine coolant. When he died intestate in 2001, his wife and daughters inhereted his entire estate. The daughters then transferred their interest to the mother, and the mother assigned the patent to Akira Akazawa. Akira Akazawa then sued New Link for infringement.

The question on appeal is whether Akira Akazawa properly holds title (because of the non-written intestate transfer).

35 USC §261 has been interpreted to require that patent assignments be in writing. “Applications for patent, patents, or any interest therein, shall be assignable in law by an instrument in writing.”  Thus, New Link questions whether the intestate transfer of rights satisfies the writing requirements of Section 261.

The CAFC rejected this argument — holding that although ASSIGNMENTS must be in writing, there are other means of transfering patent ownership that need not be in writing. In particular, transfer through “operation of law” need not be in writing under the statute.

On remand, the district court must determine whether, under Japanese intestate law, the title to the patent properly transferred as an operation of law – or whether an assignment was necessary.

If the district court concludes that the ‘716 patent was transferred to [the heirs] upon Yasumasa’s death, then the subsequent transfers between [the heirs] and Akira conveyed ownership of the ‘716 patent to Akira. If, however, the district court concludes that under Japanese law the ‘716 patent was transferred to the estate of Yasumasa which then fell under the control of an administrator or executor, a written assignment in accordance with § 261 may then be necessary to convey the patent from the estate to Yasumasa’s heirs.

Vacated and remanded.

 

Re-Litigating Gorham v. White: Design Patents at the Supreme Court

Design Patent, Patent,

ScreenShot016Saint-Gobain Calmer, Inc. (now MeadWestvaco Calmer) v. Arminak & Associates, Inc. (on petition for certiorari 2008)

In 2007, the Federal Circuit dealt a serious blow to design patent protection by determining that an intermediate corporate purchaser is the “ordinary observer” for infringement analysis.  A professional corporate purchaser is presumably more likely to see differences between the patented design and an accused infringing device — thus making infringement more difficult to prove.

Calmer’s design patent, for instance, covers a sprayer shroud that is then combined with the trigger mechanism, bottle, etc.; filled with some liquid; and shipped to Wal-Mart for retail sale. The Federal Circuit’s holding looks to the typical buyer at the point where the allegedly infringing shroud is first sold to determine whether that individual would believe that “the patented design as a whole is substantially the same as the accused design.”   

Calmer has now petitioned the Supreme Court asking two questions:

  1. Whether the [Federal Circuit’s] use of expert viewpoints to determine design patent infringement is in direct conflict with this Court’s decision in Gorham Co. v. White, 81 U.S. 511, 529 (1871)?
  2. Whether the [Federal Circuit’s] test for design patent infringement of a component product, which considers deceptive similarities only as to the first purchaser of any product including the patented design, directly conflicts with its own precedent and with this Court’s “ordinary observer” test mandated by Gorham Co. v. White, 81 U.S. 511, 529 (1871), by excluding not only unsophisticated purchasers but also later purchasers of products including the patented design as a component?

As I write in an upcoming paper, the justification for design patent protections is more akin to traditional trademark policy than utility patent policy. With that in mind, it makes some sense allow design patents to operate at the retail level.

Notes:

Challenging Patent Validity: Microsoft Asks Supreme Court to Reduce “Clear and Convincing” Standard

Patent,

Microsoft Corp. v. z4 Tech. (on petition for certiorari 2008)

After a jury verdict that z4’s patent was infringed and not invalid, the Eastern District of Texas district court ordered Microsoft to pay over $100M in damages to the patentee (a small Michigan company)  The award was affirmed by the Court of Appeals for the Federal Circuit (CAFC).

Now, Microsoft has asked the Supreme Court to hear its case. The appeal focuses on the CAFC’s hard-line stance of requiring “clear and convincing evidence” to invalidate a patent even when a defendant presents evidence of invalidity that was not considered by the PTO.  The question presented is:

When a defense of invalidity under Section 282 rests on documentary evidence that was not considered by the United States Patent and Trademark Office, whether the factual predicates of the defense must be proved by “clear and convincing evidence” or some lower burden of proof.

According to Microsoft’s brief (filed by Ted Olson), prior to the founding of the CAFC, “all twelve regional circuits” required a lower evidentiary burden when the invalidity argument “rests on evidence that the PTO never had an opportunity to consider.”  The petition also uses KSR as a hook — in that case, the Supreme Court stated in dicta that the “rationale underlying the presumption [of validity is] that the PTO, in its expertise, has approved the claim.” In KSR, the court found the rationale “seem[ed] much diminished” because the references were unavailable to the PTO during prosecution. 

In KSR, the Supreme Court truly did beg the question of whether the standard for proving invalidity should be lessened in certain cases. In its decision here, the the CAFC held the line, by quoting an old Uniroyal case: “The burden of proof is not reduced when prior art is presented to the court which was not considered by the PTO.”*

A weak point of Microsoft’s petition is that its claim for invalidity falls under 102(g). Microsoft is arguing that its own non-published prior invention should invalidate the z4 patent. (Specifically, Microsoft’s asserted prior art was included in a Brazilian version of Publisher). 102(g) cases provide additional rationales for a high evidentiary standard: 102(g) prior art is generally less trustworthy because the asserted prior art was not public but rather emerges from the accused infringer’s files at the opportune time. In addition, lowering the standard for 102(g) prior art encourages potential defendants to keep their developments in secret rather than publicly disclose them or present them to the PTO.  The same issues arise from non-documentary prior art, such as evidence of prior use.  In its question presented Microsoft attempts an end run around the issue by focusing on “documentary evidence.”

Related Notes:

Supreme Court News: Eleventh Amendment Immunity Question

Patent

Today is a Supreme Court theme day. The lawyers running SCOTUS blog have projected Biomedical Patent Management Corp. v. < ?xml:namespace prefix ="" st1 />California Dept. of Health Services as one of the more likely candidates to be granted certiorari after the Supreme Court’s April 18 conference. Hal Wegner also has the case on his updated top-ten patent cases to watch.

Information:

  • Case Name: Biomedical Patent Management Corp. v. California Dept. of Health Services
  • Docket No: 07-956
  • Questions Presented:
  • Whether a state’s waiver of Eleventh Amendment immunity in one action extends to a subsequent action involving the same parties and the same underlying transaction or occurrence; 
  • Whether a state waives its Eleventh Amendment immunity in patent actions by regularly and voluntarily invoking federal jurisdiction to enforce its own patent rights. < ?xml:namespace prefix ="" o />
  • Patently-O Discussion of Case
  • Opinion below (Federal Circuit)
  • Petition for certiorari
  • Brief in opposition
  • Petitioner’s reply
  • Amicus brief of the Chamber of Commerce (in support of the petition)

    •  

    Tafas v. Dudas: Appeal and Legislation

    Patent

    Tafas v. Dudas (Fed. Cir. 2008).

    1. CAFC Appeal: PTO General Counsel James Toupin has reportedly indicated that the PTO will appeal the ruling to the Court of Appeals for the Federal Circuit (CAFC). On average, CAFC appeals take over one year. The average is raised for “important” cases where or caess where precedential opinions are issued.  However, there is a large variance between timing of the various judges. When on the panel, a couple of CAFC judges tend to greatly increase the expected time to judgment.
    2. Patent Reform: The pending Patent Reform Act includes language that would provide substantive rulemaking authority to the PTO. That provision would directly overrule yesterday’s decision. [UPDATE: To clarify, the version passed by the House (H.1908) includes additional regulatory authority. That portion is not in the current Senate bill.]

    Tafas v. Dudas: PTO’s Proposed Limitations on Continuations and Claims are Invalid

    Patent

    In a twenty-six page opinion, District Court Judge Cacheris has granted GSK’s and Tafas’s Motions for Summary Judgment — finding the PTO’s proposed limitations to the number of continuation applications and claims per patent to be improper extensions of PTO authority:

    “Because the USPTO’s rulemaking authority under 35 U.S.C. § 2(b)(2) does not extend to substantive rules, and because the Final Rules are substantive in nature, the Court finds that the Final Rules are void as ‘otherwise not in accordance with law’ and ‘in excess of statutory jurisdiction [and] authority.’ 5 U.S.C. § 706(2).”

    The documents:

    ==== Discussion ====

    PTO Has No Substantive Rulemaking Authority:  35 U.S.C. § 2 provides various specific powers to the PTO. However, Section 2 does not provide the PTO with any “general substantive rulemaking power.” According to the Court, “Section 2(b)(2)’s authority is limited to rules governing the ‘conduct of proceedings’ before the Office, the USPTO does not have the authority to issue substantive rules, and it does not have the authority to make substantive declarations interpreting the Patent Act.”

    Substantive Rulemaking is Broadly Defined: The district court defines a “substantive rule” as any rule that “affect[s] individual rights and obligations” (Quoting Chrysler Corp. v. Brown, 441 U.S. 281 (1979))

    PTO’s Proposed Rules are Substantive: Applying the broad definition of substantive, the court then easily found that the proposed rules are “substantive rules that change existing law and alter the rights of applicants such as GSK and Tafas under the Patent Act.”

    “The 2+1 Rule and the 5/25 Rule, which limit continuing applications, RCEs, and claims, and the ESD requirement, which shifts the examination burden onto applicants, constitute a drastic departure from the terms of the Patent Act as they are presently understood. By so departing, the Final Rules effect changes in GSK’s and Tafas’s existing rights and obligations.”

    Limits on Continuations are Substantive: In particular, the court found that the continuation rule is runs contrary to the law because it imposes a “hard limit” that “deprives applicants of their valuable rights under 35 U.S.C. § 120 to an unlimited number of continuation and continuation-in-part applications as a matter of right.” Likewise, the limitations on RCE filings is a “clear departure from the plan language” of 35 U.S.C. § 132 (the PTO “shall … “at the request of the applicant …”).

    Limits on Claims are Substantive: For over eighty years, the courts (CCPA) have blocked the PTO from placing any “mechanical limits” on the number of claims. Although the PTO may object to duplicate claims, the court found that the law prevents any strict limit on the number of claims.  The Court saw the ESD requirement substantive because it shifts the burden of examination from the PTO to the Applicant:

    [T]he ESD requirement changes existing law and alters the rights of applicants under the current statutory scheme by shifting the examination burden away from the USPTO and onto applicants. . . . [T]he Federal Circuit has stated that applicants have “no duty to conduct a prior art search” and “no duty to disclose art of which an applicant could have been aware. . . . It is only after the USPTO makes a demonstration of unpatentability that the burden shifts to the applicant to rebut that showing. . . .  Thus, by requiring applicants like GSK and Tafas to perform prior art searches and by shifting the examination burden away from the USPTO, the ESD requirement manifestly changes existing law and alters applicants’ rights under Sections 102, 103, and 131.”

    Holding: “Because the USPTO’s rulemaking authority under 35 U.S.C. § 2(b)(2) does not extend to substantive rules, and because the Final Rules are substantive in nature, the Court finds that the Final Rules are void as “otherwise not in accordance with law” and “in excess of statutory jurisdiction [and] authority.” 5 U.S.C. § 706(2).

    From the order:  “Defendants Jon W. Dudas and the United States Patent and Trademark Office and their agents, servants, and employees are permanently enjoined from implementing the Final Rules”

    Notes:

    • The court made no attempt to carve-out portions of the rules that may be legal.
    • Although numerous other issues were raised by the parties and amici, the Court decided only on the substantive ground.
    • Weak points in the decision: TBD.

    Unpredictable Arts Overcome KSR; Bonus: AND = OR

    Patent,

    PatentLawPic256Ortho-McNeil Pharmaceutical v. Mylan Labs (Fed. Cir. 2008)

    Ortho-McNeil’s anti-convulsant Topamax is expensive and brings in over $1,000,000,000.00 each year. Hoping to produce a generic version, Mylan Labs filed an Abbreviated New Drug Application (ANDA) with the FDA along with arguments that the Topamax patent is invalid and not infringed.

    AND vs OR: Mylan’s primary argument relies on a specific construction of the word “AND.”  According to Mylan, AND should be construed logically as a conjunction. (i.e., AND = AND). Ortho, on the other hand, argues that its AND is not so restrictive. (I.e., AND = OR). 

    As you might guess, according to the courts, AND does indeed mean OR.

    The problem with Mylan’s argument is that it turns the claims into nonsense. In particular, a conjunctive AND would require the claimed R groups (above) to be both independent spurs and, at the same time, joined as ring groups.

    In the 2004 Chef America case, the CAFC allowed such a non-sensical construction — holding that the claim should be interpreted “as written, not as the patentees wish they had written it.” Here, however, Judge Rader distinguished Chef America — noting that here, the claim intrinsic evidence points toward the “alternative” interpretation:

    “In Chef America, the only possible interpretation of the claim led to a nonsensical result. This situation is distinguishable because claim 1 can and should be interpreted as the patentees intended, with the meaning of and connoting alternatives.”

    Because AND means OR, the claim properly covers the active ingredient topiramate.

    KSR and Unpredictable Arts: In what may become an oft-cited decision, Judge Rader outlines how the supreme court’s KSR decision should have little impact on the “unpredictable arts” such as the development of pharmaceuticals.

    Apparently, the anti-convulsive properties of topiramate were discovered by a researcher (Maryanoff) looking searching for FBPase inhibitor for diabetes. Oddly, both Mylan and the Court focused on whether the actual decisions of the researcher were logical, blocked by obstacles, or helped by serendipity.

    “In retrospect, Dr. Maryanoff’s pathway to the invention, of course, seems to follow the logical steps to produce these properties, but at the time of invention, the inventor’s insights, willingness to confront and overcome obstacles, and yes, even serendipity, cannot be discounted.”

    Of course, under 35 U.S.C. 103 patentability is not to “be negatived by the manner in which the invention was made.”

    A Flexible TSM Test: Focusing on KSR, the court promotes its new flexible TSM test:

    “The TSM test, flexibly applied, merely assures that the obviousness test proceeds on the basis of evidence – teachings, suggestions (a tellingly broad term), or motivations (an equally broad term) – that arise before the time of invention as the statute requires. As KSR requires, those teachings, suggestions, or motivations need not always be written references but may be found within the knowledge and creativity of ordinarily skilled artisans.”

    On the facts, the CAFC found agreed that the invention is clearly nonobvious.

    “In this case, the record amply supports the district court’s finding of nonobviousness. . . . As noted above, the challenges of this inventive process would have prevented one of ordinary skill in this art from traversing the multiple obstacles to easily produce the invention in light of the evidence available at the time of invention. Of particular importance beyond the prima facie analysis, this court also detects evidence of objective criteria showing nonobviousness. Specifically, the record shows powerful unexpected results (anticonvulsive activity) for topiramate. The record also shows skepticism of experts and copying – other respected sources of objective evidence of nonobviousness – as well as commercial success. As this court has repeatedly explained, this evidence is not just a cumulative or confirmatory part of the obviousness calculus but constitutes independent evidence of nonobviousness.”

    Notes:

    • Judge Rader wrote this opinion and was also a member of the 2004 Chef America panel

    CAFC Overturns Jury Verdict of Non-Obviousness Because Combination Yields Predictable Results

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    Woodstream-aAgrizap v. Woodstream Corp (Fed. Cir. 2008)

    Agrizap holds a patent covering a method of electrocuting rats and gophers. The product is sold under the trade name “Rat Zapper.”  Woodstream (maker of the Victor rat trap) first licensed the product then began manufacturing its own version.
     
    The jury found the patent nonobvious and held Woodstream liable for both infringement (and for fraud based on its actions during the license.) In a post-verdict decision, the district court granted JMOL of non-infringement.

    On appeal, the CAFC (Judge Moore) zeroed-in on the question of obviousness:

    “[A]s the ultimate conclusion of obviousness is a question of law, it remains our duty as the appellate court to ensure that the law has been correctly applied to the facts. . . . In other words, we review de novo the conclusion on obviousness . . . [keeping in mind] that ‘[t]he combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results.’” (Quoting KSR v. Teleflex, 127 S. Ct. 1727, 1739 (2007)).

    Here, the CAFC found, as a matter of law, that Agrizap’s own commercial product (the “Gopher Zapper”) rendered the claimed invention obvious. The only difference between the two was the type of trigger mechanism, and the Rat Zapper’s claimed electrical switch was already well known in the cattle-prod art.

    Secondary Considerations: When faced with a mere combination of familiar elements, even strong secondary evidence of nonobvious will not save the application. Here, Judge Moore took as true “the commercial success of the Rat Zapper, copying by Woodstream, and a long felt need in the market for electronic rat traps.” However, that evidence is “insufficient to overcome the overwhelming strength of Woodstream’s prima facie case of obviousness.”

    Notes:

    • Judges Bryson, Moore, and Wolle (S.D.Iowa).
    • This case should be contrasted with Ortho-Mcneil v. Mylan , also decided this week. (Judges Michel, Rader, and Linn).
    • Perhaps a strategic misstep by Agrizap?: During prosecution, the PTO made the identical argument as that made by Judge Moore. The only difference was that the PTO examiner rejected the Rat Zapper patent application based on the “Gopher Zapper” patent instead of the commercial product.  Instead of arguing around the asserted reference, Agrizap amended inventorship and filed a terminal disclaimer.  This left the Examiner’s rejection glaringly un rebutted when it turned out that the commercial embodiment (102(b) prior art) could not be swept away so easily. [See Patently-O discussion of whether to file a 131 declaration or argue over a reference.]

    Computer Implemented Means-Plus-Function Element Must be Supported by Specific Algorithm in Specification

    Indefinite, Means Plus Function, Patent

    ScreenShot014Aristocrat Technologies Australia (ATA) v. International Gaming Technology (IGT) (2007-1419) (Fed. Cir. 2008)

    ATA and IGT have two parallel cases pending before the CAFC. This appeal focuses on whether ATA’s asserted claims are invalid as indefinite. (U.S. Pat. No. 6,093,102). The other pending case questions whether the PTO properly revived ATA’s unintentionally abandoned national stage application. (U.S. Pat. Nos. 7,056,215 and 7,108,603) [See Patently-O discussion of revival case].

    This case focuses on a patent covering an electronic slot machine patent that allows players to pre-select which combination of symbol locations will be used to determine a winner.

    Claims Indefinite: The district court held the claims invalid as indefinite under 35 U.S.C. § 112 ¶ 2. Its opinion focused on the claimed means-plus-function element “game control means” — finding the term indefinite because the specification did not provide “structure” to perform the claimed functions.  The specification did include the statement that the control means could be a microprocessor-based gaming machine with “appropriate programming.” However, the lower court focused on the absence of any “specific algorithm” or “step-by-step process for performing the claimed functions.”

    On appeal, the CAFC affirmed, holding that computer implemented means-plus-function claims must include “more than simply a general purpose computer or microprocessor.”  The purpose of the requirement, according to Judge Bryson’s opinion, is to avoid overbroad “pure functional” claims.  Because of the ubiquity of general purpose computers, a bare microprocessor cannot be considered a sufficiently specific structural disclosure:

    For a patentee to claim a means for performing a particular function and then to disclose only a general purpose computer as the structure designed to perform that function amounts to pure functional claiming.

    Within PHOSITA’s Ability: The algorithm missing from ATA’s disclosure is almost certainly within the ability of an ordinary game programmer.  In fact, I believe that it would only take me (a law professor) only a few hours to create a rough algorithm showing how the ATA software program could operate.  Judge Bryson shot-down that argument: Structure for a means-plus-function element must be provided in the specification regardless of whether the structure is already well known in the art.

    What is Required: “Source code” is not required to be disclosed, nor is a “highly detailed description of the algorithm.”  However, a computer oriented application using means-plus-function claims must “at least disclose the algorithm that transforms the general purpose microprocessor to a “special purpose computer programmed to perform the disclosed algorithm.” (Quoting WMS Gaming)

    Notes:

    Patent Challenge of the Week: When does a patent expire?

    Patent

    Last week, I wrote about whether an infringement lawsuit can properly be filed at 12:01 am on the date that the patent is scheduled to issue. A plaintiff only has standing to sue once a patent is issued, and it is not clear to me that patent has actually issued by that point (even if the patentee holds exclusive rights for the entire day once the patent has issued).*

    Expiration Date: At the other end of the spectrum is the patent expiration date. The language for the new twenty year term reads as follows:

    35 U.S.C. 154(a)(2) TERM.-Subject to the payment of fees under this title, such grant shall be for a term beginning on the date on which the patent issues and ending 20 years from the date on which the application for the patent was filed in the United States …

    The optional seventeen year term language is parallel to the twenty year term, although slightly different: “The term … shall be the greater of the 20-year term as provided in subsection (a), or 17 years from grant.” 35 U.S.C. 154(c)(1).

    The Question: Is the standard patent term (a) twenty years from filing, or is it (b) twenty years from filing plus one day?  I.e., if a patent is set to expire on April 2, 2008, can a generic manufacturer begin to make and sell the product on the morning of the 2nd without infringing? I would initially argue that the term should be (a) twenty years from filing — perhaps primarily because 154(c)(1) refers to the “20–year term.” However, I have heard of generic manufacturers who wait the extra day to be safe. (In certain drug cases, this extra day may be worth several hundred thousand dollars). What is the answer?

    Notes:

    • As a comment noted, Fed. R. Civ. P. 6(a) spells out the rules that courts should “apply in computing any time period specified in these rules or in any local rule, court order, or statute.” Rule 6(a)(1) states that “the day of the act, event, or default that begins the period” should be excluded.  In addition, under Rule 6, a time period is extended if it would otherwise end on a Saturday, Sunday, legal holiday.”
    • 37 C.F.R. 1.7 may also be relevant. 
    • * One bit of hard evidence answering last week’s question comes from dicta in a 1952 Helene Curtis patent case. In that case, the SDNY district court noted that the lawsuit had been filed “fifty-nine minutes after the patent had issued at noon of December 4, 1951” — and thus, was proper. See 105 F. Supp. 886. [Link]

    Patently-O Bits and Bytes No. 26

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    • BusinessWeek: Michael Orey has written another interesting Troll Tracker article: Busting a Rogue Blogger.
    • A recent comment raised an interesting question: Why do the pharmaceutical companies rarely (if ever) file their patent infringement suits in the Eastern District of Texas?
    • In a tight economy, is there a tendency file more patents (to secure some assets as insurance against business failure) or fewer patents (to tighten the outflow of cash)?

    Ex Parte Bilski: Once Again Rethinking the Scope of Patentable Subject Matter

    Patent,

    We can expect over one dozen friendly briefs in the pending en banc case captioned Ex Parte Bilski by the amicus deadline of April 7. The Bilski case involves questions of whether an invention can fit within the requirements of 35 U.S.C. 101 if the invention does not specifically require the use of “technology.” 

    35 U.S.C. 101: Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

    I was part of the team that drafted and submitted IPO’s 2006 brief to the Supreme Court in the Metabolite case. There, we argued on policy grounds that the court should not set arbitrary limits on the types of innovations that should be patentable. Instead, we asked the court to “support the expectation that innovations in yet unknown areas of technology will be eligible for patent protection.”  There will be at least one Bilski brief arguing along the same lines. It will, of course, be interesting to see whether the IPO and AIPLA have altered their positions in the past two years.

    If the court chooses to narrow subject matter, the 2007 Comiskey decision will quickly become an elephant in the room. In that opinion, the Federal Circuit implicitly held that a patent applicant cannot rely on nonpatentable subject matter portions of an invention to prove nonobviousness.  Comiskey’s arguably unique inventive contribution was a method of arbitration. By itself, that method was considered an unpatentable mental process. And, Comiskey’s attempt to tie the process to a microprocessor were also unsuccessful:

    “The routine addition of modern electronics to an otherwise unpatentable invention typically creates a prima facie case of obviousness. Moreover, there is no pertinent evidence of secondary considerations because the only evidence offered is of long-felt need for the unpatentable mental process itself, not long-felt need for the combination of the mental process and a modern communication device or computer.”

    The implicit holdings here: (1) during nonobviousness analysis, any portion of an invention that constitutes nonstatutory subject matter will be considered de facto obvious; and (2) evidence of secondary considerations do not apply to portions of an invention that are not considered “patentable subject matter.”

    Depending upon how it is interpreted, the Comiskey decision may greatly influence the impact of a rule narrowing patentable subject matter. For that reason, I hope that at least one brief will focus its effort on this important issue.

     

    Patently-O Bits and Bytes No. 25

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