BPAI Applies Bilski to Deny Patentability of Machine Claim

January 15, 2009PatentFederal Circuit En Banc, paidDennis Crouch

Ex parte Cornea-Hasegan (BPAI 2009)(non-precedential)

I have been following the BPAI’s response in the wake of the Federal Circuit’s series of patentable subject matter cases that culminated with In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc). In Bilski, the full appellate court held that to be patentable, a process claim must either be “tied to a particular machine or apparatus” or transform “a particular article into a different state or thing.” Bilski explicitly focuses only on process (or method) claim, and practitioners have been left to question its impact on other claim forms.

In Cornea-Hasegan, Intel is attempting to obtain a patent on a short-cut method of performing mathematical calculations when the outcome is likely “tiny.” According to the claim, when the mathematical result is likely tiny, then software is used to calculate the result; otherwise, hardware is used to calculate the result. The application claims both “a method” and “a computer readable media including program instructions which when executed by a processor case the processor to perform” the method. The body of both claims are essentially identical, and neither discuss particular machinery beyond “a processor,” “software,” and “floating-point hardware.”

Processor Insufficient: A claim will be considered to cover patentable subject matter if it is tied to a particular machine. Here, however, the BPAI found that requiring “a processor” is not a “particular” machine.

The recitation of a “processor” performing various functions fails to impose any meaningful limits on the claim’s scope. The recitation of a “processor” performing various functions is nothing more than a general purpose computer that has been programmed in an unspecified manner to implement the functional steps recited in the claims. The recitation of a processor in combination with purely functional recitations of method steps, where the functions are implemented using an unspecified algorithm, is insufficient the recitation of a processor does not limit the process steps to any specific machine or apparatus.

Post-Solution Activity: Although the claimed “floating-point hardware” may be a particular machine, the BPAI disregarded that element as “insignificant extra-solution activity … ‘that will not transform an unpatentable principle into a patentable process.'” (Quoting Bilski).

Transforming Data: A claim will be considered to cover patentable subject matter if it transforms a particular article into a different state or thing. However, the transformation of abstract data or abstract data structures will not be sufficient to render the claim patentable. Here, the only arguable transformation is of data that has no direct physical world corollary.

Non-Method Claims: Some of Intel’s claims are directed to a “computer readable media” rather than a method or process. Intel argued that Bilski should not apply to those “manufacture claims” because Bilski‘s sole focus was method claims. Rejecting that argument, the BPAI panel determined that the Section 101 analysis is the same – regardless of whether the subject is a “manufacture” claim or a “process” claim. (Citing AT&T v. Excel (Fed. Cir. 1999)(abrogated by Bilski)). Remember here that the State Street case – which released the business method rush – determined the patentability of a “data processing system.”

Applying Bilski to the “computer readable media” claim, the BPAI found that the claimed invention was unpatentable because it did not require transformation of any article nor was it tied to any particular machine. Although the claim recites a “computer readable media” and “hardware,” those elements were seen as insignificant extra-solution activities.

Limiting the claim to computer readable media does not add any practical limitation to the scope of the claim. Such a field-of-use limitation is insufficient to render an otherwise ineligible claim patent eligible.

Quoting the Supreme Court in Diehr (1981), the BPAI noted that Section 101 eligibility “cannot be circumvented by attempting to limit the use of the formula to a particular technological environment.”

Rejection of all claims under Section 101 affirmed.

Notes:

In Ex parte Bo Li, the BPAI reversed the rejection of a claim written in similar Beauregard format. That case could be distinguished by additional links to a machine or apparatus found in Bo Li‘s claims. In particular, Bo Li’s claim “presents a number of software components, such as the claimed logic processing module, configuration file processing module, data organization module, and data display organization module, that are embodied upon a computer readable medium.” [Link]
In Comiskey (Revised opinion 2009), the Federal Circuit issued a remand order to the BPAI to consider whether Comiskey’s claims of a “system for mandatory arbitration” are directed to statutory subject matter under Section 101.
The BPAI opinion here relies on the following statement from the original Comiskey opinion: “the mere use of the machine to collect data necessary for application of the mental process may not make the claim patentable subject matter.” Comiskey (Fed. Cir. 2007). That statement was deleted from the revised Comiskey opinion.

Patently-O Bits and Bytes No. 87

January 14, 2009Bits and Bytes, Patentpaid, VenueDennis Crouch

For the first time in history, fewer than 50% of US patents issued in the past year originated from US applicants. [Zura] IBM received 4,000+ patents in 2008.
In 2007, I asked the question: How will the US patent lobbying change when most new patents are held by foreign companies?
Brian Moriarty and Deirdre Sanders (Massachusetts patent litigators) discuss the combination of the Texas Venue problems (TS Tech, VW) and new D.Ma. local patent rules. Their conclusion: “Patent Suits – Massachusetts In, Texas Out.” [LINK]
More Patent Jobs:

Godfrey & Kahn (Milwaukee) needs an “IP Generalist” with “excellent academic credentials” to help with litigation, trademarks, patent prosecution, and transactions. [Link]

Baker & Daniels (Indy) needs a MechE (or mechanically inclined equivalent) associate to handle patent prosecution. [Link]

Federal Circuit Revises (Muzzles) Comiskey

January 13, 2009En Banc, Patent, Patent Cases 2009, Patentable Subject MatterFederal Circuit En Banc, obviousness, paidDennis Crouch

In re Comiskey (Fed. Cir. 2009) (Revised Panel Opinion)(En Banc Order)

After a request for en banc rehearing, the original Federal Circuit panel has revised its decision in Comsikey – erasing the “misunderstood” phrases of the original opinion linking Sections 101 (subject matter) and 103 (nonobviousness). The original opinion implicitly held that any portion of an invention that would constitute nonstatutory subject matter would be considered de facto obvious. [Link]

The new opinion finds that Comiskey’s method claims do not present patentable subject matter and remanded the case to the PTO to determine the subject matter eligibility of the system claims. The Federal Circuit refused to consider nonobviousness issues – even though nonobviousness was the sole issue presented in the original appeal. Subject matter eligibility had been raised sua sponte by the panel.

Judges Moore and Newman each dissented from the en banc order. Judge Moore argued that the decision violates the court’s “well established precedent that this court will not consider new grounds of rejecting patent claims on appeal.”

Patently-O Bits and Bytes No. 86

January 13, 2009Bits and Bytes, PatentClaim Construction, paidDennis Crouch

Supreme Court Petitions Pending:
- FTC v. Rambus: Duties of a patent holder in standard setting negotiations. (To be discussed in more detail this week.)
Apotex Corp. v. AstraZeneca AB: This case involves a burden of proof. Should an accused product be found non-infringing if the accused demonstrates that it merely practiced the prior art. Non-infringement is proven by a preponderance of the evidence rather than clear and convincing evidence.
MuniAuction v. Thomson Corp.: Challenges the Federal Circuit’s single actor requirement for patent infringement.
Forest Labs. v. Caraco Pharmaceutical: Whether DJ jurisdiction can exist after the patentee has granted an ANDA applicant a covenant not to sue.
Burandt v. Dudas: When is a failure to pay “unavoidable”
Apotex v. Roche: Is there any meat in the reverse doctrine of equivalents.
Energizer v. ITC: How should a court conduct claim construction?
800 Adept, Inc. v. Murex Securities: De novo review of claim construction.

New Patent Law Jobs:

Monsanto in Mystic, Connecticut

Oblon Spivak next door to the PTO

US Patent Attorney in Japan

Dolby Labs in San Francisco

Warner Norcross firm in Grand Rapids

Leonard Hope is giving up blogging and is looking for a buyer for his domain patentprosecutionblog.com. Let me know if you restart the site.

Supreme Court Patent Update

January 12, 2009Claim Construction, Inequitable Conduct, Patent, State ImmunityClaim Construction, paid, Supreme CourtDennis Crouch

Completed Cases: The Supreme Court has denied certiorari of two pending appeals: BPMC v. California and Rattler Tools v. Bilco. In BPMC, the patentee had challenged the Western state’s defense of sovereign immunity. In Rattler Tools, the appeal challenged a non-precedential claim construction opinion.

Upcoming Case: In a recently filed petition, 800 Adept has asked the Supreme Court to build on its 1995 Markman decision and consider “whether a district judge’s construction of a patent claim is ever entitled to deference upon appellate review, or, instead, are all such claim constructions reviewable only de novo, as the Federal Circuit has, over many dissenting opinions, held?” In this case, the Federal Circuit had reversed the lower court’s claim construction and – as a consequence – also reversed the jury verdict of infringement. [Link]. FTC v. Rambus is the most likely candidate of patent cases in the petition stage. That case involves the activities of a patentee during a standard setting process. In a related case, well respected Federal Judge Sue Robinson held that Rambus could not enforce twelve of its patents against Micron as a penalty for litigation misconduct. [Link]

The Soaring Rate of BPAI Appeals

January 8, 2009Academic Studies, Articles and Publications, BPAI, PatentpaidDennis Crouch

In two earlier posts, I discussed the BPAI reversal rate (link) and the reopening of prosecution after a reversal (link). In the reversal rate, I also looked at the historic jump in the absolute number of BPAI appeals filed. In FY2008 (ending Sept 30, 2008), the BPAI received over 6,000 ex parte appeals– concluding two consecutive years of over 35% annual growth rate in appeal filings.

Although dramatic, the reported filing increases pale in comparison to those seen in the past four months. The BPAI reports that in the period of Sept-Dec 2008, it received an average of 954 ex parte appeal cases per month. That value is well more than double the monthly average for the same span in 2007.

At this rate, the number of BPAI appeals would easily reach 10,000 in FY2009.

The planned BPAI rule changes may explain at least part of the sudden jump. In a recent presentation, William Smith of Woodcock Washburn stated that the new rules are “onerous and will significantly increase the cost of preparing an Appeal Brief.” [Link]. I have spoken with several patent attorneys who intentionally filed appeal briefs early in order to beat the December 10 deadline. That deadline has now been postponed. If the rules truly are onerous, then we may see a drop in appeals once they become effective.

Federal Circuit Denies Declaratory Jurisdiction When Patentee had not “Seen or Evaluated” Product

January 7, 2009PatentpaidDennis Crouch

Panavise Products v. National Products (Fed. Cir. 2009)(nonprecedential)

Panavise and NPI are competitors in the suction-cup market. NPI owns US Patent No. 6,666,420 and has attempted to enforce its patent via litigation against various entities, including Tomtom, Tesla, JVC, Vision Tech, and others.

Although NPI had not directed any communication toward Panavise, the manufacturer still wanted to clear any potential cloud over its products. As such, Panavise sued NPI for a declaratory judgment that the patent was invalid, unenforceable, and not infringed. The California district court, however, dismissed the case – finding no case or controversy.

On appeal, the Federal Circuit reviewed the issue de novo, but easily affirmed. Quoting its own recent decision in Prasco v. Medicis, the court noted that the “controversy must be based on a real and immediate injury or threat of future injury that is caused by the defendants.” (emphasis in original).

Here, NPI indicated that it had not “seen or evaluated” the Panavise product prior to the lawsuit and there was no evidence that the patent in any way “restrained” the activities of Panavise. “Under settled law, Panavise must present factual proof that such threat is real and immediate. Panavise failed to meet this threshold burden.”

The Court was careful to avoid additional bright-line rules (that would be proscribed by MedImmune). Thus, the opinion notes that declaratory judgment jurisdiction could exist – in certain circumstances – even when there is no direct communication between the patentee and a DJ plaintiff.

Federal Circuit Denies Declaratory Jurisdiction When Patentee had not “Seen or Evaluated” Product

January 7, 2009PatentpaidDennis Crouch

Panavise Products v. National Products (Fed. Cir. 2009)(nonprecedential)

PTO Director Jon Dudas Announces Resignation

January 6, 2009Patentpaid, USPTO DirectorDennis Crouch

On January 12, 2009, Jon Dudas will complete four years as Director of the U.S. Patent and Trademark Office. Prior to that, Director Dudas spent two years as the USPTO’s Deputy Director. Under his directorship, the PTO has focused on “Quality” and reducing pendency of applications. Successes including (1) hiring many more examiners and (2) boosting the PTO budget to $ 2 billion. The electronic filing system for patents has turned out to be an excellent system that works well and is reliable.

In an internal USPTO e-mail, Director Dudas has announced that he will leave the USPTO in mid-January.

Muddling Through Claim Construction

January 6, 2009Claim Construction, Patent, Patent Cases 2009Claim Construction, Federal Circuit En Banc, paidDennis Crouch

Vehicle IP v. General Motors Corp. and OnStar (Fed. Cir. 2009)(Nonprecedential)

VIP’s patent covers a vehicle navigation system. After construing the asserted claims, the W.D. Wisc. court granted summary judgment of non-infringement. This appeal focuses on construction of the phrase “a notification region defined by a plurality of notification coordinates.”

The infringing systems use scalars – such as a distance – and the debate is whether those scalars fit the claimed “coordinates” limitation. The majority opinion (Prost & Bryson, JJ) held that the “plain language of the claims precludes the possibility that a coordinate can be a scalar.” According to the claim, the location of the device must “substantially corresponds to a notification coordinate,” and a bare distance does not correlate to a location. The majority also found suggestions in the prosecution history supporting a narrow construction of coordinate.

In dissent, Judge Mayer would not have limited the coordinate to “a longitude latitude pair.”

“In mathematics, there are many types of coordinate systems and the common ground is that they all define a point. For instance, in a curvilinear system, coordinates are defined with a fixed origin point, and a scalar distance offset from that point along a known curve, such as a section of road. A distance offset necessarily has a “partner” to define a point, as offsets are necessarily set off from another known point. A coordinate should not be construed to exclude defining a point by an offset from another point along a known path.”

In Hal Wegner’s words, this decision “demonstrates the different views that can be reached by reasonable minds on claim construction issues which, due to appellate de novo review, creates the opportunities for so much judicial uncertainty.” And, as suggested by dissenting judges in Phillips v. AWH, that en banc decision did little to create predictability in claim construction.

Jury verdict forms

January 5, 2009Articles and Publications, Damages, Patent, Patent Cases 2009obviousness, paidDennis Crouch

Agere Systems v. Sony Corp (E.D. Tex. 2008).

In November 2008, a jury returned a verdict finding that Sony had induced infringement of Agere’s patent by marketing and selling its PlayStation Portable (PSP) game. It is interesting to look at the simplicity of the jury form:

Post-verdict motions are still pending in the Sony case, but an appeal is expected.

In Spine Solutions v. Medtronic (D.Del. 2008), the jury found that the asserted claims were non-obvious and that the patentee was entitled to lost profit damages.

Some of the damages were also awarded based on a “reasonable royalty” of 18%.

Patently-O Bits and Bytes No. 85

January 5, 2009Bits and Bytes, Pharmapaid, USPTO DirectorDennis Crouch

BPAI Plummeting Reversal Rate. [LINK]
Accessing Patently-O: I have set up several ways to access Patently-O depending upon your preferences:
- Via the Website;
- Via daily Email Digest;
- Via Full Content RSS Feed;
- Via RSS Squib.
Obama‘s original selection for Secretary of Commerce – Bill Richardson – will not pan out. Richardson has decided to withdraw his nomination. Although we rarely see the Secretary of Commerce directly shaping USPTO policy, the Office is still part of the Department of Commerce and the USPTO Director reports directly to the Secretary of Commerce. The greatest impact of the Secretary of Commerce may be on the selection of high-level PTO officials (including the Director).
The Patent Troll Tracker debacle made the ABA Journal’s list of the top ten legal stories of 2008. (The only IP related issue to make the list). [Link]
Patently-O Jobs:
- Microsoft (Redmond, WA) needs a patent portfolio manager (at least 5 years exp.) [LINK]
- Google (Mountain View, CA) needs an IP litigation counsel (at least 3 years exp.) [LINK]
- Amin Hallihan (Chicago) focuses on IP & FDA issues. The firm is looking one or more experienced patent attorneys to join their ranks. [LINK]
Phama Law: Pozen’s migraine drug (Treximet) is special because it combines two types of migraine treatments into one pill: naproxen sodium (Aleve) and sumatriptan (Imitrex). Alphapharm (Mylan) filed an abbreviated new drug application (ANDA) to begin marketing a generic version of the drug – arguing that the patent is invalid. On January 2, Pozen sued Alphapharm for infringement in the Eastern District of Texas. Claim 1 of the asserted patent reads as follows:
- 1. In a method for treating a migraine patient by administering a 5-HT agonist [Imitrex], the improvement which comprises: concomitantly administering to said patient a long-acting, non-steroidal, anti-inflammatory drug (LA-NSAID) [Aleve] in an amount that, together with said 5-HT agonist, is effective to reduce migraine relapse or produce longer lasting efficacy compared to the administration of said 5-HT agonist in the absence of said LA-NSAID.

Patently-O Bits and Bytes No. 85

January 5, 2009Bits and Bytes, Patent, Pharmapaid, USPTO DirectorDennis Crouch

BPAI Plummeting Reversal Rate. [LINK]
Accessing Patently-O: I have set up several ways to access Patently-O depending upon your preferences:
- Via the Website;
- Via daily Email Digest;
- Via Full Content RSS Feed;
- Via RSS Squib.
Obama‘s original selection for Secretary of Commerce – Bill Richardson – will not pan out. Richardson has decided to withdraw his nomination. Although we rarely see the Secretary of Commerce directly shaping USPTO policy, the Office is still part of the Department of Commerce and the USPTO Director reports directly to the Secretary of Commerce. The greatest impact of the Secretary of Commerce may be on the selection of high-level PTO officials (including the Director).
The Patent Troll Tracker debacle made the ABA Journal’s list of the top ten legal stories of 2008. (The only IP related issue to make the list). [Link]
Patently-O Jobs:
- Microsoft (Redmond, WA) needs a patent portfolio manager (at least 5 years exp.) [LINK]
- Google (Mountain View, CA) needs an IP litigation counsel (at least 3 years exp.) [LINK]
- Amin Hallihan (Chicago) focuses on IP & FDA issues. The firm is looking one or more experienced patent attorneys to join their ranks. [LINK]
Phama Law: Pozen’s migraine drug (Treximet) is special because it combines two types of migraine treatments into one pill: naproxen sodium (Aleve) and sumatriptan (Imitrex). Alphapharm (Mylan) filed an abbreviated new drug application (ANDA) to begin marketing a generic version of the drug – arguing that the patent is invalid. On January 2, Pozen sued Alphapharm for infringement in the Eastern District of Texas. Claim 1 of the asserted patent reads as follows:
- 1. In a method for treating a migraine patient by administering a 5-HT agonist [Imitrex], the improvement which comprises: concomitantly administering to said patient a long-acting, non-steroidal, anti-inflammatory drug (LA-NSAID) [Aleve] in an amount that, together with said 5-HT agonist, is effective to reduce migraine relapse or produce longer lasting efficacy compared to the administration of said 5-HT agonist in the absence of said LA-NSAID.

BPAI Appeal Statistics: The Plummeting Reversal Rate

January 5, 2009Academic Studies, Articles and Publications, BPAI, PatentEnablement, obviousness, paidDennis Crouch

In an earlier post, I examined what happens to patent applications after the BPAI reverses an examiner rejection. [LINK] This next post looks at the BPAI reversal rate itself. Here, I define the reversal rate as the percentage of cases where the Examiner rejections are completely reversed (as opposed to partial reversals).

Over the past several years, the BPAI reversal rate has dropped dramatically. From FY1999-FY2005, the reversal rate remained relatively steady between 35% and 40%. Then, in FY2006 we began to see a smaller proportion of reversals. By the first two months of FY2009, the reversal rate had dropped to 20%. Part of the drop is likely attributable to new filtering mechanisms that keep low-quality rejections from reaching the Board. The pre-appeal brief conference program started in 2005 and allows a patent applicant to request an internal review of the examiner’s final rejection at the Tech Center (TC) level before an appeal brief is filed. Even if no pre-appeal brief conference request is made, the examiner’s case for a rejection is usually reviewed at the TC level before the examiner is allowed to file a responsive brief.

In recent years, these filters have operated to weed-out 80% of the cases where an appeal brief or pre-appeal brief conference request had been filed. Prior to implementation of these filters, the majority of appeal briefs led to BPAI decisions. [See Katznelson, Slide 15]

When the low quality rejections are eliminated from consideration, we should expect that the BPAI reversal rate would drop – as it has. The BPAI is no longer seeing many of the easy reversal cases where the examiner made a clear legal error. Rather, today’s cases before the board tend to be more focused on arguable issues involving obviousness, enablement, and patentable subject matter.

The filters only tell part of the story, and the reversal rate masks the fact that – in absolute numbers – the Board is reversing more cases than ever. Over this same period, the number of appeals filed has increased dramatically. And, although the BPAI has increased its throughput, the backlog has grown five-fold since 2005. These pendency pressures give the Board an incentive to make appeals less hospitable – as we saw with the new (not-yet-final) BPAI appeal rules.

Notes:

Prior Patently-O Posts: How long does a BPAI Appeal take; BPAI Appeal Statistics; BPAI Patent Judges

Federal Circuit affirms permanent injunction in face of prior license agreements

January 5, 2009Injunctions, Patent, Patent Cases 2008Licenses, paidDennis Crouch

Acumed LLC v. Stryker Corp. (Fed. Cir. 2008)

In 2004, Acumed sued Stryker for infringing a patent covering an orthopedic nail used in reconstructing humerus fractures. After a jury verdict of infringement, the district court ordered a permanent injunction. That pre-eBay ruling was subsequently vacated by the Federal Circuit because the lower court did not specifically consider the traditional four-factor test for injunctive relief. On remand, the district court again granted the permanent injunction. That permanent injunction is affirmed here on appeal.

In eBay, the Supreme Court held that the traditional four factors of equitable relief must be considered before granting injunctive relief in a patent infringement case. However, if a district court considers the requisite factors, the Federal Circuit will only vacate if they find an “abuse of discretion.”

Irreparable Harm and Lack of Remedy at Law: The first two factors of (1) irreparable harm caused by continued infringement and (2) inadequate remedies available at law almost entirely overlap. The court easily considered those factors together.

Acumed had previously licensed the patents to other manufacturers — perhaps indicating that money could be sufficient to compensate for the infringement. However, the district court distinguished the prior licenses based on the identities of the past licensees and Acumed’s more recent “experience in the market.” The Federal Circuit found no abuse of discretion — noting that “[a] plaintiff’s past willingness to license its patent is not sufficient per se to establish lack of irreparable harm if a new infringer were licensed.”

The Jury had awarded lost profit damages, and Acumed suggested that fact indicates that future harms would cause irreparable harm (or at least more than what would be compensated by a reasonable royalty). On appeal, the Federal Circuit did not dispute (or explicitly affirm) this argument. However the court did note that “[t]he essential attribute of a patent grant is that it provides a right to exclude competitors from infringing the patent.”

Balance of Hardships: For the third factor – balancing the hardships – Stryker argued that its customers (who need their arms fixed) would suffer under an injunction. On appeal, the Federal Circuit rejected that argument as a matter of law — holding that the balancing factor “is only between a plaintiff and a defendant, and thus the effect on customers and patients alleged by Stryker is irrelevant.” Under this construct of the balancing factor, the patentee will usually win — especially when applying the Windsurfing holding that “One who elects to build a business on a product found to infringe cannot be heard to complain if an injunction against continuing infringement destroys the business so elected.”

Public Interest: The patentee must show that the public interest is “not dissereved by an injunction.” Here, Stryker argued that the Acumed product was lower quality and that the arm bone repair would lead to increased morbidity. The district court did not find that public health argument persuasive and the Federal Circuit agreed that “the court was within its discretion to conclude that the public interest was not disserved by an injunction.”

Permanent Injunction Affirmed

Notes:

The Jury found the infringement “willful.” That fact was not discussed in the eBay analysis.
This case follows the conventional wisdom that the courts will continue to grant permanent injunctions against competitors who infringe.

Federal Circuit affirms permanent injunction in face of prior license agreements

January 5, 2009Injunctions, Patent Cases 2008Licenses, paidDennis Crouch

Acumed LLC v. Stryker Corp. (Fed. Cir. 2008)

Permanent Injunction Affirmed

Notes:

The Jury found the infringement “willful.” That fact was not discussed in the eBay analysis.
This case follows the conventional wisdom that the courts will continue to grant permanent injunctions against competitors who infringe.

Federal Circuit Rejects Patent Attorney Expert Testimony; Finds Patent Obvious

January 3, 2009Obviousness, Patent, Patent Cases 2008obviousness, paidDennis Crouch

Sundance v. Demonte Fabricating (Fed. Cir. 2008)

Sundance sued Demonte for infringing its patent on a retractable truck tarp. A jury found the patent infringed but obvious. In a post-verdict judgment, the Judge vacated the jury’s obviousness determination – finding the patent not invalid.

Patent Attorney Expert Testimony: On appeal, the Federal Circuit found that the Michigan district court erred by allowing a patent attorney – Dan Bliss – to testify as an expert witness on the issues of infringement and validity on behalf of Demonte. At least some of his testimony focused on issues “exclusively determined from the perspective of ordinary skill in the art” even though he was not qualified as an expert in the art of tarp-making.

“Mr. Bliss is not “qualified as an expert by knowledge, skill, experience, training, or education” in the pertinent art; we therefore fail to see how he could “assist the trier of fact to understand the evidence or to determine a fact in issue.” Fed. R. Evid. 702.

….

Admitting testimony from a person such as Mr. Bliss, with no skill in the pertinent art, serves only to cause mischief and confuse the factfinder. Unless a patent lawyer is also a qualified technical expert, his testimony on these kinds of technical issues is improper and thus inadmissible.”

….

We hold that it is an abuse of discretion to permit a witness to testify as an expert on the issues of noninfringement or invalidity unless that witness is qualified as an expert in the pertinent art. Testimony proffered by a witness lacking the relevant technical expertise fails the standard of admissibility under Fed. R. Evid. 702. Indeed, where an issue calls for consideration of evidence from the perspective of one of ordinary skill in the art, it is contradictory to Rule 702 to allow a witness to testify on the issue who is not qualified as a technical expert in that art. We understand that patent lawyers are often qualified to testify as technical experts, but such a qualification must derive from a lawyer’s technical qualifications in the pertinent art.

With Mr. Bliss’s testimony excluded, the Federal Circuit was left with no expert testimony supporting the jury’s obviousness holding. However, following the Supreme Court’s lead in KSR v. Teleflex, the Federal Circuit still felt competent to determine the obviousness on its own. Explaining the appellate court’s competence, the opinion noted that the “technology is simple.”

Holding: Reversed – Claim 1 is invalid as obvious.

Note:

Way back when: Peggy Focarino was the primary examiner of the patent at issue. Patent No. 5,026,109.

Federal Circuit Rejects Patent Attorney Expert Testimony; Finds Patent Obvious

January 3, 2009Obviousness, Patent Cases 2008obviousness, paidDennis Crouch

Sundance v. Demonte Fabricating (Fed. Cir. 2008)

….

Holding: Reversed – Claim 1 is invalid as obvious.

Note:

Way back when: Peggy Focarino was the primary examiner of the patent at issue. Patent No. 5,026,109.

On the Price Elasticity of Demand for Patents

December 30, 2008Academic Studies, Articles and Publications, PatentpaidDennis Crouch

In a recent working paper, two European economists studied the price elasticity of demand for patents based on data from past twenty-five years. Their empirical result – the demand for patents is responsive to price, but relatively inelastic. I have created the following table showing where their result fits in the overall elasticity schema of goods and services.

Good	Estimated Elasticity	Description
Salt	0.1	Highly Inelastic
Patents	0.4	Inelastic
Legal Services in General	0.4	Inelastic
Utilities	0.4	Inelastic
New Tires	1.0	Moderate
Restaurant Meals	2.3	Elastic
Chevrolet Automobiles	4.0	Elastic

Elasticity is simply a way to measure (or estimate) the how the demand for a good changes in response to a change in the price of that good. Their results essentially show that pricing mechanisms could be effective in shaping applicant behavior, but that a significant result would require a dramatic change in fees. From a historical perspective, the authors attribute at least part of the “boom” in patent filings to a relative fee reduction and generally “very inexpensive” fees. “Higher fees would … [help] reduce the upward trend in propensity to patent.”

Notes:

Read the paper: On the Price Elasticity of Demand for Patents by Gaetan de Rassenfosse and Bruno van Pottelsberghe de la Potterie. [LINK]
Historical data is only available for a limited range of pricing schemes. In his paper on Patent Demand Tim Wilson proposes raising the patent filing fee to $50,000 with the assumption that the demand for patents becomes more elastic as the price becomes dramatically higher.