Claimed “Insert” Limitation Creates Product by Process

Patent,

AIPLATalk174Miken Composites v. Wilson Sporting Goods (Fed. Cir. 2008)

This case involve the same patent that prompted Judge Rader’s intriguing 2006 koan:

“while a claim is not to be construed in light of the accused device,
in an infringement case,
it must inevitably be construed in context of the accused device.”

See Wilson v. Hillerich.

The Wilson patent is directed to a type of softball bat that includes a internal structural inserts that allow for a lighter and stronger bat.  On summary judgment, Miken won a declaratory judgment non-infringment. In particular, the lower court found that Miken’s bats did not contain the required “insert.” Rather the internal structural members of thte Miken composite bats were created using a successive layering process.

Product by Process: Normally, a device claim can be infringed regardless of the construction methods used.  Miken argued that in this case, the patentee’s inclusion of the “insert” claim language transformed that portion of the claim into a product-by-process.

On appeal, the CAFC agreed with Miken that the insert limitation required an element that was “put or fit into something else.” Consequently, Miken’s products cannot infringe because the accused structural members were never “inserted or intended for insertion.”

Vitiation and DOE: Even without an insert, Miken’s products are arguable equivalents of the Wilson invention. However, the issue of ‘equivalent as a whole’ is irrelevant to whether a product infringes under the doctrine of equivalents. Rather, the all elements rule requires that each element of a patent claim be infringed either literally or by an equivalent element found in the product.  Here, that means that to infringe under the DOE, Miken’s bat must have an element that is the structural and functional equivalent of an insert.  Because Wilson did not provide evidence of such an element, the CAFC affirmed the lower court’s holding of non-infringement under the DOE.

Monsanto’s Roundup Ready GMO Patents Convincingly Upheld on Appeal (Again)

Patent

Monsanto v. David (Fed. Cir. 2008)

Once again, the CAFC has upheld Monsanto’s Roundup Ready Soybean patents and the company’s strategy of enforcing those patents against farmers.  The facts here are similar to the McFarling case. David  – is a big-time soybean farmer – was found to have saved a portion of his soybean seeds and planted them the following year.  David also signed Monsanto’s technology agreement, in which farmers agree not to save and re-plant.

Here, the CAFC refused to reexamine the question of whether plant genes are patentable under Section 101 and J.E.M Ag Supply. Rather, the court is precedentially bound by the McFarling and other cases to find the subject matter appropriately patentable. David’s “inconsistent testimony” allowed the court to also agree that no clear error had been made in the lower court’s factual findings in favor of Monsanto.

The court also agreed that this is an exceptional case: “It is a case of a farmer with apparent disregard for patent rights, license agreements, and the judicial process. With that in mind, as well as the record evidence of David’s inconsistent testimony, we agree with the district court that this is an “exceptional” case.” Thus affirming the award of costs and fees.

Notes:

 

 

 

Don’t forget to vote

Patent

PatentLawPic191There is a continuum of technology law interest amongst the leading five candidates. I’ve listed them from most-interested to least interested (in my subjective view):

  1. Romney (R)
  2. Obama (D)
  3. Clinton (D)
  4. Huckabee (R)
  5. McCain (R)

The issue for IP focused voters is whether interest is better than neglect.

CIAS Challenges Federal Circuit’s Interpretation of Prosecution History

Patent,

CIAS v. Alliance Gaming (On petition for Cert. 2008)

In a recent petition to the Supreme Court, CIAS asks the Supreme Court to think about how prosecution statements should be used for claim construction.

Issue: Whether the Federal Circuit’s use of patent prosecution history statements in claim construction is so erroneously inconsistent among its own panel decisions and incompatible with its prior en banc decision in Phillips as to make it impossible for the public to know with any degree of confidence the scope of patent claims; and whether that Court’s inconsistent judgment in this case should be reversed.

In this case, CIAS discussed a reference that had been cited by the Examiner. Although the reference was not asserted in a rejection, the CAFC found that CIAS’s discussion of the reference should shape how the patent claims were interpreted.

In its petition, CIAS argues that the CAFC’s approach to determine whether such prosecution history alters claim construction is much like the proverbial random walk.

Out of 16 district court cases since

Phillips specifically dealing with the issue of prosecution history disclaimer, the Federal Circuit has disagreed with the district court on that issue a total of 12 times. … [T]he Federal Circuit’s inconsistency has created a confused body of decisions. It is now extremely difficult for patent holders and the public to effectively gauge the meaning of claim terms in light of prosecution history statements.

Documents:

 

 

CAFC Holds Hard Line Against Mandamus Actions

Patent

Misc. Docket No. 854 (in re Roche Molecular Sys.) (Fed. Cir. 2008)

Stanford sued Roche for infringement of its patented method of monitoring and treating HIV/AIDS. Roche argued that it actually held license to the patents. However, ND Cal District Court Judge Patel denied Roche’s motion for summary judgment on the licensing issue and instead held those claims barred by a statute of limitations.

Roche demanded a writ of mandamus – but was denied.  The majority panel noted the extra special nature of mandamus appeals: noting that neither “reversible error”, “hardship, inconvenience, [nor] an unusually complex trial” provide a basis for mandamus. Here, the court found that Roche could not prove the necessary indisputable “right” to the writ and thus must wait until a final decision for its appeal.

Judge Newman dissented — arguing that the number of serious errors made by the district court level should not be overlooked.

PubPat: Proposed Post-Grant Review Cuts-Out Public Interest

Patent, Reexamination, ,

RavicherThere is a possibility that a passed Patent Reform statute would eliminate third-party-requested reexaminations (ex parte and inter partes) and yet fail to create any substantive third-party initiated post-grant procedure to replace the current options.

In addition, the proposed post-grant review procedure would block a non-threatened party from challenging the validity of a patent more than a year after its issuance. In a letter sent today to the Senate reformers, Dan Ravicher of PubPat asks that third-party reexamination be preserved.  The non-profit groups such as PubPat and EFF have filed dozens of reexamination requests asking the PTO to invalidate “wrongfully issued” patents.

The Current Proposal Found in S.1145: The proposed system of post-grant review would have two windows for third-party filings:

  • First Window: Post-Grant oppositions filed by anyone within one year of issuance.  Patents reviewed in the first window would not be given any presumption of validity.
  • Second Window: Opposition must be filed by party who has a likelihood of feeling “significant economic harm” based on the patent. A presumption of validity would apply in reviews within the second window.

The PTO would be required to complete its review work within 18 months. Post grant reviews would be conducted by a three-member panel of administrative judges rather than by examiners. Parties to the review may settle the case.

  • PubPat Recent Successes:
    • Forgent Networks ‘672 "JPEG" patent: Broadest claims finally rejected;
      Patentee abandoned assertion of patent.
    • Columbia ‘275 Axel Cotransformation Patent: All claims finally
      rejected; Patentee abandoned assertion of patent.
    • Microsoft ‘517 FAT Patent: Patentee modifies claims, which are allowed.
    • Pfizer ‘156 Lipitor Patent: Patentee modifies claims, which are allowed.
    • WARF Stem Cell patents and Gilead Tenofovir (AIDS drug) patents have had all claims non-finally rejected, but are still pending. 

Patently-O Bits and Bytes No. 9

Patent, Patent Legislation,
  • Bush Administration Opposes Aspects of Patent Reform: [LINK] (But will support an amended version)
  • Additional Senate Comments on Patent Reform: [LINK (836 KB)]
  • Senator Kyl: Congress should eliminate business method patents because they create monopoly costs without any new beneficial technology.
  • Senators Spector & Brownback: The S.1145 “remains a work in progress;” the damage apportionment language would create uncertainity and litigation — especially determining an invention’s “specific contribution over the prior art.”
  • Senators Feingold and Coburn — If the bill is passed without serious amendment “Patents will be devalued and many inventors will opt for trade secrecy instead, undermining the Framers’ intent to promote disclosure and public benefit through a strong patent system.”
  • General Remarks from a minority of Judiciary Committee members: “Primum non nocere is Latin phrase that means `First, do no harm.’ … In our opinion, the intervention the bill proposes will create real and certain damage to our patent system and the ability of America’s inventors and innovation industries to protect their intellectual property rights.”
  • The link above includes the formal Judiciary Committee report on the proposed patent reform legislation now pending in the Senate.
  • Spare Parts: Spare parts manufacturers continue to lobby congress to include a special provision in the reform bill that would eliminate the potential of protecting automobile spare parts with design patents.  Several car companies are currently attempting to limit the off-brand repair market. http://www.qualitypartscoalition.com/
  • KSR Rejections: PTO provides examples of how to use KSR to reject Business Method claims. [LINK] [via PatentHawk]
  • See the Forest: A new IP analytics site titled “See the Forest” is lets you create some interesting patent maps: http://see-the-forest.com.  The company behind the site is IPVision.

    •  

    CAFC Continues to Expand Doctrine of Full Scope Enablement

    Enablement, Patent, ,

    ScreenShot028Sitrick v. Dreamworks (Fed. Cir. 2008)

    Sitrick’s patented invention involves a method for a integrating user-generated audio and visual effects into a video game or movie. The solo-inventor sued Dreamworks and other defendants who use the “ReVoice Studio” software to allow users to add their own voice to the imagery.  The issue on appeal is whether the asserted claims are enabled under 35 U.S.C. 112 ¶ 1.

    Full Scope Enablement: Although loosely tied to the patent statute — the enablement requirement continues to grow and develop through Federal Circuit panel opinions.  Generally, the “requirement is satisfied when one skilled in the art, after reading the specification, could practice the claimed invention without undue experimentation.”

    When analyzing enablement, the court looks to ensure that the “full scope of the invention” is enabled — and thus looking beyond whether the particular accused design is enabled. The “full scope” doctrine has recently been applied by the Federal Circuit to invalidate several patents. (See below)

    Broad Claim Narrow Disclosure: It is easy to criticize patentees who attempt to enforce broad claims supported only by a narrow disclosure. This is especially true in cases such as Liebel’s where the claim scope had been expanded well after filing the original application. (i.e., “late claiming”).

    However, the “full scope” doctrine has serious deficiencies. The most notable are the potentially chaotic results from applying the doctrine to claims that include the comprising transition language.  The problem arises because the comprising transition allows a claim to implicitly encompass a wide variety of add on limitations that might be found in an infringing device. See, for example Automotive Technologies Int’l v. BMW (Fed. Cir. 2007) (claim scope that implicitly covered both mechanical and electrical sensor was not enabled by description of mechanical sensor); Liebel-Flarsheim v. Medrad (Fed. Cir. 2007) (claim scope that implicitly covered both jacketed and jacket-free needle holders was not enabled by description of jacketed needle holders).

    Here, the asserted claims were construed as covering both movies and video games. Thus, the patent must enable both types of applications. Here, the CAFC confirmed that Sitrick had failed to enable its use in movies — and thus that the claims are not fully enabled.

    • Buyer Beware: As with other recent enablement cases, this one may be best seen through the lens of the claim construction process. In each case, the patentee requested (or at least did not challenge) broad claim construction.  Consequently, the court was not sympathetic to enablement arguments that could have been avoided by a narrower construction of the claims. This line of thinking was spelled out by Judge Laurie in the Liebel case: “The irony of this situation is that Liebel successfully pressed to have its claims include a jacketless system, but, having won that battle, it then had to show that such a claim was fully enabled, a challenge it could not meet. The motto, “beware of what one asks for,” might be applicable here.”  This buyer beware theory is also useful to break the potential analytical morass of full scope enablement of claims drafted with comprising transitions. 
    • Don’t Begin with the Specification: One aspect of enablement that is continually bothersome. In the opinion, the court noted that “enablement analysis begins with the disclosure in the specification.”  That approach unduly confuses enablement with written description. Rather, I would contend that enablement should begin with the knowledge of one skilled in the art and move forward from there.
    • Johnson v. M’Intosh: In my property law class, we recently discussed Johnson v. M’Intosh and the doctrine of of sovereign authorized discovery of land. In those empire building years, we also saw over-zealous claiming.
    • David Sitrick: The inventor, David Sitrick, is a Skokie based patent attorney registered with the firm of Sitrick & Sitrick. (Reg. No. 29349).  Mr. Sitrick prosecuted the patent himself. His son, Greg Sitrick, is an associate at the Bell Boyd firm in Chicago. (Reg. No. 57195).

    Northern District of California’s New Patent Rules

    Patent

    Patent.Law059by Edward Reines

    The Northern District Of California posted on Friday substantially revised patent rules that apply to all cases filed on or after March 1, 2008.   ND Cal pioneered the first set of patent rules in 2001, as the vision of Judge Ronald M. Whyte, a leading jurist in the patent field.    Since then, seven other Districts have followed and promulgated patent rules that are modeled to a greater or lesser extent on those original rules. 

    ND Cal’s new 2008 patent rules feature two significant changes and a number of other updates.  First, the new rules require the parties to identify together the claim construction disputes that are most significant to the outcome of the case, including an identification of which may be case dispositive.  By default, under the new rules, the number of most significant terms (“MST”) to be identified by the parties is ten, but that number can be scaled by the court to suit the needs of each particular case.   The purpose of this new rule is to address the concern that parties identify too many terms, including many insignificant terms, for construction.   By identifying MSTs, resources can be focused on the most important issues without a court outrightedly capping the number of terms to be construed.  

    Second, the new rules eliminate the concept of “preliminary” contentions in favor of a single round of contentions which can be modified only for good cause.    Many had critiqued the old rules as allowing changes “as of right” in circumstances where such changes are not in fact warranted, while also creating undue barriers to their amendment when the circumstances did warrant modification.   For guidance, the new rules set forth recurring circumstances where the good faith standard might be satisfied.  

    The efficacy of the new rules will, in the end, be judged by the test of time.  In any event, the ND Cal judges deserve credit for staying at the forefront of case management innovation in the complex world of patent litigation.  The District has published on its website a committee report that provides helpful background on how the new rules were developed and explains the intent behind the changes that have been adopted.  

    • Ed Reines is a partner at the Weil Gotshal firm. He chaired the Northern District’s Local Rules Advisory Committee.
    • Read the Rules:Patent Rules2008.pdfCommittee Report.pdf

     

    TiVo Wins on Appeal: Permanent Injunction against EchoStar to be Reinstated

    Patent

    PatentLawPic184TiVo v. EchoStar (Fed. Cir. 2008)

    Around the turn of the century, TiVo’s time shifting DVR television technology took the world by storm and has since become immensely popular.  In 2004, TiVo sued EchoStar and others in the Eastern District of Texas for infringement of its patent claims directed at the DVR hardware and software. EchoStar was found to infringe both the hardware and software claims. The Jury then awarded $73 million in damages and the judge ordered a permanent injunction to stop future infringement.

    On appeal, the CAFC used thirty pages of dense claim construction to conclude that the hardware claims were not infringed but that the software claims were infringed.

    The jury’s damage calculation did not divide out the portion of damages associated with the hardware invention and the portion associated with the software invention. Consequently, the court found that infringement of the software claims alone is still sufficient to sustain the entire $73 million judgment.

    Because the damages calculation at trial was not predicated on the infringement of particular claims, and because we have upheld the jury’s verdict that all of the accused devices infringe the software claims, we affirm the damages award entered by the district court.

    As reported, Chief Judge Michel stayed the permanent injunction pending resolution of this appeal. According to the court, that stay “will dissolve when this appeal becomes final.” The lower court will, however, need to add additional damages based on continued infringement during the appeal.

    Notes:

    • EchoStar operates the DISH Network brand of satellite television.
    • TiVo has partnered with DIRECTV, DISH Network’s biggest competitor.
    • Part of the claim construction dispute centered on whether the claimed element “an MPEG stream” should be limited to a single MPEG stream.  Here, the CAFC rejected the traditional rule that “a” or “an” mean one or more. Instead, the Court made an unusual ruling here because “the context clearly evidences that the usage is limited to the singular.”
    • EchoStar (DISH) released the following press release, stating that the injunction is meaningless: “We are pleased the Federal Circuit found for us on Tivo’s hardware claims, but are disappointed in the Federal Circuit’s decision on the software claims. The decision, however, will have no effect on our current or future customers because EchoStar’s engineers have developed and deployed ‘next-generation’ DVR software to our customers’ DVRs. This improved software is fully operational, has been automatically downloaded to current customers, and does not infringe the Tivo patent at issue in the Federal Circuit’s ruling. All DISH Network customers can continue to use their DVRs without any interruption or changes to the award-winning DVR features and services provided by DISH Network”
    • Echostar stock (NASDAQ: SATS) fell immediately upon news of the decision, but quickly rose again.

    CAFC Allows Lost Profit Damages Based on Defendant’s “Offer to Sell” Infringing Product

    Patent,

    Patent.Law057American Seating v. USSC (Fed. Cir. 2008)

    Under 35 U.S.C. Section 271(a), offering to sell a patented invention is a form of patent infringement. This case examines, inter alia, what damages might ensue from such “on sale” activities even when an infringing product is not actually manufactured or sold.

    In a separate part of the case, USSC’s VPRo-I wheelchair tiedowns for mass transit were found to infringe a patent held by American Seating.  At some point, USSC stopped selling the VPRo-I and switched to a non-infringing design (presumably to avoid infringement). For pending VPRo-I orders, USSC simply notified customers that the new design would serve as a substitute.

    After finding the patent valid and infringed by the offer to sell, the Michigan jury awarded American Seating lost profit damages based on the USSC’s non-infringing sales “because in those cases USSC first made infringing offers to sell the VPRo I, but ultimately delivered the [non-infringing] VPRo II.”

    On appeal, the CAFC affirmed that a damage award for the non-infringing sales was appropriate because USSC had essentially pulled a bait-and-switch on its customers. Although courts have “significant latitude” in types of harms that can lead to an award of lost profits. However, plaintiffs must at least prove that the infringement was a “but for” cause of the lost profits.

    The Federal Circuit’s 1999 Grain Processing decision also dealt with cases where the an infringing product was not actually sold. In that case, the court held that lost profit damages should only be available when the the product sold is not a substitute for the infringing product. Thus, lost profits would not be available if the replacement was “acceptable to all purchasers of the infringing product.” American Seating provided evidence that some customers had complained about the new model — thus proving that it was not an adequate.

    Thus, the CAFC affirmed the lost profit award — finding that “absent USSC’s offer to sell the [infringing] VPRO-I, the sales would have gone to American Seating.”

    Notes:

    • Look for a follow-up post on this case in the coming days discussing other lost profit issues, including damages for “collateral sales”  and a discussion of public use under 102(b).

    Patently-O Bits and Bytes No. 8

    Patent
    • Upcoming Events:
    • Web Seminar on the implications of Nuijten and Comiskey on Business Method Patenting on Feb 14, 2008 hosted by the World Research Group (WRG) [Link] Patently-O readers receive a 20% discount with code NGD759.  (Regularly $299).
    • Web Seminar on Tafas v. Dudas on Feb 5, 2008 hosted by the Washington Legal Foundation (WLF). (FREE)
    • Cambridge, MA: Feb 14, 2008, PIUG 2008 Boston Biotechnology Meeting hosted by Genzyme. $50 registration fee (must register by Feb 7).
  • Nuijten and Comiskey are mentioned above. These cases are still under consideration at the CAFC for en banc rehearing.  Although rehearings are usually denied, one of these cases (or a consolidation) will likely be re-heard en banc — especially considering the mixed messages that patentees and the public have received regarding patents the extent that patent scope may be divorced from any specific technological innovation. Two other cases, Bilski (Bryson, Clevenger, Moore) and Ferguson, are still pending as well.
  • Speaker Needed: Cyberlaw and Data Privacy Committee needs a speaker for February 19.

    • Claim Interpretation Should Include Disclosed Embodiments

    Claim Construction, Patent

    Oatey v. IPS (Fed. Cir. 2008)

    PatentLawPic179Oatey’s asserted claim is directed to a washing machine drain with “first and second juxtaposed drain ports.”  The patentee originally lost on summary judgment of noninfringement because the district court construed that element to require “two separate identifiable physical elements” and not simply a single divided drain port. Thus, the lower court agreed that the claim would cover the design showed in Figure 2 of the patent, but excluded the design shown in Figure 3.

    PatentLawPic180On appeal, the CAFC reversed. Writing for a unanimous panel, Judge Newman held that absent disclaimer or estoppel, claims should normally be interpreted to include disclosed embodiments.

    We normally do not interpret claim terms in a way that excludes embodiments disclosed in the specification. . . . At leas[t] where claims can reasonably [be] interpreted to include a specific embodiment, it is incorrect to construe the claims to exclude that embodiment, absent probative evidence on the contrary.

    Because there was no evidence of disclaimer or prosecution history estoppel, Judge Newman found that the claim must be given a broader construction.

    Notes:

    Patent Refom: Unsettling Rights

    Patent, Patent Legislation,

    Patent.Law056By Dennis Crouch

    There have been numerous reports calling the US Patent System broken or at least in need of severe repair. From my view, the greatest problems with US patent law arise because of its common lack of clearly drawn property lines.  In academic lingo, we call this a failure of the public notice function.  

    Examples of the fuzzy lines of patent law are well known to Patently-O readers and include the secret rights of unpublished patent applications; shifting rights that may be altered via extended prosecution, future continuing applications, and second look examination; and uncertain rights potentially crumbling under the vagaries of claim construction and obviousness jurisprudence.

    These problems are exacerbated in certain technology areas – such as electronics – by massively overlapping claims and speculators asserting patents in a seemingly more aggressive fashion.  At the same time, there is a strong consensus that these issues do not arise in the same fashion in the pharmaceutical and bio-technological areas. Pharmaceutical patent law is often heralded as an incredible success — especially in the post Hatch-Waxman days of strong generic competition.

    Now comes the Patent Reform Act of 2007. Unfortunately, the proposed patent reforms now being debated by the Senate do virtually noting to address these serious problems and instead potentially cause harm to the current regime.

    CAFC Chief Judge Michel has publicly discussed patent reform and its potential impact on the judicial process. Apart from the Chief’s particular quarrels with damage apportionment and expanded interlocutory appeals, he makes a particular point about the destabilizing effect of major Congressional patent reforms.  In the decades following reforms, each amended word will be litigated and eventually construed. Unfortunately, during the wait for new statutory interpretations, patent holders and accused infringers will be left guessing.  Judge Michel’s ultimate point is that changes in the property regime should only be made when we have a genuine reason to believe that the changes will improve the system as a whole.  For the majority of the proposed patent reforms, that case simply has not yet been made.

     

    Patently-O Bits and Bytes No. 7

    Patent
    • Patent Reform: The Senate has now placed the Patent Reform Act (S.1145) on the senate Calendar. [Link].  “Minority views” have been filed but are not yet available.
    • BPAI Composition: The CAFC has denied an en banc request in the Translogic case. That case challenged the legality of past BPAI appointment practices. [See Duffy]

    • Harmonization & Work Sharing: The PTO & JPO have announced a new bit of work-sharing cooperation. Under the agreement, a filing in one patent office would be deemed a filing in the partner office as well.  If successful, this proposal could eventually replace the PCT system. [LINK]
    • UK Patenting Computer Programs: A UK Court has now ordered the UK PTO to stop rejecting patents simply because they claim computer programs. [IPKAT]
    • Valuing Patents: Accountants don’t know how to place a value on patents. The solution appears to be an arbitrary standard. [LINK]

     

    Bt-Corn Patent Unenforceable Due to Failure to Submit Internal Employee Notes

    Patent,

    PatentLawPic167Monsanto v. Bayer (Fed. Cir. 2008)

    Bayer holds several patents relating to genetically modified Bt corn.  This case arose when Monsanto sued Bayer in Missouri for a declaratory judgment stating that the patents were not infringed; invalid; and unenforceable.  The Eastern District of Missouri Court (Judge Webber) held all the patents unenforceable due to inequitable conduct during prosecution. On appeal, the Federal Circuit affirmed the holding of unenforceability.

    Bt corn contains a gene that codes for Bt toxin — an insect repellent protein found naturally in Bacillus thuringiensis (Bt) bacteria. Bayer’s patents cover the chimeric Bt-plant-promoter gene; plant cells expressing Bt toxin; plants expressing Bt toxin; and the method of modifying plants to express Bt toxin.

    Notes from a Conference: Before Bayer’s patent application, another scientist (Dr. Wayne Barnes) attended a conference and presented a poster on Bt genetic issues.  One Bayer scientist attended the conference and took extensive notes from the poster. Those notes were given to other Bayer Bt scientists including the individual responsible for prosecuting Bayer’s patent applications.

    During prosecution, Bayer submitted Dr. Barnes Abstract, but did not submit the notes. According to the court, those notes were material because they provided evidence of Dr. Barnes disclosure. (A reasonable examiner would have considered them “important in deciding whether to allow the … application”). The inference of intent was easily made since Bayer took a position at the PTO that was directly refuted by information contained in the note.

    Not Prior Art: One important – but unstated – aspect of this case is that the notes are not prior art. Rather, in this case the prior art was the publicly displayed poster.  Thus, the reminder: Rule 56 requires submission of prior art as well as information about the prior art that is either (1) material to patentabilty or (2) a reasonable examiner would consider important in deciding whether to allow the application. 

    Declaratory Judgment Power: Monsanto filed its DJ action against four Bayer patents. In response, Bayer provided a “statement of non-liability” along with a promise not to sue Monsanto on three of the patents. Under CAFC precedent, such a statement normally removes a court’s jurisdiction over those patents — except where, as here, the court retains separate jurisdiction based on a Section 285 request for attorney fees. Thus, because the patents are still before the court, it retains jurisdiction to hold them unenforceable. In addition, the CAFC noted that the recent Nilssen case also allows a court to hold patents unenforceable even after being dropped from the lawsuit.

    Patently-O Bits and Bytes No. 6.

    Patent, Patent Legislation
    • Patent Reform in February: Hal Wegner notes “widespread predictions” that Senator Leahy now has enough votes to push the Patent Reform Act through the Senate.
    • Patent Reform Writeup: Professor Jay Thomas (Georgetown) is also tasked as the IP guy for the Congressional Research Service (CRS). In that capacity, Thomas has taken to explaining some of the pros and cons of the Patent Reform Acts of 2007. (HR 1908; S 1145).  [CRS REPORT ON PATENT REFORM] According to Thomas: “The provisions of the proposed legislation would arguably work the most sweeping reforms to the U.S. patent system since the nineteenth century.”  Thomas does an excellent job of quickly discussing each proposed reform measure in language as neutral as he can muster.
    • PCT Seminar: April 25–26 Pierce Law will host its 10th annual Comprehensive PCT Seminar in Concord, NH. Cost is under $400 ($100 for students). Two of the leading PCT Experts Carol Bidwell and David Reed will lead the seminar. [LINK]
    • Position: Director of the Office of Technology Management and Industry Relations at the University of Missouri. (Join me in Columbia). “The University of Missouri, Columbia (MU) is seeking an innovative, energetic, and experienced individual to serve as Director of the Office of Technology Management and Industry Relations.” [LINK]

    IEEE Standards: FTC Finds Patent Enforcement “Unfair Competition” Based on Patentee’s Prior Offers to License

    Patent

    PatentLawPic166Federal Trade Commission v. N-Data (FTC Complaint and Settlement 2008)

    The FTC has announced both a complaint and settlement with the patent enforcement company N-Data. 

    N-Data had purchased Patent Nos. 5,617,418 and 5,687,174 from a distressed company (Vertical Networks) who had received the patents from National Semiconductor.  Both patents related to NWay ethernet technology that has become an IEEE standard. 

    An Encumbrance: National was interested in having its technology adopted as an IEEE standard. Consequently, prior to assigning away its patent rights, National wrote to the IEEE with a promise to “offer to license its NWay technology to any requesting party …. on a nondiscriminatory basis” for a one-time fee of $1,000. The evidence showed that each party in the chain of patent title were aware of those statements at the time of transfer.  Soon after the promise, IEEE adopted the NWay standard.

    Enforcement: Despite the $1,000 license promise by its predecessor, Vertical (and subsequently N-Data) began enforcement proceedings — asking rather for a reasonable royalty totaling approximately $20 million per year.

    FTC Complaint:  In a 3–2 decision, the five-member FTC voted to issue a complaint against N-Data’s activities under Section 5 of the FTC Act.  That section provides the Commission with authority to stop unfair methods of competition and deceptive commercial practices.  The Majority opinion particularly noted the problem of “lock-in”: “Respondent engaged in conduct that was both oppressive and coercive when it engaged in efforts to exploit licensees that were locked into a technology by the adoption of a standard.” 

    This holding is notable because there is no finding that N-Data had monopoly power or any antitrust liability. Consequently, Chairman Majoras (writing in dissent) had difficulty finding any oppression.  Majoras likewise had difficulty characterizing the sophisticated corporate players on the IEEE committee as “victims.” “The novel use of our consumer protection authority to protect large corporate members of a standard-setting organization is insupportable.”

    N-Data chose not to fight and has agreed to the majority findings.