Patently-O Bits and Bytes No. 5

Patent,
  • PatentLawPic158Majority Leader Harry Reid Plans to Move Quickly on Patent Reform: In the first work period of the Senate, Reid intends to move on patent reform (after handling the defense appropriations bill and economic stimulus). “Once we work these issues out, time permitting, we will also turn to two other priorities in this first work period: patent reform and an energy package.”  Perhaps appropriately, Reid’s concept of invention is tied-up with entrepreneurs: “On patent reform, we must carefully strike the right balance with a bill that promotes rather than blocks innovation from enterprising entrepreneurs.”  In Reid’s view, the bills should have become law in 2007: “If not for the obstruction of just a few Senators, we would have passed these bills last year. I am hopeful that the overwhelming majority of Senators – Democrats and Republicans alike – will have their voices heard this year.” [Zura]
  • ScreenShot024Comments for Japanese Patent Office: The JPO recently established a Policy Committee and have a schedule to recommend JPO policy changes in a report in April/May 2008. The Committee has generated broad goals of (1) a global system; (2) a predictable system; and (3) a system that promotes both creation and utilization. Comments on the goals and potential solutions are requested by Feb 25 (Japan time). [More Info] [Committee Broad Goals and Plan]
  • PatentLawPic157Patent Bar Exam: Patent Agent Alex Nix has created an excellent wiki to help those studying for the Patent Registration Exam: www.PatentBarQuestions.com. Learn and Contribute!

To the Congress of the United States: I am transmitting to the Congress today a legislative proposal entitled, the “National Productivity and Innovation Act of 1983.” The bill would modify the Federal antitrust and intellectual property laws in ways that will enhance this country’s productivity and the competitiveness of U.S. industries in international markets. As you know, one of the most important goals of my Administration has been to revitalize the competitiveness and productivity of American industry. Tax cuts proposed by my Administration and enacted during the 97th Congress have greatly stimulated economic activity. In addition, our efforts to rationalize Federal rules and regulations have significantly enhanced the efficiency of our economy. For the first time in over a decade, there exists the foundation for a period of strong and sustained economic growth. The ability of the United States to improve productivity and industrial competitiveness will also depend largely on our ability to create and develop new technologies. Advances in technology provide our economy with the means to produce new or improved goods and services and to produce at lower cost those goods and services already on the market. It is difficult to overstate the importance of technological development to a strong and healthy United States economy. It has been estimated that advances in scientific and technological knowledge have been responsible for almost half of the increase in this country’s labor productivity over the last 50 years. New technology also creates new jobs and gives us an advantage in world markets. For example, the U.S. computer industry, which was in its infancy just a short time ago, directly provides jobs for about 830,000 Americans and is a leader in world markets. The private and public sectors must spend a great deal of time, money, and effort to discover and develop new technologies. My Administration has moved to bolster research and development (R&D) in the public sector by proposing in our 1984 budget to increase Federal funding of R&D by 17 percent, to $47 billion. However, it is vital that our laws affecting the creation and development of new technologies properly encourage private sector R&D as well. The Economic Recovery Tax Act of 1981 provides a 25 percent tax credit to encourage firms to invest in additional R&D. Our economic program has helped reduce inflation and interest rates and thus has lowered substantially the cost of conducting research. The antitrust and intellectual property laws also have a very significant effect on private investment in R&D. The antitrust laws are designed to protect consumers from anti-competitive conduct. While the economy generally benefits most from vigorous competition among independent businesses, the antitrust laws recognize that in some areas, like the creation and development of technology, cooperation among producers, even competitors, can actually serve to maximize the well-being of consumers. The intellectual property laws, for example, those dealing with patents and copyrights, also serve to promote the interests of consumers. The promise of the financial reward provided by exclusive rights to intellectual property induces individuals to compete to create and develop new and useful technologies. After reviewing the effect of the antitrust and intellectual property laws on the creation and development of new technologies and after consultations with key members of Congress, I have concluded that the antitrust laws can be clarified in some respects and modified in other respects to stimulate significantly private sector R&D. This can be done while maintaining strong safeguards to protect the economy against collusive actions that would improperly restrict competition. The National Productivity and Innovation Act of 1983, which embodies those changes, is a package of four substantive proposals that deals with all phases of the innovation process. Title II of the bill would ensure that the antitrust laws do not unnecessarily inhibit United States firms from pooling their resources to engage jointly in procompetitive R&D projects. Joint ventures often may be necessary to reduce the risk and cost associated with R&D. So long as the venture does not threaten to facilitate price fixing or to reduce innovation, such ventures do not violate the antitrust laws. Nevertheless, the risk remains that some courts may not fully appreciate the beneficial aspects of joint R&D. This risk is unnecessarily magnified by the fact that a successful antitrust claimant is automatically entitled to three times the damages actually suffered. Title II would alleviate the adverse deterrent effect that this risk may have on procompetitive joint R&D ventures. This title provides that the courts may not find that a joint R&D venture violates the antitrust laws without first considering its procompetitive benefits. In addition, Title II provides that a joint R&D venture that has been fully disclosed to the Department of Justice and the Federal Trade Commission may be sued only for the actual damage caused by its conduct plus prejudgment interest. This combination of changes will encourage the formation of procompetitive joint R&D ventures. And unlike some other proposals currently before Congress, it will do so with the minimal amount of bureaucratic interference in the functioning of those ventures. If we are to assure that our laws stimulate investment in new technologies, however, it is not enough merely to correct the adverse deterrent effect the antitrust laws may have on procompetitive joint R&D. Rather, we must also assure that the antitrust and intellectual property laws allow — indeed encourage — those who create new technologies to bring their technology to market in the most efficient manner. Only in this way can those who invest their time, money, and effort in R&D be assured of earning the maximum legitimate reward. Titles III and IV recognize that very frequently the most efficient way to develop new technology is to license that technology to others. Licensing can enable intellectual property owners to employ the superior ability of other enterprises to market technology more quickly at lower cost. This can be particularly important for small businesses that do not have the ability to develop all possible applications of new technologies by themselves. However, the courts have not always been sympathetic to these procompetitive benefits of licensing. Title III would prohibit courts from finding that an intellectual property licensing arrangement violates the antitrust laws without first considering its procompetitive benefits. In addition, the title would eliminate the potential of treble damage liability under the antitrust laws for intellectual property licensing. Although those who suffer antitrust injury as a result of licensing would still be able to sue for their actual damages plus prejudgment interest, Title III would minimize the deterrence that the antitrust laws currently may have on potentially beneficial licensing of technology. Title IV would also encourage the procompetitive licensing of intellectual property. Pursuant to this title, the courts may refuse to enforce a valid patent or copyright on the ground of misuse only after considering meaningful economic analysis. Finally, Title V will close a loophole in the patent laws that has discouraged investment in efficiency-enhancing technologies. Creation of and improvements in the process of making products can be just as important as creating and improving the product itself. Currently, if someone uses a United States process patent outside this country without the owner’s consent and then imports the resulting product into the United States, the importer is not guilty of infringement. Title V of the bill would close this loophole so that owners of process patents can earn their rightful reward by preventing the unauthorized use of their technology. We must not delay making the necessary changes in the law to encourage the creation and development of new technology, to increase this country’s productivity, and to enable our industries to compete more effectively in international markets. We must act now. I therefore urge prompt consideration and passage of this legislative proposal. Ronald Reagan The White House, September 12, 1983. —–

Patently-O Bits and Bytes No. 4

Patent
  • Patent Reform: The influential Intellectual Property Owners association (IPO) recently reported its belief that the Senator Leahy will “attempt to pass a revised version of S. 1145 in the Senate in February.”  The Bill has already successfully passed through the Senate judiciary committee. [www.ipo.org]
  • RelatIP: An “online community tailored exclusively to the unique requirements of intellectual property (IP) attorneys.” [www.relatIP.com]. 
  • Facebook: To meet Patently-O readers, join the Patently-O Facebook Group.
  • Patent Troll Tracker Concedes: The Patent Troll Tracker is tired of the “kerfuffle” and plans to limit use of the occasionally offensive term troll.  PTT’s specialty is sifting through the chain of shell corporations used by patent enforcers.  Feeling the fire, Ray Niro’s $10,000 reward is reportedly dangerously close achieving success — unmasking the identity of the troll tracker.  See McIntyre v. Ohio Elections Commission (“Protections for anonymous speech are vital to democratic discourse. Allowing dissenters to shield their identities frees them to express critical, minority views . . . Anonymity is a shield from the tyranny of the majority. . . . It thus exemplifies the purpose behind the Bill of Rights, and of the First Amendment in particular: to protect unpopular individuals from retaliation . . . at the hand of an intolerant society.”). (Image of Hamilton as the anonymous Publius).

Innogenetics: Forward Looking Damages Approved

Patent,

ScreenShot002The injunction decision in Innogenetics deserves a second look. In that case, the Federal Circuit closely examined the Wisconsin District Court’s award of both injunctive relief and $1.2 million in forward looking damages.

The $7 million total damage award was divided into two parts by the jury: a $5.8 million “market entry fee” and a $1.2 million “ongoing royalty payment.”*  This award “exactly tracked” the damage award proposed by the patentee’s expert and also fit within the jury instructions, which called for “both an up-front payment and an ongoing royalty payment.” 

In addition to receiving a lump-sum to cover ongoing royalties, the District Court also awarded an injunction to stop ongoing infringement.  On appeal, the CAFC rejected this double-dipping. In her opinion, however, Judge Moore, was careful to cast the reversal in the language of eBay v. MercExchange.  Thus, the appellate panel held that a patentee who asked for and received future licensing royalties has no standing to complain of irreparable harm.

The reasonable royalties awarded to Innogenetics include an up-front entry fee that contemplates or is based upon future sales by Abbott in a long term market. When a patentee requests and receives such compensation, it cannot be heard to complain that it will be irreparably harmed by future sales.

Although the court did not use the words, the rule here appears to be akin to that of equitable estoppel.  This is a simple case for the appellate panel because the patentee asked for the forward looking damages.  However, the panel also implicitly accepts forward looking damages as an adequate substitute for injunctive relief.  The collection of damages negates irreparable harm — the most important eBay factor.**

On remand, the CAFC also appears to have vacated the lump-sum future sale damages. Without discussion, the appellate panel ordered that the district court instead implement a compulsory license with a running royalty payment. The only clue to the court’s reasoning lies in Footnote 9, which notes that the shift to a running royalty would allow the district court to retain jurisdiction to “ensure the terms of the compulsory license are complied with.” 

Notes:

Design Patents: Claim Construction Rules Lead to Summary Judgment of Non-Infringement

Patent,

ScreenShot001

One question to be answered in the upcoming Egyptian Goddess en banc rehearing is whether Markman style claim construction should apply to design patent cases.  George Raynal, an associate at the Saidman firm, took a look at the practical impact of such claim construction: summary judgment.

by George Raynal

The effect of applying Markman to design patent claim construction prior to determining infringement has resulted in an overwhelming likelihood that an accused infringer will bring a successful motion for summary judgment of non-infringement.  < ?xml:namespace prefix ="" o />

In a survey, 63 design patent infringement cases have been identified since Markman was first applied to a design patent claim in Elmer v. ICC Fabricating, Inc., 67 F.3d 1571 (Fed. Cir. 1995).  Of these, the accused infringer moved for summary judgment of non-infringement in 43 cases.  The movant was successful in 31 (72%)[1] of those 43 cases, whereas the motion for summary judgment of non-infringement was denied only 12[2] times.  Of the successful 31, ten[3] were appealed and only one[4] of those ten was reversed because the court could not agree that no reasonable jury could find infringement based on the record. 

Additionally, summary judgment of infringement has been granted in only four design patent infringement cases since Elmer.[5]  A motion for summary judgment of infringement has been denied once.[6] (more…)

Appealing the Kitchen Sink

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Innogenetics v. Abbott Labs (Fed. Cir. 2008).

Innogenetics holds a patent covering a method of detecting Hepatitis C Virus (HCV) using hybridizing probes complementary to the 5’ untranslated region of HCV. The patent was found infringed and not invalid.

On appeal, Abbott follows the currently favored “kitchen sink” approach:

On appeal, Abbott challenges a myriad of issues, including the district court’s claim construction [of the word “as”], summary judgment of literal infringement, evidentiary exclusions as to Abbott’s obviousness and anticipation defenses, judgment as a matter of law that the Resnick patent did not anticipate claim 1 of the ’704 patent, summary judgment of no inequitable conduct, award of attorney’s fees to Innogenetics for Abbott’s counterclaim of inequitable conduct due to its exceptionality, and grant of a permanent injunction.

The appellate panel patiently discussed each issue. Here, we only discuss a few:

Infringement by Later-Invented Technology: Abbott proposed that it could not infringe because its particular “Realtime PCR” method of detecting HCV had not yet been invented at the time of the patent application.  Although the CAFC held that Abbott had procedurally forfeited that argument, the appellate body also noted that the argument is “lacks merit.”

Essentially, Abbott argues that a patent can never be literally infringed by embodiments that did not exist at the time of filing. Our case law allows for after-arising technology to be captured within the literal scope of valid claims that are drafted broadly enough. See SuperGuide Corp. v. DirecTV Enters., Inc., 358 F.3d 870, 878-80 (Fed. Cir. 2004).

Late Disclosure: Abbott disclosed a prior art reference (the Cha patent) the day before discover closed (and after all depositions had been completed). Then, on the day before trial, Abbott requested that the jury instructions be amended to include the Cha patent as an anticipatory reference.  The district court denied Abbott’s motion as unduly late and prejudicial to Innogenetics. On appeal, the CAFC affirmed — taking Abbott to task for its hard litigation tactics.

This case aptly demonstrates the pitfalls of playing fast and loose with rules of discovery. Conclusory expert reports, eleventh hour disclosures, and attempts to proffer expert testimony without compliance with Rule 26 violate both the rules and principles of discovery, and the obligations lawyers have to the court. Exclusion and forfeiture are appropriate consequences to avoid repeated occurrences of such manipulation of the litigation process.

Anticipation: The kitchen sink tactic worked — The CAFC did agree with Abbott that its expert’s testimony on anticipation had been improperly disregarded. The district court had disregard the testimony – finding that the expert had based his conclusions on an incorrect understand of the claim term ‘genotyping.’  On appeal, the CAFC used its own knowledge of biotech law to find that the district court’s findings on this issue were ‘clearly erroneous.’ Consequently, Abbott gets a new trial on the issue of anticipation.

Injunctive Relief: The plaintiff agreed to jury instructions that would allow the jury to award both past and future damages. The award of $7 million appeared to include both past and future damages. In addition, the court issued an injunction to halt future infringement. On appeal, the CAFC held that the plaintiff was improperly double-dipping — a patentee may not collect a lump-sum for future damages and, at the same time, be awarded injunctive relief to stop future infringement.

The reasonable royalties awarded to Innogenetics include an upfront entry fee that contemplates or is based upon future sales by Abbott in a long term market. When a patentee requests and receives such compensation, it cannot be heard to complain that it will be irreparably harmed by future sales. . . . As a result, the district court’s grant of an injunction prohibiting future sales of Abbott’s genotyping assay kits was an abuse of discretion and must be vacated.

Patent Reform and the Ethos of the American Inventor

Inventors, Patent, Patent Legislation

PatentLawPic138Although I understand the reality that most patent prosecution is handled on behalf of corporate assignees, I still hold a special place in my heart for the maverick American inventor.  Some might understand the slight pangs I felt when reading the inventorship section of the Senate report on patent reform.  The report suggests eliminating from the law “the antiquated notion that it is the inventor who files the application, not the company-assignee.” Perhaps it is time my thoughts of the American inventor to go the way of the Wild West and horse drawn carriages.

The Bill (S.1145) is intended to fix an understandable problem — that of inventors who fail to fulfill their contractual obligation to assign patent rights to the Corporate owner.  This is a serious problem as shown by the current issue of IPToday which includes a full-length article describing the complex set of hoops currently required to overcome these so called “problem inventors.” [LINK]

Beyond the sound-bites, the specific reform provisions are not so bad. The revised statute would allow an “obligated assignee” to file the patent application on its own behalf. An inventor’s oath is still required unless the “obligated inventor” is either unable or unwilling to sign. Under the provision, a patent cannot be challenged as invalid or unenforceable based on a corporations mistaken claim that the inventor had an obligation to assign.  The savings clause appears to also include protection against mistakes in correctly naming inventors in the application.

Quanta v. LG: Will the Supreme Court Clarify the Exhaustion Doctrine?

Patent,

Editorial and News by Charles R. Macedo, Joseph Casino, Michael Kasdan, and Howard Wizenfeld.

Today, for the first time in half a century, the Supreme Court heard oral argument on the extent to which a patentee can license its patents to different members of the same sales chain for the same product. [Transcript] In Quanta v. LG Electronics, the High Court heard arguments on whether a patentee can grant patent rights and at the same time contract around the exhaustion doctrine.  Further, the issue of whether patent exhaustion applies to method claims was also before the Court.  Charley Macedo attended the oral arguments to get a first hand impression of how the Supreme Court might deal with the issues related to patent exhaustion.

An interesting aspect of oral argument at the Supreme Court was the focus of the Justices on whether patent exhaustion is an issue of patent law, contract law, or antitrust law.  Justice Breyer’s questions appeared to suggest that, under contract law theories, a patentee should not be able to put a post customer restriction in a license because it would impose improper “equitable servitudes on chattel”.  He also suggested that placing such a restriction could violate antitrust law doctrines.  By contrast, Justice Roberts focused on whether exhaustion is a patent law or contract law doctrine.

In fact, the theory of patent exhaustion probably implicates both patent law and contract law.  It implicates patent law because, once an authorized sale is made, the patentee should have no further right to limit the sale of that item in commerce.  It implicates contract and antitrust law to the extent the patentee tries to impose an improper restriction in its license agreement.  Either way, the Supreme Court should preclude a patentee from contracting around the exhaustion doctrine.

The Justices were also interested in knowing why the exhaustion doctrine was codified in the Copyright Act but not in the 1952 Patent Act.  In this regard the Amici were unable to cite to any useful discussion.

During argument LGE also argued that the notices Intel sent to its customers were valid techniques of avoiding a defense of implied license.  LGE objected to the use of the exhaustion doctrine as an end-around to the defense of implied license.

The role of patent protection in the U.S. economy continues to remain important and should not be undermined.  However, once a patentee has authorized goods or services to be sold under its patent, it should not be entitled to obtain a second payment for the same patent.   The Supreme Court has a chance to reestablish this fundamental principle of U.S. Patent Law.  We will have to wait and see if the Court takes advantage of this opportunity.

Patently-O Bits and Bytes No. 3

Patent
  • Patent Prosecution Highway Pilot Program extends to include Canada, Korea, Japan, and Hong Kong. Under the program, allowed US claims can receive “accelerated examination” in the other patent offices. Likewise, cases seeking claims first allowed in the other countries will be “made special” in the US. (MPEP 708.02(a) procedures for a petition to make special do not apply here). [LINK]. [via “C’est é-p@tent!”]
  • Outside the Box v. Travel Caddy: In an non-precedential opinion, CAFC judges disagreed on the meaning of the claim term “between.” The majority (Archer & Bryson) held that the term “between” limited the location of a panel only to an area within two end points.  In dissent, Judge Dyk argued that the open claim transition “comprising” should be interpreted to allow infringement even if the panel extends beyind the end points. [LINK]
  • Quanta: Today, the Supreme Court is hearing Oral Arguments in the Quanta case. Three Supreme Court / IP veterans are handling the oral arguments: Maureen Mahoney (Quanta); Thomas Hungar (DOJ); Carter Phillips (LGE, patentee).
  • ACPC Conference: In-house patent counsel may enjoy the upcoming ACPC meeting in Santa Barbara, Jan 27–30. [Link]

Revisiting Foreign Infringing Activity

Patent

Patent.Law053CNET v. ETILIZE, 2007 U.S. Dist. LEXIS 87205 (N.D. Cal. 2007).

CNET sued Etilize for infringement of its patented method and system for creating an electronic website catalog.  

International Infringement: The accused infringer Etilize employs Pakistanis (in Pakistan) to manually comb the Internet and update its database of websites.

Method and System Claims: Because Etlilize performs some steps of the patented method outside of the US, it cannot be found to infringe the method claims under 35 U.S.C. 271(a).

On the other hand, CNET argued that the system claim would be infringed because the control and beneficial use of the system stems from the US. (NTP v. RIMM). On summary judgment, Judge Patel distinguished the RIMM decision and sided with the accused infringer. In particular, the court found that the claimed “system for creating” was not controlled or used by American end-users of the compiled data.

That a copy of the catalog is located on a server in the United States … does not change the fact that overall control of the data collection and catalog creation is exercised from Pakistan.

Import under 271(g): 35 U.S.C. 271(g) provides an additional avenue for capturing foreign infringement. That statute specifically charges importation of a product made by a patented process. Under Bayer v. Housey and NTP, this statute has been limited to physical products that have been manufactured.

Here, Judge Patel found that the electronic catalog (when stored on computer readable media) is a physical product and qualifies under 271(g).  In Microsoft v. AT&T, the Supreme Court followed the same analysis in holding that “a copy of Windows, not Windows in the abstract qualifies as a ‘component’ under 271(f).”

Federal Circuit Residency Requirements

Patent

PatentLawPic13228 USC 44(c) provides that any newly appointed Federal Circuit judge must live within fifty miles of the District of Columbia. This rule appears to unduly limit the judges that may be appointed to the CAFC.  Other circuits also have residency requirements, but those circuits serve only a limited geographic area. And, the geographic boundaries of the regional circuits are often quite large. The Tenth Circuit, for instance meets in Denver, but Judges may reside 900 miles away in southern Oklahoma. Likewise, the First Circuit, which sits in Boston, includes one judge who resides in Puerto Rico. The other ‘national’ appellate court — the DC Circuit — has no residency requirements.

The Senate’s version of Patent Reform would eliminate the Federal Circuit residency requirement. From the Committee Report:

Without casting any aspersions on the current occupants of the Federal Circuit bench, the Committee believes that having an entire nation of talent to draw upon in selecting these judges could only be a benefit. The duty stations of the Federal Circuit judges will, of course, remain in the District of Columbia. Judges in regional circuits often travel considerable distances for court sessions within the circuit, far from their homes and chambers, and there is no practical reason why Federal Circuit judges could not do so as well. Discussion of changes Section 11 of the Act eliminates the residency restriction for Federal Circuit judges by repealing the relevant portion of subsection 44(c) of title 28.

Hal Wegner has often argued that the geographic limitation should be eliminated:

“There should be no special geographic limitation on the residence of Federal Circuit judges. To those who would say that it is important that judges live close to a central courthouse to be with all their colleagues[, that notion] goes against the reality of most circuits. For example, the Seventh Circuit sits in Chicago, yet six of the regular members of the court have chambers outside Illinois, four in Wisconsin and two in Indiana. The Third Circuit, which generally meets in Philadelphia, has members with chambers in New Jersey and Delaware, and one with chambers 300 miles away in Pittsburgh.”

The appointment process will be especially important over the next several years as several of the current judges move to senior status. Within two years, most of the current judges will be eligible for senior status.  (I sincerely hope that these experienced judges continue their decisions without slowing down.)

Claim Construction: CAFC Cautions Co-Interpretation of System and Method Elements.

Patent

PatentLawPic133Baldwin Graphics v. Siebert (Fed. Cir. 2008). [UPDATED 1/15/08 7:30pm]

Judge Moran of the Northern District of Illinois granted Siebert’s motion for summary judgment of non-infringement — finding that Baldwin’s patented printing press cleaning system and method did not extend to cover Siebert’s products. On appeal, the CAFC reversed the district court’s claim construction and remanded.

“A” Means One or More: In a well tred battle, the CAFC found that the lower court had mistakenly limited the claim element of “a pre-soaked fabric roll” to only allow for a single fabric roll.  This follows the general rule that “a” or “an” are interpreted as “one or more.”  Exceptions do apply, but only when the patentee has shown “clear intent” to limit the meaning of those articles. As a corollary, later use of “the” or “said” when referring to the element either in the patent or in PTO correspondence does nothing to alter the rule.

System versus Method Elements: The parties agreed that the system element “reduced air content cleaning fabric” was substantially similar to the method of “reducing air content of a cleaning fabric.”  Judge Moran interpreted these together and required that the system element also have reduced air content “prior to being wound.” On appeal, the CAFC cautioned district courts about joint interpretation of system and method claims and found that the lower court had improperly imported a limitation into the system.

Patently-O Bits and Bytes No. 2

Patent,
  • Patent Reform: A draft report on S.1145 is available here.  [via PatentDocs]. Although currently supported by more Democrats than Republicans, this is a bipartisan bill that could pass. A summary:
  • Change the system to a “first-inventor-to-file” system;
  • Reduce patent damage awards;
  • Enhance post-grant opposition proceedings;
  • Provide for publication of all applications;
  • Allow for better third-party submissions;
  • Limit patent infringement venues;
  • Allow the PTO to set its own fees;
  • Remove the residency restriction for judges on the United States Court of Appeals for the
    Federal Circuit;
  • Authorize USPTO to require pre-filing patent searches and explanations;
  • Re-vamp the doctrine of inequitable conduct;
  • Clarify the rules on unintentional delays in filing;
  • Limit patent infringement liability for electronic check processing;and
  • End USPTO “fee diversion”.
  • Patent Reform: Remember, the House has already passed the companion bill. Passage could allow President Bush to ride out of office as the innovation president.
  • Patent Baristas discusses PTO’s “Suspicious Behavior” in the Tafas case.

    • Inequitable Conduct: Backdating in Patent Law

    Patent

    OccamASP v. IQ Hong Kong (E.D. Wisc. 2007)

    In 2001, Armament Systems (ASP) sued IQ Hong Kong and twenty-three other companies for infringement of its LED flashlight patent. (Patent No. 6,190,018).  Litigation was stayed while the PTO conducted a defendant-requested ex parte reexamination.  The patent subsequently was re-confirmed by the PTO as valid and litigation resumed in 2004.

    During reexamination, the inventor (and ASP president) submitted a Rule 131 declaration evidenced by an early sketch of the invention.

    Inequitable Conduct: The defendants allege that the sketch submitted during re-exam was a false document that had been fraudulently back-dated to overcome cited prior art.

    A patent applicant’s inequitable conduct during prosecution can render a patent unenforceable. Inequitable conduct is proven with (1) affirmative misrepresentations of material facts with (2) intent to deceive the PTO.  Because most PTO proceedings are ex parte, inequitable conduct has been seen as an important tool to ensure proper applicant behavior.

    ElectroStatic Detection: The defendants forensic expert used an ElectroStatic Detection Apparatus of the submitted sketch to uncover imprints of other sketches made on the same graph pad but with much later signature dates.  Using the physical evidence, the expert (former FBI chief of questioned documents) testified that it was a ‘near certainty’ that the submitted sketch had been falsely back-dated.

    The inventor disputed these charges and instead offered several alternative potential methods by which the imprints could have occurred. This amorphous story did not help his cause — as noted by the court:  “[The inventor’s] evidence, taken as a whole, demonstrates that ASP has offered shifting, inconsistent, and un-corroborated explanations to account for indentation of the later sketches on Q1. As such, the evidence undermines the credibility of the [new] explanation offered by [the inventor] for the first time a trial.”

    Occam’s Razor: Applying Occam’s Razor, the court sided with the simplest explanation — that of falsification.  As the basis for allowance, the submission was clearly material. Falsification secured a finding of intent. Thus, the court found the patent unenforceable for inequitable conduct.

     The case is now on appeal to the CAFC.

    Patently-O Bits and Bytes

    Bits and Bytes, Patent,

    Top Thirty Patent Law Programs (Ranked by Patently-O Hits!)

    Patent

    This post is silly, but still interesting. Below, I have listed a ranking of the top thirty law school patent programs based solely on the number of Patently-O* visits received from the associated university in the calendar year 2007. In theory, the number of hits has some correlation with the intensity of interest in patent law issues at the particular school. Of course, university computers represent only a small portion of the 2.8 million total hits received in 2007.

    Rank School Relative Score
    1 The George Washington University 100%
    2 University of Texas at Austin 75%
    3 DePaul University 74%
    4 Columbia University 72%
    5 University of Virginia 72%
    6 University of California at Berkeley 61%
    7 Harvard University 59%
    8 University of Tennessee 54%
    9 Cornell University 54%
    10 Boston University 52%
    11 Georgetown University 49%
    12 New York University 47%
    13 University of Houston 46%
    14 Stanford University 45%
    15 University of Missouri-Columbia 44%
    16 Washington University 42%
    17 University of Chicago 41%
    18 University of Iowa 41%
    19 Indiana University-Purdue University at Indy 39%
    20 Suffolk University 38%
    21 George Mason University 38%
    22 University of Richmond 35%
    23 University of Washington 33%
    24 Northwestern University 29%
    25 American University 29%
    26 Indiana University 29%
    27 University of Michigan 28%
    28 Santa Clara University 25%
    29 Ohio State University 24%
    30 University of Minnesota 23%

    There are many issues with this study. Here are a few: First, law school rankings are generally quite silly. Second, some schools may not use their name in their IP address — making them lose their ranking. This appears to be true of Franklin Pierce Law Center. Schools where students (and professors) primarily study away from campus building may also rank relatively lower.  Fourth, many of these hits come from the Technology Transfer office rather than the law school.

    Up next… Top Thirty Procrastinating IP Law Firms based on number of Patently-O hits…

    The Telephone Gambit: Chasing Alexander Graham Bell’s Secret

    Patent

    Telephone%20gambitby Seth Shulman

    I thank Dennis Crouch for letting me tell Patently-O readers directly about my latest book, The Telephone Gambit: Chasing Alexander Graham Bell’s Secret out this week from W.W. Norton.

    The book recounts my experience, while working for a year as a fellow at MIT’s Dibner Institute for the History of Science and Technology, of stumbling upon evidence that reveals a twisted mystery surrounding Alexander Graham Bell’s role in the invention of the telephone. Working from Bell’s laboratory notebooks and his voluminous correspondence, I soon found myself caught up in the surprising story behind the invention of the telephone: a tale of romance, unchecked ambition—and corruption at the U.S. Patent Office.

    In the book, I try to capture the feel of the rich and exciting time in which Bell lived at the second half of the 1800s. This was, after all, one of the true golden ages of invention. As Thomas Hughes notes in his classic historical work American Genesis, the number of U.S. patents issued each year during this period rose astronomically. Consider, for instance, that the U.S. Patent office issued 688 patents in 1846 but, by 1890 was issuing more than 26,000 annually. Talk about dramatic technological change!

    The rapid technological change emerging in a Victorian, horse-and-carriage era serves as the backdrop for my tale, but the focus of the book is tight: I wrote it as a kind of a nonfiction detective story, recounting my own story of becoming relatively obsessed with chasing down clues about Bell’s life and times in rare archives and artifact collections around the world to unravel the surprising and long-hidden truth about him.

    In the course of my research, I unearth a “smoking gun” that leaves little doubt that Bell furtively—and illegally—plagiarized his initial telephone design from his major competitor, Elisha Gray in his quest to secure what would become the most valuable U.S. patent ever issued. It is shown below. The sketch circled at the right appears in Alexander Graham Bell’s notebook on March 8, 1876, two days before his famous success calling to Watson in the next room. The circled inset on the left is a confidential patent filing (then called a caveat) rival inventor Elisha Gray had made at the U.S. Patent Office three weeks earlier.

    Bell.Smoking.Gun

    This is not the denouement of the story, but rather its start. When I discovered this connection, I decided to go back to all the primary documents to learn what I could about how Gray’s elegant and successful liquid transmitter design for the telephone could have ended up in Bell’s laboratory notebook. I wanted to know whether it could possibly be true that Bell plagiarized the telephone, how he could have gotten away with it, why Gray wouldn’t have contested his claim, and why we remember history the way we do. I shed light on all these questions as the story unfolds.

    Reviews are just starting to come in and they mostly very gratifying. Barnes & Noble Review just wrote “It’ll be stacked in the science shelves, but The Telephone Gambit might be an early contender for best thriller of the year…Shulman pulls it off, producing a book that’s rigorous, provocative, and, like any thriller worth its salt, a blast to read.” I hope the many readers of this site with expertise in patenting will give the book a look and feel free to share their perspective about the story with me via my website www.sethshulman.com.  

    Paper Posted to Non-Indexed FTP Site Not 102(b) Prior Art

    BPAI, Patent,

    Internet Gateway TechnologySRI Int’l v. Internet Security Systems (Fed. Cir. 2008).

    In Delaware federal court, SRI accused ISS of infringing four  patents relating live traffic analysis of computer network gateways.  On summary judgment, Judge Sue Robinson held the patents invalid — anticipated by SRI’s own prior work.

    In a split panel, the Federal Circuit vacated — finding a lack of evidence that SRI’s prior publication was sufficiently publicly available more than one year before the patent applications were filed.

    Event History:

    • Aug 1, 1997 — “Live Traffic” paper e-mailed to a conference chair and posted the paper on an accessible SRI FTP site as a “backup” for the conference chair. Paper remained on the FTP site for seven days.
    • Nov 10, 1997 — SRI displays the paper on its website.
    • Nov 9, 1998 — SRI files its patent application.

    Although 35 USC 102(b) contains no explicitly requirement of ‘public accessiblity’ of a prior printed publication, such accessibility has long been required and fills-out the definition of the term ‘publication.’

    In the 2006 Bruckelmyer case, the CAFC noted that public accessibility could be satisfied if a person who is “interested and ordinarily skilled in the subject matter” could locate the publication using “reasonable diligence.”  Otherwise hidden publications can often be considered accessible if they are somehow indexed or cataloged by subject.

    In Bruckelmyer, the court found that an unpublished Canadian patent document was sufficiently accessible because it was related to an on-point issued patent and could be retrieved at the Canadian patent office.

    In this case, the court found insufficient evidence to rule on summary judgment. The FTP server was publicly accessible. However, it was uncataloged and would have been difficult to search. Additionally, only one non-SRI person (the conference chair) was shown to have knowledge of the paper on the FTP site.

    Thus, the court vacated summary judgment for further development of the facts.

    Judge Moore dissented — arguing forcefully that the facts showed public accessibility of the FTP site. (For instance, the FTP site had been used previously and was linked-to from over 70 Google Group posts). Procedurally, Judge Moore also faulted SRI for failing to present any facts on its side (as opposed to attorney argument). Under Rule 56, an opposing party “must set forth specific facts showing that there is a genuine issue for trial.”

    Remembering Mark Banner

    Patent

    With regret, I report the passing of leading patent attorney Mark T. Banner. Mark was generous and helpful to me in my first few years of practice in Chicago. He was also an occasional Patently-O contributor.

    Mark T. Banner, a Partner in the law firm of Banner & Witcoff, Ltd., died in Tucson, Arizona, Sunday, December 30, at age 57. At the time of his death he was with his wife of thirty two years, Kathie German, and surrounded by those he loved and who loved him.

    Mark was a leader in the field of intellectual property law, specializing in jury trials of technologically complex cases for both plaintiffs and defendants across the country. He was an avid user of the latest technology in an effort to improve cost-effective trial presentations. Mark lectured frequently on patent law, trade secrets, and other intellectual property matters, as well as how to conduct patent trials. He served as a faculty member of the first National Institute of Trial Advocacy program specifically geared to patent litigation trial skills. He was also an adjunct professor at the John Marshall Law School and the Georgetown Law Center, teaching courses on patent law advocacy and enhanced use of technology in the trial of complex cases. Mark served as Chair of the American Bar Section of Intellectual Property Law, and was a bar course administrator for the Master Class on Appellate Advocacy, taught by the Hon. Paul R. Michel, Chief Judge, United States Court of Appeals for the Federal Circuit. For his work in intellectual property law, Mark was listed in Euromoney’s “Guide to the World’s Leading Patent Law Experts” and featured in The Best Lawyers in America, the Leading American Attorneys, The International Who’s Who of Patent Lawyers and the Illinois Super Lawyers.

    Mark received a B.A. degree from Purdue University and went on to receive his law degree from the John Marshall Law School, where he was a member of the Law Review and graduated with high honors.

    Those in the intellectual property law field know well Mark’s rich legacy of accomplishments and recognitions for those accomplishments. He spoke and published widely on the patent law and its importance to encouraging creativity and promoting the general welfare of our country. Those who knew him loved him for his wit, his integrity, his determination, his passion for life and his commitment to teaching.

    In addition to his wife, Mark is survived by his two sisters – Peggy (Mrs. James) Dau of Bartlesville, and Pamela (Mrs. Robert) Banner Krupka of Los Angeles, two brothers Donald J. (Helen) of Pueblo  (Colo.),Brian E. (Cathleen) of Washington, DC., his step-mother Jean Banner of Tucson,  and his step sisters Nancy (Mrs. Robert) Phipps of Nashville, Helen (Mrs. George) Smith of Atlanta, and Louise ( Mrs. Robert) Whitaker of Franklin  (Tenn.).

    A memorial service will be held in Chicago in January 2008.

    The family requests that memorials be made to the Donald W. Banner and Mark T. Banner Scholarship Fund at the John Marshall Law School (315 South Plymouth Court, Chicago IL 60604).