CAFC: Proving Utility Is Not Inventive

Patent, ,

PharmaStem Therapeutics, Inc. v. Viacell, Inc. (Fed. Cir. 2007)

PharmaStem sued six defendants for infringement of its broadly written patents covering cryopreserved umbilical cord stem cells useful for hematopoietic reconstitution. The defendants offer cryopreservation of umbilical cord blood to serve the donor later in life. A jury found infringement and validity, but the district court set aside the verdict — holding that the patents were not infringed.

Defendant’s Ads Not Specific Enough: The defendants advertised that their product would aid in hematopoietic reconstitution. However, the district court found (and the CAFC agreed) that the ads were insufficient to serve as an admission that the stem cells were “in an amount sufficient to effect hematopoietic reconstitution of a human adult” as required by the claims. This decision stands to reinforce the principle that a patentee must prove infringement of every limitation of every element of any asserted claim.

Infringe the Whole Claim: PharmaStem’s method claims include collecting, preserving, and using the stem cells .  The defendants, however, are only responsible for collecting and preserving the cells. Transplant physicians do the rest.

PharmaStem argued contributory infringement under 271(c) — alleging that the defendants sold or offered to sell a component of a patented method especially adapted for infringement. Of course, the defendants do not sell stem cell blood — rather they are “merely bailees”. Because 271(c) requires sale of a product, there is no infringement here.

Invention is Obvious: When asserting obviousness based on a combination of prior art references, the patent challenger must show that a PHOSITA “[1] would have had reason to attempt to … carry out the claimed process, and [2] would have had a reasonable expectation of success in doing so.”

Reason to attempt:

In view of the prior art references, the first part of that test is plainly satisfied here. The idea of using cryopreserved cord blood to effect hematopoietic reconstitution was not new at the time [of filing]. Two of the prior art references…suggest using cord blood for that purpose. Two others…suggest cryopreservation and storage of the cord blood until needed. Accordingly, this is not a case in which there is any serious question whether there was a suggestion or motivation to devise the patented composition or process.

Expectation of Success: The inventors appear to have conclusively proven that umbilical cord blood is capable of hematopoietic reconstitution.  Unfortunately for them, completing a proof is not necessarily inventive. Rather, prior scientists strong suspicion of the capability creates an expectation of success so strong that “no reasonable jury” could find the patent valid.

While the inventors may have proved conclusively what was strongly suspected before—that umbilical cord blood is capable of hematopoietic reconstitution—and while their work may have significantly advanced the state of the science of hematopoietic transplantations by eliminating any doubt as to the presence of stem cells in cord blood, the mouse experiments and the conclusions drawn from them were not inventive in nature. Instead, the inventors merely used routine research methods to prove what was already believed to be the case. Scientific confirmation of what was already believed to be true may be a valuable contribution, but it does not give rise to a patentable invention.

Holding: Patent is invalid and not infringed.

[More to come on this case]

CAFC Patent Appeal Statistics

Patent

The Court of Appeals for the Federal Circuit (CAFC) has created a new page of statistics.

  • Approximately 34% of CAFC decisions were patent cases. [LINK]
  • Patent appeals are less likely to settle pre-decision than other cases. [LINK]
  • Statistics for patent cases (9/05 – 9/06):
    • Total terminated: 496
    • Total terminated on merits: 278 (56%)
    • Of those terminated on on merits:
      • Percent affirmed: 60%
      • Percent affirmed-in-part: 20%
      • Percent dismissed: 3%
      • Percent reversed: 13%
      • Percent other: 4%
      • [LINK]
  • Check-out the CAFC Stats: [LINK]
  • See also PatStats.org

Further Limitations on Doctrine of Equivalents: Equivalent Foreseeable if Disclosed in Relevant Art

Patent

Patent.Law012Festo Corp. v. SMC Corp. (Fed. Cir. 2007).

In 1988, Festo sued SMC for infringement of its magnetized pistons.  Since then, the CAFC has issued numerous Festo opinions including two en banc. The Supreme Court has also ruled twice. This appeal, like many of the others involve the scope and limits of the doctrine of equivalents (DOE).

Doctrine of Equivalents: While patent claim language traditionally defines the patent right, the doctrine of equivalents occasionally allows for a finding of infringement even when an accused product falls outside the literal limits of claim language.  More particularly, DOE applies when a claim limitation differs insubstantially from the accused product or if the accused element performs the substantially same function in substantially the same way with substantially the same result (function/way/result test).

Prosecution History Estoppel: A narrowing claim amendment made during prosecution creates a presumption that the element should be narrowly interpreted — legally precluding application of the DOE.  In its 2002 Festo decision, the Supreme Court noted three exceptions that would allow for DOE infringement even after a narrowing amendment: (1) the equivalent was unforeseeable; (2) the reason for the narrowing amendment was only tangentially related to the equivalent; or (3) “some other reason…”.

Foreseeable Equivalent: In this case, Festo’s amendment was narrowing, but the patentee argued that SMC’s equivalent was unforeseeable to one of ordinary skill at the time of the amendment. The question was whether the accused product’s aluminum sleeve was a foreseeable alternative of the claimed magnetizable sleeve.  Aluminum sleeves were already well known in the art, but Festo argued unforeseeability because no PHOSITA knew that the aluminum sleeve would serve as a magnetic shield (the function of the sleeve). This unknown function — according to Festo — made the use of aluminum unforeseeable. In its briefs, Festo attempted to find a requirement for functional foreseeability in the function/way/result test of DOE.

The CAFC rejected Festo’s argument and instead found that foreseeability should be broadly interpreted — finding “that an alternative is foreseeable if it is disclosed in the pertinent prior art in the field of the invention.  In other words, an alternative is foreseeable if it is known in the field of the invention as reflected in the claim scope before amendment.” This result follows the court’s 2003 en banc decision that later developed and nonanalogous technology are “usually not foreseeable” — but that equivalents already known in the relevant field are generally foreseeable.

Here, the CAFC went a step further — implying that the question of whether a PHOSITA could have known the suitability of a particular a alternative is not relevant to the question of foreseeability.

“An equivalent is foreseeable if one skilled in the art would have known that the alternative existed in the field of art as defined by the original claim scope, even if the suitability of the alternative for the particular purposes defined by the amended claim scope were unknown.”

Consequently, the aluminum sleeve was seen as foreseeable – and thus prosecution history estoppel applies to block the doctrine of equivalents.

Dissent: Judge Newman dissents – noting that the opinion is “confound[ing]”, “incorrect”, and “futher erodes the residue of the doctrine of equivalents.”

4th of July Predictions

Patent

Here are my predictions:

  1. Although committee meetings will continue, substantive legislative patent reform is dead for 2007. There is simply too much opposition and too many varied viewpoints.
  2. Despite strong opposition, the proposed continuation rule changes will be implemented.

Happy Independence Day!

CAFC: General Purpose Computer Does Not Include RISC Processor

Patent

Patent.Law001Hutchins v. Zoll Medical (Fed. Cir. 2007)

[Updated] Hutchins is an individual inventor and represented himself pro [se] before the district court and on appeal. Hutchins’ patent relates to computer aided CPR. (U.S. patent no. 5,913,685). The district court granted summary judgment of noninfringement in favor of Zoll.

Hutchins lost on claim construction — with the courts holding that a “general purpose computer” does not include the RISC processors. The prosecution history made this finding easy as the “general purpose computer” limitation was added during prosecution to avoid “similar devices with dedicated microprocessor units.”

Patent Law Jobs by Patently-O

Patent

On July 1, Patently-O released its new job site: Patent Law Jobs by Patently-O. The site already has thirteen new job postings that have been viewed by several thousand patent law prospects. 

As usual with Patently-O, function predates style. We have job opportunities and patent professionals who need jobs. In the coming days, we’ll be working on a prettier design.

Hopefully, we can serve as a match-maker for each of these potential employers.

If you need patent help, please forward this info to your recruiting coordinator!

Notes:

  • Patent Law Jobs: www.patentlyo.com/jobs
  • Job Submissions: Post a patent law job
  • E-mail me comments (dcrouch@gmail.com)
  • Job postings are also going-out on the news wires via Google news. (not guaranteed…)
  • New job offers can always be found in the right sidebar on Patently-O. New jobs will also be included in the Patently-O e-mail service.

Honeywell as Lexicographer: Heading Defined as Bearing

Patent

Honeywell v. Universal Avionics (Fed. Cir. 2007).

GulfstreamHoneywell holds a patent covering a final-approach flight warning system. The novel system was able to determine whether the flight was in its final-approach without relying upon wing flap position. Universal’s TAWS system is allegedly infringing. After claim construction, a jury found infringement.

Honeywell’s claim discussed the “heading” of the aircraft in one element of the claim. The drafter should have used “bearing” instead because the focus was on the aircraft’s relative direction.  On appeal, the CAFC determined that the specification did its job of redefining heading and thus, allowed the court to define heading as the bearing.

The specification of the ’436 patent clearly communicates the meaning the patentees have assigned to the term “heading.” It does so by describing the claimed system’s alignment determination as depending on the direction of the aircraft from the runway (i.e., what is conventionally known as the aircraft’s bearing), not the direction in which the aircraft is pointing (i.e., what is conventionally known as the aircraft’s heading).

Lessen to consider: The patentee Honeywell won here because its patent claim was narrowly defined.

Notes:

  • In June 2007, another case between Honeywell and Universal was decided by the CAFC. [LINK]

Chemical Cases: Prima Facie Obviousness Requires “some Reason” for Modification

Patent

Takeda Chemical v. Alphapharm (Fed. Cir. 2007).

Alphapharm filed an ANDA with the FDA — hoping to begin making generic version of Takeda’s patented diabetes treatment ACTOS. ($1.7 b annual sales). The district court found the invention nonobvious, but Alphapharm asked the CAFC to review the case under the new standards of KSR v. Teleflex. On appeal, the CAFC affirmed.

Graham Primary Law: In the 1966 case of Graham v. John Deere, the Supreme Court set forth the primary methodology for determining obviousness. That methodology requires an examination of 1) the scope and content of the prior art; 2) differences between the prior art and the claims; 3) level of ordinary skill in the pertinent art; and 4) objective evidence of nonobviousness.  According the CAFC, KSR left the Graham formula intact, but added the provision that the test must be flexibly applied.

Although flexibility is required, one inflexible rule is that a prima facie obviousness rejection requires at least “some reason” that would have led a chemist to modify the prior art in a particular manner. Here, the court could find no reason for such a modification or that the modification would have been ‘obvious to try.’ – validity affirmed.

Genus-Species Unexpected Results: Judge Dyk in Concurrence indicated that two of the broader claims were likely invalid based on a rule of unexpected results for species:

In my view a species should be patentable over a genus claimed in the prior art only if unexpected results have been established.

 Dyk concurred with the validity finding because the “overbreadth” argument had been waived.

 

Written Description: CAFC Finds Prima Facie Rejection

Patent

Hyatt v. Dudas (Fed. Cir. 2007)

Under MPEP guidelines, the addition of new claims limitations lightens the examiner’s burden of proving inadequate written description.  In particular, Section 2163.04(I)(B) provides for a Section 112 rejection of a newly amended claim where “Applicant has not pointed out where the new (or amended) claim limitation ‘____’ is supported, nor does there appear to be a written description of the claim limitation in the application as filed.”

In this case, Gilbert Hyatt had filed a new set of claims in a continuation (claiming priority back to 1970’s) and the examiner rejected those claims for lack of written description. Without arguing the merits, Hyatt focused his appeal on the examiner’s failure to provide a prima facie case — and the legal founding of the MPEP provision.

During prosecution, the PTO is given the initial burden of providing a prima facie case for any rejection. The rejection must include at least some specifics regarding problems with the claims.  However, that requirement can be met through an explanation of “what, in the examiner’s view, is missing from the written description.”

MPEP is OK: The CAFC found that MPEP 2163.04(I)(B) is properly written because it requires specific recitation of the problematic claim language (as opposed to a vague general rejection)

[S]ection 2163.04(I) expressly instructs the examiner to specify which claim limitation is lacking adequate support in the written description.

Specifics?: The examiner’s written description rejection asserted that the claimed combination was not adequately described (although each particular element was described).  After reviewing the rejection, the CAFC found that the examiner’s focus on “support for linkage” was sufficient to “clearly notif[y Hyatt] of what exactly the examiner felt was missing by way of written description.”  This shifted the burden going forward, and consequently, Hyatt is now under a duty to bring-forth the requested descriptive evidence.

Notes:

  • Gilbert Hyatt is known for receiving a broad patent on the microcontroller.  (That patent was later invalidated in an interference with TI).
  • Before the patent was invalidated, Hyatt received $70 million+ in royalties.
  • California wanted Hyatt’s taxes and took the case to the Supreme Court. (California v. Hyatt)

 

 

Book Review: Undue Diligence

Book Review, Patent

UndueDiligenceBook: Undue Diligence
by Paul Haughey (of Townsend Townsend & Crew)
$15.95 from Amazon.

I had low expectations when I began to read my free copy of Undue Diligence. . . . A legal thriller about a patent attorney written by a patent attorney? — Give me a break!  

As it turned out . . .  I hardly put the book down until it was finished! It is a fun story, well written with plenty of action. The patent prosecutor (Joe Nile) is the hero; patent troll villains allow for a continuous stream of jabs at the  patent system; and the office politics are real.  If you like Grisham, you’ll enjoy Undue Diligence as well.

Premier Cru: CAFC State of the Court

Patent

PaulMichelDrinkChief Judge Paul Michel raises several important issues in his “state of the court” address on June 28.

  • Veterans Cases On the Rise: With continued war, we can expect that veteran benefit cases will continue to rise and may potentially “swamp [the] court before year’s end. . . . it could be catastrophic. . . . Three remedies are being pursued: we are working harder, adding visiting judges, and relying on mediation.”
  • Patent Reform: “Two provisions of this complex, lengthy bill are of concern. They could impose enormous burdens on the court: one making all claim construction rulings immediately appealable as of right and another that dictates that courts in every case must apportion reasonable royalty damages, and do so by one particular methodology that requires valuation of all prior art. I have informed Congress of my concerns and I know they are being considered.”
  • Pro Bono Opportunities: Those interested in getting CAFC appellate experience should contact the Chief Clerk (Pam Twiford) about volunteering for MSPB appeals.
  • Electronic Documents: The plan is to get e-document PACER working by this Fall. (That means I won’t have to post briefs on Patently-O any longer!).

Broadened Continuation Receives Broad Construction; Enablement Questioned

Patent, , ,

Saunders Group v. Comfortrac (Fed. Cir. 2007).

Typical use of continuation practice: (1) Patentee files application claiming feature B1 (as the only described embodiment of generic class B). (2) Competitor releases product that would be infringing except for its feature B2. (3) Patentee files continuation that replaces B1 with the generic element B. (4) patent issues. What happens in upcoming litigation?

This scenario, which is exemplified in Saunders Group, raises at least three particular litigation issues listed in order applicability: (1) whether the broad scope of element B has been properly enabled; (2) whether the specific element B1 is an essential element of the invention whose removal would be a violation of the written description requirement discussed in Gentry Gallery; and (3) whether the broad term B should be construed in a limited fashion to avoid problems 1 and 2 (applying the maxim that claims should be construed to preserve validity).

We know from Saunders Group, of course, that it is impermissible to import limitations into a claim even when hoping to preserve validity of the claim.  Especially where here, there was no question that “the applicant expressly and unambiguously state[ed] his intention to claim broadly.”

Here, the lower court had issued a summary judgment of non-infringement based on its narrow claim construction (construing B as B1). The CAFC reversed that holding, but suggested that invalidity under enablement is the correct avenue to pursue on remand:

[W]e hold only that the court’s validity analysis cannot be used as basis for adopting a narrow construction of the claims. Instead, any validity issues that the defendants have preserved and wish to press can be addressed on remand, as was done in the Liebel-Flarsheim case. See Liebel-Flarsheim Co. v. Medrad, Inc., 481 F.3d 1371 (Fed. Cir. 2007) (holding invalid claims that had been given a broad construction at the patentee’s behest in an earlier appeal).

Notes:

  • This type of case may soon be history if new continuation rules are truly effected.

Justice Breyer on Free Riding

Patent

Leegin Creative Leather v. PSKS (Supreme Court 2007)

[updated] In today’s Sherman Act decision, the Supreme Court found that the antitrust effect of vertical minimum-price restraints should be judged under a rule of reason. This overturns a longstanding per se rule.

An interesting aspect of the opinion is Justice Breyer’s dissent where he focuses on benefits of free riding.

[F]ree riding often takes place in the economy without any legal effort to stop it. Many visitors to California take free rides on the Pacific Coast Highway.  We benefit freely from ideas, such as that of creating the first supermarket. Dealers often take free rides on investments that others have made in building a product’s name and reputation.  The question is how often the free riding problem is enough significantly to deter dealer investment.

Despite Breyer’s dissent, this case continues the trend to allow increased downstream control (through both property and contract) of the use of a company’s goods and services.

CAFC: “Near the Edge” Not Indefinite; Curing Inequitable Conduct

Patent, ,

PatentLawPic001Young v. Lumenis, Inc. (Fed. Cir. 2007)

Dr. Young invented a surgical method of declawing a cat using lasers. (feline onychectomy).  Lumenis makes surgical lasers that were allegedly during unauthorized infringing surgeries.

Lumenis is a manufacturer, seller, and distributor of surgical laser instruments that were alleged to have been used to perform Young’s patented surgical procedure.

Young filed an infringement suit and Lumenis counted with an inter partes reexamination. (Patent 6,502,579). The PTO issued an office action rejecting the claims and the district court found the patent invalid and unenforceable

Indefinite: In particular, the district court found the word “near” to be indefinite as it was used in claimed step: “forming [an] incision in the epidermis near the edge of the ungual crest.”  Although the district court roughly understood its meaning, it found “near” to be indefinite because it “fails to distinguish the invention over the prior art and does not permit one of ordinary skill to know what activity constitutes infringement.”

On appeal, the CAFC reversed — noting again that claims are indefinite only when they are “not amenable to construction or are insolubly ambiguous.”  An indefiniteness ruling necessarily requires claim construction and examination of any intrinsic evidence. Here, the intrinsic evidence resolves the meaning of near — with both a drawing and reference to cat-sized measurements.  Here, the court distinguished the infamous Amgen case that found “about” to be indefinite: in Amgen, the potential error range of “about” was quite wide and the term had been added to the claims post-filing.

Inequitable conduct — better late than never: The CAFC also disagreed with the lower court’s finding of inequitable conduct — finding that Young’s late submission of contrary deposition statements cured any potential problem: “The essence of the duty of disclosure is to get relevant information before an examiner in time for him to act on it, and that did occur here.”

Reversed

Injunctive Relief: Splitting the baby?

Patent

Patent.Law010Verizon v. Vonage (Fed. Cir. 2007).

Both Judge Dyk of the CAFC and Judge Hilton of the Eastern District of Virginia raise the issue of partial injunctive relief. 

For his part, Judge Hilton issued a permanent injunction barring infringement by Vonage, but partially stayed the injunction pending appeal to the CAFC. According to the temporary modification, Vonage would be permitted to continue to sell infringing services to current customers, but would stop Vonage from infringing activity associated with any new customers. That injunction was stayed without discussion by the CAFC on an emergency motion before a panel of Judges Michel, Gajarsa, and Dyk. (2007 WL 1202744).

In oral arguments of the appeal, Judge Dyk shifted the focus to what he calls a “middle ground” when the infringer is facing an irreparable harm such as bankruptcy. 

Judge Dyk: “They say no injunction, you say injunction. But, isn’t there kind of a middle ground in these cases where the injunction would put someone out of business? Shouldn’t that be a consideration in framing the injunction? Shouldn’t the district court perhaps allow time for a work-around as part of the injunction? Verizon’s interest is in not losing customers. I’m not sure that Verizon has an interest in putting Vonage out of business. Shouldn’t the district court under these circumstances consider whether the injunction should be framed in such a way as to allow reasonable time for a work-around – particularly where as here, it is non-willful infringement?”

Both judges focus on a middle-ground with a temporal limit. For Judge Hilton, the limited injunction ends at the appeal decision. For Judge Dyk, an injunction might remain entirely stayed, but only for a limited time to avoid bankruptcy while a work-around is developed.  The problem with these stays is that they undermine the rule of law as well as the patentee’s legal claim.  In addition, they run the risk of being proverbial solutions that leave neither party better off.  Despite the problems, the temporal opportunities available in injunction jurisprudence should not be overlooked.  A patentee who is denied injunctive relief should be allowed to present evidence of irreparable harm at a later date. Similarly, an enjoined infringer should be allowed to later provide new evidence of the sufficiency of monetary relief.

(more…)

Nonpracticing Entity (CSIRO) Gets Injunction

Injunctions, Patent, Patent Cases 2007

ScreenShot061CSIRO v. Buffalo Technology (E.D.Tex. 2007)

CSIRO operates as a technology licensing arm of the Australian Government. CSIRO does not practice its inventions, but has asserted its wireless LAN patent against a number of accused infringers, including Intel, Microsoft, Marvell, and Buffalo. The patent is broad enough to cover all 802.11a/g wireless technology and has a 1992 priority date.

In the case against Buffalo, CSIRO won a slam-dunk summary judgment of validity and infringement. The court then considered whether to award a permanent injunction in favor of the non-practicing entity (NPE).

(more…)

Stay Pending Appeal: Denied for Qualcomm at ITC

Patent,

USITCUS (Broadcom) v. Qualcomm (ITC 2007).

The International Trade Commission (ITC) is an increasingly popular venue for patent infringement issues. The ITC’s only power is to enjoin imports (no money damages), but in competitor suits that is the optimal result.

As part of a large ongoing patent battle, Broadcom filed a Section 337 action against Qualcomm — asserting that Qualcomm’s mobile-phone chip imports infringed Broadcom’s patent nos. 6,374,311, 6,714,983, and others. An administrative law judge (ALJ) sided with the patentee Broadcom, and the Commission affirmed (but limited the scope of injunction).

Qualcomm and its supporters requested that the ITC stay relief pending appeal to the CAFC. 

ITC Stays: Section 705 of the Administrative Procedure Act (APA) provides the ITC with authority for granting a stay. Generally, the ITC determines stays based on the same four factors used to determine whether to grant a preliminary injunction. (It is also approximately the same test used by the CAFC and discussed in Standard Havens).

In order to obtain a stay pending appeal, the moving party must prove:

  • (1) a likelihood of success on the merits of the appeal (or an “admittedly difficult legal question”);
  • (2) irreparable harm absent a stay;
  • (3) that issuance of a stay would not substantially harm other parties; and
  • (4) that the public interest favors a stay.

Here, the ITC determined (without reasoning) that Qualcomm had failed to satisfy the four-prong test.

The CAFC is expected to make an independent determination regarding the stay within the next week.

Notes:

  • Two of the six commissioners would have granted a stay.

    • Patently-O TidBits

    Patent
    • Sign up for the Patently-O free full-text e-mail service. Thousands of patent attorneys can’t be wrong . . .
    • More meetings with the OMB regarding continuation rules: the NanoBusiness Alliance asks that the PTO at least provide some “analysis of the effect these two rule packages might have on innovation or the economy . . . we are very skeptical that the most cost-effective solution involves curtailing of continuations and the number of claims per application.” Maebius Letter.
    • Solveig Singleton on patent trolls and the “loser pays” rule: “As a general rule, the “loser pays” rule is more fundamentally fair than a rule where each party pays his own costs. Only ‘loser pays’ fully compensates the winning party in a lawsuit and makes him whole.”
    • Technology Liberation Front (TLF) on patent damages reform: “The result will be to reduce protection for all patents, not just the bad ones.”

    A Dangerous Prosecution Trap

    Claim Drafting Tips, Patent, Patent Prosecution, , , ,

    ForkBy Paul F. Morgan

    I recently retired from a position in which I was also providing legal advice to patent application prosecution attorneys and others.  I had noted the following relatively frequent source of legal confusion in current law for some patent examiners, with the result that some patent prosecutors were being dangerously misled by incomplete examiner rejections. Hence, this warning note.   

    A prior U.S. PTO published patent application can qualify as prior art under multiple portions of 35 U.S.C. §102 – resulting in varying effective dates, and requiring different attorney or agent responses. Often, the multiple effective dates are not reflected in examiner rejections.  However, getting a patent application allowed incorrectly can be fatal to the patent’s validity or even lead to inequitable conduct accusations.  Legal misunderstandings of the patent examiner during ex parte prosecution do not create a valid legal excuse for prosecuting attorney legal errors.

    A published US patent application has a §102(e) prior art date as of that application’s filing date, and also a §102(a) or §102(b) prior art date as of its publication date. The office action rejection should discuss both dates if the publication date was prior to the rejected application.  But, even if the examiner’s rejection was legally incomplete, the applicant’s attorney must still overcome both, correctly.

    If the published application was commonly owned at the time of its invention, a §102(e)/103 rejection can be overcome by asserting common ownership under §103(c).    The protections of §103(c) do not apply to 102(a) or 102(b) prior publications.  Rather, that section only applies to 102(e),(f) and/or (g)!  Furthermore, §103(c) only applies to obviousness issues, not anticipation. Nor does §103(c) eliminate what should have been an alternative rejection for double patenting.  

    Obviously, a §102(b)/103 reference from an application publication date more than a year before the subject application date cannot be eliminated, only argued over.   While a §102(a)/103 rejection might be overcome by presenting evidence of an earlier invention date, that avenue is considerably more difficult and dangerous.  In particular, patents obtained via 37 CFR 1.131 declarations of alleged prior invention have a poor litigation record. Where appropriate, 102(a) prior art may be overcome by perfecting a valid priority claim to an earlier application. 

    One final related danger that arises from the fact that most U.S. applications are now  published within 18 months of their first filing date.  Even self-publications qualify as 102(b) prior art.  That means that patent applications on improvement inventions from the same client, especially with different or partially different inventors, need to be filed ASAP to avoid prior-filed basic applications from becoming prior art under §102(a) or (b) against the improvement applications [which cannot be avoided by §103(c).]

    The above, of course, is oversimplified, and other commentators may wish to “chip-in.” with practical advice.

    Notes:

    • Paul Morgan recently retired, as the Assistant General Patent Counsel
      for a major U.S. Corporation, after 44 total years of patent practice.

    Individual Inventors: Who Will Represent You Now?

    Patent

    PrayBender v. Dudas (Fed. Cir. 2007)

    Although this case is extreme, it should also server as a warning to any patent practitioner who regularly represents ‘unsophisticated clients’ — You will be held to a higher ethical standard. The opinion also creates a trap for flat-fee prosecution — because, according to the CAFC, the flat rate provides an incentive to shirk responsibilities.

    Here, Bender, a patent attorney, worked with an invention promotion company (AIC) to prosecute over 1000 design patent applications. The applicants were never asked whether they intended to file design or utility patent applications and were not provided with information weighing the two options.

    The PTO found that Bender had violated several rules of ethics and expelled him from practice.  The district court (DC) affirmed. Bender then appealed to the CAFC, which also affirmed on all issues.

    Standard of Review: Under the APA, a PTO sanction will be upheld unless “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.” The underlying factual conclusions are reviewed for substantial evidence.

    Neglecting an Entrusted Legal Matter:  The PTO argued that Bender had neglected to ensure that his clients were aware of the differences between design and utility patents and that they intended to file design patent applications. Bender did provide a description of the differences in a letter to clients, but the CAFC found that “an entirely hollow and formalistic gesture” because it did not provide particularized advice.

    Bender’s engagement letter was an entirely hollow and formalistic gesture because it did not provide any of the Gilden applicants with advice that directly related to the particular inventions at issue, the type of patent best suited to protect these particular inventions and the inventor’s interests therein, or the consequences of pursuing a design patent instead of a utility patent.

    Bender should have discussed the particulars of each case with the inventors to determine the proper type of application that should be filed. CAFC found evidence of motive in the billing arrangement: Bender was paid a flat rate by the invention promotion company who had a money-back guarantee if no patent issued. And, design patents are cheaper to file and much easier to obtain.

    Any reputable attorney would have appreciated that the wholesale filing of design applications under such circumstances and the unauthorized addition of design embellishments were driven in large measure if not entirely by AIC’s money-back guarantee.

    Bender also failed to advise clients regarding final rejections as should always be done (regardless of who foots the bill.

    Conflict of Interest: Bender should have explicitly discussed his fee arrangement with each client — as must always be done if someone else is footing the bill.  Generally this type of arrangement can only proceed with clients permission after a full disclosure. (including the amount that Bender received from the invention promotion company).

    Lying to the Feds: The CAFC also a affirmed on a charge akin to obstruction of [administrative] justice. Bender failed to give full and complete answers to the PTO’s requests for information. Although Bender had objected to the questions as argumentative and based on false premises, the CAFC agreed with the PTO — that his responses hindered the investigation.

    Exclusion from practice affirmed.

    Notes:

    • [UPDATE] Leon Gilden is the patent attorney who was initially part of the AIC scheme. Gilden skipped town and is now a fugitive at large. [Wanted Poster of Leon Gilden]
    • The violations included (1) neglecting an entrusted legal matter; accepting employment where professional judgment may be affected; accepting compensation from a non-client without full disclosure to the actual client; and engaging in conduct that was prejudicial to the administration of justice. 
    • Individual inventors who are not yet versed in the rules of patent law create problems for patent prosecutors. The work generally takes more time and effort, the malpractice risk is often greater, and the ability to pay is usually less. A number of law firms now have policies against representing individuals (except for the very wealthy).
    • Justifying the lack of procedural safeguards on the PTO’s requests for information, the CAFC explained that the lack of safeguards actually “protects practitioners by providing them with an opportunity to explain any questionable conduct and present reasons why disciplinary proceedings are not warranted.”