Chief Judge Michel Calls Meeting of the CAFC Bar

Conference or CLE, Patent

Chief Judge Michel of the Court of Appeals for the Federal Circuit has invited members of the bar to attend a discussion at the court on Tuesday, November 15, 2005 at 2:00 pm in Courtroom 201.

Judge Michel will discuss several topics as part of his effort to continue to build a better relationship between the bar, academics, and the Court.  Planned topics include: effective appellate advocacy, the attorney’s role as an officer of the court, and the court’s internal process.

The event will be held in the Howard T. Markey National Courts Building, 717 Madison Place, NW, Washington, D.C. There is no charge and all are welcome. Those interested in attending are requested, however, to RSVP by sending an e-mail to webmaster@cafc.uscourts.gov.

CAFC: Indefiniteness Requires “Severe” Defects in the Claims

Patent, Patent Cases 2005

InfringingProducts010Fisher-Price v. Graco (Fed. Cir. 2005) (NOT PRECEDENT).

Fisher-Price holds a patent on a collapsible infant swing and sued Graco for infringement. The primary asserted claim reads as follows:

6. An infant swing comprising:
   an upward extending frame support post;
   a swing arm pivotally coupled to an upper end of said frame support post and extending in a downward direction from said upper end of said frame support post;
   a seat coupled to said swing arm and having an upper seating surface;
   said swing arm and said frame support post defining a reconfigurable swing area there between;
   a shield coupled to said seat and extending upwardly from said seat and disposed between said reconfigurable swing area and said seating area.

After a Markman hearing, the district court found several limitations of the claim indefinite (italicized) and thus invalid.

On appeal, the CAFC explained that a defect in a claim must be “severe” before it will be invalidated as indefinite. Here, the CAFC reversed because the “patent is not complex; it is readily understood by both the expert and layperson [and] the words used in the limitation are simple, with well-known ordinary meanings [that] can be construed without great difficulty, even if, as Graco points out, it is not mentioned in the specification.”

Finally, regarding “said seating area,” Graco argued that the term was indefinite because it had no antecedent basis in the claim.  Although not rejecting the legal basis of this argument, the CAFC found an implied antecedent basis in the term “upper seating surface.” 

Practical Tips For Prosecuting Trans-Border Inventions

Articles and Publications, Patent

A new paper in the AIPLA Quarterly Journal provides a number of practical tips for dealing with inventions or infringing acts that naturally cross international borders.  The authors (Mark Lemley, David O’Brien, Ryan Kent, Ashok Ramani & Robert Van Nest) call these “divided infringement claims” and focus on the recent Federal Circuit decisions in Research-In-Motion v. NTP, Eolas v. Microsoft, AT&T v. Microsoft, and Pellegrini v. Analog Devices.

Prosecution Strategies:

  1. Attempt to draft unitary claims — i.e., claims that are not susceptible to international distribution.
  2. Claim devices and systems, not just methods — in RIM, the CAFC taught that system claims are much stronger on an international level.
  3. Draft claims that would infringed under the importation or domestic sale provisions of 271(g).
  4. Keep continuations alive.
  5. File foreign.

The paper also delves into a number of ex post litigation strategies such as filing suit at the ITC and advocating for a claim construction that avoids international division. 

Great work!

CAFC reverses jury finding of invalidity and noninfringement.

Patent, Patent Cases 2005, , , ,

InfringingProducts009Callicrate v. Wadsworth (Fed. Cir. 2005).

Callicrate sued Wadsworth for infringement of its patented bull castration tools. After a trial, a jury found all of the claims anticipated, obvious, and not infringed.  On appeal, the CAFC disregarded the jury verdict and reversed.

Infringement:  The defendant admitted that its devices include all of the claim elements. Based on that admission, the CAFC determined that the jury had “no basis” for finding no infringement and that there is “no reason for a new trial.”  (Although each element was included, the defendant argued that the components were “not connected in the particular manner recited in the claims.  The CAFC does not seem to have addressed that point specifically since the jury instructions asked simply whether “each and every element” of the claim was included).

Enabling Disclosure: Callicarate’s patent claim priority to an earlier patent, but could be invalidated if they were shown to be not fully enabled by the earlier patent.  The district court found that the earlier patent did not contain adequate disclosure to support the claimed mechanism because (1) the only disclosure of the claimed mechanism is in the background section of the earlier patent; (2) the background section contains disparaging remarks about this mechanism; and (3) the patentee distinguished his assembly mechanism from the claimed mechanism during prosecution.

However, the CAFC held that these reasons were insufficient for a finding of a lack of enablement.  First, the background section can be used to enable a claim. Second, disparaging remarks do not make it any less likely that one of ordinary skill in the art would, after reading the background, know how to make and use the invention.

Defendant Challenging Claim Construction: In a cross-appeal, the defendant challenged certain claim construction terms.  However, the CAFC refused to hear that appeal because the defendant had not objected to the district court’s construction and had conceded infringement of the newly challenged element. (note: the CAFC has finally drawn a line for when it will not review claim construction).

Conclusion: Reversed and remanded because jury verdict was against the weight of the evidence.

Supreme Court Shows More Interest In Pharmaceutical-Patent Antitrust Case

Patent, Patent Cases 2005,

FTC v. Schering-Plough (on Petition for Certiorari).

Odds are good that the Supreme Court will hear this high profile case involving antitrust issues surrounding the settlement of generic-pioneer patent cases.  On October 31, the Court asked the USDOJ to provide its stance on the case — a request that is often followed with a grant of certiorari.

It is a bit odd that the High Court asked for the Government’s amicus view on a case where the Government is a party.  Although the FTC is not directly under the control of the Administration, this has the appearance of giving antitrust regulators two bites at the apple. On the other hand, this may expose an interesting split between the FTC and DOJ.

In its petition for certiorari, the FTC presents two questions to the Court:

1. Whether an agreement between a pharmaceutical patent holder and a would-be generic competitor, in which the patent holder makes a substantial payment to the challenger for the purpose of delaying the challenger’s entry into the market, is an unreasonable restraint of trade.

2. Whether the court of appeals grossly misapplied the pertinent “substantial evidence” standard of review, by summarily rejecting the extensive factual findings of an expert federal agency regarding matters within its purview.

In its supporting brief, the FTC argues that agreements between competitors should not be per se lawful simply because they are within the “potential” reach of a patent claim.

Links:

  • FTC petition for Rehearing at the 11th Circuit
  • Schering 11th Circuit Decision.pdf
  • Patent at issue, No. 4,863,743
  • PubPat Amicus Brief to the 11th Circuit [pdf]

    • ITC Claim Construction Vacated — Court Unnecessariliy Limited Claim Scope

    Patent, Patent Cases 2005

    Sorensen v. ITC (Fed. Cir. 2005)

    Sorensen alleged that Mercedes-Benz imports violated its patented injection molded tail lights. and requested that the ITC institute an investigation under 19 USC 1337.  However, after the investigation, the ITC found no infringement based on its interpretation of the claims.

    The patent is directed to a multi-layer injection molding with at least two materials having “different characteristics.”  The only difference between the accused layers was that they were different colors, and the ITC found that “different characteristics” must refer to different molecular properties and not to color.  Under this claim construction, it was easy for the ITC to find no infringement.

    On appeal, the CAFC reversed because the claim did not exclude color as a basis for differing characteristics, the specification did not so limit the term, and there was no disavowal of scope in the prosecution history.

    Summary judgment vacated.

    LabCorp v. Metabolite: Supreme Court To Hear Patent Case Questioning Patentability Of Medical Method

    Patent, Patent Cases 2005,

    InfringingProducts008Laboratory Corp. of America (LabCorp) v. Metabolite Laboratories (Supreme Court 2005).

    The Supreme Court has announced that it will hear LabCorp’s appeal that will again question the scope of patentability in the U.S.  Specifically, the High Court will review the question of whether a patent can claim rights to a basic scientific relationship used in medical treatment if the claim is limited to “correlating” test results.

    The question on review is as follows:

    Whether a method patent setting forth an indefinite, undescribed, and non-enabling step directing a party simply to “correlat[e]” test results can validly claim a monopoly over a basic scientific relationship used in medical treatment such that any doctor necessarily infringes the patent merely by thinking about the relationship after looking at a test result.

    Patent in suit: This case revolves around claim 13 of Metabolite’s U.S. Patent No. 4,940,658

    13. A method for detecting a deficiency of cobalamin or folate in warm-blooded animals comprising the steps of:

    assaying a body fluid for an elevated level of total homocysteine; and

    correlating an elevated level of total homocysteine in said body fluid with a deficiency of cobalamin or folate.

    Thus, the method comprises two steps, (i) assaying a body fluid and (ii) correlating the measure with a mineral deficiency.

    LabCorp’s argument: LabCorp argues that claim 13 is invalid for a number of reasons.  Most pointedly, although the claim requires a step of “correlating,” there is no description of how the correlation would take place. According to the petitioner, “[s]uch a vague claim cannot be valid; for if it could be, parties could claim patent monopolies over basic scientific facts rather than any novel inventions.” In addition, the claim arguably fails the written description requirement because “the specification does not describe what a practitioner must do to perform the active ‘correlating’ step.”

    Comment: The Supreme Court appears bent on making this case a question of subject matter patentability.  If it takes that course, it will likely answer many of the questions left open by Lundgren and Fisher.  Of course, as a general rule the decisions from the Court raise more questions than they answer.

    Eolas v. Microsoft

    Patent

    Eolas v. Microsoft (Continuing Saga).

    The Supreme Court has denied Microsoft’s petition for a writ of certiorari.  And, the case will be wholly returned to the district court to resolve a number of pending issues.  At first glance, Microsoft seems to be running out of legal arguments: M$ lost $500 million at the district court; substantially lost on appeal, lost in its bid to get the Supreme Court to hear the case, and lost in its bid for the Patent Office to reject the patent on reexamination.

    On a closer look, however, the reexamination may actually give Microsoft breathing room again at the district court.  The Examiner’s reasons for allowance make clear that the Eolas claims require an “‘executable application’ that is a separate application from the browser application.” (emphasis in original). Of course, it would be difficult for Eolas to argue that Microsoft’s accused ActiveX controls, applets and plug-ins are separate applications rather than components that are called by an application.

    It will be interesting to see whether Microsoft can capitalize on this implicit limitation that has been created by the PTO.

    Settlement of declaratory judgment action based on pre-filing statements insufficient to trigger 180-day exclusivity period

    Patent

    Teva Pharmaceuticals v. FDA (D.D.C. 2005)

    Generic manufacturer Teva filed an abbreviated new drug application (ANDA) in 2000 seeking permission to sell generic pravastatin once one of the patents expires in April 2006(paragraph III certification) and an assertion that the generic version would not violate three patents on the drug (paragraph IV certification).  After Teva filed, several other generic manufactures filed parallel applications.

    After approving Teva’s application, the FDA determined that Teva’s 180–day exclusivity period was started by the conclusion of a lawsuit between Apotex and BMS involving the same patents. (Under Hatch Waxman, the 180–day exclusivity is triggered by a “decision of a court” or “holding” that has preclusive effect.)

    In that case, Apotex had sued BMS for declaratory judgment of noninfringement even though BMS had told Apotex that it would not sue on the patents based on Apotex’s proposed formulation.

    BMS & Apotex reached a voluntary dismissal prior to any hearing taking place, and filed a “consensual stipulated dismissal” based on the pre-suit representations by BMS.

    Teva argued that the Apotex-BMS settlement was not a “decision of a court” and thus should not have triggered the start of the exclusivity period.

    The DC Court agreed with Teva, finding that the stipulated dismissal was insufficient to fulfill the requirements of Hatch Waxman.

    The underlying terms of the stipulation are not physically incorporated into the four corners of the dismissal order, and there is no statement of a “good cause” finding on the face of the order. Neither Apotex nor BMS ever asked the district court to look beyond the signed stipulation, and no hearing or argument ever took place. Thus, the district court could only review the voluntary, private settlement agreement: it did not have to weigh evidence, or make any implicit determinations. Indeed, it did not even have to sign the document, and under Second Circuit and D.C. Circuit law, as well as Rule 41(a)(1)(ii), the filing of the signed stipulation of dismissal automatically effectuated the dismissal without any court action. The district court was divested of jurisdiction at the very moment that the stipulation, containing the signatures of both BMS and Apotex, was filed — there cannot have subsequently been any predicate finding of fact as to estoppel or any other issue. And there is nothing in the record to suggest that, notwithstanding this jurisdictional bar, any predicate finding of fact was actually made.

    The Apotex-BMS decision was “not a court decision or holding” and “Teva’s 180-day exclusivity clock was never triggered.” As such, the D.C. Court determined that the FDA’s determination was “arbitrary, capricious . . . or otherwise not in accordance with the law” under § 706(2) of the APA.

    Read the decision.

    Upcoming Conferences

    Patent

    BlawgThink 2005

    Leading legal bloggers will be in Chicago November 11 and 12 for BlawgThink 2005: a bold new approach to learning about legal blogging. Day One will feature more traditional sessions broken-out led by top legal bloggers on topics such as blogging how-to, blogging tools, marketing tips, content strategies, RSS and ethics. Day Two will have some planned activities, but will be agenda will be primarily attendee driven with collaborative brainstorming and small group discussions. This will be one of the most innovative, creative, and energetic conference that you have ever attended.  The organizers have lined up nice sponsors with some great freebies. . . Contact Matt Homann (matt@lexthink.com) for an invitation.  A number of IP bloggers will in attendance including Stephen Nipper, Matthew Buchanan, Douglas Sorocco, Cathy Kirkman, Brandy Karl, Russ Krajec, and me.

    Doctrine of Equivalents: Vitiation and Estoppel

    If you are in Kansas City on November 16, I would love to meet you at the KCMBA sponsored luncheon from 12:30 to 1:30.  I will be discussing the DOE and how recent case-law has changed our perspective.  Sean Bradley of Erikson & Kleypas will moderate.

    Others:

    USPTO Releases New Business Method Guidelines: Requires “physical transformation” or “concrete and tangible result”

    Patent, Patent Prosecution, ,

    In the wake of the Lundgren case, the USPTO has released a set of interim examination guidelines for determining subject matter eligibility of patent applications. (Link).  The guidelines will be used by examiners “in determining, on a case-by-case basis, whether a claimed invention falls within a judicial exception to statutory subject matter (i.e., is nothing more than an abstract idea, law of nature, or natural phenomenon), or whether it is a practical application of a judicial exception to statutory subject matter.”

    The crux of the new guidelines is that an invention falls within the scope of 35 U.S.C. 101 “if the claimed invention physically transforms an article or physical object to a different state or thing, or if the claimed invention otherwise produces a useful, concrete, and tangible result.”  The application itself should enable one of ordinary skill in the art to understand the utility of the invention.

    (more…)

    How to find Statutory Invention Registrations

    Patent, Patent Prosecution

    Although rarely used, an inventor can apply for a statutory invention registration with the patent office under 35 U.S.C. 157.  Under the law, the inventor must waive the right to receive a patent on the invention.  The statutory inventions are searchable through the USPTO patent database and are given “H-numbers”—such as H342. 

    There are currently just over 2100 published SIRs, most of which were filed by the U.S. government.  This search (SEARCH) will grab them all.

    (NOTE — This tip comes from the PUIG newsgroup).

    InfringingProducts005 

    IP Due Diligence: A How-To Guide (Free Webinar Thursday Oct 27)

    Conference or CLE, Patent
    Two partners at MBHB (my firm), Jim McCarthy and Emily Miao, have put together what looks to be a great “webinar” on intellectual property due diligence to be held on Thursday, October 27, 2005 at 2:00 pm CST. Issues to be discussed:
    • When should a due diligence review be conducted?
    • How can validity of a patent or strength of a trademark be determined?
    • What can be done if any intellectual property is the subject of a lawsuit?
    There will be a Q&A session at the end as well.
     
    Please contact Megan McKeon at 312.913.2105 or mckeon@mbhb.com for more information or to register. (Must register by 1:00 pm CST).

    NTP v. Research-in-Motion: Supreme Court Denies Stay

    Patent

    NTP v. Research-in-Motion

    After the CAFC denied RIM’s request to stay proceedings pending an appeal to the Supreme Court, RIM took its argument directly to new Chief Justice John Roberts — asking him to stay the issuance of an injunction pending the outcome of the Canadian company’s petition for writ of certiorari.  Roberts denied that request without comment and trading of RIM’s stock was again halted.

     

    Declaratory Judgment Jurisdiction: Fourteen Month Time Lag Destroys Apprehension of Imminent Suit

    Patent, Patent Cases 2005

    ScreenShot005Citizen Electronics v. Osram (D.D.C. 2005)

    Osram owns several patents related to multi-color LEDs.  In 2003, Osram and Citizen discussed potential licensing, but the two companies never reached a deal. Osram sued several LED importers in the ITC and in Europe and announced that it “would not tolerate any infringement of its patent rights and would take legal action against unauthorized use.”  However, after 2003, the two companies did not have any direct discussions regarding the patents.

    Fourteen months later, Citizen filed suit against Osram asking for a declaratory judgment of invalidity and noninfringement.  Osram challenged the basis for jurisdiction.

    The court agreed that Osram’s actions in the other lawsuits did not give rise to any “reasonable apprehension of suit.”

    [W]hether OSRAM broadly interpreted its patent rights in a suit against a third party (as opposed to filing the suit) does not provide plaintiff with a reasonable apprehension of suit, since it is mere conjecture to argue that OSRAM would have acted on its interpretation by instituting suit against Citizen.

    In addition, the court found that the “nervous state of mind” created by the 2003 communications between the companies “not enough to demonstrate a reasonable apprehension of suit” in January 2005. Specifically, the court noted that there must be a reasonable apprehension of imminent suit, and a fourteen month time lag belies any such apprehension.

    Case dismissed with prejudice for lack of subject matter jurisdiction.

    Almost 20% of patent applicants receive an office action within nine months of filing.

    Articles and Publications, Patent

    Tim Palmer helped me to grab some data for a new paper on patent office statistics. Here are some preliminary results:

    Using data from Series 10 (Serial No. 10/xxx,xxx) with filing dates from October 2001 through May 2005, I created a simple cumulative percentage table showing the expected time delay for a first office action.  As can be seen, around seven percent of cases receive a first OA within the first six months, and the median delay is between one and two years.  Of course, this table is slightly skewed because the October 2001 start date does not allow for delays of more than four years.

    DELAY AFTER FILING UNTIL FIRST OFFICE ACTION

    Three Months 1%
    Six Months 7%
    Nine Months 18%
    One Year 32%
    Two Years 82%
    Three Years 96%

    NTP v. RIM in Hands of District Court.

    Patent

    As predicted by several Patently-O readers, the CAFC has denied RIM’s petition to stay the infringement suit brought by NTP while the case is appealed to the Supreme Court.  Now, this case will continue on three parallel tracks: (i) district court adjudication in the wake of the August 2005 revised appellate opinion; (ii) Reexamination of NTP’s patents at the USPTO; and (iii) the petition for writ of certiorari at the Supreme Court.

    Reissue Patent Invalid Because Reissue Was Filed To Correct Procedural Error

    Patent, Patent Cases 2005

    Patentlyo025Medrad v. Tyco (W.D. Pa 2005).

    Medrad sued Tyco for infringement of its patented injection system for use with an MRI.  The patent, RE 37,602, underwent two reissue procedures before being asserted by Medrad. 

    Tyco asserts, however, that the reissue patent is invalid because the reissue process was not initiated to correct one of the four statutorily identified errors:

    1. Defect in the specification;
    2. Defect in the drawing;
    3. Error in claiming too much; or
    4. Error in claiming too little.

    Rather, in this case, the patentee filed the second reissue to correct a mistake made during the prosecution of the original reissue. (The patentee failed to file a supplemental reissue declaration in compliance with PTO Rule 1.175).

    The district court agreed with the defendant that Section 251 (Reissue) can only be used to correct an error in the specification, drawings or claims and cannot be used to correct a procedural error that is not reflected in the patent grant itself.

    “While we recognize that this holding produces a harsh result — ultimately, plaintiff’s patent is invalidated because it failed to file a supplemental declaration with the PTO — we cannot reconcile plaintiff’s legal argument with the language of section 251, and the controlling case law interpreting it.

    Thus, the court found Medrad’s reissue patent invalid because the reissue was filed for a purpose other than that enumerated in the statute.

    Comment: This case should serve as a reminder to patent practitioners that the PTO can occasionally be convinced to give you more than what the law allows. If that happens, it is the patentee who pays the ultimate price.

    Licensee Lacks Standing; Dismissed With Prejudice

    Patent, Patent Cases 2005

    Patentlyo024Sicom Systems v. Agilent (Fed. Cir. 2005).

    Sicom’s lawsuit was dismissed by the Delaware district court after finding that the plaintiff was not an “effective patentee” and thus lacked standing to sue.

    The patent in question uses “eye patterns” for automatic monitoring of signal transmissions.  (Patent).  The patent was originally assigned to the Canadian Government and then licensed to Sicom, a company owned by the inventors. Under the license agreement Sicom had rights to bring “commercial infringement actions.”  However, the district court found that such rights were insufficient to allow a licensee to bring suit because “Canada may still be able to pursue non-commercial customers of Defendants like governmental entities, the military and universities, thereby creating multiple risk of litigation over the same patent, a result which is inconsistent with a genuine exclusive right to sue.”

    Generally, a patentee and successors in title have rights to sue for patent infringement as do licensees who receive “all substantial rights under the patent.” Thus, a nonexclusive license confers “no constitutional standing on the licensee to bring suit.”

    On appeal, the CAFC agreed that Sicom did not possess all substantial rights under the patent — focusing on Canada’s ability to sue other infringers and Canada’s retention of a right to practice the invention.

    Dismissal With Prejudice: Sicom also argued that the lower court’s dismissal with prejudice should be set aside to give Sicom a third chance to establish standing.  However, because the company already had one chance to correct the standing defect, the CAFC affirmed, finding that the district court was within its discretion to dismiss the case with prejudice.