Indecipherable Patents
CAFC: Patent Licensee in Good Standing has No Standing for Declaratory Relief
USPTO: Examiner Error Rate at Less Than Five Percent
Claim Construction: Failure to Submit Contrary Definition Results in Inferred Agreement
Government Opposes Supreme Court Review in Festo Remix
Memorial Day
Patent Reform: Bloggers Take Sides
Overlapping Ranges Create Prima Facie Case of Obviousness
Patent Reform: Congress Choosing Sides
Wise patent attorneys
May 2005 Report on New Academic Research
Each month I post a note discussing new research from the academic side of patent law. The May 2005 edition includes three great articles from a range of topics:
1. Donald S. Chisum, Reforming Patent Law Reform, 4 J. Marshall Rev. Intell. Prop. L. 336 (2005). In a short and accessible article, Professor Chisum discusses the nuts and bolts behind patent law reform and asks “reformers” to take a high road. Specifically, the article proposes six “principles” that any proposed patent legislation should follow: (i) simplicity; (ii) zero-based budgeting; (iii) cost sensitivity; (iv) completeness and generality; (v) international compatibility; and (vi) clarity on effective dates. As demonstrated by Chisum, the proposed legislation fails each of these principles. Download the article. (Also, check out footnote 31). (Thanks to Karl Maersch for the tip).
2. Douglas G. Lichtman, Substitutes for the Doctrine of Equivalents: A Response to Meurer and Nard, U Chicago Law & Economics, Olin Working Paper No. 244 (May 2005). In a preemptive strike, Professor Lichtman has taken issue with the forthcoming patent claim scope article by Professors Michael Meurer and Craig Nard. Lichtman argues that the doctrine of equivalents (DOE) is still useful in today’s patent world. Making three major points, Lichtman argues that the DOE (i) ensures patent viability despite language and foresight limitations; (ii) discourages wasteful efforts to “perfect” claim language; and (iii) allows the patent system to make decisions based on todays knowledge rather than living in the false construct that time stopped at the date of the invention. Remembering the article’s title, Lichtman argues that the DOE has no equivalent substitutes. Meurer Nard Article, Lichtman Article. (The Meurer Nard article will be published in the Georgetown L.J. later this year).
3. Mark H. Webbink, A New Paradigm for Intellectual Property Rights in Software, 2005 Duke L. & Tech. Rev. 0012 (2005). Webbink is deputy GC at Red Hat. In this critique, Webbink presents a dissenting voice against a recent article by Microsoft’s GC Bradford Smith (71 U. Chi. L. Rev. 241 (2004)). In that article, Smith, and his co-author Susan Mann (also of Microsoft) argued that growth in the software industry is a direct result of implementation of strong intellectual property regimes for software. Webbink makes the case that many other developments were much more important to the explosion in the software industry in the 1980’s and 1990’s. He lists the development of the personal computer as one such cause for the explosion in off-the-shelf software. Webbink also gives Microsoft as a test-study — showing that Microsoft did not escalate its patent filings until 1994, “long after the company had become well established.” Read the Article.
CAFC Interprets Knorr-Bremse — Finds Willful Infringement
Imonex Services v. W.H. Munzprefer Dietmar Trenner (Fed. Cir. 2005).
In one of the first willfulness decisions since Knorr-Bremse, the Court of Appeals for the Federal Circuit (CAFC) has affirmed a district court’s denial of JMOL after a jury verdict of willfulness.
This case involves a mechanical money sorter that differentiates according to coin diameter. Imonex sued several defendants and won a jury verdict that included increased damages for willfulness.
According to the CAFC, “willfulness requires a showing that the totality of the circumstances evince the egregious conduct that constitutes willful infringement.” (citing Knorr-Bremse).
In this case, Imonex had disclosed the patented device (that was properly marked) to employees of the defendants several years before filing suits. Likewise, Imonex brochures and literature included statements that the products were patented. These facts, according to the CAFC, were sufficient to raise a duty of due care.
“The jury could have reasonably concluded that several instance recounted in the record triggered the [Defendants’] duty of care.”
Once the duty of care exists, the defendants must take steps to ensure that they do not violate the patent.
Affirmed.
Link:
BPAI interprets closed transition phrase for method claims
Ex parte Hideaki Ueda (BPAI ) (NOT PRECEDENTIAL)
In a case involving a process for preparing an organic electroluminescent element, the patent examiner issued a rejection for indefiniteness under 35 USC 112, second paragraph. The examiner indicated that the claimed language of "consisting essentially of" excluded any further steps which materially affect the claimed process. Because the dependent claims included further limitations, the examiner rejected those claims as logically excluded by the "consisting" language.
On appeal at the BPAI, the Board reversed the examiner, finding that the phrase "consisting essentially of" does not limit a claim only to steps specifically recited in the claim — but is only would exclude ingredients which would materially affect basic and novel characteristics.
In this case, the limitations described in the dependent claims were disclosed in the specification. As such, those elements cannot contradict the basic characteristics of the invention.
Link:
Caterpillar Petitions Supreme Court on Issue of Implied Bias of Jury Members
Caterpillar v. Sturman (on petition for writ of certiorari).
In 2004, the Court of Appeals for the Federal Circuit vacated a jury verdict in a trade secret and contract dispute involving Caterpillar. [Article]. The problem involved Juror No. 3, whose spouse was a current Caterpillar employee — and thus potentially biased.
Normally, the question of whether an individual juror is biased is a factual determination entitled to deference on appeal. However, the CAFC ruled that the district court’s decision was based on “implied bias, as opposed to actual bias” and thus is reviewed de novo. Applying Seventh Circuit law, the court found the implied bias is demonstrated by “showing that the juror has a personal connection to the parties or circumstances.” As such, the spouse’s presence on the jury created an implied bias sufficient to vacate the judgment.
Now, Caterpillar has asked the U.S. Supreme Court to review the case. In its petition for writ of certiorari, Caterpillar argues that the CAFC’s decision to “automatically disqualify the spouse of an employee of a party” is in conflict with the Second, Fourth, Fifth, Sixth, Eighth, Seventh and Eleventh circuits. The petition cites Smith v. Phillips (1982) for the proposition that “implied bias doctrine is not viable for parties challenging jurors on a per se basis. Caterpillar also argues that Sturman should not be able to argue implied bias because the company failed to use its peremptory challenges to protect against potentially biased jurors.
In its brief filed in opposition, Sturman argues that (i) there is “no circuit split” on the issues raised by Caterpillar; (ii) that the CAFC properly applied Seventh Circuit and Supreme Court law; and (iii) that Caterpillar did not raise its current argument below. Sturman notes that the implied bias has a long history of application “stretching back to Blackstone’s day.” Sturman also dismisses the importance of the case — since the CAFC’s interpretation of Seventh Circuit law is not binding precedent.
Inconsistency Between Views of Two PTO Examiners Found Relevant to Obviousness Determination During Litigation
Syntex v. Apotex (Fed. Cir. 2005).
Apotex filed an ANDA to begin marketing a generic version of ACULAR, an ophthalmic NSAID protected by a patent owned by Syntex. Based on the Section IV filing, Syntex filed suit against Apotex for patent infringement.
After a bench trial, the district court determined that the proposed generic infringed the claims of the ACULAR patent and that the patent was not invalid.
Regarding invalidity, the district court concluded that Syntex had overcome obviousness issues by showing that the prior art taught away from the use of the drug/surfactant for opthalmic uses and that such a use created “unexpected results.” In its decision, district court noted that because the prior art at issue had been before the examiner during prosecution, the burden of proving the challenged claims obvious “is particularly high” — and that Apotex had failed to meet this heightened burden.
On appeal, the CAFC reversed — finding “clear error by the district court in several of the grounds that led it to conclude that the invention claimed by the claims in suit would not have been obvious.”
Of the several grounds for reversal, the issues of examiner discrepancy, expert testimony, and commercial success may be the most interesting:
Examiner Discrepancies:
Two different PTO examiners worked on various portions of the asserted application and its parent applications and had seemingly inconsistent views regarding patentability of the application. The CAFC found this relevant to the obviousness determination.
This statement contradicted the express finding of the initial PTO examiner that Syntex’s earlier data failed to show unexpected results. Whether the second examiner was aware of the earlier rejection of Syntex’s claims is unknown. But the relevance of the inconsistency between the views of two examiners is not insignificant.
Although we conclude . . . that Syntex did not commit inequitable conduct . . . we think the unvarnished view of the prosecution history shows some weakness in the conclusion that the patentee established unexpected results for the claimed surfactant.
Expert Testimony:
The Appellate Panel found that the district court erred by failing to examine Apotex’s expert testimony on the question of motivation to combine and unexpected results.
Commercial Success:
The district court relied heavily on the commercial success of ACULAR in its nonobviousness decision. However, the CAFC requested that the lower court revisit this issue in light of the recent case of Merck v. Teva.
In Merck, the court found that commercial success of an FDA restricted product “has minimal probative value on the issue of obviousness. . . . Financial success is not significantly probative . . . because others were legally barred from commercially testing the [] ideas.”
Concurrence:
In a concurring opinion, Judge Prost disagreed with a portion of the majority opinion that made note of “inconsistency between the views of two examiners” who examined the asserted application and a parent application.
In general, I fail to see how the conduct of a patent applicant is relevant to an obviousness determination. Alleged misconduct at the PTO, in terms of either mischaracterizations or omissions, goes to the heart of an inequitable conduct inquiry but is simply irrelevant to an obviousness inquiry.
Links:
Does the Constitution Provide for a Right to an Injunction in Patent Cases?
Summer is almost here — How would you fare on this final exam question:
The Progress Clause (Article I, Section 8, Clause 8) of the U.S. Constitution provides that:
“Congress shall have the power… To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”
Using this clause as a basis for analysis:
Patent: Allegation of Copying Precluded Without Evidence That Product Embodies Ideas or Design of an Asserted Claim
In Leapfrog Enters. v. Fisher-Price, Inc., (D. Del. 2005), a magistrate judge granted defendant Fisher-Price’s motion in limine to preclude plaintiff, Leapfrog, from alleging and introducing evidence of copying by Fisher-Price. In particular, the magistrate judge refused to allow Leapfrog to introduce at trial the fact that Fisher-Price possessed Leapfrog’s LeapPad product during the development of the accused product.
One factor of willful infringement is defendant’s deliberate copying of plaintiff’s ideas or designs, including copying of the commercial embodiment of the claims (and not just the claims themselves). In Leapfrog, the magistrate found that, as a threshold matter, Fisher-Price’s possession of the LeapPad product during development of the accused product was relevant to the issue of willful infringement. The magistrate still granted Fisher-Price’s motion to exclude such evidence, however, because Leapfrog had no expert testimony to prove that the LeapPad product embodied four out of the five claim elements of the asserted claim. Thus, because Leapfrog could not “close the evidentiary loop” and connect its product to the claims, it was irrelevant whether Fisher-Price copied Leapfrog’s product.
The Leapfrog Court held that although it was not necessary for Leapfrog to show that its LeapPad product was an embodiment of “every” limitation of the asserted claim, a plaintiff must adduce “some” evidence amounting to more than “mere attorney argument” that its product is an embodiment of the “ideas or design” of an asserted claim.
Links:
In re Fisher: Oral Arguments
Don Zuhn and I have been covering the recent in re Fisher case here and here. Fisher questions whether the PTO is requiring a heightened standard of utility for biotechnology inventions — specifically the case is directed to the standard of usefulness under 35 U.S.C. Section 101 applied to nucleotide sequences known as expressed sequence tags (EST’s). We were unable to attend the oral arguments. However, The American Intellectual Property Law Association (AIPLA) has given permission to reprint its report of the oral arguments on the Patently-O Site. Jim Crowne is the editor of the AIPLA Reports that are usually only available to AIPLA members:
AIPLA REPORT
Federal Circuit Oral Argument Addresses Utility for EST Patents
In re Fisher, Fed. Cir., No. 04-1465, 5/3/05 oral argument.
The patentability of genetic markers, known as “expressed sequence tags” or ESTs, was argued before the Federal Circuit at a May 3, 2005, oral argument lasting more than two hours. Reviewing a conclusion by the Board of Patent Appeals and Interferences that the patent applications failed to satisfy the utility requirement of 35 U.S.C. §101, the court struggled with the argument that the application must disclose the utility of thing marked, as opposed to the utility of the markers themselves.
Appellant’s Argument
Former Solicitor General Seth Waxman, of Wilmer, Cutler, Pickering, Hale & Dorr, appeared for Monsanto Corp., the real party in interest. He acknowledged that under Brenner v. Manson, 383 U.S. 519, 148 USPQ 689 (1966), proof of utility requires that the claimed subject matter must provide a specific benefit in currently available form. He argued, however, that this standard is met with disclosures of specific and practical uses of the markers, unrelated to the function of the genes to which they correspond. In this case, the claimed ESTs can be used as maize chromosome markers to produce statistical associations between the chromosome map and plant traits developed by traditional cross breeding techniques.
Judge Randall Rader observed that the claimed subject matter is simply code and the applicant can’t say what it does. Waxman replied that the tagging results have great importance, independent of knowledge of the genes themselves, for the discoveries that they make possible. But the statute refers to the utility of the claimed invention, not the utility of something the invention makes possible, Judge Rader answered. Why isn’t this matter determined by the PTO’s instruction in its Utility Guidelines as to when an invention is useful enough for patentability, he asked.
The PTO’s error is its focus on the function of the gene being marked, which is not relevant to the utility of the invention, i.e., the marker itself, according to Waxman. In addition, the PTO improperly interpreted the Brenner phrase “specific utility” to mean “unique utility.” On that basis, Waxman explained, it held that the asserted useful characteristics of the ESTs failed to satisfy the utility requirement because the claimed marking function is carried out by all other ESTs.
Isn’t this the equivalent of claiming a single page of a book in the middle of a library, Judge Rader asked. The library as a whole will be very valuable once it’s complete, but one page out of the library would not seem to be enough for a patentable invention, he observed. Replying to the metaphor, Waxman argued that the ESTs here can be used in ways having nothing to do with the library. The mapping is desired to establish a statistical correlation between identified sequences and plant traits identified by cross breeding, he explained.
But that means that every tag is patentable, Judge Paul Michel observed. Waxman agreed, explaining that the utility requirement is satisfied for every tag that is properly disclosed. What about the tags that are identified by computer with randomly generated code combinations, he asked, pointing out that the 32,000 sequences identified in this case is but a small subset of all that could be found in the maize genome.
Judge Rader followed up by asking how much weight to give administrative convenience in view of the fact that the PTO could be required to examine an avalanche of claims. Notwithstanding such factual circumstances, Waxman replied, the PTO is required to apply the correct rule of law. But the issue here is whether the claimed invention is useful, Judge Michel pointed out, which is a fact question, not a legal question; shouldn’t the decision on review for that reason be very deferential to the PTO’s determination? The error asserted here is legal error, Waxman replied. The term used by the Supreme Court is “specific utility,” which means “identifiable utility,” not simply “unique utility,” he argued. The PTO committed legal error by making its utility decision based on the fact that all other ESTs have the same use, and on the fact that the application disclosed nothing about the function of the marked gene, he explained. This was the wrong criterion for judging patentability, he concluded.
PTO’s Argument
Appearing for the PTO, Associate Solicitor Stephen Walsh argued that the EST claims here fail to satisfy the utility requirement because they amount to little more that a starting point for future research rather than disclosing a specific, immediate and “substantial” utility.
But what about the argument that the utility requirement for marker inventions requires no knowledge about the marked gene or protein, Judge Michel asked? Walsh answered that Brenner may not require complete knowledge of everything about the gene, but it requires more than no knowledge at all. Why isn’t knowledge of a gene promoter sufficient, Judge Michel persisted. Fisher’s application disclosed no information about a specific promoter, according to Walsh, explaining that the promoter is only discovered upon use of the marker as a starting point.
Won’t the PTO’s test in this case discourage the disclosure that comes with patenting and drive inventors to trade secret protection, Judge Rader asked. That would essentially cut off later innovators from using that technology to make other important and valuable discoveries, he observed. Disclosures are important, Walsh responded, but the utility condition of patentability requires that the invention confer an immediate benefit. That may be, Judge Rader replied, but the PTO made its decision without knowing whether or not the invention provides a public benefit. The decision under these circumstances suggests that the driving factor was the administrative convenience related to the difficulty of examining the many marker claims, he observed. The decision was only an attempt to follow the Supreme Court’s utility rule, Walsh insisted.
Why can’t there be utility simply in the knowledge that the compound is present without respect to knowing anything about the benefit of the compound itself, Judge Bryson asked. Doesn’t the PTO argument mean that there must be an end product or end use to satisfy the utility requirement, Judge Michel added. Under Brenner, according to Walsh, a mere statement that a compound exists is no substitute for a disclosure of the compound’s benefit. The PTO has issued patents on probes where some things about the tagged microorganism were unknown, Walsh explained. However, those were cases where the probe was derived from the target microorganism, he said, and its features were reflected in the probe itself.
But where is the tilting point for showing sufficient utility, Judge Michel followed up. Is this an issue like pornography where you know it when you see it? Is something inherently unpatentable because it can only be used in a laboratory? Why isn’t the production of information useful in itself, Judge Rader added. Why isn’t evidence of a commercial demand for an EST sufficient to satisfy the utility requirement, Judge Bryson asked. Trying to respond to all of these questions, Walsh insisted that, even though they can be sold,
the tagged items are still only objects for study without any identified immediate benefit. Something does not become patentable merely because someone may want to buy it, he said, making a comparison to selling raffle tickets with no information about which ticket will pan out.
Does that mean that commercial success is utterly irrelevant to proof of utility, Judge Michel asked. Isn’t there anything about utility that can be inferred from a high selling price, Judge Bryson said. The selling price of a product is not relevant to the required immediacy of its benefit to prove utility, according to Walsh. It may not prove everything about utility, Judge Michel observed, but it may be relevant to show that markers are in demand to establish correlation of the marked gene and traits derived by cross-breeding.
Issues Not Addressed
Although the parties and the court explored the application of the Brenner utility decision, no one at the oral argument commented on the fact that Brenner reviewed a process claim to produce a known product (steroids), rather than a product claim as in this case. Brenner held that the utility of a claimed process is not proved without a showing of the utility of the produced compound. Justice Abe Fortas wrote as follows:
Until the process claim has been reduced to production of a product shown to be useful, the metes and bounds of that monopoly are not capable of precise delineation. It may engross a vast, unknown, and perhaps unknowable area. Such a patent may confer power to block off whole areas of scientific development, without compensating benefit to the public. The basic quid pro quo contemplated by the Constitution and the Congress for granting a patent monopoly is the benefit derived by the public from an invention with substantial utility. Unless and until a process is refined and developed to this point—where specific benefit exists in currently available form—there is insufficient justification for permitting an applicant to engross what may prove to be a broad field.
Neither party commented on whether the policy considerations articulated by Justice Fortas for process claims apply equally to product claims. In addition, the Brenner opinion directly addresses Judge Rader’s questions about the non-disclosure risks of disallowing patents and driving inventor’s to trade secret protection. Justice Fortas wrote as follows:
It is true, of course, that one of the purposes of the patent system is to encourage dissemination of information concerning discoveries and inventions. And it may be that inability to patent a process to some extent discourages disclosure and leads to greater secrecy than would otherwise be the case. The inventor of the process, or the corporate organization by which he is employed, has some incentive to keep the invention secret while uses for the product are searched out. However, in light of the highly developed art of drafting patent claims so that they disclose as little useful information as possible—while broadening the scope of the claim as widely as possible—the argument based upon the virtue of disclosure must be warily evaluated. Moreover, the pressure for secrecy is easily exaggerated, for if the inventor of a process cannot himself ascertain a “use” for that which his process yields, he has every incentive to make his invention known to those able to do so. Finally, how likely is disclosure of a patented process to spur research by others into the uses to which the product may be put? To the extent that the patentee has power to enforce his patent, there is little incentive for others to undertake a search for uses.
Reprinted with permission.
CAFC: Court Can Only Correct Prima Facie Patent Errors
Group One Ltd. v. Hallmark Cards, Inc. (Fed. Cir. 2005)
Group One owns patents on a device for curling ribbon. Hallmark manufactures pre-curled ribbon products and in 1997, was sued by Group One for infringement.
A jury found the patent valid and infringed and awarded $8.9 million in damages to Group One. However, in a post-verdict ruling, the Judge found the patents invalid.
I. Correctable Mistake on the Patent
One of Group One’s patents included a printing error by the PTO that resulted in the omission of important claim language that was added during prosecution of the application. The district court held that it lacked authority to correct the error and that only the PTO could correct the printing error. 35 U.S.C. 254.
The appellate court affirmed, finding that a district court may only correct a patent document if the error is “apparent from the face of the patent.”
II. Motivation to Combine
The patent claims require a “stripping means” that was found in several prior art references. None of the references, however, related to ribbon curling. The jury found that the references did not obviate the claims — a verdict that was overturned by the district court in a JMOL. The CAFC restored the jury verdict, finding that even the examiner’s failure to consider stripping means references could not “provide a basis for overturning the jury’s factfinding.”