eBay infringement decision expected

Inventors, Patent

There is an interesting article in the Post (free subscription) about Thomas Woolston, creator of the MercExchange and Patently-O Reader.  Woolston won a $35 million patent infringement suit against eBay that is now on appeal.  According to the article he and I have the same schedule:

Every morning at 11, Woolston stops whatever he’s doing, sits at his computer and clicks "refresh" on the Federal Circuit Court of Appeals Web site.

Woolston checks the Federal Circuit’s website because the court is expected to release its decision in the eBay case within the next few weeks.  I check the website so that I can provide the most up-to-date news on patent cases.

Looming specter of litigation creates sufficient uncertainty for declaratory judgment action

Patent, Patent Cases 2005

Electronics for Imaging v. Coyle (Fed. Cir. 2005) [pdf]. 

By Dennis Crouch

EFI makes controllers for network printing.  Coyle obtained patents on his network printing inventions and informed EFI that it was (allegedly) violating his patent.

Coyle began to pressure EFI on an almost daily basis, threatening to drive EFI out of business. EFI alleges that Coyle repeatedly warned that he would bring multiple lawsuits, stating that “we’ll sue all of your customers” and “bad things are going to happen.”  Coyle even identified specific attorneys and law firms in support of his litigation threats.

EFI sued for declaratory judgment.  The district court, however, dismissed the action. EFI appealed to the Federal Circuit.

A declaratory action allows a party “who is reasonably at legal risk because of an unresolved dispute, to obtain judicial resolution of that dispute without having to await the commencement of legal action by the other side.” 

The district court had dismissed the declaratory judgment action because it determined that EFI did not have any uncertainty about Coyle’s intention to sue (Coyle stated flatly that it he would sue).  Additionally, the court found that EFI was not uncertain about the strength of its legal position.

On appeal, the Federal Circuit reversed, disagreeing with the district court’s interpretation of "uncertainty."

The proper inquiry should not have been whether a party is “certain” that its legal position and defense theories are sound, because litigation is rarely “certain,” even if one is confident of one’s position. When a party is threatened … there are other uncertainties, including whether there will be legal proceedings at all, not just whether one will prevail. There is the uncertainty whether one will have to incur the expense and inconvenience of litigation, and how it will affect the threatened party’s customers, suppliers, and shareholders. Reservation of funds for potential damages may be necessary. … “Uncertainty” in the context of the [Declaratory Judgment] Act refers to the reasonable apprehension created by a patentee’s threats and the looming specter of litigation that results from those threats.

Next step in open source: Book Editing

Patent

[Link] Professor Larry Lessig’s popular book Code and Other Laws of Cyberspace has been out for a few years now.  With this book, Lessig essentially created a new language for discussing the interrelation between law and cyberspace. 

Professor Lessig has now decided to update the book and republish as a second edition.  However, rather than simply using his own knowledge, Lessig has decided to edit the book on-line as a Wiki.  He is recruiting Chapter Captains to take charge of each chapter.  The book will be published in the fall — Lessig intends on donating the proceeds to the Creative Commons.

CAFC: Design Patent Infringement Opinion Need Not Mention Every Detail of a Patented Design

Patent, Patent Cases 2005

Brooks Furniture v. Dutailier Int’l. (Fed. Cir. 2005) (03-1379) [pdf].

By Jennifer Swartz

Brooks Furniture brought a declaratory judgment action in Tennessee District Court after receiving a cease and desist letter from Dutailier International, the assignee of the design patent for “Rocking Chair Trim.”  Although the cease and desist letter sent to Brooks Furniture was based upon opinions of counsel, officers, and outside experts, the district court found that the letter had been sent in bad faith by Dutailier because the opinions Dutailier relied upon did not discuss the chair back’s specific feature of a “trailing edge descending in a gentle ‘s’ curve.” Accordingly, the lower court deemed the case exceptional and awarded attorney fees. 

The Federal Circuit vacated the award, rejecting the lower court’s narrow view of the opinion’s reasonableness:

The fact that an infringement opinion may not have mentioned every detail of the patented or the accused design does not necessarily render the opinion wrong or unreliable.

As the test for a design patent’s infringement is “substantial identity,” not every aspect of the design need be identical, and thus an opinion need not consider every aspect of a design to be reasonable. 

Jennifer Swartz is an associate at McDonnell Boehnen Hulbert & Berghoff LLP in Chicago.  Ms. Swartz has experience in various aspects of intellectual property litigation including patent and trademark infringement, and trade secret violations.  [Brief Bio]

Patent Tips for a Small Business with Grand Ideas

Claim Drafting Tips, Patent

Many small business owners have thought of becoming more aggressive in protecting their intellectual property rights.  Although attorney’s fees are always expensive, patent rights have become more important with each passing year. For many companies, a patent portfolio serves as a type of insurance that has small chance of having a great potential upside. 

Here are a few tips for those getting their feet wet.

1. If someone at your company has an idea that may be patentable, act quickly. You can lose rights by disclosing the idea publicly or by offering it for sale before filing for a patent application.  This type of disclosure can even occur before you make any engineering drawings or working models.

2. Try to keep records that help establish the novelty of the invention and the date of conception.  This evidence may be important at a later date — especially if there is any delay in filing for patent protection.

3. Before you hire a patent attorney, bone up on the subject — Read the book “Patents and How to Get One.” It is very short and is a great book to read on your next business trip.

4. Retain a patent attorney to discuss your issues, to help you decide whether to file any patent applications, and then to help with the preparation and prosecution of the patent applications.  Even if you are only filing a single patent application, the relationship with your patent attorney will likely last many years.  Thus, it is important to find a patent attorney and law firm that you can trust and that are comfortable with.  Get references.

5. When thinking about your potential inventions, remember that you can obtain patents on devices as well as methods.  Methods, for example, may include methods of manufacturing an item, methods of doing business, methods of using a device, and process flow methods that describe the flow of data in a piece of software.  (Merely a few examples.)

These tips are valid for almost any company that is starting down the road of patenting.  However, every case is different.  You should raise any concerns with your attorney. 

Once you have applied for several patents, you will then begin to think about patent portfolio management, licensing and other forms of patent enforcement. However, that discussion is for another day.

Federal Circuit Gives PTO Free Rein To Demand Information Beyond That Defined By Section 1.56 As Material to Patentability

Patent, Patent Cases 2004

Star Fruits S.N.C. and Institute of Experimental Botany v. United States and Department of Commerce (Fed. Cir. 2005)

By Alison Baldwin

What appears on its face to be a strictly procedural case actually raises a few interesting policy issues.

Procedurally, Star Fruits filed a U.S. Patent Application directed to a variety of peach tree.  In a subsequent office action, the examiner included a "Requirement For Information Under 37 C.F.R. 1.105" that included a request for "any information available regarding the sale or other public distribution of the claimed plant variety anywhere in the world" and "copies of the application, published proposed denomination and published Breeder’s Right grant."  Star Fruits declined to provide the information requested under 37 C.F.R. 1.105 on the grounds that the material requested was "not material to patentability of the new variety."  Because Star Fruits did not comply with the Examiner’s request, the Office issued a Notice of Abandonment.  Star Fruits petitioned the Director pursuant to 37 C.F.R. 1.181 and the petition was denied.  Subsequently, Star Fruits appealed to the district court under the Administrative Procedure Act.

In addressing 37 C.F.R. 1.105, the Federal Circuit has interpreted the rule to include "a zone of information beyond that defined by section 1.56 as material to patentability, and beyond that which is directly useful to support a rejection or conclusively decide the issue of patentability."  The court held that, so long as the request from the examiner for information is not "arbitrary or capricious," the applicant must comply with the request.

Furthermore, the Federal Circuit noted that if Star Fruits believed that the requested information was going to be used to support a wrongful rejection under 35 U.S.C. 102, it should have provided the information and then subsequently argued against the wrongful use.  The court held that Star Fruits had no right to object to the potential use of the information. 

Interestingly, in her dissenting opinion, Judge Newman argued that Star Fruits did exactly what it was supposed to do, when faced with an agency’s change in law and practice.  Star Fruits was challenging the PTO’s 2001 change in practice holding that a foreign sale or use of a plant that has foreign Breeder’s Rights registration may bar United States patentability of that plant.  This information requested by the examiner was for support for a rejection based upon this policy change.  This internal change in practice is arguably an attempt by the PTO to broaden 35 U.S.C. 102 without the required notice-and-comment rulemaking procedures.  Judge Newman criticized the panel for ignoring the real issue of law underlying this dispute. 

NOTE: Alison Baldwin is a partner at McDonnell Boehnen Hulbert & Berghoff.  Her patent litigation experience has covered a diverse range of topics, from recombinant DNA technology to digital television. In addition to her law degree, Ms. Baldwin holds degrees in biochemistry and plant pathology and has conducted research on the molecular mechanisms involved in plant disease resistance. [Brief Biography].

Pew Trust Concludes that Blogs are Now Mainstream

Patent

The Pew Internet & American Life Project Has released a memo on "The state of blogging."  Some findings from their November survey of internet users:

  • By the end of 2004 blogs had established themselves as a key part of online culture.
  • More than 8 million Americans have created a blog.
  • 27% of internet users read blogs — a 58% jump from February 2004.
  • 12% of internet users have posted comments on someone else’s blog.
  • Over half of all bloggers are over 30 years old.

Claim Construction Showdown set for February 8, 2005.

Patent,

[Link] The en banc rehearing of Phillips v. AWH is scheduled for Tuesday, February 8, 2005 at 10:00 a.m. in Washington DC.  It is expected that the outcome of this case will help define the mechanics and legal basis for patent claim construction.

[Link] More information on the case, and a review of the briefs filed can be found here.  I reviewed the major arguments common to the various briefs in the December 2004/January 2005 edition of PatentWORLD magazine (Issue 168).

 

 

hINV Researchers Invalidated Patent Application Based on their Own Publications

Patent

In re Crish (Fed. Cir. 2004).

Identification of nucleotide sequence for known plasmid does not render nucleotide sequence novel.

by Donald Zuhn

In an appeal from a decision of the PTO Board, the Federal Circuit affirmed the rejection of claims directed to purified DNA molecules having promoter activity for the human involucrin gene (hINV) as unpatentable under 35 U.S.C. § 102(b).

After isolating and sequencing the promoter sequence for hINV in the plasmid pSP64lI-3 H6B, Appellants pursued claims directed to specific portions of the promoter sequence having promoter activity. The claims were rejected under § 102(b) as being anticipated by one of Appellants’ own publications, disclosing the approximate size and structure – but not the sequence – of the hINV promoter, and by a second publication, disclosing protein-binding sites on the hINV promoter. In Appellants’ own publication the plasmid pSP64lI-3 H6B was used to determine the structure of the hINV promoter, while in the second publication the plasmid pSP64lI-3 H/Hc was used to identify protein-binding sites on the hINV promoter. Appellants appealed the Examiner’s final rejection to the Board.

Appellants first asserted that even if the publications cited against their application used plasmids containing the same hINV promoter region, other workers had sequenced the hINV promoter region in the plasmid pSP64lI-3 H6B, and had obtained a sequence that differed significantly from the promoter sequence described in Appellants’ application. In addition, Appellants asserted that because neither prior art publication specifically disclosed the nucleotide sequence recited in their application, neither publication could anticipate their application. The Board affirmed the Examiner’s final rejection, concluding that Appellants had failed to demonstrate that the plasmids used in the prior art publications possessed hINV promoter sequences that differed from the sequence described in Appellants’ application. The Board also determined that although neither prior art publication disclosed the hINV promoter sequence, the plasmids described in each publication necessarily possessed an hINV promoter sequence that was identical to the sequence described in Appellants’ application.

In affirming the Board’s decision, the Court determined that the Board had reasonably concluded that the plasmids used in Appellants’ prior publication and in Appellants’ application were identical. The Court next concluded, in addressing Appellants’ first assertion, that it was irrelevant whether other workers had obtained a different sequence for the promoter region of hINV since Appellants could not rely upon the inability of another worker to correctly sequence the promoter region of the hINV gene from plasmid pSP64lI-3 H6B when they had accurately sequenced the promoter region themselves. Finally, with regard to Appellants’ second assertion, the Court determined that “[Appellants’] characterization that the pending claims cover a novel DNA sequence having promoter activity, whereas the references disclose only the starting material plasmid, is unsound,” since “[t]he starting material plasmid necessarily contains the gene of interest, including the promoter region.”

NOTE: This post was written by patent attorney Donald Zuhn, PhD. Don is a true expert in cutting edge biotech patent law and practices both prosecution and litigation at McDonnell Boehnen Hulbert & Berghoff LLP in Chicago. [Brief Biography].

University of Illinois fails to secure soverign immunity in plasma screen patent dispute

Patent, Patent Cases 2005

Competitive Technologies and the University of Illinois v. Fujitsu (Fed. Cir. 2005).

In June 2004, the Federal Circuit dismissed the University of Illinois appeal for sovereign immunity under the Eleventh Amendment.  In that opinion, the Court found that the appeal lacked proper jurisdiction because the district court’s decision to not allow sovereign immunity was not a "final decision."

Now, the Federal Circuit has denied the University’s request for a rehearing. Specifically, the University argued that the cases relied by the Federal Circuit had been undermined by later case law.  The Federal Circuit disagreed:

As we have held, the decisions of the Supreme Court . . . make clear that a non-final resolution does not satisfy the Cohen test. Thus, the application of the first prong of Cohen in Agent Orange has not been undermined by subsequent decisions of the Supreme Court or other courts of appeals.

Petition for Rehearing Denied.

Honorable Paul R. Michel becomes Chief Judge

Patent

As expected, the Honorable Paul R. Michel has become Chief Judge of the United States Court of Appeals for the Federal Circuit.

The United States Court of Appeals for the Federal Circuit announces that Circuit Judge Paul R. Michel assumed the duties of Chief Judge of the court on December 25, 2004. Judge Michel was appointed to the court by President Ronald Reagan in December 1987. Complete biographical information about Chief Judge Michel may be found on the biographies page of the Federal Circuit’s Web site. Circuit Judge Haldane Robert Mayer relinquished the duties of Chief Judge on December 24, 2004, after having held the position for seven years.

Notably, the Federal Circuit handles all appeals in cases that arise under the U.S. Patent Act.

India Greatly Increases Patent Coverage

Patent, Patent Legislation

Chandra Joshi, an Indian associate of mine filled me in on the recent amendments to Indian patent law. The amendments not only make Indian law TRIPs compliant, but also rationalize the procedures for patent prosecution.  These changes now allow patents on products and remove provisions relating to EMRs (Exclusive Marketing Rights).

India, as you know, had so far permitted Patents only for processes and not products. With the new amendment to the Patent Act, it would now be possible to obtain Patents for product patents in Pharmaceuticals and Agro Chemicals. Under the Product Patent regime no new–use Patents would be granted.

The ordinance seeks to strengthen opposition proceedings by allowing for both pre-grant and post-grant opposition. The ordinance also seeks to simplify and rationalize the time-frame for process of patents. The time limit for giving requests for examination has been reduced to 36 months from 48 months earlier. Security provisions will also be tightened particularly for dual-use patent applications. Such patents will now be scrutinized by the patent office.

Further, software would continue to be copyright protected, embedded software that has technical applications can now be patented.

DDC Comment: I expect the change to have its greatest impact in the pharmaceutical area — up to now, India has been a pharma maverick — producing generics almost at-will.

Can Bloggers “Out” JGR Acquisitions?

Patent

From TheoDP, an anonymous reader:

Pssst, wanna make $10? It’s yours if you go to Google Answers before Jan. 7 and identify who’s behind JGR Acquisition, the mysterious company that paid $15.5M to acquire key Web Services patents at a Commerce One liquidation auction. Thus far, posters have correctly pegged recently-registered Delaware firm JGR Acquisition as the buyer (confirmed by this SEC filing). JGR’s registered DE agent shares the same phone number and address as the firm of Morris, Nichols, Arsht & Tunnell, whose representative client list includes Amazon.com, AT&T, Citibank and CyberCash.

Federal Circuit: Court Erred in Finding Case “Exceptional”

Patent, Patent Cases 2004,

Spectrum Labs v. Tech International (Fed. Cir. December 29, 2004).

Spectrum sued Tech Int’l for infringement for its patent related to a method of removing unwanted substances from human urine samples.  The purification method allows urine to be tested without interference from the unwanted substances.  The Nevada District Court granted summary judgment of non-infringement to Tech and granted Tech’s motion for attorney’s fees — noting that the suit was frivolous and in bad faith. 

Tech appealed the award of attorney’s fees.

On appeal, the Federal Circuit reversed — finding that the case was not "exceptional" under the statute (35 USC 285).

The CAFC listed types of cases that may create an "exceptional" circumstance: inequitable conduct before the PTO, litigation misconduct, vexatious and otherwise bad faith litigation, frivolous suit or willful infringement.  However, the Appeals Court found "none of those circumstances present" in this case.

A district court must provide reasoning for its determination that a case is exceptional for us to provide meaningful review. Further, an exceptional case finding is not to be based on speculation or conjecture but upon clear and convincing evidence.  The facts cited in the section 285 order do not provide clear and convincing evidence that Spectrum’s investigation and credit check constituted vexatious behavior. The section 285 order merely highlighted the fact that the credit check and background investigation occurred after issuance of the summary judgment order. Section 285 Order, slip op. at 3. The district court’s open speculation about the purpose of Spectrum’s investigations adds no support to its finding.

The Law: The determination whether to award attorney’s fees under section 285 involves a two-step process. First, the district court must determine whether Tech proved by clear and convincing evidence that this case is "exceptional." . . . Second, if the court finds the case to be exceptional, it must then determine whether an award of attorney’s fees is appropriate.

Comment: This case is really a commentary on claim construction jurisprudence.  In my view, the court could not call this an exceptional case because of the uncertainty associated with claim construction.

Anheuser-Busch loses patent infringement appeal: case remanded to district court

Patent, Patent Cases 2004

Aluminum_can_topper

Anheuser-Busch v. Crown Cork & Seal (Fed. Cir. Dec. 23, 2004) (unpublished)

In an unpublished decision, the Court of Appeals for the Federal Circuit (CAFC) has revived Crown’s case against Anheuser-Busch — sending the patent dispute back to the Wisconsin district court to determine whether A-B’s aluminum cans violate Crown’s patent No. 6,065,634.

Specifically, the Appellate Court disagreed with the lower court’s claim construction — finding that the district court erred by importing a limitation into the claims that was not required by the specification. 

The patent does not indicate that the shape of the chuck wall is necessary to accomplish the [strength] goal.  THus, no basis exists for the court to import the "flat" limitation from the preferred embodiment into the claims.

The district court must now re-construe the claims and determine whether the new construction alters its prior conclusion that Anheuser-Busch did not infringe Crown’s patent.

The CAFC also affirmed the dismissal of Anheuser-Busch’s claim that Crown violated A-B’s design patent No. D387,987.

Patently-O Blog Takes A Vacation

Patent

I’m taking off the next couple of weeks and headed to Kansas to spend time with family.  My dad and I are planning to build three lean-to barns to protect his horses and cows from the winter winds that sweep across the plains.  That is the kind of vacation that I like!

UPDATE ON THE BLOG:

Today marks day 246 of this ‘Patently-O‘ website. What began as a simple toy project has evolved into a modestly successful site. During this time, I* have written a brief summary of each patent law appellate opinion. In addition, many interesting unpublished appellate and published district court decisions have been reviewed. The result is about one case brief every two days.  I write about other patent law news too — so far a total of 521 posts — averaging out to more than two per day or about three articles per day if I take weekends off.

*While I have written the vast majority of the posts, I have not been alone in the process.  Other writers who have contributed include Don Zuhn, Baltazar Gomez, Mark Chael, and Joe Herndon.  I hope to get more people involved in 2005.

A couple of months ago, we have moved from a cheesy low-class web address: patentlyo.com to a cheesy high-class web address: patentlyo.com.  For those of you who don’t know, this move costs about $8 per year from godaddy.com.

COSTS:

This blog is cheap.  Typepad.com hosts the blog — I pay them $15 per month — that includes the blog templates and software for manipulating the various elements and sidebars.  I like Typepad, although some people prefer to use Blogger because it is free.  I also paid $20 (one time fee) for BlogJet, a “weblog client for Windows that allows you to manage your blog without opening a browser.”  Finally, I pay the $8 per year for patentlyo.com domain name. 

STATS:

For those of you who are interested: Free stat-counters are not worth much, but mine is approaching 180,000 hits.  As expected, the blog is getting many more hits now than it was in the beginning.  On weekdays, we can expect about 1500 hits.  Ask your IT manager how many hits your Firm website gets each week.

The (incomplete) visitor list includes over 1000 corporations, 150 universities, 70 government agencies, and 250 law firms. This total does not include visitors who reach the site through a “feed reader” such as bloglines or Kinja. 

I am also very happy with the 550+ individuals who receive the Patently-O Newsletter on a daily basis.

Major Referrers (past 1000 visitors):
www.google.com
news.google.com
search.yahoo.com
nip.blogs.com
www.IPNewsFlash.com
search.msn.com
www.techlawadvisor.com
www.becker-posner-blog.com
underneaththeirrobes.blogs.com
www.lawlawlaw.com

Most Popular Search Terms (past 1000 visitors):
duragesic; eolas; patently obvious; “cold fusion”; patent; crouch blog; patent blog; and uspto 

— Dennis Crouch

Changes at the Federal Circuit.

Articles and Publications, Patent

The Federal Circuit has announced several changes:

LINK: The Federal Circuit has made a change to its rule 27(h)(4), that authorizes the court clerk to grant consented to or unopposed motions to extend the time for filing a principal brief for not more than 60 days.  The clerk has already been delegated authority to extend, for up to 30 days, the time for taking any other action permitted by the rules.

By statute, the chief judge of the Federal Circuit shall serve for a seven-year term.  Chief Judge Mayer’s term is coming to an end, and Judge Paul Michel is reported to be in line replace Mayer before the new year.  Read Judge Michel’s Top Ten Patent Claim Drafting Tips.

LINK: The Federal Circuit has given notice of a proposed rule change to Federal Circuit Rule 28(a)(5) and requests public comment.  The proposed change would require that the jurisdictional statement accompanying a brief include a representation that the judgment or order appealed is final, or, if not final, the basis for appealability. (e.g., preliminary injunction, Fed. R. Civ. P. 54(b) certification of final judgment as to fewer than all of the claims or parties, etc.).

Thanks to Bill Heinze for the links.

USPTO Expected to Name David Freeland as new Chief Information Officer

Patent

According to a report from Federal Computer Week (FCW), the U.S. Patent & Trademark Office is expected to name David Freeland as its new chief information officer.  Freeland, a systems chief with the Texas Department of Human Services, is still awaiting clearance from the Office of Personnel Management.

The position of CIO is critical for the PTO as the office is undergoing a transfer to a paperless office.  Doug Bourgeois, Freeland’s immediate predecessor, is credited with initiating the move to electronic format: 

LINK: If it weren’t for Doug Bourgeois, his colleagues say, patent examiners would still be examining paper submissions as they had for 200 years.

According to the budget for fiscal year 2005, the U.S. Patent and Trademark Office officials will have about $300 million to spend on information technology projects, reportedly a 45 percent increase.

(Thanks to Florence Olsen at FCW for the reports).