Commerce Department Inspector General Releases Report Critical of Patent Office Examiner Goal and Appraisal System

Articles and Publications, Patent

The Inspector General’s Report highlighted several problems with the current system of Examiner Goals and Evaluation:

  • Patent Examiner Goals Have Not Changed Since 1976
  • Patent Examiner Performance Appraisal Plans Are Not Linked to Supervisor and PTO Goals
  • Patent Examiner Award System Is Not Well Structured
  • No “gain-sharing” award is offered between 110-120 percent of the production goal to encourage production at that level
  • Special achievement award does not require higher performance than the gain-sharing award
  • Criteria for pendency reduction award are not tied to pendency reduction

The Office of the Inspector General of the Commerce Department recently released its report on the Patent Office titled:

USPTO should reassess how examiner goals, performance appraisal plans, and the award system stimulate and reward examiner production. [Download PDF]

In addition, the Report made three fairly mild recommendations:

  • Reevaluate current patent examiner goals and assess the merits of revising them to reflect efficiencies in and changes to work processes resulting from automation and other enhancements.
  • Examine the benefits of revising patent examiner performance plans to (a) better reflect agency production, first action and overall pendency goals, and (b) better measure examiner success at processing applications within specified time periods.
  • Evaluate the current patent examiner award system to determine if there is a more effective and efficient way to stimulate higher examiner production.

Who is the Inspector General of the Department of Commerce?

In 1999, Johnnie Frazier is the was sworn in as the Inspector General of the U.S. Department of Commerce, and thus assumed responsibility for monitoring the operations of one of the most diverse federal agencies. As Inspector General, Mr. Frazier is charged with (1) promoting economy and efficiency, and (2) detecting and preventing fraud, waste, and abuse in Departmental programs and operations. The Office of Inspector General is created to provide an independent and objective evaluation of Departmental programs and operations.

Conclusory Statements by Patent Examiner are Inadequate to Support Motivation to Combine References

Patent, Patent Cases 2004, ,

In re Bruce Beasley (Fed. Cir. December 7, 2004) (04-1225 Unpublished Opinion).

In 1991, Beasley filed a patent application directed to the generation of images on a video screen using a light pen that operates by mapping the screen into a memory on a point-by-point basis. 

The patent appeals board (BPAI) found that the invention was obvious based on prior art patents cited by the patent examiner during prosecution.  Beasley then appealed to the Court of Appeals for the Federal Circuit (CAFC).

On appeal, Beasley argued that the examiner never established a prima facie case of obviousness.  Specifically, Beasley urged reversal because there was no motivation or suggestion to combine the references cited by the Examiner and BPAI.

The Court agreed with Beasley and reversed the BPAI’s rejection — finding that:

The record reflects that the examiner and the Board have managed to find motivation for substituting one type of memory for another without providing a citation of any relevant, identifiable source of information justifying such substitution. The statements made by the Examiner, upon which the Board relied, amount to no more than conclusory statements of generalized advantages and convenient assumptions about skilled artisans. At least under the MPEP then in effect, such [conclusory] statements and assumptions are inadequate to support a finding of motivation, which is a factual question that cannot be resolved on subjective belief and unknown authority.

Vacated and Remanded.

In Dissent, Judge Dyk would have affirmed the obviousness rejection.

I see no error in the Board’s reliance on the PTO’s own specialized knowledge [for a motivation to combine]. The effect is merely to create a prima facie case, and to shift the burden to the patent applicant. Here the applicant did not refute the factual findings of the Board and the patent examiner, but merely offered lawyer argument to contradict the Board’s findings. Under these circumstances the application was properly rejected.

With this said, I agree that the MPEP provision in effect at the time is not a model of clarity and can be read as recognizing only a very limited scope for the use of the PTO’s expertise. MPEP § 2144.03 (7th ed. 1998). However, the current version appears to allow greater latitude. MPEP § 2144.03 (8th ed., rev. 2, 2004). In future cases, where the PTO has provided us with an interpretation of the new MPEP provisions, we will need to address the extent to which the new version of the MPEP gives the PTO greater scope to rely on its own expert knowledge.

 

Commerce One Auctions Patents: Public Interest Groups Complain

Articles and Publications, Patent

It is right there in the Patent Act.  Patents are a form of personal property and are freely assignable.  35 U.S.C. §261.  They may be bought & sold, licensed exclusively and otherwise. 

Now, some patent groups (EFF) are up in arms because a bankrupt company, Commerce One has auctioned its patent portfolio that reportedly covers computerized methods of paying bills and obtaining supplies.  Their objection: “the buyer is to require a substantial rate of return.” 

Give me a break — what kind of objection is that? The underpinning of the American economy is based on the exchange of property and obtaining a return on investment. 

 

Snippets

Articles and Publications, Patent,

SnippetsTM provides a review of timely developments in intellectual property law. Here is a table of contents of the most recent issue (November 2004):

1. Thomas Fairhall and Paul Churilla, The Intersection of Trade Secrets and Patent Law: The Prior User Rights Statute, 35 U.S.C. 273, Part 2.
2. Eric Moran and Dennis Crouch, Drafting the Technology Game Plan Part 5: Domain Name Protection.
3. Marcus Thymian and Sherri Oslick, On Your Mark! . . . Get Set! . . . Know: Marking Fundamentals.
4. Alison Baldwin, Patent Validity Assessments: Your Guide to Avoiding the On-Sale Bar, Part 2.

You can e-mail the editor (snippets@mbhb.com) to receive your FREE copy of the newsletter.

In the e-mail, you can indicate your technology and legal interest: (Biotech, Electrical, Software, Chemical, Mechanical, Litigation, and/or Prosecution).

European Patent Organization Continues to Spread

Articles and Publications, Patent

Link: The European Patent Organization has announced that Lithuania has now joined the European Patent Convention — pushing the number of member states to 30. European patents are now valid in 36 European states, covering a market of more than 560 million inhabitants.

Link: There are (as of 1 December 2004) 30 member states: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Liechtenstein, Lithuania, Luxemburg, Monaco, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey and the United Kingdom (see European Patent Convention article for the dates of entry in force in each country).  In addition there are six so-called "extension states" which recognise European Patents but are not member of the EPO. These are Albania, Croatia, Latvia, Macedonia, Serbia and Montenegro and Bosnia and Herzegovina.  Further countries are expected to join the EPO in due course (probably Latvia, Malta and Norway soon).

In addition, the U.S., Europe, and Japan have agreed to take real steps to coordinate work sharing, electronic business developments to support work sharing, and harmonization or standardization of search strategies, tools and substantive patent law.

Amazon wins patent suit . . . for now: Pinpoint’s case dismissed without prejudice

Patent, Patent Cases 2004

Pinpoint v. Amazon (N.D. Ill. December 6, 2004) (No. 03 C 4954, Richard A. Posner, sitting by designation).

After an evidentiary hearing on the eve of trial, Judge Posner has determined that Pinpoint was not the owner of the asserted patents at the time the complaint was filed — and thus, that Pinpoint does not have standing to sue.

The case was dismissed without prejudice.  After ensuring that the patents are properly assigned, Pinpoint may re-file the suit.

Read the opinion here: Download Pinpoint.pdf.
Read more about the lawsuit here, here, and here. 

Blog: Word of the Year

Articles and Publications, Patent

In patent law, Merriam-Webster is the cream of the crop.  The Federal Circuit cites Webster’s 3rd International Dictionary more than any other source in claim interpretation.  The CAFC likes dictionaries because they are descriptive of the language – unlike other documents, such as RFC’s, that are seen as prescriptive.

As the English language changes, so does Webster’s.  Recently, Merriam-Webster named the term "blog" as their number one word of the year — finding that "blog" was the most searched word on its Web sites in 2004.

In 1999, "blog" was added to Webster’s Collegiate Dictionary.

Blog: noun; short for weblog; a Web site that contains an online personal journal with reflections, comments, and often hyperlinks provided by the writer.  Blogger; Blogging.

Now, there is a rumor that Bloggers may be TIME’s people of the year.

I hope that you enjoy this patent law blog and find it useful for your practice.  Please feel free e-mail feedback: crouch@mbhb.com.

McDonnell Boehnen Hulbert & Berghoff LLP
Dennis Crouch
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Chicago, IL 60606 
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CAFC: Expert Testimony Essential for Finding of Infringement

Patent, Patent Cases 2004

Centricut v. ESAB (Fed. Cir. 2004) (03-1574).

At the district court, Esab Group won a multi-million dollar judgment against Centricut for infringement of Esab’s patent relating to plasma welding products.  Centricut appealed the judgment and the measurement of damages.  Esab cross-appealed, asking for a modification of the judgment on damages.

On appeal, Centricut argued that ESAB had not satisfied its burden of proof on infringement because it failed to present expert testimony comparing the claims as construed with the accused device.  The Appeals Court agreed that expert testimony was essential in this case:

[E]ach of Esab’s three theories [of infringement] suffers from the same deficiency: none is supported by expert testimony. The first theory, adopted by the district court, rests on the district court’s own interpretation of the evidence. The latter two theories rest on the testimony of witnesses who were admittedly not experts on [the specific technology].

… This case stands as an apt example of what may befall a patent law plaintiff who presents complex subject matter without inputs from experts qualified on the relevant points in issue when the accused infringer has negated infringement with its own expert.

Infringement Reversed

The Court went on to say that experts are not necessary for cases where the technology is “easily understandable.” And, that there is no “per se rule that expert testimony is required to prove infringement when the art is complex.”  However, “where the accused infringer offers expert testimony negating infringement, the patentee cannot satisfy its burden of proof by relying only on testimony from those who are admittedly not expert in the field.” 

Willful Patent Infringement: An Empirical Look

Patent

Professor Kimberly Moore is one of the leading empirical researchers in the area of patent law.  In her latest article, Professor Moore looks into the issue of willful patent infringement.  Some of her findings:

  • Willfulness is alleged all of the time (more correctly in +90% of cases);
  • Willfulness is never decided on summary judgment;
  • About one third of willfulness issues are bifurcated at trial;
  • At trial, willfulness is found about half of the time;
  • The CAFC affirmed over 90% of jury verdicts on willfulness;
  • In bench trials, a noninfringement/invalidity opinion was critical in avoiding a willfulness finding;
  • In jury trials, an opinion did not create a significant impact.

The study analyzed all patent cases infringement cases that terminated during litigation from 1999-2000.

Kimberly A. Moore, Empirical Statistics on Willful Patent Infringement, 14 Fed. Cir. Bar J. 227 (2004).

Means-Plus-Function Claims Lose at the Federal Circuit

Articles and Publications, Patent

35 U.S.C. Section 112 paragraph 6 provides a statutory basis for drafting patent claims in what is known as means-plus-function language.  The language allows a patentee to write a claim based on the function of a device rather than its actual structure.  This language is, in the words of Gene Quinn, "dangerously seductive."  Means claims are easy to write, and there is a belief that the means language adds some "fuzzy math" to the court’s calculation of infringement.

Over the past several years, the Federal Circuit has continually limited the scope of means limitations.  Such a limitation is construed by the court to cover the corresponding structure as described in the specification and equivalents thereof.  Thus, if you use means claim limitations, you should make absolutely sure that the structure is completely (and broadly?) described in the specification.

In an admittedly unscientific survey of case law, attorney Hal Wegner searched through the last fifteen CAFC opinions that dealt with the interpretation of means-plus-function language. Results:

Patentee’s construction of "means" term accepted: 0%
Patentee’s argument that term was not a "means" term accepted: 14
Summary judgment of non-infringement reversed: 7%
Losses for Patentee: 80%.

Thus, the means language was a loser for the patent holder in 80% of cases. (12 of 15 cases). (Hal, thanks for conducting the study).

Bottom Line: MPF claims are risky.  They are fine to add as insurance after you have drafted more descriptive claims, but they should not be trusted. 

If you are still writing MPF claims, you are not alone — thousands of patents using such language are issued annually.

35 U.S.C. 103(a): Disclosure of alternative embodiments does not constitute teaching away.

Patent, Patent Cases 2004,

In a case involving the design of shoe tred, the Federal Circuit provided further insight into the motivation to combine references under 103(a).

In re Fulton (Fed. Cir. 2004) (04-1267).

After receiving an obviousness rejection at the Board of Patent Appeals and Interferences (BPAI), inventors Fulton and Huang appealed to the Federal Circuit.  Their utility patent application is directed to a shoe sole with increased traction.  The BPAI found that the prior art as a whole suggested a combination of the orientation of hexagonal surfaces found in the application. 

Motivation to Combine Need Not Come from Preferred Alternatives: On appeal, the inventors argued that there was no motivation to combine because the characteristics disclosed in the references were not the preferred alternative.  The CAFC rejected this argument — finding that “our case law does not require that a particular combination must be the preferred or the most desirable, combination described in the prior art in order to provide motivation for the current invention.”  The appeals court went on to clarify that the “prior art’s mere disclosure of more than one alternative does not constitute a teaching away from any of these alternatives” unless the disclosure criticizes, discredits, or otherwise discourages the solution.

Rejection for obviousness affirmed.

Federal Circuit Begins Announcing Panel Composition One Week Early

Articles and Publications, Patent

Some patent law experts have noticed an internal rift in the Federal Circuit Court of Appeals in the area of claim construction.  Some of the CAFC judges generally decide claim construct based on an "ordinary meaning" approach while others generally rely on patent documents such as the specification and prosecution history to determine the meaning of claims. UPenn Professor Polk Wagner has even created a Federal Circuit Predictor to predict the outcome of a claim construction apeal based on the appellate panel.

Thus far, Professor Wagner’s predictor has been seen as a cute but ineffective tool because the appellate panel is not given with any advance notice.  The Predictor Tool adds certainty, but the lack of advance notice does not allow for any real settlement negotiations.

Now, in a public experiment, the Federal Circuit has begun to post the composition of panels the Thursday prior to the week of oral argument. 

Thus, for instance, we now now that next Thursday  (December 9) that the Panel of Rader, Friedman, & Plager will hear the Eolas v. Microsoft panel.

The court requests public comment on the experimental change.

Carlos Gutierrez nominated as Secretary of Commerce

Patent, Patent Cases 2004

Kellogg Executive Carlos Gutierrez has been nominated by President Bush to replace Don Evans as Secretary of Commerce.  The Commerce Department manages the Patent & Trademark Office as well as other utilitarian functions of the government such as the census, weather forecasting, and standard setting.

Gutierrez fled Castro’s Cuba in the 1960’s and worked his way up the corporate ladder — eventually taking the helm at Kellogg in 1999.  He is credited with revitalising the company that had been knocked from its perch at the top of the cereals business.

Bush called Gutierrez a "great American success story" and a visionary executive, who understands the world of business from the "first rung on the ladder to the very top."

Kellogg is no stranger to the PTO, more than sixty years ago Kellogg brought a case to the Supreme Court over whether the pillow shape of Nabisco’s shredded wheat was trademarked.  In Kellogg v. National Biscuit, the Court ruled that a "product shape that is the subject of a [utility] patent goes into the ‘public domain’ when the patent expires." 306 U.S. 111 (1938).

Marking Estoppel: CAFC Vacates but Leaves Possibility

Patent, Patent Cases 2004

Slip Track Systems v. Metal Lite (Fed. Cir. December 1, 2004) (unpublished) ("Slip Track III").

In a long-running dispute involving patents directed to earthquake resistant wallboard structures that permit a wallboard to slide vertically with respect to the supporting wall studs, the Federal Circuit vacated the district court’s infringement holding.

The district court barred Defendant Metal Lite from contesting infringement for three reasons. 1) Because of a prior partnership with Slip Track, Metal Lite had marked its product with the asserted patent number — thus creating a marking estoppel. 2) In an earlier decision, ("Slip Track II"), the CAFC had found the asserted patent to cover identical subject matter as another product that Metal Lite admittedly infringed — thus, Metal Lite must also infringe the asserted patent. And 3) Metal Lite’s tardy presentation of non-infringement arguments were contrary to Fed. R. Civ. Pro. R. 26 of "fully airing each parties’ theories of the case well in advance of trial."

On appeal, the CAFC vacated-in-part:

Marking Estoppel: While deliberate mismarking of a product may provide grounds for applying estoppel, there is no evidence in this case that Metal Lite believed its product to fall outside the scope of the patent’s claims when it made the decision to mark its product.  Thus, marking estoppel does not apply in this case. 

NOTE: The Court explicitly refused to endorse the doctrine of marking estoppel — "We find it unnecessary to address this issue because, even assuming the doctrine remains viable, it does not apply to the facts of this case."

Identical Scope of Second Patent: Patent infringement analysis requires the court to compare construed claims to the accused product. In bypassing this step, the district court failed to consider that Metal Lite’s products do not necessarily infringe the patent.

Metal Lite’s Litigation Conduct: In its answer, Metal Lite denied infringement — and thus, was not tardy.

Accordingly, we hold that the district court abused its discretion in granting Slip Track’s motion in limine barring Metal Lite from contesting infringement.

In Dissent: Judge Newman could "not discern reversible error."

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Mobile Phone Manufacturers Win Design Patent Suits

Patent, Patent Cases 2004

Earlier this month, the Federal Circuit ruled that Tony Colida’s patented cell phone design was not infringed by Matsushita’s GU87 phone.  (link).  Now, Colida’s parallel suit against Kyocera Wireless and Sanyo have been struck down. 

Screenshot019

Colida v. Sanyo (Fed. Cir. December 2, 2004) (unpublished)

A design patent is for the visual appearance of a useful article. Durling v. Spectrum Furniture Co., 101 F.3d 100, 104-05 (Fed. Cir. 1996). To infringe a design patent, the accused device must have substantially the same appearance as the patented device, and contain the points of novelty as compared with the prior art, such that the ordinary observer would believe that they are the same product.

We agree with the district court that there is no view of the facts whereby a reasonable trier of fact could find infringement, and that summary judgment of non-infringement was properly entered.

Judgment of non-infringement affirmed.

============================================

Screenshot019 Screenshot018

Kyocera v. President Electronics and Tony Colida (Fed. Cir. November 30, 2004) (unpublished).

Mr. Colida [] argues that the Kyocera 2200 phones are substantially similar to the design in the ‘184 patent. The district court pointed to significant differences in the Kyocera 2200 phones, in that they do not have as pronounced a curvature, have additional buttons taller screens, and different arrays of holes in the earpiece.

[T]he district court’s summary judgment of non-infringement has not been shown to be incorrect. Error has not been shown as to the district court’s analysis. The district court’s identification of the many differences in the features of the designs has not been disputed.

The judgment of non-infringement is affirmed.

============================================

Colida v. Matsushita (Fed. Cir. 2004) (unpublished opinion).

Facts: Tony Colida owns design patents covering the design of mobile phones designated A.  Matsushita owns a patent on the design for mobile phone B.  In addition Matsushita makes a GU87 phone that matches up with its patented design.  After comparing the phone with the figures from Colida’s patents, the district court dismissed Colida’s infringement suit – finding that there was no infringement as a matter of law.

Appeal: Reviewing the summary judgment de novo, the appellate panel affirmed, finding no error in the district court’s conclusion that “no reasonable trier of fact could find infringement of the [patents] by the GU87 phone in this case.”

Summary Judgment of Noninfringement Affirmed.

Federal Circuit: Claims Should Be Interpreted for Internal Consistency and Operablility

Patent, Patent Cases 2004

Frank’s Casing Crew v. Weatherford Intl. (Fed. Cir. 2004).

Frank’s Casing owns a patent on a device for remotely controlling an oil-well casing.  (U.S. Patent No. 5,049,020). Because sections of casing can be up to 36 inches in diameter and weigh 300 pounds per foot, manual alignment is difficult and poses a significant risk of injury.  Frank’s Casing brought suit against Weatherford, charging patent infringement.

The district court (W.D. Oklahoma) granted summary judgment of noninfringement after interpreting the means-plus-function claim language of Frank’s patent. 

On appeal, Frank’s Casing argued that the district court improperly imported structure into the term "means for selectively pivoting" that was unnecessary to perform the function of pivoting a boom about a horizontal axis. 

The Federal Circuit affirmed, finding that the district court’s interpretation is necessary and "to conclude otherwise would render the patent internally inconsistent and the invention inoperable."

Noninfringement Affirmed.

Screenshot017

Judge Posner to hear Amazon Patent Case

Patent, Patent Cases 2004

Pinpoint v. Amazon. (N.D. Ill. Aug 31, 2004) (Posner, J.).

Pinpoint has sued Amazon for infringement of its patented system for scheduling broadcast and providing access to video programs. (E.g., U.S. Patent No. 5,758,257). Pinpoint claims that Amazon’s website infringes by providing personalized book and music video suggestions. 

In its most recent press release, Pinpoint announced that Judge Richard A. Posner of the 7th Circuit, U.S. Court of Appeals will be sitting by designation as the district judge presiding over the jury trial.  According to Judge Posner’s order in the case, the jury trial will begin at 9:00 am on December 6.

Always Controversial

Judge Posner has a reputation for thinking outside the box.  In his last patent case, Posner created a new equitable defense to infringement that would bar enforcement of a patent when the patentee’s own conduct significantly inhibits non-infringing practice of the prior art.  That case, SKB v. Apotex [I, II, III, IV], involving hemihydrates, was affirmed by the Federal Circuit but is currently being considered for an en banc rehearing. 

It is speculated that the Apotex case has sparked some contention within the halls of the CAFC.  This speculation stems from the fact that the en banc petition has been sitting undecided for over six months.

Now a Blogger

After a stint as a guest blogger at Professor Larry Lessig’s blog, Judge Posner has started a blog in cooperation with Nobel Winner Gary Becker.  The Becker-Posner blog is not fully functional yet, but keep your eyes peeled.

Links:
My Prior Post on Pinpoint v. Amazon
More Info on the Pinpoint v. Amazon

Coolsavings wins patent appeal

Patent, Patent Cases 2004

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Catalina Marketing v. Coolsavings (Fed. Cir. 2004) (03-1548) (unpublished).

Catalina owns a patent on a method for distributing electronic coupons. Coolsavings runs a website that uses user demographics to target coupon offers. Catalina sued Coolsavings for Infringement. Catalina appeals the district court’s claim construction and subsequent dismissal for noninfringement.

On appeal, the Federal Circuit affirmed the district court’s opinion, finding that the District Court had properly construed means-plus-function language by importing limitations from the specification.

Dismissal of Catalina’s Infringement suit Affirmed.

Happy Thanksgiving

Patent

Turkey_fry

I hope that everyone has a happy Thanksgiving. Even if you are not in the U.S., I suggest that you take the day off to celebrate.  Although I love turkey, I hope that you don’t deep-fat fry yours.

The U.S. Patent and Trademark Office Joins in the Celebration of Thanksgiving
Recognizes patents and trademarks related to Thanksgiving

The Department of Commerce’s United States Patent and Trademark Office joins in the celebration of Thanksgiving by recognizing some patents and trademarks associated with this festive holiday.

Food often takes center stage at Thanksgiving, and there are many well-known Thanksgiving-related products protected by patents and trademarks. One way to spend more time with family and less in the kitchen cleaning up is by using a disposable cooking pan (patent #5,628,427) or a cooking jacket (patent #4,942,809) for the turkey, ham or roast. One non-traditional, but increasingly popular, way to cook a turkey is deep-frying, and one type of equipment used in this preparation is protected by patent # 5,758,569.

Some well-known trademarks associated with turkey and dressing, must-haves at many Thanksgiving tables, are Butterball (registration #1151836) for turkey products and Stove Top (registration #0949459) for stuffing. What holiday feast would be complete without cranberry sauce such as Ocean Spray (registration #2150919)? Desserts are always the final complement to a Thanksgiving feast. For those that do not bake their own, Sara Lee’s slogan for its pies and cakes, "Nobody Doesn’t Like Sara Lee," is protected by trademark registration #1885156.

These patents and trademarks, as well as the more than six million patents issued since the first in 1790 and the 2.3 million trademarks registered since 1870, can be seen on the Department of Commerce’s U.S. Patent and Trademark Office web site at www.uspto.gov.