Patently-O Bits and Bytes by Juvan Bonni

Bits and Bytes, Patent

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What Counts as a New Argument in Reply

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Apple Inc. v. Andrea Electronics (Fed. Cir. 2020)

After Andrea sued Apple for infringing its U.S. Patent 6,363,345 (noise cancelling audio signal processing), Apple responded with two inter partes review (IPR) petitions.  The PTO initiated both petitions and eventually cancelled all of the claims except 6-9.  Apple then appealed – asking that they all be invalidated.

The invention sets noise-thresholds for a set of frequency groups and subtracts-out amplitude beyond a calculated “future minimum value.”  Claim 6 does this on a periodic basis.

In the original IPR ‘626 petition, Apple argued obviousness of the claims based upon Hirsch over Martin.  In its responsive briefing during the IPR, Andrea argued that Martin does not disclose the “future minimum value” as claimed in claims 6-9.  Then in reply, Apple explained that obviousness becomes clear when seen over multiple periods (sub-windows).  However, the Board refused to consider Apple’s reply – finding that the multiple sub-window argument “raised a new theory of unpatentability for the first time in its reply brief.”

On appeal, the Federal Circuit reversed this holding — concluding instead that the reply brief did not offer a new argument:  “Its reply still asserted that claims 6–9 would have been obvious over Hirsch and Martin [and] relies on the same algorithm from the same prior art reference to support the same legal argument: that Martin
discloses the … “future minimum” limitations of the asserted claims.”  In its decision, the Federal Circuit distinguished prior cases where the reply brief cited to new evidence or new portions of already cited evidence.

  • Ariosa Diagnostics v. Verinata Health, Inc., 805 F.3d 1359, 1367 (Fed. Cir. 2015) — reply improperly referenced an embodiment of the prior art not discussed in the petition.
  • Intelligent Bio-Sys., Inc. v. Illumina Cambridge Ltd., 821 F.3d 1359 (Fed. Cir. 2016) — reply improperly cited new non-patent literature references.

The issue here is age-old. A good reply brief should do more than simply rehash the exact statements found in the original brief. At the same time, the reply should not be introducing new arguments that go beyond the original brief.  Consider the following interesting article: John F. Muller, The Law of Issues, 49 Wake Forest L. Rev. 1325 (2014)

On remand, the PTAB will now consider Apple’s reply brief and whether its argument is sufficient to render the claims obvious.

Your Patent License Likely Includes an Implied License to Other Patents

Patent

by Dennis Crouch

The decision in Cheetah Omni is an important reminder regarding implied licenses.  The holding solidifies the presumption that a license to a particular patent impliedly includes a license to all parents and continuations that “disclose the same inventions as the licensed patent.”  This extends the court’s prior decision in  General Protecht Group Inc. v. Leviton Manufacturing Co., 651 F.3d 1355 (Fed. Cir. 2011) and builds upon the parallel doctrine of legal estoppel discussed in AMP Inc. v. US, 389 F.2d 448 (Ct. Cl. 1968) and TransCore, LP v. Elec. Transaction Consultants Corp., 563 F.3d 1271 (Fed. Cir. 2009).

Cheetah Omni LLC v. AT&T Services, Inc. & Ciena Corp. (Fed. Cir. 2020), began when Cheetah sued AT&T for infringing its U.S. Patent 7,522,836 (optical communication networks).

In a prior lawsuit, Cheetah had asserted the ‘714 patent against Ciena and Fujitsu (See family tree above). That lawsuit settled with a license agreement and covenant not to sue — relevant here because Ciena and Fujitsu supply AT&T with the accused infringing devices.  The question on appeal: whether the license agreement includes an implied license to the ‘836 patent.

The Ciena/Fujitsu lawsuit centered on the ‘714 patent. The resulting license agreement was directed toward the patent-in suit and also expressly called out certain family patents that were also included in the license:

all parents, provisionals, substitutes, renewals, continuations, continuations-in-part, divisionals, foreign counterparts, reissues, oppositions, continued examinations, reexaminations, and extensions of the Patents-in-Suit … whether filed before, on or after the [License] Effective Date.”

Ciena License Agreement (emphasis added).  Although the list of family-members is extensive, it does not include continuations-of-parents or the specific relationship here: a continuation of a continuation of a parent-in-part (or nephew).

The Federal Circuit asks the question as follows:

In personal terms, because the uncle and grandparent of the ’836 patent, are licensed, is the ’836 patent also licensed?

I’ll pause here to note how the Federal Circuit’s question shifts the focus from the way I presented the case above.  Although the license agreement discusses everything in relation to the patent-in-suit (the uncle ‘714 patent), the Federal Circuit concludes that an important relationship is the “grandparent” relationship between the ‘836 patent and the ”925 patent, neither of which were the patent in-suit.  That shift to the ‘925 patent is important for two reasons (1) we have prior precedent implying a license to grandchildren patents but not to ‘uncles.’ General Protecht; and (2) the linkage between the ‘836 and the uncle ‘714 patent is tenuous because of the continuation-in-part status, whereas the grandchild lineage is straight continuation all the way down. The conclusion here is easy once the focus shifts to the grandparent-grandchild setup.

In General Protecht, the Federal Circuit found that a license to particular patent impliedly licensed the grandchild as well (continuation-of-a-continuation) – “because those continuations disclose the same inventions as the licensed patent.” On appeal, the Federal Circuit ruled that the General Protecht reasoning worked here as well:

Applying the presumption established in General Protecht provides a simple and clear resolution in this case. Because the ’925 patent is an expressly licensed patent in the licenses, the licenses also include an implied license to a continuation of its continuation, the ’836 patent. . . . If Cheetah did not intend its license “to extend to claims presented in continuation patents, it had an obligation to make that clear.” General Protecht.

Slip Op. License agreements are contracts typically interpreted under state-law (or foreign law). This particular style implied license appears to fall under federal law in finding that a patentee is legally estopped from claiming no-implied-license. “Legal estoppel prevents licensors from derogating or detracting from definable license rights granted to licensees for valuable consideration.”

Cheetah makes a couple of extra arguments here.

  • The ‘836 patent covers a different/narrower invention — Doesn’t matter since “the same inventive subject matter was disclosed in the expressly licensed patents.”
  • The parties all knew about the ‘836 patent but didn’t include it — Doesn’t matter because presumption goes against patentee. Further the license included a list of excluded patents and the ‘836 was not on the list.

I’ll note the 2018 decision in Cascades AV LLC v. Evertz Microsystems Ltd., 335 F. Supp. 3d 1088, 1097 (N.D. Ill. 2018) where the district court refused to find an implied license for a divisional.  The court noted differences in the claims — however the Federal Circuit here holds (again) that the focus should be on the disclosure.  That case was settled though so we don’t know how the Federal Circuit would react.

Commissioner for Trademarks: David Gooder

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WASHINGTON – The United States Patent and Trademark Office (USPTO) announced today that U.S. Secretary of Commerce Wilbur Ross has appointed David Gooder to be the new Commissioner for Trademarks. As Commissioner, Gooder will be responsible for oversight of all aspects of the USPTO’s Trademarks organization.

 Gooder has worked for more than 25 years on intellectual property (IP) and brand protection challenges facing iconic global brands. Gooder will begin his new role on March 2, 2020. (more…)

IP in State of the Union Address:

Patent

Trump:

I also promised our citizens that I would impose tariffs to confront China’s massive theft of American jobs. Our strategy worked. Days ago, we signed the groundbreaking new agreement with China that will defend our workers, protect our intellectual property, bring billions of dollars into our treasury, and open vast new markets for products made and grown right here in the United States of America. For decades, China has taken advantage of the United States, now we have changed that but, at the same time, we have perhaps the best relationship we have ever had with China, including with President Xi. They respect what we have done because, quite frankly, they could never believe what they were able to get away with year after year, decade after decade, without someone in our country stepping up and saying: Enough. Now, we want to rebuild our country, and that is what we are doing.

Read the US China Agreement (Phase 1) here: Economic_And_Trade_Agreement_Between_The_United_States_And_China.

With regard to the New NAFTA, IPO has suggested that it does not live-up to the hype with regard to pharmaceutical patent enforcement.  From IPO:

President TRUMP signed the U.S.-Mexico-Canada Agreement (USMCA), the North America trade pact that will replace NAFTA. The White House states that the USMCA “contains new protections for American intellectual property, ensuring strong, effective protection for American innovators and creators.” IPO has expressed disappointment with the agreement and said that “[i]n the future, IPO hopes to work with the Administration and Congress to create a fair and level playing field with our trading partners and establish appropriate safeguards for American innovators.”

IPO’s basic problem with new NAFTA is its lack of provisions focusing on protections for data submitted to regulatory authorities (especially for biologics).

 

Constitutionality of Administrative Patent Judges

Patent

The Federal Circuit has issued two recent Arthrex-related orders of note.

In Arthrex, the Federal Circuit held that the appointment process for PTAB judges (Administrative Patent Judges) violates the Appointments Clause of Article II of the U.S. Constitution.  According to the court, these Judges are “principal officers” and thus must be appointed by the President of the United States (rather than merely the head of the Commerce Dep’t).  I explained in a prior post that the court also “issued a cy-près ruling in an attempt to limit the upset” caused by invalidating the appointments of all these judges.  “In particular, the court invalidated a portion of the statute that limited the PTO’s ability to remove APJs from the board. According to the court, that change was enough to reclassify the PTAB Judges as inferior officers that do not need presidential appointment.”  That decision is now up for en banc rehearing — with three separate petitions filed.

Principal Officers: Three En Banc Petitions in Arthrex v. Smith & Nephew

Impact on Ex Parte Examination: In the pending case of In re: Boloro Global Limited, Appeal No. 19-2349 (Fed. Cir. 2020), the Federal Circuit has ordered the USPTO to explain the impact of Arthrex on ex parte patent examination cases:

Within 14 days from the date of filing of this order, the Director [of the USPTO] is directed to submit a supplemental response, not to exceed 20 pages, addressing whether Arthrex should be extended to ex parte examination cases. Boloro’s reply to that supplemental response, which is not to exceed 10 pages, is due within seven days thereafter.

Order of February 5, 2020.

= = = = =

Polaris Innovations Ltd. v. Kingston Tech. Co., Inc., 2018-1831, 2020 WL 504974 (Fed. Cir. Jan. 31, 2020) is parallel to Arthrex and the Federal Circuit vacated the PTAB IPR decision and “remanded to the Board for proceedings consistent with this court’s decision in Arthrex.”  The interesting aspect of the decision the concurring opinion by Judge Hughes and joined by Judge Wallach.  The pair concluded that they were bound by the prior panel decision in Arthrex, but “disagree with the merits” of the holding.  The opinion explains (1) PTAB judges should be seen as inferior officers and (2) if principal officers, the Arthrex panel’s solution is highly questionable.

I believe that viewed in light of the Director’s significant control over the activities of the [PTAB] and Administrative Patent Judges, APJs are inferior officers already properly appointed by the Secretary of Commerce. But if APJs are properly considered principal officers, I have grave doubts about the remedy Arthrex applied to fix their unconstitutional appointment. In the face of an unconstitutional statute, our role is to determine whether severance of the unconstitutional portion would be consistent with Congress’s intent. Given the federal employment protections APJs and their predecessors have enjoyed for more than three decades, I find no legislative intent to divest APJs of their Title 5 removal protections to cure any alleged constitutional defect. … But, given the high standard for finding non-severability, I cannot say that the Arthrex panel’s remedy was improper.

Id.

Guest Post by Prof. Holbrook: Whose Law Controls On Sale Prior Art in Foreign Countries?

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Guest post by Timothy R. Holbrook, Vice Provost for Faculty Affairs and Asa Griggs Candler Professor of Law, Emory University.

The America Invents Act (AIA) effected a sea change in U.S. patent law.  One of the most significant changes was to shift the U.S. from a “first to invent” to a “first inventor to file” system for allocating priority.  This move is reflected in the restructuring of 35 U.S.C. § 102, the provision that defines prior art for assessing whether an invention is novel and non-obvious.

Aside from the shift in assessing priority, some contended that, by amending § 102, Congress had rejected long-standing Supreme Court precedent that allowed secret uses and sales of the invention to trigger the statutory bars under the 1952 Patent Act.  In Helsinn Health Care S.A. v. Teva Pharmaceuticals USA, Inc., the Supreme Court, in its first case addressing the AIA’s § 102, rejected this argument.

The AIA did more than shift the United States to a first-inventor-to-file system, however.  The AIA also eliminated geographic limits on prior art.  Under the 1952 Patent Act, activities triggering the public use and on-sale bars under then-35 U.S.C. § 102(b) had to take place “in this country.” The elimination the geographic limit greatly expands what qualifies as prior art under the AIA.  Moreover, the Supreme Court’s interpretation of the AIA in Helsinn makes that even more sweeping as secret sales activity that may not be accessible to the broader public can now qualify as prior art.

The removal of the territorial limits, however, also presents a different question: whose law will govern whether an invention is deemed “on sale”?  Under the 1952 Patent Act, to be on sale, an invention (1) had to be the subject of a formal commercial offer for sale and (2) had to be ready for patenting.  Whether the invention is subject to a formal commercial offer is assessed from basic contract principles.

In the foreign context, however, what constitutes a formal commercial offer may vary from U.S. law. Because these proposed or completed sales transactions could take place outside of the United States, the law of another country generally would govern any potential or actual agreements.

The elimination of the geographic limits to on-sale activity now presents a choice of law problem.  On one hand, one could argue that the law of the relevant country should control: the parties in the transaction have that law in mind and not necessarily U.S. patent law.  On the other, if the courts were to rely on foreign law to assess whether the invention is “on sale” under § 102(a) of the AIA, then what qualifies as on-sale prior art would vary widely, depending on the law of the country in which the commercial activity took place.  The same activity might qualify as prior art in one context and not in another.  Courts, therefore, would be better of creating U.S. law defining triggers on-sale prior art regardless of where the activity occurred.

So what route will the courts take?  I suspect it will be the latter, using Federal Circuit law to define the contours of on-sale prior art even when the activity arises overseas.

The Federal Circuit addressed an analogous situation in interpreting the statutory bars under § 102(b) of the 1952 Patent Act.  After the Supreme Court reworked the on-sale bar test in Pfaff v. Wells Electronics, Inc., the Federal Circuit in Group One, Ltd. v. Hallmark Cards, Inc., clarified step one of the two-part test by requiring a formal commercial offer for sale.  In so doing, the court confronted a similar choice of law issue: should the law of the state governing the transaction dictate whether the invention was on sale, or should Federal Circuit law?

The court opted for the latter, rejecting the district court’s use of Missouri law to determine whether the invention was on sale.  The court reasoned that reliance on state law would create variability in interpreting a federal statute and emphasized “the importance of having a uniform national rule.” As the court stated:

To hold otherwise would potentially mean that a patent could be invalid in one state, when the patentee’s actions amounted to an offer under the laws of that state, and valid in a second state, when the same actions did not amount to an offer under the laws of that second state. Such a result is clearly incompatible with a uniform national patent system.

If past is prologue, one could easily see the court reaching the same conclusion with respect to the use of foreign law to interpret § 102(a) of the AIA.  Applying the law of various countries where commercial activities arise could lead to widely varying standards for on-sale prior art.  Indeed, the situation would be fare more complex than applying state law not only because of differing legal standards but also differing legal systems.  It is a more complicated analysis for U.S courts to discern foreign law than to discern the law of a given state.  It seems highly likely, therefore, that the Federal Circuit choose to apply its own law, using basic contract principles, in interpreting § 102(a) on-sale prior art that arises in foreign countries.

The situation at the international level, however, is far more complex than refusing to apply state law.  Activities in a foreign country would be assessed, and indirectly regulated, through the application of a U.S. legal standard, implicating concerns of the extraterritorial application of U.S. law.  Unlike the state law situation – where state law is subordinate to federal law – the Federal Circuit will be applying the law of the United States to acts in a co-equal sovereign. Actors in the relevant country may be unaware that their commercial behavior is violating U.S. patent law if there are significant substantive differences. That said, I would be surprised if courts consider this activity to trigger the presumption against extraterritoriality, in the same way they failed to truly account for the presumption in the patent exhaustion context.

The removal of geographic limits on public uses and on-sale prior art is a rather sweeping change.  As yet, the importance of the removal of these territorial limits has not been explored by the courts.  Particularly as it relates to on-sale prior art, courts likely will be applying U.S. law to activities arising in foreign countries in the interest in having a uniform standard.

Tim Holbrook is Vice Provost for Faculty Affairs and Asa Griggs Candler Professor of Law at Emory University.  This essay is drawn from part of his article, What Counts As Extraterritorial in Patent Law?, 25 B.U. J. SCI. & TECH. L. 291 (2019).

Patently-O Bits and Bytes by Juvan Bonni

Bits and Bytes, Patent

Recent Headlines in the IP World:

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Unenforceability, Preclusion, and Interlocutory Appeals

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by Dennis Crouch

I wrote an essay last month discussing the rarity of certified questions on appeal under 28 U.S.C. § 1292(b). See, Dennis Crouch, Certified Questions on Appeal under § 1292(b), Patently-O (January 31, 2020).

In Feit Electric Co. v. CFL Tech. (Fed. Cir. February 3, 2020)[20-110 CAFC denial], the Federal Circuit has denied Feit’s petition for discretionary review of a certified question.

The case involves CFL Tech’s U.S. Patent No. 6,172,464 that was previously held unenforceable (back when owned by Ole Nilssen).  However, the unenforceability decision came before the law of unenforceability changed in Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc).  Therasense made it harder to find patent unenforceable.  Thus, if re-judged under the revised law, the ‘464 patent might actually be enforceable.

Change of Law: Unenforceability of the patent has been fully litigated and decided and issue preclusion would normally apply.  The certified question on appeal is whether the change-of-law exception to issue preclusion applies in this case – citing primarily Dow Chemical Co. v. Nova Chemicals Corp., 803 F.3d 620 (Fed. Cir. 2015) (finding that the Supreme Court’s decision in Nautilus was an “intervening change in law”).

The CFL Tech district court applied the change-of-law doctrine under Dow and thus found no issue preclusion. However, the district court also noted the case of Morgan v. Dep’t of Energy, 424 F.3d 1271 (Fed. Cir. 2005). In Morgan, the Federal Circuit limited the change-of-law doctrine in cases involving “clarifying” interpretations. Uncertain in its opinion, the district court then certified the question for discretionary interlocutory appeal.

Discretion: Here, the appellate court used its discretion to not hear the appeal, but then went ahead to decide that the district court got it right — no preclusion.

Feit and the amici read too much into Morgan. All that Morgan rejected was a version of the change-in-law exception “so broad” that it would deny preclusion based on judicial decisions that merely “clarify earlier interpretations of a statute.” It did not reject the higher standard for a result-altering intervening change in law required by Dow Chemical, which was applied in this case based on the significant change of law made by this court in Therasense.

Thus, although the Federal Circuit refused to hear the appeal, it went ahead and decided the issue.

Advisory Dicta: I would call the appellate decision advisory dicta — and thus would not become “law of the case” since the court did not actually hear the appeal.  However, from a practical standpoint the district court will (and should) follow the guidance laid down here.  The Federal Circuit took the same approach in Heat Techs., Inc. v. Papierfabrik August Koehler Se, 2019 WL 3430477 (Fed. Cir. July 18, 2019) (denying petition for interlocutory appeal, but explaining its interpretation of the law in the denial order).

(more…)

Cost of Accessing PACER

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National Veterans Legal Services Program (NVLSP) v. US (Fed. Cir. 2020)

Today, the Federal Circuit heard oral argument in this case involving the $0.10 per page fee for downloading documents from PACER. The basic argument here is that “PACER fees must be limited to PACER costs.”

This case challenges the legality of user fees charged by the federal judiciary for access to records via its Public Access to Court Electronic Records system, or PACER. It is undisputed that these fees far exceed the costs of providing such records—costs that have decreased exponentially even as fees have risen. The district court held that PACER fees have been unlawfully set above the amount authorized by Congress and found the government liable for the excess. This appeal concerns whether the unlawful excess identified by the district court was too little (the plaintiffs’ view), too much (the government’s view), or just right.

Opening brief. [PACER Case Opening Brief]. In 2002, modified the law with regard to the cost of providing electronic docketing information by indicating that the Judicial Conference my “prescribe reasonable fees” to access information, but may do so “only to the extent necessary.”

The appeal here is interlocutory based upon the certified question of whether the statute authorizes the US Courts “to charge more in PACER fees than is necessary to recoup the total marginal cost of providing access to records through PACER?”  In its briefing, the U.S. Government also argues that the case as a whole lacks jurisdiction under the Little Tucker Act.  A large number of amicus briefs were also filed supporting the petition and arguing that this is a very important issue involving transparency and access to the court system.

  • Retired Judges (including Judge Posner): Fees reduce judicial transparency and legitimaxy
  • ACLU: Access protected by 1st Amendment
  • Casetext, etc.: Fees curtail legal research
  • Sen. Lieberman: (Sponsor of 2002 law discussed above) Fees may not be above costs of providing access.

 

Certified Questions on Appeal under 1292(b)

Patent,

by Dennis Crouch

In civil procedure, I just finished teaching appeals of interlocutory orders under 28 U.S.C. § 1292(b).

The normal rule in patent cases (and in federal litigation generally) is that the parties have to wait until the case is complete — final judgment — before having a right to appeal. Under this “final judgment rule,” interlocutory orders — orders that do not end the case — are generally not immediately appealable. Rather, parties have to wait for final judgment. There are, however, a number of exceptions to the final judgment rule.

Appealing Injunction Orders: Because injunctions are often requested in patent cases, § 1292(a) is regularly invoked. That section creates a right to appeal district court decisions “granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions.”  Thus, even if an injunction order is interlocutory (such as denying preliminary injunctive relief), that order can be automatically appealed.

Certified Questions: Section 1292(b) provides the Courts of Appeals with discretionary authority to review of interlocutory issues of law that are “certified” for appeal by a district court:

When a district judge … shall be of the opinion that [an otherwise non-appealable] order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order. The Court of Appeals … may thereupon, in its discretion, permit an appeal to be taken from such order.

28 U.S.C. § 1292(b).

This week in MLC Intellectual Property v. Micron Tech (Fed. Cir. 2019), the Federal Circuit decided a 1292(b) issue — allowing MLC (the patentee) to appeal a set of interlocutory orders excluding MLC’s expert testimony.  The Federal Circuit opinion is short on detail and analysis — explaining (1) that the Federal Circuit has discretion to exercise interlocutory review in this situation; and (2) review here appears appropriate to “avoid an expensive trial solely on liability” since the patentee was left with a very weak damages case and no injunction case (since the patents are expired). [1292(b) Decision].  The case is now placed on the regular docket with full briefing of the issues.

In its certification order, the district court explained the situation as follows:

In the Damages Orders, the Court excluded [MLC’s expert] Mr. Milani’s damages opinion under Daubert because the Court concluded that his comparative license analysis did not comport with Federal Circuit jurisprudence. These deficiencies included, inter alia, Mr. Milani’s failure to apportion the revenue base to include only the revenue attributable to the patented technology and Mr. Milani’s calculation of a royalty rate that was not supported by the evidence. In addition, the Court held that MLC had failed to disclose the factual underpinnings of its reasonable royalty claim in discovery, and excluded much of Mr. Milani’s opinion on that ground. MLC asserts that it was not required to disclose those facts because the determination of a reasonable royalty is the province of expert opinion. All of these questions are controlling questions of law as to which there is substantial ground for difference of opinion. … Absent interlocutory review, the parties and the Court will be required to proceed with an expensive trial focused solely on liability, as MLC concedes that it has no damages case to present at trial.

Interlocutory review of the Damages Orders will result in either the ultimate conclusion of this case (if the Federal Circuit affirms) or a single trial on liability and damages (in the event of reversal); either way, interlocutory review is in the interest of judicial economy and will save the parties a considerable amount of time and expense.

Dct Opinion.

The parties have jointly requested and have now been granted a stay in the district court litigation pending the outcome of the appeal (as well as the outcome of an appeal in a parallel reexamination).  1292(b) indicates that the appeal does not automatically stay proceedings, but suggests that a stay is available if ordered by “the district judge or Court of Appeals.” Id.

MLC’s claimed invention is a method of calibrating a camera-laser-unit using the Tsai algorithm.

Other Recent 1292(b) Cases: The Federal Circuit decided one other 1292(b) cases over the past year. In Heat Techs., Inc. v. Papierfabrik August Koehler Se, 2019 WL 3430477 (Fed. Cir. July 18, 2019), the court denied the petition to hear an interlocutory appeal on the question of whether a “§ 256 claim for correction of inventorship can proceed not-withstanding other potential challenges to the patent’s validity.”  In Heat Techs, the appellate panel found several faults with the district court certification order — most notably was the reality that there was not “substantial ground for difference of opinion.” Rather, the answer was a simple “yes” – inventorship and ownership are separate from validity and there are important implications that can flow from owning a patent – even if invalid.

The Court of Appeals also decided a 28 U.S.C. § 1292(d)(2) case. Laturner v. U.S., 933 F.3d 1354 (Fed. Cir. 2019). 1292(d)(2) is substantially parallel to 1292(b) — difference being that (d)(2) allows for interlocutory appeals from the Court of Federal Claims whereas (b) is focused on district court orders.

Federal Circuit affirms Obviousness based upon General Knowledge of PHOSITA

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by Dennis Crouch

Philips v. Google & Microsoft (Fed. Cir. 2020)

Google & Microsoft teamed-up to challenge Phillips’ U.S. Patent 7,529,806 in an inter partes review (IPR).  The Board complied and cancelled claims 1-11 — finding the claimed quasi-streaming method unpatentably obvious.  On appeal here, the Federal Circuit has affirmed — adding important context to obviousness determinations based upon general knowledge.

In KSR, the Supreme Court indicated that the obviousness analysis should consider the “background knowledge possessed by a person having ordinary skill in the art.” KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398 (2007).   Under KSR, information deemed within PHOSITA’s general knowledge is more powerful than that found buried in a prior art reference because we assume that PHOSITA would consider using their general knowledge in combination with the prior art — even absent any express motivation to do so. Because of its potential power, the Federal Circuit has been somewhat concerned that the approach could serve as an end-run around traditional obviousness analysis.  Here though, the court found that Google had presented enough evidence to assume that the pipelining (see next paragraph) was part of the general knowledge of PHOSITA.

The invention: The claims call for downloading the “next file” in the background while playing the prior file. This setup is effectively a form of buffering (also known as pipelining or stream emulation).  The approach uses a client-side “control information file” that facilitates sequential file retrieval.  The claims have an additional feature of having a variety of media file formats, and the client device is able to “choose the format compatible with the client’s play-out capabilities.”

In its petition, Google alleged (1) anticipation based upon SMIL 1.0 (Synchronized Multimedia Integration Language 1.0 Specification); and (2) obviousness based upon SMIL 1.0 when combined with the general knowledge of PHOSITA.  In describing the general knowledge that “pipelining is well known”, Google cited a prior art reference (Hua) and also an expert declaration.

Extra Ground on Institution: Before getting to the obviousness issue, I’ll note an appeal/SAS issue decided by the Court.  The Board instituted the IPR on both grounds raised by Google, but also added a third ground: SMIL in view of Hua.  On appeal, the Federal Circuit found the third-ground improper — quoting the Supreme Court’s decision in SAS to the effect that the AIA does not “contemplate a petition that asks the Director to initiate whatever kind of inter partes review he might choose.” SAS Inst. Inc. v. Iancu, 138 S. Ct. 1348, 1355 (2018).  Under the statute as interpreted in SAS, the petitioner decides how to structure the IPR, and the initiation stage is a yes/no determination.  The Federal Circuit did not address the no-appealability-of-institution-decisions provision of Section 314(d).

Role of General Knowledge in IPR Obviousness: The first Obviousness-focused question that the court considered was an interesting albeit fruitless contention — that “obviousness” in IPR proceedings should be treated differently than in other areas of patent practice. In particular, the patentee noted that Section 311(b) of the AIA limits IPR considerations to only “prior art consisting of patents or printed publications.” As such, Philips argued that “general knowledge” could not be considered in the analysis.  On appeal, the Federal Circuit rejected that argument — holding that the 311(b) limits the types of prior art available in an IPR, but does not otherwise alter the obviousness analysis of Section 103.

Although the prior art that can be considered in inter partes reviews is limited to patents and printed publications, it does not follow that we ignore the skilled artisan’s knowledge when determining whether it would have been obvious to modify the prior art. Indeed, under 35 U.S.C. § 103, the obviousness inquiry turns not only on the prior art, but whether “the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious . . . to a person having ordinary skill in the art to which the claimed invention pertains.” 35 U.S.C. § 103. Regardless of the tribunal, the inquiry into whether any “differences” between the invention and the prior art would have rendered the invention obvious to a skilled artisan necessarily depends on such artisan’s knowledge.

Slip Op.  The implication here is that “general knowledge” is not “prior art” but instead part of the definition of PHOSITA under Graham.

General Knowledge: A primary case in tension with broad use of general knowledge is Arendi S.A.R.L. v. Apple Inc., 832 F.3d 1355, 1361 (Fed. Cir. 2016).  In that case, the court warned against invoking “common sense . . . to supply a limitation that was admittedly missing from the prior art” and that was not “supported by evidence and reasoned explanation.”  On appeal here, the Federal Circuit distinguished Arendi — holding that Google’s argument for general knowledge was supported by evidence and reason: 

In Arendi, the Board [improperly] relied on nothing more than “conclusory statements and unspecific expert testimony” in finding that it would have been “common sense . . . to supply a limitation that was admittedly missing from the prior art.” Conversely, here the Board relied on expert evidence, which was corroborated by Hua, in concluding that pipelining was not only in the prior art, but also within the general knowledge of a skilled artisan. Moreover, Philips offered no evidence to rebut the conclusion that a skilled artisan would have known about pipelining.

Id. “Pipelining” was the only claim feature not found in the asserted prior art reference.  However, since pipelining was part of the “general knowledge,” then its use was proper to invalidate the claims.

Billion Dollar Jury Verdict for CalTech

Patent

I posted WiLan’s $85 million verdict against Apple earlier this week out of the Southern District of California.  A new verdict on Jan 29, 2020 looks to set-back Apply by another $837 million (in favor of the patent owner California Institute of Technology). Apple’s setback dwarf’s the parallel Broadcom verdict in the case of $270 million.  The verdict form is not yet publicly available — the courtroom was sealed for much of the damages trial on the request of Broadcom and Apple.  Craig Clough at Law360 reports that the verdict included $1.40 per device for Apple’s 600 million infringing devices and $0.26 per chip for Broadcom’s billion+ Wi-Fi chips.

U.S. Patent Nos. 7,116,710, 7,421,032 and 7,916,781.

Federal Circuit Disqualifies Litigation Counsel Who Prosecutes Patents for Subsidiary Company

Patent

by Dennis Crouch

Trimble Inc. v. PerDiemCo LLC (Fed. Cir. 2020) [TrimbleDisqualify]

In an unusual decision, the Federal Circuit has disqualified PerDiem’s appellate counsel – the firm of Davidson Berquist Jackson & Gowdey, LLP – based upon a current client conflict.

The particular problem here stems from Davidson’s simultaneous performance of patent prosecution work for Trimble Transportation Enterprise Solutions, Inc.. Trimble Transport is a wholly owned subsidiary of appellant Trimble Inc (TRMB).

Although Davidson has now withdrawn its representation of Trimble, the court judges current-client conflicts as of the filing of the motion to disqualify. At that time Davidson was representing both Trimble Transportation and PerDiem. Also, because the district court case was litigated in California, California professional responsibility rules control conflict situations.

California’s rules provide:

A lawyer shall not, without informed written consent from each client and compliance with paragraph (d), represent a client if the representation is directly adverse to another client in the same or a separate matter.

Cal. R. of Prof’l Conduct 1.7(a) (2018). The comment to the rule further explains:

Loyalty and independent judgment are essential elements in the lawyer’s relationship to a client. The duty of undivided loyalty to a current client prohibits undertaking representation directly adverse to that client without that client’s informed written consent.

Cal Rules Comment 1.

Here, Trimble has intentionally created a complex corporate structure with Trimble Inc. owning Trimble Transport and other subsidiaries, including Innovative
Software Engineering, LLC (who is also a party to the lawsuit).  Trimble (TRMB) has a valuation of $10 billion, 8,000+ employees, and more than a dozen major subsidiary companies.  The formal corporate structure was specifically and particularly designed to take advantage of various laws — creating protections against a variety of potential liabilities and allowing differentiation between the various companies.  Now, however, when it is advantageous to the company, it argues that the corporate walls are illusory.

The basic rule with parent-subsidiary companies is that a law firm will be seen as representing both if the “corporate affiliates are sufficiently intertwined that the representation adverse to one would threaten harm to the other, diminishing the formal corporate client’s (here, Trimble Transportation’s) confidence and trust in counsel.” Slip Op. Here, the Federal Circuit found sufficient intertwining with shared VOIP system, employee recognition program, computer network, human resources information system, payroll, and office space.  In addition – and with rather low level reasoning – the court found that if Trimble lost the patent case it “would have a direct adverse impact on Trimble Transportation” since “financial statements from each of Trimble [Inc.]’s businesses, including Trimble Transportation, are also combined . . . to report to investors in Trimble [Inc.]’s overall corporate financial statements.” (Wouldn’t this would be true for all wholly owned subsidiaries).

For me, the biggest factor in this case is Aaron Brodsky — in-house patent counsel at Trimble Inc.  Although Brodsky works for the parent, he advises on patent prosecution work for a number of the subsidiaries that do not have their own patent counsel — including Trimble Transport. In particular, Broadsky advised the Davidson firm on its prosecution work and, at the same time, manages the present litigation. That intermingling of relevant legal matters starts to make the concurrent representation look bad.

Despite my misgivings noted above, this appears to be the right outcome. Representing a client is a pledge of loyalty that is not easily set aside.

$85.23 million for WiLAN against Apple.

Patent

Big verdict for WiLAN against Apple $85.23 million in damages – the full amount that the company requested. McKool Smith represented the patentee here. Apple will likely appeal on several grounds.

The jury awarded a royalty of $.45 per iPhone 6 & 7. This is less than 0.1% royalty rate ($650 per iPhone 7) but things add up when you sell 200 million units.

This is the second time around on damages.  The first jury awarded $145,100,000.  However Judge Sabraw gave WiLAN the option of either (1) remitting the damages down to $10 million or (2) holding a new trial on damages.  According to the court the problem stemmed from expert opinions regarding apportionment that were not supported by the evidence.  Even though it was a single-issue jury trial, the judge still provided the jury with 31 pages of jury instructions: Jury Instructions.  Here are a few of the key instructions:

In this case, Wi-LAN seeks a reasonable royalty. A reasonable royalty is defined as the money amount Wi-LAN and Apple would have agreed upon as a fee for use of the invention at the time prior to when infringement began. You must be careful to ensure that award is no more or no less than the value of the patented invention.

The amount you find as damages must be based on the value attributable to the patented technology, as distinct from other, unpatented features of the accused product, or other factors such as marketing or advertising, or Apple’s size or market position. In determining the appropriate royalty base and the appropriate royalty rate, the ultimate combination of both the royalty rate and the royalty base must reflect the value attributable to the patented technology. In other words, the royalty base must be closely tied to the invention. It is not sufficient to use a royalty base that is too high and then adjust the damages downward by applying a lower royalty rate.

Similarly, it is not appropriate to select a royalty base that is too low and then adjust upward by applying a higher royalty rate. Rather, you must determine an appropriate royalty rate and an appropriate royalty base that reflect the value attributable to the patented invention alone. . . .

You may also consider the impact of any available noninfringing alternatives to the asserted claims on the royalty negotiated in the hypothetical negotiation. In doing so, you may consider the value of any differences in benefits and costs between the noninfringing alternatives and the asserted claims.

The two patents at issue in the case are WiLAN’s 8,457,145 and 8,537,757. The patents cover a mechanism for grouping data within queues ranked by required quality-of-service needed with timers associated with each queue. Claim 9 of the ‘145 was infringed (among other claims)

9. A subscriber unit for a wireless communication system, wherein the wireless communication system includes a plurality of subscriber units in communication with an associated base unit, comprising:

a plurality of queues, each queue for grouping data based on the QoS; and

a media access (MAC) module configured to set an initial value for a timer associated with a queue, and periodically, on expiration of the value of the timer, transmit a bandwidth request indicating an amount of bandwidth required for transmitting the data from the queue.

 

Cert Denied

Patent
  • 19-522 TRADING TECHNOLOGIES INT’L V. IBG LLC, ET AL.
  • 19-353 TRADING TECHNOLOGIES INT’L V. IBG LLC, ET AL.
  • 19-521 CHARGEPOINT, INC. V. SEMACONNECT, INC.

The Supreme Court has denied certiorari in these three eligibility cases largely clearing the docket of pending petitions in patent cases.  There are a few remaining:

Awaiting decision:

  • Thryv v. Click-to-Call (appealability of time-bar denial; 314(d) and 315(b));

Pending Cert

  • Thryv follow on: Arris v. Chanbond; Superior v. Voltstar
  • Eligibility: Maxel v. Fandango; Cisco v. SRI; Reese v. Sprint
  • Apportionment and Preclusion: Apple v. VirnetX
  • IPR Arguments Beyond the Petitions: Chrimar v. Juniper
  • IPR Unconstitutional Taking / Due Process Violation: Collabo v. Sony

 

 

 

Supporting Amendment to 35 U.S.C. Section 102(a) Clarifying Public Disclosure

Patent,

Intellectual Property Owners Association (IPO) Board has proposed a “clarifying” amendment to Section 101(a)(1) of the Patent Act:

(a) Novelty; Prior Art.—A person shall be entitled to a patent unless— (1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public publicly disclosed before the effective filing date of the claimed invention, provided that no act of patenting, publication, use, sale, commercialization, or any other act, shall constitute prior art with respect to this section, except to the extent the act results in a public disclosure of the claimed invention; or

The proposal here would legislatively overrule Helsinn Healthcare S.A. v. Teva Pharm. USA, Inc., 139 S. Ct. 628 (2019) and remove undisclosed sales activity & commercialization from the scope of prior art. Europe uses this approach found in Article 54 of the European Patent Convention:

  1. An invention shall be considered to be new if it does not form part of the state of the art.
  2. The state of the art shall be held to comprise everything made available to the public by means of a written or oral description, by use, or in any other way, before the date of filing of the European patent application.
  3. Additionally, the content of European patent applications as filed, the dates of filing of which are prior to the date referred to in paragraph 2 and which were published on or after that date, shall be considered as comprised in the state of the art.

EPC Art. 54. Note that 54(1) and 54(2) are parallel to 35 U.S.C. 102(a) while 54(3) is parallel to 102(a)(2) which the IPO does not propose to change.  Regarding these secret prior patent application filings identified in 54(3) and 102(a)(2); the European approach is broader than the US in some ways because it creates prior art even when the prior filing is the same inventor / owner; at the same time, the European approach is narrower than the US because 54(3) prior art does not apply to the inventive step (obviousness) analysis.

An invention shall be considered as involving an inventive step if, having regard to the state of the art, it is not obvious to a person skilled in the art. If the state of the art also includes documents within the meaning of Article 54, paragraph 3, these documents shall not be considered in deciding whether there has been an inventive step.

EPC Art. 54(3).

 

Does an appeal deserve an opinion?

Patent

Fote v. Iancu (Supreme Court 2020)

In this case, the PTO refused to grant Charles Fote’s patent covering a Broker-Mediated Payment System after concluding that the claims lacked eligibility.  On appeal, Fote argued otherwise — especially considering the PTO’s new (limited) approach to eligibility examination.  The Federal Circuit though refused to bite and simply affirmed the PTO determination without issuing any opinion under its internal R. 36.

In a recent request for extension of time, Fote has indicated his plans to ask the Supreme Court to review the propriety of the Federal Circuit’s no-opinion judgments:

The petition for certiorari will contend that in cases like this one, where the administrative agency arguably erred in its analysis of the proposed patent claims and failed to properly apply the law, the use of one-word summary affirmances under Federal Circuit Rule 36, which effectively prevents review of the merits of the panel decision en banc or by this Court, is impermissible.

[Fote petition to Supreme Court for extension of time]  Although the patent application appears to be unpublished, the file-history was included in the Federal Circuit briefing. [JointAppx].

Representative claim 8 is directed to a “telecommunication system” that includes a brokerage server, a funding server, and also an electronic communications devices that are designed to provide certain authentication signalling to facilitate a payment. The claim itself is 1,200+ words 5x longer than a typical independent claim. In briefing, Fote explained that:

By dividing responsibilities for the payment and the information among multiple third parties, the payment system invented by Fote avoids the privacy and security vulnerabilities that would otherwise arise if a conventional third-party intermediary were employed in an electronic environment. . . .

[Although the] system involves conventional computer components[;]… [t]he system’s novelty and inventiveness, which have been acknowledged by the Patent Office, lie in the specific payment techniques it implements.

In its briefing, the PTO responded that the claims can be seen as parallel to the settlement risk mitigation system in Alice Corp. and that the Board’s decision was correct:

The Board properly concluded that the claimed invention is directed to patent ineligible subject matter. Claim 8 recites a system for transferring electronic payment from a payer to a payee that utilizes a third-party intermediary to prevent disclosure of the payer’s confidential information (i.e., the identity of the payer’s funding source and real account) to the payee.

Under step one of the Supreme Court’s two-step framework, the Board rightly determined that the claim is directed to a fundamental economic practice, which is an abstract idea. As the Board found, the use of a third-party intermediary to securely transfer funds between two parties is akin to the use of a third party to mitigate settlement risk, which was held to be abstract in Alice. . . .

At step two of the eligibility analysis, the Court rightly determined that the additional claim limitations do not transform the abstract idea into an inventive concept. Each of those limitations merely recite conventional computer components that perform generic computer functions. Although the Board did not cite to this Court’s decision in Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018), the Board did provide factual support in the specification to support its findings that the claim elements were well-known, routine, and conventional.

Gov’t Brief before the Federal Circuit.  The actual merits are rough here for the petitioner, but these are the cases that often make good procedural law.

 

When does a Logo Undermine a Design Patent Case?

Patent,

by Dennis Crouch

I have written a few posts about the design patent infringement case  Columbia Sportswear North America, Inc. v. Seirus Innovative Accessories, Inc.  In November, the Federal Circuit vacated the lower court’s summary judgment of infringement — holding that logo placement in this case might allow the defendant to avoid an infringement judgment.  This holding is in tension with the court’s 1993 decision in L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117 (1993).

In the last post, I included an image of my Seirus glove liner.  My first update is that the glove liner has completely fallen apart — apparently it is a liner and not intended simply as a biking glove.

Second update is that Columbia (the patentee) has petitioned the court for en banc rehearing to address issues of design patent infringement.  Questions presented:

  1. When conducting a design-patent infringement analysis under Gorham v. White, may a fact-finder consider the addition of brand names or other labeling on an otherwise infringing design?
  2. When conducting a design-patent infringement analysis under Gorham v. White, should the fact-finder compare the overall appearance of the claimed design (i) to the overall appearance of the accused design, or (ii) to the overall appearance of the entire accused product, which may include aspects extraneous to the claimed design (e.g., logos, tradenames, color, size, etc.)?

[Columbia-petition].  The new petition added design patent expert Christopher Carani representing Columbia. The Court has requested a responsive brief from Seirus due January 30, 2020.  Several amici are also planning to submit briefs, although there is some fight over whether the court will allow them an extension of time.  Amici include a “Group of Interested Practitioners” including Tracy-Gene Durkin, Robert Katz, and Perry Saidman. The Industrial Designers Society of America, Inc. (represented by Damon Neagle) and Bison Designs / Golight (represented by Ian Walsworth) are also expected to support the petition. In opposing the extension, Seirus explained that “there is no reason a group comprised of at least seven design patent attorneys from at least six law firms cannot draft a 2,600 word brief in the time allotted.”  In my contrary experience, a group of seven patent attorneys rarely accomplish anything within the time allotted.

Logo Placement Relevant for Infringement in Design Patent Cases

 

This week in Property: Efficient Infringement

Patent

by Dennis Crouch

This semester at Mizzou, I am teaching two first year (1L) law school classes — Property and Civil Procedure. These classes are intended as fundamental foundation courses applicable in some way to all areas of law — even patent law.  I’m planning a series of posts titled “this week in property” and “this week in civil procedure” that will tie-in what we’re learning in class and relate it to patent law.

The first case that my students read in Property is Jacque v. Steenberg Homes,  209 Wis. 2d 605 (1997).  The defendant in the case – Steenberg Homes – was delivering a mobile home to a third-party pursuant to a contract.  The problem was that the road was under 7 feet of snow.  Steenburg asked Harvey Jacque for permission to cross his field, which Jacque denied.  Steenburg then went ahead and buldozed a path across the frozen field and satisfied its contract.   The manager had instructed the movers as follows: “I don’t give [a F___] what he said, just get that home in there any way you can.” At trial, Jacque was thus easily able to prove willful trespass.  The problem came with damages.

At trial, Jacque proved about $200 in damages to the land (extra plowing time in the spring), but those damages were suffered by his tenant (Jacque’s son) and thus not awarded to Jacque.  Steenburg Homes argued that this is a case of efficient infringement. Although it was trespass, the company should only have to pay for the harm it caused.  Recognize here that the company’s only other choices at the time were to (1) breach its delivery contract; or (2) deliver in a more unsafe (and costly) manner over the alternative route.  Apart from the $200 in damage, everyone was better off (or at least not worse off) after the infringement.

Although it awarded only $1 in nominal damages, the jury also awarded $100,000 in punitive damages (no actual damages).  On appeal, the Wisconsin Supreme Court upheld the verdict – overturning a prior rule that punitive damages are only available if actual damages are awarded.

The court explained its reasoning:

[The old rule] sends the wrong message to Steenberg Homes and any others who contemplate trespassing on the land of another. It implicitly tells them that they are free to go where they please, regardless of the landowner’s wishes. As long as they cause no compensable harm, the only deterrent intentional trespassers face is the nominal damage award of $1, the modern equivalent of Merest’s halfpenny, and the possibility of a Class B forfeiture under Wis. Stat. § 943.13. We conclude that both the private landowner and society have much more than a nominal interest in excluding others from private land. Intentional trespass to land causes actual harm to the individual, regardless of whether that harm can be measured in mere dollars.

Id. The court’s reference to Merest’s halfpenny comes from an 1814 English decision Merest v. Harvey, where a jury awarded 500£ in exemplary damages (~$50,000 today) against a banker (and Member of Parliament) who joined a hunting party on the plaintiff’s land after being told no.

GIBBS CJ: I wish to know in a case where a man disregards every principle which actuates the conduct of gentlemen what is to restrain him except large damages. … Suppose a gentleman has a paved walk in his paddock before his window, and that a man intrudes and walks up and down before the window of his house, and looks in while the owner is at dinner, is the trespasser to be permitted to say “here is a halfpenny for you which is the full extent of all the mischief I have done?” Would that be a compensation? I cannot say that it would be.

Heath J: I remember a case where a jury gave 500 damages for merely knocking a man’s hat off and the Court refused a new trial. . . . It goes to prevent the practice of duelling if juries are permitted to punish insult by exemplary damages.

Merest v. Harvey, 128 Eng.Rep. 761 (C.P. 1814).  The approach in Steenburg and Merest follows the “property rule” for protecting entitlements.  The alternative approach – a liability rule – is seen in negligence and contract law. The patent system used to fit fairly squarely within the property rule schema as Blair & Cotter explained in a pre-ebay paper:

U.S. law protects patent entitlements by means of a property rule, which entitles the owner to enjoin infringing behavior, rather than by means of a liability rule, which would allow one to infringe and pay damages indefinitely.

Roger D. Blair & Thomas F. Cotter, Rethinking Patent Damages, 10 Tex. Intell. Prop. L.J. 1, 48 (2001).  20 years later, patent law has transformed into a liability rule that largely allows for an “efficient infringement” setup.  Prof. Mossof explained this in his recent article:

The result of the weakening of the ability to obtain an injunction–the backstop for all market-based negotiations of conveyances of property rights– and the further limiting of damages awarded to patent owners below market-set rates has led to an increasingly common commercial practice referred to as “efficient infringement.” This occurs when a company decides that it “economically gains from deliberately infringing [on a] patent[]” because it knows the patent owner will not receive an injunction and thus it will pay less in legal fees and in court-ordered damages than it would have paid in a license obtained from the patent owner.

Adam Mossoff, Institutional Design in Patent Law: Private Property Rights or Regulatory Entitlements, 92 S. Cal. L. Rev. 921, 939 (2019) (quoting his own prior essay). But, efficiency is good — others have written that a liability rule is the best approach even if it reduces innovation incentives — because it raises incentives to commercialize and can avoid transaction costs in the marketplace. See Ian Ayres & Paul Klemperer, Limiting Patentees’ Market Power Without Reducing Innovation Incentives: The Perverse Benefits of Uncertainty and Non-Injunctive Remedies, 97 Mich. L. Rev. 985, 987 n.2 (1999); Julie Turner, Note, The Nonmanufacturing Patent Owner: Toward a Theory of Efficient Infringement, 86 Cal. L. Rev. 179 (1998).

In this debate, the courts have largely made their statements: Real property is protected with a property rule; Patent rights are protected with a liability rule.  Any change this generation will come from the legislature.