Supreme Court Shows More Interest In Pharmaceutical-Patent Antitrust Case

Patent, Patent Cases 2005,

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

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

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

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

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

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

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

Links:

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

    • ITC Claim Construction Vacated — Court Unnecessariliy Limited Claim Scope

    Patent, Patent Cases 2005

    Sorensen v. ITC (Fed. Cir. 2005)

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

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

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

    Summary judgment vacated.

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

    Patent, Patent Cases 2005,

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

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

    The question on review is as follows:

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

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

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

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

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

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

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

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

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

    Patent, Patent Cases 2005

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

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

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

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

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

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

    Case dismissed with prejudice for lack of subject matter jurisdiction.

    Reissue Patent Invalid Because Reissue Was Filed To Correct Procedural Error

    Patent, Patent Cases 2005

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

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

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

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

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

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

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

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

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

    Licensee Lacks Standing; Dismissed With Prejudice

    Patent, Patent Cases 2005

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

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

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

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

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

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

     

    CAFC Jurisdiction Set At Filing of Complaint

    Patent, Patent Cases 2005

    MedImmune v. Genentech (Fed. Cir. 2005)

    MedImmune, a licensee in good standing, filed a declaratory judgment action to challenge the patents validity and enforceability. The district court dismissed the action, without prejudice, finding no “case of actual controversy.” On appeal, the CAFC affirmed holding that a licensee in good standing is not under threat of being sued for patent infringement and thus cannot bring a DJ action. (Citing MedImmune v. Centocor).

    MedImmune also had pending antitrust claims and asked that once the Federal Circuit had disposed of all the patent claims, the case be transferred to the Ninth Circuit Court of Appeals.  The CAFC panel disagreed, finding that “the jurisdiction of the Federal Circuit is established by the well-pleaded complaint in the district court, whereupon the Federal Circuit must exercise jurisdiction of all of the issues in the case.”  According to the panel, jurisdiction is determined “at the outset of litigation” and does not change — except when sham charges of patent infringement are brought to manipulate the appeals process.

    In dissent, Judge Clevenger argued that the district court’s dismissal without prejudice was “equivalent for jurisdictional purposes to an amendment removing the declaratory judgment claims from the complaint.”  Because no other claims in MedImmune’s complaint “arise under” patent law, Clevenger argued that the regional circuit should now have jurisdiction over the case.

    Real Business Method Patents

    Patent, Patent Cases 2005

    Ex parte Lundgren, Appeal No. 2003-2088 (BPAI 2005).

    Because of the “technological arts” requirement, I have always thought the term “business method” to be a misnomer when applied to patents.  Famous business method patents such as Bezos one-click patent and the State Street patent are really directed at software for e-commerce and data processing.

    However, when a skilled business person thinks of a method of doing business, their proposal is generally not limited to software or tied to a computer.  I can’t count the number of times that I have explained to a confused business inventor that the PTO would not allow their broad claim because of a form-over-function limitation that a “computer” must be recited in the claim.

    Regardless of your stance on patenting of business methods, the “technological arts” rule — requiring simply that a computer be recited somewhere in the claim — was indefensible.  I’m just happy that I will now be able to explain business method patents in terms that business leaders understand.

    Links:

    Patent Board Eliminates “Technological Arts” Requirement For Business Method Patents

    Patent, Patent Cases 2005,

    Ex parte Lundgren, Appeal No. 2003-2088 (BPAI 2005).

    In a landmark decision, the Board of Patent Appeals and Interferences has issued a precedential opinion eliminating the Patent Office procedure of rejecting patents under 35 U.S.C. § 101 as outside of the “technological arts”

    Our determination is that there is currently no judicially recognized separate “technological arts” test to determine patent eligible subject matter under § 101.  We decline to create one. Therefore, it is apparent that the examiner’s rejection can not be sustained. 

    This decision will once again expand the role of business method patents by freeing them from being tied to a computer or other electronic device.  At the same time, this decision widens the gap between the US and many other countries who are still debating patentability of software.

    It is unclear at this point whether the PTO solicitor will ask the Federal Circuit to review this case.

    The Majority Opinion:

    Lundgren had claimed a “method of compensating a manager” that involved several steps of calculating a proper compensation based on performance criteria and then transferring payment to the manager. The examiner rejected the claims arguing that they were “outside the technical arts, namely an economic theory expressed as a mathematical algorithm without the disclosure or suggestion of a computer, automated means, apparatus of any kind, the invention as claimed is found non-statutory.”

    A five member panel reviewed this action, and three signed on to the per curiam majority opinion that found the claim to “produce a useful, concrete, tangible result” without being a “law of nature, physical phenomenon or abstract idea.”  Regarding the PTO “technological arts” test, the majority found that such a test does not exist under the law.

    Rejection reversed, there is no judicially recognized “technological arts” test for patentability.

    Dissent by Judge Smith:

    Judge Smith dissented, arguing that the “technological arts” standard is simply the modern lexical equivalent to the phrase “useful arts” found in the US Constitution. He then argued that Congress does not have power to pass patent laws that expand beyond those “useful arts.”

    While I do not question the power of Congress to pass laws to carry out this mandate, whatever law passed by the Congress cannot be applied in such a manner as to enlarge the constitutional mandate.  Thus, any laws passed by the Congress to grant patents should be applied in a manner that is consistent with the constitutional mandate. 

    The dissent then implicitly calls for the Federal Circuit to review the case and explicitly calls fro Congress to “step in and clarify the limits of 35 U.S.C. § 101.”

    Dissent by Judge Barrett:

    In a 78 page dissent, Judge Barrett suggests a new test under section 101 that would require some transformation of physical matter.

    Notes:

    • The BPAI holds its appeals in secret — and the Ex parte Lundgren opinion is yet to be officially released by the Board.  I published this article on the case after receiving copies of the opinion from reliable sources. Opinion.v1; Opinion.v2.
    • Link. Read more about Dr. Lundgren.

    CAFC Denies RIM Rehearing (UPDATE)

    Patent, Patent Cases 2005

    RIM STOP TRADINGThe big patent news on Friday was that RIM’s petition for a rehearing en banc at the Court of Appeals for the Federal Circuit was denied.  This news was so hot that trading of RIMM on Wall Street was halted for three hours.  (Someone on the Street does not understand odds because the denial was entirely expected.)

    RIM has ninety days to file a petition for writ of certiorari with the Supreme Court and line-up any Amicus curiae.  NTP will then have thirty days to respond in opposition.  This time-line easily pushes the Court’s decision on whether to even hear the the case into 2006.  In all likelihood, the Court will decline — thus allowing the case to return to the district court to determine: (1) whether a the “term sheet” was an actual settlement; (2) whether an injunction should issue immediately; and/or (3) how new hearings/trial should proceed on the issues vacated by the August 2005 opinion [pdf]. (see UPDATE below).

    In a parallel process, the patents in suit are all undergoing reexamination at the PTO.  Each patent has been initially rejected in a first office action.  However, those initial rejections have yet to be made final.

     UPDATE: I received several comments on my implied conclusion that the district court would not take-on the case until after the Supreme Court came to a conclusion on the petition for cert:

    Love your blog. . . . The district court gets jurisdiction back as soon as the Fed Cir mandate issues. . . . The district court can thus act even while RIM is drafting a cert petition and the Supremes are reviewing it.  In most cases, a district court will move forward because the odds of cert are so low.  The district court can, however, stay the case pending Supreme Court review.  If I were NTP, I’d be in Judge Spencer’s face right now pushing for action on this case and telling him that the revised Fed Cir opinion makes Supreme Court review highly unlikely.  If I were RIM, I’d be asking for a stay based on the progress of the re-exams, and I’d be citing the Fed Cir’s stay of the MercExchange case.

     

    Single Embodiment Of Claim Element Fails To Describe Element Generically

    Patent, Patent Cases 2005,

    Patentlyo007LizardTech v. Earth Resource Mapping (Fed. Cir. 2005).

    On summary judgment, the district court deemed LizardTech’s patent invalid for failing to meet the written description requirement of 35 USC 112 para 1.  The asserted patents were related to the use of discrete wavelet transform (DWT) to compress digital images.

    The specification provides an example method for creating a seamless DWT including the step of “maintain[ing] updated sums” — that procedure is the focus of claim 1.  Claim 21, however, is a broader claim that lacks the “maintains updated sums” limitation.  The specification did not explicitly describe a method that did not include that limitation. (Although claim 21 was included in the original disclosure)

    On appeal, the CAFC paid lip service to the rule that a claim will not be invalidated under Section 112 for only disclosing a single embodiment.  However, the court went on to determine that claim 21 was directed at “all seamless DWT’s” — a coverage not adequately supported by the single embodiment.

    After reading the patent, a person of skill in the art would not understand how to make a seamless DWT generically and would not understand LizardTech to have invented a method for making a seamless DWT, except by “maintaining updating sums of DWT coefficients.”

    [A] patentee cannot always satisfy the requirements of section 112, in supporting expansive claim language, merely by clearly describing one embodiment of the thing claimed.

    As noted by David Long, this case is a “must read for those addressing written description (or enablement) issues.

    Comments:

    • I see this as a quite odd decision.  First, although claim 21 arguably covers either “seamless DWT” or  “non-seamless DWT,” such a result is explicitly claimed.  The CAFC did not point to any element of claim 21 that was not sufficiently described.  Rather, the court found the claim invalid because an an embodiment arguably covered by the claim (seamless DWT) was not sufficiently described. 
    • A fellow patent attorney and Patently-O reader e-mailed this morning with a different take:

    Section 112 requires that the patentee have both possession of the invention and an enabling disclosure. In this case, the Court found that because the patentee had only described (and apart from claim 21) claimed the one embodiment that required “maintaining updating sums of DWT coefficients” this shows that the method including this element was really the scope of what the patentee considered their invention. That is, the patentee didn’t think they had invented a more generic way of creating a seamless DWT that did not include that element.

    The Court went on to say that any such generic method is also not enabled — first because it is not described in the specification and second because it is not within the ability of one of ordinary skill to practice without undue experimentation. As the Court noted, both these requirements usually rise or fall together. The last paragraph of the opinion makes clear, however, that even assuming that patentee had possession of this invention (by virtue of claim 21 being part of the original application) the claim is still not enabled. That is, even if one of ordinary skill in the art read claim 21 and recognized that it covered a generic method of creating a seamless DWT, that person still would not have been able to come up with the generic method (i.e., one not using the updating sums element) without undue experimentation. Therefore, the claim doesn’t satisfy the requirements of 112.

    Thus, after this case (and as was the case, no pun intended, before LizardTech) one is free to describe one or more embodiments in the application and draft claims that cover other broader embodiments that are not described in the application. Those broader claims will be valid provided that the patentee had possession of those broader embodiments and the broader embodiments are enabled. Presumably they would be enabled because, even though not described in the application, they would still be within the ability of one of ordinary skill in the art to practice without undue experimentation.

    • The lesson for prosecutors is that broad claims will generally require multiple embodiments of each element. Specifically, if you claim A+B+C+D, do not expect that you can claim A+B+C without adequately disclosing that D is not necessary or that D can take alternative forms.
    • Philip Mann of IP Litigation Law Blog was counsel for LizardTech.

    Documents:

    Solicitor General to Opine on Landmark Obviousness Case

    Patent, Patent Cases 2005

    PatentlyOImage025_smallKSR International v. Teleflex (On Petition for Certiorari).

    KSR is challenging the Federal Circuit’s “teaching-suggestion-motivation test” for determining whether two references can be combined in an obviousness rejection.  This test has been a stalwart of Federal Circuit jurisprudence for twenty years.  During that time, however, the Supreme Court has not heard a single obviousness case. 

    The case is now on petition for certiorari at the Supreme Court — awaiting the High Court’s decision on whether to hear the case.  Signaling at least a tepid interest in the case, on October 3, 2005, the Court has asked the Solicitor General to file a brief expressing the views of the US Government.  The new Chief Justice (Roberts) took no part in the decision.

    At this point, it is likely that the Court will follow the Solicitor General’s recommendations — although it is still unclear what those recommendations will be.

    Support for the petition: Respected law professor John Duffy is an attorney of record on the KSR brief, which argues that the CAFC’s obviousness test goes against Supreme Court precedent, against precedent of other circuits, and is bad policy. Professor Duffy is a former clerk of Justice Scalia.

    A consortium of five major corporations, including Microsoft, Cisco, and Hallmark have filed as amicus supporting the petition.  Their brief argues that the current structured test for obviousness is too easy a hurdle for patentees and that the formalities of the test undermines courts ability to truly determine whether an invention is obvious to one skilled in the art.

    Documents:

    Links:

    CAFC Finds Liability For Export of Catalyst Used in Patented Process Abroad

    Patent, Patent Cases 2005

    Patentlyo006Union Carbide v. Shell Oil (Fed. Cir. 2005).

    A jury found that Shell infringed Union Carbide’s patented process for producing Ethylene Oxide.  However, the court did not allow Union Carbide to collect damages for Shell’s foreign sales under 35 U.S.C. 271(f) because the statute is “not directed to process claims.”

    On appeal, the CAFC reversed the district court and reaffirmed the recent Eolas decision that 271(f) is directed to “every component of every form of invention” and that the statute is “not limited to physical machines.”

    Thus, the court found that Shell’s exportation of a catalyst used abroad to facilitate the patented process constituted infringement under the law. Remanded for a new determination of damages.

    Links:

    Means-Plus-Function: Identification of Function and Corresponding Structure Reviewed De Novo

    Patent, Patent Cases 2005

    JVW Enterprises v. Interact Accessories (Fed. Cir. 2005).

    In a case involving a video game controller, the appeals court reversed-in-part, finding that the lower court had misconstrued the means-plus-function limitation.

    De Novo: Like other claim construction, the interpretation of means-plus-function language is reviewed de novo.  More particularly, identification of the function and corresponding structure is reviewed de novo.

    In this case, the CAFC found that the district court’s opinion “confuses function with structure.”  According to the appellate panel, “function must be determined before corresponding structure can be identified.” 

    Function as claimed: The function of a means-plus-function claim is found in the claim language.  In this case, the district court erred in interpreting unclaimed functions into the claims. 

    Structure as described: The corresponding structure of a claimed function must be found in the specification — and must be clearly associated with performance of the function.

    The CAFC reversed and remanded based on consequences of the err in claim construction.

    Means Plus Function Disavowal of Equivalents?

    Patent, Patent Cases 2005

    Patentlyo004Cross Medical v. Medtronic (Fed. Cir. 2005).

    After an award of summary judgment of infringement, the Central District of California District Court issued a permanent injunction against Medtronic’s use of Cross’s patented spinal implants.  After determining that it had jurisdiction, the CAFC reversed the claim construction and remanded for a new determination of infringement based on the corrected construction.

    Jurisdiction: Cross argued that, the injunction had no coercive effect because had Medtronic pulled its products from the market prior to the injunction, and thus, that there was no jurisdiction for an appeal.  The CAFC disagreed, highlighting their clear rule that: “if the district court’s order expressly grants an injunction, the order is appealable under § 1292(a)(1), without regard to whether the appellant is able to demonstrate serious or irreparable consequences.”

    Claim Construction: The appellate panel began its claim construction analysis by referring to Webster’s definition of an “interface.” This was permissible under Phillips because the dictionary definition did not “contradict any definition found in or ascertained by a reading of the patent documents. Using the new definition, the CAFC modified the district court’s construction.

    Means Plus Function: In an office action, the applicant referred to the claimed “securing means” as “i.e., the nut.”  Despite this reference to the a specific securing structure, the CAFC found that there had been no disavowal of scope in the means plus function element.  In dicta, the court noted that it had not decided whether there could ever be “a disavowal of § 112, ¶ 6 equivalents.”

    The court then conducted a thorough analysis of infringement and validity, eventually vacating the summary judgment and remanding for further proceedings.

    Download the case.

    On Sale Bar Invalidates DNA Probe Patent

    Patent, Patent Cases 2005

    Enzo Biochem v. Gen-Probe (Fed. Cir. 2005).

    Patentlyo003At the district court, Enzo’s patent, covering DNA probes for hybrodizing N. gonorrhoeae, was held invalid under the on sale bar. Specifically, the district court found that the claimed invention had been offered for sale before the critical date — more than one year before the patent application was filed.

    In June 1982/83, Enzo and Ortho Diagnostics entered into a joint research that specifically focused on the gonorrhea probe. In 1984 Enzo supplied Ortho a probe like that claimed.  However, it was not until 1986 that Enzo filed its patent application.  The district court found the transfer to be an invalidating sale and awarded summary judgment of invalidity.

    On appeal, the CAFC reviewed the two prong Pfaff test for application of the on sale bar:

    1. Subject to a commercial offer for sale; and
    2. Invention ready for patenting.

    Offer for sale: Taking the two elements in turn, the appellate panel first found that the research agreement “created the necessary contractual obligations” to be considered a commercial offer for sale. Specifically, the court pointed to the following language in the agreement:

    ENZO shall supply to ORTHO and ORTHO shall purchase from ENZO for use in Licensed Products no less than ninety percent (90%) of ORTHO’s United States requirements or seventy-five percent (75%) of ORTHO’s worldwide requirements of Active Ingredients. . . .

    Ready for Patenting: Because the invention had been reduced to practice and its utility as a gonorrhea probe had been recognized, the court also determined that the invention was “ready for patenting.”

    Method Claim: The CAFC found that the method claims were put “on sale” by including instructions for use with the probe.

    Summary judgment of invalidity affirmed.

    Eolas v. Microsoft: Eolas Patent Set to Reissue

    Patent, Patent Cases 2005, ,

    Patentlyo001Eolas v. Microsoft (Reexamination at the PTO).

    Microsoft’s appeal of this case is currently pending before the Supreme Court. In a parallel action, however the Eolas patent has been undergoing reexamination at the USPTO. 

    As occurs in almost all inter partes and director-ordered reexaminations, the patent office issued a non-final rejection to Eolas.  Although this first rejection was a good sign for Microsoft, on September 27, 2005, the patent office indicated that it was filing a “Notice of Intent to Issue a Reexam Certificate” for patent number 5,838,906. 

    This means that the PTO has decided, for a second time, that the ‘906 patent is valid. 

    Links:

    U.S. Philips CD Patent Pool Given Green Light by Court of Appeals

    Patent, Patent Cases 2005

    PhilipsPatentU.S. Philips v. International Trade Commission (Fed. Cir. 2005)

    Philips owns patents on recordable compact discs including CD-R and CD-RW technology and offers licenses to various manufacturers in pools of “essential” and “nonessential. Several foreign manufacturers refused to pay and, upon Philips request, the ITC initiated an investigation.

    During the investigation, the ITC administrative law judge found that the manufacturers infringed the claims of the asserted Philips patents but rules the patents unenforceable for patent misuse.  Specifically, the judge ruled that the pooling arrangement constituted misuse because some of the “essential” patents were actually not essential. 

    Among the grounds invoked by the administrative law judge for finding patent misuse was his conclusion that the package licensing arrangements constituted tying arrangements that were illegal under analogous antitrust law principles and thus rendered the subject patents unenforceable.

    In Philips first appeal, the Commission affirmed the judge’s ruling, concluding that nonessential patents were impermissibly tied to essential patents because “none of the so-called essential patents could be licensed individually for the manufacture of CD-RWs and CD-Rs apart from the [essential] package.”

    Court of Appeals for the Federal Circuit, however, reversed, finding that the license pool was not patent misuse even if some of the pooled patents were nonessential.

    [T]he Commission erred when it characterized the package license agreements as a way of forcing the intervenors to license technology that they did not want in order to obtain patent rights that they did.

    The CAFC’s decision relied on the theory that it would be “entirely rational” for a patentee who has an “essential” patent to “charge what the market will bear for the essential patent and to offer the others for free.”

    Thus, the CAFC held that that the Commission’s application of both  per se and rule-of-reason analyses to the package license agreement to be legally flawed.

    REVERSED AND REMANDED

    Jury must be presented with a structural analysis of means+function elements

    Patent, Patent Cases 2005

    Image011CytoLogix v. Ventana (Fed. Cir. 2005).

    CytoLogix sued Ventana for infringement of its patents covering an automated microscopic slide stainer.  The case went to trial and the jury found that the patent was not invalid and that Ventana infringed.

    The district court entered a permanent injunction but did not yet reach the issue of damages.

    Final Judgment: As a preliminary matter, the CAFC determined that it had jurisdiction to hear an appeal even though the court had not entered a final judgment with respect to liability damages.  Specifically, the court held that it had jurisdiction over the interlocutory appeal because Ventana was appealing a permanent injunction order.

    Means+Function: The CAFC overruled the jury’s verdict on claim 13 — a means plus function claim.  The appellate court ruled that CytoLogix had failed to present “substantial evidence” of infringement of the means plus function claim because it did not construct a specific structural analysis of that claim.

    To establish infringement under § 112, ¶ 6, it is insufficient for the patent holder to present testimony “based only on a functional, not a structural, analysis.”  Here, CytoLogix failed to identify the structure in the specification that is the “temperature controller means” and compare it to the structure of the accused device. Accordingly, because CytoLogix failed to present substantial evidence of infringement of claim 13 of the ’693 patent, the jury verdict of infringement of claim 13 must be reversed.

     

    Assignor Estoppel: Inventor barred from testifying for defense

    Patent, Patent Cases 2005

    RailroadPandrol v. Airboss Railway (Fed. Cir. 2005).

    Pandrol sued Airboss for infringement of its RR track fastening system that resists erosion.  On summary judgment, the district court found that the patent description was “adequate to satisfy the written description requirement.”  In addition, the lower court barred one of the inventors from testifying for the defense.

    Written Description: Section 112 of the patent act requires “sufficient information in the specification to show that the inventor possessed the invention at the time of that original disclosure.”  On appeal, the CAFC affirmed, finding that the claims (as construed) were sufficiently supported.

    Assignor Estoppel: In addition, the CAFC reviewed the district court’s exclusion of one of the inventor’s testimony under the doctrine of assignor estoppel.  The judicial doctrine of assignor estoppel prevents the assignor of a patent from later contending that the patent is invalid.

    In this case, the defendant wanted to have one of the inventors testify that the patent was invalid — a request denied by the district court. 

    On appeal, the CAFC agreed that the court had correctly excluded the inventor’s testimony because it would be “unfair” to allow the inventor to testify against the patent.

    File Attachment: 04-1069.pdf (83 KB)