CAFC: Suggestion-Test Has Been Flexibly Applied For Decades

DenimDyStar v. Patrick Co. (Fed. Cir. 2006).

DyStar’s patent discloses a process for dyeing textiles with catalytically hydrogenated leuco indigo. After a trial, the jury found that Patrick infringed claims 1–4, that the patent was not invalid, and that $90,000 of damages should be awarded.

Patrick appealed the lower court’s denial of a new trial on obviousness grounds.  A new trial should not awarded when “a jury, viewing the evidence in the light most favorable to [DyStar], could have properly reached [its validity] conclusion.” The CAFC reviewed the denial for abuse of discretion. (Level of review based on Fourth Circuit law).

As is often the case, all the elements of DyStar’s invention were already known in the art — the question was whether there was some obvious motivation to combine the prior art together. 

Suggestion to Combine: In recent weeks, we have seen a common thread in CAFC jurisprudence indicating that “the suggestion test is not a rigid categorical rule.” Rather, the suggestion to combine references can be found from “any number of sources, including common knowledge, the prior art as a whole, or the nature of the problem itself.”

It is difficult to see how our suggestion test could be seen as rigid and categorical given the myriad cases over several decades in which panels of this court have applied the suggestion test flexibly. Obviousness is a complicated subject requiring sophisticated analysis, and no single case lays out all facets of the legal test. DyStar’s argument and the above-cited commentary highlight the danger inherent in focusing on isolated dicta rather than gleaning the law of a particular area from careful reading of the full text of a group of related precedents for all they say that is dispositive and for what they hold. When parties like Dystar do not engage in such careful, candid, and complete legal analysis, much confusion about the law arises and, through time, can be compounded.

Holding: Claims are obvious

In a footnote, the Court defends its KSR decision — a decision currently being briefed at the Supreme Court.  

In KSR, we vacated a district court’s grant of summary judgment of invalidity for obviousness. The district court found a motivation to combine not in the references but “largely on the nature of the problem to be solved”, which we did not deem erroneous. Teleflex, Inc. v. KSR Int’l Co., 119 Fed. App’x 282, 287 (Fed. Cir. 2005) (unpublished). Rather, we vacated because the court did not explain sufficiently its rationale, and failed to make “findings as to the specific understanding or principle within the knowledge of a skilled artisan that would have motivated one with no knowledge of [the] invention to make the combination in the manner claimed.” Id. at 288 (citation omitted).

In an impressive history (that is begging for a full analysis), the CAFC sets out the full scope of the flexibility of the suggestion test and notes how the test is well grounded in Supreme Court jurisprudence and has always been flexible. This is one for the casebooks.

PTO’s Claim Construction Given No Weight at CAFC

SRAM v. AD-II (Fed. Cir. 2006).

ScreenShot036SRAM cases are always great because they involve interesting mechanical technology.  This one involves a shift actuator for a bicycle derailleur. After claim construction, the district court granted summary judgment for SRAM and issued a permanent injunction against AD-II.

On appeal, AD-II argued that the lower court was too narrow in its construction, and that a proper broad construction of the claims would render them invalid.  The CAFC agreed.  Of note, during prosecution (and three reexamination proceedings) the PTO examiner construed the disputed term in the same fashion followed by the district court. (Not always explicitly). On appeal, the CAFC gave those interpretations no consideration.

[P]aradoxically in this case, the PTO construed the claim narrowly, rather than broadly, by reading in the same limitation as did the district court. In doing so, the PTO erred for the same reasons as did the district court. The Patent Examiner’s actions thus provide no support for SRAM’s argument. Furthermore, this court is not bound by the PTO’s claim interpretation because we review claim construction de novo.

Vacated and remanded.


  • Although claim construction is de novo this decision appears to rub against notions of prosecution-based-interpretation found in other cases
  • For more information on bicycle patents and innovation, check out Patent Attorney Bob Shaver’s Patent Pending Blog.

Section 295 Non-Infringement Burden Shifting: Does Not Require Evidence Where Non-infringement is Clear

Kemin Foods v. Pigmentos Vegetales (Fed. Cir. 2006).

Kemin holds patents related to purifying lutein that is is extracted from plants. A jury gave Kemin the verdict based on infringement under the doctrine of equivalents. The court then issued a permanent injunction and Pigmentos appealed. 

The CAFC decision is essentially a lesson in reasoned deference — the CAFC affirmed each of the district court’s decisions and only overruled one evidentiary decision by the magistrate.

An interesting squib in the opinion involves the permanent injunction.

As is true in many patent cases, the defendant continued to modify its accused process throughout the litigation.  Based on those changes, the district court agreed to shift the burden of proving non-infringement to the defendant.  35 U.S.C. 295 provides statutory support for burden shifting when there is “a substantial likelihood . . . that the [accused] product was made by the patented process” after the plaintiff shows “a reasonable effort to determine the process actually used in the production of the product and was unable so to determine.”

After the decision, Kemin argued that the permanent injunction should apply to “any process run by [the defendant] at any time through the date of the jury verdict.”  Kemin’s reasoning was that Section 295 required the defendant to present non-infringement evidence about any of those processes — and its failure to do so should result in in an injunction to stop the activity.  The CAFC disagreed — simply because the new processes could not lead to infringement because they did not use  propylene glycol as required by the claim language.  The court remanded for a determination of whether the new non-propylene glycol processes lead to infringement of another claim.

The unstated principle that emerges here is that Section 295 burden shifting cannot be used to capture clearly non-infringing activities even if the defense presents no evidence of the non-infringement.


CAFC: Reissue Recapture Rule is “Objective”

Healthy_choiceKim v. ConAgra (Fed. Cir. 2006).

Here’s another case where technicalities of the patent system apparently trapped an unsuspecting patentee.

“[W]e reject Kim’s position that she should be treated differently from other patentees because she was pro se during some parts of the prosecution.”

Potassium bromate has been traditionally used in bread-making, but people are concerned with its carcinogenic effects. Yoon Ja Kim, a chemist, found that a combination of ascorbic acid and food acid could serve the purpose of potassium bromate. (i.e., to “strengthen dough, increase loaf volume, contribute to fine crumb grain, and increase shelf life”). Kim filed a pro se patent application and got her patent.

Kim then sued ConAgra — asserting that “Healthy Choice” brand breads infringed on the patent. A jury then found that the patent was not invalid and infringed. The district court, however granted JMOL of non-infringement in ConAgra’s favor. Kim appealed.

Claim Construction and Infringement: The asserted claims both appeared as follows:

A potassium bromate replacer composition consisting essentially of . . .

Although not defined in the specification, CAFC found the preamble term “potassium bromate replacer” to be limiting to the extent that any infringing composition must “perform essentially the same function in the production of that bread as would potassium bromate.”

Kim, acting as her own expert witness, showed that the accused products included the same ingredients as listed in the claims (and that potassium bromate was not an ingredient).  However, Kim did not prove that those ingredients were functionally active in the accused products. 

Then, the court found that other ingredients, such as vital wheat glutten, ferrous sulfate, and dough strengthening enzymes, might be active.  If that is the case, Kim’s “consisting essentially of” transition language would remove those from the ambit of infringement.

Validity – Recapture: Even though the court found no infringement, it went-on to discuss validity. Kim’s patent is a reissue, and the defense argued that the patent violated the rule against recapture.  That rule forbids a reissue applicant to recapture scope surrendered during prosecution unless it was “erroneously excluded from that patent.” 

Prior precedent made this look like a subjective rule — it is not. “Surrender” means that an objective observer who is later “looking at the prosecution history would conclude that the purpose of the patentee’s amendment or argument was to overcome prior art and secure the patent.”  According to the CAFC, the objective standard gives the public more clarity as to when they can rely on a patentee’s admission during prosecution. Interestingly for Kim, he would have lost under the subjective standard, but wins under an objective standard [for reasons too long to describe here.]

Dissent by Judge Schall: Schall would not have included the extensive functional limitation of the preamble potassium bromate replacer because “Kim acted as her own lexicographer in defining the term ‘potassium bromate replacer’ as ‘a slow acting oxidant that is functional throughout the entire manufacturing process.’”

My question is: Have you looked at the ingredient list of your bread lately?


EchoStar v. TiVo Patent Case Stayed Pending Inter Partes Reexamination

First, I’m happy to report that one of my favorite patent blogs, the 271 Patent Blog by Peter Zura is back in business. Welcome back Peter.

I’ve been covering the TiVo v. EchoStar case here. Peter has information about the companion case EchoStar v. TiVo here.  In the first case TiVo sued EchoStar for patent infringement, and in the second, EchoStar sued TiVo for patent infringement. This is great fodder for an antitrust article (or blog post). We have what may be a market duopoly with each side holding potentially essential intellectual property rights.

The take-home for patent attorneys involves the second case — the one filed by EchoStar.  That case was recently stayed pending the outcome of an inter partes reexamination filed by TiVo. In its decision to stay, the magistrate judge gave a good amount of weight to the fact that the reexam was inter partes — thus giving both sides an opportunity to continue the litigation in another form — as well as the statutory litigation estoppel effect against TiVo if the validity EchoStar’s patents are reaffirmed in the reexamination process.  In other words, the fact that the reexam is inter partes made the court more likely to stay the litigation.

CAFC and the Nebulous Motivation to Modify

Ormco v. Align Technology (Fed. Cir. 2006).

Align owns a couple of patents covering a system of using a series of sequential orthodontic retainers.  Each retainer in the series is used to shift the teeth a bit.  Claim 1 is typical and, according to the CAFC:

essentially requires (a) three or more appliances with geometries selected to progressively reposition teeth; (b) instructions regarding order of use; and (c) provision of the appliances in a single package to the patient.

On summary judgment, the patent was found not invalid and infringed.  The defendant appealed on obviousness and won.  

The opinion is interesting because the court gives only lip-service to the requirement of proof of motivation to modify the the teaching of prior art to achieve the claimed invention.  The prior art reference taught the progressive retainers, but did not teach the single package provisioning limitation. The only motivation modify provided by the court is as follows:

Under these circumstances, we do not think that the single package limitation makes the device of the ‘611 patent claims patentably distinct. Providing the devices to the patient in one package, as opposed to two packages or three packages is not a novel or patentable feature in the light of the well-known practice of packaging items in the manner most convenient to the purchaser.

The prior art reference actually appeared to teach away from the single package provisioning by stating that each subsequent retainer should be applied by a professional in an office visit.  Here the court dismissed that argument because the supposed teaching away of the prior art (requiring a professional visit for installation) does not necessarily mean that all of the retainers cannot be all packaged together. Although not explicit, this decision appears to diverge from the traditional thought of teaching away as a “suggestion” or implication and moves it to a world where the teaching away is explicitly and definite.

Regarding the instruction limitation — that limitation will never make an invention patentable in the medical field:

statutes and regulations promulgated under the Food, Drug, and Cosmetic Act (“FDCA”) generally require instructions for medical devices. Whether or not these regulations apply to the specific orthodontic devices involved here, they supply ample evidence of a motivation to provide instructions as to how to use the devices.

Note: The timing of this case is exceptional.  As the respondent and oppositional amici in KSR are preparing their briefs, this decision appears showing the flexibility of the modification test and its ability to allow the court to bend over backwards to achieve the right results. . . .

CAFC Condones District Court Preliminary Injunction Jurisdiction Despite Ongoing ITC Exclusion Order

CameraPatent.jpgFuji Photo Film v. Benun (Fed. Cir. 2006).

Fuji’s disposable camera patent litigation against Jazz Photo and Benun (Jazz’s owner) is ongoing.  (See, e.g.,  here and here).  The lower court granted a preliminary injunction stopping Benun from importing any otherwise infringing disposable cameras that did not originate from camera shells that were first sold in the U.S.  Because the ITC has an ongoing Exclusion Order for these products, the defendants challenged the district court’s jurisdiction to enjoin the activity.

Benun tied its jurisdiction argument to the ITC’s grant of jurisdiction.  Under 28 U.S.C., 1581(a), the ITC has “exclusive jurisdiction of any civil action commenced to contest the denial of a protest, in whole or in part, under section 515 of the Tariff Act of 1930.”  As the CAFC aptly found, however, the statute does not “even vaguely suggest[] that the statutory scheme for protesting a seizure . . . divests a district court of jurisdiction to consider an injunction on goods subject to a general exclusion order.” 

According to the CAFC, this distinction makes sense because of the major differences between a general exclusion order and a preliminary injunction to stop patent infringement. Specifically, a general exclusion order is a government action that merely excludes goods from entry.  The district court infringement case, however, can lead to damages and attorney fees as well as potential contempt proceedings for violation of a preliminary injunction.

Litigation Misconduct and Enhanced Damages

z4 v. Microsoft (E.D. Tex. 2006).

The Eastern District of Texas has been busy leading the post-eBay anti-injunction craze.  z4’s motion for injunctive relief against Microsoft was denied (see z4), but the small holding company was still awarded $115,000,000 in damages against the software giant.

Now, the court has added another $25,000,000 in enhanced willfulness damages and $2.3 million in costs and attorneys’ fees. z4 and its owner David Colvin successfully played the underdog:

[T]here is ample circumstantial evidence that to Microsoft[,] Colvin and his patent rights were insignificant because Microsoft never thought Colvin would be able to pursue his rights against it. The evidence presented at trial suggests that Microsoft considered z4 a small and irrelevant company that was not worthy of Microsoft’s time and attention, even if Microsoft was potentially infringing its patents.

In economics literature, this potential for “underenforcement” is a classic justification of punitive damages. 

The court then went through a laundry list of examples of Microsoft’s litigation misconduct that formed the basis for the finding of an exceptional case as well as a partial basis for the enhanced willfulness damages.  Some of these are listed below:

The Moncau email. It wasn’t until the Sunday one-day before trial that z4 was finally a able to depose Microsoft’s witness Moncau, and during that deposition Moncau revealed information about an important email that had been sent to two other Microsoft witnesses discussing critical information regarding operation of Microsoft’s product.  That email had never been produced even though Moncau testified that he had provided all his documents to Microsoft’s counsel over one year before the deposition.

Nevertheless, the email had never been produced by Microsoft during discovery despite the fact that it was between three Microsoft employees referenced in the email, all of whom allegedly gave all of their relevant documents to Microsoft’s counsel for production. Making matters even worse, Defendants admit they were aware of the Moncau email several hours before Moncau’s deposition, but still withheld it from z4 until z4 found out about it during questioning during the deposition. This raises a serious question as to whether the email would have ever seen the light of day, had z4 not uncovered it during Moncau’s deposition the day before trial.

At trial, the Court indicated to the Jury that Microsoft had improperly withheld the communication.

The Hughes Database. Microsoft attempted to use a summary chart at trial based on an underlying database.  In his deposition, however, Hughes, the chart’s creator, testified that the database did not exist.  One week after the deposition, Microsoft did, in fact, produce the data stored in file on a CD labeled “Source Code,” but z4 never found the database and, even after z4 asked, Microsoft never corrected Hughes original testimony or informed z4 of the database. 

It also turned out that the summary was an inaccurate representation of the database and that Microsoft had not accurately disclosed the method used to create the summary chart.

The Court determined that Microsoft had attempted to mislead z4, the Court, and the jury and excluded Hughes from testifying with regard to the database and his summary chart.

Voluminous Exhibit Tactic. Microsoft marked over 3,000 exhibits for trial, but only admitted 107 of these.

The Court concludes that Defendants attempted to bury the relevant 107 exhibits admitted at trial in its voluminous 3,449 marked exhibits in the hope that they could conceal their trial evidence in a massive pile of decoys. This type of trial tactic is not only unfair to z4, but creates unnecessary work on the Court staff and is confusing and potentially misleading to the jury.


Finally, the Court is greatly disturbed by the repeated instances where Defendants actions go beyond what can be dismissed as a mere appearance of impropriety and collectively appear to represent a pattern which is of disappointment to the Court and a disservice to legitimate advocacy. The repeated examples, some of which are not even mentioned here, of what can be described as nothing less than misleading on the part of Defendants, justify a conclusion that Defendants committed litigation misconduct. This conduct, coupled with the fact that Microsoft was found to have willfully infringed the patents-in-suit results in this case being deemed exceptional. Accordingly, the Court awards z4 reasonable attorneys’ fees and expenses, excluding expenses related to expert witnesses.

Microsoft is expected to appeal this decision.  z4 will likely cross-appeal the denial of injunction.


Patently-O: Judge Takes Stand Against Forum Shopping

Collaboration Properties v. Tandberg ASA, 2006 U.S. Dist. LEXIS 43930 (N.D.Cal. 2006)

Defendant Tandberg waited for six months before moving to amend its answer to add certain defenses and counterclaims.  At about the same time, Tandberg filed its own patent infringement lawsuit (through a holding company) against Collaboration Props in the Eastern District of Texas. Judge Patel of the Northern District of California was clearly peeved at Tandberg’s litigation strategy and forum shopping. 

The court’s concerns about gamesmanship have not diminished, particularly in light of Tandberg’s ongoing aggressive and arguably frivolous motion practice.

Despite these concerns, Judge Patel granted leave to amend subject to a “reasonable condition” that Tandberg’s holding company submit to personal jurisdiction in California and allow the case to be consolidated there.  Tandberg refused and so the court also refused to allow the amended answer and counterclaims.

Note: A reader e-mailed the decision to me because it is apparently the first federal court decision citing Patently-O. In particular, the court cites a draft version of patent reform legislation that I have stored online. At his blog, Ian Best, has compiled a directory of all 27 cases that thus far cite to legal blogs.  (A total of 8 legal blogs have been cited).  Mr. Best has also compiled a directory of all 489 law review articles that cite to legal blogs.  It turns out that Patently-O is in the top-ten with seventeen citations, thirteen of them coming in the past four months.

Presumption of Irreparable Harm

ScreenShot031Christiana Inds. v. Empire Electronics, 2006 U.S. Dist. LEXIS 54210 (E.D.Mich. 2006).

One of the first questions likely to be decided post-eBay is whether infringement of a patent provides any presumption of irreparable harm when judging the equitable factors associated with a permanent injunction. In z4 Tech, a Texas district court could find no support for “the application of a rebuttable presumption of irreparable harm with regard to a permanent injunction.”  In Christiana, however, the district court found that such a presumption continues to exist — at least for preliminary injunctions:

Defendant asserts that in Ebay, the Supreme Court eliminated the presumption of irreparable harm for preliminary injunctions upon a showing of validity and infringement. Plaintiff argues, and this Court agrees, that Ebay did not invalidate the presumption

Christiana (Denying motion for reconsideration of order granting preliminary injunction.)

In the recent case of Abbott v. Andrx, the CAFC took a step towards answering that question — loosely (with a double-negative) implying that a presumption of irreparable harm in a preliminary injunction may be established by showing a likelihood of success on the merits.

[W]e conclude that Abbott has not established a likelihood of success on the merits. As a result, Abbott is no longer entitled to a presumption of irreparable harm.

Abbott v. Andrx. Earlier cases have applied the presumption to permanent injunctive relief as well.  For instance, in the 2004 case of Arthrocare v. Smith & Nephew, the Delaware district court held that “[a]s the patentee, Arthrocare presumptively has suffered irreparable harm throughout the duration of Smith & Nephew’s infringing activities.” Even the District Court in eBay v. MercExchange found that a presumption of irreparable harm flowed to the patentee, although in that case, the court found the presumption to be rebutted.

Injunction Granted to TiVo; Injunction Denied in Favor of Toyota.

TiVo v. EchoStar (E.D.Tex. 2006)

TiVo has been granted an injunction against EchoStar stopping it from installing or selling infringing DVR’s and ordering EchoStar to disable DVR functionality in the majority of its installed customer equipment. In granting the injunction, the most compelling factor appears to be that TiVo and EchoStar compete head to head in the DVR marketplace.

Defendants compete directly with Plaintiff – Defendants market their infringing products to potential DVR customers as an alternative to purchasing Plaintiff’s DVRs. The availability of the infringing products leads to loss of market share for Plaintiff’s products.

The court did not stay the injunction pending appeal. According to the district court, “[w]ithout a stronger showing that the jury’s verdict will be overturned in its entirety on appeal . . . allowing the ongoing infringement is not within the public’s interest.” However, in an emergency appeal, Chief Judge Michel has granted a temporary stay to “preserve the status quo while the court is considering the parties papers.” Briefing on the Stay will be completed by the end of August.

Paice v. Toyota (E.D.Tex. 2006).

One day earlier, the same Judge (Judge David Folsum) denied Paice its injunction against Toyota. Toyota was found to infringe Paice’s patents on hybrid vehicles under the doctrine of equivalents.  Paice, however, does not manufacture or sell any vehicles, but is geared toward licensing.  Because Paice could not show how its licensing activities would be irreparably harmed from the injunction (and because Toyota would certainly be irreparably harmed) the court denied the request for an injunction. In its findings, the Court made the following rulings:

  • A patentee has no presumption of irreparable harm even after the patent is found valid and infringed.
  • The patents relate to only a small portion of the Toyota products — thus an injunction would be quite onerous on Toyota.
  • Plaintiffs have offered to license the technology to Toyota — a demonstration that money is sufficient.

The court did not explicitly assign any weight to the fact that (1) infringement was only under the DOE and (2) infringement was not found to be willful.  There is some precedential weight, however, to the position that a strong showing of infringement should lead to a greater likelihood of a permanent injunction.


Monsanto’s Roundup Ready Patents Survive Appeal

Monsanto v. Scruggs (Fed. Cir. 2006).

Back in 2000, Monsanto sued Scruggs for infringement of its patents covering Roundup Ready (R) soybeans and cotton. Scruggs, a Mississippi farmer, had allegedly replanted seeds that he had grown on his farm. Monsanto won the infringement case on summary judgment and an injunction issued.

First Sale Doctrine: On appeal, Scruggs argued that because he purchased the seeds in an unrestricted sale, he was entitled to use those seeds in an unencumbered fashion under the doctrine of patent exhaustion. Scruggs’ first sale argument failed for two reasons. First, although Scruggs never obtained a license to use the seeds, he was supposed to under Monsanto policy — therefore the sale was not “unrestricted.” Second, as the CAFC held in McFarling, rights to second generation seeds are lost by unencombered sale of first generation seeds.

The fact that a patented technology can replicate itself does not give a purchaser the right to use replicated copies of the technology. Applying the first sale doctrine to subsequent generations of self-replicating technology would eviscerate the rights of the patent holder.

Antitrust Counterclaims: As a countermeasure, Scruggs asserted that Monsanto was misusing its patents and violating antitrust laws through its licensing requirements that include “an exclusivity provision, a no replant policy, a no research policy, . . . the payment of a technology fee,” and use of Roundup brand herbicide (with certain limitations). The CAFC made quick-work of these arguments — many of which were previously decided in the 2004 MacFarling case. By rearguing the previously decided in MacFarling, Scruggs appears to be set-up for a petition for certiorari based on those general principles.

In dissent from the antitrust conclusion, Judge Dyk argued Monsanto’s Roundup requirement to be unlawful tying.  More particularly, the requirement to use Roundup branded herbicide should be considered unlawful tying even if not other manufactuer had regulatory approval because that license term would chill activity of competitors in seeking their own regulatory approval.

A potential herbicide competitor thus would be concerned that, even if it secured government approval of its product, use of the approved herbicide would still be barred under the contracts. The elimination of such potential competition is not permissible under the antitrust laws.

Interestingly, neither the majority nor the dissent questioned the “no research” requirement of the license that prohibited research and/or experimentation on the seeds.  In fact, all three judges explicity agreed that restriction is a legitimate “field of use” restriction.  (Perhaps legitimizing a contract-based anti-circumvention requirement à la DMCA.).

The CAFC appears to have also ignored the State of Mississippi’s amicus brief arguing, inter alia,

Permanent Injunction: The lower court had issued a permanent injunction based on the CAFC’s “traditional rule.”  Based on eBay, the CAFC vacated the permanent injunction and remaneded for a full reconsideration of that final issue.


“Consisting Of” Claim Transition Does Not Exclude Unclaimed Impurities

Conoco v. EEI (Fed. Cir. 2006).

Conoco’s asserted claims were directed to drag reducing agents for gas pipelines.  EEI lost a bench trial and appealed on claim construction.  One claim in particular included the transition “consisting of” rather than the more open-ended “comprising.”

First, the CAFC refused to review the construction de novo because it had not been properly objected to at trial. Reviewing for clear error (substantial evidence) the appellate panel easily found that certain impurities found in the accused product did not allow EEI to escape infringement even though the closed “consisting of” language was used.

[I]mpurities that a person of ordinary skill in the relevant art would ordinarily associate with a component on the “consisting of” list do not exclude the accused product or process from infringement.


Federal Court Rejects Jurisdiction Over Inventorship Claim

Stevens v. Broad Reach, 79 USPQ2d 1501 (W.D.Mo. 2006).

Feeling he had been slighted by not being listed as the inventor on a patent application directed to a liquid polymer blender, Kirt Stevens sued — seeking a judgment that he is the inventor of the claimed invention and an injunction forcing an amendment to the pending application.

On motion, however, the court dismissed the claims for lack of subject matter jurisdiction. In particular, the court found that amendment of inventorship in a patent application is governed by 35 U.S.C. § 116.  That statute provides that amendment be made before the PTO and, according to the court "does not provide a private right of action in federal court to resolve inventorship disputes in patent applications."

Case dismissed.

Notes: Of course, Stevens cannot take action under Section 116 without the cooperation of the other side.  Suggestions for Stevens? The application, filed in October 2004, has apparently neither been published nor issued as a patent.

Object when jury instructions include disputed claim constructions

Serio-US v. Plastic Recovery Tech (Fed. Cir. 2006).

The jury found that PRT did not infringe Serio’s patents on automatic trash dumpster locks.   

Post-Trial Practice: After the jury’s finding, the plaintiff did not move for JMOL or a new trial — thus forclosing an appeal on the question of infringement except for prejudicial error (which was not found). In addition, the plaintiff did not object to the jury instructions which included the court’s claim interpretations — without an objection these instructions cannot be overtuned unless they are a "miscarriage of justice."  No miscarriage was found.

Exceptional case: The lower court did not find this to be an exceptional case — a finding affirmed on appeal:

Exceptional cases usually feature some material, inappropriate conduct related to the matter in litigation, such as willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, conduct that violates Federal Rule of Civil Procedure 11, or like infractions. . . . Absent misconduct in the litigation or in securing the patent, a trial court may only sanction the patentee if both the litigation is brought in subjective bad faith and the litigation is objectively baseless.

Because there was evidence that the case was not brought in bad faith, the refusal to award attorney fees was justified.


Noonan’s Corner Office: Amgen v. HMR

By Kevin Noonan.

The peripatetic case of Amgen v. HMR has once again been reviewed by the Federal Circuit.  No. 05-1157, decided August 3, 2006.  Once again the Court has failed to lay the several issues in the case to rest.  While affirming infringement and validity of two of the patents in suit, the court has remanded the matter once again to the district court in view of its de novo claim construction, and perhaps predictably disagreed with the lower court and reversed a determination of infringement under the Doctrine of Equivalents.

The case has two interesting aspects.  First, citing the rubrics of Phillips the court came to its own determination of the meaning of the term “therapeutically effective amount” with regard to a claim for recombinant erythropoietin (EPO).  EPO is a naturally-occurring hormone that stimulates the body to produce red blood cells, and its absence (or insufficiency) causes anemia.  The standard clinical measure of anemia is the hematocrit, or the percent of whole blood comprised of red blood cells. In construing the term “therapeutically-effective amount,” the district court had required that EPO falling within the scope of the claim containing the term increase hematocrit and have any other biological properties of naturally-occurring EPO. 

The Federal Circuit disagreed, and in doing so provided a nice illustration that Phillips has not changed the Court’s capacity for arriving at its own idiosyncratic construction.  The Court determined that the lower court had improperly focused on hematocrit, which is one of EPO’s biological properties recited in the specification, to the exclusion of several others, including increasing stimulation of reticulocyte response, development of ferrokinetic effects, erythrocyte mass changes, and stimulation of hemoglobin.  The Court noted in particular that the specification recited that the therapeutic properties of recombinant EPO “included” all of these, and that the specification further stated that recombinant EPO was therapeutically useful even if it lacked some but not all of these properties. 

Of course, the Court seems to have not considered the fact that all of the recited properties are related to the clinical measurement of hematocrit, since they are all part of the biological developmental pathway leading to an increase in the number of red blood cells in blood.  Thus, by cherry-picking the language of the specification, the Court was able to arrive at a facially-reasonable claim construction that seems to run contra to clinical reality.  This portion of the matter has been remanded, for further consideration in view of the Court’s claim construction, on the issue of invalidity over prior art references to EPO preparations that did not increase hematocrit but may have had one of the other recited biological properties.

The second issue is the doctrine of equivalents.  The “predicted” recombinant EPO protein contains 166 amino acids, but as produced naturally (and using HMR’s recombinant process) EPO has only 165 amino acids.  The issue before the Court was whether Amgen was entitled to assert claims to HMR’s recombinant EPO as an equivalent.  The district court twice found in the affirmative, and the Federal Circuit remanded in its first review so the lower court could consider the issue in view of Festo. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 740–41 (2002).  The district court having arrived at the same conclusion, infringement under the doctrine of equivalents, the Federal Circuit reversed, finding estoppel arising during prosecution.  Specifically, the Court held that  preliminary amendments resulting in claim language reciting the 166 amino acid species were not made for reasons tangentially related to the asserted equivalent, as found below, but raised prosecution history estoppel that precluded asserting the claim against HMR’s 165-amino acid species.  The Court’s holding was based in part on Amgen’s cancellation of claim limitations related to “fragments” of the 166-amino acid species, and in part because it found erroneous the district court’s determination that the amendments were made to limit the species to human EPO (the Court noted that if Amgen had intended to so limit the claims the mere addition of the word “human” would have been sufficient).  Finally, the Court rejected the notion that amendments made to avoid a double-patenting rejection were “tangential to patentability.”

For those keeping score, the Court in its two decisions has affirmed the district court’s judgment that two of Amgen’s patents are not invalid and are infringed, also affirmed that another Amgen patent is invalid, reversed a finding of infringement under the doctrine of equivalents (but affirmed that this patent is also not invalid), and for one patent remanded the issue of invalidity to the district court while affirming that if valid this patent is also infringed.  As noted in Judge Michel’s dissent (over the claim construction issue), the district court is now in position to decide whether to grant an injunction, keeping HMR’s competing EPO product off the market until at least the expiration of two of Amgen’s patents.  For the parties, that may be (or have to be) enough.


States Win Two 11th Amendment Immunity Dismissals

Tegic v. U.Texas (Fed. Cir. 2006)

Tegic sued UT in district court in the state of Washington for a declaratory judgment of patent invalidity and unenforceability.  UT had previously sued dozens of Tegic’s cellular phone companies for infringement based on Tegic’s underlying predictive text software. That lawsuit is ongoing.

Despite UT’s participation in similar litigation, the CAFC found that UT was protected from Tegic under 11th Amendment state immunity, and that the similar litigation did not waive such immunity. Particularly of note, the court found that (1) the suit in Texas does not waive immunity to suit in another state; (2) the “customer suit exception” cannot be used to override 11th Amendment immunity; and (3) UT’s issuance of a covenant not to sue Tegic is not a market entry.

The CAFC suggested that Tegic attempt to intervene in the Texas case — of course Tegic’s reason for filing a DJ action in Washington was to get the case out of Texas. . .

Pennington Seed v. Produce Exchange No. 299 and Univ. of Arkansas (Fed. Cir. 2006).

Pennington sued UofA for infringement of patent No. 6,111,170, which claims a new variety of fescue grass. Pennington argued that 11th Amendment immunity here would violate due process because the state of Arkansas provided no other adequate mechanism for pursuing claims against the state.  The CAFC disagreed, citing Florida Prepaid for the proposition that abrogation of state immunity requires a specific abrogation by Congress based on a finding that the available Arkansas procedures are inadequate. Congress has made no such finding.

Pennington also sued university officials in their official capacity.  The CAFC agreed that these persons were immune from a suit for past monetary damages based on actions in their official capacity. In addition, for an injunction to be viable, there must be a direct nexus between the officials and the alleged infringement.  There was none here. Immunity affirmed.

CAFC reopens case for determination on fraudulent expert reports

AirBagVenture Industries v. Autoliv (Fed. Cir. 2006).

At trial, damages experts relied on Venture’s financial statements when calculating damages.  It turns out, however, that those statements were at least inaccurate and perhaps fraudulent. Autoliv unsuccessfully moved for relief under FRCP 60(b), then appealed.

60(b)(2): Under Rule 60(b)(2), relief may be granted when new evidence is discovered that clearly would have produced a different result.  This rule rightly presents a high hurdle — requiring prejudice — to reopening a closed case.  After reviewing the potential new numbers, however, the CAFC agreed that despite the original inaccurate information, the final result was not necessarily mistaken.  

60(b)(3): Rule 60(b)(3) relates to fraud, misrepresentation, or other misconduct.

Discovery Misconduct: “Failure to produce material in response to legitimate discovery requests can constitute misconduct under Rule 60(b)(3).”  Even though Venture battled against every discovery request, there was no allegation that it disobeyed the Special Master or district court as would be required.

Reliance on Fraudulent Financial Statements: Unlike its counterpart 60(b)(2), Rule 6(b)(3) does not require prejudice in the result. Rather, when there is fraudulent testimony, relief is appropriate where “a jury might have reached a different conclusion” without the false testimony. (6th Circuit law). Because the lower court had assumed the prejudice standard, it did not address whether the expert testimony relying upon the incorrect financial statements was, in fact, fraudulent.  Thus, the CAFC vacated and remanded for a more complete finding.


  • Read the opinion here.
  • This case arose out of a 1995 settlement of a patent dispute that was, according to Autoliv, being breached by Venture.



Improper claim structure invalidates patent

Pfizer v. Ranbaxy (Fed. Cir. 2006).

In an infringement suit arising from Ranbaxy’s ANDA filing, Pfizer’s two patents covering Lipitor (atorvastatin) were upheld as infringed and not-invalid by the district court Judge Farnan. On appeal, the CAFC affirmed on one patent (leaving Lipitor covered), but found the asserted claim of the second patent (the ‘995 patent) invalid under Section 112, paragraph 4 because of an improper dependent claim structure.

Section 112 of the Patent Act requires, inter alia, that a dependent claim incorporates by reference all the limitations of the parent claim and also specifies a further limitation. 

Pfizer’s asserted claim 6 depends from claim 2, which depends from claim 1.  The subject matter of the claims is as follows:

Claim 1: (1) atorvastatin acid; or (2) atorvastatin lactone; or (3) pharmaceutically acceptable salts thereof.

Claim 2: atorvastatin acid but not atorvastatin lactone or a pharmaceutically acceptable salts.

Claim 6: the hemicalcium salt of the compound of claim 2.

Thus, claim 6 fails to "specify a further limitation of the subject matter" of the parent claim (as requred by 112) because the subject matter of claim 6 is completely outside the scope of claim 2.

Consequently, based on violation of the statute, the court found that the claim was invalid.

Although the district court was reluctant to find the fourth paragraph of § 112 to be an invalidating provision, doing so does not exalt form over substance. Rather, it is consistent with the overall statutory scheme that requires applicants to satisfy certain requirements before obtaining a patent, some of which are more procedural or technical than others.

Reversed in part. Pfizer may be able to correct this defect through a reissue application, although there is some question as to whether the defect here falls within an identified category.

Injunction Denied — Compulsory License Granted

Finisar v. DirectTV Group (E.D. Tex. 2006).

A jury found willful infringement by DirectTV.  However, in the post-trial hearing, the court denied Finisar’s motion for injunctive relief and instead granted a compulsory license.

Reasoning from the transcript:

  • Patentee has no irreparable harm because it never made or licensed the invention and DirectTV has money to pay damages. [The court found no presumption of irreparable harm.]
  • Because there are only two major competitors in the "market" (DirectTV and EchoStar), an injunction against DirectTV could create a de facto monopoly in EchoStar’s favor.
  • A compulsory license will adequately compensate Finisar — "especially since Finisar never had the will nor the means to implement the patent itself."
  • Hardship to DirectTV would be enormous. Thousands of employees out of work . . . 15 million lose the ability to watch TV . . . ripple effect . . . "some would say this is a blessing."


  • Kathi Lutton and Ruffin Cordell of Fish & Richardson have provided several key documents here.