Unpublished Opinions Will Be Citable

In the past, I’ve been given some grief for covering unpublished opinions on the blog. The Federal Circuit has even threatened sanctions against any attorney who cites those opinions in a court filing. Now however, the Supreme Court has voted to require courts to allow citation of unpublished (nonprecedential) appellate opinions.

Chief Justice John Roberts has been quoted as strongly against these hidden opinions— “A lawyer ought to be able to tell a court what it has done.”

According to a Law.com article by Tony Mauro, 9th Circuit Judge Alex Kozenski has been firmly against allowing citation of unpublished opinions:

When the people making the sausage tell you it’s not safe for human consumption, it seems strange indeed to have a committee in Washington tell people to go ahead and eat it anyway.

The rule will not be effective until January 1, 2007.

Federal Circuit Immigration Appeal: A Modest Proposal

One portion of the immigration legislation being debated would consolidate all immigration appeals to the Court of Appeals for the Federal Circuit (CAFC).

In a recent law.com article, appellate lawyer Howard Bashman provides some background on the issue and wonders why we should stop there:

There assuredly are other categories of appeals that the regional federal appellate courts view as dry, needlessly complex, burdensome or inconsequential.  Perhaps these cases, too, could be sent to the Federal Circuit, so that the regional federal appellate courts would be left to handle only the extraordinarily interesting cases that appellate judges anticipate receiving when they take their oath of office.

Mark Lemley of Stanford agrees that immigration proposal would be bad for the CAFC:

Patent lawyers ought to be concerned about this. Right now, patents are the focus of the court’s jurisdiction, and the White House has increasingly been appointing patent lawyers to the Federal Circuit. If S.2454 passes, the court will become a political battleground, and there will be strong pressure in both parties to appoint ideologues with a particular view of immigration.

The IPO has also weighed-in on this matter, and provided this letter to Senator Bill Frist. 

According to a source, this section of the Bill has now been removed.


Senate Proposal Would Limit 30-Month Automatic Stay of ANDA Approval

If a generic manufacturer wants to begin selling a pharmaceutical drug before the innovator company’s patent is expired, the generic can file an Abbreviated New Drug Application (ANDA) with the FDA along with a certification that asserts that either (i) the patents listed in the Orange Book are invalid or (ii) the listed patents do not cover the generic’s product.  This certification is known as a “paragraph IV certification.”

Once an ANDA is filed, the patent holder has a strong incentive to act quickly to charge the generic with infringement.  If charges are filed within 45 days, an automatic statutory stay is triggered that delays approval of the generic’s ANDA for thirty-months.

Senators Stabenow (D, MI) and Lott (R, MS) have recently submitted a bill (S.2300) to the Senate that would allow courts to shorten the thirty-month stay based on a “totality of the circumstances, including whether the plaintiff sought to extend the discovery schedule, delayed producing discovery, or otherwise acted in a dilatory manner, and the public interest.  According to the Bill, this is necessary to “prevent[] abuse of the thirty-month stay-of-effectiveness period.”  The Bill would actually require that approval take place at least by the end of thirty-month months, thus preventing any further delay.

The proposal also limits the extent that patent exclusivity can be extended in return for ensuring pediatric safety and effectiveness.

Patent Reform 2005 — It is Over

The Patent Reform Act of 2005 will not be enacted this year.  There is still a possibility of a back-door push to include some provisions in an omnibus appropriations bill, but at this point it is unclear what those provisions would be and whether they would be successful.

The failure of reforms this year has several sources:

  1. Lack of time: In the Senate, the committee handling intellectual property law is the same as the judiciary committee.  This term has been filled with long debates on judicial appointments that left little time for patent reform.
  2. Patents are not yet hot: It is still difficult to get Washington excited about patent law.  Historically, reform measures have taken years to build up enough inertia to get through both the House and Senate.
  3. Overreaching: The proposed reforms ended up being overreaching in a way that pitted major lobbying groups against one another.  This impasse eventually killed the possibility of moving forward with substantive changes this year.

One of the proposed measures would have eliminated the best mode requirement.  Dale Carlson of Wiggin & Dana has written a short article explaining his reasons for keeping best mode. [Article].

House Judiciary Committee Supports Anti-Fee-Diversion Bill

Diversion of excess USPTO fees has been a controversy for some time. (link, link, link).  Almost every year, a bill is introduced to prevent appropriators from using patent fees for other purposes by requiring the PTO to refund any fee revenue that exceeds the agency’s appropriation.  This year’s bill, HR 2791, has now been approved by the Judiciary Committee with broad bipartisan support.

Comment: Despite theoretical support, this bill will almost certainly be quietly killed in the back room by appropriators trying to make-up for the increasing revenue gap of the Federal Government.

Hollywood Proposes That USPTO Regulate Technological Copyright Management

The recording industry is moving quickly toward technological ways to prevent digital copying and thus promote digital rights management (DRM).  One recognized vulnerability is the “analog hole” or more blandly, the analog reconversion issue. 

Analog Hole: When the information is converted to a perceptible analog form, there are no restrictions on the resulting analog signal, and the content can be captured back into digital form with no restrictions. (from Wikipedia).

Oddly, the Hollywood endorsed Analog Content Security Preservation Act Of 2005 would transform the Patent Office (USPTO) into a regulatory agency by giving the agency the job of enforcing a Copy Generation Management System for Analog (CGMS-A).

Read the proposed changes to 35 U.S.C. 101.


Amendment to 271(g)

35 U.S.C. 271(g) makes clear that importation of a product that is made by a patented process is infringement. However, the statute includes limitations that the “product” is no longer infringing if it is either “materially changed by subsequent processes” or is “a trivial and nonessential component of another product.”

KinikKinik v. ITC: In 2004, the Federal Circuit determined that the language of 271(g) does not apply to Section 337 * actions at the ITC. [Opinion]  In that decision, court noted that the statute explicitly limits itself “for the purposes of this title.”

Thus, when a defendant is accused of improper imports under Section 337, he cannot raise the defenses of material change by subsequent processes or trivial component.

Amendment: Now, there is a movement afoot to change this aspect of the law, striking words that limit those defenses to actions under the Patent Act so that they could be applied with equal force at the ITC.

* Section 337: The Tariff Act of 1930 allows administrative relief through the International Trade Commission (ITC) to determine whether there is unfair competition in the importation of products into the US. Section 337 of the act makes infringement of a US patent an unlawful practice in import trade.  ITC actions are extremely fast as compared to traditional patent infringement suits and are often the best way to stop an infringing importer.


Patent Reform Act of 2005

The Patent Reform Act of 2005 is changing as it moves through congress.  In the latest amendment, Representative Smith has eliminated some of the most controversial aspects of the bill, including the injunction provision and the provision that would limit the scope of claims in continuing applications.

The reform measures still include a move to first-to-file; changes to the duty of candor; limitations on infringement and willfulness damages; post grant opposition procedures; and a revised venue statue.



Patent Reform: Redlined Version of Patent Statute

Shashank Upadhye of Eon Labs & I have created a marked-up version of the Patent Act showing changes that would be implemented if the Act was enacted into law.  This document is very useful to help better understand what changes are being made and what sections are left unchanged.

Patent Reform: Congress Choosing Sides

The partisan nature of politics often falls apart on patent reform issues. For instance, IP subcommittee leaders Lamar Smith (R) and Howard Berman (D) both support patent reform efforts — although it is unclear if either support all the provisions in the proposed draft legislation.  Now, the New Democrat Coalition (NDC), a group 43 of “pro-growth” Democratic Representatives, has sent an open letter to Smith and Berman supporting the legislative initiative.  The NDC is specifically supporting some of the most controversial aspects of the legislation — including limits to injunctions and damages.

[W]e urge you to include the following among the many important patent reform items in your legislation:

1) Third Party Submission of Prior Art. . .

2) Injunctions: We believe injunctive relief is an important legal reform element of patent reform and we encourage the Committee to take aim at those who seek to abuse the patent system for profit.

3) Treble Damages: . . . this legal standard should be revised. While courts should be able to assess higher damage amounts when a defendant’s actions warrant, treble damages should be limited to those cases where intentional or egregious conduct warrants a punitive measure of damages.

4) Apportionment of Damages: . . . Today, complex products such as semiconductors or software programs include thousands of features, many of which are patented.  As these products have become more complex, the old methods for determining the value of infringement have become strained and have led to some unfair results.

From the side of special interests, I see three major coalitions forming:

1) Large high-tech companies, including Microsoft and Intel, with the goal of reducing the strength of patents. These companies have major patent portfolios, but fear small companies and individuals that may develop blocking patents.  This group is also garnering support from denouncers of software patents.

2) Other large patent holders, including Big Pharma, with the goal of strengthening and streamlining patents by changing to a first-to-file system and encouraging a post-grant opposition.

3) Start-ups and individual inventors, with the goal of keeping the status quo.

The question is: where does your company fit into the picture?


Does the Constitution Provide for a Right to an Injunction in Patent Cases?

Summer is almost here — How would you fare on this final exam question:

The Progress Clause (Article I, Section 8, Clause 8) of the U.S. Constitution provides that:

“Congress shall have the power… To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

Using this clause as a basis for analysis:  

  1. Would it be Constitutional for Congress to eliminate the right to an injunction for patent infringement?
  2. Would it be Constitutional for Congress to modify the right to an injunction so that one is only available if the patentee is “making use” of the invention?

Patent Practitioner Organization Supports Certain Patent Reform Measures, Rejects Others

The National Association of Patent Practitioners (NAPP) has provided its comments on the proposed patent reform legislation.  NAPP is primarily made-up of patent agents, and the organization’s viewpoint is seen as an important representation of the views of individual inventors.

In its introduction, NAPP takes-on the flippant usage of the term patent troll.

Some of the rhetoric by proponents of the Patent Act of 2005 has been highly troubling and obscures the debate. . . . A “patent troll” is apparently a derogatory term used by people or entities to refer to an inventor who has the audacity to assert a patent against them.  Such usage is an attempt to apply colored language, in a mindless way, to attack the entire < ?xml:namespace prefix ="" st1 />U.S. patent system. . . . To the extent that the term is used to derogate inventors who do not develop corporate structures or manufacture products, NAPP believes that inventors who merely invent but do not manufacture products – which, after all, includes most university and government researchers – do not deserve epithets or less patent protection.  Finally, to the extent that the term is used to refer to people who try to enforce invalid patents, NAPP believes that there are sufficient existing disincentives against such practices.

With regards to the individual provisions, NAPP supports post-grant opposition proceedings and the proposed changes to the duty of candor procedures.  However the organization also has stated quarrels with the following provisions:

First-to-File: This is a controversial issue. “Congress should not be fooled into thinking that this proposal has become less controversial or more accepted over time.”  Practically, this change makes things difficult for a patent practitioner who operates with a backlog of cases.  NAPP expects that the provision would decrease patent disclosure quality because practitioners will rush to file the documents. This increases the opportunity for attorney-malpractice.

Limits on Broadening Claim Scope: This “is an ill-conceived, poorly worded, and unworkable proposal. . . . NAPP strongly opposes this provision.” 

Universal 18–Month Publication: NAPP is against universal publication. One problem is that it would prevent “applicants from adopting the strategy of trying to get a patent and relying on trade secret protection as a fall-back if satisfactory patent protection cannot be secured.”

Inter Partes Reexamination Estoppel: NAPP is against removal of the provision that prevents a patent challenger from first bringing (and losing) an inter partes reexamination request challenging validity, then challenging validity of the same patent again in a court proceeding. [UPDATED TO FIX CORRECTION]

Limiting Damages to Components: This would just result in claim drafting mischief.

. . .



PATENT REFORM: Quick highlights from the Senate hearings.

The Senate Intellectual Property subcommittee held hearings on Monday, April 25, 2005 to discuss patent reform.  Some highlights:

  • Jon Dudas, Director of the Patent Office believes in the goal of “educating the world on the importance of patents.”  I believe that a major part of this should be to restore the mystique of the American inventor/entrepreneur.
  • On behalf of the AIPLA, Michael Kirk shot down BSA proposals to limit the availability of injunctive relief and the size of damage awards.  Kirk also mentioned that Congress should consider repealing 35 U.S.C. 271(f).
  • David Simon from Intel promoted changes to the notion of when an injunction should be granted.  In his viewpoint, there should be “a return equitable principles to determine whether an injunction should be granted.”

PATENT REFORM: House and Senate to Hold Hearings this Week

House Subcommittee on the Courts, the Internet and Intellectual Property, chaired by Congressman Lamar Smith (R Tex) has released a patent legislation discussion draft that includes a number of proposed patent reform measures.  The House Subcommittee is scheduled to hold an oversight hearing on the discussion draft on Wednesday, April 20, 2005 at 4:30 PM. [Link].  The witness list includes J. Jeffrey Hawley of Eastman Kodak testifying on behalf of the Intellectual Property Owners Association (IPO); Richard J. Lutton of Apple, testifying on behalf of the Business Software Alliance; Jeffrey Kusham, testifying on behalf of Genentech; and William LaFuze of the ABA.  In a parallel action, the Senate’s newly formed Subcommittee on Intellectual Property is scheduled to hold a hearing on the patent system April 21. [Link]. [NOTE — Strong indications are that the Senate will postpone the hearing to April 25].


PATENT REFORM: Injunctions Only When Money Is Not Enough

This post is part of our continuing series discussing a US House of Representatives working draft of patent legislation, by Marcus Thymian, Jennifer Swartz, and Dennis Crouch.

The current patent statute (35 USC §283) allows courts to grant injunctions to prevent violation of patent rights, but provides little guidance, specifying only that injunctions be "in accordance with the principles of equity."  The terms of the injunctions need only be "as the court deems reasonable."

The proposed statute would keep the current language intact, but would add another section spelling out the grounds for granting such injunctions.  Under the new language, "a court shall not grant an injunction unless it finds that the patentee is likely to suffer irreparable harm that cannot be remedied by the payment of money damages."  In making this finding, the court is not to presume the existence of irreparable harm, but is instead required to "consider and weigh evidence" relating to equitable factors.  One of these factors is "the extent to which the patentee makes use of the invention."

One result of the proposed new language is that, in a preliminary injunction determination, a reasonable likelihood of success on the merits would no longer lead to a presumption of irreparable harm.  The concept of "irreparable harm" has been extensively adjudicated; that body of case law would seem to remain largely relevant in making the determination called for by the proposed statute.

PATENT REFORM: Overturn Eolas v. Microsoft

This post is part of our continuing series discussing a US House of Representatives working draft of patent legislation, by Marcus Thymian, Jennifer Swartz, and Dennis Crouch.

In the recent case of Eolas v. Microsoft, the Court of Appeals for the Federal Circuit expanded the scope of Section 271(f) – a section that creates a cause of action for infringement due to foreign sales when a component of a patented invention is supplied from the U.S., knowing that the component will be combined in an infringing manner outside the U.S.  The court ruled that the statute (i) had no tangibility requirement and (ii) was not limited to apparatus claims.

The proposed legislation would make it clear that a component "is a tangible item that is itself combined physically with other components to create the combination that is alleged to infringe."

This change would essentially overrule Eolas v. Microsoft.

PATENT REFORM: Proposed Changes Allow Assignee to File Patent Application

This post is part of our continuing series discussing a US House of Representatives working draft of patent legislation, by Marcus Thymian, Jennifer Swartz, and Dennis Crouch.

Under the current statute, an employer has quite a bit of trouble filing a patent application when the inventor refuses to sign a declaration or is otherwise unavailable.

In order to file the application without the inventor’s help, the statute (35 U.S.C § 118) requires a proof that such action is “necessary to preserve the rights of the parties or to prevent irreparable damage.”

The proposed changes make it easier for the company to file the application without the inventor’s assistance.  Specifically, the proposal allows an assignee (or a person owed an obligation to assign) to apply for a patent after showing that the action is “appropriate.”

PATENT REFORM: House IP Subcommittee Prepares Sweeping Patent Law Changes

The attached legislative proposal was prepared by the House Subcommittee on Intellectual Property chaired by Congressman Lamar Smith (R Tex).  Although the proposal is merely a discussion draft at this point, it is expected that a parallel Bill will be introduced within the next few days.  The Senate’s newly formed Subcommittee on Intellectual Property is scheduled to hold a hearing on the patent system April [25th].  It is quite possible that this proposal will serve as an agenda for the Senate hearings.

The proposed legislation includes changes to:

Over the past year, the AIPLA, IPO, Microsoft, and others have all been beating the patent reform drum — each with a separate agenda.  This proposal appears to be an amalgamation of all the proposals — with enough controversial points to get most everyone up in arms. 

Over the next few weeks, Marcus Thymian, Jennifer Swartz, and I will discuss the various sections of the proposal in a series of posts.

Congress Discusses Which Court Should Hear Patent Cases

The AIPLA is supporting a measure to legislatively overrule the 2002 Supreme Court case of Holmes Group v. Vornado.  The House Subcommittee on Courts, the Internet, and Intellectual Property is holding a hearing today to discuss the matter. 

Specifically, the AIPLA argues that the holding will allow regional circuits and even state courts to begin to hear patent counterclaims.  This scenario was suggested by the Indiana Supreme Court ruling in Green v. Hendrickson Publishers, Inc., 770 NE2d 784, 63 USPQ2d 1852 (< ?xml:namespace prefix ="" st1 />Ind. 2002).  In moderation, the AIPLA believes that if patent claims are raised in a compulsory counterclaim then the Federal Circuit should have jurisdiction.  On the other hand, if the patent claims are raised in a permissive counterclaim then the regional circuit or state court should have jurisdiction. 

The Subcommittee hearing is scheduled for 3:30 p.m. Eastern and will be broadcast over the Internet here.  Those testifying include Edward Reines on behalf of the Federal Circuit Bar Association; Professor Arthur Hellman from the University of Pittsburgh School of Law and expert on the structure of the Courts; Sanjay Prasad, Chief Patent Counsel for Oracle Corporation, and Meredith Martin Addy from Brinks Hofer.

Although the cameras would normally be focused tightly on the patent hearing, as Matthew Buchanan points out, MLB is also testifying today on the Hill.


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