UseNet is Prior Art

By Dennis Crouch

Suffolk Tech v. AOL and Google (Fed. Cir. 2014)

This is a prior art case. Suffolk’s patent application was filed back in 1996, but it turns out that the invention was described in a 1995 UseNet newsgroup post posted by a college student. The question on appeal is whether that posting counts as prior art under 35 U.S.C. 102(a) (pre-AIA).

Under the statute, a patent is invalid if “(a) the invention was … described in a printed publication … before the invention thereof by the applicant for a patent.” Courts have repeatedly found that online content fits within the definition of printed publication. Rather, the touchstone question is whether the material was sufficiently publicly accessible. Public accessibility looks to the ability of persons who would be interested or skilled in the subject matter to locate the reference using only reasonable diligence. If a reference is sufficiently disseminated at time of original publication then the ability to later locate the reference is irrelevant.

Today, UseNet materials are indexed by various search engines and would clearly be considered prior art. In 1995 the indexing was not so strong, but the appellate panel here affirmed that the postings clearly fall within the scope of printed publications. For that legal conclusion, the court relied upon a handful of facts:

  • The record indicated that those of ordinary skill in the art were using the UseNet newsgroups in 1995, including Suffolk’s own technical expert.
  • Although not fully indexed, the UseNet group was structured in a hierarchical manner that would have allowed someone interested in the topic to identify the particular group and read the posts.
  • The post in question resulted in at least six responses in the week following the publication – indicating that the post was likely sufficiently distributed at publication.

Invalidity affirmed.

The case was discussed in an earlier Patently-O Posting titled Structuring a Privateering Contract (2012).

= = = =

Note – although this case was decided under pre-AIA rules, its holding should apply equally to the restructured Section 102 that also identifies “printed publications” as a form of prior art.

Guest Post: Microsoft v. i4i – Is the Sky Really Falling?

By Paul F. Morgan

The forthcoming Supreme Court decision in Microsoft v. i4i, case number 10-290, seems likely to eliminate the Federal Circuit's judicially imposed "clear & convincing evidence" requirement for invalidating patents, and thus jury instructions thereon, at least for prior art not of record in the patent application file. 

Typical of some of the frightening projections is the January 1, 2011 "Law360" article in which Matthew M. Wolf, a Howrey LLP partner, is quoted as saying that: "it will radically alter the nature of trials in the patent world and will apply to every patent case" and that "if juries are told that the standards are the same for invalidating patents as for infringing patents, there will be a lot more defence verdicts and we are going to see fewer defendants desirous of settlement."

That is, it is argued that this result would flow from patent invalidity challenges having the same "preponderance of the evidence" standard as for proving patent infringement.  Technically, that might become the case.  But how significant would this change be in reality?  

First, more than 97% of patent suits are settled before trial with no judicial validity test.  Of the small percentage of patent cases that do go to trial, the vast majority are decided or settled there or on appeal on non-infringement, not on invalidity.  Considering the many good reasons why the vast majority of accused or actual defendants are willing to settle rather than risk the very high costs and uncertainties of patent litigation, even against numerous dubious troll suits, how much is this one forthcoming change likely to affect patent litigation and settlements overall?

The test is, would this change really dramatically affect anticipated jury decision-making reality?  [Because patent invalidity is rarely decided other than by juries, such as on summary judgment motions, in view of disputed facts.  USPTO patent reexamination standards would not be affected at all by this decision, and are usually delayed too long by the USPTO to be helpful anyway.] 

Removing this higher evidentiary burden might indeed affect some unknown relatively small number of future post-trial JMOL and Fed. Cir. decisions.  But note the relatively small percentage of those based on invalidity as opposed to non-infringement.

So, what is the basis for projecting that the very small percentage of patents now being held invalid by juries would somehow greatly increase due to this one potential change in jury instructions?   [Even if one really believes that juries really do pay close attention to, and fully understand, the typical lengthy jury instructions in a patent infringement suit and are willing split hairs over those instructions.   See, e.g., the length of the  AIPLA model jury instructions.]  Has anyone done a mock jury study to see if leaving out the present jury instruction for "clear and convincing evidence" dramatically changes outcomes?

Could contesting patent validity before a jury realistically become equated to contesting infringement, as alleged?   Attacking the validity of a patent is attacking something granted by the United States Government, while deciding infringement is just considering one private company's arguments against another.  Furthermore, the jury can be shown for emphasis the Government gold seal and blue ribbon on the patent.  Even if the statutory presumption of patent validity could technically be overcome by a mere preponderance of evidence for prior art not of record, the patent owner should be entitled to a jury instruction on the statutory presumption of patent validity.  [Which could be contrasted to no such instruction for deciding infringement].   For example, as indicated Section 5.1 of the June 23, 2009 "National Patent Jury Instructions" and its "Committee Note," presently courts may optionally combine the two existing defense burdens into a single jury instruction that the accused infringer "bears the burden of proving that it is highly probable that the claims are invalid." [Likewise, some other model patent jury instructions.]  However, the express "Committee Note" rationale for that is a presumption that "instructing the jury on the presumption in addition to informing it of the highly probable burden of proof may cause jury confusion as to its role in deciding invalidity. This single instruction therefore omits any reference to the presumption of validity. Some courts, however, follow the more traditional approach, and instruct the jury on the presumption. Both approaches appear consistent with Federal Circuit law."  Thus, if the "clear and convincing evidence" burden is removed, this "highly probable" instruction would have to be removed, and this present rationale for not instructing a jury on the statutory presumption of patent validity would seem to disappear?  

The other public scare story is that this decision will lead to a flood of additional prior art citations in patent applications.  That also lacks factual credibility.  The already-existing fear of personal "inequitable conduct" accusations is far more motivating than the mere possibility getting a slightly better jury instruction.  Furthermore, few applicants would be willing to pay for a much more costly prior art search to add much more art to an IDS just for that remote reason, and also to risk being accused of not having actually read that art in making assertions in claim prosecution.

Whether as a matter of public policy this anticipated change is good or bad for patent law and technical or economic progress is not the subject here.  Even if the extent of the potential impact were factually supported, it may not be very relevant to this Supreme Court decision.   As understood, this case is being contested primarily on to whether or not there is a proper legal basis and/or precedent for the Federal Circuit to have imposed this additional, non-statutory, evidentiary burden for patent litigation.  It is argued that that is inconsistent with modern Supreme Court evidentiary rules for civil cases in general and inconsistent with the evidentiary rules for pre-Federal-Circuit patent suits in the other federal circuits when they were deciding patent cases.  [So it is surprising that this issue has not been this contested before.  Presumably due to most defendants waiving it by failing to object to this jury instruction?]  

The recent decisions controlling the evidence for and/or reducing patent infringement damages recoveries seem to me far more likely to impact patent licensing and settlement negotiations than Microsoft v. i4i.  See Uniloc USA, Inc. v. Microsoft Corp., (Fed. Cir. Jan. 4, 2011),  Lucent v. Gateway (Fed. Cir. 2009), the two E.D. TX D.C. decisions in which Judge Randall Rader sat by designation, Cornell v. HP (March 2009) and IP Innovation v. Red Hat and Novell (March 2010), and Judge Ward's reduction of a jury award of $52 million in LaserDynamics v. Asus Computer International  down to only $6.2 million.

Statutory Bar Prior Art in the Nonobviousness Analysis

I am continually troubled with disconnects between the text of 35 U.S.C. § 103(a) and its application by the courts. 

Section 103(a) defines the doctrine of nonobviousness and reads (in part) as follows:

(a) A patent may not be obtained . . . if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. . . .

A plain reading of the statute that considers the obviousness of an invention “at the time the invention was made.”  In its 1965 Foster decision, the Court of Customs and Patent Appeals (CCPA) made clear that “the existence of unobviousness under that section, as a necessary prerequisite to patentability, we reiterate, must be determined as of 'the time the invention was made' without utilizing after-acquired knowledge.”  343 F.2d 980 (CCPA 1965).

Despite that seeming clarity, in its obviousness analyses, the Foster Court (and subsequently, the CAFC) has given full 103(a) consideration to post-invention activities that qualify as prior art under Section 102(b).  The justification for this interpretation appears to come in the form of an estoppel that blocks inventors who “sleep on [their] rights more than a year after the invention has become entirely obvious to the public.”  Foster indicated that any other interpretation of the statute would be an interpretation that “Congress could not possibly have intended in view of its express indication that section 102(b) is merely a continuation of the prior law.” 

The leading opinion on-point is likely In re Corcoran, 640 F.2d 1331 (CCPA 1981) which was written by Judge Rich.  In that decision, the court held that the application of 102(b) prior art in 103(a) rejections “finds its statutory base in both of those sections.”  See also Lough v. Brunswick Corp., 86 F.3d 1113, 1121 n.5 (Fed. Cir. 1996); Baker Oil Tools v. Geo Vann, Inc., 828 F.2d 1558, 156 (Fed. Cir. 1987) (what was offered for sale before the critical date becomes a "reference under section 103 against the claimed invention").

Although the weight of precedent is on the side of the current rule, the current statutory-language-focused Supreme Court just might have a point of view.  Let me know if you get a test-case going.

See also, Rethinking the Scope of Prior Art in Obviousness Cases.

AstraZeneca v Apotex: Affirmance of a Preliminary Injunction

By Jason Rantanen

AstraZeneca LP v. Apotex, Inc. (Fed. Cir. 2010)
Panel: Rader, Bryson (dissenting in part), Linn (majority author),

Contrary to popular opinion, it's still possible to obtain a preliminary injunction in a patent case – it's just very difficult.  Astrazeneca v. Apotex provides an example of an affirmed preliminary injunction, and is significant for that reason alone.  It also raises some interesting inducement issues relating to intent that I'll discuss in a separate post.

This case revolved around AstraZeneca's budesonide inhalation suspension drug product, which consists of a vial containing a single dose of budesonide suspended in a sterile liquid.  The drug is administered by squeezing the entire contents of the vial into a jet neubulizer, then inhaling the resulting mist through a mask attached to the nebulizer.  Because budesonide is an inhaled corticosteroid, the FDA requires that the label include a warning instructing patients to "titrate down" to the lowest effective dose of the medication to avoid any adverse effects from excessive use of the medication. 

The two patents at issue, Nos. 6,598,603 and 6,899,099, both contain method claims covering the once-daily use of the nebulized dose of a budesonide composition and product claims covering AstraZeneca's drug product kit.

Apotex sought approval to market a generic version of AstraZeneca's drug product.  As an ANDA applicant, it was well aware of AstraZeneca's patents, and sought to avoid the once-daily method claims by removing any mention of once-daily dosing from its labels.  While it succeeded in part, the FDA nevertheless required Apotex to keep the titration warning language in the generic product's label.

During the preliminary injunction proceedings, Apotex raised two principal arguments in response to the method claims.  First, it contended that they were anticipated; second, it contended that its distribution of the generic version of the drug would not induce infringement of AstraZeneca's method claims.  The district court rejected Apotex's arguments, and granted a preliminary injunction enjoining Apotex from marketing its product.

Note: The district court agreed with Apotex that the kit claims were invalid.  On appeal, the panel affirmed that determination. 

Apotex's first anticipation argument, involving a prior art patent, turned on a question of claim construction: whether the term "budesonide composition" encompassed budesonide encapsulated in liposomes (the '603 patent teaches dispersing budesonide in a solvent, either as a solution or a suspension that may include liposomes as an excipient).  The majority agreed with AstraZeneca's position, focusing on the discussion contained within the specification and buttressing its conclusions with extrinsic evidence (in this case, expert testimony).  Judge Bryson, dissenting on this point, reached the opposite conclusion: the claim term is not limited to budesonide directly dispresed in solvent, and thus the method claims are anticipated.

Apotex's also argued that a prior art British advertisement for AstraZeneca's product describing it as a twice-daily product anticipated the patents.  The majority again agreed with AstraZeneca that this reference did not anticipate the once-daily method claims, both because it did not disclose once daily dosing and because it was not enabled with respect to that type of dosing.  (Obviousness was apparently not in dispute, as at the time of the earlier reference no one recognized that the product could be administered once per day and still be effective).  Judge Bryson again disagreed, reading the prior art advertisement to suggest the administration of the drug once a day.

Inducement of Infringement
In challenging the district court's finding of inducement of infringement, Apotex focused on the subject of intent, arguing that its instructions did not demonstrate intent to cause the users of its product to engage in once-daily dosing and that it lacked specific intent to cause infringement of Apotex's patent.  The Federal Circuit rejected these arguments, affirming the district court's conclusion that the downward-titration instructions would necessarily result in some users engaging in once-daily dosing and noting that Apotex was well aware of the infringement problems raised by once-daily dosing, yet chose to proceed nonetheless.

Preliminary Injunction "Substantial Question of Invalidity" Standard
Although not playing a major role in the ultimate outcome of this appeal, the court's articulation of the "likelihood of success" standard, along with the subsidiary "substantial question of invalidity" element, is noteworthy given the divergent views on this subject, such as those expressed by Judges Newman and Gajarsa in Abbott Laboratories v. Sandoz, 544 F.3d 1341 (Fed. Cir. 2008).  AstraZeneca v. Apotex follows the approach of requiring a seemingly high threshold for patentees/low threshold for defendants on this issue:

For a patentee to establish that it is likely to succeed on the merits, it “must demonstrate that it will likely prove infringement of one or more claims of the patents-in-suit, and that at least one of those same allegedly infringed claims will also likely withstand the validity challenges presented by the accused infringer.”, 239 F.3d at 1351. When reviewing the grant of a preliminary injunction, this court “views the matter in light of the burdens and presumptions that will inhere at trial.” Titan Tire Corp., 566 F.3d at 1376 (citation omitted). A preliminary injunction should not issue if an alleged infringer raises a substantial question regarding either infringement or validity, i.e., the alleged infringer asserts an infringement or invalidity defense that the patentee has not shown lacks substantial merit. Genentech, Inc. v. Novo Nordisk A/S, 108 F.3d 1361, 1364 (Fed. Cir. 1997).

Examiners Ignore Applicant-Submitted Prior Art

Professors Mark Lemley, Chris Cotropia, and Bhaven Sampat recently released a draft of their new article titled “Do Applicant Patent Citations Matter? Implications for the Presumption of Validity.” [Download Here.]

For the article, the trio analyzed the file histories of 1,500+ utility patents issued in 2007 and compared references used in office action rejections with the list of references cited on the patent cover-pages.  The objective was to figure-out the role of applicant-cited prior-art in the examination process.

Findings: Patent examiners rarely rely on applicant-submitted prior-art when making rejections.  Only 13% of the prior art used in office action rejections was applicant-submitted (despite the fact that 74% of cited references are applicant-submitted). Generally, the study found that examiners “effectively ignored” applicant-submitted prior art regardless of how few or how many references were cited; regardless of the timing of the IDS filing; and regardless of whether the submission included an EPO search reports identifying the references as “X-references.”

Implications: The authors suggest several implications of their findings: (1) That it likely does not make sense to find inequitable conduct when an applicant withholds prior art (since the art would not have been used in a rejection anyway); (2) That the presumption of validity associated with patents may be too strong; and (3) That studies based on patent citations likely lack merit.

Notes: I have privately e-mailed Professor Lemley with several comments on the article. Patent prosecutors will not likely be surprised that US examiners tend to rely on their own search results. However, I was surprised at the extent to which they found that this occurs.  As a matter of patent office policy, I would think that some minor changes could alter these results. For instance, examiners should be given a tool for performing text-searches that are limited to submitted (and identified) prior art references.  The office may also want to educate examiners on how to read European search/examination reports.

There are several rational reasons for examiners to cite their own prior art. Because of the backlog, PCTs, and provisional applications, US examination often begins several years after the application was originally filed.  During that interim, many references become available that were not known at filing.  Thus, it is not surprising that applicants rarely cite 102(e) prior art, but examiners cite loads of it.  There is some reason to think that this “newer” prior art is probably better because of technological developments.  It may also be true that the applicant and examiner references are cited for different purposes — namely, applicants cite references that are generally relevant to the invention while examiners are looking for references that teach each particular element in the filed claims.  A third issue is that applicants tend to modify their claims during prosecution. That modification may make their originally cited art less relevant. 

In the words of Lawrence Solum: Download it while its hot.

Ring Plus v. Cingular Wireless

By Jason Rantanen

Although the court ultimately reversed the determination of inequitable conduct based on a lack of intent, its discussion of materiality is significant because the misrepresentation at issue occurred in the patent itself, in the form of statements about a prior art reference.  Prosecutors may want to take special note of this opinion in crafting their Background of the Invention sections. 

Ring Plus, Inc. v. Cingular Wireless Corp. (Fed. Cir., August 6, 2010)
Panel: Lourie, Gajarsa and Moore (author)

Ring Plus is the assignee of Patent No. 7,006,608 (the '608 patent), which relates to a software based algorithm and method for generating and delivering messages over a phone line that replace or overlay a ring-back signal.

After granting summary judgment of noninfringement, the district court held a bench trial on the unenforceability of the '608 patent.  Following the bench trial, the district court concluded that the '608 patent was unenforceable due to inequitable conduct.  Ring Plus appealed both determinations, along with the denial of its motion to disqualify Cingular's counsel. 

Inequitable conduct: Materiality but no Intent
The district court's inequitable conduct determination was based on two alleged misrepresentations concerning the substance of two prior art references, Strietzel and Sleevi.  The district court found that the first misrepresentation was in the Background of the Invention section of the '608 patent, which asserted that both references proposed hardware based systems but no software to operate those systems.  Contrary to this assertion, the district court found, one of skill in the art would have understood the references to disclose software-based algorithms.1 

The panel agreed that this was a material misrepresentation.  Although neither reference explicitly disclosed software, the panel could not say that the district court clearly erred in finding that a person of ordinary skill in the art would have understood the references to disclose software-based algorithms. 

In arriving at the conclusion that the statement about the contents of the prior art constituted a misrepresentation, the panel rejected the contention that it was merely attorney argument.  The court did not address this issue in any depth, merely stating that because the statement was a misrepresentation, it "was outside the boundas of permissible attorney argument."  Slip Op. at 9.

Comment: I am a troubled by the court's cursory statement on this point because of the ambiguity it creates.  These types of sweeping assertions, made without addressing the substance of the argument or citing relevant authorities, are the kinds of things that are likely to tie attorneys and judges in knots.  Indeed, the court's quotation from Rothman is particularly perplexing, as Rothman reached the opposite conclusion on similar facts.  At a minimum, one would expect the court to explain why Rothman does not apply.

Ultimately, however, the panel concluded that Cingular had failed to present clear and convincing evidence of intent to deceive.  In arriving at this conclusion the court noted that the references were ambiguous as to operating software, and the prosecuting attorney's testimony gave rise to the inference that the applicants believed that the two references did not disclose software for operating a telephone system.  Because this inference was as reasonable as the district court's inference of deceptive intent, the district erred in its finding of deceptive intent.

Other holdings
The panel also addressed Ring Plus's challenge to the district court's construction of two claim terms, which formed the basis of the noninfringement ruling.  The court affirmed the district court's construction, relating to the sequence of steps in the '608 patent.  In addition, the court rejected Ring Plus's argument that Cingular's counsel should have been disqualified for ex parte contact with a Ring Plus director and officer.  The court concluded that there was no evidence of impropriety under Fifth Circuit law.

1The district court also found that the applicants made a misrepresentation about these references during prosecution; the panel concluded that this statement was not a misrepresentation.

Wyers v. Master Lock

Is "obviousness" a question of law or fact?  The rote answer is that it's both: it's a question of law based on underlying findings of fact.  Drawing that line, however, can be tricky, especially when the jury issues a general verdict.  In addition to addressing this issue, the case discussed below is also noteworthy due to its commentary on KSR on the subject of  motivation to combine. 

Wyers v. Master Lock Co.
(Fed. Cir. July 22, 2010)
Wyers involved three patents relating to trailer hitch locks.  Trailer hitch locks are mechanisms used to secure trailers to towing vehicles.  It was undisputed that the prior art disclosed the use of dumbbell-shaped locks for this purpose, so the case turned on the the patentee's modifications to these types of locks.  The following images illustrate the prior art:

Wyers 1 Wyers 2

Wyers' patents claimed dumbbell-shaped locks with two additional elements: a series of sleeves that could be placed over the center section (the "shank") in order to increase its diameter, and an external seal designed to keep dirt out of the locking mechanism.  The only issue before the jury was whether it was obvious to add these two elements to the prior art locks.

The jury concluded that it was not, and issued a general verdict of nonobviousness. After the district court denied Master Lock's motion for Judgment as a Matter of Law, Master Lock appealed. 

Opinion of the Court
Drawing heavily on KSR, the Federal Circuit concluded that the patents were obvious as a matter of law.  The court considered each of the factual questions before it: whether the art was analogous, whether there was sufficient motivation to combine the reference, and the secondary considerations of nonobvious, and concluded that none favored the patentee.

In reaching this conclusion, the Federal Circuit gave no deference to the jury.  On each issue of fact, the panel found that no evidence supported nonobviousness.  For example, when addressing the issue of whether the prior art was analogous, the court reasoned that it was "clearly within the same field of endeavor as the sleeve patents," and was pertinent as a matter of law.

Particularly interesting, however, were the panel's views on motivation to combine.  While recognizing this as an important aspect of the obviousness inquiry, the panel applied the "common sense" approach outlined in KSR:

"We conclude that it was a matter of common sense to combine the Down patent with the prior art barbell locks in order to arrive at the invention claimed in the ’115 and ’426 patents, and that one of ordinary skill in the art would have had a reasonable expectation of success in doing so."

Slip Op. at 23. Furthermore, "where all the limitations of the patent were present in the prior art references, and the invention was addressed to a 'known problem,' 'KSR … compels the grant of summary judgment ofobviousness.'"  Id. at 17.  Such an approach is particularly appropriate when the technology is "easily understandable." 

Finally, on the issue of secondary considerations, the court concluded that, even if Wyers had established the requisite nexus, it would have been insufficient:

Moreover, secondary considerations of nonobviousness—considered here by the district court—simply cannot overcome a strong prima facie case of obviousness.

Slip Op. at 28

Judge Linn concurred with the opinion, but wrote separately to warn parties of the dangers of general verdicts.  He noted that although the law permits general verdicts, verdicts involving special interrogatories are encouraged in the obviousness context due to the mixed question of law and fact.  He further noted that, while the court must presume that the jury resolved the underlying factual disputes in favor of the verdict winner when there are no special interrogatories,

"[b]ecause there is no way to determine from a general verdict on obviousness the specific findings of fact made by a jury on the factual questions underlying its verdict, the court in examining the first part of the obviousness question is left to infer whether substantial evidence existed from which the jury could have made the factual findings necessary to support the verdict. Here, the majority examined the record and after considering the factual inferences concluded that support was lacking and that the claims at issue would have been obvious as a matter of law."

Slip op., concurrence at 4-5.  In other words, when a general verdict is give, the Federal Circuit has to attempt to reconstruct the underlying findings of fact.  Here, it could not discern anything that might reasonably have been in dispute, and thus judgment as a matter of law was appropriate. 

Avid ID v. Crystal Import: En Banc Request Denied On Issue of Inequitable Conduct by Non-Inventor CEO

By Dennis Crouch

In Avid ID, the Federal Circuit denied Avid's motion for en banc rehearing on the issue of whether inequitable conduct exists when the non-inventor, non-attorney CEO of a company applying for a patent failed to submit information to the USPTO about pre-filing but non-invalidating trade-show exhibit of a prior version of the patented product. Judge Newman dissented.   

* * *

Avid Identification Systems v. Crystal Import Corp. (Fed. Cir. 2010).

In its original decision in this case, the Federal Circuit held that the president of Avid ID Systems was "substantially involved" with the prosecution of the asserted patent and therefore was subject to the duty of disclosure. The court went on to find that the president had failed that duty by failing to advise the PTO of a trade-show demonstration that occurred more than one-year before the patent application was filed. The inequitable conduct decision was important to the case because the trade-show demonstration of a prior product did not leave the patent invalid under the statutory bar of 102(b)/103(a).   

Avid requested rehearing en banc and that its case join with the pending TheraSense en banc case or, in the alternative, to stay the rehearing decision until after Therasense is decided. The Federal Circuit has denied Avid's motion for rehearing en banc.

Judge Newman dissented from the rehearing denial and would have stayed the case to await changes in the law of inequitable conduct:

The law as applied in Avid is subject to conflicting precedent, a conflict whose resolution is reasonably likely to alter the result. Thus it is prudent, and just, to hold Avid’s petition while the law is clarified. The court today has declined to do so, rendering the subject patent permanently unenforceable, although the patent was found valid on the same prior art that is the basis for its unenforceability.

. . .

This court held that Dr. Stoddard’s demonstration during the Livestock Committee trade show of what the panel calls “some of Avid’s technology,” and Avid calls a “precursor product,” was material to patentability and that Dr. Stoddard was required to assure that the patent examiner was informed. According to the panel opinion, the district court “found that the precursor product, while not invalidating, reflected the closest prior art, and thus was highly material to patentability.” Avid Identification Sys., Inc. v. Crystal Import Corp., 603 F.3d 967, 973 (Fed. Cir. 2010)(“Avid II”). While “closest prior art” has been discussed in the context of whether certain information is cumulative of that already presented to an examiner, see, e.g., AstraZeneca Pharms. LP v. Teva Pharms. USA, 583 F.3d 766, 773-75 (Fed. Cir. 2009), it has never been the law that information is “highly material” simply because it is “closest.” It is not disputed that whatever was demonstrated was not an invalidating disclosure of the patented invention, and not a sale or offer to sell the patented invention, for the jury found that the demonstration at the Livestock Committee was not invalidating. See Avid I, 2007 WL 2901415, at *1.

Dr. Stoddard, who is the president of Avid, is a veterinarian whose principal occupation is running an animal hospital; he is not an electronics engineer and not a chip designer and not an inventor of the patented device and not a lawyer. See Avid II, 603 F.3d at 970. On the undisputed fact that the challenged information is not invalidating, the court’s holding of inequitable conduct is sufficiently questionable to warrant a stay until this court resolves the larger issues before us, including the en banc Order’s query: “Should a finding of materiality require that but for the alleged misconduct, one or more claims would not have issued?” Order, 2010 WL 1655391, at *1. It is at least possible that the court will answer this question in the affirmative. Although I do not venture to guess how Therasense will fare overall, it is not unreasonable to expect that it may affect the Avid decision.

The Avid panel applied the former Rule 56 standard of materiality as stated in J.P. Stevens & Co. v. Lex Tex Ltd., 747 F.2d 1553, 1559 (Fed. Cir. 1984), although this standard was abandoned by the PTO in 1992. The information here criticized does not appear to violate the current Rule 56 standard, and Dr. Stoddard is not within the cadre upon whom is placed the obligation of understanding the patent law, as Judge Linn explained in his dissent. I must, respectfully, dissent from the court’s refusal to stay this appeal in view of the en banc proceeding in Therasense.


Federal Circuit Extends the Scope of 102(e) “Secret Prior Art”

In an important case, the Federal Circuit has expanded the scope of so-called 102(e) “secret prior art.” Under the decision, a US patent or published application will be considered prior art as of the filing date of its qualifying provisional application.  The case is important because of the large number of provisional patent applications being filed each year.

* * * * *

In re Giacomini (Fed. Cir. 2010)

Giacomini’s patent application was filed on November 29, 2000.  In his search, the examiner found U.S. patent 7,039,683 (the “Tran patent”) and asserted that patent as prior art over Giacomini.  The Tran patent application was filed in December 2000 (after Giacomini) and issued in 2006. However, the USPTO asserted that the patent should be considered 102(e) prior art because it claims priority to a U.S. provisional application that was filed in September 2000.

35 U.S.C. 102(e)(2) bars patentability if

the invention was described in . . . a patent granted on an application for patent by another filed in the United States before the invention by the applicant for patent, except that an international application filed . . . shall have the effects for the purposes of this subsection of an application filed in the United States only if the international application designated the United States and was published under Article 21(2) of [the PCT] in the English language.

The question in this case is whether the 102(e) priority date for prior art reaches-back to the filing date of the provisional application. On appeal, the Federal Circuit agreed with the USPTO that the provisional filing date is the 102(e) priority date.

In the 1968 case of In re Klesper, the Federal Circuit predecessor court (the CCPA) held that the 102(e) follows the prior precedent of treating a prior art disclosure found in an issued patent as being disclosed as of the “filing date of the earliest U.S. application to which the patent is entitled, provided the disclosure was contained in substance in the said earliest application.”  The Federal Circuit agreed that this provision applies equally to provisional patent applications “ so long as the provisional application [provides] written description support for the claimed invention . . . in accordance with Section 119(e).”  Giacomini never argued that the provisional failed to describe the invention found in the prior art.

Therefore, the Tran patent “shall have the same effect,” [Citing 119(e)] including a patent-defeating effect, as to the claimed invention as though it was filed on the date of the Tran provisional. Accordingly, Giacomini, who filed his application after Tran filed his provisional application, cannot receive a patent covering the same subject matter under 35 U.S.C. § 102(e).

This decision follows the BPAI’s 2008 precedential of Ex parte Yamaguchi, 61 U.S.P.Q.2d 1043 (BPAI 2008). However, the decision is in tension with the Hilmer doctrine. In re Hilmer, 359 F.2d 859 (CCPA 1966) (a U.S. application’s 102(e) priority date does not extend to its Section 119 foreign filing date). Giacomini had argued that provisional applications should be treated like foreign filings rather than like non-provisionals because the priority statute for provisional applications is also found in Section 119 and becaues provisional applications lack the formality of non-provisionals. 

Note: US Court interpretations of 103(a)/102(e) offer a major difference between US practice and European practice. Namely, in the US secret 102(e) prior art is available to be combined as part of an argument for obviousness while in most European countries, the filing date of prior art is only important for novelty purposes.