The Federal Circuit decides a substantial number of its cases without opinion, but rather simply issues a judgment of “affirmed without opinion.” This procedure began in the late 1980’s and has been relatively noncontroversial. Lately, however, the patent statute has been reconsidered and the process appears to violate Section 144 of the Patent Act.
This case raises an interesting enablement issue. The issue involves how we should interpret patent claims that extend coverege over material that is not enabled. This is an important question because most patent claims are written to literally cover embodiments that are not fully enabled.
Facts: Liebel-Flarsheim’s patent describes a preferred embodiment of a needle holder that includes an associated pressure jacket but do not enable a jacket-free embodiment. The patent claims did not claim (or even mention) the pressure jacket and thus, based on comprising language, were construed to cover injectors regardless of whether they have an associated pressure jacket. Medrad’s accused products do not have the pressure jacket.
Lower Court: The lower court found the patent invalid as not enabled — holding that it would have taken undue experimentation to practice the claimed invention without the pressure jacket.
Argument on Appeal: Liebel argues that "the asserted claims do not recite or require the absence of a pressure jacket and the court improperly focused on such an embodiment." In particular, the question of creating an embodiment without a pressure jacket is not one of "experimentation" but rather additional follow-on innovation.
Appellate Decision: On appeal, CAFC panel found the patent invalid as not enabled.
We have previously construed the claims … such that they are not limited to an injector with a pressure jacket, and therefore the full scope of the claimed inventions includes injectors with and without a pressure jacket. That full scope must be enabled, and the district court was correct that it was not enabled.
…
There must be “reasonable enablement of the scope of the range” which, in this case, includes both injector systems with and without a pressure jacket.
…
The irony of this situation is that Liebel successfully pressed to have its claims include a jacketless system, but, having won that battle, it then had to show that such a claim was fully enabled, a challenge it could not meet. The motto, “beware of what one asks for,” might be applicable here.
Invalidity affirmed.
Notes:
"During the prosecution of the front-loading patents, Liebel removed all references in the claims to a pressure jacket."
I commented earlier on the continued transformation of the Board of Patent Appeals & Interferences (BPAI) from a somewhat secret organization to one that is engaging with and accountable to the public.
With the advent of publication of applications, the BPAI has become a more public body and continues to move toward the goal of providing sound decisions that both adjudicate the particular issues in question and provide further guidance to other applicants and examiners. [LINK].
Now, the Board has begun a new initiative publishing “informative opinions.” While not precedential, these opinions are selected because they are thought to provide useful guidance to both Patent Examiners and Practitioners. BPAI Informative Opinions;
Ex Parte Bilski (BPAI 2006).
The only 2006 opinion on the informative opinion list is Ex Parte Bilski.Bilski is a business method patentable subject matter decision that again flips Ex Parte Lundgren.
The Board held in Lundgren that the “technical arts” test is not a separate and distinct test for statutory subject matter. Although commentators have read this as eliminating a “technology” requirement for patents, this is not what was stated or intended.
Bilski’s patent is directed at a method of managing risk at a reduced cost. The claims at issue are not tied to any physical structure; do not recite a physical transformation or any electrical, chemical, or mechanical act; and could be performed entirely by human beings without any outside aid. In its 71 page opinion, the board determined that the method was not statutory subject matter under Section 101, and prepared for a CAFC hearing:
In questionable cases, we feel that the public interest is best served by making a rejection. The Federal Circuit cannot address rejections that it does not see. . . . It would be helpful if the Federal Circuit would address this question directly.
(1) Mental Steps and Transformation: According to the Board, not every series of steps fit within the process requirement of section 101. A section 101 process necessarily transforms some physical subject matter to a different state or thing. A claim which can be entirely performed by a human can “be statutory subject matter if there is a transformation of physical subject matter from one state to another.” The claims here did not, however, provide any transformation of matter. Since the claim does not require a computer, there is not even an “implicit transformation of electrical signals from one state to another.” The claims do recite a transformation “risk position” — but a non-physical transformation does not count.
(2) Abstract Idea: The Board considers the ‘abstract idea test’ to be a ‘backup’ to the transformation test — noting that “[t]here may be times where it is easier to analyze the subject matter as an abstract idea” In this case, Bilski’s claims are both non-transformative and abstract.
Claim 1 describes a plan or scheme for managing consumption risk cost in terms of a method. It is nothing but an disembodied “abstract idea” until it is instantiated in some physical way so as to become a practical application of the idea.
Furthermore, the claim is also abstract because it covers “any and every possible manner of performing the [conceptual] steps. Thus, it can also be said that the claims ‘preempts’ the concept in the claimed methods.”
(3) Result that is Useful and Concrete and Tangible: If a method is abstract, it cannot have a concrete and tangible result because they are opposites. Concrete and tangible require “some sort of physical instantiation” that is not found here. Likewise, although the claimed method may be useful in the business sense, “a method that has not been implemented in some specific way is not considered practically useful in a patentability sense.”
Concurrence by McQuade:
The quest for a bright line test for determining whether a claimed invention embodies statutory subject matter under 35 U.S.C. § 101 is an exercise in futility. . . . Per se rules or tests, while arguably easy to apply, simply do not afford the flexibility needed to keep pace with new developments in technology and the law.
Considered collectively, these are powerfully persuasive factual indicators (not tests) that the method recited in claim 1 is, at its core, a disembodied business concept representing nothing more than a non-statutory abstract idea. That the “initiating” and “identifying steps recited in the claim are drafted as acts required to be performed is of no moment. Given the full context of the claim, these acts are nominal in nature and merely serve to superficially couch the appellants’ abstract idea in a method or process format.
Inequitable Conduct: DD had used used part of its claimed method to make and sell Dippin’ Dots at a local fair more than one year before filing its application. DD did not disclose that information to the PTO but did disclose information about the product’s market success that occurred after filing.
The CAFC affirmed that those facts properly led to a finding of inequitable conduct — showing both materiality and intent.
The prior sales were clearly were highly material as they served as the basis for invalidating the patent. Intent to deceive was shown (even without a ‘smoking gun’) since DD touted some sales while concealing others.
Walker Process Antitrust Claims: A finding of inequitable conduct does not, by itself, support a finding of ‘common law fraud’ as required by Walker Process. Rather, a showing of fraud requires “a higher threshold showing of both materiality and intent.” Likewise, in these antitrust claims, both materiality and intent must survive on their own merits — without the balancing used in inequitable conduct determinations.
Where the fraud is based on an omission, the appellate panel held that intent must be shown with evidence that is “separable from the simple fact of omission.”
For instance, evidence may establish that a patent applicant knew one fact and presented another, thus allowing the factfinder to conclude that the applicant intended by the misrepresentation to deceive the examiner. That is not the case with an omission, which could happen for any number of nonfraudulent reasons—the applicant could have had a good-faith belief that disclosure was not necessary, or simply have forgotten to make the required disclosure.
Here, there was no additional evidence showing intent — giving the DD the win (on this minor point).
The Difference in proof for inequitable conduct and antitrust claims is discussed as the difference between a shield and a sword.
Weighing intent and materiality together is appropriate when assessing whether the patentee’s prosecution conduct was inequitable. Molins. However, when Walker Process claimants wield that conduct as a “sword” to obtain antitrust damages rather than as a mere “shield” against enforcement of the patent, they must prove deceptive intent independently. The defendants have not done so here to the extent necessary for a reasonable jury to find Walker Process fraud.
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.
Intel and Microsoft v. Commonwealth Scientific (CSIRO) (Fed. Cir. 2006).
Under the Foreign Soverign Immunity Act (FSIA), a foreign state is presumptively immune from the jurisdiction of United States courts. A federal court therefore has no subject-matter jurisdiction over a claim against a foreign state unless the case falls within a specified exception. 28 U.S.C. §§ 1602-1611.
Intel and Microsoft sued the Australian Commonwealth Scientific and Industrial Research Organisation ("CSIRO") for declaratory judgment of non-infringement. CSIRO is Australia’s national science agency and claimed immunity under the FSIA. The district court found jurisdiction, and the appeal was heard on interlocutory review.
Level of Review: Without determining whether to apply CAFC or 9th Circuit law, the appellate panel first determined that the existence of immunity are questions of law that are reviewed de novo.
Commercial Activity: In a question of first impression, CSIRO argued that its extensive patent licensing negotiations should not qualify as a commercial activity exception to the FSIA when those do not result in fully-executed and binding contracts. The CAFC flatly rejected that argument — finding that commercial activity is broadly defined under the FSIA — noting in the Congressional record that "[t]he courts would have a great deal of latitude in determining what is a ‘commercial activity’ for purposes of this bill."
It is possible to extrapolate this case to argue that merely obtaining a U.S. patent is also commercial activity.
CSIRO’s acts of (1) obtaining a United States patent and then (2) enforcing its patent so it could reap the profits thereof—whether by threatening litigation or by proffering licenses to putative infringers—certainly fall within the latter category [of commercial activities]. Indeed, we have expressly recognized, in another context, that "a patentee’s attempt to conduct license negotiations is a commercial activity."
Primos v. Hunter’s Specialties (Fed. Cir. 2006, 05–1001).
Primos owns patents on game calls for hunting. In an infringement suit, a jury found that Hunter’s products literally infringed one patent and infringed another under the doctrine of equivalents (DOE).
On appeal, Hunter challenged the DOE decision arguing both (1) Festo Estoppel and (2) Vitiation. In a surprise boost to the DOE, the CAFC affirmed — finding that the DOE could be asserted.
Estoppel: Hunger argued that a claim amendment made during prosecution created an estoppel that, under Festo, prevented assertion of the DOE. Primos countered that Festo estoppel should not apply because the “amendment bears no more than a tangential relationship to the accused element.”
As the Supreme Court explained in Festo, when a patent claim is amended during prosecution for reasons relating to patentability, there is a presumption that the patentee surrendered all the territory between the original claim limitation and the amended claim limitation. 535 U.S. at 740. There are situations, however, in which a patentee may overcome that presumption. Id. One such situation is when the “rationale underlying the amendment may bear no more than a tangential relation to the equivalent in question.” Id. at 740-41.
Here, Primos had twice amended the claim to: (1) require that the “plate” have “a length” and (2) require that the plate be “differentially spaced” above the membrane. Because “every physical object has a length,” the first amendment did not narrow the scope of the claim. The accused product included a differentially spaced dome rather than a differentially spaced plate as claimed. “Because the accused device’s dome includes the spacing, the amendment was merely tangential to the contested element in the accused device, and thus prosecution history estoppel does not apply to prevent the application of the doctrine of equivalents.”
Thus, this holding implies that Festo estoppel does not apply when the newly added limitation (or term) is found in the accused product.
Vitiation: The Court had streak expanding the vitiation doctrine under the all-elements rule. Here, Hunter asserted that allowing a “dome” to be considered an equivalent to a “plate” would eliminate (or vitiate) that limitation from the claim. The CAFC balked at Hunter’s implicit suggestion that there might be no equivalent for the claimed plate:
Our precedent has recognized that “[t]here is no set formula for determining whether a finding of equivalence would vitiate a claim limitation, and thereby violate the all limitations rule. Rather, courts must consider the totality of the circumstances of each case and determine whether the alleged equivalent can be fairly characterized as an insubstantial change from the claimed subject matter without rendering the pertinent limitation meaningless.” Thus, because Primos’s theory of equivalence (i.e., that a dome is equivalent to the claimed “plate”) does not “effectively eliminate . . . [the ‘plate’ limitation] in its entirety,” it does not violate the all limitations rule.
This case is in line with my alternate theory that vitiation only applies to linkages and noun modifiers.
In a claim construction decision, the Court of Appeals for the Federal Circuit (CAFC) has affirmed the lower court’s exclusion of “semi-rigid” shoe inserts from the claimed “rigid” inserts. In the process, the court noted that “there is a presumption that the same terms appearing in different portions of the claims should be given the same meaning unless it is clear from the specification and prosecution history that the terms have different meanings at different portions of the claims.”[1]
Interestingly, it appears that there was no Markman hearing in this case. (Pacer Report). Yet, the CAFC praised the lower court’s summary judgment decision and its embedded claim construction.[2]
January 10, 2005, the district court granted defendants’ motion for summary judgment of non-infringement. Senior Judge Louis H. Pollak did not issue a separate Markman order; rather, in a carefully-crafted summary judgment opinion, he construed two limitations of claim 1 of the patent and found as a matter of law that neither limitation was present in the accused shoes. . . .
Lawman Armor v. Winner Int’l (Fed. Cir. 2006, 05–1253).
To show infringement, a design patent holder must satisfy two separate tests: (a) the ‘ordinary observer’ test and (b) the ‘point of novelty’ test.
The “ordinary observer” test requires comparison of the two designs from the viewpoint of the ordinary observer to “determine whether the patented design as a whole is substantially the same as the accused design.”
Under the “point of novelty” test, a court must determine whether “the accused device . . . appropriate[s] the novelty in the patented device which distinguishes it from the prior art.”
Regarding points of novelty — Lawman pointed to eight specific points of novelty of its patented design for the sliding hook portion of a vehicle lock. On summary judgment, the district court found that all eight points of novelty could be found in a combination of prior art references. As a consequence, the lower court ruled that the patent was not infringed.
Lawman appealed, arguing that there was no suggestion to combine the references in the art. The CAFC, however, affirmed, finding that, for the point of novelty test, multiple references can be combined without any prior suggestion or motivation for doing so.
What Lawman’s contention comes down to is that the D’621 patent contains a ninth “point of novelty,” namely, the combination in a single design of the eight non-novel “points of novelty” it embodies. This argument is inconsistent with, and would seriously undermine, the rationale of the “points of novelty” test.
ESTs Unpatentable for Failure to Satisfy 35 U.S.C. § 101 Where Function of Underlying Gene is Unknown
by Sherri Oslick, PhD
In an opinion of great import to biotechnology patent law, the CAFC affirmed the decision of the Board of Patent Appeals that denied a patent to five expressed sequence tags (ESTs) — holding that in the absence of an identification of the function of the underlying genes, “the claimed ESTs have not been researched and understood to the point of providing an immediate, well-defined, real world benefit to the public meriting the grant of a patent.” In its opinions, the CAFC endorsed the 2001 PTO Utility Examination Guidelines, holding that Brenner v. Manson applies broadly to the fields of chemistry and biology and that the PTO had not applied a heightened standard for utility of ESTs.
Monsanto, the real party in interest, had asserted that the claimed nucleic acid sequences found their use as research tools, including use in monitoring gene expression by measuring the level of mRNA through microarray technology and in identifying the presence or absence of polymorphism. The CAFC, however, dismissed this argument and affirmed that, without presenting a specific function for the underlying gene, the claimed invention lacked a specific and substantial utility and the application in question therefore also did not meet the enablement requirement of 35 U.S.C. § 112, as it incorporates the utility requirement of 35 U.S.C. § 101.
Following the directive from the Supreme Court in Brenner, the CAFC noted that any invention must have a substantial and specific utility.
Substantial Utility: “an asserted use must show that the claimed invention has a significant and presently available benefit to the public.”
Specific Utility: “an application must disclose a use which is not so vague to be meaningless” and “an asserted use must [] show that the claimed invention can be used to provide a well-defined and particular benefit to the public.”
Applying these principles, the CAFC found that the asserted utilities met neither the substantial nor the specific test. Rejecting Monsanto’s analogy that ESTs are like a microscope, a patentable research tool used to generate data about a sample of unknown properties, the CAFC found the ESTs to be merely a starting point for further research, providing no presently available benefit.
[W]hile a microscope can offer an immediate, real world benefit in a variety of applications, the same cannot be said for the claimed ESTs. Fisher’s proposed analogy is thus inapt. Hence, we conclude that Fisher’s asserted uses are insufficient to meet the standard for a “substantial” utility under § 101.
The CAFC also held that the asserted uses were not specific. Asserting that any EST from the maize genome could perform any of the recited utilities, the CAFC found that Monsanto had failed to assert any utilities setting the five claimed ESTs apart from the 32,000 plus ESTs disclosed in the application or any EST for that matter. The disclosure of such general utilities was “nebulous” and not sufficiently specific.
In dissent, Judge Rader distinguished Brenner and argued that the majority, without supporting scientific evidence, was too quick to render a value judgment that the utility of the claimed ESTs would not provide enough valuable information, that the information gained through the ESTs was too “insubstantial” to merit patent protection. Scientific research, noted Rader, is an incremental process, and ESTs, like a microscope, possess utility, albeit limited to the laboratory setting, as research tools useful in studying other compounds. ESTs, therefore, provide an identifiable benefit to society. Rader argued that the majority failed to recognize the complex nature of scientific discovery, and that “only the final step of a lengthy incremental research inquiry gets protection” under the majority holding. The decision to deny protection to inventions that contribute to the “useful arts” but not to an extent justifying the exclusive right afforded by a patent, contended Rader, is more properly founded in the nonobviousness requirement of 35 U.S.C. § 103 than in the utility requirement of 35 U.S.C. § 101.
This post was written by Sherri Oslick, PhD. Sherri studied chemistry as an undergraduate at Cornell University, bio-organic chemistry as a graduate student at MIT, and biochemistry and molecular biology as a postdoctoral associate at University of Chicago. She practices biotech patent law as a law clerk at MBHB in Chicago. She is an Hon. Howard T. Markey Distinguished Scholar at the John Marshall Law School and will graduate later this year. [oslick@mbhb.com]
SmithKline Beecham Corp. v. Apotex Corp. (Fed. Cir. 2005) (en banc order)
Paxil(R) is a blockbuster drug sold by SmithKline Beecham (SKB). SKB’s patent covering the drug was initially invalidated in an opinion by 7th Circuit Judge Richard A. Posner who sat by designation as a district court judge. On appeal, a Federal Circuit panel (J. Rader) rejected almost all of Judge Posner’s reasoning, but affirmed the invalidation decision on other grounds.
Now, the CAFC issued an en banc decision to vacate the panel’s original decision with regard to the issue of experimental use, and the panel (J. Rader) has issued its new decision.
This case involves involved PHC anhydrates (without water) and PHC hemihydrates (some water). In the 70’s PHC anhydrates were invented in the UK. In 1984, SKB invented PHC hemihydrates and eventually patented a PHC hemihydrate compound. (U.S. Patent No. 4,721,723). In 1998, Apotex filed an ANDA to market a prior art PHC anhydrate. The question of experimental use arises because SKB performed clinical trials that occurred more than one year prior to filing of the patent application. Normally, a public use of a patented invention more than a year before filing invalidates the patent under 35 U.S.C. §102(b). However SKB has argued that the clinical trials were a form of experimental use.
In its new decision, the CAFC majority simply avoided the issue of experimental public use in totality. Rather, they found alternative grounds to invalidate the patent, holding that the asserted claims “invalid for inherent anticipation by the ’196 patent under § 102(a).”
Judge Posner had rejected this argument because Apotex “did not prove by clear and convincing evidence that it was impossible to make pure PHC anhydrate in the United States before the critical date.” The appellate panel, however, found that Judge Posner erred by requiring Apotex to meet this standard of proof, “which is too exacting.”
Apotex did not need to prove that it was impossible to make PHC anhydrate in the United States that contained no PHC hemihydrate, but merely that “the disclosure [of the prior art] is sufficient to show that the natural result flowing from the operation as taught [in the prior art] would result in” the claimed product.
Teva Pharmaceuticals v. Pfizer (Fed. Cir. 2005) (On petition for rehearing).
In January 2005, the Court of Appeals for the Federal Circuit (CAFC) issued a controversial decision in the case of Teva Pharm. v. Pfizer. Teva, a manufacturer of generic drugs had filed an Abbreviated New Drug Application (ANDA), seeking approval from the FDA to market a generic version of sertraline hydrochloride — a drug sold by Pfizer under the Zoloft® brand. Under the provisions of the Hatch-Waxman Act, Pfizer had 45-days to sue Teva for patent infringement based on Teva’s ANDA filings. However, Pfizer did not sue. Teva then brought a declaratory judgment action against Pfizer, seeking a determination that its generic drug did not infringe Pfizer’s patent.
The question on appeal was whether the Teva’s apprehension of suit was sufficient to create jurisdiction for its declaratory judgment action. On appeal, the CAFC determined that Pfizer’s Orange Book listing along with Teva’s ANDA were insufficient to create an actual controversy
The listing of a patent in the Orange Book by an NDA filer is the result of a statutory requirement. Without more, Pfizer’s compliance with the Hatch-Waxman listing requirement should not be construed as a blanket threat to potential infringers as far as Pfizer’s patent enforcement intentions are concerned. . . . More is required for an actual controversy than the existence of an adversely held patent. . . . We are not prepared to hold that listing a patent in the Orange Book evinces an intent to sue any ANDA filer who submits a paragraph IV certification with respect to the patent.
As such, the CAFC affirmed the District Court’s dismissal of Teva’s action. Now, Teva has requested an en-banc rehearing and amicus curiae briefs were field by the FTC, the Generic Pharmaceutical Association, Ivax Pharmaceuticals and Senators Edward Kennedy, John McCain, and Charles Schumer. However, that request has been denied.
In a precedential order, the CAFC denied Teva’s petition for a rehearing — noting that “a poll was requested, taken, and failed.”
However Judges Dyk and Gajarsa both filed dissenting opinions explaining their reasons for hearing the case.
Gajarsa Dissent: Judge Gajarsa, who was a member of the original Teva panel, argues that the ANDA situation is quite different from other patent infringement situations and requires a separate form of analysis.
The contextual differences between the second ANDA filer and the typical patent infringement case make the reasonable apprehension test inappropriate for this action. By guiding the patentee’s conduct in the typical case, the reasonable apprehension analysis allows the patentee to avoid litigation. Identifying a justiciable controversy in terms of a threat of infringement litigation, the doctrine establishes the circumstances in which the uncertainty of legal rights materially harm a potential infringer in the marketplace. The injury facing Teva in this case is different in kind, but no less actionable.
Gajarsa goes on to say that the panel decision’s Constitutional analysis (Article III limitations) “forestalls legislative correction” of the decision.
Dyk Dissent: Judge Dyke provides a full Article III analysis and concludes that the Teva panel was wrong in determining that a reasonable apprehension or imminent suit was required for declaratory judgment jurisdiction.
There are relatively few Supreme Court cases dealing with Article III and declaratory judgments, but the few cases that do exist provide no support for a reasonable apprehension of imminent suit requirement.
Teva and its cohort of supporters are expected to appeal petition for certiorari.
The Senators’ Brief: Senators Edward Kennedy, John McCain and Charles Schumer filed an amicus brief supporting the petition for rehearing. The brief made the point that there was a Congressional intent surrounding the passage of the Hatch-Waxman Act to expand subject matter jurisdiction over declaratory judgment actions by generic drug companies “to the constitutional limit” and that the panel opinion in Teva v. Pfizer frustrates the purposes of the amendments. (Thanks to Theodore Whitehouse at Willkie Farr for providing a copy of the Senators’ brief)
There are lots of great cases on the Federal Circuit’s spring calendar. Several cases pending at either the Federal Circuit or Supreme Court that are ‘worth a special look,’ according to Hal Wegner. Here are some highlights of Mr. Wegner’s list, with my own comments.
LabCorp v. Metabolite, petition for cert submitted, Supreme Court has requested Solicitor General’s Opinion on Cert. The case involves a patentability question — whether Metabolite’s patented method of detecting vitamin B deficiency should be invalid as "because one cannot patent laws of nature, natural phenomena, and abstract ideas."
Purdue Pharma v. Endo, CAFC heard oral arguments in early November on the question of whether patentee’s conduct was ‘inequitable’ for failing to disclose that results used to establish patentability were prophetic rather than experimental. A decision is expected soon.
SmithKline Beecham v. Apotex, awaiting decision on petition for rehearing. This case now revolves around the question of whether use of an invention to confirm utility for FDA approval is an ‘experimental use’ that saves a patent from anticipation under 102(b).
Phillips v. AWH, awaiting en banc decision on claim construction methodology.
Eolas Technologies v. Microsoft, Federal Circuit decision awaited, hopefully discussing the scope of 271(f). The upcoming appeal of AT&T v. Microsoft presents the same ‘golden master disk‘ scenario as Eolas, and will become important if Eolas is decided on other grounds.
Independent Ink v. Illinois Tool Works, In January, the CAFC determined that, in an antitrust tying case, a patent presumptively defines the relevant market as the nationwide market for the patented product itself. There is some potential for cert in this case.
NTP, Inc. v. Research in Motion, Ltd., there is a good chance for a rehearing in this case involving RIM’s BlackBerry product. This case will be important in defining extraterritorial application of U.S. patent laws in the modern era of networked computing systems.
In re Fisher is not yet on the CAFC calendar. In this case, the BPAI affirmed a rejection for lack of utility and enablement (101 and 112 p1) because the specification lacked a specific teaching of a substantial utility. According to the decision, without a specific teaching of substantial utility, then virtually all chemicals would meet the requirements of section 101 as at least "useful in research."
Although not patent litigation, Sarah Stirland (one of the few reporters focusing on intellectual property) at the National Journal has written a nice article regarding the potential for legislation in the 109th Congress.
Evident sued Church & Dwight for infringement of its licensed technology covering toothpaste. The patent owner, Peroxydent, was joined to the lawsuit early-on through a counterclaim by Church & Dwight. After a bench trial, the district court found that the inventors had withheld material references from the PTO with intent to deceive. As a result, the patent was unenforceable due to inequitable conduct. This holding was affirmed without opinion. Evident Corp. v. Church & Dwight Co., Inc., 78 Fed. Appx. 113 (Fed. Cir. Oct. 9, 2003). The district court also determined that the case was exceptional and awarded almost $1.3 million to Church & Dwight for attorney fees and expenses. Evident & Peroxydent were found jointly liable for the fees — these fees are the subject of the appeal.
On appeal, Peroxydent and Evident argue that Evident had no standing to sue in the first place, and thus, that the court did not have jurisdiction to find attorney fees.
In effect, Evident and Peroxydent, being on the losing side of both their own patent infringement claim and an opposing claim for attorney fees, now appear to seek escape from the judgment by arguing that Evident lacked standing in the first place and that the original lawsuit was improperly filed.
The court found that the defendants’ counterclaim that brought Peroxydent into the suit eliminated any standing problem.
Nonetheless, regardless whether Peroxydent was brought into the suit by the accused or the licensee, there is no standing problem. . . . Accordingly, we conclude that Peroxydent’s presence in the litigation as a third-party defendant fully satisfied any standing requirements.
Supreme Court Expected to Determine Whether Early Drug Research Necessary for FDA Approval Can Constitute Patent Infringement.
Merck v. Integra LifeSciences, U.S. Supreme Court (Case No. 03-1237).
The appeal to the Supreme Court questions the limits of the safe harbor statute (35 USC 271(e)(1)) that permits a drug manufacturer to perform experiments needed to obtain FDA approval of their drugs without incurring liability for patent infringement, even if their activities infringe other’s patent rights.
Under the Fold: The Drug Price Competition and Patent Term Extension Act (Hatch-Waxman) created a safe harbor that permits drug manufacturers to perform the experiments needed to obtain FDA approval of their drugs without incurring liability for patent infringement, even if their activities infringe others patent rights.
However, the statute, codified at 35 USC § 271(e)(1), was limited by a 2003 decision by the Court of Appeals for the Federal Circuit. The Federal Circuit affirmed a lower court’s finding that the safe harbor against patent infringement does not apply to pre-clinical activities to identify and develop new drugs that will eventually be subject to FDA approval — and thus, that Merck was liable to Integra for patent infringement.
The Case: Integra alleged that Merck and Scripps infringed patents owned by Integra relating to peptides involved in interactions between cell surfaces and the extracellular matrix. Under contract from Merck, Scripps identified several potential anti-tumor peptide candidates and selected the most promising peptide by conducting in vivo and in vitro experiments to evaluate the specificity, efficacy, and toxicity of the peptide candidates for various diseases. Scripps also performed tests to assess the histopathology, toxicology, circulation, diffusion, plasma half-life, and proper mode of administering of the peptides candidates.
The Appeals Court held that these activities did not fall under the safe harbor (§ 271(e)(1)) because they were not done "solely for purposes reasonably related to the development and submission of information" to the FDA.
"the focus of the entire exemption is the provision of information to the FDA . . . [a]ctivities that do not directly produce information for the FDA are already straining the relationship to the central purpose of the safe harbor." (CAFC Opinion).
"Expansion of § 271(e)(1) to include the Scripps-Merck activities would effectively vitiate the exclusive rights of patentees owning biotechnology tool patents."
Supreme Court:
Merck has now appealed the case to the Supreme Court of the United States, petitioning the High Court to hear the question:
Under 35 U.S.C. 271(e)(1), it is generally not an act of infringement to use a patented invention “solely for uses reasonably related to the development and submission of information under a Federal law” regulating the manufacture, use, or sale of drugs. The question presented is whether the court of appeals erred in limiting that exemption to clinical studies designed to provide information for Food and Drug Administration approval of a new drug.
On request from the Court, the Solicitor General of the U.S. submitted the Government’s view that the case should be heard. The Government brief makes two major points, one legal and the other social:
Gov’t Brief: The decision of the court of appeals reflects an incorrect view of the law, and is likely to restrict significantly the development of new drugs. Fairly read, the decision below holds that “pre-clinical” research regarding a potential new drug is not protected by the FDA exemption because that exemption is limited to “clinical” research necessary to obtain ultimate FDA approval of a new drug. That holding is inconsistent with the text of the FDA exemption, reflects a mistaken and unduly narrow view of the types of information relevant to the FDA’s two-step process for evaluating potential new drugs, and is in tension with this Court’s decision in Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661 (1990). Moreover, the court of appeals’ decision poses a direct and substantial threat to new drug research by dramatically narrowing the scope of protections enacted by Congress in Section 271(e)(1). Although this case is not an ideal vehicle for considering the issue, see p. 18, infra, the potential impact of the court of appeals’ legal conclusion is sufficiently important that the petition for a writ of certiorari should be granted.
Eli Lilly and Co. was also granted leave to file a brief as amicus curiae in the case. Justice O’Connor and Justice Breyer took no part in the consideration or decision of the petition for writ of cert. It is reported that both Justices own stock in Merck.
Academics Take Sides: Judge Richard Posner (In Lessig Blog) has advocated the creation of a fair-use exception for patents on research tools:
Link: For example, a generic drug manufacturer is permitted to use the patented drug to demonstrate that its generic equivalent is indeed therapeutically equivalent (the "testing" exception created by the Hatch-Waxman Act). More broadly, an inventor can use the information in the patent to try to invent around the patent. And Landes and I advocate an expansion of the patent fair-use principle to allow scientists to use patented research tools (such as the oncomouse) without license–provided the scientists aren’t allowed to use the tools to produce their own patented products!
In response, Lichtman has noted that Judge Posner’s proposal "is problematic for the simple reason that, often, the key market for research tools is to sell those tools to other researchers. If a researcher’s use of patented research tool is fair use, that would significantly degrade the incentive to create those research tools inthe first place. Moreover, even if your approach works, it is in sharp conflict with the Bayh-Dole instinct that society might very well be better off in a world where academic researchers patent their work. As you know, that legislation was passed in response to evidence that university breakthroughts were sitting on the shelves both because (a) they could not be owned exclusively under old NIH rules; and (b) universities had too little incentive to bring their work to the attention of industry."
Merck v. Integra LifeSciences (On petition for writ of cert. at the Supreme Court).
The Drug Price Competition and Patent Term Extension Act (Hatch-Waxman) created a safe harbor that permits drug manufacturers to perform the experiments needed to obtain FDA approval of their drugs without incurring liability for patent infringement, even if their activities infringe others patent rights.
However, the statute, codified at 35 USC § 271(e)(1), was limited by a 2003 decision by the Court of Appeals for the Federal Circuit. The Federal Circuit affirmed a lower court’s finding that the safe harbor against patent infringement does not apply to pre-clinical activities to identify and develop new drugs that will eventually be subject to FDA approval — and thus, that Merck was liable to Integra for patent infringement.
The Case: Integra alleged that Merck and Scripps infringed patents owned by Integra relating to peptides involved in interactions between cell surfaces and the extracellular matrix. Under contract from Merck, Scripps identified several potential anti-tumor peptide candidates and selected the most promising peptide by conducting in vivo and in vitro experiments to evaluate the specificity, efficacy, and toxicity of the peptide candidates for various diseases. Scripps also performed tests to assess the histopathology, toxicology, circulation, diffusion, plasma half-life, and proper mode of administering of the peptides candidates.
The Appeals Court held that these activities did not fall under the safe harbor (§ 271(e)(1)) because they were not done "solely for purposes reasonably related to the development and submission of information" to the FDA.
"the focus of the entire exemption is the provision of information to the FDA . . . [a]ctivities that do not directly produce information for the FDA are already straining the relationship to the central purpose of the safe harbor." (CAFC Opinion).
"Expansion of § 271(e)(1) to include the Scripps-Merck activities would effectively vitiate the exclusive rights of patentees owning biotechnology tool patents."
Supreme Court:
Merck has now appealed the case to the Supreme Court of the United States, petitioning the High Court to hear the question:
Under 35 U.S.C. 271(e)(1), it is generally not an act of infringement to use a patented invention “solely for uses reasonably related to the development and submission of information under a Federal law” regulating the manufacture, use, or sale of drugs. The question presented is whether the court of appeals erred in limiting that exemption to clinical studies designed to provide information for Food and Drug Administration approval of a new drug.
Only a small percentage of cases appealed to the Supreme Court are accepted for hearing. However, the Merck case took a major step closer to being heard last week. On request from the Court, the Solicitor General of the U.S. submitted the Government’s view that the case should be heard. The Government brief makes two major points, one legal and the other social:
Gov’t Brief: The decision of the court of appeals reflects an incorrect view of the law, and is likely to restrict significantly the development of new drugs. Fairly read, the decision below holds that “pre-clinical” research regarding a potential new drug is not protected by the FDA exemption because that exemption is limited to “clinical” research necessary to obtain ultimate FDA approval of a new drug. That holding is inconsistent with the text of the FDA exemption, reflects a mistaken and unduly narrow view of the types of information relevant to the FDA’s two-step process for evaluating potential new drugs, and is in tension with this Court’s decision in Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661 (1990). Moreover, the court of appeals’ decision poses a direct and substantial threat to new drug research by dramatically narrowing the scope of protections enacted by Congress in Section 271(e)(1). Although this case is not an ideal vehicle for considering the issue, see p. 18, infra, the potential impact of the court of appeals’ legal conclusion is sufficiently important that the petition for a writ of certiorari should be granted.
The Court is expected to decide whether to hear the case within the next two months. Wyeth, the AARP, and Eli Lilly are each expected to file Amicus Briefs in support of the petition to rehear the case.
Judge Richard Posner (In Lessig Blog) has advocated the creation of a fair-use exception for patents on research tools:
Link: For example, a generic drug manufacturer is permitted to use the patented drug to demonstrate that its generic equivalent is indeed therapeutically equivalent (the “testing” exception created by the Hatch-Waxman Act). More broadly, an inventor can use the information in the patent to try to invent around the patent. And Landes and I advocate an expansion of the patent fair-use principle to allow scientists to use patented research tools (such as the oncomouse) without license–provided the scientists aren’t allowed to use the tools to produce their own patented products!
In response, Lichtman has noted that Judge Posner’s proposal “is problematic for the simple reason that, often, the key market for research tools is to sell those tools to other researchers. If a researcher’s use of patented research tool is fair use, that would significantly degrade the incentive to create those research tools inthe first place. Moreover, even if your approach works, it is in sharp conflict with the Bayh-Dole instinct that society might very well be better off in a world where academic researchers patent their work. As you know, that legislation was passed in response to evidence that university breakthroughts were sitting on the shelves both because (a) they could not be owned exclusively under old NIH rules; and (b) universities had too little incentive to bring their work to the attention of industry.”
In re Bruce Beasley (Fed. Cir. December 7, 2004) (04-1225 Unpublished Opinion).
In 1991, Beasley filed a patent application directed to the generation of images on a video screen using a light pen that operates by mapping the screen into a memory on a point-by-point basis.
The patent appeals board (BPAI) found that the invention was obvious based on prior art patents cited by the patent examiner during prosecution. Beasley then appealed to the Court of Appeals for the Federal Circuit (CAFC).
On appeal, Beasley argued that the examiner never established a prima facie case of obviousness. Specifically, Beasley urged reversal because there was no motivation or suggestion to combine the references cited by the Examiner and BPAI.
The Court agreed with Beasley and reversed the BPAI’s rejection — finding that:
The record reflects that the examiner and the Board have managed to find motivation for substituting one type of memory for another without providing a citation of any relevant, identifiable source of information justifying such substitution. The statements made by the Examiner, upon which the Board relied, amount to no more than conclusory statements of generalized advantages and convenient assumptions about skilled artisans. At least under the MPEP then in effect, such [conclusory] statements and assumptions are inadequate to support a finding of motivation, which is a factual question that cannot be resolved on subjective belief and unknown authority.
Vacated and Remanded.
In Dissent, Judge Dyk would have affirmed the obviousness rejection.
I see no error in the Board’s reliance on the PTO’s own specialized knowledge [for a motivation to combine]. The effect is merely to create a prima facie case, and to shift the burden to the patent applicant. Here the applicant did not refute the factual findings of the Board and the patent examiner, but merely offered lawyer argument to contradict the Board’s findings. Under these circumstances the application was properly rejected.
With this said, I agree that the MPEP provision in effect at the time is not a model of clarity and can be read as recognizing only a very limited scope for the use of the PTO’s expertise. MPEP § 2144.03 (7th ed. 1998). However, the current version appears to allow greater latitude. MPEP § 2144.03 (8th ed., rev. 2, 2004). In future cases, where the PTO has provided us with an interpretation of the new MPEP provisions, we will need to address the extent to which the new version of the MPEP gives the PTO greater scope to rely on its own expert knowledge.
TV Guide owns several patents relating to interactive program guides in digital cable television set-top boxes that enable viewers to search through TV schedules and pre-select programs for viewing and recording. In a case before the ITC, the commission concluded that Scientific-Atlanta did not infringe the patents and that one of the patents was unenforceable because an inventor was improperly excluded from the patent.
TV Guide Appealed: In an opinion released September 16, the Federal Circuit (CAFC) found that the ITC erred in claim construction and erred in determining that Mr. Neil was an unnamed co-inventor.
Inventorship is presumed correct without clear and convincing evidence otherwise:
Because Neil failed to present facts supported by clear and convincing evidence of his co-inventorship, the ITC erred in holding Neil to be an unnamed co-inventor…. Neil principally relies on his own testimony and the content of two product disclosure documents, an original disclosure document and a “second version” of the disclosure document.
The ITC found that Neil’s testimony was “credible and straightforward,” while Young’s testimony “lacked those characteristics.” Under our precedent, more than just the alleged co-inventor’s testimony is required to establish co-inventorship by facts supported by clear and convincing evidence. Trovan, 299 F.3d at 1302. The mere fact that the ITC found the alleged inventor’s testimony to be more credible than the named inventor does not itself rise to the level of clear and convincing evidence.
Affirmed-in-part, vacated-in-part, reversed-in-part, and remanded for further proceedings.
Now, the case is returned to the ITC to for another determination of whether the devices imported by Pioneer, EchoStar, and Scientific-Atlanta infringe the patents in suit in violation of 19 U.S.C. 1337.
In a well reasoned opinion, the Federal Circuit (GAJARSA) affirmed a district court’s dismissal of a suit arising under anti-trafficking provisions of the Digital Millennium Copyright Act (DMCA).
The DMCA does not create a new property right for copyright owners. Nor, for that matter, does it divest the public of the property rights that the Copyright Act has long granted to the public. The anticircumvention and anti-trafficking provisions of the DMCA create new grounds of liability. A copyright owner seeking to impose liability on an accused circumventor must demonstrate a reasonable relationship between the circumvention at issue and a use relating to a property right for which the Copyright Act permits the copyright owner to withhold authorization-as well as notice that authorization was withheld. A copyright owner seeking to impose liability on an accused trafficker must demonstrate that the trafficker’s device enables either copyright infringement or a prohibited circumvention. Here, the District Court correctly ruled that Chamberlain pled no connection between unauthorized use of its copyrighted software and Skylink’s accused transmitter. This connection is critical to sustaining a cause of action under the DMCA. We therefore affirm the District Court’s summary judgment in favor of Skylink.
This case involved electronic garage door technology with a “rolling code” to encrypt signals transmitted signals. Skylink distributes a universal remote that can decode the encrypted rolling code. In an attempt to control the aftermarket in remote control units, Chamberlain sued.
The court’s basic premise is that an element of a DMCA cause of action is an underlying copyright violation — without such a violation, there can be no remedy.
Updates: According to Ernest Miller, the court rescued the DMCA from “one of its most absurd aspects.” He is still concerned, however, that the Act, even as narrowly interpreted, will continue “stifling creativity and innovation.” More on the story from copyfight.
PELLEGRINI v. ANALOG DEVICES (Fed. Cir. July 8, 2004)
Plaintiff Pellegrini appealed to the Federal Circuit after the district court granted partial summary judgment in favor of Analog. In the patent infringement suit, Pellegrini alleged that Analog was infringing its patented brushless motor drive circuits. (U.S. Patent 4,651,069). Because of Analog’s international manufacturing process, the case provided a novel question for the Federal Circuit.
This case presents the question whether components that are manufactured outside the United States and never physically shipped to or from the United States may nonetheless be “supplie[d] or cause[d] to be supplied in or from the United States” within the meaning of 35 U.S.C. § 271(f)(1) if those components are designed within the United States and the instructions for their manufacture and disposition are transmitted from within the United States. This is a matter of first impression for this court. According to § 271(f)(1),
Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such a manner as to actively induce the combination of such components outside the United States in a manner that would infringe the patent if such combination occurred within the United States shall be liable as an infringer.
35 U.S.C. § 271(f)(1) (2000). Section 271(f) was enacted in the wake of the United States Supreme Court’s decision in Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518 (1972), in which the Court acknowledged that unauthorized manufacturers of patented products could avoid liability for infringement under the then-existing law by manufacturing the unassembled components of those products in the United States and then shipping them outside the United States for assembly. Congress enacted § 271(f) in order to close that loophole.
In its opinion, the appellate panel determined that Section 271 requires “physical supply of components, not simply to the supply of instructions or corporate oversight.” Because the U.S. division of Analog only provided designs and corporate oversight, no infringing activity took place. Affirmed.
Liebel-Flarsheim v. Medrad (Fed. Cir. 2007). 
Dippin’ Dots v. Mosey and Dots of Fun (
Primos v. Hunter’s Specialties (Fed. Cir. 2006, 
Schoenhaus v. Gensco (Fed. Cir. 2006, 
Lawman Armor v. Winner Int’l (Fed. Cir. 2006, 
Teva Pharmaceuticals v. Pfizer (Fed. Cir. 2005) (On petition for rehearing). 
