Tag Archives: Affirmed Without Opinion

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.

Logical Conclusion?: Claimed Open-Ended Ranges Lack Enablement

Patent, ,

By Dennis Crouch

Magsil Corp. and MIT v. Hitachi (Fed. Cir. 2012)

In a unanimous opinion, the Federal Circuit has affirmed a district court summary judgment holding that the asserted claims of MIT's patent are invalid for a lack of enablement. The patent covers read-write sensors for computer hard disk drive storage systems and relies upon quantum tunneling in operation.

The courts have derived an enablement requirement from Section 112 of the patent statute. Under the doctrine, after studying the patent specification, a person of skill in the relevant art should be able to (theoretically) make and use the full scope of the claimed invention without undue experimentation. Patents ordinarily include many different claims that identify various legal rights given to the patentee. Enablement is judged independently on a claim-by-claim basis. Any claim that lacks enablement will be deemed invalid and thus unenforceable.

One of the murkiest areas of the doctrine is determining whether the "full scope" of the claim is enabled. The commonly used open ended "comprising" claim language allows for an infinite number of potential variants to be embodied within the scope of a single claim. In almost every case, it is possible to theoretically define an embodiment that falls within the claim scope but that is not fully enabled by the specification. Obviously, the fact that a particular theoretical covered embodiment is not enabled can't be sufficient to invalidate a claim. The difficult legal issue then is finding when a patent claim crosses the threshold from legitimately having a few non-enabled potential embodiments to illegitimately failing to enable the full scope of the claim.

Unbounded Range: Here, the patent claims that the device switch has a change in resistance of "at least 10%." Although it is desirable to have a device with a greater ΔR, the inventors best pre-filing device only reached 11.8%. The accused infringing devices had a greater ΔR and thus the patentee argued that the "at least 10%" claim scope could cover a ΔR of 100% or even 1,000%." The defendant (Hitachi) was able to prove that those ΔR levels could not have been achieved at the time of the patent filing without undue experimentation. The Federal Circuit found this sufficient to find the claim lacking enablement.

In sum, this field of art has advanced vastly after the filing of the claimed invention. The specification containing these broad claims, however, does not contain sufficient disclosure to present even a remote possibility that an ordinarily skilled artisan could have achieved the modern dimensions of this art. Thus, the specification enabled a marginal advance over the prior art, but did not enable at the time of filing a tunnel junction of resistive changes reaching even up to 20%, let alone the more recent achievements above 600%.

This case follows in re Fisher (CCPA 1970). In that case the court ruled that a claimed potency of "at least 1 International Unit of ACTH per milligram" was invalid as lacking enablement after the patentee attempted to enforce the patent against products with potentials of much greater than the 2.3 IUs disclosed in the specification.

The court particularly addressed the comprising issue discussed above. One key distinction is that the high ΔR range here is an explicit element of the claimed invention rather than being a mere latent vestige of the claim structure.

Not a Groundbreaking Invention: In both Fisher and here, the patentees' actual experiments were at ranges just above that already known in the art. That seeming small advance reflected in claiming a range that barely avoided the prior art at the lower bound but then attempted to claim an infinite range at the upper bound. In this case, the court identifies the advance as "marginal over the prior art." The suggestion from the court is that a marginal advance such as this is deserving of a much narrower scope than would be given a groundbreaking invention. The court is on the right track with this approach however, the language of the opinion can also be read to limit potentially broad scope of even groundbreaking inventions when the accused infringer (or others) have spent significant time and energy on developing a particular embodiment covered by the invention.

Whither Open-Ended Ranges and a Plurality of Members?: The opinion can also be read to eliminate the potential for open-ended ranges. The court writes that "the '922 patent specification only enables an ordinarily skilled artisan to achieve a small subset of the claimed range." Of course, a mathematician will explain that any claim with a range that potentially reaches to infinity (e.g., "a plurality of members") will suffer from this same defect – that only a small subset of the claimed range will be enabled (assuming that infinity is not enabled).

Transformative Research to Avoid Infringement: As mentioned above, the opinion relies somewhat heavily on the fact that extensive post-patent-filing research was conducted; and that the research eventually led to a new state-of-the-art that is much more advanced than that imagined by the inventors (even though still literally covered by the claims). This opens the door to manufacturing companies to offer testimony related to their extensive research and development programs and offer an argument akin to transformative copying in copyright law. If the research is sufficiently transformative (and took sufficient effort) then the patent will be deemed invalid for failing to enable that covered embodiment.

Enablement Doctrine Allows Follow-on Research: The court is straightforward in stating that a strong enablement requirement will help prevent over broad patent claims and thus allow room (and incentives) for "follow-on or improvement inventions."

Invalidity affirmed.

Federal Circuit Panel Splits on Standard of Review for Litigation Misconduct

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In Highmark, Inc. v. Allcare Health Mgmt. Sys., Inc., __ F.3d __ (Fed. Cir. Aug. 7, 2012), a divided panel remanded for further proceedings the district court's award of attorneys' fees against an unsucessful patentee based upon assertion of frivolous infringement claims and litigation misconduct.  The case is noteworthy for a few reasons.

First, the facts.

The patentee asserted infringement of several claims out of the 102 claims in the '105 patent, including claims 52, 53, and 102.  The patent generally related to a method of determining whether a review of proposed treatment as part of health care reimbursement by an insurer was needed, and a way to preven tpayment until the treatment has been approved.  The district court granted the accused infringer's motion for summary judgment of non-infringement as to all three claims, and in fact the accused infringer did not oppose summary judgment on claim 102.  

While that decision was on appeal (and before it was affirmed under Fed. Cir. R. 36), the accused infringer moved the court to find the case exceptional, and also moved for Rule 11 sanctions.  The district court found it exceptional and found violations of Rule 11, and awarded about $5.2 million in fees and expenses.  The lawyers then withdrew from representing the patentee, based upon conflicts of interest, and moved seperately to reconsider the Rule 11 sanctions; the district court heard additional evidence from those attorneys, and then vacated the Rule 11 sanctions against the attorneys. Meanwhile, the patentee sought reconsideration of the exceptional case finding against it, but that was denied.  (The appellate court decision does not specify what the conflict was, but reading between the lines it may have been that the attorneys believed the client had not disclosed information to them.  From the opinion, it appears that Rule 11 sanctions had been imposed solely on the attorneys, not the client.)

On appeal, the Federal Circuit split, 2-1. The majority opinion by Judge Dyk (with Judge Newman, dissenting in part was Judge Mayer) stated that for a patentee's suit to be frivolous in terms of Section 285, both (1) the litigation had to have been brought in bad faith and (2) the litigation had to have been objectively baseless.  Both prongs had to be satisfied as to each asserted claim, and so determination of an exceptional case finding was made on a claim-by-claim basis.

With respect to the subjective bad faith prong, the court was in apparent agreement that it required proof of clear and convincing evidence of subject bad faith, which were reviewed for clear error.

With respect to the second prong, the disagreement between Judge Mayer and the panel majority centered on the standard of review for the second prong.  The panel majority emphasized that objective baselessness was a question of law based on underlying mixed questions of law and fact, and so was subject to de novo review, citing Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., __ F.3d __ , 2012 WL 2149495 (Fed. Cir. June 14, 2012).   Judge Mayer, in contrast, argued that Bard had incorrectly applied the de novo standard of review to this question, when it had in fact been subject to the highly deferential "clear error" standard.  He wrote that "Bard was simply wrong…."   In its response to his argument, the panel majority viewed Judge Mayer's reading of Bard as inconsistent with Supreme Court precedent interpreting the sham litigation exception to the First Amendment, including Professional Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 US 49 (1993), and that deference was otherwise unwarranted due to policy reasons.

With respect to the merits, the focus of the appellate court decision was the assertion of claim 102.  In full, that claim provided (with the key language in the preamble emphasized):

A method of managing an integrated health care management system having input means, payment means and memory storage comprising:

(a) storing through said input means into said memory storage personal health profile data for each of a predetermined plurality of persons;

(b)storing into said memory storage symptoms and treatment data for each of a predetermined plurality of health profiles and problems;

(c) storing in said memory storage criteria for identifying treatments requiring utilization review;

(d) storing in said memory storage criteria for identifying treatments requiring second opinions;

(e) entering into said system information iden- tifying a proposed medical treatment for one of said plurality of persons;

(f)identifying whether or not said pro- posed medical treatment requires utilization review; and

(g) preventing said system from approving payment for said proposed medical treatment if said proposed medical treatment requires utilization review until such utilization review has been conducted.

The court reasoned that the preamble was limiting because the limitations in the claim body (such as "said system" in elements (e) and (g) could derive their antecedent basis solely from the preamble.  It further noted statements in the prosecution history that supported this construction, and noted that the patentee had agreed with this construction in litigation.

However, there was no plausible argument that this claim was infringed, and that fact seemed undisputed.  As a result, the court found the assertion objectively baseless.

With respect to subjective bad faith, the court concluded that there was no showing that, though it had lost, the "allegations are supportable so as to negate a finding of bad faith."  While "an adequate pre-filing investigation may negate a claim of bad faith," the district court had found that this did not occur; however, the majority stated that because the patentee had engaged in bad faith conduct from the inception, "because it knew or should have known that the allegation of infringement of claim 102 was frivolous — we need not examine the pre-filing investigation."  Further, it rejected the argument that the fact that the district court had vacated the Rule 11 sanctions was inconsistent with the exceptional case finding, stating that "a lack of sanctions against attorneys is not itself a ground for barring sanctions against a client."  Without explanation, the majority stated that the evidence that had led to vacatur of the Rule 11 sanctions "had no bearing on the interpretation of claim 102" or the patentee's knowledge of infringement.

With respect to claim 52, the court reached the opposite conclusion, finding that the patentee's construction, which would have led to infringement, was not "so unreasonable that no reasonable litigant coudl believe it woudl succeed."  Thus, the accused ifnringer failed to show that "under this alternative claim construction, the allegations of accused infringement were objectively unreasonable."

Turning to litigation misconduct as a basis to affirm the award, the court analyzed the three instances relied on by the district court, and found each one insufficient to justify the award because the accused infringer failed to show that any were objectively unreasonable when made.  While two of these are fact-specific, one instance was "shifting claim construction" with respect to one element of claim 52.  The court set out the different constructions proffered by the patentee, but reasoned that they were "linguistic shifts" which did not "differ in substance," and so constituted "minor word variations" that also may have been caused by the intervening Federal Circuit decision in Phillips.

As a result, the district court's finding that assertion of claim 102 rendered the case exceptional, but remanded for the district court "for a calculation of attorneys' fees based on the frivolity of claim 102 allegations only."

What's the case mean?

Clearly, careful consideration of infringement is required.  Assertion of even one non-infringed claim can result in some fee-shifting.  A party who drops infringement claims late in a case, such as here when faced with a motion for summary judgment, will likely face a motion to shift some fees, for example.

The case also illustrates the need for careful documentation of pre-suit investigation. While the award here did not turn on pre-filing investigation, the attorneys were able to avoid the Rule 11 sanctions based upon their presentation of evidence concerning pre-suit investigation.

Finally, with respect to the issue on which the panel divided — the standard of review and the question of whether objective reasonableness was reviewed for clear error or under the de novo standard — there are lessons for both sides.  On appeal, the victor in a fee shifting case must be prepared to withstand de novo review, and to do so on a claim-by-claim basis.  This renders appeals more expensive, and when a fee award is part of the merits on appeal, makes it difficult as a matter of space and writing to effectively address all issues.  

As for who was right about the standard of review, stay tuned.

 

Toshiba v. Imation: Claim Construction Three Ways

Patent,

By Jason Rantanen

Toshiba Corporation v. Imation Corp. (Fed. Cir. 2012) Download 11-1204
Panel: Moore (author), Schall, and Dyk (concurring-in-part and dissenting-in-part)

Dissents in Federal Circuit opinions dealing with claim construction often reflect disagreements over the correct methodology or execution.  Judge Dyk's dissent in Toshiba goes a step further, proposing a claim construction different from those advanced by either side. 

The technology in Toshiba involves DVDs. Toshiba's patent No. 5,831,966 claims a recording medium containing a "management region" that contains information about the structure of the medium – specifically, "number-of-recording planes identifying information that represents the number of recording planes of the recording medium." The district court construed this as "information whose purpose is to identify the number of recording planes on the recording medium."  Slip Op. at 15 (emphasis in CAFC opinion).  This "purpose" construction mattered because the patent holder accused single-sided DVDs of infringing the '966 patent.  These single-sided DVDs contain information that identifies the number of planes on that side – effectively providing information on the disc as a whole.  Because the purpose of the information on the single-sided DVDs is only to identify the planes on one side of the disc, however, the district court concluded that the accused discs do not infringe.

On appeal the majority disagreed with the district court's construction, agreeing with Toshiba that the limitation should be given its plain and ordinary meaning as recited in the claim itself.  "The language of the claim only requires that the information "represents" the number of recording planes."  Slip op. at 17.  The majority declined to read the embodiments of the specification into the claims.  "Absent disclaimer or lexicography, the plain meaning of the claim controls."  Slip Op. at 19.

Judge Dyk, writing in dissent, saw the issue differently.  In his view, the "number of recording planes" limitation requires the identification of both the number of disc sides and the number of layers per side, a construction neither party advanced.  To support this construction, he took a stronger view of the effect of the specification and the prosecution history than the majority.  In his opinion, "the specification and the prosecution history of the ’966 patent make clear that the central objective of the patent was to identify whether an optical disc was a one-sided disc or a two-sided disc."  Slip Op. at 27.  Given this construction, he would have affirmed the district court's grant of summary judgment of non-infringement. 

Indirect Infringement: The district court granted summary judgment of no indirect infringement of a second patent, No. 5,892,751, based on the conclusion that recording a DVD without finalizing it (the step necessary to allow the DVD to be played on drives other than it was recorded) was a substantial noninfringing use.  On appeal, the Federal Circuit affirmed in the context of contributory infringement but reversed for inducement of infringement.  Here, Toshiba failed to present any evidence that the recording and playing of unfinalized DVDs – which does not infringe the '751 patent – is "unusual, far-etched, illusory, impractical, occasional, aberrant, or experimental." Slip Op. at 8 (quoting Vita-Mix, 581 F.3d 1317, 1327 (Fed. Cir. 2009).  Furthermore, merely recommending an infringing use (finalizing the DVD) is not evidence that a non-infringing use is not a substantial use.  The substantial noninfringing use thus supported the grant of summary judgment of no contributory infringement.   However, the district court erred in holding that the existence of a such a use precludes a finding of inducement of infringement.  Nor could summary judgment of no inducement be affirmed on the ground that the patentee did not provide evidence of specific acts of infringement: circumstantial evidence can suffice.  Here, the circumstantial evidence was stronger than the "capable of infringing" evidence involved in Fujitsu v. Netgear, 620 F.3d 1321 (Fed. Cir. 2010) and ACCO Brands v. ABA Locks, 501 F.3d 1307 (Fed. Cir. 2007).  

Mintz v. Dietz & Watson: Hindsight and Common Sense

Patent,

By Jason Rantanen

Mintz v. Dietz & Watson, Inc. (Fed. Cir. 2012) Download 10-1341
Panel: Rader (author), Newman, Dyk

Although concerns about hindsight never disappeared from Federal Circuit opinions on obviousness following KSR, it did seem for a time that the court backed away from strong language about hindsight.  The court's opinion in this case exhibits no such timidity.

The Mintzes invented a casing structure for meat products that permits the meat to bulge between netting strands while avoiding the more complex stuffing process associated with prior knitted meat encasements (Patent No. 5,413,148). Package Concepts & Materials, Inc., a former distributor of Mintz products, filed a declaratory judgment action against Mintz and Mintz filed a patent infringement action against PCM.  During the consolidated infringement proceeding the district court granted summary judgment of obviousness as to the '148 patent.  On appeal, the Federal Circuit reversed. 

Hindsight as a major continuing concern: The most striking aspect about the Federal Circuit's opinion is the strong language it uses when discussing the need to avoid hindsight bias when analyzing obviousness.  The opinion uses the word "hindsight" repeatedly, warning against "the forbidden use of hindsight" and the "prohibited reliance on hindsight," as well as the need for "a court to walk a tightrope blindfolded (to avoid hindsight)."  Compare this with KSR: "A factfinder should be aware, of course, of the distortion caused by hindsight bias and must be cautious of arguments reliant upon ex post reasoning…Rigid preventative rules that deny factfinders recourse to common sense, however, are neither necessary under our case law nor consistent with it."  KSR v. Teleflex, 550 U.S. 398, 421 (2007).  (Mintz does not cite KSR at any point).

Consistent with its view on hindsight, the opinion seeks to avoid such bias in three ways: by requiring that "common sense" be articulated, by avoiding the use of the patent itself in defining the problem the invention solves, and by emphasizing the need to analyze the objective indicia of nonobviousness. 

"Common sense" must be articulated: In its obviousness determination, the district court relied on a "common sense approach" to conclude that it would have been "obvious to try" an element of the claimed invention.  The CAFC held that more is required than simply saying the words "common sense": "With little more than an invocation of the words "common sense" (without any record showing that this knowledge would reside in the ordinarily skilled artisan), the district court overreached in its determination of obviousness."  Slip Op. at 9.

Nonobvious question/obvious solution: The CAFC also found that the district court erred by using the invention to define the problem that the invention solves.  This was problematic because it may be the problem itself that is nonobvious – once the problem is known the solution may be virtually certain.  "Often the inventive contribution lies in defining the problem in a new revelatory way."  Slip. Op. at 9. This is consistent with KSR – solutions to a problem cannot be "obvious to try" if the problem itself is not known or obvious. 

Objective indicia of nonobviousness: A classic tool for avoiding reliance on hindsight is use of the objective indicia of nonobviousness.  They "help inocolate the obviousness analysis against hindsight,"  Slip Op. at 10, and "turn back the clock and place the claims int he context that led to their invention."  Id. at 11.  Consideration of these indicia is not discretionary; it is mandatory.  By failing to give substantive consideration to the objective evidence of nonobviousness presented by Mintz, the district court erred.   

Summary judgment of noninfringement was also at issue on appeal; the CAFC affirmed the district court on that issue. 

Guest Post by Sarah Burstein: Apple v. Samsung

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Guest post by Sarah Burstein, who will joining the faculty of University of Oklahoma College of Law this August.  Her research focuses on design patents, an important piece in the smartphone wars. – Jason

Apple, Inc. v. Samsung Electronics Co., Ltd. (Fed. Cir. 2012) Download 12-1105

Panel:  Bryson (author), O’Malley (concurring in part and dissenting in part), Prost

On May 14th, the Federal Circuit issued its first opinion in the world-wide, multi-front patent war between Apple and Samsung.  In this opinion, the Federal Circuit considered the district court’s denial of Apple’s motion for a preliminary injunction based on infringement of three design patents and one utility patent, affirming in part and vacating in part.  The opinion provides notable holdings in the areas of irreparable harm and nonobviousness.

In the motion, Apple argued that Samsung’s Galaxy S 4G and Infuse 4G smartphones infringed U.S. Des. Patent No. 618,677 (“the D’677 patent”) and U.S. Des. Patent No. 593,087 (“the D’087 patent”) and that Samsung’s Galaxy Tab 10.1 tablet computer infringed U.S. Des. Patent No. 504,889 (“the D’889 patent”).  Apple also argued that all three of the devices—along with Samsung’s Droid Charge phones—infringed U.S. Patent No. 7,469,381 (“the ’381 patent”), which claims the iPad and iPhone “bounce” feature.  The district court denied the motion based on, among other things, its findings that:  (1) Samsung had raised substantial questions regarding the validity of the D’087 and D’889 patents; and (2) although the D’677 and ’381 patents were likely valid and infringed, Apple had failed to provide sufficient evidence on the issue of irreparable harm.

On appeal, the Federal Circuit affirmed the denial of preliminary injunctive relief with respect to the D’677, D’087, and ’381 patents based on a lack of irreparable harm.  The Federal Circuit concluded that the district court had not abused its discretion in finding no likelihood of irreparable harm with respect to the D’677 and ’381 patents.  And although the Federal Circuit rejected the district court’s conclusion that the D’087 was likely anticipated, it still found no abuse of discretion in the denial of the preliminary injunction “[b]ecause the irreparable harm analysis is identical for both smartphone design patents.”

On the issue of irreparable harm, the Federal Circuit rejected Apple’s argument that the district court erred in requiring Apple to demonstrate a nexus between the claimed infringement and the alleged harm.  According to the Federal Circuit:  “If the patented feature does not drive the demand for the product, sales would be lost even if the offending feature were absent from the accused product.  Thus, a likelihood of irreparable harm cannot be shown if sales would be lost regardless of the infringing conduct.”  On appeal, Apple had argued that the district court had erred in rejecting Apple’s dilution theory of irreparable harm.  The Federal Circuit disagreed, noting that “[t]he district court's opinion thus makes clear that it did not categorically reject Apple's ‘design erosion’ and ‘brand dilution’ theories, but instead rejected those theories for lack of evidence.”  However, the Federal Circuit agreed with Apple that it “would have been improper” for the district court to completely reject “design dilution as a theory of irreparable harm.”  The Federal Circuit did not explain why it “would have been improper” or provide any further explanation.

The Federal Circuit did, however, vacate the denial of preliminary injunctive relief with respect to the D’889 patent.  The district court had found that the D’889 patent was likely obvious, using a 1994 tablet design (the “Fidler tablet”) as the primary reference.  In the design patent context, any finding of obviousness must be supported by a primary reference—i.e., there must be “something in existence” that has “basically the same” appearance as the claimed design.  If a primary reference is found, then the analysis proceeds.  But if there is no primary reference, the inquiry ends—the design cannot be obvious.  The Federal Circuit disagreed with the district court, holding that the Fidler tablet was not a proper primary reference.  The Federal Circuit stated that “[a] side-by-side comparison of the two designs shows substantial differences in the overall visual appearance between the patented design and the Fidler reference,” pointing to the following illustration: 

  References

Without a primary reference, the district court’s finding that Apple was unlikely to succeed on the merits could not stand.  And the district court had found that Apple had demonstrated a likelihood of irreparable injury with respect to the D’889 patent.  However, because the district court had not made any findings on two of the preliminary injunction factors—the balance of harms and the public interest—the Federal Circuit remanded this portion of the case for further proceedings. 

In her partial dissent, Judge O’Malley disagreed that the case should be remanded for further proceedings.  According to Judge O’Malley, the district court’s discussion of these factors with respect to the other smartphone patents supported the entry of an injunction against the Galaxy Tab 10.1.  Judge O’Malley also expressed concern that the remand would create undue delay, stating that “courts have an obligation to grant injunctive relief to protect against theft of property—including intellectual property—where the moving party has demonstrated that all of the predicates for that relief exist.”

Comment:  The Federal Circuit’s conclusion regarding the Fidler tablet was surprising.  Only a few years ago, a leading commentator observed that “[a]s a practical matter, [the requirement that the designs have ‘basically the same’ design characteristics] means that the primary . . . reference in a §103 design case needs to illustrate perhaps 75-80% of the patented design.”  Perry J. Saidman, What Is the Point of the Point of Novelty Test for Design Patent Infringement?, 90 J. Pat. & Trademark Off. Soc’y 401, 419 (2008).  Using that rule of thumb—or really, any ordinary meaning of the phrase “basically the same”—the Fidler tablet would easily qualify as a primary reference.  Of course, that would not mean that the D’889 patent was obvious; indeed, there does not seem to be (at least from the public portion of the record) any persuasive evidence that an ordinary designer would have been motivated to modify the Fidler tablet in the manner shown in the D’889 patent.  But this strict reading of the “basically the same” requirement may make it more difficult to prove obviousness in future design patent cases.  And while it’s too early to declare a trend, it is worth noting that the Federal Circuit affirmed a rather strict reading of this requirement last year in Vanguard Identification Systems, Inc. v. Kappos (a case I discussed in a recent article). 

The other especially striking portion of this opinion is the Federal Circuit’s unquestioning acceptance of Apple’s “design dilution” theory of irreparable harm.  This sort of express equation of the harm caused by design patent infringement with the harm caused by trademark dilution is unprecedented in design patent case law (although not in the academic literature) and Apple’s theory deserves more attention and consideration than the Federal Circuit appears to have given it in this case.

Supreme Court to Hear International Copyright Exhaustion Case

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By Dennis Crouch

Kirtsaeng v. John Wiley & Sons, Inc. (Supreme Court 2012)

The Supreme Court has granted certiorari in another international copyright exhaustion case. Previously, in Omega v. Costco, the court stalled in a 4-4 tie and left the case without an opinion. Copyright exhaustion – also known as the “first sale doctrine” – is codified under 17 U.S.C. § 109(a) and allows the holder of a copy of a work “lawfully made under this title” to sell or otherwise dispose of the copy without the copyright holder’s permission. Without this doctrine, such a sale could be considered a violation of the copyright holder’s exclusive distribution rights under section 106(3). The question in this case is whether the exhaustion doctrine applies to authorized copies manufactured outside of the US and then imported. Copyright holders argue that exhaustion does not apply because the foreign copies were not “lawfully made under this title,” but instead were lawfully made in a region not subject to US copyright law. A win for the copyright holders would support a system of price discrimination that would allow a rights-holder to block third-party imports of legitimate (non-counterfeit) products into the US. The rule would also tend to encourage foreign manufacture.

The question presented:

How do Section 602(a)(1) of the Copyright Act, which prohibits the importation of a work without the authority of the copyright’s owner, and Section 109(a) of the Copyright Act, which allows the owner of a copy “lawfully made under this title” to sell or otherwise dispose of the copy without the copyright owner’s permission, apply to a copy that was made and legally acquired abroad and then imported into the United States?

The case is expected to be argued this fall.

Exclusive Rights of Importation: The particular facts of the case are interesting. John Wiley sells textbooks at a reduced rate in Thailand. Kirtsaeng imported eight Wiley books and resold them in the US. Although Wiley had profited from the original sale in Thailand, the company argued that the importation also violated US law because the foreign sale did not exhaust the copyright and that, therefore, Wiley maintained exclusive rights of importation and distribution. A jury awarded Wiley statutory damages of $75,000 per copy for a total of $600,000 for the eight books. The Second Circuit affirmed that judgment.

Patent Law: Patent law’s exhaustion doctrine is not based upon a statute but does run roughly parallel to the copyright law as outlined above. In the Jazz Photo cases, the Federal Circuit ruled that international sale does not exhaust US patent rights. If the Supreme Court reverses in Kirtsaeng, this will likely be seen as an implicit reversal of Jazz Photo and its progeny. Thus, the case will obviously impact patent law. The AIPLA filed a brief in support of the petition – focusing on the need for resolving the circuit split.

John Wiley’s cases are still pending against various patent law firms for failing to obtain a license to make copies of prior art documents before making copies and submitting those to the USPTO as required by law. The defendant law firms are expected to file their answers later this month.

Self-Replicating Inventions: Supreme Court asks for Government’s Views in Monsanto Patent Exhaustion Case

Patent, ,

By Dennis Crouch

Bowman v. Monsanto (Supreme Court Docket No. 11-796, 2012)

In 2011, the Federal Circuit again affirmed that Monsanto’s genetically modified seeds patents can be used to stop farmers from saving and replanting the GM seeds. The farmer, Vernon Bowman, then petitioned the Supreme Court asking for a writ of certiorari – presenting the following question:

Patent exhaustion delimits rights of patent holders by eliminating the right to control or prohibit use of the invention after an authorized sale. In this case, the Federal Circuit refused to find exhaustion where a farmer used seeds purchased in an authorized sale for their natural and foreseeable purpose – namely, for planting. The question presented is:

Whether the Federal Circuit erred by (1) refusing to find patent exhaustion in patented seeds even after an authorized sale and by (2) creating an exception to the doctrine of patent exhaustion for self-replicating technologies?

In its brief-in-opposition, Monsanto reformulated the question as follows:

Whether the Federal Circuit correctly ruled that Monsanto’s patent rights in biotechnology related to genetically modified plants (here, patented technologies that make soybeans resistant to glyphosate-based herbicides) are independently applicable to each generation of soybeans embodying the invention, such that a grower who, without authorization from Monsanto, creates a new generation of genetically modified soybeans infringes Monsanto’s patents.

CVSG: Now, the Supreme Court has invited the Solicitor General to file briefs expressing the views of the United States in the case. This is a significant step toward grant because it shows some interest in the case. Typically a call for the views of the Solicitor General (CVSG) requires the vote of at least four justices. However, those votes appear to be easier to obtain than a vote to grant certiorari or a vote to reverse the lower court. A study of 30,000 petitions reported that a petition on the paid docket is four times more likely to be granted once the Court calls for a response. Thompson and Wachtell, An Empirical Analysis of Supreme Court Certiorari Petition Procedures: The Call for Response and the Call for the Views of the Solicitor General, 16 George Mason L. Rev. 237 (2009). In his study of patent cases, Professor Duffy found that the SG’s opinion is extremely important in predicting whether the Supreme Court decides to hear a case on the merits. John F. Duffy, The Federal Circuit in the Shadow of the Solicitor General, 78 Geo. Wash. L. Rev. 518 (2010).

DOJ – USPTO – FTC – ETC.: The USPTO would almost certainly agree with the Federal Circuit’s opinion and recommend against a grant of certiorari. Of course, the Supreme Court is not asking the opinion of Raymond Chen (USPTO Solicitor General), but rather the opinion of Solicitor General of the United States (acting on behalf of the US). In the power struggle, the USPTO is only one voice and may well lose-out here to other interests (as it has in other recent cases). In 2005, the SG (then Paul Clement) filed a brief in the parallel case of McFarling v. Monsanto recommending that the petition be denied. The McFarling petition did not focus on exhaustion. However, in a footnote the SG brief noted that “whether (and, if so, to what extent) the patent-exhaustion doctrine applies to restrictions on the use of a materially identical patented product that was produced by the patented product sold by the patentee” is “novel.”

Mark Walters of Frommer Lawrence & Haug is lead counsel for Bowman. Seth Waxman is counsel of record for Monsanto.

Means-Plus-Function: Invalid as Indefinite

Indefinite, Patent, ,

by Dennis Crouch

Ergo Licensing v. CareFusion 303 (Fed. Cir. 2012)

In a split opinion, the Federal Circuit has affirmed a lower court ruling that Ergo's asserted claims are invalid. Judge Moore explains in her opinion, that the claims are indefinite under 35 U.S.C. § 112 (2) because the means-plus-function limitations are not supported by any corresponding structure disclosed in the specification.  Judge Linn joined Judge Moore's opinion.  Judge Newman dissented. 

Describing, Enabling, and Defining: 35 U.S.C. § 112 (1) requires that a claimed invention be fully described and enabled. In addition, the claims must be drafted in a manner that particularly identifies the scope of rights being claimed.  35 U.S.C. § 112 (2).  Although overlapping, these three requirements—written description, enablement, and definiteness—are separate and distinct requirements. Thus, a claim may fail the definiteness requirement even though the invention sought to be patented was fully described in the original specification in "full, clear, concise, and exact terms" and in a way that "enables any person skilled in the art … to make and use the same."

Means-Plus-Function: Patent claims ordinarily recite particular "structure, material, or acts" as elements that both provide for the inventive step and limit the scope of rights. 35 U.S.C. § 112 (6) allows a patentee to alternatively draft limitations as "a means or step for performing a specified function without the recital of structure, material, or acts in support thereof." To a lay reader, these means-plus-function claims appear quite broad. For instance a claimed "means for connecting elements A and B" seemingly covers any method or structure that accomplishes the claimed function. However, the statute itself require that means-plus-function claims be given a much more limited scope. Under § 112 (6), a means-plus-function claim "shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof." Thus, to know the meaning of a claimed "means for connecting," we must look to the patent specification to see what particular connecting means were disclosed and the scope of the claim would be limited only to those disclosed structures and their equivalents. The result here is that means-plus-function claims typically have a scope that is much narrower than one might expect on the initial reading.

Undefined Means: In recent years, a number of means-plus-function claims have been invalidated as lacking definiteness under § 112 (2). (I.e., invalid as indefinite). Courts follow the following approach: (a) The statute requires that a means-plus-function element be defined according to corresponding structure found in the specification. (b) If no corresponding structure is found then the term cannot be defined and (c) is therefore invalid as indefinite.

This case offers yet another example of claims being held invalid based upon means-plus-function claim elements that lack corresponding structure in the specification. The claims recite a "control means for controlling [an] adjusting means." The patentee argued that its disclosure of a general purpose computer was sufficient structure because a computer would be able to accomplish the task-at-hand. On appeal, the court rejected the patentee's argument and affirmed that such a computer was insufficient structure since a general purpose computer could not accomplish the function required by the claim. The court wrote that the patentee could have satisfied the requirement by additionally including the algorithm that the computer would use to accomplish its task."

If special programming is required for a general purpose computer to perform the corresponding claimed function, then the default rule requiring disclosure of an algorithm applies. It is only in the rare circumstances where any general-purpose computer without any special programming can perform the function that an algorithm need not be disclosed.

Thus, the means-plus-function limitation has no corresponding structure in the specification because "there is no algorithm described in any form for the function of 'controlling the adjusting means.'" As a result, the claim is invalid as indefinite.

In an extended dissent, Judge Newman argued that the ruling amounts to a formalistic technicality that is unfair to patentees – especially when the enablement and written description tests are not offended by the claim.

Disfavored by Patentees: Because of their narrow scope and high-likelihood of invalidity, "means for" claiming has been on a steady decline for the past two decades. The chart below shows a time series of the percent of patents that include at least one "means for" claim limitation. (Note – my search was for "means for" and so some MPF claims are not counted). These days, the only ones being caught in this trap are either (1) being poorly advised or (2) attempting to improperly extend the scope of their patent beyond what was actually invented. In my view, prudent patent applicants today never rely on MPF claims as their broadest or strongest claims. However, many still find some role for those claims and it is important to recognize that means-plus-function claim scope varies dramatically on the international level.

Device for: The majority opinion suggests the next frontier of challenge – patent claims that rely heavily on functional language but that do not use the magic "means" language. Here, the court at least suggests that an equivalent claim drafted as a "device for controlling" would have been invalid under the same analysis. The court wrote "The [hypothetical] recitation of 'control device' provides no more structure than the term 'control means' itself, rather it merely replaces the word 'means' with the generic term 'device.'"

Guest Post: Checking the “Staats” – in Broadening Reissue Practice, We Are Stuck in the “Doll”-drums

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By David M. Longo, Ph.D. of Finnegan LLP1

This post addresses the Federal Circuit’s March 5, 2012, precedential opinion In re Staats, Appeal No. 2010-1443, in which Judge Dyk writes for the majority. In short, the Federal Circuit holds that it is bound by In re Doll, 419 F.2d 925 (CCPA 1970), and that both 35 U.S.C. § 251 and Doll permit the filing of a continuing reissue application to broaden patented claims beyond the statutory two-year period—even when the continuation claims are broadened—in a manner unrelated to any broadening aspect identified within the two-year period. For a more in-depth discussion of 140 years of reissue case law, legislative history, and statutory shaping pertaining to broadening reissue practice, including an analysis of the facts and oral arguments in Staats leading up to the opinion, please see the author’s publication Checking the Staats: How Long is Too Long to Give Adequate Public Notice in Broadening Reissue Patent Applications?, 2011 Duke L. & Tech. Rev. 009 available at http://www.law.duke.edu/journals/dltr/articles/2011dltr009.

One of the most straightforward ways patent owners can expand the limited monopoly of a patent is by seeking increased claim scope by one or more broadening reissue patent applications. While patent owners may narrow the scope of patent claims at any time during the life of the patent, they may only broaden claim scope for a limited period of time after issuance of the patent. See MPEP § 1412.03, discussing implementation of 35 U.S.C. § 251. Despite this relatively clear statutory provision in § 251, however, an expansive body of case law has construed the provision, dating back well over a century.

The Staats opinion had the potential to become the most definitive statement in broadening reissue practice in almost twenty years. Passing on such a wonderful opportunity, the CAFC instead blandly upheld Doll and bluntly invited the USPTO to seek en banc review. In fact, Judge Dyk’s majority opinion states, “If the PTO believes we should overrule Doll, that is a matter that must be presented to the en banc court.” Slip Op. at 11. Judge O’Malley’s concurring opinion, which concurs in the opinion’s judgment but not its reasoning, states, “To the extent the majority opinion is no more than a begrudging nod to Doll‘s precedential effect with an invitation to reconsider that decision, the majority opinion is wrong.” Slip Op. at 12 (concurrence at 1).

The Staats case presents a collision between two robust statutory interpretations and two equally weighty sets of policy considerations. On the one hand, the public-notice function cited by both the USPTO and the Board—and regarded as a hallmark of the protections in § 251—is crucial. The public has the right to know what is claimed and disclaimed in a patent, and one could argue that patentees should not be permitted to reshape their inventions throughout the life of the patent simply by lodging a “placeholder” broadening reissue application within two years of patent issuance, from which any number of potentially disparate continuing reissue applications could be filed. Allowing such activity without adequate safeguards could result in a scenario in which a competitor could potentially spend an obscene amount of money based on the perceived bounds of the limited monopoly granted by a particular patent, only to face an infringement action years later after the boundaries of the limited monopoly have shifted. Likewise, such activity may make it difficult for a competitor to assess whether it has freedom to operate in a particular technology—again because of shifting boundaries of the limited monopoly. Consistent with this perspective, the USPTO’s position in Staats held firm against effectively giving an applicant a license to unforeseeably shift from one invention to another through reissue well beyond the two-year statutory period. See Ex parte Staats, No. 2009-007162, 2010 WL 1725728, at *9 (BPAI Apr. 26, 2010).

On the other hand, as argued by Apple in the Staats appeal to the Board, the CCPA in Doll held that the intervening rights provided by 35 U.S.C. § 252 are potentially sufficient to counterbalance damage to public notice done by broadening reissues. Having initial public notice within two years of patent issuance should adequately balance the needs of patentees and the public. See Brief of Appellant-Petitioner, In re Staats, No. 2010-1443 (Fed. Cir. Dec. 16, 2010), 2010 U.S. Fed. Cir. Briefs LEXIS 1111, at *9–11. That is, there is a clear quid pro quo—in exchange for a reissued patent, the patentee must “surrender” the original patent. Furthermore, given the recent transparency in publication and prosecution practice for pending applications and reissue applications at the USPTO, applicants already surrender a great deal of secrecy before issuance of a patent or reissue patent. Any broadening reissue patent claims would, of course, require support by the patent specification or other claims, which could have effectively been part of public knowledge for years before the broadening. Therefore, one can argue that nothing would serve to hamper a competitor from developing a competing and noninfringing product with improvements in the years it would undoubtedly take for the USPTO to wade through applications, reissues, and continuations of those reissues.

Thus, a classic property-rights question looms large in the field of patent law: where do the rights of inventors end and the rights of the public begin? The rights of inventors to modify the scope of their claimed inventions, even after the patent issues, can directly conflict with the concepts of public notice and the public domain. The Patent Act currently permits broadening of claims so long as a reissue application showing intent to broaden is filed within two years of the original patent issue. Over the years, however, this relatively straightforward statutory provision has sparked a spate of disputes over its meaning and application.

Despite these disputes, the CAFC reaffirmed Doll, and Judge O’Malley’s concurrence expanded on its reasoning:

The MPEP and PTO Rule 175 are, moreover, consistent with all relevant case law interpreting § 251. As the majority notes, Doll concluded that § 251’s time limits are applicable only to the first broadening reissue application and do not, accordingly, bar further broadening changes thereafter. [In re Doll] 419 F.2d. at 928. This court has twice reaffirmed that reading of § 251, moreover. See In re Graff, 111 F.3d 874, 877 (Fed. Cir. 1997) (“The court in Doll simply held that the reissue applicant, in the course of prosecution of the reissue application, was not barred from making further broadening changes in the claims.”); In re Fotland, 779 F.2d 31, 34 (Fed. Cir. 1985) (“In Doll the Court of Customs and Patent Appeals held that when a broadening reissue application was on file within the two year period, the claims could be further broadened after the two year period.”). As the majority opinion makes clear, the PTO’s efforts to distinguish those cases so as to avoid the need to comply with their holdings stretch credulity. (Slip. Op. at 15, concurrence at 4.)

Even with the benefit of the last forty years of reissue case law—including Doll, In re Fotland (779 F.2d 31 (Fed. Cir. 1985)), Buell v. Beckestrom (22 USPQ2d 1128 (BPAI 1992)), In re Graff (111 F.3d 874 (Fed. Cir. 1997)), and now Staats—broadening reissue practice will likely remain a headache for patent attorneys. For the time being, though, we have a pill for that headache. Without any changes from a possible en banc review, broadening reissue patent practice permits a scenario where, as Apple argued, the possible or eventual scope of the initial broadening need not be fully laid out in the first reissue application filed within the two-year statutory window, as long as the initial intent to broaden appears within that window. See Ex parte Staats, No. 2009-007162, 2010 WL 1725728, at *2 (BPAI Apr. 26, 2010). Tipping the scales slightly away from robust public notice, Staats (vis-à-vis Doll) essentially tells us that “any intent” to broaden within two years of patent issuance permits any broadening in a later—and properly filed—continuation or divisional reissue application. Whether this is the best remedy for a fairly persistent headache remains to be seen.

1 This post represents the thoughts and opinions of the author alone and not those of Finnegan LLP. It is intended to convey general information only and should not be construed as a legal opinion or as legal advice.

APPLE V MOTOROLA in the EPO and Germany – patentability of user interface features

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Guest Post by Paul Cole of the UK firm of Lucas & Co.

According to BBC News last Friday, Apple has succeeded in the German courts in enforcing a patent for a user interface feature for its mobile devices. The ruling demonstrates the value of European patents for "software" inventions where a "technical" effect can be demonstrated. The claims in the granted patents and the problems that they solve provide insight about what features of a user interface might be regarded as "technical" by the EPO. The advantages to a software developer of being able to patent innovative interface features that are important to the "look and feel" of the device and the software running on it are self-evident.

The affirmed patent is EP-B-1964022 which relates to the "slide to unlock" feature found in iPhones. The claim as granted is set out below:

A computer-implemented method of controlling a portable electronic device comprising a touch-sensitive display, comprising:
-detecting contact with the touch-sensitive display while the device is in a user-interface lock state;
-transitioning the device to a user-interface unlock state if the detected contact corresponds to a predefined gesture; and
-maintaining the device in the user-interface lock state if the detected contact does not correspond to the predefined gesture; characterized by
moving an unlock image along a predefined displayed path on the touch-sensitive display in accordance with the contact, wherein the unlock image is a graphical, interactive user-interface object with which a user interacts in order to unlock the device.

A copy of the decision is not yet available online, but study of the online file of the European patent application (which was not opposed after grant) is instructive. The Examining Division accepted that the provision of a device control method with visual feedback was a technical problem but objected that the claimed subject matter was obvious because dragging and dropping were known. In their reply, Apple argued that the objective technical problem was to provide a more efficient user-friendly procedure for unlocking a portable device and to provide a sensory feedback to the user regarding progress towards satisfaction of a user input condition that was required for unlocking to occur. As set out in the claim, the unlock image signalled to the user that the device was locked and simultaneously indicated a contact point that a user had to touch in order to unlock the device. The displayed path indicated to the user where and how the unlock image had to be moved and the current position of the image indicated progress already made towards the unlocked condition. The method was easier than in the prior art where a sequence of operations had to be memorised.

The second patent, EP-B-2059868 which relates to the handling of digital images, has not yet been ruled on by the German courts However, the granted claim and the reasons for grant are also of interest since any iPhone user will be familiar with the "Camera-Roll" feature in question.The main claim is set out below.

A computer-implemented method, comprising: at a device with a touch screen display:
-detecting a first movement of a physical object on or near the touch screen display;
-while detecting the first movement, translating a first digital object displayed on the touch screen display in a first direction, wherein the first digital object is associated with a set of digital objects; characterized in that:
-in response to display of a previously hidden edge of the first digital object and continued detection of the first movement, displaying an area beyond the edge of the first digital object;
-after the first movement is no longer detected, translating the first digital object in a second direction until the area beyond the edge of the first digital object is no longer displayed;
-detecting a second movement of the physical object on or near the touch screen display; and
-in response to detecting the second movement while the previously hidden edge of the first digital object is displayed, translating the first digital object in the first direction and displaying a second digital object in the set of digital objects.

It appears from the file of the granted patent (which again was not opposed) that the technical effect of allowing a user to navigate within an image and to switch between images with a minimum of user input types was sufficient to support patentability.

The EPO acted as International Searching Authority, International Preliminary Examination was not necessary since the written opinion accompanying the search was favourable to patentability, and no objections were raised on entry into the European regional phase. The advantages to US applicants of using the EPO as ISA and possibly subsequently IPEA if allowable subject matter is likely to be identified are also self-evident.

It is instructive to compare these two granted European patents with another "look and feel" application which was refused by the EPO (EP1249014, Appeal Board decision T 0050/07; US 6396520). Interestingly this is the only Apple patent or application which appears to have been the subject of proceedings before an EPO Appeal Board. The invention concerned transition of a window between a maximised state and an icon state on the taskbar.

The main claim before the EPO Appeal Board read:

A method of transitioning a window on a computer screen between an open state and a minimized state, comprising the steps of:
-obtaining location information associated with a first window position in the open state;
-obtaining location information associated with a second window position in the minimized state;
-defining a set of curves, wherein said curves connect two selected points that relate to a dimension of said window in its first position to corresponding points of said window in its second position; and
-displaying said window at successive positions within said curves from said first position to said second position while scaling said dimension of the window to fit within said curves in a manner so as to give the appearance of sliding.

The issues before the Appeal Board provide an object lesson in how the state of the art at the application date, the exclusions as to patentable subject matter under a.52 EPC and the limitations of the disclosure of the application itself can exert a collective "squeeze" such that the result is refusal.

The closest prior art was US 6002402 (Schacher, Symantec) which showed a window transitioning between a maximised and an icon state, and novelty was to be found in the set of curves through which the transition took place producing a "funnel-like" effect and the display of the window at successive positions while it was being scaled down.

Arguments based on improved functionality received short shrift, the Appeal Board observing:

"Moreover, the alleged ergonomic improvement achieved by directing the user's attention to the final destination of the minimized window, so that the user will remember its location and, thus, find it again more rapidly, is not convincing either. As far as the precise location of the minimized window on the task bar is remembered at all by the user, this will only be ergonomically valuable to the user for a short amount of time, after which it will normally be forgotten. Furthermore, as minimized windows are at any rate typically arranged according to some predefined scheme (typically added at the end of the task bar or returned to the corresponding application button on the task bar) the user would already know where to find the minimized window. Therefore, the board is not convinced that there would be any added ergonomic value in drawing the user's attention to the final destination of the minimized window in the claimed manner."

The differences between the invention and the prior art were therefore held to reside in the production of an aesthetic effect. Since that effect had no technical character, it could not in itself contribute to inventive step. However, it could be taken into account in formulating the objective technical problem over Schacher which was how to achieve the specified "funnel-like" effect. The information in the specification in this regard was limited, as indicated by the flowchart below:

The description did not show that there was any difficulty in the shifting and scaling operations, and on the contrary the description explained that a variety of techniques for doing this would be apparent to those of ordinary skill in the art. Unsurprisingly, therefore, the Appeal Board held that the achievement of the indicated technical effect was held to be straightforward for a designer of graphical user interfaces.

If Apple had drilled further down into the transition method than they did, was there anything else that could have saved the application? The look and feel of a window as it transitions to and from the taskbar is a striking effect which it is submitted impresses most users each time they see it happen. The specification explains that the display is updated line-by-line during the transition and the image is recalculated for each line, but that was evidently not enough for allowance and in any event would be easy to avoid. However, in addition to software the invention is in the field of moving images where visibility and human persistence of vision are important. Was there an optimum time, or a range of optimum times within which the transition could take place without interfering with the operation of the computer and which would display the most clearly visible and most aesthetically satisfying sequence of images to the user? It is possible that the range of times for which the "micro-movie" that users see at each window transition lasts would not have been held to be obvious and instead would have been held to require thought both from the operating system point of view and from the standpoint of user trials. A limitation along these lines could have been something that the Appeal Board might have found less easy to treat dismissively.

One take-away message for US applicants is the need to draft applications bearing in mind the exclusions under the EPC: stating as one of the main objects of the inventions "to provide more aesthetically pleasing operations" plays straight into the hands of an Examining Division or Appeal Board within the EPO and even if such objects can and should be stated, functional objects are best set out first. Another message is not to overlook the role of the human user in the invention: in the refused application the needs of the computer and the attractiveness of the micro-movie as a matter of shape were explained but what was necessary for the user to see the "micro-movie" and how long it should last were left unstated.

Whither Obviousness: Narrow Range Anticipated by Broader Range in Disclosure

Anticipation, Articles and Publications, Obviousness, Patent, , , ,

By Dennis Crouch

ClearValue v. Pearl River Polymers (Fed. Cir. 2012) (Opinion by Judge Moore, joined by Judges PROST and SCHALL)

This case presents a classic law school hypothetical of an invention that is anticipated but likely not obvious. According to the appellate panel, the prior art fully discloses and enables the invention but also teaches that the proposed invention is impractical and does not work well. As discussed below, however, the anticipation holding itself is somewhat controversial because it is based upon the conclusion that a broad range disclosure found in the prior art ("less than 150 ppm") anticipates the narrower range found in the claims ("less than 50 ppm").

A jury found ClearValue’s patent valid and infringed and the district court denied the defendants motions to set the patent verdict aside. On appeal the Federal Circuit reversed based upon the appellate court's own factual finding that a single prior art reference teaches and enables each element of the asserted patent claim.

Background: The patent at issue is directed to a process for clarifying water using a flocculated suspension of aluminum along with high molecular weight quarternized polymers. The listed inventor, Richard Haase continues to be an owner of the patent and also CEO of ClearValue. Haase has filed more than 50 water purification and energy related patents and is also a graduate of the University of Missouri (ChemE + Mathematics + Economics). The defendant, Pearl River was once ClearValue’s customer but later began making its own version of the patented process.  ClearValue and Haase sued for patent infringement and for trade secret violation (for using the process without authority even before he filed for patent protection).

Anticipation versus Obviousness: The appeal focused on anticipation. Pearl River argued that all of the elements of CV's asserted claim were previously disclosed in U.S. Patent No. 4,800,039 (Hassick). The jury found otherwise. As a matter of procedure, a jury's verdict must be supported by "substantial evidence." If not, it must be set aside either by the district court or on appeal. At trial, the defendants had presented their case that Hassick taught each element of the claimed invention while the plaintiffs pointed only to "teaching away" found in patent. Unfortunately for the plaintiffs, "teaching away" is legally irrelevant to the question of anticipation. See Celeritas Techs., Ltd. v. Rockwell Int'l Corp., 150 F.3d 1354, 1361 (Fed. Cir. 1998). Rather, under 35 U.S.C. § 102 a claim will be anticipated and therefore invalid if a single prior art reference describes "each and every claim limitation and enable[s] one of skill in the art to practice an embodiment of the claimed invention without undue experimentation." Quoting Am. Calcar, Inc. v. Am. Honda Motor Corp., 651 F.3d 1318, 1341 (Fed. Cir. 2011).

Genus Species Anticipation: The only gap in the prior art disclosure was that Hassick generally disclosed "low-alkalinity systems (i.e., 150 ppm or less)" and "alkalinity of between 60-70 ppm" while the asserted patent claimed "alkalinity less than or equal to 50 ppm." In its 2006 Atofina decision, the Federal Circuit addressed a similar genus-species situation involving a narrow claimed temperature range and a broader temperature range found in the prior art. Atofina v. Great Lakes Chem. Corp., 441 F.3d 991 (Fed. Cir. 2006). In Atofina, the court held that a broad genus range disclosure in the prior art did not anticipate the narrow species range claimed. There, both the hypothetical “person having skill in the art”  (PHOSITA) and the patentee agreed that there was something special or “critical” about the claimed temperature range. The court distinguished this case from Atofina based upon its factual conclusion that “there is no allegation of criticality or any evidence demonstrating any difference across the range.”  Based upon the logical analysis that the narrow range is not critically different from the broad range, the Federal Circuit held that the claimed narrow range was fully disclosed by the broad range and therefore is unpatentable.

Comment – Whither Obviousness: Interesting notion: The mechanism that the court used to distinguish this case from Atofina are very much akin to obviousness principles — looking essentially for synergy or unexpected results that make the narrow range qualitatively different from the broad range.  It seems to me, however, that if these obviousness principles can be used to extend the anticipatory scope of prior art, then other obviousness principles (such as teaching away) should also be relevant.

Trade Secret Negated by Prior Art?: The Texas jury found Pearl River liable for trade secret misappropriations. However, the district court rejected that conclusion based upon an implicit admission by ClearValue that all of the elements of the alleged trade secret were publicly known at the time and found in the Hassick reference.  On appeal, the Federal Circuit affirmed without further analyzing the extent that public availability of knowledge in the form of a third-party prior art document is sufficient to disqualify the knowledge as a trade secret. I am not an expert on Texas trade secret law, but the at least the Restatement of Torts is clear that a trade secret “may be a device or process which is clearly anticipated in the prior art.”

 

 

Supreme Court Affirms Broad Congressional Authority to Offer Intellectual Property Rights for Public Domain Works

Patent, ,

By Dennis Crouch

Golan v. Holder (Supreme Court 2011)

As widely expected, the Supreme Court today affirmed a lower court ruling that the "Copyright Clause" of the U.S. Constitution does not prevent Congress from providing copyright protection to public domain works. As also expected, Justice Breyer (joined by Justice Alito) dissented from the 6-2 decision.

The case was filed after Congress restored the copyrights to a thousands of foreign-authored works that had fallen into the public domain based upon the authors' failures to observes pre-Berne Convention formalities such as registration and notice ©. Many of the restored works had been known to be in the public domain for decades before the 1994 passage of the statute – the Uruguay Round Agreements Act. (Picasso's 1937 Guernica painting reproduced without a license below is an example of a work whose copyright was restored by the statute). The Supreme Court opinion is written as a further extension of the 2003 Eldred decision that affirmed Congressional power to extend copyright by an additional 20-years as part of the Sonny Bono Copyright Term Extension Act (CTEA). I had suggested to my students last semester that the best conceivable outcome for petitioners would be that the Court would determine that heightened scrutiny should apply to adjudge the free speech impact of the expansion of copyright law. However, the court also rejected that path.

The Supreme Court opinion authored by Justice Ginsburg rejected the three primary arguments made by petitioners:

  1. The Court held that allowing works from the public domain to be later copyrighted does not result in the potential for perpetual copyright in violation of the "limited terms" language of the Constitution. In its opinion, the court rejected any notion that the public has a "vested" right in works from the public domain. "Once the term of protection ends, the works do not revest in any rightholder. Instead, the works simply lapse into the public domain."
  2. The purpose of copyright law – to "promote the Progress of Science" – should be broadly interpreted to include both promotion of the creation of new work as well as promotion of knowledge and learning more generally. And, inducing of the dissemination of existing works is a permissible means to promote science. In addition, providing for access to foreign markets by acceding to treaty obligations can also provide an incentive for creation of new works and therefore promote the progress.
  3. In Eldred, the free speech rights embodied by the First Amendment to the U.S. Constitution do not limit Congress from modifying copyright law within its "traditional contours." Petitioners argued that the removal of elements from the public domain was outside of these traditional contours and that, under Eldred, the Supreme Court should use a heightened level of scrutiny to determine whether the new law offends free speech concerns. The Court rejected that analysis based upon its conclusion that Congress has, on several occasions, removed elements from the public domain and that, therefore, this action is within the traditional contours of copyright policy. In addition, the Court held that the impact of the particular law at issue was simply to place the foreign works in the copyright position that they would have occupied if the current copyright regime had been in place at the time. From that perspective, the new law fits well within the traditional contours of copyright law.

Impact on Patent Law: Copyright and patent share the same constitutional underpinnings and each is purposed to "promote the Progress" of their respective fields. This leads me to the conclusion that the reasoning in Golan would be equally applicable to Congressional expansions of patent law. In its decision, the Court explicitly refers to historic patent restoration bills as "informing" the inquiry into the scope of the clause as it applies to copyright. The converse should also be true. Thus, perhaps Congress would have authority to extend patent terms based upon a patentee's provision of data additional testing data or its promise to manufacture the product in the US.

An interesting caveat comes from the Court's 1996 Graham decision. That opinion includes the line that "Congress may not authorize the issuance of patents whose effects are to remove existent knowledge from the public domain, or to restrict free access to materials already available." In distinguishing that line, the Court wrote that the passage does not speak "to the constitutional limits on Congress' copyright and patent authority" but instead it addresses "an invention's very eligibility for patent protection." (quoting Eldred). The seeming distinction here is that Congress has more latitude in determining patent (and copyright) term or duration and less latitude in determining subject matter eligibility.

In dissent, Justice Breyer wrote, inter alia, that the "newness" requirement has always been a necessary and fundamental element of intellectual property (copyright and patent) protection. This newness requirement is offended by allowing copyright protection to be offered for works created long ago and already known to be in the public domain.

The political setup of this case is somewhat interesting because the government's pro-property position could be conceived as the conservative approach while Golan's more liberal position is suggesting that anyone should be able to use these works without payment to the creator. At the same time, the liberal Golan's legal argument was based upon the traditionally conservative suggestion of strong Constitutional limits on the powers of the federal government.

Note:

  • At several points in this article I would have linked to Wikipedia, but the site is not generally available today because of its ongoing protest against an expansion of intellectual property law that would require services such as Wikipedia and Google to remove links to sources of pirated material.

Bosch v. Pylon: jettisoning the presumption of irreparable harm in injunction relief

Injunctions, Patent, Patent Cases 2011, ,

By Jason Rantanen

Robert Bosch LLC v. Pylon Mfg. Corp. (Fed. Cir. 2011) Download 11-1096
Panel: Bryson (dissenting-in-part), O'Malley (author), Reyna

This is a very important Federal Circuit decision that firmly eliminates the presumption of irreparable harm in the context of injunctive relief.  While laying this issue to rest, however, the court offers an alternative idea: that even post-eBay, courts should (and implicitly must) consider the fundamental nature of patents as property rights when conducting an injunction analysis.

Wiper bladeThis case involves wiper blade technology.  Bosch, the patent holder, sued Pylon for infringement of a set of wiper blade patents.  At the trial court level, Bosch prevailed on a jury finding of validity and infringement before requesting entry of a permanent injunction.  The district court denied the injunction and Bosch sought interlocutory appeal of the denial while the damages determination was pending.

The presumption of irreparable harm is dead. Much attorney and commentator ink has been spilled over whether the presumption of irreparable harm following judgment of infringement and validity survived eBay Inc. v. MercExchange, L.L.C.  The Federal Circuit's opinion in Bosch v. Pylon should put an end to any further debate.  "We take this opportunity to put the question to rest and confirm that eBay jettisoned the presumption of irreparable harm as it applies to determining the appropriateness of injunctive relief."  Slip Op. at 10.  Although not expressly stated by the court, the unequivocal implication is that this is as true for preliminary injunctions as it is for permanent injunctions.

Long live the requirement that courts acknowledge the fundamental nature of patents as property rights! While affirming the death of the presumption of irreparable harm, Bosch simultaneously suggests an alternative approach that perhaps may turn out not all that different: the importance of recognizing that patents are property rights when performing the injunction analysis.

Although eBay abolishes our general rule that an injunction normally will issue when a patent is found to have been valid and infringed, it does not swing the pendulum in the opposite direction. In other words, even though a successful patent infringement plaintiff can no longer rely on presumptions or other short-cuts to support a request for a permanent injunction, it does not follow that courts should entirely ignore the fundamental nature of patents as property rights granting the owner the right to exclude.

Slip Op. at 11. In other words, "While the patentee’s right to exclude alone cannot justify an injunction, it should not be ignored either."  Id. 

In the end, however, Bosch makes little use of this new approach, instead focusing on other types of errors committed by the district court.   Thus, it remains to be seen whether a failure to consider the "fundamental nature" of patent rights will be grounds for reversal. 

Reversal of district court denial of permanent injunction: In reversing the denial of an injunction, the court applies an approach reminiscent of the Supreme Court's own jurisprudence in recent years. 

Over the past quarter-century, this court has encountered many cases involving a practicing patentee seeking to permanently enjoin a competitor upon an adjudication of infringement. In deciding these cases, we have developed certain legal standards that inform the four-factor inquiry and, in particular, the question of irreparable harm. While none of these standards alone may justify a general rule or an effectively irrebuttable presumption that an injunction should issue, a proper application of the standards to the facts of this case compels the conclusion that Bosch is entitled to the injunction it seeks. It is in ignoring these standards, and supplanting them with its own, that the district court abused its discretion.

Slip Op. at 12.  Under this precedent, the court identifies two related legal errors and an error of judgment; taking the all the factors together, the majority concludes, compels the entry of a permanent injunction. The legal errors consisted of the district court's conclusions that the presence of additional competitors in the market, without more, cuts against a finding of irreparable harm, as did the non-core nature of Bosch's wiper blade business in relation to its business as a whole.  "Injuries that affect a “non-core” aspect of a patentee’s business are equally capable of being irreparable as ones that affect more significant operations."  Slip Op. at 16.  Ultimately, the trial court's error "arises from its conclusion that, if a fact supports the granting of an injunction, its absence likely compels the denial of one.  That is not the law, however."  Slip Op. at 17. 

Dissenting in part, Judge Bryson disagreed with the majority's decision to remand with instructions to enter an injunction.  While Judge Bryson would not have affirmed the denial of an injunction, nor would he have expressly reversed, instead preferring to remand the matter back to the district court for further findings of fact and a reweighing of the equities.  

Classen Immunotherapies v. Biogen: The Broad, Broad Scope of Statutory Subject Matter

Patent, , , , ,

By Jason Rantanen

Classen Immunotherapies, Inc. v. Biogen Idec (Fed. Cir. 2011) Download 06-1634-1649
Panel: Rader (offering "additional views"), Newman (author), Moore (dissent)

There is no doubt that the Federal Circuit continues to struggle mightily with Section 101.  If Myriad were not enough evidence of this, Classen Immunotherapies – and Judge Rader's additional views in particular – should remove all doubt.

Classen Immunotherapies holds three patents that it contends are infringed by virtually everyone: Patent Nos. 6,638,739; 6,420,139; and 5,723,283.  According to the patents, their inventor, Dr. Classen, has discovered that "the schedule of infant immunization for infectious diseases can affect the later occurrence of chronic immune-mediated disorders…and that immunization should be conducted on the schedule that presents the lowest risk with respect to such disorders."  Slip Op. at 5. Claim 1 of the '739 patent is illustrative of Classen's broad claim scope:

1. A method of immunizing a mammalian subject which comprises:

(I) screening a plurality of immunization schedules, by

(a) identifying a first group of mammals and at least a second group of mammals, said mammals being of the same species, the first group of mammals having been immunized with one or more doses of one or more infectious disease-causing organism-associated immunogens according to a first screened immunization schedule, and the second group of mammals having been immunized with one or more doses of one or more infectious disease-causing organism-associated immunogens according to a second screened im-munization schedule, each group of mammals having been immunized according to a different immunization schedule, and

(b) comparing the effectiveness of said first and second screened immunization schedules in pro-tecting against or inducing a chronic immune-mediated disorder in said first and second groups, as a result of which one of said screened immuni-zation schedules may be identified as a lower risk screened immunization schedule and the other of said screened schedules as a higher risk screened immunization schedule with regard to the risk of developing said chronic immune mediated disorder(s),

(II) immunizing said subject according to a subject immunization schedule, according to which at least one of said infectious disease-causing organism-associated immunogens of said lower risk schedule is administered in accordance with said lower risk screened immunization schedule, which administration is associated with a lower risk of development of said chronic immune-mediated disorder(s) than when said immunogen was administered according to said higher risk screened immunization schedule.

Classen asserts that the '139 and '739 patents are infringed "when a health care provider reads the relevant literature and selects and uses an immunization schedule that is of lower risk for development of a chronic immune-mediated disorder."  Slip Op. at 7.  According to Classen, this includes "the act of reviewing the published information, whether or not any change in the immunization schedule is made upon such review."  Id. The '283 patent is similar, except that it does not include the subsequent step of selecting an immunization schedule.  Classen asserts that the '283 patent is infringed "when a person reviews relevant information, whether the person is a producer of vaccines, a health care provider, or a concerned parent."  Slip Op. at 8.  The three patents list several hundred preexisting references relating to immunization schedules, the occurrence of immune-mediated disorders, and studies and reports from the field.

The district court granted summary judgment of invalidity of the asserted claims on the ground that they claimed an abstract idea.  On initial appeal, the CAFC affirmed, with Judge Moore penning an extremely short affirmance.  Following Bilski, the Supreme Court grant-vacate-remanded the case to the Federal Circuit, where it was assigned to the panel of Rader, Newman, and Moore.

 The Majority: Writing for herself and Judge Rader, Judge Newman concluded that while the '283 patent failed to satisfy Section 101, the '139 and '739 patent did.  Although the '139/'739 patents included a mental step, "precedent has recognized that the presence of a mental step is not of itself fatal to § 101 eligibility."  Slip Op. at 15.  Because the claims of these patents include the physical step of immunization, the majority held, they were directed to a "specific, tangible application."  Slip Op. at 18.  This was sufficient to assure the majority, which declined to offer any additional reasoning, of their subject matter patentablity.    On the other hand, the majority held, the '283 patent attempted to claim an abstract idea unfettered to any physical steps.  Thus, it was invalid under Section 101.

The Dissent: Judge Moore disagreed entirely.  "While I confess the precise line to be drawn between patentable subject matter and abstract idea is quite elusive, at least for me, this case is not even close."  Dissent at 6.  All three claims simply constitute abstract subject matter: "Having discovered a principle – that changing the timing of immunization may change the incidence of chronic immune mediated disorders – Classen now seeks to keep it for himself."  Dissent at 8.  While Judge Moore reserves her harshest criticism for the '283 patent, her views on the '139/'739 reach the same conclusion.  "The immunization step of the '739 patent, like updating the alarm limit in Parker v. Flook, 437 U.S. 584 (1978), is nothing more than post-solution activity."  Id. at 9.  That post-solution activity "does not transform the unpatentable principle – that a correlation exists between vacination schedules and incidence of chronic immune disease – into a patentable process.'  Id. at 10.

Judge Rader's Additional Views:  In an unusual move, Judge Rader, joined by Judge Newman, wrote separately to express frustration with the constant use of Section 101 challenges by accused infringers. 

In the last several years, this court has confronted a rising number of challenges under 35 U.S.C. § 101. The language of § 101 is very broad. Nevertheless, litigants continue to urge this court to impose limitations not present in the statute.

For a variety of policy reasons, Judge Rader urges, "[t]his court should decline to accept invitations to restrict subject matter eligibility."  Rader additional views at 2.  Chief among these is the problem that "eligibility restrictions usually engender a health dose of claim-drafting ingenuity," evasions that "add to the cost and complexity of the patent system and may cause technology research to shift to countries where protection is not so difficult or expensive."  Id. at 3.  

Comments: I am troubled by several aspects of the court's opinions.  Particularly concerning is the majority's apparent desire to abdicate the subject matter inquiry altogether, a desire expressed both implicitly, in the majority opinion's unwillingness to offer any substantive reasoning to support its ruling on the '139/'739 patents, and explicitly in Judge Rader's policy statement.  This approach seems problematic on its own, but becomes even more so when coupled with the numerous Supreme Court opinions relating to the issue of subject matter patentability – an area of traditional significance in the patent sphere.  While the Court may have repeatedly suggested that broad categorical rules may be inpermissible, it has nowhere suggested that subject matter arguments lack merit as a class, or that subject matter arguments must fail as a matter of course.  In particular, I find it difficult to see how the '139/'739 patents possibly survive scrutiny under Parker v. Flook, 437 U.S. 584 (1978).  The mental step itself is not a patentable subject, so how can combining it with an act (or the lack of an act) that has previously been done without the mental step make it patentable?   

Nor does Section 101 seem to present such a unique problem that the Federal Circuit should adopt a policy of declining to address arguments relating to it.  Even as Judge Rader criticizes the case law limiting subject matter patentablity because it encourages costly legal design-arounds, he joins with an opinion that does precisely that by drawing the line between the two sets of claims.  Mental step claims are now clearly out; mental step plus claims are now in.  And since every process is simply a link in a longer process, claim drafters need only look one step forward to avoid the effects of the majority's ruling.  Nor should the effects of Judge Rader's parade of horribles be limited to Section 101 – they strike me as equally applicable to Section 102, Section 103, and especially Section 112. 

 

 

 

 

Eon-Net v. Flagstar Bancorp: Exceptional Case after Remand

Patent, , , ,

By Jason Rantanen

Eon-Net LP v. Flagstar Bancorp (Fed. Cir. 2011) Download 09-1308
Panel: Lourie (author), Mayer and O'Malley

This decision is an important opinion in the area of litigation sanctions entered against a patentee, and should be read in conjunction with two cases issued earlier this year, iLor v. Google, 631 F.3d 1372 (Fed. Cir. 2011), and Old Reliable v. Cornell, 635 F.3d 539 (Fed. Cir. 2011).  Patently-O commentary on those cases can be found here and here.

Background
Eon-Net is a patent holding company formed to enforce the three patents in suit, which it did with vigor.  While most of its lawsuits resulted in early settlements or dismissals, Eon-Net's suit against Flagstar took a different turn.  The district court initially entered summary judgment of non-infringement on the sua sponte ground "that the written description limited the claims to processing information originating from a hard copy document and Eon-Net's position that the claims covered the processing of information entered on a website was baseless," and awarded Rule 11 sanctions.  Slip Op. at 7.  However, that decision was vacated by the Federal Circuit because Eon-Net had not been given an opportunity to respond, and thus "it was impossible to determine if Eon-Net's claim construction and infringement positions were without merit."  Id. at 8.

On remand, the case was reassigned to a new judge and the parties engaged in the claim construction process, after which the court again limited the disputed elements to information originating from a hard copy document.  Eon-Net stipulated to non-infringement.  Upon motion by Flagstar, the district court found the case exceptional under 35 U.S.C. 285 and in violation of Rule 11 of the Federal Rules of Civil Procedure. On appeal, the CAFC first affirmed the district court's claim construction before turning to the exceptional case finding.

Many Varieties of Misconduct Can Support an Exceptional Case Finding
Before engaging in analysis of the specific bases for the district court's exceptional case finding, the CAFC first noted that many varieties of misconduct can support an exceptional case finding under 35 U.S.C. § 285: lodging frivolous filings, engaging in vexatious or unjustified litigation, and litigation misconduct and unprofessional behavior.  The court reiterated, however, that absent litigation misconduct or misconduct in securing the patent, "sanctions under § 285 may be imposed against the patentee only if both (1) the patentee brought the litigation in bad faith; and (2) the litigation is objectively baseless."  Slip Op. at 17.

Eon-Net Filed Objectively Baseless Litigation in Bad Faith
Affirming the district court's exceptional case finding, the Federal Circuit agreed that this lawsuit was objectively baseless, filed in bad faith and for an improper purpose.  After distinguishing iLor v. Google, in which the CAFC also addressed the issue of whether a claim construction was objectively baseless, the court turned to the question of whether Eon-Net had filed the lawsuit in bad faith and for an improper purpose, concluding that it had:

In particular, the district court found that Eon-Net’s case against Flagstar had “indicia of extortion” because it was part of Eon-Net’s history of filing nearly identical patent infringement complaints against a plethora of diverse defendants, where Eon-Net followed each filing with a demand for a quick settlement at a price far lower than the cost to defend the litigation.

Slip Op. at 22.  This strategy of exploiting the high cost to defend complex patent litigation in order to extract nuisance value settlements constituted bad faith.  The court pointed to Eon-Net's pattern of filing complaints, then demanding quick settlements at a price far lower than the cost of litigation.  Parties must either expend significant resources to defend against the suit – as Flagstar did in this case – or give in to the nuissance settlement demand.  FIling such a meritless lawsuit also is also a waste of judicial resources, as it "unnecessarily require[s] the district court to engage in excessive claim construction analysis before it is able to see the lack of merit of the patentee's infringement allegations."  Slip Op. at 23. 

Of course, patentees should be able to enforce their patent rights or offer licensing terms.  Nevertheless, "the appetite for licensing revenue cannot overpower a litigant’s and its counsel’s obligation to file cases reasonably based in law and fact and to litigate those cases in good faith."  Slip Op. at 24.

Comment: although the CAFC affirmed the district court's finding that Eon-Net had acted with an improper purpose, it did not suggest that that requirement should be grafted onto the "bad faith" element.

The CAFC also affirmed the district court's finding that Eon-Net and Zimmerman had engaged in litigation misconduct and its imposition of Rule 11 sanctions.

In re Yasuhito Tanaka – Addition of Narrower Claims is Appropriate Basis for Reissue

Patent

By Jason Rantanen

In Re Yasuhito Tanaka (Fed. Cir. 2011) Download 10-1262
Panel: Bryson, Linn (author), Dyk (dissent)

Patent No. 6,093,991 issued to Yasuhito Tanaka in 2000.  Two years later, Tanaka filed a reissue application seeking to broaden the scope of independent claim 1.  During the reissue proceeding, Tanaka gave up the broadening attempt, instead presenting unamended claims 1-7 and new claim 16 depending from claim 1. 

The examiner rejected claims 1-7 and 16 on the ground that, because Tanaka's declaration did not specify an error that broadens or narrows the scope of the claims of the issued patent, there was no error correctable by reissue.  A seven judge panel of the Board of Patent Appeals and Interferences affirmed the examiner's decision in a precedential opinion, concluding that 35 U.S.C. § 251 "disallow[s] reissue applications that simply add narrow claims to the reissue patent when no assertion of inoperativeness or invalidity for the reasons set forth in § 251 can be made by the patentee" and finding that Tanaka was impermissibly seeking an additional claim on reissue 'in order to hedge against the possible invalidity of one or more of the original claims.'"  Slip Op. at 4 (quoting Board decision).  

Majority: Addition of Narrower Claims is Permitted
On appeal, Judges Linn and Bryson disagreed with the Board's holding.  Drawing upon a rule articulated in dicta by Judge Rich in In re Handel, 312 F.2d 943, 946 n.2 (CCPA 1963), an implication of the rule in In re Muller, 417 F.2d 1387 (CCPA 1969), and an assumption of the rule in Hewlett-Packard Co. v. Bausch & Lomb, Inc., 822 F.2d 1556 (Fed. Cir. 1989), the majority held that longstanding precedent and the principles of stare decisis permit patent applicants to file a reissue application solely to add additional claims:

Even though the rule that adding a dependent claim as a hedge against possible invalidity is a proper reason to seek reissue has seemingly never been formally embodied in a holding of this court or its predecessor, articulation of the rule in Handel was not simply a passing observation—it was a considered explanation of the scope of the reissue authority of the PTO in the context of a detailed explanation of the reissue statute. Based on this court’s adoption of that rule and its adherence to the rule in both Muller and Hewlett-Packard, this court rejects the Board’s contrary ruling.

Judge Dyk's Dissent
Rejecting the majority's shaky reliance on Handel, Muller, and Hewlett-Packard, Judge Dyk instead pointed to even older precedent – a nineteenth century Supreme Court decision – that, in his view, rendered reissue unavailable when nothing in the original patent was being corrected.

It is plausibly suggested that ‘the claim could be made perfect in form, and consistent with the description of all that portion of the apparatus which relates to the invention, by simply striking out the letter of designation for the upper chest, J, and the letter of designation for the conveyor shaft of that chest, K.’ But that the inventor did not and does not intend so to amend his claim is conclusively shown by his having repeated the same claim, including these very letters of designation, in the [retained] claim of the reissued patent. His attempt is, while he retains and asserts the original claim in all particulars, to add to it an-other claim which he did not make, or suggest the possibility of, in the original patent . . . .

To uphold such a claim . . . would be to disregard the principles governing reissued patents, stated upon great consideration by this court at the last term in the case of Miller v. [Bridgeport] Brass Co., 104 U.S. 350, and since affirmed in many other cases.

Dissent, quoting Gage v. Herring, 107 U.S. 640, 645 (1883) (emphasis added by Judge Dyk).  In Judge Dyk's view, Gage thus foreclosed the ability of applicants to retain the original claims without alteration or amendment, or at a minimum created enough conflict with the cases cited by the majority that the court was free to address the issue on the merits.  

Comment: As both the majority and dissent seem to implicitly recognize, neither is on particularly solid ground in terms of prior decisions.  The majority relies on a rule that it itself admits is dicta, but nevertheless characterizes as the product of longstanding precedent.  The dissent foundation's is even less stable, being built on vague language from an opinion that involved an earlier version of § 251.  It is not at all clear from Gage that the Court was concerned with the mere addition of a new claim or instead with the addition of a broadening claim, although after reading Gage I think the majority has the more correct interpretation.  In the end, though, the majority supports its opinion not just with citation to Handel, but also with reasoning sufficient enough to provide an independent basis for the ruling.

Today’s Study: The BPAI’s Response to its Backlog

Patent,

By Dennis Crouch

Earlier this week, I directed your attention to the fact that the Board of Patent Appeals (BPAI) now has a backlog of more than 20,000 pending appeals. The appeal backlog continues to rapidly rise.  Each month for at least the past year, the BPAI has disposed of only about half of the number of cases that it received.  USPTO Director David Kappos and his senior staff recognize the appeal backlog as a serious issue. Their initiatives include more judges; a soon-to-be-announced new Chief Judge, and potentially raising the fees associated with filing an appeal (perhaps only if the PTO is given fee-setting authority).

For a number of reasons, the Board of Patent Appeals (BPAI) typically writes an opinion in each and every case decided on the merits.   I wanted to see whether the Board’s opinion writing methods have changed as some sort of response to the growing backlog.

For today’s study, I downloaded all of the BPAI’s published ex parte merits decisions from three specific time periods: February 2009 (407 opinions), January 2010 (455 decisions), and January 2011 (457 opinions).*  I then wrote a script to count the number of words in each decision and graphed the results.

PatentLawImage102

As the chart shows above, in a two-year period the average number of words per BPAI opinion has dropped from over 3,000 words per opinion to just about 2,000 words per opinion.  A few large opinions each year skew the average upward. However, the change in the median word length is even more dramatic. The median opinion from February 2009 includes 60% more words than the median opinion from January 2011.  As a check, I also included the outcome (Affirmed, Affirmed-in-Part, Reversed) and technology center as control variables. Those did nothing to reduce this reported effect. 

Of course, the number of words in an opinion does not necessarily indicate that the decisions are lower quality or even that the opinions are lower quality.  However, the change at least suggests that the BPAI judges are spending less time drafting the opinions.  

Jason Rantanen has written several recent posts on the Federal Circuit’s Rule 36 affirmances. In those cases, the Federal Circuit simply affirms the lower court decision without writing an opinion. “Rule 36” refers to Rule 36 of the Rules of Practice of the Court of Appeals for the Federal Circuit. That rule provides the court with express permission to enter a judgment of affirmance without opinion when the court determines that the lower court should be affirmed and an opinion would have no precedential value.  The BPAI does not have a parallel to Rule 36 in its standard operating procedures. 

Notes

  • * I used February 2009 because in a glitch for January 2009 data.
  • I was just directed to Aaron Feigelson’s recent post on this topic.

Sometimes a Pig is Just a Pig

Copyright, Infringement, Patent

PatentLawImage067Moody v. Morris, PBS, et al. (Fed. Cir. 2010)

In 1993 and 1994 Kyle Morris and William Kirksley filed several patent applications all directed toward animated captioning “coordinated with oral-word utterances.”  The idea was to actually see the words coming from the mouth of the speaker in a movie or television program. The patents were assigned to their new company ReadSpeak.   Morris brought-in Don Moody to help develop a new children's television show. However, after a falling-out, Moody left and started the successful Word World show that was broadcast on PBS beginning in 2007.  Word World does not use captions streaming from the mouths of actors. Rather, objects and characters in the television show are made-up of word-objects.  As the district court explained “in the Word World universe, a 'bee' consists of the word 'bee' shaped like the object that it names; the character 'CAT' is made up of the letters 'C-A-T.'”  The image below shows an ear of corn, a pie, a pot, and a pig.

PatentLawImage068

In the lawsuit, Morris alleged both patent and copyright infringement. The district court rejected both allegations on a 12(b)(6) motion-to-dismiss. 

On patents, the court held that the word-objects found in Word World could not satisfy “word utterance” limitation of the patent claims.

On copyright, Morris argued that he owned a copyright on the phrase “where words come alive” that Word World uses as its slogan as well as a copyright in the “teaching methodology” that he had developed. The district court rejected both of these arguments: first holding that the phrase “where words come alive” could not be protected by copyright because it is merely a short phrase or slogan; then holding that the “teaching methodology” could not be protected by copyright because copyright does not “extend to any idea, procedure, process, system, [or] method of operation . . . regardless of the form in which it is described, explained, illustrated, or embodied . . . “ 17 U.S.C. § 102(b).

On appeal, the Federal Circuit affirmed without opinion. 

The most interesting aspect of the appeal was lead-in by Judge Gajarsa where he warned the lawyers to remain civil:

The court has a few words to say on civility in the courtroom.  I think that it is very very important for attorneys who happen to be officers of the court to conduct themselves in such a manner that at least the record would reflect that they accept each other in the courtroom and outside of the courtroom. A confrontational basis should not exist and should not be part of the record. And, if we read this record, there are a number of issues that could be confrontational and very much out of order with respect to the treatment of the attorneys with each other. You can represent your clients to the best of your abilities . . . . but you don't have to have difficulties among yourselves. I think that it is very very important to maintain civility in our practices.  Especially since lawyers are officers of the court.

Documents:

Cancer Research Technology v. Barr Laboratories: Prosecution Laches and Inequitable Conduct

Inequitable Conduct, Infringement, Ownership, Patent, Patent Cases 2010, Patent Prosecution, Pharma, , ,

By Jason Rantanen

Cancer Research Technology Ltd. v. Barr Laboratories, Inc. (Fed. Cir. 2010)
Panel: Newman, Lourie (author), Prost (dissenting)

Although overshadowed by the en banc Federal Circuit arguments in TheraSense v. Becton Dickinson this morning, Cancer Research Technology v. Barr Laboratories may provide a preview of what the opinions in TheraSense could look like – although it doesn't necessarily indicate which view of inequitable conduct will ultimately prevail.  In Cancer Research, Judges Lourie and Newman reversed a district court finding of prosecution laches and inequitable conduct, while dissenting Judge Prost would have reached the opposite result.

The patent at issue (the '291 patent) involved a set of thirteen tetrazine derivatives that the original 1982 specification identified as possessing anticancer activities based on animal studies.  During the first nine years of prosecution, the examiner repeatedly rejected the claims due to lack of utility; rather than file a response to the office actions, the applicant instead filed continuation after continuation.  In 1991, Cancer Research obtained ownership of the patent application and shortly thereafter responded to the examiner's arguments.  The patent issued in 1993 and expires in 2014. 

Following Cancer Research's clinical testing, the FDA approved one of the compounds covered by the '291 patent (marketed as TEMODAR) for the treatment of one type of cancer in 1999 and a second in 2005.  In 2007, Barr Laboratories filed an Abbreviated New Drug Application ("ANDA") for a generic form of TEMODAR.  Cancer Research sued Barr for infringement four months later.  During the district court proceedings, the parties stipulated to validity and infringement and, after a bench trial, the court found that the patent was unenforceable due to prosecution laches and inequitable conduct. 

Prosecution Laches
Given the nearly ten-year delay before any meaningful response to the examiner's rejection was filed, Barr contended that the patent was unenforceable due to prosecution laches.  The district agreed, concluding that the delay in prosecution was unreasonable and unexplained.

On appeal, the majority reversed the finding of prosecution laches, holding that the doctrine requires not just unreasonable delay, but also a showing of prejudice.  The majority further held that "to establish prejudice, an accused infringer must show evidence of intervening rights, i.e., that either the accused infringer or others invested in, worked on, or used the claimed technology during the period of delay."  (Slip Op. at 9).  Here, there was no evidence of intervening rights during the prosecution period, such as evidence showing that someone other than the patent holder attempted to develop the claimed compounds.  Even Barr itself waited until 2007 – four years later than required – before filing its ANDA.  The majority also noted that there was no public harm: in the absence of the patent, Cancer Research likely would not have been incentivized to develop TEMODAR at all. 

Writing in dissent, Judge Prost rejected the notion that prosecution laches requires prejudice, let alone intervening rights; rather, under her reading of the precedent such a requirement is not part of the laches determination.  Furthermore, in her opinion, both Barr and the public were harmed by Barr's inability to market a generic version of TEMODOR.

Comment: I'm unconvinced by Judge Prost's argument on this point.  If she is correct, then the '291 patent was never enforceable – be it in 2007, when Barr filed its ANDA, or 1993, when it issued.  Yet without an enforceable patent, Cancer Research would never have developed TEMODOR, let alone engaged in the expensive Phase III clinical studies necessary to demonstrate its safety and efficacy.  Thus, the "harm" to the public would been greater in the absence of the '291 patent, not less.

Inequitable Conduct
The majority also rejected the district court's finding of inequitable conduct, while the dissent reached the opposite conclusion.  Both opinions focused on the subject of intent to deceive. 

The inequitable conduct issue in this case revolved around an extensive series of articles by an inventor on the '291 patent that presented data from post-application clinical trials of the claimed compounds.  These articles included conclusions indicating that some of the claimed compounds demonstrated high toxicity and low anticancer activity, which the district court found to be highly material to the patent claims because it directly contradicted statements in the '291 patent regarding the compounds' utility in treating cancers, as well as the patentability of a broadly written claim.

The majority, following the "intent cannot be inferred from materiality" line of thought, concluded that the district court's only basis for finding intent was its determination that the withheld articles were highly material.  "Because the district court did not rely on any other evidence to support its finding of deceptive intent beyond that used to find the withheld data material, the court in effect relied solely on its materiality finding to infer intent to deceive."  Slip Op. at 17.  The majority also concluded that the inference of deceptive drawn by the district court about the inventor's publication of data was not the only reasonable inference; rather, the broad publication of this data in multiple articles is inconsistent with an inference of intent to deceive.  Thus, an equally reasonable inference is that the inventor did not appreciate the potential importance of the published data to the patentability of the patent claims.

Judge Prost, again writing in dissent, would have affirmed the district court's determinations.  In contrast to the majority, which required independent evidence of intent, her view of inequitable conduct is that it does not require separate evidentiary bases for materiality and intent; rather it is appropriate to cite to the same evidence for materiality and intent.  Furthermore, here there was additional evidence of intent in the form of the district court's credibility findings, "which are virtually unreviewable by this court."  Thus, under her approach to intent in inequitable conduct, "[w]e should not draw inference that the district court has already excluded based on its own credibility findings."

Comment: The majority and dissent's views on intent can be partially reconciled under the position that, although an intent to deceive may be partially based on evidence of materiality, materiality cannot be the sole basis for the finding of intent to deceive.  Here, in the majority's opinion, the finding of materiality was the sole basis for the intent to deceive determination, because the only additional factor – the credibility determination – was based on an erroneous inference.  On the other hand, in the dissent's view credibility determinations are unreviewable and are sufficient to provide the "beyond the materiality" support for an intent to deceive finding.

Fujitsu Ltd. v. Netgear

Infringement, Patent, Patent Cases 2010, ,

By: Jason Rantanen

Fujitsu Ltd. v. Netgear (Fed. Cir. 2010)
Panel: Lourie, Friedman, and Moore (author)

Indirect infringement claims are particularly relevant in the context of industry-wide interoperablity standards, because frequently companies simply manufacture products capable of particular behavior while the relevant methods are actually carried out by end users.  Patent No. 4,974,952 raises an example of this issue.  The '952 patent claims a method of sending wireless messages involving fragmenting the messages in a particular manner.  Philips, the patent holder, contended that any product that complied with certain sections of the IEEE 802.11 standard infringed the asserted claims, and that by complying with the standard Netgear indirectly infringed the '952 patent (presumably by selling the accused products).

The district court granted summary judgment of noninfringement in favor of Netgear, determining that Phillips had failed to establish either contributory infringement or inducement.  On appeal, the Federal Circuit determined that the district court had erred on some points, but nevertheless affirmed summary judgment of noninfringment with respect to all but four products. 

Use of Standards to establish Direct Infringement: The court's discussion of the use of industry-wide standards to prove infringement may become the most widely-cited portion of this opinion.  After considering the parties' arguments, along with that of amicus Association of Corporate Counsel Intellectual Property Committee, the court held that:

[A] district court may rely on an industry standard in analyzing infringement. If a district court construes the claims and finds that the reach of the claims includes any device that practices a standard, then this can be sufficient for a finding of infringement. We agree that claims should be compared to the accused product to determine infringement. However, if an accused product operates in accordance with a standard, then comparing the claims to that standard is the same as comparing the claims to the accused product….An accused infringer is free to either prove that the claims do not cover all implementations of the standard or to prove that it does not practice the standard.

…

We acknowledge, however, that in many instances, an industry standard does not provide the level of specificity required to establish that practicing that standard would always result in infringement. Or, as with the ’952 patent, the relevant section of the standard is optional, and standards compliance alone would not establish that the accused infringer chooses to implement the optional section. In these instances, it is not sufficient for the patent owner to establish infringement by arguing that the product admittedly practices the standard, therefore it infringes. In these cases, the patent owner must compare the claims to the accused products or, if appropriate, prove that the accused products implement any relevant optional sections of the standard.

Slip Op. at 8-9. Applying this holding, the panel concluded that because the fragmentation feature in the 802.11 standard was optional, and (although present in the Netgear devices) was turned off by default, Phillips was required to prove that customers actually used the infringing feature. On this point, the Federal Circuit agreed with the district court that there was only evidence of actual infringing use with respect to four products.

Substantial Noninfringing Uses: The Federal Circuit applied the analysis of i4i v. Microsoft, focusing on the specific feature at issue.  Here, because the specific feature was infringing when it was activated, there was no substantial noninfringing use.

Material Part of the Invention: Phillips accused two classes of products: those that only fragmented messages and those that only defragmented messages.  Because the claims of the '952 patent were specifically drawn to the fragmenting steps, not the defragmenting steps, the district court concluded that the accused defragmenting products could not infringe.  Phillips argued that because fragmentation necessarily infringes the asserted claims, than the defragmenting products are useful only for infringement, and Netgear should be liable for them.  The panel rejected this argument: even though the usefulness of the claimed method would be lost without data receivers capable of defragmenting messages, the lack of defragmentation steps in the claims means that products that only defragment messages cannot constitute a "material part" of the invention. 

Mental State Components of Indirect Infringement: In analyzing the respective mental state components for contributory infringement and inducement of infringement, the panel found that Netgear's receipt of letters identifying the '952 patent and alleging infringement by any 802.11 compliant standard were sufficient to survive summary judgment.

Comment: my current research focuses on mental state issues in patent law, including in the context of indirect infringement.  In the near future, I'll discuss this subject in more depth. 

Other issues: In addition to the above indirect infringement issues, the Federal Circuit also concluded that the district court had erred in limiting damages based on the patent marking statute (35 U.S.C. § 287), because the claims covered a method and § 287 does not apply where the patent is directed to a process or method.  The Federal Circuit also analyzed the district's construction of relevant claim terms in Patent Nos. 6,018,642 and 6,469,993, and affirmed its grant of summary judgment of noninfringement of those patents.  The analysis in this section may be particularly relevant to those operating in the wireless technology area.

Follow-up comment: Michael Barclay also noted the importance of the standard-as-evidence holding on his blog, IPDuck.  See http://ipduck.blogspot.com/2010/09/federal-circuit-approves-use-of.html