Tag Archives: anticipation

America Invents Act – First to Invent and a Filing Date Focus

Patent, , , ,

Earlier this week, the Senate overwhelmingly passed (95–5) the America Invents Act (S.23 or AIA) which represents a major patent reform initiative.  Many are saying this is the largest patent reform measure since the 1952 Patent Act.  I would argue that two reforms from the 1980’s are at least as important as the AIA: Federal Courts Improvement Act of 1982 (establishing the Court of Appeals for the Federal Circuit) and the 1984 Hatch-Waxman Act (establishing the modern generic drug system). 

Of course, neither of those 1980’s reforms rewrote the core patent law fundamentals of novelty and nonobviousness. In this post, I look at how the AIA re-defines these doctrines.

Filing Date Prior Art: Under the new law, Sections 102 and 103 of the patent act would be largely rewritten.  The new Section 102(a) defines novelty and eliminates invention-date rights (with the exceptions noted below).  The new focus a patent applicant’s “effective filing date” and whether prior art existed before that date. As a general matter, this shift expands the scope of potential prior art and therefore should make it more difficult to obtain patent protection.  In addition to the date change, the statute adds a new catch-all phrase to the scope of prior art. Courts will be asked to consider what it means to be “otherwise available to the public.”  Under the new provision classifies prior art as items “patented, described in a printed publication, or in public use, on sale, or otherwise available to the public.”  Section 102(a)(1).  In addition, a third-party application on file at the PTO will count as prior art as of its effective filing date once that application is published or patented. Section 102(a)(2).  Of course, the effective filing date allows for priority claims

Narrow Grace Period: The new law would substantially narrow the current one-year pre-filing grace period so that that it only applies to negate pre-filing disclosures (1) by the inventor, (2) derived from the inventor, or (3) after the inventor had already publicly disclosed.  A technical problem with the new Section 102(b) provision is that the key term –  “disclosure” – is left undefined. The grace period provision is written as an exception to the filing-date prior art provision discussed above. However, it is unclear whether the exception applies to all types of prior art including “on sale” activities. 

Patent Races and First-to-File: In a patent race with two or more entities seeking protection for the same invention, the patent would be awarded to the first-to-file a patent application rather than the first-to-invent.  This eliminates current Section 102(g), interferences, and questions of conception, diligence, reduction to practice, abandonment, suppression, and concealment.  Except that the new law would allow for a derivation action (court) or proceeding (USPTO) when the first-filer “derived” their claimed invention from another. An oddity of the statute is that the derivation action may only be filed when the patent office issues two patents that claim the same invention. An important aspect of the derivation proceedings before the USPTO is that they allow the parties to settle their case.

One problem with the derivation provision that will be left to the PTO and courts is that the key term – “derived” – is not defined.  If given a broad meaning, the derivation proceedings could offer inventors something akin to the copyright doctrine of derivative works. 

This invention-date focus will likely drive more provisional patent application filings for US entities.  The prior-disclosure grace period limitation may drive a revival in formal invention disclosure publications.  However, because this narrowed grace period is still broader than that available in most countries, a pre-filing disclosure may negate foreign patent rights.

No Prior User Rights: The Senate Bill does not include any provision for prior user rights.  Although current law only has limited prior user rights, a prior user who is sued for infringement may be able to invalidate that patent by claiming prior invention under Section 102(g).  That option is eliminated in a first-to-file system leaving a prior user potentially liable for infringement.  

Nonobvious Subject Matter: The new law would rewrite Section 103 as follows

A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.

One shift in the nonobviousness statute merely codifies the current law’s focus on “claims” rather than the “subject matter sought to be patented.”   We’ll hope that courts will not interpret the phrase “the claimed invention as a whole” as requiring the courts to examine the entire claim-set as a whole.

The most important change is that the new provision considers obviousness as of the “effective filing date” of the patent claims being considered rather than “at the time the invention was made.” Of course, the courts already ignore the language of the statute and allow post-invention 102(b) prior art to be used for obviousness analysis.

Filing-Date-Focused-System – The Key is the Scope of the Grace Period

Patent, ,

[Update] A vote on S.23 is expected this evening, March 2, 2011. Before becoming law, the bill would need to also be approved by the House of Representatives.

I want to thank Professor McCrackin and her students for providing a useful analysis that compares the patent-race issues involved with the move to a first-to-file system.

I have long maintained that pressure to move to first-to-file has very little to do with these patent races. Interferences are extremely rare. And, as we all know, if it is difficult to prove prior dates of conception and reduction to practice, it is all-but-impossible to prove diligence at the level required by caselaw. Thus, in the words of Paul Morgan, analyzing the change in terms of the patent race is a "truly academic exercise."

For this reason, in my 2010 article on anticipation I decided to move the nomenclature away from first-to-invent and first-to-file systems and instead talk about whether the patent system is filing-date-focused or invention-date-focused and also to query the type of grace period allowed by the various systems.

What few are talking about with the proposed legislation is that it would increase the scope of prior art available to invalidate a patent – even when no competing patent application is filed.

In particular, the proposed legislation severely restricts the one-year grace period currently available to a patent applicant. Under the new legislation, a prior inventor could only antedate a pre-filing disclosure if that disclosure was (1) derived from the inventor or (2) made public after the inventor publicized her invention. Under the current rules, the one-year grace period operates without regard to the source of the putative prior art.

Even more, under current law, sales and offers-to-sell only constitute prior art if those sales occurred more than one year before the patent application filing date. 35 U.S.C. § 102(b). In those circumstances, no "swearing behind" is necessary against sales activities because they only qualify as prior art if they occurred outside of the grace period. It appears from the language of the bill, that no grace period would be allowed for pre-filing sales activities. Rather, the grace period language in the proposed bill only relates to "disclosures" and on sale activity is typically not seen as a disclosure.

From a practical standpoint, these elements involving the grace period are much more likely to impact patent applicants than any potential interference issue.

(more…)

Patent Reform – An Important Amendment to the Bill

Patent, ,

The Senate is today considering the Patent Reform Act of 2011, with the proviso that the legislation is now being termed the “America Invents Act of 2011.” A major element of the bill would eliminate first-to-invent rights and also eliminate any pre-filing grace period except for inventor-derived disclosures (and post-inventor disclosure disclosures). In several ways, the legal reforms would move US law closer to the rest-of-the-world (ROW) by primarily basing patent rights on the date that a patent application is filed rather than the date of invention.

Anti-Harmonization: In noting a major deficiency in the bill, Hal Wegner has expressed concern that the unfortunate end result is anti-harmonization. The particular concern is the question of when “secret” prior art (today termed 102(e) prior art) is available for obviousness (or inventive step) analysis.

In the European and proposed US first-to-file system, when two individuals independently make the same advance, only the first-inventor-to-file the patent application will receive a patent on that invention. However, it is actually quite rare that the second-filed application’s claim set will be entirely anticipated by the previously filed disclosure. The big question then is not novelty, but rather obviousness (or inventive step) – do the claims in the second-filed application present an inventive step over the prior art? In Europe and the ROW, the first-filed patent application can only be used for novelty analysis and is not applied to the question of obviousness unless that first-filed application was otherwise published. Under the new US bill, however, these unpublished, secret filings would be used both for novelty and obviousness grounds.

An Example: To be clear, the issue arises when Inventor-A files a patent application and then, a few months later, Inventor-B files a patent application claiming a similar (but different) invention. It is usually the case that (1) Inventor-A will not immediately publicize its invention and (2) the first-filed application will not be published until 18-months after its filing. Under the proposed system, Inventor-B’s patent could be blocked on obviousness grounds based on Inventor-A’s application. In Europe and Japan, however, the earlier filed application would not be used in the obviousness (inventive step) analysis unless published prior to Inventor-B’s application date.

Thus, under our current invention-date-focused system, some inventions are patentable in the US that would not be patentable in Europe and Japan. On the flip-side, once the bill is passed, there will be a new set of inventions that are patentable in Europe and Japan, but not patentable in the US.

Importance: This issue turns out to be important in a fairly large number of cases. In a recent study, I found that, on average, US patents cite to about 5.5 references that conform to this situation – i.e., the average patent in my study cited to 5.5 other patent applications that were on-file prior to the filing of the patent application under examination but were not published until afterwards. The legal question for examiners is whether those references should be considered only for novelty grounds or if obviousness should be a consideration as well.

I do not know the answer to the question of whether the proposed US system is better or worse than the current European system. I do know, however, is that the US proposal does not harmonize those laws and may tend to frustrate US applicants by offering a lower bar to patentability in Europe than in their home country.

A Framework for Analysis: The Supreme Court’s 2007 decision in KSR v. Teleflex offers one framework for analysis. That case talked about a common sense approach to obviousness analysis – both in choosing prior art references to consider and in applying those references against the proposed invention. The common sense framework suggests that we not consider prior art references that could not have been accessible to someone of ordinary skill in the art. In this situation, these previously-filed applications were, by definition, kept secret within the Patent Office and not published elsewhere. Under those conditions, a common sense approach would exclude those when determining the level of ordinary skill in the art.

If the fix is to eliminate this secret prior art from obviousness analysis, the solution is a simple three-line amendment to the proposed legislation.

Copyright Interlude: What is the Public Domain?

Patent, ,

The Eighth Circuit Court of Appeals is holding court in the Missouri Law School this week. One of the appeals being heard is a copyright case involving the 1939 Wizard of Oz movie (as well as Gone with the Wind and Tom & Jerry). The case is captioned, Warner Bros. Entertainment, et al. v. X One X Productions, et al., App. No. 10-1743. TBS (now owned by TimeWarner) claims title to the copyright to the Wizard of Oz movie. The defendant apparently obtained a set of publicity posters and other material from the movie that are in the public domain and that were distributed prior to the movie being copyrighted. The public domain materials included images of Judy Garland playing Dorothy Gale, Jack Haley as the Tin Woodsman, etc. Using those public domain materials as a base, the defendant began manufacturing and selling t-shirts and trinkets showing the likeness of the well-known characters. To be clear, at least for the t-shirts, the defendant only used images cropped from the public domain materials. As the accused products below show, the defendant also included well known phrases from the movie such as “there’s no place like home.”

Warner (WB) sued the defendants alleging copyright infringement as well as liability under the Lanham Act. On summary judgment, the Missouri-based district court agreed that the defendant had not copied any images from the films, but still held that the defendant was liable for infringing the film copyrights. In particular, the lower court held that WB held copyright to the Wizard of Oz characters as portrayed in the movie:

i.e., Judy Garland as Dorothy Gale, Ray Bolger as Scarecrow, Jack Haley as Tin Man…. Each character has widely identifiable traits and is especially distinctive. Each has been extensively developed through the films. Be it Dorothy’s inherent wisdom coupled with her Midwestern farm girl innocence, … or the apparent inconsistencies of Scarecrow, (without a brain vs. wisdom and leader), Tin Man (without a heart vs. compassion and tenderness) and Cowardly Lion, (without courage vs. bravery and chivalrousness), they are especially distinctive.

Ironically (and without comment from the district court), the particular identifiable traits of the characters identified here (apart from the portraying actors) were all derived directly from L. Frank Baum’s 1900 Wonderful Wizard of Oz novel that is now out of copyright.

In focusing on the public domain materials, the district court indicated that merely copying the public domain material likely would not have created any copyright liability. Here, however, the defendant did not merely copy the posters. Rather,

they pluck from these pages images of Plaintiffs’ copyrighted characters such that Defendants’ images are no longer innocently copied publicity ads, but are indeed the characters themselves, to be embossed onto any number of trinkets, clothing and other collectibles. . . Notwithstanding Defendants have copied only the publicity materials, such actions violate the component parts of Plaintiffs’ copyrights in the films.

Based on the finding of copyright infringement, the district court issued a permanent injunction that prohibits the defendants from

using for commercial gain images from the film The Wizard of Oz as well as images of Judy Garland as Dorothy Gale, Ray Bolger as Scarecrow, Jack Haley as Tin Man, and Burt Lahr as Cowardly Lion [except] that Defendants are [may use] reproductions of public domain movie publicity materials, in their entirety and without alteration or modification.

On appeal, the defendants have argued that they should be able to use particular images of the Wizard of Oz characters so long as they are taken from the public domain materials.

Documents:

Wizard-of-oz-poster

Patent Reform Act of 2011: An Overview

Patent, , , , , , ,

LeahyThe Patent Reform Act of 2011 (S. 23) was introduced on January 25, 2011 by Senator Leahy (D-VT) who was joined by eight co-sponsors (all from the Judiciary Committee) that include Senators Coons (D-DE), Franken (D-MN), Grassley (R-IA), Hatch (R-UT), Klobuchar (D-MN), Kyl (R-AZ), Lieberman (I-CT), and Sessions (R-AL). The bill was referred to the Senate Judiciary Committee which unanimously approved the bill. The House of Representatives will likely move more slowly. Although House Judiciary Committee chair Rep. Smith (R-TX) co-sponsored the similar Patent Reform Act of 2009, Rep. Issa (R-CA) is the “patent expert of Congress” and has only tentatively supported the reform bills in the past. [UPDATE –  Most Recent Version of S. 23 2/11/11]

PatentLawImage080First-Inventor-to-File: The reform measure would move the US further toward a first-to-file system. Each patent application would be given an “effective filing date,” and the patentability will be judged on whether any prior art was available prior to the filing date. One-year grace period would remain in effect, but only for the inventor’s own disclosures (and disclosures derived from the inventor). Obviousness will also be judged as of the effective filing date. Inventors will no longer be able to swear behind prior art nor will they be able to establish priority in an interference proceeding. A new creation in the bill is a “derivation proceeding” that would operate only in times where an original inventor alleges that a patent applicant derived the invention from the original inventor’s work.

PatentLawImage081Damages: Patent defendants have argued that courts often treat damages issues as afterthoughts with little procedural control. The proposed amendment would add specific procedures and checks on how a judge manages the damages portion of a case. The amended statute would require that a court “identify methodologies and factors that are relevant to the determination of damages” and that “only those methodologies and factors” be considered when determining the damage award. In addition, prior to the introduction of damages evidence, the court would be required to consider either party’s contentions that the others damage case lacks a legally sufficient evidentiary base. In addition, the statute would require a judge to bifurcate the damages portion of a trial if requested “absent good cause to reject the request, such as the absence of issues of significant damages or infringement and validity.” Oddly, the proposed statute seemingly bars a judge from amending the discovery schedule or any “other matters” based upon the trial sequencing.

PatentLawImage082Enhanced Damages: Although we often discuss enhanced damages for willful infringement, the current Patent Act is not explicitly limited to situations involving willful infringement. Rather, Section 284 simply states that “the court may increase the damages up to three times the amount found or assessed.” Over the years, Federal Circuit precedent has limited the statute to only situations where the infringer’s actions were at least objectively reckless. The amended statute would codify that holding with the words “Infringement is not willful unless the claimant proves by clear and convincing evidence that the accused infringer’s conduct with respect to the patent was objectively reckless. [I.e., that] the infringer was acting despite an objectively high likelihood that his actions constituted infringement of a valid patent, and this objectively-defined risk was either known or so obvious that it should have been known to the accused infringer.” The statute also makes clear that accusations of willful infringement must be pled with particularity (following FRCP 9(b)); that proof of knowledge of patent is insufficient to establish willful infringement; that a pre-lawsuit notice of infringement cannot itself establish willfulness unless the notification is fact specific in explaining the infringement; that the failure to obtain the advice of counsel (or to present that advice to the jury) “may not be used” to prove willull infringement or inducement of infringement; and that damages subject to trebling are only those accrued after the infringement became willful; and that in a “close case” there will be no willful infringement (here, the statute requires a judge to “explain its decision” and to make a decision prior to the issue being tried by the jury).

Third-Party Challenges to Patent Rights: The bill includes three expanded ways that a third party can use the USPTO to challenge a patent: Pre-Issuance Third-Party Submissions; Third-Party Requested Post-Grant Review; and Inter Partes Post Grant Review.

Pre-Issuance Third-Party Submissions: Under the amendment, third parties would be allowed to submit any printed publication along with a description of the relevance to the USPTO to be considered during the examination of a pending patent application.

Third-Party Requested Post Grant Review: A post grant review proceeding would be created (similar to our current reexamination proceeding) that could be initiated by any party. The review would allow a third party to present essentially any legal challenge to the validity of at least one clam. A major limitation on the post grant review is the request for review must be filed within nine-months of issuance.

Inter Partes Review Proceedings: Once the nine-month window for post grant review is expired, a party may then file for “inter partes review.” This new system would replace inter partes reexamination and would be limited to consideration of novelty & obviousness issues based on prior art patents and printed publications. (It appears that third-party requested ex parte reexamination would remain a viable option as well).

False Marking: A large number of false patent marking cases have been filed in the past year. The bill would eliminate those lawsuits except for ones filed by the US government or filed by a competitor who can prove competitive injury.

PatentLawImage083Oath: The bill would make it easier for a corporation to file a substitute inventor’s oath when the inventor is non-cooperative.

Best Mode: Although an inventor will still be required to “set forth” the best mode for accomplishing the invention, the statute would be amended to exclude failure of disclose a best mode from being used as a basis for invalidating an issued patent. The PTO will still have a duty to only issue patents where the best mode requirement has been satisfied.

Fee Setting Authority: The PTO would be given authority to adjust its fees, but only in a way that “in the aggregate” recover the estimated costs of PTO activities. Along this line, a new “micro” entity would be created that would have additional fee reductions.

The Teeth of KSR: Obviousness on Summary Judgment

Patent, ,

Tokai Corp. v. Easton Enterprises (Fed. Cir. 2011)

Tokai’s patents relate to a safety switch the type of long-nozzle lighters that are often used to light barbecues and patron saint candles. Easton has allegedly sold more than 9-million infringing lighters in the US. The district court construed the claims broadly – leading Easton to admit infringement but successfully challenge the claims as obvious. The district court’s obviousness finding came on summary judgment after the court excluded Tokai’s expert testimony (since the plaintiff had not submitted written reports during discovery) – finding no “genuine issue of material fact as to the obviousness of the asserted claims.”

On appeal, the Federal Circuit affirmed – holding that the district court had properly excluded the expert testimony and that the obviousness determination was correct.

Lets focus on obviousness:

Conventional wisdom over the past twenty years has been that summary judgment is useful for resolving issues of infringement and novelty, but that obviousness challenges are rarely resolved on summary judgment. Although ultimately a question of law, judges often leave the obviousness question for a jury. That conventional wisdom may have changed in 2007 when the Supreme Court decided KSR v. Teleflex, 550 U.S. 398 (2007). In that case, the Supreme Court wrote what looked like a summary judgment decision finding the asserted patent invalid as obvious.

The question of obviousness is defined in 35 U.S.C. § 103(a). The statute considers the differences between the patented invention and the prior art and whether, in light of those differences, a person having ordinary skill in the art would have found the invention obvious at the time of the invention.

Clear and Convincing + Added Burden: A question raised on appeal relates directly to the Supreme Court’s upcoming decision in Microsoft v. i4i. Here, some, but not all, of the four prior art references had been considered by the USPTO during prosecution. The patentee argued that the court should have provided more deference to the PTO. On the other side, the defendant argued that much less deference should be given to PTO decisions because the PTO had not considered “key” elements of the obviousness argument. On appeal, the Federal Circuit affirmed that the current law-of-the-land requires clear and convincing evidence to invalidate a patent and that an “added burden” is not required when the obviousness question is based on at least some evidence not considered by the PTO.

Conclusion of Obviousness: In arriving at its conclusion that Tokai’s asserted claims were obvious, the appellate panel looked at the fact that the components of the claim are “simple mechanical parts that are well known in the art;” that “a need for safety utility lighters was recognized in the art;” that similar safety switches were already available for cigarette lighters (an admitted analogous art); and that the art is “predictable.” As in KSR, the appellate court here held that the “identified, predictable solution” to the “known problems” were within the grasp of a skilled artisan.

It would have been obvious to one of ordinary skill and creativity to adapt the safety mechanisms of the prior art cigarette lighters, as disclosed in Floriot and/or Morris, to fit a utility lighter as disclosed by Shike, even if it required some variation in the selection or arrangement of particular components.

Invalidity affirmed.

In dissent, Judge Newman lauded the importance of the invention and explained her view that the patents were valid.

The Tokai lighter has an ingenious safety design, whereby the device is simple to operate by adults but not by children, unlike prior art utility lighters, and locks automatically after use, unlike prior art utility lighters. The Tokai safety structure does not result from direct combination of the prior art. Nonetheless the district court, and now this court, hold on summary judgment that the asserted claims of the Tokai patents are invalid for obviousness. I must, respectfully, dissent.

. . . .

The determination of obviousness is not whether a person could, with full knowledge of the patented device, reproduce it from prior art or known principles. The question is whether it would have been obvious, without knowledge of the patentee’s achievement, to produce the same thing that the patentee produced. This judgment must be made without the benefit of hindsight. It is improper to take concepts from other devices and change them in light of the now- known template of the patented device, without some direction in the prior art that would render it obvious to do so.

In a crowded and competitive field such as this is stated to be, a modification that achieves a valuable improvement is of significance in view of the many entrants seeking commercial advantage. As the Hummer court recognized, incremental but unobvious improvements serve the public interest, and are included in the purpose of the patent incentive.

  

Centillion Data v. Qwest Communications: Getting Around Joint Infringement Problems

Patent, ,

By Jason Rantanen

Centillion Data Systems, LLC v. Qwest Communications International, Inc. (Fed. Cir. 2011)
Panel: Lourie, Linn, Moore (author)

Joint patent infringement remains a hot topic as the Federal Circuit continues to tinker with the doctrine.  Centillion Data v Qwest adds a new twist, allowing joint infringement issues to be avoided altogether when dealing with system claims if a customer "puts the system as a whole into service, i.e., controls the system and obtains benefit from it" – even if the customer does not physically possess or own elements of the system.

Background
Centillion Data Systems sued Qwest for infringement of Patent No. 5,287,270, which relates to a system for collecting, processing, and delivering information from a service provider to a customer.  As described by the CAFC, claim 1 requires:

“a system for presenting information . . . to a user . . . com-
prising:” 1) storage means for storing transaction records, 2) data processing means for generating summary reports as specified by a user from the transaction records, 3) transferring means for transferring the transaction records and summary reports to a user, and 4) personal computer data processing means adapted to perform additional processing on the transaction records.

Slip Op. at 2-3.  Centillion conceded that the claim concludes both components maintained by the service provider (elements 1-3) and an element maintained by an end user (element 4), but contended that Qwest's billing systems (which contain two parts: the "back office" systems and front-end client applications) nevertheless infringe the '270 patent. 

On Qwest's motion, the trial court granted summary judgment of noninfringement, concluding that under BMC Resources Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007) and Cross Medical Products v. Medtronic Sofamor Danek, Inc. 424 F.3d 1293 (Fed. Cir. 2005), Qwest could not be liable for infringement because it did not "use" every element of the claim, nor did it direct or control the fourth element.  The trial court also held that Qwest's customers did not "use" the system, nor did they direct or control elements 1-3.

Meaning of "use"
On appeal, the CAFC focused on the meaning of the word "use" in the context of a system claim, concluding that under NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282 (Fed. Cir. 2005), Qwest's customers "use" the system as required under 271(a).  In reaching its conclusion, the court drew upon its definition of the term in NTP.  Based on that prior definition, the CAFC held that "to 'use' a system for purposes of infringement, a party must put the invention into service, i.e., control the system as a whole and obtain benefit from it."  Slip Op. at 8.  While the district court correctly recognized that this was the proper definition to apply, it erred "by holding that in order to 'use' a system under § 271(a), a party must exercise physical or direct control over each individual element of the system. The 'control' contemplated in NTP is the ability to place the system as a whole into service." Id.

Applying this rule, the CAFC concluded that although Qwest itself does not "use" the system, its customers do.  Those customers put the system into operation by initiating a demand for the service that causes the back-end system to generate the requested reports.  "This is 'use' because, but for the customer's actions, the entire system would never have been put into service."  Id. at 11. On the other hand, Qwest does not "use" the system because it never "puts into service the personal computer data processing means.  Supplying the software for the customer to use is not the same as using the system."  Id. at 13.

Comment: Dennis predicted this outcome a year ago.

Whither BMC?
While both the district court and Qwest relied heavily on BMC and Cross Medical, any substantive discussion of those cases, or joint infringement theory more generally, is conspicuously absent from the CAFC's ruling concerning Qwest's customers.  Rather, underlying the court's analysis is the conclusion that BMC and Cross Medical are irrelevant to primary issue before the court: the meaning of the term "use" in 271(a).  This court thus relegates BMC and Cross to the limited context of vicarious liability analyses.  "The customer is a single “user” of the system and because there is a single user, there is no need for the vicarious liability analysis from BMC or Cross Medical."  Slip. Op. at 10.  Of course, the court's ruling is limited to system claims; method claims (the type of claims at issue in BMC) might produce a different result.

Other holdings:
The CAFC addressed two other issues in its opinion, first concluding that Qwest does not "make" the infringing system because it does not provide the "personal computer data processing means" or install the client software, and then ruling that summary judgment of no anticipation was improper due to the existence of disputed issues of fact.

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

Guest Post, Infringement, Invalidity, Patent, Prior Art, ,

By Paul F. Morgan

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

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

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

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

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

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

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

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

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

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

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

In re Microsoft: Presence Created Solely for Purposes of Litigation Does Not Support Venue

CAFC, Jurisdiction, Patent, Patent Cases 2011, Rantanen, ,

By Jason Rantanen

In re Microsoft Corporation (Fed. Cir. Order 2011)
Panel: Newman, Friedman, Laurie (per curium)

The Federal Circuit's decision in In re Microsoft, which granted Microsoft's request for a writ of mandamus ordering the Eastern District of Texas to transfer the case to Washington State, originally issued as a nonprecedential order in early November; the CAFC reissued it as precedential today.  The order adds another piece to the now fairly substantial body of law surrounding review of denials of requests to transfer venue.  Allvoice Develop-ments, a company operated from the United Kingdom, sued Microsoft in the Eastern District of Texas for infringing Patent No. 5,799,273.  Microsoft, which is headquartered in the Western District of Washington (where a substantial portion of its employees and operations are located), requested a transfer of venue to Washington State. 

In denying Microsoft's motion to transfer venue, the district court relied on the existence of a local Allvoice office in Tyler, as well as Allvoice's incorporation under the laws of Texas.  The court also weighed the witness factor against transfer because Allvoice had identified potential non-party witnesses in New York, Massachusetts and Florida who, the court found, would find Texas more convenient for trial.  Although the court found that the sources of proof factor weighed in favor of transfer, it did so only slightly because Allvoice said that its documents were maintained in its office in the E.D. Texas. 

On appeal, the Federal Circuit granted Microsoft's request for a writ, likening this case to In re Genentech, Inc., 566 F.3d 1338 (Fed. Cir. 2009), and concluding that the district court abused its discretion by denying transfer.  The CAFC first noted that there was a vast disparity with respect to the convenience of witnesses: all individuals identified by Microsoft as having material information relating to the patents reside within 100 miles of the W.D. Wash.; all but two of the witnesses identified by Allvoice reside outside Texas, and even those two witnesses appear to be relatively peripheral.

Particularly notable, however, was the CAFC's refusal to consider Allvoice's presence in the E.D. Texas.  "Allvoice’s argument … rests on a fallacious assumption: that this court must honor connections to a preferred forum made in anticipation of litigation and for the likely purpose of making that forum appear convenient."  Slip Op. at 5.  Thus, just as transferring thousands of pages of relevant documents to the offices of litigation counsel in Texas in order to assert that the location of those documents favored non-transfer was entitled to no weight in In re Hoffmann-La Roche Inc., 587 F.3d 1333 (Fed. Cir. 2009), so too is the existence of an office created solely for the purpose of manipulating venue a meaningless fact for the venue analysis.  Nor did the CAFC ascribe any weight to extra step of incorporating under the laws of Texas, noting that it was done sixteen days before filing suit.

Research Corp. v. Microsoft: Section 101 and Process Claims

Inequitable Conduct, Infringement, Patent, Patent Cases 2010, Patentable Subject Matter, Rantanen, , , , ,

By Jason Rantanen

There are three articulated exceptions to the scope of patentable subject matter under 35 U.S.C. § 101: laws of nature, physical phenomena, and abstract ideas.  Research Corp. v. Microsoft places a high hurdle in front of challengers who seek to invalidate process patents on the third ground. 

Research Corp. Technologies v. Microsoft Corp. (Fed. Cir. 2010)
Panel: Rader (author), Newman, and Plager

Research Corporation ("RCT") owns several patents relating to digital image halftoning, which is the process of generating electronic display and print images using only a small number of pixel colors (ex.: red, blue and green in the case of color displays) while appearing to present many more colors and shades than were actually used.  Four related patents are relevant to this summary: Nos. 5,111,310, 5,341,228, 5,477,305, and 5,726,772.  The applications for the '310 and '228 patents (a continuation-in-part of the '310 patent) were filed before December 4, 1991; the remaining patents are continuations of the '228 patent and claim priority to the earlier filing dates. 

RCT brought an infringement action against Microsoft based on these patents; in response, Microsoft asserted, and the district court initially concluded, that the patents were unenforceable due to inequitable conduct, invalid and not infringed.  The Federal Circuit reversed that determination in 2008.  Microsoft subsequently sought summary judgment against the '310 and '228 patents on Section 101 patentable subject matter grounds, and asserted that the claims of the '772 patent were not entitled to the earlier priority date, thus rendering them anticipated.  The district court granted Microsoft's motions, and subsequently held that the only remaining claim, claim 29 of the '305 patent, also lacked entitlement to the earlier priority date.  Based on these ruling, the parties stipulated to a dismissal of the suit and RCT appealed.

Section 101 and Process Claims
In reversing the district court's ruling that the '310 and '228 patents failed to satisfy Section 101, the Federal Circuit identified a set of considerations that can be applied when assessing the question of abstractness.  Drawing upon the Supreme Court's precedent in this area, including its recent decision In re Bilski, the opinion first reiterates that there are only three articulated exceptions to subject matter eligibility: "laws of nature, physical phenomena, and abstract ideas." 

Focusing on the category of abstract ideas, the court noted the Supreme Court's admonition in Bilski not to provide a rigid formula or definition for abstractness.  Rather, "the Supreme Court invited this court to develop 'other limiting criteria that further the purpose of the Patent Act and are not inconsistent with its text.'" Slip Op. at 14.  With that guidance, the panel concluded that it perceived nothing abstract in the subject matter of the processes claimed in the '310 and '228 patents.  Specifically, the court observed that:

  • "The invention presents functional and palpable applications in the field of computer technology";
  • Some claims in the patents require physical components;
  • "[I]nventions with specific applications or improvements to technologies in the marketplace are not likely to be so abstract that they override the statutory language and framework of the Patent Act"; and
  • The incorporation of algorithms and formulas does not prevent patent eligibility.

Nevertheless, while finding these factors met in the instant case, the panel further noted that its analysis was limited to the context of Section 101, which provides only a coarse filter.  Abstractness challenges can also be brought against specific claims under Section 112 even if the requirements of Section 101 are met.

Comment: The court's discussion of Section 101 suggests that the issue of patentable subject matter should be analyzed with respect to the patent as a whole; in contrast, Section 112 challenges are analyzed on a per-claim basis.

Burden of Proof for Establishing Priority
In addressing the district court's ruling that the asserted claims of the '772 and '305 patents were not entitled to claim priority to the '310 and '228 filing dates, the opinion reinforced the court's prior ruling that the patent holder bears the burden of establishing priority.  As the court held, although a patent challenger has the burden of going forward with invalidating prior art, once it has done so the burden shifts to the patent holder.  Thus, in an instance where the patent holder attempts to defeat the assertion of invalidity by claiming priority to an earlier application, the patent holder bears the burden of proving the entitlement to priority – including that the claims of the earlier patent are supported by the written description of the earlier specification.

Note: The '772 and '305 patents shared the same specification as the earlier '305 and '228 patents.  If the relevant claims had been contained in the '305 or '228 patents, Microsoft would have had the burden of proving lack of written description, as opposed to the burden resting with RCT.  Thus, the fact that the claims were part of a continuation was highly significant with respect to the allocation of the burden.

Comment: A related issue is who bears the burden of proof in the context of claims to a pre-filing conception or reduction to practice date. Although not mandated by the text of the opinion, which specifically refers to the burden to establish "an earlier filing date," the court's analysis could be read to support the conclusion that the patent holder bears the burden of proof in this situation as well.

After dispensing with RCT's challenge to the district court's allocation of burden, the panel proceeded to address the priority claims on the merits.  With respect to the '772 claims, the panel agreed with the district court, concluding that they were unsupported by the prior disclosure.  The panel did reverse on the '305 claim, however, ruling that to satisfy the written description requirement for apparatus claims, the patent need not disclose every method of making the apparatus. 

Global-Tech v. SEB: Amicus Briefs

Amicus Brief, Patent, Rantanen,

By Jason Rantanen

Several amicus briefs supporting Global-Tech/neither party were filed yesterday.  Among them is a brief by 41 Law, Economics, and Business Professors in support of the Petitioner that parallels a similar brief filed in support of the petition for certiorari.  The merits brief, coordinated by Mark Lemley, Timothy Holbrook, and Lynda Oswald, argues that the Court should reject the "deliberate indifference" standard articulated by the Federal Circuit in SEB, and instead hold that inducement require that the defendant "be aware of a patent and encourage an act that it knows or should know would infringe that patent."  In anticipation of an argument that may be made in support of the Respondent, the brief also asserts that a strict liability standard for inducement would be disastrous.  The brief can be directly downloaded here: Download 10-6, tsac, 41 Law, Economics, and Business Professors

The full set of amicus briefs is available on the American Bar Association Website.  It includes briefs from:

  • The Business Software Alliance in Support of Petitioner
  • Cisco Systems, Inc., Dell, Inc., and Intel Corporation in Support of Reversal
  • The Clearinghouse Association and Securities Industry and Financial Markets Association in Support of Petitioner
  • Comcast Corporation, Facebook, Inc., Intuit Inc., Microsoft Corporation, Netflix, Inc., Overstock.Com, Inc., and SAP America, Inc. in Support of Petitioner
  • Google, Inc., in Support of Petitioner
  • NewEgg, Inc., in Support of Petitioner
  • The Software Freedom Law Center in Support of Petitioner
  • Yahoo! Inc., Ebay Inc., Electronic Arts Inc., General Motors LLC, Hewlett Packard Company, McAfee, Inc., Red Hat, Inc., and Symantec Corporation in Support of Petitioner
  • The Federal Circuit Bar Association in Support of Neither Party
  • The Intellectual Property Owners Association in Support of Neither Party

Design Patents and the Fashion Industry

Copyright, Design Patent, Patent, , , ,

The chart above shows a histogram of design patent application pendency based on patents issued April-November 2010. The majority of design patents issue within one year of the application filing. When there is a delay in prosecution, it is typically due to informalities in the application submitted. In an earlier study, I found that a very low percentage of design patent applications were ever challenged on novelty or obviousness grounds. For a large entity, a design application and issue fees total to $1,320 (half that for a small-entity).

Fashion Industry: In property law, I teach the case of Cheney Bros. v. Doris Silk Corp. (2nd Cir. 1930). In that 80-year-old case, a silk designer filed suit to stop a free-riding copycat. The appellate court rejected the plea based on the general rule that mere product imitation is not actionable at common law. Rather, a successful plaintiff must have some statutory right to protection – such as a patent or copyright – before copying can be pejorized as counterfeiting. At the time, copyright was not available for fabric designs (it is now) and patents were arguably impractical because of the prosecution cost and invention requirement. For the past eighty-years, the fashion industry has been asking for additional protections. During that time, the potential for copyright and trademark protections have been greatly expanded and enforcement of criminal counterfeiting has increased. However, there are still calls for expanded protection for fashion.

Fashion & Design Patent Rights: Some fashion industry markets have found design patents as valuable. These include eyewear, shoes, handbags, and jewelry. Despite widespread and growing use, fashion industry leaders have continued to push additional forms of protection that are easier to obtain.

The Innovative Design Protection and Piracy Prevention Act (S.3728) was recently passed through the Senate Judiciary Committee. That bill would provide protection for new fashion designs that are unique, distinguishable, non-trivial, and non-utilitarian variation over the prior art. No registration of rights would be required. Rather, protection is automatic for newly publicized clothing, footware, bags, and eyeglass frames. At trial, plaintiff would have the burden of proving rights and infringement. Under the proposed system, rights would persist for three years from the date of publication or first distribution.

Hyatt v. Kappos: Federal Circuit Opens Door to Post-BPAI Civil Actions

BPAI, En Banc, Enablement, Patent, Patent Cases 2010, , , , , , , , , , ,

By Dennis Crouch

Hyatt v. Kappos (Fed. Cir. 2010) (en banc)

Summary: In a 6-2-1 en banc decision, the Federal Circuit has reversed its prior precedent and held that a patent applicant must be allowed to introduce new evidence in a Section 145 civil action filed to challenge a USPTO refusal to grant patent rights and that the issues implicated by the new facts must be considered de novo.

[W]e hold that the only limitations on the admissibility of evidence applicable to a § 145 proceeding are the limitations imposed by the Federal Rules of Evidence and Federal Rules of Civil Procedure. Therefore, we hold that the district court applied the wrong legal standard for the admissibility of evidence in a § 145 proceeding and abused its discretion when it excluded Mr. Hyatt's declaration. . . .

The particular significance of a § 145 civil action is that it affords an applicant the opportunity to introduce new evidence after the close of the administra-tive proceedings—and once an applicant introduces new evidence on an issue, the district court reviews that issue de novo.

However, the Court also wrote that an applicant may still be barred from presenting new "issues" in the civil action and that, when no new evidence is presented, that BPAI findings and rulings should be given deference under the Administrative Procedures Act.

Impact: This decision could be seen as relieving some pressure on applicants to ensure that their cases for patentability are exhaustively presented to the USPTO's internal Board of Patent Appeals and Interferences (BPAI). The decision is especially important in light of the growing role of BPAI appeals in the ordinary course of patent prosecution. In its argument, the USPTO suggests that a strategic applicant may now choose hold-back some evidence from the BPAI appeal in order to overcome the APA deference if the case goes to the District Court.

Statute in Question: 35 U.S.C. § 145 creates a right to a "civil action" in Federal District Court against the USPTO Director whenever an applicant is "dissatisfied with the decision of the Board of Patent Appeals and Interferences in an appeal under section 134(a)." In the alternative, an applicant may appeal directly to the Court of Appeals for the Federal Circuit.

Background: Gil Hyatt is a well-known inventor and successful patentee. Hyatt filed a civil action in 2003 after the BPAI sustained written description and enablement rejections for seventy-nine of Hyatt's claims. The examiner had issued "2546 separate rejections of Mr. Hyatt's 117 claims" based on the doctrines of inadequate "written description, lack of enablement, double patenting, anticipation, and obviousness." The Board reversed all of the examiner rejections except for the § 112 p1 arguments. Complicating this case is the fact that the application's claimed priority date is 1975. Hyatt has aggressively pushed the bounds of USPTO practice. This decision is one of more than a dozen Federal Circuit decisions focusing on Hyatt's patent rights. When California pursued Hyatt for tax revenue for his patent licenses, Hyatt took the case to the Supreme Court and eventually won a $388 million judgment against the state of California for invasion of privacy.

After the Board affirmed a set of written description and enablement rejections, Hyatt filed a Section 145 civil action and included a declaration offering new evidence of enablement and written description. The district court excluded that inventor-declaration from evidence based on Hyatt's "negligence" in failing to previously submit the information to the PTO. In a 2009 panel decision, the Federal Circuit held that the district court had properly excluded the new evidence – holding that the district court may properly exclude evidence that Hyatt should have produced to the PTO. That opinion was penned by former Chief Judge Michel and Joined by Judge Dyk. Judge Moore wrote a vigorous dissent that supported a patent applicant's right to a full civil action including the right to submit additional evidence when challenging a PTO decision.

Judge Moore wrote the en banc decision that was joined by Chief Judge Rader and Judges Lourie, Bryson, Linn, and Prost. Judge Dyk dissented and was joined by Judge Gajarsa. Judge Newman Concurred-in-Part – arguing that the civil action should not give deference to PTO factual determinations.

A key to the majority decision is the notion that a Section 145 civil action is not an appeal, but rather a new, separate lawsuit filed to force the PTO to act. In its analysis, the court began with a focus on the 150-year history of the civil action right (and its predecessor Bill in Equity) and the reality that new evidence has always a part of those remedies. See, e.g., Gandy v. Marble, 122 U.S. 432 (1887) (explaining that the [predecessor] § 4915 suit in equity was "not a technical appeal from the Patent Office, nor confined to the case as made in the record on that office"). The court then reviewed the current text of the statute, implications of the APA, and various policy arguments before reaching its conclusions.

In a 37-page dissent, Judge Dyk argued that the majority made an improper leap from (1) the correct premise that new evidence should be admissible in the civil action to (2) the incorrect conclusion that the law provides no meaningful limits on the introduction of new evidence regardless of what was presented at the BPAI.

Notes:

AstraZeneca v Apotex: Affirmance of a Preliminary Injunction

Anticipation, Injunctions, Patent, Patent Cases 2010, Pharma, Prior Art, Rantanen, , , ,

By Jason Rantanen

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

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

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

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

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

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

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

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

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

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

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

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

AIPLA Meeting

Conference or CLE, Patent,

This Friday, I will be at the AIPLA annual conference in Washington DC as part of a panel on Blogging.  I have not done a blogging seminar in a long time — one of the last ones was in 2006 when Cathy Kirkman and I co-hosted a conference on the law of blogs and business of legal blogs.

The session is 2:00 pm –  3:30 pm on Friday, October 22. I will be speaking along with my former colleague Don Zuhn (MBHB, Patent Docs), Aaron Feigelson (Leydig, 1201 Tues), Karen Hazzah (Thomas Kayden, AllThingsPros), Jonathan Frieden (Odin Feldman, ECommerceLaw), and Jake Ward (Fraser Clemens, AnticipateThis).

I look forward to seeing you there!

Read the Annual Meeting Program

US Patent Law Provides Prior-Inventor Rights, NOT Prior-User Rights

Anticipation, Patent, Patent Cases 2010, Priority Rights,

Solvay v. Honeywell (Fed. Cir. 2010)< ?xml:namespace prefix ="" o />

This case presents a nice fact pattern for a law school examination question on the operation of the novelty rules of 35 U.S.C. § 102.  Solvay’s patent covers a method for manufacturing a non-ozone-depleting form of penta-flouro-propane (HFC-245fa) that is primarily used in spray-foam insulation products. Honeywell manufactures and sells over 1,000,000 pounds of the compound each year.

Prior-User Facts: Honeywell (at that time, AlliedSignal), the accused infringer, was in possession of a working model of the invention in the United States (US) prior to Solvay’s invention date. However, Honeywell was not the original inventor. Rather, Honeywell had copied its working model from one created by a Russian agency (in Russia, but under contract with Honeywell).  Honeywell engineers continued to work on the project as they moved toward commercialization. However, by the time that Honeywell began to commercially use or publicize the invention, Solvay had already independently invented the method and filed for patent protection.

The question on appeal is whether any of the novelty provisions of Section 102 render Solvay’s patent claims invalid.  The two primary statutory candidates are 35 U.S.C. § 102(a) and § 102(g)(2). 

A patent claim is invalid under Section 102(a)  if the invention was “known or used by others” in the US prior to the patentee’s date of invention.  If the statute is construed according to the plain meaning of its terms, then Honeywell wins and the patent is invalid.  Several US-based individuals at Honeywell knew of the invention prior to Solvay’s invention date – seemingly satisfying the “known or used by others” in the US requirement of the statute. Unfortunately for Honeywell, courts require that the prior knowledge or use of the invention be somehow public.  In this case, Honeywell had kept its work in the US confidential.  Therefore, Honeywell’s prior knowledge and use of the invention is insufficient to invalidate the asserted claims under Section 102(a).  Many accused infringers (and others) have argued that the law should provide a prior-user defense for situations such as this one.  That defense does not exist except for the limited (now severely limited) case of business method patents.

Section 102(g)(2) creates a prior-inventor defense that can also render a patent claim invalid. However, that defense has a number of important limitations. Under Section 102(g)(2), a claim will be held invalid if, before the patentee’s invention date, the claimed invention “was made in [the US] by another inventor who had not abandoned, suppressed, or concealed it.”  Section 102(g) ends with the statement that the question of invention priority will consider “not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other.”

As I mentioned, Section 102(g)(2) creates a prior-inventor defense, not a prior-user defense.  The original inventor was the Russian agency operating in Russia.  That invention cannot satisfy the elements of the statute because Section 102(g)(2) requires that the prior invention be made in the US. For its part, Honeywell is not a prior inventor because it simply copied the work of the Russian agency. Thus, the patent skates-by Section 102(g)(2) as well.

* * * * *

More Information: The district court held the patent invalid based on Section 102(g)(2). In reaching that conclusion, the district court decided that the made by “another inventor” element of the provision did not actually require that the prior-user be an original-inventor.  Rather, the district court held that for the purposes of Section 102(g), all that is required is that the prior-user “appreciate” the invention.  In coming to that conclusion, the court distinguished the language of  Section 102(f), which does require that the applicant “he … himself invent.”  On appeal, the Federal Circuit rejected that argument — holding that “when the statute uses the words ‘the invention was made in this country,’ it is referring to the act of inventing in the United States” because “originality is . . .  inherent to the notion of conception.”  In its analysis, the Federal Circuit appears to have added some detail to the common definition of conception which should now read: “the formation in the mind of the inventor, of [the inventor’s own] definite and permanent idea of the complete and operative invention, as it is hereafter to be applied in practice.”

Not the First Inventor: Honeywell argued strongly that it does not make sense for Solvay to have a patent since it was clearly not the first inventor and, if you follow the chain of title, the prior invention had never been abandoned, suppressed, or concealed.  Although seemingly sympathetic to Honeywell’s policy argument, the appellate court decided that it was bound by the statute.

Whether this holding ignores the realities of globalization and outsourcing by modern-day research companies, as Honeywell contended at oral argument, is not the question before us. The question before us is whether, under the undisputed facts, Honeywell qualifies as “another inventor” under 35 U.S.C. § 102(g)(2). Because Honeywell did not itself conceive the RSCAC process of making HFC-245fa, under 35 U.S.C. § 102(g)(2), as this court has construed the statute, it is not “another inventor” of the subject matter claimed in the ‘817 patent.

Although perhaps only shorthand, it is interesting that the court focuses on the question of whether the corporate entity –  Honeywell –  was the inventor.  Although some proposed amendments to the Patent Act would lead toward corporate inventorship, the current law is that all inventors must be real persons.
 

CHALLENGE.GOV: Prizes as an Additional Incentive Layer

Bits and Bytes, Patent, Science,

In my patent law course last week, we had discussion of the role of a patent system as compared with other potential governmental pro-innovation initiatives such as grants or prizes.  Our current patent system does not provide any strong mechanisms for channeling innovation toward particular identified issues.  Rather, investors and inventors choose their own paths according to their own subjective perception of the potential market upside.  When an important challenge is publicly identified, we may want to add an additional layer of incentive to funnel research in a particular direction. In that vein, the Obama Administration's Chief Technology Office Aneesh Chopra and Chief Information Officer Vivek Kundra unveiled CHALLENGE.GOV at yesterday's GOV 2.0 conference.  CHALLENGE.GOV identifies 35 challenges and offers prizes for folks who provide novel solutions.

Identified challenges include:

  • Create nutritious food that kids like — $12,000 prize.
  • Reducing waste at college football games — school prestige award.
  • Best original research paper as judged by the Defense Technical Information Center.
  • Provide a whitepaper on how to improve reverse osmosis membranes — up to $100,000.
  • Digital Forensics Challenge
  • Federal Virtual Worlds Challenge (Create the best virtual world for the US Army) — $25,000 in prizes.
  • Advance the field of wireless power transmission — $1.1M for a team that can wirelessly drive a mechanical climber to 1 kilometer height at a speed of at least 5 meters/sec. 
  • Strong Tether Challenge — create a material with 50% more tensile strength than anything on the market for $2 million.
  • etc.

Law Review Case Note Topics for 2010-2011

Academic Studies, Articles and Publications, Law School, Patent, , , , , , , , ,

Dear Law Review Editors: Please send me a note (dcrouch@patentlyo.com) to let me know about patent law focused articles that you publish in your journal so that I can highlight them on Patently-O.

Student Note Topics: Here are some suggestions for patent law focused law review topics for 2010-11 that I would like to see for my own edification. Please send me an e-mail if you choose one of these.

Tags:

Kevin Collins: An Initial Comment on King Pharmaceuticals: The Printed Matter Doctrine as a Structural Doctrine and Its Implications for Prometheus Laboratories

Articles and Publications, Patent, Patent Cases 2010, Printed Matter Doctrine,

Kevin Collins has written a new Patently-O Patent Law Journal essay discussing the recent decision in King Pharmaceuticals. [Read the full essay]

On August 2, 2010, the Federal Circuit affirmed the district court’s summary judgment of patent invalidity in King Pharmaceuticals, Inc. v. Eon Labs, Inc. King Pharmaceuticals is most notable for its extension of the printed matter doctrine from objects claims that recite written texts as limitations to method claims that recite speech acts as limitations.

This Essay proceeds in three parts. Part I summarizes the King Pharmaceuticals opinion. Part II argues that the opinion was correctly decided, and it offers an original thesis about the role that the printed matter doctrine should play to enforce patentees’ disclosure obligations and preserve the deep structure of the Patent Act. Assuming that King Pharmaceuticals was correctly decided, Part III addresses the necessary next step in the continuing refinement of the printed matter doctrine. The Federal Circuit must explain why claims like the claim at issue in Prometheus Laboratories v. Mayo Collaborative Services are novel.

Cite as Kevin Emerson Collins, An Initial Comment on King Pharmaceuticals: The Printed Matter Doctrine as a Structural Doctrine and Its Implications for Prometheus Laboratories, 2010 Patently-O Patent L.J. 111 at /media/docs/2011/10/Collins.KingPharma.pdf.

Kevin Collins is a professor of law at Washington University in St. Louis.

Kevin Collins: An Initial Comment on King Pharmaceuticals: The Printed Matter Doctrine as a Structural Doctrine and Its Implications for Prometheus Laboratories

Journal,

On August 2, 2010, the Federal Circuit affirmed the district court’s summary judgment of patent invalidity in King Pharmaceuticals, Inc. v. Eon Labs, Inc. King Pharmaceuticals is most notable for its extension of the printed matter doctrine from objects claims that recite written texts as limitations to method claims that recite speech acts as limitations.

This Essay proceeds in three parts. Part I summarizes the King Pharmaceuticals opinion. Part II argues that the opinion was correctly decided, and it offers an original thesis about the role that the printed matter doctrine should play to enforce patentees’ disclosure obligations and preserve the deep structure of the Patent Act. Assuming that King Pharmaceuticals was correctly decided, Part III addresses the necessary next step in the continuing refinement of the printed matter doctrine. The Federal Circuit must explain why claims like the claim at issue in Prometheus Laboratories v. Mayo Collaborative Services are novel.

Cite as Kevin Emerson Collins, An Initial Comment on King Pharmaceuticals: The Printed Matter Doctrine as a Structural Doctrine and Its Implications for Prometheus Laboratories, 2010 Patently-O Patent L.J. 111 at /media/docs/2010/08/Collins.KingPharma.pdf.