Retractable Technologies v. Becton, Dickinson and Company (BD) (Fed. Cir. 2011)
In 2010, Judge Folsom of the Eastern District of Texas confirmed the jury finding that BD was liable for infringing three of RTI’s retractable syringe patents and that BD’s invalidity arguments were not convincing. On appeal a two-member majority (Judges Lourie and Plager) reversed-in-part — finding that the district court had erred in its construing of the term “body” too broadly by not limiting the term to a “one piece body.” The majority opinion was written by Judge Lourie. Judge Plager filed a concurring opinion asking courts to focus on the “actual invention” when construing claims. Chief Judge Rader wrote in dissent that the majority’s construction improperly imported limitations from the specification into the claims.
I begin with Judge Plager’s minority view of focusing attention on the actual invention (rather than solely on the written claim language) that has been a recent topic for discussion in the legal academy.
Plager writes:
However much desired by the claim drafters, who want claims that serve as business weapons and litigation threats, the claims cannot go beyond the actual invention that entitles the inventor to a patent. For that we look to the written description. I have written elsewhere about the curse of indefinite and ambiguous claims, divorced from the written description, that we regularly are asked to construe, and the need for more stringent rules to control the curse.
I understand how a perfectly competent trial judge can be persuaded by the siren song of litigation counsel to give the jury wide scope regarding what is claimed. But it is a song to which courts should turn a deaf ear if patents are to serve the purposes for which they exist, including the obligation to make full disclosure of what is actually invented, and to claim that and nothing more.
Although the written description and enablement requirements are intended to ensure that the claim scope is commensurate with the disclosure, Plager’s approach has some merit as a mechanism for allowing courts to adjust patent scope based on disclosure problems rather than the binary valid/invalid choice available under Section 112 p1 defenses.
The Majority Claim Construction: The meaning of a patent claim is considered a question of law that is reviewed de novo on appeal. That is, on appeal, no deference is to be given to the lower court’s opinion. In the 2005 en banc decision of Phillips v. AWH, 415 F.3d 1303, the Federal Circuit wrote that claim meaning should be determined by looking at the words of the claims themselves; the patent specification; the prosecution history; and any relevant extrinsic evidence. Phillips changed the law of claim construction by requiring that clams always be construed “in view of the written description.”
One-Piece Body: The claimed syringe includes a limitation to “a hollow syringe body comprising a barrel and having a front end portion and a back end portion, the back end portion further comprising at least one radially extending member providing finger grips for the syringe body.” The district court looked primarily to the claim language in ruling that the claimed “body” is not limited to a one-piece structure (except for dependent claim 25 that did explicitly limit the body to “one piece”).
Claim Differentiation: On appeal, the Federal Circuit first addressed the claim differentiation argument and found a weak implication that a claimed “body” should be broader than a claimed “one piece body.”
While the patents contain an independent claim that recites a “body,” with a dependent claim that limits the “body” to a “one-piece body,” none of the claims expressly recite a body that contains multiple pieces. Thus, while the claims can be read to imply that a “body” is not limited to a one-piece structure, that implication is not a strong one.
The decision suggests that the claim differentiation would have been a much stronger argument if a separate dependant claim had been limited to “a multiple-piece body” or “a non-one-piece body.”
Specification: In several decisions, the Federal Circuit has ruled that claim differentiation arguments will be outweighed by a contrary construction “dictated by the written description or prosecution history.” Here, the court found that the specification’s background section discussing the prior dictated the a narrow construction. In particular, the background section of one of the asserted patents included the following line:
The prior art has not recognized that such a structure can be molded as a one piece outer body
And, the Summary of the Invention stated that the invented syringe “features a one piece hollow outer body.” The specification discusses several embodiments of a one piece body and never discloses a body that consists of anything other than a one-piece body (except in disparaging the prior art).
In considering these competing arguments, the court noted that there is a very “fine line between construing the claims in light of the specification and improperly importing a limitation from the specification into the claims.” Here, the court ruled the one piece body is necessary “to tether the claims to what the specifications indicate the inventor actually invented.”
Chief Judge Rader’s dissent evokes the pre-Phillips notion that a patent claim can often be read in a vacuum unless scope is disclaimed during prosecution or terms specially defined in the specification.
He writes:
[Under Phillips] Claim language is to be given its ordinary and customary meaning, as understood by a person of ordinary skill in the art at the time of the invention. In this case, neither party contends that “body” has a special, technical meaning in the field of art, and thus claim construction requires “little more than the application of the widely accepted meaning of commonly understood words.” (quoting Phillips). The ordinary and customary meaning of “body” does not inherently contain a one-piece structural limitation. Moreover, neither the claim language nor the written description evinces intent by the patentee to limit the scope of “body” to one-piece bodies.
. . .
Certainly, the claims do not stand alone and must be read in light of the specifications. Nothing in the specifications, however, rebuts the strong presumption created by the claim language that “body” does not contain a one-piece structural limitation. The specifications do not reveal a special definition given by the inventor to the word “body.” Nor do the specifications contain an intentional disclaimer or disavowal of claim scope by the inventor.
This opinion serves as evidence that the court continues to struggle with claim construction and that there continues to be some amount of panel dependence in the results.
Boston Scientific Corp. v. Johnson & Johnson (Fed. Cir. 2011) Download 10-1230 Judges: Bryson, Gajarsa (concurring-in-part), Moore (author)
The line between written description and enablement analyses is often unclear; Boston Scientific makes it even blurrier, at least in the eyes of one Federal Circuit judge.
The patents involved in this appeal relate to drug-eluting coronary stents using a particular chemical compound. One set of patents ("the 1997 patents") claims stents using either rapamycin or a macrocyclic lactone analog of rapamycin, while the other patent-in-suit, the '662 patent, claims stents using either rapamycin or a macrocyclic triene analog of rapamycin. In both cases, the the analog limitations were added well after the patents' priority date. For purposes of the appeal, both analogs were broadly defined to be any molecule with structural similarity to rapamycin.
The district court granted summary judgment of invalidity of the 1997 patents based on a lack of enablement and lack of adequate written description, and granted summary judgment of the '662 patent based on lack of adequate written description. The patent holders appealed.
Species-Genus Analysis On appeal, the majority applied the "species-genus" framework to hold the patents invalid for lack of adequate written description. Under that approach, "a sufficient description of a genus requires the disclosure of either a representative number of species falling within the scope of the genus or structural features common to the members of the genus so that one of skill in the art can 'visualize or recognize' the members of the genus." Slip Op. at 17, quoting Ariad, 598 F.3d at 1350. Here, the 1997 patents contained no examples of macrocyclic lactone analogs of rapamycin and gave no essentially guidance as to how to determine whether a compound falls into that category. Similarly, the '662 patent, although disclosing the broad genus of "analogs" of rapamycin, failed to disclose the sub-genus of "macrocyclic triene analogs" of rapamycin.
Lack of Examples is Telling In reaching its conclusion, te majority paid particular heed to the lack of any examples of the claimed genera. "Although examples are not always required to satisfy the written description requirement, the lack of any disclosure of examples may be considered when determining whether the claimed invention is adequately described." Slip Op. at 18.
Use of POSITA Knowledge to Fill In the Blanks Although acknowledging that in some cases it may be appropriate to look to the knowledge of one of skill in the art when performing a written description analysis, the majority imposed a substantial limit on this approach. "Because the specification is viewed from the perspective of one of skill, in some circumstances, a patentee may rely on information that is "well-known in the art" for purposes of meeting the written description requirement….However, when the four corners of the specification directly contradict information that the patentee alleges is "well-known" to a person of skill at the effective filing date, no reasonable jury could conclude that the patentee possessed the invention." Slip Op. at 22-23. In this instance, the majority concluded that "specification of the 1997 patents itself refutes any conclusion that the structural elements and its mechanism of action and biological activity was known….Thus, there is insufficient correlation between the function and structure of rapamycin and its analogs to provide adequate written description support for the entire genus of macrcyclic lactone analogs of rapamycin." Slip Op. at 23 (internal citation omitted).
Judge Gajarsa: Stop Using Written Description When Enablement Will Do Concurring in the judgment of invalidity and with the majority's ruling on the '662 patent, Judge Gajarsa wrote separately to express the view that "[t]he enablement requirement of 35 U.S.C. § 112 ¶ 1 is the appropriate tool for invalidating claims that are broader than their disclosure." The result is a blurring of the line between enablement and written description:
The majority’s opinion further extends the written description requirement into the realm of enablement. Much of the confusion in this case is due to the difficulty of determining what constitutes a genus or a subgenus, the relationship between the structure and the function of compounds, and how the written description requirement applies to novel compounds as opposed to novel combinations of known elements. These are legal inquiries predicated on disputed issues of material fact. Applying the enablement requirement would help to clear the thicket of jurisprudence regarding § 112 ¶ 1. As discussed briefly below, in this case, the enablement analysis is simpler and more appropriate.
Tewari De-Ox Systems v. Mountain States (5th Cir. 2011)
In 2005, Tewari’s CEO (Dr. Tewari) visited Mountain Systems (MTSR) to demonstrate his “zero ppm oxygen meat-packing method” that greatly extends the shelf life of packaged meats. Prior to the demonstration, the two companies signed a non-disclosure agreement (NDA). When MSTR allegedly began using the method without permission.
The major catch in Tewari’s breach of trade secret argument was that the bulk of the disclosed method could also be found in Tewari’s already published patent application. (The application was abandoned after receiving a final rejection on obviousness grounds).
Trade secret is derived from state law. Under Texas law (the law of this case), a successful trade secret plaintiff must prove that (1) a trade secret existed; (2) the trade secret was “acquired through a breach of a confidential relationship or discovered by improper means;” and (3) that the trade secret was then used without authorization.
Patent Publication Eliminates Trade Secret: In a straightforward opinion, the appellate panel held once published, the information in a patent application should be considered “generally known and readily available” and therefore are no longer amenable to trade secret protection.
Tewari argued that the patent application publication should not matter in this case because the defendants obtained their information from him in a confidential transaction rather than from the public source. The appellate court, however, rejected that argument because the application was already published at the time of his disclosure. (The court noted that the source of defendant’s trade secret knowledge may be important for trade secret analysis if the publication occurred subsequent to the fiduciary relationship.)
Although the material disclosed in the patent application is not protectable under Texas trade secret law, the court held that Tewari may have transferred protectable information that was not in the patent application — such as specific information regarding making and using the invention that was not particularly identified in the patent application.
Crown Packaging Technology, Inc. v. Ball Metal Beverage Container Corporation (Fed. Cir. 2011) Download 10-1020 Panel: Newman, Dyk (dissent), Whyte (author)
For the past decade, the Federal Circuit has struggled to reconcile the the written description rules announced in its biotechnology-related opinions with the patentability requirements for patents in other technological fields. Particularly challenging for the court are the implications of a strong written description doctrine for mechanical inventions, which historically were subject to little scrutiny under the broad approach to the written description requirement.
Crown Packaging presents the latest iteration of the court's thinking on this issue. Penned by the highly regarded Judge Ronald M. Whyte of the Northern District of California, the opinion firmly lays to rest one possible argument for challenging mechanical patents on written description ground and confirms that the Problem-Solution approach to analyzing written description issues applied in Revolution Eyewear is alive and well post-Ariad. Given the depth of its treatment of the issue, this is an opinion that should go into every attorney's toolbag for addressing non-biotech related written description issues.
The patents at issue in Crown disclose a beverage can end that reduces the amount of metal wasted during the process of seaming the can end to the can body. (Picture a can of soda. The can end is the top portion that one drinks from. The can body is the part that contains the beverage.) The patents (which share a specification) solve the problem of reducing metal waste in two ways: first, by changing the angle of the vertical portion of the inside wall from nearly perpendicular to significantly angled, and second, by reducing width of the reinforcing bead (the little channel that runs along the inside of the can lip that tends to fill up with soda). Because simply reducing the width of the reinforcing bead can present structural challenges and result in unsightly scuffing, the patent also discloses a particular type of chuck (the portion of the seaming machinery that sits inside the top of the can against which the lip is rolled) that does not drive deeply into the reinforcing bead.
Figure 2 illustrates the prior art; Figure 5 is an embodiment of the invention. In the prior art can end, the peripheral walls are nearly vertical and the chuck (element 17) fully enters the reinforcing bead (element 15); in the embodiment of the invention, the walls are closer to 45 degrees and the chuck (element 31) does not enter the reinforcing bead (element 25).
Crown's two patents, one for a product and the other a method of manufacturing, include claims covering just the use of an angled wall without mentioning the narrow bead or penetration of the chuck. During the district court proceedings, Ball argued that these claims lacked written description support because they covered embodiments both in which the chuck was driven inside the reinforcing channel as well as embodiments in which the chuck was driven outside the bead despite only describing embodiments showing the latter in the specification. The district court agreed with Bell, granting summary judgment of invalidity.
Judge Whyte and Judge Newman disagreed with the district court. After dismissing the species-genus approach to these types of situations, the majority framed the issue in problem-solution terms. Relying on Revolution Eyeware, Inc. v. Aspex Eyewear, Inc., 563 F.3d 1358 (Fed. Cir. 2009), the court agreed with Crown that "[i]nventors can frame their claims to address one problem or several, and the written description requirement will be satisfied as to each claim as long as the description conveys that the inventor was in possession of the invention recited in the claim." Slip Op. at 13, quoting Revolution Eyewear at 1367. Here, there were two separate, clearly described solutions to the problem of improving metal useage: modifying the slope of the wall or limiting the width of the reinforcing bead. Nor does it matter that both solutions relate to the same problem: "we specifically held in Revolution Eyewear that it is a 'false premise that if the problems addressed by the invention are related, then a claim addressing only one of the problems is invalid for lack of sufficient written description." Slip. Op. at 14, quoting Revolution Eyewear at 1367. And the majority distinguished the issue of enablement from that of written description, concluding that Ball's argument relating to whether one of ordinary skill in the art could not seam a can with an increased sloped chuck wall without also avoiding contact with the reinforcing bead presented an issue of enablement, not written description.
One possible limitation on the majority's holding, however, is where the specification mandates that the prior art problems must always be solved together. Here, the specification did not so require – rather, "the specification supports the asserted claims that achieve metal savings by varying the slope of the chuck wall alone." Slip Op. at 15. Yet this will likely be an argument raised by future parties.
The Dissent Although agreeing with the majority on the reversal of the district court's grant of summary judgment of anticipation, Judge Dyk disagreed with its treatment of the written description issue. Judge Dyk's dissent rested on a different reading of Revolution:
Relying on Revolution Eyewear, the majority holds that the claims are valid. However, Revolution Eyewear, in holding that a claim may address only one of the purposes disclosed in the specification, still requires explicit disclosure of the embodiments in the claims: “Inventors can frame their claims to address one problem or several, and the written description requirement will be satisfied as to each claim as long as the description conveys that the inventor was in possession of the invention recited in that claim.” Revolution Eyewear, Inc. v. Aspex Eyewear, Inc., 563 F.3d 1358, 1367 (Fed. Cir. 2009) (emphasis added). Therefore, the claims, whether directed to solving a single problem or multiple problems, must still be grounded in the specification.
Thus in Judge Dyk's view, the claims lack written description:
There is no question that the specification does not teach combining the sloped can end wall together with the wider, prior art bead and driving the chuck into the bead instead of the sloped can end wall. That combination is a new and distinct invention, and our written description jurisprudence requires that it be described in the specification. The fact that the claims are broad enough to cover such an invention or imply that the claims cover such an invention is not sufficient when the invention itself is not described either in the claims or elsewhere in the specification. The failure of the specification to describe the invention requires invalidation of claims 50 and 52.
Commentary: I find it difficult to agree with Judge Dyk's distinguishing of Revolution Eyewear, which was decided on strikingly similar facts, or his deeper view of what constitutes an invention. In Revolution, the patent addressed two problems presented by prior-art magnetic sunglasses that attached to the frame of a pair of glasses: a frame strength problem, which the inventor solved by placing the magnets on protrusions extending from the primary and auxiliary frames, and a stability problem, which the inventor solved by having the protrusions extending from the auxiliary frame rest on top of protrusions extending from the primary frame. The asserted claim covered only the former: placing the magnets on protrusions, and did not include any limitations directed to the stability problem.
In rejecting the written description defense, the Revolution court pointed specifically to Figure 3 of the original patent, reproduced below:
This figure discloses only the combination embodiment: a primary frame with magnet-containing protrusions designed so that the auxiliary frame protrusions will rest on top (element 13/14 on the primary, 21/22 on the auxiliary). The court's opinion did not rely on any embodiments showing only magnet-containing projections without the stability component. Yet, under Judge Dyk's reasoning, such an embodiment could not provide the necessary written description support.
Moving into the abstract, Judge Dyk's view of the nature of an invention also seems problematic to me. Judge Dyk seems to be expressing the Louriean idea that "the invention" must be limited to the identical embodiments disclosed in the patent. Any alteration of those embodiments, such as combining one particular inventive idea disclosed in the patent with the prior art, renders the claim invalid. But this bright line rule ignores one of the underlying tensions in patent law, namely, that it is impossible to describe every single possible permutation of the invention. Patents don't need to specify, for example, that a particular device may be painted every color of the rainbow to provide written description support for a claim that contains no limitations as to color. Yet this seems to be the logical extension of the embodiment-only approach, and one that continues to be trouble me.
Guest Post by Ted Sichelman, University of San Diego School of Law
As any avid reader of Patently-O knows, the pending patent reform bills all contain a shift from a primarily "first to invent" to a primarily "first to file" approach. Previous posts have described many of the differences between the present and proposed approaches (see, e.g., here and here). In this post, I focus on the treatment in the bills of an inventor's sale and use of a claimed invention in the one-year period just prior to filing. I argue that the bills' language does not effectuate Congress's intent to keep the inventor grace period intact, and I propose suitable language to do so at the end of the post.
Under the Patent Act now in effect, an inventor's disclosure of a claimed invention in a previously filed patent or application, or an inventor's use, sale, or offer for sale of the invention can only count as prior art or a bar to patenting (if at all) if those events occurred more than one year before the effective filing date of the application claiming the invention. This one year limitation on prior art is commonly referred to as the "grace period."
Apparently, the Senate meant to carry over the grace period for an inventor's disclosure, use, or sale of a claimed invention—as well as exclude potential prior art derived from the inventor—in the bill it recently passed. As Senator Patrick Leahy exclaimed in a colloquy with Senator Orrin Hatch, if the inventor's invention is "described in a printed publication, or in public use, on sale, or otherwise [made] available to the public" by the inventor (or one who derives from the inventor) less than one year before filing, then "there is absolutely no situation in which" this activity would bar patentability.
Unfortunately—as Dennis Crouch, Hal Wegner, and others have recognized—the plain language of the relevant provisions in the recently passed Senate bill, as well as the pending House bill, does not appear as broad as Senator Leahy believes. In particular, the relevant provisions only exclude from prior art "disclosures" by inventors (and derivers) made less than one year before filing ("A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention …") (emphasis added).
A plain language interpretation of "disclosure" would refer to printed material, such as patents and publications—as well as oral disclosures, such as at a trade show—but not necessarily uses, sales, or offers for sale of the invention. Moreover, an actual "disclosure" of the invention would presumably require that the disclosed material be "enabling" in the prior art sense—namely, that description, use, sale, etc., disclose to one of the ordinary skill in the art how to make (or perform the steps of) the invention (see, e.g., Perricone v. Medicis Pharm. Corp. (Fed. Cir. 2005) (holding that a "disclosure is prior art to the extent of its enabling disclosure"); In re Donohue (Fed. Cir. 1985) ("[E]ven if the claimed invention is disclosed in a printed publication, that disclosure will not suffice as prior art if it is not enabling.")).
Yet, the Federal Circuit has routinely held that "non-informing" uses or sales of the claimed invention made more than one year before filing—namely, ones which would not inform one of ordinary skill how to make the invention—may count as prior art under the current statute (see, e.g., See In re Epstein (Fed. Cir. 1994) ("Beyond this 'in public use or on sale' finding, there is no requirement for an enablement-type inquiry.").). Moreover, the Federal Circuit has held that secret use of a claimed method by an inventor to make a product that is sold to the public may count as prior art (see Gore v. Garlock (Fed. Cir. 1983)). Thus, a plain language reading of "disclosure" arguably would not—contrary to Senator Leahy's intention—exclude from prior art non-informing or secret uses and sales made within the grace period.
Senator Hatch asserts there is no problem with the "disclosure" language because "[i]f a disclosure resulting from the inventor's actions is not one that is enabled … then such a disclosure would not constitute patent-defeating prior art … in the first place." Yet, nothing in the Senate bill points towards such a reading. Specifically, the provision in the bill enumerating what counts as prior art states:
Sec. 102. Conditions for patentability; novelty
(a) Novelty; Prior Art-
A person shall be entitled to a patent unless–
(1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention ….
Granted, this provision appears to require that sale and use prior art be made "available to the public." Yet, under Federal Circuit doctrine, sale and use art need not be enabling in order to be available to the public. In particular—as I just mentioned—"non-informing" and "secret" uses and sales may count as prior art. Thus, a plain language reading of the pending bills would arguably include as prior art sales and uses that are clearly not "disclosures" in the ordinary sense of the term.
And because courts of late—particularly the Supreme Court (see, e.g., Bilski)—have used plain language interpretations of the Patent Act, it is not prudent drafting to hope courts will look to the legislative history to fix the situation. Moreover, as Hal Wegner has noted, the Leahy-Hatch statements actually post-date the passage of the Senate bill, potentially negating their value as probative legislative history—especially in view of some seemingly contrary statements in the pre-passage legislative history (see, e.g., 157 Cong. Rec. 1348, 1355-56 (Mar. 9, 2011) ("An inventor who publishes his invention retains an absolute right to priority if he files an application within one year of his disclosure.") (emphasis added)).
The policy problem with treating (at least many) sales and uses made during the one-year grace period as prior art is that it forces inventors to forgo a wide range of commercial activity prior to filing for a patent. This would impose a particularly heavy burden on independent inventors, as well as startup and early-stage companies, who simply cannot afford to file patent applications on every invention before getting a sense of the invention's commercial viability. (See here and here for data on startup patenting costs.)
In order to remedy the problem, the bills' proposed provision can be easily revised. Just this morning, a Manager's amendment (Download Managers_Amendment_to_HR1249) was introduced in the House that would remove "in public use, on sale, or otherwise available to the public" from the prior art provision of Section 102(a)(1) and replace it with "otherwise disclosed to the public." This change would presumably mandate that only sales and uses, whether made by the inventor or a third party, that are enabling would ever count as prior art—and not just for grace period purposes. This legislative change would effectively overrule many years of well-established judicial precedent that non-informing uses and sales by inventors and third parties, as well as a secret use of a claimed method by an inventor to manufacture products then sold to the public, count as bars to patenting.
Such a shift would be unwise, because it would allow inventors to commercially benefit from their inventions (without disclosing them) for an indefinite period of time before filing for a patent. As Judge Learned Hand explained in Metallizing Engineering (2d Cir. 1946) (emphasis added), "It is indeed true that an inventor may continue for more than a year to practice his invention for his private purposes of his own enjoyment and later patent it. But that is, properly considered, not an exception to the doctrine, for he is not then making use of his secret to gain a competitive advantage over others; he does not thereby extend the period of his monopoly."
Instead, the provisions enumerating prior art should be left intact, and the exclusionary clause revised to make it absolutely clear that all inventor sales, uses, or other activities that make the invention available to the public less than one year before filing would be excluded as prior art (added material underlined):
SEC. 2. FIRST INVENTOR TO FILE.
* * *
`(b) Exceptions-
`(1) DISCLOSURES, USES, OR SALES MADE 1 YEAR OR LESS BEFORE THE EFFECTIVE FILING DATE OF THE CLAIMED INVENTION- A disclosure, use, offer for sale, or sale made 1 year or less before the effective filing date of a claimed invention, or making the claimed invention available to the public 1 year or less before the effective filing date of the claimed invention, shall not be prior art to the claimed invention under subsection (a)(1) if–
`(A) the disclosure, use, offer for sale, or sale of the claimed invention, or the making of the claimed invention available to the public, was made by the inventor or joint inventor or by another who obtained the subject matter disclosed, used, offered for sale, sold, or made available to the public, directly or indirectly from the inventor or a joint inventor; or
`(B) the subject matter disclosed, used, offered for sale, sold, or made available to the public had, before such disclosure, use, offer for sale, or sale of the claimed invention, or the making available to the public of the claimed invention, been publicly disclosed by the inventor or a joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.
Ted Sichelman is an Assistant Professor at the University of San Diego School of Law, where he teaches patent law and other intellectual property courses. Charles Coover provided helpful research assistance for this post.
Although the US Patent & Trademark Office (USPTO) and the Department of Justice (DOJ) have been at odds on the issue of the patent eligibility of genetic material isolated from a living organism, the two agencies are speaking with one voice against the Federal Circuit's recent decision in Hyatt v. Kappos. In that en banc opinion, the court broadened a patent applicant's rights associated with the "remedy by civil action" provided by Section 145 of the Patent Act. Under § 145, an applicant can file a civil action in DC District Court whenever "[a]n applicant dissatisfied with the decision of the Board of Patent Appeals and Interferences."
In a 6-2-1 decision, the Federal Circuit reversed its prior precedent and held that a patent applicant is 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.
Judge Moore wrote in the majority opinion that:
[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 administrative proceedings—and once an applicant introduces new evidence on an issue, the district court reviews that issue de novo.
However, the Court also held 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.
Petition for Writ of Certiorari: In its petition to the Supreme Court, the US Government argues that the Federal Circuit decision is faulty because it "disregards fundamental principles of administrative law" and diverges from the traditional understanding of the statute.
Getting from the PTO to the Court: After losing at the Board, an applicant has two primary avenues for challenging the Board's decision: (1) Appeal to the Court of Appeals for the Federal Circuit under 35 U.S.C. § 141; or (2) File a civil action in district court under 35 U.S.C. § 145. In Dickinson v. Zurko, the Supreme Court held that Federal Circuit direct review of BPAI decisions under Section 141 must follow the deferential standards that govern judicial review of final agency action under the Administrative Procedure Act (APA). 527 U.S. 150 (1999). In that decision, the Supreme Court distinguished between Section 145 and Section 141 actions – noting that Section 145 actions "permit the disappointed applicant to present to the court evidence that the applicant did not present to the PTO." However, the court did not address the particular circumstances in which new evidence may be permitted nor did it address how the new evidence should be treated.
Here, the government asks the Supreme Court to fill the gap in Zurko by holding that:
The plaintiff in a Section 145 action may not introduce new evidence that could have been presented to the PTO in the first place; and
When new evidence is introduced, the district court should still give deference to the prior decisions of the PTO.
Background: Gilbert 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. If the Supreme Court takes the case, it will be the second for Hyatt who won a 2002 case against California income tax collectors. In that case, California was pursuing 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.
The European Patent Office (EPO) and Google signed an agreement, in which the EPO will use Google's Translate technology to offer translation of patents on its website. The EPO will translate patents on its website into 28 European languages, as well as into Chinese, Japanese, Korean, and Russian. The partnership between the EPO and Google will enable free, real-time translation of millions of patents granted in European countries, China, Japan, Korea and Russia. [Link]
Monsanto sued over transgenic seeds
Farmers, agricultural organizations, seed businesses, and others filed suit against Monsanto over Monsanto's transgenic seed patents. The plaintiffs, led by the Public Patent Foundation, state that they brought suit to protect themselves from ever being accused of infringing patents on transgenic seeds, because contamination is bound to happen. [Link] Plaintiffs contend that since they have no intention to infringe they should not be sued for patent infringement if such contamination occurs. The plaintiffs claim that Monsanto's transgenic seed patents are not valid for several reasons. One reason being that Monsanto's transgenic seeds are injurious to the well being, good policy, and threatens to poison people. (Quoting Justice Story's 1817 Lowell decision). [Complaint]
U.S. International Trade Commission (ITC) decides more patent cases
The ITC job is to settle disputes over imported products and in recent years the ITC has seen an increase in patent cases, particurly in mobile technology. Plaintiffs can file these suits even before the alleged infringement has occurred in the U.S., which can be a big incentive to keep the alleged infringing products out of the market. The increase can be seen as a consequence of the decision in eBay v. MercExchange, in which the court stated that an injunction should not automatically issue based on a finding of patent infringement, but a court must use the four factor analysis. This eBay decision does not have to be followed in ITC cases and therefore the ITC can grant an injunction based solely on the finding of patent infringement. [Link]
Patent Jobs:
Shay Gleen is searching for patent attorneys with either 1-2 years or 4-5 years patent prosecution experience. [Link]
Washida & Associates is looking for an electrical U.S. patent attorney for their Tokyo office. [Link]
McDonnell Boehnen Hulbert & Berghoff is seeking a patent agent with 2-4 years experience to work in their electrical arts group. [Link]
Kramer Levin Naftalis & Frankel is seeking a patent agent with a mechanical engineering background. [Link]
Upcoming Events:
The Florida Bar will hold its 2nd Annual Intellectual Property Symposium in Fort Lauderdale on April 14th & 15th. The symposium will take a look at the story behind the $21 Million Verdict in Powell vs. Home Depot, the Gene Patent Controversy, Licensing and Endorsements in Sports (and Entertainment), Intellectual Property Protection vs. The First Amendment and Bankruptcy. Guest speakers include Lori Andrews, Felix Wu, Ury Fischer, Chris Holman, and Robert Stoll. [Link]
American University Washington College of Law will host the first annual Global Congress on Public Interest Intellectual Property August 25-27 in Washington DC. The Global Congress on Public Interest Intellectual Property will serve as a site for the sharing of research, ideas and policy proposals for how international intellectual property law should be constructed to better protect the full range of global public interest concerns. [Link]
The 3rd Annual Corporate IP Counsel Forum will be held May 24-25 in New York. The Corporate IP Counsel Summit is the premier forum to hear about solutions to maximize IP assets, avoid costly litigation, create and maintain efficient infrastructure, fully integrate IP strategies into business plans, prepare for anticipated patent law changes, and much more. Guest speakers include Michael Bishop, Mony Ghose, Mark Costello, Michael Springs, Charles Kwalwasser, and Timothy Wilson. Patently-O readers will receive a $100 discount by using promo code FZA884. [Link]
The European Patent Office (EPO) and Google signed an agreement, in which the EPO will use Google's Translate technology to offer translation of patents on its website. The EPO will translate patents on its website into 28 European languages, as well as into Chinese, Japanese, Korean, and Russian. The partnership between the EPO and Google will enable free, real-time translation of millions of patents granted in European countries, China, Japan, Korea and Russia. [Link]
Monsanto sued over transgenic seeds
Farmers, agricultural organizations, seed businesses, and others filed suit against Monsanto over Monsanto's transgenic seed patents. The plaintiffs, led by the Public Patent Foundation, state that they brought suit to protect themselves from ever being accused of infringing patents on transgenic seeds, because contamination is bound to happen. [Link] Plaintiffs contend that since they have no intention to infringe they should not be sued for patent infringement if such contamination occurs. The plaintiffs claim that Monsanto's transgenic seed patents are not valid for several reasons. One reason being that Monsanto's transgenic seeds are injurious to the well being, good policy, and threatens to poison people. (Quoting Justice Story's 1817 Lowell decision). [Complaint]
U.S. International Trade Commission (ITC) decides more patent cases
The ITC job is to settle disputes over imported products and in recent years the ITC has seen an increase in patent cases, particurly in mobile technology. Plaintiffs can file these suits even before the alleged infringement has occurred in the U.S., which can be a big incentive to keep the alleged infringing products out of the market. The increase can be seen as a consequence of the decision in eBay v. MercExchange, in which the court stated that an injunction should not automatically issue based on a finding of patent infringement, but a court must use the four factor analysis. This eBay decision does not have to be followed in ITC cases and therefore the ITC can grant an injunction based solely on the finding of patent infringement. [Link]
Patent Jobs:
Shay Gleen is searching for patent attorneys with either 1-2 years or 4-5 years patent prosecution experience. [Link]
Washida & Associates is looking for an electrical U.S. patent attorney for their Tokyo office. [Link]
McDonnell Boehnen Hulbert & Berghoff is seeking a patent agent with 2-4 years experience to work in their electrical arts group. [Link]
Kramer Levin Naftalis & Frankel is seeking a patent agent with a mechanical engineering background. [Link]
Upcoming Events:
The Florida Bar will hold its 2nd Annual Intellectual Property Symposium in Fort Lauderdale on April 14th & 15th. The symposium will take a look at the story behind the $21 Million Verdict in Powell vs. Home Depot, the Gene Patent Controversy, Licensing and Endorsements in Sports (and Entertainment), Intellectual Property Protection vs. The First Amendment and Bankruptcy. Guest speakers include Lori Andrews, Felix Wu, Ury Fischer, Chris Holman, and Robert Stoll. [Link]
American University Washington College of Law will host the first annual Global Congress on Public Interest Intellectual Property August 25-27 in Washington DC. The Global Congress on Public Interest Intellectual Property will serve as a site for the sharing of research, ideas and policy proposals for how international intellectual property law should be constructed to better protect the full range of global public interest concerns. [Link]
The 3rd Annual Corporate IP Counsel Forum will be held May 24-25 in New York. The Corporate IP Counsel Summit is the premier forum to hear about solutions to maximize IP assets, avoid costly litigation, create and maintain efficient infrastructure, fully integrate IP strategies into business plans, prepare for anticipated patent law changes, and much more. Guest speakers include Michael Bishop, Mony Ghose, Mark Costello, Michael Springs, Charles Kwalwasser, and Timothy Wilson. Patently-O readers will receive a $100 discount by using promo code FZA884. [Link]
The European Patent Office (EPO) and Google signed an agreement, in which the EPO will use Google's Translate technology to offer translation of patents on its website. The EPO will translate patents on its website into 28 European languages, as well as into Chinese, Japanese, Korean, and Russian. The partnership between the EPO and Google will enable free, real-time translation of millions of patents granted in European countries, China, Japan, Korea and Russia. [Link]
Monsanto sued over transgenic seeds
Farmers, agricultural organizations, seed businesses, and others filed suit against Monsanto over Monsanto's transgenic seed patents. The plaintiffs, led by the Public Patent Foundation, state that they brought suit to protect themselves from ever being accused of infringing patents on transgenic seeds, because contamination is bound to happen. [Link] Plaintiffs contend that since they have no intention to infringe they should not be sued for patent infringement if such contamination occurs. The plaintiffs claim that Monsanto's transgenic seed patents are not valid for several reasons. One reason being that Monsanto's transgenic seeds are injurious to the well being, good policy, and threatens to poison people. (Quoting Justice Story's 1817 Lowell decision). [Complaint]
U.S. International Trade Commission (ITC) decides more patent cases
The ITC job is to settle disputes over imported products and in recent years the ITC has seen an increase in patent cases, particurly in mobile technology. Plaintiffs can file these suits even before the alleged infringement has occurred in the U.S., which can be a big incentive to keep the alleged infringing products out of the market. The increase can be seen as a consequence of the decision in eBay v. MercExchange, in which the court stated that an injunction should not automatically issue based on a finding of patent infringement, but a court must use the four factor analysis. This eBay decision does not have to be followed in ITC cases and therefore the ITC can grant an injunction based solely on the finding of patent infringement. [Link]
Patent Jobs:
Shay Gleen is searching for patent attorneys with either 1-2 years or 4-5 years patent prosecution experience. [Link]
Washida & Associates is looking for an electrical U.S. patent attorney for their Tokyo office. [Link]
McDonnell Boehnen Hulbert & Berghoff is seeking a patent agent with 2-4 years experience to work in their electrical arts group. [Link]
Kramer Levin Naftalis & Frankel is seeking a patent agent with a mechanical engineering background. [Link]
Upcoming Events:
The Florida Bar will hold its 2nd Annual Intellectual Property Symposium in Fort Lauderdale on April 14th & 15th. The symposium will take a look at the story behind the $21 Million Verdict in Powell vs. Home Depot, the Gene Patent Controversy, Licensing and Endorsements in Sports (and Entertainment), Intellectual Property Protection vs. The First Amendment and Bankruptcy. Guest speakers include Lori Andrews, Felix Wu, Ury Fischer, Chris Holman, and Robert Stoll. [Link]
American University Washington College of Law will host the first annual Global Congress on Public Interest Intellectual Property August 25-27 in Washington DC. The Global Congress on Public Interest Intellectual Property will serve as a site for the sharing of research, ideas and policy proposals for how international intellectual property law should be constructed to better protect the full range of global public interest concerns. [Link]
The 3rd Annual Corporate IP Counsel Forum will be held May 24-25 in New York. The Corporate IP Counsel Summit is the premier forum to hear about solutions to maximize IP assets, avoid costly litigation, create and maintain efficient infrastructure, fully integrate IP strategies into business plans, prepare for anticipated patent law changes, and much more. Guest speakers include Michael Bishop, Mony Ghose, Mark Costello, Michael Springs, Charles Kwalwasser, and Timothy Wilson. Patently-O readers will receive a $100 discount by using promo code FZA884. [Link]
In an interesting opinion, DC District Court Judge Rosemary Collyer has ruled Alice Corp's four asserted patents invalid under 35 U.S.C. § 101 for failing to claim patentable subject matter. This case can be seen as flowing from the Supreme Court's recent decision in Bilski v. Kappos, 130 S. Ct. 3218 (2010).
Alice is an Australian company owned largely by the huge National Australian Bank. CLS is a UK company that works with banks to settle foreign exchange accounts – and is involved with about 95% of the global foreign exchange trading. The patents are generally directed at methods and systems for creating and settling debts that uses both credit/debit records and shadow credit/debit records. Claim 1 of Alice's Patent No. 7,149,720 might be seen as an example:
'720 Patent, Claim 1. A data processing system to enable the exchange of an obligation between parties, the system comprising:
a data storage unit having stored therein information about a shadow credit record and shadow debit record for a party, independent from a credit record and a debit record maintained by an exchange institution; and
a computer, coupled to said data storage unit, that is configured to
(a) receive a transaction;
(b) electronically adjust said shadow credit record and/or said shadow debit record in order to effect an exchange obligation arising from said transaction, allowing only those transactions that do not result in a value of said shadow debit record being less than a value of said shadow credit record; and
(c) generate an instruction to said exchange institution at the end of a period of time to adjust said credit record and/or said debit record in accordance with the adjustment of said shadow credit record and/or said shadow debit record, wherein said instruction being an irrevocable, time invariant obligation placed on said exchange institution.
As in Bilski, the district court focused on the question of whether the asserted claims constitute "abstract ideas." In doing so, the court began with an admission that "[t]here is no clear definition of what constitutes an abstract idea." Rather the approach must be by-analogy to Flook, Benson, and Diehr. In the 2010 Federal Circuit case of Research Corp. Techs. v. Microsoft Corp., 627 F.3d 859, 868 (Fed. Cir. 2010), the Federal Circuit offered the additional wisdom that to be disqualifying, the abstractness "should exhibit itself so manifestly as to override the broad statutory categories of eligible subject matter and the statutory context that directs primary attention on the patentability criteria of the rest of the Patent Act."
The court agreed with the patentee that the computer system claim (above) was directed toward a "machine" as enumerated within Section 101. However, the common law exceptions to Section 101 are overriding factors that operate regardless of whether a machine or process can be identified within the claimed subject matter. "Alice's system or product claims [cannot] be saved only by the fact they may nominally recite a 'computer' or 'manufacture.'
In its abstract-idea analysis, the court focused on preemption – holding that the claim "would preempt the use of the abstract concept of employing a neutral intermediary to facilitate simultaneous exchange of obligations in order to minimize risk on any computer which is, as a practical matter, how these processes are likely to be applied." In an apparent effort to bolster its conclusion, the court also suggested that it is likely abstract because it would be infringed by "common and everyday financial transactions."
Notes:
CLS filed this declaratory judgment action against Alice after Alice had warned CLS (by letter) that "every transaction involving CLS' settlement of foreign exchange transactions is impacted by [our patent] claims" and that CLS was "willfully infringing Alice's intellectual property."
CLS is represented by Kaye Scholer; Alice is represented by Williams & Connolly.
Guest post by Gwilym Roberts of the UK firm Kilburn & Strode
In a flurry of decisions last week the EU confirmed the viability of a unitary EU patent but rejected any tenable form of a unitary court for enforcing it.
The enhanced cooperation process by which a subset of countries agree to a common procedure was agreed in terms of arriving at a language regime although this could still be opposed by Italy and Spain. Hence the path to a unitary patent, granted as an EU designation within the EPO framework, appears permissible. However the European Court of Justice (ECJ) in a separate decision rejected the idea of any unitary patent court system which the ECJ itself was not part of. Most users of the system are extremely nervous about using the ECJ as a possible forum for a unitary court simply because of the lack of experience there and so this seems insurmountable.
As a result in due course it will be possible to get an EU patent but it will still be necessary to enforce it country by country. Given that it is likely to take years to see the paperwork through to obtain a unitary patent in any event, therefore, little or no progress has been made and the benefits of a unitary patent without a unitary court go no further than a potential slight saving in translation costs. As a reasonable framework is being developed for translation savings via the London Agreement, which is already in place, it seems that it may make more sense to pay attention to increasing the number of countries party to the savings available by this alternative route.
In summary, therefore, there has been very little progress despite the excitement over the last few months in relation to an EU patent and the only question is whether, after 40 years of failure, anyone other than the Politicians is really very surprised?
The U.S. Senate has now passed its new patent bill, S. 23. Numerous comments have been made, particularly about the first-to-file revisions of this law. However, no one is commenting on the effect of the following clauses in amended section 102:
102(b) Exceptions-
(1) DISCLOSURES MADE 1 YEAR OR LESS BEFORE THE EFFECTIVE FILING DATE OF THE CLAIMED INVENTION- A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a) (1) if–
(A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or
(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.
Subparagraph (B) has the following result: If you disclose your invention to the public, or more precisely if the subject matter of your later patent application has been previously “publicly disclosed”, then you effectively have established your US filing date.
This is an unusual provision in patent law, indeed unique. But it appears to be good policy. It’s true; anyone relying on this provision would lose their rights in Europe. But if an inadvertent disclosure were to occur as through a public use or a public presentation, then if that disclosure meets the requirements of this section, the applicant would have thereby locked-in their right to obtain a US patent. This would be true, of course, only so long as they do not otherwise violate the one-year deadline to file based their own personal disclosures which have made the invention available to the public. This assumes, as well, that there has been no prior disclosure by a third-party.
This provision repairs a flaw in the present Canadian law. Under the Canadian patent statute, an inventor who puts his invention on the market and relies on the one-year grace period before filing in Canada, can still lose his patent rights if an independent inventor makes the invention “available to the public” before the inventor has filed his patent application. In other words, it’s still a “race to the patent office” as between strangers in Canada.
The exception of Section 102(b)(1)(B) provides relief from that pressure. Effectively, publicly disclosing your invention will shield any application from after-arising prior art. This is equivalent to obtaining a filing date.
Another way to look at the exception is that it provides a presumption that anyone who subsequently publishes an invention is assumed to have acquired knowledge of the invention from the inventor. This would bring such a disclosure within the scope of Section 102(b)(1)(A). This Section 102(b)(1)(A) is the classic Canadian pioneered “one-year inventor originating grace period”.
While this section may be good policy, it may still have a flaw that could be corrected before the House.
What does “publicly disclosed” mean? The main novelty provision of section 102 uses the expression “available to the public” to characterize fatal prior art. This has been interpreted in Europe and Canada as requiring that a prior disclosure must be “enabling” in order to be effective as prior art. If a tractor is driven around town but doesn’t make the invention understandable, then this enablement requirement means that the invention has not been made “available to the public”. Will the same requirement of enablement be imported into the expression “publicly disclosed”?
This uncertainty could be dispelled if, before the House, the bill where amended as follows:
102(b)(1)(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor so as to make the invention available to the public.
On the other hand, the legislators may not wish to commit to such an interpretation. Perhaps they want the Courts to resolve this issue rather than take the responsibility themselves.
To make the amendment proposed would raise the standard required when something is “publicly disclosed” in order for such an event to serve as a shield against after-arising prior art. Perhaps the legislators do not want to be the ones that stipulate for an increase standard.
Under the existing law, once a conception of an invention has occurred and the invention has been reduced to practice, (including reduction to practice under confidential circumstances), the inventor does not have to make a public disclosure that arises to the standard of being “enabling”. He/she can delay filing up to the limit that the invention has not been suppressed or abandoned. A delay of one year is probably not unreasonable if it fits within the statutory one-year grace period.
Under this new provision of section 102(b)(1)(B), the sheltering of the invention will live or die according to whether an invention has been “publicly disclosed” to the standard that the law requires.
To clarify or not to clarify, that is the dilemma that the House must face in reviewing its equivalent to S. 23.
Earlier today, I testified in Congress before the House of Representatives Judiciary Committee’s Subcommittee on Intellectual Property, Competition, and the Internet. [Link] The IP subcommittee will have jurisdiction over any patent reform measures introduced to the House. The other two witnesses were Professor Dan Burk (UC Irvine) and Andrew Pincus (Mayer Brown, representing BSA). The focus of today’s hearing was on the changes that have occurred in patent law since the patent reform process began in 2004. I.e., what is left for Congress to reform? Our written and recorded testimony is available online here: http://judiciary.house.gov/hearings/hear_03102011_2.html.
Questioning was extensive and included questions from subcommittee Chairman Goodlatte (R-VA), Vice-Chairman Watt (D-NC), and Representatives Conyers (D-Mich), Nadler (D-NY), Chu (D-CA), Reed (R-NY), and Adams (R-FL). Representatives Coble (R-NC) and Quayle were also in attendance.
My written Testimony Follows:
Committee on the Judiciary< ?xml:namespace prefix ="" o />
United States House of Representatives
Subcommittee on Intellectual Property, Competition and the Internet
Hearing
“Review of Recent Judicial Decisions on Patent Law”
We are likely nearing a turning point in a decade-long process of patent reform.Although there is still clearly a strong demand for legislative measures, much has changed since the landmark FTC and NAS point-by-point criticisms of the patent law system were released in 2003 and 2004 respectively.[1] Likewise, much has changed in the six years since the Patent Reform Act of 2005 was introduced in the House of Representatives.[2]Perhaps in response to these external pressures, the Federal Courts have taken a more active role in shaping patent policy from the bench and have particularly addressed many of the concerns raised by the various patent reform initiatives.
In most areas of law, court-developed doctrines mature quite slowly.Over the past decade, however, patent law has been a dramatic counter-example.The courts have substantially altered many longstanding patent doctrines in the course of a few short years.[3]Several factors combine to explain this phenomenon.First, unlike most other federal legal questions appealed to regional Circuit Courts of Appeal, virtually all patent law related appeals from across the country are heard by the Court of Appeals for the Federal Circuit (the “Federal Circuit”).The national reach of the Federal Circuit means that a ruling by the court has an automatic nationwide impact in much the same way that decisions by the United States Supreme Court have a nationwide impact.However, unlike the Supreme Court, the Federal Circuit hears hundreds of patent cases each year.Over the past ten years, the funneling of patent appeals to the Federal Circuit has resulted in the court hearing over four thousand patent infringement appeals in addition to its review of patent decisions from the United States Patent and Trademark Office (the “Patent Office”) and the International Trade Commission.[4]The large number of cases provides the court with the opportunity to rapidly shift the law, even when each case presents only an incremental change. In addition to the means to effect change, it is apparent that both the Federal Circuit and the Supreme Court have taken an interest in shaping patent law policy.[5]Finally, unlike many Federal statutes, the Patent Act as codified in Title 35 of the United States Code is a relatively sparse statute that leaves tremendous leeway for interpretation.
Over the past six years, the Supreme Court granted certiorari and issued a number of important patent decisions that:
·Make it easier to invalidate (or reject) a patent on obviousness grounds, KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007) (eliminating technical hurdles for proving an invention obvious and instead applying a “common sense” analysis for assessing patentability);
·Make it more difficult for a patent holding company to obtain injunctive relief to stop ongoing infringement, eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006) (holding that even an adjudged infringer should not be automatically enjoined from continuing to infringe; rather an injunction should only issue after consideration of the traditional four-factor test for equitable injunctive relief);
·Make it easier for a manufacturer to obtain a declaratory judgment of non-infringement, MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007) (holding that declaratory judgment (“DJ”) jurisdiction may exist even if the patent holder could not have sued the DJ plaintiff for infringement; apprehension that patentee will sue for infringement is not a necessary element for Article III jurisdiction);
·Solidify our understanding of the scope of patentable subject matter available for business method patents, Bilski v. Kappos, 130 S. Ct. 3218 (2010) (invalidating Bilski’s claimed invention – a method of hedging against the occurrence of bad weather – as an unpatentable abstract idea);
·Limit the doctrine of export infringement under 35 U.S.C. § 271(f), Microsoft Corp. v. AT&T Corp., 550 U.S. 437 (2007) (holding that Microsoft could not be held liable for exporting software code because the exported source code does not qualify as a “component” under the statute); and
·Provide roadmaps for stronger patent licensing agreements, see Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617 (2008) (patent “exhausted” under first sale doctrine because patentee did not restrict licensee’s sales to third party purchasers) and Ill. Tool Works Inc. v. Indep. Ink, Inc., 547 U.S. 28 (2006) (holding that in antitrust tying cases, courts should not presume that a patent confers market power).
During this time, the Federal Circuit has also actively addressed patent reform issues with decisions that:
·Attempt to implement venue reform in a way that limits unreasonable forum shopping, In re TS Tech United States Corp., 551 F.3d 1315 (Fed. Cir. 2009) (on writ of mandamus, ordering case transferred out of venue that had no meaningful ties to the patent infringement case);[6]
·Rationalize patent damage awards, Uniloc USA, Inc. v. Microsoft Corp., ___ F.3d ___, 2011 U.S. App. LEXIS 11 (Fed. Cir. 2011) (holding that the 25% Rule for calculating patent damages is “fundamentally flawed” and that total product revenue cannot be considered in the reasonable royalty analysis unless the Entire Market Value Rule applies.) and Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009) (requiring a proof that purported “comparable” licenses used for calculating a royalty rate are, in fact, comparable); Wordtech Systems, Inc. v. Integrated Networks Solutions, Inc., 609 F.3d 1308 (Fed. Cir. 2010).
·Limit enhanced damages, In re Seagate, 497 F. 3d 1360 (Fed. Cir. 2007) (limiting the potential for treble damages to cases where the adjudged infringer’s actions were at least “objectively reckless”) (see Chart 1);
·Expand the false marking doctrine, Forest Group Inc. v. Bon Tool Co., 590 F.3d 1295 (Fed. Cir. 2009);
·Limit inequitable conduct pleadings, Exergen Corporation v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009) (requiring that inequitable conduct pleadings include “specific who, what, when, where, and how of [any] material misrepresentation or omission”); and
As we sit here today, the courts also have a number of important cases pending resolution. Among others, these include:
·A challenge to the presumption of validity associated with issued patents, Microsoft Corp. v. I4I Ltd. P’ship, 131 S. Ct. 647 (2010) (certiorari granted on the issue of whether the presumption of validity associated with an issued patent must always be overcome with clear and convincing evidence);
·A challenge to the patentability of genetic material, See Ass’n for Molecular Pathology v. United States PTO, 2010 U.S. Dist. LEXIS 35418 (S.D.N.Y. 2010) (holding BRCA gene patents invalid for being directed to a law of nature);
·A Constitutional challenge to the False Marking provisions of the Patent Act, Unique Prod. Solutions, Ltd. v. Hy-Grade Valve, Inc., 2011 U.S. Dist. LEXIS 18237 (N.D. Ohio 2011) (holding the False Marking statute unconstitutional) and United States ex rel. FLFMC, LLC v. Wham-O, Inc., Fed. Cir. App. No. 2011-1067 (pending appeal challenging Constitutionality of the statute);[8]
·A question regarding the mens rea requirement for inducing infringement under 35 U.S.C. § 271(b), Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 458 (2010) (grant of certiorari);
·A major challenge to the implementation of the judge made law of inequitable conduct, TheraSense, Inc. v. Becton, Dickinson & Co., 374 Fed. Appx. 35 (Fed. Cir. April 26, 2010) (en banc order requesting briefing); and
·A challenge to patent ownership rights under the Bayh-Dole Act, Bd. of Trs. of the Leland Stanford Junior Univ. v. Roche Molecular Sys., 131 S. Ct. 502 (2010) (grant of certiorari).
For better or worse, the courts have substantially shifted the playing field over the past six years. And, the cases currently pending and in the pipeline appear poised to continue this process.Of course, the courts have limited power and cannot make statutory amendments or offer funding to the Patent Office. It is safe to say, however, that the courts have addressed (or are addressing) virtually all of the legitimately raised patent reform issues that fall squarely within their purview. Within this dynamic, an important ongoing role of Congress is at least to ensure that the courts are making the right policy choices.
Patent Office Backlog: A key issue of patent law policy that has not been adequately addressed in the past six years is the growing backlog of patent applications pending at the Patent Office.Although the current Patent Office management team is quite focused on reducing the backlog, their efforts have not been overwhelmingly successful to-date.As seen in Chart 2 (below), the overall backlog of patent applications pending at the USPTO has increased more than 30% since 2005.The forced delay is troubling for patent applicants because the exclusive patent right is only enforceable once the patent issues, and typically only against post-issuance infringement.The multi-year prosecution delay is also troubling for potential competitors and customers because the patent right may eventually spring-forth to re-capture exclusive rights that had been in public use for years.
Even more dramatic, is the twenty seven fold (~2700%) increase in the backlog of cases awaiting decision at the Board of Patent Appeals and Interferences (BPAI). (Chart 3).The long and growing backlog of appeals more than doubles the expected duration of the patent prosecution process for the almost 50% of patent applicants that achieve at least a partial victory on appeal.
These backlogs likely cannot be directly corrected by the courts. Instead, every effort must be made to ensure that the Patent Office is enabled and encouraged to right its own ship.In the short term, the Patent Office will need to hire more examiners; re-work its failing information technology system; and apply effective negotiation theories to the examination process.In the longer term, world patent offices must work-share when examining duplicate patent applications that have been filed in multiple countries.[9]In addition, there are some relatively easy steps that can be taken to help ensure that patent applications are filed in a way that make them easier to examine.This may include (1) requiring applicants to better delineate their invention and its purposes and (2) more rigorously enforcing the requirement that claims be clearly drafted in a way that relates to the invention as disclosed.
Obviousness and the Backlog: The bulk of time spent in the patent examination process and in appeals to the BPAI revolves around the issue of obviousness.[10]In other words, the backlogs can be largely attributed to time spent arguing the difficult issue of obviousness. Unfortunately, nothing in the proposed legislation does anything directly to alleviate this burden.Although the process of examining patents for obviousness may seem to be one best left to the administrative agency, the Patent Office is bound to follow the examination processes laid out by the courts in KSR v. Teleflex[11] and Graham v. John Deere Co.[12]Because so much time and energy is spent on this issue during the examination process, it may be one where increased substantive rulemaking authority would allow the Patent Office to create a more manageable approach to the statutory question.
Foreign Inventor Influence on the US Patent System: Through a number of reciprocal international agreements such as Paris Convention, the US has promised citizens of other countries access to the US patent system.[13]Under these agreements, an innovative Japanese company seeking exclusive rights in the US market could obtain US patent protection and enforce those rights in US courts against US competitors.Despite this offer of rights, the bulk of issued US patent have always been based on US originated inventions.This practical statistic meant that, historically, US patent reform primarily impacted US companies and US inventors.Over the past six years, the statistic changed, and for the first time in history, the majority of US patents are now being issued on foreign-originated inventions. (Chart 4).
For some, this decline in US-centric dominance of the US patent system will serve as a sign that US innovation could use additional encouragement. In addition, however, the decline may signal a need to change our outlook on the role of patent rights in US policy. Certainly, the offer of patent rights encourages innovation and disclosure of new inventions.However, this incentive is felt around the world – encouraging companies in Australia or Germany to innovate in their home countries in order to capture an exclusive slice of the US market.[14]In this framework, patent reform is much more than a domestic policy issue. Rather, it becomes an issue of rooted in international trade and international relations.This is not a new concept, but one that should be kept in mind as the legislation moves forward.
Rise in Patent Reexamination Filings: The US has two primary post-grant opposition processes already in place: (1) inter partes reexamination and (2) third-party requested (or prompted) ex parte reexamination.Prior to 2005, it appeared that many potential defendants and accused infringers were reluctant to use the post-grant opposition processes.That reluctance has largely evaporated – in part because of the USPTO’s successful implementation of a Central Reexamination Unit (CRU) composed of elite and highly trained patent examiners in sufficient quantity to have a high response rate.[15]In addition, patent law professionals have seen that reexamination can be an effective and relatively inexpensive alternative to litigation.At this point, high-dollar patent infringement lawsuits are usually associated with a parallel reexamination of the patents in-suit – so long as the defendant has a credible obviousness argument based on published materials.Table 1, shows the rise in popularity of reexaminations over the past few years.
Percent Change in Number of Reexamination Requests
Inter Partes Reexamination Requests
53
903
1704%
Ex Parte Reexamination Requests
1,719
3,272
190%
A notable limitation of the current reexamination system is that reexaminations are only allowed to consider certain invalidity arguments (obviousness and anticipation) and apply a limited set of prior art (patents and printed publications).Many countries offer broader latitude in their opposition proceedings, although some of those countries completely divide duties between the administrative agency (handling invalidity issues) and the court (handling infringement).[17]The dramatic shift in usage of available post grant options gives me pause to consider whether the proposed reforms in 2005 offered a permanent solution to what was merely a temporary problem.
A more straightforward approach to issues now before the Committee is to identify elements of prior patent reform measures that have not been addressed by the courts. These include:
(1)Easing the USPTO’s ability to set fees for its services and to retain all fees collected;
(2)Moving from a “first-to-invent” system to a “first-to-file” system;
(3)Expanding prior-user rights;
(4)Requiring that all patent applications be published by the USPTO;
(5)Allowing pre-issuance protests (or prior art submissions) by third parties;
(6)Expanding the scope of post-grant reexamination or adding an additional post-grant opposition proceedings;
(7)Eliminating the “best mode” requirement; and
(8)Easing the rules for assignee submission of patent filings without the inventor’s express permission.
Each of these reform measures have their own potential benefits and detriments that vary according to the implementation approach chosen.
Thank you for this opportunity to present my remarks.
Dennis Crouch
March 10, 2011
[1] Federal Trade Commission, To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy, A Report by the Federal Trade Commission, October 2003; Nat’l Res. Council of the Nat’l Acads., A Patent System for the 21st Century (Stephen A. Merrill et al. eds., National Academies Press).
[3] See William C. Rooklidge & Alyson G. Barker, Reform of a Fast-Moving Target: The Development of Patent Law Since fee 2004 National Academies Report, 91 J. Pat. & Trademark Off. Soc’y 153 (2009).
[4] Federal Circuit Statistics, Filings of Patent Infringement Appeals from the U.S. District Courts at http://www.cafc.uscourts.gov.
[5] Polk Wagner & Lee Petherbridge, Is the Federal Circuit Succeeding? An Empirical Assessment of Judicial Performance, 152 U. Pa. L. Rev. 1105 (2004) (“since its inception, the [Federal Circuit]—with some assistance from the Supreme Court—has moved aggressively in support of its widely perceived mandate”); Paul R. Michel, Assuring Consistency and Uniformity of Precedent and Legal Doctrine in the Areas of Subject Matter Jurisdiction Entrusted Exclusively to the U.S. Courts of Appeals for the Federal Circuit: A View from the Top, 58 AM. U. L. REV. 699, 702 (2009); Craig Allen Nard & John F. Duffy, Rethinking Patent Law’s Uniformity Principle, 101 Nw. U. L. Rev. 1619 (2007); Dan L. Burk & Mark A. Lemley, The Patent Crisis and How the Courts Can Solve It (2009)
[6] The TS Tech decision appears to have had a major impact on patent venue jurisprudence. In the two years since the case was decided, its analysis has been followed by almost four dozen different courts.See, for example, Promote Innovation LLC v. Leviton Mfg. Co., 2011 U.S. Dist. LEXIS 16294 (E.D. Tex. Feb. 17, 2011) (granting accused infringer’s motion to transfer venue from the Eastern District of Texas to the Eastern District of New York).
[7] The Tafas decision was vacated pending rehearing en banc and eventually dropped after the USPTO retracted its planned implementation of rules that would limit both the number of claims that an applicant could file per patent application and the number of continuation applications an applicant could file based on a single invention disclosure. See also, Arti K. Rai, Growing Pains in the Administrative State: The Patent Office’s Troubled Quest for Managerial Control, 157 U. PA. L. REV. 2051 (2009).
[10] Dennis Crouch, Understanding the Role of the Board of Patent Appeals: Ex Parte Rejection Rates on Appeal, University of Missouri School of Law Legal Studies Research Paper No. 2009-16 (2009) at http://ssrn.com/abstract=1423922. (90% of BPAI appeals involve a question of obviousness).
[12] 383 U.S. 1 (1966) (setting out the process of the obviousness inquiry as used in both courts and the Patent Office).
[13]Paris Convention for the Protection of Industrial Property, art. 2.
[14] See Commonwealth Sci. & Indus. Research Organisation v. Buffalo Tech., 542 F.3d 1363 (Fed. Cir. 2008) (Australian government entity suing on its US software related patent in the Eastern District of Texas).
[15] Gregory Novak, Concurrent Reexaminations as a Strategic Patent Litigation Defense Tool, 1020 PLI/Pat 797 (2010) (“since the inception of the Central Reexamination Unit (CRU), reexamination proceedings are producing favorable results [for the third-party] in a more timely manner”).
[17] To my knowledge, no one has studied the potential impact of increasing the scope of US reexamination practice or adding a broader layer of post grant opposition.
The Northern District of Ohio has found that the false marking statute (35 USC 292) is unconstitutional. [Link] Judge Polster applied the Morrison sufficient control analysis, and held the false marking statute invalid because the government lacks sufficient control to enable the President to "take Care that the Laws be faithfully executed. This case will surely be appealed to the CAFC and maybe even the Supreme Court. [Link] Already on appeal to the Federal Circuit is FLFMC, LLC v. Wham-O. In that case, Wham-O has argued that the statute is unconstitutional.
Motorola sues TiVo for patent infringement
Motorola contends that TiVo is infringing on patents that they acquired when they bought Imedia Corporation that are related to digital video recorders (DVR's). Motorola claims that the Imdeia Patents were filed in 1995 while; TiVo filed Patents were filed in 1998. The patents that Motorola obtained from Imedia are patent #'s 5,949,948, 6,304,714, and 6,356,708. Motorola asserts that the TiVo patent #'s 6,233,389 and 7,529,465 claim the same technology as their patents. [Link]
Is the patent backlog decreasing?
USPTO Commissioner for Patents Bob Stoll recently reported that the total backlog awaiting first office action by examiners decreased in February to 718,857 from 721,831 in January. Stoll also noted that there is a decline in the first action pendency time to an average of 24.2 months for January 2011 from 24.6 months in December 2010. Currently the USPTO has received over 11,000 more patents as compared to this time last year. [Link]
Sony Playstation 3 consoles seized after patent infringement suit
LG has won a preliminary injunction in Europe against Sony in a patent infringement suit. [Link]The injunction states that no shipments of the Playstation 3 can be shipped into Europe for at least 10 days. Also LG has filed a similar request with the US International Trade Commission, seeking to bar import of the Playstation 3. The complaint to the USITC alleges that Sony infringed at least one or more claims in US patent #'s 7,701,835, 7,577,080, 7,619,961 and 7,756,398 relating to the playback of Blue-ray Discs. [Link]
Patent Jobs:
Halcyon Molecular is seeking an IP strategist for their Silicon Valley location. [Link]
Life Technologies is looking for a Patent Attorney with 4-8 years experience and an EE or physics background. [Link]
McGinn IP Law Group is seeking a Patent Attorney with a BSEE. [Link]
ST-Ericsson is looking for an IP Attorney with more than 7 years experience to work at their Santa Clara location. [Link]
Upcoming Events:
Northwestern Journal of Technology and Intellectual Property will hold its 6th annual Symposium on Friday March 4th from 9am-5pm. The Symposium will discuss "The Economics of Intellectual Property and Technology," the keynote speaker will be Michael Fricklas. [Link] (Free Event, however CLE credit available for $200)
Berkeley Center for Law and Technology will hold an event on March 10th entitled, "Beyond Piracy: Managing Patent Risks in the New China." Presenters include Sharon Barner, Robert Merges, and Robert Barr to name a few. [Link]
The USPTO and USWCC will hold a Women's Entrepreneurship Symposium on March 11th. The event will be held at the USPTO headquarters in Alexandria, Va. The keynote speaker will be U.S. Senator Mary Landrieu will be the keynote speaker. [Link]
The George Washington University Law School will host an Intellectual Property Panel Symposium on March 18th. Guest panelists are Bruce Sewell, Mike Jacobson, John Whealan and Chief Judge Radar will be the keynote speaker. [Link]
The Northern District of Ohio has found that the false marking statute (35 USC 292) is unconstitutional. [Link] Judge Polster applied the Morrison sufficient control analysis, and held the false marking statute invalid because the government lacks sufficient control to enable the President to "take Care that the Laws be faithfully executed. This case will surely be appealed to the CAFC and maybe even the Supreme Court. [Link] Already on appeal to the Federal Circuit is FLFMC, LLC v. Wham-O. In that case, Wham-O has argued that the statute is unconstitutional.
Motorola sues TiVo for patent infringement
Motorola contends that TiVo is infringing on patents that they acquired when they bought Imedia Corporation that are related to digital video recorders (DVR's). Motorola claims that the Imdeia Patents were filed in 1995 while; TiVo filed Patents were filed in 1998. The patents that Motorola obtained from Imedia are patent #'s 5,949,948, 6,304,714, and 6,356,708. Motorola asserts that the TiVo patent #'s 6,233,389 and 7,529,465 claim the same technology as their patents. [Link]
Is the patent backlog decreasing?
USPTO Commissioner for Patents Bob Stoll recently reported that the total backlog awaiting first office action by examiners decreased in February to 718,857 from 721,831 in January. Stoll also noted that there is a decline in the first action pendency time to an average of 24.2 months for January 2011 from 24.6 months in December 2010. Currently the USPTO has received over 11,000 more patents as compared to this time last year. [Link]
Sony Playstation 3 consoles seized after patent infringement suit
LG has won a preliminary injunction in Europe against Sony in a patent infringement suit. [Link]The injunction states that no shipments of the Playstation 3 can be shipped into Europe for at least 10 days. Also LG has filed a similar request with the US International Trade Commission, seeking to bar import of the Playstation 3. The complaint to the USITC alleges that Sony infringed at least one or more claims in US patent #'s 7,701,835, 7,577,080, 7,619,961 and 7,756,398 relating to the playback of Blue-ray Discs. [Link]
Patent Jobs:
Halcyon Molecular is seeking an IP strategist for their Silicon Valley location. [Link]
Life Technologies is looking for a Patent Attorney with 4-8 years experience and an EE or physics background. [Link]
McGinn IP Law Group is seeking a Patent Attorney with a BSEE. [Link]
ST-Ericsson is looking for an IP Attorney with more than 7 years experience to work at their Santa Clara location. [Link]
Upcoming Events:
Northwestern Journal of Technology and Intellectual Property will hold its 6th annual Symposium on Friday March 4th from 9am-5pm. The Symposium will discuss "The Economics of Intellectual Property and Technology," the keynote speaker will be Michael Fricklas. [Link] (Free Event, however CLE credit available for $200)
Berkeley Center for Law and Technology will hold an event on March 10th entitled, "Beyond Piracy: Managing Patent Risks in the New China." Presenters include Sharon Barner, Robert Merges, and Robert Barr to name a few. [Link]
The USPTO and USWCC will hold a Women's Entrepreneurship Symposium on March 11th. The event will be held at the USPTO headquarters in Alexandria, Va. The keynote speaker will be U.S. Senator Mary Landrieu will be the keynote speaker. [Link]
The George Washington University Law School will host an Intellectual Property Panel Symposium on March 18th. Guest panelists are Bruce Sewell, Mike Jacobson, John Whealan and Chief Judge Radar will be the keynote speaker. [Link]
The Northern District of Ohio has found that the false marking statute (35 USC 292) is unconstitutional. [Link] Judge Polster applied the Morrison sufficient control analysis, and held the false marking statute invalid because the government lacks sufficient control to enable the President to "take Care that the Laws be faithfully executed. This case will surely be appealed to the CAFC and maybe even the Supreme Court. [Link] Already on appeal to the Federal Circuit is FLFMC, LLC v. Wham-O. In that case, Wham-O has argued that the statute is unconstitutional.
Motorola sues TiVo for patent infringement
Motorola contends that TiVo is infringing on patents that they acquired when they bought Imedia Corporation that are related to digital video recorders (DVR's). Motorola claims that the Imdeia Patents were filed in 1995 while; TiVo filed Patents were filed in 1998. The patents that Motorola obtained from Imedia are patent #'s 5,949,948, 6,304,714, and 6,356,708. Motorola asserts that the TiVo patent #'s 6,233,389 and 7,529,465 claim the same technology as their patents. [Link]
Is the patent backlog decreasing?
USPTO Commissioner for Patents Bob Stoll recently reported that the total backlog awaiting first office action by examiners decreased in February to 718,857 from 721,831 in January. Stoll also noted that there is a decline in the first action pendency time to an average of 24.2 months for January 2011 from 24.6 months in December 2010. Currently the USPTO has received over 11,000 more patents as compared to this time last year. [Link]
Sony Playstation 3 consoles seized after patent infringement suit
LG has won a preliminary injunction in Europe against Sony in a patent infringement suit. [Link]The injunction states that no shipments of the Playstation 3 can be shipped into Europe for at least 10 days. Also LG has filed a similar request with the US International Trade Commission, seeking to bar import of the Playstation 3. The complaint to the USITC alleges that Sony infringed at least one or more claims in US patent #'s 7,701,835, 7,577,080, 7,619,961 and 7,756,398 relating to the playback of Blue-ray Discs. [Link]
Patent Jobs:
Halcyon Molecular is seeking an IP strategist for their Silicon Valley location. [Link]
Life Technologies is looking for a Patent Attorney with 4-8 years experience and an EE or physics background. [Link]
McGinn IP Law Group is seeking a Patent Attorney with a BSEE. [Link]
ST-Ericsson is looking for an IP Attorney with more than 7 years experience to work at their Santa Clara location. [Link]
Upcoming Events:
Northwestern Journal of Technology and Intellectual Property will hold its 6th annual Symposium on Friday March 4th from 9am-5pm. The Symposium will discuss "The Economics of Intellectual Property and Technology," the keynote speaker will be Michael Fricklas. [Link] (Free Event, however CLE credit available for $200)
Berkeley Center for Law and Technology will hold an event on March 10th entitled, "Beyond Piracy: Managing Patent Risks in the New China." Presenters include Sharon Barner, Robert Merges, and Robert Barr to name a few. [Link]
The USPTO and USWCC will hold a Women's Entrepreneurship Symposium on March 11th. The event will be held at the USPTO headquarters in Alexandria, Va. The keynote speaker will be U.S. Senator Mary Landrieu will be the keynote speaker. [Link]
The George Washington University Law School will host an Intellectual Property Panel Symposium on March 18th. Guest panelists are Bruce Sewell, Mike Jacobson, John Whealan and Chief Judge Radar will be the keynote speaker. [Link]
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.
Appellate specialist Aaron Panner argued the case on behalf of Hyatt. The USPTO's case was argued by Beth Brinkman of the DOJ. In the original panel, the late Ken Bass has argued for Hyatt and Bill Jenks for the Government. Michael L. Martinez represented Hyatt in the civil action.
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).
Green Edge Ent. LLC v. Rubber Mulch Etc. LLC (Fed. Cir. 2010)
You might guess from the names of the parties that the subject matter of the dispute is rubber mulch. Green Edge's patent covers a synthetic rubber mulch that is shaped and colored to imitate a natural mulch. In its patent application, Green Edge indicated that a variety of systems could be used to add color to the rubber, but the application also spelled out one particular "VISICHROME" system by Futura Coatings as being the "most preferred" system. It turns out that Futura Coatings never made or sold system under the name of VISICHROME. Rather, the product Green Edge should have identified was "Product Code 24009." The name VISICHROME apparently came from a sales letter from a Futura Vice President who had referred to a VISICHROME system.
Best Mode: During the infringement litigation, the Eastern District of Missouri court held the patent invalid for failure to disclose the best mode under 35 USC § 112 – finding that VISICHROME did not exist and "that Green Edge had concealed the best mode by disclosing 'a misleading, non-existent name instead of the number' when no similar product was available on the market."
Section 112 of the patent act requires that the patent specification "set forth the best mode contemplated by the inventor of carrying out his invention." Federal Circuit precedent has held that such a "best mode" need only be described if the inventors subjectively possessed a best mode on the filing date of the application. Even then, the question is whether the inventor "concealed" the preferred mode from the public.
The second prong asks whether the inventor has disclosed the best mode and whether the disclosure is adequate to enable one of ordinary skill in the art to practice the best mode of the invention. The second inquiry is objective; it depends upon the scope of the claimed invention and the level of skill in the relevant art.
Although not suggested by the statute, the best mode requirement is generally examined on an element-by-element basis. Here, Green Edge clearly had a preferred approach for coloring the rubber pieces and thus was required to disclose that "best mode."
On appeal, the Federal Circuit reversed – holding that the best mode had not been objectively concealed. The court's reasoning was that a competitor looking for "VISICHROME" might have been able to find it around the time of the invention since at least one Futura Coatings executive had been using that name in sales letters.
The disclosure might have, at the time the application was filed, been specific enough to describe the colorant so as to enable a person of ordinary skill in the art to make the claimed product using Futura's 24009 product. The application for the '514 patent was filed in October 1997, and [the Futura VP's] letter describing Futura's "Visichrome" colorant system was written in July 1997. Thus, despite [the VP's] inability to remember why he used the term "Visichrome" in his letter, it is at least possible, even likely, that in October 1997, at the time of filing, someone contacting Futura to obtain the "Visichrome" colorant system would have received a response similar to Jarboe's letter of that July.
In the end, the court held that summary judgment was inappropriate. On remand, a jury could still find the patent invalid on best mode.
Retractable Technologies v. Becton, Dickinson and Company (BD) (Fed. Cir. 2011) 
False Marking Statute Found Unconstitutional
False Marking Statute Found Unconstitutional
Bilski v. Kappos
Bilski, Kenny Rogers and Supreme Court Rule 46