Tag Archives: Federal Circuit En Banc

Chien: Recent History Suggests that Supreme Court will Rule Bilski’s Claim Unpatentable

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Professor Colleen Chien (Santa Clara) has written an interesting new article on the importance of amicus briefs in patent cases. Her article is titled Patent Amicus Briefs: What the Courts’ Friends Can Teach Us About the Patent System and is available online at SSRN.

Bilski v. Kappos: Professor Chien reminded me that as Solicitor General, Elena Kagan authored both the US government’s merits brief in Bilski case arguing that Bilski’s claim is unpatentable and the US government’s brief opposing cert. The article reports that “in the last 20 years, every single amicus brief authored by the US Government in a Supreme Court patent case except one predicted the case outcome.” Chien writes “If history is any indication, the Supreme Court will almost certainly follow the US Government’s lead and rule that the method is unpatentable and likely adopt some of its reasoning as well.” (Note that Bilski is a bit different because the Government is a party).

The abstract:

Over the last two decades, more than 1500 amici, representing thousands of organizations, companies, and individuals, have signed onto amicus briefs in over a hundred patent cases, many of them representing landmark decisions. This paper turns the spotlight on these “behind-the-scenes” actors in the patent system. It combines theoretical insights with an empirical study of amicus briefs filed in patent cases over the last 20 years in an examination of who is interested in the patent system, the positions they have advocated, and the effectiveness of their advocacy. Amicus filers have been instrumental in shaping the courts’ agenda; the Supreme Court was seven times more likely to grant cert, and the Federal Circuit eight times likely grant a petition for en banc rehearing, if urged to by an amicus. However, while certain briefs have been important, overall the balance of briefs on the merits have not had a measurable impact on the courts’ rulings. One exception has been the briefs of the US Government, which have been exceptionally prescient. Over the 20 years studied, every single amicus brief authored by the US Government in a Supreme Court patent case except one predicted the case outcome. That is to say, in almost all cases, the Court affirmed or rejected the lower court holding when the Government told it to, and in one case, dismissed cert as improvidently granted when the Government recommended doing so. In terms of who files briefs and their agenda, the results are somewhat surprising. Although debates about the patent system are usually cast as a fight between the pharmaceutical and hi-tech industries, patent lawyers comprise a powerful interest group, filing the most briefs of any single group. In addition, among companies, what seems largely to determine how they advocate is their business model – non-practicing entities, for example, nearly always weighed in for the patentee and public companies, often against the patentee. These and other results have implications for those seeking to understand the patent system and those seeking to influence it.

Download the article.

En Banc Federal Circuit: Adjudged Infringers and their “New” Products

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TiVo v. EchoStar (Fed. Cir. 2010)

The Federal Circuit has announced an en banc rehearing of the TiVo appeal focusing on the process of chasing-down defendants to enforce an injunction — especially where the defendant has introduced a new device that is arguably infringing.  The patentee here has asked that the enforcement operate through a contempt proceeding while the accused infringer has demanded a new trial on the merits for the new device.

The questions on appeal include:

a) Following a finding of infringement by an accused device at trial, under what circumstances is it proper for a district court to determine infringement by a newly accused device through contempt proceedings rather than through new infringement proceedings? What burden of proof is required to establish that a contempt proceeding is proper?

b) How does “fair ground of doubt as to the wrongfulness of the defendant’s conduct” compare with the “more than colorable differences” or “substantial open issues of infringement” tests in evaluating the newly accused device against the adjudged infringing device? See Cal. Artificial Stone Paving Co. v. Molitor, 113 U.S. 609, 618 (1885); KSM Fastening Sys., Inc. v. H.A. Jones Co., 776 F.2d 1522, 1532 (Fed. Cir. 1985).

c) Where a contempt proceeding is proper, (1) what burden of proof is on the patentee to show that the newly accused device infringes (see KSM, 776 F.2d at 1524) and (2) what weight should be given to the infringer’s efforts to design around the patent and its 2009-1374 2 reasonable and good faith belief of noninfringement by the new device, for a finding of contempt?

d) Is it proper for a district court to hold an enjoined party in contempt where there is a substantial question as to whether the injunction is ambiguous in scope?

On-point amicus briefs are welcomed.

 

Therasense: Background Documents For Those Preparing Amicus Filings

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The Federal Circuit recently granted Abbott’s request for an en banc rehearing of its Therasense decision. The rehearing will focus on the fundamental elements of inequitable conduct.  Inequitable conduct is a non-statutory (i.e., judge-made) doctrine and the court is entertaining arguments on how it should re-structure the doctrine.

The following documents will be helpful to anyone planning to file an Amici brief in the case:

Court Opinions on Inequtiable Conduct:

Party Briefs Requesting Rehearing:

Amicus Briefs on Rehearing Request:

Arguments to the Original Panel:

Lawrence Pope’s Motion to Intervene:

Download all the documents in a big zip file. [Does not include POPE documents]

 

Divisional of a Divisional: Avoid Terminal Disclaimers

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Boehringer Ingelheim International GMBH v. Barr Laboratories, Inc. (Fed. Cir. 2010) (denial of en banc rehearing)

In January 2010, the Federal Circuit expanded the scope of the safe-harbor created by 35 USC 121 against double patenting allegations. Namely, the court held that a divisional-of-a-divisional still qualifies for the safe harbor so long as the later-filed applications do not violate the Examiner’s original grouping suggestions.

Now, the court has denied generic drugmaker Mylan request for rehearing en banc. Mylan had presented two questions:

1.    Whether a divisional of a divisional patent application is a “result of a restriction requirement imposed on an original application, entitling a patentee to invoke 35 U.S.C. § 121’s safe harbor from invalidity due to double patenting, where the second divisional was filed voluntarily for strategic reasons and was not mandated by the original restriction requirement.”

2.    Whether a divisional application is “consonant” with a restriction requirement, entitling a patentee to invoke the safe harbor of 35 U.S.C. § 121, where the divisional disregards the lines drawn by the examiner in imposing the restriction requirement.

Judges Gajarsa and Dyk dissented from the en banc denial. In the dissent, Judge Gajarsa wrote:

Because the majority’s decision improperly expands the statutory safe-harbor provision of 35 U.S.C. § 121 beyond Congress’s intended scope, I respectfully dissent from the court’s denial of Mylan’s petition for rehearing en banc. While the Supreme Court has not construed § 121, the majority’s expansive opinion is inconsistent with our longstanding precedent, and will work a major change in our jurisprudence.

The purpose of § 121 is to prevent the inequity that resulted from an examiner’s improper restriction requirement (separating out supposedly patentably distinct inventions that were in fact the same or not patentably distinct), whereby a patentee’s compliance with an examiner’s incorrect restriction would result in the original application being used as a reference against the later divisional application and a rejection on double patenting grounds. See Pfizer, Inc. v. Teva Pharms. USA Inc., 518 F.3d 1353, 1361 (Fed. Cir. 2008); Studiengesellschaft Kohle mbH v. N. Petrochem. Co., 784 F.2d 351, 359 (Fed. Cir. 1986) (Newman, J., concurring). Thus, § 121 “effects a form of estoppel” against the PTO, “that shields the applicant from having to prove the correctness of the restriction requirement in order to preserve the validity of the second patent.” Studiengesellschaft, 784 F.2d at 361. In our past decisions, we have limited § 121 in accordance with its language and clear purpose to situations in which the patent applicant has been forced to divide his application by action of the PTO. We have interpreted the statute to include a requirement of consonance, requiring that the later application or applications follow the original examiner’s restriction requirement, and we have interpreted the statute to include a requirement that the later application or application be filed “as a result of” the original PTO restriction.

In addressing § 121, the majority opinion commits two legal errors. First, it significantly undermines this court’s “consonance” precedence by permitting a patentee to ignore the examiner’s demarcation of independent and distinct inventions in subsequent divisional applications. Second, it engages in an impermissible and expansive reading of § 121’s “as a result of” language. Either error in isolation would be worthy of en banc review; coupled together, the errors threaten to significantly broaden § 121’s safe-harbor provision in clear defiance of this court’s “strict test for application of § 121.” Geneva Pharms., Inc. v. GlaxoSmithKline PLC, 349 F.3d 1373, 1382 (Fed. Cir. 2003).

 

Therasense v. Becton Dickinson: Federal Cicuit Grants En Banc Request to Rethink the Law of Inequitable Conduct

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Therasense Inc. (now Abbott) v. Becton, Dickinson and Co. (Fed. Cir. 2010)

The Federal Circuit has granted Abbott’s request for an en banc rehearing on the issue of inequitable conduct.

The rehearing will focus on six questions of law:

  1. Should the materiality-intent-balancing framework for inequitable conduct be modified or replaced?
  2. If so, how? In particular, should the standard be tied directly to fraud or unclean hands? See Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806 (1945); Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944), overruled on other grounds by Standard Oil Co. v. United States, 429 U.S. 17 (1976); Keystone Driller Co. v. Gen. Excavator Co., 290 U.S. 240 (1933). If so, what is the appropriate standard for fraud or unclean hands?
  3. What is the proper standard for materiality? What role should the United States Patent and Trademark Office’s rules play in defining materiality? Should a finding of materiality require that but for the alleged misconduct, one or more claims would not have issued?
  4. Under what circumstances is it proper to infer intent from materiality? See Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988) (en banc).
  5. Should the balancing inquiry (balancing materiality and intent) be abandoned?
  6. Whether the standards for materiality and intent in other federal agency contexts or at common law shed light on the appropriate standards to be applied in the patent context.

Abbott’s en banc brief is due in 45 days from today. The response is due within 30 days of service of Abbot’s brief.  Briefs of amici curiae will be entertained and may be filed without leave of court. Under Fed. R. App. Proc. 29, the amicus curiae brief must be filed within 7–days of the filing of the principle brief of the party being supported. If the amicus curiae does not support either party then the brief must be field within 7–days of the petitioner’s principal brief.

En Banc Order

Comment: The correct answers to these questions depend upon the purposes of the inequitable conduct doctrine. Namely, is the doctrine intended to the behavior of patent prosecutors is is it intended to catch perpetrators. The major empirical issue is that the doctrine pushes patent prosecutors to over-compensate in ways that potentially harm the system and certainly raise the costs of patent protection.

Design Patents: Eliminating the Ornamental/Functional Dichotomy

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PatentlyO042Richardson v. Stanley Works, Inc. (on petition for en banc rehearing at the Federal Circuit, 2010)

In its March 9, 2010 decision, the Federal Circuit held that design patent infringement should focus only on ornamental aspects of the patented design. Richardson’s Design Patent No. D. 507167 covers a multi-function carpentry tool (a FUBAR). On appeal, the Federal Circuit affirmed that Arizona district court properly “factored out” functional elements during the claim construction process and that the ornamental features of the patented design (upper right) were not similar-enough to the ornamental features of the Stanley Works FUBAR (lower right). 

PatentlyO043Now, Richardson has petitioned the Federal Circuit for an en banc rehearing based on the argument that the focus on ornamental features creates a “points-of-ornamentation” test that is contrary to Gorham v. White.  The AIPLA and Apple Computers have both filed briefs in support of the rehearing.

In a comical (but serious) diagram, AIPLA shows the results of “factoring out” functional elements of the Richardson design. The AIPLA concludes that the “panel’s approach (which seeks to separate out ornamental and functional elements) conflicts with the tenet that a design patent protects the overall appearance of the claimed design, and is fraught with logistical problems.”

PatentlyO041

Apple argues that the functionality of an individual portion of the design should have “no direct bearing on design patent infringement or validity.”  Rather, the whole focus of design patents is to cover articles of manufacture that are inherently functional.  There is a functionality limitation for design patents, but the Supreme Court has applied that only to the design as a whole and only when the design is “dictated by function alone.”

Notes:

Edward DuMont Nominated to the Court of Appeals for the Federal Circuit

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The White House has announced the nomination of Edward (Ed) DuMont to the Court of Appeals for the Federal Circuit to replace Chief Judge Paul Michel who will be retiring May 31, 2010. The Senate must confirm the nomination along with the still-pending nomination of Judge O’Malley.

DuMont is a partner at WilmerHale and is an appellate specialist. He previously spent close to ten years at the Department of Justice primarily in the office of the Solicitor General and also worked in corporate transactions at Sullivan & Cromwell.

DuMont clerked for Judge Richard Posner on the Seventh Circuit in Chicago in the mid-1980’s and also spent a year in working as a lawyer at a firm in Thailand. DuMont holds a BA (history) from Yale and a JD from Stanford. He is originally from Northern California, but has worked on the East Coast for the past twenty years.

DuMont has worked on several patent appeals, often alongside former US Solicitor General Seth Waxman. Recent patent appeals including Tivo v. Echostar, Princo v. ITC (pending en banc rehearing), Airgo IP v. ArvinMeritor, Agfa Corp. v. Creo Prods., Purdue v. Endo, US Philips v. ITC.

The Federal Circuit courthouse at 717 Madison Place is less than a half-mile walk from DuMont’s current office on Pennsylvania Avenue. Like President Obama, DuMont is just shy of 50-years-old.

Although filling Chief Judge Michel’s spot, Mr. DuMont would not automatically become the next Chief Judge. Rather, that position will move to Judge Rader who is the next most-senior active judge who has not yet reached the age of 65.

Guest Essay: An Initial Comment on Ariad: Written Description and the Baseline of Patent Protection for After-Arising Technology

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Following on the heels of the Federal Circuit en banc opinion in Ariad Pharmaceuticals, Inc. v. Eli Lilly & Co., Professor Kevin Collins asks "What next?"  

Before Ariad, the uncertainty channeled much of the scholarly conversation about the written description doctrine into a binary debate, pitting those who it applied to original claims versus those who believed that it did not. After Ariad, the stage is now set for greater participation in more nuanced conversations about the role that the written description requirement does and should play in curtailing patent protection. Ariad may end one facet of the debate over written description, but it would be a lost opportunity if Ariad were interpreted to end the debate over written description more broadly and cut off these more nuanced conversations.

In this short essay, Professor Collins suggests that patent law scholarship should adopt a "trans-doctrinal approach" directed to the broader purposes and limitations of patent law rather than being confined to doctrinal silos.  The essay indicates that this holistic approach may also be helpful in explaining a perception that patent law varies greatly according to the area of technology. [Download Collins.Ariad]

Read: Kevin Collins, An Initial Comment on Ariad: Written Description and the Baseline of Patent Protection for After-Arising Technology, 2010 Patently-O Patent L.J. 24.

An Initial Comment on Ariad: Written Description and the Baseline of Patent Protection for After-Arising Technology

Journal,

Following on the heels of the Federal Circuit en banc opinion in Ariad Pharmaceuticals, Inc. v. Eli Lilly & Co., Professor Kevin Collins asks "What next?"

The nine-judge majority reaffirms that the written description requirement applies to original claims and that its scope and purpose are to be determined by examining the relevant Federal Circuit precedent. Indeed, but for the fact that it removes the uncertainty caused by the vociferous dissents in earlier written description opinions, the en banc opinion in Ariad could readily be framed as a non-event in the evolution of the written description requirement. However, the importance of removing the uncertainty about the existence of a written description requirement as applied to original claims should not be lightly dismissed. Before Ariad, the uncertainty channeled much of the scholarly conversation about the written description doctrine into a binary debate, pitting those who it applied to original claims versus those who believed that it did not. After Ariad, the stage is now set for greater participation in more nuanced conversations about the role that the written description requirement does and should play in curtailing patent protection. Ariad may end one facet of the debate over written description, but it would be a lost opportunity if Ariad were interpreted to end the debate over written description more broadly and cut off these more nuanced conversations.

In this short (but nuanced) essay, Professor Collins suggests that the next steps in patent law scholarship should adopt a "trans-doctrinal approach" that reaches the broader purposes and limitations of the law rather than being confined to doctrinal silos.  The essay suggests that this holistic approach may also be helpful in explaining a perception that patent law varies greatly according to the area of technology. [Download Collins.Ariad]

Cite as Kevin Collins, An Initial Comment on Ariad: Written Description and the Baseline of Patent Protection for After-Arising Technology, 2010 Patently-O Patent L.J. 24.

Justifying the Decision in Ariad v. Lilly

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In Ariad v. Lilly, defenders of the written description requirement made two primary arguments: (1) that the text of the Patent Act and the accompanying jurisprudential history lead to the conclusion that the statute creates a separate written description requirement; and (2) that the written description requirement serves an important role in policing applicant behavior. An en banc Federal Circuit confirmed that the written description requirement is separate and distinct from enablement, but firmly based its decision on the first argument rather than the second. I believe that the Federal Circuit took the correct approach – especially in its substantial rejection of the second argument. In my recent essay, I wrote that – apart from its value in "new matter" rejections – the role of the written description requirement in ex parte prosecution is negligible. See An Empirical Study of the Role of the Written Description Requirement in Patent Prosecution, 104 NORTHWESTERN UNIV. L.R. Colloquy ___ (2010) (ssrn download). In that essay, I took no position on the larger issue of whether the written description doctrine is nevertheless required by the statute.

In his concurring opinion, Judge Gajarsa explicitly rejects the argument that the written description requirement is a necessary on policy grounds – writing that "[t]he empirical evidence confirms my belief that written description serves little practical purpose as an independent invalidity device [apart from policing priority]." Despite the lack of a policy justification, Judge Gajarsa concurred with the judgment "because the majority's opinion provides a reasonable interpretation of a less than clear statute."

Guest Post: Ariad v. Lily: Choosing to Not Disrupt the Settled Expectations of the Patent Community

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I asked Howard Skaist for his views on the recent decision in Ariad v. Eli Lilly. He wrote the following:

* * * * *

By Howard Skaist of Berkeley Law, LLC.

In an en banc case closely watched by the patent bar, the Federal Circuit made little change to the law regarding written description and provided little additional guidance, despite a majority opinion nearly 40 pages long, two concurrences, two dissents and having received 25 amicus briefs. At a high level, the case can probably be best understood as having been resolved on policy grounds in the face of an unclear statute and Supreme Court precedent that does not directly address the question at hand; however, policy is only a portion of the justification that the majority of the full court uses for the outcome. 

The fundamental question is whether or not a separate and independent written description requirement exists under 35 USC section 112, first paragraph.  The majority answers the question in the affirmative, relying on the language of the statute, Supreme Court precedent and policy considerations.  However, the concurrence and dissenting opinions demonstrate that this language of the statute is far from clear and that the Supreme Court precedent does not really address the question directly.  Therefore, the main division among the judges appears to rest on policy considerations.  In addition to the policy considerations regarding the advisability of a written description requirement, the majority apparently does not want to “disrupt the settled expectations of the inventing community….”  Majority Opinion at 16. 

The facts of this case suggest that it may have been a good one to test policy rationales since it was brought by a variety of academic and research institutions, including MIT and Harvard, against Eli Lilly.  The inventors had made a fundamental research discovery in biotechnology and hypothesized several possible ways to take advantage of it, but it took those working in the field several more years to successfully develop a product exploiting the discovery.  Therefore, at the core of this case, a legitimate question exists regarding the role or purpose of a patent system and how research or academic institutions should fare under existing legal standards.  Also telling is the citation by Gajarsa in his concurrence of work by Dennis Crouch and Chris Holman showing that few cases have invalidated claims based on written description.  Linn, in his dissent, also cites to Crouch’s work. 

Ariad and a variety of institutions sued Eli Lilly on US Patent 6,410,516 the day the patent issued.  The inventors were the first to identify NF-xB and uncover the mechanism by which it activates gene expression underlying the body’s immune response to infection.  Thus, the inventors recognized and suggested that artificially interfering with NF-xB activity could reduce harmful symptoms of certain diseases.  At the District Court level, a jury determined that Lily infringed the four claims asserted and determined the patent to not be invalid for anticipation, lack of enablement or lack of written description.  However, on appeal, the Federal Circuit reversed and held the patent invalid under 35 USC 112, first paragraph, for failing to provide an adequate written description.  Ariad petitioned for en banc review and the Federal Circuit granted the petition. 

In the en banc opinion, the majority does a good job clarifying the heart of the dispute by stating: “[A]lthough the parties take diametrically opposed positions on the existence of a written description requirement separate from enablement, both agree that the specification must contain a written description of the invention to establish what the invention is.  The dispute, therefore, centers on the standard to be applied and whether it applies to original claim language.”  The point of departure therefore appears to center more upon whether or not original claims can be held invalid for lack of written description or not.  The conventional view had been that a claim supports itself.  However, Federal Circuit decisions in the last few years have challenged that thinking, such as Fiers v. Revel, Enzo v. Gen-Probe and LizardTech v. Earth Res. Mapping.  Here, the Federal Circuit establishes that those decisions were correct. 

As alluded to above, the majority does not agree with Ariad’s arguments about the wording of the statute or its characterization of the relevant Supreme Court precedent.  However, Gajarsa, while concurring, states: “[T]he text of section 112, paragraph 1 is a model of legislative ambiguity.”  Likewise, even the majority, in discussing the Supreme Court precedent concedes: “Although the Court did not expressly state that it was applying a description of the invention requirement separate from enablement, that is exactly what the Court did.” Majority Opinion at 14. Therefore, Ariad’s points may have more substance than the majority concedes. Nonetheless, the Federal Circuit states that “[a]s a subsidiary federal court,” majority opinion at 15, it is obligated to follow such precedent.  The Federal Circuit, however, does directly address Ariad’s contention that original claims should be treated differently than amended claims saying that the distinction does not exist in the language of section 112 and that Ariad has not provided a principled basis for making the distinction being asserted.  Majority Opinion at 19. 

The court challenges directly the thinking that an original claim necessarily supports itself under written description: 

“Although many original claims will satisfy the written description requirement, certain claims may not. For example, a generic claim may define the boundaries of a vast genus of chemical compounds, and yet the question may still remain whether the specification, including original claim language, demonstrates that the applicant has invented species sufficient to support a claim to a genus. The problem is especially acute with genus claims that use functional language to define the boundaries of a claimed genus. In such a case, the functional claim may simply claim a desired result, and may do so without describing species that achieve that result. But the specification must demonstrate that the applicant has made a generic invention that achieves the claimed result and do so by showing that the applicant has invented species sufficient to support a claim to the functionally-defined genus.”  Majority Opinion at 20. 

The majority does provide a few clarifying points regarding application of written description: 

“[The] hallmark of written description is disclosure. Thus, ‘possession as shown in the disclosure’ is a more complete formulation. Yet whatever the specific articulation, the test requires an objective inquiry into the four corners of the specification from the perspective of a person of ordinary skill in the art.”  Majority Opinion at 24 

The court also acknowledges the disadvantage that this law creates for basic research institutions: 

“[T]he patent law has always been directed to the ‘useful Arts,’ U.S. Const. art. I, § 8, cl. 8, meaning inventions with a practical use, see Brenner v. Manson, 383 U.S. 519, 532-36 (1966). Much university research relates to basic research, including research into scientific principles and mechanisms of action, see, e.g., Rochester, 358 F.3d 916, and universities may not have the resources or inclination to work out the practical implications of all such research, i.e., finding and identifying compounds able to affect the mechanism discovered. That is no failure of the law’s interpretation, but its intention.” 

Conceding that enablement and written description are similar, the court nonetheless maintains that in some fields they can be quite different, particularly in chemistry and biotech: 

“Perhaps there is little difference in some fields between describing an invention and enabling one to make and use it, but that is not always true of certain inventions, including chemical and chemical-like inventions. Thus, although written description and enablement often rise and fall together, requiring a written description of the invention plays a vital role in curtailing claims that do not require undue experimentation to make and use, and thus satisfy enablement, but that have not been invented, and thus cannot be described.”

Fleshing-Out Design Patent Infringement Doctrine

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Crocs, Inc. v. US International Trade Commission (ITC) (Fed. Cir. 2010) (“In the matter of CERTAIN FOAM FOOTWARE”)

In 2006, the ITC began an investigation to determine whether knock-off imports of the iconic Crocs foam shoes infringed either the Crocs utility patent (Patent No. 6,993,858) or the Crocs design patent (Patent No. D. 517789). After a full investigation, the ITC found no patent violation – holding instead that the utility patent was obvious and that the design patent was not infringed. The ITC also held that Crocs had not established a “domestic industry” relating to the patented product and thus, that the Commission did not have standing. On appeal, the Federal Circuit reversed.

Design Patent Claim Construction:

As is ordinary, the Crocs design patent claims “the ornamental design for ___, as shown and described.” Here, the blank (___) was filled by the word “footwear.” Following utility patent claim-construction precedent the ITC had described the drawings and used that description to limit the claim scope. On appeal, the Federal Circuit rejected that approach and instead holding that in the usual case, a design patent’s drawings typically needs very little textual description. The court also held that design patent claim construction should be less textually detailed because design patent infringement (and validity) are judged by looking at the design as a whole. An element-by-element description unduly draws attention to the details and “away from consideration of the design as a whole.”

This case shows the dangers of reliance on a detailed verbal claim construction. The claim construction focused on particular features of the ‘789 patent design and led the administrative judge and the Commission away from consideration of the design as a whole. This error is apparent in the Commission’s explicit reference to two details required by the written claim construction but not by the ‘789 drawings: (1) a strap of uniform width, and (2) holes evenly spaced around the sidewall of the upper. As shown in Figure 1 of the ‘789 patent, the strap bulges to a greater width at the middle of the strap on the far left of the figure. Thus, the design figure does not require a strap of uniform width between the two round connectors. Also, as shown in Figure 4 of the ‘789 patent, the holes are not evenly spaced. Figure 4 shows a gap in the spacing (particularly towards the big toe). Nonetheless, the written claim description required uniform strap width and uniform hole spacing—contrary to the claimed invention. This error distorts the infringement analysis by the ordinary observer viewing the design as a whole. The administrative judge and the Commission needed to apply the ordinary observer test to “the design shown in Figures 1–7.”

Under the now defunct “point of novelty” tests for both infringement and validity, courts had some justification for describing specific elements of the patented design because those elements would potentially be considered as points of novelty. Although not spelled-out by the court, the recent elimination of the “points of novelty” tests also eliminates that justification.

Design Patent Infringement:

The Federal Circuit outlined the “ordinary observer” test of design patent infringement in its en banc Egyptian Goddess decision. Here, the court fleshed-out that test with further details and nuances. Infringement of a design patent requires proof that an “ordinary observer, familiar with the prior art designs, would be deceived into believing that the accused product is the same as the patented design.” The hypothetical ordinary observer is considered to have knowledge of the prior art. Thus, “if the claimed design is close to the prior art designs, small differences between the accused design and the claimed design assume more importance to the eye of the hypothetical ordinary observer.” “The ordinary observer test applies to the patented design in its entirety, as it is claimed. [Therefore, minor differences between a patented design and an accused article’s design cannot, and [do] not, prevent a finding of infringement.” (quoting Payless Shoesource and Litton Sys.).

The court again emphasized that the test considers the design as a whole and that the court should not use drawing details to create an infringement checklist because “concentration on small differences in isolation distract[s] from the overall impression of the claimed ornamental features.” Rather, a better tool for determining infringement is a side-by-side comparison of the patented design and the accused product.

On the facts of this case, the Federal Circuit found that the allegedly infringing shoes were “nearly identical” to the patented design. “If the claimed design and the accused designs were arrayed in matching colors and mixed up randomly, this court is not confident that an ordinary observer could properly restore them to their original order without very careful and prolonged effort. . . . [T]his court perceives that the accused products embody the overall effect of the ’789 design in sufficient detail and clarity to cause market confusion. Thus, the accused products infringe the ’789 design.”

Domestic Industry:

In a decision of some interest for design patent utility patent holders alike, the Federal Circuit suggested what seems a tight definition of the domestic industry requirement of an ITC Section 337 action. The court wrote:

The test for the technical prong of the industry requirement “is essentially the same as that for infringement, i.e., a comparison of domestic products to the asserted claims.” Alloc, Inc. v. Int’l Trade Comm’n, 342 F.3d 1361, 1375 (Fed. Cir. 2003). In other words, the technical prong requires proof that the patent claims cover the articles of manufacture that establish the domestic industry. Put simply, the complainant must practice its own patent.
Although it so stated, I don’t believe that the court actually intended to require that a “complainant must practice its own patent” in order to satisfy the technical prong of 19 U.S.C. 1337(a). Rather, the statute requires that “an industry in the United States, relating to the articles patent . . . exists or is in the process of being established.” The “technical prong” of 337(a)(3)(A)-(B) require significant domestic investment or employment, but neither of those sections require that the complainant be the party that invests.  In the cited Alloc decision, the court stated instead that the question is whether the “industry produces articles covered by the asserted claims.” Here, the dicta is irrelevant because Crocs does manufacture shoes covered by the patent.

Federal Circuit Confirms that Patents Must Meet Both the Written Description and Enablement Requirements of Section 112.

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Ariad Pharmaceuticals, Inc. v. Eli Lilly and Co. (Fed. Cir. 2010) (En Banc Decision).

In a 9-2 decision, an en banc Federal Circuit has confirmed that 35 USC § 112 ¶1 includes separate written description and enablement requirements. “If Congress had intended enablement to be the sole description requirement of § 112, first paragraph, the statute would have been written differently.” The court also clearly confirmed the prospect that originally filed claims can violate the written description requirement:

Although many original claims will satisfy the written description requirement, certain claims may not. For example, a generic claim may define the boundaries of a vast genus of chemical compounds, and yet the question may still remain whether the specification, including original claim language, demonstrates that the applicant has invented species sufficient to support a claim to a genus. The problem is especially acute with genus claims that use functional language to define the boundaries of a claimed genus. In such a case, the functional claim may simply claim a desired result, and may do so without describing species that achieve that result. But the specification must demonstrate that the applicant has made a generic invention that achieves the claimed result and do so by showing that the applicant has invented species sufficient to support a claim to the functionally-defined genus.

Possession vs Disclosure: The court did step away from “possession” as the hallmark of the written description requirement. Rather, the court wrote that “the hallmark of written description is disclosure. . . . [T]he test requires an objective inquiry into the four corners of the specification from the perspective of a person of ordinary skill in the art. Based on that inquiry, the specification must describe an invention understandable to that skilled artisan and show that the inventor actually invented the invention claimed.”

General Principles: The court presented “a few broad principles that hold true across all cases”: “the written description requirement does not demand either examples or an actual reduction to practice”; however “actual ‘possession’ or reduction to practice outside of the specification is not enough; and a “description that merely renders the invention obvious does not satisfy the requirement.”

Basic Research – Tough Luck: The court recognized that the written description requirement makes it more difficult to patent “basic research” that has not yet been fully reduced to a practical implementation. The court’s reaction to that problem was tough luck. “That is no failure of the law’s interpretation, but its intention. Patents are not awarded for academic theories, no matter how groundbreaking or necessary to the later patentable inventions of others.”

That research hypotheses do not qualify for patent protection possibly results in some loss of incentive, although Ariad presents no evidence of any discernable impact on the pace of innovation or the number of patents obtained by universities. But claims to research plans also impose costs on downstream research, discouraging later invention. The goal is to get the right balance, and the written description doctrine does so by giving the incentive to actual invention and not “attempt[s] to preempt the future before it has arrived.” Fiers, 984 F.2d at 1171.

Holding: For the foregoing reasons, we hold that the asserted claims of the ‘516 patent are invalid for lack of written description, and we do not address the other validity issues that were before the panel. We also reinstate Part II of the panel decision reported at 560 F.3d 1366 (Fed. Cir. 2009), affirming the district court’s finding of no inequitable conduct. The majority opinion was written by Judge LOURIE and joined by Chief Judge MICHEL and Circuit Judges NEWMAN, MAYER, BRYSON, GAJARSA, DYK, PROST, and MOORE. Judges NEWMAN and GAJARSA filed concurring opinions.

Judges RADER and LINN each filed opinions in dissent. [I will write more on this later]

Therasense v. BD: En Banc Support from Law Professors

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Guest post by Christian Mammen. Mammen is a Resident Scholar at UC Hastings. He also maintains an IP litigation and strategy practice. (He was also my boss when I was a summer associate at the Heller Ehrman law firm.)

* * * * *

On March 8, 2010, I submitted an amicus brief (click here for a copy) on behalf of a group of nine law professors (Professors Cotter, Dolak, Gallagher, Ghosh, Hricik, Risch, Sarnoff, Takenaka and myself) in support of en banc review of inequitable conduct in Therasense, Inc. et al. v. Becton, Dickinson & Co. et al. The panel decision in Therasense affirmed the District Court’s finding of inequitable conduct. The inequitable conduct finding related to a failure to disclose to the USPTO statements that had been made to the European Patent Office. The majority decision drew a lengthy dissent from Judge Linn.

The law professors’ amicus brief argues that en banc review is appropriate because of the ongoing inconsistency in Federal Circuit precedents concerning inequitable conduct. In particular, the brief focuses on two specific issues: (1) the legal standard for intent and (2) the proper test of materiality.

Legal Standard for Intent: First, the applicable legal standard for the intent element continues to be uncertain. Although some expected that the 2008 Star Scientific decision (Star Scientific , Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357 (Fed. Cir. 2008)) would prompt a widespread adoption of its single-most-reasonable-inference test for proving intent via circumstantial evidence, that has not been the case. In Therasense, the majority deferred to the District Court’s five findings on the intent issue, without addressing their legal sufficiency. Two of the five findings pertained solely to the materiality of the nondisclosed information; however, Star Scientific holds that “materiality does not presume intent.” One finding of the five was merely that the individuals knew the information and did not disclose it; again, this is not the standard for intent under Star Scientific. And the last two findings were that the individuals’ testimony should be rejected as not credible; these findings failed to address the single-most-reasonable-inference test set forth in Star Scientific.

In addition, the majority decision (and the underlying District Court opinion) implicate the “should have known” test for intent that has often appeared in the Federal Circuit’s precedents. The law professors’ amicus brief argued that there should be an en banc rehearing because there is a conflict between the Kingsdown-Star Scientific line of cases, on the one hand, which disfavor the “gross negligence” test—and by implication the associated “should have known” test—and the Brasseler-Ferring line of cases, on the other hand, which endorse the “should have known” test.

Objective Materiality: Second, since the 2006 Digital Control ruling (Digital Control v. Charles Mach. Works, 437 F.3d 1309 (Fed. Cir. 2006)), it had appeared that the Federal Circuit would steadfastly apply the older “reasonable examiner” test for materiality, rather than the newer and more objective test adopted by the PTO in the 1992 revision to 37 CFR 1.56 (“Rule 56”). However, in Therasense, the majority applied the 1992 version of Rule 56 as the test for materiality. This arguably creates a split in precedent that provides a basis for en banc reconsideration of the proper test for materiality.

Will this be the case in which the Federal Circuit takes inequitable conduct en banc? It is difficult to predict. Over the past five years, the Federal Circuit has declined en banc petitions in a number of prominent and controversial inequitable conduct cases. It can, however, be confidently asserted that, in the twenty-two years since the Federal Circuit convened en banc in Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988), the Federal Circuit has accumulated an impressive tally of inconsistent and contradictory panel decisions that cry out for en banc review.

Vacating an Invalidity Rulings as a Condition of a Negotiated Settlement

Patent,

Block Financial v. LendingTree (W.D. Mo. 2010)
[File Attachment: Block.v.LendingTree.Invalidity.pdf (25 KB)]
[File Attachment: DismissalReq.pdf (16 KB)]

[Updated March 17, 2010] In 2001, Block Financial sued LendingTree for infringement of its US Patent No. 6,014,645 entitled "REAL-TIME FINANCIAL CARD APPLICATION SYSTEM." Later, Block added assertions of infringement of its US Patent No. 7,310,617 (a continuation application). The case was stayed for several years pending outcome of a reexamination that changed or eliminated about half of the '645 patent's 35 claims.

In a September 2009 order, the district court (W.D. Mo. Judge Smith) issued a partial summary judgment order invalidating many of Block's claims in its '617 patent based on a violation of the "new matter" prohibition of the written description requirement – holding that Block's "February 2002 amendment added new matter to the pending application, which is prohibited by section 132. As those claims are not supported by the original application, they must be declared invalid."

In February 2010, the parties entered into a confidential settlement agreement after the court agreed to vacate its invalidity findings. The parties explained that such an action would serve the public interest:

The court vacating its order would serve the public interest since it facilitates a resolution of the litigation between the parties and the dispute regarding this particular issue. See U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership, 513 U.S. 18, 26 (1994) (holding that vacatur is appropriate when it would serve the public interest). The parties respectfully submit that the vacatur of the court's partial summary judgment order is in the public interest and ask that the court vacate its order in order to allow the parties to settle the current case.

In response to the joint motion vacate, the court issued following order:

The Court is informed that the parties have reached settlement of this case. The settlement contemplates that the Court vacate its Order of September 10, 2009 (Doc # 188). In accordance with the parties' agreement and their joint motion (Doc. # 247), the Court's Order of September 10, 2009 is hereby vacated.

Of course, the US Supreme Court might well contend that the public interest is not being served by this vacatur. In Lear, Inc. v. Adkins, 395 U.S. 653 (1969), the court refused to enforce a contract that barred patent validity challenges – noting a "strong federal policy" in challenging invalid patents and therefore "permitting full and free competition in the use of ideas which are in reality a part of the public domain." A major purpose of this settlement is to remove the black-spot of invalidity from the '617 patent so that it can be asserted against other parties at other times. And, as many have noted, the expense of invalidating a clearly invalid patent is often sufficient to lead to settlement. Of course, once a defendant is relieved of potential liability, it may be quite happy for the patent to remain in effect as a roadblock to other competitors.

See also, Gear Inc. v. L.A. Gear California Inc., 13 USPQ2d 1655 (S.D.N.Y. 1989) (using settlement agreement to vacate judgment of that the term "gear" was generic when used on clothing); Judkins v. HT Window Fashion Corp, 529 F.3d 1334 (Fed. Cir. 2008) (discussing the lower court's decision to vacated ruling of abandonment under 102(g) based on settlement agreement); In re Tamoxifen Citrate Antitrust Litigation, 429 F.3d 370 (2nd Cir. 2005); Aqua Marine Supply v. AIM Machining, Inc., 247 F.3d 1216 (Fed. Cir. 2001).

Patently-O Bits and Bytes: Federal Circuit Judicial Nominees

Patent
  • President Obama recently announced KATHLEEN O’MALLEY as his nominee for the open position on the Court of Appeals for the Federal Circuit (CAFC).
  • Next Opening: Chief Judge PAUL R. MICHEL has announced that he is retiring May 31, 2010.
  • Judges PAULINE NEWMAN, ALAN D. LOURIE, ARTHUR J. GAJARSA, TIMOTHY B. DYK, and HALDANE ROBERT MAYER are all currently eligible to take “senior status.” Judge WILLIAM C. BRYSON will be eligible on his 65th birthday (August 19, 2010). Judges RICHARD LINN and RANDALL R. RADER will become eligible in 2012 and 2014 respectively. Of course, a judge can retire at any point. The Senior Status benefit is that the judge continues to receive a full salary but a reduced workload. However, Judges on senior status do not participate in en banc rehearings (unless the senior-judge sat on the original panel) and are never considered the presiding judge of a panel.
  • [Update] Senior Judges do receive a copy of decisions before they issue, but does not have authority to request an en banc poll.

Princo v. ITC and the FTC’s Radical Analytical Framework

Patent,

Princo v. ITC (Fed. Cir. 2010) (En banc)

On Wednesday, March 3, the Federal Circuit will sit en banc to hear the oral argument in Princo v. ITC.  Two questions are presented in the appeal: < ?xml:namespace prefix ="" o />

1.       Whether a supposed agreement, between developers of new technology and a new product standard, to license one of the resulting patents only for use under that standard, thus foreclosing the possibility that it might be used to create a competing standard, could be held anticompetitive without (i) defining a relevant market in which the standards compete and (ii) proving that the agreement injured or was likely to injure competition in that market.

2.       Whether such an agreement, even if deemed anticompetitive, would be a proper basis for invoking the doctrine of patent misuse to refuse enforcement of different patents used to practice the joint standard.

More information on the case can be found in David Ryan short article published today titled Princo v. ITC and the FTC’s Radical Analytical Framework. [File Attachment: Princo.DavidFRyan.pdf (208 KB)]. 

This article is intended to assist those who wish to audit Wednesday’s oral argument . . . by providing an overview of the issues for determination before the en banc Court and a discussion of how the FTC’s arguments might affect determination of those issues.  Those issues and arguments are outlined in Section B, and the technical and procedural background facts are then set forth briefly in Sections C and D, respectively.  Section E then discusses in summary fashion the pertinent research market in which the RJV operated, the two pertinent product markets and the two vertical licensing markets within which the effects of the challenged patent rights clearance agreements must be assessed.

Ariad v. Eli Lilly: Written Description Requirement

Patent,

My recent study of BPAI written description requirement jurisprudence was prompted by reading the US Government Brief in the en banc case of Ariad v. Eli Lilly. In the brief, the government indicated its continued support for a separate written description requirement as a tool that the agency uses to eliminate claims during patent prosecution. In sometimes bold font, the government makes its position clear: that a separate written description requirement is "essential to the operation of the patent system;" serves an "indispensable role in the administration of the patent system;" is "fundamental to the operation of the patent system;" and is "necessary for USPTO to perform its examination function." According to the brief, these conclusions are grounded in the USPTO's "practical experience" in "appl[ying] the requirements of Section 112, ¶1 to more than 400,000 patent applications each year."

During oral arguments, the government attorney was pressed for specific evidence supporting its contention that the separate written description requirement serves a practical purpose. As in its brief, the government did not point to any evidence supporting the conclusory statements. The following colloquy at oral arguments between Chief Judge Michel and Mr. Freeman emphasize this point:

Chief Judge Michel: Why does the patent office care? How many applications that can’t be rejected on other statutory grounds will fail only if we [retain the current written description requirement]? . . . I’m asking about impact. . . .

Mr. Freeman on Behalf of the Government: I don’t know an absolute number, your honor, but I think that number must be high. . . .

Chief Judge Michel: I can’t remember ever seeing a patent office rejection that was based only on the failure of written description. I’m not saying there aren’t any, but the flow of cases that come through this court at three or four hundred a year, it is exceedingly rare that the patent office hangs its case on written description. I can’t remember a single case.

Mr. Freeman: Your honor, I don’t have a single case in mind . . . .

Chief Judge Michel: . . . It seems like the practical impact is miniscule, negligible.

Mr. Freeman: Your honor, with all respect, one cannot assume away four-hundred-thousand applications where the written description doctrine comes into play in a great many of them.

My study is essentially directed to the particular questions asked by Chief Judge Michel — How often does the separate written description requirement actually make a difference in patent prosecution? As the data reveals, Chief Judge Michel’s notional recollections from the bench are much more accurate than are the government contentions. I.e., "the practical impact is miniscule, negligible."

[Download the Study]

These results fit well with those of UMKC professor Christopher Holman that he reported in his 2007 article, Is Lilly Written Description a Paper Tiger?: A Comprehensive Assessment of the Impact of Eli Lilly and its Progeny in the Courts and PTO, 17 ALB. L.J. SCI. & TECH. 1, 62 (2007).

An Empirical Study of the Role of The Written Description Requirement in Patent Prosecution

Academic Studies, Articles and Publications, En Banc, Enablement, Patent, ,

Table 3[Download the Draft Essay]

Essay Overview: In the pending case of Ariad v. Eli Lilly, an en banc Federal Circuit is considering whether Section 112 of the Patent Act as properly interpreted includes a written description requirement that is separate and distinct from the enablement requirement. Although the USPTO has no direct role in the infringement dispute, the government submitted an amicus curiae brief arguing that a separate written description requirement is “necessary to permit the USPTO to perform its basic examination function.” However, when pressed during oral arguments the government could not point to any direct evidence supporting its contention.

This essay presents the results of a retrospective empirical study of the role of the written description requirement in patent office practice. It is narrowly focused on rebutting the USPTO’s claim that the separate written description requirement serves an important role in the patent examination process. To the contrary, my results support the conclusion suggested by Chief Judge Michel during oral arguments that it is indeed “exceedingly rare that the patent office hangs its case on written description.”

For the study, I analyzed 2858 Board of Patent Appeals and Interference (BPAI) patent opinions decided January-June 2009. Written description issues were decided in 123 (4.3%) of the decisions in my sample. Perhaps surprisingly, I found that none of the outcomes of those decisions would have been impacted by a legal change that entirely eliminated the written description requirement of Section 112 so long as the USPTO would still be allowed to reject claims based on the addition of “new matter” (perhaps under 35 U.S.C. Section 132). New-matter style written description requirement rejections were outcome-determinative in 20 of the 2858 cases – about 1.0% of the cases in my sample. (I am very confident that the PTO will retain its ability to make new matter rejections even if the separate written description requirement is eliminated.)

Although there may be valid reasons for retaining a separate written description requirement, this study safely leads to the conclusion that the government’s conclusory statements regarding the doctrine’s critical importance for patent examination lack a factual basis.

Continue reading the essay. [PDF]

These results fit well with those of UMKC professor Christopher Holman that he reported in his 2007 article, Is Lilly Written Description a Paper Tiger?: A Comprehensive Assessment of the Impact of Eli Lilly and its Progeny in the Courts and PTO , 17 ALB. L.J. SCI. & TECH. 1, 62 (2007).

The Timeliness of the En Banc Rehearing of Hyatt v. Kappos

Patent,

The pending en banc case of Hyatt v. Kappos is more important now than ever before because the Board of Patent Appeals and Interferences (BPAI or Board) is deciding more appeals than ever before.  The chart below reflects the number of applications with completed appellate briefing that are pending resolution at the BPAI. As active patent prosecutors are well aware, this chart only reveals a small portion of a complex problem.  Appeal briefing has largely become an ordinary part of patent prosecution practice. Most cases where appeal briefs are filed do not actually reach a BPAI decision.  Rather, in most cases the examiner withdraws the standing rejection rather than pursue the appeal.  In this system, appeal briefs have largely become a priced commodity rather than an all-out factual and legal effort.

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In Hyatt v. Kappos, the en banc Federal Circuit is focusing on the amount of new evidence that can be presented when challenging a BPAI decision in Federal District Court under 35 USC 145.  The panel decision held that the district court properly refused to allow Hyatt to submit additional expert testimony that went beyond the arguments presented to the BPAI.  Judge Moore dissented from that holding and instead argued that the right to a “civil action” under Section 145 includes a right for a de novo consideration of patentability.

The issues raised in Hyatt v. Kappos are now important for many patent applicants because of the cost-pressures of appeal briefs and the high-likelihood that rejections will be withdrawn based on the briefing.  Typical Applicants do not submit substantial additional evidence of patentability during the appeal process.  However, under Hyatt, the applicant would be barred from substantially adding to the record in a subsequent civil action.