Tag Archives: Federal Circuit En Banc

Bilski Briefs: Supporting the Government (In Name)

Patent, Patentable Subject Matter, , , ,

UPDATE: More briefs added Oct 5, 2009, 11:30 am

The final round of amicus briefs have been filed in the pending Supreme Court case of Bilski v. Kappos. Mr. Bilski is appealing the Federal Circuit's en banc rejection of his patent application. In that decision, the court held that Bilski's claimed method of hedging risk did not qualify as patentable subject matter under 35 U.S.C. 101 because the method was neither tied to a particular machine nor transformative of any physical article. Bilski challenges this "machine-or-transformation" test as unduly narrow. Bilski's legal position was supported in a large set of amicus briefs including a strong textualist argument made by Professor John Duffy.

Briefs supporting the government position have been filed. As summarized below, the vast majority of briefs also reject the Federal Circuit's machine-or-transformation test as the sole test of patentable subject matter for a claimed process. In my summaries, I have attempted to capture what I learned from each brief, of course the briefs and arguments are much more extensive and nuanced than my squibs suggest.

Electronic Frontier Foundation (EFF) and the Kauffman Foundation: Business method patents are harmful and should not be allowed. The long history of US patentable subject matter indicate that a patentable process must provide a technological advance. Likewise the mere fact that a process uses a machine or computer does not immediately render the process patentable subject matter. Rather to be patentable, the advance must be a technological advance. EFF etc amicus brief.pdf.

Red Hat: Software methods do not become patentable simply because they are tied to a computer. Benson. Download 08-964bsacRedHatInc.

William Mitchell College of Law IP Institute: This case does not properly present the issue of patentability of claims that include a mix of statutory and non-statutory subject matter. The court should wait for an appropriate case to decide that issue. Parsing Section 101 provides few real answers as to patentable subject matter. Download 08-964 William Mitchell College of Law Intellectual Property Institute.

SFLC (Moglen and Ravicher): Standing alone, software is not patentable. This result is derived from the Supreme Court's decision in Microsoft v. AT&T that “[a]bstract software code [uninstalled in a machine] is an idea without physical embodiment.” 550 U.S. 437, 449 (2007). Download 08-964 Software Freedom Law Center.

SIIA: The patent eligibility of software is well established and should not be disturbed. Download 08-964 Software & Information Industry Association.

Knowledge Ecology Int'l: The goal of the system is to encourage progress, not to reward inventors. Further, patent protection is not a "necessary policy intervention to reward successful investment in new medical technologies. . . . [M]any of the greatest medical advances have benefited significantly, and in some cases exclusively, from mechanisms that exist completely outside of the patent system." Download 08-964 Knowledge Ecology International.

Mark Landesmann: The evidence of the negative social impact of business method and software patenting is properly directed at the PTO's allowance of patents that were not substantially novel and that were not properly disclosed or claimed. There is no evidence that patents on novel, non-obvious and properly disclosed business-method process inventions create any harm. Download 08-964 Mark Landesmann.

Nevada State Bar Ass'n: The machine-or-transformation test harms emerging Nevada businesses – especially in the growing areas of solar energy, gaming, and digital communications. Download 08-964bsacintellectualpropertysectionnevadastatebar.

American Bar Ass'n: The court should use an incremental approach to excluding claims to subject matter where patenting does not make sense and creates a problem. Categorical limits such as the machine-or-transformation test may limit innovation. That said, the "[p]atent law should not interfere with the exercise of human intellect by granting a monopoly on processes in which thinking is central." A specific target of the ABA is to eliminate patents covering tax planning methods. Download 08-964 American Bar Association.

American Insurance Ass'n: Regardless of their novelty, insurance policies should not be the subject of patent protection – even when combined with a computer. Download 08-964 American Insurance Association.

Bank of America, Google, et al.: The patent laws should bar patentability of "accounting methods, tax mitigation techniques, financial instruments, and other means of organizing human behavior—or software used to implement those methods." Download 08-964 Bank of America et al..

Bloomberg: Limiting a method to use on a general purpose computer should not render the method patentable. Download 08-964 Bloomberg.

CCIA: It is important that the Federal Circuit eliminated the overbroad State Street test. The current tension in the patent system can largely be traced to that unprecedented over-expansion of the system. Tight limits on patentable subject matter are important because (inter alia) of the strict liability nature of patent infringement. "Tying patentability to physical subject matter is not a perfect solution. However, it limits the reach of patents in important ways that can significantly reduce the risks of inadvertent infringement and the scope of potential liability."Download 08-964 Computer & Communications Industry Association.

FFII: Patents on business methods have been considered and were rejected by the Statute of Monopolies in 1623. Patents greatly harm the Free & Open Source Software (FOSS) movement. Download 08-964 Foundation for a Free Information Infrastructure.

Professors Menell and Meurer: The Constitution creates a real limit on patentable subject matter – i.e., the subject matter of the patent must be within the "useful Arts." Economic evidence indicates that business method patents (especially internet related business methods) are harmful. 08-964 bsac Menell.pdf.

Law Professors and the AARP (Including Josh Sarnoff): Patents should only cover "inventions in the application." Patents can not cover "non-inventive applications of public domain science, nature, and ideas." The right interpretation of the statute requires that the invention "reside in the application, rather than in a discovery preceding or employed by it. This is because the science, nature, or ideas must be treated as if they are already in the prior art, i.e., are publicly known and free for all to use. Absent invention in applying such discoveries, there is simply no invention to patent." 08-964 bsac Brief of Eleven Law Professors and AARP.pdf.

Microsoft, Philips, and Symantec: Nobody (except Bilski) believes that his claims deserve patent rights. The machine-or-transformation test should not be seen as the exclusive test of patentable subject matter of a process claim – in part because the test has already "proven overly difficult to implement in practice." Like Professor Hollaar, Microsoft would simplify the test by requiring that the invention "involve one or more disclosed physical things." Today's computers – although complex – are not fundamentally different from Babbage's 1836 mechanical computer. Process claims that use computers should be patentable. Am Brief.pdf.

Professor Hollaar and the IEEE: Just restating the general principles of patentable subject matter is unhelpful. Rather, clear rules are needed – especially because the subject matter question is most frequently addressed by patent examiners who have little legal training and little time to ponder abstractions. A clear and time-tested rule would be: A process is patentable subject matter when it involves making or using a machine, manufacture, or composition of matter. This means that software method patents that require a computer would be patentable, but Bilski's method of hedging would not be patentable. bilski-sc-amicus.pdf.

American Medical Association: The machine-or-transformation test should not supplant the requirement that a patent claim "address a technology." A patent should not be allowed to cover "every possible application of a scientific observation." Rather, claims should be limited to "a particular new and useful application or use of the observation. The Supreme Court should use this case to make a statement especially directed to "overreaching claims in the life sciences. . . . Such patents chill research, and patents such as those in Labcorp and Prometheus chill talking and thinking of ideas by making talking and thinking into a tort." 08-964 bsac The American Medical Association.pdf.

Adamas Pharma and Tethys: Section 101 should be interpreted in a way that is objective, predictable, and not duplicative of the other patentability requirements. The machine-or-transformation (MoT) test does not meet any of these requirements. The Federal Circuit test also violates US treaty obligations under TRIPS and NAFTA and potentially subject the US to trade disputes adjudicated at the World Trade Organization (WTO). Under these US-initiated treaties member countries agreed to offer patent rights "in all fields of technologies." A major purpose of the agreements was to ensure that countries offered a full scope of patent rights, and by limiting the scope of rights, the US "will no longer be able to credibly argue in Special 301 trade disputes that failure to protect healthcare inventions made by cutting-edge U.S. companies constitutes inadequate protection of intellectual property rights." Some Congressional intent can be gleaned from the legislative history of Section 287(c) of the patent act. As originally proposed, that provision would have limited the subject matter eligibility of medical and diagnostic methods. After some debate, a compromise was reached to continue to allow their patenting, but to limit the remedies available. 08-964 bsac Adamas Pharmaceuticals.pdf.

Robert Sachs and Daniel Brownstone: Software should be patentable and has been for a long time. The Federal Circuit test greatly confuses the issue. Although software is an abstraction from the physical world, it is not "abstract." SF-5270929-v1-Bilski_v_Doll_Amicus_Brief_of_R_Sachs_and_D_Brownstone_as_amici_curiae_2009-08-06.PDF.

Big Internet Retailers, including Crutchfield, Overstock, and LL Bean: Patent Trolls are hurting online retailers and one way to stop them is to eliminate business method patents (including software business method patents). In effect, business method patents amount to a tax on Internet commerce. (The companies don't mention – unlike offline retailers – internet companies are often exempt from paying sales tax…) Internet Retailer Amicus Brief.pdf.

Brief of CASRIP (U. Washington): The US Constitution sets a bound on the scope of patentable subject matter – limiting them to the Constitutionally proscribed "useful Arts" as that term was understood at ratification. For new methods, one key is to consider the purpose of the method. Methods of entertaining a cat using a laser and telling a joke into a microphone should not be patentable regardless of their tie to particular machines because neither of those functions have ever "been considered a useful Art, and surely . . . is not the kind of discovery that the Patent Clause contemplates." Some methods also exist that should be patentable even though they fail the machine-or-transformation test. Despite its problems, the machine-or-transformation test is "superior to its competitors in filtering out preemptive claims to basic principles." However, it should not be the sole test of eligibility. Bilski's claim is unpatentable because hedging against price inflation (the purpose of the method) is not within the useful Arts. CASRIP am cur brf.pdf.

Claim Construction: A Structured Framework*

Articles and Publications, Patent, , , ,

Guest post by Professor Peter S. Menell (UC-Berkeley School of Law); Matthew D. Powers (Weil, Gotshal & Manges LLP); and Steven C. Carlson (Fish & Richardson PC) 

The construction of patent claims plays a critical role in nearly every patent case. It is central to evaluation of infringement and validity, and can affect or determine the outcome of other significant issues such as unenforceability, enablement, and remedies. Yet jurists and scholars have long lamented the challenges of construing patent claim terms. The Federal Circuit’s en banc decision in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005), stands as the most authoritative decision on claim construction doctrine. But while putting to rest various controversies, many core tensions in claim construction persist. Moreover, the decision itself does not provide a step-by-step approach to construing claims. This commentary provides a structured road map.

(more…)

Bilski Briefing: Government Argues that Section 101 “Processes” are limited to “technological and industrial processes.”

Patent

Bilski v. Kappos (Supreme Court 2009) 08-964bsUnitedStates.pdf

In its responsive brief, the Obama Administration asks the Supreme Court to confirm that a patentable process must be tethered to technology – either “directed to the operation of a particular machine or apparatus” or “involve the transformation of matter into a different state or thing.”

Interpreted in light of the historical scope and development of the patent laws, as well as the statutory context, the term “process” encompasses all technological and industrial processes, broadly conceived. But it does not extend patent-eligibility beyond those bounds, to methods of organizing human activity that are untethered to technology—e.g., methods by which people conduct economic, social, or legal tasks, such as entering into contracts, playing poker, or choosing a jury. Such methods fall outside of the broad expanse of technological and industrial fields that “the statute was enacted to protect.” Parker v. Flook, 437 U.S. 584, 593 (1978). Because petitioners’ hedging method relates solely to human conduct, untethered to any technology—any machine or transformation of matter—it falls outside the coverage of Section 101.

. . .

This Court has long recognized that the distinguishing feature of a technological process is that it concerns a particular machine or apparatus or effects a transformation of matter to a different state or thing.

Although Bilski’s claim does not relate directly to software, the machine-or-transformation could be seen to limit the patentability of software processes acting on a general purpose computer (as opposed to a “particular machine”). The Government brief suggests that the Federal Circuit test leaves software substantially patentable when tied to a general purpose computer – citing favorably to In re Alappat, 33 F.3d 1526, 1545 (Fed. Cir. 1994) (en banc) (“[A] general purpose computer in effect becomes a special purpose computer once it is programmed to perform particular functions pursuant to instructions from program software.”).

In any event, the machine-or-transformation test contemplates that many forms of “software” inventions are patent-eligible. . . . [However,] software code that is claimed by itself, uncoupled from any storage medium or computer, may be nothing more than “an idea without physical embodiment,” and therefore would not be patent-eligible.

Here, the brief did not address the reality that a software process can be “technological and industrial” without be limited in its association to a particular computer.

As a fall-back, the Government appears to suggest an additional exception to the patentable subject matter test for “methods of organizing human activity.”

Methods of organizing human activity are not patent-eligible “process[es]” within the meaning of Section 101.

The brief spends a considerable amount of time focusing on the statutory interpretation on the word “process” and its predecessor “useful arts” – paying special attention to provide an originalist style analysis. Here, the government attempts to show that finance (i.e., business methods) were not originally considered useful arts. Additionally, the government argued that even though tremendous advances took place in finance and insurance industries during the 18th and 19th centuries, those innovations were not traditionally patented.

In sum, because the initial patent statutes were intended to foster the “useful arts,” they were directed to technological and industrial inventions, as opposed to fields of purely human activity—including financial and economic activity unconnected to technology—which fell within the sciences or liberal arts.

Amicus briefs in support of the government position are due this Friday.

An Initial Comment on Prometheus: The Irrelevance of Intangibility

Patent, , , , , , ,

By Kevin Emerson Collins, Associate Professor of Law, Indiana University Maurer School of Law—Bloomington [BIO][Articles][PDF Version of this Post]

Background: The Machine-or-Transformation Test of Bilski

Last fall, the Federal Circuit articulated the “machine-or-transformation” test for patent eligibility in its landmark case In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc). It held that a method is eligible for patent protection only if it is either (a) limited to a “particular machine” or (b) responsible for transforming a “particular article” into a different state or thing. Id. at 954. Additionally, in a classic example of language that adds judicial wiggle room, the machine or transformation that satisfies either of these prongs “must impose meaningful limits on the claim’s scope,” it “must be central to the purpose of the claimed process,” and it must not be part of “insignificant extra-solution activity” or a “mere data-gathering step.” Id. at 961–62 (emphases added).   

The Supreme Court has accepted certiorari in Bilski, but the impending Supreme Court opinion has not stopped the Federal Circuit from issuing what is perhaps its most important case to date applying the machine-or-transformation test: Prometheus Laboratories, Inc. v. Mayo Collaborative Services. There have been two distinct types of claims that have taken center stage in recent debates over the section 101 doctrine of patent eligibility: “business methods” and what I will call “determine-and-infer methods.” The claim at issue in Bilski describes a classic business method. In contrast, Prometheus involves a determine-and-infer method. The Federal Circuit’s opinion in Prometheus opens a new window into the import of the machine-or-transformation test. Regardless of one’s views of the soundness of Federal Circuit’s reasoning in Prometheus, herein lies one of the opinion’s greatest virtues. By issuing Prometheus before the Court’s oral arguments in Bilski, the Federal Circuit has helped to clarify the stakes of the Court’s decision to sanction, reformulate, or reject the machine-or-transformation test.   

(more…)

Lucent v. Microsoft: Damages

Damages, Patent, , , , ,

Lucent v. Gateway & Microsoft (Fed. Cir. 2009)

Lucent’s patent-in-suit claims was filed in 1986 and generally focuses on using an on-screen keyboard to enter information into a computer. In 2002, Lucent sued Microsoft and others for infringement. Since then, the patent has expired, but the litigation continues over past damages. Perhaps most notably, this case may serve as a reminder that a twenty year patent term represents a major span in the worlds of business and technology.

The primary infringing portion of Microsoft’s software appears to be the “date picker” function found in Microsoft calendars. In litigation, the jury sided with Lucent and awarded the patent holder with $350 million in damages. Here, I discuss three aspects of the opinion: damages; obviousness; and inducement.

Damages: Most of the action in the Federal Circuit decision revolves around damages. The parties appear to agree that Microsoft sold 110 million accused units with a total sales value of $8 billion. Based on that figure, Lucent requested $561 million in damages based on an 8% royalty rate of Microsoft’s sales revenue. Microsoft argued that the correct licensing rate should result in only $6 million lump sum in damages. On appeal, the Federal Circuit vacated the $350 million dollar award and remanded for a new trial solely on the issue of damages – finding that the original verdict was not supported by substantial evidence.

Reasonable Royalty Calculation: The Patent Act requires that a court award damages at least in the amount of a “reasonable royalty.” The hallmark of that calculation involves a hindsight reconstruction in an attempt to calculate the patentee’s differential “pecuniary condition . . . if the infringement had not occurred.” This is often done through a “hypothetical negotiation” reconstruction based on the Georgia-Pacific factors. See Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116, 1120 (S.D.N.Y. 1970); see also Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1554 n.13 (Fed. Cir. 1995) (en banc).

Entire Market Value: When a patentee proves that the patent related feature serves as the predominant basis for customer demand, courts allow damages to be based upon the “entire market value” of the product (i.e., 8% of the sales revenue of Microsoft Office) rather than focusing on the incremental value of the innovation. Here, the Federal Circuit held that the “only reasonable conclusion” is that the date-picker function is not a substantial driver of Office sales. “There was no evidence that anybody anywhere at any time ever bought Outlook . . . because it had a date picker.”

Patentees typically prefer to invoke the entire market value rule because it seemingly tends to lead to higher total damage payouts. Of course, the market value only sets a base. Interestingly, the Federal Circuit recognized here that the bar on using the entire market value of a product is rather arbitrary.

Although our law states certain mandatory conditions for applying the entire market value rule, courts must nevertheless be cognizant of a fundamental relationship between the entire market value rule and the calculation of a running royalty damages award. Simply put, the base used in a running royalty calculation can always be the value of the entire commercial embodiment, as long as the magnitude of the rate is within an acceptable range (as determined by the evidence). . . . Microsoft surely would have little reason to complain about the supposed application of the entire market value rule had the jury applied a royalty rate of 0.1% (instead of 8%) to the market price of the infringing programs. Such a rate would have likely yielded a damages award of less than Microsoft’s proposed $6.5 million.

The Court goes on to suggest that the entire market value rule has a place in cases where the invention is only a small portion of the product.

Some commentators suggest that the entire market value rule should have little role in reasonable royalty law. See, e.g., Mark A. Lemley, Distinguishing Lost Profits From Reasonable Royalties, 51 Wm. & Mary L. Rev. (forthcoming 2009) … Amy Landers, Let the Games Begin: Incentives to Innovation in the New Economy of Intellectual Property Law, 46 Santa Clara L. Rev. 307, 362 (2006) … But such general propositions ignore the realities of patent licensing and the flexibility needed in transferring intellectual property rights. The evidence of record in the present dispute illustrates the importance the entire market value may have in reasonable royalty cases.

Georgia Pacific Factors: In its opinion, the Federal Circuit emphasized the flexibility of its jurisprudence in deciding damages with an understanding that actual licensing (much less a hypothetical negotiation) is “complicated” and “inexact.” Ultimately, the case is being sent back for a new trial because the jury’s award was not logically tied to the evidence. (“[T] damages evidence of record was neither very powerful, nor presented very well by either party.”) Most notably lacking are comparable licensing agreements.

First, some of the license agreements are radically different from the hypothetical agreement under consideration for the Day patent. Second, with the other agreements, we are simply unable to ascertain from the evidence presented the subject matter of the agreements, and we therefore cannot understand how the jury could have adequately evaluated the probative value of those agreements.

Damages award vacated

Power Behind the Black Box of Obviousness: In a string of recent cases, the Federal Circuit has reinvigorated the notion that jury verdicts on the question of obviousness will likely be upheld on appeal. Here, Microsoft argued for a particular interpretation of the prior art that it presented. While being sympathetic to Microsoft’s argument, the court held that the defendant’s arguments did not meet the necessary burden.

When the underlying facts are taken in the light most favorable to Lucent, the non-moving party, the evidence reasonably permitted the jury to have decided that Microsoft did not prove by clear and convincing evidence that claim 19 would have been obvious.

Nonobviousness affirmed.

Inducement: Lucent’s case was built on the notion of contributory infringement. Microsoft’s software does not – just by itself – directly infringe Lucent’s asserted method claims. Rather, by selling the software, Microsoft leads its customers to directly infringe. Contributory infringement and inducement both require proof of underlying direct infringement. At trial, Lucent was unable to point to any actual instance where a Microsoft customer used Microsoft products to perform the claimed method. On appeal, the Federal Circuit affirmed the infringement finding by holding that circumstantial evidence was sufficient to support a conclusion that at least one person (other than the experts in the case) used the products in an infringing manner.

As in Moleculon, the jury in the present case could have reasonably concluded that, sometime during the relevant period from 2003 to 2006, more likely than not one person somewhere in the United States had performed the claimed method using the Microsoft products.

Infringement affirmed.

Mystery Graph of the Day

Patent,

I created the following graph after reading the Federal Circuit’s 3-2 claim construction reversal in Martek. Can you guess what the graph represents?

Mystery Solved by Joe Helmsen from Pepper Hamilton. Joe writes

“I think that the graphs represent the percent chance of having a majority decision in a particular direction given that each of x judges has a y% chance of deciding in that way.  For example, the top line represents 1 judge at 90%, 2 judges have to go 2-0 (.9*.9=81%), 3 judges have to go 3-0 or 2-1 (.9^^3 + 3*.9*.9*.1 =97.2%, etc.).” 

Right. One point of the graph is to illustrate the interesting phenomenon that the odds of convincing a “majority” are much higher when the panel has an odd number of judges. This is easy to understand when comparing a two-judge panel with a three-judge panel. A two-judge panel offers no room for error because requires that you convince both judges. On the other hand, a three-judge panel will side with you if you convince two of the three judges.

The graph also illustrates a second point – that in theory multiple judges tend to make marginal cases more predictable. Thus, an argument that will convince a judge 70% of the time would be predicted to carry the day in almost 90% of 12–member en banc panels.

Of course, this discussion relies on several false premises.  Most notably, the analysis assumes that each panel member decision is independent of the decision made by other panel members. That is is clearly not true.  Rather, the judges and clerks communicate and influence one another.  In addition to independence, the analysis presented here presumes that each judge has the same likelihood of deciding the case in a particular direction. 

Law Review Student Note Topics for 2009

Patent, ,

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

Student Note Topics: Here are some suggestions for patent law focused law review topics for 2009-10 that I would like to see for my own edification. Please send me a note if you choose one of these.

  • Injunctive Relief Pending Appeal: Proposing a clear jurisprudence for allowing stays of injunctive relief pending appeal in patent cases. See Microsoft v. i4i. Examine problems associated with the proposed stay-as-a-right found in earlier proposed patent legislation.
  • Using Patents Applications (and Invention Rights) as Collateral: Following Sky Technologies v. SAP AG, does a patent application work as a security interest? (can a security interest be perfected and foreclosed upon for rights to inventions that are not yet the subject of a patent application). [See final paragraph of my Sky Tech discussion]
  • Federal Circuit Timing: A statistical analysis of the timing of CAFC decisions (Including a comparison of the various judges and a discussion of how the various circuits reign-in slow judges).
  • Patent Term Extensions: A statistical analysis of patent term extensions granted by the PTO. (https://patentlyo.com/patent/2008/07/patently-o-bi-5.html).
  • International Patents: Cardiac Pacemaker (en Banc): Understanding the meaning of “component;” Here, I think that there should be special consideration for whether there is a need for a treaty arrangement to accommodate protection of inventions that easily operate cross-border.
  • Inequitable Conduct: The impact of Exergen Corp. v. Wal-Mart Stores, CVS, and SAAT, ___ F.3d ___, 2009 U.S. App. LEXIS 17311 (Fed. Cir. 2009). This paper would include a discussion of how procedural changes may often have more impact than do changes in the underlying substantive law. It may also discuss the tradition of appellate courts in dictating procedure apart from substance.
  • Inequitable Conduct allegations based on examiner interviews. See https://patentlyo.com/patent/2009/07/the-effectiveness-of-examiner-interviews.html.
  • Tell the story of the Pod-Ners case: https://patentlyo.com/patent/2009/07/mexican-yellow-bean-patent-finally-cooked.html.
  • Explaining the dying breed of Jepson claims: https://patentlyo.com/patent/2009/06/bits-and-bytes.html.
  • Obviousness as a Matter of Law: A recent petition to the Supreme Court challenged the procedure of allowing a lay jury (as opposed to a judge) to judge the ultimate question of whether a patent is obvious. See Medela AG v. Kinetic Concepts, Inc. (on petition for a writ of certiorari 2009). Several important papers could stem from this issue. Notably, there is a need for a more academic analysis of the historic circuit split (rather than the advocacy seen in the brief). One paper could work to resolve the conflict with the pre-federal circuit decisions. Another paper could focus on the best procedure for resolving mixed questions of fact and law.
  • Declaratory Judgment Jurisdiction: In 2007, the Supreme Court decided the Medimmune case in a way that makes it easier for potential patent infringers to file declaratory judgment lawsuits of non-infringement or invalidity. It would be interesting to see whether this has had an impact on patent filings.

Bits and Bytes No. 127: Patentability shall not be negatived by the manner in which the invention was made.

Bits and Bytes, Conference or CLE, En Banc, Obviousness, Patent, ,

Upcoming Conferences:

  • World Research Group, a Patently-O job board sponsor, will be holding a TechNet Patents Forum in New York on November 5-6. Patently-O readers will receive a $300 discount by using the promo code EAG476.

Federal Circuit En Banc:

  • On September 18, the Court of Appeals for the Federal Circuit will sit en banc to hear two non-patent cases.
  • Nebraska Public Power v. US:
    • The Nebraska case is one of several dozen Federal Claims actions against the US Government for breach of contract and takings for the Government’s failure to begin removing spent nuclear fuel.
    • Question: Does the mandamus order issued by the United States Court of Appeals for the District of Columbia Circuit in Northern States Power Co. v. United States Dep’t of Energy, 128 F.3d 754 (D.C. Cir. 1997) preclude the United States from pleading the “unavoidable delay” defense to the breach of contract claim pending in the United States Court of Federal Claims, and if so, does the order exceed the jurisdiction of the District of Columbia Circuit?
  • Henderson v. Dep’t of Veteran Affairs:
    • Equitable tolling of claims for veteran’s benefits
    • Question: Does the Supreme Court’s decision in Bowles v. Russell, 127 S. Ct. 2360 (2007), require or suggest that this court should overrule its decisions in Bailey v. West, 160 F.3d 1360 (Fed. Cir. 1998) (en banc), and Jaquay v. Principi, 304 F.3d 1276 (Fed. Cir. 2002) (en banc), holding that 38 U.S.C. § 7266 is subject to equitable tolling?.

Relevance of the “manner in which the invention was made:”

  • 35 U.S.C. 103(a) makes clear that “[p]atentability shall not be negatived by the manner in which the invention was made.” That final sentence of the paragraph was apparently intended to contrast the 1952 law from the Supreme Court’s loose statement in Cuno that a patentable invention must “reveal the flash of creative genius.” 314 U.S. 84 (1941).
  • Should this statement be interpreted to mean that the inventor’s actual process has no relevance to the questions of novelty and nonobviousness? Or, is there still room for a jury to consider the actual creativity and genius of the inventor and the process used. (This question was suggested by a comment on the blog).

Bits and Bytes No. 127: Patentability shall not be negatived by the manner in which the invention was made.

Bits and Bytes, Conference or CLE, En Banc, Obviousness, Patent, ,

Upcoming Conferences:

  • World Research Group, a Patently-O job board sponsor, will be holding a TechNet Patents Forum in New York on November 5-6. Patently-O readers will receive a $300 discount by using the promo code EAG476.

Federal Circuit En Banc:

  • On September 18, the Court of Appeals for the Federal Circuit will sit en banc to hear two non-patent cases.
  • Nebraska Public Power v. US:
    • The Nebraska case is one of several dozen Federal Claims actions against the US Government for breach of contract and takings for the Government’s failure to begin removing spent nuclear fuel.
    • Question: Does the mandamus order issued by the United States Court of Appeals for the District of Columbia Circuit in Northern States Power Co. v. United States Dep’t of Energy, 128 F.3d 754 (D.C. Cir. 1997) preclude the United States from pleading the “unavoidable delay” defense to the breach of contract claim pending in the United States Court of Federal Claims, and if so, does the order exceed the jurisdiction of the District of Columbia Circuit?
  • Henderson v. Dep’t of Veteran Affairs:
    • Equitable tolling of claims for veteran’s benefits
    • Question: Does the Supreme Court’s decision in Bowles v. Russell, 127 S. Ct. 2360 (2007), require or suggest that this court should overrule its decisions in Bailey v. West, 160 F.3d 1360 (Fed. Cir. 1998) (en banc), and Jaquay v. Principi, 304 F.3d 1276 (Fed. Cir. 2002) (en banc), holding that 38 U.S.C. § 7266 is subject to equitable tolling?.

Relevance of the “manner in which the invention was made:”

  • 35 U.S.C. 103(a) makes clear that “[p]atentability shall not be negatived by the manner in which the invention was made.” That final sentence of the paragraph was apparently intended to contrast the 1952 law from the Supreme Court’s loose statement in Cuno that a patentable invention must “reveal the flash of creative genius.” 314 U.S. 84 (1941).
  • Should this statement be interpreted to mean that the inventor’s actual process has no relevance to the questions of novelty and nonobviousness? Or, is there still room for a jury to consider the actual creativity and genius of the inventor and the process used. (This question was suggested by a comment on the blog).

Bits and Bytes No. 127: Patentability shall not be negatived by the manner in which the invention was made.

Bits and Bytes, Conference or CLE, En Banc, Obviousness, ,

Upcoming Conferences:

  • World Research Group, a Patently-O job board sponsor, will be holding a TechNet Patents Forum in New York on November 5-6. Patently-O readers will receive a $300 discount by using the promo code EAG476.

Federal Circuit En Banc:

  • On September 18, the Court of Appeals for the Federal Circuit will sit en banc to hear two non-patent cases.
  • Nebraska Public Power v. US:

    • The Nebraska case is one of several dozen Federal Claims actions against the US Government for breach of contract and takings for the Government’s failure to begin removing spent nuclear fuel.
    • Question: Does the mandamus order issued by the United States Court of Appeals for the District of Columbia Circuit in Northern States Power Co. v. United States Dep’t of Energy, 128 F.3d 754 (D.C. Cir. 1997) preclude the United States from pleading the “unavoidable delay” defense to the breach of contract claim pending in the United States Court of Federal Claims, and if so, does the order exceed the jurisdiction of the District of Columbia Circuit?
  • Henderson v. Dep’t of Veteran Affairs:

    • Equitable tolling of claims for veteran’s benefits
    • Question: Does the Supreme Court’s decision in Bowles v. Russell, 127 S. Ct. 2360 (2007), require or suggest that this court should overrule its decisions in Bailey v. West, 160 F.3d 1360 (Fed. Cir. 1998) (en banc), and Jaquay v. Principi, 304 F.3d 1276 (Fed. Cir. 2002) (en banc), holding that 38 U.S.C. § 7266 is subject to equitable tolling?.

Relevance of the “manner in which the invention was made:”

  • 35 U.S.C. 103(a) makes clear that “[p]atentability shall not be negatived by the manner in which the invention was made.” That final sentence of the paragraph was apparently intended to contrast the 1952 law from the Supreme Court’s loose statement in Cuno that a patentable invention must “reveal the flash of creative genius.” 314 U.S. 84 (1941).
  • Should this statement be interpreted to mean that the inventor’s actual process has no relevance to the questions of novelty and nonobviousness? Or, is there still room for a jury to consider the actual creativity and genius of the inventor and the process used. (This question was suggested by a comment on the blog).

Ariad v. Lilly: Federal Circuit Grants En Banc Request to Challenge Written Description Requirement

En Banc, Enablement, Patent, Patent Cases 2009, , ,

Ariad Pharmaceuticals, MIT, and Harvard v. Eli Lilly (Fed. Cir. 2009) (en banc)

The Federal Circuit has granted Ariad's motion for an en banc rehearing of its case. The motion boldly asks whether the written description requirement should be eliminated as a doctrine that is separate and distinct from enablement. The questions:

a. Whether 35 U.S.C. ? 112, paragraph 1, contains a written description requirement separate from an enablement requirement? and

b. If a separate written description requirement is set forth in the statute, what is the scope and purpose of the requirement?

Ariad's brief is due within 45 days, and Lilly's brief is then due within thirty days of that.

Briefs of amici curiae will be entertained, and any such amicus briefs may be filed without leave of court but otherwise must comply with Federal Rule of Appellate Procedure 29 and Federal Circuit Rule 29. The United States is invited to submit an amicus brief.

Value of Amicus Briefs: In its recent Cardiac Pacemaker decision, the Federal Circuit expressly indicated that it was "appreciative of these [amicus] contributions." To make one particular point in the decision, the court emphasized that Cardiac's extreme position was "not even supported by the lone amicus brief we have received in favor of including method patents within Section 271(f)'s reach."

Although the written description requirement is primarily raised in pharmaceutical and biotechnology cases, it is an increasing aspect of software patent litigation. This decision could have a significant impact both on how patents are litigated and on how they are prosecuted. The inventors here discovered an important biochemical pathway and broadly claimed uses of that pathway.

Notes:

Bits and Bytes: Hot News

Bits and Bytes, Patent,

Today’s Posts that may have been lost in the shuffle:

Let’s meet up:

  • The MBHB law firm has been a longtime sponsor of Patently-O. (Thanks!) The firm is co-sponsoring a reception and dinner at the newly constructed wing of the Art Institute of Chicago on Monday, September 14, 2009 as part of the part of the Intellectual Property Owners Ass’n (IPO) annual meeting. I hope to see you there. [IPO]

Examining:    

En Banc: Methods do not have Exportable Components and Therefore Method Claims Cannot be Infringed Under Section 271(f)

Patent,

Cardiac Pacemaker v. St. Jude __ F.3d ___ (Fed. Cir. 2009) (En Banc)

In an en banc decision, the Federal Circuit has ruled that 35 U.S.C. § 271(f) “does not cover method claims.” This decision overturns the controversial 2005 decision in Union Carbide v. Shell Oil Co., 425 F.3d 1366 (Fed. Cir. 2005). The ruling was widely expected based on the Supreme Court’s 2007 decision in Microsoft Corp. v. AT&T Corp., 550 U.S. 437 (2007) (holding that “master disks” were not a 271(f) “component” when abroad to be copied and then installed to form a would-be infringing system). In reading Microsoft v. AT&T, the Federal Circuit found “a clear message that the territorial limits of patents should not be lightly breached.”

The holding is based in the logic that a process is a series of steps and, therefore, does not have any physical components amenable to export.

[M]ethod patents do have “components,” viz., the steps that comprise the method, and thus they meet that definitional requirement of Section 271(f), but the steps are not the physical components used in performance of the method.

The result in this case is that Cardiac’s process claim (Claim 4) cannot be infringed under Section 271(f).

Claim 4 of the ‘288 patent is comprised of the steps of determining a heart condition, selecting cardioversion as the appropriate therapy, and executing a cardioverting shock. Cardiac does not allege that all of those steps are carried out in the United States with respect to certain of the ICDs. Moreover, it cannot allege that the steps of the method are supplied, a contradiction in terms. Rather, Cardiac alleges that St. Jude’s shipment of a device that is capable of performing the method is sufficient to fall within the scope of Section 271(f). Although the ICD that St. Jude produces can be used to perform the steps of the method, as we have demonstrated, Section 271(f) does not apply to method or process patents. As Section 271(f) does not encompass devices that may be used to practice a patented method, St. Jude is therefore not liable for infringement … for IDCs exported abroad.

Reversed (on this issue)

Notes

  • Judge Newman dissented from the opinion – arguing that the language of 271(f) applies to any “patented invention.”
  • This case was only partially decided en banc. Part (c)(2) is en banc while the rest of the decision is decided by the panel of Judges Newman, Mayer, and Lourie. Judge Lourie signed the entire majority opinion, and Judge Newman only dissented as to Part (c)(2).
  • Cardiac Pacemaker v. Jude: Challenging 271(f) Liability for Components of a Method (Discussing briefs)

Judge versus Jury: Who Should Decide the Question of Obviousness?

Patent,

Medela AG v. Kinetic Concepts, Inc. (on petition for a writ of certiorari 2009)

Following their success in KSR, James Dabney and John Duffy have combined again to challenge the law of obviousness. This time the focus is litigation procedure. The pair – on behalf of their client Medela – argue that a judge (rather than a lay jury) should determine whether a patent is obvious. In its petition for certiorari, Medela poses the following question:

Whether a person accused of patent infringement has a right to independent judicial, as distinct from lay jury, determination of whether an asserted patent claim satisfies the “non-obvious subject matter” condition for patentability.

The ultimate question of obviousness is a “legal determination.” KSR & John Deere. And questions of law are ordinarily decided by a judge trained in the law. Markman. According to the petitioners, the black-box of the jury is problematic because it effectively limits appellate review to considering the rationales that a jury “might have adopted.” I.e., the current practice does not offer “meaningful appellate review over the legal issue of patent validity.” Quoting Baumstimler v. Rankin, 677 F .2d 1061 (5th Cir. 1982). En banc precedent from both the Fifth Circuit and Ninth Circuit conflict with modern obviousness procedure sanctioned by the Federal Circuit.

Notes:

  • File Attachment: Medela v. Kinetic Petition for Cert Final.pdf (253 KB)
  • The Graham v. John Deere obviousness procedure: When deciding the ultimate question of obviousness, the decision-maker considers (1) the scope and content of the prior art; (2) the differences between the claimed invention and the prior art; (3) the level of ordinary skill in the prior art; and (4) secondary considerations of nonobviousness. Of course, the conclusion of obviousness never logically follows from the factual elements– rather ordinarily an obviousness conclusion can only be inferred. In some ways, the jury determination of obviousness serves as a way to cover-up the gaping holes of subjectivity required in the final step of the Deere obviousness procedure. For many (if not most) litigated patents, reasonable minds will differ on the question of obviousness even when parties agree to the underlying factual background. It is precisely this type of imponderable question that calls for a jury decision as a way to maintain respect for the court.
  • Procedure: If Medela is successful, future jury instructions will likely include more detailed interrogatory questions regarding the facts necessary to reach a conclusion of obviousness. Some courts prefer to avoid detailed jury questions in order to avoid inconsistent jury findings and to eliminate potential grounds for appeal.
  • Professor Cotropia foreshadowed this issue in a 2007 Patent-O guest post soon after KSR. Chris Cotropia, KSR and the Line Between Fact and Law, Patently-O (May 6, 2007) at https://patentlyo.com/patent/2007/05/ksr_and_the_lin.html (“The Court in KSR introduces a procedural change, folding the TSM-like inquiry into the question of law level of the analysis.”).

Making a Federal Circuit Case of That?

Patent

Not every appeal passes the laugh test.< ?xml:namespace prefix ="" o ns ="" "urn:schemas-microsoft-com:office:office" />

Guest Post By Andrew J. Dhuey

Welcome to the first installment of Making a Federal Circuit Case of That? – an occasional peek at some unusually entertaining cases before the U.S. Court of Appeals for the Federal Circuit. 

Our first case is Cornish v. Doll, argued on August 3, 2009. If you clicked the preceding link, you already know the unhappy ending for Mr. Cornish: a Rule 36 affirmance without opinion. Still, Mr. Cornish had his morning in court, and what a 25-minute session it was (audio file).

Mr. Cornish is an attorney who lost his right to practice patent prosecution before the PTO in 1995. Before he took the podium, Judge Rader quietly – but not quietly enough – prepared his fellow jurists for a bumpy ride:

0:19      JUDGE RADER (whispering to another judge): Fasten your seltbelt. 

0:20      CHIEF JUDGE MICHEL: Yeah. Heh.

Safely buckled up, the judges heard Mr. Cornish explain what his case was about: free speech, religious freedom, Tafas v. Doll, continuing legal education, the patent bar exam, a name change in gratitude to God, and Olympic swimming. Mr. Cornish is an ardent opponent of the limits on continuation applications and claims at issue in Tafas.  His 39-claim amended complaint suggests that Mr. Cornish dislikes numerical limits, generally.

The opening minutes of oral argument revealed much confusion about what Mr. Cornish was appealing and what he sought in relief. He seemed at least as interested in discussing Tafas as he was his own loss of eligibility to prosecute patent applications:  

4:43      JUDGE LOURIE: How have you been damaged? This has nothing to do with Tafas.

4:50      MR. CORNISH: Well, if you would allow me to just mention the final rules, which is my concern.           

4:57      JUDGE RADER: Well they’re not the concern of the court in this case. We have that case before us in another sense. We’re interested in you, and what reason you think you have for damages, and you have no stake whatsoever in the Tafas case, so please tell us about something that’s relevant to this matter. 

5:18      MR. CORNISH:  Alright, the reason why I was interested in Tafas is because it… 

5:25      JUDGE RADER: I just said you have no interest in Tafas, tell us about this case.

With the focus back on Mr. Cornish’s personal grievance with the PTO, he explained that he changed his name around the time that the PTO removed him from its list of active patent attorneys:

6:52      MR. CORNISH: My name was Cornell D. Cornish. I went to the court…

6:58      JUDGE RADER: Yes, I know, you’re now Judge Cornish.

Some of the confusion in Mr. Cornish’s case concerned how he took and failed the patent bar exam three times after the PTO had declared him ineligible to prosecute patent applications. If, as Mr. Cornish contends, he was never properly removed from the PTO’s list of patent practitioners, then why did he sit for the patent bar exam three times?   

7:35      JUDGE RADER: Well now we come to 2005, they tell you if you’re to be readmitted, you must take the [patent] bar, and you agree with that because you take it three times.

7:44      MR. CORNISH: No, sir, I don’t.

7:46      JUDGE RADER: Well why did you take the test three times?

7:47      MR. CORNISH: Simply because of CLE. I’m required in < ?xml:namespace prefix ="" st1 ns ="" "urn:schemas-microsoft-com:office:smarttags" />New York state to show that I am actively seeking to keep my status up to date.

7:58      JUDGE RADER: You’re educated by taking the tests, is that it?

8:01      MR. CORNISH: Yes, indeed, absolutely. So, I’m like Mark Phelps, who lost a race after winning five gold medals. Just because I simply didn’t get a passing grade on the exam doesn’t mean that I’m not qualified or competent.

Okay, it’s really Michael Phelps and he won gold medals in all of his eight events in Beijing, but we get the point. Even when you’ve risen to the top of the patent prosecution world (e.g., design patent for condom ring), you don’t get every answer right.

As time ran scarce, there was really only one question left to resolve: why did Cornell D. Cornish become Cornell D.M. Judge Cornish? 

23:49    JUDGE LOURIE: Question – why did you change your name?

23:53    MR. CORNISH: Well, it’s actually a First Amendment religious case because I changed my name after heart surgery and my heart stopped for one hour. And the only explanation I can find for my survival for quite a few years since is divine intervention. So I took my new names out of the Bible in thanks to God for whatever mercy He had given me. It’s much, much more than I deserve. And my name was told – I told the Patent Office I’ve changed it and it was for religious reasons. It wasn’t as they point out that I was resigning to avoid the embarrassment of disbarment. 

And with that miraculous finish, the ride came to a complete stop. So did Mr. Cornish’s appeal, which, as mentioned, the court summarily rejected the following day.

Bilski’s Patent Application

Patent, , , , , ,

The Supreme Court is reviewing Bernard Bilski’s patent application to consider whether the application appropriately claims “patentable subject matter” under 35 U.S.C. 101 as interpreted by the Supreme Court. Much of the focus in the case is on the Federal Circuit’s exclusive “machine or transformation” test. However, I thought it would also be important to look at the underlying Bilski patent application because of how it may drive the debate at the Court.

Bilski’s application is not published. However, a copy of the 14-page application was included in a joint appendix submitted to the Federal Circuit during the en banc appeal. The application includes one independent claim; eight subsequent dependent claims; no drawings; and a priority claim to a 1996 provisional application. It appears that Buchanan Ingersoll (Pittsburgh) led the prosecution. The BPAI opinion rejected eleven claims – indicating that some amendments occurred during prosecution. (A docket sheet also indicates that drawings were later added.) Amazingly, Bilski’s case is based on an appeal from a March 2000 final rejection.

The Invention focuses on a method of managing consumption risk by commodity trading something that – in 1996 was “not currently managed in energy markets.” According to Bilski there was a “need for a fixed bill product to manage total energy costs including the consumption of risk.” The general idea of using commodity trading as a hedge against risk has been well known for years. However, Bilski proposes that consumers purchase commodities “at a fixed rate based on historical averages.” In a dependent claims, Bilski indicates that the risk to be avoided is a “weather-related price risk.” Later, that risk is drilled-down to focus on temperature shifts (heating and cooling degree days). Another dependent claim spells-out the equation for calculating the fixed cost based on prior fixed and variable costs, transportation costs, local delivery costs, and a location specific weather indicator. Additional dependent claims require specific Monte Carlo simulations and statistical tests to better calculate the fixed rate. In some claims, the commodity being traded is identified as “energy” and the market participants as “transmission distributors.”

The Claims do not focus on any particular machine or software implementation. Rather, they are organized as “methods” followed by a series of steps such as “initiating a series of transactions . . . “; “performing a Monte Carlo simulation . . .”; and “continuing to re-price the margin in the transaction until the expected portfolio margin and likelihood of portfolio loss is acceptable.”

No Machine: Even an amateur implementation of these methods would make extensive use of software and computer hardware. However, those elements are not present in the claims. Why did Bilski not include software and computer hardware in his application? My speculation: First, it does not appear – at least from the patent application – that he invented any software application of his hedging theory. Second, perhaps Bilski believed that a computer implementation element would unduly limit the scope of his invention.

Obvious and Not Enabled: The claims are likely obvious based on extensive prior art in the industry. In addition, the claims may well fail the tests of enablement and/or written description (if it survives Ariad v. Eli Lilly). However, the PTO worked-hard to properly couch this case as a test of patentable subject matter.

The abstract reads as follows:

A method is provided for managing the risk-associated costs of a commodity sold by a commodity provider at a fixed price. Such risk-associated costs include the weather-related costs of a fixed price-energy bill. The commodity provider initiates a series of transactions with consumers of the commodity wherein the consumers purchase the commodity at a fixed rate based upon historical averages. The fixed rate corresponds to a risk position of the consumers. The commodity provider then identifies market participants for the commodity who have a counter-risk position to that of the consumers. The commodity provider then initiates a series of transactions with the market participants at a second fixed rate such that the series of market participant transactions balances the risk position of the series of consumer transactions.

Read the application here: BilskiApplication.pdf

Bilski Briefs [Updated with 44 Briefs]

Patent, , ,

The question of patentable subject matter has returned to the Supreme Court — this time with a focus on business methods. In January 2009, an en banc Federal Circuit implemented the “machine or transformation test” as the exclusive test for determining whether a claimed process qualifies as patentable subject matter under 35 U.S.C. 101. Now, the case is pending before the Supreme Court with two focused questions:

QUESTIONS PRESENTED

1. Whether the Federal Circuit erred by holding that a “process” must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing (“machine-or-transformation” test), to be eligible for patenting under 35 U.S.C. § 101, despite this Court’s precedent declining to limit the broad statutory grant of patent eligibility for “any” new and useful process beyond excluding patents for “laws of nature, physical phenomena, and abstract ideas.”

2. Whether the Federal Circuit’s “machine-or-transformation” test for patent eligibility, which effectively forecloses meaningful patent protection to many business methods, contradicts the clear Congressional intent that patents protect “method[s] of doing or conducting business.” 35 U.S.C. § 273.

In this post, I have attached recently filed briefs which either (1) support Bilski or (2) support neither party. The government brief in opposition is due Sept 25 and friendly brief in opposition due within seven days of that filing.

  • Yahoo (Bilski – Yahoo! Amicus Brief (S.Ct) (as filed) (8-6-09).pdf) The focus on physicality does not make sense in today’s technology.
  • IBM (08-964 IBM.pdf) The proper test looks for a “technological contribution.”
  • Regulatory Data Corp ( 08-964 Regulatory Datacorp et al..pdf) Brief by John Duffy focuses directly on the historical importance of the statutory test. “The government is now asking this Court to impose a formalistic restriction on definition of “process” that would create an unprecedented and uncertain judicial limitation on patentable subject matter. This Court should reject that invitation just as it did more than a third of a century ago, when the government unsuccessfully advanced the very same argument. See Gottschalk v. Benson, 409 U.S. 63, 71 (1972).”
  • Accenture (08-964 tsac Accenture and Pitney Bowes, Inc.pdf) Machine or transformation test is not a reliable indicator of anything relevant. The standard for patentability should “usefulness” as set forth in the Constitution, in the patent statute, and by the Court.
  • Austin IP Law Ass’n ( 08-964 Austin Intellectual Property Law Association.pdf) The patent statute explicitly defines process quite broadly in Section 100(b). The Federal Circuit’s version of “process” in 35 U.S.C. § 101 is far narrower than the broad definition of “process” in 35 U.S.C. § 100(b) (2008).   
  • Double Rock and other IP entities (08-964tsacdoublerockcorporation.pdf) The Federal Circuit test conflicts with Supreme Court precedent and Congressional intent.
  • Law Professors [Lemley et al.] (08-964ac20lawandbusinessprofessors.pdf) The distinction on patentable subject matter should be based on the distinction between applied and abstract inventions. Bilski’s claims fail this test.
  • Chakrabarty (08-964 Chakrabarty.pdf) Brief by Scott Kieff and Richard Epstein argue that patent rights operate “like a beacon in the dark” to start conversations between innovative entities and potential users.
  • Franklin Pierce Law Center (Bilski.pdf) Court should adopt the “useful, concrete, and tangible result” test.
  • TeleCommunication Systems (08-964nsactelecommunicationsystemsinc.pdf) Subject matter eligibility should be predictably broad.
  • BIO, AdvaMed, WARF and U of Calif (08-964 tsac Biotechnology Industry Organization et al..pdf) Any decision should be clear that biotechnology is patentable.
  • Conejo Valley Bar Ass’n (08-964.ac.Conejo Valley Bar Association.pdf) The substantive elements of the patent act (102, 103, and 112) do all the necessary work.
  • Novartis (08-964tsacNovartisCorporation.pdf) A process of diagnosis should be patentable.
  • Dr. McDonough (08-964_PetitionerAmCuTMcDounough.pdf) “American innovation is not confined to Industrial Age mousetraps and other cleverly contrived gadgets. The modern economic agent is more likely to encounter innovation today in the services they consume than in the contraptions they use. The present amicus curiae suggests that the decision of the Federal Circuit in this case is an attempt to apply an Industrial Age standard to address a perceived Services Age problem, a problem that the present amicus curiae suggests does not exist.”
  • State of Oregon (08-964_NeutralAmCuOregon.pdf) (The Patent Hawk filed this brief on behalf of all Oregonians – although apparently without any official state approval) The brief makes an important point: Although Section 101 comes first in the statute, it does not make sense to use it as a screening tool at the PTO. Rather, the PTO’s skills are in comparisons of prior art and ensuring that the elements of Section 112 have been satisfied.
  • Chicago IP Law Ass’n (08-964 ac Intellectual Property Association of Chicago.pdf) There are strong parallels here with KSR; CAFC rule is too rigid.
  • Borland (Amicus Curiae Brief (Borland Software Corporation).pdf) The CAFC test does not properly follow Supreme Court precedent.
  • Time Systems (08-964 ac On Time Systems.pdf) Some abstract ideas should be patentable.
  • Monogram BioSciences and Genomic Health (08-964 ac Monogram Biosciences Inc.pdf) Patentable processes can be non-physical.
  • Sachs and Brownstone (08-964 ac Robert R. Sachs.pdf) The CAFC test is limits the patenting of software, and a bad result.
  • Boston Patent Law Association (08-964tsacbostonpatentlaw.pdf) A broad scope of patentable subject matter better preserves the health of an innovative culture; many landmark inventions fail the Federal Circuit’s Bilski test.
  • Georgia Biomedical Partnership, Inc. (08-964 Georgia Biomedical Partnership Inc.pdf) The Supreme Court has consistently refused to offer a “rigid” test.
  • Dolby Labs (08-964 Dolby Laboratories et al..pdf) The important thing is to settle expectations.
  • Teles AG ( 08-964 Teles AG.pdf) Subject matter eligibility should be “dynamic.” “Further, the global nature of today’s economy strongly recommends that the United States patent system be harmonized with robust patent systems of other nations wherever possible.”
  • Medtronic (08-964 Medtronic.pdf) Provides specific examples of medical innovations that may be unpatentable under the Federal Circuit test
  • Intellectual Property Owners (08-964acintellectualproperty.pdf) Machine or transformation test is not the only test; In its transformation test for signals, the CAFC “unduly focuses on the contents of the data . . . rather than the manner in which those signals are generated;” a general purpose computer should be considered a “particular machine.”
  • AIPLA ( 08-964 American Intellectual Property Law Association.pdf) A new exclusionary test is not needed.
  • Houston IPLA (08-964 Houston IP Law Assoc..pdf) The test negatively impacts Dell’s “build-to-order” patent (5,963,743) ; AT&T’s linear programming patent (4,744,028); and Sperry Corporation’s LZW compression patent (4,558,302).
  • Armanta, Asentinel, Cybersource, and Hooked Wireless (08-964 Entrepreneurial Software Companies.pdf) Questions of patentability are causing software companies to lose value.
  • Mr. Meiers ( 08-964 Raymond C. Meiers.pdf) A patentable invention “applies manifestations of nature and achieves a useful result.” This is the tripartite system.
  • Univ. South Florida ( 08-964 University of South Florida.pdf)
  • Awaken IP ( 08-964 AwakenIP.pdf) The CAFC test is unworkable and is as bad as the vague idea/expression dichotomy of copyright.
  • BSA ( 08-964 Business Software Alliance.pdf) Section 101 has been consistently and correctly interpreted to cover software innovations.
  • PhRMA, etc. ( 08-964 PhRMA et al..pdf) Medical processes should be patentable.”
  • Caris Diagnostics ( 08-964 Caris Diagnostics, Inc.pdf) Diagnostic method patents are important and have been called into question by Bilski.
  • AIPPI (AIPPI SupremeCourt_3455697.pdf) A flexible test is better, and TRIPS requires a flexible standard.
  • FICPI ( 08-964 FICPI.pdf) “The § 101 analysis should focus on the section’s substantive utilitarian requirement, rather than retrospectively attempting to rigidly define the categories of patentable subject matter without the foresight of the particular form technological innovations may take in the future.

Update: More Briefs

  • Professor Collins (08-964 Prof. Kevin Emerson Collins.pdf) Professor Collins has written a number of very interesting PSM articles. In his brief, he argues that the test should focus on whether “the claim impermissibly seeks a patent on a fundamental principle or an abstract idea.” One concern of the CAFC test is that it takes us off the path toward international harmonization.
  • Legal Onramp (08-964 Legal OnRamp.pdf) “Pure” business methods should not be patentable. “Unlike traditional patents on technological advances, the patenting of pure business methods is a serious obstacle to innovation because it unduly impedes competition.”
  • Eagle Forum (08-964 Eagle Forum Education & Legal Defense.pdf) Reminds us of the important constitutional role of the patent clause. “The decision below usurps the legislative role and adds complexities to patent law that are neither welcome nor justified in the 21st century.”
  • Fed Cir Bar Ass’n (08-964 Federal Circuit Bar Association.pdf) The CAFC test does not follow Supreme Court precedent.
  • Washington State Patent Law Association (08-964 tsac WSPLA.pdf) The Court should focus on Chakrabarty and Diamond v. Diehr: “any,” “new,” and “useful” “process.”
  • San Diego IP Law Ass’n (08-964 ac San Diego Intellectual Property Law Assoc.pdf)

Blackboard: Federal Circuit Again Find Software-Related Means-Plus-Function Claims Invalid for Failing to Disclose Sufficient Structure

CAFC, Claim Construction, Means Plus Function, Patent, Patent Cases 2009, , ,

Blackboard v. Desire2Learn (Fed. Cir. 2009) 08-1368.pdf

Blackboard’s patent covers an internet-based educational support system and method. (U.S. Pat. No. 6,988,138). On summary judgment, the district court (Judge Clark, E.D. Tex.) found claims 1-35 invalid as indefinite, but a jury found found that Desire2Learn liable for infringement of claims 36-38. On appeal, the Federal Circuit agreed that Claims 1-35 are indefinite, and – after altering the claim construction – held that the remaining claims were also invalid as anticipated. pic-54.jpg

Means-Plus-Function: Blackboard’s seemingly broadest claim (claim 1) includes several means-plus-function clauses, including a “means for assigning a level of access and control.” The specification briefly discusses an “access control manager” (ACM) with an “access control list.” On appeal, however, the court found that brief description to be an insufficient “disclosure of the structure that corresponds to the claimed function” and consequently indefinite under 35 U.S.C. §112 ¶2. See In re Donaldson, 16 F.3d 1189 (Fed. Cir. 1994)(en banc).

“[W]hat the patent calls the ‘access control manager’ is simply an abstraction that describes the function of controlling access to course materials, which is performed by some undefined component of the system. The ACM is essentially a black box that performs a recited function. But how it does so is left undisclosed.”

Important for patent drafter, means-plus-function claims require disclosure in the specification even if the means are already well known in the art.

The fact that an ordinarily skilled artisan might be able to design a program to create an access control list based on the system users’ predetermined roles goes to enablement. The question before us is whether the specification contains a sufficiently precise description of the “corresponding structure” to satisfy section 112, paragraph 6, not whether a person of skill in the art could devise some means to carry out the recited function.

Because claims 2-35 all depend upon claim 1, they are all invalid as indefinite

Claim construction: At the trial, Blackboard’s expert could only identify one difference between claims 36-38 and the prior art. Namely, that the Blackboard patent identified a “single login” feature that allowed one user to have various roles within the system. “For example, Blackboard asserted that its claimed method would allow a graduate student who was a student in one course and a teacher in another to use a single login to obtain access to both courses and to obtain access to the materials for each course according to the graduate student’s role in each.” However, on appeal, the Federal Circuit determined that the claims do not actually require that feature — leading them to hold the claims invalid based primarily on the admissions of Blackboard’s own expert.

[O]nce the claims are properly construed, the conclusion of anticipation is dictated by the testimony of Blackboard’s own witnesses and the documentary evidence that was presented to the jury. Based on that evidence, and in the absence of a “single login” requirement in claims 36-38, it is clear that the prior art contains every limitation of those claims.

Defendant Desire2Learn wins a complete victory (after a few million in attorney fees).

OVERVIEW OF USPTO PROCEEDINGS FOR THE REEXAMINATION OF A U.S. PATENT

Patent, Reexamination, , ,

Effect of a Pending Reexamination — Each claim of a patent is presumed valid under 35 U.S.C. 282 and may be enforced notwithstanding the presence of a pending reexamination proceeding. See Ethicon v. Quigg, 849 F.2d 1422, 1428, 7 USPQ2d 1152, 1157 (Fed. Cir. 1988); See also Viskase Corp. v. Am. Nat’l Can Co., 261 F.3d 1316, 1328, 59 USPQ2d 1823, 1831 (Fed. Cir. 2001); In re Etter, 756 F.2d 852, 857, 225 USPQ 1, 4 (Fed. Cir. 1985)(en banc). Although litigation may move forward in parallel with a reexamination proceeding, at the district court’s discretion, the results of the reexamination proceeding may have an effect on the litigation. See e.g., In re Translogic, 504 F.3d 1249 (Fed. Cir. 2007). Under 35 U.S.C. 307, a patent is not revised by any amendment or cancellation of a claim made during a reexamination proceeding until a reexamination certificate is issued.

Ex Parte Reexamination – A proceeding in which any person may request reexamination of a U.S. Patent based on one or more prior patents or printed publications. A requester who is not the patent owner (i.e., a “third party requester”) has only limited participation rights in the proceeding. [MPEP 2209]

Inter Partes Reexamination – A proceeding in which any person who is not the patent owner and is not otherwise estopped may request reexamination of a U.S. Patent issued from an original application filed on or after November 29, 1999 based on one or more prior patents or printed publications. Both patent owner and third party requester have participation rights throughout the proceeding, including appeal rights. [MPEP 2609]

Reexamination Granted – An Order Granting Reexamination is not a determination of claim patentability. An Order that one or more claims of a U.S. Patent will be reexamined because the request has established the existence of at least one SNQ based upon prior patents and/or printed publications. [MPEP 2247.01]

In ex parte reexamination, the Order, whether granting or denying reexamination, must be mailed within three months of the filing date of the request for reexamination. [MPEP 2241]

In inter partes reexamination, the Order must be mailed not later than three months after the request is filed.   [MPEP 2641]

Reexamination Denied – An Order Denying Reexamination is also not a determination of claim patentability. An order denying reexamination of any of the claims of a U.S. Patent because the Office has determined that no SNQ has been established in the request for reexamination. [MPEP 2247.01]

Substantial New Question of Patentability (SNQ) – A request for reexamination must establish the existence of at least one new technological teaching affecting any claim of the patent for which reexamination has been requested that was not considered by the Office in a prior Office proceeding involving the patent. The SNQ is established based on prior patents and/or printed publications. [MPEP 2242]

Notice of Filing of Request for Reexamination – Notice that a request for reexamination has been filed and accorded a filing date is published in the Official Gazette. [MPEP 2215]

Rejection (Non-Final) – The initial Office action on patentability.

In ex parte reexamination, the initial action is not mailed with the Order Granting Reexamination; the patent owner may file optional comments, to which the third party requester may respond, prior to the initial Office action. Therefore the Office must await the expiration of the periods for such comments and responses thereto before mailing the initial action. [MPEP 2262]

In inter partes reexamination, the initial action may optionally be mailed together with the Order Granting Reexamination, but even if not, no party comments are permitted prior the mailing of the initial action. Patent owner files a response to a non-final action that includes argument and/or an evidentiary showing and/or amendments, and the response will be entered as a matter of right. Third party requester may thereafter respond with written comments directed to the Office action and to the patent owner’s response. [MPEP 2260]

Rejection (Final) – A second or subsequent action on patentability in an ex parte reexamination may be made “final.” While responsive arguments may be considered, entry of an amendment or consideration of additional evidence is not a matter of right in a final rejection. Patent owner may appeal to the USPTO Board of Patent Appeals and Interferences (BPAI). [MPEP 2271]

Action Closing Prosecution (ACP) – The second or subsequent action on patentability in an inter partes reexamination proceeding. Patent owner may respond with argument and/or an evidentiary showing and/or amendments. Alternatively, patent owner may choose not to respond. If patent owner does file a response,
then third party requester may thereafter file written comments directed only to the patent owner’s submission. Entry of the patent owner response is not a matter of right. Neither party may appeal at this point in the proceeding. [MPEP 2671.02]

Right of Appeal Notice (RAN) – After (1) considering any patent owner response to an ACP, and any third party requester written comments thereto, or (2) the expiration of the time for patent owner to file a response and no response has been filed, the examiner will either re-open prosecution if necessary, or issue a RAN. The RAN sets time periods in which the parties may appeal to the BPAI. The RAN also closes prosecution. Any amendment filed after a RAN will not be entered. [2673.02]

It is possible for the Office to issue a RAN after a patent owner response to the initial Office action on patentability if both parties stipulate that the issues are appropriate for a final rejection and or a final patentability determination.

Appeal to the BPAI – Ex Parte Reexamination – A notice of appeal is a proper response to a final rejection in an ex parte reexamination. Only patent owner may appeal. The appeal process is similar to that in a non-provisional patent application. [MPEP 2273]

Appeal to the BPAI – Inter Partes Reexamination – Either party may file a notice of appeal as a proper response to a RAN in an inter partes reexamination. If some clams are rejected and some claims are allowed or confirmed as patentable, both parties may appeal those determinations, file appeal briefs, respondent’s briefs directed to the other party’s appeal brief, and, after the examiner files the examiner’s answer to those briefs, file a rebuttal brief directed to the examiner’s answer. [MPEP 2674]

Subsequent (Court) Appeals – Ex Parte Reexamination – If the request for reexamination was filed prior to November 29, 1999, patent owner may appeal the decision of the BPAI to either the U.S. District Court for the District of Columbia, or to the Court of Appeals for the Federal Circuit. If the request for reexamination was filed on or after November 29, 1999, patent owner may appeal only to the Federal Circuit. [MPEP 2279]

Subsequent (Court) Appeals – Inter Partes Reexamination – Either party who was a party to an appeal to the BPAI and is dissatisfied with the result may appeal only to the Court of Appeals for the Federal Circuit. [MPEP 2683]

Concurrent Reexamination and Litigation – If there is concurrent litigation and reexamination on a patent, and the request for reexamination was filed as a result of court order, or the litigation has been stayed for the purpose of reexamination, the Office will expedite the proceedings by taking the case up for action at the earliest possible time, setting shorter response times, and permitting extensions of time only upon a strong showing of sufficient cause. [MPEP 2286]

Effect of Concluded Litigation on Reexamination

A court decision holding that a patent claim is valid will not preclude the Office from continuing to reexamine such claim in an ex parte reexamination proceeding, even if the court decision is final and non-appealable. The Office applies the “broadest reasonable interpretation” for claim language in a reexamination proceeding, because claims may be amended during the proceeding. Courts apply a less liberal standard of claim interpretation, and therefore, the Office may conclude that a claim held valid in a court proceeding is unpatentable or invalid in an ex parte reexamination proceeding. [MPEP 2286]

A final, non-appealable court decision holding that a patent claim is invalid will preclude the Office from ordering any reexamination proceeding for such claim, or, will result in termination of any reexamination proceeding previously ordered as to such claim. [MPEP 2286]

It should be noted that with respect to inter partes reexamination, a final, nonappealable holding in litigation that a patent claim is valid may operate to estop a party from even requesting inter partes reexamination of that claim, or from maintaining a previously ordered inter partes reexamination of that claim. Estoppel may also operate to preclude a party who has obtained an Order Granting Inter Partes Reexamination of a patent claim from asserting invalidity of that claim in litigation under Section 1338 of Title 28 on grounds that such party raised, or could have raised, during that inter partes reexamination, if that claim has been finally determined to be patentable in the inter partes reexamination proceeding. [MPEP 2686.04(V)]

Notice of Intent to Issue Reexamination Certificate (NIRC) – Reexamination proceedings do not become “abandoned.” Rather, an NIRC is mailed to inform the parties that a reexamination proceeding has been terminated, whether by the failure of a party to timely file a required response, or by the natural resolution of all outstanding issues of claim patentability. The NIRC lists the status of all claims that were subject to reexamination, including any patent claims that have been canceled and any claims added during the proceeding that were not part of the patent that were reexamined and determined to be patentable. The NIRC also indicates which patent claims, if any, were not reexamined. An NIRC may include an examiner’s amendment, and must include reasons for confirmation of any patent claims that were determined to be patentable without amendment, and reasons for allowance of any amended patent claims or any newly added claims. [MPEP 2287]

Reexamination Certificate – A reexamination proceeding is concluded by publication of a reexamination certificate. The certificate amends the text of the patent that was reexamined, in a manner analogous to a certificate of correction. The Reexamination Certificate will contain the text of all changes to the text of the patent that was the subject of the reexamination proceeding. [MPEP 2288 and 2290]

Notice to the Public of Reexamination Certificate – Publication of a reexamination certificate is announced in the Official Gazette. [MPEP 2691]

En Banc Federal Circuit To Rehear Tafas v. Doll

Patent, Patent Cases 2009

Tafas v. Doll (en Banc) The Federal Circuit has granted Tafas & GSK’s petition for a rehearing en banc. This case focuses on the USPTO’s power to impliment rules restricting the number of ways an applicant can claim a single invention as well as the number of continuation applications that may be filed based upon an original patent application. Appellant’s briefs are due in early August (“thirty days” from July 6, 2009) and the opposing brief will be due within twenty days of that filing. Briefs of amici curiae must follow Fed. Cir. Rule 29 – and either obtain permission of the court or permission of all parties. Briefs in support of Tafas & GSK will be due “no later than 7 days after the principal brief of the party being supported is filed.”