Tag Archives: Federal Circuit En Banc

Written Description: Araid Petitions en banc Federal Circuit to Eliminate Separate Written Description Requirement

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

Ariad v. Eli Lilly (en banc suggestion 2009)

Ariad has petitioned the Federal Circuit for an en banc rehearing – boldly asking the court to eliminate the written description test as a distinct requirement of patentability under 35 USC Section 112, paragraph 1. The petition – drafted by Professors Duffy and Whealan – is essentially a well-formed collage of quotations from Federal Circuit dissents and 19th Century Supreme Court decisions.

The petition raises the following two questions:

(1) Whether this Court has erred by “engrafting . . . a separate written description requirement onto section 112, paragraph 1 …. ” Ariad Pharms., Inc. v. Eli Lilly & Co., 560 F.3d 1366, 1380 (Fed. Cir. 2009) (Linn, J., concurring).

(2) What is the proper test to satisfy the requirement in Section 112, paragraph 1, that a patent specification contain “a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same”?

Apart from the merits of this case, the brief notes that half of the Federal Circuit judges “have either voted to grant en banc review of this Court’s written description jurisprudence (Newman, Rader, Bryson, Gajarsa, and Linn, JJ.), or have expressly noted that future en banc review may be appropriate because this Court’s written description standards are unsatisfactory. (Dyk, J.).

Notes:

  • Ariad Brief: ariadrehearingpetition.pdf
  • Federal Circuit Decision
  • The original opinion was written by Judge Moore and joined by Judge Prost. Judge Linn wrote a concurring opinion as a reminder of his belief that the written description requirement should be eliminated and enablement be allowed to do its job.
  • Patent Docs has more.

Tafas v. Doll (En Banc Suggestion)

En Banc, Patent, Patent Cases 2009

Tafas v. Doll (En Banc Suggestion)

Both Tafas and GlaxoSmithKline (GSK) have filed petitions for en banc rehearing asking the Federal Circuit to stop the US Patent & Trademark Office (PTO) from implementing any of its proposed rules on continuations and claims.

The proposed rules can be split into two major categories: Rule 75 (requiring applicants to submit Examination Support Documents (ESD) to accompany any application that includes more than five independent or 25 total claims); Rule 78 (limiting applicants to two continuation applications absent a showing of need for more).

In a split decision, the Federal Circuit held that the limitations on continuations improperly conflict with 35 U.S.C. § 120, but that the remaining limits are "within the scope of the USPTO's rulemaking authority." (Limitations on RCEs do not create a problem).

In the motion for en banc rehearing, GSK raises the the questions of:

  1. Whether the Panel majority erred in rejecting the test for determining whether a Patent and Trademark Office ("PTO") rule is "substantive," as set forth in the controlling precedent of Chrysler, supra; Animal Legal Defense Fund, supra; and Cooper Technologies, supra.
  2. Whether the Panel majority erred in holding that the challenged Final Rules, 72 Fed. Reg. 46,716 (Aug. 21, 2007), fall within the PTO's limited, non-substantive rulemaking authority.

Tafas raises similar questions of whether the Federal Circuit:

  1. misapplied significant binding Supreme Court and Federal Circuit precedent concerning the correct standard for classifying administrative rules as "substantive" versus "non-substantive";
  2. failed, contrary to Supreme Court and Federal Circuit precedent, to fully consider evidence that the Final Rules significantly and adversely affect individual rights and obligations under the law;
  3. failed to correctly address, as required by Supreme Court precedent, the threshold question of whether the PTO has the jurisdictional authority under 35 U.S.C. § 2(b)(2) to enact the Final Rules; and
  4. misapplied Chevron deference to its improper determination that Final Rules 75, 265 and 114 were not "inconsistent with existing law".

The federal circuit majority opinion by Judge Prost included a dissent by Judge Rader (arguing that the rules are substantive) and a concurring opinion by Judge Bryson (arguing that the conflict with Section 120 only applies to continuations that are co-pending with the first-filed application).

The diversity of opinion here gives this case an excellent chance at being heard by the full 12-member court. The important administrative law issues will also be appealing to the Supreme Court when it comes time to petition for certiorari.

Appealing BPAI Rejections: Part I

Academic Studies, Articles and Publications, BPAI, Dissent, Patent

My keen research assistant Patrick Barnacle pulled up records on 56 ex parte patent appeals that have been decided by the Court of Appeals for the Federal Circuit since March 2005. All of these cases arise from rejections sustained by the USPTO’s internal Board of Patent Appeals and Interferences (BPAI). We are working to create a more complete database. In the meantime, I wanted to report some preliminary results on timing.

The median ex parte appeal took just over fifteen months to complete as measured from the date of the BPAI decision until the date of the Federal Circuit decision. As measured from the filing of the CAFC Notice of Appeal, the median appeal took exactly one year (365 days). Some appeals took longer: Comiskey, Ferguson, and Bilski each took more than two years from the NOA, but they were all tied to en banc decisions. About 25% of the appeals took less than ten months from the NOA.

Once oral arguments (if any) are complete, the Federal Circuit is rather quick at issuing an opinion. The median decision was issued 47 days after the oral arguments. (Again, a skewed average of 86 days is driven by the handful of en banc decisions) 30% of the decisions came within one week of oral arguments – most of those took one to two days.

We have not yet analyzed the correlation between delay and results, but it appears that especially quick decisions tend to favor the PTO over the applicant. As you might expect, delays in judgment correlate with longer opinions; opinions marked precedential; dissenting opinions; and opinions with Judge Newman on the panel.

En Banc Federal Circuit: Infringement of Product-by-Process Claim Requires Practicing the Process

En Banc, Method Claims, Patent, Patent Cases 2009,

Abbott Labs v. Sandoz (Fed. Cir. 2009) (en banc) 07-1400.pdf

The Federal Circuit had developed two opposing lines of cases for interpreting the scope of a product-by-process claim. Acting en banc sua sponte sub secretum, the appellate body sided with the Atlantic Thermoplatics line in holding that infringement of a product-by-process claim requires practicing the claimed process steps. This decision makes Judge Newman’s 1991 Scripps decision no longer good law. (Note, the en banc portion is only Section III.A.2).

[T]his court now restates that “process terms in product-by-process claims serve as limitations in determining infringement.”

The holding here explicitly focuses on claim construction for the purposes of infringement. Based on my first-pass, it appears that the court has left undecided whether this rule applies for validity purposes. I.e., can a product-by-process claim now cover a well known product made through a new process?

Notes

  • This is a very interesting decision and more analysis will be forthcoming.
  • Perhaps the most interesting portion of the decision is Judge Newman’s 39 page dissent.
  • Based on this Decision, generic Omnicef will continue to be available.

Design Patent Law: The New Ordinary Observer Test

Patent,

Sofpoool LLC v. Intex Recreation Corppic-31.jpg . (Fed. Cir. 2009)(Nonprecedential)

In Egyptian Goddess, an en banc Federal Circuit eliminated the points of novelty test as a separate requisite test of infringement of a design patent. Rather, the court held that design patent infringement should be determined based on the “ordinary observer test” — a test that originated in the 19th century Gorham case.

In Sofpool, a pre-Egyptian Goddess District Court asked a jury to determine infringement based on both the points of novelty test and the ordinary observer test. As expected in essentially all point of novelty cases, the jury returned a verdict of noninfringement.

On appeal, the Federal Circuit vacated. The interesting portion of this opinion stems from the patent holder’s request that the appellate court issue a judgment of infringement. During trial, Intex admitted that its design might infringe under the ordinary observer test. The Federal Circuit disregarded that admission and broke from tradition by noting that Egyptian Goddess created a “new” ordinary observer test. Thus, the prior admission does not satisfy the new test.

Sofpool argues that it “is entitled to an instruction on remand that the ’817 patent is infringed, because both Intex’s expert and its attorney conceded that the accused design satisfied the ordinary observer test.” We disagree. Although Intex acknowledged that its oval pool might infringe the ’817 patent under the ordinary observer test as it existed prior to Egyptian Goddess, Intex has never conceded that its oval pool infringes under this court’s newly articulated ordinary observer standard.

Attorneys will need to work-out how this decision meshes with the statement in Egyptian Goddess that the court was reviving the Gorham test:

From Egyptian Goddess: [I]n accordance with Gorham and subsequent decisions, we hold that the “ordinary observer” test should be the sole test for determining whether a design patent has been infringed.

If anything, Egyptian Goddess changed the Gorham test by stating that similar prior art may be used to “highlight[] the differences between the claimed and accused design.”

Obviousness-Type Double Patenting and Splitting Ownership (CAFC Says Don’t Do It)

Obviousness, Patent, Patent Cases 2009,

In re Fallaux pic-29.jpg (Fed. Cir. 2009) 08-1545.pdf

The Fallaux family of patents began with a PCT filing in June 1995. The first US patent issued in November 1999. Three more patents issued from continuation applications in 2001, 2003, and and 2006. The application at issue here was filed in 2003.

The PTO’s appellate board – the BPAI – rejected the most recent application under the judge-made doctrine of obviousness-type double patenting. Obviousness-type double patenting is equitable in nature and operates as a mechanism to prevent “unjust extension of patent exclusivity beyond the term of a patent.” Thus, an obviousness-type double patenting rejection requires a link between the two applications – either in terms of inventorship or ownership. The doctrine is only relevant when a prior patent cannot be considered prior art as defined by Sections 102 and 103(a) of the Patent Act. (If it is prior art, then the reference is applied under those statutory provisions.)

The change in the patent term and publication of pending applications eliminated most of the need for this judge-made regime. Because patent term is calculated from the filing date, it is now difficult to extend the term while claiming priority. Likewise, published applications ordinarily create a statutory bar that operates to prevent an applicant from extending the term by not claiming priority to an earlier filing. Here, the Federal Circuit recognized the significance of the change in the law, but was not prepared at this juncture to eliminate the doctrine.

It is true that the unjustified patent term extension justification for obviousness-type double patenting has limited force in this case. Indeed, this is surely true of many double patenting rejections today, in no small part because of the change in the Patent Act from a patent term of seventeen years from issuance to a term of twenty years from filing. … Nonetheless, we do not think that we may disregard all of our cases relying on this justification for obviousness-type double patenting. In some cases there may still be the possibility of an unjust time-wise extension of a patent arising from patent term adjustment under § 154 or patent term extension under § 156.   

Furthermore, there is a second justification for obviousness-type double patenting—harassment by multiple assignees. … The harassment justification for obviousness-type double patenting is particularly pertinent here because the Fallaux application and the Vogels patents are not commonly owned.

Of course, careful Patently-O readers will realize that the Court’s use of mismatched patent term extensions as a justification for a double patenting rejection does not sit well with the law. In 2007, the Federal Circuit in Merck v. HI-TECH held that the patent term extension should apply to further extend the patent term despite a terminal disclaimer. Id. (Holding that a patent term extension under the Hatch-Waxman Act, 35 U.S.C. § 156, may be applied to a patent subject to a terminal disclaimer under 35 U.S.C. § 253, filed to overcome an obviousness-type double-patenting rejection.) The dicta of this Fallaux decision will tend to confuse the issue.

Common Inventorship: As the court notes, in this case, the double patenting rejection is based on second patent family. Both families list multiple inventors, and the link between the families is a single common inventor. Originally, the families were commonly owned by IntroGene, but some of the patents were assigned to Crucell and others to Galapagos Genomics.

No Common Ownership: The division of ownership rights here puts the applicant in a bind. Notably, it could not file a terminal disclaimer because the prior patent and the pending application were not commonly owned.

One Way versus Two Way Test: In most obviousness determinations, the examiner applies a “one way test” – asking “whether the application claims are obvious” over the prior art. This same approach is used in obviousness-type double patenting except that the prior patent is generally not considered “prior art.” More particularly, because the focus is on extending patent term, the question is whether the pending claims are only obvious variations of the already patented claims. Occasionally, courts have required a more stringent two-way test where the examiner additionally considers “whether the patent claims are obvious over the application claims.”

The two way test can be required if the PTO “is at fault” for a delay that causes an improvement patent to issue prior to the basic patent. Here, the court agreed with the PTO that

Dr. Fallaux was entirely responsible for the delay that caused the Vogels patents to issue prior to the filing of the Fallaux application. . . . there [is no] evidence to suggest—that the PTO shared any responsibility for the delay. . . . Dr. Fallaux elected to prosecute other applications and delay filing the Fallaux application [for] six years after the [original US] application was filed. During this six year period, the Vogels patents were filed for and issued. In view of the Board’s fact findings, we hold that the PTO was not responsible for the delay.

Because the PTO had not caused the delay in prosecution, it could apply the less stringent one-way test of obviousness. And, as a consequence, the Federal Circuit affirmed the rejection.

Notes:

  • The Fallaux panel of Judges Schall, Archer, and Moore* have no overlapping authors with the Merck v. HI-TECH panel of Judges Linn*, Friedman, and Plager. The direct contradiction of this case and the dramatic shift in the statutory law opens it to en banc rehearing.
  • Patent term adjustments (due to PTO delay) are definitely limited by terminal disclaimers. Meck (“Section 154(b)(2)(B) expressly excludes patents in which a terminal disclaimer was filed from the benefit of a term adjustment for PTO delays.”).

Federal Circuit Revises: Amgen v. ITC

Patent, Patent Cases 2009

Amgen v. ITC and Roche Diagnostics (Fed. Cir. 2009).

Issues: FDA Safe Harbor; Joint Interpretation of Patent and Tariff Act; ITC Jurisdiction

Section 271(e)(1) of the Patent Act excuses would-be infringing uses of a patented invention that “reasonably relate to the development and submission of information under a Federal Rule which regulates the manufacture, use, or sale of drugs or veterinary biological products.” The language of the provision is that those activities will not be considered “act[s] of infringement.” In its 2005 Merck decision, the Supreme Court indicated a policy preference for broadly interpreting the exception in order to encourage drug development and FDA approval. Patent cases at the International Trade Commission (ITC) do not derive their authority from the Patent Act. Rather Section 337 of the Tariff Act (19 USC § 1337) authorizes the ITC to halt imports of articles that either (i) “infringe a valid and enforceable US patent” … or (ii) are made … by means of, a process covered by the claims of a valid and enforceable US patent.”

The distinction came to light in Kinik (Fed. Cir. 2004). In that case, the Federal Circuit distinguished between the Patent Act and the Tariff Act with regard to importation of a product made by a patented process. Section 271(g) of the patent act includes the caveat such importation is not infringement if the product is “materially changed by subsequent processes.” The court held that caveat did not apply to ITC cases based on the differences in the statutes and the explicit limitation in the Patent Act that the 271(g)(1) caveat applied “for the purposes of this title.”

In Amgen, Roche hoped to claim immunity under Section 271(e)(1) for its research use of imported EPO. Thus, when the Amgen case arose, the Federal Circuit was forced to decide between the statutory distinctions highlighted in Kinik and the Supreme Court’s broad reading of the 271(e)(1) defense. In their 2008 decision, the appellate panel (led by Judge Newman) held that the 271(e)(1) safeharbor applies to the ITC action.

Following the 2008 decision, Amgen petitioned for a rehearing en banc. After some apparent inter-chamber negotiations, the court sitting en banc has vacated the 2008 decision and the original panel has issued a revised opinion. The new opinion again confirms that the 271(e)(1) defense applies to ITC actions. Instead, the new opinion removes all discussion of whether the ITC has jurisdiction over non-sales based “imminent importations” except to note that resolution of that dispute was “not necessary … to decide this case.” (Here, Amgen’s allegations that Roche had imported IPO was sufficient to create subject matter jurisdiction.)

“In this case, the Commission had jurisdiction as a result of Amgen’s allegation that Roche imported an article made by a process covered by the claims of a valid and enforceable United States patent. See 19 U.S.C. § 1337(a)(1)(B)(ii). The Commission therefore was correct to reach the merits of Amgen’s claim. We need not and do not address whether the Commission would have had jurisdiction if Amgen had not asserted actual importation and relied instead entirely on its “imminent importation” theory.”

The ITC previously held that it did not have jurisdiction without an “importation, sale for importation, or sale within the US after importation.”

On remand, the ITC must determine “whether all of the EPO that Roche imported was entitled to the protection of the safe harbor.”

Judge Linn’s dissent remains unchanged. He argues that the plain language of 271(e)(1) cannot be read to extend to excuse imports of products made by patented process since that activity is not defined as “infringe[ment]” under Section 337.

Guest Post: Ten Reasons the Supreme Court Should Take In re Bilski

Patent,

Erika Arner is the co-author of the Bilski petition for certiorari challenging the Federal Circuit’s limits on the patentability of method claims. She handles patent prosecution and litigation at Finnegan Henderson in DC. I asked Ms Arner to write this post.

The Time Has Come – Nearly thirty years have passed since the Supreme Court addressed patentable subject matter.  The “BFD” cases─Gottschalk v. Benson (1972), Parker v. Flook (1978), and Diamond v. Diehr (1981)─represent modern doctrine on the scope of patentable processes under 35 U.S.C. § 101.  Yet these cases were handed down before the Internet and personal computer fundamentally changed the way Americans live, work, and innovate.  In their struggle to apply the BFD cases to cutting-edge inventions, the PTO and courts have whittled away at the scope of section 101.  The time has come for the Court to reaffirm that the broad, flexible approach to section 101 set forth in the BFD cases applies with equal force in today’s information age. 

Third Time’s The Charm – The Supreme Court declined its last two opportunities to update its jurisprudence on section 101 and process claims.  In 1999, the Court denied cert. in State Street Bank, which applied the “useful, concrete, and tangible result” test to determine when a claim contains a patent-eligible practical application of a fundamental principle.  That same year, the Court declined to review AT&T v. Excel, but indicated that the section 101 issue had garnered at least some interest on the Court.  Justice Stevens filed a statement on the denial of cert. in AT&T v. Excel, noting that “[t]he importance of the question presented” made it appropriate to reiterate that a denial of cert. is not a ruling on the merits. 

Justice Stevens Is Not Alone – In addition to the statement filed in AT&T v. Excel, several justices have found opportunities to express interest in section 101 issues.  When the Court dismissed cert. in LabCorp v. Metabolite, Justice Breyer dissented, joined by Justices Stevens and Souter.  In the dissenting opinion, Justice Breyer called into question the “useful, concrete, and tangible result” test for patentable processes, arguing that “if taken literally” the test would conflict with Benson and Flook.  These three justices were joined by Justice Kennedy in a concurrence filed in eBay v. MercExchange(2006), criticizing the “potential vagueness and suspect validity” of business method patents.  Clearly, there is interest among at least some of the justices in the state of section 101. 

The PTO Picked Bilski – When the PTO began examining Mr. Bilski’s patent application, prosecution progressed as usual.  Prior art was searched and applied, claims were amended, new prior art was cited, and several claims were allowed.  Then suddenly, the examiner changed position, withdrawing the remaining prior art rejections and the claim allowances and instead rejecting all of the claims under the now-obsolete “technological arts” test for section 101.  An expanded panel of the PTO Board affirmed the rejection in a 70-page “informative” opinion setting forth a version of the machine-or-transformation test.  The PTO seemingly chose Bilski as the vehicle to reverse its position set forth in the prior year’s “precedential” decision in Ex parte Lundgren, which allowed business method claims with no tie to a computer or physical transformation. 

The Federal Circuit Picked Bilski – At the Federal Circuit, Mr. Bilski’s case progressed normally at first.  Briefs were filed; oral arguments were held.  But before the panel rendered its decision, the court ordered that the appeal would be heard en banc “in a long-overdue effort to resolve primal questions on the metes and bounds of statutory subject matter” according to Judge Mayer.  In its en banc Order, the court invited briefing from the parties and the public on five questions ranging from whether Bilski’s claims were patent-eligible under section 101 to what standard should govern the patent-eligibility of a process.  The court also took the extraordinary step of inviting two representatives of amicus parties to participate in the en banc oral arguments.  Clearly, the court decided that Bilski was the case to resolve the very “primal” question of when a process is patentable under section 101. 

The Patent Community Picked Bilski – When invited to file amicus curiae briefs to the en banc Federal Circuit in In re Bilski, the patent community and the public at large responded in force.  Thirty-eight briefs were filed representing wildly different points of view on the proper interpretation of section 101.  Briefs were filed by large organizations and small, by teams of academics and by individuals, by corporate patent owners and patent practitioners, and by industry groups ranging from software and biotechnology to the ACLU.  These assorted parties with their divergent points of view seem to agree on one thing: In re Bilski presents the perfect vehicle to address the proper scope of section 101. 

The En Banc Bilski Decision Is the Closest We Get to a Patent Circuit Split – Three dissents and a concurrence accompanied the 9-judge majority opinion.  Regarding the majority’s machine-or-transformation test, the dissenting opinions varied just as widely as the amicus briefs had.  Judge Mayer argued that the court should go farther to restrict section 101 and overrule State Street Bank andAT&T.  At the other extreme, Judges Newman and Rader filed separate dissents arguing for a broad, flexible application of section 101 to accommodate the innovations of today’s knowledge economy.  The divergence of opinions on the en banc court is akin to the “circuit split” that often signals the need for the Supreme Court to step in. 

The Issue in Bilski is Fundamental to the Patent System and the U.S. Economy – The proper scope of patentable subject matter under § 101 is not only important to the nation’s economy, it is “one of the broadest, most sweeping issues in patent law,” according to Judge Moore in her dissent from en banc rehearing in In re Comiskey (2009).  The importance of this issue is highlighted by the filing of nine amicus curiae briefs in support of the petition for cert.  This level of amicussupport at the cert. stage is the highest in a patent case since Festo, where nine briefs were filed at the cert. stage.  For example, only three briefs were filed in support of the petition for cert. in KSR and six were filed at the cert. stage in eBay.   

The Machine-or-Transformation Test Conflicts with Supreme Court Precedent – Although the Supreme Court has twice expressly declined to hold that the machine-or-transformation test is the “only test” for patentable processes under § 101, the Bilski court did just that.  Indeed, the court acknowledged some doubt about its interpretation of Supreme Court precedent and recognized that the Supreme Court “may ultimately decide to alter or perhaps even set aside this test to accommodate emerging technologies.”  In re Bilski. 

The Supreme Court Does Not Like Rigid Tests for Patents – When the Supreme Court has set forth a flexible approach to interpreting the Patent Act, they are prone to overruling attempts to define a rigid “bright line” test.  Festo and KSR are two examples of the high Court reversing an attempt by the Federal Circuit to establish a bright line test when the flexible approach of earlier Supreme Court cases was difficult to apply.  In those cases, the Court instructed the Federal Circuit to return to the flexible, case-by-case analysis required by its precedent.  The Federal Circuit’s “definitive” machine-or-transformation test should meet the same fate.

Inequitable Conduct: Trends at the Federal Circuit

Academic Studies, Articles and Publications, Inequitable Conduct, Patent,

In Larson Mfg, Judge Linn revived the call to rebuild the ramparts protecting patent applicants against charges of inequitable conduct. For some sense of history, I used Westlaw to pull-up the past twenty-five years of Federal Circuit decisions and counted the number of decisions that at least mention “inequitable conduct.” The result is a clear increase in the number of decisions discussing inequitable conduct. Although the absolute number of Federal Circuit patent decisions has also risen somewhat, the growth rate of IC decisions greater.

The graph below shows the number of Federal Circuit decisions that at least mention “inequitable conduct” for each year 1984-2008.

200903191000.jpg

2009 may buck the trend. As of March 19, 2009, only two decisions mentioned inequitable conduct (Larson Mfg., and Rothman). At that rate, we might project only nine or ten decisions for the entire year.

I use the ‘mention’ of inequitable conduct here because the stated ‘plague’ primarily focuses on the allegations of inequitable conduct. The mere allegations of inequitable conduct are certainly harmful to the patentee. However – more than that – they are harmful to the profession and to the patent system as a whole by continually suggesting that patent attorneys and patent agents are facilitating fraudulent activities.

Judge Linn Calls for En Banc Restatement of the Law of Inequitable Conduct

En Banc, Inequitable Conduct, Patent, Patent Cases 2009, ,

Larson Mfg. Co. v. Aluminart Products Ltd. (Fed. Cir. 2008)

Larson's patent covers a specially designed outside. The appeal focuses on inequitable conduct and the Federal Circuit vacated a district court judgment that the asserted patent was unenforceable. I will return to the decision in a later post, but wanted to focus attention on the concurring opinion by Judge Linn and his call for an en banc review of inequitable conduct jurisprudence. Linn's concerns could be addressed by the Supreme Court in Aventis Pharma v. Amphastar Pharmaceuticals, which is pending certiorari.

I write separately … to express my view that this precedent has significantly diverged from the Supreme Court's treatment of inequitable conduct and perpetuates what was once referred to as a "plague" that our en banc court sought to cure in Kingsdown Medical Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988) (en banc). …

Symptoms of this plague are apparent from the facts of this case. The patent-in-suit has undergone examination twice in the PTO, and the patentee has been accused of inequitable conduct on each occasion for allegedly withholding material information. During original prosecution, the PTO considered 143 references, 135 of which the submitted two more IDSs in the reexamination, each within approximately one month of the application's Office Actions. The IDSs contained all references relied on in those rejections but did not include the Office Actions themselves. With full knowledge of the co-pending application, the PTO confirmed the patent, which survived reexamination without substantive change to the litigated claims. When the litigation resumed, the accused infringer again charged the patentee with inequitable conduct, this time based on conduct in the reexamination. This second inequitable conduct allegation was the sole issue at trial. Following remand today, the litigation will continue to focus on inequitable conduct, to the exclusion of the patentee's infringement contentions.

The ease with which inequitable conduct can be pled, but not dismissed, is a problem of our own making. The Supreme Court's three inequitable conduct cases involved overt fraud, not equivocal acts of omission. Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 809, 819 (1945) ("patent claims infected with fraud and perjury" where assignee knew that its employee "gave false dates as to the conception, disclosure, drawing, description and reduction to practice" during interference proceeding and then "secured the perjured . . . application and exacted promises from the other parties never to question the validity of any patent that might be issued on that application"); Keystone Driller Co. v. Gen. Excavator Co., 290 U.S. 240, 243 (1933) (false affidavits and deposition testimonies obtained "for valuable considerations" averring that the prior art use "was an abandoned experiment" and "to keep secret the details of the prior use"); Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 240, 243 (1944) (false trade article procured from "an ostensibly disinterested expert" in exchange for $8,000 to gain patent issuance in spite of previously "insurmountable Patent Office opposition"), overruled on other grounds by Standard Oil Co. v. United States, 429 U.S. 17 (1976).

We clarified en banc that the "two elements, materiality and intent, must be proven by clear and convincing evidence," and that "'gross negligence' does not of itself justify an inference of intent to deceive." Kingsdown. But in seeming contradiction with Kingsdown, a standard even lower than "gross negligence" has propagated through our case law. This standard permits an inference of deceptive intent when "(1) highly material information is withheld; (2) 'the applicant knew of the information [and] . . . knew or should have known of the materiality of the information; and (3) the applicant has not provided a credible explanation for the withholding.'" Praxair, Inc. v. ATMI, Inc., 543 F.3d 1306, 1313-14 (Fed. Cir. 2008).

This test is problematic. First, the "high materiality" prong of the intent element simply repeats the materiality element. Conflating materiality and intent in this manner is inconsistent with the principle that "materiality does not presume intent, which is a separate and essential component of inequitable conduct." Manville Sales Corp. The second, "should have known" prong sets forth a simple negligence standard, lower even than the "gross negligence" standard that was expressly rejected in Kingsdown. I also question whether a fact-finder who has deemed information to be "highly material" would not also be compelled to conclude that a reasonable patentee "should have known of the materiality," at least when the patentee "knew of the information," as prong two requires. Third, the "credible explanation" prong effectively shifts the burden to the patentee to prove a negative: that it did not intend to deceive the PTO. But it is the "accused infringer"—not the patentee—who "must prove by clear and convincing evidence that the material information was withheld with the specific intent to deceive the PTO." Star Scientific, Inc. As to this third prong, we have also explained that "[t]he patentee need not offer any good faith explanation unless the accused infringer first carried his burden to prove a threshold level of intent to deceive by clear and convincing evidence." Id. As explained above, however, the first two prongs are not evidence of deceptive intent. The first is evidence of materiality; the second is evidence of negligence. These two prongs are therefore insufficient as a matter of law to establish a clear and convincing "threshold level" of deceptive intent before the third prong can ever properly come into play.

As it now stands, the test generally permits an inference of deceptive intent to be drawn whenever the three prongs are satisfied. This is in tension with the rule in Star Scientific that "the inference must not only be based on sufficient evidence and be reasonable in light of that evidence, but it must also be the single most reasonable inference able to be drawn from the evidence." Id. It cannot be said that deceptive intent is the "single most reasonable inference" when all that prong two shows is that the patentee "should have known" that the information was material. An equally reasonable inference under this test is that the patentee incorrectly believed that the information was not material, or that the patentee was negligent, or even grossly negligent. None of these gives rise to deceptive intent under Kingsdown, nor is deceptive intent the "single most reasonable inference" under Star Scientific.

For the foregoing reasons, I respectfully submit that the test for inferring deceptive intent, as it currently exists, falls short of the standard "need[ed] to strictly enforce the burden of proof and elevated standard of proof in the inequitable conduct context." Star Scientific. The facts of this case suggest that the time has come for the court to review the issue en banc.

Cardiac Pacemaker v. Jude: En Banc Challenge to 271(f) Liability for Components of a Method

Patent

Cardiac Pacemakers v. St. Jude Medical (en banc 2009)

Patent law is ordinarily considered territorial. Infringement of a US patent normally requires practicing an entire patent claim within the US. 35 U.S.C. § 271(f) details an exception to the rule that creates a cause of action for patent infringement for the action of supplying components of a patented invention to be assembled abroad. The Court of Appeals for the Federal Circuit has announced that it will hear a 271(f) case en banc to determine whether “35 U.S.C. § 271(f) appl[ies] to method claims, as well as product claims.”

The case is set for the Court to provide a resounding answer: “No, Section 271(f) does not apply to method claims.”

The statute in question reads as follows:

271(f)(1) Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.

In the 2005 Union Carbide decision, the Federal Circuit interpreted 271(f) to encompass method claims. Thus, in that case, Shell was properly held liable for exporting a catalyst to be used abroad to practice the method in a foreign facility Union Carbide is the specific precedent followed by the three member Cardiac Pacemaker panel. Then, in the 2007 Microsoft v. AT&T decision, the Supreme Court found that 271(f) does not extend to cover foreign duplicated software – i.e., that the software in the abstract is not a “component.” Part of the Supreme Court’s justification for its narrow interpretation of 271(f) was based on the traditional presumption against extraterritorial application of US laws.

The court welcomes Amicus briefs on the subject.

Patentable Subject Matter Redux: Bilski 2009

Patent, ,

In February 2009, the Board of Patent Appeals (BPAI) issued nine decisions that touched on Bilski and patentable subject matter under Section 101 of the Patent Act. In eight of the cases, the BPAI either affirmed an examiner’s Section 101 rejection (five cases) or entered a new ground of rejection under Section 101 (three cases). In the remaining case, the BPAI remanded – asking the examiner to consider wether the claims were patentable under Section 101. All nine cases were related to software or electronics type applications.

In Ex Parte Motoyama, Appeal 2008-2753 (Bd. Pat. App. Int., Feb. 27, 2009), for instance, the BPAI reversed an examiner’s Section 103(a) obviousness rejection, but entered a new ground of rejection as failing the Bilski test of patentable subject matter under Section 101 of the Patent Act. The Motoyama claim (owned by Ricoh) reads as follows:

1. A method for a monitoring device to obtain an identifier of a monitored device, comprising:  obtaining manufacturer information of the monitored device using a hierarchical approach by comparing a response to a query of the monitored device to an anticipated response; accessing the monitored device using a first method to attempt to obtain the identifier using the manufacturer information; if the identifier is not obtained in the accessing step, obtaining a MAC address of the monitored device as the identifier; if the MAC address is not obtained, generating the identifier using a second method; and storing the identifier of the monitored device for use by the monitoring device.  

The panel recognized that the claim language did refer to a “monitoring device.” However, according to the BPAI, the method “is not recited in terms of hardware or tangible structural elements. Rather, the method could be implemented on a software system, where the elements of claim 1 are implemented solely in software or algorithms. Thus, the nominal recitation of “for a monitoring device” in the preamble does not transform claim 1 into patentable subject matter under 35 U.S.C. § 101.” Likewise, none of the steps call for transformation of an article.

Although the BPAI’s focus on Bilski has been primarily in software applications, there are many that see a potential for Bilski to spill-over into other areas of technology. Right on this frontier are applications focusing on methods of diagnosing. Filing a couple of days early, Medistem has submitted its brief supporting certiorari in the Bilski case. (Briefs in support of certiorari are due Monday, March 2, 2009). Medistem explains to the court Bilski also limits they types of patents that it can obtain over newly invented predictive tests

The Federal Circuit’s limiting the scope of patentable subject matter for “process” inventions in Bilski casts a cloud of uncertainty as to whether Medistem and other biotech companies can continue to protect with patents their inventions relating to methods of diagnosing causes of diseases and methods of selecting beneficial treatment protocols. Medistem fears that should biotech companies lose the ability to obtain enforceable patent protection on diagnostic and treatment methods, the ability to attract investment capital will sharply decline, and as a direct result the incentive to search for better ways to diagnose causes of diseases and find more effective treatments will decline. Medistem is not alone in its view. Addressing this issue in his dissent from the en banc court’s opinion, Circuit Judge Rader cogently noted that excluding patent protection for methods of using discovered biological or physiological correlations will “undermine and discourage future research for diagnostic tools.” Bilski, 545 F.3d at 1014.

Medistem’s primary problem with the Bilski test is that it is the “exclusive test” for determining patent-eligibility of claimed processes. In that sense, the company argues, the rule limits the statute beyond prior Court precedent and beyond Congressional intent.

Notes

Federal Circuit Takings Case: Set Up for Supreme Court Review

Patent, Patent Cases 2009, Takings, ,

Casitas Municipal Water v. US (Fed. Cir. 2009) (en banc denial) (MAYER, SCHALL , and MOORE*)

Casitas is not a patent case, it is a takings case involving regulatory restrictions on water use imposed by US Government. The Federal Circuit has jurisdiction over this takings claim against the US Government because it is on appeal from the Court of Federal Claims (CFC). Although the Federal Circuit has denied the Federal Government’s motion for en banc rehearing, a set of diverging opinions sets this case in position for likely Supreme Court review.

History: The Ventura River Project provides water supply to Ventura County, California. In 1956, the US Government granted the local government the “perpetual right to use all water that becomes available through the construction and operation of the Project.” Then, in 1997, steelhead trout living in the Project became an endangered species under the Endangered Species Act (ESA), and the US Government required that Casitas construct a fish ladder and divert water over the fish ladder. Casitas complied, but filed suit in the CFC alleging that the Federal Government had taken its property without just compensation (and also under breach of contract). The CFC classified the Government action as “regulatory” rather than a “physical.” In takings law, compensation for regulatory takings is much more difficult to obtain, and Casitas admitted that it could not prove the required elements. This conclusion followed the Federal Government argument that “it did not seize, appropriate, divert, or impound any water, but merely required water to be left in the stream.”

Appeal: On appeal, the Federal Circuit reversed. Writing for the majority, Judge Moore concluded “that the government physically appropriated water that Casitas held a usufructuary right in.”

Here, the government admits for the purposes of summary judgment that it required Casitas to build the fish ladder facility, which is a man-made concrete structure that was not a portion of the existing … The government also admits that the operation of the fish ladder required water, which prior to the fish ladder’s construction flowed into the Casitas Reservoir … Specifically, the government admits that the operation of the fish ladder includes closing the overshot gate …and that the closure of this gate causes water that would have gone into the Casitas Reservoir via the Robles-Casitas Canal to be diverted into the fish ladder. … These admissions make clear that the government did not merely require some water to remain in stream, but instead actively caused the physical diversion of water away from the Robles-Casitas Canal … and towards the fish ladder, thus reducing Casitas’ water supply.

In dissent, Judge Mayer rejected the physical takings argument. At base, he argued, Casitas does not actually own the water. Rather, under California law, all water sources within California “belong to the public.” Even if Casitas did own the water flow, Mayer would have seen the endangered species requirements as regulatory because the requirements simply force a specific use of the water rather than take it away.

En Banc Rehearing: In what looks like a 7-5 (or 6-6) vote, the Federal Circuit denied a rehearing en banc. Judge Moore wrote a new opinion defending her original approach in the original opinion. In particular, Judge Moore focused on the “facts as presented” in the case. “[T]he government conceded (1) that Casitas had a property right in the water diverted from the Ventura River, and (2) that the government required Casitas to build and operate the fish ladder in such a way as to permanently appropriate water in which Casitas had the conceded property right.” Based on those two facts, the holding of a physical takings was easy.

Judge Gajarsa would have heard the case en banc. Gajarsa (joined by Chief Judge Michel and Judge Dyk) saw the taking as clearly regulatory in form because nothing had actually been taken by the US Government.

This denial implicates fundamental questions regarding takings law. The panel majority’s opinion suggests that a government action can be construed to be a physical taking even if no physical proprietary interest has actually been taken by the United States. This is contrary to present Supreme Court law and contrary to our case law. Accepting this analysis of the panel majority eliminates the fine distinction and balance that has been established by the Supreme Court between physical and regulatory takings. Moreover, it eliminates the ability of the legislature to provide for limited and parsimonious legislation protecting endangered species.

Notes:

  • Republican vs. Democrat: Moore’s position is clearly one of stronger property rights while Gajarsa/Mayer’s position is in favor of regulatory power of the government. It appears that this decision falls along political lines. Those thinking of the regulation as a physical taking (Moore, Schall, Rader, JJ) are all Republican appointees. Three of the five thinking of the regulation as regulatory in nature are Democratic appointees (Linn, Dyk, Gajarsa, JJ are all Clinton appointees; Michel, CJ, and Mayer, J, are Reagan appointees). At least three of the four other judges voted to deny a rehearing. Of those four, three are Republican appointees (Newman, Lourie, Prost, JJ, are all Republican appointees; Bryson, J, is a Clinton appointee). As you can see here, eight of the twelve active Federal Circuit judges are Republican appointees.
  • En Banc Denial
  • Original CAFC Opinion: Casitas Mun. Water Dist. v. United States, 543 F.3d 1276 (Fed. Cir. 2008).
  • Original CFC Opinion

Cardiac Pacemaker v. Jude: Challenging 271(f) Liability for Components of a Method

CAFC, En Banc, Patent, Patent Cases 2009, Transnational

Cardiac Pacemakers v. St. Jude Medical (On motion for en banc rehearing)

35 U.S.C. § 271 defines various types of patent infringement including direct infringement and contributory infringement. Section 271(f) details a special cause of action that captures some transnational activities. In particular, Section 271(f) creates a cause of action for supplying components of a patented invention to be assembled abroad.

In 2007, the Supreme Court ruled on a 271(f) case — finding that software per se cannot be considered a “component” under the statute. Microsoft v AT&T, 550 U.S. 437 (2007). In December 2008, the Federal Circuit decided Cardiac Pacemaker and held that the Microsoft v. AT&T did not overrule a prior precedential ruling that Section 271(f) does extend to cover components of a claimed method. “[T]he Supreme Court’s decision does not alter [the] holding” that “271(f) applies to components used in the performance of patented methods and processes.” The precedent in question is Union Carbide v. Shell. Although the Federal Circuit denied a request to rehear the Union Carbide case, Judges Lourie, Michel, and Linn, argued then that the issue was ready for en banc review. Judge Dyk also dissent from the en banc denial in Union Carbide.

In their decision, the panel (Judges Newman, Mayer, & Lourie) practically begged for en banc rehearing: “As a panel, we cannot reverse the holding of another panel of this court. We thus affirm the district court’s decisions relating to damages.” [Link] Of course, Judge Mayer signed-on to Judge Rader’s original Union Carbide opinion.

Now, the defendant (St. Jude) has asked for a rehearing en banc. If unsuccessful, we can expect a petition for a writ of certiorari. The FCBA and AIPLA joined forces in an amicus brief supporting the rehearing en banc and for a reversal of the Union Carbide analysis. Writing on behalf of Cisco, Intel, Microsoft, Oracle, and Symantec, Ed Reines also argues that the rule should be overturned. The tech companies argue in particular that the limit on exports creates major adverse economic incentives.

“A very common business arrangement is for United States companies to export instructions, materials, recipes, and other knowledge-exports to Asian and other off-shore locations where manufacturing processes takes place. An overbroad extraterritorial interpretation of § 271(f) to apply to process patents creates potential worldwide liability for companies based in the United States that export anything that can properly be considered a process step. Yet, if their competitors exist outside the United States, they are not exposed to liability for United States patent infringement for supporting foreign manufacturing processes.”

A good handful of judges have at least loosely indicated that they would support an en banc rehearing — making this a very likely candidate.

Notes:

Briefs:

Classen v. Biogen: Request for Rehearing

Patent, Patent Cases 2009, Patentable Subject Matter

In Classen v. Biogen, the Federal Circuit issued a one paragraph non-precedential opinion rejecting Dr. Classen's claimed method for evaluating a vaccine immunization schedule. The problem with the claims stems from the Bilsmane or transformation test. The appellate panel found that "the claims are invalid under 35 U.S.C. § 101. Dr. Classen's claims are neither "tied to a particular machine or apparatus" nor do they "transform[] a particular article into a different state or thing." Bilski, 545 F.3d at 954."

Now, Classen has filed its request for a rehearing en banc and is looking for further amicus support. The brief cites only one case — Bilski — and argues the facts: that at least the claim limitation of "immunizing mammals" is a qualifying transformation of matter.

Notes:

The Exodus: Following TS Tech, Patent Lawsuit Transferred from E.D. Texas to Oregon

Jurisdiction, Patent, Patent Cases 2009,

A few days ago I was discussing TS Tech with a patent law guru. I suggested that TS Tech would not have a major impact on the location of patent cases – largely because local judges still retain a large amount of discretion in determining whether another venue is more convenient. . . . What do I know.

Odom v. Microsoft (E.D. Tex, Jan 30 2009)

Famed patent blogger Gary Odom sued Microsoft in the Eastern District of Texas – alleging that the Office 07 toolbar infringes Odom's software patent. Judge Love was assigned the case — but now he has granted Microsoft's motion to transfer the case to Oregon. You see, Odom is located in Oregon, Microsoft in Washington, the Klarquist firm (who once worked with both Odom and Microsoft) is in Oregon.

Judge Love relied on the Federal Circuit's TS Tech (J. Rader) opinion and the 5th Circuit's VW opinion (en banc) in determining that the suit should continue in the Northwest rather than Texas.

Under the circumstances presented here, the convenience of witnesses and localized interests weigh in favor of transfer with the other factors neutral or weighing slightly in favor of transfer. This is a case that is significantly localized in the Northwest. Both parties are residents of the Northwest, and Microsoft’s equitable defenses all arise out of conduct and contracts in the Northwest. No Texas resident is a party to this litigation, nor is any Texas state law cause of action asserted. All identified witnesses—with the possible exception of one—are located in the Northwest. This is not a case where witnesses are expected to be traveling from all over the country or world. In summary, there is little convenience to the parties for this case to remain in Texas, while there are several reasons why it would be more convenient for the parties to litigate this case in Oregon.

Case transferred.

Notes:

  • Order to transfer order to transfer from texas
  • E.D. Texas Blogger Michael Smith has more details
  • It remains to be seen if Judges Ward and Davis follow suit.
  • In the opinion, Judge Love did distinguish some portions of TS Tech. Importantly, much of the likely evidence is in electronic form. The court found that the physical location of the servers holding that electronic evidence did not impact the inconvenient forum analysis.

The BPAI and the Machine or Transformation test of Bilski

BPAI, Patent

In three recent cases, the BPAI has continued its trend of applying the Federal Circuit’s en banc Bilski decision to reject software-style method claims as lacking patentable subject matter. The BPAI is not asserting that software is unpatentable — the Board is simply failing to find ties to a particular machine; transformation of a physical object; or transformation of articles “representative of physical objects.” In two of the cases, the BPAI applied its power to issue new grounds of rejection — raising the Section 101 issue sua sponte.

In ex parte Gutta (BPAI 2009), Gutta (Philips) claimed a “computerized method performed by a data processor.” The claims include elements such as “a history;” “a plurality of clusters;” a “target user;” and “preferences of a third party.” The final step in the method involved “displaying” a score. In Bilski, the Federal Circuit found that the transformation of data into a visual depiction could render a claimed method patentable. Here, however, the generically worded step was merely “post-solution activity [insufficient] to impart patentability to a claim involving the solving of a mathematical algorithm.”

In ex parte Barnes (BPAI 2009), Barnes (Landmark Graphics) claimed a “fault identification method” that obtains seismic data and determines “a planarity value for discontinuities” in each “analysis window” in the seismic data. In this case, the BPAI entered a new ground of rejection under Section 101. The BPAI recognized that the claim called for both gathering and analyzing data, but those steps – without explicit limitations of how they are done – are insufficient to render the claim patentable.

In ex parte Becker (BPAI 2009), Becker and his fourteen co-inventors (Siemens) claimed a “method for maintaining a user profile.” As in Barnes, the BPAI entered a new ground of rejection under Section 101 — finding again that the method claims failed to satisfy the machine or transformation test.

Read the Opinions

Note: This was originally posted on Jan 26, but was inadvertently un-published. I this version is slightly modified to take-into account an insightful comment regarding the transformation of data into a visual depiction.

Bilski at the Supreme Court

Patent, Patent Cases 2009, Patentable Subject Matter, ,

Bernard Bilski’s petition for certiorari is due within days (unless an extension is granted). I think that there is a real question of whether (and how) the patent community should react to presentation of the case. Should the patent community support this case for Supreme Court review, wait for a better situated case, or sit content with the machine-or-transformation test outlined by the Federal Circuit in the en banc Bilski decision? Each position has its merits.

The case is well developed, parties and amici have already invested time standing behind the case. Yet, the underlying invention is not compelling (a method of hedging the risk of bad weather by using commodities trading) and issues of obviousness would almost certainly cloud the issues. There are many other potential cases in the pipeline, and the Supreme Court may properly wait to see how the new Bilski rule develops before weighing-in.

BPAI Applies Bilski to Deny Patentability of Machine Claim

Patent

Ex parte Cornea-Hasegan (BPAI 2009)(non-precedential)

I have been following the BPAI’s response in the wake of the Federal Circuit’s series of patentable subject matter cases that culminated with In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc). In Bilski, the full appellate court held that to be patentable, a process claim must either be “tied to a particular machine or apparatus” or transform “a particular article into a different state or thing.” Bilski explicitly focuses only on process (or method) claim, and practitioners have been left to question its impact on other claim forms.

In Cornea-Hasegan, Intel is attempting to obtain a patent on a short-cut method of performing mathematical calculations when the outcome is likely “tiny.” According to the claim, when the mathematical result is likely tiny, then software is used to calculate the result; otherwise, hardware is used to calculate the result. The application claims both “a method” and “a computer readable media including program instructions which when executed by a processor case the processor to perform” the method. The body of both claims are essentially identical, and neither discuss particular machinery beyond “a processor,” “software,” and “floating-point hardware.”

Processor Insufficient: A claim will be considered to cover patentable subject matter if it is tied to a particular machine. Here, however, the BPAI found that requiring “a processor” is not a “particular” machine.

The recitation of a “processor” performing various functions fails to impose any meaningful limits on the claim’s scope. The recitation of a “processor” performing various functions is nothing more than a general purpose computer that has been programmed in an unspecified manner to implement the functional steps recited in the claims. The recitation of a processor in combination with purely functional recitations of method steps, where the functions are implemented using an unspecified algorithm, is insufficient the recitation of a processor does not limit the process steps to any specific machine or apparatus.

Post-Solution Activity: Although the claimed “floating-point hardware” may be a particular machine, the BPAI disregarded that element as “insignificant extra-solution activity … ‘that will not transform an unpatentable principle into a patentable process.'” (Quoting Bilski).

Transforming Data: A claim will be considered to cover patentable subject matter if it transforms a particular article into a different state or thing. However, the transformation of abstract data or abstract data structures will not be sufficient to render the claim patentable. Here, the only arguable transformation is of data that has no direct physical world corollary.

Non-Method Claims: Some of Intel’s claims are directed to a “computer readable media” rather than a method or process. Intel argued that Bilski should not apply to those “manufacture claims” because Bilski‘s sole focus was method claims. Rejecting that argument, the BPAI panel determined that the Section 101 analysis is the same – regardless of whether the subject is a “manufacture” claim or a “process” claim. (Citing AT&T v. Excel (Fed. Cir. 1999)(abrogated by Bilski)). Remember here that the State Street case – which released the business method rush – determined the patentability of a “data processing system.”

Applying Bilski to the “computer readable media” claim, the BPAI found that the claimed invention was unpatentable because it did not require transformation of any article nor was it tied to any particular machine. Although the claim recites a “computer readable media” and “hardware,” those elements were seen as insignificant extra-solution activities.

Limiting the claim to computer readable media does not add any practical limitation to the scope of the claim. Such a field-of-use limitation is insufficient to render an otherwise ineligible claim patent eligible.

Quoting the Supreme Court in Diehr (1981), the BPAI noted that Section 101 eligibility “cannot be circumvented by attempting to limit the use of the formula to a particular technological environment.”

Rejection of all claims under Section 101 affirmed.

Notes:

  • In Ex parte Bo Li, the BPAI reversed the rejection of a claim written in similar Beauregard format. That case could be distinguished by additional links to a machine or apparatus found in Bo Li‘s claims. In particular, Bo Li’s claim “presents a number of software components, such as the claimed logic processing module, configuration file processing module, data organization module, and data display organization module, that are embodied upon a computer readable medium.” [Link]
  • In Comiskey (Revised opinion 2009), the Federal Circuit issued a remand order to the BPAI to consider whether Comiskey’s claims of a “system for mandatory arbitration” are directed to statutory subject matter under Section 101.
  • The BPAI opinion here relies on the following statement from the original Comiskey opinion: “the mere use of the machine to collect data necessary for application of the mental process may not make the claim patentable subject matter.” Comiskey (Fed. Cir. 2007). That statement was deleted from the revised Comiskey opinion.

Federal Circuit Revises (Muzzles) Comiskey

En Banc, Patent, Patent Cases 2009, Patentable Subject Matter,

In re Comiskey (Fed. Cir. 2009) (Revised Panel Opinion)(En Banc Order)

After a request for en banc rehearing, the original Federal Circuit panel has revised its decision in Comsikey – erasing the “misunderstood” phrases of the original opinion linking Sections 101 (subject matter) and 103 (nonobviousness). The original opinion implicitly held that any portion of an invention that would constitute nonstatutory subject matter would be considered de facto obvious. [Link]

The new opinion finds that Comiskey’s method claims do not present patentable subject matter and remanded the case to the PTO to determine the subject matter eligibility of the system claims. The Federal Circuit refused to consider nonobviousness issues – even though nonobviousness was the sole issue presented in the original appeal. Subject matter eligibility had been raised sua sponte by the panel.

Judges Moore and Newman each dissented from the en banc order. Judge Moore argued that the decision violates the court’s “well established precedent that this court will not consider new grounds of rejecting patent claims on appeal.”