Tag Archives: Federal Circuit En Banc

The Death of Google’s Patents?

Patent, Patentable Subject Matter, Software, ,

By John F. Duffy* [File Attachment (42 KB)]

            The Patent and Trademark Office has now made clear that its newly developed position on patentable subject matter will invalidate many and perhaps most software patents, including pioneering patent claims to such innovators as Google, Inc.

            In a series of cases including In re Nuijten, In re Comiskey and In re Bilski, the Patent and Trademark Office has argued in favor of imposing new restrictions on the scope of patentable subject matter set forth by Congress in § 101 of the Patent Act.  In the most recent of these three—the currently pending en banc Bilski appeal—the Office takes the position that process inventions generally are unpatentable unless they “result in a physical transformation of an article” or are “tied to a particular machine.”[1] Perhaps, the agency has conceded, some “new, unforeseen technology” might warrant an “exception” to this formalistic test, but in the agency’s view, no such technology has yet emerged so there is no reason currently to use a more inclusive standard.[2]  

            The Bilski en banc hearing attracted enormous attention, and yet there has remained a sense among many patent practitioners that the PTO’s attempts to curtail section 101 would affect only a few atypical patent claims.  The vast bulk of patents on software, business and information technology are thought by some not to be threatened because those innovations are typically implemented on a machine—namely, a computer—and the tie to a machine would provide security against the agency’s contractions of § 101.  Even if that view were right, the contraction of patent eligibility would be very troubling because the patent system is supposed to be designed to encourage the atypical, the unusual and the innovative.  But that view is wrong.

            The logic of the PTO’s positions in Nuijten, Comiskey and Bilski has always threatened to destabilize whole fields of patenting, most especially in the field of software patents.  If the PTO’s test is followed, the crucial question for the vitality of patents on computer implemented inventions is whether a general purpose computer qualifies as a “particular” machine within the meaning of the agency’s test.  In two recent decisions announced after the oral arguments in the Bilski case, Ex parte Langemyr (May 28, 2008) and Ex parte Wasynczuk (June 2, 2008),[3] the PTO Board of Patent Appeals and Interferences has now supplied an answer to that question: A general purpose computer is not a particular machine, and thus innovative software processes are unpatentable if they are tied only to a general purpose computer.  

(more…)

Deciding Infringement During Claim Construction

Claim Construction, Patent,

PatentLawPic369ADC Telecommunications v. Switchcraft (Fed. Cir. 2008)(nonprecedential)

Patent law precedent requires a judge to interpret any disputed claims of a patent prior to sending the case to a jury to determine factual issues of infringement. 

“First, the court determines the scope and meaning of the patent claims asserted. . . . [Second,] the properly construed claims are compared to the allegedly infringing device.” Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1454 (Fed. Cir. 1998) (en banc) (citations omitted).

There is a strong tendency, however, to push the judge toward deciding the infringement issue within a Markman hearing — leading to a potentially quick summary judgment conclusion. Thus, parties often ask the judge to determine whether or not claimed element “X” should be interpreted to cover “Y” – where Y is an element of the accused product.

This infringement litigation involves a patent covering a coaxial switch that includes a mechanism for impedance matching.  Dueling experts used different testing mechanisms to prove (non)infringement of the accused device. Hoping to short-circuit the infringement determination, the defendant argued that that proper construction of the claims require a its method for testing for infringement. The CAFC disagreed because the claims lacked any textual hook for requiring a particular testing method and because the specification lacked “any clear indication” of a particular test. Relying upon its 2005 Union Carbide decision, the court found that “[b]ecause the claim language does not require a particular form of testing, this inquiry is not a claim construction question, which this court reviews de novo. Rather, this court reviews this inquiry as a question of fact.”

Thus, the CAFC affirmed the lower court’s decision and ruling that the “dispute over the proper testing method is … a factual question that the district court properly submitted to the jury.”

Auto Parts Design

Design Patent, Patent,

PatentLawPic356Ford Global Technologies v. ITC (Fed. Cir. 2008) (The F-150 ITC Case) (CURRENTLY ON APPEAL)

In 2007, the International Trade Commission (ITC) issued a final decision finding three Ford design patents invalid based on a prior public use. The patents relate to various parts of its F-150 truck design. Ford had asked the ITC to stop generic parts manufacturers from imports of the patented designs that were flowing in from Taiwan. In its decision, the ITC found seven of the design patents valid and infringed, but found that three of them were invalid.

Prior Public Use: The alleged prior public use in this case was an event where Ford selected 900 members of the public to attend in small groups and provide feedback on proposed car designs. At the event, security was “high,” cameras were banned as were sketches. Thus, according to Ford, the attendees could not have truly disclosed the ornamental features of the patented design. The invitees were also paid – and thus, disclosure to those individuals should be presumptively be considered private (as would normal in house discussions with an employee). Ford also argues that the payment to attendees is clear evidence that this public use was not “commercial exploitation.”

PatentLawPic359Almost no Scope: Many design patent holders run from the Federal Circuit’s 1988 in re Mann decision announcing that “design patents have almost no scope. In the auto-parts industry, however, no scope is needed so long as the patented designs are identical to the marketed products. The generic part importers are “slavishly copying” Ford’s original design — thus infringement should be open-and-shut. (See discussion below).

Ford embraced the narrow scope of its design rights – arguing that there its controls over the feedback event of preventing cameras or drawings ensures that none of the attendees will be able to place the invention in the public domain. Notably, in a recorded post-show follow-up, attendees who were asked about the design could only describe it in general terms such as “beefy.”

“The video evidence shows that the claimed ornamental features of the patents-in-suit were not in the public’s possession. Without cameras or sketches – which were specifically prohibited – there was no way here that the claimed designs could have been disclosed to the public. Ford therefore did not “remov [e] inventions from the public domain which the public justifiably comes to believe are freely available.” … In short, “beefy front end” and “a chopped top” do not describe or disclose the design inventions.

PatentLawPic360Is Point of Novelty Analysis Required?: In its counter-appeal, the Taiwanese manufacturers argue that infringement was improperly found because the ITC failed to perform the point-of-novelty test which, according to the defendants, is required even when the patented design is identically copied.

“[E]ven though the court compares two items through the eyes of the ordinary observer, it must nevertheless, to find infringement, attribute their similarity to the novelty which distinguishes the patented device from the prior art.”‘ Lawman, 437 F.3d at 1386 (quoting Litton, 728 F.2d at 1444).

The defendants are correct that Lawman and Litton appear to require the point-of-novelty test in every case of infringement. That issue will likely be resolved in the upcoming en banc decision in Egyptian Goddess. In addition, the defendants argued that the design patents should be considered obvious under KSR v. Teleflex (2007). As in that case the claims appear to be composed of a set of elements all found in the prior art.

An amicus brief was filed supporting the generic manufacturers. However, I have not yet seen that brief. In addition, the ITC recently began investigating another design patent complaint filed by Ford against the same generic manufacturers. This new case involves repair parts for the 2005 Mustang redesign.

Note:

  • A reader reminded to me to mention pending H.R. 5638 and the PTO’s town hall meeting next Monday to discuss design patent issues. (written comments due July 15). 
  • Unlike the patent reform bill, H.R.5638 is a partisan Democrat sponsored bill that would primarily support the insurance industry and make automobile repair less expensive by excusing repair parts from patent infringement. The bill would amend 35 USC 271 by adding the following subsection:
  • (j) It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States any article of manufacture that itself constitutes a component part of another article of manufacture, if the sole purpose of the component part is for the repair of the article of manufacture of which it is a part so as to restore its original appearance.

Patently-O Bits and Bytes No 39

Bits and Bytes, Patent
  • Congratulations to Ryan Swarts! Mr. Swarts was my student in eCommerce Law and has been in charge of the successful Patently-O Job board for the past year … all while running his own company. Ryan recently graduated from MU Law and is now looking to specialize in trademark and copyright law, especially relating to the Internet. Now that he’s a free agent — feel free to contact him directly.  [Ryan’s Resume][Contact Ryan].
  • June 25–29: The FCBA’s Bench & Bar Conference will be in Silicon Valley area (Monterey) for the first time. Speakers are primarily judges and in-house counsel. [LINK].
  • Such As: Contract Specialist Kenneth Adams discusses the recent decision in Lawler Mfg. v. Bradley Corp. and the use of “such as” in contract formation. [LINK][Patently-O discussion of Lawler].
  • Egyptian Goddess En Banc: Oral arguments are online.

Patently-O Bits and Bytes No. 37

Bits and Bytes, Patent

Federal Circuit: State of the Court

Patent,

On May 15, 2008, Federal Circuit Chief Judge Michel presented his “State of the Court” address at the well attended Federal Circuit Judicial Conference.  As usual with the Chief Judge, his remarks were upbeat but unsatisfied.  Several particular issues were emphasized:

  • Aging of the CAFC Judges: Within two years, eight of the twelve regular active CAFC judges will be eligible for senior status. 
  • Settlements: About half of all CAFC appeals settle prior to decision.
  • Speeding Up: “Expedition is a top priority.” Median time from docketing to disposition was nine-months for FY07. The current inventory of cases is now just over six months.
  • More Clerks: Judge Michel has requested a fourth law clerk for each judge to keep up with the complexity of the appeals.
  • En Banc and Supreme Court Review: Continue to be exceedingly rare. “Despite news reports of a surge in the last three years in the Supreme Court review of our patent cases, the data shows little change. I believe these data illustrate how well our panels do in nearly all appeals. We can all be proud of the work of the Federal Circuit.”
  • Read the remarks. Judge Michel’s charts are reproduced below. (Click to expand).

PatentLawPic293

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CAFC Hears En Banc Bilski Case

Patent, ,

May 8th’s en banc oral arguments in Ex parte Bilski reveal a court clearly grappling with the difficult problem of defining the scope of patentable subject matter in a way that is both administratively workable and supportive of future innovation and technology surges.  The Federal Circuit’s leeway is limited by Supreme Court precedent. The en banc panel notably focused on Diamond v. Diehr, 450 U.S. 175 (1981), and the meaning of “transformation.” 

Hitting upon an argument found in several amici briefs, the court questioned whether the statutory limits of Section 101 are necessary at all — given the administrability of Sections 102, 103 and 112. No counsel presented clear “harms” of an overbroad interpretation of a statutory “process.” (The potential issues were best described in Prof Sarnoff’s brief.)

Notes:

Tea leaves (FWIW):

  • PTO’s decision will be affirmed by shaping the facts (e.g., by calling the invention an abstract idea).
  • State Street will not be overruled.
  • The court will not implement a “machine test.”

John McCain and Patents

Patent

PatentLawPic292John McCain today announced the members of his “Justice Advisory Committee” — a group of fifty leading attorneys and law professors in the country.

Members include Ed Reines who is president of the Federal Circuit Bar Association and a senior partner at Weil Gotshal; Professor John Duffy who will be arguing later this week in the en banc Bilski case; Professor Michael Abramowicz who has written several articles about patent law and most recently proposed an auction system for extending patent terms; and Professor Eugene Volokh of the Volokh conspiracy. Chuck Fish, former Chief Patent Counsel at Time Warner, is apparently working full-time for the campaign. 

This is a very strong group that tends to provide solid, practical advice. I speak with some experience – having received advice from each of these members about various aspects of the law.*

Notes:

  • * Prof Volokh’s advice came from his book.

 

Canons of Claim Construction: Cancelled Claims Narrows Construction for Asserted Claims

Patent,

PatentLawPic290PSN Illinois v. Ivoclar Vivadent, et al. (Fed. Cir. 2008)

PSN’s patent claims a method of making porcelain veneers. PSN sued fourteen companies for infringement, most of whom settled early. The remaining defendants successfully argued that their veneer process was non-infringing.

On appeal, the CAFC looked at claim construction. In a passing breath, the court made the distinction that Phillips applies to “undefined” claim terms:

“We determine the ordinary and customary meaning of undefined claim terms as understood by a person of ordinary skill in the art at the time of the invention, using the methodology in Phillips v. AWH Corp., 415 F.3d 1303, 1312-19 (Fed. Cir. 2005) (en banc).”

Here, the court needed to determine the meaning of the undefined term “ready for mounting.” Relying upon the patentee’s use of the word ‘MAY’ in describing the claimed process, the CAFC held that the term should be rather broadly construed to optionally include ‘finishing’ steps. (Specification: “While still on the statue, the veneer casing may be subject to a finishing treatment to improve the esthetics.”)

The appellate panel noted that, within reason, claims should normally be construed to cover the described embodiments. The panel cautioned however, that each claim does not necessarily cover each embodiment. To the contrary, in some cases unasserted or cancelled claims directed to a particular disclosed embodiment may actually serve as evidence that the scope of remaining asserted claims does not extend to that embodiment.

“[C]ourts must recognize that disclosed embodiments may be within the scope of other allowed but unasserted claims. Likewise, during prosecution, an applicant may have cancelled pending claims but not amended the specification to delete disclosure relevant only to the cancelled claims. In such cases, unasserted or cancelled claims may provide ‘probative evidence’ that an embodiment is not within the scope of an asserted claim.”

Here, although the CAFC reversed on claim construction, it still found that summary judgment of non-infringement was proper.

Patently-O Bits and Bytes No. 31

Bits and Bytes, Patent, ,
  • PatentLawPic286In re Volkswagen(5th Cir. en banc). A self-titled “ad hoc committee of intellectual property trial lawyers in the Eastern District of Texas” have filed a brief in the pending VW case arguing on the substance that the E.D.Tex. courts do not excessively retain cases in a way that is any different from other jurisdictions.  The AIPLA amicus brief in the same case argues that too many cases are being heard in Texas. [Trial Lawyer Brief] [More Info].
  • The non-profit IP Hall of Fame is asking for nominations for inductees in the 2008 IP Hall of Fame.  The award is designed to honor individuals who have made significant contributions to today’s Intellectual Property System. www.iphalloffame.com. The award will be limited to five inductees this year. A couple of notes: (1) The Hall of Fame is non-profit, but sponsored by the for-profit IAM-Magazine. (2) I am a member of the Hall of Fame Academy and will vote on the inductees. (Being on the academy is different from being an inductee).
  • John Doll (Commissioner for Patents) will be taking questions on May 13 (11:00 am CST) as part of a webinar sponsored by Kirkpatrick & Lockhart. It appears that you must pre-register for this FREE event. LINK.
  • While much of the proposed patent reform legislation has been directed toward easing pain felt by major corporations being sued for patent infringement, one proposed measure would move inequitable conduct issues to the PTO for a decision. NY Times discussed this last week as a battle between Innovator and Generic Pharma – with the lobbyists winning. [LINK]
  • USPTO Publishes Common Application Format for EPO and JPO  [Via IP/Updates]
  • Pfizer’s Lipitor ‘893 Patent Survives Reexamination [Via Patent Docs]

Bilski Hearing to Include Amici Arguments

Patent, , ,

En banc oral arguments for Ex parte Bilski will be held at 2:00 pm May 8 at the CAFC Courthouse in DC. [Calendar] Room 201 is expected to be filled to capacity for this important case.

In addition to the parties, the CAFC has requested oral arguments from two amici: Regulatory Datacorp (RDC) and the “Financial Services Industry” group of seven that includes Bank of America, Morgan Stanley, and Wachovia.

Professor John Duffy will argue for RDC. Over the past several years, Duffy has firmly established himself as the country’s leading conservative patent thought leader.  RDC’s amicus brief makes the point that applied economics falls well within any reasonable definition of “useful arts.”  According to Duffy, statutory subject matter should only limit claims that are directed to abstract ideas, physical phenomena, or principles of nature.

On the other hand, BOA argues that State Street and its progeny are unduly broad both as written and as interpreted. BOA rejects any “technological arts” requirement that would allow a token inclusion of a ‘machine’ to render a claim patentable subject matter. Bill Lee, Managing Director of WilmerHale will make this argument.

Notes:

Ex Parte Bilski: On the Briefs:

CAFC, En Banc, Patent, Software, , , ,

In Ex Parte Bilski, an en banc Federal Circuit plans to reconsider the scope of patentable subject matter as it relates to business methods and so called mental methods. Perhaps more importantly to the patent system as a whole, the court is considering the proper procedures going forward for determining whether a particular invention falls within the scope of 35 USC 101.

In its en banc decision, the CAFC invited non-party amici briefs, which were due April 7. (Scroll down to find the briefs).  In reading through the briefs, the first aspect that caught my attention was a common theme that institutional strengths and weaknesses of the PTO and Courts should help dictate the ultimate subject matter rule.  

  • Prof Morris: Through its examiners, the PTO has expertise in determining the technical questions of novelty, nonobviousness, and indefiniteness. On the other hand, examiners do not have the expertise to decide “philosophical and abstract” issues of statutory subject matter.
  • Prof Lemley*: Arbitrary subject matter boundaries have generally been difficult to enforce and usually result in patent attorneys using “magic words” to avoid the limits. (*NOTE: I signed Prof Lemley’s brief along with 21 other law professors.)
  • Prof Collins: A test that excludes “human cognition” elements is administrable.
  • EFF: Proposed three-step process provides a more “efficient and meaningful” way to administer the Section 101 threshold.
  • AIPLA: Section 112 should guard claim scope rather than Section 101.

Narrow or Expansive: The main thrust of the Bilski arguments, however, focus on whether patentable subject matter should be narrow or expansive. I have categorized the briefs on this axis:

Expansive Subject Matter:

  • Prof Lemley: We cannot predict the next area of innovation, and arbitrary limits on patent scope reduces incentives in those potential areas. “Bad patents” should be dealt with using the true tools of the Patent Act: Sections 102, 103, and 112. “Mental methods” should be allowed if they fall within the other requirements of patentability.
  • Regulatory Data Corp (Prof Duffy): Even under a narrow definition, applied economics is now part of the “useful arts.”  Statutory subject matter should only limit claims directed to abstract ideas, physical phenomena, or principles of nature.
  • AIPLA: We should continue to follow Diehr, State Street, & AT&T.
  • RMC: Business methods should be patentable.
  • American Express: Patenting of business and information management processes encourages the development of those useful societal tools.
  • Accenture: Business methods should be patentable regardless of any physicality limitations. Congress has deemed that business methods should be patentable via 35 USC 273.
  • Greg Aharonian: The Supreme Court’s 1876 Cochraine test does not exclusively define “process.” Rather, a patent eligible process should be broadly defined to include any process or method that yields a “useful concrete and tangible result.”
  • Koninklijke Philips: The court should be wary of relying upon precedent that focused on traditional manufacturing methods. Rather, the court should look at the broad definition of process required by Congress in 35 U.S.C. 100(b).

Narrow Subject Matter:

  • Prof Sarnoff: The court should return to the precedent of Flook. The inventive concept of a patent cannot be an abstract idea (such as hedging risk). Likewise, an information processing method must include significant post-solution activity. State Street is unconstitutionally over-broad.
  • End Software patents: Software should not be patentable even when loaded on a computer. Rather, to be patentable, there must be significant additional (non-information processing) physical activity.
  • American Civil Liberties Union: Patents mental processes would violate the first amendment.
  • EFF: There must be a technological component of a patentable invention.
  • Computer & Communications Industry Association: The CAFC should shed its “patentee-centric approach” and insted try to meet the needs of the modern world. In particular, the court should consider the systemic policy implications of its decisions. The policy implications of broader patent coverage is more litigation & rent seeking.
  • IBM: There is no sound policy for allowing business method patents.
  • American Institute of CPAs: Tax methods should not be patentable because they preempt free use of the tax laws. (Of course, the same could be said of CPAs charging corporations for their service).
  • SAP: A process should both (1) have a concrete, useful, and tangible result and (2) be “sufficiently machine-like” in order to avoid preempting work-arounds. However, software processes should be patentable.
  • Prof Collins: The court should add a “human cognition” exception to Section 101. Steps involving human cognition should receive no consideration in judging patentability.
  • Red Hat: Software patents put a huge kink in the open source software movement.
  • Financial Services Industry: State Street and its progeny are unduly broad. A token inclusion of a ‘machine’ in a claim would not render that claim patentable subject matter.
  • Dell & Microsoft: A patentable invention must operate on “something physical.” To be patentable, software should be tied to a computer and cause some physical transformation (such as movement of electrons). And, following Comiskey, a patent should not be granted under 103 if the inventor merely combined well known computer hardware with inventive but otherwise unpatentable software.

Other?

  • Yahoo! and Prof Merges: A strict “technology” requirement is too inflexible. State Street taught us that such a strict requirement does not fit well with “onrushing technology.” The Yahoo!/Merges test: a patent eligible process must itself be “stable, predictable, and reproducible” and its result must be “useful, concrete, and tangible.”  Bilski’s claims would not be eligible because they do not define a “stable” process.
  • Intellectual Property Owners Association: A process that is either implemented by a machine or that transforms matter into another state is patentable subject matter.  IPO favorably cites the Flook limitations on on information processing.
  • Business Software Alliance: Courts should err on the side of patentable subject matter because Sections 102, 103, and 112 make-up any slack. Software should be patentable. However, Bilski’s invention is not patentable because it is an abstract idea.
  • Washington State IP Law Assn: The CAFC should re-write State Street to be consistent with Supreme Court precedent.
  • Prof Morris: Subject matter questions should be avoided. Rather the PTO and courts should look to the substantive rules of 102, 103, and 112 to decide the issue. Section 101 jurisprudence has been both haphazard and unfair.

The elephant in the room is the recent Comiskey decision. There, it appeared that the court refused to give any patentable weight to the portion of the invention directed to non-statutory subject matter. In its brief, the Boston Patent Law Assn asks the court to clarify the following statement from Comiskey:

“The routine addition of modern electronics to an otherwise unpatentable invention typically creates a prima facie case of obviousness. Moreover, there is no pertinent evidence of secondary considerations because the only evidence offered is of long-felt need for the unpatentable mental process itself, not long-felt need for the combination of the mental process and a modern communication device or computer.”

Notes:

  • I signed Professor Lemley’s brief along with twenty-one other law professors. The theory behind the brief follows the IPO brief that I helped draft in the Metabolite case.

Amici Briefs:

 

 

 

 

Re-Litigating Gorham v. White: Design Patents at the Supreme Court

Design Patent, Patent,

ScreenShot016Saint-Gobain Calmer, Inc. (now MeadWestvaco Calmer) v. Arminak & Associates, Inc. (on petition for certiorari 2008)

In 2007, the Federal Circuit dealt a serious blow to design patent protection by determining that an intermediate corporate purchaser is the “ordinary observer” for infringement analysis.  A professional corporate purchaser is presumably more likely to see differences between the patented design and an accused infringing device — thus making infringement more difficult to prove.

Calmer’s design patent, for instance, covers a sprayer shroud that is then combined with the trigger mechanism, bottle, etc.; filled with some liquid; and shipped to Wal-Mart for retail sale. The Federal Circuit’s holding looks to the typical buyer at the point where the allegedly infringing shroud is first sold to determine whether that individual would believe that “the patented design as a whole is substantially the same as the accused design.”   

Calmer has now petitioned the Supreme Court asking two questions:

  1. Whether the [Federal Circuit’s] use of expert viewpoints to determine design patent infringement is in direct conflict with this Court’s decision in Gorham Co. v. White, 81 U.S. 511, 529 (1871)?
  2. Whether the [Federal Circuit’s] test for design patent infringement of a component product, which considers deceptive similarities only as to the first purchaser of any product including the patented design, directly conflicts with its own precedent and with this Court’s “ordinary observer” test mandated by Gorham Co. v. White, 81 U.S. 511, 529 (1871), by excluding not only unsophisticated purchasers but also later purchasers of products including the patented design as a component?

As I write in an upcoming paper, the justification for design patent protections is more akin to traditional trademark policy than utility patent policy. With that in mind, it makes some sense allow design patents to operate at the retail level.

Notes:

Ex Parte Bilski: Once Again Rethinking the Scope of Patentable Subject Matter

Patent,

We can expect over one dozen friendly briefs in the pending en banc case captioned Ex Parte Bilski by the amicus deadline of April 7. The Bilski case involves questions of whether an invention can fit within the requirements of 35 U.S.C. 101 if the invention does not specifically require the use of “technology.” 

35 U.S.C. 101: Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

I was part of the team that drafted and submitted IPO’s 2006 brief to the Supreme Court in the Metabolite case. There, we argued on policy grounds that the court should not set arbitrary limits on the types of innovations that should be patentable. Instead, we asked the court to “support the expectation that innovations in yet unknown areas of technology will be eligible for patent protection.”  There will be at least one Bilski brief arguing along the same lines. It will, of course, be interesting to see whether the IPO and AIPLA have altered their positions in the past two years.

If the court chooses to narrow subject matter, the 2007 Comiskey decision will quickly become an elephant in the room. In that opinion, the Federal Circuit implicitly held that a patent applicant cannot rely on nonpatentable subject matter portions of an invention to prove nonobviousness.  Comiskey’s arguably unique inventive contribution was a method of arbitration. By itself, that method was considered an unpatentable mental process. And, Comiskey’s attempt to tie the process to a microprocessor were also unsuccessful:

“The routine addition of modern electronics to an otherwise unpatentable invention typically creates a prima facie case of obviousness. Moreover, there is no pertinent evidence of secondary considerations because the only evidence offered is of long-felt need for the unpatentable mental process itself, not long-felt need for the combination of the mental process and a modern communication device or computer.”

The implicit holdings here: (1) during nonobviousness analysis, any portion of an invention that constitutes nonstatutory subject matter will be considered de facto obvious; and (2) evidence of secondary considerations do not apply to portions of an invention that are not considered “patentable subject matter.”

Depending upon how it is interpreted, the Comiskey decision may greatly influence the impact of a rule narrowing patentable subject matter. For that reason, I hope that at least one brief will focus its effort on this important issue.

 

E.D. Texas Venue Case Goes En Banc; AIPLA Amicus Brief

Patent, ,

The AIPLA believes that the Eastern District of Texas is hearing too many patent cases. Legally, the organization has decided that E.D. Texas judges are “misapplying federal transfer rules by giving too much weight to plaintiffs’ choice of venue.”

In re Volkswagen is up for an en banc hearing in the 5th circuit court of appeals. The VW case is a product liability case stemming from a VW Golf crash that killed a 7–year old girl. The accident occurred in Dallas (location of the N.D. Tex.), but the case was filed 150 miles away in Marshall. 

VW argues that the District Court (Judge Ward) abused its discretion in denying the defendant’s §1404 venue transfer motion — arguing that it would be “unduly burdensome” for the multinational to litigate in the Eastern District of Texas rather than the Northern District of Texas.

28 U.S.C. §1391, the venue statute, broadly allows cases to proceed in any venue where a defendant corporation “is subject to personal jurisdiction at the time the action is commenced.”  Even when venue is proper, a court may still transfer the case to a more convenient location. 28 U.S.C. §1404 provides that a district court may transfer a civil action when it is both more convenient for the parties and witnesses and is “in the interest of justice.” 

In an amicus brief filed in the case, the AIPLA argues that there are many cases sitting in the Eastern District of Texas that should more properly be heard elsewhere, and that the district court has been too slow to transfer venue.

“The routine filing of patent infringement complaints in the Eastern District of Texas that have essentially no connection to that district has been encouraged by the seeming reluctance of courts in that district to transfer cases under § 1404(a).”

As a backstop to its arguments, the AIPLA also raised the threat of legislation:

“It is also worth noting that legislation on patent reform currently before Congress seeks to narrow drastically venue in patent cases, driven to a great extent by a desire to address the kind of forum shopping that occurs in the Eastern District of Texas.4 Providing the district courts clear guidance on applying the transfer provision will go a long way toward solving the forum shopping problem that is the impetus behind the pending venue legislation.”

The AIPLA Argument:

  1. The location of filing should only be a presumptive starting point in the venue analysis. If a defendant shows “good cause” reason to transfer, then the presumption should evaporate.
  2. “Proximity of evidence” should be a major factor.
  3. This decision is made at a very early stage in the litigation, thus the court should not require a high level of precise evidence to prove convenience.
  4. The “public interest” is usually a sham argument. (That the people of E.D. Tex. have an interest in having their courts adjudicate patent cases if the goods are sold there).

Read the AIPLA Brief

Ex Parte Bilski: Briefing Round I

Patent

As requested by the CAFC, both the PTO and Bilski’s attorneys (the Webb Firm) simultaneously filed briefs addressing the en banc that probe the scope of patent-eligible subject under 35 U.S.C. § 101. The Bilski facts focus on the patentability of a method of managing risk that is not tied to any particular form of technology. More generally, the CAFC appears prepared to reevaluate its decade-old State Street Bank decision.

A bevy of amici briefs are expected to be filed in early April.

Warning: Do Not Rely on the Experimental Use Exception to 102(b)

Patent, ,

Atlanta Attachment v. Leggett & Platt (Fed. Cir. 2008)

The CAFC once again reaffirmed patent law’s parallel to Chicago democracy: File early and often.

The patentee, Atlanta Attachment, won a summary judgment on issues of infringement and validity. Missouri based defendant Leggett & Platt appealed — arguing that the patented sewing machine had been “on sale” for more than one year before Atlanta Attachment filed its patent application.

The on sale bar of 102(b) invalidates an issued patent that was on sale prior to the one-year critical date. In Pfaff, the Supreme Court defined “on sale” as requiring an embodiment of the claimed invention being subject to a commercial offer for sale and being ready for patenting at the time of the sale. The on sale bar can be negated in certain cases where experimentation was still occurring.

Facts: Atlanta Attachment was working with Sealy to develop a special ruffle producing sewing machine. Over the course of a few years, several prototypes were sent to Sealy for experimentation. Each one was returned to the plaintiff for improvements. The third prototype included all of the claimed elements. Atlanta Attachment invoiced Sealy and was paid for the prototype. Instead of delivering the prototype, however, Sealy merely tested the prototype at the patentee’s facility and was later refunded its purchase price. At that time. Sealy made further suggestions regarding changes. In addition, Atlanta Attachment had offered to sell 50 production units prior to the critical date.

Holding:

  1. On Sale: Although never actually delivered, prototype was sold an invoice was sent and paid. Additionally, the offer to sell the 50 production units constitutes an offer to sell. Here, the invention was considered on sale because the asserted claim was broadly written – even though the prototype was not the eventual preferred embodiment.
  2. Experimental Use: First, the CAFC held that the experimental use exception does not apply after a commercial offer for sale has taken place. Additionally, Atlanta Attachment cannot claim the experimental use exception for Sealy’s tests since “experimentation conducted to determine whether the invention would suit a particular customer’s purposes does not fall within the experimental use exception” and because Atlanta Attachment did not control the testing. This is a subtle point – the patentee apparently retained control over the device by keeping it in its facility, but did not control the testing of the device.
  3. Ready for Patenting: A prototype that is reduced to practice and works for its intended purpose is ready for patenting. The “intended purpose” here is shaped by the patent claim. And, later refinement of a device does not mean that it wasn’t ready for patenting.

Thus the claim is invalid under the on sale bar of 35 U.S.C. §102(b). Additionally, the CAFC asked the court to reexamine whether the patentee’s failure to submit information about the prototypes would be sufficient to lead to a finding of unenforceability due to inequitable conduct.

Concurrence: Judges Prost and Dyk joined the majority opinion, but also penned a separate concurring opinion begging for en banc review of the “confusing” jurisprudence on the experimental use exception to 102(b). “Without considering these issues in a comprehensive manner in future cases, we will never escape from the confused status of our current caselaw.” They specifically believe that this and other CAFC decisions are wrongly decided because of the absolute disregard of any experimental use after an invention is reduced to practice.

Bilski: Full CAFC to Reexamine the Scope of Subject Matter Patentability

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In re Bilski (Fed. Cir. 2008 – en Banc)

Taking sua sponte action, the Federal Circuit has ordered an en banc rehearing of the In re Bilski case – asking the following five questions:

  1. Whether claim 1 of the 08/833,892 patent application claims patent-eligible subject matter under 35 U.S.C. § 101?
  2. What standard should govern in determining whether a process is patent-eligible subject matter under section 101?
  3. Whether the claimed subject matter is not patent-eligible because it constitutes an abstract idea or mental process; when does a claim that contains both mental and physical steps create patent-eligible subject matter?
  4. Whether a method or process must result in a physical transformation of an article or be tied to a machine to be patent-eligible subject matter under section 101? 
  5. Whether it is appropriate to reconsider State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352 (Fed. Cir. 1999), in this case and, if so, whether those cases should be overruled in any respect?

The Patent Application and Patent Applicants: Bilski involves claims to a method of managing the risk of bad weather through commodities trading. The claims are not tied to any particular form of technology — thus, they do not require a computer or particular storage media. In some quarters, this process lacking a technological tie-in is termed a “mental method.” 

Bernie Bilski apparently was the CEO and owner of a small company called WeatherWise. At least some WeatherWise patents were purchased in 2007 by the “Pittsburgh Technology Licensing Corp”  According to court documents, PTL is a wholly owned subsidiary of WeatherWise holdings. (See WeatherWise v. WeatherBill).

Although we don’t have the text of the application yet, this case looks problematic because of serious obviousness problems and lack of specificity in the claims.  Thus, the court will have no sympathy for Bilski — making this the perfect test case for someone wanting to strink Section 101 coverage and eliminate business method patents.  Representative Claim 1 reads as follows:

1.  A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of:< ?xml:namespace prefix ="" o />

(a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer;

(b) identifying market participants for said commodity having a counter-risk position to said consumers; and

(c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions.

Procedure: This cases arises out of a rejection from the Patent Board of Appeals (BPAI). In its opinion, the Board asked for assistance from the CAFC in addressing Subject Matter Patentability of non-technological method claims: “The Federal Circuit cannot address rejections that it does not see. . . . It would be helpful if the Federal Circuit would address this question directly.” BPAI Decision. Bilski then apealed directly from the BPAI to the CAFC and oral arguments were held in October 2007.  Rather than issuing an opinion, the court convened and voted to rehear the case en banc.

Timing and Amicus: The parties (Bilski & PTO) have already fully briefed the case. Thus, the CAFC is only allowing one supplimental brief each to be filed simultaneously on March 6, 2008. Amicus briefs discussing the five questions are requested by the court and may be filed without specific permission. Amicus briefs will be due 30 days later and must otherwise comply with FRAP and FCR 29.  (Thanks Joe: Amicus should be due April 5th, but because that falls on a Saturday, they will be due April 7). The hearing is scheduled for May 8 at 2:00 pm.

(more…)

Patently-O Bits and Bytes No. 12

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  • Picture1Anti-DataTreasury Provision: Although DataTreasury is not named in the Patent Reform Act of 2007, it is clear that Section 14 of the Senate Bill is primarily directed at that single patent holder. The bill would excuse “financial institutions” from charges that their check imaging methods constitute patent infringement. DataTreasury has sued a number of banks, including City National, Wells Fargo, BOA, US Bank, Wachovia, Suntrust, BB&T, Bancorp South, Compass, Frost National, First Tennessee, HSBC, Harris, National City, Zions First National Bank, Bank of NY, Bank of TOkyo, Comerica, Deutsche Bank, First Citizens, Keycorp, LaSalle, M&T, PNC, and others. The cases are at least partially stayed pending reexamination of a DataTreasury patent. The core issue here is that DataTreasury claims that its patent is necessarily infringed when a bank follows the Federal “Check 21” procedure for electronically processing checks.  See patents 5,910,988 and 6,032,137. [Washington Post Fills in Details].
  • Takings: The DataTreasury bill raises takings concerns, and it appears that the Government agrees. According to reports, the Congressional Budget Office has calculated that the “taking” of DataTreasury’s right to sue is worth about one billion dollars.
  • What happens when patent attorneys blog: I left my firm to teach; Michael Smith left his firm and joined another [now partner at Siebman Reynolds]; so did Peter Zura [Now partner at KattenMuchin]; so did Matt Buchanan [now of counsel at Dunlap Codding]; David Donoghue joined DLA Piper; Bill Heinze joined GE; John Welch joined Lowrie Lando; and the Troll Tracker is still in hiding. (Note — Nipper, Sorocco, Albainy-Jenei, and others are still rock-solid in their firms).
  • Valentines Day: Americans spend an average of $100+ for Valentines day — this year you might consider giving it away.
  • Delay in the Senate: IPO reports a strong likelihood that no action will take place in the Senate until April 2008. In the meantime, the Reform Act is in secret revision in Senator Leahy’s office.

 

Signal Claims Are Not Patentable: Nuijten Stands — Rehearing Denied

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In re Nuijten (en banc denied 2008)

The CAFC has decided not to hold an en banc hearing of the important Nuijten appeal.  In the original case, the CAFC (Judges Moore and Gajarsa) found that a transitory propagating signal is not proper patentable subject matter because it does not fit within any of the four statutory categories. That is, the signal is neither a process, machine, manufacture, nor composition of matter.

Three judges, including Judge Linn of the original panel, dissented from the en banc denial and offer a concise summary of their reasoning (some citations removed):

I respectfully dissent from the court’s decision not to rehear this case en banc. As I explained in my dissent from the panel opinion in this case, our decision conflicts with our own precedents as well as those of the Supreme Court. … It conflicts with our own precedent because our predecessor court’s decision in In re Breslow, 616 F.2d 516 (C.C.P.A. 1980), forecloses the majority’s conclusion that something “transient” or “fleeting” cannot constitute a “manufacture” under § 101. And it conflicts with Supreme Court precedent because it ignores the Supreme Court’s analysis of how, in general terms, § 101 is to be construed. As the Court discussed in Diamond v. Chakrabarty, patentable subject matter includes “anything under the sun that is made by man” except for certain enumerated exceptions: “The laws of nature, physical phenomena, and abstract ideas have been held not patentable.” The majority’s narrow construction of “manufacture” ignores this framework.

In addition, this case raises important questions about the relationship between § 101 and § 103. In this case, we affirm the PTO’s rejection of claims to a signal simpliciter, but the PTO has allowed a claim to a storage medium containing the very same signal, on the grounds that the storage medium is a manufacture that can be rejected, if at all, only under some provision other than § 101. In particular, the PTO considers the patentability of such claims under the “printed matter” doctrine of § 103. See In re Lowry, 32 F.3d 1579 (Fed. Cir. 1994). These distinctions make no practical sense and are poorly supported by precedent, which, to the contrary, requires a more holistic approach to the question of whether a claim is directed only to an unpatentable abstraction or whether it is directed to a patentable application of such an abstraction to an otherwise statutory invention. Cf. Parker v. Flook, 437 U.S. 584, 591 (1978) (“The process itself, not merely the mathematical algorithm, must be new and useful.”); cf. also In re Abele, 684 F.2d 902, 909 (C.C.P.A. 1982) (“As was the case in [Diamond v. ]Diehr[, 450 U.S. 174 (1981),] . . . the algorithm is but a part of the overall claimed process.”). The distinctions that are drawn between signals and storage media containing those signals would appear to apply equally to the distinctions between software and hardware and are artificial at best.

Notes:

  • The Comiskey case is (apparently) still pending decision on rehearing. Comiskey arguablly stretches the 101/103 relationship even further than Nuijten. However, it may have an even smaller shot of rehearing en banc because of the lack of a dissent as well as a lack of amicus support for the en banc request.
  • Patently-O Discussion of Nuijten and Comiskey
  • CAFC Nuijten Decision