SmithKline Beecham Corp. v. Apotex Corp. (Fed. Cir. 2005) (en banc order)
Paxil(R) is a blockbuster drug sold by SmithKline Beecham (SKB). SKB’s patent covering the drug was initially invalidated in an opinion by 7th Circuit Judge Richard A. Posner who sat by designation as a district court judge. On appeal, a Federal Circuit panel (J. Rader) rejected almost all of Judge Posner’s reasoning, but affirmed the invalidation decision on other grounds.
Now, the CAFC issued an en banc decision to vacate the panel’s original decision with regard to the issue of experimental use, and the panel (J. Rader) has issued its new decision.
This case involves involved PHC anhydrates (without water) and PHC hemihydrates (some water). In the 70’s PHC anhydrates were invented in the UK. In 1984, SKB invented PHC hemihydrates and eventually patented a PHC hemihydrate compound. (U.S. Patent No. 4,721,723). In 1998, Apotex filed an ANDA to market a prior art PHC anhydrate. The question of experimental use arises because SKB performed clinical trials that occurred more than one year prior to filing of the patent application. Normally, a public use of a patented invention more than a year before filing invalidates the patent under 35 U.S.C. §102(b). However SKB has argued that the clinical trials were a form of experimental use.
In its new decision, the CAFC majority simply avoided the issue of experimental public use in totality. Rather, they found alternative grounds to invalidate the patent, holding that the asserted claims “invalid for inherent anticipation by the ’196 patent under § 102(a).”
Judge Posner had rejected this argument because Apotex “did not prove by clear and convincing evidence that it was impossible to make pure PHC anhydrate in the United States before the critical date.” The appellate panel, however, found that Judge Posner erred by requiring Apotex to meet this standard of proof, “which is too exacting.”
Apotex did not need to prove that it was impossible to make PHC anhydrate in the United States that contained no PHC hemihydrate, but merely that “the disclosure [of the prior art] is sufficient to show that the natural result flowing from the operation as taught [in the prior art] would result in” the claimed product.
Teva Pharmaceuticals v. Pfizer (Fed. Cir. 2005) (On petition for rehearing).
In January 2005, the Court of Appeals for the Federal Circuit (CAFC) issued a controversial decision in the case of Teva Pharm. v. Pfizer. Teva, a manufacturer of generic drugs had filed an Abbreviated New Drug Application (ANDA), seeking approval from the FDA to market a generic version of sertraline hydrochloride — a drug sold by Pfizer under the Zoloft® brand. Under the provisions of the Hatch-Waxman Act, Pfizer had 45-days to sue Teva for patent infringement based on Teva’s ANDA filings. However, Pfizer did not sue. Teva then brought a declaratory judgment action against Pfizer, seeking a determination that its generic drug did not infringe Pfizer’s patent.
The question on appeal was whether the Teva’s apprehension of suit was sufficient to create jurisdiction for its declaratory judgment action. On appeal, the CAFC determined that Pfizer’s Orange Book listing along with Teva’s ANDA were insufficient to create an actual controversy
The listing of a patent in the Orange Book by an NDA filer is the result of a statutory requirement. Without more, Pfizer’s compliance with the Hatch-Waxman listing requirement should not be construed as a blanket threat to potential infringers as far as Pfizer’s patent enforcement intentions are concerned. . . . More is required for an actual controversy than the existence of an adversely held patent. . . . We are not prepared to hold that listing a patent in the Orange Book evinces an intent to sue any ANDA filer who submits a paragraph IV certification with respect to the patent.
As such, the CAFC affirmed the District Court’s dismissal of Teva’s action. Now, Teva has requested an en-banc rehearing and amicus curiae briefs were field by the FTC, the Generic Pharmaceutical Association, Ivax Pharmaceuticals and Senators Edward Kennedy, John McCain, and Charles Schumer. However, that request has been denied.
In a precedential order, the CAFC denied Teva’s petition for a rehearing — noting that “a poll was requested, taken, and failed.”
However Judges Dyk and Gajarsa both filed dissenting opinions explaining their reasons for hearing the case.
Gajarsa Dissent: Judge Gajarsa, who was a member of the original Teva panel, argues that the ANDA situation is quite different from other patent infringement situations and requires a separate form of analysis.
The contextual differences between the second ANDA filer and the typical patent infringement case make the reasonable apprehension test inappropriate for this action. By guiding the patentee’s conduct in the typical case, the reasonable apprehension analysis allows the patentee to avoid litigation. Identifying a justiciable controversy in terms of a threat of infringement litigation, the doctrine establishes the circumstances in which the uncertainty of legal rights materially harm a potential infringer in the marketplace. The injury facing Teva in this case is different in kind, but no less actionable.
Gajarsa goes on to say that the panel decision’s Constitutional analysis (Article III limitations) “forestalls legislative correction” of the decision.
Dyk Dissent: Judge Dyke provides a full Article III analysis and concludes that the Teva panel was wrong in determining that a reasonable apprehension or imminent suit was required for declaratory judgment jurisdiction.
There are relatively few Supreme Court cases dealing with Article III and declaratory judgments, but the few cases that do exist provide no support for a reasonable apprehension of imminent suit requirement.
Teva and its cohort of supporters are expected to appeal petition for certiorari.
The Senators’ Brief: Senators Edward Kennedy, John McCain and Charles Schumer filed an amicus brief supporting the petition for rehearing. The brief made the point that there was a Congressional intent surrounding the passage of the Hatch-Waxman Act to expand subject matter jurisdiction over declaratory judgment actions by generic drug companies “to the constitutional limit” and that the panel opinion in Teva v. Pfizer frustrates the purposes of the amendments. (Thanks to Theodore Whitehouse at Willkie Farr for providing a copy of the Senators’ brief)
“Exporting this brief could violate 35 U.S.C. Section 271(f) under the Panel’s mistaken construction of that statute.”
So begins the Amicus brief submitted by Bentley Systems, et al., in support of Microsoft’s petition for rehearing in Eolas v. Microsoft (Golden Master I). Bentley goes on to argued that the Court should maintain a principled and clear distinction between (a) supplying physical components of a physical patented invention, versus (b) supplying engineering design information that can be used to manufacture components of a patented invention.
In Eolas v. Microsoft, a three member appellate panel at the Federal Circuit appears to have expanded the scope of Section 271(f) – a statute that creates a cause of action for infringement due to foreign sales when a component of a patented invention is supplied from the U.S., knowing that the component will be combined in an infringing manner outside the U.S. Microsoft had shipped a “Golden Master” of computer code for Internet Explorer (IE) to its foreign suppliers who then copied the disk and sold the copies on foreign soil. This activity was seen as infringing, even though the patented invention was not practiced until at least the 3rd step above.
Of course, Microsoft agrees that the CAFC’s decision was mistaken. In its petition for a rehearing Microsoft argues that the that the panel decision is contrary to Pellegrini v. Analog Devices — a case that were virtually ignored by the CAFC opinion. In their brief, AOL & Intel agree that the panel’s application of 271(f) cannot be reconciled with Pellegrini and prior U.S. patent law. [AOL & Intel Amicus Brief].
As I have mentioned before, this case may have wide reaching effects. In its amicus brief, Shell Oil notes that the panel’s opinion overreached when it declared that “every form of invention eligible for patenting falls within the protection of section 271(f).” Specifically, Shell, one of the most multinational of corporations, is concerned that they will be found to be violating patented processes that were somehow exported from the U.S. [Shell Oil Amicus Brief].
In disagreeing with the CAFC decision, the Business Software Alliance (BSA) makes both a legal argument and a policy argument. On the legal side, BSA describes the Golden Master disks as templates that are not incorporated into patented inventions. Their argument, that is not controverted by the CAFC decision, is that 271(f) was not enacted to “ensnare companies that transmit know-how.” On the policy side, the BSA notes that the decision hurts U.S. software developers and adds another incentive to outsource such work to developers in another country. [BSA Amicus Brief].
It is difficult to even make an educated guess as to how long it may take for the Federal Circuit to decide the petition. In one case, a petition for rehearing has now been pending for almost a full year.
There are lots of great cases on the Federal Circuit’s spring calendar. Several cases pending at either the Federal Circuit or Supreme Court that are ‘worth a special look,’ according to Hal Wegner. Here are some highlights of Mr. Wegner’s list, with my own comments.
LabCorp v. Metabolite, petition for cert submitted, Supreme Court has requested Solicitor General’s Opinion on Cert. The case involves a patentability question — whether Metabolite’s patented method of detecting vitamin B deficiency should be invalid as "because one cannot patent laws of nature, natural phenomena, and abstract ideas."
Purdue Pharma v. Endo, CAFC heard oral arguments in early November on the question of whether patentee’s conduct was ‘inequitable’ for failing to disclose that results used to establish patentability were prophetic rather than experimental. A decision is expected soon.
SmithKline Beecham v. Apotex, awaiting decision on petition for rehearing. This case now revolves around the question of whether use of an invention to confirm utility for FDA approval is an ‘experimental use’ that saves a patent from anticipation under 102(b).
Phillips v. AWH, awaiting en banc decision on claim construction methodology.
Eolas Technologies v. Microsoft, Federal Circuit decision awaited, hopefully discussing the scope of 271(f). The upcoming appeal of AT&T v. Microsoft presents the same ‘golden master disk‘ scenario as Eolas, and will become important if Eolas is decided on other grounds.
Independent Ink v. Illinois Tool Works, In January, the CAFC determined that, in an antitrust tying case, a patent presumptively defines the relevant market as the nationwide market for the patented product itself. There is some potential for cert in this case.
NTP, Inc. v. Research in Motion, Ltd., there is a good chance for a rehearing in this case involving RIM’s BlackBerry product. This case will be important in defining extraterritorial application of U.S. patent laws in the modern era of networked computing systems.
In re Fisher is not yet on the CAFC calendar. In this case, the BPAI affirmed a rejection for lack of utility and enablement (101 and 112 p1) because the specification lacked a specific teaching of a substantial utility. According to the decision, without a specific teaching of substantial utility, then virtually all chemicals would meet the requirements of section 101 as at least "useful in research."
Although not patent litigation, Sarah Stirland (one of the few reporters focusing on intellectual property) at the National Journal has written a nice article regarding the potential for legislation in the 109th Congress.
Mark Banner was nice enough to provide an MP3 encoded version of the Federal Circuit’s En Banc hearing in Phillips v AWH from February 8, 2005. You can listen to the streaming version or download the MP3.
Howard Bashman, author of the excellent appellate litigation blog, known as "How Appealing" clued me in to today’s notice at the Federal Circuit regarding Phillips v. AWH.
The Highlights of the notice:
Oral hearing will be at 10:00 A.M., February 8, 2005 in Courtroom 402.
Attendance is expected to be high.
Seating is on a first-come, first-serve basis. There is no reserved public seating.
60 seats in the courtroom, 47 seats on the second floor lobby (audio feed), ample standing room.
Audio tapes will be available on Wednesday, February 9th for $26.
There are several events taking place next week that interest me, and might interest you. They are listed in chronological order.
1) Phillips v. AWH en banc oral arguments, Washington DC, Tuesday, February 8, 2005: This is going to be a big event at the Federal Circuit in DC.
2) Chicago’s IP Roundtable will be on February 10, 2005 and is hosted by Foley & Lardner. IP attorneys who are interested in participating in a lively discussion of current hot topics are invited to attend. The agenda includes a discussion of Phillips v. AWH, Rader’s sharp dissent in last week’s Fosamax case, Merck v. Integra at the Supreme Court, and patent extraterritoriality.
From the Flyer: Featured participants include the author of the most popular and widely read patent blog, "Patently-O", Dennis Crouch of McDonnell Boehnen Hulbert & Berghoff LLP . . . The co-moderators are Sharon R. Barner, Gregory S. Norrod and Harold C. Wegner. RSVP: Jean Shim jshim@foley.com. The conference venue is Foley & Lardner LLP, 321 N. Clark Street – Suite 2800, Thursday, February 10, 2005, 4:00 p.m. – 6:00 p.m. CST [RSVP deadline to guarantee space February 7, 2005]
3) The APLF is hosting a discussion of "What is Your Case Worth?" This all important question is very useful to help plaintiffs and defendants plan their tactics in the courtroom and at the settlement negotiation table. Dan Boehnen of MBHB along with Aron Levko of PriceWaterhouseCoopers will lead the discussion that takes place February 11, 2005, 11:30-12:30 CST. RSVP: info@aplf.org in order to obtain toll free dial in number. The roundtable discussions are a free service to in-house counsel involved in IP matters that want to receive very timely and accurate summary information on business-relevant patent law matters, and APLF member firm attorneys.
4) FTC’s town-hall meeting on patent reform will be held in Chicago on March 4, 2005. Kenneth Dam, University of Chicago Professor [emeritus] and formerly of the Deputy Secretary of Treasury will be a keynote speaker. USPTO Director Jon Dudas will be speaking as well. [Brochure] [Online Registration].
BlackBerry maker Research-In-Motion (RIM) has requested a rehearing en banc at the Federal Circuit in an attempt to escape from the $53 million damage award and the expected injunction against its BlackBerry system for patent infringement. In a strong power play, the Government of Canada has filed an amicus brief, supporting the rehearing. As have the Canadian Chamber of Commerce and the Information Technology Association of Canada. These Canadian Briefs essentially ask the court for comity — arguing that the holding in RIM upsets the business and legal climate in Canada. (Other amicus briefs are expected to be filed within the next few days).
Frankly, I was surprised at the Federal Circuit’s decision last month that found that RIM could be liable for direct infringement even though its some of the necessary elements of the asserted claims occurred outside the U.S. (in Canada). The diagram above (from RIM’s brief) shows RIM’s e-mail relay in operation in Canada. The relay is a distinguishing feature of NTP’s patents.
RIM’s most compelling argument is that the infringement of NTP’s patents did not occur “within the United States” as required by the statute. Obviously RIM’s argument is strictly true. However, the three judge appellate panel found that the test is not whether the infringement took place within the United States, but whether “control and beneficial use” of the infringing system was within the United States.
In my view, based on standing precedent of Deepsouth and Pellegrini, the Federal Circuit got this case wrong, and the standard of “control and beneficial use” should be tossed.
The court has traditionally had a strong stance against extraterritorial application of the patent laws. In Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518 (1972), the Supreme Court of the United States (SCOTUS) strictly interpreted the patent act to find that unauthorized manufacturers of patented products could avoid liability for infringement under the then-existing law by manufacturing the unassembled components of those products in the United States and then shipping the components out of the United States for assembly. Congress enacted 35 U.S.C. § 271(f) in order to close that loophole. However, § 271(f) does not apply to the facts of RIM v. NTP. In Pellegrini, the court found that Pellegrini’s case against Analog did not fall within the scope of newly enacted § 271(f), and thus, that the U.S. patent laws did not apply to extraterritorial manufacture and sale of a patented electric motor.
In each of these cases (Deepsouth & Pellegrini), the Court denied the plaintiff’s requests for extraterritorial application of the U.S. patent laws because the statute did not specifically call for such an application. Because the statute does not specifically call for infringement under the RIM v. NTP scenario there should be no infringement here either.
As an aside: I do believe that there should be some legislative action to amend the patent laws in order to catch individuals who move portions of their systems (such as their router) to another country in order to avoid liability for patent infringement. However, the Federal Circuit, like the Supreme Court in Deepsouth, is not in a position to generate such legislation. Is anyone interested in working with me to draft such legislation?
UPDATE: James Hill, a blog reader from the UK wrote in noting the similarity between RIM and the UK case of Menasche v. William Hill. [summary]In Menasche, the Court of Appeals ruled that the invention (a system for online betting) was put into effect in the UK even though the server was located abroad. “By using their terminals in the UK, William Hill’s customers were in a real sense also using the overseas host server in the UK.”
I think that there are some very strong similarities between the BlackBerry case and Menasche. The one major difference that RIM’s attorney made in my discussion with him is that the operation of the ROUTER is a critical element of NTP’s patent claims — that portion of the claim was particularly pointed out by NTP during prosecution of the patent as a factor that made the invention unique from other prior art. Thus, the claim is not keyed on the two end users, but rather about the entire chain of operation.
I agree that the specific facts are different from Pellegrini. However, the principle that I derive from Pellegrini and Deepsouth is that there is a specific statute in U.S. Patent law that calls for extraterritorial application of the patent laws, and regardless of the policy arguments, the U.S. patent laws do not apply to foreign actions except where specifically called for in the statute.
UPDATE II: Mr. Petit over at Scrivener’s Error makes the point that the the principle that “a right imply a remedy” might save the original opinion.
UPDATE III: Mathew Ingram, an excellent columnist at the Globe and Mail has written an article [subscription req’d] on the subject. He questions whether the Canadian Government made the right move by filing a brief in this case.
UPDATE IV: In an interesting twist, Computer Leasco Inc., a small computer company based in Michigan, filed a complaint against NTP alleging that NTP officials engaged in the “outright theft” of Computer Leasco’s interests in intellectual property that NTP now holds. (WSJ article)
[Link] The en banc rehearing of Phillips v. AWH is scheduled for Tuesday, February 8, 2005 at 10:00 a.m. in Washington DC. It is expected that the outcome of this case will help define the mechanics and legal basis for patent claim construction.
[Link] More information on the case, and a review of the briefs filed can be found here. I reviewed the major arguments common to the various briefs in the December 2004/January 2005 edition of PatentWORLD magazine (Issue 168).
Pinpoint v. Amazon. (N.D. Ill. Aug 31, 2004) (Posner, J.).
Pinpoint has sued Amazon for infringement of its patented system for scheduling broadcast and providing access to video programs. (E.g., U.S. Patent No. 5,758,257). Pinpoint claims that Amazon’s website infringes by providing personalized book and music video suggestions.
In its most recent press release, Pinpoint announced that Judge Richard A. Posner of the 7th Circuit, U.S. Court of Appeals will be sitting by designation as the district judge presiding over the jury trial. According to Judge Posner’s order in the case, the jury trial will begin at 9:00 am on December 6.
Always Controversial
Judge Posner has a reputation for thinking outside the box. In his last patent case, Posner created a new equitable defense to infringementthat would bar enforcement of a patent when the patentee’s own conduct significantly inhibits non-infringing practice of the prior art. That case, SKB v. Apotex [I, II, III, IV], involving hemihydrates, was affirmed by the Federal Circuit but is currently being considered for an en banc rehearing.
It is speculated that the Apotex case has sparked some contention within the halls of the CAFC. This speculation stems from the fact that the en banc petition has been sitting undecided for over six months.
Now a Blogger
After a stint as a guest blogger at Professor Larry Lessig’s blog, Judge Posner has started a blog in cooperation with Nobel Winner Gary Becker. The Becker-Posner blog is not fully functional yet, but keep your eyes peeled.
Claims should be construed as of the time of the invention.
Limitations should be given their “ordinary meaning” as understood by a skilled artisan.
Claim construction begins with dictionary, encyclopedia, and treatise definitions.
Dictionaries, treatises, and encyclopedias are critical to claim construction.
Claim differentiation applies to presume a difference in meaning and scope when different words or phrases are used in separate claims.
Preamble terms are not claim limitations.
Limitations in the specification may not be read into the claims.
Express limitations in the specification should be read into the claims.
Claims should be construed to cover preferred embodiments.
Claims should be construed to uphold their validity.
The immediate question is whether the en banc decision in Phillips v. AWH will (i) present a cleanly revised list or (ii) simply add another rule to the list. (Listing adapted from a presentation by Kevin Casey).
The newsletter discusses the PTO’s Image File Wrapper (IFW) system and outlines many problems and proposes solutions. For example:
Problem: Examiners’ greatest complaints with IFW, by far, relate to the multitude of scanning errors that create documents improperly entered in the file record, amendments and office actions entered days, weeks, or months late, documents filed under the wrong tabs, and more.
POPA Solution: Better training for scanning contractors; immediate e-mail forwarding of scanned documents to the appropriate examiner; scan-on-demand service centers in each technology center.
Other proposed solutions include better indexing of non-patent literature (NPL) and caching of IFW files so that the examiners can work with a file when the PTO’s system is down. As Greg Aharonian has repeatedly stated, improving the ability of examiners to search prior art will result in a better system for everyone involved.
Interestingly, the POPA Newsletter also discussed upcoming Phillips v. AWHen-banc hearing from the point-of-view of patent examiners.
Examiners are trained to interpret the claims as broadly as possible unless the applicant has explicitly provided a definition to the contrary in the specification or if the specification provides an explicit disclaimer. Examiners are permitted to use dictionaries and other extrinsic evidence to determine the broadest reasonable interpretation.
My review of the briefs filed Phillips will be published in next Month’s issue of Patent World.
Update: A regular reader of the Patently-O Blog wrote in on the subject of scanning errors. In his well reasoned view, the PTO should simply have patent attorneys electronically submit PDF documents to the Office. Then, there would be no scanning errors.
—–Original Message—– From: XXXX Sent: Wednesday, November 10, 2004 10:33 PM To: Crouch, Dennis Subject: Patent Office Professional Association (POPA) Proposes Solutions to Examination Problems
Examiners’ greatest complaints with IFW, by far, relate to the multitude of scanning errors that create documents improperly entered in the file record, amendments and office actions entered days, weeks, or months late, documents filed under the wrong tabs, and more
Scanning errors? I think they are missing the big picture. When I file anything at the Trademark Trial and Appeal Board, I simply upload a pdf (rendering scanning errors impossible-but I guess there are still some font issues). Regardless, uploading pdf documents is so fast, so checkable (did that just work?), so simple, soooo why doesn’t the patent office get it?
As I sit here and wait for my USPTO fax back at 10:31 PM.
As you may know, the Phillips case, which is presently awaiting decision en banc, is expected to be the next major decision impacting the issues of claim construction.For those who are interested, here is a rundown of some of the Amicus Briefs that were filed in the appeal:
1. United States Patent and Trademark Office (USPTO): The Patent Office took the position that dictionaries should not be a primary reference for claim construction, in part because they are not used by examiners during prosecution. The PTO brief was filed jointly with the DOJ and FTC.
2. Intellectual Property Owners (IPO): The IPO brief, argues that the primary evidence of claim meaning should be found in the patent specification and prosecution history. If a court must resort to extrinsic evidence to determine claim meaning, there should be no pre-determined hierarchy of importance. The Court should only consider claim construction evidence in the record on appeal. The IPO brief was written by Paul Berghoff and Josh Rich of MBHB LLP.
3. Electronic Frontier Foundation (EFF): Judges should invalidate and Patent Office Examiners should reject ambiguous claims. Claims should be given their broadest possible construction during prosecution and narrowest reasonable meaning thereafter.Professor Joshua Sarnoff is the Counsel of Record on the EFF brief.
4. American Bar Association: Neither the specification nor dictionary should have primacy. Invalidity should play no role in claim construction, as that approach is contrary to the public notice function. The Appellate Court should defer to findings of fact made during claim construction.
5. American Intellectual Property Law Association (AIPLA): The fundamental standard that should govern claim construction is that a claim term must be construed from the perspective of a person of ordinary skill in the relevant art at the time the patent issued seeking to understand the term’s meaning from a study of the entire intrinsic record.
6. Intel, IBM, Google, Micron, and Microsoft: Where those construing patent claims focus on dictionary meanings of claim terms without an appropriate grounding in the specification and prosecution history, there is a danger the interpretation of patent claims will differ markedly from the true scope of the invention they seek to define. Indeed, there are so many different dictionary definitions for any given word that it is impossible to predict with any confidence what meaning a court will choose. The Intel brief was written by Stanford professor Mark Lemley.
7. Federal Circuit Bar Association (FCBA): Dictionaries should not be the primary focus of claim construction. Claim construction may require findings of fact, which should be reviewed for clear error.
8. International Trade Commission Trial Lawyers Association (ITCTLA): The specification and prosecution history should control. When dictionaries are used, technical dictionaries should have a rebuttable preference over general dictionaries. Claim language should not be narrowly construed for the sole purpose of avoiding invalidity. The claim interpretation should not be limited to only the embodiment described in the specification. Expert testimony should be allowed and evaluated as would any other piece of evidence. Deference to the trial court’s claim construction may be appropriate in some cases.
9. Biotechnology Industry Organization (BIO): Specification first. Dictionaries second, when specification does not establish meaning of claim terms. Claims should never be narrowly construed for the sole purpose of avoiding invalidity.
11. Professors Wagner & Miller: The professors argue that the patent document should be the primary and preferred source of claim meaning — as long as it is clear, specific, and objective. Where the term is not clearly defined in the patent document, there should be a heavy presumption in favor of the ordinary meaning of the term. Dictionaries are not a panacea, but they offer the best opportunity to provide a term’s ordinary meaning with clarity, certainty, and predictability.
12. Public Patent Foundation (PUBPAT): Dan Ravicher of PUBPAT argued that "claim construction should never be impacted by considerations of validity." Consistent with Markman, subsidiary factual determinations by the trial court during claim construction should be reviewed for clear error.
13. Intellectual Property Law Association of Chicago (IPLAC): Courts may look to the plain meaning of claim terms but asserts that dictionaries should in general be subordinate to the patent specification and other intrinsic evidence when determining what is meant objectively by challenged claim terms. Dictionaries may be considered, but the guiding light must be what the hypothetical ordinarily skilled artisan would have understood by the claim terms – not in a vacuum, and not armed with only a technical or general purpose dictionary, but also with the full panoply of intrinsic evidence. Courts may receive expert witness testimony on this determination. Edward Manzo wrote the brief for IPLAC, and was given assistance by Brad Lyerla, Dean Monco, Pat Burns and Tim Vezeau.
14. Association of Corporate Counsel: Public notice is best served by first looking at claims, specification and prosecution history. Dictionaries should not be the primary source for claim construction. Because the guiding inquiry is the meaning of terms to those of ordinary skill in the relevant art, relevant technical dictionaries should usually be consulted before general dictionaries.
15. Infineon: The public notice function of patent claims is best served by looking first and foremost to the intrinsic specification, not an extrinsic dictionary definition, to interpret claim terms.
16. Boston Patent Law Association: Dictionaries should not be the primary source of claim construction because they do not stay current, are not necessarily authoritative, and because meaning is not always found in books. Validity and claim construction should be kept separate.
18. Medrad, Inc: Claim construction should be based upon the intrinsic evidence (spec, drawings, cited prior art, and prosecution history).
19. NYC Association of the Bar: Dictionary definitions should not provide the primary source of meaning or a separate restriction on claim coverage. Validity should be considered during claim construction. Expert testimony can provide important information. Deference to the trial court’s claim construction findings is blocked by procedural and practical obstacles.
26. Sughrue Mion: Claims should be interpreted as of the time of filing or earlier. The patent document provides the best notice of the claim’s meaning. Deference should be accorded to a trial court’s factual findings underlying claim construction.
Link: My review of the case published in Patent World magazine.
ASIDE:
Interestingly, Mr. AWH Phillips was a famous economist who discovered a consistent inverse relationship between the rate of wage inflation the rate of unemployment.
In a landmark decision, a panel of eleven Federal Circuit judges has overruled their prior precedent, relieving accused patent infringers of the feared "Quantum Dilemma."
Willful patent infringement brings with it the potential for treble damages (3x), usually resulting in multi-million dollar awards. (35 USC § 284). Prior cases have held that an important factor for determining willfulness is whether the accused infringer obtained an opinion of counsel that presents a strong case for invalidation or noninfringement.
During litigation, presentation of the exculpatory opinion as evidence triggers broad waiver of attorney-client privilege. Under prior precedent, failing to present the opinion conversely leads the court to an inference that either the opinion was not exculpatory or that there was no opinion of counsel.
The modified Hobson’s choice is known as the Quantum Dilemma, based on the case of Quantum v. Tandon.
In their en banc decision written by Judge Newman, the appellate court held that no adverse inference should flow from a party’s refusal to present an exculpatory opinion of counsel.
We now hold that no adverse inference that an opinion of counsel was or would have been unfavorable flows from an alleged infringer’s failure to obtain or produce an exculpatory opinion of counsel. Precedent to the contrary is overruled.
Knorr-Bremse is a German company, but is the owner of a U.S. patent on Disk Brake technology. (U.S. Patent No. 5,927,445). Dana Corporation and other defendants were found liable for infringement. And, based on an inference of an unfavorable counsel, the defendants were found liable for willful infringement. Although no actual damages were awarded, because of the finding of willful infringement the court awarded partial attorney fees under 35 U.S.C. § 285.
During litigation, the defendants told the court that they had consulted European and United States counsel concerning Knorr-Bremse’s patents, but declined to produce any legal opinion or to disclose the advice received, asserting the attorney-client privilege. The district court found that "It is reasonable to conclude that such opinions were unfavorable."
The Decision:
In its decision, the Court answered four questions revolving around willfulness:
In the first question, the Court based its response on the strong historical significance of attorney-client and work-product privileges.
1. When the attorney-client privilege and/or work-product privilege is invoked by a defendant in an infringement suit, is it appropriate for the trier of fact to draw an adverse inference with respect to willful infringement?
The answer is "no." Although the duty to respect the law is undiminished, no adverse inference shall arise from invocation of the attorney-client and/or work product privilege.
In the second question, the Court found that there is no legal duty of a potential infringer to consult with counsel.
2. When the defendant had not obtained legal advice, is it appropriate to draw an adverse inference with respect to willful infringement?
The answer, again, is "no."
Question three revolved around the case at hand.
3. If the court concludes that the law should be changed, and the adverse inference withdrawn as applied to this case, what are the consequences for this case?
As an answer, the Court vacated the willfulness finding and remanded for a redetermination of willfulness in the absence of the inference of a nonexculpatory opinion.
The final question, number four, offered the Court the opportunity to create a clear rule that mounting a substantial defense to infringement should defeat a willfulness finding.
4. Should the existence of a substantial defense to infringement be sufficient to defeat liability for willful infringement even if no legal advice has been secured?
The answer is "no."
The Court concluded that willfulness involves a "totality of the circumstances" and should not be limited to a per se rule.
The Dissent:
Dissenting in part, Judge Dyk argued that enhanced damages for willfulness are punitive damages. Punitive damages are awarded to "punish reprehensible behavior." As such, there is a "substantial question as to whether the due care requirement is consistent with the Supreme Court cases holding that punitive damages can only be awarded in situations where the conduct is reprehensible. … I would recognize that the due care requirement is a relic of the past and eliminate it as a factor in the willfulness and enhancement analysis."
Note: Paul Berghoff and Joshua Rich of McDonnell Boehnen Hulbert & Berghoff took part in an amicus curiae brief submitted by the Intellectual Property Owners Association.
According to Dan Boehnen, also of McDonnell Boehnen, "clients often spend thousands of dollars to obtain window-dressing opinions that are designed solely to defend against a charge of willful infringement. Also, clients sometimes feel compelled to have different law firms handle opinion work versus litigation work. All that artificial conduct is likely to be swept away by the Court’s recent decision."
Cite as Dennis Crouch, Landmark Decision Strengthens Attorney-Client Privilege, Patently-O, September 14, 2004 available at https://patentlyo.com.
Linear Technology v. Impala Linear and Maxim Integrated (Fed. Cir. 2004)
After losing an appeal last month, Maxim filed a request for an en banc rehearing. Although the court denied the petition to rehear, it did issue a substitute opinion in the case.
Summary:
Because genuine issues of material fact have been raised concerning Maxim’s contributory infringement or inducement, we vacate the district court’s summary judgment of no contributory infringement or inducement of the current reversal method claims of the ’178 patent.Because Maxim failed to raise a genuine issue of material fact, the matter of inventorship was amenable to determination on summary judgment on the undisputed factual premises.On these premises, the district court correctly held that Vinsant was not a joint inventor of the ’178 patent.
As in the prior opinion,the court found error in the district court’s claim construction. Vacated-in-part, affirmed-in-part, and remanded.
The Federal Circuit has created a stir in its recent decision to grant an en banc review of Phillips v. AWH.
Chief Judge Mayer dissented from the court’s decision to review. Mayer argued that the real question for review is whether Markman was correctly decided.
Until the court is willing to reconsider its holdings in Markman v. Westview Instruments … that claim construction is a pure question of law subject to de novo review in this court, any attempt to refine the process is futile. Nearly a decade of confusion has resulted from the fiction that claim construction is a matter of law, when it is obvious that it depends on underlying factual determinations which, like all factual questions if disputed, are the province of the trial court, reviewable on appeal for clear error. To pretend otherwise inspires cynicism. Therefore, and because I am convinced that shuffling our current precedent merely continues a charade, I dissent from the en banc order.
My former boss, Patricia Thayer at Heller Ehrman commented in the Recorder that she thinks Mayer may get his wish.
“I’d love it if the federal district courts got together” to write an amicus brief on the issue, Thayer said. “It’s difficult for them that [they are accorded] no deference. I wouldn’t be surprised if that gets changed in the process.”
This is the fourth article in our coverage of the Phillips en banc appeal. Read Part I, Part II, and Part III.
This is Part III of our coverage of the Phillips – AWHen banc order. Read Part I and Part II.
… In concurrence, Judge Rader argued for en banc ruling on another issue. Rader’s concern is whether claim construction is even amenable to “strictly algorithmic rules.” As an example, Rader questions whether an approach of first looking at the specification, folowed by examining dictionary definitions would be workable. Alternatively, claim construction may be better achieved by chosing a methodology on a case by case basis — “thus entrusting trial courts to interpret claims as a contract or statute.”
The en banc review of Phillips v. AWH will likely change the face of patent litigation. For example, the Federal Circuit gives no deference to trial court claim construction rulings. Thus, claim construction is often overruled on appeal. In Phillips, the appellate body will review this approach and determine whether it would be appropriate to afford some deference to the trial court rulings.
The Federal Circuit has agreed to rehear the appeal en banc in order to resolve issues concerning the construction of patent claims and the use of dictionaries. The following questions are to be briefed:
1. Is the public notice function of patent claims better served by referencing primarily to dictionaries to interpret a claim term or by looking primarily to the patentee’s use of the term in the specification?
2. If dictionaries should serve as the primary source for claim interpretation, should the specification limit the full scope of claim language (as defined by the dictionaries) only when the patentee has acted as his own lexicographer or when the specification reflects a clear disclaimer of claim scope? If so, what language will satisfy those conditions?
3. If the primary source for claim construction should be the specification, what use should be made of dictionaries?
4. Instead of viewing the claim construction methodologies in the majority and dissent of the now-vacated panel decision as alternative, conflicting approaches, should the two approaches be treated as complementary methodologies such that there is a dual restriction on claim scope, and a patentee must satisfy both limiting methodologies in order to establish the claim coverage it seeks?
5. When, if ever, should claim language be narrowly construed for the sole purpose of avoiding invalidity.
6. What role should prosecution history and expert testimony play in determining the claim term meaning?
7. Is it appropriate for this court to accord any deference to any aspect of trial court claim construction rulings? If so, on what aspects, in what circumstances, and to what extent?
Amicus curiae briefs may be filed and should be limited to 5,000 words, and be filed within sixty days from the date of this Order.
Teva Pharmaceuticals v. Pfizer (Fed. Cir. 2005) (On petition for rehearing). 
