Tag Archives: First to Invent

Despite Therasense: Federal Circuit Finds Aventis Patent Unenforceable

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by Dennis Crouch

This is an important case showing that inequitable conduct based upon failure to cite prior art will continue to be viable.

Aventis Pharma v. Hospira (Fed. Cir. 2012)

Aventis holds two patents that cover its branded chemotherapy drug Taxotere. According to the patent, the active drug is mixed with other ingredients to form a perfusion that can be injected intravenously without causing anaphylactic or alcohol intoxication symptoms.

In litigation to prevent Hospira from bringing a generic form to market, the district court ruled the patents unenforceable for inequitable conduct during prosecution of the patents. On appeal, the Federal Circuit has affirmed that holding. This case marks the first time that the appellate court has upheld an inequitable conduct finding since raising the standard of proof in the 2011 Therasense v. BD en banc decision.

Inequitable conduct occurs when a patent applicant intentionally and materially misleads the patent office. Both intent and materiality must be proven. In Therasense, the court additionally held that materiality is normally only satisfied if the misconduct was a “but-for” cause of the given patent being issued. (Caveat for egregious misconduct).

This case involves the most typical inequitable conduct allegation: failing to notify the USPTO of a known reference that impacts patentability.

Lets walk through the steps of materiality and intent:

Materiality: In addition to inequitable conduct, the court also held a few of the patent claims invalid as obvious – relying upon the withheld reference. According to the court, this fact alone proves materiality – since the reference rendered the claim invalid. Two procedural issues add to this conclusion: (1) Claims are (according to the law) more narrowly construed at trial than at the USPTO and therefore references that are material at trial would have definitely been material at the USPTO. (2) Invalidation requires clear and convincing evidence but proof of materiality for inequitable conduct only requires a preponderance of the evidence. As such, information that works to prove the higher standard would certainly work to prove the lower standard.

Intent: To win, the defendant must show that the defendant had specific intent deceive. This can be proven by inference, but only if that conclusion is the “single most reasonable inference able to be drawn from the evidence.” Here, the inventor testified that he saw the references as explaining failed experiments and therefore need not be disclosed to the PTO. However, the judge found that the inventor lacked credibility and that some evidence suggested the inventor had learned valuable information from the reference.

On appeal, the court confirmed that these elements were met and that the patents were therefore obtained through inequitable conduct.

A New Record Number of Patents

Patent

This week the USPTO issued a record number 4,976 utility patent — setting an all time single-week high. As it turns out, the top-ten single week issuance numbers all come from fiscal year 2012. (The top seven come from calendar year 2012 even though we are only 13-weeks into the year).  As the PTO continues to ramp-up examination throughput, we can expect these numbers to continue to rise.  The PTO does not regularly release information regarding the number of abandoned cases and so I have been unable to confirm whether those numbers have risen in parallel.

 
Top Grant Dates Count
3/20/2012 4,976
3/6/2012 4,880
1/10/2012 4,834
1/31/2012 4,831
2/14/2012 4,826
2/21/2012 4,825
2/28/2012 4,818
11/22/2011 4,778
11/15/2011 4,777
12/6/2011 4,777

The newest group of patents include No. 8,141,114 issued to Microsoft.The '114 patent is directed to a "content rating and recommendation system." I wonder whether the claim should be considered dead-on-arrival based upon its failure to claim patent eligible subject matter under 35 U.S.C. 101.  The examiner had initially rejected the claims as subject matter ineligible in a 2008 office action rejection. That rejection was withdrawn after Microsoft amended the claim preambles to include the phrase "computer-readable medium" in the system claims and "implemented using a processor" in the method claims.

The system claim:

1. A content ratings and recommendation system implemented using a computer-readable medium, comprising:

a ratings service configured to compile ratings of programs for a rating system that is associated with a group of viewers where at least one viewer of the group of viewers establishes the rating system including at least one standard of the rating system, and where at least some viewers of the group of viewers use the rating system to rate the programs for the group of viewers, wherein the rating system represents flexible characterization of the media content of the programs based on at least one of any possible descriptive aspect of the program;

a recommendation service configured to provide program recommendations to the viewers of the group of viewers based on the rating system, the recommendation further being configured to monitor viewing selections of a viewer that is not a member of the group of viewers, and to offer a membership into the rating system to the viewer based on the viewing selections of the viewer and the at least one standard of the rating system; and

a rater monitoring service configured to receive a rating of a particular viewer who used the rating system to rate a particular program and to provide the rating of the particular viewer to the viewers of the group of viewers, the rating of the particular viewer relating to a reliability or credibility of the ratings made by the particular viewer.

The patent application was originally filed six years ago in 2006.  The examiner issued a non-final rejection followed by a final rejection. At that point, Microsoft filed a first request for continued examination (RCE) and the examiner issued a non-final rejection followed by another final rejection.  At that point, Microsoft filed a second RCE and the examiner issued two more rejections. The examiner then considered Microsoft's amendment-after-final and allowed the case.  During this time, Microsoft amended the claims six different times before eventually finding a set of claims that the examiner found allowable. During this time, the examiner stuck with the same prior art rejections that were found in the original rejection with the caveat that the examiner added one additional reference to the fifth office action.

It is interesting (at least to me) that none of the three listed inventors work at Microsoft any longer.

Federal Circuit Continues Split on Patentable Subject Matter

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by Dennis Crouch

Myspace, Inc. v. GraphOn Corp. (Fed. Cir. 2012)

In yet another case, the Court of Appeals for the Federal Circuit has identified the wide chasm separating members of the court on issues involving patentable subject matter under 35 U.S.C. § 101. The majority opinion here – penned by Judge Plager and joined by Judge Newman – argues that courts should avoid the metaphysical question of whether an invention is unpatentably abstract whenever possible and instead focus on the conditions of patentability found in §§ 102, 103, and 112 of the patent act.

Judge Plager writes:

[C]ourts could avoid the swamp of verbiage that is § 101 by exercising their inherent power to control the processes of litigation, Chambers v. NASCO, Inc., 501 U.S. 32, 43 (1991), and insist that litigants initially address patent invalidity issues in terms of the conditions of patentability defenses as the statute provides, specifically §§ 102, 103, and 112. If that were done in the typical patent case, litigation over the question of validity of the patent would be concluded under these provisions, and it would be unnecessary to enter the murky morass that is § 101 jurisprudence. This would make patent litigation more efficient, conserve judicial resources, and bring a degree of certainty to the interests of both patentees and their competitors in the marketplace.

Judge Plager goes on to adopt the analogy to the Constitutional Avoidance Doctrine that Rob Merges and I suggested in our 2010 article titled Operating Efficiently Post-Bilski by Ordering Patent Doctrine Decision-Making.

In a sense, § 101 of the Patent Act can be thought of as the patent law analogy to the Bill of Rights of the Constitution. The latter sets in the broadest terms (“due process,” “equal protection”) the fundamental parameters of the citizenry’s legal right. In the context of patent law, § 101 similarly describes in the broadest terms the legally-protected subject matter an inventor can seek to patent: a “process, machine, manufacture, or composition of matter . . . .” The Supreme Court has wisely adopted a policy of not deciding cases on broad constitutional grounds when they can be decided on narrower, typically statutorily limited, grounds. Following the Supreme Court’s lead, courts should avoid reaching for interpretations of broad provisions, such as § 101, when more specific statutes, such as §§ 102, 103, and 112, can decide the case.

On the merits of the decision, the majority affirmed a lower court summary judgment holding that the asserted claims are invalid as anticipated and obvious under §§ 102 and 103(a) respectively.

In this case, the lower court never ruled on the question of patentable subject matter and none of the party briefs refer to Section 101, unpatentable abstract ideas, or Bilski v. Kappos. However, the majority felt compelled to discuss Section 101 based upon the dissenting opinion by Judge Mayer who opined that the patent intrinsically raises a threshold question of patentable subject matter that must be addressed.

Judge Mayer writes in dissent:

The issue of whether a claimed method meets the subject matter eligibility requirements contained in 35 U.S.C. § 101 is an “antecedent question” that must be addressed before this court can consider whether particular claims are invalid as obvious or anticipated. In re Comiskey, 554 F.3d 967, 975 n.7 (Fed. Cir. 2009). GraphOn Corporation (“GraphOn”) owns four patents, U.S. Patent Nos. 6,324,538 (the “‘538 patent”), 6,850,940, 7,028,034, and 7,269,591, which contain exceedingly broad claims to a system that allows users to exert control over the content of their online communications. This court must first resolve the issue of whether the GraphOn patents are directed to an unpatentable “abstract idea” before proceeding to consider subordinate issues related to obviousness and anticipation. See Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010) (noting that whether claims are directed to statutory subject matter is a “threshold test”); Parker v. Flook, 437 U.S. 584, 593 (1978) (“Flook”) (emphasizing that “[t]he obligation to determine what type of discovery is sought to be patented” so as to determine whether it falls within the ambit of section 101 “must precede the determination of whether that discovery is, in fact, new or obvious”); Comiskey, 554 F.3d at 973 (“Only if the requirements of § 101 are satisfied is the inventor allowed to pass through to the other requirements for patentability, such as novelty under § 102 and . . . non-obviousness under § 103.” (citations and internal quotation marks omitted)). I therefore respectfully dissent from the court’s judgment.

The dissent agrees with the majority (and our) suggestion that § 101 be treated as analogous to the US Constitution – but argues that the statute “is the standard expressed in the Constitution and it may not be ignored.” Rather, the dissent writes “a robust application of section 101 is required to ensure that the patent laws comport with their constitutionally-defined objective.”

Below, I have excerpted claim 1 of the patentee’s U.S. Patent No. 6,324,538 with a 1995 priority filing date:

1. A method of publishing information on a computer network comprising the steps of: creating a database entry containing information recieved from a user of the computer network, wherein the information includes data representing text, a universal resource locator, an image, and a user-selected category; generating a transaction ID corresponding to the database entry; password protecting the entries; displaying the entries in accordance with the user-selected category; presenting the information to a user in hyper text markup language in response to a user’s request.

The dissent is correct that the invention as claimed is incredibly broad.  However, this is the exact type of case that is just as easily eliminated on grounds of anticipation or obviousness.

Note for a later post — the majority opinion is also important for its statement on the theory and practice of claim construction.

Contingent Fee Patent Litigation

Patent

Review by Dennis Crouch

Dave Schwartz is a law professor these days. However, before joining Chicago-Kent he was litigator for more than a decade. Schwartz's most recent article is interesting study of the practice of contingent fee patent litigation. And, the article is appropriately named "Contingent Fee Patent Litigation." [Download the Article from SSRN] The meat of the article is based on Schwartz's interviews with a set of forty litigators who work on contingency fee basis and a privately collected set of contingency fee agreements.

From the abstract:

Drawing upon several sources of data, including in-depth interviews with over forty lawyers involved in contingent representation in patent litigation and examination of over forty contingent fee agreements, this Article provides the first comprehensive analysis of the rapid evolution of contingent representation in patent law. The development of contingent representation includes top-tier litigation firms recently transitioning to taking on high value contingent cases, small entrants representing plaintiffs in lower value cases, and numerous general practice firms experimenting with contingent patent litigation. These diverse players each select and litigate cases using varied methods, resulting in different levels of risk and reward. The Article uses the study of these players to discuss how and why attorney-client contingent relationships established in the nascent marketplace of patent contingent litigation differ from other types of contingent litigation, and what patent law can teach about contingent representation in general.

Schwartz particularly rejects the conclusions drawn by Texas Professors Ronen Avraham and John Golden that former medical malpractice and mass tort lawyers have moved into the contingency fee patent law arena. Rather, Schwartz concludes that "most lawyers whose practice consists of substantially all patent contingent litigation are primarily and historically patent litigators. They are not former medical malpractice, personal injury, or other tort lawyers."

I might quibble a bit with Schwartz's prognostication that the America Invents Act (AIA) is likely to reduce the filing of weak patent claims where the patentees are hoping to settle for the cost of defense. The basis for this is the AIA's new anti-joinder rule that "joining multiple defendants in many circumstances." Schwartz correctly writes that "this means that the practice of suing multiple unrelated defendants in one cause of action is prohibited going forward." However, in my own experience filing patent complaints, it is not much more difficult to file 20 separate actions as it is to file one action against 20 defendants. The primary difference is the $350 federal court filing fee and perhaps a need for a slightly better system of managing multiple cases. However, those fees are still small when compared with settlement figures.

One topic fascinating to me that is only lightly discussed by Schwartz is financing for the lawyers themselves and the rise of Wall Street hedge fund and bank financed patent litigation. Those underlying financing issues almost certainly drive elements of contingent fee patent litigation.

Download the Article from SSRN

APPLE V MOTOROLA in the EPO and Germany – patentability of user interface features

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Guest Post by Paul Cole of the UK firm of Lucas & Co.

According to BBC News last Friday, Apple has succeeded in the German courts in enforcing a patent for a user interface feature for its mobile devices. The ruling demonstrates the value of European patents for "software" inventions where a "technical" effect can be demonstrated. The claims in the granted patents and the problems that they solve provide insight about what features of a user interface might be regarded as "technical" by the EPO. The advantages to a software developer of being able to patent innovative interface features that are important to the "look and feel" of the device and the software running on it are self-evident.

The affirmed patent is EP-B-1964022 which relates to the "slide to unlock" feature found in iPhones. The claim as granted is set out below:

A computer-implemented method of controlling a portable electronic device comprising a touch-sensitive display, comprising:
-detecting contact with the touch-sensitive display while the device is in a user-interface lock state;
-transitioning the device to a user-interface unlock state if the detected contact corresponds to a predefined gesture; and
-maintaining the device in the user-interface lock state if the detected contact does not correspond to the predefined gesture; characterized by
moving an unlock image along a predefined displayed path on the touch-sensitive display in accordance with the contact, wherein the unlock image is a graphical, interactive user-interface object with which a user interacts in order to unlock the device.

A copy of the decision is not yet available online, but study of the online file of the European patent application (which was not opposed after grant) is instructive. The Examining Division accepted that the provision of a device control method with visual feedback was a technical problem but objected that the claimed subject matter was obvious because dragging and dropping were known. In their reply, Apple argued that the objective technical problem was to provide a more efficient user-friendly procedure for unlocking a portable device and to provide a sensory feedback to the user regarding progress towards satisfaction of a user input condition that was required for unlocking to occur. As set out in the claim, the unlock image signalled to the user that the device was locked and simultaneously indicated a contact point that a user had to touch in order to unlock the device. The displayed path indicated to the user where and how the unlock image had to be moved and the current position of the image indicated progress already made towards the unlocked condition. The method was easier than in the prior art where a sequence of operations had to be memorised.

The second patent, EP-B-2059868 which relates to the handling of digital images, has not yet been ruled on by the German courts However, the granted claim and the reasons for grant are also of interest since any iPhone user will be familiar with the "Camera-Roll" feature in question.The main claim is set out below.

A computer-implemented method, comprising: at a device with a touch screen display:
-detecting a first movement of a physical object on or near the touch screen display;
-while detecting the first movement, translating a first digital object displayed on the touch screen display in a first direction, wherein the first digital object is associated with a set of digital objects; characterized in that:
-in response to display of a previously hidden edge of the first digital object and continued detection of the first movement, displaying an area beyond the edge of the first digital object;
-after the first movement is no longer detected, translating the first digital object in a second direction until the area beyond the edge of the first digital object is no longer displayed;
-detecting a second movement of the physical object on or near the touch screen display; and
-in response to detecting the second movement while the previously hidden edge of the first digital object is displayed, translating the first digital object in the first direction and displaying a second digital object in the set of digital objects.

It appears from the file of the granted patent (which again was not opposed) that the technical effect of allowing a user to navigate within an image and to switch between images with a minimum of user input types was sufficient to support patentability.

The EPO acted as International Searching Authority, International Preliminary Examination was not necessary since the written opinion accompanying the search was favourable to patentability, and no objections were raised on entry into the European regional phase. The advantages to US applicants of using the EPO as ISA and possibly subsequently IPEA if allowable subject matter is likely to be identified are also self-evident.

It is instructive to compare these two granted European patents with another "look and feel" application which was refused by the EPO (EP1249014, Appeal Board decision T 0050/07; US 6396520). Interestingly this is the only Apple patent or application which appears to have been the subject of proceedings before an EPO Appeal Board. The invention concerned transition of a window between a maximised state and an icon state on the taskbar.

The main claim before the EPO Appeal Board read:

A method of transitioning a window on a computer screen between an open state and a minimized state, comprising the steps of:
-obtaining location information associated with a first window position in the open state;
-obtaining location information associated with a second window position in the minimized state;
-defining a set of curves, wherein said curves connect two selected points that relate to a dimension of said window in its first position to corresponding points of said window in its second position; and
-displaying said window at successive positions within said curves from said first position to said second position while scaling said dimension of the window to fit within said curves in a manner so as to give the appearance of sliding.

The issues before the Appeal Board provide an object lesson in how the state of the art at the application date, the exclusions as to patentable subject matter under a.52 EPC and the limitations of the disclosure of the application itself can exert a collective "squeeze" such that the result is refusal.

The closest prior art was US 6002402 (Schacher, Symantec) which showed a window transitioning between a maximised and an icon state, and novelty was to be found in the set of curves through which the transition took place producing a "funnel-like" effect and the display of the window at successive positions while it was being scaled down.

Arguments based on improved functionality received short shrift, the Appeal Board observing:

"Moreover, the alleged ergonomic improvement achieved by directing the user's attention to the final destination of the minimized window, so that the user will remember its location and, thus, find it again more rapidly, is not convincing either. As far as the precise location of the minimized window on the task bar is remembered at all by the user, this will only be ergonomically valuable to the user for a short amount of time, after which it will normally be forgotten. Furthermore, as minimized windows are at any rate typically arranged according to some predefined scheme (typically added at the end of the task bar or returned to the corresponding application button on the task bar) the user would already know where to find the minimized window. Therefore, the board is not convinced that there would be any added ergonomic value in drawing the user's attention to the final destination of the minimized window in the claimed manner."

The differences between the invention and the prior art were therefore held to reside in the production of an aesthetic effect. Since that effect had no technical character, it could not in itself contribute to inventive step. However, it could be taken into account in formulating the objective technical problem over Schacher which was how to achieve the specified "funnel-like" effect. The information in the specification in this regard was limited, as indicated by the flowchart below:

The description did not show that there was any difficulty in the shifting and scaling operations, and on the contrary the description explained that a variety of techniques for doing this would be apparent to those of ordinary skill in the art. Unsurprisingly, therefore, the Appeal Board held that the achievement of the indicated technical effect was held to be straightforward for a designer of graphical user interfaces.

If Apple had drilled further down into the transition method than they did, was there anything else that could have saved the application? The look and feel of a window as it transitions to and from the taskbar is a striking effect which it is submitted impresses most users each time they see it happen. The specification explains that the display is updated line-by-line during the transition and the image is recalculated for each line, but that was evidently not enough for allowance and in any event would be easy to avoid. However, in addition to software the invention is in the field of moving images where visibility and human persistence of vision are important. Was there an optimum time, or a range of optimum times within which the transition could take place without interfering with the operation of the computer and which would display the most clearly visible and most aesthetically satisfying sequence of images to the user? It is possible that the range of times for which the "micro-movie" that users see at each window transition lasts would not have been held to be obvious and instead would have been held to require thought both from the operating system point of view and from the standpoint of user trials. A limitation along these lines could have been something that the Appeal Board might have found less easy to treat dismissively.

One take-away message for US applicants is the need to draft applications bearing in mind the exclusions under the EPC: stating as one of the main objects of the inventions "to provide more aesthetically pleasing operations" plays straight into the hands of an Examining Division or Appeal Board within the EPO and even if such objects can and should be stated, functional objects are best set out first. Another message is not to overlook the role of the human user in the invention: in the refused application the needs of the computer and the attractiveness of the micro-movie as a matter of shape were explained but what was necessary for the user to see the "micro-movie" and how long it should last were left unstated.

Dealertrack v. Huber: Unpatentable “computer aided” claims

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By Jason Rantanen

Dealertrack v. Huber (Fed. Cir. 2012) Download 09-1566
Panel: Linn (author), Plager (concurring in part and dissenting in part), and Dyk

The Federal Circuit's opinion in Dealertrack adds to the evolving law on subject matter patentablility of computer-related inventions. It should be read in connection with two other recent decisions in this area, Ultramercial v. Hulu, 657 F.3d 1323 (Fed. Cir. 2011) and CyberSource Corp. v. Retail Decisions, 654 F.3d 1366 (Fed. Cir. 2011).

At issue was the subject matter patentability of claims 1, 3, and 4 of Patent No. 7,181,427.  Claim 1 is representative:

1. A computer aided method of managing a credit application, the method comprising the steps of:
[A] receiving credit application data from a remote application entry and display device;
[B] selectively forwarding the credit application data to remote funding source terminal devices;
[C] forwarding funding decision data from at least one of the remote funding source terminal devices to the remote application entry and display device;
[D] wherein the selectively forwarding the credit application data step further comprises:
[D1] sending at least a portion of a credit application to more than one of said remote funding sources substantially at the same time;
[D2] sending at least a portion of a credit application to more than one ofsaid remote funding sources sequen-tially until a finding [sic, funding] source returns a positive funding decision;
[D3] sending at least a portion of a credit application to a first one of said remote funding sources, and then, after a predetermined time, sending to at least one other remote funding source, until one of the finding [sic, funding] sources returns a positive funding deci-sion or until all funding sources have been exhausted; or,
[D4] sending the credit application from a first remote funding source to a second remote finding [sic, funding] source if the first funding source de-clines to approve the credit application.

On appeal, the CAFC agreed with the district court that these claims are "directed to an abstract idea preemptive of a fundamental concept or idea that would foreclose innovation in this area," and thus are invalid under 35 U.S.C. §101.  In its simplest form, the court reasoned, the claimed process explains the basic concept of processing information through a clearinghouse.  "Neither Dealertrack nor any other entity is entitled to wholly preempt the clearinghouse concept."  Slip Op. at 35. 

Nor was the link to a computer sufficient to limit the claims to an application of the idea.  "The claims are silent as to how a computer aids the method, the extent to which a computer aids the method, or the significance of a computer to the performance of the method.  The undefined phrase "computer aided" is no less abstract than the idea of a clearinghouse itself."  Slip Op. at 35.  "Simply adding a computer aided limitation to a claim covering an abstract concept, without more, is insufficient to render the claim patent eligible."  Id. at 36.  In essence, the claimed process was akin to the unpatentable binary-coded decimal to pure binary conversion in Gottschalk v. Benson, 409 U.S. 63 (1972), and covered a clearinghouse process "using any existing or future-devised machinery."

This opinion completes a trio of recent opinions dealing with the patentability of computer-related inventions, the others being Ultramercial and CyberSource.  In Ultramercial, authored by Chief Judge Rader and joined by Judges Lourie and O'Malley, the court concluded that a process for monetizing copyrighted products using a computer fell on the patentable side of the abstract ideas versus patentable application divide.  Reaching the opposite result on the issue of abstractness, the CyberSource panel of Judges Bryson, Dyk (author) and Prost concluded that a method of verifying a credit card transatction over the Internet constituted an unpatentable process.  In Dealertrack, the court drew upon the reasoning in CyberSource while distinguishing Ultramercial.

The court also addressed issues of claim construction and indefiniteness. Particularly noteworthy was the court's conclusion that "i.e.:" in the context of a patent-in-suit could not be read definitionally. Slip Op. 17-20.

Towards a more efficient judicial process:  Writing in partial dissent, Judge Plager disagreed with the majority's decision to address subject matter patentability:

[A]s a matter of efficient judicial process I object to and dissent from that part of hte opinion regarding the '427 patent and its validity under §101, the section of the Patent Act that describes what is patentable subject matter.  I believe that this court should exercise its inherent power to control the processes of litigation, Chamberes v. NASCO, Inc., 501 U.S. 32, 43 (1991), and insist that litigants, and trial courts, initially address patent invalidity issues in infringement suits in terms of the defenses provided in the statute: "conditions of patentability," specifically §§102 and 103, and in addition §§112 and 251, and not foray into the jurisprudential morass of §101 unless absolutely necessary.

Judge Plager appears to be thinking in the same direction as suggested by Professors Crouch and  Merges in their recent article Operating Efficiently Post-Bilski by Ordering Patent Doctrine Decision-Making, 25 Berkeley Tech. L.J. 1673 (2010), in which they proposed that "the § 101 issue of Bilski be considered only when doing so is absolutely necessary to determine the validity of a claim or claims in a patent. We believe any claim that can be invalidated under one of the less controversial and less complex requirements for patentability—§§ 102, 103, and 112, for instance—ought to be disposed of without considering subject matter patentability. In other words, the Bilski issue should be avoided wherever it is not strictly necessary."

Falana v. Kent State University

Patent,

By Jason Rantanen

Falana v. Kent State University (Fed. Cir. 2012) Download 11-1198
Panel: Linn (author), Prost and Reyna

This case raises an important issue for developers of chemical compounds: when is an inventor's contribution to the method of making a claimed compound an inventive contribution?

The plaintiff in this Section 256 action, Dr. Olusegun Falana, was a post-doctoral researcher hired by Kent State and Kent Displays, Inc. to synthesize organic molecules in connection with a project to develop a temperature independent, high helical twisting power chiral additive for use in portable liquid crystal displays. During his employment, Dr. Falana developed a synthesis protocol for making a novel class of chemical compounds. Dr. Falana used this process to synthesize a compound within this genus designated "Compound 7." While Compound 7 possessed some of the desired characteristics, and represented "significant progress," it did not completely satisfy the project goals. Dr. Falana subsequently resigned from KDI and Kent State to take another position.

A few months after Dr. Falana's resignation, the Kent State professor who had selected Dr. Falana used Falana's synthesis protocol to synthesize another member of the novel class, "Compound 9." Compound 9 possessed the desired degree of temperature independence, and KDI and Kent State filed an application that led to Patent No. 6,830,789; the patent did not list Dr. Falana as in inventor.

Upon learning that he was not listed as an inventor, and after receiving an unsatisfactory response from the Chief Science Officer at KDI, Falana filed a Section 256 action to correct inventorship. The district court ruled in Falana's favor following a bench trial, further finding that the case was exceptional and awarding attorneys fees in an amount to be determined.

On appeal, the Federal Circuit concluded that Dr. Falana had contributed to the conception of the claimed invention. Drawing upon established law, the court first noted that "[c]onception of a chemical compound 'requires knowledge of both the specific chemical structure of the compound and an operative method of making it.'' Slip Op. at 12 (quoting Fina Oil & Chem. Co. v. Ewen, 123 F.3d 1466, 1473 (Fed. Cir. 1997). Here, Dr. Falana contributed to the method of making the claimed compound in a way the required more than the exercise of ordinary skill. The court recognized an important limitation on its holding, however:

"[This] does not mean that such an inventor necessarily has a right to claim inventorship of all species within that genus which are discovered in the future. "Once the method of making the novel genus of compounds becomes public knowledge, it is then assimilated into the store-house of knowledge that comprises ordinary skill in the art." Id. at 15-16.

Comment: The court was also careful to limit its holding in another way. It could have concluded that Falana was inventor simply due to his contribution to the method used to make Compound 9. It did not. Instead, the panel held "that a putative inventor who envisioned the structure of a novel genus of chemical compounds and contributes the method of making that genus contributes to the conception of that genus." Id. at 15 (emphasis added). It was able to articulate the rule in this way because it agreed with the district court that the patent's independent claims do not include a temperature independence limitation – in other words, the claims as construed were not limited to Compound 9, but rather encompassed the genus of compounds produced using Falana's synthesis protocol. Falana thus contributed both to the method of making the genus as well as the structure of the genus itself. The opinion implies that the outcome could conceivably be different if the claims had been limited to Compound 9. See, e.g., Slip Op. at 17.

Finality of Judgment: Federal Circuit practitioners may want to pay particular attention to the section at the end of the court's opinion in which it concluded that the district court's exceptional case determination was not before it in this appeal. Although the court's ruling on the issue of inventorship represented a final judgment, the court concluded that absent a determination of the attorney fees, the exceptional case determination did not. Nor, the court concluded, was there a basis for it to exercise pendent appellate jurisdiction over the issue.

Abbott Loses Patent Rights Due to Gap in Consultant Contract

Patent

Abbott Point of Care v. Epocal (Fed. Cir. 2012)

Abbott and Epocal both sell products used for point-of-care testing of blood samples. In 2009, Abbott sued Epocal in the Northern District of Alabama alleging infringement of its U.S. Patent Nos. 6,845,327 and 6,896,778 and asking the court to determine the legal title holder of the patents.

The patents list Dr. Lauks as the inventor and were filed in 2001 shortly after Lauks founded Epocal. The USPTO assignment database include a 2003 assignment from Lauks to Epocal and another assignment filed in 2009 shows the invention was assigned from Lauks to Abbott's predecessor company (i-STAT) vis-à-vis a 1984 employment contract. (Lauks himself did not sign another assignment). These assignments foreshadow the dispute: both Abbott and Epocal claim title to the patents.

It turns out that Lauks was an i-STAT employee in the 1980's and up through 1999 (apparently in New Jersey). He resigned in 1999 but took a position from 1999-2001 as a consultant to i-STAT. His employment agreement included a statement that he "hereby assign[s]" to i-STAT all rights to any invention that he "may make or conceive during [his] employment by … or which relate to any present or prospective activities of Integrated Ionics."

In reading this provision, the Federal Circuit first determined that the assignment clause ended in 1999 when Lauks resigned and the new consulting agreement signed by Lauks did not require that IP rights be transferred. And, in fact, the consulting contract included a provision that Lauks could also work on his own behalf. The Federal Circuit found such a clause to be in conflict with an automatic assignment. The court then concluded that – absent an agreement with i-STAT to assign his rights – Lauks was under no obligation to assign his patent rights to the company.

Because the 1999 Consultation Agreement is silent with respect to any assignment of Lauks' rights in inventions, improvements, or discoveries made or conceived during the consultation period, Lauks had no obligation to assign inventions from the consulting period to i-STAT. Thus, as the district court correctly concluded, the contract does not convey all substantial interest in the '328 or '772 patents.

These holdings were stated as being based upon New Jersey law (apparently the site of the contract). However, the court did not cite to New Jersey statute or precedent that would lead to these conclusions.

The appellate panel did look to New Jersey precedent in affirming the district court's refusal to allow Abbott additional discovery regarding the circumstances of the consulting contract. The court found the contract's plain language clear and unambiguous and that additional extrinsic evidence could not change that determination.

Chief Judge Rader penned the majority opinion, which was signed by Judge Lourie. Judge Bryson filed a dissent.

In dissent, Judge Bryson identified some ambiguity in the 1999 consulting contract as to whether the assignment provisions in the prior employment agreements were incorporated by reference. Based upon that ambiguity, Judge Bryson would have allowed Abbott additional rights of pre-judgment discovery.

The case did not address whether Abbott may have "shop rights" to practice the invention.

2011 Recap: The Practically Important Elements of the America Invents Act of 2011

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As a new year begins, Paul Morgan reflects on the practical importance of the Leahy-Smith America Invents Act of 2011 – the major patent reform effort that was enacted in September 2011. Although admittedly oversimplified (like any short-list), Paul's list provides some food for thought for patent strategists. He looks forward to comments.

By Paul Morgan

1. Regarding the hyper-hyped "first inventor to file" replacing of "first to invent" — the number of situations in which two different parties file patent applications on the same or substantially the same invention, and the second to file obtains valid dominant patent claims, is miniscule (now less than 20 a year). Cases involving invention "derivation" are a small percentage of even that miniscule number. In other words, the removal of alleged prior "invention date" arguments is not a significant AIA change.

2. The most significant AIA changes, which will affect almost every patent applicant, are in the definitions of what counts as prior art. The AIA provides a considerable simplification (albeit with a few ambiguities). Also, most prior art will now become instant "bars-to-patentability." U.S. application foreign priority filing dates and foreign public disclosure dates both becoming U.S. prior art dates will provide a significant prior art increase. The ending of PTO Rule 131 alleged prior invention dates declarations "swearing behind" earlier prior art dates will have a limited effect on some patent grants, but little or no effect on successfully litigating patents. [Rule 131 declarations are ex parte, uncontested, and often inadequately examined, so they rarely survive litigation challenges and easily raise inequitable conduct issues.]

3. Delaying filing patent applications after publicly disclosing one's invention is foolishly dangerous now, and will remain so. It will also continue to destroy foreign patent rights. There is a [sole remaining] one year "grace period" for doing that, but that grace period is ambiguous as to its disclosure extent requirements and effect. Delaying the filing of at least provisional applications for new products still under development will become more dangerous even if kept secret, due to the above changes in prior art and its effective dates.

4. The AIA significant increases the value of trade secrecy protection (instead of or even in addition to patenting) for any inventions which can be kept secret while being commercially exploited. There is potential dual IP protection from the AIA elimination of "best mode" defenses. Even more so if disputed ambiguities in AIA 102(a)(1) are held to overrule the long-established Metalizing Engineering doctrine that "forfeits" patenting after having already commercially exploited an invention, which would allow tacking on full term patent protection after unlimited years of trade secrecy protection. A rather surprising impact of "patent" legislation.

5. The ability to eliminate any inequitable conduct defense before patent litigation is provided in the new "Supplemental Examination." [An ex parte reexamination solely for patent owners to request and participate in, and thus a potentially powerful new tool for patent enforceability, although its PTO rules and actual usage remain to be seen.]

6. Ending the "false marking suits" plague and the naming of numerous defendants in the same patent suit [to avoid venue transfers] is already accomplished. Also, there is a new "virtual" marking system that really ought to be used.

Finally, the practical effects of many other text-extensive AIA changes, such as the new or amended and Board-run inter partes reexaminations and 9 month only PGR opposition systems, are too soon to predict. Especially given their potentially dangerous estoppels, predictable higher costs, un-issued PTO rules, and the limited number of them that the PTO will accept each year.

Chisum on the New Rules of Patent Priority

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Don Chisum was already a leader in the patent field when his multi-volume treatise – Chisum on Patents – was first published in 1978. His authoritative explanation of the law has been cited by hundreds of court opinions and thousands of law review articles. Mr. Chisum has recently turned his attention to the Leahy-Smith America Invents Act and penned a new article titled Priority Among Competing Patent Applicants Under the American Invents Act. Although he had hoped to produce a straightforward explanation of the new priority rules, Chisum found a series of ambiguities and gaps in the new law that will be important for patent strategists. In a message to Congress, he concluded the paper as follows:

If the America Invents Act were a term paper submitted by a student in a patent law seminar, an instructor would, undoubtedly, send it back with a note: SOME GOOD IDEAS, SOME MUDDLED AND UNSUPPORTED IDEAS, POOR GRAMMAR: PLEASE REVISE AND CLARIFY.

Download the article here.

Federal Circuit Holds Defendant’s State of Incorporation (Delaware) Improper Venue

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By Dennis Crouch

54727largeLogoIn re Link_A_Media Devices Corp. (LAMD) (Fed. Cir. 2011)    

Introduction: The Federal Circuit has again asserted mandamus power to order a patent case to be transferred to a more convenient forum under 28 U.S.C. § 1404(a) – holding that Judge Robinson's denial of transfer out of Delaware was an abused of discretion.

Three facts make the case somewhat interesting and novel. First, the transfer is not out of Texas, but rather from Delaware to the Northern District of California. Second, the defendant, LAMD, who requested the transfer is a Delaware Corporation (although its operations are in California). Finally, the plaintiff, Marvell Int'l., is a foreign entity based in Bermuda although its subsidiary, Marvell Semiconductors, and the named inventors are all based in California.

Legal Background: The due process clauses of the US Constitution have been read to place personal jurisdiction limitations on the power of courts to pass judgment on non-resident parties. In patent cases, personal jurisdiction is rarely an issue because most defendants are national-players that have sufficient minimum contacts in every local jurisdiction.

Even when a court has personal jurisdiction over a case, the laws of civil procedure allow a court to transfer a case to a different jurisdiction "[f]or the convenience of the parties and witnesses, in the interest of justice." 28 U.S.C. § 1404(a). This provision in the law is derived from the common law doctrine of forum non conveniens and there continues to be cross-talk between the two docrines.

Lower Court Decision: In her decision to keep the case in Delaware, Judge Robinson primarily gave weight to three factors: (1) the plaintiff's choice of forum; (2) the defendant's choice of Delaware as its state of incorporation; and (3) the international (rather than regional) nature of the defendant. In addition, the court found no "congestion" problems or identified problems "with discovery or witness availability."

On appeal, the Federal Circuit reversed – holding that the fact that a defendant is incorporated in the forum state is only one factor to be considered in the analysis.

The Federal Circuit particularly pointed to four errors in the district court's analysis.

Choice-of-Forum: First, the court indicated that "far too much weight" was given to the plaintiff's choice of forum. While some weight may be given to that choice, the plaintiff's choice is given less deference when the forum is not the home-forum of the plaintiff. (Note, this result has the potential of being discriminatory to foreign entities under TRIPs because the foreign entities have no "home forum" in the US.)

State of Incorporation: Second, the appellate court held that heavy reliance on state of incorporation is inappropriate.

Neither § 1404 nor Jumara [the leading 3rd Circuit 1404 case] list a party's state of incorporation as a factor for a venue inquiry. It is certainly not a dispositive fact in the venue transfer analysis, as the district court in this case seemed to believe.

Convenience of Records: Judge Robinson refused to give weight to the convenience of witnesses and location of books and records – holding that those traditional 1404 factors are "outdated" except where truly regional defendants are litigating. The Federal Circuit held that at least some consideration should have been given to these factors.

Public Interest: Finally, the court looked to the interest of the forum jurisdiction (Delaware) in deciding the case and found it had very little interest because the state had no connection to the dispute and no connection to the parties other than the fact that LAMD is incorporated there.

Holding: The District Court is ordered to direct transfer of the case to the United States District Court for the Northern District of California.

  • It is important to note here that the Federal Circuit based its mandamus decision on 3rd Circuit law rather than Federal Circuit law.
  • Pilar G. Kraman discussed the district court decision at the Delaware IP Law Blog.

Divided Patent Ownership, Equitable Title, and Failed Assignments

Patent,

by Dennis Crouch

Gellman v. Telular Corp. (Fed. Cir. 2011)

Issues of standing continue to arise in patent infringement litigation. Well established precedent requires that plaintiffs suing for infringement collectively hold "all substantial rights" in the patent being asserted. Crown Die & Tool Co. v. Nye Tool & Mach. Works, 261 U.S. 24 (1923). Thus, if two entities jointly own a patent, standing would only be proper if both entities jointly filed the infringement action. A lesser explored area of the law relevant to this case involves the requirements to prove ownership and the potential burden-shifting effect of assignment recordation.

Gellman's lawsuit involves U.S. Patent No. 6,075,451 which lists Mayer Lebowitz and Jim Seivert as co-inventors. (Seivert's name is misspelled as Sievert on the patent document). Both inventors are now dead. Lebowitz's rights to the patent are being held in trust and the trustee has argued that Seivert's rights to the patent were previously assigned to Lebowitz as well. Supporting that assertion is an assignment from Seivert to Lebowitz that was recorded in the USPTO assignment database in 1998. Unfortunately for the Lebowitz Trust, the assignment document filed with the PTO had a blank signature line and the Trust has been unable to produce any evidence that the assignment document was ever signed.

Three important consequences flow from a conclusion that Seivert never transferred his interest to Lebowitz. First, Seivert's heirs,  beneficiaries, or their assigns now share ownership in the patent. In this case, it appears that Seivert did not designate a beneficiary and therefore ownership is split amongst his heirs according to state intestate law. Second, the Lebowitz trust has no standing to sue because it does not hold substantially all interests in the patent. Third, absent prior agreement, each co-owner of a patent has the full right to offer a license to the defendants to practice the invention, normally without any accounting or compensation to the other patent owners. Here, in a filing with the district court the defendants have asserted that they have each obtained a patent license and release from the Seivert estate.

The Lebowitz Trust (Gellman) made two additional arguments in an attempt to prove that rights had been transferred: (1) the consulting contract and (2) the hired-to-invent doctrine.

The consulting agreement between Seivert and Lebowitz included a clause that any “ideas, discoveries, [or] inventions” by Seivert “shall be and remain the exclusive property” of Lebowitz. And, in addition, Seivert agreed “to execute any and all assignments” necessary.  The agreement had a major problem in that the only record available was unsigned.  In examining the contract, the Federal Circuit additionally found that the agreement was inadequate to prove that a transfer occurred even if it had been properly executed. In particular, the court indicated that the future promise to execute an assignment suggested that no transfer had previously occurred.  The court wrote (I would argue incorrectly) that “[o]therwise, the 'execute any and all assignments' language in the contract is surplusage without relevant meaning.”

In reading the promise to assign, the court agreed that it may create an equitable claim to title in favor of Lebowitz.  However, the law is clear that equitable title is insufficient to confer standing.

Of note, the court's interpretation of the contract appears to be based entirely upon Federal Circuit law rather than state law.

Hired to Invent: Normally patent rights are held by the inventors until those rights are assigned in a written agreement.  This is true even when the inventor is an employee and the invention was created within the scope of the employment. There are a few limited exceptions to this practice that transfer patent rights through operation of law rather than through written assignment. One historic exception is the “hired-to-invent” doctrine that some courts have used to transfer ownership of patent rights to an employer when the employee is hired to make a particular invention. See, e.g., Solomons v. United States, 137 U.S. 342, 346 (1890). This hired to invent doctrine cannot help the Lebowitz Trust here because the doctrine has been interpreted to create “creates only an obligation for the employee to assign to his employer.”

Affirmed. Case Dismissed for Lack of Standing.

Next Steps: If the Lebowitz Trust wants to pursue the lawsuit, it will need to first force transfer of rights from the Seivert estate and then refile the suit against the accused infringers.

Are Patent Filings Increasing or Decreasing?

Patent

by Dennis Crouch

The USPTO recently reported that in FY2011 and for the first time in history, more than 500,000 patent applications were filed during the fiscal year. 500,000 is a large number, but it turns out that the report of increased patent filings should not be seen as suggesting an increase in innovative activity. Rather, as the charts below demonstrate, the number of new patent filings has actually decreased over the past five years.

112211_1847_DecreasingP1

The dramatic increase in reported application filings shown by the chart above is entirely explained by the USPTO's odd accounting practice that counts the procedural "request for continued examination" (RCE) as a utility application filing. Under US patent procedures, a patent applicant faces a decision point after receiving a final rejection from the patent examiner. Generally, the applicant can (1) appeal the rejection to the administrative board, (2) abandon the application, or (3) file an RCE along with new material regarding patentability of the invention. Once an RCE is filed (along with the required fee), the same patent examiner is ordinarily required to again review the application and give it full consideration as to the patentability of the claimed invention.

As the chart below demonstrates, the number of RCEs filed annually has increased dramatically – almost doubling over the past five years. At the same time, original utility patent application filings have dropped slightly. I.e., patent filings are down. (To be clear, "original" applications as used here also include utility applications that claim priority to US provisional applications, international patent applications (PCTs), and foreign patent applications.)

112211_1847_DecreasingP2

What's the point: A rise in filings is helpful for the USPTO because it allows the agency to justify increased funding requests; to show its stature amongst world patent offices; and to demonstrate that the agency truly serves as a gatekeeper. Unfortunately, the report is not accurate. The positive side of these numbers is that the steady filing numbers should give the PTO breathing room to address the backlog of 1.2 million pending utility patent applications. 

Evaluating Supplemental Examination

Patent,
By Jason Rantanen
As seen in the recent Powell v. Home Depot case that Professor Crouch wrote about last week, the net effect of a weakened inequitable conduct doctrine post-Therasense is an increase in the ability of applicants to engage in troubling behavior during patent prosecution.  My colleague Lee Petherbridge and I expressed this concern shortly after Therasense issued, particularly warning about its consequences for patent prosecutors who are arguably worse-off post-Therasense, caught between clients who may be more interested in playing fast and loose with the rules and their own ethical and legal responsibilities.
Therasense was not the only significant development in the area of inequitable conduct this year, however.  The creation of a mechanism for supplemental examination in the Leahy-Smith America Invents Act further alters the landscape of inequitable conduct, and not necessarily in a positive way.  In a short essay recently published in Michigan Law Review First Impressions, Professor Petherbridge and I examine the supplemental examination mechanism created by the AIA and conclude that it may jeopardize American innovation, job creation, and economic competitiveness.
A copy of the piece is available via SSRN.

Book Review: Introduction to Patent Law for Non-Lawyers

Book Review, Patent,

NotSoObviousby Dennis Crouch

Jeff Schox recently sent me a copy of his new book on patent law: Not So Obvious: An Introduction to Patent Law and Strategy. Schox uses the $39 paperback for the patent class he teaches to Stanford engineering students. The book is written in plain language and is clearly designed to be read by engineers wanting a first-cut understanding of the patent system and its purpose. In addition to patentability and infringement, the book also includes a nice chapter on inventorship and ownership rights. 

In the past, I have often recommended the "Patent it Yourself " book by David Pressman to inventors and others wanting to better understand the process. The problem with Pressman's book is that it has become so lengthy (596 pages) that it is no longer an easy resource for those more casually involved in the system.  Schox book likely fills that gap. (PIY is still a great resource for those more deeply involved in prosecution.)

Do others have recommendations of patent law resources for inventors who want to better understand the system without actually becoming patent agents? 

Classen Immunotherapies v. Biogen: The Broad, Broad Scope of Statutory Subject Matter

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By Jason Rantanen

Classen Immunotherapies, Inc. v. Biogen Idec (Fed. Cir. 2011) Download 06-1634-1649
Panel: Rader (offering "additional views"), Newman (author), Moore (dissent)

There is no doubt that the Federal Circuit continues to struggle mightily with Section 101.  If Myriad were not enough evidence of this, Classen Immunotherapies – and Judge Rader's additional views in particular – should remove all doubt.

Classen Immunotherapies holds three patents that it contends are infringed by virtually everyone: Patent Nos. 6,638,739; 6,420,139; and 5,723,283.  According to the patents, their inventor, Dr. Classen, has discovered that "the schedule of infant immunization for infectious diseases can affect the later occurrence of chronic immune-mediated disorders…and that immunization should be conducted on the schedule that presents the lowest risk with respect to such disorders."  Slip Op. at 5. Claim 1 of the '739 patent is illustrative of Classen's broad claim scope:

1. A method of immunizing a mammalian subject which comprises:

(I) screening a plurality of immunization schedules, by

(a) identifying a first group of mammals and at least a second group of mammals, said mammals being of the same species, the first group of mammals having been immunized with one or more doses of one or more infectious disease-causing organism-associated immunogens according to a first screened immunization schedule, and the second group of mammals having been immunized with one or more doses of one or more infectious disease-causing organism-associated immunogens according to a second screened im-munization schedule, each group of mammals having been immunized according to a different immunization schedule, and

(b) comparing the effectiveness of said first and second screened immunization schedules in pro-tecting against or inducing a chronic immune-mediated disorder in said first and second groups, as a result of which one of said screened immuni-zation schedules may be identified as a lower risk screened immunization schedule and the other of said screened schedules as a higher risk screened immunization schedule with regard to the risk of developing said chronic immune mediated disorder(s),

(II) immunizing said subject according to a subject immunization schedule, according to which at least one of said infectious disease-causing organism-associated immunogens of said lower risk schedule is administered in accordance with said lower risk screened immunization schedule, which administration is associated with a lower risk of development of said chronic immune-mediated disorder(s) than when said immunogen was administered according to said higher risk screened immunization schedule.

Classen asserts that the '139 and '739 patents are infringed "when a health care provider reads the relevant literature and selects and uses an immunization schedule that is of lower risk for development of a chronic immune-mediated disorder."  Slip Op. at 7.  According to Classen, this includes "the act of reviewing the published information, whether or not any change in the immunization schedule is made upon such review."  Id. The '283 patent is similar, except that it does not include the subsequent step of selecting an immunization schedule.  Classen asserts that the '283 patent is infringed "when a person reviews relevant information, whether the person is a producer of vaccines, a health care provider, or a concerned parent."  Slip Op. at 8.  The three patents list several hundred preexisting references relating to immunization schedules, the occurrence of immune-mediated disorders, and studies and reports from the field.

The district court granted summary judgment of invalidity of the asserted claims on the ground that they claimed an abstract idea.  On initial appeal, the CAFC affirmed, with Judge Moore penning an extremely short affirmance.  Following Bilski, the Supreme Court grant-vacate-remanded the case to the Federal Circuit, where it was assigned to the panel of Rader, Newman, and Moore.

 The Majority: Writing for herself and Judge Rader, Judge Newman concluded that while the '283 patent failed to satisfy Section 101, the '139 and '739 patent did.  Although the '139/'739 patents included a mental step, "precedent has recognized that the presence of a mental step is not of itself fatal to § 101 eligibility."  Slip Op. at 15.  Because the claims of these patents include the physical step of immunization, the majority held, they were directed to a "specific, tangible application."  Slip Op. at 18.  This was sufficient to assure the majority, which declined to offer any additional reasoning, of their subject matter patentablity.    On the other hand, the majority held, the '283 patent attempted to claim an abstract idea unfettered to any physical steps.  Thus, it was invalid under Section 101.

The Dissent: Judge Moore disagreed entirely.  "While I confess the precise line to be drawn between patentable subject matter and abstract idea is quite elusive, at least for me, this case is not even close."  Dissent at 6.  All three claims simply constitute abstract subject matter: "Having discovered a principle – that changing the timing of immunization may change the incidence of chronic immune mediated disorders – Classen now seeks to keep it for himself."  Dissent at 8.  While Judge Moore reserves her harshest criticism for the '283 patent, her views on the '139/'739 reach the same conclusion.  "The immunization step of the '739 patent, like updating the alarm limit in Parker v. Flook, 437 U.S. 584 (1978), is nothing more than post-solution activity."  Id. at 9.  That post-solution activity "does not transform the unpatentable principle – that a correlation exists between vacination schedules and incidence of chronic immune disease – into a patentable process.'  Id. at 10.

Judge Rader's Additional Views:  In an unusual move, Judge Rader, joined by Judge Newman, wrote separately to express frustration with the constant use of Section 101 challenges by accused infringers. 

In the last several years, this court has confronted a rising number of challenges under 35 U.S.C. § 101. The language of § 101 is very broad. Nevertheless, litigants continue to urge this court to impose limitations not present in the statute.

For a variety of policy reasons, Judge Rader urges, "[t]his court should decline to accept invitations to restrict subject matter eligibility."  Rader additional views at 2.  Chief among these is the problem that "eligibility restrictions usually engender a health dose of claim-drafting ingenuity," evasions that "add to the cost and complexity of the patent system and may cause technology research to shift to countries where protection is not so difficult or expensive."  Id. at 3.  

Comments: I am troubled by several aspects of the court's opinions.  Particularly concerning is the majority's apparent desire to abdicate the subject matter inquiry altogether, a desire expressed both implicitly, in the majority opinion's unwillingness to offer any substantive reasoning to support its ruling on the '139/'739 patents, and explicitly in Judge Rader's policy statement.  This approach seems problematic on its own, but becomes even more so when coupled with the numerous Supreme Court opinions relating to the issue of subject matter patentability – an area of traditional significance in the patent sphere.  While the Court may have repeatedly suggested that broad categorical rules may be inpermissible, it has nowhere suggested that subject matter arguments lack merit as a class, or that subject matter arguments must fail as a matter of course.  In particular, I find it difficult to see how the '139/'739 patents possibly survive scrutiny under Parker v. Flook, 437 U.S. 584 (1978).  The mental step itself is not a patentable subject, so how can combining it with an act (or the lack of an act) that has previously been done without the mental step make it patentable?   

Nor does Section 101 seem to present such a unique problem that the Federal Circuit should adopt a policy of declining to address arguments relating to it.  Even as Judge Rader criticizes the case law limiting subject matter patentablity because it encourages costly legal design-arounds, he joins with an opinion that does precisely that by drawing the line between the two sets of claims.  Mental step claims are now clearly out; mental step plus claims are now in.  And since every process is simply a link in a longer process, claim drafters need only look one step forward to avoid the effects of the majority's ruling.  Nor should the effects of Judge Rader's parade of horribles be limited to Section 101 – they strike me as equally applicable to Section 102, Section 103, and especially Section 112. 

 

 

 

 

Court Continues to Struggle with Claim Construction

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PatentLawImage139Retractable Technologies v. Becton, Dickinson and Company (BD) (Fed. Cir. 2011)

In 2010, Judge Folsom of the Eastern District of Texas confirmed the jury finding that BD was liable for infringing three of RTI’s retractable syringe patents and that BD’s invalidity arguments were not convincing. On appeal a two-member majority (Judges Lourie and Plager) reversed-in-part — finding that the district court had erred in its construing of the term “body” too broadly by not limiting the term to a “one piece body.” The majority opinion was written by Judge Lourie. Judge Plager filed a concurring opinion asking courts to focus on the “actual invention” when construing claims. Chief Judge Rader wrote in dissent that the majority’s construction improperly imported limitations from the specification into the claims.

I begin with Judge Plager’s minority view of focusing attention on the actual invention (rather than solely on the written claim language) that has been a recent topic for discussion in the legal academy. 

Plager writes:  

However much desired by the claim drafters, who want claims that serve as business weapons and litigation threats, the claims cannot go beyond the actual invention that entitles the inventor to a patent. For that we look to the written description. I have written elsewhere about the curse of indefinite and ambiguous claims, divorced from the written description, that we regularly are asked to construe, and the need for more stringent rules to control the curse.

I understand how a perfectly competent trial judge can be persuaded by the siren song of litigation counsel to give the jury wide scope regarding what is claimed. But it is a song to which courts should turn a deaf ear if patents are to serve the purposes for which they exist, including the obligation to make full disclosure of what is actually invented, and to claim that and nothing more.

Although the written description and enablement requirements are intended to ensure that the claim scope is commensurate with the disclosure, Plager’s approach has some merit as a mechanism for allowing courts to adjust patent scope based on disclosure problems rather than the binary valid/invalid choice available under Section 112 p1 defenses.

The Majority Claim Construction: The meaning of a patent claim is considered a question of law that is reviewed de novo on appeal.  That is, on appeal, no deference is to be given to the lower court’s opinion.  In the 2005 en banc decision of Phillips v. AWH, 415 F.3d 1303, the Federal Circuit wrote that claim meaning should be determined by looking at the words of the claims themselves; the patent specification; the prosecution history; and any relevant extrinsic evidence.  Phillips changed the law of claim construction by requiring that clams always be construed “in view of the written description.”

One-Piece Body: The claimed syringe includes a limitation to “a hollow syringe body comprising a barrel and having a front end portion and a back end portion, the back end portion further comprising at least one radially extending member providing finger grips for the syringe body.”  The district court looked primarily to the claim language in ruling that the claimed “body” is not limited to a one-piece structure (except for dependent claim 25 that did explicitly limit the body to “one piece”).

Claim Differentiation: On appeal, the Federal Circuit first addressed the claim differentiation argument and found a weak implication that a claimed “body” should be broader than a claimed “one piece body.”  

While the patents contain an independent claim that recites a “body,” with a dependent claim that limits the “body” to a “one-piece body,” none of the claims expressly recite a body that contains multiple pieces. Thus, while the claims can be read to imply that a “body” is not limited to a one-piece structure, that implication is not a strong one.

The decision suggests that the claim differentiation would have been a much stronger argument if a separate dependant claim had been limited to “a multiple-piece body” or “a non-one-piece body.”

Specification: In several decisions, the Federal Circuit has ruled that claim differentiation arguments will be outweighed by a contrary construction “dictated by the written description or prosecution history.”  Here, the court found that the specification’s background section discussing the prior dictated the a narrow construction. In particular, the background section of one of the asserted patents included the following line:

The prior art has not recognized that such a structure can be molded as a one piece outer body

And, the Summary of the Invention stated that the invented syringe “features a one piece hollow outer body.”  The specification discusses several embodiments of a one piece body and never discloses a body that consists of anything other than a one-piece body (except in disparaging the prior art).

In considering these competing arguments, the court noted that there is a very “fine line between construing the claims in light of the specification and improperly importing a limitation from the specification into the claims.”  Here, the court ruled the one piece body is necessary “to tether the claims to what the specifications indicate the inventor actually invented.”  

Chief Judge Rader’s dissent evokes the pre-Phillips notion that a patent claim can often be read in a vacuum unless scope is disclaimed during prosecution or terms specially defined in the specification.

He writes:

[Under Phillips] Claim language is to be given its ordinary and customary meaning, as understood by a person of ordinary skill in the art at the time of the invention. In this case, neither party contends that “body” has a special, technical meaning in the field of art, and thus claim construction requires “little more than the application of the widely accepted meaning of commonly understood words.” (quoting Phillips). The ordinary and customary meaning of “body” does not inherently contain a one-piece structural limitation. Moreover, neither the claim language nor the written description evinces intent by the patentee to limit the scope of “body” to one-piece bodies.

. . .

Certainly, the claims do not stand alone and must be read in light of the specifications. Nothing in the specifications, however, rebuts the strong presumption created by the claim language that “body” does not contain a one-piece structural limitation. The specifications do not reveal a special definition given by the inventor to the word “body.” Nor do the specifications contain an intentional disclaimer or disavowal of claim scope by the inventor.

This opinion serves as evidence that the court continues to struggle with claim construction and that there continues to be some amount of panel dependence in the results.

Calcar v. Honda: CAFC’s First Post-Therasense Inequitable Conduct Opinion

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By Jason Rantanen

American Calcar, Inc. v. American Honda Motor Co., Inc. (Fed. Cir. 2011) Download 09-1503-1567
Panel: Lourie (author), Bryson, and Gajarsa

In its first decision addressing the issue of inequitable conduct since Therasense v. Becton Dickinson, the Federal Circuit affirmed the district court's finding of materiality with respect to one patent, but remanded for further findings on materiality (in connection with the two remaining patents) and intent (with respect to all three patents).

The inequitable conduct issues in this case revolve around a family of patents sharing a common specification.  One of the patents, No. 6,330,497 ("the Three-Status patent"), relates to "a system that allows a user to select an option from a list, to be shown a preview of information about it, and then to activate it."  Slip Op. at 12.  Two other patents, Nos. 6,438,465 and 6,542,795 ("the Search patents") claim a system for performing searches on a system in a vehicle. 

Prior to the filing of the patent application, the inventors closely examined an Acura 96RL that contained a navigation system with features similar to those later claimed in the Three-Status and Search patents.  Although the 96RL system is described in the background section of the patent application, that description is limited to the navigation aspect of the system, not the user interface aspects.  Thus, the inventors "never disclosed to the PTO the aspects of the 96RL system relating to the three-status feature or the search feature."  Slip Op. at 14.This failure to disclose formed the basis of the district court's finding of inequitable conduct, which Calcar sought to overturn on appeal.

Jury Verdict Merely Advisory
In reaching its conclusion of inequitable conduct, the district court disregarded an advisory jury verdict of no inequitable conduct.  The CAFC rejected Calcar's argument that this constituted error.  "Inequitable conduct is equitable in nature, with no right to a jury, and the trial court has the obligation to resolve the underlying facts of materiality and intent…Where a court submits the question to a jury, and both parties agree that the jury findings will be advisory, the court shall treat them as such. [] That is the universal rule."  Slip Op. at 23 (internal citations omitted).

Appliation of Therasense
The CAFC next turned to the substance of the district court's findings.  With respect to the Three-Status patent, the panel concluded that, even under the "but-for" standard of Therasense, the district court had correctly found materiality.  "We agree with Honda that the undisclosed 96RL information was material to the Three-Status patent because the jury found, and the court upheld, the asserted claims as anticipated by the 96RL system, and ACI has not appealed that decision to us."  Slip Op. at 25. 

The materiality of the Search patents was more questionable, given that the jury had rejected Honda's invalidity arguments based on the 96RL system.  Nevertheless, "the withheld information may be material if it would have blocked patent issuance under the PTO's preponderance of the evidence standard, giving those patents' claims their broadest reasonable construction."  Id.  As a result the CAFC remanded to the district court to assess materiality under a "but-for" standard, applying the evidentiary standard and claim scope used by the PTO.  The CAFC did not give any guidance as to how the latter might differ from the scope previously applied by the district court.

The CAFC reached a similar result on intent, concluding that the district court had relied on a sliding scale standard, "basing its finding of intent significantly on the materiality of the 96RL system to the claimed invention."  Slip Op. at 26.  That approach was rejected in Therasense, and the CAFC remanded for further consideration in light of that opinion.

Note: The court also affirmed the district court's rulings of noninfringement as to several other patents and reversed its denial of judgment as a matter of law that another patents was invalid. 

For those who find this information noteworthy, the panel in this case included two members of the dissent in Therasense.  Judge Lourie, the author of this opinion, was a member of the Therasense majority.

A Modest Proposal?: Identifying the Invention within the Patent Application

Patent, Patent Prosecution, ,

Well known patent attorney Hal Milton recently published a new article in John Marshall’s Review of Intellectual Property Law (RIPL) that argues for the presentation of a “new result” within every patent application.  The majority of newly drafted patent applications do not follow Milton’s approach and instead seem to obscure the innovative elements of the claimed invention and fail to identify the problem being solved by the invention.  Milton writes:

Fifty years of examining, drafting, and prosecuting patents, including the patent at issue in KSR International Co. v. Teleflex, Inc., coupled with the KSR opinion and the lessons therefrom, led the author herein to the objective standard of a new result.  Inventors should be counseled that a new result should be sought out to justify the exclusive right of a patent.

Milton’s approach builds upon Paul Cole’s 2008 post-KSR article also published in RIPL. In that article, Cole reiterated that that evidence showing a new result is “necessary” under the European Patent Convention (EPC).

Milton’s approach also complements Ron Slusky’s approach to claim drafting that focuses a claim drafter’s attention first on the problem being solved by the invention. A major difference, however, is that Slusky does not explicitly advocate identifying the new result as part of the application itself.

Milton again:

In addition to identifying the new result or function to justify the exclusive right
of a patent, … that new result [should be] systematically recited throughout all sections of a patent application.  Because a court may interpret a patent based upon the intrinsic patent alone, without regard to extrinsic evidence presented in advocacy outside the patent document, extreme care should be exercised in preparing the original patent application with consistency throughout.  It is important to realize that patent offices, for the most part, grant patents based upon claims whereas the courts enforce patents based upon the entire patent.