Tag Archives: Inequitable Conduct

What Does a Patent Examiner Do with 900+ References?

Patent

Recently issued patent number 7,651,688 is not too remarkable. Its three claims cover an “antibody composition” with a particular arrangement of “sugar chains.” The oddity is that the first 10-pages of the patent document are filled with a listing of over 900 references submitted by the applicant in a series of six information disclosure statements. (The examiner included an additional nine references based on her search of the art).

The most common type of reference submitted in this case were documents from the file-histories of other US patent applications owned by the same entity (Kyowa Hakko Kirin Pharma, Inc.). Many of the submitted references are actually from the file-histories of related-cases being examined by the same examiner. See table below:

881.    Non-Final OA issued Oct. 17, 2007 in U.S. Appl. No. 10/581,413.
882.    1.111 Amendment filed Apr. 17, 2008 in U.S. Appl. No. 10/581,413.
883.    Restriction Requirement issued Jul. 28, 2008 in U.S. Appl. No. 10/581,413.
884.    Final OA issued Dec. 11, 2008 in U.S. Appl. No. 10/581,413. 

The result here is that the file history includes 13,689 pages of non-patent or foreign prior art. Most of those documents were submitted after the applicant had already received a notice of allowance.

Based on my cursory reading of the file history, I do not see that the prosecuting firm (Sughrue) did anything improper or wrong in this case. To the contrary, based on recent inequitable conduct cases, the patentee is clearly hoping to avoid charges of inequitable conduct based on ‘hiding’ references. Of course, the applicant did not indicate which (or which parts) of the 900+ references are most relevant and everyone is clear that the examiner is not going to read all of the references. As one practitioner wrote to me: “The balance is way off between useful information in an IDS and covering-our-asses in regards to inequitable conduct. Something needs to give.”

I contacted Ken Burchfiel of Sughrue. He provided the following on-point commentary:

Burchfiel: I can’t comment on U.S. Patent 7,651,688, except to commend its excellence, and instead offer more general observations on the infectious doctrine of inequitable conduct in a time of “absolute plague” 22 years after Kingsdown.

In view of the Federal Circuit’s decisions in Dayco Prods., Inc. v. Total Containment, Inc., 329 F.3d 1358 (Fed. Cir. 2003) and McKesson Info. Solutions, Inc. v. Bridge Med., Inc., 487 F.3d 897 (Fed. Cir. 2007), it is prudent to provide an examiner with citations to office actions in copending applications. Until the court or Congress acts to limit the ever-expanding scope of the meandering duty of disclosure, which now encompasses information that may be of marginal significance, reasonable practitioners have little choice but to follow the mandate of the Federal Circuit and identify Office Actions in other applications that could later be found to be material.  It may also be prudent to identify relevant foreign applications and office actions in an IDS, in view of Therasense, Inc. v. Becton, Dickinson & Co., No. 2008-1511 (Fed. Cir., Jan. 25, 2010). Although the prosecution history of a foreign application cannot be used to construe patent claims, it may now render them unenforceable. The extent of disclosure required in a given case is, of course, a judgment call that depends on many factors, including the indeterminate “reasonable examiner” standard applied by the Federal Circuit.

The question is not whether information cited in an IDS is helpful to the actual examiner, but rather whether it may later be deemed material to a “reasonable” examiner by a court.  While an actual examiner is required to follow the rules of practice, including the 1992 amendments to Rule 56 limiting the scope of “material” information, a “reasonable” examiner is not similarly bound under Digital Control, Inc. v. Charles Mach. Works, 437 F.3d 1309 (Fed. Cir. 2006).  It is not possible, as a practical matter, to determine the scope of information that may be later be deemed material to an unreasonable “reasonable” examiner (i.e., one who, unlike actual examiners, is not fettered by the rules of practice).

As the Federal Circuit again emphasized in Therasense, “if this could be regarded as a close case, which it is not, we have repeatedly emphasized that the duty of disclosure requires that the material in question be submitted to the examiner rather than withheld by the applicant. See LNP Eng’g Plastics, Inc. v. Miller Waste Mills, Inc., 275 F.3d 1347, 1361 (Fed. Cir. 2001) (“[W]hen a question of materiality is close, a patent applicant should err on the side of disclosure.”); LaBounty Mfg., Inc. v. U.S. Int’l Trade Comm’n, 958 F.2d 1066, 1076 (Fed. Cir. 1992) (“[A close case] makes it all the more necessary that the [reference] should [be] disclosed to the examiner. Close cases should be resolved by disclosure, not unilaterally by the applicant.”).” Whether or not this be divinest sense, it is nonetheless Therasense.

A patent solicitor’s life has never been an easy one. 

Notes:

  • Claim 1 reads as follows: An antibody composition comprising antibody molecules, wherein 100% of the antibody molecules comprising a Fc region comprising complex N-glycoside-linked sugar chains bound to the Fc region through N-acetylglucosamines of the reducing terminal of the sugar chains do not contain sugar chains with a fucose bound to the N-acetylglucosamines, wherein said antibody molecules bind to CD52.

Jury Wrong on Anticipation; But Claims are Obvious as a Matter of Law

Patent, , ,

[Updated to correct an error]

PatentLawPic901Therasense, Inc. (Abbott) v. Becton, Dickinson and Co. (Fed. Cir. 2010) (Case No. 2009-1008)

The Abbott patent covers a glucose meter designed with an additional sensor that ensures that a sufficient blood sample is obtained prior to the measurement. (Patent No. 5,628,890). Abbott sued BD and Nova Biomed for infringement. At the close of trial, the jury returned a verdict that the patent was infringed but invalid. The jury indicated that the patent was invalid for “anticipation or obviousness” and also invalid for failing the written description requirement of Section 112.

Law of Anticipation: On appeal, the Federal Circuit first determined that the jury instructions on the law of anticipation were incorrect. Notably, the district court judge had told the jury that “for anticipation, it is sufficient if the single reference would have informed those skilled in the art that all of the claimed elements could have been arranged as in the claimed invention.”  (emphasis added). Of course, anticipation requires that the reference disclose the same elements in the same arrangement. 

The requirement that the prior art elements themselves be “arranged as in the claim” means that claims cannot be “treated . . . as mere catalogs of separate parts, in disregard of the part-to-part relationships set forth in the claims and that give the claims their meaning.” Quoting Lindemann Maschinenfabrik GMBH v. Am. Hoist & Derrick Co., 730 F.2d 1452, 1459 (Fed. Cir. 1984).

Harmless Error: Under Federal Circuit law, erroneous jury instructions will lead to vacatur unless the error “could not have changed the result.”  Here, the jury decided obviousness and anticipation together and the Federal Circuit found that the overwelming evidence of obviousness renders the error on anticipation “harmless.”

“[A]n erroneous instruction on the law of anticipation could not have changed the result in this case if claims 11 and 12 would have been obvious as a matter of law, such that no reasonable jury could have returned a verdict that the claims are not obvious.”

Obvious as a Matter of Law: The appellate panel held here that the asserted claims “would have been obvious over [the Nankai reference] as a matter of law.”  The court’s approach to his holding of obviousness will be important for future summary judgment motions.  In particular, Abbott’s downfall was its own broad claim language that encompassed the prior art.  One clear difference between the claims and the prior art was admitted by the patentee to be “insubstantial.”

Written Description: Because the claims were obvious, the court did not consider the written description appeal.

Cross Appeal: BD filed a cross-appeal in the case asking the court to overturn the holding of infringement. The Federal Circuit rejected that cross-appeal — holding that it lacked jurisdiction. Notably, a cross-appeal is only appropriate when “a party seeks to enlarge its won rights under the judgment or to lessen the rights of its adversary under the judgment.” Here, the cross-appeal was improper because a holding of non-infringement would not change the ultimate outcome of the case.

Note: The Federal Circuit has also decided the related case No. 2008-1511 (Therasense, Inc. v. Becton, Dickinson and Co.). That opinion focuses on obviousness and inequitable conduct.

Book Review: Patent Ethics: Volume I Prosecution

Patent,

[This post is an old-one, I’ve moved it to the front because Amazon now has the books in stock.]

Patent Ethics: ProsecutionHricikEthics.jpg

by David Hricik & Mercedes Meyer

ISBN: 0195338359

$225 from Amazon

Professor David Hricik is the country’s leading expert on patent law ethics. Oxford University Press recently published his (and co-author Mercedes Meyer’s) volume on patent prosecution ethics. This is a book that includes specific guidance for both patent attorneys and patent agents. It should be within the reach of every patent prosecutor. Topics include: guidance on client engagement and dis-engagement; the duty of loyalty to the client (perhaps as opposed to the inventor); avoiding conflicts of interest; specific areas of competency in patent prosecution; avoiding pitfalls created by the duty of candor; and issues arising from attorneys who practice both prosecution with litigation. The book also includes two very helpful appendices. The first appendix is an annotated version of the PTO ethics rules where the authors discuss nuances of each rule. The second is a set of sample forms; checklists; and client-memos — a version of which should be used by every patent practitioner in handling client relations.

I suspect that this book will quickly become the leading authority on patent prosecution ethics. Although not at all foolproof, attorneys and agents who rely on the book for guidance will have some cover from charges of malpractice or inequitable conduct.

My only problem with the book is its price: $255! Once you add tax and shipping, the cost approaches $1 per page. Of course, that price would get you only about a 1/2 hour of Professor Hricik’s time. This book is the first volume in a two-part series. The second volume will be published in 2010 and will focus on patent litigation ethics.

Vacatur: Judge Posner Agrees to Vacate Inequitable Conduct Holding Based on Settlement Agreement

Patent

New Medium v. Barco (N.D. Ill. 2009)

Seventh Circuit Appellate Judge Richard Posner heard this case sitting by designation in the Northern District of Illinois. The final judgment is interesting in relation to the Federal Circuit’s recent refusal to vacate the district court’s opinion after the PTO retreated in Tafas v. Dudas.

In a 2008 decision, Judge Posner held New Medium’s asserted patents unenforceable due to inequitable conduct during ex parte reexamination of the patents. Notably, Judge Posner found that the inventor/owner Carl Cooper had made false statements to the PTO regarding his association with the expert who had submitted declarations in the reexamination. Notably, in his declaration to the PTO, Mr. Cooper stated that he had “never met or talked with any of these experts” prior to contacting them to submit reports. Judge Posner found that statement “false” since Cooper had solicited and paid for a bid from one of the experts (Klughart) seven years prior. Judge Posner also found that Cooper and Klughart’s testimony about forgetfulness difficult to believe: “I conclude that Klughart is not neutral and that his forgetfulness may be strategic. . . . Cooper testified that when he submitted his report in August of 2001 he had forgotten his prior dealings with Klughart. I do not believe that testimony. . . . I am also disturbed by the statement in Cooper’s brief that ‘Mr. Cooper didn’t think his past contact with Dr. Klughart was ‘material’ and that’s why he didn’t disclose it.’ That is an admission that Cooper lied in his declaration, though I imagine it [the admission] is unintended.”

Following Judge Posner’s decision, the parties decided to settle the case. As part of the settlement, Judge Posner issued an order vacating its prior inequitable conduct decision: “By agreement of the parties, the Court vacates its Order of October 16, 2008 (Docket 857) declaring United States Patents Nos. 5,424,780 and 6,529,637 unenforceable.”

Elimination of the inequitable conduct decision allows Cooper to continue to assert the patent. Ongoing defendants include Microsoft and Vizio. (See IP Innovation LLC v. Vizio, 08-cv-00393 (N.D. Ill.))

Patently-O Bits and Bytes No. 138: New Job Openings

Bits and Bytes, Patent,

Centocor v. Abbott: In June 2009, Centocor won a $1.67 billion judgment against Abbott based on the jury's findings that Abbott's arthritis treatment Humira infringes Centocor's U.S. Patent No. 7,070,775. In a post-trial verdict, Judge Ward has rejected Abbott's defenses of inequitable conduct and laches. An appeal to the Federal Circuit will follow. [MCSmith][Patently-O Discussion of the Verdict].

Medela v. Kinetic Concepts: The Supreme Court has rejected Medela's petition for certiorari. The petition challenged the notion that a jury should decide the legal question of obviousness. [Supreme Court Docket]

Professor Arti Rai to join the PTO?

Patent,

Tech Law Reporter Andrew Noyes today reports on rumors that Duke University Law Professor and occasional Patently-O contributor Arti Rai will be joining the USPTO executive suite as head of external affairs. That position typically leads both intra– and inter-governmental relations. 

Professor Rai’s primary research focus over the past decade has been on the administrative powers of the USPTO and regulatory methods of promoting regulation especially in the areas of health care and biotechnology. In a 2009 article, Professor Rai suggests that the PTO should continue to use the courts to secure additional control over its own rulemaking and procedural authority.

Given the difficulties of securing congressional action—particularly when Congress may be unwilling or unable to separate relatively simple administrative reform from highly contentious issues like damage awards in litigation—the judiciary is probably the more promising venue for conferring such control.

Additionally, Rai argues that the PTO should move forward with inequitable conduct reform.

The progress that could be achieved through inequitable-conduct reform is difficult to overstate. With such reform, interactions with applicants could be regulated in a much more rational manner. In addition to accelerated examination, inequitable-conduct reform could also create opportunities (where appropriate) for more intensive, on-the-record engagement between the examiner and the applicant. For example, in appropriate cases, on-the-record pre-first-office-action interviews that obviate the need for multiple subsequent rounds of negotiation between examiner and applicant might be possible.

Professor Rai has long ties with President Obama. They were law school classmates at Harvard Law School and she worked tirelessly on the campaign. Prior to becoming a law professor, Rai clerked for Judge Patel (N.D. Cal.) and was an associate at Jenner & Block.

Her patent law expertise and close ties to President Obama also place her on a short list of Federal Circuit nominees should a vacancy arise.

Google’s Patent on its GOOGLE.COM Home Page

Design Patent, Patent, ,

Earlier this week, the USPTO issued a design patent to Google that covers the “ornamental design for a graphical user interface [GUI] … as shown and described.” Pat. No. D. 599,372. Design patent coverage is essentially defined by the images include in the issued patent. Here, the image looks roughly the same as the company’s ubiquitous Google.com homepage. (See image below.)

To be clear, many patent professionals would argue that it is misleading to ever simply call this “a patent.” Rather, it is a design patent. Design patents have limited scope in that they only cover ornamental designs rather than technological advances. The USPTO has been granting design patent protection for screen shots and icons for many years. However, to my (limited) knowledge, none of those design patents have ever been enforced in court. As with most design patents, it appears that during prosecution, the PTO never issued a substantive rejection based on novelty or obviousness. [UPDATE – I updated this paragraph based on messages from two of the leading design patent experts Saidman and Carani who rightly indicated that in the past several years, few design patents have been found invalid]

Dashed or “ghost” lines in the drawing indicate features that are not claimed. Thus, patent would be infringed by someone using an identical layout even if they replaced the “Google” mark with their own mark. You can note at the bottom that the design patent drawing is marked with a circle-c ©. That indicates that Google is also claiming copyright protection for this layout. In addition, in the design patent, Google indicates that it is also claiming trademark protection for portions of the layout and – perhaps – for the layout as a whole.

Although there is some conflict in the precedent, modern courts have generally allowed companies to overlap design patent, copyright, and trademark protection in the same way that a prosecutor may charge someone with multiple crimes that all stem from the same bad act. This only becomes a problem when applicants also attempt to include utility patent protection in the mix. The problem arises because inventions protected by utility patents are required to be “functional” while design patent, copyright, and trademark laws only protect “non-functional” elements. [The non-functionality doctrine varies considerably between the regimes.]

I like to think of the three regimes (design patent, copyright, and trademark) as essentially creating different rules of evidence to prove the same thing. All of the regimes have some sort of distinctiveness doctrine. For design patents, the design must be a novel and nonobvious advance; for trademark, the mark must help distinguish goods or services in the minds of consumers; for copyright, the work must be original. Likewise the elements of infringement are similar, but different enough to provide added value to someone concerned with protecting an underlying valuable asset.

Allowing overlapping protection has problems. Most notably, the ‘piling on’ effect may make it too expensive to challenge Google’s rights even if their claim to rights appears overreaching. In the criminal justice system, this has the same effect of pushing folks to plea bargain.

Google operates in part on its reliance on the fair use doctrines of copyright and trademark laws and has been a strong advocate of open access of copyrighted works (think Google books and Google’s indexing) and limited trademark rights (so that others can bid for Google ads on a competitors trade name). By relying on design patents, Google positions itself in a way that it can protect its rights based on patent doctrines while still arguing for weaker rights in those other areas.

Design patents remain in force for 14-years from the date of issue. Thus, Google’s design patent is set to expire on Sept 1, 2023.

I have taken a screen shot of the Google.com website from Sept 3, 2009. It pretty clearly would not infringe because of the differences between layout in the patent and the layout on the site.

Notes:

  • Read the computer programmer response on Slashdot.
  • File Attachment: patd599372.pdf (72 KB). Also, see Google’s patent on Google Patents.
  • It is pretty amazing that the patent lists ten inventors for that simple thing. Did each of those individuals contribute inventive material?
  • Inequitable Conduct?: According to the face of the patent, Google did not submit any prior art. The examiner found 13 largely irrelevant pieces of prior art. Google should have at least submitted a copy of its home-page from 1 year before its March 2004 application date. The screen-shot below is the Google page from one-year before its patent priority date. (via Internet Archive). The Screen Shot serves as 102(b) prior art and also serves as a non-infringing alternative for competitors.

PatentLawPic778

  • Gawker’s ValleyWag has more background in a post titled “Google Patents World’s Simplest Home Page.”
  • Continuations: This patent is part of a family of at least seven design patents. Six of them are still pending, but one issued as a patent in 2006 (D533,561) covering the layout of search results. The recently issued ‘372 patent was filed in 2006, but claims priority to the 2004 filing date of the ‘561 patent.

Law Review Student Note Topics for 2009

Patent, ,

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

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

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

Fraud on the Patent Office: Federal Circuit Emphasizes Rule 9(b) Heightened Pleading Requirement for Defense of Inequitable Conduct

Patent,

Exergen Corp. v. Wal-Mart Stores, CVS, and SAAT, ___ F.3d ___, 2009 U.S. App. LEXIS 17311 (Fed. Cir. 2009)

This case focuses only on procedure and does not alter the substantive law of inequitable conduct. However, it is likely to have an important impact on patent litigation by tightening the pleading requirements for anyone attempting to plead inequitable conduct.

Exergen's patents cover infrared thermometer technology. U.S. Patents Nos. 5,012,813, 6,047,205, and 6,292,685. A jury found SAAT liable for willful infringement and also awarded lost profits to Exergen. On appeal, the Federal Circuit Reversed-in-Part

Pleading Inequitable Conduct: At some point during the litigation – well after submitting its initial answer to the complaint – SAAT moved to add inequitable conduct as an affirmative defense and counterclaim. The District Court denied that request – properly holding that inequitable conduct is a form of fraud that must be pled "with particularity" under Fed. R. Civ. Pro. 9(b). On appeal, the Federal Circuit affirmed, but in the process provided guidance for how to properly plead inequitable conduct. Notably, "Rule 9(b) requires identification [in the pleading] of the specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO." (refrain)

  • The pleading must set forth "the particularized factual bases" that a court would rely upon to decide the substantive elements of inequitable conduct. Here, particularity should be equated with "'in detail . . . the who, what, when, where, and how' of the alleged fraud" Quoting DiLeo v. Ernst & Young, 901 F.2d 624 (7th Cir. 1990).
  • When the allegation is failure to disclose, the pleadings must "identify the specific prior art that was allegedly known to the applicant and not disclosed." See Cent. Admixture, 482 F.3d 1356.
  • When the allegation is intentional misleading of the PTO, the pleading must identify the particular misleading actions.
  • Although Rule 9(b) allows mal-intent to be "averred generally," the pleading must still "allege sufficient underlying facts from which a court may reasonably infer that a party acted with the requisite state of mind."

The court found four specific failings in SAAT's pleadings:

  • WHO: Failure to "name the specific [duty bound] individual … "who both knew of material information and deliberately withheld or misrepresented it."
  • WHAT and WHERE: Failure to "identify which claims, and which limitations in those claims, the withheld references are relevant to, and where in those references the material information is found."
  • WHY and HOW: Failure to provide evidence of materiality by, for instance, identifying the claim limitations absent from information of record.
  • SCIENTER: Failure to allege facts that "give rise to a reasonable inference of scienter, including both (1) knowledge of the withheld material information or of the falsity of the material misrepresentation, and (2) specific intent to deceive the PTO." Rather, the pleadings merely state that "Exergen was aware" of the prior art without explaining that a particular duty bound person was aware of the relevant portion of the reference.

SAAT based its inference of deceptive intent on the fact that the patentee had cited a particular prior art reference during prosecution of only one of the three patents. The court rejected that factual description – finding it insufficient even for the pleadings:

SAAT's purported basis for inferring deceptive intent is that Exergen had cited the '998 patent when prosecuting the '205 patent but then failed to cite it when prosecuting the '685 patent. The mere fact that an applicant disclosed a reference during prosecution of one application, but did not disclose it during prosecution of a related application, is insufficient to meet the threshold level of deceptive intent required to support an allegation of inequitable conduct. Indeed, SAAT's pleading does not contain specific factual allegations to show that the individual who had previously cited the '998 patent knew of the specific information that is alleged to be material to the '685 patent and then decided to deliberately withhold it from the relevant examiner.

The mere fact that an applicant disclosed a reference during prosecution of one application, but [*45] did not disclose it during prosecution of a related application, is insufficient to meet the threshold level of deceptive intent required to support an allegation of inequitable conduct. Indeed, SAAT's pleading does not contain specific factual allegations to show that the individual who had previously cited the '998 patent knew of the specific information that is alleged to be material to the '685 patent and then decided to deliberately withhold it from the relevant examiner.

Although the Federal Circuit affirmed the fraud-pleading holding, it also reversed the final judgment – finding one patent invalid and the other two not infringed.

Bits and Bytes No. 125: Comments on Comments

Patent, ,
  • Gil Hyatt’s attorney contacted me this morning and asked that a few “offending” comments be removed from the post associated with his case. I agreed that they were potentially problematic and removed them. Two discuss LL’s role as an examiner of HYATT’s cases. Because Hyatt’s applications were filed before 1995, those files are likely still secret and thus should not be publicly discussed. I also removed the “sleazeball” comments. As a reminder to commenters – you may appear anonymous, but a well heeled plaintiff could probably track you down unless you take special precautions. I have thus-far successfully resisted providing any identifying information to interested parties. However, I would obey a court order.
  • For PTO Examiners who Comment Regularly. I enjoy your comments and they helpfully reveal aspects of PTO operations that would otherwise be hidden. You should, however, occasionally re-read MPEP 1701: “Public policy demands that every employee of the United States Patent and Trademark Office (USPTO) refuse to express to any person any opinion as to the validity or invalidity of, or the patentability or unpatentability of any claim in any U.S. patent, except to the extent necessary to carry out (A) an examination of a reissue application of the patent, (B) a reexamination proceeding to reexamine the patent, or (C) an interference involving the patent. “
  • Fraud not Inequitable Conduct: IPO executive director Herb Wamsley (writing as the IP LANGUAGE CURMUDGEON) argues that the term “Inequitable Conduct” is misleading. The doctrine does not follow a traditional balancing of the equities, but is seated in fraud. Thus, Wamsley “proposes scrapping the term ‘inequitable conduct’ in favor of ‘fraud,’ a term that is not very well defined in law either, but which better conveys the idea that patents should be unenforceable only if serious misconduct has been proven. If courts had to find ‘fraud’ before they could hold a patent unenforceable, perhaps they would apply the doctrine now called inequitable conduct only in cases of very clear intent and materiality” as the law requires. I think that Wamsley’s suggestion makes perfect sense.
  • IPO’s annual meeting is Sept 13-15 in Chicago: Link. Over 500 individuals (including yours truly) are already signed-up to attend this patent law powwow. This is probably the largest mixer of in-house patent counsel and patent attorneys in private practice. The only problem is the cost: IPO members pay $950; Non-Members pay $1,450; Inventors and academics pay $500.
  • Update on the Faculty Position at the University of Utah Law School200908142110.jpg : They are hiring, but may not have received your e-mail. “Due to a server switch, the email address facultyrecruitment@law.utah.edu was not functioning correctly for a few days in August. We sincerely apologize for this error. As of today, August 14th, the email address is once again fully functional. We encourage interested applicants to send their materials to us at that email address, particularly those who sent, or attempted to send, materials in the past two weeks, so that we can be sure that we received them.” [Read the Job Listing] [Klarquist Sparkman is also looking for an O-Chem Patent Attorney or Agent]

Federal Circuit Affirms High Standard for Attorney Fees under 35 U.S.C. 285

Patent,

09-1045.jpgWedgeTail v. Huddleston Deluxe (Fed. Cir. 2009) 09-1045.pdf

After claim construction, WedgeTail – the patentee – filed a motion to dismiss its claims and granted Huddleston a covenant not to sue. Judge Folsom (E.D.Tex.) agreed and dismissed the case. Huddleston challenged the dismissal because it also wanted to collect attorney fees. Judge Folsom denied Huddleston’s request for a hearing on attorney fees without providing any reasoning.

The Patent Act provides for recovery of “reasonable attorney fees,” but only in “exceptional cases.” Ordinarily, such exceptional cases are only found in situations involving “inequitable conduct before the PTO; litigation misconduct; vexatious, unjustified, and otherwise bad faith litigation; a frivolous suit or willful infringement.”

District courts are also given a “high level of deference” on this issue — especially when a request for fees is denied.

On appeal, the Federal Circuit affirmed – holding that the district court was not required to explain its denial (and that Huddleston had not shown sufficient evidence of an exceptional case).

Simply put, Huddleston has failed to demonstrate either that the district court clearly erred in failing to find this case exceptional or that Huddleston was harmed by the district court’s failure to entertain a motion for attorney fees. A remand is, therefore, unwarranted. . . .

Though findings on ‘exceptional case’ and reasons underlying the discretionary action on fees are helpful to an appellate court, remand should not be a matter of rote in every case in which findings and reason are not expressly set forth. (quoting Consol. Aluminum v. Foseco, 910 F.2d 804 (Fed. Cir. 1990)).

Affirmed

Notes: “The court in exceptional cases may award reasonable attorney fees to the prevailing party.” 35 U.S.C. 285.

Federal Circuit Affirms High Standard for Attorney Fees under 35 U.S.C. 285

Patent,

09-1045.jpgWedgeTail v. Huddleston Deluxe (Fed. Cir. 2009) 09-1045.pdf

After claim construction, WedgeTail – the patentee – filed a motion to dismiss its claims and granted Huddleston a covenant not to sue. Judge Folsom (E.D.Tex.) agreed and dismissed the case. Huddleston challenged the dismissal because it also wanted to collect attorney fees. Judge Folsom denied Huddleston’s request for a hearing on attorney fees without providing any reasoning.

The Patent Act provides for recovery of “reasonable attorney fees,” but only in “exceptional cases.” Ordinarily, such exceptional cases are only found in situations involving “inequitable conduct before the PTO; litigation misconduct; vexatious, unjustified, and otherwise bad faith litigation; a frivolous suit or willful infringement.”

District courts are also given a “high level of deference” on this issue — especially when a request for fees is denied.

On appeal, the Federal Circuit affirmed – holding that the district court was not required to explain its denial (and that Huddleston had not shown sufficient evidence of an exceptional case).

Simply put, Huddleston has failed to demonstrate either that the district court clearly erred in failing to find this case exceptional or that Huddleston was harmed by the district court’s failure to entertain a motion for attorney fees. A remand is, therefore, unwarranted. . . .

Though findings on ‘exceptional case’ and reasons underlying the discretionary action on fees are helpful to an appellate court, remand should not be a matter of rote in every case in which findings and reason are not expressly set forth. (quoting Consol. Aluminum v. Foseco, 910 F.2d 804 (Fed. Cir. 1990)).

Affirmed

Notes: “The court in exceptional cases may award reasonable attorney fees to the prevailing party.” 35 U.S.C. 285.

Federal Circuit Affirms High Standard for Attorney Fees under 35 U.S.C. 285

Patent,

09-1045.jpgWedgeTail v. Huddleston Deluxe (Fed. Cir. 2009) 09-1045.pdf

After claim construction, WedgeTail – the patentee – filed a motion to dismiss its claims and granted Huddleston a covenant not to sue. Judge Folsom (E.D.Tex.) agreed and dismissed the case. Huddleston challenged the dismissal because it also wanted to collect attorney fees. Judge Folsom denied Huddleston’s request for a hearing on attorney fees without providing any reasoning.

The Patent Act provides for recovery of “reasonable attorney fees,” but only in “exceptional cases.” Ordinarily, such exceptional cases are only found in situations involving “inequitable conduct before the PTO; litigation misconduct; vexatious, unjustified, and otherwise bad faith litigation; a frivolous suit or willful infringement.”

District courts are also given a “high level of deference” on this issue — especially when a request for fees is denied.

On appeal, the Federal Circuit affirmed – holding that the district court was not required to explain its denial (and that Huddleston had not shown sufficient evidence of an exceptional case).

Simply put, Huddleston has failed to demonstrate either that the district court clearly erred in failing to find this case exceptional or that Huddleston was harmed by the district court’s failure to entertain a motion for attorney fees. A remand is, therefore, unwarranted. . . .

Though findings on ‘exceptional case’ and reasons underlying the discretionary action on fees are helpful to an appellate court, remand should not be a matter of rote in every case in which findings and reason are not expressly set forth. (quoting Consol. Aluminum v. Foseco, 910 F.2d 804 (Fed. Cir. 1990)).

Affirmed

Notes: “The court in exceptional cases may award reasonable attorney fees to the prevailing party.” 35 U.S.C. 285.

Challenging PTO Decisions in District Court: Federal Circuit Affirms Exclusion of Enablement Evidence that “Should Have” Been Raised During Prosecution

Patent, Patent Cases 2009, , , , , ,

Hyatt v. Doll (Fed. Cir. 2009) 07-1066.pdf

Gil Hyatt is a prolific inventor who has spent much of his time over the past thirty years challenging the bounds of USPTO practice. This August 11, 2009 opinion marks the seventeenth Federal Circuit decision focusing on Hyatt’s patent rights in addition to the 2003 Supreme Court decision Franchise Tax Bd. of California v. Hyatt.

This Case: During prosecution, the examiner rejected each of Hyatt’s 117 computer memory architecture claims based on anticipation, obviousness, enablement, double patenting, and written description. Hyatt appealed (pro se) to the BPAI who reversed the bulk of the rejections, but affirming only the written description and enablement rejections associated with 79 claims. Hyatt then took his case to Federal Court by filing a civil action in DC District Court grounded in 35 U.S.C. 145.

At the district court, Hyatt submitted a new declaration offering additional evidence of enablement and written description. However, the district court excluded that inventor-declaration from evidence based on Hyatt’s “negligence” in failing to previously submit the information to the PTO.

On appeal, the Federal Circuit affirmed the exclusion of evidence – holding that the district court may properly exclude evidence that Hyatt should have produced to the PTO. (Chief Judge Michel as author joined by Judge Dyk)

Hyatt was obligated to respond to the examiner’s written description rejection by In re Alton, 76 F.3d 1168, 1175 (Fed. Cir. 1996), by explaining where in the specification support for each of these limitations could be found. . . . The Board noted, “It is far easier for appellant to describe where the limitation he wrote is disclosed than for the Office to prove that the limitation is not disclosed.” . . . Hyatt, however, refused to cooperate, even though he necessarily possessed the information the examiner sought by the time he filed his application.   

On these facts, the district court’s exclusion of Hyatt’s new evidence must be affirmed. . . . [I]t is clear from the record that Hyatt willfully refused to provide evidence in his possession in response to a valid action by the examiner. Such a refusal to provide evidence which one possessed was grounds in Barrett to exclude the withheld evidence. Similarly, we hold that in light of Hyatt’s willful non-cooperation here, the district court did not abuse its discretion by excluding the Hyatt declaration.

Judge Moore penned a vigorous dissent in support of the patent applicant’s right to a full civil action including the right to submit additional evidence when challenging a PTO decision.

The majority takes away this patent applicant’s fundamental right to a “civil action to obtain [a] patent” as granted by Congress in 35 U.S.C. § 145. Today the majority decides that a patent applicant may not introduce the inventor’s declaration in a § 145 proceeding before the district court because the inventor had an “affirmative duty” or “obligation” to disclose this evidence to the PTO. His failure to fulfill his affirmative duty, by not disclosing evidence he could have disclosed to the PTO, results in such evidence being excluded from the district court § 145 proceeding. The district court made no fact findings indicating willful withholding or intentional suppression; in fact, the district court did not even conclude that Mr. Hyatt’s conduct amounted to gross negligence, but rather excluded the evidence under a negligence “could have” standard. Nor did the PTO even argue, at any stage of these proceedings, that Mr. Hyatt’s conduct in this case was willful or intentional. Nonetheless, the majority concludes that the applicant “owed,” the PTO all evidence he possesses that is responsive to a rejection and that failure to fulfill this newly created “affirmative duty” amounts to willful withholding as a matter of law. There are only two possible ways to interpret the majority’s willful withholding determination. Either the majority is engaging in appellate fact finding or it is determining that breach of its newly created affirmative duty is willful withholding as a matter of law.

. . .

Congress granted patent applicants the right to a civil action in the district court distinct from their right of appeal. It is our obligation to protect the distinction Congress codified in § 145, not to reweigh the virtues of that decision. The § 145 proceeding is a civil action and ought to be governed by the same Federal Rules of Evidence that govern other civil actions. Patent cases do not need, nor should they have, special rules of evidence.

. . .

The statute itself distinguishes the appeal that may be brought pursuant to 35 U.S.C. § 141 because a § 145 action is not an appeal; it is a “civil action.” The statute obligates the district court to adjudicate the facts in this civil action. Because the statute affords no limitations on the type of evidence that ought to be admissible in a civil action brought under § 145, the standard Federal Rules of Evidence that govern all civil actions ought to govern. The legislative histories of § 145 and its predecessor statute, section 4915 of the Revised Statutes, repeatedly and without contradiction indicate that the intent of Congress was to permit a patent applicant to bring a new suit built upon a new record. . . . Congress intended that the district court in a § 145 action have everything that a court would have in an infringement suit. Under this standard, Congress certainly intended for an inventor, such as Mr. Hyatt, to be permitted to introduce his own declaration in a § 145 action.

. . .

The majority holds that by failing to offer his testimony to the PTO, Hyatt has failed to satisfy “an affirmative and specific duty.” Maj. Op. at 2. In this way, this new affirmative duty for prosecution seems to resemble inequitable conduct, though here the applicant is penalized regardless of their intent. . . . With all due respect to the majority, I do not believe a new “affirmative duty” to disclose is warranted, nor do I believe Hyatt was “required by law” or “obligated” to provide his declaration to the PTO. While Mr. Hyatt may have failed to overcome the rejections or to convince the Board based upon his submissions to the PTO, he did not fail to fulfill an “obligation” or “affirmative duty” as the majority alleges.   

. . .

In this case, the district court found that Mr. Hyatt’s failure to proffer his

declaration to the PTO was merely negligent. . . . I find troubling the majority’s characterizations of Mr. Hyatt. See, e.g., Maj. Op. at 51 (Mr. “Hyatt purposefully kept [the Board] in the dark”); id. (his “blatant non-cooperation”); id. at 50 (Mr. “Hyatt willfully refused to provide evidence in his possession”); id. (Hyatt “refused to cooperate”); id. (“Hyatt’s willful non-cooperation”); id. at 55 (“Hyatt willfully refused”); id. at 49 (providing his declaration “should have been simple for him”); id. at 55 (that Hyatt’s failure “to perform a simple task that it was his burden to perform is inexcusable”); id. at 54 (“Hyatt’s perverse unhelpfulness”). None of this appears in the district court proceedings, the PTO proceedings, or the record— these fact findings ought to be left to the district court which is in the best position to weigh the contradictory evidence.

. . .

Contrary to the appellate finding of willful withholding, the record contains ample evidence of a lack of willful withholding. Here, the examiner rejected all of Mr. Hyatt’s 117 claims for lack of written description, failure to enable, obviousness-type double patenting (over 8 separate references), and Schneller-type double patenting (over the same 8 references). The examiner also rejected 9 claims as anticipated (Hill reference) and 7 as obvious (over a combination of three references). Technically, Mr. Hyatt was appealing 45 separate issues totaling 2546 separate rejections of his 117 claims to the Board. He wrote a 129-page appeal brief addressing all of these different rejections. And, to be clear, the Board reversed all the examiner’s rejections for obviousness, anticipation, obviousness-type double patenting, Schneller-type double patenting, and many of the written description and enablement rejections. With regard to the written description rejections in particular, the Board reversed the rejections of 38 claims and sustained the rejections of 79 claims. Mr. Hyatt prevailed on 92% of all the examiner’s rejections at the Board level. Despite Mr. Hyatt’s success, the majority declares Mr. Hyatt’s response to be “completely and wholly inadequate” and Mr. Hyatt to have been perversely unhelpful. Maj. Op. at 55, 56.

. . .

Although Mr. Hyatt may have failed to overcome all of the written description rejections based upon his submissions to the PTO, he did not fail to fulfill an “obligation” or “affirmative duty,” and he certainly was not “perversely unhelpful” as the majority alleges. . . I believe the court is wrong to hold that breach of the newly created affirmative duty, i.e., not producing evidence to the PTO, is willful withholding as a matter of law.

. . .

In hindsight, perhaps Mr. Hyatt should have submitted his declaration or that of any other expert earlier in the prosecution process. But hindsight is misleadingly acute. Declarations and expert reports are time consuming and expensive to prepare. It is hardly reasonable or even desirable to require patent applicants to put massive declarations into the record at an early stage of prosecution, weighing the cost to both the applicant and the PTO. See generally Mark A. Lemley, Rational Ignorance at the Patent Office, 95 Nw. U.L. Rev. 1495 (2003) (arguing that it would be inefficient for the PTO to overinvest in examination because so few patents are enforced). In this case, for example, the examiner rejected the claims on many different bases (double patenting on 8 different references, obviousness, anticipation, enablement, written description, etc.), totaling 2546 separate rejections. The Board overturned nearly all of them. It is easy with the benefit of hindsight to say Mr. Hyatt should have introduced more evidence on written description to the Board. But Mr. Hyatt was not facing merely a written description rejection, he was facing 2546 separate rejections on many, many different bases. The majority implausibly asserts that 2546 separate rejections is “proportional to Hyatt’s prosecution of an application containing 117 pending claims spanning 79 pages.” Maj. Op. at 56 n.35. An average of 21 rejections per claim is hardly proportional. Mr. Hyatt was forced to appeal 45 independent issues to the Board when the average is two. Dennis D. Crouch, Understanding the Role of the Board of Patent Appeals in Ex Parte Appeals, 4, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1423922. Despite this challenge, Mr. Hyatt was largely successful on appeal. Further, the length of Mr. Hyatt’s application suggests that his efforts to pinpoint pages containing certain terms was helpful and in good faith. Mr. Hyatt’s response may have been especially valuable in the time before searchable electronic applications.

To say that Mr. Hyatt had an affirmative duty to introduce all evidence to the Board or that he “owed” (Maj. Op. at 56) all the evidence he possessed is to put an enormous and undesirable burden on the patentee, one that will foreclose patent protection for many small inventors. Congress foresaw exactly this problem and ameliorated it with § 145 by providing applicants a way to initiate a civil action and introduce new evidence after Board proceedings when the issues are much more succinct and consolidated. This is illustrated perfectly here, where the applicant was contending with 2546 rejections on many different bases before the Board. After the Board overturned nearly all of them, only a small number of rejections—based on written description/enablement—were maintained. Hence at the district court the applicant could proffer much more extensive evidence because the universe of issues was greatly narrowed. This is the sensible approach Congress enacted. The statute even places the cost of the proceeding on the party better positioned to know the value of the application—the applicant. The majority’s new exclusionary rule based upon its new affirmative duty upsets this balance.

Notes: I expect that Hyatt will ask for reconsideration and will then push for Supreme Court review.

Centocor v. Abbott (E.D.Tex.)

Patent, ,

Centocor v. Abbott (E.D.Tex.)

Abbott has two chances to block the $1.67 billion jury verdict while the case is still in the hands of E.D. Texas Judge Ward.

Inequitable Conduct: Because inequitable conduct is an equitable doctrine, it is determined by a judge. In this case, Judge Ward bifurcated the trial and will hold a one-day bench trial on inequitable conduct on August 4, 2009. On the 4th, parties will each have three hours of witness time and 25 minutes for argument.

Judgment Notwithstanding the Verdict (JNOV): This is unlikely in Judge Ward’s courtroom – especially here since the Judge has already denied Abbott’s motions for summary judgment.

On appeal at the Federal Circuit look for a number of different disputes, including:

  • Priority dates and anticipation: Centocor’s patents claim priority to 1991 via a series of continuations-in-part, but the claims at issue were probably not enabled until a 1994 filing. In 1993, a foreign counterpart of the original application published – becoming prior art against the 1994 CIP filing. The appeal may focus on the symmetry (or lack therof) between enablement and anticipation.
  • Damages: The damage calculation here is somewhat complex and could lead to important Federal Circuit precedent on lost profits

Dickson Industries: Inequitable Conduct Holding Vacated

Attorney Fees, Inequitable Conduct, Patent, Patent Cases 2009,

Dickson Industries, Inc. v. Patent Enforcement Team, L.L.Cpic-34.jpg . (Fed. Cir. 2009) (nonprecedential) 08-1372.pdf

Application of inequitable conduct jurisprudence continues to divide the Federal Circuit. Judge Rader has perhaps been the most outspoken critic of the current over-use of inequitable conduct allegations. In this case, Judge Rader was joined by Judges Mayer and Posner (by designation) in vacating a lower court finding of inequitable conduct.

The PET patent covers an apparatus for making drainage grooves at the edge of a roadway. Prior to litigation, PET had argued that the machines for making rumble strips at the side of the road also violate the patent rights. Subsequently, Dickson sued for declaratory relief.

The jury found the patent invalid and found the patent holder liable for $1.5 million for tortiously interfering with with Dickson’s business relationships. The court then also (1) found the patent unenforceable due to inequitable conduct during reexamination for failure to disclose material information and (2) awarded attorney fees to Dickson.

On appeal, the Federal Circuit affirmed the anticipation decision, but vacated the decision on inequitable conduct.

The case largely centered around one prior art reference – “Spangler” – which discloses an apparatus to make rumble strips. PET knew about Spangler during reexamination of its patent, but did not disclose that reference to the PTO.

Agreeing with the Jury, the Federal Circuit found substantial evidence indicating that Spangler discloses all the elements of PET’s patent – rendering the patent invalid.

Ordinarily, after finding the patent invalid, the court would not need to decide issues of inequitable conduct. Here, however, the appellate panel addressed inequitable conduct because that conduct served as the basis for the lower court’s award of exceptional case attorney fees.

Amending Pleadings to Add Inequitable Conduct Charges: Allegations of inequitable conduct are parallel to charges of fraud and ordinarily must be pled with specificity. Thus, in most cases the accused infringer does not have sufficient evidence to allege inequitable conduct in the initial filing of defenses. Here, the court initially denied Dickson’s motion to amend its complaint to add IC charges. However, at trial the court changed its mind and allowed the issue to be presented.

On appeal, the Federal Circuit found that PET was “prejudiced” by the inconsistent orders and was thus denied “the opportunity to adequately defend against the allegation of inequitable conduct at trial. For instance, PET was denied the opportunity to introduce evidence of good faith, which militates against a finding of deceptive intent.”

The district court’s contradicting positions undermine the legitimacy of its ruling on inequitable conduct. This court cannot say with confidence that the record regarding inequitable conduct is not incomplete. Thus, this court vacates the district’s decision on the issue of inequitable conduct and remands to provide an opportunity to fully develop the record regarding inequitable conduct. Further, this Court vacates the award of attorney fees premised on inequitable conduct as premature.

In a warning to the lower court, Judge Rader again raised the notion that inequitable conduct litigation “has become an absolute plague.”

Given the severe consequences of unenforceability when it is imposed on a patent, it is paramount that the district court exercise necessary caution to ensure that the patent owner met its burden of proof with respect to both the materiality and deceptive intent.

Vacated-in-part.

Notes:

  • Judges Mayer and Posner (sitting by designation) participated in the panel.
  • Update: I have fixed an important typographical error. Judge Rader indicated that inequitable conduct litigation is the problem (not inequitable conduct itself).

Judge Posner at the Federal Circuit: Patent on Sex Aid is Obvious

Patent,

Ritchie v. Vast Resources (AKA Topco)pic-23.jpg (Fed. Cir. 2009) 08-1528.pdf

Sitting by designation, Seventh Circuit Judge Richard Posner summarily reversed a lower court opinion – finding the asserted patent obvious. This decision offers an implicit reminder as to why the Federal Circuit was formed in the first place. Although Chief Judge Michel and Judge Bryson signed-on to the opinion – it is fairly clear that they would not have approved of the analysis if it had emerged from a district court. The problems: The opinion hardly mentions claim language – or even which claim is being challenged; the court does not construe the claims at issue; although the lower court found the patent valid, there is no mention of the presumption of validity or standards for reversing a decision on obviousness; the level of one of ordinary skill in the art is overlooked; etc. It is, however, quite reminiscent of the Supreme Court’s KSR decision. Here, Judge Posner heavily quotes and loosely applies KSR to invalidate the patent.

“Among the inventions that the law deems obvious are those modest, routine, everyday, incremental improvements of an existing product or process that confer commercial value (otherwise they would not be undertaken) but do not involve sufficient inventiveness to merit patent protection. This class of inventions is well illustrated by efforts at routine experimentation with different standard grades of a material used in a product—standard in the sense that their properties, composition, and method of creation are well known, making successful results of the experimentation predictable. This is such a case.”

Now, I’m not arguing that the patent is valid – only that Judge Posner’s opinion gives me no confidence that the invention was obvious. Ritchie’s patent covers a “sex aid,” and the patent claimed a particular arrangement of a rod with knobs all made from a “lubricious glass-based material containing … an oxide of boron.” The prior art here was an easy-slide thermometer made of the same material, and – according to Judge Posner’s opinion, the “invention” merely takes well known sex aids and combines them with the easy-slide material.

“This case thus exemplifies the Supreme Court’s analysis in KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007). “When a work is available in one field of endeavor, design incentives and other market forces can prompt variations of it, either in the same field or a different one. If a person of ordinary skill can implement a predictable variation, § 103 likely bars its patentability. For the same reason, if a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill.” Id. at 417 (emphasis added). (The last sentence describes our case to a tee.) There was, the Court continued, no need for the district court to “seek out precise teachings directed to the specific subject matter of the challenged claim, for a court can take account of the inferences and creative steps that a person of ordinary skill in the art would employ.” Id.

And if more is required to make our point, there is the venerable case of Hotchkiss v. Greenwood, 52 U.S. (11 How.) 248 (1851) … which denied patentability to an invention consisting of the substitution of a clay or porcelain knob for a metallic or wood knob in a doorknob (the doorknob itself, as distinct from the knob on the end of it, being an assemblage of knob, shank, and spindle).”

Notes

Inequitable Conduct Based on Failure to Submit Rejection in Co-Pending Case

Inequitable Conduct, Patent, Patent Cases 2009

Larson Mfg. Co. v. Aluminart Products Ltd. (Fed. Cir. 2009)pic-15.jpg

In an earlier post, I discussed the concurring opinion in this case where Judge Linn argued for a restatement of the law of inequitable conduct that makes it more difficult to allege inequitable conduct absent evidence of fraud. This post covers the majority opinion.

Larson sued Aluminart for infringement of two claims of its patent covering a storm door with a moving glass panel. Without reaching the merits of the infringement argument, the district court found the patent unenforceable due to inequitable conduct during prosecution. The district court found that the patentee had improperly withheld documents from the examiners during reexamination of the patent. (The reexamination had been requested by Aluminart). The Federal Circuit provided the following description of the lower court holding:

The [district] court found that Larson failed to disclose to the Reexamination Panel three items of prior art and two office actions issued in the prosecution of a continuation application that grew out of the application that resulted in the ’998 patent [the patent being reexamined]. The court rejected Larson’s argument that the three items of prior art were cumulative of prior art which already was before the Reexamination Panel and therefore were not material, as well as its argument that the office actions were not material because all of the critical references noted in them already had been disclosed to the Reexamination Panel. After finding that Larson intended to deceive the Reexamination Panel, the court balanced its findings of materiality and intent and found inequitable conduct.

On appeal, the Federal Circuit vacated the holding and remanded for a potential new trial on inequitable conduct.

The inequitable conduct charges stem from the PTO's parallel examination of both the reexam of the patent in suit and a continuation application. During the reexam, Larson's patent attorney submitted hundreds of references, district court proceedings, and disclosed the co-pending continuation. However, the patent attorney did not cross-cite two office action rejections from the continuation or one of the prior art references from the continuation (although every other reference from the continuation was cited). In addition, the attorney did not cite two marketing configuration sheets that were later uncovered during discovery.

Law of Inequitable Conduct: Inequitable Conduct requires clear and convincing evidence of at least a threshold level of evidence that the applicant both (1) "made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information" and (2) by that act "intended to deceive the PTO." The materiality of the action is determined based on a reasonable examiner standard – what would a reasonable examiner "consider important in deciding whether to allow the application to issue as a patent?" If an unsubmitted reference is cumulative to information already on hand, then it will not be seen as material. Proof of intent to withhold a reference is not sufficient. Rather, the evidence must show intent to deceive the PTO. That said, intent may be proven by circumstantial evidence. After finding both threshold materiality and intent, the court must determine if the proof is sufficient to find inequitable conduct and consequently hold the patent unenforceable.

What is Cumulative?: After reviewing the submitted and unsubmitted prior art references in detail, the Federal Circuit found that the lower court had clearly erred in finding the art non-cumulative. Notably, the only features found in the non-submitted art that were not in the submitted art were "irrelevant to the claim limitations at issue and therefore could not support a finding of materiality and non-cumulativeness." Although the unsubmitted prior art included a different embodiment than the submitted reference, that difference was not important because the claims were broadly drafted in a way that cover both embodiments.

Disclosure of Office Actions in Related Cases: The examiner of the co-pending continuation filed four office action rejections. The first was used as the basis for the reexamination request. The second was used as a basis for an initial rejection in the reexamination. However, the patentee did not submit the third or fourth office action for consideration. The Federal Circuit agreed with the lower court that the office actions should have been submitted because the rejections contained "adverse decisions about substantially similar claims" that were "not cumulative" to materials already submitted to the examiner.

Because the Third and Fourth Office Actions contained another examiner’s adverse decisions about substantially similar claims, and because the Third and Fourth Office Actions are not cumulative to the First and Second Office Actions, the district court correctly found the withheld Office Actions material.

In its analysis, the Federal Circuit reviewed Dayco Products where it found the patentee had wrongly withheld rejections from co-pending applications.

In Dayco Products, the patentee failed to disclose rejections in a copending application of claims “that were substantially similar in content and scope to claims pending in the applications that issued as the patents-in-suit.” 329 F.3d at 1367. We held “that a contrary decision of another examiner reviewing a substantially similar claim” was material. Id. at 1368. We further explained that, because a “rejection of a substantially similar claim refutes, or is inconsistent with the position that those claims are patentable, [the] adverse decision by another examiner . . . meets the materiality standard.” Id.   

Thus, on remand, the district court must determine whether the patentee failure to submit the two office actions was done with sufficient intent to deceive the PTO. Although seemingly dicta, the Federal Circuit provided four points of explicit guidance to the lower court. First, the district court need not accept any additional evidence; Second, the court should remember that "material does not presume intent, and nondisclosure, by itself, cannot satisfy the deceptive intent element." Rather, if intent is inferred, it must be "the single most reasonable inference able to be drawn from the evidence." Further, intent cannot be inferred based on a decision to withhold if the patentee has plausible legitimate reasons for withholding. Third, good faith on behalf of the applicant must be considered as it "militates against a finding of deceptive intent." One element of good faith here, may be that the patentee notified the examiners of the co-pending application. Finally, although the Federal Circuit agreed that the office actions were material, the court did not opine on how material. Thus, if the lower court does find clear and convincing evidence of a threshold intent to deceive, the court must again determine whether the combined intent and materiality are sufficient to warrant a holding of inequitable conduct.

Notes:

  • This case is rather silly because the defendant Aluminart was closely following the reexamination. I can almost guarantee that Aluminart realized that the documents had not been submitted even before the reexamination certificate was issued. Certainly, the company could have brought the omission Larson's attention if it truly was material.

Patently-O Bits and Bytes No. 97

Bits and Bytes, ITC, Patent Legislation, USPTO News
  • Patent Reform: Senator Kyl Introduces the alternative Patent Reform Act of 2009; This bill is more patent-holder friendly than the Leahy bill. The Leahy bill may see some action in Committee on March 26, 2009.
  • Patent Reform: Inequitable Conduct: Although a co-sponsor of the Leahy Act, Senator Hatch has suggested that the reforms should include reforms of inequitable conduct proceedings.
  • ITC: The res judicata effect of ITC Section 337 Decisions: Nil.
  • ITC Theory: John Marshall’s IP Law Journal has a nice set of articles focused on ITC patent Litigation
  • Personnel: Gov. Gary Locke is President Obama’s nominee for Secretary of Commerce. Barring some unknown tax snafu or AIG relationship, is expected to be confirmed quickly. In his Senate testimony he mentioned the politically correct goal of reducing the PTO backlog along with creating a foundation for long-term economic growth; improving weather forecasting, and managing our fishing industry.
  • Personnel: The PTO needs three new members of its Patent Public Advisory Committee (PPAC). Current members include Kevin Rivette (Rembrandts in the Attic), Louis Foreman (CEO / Inventor), Scott Kieff (Conservative Law Professor), Damon Matteo (PARC innovation & licensing chief), Doug Patton (inventor & industrial designer at PattonDesign); David Westergard (IP guy at Micron – Looking to water-down patent rights), Marc Adler (former Chief of IP at Rohm & Haas), Steve Pinkos (former Deputy to Jon Dudas), and Maureen Toohey (Solo practitioner; former GC of a Dean Kamen’s DEKA company). I believe that Rivette, Patton, and Westergard will have reached the end of their terms this year and will be replaced.
  • The Economic Downturn: Diane Bartz has taken over writing all about patent law for Reuters. In a recent interview with John Doll, she uncovers that the PTO is projecting a 2% drop in applications in 2009. Others expect a 10% decline. The problem for the PTO is that their funding is entirely fee driven, and the agency had budgeted for a 5% increase. Along with most law firms, according to Doll, the PTO has “stopped hiring at this time.”

Inequitable Conduct: Trends at the Federal Circuit

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

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

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

200903191000.jpg

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

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