Tag Archives: Inequitable Conduct

Outside the Box Innovations v. Travel Caddy

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By Jason Rantanen and Dennis Crouch

Outside the Box Innovations LLC (Union Rich) v. Travel Caddy  (Fed. Cir. 2012) Download 09-1171
Panel: Newman (concurring in part and dissenting in part), Prost, O'Malley (opinion for the court Per Curiam)

A major criticism of the inequitable conduct doctrine has been that patents could be held unenforceable based upon even "minor and inadvertent errors" that occurred during prosecution of a patent.  A major purpose of the Supplemental Examination provision of the America Invents Act was to provide an avenue for correcting the potential unenforceability of patent rights due to those errors. While the AIA was percolating through Congress, however, the Federal Circuit issued its en banc opinion in Therasense v. Becton Dickinson.  Under the revised legal framework for inequitable conduct articulated in Therasense, it is highly questionable whether these "minor" violations continue to meet the materiality requirement of inequitable conduct. 

Unsurprisingly, post-Therasense, the Federal Circuit has been skeptical of these types of claims.  Last fall, in Powell v. Home Depot, 663 F.3d 1221, the Federal Circuit affirmed a district court determination that the patentee did not commit inequitable conduct by failing to update a Petition to Make Special as this was "not the type of unequivocal act, 'such as the filing of an unmistakably false affidavit,' that would rise to the level of affirmative egregious misconduct.'" (PatentlyO discussion here). In Outside the Box Innovations v. Travel Caddy, the Federal Circuit continues in the direction set by Powell, although it does not appear to be ready to completely abandon the notion that certain "minor" violations can constitute inequitable conduct – perhaps maintaining a bit of the "bark" of inequitable conduct despite curtailing its "bite." 

Small Entity Fees and Inequitable Conduct

The USPTO offers a major price-break for “small entities” – a 50% reduction in fees if the patent owner qualifies for “small entity status.”  In practice, small entities can actually be quite large. The usual rule is that the organizational structure be less than 500 employees.   Small entities can lose their status, however, by inter alia licensing the patent to a non-small entity.  See Ulead Systems, Inc. v. Lex Computer & Management Corp., 351 F.3d 1139, 1142 (Fed. Cir. 2003).  (It's worth noting that the America Invents Act offers an even more aggressive price reduction of 75% for "micro entities," which the USPTO plans to implement in early 2013.)

Prior to Therasense, the Federal Circuit had held that inequitable conduct could arise when a large entity pays only the small entity fees.  See Nilssen v. Osram Sylvania, Inc., 504 F.3d 1223, 1231-33 (Fed. Cir. 2007).  Here, the patentee (Travel Caddy) paid the small entity fee when it should have paid the large entity fee (based upon licensing affiliates). The district court held the patents unenforceable. On appeal, the Federal Circuit reversed not on the ground of materiality, but on the basis of a lack of intent.  The court thus deferred to another day the question of whether the false statement associated with the small entity fee payment could rise to the level of "affirmative egregious misconduct," leaving it intact, if somewhat dinged up:

[A] false affidavit or declaration is per se material. Although on its face, it appears that a false declaration of small entity status would fall within the definition of an “unmistakably false affidavit,” particularly since a party that claims entitlement to small entity status does so in a sworn written declaration, we need not decide that question.[] Even if a false assertion of small entity status were per se material, the requirements of Therasense are not met here because there was no clear and convincing evidence of intent to deceive the PTO.  Specifically, there was no evidence that anyone involved in the patent prosecution knew that a patent license had been granted to a large entity and deliberately withheld that information in order to pay small entity fees.

Slip Op. at 13. 

Writing in dissent, Judge Newman argued that the majority did not go far enough in its reversal because the filing of the small entity statement by affidavit should not render the incorrect statement “per se material.”  Judge Newman also argued that a contingent patent license to a distributor should not necessarily defeat the small entity status.

Failure to Inform Patent Office of Pending Litigation

Manual of Patent Examining Procedure §2001.06(c) states that "Where the subject matter for which a patent is being sought is or has been involved in litigation, the existence of such litigation and any other material information arising therefrom must be brought to the attention of the U.S. Patent and Trademark Office."  The application leading to Patent No. 6,991,104 was a continuation of the application that led to Patent No. 6,823,992.  On September 23, 2005, a declaratory judgment was filed seeking a declaration of noninfringement of the '992 patent; Travel Caddy did not inform the patent examiner of the existence of this litigation prior to the '104 patent's issuance on January 31, 2006. 

The Federal Circuit reversed the district court's pre-Therasense finding of both materiality and intent on this theory of inequitable conduct as well. On materiality, the Federal Circuit ruled that the failure to disclose the existence of a litigation "when there was no citation of prior art, nor any pleading of invalidity or unpatentability in the ’992 complaint as it existed during pendency of the ’104 application" did not constitute "clear and convincing evidence" of materiality.  Slip Op. at 7.  On intent, "the record contains no suggestion of how the withholding of the information concerning the ’992 litigation could have deceived the examiner and no suggestion of deliberate action to withhold it in order to deceive the examiner."  Id. at 8. 

Experts Need Not Be Lawyers: In a somewhat bizzare ruling, the district court excluded an expert offered by one of the parties on the ground that he was not a lawyer.  "To be sure, many lawyers have technical training, but it is technological experience in the field of the invention that guides the determination of obviousness, not the rhetorical skill or nuanced advocacy of the lawyer."  Slip Op. at 19.  The Federal Circuit concluded that this constituted an abuse of discretion, and that the error had a "substantial influence" on the outcome of the case.

Claim Construction: The opinion also includes a detailed discussion of claim construction procedure in the context of a prior interpretation by a CAFC panel reviewing a denial of a preliminary injunction (although no final resolution of the issue is reached), and addresses issues of claim construction generally.  Judge Newman dissented from the opinion on these issues as well.

Supplemental Examination: Inequitable Conduct Amnesty and Beyond

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By Dennis Crouch

Introduction to Supplemental Examination: The new supplemental examination procedure is a creation of the America Invents Act (AIA) and is effective as of September 16, 2012. At its most basic, the new procedure allows a patent owner to seek a low-level review of an issued patent to make sure that it was properly issued based upon some newly submitted information. If – on initial review – PTO agrees that the patent is still viable despite the new information the USPTO will conclude the review and issue a certificate indicating that the information presented in the request does not raise a substantial new question of patentability. On the other hand, if the USPTO finds a substantial new question of patentability, then the USPTO will order a full (ex parte) reexamination.

Inoculating Against Inequitable Conduct: Supplemental examination is often tied to inequitable conduct because the new statute indicates that a patent cannot be held unenforceable for failure-to-disclose (or mis-disclosure of) information during a prior examination once that information is considered in a supplemental examination. Professors Jason Rantanen and Lee Petherbridge have identified supplemental examination as an "amnesty program." They write in the Michigan Law Review that:

New § 257 is thus a patent amnesty program. It encourages patent applicants to use any number of strategies that would never have been countenanced under pre-AIA law to obtain patents, and it offers to cure all but the most extreme through filing a supplemental examination request. For example, potential descriptions of a claimed invention in a prior art printed publication, or possible instances of prior patenting of the claimed invention by another, that are known to a patent applicant, and that might have a high probability of barring a patent or limiting claim scope, may not be disclosed during the initial examination. Similarly, sales and public uses that are known to a patent applicant and that may have a high probability of barring the patentability of a claimed invention may be withheld at least until supplemental examination if the applicant likes (and perhaps longer depending on an applicant's risk tolerance). Even the use of false data to obtain the patent in the initial examination can be exonerated by filing a supplemental examination request, which by the statutorily required process can be expected to produce a director's certificate within three months.

Jason Rantanen and Lee Petherbridge, Toward a System of Invention Registration: The Leahy-Smith America Invents Act, 110 Mich. L. Rev. First Impressions 24 (2011).

To be clear, the strategies identified by Rantanen and Petherbridge would violate the professional ethics of a patent attorney or patent agent who deliberately chose that strategy. The argument here is that the supplemental examination rules (coupled with Theresense, Excergen, and their progeny) provide a marginal incentive to applicants to avoid fully complying with the duties of candor and good faith in all dealings with the USPTO. They write "the analysis provided here relates to the marginal effects of a supplemental examination system." In the end, however, it is unclear whether the new incentive will actually change any behavior. I.e., will the availability of supplemental examination mean that some important evidence will now be buried that would have otherwise been disclosed?

There are two statutory exceptions to the inoculation and both relate to times where the patentee waited too long to request the supplemental examination. The statute labels these prior enforcement allegations and prior allegations. Basically, the supplemental examination (and any subsequent reexamination) must be completed prior to the filing of a lawsuit where inequitable conduct may be raised as a defense. In addition, the supplemental examination must be filed prior to the inequitable conduct being alleged in a pleading or Paragraph IV certification. If the patentee fails either prong then the amnesty fails and a court will have power to adjudge the inequitable conduct.

Timing of Declaratory Judgment Actions: The distinction between the two exceptions can be seen in the context of declaratory judgment (DJ) actions. DJ actions are regularly filed in cases where would-be accused infringers take the preemptive measure of asking a court to declare a patent not-infringed, invalid, or unenforceable. Most (but certainly not all) DJ actions filed in the past few years are primarily venue contests and are filed shortly after the original complementary infringement action.

In thinking about supplemental examination amnesty in the context of DJ actions, it is easiest to begin with the understanding that, with two exceptions, the patent cannot be held unenforceable due to inequitable conduct once the patent properly passes through the supplemental examination amnesty program. In the ordinary infringement litigation filed by the patentee, one of the exceptions block the inoculation in cases where the litigation if filed prior to completion of the supplemental examination. This conclusion is based upon the statutory provision explaining that the inoculation "shall not apply to any defense raised [in infringement litigation] unless the supplemental examination, and any reexamination ordered pursuant to the request, are concluded before the date on which the action is brought." Notice here that the exception to inoculation specifically applies to "any defense." In the declaratory judgment context, the inequitable conduct allegation is not filed as a "defense" but rather as part of the complaint. This means that the § 257(c)(2)(B) exception does not apply to declaratory judgment actions. However, the § 257(c)(2)(A) exception will apply to declaratory judgment actions – leading to the conclusion that supplemental examination will provide amnesty against DJ inequitable conduct actions so long as the request for supplemental examination is filed prior to the filing of a DJ pleading that particularly alleges the inequitable conduct. Here, it appears that to satisfy the filing trigger, the request must meet the requirements set forth in the USPTO's implementation regulations. The USPTO will not grant a filing date to applications that fail to follow those guidelines.

Timing of Supplemental Examinations. In the paragraphs above, I identified instances where the inequitable conduct amnesty is triggered by either the filing of a supplemental examination request or else the completing of the supplemental examination. In many cases, the difference between those two will be minimal. The USPTO has announced its intention to complete all supplemental examination reviews within three months. That interpretation follows the statutory guidance that "Within 3 months after the date a request for supplemental examination meeting the requirements of this section is received, the Director shall conduct the supplemental examination and shall conclude such examination by issuing a certificate indicating whether the information presented in the request raises a substantial new question of patentability." This three-month deadline means that the USPTO will likely be sticklers for the filing requirements and may also mean that the USPTO will frequently order reexamination. The major exception to this quick timeline is that the supplemental examination will not be considered complete for amnesty purposes if a SNQ is raised in a way that triggers the automatic reexamination.

Statutory Provision Section 257: The new supplemental exam procedure is codified at 35 U.S.C. § 257 and reads as follows:

§ 257. Supplemental examinations to consider, reconsider, or correct information

(a) REQUEST FOR SUPPLEMENTAL EXAMINATION.—A patent owner may request supplemental examination of a patent in the Office to consider, reconsider, or correct information believed to be relevant to the patent, in accordance with such requirements as the Director may establish. Within 3 months after the date a request for supplemental examination meeting the requirements of this section is received, the Director shall conduct the supplemental examination and shall conclude such examination by issuing a certificate indicating whether the information presented in the request raises a substantial new question of patentability.

(b) REEXAMINATION ORDERED.—If the certificate issued under subsection (a) indicates that a substantial new question of patentability is raised by 1 or more items of information in the request, the Director shall order reexamination of the patent. The reexamination shall be conducted according to procedures established by chapter 30, except that the patent owner shall not have the right to file a statement pursuant to section 304. During the reexamination, the Director shall address each substantial new question of patentability identified during the supplemental examination, notwithstanding the limitations in chapter 30 relating to patents and printed publication or any other provision of such chapter.

(c) EFFECT.—

(1) IN GENERAL.—A patent shall not be held unenforceable on the basis of conduct relating to information that had not been considered, was inadequately considered, or was incorrect in a prior examination of the patent if the information was considered, reconsidered, or corrected during a supplemental examination of the patent. The making of a request under subsection (a), or the absence thereof, shall not be relevant to enforceability of the patent under section 282.

(2) EXCEPTIONS.—

(A) PRIOR ALLEGATIONS.—Paragraph (1) shall not apply to an allegation pled with particularity in a civil action, or set forth with particularity in a notice received by the patent owner under section 505(j)(2)(B)(iv)(II) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(2)(B)(iv)(II)), before the date of a supplemental examination request under subsection (a) to consider, reconsider, or correct information forming the basis for the allegation.

(B) PATENT ENFORCEMENT ACTIONS.—In an action brought under section 337(a) of the Tariff Act of 1930 (19 U.S.C. 1337(a)), or section 281 of this title, paragraph (1) shall not apply to any defense raised in the action that is based upon information that was considered, reconsidered, or corrected pursuant to a supplemental examination request under subsection (a), unless the supplemental examination, and any reexamination ordered pursuant to the request, are concluded before the date on which the action is brought.

(d) FEES AND REGULATIONS.—

(1) FEES.—The Director shall, by regulation, establish fees for the submission of a request for supplemental examination of a patent, and to consider each item of information submitted in the request. If reexamination is ordered under subsection (b), fees established and applicable to ex parte reexamination proceedings under chapter 30 shall be paid, in addition to fees applicable to supplemental examination.

(2) REGULATIONS.—The Director shall issue regulations governing the form, content, and other requirements of requests for supplemental examination, and establishing procedures for reviewing information submitted in such requests.

(e) FRAUD.—If the Director becomes aware, during the course of a supplemental examination or reexamination proceeding ordered under this section, that a material fraud on the Office may have been committed in connection with the patent that is the subject of the supplemental examination, then in addition to any other actions the Director is authorized to take, including the cancellation of any claims found to be invalid under section 307 as a result of a reexamination ordered under this section, the Director shall also refer the matter to the Attorney General for such further action as the Attorney General may deem appropriate. Any such referral shall be treated as confidential, shall not be included in the file of the patent, and shall not be disclosed to the public unless the United States charges a person with a criminal offense in connection with such referral.

(f) RULE OF CONSTRUCTION.—Nothing in this section shall be construed—

(1) to preclude the imposition of sanctions based upon criminal or antitrust laws (including section 1001(a) of title 18, the first section of the Clayton Act, and section 5 of the Federal Trade Commission Act to the extent that section relates to unfair methods of competition);

(2) to limit the authority of the Director to investigate issues of possible misconduct and impose sanctions for misconduct in connection with matters or proceedings before the Office; or

(3) to limit the authority of the Director to issue regulations under chapter 3 relating to sanctions for misconduct by representatives practicing before the Office.

As mentioned above, the effective date of the new supplementary examination procedure is September 16, 2012 and applies to all patents.

Costs and Fees for Supplemental Examination: The USPTO has indicated that its plans are to – for the most part – charge a fee for supplemental examination that is roughly equivalent to its expected cost for conducting the supplemental examination. In a prior post, Professor Rantanen explained: "The cost for filing a supplemental examination request remains steep: $5,140 for the initial request plus $16,120 for the ex parte re-examination fee. Both must be paid at the time of initial request, and the $16,120 will be refunded if no re-examination is ordered." In a proposed change in the fee structure, the USPTO has suggested that it lower the costs by a small amount and also allow for a 50% and 75% reduction in fees for small-entity and micro-entity patent owners. Those new fees will not be effective until early 2013.

Regulatory Process: As instructed by the statute, the USPTO has promulgated a set of rules that more fully govern the process of supplemental examination.

Other Purposes of Supplemental Examination: There are strong suggestions that supplemental examination may be useful outside of the inequitable conduct situation. In particular, patentees may want to ensure that defendants can't argue in court that the best references were never seen by the USPTO. Other patentees may rely on supplemental examination as a mechanism for entering reexamination without having to first admit that something is wrong with the patent. I'll save consideration of these strategies for a later post.

The America Invents Act: One Year Later (Pt. 5)

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By Jason Rantanen

Liveblogging the America Invents Act: One Year Later conference at the Indiana University Mauer School of Law. Warning and disclaimer: Quality may vary and these don't necessary reflect my opinions.

 

Panel 3: What did the AIA accomplish? What did it omit?

Mark Chandler (Cisco) – Not a patent lawyer; instead offers a high level perspective from tech industry. 

Issues from his perspective: Predictability is a key, but certainty means different things to different people.  Uncertainty in his industry is uncertainty about damages.  Ranges of outcome that lead to total unpredictability about valuation. The patent system is an industrial policy; it needs to be pared with a good commercial law system where the court decisions are defined by good predictability of result.  But parties aren't willing to have fruitful negotiations because of uncertainty as to damages.

Bad patents – very hard to overturn validity patents in court; estoppel provisions in inter partes reexamination made them a hard tool to use.  Also, backlog of patents. 

Effect of these issues was an increase value of litigation gamesmanship over the value of innovation. This was the context in which they came to the table.  For his industry, uncertainty as to scope of rights/quality of rights was not as important as uncertainty over damages.  But this is not something that he believes can be fixed legislatively.  From the point of view of the technology industry, the AIA accomplished very little in terms of the uncertainty they care about.

In terms of bad patents, he sees the mechanisms as positive.   On backlog, the funding provisions are excellent.

Looking forward, he is skeptical of having Congress dive into the damages issues.  Change is coming from the courts.  Judge Rader is a major mover here.  Clean up the Georgia-Pacific factors is something he sees as coming. 

Joinder provision – some judges, when confronted with the anti-joineder rule, are now consoldiating cases.  Work needs to be done here. 

Rocelle Dreyfuss (NYU) – Act focuses with laser like attention on getting a patent, but largely ignores what is being done with the patents.  Her focus is on research exemptions.  Long been two exemptions: Common law exemption and limited statutory Hatch-Waxman exemptions.  Common law exemption has largely been undermined by CAFC, especially in Madey v. Duke and Embrex v. Service Engineering; most recently, Judge Lourie's opinion in AMP v. USPTO (Myriad). 

Absence of such exception has become more worrisome over time.  Earlier studies indicated that scientists largely ignored patents.  More recent work has undermined this conclusion however.  Studies shown that less research conducted in areas where things are patented.

Every foreign country has a substantial research exception.  Japan is a good example. 

Can't you always do your research off shore?  But she'd like to see a strong research industry in the United States. 

Overall effect of a lack of research exception has been to distort other patent law doctrines – examples: Supreme Court/Federal Circuit subject matter cases.  All these cases are based on the view that patents can impact future research.  To some extent, the Supreme Court's exhaustion and injunctive reliefs are based on a concern about what's going on down stream.  A well drafted research exception is better served than twisting these doctrines around to allow downstream research.

Some believe (ex. Hal Wegner) that the common law will correct itself.  Judge Newman's language in this vein was been picked up by Chief Judge Rader in a recent opinion.  Wegner also argues that the fix would be relatively easy to accomplish with judge made law – drawing a distinction between research "on" versus research "with" a patented invention.  Other commentators would go back to the commercial/noncommercial distinction. She's doubtful these will work, however.  Rader's statement was part of a blistering dissent on an expansion of the statutory exemption; Judge Lourie's statement in Myriad was made just a month ago.  In addition, the fix isn't as simple as distinguishing between research "on" and "with"; actual research is actually far more complex – consider the use of diagnostic patents, which could be classified as either research on or research with. 

Copyright law has long had a fair use defense; it could work in patent law.  But complex, so better done as a statute than as a common law rule. 

John Duffy (UVA) – Likes: the new priority rule.  Never been a fan of first-to-file.  But this is not first to file – it's first-to-file or first-to-publicly disclose, which is a great change.  Best argument for first-to-file was administrative convenience.  Best argument for first-to-invent is that the lawyer shouldn't be part of the invention process.  New system takes the best of both: administrative ease (have to have publicly disclosed it) and you don't have to get a lawyer to do this.  Just have to get the rest of the world to follow us…

A partial accomplishment: ending asymmetric judicial review.  Historically, applicants could obtain immediate judicial review of rejections, but competitors could not obtain immediate judicial review of grants.  This was not good.  AIA helps here, with its post-grant processes.  But it still leaves significant holes in the availability of judicial review.  Proposes that the PTO be subject to standard agency review – points to Exela v. Kappos, E.D. Va. (Aug. 22, 2012).  May be a supreme court opinion.  If the country goes to symmetric judicial review, that would be a very good thing.

A partial accomplishment: curbing claim numerosity.  Patents have too many claims. Partial AIA solution: agency has power to set its own fees and thus could charge more for excessive claims. But sometimes there's a legitimate reason for large numbers of claims: legal uncertainty as to how claims will be interpreted.  Ultimate problem here: departed too far from traditional principles of claim construction.  We should instead focus on the invention – the contribution to the art – in interpreting claims.  261 U.S. 45, 63 (1923)

AIA's worst blemish: fueling bureacratic inflation. 

Gary Grisold (Senior Policy Advisory for the Coalition for 21st Century Patent Reform and former Chief IP Counsel at 3M) – AIA presented a great opportunity to improve the speed and efficiency of the patent system.  The playbook for improving the AIA was largely derived from the 2004 NAS Report.  Most of the recommendations of the 2004 report were put into play in the AIA.

Goals: effective, global patent protection efficiently obtained, maintained and enforced encouraging innovation and commercialization of innovation.  Showed us some of the charts that they used when building support for the patent law. A lot of progress from 2007-2011.

Process error – in the post-grant review, it allows the public to come in and be heard just after a patent is granted.  At some point, someone inserted "reasonably could have raised" judicial estoppel in PGR. Shouldn't be there.  Didn't realize that this happened, though.  Needs to be a technical correction to fix this.

Patent claim construction – For PGR/IPR, should patent claims should be construed the same as in validity challenges under 35 USC 282(b) rather than broadest reasonable construction?

What else might happen in the future?  Best mode – still there as an obligation; this creates a weird tension for the attorney and client.  Inequitable conduct – he believes that supplemental examination will have a lot of utility because firms will do extensive pre-litigation analysis.  Could go further with inequitable conduct, and lessen the effect even more, for the reason that it brings so much inefficiency into the process.  Experimental use exception – needs to be expanded.  Could expand prior user right.  Doctrine of equivalents is another opportunity for change.  Funding issues are always a concern – could be more secure. 

Doug Norman (Eli Lilly) – Going to talk about how in-house counsel deal with specific issues.

Move to first to file – won't preciptate a lot of change in their context, because for the past 40 years they've been living in a first-inventor-to-file world.  So their proceses have not had to change.  The change they feel is when they look at competitors' patents, they can better evaluate patent estates that they want to do a due dilligence study on. 

Grace period and international harmonization – Europeans aren't necessarily ready to accept a grace period. Have a grace period in the US that is clear, crisp and objective.  And very simple.

Fees  – important to point out that after a longrunning diversion of funds away from the PTO, the PTO has feesetting authority to move forward and build a new infrastructure.  It will cost users more, but if it leads to higher quality and faster service, it'll be worth it.

IPR/PGR considerations – A huge unknown right now.  Hopes that patent judges really will be conservative on the issue of discovery.  Is a technical amendment over the "could have raised" estoppel in PGR possible?  He hopes so; otherwise, it will greatly constrain the use of PGR. 

Inequitable conduct/supplemental examination – high point of the bill.  Thinks it will be used quite extensively, if for no other reason to have their own patents drawn into supplemental [think he means reexam] examination.  Plans on doing extensive due dilligence on patent estates they intend to acquire.  (comment – I suspect that in the pharmaceutical industry, there may be strong incentive to conduct extensive due dilligence.  I'm much less convinced this is the case in pretty much every other industry.).  He believes supplemental examination will be revolutionary, at least in the pharma/biological field.

Favors statutory research exemptions and full repeal of best mode requirement.  Related a story that OED is going to take best mode very seriously. 

John Vaughn (AAU): Universities and patent reform – University technology transfer plays an important role in technology innovation in this country.  Univerisity organizations worked together to present the view of the universities.  Two basic objectives: wanted to support those proposals that would enhance the US patent systems' ability to produce innovation, and wanted to support those proposals that would enhance the ability to licensed.  Very much shaped by 2004 NAS report. 

First to invent to first inventor to file – three conditions: (1) effective grace period; (2) continuation of provisional applications; (3) strong inventor declaration (?)  Worked with Congress on these. 

Patent certainty – university inventions inherently have uncertainty because of their early stage nature; adding other uncertainty further complicates that uncertainty.  Problem with statutory instructions on damages is that they would become a cost of doing business rather than something else. 

Strongly supported the new post-grant proceedure.  Agrees with others about the estoppel provision.  Concern that with the estoppel provision, the procedure won't be used. But very concerned about proposals for second window, additional post-grant challenge that would allow a broad capacity to challenge patents throughout their life.  This was viewed as making patents more uncertain, which would make them harder to license.  Compromise: revised and changed inter partes.

Debate over prior user rights.  Pre-AIA, only applied to business methods.  University community hated prior user rights – viewed it as a circumvention of the patent quid-pro-quo.  But at the end of patent reform, prior user rights was one of the primary obstacles at the end.  They worked out a compromise – a substantial expansion of prior user rights that sufficiently protect universities. 

Viewed as accomplishments: FtF – will be helpful to everyone.  Post-grant review – great, problem with estoppel.  Third party submisison of prior art – very helpful.  Enhanced fee setting – very helpful, wished better anti-fee diversion language.  Supplemental examination – very helpful, better to get rid of inequitable conduct altogether.  Scope of grace period – concern over how it will actually be interpreted. 

Inequitable Conduct: Federal Circuit Places another Nail in the Coffin

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By Dennis Crouch

1st Media v. Electronic Arts (Fed. Cir. 2012)

In a strong opinion, the Federal Circuit has rejected a district court holding of inequitable conduct in a failure-to-submit case. The appellate court held that the defendant had failed to prove that the failure to submit was a deliberate fraud on the PTO under the standard outlined in the court’s 2011 en banc Therasense decision.

Individuals sufficiently involved with the prosecution of a patent application bears a “duty of candor and good faith dealing with the [USPTO], which includes a duty to disclose to the Office all information known to that individual to be material to patentability.” 37 C.F.R. § 1.56 (Rule 56). This duty is particularly applied to each inventor named in the application and “each attorney or agent who prepares or prosecutes the application.” A patent attorney’s failure to comply with the duty of candor can lead to disciplinary hearings by the USPTO’s office of enrollment and discipline (OED) and, as a rule, the USPTO refuses to grant patents “on an application in connection with which fraud on the Office was practiced or attempted or the duty of disclosure was violated through bad faith or intentional misconduct.”

The fiercely adversarial litigation system in the US is comparably quite good at rooting out (and thus discouraging) fraud. Whenever a patent is being enforced, accused infringers scour the records and available evidence to look for any way failures to comply with Rule 56. When those failures rise to intentional and material misconduct, a court has the equitable power to hold the patent (and its patent family) unenforceable due to inequitable conduct in the prosecution of the application. Of course, attorney fraud is a serious charge, and even false claims create difficulties for the accused wrongdoer. As such, the courts have taken some steps toward limiting those types of claims. The two key recent cases on this point are Excergen and Therasense.

Excergen: The Federal Rules of Civil Procedure (FRCP) as interpreted by the Excergen decision, inequitable conduct may only be alleged as a defense if it can be pled with particularity (as opposed to other types of claims that may be pled much more generally).

Therasense: Under Therasense, inequitable conduct requires proof that the alleged wrongdoing was deliberately and knowingly wrong and that the result of the wrongdoing during patent prosecution impacted the issuance of the eventual patent and that each element be proven with clear and convincing evidence. In the failure-to-disclose situation, the court writes that a defendant must prove “that the applicant knew of the reference, knew that it was material, and made a deliberate decision to withhold it.”

In 1st Media, the asserted patent was part of a family of applications that had been filed in various countries around the world. Three references used to reject the foreign applications were never submitted for consideration by the US examiners. Nevada district court Judge Mahan considered this issue and found that both the patent attorney and the listed inventor were at fault for failing to submit the references and held the patent unenforceable.

On appeal, the Federal Circuit reversed – making clear (again) that in a failure-to-disclose situation, the defendant must prove that individuals with a Rule 56 duty “made a deliberate decision to withhold” the references. Further, that deliberate decision element must be proven with clear and convincing evidence and that proof cannot be inferred from the fact that the individuals had knowledge of the references and their materiality.

A court can no longer infer intent to deceive from non-disclosure of a reference solely because that reference was known and material. Moreover, a patentee need not offer any good faith explanation for his conduct unless and until an accused infringer has met his burden to prove an intent to deceive by clear and convincing evidence.

In the bench trial, Judge Mahan found the explanations given by the inventor and his patent attorney to lacking. On appeal, the Federal Circuit made clear that the burden is on the defendant to provide clear and convincing evidence.

The court provided a nice quite for patent attorneys:

Moreover, it is not enough to argue carelessness, lack of attention, poor docketing or cross-referencing, or anything else that might be considered negligent or even grossly negligent. To sustain a charge of inequitable conduct, clear and convincing evidence must show that the applicant made a deliberate decision to withhold a known material reference. Whatever one might conclude about Lewis’s and Sawyer’s conduct and interactions relating to the Bush reference, and the nature of Sawyer’s practice at the relevant time, the record does not support the inference that Lewis and Sawyer deliberately chose to withhold Bush.

Because one element of the inequitable conduct charge is missing, the court concluded that it cannot be proven. Of course, “carelessness, lack of attention, [or] poor docketing” will still lead to malpractice claims.

Notes:

  • In its opinion, the Federal Circuit foreclosed any possibility for the defendants to re-open their inequitable conduct charges for a rehearing. However, the judge has not yet determined validity. Thus, if the withheld references are truly material then we’ll see the jury hold the asserted claims obvious.
  • Beginning September 16, 2012, patentees will also be able to request a supplemental examination at the USPTO to ensure that any references that had been previously withheld do not impact patentability. However, if the USPTO finds that the previously withheld references create a major patentability question then the Office will institute a reexamination.
  • We now have a situation where inequitable conduct is quite difficult to prove – meaning that patent owners will rarely be harmed by a violation of the duty of candor and good faith dealing. Consequently, patent attorneys will faced increased pressure to push the boundaries.

America Invents Act: One Year Later (pt. 2)

Patent, , ,

By Jason Rantanen

Liveblogging the America Invents Act: One Year Later conference at the Indiana University Mauer School of Law. Warning: Quality may vary.

Session 2: First to File/Supplemental Examination

I spoke during this panel, so wasn't able to take down any notes during Q&A

John Schaibley – Panel is going to discuss two changes under AIA: First to invent to First to File and Supplemental Examination.  Summarized the two changes.

Jay Thomas (Georgetown) – thanks Bob for his hard work on the AIA; but he won't necessarily agree with everything Bob said. 

When we teach 102, it's "the long march" – a lot of it is now gone.  Still going to be some complexity due to the prior user defense.  Also, what does "or otherwise available to the public."  What's the role of secret uses and sales prior to the date of filing. 

Remember two cases: Egbert v. Lipman(sp?): you can have a public of one; Metallizing Engineering: a trade secret use is patent defeating.  New section 102(a) still has the term "public use" in it.  Early legislative history indicated a continuity of meaning.  But things changed.  "or otherwise available to the public" was added.  Some legislative history that says that this has to be true for all prior art. Note that "public" is still pretty broad.  Just because it's technically publicly accessible doesn't mean that it's necessarily easy to find.

Also, keep in mind that these two cases were instances where the patent holder effectively tried to extend the date of filing.  Is it sound industrial policy to allow secret uses to not defeat patentability? 

International harmonization: tried to move in that direction, but didn't completely succeed.  Example: safe harbor under new 102 is different as between US and Europe and Japan. 

Short term issues: lots of filing before March 16, 2013.  Abolition of the Hilmer doctrine; lose ability to swear behind prior art references.  Storm surge is coming.  There's going to be a sharp distinction between old and new cases.  What to train the new examiners in?  Old and new or just new?  Constitutional challenges – probably dubious.  Employment assignment agreements – these will be important to look at.  And what about the technical corrections bill?  Likely to involve some huge changes of its own – dissatisfied parties are going to push for these. 

Dana Colarulli (USPTO) – Probably agrees with Bob on most of the things he said.  But legislation only gets us a good portion of the way there.  There's more to do.  Specifically, implementing the provisions in the appropriate way through rules. The PTO is really trying to get the implementation right. Very much looking for comments and feedback on the proposed rules.

International harmonization – huge step forward in restarting international harmonization discussions.  But doesn't go all the way there.  More work to be done. 

Impact of the law overall – this is the most significant change since 1836.  A lot of these changes have been percolating for far longer than the five years up to the AIA.  First to file really goes back to 1966 with a report from Lyndon Johnson, then a 1992 report that made the same suggestion.  2004 National Academies of Science recommended as well.  First to file is both international harmonization and a best practice. 

PTO's goals in drafting the rules.  Make the guidance clear and transparent.  Address examination issues raised by AIA up front. 

On grace period – this is a critical issue.  It's a unique feature of US law, but it's not the same grace period as we had before.  There are going to be questions about how narrowly the grace period is going to be read.  USPTO has interpreted the the grace period to be very narrow.  There are many views about this issue. 

Sales issue (ed. do they have to be public?) – legislative history conflicts.  Is Metalizing Engineering overturned or not? 

Visit the USPTO's AIA implementation page – lots of good material there. 

Nathan Kelley (USPTO) – How supplemental examination is supposed to work.  Purpose of supplemental examination is to immunize patentees against claims of inequitable conduct based on information that was not disclosed, inadequately disclosed, or incorrect information. 

Supplemental examination lets just about all issues of patentability to be raised.  Talked about the mechanics of supplemental examination.  If, for example, the issue raised by the supplemental examination is a written description issue, that's what will go into reexam. 

Could apply to patents that have expired because the statute of limitations on a patent (enforceability period) is six years. 

Improper requests will not get into the PAIR system until they are granted. 

Items of information are anything, as long as they're written.  Videos/oral testimony must include a transcript.   Can't give more than twelve items of information in any one request.  But you can make more than one request.

Fees – about $5k for the request, plus upfront $16,000 for reexam that will be refunded if no ex parte reexam. 

(I spoke about inequitable conduct post-Therasense and the effect on supplemental examination)

During Q&A, question came up about PTO fraud enforcement.  PTO views supplemental examination as exactly that, not an inquiry into the intent of the parties.

The America Invents Act: One Year Later (conference)

Patent, , , ,

By Jason Rantanen

Liveblogging the America Invents Act: One Year Later conference at the Indiana University Mauer School of Law.   Warning and disclaimer: Quality may vary and these don't necessary reflect my opinions.

Session 1:

Mark Janis – opening remarks.  Hard to believe it's been a year act since AIA was signed.  Still at the beginning of understanding the AIA provisions.  Exciting times.  Lots of patent law thought leaders here today – Bob Armitage, Director K appos. 

Come back in ten days for the next conference.

Bob Armitage – wants to the the upbeat, inspirational speaker that we all need at 8:30 am. 

Some things that need to be done with the AIA in terms of legislative correction of errors.  Suggests that different constituencies in patent law work together on this goal in the immediate future – before the next election.

The AIA is the most profound change to the patent system since 1836 patent statute.  He's been involved in the process of patent reform for the last 30 years.  Shortly after he left law school, he realized that we had a law school that we had a patent system that didn't work very well.  Some of the things that we needed to do to improve the patent system was to eliminate first to invent, have a more transparent grace period, and eliminate recurring patent terms. 

Sees the AIA as major constituencies coming together to move the patent system in the direction of transparency and objectivity.  If the implementation of the AIA goes well, this is the patent system we'll have.  A more predictable patent system.  Much of this comes down to invalidity defenses – under the AIA these are much simpler. 

We were the last to the table in terms of modernizing our patent system.  Prior 1999, we really had a secret patent system. With the AIA, the patent system was opened up even further.  After AIA, there's no-fault correction of misnaming of inventors; the technical filing of an affidavit that mis-names the inventor is no longer a worry; best mode is no longer a concern for patent applicants; patent prosecutors are better off because of supplemental examination.  If they're deposed, and things arise, the patent holder can, in a pre-litigation context, go back to the patent office. (me: Query how this is viable, since depositions often arise during litigation.  Could make sense for a sequential litigant).

Other big changes: deceptive intent removed throughout the application process; patent owner can seek the patent as the applicant; no more supplemental oaths. 

Post-grant review: patents are now open to more challenges after the patent issues.  It's any issue of patentability that you can raise in court, you can raise in the PTO.  Why is this important?  This lets parties challenge patents the day patents issue, not six years down the road.  Challenging patents in court is expensive.  Post-grant review allows parties to resolve these issues in the matter of months, not years, at a fraction of the cost.

Sees the AIA as increasing transparency, objectivity, predictability, simplification of patent system.  Patent validity is reduced to just four objective legal standard: sufficient differentiation from prior public disclosures and earlier patent filings of others; sufficient disclosure to identify the claimed embodiments and enable them to be put to a specific practical, and substantial use; sufficient definiteness to differentiate subject matter; sufficient concreteness to avoid excessively conceptual or otherwise abstract subject matter.  That's all there is to the patent law.  These are objective standards that don't require you to know anything about what the inventor did, thought, etc. 

The national embarrassment of the first-to-invent system will now end. Example Gore-Tex case of why this was a problem.  Interference count practice was problematic.  It was an embarrassment and it's gone. 

The AIA is an attempt to be a codification of the way Congress wants the law, not a codification of what the law is. 102(b) was a colossal mess because of the attempt to codify existing law.  Under the AIA, there are no new AIA patent law doctrines.  Legislative history says "apply as written."  Example: 102 – only new phrase is "available to public."  Apply as written – this means that prior art is that art which is publicly accessible (comment: this issue is one of the most debated issues in the new AIA).

Who benefits from the AIA?  Those with the least resources, capital available.  It's a patent system optimized for small inventors, universities.  For those engaged in commerce of patents, supplemental examination allows for due diligence to be more effective, since it will allow the curing of inequitable conduct.

A Higher Written Description Standard for Negative Claim Limitations?

Patent, , ,

By Dennis Crouch

Santarus and the University of Missouri v. Par Pharma (Fed. Cir. 2012)

My employer (University of Missouri) owns several patents covering formulations of omeprazole proton pump inhibitors (PPIs). The patents are exclusively licensed to Santarus who markets the drugs under the brand Zegerid®. Par filed its request to make a generic version which prompted this infringement litigation.

The inventor, Dr. Jeff Phillips is a pharmacist at MU had the simple idea of combining omeprazole with baking soda (sodium bicarbonate). The baking soda helps the drug resist stomach acids long enough to be absorbed in the stomach wall. Although not a blockbuster drug, the approach has been successful for many patients with GERD and Santarus sales are about $40 million per year. (The reported deal is that MU receives about 5% of sales. As the inventor, Phillips receives a small cut from that.)

During litigation the patents were successfully attacked as obvious based upon a preliminary written description challenge.

Written Description Killing Priority and thus Nonobviousness: We know that patent applicants are allowed to narrow patent claims during the prosecution process. The vast majority of issued patent claims are not found in the originally filed patent application but instead are amended during prosecution. This is typically done by adding limitations into the claims as MU did here. The primary constraint on adding limitations is that the newly amended claim must be supported by the original application specification. Thus, a patentee cannot create limitations from thin-air, but must instead identify limitations found in the specification to be added into the claims. In the simple case, newly added claim limitations that are not supported by the specification are rejected for new matter at the USPTO and, once issued, can be invalidated for lacking written description under 35 U.S.C. § 112. The situation is a bit more confusing when the application claims priority to a prior patent filing. Of course, most issued patents do claim priority to a prior patent filing so the family member situation is quite important. In the patent family context, a child application might fully comply with the written description requirement if considered on its own. The child application can also be valid if new matter was added to the specification or claims at the time of filing. However, that new matter (if included within the claims) will mean that the patentee cannot claim priority to the parent application’s filing date. Where the parent case is published more than one year before the patent filing, that parent application can also serve as a prior art against the child application under 35 U.S.C. §102(b) unless priority can be established. (Query how this will works under the AIA?)

In this case, the generic challenger argued that one of the claimed limitations was not supported by the parent patent and, as a consequence, that parent patent serves as a critical piece of prior art that invalidates the claims.

One set of asserted claims were amended from the priority filing to included an exclusionary wherein limitation. In particular, the claims stated that “the composition contains no sucralfate.” The original specification had noted several reasons why omeprazole was preferable to sucralfate. In the same sentence, the specification also indicated that omeprazole is also preferable to sodium bicarbonate for those same reasons. Since sodium bicarbonate is actually an element of the invention, the district court held that the same sentence could not be used to particularly exclude sucralfate without further evidence that sucralfate is contraindicated. On appeal, the Federal Circuit rejected this reasoning – holding that preference statement in the specification was sufficient to justify addition of the exclusionary limitation and that the sodium bicarbonate inclusion (as a buffer) was justified by other portions of the specification.

Higher Bar for Negative Limitations?: The exclusionary limitation here is a negative limitation because it defines what the invention does not contain. Here, the invention does not contain sucralfate. The tradition in patent law has been to avoid negative limitations and, certainly, an invention cannot be wholly defined by negative limitations. However, negative limitations are allowed and are useful at times. It appears that the court sets a higher bar for the inclusion of negative limitations than it does positive elements of a claim. This is done by requiring that the specification include a reason for the exclusion in order to satisfy the written description requirement. The court writes here: “Negative claim limitations are adequately supported when the specification describes a reason to exclude the relevant limitation.” Ordinarily, such justification is not required for positive claim elements – although justifying explanations can be helpful in justifying greater claim breadth.

Although some reasoning is required, the patentee need not disclaim the element in the specification in order to add the exclusionary limitation in the claims. “Such written description support need not rise to the level of disclaimer. In fact, it is possible for the patentee to support both the inclusion and exclusion of the same material.”

With these notions in mind, the court held that the statements in the specification were sufficient to support the exclusionary limitation in this case. “The claim limitation that the Phillips formulations contain no sucralfate is adequately supported by statements in the specification expressly listing the disadvantages of using sucralfate.” And, as a consequence, the parent patent is not a proper prior art reference against those claims supported by the original specification.

Patent with Multiple Priority: In cases with a complex family structure, patent priority is actually determined on a claim-by-claim basis. As discussed above, the Federal Circuit held that some of MU’s claims properly claim priority to the original specification filed with the USPTO. On appeal, the patentee implicitly agreed that some of the other patent claims are not supported by the original specification. For those cases, the original filing qualifies as prior art against the no-priority claims under section 102(b). The question then is whether the newly added material is sufficiently different to avoid invalidation on obviousness.

Without going into detail, the Federal Circuit found that some of the patent claims that qualified for priority were also nonobvious and thus should be treated as valid and enforceable.

Need one to win: In the end, this appears to be a win for Mizzou since a patentee only need a court to find one of its claims is infringed and enforceable.

Notes:

  • Although I am employed by the University of Missouri, the university is not my client and I have not spoken with any of the university counsel about this case.
  • Par also appealed the district court’s finding of no inequitable conduct. The Federal Circuit affirmed that holding based upon a lack of clear and convincing evidence of intent deceive the USPTO.

Patently-O Bits & Bytes by Lawrence Higgins

Patent, , , ,

USPTO Patent Review Processing System Preview

  • The United States Patent and Trademark Office (USPTO) will preview the new electronic filing system for the trials established under the Leahy-Smith America Invents Act. The preview will take place from 10 am – noon on Thursday, September 6, 2012. Representatives from the Patent Trial and Appeal Board will demonstrate the new Patent Review Processing System (PRPS) and show how to register to use the system, to file a petition seeking a trial, to pay petition fees, to join the proceeding as a patent owner and to file motions and other documents. The preview will be helpful for any practitioners or administrative personnel who anticipate filing documents in the new proceedings beginning September 16, 2012 (inter partes review, post-grant review, and the transitional program for covered business methods). There will also be an opportunity to ask questions. You may attend electronically or in person. [Link]

Patent Jobs:

  • Stevens & Showalter is seeking a patent attorney/agent with at least 2 years of experience and a background in EE or CS to work at their Dayton, Ohio office. [Link]
  • Connolly Bove Lodge & Hutz is looking for patent attorneys with 3-5 years of experience to work at their Wilmington, DE office. [Link]
  • Faegre Baker Daniels is searching for a patent associate with a Ph.D. in the life sciences and 2-4 years of experience to work at their Indianapolis office.[Link]
  • Westerman, Hattor, Daniels & Adrian is seeking a electrical attorney/agent with 1-3 years of experience to work at their D.C. office. [Link]
  • Maquet is looking for a patent attorney with a minimum of 3 years of patent prosecution experience to work at their Wayne, N.J. office. [Link]
  • Drinker Biddle & Reath is searching for a patent agent with 3+ years of experience and a degree in EE to work at their Chicago or D.C. office. [Link]
  • Hiscock & Barclay is seeking a patent attorneys/agents with 3-5 years of experience to work at in their upstate NY office. [Link]
  • Bass, Berry & Sims is looking for IP associates with 1-4 years of experience to work at their Nashville office. [Link]
  • Trop, Pruner & Hu is seeking associates with EE/CS backgrounds to work at their Austin or Houston office. [Link]

Upcoming Events:

  • U.S. Patent Commissioner Speaks: Current Developments in Patents event/webinar will be held on September 13. U.S. Commissioner for Patents, Margaret Focarino, will comment on current developments in patents, especially those occurring at the U. S. Patent and Trademark Office, and participate in questions and answers. [Link] [Webinar]
  • ACI's FDA Boot Camp conference is scheduled for September 20-21, in Boston. ACI's FDA Boot Camp has been designed to give products or patent litigators, as well as patent prosecutors, industry in-house counsel, and life sciences investment and securities experts, a strong working knowledge of core FDA competencies. [Link] (PatentlyO readers register for with PO 200 for a discount)
  • C5s 3rd EU Pharma Regulatory Law conference is scheduled for September 25-26 in Brussels, Belgium. 2012 is set to be a critical year for EU pharma regulation with the implementation of the pharmacovigilance rules, proposals to amend the data protection and clinical trials directives and the new falsified medicinal products directive. [Link] (PatentlyO readers register with PO 10 for a discount)
  • The 13th Annual Maximizing Pharmaceutical Patent Lifecycles is scheduled for October 10-11 in New York. The conference will feature, Presentations from key representatives from the USPTO who will provide you with direct insights and the logic of this agency on some of most pressing life cycle management strategies that the industry is facing today, Analyses of recent critical cases affecting patent life cycle planning including: Caraco (use codes); Prometheus (subject matter eligibility); Sun Pharma (double patenting); Ariad (patentability); and Therasense (inequitable conduct) – and strategies for using these cases to your advantage and many more topics. [Link] (PatentlyO readers register for with PO 200 for a discount)
  • The University of Akron School of Law's Center for IP & Technology will host the 6th Annual IP Scholars Forum on October 26, 2012, from 9:00AM – 2:00 PM. The Forum's purpose is to bring together a small group of prominent scholars for intensive, high-level discussions on cutting-edge issues of common interest. This year's Forum will discuss "The Impact of IP on Public Health." Guest include: Frank Pasquale, Andrew Torrance, Jim Chen Jay Dratler, Jr., Katherine Van Tassel, and many others. [Link]

Contact Lawrence.Higgins@patentlyo.com with leads for future Bits and Bytes.

Patently-O Bits & Bytes by Lawrence Higgins

Patent, , , ,

USPTO Patent Review Processing System Preview

  • The United States Patent and Trademark Office (USPTO) will preview the new electronic filing system for the trials established under the Leahy-Smith America Invents Act. The preview will take place from 10 am – noon on Thursday, September 6, 2012. Representatives from the Patent Trial and Appeal Board will demonstrate the new Patent Review Processing System (PRPS) and show how to register to use the system, to file a petition seeking a trial, to pay petition fees, to join the proceeding as a patent owner and to file motions and other documents. The preview will be helpful for any practitioners or administrative personnel who anticipate filing documents in the new proceedings beginning September 16, 2012 (inter partes review, post-grant review, and the transitional program for covered business methods). There will also be an opportunity to ask questions. You may attend electronically or in person. [Link]

Patent Jobs:

  • Stevens & Showalter is seeking a patent attorney/agent with at least 2 years of experience and a background in EE or CS to work at their Dayton, Ohio office. [Link]
  • Connolly Bove Lodge & Hutz is looking for patent attorneys with 3-5 years of experience to work at their Wilmington, DE office. [Link]
  • Faegre Baker Daniels is searching for a patent associate with a Ph.D. in the life sciences and 2-4 years of experience to work at their Indianapolis office.[Link]
  • Westerman, Hattor, Daniels & Adrian is seeking a electrical attorney/agent with 1-3 years of experience to work at their D.C. office. [Link]
  • Maquet is looking for a patent attorney with a minimum of 3 years of patent prosecution experience to work at their Wayne, N.J. office. [Link]
  • Drinker Biddle & Reath is searching for a patent agent with 3+ years of experience and a degree in EE to work at their Chicago or D.C. office. [Link]
  • Hiscock & Barclay is seeking a patent attorneys/agents with 3-5 years of experience to work at in their upstate NY office. [Link]
  • Bass, Berry & Sims is looking for IP associates with 1-4 years of experience to work at their Nashville office. [Link]
  • Trop, Pruner & Hu is seeking associates with EE/CS backgrounds to work at their Austin or Houston office. [Link]

Upcoming Events:

  • U.S. Patent Commissioner Speaks: Current Developments in Patents event/webinar will be held on September 13. U.S. Commissioner for Patents, Margaret Focarino, will comment on current developments in patents, especially those occurring at the U. S. Patent and Trademark Office, and participate in questions and answers. [Link] [Webinar]
  • ACI's FDA Boot Camp conference is scheduled for September 20-21, in Boston. ACI's FDA Boot Camp has been designed to give products or patent litigators, as well as patent prosecutors, industry in-house counsel, and life sciences investment and securities experts, a strong working knowledge of core FDA competencies. [Link] (PatentlyO readers register for with PO 200 for a discount)
  • C5s 3rd EU Pharma Regulatory Law conference is scheduled for September 25-26 in Brussels, Belgium. 2012 is set to be a critical year for EU pharma regulation with the implementation of the pharmacovigilance rules, proposals to amend the data protection and clinical trials directives and the new falsified medicinal products directive. [Link] (PatentlyO readers register with PO 10 for a discount)
  • The 13th Annual Maximizing Pharmaceutical Patent Lifecycles is scheduled for October 10-11 in New York. The conference will feature, Presentations from key representatives from the USPTO who will provide you with direct insights and the logic of this agency on some of most pressing life cycle management strategies that the industry is facing today, Analyses of recent critical cases affecting patent life cycle planning including: Caraco (use codes); Prometheus (subject matter eligibility); Sun Pharma (double patenting); Ariad (patentability); and Therasense (inequitable conduct) – and strategies for using these cases to your advantage and many more topics. [Link] (PatentlyO readers register for with PO 200 for a discount)
  • The University of Akron School of Law's Center for IP & Technology will host the 6th Annual IP Scholars Forum on October 26, 2012, from 9:00AM – 2:00 PM. The Forum's purpose is to bring together a small group of prominent scholars for intensive, high-level discussions on cutting-edge issues of common interest. This year's Forum will discuss "The Impact of IP on Public Health." Guest include: Frank Pasquale, Andrew Torrance, Jim Chen Jay Dratler, Jr., Katherine Van Tassel, and many others. [Link]

Contact Lawrence.Higgins@patentlyo.com with leads for future Bits and Bytes.

Eight Points to Know about September 16, 2012: Post-Grant Transitions and Deadlines

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by Dennis Crouch

September 16, 2012 is a big date for parties considering a post-grant challenge to someone else’s patent.  Eight things that your clients should know:

  1. End of Inter Partes Reexamination: September 15, 2012 is the last date to request inter partes reexamination under the old system.  That is to say, inter partes patent reexamination filings will no longer be accepted on September 16, 2012.  Parties who understand and find the current system valuable may want to accelerate their filing timeline accordingly. 
  2. Beginning of Inter Partes Review: The new inter partes review system begins on September 16, 2012 and applies to any issued patent that has been issued for at least 9–months.
  3. Inter Partes TRIAL: Despite the similar name, the procedures involved with an inter partes review will be quite different from inter partes reexamination.  In short, the review will be more like a trial and heard by a tribunal of administrative patent judges rather than being considered by an examiner.
  4. $$$ Inter Partes Expense $$$: The trial features will certainly make inter partes reviews significantly more expensive based on greater attorney fees. In addition, the fee for filing an inter partes review petition is $27,200 (plus $600.00 for each claim over 20). Current inter partes reexamination fee is $8,800.
  5. $$$ Ex Parte Reexamination $$$: The AIA barely changes the ex parte reexamination process.  Those reexaminations can still be requested by third parties.  The major change, however, is that the fee for ex parte reexamination will jump on September 16, 2012 from $2,520 to  $17,750.  What is $15k worth to your client?
  6. Post Grant Review: Except for “covered business methods,” the post grant review system (with its broad-base of potential challenges) is on hold until 2013.  In particular, PGR will only be available to challenge granted patents that are filed as applications after the March 16, 2013 first-to-file changeover
  7. Business Method Post Grant Review: The PGR system does open on September 16, 2012 to challenge “covered business methods.”  These challenges are limited by the statute to only patents that cover some sort of financial data processing and that do not involve a novel technological feature or solution.
  8. Supplemental Examination:  Although perhaps out of place on this list (b/c not a third party challenge), supplemental examination also becomes available on the 16th of September 2012. This process can cure inequitable conduct that committed during the original ex parte prosecution.  

Judge Richard Linn to take Senior Status

Patent,

Judge Richard Linn has announced his intention to take “senior status” effective November 1, 2012. Judge Linn has been sitting as a circuit court judge on the Court of Appeals for the Federal Circuit since January 1, 2000. Judge Linn is a longtime patent attorney and began his patent law career as an examiner at the United States Patent & Trademark Office in 1965 – working while also attending Georgetown University Law Center. He holds a degree in electrical engineering from Rensselaer Polytechnic. In recent years, Judge Linn has been instrumental in developing an alliance of intellectual property focused inns of court known as the “Linn Inn Alliance.”

On the bench, Judge Linn has always been skeptical of novel legal theories. It is fair to place him on the “pro-patentee” side of the bench – especially based upon his notion of broad subject matter eligibility and a high bar for inequitable conduct findings. Judge Linn authored almost 300 patent decisions and his voice of reason will certainly be missed.

Judges on senior status continue to hear cases, but typically with a reduced docket. Those judges are also allowed under the law to move outside of the DC area. Of key importance, his senior status will open a seat on the 12-member bench for an additional nominee. The seat created by Chief Judge Michel’s 2010 retirement also remains open. Edward DuMont was originally nominated for the slot by President Obama, but that nomination rescinded after the Senate failed to even schedule a hearing. In November 2011, President Obama nominated Richard Taranto for the slot. The Senate is expected to eventually confirm the Taranto nomination, but that work might be delayed until after the November election.

Judges Newman, Lourie, Bryson, and Dyk are all eligible to take senior status.

Upcoming Patent Law Conferences at Indiana-Bloomington

Patent,

By Jason Rantanen

The Center for Intellectual Property Research at Indiana University Maurer School of Law is sponsoring three conferences this fall on the state of patent law.  At the first conference, coming up in just two weeks, I'll be speaking about inequitable conduct in the wake of Therasense v. Becton Dickinson and the way the new supplemental examination rules are likely to impact patent law.  That conference features a panel discussion about what the AIA accomplished involving heavyweights in both academia (Mark Janis, John Duffy & Rochelle Dreyfuss) and industry (Mark Chandler, Gary Griswold, Doug Norman, and John Vaughn). 

Full details on each conference are available by following the links.

September 13-14:
The America Invents Act: One Year Later
Keynote Speakers:
David Kappos, Director, USPTO
Robert Armitage, General Counsel, Eli Lilly and Company
 
September 24: 
The State of Patent Litigation: A Conversation with the Federal Circuit
Keynote Speakers:
Hon. Randall Rader, Chief Judge, U.S. Court of Appeals, Federal Circuit
Hon. S. Jay Plager, Circuit Judge, U.S. Court of Appeals, Federal Circuit
(In cooperation with the Federal Circuit Bar Association)
 
November 2-3: 
The Future of Design Protection Law
Mark D. Janis, Robert A. Lucas Chair of Law, IU Maurer School of Law
Graeme Dinwoodie, Professor of Intellectual Property and
Information Technology Law, Oxford University
(Held at Oxford University)

Are the Courts Correct in Their Assumption that a Patent Issued on Non-patentable Subject Matter is Invalid?

Patent, , , ,

By David Hricik, Mercer University School of Law. (Note – this is an update of the essay posted last week on the Patent Ethics site.)

I forget when I first thought about this, but it’s been a while. With all the discussion of Prometheus (sadly, the case, not the film, which was great), I figured this was a good time to raise it. At minimum, there’s a litigable question here, and assumptions that a patent issued on non-patentable subject matter is invalid need examination. I’d love to be wrong about this, but I don’t think I am.

Some History.

I have not scorched the earth, but from what I can tell no court has squarely addressed the question of whether the Patent Act allows a court to deny enforcement (on any ground) of a patent granted on subject matter that is not within Section 101. Instead, what the cases showed me was that law developed in the context of challenges to the USPTO’s denial of a patent have been used to invalidate issued patents – without analyzing the statutory authority to do so.

Let’s take a look at what most people assume is the law and see if we can get there: does the Patent Act allow a court to invalidate a patent that does not claim patentable subject matter?

Section 282

The starting point is 35 USC 282. It provides in pertinent part:

The following shall be defenses in any action involving the validity or infringement of a patent and shall be pleaded:

(1) Noninfringement, absence of liability for infringement, or unenforceability,

(2) Invalidity of the patent or any claim in suit on any ground specified in part II of this title as a condition for patentability,

(3) Invalidity of the patent or any claim in suit for failure to comply with any requirement of sections 112 or 251 of this title,

(4) Any other fact or act made a defense by this title.

Federico’s commentary, often relied on to indicate Congressional intent, doesn’t help at all, but here it is:

The defenses which may be raised in an action involving the validity or infringement of a patent are specified in general terms, by the second paragraph of section 282, in five numbered items. Item 1 specifies “Noninfringement, absence of liability for infringement, or unenforceability” (the last word was added by amendment in the Senate for greater clarity); this would include the defenses such as that the patented invention has not been made, used or sold by the defendant; license; and equitable defenses such as laches, estoppel and unclean hands. The second item specifies “Invalidity of the patent or any claim in suit on any ground specified in Part II of this title as a condition for patentability”; this would include most of the usual defenses such as lack of novelty, prior publication, prior public use, lack of invention. The third item specifies “Invalidity of the patent or any claim in suit for failure to comply with any requirement of section 112 or 251 of this title”; the first section mentioned would include the defense of insufficient disclosure, and the second sentence mentioned would include reissue defenses. The fourth item merely specifies “Any other fact or act made a defense by this title.” All the defenses usually listed in textbooks on patent law may be placed in one or another of the enumerated categories, except a few which are no longer applicable in view of changes in the new statute.

Section 101.

Section 101 is relied upon as the basis for invalidating patents. It states: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”

While clearly granting power to the USPTO to issue patents on “new and useful” processes, it obviously also limits the USPTO’s power to do so.

The question here is not patentability, but validity. Simply, suppose the USPTO makes a mistake, and issues a patent on non-patentable subject matter. Is this a defense to infringement?

In my view, the answer is “no.”

Analysis.

Let’s start with the two specific subsections, because they make us focus on the text and show some very deliberate choices by Congress that easily could have gone the other way had Congress intended 101 to be a defense.

The second subsection of 282 is probably the most important: “Invalidity of the patent or any claim in suit on any ground specified in part II of this title as a condition for patentability.”

Section 102 and 103 are “conditions of patentability.” They say so in their titles, and they are substantive legal conditions (technically, I’d call them “conditions of unpatentability” given the burdens of proof, but this works). The fact that 101 is not a condition of patentability is to me is very important: Congress chose in 282(2) to specify that only those things denominated as “conditions of patentability” are bases for invalidity. It then chose to label 102 and 103 as conditions, but not 101. Those are deliberate choices. In my view, a patent issued on non-patentable subject matter is not “invalid” under the second provision.

Subsection 3 of Section 282 is easy to apply to this question, but it is important because it also adds to the evidence that 101 is not a defense. Patentable subject matter is in 101, not 251 or 112. So that part’s easy: 282(3) doesn’t list 101.

But the important point, again, is that Congress deliberately thought about what should be invalidity defenses, and what should not, and left out 101 not just as a “condition of patentability,” but also in this specific paragraph, where it “caught” some strays. It left out 101. That says a lot.

Two down, two to go.

Now we’re left with arguing that, although it thought about what should be invalidity defenses in two different places, nonetheless we should imply that Congress meant to include it in some amorphous language in the other two subsections. We’re fighting uphill.

Let’s go to the first catch-all type subsection: “Noninfringement, absence of liability for infringement, or unenforceability.” Logically, I can’t make patentable subject matter fit, at all. Before explaining why, let’s be clear on the consequences of saying that Section 101 is within this section: it would be that the patent is valid but there would be no infringement.

“Unenforceability” is the easy one. The cases and legislative history I’ve read show this was designed to capture equitable doctrines like patent misuse and, arguably, inequitable conduct (long diversionary story there). We’d be straining to put 101 there.

Federico’s statements that the defendant hadn’t made the product, or had a license to do so, show that “infringement” means what we think it means. A licensed patent is valid, but “not infringed.” A patent that the defendant never violated is valid, but not infringed. So, I can’t make “noninfringement” logically work or work without giving words a very unnatural meaning.

Now the only arguable catch-all, subsection 4: “Any other fact or act made a defense by this title.” Here we are, trying to read it into the catch-all that, even Federico says, “merely” specifies things in the statute that are made defenses. But, section 101 is not made a defense by this title. Instead, it specifically points to other requirements and conditions. Again, if this were easy and clear, Congress would have put in 101 “it shall be a defense to patent infringement that…” or put 101 in Section 282.

So, tell me why I am wrong.

Let me get rid of some easy ones: no court I’ve found has ever addressed this issue. I think it’s pretty simple, but there you go. Second, don’t conflate patentability with infringement defenses. There are lots of things that can affect patentability that aren’t in 282. Third, 282 is exclusive: if you want so suggest that it’s not, you (a) have to say “Congress enacted a specific statute laying out defenses, but it’s just a guide” which is not in my view defensible; and (b) it says “shall be defenses,” not “may include” or some-such. Third, this is a relatively new “defense.” I can’t say I’ve scorched the earth, but in looking at CAFC cases it has only been raised a few times.

Meyer v. Bodum: A Waste of Public and Private Resources?

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Meyer Intellectual Properties Limited v. Bodum, Inc. (Fed. Cir. 2012) Panel: Dyk (concurring), Moore, O'Malley (author) Download 11-1329

At its heart, Meyer v. Bodum is essentially an obviousness case, although for reasons having to do with the procedural posture, the court never gets to the merits of that issue, instead remanding the case for further proceedings based on numerous errors committed by the district court, which the opinion portrays as misguided and lacking an understanding of the basics of patent law.  

Judge Dyk's concurrence, reproduced in its entirety at the end of the post, goes even further, concluding that "this case is an example of what is wrong with our patent system…Such wasteful litigation does not serve the interests of the inventorship community, nor does it fulfill the purposes of the patent system."  Slip Op. at 46-47.

BodumBackground: Frank Brady was an independent sales representative for Bodum from 1986-1996, during which time he marketed and sold products including Bodum's French press coffee makers.  In the mid-1990's, Brady came up with the idea of a milk frother that used aeration instead of steam, and in 1996, he filed a patent application directed to a "Method for Frothing Liquids" that led to two issued patents, Nos. 5,780,087 and 5,939,122.  The claims essentially involve four steps: "(1) providing a container that has a height to diameter aspect ratio of 2:1; (2) pouring liquid (e.g., milk) into the container; (3) introducing a plunger that includes at least a rod and plunger body with a screen; and (4) pumping the plunger to aerate the liquid."  Slip Op. at 5. Brady also sold milk frothers through his company, BonJour, which was subsequently sold to Meyer. 

Bodum2In 1999, Bodum began selling the first generation of its accused milk frothers.  The figures  accompanying this post are the opinion's comparisons of Bodum's Version 1 frother with the '087 patent. Shortly after Meyer filed an infringement suit in 2006, Bodum changed its designs, removing the spring element holding the screen against the inside wall of the container and replacing it with an O-ring.  The O-ring was later removed to create the Version 3 frother. 

Following a jury trial in which the jury held the patents to be valid and willfully infringed, awarding $50,000 in damages, the district court trebled the damages, declared the case exceptional, and awarded Meyer its attorney fees of $756,487,56.  Bodum appealed, alleging a panopoly of errors by the district court.  The Federal Circuit agreed. 

Infringement: The CAFC vacated the district court's grant of summary judgment of infringement due to a lack of any evidence of direct infringement in the record.  Rather, the district court relied only on assumptions of direct infringement.  "We find it troubling that the district court based its direct infringement analysis on what it assumed happened, rather than on actual evidence of record. This assumption contradicts our well-established law that a patentee must prove infringement by a preponderance of the evidence."  Slip Op. at 26.

Evidentiary Rulings: Prior to and during trial, the district court made a number of evidentiary rulings that sharply limited Bodum's ability to present its case.  In an uncommon move, the Federal Circuit concluded that the district court had abused its discretion in these rulings, holding that (1) the district court erroneously limited the scope of prior art to only two references (one of which was subsequently excluded), despite sufficient disclosure of several additional references; (2) the district court  erroneously excluded Bodum's expert from testifying despite a report containing a sufficiently detailed statement of his opinions and the bases for his conclusions, especially given the non-complex nature of the technology; and (3) the district court erroneously precluded lay witnesses from testifying to authenticate one of the two allowed prior art references.  The CAFC thus remanded for a new trial on obviousness.

Inequitable Conduct: The CAFC also held that the district court erred by dismissing Bodum's inequitable conduct claims on a motion in limine.  Under Seventh Circuit law, "a motion in limine is not the appropriate vehicle for weighing the sufficiency of the evidence."  Slip Op. at 41-42.  The district court thus "erred in addressing the sufficiency of Bodum's inequitbale conduct defense on an evidentiary motion." Id. at 42. 

Willful Infringement and Enhanced Damages: Because the CAFC remanded the case for a new trial on infringement and invalidity, it vacated the wilfulness verdict and enhanced damages award.  In doing so, it suggested that the district court use Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 682 F.3d 1003 (Fed. Cir. 2012) (in which the Federal Circuit held that threshold "objective prong" of the willfulness inquiry is a question of law) as a starting point.

Judge Dyk's Concurrence: Writing in concurrence, Judge Dyk questioned why this patent issued in the first place and why it was not found obvious on summary judgment: 

While I agree with and join the thorough majority opinion, in looking at this case from a broader perspective, one cannot help but conclude that this case is an example of what is wrong with our patent system. The patents essentially claim the use of a prior art French press coffee maker to froth milk. Instead of making coffee by using the plunger to separate coffee from coffee grounds, the plunger is depressed to froth milk. The idea of frothing cold milk by the use of aeration rather than steam is not new as reflected in the prior art Ghidini patent.  Under the Supreme Court’s decision in KSR International Co. v. Teleflex, Inc., 550 U.S. 398, 420 (2007), and its predecessors, it would be reasonable to expect that the claims would have been rejected as obvious by the examiner, and, if not, that they would have been found obvious on summary judgment by the district court. But no such thing. The parties have spent hundreds of thousand of dollars and several years litigating this issue, and are invited by us to have another go of it in a second trial. Such wasteful litigation does not serve the interests of the inventorship community, nor does it fulfill the purposes of the patent system.

Judge Dyk specifically refers to the private costs of this litigation – the hundreds of thousands (at least a million, if both parties' costs are taken into account) of dollars spent by the parties on legal fees.  The public, too, has spent a substantial amount of resources on this case: the district court's time and resources, the jury's time (and perhaps a future second jury), and the Federal Circuit's own time spent correcting the errors – as evidenced by its thorough 44-page opinion.  Beyond these monetary costs, Judge Dyk's concurrence hints at an even greater public cost: the undermining of public confidence in the ability of the patent office and the courts to get patentability decisions on even relatively technologically simple inventions right.

Supplemental Examination Final Rules

Patent

By Jason Rantanen

As Dennis writes below, tomorrow the USPTO will publish five final rules packages for implementing the America Invents Act.  This post focuses on the Supplemental Examination Rules, available here.  In large part, the Final Supplemental Examination Rules mirror the proposed rules, which I discussed in a previous post. 

The biggest change from the proposed rules relates to the elimination of some of the specific content requirements. Originally, the rules articulated several very specific categories of information that the requestor was required to provide.  The final rules are more streamlined, paralleling the content requirements for submitting an ex parte reexamination. They do, however, retain the requirement of a "A separate, detailed explanation of the relevance and manner of applying each item of information to each claim of the patent for which supplemental examination is requested." 37 C.F.R. § 1.610. (This requirement parallels the ex parte reexamination requirement of 37 C.F.R. § 1.510(b)(2).)

The PTO considered other potential changes, but in each case decided either to retain the original rule or concluded the change was mooted by its change to the content requirements.  It slightly bumped up the limit on the number of items of information that could be submitted from 10 to 12.

The cost for filing a supplemental examination request remains steep: $5,140 for the initial request plus $16,120 for the ex parte re-examination fee. Both must be paid at the time of initial request, and the $16,120 will be refunded if no re-examination is ordered.  The rules also finalize the substantial increase in the fee for filing a request for ex parte reexamination: $17,750.  Initially the small- and micro-entity reductions will not apply to these fees, although the PTO's proposed fee structure under Section 10 of the AIA do allow for such reductions. (USPTO fee website).

Given these costs, together with the realities of how patent litigation actually works and how inequitable conduct claims are generally developed, I remain highly skeptical of the PTO's projection that it will receive about 1,430 requests for supplemental examination annually.  Indeed, I suspect this number will actually be much, much smaller.  Most information that might be submitted in a supplemental disclosure request will be discovered too late for supplemental examination to matter.    For similar reasons, I am dubious of the PTO's prediction that supplemental examination will reduce the number of district court patent infringement cases in which inequitable conduct is plead as a defense. 

Monsanto wins $1b verdict on RoundUp Ready Seed Patent

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Dr. EvilBy Dennis Crouch

The PACER entry is compelling:

JURY VERDICT For: Plaintiffs Against: Defendants In the Amount of: One Billion Dollars. (Entered: 08/02/2012)

In his August 6 order, Judge Webber confirmed the jury verdict that DuPont/Pioneer willfully infringe Monsanto's GMO roundup-ready seed patent. The jury rejected the defendants' claims that the asserted patent was invalid; that the patent had been finally obtained through inequitable conduct; and that the reissue patent improperly expanded the scope of the original claims. The judge also confirmed the jury's reasonable royalty damage award of "One Billion Dollars ($1,000,000,000)."

The asserted patent was Monsanto's reissue No. RE 39,247 and the accused product was DuPont's Optimum GAT soybean line that has never been released to the public. Rather, thus far DuPont's use of the patent has been for research purposes. No matter – the US has only a de minimis research defense that certainly does not apply here. See Madey v. Duke. Thus, unlicensed use of the Monsanto genetically modified soybean seed counts as infringement, even if that use was only for the development of a commercial product.

There is no question that this innovation was groundbreaking and has transformed the landscape of American agriculture. The genetic modification makes crops tolerant to the herbicide glyphosate. Although far from organic, glyphosate (RoundUp) has a much smaller negative environmental impact than other herbicides. In addition, the use of glyphosate has allowed for no-till farming that greatly reduces topsoil runoff and energy demands. In his press release, Monsanto's General Counsel David Snively wrote that the verdict "highlights that all companies that make early and substantial investments in developing cutting edge technology will have their intellectual property rights upheld and fairly valued." Snively's remarks are perhaps overstated, but at least have some kernels of truth.

The damages theory was interesting. Since the accused product was not yet on the market, Monsanto did not seek any lost profit. Rather, Monsanto demanded a reasonable royalty for the research-use made by the defendants. Monsanto argued that the use of Monsanto's invention in DuPont's labs and Pioneer's test fields gave those companies an "improper head start" in making the GM seeds. The judge and jury agreed – if those companies wanted to build upon the invention then they should have first obtained a license. In the pharmaceutical world, 35 U.S.C. § 271(e) offers a research exemption for this type of activity. However, that exception does not apply here because of the low level of regulation over genetically modified food-products. The patent is set to expire in 2014. The patentee's right-to-exclusive-research supported by this case means that the 2014 date offers a starting-date for follow-on competitive research. Any actual products building directly upon the patented invention will arrive on the market sometime later.

I sat-in on one day of the jury trial that was held in St. Louis, Missouri. The eight-member jury were largely attentive as they listened to DuPont's technical expert explain DNA and problems with the patent. I smiled at seeing the jury members walk in wearing t-shirts and carrying notepads. Their attitude and attire was a severe contrast to the room full of two-dozen attorneys and experts (each charging hourly). Although I'm sure that Judge Webber could have ably decided the case himself, the jury of individual citizens gave me a bit more confidence in our system and, in my mind, offers the ultimate reality check for this type of case. At least some of the jury members appear to be fans of Dr. Evil.

The level of damages, claim construction, and other issues will be the subject of an appeal the Court of Appeals for the Federal Circuit.

Denial of Summary Judgment Arguing No Inequitable Conduct

Ethics

In Bristol-Myers Squibb Co. v. Teva Pharma. USA, Inc. (D. Del. Civ. A. No. 10-805-RGA, July 19, 2012), the patentee moved for summary judgment against an inequitable conduct defense. The court denied the motion.  The alleged information concerned compound 2'-CDG.  The patentee argued that there was no similarity between that compound and the claimed invention, entecavir, and so the information was not material. However, the court denied the motion. In part the court stated:

The inventor is one of several people credited with an article which contains a statement about 2'-CDG's "structural similarity" to entecavir. The inventor, when questioned about the article, said he had neither written nor read it before it was published.  Such a statement at least raises a credibility concern. I do not think making the credibility decision on summary judgment in this case is appropriate.  

The court went on to state, however:

I have also considered that the issue here involves the state of mind of three individuals abouttwentyyearsago. Itisoftendifficulttoprovesomeone'sstateofmindaboutsomething thepersondidyesterday. Toprovebyclearandconvincingevidencethatapersonintendedto deceive the PTO twenty years ago, in the absence ofany direct evidence that he did so, is about as difficult as climbing Mt. Everest. I cannot say, however, as a matter of law that it cannot be done. See Aventis Pharma SA. v. Hospira, Inc., 675 F.3d 1324, 1334-37 (Fed. Cir. 2012) (affirming a finding of an inventor's intent to deceive in 1990).