U.S. IP Brokers: No Ethical Regulations and No Standards
In a blog post by Raymond Millien of the Washington D.C. Intellectual Property Attorney Blog, he poses the question, What professional and ethical regulations govern the conduct of these IP middlemen? In the post Millien discusses that Individual inventors and corporate IP owners are used to dealing with Accountants, Lawyers and Investment Advisors – all professionals who are governed by federal and/or state professional regulations, as well as national association guidelines. However, Millien suggest that less than 20% of IP middlemen are attorneys, which suggest that they are not governed by any ethical regulations. Therefore, the answer to the question that Millien poses is "none". Millien further notes that, earlier this year, the British Standards Institution (BSI) – the UK's National Standards Body – released standard BS 8538:2011, entitled "Specification For The Provision Of Services Relating to the Commercialization of Intellectual Property Rights. The British Standard specifies middlemen ethical behavior principles relating to: integrity and competence; transparency regarding fees, costs and finances; confidentiality and the disclosure of information; the declaration of conflicts of interest; and complaint handling, among other things. [Link]
Will Research In Motion (RIM) Sell Its Patents?
Jaguar Financial Corp. told RIM, the maker of the BlackBerry, that it should consider selling itself or spinning off its patents to boost investor returns after a slump in its stock price. Vic Alboini, CEO of Jaguar stated that RIM should create a committee of 4 or 5 independent directors to study the options to sell itself or its patents. RIM has been losing its stronghold on the smartphone market in recent years, with the introduction of Apple's IPhone and Google's Android phones. If RIM does decides to sell its patents or itself it could be another billion dollar deal. Google recently bought Motorola Mobility and for over 12 billion dollars. It seems like this 2011 is the year of big patent sales. [Link]
Paul Graham's Patent Pledge
Graham proposes patent reform without the government. Graham states that, "one way of using patents that clearly does not encourage innovation is when established companies with bad products use patents to suppress small competitors with good products." Graham suggest that a way to decrease this kind of abuse is to get the companies that are above pulling this sort of trick to pledge publicly not to. The Pledge that Graham proposes is very simply written:
No first use of software patents against companies with less than 25 people.
Is this a good idea and could it possibly work? [Link]
Patent Jobs:
Lee & Hayes is seeking Patent Attorneys with at least 3 years of experience and a (EE) or Computer Engineering background. [Link]
The Bill and Melinda Gates Foundation is searching for an Associate General Counsel, with a minimum of 10 years of experience. [Link]
The Bill and Melinda Gates Foundation is looking for 2 IP Attorneys with a minimum of 3 years of experience. [Link]
Katten Muchin Rosesman is seeking a patent agent with a background in the electrical arts. [Link]
Upcoming Events:
The Chicago-Kent Supreme Court IP Review will be held on September 15th at Chicago-Kent College of Law. The conference is designed to provide intellectual property practitioners, jurists, legal academics and law students with a review of IP cases from the U.S. Supreme Court's 2010 Term, a preview of cases on the docket for the 2011 Term, and a discussion of cert. petitions to watch. Guest speakers include, Judge O'Malley, Mark Lemley, David Kappos, and a number of other influential individuals in the IP field. [Link]
The 2nd European Pharmaceutical Regulatory Law Forum will be held in Brussels, Belgium September 21-22nd. The forum will focus on recent developments affecting the pharma industry in Europe and will discuss the impact of US developments on European companies. (Patently-O readers can register with code PO 10 for a 10% discount) [Link]
The Fall 2011 Meeting of the Carolina Patent, Trademark & Copyright Law Association is scheduled for September 23-24, 2011 at the Wild Dunes Resort, Isle of Palms, S.C. with 7.25 hours of CLE credit planned. The cost is $250/member and $350/non-member. Guest speakers & presenters include, Tom Irving of Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, Prof. Harold C. (Hal) Wegner of Foley & Lardner, LLP, Maury M. Tepper III of Tepper & Eyster, PLLC and current chair of the Trademark Public Advisory Committee to the U.S. Patent & Trademark Office, Prof. Timothy R. Holbrook of Emory University, Michael S. Connor of Alston & Bird, LLP, Dean Adrienne Meddock of North Carolina Central University School of Law, & Demian Barbas of Norton Rose, OR, LLP. [Link]
American Conference Institute's Life Sciences Business Development & Acquisitions in Emerging Markets conference is scheduled for September 26-27 in New York, NY. (Patently-O readers can register with code PO 200 for a discount) [Link]
Boston University School of Law and the Kauffman Foundation will be holding a Workshop on Innovation and Patent Harmonization at Boston University School of Management on September 30-October 1. The workshop will cover the effect of harmonization in both advanced countries, such as the US, and in developing nations, with a particular focus on China. Anyone interested in attending, please RSVP to Elizabeth Aggot at eaa@bu.edu. [Link]
American Conference Institute's 12th Annual Maximizing Pharmaceutical Patent Life Cycles will take place in New York on October 4th-5th. The conference is one of the leading sources of information and analysis on the patent life cycle management. (Patently-O readers can register with code PO 200 for a discount) [Link]
C5 will be holding the 21st annual Forum on Biotech Patenting in London on October 5th-6th. The 2011 London Biotech Patenting Forum will focus on the latest legal developments affecting biotech companies and how to implement successful methods and strategies for drafting and filing patent applications in multiple jurisdictions. (Patently-O readers can save 100 pounds by using discount code PO 100) [Link]
Houston Intellectual Property Law Association (HIPLA) will be holding its Annual IP Institute in Galveston, Texas October 6-8. The Institute will feature topics such as: Do's and Don'ts in IP Licensing, Due Diligence and Ethics in Acquisitions, Patent Prosecution Under the New Cases and Inducement of Patent Infringement after Global Tech Appliances v. SEB. The guest speaker will be Lord Justice Robert "Robin" Jacob, Court of Appeal of England and Wales. [Link]
American Conference Institute will be holding a FDA Boot Camp Device Edition conference on October 25th-October 26th in Chicago. (Patently-O readers can register with code PO 200 for a discount) [Link]
Licensing Executives Society (LES) will be holding their annual meeting on October 16-19 at the Manchester Grand Hyatt in San Diego. Guest speakers include, Martha Ries, VP of IP Management, The Boeing Company and Barbara Dalton VP, Venture Capital, Pfizer. (Register by 8/31 to receive a $100 discount) [Link]
The University of Texas at Austin will hold its 16th Annual Advanced Patent Law Institute on October 27-28. The program will cover: recent developments in claims construction and claims drafting, cost savings in litigation, inequitable conduct after Therasense, and many other topics. [Link]
In a four-page Federal Register notice of proposed rulemaking of proposed rulemaking, the US Patent Office has indicated its intent to revise its duty-to-disclose standards based upon the recent Federal Circuit en banc decision in Therasense, Inc. v. Becton, Dickinson & Co., — F.3d — (Fed. Cir. 2011).
In Therasense, the Federal Circuit held that, apart from potentially affirmative egregious misconduct, inequitable conduct in patent prosecution should not be found unless it is proven that the misconduct was a “but for” cause of the patent issuing. Focusing specifically on the failure to disclose prior art, the court wrote: “[w]hen an applicant fails to disclose prior art to the PTO, that prior art is but-for material if the PTO would not have allowed a claim had it been aware of the undisclosed prior art.” The office introduces its proposal as follows:
Specifically, the Office is proposing to revise the materiality standard for the duty to disclose to match the materiality standard, as defined in Therasense, for the inequitable conduct doctrine. While Therasense does not require the Office to harmonize the materiality standards underlying the duty of disclosure and the inequitable conduct doctrine, the Office believes that there are important reasons to do so. The materiality standard set forth in Therasense should reduce the frequency with which applicants and practitioners are being charged with inequitable conduct, consequently reducing the incentive to submit information disclosure statements containing marginally relevant information and enabling applicants to be more forthcoming and helpful to the Office. At the same time, it should also continue to prevent fraud on the Office and other egregious forms of misconduct. Additionally, harmonization of the materiality standards is simpler for the patent system as a whole.
The newly proposed Rule 56(b) (37 C.F.R. 1.56(b)) would read as follows:
Sec. 1.56 Duty to disclose information material to patentability.
* * * * *
(b) Information is material to patentability if it is material under the standard set forth in Therasense, Inc. v. Becton, Dickinson & Co., — F.3d — (Fed. Cir. 2011). Information is material to patentability under Therasense if:
(1) The Office would not allow a claim if it were aware of the information, applying the preponderance of the evidence standard and giving the claim its broadest reasonable construction; or
(2) The applicant engages in affirmative egregious misconduct before the Office as to the information.
* * * * *
Under the new rule, the mere failure to disclose information will never be considered material to patentability if the pending claim is allowable. A parallel change would be made to the disclosure rules governing reexaminations.
The current Rule 56(b) defines material information as non-cumulative information that either (1) “by itself or in combination with other information…compels a conclusion that a claim is unpatentable under the preponderance of evidence, burden-of-proof standard” or (2) is inconsistent with “a position the applicant takes” arguing that the claim is patentable. The current rule implemented in 1992 and was itself an attempt by the USPTO to limit the scope of materiality. The pre-1992 rule required submission of information whenever there was a “substantial likelihood that a reasonable examiner would consider [the information] important in deciding whether to allow the application to issue a patent.”
Thus far in 2011, the average issued patent cites 42 prior art references. This number is highly skewed because of a minority of patents that cite to an excessively large number of prior art references. The median patent in 2011 cites 17 references. Only 8% of the 2011 patents cite more than 100 references, but those patents collectively cite more references than the other 92% combined.
The USPTO is also seeking comment on other actions that “may provide an incentive for applicants to assist the Office by explaining/clarifying the relationship of prior art to the claimed invention.”
Written comments regarding the proposed rule change should be submitted to AC58.comments@uspto.gov within the next 60 days (by September 19, 2011).
American Calcar, Inc. v. American Honda Motor Co., Inc. (Fed. Cir. 2011) Download 09-1503-1567 Panel: Lourie (author), Bryson, and Gajarsa
In its first decision addressing the issue of inequitable conduct since Therasense v. Becton Dickinson, the Federal Circuit affirmed the district court's finding of materiality with respect to one patent, but remanded for further findings on materiality (in connection with the two remaining patents) and intent (with respect to all three patents).
The inequitable conduct issues in this case revolve around a family of patents sharing a common specification. One of the patents, No. 6,330,497 ("the Three-Status patent"), relates to "a system that allows a user to select an option from a list, to be shown a preview of information about it, and then to activate it." Slip Op. at 12. Two other patents, Nos. 6,438,465 and 6,542,795 ("the Search patents") claim a system for performing searches on a system in a vehicle.
Prior to the filing of the patent application, the inventors closely examined an Acura 96RL that contained a navigation system with features similar to those later claimed in the Three-Status and Search patents. Although the 96RL system is described in the background section of the patent application, that description is limited to the navigation aspect of the system, not the user interface aspects. Thus, the inventors "never disclosed to the PTO the aspects of the 96RL system relating to the three-status feature or the search feature." Slip Op. at 14.This failure to disclose formed the basis of the district court's finding of inequitable conduct, which Calcar sought to overturn on appeal.
Jury Verdict Merely Advisory In reaching its conclusion of inequitable conduct, the district court disregarded an advisory jury verdict of no inequitable conduct. The CAFC rejected Calcar's argument that this constituted error. "Inequitable conduct is equitable in nature, with no right to a jury, and the trial court has the obligation to resolve the underlying facts of materiality and intent…Where a court submits the question to a jury, and both parties agree that the jury findings will be advisory, the court shall treat them as such. [] That is the universal rule." Slip Op. at 23 (internal citations omitted).
Appliation of Therasense The CAFC next turned to the substance of the district court's findings. With respect to the Three-Status patent, the panel concluded that, even under the "but-for" standard of Therasense, the district court had correctly found materiality. "We agree with Honda that the undisclosed 96RL information was material to the Three-Status patent because the jury found, and the court upheld, the asserted claims as anticipated by the 96RL system, and ACI has not appealed that decision to us." Slip Op. at 25.
The materiality of the Search patents was more questionable, given that the jury had rejected Honda's invalidity arguments based on the 96RL system. Nevertheless, "the withheld information may be material if it would have blocked patent issuance under the PTO's preponderance of the evidence standard, giving those patents' claims their broadest reasonable construction." Id. As a result the CAFC remanded to the district court to assess materiality under a "but-for" standard, applying the evidentiary standard and claim scope used by the PTO. The CAFC did not give any guidance as to how the latter might differ from the scope previously applied by the district court.
The CAFC reached a similar result on intent, concluding that the district court had relied on a sliding scale standard, "basing its finding of intent significantly on the materiality of the 96RL system to the claimed invention." Slip Op. at 26. That approach was rejected in Therasense, and the CAFC remanded for further consideration in light of that opinion.
Note: The court also affirmed the district court's rulings of noninfringement as to several other patents and reversed its denial of judgment as a matter of law that another patents was invalid.
For those who find this information noteworthy, the panel in this case included two members of the dissent in Therasense. Judge Lourie, the author of this opinion, was a member of the Therasense majority.
In a 6–1–4 decision, an en banc Federal Circuit has attempted to cure the “plague” of inequitable conduct pleadings by raising the standards for proving that the alleged bad act was material to patentability and that the patentee undertook the alleged bad act with intent to deceive the USPTO. The court has also rejected the sliding scale approach that previously allowed strong evidence of materiality to compensate for weak evidence of intent to deceive (and vice-versa). Finally, the the court held that a finding of inequitable conduct should not immediately render a patent unenforceable. Rather, the court must also “weigh the equities” to determine whether the inequitable conduct warrants the unenforceability remedy.
To prevail on the defense of inequitable conduct, the accused infringer must prove that the applicant misrepresented or omitted material information with the specific intent to deceive the PTO. The accused infringer must prove both elements—intent and materiality—by clear and convincing evidence. If the accused infringer meets its burden, then the district court must weigh the equities to determine whether the applicant’s conduct before the PTO warrants rendering the entire patent unenforceable.
Intent: For the element of intent to deceive the USPTO, the Federal Circuit now demands evidence of a “deliberate decision” to deceive. Focusing on the failure to submit material prior art, the court held that the intent element requires “clear and convincing evidence that the applicant knew of the reference, knew that it was material, and made a deliberate decision to withhold it. . . . Proving that the applicant knew of a reference, should have known of its materiality, and decided not to submit it to the PTO does not prove specific intent to deceive.” When circumstantial evidence is used, intent to deceive must be the “most reasonable inference.”
Materiality: For the element of materiality, the Federal Circuit now demands evidence of “but-for materiality.” In other words, the court must find that, but for the deception, the PTO would not [should not] have allowed the claim. “In making this patentability determination, the court should apply the preponderance of the evidence standard and give claims their broadest reasonable construction.”
Exceptions: As a major exception, the court here held that in cases involving affirmative egregious misconduct, but-for material need not be proven.
Unenforceable: [UPDATED] Even when material and intent are proven, the court held that a patent should only be rendered unenforceable due to inequitable conduct “where the patentee’s misconduct resulted in the unfair benefit of receiving an unwarranted claim.” As in eBay v. MercExchange, this equitable analysis is intended to serve as a substantial requirement that limits the discretion of district courts.
Patent attorneys regularly have hundreds of patent applications pending, each with their own due dates – far too many for anyone remember on their own. We keep track through docketing systems, paralegals, and attorney cross-checks. We are often overwhelmed – especially when firms change and staff leaves (as happened in this case). One of the comments to this post astutely introduced the old adage: “there but for the grace of God go I.”
The Aussie slot-machine manufacturer Aristocrat missed its US national stage patent filing deadline by one day. The patent was saved when the USPTO granted Aristocrat’s US attorney’s petition to revive the abandoned application based on the claim that the “entire delay” in filing the appropriate papers was “unintentional.” During infringement litigation against market leader IGT, the district court first held the patent invalid based on a defense of improper revival. In particular, the district court held that the USPTO lacked authority to revive national stage applications unless the abandonment met the much higher standard of being unavoidable. On appeal, the Federal Circuit reversed — holding that improper revival did not constitute a cognizable defense to allegations of infringement under 35 U.S.C. 282.
On remand, IGT shifted its focus to unenforceability — alleging that Aristocrat committed inequitable conduct in the revival of its abandoned application.
Late Filing and Hiding Abandonment from Client: The district court used one-hundred-twelve paragraphs to described the facts relating to the abandonment and revival. Here are a few key facts:
January 10, 2000: On the day of the 30–month deadline, Aristocrat’s US patent counsel (Shahan Islam) used US Express mail to file the necessary documents to enter US national stage examination. The USPTO received the documents the next day (January 11, 2000). However, according to the USPTO, Islam did not include sufficient evidence to prove the January 10, 2000 mailing date. And, Mr. Islam’s firm did not retain the filing evidence in a locally held file.
June 2001: The USPTO dismissed Islam’s petition to correct the filing date and indicated that the application remained abandoned. Mr. Islam later testified that he did not remember receiving the June 2001 decision. The court found that Mr. Islam likely saw the decision shortly after it was mailed.
November 2001: Aristocrat requested a status update on the application from Mr. Islam. (Up to that time, Aristocrat had been told nothing of the abandonment issues). In December 2001, Mr. Islam responded in an e-mail that “we have learned that the application won’t be examined for at least another nine months(!) [or] so in view of the backlog.” The e-mail did not indicate anything about the abandonment. Mr. Islam also forwarded his response to another attorney at his law firm saying “lets discuss.”
During this same time period, eight other Aristocrat applications being prosecuted by Mr. Islam also went abandoned based on failure to respond to PTO notices mailed in 2001.
July 18, 2002: Mr. Islam (at this point with the KMZ firm) filed a petition for revival for unintentional abandonment — included a statement that “the entire delay in filing the required reply from the due date for the reply until the filing of a grantable petition under 37 CFR 1.137(b) was unintentional.” In addition, Mr. Islam filed a preliminary amendment and petition for accelerated examination. In a letter to Aristocrat, Mr. Islam incorrectly (and apparently intentionally) stated that the amendment & petition to accelerate had been filed in January 2002. The letter did not mention the petition for revival.
September 3, 2002: USPTO granted the petition to revive.
2003: KMZ attorneys informed Aristocrat of the abandonments & revivals.
Revival: The USPTO typically does not require documentation to revive under the unintentional delay standard. Rather, the office relies on the applicant’s statements that the entire delay in filing a response was unintentional. Here, the USPTO did not require specific documentation.
Unintentional versus Not Intentional: In its analysis, the district court held that the facts did not provide clear and convincing evidence that Mr. Islam had intentionally delayed the petition filing. In particular, the court could find no motive for the delay. Instead, the delay appeared to be the result of Mr. Islam’s ongoing negligence rather than intentional misbehavior. Negligence is the foundational non-intentional tort and therefore a finding of negligence does not suggest that the delay was intentional. In an odd logical analysis, Judge Whyte concluded that Islam’s failure to notify Aristocrat of the abandonment “actually suggests that the delay was unintentional.”
Mr. Islam did not want to disclose his errors [to Aristocrat] because he was likely embarrassed by his failure to act in accordance with his client’s instruction. Had it been granted, Mr. Islam’s Petition to Correct would have avoided abandonment altogether. Mr. Islam’s deflections in December 2001 show that he was fully aware that Aristocrat wished to proceed with the ‘717 application. Mr. Islam’s comments to Mr. Owen’s regarding the PTO backlog at the time further avoided acknowledging any personal responsibility for delay but it may have been correct, especially considering that the ‘717 application remained in an abandoned state even after the PTO had officially revived it. Still further, Mr. Islam’s incorrectly dated Second Preliminary Amendment is further evidence that Mr. Islam’s chief motive was to hide his failures from Aristocrat. Once the June 2001 Decision was sent, a decision to deliberately delay reviving the ‘717 application would not have helped to hide his errors from Aristocrat.
Although Judge Whyte found “Mr. Islam’s testimony was disturbingly vague and his lack of memory difficult to believe,” the Judge agreed with the notion the delay was entirely explained by Mr. Islam’s disorganization and the “out of control” state of his practice at the time. “Even if Mr. Islam failed to properly prosecute the ‘717 application, ‘unintentional’ delay does not require that the delay have occurred despite the exercise of due care and diligence (as does ‘unavoidable’ delay).”
After holding that the delay was not intentional, the court concluded that the statement regarding unintentional delay could not be a material misrepresentation and therefore that the defense of inequitable conduct could not stand.
Expert Opinion: Two leading patent law experts testified at the inequitable conduct hearing: Charles Van Horn for Aristocrat and Paul Gardner for IGT. While the court found the testimony helpful for explaining the prosecution of PCT applications, it found the experts’ extensive legal conclusions filled with “blatant advocacy” to be “not helpful.” Judge Whyte has been known to speak critically against expert testimony in patent cases.
The U.S. Patent System moved one step closer to a major overhaul. On Thursday, April 14, the Judiciary Committee of the House of Representatives voted 32-3 in favor of the America Invents Act (Patent Reform Act of 2011).
As mentioned in Professor Sichelman’s post, A managers amendment would have changed the definition of prior art to include only (1) patent applications and (2) public disclosures. Under that proposal, non-informing uses, sales, and offers-to-sell would not qualify as prior art. However, that portion of the manager’s amendment failed (the rest of the managers amendment passed and is now included within the bill).
The amended act includes a several additional tweaks, including:
A sunset provision for USPTO fee setting funding authority;
A limitation that the new post-grant supplemental examination procedure (designed to allow an applicant to wash away the threat of inequitable conduct charges) cannot be used if the USPTO finds that the applicant committed fraud on the patent office during the original prosecution;
The establishment of a pro bono program for assisting “financially under-resourced” inventors; and
A few odd statements about the move from “first inventor to use” to “first inventor to file.”
Representatives Lamar Smith, Bob Goodlatte, and Darrell Issa have introduced their version of the America Invents Act (AIA) to the House of Representatives. H.R. 1249. [AIA.pdf] The AIA closely tracks the Senate’s bill on comprehensive patent reform (S. 23) that was passed in the Senate earlier this year on a 95-5 vote. Parallel changes include a switch to a first-to-file system (with the retention of a limited one-year grace period); establishment of a modified inter partes reexamination and post grant opposition system; providing USPTO with fee-setting authority; neutering of the false marking provision; allowing pre-issuance submissions by third-parties; creating a supplemental examination system to correct inequitable conduct; and elimination of best mode failure as an invalidity defense.
The statute continues to include a substantial error in its codification of the grace period. Namely, the grace period only applies to “disclosures” and not to other commercialization activities such as sales and offers for sale. In addition, it is unclear whether the grace period would apply situations such as the original public use case of Pennock v. Dialogue, 27 U.S. 1, 23, 7 L. Ed. 327 (1829). In that case, the Supreme Court ruled that the inventor could not obtain a patent on its hose-making process because the inventor had sold the product (hoses) for several years before filing for patent protection.
Some key differences from the Senate version that will lead to substantial debate include:
Details of the Post Grant Opposition Provisions…
Prior User Rights: Whether “prior user rights” should be expanded to accompany the switch to a first-to-file regime. This issue arises when, for instance, a manufacturing company is using a particular process as a trade secret before another party invented and patented the process. Under our current first-to-invent regime if the prior-user was sued for infringement, the patent would likely be invalidated under Section 102(g). See Dunlop Holdings Ltd v. Ram Golf Corp., 524 F.2d 33 (7th Cir. 1975). The invention-date priority contests of Section 102(g) are eliminated in a first-to-file system, raising the question of whether a non-patent-filing manufacturer should be given some prior user rights that would continue to allow these trade-secret uses. Currently, the patent statute also has a prior user right codified in Section 273. That section, however, is limited purely to business method patents. The proposed legislation would expand Section 273 to cover all patents.
Special Business Method Proceedings, venue restrictions, interlocutory appeals, and attorney fee shifting.
Automatic stay of litigation for inter partes reviews.
Elimination of Tax Strategy patents (by considering the subject matter within the prior art).
Codification of Knorr Bremse (failure to present advice of counsel cannot be used as evidence of willful infringement).
Aventis Pharma S.A. v. Hospira (Fed. Cir. 2011) (precedential order) Download 11-10181047 order Panel: Prost, Mayer, and Moore (author)
The Federal Circuit has repeatedly warned about improper cross-appeals. Last week, the court issued a precedential order expressing its frustration with appellees who engage in this practice in violation of the court's clear rules, threatening sanctions should future parties continue to disregard its warning.
Aventis is in the process of appealing a judgment finding all of the asserted claims of the patents involved in its infringement suits against Apotex and Hospira invalid for obviousness and unenforceable due to inequitable conduct. In response, Apotex filed a cross-appeal to preserve its ability to challenge the district court's ruling that some of the asserted claims were not invalid on another ground, double-patenting, and to argue noninfringement. After Apotex declined to withdraw its cross appeal, Aventis filed a motion to dismiss.
The motions panel was unsympathetic to Apotex. "Our precedent consistently warns against the improper use of a cross-appeal to reach issues that do not otherwise expand the scope of the judgment. A cross-appeal may only be filed “when a party seeks to enlarge its own rights under the judgment or to lessen the rights of its adversary under the judgment.”" Slip Op. at 3 (quoting Bailey v. Dart Container Corp., 292 F.3d 1360, 1362 (Fed. Cir. 2002). Apotex's conduct was particularly egregious because it was exactly the type of cross-appeal that the court previously ruled improper in TypeRight Keyboard Corp. v. Microsoft Corp., 374 F.3d 1151, 1157 (Fed. Cir. 2004). That rule, the CAFC noted, is clear. "Where [] the district court has entered a judgment of invalidity as to all of the asserted claims, there is no basis for a cross-appeal as to either (1) additional claims for invalidity or (2) claims of noninfringement." Slip Op. at 4, quoting TypeRight at 1157.
After concluding that Apotex's attempts to distinguish TypeRight were without merit, the court issued a strongly-worded warning about the practice of filing improper cross-appeals:
As Apotex points out, we have not sua sponte struck every improperly filed cross-appeal. This infrequent leniency is not an invitation to flaunt our practice and precedent, and the improper use of a cross-appeal directly contrary to our precedent may meet with sanctions. We understand Aventis plans to seek attorneys’ fees and costs incurred in connection with the motion to dismiss Apotex’s improper cross-appeal, and will evaluate its request in due course.
Slip Op. at 5.
Why do parties file cross appeals? Although parties may file improper cross appeals because they are legitimately concerned about waiving the ability to challenge a district court ruling, cross-appeals also give appellees procedural benefits. In a typical Federal Circuit appeal, the appellant is permitted to file a 14,000 word opening and a 7,000 word reply brief while the appellee may file one 14,000 word opposition brief. When a cross-appeal is involved, the appellee may file a 16,500 word opposition brief and a 7,000 word cross-appeal reply (the appellant is allotted 14,000 words for its reply). This give the appellee an extra 9,500 words – a precious commodity – along with the last word on the cross-appeal issues. But obtaining this advantage in contravention of the rules constitutes gaming the system – and as the court in Aventis noted, "this is neither fair to the appellant nor an efficient use of the appellate process." Slip Op. at 3.
Apotex likely got off lucky. If the court had waited until the briefing was complete, Apotex could have had its cross-appeal arguments disregarded altogether, even those it could have raised as alternate grounds for affirmance. As the court noted, however, Apotex will now be able to make those arguments in its appellees' brief if it so chooses. And should the court decline to grant Aventis's request for attorneys' fees and costs, its opinion may have little deterrant effect – unless the court steps up enforcement or imposes some noteworthy sanction for blatantly improper cross appeals, appellants may continue to flaunt its practice in order to gain the procedural advantage a cross-appeal offers.
Over 1,000 false marking lawsuits have been filed in the past two years. The flash of opportunism was triggered by recent court rulings that the statutory-authorized $500 fine per offence could be calculated on a per-article basis. Thus, the false-marking of one million paper cups could result in a maximum $500 million fine. The false marking statute – 35 USC 292 – sets a maximum fine but does not set a minimum. Thus, it is also possible for a court to set the fine at well under a penny per offense.
Although most of the lawsuits are still pending, about 180 settlements have been reached. Justin Gray of GrayOnClaims and the Foley firm has been tracking these settlements through the use of FOIA requests and has made the settlement information public. Although patent settlements are not usually publicly available, false marking settlements become public because of the punitive fine received by the US government.
Of the settlements reported thus far, the average value is $53,404 and median is $40,000. This takes the total settlement value to just under $10 million. The lowest settlement has been $500 and the largest $350,000. Of course, it may well be that the largest potential settlements are still pending.
As the chart shows below, settlements have been on the rise over the past few months.
A few plaintiffs dominate the settlements. The top-five settlement plaintiffs are associated with over half of all settlements and settlement value. Patent Group LLC has settled the most cases thus far (37) while Promote Innovation LLC has the most revenue ($899,000). Patent Group LLC self identifies only as a Texas limited liability corporation represented by Ken Good of Tyler Texas. Promote Innovation LLC is also a Texas LLC represented by the Antonelli firm of Houston (former Weil Gotshal attorneys).
I pulled up the docket for Promote Innovation’s case against Roche. The complaint alleges that Roche falsely has continued to mark its ACCU-CHEK diabetes monitoring kits as covered by patents that were held unenforceable due to inequitable conduct back in 2005. See Roche Diagnostics Corp. v. Apex Biotechnology Corp, 374 F. Supp. 2d 673 (S.D.Ind 2005) (holding the patent and is progeny unenforceable).
Earlier today, I testified in Congress before the House of Representatives Judiciary Committee’s Subcommittee on Intellectual Property, Competition, and the Internet. [Link] The IP subcommittee will have jurisdiction over any patent reform measures introduced to the House. The other two witnesses were Professor Dan Burk (UC Irvine) and Andrew Pincus (Mayer Brown, representing BSA). The focus of today’s hearing was on the changes that have occurred in patent law since the patent reform process began in 2004. I.e., what is left for Congress to reform? Our written and recorded testimony is available online here: http://judiciary.house.gov/hearings/hear_03102011_2.html.
Questioning was extensive and included questions from subcommittee Chairman Goodlatte (R-VA), Vice-Chairman Watt (D-NC), and Representatives Conyers (D-Mich), Nadler (D-NY), Chu (D-CA), Reed (R-NY), and Adams (R-FL). Representatives Coble (R-NC) and Quayle were also in attendance.
My written Testimony Follows:
Committee on the Judiciary< ?xml:namespace prefix ="" o />
United States House of Representatives
Subcommittee on Intellectual Property, Competition and the Internet
Hearing
“Review of Recent Judicial Decisions on Patent Law”
We are likely nearing a turning point in a decade-long process of patent reform.Although there is still clearly a strong demand for legislative measures, much has changed since the landmark FTC and NAS point-by-point criticisms of the patent law system were released in 2003 and 2004 respectively.[1] Likewise, much has changed in the six years since the Patent Reform Act of 2005 was introduced in the House of Representatives.[2]Perhaps in response to these external pressures, the Federal Courts have taken a more active role in shaping patent policy from the bench and have particularly addressed many of the concerns raised by the various patent reform initiatives.
In most areas of law, court-developed doctrines mature quite slowly.Over the past decade, however, patent law has been a dramatic counter-example.The courts have substantially altered many longstanding patent doctrines in the course of a few short years.[3]Several factors combine to explain this phenomenon.First, unlike most other federal legal questions appealed to regional Circuit Courts of Appeal, virtually all patent law related appeals from across the country are heard by the Court of Appeals for the Federal Circuit (the “Federal Circuit”).The national reach of the Federal Circuit means that a ruling by the court has an automatic nationwide impact in much the same way that decisions by the United States Supreme Court have a nationwide impact.However, unlike the Supreme Court, the Federal Circuit hears hundreds of patent cases each year.Over the past ten years, the funneling of patent appeals to the Federal Circuit has resulted in the court hearing over four thousand patent infringement appeals in addition to its review of patent decisions from the United States Patent and Trademark Office (the “Patent Office”) and the International Trade Commission.[4]The large number of cases provides the court with the opportunity to rapidly shift the law, even when each case presents only an incremental change. In addition to the means to effect change, it is apparent that both the Federal Circuit and the Supreme Court have taken an interest in shaping patent law policy.[5]Finally, unlike many Federal statutes, the Patent Act as codified in Title 35 of the United States Code is a relatively sparse statute that leaves tremendous leeway for interpretation.
Over the past six years, the Supreme Court granted certiorari and issued a number of important patent decisions that:
·Make it easier to invalidate (or reject) a patent on obviousness grounds, KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007) (eliminating technical hurdles for proving an invention obvious and instead applying a “common sense” analysis for assessing patentability);
·Make it more difficult for a patent holding company to obtain injunctive relief to stop ongoing infringement, eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006) (holding that even an adjudged infringer should not be automatically enjoined from continuing to infringe; rather an injunction should only issue after consideration of the traditional four-factor test for equitable injunctive relief);
·Make it easier for a manufacturer to obtain a declaratory judgment of non-infringement, MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007) (holding that declaratory judgment (“DJ”) jurisdiction may exist even if the patent holder could not have sued the DJ plaintiff for infringement; apprehension that patentee will sue for infringement is not a necessary element for Article III jurisdiction);
·Solidify our understanding of the scope of patentable subject matter available for business method patents, Bilski v. Kappos, 130 S. Ct. 3218 (2010) (invalidating Bilski’s claimed invention – a method of hedging against the occurrence of bad weather – as an unpatentable abstract idea);
·Limit the doctrine of export infringement under 35 U.S.C. § 271(f), Microsoft Corp. v. AT&T Corp., 550 U.S. 437 (2007) (holding that Microsoft could not be held liable for exporting software code because the exported source code does not qualify as a “component” under the statute); and
·Provide roadmaps for stronger patent licensing agreements, see Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617 (2008) (patent “exhausted” under first sale doctrine because patentee did not restrict licensee’s sales to third party purchasers) and Ill. Tool Works Inc. v. Indep. Ink, Inc., 547 U.S. 28 (2006) (holding that in antitrust tying cases, courts should not presume that a patent confers market power).
During this time, the Federal Circuit has also actively addressed patent reform issues with decisions that:
·Attempt to implement venue reform in a way that limits unreasonable forum shopping, In re TS Tech United States Corp., 551 F.3d 1315 (Fed. Cir. 2009) (on writ of mandamus, ordering case transferred out of venue that had no meaningful ties to the patent infringement case);[6]
·Rationalize patent damage awards, Uniloc USA, Inc. v. Microsoft Corp., ___ F.3d ___, 2011 U.S. App. LEXIS 11 (Fed. Cir. 2011) (holding that the 25% Rule for calculating patent damages is “fundamentally flawed” and that total product revenue cannot be considered in the reasonable royalty analysis unless the Entire Market Value Rule applies.) and Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009) (requiring a proof that purported “comparable” licenses used for calculating a royalty rate are, in fact, comparable); Wordtech Systems, Inc. v. Integrated Networks Solutions, Inc., 609 F.3d 1308 (Fed. Cir. 2010).
·Limit enhanced damages, In re Seagate, 497 F. 3d 1360 (Fed. Cir. 2007) (limiting the potential for treble damages to cases where the adjudged infringer’s actions were at least “objectively reckless”) (see Chart 1);
·Expand the false marking doctrine, Forest Group Inc. v. Bon Tool Co., 590 F.3d 1295 (Fed. Cir. 2009);
·Limit inequitable conduct pleadings, Exergen Corporation v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009) (requiring that inequitable conduct pleadings include “specific who, what, when, where, and how of [any] material misrepresentation or omission”); and
As we sit here today, the courts also have a number of important cases pending resolution. Among others, these include:
·A challenge to the presumption of validity associated with issued patents, Microsoft Corp. v. I4I Ltd. P’ship, 131 S. Ct. 647 (2010) (certiorari granted on the issue of whether the presumption of validity associated with an issued patent must always be overcome with clear and convincing evidence);
·A challenge to the patentability of genetic material, See Ass’n for Molecular Pathology v. United States PTO, 2010 U.S. Dist. LEXIS 35418 (S.D.N.Y. 2010) (holding BRCA gene patents invalid for being directed to a law of nature);
·A Constitutional challenge to the False Marking provisions of the Patent Act, Unique Prod. Solutions, Ltd. v. Hy-Grade Valve, Inc., 2011 U.S. Dist. LEXIS 18237 (N.D. Ohio 2011) (holding the False Marking statute unconstitutional) and United States ex rel. FLFMC, LLC v. Wham-O, Inc., Fed. Cir. App. No. 2011-1067 (pending appeal challenging Constitutionality of the statute);[8]
·A question regarding the mens rea requirement for inducing infringement under 35 U.S.C. § 271(b), Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 458 (2010) (grant of certiorari);
·A major challenge to the implementation of the judge made law of inequitable conduct, TheraSense, Inc. v. Becton, Dickinson & Co., 374 Fed. Appx. 35 (Fed. Cir. April 26, 2010) (en banc order requesting briefing); and
·A challenge to patent ownership rights under the Bayh-Dole Act, Bd. of Trs. of the Leland Stanford Junior Univ. v. Roche Molecular Sys., 131 S. Ct. 502 (2010) (grant of certiorari).
For better or worse, the courts have substantially shifted the playing field over the past six years. And, the cases currently pending and in the pipeline appear poised to continue this process.Of course, the courts have limited power and cannot make statutory amendments or offer funding to the Patent Office. It is safe to say, however, that the courts have addressed (or are addressing) virtually all of the legitimately raised patent reform issues that fall squarely within their purview. Within this dynamic, an important ongoing role of Congress is at least to ensure that the courts are making the right policy choices.
Patent Office Backlog: A key issue of patent law policy that has not been adequately addressed in the past six years is the growing backlog of patent applications pending at the Patent Office.Although the current Patent Office management team is quite focused on reducing the backlog, their efforts have not been overwhelmingly successful to-date.As seen in Chart 2 (below), the overall backlog of patent applications pending at the USPTO has increased more than 30% since 2005.The forced delay is troubling for patent applicants because the exclusive patent right is only enforceable once the patent issues, and typically only against post-issuance infringement.The multi-year prosecution delay is also troubling for potential competitors and customers because the patent right may eventually spring-forth to re-capture exclusive rights that had been in public use for years.
Even more dramatic, is the twenty seven fold (~2700%) increase in the backlog of cases awaiting decision at the Board of Patent Appeals and Interferences (BPAI). (Chart 3).The long and growing backlog of appeals more than doubles the expected duration of the patent prosecution process for the almost 50% of patent applicants that achieve at least a partial victory on appeal.
These backlogs likely cannot be directly corrected by the courts. Instead, every effort must be made to ensure that the Patent Office is enabled and encouraged to right its own ship.In the short term, the Patent Office will need to hire more examiners; re-work its failing information technology system; and apply effective negotiation theories to the examination process.In the longer term, world patent offices must work-share when examining duplicate patent applications that have been filed in multiple countries.[9]In addition, there are some relatively easy steps that can be taken to help ensure that patent applications are filed in a way that make them easier to examine.This may include (1) requiring applicants to better delineate their invention and its purposes and (2) more rigorously enforcing the requirement that claims be clearly drafted in a way that relates to the invention as disclosed.
Obviousness and the Backlog: The bulk of time spent in the patent examination process and in appeals to the BPAI revolves around the issue of obviousness.[10]In other words, the backlogs can be largely attributed to time spent arguing the difficult issue of obviousness. Unfortunately, nothing in the proposed legislation does anything directly to alleviate this burden.Although the process of examining patents for obviousness may seem to be one best left to the administrative agency, the Patent Office is bound to follow the examination processes laid out by the courts in KSR v. Teleflex[11] and Graham v. John Deere Co.[12]Because so much time and energy is spent on this issue during the examination process, it may be one where increased substantive rulemaking authority would allow the Patent Office to create a more manageable approach to the statutory question.
Foreign Inventor Influence on the US Patent System: Through a number of reciprocal international agreements such as Paris Convention, the US has promised citizens of other countries access to the US patent system.[13]Under these agreements, an innovative Japanese company seeking exclusive rights in the US market could obtain US patent protection and enforce those rights in US courts against US competitors.Despite this offer of rights, the bulk of issued US patent have always been based on US originated inventions.This practical statistic meant that, historically, US patent reform primarily impacted US companies and US inventors.Over the past six years, the statistic changed, and for the first time in history, the majority of US patents are now being issued on foreign-originated inventions. (Chart 4).
For some, this decline in US-centric dominance of the US patent system will serve as a sign that US innovation could use additional encouragement. In addition, however, the decline may signal a need to change our outlook on the role of patent rights in US policy. Certainly, the offer of patent rights encourages innovation and disclosure of new inventions.However, this incentive is felt around the world – encouraging companies in Australia or Germany to innovate in their home countries in order to capture an exclusive slice of the US market.[14]In this framework, patent reform is much more than a domestic policy issue. Rather, it becomes an issue of rooted in international trade and international relations.This is not a new concept, but one that should be kept in mind as the legislation moves forward.
Rise in Patent Reexamination Filings: The US has two primary post-grant opposition processes already in place: (1) inter partes reexamination and (2) third-party requested (or prompted) ex parte reexamination.Prior to 2005, it appeared that many potential defendants and accused infringers were reluctant to use the post-grant opposition processes.That reluctance has largely evaporated – in part because of the USPTO’s successful implementation of a Central Reexamination Unit (CRU) composed of elite and highly trained patent examiners in sufficient quantity to have a high response rate.[15]In addition, patent law professionals have seen that reexamination can be an effective and relatively inexpensive alternative to litigation.At this point, high-dollar patent infringement lawsuits are usually associated with a parallel reexamination of the patents in-suit – so long as the defendant has a credible obviousness argument based on published materials.Table 1, shows the rise in popularity of reexaminations over the past few years.
Percent Change in Number of Reexamination Requests
Inter Partes Reexamination Requests
53
903
1704%
Ex Parte Reexamination Requests
1,719
3,272
190%
A notable limitation of the current reexamination system is that reexaminations are only allowed to consider certain invalidity arguments (obviousness and anticipation) and apply a limited set of prior art (patents and printed publications).Many countries offer broader latitude in their opposition proceedings, although some of those countries completely divide duties between the administrative agency (handling invalidity issues) and the court (handling infringement).[17]The dramatic shift in usage of available post grant options gives me pause to consider whether the proposed reforms in 2005 offered a permanent solution to what was merely a temporary problem.
A more straightforward approach to issues now before the Committee is to identify elements of prior patent reform measures that have not been addressed by the courts. These include:
(1)Easing the USPTO’s ability to set fees for its services and to retain all fees collected;
(2)Moving from a “first-to-invent” system to a “first-to-file” system;
(3)Expanding prior-user rights;
(4)Requiring that all patent applications be published by the USPTO;
(5)Allowing pre-issuance protests (or prior art submissions) by third parties;
(6)Expanding the scope of post-grant reexamination or adding an additional post-grant opposition proceedings;
(7)Eliminating the “best mode” requirement; and
(8)Easing the rules for assignee submission of patent filings without the inventor’s express permission.
Each of these reform measures have their own potential benefits and detriments that vary according to the implementation approach chosen.
Thank you for this opportunity to present my remarks.
Dennis Crouch
March 10, 2011
[1] Federal Trade Commission, To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy, A Report by the Federal Trade Commission, October 2003; Nat’l Res. Council of the Nat’l Acads., A Patent System for the 21st Century (Stephen A. Merrill et al. eds., National Academies Press).
[3] See William C. Rooklidge & Alyson G. Barker, Reform of a Fast-Moving Target: The Development of Patent Law Since fee 2004 National Academies Report, 91 J. Pat. & Trademark Off. Soc’y 153 (2009).
[4] Federal Circuit Statistics, Filings of Patent Infringement Appeals from the U.S. District Courts at http://www.cafc.uscourts.gov.
[5] Polk Wagner & Lee Petherbridge, Is the Federal Circuit Succeeding? An Empirical Assessment of Judicial Performance, 152 U. Pa. L. Rev. 1105 (2004) (“since its inception, the [Federal Circuit]—with some assistance from the Supreme Court—has moved aggressively in support of its widely perceived mandate”); Paul R. Michel, Assuring Consistency and Uniformity of Precedent and Legal Doctrine in the Areas of Subject Matter Jurisdiction Entrusted Exclusively to the U.S. Courts of Appeals for the Federal Circuit: A View from the Top, 58 AM. U. L. REV. 699, 702 (2009); Craig Allen Nard & John F. Duffy, Rethinking Patent Law’s Uniformity Principle, 101 Nw. U. L. Rev. 1619 (2007); Dan L. Burk & Mark A. Lemley, The Patent Crisis and How the Courts Can Solve It (2009)
[6] The TS Tech decision appears to have had a major impact on patent venue jurisprudence. In the two years since the case was decided, its analysis has been followed by almost four dozen different courts.See, for example, Promote Innovation LLC v. Leviton Mfg. Co., 2011 U.S. Dist. LEXIS 16294 (E.D. Tex. Feb. 17, 2011) (granting accused infringer’s motion to transfer venue from the Eastern District of Texas to the Eastern District of New York).
[7] The Tafas decision was vacated pending rehearing en banc and eventually dropped after the USPTO retracted its planned implementation of rules that would limit both the number of claims that an applicant could file per patent application and the number of continuation applications an applicant could file based on a single invention disclosure. See also, Arti K. Rai, Growing Pains in the Administrative State: The Patent Office’s Troubled Quest for Managerial Control, 157 U. PA. L. REV. 2051 (2009).
[10] Dennis Crouch, Understanding the Role of the Board of Patent Appeals: Ex Parte Rejection Rates on Appeal, University of Missouri School of Law Legal Studies Research Paper No. 2009-16 (2009) at http://ssrn.com/abstract=1423922. (90% of BPAI appeals involve a question of obviousness).
[12] 383 U.S. 1 (1966) (setting out the process of the obviousness inquiry as used in both courts and the Patent Office).
[13]Paris Convention for the Protection of Industrial Property, art. 2.
[14] See Commonwealth Sci. & Indus. Research Organisation v. Buffalo Tech., 542 F.3d 1363 (Fed. Cir. 2008) (Australian government entity suing on its US software related patent in the Eastern District of Texas).
[15] Gregory Novak, Concurrent Reexaminations as a Strategic Patent Litigation Defense Tool, 1020 PLI/Pat 797 (2010) (“since the inception of the Central Reexamination Unit (CRU), reexamination proceedings are producing favorable results [for the third-party] in a more timely manner”).
[17] To my knowledge, no one has studied the potential impact of increasing the scope of US reexamination practice or adding a broader layer of post grant opposition.
I am very happy to announce that my fellow Patently-O author, Jason Rantanen, has accepted a tenure track position as an Associate Professor of Law at the University of Iowa College of Law. Professor Rantanen and I were classmates at The University of Chicago School of Law. He holds an MA in History from the University of Chicago and an AB from Brown where he double-majored in Biology and History. For the past year, Professor Rantanen has been a Visiting Researcher at the University of California Hastings School of Law in San Francisco. Prior to that, he litigated patents at the San Francisco firm of Munger, Tolles & Olson LLP. Immediately following law school, he clerked for The Honorable William C. Bryson on the United States Court of Appeals for the Federal Circuit.
In addition to his writings on Patently-O, Professor Rantanen has written several law review articles, including a fascinating empirical study of inequitable conduct cases currently being published in the Southern California Law Review (with Lee Petherbridge and Ali Mojibi).
Rantanen will be filling a spot that opened when Mark Janis left for his alma mater, Indiana. Rantanen's new Iowa colleagues will include one of the most highly respected and renowned IP/Antitrust scholars, Herbert Hovenkamp.
Cancer Research Technology Ltd. v. Barr Laboratories, Inc. (Fed. Cir. 2011) (Precedential Order) Download 10-1204 enbanc order
This morning the CAFC denied Barr Laboratories' request for rehearing en banc. Review was barely denied: the judges split 5-5, just short of the 6-judge majority currently required for rehearing en banc. Dissenting from the denial, both Judges Prost and Dyk expressed opinions on the issue of prosecution laches.
I previously wrote about Cancer Research Technologyhere. In a nutshell, the panel majority reversed the district court's finding of prosecution laches on the ground that no prejudice was shown due to the lack of any evidence of intervening rights arising during the prosecution period. Judge Prost dissented from that ruling, rejecting the idea that prosecution laches requires either prejudice or intervening rights.
Judge Prost's dissent from the denial of rehearing en banc, joined by Judges Gajarsa, Moore, and O'Malley, reiterates and bolsters that view. Drawing on Supreme Court precedent, Judge Prost again argues that the Supreme Court's test for prosecution laches does not require evidence of intervening rights:
This narrowing of the doctrine is not only unnecessary, it is contrary to Supreme Court precedent. It is true that in both Woodbridge and Webster the Court refused to enforce the patent where both unreasonable delay and intervening rights existed. Woodbridge, 263 U.S. at 53, 56-57; Webster, 264 U.S. at 465-66. In each of these cases, however, the Court made clear that both unreasonable delay and intervening rights were not required to support a finding of prosecution laches.
Prost dissent at 3-4. In Judge Prost's view, this precedent instead requires the court to favor flexibility over rigidity as the Supreme Court instructed in decisions such as Bilski, KSR, and eBay.
Judge Dyk wrote separately, commenting that while he agrees with Judge Prost that evidence of intervening rights should not be required, he disagrees with the use of a "totality of the circumstances" test, "which is really no test at all." Dyk dissent at 1.
Is Woodridge Applicable? In his IP newsletter, Hal Wegner takes issue with Judge Prost's characterization of a Supreme Court "doctrine" of prosecution laches based on Woodridge, pointing out that the case had nothing to do with a granted patent. As explained in an amicus brief filed in Symbol Technologies:
Woodbridge v. United States, 263 U.S. 50 (1923), does not provide any guidance regarding prosecution laches because Woodbridge never received a patent. Rather, the Woodbridge case involved a statutory compensation act for private relief for an unpatented invention of Woodbridge. Woodbridge, 263 U.S. at 51. The statute's language required the trial court to deny relief to Woodbridge because there had been laches in his patent procurement process. Id. This statutory laches in a private law therefore had nothing to do with laches in the patent law.
In contrast, Webster Elec. Co. v. Splitdorf Elec. Co., 264 U.S. 463 (1924), did include a discussion of prosecution laches. An examination of the facts in that case, however, reveals that the key issue involved what today would be inequitable conduct. Accordingly, Webster hardly shapes the contours for a well-formed ‘doctrine.’”
Hal Wegner, quoting Symbol Technologies, Inc. v. Lemelson Medical, Educ. & Research Foundation, 422 F.3d 1378 (Fed. Cir. 2005), Brief Amicus Curiae of Takeda Pharmaceutical Co., 2004 Westlaw 3335267, p. 4 (2004)(original emphasis).
Warrior Sports v. Dickinson Wright and John Artz (Fed. Cir. 2010)
Warrior Sports makes lacrosse equipment and hired John Artz's firm to handle patent prosecution. Artz later merged his firm with Dickinson Wright and brought his clients into the crease. One case that Artz worked-on was Reissue No. 38,216. In that case, the Artz firm failed to pay the maintenance fee — allowing the patent to lapse. In their petition for revival, Artz explained that the docketing clerk charged with paying the fee had suddenly died of an unexplained brain infection and that she had been suffering from the malady during the time that the fee was due. Unfortunately, the clerk had kept her illness secret and the firm learned only later that the condition had impacted her performance.
When Warrior sued STX for patent infringement, the defendant argued that the patent had lapsed because of failure to pay the maintenance fee and – in addition – that the patent was unenforceable due to inequitable conduct during prosecution. (The inequitable conduct charge was based upon an argument that Artz had mischaracterized prior art). Rather than lose the infringement case, Warrior settled with STX (on allegedly unfavorable terms) and then sued Artz & Dickinson Wright for legal malpractice.
Federal Court Jurisdiction over Malpractice Claims: Malpractice is a state law claim and is usually handled by state courts (absent federal diversity jurisdiction). However, when the malpractice charge would necessarily require “resolution of a substantial question of federal patent law” a federal question is raised that allows-for (requires?) federal court jurisdiction. Christianson v. Colt Industries, 486 US 800 (1988).
District Court Dismissal: Both plaintiff and defendants agreed that the case should be heard in federal court. Nonetheless, the district court dismissed the case for lack of jurisdiction over the malpractice question.
Holding on Appeal: On appeal, the Federal Circuit vacated the dismissal — holding that the Michigan malpractice claim arises under patent law and therefore should be heard in Federal Court.
Malpractice Elements: In Michigan, legal malpractice has four elements: (1) the existence of an attorney-client relationship; (2) negligence by the attorney in the legal representation; (3) actual injury; and (4) that the negligence be the proximate cause of of the injury.
Case within a Case: Classic patent prosecution malpractice requires a “case within a case” where, in order to prove actual injury, the malpractice plaintiff must show that someone would have infringed a properly obtained patent. “That is, to prove the proximate cause and injury elements of its tort claim, Michigan law requires Warrior to show that it would have prevailed on its infringement claim against STX and would have been entitled to an award of damages as a result.”
Since at least one of the plaintiffs malpractice theories requires proof of infringement, the case raises a “substantial question of patent law conferring § 1338 jurisdiction.” Here, it was important that the court in the infringement case had not decided the infringement issue (it had decided claim construction).
Many empirical studies of Federal Circuit jurisprudence rely on searches of one of the leading legal databases such as Westlaw or Lexis.1 Relying on a search of a single database is potentially problematic, however, if the substantive content of the databases is not identical – in other words, if Lexis and Westlaw don't contain the same universe of cases, any claims about the results are necessarily limited by the dataset being used.
In order to avoid this problem in connection with an empirical study of inequitable conduct that I'm working on, I recently performed a comparison of results obtained by a keyword search on Westlaw versus an identical search on Lexis. This comparison revealed that although the data obtained from the two sources is largely comparable, small differences do exist that certain types of searchers may want to take into account.
The chart below shows the results, by year, produced by searching for the term "inequitable conduct" in the Federal Circuit databases for Lexis and Westlaw.2,3 In large part, the results suggest that there is relatively little variation between the two databases: in the context of this analysis, only 30 out of 681 (4.4%) Westlaw opinions were not found in Lexis and only 6 out of 657 (0.9%) Lexis opinions were not found in Westlaw. Furthermore, in no instance did a precedential opinion appear in one database but not another. Rather, all of the single-database hits were nonprecedential opinions. In addition, nearly all of the nonprecedential opinions appearing in only a single database issued prior to 1991. That said, there is a significant difference with respect to nonprecedential opinions for the period prior to 1991: nearly all the nonprecedential opinions from this time period are found in only one database.4 Thus, while it may not be efficient for most practitioners to run keyword searches on multiple databases, scholars conducting empirical research on Federal Circuit decisions, or individuals searching for older party-specific nonprecedential opinions, may want to be sensitive to the differences between the two databases.
Figure 1: Hits Resulting from Search Term "Inequitable Conduct" in Lexis and Westlaw5
1 See, e.g., Christopher A. Cotropia, "Determining Uniformity Within the Federal Circuit By Measuring Dissent and En Banc Review," 43 LOY. L.A. L. REV. 801, 811 (2010); Christian E. Mammen, Controlling the "Plague": Reforming the Doctrine of Inequitable Conduct,24 BERKELEY TECH. L.J. 1329, 1348 (2009); Craig Allen Nard, Toward a Cautious Approach to Obeisance: The Role of Scholarship in Federal Circuit Patent Law Jurisprudence, 39 HOUS. L. REV. 667, 678 fn 40 (2002); Christian A. Chu, Empirical Analysis of The Federal Circuit's Claim Construction Trends, 16 BERK. TECH. L.J. 1075, 1092 (2001); but see R. Polk Wagner and Lee Petherbridge, Is the Federal Circuit Succeeding? An Empirical Assessment of Judicial Performance, 152 U. PA. L. REV. 1105, 1145 (2004) (using results from both Lexis and Westlaw). In addition, some early empirical studies used the United States Patent Quarterly as their source (see, e.g., John R. Allison & Mark A. Lemley, How Federal Circuit Judges Vote in Patent Validity Cases, 10 FED. CIR. B.J. 435, 436 (2001)), which apparently contains some, but not all, nonprecedential patent decisions. See e.g., Wirco, Inc. v. Rolock, Inc., 17 U.S.P.Q.2d 1084, 1990 WL 12901 (Fed. Cir. Feb. 14, 1990) as opposed to Mechanical Plastics Corp. v. Unifast Industries, Inc., 1988 WL 25422 (Fed. Cir. March 28, 1988).
2 For purposes of creating this chart, I used the additional limitation "CO(c.a.fed.)" to exclude CCPA and Court of Claims decisions, some of which are included in Westlaw's "ctaf" database. In addition, I separately compared the results from a keyword search of the entire "ctaf" database to the results from the Lexis search in order to identify any Lexis-only hits that might have been excluded by the Westlaw court limiter. This process did not reveal any such hits.
3 These results include every search hit that contained the term "inequitable conduct," regardless of the context. It thus should not be viewed as reflecting any measure of substantive inequitable conduct determinations. In addition, hits resulting from search terms appearing only in the database-specific casenotes were excluded, as were instances where the database contained duplicate entries of the case opinion or included a copy of a withdrawn opinion. For more substantive analyses of inequitable conduct jurisprudence, see Lee Petherbridge, Jason Rantanen & Ali Mojibi, The Federal Circuit and Inequitable Conduct: An Empirical Assessment, ssrn id 1686102; Mammen, supra note 1.
4 In addition to double-checking the single-database cases against the search results of the other database, I also spot-checked several decisions against the Lexis/Westlaw case database as a whole by using terms from the parties' names and the Federal Reporter citation, where available. Although in some instances this resulted in a hit, the contents of those hits were blank. See, e.g., Air Products & Chemicals, Inc. v. Tanner, 738 F.2d 454 (1984) (nonprecedential) (no opinion in Westlaw; opinion in Lexis).
4 Although the results for 1997 appear equal, each database contained one opinion for that year that is not in the other database.
The forthcoming Supreme Court decision in Microsoft v. i4i, case number 10-290, seems likely to eliminate the Federal Circuit's judicially imposed "clear & convincing evidence" requirement for invalidating patents, and thus jury instructions thereon, at least for prior art not of record in the patent application file.
Typical of some of the frightening projections is the January 1, 2011 "Law360" article in which Matthew M. Wolf, a Howrey LLP partner, is quoted as saying that: "it will radically alter the nature of trials in the patent world and will apply to every patent case" and that "if juries are told that the standards are the same for invalidating patents as for infringing patents, there will be a lot more defence verdicts and we are going to see fewer defendants desirous of settlement."
That is, it is argued that this result would flow from patent invalidity challenges having the same "preponderance of the evidence" standard as for proving patent infringement. Technically, that might become the case. But how significant would this change be in reality?
First, more than 97% of patent suits are settled before trial with no judicial validity test. Of the small percentage of patent cases that do go to trial, the vast majority are decided or settled there or on appeal on non-infringement, not on invalidity. Considering the many good reasons why the vast majority of accused or actual defendants are willing to settle rather than risk the very high costs and uncertainties of patent litigation, even against numerous dubious troll suits, how much is this one forthcoming change likely to affect patent litigation and settlements overall?
The test is, would this change really dramatically affect anticipatedjury decision-makingreality? [Because patent invalidity is rarely decided other than by juries, such as on summary judgment motions, in view of disputed facts. USPTO patent reexamination standards would not be affected at all by this decision, and are usually delayed too long by the USPTO to be helpful anyway.]
Removing this higher evidentiary burden might indeed affect some unknown relatively small number of future post-trial JMOL and Fed. Cir. decisions. But note the relatively small percentage of those based on invalidity as opposed to non-infringement.
So, what is the basis for projecting that the very small percentage of patents now being held invalid by juries would somehow greatly increase due to this one potential change in jury instructions? [Even if one really believes that juries really do pay close attention to, and fully understand, the typical lengthy jury instructions in a patent infringement suit and are willing split hairs over those instructions. See, e.g., the length of the AIPLA model jury instructions.] Has anyone done a mock jury study to see if leaving out the present jury instruction for "clear and convincing evidence" dramatically changes outcomes?
Could contesting patent validity before a jury realistically become equated to contesting infringement, as alleged? Attacking the validity of a patent is attacking something granted by the United States Government, while deciding infringement is just considering one private company's arguments against another. Furthermore, the jury can be shown for emphasis the Government gold seal and blue ribbon on the patent. Even if the statutory presumption of patent validity could technically be overcome by a mere preponderance of evidence for prior art not of record, the patent owner should be entitled to a jury instruction on thestatutory presumption of patent validity. [Which could be contrasted to no such instruction for deciding infringement]. For example, as indicated Section 5.1 of the June 23, 2009 "National Patent Jury Instructions" and its "Committee Note," presently courts may optionally combine the two existing defense burdens into a single jury instruction that the accused infringer "bears the burden of proving that it is highly probable that the claims are invalid." [Likewise, some other model patent jury instructions.] However, the express "Committee Note" rationale for that is a presumption that "instructing the jury on the presumption in addition to informing it of the highly probable burden of proof may cause jury confusion as to its role in deciding invalidity. This single instruction therefore omits any reference to the presumption of validity. Some courts, however, follow the more traditional approach, and instruct the jury on the presumption. Both approaches appear consistent with Federal Circuit law." Thus, if the "clear and convincing evidence" burden is removed, this "highly probable" instruction would have to be removed, and this present rationale for not instructing a jury on the statutory presumption of patent validity would seem to disappear?
The other public scare story is that this decision will lead to a flood of additional prior art citations in patent applications. That also lacks factual credibility. The already-existing fear of personal "inequitable conduct" accusations is far more motivating than the mere possibility getting a slightly better jury instruction. Furthermore, few applicants would be willing to pay for a much more costly prior art search to add much more art to an IDS just for that remote reason, and also to risk being accused of not having actually read that art in making assertions in claim prosecution.
Whether as a matter of public policy this anticipated change is good or bad for patent law and technical or economic progress is not the subject here. Even if the extent of the potential impact were factually supported, it may not be very relevant to this Supreme Court decision. As understood, this case is being contested primarily on to whether or not there is a proper legal basis and/or precedent for the Federal Circuit to have imposed this additional, non-statutory, evidentiary burden for patent litigation. It is argued that that is inconsistent with modern Supreme Court evidentiary rules for civil cases in general and inconsistent with the evidentiary rules for pre-Federal-Circuit patent suits in the other federal circuits when they were deciding patent cases. [So it is surprising that this issue has not been this contested before. Presumably due to most defendants waiving it by failing to object to this jury instruction?]
The recent decisions controlling the evidence for and/or reducing patent infringement damages recoveries seem to me far more likely to impact patent licensing and settlement negotiations than Microsoft v. i4i. See Uniloc USA, Inc. v. Microsoft Corp., (Fed. Cir. Jan. 4, 2011), Lucent v. Gateway (Fed. Cir. 2009), the two E.D. TX D.C. decisions in which Judge Randall Rader sat by designation, Cornell v. HP (March 2009) and IP Innovation v. Red Hat and Novell (March 2010), and Judge Ward's reduction of a jury award of $52 million in LaserDynamics v. Asus Computer International down to only $6.2 million.
The Ohio Willow Wood Company v. Thermo-Ply, Inc. (Fed. Cir. Order 2011) Panel: Rader (author), Newman (additional views), Moore (concurrence)
When a patentee is faced with an judgment of invalidity or inequitable conduct, it is a relatively common tactic to settle with the accused infringer who, as a condition of the settlement agreement, then joins the patentee in a joint motion for vacatur of the adverse decision. Although vacatur requires exceptional circumstances, it is sometimes granted by the district court. See e.g., Gracenote, Inc. v. MusicMatch, Inc.; Block Financial v. LendingTree; New Medium v. Barco.
The situation becomes more complex, however, when settlement occurs while the case is on appeal. Willow Wood involves an appeal of an Eastern District of Texas judgment invalidating the asserted claims of Patent No. 7,291,182. While the appeal was pending, the parties settled and filed a motion for remand to the district court for consideration of a motion for vacatur. In July 2010, the CAFC issued an order pointing out the high standard for vacatur and ordered the parties to explain what extraordinary circumstances would be presented to the district court that would justify vacatur. Ohio Willow Wood Co. v. Thermo-Ply, Inc., (Fed. Cir. Order July 29, 2010) (nonprecedential).
After considering the parties' response, along with an intervention request by a third party also being sued for infringement of the patent, the panel granted the request for "the limited purpose of the district court's consideration of the parties' motion for vacatur." Ohio Willow Wood Co. v. Thermo-Play, Inc. (Fed. Cir. Order 2011) (Willow Wood II). The CAFC retained jurisdiction, however, "so that any of the parties may seek appellate review by notifying the Clerk of the Court within thirty days of entry of the district court’s decision on remand." Id. at 3.
Concerned about the remand's potential imprimatur on the joint vacatur motion, Judge Moore, writing in concurrence, expressed the opinion that vacatur of existing invalidity opinions should be a rare and disfavored event, particularly in the patent context. Citing U.S. Bancorp Mortgate Co. v. Bonner Mall Partnership, 513 U.S. 18, 29 (1994), the judge reiterated the high threshold for justifying vacatur following settlement: "[o]nly in 'exceptional circumstances' should a district court grant vacatur at the request of the litigants." Willow Wood II concurrence at 2. This is particularly true with respect to patents:
In this case, for example, the patentee has already sued another party on the patent in question. If the decision that invalidated the patent at issue is not vacated, then the patentee will be collaterally estopped from asserting this patent in this and other suits, thereby saving courts and litigants the time and money it takes to proceed with patent litigation. Patent litigations are among the longest, most time-consuming types of civil actions. As of 2009, 384 patent cases had been pending in the district courts for three years or more. 2009 Admin. Off. U.S. Cts. Ann. Rep., at Table S-11. Moreover, the costs of patent litigation are enormous with an average patent case costing upwards of $3 million for each side. See American Intellectual Property Law Association, Report of the Economic Survey 2009 I-129 (2009). If the district court vacates its invalidity judgment then other defendants and other district courts will be forced to proceed with infringement suits, as there would likely be no collateral estoppel. Even if there were no other suits pending, these concerns should still weigh heavily against vacatur, as the only reason the patentee would want an invalidity judgment vacated is to potentially enforce the patent against others.
Concurrence at 3-4.
Judge Moore's decision to weigh in on the merits of the vacatur issue was criticized by Judge Newman, however, who wrote separately "to point out that the views of our colleague in separate concurrence are not the court’s remand order." Willow Wood II, additional views at 2. Although favoring the remand on the basis that the district court is in the better position to rule on the issue of vacatur, Judge Newman declined to endorse Judge Moore's proffer of judicial advice, commenting that "[o]ur remand should be unencumbered by even the appearance of prejudgment or of the weight to be given to various considerations. Indeed, the issues on which our colleague in concurrence offers judicial advice are more complex than is here recognized." Id.
There are three articulated exceptions to the scope of patentable subject matter under 35 U.S.C. § 101: laws of nature, physical phenomena, and abstract ideas. Research Corp. v. Microsoft places a high hurdle in front of challengers who seek to invalidate process patents on the third ground.
Research Corp. Technologies v. Microsoft Corp. (Fed. Cir. 2010) Panel: Rader (author), Newman, and Plager
Research Corporation ("RCT") owns several patents relating to digital image halftoning, which is the process of generating electronic display and print images using only a small number of pixel colors (ex.: red, blue and green in the case of color displays) while appearing to present many more colors and shades than were actually used. Four related patents are relevant to this summary: Nos. 5,111,310, 5,341,228, 5,477,305, and 5,726,772. The applications for the '310 and '228 patents (a continuation-in-part of the '310 patent) were filed before December 4, 1991; the remaining patents are continuations of the '228 patent and claim priority to the earlier filing dates.
RCT brought an infringement action against Microsoft based on these patents; in response, Microsoft asserted, and the district court initially concluded, that the patents were unenforceable due to inequitable conduct, invalid and not infringed. The Federal Circuit reversed that determination in 2008. Microsoft subsequently sought summary judgment against the '310 and '228 patents on Section 101 patentable subject matter grounds, and asserted that the claims of the '772 patent were not entitled to the earlier priority date, thus rendering them anticipated. The district court granted Microsoft's motions, and subsequently held that the only remaining claim, claim 29 of the '305 patent, also lacked entitlement to the earlier priority date. Based on these ruling, the parties stipulated to a dismissal of the suit and RCT appealed.
Section 101 and Process Claims In reversing the district court's ruling that the '310 and '228 patents failed to satisfy Section 101, the Federal Circuit identified a set of considerations that can be applied when assessing the question of abstractness. Drawing upon the Supreme Court's precedent in this area, including its recent decision In re Bilski, the opinion first reiterates that there are only three articulated exceptions to subject matter eligibility: "laws of nature, physical phenomena, and abstract ideas."
Focusing on the category of abstract ideas, the court noted the Supreme Court's admonition in Bilski not to provide a rigid formula or definition for abstractness. Rather, "the Supreme Court invited this court to develop 'other limiting criteria that further the purpose of the Patent Act and are not inconsistent with its text.'" Slip Op. at 14. With that guidance, the panel concluded that it perceived nothing abstract in the subject matter of the processes claimed in the '310 and '228 patents. Specifically, the court observed that:
"The invention presents functional and palpable applications in the field of computer technology";
Some claims in the patents require physical components;
"[I]nventions with specific applications or improvements to technologies in the marketplace are not likely to be so abstract that they override the statutory language and framework of the Patent Act"; and
The incorporation of algorithms and formulas does not prevent patent eligibility.
Nevertheless, while finding these factors met in the instant case, the panel further noted that its analysis was limited to the context of Section 101, which provides only a coarse filter. Abstractness challenges can also be brought against specific claims under Section 112 even if the requirements of Section 101 are met.
Comment: The court's discussion of Section 101 suggests that the issue of patentable subject matter should be analyzed with respect to the patent as a whole; in contrast, Section 112 challenges are analyzed on a per-claim basis.
Burden of Proof for Establishing Priority In addressing the district court's ruling that the asserted claims of the '772 and '305 patents were not entitled to claim priority to the '310 and '228 filing dates, the opinion reinforced the court's prior ruling that the patent holder bears the burden of establishing priority. As the court held, although a patent challenger has the burden of going forward with invalidating prior art, once it has done so the burden shifts to the patent holder. Thus, in an instance where the patent holder attempts to defeat the assertion of invalidity by claiming priority to an earlier application, the patent holder bears the burden of proving the entitlement to priority – including that the claims of the earlier patent are supported by the written description of the earlier specification.
Note: The '772 and '305 patents shared the same specification as the earlier '305 and '228 patents. If the relevant claims had been contained in the '305 or '228 patents, Microsoft would have had the burden of proving lack of written description, as opposed to the burden resting with RCT. Thus, the fact that the claims were part of a continuation was highly significant with respect to the allocation of the burden.
Comment: A related issue is who bears the burden of proof in the context of claims to a pre-filing conception or reduction to practice date. Although not mandated by the text of the opinion, which specifically refers to the burden to establish "an earlier filing date," the court's analysis could be read to support the conclusion that the patent holder bears the burden of proof in this situation as well.
After dispensing with RCT's challenge to the district court's allocation of burden, the panel proceeded to address the priority claims on the merits. With respect to the '772 claims, the panel agreed with the district court, concluding that they were unsupported by the prior disclosure. The panel did reverse on the '305 claim, however, ruling that to satisfy the written description requirement for apparatus claims, the patent need not disclose every method of making the apparatus.
Update: Binal Patel from Banner & Witcoff was kind enough to provide Patently-O with a transcript that the firm prepared of the TheraSense oral argument. It can be obtained here: Download Therasense v Becton – transcription
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Today the en banc Federal Circuit heard arguments in TheraSense v. BD and Bayer (Inequitable Conduct) and TiVo v. Echostar (post-injunction infringement proceedings). Audio of both arguments is now available via the Federal Circuit's website, and Bruce Wexler of Paul Hastings has written a summary of the TheraSense argument.
This is an interesting case that is pending before the Federal Circuit. The focus of the appeal is whether a patentee has any cause of action for a third-party's baseless filing of a reexamination request. The patent laws themselves offer no remedy so Lockwood turned to California State Court – alleging that the Sheppard Mullin law firm should be held liable for Malicious Prosecution, Interference, and Fraud by filing their reexamination request. Lockwood argues that "[Sheppard Mullin lawyers] chose to violate the strict duty of candor required before the USPTO by making deceptive misrepresentations about the nature of purported 'prior art' in two Requests for Reexamination. Respondents filed the Requests to gain a tactical advantage during infringement litigation, in furtherance of their stated aim of putting Lockwood 'out of business,' and without any reasonable basis in patent law."
The District Court granted a 12(b)(6) motion to dismiss – holding that the Federal Patent Laws and administrative structure of the USPTO preempted any cause of action in court against a sham reexamination request filed by a third party. Several law professors are involved with the litigation. Professor Jay Thomas (Georgetown) testified on behalf of Lockwood (stating that the PTO is "an agency in crisis" whose examiners are "overworked, overextended, undertrained, and underpaid"), and Professor David Hricik (Mercer) led a group of law professors who filed an amicus brief supporting Lockwood's position.
The leading Supreme Court case on the merits is Buckman Co. v. Plaintiffs' Legal Committee, 531 U.S. 341 (2001). In that case, the Court held that Buckman's state-law claim for fraud on the FDA was preempted by the Food Drug & Cosmetics Act because the "federal statutory scheme amply empowers the FDA to punish and deter fraud against the Agency, and that this authority is used by the Agency to achieve a somewhat delicate balance of statutory objectives." The FDA holds and actually asserts relatively greater power than the USPTO with respect to fraud on the office. As Professor Hricik writes, "since 1992, the Patent Office has not investigated inequitable conduct, and … cannot award civil damages or recover damages caused to the Office by frivolous filings."
Off the Cuff: One aspect of the law that is unclear to me is how this case differs from the ordinary prosecution malpractice situation. If the USPTO administrative and disciplinary structure preempts a civil action for patent attorney bad-behavior in reexamination filings, it seems that it would also preempt a civil against by a former client against an attorney broke USPTO ethical rules and injured his client. What is the difference?
Bilski v. Kappos
Bilski, Kenny Rogers and Supreme Court Rule 46
Warrior Sports makes lacrosse equipment and hired John Artz's firm to handle patent prosecution. Artz later merged his firm with Dickinson Wright and brought his clients into the crease. One case that Artz worked-on was Reissue No. 38,216. In that case, the Artz firm failed to pay the maintenance fee — allowing the patent to lapse. In their petition for revival, Artz explained that the docketing clerk charged with paying the fee had suddenly died of an unexplained brain infection and that she had been suffering from the malady during the time that the fee was due. Unfortunately, the clerk had kept her illness secret and the firm learned only later that the condition had impacted her performance.
