Transition: May 31 is Chief Judge Paul Michel’s last day on the bench. Judge Randall Rader will become the next Chief Judge of the Court of Appeals for the Federal Circuit.
The Court today released two interesting patent opinions authored by the Chief: Dow Jones v. Ablaise (finding patent invalid as obvious) and Leviton v. Universal Security Instruments (vacating summary judgment of inequitable conduct).
There are several pending en banc cases, including Princo v. ITC (patent pools and antitrust), Hyatt v. Kappos (Admissibility of new evidence in a Section 145 action), Therasense v. BD (standards of inequitable conduct), and TiVo v. EchoStar (contempt proceedings against adjuged infringer who introduced new infringing products).
Combinatorics: With Chief Judge Michel gone, it may be more difficult for en banc panels to overturn prior precedent. With Chief Judge Michel, the court has 11 members and needs a 6–judge majority to overturn prior precedent. Without the Chief, the court will have only 10 members but will still need 6–judges for such a “majority.” With the 11–judge panel, half of the potential outcomes result in majority panel sufficient to overturn prior precedent. With a 10–judge panel, only 38% of the potential outcomes have the same result. (This assumes a binary yes/no on the potential majority position). Chief Judge Michel is particularly important because of his tendancy to side with the majority. In the past decade, Judge Michel has filed fewer dissinting opinions than any other Judge on the Circuit except for Judge Moore (who has only been on the bench for three years). (Judge Newman has filed the most dissenting opinions.)
Next Vacancies: Several other Federal Circuit judges are currently eligible to take senior status. These include Judges Newman, Mayer, Lourie, Gajarsa, and Dyk. Judge Byrson will be eligible in August 2010.
Next Chief Judge After Judge Rader: Judge Kimberly Moore sits as the heir apparent following Judge Rader — assuming that he remains Chief Judge for a full seven years. If Judge Rader vacates the Chief position within six-years, Judge Prost would become Chief.
Orion sued Hyundai and twenty other automobile manufacturers for infringement of its patent covering a “computer-assisted parts sales method.” The invention took computer and database technology available in 1988 and applied that technology to a specific solution. All of the defendants settled except Hyundai who was stuck with a $34+ million verdict jury. On appeal, the Federal Circuit reversed — holding that the asserted patent is invalid as anticipated by a promotional publication for an electronics parts catalog. Note, this post deals with the anticipation issues. I will discuss inequitable conduct in a separate post.
The asserted prior art is a brochure for the IDB2000 system that was distributed by Bell & Howell at least one year prior to the Orion priority date.* [DTX133.pdf (5979 KB)] The brochure does not specifically state that the system generates a customer proposal as required by claim 1 of Orion’s patent. However, at trial, Hyundai presented evidence that the IDB2000 system was “designed to, and did” generate customer proposals. The Federal Circuit latched-onto this testimony regarding the prior art system and used it to expand the coverage of the prior art brochure — holding that the “testimonial and documentary evidence regarding the Electronic Parts Catalog reference establish that the Electronic Parts Catalog reference anticipates claim 1 of the ’627 patent.”
I have genuine problems with the analysis in this opinion. The appellate panel expanded the scope of the asserted anticipatory prior art reference by relying on testimonial evidence of how the associated system was used at the time. There are two separate problems. First, the scope of a “printed publication” should be examined for what it disclosed to one of skill in the art rather rather than to how underlying prior art systems were used at the time. Contemporaneous use would be important for an analysis of whether the invention was “in public use” more than one year before the filing date. However, this decision’s doctrinal focus is solely on anticipation by the prior art brochure as a printed publication. If the IDB2000 system itself anticipated the patent then the defendants should have presented evidence under the public use prong of 102(b). The second problem with the court’s decision is that the oral testimony relied on here opens the door to potentially self-serving testimony that is not ordinarily allowed in invalidity/priority proceedings because it does not satisfy the clear and convincing standard.
* The asserted prior art reference was apparently printed after the Orion filing date. However, Hyundai presented oral testimony that a very similar brochure had been distributed earlier.
Chief Judge Paul Michel will be retiring from the bench later this month after more than twenty-two years on the bench and five as the chief judge. He recently offered his annual “state of the court” address at the court’s annual judicial conference. [Read Judge Michel’s remarks].
As Chief, Judge Michel has taken a specific interest in ensuring that the court runs efficiently and quickly. His remarks:
By every measure our decisions continue to be issued more rapidly. As a result, our inventory of pending appeals has dropped from over 1,400 just a few years ago to only 819 as of April 30. Indeed, as of October 1, 2009 it was 897, so the reductions continue.
One benefit is that we hear cases more quickly. In Fiscal year 2006, for example, only 49% of ready cases could be scheduled for argument without delay. By last year, the number was 84%. This year it will likely rise even further.
Another metric we watch is the percentage of appeals decided within 90 days of argument. This number has ranged recently from 75 to 83%. Likely it will reach 85% this year.
Judge Michel also briefly discussed the pending en banc cases:
Last October we agreed to rehear en banc Princo v. ITC, involving a patent misuse defense based on a patent pool licensing agreement. Argument was held in March. [This case was argued by Edward DuMont. DuMont has been nominated to fill Judge Michel’s place on the bench]
In February, we granted rehearing en banc in Hyatt v. Kappos, asking the parties to brief any limitations on admissibility of evidence in § 145 patenting actions in district court. Argument is scheduled for July 8.
In March, we agreed to rehear Slattery v. United States, a Winstar case, asking whether the FDIC is a non-appropriated funds instrumentality and how the answer to that affects the jurisdiction of the Court of Federal Claims.
In April we granted rehearing en banc in Therasense v. Becton, Dickinson, in which we will reconsider the standards for determining inequitable conduct.
This month, we granted rehearing in TiVo v. Echostar, concerning when contempt proceedings are appropriate as opposed to a new infringement trial on a product that has been altered after the original was found to infringe.
And of course all eyes are on the impending decision in In Re Bilski, concerning the test for patent eligibility.
Although stepping-down from the bench, Chief Judge Michel is “not retiring, but merely changing mission.” He reports that he expects to play a greater role for campaigning for stronger support the courts and USPTO and may also spend some time as a mediator.
Trademark / Antitrust: The Supreme Court has ruled against the National Football League (NFL) in an antitrust suit involving the NFL’s exclusive apparel licensing deal with Reebok/Adidas. The court held that the NFL was not a single business entity, but rather 32 separate business entities. Any antitrust violation involves an underlying market. Here, the supreme court identified that as the market for intellectual property: “Directly relevant here, the teams are potentially competing suppliers in the market for intellectual property. When teams license such property, they are not pursuing the common interests of the whole league, but, instead, the interests of each corporation itself.” In Princo, the Federal Circuit is now considering antitrust issues in the scope of patents and standard-setting organizations. [Read NFL v. American Needle] [Read about Princo v. ITC]
The Chisum Patent Academy is offering its second annual Intensive Patent Law Training Workshop in Seattle on July 29-31, 2010. See http://www.chisum-patent-academy.com. The workshop will focus on substantive patent law (patentability and enforcement) through analysis of critical Federal Circuit and Supreme Court decisions. [Syllabus for 2009 workshop]. New material for 2010 likely include business method patentability post-Bilski, written description requirement compliance post-Ariad, and the evolving landscape of inequitable conduct as reflected by the Federal Circuit’s recent grant of rehearing en banc in Therasense. The workshop is team-taught in seminar style (maximum of 10 students) by Donald Chisum, author of the treatise Chisum on Patents, and Professor Janice Mueller, author of Patent Law, 3d Edition (Aspen 2009). Chisum and Mueller have a combined total of over 40 years experience teaching patent law. The workshop’s coverage is geared for junior patent attorneys, summer associates, engineers, scientists, paralegals, information specialists, and attorneys experienced in non-patent fields who desire an intensive introduction to patent law. Eighteen hours of CLE credit have been applied for.
USPTO News:
The USPTO is further developing its patent prosecution highway and has eliminated the associated fee. [Link]
Green Technology: The USPTO has expanded the number of technology classes that count as “green technology” and that are therefore eligible for expedited processing. [Link]
Kathy Bates on NBC as a former patent attorney. Best quote of the clip is 30–seconds-in.
Trademark / Antitrust: The Supreme Court has ruled against the National Football League (NFL) in an antitrust suit involving the NFL’s exclusive apparel licensing deal with Reebok/Adidas. The court held that the NFL was not a single business entity, but rather 32 separate business entities. Any antitrust violation involves an underlying market. Here, the supreme court identified that as the market for intellectual property: “Directly relevant here, the teams are potentially competing suppliers in the market for intellectual property. When teams license such property, they are not pursuing the common interests of the whole league, but, instead, the interests of each corporation itself.” In Princo, the Federal Circuit is now considering antitrust issues in the scope of patents and standard-setting organizations. [Read NFL v. American Needle] [Read about Princo v. ITC]
The Chisum Patent Academy is offering its second annual Intensive Patent Law Training Workshop in Seattle on July 29-31, 2010. See http://www.chisum-patent-academy.com. The workshop will focus on substantive patent law (patentability and enforcement) through analysis of critical Federal Circuit and Supreme Court decisions. [Syllabus for 2009 workshop]. New material for 2010 likely include business method patentability post-Bilski, written description requirement compliance post-Ariad, and the evolving landscape of inequitable conduct as reflected by the Federal Circuit’s recent grant of rehearing en banc in Therasense. The workshop is team-taught in seminar style (maximum of 10 students) by Donald Chisum, author of the treatise Chisum on Patents, and Professor Janice Mueller, author of Patent Law, 3d Edition (Aspen 2009). Chisum and Mueller have a combined total of over 40 years experience teaching patent law. The workshop’s coverage is geared for junior patent attorneys, summer associates, engineers, scientists, paralegals, information specialists, and attorneys experienced in non-patent fields who desire an intensive introduction to patent law. Eighteen hours of CLE credit have been applied for.
USPTO News:
The USPTO is further developing its patent prosecution highway and has eliminated the associated fee. [Link]
Green Technology: The USPTO has expanded the number of technology classes that count as “green technology” and that are therefore eligible for expedited processing. [Link]
Kathy Bates on NBC as a former patent attorney. Best quote of the clip is 30–seconds-in.
An en banc rehearing is now pending before the Federal Circuit in the case of Therasense (Abbott) v. BD. The case focuses on questions of patent unenforceability due to the patentee’s inequitable conduct during prosecution. The court opinions focus on the actions of Mr. Lawrence S. Pope who was the attorney responsible for prosecution of the asserted patent. The district court held that pope “acted with specific intent to deceive” the patent examiner and the USPTO. Based on that finding, Pope has been investigated by both the PTO Office of Enrollment & Discipline (OED) and the Illinois Attorney Registration and Disciplinary Commission (ARDC).
There is no doubt that the finding of intentional deception has substantially and negatively impacted Mr. Pope. As a pro-active attorney, Mr. Pope (who is no longer with Abbott) attempted to intervene in the case to defend his own record. After receiving briefs on the motion to intervene, the Federal Circuit denied the request.
Writing as the motions judge, Judge Gajarsa wrote:
Pope asserts that he meets the standards for intervention, i.e., that he has a substantial interest in the appeal, that his interests will not be adequately represented by Abbott, and that intervention will not cause any undue delay or harm. . . . InNisus Corporation v. PermaChink Systems, Inc., 497 F.3d 1316, 1319-20, 1322-23 (Fed. Cir. 2007), we affirmed a district court's denial of a motion to intervene by an attorney who had prosecuted a patent and who sought to challenge factual findings concerning his conduct that were related to a finding of unenforceability. We expressly distinguished Penthouse Int'l because it involved an attorney who sought to intervene after a district court sanctioned the attorney and directed the attorney to pay a sanction. In this case, Pope has shown no similar type of sanction. Nisus, 497 F.3d at 1319 ("Critical comments, such as in an opinion of the court addressed to the issues in the underlying case, are not directed at and do not alter the legal rights of the nonparty.").
After a prior remand, the W.D. Washington district court held Taltech’s patent unenforceable due to inequitable conduct during prosecution and awarded over $6 million in attorney fees and costs to the defendant.
Section 285 of the patent statute allows a prevailing party to obtain reasonable attorney fees in “exceptional cases.” Typically, exceptional cases involve misconduct during either prosecution or litigation. Here, the lower court found three independent grounds for finding an exceptional case: (1) Taltech’s inequitable conduct in failing to disclose a prior-art raincoat seam to the PTO (labeled the “undisclosed raincoat seam” or URS); (2) Taltech’s inequitable conduct in misrepresenting the double top-stitch seam; and (3) abusive litigation tactics. On appeal, the Federal Circuit (Judges Mayer and Friedman) found no clear error with the lower court ruling.
The compelling element of the decision comes from Judge Gajarsa’s dissent:
This case exemplifies the ongoing pandemic of baseless inequitable conduct charges that pervade our patent system. For the reasons stated below, I respectfully dissent from the majority opinion.
Defendants’ inequitable conduct claim rests on a handmade drawing that the inventor, John Wong, sketched on a piece of paper during his deposition. Defendants’ counsel requested that Wong draw the prior art that “inspired” him to experiment in making pucker-free seams in dress shirts. In response, he sketched a prior art seam used to waterproof raincoats manufactured in the TAL factory. During litigation, Wong’s drawing was labeled the “Undisclosed Raincoat Seam” (“URS”). After a bench trial, the district court found that Wong committed fraud on the U.S. Patent and Trademark Office (“PTO”) because he failed to disclose the URS as the “inspiration” for his invention.
We vacated the inequitable conduct finding on the first appeal because there is no legal requirement that an inventor disclose the “inspiration” for his invention to the PTO. We remanded the case for a proper substantive inquiry into whether the URS was merely cumulative of the prior art on record with the PTO. Taltech Ltd. v. Esquel Enters., Inc., 279 F. App’x 974, 977 (Fed. Cir. May 22, 2008) (“If the undisclosed raincoat seam was merely cumulative to Robers, then no inequitable conduct lies in its nondisclosure.”).
On remand, the district court again found that Wong had committed inequitable conduct based on his failure to disclose the URS, but did so based on a flawed cumulativeness inquiry. The district court erroneously limited the teachings of both the URS and the Robers reference in order to render them non-cumulative prior art. Had the district court properly interpreted the teachings of both references, it would have found that the URS was merely cumulative of Robers.
The district court also improperly inferred intent to deceive from the materiality of the non-disclosed reference and several statements Wong made to the PTO. In both instances, the district court drew an inference of bad faith despite an equally plausible, and likely more reasonable, inference of good faith. Such an analysis has been rejected by this court and is legally erroneous. See Scanner Techs. Corp. v. ICOS Vision Sys. Corp., 528 F.3d 1365, 1376 (Fed. Cir. 2008) (“Whenever evidence proffered to show either materiality or intent is susceptible of multiple reasonable inferences, a district court clearly errs in overlooking one inference in favor of another equally reasonable inference.”). The district court’s numerous legal and factual errors are discussed in more detail below. . . .
The Federal Circuit recently granted Abbott’s request for an en banc rehearing of its Therasense decision. The rehearing will focus on the fundamental elements of inequitable conduct. Inequitable conduct is a non-statutory (i.e., judge-made) doctrine and the court is entertaining arguments on how it should re-structure the doctrine.
The following documents will be helpful to anyone planning to file an Amici brief in the case:
Therasense Inc. (now Abbott) v. Becton, Dickinson and Co. (Fed. Cir. 2010)
The Federal Circuit has granted Abbott’s request for an en banc rehearing on the issue of inequitable conduct.
The rehearing will focus on six questions of law:
Should the materiality-intent-balancing framework for inequitable conduct be modified or replaced?
If so, how? In particular, should the standard be tied directly to fraud or unclean hands? See Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806 (1945); Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944), overruled on other grounds by Standard Oil Co. v. United States, 429 U.S. 17 (1976); Keystone Driller Co. v. Gen. Excavator Co., 290 U.S. 240 (1933). If so, what is the appropriate standard for fraud or unclean hands?
What is the proper standard for materiality? What role should the United States Patent and Trademark Office’s rules play in defining materiality? Should a finding of materiality require that but for the alleged misconduct, one or more claims would not have issued?
Under what circumstances is it proper to infer intent from materiality? See Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988) (en banc).
Should the balancing inquiry (balancing materiality and intent) be abandoned?
Whether the standards for materiality and intent in other federal agency contexts or at common law shed light on the appropriate standards to be applied in the patent context.
Abbott’s en banc brief is due in 45 days from today. The response is due within 30 days of service of Abbot’s brief. Briefs of amici curiae will be entertained and may be filed without leave of court. Under Fed. R. App. Proc. 29, the amicus curiae brief must be filed within 7–days of the filing of the principle brief of the party being supported. If the amicus curiae does not support either party then the brief must be field within 7–days of the petitioner’s principal brief.
Comment: The correct answers to these questions depend upon the purposes of the inequitable conduct doctrine. Namely, is the doctrine intended to the behavior of patent prosecutors is is it intended to catch perpetrators. The major empirical issue is that the doctrine pushes patent prosecutors to over-compensate in ways that potentially harm the system and certainly raise the costs of patent protection.
Pressure Products Medical Supplies, Inc. v. Greatbatch Ltd. (Fed. Cir. 2010)
A five-judge Federal Circuit panel has narrowed the district court’s construction of the patentee’s means-plus-function claim limitations. This decision might be seen as the foil to the Federal Circuit’s recent broad interpretation of a means-plus-function element in Hearing Components v. Shure. Interestingly, Judges Lourie and Rader signed both opinions.
The Pressure Products patent covers a mechanism for inserting and removing catheters and pacemaker leads. The asserted claims include a “means for” facilitating the removal of both a hemostatic valve and a sheath from the disposed catheter. The parties agreed that this limitation should be interpreted as a means-plus-function limitation, but disagreed as to the proper scope of the limitation. Under 35 USC 112p6, a means-plus-function limitation is construed to “cover the corresponding structure, material, or acts described in the specification and equivalents thereof.” The district court judge held that the corresponding structure described in the specification used a “score line” to allow the hemostatic valve to separate. During trial (after the close of the plaintiffs case) the Judge updated its definition to include a “linear perforation; slit; slot; tab; line; severing; weakening; or tear that can be partial or complete.” The jury found infringement and awarded $1.1 million in past damages.
On appeal, the Federal Circuit reversed.
Claim Construction During Trial: The Federal Circuit first looked at the lower court’s procedure and held that the timing of claim construction is in the discretion of the lower court so long as the court works to avoid “surprise and prejudice” that could accompany a late change to the construction.
While recognizing the potential for surprise and prejudice in a late adjustment to the meaning of claim terms, this court also acknowledges that the trial court is in the best position to prevent gamesmanship and unfair advantage during trial. Moreover, this court understands that a trial judge may learn more about the technology during the trial that necessitates some clarification of claim terms before the jury deliberates.
Scope of the Corresponding Structure: The “score line” structure was discussed in the specification and was clearly a “corresponding structure” to the means-for element. At dispute, however, was the scope of the structure disclosed. Namely, the patent specification included a “laundry list” of prior art references and the district court used the disclosures from those references to expand the definition of a “score line” beyond the structure that was literally described in the specification. On appeal, the Federal Circuit held that approach was wrong and that “the trial court impermissibly expanded the corresponding structure of claim 1 to include structures not described in the specification.”
Trial courts cannot look to the prior art, identified by nothing more than its title and citation in a patent, to provide corresponding structure for a means-plus-function limitation. . . . Although many of the disclosed alternatives may well be determined to be structural equivalents permitted by section 112, paragraph 6—a question of fact for the jury—these alternative methods . . . cannot be treated as the disclosed structures for the removal means. Simply mentioning prior art references in a patent does not suffice as a specification description to give the patentee outright claim to all of the structures disclosed in those references.
“This court remands for further proceedings in light of the proper construction of the term ‘score lines.'”
Writing in Dissent, Judge Newman argued that the patentee should have been allowed to rely upon the disclosures discussed in the specification in order to identify the scope of the disclosed corresponding structure.
Inequitable Conduct: This case also includes an important procedural decision on inequitable conduct – affirming the district court’s refusal to allow the defendant to amend its answer to include an inequitable conduct defense.
This is Part V of my series on the relevance of the invention date in patent prosecution. You may download my entire paper here. This part discusses results of my survey on patent practitioner strategies in choosing whether to swear behind prior art.
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As part of my 2009 survey, I asked a final question that focused on the relative strategic merits of (1) asserting first-inventor rights to negate putative prior art references or (2) distinguishing the scope of the invention from the disclosures found in the references. Responders were offered a hypothetical situation where either strategy might succeed. The question read as follows: Assume that you receive non-final prior art rejection. You believe that you could distinguish the reference without amending any of your claims. However, you also have sufficient evidence to swear behind the reference based on an earlier invention date. Which approach do you take?
Responders were asked to choose one of three options: “Swear behind the reference,” “Distinguish your claims from the prior art,” and “Swear behind the reference and distinguish the claims.” In addition, responders were asked to “Explain your answer.”
The responses show a large preference for distinguishing claims from the prior art rather than asserting first-inventor rights by filing a Rule 131 affidavit. While 51% of responders would have distinguished the claims, only 31% would have asserted first-inventor rights, and 18% would have attempted to both distinguish the claim and assert first-inventor rights. The responders in the survey who would have distinguished the claims showed more support for a shift to first-to-file and indicated that they had comparably less experience in handling cases associated with Rule 131 affidavits. However, those differences were not statistically significant.
Many responders offered an expositive statement of their strategy selection. These results create a richer data set susceptible to qualitative analysis. Analysis and categorization according to a set of themes that emerged from the statements allowed for a thematic tallying in Table 12.
Responders who preferred to assert first-inventor rights primarily mentioned the concern that distinguishing the prior art creates potential estoppel issues that would limit claim scope. The following examples embody typical responses:
Swearing behind the reference limits the amount of prosecution history estoppel in the case and avoids making statements on the record that may later be used to limit the scope of the claims.
Why go on the record against your claims when you can make the prior art disappear?
It is crazy to make any substantive argument to distinguish over a reference that is not in fact prior art. Why limit the interpretation of your claims?
Responders who preferred to distinguish the claimed invention from the prior art rather than assert first-inventor rights most often mentioned the concern that Rule 131 declarations create their own litigation problems by raising questions of invalidity and inequitable conduct. The following examples embody typical responses:
[Because] swearing back does not provide absolute victory (as a 102g date may later be found), I would always attempt to distinguish first, all other factors being equal.
I would prefer to avoid the risk of an unintentional error in the declaration. If discovered, it would raise inequitable conduct (perhaps groundless, but would still have to be defended) and raise a question of validity.
131 declaration should be a last resort. [T]he resulting patent is weaker (creates [inequitable conduct] issues, defendants can prove an earlier date, etc) plus it looks bad—as if you’re admitting your claims are obvious over the cited reference.
Many responders shared the concern that swearing behind a cited reference while failing to distinguish the claims on their merits “looks bad” and amounts to a tacit admission that the reference is good but for its effective date. Indeed, one self-described former examiner suggested that swearing behind a reference without addressing the scientific merits of the reference creates a specific challenge for a patent examiner—to find the same prior art, but with an earlier effective date:
Swear[ing] behind the reference may satisfy some, but most [examiners] will try to thwart the swear behind by locating another, similar reference. Practically speaking, to get the case allowed, amend the claims minimally, distinguish from the prior art, and lastly swear behind it, in that order. This provides the examiner enough cover to allow the case.
Some of the responders (12.2%) offered the reminder that patent prosecution is an ongoing process—a series of events or a story unfolding.
Many suggested that if one argument fails, an applicant should move to the next argument. However, many responders, who indicated that they would both assert first-inventor rights and distinguish the invention, suggested that the better approach is to include all arguments within a single response. The following examples embody typical responses:
If you don’t swear behind at the non-final stage the office will go final and not accept the 131 dec[laration] at that stage without the filing of a[ Request for Continued Examination]. A similar situation arises if you rely on the dec[laration] and don’t argue to distinguish. You’ll have to file an RCE to get the arguments considered.
As an examiner, I can tell you this is the best way to get around the reference. More than likely one or the other submitted [sic] on its own will likely have some deficiency. Therefore, doing both will be more persuasive.
Taking the “belt-and-suspenders” approach of both filing a 131 and distinguishing the claims saves time and money for my client. Just because the Examiner has cited a reference with a certain date does not mean that s/he cannot make another rejection based on other art that has an earlier date for the base reference. I prefer to be safe and plan for both eventualities, as long as the claim amendments do not drastically change the claim scope.
Responders who indicated that they would both assert first-inventor rights and distinguish the invention most often mentioned that their approach increases the odds of obtaining patent protection.
The cost of patent prosecution certainly drives some applicant behavior. There was some disagreement, however, on which choice was the least-cost mechanism. On one hand, 21.1% of responders who preferred to distinguish the invention suggested that their choice was at least partially driven by the high cost of preparing and filing a successful Rule 131 declaration:
It generally costs much less to distinguish prior art than to do everything necessary to file a 131 Declaration.
Declarations are more work. Specifically, gathering facts related to conception + diligence or actual RTP is time consuming.
As a practical matter, it’s often difficult to track down corporate-type inventors two or three years after the app is filed, so as to be able to get them to sign a Rule 131 dec[laration].
A handful of responders who preferred to assert first-inventor rights indicated that was the cheaper approach:
It is hard to justify to the client doing all the extra work of distinguishing the claims.
Finally, 13.0% of responders who selected the dual strategy suggested that—in the long run—their approach was more cost-effective.
This is Part III of my series on the relevance of the invention date in patent prosecution. You may download my entire paper here. This part considers the role of provisional patent applications as an incomplete but functional substitute for invention-date rights.
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With some caveats, I argue that provisional patent applications can serve as functional substitutes for reliance on the U.S. filing grace period. Provisional patent applications have become popular since being made available in 1995. The USPTO reports that applicants filed 143,030 provisional patent applications in fiscal year (“FY”) 2008, compared with 466,147 non-provisional utility applications that year. U.S. applicants file a great majority of these provisional applications Consequently, the provisional filings correspond to more than half of the annual total of utility applications filed by U.S. residents.
A provisional application is essentially a low-cost placeholder that allows an applicant to establish a priority date by filing a description of the invention along with paying an administrative fee to the USPTO. The applicant may later file a non-provisional application claiming the benefit of the provisional application’s filing date. The provisional patent application has a twelve-month non-extendable pendency. During that time-period, the application is kept secret and is not examined. Thus, to rely upon the provisional priority date, the applicant must submit a non-provisional application within one year of the provisional filing date. Professor Seymore notes several additional strategic advantages of filing provisional patent applications: “extending the patent term to twenty-one years, postponing the examination period, trolling for prior art, and avoiding an allegation of inequitable conduct.”
To explore the relevance of provisional patent applications as a tool for claiming priority, I created a dataset of 5000+ provisional patent applications filed between January 1, 2001 and October 1, 2007. Of those, over half (52%) were still secrete as not yet identified in the priority claim of any publicly available non-provisional application. Although some of these will eventually become public as associated with a non-provisional filing, in the end, close to 40% or more of the provisional application filings will never be linked to an issued patent or public non-provisional application. Collectively, these figures indicate that a large number of provisional applications are themselves left floundering to be abandoned twelve months after filing. The large number of abandoned provisional applications suggests to me that provisional patent applications are likely being used as early place-holders to cheaply secure a priority date, rather than as a means of extending the patent term or postponing examination. In a separate study looking at the 620,000+ issued patents for which applications were filed between 2000 and 2005, I found that seventeen (17) percent of the patents in the data-set claim priority to at least one provisional application. On average, the patents claiming priority listed 1.4 provisional patent applications. In a separate study, I found that on average abandoned non-provisional applications tended to claim priority to 2.0 provisional patent applications. This combining of multiple provisional applications to support a single patent supports this theory that provisional applications as a substitute for filing date evidence. Notably, each provisional can serve as evidence of an incremental advance in place of a corroborated laboratory notebook. Anecdotal reports suggest that this practice has become especially prevalent among universities developing early stage innovations. However, the value of incremental provisional application filings is limited by the hard twelve-month deadline for filing a non-provisional application.
For an inventor who has conceived a new invention, the legal benefits of filing a provisional application, rather than relying on the invention date, are compelling. If the filing deadlines are met, a provisional patent application will serve as conclusive evidence of priority—without any need for any affidavits or declarations—so long as the provisional application discloses the invention claimed in the non-provisional application “in the manner provided by the first paragraph of section 112.” In other words, the specification of the provisional application must “contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable” an ordinarily skilled artisan to practice the invention claimed in the non-provisional application.
Unlike an applicant seeking to assert a prior invention date, an applicant claiming priority to a provisional application need not provide corroborated evidence—or indeed any evidence—of actual reduction to practice, conception date, or reasonable diligence in working toward reduction to practice. Rather, the USPTO and courts treat the filing of a provisional patent application as a constructive reduction to practice, thus allowing the applicant to rely on the simple evidence of the paper filing.
An oft-stated disadvantage of provisional application filings is that they may create a false sense of security among patent applicants. Certainly, a hastily-filed provisional patent application may fail to properly describe the invention to be claimed in a later-filed non-provisional application. However, the validity of this criticism does not suggest that applicants should merely rely upon the hope that they will possess sufficient evidence to antedate references based on a prior invention date. Rather, risk-averse applicants should quickly file a well supported application either in provisional or nonprovisional form.
Ariad Pharmaceuticals, Inc. v. Eli Lilly and Co. (Fed. Cir. 2010) (En Banc Decision).
In a 9-2 decision, an en banc Federal Circuit has confirmed that 35 USC § 112 ¶1 includes separate written description and enablement requirements. “If Congress had intended enablement to be the sole description requirement of § 112, first paragraph, the statute would have been written differently.” The court also clearly confirmed the prospect that originally filed claims can violate the written description requirement:
Although many original claims will satisfy the written description requirement, certain claims may not. For example, a generic claim may define the boundaries of a vast genus of chemical compounds, and yet the question may still remain whether the specification, including original claim language, demonstrates that the applicant has invented species sufficient to support a claim to a genus. The problem is especially acute with genus claims that use functional language to define the boundaries of a claimed genus. In such a case, the functional claim may simply claim a desired result, and may do so without describing species that achieve that result. But the specification must demonstrate that the applicant has made a generic invention that achieves the claimed result and do so by showing that the applicant has invented species sufficient to support a claim to the functionally-defined genus.
Possession vs Disclosure: The court did step away from “possession” as the hallmark of the written description requirement. Rather, the court wrote that “the hallmark of written description is disclosure. . . . [T]he test requires an objective inquiry into the four corners of the specification from the perspective of a person of ordinary skill in the art. Based on that inquiry, the specification must describe an invention understandable to that skilled artisan and show that the inventor actually invented the invention claimed.”
General Principles: The court presented “a few broad principles that hold true across all cases”: “the written description requirement does not demand either examples or an actual reduction to practice”; however “actual ‘possession’ or reduction to practice outside of the specification is not enough; and a “description that merely renders the invention obvious does not satisfy the requirement.”
Basic Research – Tough Luck: The court recognized that the written description requirement makes it more difficult to patent “basic research” that has not yet been fully reduced to a practical implementation. The court’s reaction to that problem was tough luck. “That is no failure of the law’s interpretation, but its intention. Patents are not awarded for academic theories, no matter how groundbreaking or necessary to the later patentable inventions of others.”
That research hypotheses do not qualify for patent protection possibly results in some loss of incentive, although Ariad presents no evidence of any discernable impact on the pace of innovation or the number of patents obtained by universities. But claims to research plans also impose costs on downstream research, discouraging later invention. The goal is to get the right balance, and the written description doctrine does so by giving the incentive to actual invention and not “attempt[s] to preempt the future before it has arrived.” Fiers, 984 F.2d at 1171.
Holding: For the foregoing reasons, we hold that the asserted claims of the ‘516 patent are invalid for lack of written description, and we do not address the other validity issues that were before the panel. We also reinstate Part II of the panel decision reported at 560 F.3d 1366 (Fed. Cir. 2009), affirming the district court’s finding of no inequitable conduct. The majority opinion was written by Judge LOURIE and joined by Chief Judge MICHEL and Circuit Judges NEWMAN, MAYER, BRYSON, GAJARSA, DYK, PROST, and MOORE. Judges NEWMAN and GAJARSA filed concurring opinions.
Judges RADER and LINN each filed opinions in dissent. [I will write more on this later]
Guest post by Christian Mammen. Mammen is a Resident Scholar at UC Hastings. He also maintains an IP litigation and strategy practice. (He was also my boss when I was a summer associate at the Heller Ehrman law firm.)
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On March 8, 2010, I submitted an amicus brief (click here for a copy) on behalf of a group of nine law professors (Professors Cotter, Dolak, Gallagher, Ghosh, Hricik, Risch, Sarnoff, Takenaka and myself) in support of en banc review of inequitable conduct in Therasense, Inc. et al. v. Becton, Dickinson & Co. et al. The panel decision in Therasense affirmed the District Court’s finding of inequitable conduct. The inequitable conduct finding related to a failure to disclose to the USPTO statements that had been made to the European Patent Office. The majority decision drew a lengthy dissent from Judge Linn.
The law professors’ amicus brief argues that en banc review is appropriate because of the ongoing inconsistency in Federal Circuit precedents concerning inequitable conduct. In particular, the brief focuses on two specific issues: (1) the legal standard for intent and (2) the proper test of materiality.
Legal Standard for Intent: First, the applicable legal standard for the intent element continues to be uncertain. Although some expected that the 2008 Star Scientific decision (Star Scientific , Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357 (Fed. Cir. 2008)) would prompt a widespread adoption of its single-most-reasonable-inference test for proving intent via circumstantial evidence, that has not been the case. In Therasense, the majority deferred to the District Court’s five findings on the intent issue, without addressing their legal sufficiency. Two of the five findings pertained solely to the materiality of the nondisclosed information; however, Star Scientific holds that “materiality does not presume intent.” One finding of the five was merely that the individuals knew the information and did not disclose it; again, this is not the standard for intent under Star Scientific. And the last two findings were that the individuals’ testimony should be rejected as not credible; these findings failed to address the single-most-reasonable-inference test set forth in Star Scientific.
In addition, the majority decision (and the underlying District Court opinion) implicate the “should have known” test for intent that has often appeared in the Federal Circuit’s precedents. The law professors’ amicus brief argued that there should be an en banc rehearing because there is a conflict between the Kingsdown-Star Scientific line of cases, on the one hand, which disfavor the “gross negligence” test—and by implication the associated “should have known” test—and the Brasseler-Ferring line of cases, on the other hand, which endorse the “should have known” test.
Objective Materiality: Second, since the 2006 Digital Control ruling (Digital Control v. Charles Mach. Works, 437 F.3d 1309 (Fed. Cir. 2006)), it had appeared that the Federal Circuit would steadfastly apply the older “reasonable examiner” test for materiality, rather than the newer and more objective test adopted by the PTO in the 1992 revision to 37 CFR 1.56 (“Rule 56”). However, in Therasense, the majority applied the 1992 version of Rule 56 as the test for materiality. This arguably creates a split in precedent that provides a basis for en banc reconsideration of the proper test for materiality.
Will this be the case in which the Federal Circuit takes inequitable conduct en banc? It is difficult to predict. Over the past five years, the Federal Circuit has declined en banc petitions in a number of prominent and controversial inequitable conduct cases. It can, however, be confidently asserted that, in the twenty-two years since the Federal Circuit convened en banc in Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988), the Federal Circuit has accumulated an impressive tally of inconsistent and contradictory panel decisions that cry out for en banc review.
Alloc, Inc. v. Pergo, Inc. (Fed. Cir. 2010)(nonprecedential)
Alloc and Pergo both manufacture and sell laminate flooring. Pergo’s patents cover a mechanical joint that allows the “boards” to be joined together without the usual glue or nails. After being threatened, Alloc filed a declaratory judgment action – asking the Wisconsin-based district court to render the patents invalid, unenforceable, and not-infringed. The jury complied and held the patents invalid and not infringed. In a subsequent bench trial, the district court did not find inequitable conduct in the prosecution.
In error, the district court had submitted questions of claim construction to the jury. Claim construction has long been considered a matter of law to be decided only by a judge. On appeal, the Federal Circuit ruled that the jury-submission mistake to be a harmless error. However, the court’s six-page non-precedential opinion creates confusion in my mind. I would have preferred this decision to have been issued as an affirmance without opinion.
On appeal, the appellate court first affirmed — finding the prior art “more than sufficient to support the jury’s finding of obviousness.” Then, when addressing infringement, the appellate court recognized the claim construction error but identified that error as harmless because the claims were also obvious. My outstanding concern is the appellate court’s implicit holding that errors in claim construction do not affect the obviousness determination. That holding is not correct or consistent with the current notion that the obviousness question should focus on the invention as claimed.
It may be relevant to note that the appellate opinion was written by Judge Virginia Kendall sitting by designation from the Northern District of Illinois. Judges Lourie and Dyk joined the opinion. It is probably best to identify this decision as non-precedential and then walk away.
Chicago Area Creative Achievement Award: The Intellectual Property Law Association of Chicago (IPLAC) invites nominations for its 2010 Creative Achievement Award (formerly called the Inventor of the Year Award). In addition to recognizing inventors, the award is intended to recognize significant achievements in the creation of a trademark or service mark and related branding, marketing, and advertising activities, as well as achievements in literary, visual, musical, dramatic, and other arts protected by copyrights. The annual award may fall in any one of these categories for inventive/creative activity conducted in the Chicago metropolitan area. Details on criteria for the award and a nomination form are available on the IPLAC website. Nominations are due by Friday, March 12, 2010. IPLAC will announce the award winner at its Annual Meeting on May 4, 2010. Please email mrichards@brinkshofer.com or call Marc Richards at 312.321.4729, chair of IPLAC's Creative Achievement Award committee, with any questions.
Most popular Patently-O posts during the past month:
Chicago Area Creative Achievement Award: The Intellectual Property Law Association of Chicago (IPLAC) invites nominations for its 2010 Creative Achievement Award (formerly called the Inventor of the Year Award). In addition to recognizing inventors, the award is intended to recognize significant achievements in the creation of a trademark or service mark and related branding, marketing, and advertising activities, as well as achievements in literary, visual, musical, dramatic, and other arts protected by copyrights. The annual award may fall in any one of these categories for inventive/creative activity conducted in the Chicago metropolitan area. Details on criteria for the award and a nomination form are available on the IPLAC website. Nominations are due by Friday, March 12, 2010. IPLAC will announce the award winner at its Annual Meeting on May 4, 2010. Please email mrichards@brinkshofer.com or call Marc Richards at 312.321.4729, chair of IPLAC's Creative Achievement Award committee, with any questions.
Most popular Patently-O posts during the past month:
Outside the Box Innovations, LLC v. Travel Caddy, Inc., (Fed. Cir. 2010)(order)
In a non-precedential order, the Federal Circuit has disqualified the law firm of King & Spalding from representing Travel Caddy on appeal. At the district court level, Outside-the-Box was successful in proving that Travel Caddy’s patent should be held unenforceable due to inequitable conduct. In post-verdict motions, a King & Spalding partner (Tony Askew) filed an expert witness declaration on behalf of a Outside-the-Box indicating that the requested attorney-fees were reasonable. For the appeal, however, three other King & Spalding attorneys began representing Travel Caddy on the other side.
Writing for a unanimous appellate panel, Judge Dyk indicated that King & Spalding’s actions are improper regardless of whether Askew’s expert work created an attorney-client relationship with Outside-the-Box. In particular, the court noted the likelihood that King & Spalding’s new client Travel Caddy will need to challenge the sufficiency of the expert opinion that it provided earlier.
The question whether King & Spalding should challenge the expert opinion of one of King & Spalding’s partners in our view would materially and adversely affect the firm’s representation of Travel Caddy on appeal. We determine that Rule 1.7(a) is applicable. There has been no showing that Travel Caddy waived the conflict pursuant to GRPC 1.7(b), even assuming that the conflict is one that can be waived. For example, there is no written waiver included in the submissions; there has been no showing that Travel Caddy “received in writing reasonable and adequate information about the material risks of the representation”; or that Travel Caddy was “given the opportunity to consult with independent counsel.”
The case was litigated in Georgia and the Federal Circuit based its decision upon the Georgia Rules of Attorney Ethics. It did not seem to matter that the King & Spalding appellate counsel were all Texas attorneys.
Therasense, Inc. (Abbott) v. Becton, Dickinson and Co. (Fed. Cir. 2010) (Case No. 2009-1511)
This detailed 67–page opinion includes several important issues. This post focuses on inequtiable conduct. The Federal Circuit recently released a parallel decision involving the same parties (but different patent) here.
After a bench trial, Northern District of California Judge Alsup held Abbott’s patent unenforceable due to inequitable conduct during prosecution. (Patent No. 5,820,551). On appeal, the Federal Circuit has affirmed that decision — holding that the prosecuting attorneys had violated their duty of disclosure by failing to dislcose statements made by Abbott to the European Patent Office during a proceeding involving the European counterpart of another patent family (the ‘382 patent’ family) also owned by Abbott. Although the court affirmed the finding of inequitable conduct, it offered the fig leaf that such a finding should be “rare.” (Note: Therasense originally filed both patent applications and also made the statements to the EPO. That company was subsequently purchased by Abbott.)
Patent applicants (and their attorneys/agents) are required to disclose to the US Patent Office any information that a reasonable examiner would likely consider important in deciding whether to issue a patent. Failing to submit the required information can lead to a finding of inequitable conduct if the information was both (1) material to patentability and (2) witheld because of an intent to deceive the Patent Office. Inequitable conduct usually results in a patent being rendered totally unenforceable. “The penalty for inequitable conduct is severe, as an entire patent is rendered unenforceable.”
During prosecution, the examiner rejected the application based on Abbott’s own ‘382 patent. In response, Abbott’s Director of Research submitted an affidavit attesting that the one skilled in the art would not consider the ‘382 patent to teach the invention as claimed in the ‘551 patent. [The claimed invention was a glucose-memter electrode strip without an intervening membrane layer — with the absense of the membrane being the distinguishing feature.] Based on that representation, the Examiner allowed the patent to issue. Meanwhile, in Europe, Abbott made the statement that the stated distinction was only a “safety measure” and was “preferred” but not necessary. [“It is submitted that this disclosure is unequivocally clear. The protective membrane is optional, however, it is preferred when used on live blood.”]
Based on these facts, the Federal Circuit found the statements material:
To deprive an examiner of the EPO statements—statements directly contrary to Abbott’s representations to the PTO—on the grounds that they were not material would be to eviscerate the duty of disclosure. Moreover, if this could be regarded as a close case, which it is not, we have repeatedly emphasized that the duty of disclosure requires that the material in question be submitted to the examiner rather than withheld by the applicant.
Lawyer Argument Regarding Prior Art: In several cases, the Federal Circuit has held that contradictory representations made during the prosecution of other patent applications should not be considered material to patentability if made in the form of lawyer-argument. See Innogenetics. Here, the appellate panel distinguished those cases because they all involved US applications rather than statements made to different institutions.
However, all of the cases Abbott cites involve patentees who simply made representations to the PTO about prior art in order to secure the allowance of their patents. None of these cases involved a situation in which contradictory arguments made in another forum were withheld from the PTO. They do not speak to the applicant’s obligation to advise the PTO of contrary representations made in another forum. Before the EPO, Abbott made statements that contradicted the representations Abbott made to the PTO regarding the ’382 patent. An applicant’s earlier statements about prior art, especially one’s own prior art, are material to the PTO when those statements directly contradict the applicant’s position regarding that prior art in the PTO. See 37 C.F.R. § 1.56(b)(2). In any event, the representations to the PTO were not merely lawyer argument; they were factual assertions as to the views of those skilled in the art, provided in affidavit form.
Intent: The Federal Circuit agreed that the lower court’s finding of subjective intent was “amply supported.”
Holding:
Because the district court’s findings that the EPO submissions were highly material to the prosecution of the ’551 patent and that Pope and Dr. Sanghera intended to deceive the PTO by withholding those submissions were not clearly erroneous, the district court did not abuse its discretion in holding the ’551 patent unenforceable due to inequitable conduct.
Judge Linn filed a dissenting opinion: Judge Linn argues (1) that there is an explanation for the statements that does not lead to them being directly contradictory and (2) that the individuals involved “produced a good faith explanation as to why they withheld the EPO submissions.” Such a good faith explanation should defeat charges of inequitable conduct if it is plausible.
The question, thus, is not whether it is plausible that the information is immaterial—a question asked under the objective materiality prong—but rather, whether it is plausible that the individuals subjectively believed that the reference was immaterial at the time they withheld it—a question presented under the subjective intent prong.
Taltech v. Esquel Enterprises (
The compelling element of the decision comes from Judge Gajarsa’s dissent: 
Outside the Box Innovations, LLC v. Travel Caddy, Inc., (Fed. Cir. 2010)(