In my view, Obviousness is the most fundamental of patent law doctrines, and certainly much of the work of patent attorneys is to convince patent examiners that the claims are not obvious.
Michael Kasdan and Joseph Casino discuss recent shifts in reasonable royalty jurisprudence with a particular focus on the recent cases of Cornell, Lucent, and Lansa. Together, these decisions "indicate an emerging trend to more carefully scrutinize the evidentiary and economic basis of reasonable royalty-based patent damages awards in the setting of the appropriate royalty base, the application of the entire market value rule, and the calculation of the appropriate royalty rate." [Download Kasdan.Casino.Damages]
In Boehringer Ingelheim Int’l v. Barr Labs and Mylan Pharma (Fed. Cir. 2010), the Federal Circuit made an interesting statement regarding the judicially created doctrine of obviousness-type double patenting — that the doctrine has been historically important.
The doctrine of obviousness-type double patenting is an important check on improper extension of patent rights through the use of divisional and continuation applications, at least for patents issued from applications filed prior to the amendment of 35 U.S.C. § 154 to create twenty-year terms running from the date of the earliest related application.
As suggested, the advent of a twenty-year term based on application priority date means that the justification for a double patenting rejection is largely becoming a moot-point. And, I suspect that the court will eventually change the law by holding that a terminal disclaimer is not necessary if the two patent terms are already identical. A family of patents filed in the past decade will typically all have roughly the same ending-dates except for differences created by patent term extensions and adjustments (PTE & PTA). In my view, applicants should be allowed to take advantage of those extensions apart from any terminal disclaimer. The other hang-up with terminal disclaimers is that they require the two applications be commonly owned.
The BPAI rejected Chapman's claimed antibody fragment-polymer invention as obvious and Chapman (UCB Pharma) appealed. The 103/102(e) rejection was based on the teaching of a Genentech patent that had been filed two years before Chapman's application.
The appellate decision provides a concise overview of the standard of review of BPAI decisions on obviousness. However, it leaves opon questions regarding the "legal-conclusion" of obviousness.
The Patent and Trademark Office ("PTO") is governed by the Administrative Procedure Act ("APA"), and PTO decisions are reviewed under the APA standard. Dickinson v. Zurko, 527 U.S. 150, 152 (1999). Thus, we review Board's legal conclusions without deference, and review its findings of fact to determine if they are supported by substantial evidence. . . .
The judicial review provision of the APA includes a harmless error rule. We have noted that "the harmless error rule applies to appeals from the Board just as it does in cases originating from district courts." . . . [T]he burden of showing that the error is harmful normally falls upon the party attacking the agency's determination. . . .
The government argues that these errors are harmless, but we conclude that these errors are harmful because they increase the likelihood that Chapman was erroneously denied a patent on grounds of obviousness. If the Board based its decision on a misunderstanding of [the prior art], its conclusions regarding obviousness are called into question. . . . Because we cannot say with confidence that the Board would have reached the same conclusion in the absence of these errors, we are persuaded they are indeed harmful.
The interpretation of the harmless error rule did not receive significant attention pre-KSR because the rule-oriented approach of the TSM test left meant that most BPAI errors were harmful. The post-KSR law of obviousness is based more on a contextual whole-picture analysis. As such, the line between harmless error and harmful error is blurred. This case resolves some issues by indicating that a BPAI error is harmful if (1) the error "increase[d] the likelihood" that the BPAI erred in its obviousness conclusion and (2) the court cannot confidently announce that the BPAI would have reached the same conclusion absent the error.
Obviousness as a Matter of Law: Although the ultimate conclusion of obviousness is a matter of law, the appellate panel did not take-on the role of analyzing the law. Rather, after identifying the correct factual interpretation of the prior art, the Federal Circuit remanded to the BPAI with instructions to "only revisit its conclusion of obviousness."
Applicant Incentives: Although I have been dilatory in providing my materials for the talk (sorry!), my general themes focus on the role of patent applicant and patentee incentives in patent office reform. The incentives conversation is comfortable for intellectual property scholars and practitioners alike. The explicit Constitutional justification for patent and copyright regimes is that an offer of exclusive rights provides an incentive to "promote the progress" in the respective fields. This big-picture incentive award has already been created by the drafters of the Constitution and detailed by Congress and the Courts. Here, l take a narrow approach and consider how applicant incentives should be utilized to achieve the goals of PTO reform. Specific questions include:
To what extent should PTO reforms focus on modifying patent applicant behavior?
Should reforms focused on applicant-behavior lean on rules and requirements or rather employ a softer incentive approach? These "softer incentives" could be in the form of Sunsteinian Nudges or more onerous or strongly beneficial incentives.
Fees: To what extent are patent applicants sensitive to PTO fees? To what extent can (or should) the PTO use its fee structure to modify applicant behavior?
A Dynamic Feedback System: My mental starting point for the topic is Newton's third law of motion: For every action there is an equal and opposite reaction. In the simple case of billiard balls colliding on a table, those reactions are (relatively) easy to predict. In the complex patent system reactions to reforms are less predictable – especially for any particular case. It is also important to recognize that the system is dynamic. Changes in PTO operations lead to changes in patent applicant behavior. These PTO changes may take the form of rules, fees, appeal processes, personnel availability, training, etc.
Provisional patent applications have become increasingly popular since their introduction in 1995. Offering the right to file a provisional application was the first arguably most important step in shifting applicant behavior. However, the low fee, lack of formality, and ease of process in claiming priority all contribute to popularity of the form. While the government has no direct control over applicant behavior, the popularity of provisional applications was likely ensured by these positive incentives. There are many examples of applicant behavior altered by PTO practices. Increasing application fees decreases application filings; offering "free" claims increases claim filings; longer applicant deadlines result in longer waits for applicant responses; etc.
There are two observations that I want to highlight from this discussion thus far – both of which were likely already obvious to most patent folks. (1) The patent office rules & procedures impact patent applicant behavior and therefore have the potential for serving as policy levers. (2) The exerted policy lever need not create a hard-rule to be effective. Rather, non-rights-based policy choices involving fees, procedures, and default rules can also effectively shift applicant behavior. The hard-rule / soft-rule distinction is not always clear. In some situations strong incentives can have the same coercive impact as an absolute rule. (The PTO's recent attempt to limit claim and continuation filings has been described as such.)
Cause of the Problems?: It is typically difficult to pin-down the root cause of problems in dynamic system with multiple independent actors. Take the current PTO backlog problem as an example. One popular explanation accuses the PTO of being too slow and issuing unnecessary rejections. On the flip-side, applicants can be blamed for filing so many applications that are difficult to examine. Both accusations have merit, but neither tells the whole story. (There was no backlog until the first application was filed…) Even while sidestepping the blame-game, this discussion leads to two additional observations. (3) Applicant behavior impacts PTO problems — thus creating the possibility that (4) shifting applicant behavior can help to resolve those problems. In other words, many goals of PTO reform could potentially be met by pushing on applicant incentives.
USPTO Fee Structure: The USPTO has always charged some fee-for-service as a way to avoid directly spending taxpayer monies on the examination and issuance of patents. In 1871, the application fee was $15. By 1952, the fee had doubled to $30 with a surcharge of $1 per additional claim over 20. By 1982, the fees had been raised by a factor of ten to $300 for filing and $10 for excess claims. Today, the filing fee (including the required search and examination fee) is $1090 and additional claims cost $52. Since 1952, the increase averages to a not-too-unreasonable annual rate of 6.4%.
Throughout this time, the USPTO has also charged an issue fee that has been roughly equivalent to the filing fee, although the current issue fee is $1510. This historic distribution is not intuitive. The filing and issue fees must all be paid before any patent rights can be asserted, and the actual PTO budget is overwhelmingly directed toward examination costs (primarily examiner salaries). Only a small part of the budget is spent on the ministerial process of issuing the patent. The filing fee / issue fee distribution is a policy lever. A relatively low filing fee encourages applicants to "take a chance" on patenting inventions that are only marginally likely to be financially successful. The prosecution delay prior to payment of the issue fee gives applicant the opportunity to first determine whether a patent is worthwhile. On the other side of the argument, a relatively high filing fee could limit the absolute number of patent applications filed and also operate to encourage patent applicants to file "higher quality" applications. The PTO also charges maintenance fees (previous known as renewal fees). Perhaps more than any other fees, the maintenance fees are "pure profit" because the PTO does not work for that income.
The analysis of fees leads to the following observation: (5) Wittingly or not, the setting of USPTO fees involves policy choices that shift applicant incentives. Still, the agency (with the help of Congress) could attempt to design its fees in a way that most directly cover costs. However, that approach would waste the potential opportunity to use fees to improve the system inputs. At this point it would be a ridiculous approach, but it would not be inconceivable for the PTO to shift its fees for individual applications according to input quality measures with designated "high quality" applications paying a lower fee.
Additional Issues To be Discussed:
USPTO Deadlines, Late Fees, and Deferring Examination
USPTO Authority: To what extent should the PTO be given authority to use fees and other mechanismsto intentionally shift applicant behavior.
The Federal Circuit has ordered an en banc rehearing of its August 14 decision. The appeal focuses on evidentiary and procedural limits of an appeal of a BPAI decisions to a District Court under 35 USC 145. The Court framed the en banc issues as follows:
(a) Are there any limitations on the admissibility of evidence in section 145 proceedings? In particular—
(i) Does the Administrative Procedure Act require review on the agency record in proceedings pursuant to section 145? (ii) Does section 145 provide for a de novo proceeding in the district court? (iii) If section 145 does not provide for a de novo proceeding in the district court, what limitations exist on the presentation of new evidence before the district court?
(b) Did the district court properly exclude the Hyatt declaration?
Background: Hyatt's district court action was originally filed in 2003 as Hyatt v. Rogan after the BPAI sustained written description and enablement rejections for seventy-nine of Hyatt's claims. The examiner had issued 45 separate rejections of Hyatt's claims based on the doctrines of inadequate "written description, lack of enablement, double patenting, anticipation, and obviousness." Complicating the case is the fact that the application's claimed priority date is 1975.
The issues in this appeal case arose when Hyatt filed a civil action in DC District Court to challenge the BPAI decision. In the civil action, Hyatt submitted a new declaration offering additional evidence of enablement and written description. However, the district court excluded that inventor-declaration from evidence based on Hyatt's "negligence" in failing to previously submit the information to the PTO.
Writing for the majority in the original panel opinion, Judge Michel affirmed the exclusion of evidence – holding that the district court may properly exclude evidence that Hyatt should have produced to the PTO. Judge Moore penned a compelling dissent in support of the patent applicant's right to a full civil action including the right to submit additional evidence when challenging a PTO decision.
Briefing: Hyatt's en banc brief will be due around March 31 and the USPTO's response due 28-days later. Briefs of amici curiae may be filed without leave of the court, but must otherwise comply with FRAP 29 and Fed Cir R 29.
* * * * *
35 U.S.C. 145 Civil action to obtain patent.
An applicant dissatisfied with the decision of the Board of Patent Appeals and Interferences in an appeal under section 134(a) of this title may, unless appeal has been taken to the United States Court of Appeals for the Federal Circuit, have remedy by civil action against the Director in the United States District Court for the District of Columbia if commenced within such time after such decision, not less than sixty days, as the Director appoints. The court may adjudge that such applicant is entitled to receive a patent for his invention, as specified in any of his claims involved in the decision of the Board of Patent Appeals and Interferences, as the facts in the case may appear, and such adjudication shall authorize the Director to issue such patent on compliance with the requirements of law. All the expenses of the proceedings shall be paid by the applicant.
Pfizer’s broadest patent covering its bestselling drug Viagra is in the midst of an ex parte reexamination. See Patent 6,469,012. The reexamination was separately requested by Lilly & ICOS (makers of Cialis) and Bayer (maker of Levitra). In addition, the PTO director (then James Rogan) independently ordered reexamination. These separate actions were all merged into one proceeding before the PTO. In parallel, Pfizer has sued Lilly & ICOS – asserting that Cialis infringes the Viagra patent. See Pfizer Inc., et al. v. Lilly ICOS LLC et al, Civil Action No. 02-1561 (D. Del. Oct. 22, 2002). The litigation has been stayed pending reexamination since 2003.
The broad claim (that is said to cover both Levitra and Cialis) is claim 24:
24. A method of treating erectile dysfunction in a male human, comprising orally administering to a male human in need of such treatment an effective amount of a selective cGMP PDEv inhibitor, or a pharmaceutically acceptable salt thereof, of a pharmaceutical composition containing either entity.
During the reexamination, the examiner rejected Claim 24 as anticipated by each of five different references and also issued an obviousness-type double patenting rejection based on three other Pfizer patents. In a 56-page opinion, the BPAI rejected some of the examiner’s reasoning, but affirmed the decision as a whole.
In particular, the Board agreed that prior art descriptions of oral administration of the herb Yin Yang Huo (AKA Horny Goat Weed) serve as anticipatory prior art:
It is undisputed that the herb is orally administered, that icariin is an active component of the herb and that icariin is a selective PDEv inhibitor. Thus, the issue is whether the Yin Yang Huo references describe oral administration of the selective PDEV inhibitor icariin in an amount effective to treat ED. . . .
Appellant argues that a single dosage of Yin Yang Huo fails to provide an amount of icariin sufficient to treat ED . . . However, the selective PDEv inhibitor of claim 24 is not required to have a minimum % inhibition. . . . or a maximum Ki or other enzyme kinetics inhibition value or other defined parameter that would exclude Yin Yang Huo from the claimed method. Moreover, Yin Yang Huo is not administered as a single daily dosage when treating ED. Yin expressly defines one course of treatment as comprising administering 2.5 grams Yin Yang Huo 3 times per day for 20 days (FF 51). Therefore, this rebuttal evidence is insufficient to establish by a preponderance of the evidence that the Yin Yang Huo references fail to disclose oral administration of icariin in an amount effective to treat ED, particularly in view of [the prior art’s] disclosed successful treatment of 50 cases of impotence.
Examiner Rejection Affirmed.
Notes
[Updated based on Jon’s comment below] Pfizer has the opportunity to request a re-hearing and may also appeal the BPAI decision. Regarding a further appeal, the pertinent portion of 35 U.S.C. § 141 reads as follows: A patent owner, or a third-party requester in an inter partes reexamination proceeding, who is in any reexamination proceeding dissatisfied with the final decision in an appeal to the Board of Patent Appeals and Interferences under section 134 may appeal the decision only to the United States Court of Appeals for the Federal Circuit. Although the language is amenable to multiple interpretations, the best interpretation of this is that a patent owner undergoing an ex parte reexamination may only appeal to the CAFC.
The re-examination file history is quite long and includes over seventy-three-thousand pages (this total does not include the USPTO patent-documents cited as prior art).
What is the expiration date of this patent? Its earliest priority date is a Great Britain from June 9, 1993. A European PCT was then filed on May 13, 1994 which was published on December 22, 1994. The US National Stage application was filed March 4, 1996 and the patent issued October 22, 2002. There is no terminal disclaimer apparent from the file history and the PTO does not indicate any patent term extension due to FDA regulatory delay. [Patent][Granted FDA Extensions][FDA Orange Book Listing]
Foley attorney Hal Wegner regularly updates his list of the top-ten most important pending patent cases ranked according to their likely impact on the law. The list follows with my own annotations.
Ariad v. Eli Lilly: This en banc case is fully briefed and pending decision on the question of whether the written description requirement of Section 112 should be considered separate and distinct from the enablement requirement. In many ways, the case is about how the law should define the inventor’s “possession” of the invention.
I4i v. Microsoft: A petition for en banc rehearing has been filed on issues of damages and injunctive relief.
Mayo v. Prometheus: This case is on petition for certiorari to the Supreme Court on the question of patentable subject matter for medical diagnostic methods. It has the potential to be a Bilski follow-on.
Bilski v. Kappos: This patentable subject matter case is pending decision at the Supreme Court.
Microsoft v. Lucent: Microsoft is expected to file a petition for certiorari on the “clear and convincing” standard required for invalidating a patent. Microsoft argues that the standard should be lowered when the most pertinent prior art was not considered during patent prosecution.
Arkansas Carpenters: [UPDATED AND CORRECTED] The Second Circuit is considering whether a “reverse payment” from a patentee to an ANDA generic challenger to settle a patent challenge should be considered an antitrust violation.
Costco v. Omega: This case is pending certiorari with an outstanding request for the views of the Obama administration. The case raises an important question of copyright exhaustion in the context of authorized sales of copyrighted material on foreign soil. If decided by the Supreme Court, the case will likely impact patent doctrine.
Princo v. ITC: En banc argument is scheduled for March 3, 2010 on the contours of antitrust and patent misuse in the standard-setting processes.
Acushnet v. Callaway: Whether the legal determination of obviousness should be made by a judge – rendering a jury’s conclusion on that question “entirely advisory.”
After the Federal Circuit’s 2006 en banc decision in DSU Medical, charges of inducing patent infringement were thought to require that the accused infringer have actual knowledge of the asserted patent. In its recent decision in SEB v. Montgomery Ward, the Federal Circuit rejected that conventional wisdom and instead held that “deliberate indifference” to the existence of a patent would be sufficient to support an inducement finding. Thus, “a claim for inducement is viable even where the patentee has not produced direct evidence that the accused infringer actually knew of the patent-in-suit.”
An interesting aspect of the recent SEB decision is the court’s use of non-patent and non-Federal Circuit cases to aid its interpretation of the law. Specifically, the decision relies on three cases that are decidedly non-patent: Farmer v. Brennan, 511 U.S. 825 (1994); United States v. Carani, 492 F.3d 867, 873 (7th Cir. 2007); and Woodman v. WWOR-TV, Inc., 411 F.3d 69 (2d Cir. 2005).
Farmer v. Brennan involved the question of whether an incarcerated pre-operative transsexual who projects female characteristics could be held in a men-only prison. The Supreme Court there held that a prison official could be liable for “deliberate indifference” to inmate safety. US v. Carani involved an appeal of a child pornography conviction and the Seventh Circuit ruled that the defendant’s knowledge of the child-status of the pornography was satisfied by the defendant’s deliberate avoidance of or indifference to the truth. Woodman v. WWOR-TV involved an age discrimination charge against FOX and noted that knowledge of a fact may be proven through evidence that the party “consciously avoided knowledge of what would otherwise have been obvious him.”
Interestingly, the cases cited above are not found in the appellate briefs. Rather, the SEB court’s concept of “deliberate indifference” was raised sua sponte by the Federal Circuit.
A Broader Jurisprudential Outlook: In the past, I have spoken with appellate attorneys who suggested that briefs to the Federal Circuit should almost exclusively cite to prior Federal Circuit patent cases. I wonder if this decision is indicative of a shift in the court’s jurisprudence. In recent cases such as eBay, MedImmune, and Grokster, the Supreme Court pushed the Federal Circuit to consider non-patent jurisprudence when deciding patent cases. In KSR, the Supreme Court also suggested that the Federal Circuit should not overly bind itself to doctrine. These bits of Supreme Court guidance suggest a broader jurisprudential outlook. Additionally, soon-to-be Chief Judge Rader has a penchant for drawing connections across doctrinal lines. It will be interesting see whether this case is a sign of a new era or perhaps simply an aberration.
Part of the SEB decision revolved around the question of induced infringement. Under 35 U.S.C. 271(b) “[w]hoever actively induces infringement of a patent shall be liable as an infringer.” The defendant argued that it could not have induced infringement because it had no actual knowledge of the patent. That argument is supported by the Federal Circuit’s 2006 holding in DSU Medical v. JMS that the “requirement that the alleged infringer knew or should have known his actions would induce actual infringement necessarily includes the requirement that he or she knew of the patent.”
In this case, the Federal Circuit further fleshed-out that requirement of knowledge after first suggesting that the quoted DSU Medical statement was dicta. “The facts of DSU Medical did not require this court to address the scope of the knowledge requirement for intent.” Despite the “knowledge” language of DSU Medical, the SEB court here held that “deliberate indifference” to potential patent rights is be sufficient to satisfy the knowledge requirement of inducement charges. Thus, “a claim for inducement is viable even where the patentee has not produced direct evidence that the accused infringer actually knew of the patent-in-suit.”
To be clear, the court made a distinction between “deliberate indifference” and a “should-have-known” standard.
At the outset, this court notes that the Supreme Court has indicated, in a different civil context, that “deliberate indifference” is not necessarily a “should have known” standard. Farmer v. Brennan, 511 U.S. 825, 840 (1994). The latter implies a solely objective test, whereas the former may require a subjective determination that the defendant knew of and disregarded the overt risk that an element of the offense existed. . . . For example, an accused infringer may defeat a showing of subjective deliberate indifference to the existence of a patent where it shows that it was genuinely “unaware even of an obvious risk.” More importantly, and as courts have observed in a variety of settings, the standard of deliberate indifference of a known risk is not different from actual knowledge, but is a form of actual knowledge. See, e.g., United States v. Carani, 492 F.3d 867 (7th Cir. 2007) (“Deliberate avoidance is not a standard less than knowledge; it is simply another way that knowledge may be proved.”).
Here, the Federal Circuit agreed with the district court that there was “adequate evidence to support a conclusion that [the Defendant] deliberately disregarded a known risk that SEB had a protective patent.” In particular, the Federal Circuit noted (1) that the defendant had copied SEB’s product; and (2) that the defendant hired a patent attorney to conduct a right-to-use study but did not tell the patent attorney that it had copied the SEB product; and (3) that the defendant’s president was well versed in US patent law. Taking these facts together, the court found “considerable evidence of deliberate indifference.”
A failure to inform one’s counsel of copying would be highly suggestive of deliberate indifference in most circumstances.
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.
Therasense, Inc. (Abbott) v. Becton, Dickinson and Co. (Fed. Cir. 2010) (Case No. 2009-1008)
The Abbott patent covers a glucose meter designed with an additional sensor that ensures that a sufficient blood sample is obtained prior to the measurement. (Patent No. 5,628,890). Abbott sued BD and Nova Biomed for infringement. At the close of trial, the jury returned a verdict that the patent was infringed but invalid. The jury indicated that the patent was invalid for “anticipation or obviousness” and also invalid for failing the written description requirement of Section 112.
Law of Anticipation: On appeal, the Federal Circuit first determined that the jury instructions on the law of anticipation were incorrect. Notably, the district court judge had told the jury that “for anticipation, it is sufficient if the single reference would have informed those skilled in the art that all of the claimed elements could have been arranged as in the claimed invention.” (emphasis added). Of course, anticipation requires that the reference disclose the same elements in the same arrangement.
The requirement that the prior art elements themselves be “arranged as in the claim” means that claims cannot be “treated . . . as mere catalogs of separate parts, in disregard of the part-to-part relationships set forth in the claims and that give the claims their meaning.” Quoting Lindemann Maschinenfabrik GMBH v. Am. Hoist & Derrick Co., 730 F.2d 1452, 1459 (Fed. Cir. 1984).
Harmless Error: Under Federal Circuit law, erroneous jury instructions will lead to vacatur unless the error “could not have changed the result.” Here, the jury decided obviousness and anticipation together and the Federal Circuit found that the overwelming evidence of obviousness renders the error on anticipation “harmless.”
“[A]n erroneous instruction on the law of anticipation could not have changed the result in this case if claims 11 and 12 would have been obvious as a matter of law, such that no reasonable jury could have returned a verdict that the claims are not obvious.”
Obvious as a Matter of Law: The appellate panel held here that the asserted claims “would have been obvious over [the Nankai reference] as a matter of law.” The court’s approach to his holding of obviousness will be important for future summary judgment motions. In particular, Abbott’s downfall was its own broad claim language that encompassed the prior art. One clear difference between the claims and the prior art was admitted by the patentee to be “insubstantial.”
Written Description: Because the claims were obvious, the court did not consider the written description appeal.
Cross Appeal: BD filed a cross-appeal in the case asking the court to overturn the holding of infringement. The Federal Circuit rejected that cross-appeal — holding that it lacked jurisdiction. Notably, a cross-appeal is only appropriate when “a party seeks to enlarge its won rights under the judgment or to lessen the rights of its adversary under the judgment.” Here, the cross-appeal was improper because a holding of non-infringement would not change the ultimate outcome of the case.
Note: The Federal Circuit has also decided the related case No. 2008-1511 (Therasense, Inc. v. Becton, Dickinson and Co.). That opinion focuses on obviousness and inequitable conduct.
Boehringer Ingelheim Int’l v. Barr Labs and Mylan Pharma (Fed. Cir. 2010)
This decision holds a terminal disclaimer cannot be effective if filed after the expiration date of the earlier patent. The decision expands scope of the safe-harbor created by 35 USC 121 against double patenting allegations. Here, the court held that a divisional-of-a-divisional still qualifies for the safe harbor so long as the later-filed applications do not violate the Examiner’s original grouping suggestions.
(Opinion by Judge Linn and Joined by Judge Prost) Boehringer owns several patents listed in the FDA’s Orange Book as covering the drug Mirapex (pramipexole) used to treat symptoms of Parkinson’s disease. Boehringer filed this lawsuit after the defendant generic-drug manufacturers submitted abbreviated new drug applications (ANDAs) to the FDA as part of their efforts to begin making generic versions of the Mirapex.
The Mirapex patent family began with a 1985 patent application. That family has branched-out into more than fifty world-wide patents, including three US patents. Interestingly, the patent that issued from the original application (the “earlier patent”) is not listed in the Orange Book while a later issued patent is listed. By the time of this lawsuit, the Mirapex patents had passed their ordinary 17–year term of enforceability. However, the term of the later issued patent had been extended by over 4–years based on FDA delay under 35 USC 156.
Late-Filed Terminal Disclaimer : Despite their similarity, Boehringer had not filed a terminal disclaimer in the latest-filed US application. On the last day of trial, Boehringer decided to go ahead and file a terminal disclaimer. In spite of that action, the district court still held Boehringer’s asserted patent invalid under the judicially created doctrine of obviousness-type double patenting. In its opinion, the district court rejected the terminal disclaimer as inoperative because it was filed after the original patent had expired.
On appeal, the Federal Circuit agreed that a terminal disclaimer is not effective if filed after the expiration of the earlier patent.
By failing to terminally disclaim a later patent prior to the expiration of an earlier related patent, a patentee enjoys an unjustified advantage—a purported time extension of the right to exclude from the date of the expiration of the earlier patent. The patentee cannot undo this unjustified timewise extension by retroactively disclaiming the term of the later patent because it has already enjoyed rights that it seeks to disclaim.
Safe harbor of Section 121: Section 121 of the Patent Act provides a safe-harbor for family–member patents that issue after a restriction requirement:
A patent issuing on an application with respect to which a requirement for restriction … has been made, or on an application filed as a result of such a requirement, shall not be used as a reference either in the Patent and Trademark Office or in the courts against a divisional application or against the original application or any patent issued on either of them…
On appeal, the Federal Circuit first held that Section 121 can apply to protect “a divisional of a divisional” as in this case. Here, the court agreed that the later application was filed “as a result of” a restriction requirement because the restriction requirement in the original application was the original cause of the multiple US patent filings. The court did indicate that this safe-harbor would have been lost if the later-filed application violated the claim groupings of the restriction requirement.
In a prior decision, the court held that Section 121 applies to protect patents against double patenting rejections. See Geneva Pharms, 349 F.3d 1373, 1378 (Fed. Cir. 2003) (“Section 121 intervenes to prevent a nonstatutory double patenting rejection”).
Thus, because of the protection of Section 121, Boehringer did not need to file a terminal disclaimer.
In dissent, Judge Dyk argued that Section 121 should not apply here because the applicant had not strictly following the groupings in the original restriction requirement. Notably, the original restriction requirement divided the claims into ten groups — each group representing a separate invention while the later application was filed with claims from four of the groups.
Two recent expanded-panel BPAI decisions both consider the situation where a patent applicant presents arguments in a reply brief even though the arguments could have been raised by in the principal brief. Interpreting the regulations of 37 CFR 41, both decisions hold that the Board is not required “to consider such belated arguments” unless the applicant presents “good cause” for the delay in presentation.
“[W]e take this opportunity to explain that the regulations governing Appeals to the Board require that any argument not timely presented in the principal Brief, will not be considered when filed in a Reply Brief, absent a showing of good cause explaining why the argument could not have been presented in the Principal Brief.” Nakashima.
Rule 41 does not discuss the potential content of a reply brief other than to note that the reply brief “shall not include any new or non-admitted amendment, or any new or non-admitted affidavit or other evidence. 37 C.F.R. § 41.41(a)(2) (2007). Prior to 1998, Rule 41 required that reply brief content focus only on points newly raised in an examiner’s answer. That limitation, however was eliminated in the 1998 rule modifications. Despite this change, the BPAI panels both held that the “scope of the reply brief was never expanded to include belated arguments or new arguments unaccompanied by a showing of good cause.”
No New Nuances: A no-new-arguments rule is a common rule in all types of court systems. However, the rule as implemented in Nakashima appears that it could be better stated as no-new-nuances. Nakashima argued in its principal brief that the examiner’s obviousness rejection was incorrect. The “new” argument presented in the reply brief still focused on obviousness and the same two references, but provided a new justification for a non-obviousness conclusion. In particular, Nakashima’s opening brief argued (1) that the examiner’s suggested combination of prior art teachings would “destroy” the functionality of the claimed vacuum apparatus and (2) that the examiner was incorrect in his assertion that one of the references taught a “inner belt.” The reply brief added the nuance that there is “no reason to combine” the two prior art references because the result would not have been desirable. According to the Board, the “no reason to combine” argument was new and therefore, the Board refused to address that issue.
Writing in dissent in Nakashima, Administrative Patent Judge Terry Owens argued that the patent applicant had a right to include new arguments in its reply brief. Owens quotes the PTO’s comments associated with the 1998 rule change found in 62 Fed. Reg. 53168: “The former practice of permitting reply briefs based solely on a finding of a new point of argument [in the examiner answer] is eliminated thereby preventing present controversies as to whether a new point of argument has been made by the primary examiner.”
Notes:
On remand and after filing an RCE, Nakashima should be able to argue its new points to the examiner and perhaps reach the Board again in three-years.
The Nakashima application is owned by Brother (Japan) and is being prosecuted by the Oliff & Berridge firm (DC).
The Borden application is owned by Sharp (US) and is being prosecuted by the Chernoff firm (Oregon).
In the newest Patently-O Patent Law Journal article published today, Gregory Landis and Loria Yeadon discuss the role of ethnic diversity in the process of choosing upcoming nominees for the Court of Appeals for the Federal Circuit. The authors suggest that diversity should play a role in the judicial selection and that diversity likely will play such a role.
Read Gregory P. Landis & Loria B. Yeadon, Selecting the Next Nominee for the Federal Circuit: Patently Obvious to Consider Diversity, 2010 Patently-O Patent L.J. 1 (2010) here: [Nominee Diversity]
The Patently-O Patent Law Journal publishes short, timely essays on patent law focused topics. The published essays are typically fewer than 2000 words. Feel free to submit essays to me: dcrouch@patentlyo.com.
Gregory Landis and Loria Yeadon discuss the role of ethnic diversity in the process of choosing upcoming nominees for the Court of Appeals for the Federal Circuit. Read Gregory P. Landis & Loria B. Yeadon, Selecting the Next Nominee for the Federal Circuit: Patently Obvious to Consider Diversity, 2010 Patently-O Patent L.J. 1 (2010). Read the Article here: [Nominee Diversity]
Most utility patent applications are rejected at least once on either anticipation or obviousness. Design patents are different.
As part of a larger project, I combed through 1049 file histories of design patents that issued in the past 12 months. Of those, 5 were rejected on novelty grounds and 8 on obviousness. This leads to a prior-art-based rejection rate of 1.2% (95% CI range of 0.7% – 2.1%). The vast majority of the patents (81.6%) were never rejected during prosecution. The most common rejections are under 35 USC 112 paragraphs 1 and 2. Typically both paragraphs are asserted simultaneously.
According to the most recent USPTO annual report, design patents had an allowance rate of about 90% during the period FY2005–FY2009 as measured by the percentage of disposals that were allowances. About half of design patents issued in 2009 were pending for less than one year.
These numbers suggest that the US design patent system is operating as a registration system rather than as one based on a true examination. Along this vein, it is typically easier and cheaper to prosecute a design patent to issuance than to register a product design as trade dress. To be clear, I support the idea of a design patent registration system. More on that in another post.
I occasionally receive requests from independent inventors and very small companies (or their non-patent attorney representatives) looking for patent prosecution representation from someone qualified, inexpensive, and open to a fixed-budget who will honest, quality work. Is there a reputable service that helps match prosepective patent attorneys/agents with prosepctive clients? Here are some initial thoughts:
NAPP: The best national resource that I know of for individuals and very small companies is the National Association of Patent Practitioners (NAPP). In my experience, most NAPP members are associated with small law firms and tend to do a better job of working with individuals. The NAPP website has a directory of members that is divided according to location and areas of technology. Of course, the NAPP site does not include any “ratings.” Many local IP Bar Associations also include a referral service. Again, those do not include any attorney ratings.
Getting a Personal Recommendation: An inventor may not know anyone in the industry or even any other local inventors. One easy way to find this type of information is through patent records that are all available online at the USPTO. Using the USPTO search, an inventor can locate other local inventors and then contact them to ask for a recommendation for a patent attorney or patent agent. This is an easy way to network and find a referral. Of course, anyone trying this should be cautious about pre-filing disclosure of the invention.
Self-Help: Read Patent-It-Yourself, but still hire a patent law professional. The best patents that I have seen are drafted with substantial participation from both inventors and patent law professionals. I have seen high quality patents that were entirely drafted and prosecuted by the non-attorney, non-agent inventor. However, in those instances, the inventor had been through the patenting process dozens of times already—learning lessons through experience. Hospitals are full of well trained and well-meaning professionals. However, any hospitalized patient still needs an advocate in order to make sure the patient is receiving the best care that is most in-line with the needs of the patient. Patent prosecution is the same way, do not expect that you can simply drop-off the invention with the professional and expect that you will receive the type of patent that fills your needs.
Caveat: Since many non-attorneys are likely to read this, I’ll restate the obvious: this is not legal advice.
In his most recent blog post, USPTO Director David Kappos addresses problems and potentials of the USPTO's SPE system. A SPE or Supervisory Patent Examiner serves as the direct manager and trainer for around 13-20 patent examiners. SPE's obviously play an important role in the examination process. Kappos writes:
Our first-line managers play a critical role in the achievement of USPTO goals. In fact, my management experience has taught me that first-line managers have *far* more impact on the employees they manage than anyone else in the enterprise – more ability to develop employee skills and careers, more ability to produce outcomes that are successful for both employee and the enterprise. Their day-to-day work as coaches, guides, trainers, and mentors for employees is essential to creating a supportive, effective workplace.
On Patently-O and elsewhere, patent examiners have discussed qualities of good SPEs and bad SPEs. Partially in consideration of those remarks, Director Kappos is focusing on revamping the performance review system for SPEs (AKA the performance appraisal plan or PAP). The idea is to focus SPE attention and energy in the right areas. The performance rating will be based on (1) a measure of the quality of examiner work (25%); (2) a measure of workflow productivity toward the goal of pendency reduction (25%); (3) a measure of how responsive the SPE is to Art Unit examiners as well as to inquiries from applicants (20%); (4) a measure of the SPEs service as a coach and mentor to Art Unit examiners (15%); and (5) a measure of leadership activities of the SPE (15%).
Comments on the new SPE PAP can be sent to spepapawardtaskforce@uspto.gov. (Can someone send me further details on the plan?)
Cerner v. Visicu, 4-cv-1033 (W.D. Mo., December 8, 2009) (Visicu’s asserted claims held not infringed and invalid as obvious).
Hologic, Inc. et al v. SenoRx, Inc, 08-cv-0133 (N.D. Cal. December 17, 2009) (Hologic asserted claims held not infringed and obvious).
DNT, LLC v. Sprint Nextel Corporation, 03-cv-0021 (E.D. Va. December 14, 2009) (DNT’s claims held not infringed and lacking written description & enablement)
Retractable Technologies, Inc. v. Occupational & Medical Innovations, Ltd., 08-cv.-0120 (E.D. Tex. December 18, 2009) (patent claims held infringed and valid with damages of $1.5 m). Verdict included additional $2.2m for trade secret misappropriation.
Presidio Components Inc v. American Technical Ceramics Corp, 08-cv-0335 (S.D. Cal. December 16, 2009)(patent claims held infringed and valid with damages of $1.0 m in lost profits).
Here is the ‘policy question’ from my 2009 patent law exam:
Essay 3 (15 points) < ?xml:namespace prefix ="" o />
Congressman I. N. Venter has proposed an amendment to the Patent Act that would create a special right known as a “pioneering patent.” According to the proposal, pioneering patents would be awarded for inventions that are both the product of genius and that dramatically alter the technology landscape. Examples might include the airplane and the polymerase chain reaction (PCR).The pioneering patent would require greater evidence of nonobviousness, but the applicant would be allowed to pursue broader claims that might not otherwise satisfy the enablement and written description requirements of Section 112.What are the pros and cons of this proposal? Would a better approach be to extend the patent term a number of additional years for inventions determined to be pioneering? (I.e., longer patents instead of broader patents).
questions include:
Therasense, Inc. (Abbott) v. Becton, Dickinson and Co. (Fed. Cir. 2010) (
, but still hire a patent law professional. The best patents that I have seen are drafted with substantial participation from both inventors and patent law professionals. I have seen high quality patents that were entirely drafted and prosecuted by the non-attorney, non-agent inventor. However, in those instances, the inventor had been through the patenting process dozens of times already—learning lessons through experience. Hospitals are full of well trained and well-meaning professionals. However, any hospitalized patient still needs an advocate in order to make sure the patient is receiving the best care that is most in-line with the needs of the patient. Patent prosecution is the same way, do not expect that you can simply drop-off the invention with the professional and expect that you will receive the type of patent that fills your needs. 