Tag Archives: Trade Secrets

The following are a collection of posts on trade secrets. Trade secrets are essentially of two kinds. On the one hand, trade secrets may concern inventions or manufacturing processes that do not meet the patentability criteria and therefore can only be protected as trade secrets. This would be the case of customers lists or manufacturing processes that are not sufficiently inventive to be granted a patent (though they may qualify for protection as a utility model). On the other hand, trade secrets may concern inventions that would fulfill the patentability criteria and could therefore be protected by patents. In the latter case, the SME will face a choice: to patent the invention or to keep it as a trade secret.

Question: Intentionally Obscure Prior Art

Patent

A recent newsgroup posting included the following request for information:

I’m [looking for] ways to file a disclosure so that it is beyond argument technically “publicly available” but is very difficult to find.

The questioner was hoping to find an obscure way to create prior art without really giving away trade secret information.  Of course, this approach is directly contrary to the purpose of the public disclosure requirement of 35 U.S.C. 102, and overt gaming of the system would likely raise the ire of a U.S. jury. 

However, if the prior art is intentionally indexed only in a remote off-line Ghanaian library, will it still serve as prior art?

In other news, the PTO is killing its document disclosure program.

Personal Jurisdiction over Patent Holder Arises Based on Licensee’s Activities

Patent, Patent Cases 2006, ,

Breckenridge Pharmaceuticals v. Metabolite Labs. (Fed. Cir. 2006, 05–1121).

Metabolite (patent holder) and PamLab (exclusive licensee) sued Breckenridge in Colorado — asking for a TRO stopping Breckenridge from selling its Folbee product, which is similar to PamLab’s FOLTX.  The plaintiffs, however, dismissed their suit after their motion for TRO was denied.  Their next step was to send letters to retailers warning them against selling generic equivalents of FOLTX.  The letters to the retailers not name Breckenridge or threaten a lawsuit, but did include a PamLab brochure.

Breckenridge then sued Metabolite and PamLab in Florida for declaratory judgment of non-infringement and for various torts based on Florida law. 

Metabolite was dismissed from the suit for lack of personal jurisdiction, and summary judgment was granted to PamLab because Metabolite, as patent holder, was an indispensable party.

On appeal, the CAFC agreed with the lower court that Federal Circuit law should be applied to determine whether personal jurisdiction would comport with due process — because even the non-patent issues were “intimately linked to patent law.” 

The panel summarized its licensor due process case law:

In sum, our case law has held as follows: where a defendant has sent cease and desist letters into a forum state that primarily involve a legal dispute unrelated to the patent at issue, such as an injunction obtained for misappropriation of trade secrets, the exercise of personal jurisdiction is improper. Silent Drive, 326 F.3d at 1202. Likewise, a defendant may not be subjected to personal jurisdiction if its only additional activities in the forum state involve unsuccessful attempts to license the patent there. Hildebrand, 279 F.3d at 1356. The same is true where the defendant has successfully licensed the patent in the forum state, even to multiple non-exclusive licensees, but does not, for example, exercise control over the licensees’ sales activities and, instead, has no dealings with those licensees beyond the receipt of royalty income. Red Wing Shoe, 148 F.3d at 1357-58.

In contrast, the defendant is subject to personal jurisdiction in the forum state by virtue of its relationship with its exclusive forum state licensee if the license agreement, for example, requires the defendant-licensor, and grants the licensee the right, to litigate infringement claims. Akro, 45 F.3d at 1546. Finally, the defendant will also be subject to personal jurisdiction in the forum state if the exclusive licensee (or licensee equivalent) with which it has established a relationship is not headquartered in the forum state, but nonetheless conducts business there. Genetic Implant, 123 F.3d at 1457-59.

Thus, the crux of the due process inquiry should focus first on whether the defendant has had contact with parties in the forum state beyond the sending of cease and desist letters or mere attempts to license the patent at issue there. Where a defendant-licensor has a relationship with an exclusive licensee headquartered or doing business in the forum state, the inquiry requires close examination of the license agreement. In particular, our case law requires that the license agreement contemplate a relationship beyond royalty or cross-licensing payment, such as granting both parties the right to litigate infringement cases or granting the licensor the right to exercise control over the licensee’s sales or marketing activities.

Here, the CAFC found that the licensing relationship between Metabolite and PamLab, that PamLab’s sales activities in Florida create are sufficient to give the court jurisdiction over Metabolite.

As such, we hold that, through its relationship with PamLab, which sells products in Florida, Metabolite has purposefully availed itself to the privilege of conducting activities within Florida.

Reversed, vacated, and remanded

Notes:

  • Although apparently a different patent, the patent at suit here is related to Metabolite’s method for diagnosing hyperhomocysteinemia.  The validity of that patent is currently being considered by the U.S. Supreme Court in the case of LabCorp v. Metabolite.

Supreme Court: Failure to Renew Post-Trial Motion Eliminates Possibility of Appeal

Patent, Patent Cases 2006,

Unitherm Food Systems, Inc. v. Swift-Eckrich, Inc, —– U.S. —– (2006).

By Joshua Rich

The Supreme Court, in Unitherm Food Systems, Inc. v. Swift-Eckrich, Inc., continued its trend of requiring strict compliance with procedural litigation rules. The case arose out of Swift-Eckrich (which does business as ConAgra) sending out cease and desist letters that indicated that it intended to “aggressively protect all of [its] rights under” one of its patents. A recipient of the letter investigated the charge and determined that Unitherm, who was supplying the allegedly infringing process, had invented the patented process years before ConAgra had filed its patent application. Upon learning this, Unitherm sued ConAgra for a Walker Process antitrust violation, alleging that ConAgra had attempted to enforce a patent that was obtained through fraud on the Patent and Trademark Office.

The Supreme Court’s decision arose out of ConAgra’s motion practice at trial. Before the case was submitted to the jury, ConAgra moved for a directed verdict under Rule 50 of the Federal Rules of Civil Procedure, alleging that the evidence was insufficient to support a jury verdict against it. The judge denied the motion and the jury returned a verdict against ConAgra. After the jury verdict, ConAgra then neither renewed its Rule 50 motion to seek judgment as a matter of law nor filed a motion for new trial based on insufficiency of the evidence under Rule 59. On appeal, the question arose whether ConAgra could raise sufficiency of the evidence in light of its failure to renew the Rule 50 motion. The Federal Circuit found that it could (and reversed the jury verdict); the Supreme Court found that it could not.

Unquestionably, a district court cannot reverse a jury’s verdict in the absence of the renewal of a motion for directed verdict; the Supreme Court found that appellate courts similarly have no power to reverse the jury’s weighing of the evidence absent post-trial motions. Relying on three cases decided soon after World War II, the Court found that appellate courts do not have the power to apply the rules flexibly and consider the sufficiency of the evidence in the absence of a post-verdict motion. While some of the circuit courts had read some flexibility into Rule 50, the Court indicated that no flexibility was appropriate – without renewal of the Rule 50 motion, an appellate court cannot consider the sufficiency of the evidence.

While not specific to IP cases, the Unitherm case is important for IP cases because it forces the hand of litigators in such cases. Often, given page limitations and circumstances of trial, parties in IP cases are forced to choose which arguments to present to the trial court and which to drop. Now, it is clear that any arguments dropped from post-verdict motions will be off limits before the appellate courts. As a result of the Court’s decision, any party that thinks that there may be some chance it will want to raise sufficiency of the evidence on appeal will have to reserve space in its briefing papers to raise the argument. Similarly, trial counsel must pay special attention in the swirl of events after trial, as any deficiency in the post-trial briefing could drastically narrow the matters the appellate court can consider.

Note: Joshua Rich is a partner at MBHB LLP in Chicago where he litigates intellectual property cases. Mr. Rich has a background in biochemistry.  However, he has handled patent cases in a variety of technology areas as well as trademark, copyright, trade secret, and contract issues.

Government Secrecy Request Stalls IP Case.

Patent, Patent Cases 2005

PatSeminar029Crater Corp v. Lucent (Fed. Cir. 2005).

Crater holds a patent on a coupling device that operates underwater.  In a suit involving trade secret violations, the district court determined that the Government’s assertion of “Military and State Secret privilege” made it impossible for Crater to engage in discovery or to make out a prima facie case.  The court therefore dismissed the claims.

On appeal, the CAFC found that the lower court correctly sustained the government’s assertion of the state secret privilege, but erred in dismissing the case.

For the state secret privilege to be properly asserted, “the head of the pertinent government department must formally invoke the privilege on behalf of the government. Then, after reviewing the declarations of government officials and the circumstances surrounding invocation of the privilege, the court must determine whether assertion of the privilege is appropriate.”

After reviewing confidential documents submitted by the Government, the CAFC concluded that the Government had claimed a legitimate state secret.  Although the appellate panel recognized that proper resolution of the issues would be difficult in light of the state secret restriction on discovery, the court ordered that the facts of Crater’s claims must be further developed before making a determination of whether those claims should be dismissed.

In dissent, Judge Newman argued Crater should be given access to the Government documents and that the case should proceed in camera.

This case does not raise the constitutional debate about public trials; this is a commercial dispute, of interest only to the parties. It seems clear that the court’s requested remand cannot be implemented without risk of violating the secrecy order, with possible penalty. This is the third judicial cycle of this simple dispute. We should remand this case for in camera proceedings that would protect the information from public disclosure, and allow this dispute to come to closure. Trials in camera of issues subject to secrecy restraints are not new, and such trial would be the appropriate procedure in this case.

Decision.

Federal Circuit Broadly Interprets Copyright Safe Harbor for Computer Repair

Patent, Patent Cases 2005,

Storagetek v. Custom Hardware Engineering (Fed. Cir. 2005)

Normally, the unauthorized duplication of computer software violates the exclusive right of the copyright holder.  Section 117(c) of the Copyright Act, however, authorizes the copying of a computer program for purposes of maintaining or repairing a machine if the “copy is made solely by the virtue of activation of [that] machine”. 

In a case of first impression, the Federal Circuit addresses the extent of this protection offered by 17 U.S.C. § 117(c). The Court of Appeals, relying on definitions in 17 U.S.C. § 117(d), held that § 117(c) protects maintenance and repair as two different activities. “Repair,” according to the Federal Circuit, is restoring a broken machine to its original specifications. “Maintenance,” on the other hand, has “a much broader temporal connotation” that “encompass[es] monitoring systems for problems [and] not simply fixing a single, isolated malfunction.” Thus, the Federal Circuit found erroneous the district court’s conclusion that only repair activities are protected under Sec. 117(c).

Furthermore, the Court of Appeals also found DMCA provisions likely not applicable. Circumvention of a technological measure providing access to a copyrighted work is not a violation of DMCA, according to the Federal Circuit, unless it “infringes or facilitates infringing a right protected by the Copyright Act.” Finally, the Court of Appeals did not agree, based on material factors, that the copyrighted work in question should receive trade secret protection.

The Federal Circuit thus vacated the district court’s grant of a preliminary injunction to Storage Technology and remanded for further proceedings. Judge Rader, in dissent, decried the majority’s decision as “destroy[ing] copyright protection for software that continually monitors computing machine behavior.”

NOTE: This post was written by Cory Hojka. Mr. Hojka is a law clerk at MBHB and a student at the University of Chicago Law School.

Caterpillar Petitions Supreme Court on Issue of Implied Bias of Jury Members

Patent, Patent Cases 2005,

Caterpillar v. Sturman (on petition for writ of certiorari).

In 2004, the Court of Appeals for the Federal Circuit vacated a jury verdict in a trade secret and contract dispute involving Caterpillar. [Article].  The problem involved Juror No. 3, whose spouse was a current Caterpillar employee — and thus potentially biased.

Normally, the question of whether an individual juror is biased is a factual determination entitled to deference on appeal.  However, the CAFC ruled that the district court’s decision was based on “implied bias, as opposed to actual bias” and thus is reviewed de novo.  Applying Seventh Circuit law, the court found the implied bias is demonstrated by “showing that the juror has a personal connection to the parties or circumstances.”  As such, the spouse’s presence on the jury created an implied bias sufficient to vacate the judgment.

Now, Caterpillar has asked the U.S. Supreme Court to review the case.  In its petition for writ of certiorari, Caterpillar argues that the CAFC’s decision to “automatically disqualify the spouse of an employee of a party” is in conflict with the Second, Fourth, Fifth, Sixth, Eighth, Seventh and Eleventh circuits.  The petition cites Smith v. Phillips (1982) for the proposition that “implied bias doctrine is not viable for parties challenging jurors on a per se basis.  Caterpillar also argues that Sturman should not be able to argue implied bias because the company failed to use its peremptory challenges to protect against potentially biased jurors.

In its brief filed in opposition, Sturman argues that (i) there is “no circuit split” on the issues raised by Caterpillar; (ii) that the CAFC properly applied Seventh Circuit and Supreme Court law; and (iii) that Caterpillar did not raise its current argument below.  Sturman notes that the implied bias has a long history of application “stretching back to Blackstone’s day.”  Sturman also dismisses the importance of the case — since the CAFC’s interpretation of Seventh Circuit law is not binding precedent.

 

In re Fisher: Oral Arguments

Patent,

Don Zuhn and I have been covering the recent in re Fisher case here and here.  Fisher questions whether the PTO is requiring a heightened standard of utility for biotechnology inventions — specifically the case is directed to the standard of usefulness under 35 U.S.C. Section 101 applied to nucleotide sequences known as expressed sequence tags (EST’s).  We were unable to attend the oral arguments.  However, The American Intellectual Property Law Association (AIPLA) has given permission to reprint its report of the oral arguments on the Patently-O Site.  Jim Crowne is the editor of the AIPLA Reports that are usually only available to AIPLA members:

AIPLA REPORT

Federal Circuit Oral Argument Addresses Utility for EST Patents

In re Fisher, Fed. Cir., No. 04-1465, 5/3/05 oral argument.

 

The patentability of genetic markers, known as “expressed sequence tags” or ESTs, was argued before the Federal Circuit at a May 3, 2005, oral argument lasting more than two hours. Reviewing a conclusion by the Board of Patent Appeals and Interferences that the patent applications failed to satisfy the utility requirement of 35 U.S.C. §101, the court struggled with the argument that the application must disclose the utility of thing marked, as opposed to the utility of the markers themselves.

 

Appellant’s Argument

 

Former Solicitor General Seth Waxman, of Wilmer, Cutler, Pickering, Hale & Dorr, appeared for Monsanto Corp., the real party in interest. He acknowledged that under Brenner v. Manson, 383 U.S. 519, 148 USPQ 689 (1966), proof of utility requires that the claimed subject matter must provide a specific benefit in currently available form. He argued, however, that this standard is met with disclosures of specific and practical uses of the markers, unrelated to the function of the genes to which they correspond. In this case, the claimed ESTs can be used as maize chromosome markers to produce statistical associations between the chromosome map and plant traits developed by traditional cross breeding techniques.

 

Judge Randall Rader observed that the claimed subject matter is simply code and the applicant can’t say what it does. Waxman replied that the tagging results have great importance, independent of knowledge of the genes themselves, for the discoveries that they make possible. But the statute refers to the utility of the claimed invention, not the utility of something the invention makes possible, Judge Rader answered. Why isn’t this matter determined by the PTO’s instruction in its Utility Guidelines as to when an invention is useful enough for patentability, he asked.

 

The PTO’s error is its focus on the function of the gene being marked, which is not relevant to the utility of the invention, i.e., the marker itself, according to Waxman. In addition, the PTO improperly interpreted the Brenner phrase “specific utility” to mean “unique utility.” On that basis, Waxman explained, it held that the asserted useful characteristics of the ESTs failed to satisfy the utility requirement because the claimed marking function is carried out by all other ESTs.

 

Isn’t this the equivalent of claiming a single page of a book in the middle of a library, Judge Rader asked. The library as a whole will be very valuable once it’s complete, but one page out of the library would not seem to be enough for a patentable invention, he observed. Replying to the metaphor, Waxman argued that the ESTs here can be used in ways having nothing to do with the library. The mapping is desired to establish a statistical correlation between identified sequences and plant traits identified by cross breeding, he explained.

 

But that means that every tag is patentable, Judge Paul Michel observed. Waxman agreed, explaining that the utility requirement is satisfied for every tag that is properly disclosed. What about the tags that are identified by computer with randomly generated code combinations, he asked, pointing out that the 32,000 sequences identified in this case is but a small subset of all that could be found in the maize genome.

 

Judge Rader followed up by asking how much weight to give administrative convenience in view of the fact that the PTO could be required to examine an avalanche of claims. Notwithstanding such factual circumstances, Waxman replied, the PTO is required to apply the correct rule of law. But the issue here is whether the claimed invention is useful, Judge Michel pointed out, which is a fact question, not a legal question; shouldn’t the decision on review for that reason be very deferential to the PTO’s determination? The error asserted here is legal error, Waxman replied. The term used by the Supreme Court is “specific utility,” which means “identifiable utility,” not simply “unique utility,” he argued. The PTO committed legal error by making its utility decision based on the fact that all other ESTs have the same use, and on the fact that the application disclosed nothing about the function of the marked gene, he explained. This was the wrong criterion for judging patentability, he concluded.

 

PTO’s Argument

 

Appearing for the PTO, Associate Solicitor Stephen Walsh argued that the EST claims here fail to satisfy the utility requirement because they amount to little more that a starting point for future research rather than disclosing a specific, immediate and “substantial” utility.

 

But what about the argument that the utility requirement for marker inventions requires no knowledge about the marked gene or protein, Judge Michel asked? Walsh answered that Brenner may not require complete knowledge of everything about the gene, but it requires more than no knowledge at all. Why isn’t knowledge of a gene promoter sufficient, Judge Michel persisted. Fisher’s application disclosed no information about a specific promoter, according to Walsh, explaining that the promoter is only discovered upon use of the marker as a starting point.

 

Won’t the PTO’s test in this case discourage the disclosure that comes with patenting and drive inventors to trade secret protection, Judge Rader asked. That would essentially cut off later innovators from using that technology to make other important and valuable discoveries, he observed. Disclosures are important, Walsh responded, but the utility condition of patentability requires that the invention confer an immediate benefit. That may be, Judge Rader replied, but the PTO made its decision without knowing whether or not the invention provides a public benefit. The decision under these circumstances suggests that the driving factor was the administrative convenience related to the difficulty of examining the many marker claims, he observed. The decision was only an attempt to follow the Supreme Court’s utility rule, Walsh insisted.

 

Why can’t there be utility simply in the knowledge that the compound is present without respect to knowing anything about the benefit of the compound itself, Judge Bryson asked. Doesn’t the PTO argument mean that there must be an end product or end use to satisfy the utility requirement, Judge Michel added. Under Brenner, according to Walsh, a mere statement that a compound exists is no substitute for a disclosure of the compound’s benefit. The PTO has issued patents on probes where some things about the tagged microorganism were unknown, Walsh explained. However, those were cases where the probe was derived from the target microorganism, he said, and its features were reflected in the probe itself.

 

But where is the tilting point for showing sufficient utility, Judge Michel followed up. Is this an issue like pornography where you know it when you see it? Is something inherently unpatentable because it can only be used in a laboratory? Why isn’t the production of information useful in itself, Judge Rader added. Why isn’t evidence of a commercial demand for an EST sufficient to satisfy the utility requirement, Judge Bryson asked. Trying to respond to all of these questions, Walsh insisted that, even though they can be sold,

the tagged items are still only objects for study without any identified immediate benefit. Something does not become patentable merely because someone may want to buy it, he said, making a comparison to selling raffle tickets with no information about which ticket will pan out.

 

Does that mean that commercial success is utterly irrelevant to proof of utility, Judge Michel asked. Isn’t there anything about utility that can be inferred from a high selling price, Judge Bryson said. The selling price of a product is not relevant to the required immediacy of its benefit to prove utility, according to Walsh. It may not prove everything about utility, Judge Michel observed, but it may be relevant to show that markers are in demand to establish correlation of the marked gene and traits derived by cross-breeding.

 

Issues Not Addressed

 

Although the parties and the court explored the application of the Brenner utility decision, no one at the oral argument commented on the fact that Brenner reviewed a process claim to produce a known product (steroids), rather than a product claim as in this case. Brenner held that the utility of a claimed process is not proved without a showing of the utility of the produced compound. Justice Abe Fortas wrote as follows:

 

Until the process claim has been reduced to production of a product shown to be useful, the metes and bounds of that monopoly are not capable of precise delineation. It may engross a vast, unknown, and perhaps unknowable area. Such a patent may confer power to block off whole areas of scientific development, without compensating benefit to the public. The basic quid pro quo contemplated by the Constitution and the Congress for granting a patent monopoly is the benefit derived by the public from an invention with substantial utility. Unless and until a process is refined and developed to this point—where specific benefit exists in currently available form—there is insufficient justification for permitting an applicant to engross what may prove to be a broad field.

 

Neither party commented on whether the policy considerations articulated by Justice Fortas for process claims apply equally to product claims. In addition, the Brenner opinion directly addresses Judge Rader’s questions about the non-disclosure risks of disallowing patents and driving inventor’s to trade secret protection. Justice Fortas wrote as follows:

 

It is true, of course, that one of the purposes of the patent system is to encourage dissemination of information concerning discoveries and inventions. And it may be that inability to patent a process to some extent discourages disclosure and leads to greater secrecy than would otherwise be the case. The inventor of the process, or the corporate organization by which he is employed, has some incentive to keep the invention secret while uses for the product are searched out. However, in light of the highly developed art of drafting patent claims so that they disclose as little useful information as possible—while broadening the scope of the claim as widely as possible—the argument based upon the virtue of disclosure must be warily evaluated.  Moreover, the pressure for secrecy is easily exaggerated, for if the inventor of a process cannot himself ascertain a “use” for that which his process yields, he has every incentive to make his invention known to those able to do so. Finally, how likely is disclosure of a patented process to spur research by others into the uses to which the product may be put? To the extent that the patentee has power to enforce his patent, there is little incentive for others to undertake a search for uses.

Reprinted with permission.

Patent Practitioner Organization Supports Certain Patent Reform Measures, Rejects Others

Patent, Patent Legislation

The National Association of Patent Practitioners (NAPP) has provided its comments on the proposed patent reform legislation.  NAPP is primarily made-up of patent agents, and the organization’s viewpoint is seen as an important representation of the views of individual inventors.

In its introduction, NAPP takes-on the flippant usage of the term patent troll.

Some of the rhetoric by proponents of the Patent Act of 2005 has been highly troubling and obscures the debate. . . . A “patent troll” is apparently a derogatory term used by people or entities to refer to an inventor who has the audacity to assert a patent against them.  Such usage is an attempt to apply colored language, in a mindless way, to attack the entire < ?xml:namespace prefix ="" st1 />U.S. patent system. . . . To the extent that the term is used to derogate inventors who do not develop corporate structures or manufacture products, NAPP believes that inventors who merely invent but do not manufacture products – which, after all, includes most university and government researchers – do not deserve epithets or less patent protection.  Finally, to the extent that the term is used to refer to people who try to enforce invalid patents, NAPP believes that there are sufficient existing disincentives against such practices.

With regards to the individual provisions, NAPP supports post-grant opposition proceedings and the proposed changes to the duty of candor procedures.  However the organization also has stated quarrels with the following provisions:

First-to-File: This is a controversial issue. “Congress should not be fooled into thinking that this proposal has become less controversial or more accepted over time.”  Practically, this change makes things difficult for a patent practitioner who operates with a backlog of cases.  NAPP expects that the provision would decrease patent disclosure quality because practitioners will rush to file the documents. This increases the opportunity for attorney-malpractice.

Limits on Broadening Claim Scope: This “is an ill-conceived, poorly worded, and unworkable proposal. . . . NAPP strongly opposes this provision.” 

Universal 18–Month Publication: NAPP is against universal publication. One problem is that it would prevent “applicants from adopting the strategy of trying to get a patent and relying on trade secret protection as a fall-back if satisfactory patent protection cannot be secured.”

Inter Partes Reexamination Estoppel: NAPP is against removal of the provision that prevents a patent challenger from first bringing (and losing) an inter partes reexamination request challenging validity, then challenging validity of the same patent again in a court proceeding. [UPDATED TO FIX CORRECTION]

Limiting Damages to Components: This would just result in claim drafting mischief.

. . .

Link:

 

Online Inventor’s Forum

Patent, ,

The Patent Office has been hosting a regular on-line chat session between inventors and PTO expert examiners.  These sessions have been a great success, and the most recent session appears to have answered a number of interesting and fundamental questions.  The following are a few excerpts from the forum:

Q:What happens to a Provisional Patent Application after it has been abandoned?

A: The files are disposed of after one year from the filing date.

Q: Are there any restrictions from trademarking a product name that contains Spanish words?

A: The same laws and rules apply to marks in languages other than English. Other than those requirements, a non-English mark would have to be translated for the record.

Q: How long does a patent last?

A: Utility patent protection is approximately 20 years from the filing date of the application. Design patent protection is 14 years from the issue date.

Q: How do I know that my invention isn’t going to be stolen during the application process for a patent? Can I trust an attorney? Can I apply for a patent without an attorney? What are the risks when I do that?

A: All patent applications that have not been published are kept in confidence by USPTO personnel. An attorney in your employ must keep your confidences and secrets. You can apply for an application without an attorney, however, patents are legal documents and the use of a registered patent attorney/agent is strongly encouraged.

Q: Can I apply for a design and utility patent for the same product or is this overkill?

A: Yes, you can apply for both patents. A utility patent protects a new, useful, nonobvious and adequately discussed machine, manufacture, composition of matter, process, or improvement thereof. On the other hand, a design patent protects only the appearance of an article of manufacture, not the way the article functions or the materials of its manufacture. A better mousetrap could function (work) exactly like the mousetrap of old, but have a different appearance; it would then be appropriate for a design application. If, however, it had a new function in a way it trapped mice, it could also be appropriate for a utility application.

Link: Forum Transcript

March 2005 Report on New Academic Research

Patent, , , ,

PatentlyOImage004

Each month I post a note discussing new research from the academic side of patent law.  This March edition includes three great articles that relate to either legislative changes (prior use statute, post grant opposition) or upcoming court decisions (Phillips claim construction case).  Feel free to e-mail suggestions for April’s edition.

  1. Tom Fairhall and Paul Churilla, Prior Use of Trade Secrets and the Intersection with Patent Law, 14 Fed. Cir. Bar J. 455.  Fairhall and Churilla present a timely article on prior use rights that notes how the current prior use statute (35 USC 273) does not provide the scope necessary to truly protect a prior user’s expectations or investments.  The article is quite timely because FTC proposals to expand the statutory prior use rights is gaining some teeth in the patent community and on the Hill.
  2. Mark Lemley, The Changing Meaning of Patent Claim Terms, available at SSRN.  Professor Lemley’s article is also timely — he discusses at what particular point in time should the meaning of claim terms be fixed.  This is important because the ordinary meaning of terms in the English language change over time.  The major temporal candidates are (i) at the time of the invention (currently used for novelty and nonobviousness); (ii) at the time the application was filed (currently used for enablement or written description); (iii) a the time the patent issues (currently used for means-plus-function claim construction); and (iv) at the time of the infringement (at least some times used to determine infringement).  Lemley agrees that each candidate has a sound legal foundation.  However, he argues that the best approach moving forward is to fix the meaning at the time the patent application is first filed.
  3. Jay Kesan and Andres Gallo, Why ‘Bad’ Patents Survive in the Market, available at SSRN. The professors provide a game theory model to show how would-be invalid patents can survive and be valuable in the marketplace.  Essentially, the transaction costs make it difficult to mount an effective challenge to improperly granted patents.  Their work will serve as the theoretical basis any proposed post-grant opposition procedures.  Specifically, the authors “conclude that a low-cost, post-grant opposition process based primarily on written submissions within a limited estoppel effect . . . will serve as an effective instrument for improving the quality of patents that are issued and enforced.”

How to Jump-Start your Business Method Cases: Part V

Patent, Patent Prosecution

Keeping the invention secret:

  The financial service industry has been dramatically changed by the availability of patents on computer-implemented methods of doing business – often thought of as software patents.  Most large financial institutions now have in-house patent counsel who manage prosecution, licensing, and potential litigation. Many of these institutions have aggressive patenting strategies and are hoping to amass large patent portfolios both to protect their own business and for licensing. 

  Financial institutions have a history of being quite secretive in their practices.  In one sense, this practice stops with the emergence of the patentability option.  In order to obtain a patent, an inventor must publicly disclose the details of the invention.  However, many institutions are opting to request that at least the patent application be left unpublished in order to maintain secrecy of the patent until the date the patent is issued (if ever).

  Formerly, patent applications were kept in confidence at the PTO until the resulting patent issued.  However, in 1999, in order to comply with the international TRIPS agreement, the PTO began a program of publishing (or “laying-open”) patent applications eighteen months after filing.  One clause of the ’99 law guarantees that the PTO will keep the application in secret if the patentee promises to not obtain foreign patent rights.  Foreign patent offices are quite sour on financial service-type business method patents.  Thus, the applicants do not give up much by agreeing to only obtain U.S.rights on their new methods of doing business.

By requesting nonpublication, financial institutions are generally able to maintain secrecy of the invention until the patent issues.  Further, if it appears that the patent will not issue or that the patent would disclose important trade secret information, then the institution may abandon the patent rather than risk public disclosure.

Links:

CAFC: Design Patent Infringement Opinion Need Not Mention Every Detail of a Patented Design

Patent, Patent Cases 2005

Brooks Furniture v. Dutailier Int’l. (Fed. Cir. 2005) (03-1379) [pdf].

By Jennifer Swartz

Brooks Furniture brought a declaratory judgment action in Tennessee District Court after receiving a cease and desist letter from Dutailier International, the assignee of the design patent for “Rocking Chair Trim.”  Although the cease and desist letter sent to Brooks Furniture was based upon opinions of counsel, officers, and outside experts, the district court found that the letter had been sent in bad faith by Dutailier because the opinions Dutailier relied upon did not discuss the chair back’s specific feature of a “trailing edge descending in a gentle ‘s’ curve.” Accordingly, the lower court deemed the case exceptional and awarded attorney fees. 

The Federal Circuit vacated the award, rejecting the lower court’s narrow view of the opinion’s reasonableness:

The fact that an infringement opinion may not have mentioned every detail of the patented or the accused design does not necessarily render the opinion wrong or unreliable.

As the test for a design patent’s infringement is “substantial identity,” not every aspect of the design need be identical, and thus an opinion need not consider every aspect of a design to be reasonable. 

Jennifer Swartz is an associate at McDonnell Boehnen Hulbert & Berghoff LLP in Chicago.  Ms. Swartz has experience in various aspects of intellectual property litigation including patent and trademark infringement, and trade secret violations.  [Brief Bio]

Snippets

Articles and Publications, Patent,

SnippetsTM provides a review of timely developments in intellectual property law. Here is a table of contents of the most recent issue (November 2004):

1. Thomas Fairhall and Paul Churilla, The Intersection of Trade Secrets and Patent Law: The Prior User Rights Statute, 35 U.S.C. 273, Part 2.
2. Eric Moran and Dennis Crouch, Drafting the Technology Game Plan Part 5: Domain Name Protection.
3. Marcus Thymian and Sherri Oslick, On Your Mark! . . . Get Set! . . . Know: Marking Fundamentals.
4. Alison Baldwin, Patent Validity Assessments: Your Guide to Avoiding the On-Sale Bar, Part 2.

You can e-mail the editor (snippets@mbhb.com) to receive your FREE copy of the newsletter.

In the e-mail, you can indicate your technology and legal interest: (Biotech, Electrical, Software, Chemical, Mechanical, Litigation, and/or Prosecution).

Carlos Gutierrez nominated as Secretary of Commerce

Patent, Patent Cases 2004

Kellogg Executive Carlos Gutierrez has been nominated by President Bush to replace Don Evans as Secretary of Commerce.  The Commerce Department manages the Patent & Trademark Office as well as other utilitarian functions of the government such as the census, weather forecasting, and standard setting.

Gutierrez fled Castro’s Cuba in the 1960’s and worked his way up the corporate ladder — eventually taking the helm at Kellogg in 1999.  He is credited with revitalising the company that had been knocked from its perch at the top of the cereals business.

Bush called Gutierrez a "great American success story" and a visionary executive, who understands the world of business from the "first rung on the ladder to the very top."

Kellogg is no stranger to the PTO, more than sixty years ago Kellogg brought a case to the Supreme Court over whether the pillow shape of Nabisco’s shredded wheat was trademarked.  In Kellogg v. National Biscuit, the Court ruled that a "product shape that is the subject of a [utility] patent goes into the ‘public domain’ when the patent expires." 306 U.S. 111 (1938).

Senate Confirms Jon Dudas as Head of USPTO

Articles and Publications, Patent,

The U.S. Senate has confirmed Jon W. Dudas as Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office.  The confirmation was unanimous!

Mr. Dudas was nominated by President George W. Bush as Under Secretary and Director in March 2004 and was appointed on July 30, 2004. He served as Acting Under Secretary and Director from January 2004 until assuming his current position. Mr. Dudas was Deputy Under Secretary and Deputy Director from January 2002 until he became the Acting Under Secretary.

Heads of Commerce and Justice Resign

Articles and Publications, Patent

Attorney General John Ashcroft and Commerce Secretary Don Evans have resigned from their respective posts.  They are the first members of President Bush’s Cabinet to leave as the President heads into his second term.

As Secretary of Commerce, Evans over-saw the United States Patent & Trademark Office.  This spring he led a special envoy to China to discuss intellectual property and piracy with Chinese officials and practitioners. Mercer Reynolds has been mentioned as a possible replacement.

Ashcroft was a constant figure on national television in the days following 9/11.  More recently, his administration has supported a strong policy against IP piracy.

Caterpillar Jury Trial Vacated Because Juror’s Spouse Was an Employee

Patent, Patent Cases 2004

Caterpillar v. Sturman (Fed. Cir. October 28, 2004). 

The Court of Appeals for the Federal Circuit (CAFC) today vacated a jury verdict in a trade secret and contract dispute involving Caterpillar. 

The technology at issue involved the use of residual magnetic latching in a fuel injector.  (See, for example, U.S. Patent 3,646,898).  The Appellate Panel, led by Judge Newman, decided several important issues in this case.  One of the most interesting involved Juror No. 3 whose spouse was a current Caterpillar employee.

At the beginning of trial, during the jury selection process, Sturman moved to dismiss for cause any current or former Caterpillar employees and their spouses. The district court denied Sturman’s blanket objection, but specifically allowed Sturman to show cause for individual jurors. . . . Sturman did not individually challenge for cause Juror No. 3, the spouse of a current Caterpillar employee, nor did it use one of its peremptory challenges to have her removed. Juror No. 3 ultimately sat on the jury.

Sturman appealed the district court’s opinion to allow Juror No. 3 to sit on the jury.

Potential for bias reviewed de novo.

Normally, the question of whether an individual juror is biased is a factual determination entitled to deference on appeal.  However, the CAFC ruled that a district court’s decision on “implied bias, as opposed to actual bias” is reviewed de novo.

Spouse of Employee is Biased as a Matter of Law.

Applying Seventh Circuit law, the court found that implied bias is demonstrated by “showing that the juror has a personal connection to the parties or circumstances.” 

Juror No. 3 had a financial interest in this case because her husband worked for Caterpillar at the time of the trial. As noted in Polichemi, even a tiny financial interest is enough to warrant dismissal. And it is legally irrelevant whether this financial interest arose due to his employment in management or under a union contract. . . . In addition, we find no distinction in the law between the financial interest of an at-will management employee and the interest of an employee under a union contract, nor do we advocate creating one.

Jury verdict vacated. Case remanded for a new trial.

IBM and Intel license blade server specifications, but not associated patents

Articles and Publications, Patent, ,

blade_server_patent

IBM and Intel have announced a general license agreement on their patented blade server technology. This move is expected to create a level of standardization in the blade server market. (The Register).

The license (PDF) is directed at “copyright and trade secret rights in the Specification, to use the Specification for the limited purpose of designing and manufacturing Licensed Products, and to reproduce a limited number of copies of the Specification as is reasonably necessary to design and manufacture Licensed Product.”

Most notably, the license does not extend to patents, patent application, or trademarks.

Licensors grant no license … under any patents, patent applications, mask works or trademarks of the Licensors. Licenses under any patents of IBM or Intel will be addressed in separate patent license agreements.

Instructions for registering for a license are available here.

Note: This move falls in line with IBM’s open source philosophy. However, it is important to note that IBM and Intel may likely retain control over much of this technology through their vast patent portfolios.

Court: FDA’s Role is Not to Analyze Patent Claims

Patent, Patent Cases 2004

Alphapharm PTY v. Tommy G. Thompson (Secretary of HHS) (D.D.C. 2004) (CA 03-2269).

 

By Mark Chael

Recently, the District Court in Washington, D.C. agreed with the Federal Circuit, the Fourth Circuit, and a District Court in Maryland by determining that the listing of patents in the Orange Book by the Food and Drug Administration (FDA) is merely “a ministerial act” and that the Hatch-Waxman Act does not require the FDA “to police the listing process by analyzing whether the patents listed by NDA (New Drug Application) applicants actually claim the subject drugs or applicable methods of using those drugs.”

 

In a case captioned, Alphapharm PTY Limited v. Tommy G. Thompson, the court reasoned that substantive patent analysis is beyond the expertise of the FDA and is a function they are not mandated to perform.  Rather, substantive patent analysis is better left with the U.S. Patent and Trademark Office. The function of the FDA, on the other hand, is to assure the safety and availability of useful pharmaceutical compounds.  The laws and regulations that govern the FDA, in particular those laws and regulations that govern the listing of patents in the Orange Book, “commit the resolution of disputes between ANDA (Abbreviated New Drug Application) applicants and patent holders regarding the validity or correctness of the listed patent information to actions between ANDA applicants and patent holders, rather than to FDA action.”

Note: This is the first post by patent attorney Mark Chael, PhD.  Mark’s prior research in biochemistry, molecular biology, and cellular biology make him well equipped to understand the intricacies involved in biotech and pharmaceutical patents. He is an associate at the intellectual property law firm McDonnell Boehnen Hulbert & Berghoff in Chicago. [Brief Biography]

What is a Trade Secret?

Patent, Patent Q&A

Historically, trade secrets arose under common law. Today, every state provides some form of trade secret protection – although the level of protection varies from state to state. The Uniform Trade Secrets Act (UTSA) has been ratified by many states and has helped to establish a more uniform body of law across the country.

A trade secret can take many forms, such as a device, method, or formula that provides some competitive advantage or has independent economic value. The holder of the trade secret must make reasonable efforts to ensure that the subject maintains its secrecy.