Tag Archives: Written Description

35 U.S.C. 112 SPECIFICATION. (a) IN GENERAL.—The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor or joint inventor of carrying out the invention.

The New Role for Post Grant Review Proceedings (PGR)

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by Dennis Crouch

It has now been just over 18-months since we started filing patent applications under the new first-to-file patent system mandated by the America Invents Act (AIA) of 2011.  And, slowly but surely, FTF patents are now beginning to issue.  Those new patents also bring us into a new era of Post-Grant-Review-Proceedings (PGR).

My expectation is that PGR will quickly prove itself as an incredibly powerful tool for challenging patents. Importantly, PGR proceedings allow a third party to challenge the validity of a patent on any of the validity grounds that could be raised in court as a defense under 35 U.S.C. 282 – these include novelty, obviousness, written description, enablement, indefiniteness, utility, and subject matter eligibility. This list represents a major expansion of challenge-justifications over inter partes review (IPR) proceedings or reexaminations. These same doctrines have already been available for covered-business-method review (CBM) proceedings and have been used successfully if only on a narrow class of patents (those covering financial business methods).

Two recent PGR proceedings have been filed.  In one case, LaRose Indus. has challenged Patent No. 8,684,420 that covers the popular children’s “Rainbow Loom.”  Although the patent claims a 2010 priority date, the particular application was filed as a continuation in July 2013 and, at least according to the petitioner, added new mater to the claims at that point.  The second case PGR case involves Patent No. 8,598,291 that covers a liquid formulation of a particular nausea control drug used by chemotherapy patients. The petition argues that the claims fail the requirements of written description, enablement, and definiteness.

The most important limitation on the PGR process is the relatively short 9-month window for filing a PGR petition. Namely, the petition must be filed within 9-months of the patent issuance.  This puts some pressure on parties to monitor competitor patents and patent families.  It also provides patent owners at least some incentive to hold-off asserting their patent until after that window has closed (unless the patentee would welcome the review).  I suspect that the set-up in the LaRose Rainbow Loom market will be fairly common. The patentee (Choon) had previously sued LaRose on a previous patent and so LaRose has been closely monitoring the continuation applications.

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In thinking about how soon the AIA cases will come on-board, I created the chart below. The chart provides some information on the timing of patent issuance — showing the percentage of patents issued with 18-months of filing and 36-months of filing respectively.  A big caveat for this particular chart is that it looks at the actual application filing date and does not consider the priority date that will typically control whether a patent will be examined under the AIA. Thus, even at the three-year date (March 2015), I would expect that significantly less than half of the recently issued patents would be FTF patents.

You’ll note the trend beginning in FY2011 of issuing more patents more quickly.  I largely attribute the change to two initiatives pushed by David Kappos during his term as PTO Director that resulted in (1) more funding to hire more examiners; and (2) a greater allowance rate.  Those factors have continued through the succeeding interim leadership terms of Terry Rea, Peggy Focarino, and now  Michelle Lee.

TimingOfPatentIssuance

Interval Licensing v. AOL: Post-Nautilus Indefiniteness

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By Jason Rantanen

Interval Licensing LLC v. AOL, Inc. (Fed. Cir. 2014) Interval v AOL
Panel: Taranto and Chen (author)*

One of the most frequent criticisms of Nautilius v. Biosig is that it simply provides a  general standard (Section 112 ¶2 requires that “a patent’s claims, viewed in light of the specification and prosecution history, inform those skilled in the art about the scope of the invention with reasonable certainty” ) and fails to offer any substantive discussion of what this meant.  In this post-Nautilius opinion affirming the district court’s ruling of indefiniteness, Judge Chen provides some of that guidance when it comes to words of degree.

Background. Interval owns the two patents-in-suit, Nos. 6,034,652 and 6,788,314, that claim priority back to 1996.  These patents are directed to a system that “acquires data from a content provider, schedules the display of the content data, generates images from the content data, and then displays the images on a device.”  The system does not simply initiate images on the display device, however.  Rather, almost all of the asserted claims state that the images are displayed “in an unobtrusive manner that does not distract a user.”  The idea is that the images will occupy the peripheral attention of a person in the vicinity of the display device while not interfering with their primary interaction with the device.  The main issue on appeal was whether this “unobtrusive manner” language was indefinite.

Representative claim 1 of the ‘314 patent (with emphasis added):

1. A method for engaging the peripheral attention of a person in the vicinity of a display device, comprising the steps of:
providing one or more sets of content data to a content display system associated with the display device and located entirely in the same physical location as the display device;
providing to the content display system a set of instructions for enabling the content display system to selectively display, in an unobtrusive manner that does not distract a user of the display device or an apparatus associated with the display device from a primary interaction with the display device or apparatus, an image or images generated from a set of content data; and
auditing the display of sets of content data by the content display system;
wherein the one or more sets of content data are selected from a plurality of sets of content data, each set being provided by an associated content provider, wherein each associated content provider is located in a different physical location than at least one other content provider and each content provider provides its content data to the content display system independently of each other content provider and without the content data being aggregated at a common physical location remote from the content display system prior to being provided to the content display system, and wherein for each set the respective content provider may provide scheduling instructions tailored to the set of content data to control at least one of the duration, sequencing, and timing of the display of said image or images generated from the set of content data.

Interval sued AOL, Apple, Google, and Yahoo for infringement.  In its claim construction order, the district court held the “in an unobtrusive manner” language indefinite under the pre-Nautilius standard, thus rendering invalid most of the asserted claims.  (The parties stipulated to noninfringement of the remaining claims based on the court’s claim construction).  Interval appealed.

Indefiniteness.  Under Nautilus, “[a] claim fails to satisfy [the Section 112, 2] requirement and is thus invalid for indefiniteness if its language, when read in light of the specification and the prosecution history, ‘fail[s] to inform, with reasonable certainty, those skilled in the art about the scope of the invention.'”  Slip Op. at 10, quoting Nautilus.  However, there is more to the inquiry than just this general statement.  Here, the term at issue was a term of degree.  That, by itself, was not fatal:

We do not understand the Supreme Court to have implied in Nautilus, and we do not hold today, that terms of degree are inherently indefinite.  Claim language employing terms of degree has long been found definite where it provided enough certainty to one of skill in the art when read in the context of the invention….As the Supreme Court recognized in Nautilus, “absolute precision” in claim language is ‘unattainable.'”

Slip Op. at 11 (internal citations omitted).  But meaningful boundaries – which Judge Chen indicates must be objective – are necessary; that one might identify some standard for measuring claim scope does not mean the claims meet the § 112 requirement:

Although absolute or mathematical precision is not required, it is not enough, as some of the language in our prior cases may have suggested, to identify “some standard for measuring the scope of the phrase….The Supreme Court explained that a patent does not satisfy the definiteness requirement of § 112 merely because “a court can ascribe some meaning to a patent’s claims.”  Nautilus, 134 S. Ct. at 2130. The claims, when read in light of the specification and the prosecution history, must provide objective boundaries for those of skill in the art.

Id. at 12 (internal citations omitted).  Here, no such no such “objective boundaries” for those of skill in the art are provided in the patent:

The patents’ “unobtrusive manner” phrase is highly subjective and, on its face, provides little guidance to one of skill in the art….Although the patented invention is a system that displays content, the claim language offers no objective indication of the manner in which content images are to be displayed to the user. As the district court observed, “whether something distracts a user from his primary interaction depends on the preferences of the particular user and the circumstances under which any single user interacts with the display.”

The lack of objective boundaries in the claim language is particularly troubling in light of the patents’ command to read “the term ‘image’ . . . broadly to mean any sensory stimulus that is produced from the set of content data,” including sounds and video. ’652 patent, 6:60–64. The patents contemplate a variety of stimuli that could impact different users in different ways.  As we have explained, a term of degree fails to provide sufficient notice of its scope if it depends “on the unpredictable vagaries of any one person’s opinion.”

Id. at 13.  Nor did the written description provide the necessary guidance.  “Where, as here, we are faced with a “purely subjective” claim phrase, we must look to the written description for guidance.”  Id. But Interval’s principal argument, that “unobtrusive manner” is defined through its relationship to the “wallpaper” embodiment, thus informing those of skill in the art that “unobtrusive” has only a spatial meaning in the context of the patents, failed because the link was not clear: other portions of the specification suggest that the phrase may also be tied to the “screen saver” embodiment.  The specification is “at best muddled, leaving one unsure of whether the “unobtrusive manner” phrase has temporal dimensions as well as spatial dimensions.”  And it’s secondary argument, that the court must adopt a “narrow example” from the specification, failed because the “narrow example” from the specification was just that: an example, not a definition.  The patent drafter used the term “e.g.” (“exempli gratia”), which in English usage means “for example.”  If the drafter had instead used words of definition, such as “i.e.” (“id est” which in English usage means “that is”), it might have helped provide the necessary clarity.  Nor was one example sufficient here: “With this lone example, a skilled artisan is still left to wonder what other forms of display are unobtrusive and non-distracting. What if a displayed image takes up 20% of the screen space occupied by the primary application with which the user is interacting? Is the image unobtrusive? The specification offers no indication, thus leaving the skilled artisan to consult the “unpredictable vagaries of any one person’s opinion.”  Slip Op. at 18 (quoting Datamize).

Claim Construction/Noninfringement.  The Federal Circuit revised the claim construction of two terms in the four claims of the ‘652 patent that did not contain the “unobtrusive manner” language, vacated the district court’s judgment of noninfringement as to these claims, and remanded for further proceedings.

Nonobviousness: Not at issue here.  Are these patents obvious?  That’s a different question.  After the suit commenced, two of the defendants initiated an ex parte reexamination against the ‘652 patent and a third initiated an inter partes reexamination against the ‘314 patent.  While the examiners found the asserted claims of the patents to be patentable over the cited prior art,the PTAB reversed the decision on the ‘314 patent during the appeal in this case and held that all the claims of that patent were obvious, anticipated, or both.  The Federal Circuit opinion notes that Interval indicated that it will appeal that decision.

Judge Mayer Raises 101 When Not In Issue: Other Panelists Don’t

Invalidity, Obviousness, Patent, Patentable Subject Matter, Software, , , ,

I am sure Dennis will do his usual full and grand treatment, but this one is sort of the counter-punch to Ultramercial. In I/P Engine, Inc. v. AOL Inc. (Fed. Cir. Aug. 15, 2014) (per curiam), the court split on whether the claims were properly found by the jury to have been not obvious, with Judge Chen dissenting on that point and the per curiam opinion reversing the finding of no invalidity. (The other panel members were Judge Wallach and Judge Mayer).

Recall that in Ultramercial the court emphasized that 101 was seemingly a defense, and so evidence was needed and the usual presumption of validity applied, and so on.  Here, Judge Mayer seemed to take precisely the opposite tact, though it’s not quite clear.  In addition to writing at length about what he perceives the “technological arts” test to mean and require, he wrote:

The Supreme Court has dictated that the subject mat- ter eligibility analysis must precede the obviousness inquiry. Flook, 437 U.S. at 593 (“The obligation to determine what type of discovery is sought to be patented” so as to determine whether it falls within the ambit of sec- tion 101 “must precede the determination of whether that discovery is, in fact, new or obvious.”); Bilski, 130 S. Ct. at 3225 (explaining that the issue of whether claims are directed to statutory subject matter is “a threshold test”); see also In re Comiskey, 554 F.3d 967, 973 (Fed. Cir. 2009) (“Only if the requirements of § 101 are satisfied is the inventor allowed to pass through to the other requirements for patentability, such as novelty under § 102 and . . . non-obviousness under § 103.” (citations and internal quotation marks omitted)). To fail to address at the very outset whether claims meet the strictures of section 101 is to put the cart before the horse. Until it is determined that claimed subject matter is even eligible for patent protection, a court has no warrant to consider subordinate validity issues such as non-obviousness under 35 U.S.C. § 103 or adequate written description under 35 U.S.C. § 112.

From a practical perspective, there are clear advantages to addressing section 101’s requirements at the outset of litigation. Patent eligibility issues can often be resolved without lengthy claim construction, and an early determination that the subject matter of asserted claims is patent ineligible can spare both litigants and courts years of needless litigation. To the extent that certain classes of claims—such as claims on methods of doing business—are deemed presumptively patent ineligible, moreover, the United States Patent and Trademark Office will have more resources to devote to expeditiously processing applications which disclose truly important advances in science and technology.

Even more fundamentally, the power to issue patents is not unbounded. To the contrary, the constitutional grant of authority “[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries,” U.S. Const. art. I, § 8, cl. 8, “is both a grant of power and a limitation,” Graham v. John Deere Co., 383 U.S. 1, 5 (1966); see Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 146 (1989). Section 101’s vital role—a role that sections 103 and 112 “are not equipped” to take on, Mayo, 132 S. Ct. at 1304— is to insure that patent protection promotes, rather than impedes, scientific progress and technological innovation. A robust application of section 101 ensures that the nation’s patent laws remain tethered to their constitutional moorings.

I am guessing we’ll see another en banc case soon…

Specification describes machine with sensors – Can you omit the sensor limitation in the claims?

Patent

By Dennis Crouch

ScriptPro v. Innovation Associates (Fed. Cir. 2014)

Kansas district court Judge Carlos Murguia found ScriptPro’s patent claims invalid under 35 U.S.C. §112 for lacking written description. See U.S. Patent No. 6,910,601. That holding has been reversed by a unanimous Federal Circuit panel that included Judges Taranto (Author), Bryson, and Hughes.

Although the technology at issue here is largely mechanical (a pill collating machine), the case is akin to a genus-species debate and also relates closely to the ‘essential element‘ pseudo-doctrine of Gentry Gallery.

Here, all of the examples of the patented collating machine include a set of sensors used to determine whether a particular holding area is full. Further, the specification suggests that – even at its broadest – the invention includes the sensors: “[T]he present invention broadly includes . . . a plurality of sensors.” However, the claims do not include sensor limitations – with the result being that machines both with and without the sensors could be seen as infringing. Seeing that discrepancy between the specification and the claims, the district court ruled that the original written description does not show that the inventor possessed a collating machine that operated without the sensors and thus that the claims covering machines sans sensors fail the written description test. Judge Murguia wrote:

Based on the record before it, the court concludes that no reasonable jury could find that the inventors were in possession of a collating unit that operated without sensors. Innovation is therefore entitled to summary judgment on its claim of invalidity as to all challenged claims.

On appeal, the Federal Circuit has reversed – finding that summary judgment was improper.

It is common, and often permissible, for particular claims to pick out a subset of the full range of described features, omitting others. A specification can adequately communicate to a skilled artisan that the patentee invented not just the combination of all identified features but combinations of only some of those features (subcombinations)—which may achieve stated purposes even without omitted features.

. . . There is no sufficiently clear language in the specification that limits the invention to a collating unit with the (slotchecking) sensors. And considering what the specification does say, and what ScriptPro highlights as a central purpose of the claimed advance in technology [keeping track of open slots – a function that does not require the sensors], it cannot be said as a matter of law that claims 1, 2, 4, and 8 have a scope incommensurate with what is described as the invention. . . . The term “broadly” qualifies the assertion of inclusion [and] suggests that exceptions are allowed to the assertion of what occurs most (perhaps even almost all) of the time.

Readers will note that, while the court begins with a suggestion that written description requires that the patent document affirmatively convey invention of sub-combination, the actual approach looks more to whether the patent document affirmatively denies the subcombinations.

Here, the court thought it important – although not determinative – that the original application as filed included the non-sensor claims. Thus, this is not an example of an ex post attempt to expand scope that is most common in written description cases.

When a specification is ambiguous about which of several features are stand-alone inventions, the original claims can help resolve the ambiguity, though even original claims may be insufficient as descriptions or be insufficiently supported by the rest of the specification.

The notion is that original claims are part of the specification and thus relevant. However, they are also potentially inadequate (as we learned in Ariad and LizardTech).

Not a Summary Judgment Question: One lens for considering this case by recognizing that the failure of written description is a factual question to be decided by a jury. Although it may not ultimately win on the issue, the patentee presented a factual argument supported by expert testimony regarding what a person of skill in the art would have recognized based upon reading the specification. What the court here ruled is that that presentation of evidence by the patentee was sufficient to defeat the defendant’s summary judgment motion of invalidity. We may eventually see a jury verdict in this case — ~10 years after the lawsuit was originally filed.

Supreme Court Patent Cases Per Decade

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The Chart below is an update of one I published earlier this year. The new chart adds in a couple of extra cases that I had previously not included and also takes account of the Supreme Court’s spate of decisions this term, including Alice v. CLS Bank (subject matter eligibility); Nautilus v. Biosig (indefiniteness); Limelight v. Akamai (divided infringement for inducement); Highmark v. Allcare (attorney fee awards in exceptional cases); Octane Fitness v. Icon Health & Fitness (attorney fee awards in exceptional cases); and Medtronic v. Boston Scientific (burden of proving infringement always falls on patentee even in licensee DJ actions). Readers should also note that the decade of 2010’s is not yet ½ completed and the Court has already granted writ of certiorari in one pending action: Teva v. Sandoz (standard of appellate review for factual findings that serve as the underpinnings for claim construction). We can expect that the trend will continue over the next several years with special focus on the new rules and procedures stemming from the America Invents Act of 2011. Note – my list largely agrees with Prof Ouellette’s

Federal Circuit: How Not to Describe the Invention

Patent,

By Dennis Crouch

X2Y Attenuators v. US International Trade Commission as well as Intel, Apple, & HP (Fed. Cir. 2014)

In this case, the Federal Circuit affirms a narrow construction of X2Y’s claim terms based upon a disavowal of scope. In the face of USPTO pleas for patentees to more particularly define claim terms, this case offers reasons for applicants to push-back against that approach.

The decision here fully and problematically supports the current patent drafting norms where the true nature and advances offered by inventions are hidden in order to avoid unduly limiting claim scope. Under standard patent drafting technique, no elements are described as necessary, critical, preferred, or even discouraged. And, “the invention” is never particularly defined or called-out. That strategy has the result of substantially decreasing the disclosure value of a patent.

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The founder of X2Y Tech was Mr. Anthony A. Anthony who passed away in 2012 while continuing to fight for royalty agreements from major manufacturers. During his life, Anthony obtained more than 100 patents covering a variety of electronic components and circuitry configurations.

X2Y’s claims require a set of electrodes but do not expressly indicate their relative configuration. The specification discusses a particular “sandwich” configuration of electrodes and the USITC found that the claims should be construed as also requiring the sandwich formation. On appeal, the Federal Circuit affirms – finding that the language of the specification requires that the claims be so limited.

Under Phillips v. AWH, the specification and prosecution history of a patent can provide insight into proper the claim interpretation. In addition to the scope-shading offered by Phillips, scope disclaimers or term definitions coming from the applicant can dramatically shift claim scope. However, the law requires that any disclaimer must be found in a clear and unambiguous statement made by the applicant.

In this case, the specification refers to the sandwich configuration as “universal to all the embodiments” and as “an essential element among all embodiments or connotations of the inventions.” The court finds these statements to represent a “clear and unmistakable disavowal of claim scope.” The standard for finding disavowal, while exacting, was met in this case.

To be clear, an important element of the decision here is that the disavowal is not tied to any particular claim language, but applies to all claims of the patent without regard to their express claim terms. In fact, the court goes even further and found that statements made in some family-member applications also apply to establish the disclaimer here.

The court notes that one mechanism for overcoming the disclaimer in a child application would be to expressly amend the claim scope so as to reject the disclaimer – of course that result may well have written description problems.

A unanimous majority opinion was filed by Judge Moore and joined by judges Reyna and Wallach. Judge Reyna also filed a separate concurring opinion discussing whether claim construction must come before determining whether a priority claim is proper.

Alice, Artifice, and Action – and Ultramercial

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Guest post by Emily Michiko Morris, Associate Professor, Indiana University Robert H. McKinney School of Law

Anyone familiar with recent Supreme Court patent jurisprudence was perhaps disappointed but certainly not surprised by the Court’s latest decision, Alice Corp. v. CLS Bank Int’l. The Court once again left many questions unanswered and failed to provide a clear rubric for identifying patentable subject matter. When viewed within the broader context, however, Alice fits nicely within what is actually a long-standing pattern in § 101 cases. IF Ultramercial v. Hulu follows this pattern after its now second GVR, the Federal Circuit may finally affirm that the internet-mediate advertising method at issue there is unpatentable subject matter.

In What Is “Technology”?, I explain that as unmethodical as patentable subject matter often seems, two surprisingly consistent concepts explain how courts identify patentable subject matter. The article dubs these concepts “artifice” and “action.”

Artifice refers to the well-recognized requirement that patentable subject matter be the product of human ingenuity, not nature. Less appreciated is the fact that artifice requires more than just changes in structural or other physical characteristics; to be patentable, a claimed invention must also function in some new, non-naturally occurring way. We can see this latter point illustrated in the purification line of cases as well as Myriad, Funk Brothers, and Chakrabarty.

Much more obscure but more relevant to Alice is the concept of action. Roughly defined, action is the requirement of active rather than passive utility through operating, behaving, performing, or otherwise actively doing something; that is to say, an invention must be “self-executing.” Inventions that display, transmit, or even store information may satisfy the action requirement, but works such as laws of nature, mathematical algorithms, and “abstract ideas” are (perceived as) merely informational or descriptive in value and therefore unpatentably inert. Moreover, as Alice explains, the abstract idea category is not “confined to ‘preexisting, fundamental truth[s].’” By definition any purely informational or descriptive content, whether naturally occurring laws of nature and mathematical algorithms or human-made financial and economic methods, fails the action requirement. As the Court in Diamond v. Diehr put it, such works simply do not “perform[ ] a function which the patent laws were designed to protect.”

To the extent different tests appear to govern natural products versus laws of nature and abstract ideas, then, artifice and action – and more importantly, the circumstances in which each are likely to be invoked – account for these differences. Artifice obviously plays its largest role in cases involving products or laws of nature, whereas action is most important in cases involving abstract ideas and laws of nature. Nonetheless, patentability under § 101 requires both artifice and action.

Both Alice and Bilski illustrate what role action plays under § 101. The methods in both Alice and Bilski involved hedging risk during business transactions by relying on intermediaries, but more importantly, both methods served solely to inform parties about when they can safely transact. The Alice and Bilski opinions describe this as the abstract concept of intermediated settlement, but really it is just information – information about risk. As such, both methods were unpatentably inactive under § 101.

And although Alice differs from Bilski in that Alice’s method was computer-implemented, the Court found both methods to be unpatentable. Like artifice, action is also a scalar characteristic. Just as artifice depends on an invention’s perceived degree of alteration from nature, action depends on an invention’s perceived degree of activity, and despite Alice’s computer-implementation, the method was still not active enough under § 101.

Indeed, both Alice and Mayo emphasize the scalar nature of patentability under § 101. Under Mayo’s two-step test, a court first determines whether a claim is directed to a law of nature, natural phenomenon, or abstract idea. As the Alice Court observed, however, all inventions are directed to one of the patent-ineligible concepts at some level. The second and pivotal step is therefore to determine whether the claim demonstrates an “inventive concept” – that is, does the claim add elements “sufficient” and “enough” to establish patentable subject matter.

And to see that a sufficient “inventive concept” requires sufficient action, one need only look at how the Court treats computer-mediated elements with regard to patentability under § 101. Computers are widely regarded as “technological,” but much computer technology is “information technology,” and computer use primarily to manipulate data or other information thus adds no patentable action. Computer implementation in Alice’s method followed exactly this pattern – as the Court noted, the computer served only to create and maintain “shadow” accounts, obtain data, adjust account balances, and issue automated instructions. Accordingly, whether Alice claimed its invention as a method, system, or medium, the invention failed to provide an adequate “inventive concept” because it did not demonstrate sufficient action.

Under an artifice-plus-action standard, then, Ultramercial’s internet-mediated advertising method fails § 101. Ultramercial claimed a method of distributing copyrighted content for free in return for viewing an advertisement. The method is purely an exchange of informational and expressive content and performs no action whatsoever, and the claim’s cursory reference to the internet does nothing to add a “sufficient inventive concept.”

This is not to say, of course, that computer-implemented methods are never patentable subject matter. The Alice Court pointed out the difference between computers used purely for information processing and computers used to effect improvements in “any other technology or technical field,” or improvements in the function of the computer itself. Diehr’s computer-assisted rubber-curing process, for example, was adequately “technological” and therefore patentable, whereas the computer-implemented methods in Benson and Flook yielded “simply a number” and were therefore unpatentable. Per the view of the patent system, information processing is simply not “technological.” Similarly, computer or storage media that are distinguishable only by their informational or expressive content alone been held unpatentable if the content has no “functional” relationship with the device. The variable role that computers and other tangible devices can thus play in an invention may be why the Supreme Court rejected the machine-or-transformation test as the sole test for methods under § 101.

And while the discussion here focuses mostly on business methods, note that the Mayo two-step test as stated in Alice covers all patent-ineligible abstract ideas, laws of nature, and even phenomena of nature – all are subject to the same requirement that a claimed invention add “enough” to constitute a patentable inventive concept. For claims directed to phenomena of nature, “enough” means artifice and meeting the age-old test of “markedly different characteristics from any found in nature.” For abstract ideas, laws of nature, mathematical algorithms, mental processes, and all other forms of information, “enough” means action and demonstrating function beyond merely informing.

As simple as artifice and action may sound, however, patentable subject matter clearly remains a difficult and ambiguous issue. The difficulty lies in the scalar quality of both artifice and action and deciding where along these spectra any given new invention falls. The requisite degree of artifice and action has also varied over time as the liberality of patentable subject matter has waxed and waned, creating yet further uncertainty. Most significantly, where the line between patentable and unpatentable lies along the spectrum is entirely unclear. There are no bright-line rules and no magical claim elements that can guarantee patentability under § 101.

The Court has often (but not always, as our host Jason Rantanen has pointed out) expressed a preference for a “functional” approach to patent law, however: that is, a preference for standards over hard and fast rules. As stated in Bilski’s rejection of the machine-or-transformation test, to do otherwise would “make patent eligibility ‘depend simply on the draftsman’s art.’” True, the artifice-plus-action standard requires courts to make many judgment calls about where along the spectrum of artifice and action any given invention must fall before it can be considered patentable technology, but standards are often vague. Besides, patent law frequently must address these kinds of line-drawing exercises. The non-obviousness, utility, enablement, and even written description requirements all force courts to make judgment calls.

Compounding the difficulty is the fact that § 101 determinations are in the end based on nothing more than intuition. As I and a number of others have noted, none of the pragmatic justifications commonly cited in support of § 101, such as preemption and disproportionality explain how patentable subject matter determinations are actually made or, more importantly, why. Thus, although artifice and action consistently appear in patentable subject matter, the combination does not necessarily reflect the most efficient or “correct” way to define patentable subject matter. Rather, the combination merely reflects an underlying intuition about what constitutes technology. (In Intuitive Patenting, a companion article to What Is “Technology”?, I argue that there simply are no more objective bases on which to make these determinations.) Unfortunately, patentable subject matter’s intuitive nature leaves courts effectively unable to specify how they reached their determinations. This often leads to language that sounds more like non-obviousness, novelty, or utility than to § 101, but in the end, artifice and action are better explanations for these otherwise perplexing references.

The Written Description of a Trade Secret

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By Dennis Crouch

New Castle Beverage, Inc. v. Spicy Beer Mix, Inc. (California App. Ct. 2014)

New Castle sells a “spice cup” known as the “Micheladas Antojitos.” The Styrofoam cups are factory-dipped in a secret spice blend that is “carefully selected to enhance the flavor of your favorite beer or cocktail .” While an employee of New Castle, Robert Montiel learned the “secrets” behind the spicy-mix-cup and later sold that information to Greg Murkijanian who began to develop a competing product known as Cheveladas. New Castle then sued for trade secret misappropriation under California law and demanded preliminary injunctive relief. (New Castle did not have any patent rights).

The trial court rejected the claim for preliminary relief and here the California appellate court affirms – finding that the trade secret mix was has not been sufficiently described in order to warrant protection.

Unlike patent rights, trade secrets need not be expressly defined on paper prior to the establishment of those rights. Rather, it is enough that a valuable and protectable secret exist. However, the law does typically require trade secret owners to provide some written description of its asserted trade secret at the point of enforcement.

The California Code of Civil Procedure provides that:

Any action alleging the misappropriation of a trade secret under the Uniform Trade Secrets Act, before commencing discovery relating to the trade secret, the party alleging the misappropriation shall identify the trade secret with reasonable particularity subject to any orders that may be appropriate under Section 3426.5 of the Civil Code.

CODE OF CIVIL PROCEDURE SECTION 2019.210. See also, Mark Lemley, The Surprising Virtues of Treating Trade Secrets as IP Rights, 61 Stan. L.Rev. 311 (plaintiff should be required to “clearly define[ ] what [trade secret] it claims to own, rather than (as happens all too often in practice) falling back on vague hand waving”).

Here, the plaintiff only generally alluded to the “process of applying a secret solution to the inner and outer surfaces adjacent the lip of a beverage cup to permit a first mixture of spices to adhere to those surfaces.” According to the courts, that general allusion is insufficient to meet the burden required by California law .

The trial court questioned whether New Castle and Monugian had any trade secrets because of the lack of details in their trade secret designation and their failure to describe their trade secrets with sufficient particularity. The court expressed concern that “what we need is a description with sufficient particularity,” and the court asked, “If I were [to] grant your [requested] preliminary injunction on the record as it stands right now, how would we ever know whether it was violated or not?” On appeal, New Castle and Monugian do not address these concerns by making a well-reasoned argument that their trade secret designation was sufficiently specific to justify an injunction prohibiting use of their claimed trade secret information. New Castle and Monugian assert in their reply brief, without citing to any evidence, that “the sufficiency of the disclosure could have been resolved by simply viewing the device” and that “had the trial court viewed the device, the boundaries of an injunction would have been easier to fashion.” They do not explain, however, how a physical inspection of the device would reveal the precise nature and description of their secrets or guide the court in crafting an appropriate injunction, nor how such an inspection would be relevant to the alleged trade secrets in the spice mixture and blending.

Obviously, without proof of a trade secret, no preliminary injunction could issue.

For those of us coming from the patent field, it easily makes-sense that someone wanting to protect information as a trade secret should be able to at least describe the information to the court in a way that is reasonably precise and complete. That burden is somewhat less than what is placed on patent applicants and is not applied until the point of enforcement. However, an important and unique element of this case is that the written description requirement noted above comes from California Civil Procedure law. It is unique to California law and not generally an aspect of the Uniform Trade Secret Act that has been adopted across the nation. See, Graves & Range, Identification of Trade Secret Claims in Litigation: Solutions for a Ubiquitous Dispute, 5 Nw. J. Tech. & Intell. Prop. 68 (2006).

California is absolutely on the right path here and some courts have caught-on: Engelhard Corp. v. Savin Corp., 505 A.2d 30 (Del.1986), DeRubeis v. Witten Technologies, Inc., 244 F.R.D. 676 (N.D.Ga.2007); Automed Techs., Inc. v. Eller, 160 F .Supp.2d 915 (N.D.Ill.2001); Dura Global Technologies, Inc. v. Magna Donnelly, Corp., 2007 WL 4303294 (E.D.Mich.2007); Del Monte Fresh Produce Co. v. Dole Food Co., Inc., 148 F.Supp.2d 1322 (S.D.Fla.2001); and Ikon Office Solutions v. Konica Minolta Business Solutions, 2009 WL 4429156, *4–*5 (W.D.N.C.2009); and Switch Comm’n Group v. Ballard, 2012 WL 2342929, *5 (D. Nev. June 19, 2012). Judge Cote wrote the following in her 2008 Sit-Up decision:

A corollary requirement of specificity for claimed trade secrets is inferable from this holding: If a particular piece of information, or a formula, is not entitled to trade secret protection because it is “so vague and indefinite” at the time it is divulged, then it cannot be granted protection as a trade secret by a court during litigation if it is “vague and indefinite.” Specificity is required at the moment of divulging so that the party to whom the secret is revealed understands the contours of the secret information and does not inadvertently or purposefully transgress its boundaries. Similarly, specificity is required before the court so that the defendant can defend himself adequately against claims of trade secret misappropriation, and can divine the line between secret and non-secret information, and so that a jury can render a verdict based on a discriminating analysis of the evidence of disclosure and misappropriation.

Sit-Up Ltd. v. IAC/InterActiveCorp., 05 CIV. 9292 (DLC), 2008 WL 463884 (S.D.N.Y. Feb. 20, 2008). See also, Big Vision Private Ltd. v. E.I.DuPont De Nemours & Co., 2014 WL 812820 (S.D.N.Y. Mar. 3, 2014); Triple Tee Golf, Inc. v. Nike, Inc., 485 F.3d 253, 265 (5th Cir.2007); SL Montevideo Tech., Inc. v. Eaton Aerospace, LLC, 491 F.3d 350, 354 (8th Cir.2007) (“[s]imply to assert [that] a trade secret resides in some combination of otherwise known data is not sufficient, as the combination itself must be delineated with some particularity in establishing its trade secret status”).

Federal Circuit: To Satisfy the Written Description Requirement, a patent “must at least describe some species representative” of the accused product.

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By Dennis Crouch

AbbVie v. Janssen Biotech and Centocor Biologics (Fed. Cir. 2014)

This decision is important in the way that it confirms a strong Post-Ariad Written Description requirement – especially with regard to genus-species claim situations. The decision also includes a key (but preliminary) discussion on the preclusive effect of PTAB decisions and also attempts to justify Federal Circuit decisions that extend beyond questions necessary for the judgment. Hal Wegner has already classified this opinion – written by Judge Lourie – as “unnecessary judicial activism.”

In 2013, Abbot Labs spun-off AbbVie as a separate company with a focus on biopharmaceutical research and a current Market Cap of $90 Billion US (ABBV). In the split, AbbVie obtained ownership of a number of valuable patents. In this case, AbbVie asserted various claims of U.S. Patent Nos. 6,914,128 and 7,504,485. These patents broadly cover antibodies that can bind to and neutralize activity of human interleukin 12 (IL-12). These antibodies have been found useful in the treatment of autoimmune disorders, including psoriasis and rheumatoid arthritis.

A key asserted claim is listed as follows:

29. A neutralizing isolated human antibody, or antigen-binding portion thereof that binds to human IL-12 and disassociates from human IL-12 with a Koff rate constant of 1×10−2s−1 or less, as determined by surface plasmon resonance.

A jury found the claim invalid for lacking a sufficient written description, lacking enablement, and also for obviousness. AbbVie appealed the §112(a) claims (WD & enablement) and, as for obviousness, AbbVie argued that that issue should never have been decided by the district court since it had already been fully litigated during the prior interference contest. On appeal, the court affirmed – agreeing that the patent was properly held invalid for lack of written description and that the collateral estoppel did not apply to the obviousness question because the interference proceeding was not sufficiently “final” at the time of the complaint filing.

Written Description: In Ariad, the Federal Circuit confirmed that the written description requirement is separate and distinct from that of enablement and that it serves an important role of ensuring that the patent is based upon an actual describable invention and that the patent scope does not overreach beyond the scope of the inventor’s contribution.

Written Description
– Genus-Species: By design, patent claims generally cover a set of a variety of potential embodiments. Likely, most claims cover an infinite variety of potential embodiments each involving a minor tweak in one way or another. The courts have never required that all potential embodiments be disclosed – however, the written description doctrine has been applied to invalidate patent claims that do not disclose a sufficient representative sample of embodiments. This is generally known as part of a genus-species problem – with the operative question here being how many different species (embodiments) of an invention must be described in a patent document before the applicant can properly claim rights to the genus of all related species. A key case on point is Regents of the University of California v. Eli Lilly & Co., 119 F.3d 1559 (Fed. Cir. 1997) (Lourie, J.) that was also affirmed in Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1355 (Fed. Cir. 2010) (en banc; Lourie, J.) (“[No] bright-line rules govern[] the number of species that must be disclosed to describe a genus claim, as this number necessarily changes with each invention, and it changes with progress in a field.”). Rather than simply listing various embodiments, the usual approach is to also describe common structural features of the species.

Here, AbbVie’s generic claim can be classified as a set of human antibodies defined functionally by their high affinity and neutralizing activity to the human IL-12 antigen. However, AbbVie did not disclose any structural features common to the members of the genus. Rather, AbbVie’s patent described only one type of structurally similar antibodies rather than antibies representative of the full scope of the genus.

In the decision, Judge Lourie focuses particularly on the alleged infringing antibodies and notes that:

[While] AbbVie’s patents need not describe the allegedly infringing [compound] in exact terms . . . [t]he patents must at least describe some species representative of antibodies that are structurally similar to [the accused compound].

Because the patent document lacked any such structural description, the court confirmed that the corresponding claims were invalid under 112(a).

Functional Patent Claims Are Inherently Vulnerable: In discussing the case, Judge Lourie was clear that one problem here is that the invention was described in terms of its function rather than its structure. Lourie writes:

Functionally defined genus claims can be inherently vulnerable to invalidity challenge for lack of written description support, especially in technology fields that are highly unpredictable, where it is difficult to establish a correlation between structure and function for the whole genus or to predict what would be covered by the functionally claimed genus.

With functional claims, the patentee must establish “a reasonable structure-function correlation” either within the specification or by reference to the knowledge of one skilled in the art. Of importance, the court is clear that functional claim limitations are patentable, but, in order to be patentable, they must be linkable to structure by PHOSITA. An interesting distinction though is that, unlike many written description issues, the linkage between the function and structure need not necessarily be found in the patent document itself.

Patent attorneys will also note that Judge Lourie’s reference to “highly unpredictable” arts is designed to refer primarily to bio-related sciences. We shall see whether the subsequent case law is so limited.

= = = =

Collateral Estoppel applies to preclude a court from re-deciding issues. Generally collateral estoppel only applies when the same issue was actually litigated and decided by a final and binding judgment in a way that was essential to the judgment. It is also generally true that collateral estoppel applies even when the first case is still pending on appeal – so long as the original court’s judgment was a final judgment being appealed.

Here, a prior interference proceeding between the parties had resulted in a determination that the AbbVie claims were not-obvious. Following the PTAB interference decision, Centocor filed a civil action under 35 U.S.C. § 146 that was pending at the time the present infringement litigation began. In the present appeal, the Federal Circuit held that the PTO decision should not be considered a “final judgment for the purposed of collateral estoppel” since the district court decision was still pending and during that case the parties have the opportunity to expand the factual record. The court left open the possibility that collateral estoppel would apply once the decision is final and that collateral estoppel may have applied if Centocor had appealed directly under § 141 instead of filing a civil action.

= = = =

Because AbbVie did not appeal the substance of the obviousness question, the collateral estoppel question fully decided the case. However, in its decision, the court offered an explanation for its reasons for going ahead and deciding the written description question.

AbbVie did not substantively challenge the district court’s holding of obviousness of the asserted claims. It might therefore be concluded that we could affirm that court’s obviousness holding and proceed no further. However, as an “inferior” court, we are well-advised to review more than one issue raised before us on appeal, lest higher authority find error in any basis for a more limited review. Cardinal Chem. Co. v. Morton Int’l, Inc., 508 U.S. 83, 97–98 (1993) (“[T]he Federal Circuit is not a court of last resort. . . . [Its] decision to rely on one of two possible alternative grounds (noninfringement rather than invalidity) did not strip it of power to decide the second question, particularly when its decree was subject to review by this Court.” (emphasis in original)); see also Wm. Wrigley Jr. Co. v. Cadbury Adams USA LLC, 683 F.3d 1356 (Fed. Cir. 2012) (affirming invalidity based on anticipation and obviousness); Verizon Servs. Corp. v. Cox Fibernet Va., Inc., 602 F.3d 1325 (Fed. Cir. 2010) (same); Union Pac. Res. Co. v. Chesapeake Energy Corp., 236 F.3d 684 (Fed. Cir. 2001) (affirming invalidity based on indefiniteness and lack of enablement). Because the written description issue constituted the principal basis of AbbVie’s appeal to this court, we proceed to consider the written description issue rather than affirm merely on any procedural defect or omission relating to the obviousness issue.

In her concurring opinion, Judge O’Malley did not sign-on to the “thoughtful written description analysis” of the majority – finding it not “necessary or dispositive ot the outcome of the case.”

Struggling with Nautilus: Patent Claims Through the Eyes of Non-Lawyer Technologists

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By Dennis Crouch

This post goes on a tangent from the recent decision in Q.I. Press Controls v. Michelle K. Lee, USPTO Chief (Fed. Cir. 2014).

Quad/Tech’s Patent No. 6,867,423 covers a visual inspection system for identifying errors in printing press operation – such as paper misalignment or poor color. The invention basically has a digital camera with a ring non-strobe LED’s surrounding the lens. The camera is pointed toward the printing press operation. The prior art included cameras with ring-LED lighting as well as the use of cameras to monitor printing press activity. However, none of the prior art references combine both of these features. In the bulk of the claims, the “printing press” element is found only something akin to a field-of-use limitation found in the claim preamble. Thus, claim 1 is directed to “[a] visual inspection system configured to be in optical communication with a substrate of a printing press, said visual inspection system comprising: . . .” However, claims 61-72 refer more expressly to the printing press linkage within the body of the claim.

The court’s opinion (as we cover in a separate post) focuses on obviousness and written description. Here, I write about indefiniteness as it relates to these preamble limitations.

Is it a Technical or a Legal Document?: A usual rule of patent claim construction is that limitations found in the preamble of a claim – especially field-of-use limitations – do not limit claim scope. However, sometimes preamble terms are limiting as the Court explained in Pitney Bowes:

If the claim preamble, when read in the context of the entire claim, recites limitations of the claim, or, if the claim preamble is ‘necessary to give life, meaning, and vitality’ to the claim, then the claim preamble should be construed as if in the balance of the claim.

Pitney Bowes, Inc. v. Hewlett-Packard Co., 182 F.3d 1298, 1305 (Fed. Cir. 1999); M.P.E.P. 2111.02. Many claim construction questions involve drawing quite fine-lines of involving coverage scope. Preamble-limitations are different because we are often talking about importing an entire limitation into the coverage that was not previously there. By examining the body of court decisions, it is possible to elucidate a set of factors helpful in determining whether a particular preamble-limitation should be scope-limiting. But this is a pretty tricky issue and I don’t think that we should assume that inventors and technology developers would understand the particular circumstances of when certain preamble-limitations are limiting. Rather, those legal-technicality questions are typically the province of patent attorneys who work with the substance of the law on a daily basis.

It turns out this is important following the Supreme Court’s recent indefiniteness decision in Nautilus. In Nautilus, the Supreme Court provided a clear statement that patent claims are technical-in-nature and designed to be read by persons-having-ordinary-skill-in-the-art. For camera technology, someone of skill in the art might be a camera designer and in the indefiniteness context the indefiniteness question is whether the claim scope would be reasonably certain to the camera designer (after considering the intrinsic evidence).

Tying this back to the issue of preamble-limitations: An ordinary camera designer would not be familiar with the law of preamble-limitations and how they would apply in this case. And, this leaves us with a several of potential results. Perhaps (1) a claim is invalid as indefinite when its scope depends upon and substantially changes according to the particularities of the preamble-limitation doctrine. (2) An alternative tact is to assume that the Supreme Court’s PHOSITA has been advised by a skilled patent attorney and thus understands the law.

Patent Reform 2014: Removing Non-Practicing Entities from the USITC’s Jurisdiction

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This is a Guest Post from attorney Ben Snitkoff who originally posted it on the blog Technically Legal. Technically Legal is a blog and podcast run by three technology-focused lawyers and their technology expert: David O’Brien, Dominik Rabiej, Ben Snitkoff, and David Lu.

Two Representatives have introduced a bill in the House aimed at preventing non-practicing entities (NPEs) from using the International Trade Commission (ITC) as a venue for patent disputes.

First, some background. The ITC is an administrative body charged with holding hearings and making adjudications regarding imports into the United States. In addition to its other duties, it may prevent the importation of items that infringe US patents, trademarks, or copyrights. However, in order to prevent importation of infringing articles, a complainant (or plaintiff) in the ITC must prove that there is a domestic industry protected by that IP.

Before 2006, injunctions were regular in patent cases in Federal District Court. If an NPE won a case against an operating company, the NPE would almost certainly get an injunction, causing substantial damage to that company. The risk of facing an injunction was a powerful force in driving operating companies to settle cases. If the alternatives are pay money or shut down, many companies would opt to pay.

After the eBay v. MercExchange case, obtaining an injunction in District Court became more difficult, particularly in cases where the plaintiff was an NPE. However, the ITC is a creature of statute, and doesn’t play by the same injunction rules. If a complainant wins a case in the ITC, they automatically get an importation ban against at least the parties found to infringe. However, in order to win the case, you must prove that there is a domestic industry in products protected by the patents the other parties infringe. The most obvious case is that the complainant makes a product protected by a patent, and the respondents are importing devices that infringe that same patent.

After revisions to the statutes that govern the ITC in 1998, complainants could prove that there was a domestic industry by showing that they made substantial investments to license other parties to their patents, or that people who have licenses also have products that practice the asserted patents.

In recent years, investigations filed by NPEs have accounted for a growing percent of investigations before the ITC, and the call for reform has been growing.

The bill introduced in the House purports to be that reform. However, whether the bill would be effective is questionable, particularly because there is no word yet of a corresponding bill introduced in the Senate.

There are several immediate problems with the bill. First, the bill attempts to modify the ability to rely on licensing by replacing the word “licensing” with:

substantial investment in licensing activities that leads to the adoption and development of articles that incorporate the patent, copyright, trademark, mask work, or design

This provision is, at best, inartfully drafted. “Articles that incorporate the patent” has no clear meaning in case law. Similarly, with “incorporate the . . . copyright.” This invites litigation over the meaning of the term when it could be more clearly stated as:

substantial investment in licensing activities that leads to the adoption and development of articles that practice the patent, embody the copyrighted work, or incorporate the trademark, mask work, or design

It is also not very clear what the drafters mean by “adoption and development” and why both actions are necessary, as long as there is “substantial investment” in those articles.

The bill proceeds to put in statute, with some modifications, some recent rule making changes in the ITC which allowed a preliminary investigation with respect to domestic industry. However, the short-description of the bill and the bill itself disagree on the timing. The 1-pager says that “once a preliminary investigation in initiated, requiring [sic] an early initial determination as to the DI standing of a complaint within 45 days.” However, the bill requires that “The Commission shall render its determination in the preliminary investigation under this paragraph not later than 45 days after the filing of the complaint.”

Typically, in ITC practice, an investigation is not initiated until thirty days after the complaint is filed. Additionally, forty-five days is less than half the time the Commission has previously allotted for these preliminary investigations. It seems virtually impossible to allow the parties to conduct discovery, submit briefing, hold a preliminary hearing, and issue a written opinion within either forty-five days of filing, or even forty-five days after a preliminary investigation was initiated.

Finally, even in cases where a complaint fully proves their case, the ITC may choose not to exclude certain articles for importation if it was not in the public interest. Those rare cases were traditionally limited to cases where public safety and welfare were endangered by an importation ban. This bill expands the public interest to include competitive conditions in the United States. This section appears to accomplish what it sets out to do, though the ITC’s Administrative Law Judges may be reluctant to hold that the importations of consumer luxury goods rise to a level of public interest so important as implicate these new guidelines.

Federal Circuit Implements Low Standard for Prima Facie Indefiniteness Rejection

Indefinite, Patent

In re Packard (Fed. Cir. 2014)

In a long-awaited decision, the Federal Circuit has affirmed the USPTO’s indefiniteness rejection of Thomas Packard’s claims under 35 U.S.C. § 112(b). However, the court refused to determine whether the “insolubly ambiguous” test is the proper standard for judging the indefiniteness of pre-issuance claims. Rather, the court merely held that a proper rejection by the USPTO (prima facie case) need not follow that standard:

We conclude that, when the USPTO has initially issued a well-grounded rejection that identifies ways in which language in a claim is ambiguous, vague, incoherent, opaque, or otherwise unclear in describing and defining the claimed invention, and thereafter the applicant fails to provide a satisfactory response, the USPTO can properly reject the claim as failing to meet the statutory requirements of § 112(b). The satisfactory response by the applicant can take the form of a modification of the language identified as unclear, a separate definition of the unclear language, or, in an appropriate case, a persuasive explanation for the record of why the language at issue is not actually unclear. On the facts before us, this holding suffices to uphold the rejection that occurred here.

The short per curiam decision is interesting in the way that it looks like an administrative law decision – finding that the USPTO has been tasked with the job of examining patent applications and must be given leeway to “make the congressionally created examination process work.”

The USPTO must be able to make the congressionally created examination process work so that it fulfills its purpose of producing patents whose claims meet the statutory standards. We earlier approved a procedural mechanism for the USPTO to use in doing this, which we refer to as the “prima facie case.” See In re Piasecki, 745 F.2d 1468 (Fed. Cir. 1984). “In the prosecution of a patent, the initial burden falls on the PTO [examiner] to set forth the basis for any rejection.” Hyatt v. Dudas, 492 F.3d 1365 (Fed. Cir. 2007). The USPTO thus meets its obligation to explain adequately the shortcomings it perceives so that the applicant is properly notified and able to respond. “Once the applicant is so notified, the burden shifts to the applicant to rebut the prima facie case with evidence and/or argument.” Id. . . .

The same approach to making the examination process work is an appropriate one for addressing the question of indefiniteness.

Here, the court does identify important differences between indefiniteness issues during prosecution (pre-issuance) as compared with post-issuance indefiniteness. In particular, because pre-issuance claims can be easily amended, it makes sense to have a system that encourages fixing claims before it is too late. Here, rather than addressing that issue through the indefiniteness standard, the court focuses on using process to provide flexibility.

We have elsewhere noted that indefiniteness rejections by the USPTO arise in a different posture from that of indefiniteness challenges to an issued patent. See Exxon Research v. US, 265 F.3d 1370 (Fed. Cir. 2001). It makes good sense, for definiteness and clarity as for other validity requirements, for the USPTO initially to reject claims based on a well-founded prima facie case of lack of clarity (in its several forms) based on the perspective of one of ordinary skill in the art in view of the entire written description and developing prosecution history. Then, if the applicant does not adequately respond to that prima facie case, to confirm that rejection on the substantive basis of having failed to meet the requirements of § 112(b).

Of course, the legal standard of indefiniteness is currently being challenged in the Nautilus case now pending before the U.S. Supreme Court. Nautilus, Inc. v. Biosig Instruments, Inc., 715 F.3d 891 (Fed. Cir. 2013), cert. granted, 82 U.S.L.W. 3195 (U.S. Jan. 10, 2014) (No. 13-369). A decision in Nautilus is expected in June 2014.

Looking at the particular facts here, Packard ignored a number of indefiniteness rejections and thus, the examiner’s rejections will stand:

The opinion included Judges O’Malley, Plager, and Taranto.

Judge Plager also filed a masterful concurring opinion that provides a more full explanation of the law of indefiniteness, the problematic shorthand of “insolubly ambiguous”, and a direct analysis of Packard’s claim terms. More on Judge Plager’s opinion in a later post.

Court to Employer: No Paper, No Assignment

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By Dennis Crouch

Peregrine Semiconductor v. RF Micro Devices (S.D. Cal. 2014) (peregrine decision)

Interesting decision here involving patent ownership. Peregrine sued RFMD for infringement of several of its patents. However, during the course of the lawsuit the parties figures out that a former Peregrine worker – Robert Benton – should have been a named inventor on the asserted patents. Rather than siding with his former bosses, Benton instead assigned his rights to the defendant RFMD. The question in the case then is whether that assignment is proper or did the patentee already hold equitable title due to Benton’s employment.

Ownership of patent rights generally begin with the notion that the inventor begins establishing patent rights at the moment of conception. “The general rule is that an individual owns the patent rights to the subject matter of which he is an inventor, even though he conceived it or reduced it to practice in the course of his employment.” Banks v. Unisys Corp., 228 F.3d 1357 (Fed.Cir.2000). At the point of conception, the right is inchoate since no patent application has been filed or patent issued. However, courts typically allow assignment of that inchoate right through a written document. That rule could be seen in contrast to the traditional rule regarding other inchoate rights, such as a possibility-of-reverter, that could not be transferred inter vivos. In the 2011 Stanford v. Roche decision, the Supreme Court reiterated the basic law of inventor’s rights and the proposition that – absent an express assignment – an employer might not own its employees inventions even if those were accomplished during the course of the employment. “In most circumstances, an inventor must expressly grant his rights in an invention to his employer if the employer is to obtain those rights.” Bd. of Trustees of Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc., 131 S.Ct. 2188 (2011) (citing United States v. Dubilier Condenser Corp., 289 U.S. 178 (1933)).

Peregrine made two arguments as to why such a transfer occurred and that it held at least equitable title to Benton’s patent rights: (1) a contractual promise to assign; and (2) the hired to invent doctrine.

No Paper à No Express Assignment: Courts have long specifically enforced contracts to assign patent rights – requiring a contracting inventor to follow through with that promise as opposed to requiring only the ordinary contract remedy of expectation damages. Peregrine’s problem is that it has no written evidence of such a contract formation. Peregrine’s business practice is to require all employees to sign an “Employment and Assignment agreement,” but Benton testified that he had no recollection of executing any such written employment agreement or assignment during his time working at Peregrine. Here, the court seemed to be swayed as well by the Patent Act’s statute of frauds that require any assignment of patent rights to be in writing.

A patent owner who seeks to assign his interest in the patent must do so in writing. 35 U.S.C. § 261; Sky Techs. LLC v. SAP AG, 576 F.3d 1374 (Fed.Cir.2009) (citing Akazawa v. Link New Tech. Int’l, Inc., 520 F.3d 1354 (Fed.Cir.2008)). Peregrine admits that it does not have any documentation of an Employment and Assignment agreement or Policy Manual signed by Benton.

Although I suspect that the court made the right decision here, the statute-of-frauds theory has some failings. First, the statute requires that assignments be in writing, but does not expressly require that contracts-promising-assignment be in writing. Further, courts can still enforce a “lost grant” despite the statute of frauds so long as there is sufficient evidence to prove that the grant existed. Here, however, that evidence appeared to be lacking.

What Exactly Was he Hired to Invent?: Peregrine also argued that Benton had a duty to assign his patent rights based upon the (Federal?) common law “hired to invent” doctrine as well as the California Labor Code § 2860. In California, the statutory provisions of § 2860 are seen as coextensive with the common law doctrine and applies when an employee is “hired to invent something or solve a particular problem.” The doctrine focuses on the specificity of the task assigned to the employee. As Don Chisum writes, “[t]he primary factor in finding an employment-to-invent is the specificity of the task assigned to the employee.” Here, the court cited a 1960s California decision distinguishing between work “narrowly directed by the employer towards the resolution of a specific problem” and work that is “generalized within a field.” With only the former creating an obligation to assign. See Banner Metals, Inc. v. Lockwood, 178 Cal.App.2d 643 (Cal.Ct.App.1960).

In this case the court found that Benton’s work appeared to be wholly within the field of semiconductor development, but generalized within that field. Importantly, the court noted that Benton worked on a variety of products during his employment and also spent time on non-inventing activities such as marketing and customer support. As such, the court ruled that Benton is unlikely to be bound by the hired-to-invent doctrine.

Hired-to-invent cases will always be somewhat squirrely since they are ordinarily raised only as a backstop when the employer’s written agreement failed and, as such, there is not likely to be written evidence particularly defining the reason why an individual was hired. This case fits that description.

Preliminary Injunction: Now, this case is only at the preliminary injunction stage. Peregrine had motioned for a preliminary injunction and that injunction was denied based upon the likelihood that Peregrine will not be able to prove its ownership. The denial also offers Peregrine the opportunity to immediately appeal this case to the Federal Circuit.

Off-the-Record Examination: Is Conventional Wisdom Wrong?

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By Dennis Crouch

Interview summaries. In a recent post, Professor Chao discussed the common practice of examiner interviews where the patent attorney discusses outstanding issues with the patent examiner. No transcript or recording of the discussion is kept, although there is a requirement that a summary of the interview and its results be written and placed within the file history. Professor Chao argues that the summaries are insufficient because all-too-often, a seemingly valid rejection simply vanishes following an examiner interview. For evidence, Chao also cites discussions at a recent Stanford Law School conference “where two prominent professors separately complained about how opaque the interview process was.”

Although Chao’s proposal has significant practicality problems, I also had the same sense of the problem — that the interview summaries create opacity in a process where transparency should rule. However, since Chao’s essay was posted, I have followed up with two “reality checks” that have raised my optimism on interviews.

First the rule — MPEP §713.04 walks through a number of elements that are required as part of an interview summary. These requirements include a fairly detailed list:

The complete and proper recordation of the substance of any interview should include at least the following applicable items:

(A) a brief description of the nature of any exhibit shown or any demonstration conducted;

(B) identification of the claims discussed;

(C) identification of specific prior art discussed;

(D) identification of the principal proposed amendments of a substantive nature discussed, unless these are already described on the Interview Summary form completed by the examiner;

(E) the general thrust of the principal arguments of the applicant and the examiner should also be identified, even where the interview is initiated by the examiner. The identification of arguments need not be lengthy or elaborate. A verbatim or highly detailed description of the arguments is not required. The identification of the arguments is sufficient if the general nature or thrust of the principal arguments can be understood in the context of the application file. Of course, the applicant may desire to emphasize and fully describe those arguments which he or she feels were or might be persuasive to the examiner;

(F) a general indication of any other pertinent matters discussed;

(G) if appropriate, the general results or outcome of the interview; and

(H) in the case of an interview via electronic mail a paper copy of the contents exchanged over the internet MUST be made and placed in the patent application file as required by the Federal Records Act in the same manner as an Examiner Interview Summary Form, PTOL-413, is entered.

The requirement is detailed, and the point is that interviews are not “off the record” even if not audio-recorded or transcribed. One problem with these requirements is that they lack an enforcement mechanism other than the examiner’s “careful review.” There is no direct way to challenge a patent issued because of an inadequate interview summary other than inequitable conduct — a defense that requires substantial proof of intent to commit fraud. Still, patent attorneys are bound by the ethics requirements to comply with the law in good faith and act with candor in all dealings with the USPTO — the result is that we should largely expect compliance with the required standards. Helping this along, the interview summary form now particularly asks applicants to describe the issues discussed, claims discussed, prior art discussed, and the interview substance.

Looking at the Interview Summaries: After reading through the rule, I then thumbed through a handful of interview summaries and have been happy to see that, in fact, the invention summaries are generally detailed pointing to the particular issues discussed and the resolution of those discussions. Now, the summaries are not as detailed as you might see in an office action rejection or subsequent response, but they do provide substantial context, meaning, and understanding.

To find these, I first downloaded the PAIR files for a random set of recently issued patents and then sorted them to find file histories where issuance/notice of allowance occurred fairly quickly following the interview since that represents the complained-of situation. The four below are simply the first for interview summaries that I looked-at:

Application No. 13/308105:

Attorney had proposed more restrictive claim language in accord with examiner’s determination of un-obvious claims over the prior art and also proposed withdrawn subject matter directed to encapsulated forms. Examiner to enter the amendment over currently pending claims with consideration to be given to a divisional for the encapsulated invention when presented. See examiner’s amendment for allowed claims of current case.

Application No. 12/875,772:

The examiner indicated amending the claims to more clearly identify “the first processor,” “the second processor”, and the “processing components” as depicted in figure 2 would overcome the prior art rejection in Key in view of Fukushima.

Application No. 13/117,944:

Prior art discussed: Bednar

Applicant called to discuss the invention and potential differences between the prior art and the disclosed invention. Applicant discussed a couple of amendments to the independent claim to attempt to overcome the current prior art. It was suggested to the Applicant to add a limitation to further define the spacer to be vibration dampening or made of a vibration dampening material in addition to the spacer extending past or beyond the cable slot toward the riser so that it is not only present in the cable slot and so it may support also add support the barrel. These limitations appear to be fully supported by the figures and do not appear to be present in the prior art reference as Bednar only shows the spacer/dampeners to be present in the cable slot portion of the barrel. These limitations will also require an updated search and therefore no determination of patentability has been made. When these amendments are filed the examiner will update the prior art search and reconsider the currently applied rejection.

Application No. 13/685,368

The examiner and applicant’s representative discussed a set of proposed Examiner’s amendments to place the application in condition for allowance. The amendments set forth clarity, proper antecedent basis, and suitable claim structure to overcome any issues with respect to 35 U.S.C. 101 and 112. The specifics of agreements reached are incorporated in the replacement listing of the allowed claims as set forth in the examiner’s amendment section of the attached notice of allowability. Consequently, the discussion and agreements reached resulted in the allowance of the instant application.

To my eyes, these interview summaries do a very good job of providing information to the world regarding the issued discussed, the conclusion drawn, and the reasoning for those conclusions. Of course, more detail is possible and may be preferable, but this small sample has gone a significant way toward changing my view of the off-the-record nature of examiner interviews.

Should the Claim Construction Standard for PTAB Post-Grant Proceedings Be Changed?

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Guest Post by Bernie Knight. Knight is a partner at McDermott Will & Emery LLP and was USPTO General Counsel from 2010-2013.

Now that the new post-grant proceedings of the America Invents Act (AIA) have been underway for over a year, some have questioned whether the claim construction standard used by the Patent Trial and Appeal Board (PTAB) is the correct one.  Currently, proposed legislation in Congress would change the claim construction standard for PTAB post-grant proceedings from the broadest reasonable interpretation to the same standard used by district courts, i.e., one having a goal of preserving validity in deference to 35 U.S.C. Sec. 282.   Of course, outside of such legislation, the USPTO has the ability to change the claim construction standard by amending the regulations and the practice guide.  The question arises, would changing the claim construction standard improve the patent system?

The answer is no. Yet, with that said, there is a certain tension between the claim construction standard and the patent owner’s ability to amend claims in the new post-grant proceedings. Recent decisions of the PTAB have made it difficult for patent owners to amend their claims. When we decided to adopt the broadest reasonable interpretation claim construction standard, we did so under the assumption that patent owners would be able to amend their claims without significant impediments. This was a sound decision for the patent system and follow-on innovation because the claims would be amended with more precise language. It would then be easier for other companies and inventors in the same technology space to design around the amended claims. Simply put, the broadest reasonable interpretation claim construction standard seems like a fair standard in light of the patent owner’s ability to amend claims. Such an approach also seems good for the patent system and follow-on innovation.

A tension arises with this trade off because of recent decisions of the PTAB requiring the patent owner to establish that the amended claims are patentable not only over the cited prior art, but also any art of which the patent owner has knowledge. See, e.g., IPR2012-00027, paper 66 (Final Written Decision). In addition, the PTAB sometimes requires that the patent owner submit an expert declaration to establish the understanding of a person of ordinary skill in the art to determine whether the new claim limitations are obvious. At the urging of many patent owners, Congress is responding by proposing legislation that would change the claim construction standard for USPTO proceedings to the same standard employed by the district courts.

The PTAB has done a terrific job handling the onslaught of petitions that have been filed since enactment of the AIA.  It is reported that the USPTO has the third busiest patent docket in the country, after the Eastern District of Texas and the District of Delaware.   I had the pleasure of working with the PTAB in getting the final AIA rules issued and the proceedings implemented within the one year period mandated by Congress. So, here comes the “but.” This is a good time for the USPTO to look at the requirements for a patent owner’s amendment to make certain that because the claims are broadly construed, the patent owner still has a reasonable opportunity to amend the claims.

The regulations that we implemented provide that amendments will be allowed if they are supported by the written description in the application, the amendments are narrowing amendments and the amendments relate to a claim and ground upon which the proceeding was instituted. See 37 C.F.R. 42.121, 42.221. The patent owner must make an initial showing that the amended claims are patentable. The question arises how much support should be required from the patent owner at the time of the motion to amend claims and how much of the burden should be placed on the petitioner to show that the amended claims are unpatentable.

The additional requirements placed on the patent owner by the PTAB make it more difficult for a proposed amendment to survive a PTAB proceeding. An alternative approach might be to only require the patent owner to show that the amended claims are patentable over the prior art cited by the petitioner and relied on by the PTAB in instituting the proceeding. If the patent owner fails to disclose prior art that the patent owner has knowledge of and that can affect the validity of the claims, there may be a future inequitable conduct defense if the patent owner brings an infringement action. In addition, there may be a basis for an Office of Enrollment and Discipline complaint if evidence that is contrary to a position being taken at the USPTO is intentionally withheld by the patent owner. With respect to the need for expert witnesses to support the amendments, a possible alternative approach would be to place the burden on the petitioner to produce the expert to support an obviousness challenge to the new amended claims. The current PTAB decisions place that burden on the patent owner up front to disprove such an argument even before it is raised. More of the burden might be placed on the petitioner to show that the amended claims are unpatentable.

If the requirements for a patent owner amendment were less onerous, then a much stronger case can be made that the broadest reasonable claim construction standard should be retained. Without the ability to reasonably amend the claims, the broadest reasonable interpretation claim construction standard seems a bit unfair to the patent owner because the claims are broadly construed with little opportunity to amend.

The views expressed here are solely those of the author and do not necessarily reflect the views of McDermott Will & Emery or its other partners.

In Memoriam: Prof. Sarah Tran

Patent

Up until last week, Sarah Tran was a law professor at SMU in Dallas where she taught patent law among other courses. She passed away this past week at the age of 34 from leukemia. A fund has been created for her two young children. [Tran Children Development Fund][Texas Lawyer Article].

In the patent field, I will remember Sarah most for her series of recent articles focusing on the power dynamic between the USPTO and the Federal Circuit. Patent Powers, 25 Harvard J. Law & Tech. 595 (2012); Administrative Law, Patents, and Distorted Rules, 80 Geo. Wash. L. Rev. 831 (2012); Policy Tailors and the Patent Office, 46 U.C. Davis L. Rev. 487 (2013). The articles collectively argue that courts have been wrong to deny substantive rule-making authority and deferential review to the USPTO; and that the new USPTO powers found in the America Invents Act (AIA) add a further exclamation point to that conclusion. These articles have strong merit and will likely serve as one focal point in upcoming administrative patent law battles.  She was also a regular contributor to the fabulous Written Description blog.

– Dennis

Square Pegs, Round Holes: Guest Post by Mark Janis and Jason Du Mont

Patent,

Guest Post by Jason J. Du Mont, Microsoft IP Fellow at the Indiana University Maurer School of Law and Mark D. Janis, Robert A. Lucas Chair of Law at the Indiana University Maurer School of Law.

In Pacific Coast Marine Windshields Ltd. v. Malibu Boats, the Federal Circuit addressed a question of first impression: whether an applicant’s actions taken during prosecution of a design patent should be available for use when determining the design patent’s scope in subsequent litigation.  The court’s answer was yes.  While the answer may be unremarkable, the court’s unusual journey from question to answer raises broader questions about the wisdom of absorbing utility patent law’s judicially-derived doctrines into design patent law.

The applicant had filed a design patent application claiming “an ornamental design of a marine windshield with a frame, a tapered corner post with vent holes and without said vent holes, and with a hatch and without said hatch, as shown and described.”  The application included eleven drawings showing windshields with various numbers of vent holes, with and without hatches. During prosecution, the examiner imposed a restriction requirement and identified five patentably distinct groups in the application: windshields having “(1) four circular holes and a hatch; (2) four circular or square holes and no hatch; (3) no holes and a hatch; (4) no holes and no hatch; and (5) two oval or rectangular holes and a hatch” (internal citation omitted):

Image 1

The applicant elected group one without traverse (which showed four circular holes and a hatch), deleted the figures not associated with this embodiment, and eventually rewrote the claim in a more conventional form, claiming “[t]he ornamental design for a marine windshield, as shown and described.”  The application issued as D555,070.  The applicant later filed a divisional directed to group three, which issued as D569,782, but there were apparently no further divisionals.

Pacific Coast subsequently asserted the ‘070 patent against Malibu Boats, which was producing a windshield having three square vent holes, as depicted below:  

Image 2

Malibu Boats moved for summary judgment of non-infringement based on prosecution history estoppel.  The district court granted the motion and Pacific Coast appealed. 

No Distinct Doctrine of Equivalents for Design Patents

Prosecution history estoppel is a limitation on the doctrine of equivalents, so before it reached the district court’s prosecution history estoppel analysis, the Federal Circuit first had to determine whether the design patent law should recognize a doctrine of equivalents.  The court concluded that for design patents, literal infringement and infringement under the doctrine of equivalents are “intertwined,” pointing to the statute (35 U.S.C. § 289, which provides a remedy when another party “applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale” (emphasis added)), and the Gorham v. White case (which holds that infringement is based on substantial similarity). 

The court could have been more forthcoming as to what it means for the two infringement standards to be intertwined, but the key takeaway is clear: the design patent infringement analysis isn’t bifurcated into a literal infringement prong requiring identicality and an equivalency prong.  It relies on a test of substantial similarity based on the design’s overall impression. The court’s analysis signals that there’s no longer a need to speak of a distinct “equivalents” concept in design patent law; concepts of equivalency are built into the substantial similarity test.

 So Why Incorporate Prosecution History Estoppel?

Having recognized that design patent law includes no distinct doctrine of equivalents, the Federal Circuit could have declared that design patent law need not incorporate the utility patent law’s prosecution history estoppel jurisprudence.   The court could have formulated a prosecution history-based limiting doctrine that was customized to connect to design patent law’s “intertwined” infringement standard.  Or, the court could have even analogized to prosecution disclaimer, a simpler concept which limits literal claim scope and avoids entanglement with the presumptions and rebuttal routes of a post-Festo prosecution history estoppel doctrine.  See, e.g., Trading Techs. Intern., Inc. v. Open E Cry, LLC,  728 F.3d 1309 (Fed. Cir. 2013) (discussing the distinction).

Instead, the court stated that the “principles” of prosecution history estoppel applied to design patents, and resolved those principles into a three-step test: “(1) whether there was a surrender; (2) whether it was for reasons of patentability; and (3) whether the accused design is within the scope of the surrender.” It then relied on Festo and other utility patent cases in applying its test, concluding that “no presumption of prosecution history estoppel could arise” because there wasn’t any showing that the third part of the test was met.

Whatever this presumption is, it surely isn’t the Festo presumption.  Festo holds that a narrowing amendment that is substantially related to patentability triggers a presumption that the applicant surrendered all territory between the original and amended claim scope with regards to the claim limitation in question.  See, e.g., Duramed Pharma. v. Paddock Labs., Inc., 644 F.3d 1376 (Fed. Cir. 2011). There isn’t any third step calling for scrutiny of the accused device.   That inquiry would only be relevant to determining the scope of the estoppel—and that only comes into issue once it’s determined that the presumption of estoppel applies, and that the presumption hasn’t been rebutted. 

The court’s approach is likely to lead to confusion in design patent cases about how much utility patent doctrine really has been borrowed.  (It may also create some confusion in utility patent cases if it’s invoked there.  Doing so would be erroneous, in our view.)  This illustrates why it’s not always so easy, or desirable, to fling utility patent doctrine into design patent law.  The court could have avoided all of these doctrinal convolutions by steering clear of prosecution history estoppel jurisprudence and either drawing on simpler analogies or developing a test specific to design patents.

Applying the Court’s Three-Step Test

The Federal Circuit’s application of its three-step test further illustrates why borrowing from prosecution history estoppel doctrine may have been a bad idea.  In addition to diverging from the Festo presumption, the court’s rhetoric slips towards the element-by-element conceptions of equivalency and estoppel that govern in utility patent law, and away from conceptions of the design’s overall impression that design patent law mandates.

The court concluded that steps one and two of its test were met.  As for step (1), the applicant had deleted drawings directed to the patently distinct two-hole and no-hole embodiments, resulting in a surrender of scope, according to the court; and, as for step (2), deletions made in response to a restriction requirement were made for purposes of patentability and thus could trigger estoppel.  As the court pointed out, however, this latter point hasn’t been resolved in utility patent law.

Nevertheless, the court decided that step (3) (whether the accused design was within the scope of the surrender) wasn’t met, and that was enough for a reversal.  The defendant had chosen not to argue that the accused three-hole design was within the scope of the patentee’s non-elected designs.  Instead, the defendant asserted that because the patentee had elected designs having four holes (in the ‘070 patent-in-suit) and zero holes (in the ‘782 divisional), the patentee had surrendered any designs having a number of holes between zero and four.  The court was not persuaded, reasoning that the notion of surrendering an entire range “does not work in the context of design patents where ranges are not claimed, but rather individual designs.  Claiming different designs does not necessarily suggest that the territory between those designs is also claimed.”  These are crucial observations for limiting the impact of prosecution history estoppel, especially since the court didn’t address any other way of rebutting this presumption.

But the court left unaddressed the key question about applying step (3): what is the standard for determining whether an accused design falls within the scope of the surrender?  Some raw notion of “colorable imitation”?  A fully elaborated substantial similarity analysis in view of the prior art as per Egyptian Goddess?  Something else?

Moreover, by framing its analysis of the designs at issue by reference to the number of holes, the court encourages a mode of analysis that rests on individual design features, rather than the design’s overall impression.   There’s a deep disconnect here between utility and design patent law.  Equivalency (and, correspondingly, prosecution history estoppel) in utility patent law is to be applied on an element-by-element basis, but that doesn’t translate neatly to design patent law.   Here, where the embodiments differed by discrete, readily-identifiable features (such as the number of holes or hatches), perhaps the presence or absence of the features dictate one’s conclusions about the design’s overall impression.  We think this will not be so easy in most cases involving visually-complex designs.

More to Come …

The prospect that restriction and election practice will give rise to estoppel in design matters has significant practical consequences.  First, the implementation of the Hague will unquestionably lead to an influx of international applications that often contain plural embodiments—either explicitly allowed or because they are filtered from registration systems.  When coupled with distinctions in the determination of scope, between offices, the USPTO can expect to receive higher volumes of applications that may necessitate restrictions.  Second, the Federal Circuit’s In re Owens decision, and the USPTO’s apparent turn towards a more aggressive application of the written description requirement in design cases, may force design patent applicants to submit applications including large sets of drawings that depict numerous implementations of a design concept.  To the extent that these implementations are deemed patentably distinct embodiments, many applicants will find themselves facing restriction requirements.

That leads to the case’s key practical point:  if courts choose to apply Pacific Marine’s estoppel rule aggressively, practitioners may need to advise their clients to expect to file more divisionals—and, consequently, face higher prosecution costs.

Patent Reform 2013: Demand Letter Transparency Act of 2013

Patent,

By Dennis Crouch

In many ways, a patent infringement demand letter is akin to a debt collection action. And, we know that debt collection is highly regulated under both Federal and State consumer protection laws. The current mood in Congress and amongst the state attorneys general is that patent demand letters should also be regulated to control their negative impact on the marketplace. The particular focus is on patentees who threaten litigation against the users of off-the-shelf technology (such as WiFi technology or Flat-Panel Screens) with little or no due diligence or pre-threat investigations. In some cases, patentees are threating litigation with no intention of actually filing suit and are hoping to use the high cost of patent litigation to drive settlement value rather than the underlying value of the patented invention.

Senators Leahy and Lee have proposed the Patent Transparency and Improvements Act (PTIA) of 2013 (S. 1720) as a quite weak form of regulation that would only address the most egregious cases of threats that operate as an unfair competition.

Now, Representatives Jared Polis (D-Co) and Tom Marino (R-Pa) have proposed their own legislation that would have more teeth. See the Demand Letter Transparency Act of 2013 (H.R.3540).  Download HR3540

H.R. 3540 includes a number of interesting features:

  • Any demand letter must include:
    • A listing of each claim being asserted and a listing of each accused device;
    • If indirect infringement is claimed, an explanation of the underlying direct infringement;
    • A description of the principle business of the party alleging infringement;
    • A list of other cases and review proceedings where the patent was asserted;
    • Identifying of any licensing term or pricing commitments associated with the asserted patent.
    • A listing of all people who have a direct financial interest in the outcome of the action, and a description of the agreements providing the legal basis for these financial interests; and
    • A statement to the recipient that 'You are not required to respond to this letter by law.'
  • A 20-demand-level threshold that raises heightened requirements, including the submission of demand information regarding the demands to the USPTO that will then be publicly available. (i.e., once a patentee sends out 20 demand letters, then it must begin complying with certain reporting requirements).
  • Failure to abide by the demand letter requirements would result in abandonment of the patent; other financial penalties; and also action by the FTC.
  • Under the statute, a demand letter is defined broadly as any "written communication directed to an unaffiliated third party stating or indicating, directly or indirectly, that the intended recipient or anyone affiliated with that recipient is or may be infringing a patent, or may bear liability or owe compensation to another because of such patent."

While the Leahy-Lee proposal is likely under-inclusive, H.R. 3540 is over-inclusive and would serve as a trap for unwary business leaders looking to license their company's technology. Two tweaks would bring focus: (1) only apply the demand letter requirements to instances where more than 20-demand letters have been sent-out; and (2) narrow the definition of demand letters so that some amount of written technology license negotiations can occur without raising the threat of abandonment (perhaps this could be done through some sort of safe-harbor).

Federal Circuit: Patent Claims Broadened During Prosecution Fail Written Description Requirement

Patent, , ,

By Dennis Crouch

Synthes USA v. Spinal Kinetics (Fed. Cir. 2013)

In a split opinion, the Federal Circuit has affirmed the jury verdict that Synthes’ asserted patent claims are invalid for lack of written description and has also affirmed the district court’s denial of SK’s request for exceptional-case attorney fees under 35 U.S.C. § 285. Judge O’Malley penned the majority opinion that was joined by Judge Prost. Judge Taranto dissented – arguing that the evidence presented at trial was – as a matter of law – insufficient to prove that the claims lacked adequate written description.

Synthes’ U.S. Patent No. 7,429,270 is directed to an intervertebral implant invented by a team of Swiss researchers. The original application was placed on file as an international application (PCT) in 2003. The U.S. national stage application was then filed in 2006. Five-years into prosecution, the patentee substantially amended the claims and added a new set of claims that were then asserted against SK. Claims 29-31. As part of these new claims, Synthes included the new terms “opening” and “plurality of openings” that had not been used previously in the patent application document. The original disclosure was directed more particularly toward grooves rather than the seemingly broader term openings. According to SK, Synthes added these limitations to the claims only after the accused SK product was on the market in a calculated attempt to shift the scope of the patent to cover SK’s improved technology. Under US patent law, that sort of intentional shifting of patent claim scope is permissible so long as the amended claim is sufficiently supported by the original disclosure. See See Liebel-Flarsheim Co. v. Medrad, Inc., 358 F.3d 898, 909 n.2 (Fed. Cir. 2004).

It is not surprising that the infringement litigation turned on the proper construction of the “plurality of openings.” As is usual for patent litigation, the patentee was working to find a “right-sized” patent that was broad enough to cover the accused product but narrow enough to still be valid. Here, the approach was to create a term “opening” in an implant-plate that was generic enough to both (1) be described by the disclosed radial plate grooves and (2) capture the elongated circle slots of the accused device. However, the jury sided with the accused infringer and found the claims invalid under the written description doctrine.

On appeal, the Federal Circuit affirmed – finding that the substantial evidence supported the jury verdict.

Sufficiency of written description requires that the original disclosure reasonably convey to PHOSITA that the inventor had possession of the claimed subject matter at the time of filing. The exact level of detail required depends upon “the nature and scope of the claims and on the complexity and predictability of the relevant technology.” See Ariad Pharms., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010) (en banc).

In affirming the jury verdict, the basically followed the precedent of Leibel-Flarsheim to find that increased breadth-of-claim was not supported by the more narrow original specification. In particular, the court noted that the original disclosure only included “groove” examples, not slots or openings on the plate. (“The written description, however, never discloses anything broader than using grooves to anchor the fiber system to the cover plates.”) That intrinsic evidence was then bolstered by expert testimony regarding the important differences between grooves, slots and other openings. Based upon this evidence, the court found substantial evidence for the jury verdict of invalidity.

[T]he jury was asked to determine whether the written description disclosure of “grooves” “reasonably convey[ed] to those skilled in the art that the inventor had possession of [an intervertebral implant that could utilize any sort of opening located anywhere on the cover plates to anchor the fiber system] as of the filing date.” Ariad, 598 F.3d at 1351. The jury did not believe so and, when all reasonable inferences are drawn in favor of the jury verdict, we must affirm that decision.

One tricky issue here is the various burdens. On review, the appellate court looks for substantial evidence (more than a mere scintilla) but the jury had to find clear and convincing evidence of invalidity.

Writing in dissent, Judge Taranto framed this case is one where the “structural claim language … is broader than the specific embodiments disclosed in the written description.” Of course, Federal Circuit precedent allows claims to be broader than the specific embodiments. See In re Rasmussen, 650 F.2d 1212, 1215 (CCPA 1981). According to Taranto, in this type of situation (alleged over-breadth), the challenger must show that the “particular difference” between the claim and the disclosure “has a material effect on whether the product or process would achieve the aims of the claims at issue, with materiality of the effect not the same as non-obviousness but related to predictability.” In other words, broader conceptions of the invention that would be predictable by PHOSITAs mind after reading the specification should be deemed to fit within the written description.

= = = = =

On the concept of attorney fees under 35 U.S.C. § 285 – the court reiterated its rule sanctions against a losing patentee can only be imposed after a showing of clear and convincing evidence of either (1) litigation misconduct; (2) bringing the litigation in subjective bad faith; or (3) bringing objectively baseless litigation. Here, the appellate court agreed with the district court that SK had failed to demonstrate clear-and-convincing evidence of any one of those three justifications for fees.

Patent Invalid for Failure to Claim “What the Applicant Regards as His Invention”

Patent,

by DennisCrouch

Juxtacomm-Texas Software v. Tibco Software, et al. (Fed. Cir. 2013)

In this case the Federal Circuit only offered one paragraph of substantive analysis:

The decisions of the district court … , construing the relevant claim language of U.S. Patent No. 6,195,662 and granting the motion for summary judgment of invalidity based on 35 U.S.C. § 112 ¶ 2, are affirmed on the basis of the district court's opinions. The language of the claims controls their construction, and the invention set forth in the claims "is not what the patentee regarded as his invention." Allen Eng'g Corp. v. Bartell Indus., Inc., 299 F.3d 1336, 1349 (Fed. Cir. 2002).

Under Allen Eng'g, section 112 ¶ 2 requires that the patent "set forth what the applicant regards as his invention and … do so with sufficient particularity and distinctness." (Section 112 has now been rewritten and § 112 ¶ 2 is renumbered as § 112(b)). In most cases, 112 ¶ 2 challenges focus on the requirement of "sufficient particularity and distinctness" in the form of a definiteness challenge. However, this case focuses on the first portion of the provision and finds that the patentee failed to claim "what the applicant regards as his invention." And, that failure results in the relevant claims being held invalid. The district court wrote:

Section 112 ¶ 2 contains two requirements: "first, [the claim] must set forth what the applicant regards as his invention and second, it must do so with sufficient particularity and distinctness, i.e., the claim must be sufficiently definite." Allen Eng'g Corp. v. Bartell Indus., Inc., 299 F.3d 1336, 1348 (Fed.Cir.2002) (internal quotes removed) (quoting Solomon v. Kimberly–Clark Corp., 216 F.3d 1372, 1377 (Fed.Cir.2000)). A claim is invalid under the first prong of 35 U.S.C. § 112 ¶ 2, when one of skill in the relevant art, reading the specification would not understand the invention set forth in a claim is what the patentee regarded as his invention.

Juxtacomm's basic problem in this case is that the plain interpretation of its asserted claims result in a system that the patent document itself does not describe.  The patent here is directed to a data transformation system and all asserted claims include some form of a "script processor for utilizing metadata from [a] metadata database to control data transformation within [a] systems interface and [to control] movement of said data into and out of a distribution system." The claim includes a limitation that a "script processor" that is designed "to control data transformation within said system interface." However, Juxtacomm's specification does not describe data transformation within the system interface. Based upon that difference, the court found an "irreconcilable contradiction" between the specification and the claims that renders the claims invalid under § 112 ¶ 2.

= = = = =

A major question left unaddressed by the court here is the overlap between, on the one hand, this § 112(b) issue of "irreconcilable contradiction" when comparing the specification with the patent claim and, on the other hand, the requirement of § 112(a) that the specification set forth a written description of the claimed invention. For its part, the district court here suggested in a footnote that the two doctrines have substantial overlap – writing that "the Court would [also] find it exceedingly difficult to preserve the validity of the ′662 in light of the requirements set forth in 35 U.S.C. § 112 ¶ 1 … [since] the specification simply does not disclose [the claimed] invention."

It appears to me that the overlap is likely complete. However, there is one important procedural distinction – that the inquiry under § 112(a) is generally seen as a question of fact while the inquiry under § 112(b) is a question of law. See Enzo Life Sciences, Inc. v. Digene Corp., 305 F.Supp.2d 406 (Fed. Cir. 2004). All things being equal, questions of law tend to be easier to resolve earlier in the case – such as on summary judgment. However, questions of law are also ordinarily more vigorously reviewed on appeal.

= = = = =

Read the CAFC Opinion and the District Court Opinion.