Funai Electric Company v. Daewoo Electronics Corp

In 2004, Funai Electric sued four Daewoo entities for infringement of its patents covering various improved video cassette recorders (VCRs). Funai is a Japanese manufacturer of AV equipment. Daewoo was a historic Korean chaebol that splintered after a financial collapse in the late 1990’s.

Successor Liability: Two of the Daewoo defendants are predecessor companies of the other two defendants. One predecessor-successor pair includes Korean companies and the other pair includes their American counterparts.  At the time of the lawsuit, the two predecessor companies had legally transferred assets to their successors but had not yet ceased operations.  About one-year into the lawsuit, the two predecessor companies stopped participating in the litigation. The district court ordered a default judgment and awarded $8 million in default damages.  Funai then asked that the successor companies be held liable for the liabilities of their predecessors. The district court applied Korean corporate and contract law to hold that there is no successor liability. 

On appeal, the Federal Circuit reversed that judgment — holding that US successor-liability law (actually, New Jersey law) should apply when determining whether the American successor company is liable for the actions of its predecessor. Under New Jersey law, a successor company is liable when the business transfer is simply a “new hat” for the business. Since that was the case here, the Federal Circuit determined that the successor is liable for the default judgment.

The 50–page opinion (including a concurrence by Judge Linn) discussed several other issues. Notably, the opinion provides another example of a prosecution amendment made for purposes “tangential to patentability” and that therefore avoids prosecution history estoppel.

Prosecution History Estoppel: Funai argued that one of its asserted claims was infringed under the doctrine of equivalents (DOE).  Daewoo countered that DOE should be limited under the doctrine of prosecution history of estoppel based on a narrowing amendment made during prosecution of the application. In particular, the patentee had cancelled claims 1 and 2 and then added limitations from those claims into a former dependant claim.  The original claim 1 did not spell-out how insulation would take place while the amended claim indicated that a bearing holder would be “made of an insulating material.”

Under the Supreme Court’s Festo decision, an amendment made during prosecution does not implicate a prosecution history estoppel bar if the “rationale underlying the amendment [bears] no more than a tangential relation to the equivalent in question.”  On appeal, the Federal Circuit recognized the amended claim set as being narrowed, but held that “no estoppel exists” because amendment relating to the insulating material was made for purposes merely tangential to the patentability of the claim. 

It is apparent that the nature of the insulating material was not a factor in the allowance of claim 4, for this aspect was not at issue during prosecution. This limitation is in the category that the Court called “merely tangential” to the prosecution, as discussed in Festo.

The court therefore affirmed the holding of infringement under the doctrine of equivalents.

Student Note Topics: Here are some suggestions for patent law focused law review topics for 2010-11 that I would like to see for my own edification. Please send me an e-mail if you choose one of these.

• Transnational Infringement: Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc. (Fed. Cir. 2010). When is a patent "on sale" or "sold" in the US? This note is likely to be published because its subject matter relates to Deep-sea Horizon. http://www.patentlyo.com/patent/2010/08/transocean-v-maersk-speeding-up-deepsea-drilling.html
• Expanding the Printed Matter Exclusion: King Pharmaceuticals, Inc. v. Eon Labs, Inc. and Elan Pharmaceuticals, Inc. at http://www.patentlyo.com/patent/2010/08/ignoring-non-patentable-elements-while-judging-novelty.html
• Hyatt v. Kappos will come out soon. That en banc decision will focus on the admissibility of new evidence when a patent applicant files a district court civil action to challenge the PTO's refusal to grant a patent. http://www.patentlyo.com/patent/2010/02/en-banc-hyatt-kappos-145.html
• Antitrust and Patent Misuse: Princo Corp. v. International Trade Commission and U.S. Philips Corp. (Fed. Cir. 2010) (en banc) (holding that an anticompetitive agreement between companies to suppress a given technology would not constitute misuse of a patent covering an alternative technology being promoted by the companies). I might consider whether antitrust law is sufficient to deter this type of alleged collusive behavior. http://www.patentlyo.com/patent/2010/08/federal-circuit-holds-line-on-patent-misuse-defense.html.
• Expanding the Scope of "Secret" Prior Art: In re Giacomini (Fed. Cir. 2010). In an important case, the Federal Circuit has expanded the scope of so-called 102(e) "secret prior art." Under the decision, a US patent or published application will be considered prior art as of the filing date of its qualifying provisional application. The case is important because of the large number of provisional patent applications being filed each year. http://www.patentlyo.com/patent/2010/07/federal-circuit-extends-the-scope-of-102e-secret-prior-art.html
• Suing Individuals for Patent Infringement: Wordtech Systems, Inc. v. Integrated Networks Solutions, Inc. at http://www.patentlyo.com/patent/2010/06/employee-and-officer-liability-for-inducing-infringement.html
• Written Description Requirement and Post-Ariad Judicial DecisionMaking. I would locate all decisions that cite the 2010 en banc decision in Ariad, write about those decisions and try to uncover whether the separate written description requirement was important to the outcome. See http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1554949
• A qualitative analysis of inequitable conduct pleading pre/post Exergen v Wal-Mart. For this study, I would uncover 100+ pleadings that allege inequitable conduct and see whether pleading style has changed. In Exergen, the CAFC emphasized the heightened pleading requirement for defenses of inequitable conduct. http://www.patentlyo.com/patent/2009/08/fraud-on-the-patent-office-federal-circuit-emphasizes-rule-9b-heightened-pleading-requirement-for-defense-of-inequitable-c.html.
• Some of the ideas from 2009 and 2008 have not been taken.

• Donate: LINK
• Check my Goal: LINK

Thank you!

Dennis Crouch
dcrouch@patentlyo.com

Stauffer v. Brooks Brothers, Inc. v. United States (Fed. Cir. 2010)

Slip Op. at 9.

The panel rejected Brooks Brothers' reliance on Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992), which denied plaintiffs standing under a citizen-suit provision, as relating only to suits against the government itself.  It also rejected the argument that Stauffer's standing depends on whether the alleged injury is proprietary or sovereign, concluding that both types of injury are sufficient to confer standing on the government, and therefore on the relator. 

Slip Op. at 15-16 (internal citations omitted).

In 2009, an Eastern District of Texas jury awarded $200 million + interest to i4i after finding that Microsoft willfully infringed the Canadian company’s patent. Judge Davis subsequently added-on $40 million for willful infringement.  The judge also issued an injunction ordering Microsoft to stop selling Word Products with the capability of using “custom XML.” That injunction was stayed by the Federal Circuit pending appeal.  On appeal, the Federal Circuit affirmed the lower court’s findings of validity, willful infringement, enhanced damages, and permanent injunctive relief. In the meantime, the USPTO has concluded its reexamination of the i4i patent — confirming that the claims at issue are patentable. In addition, Microsoft apparently patched its software to prevent someone from using custom XML in Word.

Microsoft has now moved-on to the Supreme Court — asking the high court to reject the “clear and convincing” evidence standard for proving a patent invalid. As Microsoft writes in its petition for writ of certiorari, the question is “Whether the court of appeals erred in holding that Microsoft’s invalidity defense must be proved by clear and convincing evidence” even when the prior-art was not considered by the USPTO. This is essentially the same question that Microsoft raised in its 2008 petition in z4. That petition was withdrawn after the parties settled.

The patent statute (35 U.S.C. § 282) indicates that an issued patent is “presumed valid” and that the “burden of establishing invalidity” rests with the party asserting invalidity. The Federal Circuit has held that the presumption of validity is properly realized by a clear and convincing standard.  The Supreme Court has not directly ruled on the issue. However, in KSR v. Teleflex, the Supreme Court did note that the “the rationale underlying the presumption — that the PTO, in its expertise, has approved the claim — seems much diminished” in cases where the patentee “fail[ed] to disclose” the key prior art to the PTO.

By Dennis Crouch

File Attachment: Microsoft.I4I.CertPetition.pdf (172 KB)

In a split decision, an en banc Federal Circuit has held that the non-statutory equitable doctrine of patent misuse should be narrowly applied. Here, the court held that an anticompetitive agreement between companies to suppress a given technology would not constitute misuse of a patent covering an alternative technology being promoted by the companies. Thus, the patents can still be enforced. Of course, companies following this pathway could still be liable for antitrust violations.

Princo Corp. v. International Trade Commission and U.S. Philips Corp. (Fed. Cir. 2010) (en banc)

The alleged patent misuse was associated with a CD-R/RW patent-pool arrangement between Philips and Sony. The two companies chose a particular method (Raamaker) of encoding location information on the CD to serve as the standard and then allegedly suppressed another method (Lagadec). (Both methods were covered by patents held by the companies.)

Princo argued here that creation of the patent pool licensing the Raamaker method and the suppression of the Lagadec method constituted patent misuse and should render the patents undenforceable.

Patent Misuse:     

The doctrine of patent misuse is … grounded in the policy-based desire to 'prevent a patentee from using the patent to obtain market benefit beyond that which inheres in the statutory patent right.' Mallinckrodt, 976 F.2d at 704. It follows that the key inquiry under the patent misuse doctrine is whether, by imposing the condition in question, the patentee has impermissibly broadened the physical or temporal scope of the patent grant and has done so in a manner that has anticompetitive effects. B. Braun, 124 F.3d at 1426. Where the patentee has not leveraged its patent beyond the scope of rights granted by the Patent Act, misuse has not been found. See Monsanto, 363 F.3d at 1341 ("In the cases in which the restriction is reasonably within the patent grant, the patent misuse defense can never succeed."); Virginia Panel, 133 F.3d at 869 (particular practices by the patentee "did not constitute patent misuse because they did not broaden the scope of its patent, either in terms of covered subject matter or temporally"). . . .

Given that the patent grant entitles the patentee to impose a broad range of conditions in licensing the right to practice the patent, the doctrine of patent misuse "has largely been confined to a handful of specific practices by which the patentee seemed to be trying to 'extend' his patent grant beyond its statutory limits." USM Corp. v. SPS Techs., Inc., 694 F.2d 505, 510 (7th Cir. 1982).

Recognizing the narrow scope of the doctrine, we have emphasized that the defense of patent misuse is not available to a presumptive infringer simply because a patentee engages in some kind of wrongful commercial conduct, even conduct that may have anticompetitive effects. See C.R. Bard, Inc. v. M3 Sys., Inc., 157 F.3d 1340 (Fed. Cir. 1998) ("Although the defense of patent misuse . . . evolved to protect against 'wrongful' use of patents, the catalog of practices labelled 'patent misuse' does not include a general notion of 'wrongful' use."). Other courts have expressed the same view. See Kolene Corp. v. Motor City Metal Treating, Inc., 440 F.2d 77 (6th Cir. 1971) (There is no such thing as "misuse in the air. The misuse must be of the patent in suit. An antitrust offense does not necessarily amount to misuse merely because it involves patented products or products which are the subject of a patented process." (citations omitted)); McCullough Tool Co. v. Well Surveys, Inc., 395 F.2d 230 (10th Cir. 1968) (the defense of patent misuse has been allowed "only where there had been a misuse of the patent in suit"). While proof of an antitrust violation shows that the patentee has committed wrongful conduct having anticompetitive effects, that does not establish misuse of the patent in suit unless the conduct in question restricts the use of that patent and does so in one of the specific ways that have been held to be outside the otherwise broad scope of the patent grant.

On appeal, the en banc Federal Circuit held that this case does not fit with other misuse precedent. "This case presents a completely different scenario from the cases previously identified by the Supreme Court and by this court as implicating the doctrine of patent misuse." In particular, the alleged misuse was alleged agreement to suppress "an entirely different patent that was never asserted." "Even if such an agreement were shown to exist, and even if it were shown to have anticompetitive effects, a horizontal agreement restricting the availability of Sony's Lagadec patent would not constitute misuse of Philips's Raaymakers patents or any of Philips's other patents in suit."

Reduced to its simplest elements, the question in this case comes down to this: When a patentee offers to license a patent, does the patentee misuse that patent by inducing a third party not to license its separate, competitive technology?

The court answered this question with a resounding "no" – such an action "would not fall within the rationale of the patent misuse doctrine as explicated by the Supreme Court and this court." In particular, the patent-in-suit there must be a direct connection between the patents-in-suit and the alleged misconduct.

Dissent: Judge Dyk (joined by Judge Gajarsa) wrote a 32-page dissent arguing that the patent misuse doctrine should be given teeth:

Evidently the majority thinks it appropriate to emasculate the doctrine so that it will not provide a meaningful obstacle to patent enforcement. . . . Indeed, the majority goes so far as to suggest that the misuse doctrine be eliminated entirely. I read the relevant Supreme Court cases and congressional legislation as supporting a vigorous misuse defense, clearly applicable to agreements to suppress alternative technology. The majority cabins the doctrine in contravention of this Supreme Court authority. I respectfully dissent.

There is much ado about generalist and specialty law school rankings, but it is difficult to understand why they should make much difference in hiring new, much less experienced, patent lawyers.

Technical training figures prominently too, but that is difficult to factor in. As has been discussed on this blog, two others and I published a paper concerning the correspondence between the percentage of attorneys with formal training in computer science (our focus) or engineering and the percentage of computer-based patents issued. There we argued, as I strongly believe, that the PTO’s discrimination against computer science graduates is irrational.

The paper also implies that one needs formal training in a particular art to competently draft and prosecute applications in that art. Most patent attorneys would reject the idea. Despite co-authorship, I do too.

I regard the most important technical criteria to be attorneys’ (or agents’) capacity to be educated by inventors and, as one of our alumni put it several years ago, function as a mediator between inventors and examiners. In that regard, I recall the late Robert Shaw. Prior to coming to Pierce in the mid-1970s, where he taught claim drafting and prosecution until he retired, Bob was a full-time attorney for MIT. It’s difficult to imagine that he could have had much expertise with regard to the wide range of applications drafted and prosecuted on behalf of an incredibly sophisticated faculty. Yet there is no reason to doubt the quality of his work for people there or at other universities. I do not envy those who attempt to judge such capacity from college transcripts and unrelated work experience.

Moving from technical to legal training, I regard the most important criteria to be the capacity to identify what decision makers will find critical, spot flaws in opponents’ positions and to argue effectively for their own. Regarding potential clerks, Justice Scalia famously stated, “I’m going to be picking from the law schools that . . . admit the best and the brightest, and they may not teach very well, but you can’t make a sow’s ear out of a silk purse. If they come in the best and the brightest, they’re probably going to leave the best and the brightest, O.K.?” (as quoted by Adam Liptak, On the Bench and Off, the Eminently Quotable Justice Scalia, N.Y. TIMES, May 12, 2009, at A13. If so, what’s gained from the education? There’s also risk of loss. I was struck by the observation that, “For most of the past fifty years, attending Harvard Law School was a miserable experience for the majority of its students.” Kevin K. Washburn, Elena Kagan and the Miracle at Harvard (2010). It is difficult to see how students would be better off for such an experience — unlikely to be unique.

General ranking may be useful for identifying some of the best and the brightest. But many choose schools based on a variety of other factors including cost, effects on partners, and quality of life. It would therefore seem that indicia of drive and intelligence other than that reflected in decisions of law school admissions committees deserve consideration.

In tough economic times, hiring seems more likely to turn on the skills and knowledge candidates have, rather than what they are capable of acquiring. If so, hires may be based on program rankings. But, as I have pointed out at length in Ranking Law Schools’ Special Programs, 50 IDEA 335 (2010), all rankings are suspect, whether based on the number and fame of faculty, the number of specialty courses offered or something else. In that article, at 344, I ultimately wonder whether “anyone other than a fool would favor one candidate over another based on reputations of professors neither candidate may have seen or lists of courses neither may have taken.” You might too.

Microsoft co-founder Paul Allen started Interval Research in 1992. During the 1990’s, the company filed for several user-interface related patents that were primarily intended to improve a computer user's online experience. The patents focus on what I might call “lightweight” usability ideas such as a occupying the peripheral attention of a user; organizing audio/visual for display in a browser; and alerting users to items of current interest.

When Interval closed its doors, the patents were transferred to Vulcan Patents LLC (presumably another Paul Allen company) and then to Interval Licensing which remains a Paul Allen company.

The patents are well drafted. Of course, even excellent drafting cannot cure obviousness problems. I suspect that the litigation will focus primarily on whether these inventions were obvious back when the patents were filed? In addition to arguing in court, I expect that the defendants will also appeal to the US Patent Office -- asking the agency to take a second look at the patents via reexamination.

Take claim 1 of asserted Patent No. 6,757,682 (filed in 2000) as an example.

1. A system for disseminating to a participant an indication that an item accessible by the participant via a network is of current interest, comprising:

a computer configured to

receive in real time from a source other than the participant an indication that the item is of current interest;

process the indication;

determine an intensity value to be associated with the indication and an intensity weight value, and adjusting the intensity value based on a characteristic for the item provided by the source; and

inform the participant that the item is of current interest; and

a database, associated with the computer, configured to store data relating to the item.

I don’t have any prior art on hand, but the claim sure feels obvious (in hindsight)…

Of course, the system embodied in claim 1 above represents an important core feature of services provided by all of the listed defendants. (A similar story can be told of the other asserted patents.) Thus, if the patents are valid, the damage award could be quite large.

It may be important to note that the complaint does not suggest that any of the defendants copied the invention from Paul Allen's company or that the defendants even knew about the patents before today. Of course, a patentee does not have to show copying in order to prove patent infringement and back-damages can still be available even when the infringement occurred without knowledge of the patent. (Additional punitive damages may be awarded if the infringement was willful).

It will be interesting to see how the Supreme Court’s foray into patent law over the past four-years will impact this case. I look to three important decisions:

1. In KSR v. Teleflex, the Supreme Court raised the patentability standard of nonobviousness — making it more likely that these patents will be held invalid as obvious.
2. In Bilski v. Kappos, the Supreme Court held that certain business method inventions are not patentable. Some of the claims in the patents-in-suit may be susceptible to a similar attack. However, most of the asserted claims appear to be tied closely to a technological implementation in a way that may avoid problems under Bilski.
3. In EBay v. MercExchange, the Supreme Court made it more difficult for patent holding companies (such as the plaintiff here) to obtain an injunction to stop ongoing infringement. Of course, it is unlikely that Interval actually wants to stop infringement — rather, the company is looking for a large license fee.

Final point: The vast majority of patent cases settle. Here, however, all of the parties have large amounts of cash-on-hand. In addition, some of the defendants are repeat patent infringement defendants. Those factors tend to make settlement less likely.

• Franklin Pierce Professor Tom Field freely gives-away PDF versions of his 470 page book titled Fundamentals of Intellectual Property.
• Lewis & Clark Professors Joe Miller and Lydia Loren have started their own publishing company and offer their book titled Intellectual Property Cases and Materials for a suggested fee of $30.
• Students who want a bound-book can take the document to Kinkos with a $20 bill.
• [This semester, I am teaching Patent Law and have assigned the casebook by Merges & Duffy. Although not cheap, that book has the lowest cost per pound of any on the market.]

Recent Patent Law Jobs:

• Patent Counsel (0–5 years patent experience) for HP
• Patent Agent (3–5 years patent experience) at Infinity Pharma (small molecule drug cancer treatments)

Some Recent Patent Lawsuits:

• Allure Home Creation Co. Inc. v. Maytex Mills Inc. (D.Del.) — Patent covers a shower-curtain hook.
• Simonian v. Mitchell-Vance Labs (E.D.Ill.) — False marking action against maker of “ScarAway” whose product packaging lists an expired patent.
• AGA Medical Corp. v. W.L. Gore & Associates (D.Minn) – Patent covers a device that can be inserted via a catheter for blocking leakage of an internal body organ.
• De Beers UK Limited v. Kohls & Adwar Casting (W.D.Mo.) – Design patents cover jewelry.

These results come from a survey of Patently-O readers conducted August 23–25.  In the survey, 626 responders self-identified as US patent attorneys and 116 self-identified as US patent agents.  Each was then asked to enter their “Years of hands-on technical experience before focusing on patent law (if none, enter 0).”  Responses ranged from 0–40 years.  Fewer than 1% left the field blank. 

[File Attachment: SurveyResults.v1.xlsx (58 KB)]

1. Ending the publication of pending applications [as discussed here].
2. Dramatically narrowing 35 U.S.C. 102(e) so that it only applies to patents that were subject to an international patent application.
3. Giving "priority to the examination" of applications "made by" any "institution of higher education" or any "patent holding company affiliated with such an institution.”

Other portions of the bill would create several commissions and task forces to try to figure out how to bring jobs back to the US.

The sponsor of the bill, Frank Wolf is a Republican from north-west Virginia. Co-Sponsors include Randy Forbes (Republican from south-east Virginia), Daniel Lipinski (Democrat from Chicago), Candice Miller (Republican from northern Michigan), Hal Rogers (Republican from eastern Kentucky), and Rob Wittman (Republican from eastern Virginia).

The patent amendments appear out of the blue and have no logical link to repatriation. 

The vast majority of responders self-identified as US Patent Attorneys (67%) followed by US Patent Agents (12%). 

The most common asserted area of technical background in my survey was electrical engineering (33%). 

The Clifford-Field-Cavecchi dataset (CFC) indicated a lower proportion both electrical engineering professionals and a Software/IS professionals. CFC reported on “electrical fields” and “computer fields” which should, theoretically, be broader than my “electrical engineering” and “software or information systems.” (See graph at right.) I believe that there are several explanation for my findings.  First, CFC make the assumption that an individual’s technical background is equivalent to their college major.  My survey was more flexible and allowed individuals to indicate their technical background without providing documentation from an accredited institution. Second, the CFC data is more than four-years-old. During the interim, it is likely that EE/Software experts have entered the patent law field at a greater rate than other technical experts. Finally, it may also be true that EE/Software patent professionals read Patently-O and respond to Patently-O surveys as a greater rate than do other technical experts.

Attorney and Agent Technical Experience: According to my survey, US patent agents are likely to have more technical expertise than their patent attorney counterparts.  Namely, patent agents are much more likely to hold a PhD or equivalent (38% of responding patent agents listed a PhD compared with 13% of patent attorneys) and tend have many more years of “hands-on technical experience before focusing on patent law” (patent agents indicated 10.0 years of technical experience on average compared with 4.7 years for patent attorneys; medians of 9 and 3 years respectively).  The final chart below compares patent agent and patent attorney pre-patent-law technical experience.

In an effort to promote repatriation of jobs, H.R. 5980 was introduced on July 29, 2010. The Bill proposes replacing the 18-month publication of U.S. patent applications in their entirety with a requirement that the U.S. Patent & Trademark Office (USPTO) publish only the abstract of an application until it issues as a patent. This change would detrimentally impact the ability to monitor competitors’ pending applications (provided the full text of the applications were not otherwise still available via Public PAIR, an on-line resource provided by the USPTO that supplies free access to all patent documents exchanged between patent applicants and patent examiners upon publication of an application).

The proposed shift would potentially impact companies that have come to depend on access to published patent applications as a source of lawful competitive intelligence and freedom-to-practice planning.

With knowledge that only an application’s abstract will be made available to the public, it would likely just be a matter of time before applicants become more evasive in the drafting of patent abstracts. Even today, patent abstracts rarely provide meaningful detail as to the scope of the claims of a patent application, and are limited by USPTO regulations to 150 words or less. 37 CFR 1.72(b).

While a change to the statutory term of U.S. patents and a judicially-created “prosecution laches” defense eliminated most concerns over “submarine” patents (where an applicant would keep at least one of a chain of patent applications pending before springing an issued patent on an unsuspecting party or industry), limiting public access to only the abstract of a pending application would invite a return to such undersea tactics in patent prosecution.

To the extent publishing only the abstracts of patent applications has any potential to reduce the loss of American jobs, this protection is illusory in most situations. Many patent applications on products having significant commercial potential are filed not only in the United States, but also in foreign countries (and/or internationally under the Patent Cooperation Treaty). Most foreign countries already require publication of the entire patent application 18 months from the earliest priority filing date, so publishing only the abstract in the U.S. would merely invite interested third parties to search for foreign counterpart applications published in their entirety.

For applicants concerned about foreign competitors learning of the details of their inventions prior to issuance of their patents, U.S. patent law already provides an avenue even more secure than limiting publications of applications to abstracts as proposed in H.R. 5980. So long as an applicant agrees at the time of filing a U.S. application to forego foreign patent filings in countries that publish applications 18 months after filing, the application may include a request for non-publication. The USPTO will then maintain the entire application in secrecy until the application issues as a patent. The option of foregoing foreign filings in exchange for non-publication of a U.S. patent application was proposed to assuage concerns over the disparate impact pre-grant U.S. publication might have on small businesses. This was known as the Kaptur Amendment and was initially limited to “small entities” (i.e., entities with fewer than 500 employees, universities and independent inventors), but the small entity requirement was ultimately removed.

Alternatively, 35 U.S.C. Section 154(d) provides provisional rights to obtain a reasonable royalty for infringement occurring prior to the issuance of a patent, beginning as early as the date of publication of the application. Recovery of pre-issuance royalties requires the infringed claims ultimately issuing in a patent to be substantially identical to claims of the published application and requires actual notice to the infringer of the published patent application. If claims are substantially amended during prosecution, an applicant may, for a fee, electronically request republication of the application with the amended claims. H.R. 5980 would limit provisional rights to claims of published PCT applications that later mature into U.S. patents. Ironically, this disparity would favor foreign applicants of US patents (who typically file PCT applications prior to filing a US national phase application) over US inventors who opt not to file a PCT application. Foreign patentees in some situations would effectively have a longer term to collect patent damages than their US counterparts.

Another problem with the “Patent Protection” proposal of H.R. 5980 is that it runs contrary to commitments the United States made to Japan under the U.S.-Japan Letters of Agreement signed August 16, 1994 by then-Commerce Secretary Richard H. Brown and Japanese Ambassador Takakazu Kurizama. In exchange for U.S. commitments to publish applications 18 months after filing, expand the grounds for requesting patent reexamination, and permit increased third party participation in reexaminations, Japan agreed to eliminate dependent patent compulsory licenses, end third party pre-grant oppositions, and offer an accelerated examination procedure. It took five years for mandatory publication of applications to become law with passage of the American Inventors Protection Act of 1999.

Though mandatory publication of U.S. patent applications is barely a decade old, H.R. 5980’s bid to substitute abstracts for full publication of U.S. applications would return a cloak of secrecy to some U.S. patent applications. However, for patent applications also filed abroad, the reality is that corresponding applications filed in other countries would still be published in their entirety. Given the ubiquitous access to published foreign patent applications made possible by the Internet, publishing only patent abstracts in the U.S. would not provide a meaningful obstacle to foreign companies seeking to capitalize on U.S. ingenuity.

Jeremy R. Kriegel is a partner at Marshall, Gerstein & Borun LLP in Chicago. This article expresses the views of the author, and does not necessarily reflect the views of Marshall, Gerstein & Borun or its clients.

As a continuation of the previous posts on patent attorney demographics, I looked at the status of registered US patent practitioners.  As the chart above demonstrates, more recently registered practitioners are less likely to be registered as patent attorneys. 

It is not surprising that a high percentage of recently registered practitioners are agents.  Many current patent agents will eventually become patent attorneys.  In addition, some practitioners never update their status even after becoming attorneys. However, I suspect that those factors do not explain the entire trend.

For those who do not know, an individual can become a patent agent upon passing the patent practitioner registration examination (patent bar exam).  To become a patent attorney, the individual must also be licensed to practice law in at least one US state.

• Thanks to my research assistant Lawrence Higgins (2L) for helping obtain some of this data.

Tom Field and his co-authors have been kind enough to make their patent practitioner background database available to the public [Download 5mb database]. Their data is based on the registration applications that hopeful patent attorneys & agents submitted to the PTO. Using their data, I created a few interesting charts and tables on the educational background of registered patent law professionals.  

As the top chart shows, there is a very wide educational gap between practitioners in the chemical and biological fields and those in the mechincal, electrical, and computer fields. (Here, I included MD, DVM, EdD, and other similar degrees within the PhD category). Overall, 99% of the registration registered practitioners hold a bachelors degree, 29% hold a masters degree, and 15% hold a PhD or equivalent.  Although certainly not a dime-a-dozen, patent law professionals with a biological sciences PhD are more likely to have earned that degree at Harvard than at any other school.

The chart below shows the undergraduate degrees received broadly grouped according to area of technology. 

 Notes:

• The PTO anonymized the information before releasing it.

In considering secondary indicia of nonobviousness, Chief Judge Rader tends to focus on whether a nexus exists between the presented objective evidence and the invention as claimed. Here, Judge Rader applied a similar methodology in examining the differences between the prior art and the claimed invention. (Deere).

Martin's patent covers an improved machine for splitting cardboard bundles. The patented design uses top-down pneumatic pistons to hold the bundles in place. The prior art design uses bottom-up pneumatic pistons. In arguing non-obviousness, Martin's expert pointed-out that it would not work to simply flip the prior-art design on its head. Rather, any such conversion would require extensive engineering detail. Judge Rader rejected that argument -- holding that the "engineering details" argument was irrelevant because the claims did not identify any of those details.

[Martin] relies on the testimony of Alliance’s own Director of Research and Development that, “from an engineering standpoint,” one cannot simply take the Pallmac design and flip it from bottom to top. That testimony, however, is irrelevant to the obviousness analysis. With one exception, discussed below, the claims themselves do not recite engineering details but merely require that the compliance structures be mounted to clamps that are “above” the conveyor belts.

After rejecting all of Martin's nonobviousness arguments, the appellate panel affirmed the lower court's invalidity holding.

The paper makes the legitimate argument that the PTO should allow folks with a computer science degree to register — especially with the rise in the number of inventions related to computer science. “[A]n institutional bias exists within the PTO that prevents software-savvy individuals from registering with the Office.” 

The following table is excerpted from the article and shows the top-ten institutions where patent attorneys/agents received non-law degrees.

Rank	Non-Law Degree University	Count
1	Univ. Illinois	929
2	Massachusetts Inst. Tech.	908
3	Univ. Michigan	743
4	Cornell Univ.	631
5	Univ. California Berkeley	623
6	Purdue Univ.	602
7	Univ. Texas	582
8	Univ. Wisconsin	545
9	Univ. Maryland	520
10	Univ. Washington	503

Notes:

• The article’s data is of attorneys registered as of May 2006.
• Download the article here.

• Joe Mullin at Corporate Counsel (an ALM Magazine) reports on Patent Attorney Wes Whitmeyer’s patent infringement lawsuits against Brinks Hofer, Dinsmore & Shohl; Benesch Friedlander; Edwards Angell; and WilmerHale. [Link]
• Susan Pan and Natalya Dvorson have a useful article in IPToday on how to obtain refunds from the USPTO. [Link]
• Abigail Rubenstein of Law360 has a brief article about the en banc request in Telcordia Tech v. Cisco. In that case, Cisco is asking the Federal Circuit hold that Judges (rather than Juries) should decide whether patent claims are invalid as indefinite.  Microsoft and GM filed a joint brief in support of the petition. [Link]
• Sharon Oriel has published a short article in Intellectual Asset Managament (IAM) magazine describing “a three-step process to persuade a company that it can prosper and grow through investing in intellectual asset management.” [Link]

• Amazon is looking for business-minded corporate counsel with at least 5–years of patent prosecution experience and combination of in-house and law firm experience. [Link]
• Miller Nash law firm is looking for a patent attorney (or attorneys) with 4+ years experience and a focus on medical devices and life-science related software. [Link]

Note: Although the court used the term "patented invention," it was careful to note that there remained a dispute over whether the rig described in the contract actually infringed the patents-in-suit.

The count of patents granted each week continues to remain at an all-time-high. If the trend continues for the last three months of the year, the USPTO will likely issue more than 220,000 utility patents for the year — 50,000 more than in 2009.  Of the top-ten highest historic grant-weeks, all ten came from this summer (June – August 2010).

The following chart shows the historic patent grants per year. The figure for 2010 is forecasted based on data available as of August 18, 2010.

For the article, the trio analyzed the file histories of 1,500+ utility patents issued in 2007 and compared references used in office action rejections with the list of references cited on the patent cover-pages.  The objective was to figure-out the role of applicant-cited prior-art in the examination process.

Findings: Patent examiners rarely rely on applicant-submitted prior-art when making rejections.  Only 13% of the prior art used in office action rejections was applicant-submitted (despite the fact that 74% of cited references are applicant-submitted). Generally, the study found that examiners “effectively ignored” applicant-submitted prior art regardless of how few or how many references were cited; regardless of the timing of the IDS filing; and regardless of whether the submission included an EPO search reports identifying the references as “X-references.”

Implications: The authors suggest several implications of their findings: (1) That it likely does not make sense to find inequitable conduct when an applicant withholds prior art (since the art would not have been used in a rejection anyway); (2) That the presumption of validity associated with patents may be too strong; and (3) That studies based on patent citations likely lack merit.

Notes: I have privately e-mailed Professor Lemley with several comments on the article. Patent prosecutors will not likely be surprised that US examiners tend to rely on their own search results. However, I was surprised at the extent to which they found that this occurs.  As a matter of patent office policy, I would think that some minor changes could alter these results. For instance, examiners should be given a tool for performing text-searches that are limited to submitted (and identified) prior art references.  The office may also want to educate examiners on how to read European search/examination reports.

There are several rational reasons for examiners to cite their own prior art. Because of the backlog, PCTs, and provisional applications, US examination often begins several years after the application was originally filed.  During that interim, many references become available that were not known at filing.  Thus, it is not surprising that applicants rarely cite 102(e) prior art, but examiners cite loads of it.  There is some reason to think that this “newer” prior art is probably better because of technological developments.  It may also be true that the applicant and examiner references are cited for different purposes -- namely, applicants cite references that are generally relevant to the invention while examiners are looking for references that teach each particular element in the filed claims.  A third issue is that applicants tend to modify their claims during prosecution. That modification may make their originally cited art less relevant. 

In the words of Lawrence Solum: Download it while its hot.

Dr. Baran sued MDTech for infringing his patents covering automated biopsy instruments. Soon-to-be Federal Circuit Judge Kathleen O’Malley over-saw the district court case. After construing several disputed claims, Judge O’Malley ordered summary judgment of non-infringement. On appeal, the Federal Circuit affirmed.

Means-Plus-Function: I’ll focus on an interesting question raised regarding Baran’s means-plus-function (MPF) limitation. The limitation reads as follows: a “release means for retaining the guide in the charged position.” 

35 USC 112 p6 provides for MPF claim elements expressed “as a means or step for performing a specified function.”  The statute calls for the limitation to be “construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.”  Federal Circuit precedent has logically added that the statutory “corresponding structure” are structures that perform the claimed function.

What is the Claimed Function?: Here, the Federal Circuit was asked to construe Baran’s MPF element to identify the claimed function.  MDTech argued that the claimed “release means for retaining” required a structure that exhibited both a releasing function and a retaining function.  Dr. Baran argued that the claimed function was only that of retaining.  On appeal, the Federal Circuit agreed with the lower court that the means-preamble “release” added a functional limitation to the claim element.

[T]he claim language recites both a release function and a retention function. Dr. Baran’s argument regarding the placement of the term “release” is unavailing. The relevant inquiry is whether the term at issue is purely functional. See Signtech USA, Ltd. v. Vutek, Inc., 174 F.3d 1352, 1356 (Fed. Cir. 1999) (construing “ink delivery means” to be equivalent to “means for ink delivery” because “ink delivery” was purely functional language); Al-Site Corp. v. VSI Int’l, Inc., 174 F.3d 1308, 1318 (Fed. Cir. 1999) (“[W]hen it is apparent that the element invokes purely functional terms . . . the claim element may be a means-plus-function element despite the lack of express means-plus-function language.”). In the context of the ’797 patent, the term “release” is not an idle description but a vital function to be performed by the means-plus-function element. The patent does not recite a biopsy instrument that retains indefinitely without release; rather, the contemplated function is to retain for the express purpose of producing a spring-loaded release on demand. The claim language ties both functions to the same means-plus-function element, so it is appropriate that the element be construed accordingly.

Although it is difficult to take-away lessons from claim construction decisions, a potential best-practices approach to drafting MPF claims may be to eliminate any adjectives tied directly to the “means.”  Of course, my best practice suggestion is intended for those times when you want to draft MPF claims with clarity.

By Jason Rantanen

Requiring a 90% confidence interval would inappropriately raise the bar for establishing infringement.  Adams must show that it is more likely than not that Perrigo's ANDA product will have a Cmax within the 980-125% range. Adams is not required to show that Perrigo's product will meet this requirement 9 times out of 10.

Slip Op. at 8.

Comment: This interpretation opens up a box of statistical worms, and I suspect that down the line the court may regret its venture into probability theory.  For the time being, however, it gives parties useful language to quote when attempting to prove infringement (and perhaps invalidity) via clinical results. 

On August 2, 2010, the Federal Circuit affirmed the district court’s summary judgment of patent invalidity in King Pharmaceuticals, Inc. v. Eon Labs, Inc. King Pharmaceuticals is most notable for its extension of the printed matter doctrine from objects claims that recite written texts as limitations to method claims that recite speech acts as limitations.

This Essay proceeds in three parts. Part I summarizes the King Pharmaceuticals opinion. Part II argues that the opinion was correctly decided, and it offers an original thesis about the role that the printed matter doctrine should play to enforce patentees’ disclosure obligations and preserve the deep structure of the Patent Act. Assuming that King Pharmaceuticals was correctly decided, Part III addresses the necessary next step in the continuing refinement of the printed matter doctrine. The Federal Circuit must explain why claims like the claim at issue in Prometheus Laboratories v. Mayo Collaborative Services are novel.

Cite as Kevin Emerson Collins, An Initial Comment on King Pharmaceuticals: The Printed Matter Doctrine as a Structural Doctrine and Its Implications for Prometheus Laboratories, 2010 Patently-O Patent L.J. 111 at http://www.patentlyo.com/Collins.KingPharma.pdf.

Kevin Collins is a professor of law at Washington University in St. Louis.

Guest Post: The Great Haste and Less Milling of Beer v. United States (Fed. Cir. 2010, cert. pet. pending)

By Andrew Dhuey

When patent litigators hear the term “rocket docket”, they usually think of the U.S. District Court for the Eastern District of Virginia, long-known for its dedication to accelerated justice. The term doesn’t usually call to mind the U.S. Court of Appeals for the Federal Circuit, though its docketing-to-disposition time has averaged a reasonable 9-10 months. The recent case of Beer v. United States, however, shows that it is possible to have the Federal Circuit decide your appeal on the merits and rule on your en banc hearing petition in a mere 85 days, docketing to disposition.

Beer concerns a newsworthy issue dear to the hearts of federal judges: their pay. Eight current and former federal judges seek to recover cost-of-living adjustments Congress promised federal judges in 1989, but failed to deliver in 1995-97, 1999 and 2007. While the Beer parties disagreed on whether this deprivation of COLAs was an unconstitutional diminishing of judicial pay, they all agreed that the Federal Circuit rejected this exact position in Williams v. United States (Fed. Cir. 2001). In 2002, the Supreme Court denied cert. in Williams over the dissent of Justice Breyer, joined by Justices Scalia and Kennedy.

With the issue resolved in Williams, why did these federal judges raise the same pay issue again in a 2009 U.S. Court of Federal Claims case? The answer rests not with any changes in the law, but instead with changes in the makeup of the Supreme Court. All four justices who joined the court since 2002 (Chief Justice Roberts and Justices Alito, Sotomayor and Kagan) replaced justices who voted to deny cert. in Williams. Assuming the Beer judges still have the three Williams dissenters on their side, they can win on the merits with two of the four newest justices.  

Of course, before they could even file their cert. petition, the Beer judges needed to work their way through the Claims and Federal Circuit courts. To expedite that process, the judges conceded that both the Claims court and the Federal Circuit panel were bound to follow Williams. Their purpose was to overturn Williams, which could only be done by the Federal Circuit sitting en banc, or by the Supreme Court.

On Nov. 3, 2009, thirteen days after filing their notice of appeal at the Federal Circuit, the Beer appellants filed a Petition for Initial Hearing En Banc or, in the Alternative, Motion for Summary Affirmance. Alas, the clerk’s office rejected this filing since the appellants included a copy of their trial court complaint, and that apparently is not okay. [Side note to Judge Beer, et al: none of your court clerks can hold a candle to Federal Circuit clerks when it comes to finding a way to reject a filing]. Appellants’ counsel, Christopher Landau of Kirkland & Ellis, resolved this problem the following day, and the case was then before all 12 active Federal Circuit Judges.

On Jan. 15, 2010, the court denied the petition for initial hearing en banc over the dissent of then-Chief Judge Michel, joined by Judges Lourie and Moore, and the separate dissent of Judge Newman. With that denial of the en banc petition, a three-judge panel granted the Beer appellants’ motion for summary affirmance, with a concurrence by Judge Mayer, who reiterated his previous view that Williams was wrongly decided, but that “neither Congress nor the Supreme Court has done anything in the interim that would warrant this court taking the matter up again.” The Federal Circuit had thus resolved Beer on the merits, en banc, only 85 days after docketing.  

So what, you ask? How could this possibly be of interest to you, a patent litigator? Well, you have a point – you probably won’t have occasion to stipulate at the district court or the BPIA, and on appeal, that your client is toast due to applicable, binding Federal Circuit case law. But some patent litigants are out to make a big, precedential splash (e.g. ,the ACLU in its challenges to the BRCA gene patents). Perhaps in some of these “big picture” cases, a litigant has no realistic hope on the merits, absent the overruling of a Federal Circuit panel decision. [This was not the case for the ACLU, which actually won at the district court].  Or perhaps obliterating a binding precedent would be so valuable to a litigant (e.g., a “frequent defendant”) that it would be willing to concede away weak but non-frivolous arguments on the merits in order to directly attack the harmful precedent, post haste.

Maybe you’ll never have a Beer, but in the right, highly-exceptional patent case, you might want to use the Beer strategy.

Andrew Dhuey is an appellate lawyer last seen being chased by a flower-carrying guy in a dress.

I have posted a new draft-article to SSRN entitled A Trademark Justification for Design Patent Rights. The article is currently in the editing process and will hopefully be published later this year in the Harvard Journal of Law & Technology.

As the title suggests, I argue that trademark theory offers the best modern justification for ongoing design patent rights. I suggest that design patents serve as an alternative rule of evidence for trade dress rights and are especially useful when trade dress rights are unavailable (or not yet available).

The Abstract: In a series of cases spanning more than one hundred years, courts and the US patent office have made clear that design patents are not to be justified by a fact that the newly invented ornamental design aids in distinguishing a company's product from those of its competitors. This article reverses that conclusion and argues instead that the trademark-like distinctiveness function that helps eliminate customer confusion is the most compelling policy justification for the continued protection of design patent rights in the US.  In cursory language, a number of courts have suggested that the foundation of design patents policy follows the same incentive-to-create approach of copyright and utility patent law. I tentatively reject this traditional incentive model as unlikely to be important in most situations involving ornamental designs.  Rather, I suggest the better justification for design patent doctrine lies in the notion that design patent rights serve as an alternative rule of evidence for trade dress protection.  However, design patents are not merely a parallel alternative to trade dress.  Rather, the existence of practical differences between the doctrines means that design patents rights are available in situations where trade dress protection is unavailable or uncertain.

This article presents a new set of empirical results to support the theoretical construct that design patents fill a gap in trade dress law protection.  Based on the data, I tentatively reject the oft-stated conventional wisdom that design patents are worthless for many because procurement is too slow, expensive, and difficult.  Rather, based on an analysis of the prosecution history files of a large sample of recently issued design patents, I conclude that the current design patent examination system operates as a de facto registration system.  Notably, more than ninety-eight percent (98%) of the patents in my study were issued without the Patent Office challenging their inventiveness. The dramatic rise in the number of design patents being issued indicates that designers find value in design patent protection, and a study of parallel design patent and trade dress litigation suggests that design patents are serving as a back-up or replacement for trade dress rights.

Notes:

• Download the article at http://ssrn.com/abstract=1656590 and click on “One-Click Download”.
• E-mail comments to me dcrouch@patentlyo.com.
• If you think my conclusions are obvious, it may be because I have been making similar suggestions on Patently-O for the past few years. Or else your standards are too high. :)

• Thirty Percent (30%) of all USPTO patent correspondence is now communicated electronically. Up to three e-mail addresses can be identified for each pending application. Rather than sending paper, applicants receive an e-mail notification of an office communication that can then be accessed via Private PAIR.
• The e-Office Action system can help streamline docketing. In addition, attorneys receive the communication a few days earlier and in a form that can be easily communicated to their clients.
• More Info

Blogs to Check-Out:

• Patent Math by Dave Healey of Fish & Richardson
• All Things Pros by Karen Hazzah of Thomas Kayden
• Patent Think by David Feigenbaum of Fish & Richardson

Recent Patently-O Job Posting:

• In Seattle, the Miller Nash firm is seeking a medical devices patent attorney with at least four years of IP practice experience. [Link]
• The DC Area firm McGinn IP (located in Tysons Corner, Virginia) seeks an experienced patent attorney with an electrical engineering background. [Link]
• The Denver based firm Holland & Hart is seeking a licensing and technology transactional attorneys. Potential to join any of the H&H offices (Denver, Boulder, Salt Lake, Boise). [10+ years Experience][5+ years Experience]
• Holland & Hart is also seeking an associate for their trademark enforcement practice. Must have outstanding academic record, superior writing and communication skills. [Link]
• Pfizer is seeking an Assistant General Counsel for Patents to support its Vaccines Research Unit and Center for Integrative Biology and Biotheraputics. [Ph.D. J.D. and 10+ years Experience]
• The bio/pharma company Gilead Sciences seeks a patent attorney to work with it respiratory therapeutics area in Seattle, Washington. 8+ years IP experience including in-house experience. [Link]
• Kroger is looking to hire a patent counsel to help develop a corporate patent strategy, oversee Kroger’s patent portfolio and manage liability. [Link]

Golden Hour Data Systems, Inc. v. emsCharts, Inc. and Softtech (Fed. Cir. 2010)

Opinion by Judge Dyk and joined by Judge Friedman. Dissent by Judge Newman.

After trial, Judge Ward (E.D.Tx.) rejected the jury verdict of infringement and granted JMOL for the defendants — holding that no single party had infringed each element of the asserted claims.  The lower court also held the asserted patent unenforceable due to inequitable conduct during prosecution.

Joint Infringement: EMS delivers web-based medical charting.  Softtech’s software coordinates air-flight information.  The two companies formed a “strategic partnership” and signed a distribution agreement that would allow their two products to combine as a package.  The products were then sold as a package.

Patent law doctrine allows a finding of direct infringement only when a single entity is responsible for practicing each element (or step) of a claimed invention. Federal Circuit law holds that two or more entities can avoid liability for infringement so long as (1) each entity is responsible for practicing only a subset of the claimed elements and (2) no single entity exercises “control or direction” over the entire infringing process. Here, as in other Federal Circuit cases, such as Muniauction v. Thomson and BMC v. Paymentech, the Federal Circuit continued this doctrinal line — holding that the claim against emsCharts must fail because the plaintiff presented insufficient evidence for the “jury to infer control or direction.”

In BMC, Judge Rader acknowledged that strict adherence to the “control or direction” requirement highlighted an easy avenue for avoiding infringement. “This court acknowledges that the standard requiring control or  direction for a finding of joint infringement may in some circumstances allow parties to enter into arms-length agreements to avoid infringement. Nonetheless, this concern does not outweigh concerns over expanding the rules governing direct infringement.”

Dissenting from this opinion, Judge Newman argued that, despite Muniauction and BMC, the law of joint infringement does not strictly require that a single entity have control of the operation. Rather, a “collaborative effort as here . . . is not immune from infringement simply because the participating entities have a separate corporate status.”  Here, the two companies “combined their procedures into an integrated system that met all of the limitations of claims 1, 6-8, and 15-22, thus finding joint infringement and inducement to infringe these claims. The panel majority acknowledges that the defendants in collaboration infringed the claims, but without discussion overturns the jury verdict.”

Inequitable Conduct: The court also addressed inequitable conduct. Golden Hour had failed to submit an un-dated brochure that included undisclosed information that contradicted statements made by the applicant regarding a prior art AeroMed system.

Golden Hour first suggested that it had no duty to disclose the brochure because it was not clearly prior art. The Federal Circuit rejected that argument because the duty of disclosure is not limited to prior art. As stated in the MPEP, “[t]here is no requirement that the [submitted] information must be prior art references in order to be considered by the examiner.” MPEP § 609 (2008).

On materiality, the court held that the brochure was clearly material because it contradicted a statement made by the applicant in the specification. In finding the contradiction, the court looked to English grammar.  The specification stated that the AeroMed system “does not” provide comprehensive integration. According to the court, the present-tense representation indicates the applicant’s contention that the AeroMed system will not provide comprehensive integration at any time “throughout the pendency of the application.”  (DDC Says: What is Judge Dyk thinking?).

On intent to deceive the PTO, the court held that intent could be inferred if there was evidence that either of the prosecuting attorneys actually read the brochure (but if they did not read the reference then they would only be guilty of gross negligence).  Here, the court did not find evidence that the attorneys actually read the reference and therefore vacated the inequitable conduct decision for lack of intent to deceive.  (The appellate court suggests that inequitable conduct will likely be found again on remand.).

In Dissent, Judge Newman wrote:

As for materiality, I do not share the conclusion that the undated AeroMed brochure, obtained at a trade show (the Association of Aeromedical Services) a few weeks after this patent application was filed, and found not to be invalidating prior art, was so clearly and convincingly “material to patentability” that failure to provide a copy of the brochure while quoting its front page, invalidates the patent that was found valid over the entire content of the brochure. The record does not show that the brochure was published before the Golden Hour patent application was filed. The defendants provided no documentary evidence of any publication date, and the district court did not find the brochure to be prior art; their only evidence was the “uh-huh’s” of the brochure’s author, quoted at footnote 1 of the majority opinion. 

The record showed that when the brochure came into Golden Hour’s possession at the trade show, it was given to Golden Hour’s patent attorney, who referred to it in the Invention Disclosure Statement filed with the PTO, including quotation of the cover page but not the inner page. At the trial, the full brochure was in evidence, and stressed by the defendants, and the jury found that it was not invalidating. In view of the majority’s ruling that deceptive intent was not established in the district court, and the jury’s verdict of validity despite the brochure, the charge of inequitable conduct should be laid to rest.

Briefing continues in the en banc appeal of TheraSense (Abbott) v. BD and Bayer. That case stems from a district court finding that the TheraSense patent was unenforceable due to inequitable conduct during prosecution of the patent. The Federal Circuit is taking the case as a vehicle for re-evaluating the judge-made-law of inequitable conduct. I have collected the majority of merits briefs filed thus far in the en banc rehearing.  Becton Dickinson & Bayer’s opposing brief is due October 8, 2010.  Amici-briefs in support of BD/Bayer are due the following week. Oral arguments are scheduled for November 9, 2010 in Washington DC.  (This post merely provides briefs. Analysis to follow.)

Court Decisions:

• District Court Opinion
• Original Panel Decision
• En Banc Order

Party Briefs:

• TheraSense (Abbott) Opening Brief: TheraSense.pdf (608 KB)

Amicus Brief filed in Support of TheraSense

• Sanofi-Aventis and Microsoft: AventisMicrosoft.pdf (791 KB)
• Ole Nilssen: Nilssen.pdf (1608 KB)

Amici Briefs filed in Support of Neither Party

• Apotex: Apotex.pdf (904 KB) 
• United States Patent & Trademark Office (USPTO): USPTO.pdf (770 KB)
• Intellectual Property Owners Association (IPO): IPO.pdf (213 KB)
• Federal Circuit Bar Association (FCBA): FCBA.pdf (3291 KB)
• American Intellectual Property Law Association (AIPLA): AIPLA.pdf (1036 KB)
• Biotechnology Industry Organization (BIO): BIO.pdf (4318 KB)
• American Bar Association (ABA): ABA.pdf (1501 KB)
• Boston Patent Law Association: BostonPLA.pdf (290 KB)
• Conejo Valley Bar Association: ConejoValley.pdf (385 KB)
• Houston IP Law Association: HIPLA.pdf (1424 KB)
• San Diego IP Law Association: SDIPLA.pdf (1246 KB)
• Kentucky IP Law Students: Kentucky.pdf (731 KB)
• IP Law Association of Chicago: Chicago.pdf (1080 KB)
• Washington State IP Law Association: WashingtonState.pdf (194 KB)
• Patent Attorneys from Eli Lilly: EliLilly.pdf (416 KB)
• SAP: SAP.pdf (126 KB)
• Acacia: Acacia.pdf (481 KB)
• Dolby: Dolby.pdf (128 KB)
• Professor Hricik: Hricik.pdf (102 KB)
• Professor Mammen: Mammen.pdf (616 KB)
• J&J + P&G: JJPG.pdf (1539 KB)
• 22 Patent Law Firms: PatentFirms.pdf (244 KB)
• Verizon: Verizon.pdf (151 KB)
• ECore International: ECoreIntl.pdf (1192 KB)
• EISAI Pharmaceuticals: EISAI.pdf (1490 KB)
• Pharmaceutical Research and Manufacturers of America (PhRMA): PhRMA.pdf (2425 KB)

Although the court ultimately reversed the determination of inequitable conduct based on a lack of intent, its discussion of materiality is significant because the misrepresentation at issue occurred in the patent itself, in the form of statements about a prior art reference.  Prosecutors may want to take special note of this opinion in crafting their Background of the Invention sections. 

Inequitable conduct: Materiality but no Intent
The district court's inequitable conduct determination was based on two alleged misrepresentations concerning the substance of two prior art references, Strietzel and Sleevi.  The district court found that the first misrepresentation was in the Background of the Invention section of the '608 patent, which asserted that both references proposed hardware based systems but no software to operate those systems.  Contrary to this assertion, the district court found, one of skill in the art would have understood the references to disclose software-based algorithms.¹ 

Comment: I am a troubled by the court's cursory statement on this point because of the ambiguity it creates.  These types of sweeping assertions, made without addressing the substance of the argument or citing relevant authorities, are the kinds of things that are likely to tie attorneys and judges in knots.  Indeed, the court's quotation from Rothman is particularly perplexing, as Rothman reached the opposite conclusion on similar facts.  At a minimum, one would expect the court to explain why Rothman does not apply.

Ultimately, however, the panel concluded that Cingular had failed to present clear and convincing evidence of intent to deceive.  In arriving at this conclusion the court noted that the references were ambiguous as to operating software, and the prosecuting attorney's testimony gave rise to the inference that the applicants believed that the two references did not disclose software for operating a telephone system.  Because this inference was as reasonable as the district court's inference of deceptive intent, the district erred in its finding of deceptive intent.

This would enable the agency to upgrade its outmoded computer systems and hire and train additional examiners to deal with the threefold increase in patent applications over the past 20 years. Congress should also pass pending legislation that would prohibit any more diverting of patent fees and give the office the authority to set its own fees.

. . . .

To be sure, not every patent creates a job or generates economic value. Some, however, are worth thousands of jobs — Jack Kilby’s 1959 patent for a semiconductor, for example, or Steve Wozniak’s 1979 patent for a personal computer. It’s impossible to predict how many new jobs or even new industries may lie buried within the patent office’s backlog. But according to our analysis of the data in the Berkeley Patent Survey, each issued patent is associated with 3 to 10 new jobs.

In addition, the pair suggests an “innovation tax credit” for each patent received by a small business:

To encourage still more entrepreneurship, Congress should also offer small businesses a tax credit of up to $19,000 for every patent they receive, enabling them to recoup half of the average $38,000 in patent office and lawyers’ fees spent to obtain a patent. Cost, after all, is the No. 1 deterrent to patent-seeking, the patent survey found.

For the average 30,000 patents issued to small businesses each year, a $19,000 innovation tax credit would mean a loss of about $570 million in tax revenue in a year. But if it led to the issuance of even one additional patent per small business, it would create 90,000 to 300,000 jobs.

Taken together, fully financing the patent office and creating an innovation tax credit could mean as many as 2.5 million new jobs over three years, and add up to 600,000 more jobs every year thereafter.

It only makes sense to help innovative small businesses make their way to the patent office and, once there, find it ready to issue the patents that lead to new jobs.

I have quibbles with the numbers used by the authors. However, I do think that they are on the right track in a few respects — especially with the idea that investing in incentives to innovate is a much more cost-effective and stable policy approach as compared with hiring folks to do government work.

Notes:

• Read the full Op-Ed: http://www.nytimes.com/2010/08/06/opinion/06nothhaft.html
• As academic quibbles: 
• The statement that “each issued patent is associated with 3 to 10 new jobs” cannot be derived from the Berkeley Patent Survey.  However, I don’t see that figure as unreasonable or unlikely. It would be helpful to see how the authors calculated this figure.
• In addition, it is important to recognize that patents are just one step along the road toward job creation. The idea is that patents can provide confidence and stability in business potential ventures.  That confidence and stability leads to investment and job creation.
  

When I wrote about the Doctrine of Equivalents (DOE) yesterday, I made a mental note that the Federal Circuit has not decided many DOE cases recently. To confirm this notion, I searched Westlaw for all Federal Circuit decisions that mention the “Doctrine of Equivalents.” Those results are presented below:

Notes:

• Of course, a decision's mention of the words "doctrine of equivalents" does not suggest that the appellate decision involved the DOE. However, the majority of these cases did at least involve allegations of infringement under the DOE.   
• The rise in the late 1990’s and early 2000’s revolves around Festo.
• For the past decade, the number of Federal Circuit patent infringement appeals has remained relatively steady.
  
• To find the number of reported patent decisions, I searched Westlaw’s database of Federal Circuit decisions for the terms “patent /2 (infring! valid! invalid! obvious!)”.
• These results continue the trends discussed in Allison & Lemley’s 2007 article “The (Unnoticed) Demise of the Doctrine of Equivalents.” and Lee Petherbridge’s excellent 2008 article “The Claim Construction Effect.”

For many, the most interesting aspect of this case comes at the end in Judge Dyk’s dissent. Dyk makes the case that genes should not be patentable. 

* * * *

Intervet Inc. v. Merial Limited (Fed. Cir. 2010)

In 2006, Intervet filed a complaint against Merial — asking the DC District Court for a declaratory judgment that Intervet’s Porcine Circovirus vaccine (PCV-2) did not infringe Merial’s gene patent.  Merial’s patent claims both the isolated DNA molecule of PCV-2 and a vector that contains the DNA.  The application includes a listing of several different sequences that all fall within the PCV-2 category. 

Although Intervet also uses a PCV-2 vector. The DJ plaintiff argues that its DNA molecule is different from the one described and deposited by Merial. The district court agreed — holding that the Intervet product was only 99.7% homologous to the closest deposited sequence and therefore outside of the literal claim scope. The district court also applied prosecution history estoppel to rejected Merial’s claims of infringement under the doctrine of equivalents (DOE). On appeal, the Federal Circuit reversed on both claim construction and DOE.

Genus Not Limited to Examples: The asserted claim includes a limitation of a “PCV-2” DNA molecule. The District Court limited that term to cover only the DNA sequences that were deposited with the PTO. On appeal, the Federal Circuit rejected that construction as overly limiting. Rather, the appellate panel held that the deposited sequences serve as a representative sample of PCV-2 DNA sequences. “Sequences are representative of the scope of broader genus claims if they indicate that the patentee has invented species sufficient to constitute the genera. Here, the deposited strains are representative species of the larger ‘type II’ genus, where the genus is identified and claimed as the invention.” In describing its invention, the specification noted that the PCV-2 desposited sequences had a 96% homology and that the invention did not cover PCV-1 sequences that at most shared 76% homology with the deposited sequences.  Taking those quantitative limits from the specification, the Federal Circuit ruled that the claimed PCV-2 molecule should be construed as being “about 96% or more homologous with the … sequences disclosed in the present specification, and about 76% or less homologous with the [disclosed PCV-1] sequence.”

What is Equivalents are Surrendered by a Narrowing Amendment: An accused infringer may still be liable even though its product does not literally infringe every element of an asserted patent claim.  Under the doctrine of equivalents (DOE), a patentee may be able to provie infringement by showing that one or more elements of the accused product are equivalent to elements in the claim.  Under the limiting doctrine of prosecution history estoppel (PHE), a patentee will ordinarly be estopped from claiming DOE over a claim element that was narrowed during prosecution. (A narrowing amendment made for purposes related to patentability creates a rebuttable presumption that estoppel applies.)

Here, one of Merial’s original claims was directed to a markush group of open reading frames (ORFs) that had been described in the specification as “ORFs 1–13.”  In an initial rejection, the examiner suggested that the limitation could refer to ORFs of non-PCV-2 molecules. Although the patentee argued that the claim was clear, it still added the limitation that the claimed ORFs were PCV-2 ORFs.  The Federal Circuit held that this was a narrowing amendment substantially related to patentability. That narrowing amendment therefore created a presumption that the patentee had surrendered all equivalents that relate to non-PCV-2 ORFs. The district court erred, however, in holding that this narrowing amendment would estopp the the patentee from asserting that the claims cover a non-claimed PCV-2 ORF as an equivalent. “Such a draconian preclusion would be beyond a fair interpretation of what was surrendered. The rationale for the amendment was to narrow the claimed universe of ORFs down to those of PCV-2, and bore only a tangential relation to the question of which DNA sequences are and are not properly characterized as PCV-2.”

Dissenting-in-part, Judge Dyk discussed his argument that the claims directed toward the isolated form of a naturally occurring gene are likely unpatentable under 35 U.S.C. § 101.

[T]he isolated DNA claim raises “substantial issues of patentable subject matter under 35 U.S.C. § 101. . . . Neither the Supreme Court nor this court has directly decided the issue of the patentability of isolated DNA molecules. Although we have upheld the validity of several gene patents, none of our cases directly addresses the question of whether such patents encompass patentable subject matter under 35 U.S.C. § 101. . . .

I think that such patents do in fact raise serious questions of patentable subject matter. The Supreme Court’s recent decision in Bilski v. Kappos has reaffirmed that “laws of nature, physical phenomena, and abstract ideas” are not patentable. No. 08-964, slip op. at 5 (U.S. June 28, 2010) (quoting Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980)); Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948). Just as the patentability of abstract ideas would preempt others from using ideas that are in the public domain, see Bilski, slip op. at 13, so too would allowing the patenting of naturally occurring substances preempt the use by others of substances that should be freely available to the public. Thus, “a new mineral discovered in the earth or a new plant found in the wild is not patentable subject matter. Likewise, Einstein could not patent his celebrated law that E=mc2; nor could Newton have patented the law of gravity.” Chakrabarty, 447 U.S. at 309. These aspects are properly conceptualized as representing a public domain, “free toall men and reserved exclusively to none.” Id. (quoting Funk Bros., 333 U.S. at 130) (quotation mark omitted).

In Funk Brothers, the Court considered the patentability of a mixture of several naturally-occurring species of bacteria. 333 U.S. at 128-31. The patented product was a mixture of bacteria used in agricultural processes, enabling plants to draw nitrogen from the air and convert it for usage. The inventor discovered that certain strains of the bacteria were effective in combination with one another, and contrary to existing assump-tions, did not exert mutually inhibitive effects on each other. The Court held that the invention was not pat-entable subject matter. Id. at 131. The inventor “did not create a state of inhibition or of non-inhibition in the bacteria. Their qualities are the work of nature. Those qualities are of course not patentable.” Id. at 130. The Court furthermore noted:

The qualities of these bacteria, like the heat of the sun, electricity, or the qualities of metals, are part of the storehouse of knowledge of all men. They are manifestations of laws of nature, free to all men and reserved exclusively to none. He who discovers a hitherto unknown phenomenon of na-ture has no claim to a monopoly of it which the law recognizes. If there is to be invention from such a discovery, it must come from the applica-tion of the law of nature to a new and useful end.

Id.

In Chakrabarty, the Court considered whether a human-made microorganism is patentable subject matter under section 101. 447 U.S. at 305. The microorganism in question was a bacterium that had been genetically engineered to break down crude oil. In concluding that the man-made bacteria was patentable, the Court observed that the claim “is not to a hitherto unknown natural phenomenon, but to a nonnaturally occurring manufacture or composition of matter.” Id. at 309. The Court went on to distinguish Funk Brothers on the ground that the Chakrabarty bacterium possessed “markedly different characteristics from any found in nature. . . . His discovery is not nature’s handiwork, but his own; accordingly it is patentable subject matter under § 101.” Id. at 310 (em-phasis added).

Thus, it appears that in order for a product of nature to satisfy section 101, it must be qualitatively different from the product occurring in nature, with “markedly different characteristics from any found in nature.” It is far from clear that an “isolated” DNA sequence is qualita-tively different from the product occurring in nature such that it would pass the test laid out in Funk Brothers and Chakrabarty. The mere fact that such a DNA molecule does not occur in isolated form in nature does not, by itself, answer the question. It would be difficult to argue, for instance, that one could patent the leaves of a plant merely because the leaves do not occur in nature in their isolated form.

The service is still in limited release, but up to 200 Patently-O readers can sign-up for the service using the following link: http://news.priorsmart.com/patent-complaints/web-invites/patentlyo-HASJY12.

See a sample complaint here: http://news.priorsmart.com/static/files/example-alert-20100803.html.

There are several other similar services:

• Justia (Free, but does not provide the actual complaint or patent number listing);
• Docket Navigator (Great service and includes same-day summaries of many decisions, but not free). Normally, their service runs about $30 per month. Darryl Towell who runs Docket Navigator just e-mailed with an offer to Patently-O readers: “Patently-O readers who send an email to patentlyo_offer@docketnavigator.com before September 1, 2010, will receive the discounted rate of $14.95/month. That discounted rate is for new subscribers and will be good through the end of 2011.”
• LexMachina (Great service, and is free for some).

Let us know (in the comments) if you have other good sources for this info.

Patent Tools: While I’m talking about patent information tools, I should also mention the new patent analysis tools offered by the company Patent Calls. http://tools.patentcalls.com/.  Interestingly, the tools were developed by well known patent plaintiff Erich Spangenberg (and his team).  Spangenberg then sold them to Patent Calls who decided to offer them as a free service. (Patent Calls makes its money by providing more detailed analysis of patents, patent infringement, and patent markets).  One feature that I enjoy from the Tools is that, for each patent, the main-page provides a direct link to additional information such as maintenance fee payments, certificates of correction, and patent family information. For published applications, the Tools also do a mark-up comparing the published claims with the issued claims.  Spangenberg’s team created a pretty good algorithm for automatically finding similar patents. However, at this point, that feature is not available for free. Of course, I should be careful in distinguishing Patent Calls “Tools” from another free service PatTools. http://www.pattools.com/.

In a May 2010 decision, Judge Sweet of the Southern District of New York issued an opinion that would render most gene patents invalid for failing to claim patentable subject matter under 35 U.S.C. 101.  That high-profile case is now on an appeal, and has the potential of shifting US patent law both by its in-court and out-of-court impact.

Even before filing a substantive brief on the merits, the declaratory judgment plaintiffs (AMP & ACLU) filed a motion asking that Chief Judge Rader recuse himself from potentially hearing the decision. AMP argues that the Chief’s public statements regarding this case “have created an appearance of partiality that calls into question his ability to engage in impartial legal analysis.”

Notably, while attending a BIO meeting, Judge Rader reportedly responded to a comment by Professor Whealan (and former Rader clerk) that there are no real “legal standards for making [a Section 101] decision. . . [U]sing Section 101 to say that the subject matter is unpatentable is so blunt a tool that there is no neutral step to [draw] a line here [between what is and is not patentable].”  In Judge Rader’s construct, the lack of a clear legal standard means that the decision will then be based on “politics. It’s what you believe in your soul, but it isn’t the law.”  In another conference (this time at Fordham Law School), AMP’s attorney Dan Ravicher was speaking and Chief Judge Rader asked Ravicher a question “hinting at disagreement” with Ravicher’s position.  In particular, the Ravicher-Rader colloquy was quoted as follows:

Ravicher (pointing to a bottle of water): "Was that [purification] sufficient intervention between what God gave us ... and what man created to merit a patent?"

Chief Judge Rader: "How many people have died of water pollution over the course of human events? Probably billions."

Two responses to the ACLU motion have been filed. 

First, Myriad responded that the cited statements by Chief Judge Rader “do not even suggest how Chief Judge Rader might vote, were he a member of the panel assigned to decide this case.”

The second filing is by the Federal Circuit Bar Association (FCBA) as amicus. The FCBA argues strongly that Judges should be encouraged to participate in educational conferences such as the BIO meeting and Fordham Law School.  The FCBA makes the important point that “Just as it is important that judges recuse themselves when the rules require it, it is equally important that judges refuse to recuse themselves where the rules do not require it.”  Granting recusal on the thin-evidence presented here would have the two primary effects of (1) discouraging sitting Federal Circuit judges from participating in public conversations and (2) encourage more strategic recusal motions.  The FCBA motion was a joint effort by former Deputy Solicitor General Thomas Hungar (Gibson Dunn) and the oft-paired team of Ed Reines & Amber Rovner (Weil Gotshal).

This particular motion may never be decided. Since the panel has not yet been assigned for this appeal, the CAFC has refrained from deciding the motion. In a letter to AMP, the court indicated that “[i]n the event that Judge Rader is assigned, the motion will be transmitted to him.” 

Documents:

• File Attachment: RecusalMotion.pdf (449 KB)
• File Attachment: RecusalResponse.pdf (566 KB)
• File Attachment: Recusal.FCBA.pdf (888 KB)

Mundi Fomukong is a co-inventor of the patents-in-suit. At the time of the invention, Fomukong was married to Fonda Whitfield. Sometime after the first patents issued, Fomukong and Witfield divorced. Later, the second patent issued; Fomukong formed Enovsys; and he (along with his co-inventor) assigned their rights to the new company. Later, when Enovsys sued Sprint-Nextel, the defendant challenged the case on standing. Sprint's argument is based on the rule that any patent infringement actions must be brought jointly by all co-owners of the patent. Specifically, Sprint argued that Ms. Whitfield retained an interest in the patent rights even after the divorce and, without Ms. Whitfield's support, Enovsys lacked standing. (Ms. Whitfield assigned her rights to Sprint.)

In the US, patent ownership rights are primarily controlled by state laws. At times, patent attorneys are called to understand their local laws of contracts, employment, inheritance, and (here) divorce. Thus, in deciding this case, the court looked first to the law of California -- the site of the marriage, invention, and divorce.

California is a "community property" state and “all assets acquired during a marriage are presumptively community property.” In their divorce filings, however, Fomukong and Whitfield checked the box next to the statement that “We have no community assets or liabilities.” Without citing specific California law, the Federal Circuit held that that the final divorce decree coupled with this box-checking stripped Whitfield of her community property rights in the patent. "[A]lthough the final divorce decree was silent as to particular property, it nevertheless adjudicated the parties’ rights with respect to that property because it was based on an uncontested complaint which alleged that there was no community property."

With the issue of ownership settled, the court then affirmed the lower court's claim construction and infringement verdict.

By Dennis Crouch

The Federal Circuit offers some clues to its post-Bilski patentable-subject-matter jurisprudence, but leaves that fight for another day.  Instead, the court held the claims anticipated by explicitly ignoring novel claim elements.

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King Pharmaceuticals, Inc. v. Eon Labs, Inc. and Elan Pharmaceuticals, Inc. (Fed. Cir. 2010)

King’s patent claims a method of increasing oral bioavailability of the muscle relaxant metaxalone by putting metaxalone in food eaten by the patient. Claim 21 includes a step of “informing the patient that the administration [of the drug with food] results in an increase [in absorption].  This step likely has two benefits: (1) increasing patient compliance with the drug regimen and (2) taking advantage of any placebo effect that may exist.  The drug metaxalone itself was already a known muscle relaxant well prior to King’s 2001 application date.

Patenting Methods of Treatment: The district court held claim 21 invalid under 35 U.S.C. 101 based on the Federal Circuit’s machine-or-transformation test from Bilski. On appeal, the Federal Circuit rejected the lower court analysis — noting that when examined “as a whole”, the claim requires treatment and “methods of treatments ‘are always transformative when a defined group of drugs is administered to the body to ameliorate the effects of an undesired condition.’” (quoting Prometheus Labs., Inc. v. Mayo Collaborative Serv., 581 F.3d 1336, 1346 (Fed. Cir. 2009), cert. granted and vacated, 78 U.S.L.W. 3254 (U.S. June 29, 2010)).

Although the appellate panel rejected the lower court’s Section 101 analysis, it stopped short of providing any positive position on the patentability of medical treatment methods — presumably saving that battle for the pending remands of Prometheus and Classen. 

Instead, the appellate court held that a Section 101 decision was not necessary because the claims of interest are anticipated under Section 102.

Ignoring Non-Patentable Elements: Here, the novelty question is interesting because the “informing” step was not specifically identified in the prior art. On appeal, the Federal Circuit held that claiming a step of “informing someone about the existence of an inherent property” of a method cannot render the claim patentable. “[I]n light of our holding that the method of taking metaxalone with food to increase the drug’s bioavailability, as recited in claim 1, is not patentable, it readily follows that claim 21, which recites the same method with the sole additional step of informing the patient about this increase in bioavailability, is not patentable.” 

In its decision, the court ties its case to the precedential foundation of “printed matter” cases that have barred the patentability of known products by the inclusion of printed matter describing the product.

In some ways, this decision may be seen as reviving the suggestion found in the now vacated 2007 In re Comiskey decision. There, the court suggested that, during nonobviousness analysis, any portion of an invention that constitutes nonstatutory subject matter will be considered de facto obvious.

Panel: Judges Bryson, Gajarsa, and Prost. Authored by Judge Gajarsa. 

By Jason Rantanen

Double-patenting issues arise when two commonly owned applications cover the same or similar inventions.  The issues in this appeal revolved around an earlier patent claiming a composition of matter and describing a method for using that composition, and a later patent claiming that method of use. 

Both of the patents in this case, Patent No. 4,808,614 (the '614 patent) and Patent No. 5,464,826 (the '826 patent) relate to gemcitabine, the active ingredient of Lilly's Gemzar® product.  The '614 patent claims both gemcitabine itself, as well as a method of using it to treat viral infections.  In addition, the '614 patent's specification discloses using gemcitabine to treat cancer.  The '826 patent claims a method treating cancer comprising administering a therapeutically effective amount of gemcitabine.  The difference was important: the '614 patent expired on May 15, 2010, while the '826 patent does not expire until November 7, 2012.

Note: The applications leading to both the '614 and '826 patents were filed on the same day, December 4, 1984.  The '614 was a continuation-in-part of application No. 473,883 ("the '883 application"), which did not disclose using gemcitabine to treat cancer.  That information was added as part of the continuation-in-part. 

After filing an Abbreviated New Drug Application ("ANDA") for a generic version of Gemzar®, Sun Pharmaceuticals, sought a declaratory ruling that the '826 patent was invalid and not infringed.  Lilly counterclaimed for infringement of the '826 and '614 patents.  The '614 patent was not at issue in this appeal.

Obviousness-type double patenting applies
Applicants are barred from obtaining multiple patents covering the same invention by the doctrine of double patenting.  There are two types of double patenting: statutory double patenting, which prohibits a later patent from covering the identical invention, and obviousness-type double patenting, which prevents a later patent from covering a slight variation of an earlier patented invention.

The court also rejected Lilly's argument that the specification of an earlier application should have been consulted, as opposed to the specification of the '614 patent.  Drawing upon its claim construction precedent, the court noted that the specification is relevant to determining the coverage of the claims, which is at the heart of the obviousness-type double patenting analysis.  The court further noted that "consulting the specification of the issued patent, as opposed to an earlier version, is consistent with the policy behind double patenting," which rests "on the fact that a patent has been issued and later issuances of a second patent will continue protection, beyond the date of expiration of the first patent of the same invention or an obvious variation thereof."  Slip Op. at 14-15.

• Behind the Scenes: A Day in the Life of David Kappos
• An Interview with Former Chief Judge Paul Michel: Part I; Part II; Part III
• Interview with Chief Judge Rader
• Interview with Billionaire Inventor Gary Michelson
• Interview with Professor Doug Lichtman
• Nice work Gene!
  

Patent Commissioner Bob Stoll’s recent comments prompted this revisit of the data. I briefly discuss those comments below.

The first chart (above) shows Requests for Continued Examination filings (and earlier forms of CPA and R129 filings) as a percentage of the total number of non-provisional patent applications filed each year.  The denominator here does not include RCE filings but does include continuations and CIP filings. Thus, the calculation is: (Number of RCEs)/(Number of Non-Provisional Filing). The denominator does include plant & reissue applications, but those numbers are negligible.  You may note that my calculations differ from those offered by the USPTO because the USPTO counts an RCE filings as a new application.

The second chart (below) provides raw numbers for the number of non-provisional applications and RCE filings for each year. Again, the non-provisional number does not include RCEs.  A second caveat is that the figures for FY2010 are estimated by extrapolating from current data that goes through June 2010.

The USPTO under Director Kappos and Commissioner Stoll have been focusing some attention on ways to reduce RCE filings. Specifically, the office believes that a good percentage of RCE filings are classifiable as “unnecessary” because they involve issues that should have been resolved beforehand.  In a recent guest post on the Kappos-Blog, Commissioner Stoll pointed to several initiatives that are designed – in part – to reduce the number of unnecessary RCE’s filed:

• Redesign of the examiner count system that reduces an examiner’s reward when an applicant files an RCE.
• Redesign of SPE performance plan to focus on “actions per disposal.”
• Focus on interviews (projected to be up 60% over last year) as a way to understand important issues early-on.
• Slowing examiner response to RCEs (because of this “RCE inventory has gone from 17,209 as of July 1, 2009, to 35,569 as of July 1, 2010”).

The USPTO appears to continue to be very open to ideas and suggestions that can help the PTO improve their process in ways are sensitive to applicant costs and rights. On that point, I am still working through the 230+ reader comments on my recent query asking Why do Applicants File So Many Requests for Continued Examination?

In TheraSense v. BD, an en banc Federal Circuit is reconsidering the doctrinal structure that it has created to handle allegations of inequitable conduct. Abbott (the patent holder) has filed its opening merits brief arguing that the current law of inequitable conduct over-extends its proper bounds.  In an eloquent opening statement, Abbott writes:

The question in this case is not whether to reform the doctrine of inequitable conduct, but whether to restore it—to its origins in Supreme Court precedent; to the confines Congress intended in the 1952 Patent Act; to the standards this Court articulated en banc in Kingsdown Medical Consultants v. Hollister, Inc., 863 F.2d 867 (Fed. Cir. 1988); and to the standards that govern in other areas of law. This Court has expanded the inequitable conduct doctrine well beyond those boundaries, and the result has been an “ongoing pandemic” of inequitable conduct charges. Taltech Ltd. v. Esquel Enters. Ltd., 604 F.3d 1324, 1335 (Fed. Cir. 2010) (Gajarsa, J., dissenting). The expansion has rendered valuable patents unenforceable based on minor omissions far afield from the doctrine’s purposes. And it has converted the federal courts into roving commissions to enforce standards of conduct before the PTO without regard to whether the alleged infractions had any impact. . . .

Supreme Court precedent and the legal principles embodied in the Patent Act reserve those extreme consequences for the most egregious circumstances—cases where a party “obtained its patent by fraud.” Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172, 175, 176 (1965). As this Court has recognized, the Supreme Court has held patents unenforceable “only in cases of ‘fraud on the Patent Office.’” Star Scientific, 537 F.3d at 1365-66 (quoting Hazel–Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 250-51 (1944)); see Larson Mfg. Co. of S.D., Inc. v. Aluminart Prods. Ltd., 559 F.3d 1317, 1343 (Fed. Cir. 2009) (Linn, J., concurring). A party seeking to invalidate a trademark or copyright based on misconduct before the agency must prove it was the product of fraud. The standard should be no less stringent here.

Briefs Filed Thus Far:

• Abbott Brief on the Merits — File Attachment: TS.EnBanc.TheraSense.pdf (608 KB) (discussed above).
• ABA Amicus Brief in Support of Neither Party — File Attachment: TS.EnBanc.ABA.pdf (1501 KB) (Arguing that the standard should resemble requirements for common law fraud).
• Dolby Labs. Amicus Brief in Support of Neither Party — File Attachment: TS.EnBanc.Dolby.pdf (128 KB) (intent to deceive should not be found where a proper prior art search by the examiner could have uncovered a withheld the reference).
• Professor Hricik Amicus Brief in Support of Neither Party — File Attachment: TS.EnBanc.Hricik.pdf (222 KB) (arguing, inter alia, that the Patent Act provides important guidance for the law of inequitable conduct and unenforceability).
• Verizon Amicus Brief in Support of Neither Party — File Attachment: TS.EnBanc.Verizon.pdf (151 KB) (arguing that judges should be free to consider equitable remedies that are less severe than holding the entire patent unenforceable).

This information comes from Professor Christian Mammen (visiting at Hastings). Mammen is drafting a brief in TheraSense that argues three primary points: (1) that materiality should focus on patentability issues, and should defer to the PTO's Rule 56; (2) that there should be an increased focus on the clear and convincing standard of proof for intent (with corollaries that "should have known" and "gross negligence" should be abolished, and the Star Scientific "single most reasonable inference" test is a good starting point); and (3) if there is a sufficient increase in the required thresholds for both materiality and intent, the balancing step (which is often ignored in any event) may be abandoned.  Legal academics or others potentially interested joining his brief should contact him at mammenc@uchastings.edu.

Cite as Robert A. Matthews, Jr., When Multiple Plaintiffs/Relators Sue for the Same Act of Patent False Marking, 2010 Patently-O Patent L.J. 95 [File Attachment: Matthews.FalseMarking.pdf (234 KB)].

by Dennis Crouch

In the wake of the Supreme Court ruling in Bilski v. Kappos, Mayo has petitioned the Court of Appeals for the Federal Circuit to sit en banc to re-hear its statutory subject matter challenge to the Prometheus  patents. (U.S. Patents 6,355,623 and 6,680,302).

The Prometheus Claims are directed toward an iterative approach of dosing an active drug ingredient (6-thioguanine).  Most of the claims are centered around three ordered-steps of:

1. administering a dose of the drug to the subject;
2. determining the amount of the drug in the subject’s blood; and
3. re-calibrating the drug dosage.

A broader claim (claim 46 of the ‘632 patent) does not require the administering step of claim 1 above.

In its 2006 decision, The district court held the Prometheus patents invalid under Section 101 — holding that the claims preempt all practical uses of a natural phenomenon.  On appeal, the Federal Circuit reversed that decision — that the claims satisfied the Machine-or-Transformation test. Namely, the Federal Circuit panel held that the steps of “administering a drug” and “determining the level of 6-thioguanine” were both sufficiently transformative of “a particular article into a different state or thing.”

The transformation is of the human body following administration of a drug and the various chemical and physical changes of the drug’s metabolites that enable their concentrations to be determined. Because the claimed methods meet the transformation prong under Bilski, we do not consider whether they also meet the machine prong. . . . [C]laims to methods of treatment . . . are always transformative when a defined group of drugs is administered to the body to ameliorate the effects of an undesired condition. . . .

[T]he determining step, which is present in each of the asserted claims, is also transformative and central to the claimed methods. Determining the levels of 6-TG or 6-MMP in a subject necessarily involves a transformation, for those levels cannot be determined by mere inspection. Some form of manipulation, such as the high pressure liquid chromatography method specified in several of the asserted dependent claims or other modification of the substances to be measured, is necessary to extract the metabolites from a bodily sample and determine their concentration.

Preemption: The original appellate panel addressed preemption issue somewhat indirectly — holding that the claims could not preempt a fundamental principle because they passed the machine-or-transformation test: “Regardless, because the claims meet the machine-or-transformation test, they do not preempt a fundamental principle.”

Following its Bilski decision, the Supreme Court vacated the Federal Circuit’s Prometheus holding and remanded for further proceedings. 

Not Concentric: Some have described the Supreme Court’s Bilski v. Kappos holding as situated somewhere between the broad State Street decision and the narrow machine-or-transformation test. (See Joe Mullin’s article quoting Mark Lemley as saying “Now we're halfway in between.”).  However, Supreme Court’s vacatur in Prometheus suggests that there are cases that would have been patentable under the strict machine-or-transformation test but that are no longer patentable.  (Otherwise, the court could have simply denied Mayo’s petition for a writ of certiorari as it did in Fergusun.) 

Roadmap: The machine-or-transformation test offers a clue to the existence of Section 101 qualifying subject matter. However, Prometheus may well present a situation where the claims satisfy MoT, but fail because of their preemptive nature. In its brief, Mayo argues that the three-justice opinion dissenting from the dismissal (DIG) provides a “roadmap” for this case.

"We conclude that it was a matter of common sense to combine the Down patent with the prior art barbell locks in order to arrive at the invention claimed in the ’115 and ’426 patents, and that one of ordinary skill in the art would have had a reasonable expectation of success in doing so."

Moreover, secondary considerations of nonobviousness—considered here by the district court—simply cannot overcome a strong prima facie case of obviousness.

"[b]ecause there is no way to determine from a general verdict on obviousness the specific findings of fact made by a jury on the factual questions underlying its verdict, the court in examining the first part of the obviousness question is left to infer whether substantial evidence existed from which the jury could have made the factual findings necessary to support the verdict. Here, the majority examined the record and after considering the factual inferences concluded that support was lacking and that the claims at issue would have been obvious as a matter of law."

During the summer, the Federal Circuit is a relatively quiet place.  The judges often take their non-sitting months during this time, and the pace of opinions tends to drop.  Thus, for the next few weeks, I'll mostly be posting summaries of cases that issued this past spring and early summer.  The two cases discussed below deal with a relatively minor — but still important — issue in the pharmaceutical and medical device context: patent term extensions based on extensive regulatory review periods. 

Note: Enantiomers are molecules that are mirror images of one another.  Due to their different orientation, they have different properties.  A racemate is a composition consisting of equal parts of the two enantiomers.  The '407 patent covered a substantially purified form of one of the two enantiomers (levofloxacin) in the racemate ofloxacin.  There was no dispute that levofloxacin was separately patentable from ofloxacin.

On appeal, the Federal Circuit agreed with the district court, concluding that there was no basis for challenging the established FDA and PTO practices of treating enantiomers as different drug products and rejecting Lupin's legislative intent argument.

Photocure v. Kapos
Photocure involved a contrary determination by the PTO: that the drug product at issue was not a different "active ingredient," and thus the patentee was not entitled to an extension.  In Photocure, the product at issue ("MAL") was a methyl ester of a compound ("ALA") that had previously been approved for the same therapeutic use.  While the FDA treated MAL as a new drug, requiring a full approval process, the PTO rejected the extension based on its conclusion that § 156(f)(2) does not mean the product approved by the FDA, but rather the "active moiety," which it concluded was the same in both MAL and ALA.

Both the district court and Federal Circuit disagreed.  In rejecting the PTO's interpretation of 156(f)(2), the Federal Circuit reasoned that § 156 focuses on the product that is subject to approval by the FDA, not the underlying pharmacological mechanism. Furthermore, Skidmore and Chevron deference standards did not apply because the statute was not unambiguous and the PTO's interpretation was neither persuasive nor consistent. 

Note: although not the primary focus of the opinon, the panel also concluded that the PTO was wrong even under its  "active moiety" interpretation as the biological properties of ALA and MAL are indisputably different.

* * * *