“Does 35 U.S.C. § 271(f) apply to method claims, as well as product claims?”

Once available from the court, I’ll make the oral argument file available on the casepage for the en banc appeal. (I’ll post my notes on the oral argument once prepared).

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Somewhat suprisingly, there was an interesting patent-related exchange between Congressman Elijah Cummings (D-Maryland) and Chairman Bernanke. Congressman Cummings asked

“Is there anything you see that the Obama Administration might be able to do, or that we might be able to do, to encourage innovation….?”

In response, Chairman Bernanke offered several policy-related ideas, including detailed thoughts on the “controversial” idea of encouraging immigration of highly skilled scientists and engineers to the United States.

He also mentioned patent reform, albeit with measured indifference:

“There are reviews and thinking about the patent laws and those sorts of things to make those more effective.”

That quote is the entirety of Chairman Bernanke’s patent-related response to the innovation question posed by Congressman Cummings. There’s not much that can be read into this brief statement, other than the fact that Chairman Bernanke is aware of the patent reform issue and its relationship to the policy issue of “encouraging innovation.” Chairman Bernanke is obviously a highly-skilled Congressional witness and was visibly careful in his choice of words on this issue. Nothing relating to a position of the Federal Reserve, the Obama Administration, or Chairman Bernanke can be inferred from this brief remark.

You can view Chairman Bernanke’s response to “the innovation question” in the CNBC video below - it starts at about the 10 minute mark.

Hat tip to a Twitter friend @TechLaw_Elman for pointing me to Chairman Bernanke’s comments.

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But something that happened the day before the editorial hit the press is very surprising, perhaps even to Google.

On Tuesday, the Patent and Trademark Office granted US Patent No. 7,525,207 to the company for a Water-Based Data Center.

Big deal, right?

That’s what I thought, until a Twitter friend (@elosf) had me looking at claim 1 of the ‘207 patent:

1. A system, comprising:

a computer data center proximate to a body of water comprising a plurality of computing units;

a sea-based electrical generator in electrical connection with the plurality of computing units; and

one or more sea-water cooling units for providing cooling to the plurality of computing units.

Whoa.

Now I’m interested. As a geek in every sense of the word, the subject matter intrigued me. But, as a patent attorney, the breadth of the claim left an impression.

My curiosity led me to Public PAIR, where I learned the following about the ‘207 patent:

• the patent issued in 26 months (certainly not break-neck speed, but quick nonetheless)
• the Office allowed the application in the first substantive action (along with a restriction requirement, which was addressed solely by Examiner’s Amendment in the same paper)
• the applicant made no substantive prosecution comments;
• the Notice of Allowance includes the following reasons for allowance: “There are inventions in the field that provide similar functionality and/or have similar features, as prior art of record shows. Applicant(s) invention differs from the prior art of record by the combination of its functional features, which include water motion generator, cooling arrangement and computer data center, which in combination are performing as disclosed and claimed, and which the examiner search failed to find.” (emphasis added)

(you can download a .pdf of the patent here, and a .pdf of the entire prosecution history here).

I’m not familiar with either the data center art or the “sea-based electrical generator” art, so I don’t know if that claim is patentable or not. But, in the post-KSR world, it’s incomprehensible that the Office would allow such a claim in a first action on the merits. Basing the allowance on grounds that the claim differs from the prior art by “a combination of…functional features” that, individually, are known in the art only confounds the problem.

Besides the obvious indefiniteness problem (the specification doesn’t mention the claim term “proximate,” making me wonder if land-based data centers with pipes reaching to the sea are covered), a simple Google book search reveals a 1997 publication stating that “the Unisys UYK-43 is the standard US Navy shipboard mainframe” that weighs 1795 lbs “when water-cooled.”

Surely the Office, in applying KSR and the broadest reasonable interpretation of the claim language, should have addressed these issues during examination. But, it didn’t and now Google is the proud owner of this incredibly broad patent.

For Google, the timing of this embarrassment of riches couldn’t be worse. The issuance of the ‘207 patent presents a troubling irony - the company was granted a very dubious patent claim the day before it stepped into the pulpit and lectured about “dubious infringement claims” and the need for reform.

It also highlights a fundamental problem with the narrow focus of the company’s (and industry’s) call for patent reform:

By focusing on the “expenses” and “problems” associated with so-called “bad patents,” reformers are abandoning the broader issue of patent quality - which, just a few short years ago, was the driving force behind the current patent reform movement.

Intentional or not, this is a sad development. While the Googles of the world call for patent reforms that devalue all patents in an effort to address the dubious ones in the herd, the Patent Office has been reduced to what Professor Mark Lemley recently termed “an assembly line type of operation.” That the outputs of such an operation are sometimes troubling - as exemplified by the ‘207 patent - should come as no surprise.

Patent reform efforts that continue to focus narrowly on the outputs, such as those called for by Google, will only make the overall system weaker. Patent quality is the basal problem that simply must be addressed.

It’s time we built a Patent Office and a patent examination system that makes everyone - Examiners, attorneys and agents, companies, and even the Office itself - proud. A fully funded Office capable of efficiently and thoroughly examining patent applications would go a long way, I think, to addressing the so-called “bad patents” problem that has Google and others concerned. I suspect the same Office would do a better job of promoting innovation and creating the “jobs” of which Google speaks.

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Speculation as to the identity of the next Under Secretary is, not surprisingly, running wild. Three individuals - Q. Todd Dickinson, David Kappos, and James Pooley - have been the subject of attention for months now, and a new name - Mike Kirk - was thrust into the ring just last week.

Picking a candidate in this time of turmoil seems an impossible task. There is no shortage of candidates with academic and professional qualifications that are beyond question - each of the favorite candidates above fit into this category.

But, at this critical time, the Office and the patent community desperately need a Director that brings more than merely the right resume. The unprecedented state of disarray in which the Office is operating requires a candidate that brings intangible character traits that aren’t necessarily born from having attended the right school, having worked at the right firm, or having led the Office in the past.

We need a fresh face that, simply by being nominated, sends a signal to all Office stakeholders that a period of healing is set to begin. We need someone that, from day one, instills confidence in all stakeholders that the Office is committed to restoring the sense of partnership that has been destroyed in recent years. We need someone that is willing to try new approaches to old problems while respecting the Office’s role in protecting inventor’s rights. We need someone that values administrative efficiency, but that is not willing to compromise those rights in pursuing it. We need someone that embraces a goal of complete transparency and marries it with the Office’s statutory duty to “disseminat[e] to the public information with respect to patents and trademarks.”

The position is, without doubt, more challenging than it has ever been before and the new Under Secretary stands to inherit an incredible mess. No matter the selection, I firmly believe that the community stands ready to assist the new Director in unravelling everything and setting the Office and the system back on the right track.

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So now what?  Where do we go from here?

Turns out, we’re not going anywhere…for now. All eyes will remain fixed on the Senate Judiciary Committee in the foreseeable future for two reasons:

1. Will the Judiciary Committee issue a written report to accompany the bill?

First, we’re looking for a Committee Report. Reports are an important part of the legislative process as they serve to inform the public and other members of Congress about the purpose of the proposed legislation and its impact on current law and life. Committee reports often explain the perceived need for the legislation and may present dissenting views. Reports can also include the views of executive agencies that stand to be impacted by the bill, and are required to include cost estimates and regulatory impact statements.

In contrast to the rules of the House, Senate committees are not required to submit a written report when approving a bill and passing it to the entire chamber. Indeed, as noted on its web site, the Judiciary Committee “sometimes publishes reports to accompany legislation that [it has] reported to the Senate Floor.” (emphasis added)

If the Committee publishes a report, potential interesting content includes the dissenting views of Senator Kyl, who has introduced a competing patent reform bill (S.610 [.pdf]) and represents the most visible opposition to S.515, and Senator Hatch, who voted against the bill he originally sponsored because it fails to address his concerns over inequitable conduct. If included, any input from the Patent and Trademark Office would also make interesting reading, particularly in light of the first-to-file and post-grant review provisions that stand to significantly change the operations of the Office.

2. When will the Judiciary Committee consider a nomination for Director of the Patent and Trademark Office?

With the confirmation of Gary Locke as the Commerce Secretary, we’re now waiting for President Obama to nominate a Director of the Patent and Trademark Office (Under Secretary, Intellectual Property). Once he does, the nomination goes to the Judiciary Committee for hearings.

With respect to any report it may decide to publish, the Committee has a chicken-and-egg issue of sorts.  Does it wait to publish a report until after it acts on a forthcoming Director nomination? Or does patent reform have sufficient inertia in light of the agreement on damages that the Committee (read Leahy, Specter, Feinstein) chooses to push the bill even in the absence of a Director nomination? On this question, a comment made by Senator Feinstein during markup might prove telling: “We have substantial meeting of the minds…We’ve got what we need to move the bill.”

Certainly quick passage by the Senate is possible, particularly if the Committee elects not to publish a report. Considering the importance and controversial nature of the bill, though, this seems highly unlikely.

The relative timing of any report that might issue and the Director nomination will be interesting to watch.

But, for now, we’re not going anywhere.

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You can view/download a .pdf of the reported version of the bill here.

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I can think of several reasons, but learned of another after reading the Federal Circuit’s decision in Crown Packaging Technology v. Rexam Beverage Can (08-1284). The district court had dismissed the defendant’s infringement counterclaim for failure to comply with the marking requirement of 35 U.S.C. § 287(a). The Federal Circuit reversed the dismissal on appeal, though, explaining that the marking statute was not applicable because the defendant had asserted only the method claims of a patent that included both method and apparatus claims:

“In this case and Hanson, the patentee only asserted method claims despite the fact that the patent contained both method and apparatus claims. In American Medical, in contrast, both apparatus and method claims of the ‘765 patent were asserted. Because Rexam asserted only the method claims of the ‘839 patent, the marking requirement of 35 U.S.C. § 287(a) does not apply. Consequently, we reverse the district court’s grant of Crown’s motion for summary judgment dismissing Rexam’s counterclaim for infringement of the ‘839 patent.” (emphasis added, internal quotations omitted, citation omitted)

A method claim, then, might preserve your ability to file an infringement claim when your marking practices have been less than perfect.

Reading the Crown Packaging Technology opinion gives you the sense that this might not always be the case. Judge Moore, the author of the opinion of the court, phrased the court’s holding - both in the opinion’s introduction and in the conclusion of the section relating to the marking issue - as one that is mandated by precedent:

“[B]ecause we are bound by our holding in Hanson v. Alpine Valley Ski Area, Inc., 718 F.2d 1075 (Fed. Cir. 1983)—that the marking requirement of 35 U.S.C. § 287(a) does not apply when only method claims are asserted—we reverse the district court’s grant of summary judgment dismissing Rexam’s counterclaim based on a failure to mark.” (emphasis added)

Judge Moore’s disagreement with the rule of Hanson is clear.

Read the PTP review of Crown Packaging Technology for a detailed analysis of the court’s opinion.

No related posts.

We process the text of all opinions to add paragraph numbers with linkable anchors, which means that you can now deep link right to a figure from a particular opinion, like so.

All newly posted opinions will be processed to include figures. We are working backward to add figures to previously posted opinions.

No related posts.

In a bit of Friday afternoon silliness, Steve Nipper and I debated the issue a bit. We decided that the old college mainstay - the beer bong - highlights the issue perfectly. For those that don’t know, the classic beer bong is an extremely simple device -  a funnel attached to a length of hose. Beer goes in the funnel, travels through the hose and exits into an awaiting mouth. The beer travels straight down - there is no ‘intermediate elevation.’

So is a beer bong a siphon?

Counsel for patentee would argue that it is:

“[a] ’siphon’ in its ordinary meaning is the pulling of water as a result of negative pressure that is created by the falling of a column of water…there is nothing in the patent to limit the use of the term ’siphon’ to an intermediate elevation.”

Steve and I decided that it’s just a simple gravity drain, not a siphon. The classic two-beer-hat, which clearly includes an intermediate elevation, would certainly qualify, though.

Unfortunately, despite the lengthy debate during oral argument, the opinion doesn’t address the issue so we don’t know the court’s final thoughts on the meaning of the term.

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A .pdf redline version of the bill, as amended and passed by the Committee, is available here.

The significance of the agreement between the camps cannot be understated. Insider Hal Wegner has called it “historic” and sees the resulting changes as producing a “margin of support…so great that it appears, at least at present, as though the difficult cloture obstacle will be surmounted.” (emphasis Hal’s).

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