Patent Law Blog (Patently-O)

Reimportation of Grey Market Goods can be Stopped Only When Materially Different from “Substantially All” Authorized US Versions

Bourdeau Bros v. ITC and Deere & Co. (Fed. Cir. 2006, 04–1588).

John Deere sells its 5000 and 6000 series harvesters in both the US and Europe.  The 5000 series is manufactured in the US and shipped abroad while the 6000 series is manufactured in the US for the US market but manufactured in Germany for the European market.

Based on Deere’s US Trademarks, the International Trade Commission (ITC) granted a general exclusion stopping third party importation of the harvesters originally sold in the European market.

Reimportation: On appeal, the three judge panel agreed that “importation and sale of a trademarked good of domestic manufacture, produced solely for sale abroad and not authorized by the owner of the trademark for sale in the United States, may violate section 1337 if the imported good is materially different from . . . those goods bearing the same trademark that are authorized for sale in the United States.”

Thus reimportation of “grey market” goods can be stopped when they are materially different from “substantially all” of the authorized US versions. Here, the CAFC found that Deere established material difference, but failed to meet its burden of proving that its US sales did not include any of the European versions. 

To win on remand, Deere must:

establish [with a preponderance of the evidence] that the number of sales of European forage harvesters was so small that substantially all of Deere's sales in the United States were of North American forage harvesters, such that substantially all of the authorized sales were of goods bearing the asserted material differences.

The CAFC also found that the “ITC erred in granting a general exclusion order that did not contain an exception for goods bearing a permanent nonremovable label indicating their origin.”

Vacated and Remanded.

Notes:

• Our 1969 John Deere 4020 is pictured above along with three cows from our herd.

USPTO News: Proposed Changes to Reexamination Practice

In a 2005 study, attorney Joseph Cohen found that 98% of all inter partes reexamination requests had been granted.  On March 30, 2006, the PTO issued a proposed rule change that might change that outcome. According to the proposal, a patent owner will be given an opportunity to reply to the third-party reexamination request prior to the examiner’s decision on the request.  Thus, a patent holder may be able to convince the PTO of an absence of a “substantial new question of patentability” and avoid the reexamination proceeding altogether.

In a bit of give-and-take, the proposal would also prohibit supplemental patent owner responses to an Office Action without a showing of sufficient cause.*  Comments on the proposed change are due by May 30, 2006 and should be e-mailed to [email protected].

Links:

• Text of Proposed Rule Change
• Cohen article on Inter Partes Reexamination

* Several other formalities regarding reexamination practice are also included in the proposed change.

EBay v. MercExchange Oral Arguments

Based on oral arguments, pundits see a potential split decision in the eBay v. MercExchange injunction case.  Justice Scalia is likely to support strong property rights ("You're talking about a property right, and the property right is explicitly the right to exclude others.") while Justice Breyer may side with eBay. 

Chief Justice Roberts, who would be expected to support strong property rights, appeared to question the validity and definiteness of the MercExchange patent.* Decision in June

More Info:

• AuctionBytes (Ina Steiner has been following this case for years).
• SCOTUS Blog (Goldstein & Howe’s excellent Supreme Court analysis).
• Reuters

NOTE: I did not attend the arguments, but am simply reporting second-hand information. DDC

How to Make an Obviousness Determination

In re Kahn (Fed. Cir. 2006, 04–1616).

I already provided a summary of this March 22, 2006 opinion, but decided that the meat of the opinion is important enough to be repeated:

Ebay v. MercExchange In The News

• New York Times: Justices Will Hear Patent Case Against eBay.
• Out-Law: Supreme Court to hear eBay's patent challenge.
• Auction Bytes: eBay Patent War: High Tech, Double Standard?
• WSJ Law Blog: Ebay v. MercExchange: Sizing up the Case and Its Lawyers.
• The Street: eBay Gets its Day in Court
• International Herald Tribune: Big Names Pick Sides in eBay Patent Case Before High Court

After Wednesday’s Oral Arguments, the FCBA will be hosting a post-argument webcast at 3:00 EST. ($75 — registration password is FCBA).

Design Patent Point-of-Novelty Test Questioned in Appeal

Over at the Shape Blog, Boston attorney John Welch has been writing about the fallout after the Federal Circuit’s design patent decision in Lawman Armor v. Winner International.  In that case, the appellate panel determined that the “point of novelty” test for design patent infringement is focused entirely on individual points of novelty, gives no weight to the resulting novelty-by-combination, and requires no suggestion or motivation to combine prior art references.

The technology-at-issue here is a steering wheel lock design similar to “The Club”

Lawman recently filed a petition for rehearing, and, in addition, Nike and the Industrial Design Society of America  (IDSA) have each filed an amicus brief in support of a rehearing. The AIPLA is reportedly planning to file as well. This CAFC decision takes the wind out of design patents and leaves them quite weak.  The petition for rehearing hopes to change that outlook.  Winner’s responsive brief is due April 3, 2006.

Documents:

• Lawman Petition For Rehearing
• Nike's Amicus Brief
• ISDA's Amicus Brief 

 Links:

• Design Patent: Patently-O discussing the CAFC original panel decision
• Welch: Discussing the CAFC original panel decision I
• Welch: Discussing the CAFC original panel decision II
• Welch: Discussing the Nike Brief
• Welch: Discussing the IDSA brief

 

271(d)(5) Defines A Patent Misuse Safeharbor, But Does Not Define Misuse Itself

U.S. Philips v. Princo (Fed. Cir. 2006) (Non-Precedential).

In a non-precedential opinion, the CAFC noted that the traditional defense to patent misuse was narrowed when Congress enacted 35 U.S.C. 271(d)(5).  Under that statute, it is not misuse to “condition[] the license of any rights to the patent . . . on the acquisition of a license to rights in another patent or purchase of a separate product, unless, in view of the circumstances, the patent owner has market power in the relevant market for the patent or patented product on which the license or sale is conditioned.” 

According to the CAFC, section 5 provides “a safe harbor for certain conduct, not a comprehensive definition of patent misuse.” (Citing the recent Supreme Court case of Illinois Tool Works).  Remanded for a new determination of misuse.

 

CAFC: Failure to submit full translation of prior art reference did not satisfy intent requirement of inequitable conduct

Atofina v. Great Lakes Chemical Corp., (Fed. Cir. 2006)

by Bradley Crawford

Atofina sued Great Lakes for literally infringing its U.S. Patent No. 5,900,514 titled "Synthesis of Difluoromethane." The district court determined the '514 patent was (i) not literally infringed; (2) anticipated (only claims 1, 2, 6, 7, 9, and 10); and (3) unenforceable because of inequitable conduct. Atofina appealed.

Infringement: The CAFC ruled the claims were not literally infringed. The district court's use of scientific and technical dictionaries to construe the word "catalyst" was acceptable as the dictionary definition comported with the intrinsic evidence.

The intrinsic evidence (1) supported the district court's claim construction, and (2) evinced a surrender of subject matter. Regarding the second point, the CAFC noted that "it frequently happens that patentees surrender more through amendment than may have been absolutely necessary..." and "we have not allowed them to assert that claims should be interpreted as if they had surrendered only what they had to." (Note: The take home message here is obvious, so I won't belabor the point.)

Anticipation: The CAFC also ruled claims 1, 2, 6, 7, 9, and 10 were not anticipated because the district court incorrectly interpreted a broad genus as anticipating a narrower genus, which is inconsistent with the Titanium Metals case. See 778 F.2d 775 (Fed. Cir. 1985).

Unforceability: And finally, the CAFC found the '514 patent not unenforceable due to inequitable conduct and it did not remand.

During prosecuting of the application that matured into the '514 patent, Atofina submitted a partial translation (a Derwent Abstract, to be precise) of the Japanese language reference JP 51-82206, to the U.S. Patent and Trademark Office, even though it had a full translation in its possession. At trial, the district court ruled Atofina committed inequitable conduct by (1) failing to disclose the full translation of JP 51-82206, which was deemed highly material because it anticipated several claims and (2) Atofina had the requisite intent to deceive the U.S. Patent and Trademark Office because it failed to disclose the translation and it mischaracterized the reference.

On appeal, Atofina argued that materiality was found only because the reference was alleged to anticipate, and since the anticipation was wrong, the determination of materiality was also wrong. Atofina also argued that the district court failed to consider evidence of good faith, i.e., Atofina's "reference in the prosecution history to page numbers of the full translation of JP 51-82206," the submission of the Derwent Abstract and the citing of JP 51-82206 in the patent specification.

Great Lakes argued the full translation was highly material because (1) it was anticipatory, (2) JP 51-82206 was cited in the European counterpart to the '514 patent and the European patent only issued after Atofina incorporated an additional limitation into the claims. Intent was shown by (1) Atofina's failure to disclose the full translation of the Japanese language reference, (2) Atofina's mischaracterizing prior art references, and (3) withholding "poor results." Great Lakes also argued there was no evidence of good faith by Atofina.

The CAFC did not decided the issue of materiality, but it did focus on intent. The CAFC found that the failure to submit the full translation was not, in and of itself, enough to establish intent; a "factual basis for a finding of deceptive intent" was required. The CAFC also found (1) Atofina's comments were consistent with the Derwent Abstract and the full abstract, (2) Atofina did not try to hide information or mislead the Patent and Trademark Office.

Judge Dyk filed an opinion, concurring in part and dissenting in part. Judge Dyk agreed with the majority's decision, but he would remand for further consideration by the district court.

Note to all patent prosecutors out there. This case exemplifies the old maxim, "penny wise, but pound foolish." Atofina did not submit the full translation, even though the full translation was in its possession. (Why, is an interesting question. If they didn't think it was a problem, why not just submit it?) Instead, Atofina submitted the Derwent Abstract and made comments about what the reference discloses. By doing so, they saved the cost of preparing a translation, which, admittedly, can be expensive if it is a very large reference. However, they left themselves open to a charge of inequitable conduct. I expect that they paid many tens of thousands of dollars (if not more) defending themselves from this allegation first at trial and then on appeal. If they would have simply paid for the complete translation and then submitted it to the Patent and Trademark Office, they would likely have saved money in the long run and obviated any allegation of mischaracterizing the reference. If you find yourself in a similar situation, I think you have to ask yourself if saving the cost of the translation is worth the risk of (1) having to defend against a charge of inequitable conduct based on misleading the Patent and Trademark Office or mischaracterizing the reference, and (2) having any patent that ultimately issues invalidated for inequitable conduct.

Bradley W. Crawford is a attorney at MBHB LLP focusing his efforts on patent litigation, prosecution, and counseling.  Prior to joining MBHB, Mr. Crawford worked in the areas of synthetic organic chemistry as well as medicinal chemistry.

Japanese Patent Attorney / Client Privilege Extends to U.S. Litigation

Eisai v. Dr. Reddy’s Lab., 77 USPQ2D 1854 (S.D.N.Y. 2005).

Japanese benrishi act essentially as patent agents or patent prosecution attorneys.  The question here was whether the communications between plaintiff Eisai and its benrishi could be withheld as privileged.

When determining privilege in a U.S. case based on a foreign privilege, courts generally apply some level of comity. 

Here, it was undisputed that at least some benrishi communications were privileged.  However, Dr. Reddy argued that privilege should not extend to U.S. cases because the benrishi privilege differs from U.S. privilege in a number of respects.

Despite differences in the laws, the court concluded that privilege should persist.

Since the laws of two different jurisdictions will rarely be in such accord, application of any such rule would be inconsistent with the basic notion of extending comity to foreign law

 

Construing Claims “Without Reference to the Accused Device” Is Put to the Test

Wilson Sporting Goods v. Hillerich & Bradsby (Fed. Cir. 2006, 05–1103).

By Jeff Steck

Following Federal Circuit precedent that “claims may not be construed with reference to the accused device,” it is common for district courts to construe patent claims before they know anything about the products at issue in the case. Through an uncommon procedural twist leading up to Wilson Sporting Goods Co. v. Hillerich & Bradsby Co. (05-1103), the Federal Circuit found itself in the same position as those district courts. 

 

Wilson owns a patent on a non-traditional softball bat that is best described as being “corked” with, essentially, a beer can. The defendant, H&B, was accused of infringing this patent. Although the Federal Circuit did not have “any information about the accused products,” it is safe to conclude that H&B’s most celebrated product, the solid ash Louisville Slugger, was not at issue.

 

Before the district court, Wilson essentially lost the case when the court issued a narrow construction of the shape and rigidity of the beer-can insert. Instead of pressing forward with an unfavorable construction, Wilson stipulated that there was no infringement under that construction, and the district court entered a final judgment.

 

Wilson appealed the claim construction to the Federal Circuit. With no record on the accused products, the Federal Circuit found itself in the position of so many district courts: both sides were fighting over claim construction, and the court had no idea why. With no information about the accused products, the court complained that “this sparse record lacks the complete context for accurate claim construction.” As a result, the court refused to provide its own claim construction, choosing instead to identify just enough errors in the district court’s construction to send the case back on remand.   

 

Although the only issue in the case was claim construction—ostensibly an issue of pure law—the Federal Circuit wanted to understand the accused device. Faced, however, with its own rule that “claims may not be construed with reference to the accused device,” the court had difficulty explaining the contradiction between what it permits in claim construction and what it wants in claim construction. Cf. CVI Beta Ventures Inc. v. Tura LP, 43 U.S.P.Q. 2d 1860, 1861 (Fed. Cir. 1997) (Mayer, J. dissenting) (“[T]he court once again shows that we are solecists.... [W]e are bound to interpret law according to specific rules. By violating these interpretive rules, or by exposing them to exceptions so that our court can amass decisionmaking authority ... we inappropriately encumber the process with ambiguity....”).

 

Hoping, perhaps, that contradiction would prove more enlightening than troublesome, the court restated the relevant law on claim construction in a form more characteristic of a koan than a rule of law:  

while a claim is not to be construed in light of the accused device,
in an infringement case,
it must inevitably be construed in context of the accused device.

 (citing SRI Int’l v. Matsushita Elec. Corp. of Am., 775 F.2d 1107, 1118 (Fed. Cir. 1985)) (scansion added, odd grammar in original). 

 

The panel tried unsuccessfully to show that it was not the first to require evidence of the accused product before conducting claim construction. Citing Bayer AG v. Biovail Corp., 279 F.3d 1340, 1340 (Fed. Cir. 2002), the court noted that it had previously declined to construe claims based on an incomplete record. In Bayer, however, the record was “incomplete” because it was missing “evidence of the meaning of the terms to one of skill in the art at the time of invention”—i.e. the usual evidence in claim construction—not because it was missing evidence on the accused product.

 

The court then tried to restate the rule against construing claims “with reference to the accused device,” concluding that the rule is simply a prohibition against “biasing the claim construction process to exclude or include specific features of the accused product.” As such, the rule “does not forbid any glimpse of the accused product” before claim construction. The issue, however, is not whether a court is permitted to see the accused product, but whether the court is required to see the accused product.

 

By remanding this case without a conducting a complete claim construction, the Federal Circuit has sent the message that a district court’s claim construction must include some analysis of the accused products. The district court had given hope to the promise of Markman: an infringement allegation was resolved with no need for a costly trial, or even summary judgment proceedings; the Federal Circuit’s remand showed that promise to be illusory.

Jeffrey Steck is a partner at MBHB and an experienced litigator. He was an editor of the California Law Review at the University of California at Berkeley, where he received his JD.

The Next CAFC Judge

In January 2006, Judge Clevenger took senior status at the Court of Appeals for the Federal Circuit — leaving one open spot in the panel of twelve.  There is a strong rumor that Professor Kimberly Moore will be appointed to fill the spot.

Other potential candidates include at least Judge Whyte and Professor John Duffy.

• Patently-O Predictions from July 2005

Professor Moore has long been considered one of the handful of leading patent law professors, and is especially noted for her empirical research methods. In addition, Moore is co-author of a book on patent litigation along with CAFC Chief Judge Michel and Raphael Lupo and is the Editor-in-Chief of the Federal Circuit Bar Journal. 

Although not a registered patent attorney, Moore holds a BS and MS from MIT in electrical engineering.  Her masters thesis focused on chaos theory applied to electrical systems.  She received her JD from Georgetown.  Moore has been teaching law since completing her clerkship with Judge Archer.  Most recently, the PTO has asserted Moore’s article titled “Ending Abuse of Patent Continuations” as a justification for its proposed changes to continuation practice. She also has trial experience from her time with Kirkland & Ellis.

I commented yesterday to a reporter my belief that Professor Moore is an obvious choice and would make an excellent judge. 

John Duffy, whose name has also been mentioned, believes that Professor Moore would be an “outstanding nominee.”  According to Professor Duffy, “Professor Moore has spent a large portion of her career carefully studying the judicial process of patent litigation, and she has become a leading authority in the field. She would bring extraordinary knowledge and insight to the bench. Her nomination would, I think, command broad support from the academy and the practicing bar.”

According to a cite on IPBiz, Professor Moore testified to Congress that the high reversal rate in patent cases “"undermines confidence in district-court decision making."

 

CAFC: What Evidence Does an Accused Infringer Need for Summary Judgment of Non-Infringement?

Exigent Technology, Inc. v. Atrana Solutions, Inc. (Fed. Cir. 2006, 05–1338).

By Marcus Thymian

In its March 22 decision, the Federal Circuit affirmed a district court's grant of summary judgment of non-infringement of the claims of a patent relating to a “multi-function transaction processing system.” Unlike many appeals involving summary judgments of non-infringement, this opinion did not focus on claim construction or application of the claims to the accused device. Instead, the interesting issue was whether the accused infringer had provided sufficient support in its 12-page summary judgment motion.

At trial, the burden of proving infringement is on the patent holder. Here, the accused infringer moved for summary judgment of non-infringement. In a motion for summary judgment, the burden is initially on the movant (the accused infringer in this case) to show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law. Thus, there would appear to be competing burdens, a concept with which courts have sometimes struggled.

In explaining the conflict and finding resolution in this case, the Federal Circuit dedicated much of its opinion to the Supreme Court’s 1986 Celotex v. Catrett decision. Most importantly, on issues in which the nonmovant bears the burden, “the [summary judgment] movant need not ‘produce evidence’ showing the absence of a genuine issue of material fact in order to properly support its summary judgment motion.” Basically, the party moving for summary judgment needs to show that “there is an absence of evidence to support the nonmoving party’s case.” In this case, that showing took the form of a 12-page summary judgment motion (that also addressed invalidity and unenforceability), along with a declaration by the accused company’s CEO stating that none of the accused products contained certain claim limitations. The Federal Circuit stated that “nothing more is required than the filing of a summary judgment motion stating that the patentee had no evidence of infringement and pointing to the specific ways in which accused systems did not meet the claim limitations.”

Marcus Thymian is a partner at McDonnell Boehnen Hulbert & Berghoff LLP in Chicago. Much of his recent practice has involved counseling clients on pretrial litigation strategies, including seeking and defending against motions for summary judgment. [link to bio]

BPAI's factual findings affirmed when based on more than a mere scintilla of evidence

In re Kahn (Fed. Cir. 2006, 04–1616).

Kahn’s voice synthesizer patent application was rejected by patent office as obvious over a group of four references. Kahn appealed:

Motivation to Combine: Most inventions involve “a combination of old elements” where each element is found somewhere in the prior art.  However, the combination can be patentable as a whole if the combination creates something new and nonobvious. When rejecting a patent application as obvious based on multiple prior art references, the PTO must articulate the motivations for selecting references and combining them together.  This has come to be known as the “motivation-suggestion-teaching” test.

[T]he "motivation-suggestion-teaching" test asks not merely what the references disclose, but whether a person of ordinary skill in the art, possessed with the understandings and knowledge reflected in the prior art, and motivated by the general problem facing the inventor, would have been led to make the combination recited in the claims.

Here, the CAFC found that the board had ‘substantial evidence’ to conclude that the asserted references could be combined because they were all directed to some form of word localization for the blind.

Although a reasonable person might reach the opposite conclusion, there is far more than a "mere scintilla" of evidence present from which a reasonable mind could find a motivation to combine.

Long-Felt but Unresolved Need: Kahn requested that the CAFC take ‘official notice’ of a long-felt but unresolved need for his invention as a way to overcome the obviousness rejection.  The court, however, refused because “precedent requires that the applicant submit actual evidence of long-felt need, as opposed to argument.”

Rejection affirmed.  

CAFC: Claimed "Acid" Precludes Coverage for "Salts"

Kao Corporation v. Jergens Company (Fed. Cir. 2006, 05–1038).

by Bradley Crawford

This is a patent infringement case about removing “keratotic plugs,” i.e., blackheads, from facial skin. The claimed method encompasses a method for removing the keratotic plug by using a cosmetic article (not defined in the application but the “keratotic plug remover” is described in the specification as a “poultice” or a “cosmetic paste”), the method comprising 1) wetting the skin or the cosmetic article, 2) applying the cosmetic article to the skin and then 3) removing the cosmetic article after drying. The cosmetic article comprises 1) a substrate – essentially a backing material, and 2) a layer comprising a poly (alkyl vinyl ether maleic acid) copolymer or a poly(alkylvinyl ether maleic anhydride) copolymer.

The defendant’s product was used to remove blackheads and it contained the claimed poly(alkyl vinyl ether maleic acid) copolymer or a poly(alkylvinyl ether maleic anhydride) copolymer, but it also contained 2% by weight of aminomethyl propanol (a base that reacts with some of the acid groups in the copolymer).

The District Court construed poly(alkyl vinyl ether maleic acid) copolymer or a poly(alkylvinyl ether maleic anhydride) copolymer to not include the salt form of the copolymer because the “plain meaning” of the claims precluded salts. The District Court also relied on the fact that the patentee later filed an application specifically directed towards the salts of the copolymers claimed in the patent in suit – this was seen as evidence that the patent in suit did not cover salts. The CAFC also made note of this fact and relied on it.

(Note to all of the chemical patent drafters out there, if you are claiming compounds that contain acids or bases, you have to disclose and claim the corresponding salts. You just have to.)

Ultimately, the District Court found the patent to be valid and enforceable, but not infringed.

On appeal, the defendant argued the patent was invalid for: 1) lacking written description, 2) being obvious, and 3) inequitable conduct, while the patentee argued there was infringement. The CAFC rejected all of these arguments.

The District Court found there was written description for a claim amendment made by the patentee and the CAFC, while sympathetic to the patentee’s argument, found that the District Court’s judgment was not “clearly erroneous.”

The obviousness argument was based on a lack of “unexpected results.” More specifically, the defendant alleged both procedural and substantive arguments, including 1) the district court failed to use the closest prior art and 2) the district court failed to properly assess the “totality of the evidence.”

The inequitable conduct allegation was based on the patentees presenting only the most positive data to the Patent Office. The parties agreed that the non-disclosed material was material but the CAFC did not find the requisite intent because the missing data was eventually presented to the examiner. The CAFC was sympathetic to the defendant’s argument, but was unwilling to disturb the District Court’s decision as it was not abuse of discretion.

The CAFC also rejected the patentee’s infringement argument and distinguished two cases that stood for the proposition that “a claim that recites an acid may be literally infringed by the salt of the acid, where both have the same functionality.”

For an unexplained reason, the patentee did not assert infringement under the doctrine of equivalents.

Two concurring in part and dissenting in part opinions were also filed.

Bradley W. Crawford is a attorney at MBHB LLP focusing his efforts on patent litigation, prosecution, and counseling.  Prior to joining MBHB, Mr. Crawford worked in the areas of synthetic organic chemistry as well as medicinal chemistry. 

Trademark: Product Design Trade Dress Need Not Implicate Entire Product

In re Slokevage (Fed. Cir. 2006, 05–1389).

Slokevage filed to register a trademark for "pants, overalls, shorts, culottes, dresses, skirts" configured with the label "FLASH DARE!"  The TTAB refused to register the mark because it consisted of product design without any showing of secondary meaning.

Slokevage appealed to the CAFC, arguing that the clothing trade dress was not product design, and thus could be inherently distinctive.

As an initial matter, the CAFC found that the determination of whether a trade dress is “product design” is a factual inquiry and deference is given to lower court determinations.

Here, Slokevage argued that the rear flaps were not “product design” because they did not alter the entire product, but were rather more like labels. The CAFC disagreed:

“The holes and flaps portion are part of the design of the clothing—the cut-out area is not merely a design placed on top of a garment, but is a design incorporated into the garment itself. Moreover, while Slokevage urges that product design trade dress must implicate the entire product, we do not find support for that proposition.”

After finding that the design was product design, the court made quick-work of affirming the refusal to register under Wal-Mart v. Samara (product design cannot be inherently distinctive).  

Links:

• TTABlog on TTAB decision I and II
• TTABlog on CAFC decision

 

CAFC May Hear Immigration Cases

The Senate Judiciary committee is discussing Senate Majority Leader’s proposal (S.2454) to add immigration issues to the docket of the Court of Appeals for the Federal Circuit. According to the proposed amendment to 8 U.S.C. 1252(b), review of deportation (removal) orders would be vested in the CAFC rather than in the various regional appellate courts.

In other CAFC news, the fee for filing an appeal has been increased from $250 to $450 effective April 9, 2006.

Continued Distribution of Brochures and Instructions Insufficient to Create SJ Jurisdiction

Infiltrator Systems v. Cultec (Fed. Cir. 2006) (NONPRECEDENTIAL).

Cultec, the patent holder, moved for a preliminary injunction, but Infiltrator argued that it no longer manufactured the accused drainage chambers system. Cultec, however, asserted that Infiltrator continued to provide marketing brochures and installation instructions on its website.

The CAFC found that the brochures and instructions were insufficient to create an ‘offer to sell,’ but were merely used by users who had already purchased the old chambers.

Because the only accused product is no longer being sold, the court dismissed the appeal as moot.

 

Patently-O Tidbits

• PATENT PROSECUTION: In a couple of weeks, I will be taking part in Dunes CLE’s course on Patent Prosecution at the Bellagio in Las Vegas.  Hope to see you there April 6 and 7. LINK.
• Boris Umansky of Davis McGrath has finally released his blog, IP Legal Lounge.  Boris writes about Chicago area decisions relating to trademark, copyright, etc.  Today’s topic — Wrestling.
• History of Patent Injunctions: Although not directed at the eBay case, Michigan professor Adam Mossoff has just released his article on the history of patent protection.  This is important because in eBay, the Supreme Court may focus on what equitable relief means in the context of patent injunctions. Professor Mossoff finds that historically (18th & 19th century), patents have been treated as property rights and were accorded “special treatment” regardless of whether damages would adequately compensate the patent holder for infringement. Read Mossoff’s Paper Here.
• Stephen Nipper discusses a new way to download patent documents here. 

Claim Preamble Is Limiting When It Recites Essential Structure of the Invention

Bicon v. Straumann (Fed. Cir. 2006, 05–1168).

In a dispute over a dental implant, the CAFC today determined that the preamble of the asserted claims should be seen as limiting the claim scope.

While it is true that preamble language is often treated as nonlimiting in nature, it is not unusual for this court to treat preamble language as limiting, as it is in this case.

Here, the claimed preamble was quite extensive, and was written as follows:

An emergence cuff member for use in preserving the interdental papilla during the procedure of placing an abutment on a root member implanted in the alveolar bone of a patient in which [a] the abutment has a frusto-spherical basal surface portion and [b] a conical surface portion having a selected height extending therefrom comprising . . .

Under the rule expounded in RIM v. NTP, the preamble is limiting “if it recites essential structure that is important to the invention or necessary to give meaning to the claim.”  Here, the court found that the preamble “recites structural features . . . [and] it is apparent that the claim drafter chose to use both the preamble and the body of the claim to define the subject matter of the claimed invention.”

Affirmed.

File Your Patents Electronically

On Friday, March 17, 2006 the PTO launched its new electronic patent filing system.  The new system operates using PDF files and is expected to be the avenue-of-choice from now on. Benefits of filing electronically include:

• Instant filing receipt to ensure your filing date;
• Applications immediately viewable in Private PAIR;
• Submission is validated for completeness;
• No scanning errors;
• Less wasted paper;
• No express mail fees.

Links:

• PTO’s electronic filing system.
• The PTO’s web conference is available here: http://webex.client.ninesystems.com/efsweb/

Supreme Court on the March

The second half of March, 2006 is a special period for patent law. The Supreme Court will hear oral arguments in two important patent law cases, and may decide petitions for writ of certiorari in a couple others.

On Tuesday, March 21, the Supreme Court will hear arguments in LabCorp v. Metabolite (04–607).  The point at issue hear involves the scope of patentable subject matter.  Specifically, the question briefed is whether a patent can validly include a step of ‘correlating a test result’ that arguably monopolizes a basic scientific relationship used in medical treatment ‘such that any doctor necessarily infringes the patent merely by thinking about the relationship after looking at a test result.’   The Court could also use this case to cut-off patenting of many business-method type inventions. [Review of the LabCorp briefs]. With that in mind, the PTO has pushed-off implementation of any final rules regarding changes to examination of patentability under Section 101.  Respondent and several amici have argued that this case is not properly before the court and should simply be dismissed.  Full disclosure — I was part of the team that drafted the IPO’s brief arguing that the court should not use this case to further limit the scope of patentable subject matter.

The Metabolite case is certainly important.  However, it will only alter our thinking in fringe cases — such as business methods and methods of applying a scientific principle. On the other hand, eBay v. MercExchange (05–130) may have an effect on the value of every patent.

On March 29, the Court will hear the eBay case. It is expected that regulars, Carter Phillips (eBay), Seth Waxman (MercExchange), and Jeffrey Minear (Gov’t) will divide up the sixty-minute argument period.  This case involves the question of whether an injunction should issue once a patent is found valid and infringed.  EBay, the petitioner, has argued that the current standard, overly favors patent holders, and that the court should take a more equitable approach to determining whether to issue an injunction.  Further, when adjudging the equities, a non-practicing entity should have less of a likelihood of obtaining an injunction than would a market competitor. On the other side, MercExchange and the Government both argue for strong patent rights, although neither argue that the right to injunction should be absolute. 

Other pending cases include:

• MedImmune v. Genentech (Whether a licensee in good standing can challenge a patent’s validity)(cert granted; petitioner briefs due soon);
• FTC v. Schering Plough (Whether reverse settlement payment from patentee to generic can constitute an antitrust violation)(cert pending; government's position requested)(DDC predicts cert);
• KSR v. Teleflex (Whether references can be combined without explicit suggestion)(cert pending; government’s position requested);
• SmithKline v. Apotex (When appreciation of the invention is required for anticipation)(cert pending; government’s position requested);
• Microsoft v. AT&T (271(f) issue involving export of software, and whether that constitutes a “component”)(cert in briefing stage);
• Nystrom v. Trex & Izumi v. Philips (claim construction issues)(cert in briefing stage)(Izumi brief; Philips response; amicus; Izumi reply).

Hal Wegner has been closely following these cases in his popular ‘top ten’ list.

Book Review: Patents and How to Get One

Patents and How to Get One : A Practical Handbook
U.S. Dept. of Commerce

$4.95 from Amazon.com

The U.S. Department of Commerce publishes a small book titled "Patents and How to Get One: A Practical Handbook." I would recommend this book to anyone who is planing to apply for a patent.

It will give you a fairly solid foundation in the patenting process so that you can spend time discussing real issues with your patent attorney rather than reviewing the legal background.

The best part -- the book is $4.95.

Ebay v. MercExchange: EBay's Reply Brief

eBay v. MercExchange (on writ of certiorari 2006).

EBay has filed its reply brief, and the stage is now set for a March 29, 2006 hearing before the Supreme Court in this important case. In the reply, eBay essentially argues injunctive relief at least requires that the plaintiff suffer “irreparable injury [without] an adequate remedy at law,” and that MercExchange has no such injury.

At its base, eBay’s argument is that by licensing its patent, MercExchange has shown that it is willing to take money in exchange for allowing would-be infringement.  Consequently, MercExchange cannot now argue that monetary damages are “inadequate.”

• eBay Reply Brief


• Read all the briefs: eBay v. MercExchange.

Threats Against Customers Do Not Create Declaratory Judgment Jurisdiction

Microchip Technology v. Chamberlain Group (Fed. Cir. 2006, 05–1339).

In another garage door case,[1][2] Chamberlain’s patent was found invalid and unenforceable.  On appeal, however, the Federal Circuit took a fresh look at whether declaratory judgment jurisdiction ever existed.

Chamberlain’s patent is related to a method of programming your garage door opener — i.e., automatically teaching it the correct code. Microchip makes integrated circuits and associated software that serve as the brains for garage door openers.

Under the terms of a 1999 settlement, Chamberlain agreed not to sue Microchip on the patents. However, two years later, Microchip brought this declaratory judgment action. 

Microchip’s basis for jurisdiction was not that it was threatened with suit.  Rather

According to the court, although Microchip itself was not threatened with suit.  Rather, Microchip was upset that Chamberlain had initiated lawsuits against Microchip’s customers. The district court agreed that Microchip had justification for filing suit.

Under the CAFC rule, a declaratory judgment plaintiff must establish:

1. A reasonable apprehension that it will face an infringement suit; and
2. Present activity by the DJ plaintiff that could constitute infringement or intent to take such steps.

Here, the CAFC found that under the first prong, “it is clear that Microchip did not possess the requisite apprehension.”  Furthermore, threats against customers do not meet the test apprehension test nor does the “practical effect” that Microchip cannot sell its products without subjecting customers (but not itself) to the threat of litigation.

 

CAFC Endorses Summary Judgment of NonInfringement Without Markman Hearing

Schoenhaus v. Gensco (Fed. Cir. 2006, 05–2178).

In a claim construction decision, the Court of Appeals for the Federal Circuit (CAFC) has affirmed the lower court’s exclusion of “semi-rigid” shoe inserts from the claimed “rigid” inserts.  In the process, the court noted that “there is a presumption that the same terms appearing in different portions of the claims should be given the same meaning unless it is clear from the specification and prosecution history that the terms have different meanings at different portions of the claims.”[1]

Interestingly, it appears that there was no Markman hearing in this case.  (Pacer Report). Yet, the CAFC praised the lower court’s summary judgment decision and its embedded claim construction.[2]

January 10, 2005, the district court granted defendants’ motion for summary judgment of non-infringement. Senior Judge Louis H. Pollak did not issue a separate Markman order; rather, in a carefully-crafted summary judgment opinion, he construed two limitations of claim 1 of the patent and found as a matter of law that neither limitation was present in the accused shoes. . . .

AFFIRMED

Notes:
[1] Fin Control v. OAM, 265 F.3d 1311, 1318 (Fed. Cir. 2001) (emphasis in original).
[2] Schoenhaus v. Gensco District Court Decision.

USPTO Seeks Suggestions for Strategic Plan

The PTO has requested suggestions on the agency's “new strategic plan” to help guide the Office’s operations for the next five years.Please e-mail suggestions to [email protected]. As a starting-point, the last strategic plan, from 2002, is available here: 21st Century Strategic Plan - Revised.

Ebay v. MercExchange: The Law of Patent Injunctions

eBay v. MercExchange (on writ of Certiorari 2006).

Later this month, the Supreme Court will hear this case to determine when a patentee should have a right to stop an infringer from making or selling unlicensed products once the patent has been found valid and infringed.  Because this issue is so fundamentally important to patent law, eBay v. MercExchange will likely be the most important patent case for the past decade.

As it stands, the Federal Circuit has a “usual rule” that once a plaintiff shows that a defendant infringes a valid patent, an injunction should issue.  According to the appellate court, the usual rule should be followed “absent special circumstances.”

In this case, a jury found that eBay infringed MercExchange’s patent, but the court refused to issue an injunction. Stating the “usual rule,” the Federal Circuit reversed, finding that an injunction should issue.  Now, Supreme Court has agreed to hear the case and determine the proper standards for issuing an injunction.

In January, eBay and its supports filed their briefs asking the court to overturn the Federal Circuit’s usual rule.  Respondent’s brief was due Friday, March 10, 2006. The following is a short review of the briefs in-hand.

Respondent MercExchange’s Brief: MercExchange’s brief is one of the best that I have ever read. In a twelve-page fact section, MercExchange tells its story and leaves little doubt that it will likely win its case, regardless of the rule eventually created by the high court. 

On the legal issues, MercExchange argues that the CAFC’s “usual rule” has been mischaracterized by eBay as an “automatic injunction” provision. Rather, the patent holder argues that courts have discretion to deny injunctions. The “usual rule,” they argue, flows naturally because it is only in “rare cases” that “any balance of hardships or the public interest favor the adjudged infringer.”  Rather, “in most cases those factors will strongly favor the patent holder.”

MercExchange also discusses the fundamental nature of a patent. 

The patent right’s fundamental aspect—its sum total—is “the right to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States.”

It is this right to exclude and not a ‘right to damages’ that defines the essence of a patentee’s rights.

MercExchange then walked through each of the district court’s stated factors that it used to originally deny the permanent injunction:

• Willingness to license — According to MercExchange, it is “extraordinarily strange” to think that a patent holder’s willingness to license would be an indication that money damages may be adequate. (Land-owner example: you may allow your friends on your property, but may still want to exclude your enemies.)
• Business method patents — According to MercExchange, Congress should address this issue.
• Pending reexamination of MercExchange patents — According to MercExchange, this issue “is not properly before this court.”
• Non-practice — MercExchange tried for years to practice the invention, and it does license its invention, which is as good as practicing the invention.  
• Contempt proceedings — The threat of contempt proceedings against eBay for violating an injunction should not stop the court from issuing an injunction.
• Failure to seek a preliminary injunction — MercExchange argues that this litigation strategy should not be held against it, and that requiring PI requests before granting permanent injunctions would further complicate the patent litigation procedure.

MercExchange’s only vacuous argument comes at the end where it essentially argues that all patentees are trolls to some extent because every patent includes at least some claim-scope that is not being practiced.

Government Brief: In the BlackBerry case, the Government sided with RIM, asking the district court to not issue an injunction.  Here, however, the DOJ has apparently flipped and now supports MercExchange. 

The Government argues that this case really involves a minor slip-up by the CAFC.  That court simply did not “adequately articulate” the principles regarding equitable relief. However, the Government argues that the court of appeals did reach the correct decision.

This position goes along with my own thoughts that the Supreme Court will hold that a court should weigh the pros and cons of an injunction before shutting down an infringer, but that there will still be a strong presumption that an injunction will grant — especially when the infringement is willful. 

* Query whether this brief provides any general indication of the Republican party stance regarding patent injunctions? [WSJ Blog][AuctionBytes][Patent Hawk]

Academics take sides: Two major groups of law professors have taken-sides in the debate.  First, a group of fifty-two patent-law professors, led by Mark Lemley of Stanford, filed a brief in support of eBay.  They argue that court’s should be given discretion to deny injunctive relief – even if such discretion is not used regularly or often.  The patent-law professors also make a distinction between a district court’s refusal to grant an injunction and a compulsory licensing scheme. (Patent-Law Professors Brief).

On March 10, a new brief, filed by nine professors of Law and Economics (L&E) takes the other side.  Professors Richard Epstein, Scott Kieff and Polk Wagner filed the brief in support of respondent, MercExchange.  They argue that the patent-law prof. brief “confuses the issues and muddies the waters in ways that weaken the structure of exclusive patent rights on which today’s elaborate system of licenses and other voluntary agreements rest.”

The L&E Professors take the position that the Federal Circuit’s jurisprudence is correct, and that “injunctions should generally issue except in those unusual cases in which good cause is shown for denying that form of relief.”  Where the L&E brief differs from the patent-law prof. brief is in the proposed route for determining when to refuse an injunction.  Specifically, the L&E brief argues that any exceptions to the general rule must fall within a specific category of exception, while the patent-law professors focus on more discretionary or ad hoc determinations.

PhRMA: PhRMA is an industry group that includes the major U.S. pharmaceutical research companies. The business models of those companies rely heavily on patent rights to protect innovations that may cost hundreds of millions to develop. PhRMA argues that the billions spent on R&D is predicated on assurances that the resulting IP rights will be strongly protectable.  This case threatens that long-held belief.

The industry group also notes that, if a hardship balance is considered, that the infringer’s hardship should not be considered when the hardship results from its obligation to stop infringing.

BIO: Like PhRMA, the members of the Biotechnology Industry Organization (BIO) argue that the right to injunctive relief is “vital in ensuring innovation” in their industry.  BIO quoted the 1824 case of Ex parte Wood for the proposition that our common law history unquestionably supports a strong right to injunctions against infringers.

The securing to inventors of an exclusive right to their inventions, was deemed of so much importance, as a means of promoting the progress of science and the useful arts, that the constitution has expressly delegated to Congress the power to secure such rights to them for a limited period. The inventor has, during this period, a property in his inventions; a property which is often of very great value, and of which the law intended to give him the absolute enjoyment and possession.

Ex parte Wood, 22 U.S. (9 Wheat.) 603, 608 (1824) (Story, J.) (emphasis added). Bio also favorably cites Hal Wegner’s article for the proposition that a compulsory license may well “run afoul” of the U.S. obligations under TRIPS.

GE, 3M, P&G Du Pont, and J&J: The group of industry giants support the presumptive right to an injunction that is “deeply rooted in the Constitution, the Patent Act, and 200 years of judicial precedent.”  This brief directly addresses eBay’s statutory hook of 35 U.S.C. 283, which only allows that courts “may grant injunctions in accordance with principles of equity.”  To quote Justice Marshall: “discretion is a motion, not to its inclination, but to its judgment; and its judgment is to be guided by sound legal principles.” I.e., a lower court’s discretion does not indicate that there should not be a strong presumption.

Rembrandt IP Management: Rembrandt is a “non-practicing entity” or NPE — meaning that it is a company that invests in patents but does not practice them. Rembrandt’s brief outlines the beneficial role that NPE’s can perform in the marketplace and in furtherance of the goals of the patent system. For instance:

• Patent rights, like other property rights, benefit the community most when they are freely transferable.  Limiting the rights of certain patent holders practically limits the right to transfer.
• Independent inventors and university researchers often have a niche in developing new ideas and new technology, but do not have the capital or the necessary tools to successfully bring products to market — inventors should not be penalized for not having a marketing wing.

Rembrandt also makes the point that without the threat of injunctions, “a well-funded infringer either would not take a license from an independent inventor at all, or would do so on a playing field that vastly favored the infringer.”

Intellectual Ventures: Intellectual Ventures has not been publicly termed a troll — perhaps because they have thus far been able to obtain licenses without litigation — but the secretive Washington State company does have a very high PPR (patent to product ratio).  Two dozen well known inventors signed-on to Intellectual Venture’s brief to send their message patent exclusivity promotes the progress of science and technology and promotes investment in research.  Perhaps more than any other groups, small entities and individual inventors rely on the potential for exclusivity to protect their work and to provide the incentive to research and develop new products.

Qualcomm: QualComm is an interesting story.  They used-to manufacture products, but now they primarily invent, design, and license.  They have proven that a big company can be competitive even when their only product is intellectual property.

Qualcomm and its co-amicus Tessera argue that eBay’s brief wrongly characterizes the patent marketplace. eBay and its supporters contentions of a “broken patent system” is not supported by the evidence.

This case itself shows that willful infringers are not cowed by the prospect of an injunction after an unsuccessful litigation defense and are not coerced into any settlement. To the contrary, large corporate infringement defendants often pursue a scorched earth defense strategy, particularly when they are sued by smaller entities.

Qualcomm also makes the important point that if eBay’s proposed changes were effectuated, they would result in a patent’s value depending upon the category of the owner — rather than on any intrinsic value of the claimed invention. “That world would be a distortion of the marketplace. The value of property should not depend on legal rules that are different for different owners.” 

ABA: The American Bar Association has sided with the patent holder MercExchange, arguing that the longstanding role of injunctions in patent cases should continue.  Interestingly, the ABA makes the novel argument that if we were to apply any new equitable considerations, those are “properly addressed” by Congress, not by the federal courts.

COPIES OF THE BRIEFS:

• Party Briefs on the Merits
• EBay Brief 

• MercExchange Brief

• Amici Briefs on the Merits

• Supporting MercExchange (Strong Injunctions)
• U.S. Government Brief
• Intellectual Ventures and Inventors Brief
• L&E Professor's Brief
• BIO Brief
• PhRMA Brief
• Brief of GE, 3M, P&G Du Pont, and J&J
• Qualcomm Brief
• Brief of Rembrandt IP Management
• Brief of the University of California and other Research Universities
• AAU Brief
• United Inventors Brief
• ABA Brief
• Franklin Pierce Law Professors Brief
• Hoffberg Brief
• Supporting Ebay (Weaker Injunctions)
• Yahoo!’s Brief
• Electronic Frontier Foundation Brief 
• Brief of Professors Pollack & Reynolds
• Computer & Communications Industry Association (CCIA) Brief
• Brief of Intel, Microsoft, Oracle, and Micron
• Brief of the Securities Industry
• Brief of Research-In-Motion
• Nokia’s Brief
• Brief of the Bar of the City of New York
• Business Software Alliance (BSA) Brief
• Brief of Time Warner, et al.
• Supporting Neither Party
• AIPLA & FCBA Joint Brief (Supporting a “general rule” of granting injunctions)
• Fifty-Two Law Professors Brief (asking for weaker injunction provision)
• Teva’s Brief (asking for weaker injunctions)
• Bar Assn. of the District of Columbia’s Brief (cautioning about meddling in a political issue)
• IBM’s Brief (equitable principles must be examined)

• Briefs for/against Certiorari:

• Professor Brief.pdf (50 KB)
• eBay Brief.pdf (4452 KB)
• MercExchange Brief.pdf (3480 KB)
• CCIA Brief
• EFF brief 
• Qualcomm
• Other

• Supreme Court Docket.

 * cite as Dennis Crouch, Review: EBay v. MercExchange Amici Briefs, Patently-O, March 13, 2006, available at http://www.patentlyo.com.

 

Phillips v. AWH: Aftermath

In the aftermath of Phillips v. AWH (Fed. Cir. 2005, en banc), the case was re-tried before a Colorado jury. Results are below. (screen capture from the March 10 hearing transcripts).  A post-trial hearing is reportedly scheduled for next week.

• File Attachment: Phillips v. AWH Hearing Transcript.
• Bag & Baggage

USPTO Claim Language Interpretation: Must be "Reasonable" in Light of All the Evidence

In Re Michael C. Scroggie (Fed. Cir. March 13, 2006) (NONPRECEDENTIAL)

by Joseph Herndon

In a non-precedential opinion, the Fed. Cir. affirmed in part and reversed in part a decision of the USPTO Board of Patent Appeals (the "Board"). Mr. Scroggie appealed the Board’s decision affirming a final rejection of his patent application having claims directed to a method for generating a web page (including the limitations "generating page data" and "personalized web page").

The Fed. Cir. stated the general principle that since during prosecution, claims “must” be given their "broadest reasonable interpretation," this court reviews the Board’s interpretation of disputed claim language to determine whether it is "reasonable" in light of all the evidence before the Board.

Scroggie argued that a hyper-link is not a web page, but rather a logical address that when selected, directs the user to a known web page. The Fed. Cir. agreed and held that the term "generating page data," as recited in the claims, requires that page data is "generated," not merely "selected." The court stated that the asserted prior art, which teaches "selecting" advertisements that contain hyper-links, does not teach or suggest "generating." Thus, the Fed. Cir. held that the Board’s construction of "generating page data" was unreasonable and its conclusion that the prior art teaches that limitation was unsupported by substantial evidence.

On another note, the court further held that a web page may be considered "personalized" because (i) the contents of the page transmitted to the user are themselves specific to the user, or (ii) the page was chosen to be transmitted to a user based on the user’s personal data. In this case, the court noted that because the term "personalized web page" can reasonably be construed to mean either type of "personalized," and because the prior art discloses the latter type, the claims including this limitation were reasonably interpreted by the Board and its conclusion that the prior art teaches this limitation was validly supported by substantial evidence.

The Fed. Cir. did not elaborate on any requirements for the Board to meet the "reasonable interpretation" requirement, or the amount of evidence that would be sufficient to do so.

Note: Joseph Herndon is an assiciate at the intellectual property firm of McDonnell Boehnen Hulbert & Berghoff.  Joe has a stellar background in electrical engineering and handles both patent prosecution and litigation. [email protected].

 

Comments On the PTO's Proposed Change in Continuation Practice

In January 2006, the PTO proposed dramatic changes to patent continuation practice that would essentially allow only one continuation, continuation-in-part, or RCE per application. [Link] 

It turns out that patent attorneys are steamed about this proposal.  At a recent town-hall meeting in Berkeley, the audience was reportedly “ready to throw eggs at the [PTO] speaker” who was attempting to explain why the change is necessary.

An anonymous Patently-O reader has submitted the attached paper with his thoughts on the subject. [DOWNLOAD PAPER].  This paper presents a well reasoned, diplomatic argument for why the changes to continuation practice should not be implemented. 

A number of commentators were not so diplomatic.  Mark Harrington of Harrington & Smith came right to the point:

As a patent practitioner with over 20 years of experience, I want to ask: Who was the [BEEP] that proposed this rule change? If you wanted to make patent practitioners angry, you have succeeded. If you attempt to make this proposed rule change final, we will go to Congress to have it changed.

Although comments on the rule changes are not due until early May, 2006, a number of comments have already been submitted to the PTO. 

A. Corporations

1. Hitt Gaines, P.C. [PDF]
2. Luminetx Corporation [PDF]
3. PowerDsine Ltd. [PDF]

B. Law Firms

1. Alston & Bird LLP [PDF]
2. Harrington & Smith, LLP [PDF]
3. JLJ, Inc. [PDF]
4. Kremblas, Foster, Phillips & Pollick [PDF]
5. Lacasse & Associates, LLC [PDF]
6. Martine Penilla & Gencarella, LLP [PDF]
7. Mayer, Brown, Rowe & Maw LLP [PDF]
8. Nath & Associates [PDF]
9. Sonnenschein Nath & Rosenthal LLP [PDF]
10. Thorpe North & Western, LLP [PDF]
11. Trexler, Bushnell, Giangiorgi, Blackstone & Marr [PDF]

C. Individuals

1. Bromer, Nick [PDF]
2. Dove, Barry [PDF]
3. Eilberg, William [PDF]
4. Freedman, Immanuel [PDF]
5. Grogan, Ray [PDF]
6. Hand, Francis [PDF]
7. Herrick, William [PDF]
8. Huston, Chad [PDF]
9. Looper, Valerie [PDF]
10. Mouttet, Blaise [PDF]
11. Orange, David [PDF]
12. Rajesh, Elaine [PDF]
13. Schindler, Edwin [PDF]
14. Steinberg, Dan [PDF]
15. Vanderhye, Bob[PDF]
16. Washburn, Brian [PDF]
17. Milton Honig [PDF]

Patently-O TidBits -- King of the Submarine.

Bill Friedman filed his patent application on October 23, 1936 on a new cryptographic system. The patent finally issued some 64 years later as U.S. Patent No. 6,130,946. Can you find any currently viable patent with an earlier filing date?

 

* This tidbit came from the great discussion ongoing at the Patent Information User's Group about record-holding patents (longest pending, most claims, etc.). 

UPDATE: A reader found Patent No. 6,097812 by the same inventor.  It is still viable, but the filing date was July 25, 1933!

USPTO's Electronic Initiatives

Electronic Patent Filing: On March 17, the Patent Office (PTO) is scheduled to release its brand-new Electronic Filing System for filing patent applications through an online format.  Beta tests show that the new system works well, is easy to use, and will quickly become the preferred mode of operation for your firm. 

The new system operates using PDF documents.  Although there are other options available, you will likely want to purchase a full version of Adobe Acrobat so that you can easily create and manipulate PDF documents.

On March 20, the PTO will hold a training session through an online webcast.  Register here.  A discussion with electronic filing guru Carl Oppedahl is available through Rethink(IP).

Electronic Access to Patent Files: The PTO has implemented a new version of “Private PAIR” that can be used to easily access the prosecution history of pending patent applications.  Larry Aaronson, a partner at MBHB put together the following notes on starting-up the new system:

First access the Private Pair page through this link.

Next, in the "Select Digital Certificate" box, you will need to enter the full path and file name of your .epf file, which you can do easily by clicking on the "Browse..." button, and browsing to the file on your hard drive. Your .epf file is likely located on your hard drive in the "c:\program files\uspto" folder. It is typically named yourname.epf (where "yourname" is your last name). You can feel free to rename that file and/or copy it to a more convenient location on your computer. The important point is that you know where it is, so you can provide its path and filename when prompted.

Finally, in the "Enter Password" box, you will need to enter your password. That's the same password you used for accessing private PAIR before the change.

Other notes:

If you previously did not have access to private PAIR, you will not have an .epf file. Registered attorneys/agents can contact the PTO Electronic Business Center (866-217-9197 or 571-272-4100) to establish a digital certificate (and thus get an .epf file).

A registered attorney/agent's .epf file can be copied to an assistant's computer, or to a home computer, to allow access in the manner described above as well from the other computer. I.e., more than one computer can use the same .epf file. The PTO might have limitations on how many computers can concurrently use the same .epf file, so don't copy it to more than one or two other computers.

The above procedure works on both PCs and Macs.

Electronic Patent Assignments: In an previous post, Blair Hughes provided easy-to-use directions for electronically filing patent assignments.

DRM Allowed Once Again in France

Monsieur Stephane P v. Universal Pictures Video France

Last April, I reported that in France, the right to privacy includes a right to copy DVDs for personal use. [Link].  That case, involving the movie Mulholland Drive, has been overturned, and now DVD makers can once again use hard-wired Digital Rights Management (DRM) as a form of copy-protection to protect the “legitimate interests of authors.”

Links:

• DRM Blog
• Cathy Kirkman
• Bloomberg
• In French: here and here.

Senate Proposal Would Limit 30-Month Automatic Stay of ANDA Approval

If a generic manufacturer wants to begin selling a pharmaceutical drug before the innovator company’s patent is expired, the generic can file an Abbreviated New Drug Application (ANDA) with the FDA along with a certification that asserts that either (i) the patents listed in the Orange Book are invalid or (ii) the listed patents do not cover the generic’s product.  This certification is known as a “paragraph IV certification.”

Once an ANDA is filed, the patent holder has a strong incentive to act quickly to charge the generic with infringement.  If charges are filed within 45 days, an automatic statutory stay is triggered that delays approval of the generic’s ANDA for thirty-months.

Senators Stabenow (D, MI) and Lott (R, MS) have recently submitted a bill (S.2300) to the Senate that would allow courts to shorten the thirty-month stay based on a “totality of the circumstances, including whether the plaintiff sought to extend the discovery schedule, delayed producing discovery, or otherwise acted in a dilatory manner, and the public interest.  According to the Bill, this is necessary to “prevent[] abuse of the thirty-month stay-of-effectiveness period.”  The Bill would actually require that approval take place at least by the end of thirty-month months, thus preventing any further delay.

The proposal also limits the extent that patent exclusivity can be extended in return for ensuring pediatric safety and effectiveness.

Shape Blog -- Thinking Outside the Box

The CAFC has continued to decimate the value of design patents[1], but there are real ways to protect your three-dimensional designs.  How? Read the Shape Blog.

Practitioners experienced in trademark, trade dress, copyright and patent law will provide news and commentary on the legal treatment of design and any object that incorporates design.

Design Patent: Ordinary Observer Test Must Examine Design as a Whole

Amini Innovation v. Anthony California (Fed. Cir. 2006, 05–1159).

Furniture is often protected by both copyrights and design patents. Amini sued Anthony for both copyright and design patent infringement. The district court granted summary judgment of non-infringement on both counts, and Amini appealed.

Design patents: Design patents infringement is proving by overcoming two tests: the ordinary observer test and the points of novelty test.  The ordinary observer tests looks at the design as a whole, while the novelty test looks at individual elements of the design.  The CAFC found that the lower court had erred in its use of the ordinary observer test by analyzing “each element separately instead of analyzing the design as a whole from the perspective of an ordinary observer.” Reversed.

Copyright: Unlike patent infringement, liability under copyright laws require some evidence of copying.  This is often satisfied by showing that the defendant had access to the protected design before creating the accused design. The Ninth Circuit operates under an “inverse-ratio rule” that requires a lesser showing of substantial similarity when there is a strong showing of access.

To assess similarity, the Ninth Circuit uses a two-part analysis: the extrinsic test and the intrinsic test. The extrinsic test is an objective test that compares specific expressive elements while the intrinsic test focuses on what an ordinary reasonable audience would think.  Here, the district court erred by expanding its application of the extrinsic test to the “total concept and feel of the work.”

CAFC Affirms dismissal of German claims

Dr. Bonzel v. Pfizer (Fed. Cir. 2006).

Bonzel, a German residing in Germany, originally sued Pfizer and others in Minnesota state court for breach of contract (patent license) — but asserted that patent infringement was not an issue. The Minnesota court dismissed on grounds of forum non conveniens — finding that the case should be decided under German law by German courts.

Bonzel refiled in Federal Court, and included assertions of patent infringement, but his case was again dismissed.  On appeal, the Court of Appeals for the Federal Circuit affirmed the dismissal.

Issues

Judicial Estoppel: Judicial estoppel applies “when a party takes a later position that is inconsistent with a former position in the same dispute, on which the party had been successful and had prevailed based on the former position.  The CAFC found no judicial estoppel with regards to Bonzel’s earlier assertions of “no patent infringement” because the complaint was “sufficiently changed.”

Patent Jurisdiction: Bonzel’s charges of breach of contract do not “arise under” the patent laws — even though the breach of contract charges would likely require a determination of whether infringement occurred.

Diversity: The court did not have diversity jurisdiction because foreigners were on both sides of the v.

National Treatment: Bonzel also argued that dismissing his case was not allowed under the Paris Convention’s requirement that a nation’s courts give “equal treatment to nationals of other nations.”  Here, Bonzel argues that his case is being dismissed because he is a German. The CAFC disagreed, finding that the treaties do not “establish jurisdiction or require a nation’s court to receive litigation that it reasonably believes would be better conducted in another nation.”

THE WAR IS OVER: NTP and RIM Settle.

After years of high-profile legal battles, NTP and Research-in-Motion (RIM) have reportedly settled their patent dispute over RIM’s BlackBerry system. According to the press release:

RIM has paid NTP $612.5 million in full and final settlement of all claims against RIM, as well as for a perpetual, fully-paid up license going forward. This amount includes money already escrowed by RIM to date.

The settlement, widely expected for the past year, will likely bring to a close the wild ride at NASDAQ. (RIMM).

An appropriate reader comment:

Actually, I’m rather sorry to see this settlement. All the media hype and nonsense, plus the fears of politicians of losing their service, seemed to be greatly contributing to patent reform momentum and to the Supreme Court taking more patent cases.

But at least the belated but initially effective RIM reexaminations of the patents in suit served to publicly demonstrate reexamination effectiveness in lowering settlement expectations. And without all the lawsuit publicity the reportedly cited obscure prior art Norwegian university publications would probably never have surfaced.

On the Reexaminations: A settlement could include a provision that NTP must return RIM's money if the patents were eventually invalidated. However, considering NTP's stance thus far, such a provision would be exceedingly unlikely. Consequently, I expect that the continuing reexamination of NTP's patents at the PTO will become more of a curiosity than a business concern. The only way that NTP can stop the reexamination process would be to capitulate to the PTO and thus abandon the patents.

 

How do Your Arguments Look in the Mirror?

Maytag v. Electrolux (N.D. Iowa 2006, 04-4067).

Maytag sued Electrolux for infringement of its patents relating to the design of a washing machine basket.  After a Markman hearing, Chief Judge Bennet began his claim construction decision with an “excerpt from a remarkably wise children’s story:”

  “When I use a word,” Humpty Dumpty said, in rather a scornful tone, “it means just what I choose it to mean—neither more nor less.”
  “The question is,” said Alice, “whether you can make words mean so many different things.”
  “The question is,” said Humpty Dumpty, “which is to be master—that’s all.”

Lewis Carroll, Alice’s Adventures in Wonderland and Through the Looking Glass 219 (George Stade ed., 2004) (1871). According to Judge Bennet, “[t]he irony in this case is that it is not altogether clear to the court just who is being Humpty Dumpty.” 

One innovative approach taken by the judge was to present a draft claim construction decision to the attorneys well before the Markman hearing as a way to help focus the hearing.  According to the Court, the experiment was a great success.

 

Patently-O E-mail Distribution Notice

Along with the 35,000 weekly Patently-O website readers, there are also about 3,500 readers who subscribe to the blog through a daily e-mailer.  Up to now, I have been using a service known as Bloglet.  Unfortunately, Bloglet has been unreliable and because it is a free service, Bloglet offers absolutely no customer service.

In light of those problems, I have switched the e-mail service from Bloglet to FeedBlitz. I will leave Bloglet running for the next couple of days (so that you get this message) and then turn it off.  You should automatically begin receiving the FeedBlitz e-mails from the e-mail address [email protected] (put that in your white-list).  If there is a hitch, you can sign-up for the mailing list using the form in the upper-right corner of the blog.

Of course, if you were signed up anonymously with Bloglet, I could not transfer your account (because I don’t know who you are).  You will need to re-up using the form in the upper-right corner of the blog.

About the mailing list: Rather than sending entire posts (that are occasionally long), the e-mail only contains a snippet from each post. Html links will be provided for users to click-through to the full text articles. If you decide that you do not like getting the e-mail, it is quite easy to unsubscribe. Each daily e-mail includes an unsubscribe link, all you have to do is click on the link and your subscription will be cancelled.

I'm not going to distribute your e-mail address to anyone except for my secretary. However, I may e-mail you personally to see whether you have any suggestions for or comments on the patent blog.

Supreme Court Eliminates Presumption of Market Power in Patent Antitrust Cases

Illinois Tool Works v. Independent Ink (2006, 04-1329)

By Israel Encinosa

In an 8-0 decision (Justice Alito took no part), the United States Supreme Court has reversed the Federal Circuit's decision in Illinois Tool Works, Inc. et al. v. Independent Ink, Inc., and expressly overruled some of its own prior rulings, holding that the mere fact that a tying product is patented does not support a presumption of market power.

The Court characterized the question before it as “whether the presumption of market power in a patented product should survive as a matter of antitrust law despite its demise in patent law.” The Court noted that the presumption that a patent confers market power originally arose outside the antitrust context as part of the patent misuse doctrine, and migrated to antitrust law in International Salt Co. v. United States, 332 U.S. 392, and its progeny. The Court further noted that while Congress continually chipped away at the presumption, ultimately amending the Patent Code to eliminate the presumption in the patent misuse context, the Court's antitrust jurisprudence, in contrast, continued to rely on it.

Today’s decision marks a decisive shift in the Court’s antitrust jurisprudence as the Court clearly rejected the presumption of per se illegality of tying arrangements involving patented products. The Court ruled that "any conclusion that an arrangement is unlawful must be supported by proof of power in the relevant market rather than by a mere presumption thereof," and moreover, that "because a patent does not necessarily confer market power upon the patentee, in all cases involving a tying arrangement, the plaintiff must prove that the defendant has market power in the tying product."

In addition to rejecting the per se rule, the Court also declined respondent’s invitation to "endorse a rebuttable presumption that patentees possess market power when they condition the purchase of the patented product on an agreement to buy unpatented goods exclusively from the patentee."

NOTE: Israel Encinosa is an attorney at Kirkland & Ellis where he focuses his energy on antitrust law and commercial litigation. He graduated from the University of Chicago Law School.

Does the Wall Street Journal Understand Patent Law?

Last year I had a refreshing course in the positive power of patenting. We had sued a handful of companies for infringement.  They were clear copy-cats, and the cases quickly settled.  Several months later, our client sent an e-mail showing the competitors’ new product lines.  They had gone back to the drawing-board and created what was arguably a design that was even better.  Consumers are the beneficiaries with better products and even more competition.  America has always been a place of innovation — and in this case it was our patent system that forced the free-loaders to take some initiative. 

I had two companies approach me this week about patent work. They are both small businesses who want to go global.  They believe that they have great innovations, but the only way that they will have get a fair shake in the world of investors and business development is if they begin the process of securing their IP rights. 

As you may know, I am up-beat about our patent system.  Despite the bad press, there are genuine success stories that continue to drive the uniquely American innovative spirit.  Lets bring about legislative and PTO reforms to fix the problems — and I believe that there are problems — but the system is far from broken.  A complete overhaul makes interesting press, but it is not the right solution.

With all this on my mind, I was saddened by today’s Wall Street Journal’s editorial that “blame[s] the lawyers.”  Here are highlights from the paper:

• Patents now operate to deter research and penalize innovation.
• Patent cases are dubious if they involve patent-holders who never commercialized their inventions.
• A third party has no standing to challenge a patent unless he is accused of infringing it.
• The rise in filed patent applications “has less to do with genuine innovation than it does with innovative lawyers filing a patent on anything that moves.”
• “Blame the lawyers.”

Several online articles have already been written about the editorial.  Matt Buchanan takes real issue with the over-arching blame game being played by the WSJ.  The Patent Baristas make several interesting points, including a note comparing the number of patents obtained by major corporations with those obtained by the so-called patent trolls.  This morning, an upset Patently-O reader e-mailed me about the editorial with the following comments:

Shouldn't the writer have consulted you to get a better balanced  and more educated viewpoint?

Of course, I am apparently not so high on the speed-dial of the WSJ editors, but Stephen Nipper found an interesting response:

“It is much easier to suggest solutions when you don't know too much about the problem.” - Malcolm Forbes.

Even the staunchly concervative IPO noted its problems with the editorial:

[T]he Journal asserted, "the percentage of [patent] approvals has climbed; approvals were close to 90% in 2000, up from 69% in 1984 . . . ." Contrast the recent speech by USPTO Director Jon Dudas at the AIPLA meeting in Palm Springs, California, in which he said approvals are now less than 60%.

CAFC: The difference between permissible repair and impermissible reconstruction cannot turn on minor details

Jazz Photo v. U.S. (Fed. Cir. 2006, 05–1096)

In its fourth trip to the Court of Appeals for the Federal Circuit, the U.S. Gov’t (and Fuji Film) appealed a final judgment from the Court of International Trade (CIT) that released certain Jazz disposable camera’s that had been denied entry by Customs and that ordered Customs to allow Jazz to segregate the imported shipments between permissible and impermissible imports.

Jazz refurbishes the disposable cameras in Asia and (re)imports them to the U.S.  Some of the refurbished cameras were originally sold in the U.S. and thus could be permissibly repaired, while others were originally sold outside the U.S., and their import could be blocked. (See Exhaustion).

The Gov’t argued that even under the first-sale doctrine, Jazz Photo’s reimportation of cameras should be blocked because Jazz’s work on the cameras crossed the line from “permissible repair” to “impermissible reconstruction.”  Here, the appellate panel sided with Jazz Photo.

While there is no bright-line test for determining whether a device has been permissibly repaired, it does not turn on minor details. . . . Moreover, even if the trial court did not identify the specifics of each minor operation, the fact that they were incidental . . . indicates that the court considered them to be known processes that were permissible repair. We thus discern no error in the court’s conclusion that those "various minor operations" did not make a new single use camera and thus constituted permissible repair.

The CAFC also affirmed the lower court’s order requiring Customs to support the segregation of shipments:

Customs is obligated [under 19 CFR § 19.4(b)(1)] to supervise certain activities in its warehouse and that supervision is mandatory, not discretionary. . . . Because Customs was required to supervise the segregation of the subject LFFPs in its warehouse, we see no error in the trial court’s order.

Affirmed.