Intellectual Property Matters

Bill to establish revolving fund for PTO supported by ABA

garnold@arnold-iplaw.com (Gordon Arnold) — 2009-03-31T14:12:09Z

An amendment to the Patent Reform Act of 2009 is expected soon from
Senator Coburn that would establish a "revolving fund" for the PTO.
Such a fund would make diversion of fees from the PTO more difficult.

The Section of Intellectual Property Law of the American Bar Association
established policy in opposition to the fee diversion practice and
persuaded the Association to adopt that policy. The Section's efforts
resulted a letter confirming Association's support of the revolving
fund. A link to the letter the Association sent to Senator Leahy and Senator
Specter can be found at the following link:

ABA Letter in Support of Coburn Amendment

Tafas summary

garnold@arnold-iplaw.com (Gordon Arnold) — 2009-03-20T18:26:53Z

1. USPTO does not have substantive rule making power.

2. USPTO's interpretations of statutes that pertain to the USPTO's delegated authority are entitled to Chevron deference. The Final Rules are procedural.

3. Rule 78 is invalid because it attempts to add an additional requirement to for a third continuation that is not in Section 120 - that the application not contain amendments, arguments, or evidence that could have been submitted earlier. The Final Rule limits continuation applications on the basis of the total number of such applications previously filed, not on the length of a given serial chain of such applications.

"We agree that the USPTO has "inherent authority to govern procedure before the PTO, and that authority allows it to set reasonable deadlines and requirements for the prosecution of applications." Id. at 1368. However, under Bogese, the USPTO cannot set requirements that conflict with Â§ 120 unless those requirements comport with a proper application of prosecution history laches. There are no "firm guidelines" for determining when prosecution laches exists. Symbol Techs., Inc. v. Lemelson Med. Educ. & Research Found., 422 F.3d 1378, 1385 (Fed. Cir. 2005) ("Symbol IV"). However, it is limited to cases of "unreasonable and unexplained delay in prosecution." Id. at 1384-85. We need not address the precise boundaries of the USPTO's authority to promulgate rules under Bogese because Final Rule 78 is far too restrictive to fall within the scope of prosecution history laches. The rule operates on an applicant's third continuation application without regard to when it was filed, even if the delay is significantly shorter than any of the delays in our prior prosecution history laches cases."

4. Rule 114, restricting RCE's, is valid.

5. Rules 75 and 265 are valid. They address "Examination Support Document" ("ESD") requirement. They do not impose a limit on the number of claims an applicant can pursue; they require that an ESD be submitted if more than five independent or twenty-five total claims are included in certain sets of copending applications. The ESD does not shift the burden away from the PTO to prove unpatentability.

Link to Tafas opinion

Federal Circuit renders claims obvious as "predictable variations"

webinquiry@arnold-iplaw.com (IP Matters Blog) — 2009-02-10T15:22:00Z

Relying on the "obvious to try" language in the Supreme Court's KSR decision, the Federal Circuit rendered claims to a candle holder obvious. The claimed recieted a base with a cap that could be used as a stand for the candle holder's base. In the February 9, 2009 opinion, the Federal Circuit reviewed the prior art and analyzed the obviousness question as follows:

The combination of a cover-stand and feet on the bottom of the candle holder was obvious to try in an effort to minimize scorching, as the combination would further raise the bottom of the candle holder above the supporting surface. The resulting, and desired, decreased heat transfer between the candle holder and the supporting surface from the combination would have been entirely predictable and grounded in common sense.

Slip op. at 13. It went on to explain that, under KSR, the analysis of obviousness should be made explicit, but the teachings in the prior art of a motivation to combine to not have to be. Slip op. at 14. The Federal Circuit also criticized the district judge for "failing to take account of the 'inferences and creative steps,' or even routine steps, that an inventor would employ ..." Slip op. at 15.

Characterizing the evidence of commercial success as "minimal," the Federal Circuit held they did not outweigh the "clear indication of obviousness apparent from the prior art." Slip op. at 16, citing Leapfrog Enters., Inc. v. Fisher-Price, Inc., 485 F.3d 1157, 1162 (Fed. Cir. 2007).

A link to the slip opinion is below:

Ball Aerosol and Specialty Container, Inv. v. Limited Brands, Inc. CA. No. 2008-1333 (Fed. Cir., February 9, 2009)

Federal Circuit: Capability of performing in infringing manner is not necessarily direct infringement.

webinquiry@arnold-iplaw.com (IP Matters Blog) — 2009-02-10T14:52:00Z

On February 9, 2009, the Court of Appeals for the Federal Circuit addressed whether a claim to an apparatus that is "reasonably capable" of being configured to meet the functional limitations of the claim is infringed by the seller of the components of the apparatus. The court held that it is not.

The claim in the case was to a candle holder that included a limitation that one part had to be "resting upon" another part. The Federal Circuit said that, because there was no evidence that the parts had ever been placed in that configuration, there was no evidence of infringement.

The patent owner tried to argue that the infringing product was capable of such an arrangement. The Federal Circuit rejected the theory:

[The patent owner's] reliance on cases that found infringement by accused products that were reasonably capable of operating in an infringing manner is misplaced, since that line of cases is relevant only to claim language that specifies that the claim is drawn to capability. See Fantasy Sports Props., Inc. v. Sportsline.com, Inc., 287 F.3d 1108, 1117-18 (Fed. Cir. 2002) (clarifying that infringement is not proven per se by a finding that an accused product is merely capable of infringing because "in every infringement analysis, the language of the claims, as well as the nature of the accused product, dictates whether an infringement has occurred"). Here, the language of claims 1 and 5 of the ’969 patent specifies that infringement occurs only if the accused product is configured with the cover being used as a base underneath a candle holder with feet. That the Travel Candle was reasonably capable of being put into the claimed configuration is insufficient for a finding of infringement. See Acco Brands, Inc. v. ABA Locks Mfr. Co., 501 F.3d 1307, 1313 (Fed. Cir. 2007) (rejecting a "reasonably capable" standard for direct infringement). Rather, infringement requires "specific instances of direct infringement or that the accused device necessarily infringes the patent in suit."

A link to the case is below.

Ball Aerosol and Specialty Container, Inv. v. Limited Brands, Inc.

Even when "reasonable persons will disagree" over claim meaning, it is not necessarily indefinite

webinquiry@arnold-iplaw.com (IP Matters Blog) — 2009-02-09T17:25:57Z

In the Kinetic Concepts case (Feb. 2, 2009), the Federal Circuit confirmed a test from the 2001 Exxon case that, even though the task of claim construction may be "formidable," when the meaning is "discernible," the claim is definite.

The claim in the case addressed a method for treating a wound, and it had 2 basic steps. The first was the application of reduced pressure to the wound, and the second was maintaining the reduced pressure until "the wound has progressed toward a selected stage of healing." The first invalidity argument was that the part of the claim that described maintaining a reduced pressure until a "selected stage of healing" had been reached was indefinite because that the specification did not explain how the "selected stage" was to be determined "for particular wounds at particular times." Therefore, the argument was made, whether a wound had progressed to the "selected stage" was "wholly subjective."

In rejecting the argument, the Federal Circuit relied on examples of "selected stages" of healing in the patent's specification and a declaration from one of the inventors explaining "explaining that a doctor of ordinary skill in the art would understand how the selected stage of healing may vary from wound to wound." The court quoted on a 2001 case for the proposition that "[i]f the meaning of the claim is discernible, even though the task may be formidable and the conclusion may be one over which reasonable persons will disagree, we have held the claim sufficiently clear to avoid invalidity on indefiniteness grounds." Slip op at 17, quoting, Exxon Res. & Eng'g Co. v. United States, 265 F.3d 1371, 1375 (Fed. Cir. 2001).

A second argument was that the claim was indefinite because of a limitation that the wound show a reduction in bacterial density of at least 50%. They argued that, under the Honeywell case (Honeywell International, Inc. v. International Trade Commission, 341 F.3d 1332, 1339-40 (Fed. Cir. 2003), the claim was indefinite because "there are several methods for measuring bacterial density, each of which may yield a drastically different result, and a person of ordinary skill in the art would not know which method to use."

The court held that Honeywell did not control because the specification disclosed a particular method of how to calculate bacterial density. Slip op. at 18.

A link to the slip opinion is below.

Kinetic Concepts, Inc. v. Blue Sky Medical Group, Inc.

A link to the Sept. 2, 2008 memorandum of the Deputy Commissioner for Patent Examination Policy (John Love) interpreting recent opinions regarding indefiniteness for the examing corps is below.

Sept 2, 2008 Memorandum of DCPEP John Love to Technology Center Directors Regarding Indefininteness Rejections

Federal Circuit upholds jury verdict of no inducement - based on intent

webinquiry@arnold-iplaw.com (IP Matters Blog) — 2009-02-03T15:33:00Z

On Feb. 2, the Federal Circuit upheld a jury verdict that a defendant did not induce infringement, based on testimony that the defendant thought it was practicing the prior art. In response to the patent owner's argument that practicing the prior art is no defense to infringement, the court held that it can be a defense to inducement of infringement:

[The patentee] may be correct that "practicing the prior art" is not a defense to patent infringement. See Ecolab Inc. v. Paraclipse, Inc., 285 F.3d 1362, 1377 (Fed. Cir. 2002). However, it does not follow that a defendant’s belief that it can freely practice inventions found in the public domain cannot support a jury’s finding that the intent required for induced infringement was lacking. The jury heard [the defendant's] founders explain why they did not believe they were infringing and had the opportunity to assess their credibility. We find no basis to overturn the jury’s decision with respect to inducement.

A link to the slip opinion is: Kinetic Concepts, Inc. v. Blue Sky Medical Group, Inc., CA Nos. 2007-1340-42 (Fed. Cir. February 2, 2009).

Summary Judgment of Obviousness Reversed

webinquiry@arnold-iplaw.com (IP Matters Blog) — 2009-02-03T15:25:35Z

On January 30, 2009, the Federal Circuit reversed a district court summary judgment of obviousness. It did so for two reasons: (1) the district court erred in determining that the prior art taught all of the elements of the claims, and (2) the district court failed to give appropriate weight to the evidence of unexpected results. Specifically, the Federal Circuit criticized the district court for failing to address the so-called secondary considerations (a.k.a. "objective indicia" of non-obviousness), other than in a conclusory statement that the elements of the patent did not work together in an "unexpected manner."

A link to the slip opinion is below.

SUD-CHEMIE, INC. v. MULTISORB TECHNOLOGIES, INC., CA. No. 2008-1247, Slip Op at 12 (Fed. Cir. January 30, 2009).

Federal Circuit Holds Claimed Invention Obvious Based On Single Reference

webinquiry@arnold-iplaw.com (IP Matters Blog) — 2009-01-23T14:54:14Z

On Jan. 15, 2009, the Court of Appeals for the Federal Circuit invalidated a patent claim, reversing a district court determination that a defendant failed to show clear and convincing evidence that the claimed invention would have been obvious to a person of ordinary skill. The Federal Circuit held the claimed stent obvious in view of a single prior art reference. The holding resulted from an analysis that concluded the reference did not show a single example stent that had all the limitations of the claim, but it showed two examples which, if combined, would have every limitation:

We agree with Cordis that one of ordinary skill in the art would have been motivated to combine the embodiment in figure 3B of Wolff with the embodiment in figure 4 of Wolff to arrive at a metal stent with two coating layers. Combining two embodiments disclosed adjacent to each other in a prior art patent does not require a leap of inventiveness.

Boston Scientific Scimend, Inc. v. Cordis Corp., CA No. 2008-1073, slip op. at 15-16 (Fed. Cir. January 15, 2009).

The Court characterized the prima facie showing of obviousness as "strong" and rejected an argument that the objective indicia of non-obviousness presented at trial overcame it. Id. at 16.

Patent Pilot Program Bill Introduced

webinquiry@arnold-iplaw.com (IP Matters Blog) — 2009-01-22T22:33:00Z

On Jan. 22, Senator Specter and Congressman Issa introduced legislation to to establish a pilot program, in some US district courts, to have certain judges hear all patent cases in those districts. The provisions require that the district have at least 10 judges, 3 of which must have volunteered for the program. The district also must have adopted a set of local patent rules.

A copy of the bill is attached.

S 299 HR 628 Patent Pilot Program Bill

ABA Section of Intellectual Property Comments to Obama Transition Team

webinquiry@arnold-iplaw.com (IP Matters Blog) — 2009-01-21T15:56:37Z

Last week, the Section of Intellectual Property of the American Bar Association responded to a request from President Obama's transition team regarding intellectual property. The comments the Section submitted can be found at:

http://www.abanet.org/intelprop/TeamcommentsObama0109.pdf

Federal Circuit grants petition for Writ of Mandamus on Venue in Eastern District of Texas

webinquiry@arnold-iplaw.com (IP Matters Blog) — 2009-01-19T19:48:50Z

In In re TS Tech USA Corp., Misc. Docket No. 888 (Fed. Cir., December 29, 2008), the Court of Appeals for the Federal Circuit granted a petition for Writ of Mandamus, based on a denial of a motion to transfer venue. The Federal Circuit relied on the product liability mandamus case, In re Volkswagen of Am., Inc., 545 F.3d 304, 315 (5th Cir. 2008) (en banc) (“Volkswagen II”). The points of error the Federal Circuit found were:

(1)    the district court gave too much weight to the patent owner’s choice of venue, because the plaintiff’s choice of venue cannot be considered as a “distinct factor” in the 1404(a) analysis.

(2)    the district court failed to apply the “100-mile” rule, which requires that the factor of inconvenience to witnesses increases in “direct relationship to the additional distance to be traveled” if the witnesses are over 100 miles from the venue.

(3)    the district court considered the relative ease of access to sources of proof to be neutral.

(4)    the district court erred in analyzing the public interest in having localized interests decided at home, because, although the allegedly infringing products were sold in the district, they were sole throughout the US. Therefore, the citizens of the Eastern District had no more interest than the citizens of any other district.

In determining that the errors were sufficient for mandamus, the Federal Circuit noted that the errors were identical to the errors in the Volkswagen II case:

There is no easy-to-draw line separating a “clear” abuse of discretion from a “mere” abuse of discretion in all cases. Volkswagen II, 545 F.3d at 310. Nevertheless, we conclude that TS Tech has met its difficult burden of demonstrating a clear and indisputable right to a writ. As in Volkswagen II, the district court clearly abused its discretion in denying transfer from a venue with no meaningful ties to the case. In granting mandamus, the en banc Fifth Circuit found that the court’s denial of transfer was a clear abuse of discretion because it (1) applied too strict of a standard to demonstrate transfer, (2) misconstrued the weight of the plaintiff’s choice of venue, (3) treated choice of venue as a 1404 factor, (4) misapplied the forum non conveniens factors, (5) disregarded Fifth Circuit precedent, including the 100-mile rule, and (6) glossed over the fact that not a single relevant factor favored the plaintiff’s chosen venue. Id. at 318. Because the district court’s errors here are essentially identical, we hold that TS Tech has demonstrated a clear and indisputable right to a writ.

Court of Appeals for the Federal Circuit affirms dismissal of declaratory judgment action

webinquiry@arnold-iplaw.com (IP Matters Blog) — 2009-01-19T19:44:12Z

In a non-precedential decision on Jan. 6, 2009, the Court of Appeals for the Federal Circuit affirmed a district court’s dismissal of a request by a manufacturer to have another’s patent declared invalid or not infringed, when the patent owner had not threatened the plaintiff. The case is styled “Panavise Products, Inc. v. National Products, Inc., Case No. 2008-1444, 2009 U.S. App. LEXIS 52 (Fed. Cir. 2009).

Plaintiff Panavise argued that the district court erred by finding the lack of any communication or conduct by the patent owner toward Panavise as “dispositive.”

The Federal Circuit, in affirming, noted that there was a lack of evidence of an actual "controversy … based on a real and immediate injury or threat of future injury that is caused by the defendants--an objective standard that cannot be met by a purely subjective or speculative fear of future harm." 2009 U.S. App. LEXIS 52, p. 8, quoting Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1338 (Fed. Cir. 2008). It noted that lack of direct pre-complaint communications is not sufficient to defeat subject matter jurisdiction, but that is only one factor to consider. The court appeared to rely on the fact that Panavise did not provide any evidence that its product was similar to any product the patent owner had accused in other litigation. Id. There was also a declaration by the patent owner disclaiming knowledge of the Panavise product.

Anticipation: Is a "Standard" a Single Reference or Multiple Reference?

webinquiry@arnold-iplaw.com (IP Matters Blog) — 2008-10-22T17:38:12Z

Category: Patent Validity - Anticipation

On Oct. 14, 2008, the Court of Appeals for the Federal Circuit addressed the International Trade Commission's issuance of an exclusion order against the importation of all downstream products containing imports of Qualcomm that it had determined infringed Broadcom’s U.S. Patent No. 6, 714,983. The Federal Circuit agreed with the ITC that the patent had not been proven to be invalid, and that there was no direct infringement by Qualcomm. The Court sent the case back to the ITC on the question of infringement, holding that the ITC had misapplied the standard for induced infringement, and it vacated the exclusion order against the downstream products, holding that it was granted without authority. However, in determining that the patent had not been proven invalid, the court addressed whether the GSM standard (alleged to anticipate the patent) was a single reference or multiple documents, which would make the standard as a = whole unavailable in an anticipation analysis. The Federal Circuit affirmed the ITC's determination that the standard was not a single reference:

The different specifications that comprise the GSM standard were authored by different subsets of authors at different times. Indeed, the GSM standard includes hundreds of individual specifications drafted by approximately ten different subgroups, each with its own title and separate page numbering. Each specification, though part of the greater GSM standard, stands as a separate document in its own right. Even Qualcomm's witness--admittedly one of the most knowledgeable people in the world about the operation of GSM--testified that she had not read the entire standard and did not know of any person who had read the entire standard. Open Session Tr. 1712, Mar. 15, 2006. Under these circumstances, the GSM standard is actually several prior art references with separate dates of creation, rather than a single prior art reference.

Qualcomm also asserted that the various portions of the standard referenced each other, making the standard a single document, due to the concept of incorporation by reference. The Federal Circuit disagreed because each of the various documents "at most...identifies itself as a part of the greater GSM standard; specifications at time cross-reference other specifications." In a summary statement, the court also noted that the standard, as a whole could not be assigned "a single prior art date of creation."

An obviousness argument was not made regarding the effect of the various portions of the standard, taken together.

The case can be found at: 2008 U.S. App. LEXIS 21505.

Fed. Cir. remands ITC limited exclusion order against un-named importers

webinquiry@arnold-iplaw.com (IP Matters Blog) — 2008-10-22T17:37:46Z

Category: International Trade Commission - Exclusion Order

On Oct. 14, 2008, In the Kyocera case, the Court of Appeals for the Federal Circuit addressed the International Trade Commission's issuance of a limited (as compared to a “general”) exclusion order against the importation of all downstream products containing imports of Qualcomm that it had determined infringed Broadcom’s U.S. Patent No. 6, 714,983. The Federal Circuit vacated the exclusion order against the downstream products, holding that it was granted without authority.

The ITC has issued a "limited" exclusionorder against products that infringed, including products of downstream manufacturers who, importantly, were not named as respondents. The Federal Circuit held that a limited exclusion order was inappropriate and that to have an exclusion order against unnamed parties, the higher requirements of a "general" exclusion order had to be met. Those are: when it is "necessary to prevent circumvention of an exclusion order limited to products of named persons" or when "there is a pattern of violation...and it is difficult to identify the source of infringing products." Because a general exclusion order had not been issued, the limited exclusion order was vacated and the Commission was directed on remand to "reconsider its enforcement options."

The case can be found at 2008 U.S. App. LEXIS 21505

Fed. Cir. affirms rule of reason analysis of patent case settlement agreement

webinquiry@arnold-iplaw.com (IP Matters Blog) — 2008-10-22T17:36:59Z

Category: Patent Settlement Agreements

On Oct. 15, 2008, the Federal Circuit affirmed summary judgment that a settlement agreement in a patent case does not violate the Sherman Act.

Generic defendants in a drug case agreed not to market until after the patent expired and not to challenge validity. The patent owner agreed to make payments and optionally = supply the drug for resale. “Thus, the essence of the Agreements was to exclude the defendants from profiting from the patented invention.” Regarding the reverse payment, in footnote 11, the Federal Circuit said, “Indeed, a sizable exclusion payment from the patent holder to the generic manufacturer is not unexpected under the Hatch-Waxman Act, where the relative risks of litigation are redistributed.”

The Federal Circuit distinguished the 6^th Circuit’s case of In re Cardizem, where a per se violation was held:

In particular, the settlement in that case included, in addition to a reverse payment, an agreement by the generic = manufacturer to not relinquish its 180-day exclusivity period, thereby delaying the entry of other generic manufacturers. In re Cardizem, 332 F.3d at 907. Furthermore, the agreement provided that the generic manufacturer would not market non-infringing versions of the generic drug. Id. at 908 n.13. Thus, the agreement clearly had anticompetitive effects outside the exclusion zone of the patent.

Specifically, the Federal Circuit stated that a district court need not consider the validity of the patent in the antitrust analysis of a settlement agreement involving a reverse payment, in the absence of evidence of fraud before the PTO or sham litigation:

We disagree that analysis of patent validity is appropriate in the absence of fraud or sham litigation. Pursuant to statute, a patent is presumed to be valid, 35 U.S.C. [Section] 282, and patent law bestows the patent holder with "the right to exclude others from profiting by the patented invention." Dawson Chem. Co. v. Rohm & Haas Co., 448 U.S. 176, 215 (1980). A settlement is not unlawful if it serves to protect that to which the patent holder is legally entitled--a monopoly over the manufacture and distribution of the patented invention. In re Tamoxifen, 466 F.3d at 208-09.

The case is available at: 2008 U.S. App. LEXIS 21505

District Court feels bound not to allow enhanced damages for post-filing infringement in patent case

webinquiry@arnold-iplaw.com (IP Matters Blog) — 2008-10-22T17:35:03Z

On Oct. 9, the District Court of Illinois issued an opinion stating
that, although the Federal Circuit's comments regarding the relationship
between a request for preliminary injunction and enhanced damages for
infringement after filing of the case were dicta (In re Seagate, 497
F.3d at 1374), the court was still required to preclude the patent owner
from obtaining enhanced damages for infringement occurring after the
filing of the case. The District Court held the patent owner's "remedy
for any post-filing willful infringement was a preliminary injunction."

The holding is in GSI Group, Inc. v. Sukup Manufacturing, 2008 U.S.
Dist. LEXIS 80557.

Online CLE CD Order Form

webinquiry@arnold-iplaw.com (IP Matters Blog) — 2008-10-14T16:30:35Z

AIPLA Comments on Design Patents

webinquiry@arnold-iplaw.com (IP Matters Blog) — 2008-10-10T13:45:54Z

AIPLA comments on design patents as invited by the USPTO at the Town Hall Meeting on the Protection of Industrial Designs which it hosted on June 16 in Alexandria, Virginia, filed July 15, 2008.

AIPLA Comments on Proposed Changes to the PCT Transmittal and Search Fees

webinquiry@arnold-iplaw.com (IP Matters Blog) — 2008-10-10T13:45:54Z

Proposed Changes to the PCT Transmittal and Search Fees, filed August 15, 2008

MEP Award for "research & innovation" goes to Paul Rübig

webinquiry@arnold-iplaw.com (IP Matters Blog) — 2008-10-09T00:00:00Z

Sponsored by the EPO, the award was presented at a ceremony in Brussels on Wednesday night. The award recognises the Austrian's achievements in the field over the past 12 months.