Source: https://271patent.blogspot.com/
Timestamp: 2019-04-18 18:59:17+00:00

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This morning the Supreme Court released it's opinion in Microsoft v. i4i, and provided "clean sweep" support (10-0) that patents may only be invalidated under "clear and convincing" evidence.
Held: Section 282 requires an invalidity defense to be proved by clear and convincing evidence.
The Court rejected the "preponderance of the evidence" standard, noting that, while §282 provides no express articulation of the standard of proof, common-law terms in the statute are assumed to have a common law meaning.
Here, by stating that a patent is“presumed valid,” §282, Congress used a term with a settled common-law meaning. Radio Corp. of America v. Radio Engineering Laboratories, Inc., 293 U. S. 1 (RCA), is authoritative. There, tracing nearly a century of case law, the Court stated, inter alia, that “there is a presumption of [patent] validity [that is] not to be overthrown except by clear and cogent evidence,” id., at 2. Microsoft’s contention that the Court’s pre-Act precedents applied a clear-and-convincing standard only in two limited circumstances is unavailing, given the absence of those qualifications from the Court’s cases. Also unpersuasive is Microsoft’s argument that the Federal Circuit’s interpretation must fail because it renders superfluous §282’s additional statement that “[t]he burden of establishing invalidity . . . shall rest on the party asserting” it. The canon against superfluity assists only where a competing interpretation gives effect “ ‘to every clause and word of a statute.’ ” Duncan v. Walker, 533 U. S. 167, 174. Here, no interpretation of §282 avoids excess language because, under either of Microsoft’s alternative theories - that the presumption only allocates the burden of production or that it shifts both the burdens of production and persuasion - the presumption itself would be unnecessary in light of §282’s additional statement as to the challenger’s burden.
The Court also rejected the argument that a preponderance standard must at least apply where the evidence before the fact finder was not before the PTO during the examination process.
It is true enough that, in these circumstances, “the rationale underlying the presumption—that the PTO, in its expertise, has approved the claim - seems much diminished,” KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 426, though other rationales may still animate the presumption. But the question remains whether Congress has specified the applicable standard of proof. As established here today, Congress did just that by codifying the common-law presumption of patent validity and, implicitly, the heightened standard of proof attached to it. The Court’s pre-Act cases never adopted or endorsed Microsoft’s fluctuating standard of proof. And they do not indicate, even in dicta, that anything less than a clear-and-convincing standard would ever apply to an invalidity defense. In fact, the Court indicated to the contrary.
Simply put, if the PTO did not have all material facts before it, its considered judgment may lose significant force. And, concomitantly, the challenger’s burden to persuade the jury of its invalidity defense by clear and convincing evidence may be easier to sustain. In this respect, although we have no occasion to endorse any particular formulation, we note that a jury instruction on the effect of new evidence can, and when requested, most often should be given. When warranted, the jury may be instructed to consider that it has heard evidence that the PTO had no opportunity to evaluate before granting the patent. When it is disputed whether the evidence presented to the jury differs from that evaluated by the PTO, the jury may be instructed to consider that question. In either case, the jury may be instructed to evaluate whether the evidence before it is materially new, and if so, to consider that fact when determining whether an invalidity defense has been proved by clear and convincing evidence. Although Microsoft emphasized in its argument to the jury that S4 was never considered by the PTO, it failed to request an instruction along these lines from the District Court. Now, in its reply brief in this Court, Microsoft insists that an instruction of this kind was warranted. That argument, however, comes far too late, and we there-fore refuse to consider it.
Secretary Locke Leaving Commerce Dept.?
[A]s Commerce Secretary, Gary oversaw a Census process that ended on time and under budget, returning $2 billion to American taxpayers. He’s earned the trust of business leaders across America by listening to their concerns, making it easier for them to export their goods abroad, and dramatically reducing the time it takes to get a patent. When he’s in Beijing, I know that American companies will be able to count on him to represent their interests in front of China’s top leaders.
Locke enjoys overwhelming support from various groups, and is expected to breeze through the confirmation process.
Fed. Cir. Takes False Marking Down Another Peg, Holds Claims Must Be Pled "With Particularity"
BP's CASTROL motor oil products are distributed in a unique bottle design for which BP received a design patent. The patent expired in 2005, but BP continued to mark its bottles with the patent numbers. Respondent Thomas A. Simonian (a patent attorney) filed a qui tam relator complaint under 35 U.S.C. §292.
In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, in-tent, knowledge, and other conditions of a person’s mind may be alleged generally.
When the district court concluded the complaint stated an actionable claim, BP petitioned the Federal Circuit for a writ of mandamus seeking to dismiss the complaint. The Fed. Cir. granted the petition in this regard, noting that FRCP Rule 9(b)'s particularity requirement for false marking was "one of first impression for this court."
Simonian's complaint asserted mostly "upon information and belief" that: (1) BP knew or should have known that the patent expired; (2) BP is a sophisticated company and has experience applying for, obtaining, and litigating patents; and (3) BP marked the CASTROL products with the patent numbers for the purpose of deceiving the public and its competitors into believing that something contained or embodied in the products is covered or protected by the expired patent.
A plaintiff is not empowered under the Rules “to plead the bare elements of his cause of action, affix the label ‘general allegation,’ and expect his complaint to survive a motion to dismiss.” . . . Instead, a complaint must in the § 292 context provide some objective indication to reasonably infer that the defendant was aware that the patent expired . . . Because the relator’s complaint here provided only generalized allegations rather than specific underlying facts from which we can reasonably infer the requisite intent, the complaint failed to meet the requirements of Rule 9(b).
First, relator contends that asserting in the complaint that BP is a “sophisticated company and has experience applying for, obtaining, and litigating patents” is enough under Rule 9(b). This court disagrees. That bare assertion provides no more of a basis to reasonably distinguish a viable complaint than merely asserting the defendant should have known the patent expired. Conclusory allegations such as this are not entitled to an assumption of truth at any stage in litigation.
Second, relator contends that a false marking inherently shows scienter. This argument is also unpersuasive. In Merck & Co., v. Reynolds, 130 S. Ct. 1784, 1793 (2010), the Supreme Court stated “[w]e recognize that certain statements are such that, to show them false, is normally to show scienter.” The Court gave as an example one claiming “I am not married” when in fact the person is married. Id. However, in other contexts where the relationship between factual falsity and state of mind is not nearly as apparent, Merck rejected this proposition. Id. This situation clearly falls into the latter category, requiring more than a mere statement.
Third, relator contends that unlike the inequitable conduct claim featured in Exergen, false marking is “anonymous” and is not an individualized fraud. . . . Overlooked by the relator is that the naming of specific individuals is not the only way to set forth facts upon which intent to deceive can be reasonably inferred. In an amicus brief, the United States points out that a relator can, for example, allege that the defendant sued a third party for infringement of the patent after the patent expired or made multiple revisions of the marking after expiration. None of these or similar assertions are present in the complaint here.

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