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39 The Colorado Lawyer 39 (January 2010), All rights reserved.
McKesson Information Solutions, Inc. v. Bridge Medical, Inc.37 was the second case to significantly alter the requirements for in­equitable conduct for patent prosecution in recent years. In McKesson, the Federal Circuit noted that even when the same ex­aminer is examining two co-pending applications, material office actions from one application need to be cited to the other. The court indicated that even a notice of allowance in one application can be material and might need to be cited.
1. The first application, U.S. application 07/205,527, was exam­ined by Examiner Trafton and eventually issued as U.S. patent 4,857,716.38 It was the patent-in-suit.
As a practice tip, when parties determine not to cite an arguably material reference to a related case, they might want to draft a memo to the prosecution file for future reference. Because files are often transferred to other law firms when companies or patent portfolios are acquired, a practitioner also might want to keep a copy of the memo when the file is transferred. The rationale for this is that if the practice of the acquiring firm is to clean a file of all notes and memos when the patent issues, the memo explaining why a reference was not cited could inadvertently be discarded.
As a result of the Dayco, McKesson, and Larson cases, patent prosecutors now will need to consider whether office actions are material and in need of citation to other patent applications. Sev­eral practice pointers can be derived from these cases to assist the patent prosecutor.
1. Cite the existence of related patent applications to their coun­terpart examiners.
2. Cite references from related cases if they are material.
3. Cite office actions from related applications and re-examina­tion proceedings if they are material.
4. Cite Notices of Allowance or Notices of Allowability if they might be relevant to a double-patenting rejection in a differ­ent application.
5. Do not assume that an examiner who is inspecting multiple applications owned by the same party will remember prior art or reasons for rejection from one case to the next.
6. If a decision is made not to cite what later might be argued to be material information, create a memo to the file explaining the reasoning not to cite it, so as to be able to prove that there was no intent to deceive an examiner by withholding the in­formation.
7. Assign prosecution of related applications to the same law firm and preferably the same attorney within that firm to en­sure consistent arguments and familiarity during prosecution.
8. If an examiner is verbally notified of material information, fol­low it up with a written submission or a memo to the prose­cution file memorializing the fact.
9. Explain to support staff the importance of retaining any memoranda regarding these issues so that the memoranda are not accidentally thrown out at the conclusion of prosecution.
The Federal Circuit has made it easier to find a patent unen­forceable for inequitable conduct in view of the Dayco–McKesson–Larson line of cases. Patent prosecutors should take note of the new requirement to cite material office actions, even to applications having a common examiner. Patent litigators and licensing attor­neys also should review this line of cases to assess the impact on the strength of their positions during litigation or licensing.
1. Dayco Products, Inc. v. Total Containment, Inc., 329 F.3d 1358 (Fed.Cir. 2003).
2. McKesson Information Solutions, Inc. v. Bridge Medical, Inc., 487 F.3d 897 (Fed.Cir. 2007).
3. Larson Manufacturing Co. v. Aluminart Prods. Ltd., 559 F.3d 1317 (Fed.Cir. 2009).
4. See 37 C.F.R. § 1.56 (duty to disclose information material to patentability).
5. See U.S. Department of Commerce, U.S. Patent and Trademark Of­fice (USPTO), Manual of Patent Examining Procedure (MPEP ),§§ 09.04(a),2001.05,and 2001.06 (8th ed.,Rev.7,ThomsonWest,2008).
6. Id. at § 609.
8. See Digital Control, Inc. v. Charles Mach. Works, 437 F.3d 1309, 1313 (Fed.Cir. 2006).
9. See Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 814 (1945).
10. See Burlington Industries Inc. v. Dayco Corp., 849 F.2d 1418 (Fed.Cir. 1988). See also McKesson, supra note 2 at 897, 926 (Judge Newman’s dissent,stating:“This court returns to the ‘plague’of encouraging unwarrant­ed charges of inequitable conduct….”).
11. See Purdue Pharma L.P. v. Boehringer Ingelheim GMBH, 237 F.3d 1359, 1366 (Fed.Cir. 2001).
12. See Driscoll v. Cebalo, 731 F.2d 878, 884 (Fed.Cir. 1982).
13. See 37 C.F.R. § 1.56.
15. The USPTO conducts its examination of a patent application by issuing “office actions, ”which are written communications addressing the patentability of proposed patent claims. An examiner might issue several office actions during the examination process for a particular application.
16. Dayco, supra note 1 at 1367 (“This court has never addressed whether the prior rejection of a substantially similar claim in a copending United States application is material under the reasonable examiner stan­dard.”). See also McKesson, supra note 2 at 897, 919 (“This court addressed the failure to disclose rejections in co-pending applications for the first time in Dayco.”).
17. Dayco, supra note 1 at 1361.
25. Id. (“A copending application may be material even though it can­not result in shorter patent term when it could affect the rights of the pat­entee to assign the issued patents.”).
27. Akron Polymer Container Corp. v. Exxel Container, Inc., 148 F.3d 1380 (Fed.Cir. 1998).
28. Dayco, supra note 1 at 1366.
36. Id. (“When prosecuting claims before the Patent Office, a patent applicant is, at least implicitly, asserting that those claims are patentable. A prior rejection of a substantially similar claim refutes, or is inconsistent with the position that those claims are patentable.”).
37. McKesson, supra note 2 at 897. A dissenting opinion was filed by Judge Newman.
41. Id. at 907 and 902. (U.S. patent application no. 07/205,527 was a continuation of U.S. application no. 06/862,278, and U.S. application no.07/078,195 was a continuation-in-part of U.S. application no. 06/862,278).
Finally, if information was specifically considered and discarded as not material, this fact might be recorded in an attorney’s file or applicant’s file, including the reason for discarding it. If judgment might have been bad or something might have been overlooked inadvertently, a note made at the time of evaluation might be an invaluable aid in explaining hat mistake was honest and excusable. Though such records are not required, they could be helpful in recalling and explaining actions in the event of a question of “fraud” or “inequitable conduct” raised at a later time.
50. McKesson, supra note 2 at 919.
55. U.S. Department of Commerce, USPTO, MPEP, §§ 2001.04 and 2001.06 (5th ed. Rev. 3, 1986); McKesson, supra note 2 at 923.
56. McKesson, supra note 2 at 925-26.
63. See Purdue, supra note 11.
64. McKesson, supra note 2 at 926.
65. Larson, supra note 3 at 1317.
72. Id. at 1333 and 1337.
76. Id. at 1338.The court stated: [A]lthough the previous office actions used the Johnson patent to reject the similar claims of the . . . Continuation, the Third Office Action ex­plicitly explained, for the first time, that the Johnson patent shows “the screen is attached across its width . . . to the coupling element . . . there­by indicating that such extends into the tracks.” This was the first time that the examiner of the . . . Continuation conveyed such specific ex­planation about the Johnson patent.
78. Id. at 1339 (“The Fourth Office Action articulated a new rejection of the ‘extending into screen tracks limitation’ in view of the Johnson and Kemp patents.”).
81. Star Scientific v. R.J. Reynolds Tobacco Co., 537 F.3d 1357 (Fed.Cir. 2008).
82. Larson, supra note 3 at 1340 and 1366, citing Star Scientific, supra note 81.
83. Larson, supra note 3 at 1341, citing M. Eagles Tools Warehouse v. Fish­er Tooling Co., 439 F.3d 1335, 1341 (Fed.Cir. 2006) (“When the absence of a good faith explanation is the only evidence of intent, however, that evi­dence alone does not constitute clear and convincing evidence warranti­ng an inference of intent.”).
85. Id. (“At that point, the court must balance the substance of those threshold levels—with a higher level of materiality permitting a lower lev­el of intent, and vice versa.”). Emphasis in original.
Intellectual Property and Technology Law articles are sponsored by the CBA Intellectual Property and Technology Law and Policy Sections. They provide information of interest to intellectual property and technology attorneys who advise clients on protecting and exploring various forms of intellectual property in the marketplace.
I thought the following C-Span videos from the George Washington Law and Federal Circuit Bar Association’s “The National Appellate Court Celebration and Introspective Symposium” held on March 18, 2009 were very interesting.
In an unusual disposition in Sensormatic Electronics LLC v. Von Kahle, et al., 2009-1193 (Fed. Cir. Feb. 17, 2010), the Federal Circuit issued an “order” affirming the district court with a brief explanation of the issues on appeal, rather than a perfunctory Rule 36 Judgment containing no explanation. It will be interesting to see if the court follows up with a Rule 36 Judgment. Absent a judgment by the panel, I’m curious whether the losing party is procedurally in a position to request a panel rehearing, request rehearing en banc, or petition for certiorari.
The court’s order is available here: [Read].
At the district court, the defendant asserted inequitable conduct by the inventors for failure to cite during original examination a reference that was later cited by an examiner during a reexamination of the patent. The inventors stated that they did not believe the reference was material and therefore did not cite the reference to the PTO in the original prosecution of the patent. The district court judge found the inventors’ testimony credible and therefore made a factual finding that the inventors did not have the requisite intent for inequitable conduct. In the “order” above, the Federal Circuit “affirmed” the district court.
The ultimate question of inequitable conduct is committed to the discretion of the district court and we review the court’s determination that the patentee engaged in inequitable conduct for abuse of discretion. Modine Mfg. Co. v. Allen Group, Inc., 917 F.2d 538, 541 (Fed. Cir. 1990), cert. denied, 500 U.S. 918 (1991). An abuse of discretion occurs when (1) the court’s decision is clearly unreasonable, arbitrary, or fanciful, (2) the court’s decision is based on an erroneous construction of the law, (3) the court’s factual findings are clearly erroneous, or (4) the record contains no evidence upon which the court rationally could have based its decision. Nilssen v. Osram Sylvania, Inc., 504 F.3d 1223, 1229 (Fed. Cir. 2007).
In order to establish inequitable conduct, the party challenging the patent is required to establish by clear and convincing evidence that the patent applicant “(1) either made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information, and (2) intended to deceive the U.S. Patent and Trademark Office.” Symantec Corp. v. Computer Assoc. Int’l, Inc, 522 F.3d 1279, 1296 (Fed. Cir. 2008) (quoting Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1363 (Fed. Cir. 2007). Both intent and materiality are questions of fact, and must be proven by clear and convincing evidence. Young v. Lumenis, Inc., 492 F.3d 1336, 1344 (Fed. Cir. 2007). We review a district court’s findings on the threshold issues of materiality and intent for clear error. Pfizer, Inc. v. Teva Pharms. USA, Inc., 518 F.3d 1353, 1366 (Fed. Cir. 2008). Under the clear error standard, the court’s findings will not be overturned in the absence of a “definite and firm conviction” that a mistake has been made. Id. “Once threshold findings of materiality and intent are established, the district court must weigh them to determine whether the equities warrant a conclusion that inequitable conduct occurred.” Flex-Rest, LLC v. Steelcase, Inc., 455 F.3d 1351, 1363 (Fed. Cir. 2006) (quoting Purdue Pharma, 438 F.3d at 1128).
One of the issues asserted by the appellant/defendant in the oral argument of Sensormatic was that one of the inventors (who was accused of inequitable conduct by the defendant) stated at trial that if he had it to do over again, he would not cite the reference in question to the examiner. [Listen]. This assertion went unchallenged — during oral argument at least.
The statement of “If I had it to do over again, I’d do it again” may sound familiar to those familiar with the McKesson v. Bridge Medical, 487 F.3d 897 (Fed. Cir. 2007) case. The patent attorney accused of inequitable conduct in that case stated that if he had it to do over again he would not have cited the information in question. In McKesson, however, the district court judge found intent and the Federal Circuit affirmed. In Sensormatic, the district court judge found no intent and the Federal Circuit has now affirmed. Hence, this demonstrates the significance of the “clear error” standard of review for the intent prong in inequitable conduct cases and the importance of prevailing at the district court level.
For those of you that are concerned that judges might put too much emphasis on statements in the Abstract and Summary of a patent, you might find this part of the Sensormatic oral argument interesting in that some of the judges appeared willing to read in a limitation of “abruptness” into the claims without first identifying some sort of textual “hook” from the claims. [Listen] and [Listen]. The inventors asserted that they understood the claims to include an abruptness limitation even though that language apparently does not appear in the claims.
You can listen to the entire oral argument in Sensormatic here: [Listen].
When filing a brief with the Federal Circuit the parties are allowed to denote material appearing in their briefs as confidential. Similarly, material presented in the Joint Appendix can be marked confidential. At oral argument, the judges of the Federal Circuit will often ask the parties if these confidential markings are still applicable for two reasons: (1) so that the judges are free to ask questions about the material in open court and have it recorded; and (2) so that the judges know what can be published in any written opinion.
In one case from several years ago, counsel for an intervenor in the case was present at oral argument but was not taking part in the oral argument itself. He was called up to address the confidentiality issue and Judge Bryson remarked that this was like the attorney nightmare where one is called out of the audience to argue a case: [Listen].
The way in which the elements are arranged or combined in the claim must itself be disclosed, either expressly or inherently, in an anticipatory reference. “Anticipation requires the presence in a single prior art disclosure of all elements of a claimed invention arranged as in the claim.” Connell v. Sears, Roebuck & Co., 722 F.2d 1542, 1548 (Fed. Cir. 1983). The requirement that the prior art elements themselves be “arranged as in the claim” means that claims cannot be “treated . . . as mere catalogs of separate parts, in disregard of the part-to-part relationships set forth in the claims and that give the claims their meaning.” Lindemann Maschinenfabrik GMBH v. Am. Hoist & Derrick Co., 730 F.2d 1452, 1459 (Fed. Cir. 1984). “[U]nless a reference discloses within the four corners of the document not only all of the limitations claimed but also all of the limitations arranged or combined in the same way as recited in the claim, it cannot be said to prove prior invention of the thing claimed and, thus, cannot anticipate under 35 U.S.C. § 102.” Net MoneyIN, Inc. v. VeriSign, Inc., 545 F.3d 1359, 1371 (Fed. Cir. 2008) (emphasis added).
The concept of “inherent disclosure” does not alter the requirement that all elements must be disclosed in an anticipatory reference in the same way as they are arranged or combined in the claim. “[A]nticipation by inherent disclosure is appropriate only when the reference discloses prior art that must necessarily include the unstated limitation . . . .” Transclean Corp. v. Bridgewood Servs., Inc., 290 F.3d 1364, 1373 (Fed. Cir. 2002). “Inherency, however, may not be established by probabilities or possibilities. The mere fact that a certain thing may result from a given set of circumstances is not sufficient.” Cont’l Can Co. USA, Inc. v. Monsanto Co., 948 F.2d 1264, 1269 (Fed. Cir. 1991) (quoting In re Oelrich, 666 F.2d 578, 581 (CCPA 1981)); see also Trintec Indus., Inc. v. Top-U.S.A. Corp., 295 F.3d 1292, 1295 (Fed. Cir. 2002) (“Inherent anticipation requires that the missing descriptive material is ‘necessarily present,’ not merely probably or possibly present, in the prior art.” (quoting In re Robertson, 169 F.3d 743, 745 (Fed. Cir. 1999))). For a claim to be anticipated, each claim element must be disclosed, either expressly or inherently, in a single prior art reference, and the claimed arrangement or combination of those elements must also be disclosed, either expressly or inherently, in that same prior art reference.
In contrast, the evidence here shows, at best, that the Palm defendants taught their customers each step of the claimed method in isolation. Nowhere do the manual excerpts teach all of the steps of the claimed method together, much less in the required order. Accordingly, it requires too speculative a leap to conclude that any customer actually performed the claimed method. Indeed, the very same record evidence upon which E-Pass attempts to rely also shows that the accused PDAs are general-purpose computing devices that can be used for a variety of purposes and in a variety of ways. In comparison, the device at issue in Moleculon was intended to be used in only one way—to practice the infringing method—and that method was explicitly taught by the proffered instructions. Id. If, as E-Pass argues, it is “unfathomable” that no user in possession of one of the accused devices and its manual has practiced the accused method, see E-Pass Repl. Br. at 16, E-Pass should have had no difficulty in meeting its burden of proof and in introducing testimony of even one such user. Having failed to meet that burden, E-Pass has no basis to overturn the district court’s decision.
You can listen to the entire E-Pass oral argument here: [Listen].
You can read the court’s E-Pass opinion here: [Read].
You can listen to the oral argument in Therasense here: [Listen].
You can read the court’s Therasense opinion here: [Read].
Typically during oral argument the appellant and appellee are each given fifteen minutes to argue their respective cases. When there is more than one appellant or appellee, the allotted time must be shared. The sharing of oral argument time is most often clumsy, ineffective, and discouraged by the judges. Rather, it is more persuasive when one attorney argues all the issues. Because attorneys represent individual clients and not entire sides of a case, however, sharing of time will undoubtedly continue so that each attorney can ensure that his or her client is fairly represented.
As a heads up to those facing this issue in the future, it is possible to move for additional time to be shared among multiple parties on one side. For example, in E-Pass Technologies, Inc. v. 3COM Corp. et al., 2006-1356 (Fed. Cir. Jan. 12, 2007) the Federal Circuit granted the three appellees ten minutes each for a total of thirty minutes rather than the typical fifteen minutes for all appellees. This is what Chief Judge Michel remarked at that time: [Listen].
Director David Kappos is looking for your suggestions on updating the MPEP [Link].
The MPEP was a topic of discussion in the oral argument of Boehringer Ingelheim v. Barr Labs, 2009-1032 (Fed. Cir. January 25, 2010) decided just recently. In this sound bite, Judge Prost asks counsel about the meaning of “consonance” in MPEP section 804.01 and Judge Dyk inquires whether the meaning of consonance given by the MPEP is too narrow: [Listen].
Readers might be familiar with Dr. Mehmet Oz, an author and expert on health matters who is often featured on “The Oprah Winfrey Show.” It looks like Dr. Oz might also be eagerly awaiting the Supreme Court’s decision in Bilski v. Kappos, as he has his own business method patent application pending at the PTO. The title of the application is “System and Method for Determining a Measure of Human Beauty” [Link to application].
The Federal Circuit will soon decide the case of Medtronic Navigation, Inc. v. BrainLab. That case concerns the issue of whether it was proper to sanction Medtronic and its attorneys $4.4M for their opponent’s attorney fees, due to conduct during a jury trial.
Judge Matsch, who presided over the Medtronic Navigation trial, recently awarded attorneys fees to another party in another patent case in his court. In CCC Group, Inc. v. Martin Engineering, Inc., 05-cv-00086-RPM-MJW (D. Colo. January 19, 2010), Judge Matsch awarded attorneys fees to the defendant and found the patents at issue unenforceable due to inequitable conduct.
It will be interesting to see if this decision is appealed. I will have to study the decision further; but, one statement in the opinion seems to indicate that it was purportedly deceitful and misleading to include as Fig. 1 in a patent a drawing that was an oversimplification of the prior art.
You can read the district court’s opinion here: [Read].
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