Source: https://patentlyo.com/patent/dissent
Timestamp: 2019-04-21 18:51:45+00:00

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Powell v. Home Depot (Fed. Cir. 2011).
Michael Powell’s invention is fairly simple – it covers a guard for a circular saw on an arm. In 2004, Mr. Powell developed the guard and provided several prototypes to Home Depot for the company to use in its in-store saws for cutting raw lumber to customer specifications. Rather than having Powell manufacture the guards, Home Depot turned to another company for its 2,000 stores. Powell obtained a patent then sued Home Depot. After a three-week trial, a Florida jury awarded Powell $15 million in damages. The district court also awarded enhanced damages, attorney fees, and pre-judgment interest — bringing the total to $24 million.
On appeal, the Federal Circuit affirmed claim construction, infringement, willfulness, inequitable conduct, and damages. Dissenting-in-part, Judge Dyk argued only that the finding of willful infringement was incorrect because Powell did not prove that Home Depot’s non-infringement defense was objectively unreasonable as is required under the objective prong of the willfulness inquiry.
Inequitable Conduct: One interesting element of the appeal involved inequitable conduct. During prosecution, Powell had filed a Petition to Make Special on grounds that he was obligated to manufacture and supply devices embodying the claims sought. MPEP 708.02. That original petition was roughly correct based upon ongoing manufacturing negotiations with Home Depot. Although negotiations with Home Depot fell-through before the PTO granted the petition, Powell never informed the PTO that he no longer qualified for the Special designation under the prospective manufacture prong and actively encouraged the PTO to decide the petition.
In a pre-Therasense decision, the district court held that the failure to inform the PTO was done with intent to deceive the PTO, but that the intentional omission was not material because (1) the timing was not related to patentability and (2) Powell could have instead filed a petition to make special based upon ongoing infringement of the applied-for claims. Under Therasense, inequitable conduct will not normally be found based upon an applicant’s improper omission unless the omission is the but-for cause of the patent being issued.
Where, as here, the patent applicant fails to update the record to inform the PTO that the circumstances which support a Petition to Make Special no longer exist—that conduct does not constitute inequitable conduct. That is so because Mr. Powell’s conduct obviously fails the but-for materiality standard [of Therasense] and is not the type of unequivocal act, “such as the filing of an unmistakably false affidavit,” that would rise to the level of “affirmative egregious misconduct. Id.
This case creates further difficulty for patent attorneys by giving a free-pass to patent applicants who intentionally deceive the PTO in order to benefit their case. Although participating in such activity violates the rules of conduct for patent law professionals under 37 C.F.R. 10.22, patent owners apparently will not face consequences. Adding to the incentive for bad behaviour is the PTO’s lax enforcement through the Office of Enrollment and Discipline; the new statute of limitations on attorney misconduct charges; and the new supplemental examination procedures that allows patentees to whitewash patents obtained through inequitable conduct. For some this may not be intuitive, but the primary solution is not increased enforcement but instead for the PTO to avoid relying upon attorney statements.
Typhoon appealed an E.D. Texas ruling that its patents were invalid and not infringed. The appeal focused on the claim construction that served as the basis for both invalidity and non-infringement. The appellate decision is notable for the detached process that the court used to consider claims elements at issue. The opinion never discussed the crux of the invention or its contribution to the art and instead simply looked to the disputed claim terms and the relation of those terms in the specification (as required by Phillips v. AWH).
This week, I participated in a roundtable discussion at Yale Law School sponsored by the Kauffman foundation and by Yale’s Information Society Project (ISP). A substantial amount of the discussion focused on problems stemming from our current claim construction process and our ongoing focus on claim language as opposed to invention or its contribution to the art.
For patent attorneys prosecuting patents, the claims are often seen as equivalent to the invention. The new patent act supports that definition by shifting focus away from the invention and instead onto the “claimed invention.” Thus, the new § 102(a)(1) asks whether “the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” The new statute’s sole focus on invention as claimed is largely just a codification of fairly well accepted Federal Circuit precedent without much thought of the consequences. Of course, broad subject matter eligibility described in State Street Bank and the TSM test for obviousness were, until quite recently, well accepted Federal Circuit precedents as well. In the past few years, the Supreme Court rolled-back the clock on those issues – returning focus to pre-1982 case law. For “invention” however, the new statute appears to lock-in the claimed-invention as the ongoing focus of patent law.
Judge Kimberly Moore highlighted this issue in her recent dissent from the court’s denial of en banc rehearing of Retractable Technologies, Inc. v. Becton, Dickinson and Company (Fed. Cir. 2011). In that opinion, Judge Moore noted that the approach of the panel decision in Retractable is evident of a major divide amongst Federal Circuit judges as to whether the inventor’s contribution to the art – “what the inventor actually invented” – should be considered in the claim construction process.
This week, my patent law students each argued a mock-Markman hearing – revisiting the facts of Nystrom v. Trex and arguing over whether Ron Nystrom’s claimed decking “board” should be limited to cover only to wood cut from a log. That litigation was interesting because it involved five different court decisions on the proper construction of the term. The final appellate decision narrowed the term’s meaning in a way that allowed Trex’s composite planking to avoid infringement.
Claim construction has become a fundamental aspect of every patent case – even to the extent that Section 101 patentable subject matter decisions turn on the meaning bestowed upon particular claim terms. For patent attorneys, all of this focus on claim meaning puts more pressure on the drafting of the claims and the specification. The sad thing about Nystrom’s patent is that he would have easily won the case if the patent attorney who drafted the application had thrown-in language indicating that a “board” could be made of various materials, not just wood cut from a log. This counterfactual conclusion is sad for Nystrom as the inventor, but it is also sad that such a major weight is placed on non-inventive boilerplate language. In my mind, the importance of claim construction should push the USPTO to do a better job of ensuring that the terms of issued patents are well defined.
The Typhoon decision is also notable in the way that the court narrowly interpreted functional claim limitations. As background, Typhoon’s claim was directed to a “computer” that included various elements including a “memory for storing [a] data collection application.” Typhoon argued its claimed invention only required that the memory be capable of storing the data collection application. However, the District Court Judge Davis and Federal Circuit agreed that the proper construction required that memory actually be used for storing the data collection application. In so holding, the courts looked to the specification and found that the described embodiments all had memories that actually included the application rather than just the capability.
Finally, the court looked at Typhoon’s “Means for cross-referencing” limitation. The district court held that limitation invalid as indefinite under 35 U.S.C. § 112 because the specification did not include an algorithm adequate to provide sufficient structure for the means-plus-function limitation, citing Aristocrat Technologies Australia PTY Ltd. v. International Game Technology, 521 F.3d 1328, 1334 (Fed Cir. 2008). On appeal, the Federal Circuit rejected that conclusion – finding that the specification did disclose a cross-referencing algorithm in plain language in the text of the specification. The court went on to write that “computer code is not required to be included in the patent specification.” Rather, what is required is disclosure so that one of ordinary skill in the art would recognize the structure as linked to the claimed function.
Ed Reines (Weil Gotshal) and Joe Re (Knobbe) were co-lead-counsel for all the appellee-defendants. Briefs were also signed by attorneys at K&L Gates, Baker Botts, Amster Rothstein, Perkins Coie, Covington & Burling, and Malloy & Malloy, as well as Eric Albritton from the Albritton firm.
Before Rader (dissenting), Newman, Plager, Lourie, Bryson, Linn, Dyk, Prost, Moore (dissenting), O'Malley (dissenting), and Reyna.
As in the past, the Federal Circuit has again expressly declined an invitation to revisit its 1998 en banc holding in Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 that claim construction is reviewed de novo. Once again, however, that decision was not without dissent. Both Judge Moore, joined by Chief Judge Rader, and Judge O'Malley wrote to express their view that Cybor should be revisited. Professor Tun-Jeng Chiang expresses his views on this issue below.
In addition to recommending that the court reconsider the issue of deference, Judge Moore's dissent emphasizes the problematic nature of claim construction review by the Federal Circuit itself: on the one hand, "[c]laim construction is the single most important event in the course of a patent litigation"; on the other, "our rules are still ill-defined and inconsistently applied, even by us." Moore dissent at 1. This problem is especially acute in Retractable Technologies: "Retractable simply cannot be reconciled with our en banc decision in Phillips." Id. at 4. Here, Judge Moore asserts, the majority applied its own approach to claim construction, not that of Phillips, "[c]hanging the plain meaning of a claim term to tailor its scope to what the panel believes was the actual invention." Id. at 6. This is not an isolated instance, Judge Moore points out, but is a common practice that points to a fundamental split on the court about the nature of claim construction: a disagreement over whether claim scope should be limited to "what the inventor actually invented" or instead construed according to the plain meaning to one of skill in the art, a meaning that may be informed – but is not dictated – by the specification.
Note: In support of her view that the Federal Circuit's own claim construction is ill-defined and inconsistently applied, Judge Moore cited the views of several commentators who "have observed that claim construction appeals often lead to frustrating and unpredictable results for both the litigants and trial courts," including Dennis's post on the panel decision and Hal Wegner's post on Arlington Industries v. Bridgeport Fittings on IP Frontline.

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