Source: https://patentlyo.com/patent/patent-cases-2009
Timestamp: 2019-01-22 19:24:38
Document Index: 613807042

Matched Legal Cases: ['§8', '§ 9', '§ 145', '§ 145', '§ 145', '§ 145', '§ 145', '§ 141', '§ 145', '§ 145', '§ 145', '§ 145', '§ 145', '§ 145', '§ 286']

Patent Cases 2009 | Patently-O
The Presumption of Irreparable Harm?
December 16, 2009 Injunctions, Patent, Patent Cases 2009Dennis Crouch
In two prior cases, the Federal Circuit refused to consider this same question — instead deciding the cases on other grounds. In Broadcom Corp. v. Qualcomm, Inc., 543 F.3d 683 (Fed. Cir. 2008), the court indicated that “[i]t remains an open question whether there remains a rebuttable presumption of irreparable harm following eBay.” Likewise, in Amado v. Microsoft Corp., 517 F.3d 1353 (Fed. Cir. 2008), the court refused to consider the question. Incidentally, the court in AMS could have also avoided the issue because the lack of irreparable harm was one of two alternate justifications for its judgment. (The court also held that the patentee had not shown a sufficient likelihood of success on the merits.). Both the Broadcom and Amado opinions were written by Judge Linn. (The Broadcom panel included Judges Linn, Friedman, and Prost while the Amado panel included Judges Bryson, Clevenger, and Linn). District court cases have been decided both ways, although the predominant approach is to deny the presumption and instead force the patentee to provide evidence of irreparable harm.
The AMS decision could be isolated as a preliminary injunction decision using the policy grounds that preliminary relief should require a higher standard of proof. However, the court’s reliance on eBay (a permanent injunction case) suggests such isolation is incorrect. Another potential distinguishing feature is the AMS’s statement that “the presumption of irreparable harm, based just on proof of infringement, was discarded.” Permanent injunctive relief is typically based on ongoing infringement (not just infringement) and typically include a judgment that the patent is valid (not invalid) and enforceable (not unenforceable). Of course, those features were also present in the eBay decision that serves as the Federal Circuit’s source of law.
Of course, the AMS case does not serve as precedent and future panels (and lower courts) are still free to fill-in-the-blank left by eBay.
Federal Circuit Lowers Bar for Declaratory Judgment Jurisdiction When Patentee is a Holding Company
December 7, 2009 Declaratory Judgment, Patent, Patent Cases 2009LicensesDennis Crouch
Hewlett-Packard v. Acceleron 09-1283.pdf (Fed. Cir. 2009)
Acceleron’s patent No. 6,948,021 covers a hot-swappable server blade. In September 2007, Acceleron wrote to “call [HP’s] attention to the referenced patent.” HP responded that they “would be willing to agree not to file” a declaratory judgment action for 120 days. Going back, Acceleron simply suggested that no declaratory judgment jurisdiction existed.
Rather than negotiating, HP filed a declaratory judgment action in Delaware District court. However, Judge Robinson dismissed that case – finding the potential for litigation by Acceleron “too speculative a prospect to support declaratory judgment jurisdiction.”
On appeal, the Federal Circuit found Acceleron’s actions were sufficient to support a declaratory judgment action — a holding that the court admits “undoubtedly marks a shift from past declaratory judgment cases.”
The Constitution limits federal court jurisdiction to actual cases and controversies. Under the Supreme Court’s 2006 MedImmune decision, the question of declaratory judgment jurisdiction is answered after considering “all the circumstances” rather than any bright line rule. Subsequently, the Federal Circuit indicated that declaratory judgment jurisdiction exists when a patentee asserts rights against “certain identified ongoing or planned activity of another party, and where that party contends that it has the right to engage in the accused activity without license.” (Quoting SanDisk). Likewise, a party who has “actually been charged with infringement of a patent” will be able to identify declaratory judgment jurisdiction. (quoting Cardinal Chem).
Here, Acceleron argues that a patent owner should have some mechanism for contacting another party to discuss patent rights without raising declaratory judgment jurisdiction. Without disagreeing with that premise, the Federal Circuit held that this is not such a case.
Although Acceleron made no direct charges of infringement, the company did indicate that its patents were “relevant” to HP’s product line; that HP’s response must come within two-weeks; and asked HP not to file a DJ action. “Under the totality of the circumstances, therefore, it was not unreasonable for HP to interpret Acceleron’s letters as implicitly asserting its [patent] rights.”
Although dicta, the Federal Circuit also suggested that the “totality of the circumstances” analysis should included the fact that Acceleron is “solely a licensing entity.” That fact apparently creates a greater shadow of litigation because “without enforcement [Acceleron] receives no benefits from its patents.”
Design Law: Protecting Copyrighted Designs
December 2, 2009 Design Patent, Patent, Patent Cases 2009Dennis Crouch
Design Ideas v. Things Remembered, 3:07-cv-03077 (C.D. Ill. Filed March 16, 2007)
Perry Saidman is a frequent contributory to Patently-O — especially when the topic turns to design patent law. In a recent case, his firm used copyright law to protect its client's wire-flower design. The flowers were incorporated into candle holders and other small useful objects.
Although cheap ($35), early copyright registration is important for collecting infringement damages. Registration is also helpful in establishing priority and ownership. In this case, the designer registered early and was awarded $750k for willful infringement.
Case: Design Ideas, Ltd., v. Things Remembered, Inc., Case No. 3:07-cv-03077 (C.D. Ill. Filed March 16, 2007) (Garfield Goodrum served as lead attorney for the plaintiffs).
Jury Verdict Form: 2000005312.pdf
The original complaint also included charges of trademark and utility patent infringement. The broadest claimof the utility patent (No. 6,398,058) includes a limitation that "loops formed to simulate a flower" are used to connect the base to the top:
1. A container constructed of metal wires, comprising:
a base including a lower support wire bent to establish the predominant shape of said base;
a top including an upper support wire bent to establish the predominant shape of said top;
a plurality of wire figures, each of said wire figures having a first wire forming a central body and a second wire forming a plurality of loops outwardly extending from the central body and circumferentially offset from one another, said central body and said plurality of loops formed to simulate a flower, wherein said first wire and said second wire are separately formed and coupled together; and
a sidewall connecting said lower support wire and said upper support wire to space said lower support wire from said upper support wire, said sidewall comprising said plurality of said wire figures.
Federal Circuit Affirms Summary Judgment of Obviousness for Bulk EMail Patent
December 2, 2009 Anticipation, Obviousness, Patent, Patent Cases 2009, Patentable Subject MatterAffirmed Without Opinion, anticipation, Claim Construction, obviousnessDennis Crouch
Perfect Web Technologies v. InfoUSA (Fed. Cir. 2009)
Perfect Web’s asserted patent covers a method of managing bulk e-mail distribution. Claim 1 of the application (filed in 2000) reads as follows:
(B) transmitting a set of bulk e-mails to said target recipients in said matched group;
(C) calculating a quantity of e-mails in said set of bulk e-mails which have been successfully received by said target recipients; and,
(D) if said calculated quantity does not exceed a prescribed minimum quantity of successfully received e-mails, repeating steps (A)-(C) until said calculated quantity exceeds said prescribed minimum quantity. (Pat. No. 6,431,400).
The district court held the claims invalid as anticipated and obvious as well as for failing to claim statutory subject matter under Section 101. On appeal, the Federal Circuit upheld the obviousness finding and left the alternative reasons undecided.
Of course, in 2000, targeted bulk e-mail was already around, and the defendants provided prior art evidence of steps (A)-(C). That is, marketers were already identifying target recipients, sending out e-mails, and calculating the percent received. Missing from the prior art was step (D) – iteratively repeating steps (A)-(C) until the number of recipients reaches the a prescribed quantity.
Evidence of Common Sense: The district court held on summary judgment that KSR style “common sense” would lead one of ordinary skill in the art to perform the iterative step (D). On appeal, the Federal Circuit affirmed that finding – holding particularly that the finding of common sense does not require “explication in any reference or expert opinion.”
Although a court need not have documentary support of its common sense analysis, a court (or patent examiner) must at least clearly explain its reasoning.
We reiterate that, on summary judgment, to invoke “common sense” or any other basis for extrapolating from prior art to a conclusion of obviousness, a district court must articulate its reasoning with sufficient clarity for review.
In this case, the appellate panel agreed that the idea of repeating already known steps until a threshold is met was simply a common sense extension:
Thus, this last step, and the claim as a whole, simply recites repetition of a known procedure until success is achieved. Recognizing this, the district court explained: “If 100 e-mail deliveries were ordered, and the first transmission delivered only 95, common sense dictates that one should try again. One could do little else.”
The court added an interesting caveat regarding expert testimony and the level of one of skill in the art — noting that expert testimony may well be necessary for “complex” technology.
If the relevant technology were complex, the court might require expert opinions. Here, however, the parties agreed that ordinary skill in the relevant art required only a high school education and limited marketing and computer experience. No expert opinion is required to appreciate the potential value to persons of such skill in this art of repeating steps (A)-(C).
Obvious to Try: As a corollary to its common sense holding, the appellate court also held that the additional step (D) would have been “obvious to try” under KSR. “[S]imple logic suggests that sending messages to new addresses is more likely to produce successful deliveries than re-sending messages to addresses that have already failed. . . . [I]ndeed, the predictable and actual result of performing step (D) is that more e-mail messages reach more recipients.”
Long-felt Need: The patentee argued that a nonobviousness conclusion was supported by evidence of the secondary consideration of long-felt need. Particularly, the method helps solve the recognized competing problems of reaching customers without “burning up” the mailing list by oversending.
The Federal Circuit rejected these arguments because the patentee had failed to provide any evidence of improved efficiency beyond “bare assertion.” In addition, the court suggested that any proof of long-felt need would be insufficient to “overcome [the] strong prima facie showing of obviousness.” (quoting Asyst Techs (2008))
Claim Construction: Interestingly, the court issued its summary judgment order prior to claim construction. The Federal Circuit found no error because construction of the disputed claim terms would not have changed the obviousness outcome.
Notes: The patent was originally titled “Statement regarding federally sponsored research or development.” That is apparently a typographical error fixed in a subsequent certificate of correction.
Ariad v. Lilly: Federal Circuit Grants En Banc Request to Challenge Written Description Requirement
August 21, 2009 En Banc, Enablement, Patent, Patent Cases 2009Enablement, Federal Circuit En Banc, USPTO Director, Written DescriptionDennis Crouch
Ariad Pharmaceuticals, MIT, and Harvard v. Eli Lilly (Fed. Cir. 2009) (en banc)
The Federal Circuit has granted Ariad's motion for an en banc rehearing of its case. The motion boldly asks whether the written description requirement should be eliminated as a doctrine that is separate and distinct from enablement. The questions:
a. Whether 35 U.S.C. ? 112, paragraph 1, contains a written description requirement separate from an enablement requirement? and
b. If a separate written description requirement is set forth in the statute, what is the scope and purpose of the requirement?
Ariad's brief is due within 45 days, and Lilly's brief is then due within thirty days of that.
Briefs of amici curiae will be entertained, and any such amicus briefs may be filed without leave of court but otherwise must comply with Federal Rule of Appellate Procedure 29 and Federal Circuit Rule 29. The United States is invited to submit an amicus brief.
Value of Amicus Briefs: In its recent Cardiac Pacemaker decision, the Federal Circuit expressly indicated that it was "appreciative of these [amicus] contributions." To make one particular point in the decision, the court emphasized that Cardiac's extreme position was "not even supported by the lone amicus brief we have received in favor of including method patents within Section 271(f)'s reach."
Although the written description requirement is primarily raised in pharmaceutical and biotechnology cases, it is an increasing aspect of software patent litigation. This decision could have a significant impact both on how patents are litigated and on how they are prosecuted. The inventors here discovered an important biochemical pathway and broadly claimed uses of that pathway.
Written Description: Araid Petitions en banc Federal Circuit to Eliminate Separate Written Description Requirement
Written Description: Pioneering Claims Require More Expansive Written Description
See Chris Holman's blog for more [Link]
Other News: Today the court also lifted its stay of en banc proceedings in the Tafas v. Dudas case. Briefs are due in October. However, it is widely expected that PTO Director Kappos will end the litigation by giving up on implementation of the proposed rules.
t minus 50: Microsoft Requests Emergency Stay of Injunctive Relief
August 21, 2009 Injunctions, Patent, Patent Cases 2009, SoftwareClaim ConstructionDennis Crouch
i4i Ltd. v. Microsoft Corp. (Fed. Cir. 2009)
On August 11, 2009, Judge Davis (E.D.Tex.) issued his final order in the i4i v. Microsoft patent litigation. That final order gives Microsoft 60 days to stop selling, using, or supporting infringing versions of MS Word. By my calendar, the injunction becomes effective October 10, 2009. I4i’s patent covers xml capabilities of the MS Word that were implemented in Office ’03 and ’07. At this point, it is unclear how difficult it would be for Microsoft to eliminate the adjudged infringing capability from its products.
Microsoft has already filed a motion with the Court of Appeals for the Federal Circuit demanding an emergency stay pending appeal. The Federal Circuit clerk immediately denied Microsoft’s motion for an “administrative stay.” Instead, a merits panel will consider the emergency motion at oral arguments calendared for a special session September 23, 2009. Microsoft’s brief-on-point is due August 25; i4i’s opposition is due September 8; and any reply is due September 14. If the Federal Circuit makes a decision quickly, Microsoft may have time to appeal directly to the Supreme Court for a midnight stay of execution.
The jurisprudence on stays pending appeal is somewhat lacking – largely because these cases are – by definition – decided in a rush and courts often do not have time to fully explain their decisions. Based on the lower court decision, Microsoft’s best arguments for a stay will be based on a combination of (1) its argument on claim construction; (2) the irreparable harm to Microsoft and its customers that would flow from the injunction; and (3) the relatively small amount of irreparable harm that i4i will feel during the few months while the appeal is pending.
Stay of Injunctive Relief Pending Appeal: Unless otherwise ordered by the court, a permanent injunction is not stayed during an appeal. In Hilton v. Braunskill, 481 U.S. 770 (1987), the Supreme Court outlined a four factor test used when determining whether to stay enforcement. The factors are essentially the converse of those used in determining whether to grant a preliminary injunction. These factors include: “(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits [of the appeal]; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.”
Patent Reform on this Issue: In 2006, patent reform legislation introduced in Congress would have added an automatic stay of permanent injunctions after a showing that “the stay would not result in irreparable harm to the owner of the patent and that the balance of hardships from the stay does not favor the owner of the patent.” Patents Depend on Quality Act of 2006, H.R. 5096, 109th Cong. §8 (2006) (proposing to amend 35 U.S.C. 283).
Don Dunner (Finnegan) is representing i4i on appeal; Matthew Powers (Weil) appears to continue to lead the team for Microsoft.
The ABA Journal has an interesting discussion of the trial that focuses primarily on Microsoft’s attempts to paint i4i as a troll seeking a ‘bailout.’ [Link] [Seattle PI]
Prior Patently-O post on District Court Order.
August 20, 2009 Patent, Patent Cases 2009Affirmed Without OpinionDennis Crouch
Sky Technologies v. SAP AG (Fed. Cir. 2009)
In an interlocutory appeal, SAP challenged Sky’s standing to bring its patent infringement suit – arguing that ownership rights had not been properly transferred. On appeal, however, the Federal Circuit affirmed the decision by Judge Folsom (E.D.Tex.) that title had been “properly transferred by operation of state foreclosure law” even without an affirmative assignment of rights.
Background: The chain of title is somewhat long. Mr. Conkin and his co-inventors assigned rights to the asserted patent to TradeAccess (a company founded by Conkin). TradeAccess later changed its name to Orzo. Orzo, in turn, used the patents as collateral for an investment from Silicon Valley Bank (SVB). SVB assigned its security interests to Cross Atlantic Capital Partners (XACP). Orzo then defaulted and XACP foreclosed. At the foreclosure sale, XACP was the only bidder at a public auction and purchased the patent rights. Then, XACP assigned the patent rights to Sky Technology (another company founded by Conkin and the plaintiff in this case).
Missing from this chain of title is any assignment from Orzo to any other party. Of course, a transfer of rights need not be done through explicit assignment. Interestingly, patent ownership is determined by local (state or foreign) law rather than federal law.
Assignment in Writing: In Akazawa, 520 F.3d 1354 (Fed. Cir. 2008), the Federal Circuit held that patent rights could be transferred through Japanese intestate statute. In the background, however, are (1) 35 U.S.C. Section 261’s requirement that all assignments of patent interest be in writing and (2) the 1881 Supreme Court case of Ager v. Murray holding that patent rights could not be transferred to satisfy a judgment without a written assignment. 105 U.S. 126 (suggesting that a trustee be appointed to assign rights if the inventor refused). In Akazawa, the court avoided those requirements by holding that non-assignment forms of transfer (such as intestate transfer) need not be in writing. I.e., “ownership of a patent may be changed by operation of law” without an explicit assignment from the prior rights-holder.
Likewise, in the present case the appellate panel found that the rights had been properly transferred without an assignment based on Massachusetts implementation of Section Nine of the Uniform Commercial Code (UCC).
We find that Akazawa controls in the instant case, and that the district court’s reliance on its reasoning was appropriate because transfer of patent ownership by operation of law is permissible without a writing. … [A]ssignment is not the only method by which to transfer patent ownership. As noted below, foreclosure under state law may transfer patent ownership. Here, XACP’s foreclosure on its security interest was in accordance with Massachusetts law; therefore, Sky received full title and ownership of the patents from XACP providing it with standing in the underlying case.
In the instant case the controlling state law is the Massachusetts UCC. Massachusetts UCC § 9-610 permits a secured party to sell the collateral after default, in a commercially reasonable manner, and that same party may purchase the collateral at a public disposition. Section 9-617 of the UCC states that once a secured party disposes of collateral after default, the transferee for value takes all of the debtor’s rights in the collateral. Because XACP foreclosed on the patents-in-suit in conformity with these provisions, XACP obtained title to the patents on July 14, 2003.
Patentee, His Heirs or Assigns: Section 154(a) of the Patent Act adds an additional complication. That section indicates that patent rights are always granted “to the patentee, his heirs or assigns.” Here, SAP argues that Section 154(a) limits the flow of ownership to only those three categories. The precedent of Akazawa does not create a problem under that theory because that case involved intestate transfer to an heir. Without elaborating, the Federal Circuit rejected that argument – holding simply that “Section 154 does not restrict patent ownership to these three classes of individuals, and moreover, this language fails to specifically address transfers of patent ownership.” Thus, although a patent is granted only “to the patentee, his heirs or assigns,” it may be latter transferred to other parties. This decision creates a potential implication that a creditor foreclosing on a pending patent application may not be able to enforce the future patent rights. Here, the court should have laid that issue to rest by noting that the Section 154 argument fails because a “patentee” includes any successor in title to the interest in the patent application. The definitions in Section 100 suggest this result, but is written in the Act’s typical circular fashion: “The word ‘patentee’ includes not only the patentee to whom the patent was issued but also the successors in title to the patentee.”
The well written opinion was authored by Judge Spencer sitting by designation from the US District Court of the Eastern District of Virginia. Chief Judge Michel and Judge Bryson joined Judge Spencer on the unanimous panel. As noted in the final paragraph, however, the courts continued semantic distinction of an “assignee” needs reconsideration in light of modern securities law.
Read about the Akazawa decision; See also, How not to divide patent rights during bankruptcy. Morrow v. Microsoft (Fed. Cir. 2007).
At issue here are U.S. Patent Nos. 6,141,653; 6,336,105; 6,338,050; 7,162,458; and 7,149,724.
The patents describe and claim various iterations of a “multivariate negotiations engine for iterative bargaining” that allow buyers and sellers to do a deal online.
Challenging PTO Decisions in District Court: Federal Circuit Affirms Exclusion of Enablement Evidence that “Should Have” Been Raised During Prosecution
August 12, 2009 Patent, Patent Cases 2009Affirmed Without Opinion, anticipation, Enablement, Inequitable Conduct, obviousness, Supreme Court, Written DescriptionDennis Crouch
Hyatt v. Doll (Fed. Cir. 2009) 07-1066.pdf
Gil Hyatt is a prolific inventor who has spent much of his time over the past thirty years challenging the bounds of USPTO practice. This August 11, 2009 opinion marks the seventeenth Federal Circuit decision focusing on Hyatt’s patent rights in addition to the 2003 Supreme Court decision Franchise Tax Bd. of California v. Hyatt.
This Case: During prosecution, the examiner rejected each of Hyatt’s 117 computer memory architecture claims based on anticipation, obviousness, enablement, double patenting, and written description. Hyatt appealed (pro se) to the BPAI who reversed the bulk of the rejections, but affirming only the written description and enablement rejections associated with 79 claims. Hyatt then took his case to Federal Court by filing a civil action in DC District Court grounded in 35 U.S.C. 145.
At the district court, Hyatt submitted a new declaration offering additional evidence of enablement and written description. However, the district court excluded that inventor-declaration from evidence based on Hyatt’s “negligence” in failing to previously submit the information to the PTO.
On appeal, the Federal Circuit affirmed the exclusion of evidence – holding that the district court may properly exclude evidence that Hyatt should have produced to the PTO. (Chief Judge Michel as author joined by Judge Dyk)
Hyatt was obligated to respond to the examiner’s written description rejection by In re Alton, 76 F.3d 1168, 1175 (Fed. Cir. 1996), by explaining where in the specification support for each of these limitations could be found. . . . The Board noted, “It is far easier for appellant to describe where the limitation he wrote is disclosed than for the Office to prove that the limitation is not disclosed.” . . . Hyatt, however, refused to cooperate, even though he necessarily possessed the information the examiner sought by the time he filed his application.
On these facts, the district court’s exclusion of Hyatt’s new evidence must be affirmed. . . . [I]t is clear from the record that Hyatt willfully refused to provide evidence in his possession in response to a valid action by the examiner. Such a refusal to provide evidence which one possessed was grounds in Barrett to exclude the withheld evidence. Similarly, we hold that in light of Hyatt’s willful non-cooperation here, the district court did not abuse its discretion by excluding the Hyatt declaration.
Judge Moore penned a vigorous dissent in support of the patent applicant’s right to a full civil action including the right to submit additional evidence when challenging a PTO decision.
The majority takes away this patent applicant’s fundamental right to a “civil action to obtain [a] patent” as granted by Congress in 35 U.S.C. § 145. Today the majority decides that a patent applicant may not introduce the inventor’s declaration in a § 145 proceeding before the district court because the inventor had an “affirmative duty” or “obligation” to disclose this evidence to the PTO. His failure to fulfill his affirmative duty, by not disclosing evidence he could have disclosed to the PTO, results in such evidence being excluded from the district court § 145 proceeding. The district court made no fact findings indicating willful withholding or intentional suppression; in fact, the district court did not even conclude that Mr. Hyatt’s conduct amounted to gross negligence, but rather excluded the evidence under a negligence “could have” standard. Nor did the PTO even argue, at any stage of these proceedings, that Mr. Hyatt’s conduct in this case was willful or intentional. Nonetheless, the majority concludes that the applicant “owed,” the PTO all evidence he possesses that is responsive to a rejection and that failure to fulfill this newly created “affirmative duty” amounts to willful withholding as a matter of law. There are only two possible ways to interpret the majority’s willful withholding determination. Either the majority is engaging in appellate fact finding or it is determining that breach of its newly created affirmative duty is willful withholding as a matter of law.
Congress granted patent applicants the right to a civil action in the district court distinct from their right of appeal. It is our obligation to protect the distinction Congress codified in § 145, not to reweigh the virtues of that decision. The § 145 proceeding is a civil action and ought to be governed by the same Federal Rules of Evidence that govern other civil actions. Patent cases do not need, nor should they have, special rules of evidence.
The statute itself distinguishes the appeal that may be brought pursuant to 35 U.S.C. § 141 because a § 145 action is not an appeal; it is a “civil action.” The statute obligates the district court to adjudicate the facts in this civil action. Because the statute affords no limitations on the type of evidence that ought to be admissible in a civil action brought under § 145, the standard Federal Rules of Evidence that govern all civil actions ought to govern. The legislative histories of § 145 and its predecessor statute, section 4915 of the Revised Statutes, repeatedly and without contradiction indicate that the intent of Congress was to permit a patent applicant to bring a new suit built upon a new record. . . . Congress intended that the district court in a § 145 action have everything that a court would have in an infringement suit. Under this standard, Congress certainly intended for an inventor, such as Mr. Hyatt, to be permitted to introduce his own declaration in a § 145 action.
The majority holds that by failing to offer his testimony to the PTO, Hyatt has failed to satisfy “an affirmative and specific duty.” Maj. Op. at 2. In this way, this new affirmative duty for prosecution seems to resemble inequitable conduct, though here the applicant is penalized regardless of their intent. . . . With all due respect to the majority, I do not believe a new “affirmative duty” to disclose is warranted, nor do I believe Hyatt was “required by law” or “obligated” to provide his declaration to the PTO. While Mr. Hyatt may have failed to overcome the rejections or to convince the Board based upon his submissions to the PTO, he did not fail to fulfill an “obligation” or “affirmative duty” as the majority alleges.
In this case, the district court found that Mr. Hyatt’s failure to proffer his
declaration to the PTO was merely negligent. . . . I find troubling the majority’s characterizations of Mr. Hyatt. See, e.g., Maj. Op. at 51 (Mr. “Hyatt purposefully kept [the Board] in the dark”); id. (his “blatant non-cooperation”); id. at 50 (Mr. “Hyatt willfully refused to provide evidence in his possession”); id. (Hyatt “refused to cooperate”); id. (“Hyatt’s willful non-cooperation”); id. at 55 (“Hyatt willfully refused”); id. at 49 (providing his declaration “should have been simple for him”); id. at 55 (that Hyatt’s failure “to perform a simple task that it was his burden to perform is inexcusable”); id. at 54 (“Hyatt’s perverse unhelpfulness”). None of this appears in the district court proceedings, the PTO proceedings, or the record— these fact findings ought to be left to the district court which is in the best position to weigh the contradictory evidence.
Contrary to the appellate finding of willful withholding, the record contains ample evidence of a lack of willful withholding. Here, the examiner rejected all of Mr. Hyatt’s 117 claims for lack of written description, failure to enable, obviousness-type double patenting (over 8 separate references), and Schneller-type double patenting (over the same 8 references). The examiner also rejected 9 claims as anticipated (Hill reference) and 7 as obvious (over a combination of three references). Technically, Mr. Hyatt was appealing 45 separate issues totaling 2546 separate rejections of his 117 claims to the Board. He wrote a 129-page appeal brief addressing all of these different rejections. And, to be clear, the Board reversed all the examiner’s rejections for obviousness, anticipation, obviousness-type double patenting, Schneller-type double patenting, and many of the written description and enablement rejections. With regard to the written description rejections in particular, the Board reversed the rejections of 38 claims and sustained the rejections of 79 claims. Mr. Hyatt prevailed on 92% of all the examiner’s rejections at the Board level. Despite Mr. Hyatt’s success, the majority declares Mr. Hyatt’s response to be “completely and wholly inadequate” and Mr. Hyatt to have been perversely unhelpful. Maj. Op. at 55, 56.
Although Mr. Hyatt may have failed to overcome all of the written description rejections based upon his submissions to the PTO, he did not fail to fulfill an “obligation” or “affirmative duty,” and he certainly was not “perversely unhelpful” as the majority alleges. . . I believe the court is wrong to hold that breach of the newly created affirmative duty, i.e., not producing evidence to the PTO, is willful withholding as a matter of law.
In hindsight, perhaps Mr. Hyatt should have submitted his declaration or that of any other expert earlier in the prosecution process. But hindsight is misleadingly acute. Declarations and expert reports are time consuming and expensive to prepare. It is hardly reasonable or even desirable to require patent applicants to put massive declarations into the record at an early stage of prosecution, weighing the cost to both the applicant and the PTO. See generally Mark A. Lemley, Rational Ignorance at the Patent Office, 95 Nw. U.L. Rev. 1495 (2003) (arguing that it would be inefficient for the PTO to overinvest in examination because so few patents are enforced). In this case, for example, the examiner rejected the claims on many different bases (double patenting on 8 different references, obviousness, anticipation, enablement, written description, etc.), totaling 2546 separate rejections. The Board overturned nearly all of them. It is easy with the benefit of hindsight to say Mr. Hyatt should have introduced more evidence on written description to the Board. But Mr. Hyatt was not facing merely a written description rejection, he was facing 2546 separate rejections on many, many different bases. The majority implausibly asserts that 2546 separate rejections is “proportional to Hyatt’s prosecution of an application containing 117 pending claims spanning 79 pages.” Maj. Op. at 56 n.35. An average of 21 rejections per claim is hardly proportional. Mr. Hyatt was forced to appeal 45 independent issues to the Board when the average is two. Dennis D. Crouch, Understanding the Role of the Board of Patent Appeals in Ex Parte Appeals, 4, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1423922. Despite this challenge, Mr. Hyatt was largely successful on appeal. Further, the length of Mr. Hyatt’s application suggests that his efforts to pinpoint pages containing certain terms was helpful and in good faith. Mr. Hyatt’s response may have been especially valuable in the time before searchable electronic applications.
To say that Mr. Hyatt had an affirmative duty to introduce all evidence to the Board or that he “owed” (Maj. Op. at 56) all the evidence he possessed is to put an enormous and undesirable burden on the patentee, one that will foreclose patent protection for many small inventors. Congress foresaw exactly this problem and ameliorated it with § 145 by providing applicants a way to initiate a civil action and introduce new evidence after Board proceedings when the issues are much more succinct and consolidated. This is illustrated perfectly here, where the applicant was contending with 2546 rejections on many different bases before the Board. After the Board overturned nearly all of them, only a small number of rejections—based on written description/enablement—were maintained. Hence at the district court the applicant could proffer much more extensive evidence because the universe of issues was greatly narrowed. This is the sensible approach Congress enacted. The statute even places the cost of the proceeding on the party better positioned to know the value of the application—the applicant. The majority’s new exclusionary rule based upon its new affirmative duty upsets this balance.
Notes: I expect that Hyatt will ask for reconsideration and will then push for Supreme Court review.
July 9, 2009 Damages, Patent, Patent Cases 2009Affirmed Without OpinionDennis Crouch
Acting pro-se, Alfred and Paul Fraser sued a handful of fish-stick makers for patent infringement. The Frasers apparently run
The Fraser Patent No. 4,781,930 covers a method of soaking fish in oil before freezing the fillets. The only claim reads as follows:
A method of preparing a fish product comprising filleting a fish to appropriate thickness, immediately immersing the filleted fish in a vegetable oil for a period of 5 to 10 minutes at room temperature to effect absorption of the oil to a depth such as to inhibit excretion of the natural fluids from the fillet and prevent incursion of air and moisture, draining the excess oil from the surface, covering the surface with crumbs and then freezing the fillet.
The district court granted summary judgment in favor of the defendants:
Defendant Midship could not be liable because that company was dissolved more than six years before Frasier filed suit. 35 U.S.C. § 286.
Defendant Good Harbor was dissolved bankruptcy in 2006. It cannot be held liable.
Defendants UNFI and National Fish were never properly served and thus cannot be required to appear in court. The court noted that “A return of service merely noting delivery to ‘girl at front disk’ does not comply with the strictures of Fed. R. Civ. P. 4(h) or Mass. R. Civ. P. 4(d)(2) with respect to service on a corporation.”
Defendants Gorton’s, Roche Bros., ConAgra, High Liner, and Pinnacle did not infringe, literally or by equivalents. “None of the five appellees immerse their frozen fish products in a vegetable oil for a period of 5 to 10 minutes at room temperature. Further, none of these appellees begin preparing frozen fish fillets using fresh fillets.”
The Federal Circuit affirmed each of these decisions and then turned to the issue of sanctions:
“The district court noted that Appellants did not provide any of the defendants with any notice of their patent, that they did not question any defendant concerning the manner of fish processing, and in the case of Midship and Good Harbor, that they did not even inquire as to the existence of these defendants prior to bringing suit. The record shows that Appellants proceeded to file suit without ascertaining correct names of some defendants. Despite detailed letters from counsel for various defendants explaining their clients’ processes and pointing out the differences between those processes and the patented process, Appellants continued to press forth the litigation. Appellants continued despite the district court’s clear explanation at a hearing that they could not prove infringement merely by proving the presence of oil as an ingredient on the list of the products at issue.”
July 6, 2009 Patent, Patent Cases 2009Federal Circuit En BancDennis Crouch
Effect of a Stipulated Dismissal
June 26, 2009 Patent, Patent Cases 2009Dennis Crouch
Garber v. Chicago Mercantile Exchange (CME) and the Chicago Board of Trade (CBOT) (Fed. Cir. 2009)
Garber first brought his patent infringment suit against the CME and CBOT in 2004. However, he had some trouble finding adequate representation and offered to dismiss without prejudice. The parties then filed an stipulated motion to dismiss without prejudice.
In his order dismissing that case, Judge Castillo (N.D. Ill.) added a statement that appears to be a typographical error giving Garber one-month “to move to reinstate this case or this lawsuit may be dismissed without prejudice.”
Two facts indicate to me that that Judge Castillo intended to threaten a dismissal “with prejudice” rather than “without prejudice.” First, the case was already dismissed without prejudice; and second, soon after his deadline had passed, Judge Castillo ordered the case dismissed with prejudice.
In any event, Garber did not re-file until 2008, and Judge Castillo refuesd to re-open the case. On appeal, the Federal Circuit reversed – finding that the joint stipulation of dismissal divsted the court of its power over the case – rendering the court’s dismissal “void ab initio.”
The appellate panel based its decision on Fed. R. Civ. Pro. R. 41(a)(1) which provides that “the plaintiff may dismiss an action without a court order by filing … a stipulation of dismissal signed by all parties who have appeared” and Seventh Circuit law on-point. See Smith v. Potter, 513 F.3d 781 (7th Cir. 2008).
A caution for patentees considering such a stipulation: Rule 41(a)(1)(B) makes clear that the stipulated dismissal is presumably without prejudice only if the plaintiff has not previously dismissed another action “based on or including the same claim.”
Garber’s asserted patent No. 5,963,923 is titled “System and method for trading having a principal market maker.”
Compact Prosecution: The patent application was filed July 1997. The Examiner issued a first non-final rejection in February 1998 and a second non-final rejection in December 1998. The notice of allowance was then mailed in April 1999.
According to the complaint, Garber has been a Chicago based trader since 1972.