Source: http://www.nutter.com/ip-law-bulletin/2010/03
Timestamp: 2017-12-15 00:39:33
Document Index: 185428629

Matched Legal Cases: ['§ 41', '§ 145', '§ 271', '§ 271', '§ 271', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 154', '§ 154', '§ 1', '§ 154', '§ 1', '§ 1']

Posts from March 2010.
The Board of Patent Appeals and Interferences (the BPAI) recently determined that arguments made for the first time in a reply brief will not be considered on appeal without “good cause.” In a recent precedential opinion, ex parte Atsuhisa Nakashima, the BPAI interpreted 37 C.F.R. § 41 as not requiring the BPAI to consider new reply brief arguments. In its principal brief, the applicant argued that the Examiner’s suggested combination would destroy the functionality of the primary reference and that the references were deficient with regard to an aspect of the claims at issue. The applicant included a new argument in the reply brief that there was no reason to combine the references because the result would be undesirable. The new argument was made without any stated reason as to why it had not been presented in the principal brief. The BPAI refused to consider the new argument, stating that “any argument not timely presented in the principal Brief [sic] will not be considered when filed in a Reply Brief, absent a showing of good cause explaining why the argument could not have been presented in the Principal Brief.” It is worth noting that a pending en banc Federal Circuit case, Hyatt v. Kappos, will consider the limits of new arguments and evidence that can be presented in appeals of BPAI decisions to a District Court under 35 U.S.C. § 145. The outcome of this case may impact an applicant’s strategy for selecting arguments and evidence to present at various stages of appeal.
A copy of the Nakashima opinion can be found on the USPTO website at the following link.
By Rory P. Pheiffer on 03.15.2010
In a recent Federal Circuit decision, the court held that a defendant that acted with deliberate disregard to an overt risk that a device it copied might be associated with a patent was liable for induced infringement. While induced infringement requires both an occurrence of actual infringement and a finding that the alleged infringer knew or should have known that actions would induce actual infringements, this case makes it clear that pleading ignorance to avoid actual knowledge is not sufficient when there is an overt risk that an element of the offense existed. In SEB v. Montgomery Ward 1, the company accused of inducing infringement argued that because it had no knowledge of the patent in question, it could not be liable for induced infringement. However, because the accused infringer both admitted to copying a product that was covered by the patent, and failed to mention that it copied the product to the attorney conducting the clearance opinion, the court found that the accused infringer acted with “deliberate indifference,” and thus did have the requisite knowledge for finding induced infringement.
SEB S.A. (SEB) is the owner of U.S. Patent No. 4,995,312 (the ‘312 patent), which is directed to a deep fryer. SEB, along with its co-plaintiff T-Fal Corporation, which distributes SEB’s products in the United States (collectively, SEB), sued Montgomery Ward & Co., Inc. (Montgomery), as well as Global-Tech Appliances, Inc. and Pentalpha Enterprises, Ltd. (collectively, Pentalpha) alleging both direct infringement under 35 U.S.C. § 271(a) and induced infringement under 35 U.S.C. § 271(b). This article focuses on the induced infringement claim. In the present case, because Pentalpha supplied the alleged infringing products to Montgomery, it was Pentalpha that was liable for any induced infringement.
According to 35 U.S.C. § 271(b), “Whoever actively induces infringement of a patent shall be liable as an infringer.” Courts construe this statute to require two elements: (1) an occurrence of actual infringement; and (2) that the alleged infringer knew or should have known that actions would induce actual infringements.
The first element of induced infringement was virtually conceded by Pentalpha. Pentalpha admitted to purchasing an SEB deep fryer in Hong Kong and copying it. The district court found that Pentalpha copied everything but the cosmetics of the SEB deep fryer. The district court also found that a deep fryer constructed as a design-around by Pentalpha infringed under the doctrine of equivalents. Pentalpha failed to advance any arguments related to infringement on appeal, thereby conceding this first element of induced infringement.
Pentalpha’s defense instead focused on the second element. Pentalpha argued that because it had no knowledge of the existence of the ‘312 patent, that the second element for induced infringement could not be met. To support this position, Pentalpha relied on a Federal Circuit decision from 2006, DSU Med. Corp. v. JMS Co., which stated “[t]he requirement that the alleged infringer knew or should have known his actions would induce actual infringement necessarily includes the requirement that he or she knew of the patent.”2 (Emphasis added.) While the district court agreed that there was no evidence that Pentalpha was aware of the ‘312 patent prior to being sued, the district court still found the second element met. In affirming the district court, the Federal Circuit agreed.
In distinguishing DSU, the Federal Circuit noted that DSU did not set out the metes and bounds of the knowledge-of-the-patent requirement. The court held that actual or constructive knowledge is appropriate for the second element of induced infringement. Further, in evaluating the “knew or should have known” standard, the court determined that acting with “deliberate indifference” was an extension of the “knowledge” requirement. Both “knowledge” and “deliberate indifference” are evaluated subjectively (unlike “should have known,” which is objectively), and the court held that if a defendant knew of and disregarded the overt risk that an element of the offense existed, this constituted knowledge.3
The court determined that Pentalpha acted with “deliberate indifference” based on two actions in particular. First, the action of copying all but the cosmetics of the deep fryer was an action indicating deliberate disregard of a known risk. While Pentalpha argued that the fryer it copied was not marked with a patent number, both because the fryer was purchased in Hong Kong (where there would be no U.S. marking requirement) and because Pentalpha failed to show that it concluded there was no risk because they did not see a patent number on the fryer, the court was not persuaded. Second, Pentalpha also deliberately disregarded a known risk by failing to disclose the copying of the SEB deep fryer to the attorney that conducted a clearance opinion for SEB. While obtaining a clearance opinion can generally be helpful in negating intent, a clearance opinion in which the party obtaining the opinion withholds a key fact like it copied the invention is not helpful in negating intent. In fact, the court stated that this failure on its face was highly suggestive of deliberate indifference. The court found this withholding even more troublesome because the president of Pentalpha was well-versed in the U.S. patent system. These factors all supported the court’s finding that Pentalpha acted with complete disregard to an overt risk, and thus had knowledge of the ‘312 patent by way of “deliberate indifference.”
In view of this decision, companies should act prudently when monitoring its competitors’ products. Companies should certainly avoid copying competitors’ products. Further, to the extent companies take actions to design-around particular products or particular patents, it is generally a good idea to have an independent clearance opinion performed prior to using, making, or offering for sale the resulting product. Companies should openly disclose to the attorney providing the clearance opinion any products or patents that the resulting product was designed-around.
1___ F.3d ___, 93 U.S.P.Q.2d 1617, Civ. Act. No. 2009-1099, -1108, -1119, 2010 WL 398118 (Fed. Cir. February 5, 2010).
2471 F.3d 1293, 1304, 81 U.S.P.Q.2d 1238, 1246 (Fed. Cir. 2006) (en banc only on issue of required intent for induced infringement).
3The court noted, however, that a defendant can defeat an allegation of “deliberate indifference” by showing it was genuinely “unaware even of an obvious risk.”
By Michael P. Visconti, III on 03.15.2010
In its January 2010 decision in Wyeth v. Kappos1, the Federal Circuit found that the United States Patent and Trademark Office (USPTO) had been miscalculating Patent Term Adjustment (PTA) for many applications, especially those that were pending for more than three years. In response to this decision, the USPTO announced an interim procedure for requesting PTA recalculation and initiated an overhaul of the computer system used to calculate PTA. This article briefly summarizes the procedures that applicants and patentees can follow to ensure that they are granted the correct amount of PTA.
Patents Issued before March 2, 2010
Although the Wyeth decision was announced on January 7, 2010, the USPTO did not roll out the corrections to its computer program for calculating PTA until March 2, 2010. For all patents that issued prior to March 2, 2010, the USPTO’s recently developed interim procedure can be used to request a recalculation of PTA.
The interim procedure requires filing a simple one-page form (PTO/SB/131). No fee is required, however the form must be filed within 180 days of the issue date of the patent. Unfortunately, there is no straightforward way to request PTA recalculation for patents in which more than 180 days have elapsed since the issue date. Additionally, the interim procedure can only be used to request correction of Wyeth-type PTA errors. All other PTA errors must be addressed using traditional procedures.
Patents Issuing on or after March 2, 2010
For patents that issue on or after March 2, 2010, Wyeth-type PTA errors should no longer occur because the USPTO’s automated PTA calculations should now be consistent with Wyeth. If, however, a Wyeth-type PTA error does occur, the USPTO’s interim procedure cannot be used. Instead, a petition must be filed under 37 C.F.R. § 1.705, and the petition must be accompanied by the appropriate fee.
37 C.F.R. § 1.705 generally provides two different situations in which a petition for PTA recalculation can be filed. In one situation, § 1.705(b) provides a mechanism for requesting reconsideration of the PTA indicated in the notice of allowance. Petitions under § 1.705(b) must be filed no later than the date the issue fee is paid. In a second situation, § 1.705(d) provides a mechanism for requesting reconsideration of the PTA indicated on the issued patent. Petitions under § 1.705(d) must be filed within two months of the date that the patent issued, but will be dismissed as untimely if they raise issues that were raised, or that could have been raised, in a petition under § 1.705(b).
One example of a petition that could not have been raised under § 1.705(b) relates to the three-year pendency provision. The USPTO does not calculate and inform the applicant of the PTA based upon the three-year pendency provision of 35 U.S.C. § 154(b)(1)(B) in the notice of allowance because the USPTO must know the date the patent will issue to be able to calculate the PTA based upon this provision. Thus, reconsideration of the PTA indicated in the issued patent as it relates to the three-year pendency provision of 35 U.S.C. § 154(b)(1)(B) is not considered a matter that could have been raised in an application for PTA reconsideration under § 1.705(b)2. A request for reconsideration of the PTA calculation based on the three-year pendency provision of 35 U.S.C. § 154(b)(1)(B) will therefore be considered timely under § 1.705(d) if filed within two months of the date the patent issued. In other words, even if there appears to be a Wyeth-type error in the PTA indicated in the notice of allowance, there is generally no need to file a petition before paying the issue fee. Instead, the PTA should be checked again when the patent ultimately issues to determine if the error is still present and thus if a § 1.705(d) petition is needed to correct the PTA.
1 591 F.3d 1364, 93 U.S.P.Q.2d 1257, Civ. Act. No. 2009-1120 (Fed. Cir. 2010).
2 United States Patent and Trademark Office – Official Gazette, October 6, 2009, 1347 OG 49.
By John (Jack) J. Penny on 03.15.2010
Our January 2010 issue included a report about the initiative implemented by the USPTO to reduce the backlog of patent applications by permitting small entity applicants to expressly abandon one application and file a petition seeking special status for a second application. This initiative is sometimes referred to as the “Bump and Dump” program. To be eligible for this program both applications must be unexamined, must have been filed earlier than October 1, 2009, and must either be owned by the same party or have at least one common inventor. Further, the abandoned application cannot be revived and fees associated with the abandoned application cannot be recovered. The USPTO recently announced that this program has been extended through June 30, 2010. Small entity applicants that have unexamined applications that they are no longer interested in pursuing should consider taking advantage of this rule to expedite examination of another application.
Additional details and requirements are available from the USPTO website via the following link.