Source: http://patentlyo.com/patent/2013/07
Timestamp: 2016-08-29 19:48:15
Document Index: 665752641

Matched Legal Cases: ['§1331', '§1332', '§1332', '§ 112', '§ 41', '§ 101', '§101', '§ 101', '§ 101', '§ 101', '§103']

July | 2013 | Patently-O
July 30, 2013PatentDennis Crouch	By Dennis Crouch Novozymes A/S v. DuPont Nutrition Biosciences (Fed. Cir. 2013) involved an interesting issue of the weight a judge should give to a jury decision on JNOV. In the case, a jury rejected the accused infringer's written description invalidity argument. However, in a post-verdict judgment the district court judge determined the patent claims invalid as a matter of law, notwithstanding the jury verdict. The law ordinarily requires that jury decisions be given some amount of deference and factual determinations by a jury (such as the written description inquiry) should only be overturned by a judge when not supported by substantial evidence. Some courts rephrase this test as requiring a verdict be "clearly erroneous" before a court may overturn that verdict and, as such, a court cannot merely substitute its own judgment. The logical confusion in this case stems from the rule that patent invalidity must be proven with clear and convincing evidence. Thus, the court's JNOV decision ruled that: the jury verdict (finding DuPont failed to present clear and convincing evidence of invalidity) was clearly erroneous. My question is whether these two requirements actually merge in this situation. I.e., can the court overturn the jury's non-invalidity verdict if it finds clear and convincing evidence that the patent is invalid? Or instead, must the court apply some standard that is even higher than clear-and-convincing evidence before overturning the jury verdict. Neither of these solutions seem appropriate, although in the appellate court case the majority (Judges SCHALL and BRYSON) chose the prior while the dissent (Chief Judge RADER) chose the latter. Patently-O Authors
July 29, 2013PatentDennis Crouch	By Dennis Crouch
Written Description: Showing “Possession” of a Negative Limitation
July 28, 2013PatentDennis Crouch	By Dennis Crouch In re Bimeda Research & Development (Fed. Cir. 2013) Bovine mastitis is udderly problematic. Since so many folks now want to buy antibiotic free milk, dairy owners are looking for new ways to address the issue. Bimeda's patent relates to one solution that can be used during a "dry period" – typically prior to a cow giving birth. See U.S. Patent No. 6,506,400. The offered solution essentially involves painting-on a waxy physical barrier to protect the mammary teat canal during the dry period. These seals are not new, but Bimeda's revolution is that its seals do not include any antiinfectives. In 2009, a competitor (Merial Ltd., a Sanofi compani) filed an ex parte reexamination request. During reexamination, Bimeda added several new claims including a new limitation that the physical barrier seal is made of "an acriflavine-free" formulation. Acriflavine is well known to folks skilled in the art as a treatment for mastitis. However, the original specification does not mention acriflavine. The result is that the PTO Board found the claim unpatentable for failing to comply with the written description requirement of 35 U.S.C. 112. On appeal, the Federal Circuit affirms. The original patent application must disclose the invention being claimed – otherwise the claim fails the written description requirement and is unpatentable. Written description issues arise most often when a patentee changes claim language during prosecution (as here) and adds new limitations in order to avoid prior art. Written description is often seen as a "technicality" requirement because it applies even when the added limitation would have been easy for someone of skill in the art to add without further instructions in the application specification. The point of the requirement is to make sure that patents are only granted to cover subject matter actually invented. Here, Bimeda argued that it should be able to add the acriflavine-free limitation because (1) acriflavine is an antiinfective and the application described formulations that were antiinfective free and, the exemplary embodiment (Example 1) described a formulation that was acriflavine-free. Now, to be clear, the example did not spell out that the formulation was "acriflavine-free." Rather, acriflavine was simply not in the list of ingredients. On appeal the Federal Circuit reviewed the factual question of written description for substantial evidence. Thus, the PTO wins if it can show more a mere scintilla of evidence in support of its findings. The court easily found sufficient evidence. In this case, the Board found, inter alia, that claim 32 failed the written description requirement because the disclosure did not "describe[] a formulation excluding a specific species of the anti-infective genus, while permitting others to be present." On appeal, Bimeda counters this finding by arguing that the disclosure broadly claims a teat seal formulation utilizing a physical barrier, yet does not expressly exclude any particular antiinfective agents. Bimeda interprets this as tacit indifference to the presence or absence of specific antiinfectives, and contends that the disclosure therefore supports a claim which excludes one particular antiinfective (such as acriflavine) but permits the use of others (such as antibiotics). Substantial evidence supports the Board's contrary interpretation because the disclosure is generally inconsistent with a formulation which, like claim 32, excludes acriflavine but could include antibiotics. Judge Clevenger drafted the opinion for the court. Chief Judge Rader also filed a short concurring opinion noting that the usual catchphrase of "possession" is not the correct way to think about written description. In particular, according to Rader, possession makes no sense here where the focus is on a negative limitation. He writes that "the Board places the patentee into a Catch-22: to satisfy written description, the patentee must show possession of something it specifically claims it does not possess." Here, Judge Rader suggested an important element in this case is the fact that Acriflavine is a "well-known species of antiinfective that [has] been used in teat seals to treat bovine mastitis for over 75 years." Along these lines, it makes sense that you could later claim a "wheat-free" bread invention based upon a disclosed bread recipe that includes a list of ingredients for making the bread and where wheat is missing from the ingredient list. Of course Charles Machine Works v. Vermeer Mfg: CAFC continues rolling back the vitiation doctrine
Slip Op. at 8-9. The court's conclusion in this case is particularly notable given that it applied vitiation in a very different way to a "mounted on" limitation in Asyst Technologies, Inc. v. Emtrak, Inc. 402 F.3d 1188, 1195 (Fed. Cir. 2005), ("This case falls within both that doctrine and its corollary, the "specific exclusion" principle, since the term "mounted" can fairly be said to specifically exclude objects that are "unmounted."). CMW's Lack of Notice: The Federal Circuit also reversed the district court's grant of summary judgment as to Vermeer's non-commercial prototypes (which include a structure called a wear pad) on the ground that CMW had insufficient notice that the summary judgment decision would include the prototypes. Vermeer's moving papers were titled "MOTION FOR SUMMARY JUDGMENT THAT VERMEER’S COMMERCIALPRODUCTS DO NOT INFRINGE," its proposed rulings bore the heading "GRANT SUMMARY JUDGMENTTHAT VERMEER’S COMMERCIAL PRODUCT DOES NOT INFRINGE THE ASSERTED CLAIMS . . . OF THE’569 PATENT," and at oral argument it indicated that the prototypes were not the focus of the motion and trial would still be required on the prototypes. Guest Post: Why Lighting Ballast Won’t Solve Claim Construction
July 26, 2013PatentJason Rantanen	Guest post by Thomas W. Krause and Heather F. Auyang. In our recently-published article, What Close Cases and Reversals Reveal About Claim Construction at the Federal Circuit, 12 J. Marshall Rev. Intell. Prop. L. 583 (2013) (available at http://jmripl.com/issues/article/310), we focus on two independent sets of cases that reveal some deep truths about the current state of claim construction jurisprudence, and which show that the current problems with claim construction have little to do with the narrow "deference" issue in Lighting Ballast. The article reports on (1) claim construction cases in which the Federal Circuit judges disagreed on an issue of claim construction, and (2) claim construction cases where the Federal Circuit reversed a district court. Close Cases
We call the former set "close cases," since they are typically decided by a 2-1 vote, as opposed to a 3-0 vote. The notion is that 3-0 cases are not all that interesting — if all the judges agree on an issue, then odds are it is not that controversial. 2-1 cases, by contrast, often reflect differences in approach between the judges.
Here is a chart that shows that in close cases, some judges predictably vote for a broader interpretation, others predictably vote for a narrower interpretation, and the remaining judges vote unpredictably. If predictability is the goal, then the easiest solution would be for the Court to choose between Judges Linn and Lourie, and let that judge's principles guide claim construction in every case. Until such a "choice" is made, claim construction in "close" cases will always be panel dependent. If Judges Lourie and Linn are both deemed “wrong,” then it is difficult to see how we will ever attain predictability in claim construction at the Federal Circuit. The basic divide seems to be over what we call the “actually invented” standard – the approach taken by Judge Lourie (and others), and opposed by Chief Judge Rader (and others). The Federal Circuit’s failure to take this issue en banc in Retractable Technologies guarantees that there will be a steady flow of dissents in claim construction cases for the foreseeable future.
We also looked at the same set of cases in terms of whether the judges were (i) more or less likely to be accused of "importing" a limitation from the specification, (ii) more or less likely to affirm a district court claim construction, and (iii) more or less likely to vote for the patentholder. These parameters are not independent of the decision to vote broad or narrow (since a narrow interpretation typically aligns with the district court [see below] and against the patentholder), but it’s interesting to look at the ways in which the data do not track. Some judges vote against the patent holder and against the district court more often than one would expect based on their broad/narrow voting tendencies, and others vote for the patent holder and for the district court more often than one would expect. Figures 2-4 in the article show these results.
We also created individual charts for each judge, which show case by case how the judges voted in terms of broad/narrow, pro-affirm/pro-reverse, and pro-patent/anti-patent. Here are a few contrasting examples, which underscore some of the more dramatic differences:
Just looking at these charts (without even trying to figure out what they mean) shows that these judges vote very differently from each other. The article provides itself provides a few observations based on the charts (and an explanation of how to read them, if it’s not readily apparent).
The reversals are also very interesting. We focused on these cases because they – by definition – are cases in which the district court did something wrong. What we found is that when district courts err, they tend to err in favor of a narrower interpretation. In other words, while one might expect, all things being equal, that district courts would err as often in a broadening as a narrowing direction, all things are clearly not equal. Over 2/3 of the time, the district court's mistake was in going narrow. On reflection, this should not be surprising. A narrower interpretation often permits a district court to grant summary judgment of non-infringement and thereby get the case up to the Federal Circuit without having to put the parties and the court through the time and expense of a trial. But given this nearly systematic bias, perhaps giving more deference to district courts will not be particularly helpful.
We welcome any comments. Thomas W. Krause is an Adjunct Professor of Law at the Georgetown Law Center and Special Counsel for Intellectual Property Litigation at the United States Patent & Trademark Office. Heather F. Auyang is Senior Counsel at LTL Trial Attorneys in Redwood City, California. The views and opinions expressed herein are those of the authors and do not reflect the views or opinions of the United States Patent and Trademark Office or LTL Trial Attorneys.
Final stage: the patent holder is limited to no more than 5 claims from each patent and not more than 16 claims total, while the patent defendant is limited to no more than 6 prior art references per patent and not more than 20 references total. The Model Order also includes a three-page explanation, with citations, of why adopting an order limiting excess patent claims and prior art benefits both the court and the parties themselves. The Model Order Re: Excess Claims follows on the heels of the Advisory Council's E-Discovery Model Order, which Dennis previously wrote about. I've heard from several practitioners that the E-Discovery Model Order has produced a substantial positive impact on discovery in patent litigation, and that the trend is toward leaner, more focused discovery. I'd be interested in hearing whether that's reflective of patent litigation more broadly. Third Circuit Revives “Exclusive Generic” Contract Claim
July 25, 2013PatentDennis Crouch	By Dennis Crouch Mylan Inc. v. SmithKline Beecham Corp., — F.3d —-, 2013 WL 3780163 (3rd Cir. 2013) GSK holds a patent and FDA rights to market and sell AG paroxetine and it does so under the brand name Paxil CR. In a 2007 settlement contract GSK licensed Mylan as a limited generic manufacturer. In 2010, GSK began manufacturing its own generic version that was distributed and sold by Apotex. Mylan then filed suit, arguing that the GSK-Apotex generics violate the 2007 GSK-Mylan contract. The 2007 contract particularly promised Mylan exclusive rights to market and sell generic paroxetine for the remaining life of the GSK’s patent. In response to FTC review, the license was amended to allow “GSK or its Affiliate” to market and sell its own generic version beginning in 2010. In the lawsuit, Mylan argued that the contract limitation of “GSK or its affiliate” did not include a third-party generic competitor. The district court sided with GSK in finding that the contract language was clear in permitting the GSK-Apotex sales. However, on appeal, the Third Circuit reversed and remanded finding that “latent ambiguity” in the contract language as to whether Apotex is an “affiliate” or a “third party” under the contract. [T]he alternative reading of the contested language suggested by Mylan [is] both reasonable and supported by objective evidence of the parties’ intentions. This demonstrates latent ambiguity in the contractual language. Hence summary judgment was not appropriate on Mylan’s breach-of-contract cause of action. “The construction of a written contract is usually a legal question for the court, but where there is uncertainty, ambiguity or the need for parol evidence in aid of interpretation, then the doubtful provision should be left to the jury.” Schor v. FMS Fin. Corp., 357 N.J.Super. 185(N.J.Super.Ct.App.Div.2002). On remand, the court is instructed to proceed to trial. No Federal Court Jurisdiction?: [Note Update Below] Ordinarily this type of state-law contract lawsuit would be handled in state law court. In the complaint, Mylan alleges both federal question jurisdiction under 28 U.S.C. §1331 and diversity-of-citizenship jurisdiction under 28 U.S.C. §1332. GSK agreed that the case should be heard by the Federal Courts. However, a federal court’s subject matter jurisdiction is not subject to agreement by the parties. Rather, the federal courts are of constitutionally limited jurisdiction and the court has an independent duty to determine in each case whether it has proper jurisdiction. And, in this case, it appears that the district court failed in that duty. First, there is no allegation of any violation of federal law. In Gunn v. Minton (2013), the Supreme Court again restated that the mere involvement of a patent law issue is insufficient to create a federal question. Second, the case appears to lack the required complete diversity of citizenship as require under §1332 since both the plaintiff (Mylan Inc.) and a named defendant (SmithKline Beecham Corporation) have their principal places of business in Pennsylvania. See Strawbridge v.. Curtiss, 7 U.S. 267 (1806). Finally, the 2007 contract between the parties indicates that any lawsuit arising from the contract will be brought in the New Jersey Federal District Court. However, once again, consent to jurisdiction of the Federal Court does not provide that court with subject matter jurisdiction over the case. On remand, district court Judge Pisano and Magistrate Judge Goodman should request briefing on subject matter jurisdiction to determine whether the case should be dismissed. UPDATE – A reader sent over a case-on-point directly on-point decided two weeks ago by the Third Circuit. Lucier v. SmithKline Beecham Corp., — F.3d —-, 2013 WL 2456043 (3rd Cir. 2013). Lucier was a thalidomide case against GSK, SmithKline Beecham, Sanofi-Aventis, Grunethal, and others and was originally filed in Pennsylvania state court. Defendants removed the case to Federal Court based on diversity allegation. The plaintiffs challenged diversity by arguing that SKB was a Pennsylvania entity. The Third Circuit sided with the defendants – finding that SmithKline Beecham is not a Pennsylvania entity. It turns out that in 2009, SKB officially changed its name to GSK LLC and converted from a Pennsylvania corporation to a Delaware LLC in order to obtain certain tax benefits. In the conversion, the GSK LLC’s headquarters and seeming principal place of business remained in Pennsylvania. When considering diversity of citizenship, the rule for corporations is that a corporation is a citizen of both its state of incorporation and the state of its principal place of business. However, in Lucier, the Third Circuit determined that the rule is different for limited liability corporations and that the principal place of business is irrelevant. Rather, for LLC’s the rule is that the LLC’s citizenship is determined by the location of its members (owners). GSK LLC’s only member is GSK Holding Company and, since GSK Holding is incorporated and operates from Delaware, both it and its wholly owned LLC are Delaware citizens. In its decision, the Third Circuit admitted the formality of its rule, but said tough. Guest Post by Christopher Cotropia on Existing Deference in Patent Claim Interpretation
July 24, 2013PatentJason Rantanen	Christopher Cotropia is a Professor of Law and the Austin Owen Research Fellow at the University of Richmond School of Law. Below he highlights a few important conclusions from an empirical study on patent claim construction that he recently completed. The full study is available here. ﻿ Is Patent Claim Interpretation Review Deference or Correction Driven?
The Federal Circuit’s now fifteen-year practice of reviewing lower court claim interpretation de novo is being reconsidered en banc in Lighting Ballast Control LLC v. Philips Electronics North America Corporation. Although the question of whether review should be de novo can be answered under a number of criteria, in patent cases it is commonly viewed as a tradeoff between certainty and correctness. With regards to certainty, the current belief is that de novo review results in great uncertainty in patent cases because litigants cannot predict the controlling claim construction in a case until the Federal Circuit makes its independent determination on appeal. Giving district courts greater deference would, in turn, allow certainty as to claim construction to come earlier in patent cases.
In contrast, appellate review is in place, at least in part, to correct mistakes made by lower courts and ensure the “correct” result is reached in a given case. The more deference provided to lower courts, the less opportunity the Federal Circuit has to correct (or incorrect, depending on your view of the Federal Circuit) the decision. Standard of review presents the question of who—that is which tribunal—is more likely to reach the correct answer regarding claim interpretation and, given claim meaning’s central nature to the patent dispute, the ultimate question of who should win the case. While many aspects of these issues need to be explored to determine the optimum standard of review (how much is greater certainty worth?, who is more likely to reach the correct answer?, and what is the correct answer we want to achieve?), there is value in establishing a baseline on both issues. Assuming the Federal Circuit’s claim construction is correct, it follows that de novo review results in greater correctness, albeit at the expense of possible increased uncertainty. But both of these assumptions rest on the belief that the Federal Circuit currently engages in de novo review, currently provides no deference in practice, and arrives at the “correct” result in appealed cases, at least more often than district courts do on first pass.
In a new paper, I try to establish this baseline by collecting and analyzing Federal Circuit claim construction reviews over the last three-plus years. At first blush, the results show there is a high level of certainty in claim construction appeals. The rate of affirmance of district court claim interpretations has been increasing since 2010. And, in the first quarter of 2013, the affirmance rate has reached over 75%. This data confirms that observed by Jonas Anderson and Peter Menell in 2011 for an earlier period. TABLE 1
And these claim construction reversals are even more likely in appeals of cases involving electronic, information technology, or business method patents where the patentee won below. The opposite is true in cases involving patentee wins in the biological and chemical technologies—the Federal Circuit affirms these constructions, and results, more often. TABLE 3
What does this data mean for Lighting Ballast Control? A change in standard of review would have an impact—greater certainty, and less change on appeal, for particular types of cases. This certainty would come at a cost—losing the current correction going on. Answering whether this is truly a cost, specifically one that outweighs any certainty gained by changing the standard of review, is left for others, as is the meta-question of what the “correct” answer is in any patent claim construction case. This data also describes a Federal Circuit that is very different then commonly portrayed. The Federal Circuit, when reviewing a district court’s claim interpretation, is not as patent-friendly as some would think. A full version of the paper this post is based upon can be found here.
July 24, 2013PatentDennis Crouch	By Dennis Crouch Novozymes A/S v. DuPont Nutrition Biosciences (Fed. Cir. 2013) At trial, the jury sided with the patentee Novozymes on the issue of validity – finding that DuPont had failed to prove “by clear and convincing evidence that any one or more of the claims are invalid because the application filed on November 16, 2000 . . . does not contain an adequate written description.” Following the verdict, however, the district court judge rejected the jury verdict and instead held that, as a matter of law, the claims lacked written description support. On appeal, the Federal Circuit now affirms – finding that no reasonable jury could find the patent valid. The written description requirement of 35 U.S.C. § 112(a) mandates that a patent application’s written description must ‘clearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimed.’ Vas-Cath. The requirement questions whether the inventor was in possession of the claimed invention at the time the patent application was filed. In this case, Claim 1 of the invention is directed to an alpha-amylase enzyme variant with a 90%+ sequence identity to BSG alpha-amylase, an amino acid substitution at serine 239, and increased thermostability at pH 4.5, 90°C, and 5 ppm calcium. The enzyme is used to make ethanol. The original patent application describes each element of the claimed invention. However, the application does not particularly identify this particular combination of limitations. Rather, the application lists BSG along with six other types of alpha-amylase; lists the 239 position mutation along with 32 other potential mutation positions; and indicates broader ranges for thermostability of 4.5-5 pH and 85-95°C. U.S. Patent No. 7,713,723. In considering whether the description was sufficient, the Federal Circuit considered the claimed invention “as a integrated whole” rather than merely element by element: While the 2000 application provides formal textual support for each individual limitation recited in the claims of the ‘723 patent, it nowhere describes the actual functioning, thermostable alpha-amylase variants that those limitations together define. Taking each claim—as we must—as an integrated whole rather than as a collection of independent limitations, one searches the 2000 application in vain for the disclosure of even a single species that falls within the claims or for any “blaze marks” that would lead an ordinarily skilled investigator toward such a species among a slew of competing possibilities. The court makes clear here that written description is not satisfied merely by ensuring that each individual claim limitation is disclosed in the original disclosure. Rather, the written description requires disclosure of the patented claim as a whole. Although strongly worded, this case is one in a spectrum of written description cases and thus only incrementally moves the law. The majority opinion was written by Judge Schall. Chief Judge Rader wrote in dissent – arguing that substantial evidence supported the jury verdict.
Federal Circuit gets Technical with PTAB Failures
July 21, 2013PatentDennis Crouch	By Dennis Crouch In re Guiffrida (Fed. Cir. 2013) (non-precedential) Great Lakes NeuroTechnologies is a spin-off of Cleveland Medical Devices (CMDI) and focuses on therapy systems for movement disorders. The new company took control of a handful of CMDI patents when it was formed back in 2011. However, the patent application in question would be their first post-formation patent issuance, and the company’s first patent issued listing its president (Joe Guiffrida) as an inventor. The preamble of Guiffrida’s first claim is directed toward a “portable therapy system,” although the claims body does not provide any further portability related limitation. In its decision, the PTAB had rejected the claim as anticipated over a single prior art reference (Shields). Shields does not make any remarks regarding portability, but the PTAB found the limitation disclosed because Shields does “not appear to contain any structure confining it to a particular location.” On appeal, the Federal Circuit rejected that analysis – finding that the prior art’s failure to disclose non-portability is not the equivalent of disclosing portability. An anticipating reference must disclose every claim limitation, either expressly or inherently [and i]nherent disclosure requires that the prior-art reference necessarily include the unstated limitation. . . . The Board found that Shields inherently discloses a portable system because Shields does “not appear to contain any structure confining it to a particular location.” But that observation does not indicate that Shields “necessarily” includes a portability limitation, or even that Shields must necessarily be free from “confin[ement] to a particular location.” On the contrary, a finding that Shields does not say that its system is not portable—which is all that the Board’s statement implies—is just a restatement of the fact that Shields does not expressly disclose a portability limitation. It does not suggest anything about what Shields inherently discloses that would suffice to shift the burden to Giuffrida to disprove inherency. A confusing aspect of patent claims is that a claim preamble is often seen as non-limiting. Here, any confusion was eliminated because the PTO and the applicant agreed that the portability limitation is limiting. In the appeal, the Federal Circuit accepted that interpretation without comment. Broadest Reasonable Interpretation Requires Consideration of Specification: The parties did not wholly agree on the meaning of portability. For its part, the PTO applied its wrong-headed “broadest reasonable interpretation” to suggest that a portable device is one that “can be carried.” Although irrelevant for this case, the Federal Circuit took the PTO to task for applying that “dictionary definition” of the claim term rather than construing the term “in light of the specification as it would be interpreted by one of ordinary skill in the art.” Quoting Phillips v. AWH. According to the appellate panel, the specification provides that a portable system is one that is “capable of being transported relatively easily.” In fact, the specification states that “By portable it is meant among other things that the device is capable of being transported relatively easily.” The Federal Circuit seems to have skipped over the wiggle-words “among other things” that were certainly inserted in order to open the term to a much wider variety of definitions. Cryptic PTAB Decisions: In an earlier essay, I wrote about the Board’s new approach of writing shorter opinions. Here, the Federal Circuit gave some credence to that approach. Noting that cryptic obviousness rejections can be upheld where the analysis can be “reasonably discerned.” Here, the court noted that the board can rely upon the examiner’s brief in its decision. Board made a number of obviousness rejections and those were affirmed on appeal except for claim 24 that I will discuss below. On remand, the PTO may also replace the reversed anticipation rejections (discussed above) with obviousness rejections – especially since the result of this case is that many of the here-adjudged novel claims have dependent claims that are here-adjudged as obvious. Claim 24 in the patent application adds a limitation that some of the system components communicate using “a two-way RF link.” I don’t think that anyone (even a Federal Circuit judge) believes that a two-way RF communication limitation would normally transform an unpatentable system into one that is non-obvious (without something more). But, here the Federal Circuit reversed the rejection – finding that the PTO had failed to prove-up its burden. [The proffered prior art’ uses ultrasound transducers that communicate with a compact unit, which, in turn, communicates with a computer. Those communications are twice referred to as “wireless,” but the document says little else about them. It does not mention a radio frequency (RF) link, a two-way or bidirectional link, the retransmission of data over such a link, or any benefits from such retransmissions. We have been pointed to no substantial evidence that Zheng teaches such features. Nor has the Director persuasively explained why Zheng [the prior art] renders those limitations from claim 24 obvious. On the contrary, the reasoning within the PTO has been inconsistent and conclusory in this matter. In stating that it “fail[ed] to see how a system that can both receive signals from sensors and deliver them to, for example, FES systems, could operate absent a two-way link,” the Board cited a paragraph in Zheng that mentions a wireless link between units embedded in the body and an “outside control unit.” The Examiner invoked different paragraphs from Zheng to find that a two-way link is “implied” or “required.” Broad-brush statements based on Zheng’s generic references to a “wireless” link are insufficient to support the conclusion that Zheng renders obvious a claim calling for the “wireless[ ] retransmi[ssion] [of sensor signals] over a two-way RF link.” We therefore reverse the rejection of claim 24. On remand, the PTO should be able to find some prior art that shows wireless RF two-way communication that fits this case. Federal Circuit Deciding USPTO Procedure: New Grounds for Rejection
July 19, 2013PatentDennis Crouch	By Dennis Crouch In re Adler, Appeal No. 12-1610 (Fed. Cir. 2013) The Israeli company Given Imaging makes a swallowable capsule imaging device takes readings as it passes through a patient’s GI tract. The company has dozens of patents on various aspects of the device and its use. In this case, the company has asked the USPTO for a patent on the method of comparing the images taken by the capsule with “a reference value of blood and to a reference value of healthy tissue” and then displayed with color-coding on a monitor with “red color” indicating blood in the esophagus. The USPTO examiner rejected the claims as obvious when compared against two prior art references – one that disclosed the capsule imaging device and the other that disclosed the comparison process and color-coding of blood findings. On appeal, the PTAB affirmed – finding the claims obvious in light of the two prior art references. However, the PTAB used somewhat different language to describe why the references rendered the invention obvious. On appeal to the Federal Circuit, the Given Imaging argued that the Board’s new reconception of the prior art formed a new ground of rejection not relied upon by the examiner. As a consequence, Given Imaging argued, it is therefore entitled to reopen prosecution or to request a rehearing. Here, the Federal Circuit appears to support the idea that if the PTAB had issued a new ground of rejection then the applicant would be entitled to a new hearing. See In re Stepan Co.,660 F.3d 1341 (Fed. Cir. 2011). However, in this case, the court found that no new ground of rejection was offered. Adler contends that the Board’s “facts and rationale for the affirmance (Hirata’s image processing and colorimetric analysis) changed the thrust of the Examiner’s rejection (Hirata’s classification of red color signs).” . . . . When the Board relies upon a new ground of rejection not relied upon by the examiner, the applicant is entitled to reopen prosecution or to request a rehearing. 37 C.F.R. § 41.50(b). This court has stated that “[t]he thrust of the Board’s rejection changes when . . . it finds facts not found by the examiner regarding the differences between the prior art and the claimed invention, and these facts are the principal evidence upon which the Board’s rejection was based.” In re Leithem, 661 F.3d 1316, 1320 (Fed. Cir. 2011). “‘[T]he ultimate criterion of whether a rejection is considered ‘new’ in a decision by the [B]oard is whether [applicants] have had fair opportunity to react to the thrust of the rejection.'” Id. (quoting In re Kronig, 539 F.2d 1300, 1302–03 (C.C.P.A. 1976) (modifications in original)). Here, Adler mischaracterizes the examiner’s grounds for rejection, and neither points to specific facts found by the Board but not by the examiner, nor illustrates how any such facts formed the basis of the Board’s rejection. . . . In the end, the court ruled that the Board’s decision did not include a new ground of rejection and affirmed the obviousness rejection. Appellants have been focusing more on the new-grounds-for-rejection argument because it is reviewed de novo on appeal unlike ordinary factual findings that require only substantial evidence. Drafting License Agreements: Agreement Unenforceable Post-Patent-Expiration Even When Contract Says Otherwise
July 18, 2013PatentDennis Crouch	By Dennis Crouch Kimble v. Marvel Enterprises Inc. (9th Circuit 2013) File Attachment: kimbleMarvel.pdf (341 KB) Kimble’s patent covers a pretty-cool web-shooting toy designed to mimic (in toy form) spider-man’s super powers. U.S. Patent No. 5,072,856. Following a typical David-and-Goliath pattern, Kimble approached Marvel about the idea. Marvel rejected the idea but then later began using the idea. The subsequent patent/contract lawsuit was settled back in 2001 with Marvel paying royalties to Kimble that eventually reached more than $6 million. The agreement covers both products that “infringe the patent … as well as sales of the Web Blaster product.” The agreement also includes a release of other potential causes of action. However, the agreement itself contains no expiry date. The patent is now expired, and the new dispute is about whether Marvel is required to continue to pay royalties. Kimble argues that it is still owed royalties under the agreement so long as the Web Blaster is sold. In particular, Kimble focuses on the language of the agreement; the fact that the settlement released Marvel from several non-patent causes of action; and the fact that Marvel has always maintained in court that the Web Blaster does not infringe the patent. Based on those factors, Kimble argues that the patent expiry is immaterial to Marvel’s ongoing obligation to pay the monies due. Marvel argues conversely that the case is controlled by Brulotte v. Thys Co., 379 U.S. 29 (1964). In Brulotte, the Supreme Court found a licensing agreement unenforceable because it required royalty payments beyond the expiration date of the underlying patent. Following Brulotte, the Ninth Circuit as well as several other circuit courts have held that a contract requiring royalty payments for an invention after a patent expires is unenforceable unless the contract provides a discount from rate collected while the patent was in force. See Zila, Inc. v. Tinnell, 502 F.3d 1014 (9th Cir.2007); Meehan v. PPG Indus., Inc., 802 F.2d 881 (7th Cir.1986); Boggild v. Kenner Prods., 776 F.2d 1315 (6th Cir.1985); Pitney Bowes, Inc. v. Mestre, 701 F.2d 1365 (11th Cir.1983); Aronson v. Quick Point Pencil Co., 440 U.S. 257 (1979). Here, the 9th Circuit again followed Brulotte, Aronson, and Zila, holding that a “so-called ‘hybrid’ licensing agreement encompassing inseparable patent and non-patent rights is unenforceable beyond the expiration date of the underlying patent, unless the agreement provides a discounted rate for the non-patent rights or some other clear indication that the royalty at issue was in no way subject to patent leverage.” The rule that follows, in relevant part, is that a license for inseparable patent and non-patent rights involving royalty payments that extends beyond a patent term is unenforceable for the post-expiration period unless the agreement provides a discount for the non-patent rights from the patent-protected rate. This is because—in the absence of a discount or other clear indication that the license was in no way subject to patent leverage—we presume that the post-expiration royalty payments are for the then-current patent use, which is an improper extension of the patent monopoly under Brulotte. The result here is nothing new, but should serve as an important reminder for anyone drafting a patent license agreement. Special care must be taken if the parties expect for royalties to extend beyond the life of the patent-rights in question. This case will likely see a petition for writ of certiorari.
July 10, 2013PatentJason Rantanen	RECENTLY #1. House Bill Would Exempt USPTO from Sequestration.
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Myriad Seeks to Enforce its BRCA1/BRCA2 Gene Patents
July 9, 2013PatentDennis Crouch	By Dennis Crouch Myriad Genetics v. Ambry Genetics (D. Utah 2013) In AMP v. Myriad, the Supreme Court ruled that the process of isolating naturally occurring DNA is insufficient to transform the natural phenomenon into a patentable invention. At the same time, the court ruled that a manmade cDNA version of naturally occurring human DNA is patent eligible. Within hours of that Supreme Court ruling, Ambry Genetics issued a press release indicating that the company would begin offering genetic testing for the BRCA1/BRCA2 mutations at a significantly reduced rate. Now, Myriad Genetics has filed suit against Ambry alleging infringement of ten different patents including the patents challenged in the original lawsuit. These include U.S. Patent Nos. 5,709,999; 5,747,282; 5,753,441; 5,837,492; 6,033,857; 5,654,155; 5,750,400; 6,051,379; 6,951,721; and 7,250,497. In the complaint, Myriad was careful to only assert claims that were left valid by the Supreme Court decision. Myriad writes: As of the morning of June 13, 2013, Plaintiffs collectively had 24 patents containing 520 claims concerning two genes (BRCA1 and BRCA2), and methods of use and synthetic compositions of matter related thereto. On June 13, the Supreme Court of the United States ruled that five patent claims covering isolated naturally occurring DNA were not patent-eligible, thereby reducing the overall patent estate to 24 patents and 515 patent claims. This case involves none of those five rejected claims. The lawsuit requests injunctive relief, damages for willful infringement and lost profits. In addition, Myriad filed a motion for preliminary injunction arguing that Ambry’s low prices create irreparable harm: Ambry is able to offer testing at [a] discounted price by unfairly and improperly “free-riding” off of the hundreds of millions of dollars invested by Myriad Genetics in developing the science and market for clinical diagnostic testing for hereditary cancers. … At a minimum, [the harm caused by ongoing infringement] consists of: (1) price erosion and the loss of the benefit of Myriad’s established pricing strategy; (2) the loss of market share; (3) reputational injury; and (4) loss of the benefit of the remaining limited term of patent exclusivity and Myriad’s business plans for that period, as well as the inability to fully obtain its reliance interest obtained by disclosing its discovery and investing hundreds of millions of dollars to commercialize that discovery in exchange for a limited exclusive right. The Federal Circuit has recognized each of these forms of damage as irreparable harm that warrant the imposition of injunctive relief. It appears that Myriad has a very strong case here. One question will be whether the district court will entertain arguments that the public’s need for access to multiple sources of cancer diagnostic tools weigh heavily against injunctive relief. The case has been assigned to one of the newest district court judges – Judge Robert Shelby. Judge Shelby is an Obama nominee who received his commission on September 25, 2012. Shelby’s court has become something of a dumping ground for IP cases. About half of the 83 open intellectual property cases in Utah in his docket. File Attachment: myriadcomplaint.pdf (70 KB)
File Attachment: myriadmotionforpreliminaryrelief.pdf (608 KB)
Circuit Judge Richard Linn
July 9, 2013PatentDennis Crouch	Great Video Honoring Judge Richard Linn. A few recent Section 101 cases at the PTAB
July 8, 2013PatentDennis Crouch	By Dennis Crouch Patenting Software: Ex Parte Betts [Computer Associates], 2013 WL 3327142, Appeal 2010-004256, Application 11/132,649 (PTAB 2013) (“[W]e conclude claims 14-26 encompass software without physical embodiment, i.e., software per se, which is an abstract idea and not a “process, machine, manufacture, or composition of matter,” as required by § 101.”) Patenting Software: Ex Parte Krause [HEWLETT-PACKARD], 2013 WL 3246398, Appeal 2010-012129, Application 10/442,401 (PTAB 2013) (Claims directed to an “end station” within a network having an “aggressive timer.” “Appellant contends that the Examiner erred in rejecting [the] claims … under 35 U.S.C §101 because the claims recite an “end station,” which is defined as hardware. Appellant’s argument does not cite evidence to rebut the Examiner’s interpretation that the claim encompasses either hardware or software. Accordingly, we decline to reverse the rejection.”) Patenting Software: Ex Parte Barsness [IBM], 2013 WL 3362954, Appeal 2010-011009, Application 11/316,285 (PTAB 2013) (Claim directed to “computer-executable instructions tangibly recorded on a computer-readable media” construed to include “non-statutory, transitory embodiments.” “[W]e find the Specification states the invention is capable of being distributed in the form of a wireless signal when exchanged from one signal-bearing medium to another. This falls within a propagating electromagnetic signal per se and thus, is not directed to one of the statutory categories.”) Patenting Software: Ex Parte Svendsen [Concert Tech], 2013 WL 3363110, Appeal 2011-001873, Application 11/837,876 (PTAB 2013) (Claimed media “control system” could be implemented as software. “As such, we are not persuaded by Appellants’ argument that the mere recitation of a “control system” (even if the Specification describes it as being associated with a memory) is sufficient to make the claims patent-eligible under 35 U.S.C. § 101 . . . as it does not play a significant part in the performance of the claimed steps.” In short, the broadest reasonable interpretation of the claim language leads us to construe the “control system” as being directed to a computer program per se, which, as drafted, renders the claimed subject matter not patentable under 35 U.S.C. § 101. See Gottschalk v. Benson, 409 U.S. 63, 72 (1972).” Patenting Method that Could be Performed by a Human: Ex Parte Xu [HEWLETT-PACKARD], 213 WL 3363011, Appeal 2010-009107, Application 10/767,075 (PTAB 2013) (“[C]laim 1 as a whole is directed to a sequence of steps that can be performed by a person. Accordingly, claim 1 is drawn to patent-ineligible subject matter and invalid under § 101.”) Patenting Device Attached to a Human is OK: Ex Parte Robert S. Bray, 2013 WL 3293616, Appeal 2011-013427, Application 11/686,054 (PTAB 2013) (“The claims recite a device positioned between two vertebrae not, for example, a human comprising a positioned device. The claims relate only to the correct placement of the device in the human patient, and as a whole, do not encompass a human organism. There is nothing in the statute, and we are unaware of any case, that categorically excludes such devices.”) Appealing to the PTAB: Expecting Delay
July 8, 2013PatentDennis Crouch	By Dennis Crouch The PTAB continues to work on its 26,000+ backlog of ex parte appeals pending at the USPTO. The Board has reduced the backlog in seven of the past twelve months. However at the present rate, the backlog will not drop below 5,000 for more than twenty years. As the chart shows below, the large backlog of appeals cases is a historically new phenomenon. The bread-and-butter of PTAB decisions involve questions of obviousness under 35 U.S.C. §103. In May 2013, for instance, about 94% of the ex parte PTAB decisions involved obviousness rejections. About 7% involved statutory-subject-matter (most of those also included obviousness rejections). As the PTO makes its push on claim-clarity, we can expect a growing number of appeals related to indefiniteness rejections. Posts navigation