Source: http://www.patentlyo.com/patent/2012/08/index.html
Timestamp: 2013-05-19 15:54:27
Document Index: 680389298

Matched Legal Cases: ['§ 282', '§ 1', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', '§ 101', '§ 101', 'art 2', '§ 1292', '§ 1292']

Akamai Tech. v. Limelight Networks (Fed. Cir. 2012) (En Banc)Mckesson Tech. v. Epic Systems (Fed. Cir. 2012) (En Banc) In a 6–5 en banc decision, the Federal Circuit has loosened the rules for proving liability under the doctrine of inducing infringement. In particular, the court here rejects the prior rule that inducement requires proof of a single actor directly infringing the patent. Rather, the court now holds that the underlying direct "infringement" of a process claim can still lead to inducement liability so long as all of the steps of the method were actually performed. "[I]t is no longer necessary to prove that all the steps were committed by a single entity."
Inducement is defined by 35 U.S.C. 271(b). That one sentence provision states in its entirety that "whoever actively induces infringement of a patent shall be liable as an infringer." Before this case, the Federal Circuit had repeatedly held that inducement requires both (1) the act of knowing inducement to infringe (with knowledge of the patent) and (2) actual direct infringement of the patent as defined by Section 271(a). The patentees in this case had a problem with this structure because the accused infringer had allegedly knowingly encouraged different parties to perform different steps of the patented method. Since direct infringement under 271(a) traditionally requires proof that a single-actor performed all of the claimed steps, the patentee was unable to satisfy the second prong of the inducement test. Now, under the new rule, inducement liability exists where the accused infringer (1) knew of the patent; (2) induced performance of the steps of the method; and (3) those steps were actually performed. It follows also that the accused infringer will also be liable if it performs some of the steps of the method and then actively induces performance of the other steps. In my view, this decision is important because it closes a major loophole that has allowed some entities to knowingly and intentionally take advantage of a patented invention while avoiding the need to take a license. The decision is important, but fairly narrow because inducement still requires that the accused infringer have knowingly induced the infringement — that is with knowledge that the steps it is encouraging are covered by the patent. The greatest fear of the case is that it might have created liability for parties who innocently performed one or more of the steps of the claimed invention. That fear has not been realized. Michael Barclay who assisted EFF with its brief noted as much in an e-mail this morning: It's not as bad as I thought when I saw that they overruled BMC v. Paymentech. The majority merely holds that an active inducer will be held liable so long as one or more parties are induced to practice all the steps of a claimed method. It appears that innocent actors who were "induced" by someone else will **not** be individually liable (unless, of course, they perform all the steps of the method claim themselves and thus are direct infringers). That was one point of EFF's amicus brief, so from that standpoint, the decision was not all bad. Our brief urged that innocent third parties (those with no level of intent) not be held strictly liable for direct infringement. It appears that is the law. Barclay has a good point here (in my view) and the decision does a fairly good job of balancing the competing themes of protecting patentees from intentional infringement and also protecting innocent parties who are only one cog in the machine. One issue going forward will be the scope of knowledge required for inducement and how the changes in willful infringement standards will impact inducement. Judge Newman's dissent raises a host of additional complications. In her view, the decision opens a can of worms that will continue to squirm for years to come. The majority opinion is limited to allegations of induced infringement under 35 U.S.C. 271(b) and the court expressly refuses in this case to decide the question joint direct infringement under 271(a). In my reading of the case, however, there are insufficient votes on the court to further expand the law of infringement to include joint direct infringement. The majority also limited its opinion to infringement of method claims. The majority opinion (36 pages) was filed PER CURIAM and signed by Chief Judge Rader and Judges Lourie, Bryson, Moore, Reyna, and Wallach. Judge Linn's dissent (29 pages) was joined by Judges Dyk, Prost, and O'Malley. Judge Newman separately dissented (38 pages). Moving forward, this case obviously adds value to method claims. It also adds value to "bigger" methods that achieve value through the interaction of multiple individuals in perhaps asynchronous fashion.
Judge Linn writes a powerful dissent: The majority opinion is rooted in its conception of what Congress ought to have done rather than what it did. It is also an abdication of this court's obligation to interpret Congressional policy rather than alter it. When this court convenes en banc, it frees itself of the obligation to follow its own prior precedential decisions. But it is beyond our power to rewrite Congress's laws. Similarly, we are obliged to follow the pronouncements of the Supreme Court concerning the proper interpretation of those acts.
The losing parties here will certainly take Judge Linn's words to the Supreme Court in search of a new pronouncement. Posted on Aug 31, 2012 at 10:58 AM | Permalink
Supplemental Examination: Although perhaps out of place on this list (b/c not a third party challenge), supplemental examination also becomes available on the 16th of September 2012. This process can cure inequitable conduct that committed during the original ex parte prosecution. Posted on Aug 30, 2012 at 08:04 PM | Permalink
Additional Rulings: The Federal Circuit also rejected each of DeAngelo's other arguments (claim construction, obviousness, noninfringement, and Rule 11 sanctions). On obviousness, the court disagreed with DeAngelo that Woods' amendment in response to an examiner rejection for anticipation qualifies as an admission that all limitations in the initial claims, existed in the prior art. "A patent applicant is not presumed to have conceded the presence in the prior art of every claim limitation he had no reason to dispute." Slip Op. at 25. The CAFC also agreed with the district court that MES and Woods had conducted an adequate pre-suit investigation, as required by FRCP 11(b). "Here, the record is replete with evidence supporting the district court’s conclusion that MES conducted a sufficient prefiling investigation including photographing and studying photographs of DeAngelo’s accused products," slip op. at 27. The court distinguished the inadequate investigation in Judin v. United States, 110 F.3d 780 (Fed. Cir. 1997), on the ground that MES also sought access to the products by making a direct request to DeAngelo (DeAngelo did not provide the requested information prior to the lawsuit). Posted on Aug 30, 2012 at 04:30 PM | Permalink
Posted on Aug 30, 2012 at 07:08 AM | Permalink
Guest Post by Eric Rogers. Eric is a recent graduate of Chicago Kent's JD program and also holds a PhD in molecular genetics. Eric has conducted an extensive analysis of inter partes patent reexaminations that will soon be published in the Santa Clara Computer & High Technology Law. I asked Eric to provide an overview of his results from the study. Read the full article here: http://ssrn.com/abstract=2121917. + + + + + The Inter Partes patent reexamination (IP reexam) playing field is tilted in favor of rejecting patent claims, as shown by comparing third party requestor appeals to patent owner appeals. On appeal, third party requestors are more likely to have a proposed ground of rejection affirmed and/or to add a new ground of rejection than patent owners are likely to have an adopted ground of rejection reversed. In addition, the vast majority of examiner rejections in IP reexams are upheld upon appeal. Of course, readers should be aware of selection bias in bringing an appeal.
The examiners' determinations were fully affirmed 76-78% of the time. This is slightly higher than the affirmed percentage for examiners in general, which over the same time period was around 61-76%. This suggests the CRU specialist examiners might be slightly less likely to be reversed by the BPAI. Appealing Party Differences Third party requestors tended to be more successful than patent owners at winning appeals. The reversal percentage observed differed from 14-27% for patent owners and 30-36% for third party requestors. Third party requestors' appeals received the most reversals at 30% to 33% while patent owner appeals received reversals in only 14% to 21% of their appeals. Similarly, third party requestors' appeals received the most reversals of grounds of rejection at 36% while patent owner appeals received reversals of grounds of rejection in only 22 to 27% of their appeals.
Posted on Aug 30, 2012 at 05:05 AM | Permalink
Posted on Aug 30, 2012 at 05:04 AM | Permalink
Its a bit crude and uses a few words that may offend patent attorneys, but its not often that we get Patent Law related music videos -- especially ones with a Kappos cameo: Posted on Aug 29, 2012 at 07:36 PM | Permalink
Apple v. Samsung: An Expert but Pro-Patent Jury? By Dennis Crouch
The Apple v. Samsung verdict has generated a significant amount of talk about the patent system. One set of comments focuses on the US System of lay juries and what this decision tells us about that approach for patent cases. As it turns out, the jury in the Apple case might be better classified as an expert jury. The reason for this shift is that the jury foreman - Velvin Hogan – is a patentee and current patent applicant. Hogan's granted patent covers a "method and apparatus for recording and storing video information." Now, Hogan is not simply an intelligent silicon-valley engineer who happens to be listed as a patentee. Rather, Hogen owns his patent and went through the six-year process of obtaining patent protection. I would suspect that Hogan understands patents and the patenting process at a level much deeper than 99% of the population – including most federal judges. Hogan was just one person on the nine-member jury, but I also suspect that his voice was the most influential as evidenced by his nomination as jury foreman. The fact that Hogan is knowledgeable about the patent system does not lead to any conclusion about whether he has any natural pro or anti patent bias. Someone knowledgeable about the system will know that the USPTO often conducts low quality prior art searches and incorrectly issues many patents that it should not. This knowledgeable person will also know that, despite their mistakes, the USPTO does conduct a substantial review of every patent claim before issuing a patent. This knowledgeable person will also understand that the precise language of patent claims mean that many similar products will not actually infringe. My friend, Sir Robin Jacob is exceedingly knowledgeable about the patent system, but sees a patent as little more than a license that is required before suing someone for infringement. In his view, validity and infringement are then to be proven in court. Here in the US, we tend to give more credence to issued patents, but that credence is limited. It turns out that Hogan is more than knowledgeable. He also has a vested interest in valuable patent rights and his patent experience (as far as I know) has focused primarily on using the patent system to protect his own inventions. This setup is one that could easily lead to some amount of pro-patentee feels. Although I'm very much still working on analyzing the data, my recent survey of about 900 self-designated patent law professionals give some credence to this idea. The survey asked readers to speculate on the percent of patents that the USPTO issues despite them having invalid claims. The survey also asked respondents to indicate whether they tend to spend more time thinking about their own (and their clients') inventions/patents or instead spend more time thinking about patents held by others. Results: Respondents who focus on patents held by their own clients were much more positive about PTO issued patents than their counterparts who focus on patents owned by others. In particular, when asked to speculate, the first group indicated that the percent of wrongly issued patents was significantly lower than did the second group. This result also correlates with the behavioral economics literature as an "ownership bias." Lots and lots of studies show that we tend to place more value on items that we own and less value on items that we don't own. Back to the Apple case: Despite the suggestion of potential bias, I don't think we can say that there was any bias in this case. In particular, since both Apple and Samsung were asserting patent right a truly pro-patentee ruling would have enforced the patents of both parties. What is interesting is that Mr. Hogan appears ready to talk about his experiences – that means that this case will be an excellent case study for trial lawyers going forward. Posted on Aug 29, 2012 at 10:19 AM | Permalink
Can a Third Party Challenge Section 101 Subject Matter Eligibility in the USPTO’s new Post-Grant Review Procedure? By Dennis Crouch
In 2013, the USPTO will open its doors to a new form of administrative patent challenge – the post-grant review. Starting on September 16 of this year, however, the USPTO will begin hearing a limited form of post-grant review proceedings directed to finance related business method patents as part of the Transitional Program for Covered Business Method Patents. The enabling statute (the AIA) provides for a broad scope of challenge – any reason that could serve as an invalidity defense under 35 U.S.C. § 282(b)(2) or (b)(3) (as re-formatted in the AIA). The AIA re-formatted Section 282(b)(2)-(3) is written as follows: 282(b) The following shall be defenses in any action involving the validity or infringement of a patent and shall be pleaded:. . . (2) Invalidity of the patent or any claim in suit on any ground specified in part II as a condition for patentability.
(A) any requirement of section 112, except that the failure to disclose the best mode shall not be a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable; or (B) any requirement of section 251.
In his post, Hricik focused solely on litigation issues. However, the scope of the new post grant review system also stems from Section 282 (as discussed above). Thus, if Professor Hricik is correct, then lack of subject matter eligibility (under Section 101) would also fail as a proper post-grant review challenge. Now, the USPTO disagrees with this analysis and has issued final rules indicating that Section 101 challenges will be permitted. Although these rules could be challenged (See Tafas v. Dudas) the AIA does not permit any appeal of the USPTO's decision or grant or deny a PGR request. The House Judiciary Committee report also suggests that it intended for the PGR proceeding to be open to Section 101 challenges as did statements of Senator Kyl. That said, the passage of the AIA is unlikely to be seen as expanding the scope of 282 – as such, current Congressional commentary on the meaning of the statute is unlikely to impact its meaning. Professor Mark Lemley suggested the potential that a 101 eligibility issues are essentially threshold jurisdictional questions – rather than Section 282 defenses. This fits with the thinking of some current Federal Circuit Judges (such as Judge Mayer and Dyk) who have no problem raising eligibility questions sua sponte on appeal. However, under this explanation, a Section 101 challenge would still be excluded from post-grant review precisely because it is not a Section 282 defense.
Posted on Aug 29, 2012 at 02:14 AM | Permalink
UNH Endowed Professor of Patent Law I spent a summer at the University of New Hampshire School of Law (at the time Franklin Pierce Law Center) before arriving at Mizzou law. It was a great experience. Concord feels rural but is only an hour from Boston and, because of the law school's long focus on patent law, the area is riddled with patent attorneys. But for my local family connections here in Missouri, I would have been very happy to stay on-board as a member of the patent law powerhouse.
Posted on Aug 28, 2012 at 05:58 PM | Permalink
The Center for Intellectual Property Research at Indiana University Maurer School of Law is sponsoring three conferences this fall on the state of patent law. At the first conference, coming up in just two weeks, I'll be speaking about inequitable conduct in the wake of Therasense v. Becton Dickinson and the way the new supplemental examination rules are likely to impact patent law. That conference features a panel discussion about what the AIA accomplished involving heavyweights in both academia (Mark Janis, John Duffy & Rochelle Dreyfuss) and industry (Mark Chandler, Gary Griswold, Doug Norman, and John Vaughn). Full details on each conference are available by following the links.
September 13-14:The America Invents Act: One Year Later Keynote Speakers: David Kappos, Director, USPTO Robert Armitage, General Counsel, Eli Lilly and Company September 24: The State of Patent Litigation: A Conversation with the Federal Circuit Keynote Speakers: Hon. Randall Rader, Chief Judge, U.S. Court of Appeals, Federal Circuit Hon. S. Jay Plager, Circuit Judge, U.S. Court of Appeals, Federal Circuit (In cooperation with the Federal Circuit Bar Association) November 2-3: The Future of Design Protection Law Mark D. Janis, Robert A. Lucas Chair of Law, IU Maurer School of Law Graeme Dinwoodie, Professor of Intellectual Property andInformation Technology Law, Oxford University (Held at Oxford University)
Posted on Aug 28, 2012 at 04:19 PM | Permalink
Suing the USPTO to Cancel Improperly Issued Patents by Dennis Crouch
In 2011, Cadence Pharma sued Exela Pharma in Northfor infringing its patents relating to injectable acetaminophen (OFIRMEV). Exela believes that one of the patents in question should never have issued because it was abandoned and then improperly revived. See U.S. Patent No. 6,992,218. As in the Aristocrat case, the patentee here failed to timely file a US national-stage application before the abandonment date of its PCT application. The USPTO allowed the patentee to subsequently file the national-stage application based on a pleading that it had been unintentionally abandoned. Exela argues here that the Patent Act only permits revival in this situation when the application was unavoidable abandoned – a much more difficult standard. Exela Pharma Sciences, LLC et al v. Kappos et al, 12-cv-0469 (E.D. Va. 2012). Seeing no defense available in the infringement action, Exela filed its own lawsuit against the USPTO to force the agency to rescind the revival decision. The lawsuit was filed under the Administrative Procedures Act (APA). As a general matter, there is a presumption that the APA provides a federal cause of action to individuals adversely affected by a federal agency action. Here, the court found no statute barring the lawsuit and noted that this type of lawsuit is currently the only way that an adversely affected party can take action on this issue (because it is excluded as a defense). In his first written decision in the case, District Court Judge Liam O'Grady has rejected the USPTO's motion to dismiss — holding that: (1) the case is not time-barred because it did not become ripe until the 2011 lawsuit; (2) Exela has standing to sue the USPTO because the allegedly improper patent grant is “a substantial factor” that motivated the harm Exela is feeling now; and (3) the APA presumption of judicial reviewability of the USPTO's action has not been overcome. The USPTO had argued that some of its decisions should simply not be challengeable. The court entirely rejected that position. “The Court finds no support for the PTO's apparent proposition that certain agency actions should remain entirely unchecked.” In the end, the court rejected the USPTO's motion to dismiss. Because the district court case is ongoing, the USPTO has no right to immediately appeal. However, the executive agency may seek a writ of mandamus from the Court of Appeals for the Federal Circuit — asking that court to end this case at an early stage. In the Myriad case, the district court held that the plaintiffs could sue the USPTO for improperly issuing the gene patents. (Myriad and the University of Utah were also sued). However, those claims were based on an allegation of constitutional violations rather than merely capricious actions as here. The district court subsequently dismissed the claims against the USPTO (without prejudice) based upon the doctrine of constitutional avoidance.
The US already has a fairly complex system for challenging patents. Accused infringers can challenge validity and enforceability under Section 282 in both federal courts and the International Trade Commission (USITC). Third parties can request reexamination at the USPTO. Soon, third parties will also be able to participate in post-grant review trials at the USPTO. Although the new post grant review system will have a substantially expanded scope as compared with reexamination practice, it will not offer the opportunity to challenge improperly revived patents. Noted attorney Ed Polk is leading Exela's litigation team. The USPTO's position is being represented by AUSA Stephen Obermeier.
Posted on Aug 28, 2012 at 01:13 PM | Permalink
While in UK this summer, UK patent attorney Jim Boff and I had an interesting discussion regarding the special treatment of US Universities in the America Invents Act (AIA) constitute a violation of the international agreement on Trade-Related Aspects of Intellectual Property (TRIPS). In the mid 1990's the US successfully pushed TRIPS as a required element of membership in the World Trade Organization (WTO). As such the vast majority of countries around the world are member nations. TRIPS sets down certain minimum standards for national intellectual property systems and also incorporates the national treatment requirements exemplified in the Paris Convention of 1883. TRIPS also includes a dispute resolution system allowing member nations to take action against a fellow members that is violating the agreement. The typical penalty is a trade-restriction such as a quota or tariff applied against goods from the guilty country. National Treatment: non-US inventors are allowed to obtain and enforce US patents. In fact, most US patent applications come from foreign applicants. At least in the short-run, US consumers (voters) may well enjoy the potential lower prices associated with having those patents wholly rejected. However, the US has long agreed to allow foreign-owned patents as part of a quid-pro-quo that guarantees that US-owned inventions can be patented in nations around the word. The "national treatment" system worked out in the 1883 Paris Convention and continued in TRIPS essentially requires that each member-nation treat patent applicants from other member-nations at least as well as it treats its own citizens. On two particular points, the America Invents Act provides benefits to US Universities that are not provided to foreign applicants. Not Subject to Prior User Rights: AIA-patents are subject to a prior commercial user defense that – as its name suggests – allows a prior commercial user of an invention to avoid infringement liability even if that prior commercial user cannot identify any prior art that sufficient to invalidate the patent. This is a defense to infringement and thus weakens the power of an individual patent. The AIA has a special provision for US universities stating that the defense does not apply to patents covering inventions that were owned by the US university (or subject to contractual obligation to assign to the university) at the time of the invention. The provision defines universities by reference to the US Higher Education Act of 1965 (20 U.S.C. 1001(a)). That provision includes only universities located within the United States. 75% reduction in Fees: The AIA also includes a micro-entity provision that allows qualified applicants to receive a 75% reduction in most patent office fees. US universities qualify for the fee reduction while foreign universities do not. (Foreign individuals (natural persons) can qualify for micro-entity status if they meet the requirements.)
It is pretty clear that these are two benefits given to US universities that are not enjoyed by their counterparts in other countries. Now, the fee reduction could still pass muster – especially if seen as a subsidy rather than merely a fee discount. See National Federation of Independent Business v. Sebelius, 567 U.S. ___ (2012) (a fine is a tax). The greater problem stems from the prior user right that is clearly a legal benefit given to a particular US group and not extended to foreign applicants. Resolving the Problem: Although the US as a country is bound by the TRIPS agreement, US courts do not treat the agreement as controlling. Thus, violations of TRIPS cannot normally be addressed by filing a lawsuit in US court. Rather, the resolution is conducted at the national level through the rather ineffective WTO dispute resolution procedures and other diplomatic channels.
Posted on Aug 28, 2012 at 05:57 AM | Permalink
In concluding that an oral communication was sufficient, the CAFC issued several notable holdings. First, it extended the holding in Scott v. Koyama, 281 F.3d 1243 (Fed. Cir. 2001), that interpreted a previous version of 102(g) to allow the inventor of an invention of foreign origin to "rely on the date that the invention was disclosed in the United States as a conception date for priority purposes" to apply to the current version of 102(g)(2). Second, the CAFC held that an oral communication could be a sufficient disclosure for 102(g) purposes. "While this court’s limited precedent on this issue establishes that writings can satisfy the full domestic disclosure requirement, the cases do not establish any per se requirement that such disclosure must be in writing." Slip Op. at 12. However, the "content of the domestic disclosure must be specific enough to encompass the "complete and operative invention...and an inventor's oral testimony to this extent is a question of proof." Slip Op. at 13 (emphasis in original). Thus, corroboration of the testimony is necessary. The CAFC did not reach the issue of corroboration of the specificity of the disclosure, instead rejecting the accused infringer's argument based on the burden of persuasion and evidence necessary to invalidate an issued patent. The accused infringer could only show a range of dates of possible U.S. disclosure that overlapped with the patent holder's possible conception dates. "Such a showing, at best, establishes that the ASAT inventor might have conceived of the invention first. Evidence establishing that there might have been a prior conception is not sufficient to meet the clear and convincing burden needed to invalidate a patent." Slip Op. at 16 (emphasis in original).
Posted on Aug 27, 2012 at 05:06 PM | Permalink
Posted on Aug 27, 2012 at 04:32 PM | Permalink
Constitutional Challenge to the First-to-Invent Rule By Dennis Crouch [Update – Read the Complaint Here]
MadStad & Mark Stadnyk v. USPTO, 12-cv-1589 (M.D. Florida 2012) The small motorcycle engineering company MadStad recently filed suit against the US Government asking a federal court to reject the Leahy-Smith America Invents Act of 2011 (AIA) as an unconstitutional degradation of inventor rights. Steve Lohr (NYTimes) covers several aspects of the story and includes quotes from both Professor Mark Lemley and Professor Arti Rai that identify the challenge as Quixotic. I agree with Lemley and Rai on this point – especially after the Supreme Court's Golan decision last year. Of course, I also thought that Myriad case would go nowhere. Stadnyk's basic argument is that when the US Constitution speaks of exclusive rights for "inventors" it should be interpreted to mean "first and true inventor." The AIA fails because it purposefully rewards the first-to-file a patent application rather than the first-to-invent. The complaint argues: A second 'inventor' is an oxymoron; that person merely rediscovers that which was already discovered by the first inventor. Thomas Jefferson, James Madison, and John Marshall all shared this understanding. . . . Congress is not authorized to award patents to the winners of races to file to the PTO. . . . Under the AIA, there is no effective statutory requirement that the applicant be an 'inventor' for a patent to be valid. MadStat has also requested a preliminary injunction blocking implementation of the first-to-file provisions of the Act. In his recent law review article, Senate Counsel Joe Matal played down the merits of the Constitutional question. Joe Matal, A Guide to the Legislative History of the America Invents Act: Part I of II, 21 Fed. Circuit B.J. 435 (2011). In his article, Matal points to the 1850 case of Gayler v. Wilder. Gayler is interesting because the Supreme Court created a subjective test for the requirement of inventorship – asking whether the patentee believed himself to be the original inventor. In that case, the actual first inventor had failed to pursue patent rights and the Supreme Court agreed that the second inventor (who originally believed himself to be the first inventor) was then properly awarded rights. Posted on Aug 27, 2012 at 02:24 PM | Permalink
I forget when I first thought about this, but it's been a while. With all the discussion of Prometheus (sadly, the case, not the film, which was great), I figured this was a good time to raise it. At minimum, there's a litigable question here, and assumptions that a patent issued on non-patentable subject matter is invalid need examination. I'd love to be wrong about this, but I don't think I am. Some History.
I have not scorched the earth, but from what I can tell no court has squarely addressed the question of whether the Patent Act allows a court to deny enforcement (on any ground) of a patent granted on subject matter that is not within Section 101. Instead, what the cases showed me was that law developed in the context of challenges to the USPTO's denial of a patent have been used to invalidate issued patents – without analyzing the statutory authority to do so.
Let's take a look at what most people assume is the law and see if we can get there: does the Patent Act allow a court to invalidate a patent that does not claim patentable subject matter?
Federico's commentary, often relied on to indicate Congressional intent, doesn't help at all, but here it is:
Section 101 is relied upon as the basis for invalidating patents. It states: "Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title."
While clearly granting power to the USPTO to issue patents on "new and useful" processes, it obviously also limits the USPTO's power to do so. The question here is not patentability, but validity. Simply, suppose the USPTO makes a mistake, and issues a patent on non-patentable subject matter. Is this a defense to infringement?
In my view, the answer is "no."
Let's start with the two specific subsections, because they make us focus on the text and show some very deliberate choices by Congress that easily could have gone the other way had Congress intended 101 to be a defense.
The second subsection of 282 is probably the most important: "Invalidity of the patent or any claim in suit on any ground specified in part II of this title as a condition for patentability." Section 102 and 103 are "conditions of patentability." They say so in their titles, and they are substantive legal conditions (technically, I'd call them "conditions of unpatentability" given the burdens of proof, but this works). The fact that 101 is not a condition of patentability is to me is very important: Congress chose in 282(2) to specify that only those things denominated as "conditions of patentability" are bases for invalidity. It then chose to label 102 and 103 as conditions, but not 101. Those are deliberate choices. In my view, a patent issued on non-patentable subject matter is not "invalid" under the second provision.
Subsection 3 of Section 282 is easy to apply to this question, but it is important because it also adds to the evidence that 101 is not a defense. Patentable subject matter is in 101, not 251 or 112. So that part's easy: 282(3) doesn't list 101. But the important point, again, is that Congress deliberately thought about what should be invalidity defenses, and what should not, and left out 101 not just as a "condition of patentability," but also in this specific paragraph, where it "caught" some strays. It left out 101. That says a lot.
Now we're left with arguing that, although it thought about what should be invalidity defenses in two different places, nonetheless we should imply that Congress meant to include it in some amorphous language in the other two subsections. We're fighting uphill.
Let's go to the first catch-all type subsection: "Noninfringement, absence of liability for infringement, or unenforceability." Logically, I can't make patentable subject matter fit, at all. Before explaining why, let's be clear on the consequences of saying that Section 101 is within this section: it would be that the patent is valid but there would be no infringement.
"Unenforceability" is the easy one. The cases and legislative history I've read show this was designed to capture equitable doctrines like patent misuse and, arguably, inequitable conduct (long diversionary story there). We'd be straining to put 101 there.
Federico's statements that the defendant hadn't made the product, or had a license to do so, show that "infringement" means what we think it means. A licensed patent is valid, but "not infringed." A patent that the defendant never violated is valid, but not infringed. So, I can't make "noninfringement" logically work or work without giving words a very unnatural meaning.
Now the only arguable catch-all, subsection 4: "Any other fact or act made a defense by this title." Here we are, trying to read it into the catch-all that, even Federico says, "merely" specifies things in the statute that are made defenses. But, section 101 is not made a defense by this title. Instead, it specifically points to other requirements and conditions. Again, if this were easy and clear, Congress would have put in 101 "it shall be a defense to patent infringement that…" or put 101 in Section 282. So, tell me why I am wrong.
Let me get rid of some easy ones: no court I've found has ever addressed this issue. I think it's pretty simple, but there you go. Second, don't conflate patentability with infringement defenses. There are lots of things that can affect patentability that aren't in 282. Third, 282 is exclusive: if you want so suggest that it's not, you (a) have to say "Congress enacted a specific statute laying out defenses, but it's just a guide" which is not in my view defensible; and (b) it says "shall be defenses," not "may include" or some-such. Third, this is a relatively new "defense." I can't say I've scorched the earth, but in looking at CAFC cases it has only been raised a few times.
Posted on Aug 27, 2012 at 09:31 AM | Permalink
Patently-O Bits and Bytes by Dennis Crouch Apple v. Samsung
There are many interesting discussions regarding Apple's $1b patent verdict against Samsung. My former professor Randy Picker (UChicago) writes that this is exactly what patents are good for — “vindicating the market power that the patent system makes available to successful inventions.”
Today's NYTimes notes that the verdict punishing copying may spur innovation by “give[ing Apple's] rivals a kick in the pants to create more original products.”
India: SpicyIP writes that Thompson/Westlaw has been ordered by an Indian to stop distributing copies of Indian Supreme Court Cases that it allegedly copied from the Eastern Book Company reporter. Internet Safe Harbor: The EFF (with Craig Newmark) have created an interesting infographic of the importance of Section 230 of the Communications Decency Act. That provision offers a broad safe harbor to internet service providers (including website distributors) against liability created by third-party activity (such as blog comments). Facebook would not exist without this provision (or something similar).
Posted on Aug 27, 2012 at 08:59 AM | Permalink
Posted on Aug 26, 2012 at 04:41 PM | Permalink
On his blog, Mike Kondoudis highlights an important point regarding fees. Once an applicant properly establishes small entity status the small entity fees can continue to be paid until the issue fee is due (even if actual status changes). 37 CFR § 1.27(g)(1). However, in the proposed micro-entity rules, the USPTO has proposed that the micro entity status must be repeatedly established throughout prosecution (except for University applicants). In its response to the proposed rules, the AIPLA argues that this process makes the micro-entity status overly confusing and burdensome. "AIPLA's overall recommendation is to simplify the procedures created by the rules."
In a major giveaway to universities, the America Invents Act includes a provision that allows US Universities to take advantage of the 75% reduction in fees offered by the micro entity status. Independent inventor and author Raoul Drapeau wrote to the PTO with the following response: [This] is another sad example of how large organizations have influenced rulemaking to suit their own ends, to the disadvantage of small inventors. How could an institution of higher learning under any interpretation be considered a small - much less a micro-entity." An ongoing question regarding the micro-entity fees is whether university IP holding companies (such as WARF) and university-esque entities (such as Scripps) will receive the reduction in fee status. Major Loophole: In an e-mail to the USPTO, well known patent attorney Rick Neifeld highlighted a major potential loophole in the statute that would allow virtually any patent applicant to take advantage of the micro entity status by licensing the invention to a US university. The issue stems from the language of newly added 35 U.S.C. 123(d)(2) that allows patent applicants to qualify for micro-entity fees if the subject applicant is licensed to (or under obligation to license to) a US university. The statute: (d) INSTITUTIONS OF HIGHER EDUCATION.--For purposes of this section, a micro entity shall include an applicant who certifies that—
… (2) the applicant has assigned, granted, conveyed, or is under an obligation by contract or law, to assign, grant, or convey, a license or other ownership interest in the particular applications to such an institution of higher education [as defined in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a))].
Since US universities are – for the most part – non-practicing entities, granting a limited license to a university would have little negative impact and would open the possibility of qualifying for a 75% fee reduction. In its proposed rules, the USPTO has offered to close the loophole with a requirement that anyone claiming micro-entity status must also qualify for small entity status. In most situations, the USPTO would not have the authority to make such a dramatic change in the law. However, the new Section 123(e) gives the USPTO Director authority "in the Director's discretion, [to] impose income limits, annual filing limits, or other limits on who may qualify as a micro entity pursuant to this section." Of course, it is quite possible that the USPTO's broad limit set here actually surpasses its discretion. In that case, the rule would be struck-down as in Tafas v. Dudas. Neifeld suggests a more narrow rule that would block micro-entity claims in cases where the university-license was created in order to take advantage of the micro-entity status. Posted on Aug 26, 2012 at 03:31 PM | Permalink
Guest Post: Federal Circuit Continues Split on Scope of 271(e)(1) The following is a reprint from the Orange Book Blog and was written by my former office-mate Aaron Barkoff. Aaron is an IP litigator at McAndrews in Chicago – Dennis Crouch
Posted on Aug 25, 2012 at 02:11 PM | Permalink
Apple v. Samsung (N.D.Cal 2012)
The jury must have read my recent post on Monsanto's $1b verdict and wanted to do one better – awarding Apple $1.05 billion in patent infringement damages.
Apple has won its patent case against Samsung and the nine-member jury has awarded $1.05 billion to the iManufacturer. The jury has also rejected Samsung's countersuit – finding the Samsung patents not-infringed. Samsung's infringement is identified as "willful" – opening the door to potential punitive damages against Samsung. In patent cases, the judge (here, Judge Koh) is given the responsibility of determining whether to award punitive damages based upon a set of factors outlined in the law. In this case, the statute would limit potential patent damages to three-times the damages calculated by the jury. (The trade dress damages are not so limited). Apple has also asked for an injunction to stop Samsung's ongoing infringement. However, US patent law places the decision on injunctive relief in the hands of the district court judge. The briefing on injunctive relief will take several weeks and Judge Koh has announced a September 20 hearing date. Judges have discretion to grant/deny injunctive relief based upon the four "eBay factors" defined by the US Supreme Court in 2006. When granting injunctive relief, the judge also has discretion to shape the relief as she sees fit. Some courts have issued broad injunctions that essentially say "stop infringing the patent" others issue much more narrow orders directed only toward the particular products that are adjudged to infringe. The reality is that Samsung has been planning for the likelihood of injunctive relief and is surely ready to stop selling any of the infringing products and replace those products with ones that at least have not yet been adjudged as infringing. Apple has another lawsuit pending against Samsung focusing on Samsung's newer handheld devices. If an injunction is issued, a big question is whether relief will be stayed pending appeal. An adjudged infringer generally has no right to continue infringing while the case is on appeal. However, courts will stay injunctive relief when the stay prevents great potential harm and/or the appellant has a strong case on appeal. Under the Federal Rules of Civil Procedure, Apple will NOT receive the $1 billion damages until after the appeal is complete. However, Samsung would be required to post a "supersedeas bond" that may be to be set by the court, but will certainly be several hundred million dollars. During the appeal or any other delay in payment, the damages will collect interest. Next Steps: Samsung has two basic shots at overturning the jury verdict. First, the company can file a motion for judgment against the verdict (JNOV) arguing that the jury verdict goes against the weight of the evidence. Although I do not have specific numbers, it is not uncommon for judges to at least partially reject a jury verdict in complex cases such as this. Based upon what I have read of the case, I believe that Judge Koh is unlikely to alter the jury verdict. Anyone researching this point should consider Judge Koh's history of JNOV motions. If Samsung's pleas to the court fail, the company can appeal to the Court of Appeals for the Federal Circuit. In that appeal, the odds are also with Apple. On this note, Samsung has announced that it will follow my strategy outlined above. In a press release, the company wrote "This is not the final word in this case or in battles being waged in courts and tribunals around the world, some of which have already rejected many of Apple's claims."
Posted on Aug 24, 2012 at 09:12 PM | Permalink
Professor TJ Chiang is blogging on PrawfsBlawg. Topics include: Mossoff's Trespass Fallacy; The Supreme Court's NEW patent law textualism; and The Paradox of Patents.
As we await the verdict, read the 20-page jury form for Apple v. Samsung: [Link]. In the end, the jury is deciding infringement of one-claim from each of three different utility patents; four different design patents; a claim to both registered and unregistered trade dress; breach of contract and monopolization. Samsung's countersuit includes five utility patents.
I'll be speaking at the IPO annual meeting on Sept 10 in San Antonio along with my former boss Paul Berghoff – see you there. Posted on Aug 24, 2012 at 11:02 AM | Permalink
Much of this opinion deals with relatively typical appeal issues of infringement, anticipation, and damages. Two issues are worth highlighting, however. Prove Every Claim Element: During the district court proceedings, CPi had focused its anticipation case on claim 10 of Patent No. 6,981,007, and the Federal Circuit agreed that claim 10 was indeed anticipated. However, the CAFC also concluded that CPi had failed to present detailed evidence explaining how each claim element of the remaining claims was discussed in the prior art, and thus affirmed the jury verdict of no anticipation as to those claims. The moral of this story? In the absence of a stipulation that the validity of all the claims will rise and fall on a representative claim, patent challengers should make sure to present detailed evidence on every element of every claim they are challenging when advancing one claim as a
representative claim. Here, CPi had presented cursory evidence, at best, asking its expert only "are all the elements of those claims disclosed in the Schrader patent?” to which its expert replied “Yes, they are.”
Edit: The post should have read "present detailed evidence," not "prevent detailed evidence." Patent challengers certainly don't want to prevent evidence of patent invalidity! - Jason
Posted on Aug 23, 2012 at 11:32 AM | Permalink
This guest post is by Angelos Dimopoulos, Assistant Professor at Tilburg Law School and Petroula Vantsiouri, Doctoral Candidate at the University of Cambridge, Faculty of Law. I invited the pair to write this post to help explain how the new pan-European patent court might fit within the current EU structure (that already includes the EU Court of Justice. - DC
+ + + + + Any practitioner who has been involved in patent litigation in the European Union (EU) is well aware of the inconsistencies in the Member States patent law and the differences among national litigation systems. Disturbingly often the same case is litigated in several jurisdictions, under different procedural and evidentiary rules with uncertain timing of outcomes. In that respect, it comes as no surprise that the recent initiatives regarding the creation of a European patent with unitary effect (EPUE) and a 'Unified Patent Court' (UPC) are currently the hottest IP topics in Europe. In short, the EU intends to introduce a EU-law based patent right that will be valid throughout the territory of 25 of the 27 EU Member States (Italy and Spain remaining outside) and a single patent court at the European level with exclusive jurisdiction as regards infringement and revocation proceedings, covering the same territory.
The UK government and a number of patent holders are lobbying for limiting the role that the Court of Justice (CJEU), the highest court in the EU in matters of EU law, will play in patent litigation in Europe. In our view this is simply wrong. In our recent paper called "Of TRIPS and traps: The interpretative jurisdiction of Court of Justice of the EU over patent law", we provide two main arguments in support of this claim. First, we argue that regardless of the final wording or the adoption of the proposed EU legislation, the Court of Justice can acquire a stronger role in the application of patent law by using its interpretative jurisdiction over the patent provisions of the TRIPS Agreement. Secondly, we argue that this role is a significant tool in the process of establishing a complete and uniform framework for patent protection in the EU. So far the CJEU has been hesitant to apply and interpret the TRIPS patent provisions. In a series of cases concerning the TRIPS Agreement, as they were crystallised in Merck Genericos, the CJEU clarified that the interpretation of the substantive patent provisions of the TRIPS Agreement lie outside its jurisdiction. This means that up to now Member States can decide according to their national laws how to interpret the TRIPS provisions on patents. However, after the entry into force of the Lisbon Treaty (which amended the constitutional charter of the EU in 2009) Merck Genericos is no longer good law. Article 207 of the Treaty on the Functioning of the European Union (TFEU) vests the EU with exclusive competence over commercial aspects of IP and brings the TRIPS agreement within the scope of EU law. In that respect, the CJEU has now acquired significant powers to determine whether national (and in the future Union) patent rules are interpreted consistently with the TRIPS agreement. This has significant implications for the development of patent rules in the EU. Currently, patent law in the EU is characterized by a lack of harmonization, although there are some uniform rules. All 27 Member States have acceded to the European Patent Convention (EPC), which established the European Patent Organisation (EPO) and a system of law for granting patents for inventions. Thus, national laws of EU Member States are de facto harmonized in the field of patentability and validity but only as regards the grant of patents. Issues of validity and infringement after the patent grant are matters for national law and national courts. But even in the fields covered by the EPC, uniformity is not always present. In many instances the EPO and national authorities interpret the EPC in diverging ways. Many national authorities do not take each other's case law into consideration, and even if they do, differences in legal traditions, policy choices or practicalities can lead to different outcomes. The proposed EU patent with unitary effect and the proposed Unified Patent Court cannot change all that. The proposed legislation does not guarantee the establishment of truly uniform rules. As the proposals now stand, substantive issues (prior user rights, assignments, voluntary and compulsory licensees and government use) are left outside the scope of the proposed Unitary Patent Protection. Moreover, if adopted, the proposals will lead to four different types of patents within the EU. Finally, with Spain and Italy not participating in these projects, the EU will be partitioned in three territories. So, how can the Court of Justice fix that? First, although the TRIPS agreement is very broad as regards the subject matter of patent protection, it contains specific rules on prior users' rights and exceptions, including in particular compulsory licenses, which are subject matters left outside the scope of the proposed regulation. Article 1 TRIPS requires that WTO members "give effect" to its provisions, which signifies that a WTO member should take all reasonable measures to ensure consistency between domestic law and the agreement. So, the CJEU can use its interpretative jurisdiction to establish common minimum rules with regard to the subject matters that could be left outside the scope of harmonization.
Secondly, the Court's interpretative jurisdiction can result in the establishment of minimum, uniform standards of protection for the different types of patents. In its previous caselaw (Hermes and Dior) the Court held that "where a provision can apply both to situations falling within the scope of national law and to situations falling within the scope of [Union] law, it is clearly in the [Union] interest that, in order to forestall future differences of interpretation, that provision should be interpreted uniformly, whatever the circumstances in which it is to apply." Considering that the regulation on European Patents with Unitary Effect will be part of Union law, the Court of Justice can employ the TRIPS agreement in order to determine the standards of protection under national and EPO-granted patents by reference to the standards of protection of European Patents with Unitary Effect, so as to ensure uniform implementation of the TRIPS agreement in the EU. Thirdly, the interpretative jurisdiction of the Court can mitigate the danger that arises from the existence of parallel adjudication regimes for patent protection. By allowing the CJEU to determine whether national courts abide by the TRIPS when they adjudicate patent infringement cases, the CJEU can act as the single, ultimate judicial authority in the EU, ensuring coherence and consistency in the interpretation of the different regimes of patent infringement rules. In short, although it cannot contribute to the reduction of litigation costs, at least initially, the CJEU's interpretative jurisdiction over TRIPS provisions can promote legal certainty, and the establishment of uniform and comprehensive patent protection in the EU that would be attractive to the industry and conducive to technological progress. Nevertheless, the power to interpret the TRIPS is not a panacea. It does not result in the establishment of uniform substantive rules, as the TRIPS is a minimum standards agreement, while its success depends on the number and subject matter of the actual cases that will reach its jurisdiction under the preliminary reference procedure.
Posted on Aug 23, 2012 at 11:10 AM | Permalink
Guest Post by David L. Schwartz, Associate Professor at Chicago-Kent College of Law and Jay P. Kesan, Professor and H. Ross & Helen Workman Research Scholar, University of Illinois College of Law Understanding the role of non-practicing entities (or "NPEs" for short) in patent litigation is important. For one reason, patent litigators appear to be polarizing into a plaintiffs' bar and a defense bar. This polarization in lawyers is new to patent litigation, but has existed for many years in other areas of the law, such as medical malpractice, products liability, and labor law. In addition to the lawyers, certain industries have experienced more infringement allegations by NPEs, which have created rifts in many debates about patent reform. The topic of NPEs in patent litigation – their costs and benefits – has been featured prominently in the press, including extensive coverage of a study reporting that the "direct cost" of NPEs was $29 billion in 2011. We recently wrote a short paper called Analyzing the Role of Non-Practicing Entities in the Patent System, which attempts to set forth a coherent way to conceptualize NPEs. Before we can meaningfully study or even discuss NPEs, it is important to precisely define what is an NPE. Unfortunately, there is very little agreement on this point. Technically, individual inventors and universities are non-practicing entities. However, they appear very different from each other, and they are also different from start-up companies that have unsuccessfully attempted to commercialize their patented technologies. In addition, the term NPE is often used to refer to both small patent holding companies and large patent aggregators who purchase portfolios of patents from inventors and others for the primary purpose of enforcement. Any credible study of NPEs should distinguish among these different constituents and report empirical information separately. Beyond the definitional issue, numerous arguments have been offered about the positive and negative aspects of the rise of NPEs in patent litigation. We discuss below several of these arguments, and what the existing empirical evidence suggests.
Posted on Aug 21, 2012 at 03:04 AM | Permalink
For many years, Carl Oppedahl has been a leader in helping the patent world understand how to make the most of the USPTO's electronic filing systems. This fall, Oppedahl has two eSeminars.
Posted on Aug 19, 2012 at 04:32 PM | Permalink
Libertarian writer and patent attorney Stephen Kinsella has written a critique of Prof. Mossoff's Trespass Fallacy paper. LINK. Libertarian thought on intellectual property is somewhat unsettled. Kinsella is one of the thought leaders of the modern anti-patent libertarians while Mossoff represents the pro-patent side.
One of Kinsella's basic arguments stems from the traditional libertarian support for individual liberties and strong private property rights. When some third party holds a patent, that patent limits what I can do with my scarce private property as well as my individual freedoms. Posted on Aug 19, 2012 at 04:24 PM | Permalink
By Dennis Crouch Association for Molecular Pathology (AMP) and ACLU v. USPTO and Myriad Genetics (Fed. Cir. 2012)
Reversed: Myriad's method claim to screening potential cancer therapeutics via in vitro changes is subject matter eligible.
Although it may well be comparatively difficult to isolate DNA, at the time of the invention (and even more so today) the process of isolating human DNA was well known and (once the gene sequence was known) was not something difficult for one skilled in this art. I personally isolated selected portions of DNA (non-human) back in 1992 (before the priority date) as part of the introductory biology course that I took in college. It was easy. The majority's analysis here essentially rejects any notion that the Mayo court
would find an invention consisting of a combination of old-technology + newly-discovered-product-of-nature to be subject matter ineligible.
The core of the majority argument regarding the isolated DNA claims is that the process of removing the DNA from the human body necessarily transforms those molecules into something new and different. As Locke might say, the mixture of the naturally occurring DNA with human ingenuity and labor resulted in a new arrangement of matter heretofore never seen. The Judge Lourie writes:
The isolated DNA molecules before us are not found in nature. They are obtained in the laboratory and are man-made, the product of human ingenuity. While they are prepared from products of nature, so is every other composition of matter. All new chemical or biological molecules, whether made by synthesis or decomposition, are made from natural materials. For example, virtually every medicine utilized by today's medical practitioners, and every manufactured plastic product, is either synthesized from natural materials (most often petroleum fractions) or derived from natural plant materials. But, as such, they are different from natural materials, even if they are ultimately derived from them. The same is true of isolated DNA molecules. . . .
While purified natural products thus may or may not qualify for patent under § 101, the isolated DNAs of the present patents constitute an a fortiori situation, where they are not only purified; they are different from the natural products in "name, character, and use." (quoting Chakrabarty).
To be clear, the change in the molecule that the court is discussing is that the isolated DNA molecule is cleaved from the larger chromosomal DNA molecule by enzymatically cutting it off at each end and slightly altering the terminal amino acid groups. In a concurring opinion, Judge Moore agreed that the isolated DNA is patent eligible, but rejected the notion that the chemical difference between the in situ gene (part of the chromosome) and the isolated gene is sufficient to justify the conclusion. Rather, Judge Moore identified the altered chemical along with the new and beneficial utility achieved because of the isolation as dual keys to patent eligibility. (Note – for further study – Lourie's dicta that isolation for new purpose is insufficient).
The point of this rehearing was to consider the impact of Mayo on this case. As suggested by the above paragraph, the Judge Lourie's answer here is basically that Mayo has no impact here. Of importance, the court indicated that the holding in Mayo should be limited to method claims and thus cannot be applicable to Myriad's DNA composition claims.
The principal claims of the patents before us on remand relate to isolated DNA molecules. Mayo does not control the question of patent-eligibility of such claims.
This cabining of Mayo will be the key to any petition for a writ of certiorari. To be fair, when considering the Supreme Court's analysis in Mayo v. Prometheus, the CAFC found that precedent applicable to analysis of the method claims. Of course, the CAFC had already held those method claims ineligible even before Mayo (in its prior decision). Interestingly, even though in dissent, Judge Bryson agreed that the "Supreme Court's recent decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289, 1293 (2012), does not decide this case." Judge Bryson implicitly agrees that the distinction is based upon claim form – because Mayo "involved method claims." However, he did draw the same analogy that I penned immediately following the Mayo decision – that the discovery of the DNA sequence is the heart of the invention and that the rest of the claim structure is merely window dressing.
In Mayo, which involved method claims, the representative claim involved the steps of administering a drug to a subject, determining a metabolite concentration in the subject's blood, and inferring the need for a change in dosage based on that metabolite concentration. The [Supreme] Court found that the method was not directed to patent-eligible subject matter because it contributed nothing "inventive" to the law of nature that lay at the heart of the claimed invention. . . . In concluding that the claims did not add "enough" to the natural laws, the Court was particularly persuaded by the fact that "the steps of the claimed processes . . . involve well-understood, routine, conventional activity previously engaged in by researchers in the field."
Just as a patent involving a law of nature must have an "inventive concept" that does "significantly more than simply describe . . . natural relations," a patent involving a product of nature should have an inventive concept that involves more than merely incidental changes to the naturally occurring product. In cases such as this one, in which the applicant claims a composition of matter that is nearly identical to a product of nature, it is appropriate to ask whether the applicant has done "enough" to distinguish his alleged invention from the similar product of nature. Has the applicant made an "inventive" contribution to the product of nature? Does the claimed composition involve more than "well-understood, routine, conventional" elements? Here, the answer to those questions is no.
Neither isolation of the naturally occurring material nor the resulting breaking of covalent bonds makes the claimed molecules patentable. We have previously stated that "isolation of interesting compounds is a mainstay of the chemist's art," and that "[i]f it is known how to per-form such an isolation doing so 'is likely the product not of innovation but of ordinary skill and common sense.'" Aventis Pharma Deutschland GmbH v. Lupin, Ltd., 499 F.3d 1293, 1302 (Fed. Cir. 2007). Similarly, the structural changes ancillary to the isolation of the gene do not render these claims patentable. The cleaving of covalent bonds incident to isolation is itself not inventive, and the fact that the cleaved molecules have terminal groups that differ from the naturally occurring nucleotide sequences does nothing to add any inventive character to the claimed molecules. The functional portion of the composition—the nucleotide sequence—remains identical to that of the naturally occurring gene.
The majority suggests that I have "focus[ed] not on the differences between isolated and native DNAs, but on one similarity: their informational content." In light of Mayo, that approach seems appropriate. The informational content of the nucleotide sequences is the critical aspect of these molecules; the terminal groups added to the molecules when the covalent bonds are broken—to which the majority and concurring opinions attribute such significance—are not even mentioned in the claims. The nucleotide sequences of the claimed molecules are the same as the nucleotide sequences found in naturally occurring human genes. In my view, that structural similarity dwarfs the significance of the structural differences between isolated DNA and naturally occurring DNA, especially where the structural differences are merely ancillary to the breaking of covalent bonds, a process that is itself not inventive.
Regardless of your policy perspective on patent eligibility, Judge Bryson's opinion is clearly the most faithful to the Supreme Court's Mayo decision. The only problem is that Judge Bryson ignores other relevant subject matter eligibility cases such as Chakrabarty and Funk Bros. Of course, this highlights a real problem with subject matter eligibility doctrine – the cases do not fit together in any coherent fashion.
+ + + + + An interesting aspect of Judge Lourie's opinion is his attempt to wash his hands of the public policy results of the decision:
[I]t is important to state what this appeal is not about. It is not about whether individuals suspected of having an increased risk of developing breast cancer are entitled to a second opinion. Nor is it about whether the University of Utah, the owner of the instant patents, or Myriad, the exclusive licensee, has acted improperly in its licensing or enforcement policies with respect to the patents. The question is also not whether is it desirable for one company to hold a patent or license covering a test that may save people's lives, or for other companies to be excluded from the market encompassed by such a patent—that is the basic right provided by a patent, i.e., to exclude others from practicing the patented subject matter. It is also not whether the claims at issue are novel or nonobvious or too broad. Those questions are not before us. It is solely whether the claims to isolated BRCA DNA, to methods for comparing DNA sequences, and to a process for screening potential cancer therapeutics meet the threshold test for patent-eligible subject matter under 35 U.S.C. § 101 in light of various Supreme Court holdings, particularly including Mayo.…
Congress is presumed to have been aware of the issue [of gene patents], having enacted a comprehensive patent reform act during the pendency of this case, and it is ultimately for Congress if it wishes to overturn case law and the long practice of the PTO to determine that isolated DNA must be treated differently from other compositions of matter to account for its perceived special function. We therefore reject the district court's unwarranted categorical exclusion of isolated DNA molecules.
In other words, we don't make policy, we just call balls and strikes.
Next Steps: In my estimation, this case is not over. There is a strong possibility of either an en banc rehearing by the full 12-member Federal Circuit and/or a grant of certiorari by the US Supreme Court.
More to come, but for now read the opinion here: http://www.cafc.uscourts.gov/images/stories/opinions-orders/10-1406.pdf
Posted on Aug 16, 2012 at 10:42 AM | Permalink
By Dennis Crouch Magsil Corp. and MIT v. Hitachi (Fed. Cir. 2012)
Posted on Aug 16, 2012 at 06:06 AM | Permalink
Posted on Aug 15, 2012 at 01:35 PM | Permalink
The following is an invited guest post by William Bull. Mr. Bull is a researcher at the Maastricht European Private Law Institute (M-EPLI) at Maastricht University in the Netherlands European countries have now almost reached agreement on the creation of a European Union patent with unitary effect and a 'Unified Patent Court' (UPC) to be established (primarily) in Paris in 2014 or so. The plan is to introduce a patent right valid throughout the territory of 25 of the 27 EU Member States (Italy and Spain remaining outside the process due to objections to the proposed linguistic regime) and, in tandem, a single patent court at European level with exclusive jurisdiction in infringement and revocation proceedings covering the same territory, in lieu of domestic courts. The UPC is to consist of two divisions; a Court of First Instance and a Court of Appeal. The former is to be further sub-divided into a Central Division (located in Paris, albeit itself with 'thematic branches' in London and Munich!) and additional regional and local divisions situated in various Member States. It is by now de rigueur for any commentary on the European patent project to begin with a reminder of its protracted history. The idea of creating some form of common European patent system can be traced all the way back to the 1960s, and has been plagued by drawbacks and delays ever since. The most recent attempt to revive the project came in 2000 with a proposal for a Regulation on a Community Patent (following on from the Regulation establishing a Community Trade Mark (CTM) adopted some years earlier), and continued with an accompanying proposal for a Community Patent Court of 2003. The former would introduce a unitary patent right covering the entire European Union, while the latter would lead to the creation of a unified patent court with exclusive jurisdiction over both the new patent right and existing 'European' patents (that is, bundles of national patents) obtained under the European Patent Convention (EPC) system. Together, these proposals were to be the 'building blocks' for a future EU system, designed to overcome the difficulties posed by the need to acquire and litigate patent rights in different Member States. Of course the European legislator is faced with this core dilemma in virtually any of the areas of law in which it has some competence to act, and European intellectual property law is by no means the only field where there have been lengthy deliberations over the need, form and likely success of measures seeking to instigate some 'harmonisation' of the law (in one way or another). The debate on the harmonisation of European private law (and particularly contract law) immediately springs to mind as an example, for this also began some decades ago, leading to the drafting of various academic principles, from the Principles of European Contract Law (PECL) in the course of the 80s and 90s, through the Draft Common Frame of Reference in the 2000s, and culminating in a proposal for a Common European Sales Law only last year. What makes the European patent project unique is the fact that it has focused on the introduction of an apposite pan-European court system as well as on matters of substantive law. The creation of a unified patent court for the EU is considered by many – not least the European Commission – to be a conditio sine qua non for the proper functioning of the proposed unitary patent. This is the case even though such a court would be unprecedented, and was not seen as necessary for either the CTM or the Community design introduced in 2002 (both of which are adjudicated upon by designated national courts collaborating with the Court of Justice of the EU (CJEU) via the general EU preliminary reference procedure). So it is the importance attached to this aspect of the patent debate that will readily come as a surprise to those operating in other areas of European law, including the sphere of European private law (EPL). In spite of the many parallels that can be drawn between the debate on harmonisation of European IP law and that of private law more generally (not to mention other areas of EU law), however, there is a distinct lack of interaction among actors in the various subfields. This means that often similar arguments are used, but without benefiting from insights in the other field. It is therefore against this backdrop of academic fragmentation that we would encourage further comparison between the European harmonisation debate in areas such as patent law and contract law, as this should lead to lessons on what to encourage or to avoid in developing the two fields. In particular, since in EPL there has been hardly any discussion about the introduction of a European court in order to ensure uniform interpretation, we cannot help but wonder whether the significance of this issue in patent law is not overestimated. This is a particularly worthwhile question bearing in mind that if an alternative to the unified patent court could be found, this would greatly help the present political process, which now appears to be stuck on the issue of involvement of the CJEU. In our view, there is nothing against splitting the two building blocks: in a paper that I wrote together with Jan Smits (available on SSRN) I argue that it may indeed be useful to introduce the unitary European patent, but I do not see the advantage of creating the proposed European patent court system, given a) the disadvantages of such a system and b) the possible alternative. First: the disadvantages of the proposed patent court system. From the perspective of end users, a rational patent litigation system depends on three main factors; expertise of the judges, the ability to make a speedy decision, and low costs. We doubt whether the new system would be able to provide these, certainly (but not only) in the short- to medium-term. Given that the regional and local divisions of the Unified Patent Court will be spread across Europe and necessarily composed of multi-national panels with the discretion to decide whether or not to bifurcate proceedings, it is difficult to see why the UPC as it is envisaged would fare much better against the obstacles to efficient litigation and uniform interpretation of differing levels of judicial expertise, patent cultures and language barriers. Second, a possible alternative to the now proposed unified patent court could consist of a competitive model of convergence of patent law. This model is based on the present European practice in which 50 to 70% of all patent cases in Europe end up before the courts of a very limited number of countries (and in particular before the German courts, of which the Düsseldorf district court is seen as market leading, dealing with more than 600 new infringement cases every year from all over Europe). The popularity of the German court system among European litigants apparently stems from its speed, high quality, commercial sense and the fact that the staying of an infringement procedure due to revocation is only rarely allowed. In short, our point is that successful harmonisation of IP law may indeed be dependent on uniform interpretation of European rules, but this uniformity need not come from a common European court. It can also be provided by a national court, as long as individual claimants are allowed to choose the court of their liking. In fact, in the absence of any meaningful political compromise on a European court system in the last 40 years, such a market for patent litigation has already partly come to exist. Of course that is not to say that such an alternative is not without its own problems, but we believe that a competitive model of convergence has a lot of merit over the proposed European court system, which could easily prove to be an unavailing venture into the unknown. * * * * * These questions are discussed in detail in the working paper by Jan M. Smits and William Bull
entitled 'European Harmonisation of Intellectual Property Law: Towards a Competitive Model and a Critique of the Proposed Unified Patent Court', available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2117835.
Posted on Aug 15, 2012 at 11:18 AM | Permalink
Hricik on Ethics Professor Hricik has several new posts on his new Patent Ethics site at http://www.patentlyo.com/hricik
Judge Alsup Orders Google and Oracle to Reveal Paid Relationships with Bloggers, Journalists and Academics Civility and Professionalism Codes Anonymous Ex Parte Reexam Requests Again Permitted Malpractice and Outsourcing of Legal Services Federal Circuit and the Standard of Review for Litigation Misconduct Posted on Aug 14, 2012 at 03:20 PM | Permalink
Google's Improved Patent Search by Dennis Crouch
Two updates on Google's patent search tools: EU patents are now available; fully searchable; and automatically translated. Google has implemented a new prior art search button that attempts to identify the ten most relevant prior art documents in its search database. In my 10–minute test, the identified prior art did not appear to be directly on-point. Of course, my criticism likely suffers from the Nirvana fallacy. Every prior art search methodology suffers from major deficiencies. The proper question for Google's tools is whether the new system has a role in the patenting process. At minimum, it is likely an improvement on the quick pre-filing “sanity check” searches that are often conducted by patent applicants and patent attorneys. In its press release, Google indicated that the company will “be refining and extending the Prior Art Finder as [it] develop[s] a better understanding of how to analyze patent claims and how to integrate the results into the workflow of patent searchers.”
Posted on Aug 14, 2012 at 01:06 PM | Permalink
AIA Shifts USPTO Focus from Inventors to Patent Owners by Dennis Crouch
The new rules on inventor oaths make practical business sense, but they leave me somewhat pessimistic. Metaphysically, the rules serve to crystallize the the US patent system's shift in focus away from inventors and toward corporate owners (and other non-human juristic entities). Up to now, corporations were never considered patent applicants. Rather, inventors were the applicants. Even when the ultimate rights were owned by a corporate entity, the USPTO still focused on the inventors as the patent applicants. Under the new rules being implemented on September 16, 2012, the status of “patent applicant” will no longer be keyed to inventorship but instead ownership. Thus, any juristic entity who can show a proprietary interest will be permitted to file and prosecute a patent application as the patent applicant. Of course, this change makes a fool of the first-inventor-to-file label given to the new US priority system during the political debates. Rather, the system truly is the first-owner-to-file. However, the change does fit within the same mental construct as the shift to a first-to-file system that largely turns a blind eye to inventive activities and instead focuses on paperwork (the essence of a corporate entity). In recent years, we have seen a steady decrease in the percentage of inventor-owned patents. For better or worse, there is no reason to believe that trend will change any time soon. On a practical level, the change to the oath requirement itself is fairly narrow and will not ordinarily arise. Under the new rules, the inventor will still ordinarily submit an oath or declaration of inventorship unless the inventors are unavailable or refuse. However, there are two major important changes: (1) a right-holding entity may file the patent application and wait to file the inventor's oath until the time that the application is otherwise in condition for allowance; and (2) defects in the listing of inventors can now (apparently) be corrected even if the original filing was done with deceptive intent. These changes relieve some headache for corporate patent attorneys. However, I believe that this streamlined process does increase the likelihood that unscrupulous entities will overreach. One “cure” for this potential problem is that the Office will now require all juristic entities (non-people) prosecuting applications to do so via a registered patent practitioner. “Thus, all papers submitted on behalf of a juristic entity must be signed by a patent practitioner...” Obviously, this is a boon for US patent attorneys and patent agents. It will create some struggle for very small corporate entities that continue to file applications pro se. However, my understanding of the rules is that the requirement to use a patent attorney/agent only exists if the juristic entity files as the applicant. To avoid the requirement, the application could still be filed in the name of the actual inventors who retain the option of prosecuting the application pro se.
Posted on Aug 14, 2012 at 08:35 AM | Permalink
One common refrain [from patent critics] is that patents fail as property rights because patent infringement doctrine is not as clear, determinate and efficient as trespass doctrine is for real estate. This essay explains that this is a fallacious argument, suffering both logical and empirical failings. Logically, the comparison of patent boundaries to trespass commits what philosophers would call a category mistake. It conflates the boundaries of an entire legal right (a patent), not with the boundaries of its conceptual counterpart (real estate), but rather with a single doctrine (trespass) that secures real estate only in a single dimension (geographic boundaries). Estate boundaries are defined along the dimensions of time, use and space, as reflected in numerous legal doctrines that secure estates, such as adverse possession, easements, nuisance, restrictive covenants, and future interests, among others. The proper conceptual analog for patent boundaries is estate boundaries, not fences. Empirically, there are no formal studies of how trespass or even estate boundaries function in litigation; thus, complaints about the patent system’s indeterminacy are based solely on an idealized theory of how trespass should function; it’s the nirvana fallacy. Furthermore, anecdotal evidence and related studies suggest that estate boundaries are neither as clear nor as determinate as patent scholars assume it to be. In short, the trespass fallacy is driving an indeterminacy critique in patent law that is both empirically unverified and conceptually misleading. In this essay, Mossoff makes an important contribution to the rhetoric of patent policy. The most convincing element of his argument is that the trespass metaphor fails. In my view, his broader real estate metaphor also fails because it also does not fit well with the U.S. patent system except in its level of complication and dispute potential. The reality is that all metaphors fail to fully mirror their subject -- by definition a metaphor is something different from its subject. With that in mind, I see the essay as raising a cautionary flag against over-reliance rather than a complete indictment. My more important critique of Mossoff's argument is derived from his suggestion that we hold-off improving the patent system until we know which metaphor is best and whether issued patents are more indeterminate than real estate deeds. Mossoff writes: Until firm factual grounding for this normative critique is first established, commentators, legislators and courts might want to pause before continuing to make fundamental structural changes to the American patent system.
Even if Mossoff's base critiques of the trespass metaphor are all correct, we still know that the U.S. patent system has room for improvement. The fact that the real estate market is in shambles should not serve as a justification for officials (or comentators) to fail in their duty to make our system the best that it can possibly be. Posted on Aug 13, 2012 at 10:43 PM | Permalink
Given these costs, together with the realities of how patent litigation actually works and how inequitable conduct claims are generally developed, I remain highly skeptical of the PTO's projection that it will receive about 1,430 requests for supplemental examination annually. Indeed, I suspect this number will actually be much, much smaller. Most information that might be submitted in a supplemental disclosure request will be discovered too late for supplemental examination to matter. For similar reasons, I am dubious of the PTO's prediction that supplemental examination will reduce the number of district court patent infringement cases in which inequitable conduct is plead as a defense. Posted on Aug 13, 2012 at 03:48 PM | Permalink
More USPTO Final Rules The USPTO is in the process of publishing five final rules packages for implementing the America Invents Act (AIA) as well as one guide to the new style of trial practice before the Office. The new rules are scheduled to be published tomorrow, but are now available in the Federal Register Reading Room and through the links below:
The USPTO has already published final rules on the statute of limitations for disciplinary hearings and Citation of prior art and written statements. The USPTO is currently considering amendments to its proposed rules governing the first-inventor-to-file system. Those rules will not likely be finalized until early 2013, but at least prior to the March 16, 2013 implementation of the new system. According to an announcement by the USPTO, no additional new rules are expected to be released before September 16, 2012, the one-year anniversary of the AIA. The USPTO has scheduled a “roadshow” to discuss the new rules and their impact on patent practice. Posted on Aug 13, 2012 at 09:38 AM | Permalink
Unfortunately, this problem has raised its ugly head again in the high profile Monsanto v. DuPont patent case. This case has made headlines because Monsanto has recovered $1 billion in damages even though DuPont has never even been accused of selling any seeds that infringe Monsanto's patent for genetically modified Roundup Ready soybeans. Rather, the infringement is based on some Roundup Ready soybeans that the defendants developed but did not sell and the award appears to be based on the royalties that DuPont would have paid had it negotiated a license ahead of time. I use "appears" because Monsanto's damages theory is hidden from the public view. I have previously written on patent damages and was puzzled by how DuPont could be liable for $1 billion when it did not actually sell any infringing seeds. Consequently, I went to the case's docket in the Eastern District of Missouri hoping to learn about Monsanto's damages theory. There are several entries that might explain the theory that led to a $1 billion verdict. For example, DuPont filed a motion to exclude the opinions of Monsanto's damages expert, Michael Keeley. Of course Monsanto filed a response and DuPont replied. These briefs and their exhibits were filed entirely under seal. In other words, there is no public redacted version of any of these documents. What's more there is nothing in the docket that shows how the district court ruled on the DuPont's motion. Even if the court's ruling were in the docket, it probably would not have been available. Other docket entries show that the court has regularly sealed many of its other rulings including decisions on several motions for partial summary judgments, a motion to compel and a motion to strike. In other words, there is no way to understand many of the basic theories underlying Monsanto's case and Dupont's defenses. Now you don't need to read all the press coverage to understand that Monsanto v. DuPont is one of the most important cases in patent law. There appears to be a novel damages theory that led to $1 billion verdict. There are likely issues of first impression that relate to patents on genetically modified organisms. Indeed, the outcome has important ramifications for agribusiness generally. Yet, the critical court records are under seal and everyone is left in the dark. I won't repeat my entire argument here. But, I will repeat my plea. At a minimum, the court should force parties in patent cases to file public versions of their briefs. They can leave out their profit margins and trade secrets. We don't care about such things. But the public needs to know the basic facts and theories underlying these cases. Similarly, to the extent that courts seal their decisions, they need to publish public versions that explain the reasoning underlying their rulings.
Posted on Aug 11, 2012 at 07:57 AM | Permalink
One of the main reasons for this long debated argument about the patentability of software is that the wrong question is being debated. The current debate is mainly on the question "Should software be Patentable? And whether software, in the form of a computer program, is patentable subject matter?" Software is just a means to an end. The debate should be about the invention. If the debate was on the question "Is an invention that is patentable in hardware, equally patentable if implemented in software?" there would be much less controversy. Hardware implemented inventions have been issued for well over a hundred years, long before the advent of the digital computer. Back in October 2011 I wrote an article for a UK publication "Should software be patentable? That's the wrong question to ask". Because of the many comments to that article, many of which were critical of my arguments, I was asked for a follow up article "Pioneer Goetz rebuts software patent critics". In these two articles I tried to stress that software (a computer program) is purely part of a proper disclosure
Article 29 of the US Patent Office's application guidelines covering "Disclosure Obligations" states "…An applicant for an invention shall disclose the invention in a manner sufficiently clear and complete for the invention to be carried out by a person skilled in the art and may require the applicant to indicate the best mode for carrying out the invention…." Clearly, if the best mode is a computer program, then that disclosure would be described through diagrams, flow charts, and descriptive text. In many inventions, the best mode is a combination of hardware and software. (Or if the best mode is not hardware and/or software but cams, pistons, and flywheels or water or wind power, so be it.) If the Patent Office's examiners focused on the invention, and not on how the invention was disclosed, it would reject many, if not most Software and Business Method Patents. Unfortunately, the Patent Office is bound by a plethora of confusing Supreme Court and lower courts decisions and opinions. Yet, the US Patent Office does have flexibility in how it interprets the US Supreme Court's many rulings. This gets us back to the US Patent Office and its examiners who must be better trained to recognize true inventions. Easily said, and a gigantic challenge for the US Patent Office. But, unfortunately, that is where we are today. Postscript: Back on November 30, 2009, Patently-O published my blog "In Defense of Software Patents" in response to the editorial "Abandoning Software Patents" by Ciaran O'Riordan, Director of End Software Patents (posted on Patently-O on November 6, 2009) which had as its premise that software companies are trying to protect "software ideas". In that article I commented on the Bilski Opinion as well as gave some concrete examples of software-only patents as well as hardware/software patents. That article also received hundreds of comments, many being negative, and in response in September 2010 I had a follow up article "In Defense of Software Patents - Part 2". Both those articles explained why software companies and other companies should not be denied patent protection on true inventions solely because part or all of the disclosure involves a computer and a computer program. It goes on to describe why many software companies are high technology companies that employ many highly educated people fully capable of inventing. Posted on Aug 10, 2012 at 06:52 AM | Permalink
Cole Richter from my old law firm (MBHB) has written a short alert highlighting a number changes taking effect on September 16, 2012 at the USPTO.
Third-party pre-issuance submissions allowed BPAI becomes the PTAB Inter partes review begins (September 15 last day to file for inter partes reexamination) Transitional post-grant review for business methods Changes to the inventor's oath Inventorship can now be corrected despite deceptive intent (by implication) Read the alert.
Posted on Aug 09, 2012 at 04:25 PM | Permalink
Loser Pays System Introduced in Congress Congressman Peter Defazio recently introduced H.R. 6245. The working title of the bill is the “Saving High-Tech Innovators from Egregious Legal Disputes Act of 2012” also known as SHIELD. The Bill would permit the award of attorney fees to successful defendants accused of infringing a computer hardware or software patent if the action “did not have a reasonable likelihood of succeeding.” Currently attorney fees are only awarded in “exceptional cases” under 35 U.S.C. 285 or as a sanction for violation of Fed. R. Civ. Pro. R. 11. The statute would read: (a) In General- Notwithstanding section 285, in an action disputing the validity or alleging the infringement of a computer hardware or software patent, upon making a determination that the party alleging the infringement of the patent did not have a reasonable likelihood of succeeding, the court may award the recovery of full costs to the prevailing party, including reasonable attorney's fees, other than the United States.
The computer hardware and software would both be broadly defined by the new statutory provision. Most jurisdictions around the world follow a loser-pays rule in civil litigation. In theory (and with certain assumptions) a loser pays rule results in more meritorious claims and fewer non-meritorious claims. The system (again in theory) allows a legally vindicated party to walk away without direct financial loss due to the litigation. A major difference between those systems and that proposed here is that the normal loser-pays system is two-way while this bill proposes a one-way system that only injures patentees. The stated purpose of the bill is to reduce the amount of patent litigation brought by “patent trolls.” For several reasons, I think that it is unclear whether the bill would achieve that result in any respect. Posted on Aug 09, 2012 at 09:21 AM | Permalink
Monsanto Jury Verdict Form File Attachment: MonsantoJuryVerdict.pdf (140 KB)
Posted on Aug 08, 2012 at 11:15 PM | Permalink
JURY VERDICT For: Plaintiffs Against: Defendants In the Amount of: One Billion Dollars. (Entered: 08/02/2012) In his August 6 order, Judge Webber confirmed the jury verdict that DuPont/Pioneer willfully infringe Monsanto's GMO roundup-ready seed patent. The jury rejected the defendants' claims that the asserted patent was invalid; that the patent had been finally obtained through inequitable conduct; and that the reissue patent improperly expanded the scope of the original claims. The judge also confirmed the jury's reasonable royalty damage award of "One Billion Dollars ($1,000,000,000)."
Posted on Aug 08, 2012 at 04:12 AM | Permalink
In a sua sponte order, the Federal Circuit has announced that case to be heard en banc to determine whether the appellate court has jurisdiction over a judgment on patent infringement liability in a bifurcated case even
before issues of damages and willfulness have been adjudged. The en banc order highlights 28 U.S.C. § 1292(c)(2) as likely governing the case. That statute provides the Federal Circuit with:
exclusive jurisdiction … (2) of an appeal from a judgment in a civil action for patent infringement which would otherwise be appealable to the United States Court of Appeals for the Federal Circuit and is final except for an accounting.
The question on appeal is thus, whether the district court case is "final except for an accounting." Current precedent is somewhat confused. In Majorette Toys (U.S.) Inc. v. Darda, Inc. U.S.A., 798 F.2d 1390 (Fed. Cir. 1996), the court arguably classified the calculation of attorney fees and court costs as "accounting" but did not place the principle damages award in that category. In a recent order, the Federal Circuit took a narrow interpretation of Majorette by refusing to hear an appeal of an attorney-sanction before the dollar value of the sanction had been set. Orenshteyn v. Citrix Systems, Inc., --- F.3d ----, 2012 WL 3101666 (Fed. Cir. 2012). Judge Newman dissented in Orenshteyn – arguing that the sanction dollar value constituted "accounting" under the law. In Falana v. Kent State University, 669 F.3d 1349 (Fed. Cir. 2012), the court ruled that "the district court's exceptional case finding and award of attorney fees" were not properly before the court because the dollar values had not been calculated and those values were more than "accounting" under the statute. Falana was decided by Judges Linn, Reyna and Prost. The en banc order raises two particular questions: Does 28 U.S.C. § 1292(c)(2) confer jurisdiction on this Court to entertain appeals from patent infringement liability determinations when a trial on damages has not yet occurred?
Briefs of amici curae may be filed without consent of the parties or leave of the court. Posted on Aug 07, 2012 at 05:19 PM | Permalink