Interactive Pictures Corp., v. Infinite Pictures, Inc. and Bill Tillman et al.
Decided December 20, 2001
Judge Lourie with Judges Archer and Gajarsa

*          An amendment that merely states what had been implicit in a claim does            
            not create prosecution history estoppel 

Interactive sued Infinite at the U.S. District Court for the Eastern District of Tennessee for infringing claims to an image viewing system that automatically processes pixel information for selected viewing angles.  A jury found equivalence to Interactive's means plus function claim and awarded damages.  Judge Leon Jordan refused to overturn the jury verdict and Infinite appealed to the CAFC.

The CAFC affirmed, in a decision that turned on whether Interactive's amendment of a claim from "output signals" to "output transform calculation signals" estopped application of the doctrine of equivalents.  The CAFC agreed that adding the words "was not a narrowing amendment because that addition did nothing more than make express what had been implicit in the claim as originally worded.  That interpretation flows from the original claim as a whole and in light of the specification."

This case teaches how to amend a claim without losing use of the doctrine of equivalents.  A patent prosecutor should whenever possible point out how a claim amendment merely adds information that was inherent in the unamended claim. Another fact from prosecution that supported inherency was the applicant's "interchanging" use of the amended and unamended phrases.  Such interchangable use of terms during argumentation prompted the CAFC to conclude that the extra features in one term were inherent in the other.  A patent practitioner should consider mixing alternate terms during arguments to reinforce the position that added word(s) to a term does not change the term's meaning.

Linear Technology Corporation v. Micrel, Inc.
Decided December 28, 2001
Judge Clevenger with Judges Gajarsa and Dyk

*          An offer for sale or sale that objectively does not indicate an intent of each         party    to be bound is not prior art under 35 U.S.C. 102(b)

          Linear sued Micrel in a bench trial for patent infringement at the District Court for the Northern District of California wherein the principle issue was patent invalidity in view of Linear's alleged on sale bar under 102(b).  Linear gave customers preliminary data sheets and acknowledged premature purchase orders more than 12 months before filing its patent application.  However, Linear merely promised to advise those customers when new, unreleased product would be available.  Nevertheless judge Marilyn Patel deemed the activities a prior sale and offer for sale, and declared the patent invalid under 102(b).  Both parties appealed to the CAFC.

            The CAFC reversed the invalidity holding.  The CAFC pointed out that Linear's activities would have been a bar prior to the Pfaff decision.  However the new Pfaff rule altered the definition of prior sale or offer to sell by adding the requirement that a "commercial offer" be made as determined by "applying contract law principles to the on-sale bar (which) will create the certainty of application that the Supreme Court sought."  Further, the CAFC explained that "under general principles of contract law, to accept an offer an offeree (the patentee in this case) must make a manifestation of assent to the offeror" and the "acceptance must objectively manifest the offeree's assent"  (emphasis in original).  Under this (now federal) rule of contract construction, Linear's communication with clients and Linear's "entry" of order requests into its bookings system were not completed offers and sales respectively, because Linear was not contractually bound as determined objectively. 

            This case teaches that a prior offer or sale under 102(b) must manifest an intent to be bound under regular contract principles.  The CAFC also provided examples of what is permitted without creating an on-sale bar.  Specifically a company may solicit pricing information from distributors; publish preliminary data sheets and promotional information; send data sheets to customers; and entertain but not formally agree to sales representatives requests for product samples to give to specific customers.  This decision explicitly adopted and affirmed features from the UCC and from common contract law, thereby further deepening a federal law of contracts that perhaps may be used by federal courts in other areas.

Kudlacek v. DBC, Inc. et al.
Decided December 21, 2001
Judge Clevenger with Judges Gajarsa and Dyk

*          A means plus function claim should be supported by multiple alternative             structures in the specification

             Kudlacek sued DBC at the U.S. District Court for the Northern District of Iowa for infringing a patent claim to an archery bow stabilizer that recites a "resilient securing means" for dampening vibration.  The court granted summary judgement of non-infringement because DBC's accused bow stabilizer lacked the structure that was linked to Kudlacek's means plus function claim.  Kudlacek appealed.

            The CAFC affirmed, noting that "the patent describes only one embodiment (having) the only identification of any structure for engaging and securing" the vibration dampener.  Unfortunately for Kudlacek the courts had to construe the asserted claim narrowly because "kudlacek did not disclose any alternative structures .... that would give broader scope of the resilient securing means limitation."  Furthermore, no infringement was possible under the doctrine of equivalents because the accused bow "contains absolutely no structure that could satisfy" the structure limitation of the asserted claim.

            This case underscores the importance of using imagination during patent drafting to add varied embodiments of an invention to a specification.

LNP Engineering Plastics, Inc. and Kawasaki Chemical Holding Co., Inc.
v. Miller Waste Mills, Inc.
Decided December 21, 2001
Judge Rader with Judges Newman and Bryson

*          Inherent (non-disclosed) features from a prior art product may be used to attack a         product by process claim on obviousness grounds

*          A patent applicant does not necessarily have to provide to the PTO a partial      translation of a prior art document cited by the Japanese Patent Office

            LNP and its licensor Kawasaki sued Miller at the U.S. District Court for the District of Delaware for infringing claims to reinforced plastic pellets that are "substantially completely wetted by a molten thermoplastic polymer" during manufacture.  A jury found no infringement and found patent invalidity due to indefiniteness and obviousness.  Judge Roderick McKelvie however, granted judgement as a matter of law that Miller's product infringed and that the asserted claims were valid, thereby substantially reversing the jury verdict.  Both sides appealed to the CAFC.

            The CAFC affirmed the lower court's infringement decision but reversed the judge's decision on obviousness.  Judge McKelvie had overruled the jury on obviousness because the disputed claim recited "length and dispersal characteristics" but the prior art did not mention those characteristics.  The CAFC on the other hand did not require a description in the prior art but instead relied on inherency of those features in the cited document.  The CAFC pointed out that the prior art "teaches the same .... process disclosed in (LNP's/Kawasaki's) patent" and that "prior art describing a product is highly relevant to patentability determinations for a process that may be performed using the product."  This use of an inherent feature from a publication for an obviousness determination is unusual.  Inherency often is used to prove anticipation but not obviousness. 

            An interesting patent prosecution point was that both courts approved the applicant's non-listing of a prior art document cited by the Japanese Patent Office in an information disclosure statement.  The prosecuting attorney had obtained a translation of a portion of the cited document from Japanese into English.  The attorney decided not to supply the translation or the citation to the PTO however because the document was similar to another document that was already listed in an information disclosure statement.  Thus, the CAFC took a reasonable view with respect to providing a translation to the PTO for an information disclosure statement.  Generally speaking it is important to err on the side of caution and supply all relevant documents, however. 

Bose Corporation v. JBL, Inc. and Infinity Systems Corporation
Decided December 17, 2001
Judge Mayer with Judges Newman and Bryson

*          An applicant may add an inherent feature of an invention to a claim without        creating file history estoppel

            Bose sued JBL at the U.S. District Court for the District of Massachusetts for infringing claims to a loudspeaker enclosure having a physical boundary "defined by an ellipse" shape.  Judge Patti Saris found infringement and awarded damages to Bose determined as a royalty based on sales for the entire music system of which the speaker is a part.  JBL appealed to the CAFC.

            The CAFC affirmed.  The CAFC agreed with the lower court that Bose's claim amendment in response to a 35 U.SC. 112(2) indefiniteness rejection does not block use of the doctrine of equivalents under Festo.  In this instance Bose had amended the phrase "boundary being defined by an ellipse" into "being defined by an ellipse having a major diameter."  The CAFC pointed out that added term "major diameter" was "reasonably ascertainable by those skilled in the art" and was "an inherent characteristic of an ellipse."  Accordingly, the change did not narrow the claim scope and was not prosecution history estoppel under Festo.  A second point was that Bose's damages were calculated from sales of the entire stereo product even though its patent only covered a part (speaker) of the stereo.  The CAFC used the "entire market rule" in using the higher figure because the inventive component was "the basis for consumer demand."  This invention concerns the small Bose radio that is heavily advertised for its innovative speaker with great bass response.

            A patent applicant might avoid a Festo doctrine of equivalents estoppel (as Bose did here) by adding inherent features of claim elements when amending claims, and specifically stating the inherency of those added features during prosecution. 

Intermatic Incorporated v. The Lamson & Sessions Co.
Decided December 17, 2001
Judge Lourie with Judges Newman and Rader; Judge Newman dissents in part

*          A narrowing amendment creates file history estoppel for all claims having the      amended term, even for claims that are allowed as filed

            Intermatic sued Lamson at the U.S. District Court for the Northern District of Illinois for infringing patent claims to an electrical outlet cover having a base plate with an aperture and an insert adapted to fit within the aperture.  During reexamination of its patent application Intermatic amended a claim from "adapted to be mounted in the base" to "adapted to be accommodated within the aperture in the base" to overcome prior art.  Despite this narrowing amendment to the use of an aperture, Judge Philip Reinhard allowed a jury trial for infringement by Lamson's device, which lacks an aperture.  A jury found infringement under the doctrine of equivalents and Lamson appealed.

            The CAFC concluded that the district court should have granted judgement as a matter of law for noninfringement.  The CAFC reasoned that Intermatic's addition of the aperture limitation to one claim "applies to all other claims in the patent containing that limitation.  (and) To conclude otherwise would be to exalt form over substance." (quoting Builders Concrete, Fed. Cir. 1985).  The majority opinion explained that there is "no reason to assign different ranges of equivalents for the identical term used in different claims in the same patent, absent an unmistakable indication to the contrary."  Judge Newman, in a short dissent disagreed, and preferred limiting the Festo rule blocking all equivalents to specific claims that were amended during patent prosecution.

            This case shows that a patent applicant cannot sidestep Festo by filing both broad and narrow claims in a new patent application and then canceling the broad claims in response to rejections.  Any cancellation based on a rejection of one term may block use of the doctrine of equivalents to that element in other unamended claims that recite the same term.  A strategy to combat this problem may be to file reasonably allowable claims in an original patent application.  After the examiner allows some claims, an applicant may attempt to broaden the claims through informal off the record discussions with the patent examiner.

In Re. Thrifty, Inc.
Decided December 13, 2001
Judge Linn with Judges Michel and Rader

*           A color service mark may be registered by showing acquired distinctiveness             through consumer recognition of specific colored objects

Thrifty filed a service mark registration for "the color blue" in connection with a range of automobile related services.  Thrifty's application included a drawing of a rental center building, which indicated a blue wall.  The Examining Attorney at the U.S. PTO rejected the application for lack of a concise description.  Thrifty then amended the application with a description that "[t]he color blue is used on vehicle rental centers, signs, vehicles....."  The U.S. PTO again rejected the application, and the Trademark Trial and Appeal Board affirmed.  Thrifty appealed to the CAFC.

The CAFC affirmed the rejection because the original application described "the color blue placed on the wall of a building" whereas the later amendments broadened the mark to cover more items.  The CAFC pointed out that the test for whether an amendment to an application "is material" (alters the scope) is "whether the mark would have to be republished after the alteration in order to fairly present the mark for purposes of opposition."

A color trademark or service mark can be registered only by showing acquired distinctiveness, unlike a word mark which may be inherently distinctive.  Accordingly, a color mark application should specify certain object(s) that consumers associate with the color, as Thrifty failed to provide fully in its filing.

Smith & Nephew, Inc. and John O. Hayhurst, M.D. v. Ethicon, Inc
Decided December 12, 2001
Judge Newman with Judges Michel and Gajarsa, Judge Michel dissenting

*           The claim term "comprising" acknowledges that a claim scope may include   elements not listed in the claims

Smith sued Ethicon in the United States District Court for the District of Oregon for infringing claims concerning anchoring sutures to bone by "lodging" an anchor within a hole formed in the bone.   Judge  Malcolm Marsh adopted a magistrate's claim construction that the anchor "once pressed into the hole, may not be removed."  Based on this construction the court held summary judgement of non-infringement because Ethicon's accused process requires "a subsequent pulling/seating step" after insertion to secure the anchor.  Smith appealed.

The CAFC agreed with the lower court's claim interpretation but vacated the decision because Smith's claims, which recite "comprising" cover Ethicon's extra pulling step.  The CAFC explained that "claims are infringed when all of the steps thereof are performed, unless the invention itself is the elimination of additional steps."  Judge Michel in a biting dissent opined that the claim term "comprising" may possibly be a "weasel" word that overly broadens a patent scope in a simplistic manner.  Judge Michel preferred to sustain the summary judgement on the rationale that Smith had dedicated the method used by Ethicon to the public because Smith had described but not explicitly claimed the extra step.  Thus, the majority affirmation of the open ended use of "comprising" in claim language is clouded by the dissent's insistence that the word does not include a described but unclaimed element.

A patent practitioner should consider including each desired embodiment within the literal scope of at least one claim to avoid this problem.  The law should become more clear next year when the CAFC finishes its en banc review of the Johnson & Johnson Associates Inc. v. R.E. Service Co. case.  In that decision the CAFC is expected to determine whether an embodiment that is described but not claimed in a patent can fall within the doctrine of equivalents or is dedicated to the public.

Dethmers Manufacturing Company, Inc. v. Automatic Equipment Mfg Co.
Decided December 5, 2001
Judge Clevenger with Judges Schall and Dyk; Judge Dyk dissenting in part

*          An applicant for a reissue patent must pay careful attention to procedural detail

            Dethmers lost a patent infringement action against Automatic at the U.S. District Court for the Northern District of Iowa due to summary judgement of patent invalidity.  Judge Mark Bennett held that Dethmers failed to follow correct procedure when it sought a reissued patent at the PTO.  Under the PTO rules at that time, Dethers had to provide a declaration to "specify every difference between the original and reissue claims."  Both parties appealed to the CAFC.

            A majority of the CAFC panel affirmed the summary judgement of invalidity.  The CAFC majority painstakingly reviewed each claim and declared that Dethmers did not follow strict procedure but failed to indicate "every" error for each claim in its reissue declaration.  The PTO as amicus curiae argued that, particularly under Zurko the Supreme Court obligates the CAFC to give substantial judicial deference to the PTO's own interpretation of its regulations.  Dyk adopted this point in a strong dissent.

            This strange case may reflect a trend wherein some judges at the CAFC desire to elevate form over substance in adjudicating patent rights.  This decision is similar in tone to that of Festo, wherein the CAFC showed a greater concern for low cost operation of the marketplace than with inventor's rights.  On the other hand, the severe result seen in this case may not apply to new reissue applications because under the new rules, a reissue declaration must state "at least one error being relied upon as the basis for reissue" and not specific reasons for each claim, as was the case here.

Rhone-Poulenc Agro, S.A. (Aventis) v. DeKalb Genetics Corporation and Monsanto Company
Decided November 19, 2001
Judge Clevenger with Judges Schall and Dyk

*           A contractual obligation to provide research results is violated when important           test results are withheld prior to a commercialization agreement

Rhone-Poulenc Agro ("RPA") and DeKalb entered into a 1992 agreement under which RPA supplied a mutated corn gene for Roundup (TM) resistance to DeKalb in return for DeKalb's promise of providing test results.  DeKalb revealed initial data that showed gene expression in transformed corn but withheld results that showed stable incorporation into a plant genome, which technically is more difficult.  Shortly after obtaining the test results of the unreported yet more "important and exciting milestone" DeKalb negotiated a 1994 agreement wherein RPA granted DeKalb a "world-wide, paid-up right to use" RPA's gene technology.  Later, RPA learned that DeKalb had secretly started an intensive and highly successful corn breeding program prompted by the unreported data, and sued DeKalb at the U.S. District Court for the Middle District of North Carolina.  A jury found that DeKalb had fraudulently induced RPA to enter the 1994 agreement and awarded $65 million in unjust enrichment and punitive damages.  DeKalb appealed, arguing that the evidence for fraud was not strong enough to support the verdict.

The CAFC affirmed.  The court pointed out that "the heart of RPA's case for fraud concern's DeKalb's behavior upon learning of the successful (field test results using RPA's technology)."  The court found that "DeKalb promised to keep RPA informed of test results" at a 1992 meeting and that the companies made periodic contacts in which they discussed results.  The successful 1992 test for example prompted a "quite positive" progress report from DeKalb.  However, DeKalb never informed RPA of the more surprising and wildly successful field test results that followed.  One factor in the jury's decision was the demeanor of DeKalb's chief science contact with RPA, who testified   that, although he continued correspondence with RPA, he did not inform RPA of the successful test results because "that would have required him to write a longer letter."   The jury found a pattern of deceit wherein Dekalb's ongoing candor that "generally" kept RPA informed of test results suddenly stopped when information highly valuable to license negotiations became available.

In this case RPA sued DeKalb on state law fraud charges to rescind a 1994 contract.   Under North Carolina law each element of fraud must be proven by a preponderance of the evidence standard, which is a lower standard than the usual "clear and convincing evidence" standard.  This case shows why a party to a contract must consider which state law may be used to enforce the contract.  The standard of evidence used in this dispute is lower than that used by some states and may have played an important role in deciding which side won.        
 

Rhone-Poulenc Agro, S.A. (Aventis) v. DeKalb Genetics
Corporation v. Monsanto Company
Decided November 19, 2001
Judge Dyk  with Judges Clevenger and Schall

*           A bona fide purchaser of a patent sublicense may keep the license even if the           licensor loses the license right because of fraud

Judge N. Carlton Tilley, Jr. from the U.S. District Court for the Middle District of North Carolina granted summary judgement that Monsanto, a sublicensee did not infringe Rhone-Poulenc's ("RPI's") patent even though Monsanto's licensor Dekalb lost the transferred rights.  RPI convinced the court to rescind RPI's transfer of rights to the first licensee, Dekalb because of Dekalb's fraud against RPI.  However, the court held in favor of the sublicensee, Monsanto, because Monsanto had innocently purchased its sublicense from Dekalb and was entitled to a "bona fide purchaser defense."  RPI appealed to the CAFC.

The CAFC affirmed, and declared that the "bona fide purchaser defense" applies to licensees under federal common law.  The CAFC noted that patent assignments already are covered by federal law (35 USC 261) but that state laws that cover regular contracts such as licenses differ among the states.  Accordingly, without federal common law, an accused infringer could "successfully assert the defense in one state and not in another."  To make licensing principles consistent with assignments the CAFC had accepted a related defense in an earlier (Heidelberg Harris) case.  In that case, an employer obtained an assignment from an employee by fraud, yet the CAFC allowed a licensee of that employer to keep its license because the licensee did not participate in the fraud.  The CAFC stated that although it had not fully "analyzed" the issue before, the CAFC would follow the principle that an innocent sublicensee can keep its license (and sublicensing rights if any) in this situation and "[a]ny argument to the contrary must be addressed to the court sitting in banc."

Contractual rights in patents generally are covered by state law.  This case establishes a federal rule that a licensee or sublicensee may keep a license and a right to sublicense (if any) in the event that the licensor had obtained the original patent right by fraud.  To take advantage of this rule a licensee should 1) pay value for the license and 2) have no actual knowledge of wrong doing by the licensor in obtaining the original patent rights.  A licensee may have (in the CAFC's words) a "close relationship" with the licensor or even own part of the licensor without affecting the right as long as the licensee has no actual notice of the fraud.  In the present case Monsanto owned forty percent of Dekalb when Dekalb committed its fraud to obtain the patent right.

Rexnord Corporation v. The Laitram Corporation and Intralox, Inc.
Decided November 15, 2001
Judge Clevenger with Judges Newman and Dyk

*           An applicant is not required to describe every conceivable and possible future           embodiment of his invention

Rexnord lost a summary judgement motion to Laitram at the U.S. District Court for the Western District of Wisconsin regarding Laitram's accused infringement of Rexnord's patent to a conveyer mechanism.  Judge Barbara Crabb construed the claim term "portion" as limited to separate pieces and determined that Laitram's accused conveyer mechanism does not infringe because of the one piece structure for that mechanism.  Rexnord appealed.

The CAFC construed the term "portion" more broadly and reversed.  This case centered around the use of the word "embodiment" in a patent specification in a non-limiting way to indicate broad claim scope.  The CAFC began its broader interpretation by adopting the dictionary definition of "portion," as meaning both "separable from the whole" and "not separable from the whole."  The patent specification described a "preferred embodiment" of a separate piece structure, consistent with "separable from the whole."  However, the specification also used "embodiment" more expansively to imply that other embodiments (such as not separable from the whole) were contemplated.  Furthermore, the applicant did not disclaim those other embodiments during prosecution.  The CAFC pointed out that "[If} structural claims were to be limited to devices operated precisely as a specification-described embodiment is operated, there would be no need for claims.  Nor could an applicant, regardless of the prior art, claim more broadly than that embodiment."  In a related point the court declared that a rejection during prosecution arose from claim "inaccuracy" rather than overbreadth and therefore did not narrow claim meaning.  The court appears to have singled out a type of file history that may limit claim scope under the doctrine of equivalents but does not limit literal claim interpretation.

A patent drafter should describe examples and alternative features of an invention as mere "embodiments" to maintain broad claim meaning.

Space Systems/Loral, Inc. v. Lockheed Martin Corporation
Decided November 13, 2001
Judge Newman with Judges Michel and Schall

*           An invention conception without reduction to practice or an enabling    description is not ready for patenting and cannot support an on-sale bar

Space sued Lockheed at the U.S. District Court for the Northern District of California for infringing patent claims to an improved method of correcting satellite orbits.  Judge Susan Illston summarily held Space's patent invalid over an on sale bar. The judge found that Space had offered to sell its invention more than one year before filing the patent application because Space proposed its conceived invention to a French client along with a cost estimate for "developing" the improved system at the early date.  Space unsuccessfully argued that the invention was not enabled at the early alleged sale date and appealed.

The CAFC held that Judge Illston misapplied the law of on sale and reversed.  The CAFC stressed that conception alone is not sufficient completion for an on sale bar.  The court stated that "when development and verification are needed in order to prepare a patent application that complies with 112, the invention is not ready for patenting."  The court on the other hand pointed out that "the fact that a concept is eventually shown to be workable does not retrospectively convert the concept into one that was 'ready for patenting' at the time of conception." 

The CAFC did not state clearly whether the invention really needed further work before filing or whether a later discovery was needed to enable practice of the invention.  It appears that an inventor's subjective belief in the working of an invention is necessary for the invention to be "ready for patenting" for an on sale bar.  This focus on the inventor's subjective belief is inconsistent with the ability of an inventor to file a mere conception without knowing if the invention really works.  Later, during patent prosecution an inventor can test his idea and obtain evidence, as is sometimes done in the biotechnology field.  The U.S. PTO will accept later obtained data as evidence of enablement yet the inventor secures an earlier invention date.  Regardless of the field, it is helpful to file proposed research plans, preferably in one or more provisional applications as soon as possible to obtain an early filing date.  Being first to file provides advantages, even in the U.S. first to invent system.

Novartis Corporation v. Ben Venue Laboratories, Inc. and Bedford Laboratories
Decided November 7, 2001
Judge Clevenger with Judges Friedman and Schall

*           A computer model used in litigation without a factual basis is mere theoretical speculation and does not create a genuine issue of fact to block summary judgement

Novartis sued Ben in the U.S. District Court for the District of New Jersey for infringing patent claims to a drug that is complexed with five water molecules in a stable powder.  Ben prompted the suit by filing a New Drug Application with the FDA for its own formulation of the drug dissolved in water.  Judge William G. Bassler rejected Novartis's argument that Ben's manufacturing process creates the claimed complex as a transient intermediate and granted summary judgement of no-infringement.  Novartis appealed to the CAFC.

The CAFC affirmed after dismissing a hypothetical computer model presented by Norvartis's expert to show that the infringing intermediate should exist in Ben's process.  Unfortunately for Novartis the CAFC found that "the record is nearly devoid of any indication of what (the expert) did base his model on (and) [i]t is this deficiency that is fatal to Novartis's case."  The CAFC commented that "[s]ummary judgement is a trap for the unwary plaintiff...(because) a patentee may be obliged to present his or her evidence of infringement early in the litigation process."  Thus, because Novartis failed to provide evidence for its theory early in the case it lost on summary judgement.

Litigants should be careful that any models used be supported by fact.  A court may treat an unsubstantiated model as a self serving conclusion that fails to advance an argument.

Aptix Corporation et al. v. Quickturn Design Systems, Inc.
Decided November 5, 2001
Judge Rader with Judges Mayer and Linn, Judge Mayer dissents-in-part

*           Notebook evidence fraud from an inventor during litigation does not make a   patent unenforceable; notebooks may be tested during litigation

Aptix sued Quickturn for patent infringement at the U.S. District Court for the Northern District of California.  Judge William Alsup declared Aptix's patent unenforceable because Aptix submitted false notebook evidence during trial.  Proof of the fraud included forensic evidence that the ink Aptix used to document its invention was manufactured 5 years after the alleged notebook creation date.  Aptix appealed to the CAFC.

The CAFC agreed with the district court that Aptix engaged in "extreme litigation misconduct" that warranted dismissal of the case and "full compensation of Quickturn's reasonable attorney fees and costs."  However, the majority opinion vacated the unenforceability judgement because "litigation misconduct does not affect the viability of the property right itself" and "only provides a bar to relief in the case at hand."  Although Aptix's notebook fraud was based on showing an incorrect early priority date, the litigation record showed no evidence of misconduct at the PTO during patent prosecution and the patent right was not eliminated.

Chief Judge Mayer dissented and would have affirmed the unenforceability holding because "the duty of candor to the court is entitled to at least as much honor as that to the PTO."  Judge Meyer stated that "[t]here is no limit inherent in the doctrine of unclean hands" and, (citing the Supreme Court) "[t]he patent is a privilege."  This interesting split in the court reflects how differently the judges may respect patent rights.  Mayer seems to argue that a patent grant is more of a privilege bestowed by a government official upon a deserving citizen that can be taken away by subsequent bad behavior, than an obligation by the government to protect a basic property right.

Superior Fireplace Company v. The Majestic Products Co. and Vermont Castings, Inc.
Decided November 1, 2001
Judge Linn with Judges Mayer and Dyk, Dyk Dissenting

*           A patent claim cannot be broadened by a certificate of correction under 35    U.S.C. 255 unless the error is evident from the public record

Superior sued Majestic at the U.S. District Court for the Central District of California for infringing Superior's patent claims to a gas log fireplace comprising a firebox with "rear walls."  After Majestic pointed out that its product had only one rear wall, Superior asked for and received from the U.S. PTO a certificate of correction that corrected the term "rear walls" to "rear wall."  Majestic convinced judge Lourdes Baird that the PTO erred in allowing the correction.  The judge thus granted summary judgement that the certificate was invalid and that Majestic's single walled fireplace did not infringe.  Superior appealed.

The CAFC affirmed in a decision that limits the use of the correction statute 35 U.S.C. 255 when broadening claims to errors that are obvious from the prosecution history.  The CAFC declared that as a matter of law, the correction of a "mistake of a clerical or typographical nature" under 35 U.S.C. 255 cannot broaden the claims if not supported by the public record.  The CAFC emphasized "Congress' concern for public notice and for protecting the public from the unanticipated broadening of a claim."  The opinion recited the "public notice" and "public record" function of the prosecution history sixteen times in explaining its rationale for limiting this statute.  This concern with public convenience is similar to that seen in Festo wherein the CAFC limited inventor's rights through the court's greater concern with marketplace efficiency and public convenience than with more abstract concerns such as justice or rights.

Judge Dyk, in a well thought out dissent, argued that the court should not "read into the statute an implicit, extra-textual requirement" for policy reasons.  Judge Dyk also noted that Congress intended mistakes that are "clearly disclosed by the records of the Office" for corrections under 35 U.S.C. 254 but omitted this from 35 U.S.C. 255 and that "the Supreme Court has made clear that a section that omits language appearing in a companion section should not be construed to include the language."

To prevent problems under the new restricted law it is extremely important to carefully review allowed claims and file a section 312 amendment, (if before issuance) or file a correction immediately after issuance if an error is found.  If the correction would broaden a claim and was not clear from the record then a reissue should be filed.

Scaltech, Inc. v. Retec/Tetra, L.L.C.
Decided October 23, 2001
Judge Dyk with Judges Rader and Bryson

*           An offer to sell may create an on sale bar even in the absence of reduction     to practice or evidence of conception

Scaltech sued Retec at the U.S. District Court for the District of Texas for infringing patent claims to a process for eliminating sludge waste at petroleum refineries by using centrifugation to remove residual oil.  The claimed centrifugation process leaves a high content of small size particles in the removed component.  Judge Kenneth Hoyt granted summary judgement of invalidity in view of Scaltech's offer to sell the invention more than one year prior to filing its patent application.  Scaltech argued that the invention was not complete when it offered to sell.  At that early time Scaltech had not reduced the invention to practice and had not conceived all elements of the invention as recited in the claims, such as a small size range of particles in the residual solid.  Thus, the invention had not been "ready for patenting" under the Pfaff on sale bar standard.  Scaltech's arguments were unsuccessful and Scaltech appealed to the CAFC.

The CAFC affirmed because the recited parameters of high solids content and small particle size were inherent in the process and "appreciation of the invention is not a requirement to trigger the statutory bar."  The CAFC further pointed out that "where an invention is on sale, conception is not required to establish reduction to practice" and that "[t]he sale of the [invention] obviates any need for inquiry into conception."

An on sale bar may arise from any commercialization of any aspect of an invention, even when the inventor is not sure whether he has a patentable invention, as may have happened here.  An inventor should file a provisional application before any commercialization efforts with another company, and can worry about specific claim language later when filing a follow up utility application.

Special Devices, Inc., v. OEA, INC.
Decided October 26, 2001
Judge Michel with Judges Friedman and Lourie

*           Procurement from a supplier for commercial stockpiling is a prior sale
            under 102(b)

Special sued OEA for declaratory judgement of patent invalidity at the U.S. District Court for the Central District of California after receiving threatening letters from OEA regarding infringement of OEA's patent.  Judge Dickran Tevrizian granted Special summary judgement of invalidity because OEA had contracted with a supplier to mass produce the invention more than one year before OEA filed its patent application.  OEA appealed to the CAFC.

The CAFC affirmed patent invalidity in view of the prior sale because OEA's purchase was for a commerical purpose.  The CAFC declared that "no 'supplier' exception exists for the on-sale bar."  The court emphasized that "the primary policy of the on-sale bar" is to encourage "an inventor to enter the patent system promptly."

The lesson from this case is that any contract manufacture that is not clearly experimental may be deemed a sale under 102(b).  Under the previous "totality of the circumstances" test that was abolished in the Pfaff decision, a sale from a manufacturer to an inventor sometimes did not bar patent rights even if conducted more than one year before the inventor filed a patent application.  Under the newer "ready for patenting" Pfaff standard a patentee has to be more careful because any commercialization activity, even with a very close company or contract manufacturer may be a prior sale.

J & M Corporation, John Lazzeroni, and Melinda Carevich v. Harley Davidson, Inc., and Radio Sound, Inc.
Decided November 2, 2001
Judge Archer with Judges Gajarsa and Archer

*           Prosecution history and structures described in a patent specification limit     the       scope of a means plus function (35 USC 112 para 6) claim

J & M corporation sued Harley at the District Court for the District of Arizona for infringing patent claims to a motorcycle accessory having both a microphone mount and a plug mount.  Harley had purchased its microphone accessory from J & M but switched to a new supplier that made a different version with both mounts in one clamp.  Judge Robert Broomfield held summary judgement of no infringement because J & M specifically disclaimed accessories having both mounts in a simple clamp during patent prosecution.  J & M appealed the summary judgement.

The CAFC agreed with Harley that J & M's claims are limited to the dual clamp structure.  The court pointed out that "the literal scope of a properly construed means-plus-function limitation .....is sharply limited to the structure disclosed in the specification and its equivalents."  Further, the equivalents are interpreted "in light of the disclosure of the invention in the specification, as a whole, as well as the prosecution history."  Ample prosecution history in this case indicated that J & M gave up the single clamp design during amendments at the patent office.  After giving up that design, J & M filed and obtained broad means plus function claims, which J & M tried to assert broadly during its litigation.  The courts however, rejected J & M's desired broad claim interpretation because of the file history.

This is another example of how prosecution history statements narrow both literal claim meaning and claim scope under the doctrine of equivalents.  A patent applicant cannot cancel one type of claim and obtain a different type (for ex. means plus function) without limiting the scope of the new claim with respect to the cancelled claim elements.

Brasseler, U.S.A. I, L.P., v. Stryker Sales Corporation and Stryker Corporation
Decided October 9, 2001
Judge Gajarsa with Judges Clevenger and Plager

*          A patent attorney having notice of a possible bar to patentability must investigate            and disclose appropriate facts to the PTO

DSM developed saw blades for Brassler and then sold the blades to Brassler.  Just more than 12 months after the sale, Brassler instructed its patent attorney to "immediately" file a patent application covering the blades to avoid a potential on-sale bar.  The attorney did not inquire into the facts of the on sale bar but filed the application within three days.  Later, Brasseler sued Stryker for infringing a patent that issued from the application at the U.S. District Court for the Southern District of Georgia.  Judge B. Avant Edenfield granted summary judgement of invalidity because of the prior sale and the CAFC affirmed in a 1998 decision.  The CAFC remanded for the district court to determine whether the case was exceptional, requiring Brassler to pay Stryker's attorney's fees.  The district court on remand found that the inventors and their attorneys engaged in inequitable conduct, and awarded attorney's fees to Stryker.  Brasseler appealed again to the CAFC.

 The CAFC affirmed the district court's holdings of inequitable conduct and award of attorney's fees to the defendant.  The CAFC rejected Brassler's arguments that a sale between companies owned by or employing individual inventors does not create an on-sale bar.  Instead, the CAFC agreed with the district court that both a patent attorney and his client were expected to know and follow the established law to the contrary.  Further, "Brasseler's attorneys were obligated to conduct an investigation into the facts surrounding the sale and to disclose any information reasonably believed to be material" because "inventors cannot 'empty-head' their own patent counsel, and patent counsel cannot shirk basic, 102(b) factual inquiry requirements." 

This decision explores the point where the duty to disclose begins.  Specifically, "no duty to inquire arises unless counsel is on notice of the likelihood that specific, relevant, material information exists and should be disclosed" and "[t]here is no need for an attorney to pursue a fishing expedition to obtain information."  However, a minimum communication from a client that merely suggests the existence of material information triggers an obligation to inquire further because  the attorney "cannot ignore that notice in an effort to avoid his or her duty to disclose."  To guard against this problem a patent counsel should ask a client to respond in writing whether potential (as opposed to realized) material information exists that may affect patentability.  Patent counsel are obligated to investigate every questionable material fact, without relying on the client's judgement, particularly in close cases such as this where an application was filed near a 12 month bar date.

Mylan Pharmaceuticals, Inc. v. Tommy G. Thompson, U.S. FDA et al.
Decided October 12, 2001
Judge Mayer with Judges Newman and Michel

*          A generic drug maker cannot force a drug manufacturer to delist a patent           registered with the FDA as covering a pharmaceutical

According to the 1984 Hatch-Waxman amendments to the patent code a pioneer company that invents a pharmaceutical lists any patent that claims the pharmaceutical in its New Drug Application.  The FDA publishes the patent number in its "orange book."  A pharmaceutical manufacturer that desires to market a generic version of the pharmaceutical may submit an Abbreviated New Drug Application ("ANDA") to the FDA.  The ANDA includes an assertion that either 1) no relevant patents have been listed with the FDA; 2) the pioneer drug maker's patent has expired; 3) the patent will expire and the generic maker will not market the generic until after expiry; or 4) any such patent by the pioneer company is invalid or will not be infringed by the manufacture, use, or sale of the proposed new generic.  Within 45 days of an ANDA filing by a generic company under paragraph 4, the pioneer drug maker may sue the generic company.  This registration system is a trade off between providing patent term extensions to a drug pioneer and allowing generics to utilize clinical data from the pioneer to market a copy as soon as the pioneering company's patent(s) have expired. 

In this case Mylan filed an ANDA that asserts paragraph 3, and prepared to market its generic product immediately after Bristol's buspirone drug patent expired.  Unfortunately for Mylan however, 11 hours before expiration of Bristol's buspirone patent, the U.S. PTO issued to Bristol a new patent to a buspirone metabolite (and arguably, a new method of using buspirone), which Bristol immediately registered with the FDA, thus blocking Mylan's generic that Mylan expected to sell the next day.  After a fruitless negotiation with the FDA Mylan did not file a new/amended ANDA asserting (under paragraph 4) that the new patent is invalid or would not be infringed by the generic product.  Instead, Mylan filed a declaratory judgement action at the U.S. District Court for the District of Columbia asking the court to order Bristol to delist its second patent at the FDA and to order the FDA to grant final approval of Mylan's ANDA for the generic product.  Judge Ricardo granted the injunction and Bristol appealed.

The CAFC reversed the injunction because the legislation that created the patent listing system at the FDA contains "creates no private right of action" for a challenger to a listed patent.  The proper course was for Mylan to pursue direct contacts with the FDA and explore the error during infringement litigation.

Pioneer drug developers and generic drug makers utilize patent lists at the FDA in a high stakes registration  system for determining when and whether a generic form of a drug may be marketed.  One issue that may arise is whether a listed patent really covers the drug and/or method of making the drug.  While noting that Congress may provide new legislation on this point, this case establishes that the issue is resolved by first communicating a concern with the FDA, as Mylan did here.  Then, if still unsettled, the issue is determined finally during regular patent litigation between the parties.  Litigation between a pioneer drug maker patentee and a generic company often begins by the pioneer company filing suit against the generic maker upon notice of the ANDA filing by the generic company.

Ballard Medical Products v. Allegiance Healthcare Corp and Sorenson Critical Care, Inc.
Decided October 9, 2001

*          Prosecution history may be used as a claim construction tool

Ballard sued Allegiance at the U.S. District Court for the District of Utah for infringing its patents to lung catheters.  Judge Bruce Jenkins awarded Allegiance summary judgement of non-infringement because the structure of the accused product differed from the structure in the patent specification that corresponds to Ballard's means plus function claims.  Ballard appealed.

The CAFC affirmed, in a decision that reviewed how statements made during prosecution may be used to narrow the meaning of patent claims.  The CAFC distinguished "prosecution history estoppel (which) does not apply to the determination of literal claim scope" from prosecution history that is used as a "claim construction tool."  In the latter case, a claim may be narrowed over scope that has been "disclaimed" during prosecution consistent with the public notice function of prosecution history.  Although the district court improperly cited the term "prosecution history estoppel" when that court narrowed the claims, the court's interpretation in view of the prosecution history was acceptable.  A second interesting issue was Ballard's argument that the court improperly failed to conduct a detailed limitation by limitation analysis of claims, as required under Markman.  The CAFC disagreed and pointed out that Markman does not require such a complete analysis, because "if the district court considers one issue to be dispositive, the court may cut to the heart of the matter and need not exhaustively discuss all the other issues."

A court often narrowly construes claims from statements made during patent application prosecution.  Because of this use of prosecution history a patent prosecutor should refer only to specific amended claims when arguing with a patent examiner.  Ballard's inventor referred more broadly to "the invention" and to "the claims" in his arguments at the PTO.  As a result, his statements narrowed all of the claims, whether amended or not.  Another result from this case was that the inventor's statements during prosecution of one patent application narrowed the meaning of claims from another application because both applications shared the same specification.  A patent prosecutor should consider how arguments at the PTO may alter the meaning of claims from other patent applications and even issued patents when responding to an office action.

Xerox Corporation v. 3Com Corporation, U.S. Robotics Corporation, U.S. Robotics Access Corp., and Palm Computing, Inc.
Decided October 5, 2001

*          Software patent claims may be difficult to interpret and require clear definitions for support

Xerox sued 3Com for infringing patent claims to a system of single stroke symbols for computer recognized handwriting at the U.S. District Court for the Western District of New York.  Judge Michael Telesca granted 3Com summary judgement of non-infringement because the accused software does not employ "spatial independence," allow for "definitive recognition," or "graphically separate" symbols to make them "unistroke" as claimed.  Xerox appealed.

            The CAFC reversed the non-infringement holding because the district court did not properly apply its claim construction to the accused software.  While agreeing with the district court's claim construction the CAFC disagreed with the final result because the district court did not understand clearly whether 3Com's accused software had the claimed features.  The CAFC declared that the district court (for example) "should have considered (pen stroke) direction in its determination of what constitutes graphic similarity" and should have considered "the difference between definitive recognition of a character and definitive recognition of a symbol."

            A theme in this and other software litigation appears to be the inability of judges to understand the technology and the peculiar ways that common words are used to describe and claim that technology.  A software patent applicant should consider providing a complete and detailed (with examples) description of every claim term because of the verbal ambiguity in such terms as "definite recognition," unistroke symbols," and "spatial independence."  Until this field develops unambiguous and widely recognized terminology of its own, a patent applicant should consider acting as her own lexicographer to prevent misunderstandings during patent enforcement.

Asyst Technologies, Inc. v. Empak, Inc. et al.
Decided October 10, 2001
Judge Bryson with Judges Newman and Archer

*          A structure for a means plus function claim must actually perform the recited      function and not merely enable another structure to operate as intended

            Asyst sued Empak at the U.S. District Court for the Northern District of California for infringing claims for semiconductor container systems that have a "means for sensing" when a container of semiconductors is at a processing station.  Judge Jeremy Fogel decided that the corresponding structure recited in the patent specification was a "communication means" that Empak's product lacked.  Accordingly the court granted summary judgement that Empak's device does not infringe.  Asyst appealed.

            The CAFC determined that the district court interpreted the structure for the "sensing" means incorrectly and reversed.  The CAFC held that the "recited function is 'sensing,' not initiating a sensing protocol."  Thus, a "structure that initiates the sensing protocol" (such as communication means) does not correspond to a structure for the recited function.  The specification clearly described an initiating structure to connect a device but the actual sensor (possibly a computer) that corresponds to the claimed function of sensing was not clear.  Because the district court did not refer to a structure that actually senses, but rather a communication conduit, the case had to be remanded for further finding.

            This is another example where very common and simple words with insufficient examples are used to describe a complex function of an invention.  The courts could not interpret the claims by matching structures with recited functions easily.  A patent specification should explain a structure for each function (with alternative examples) clearly and specifically to prevent this problem.

Hilgraeve Corporation v. Symantec Corporation
Decided September 19, 2001
Judge Dyk with Judges Rader and Plager

*          Tests of an accused device under unusual conditions may not relate to    infringement

Hilgraeve sued Symantec at the U.S. District Court for the Eastern District of Michigan for infringing its patent claims to anti virus software that screens for a virus "prior to storage on the destination storage medium."  Judge Paul Gadola held on summary judgement that Symantec's software did not infringe.  Symantec persuaded the judge that incoming files could be "accessible to the operating system and other programs - and therefore stored" before scanning for viruses.  Symantec demonstrated this non-infringement condition to the judge by certain tricks such as turning the computer off immediately after downloading a file but before the virus software could work, and then turning the computer back on to find the virus.  The judge found no infringement based on these operating conditions and Hilgraeve appealed.

The CAFC reversed the summary judgement of non-infringement and declared that further investigation by the court was warranted because the experts disagreed on whether the antivirus program works on "stored" files.  The CAFC explained that "tests of an accused device under unusual conditions are not necessarily relevant to an infringement analysis."  The court noted that "an accused device may be found to infringe if it is reasonably capable of satisfying the claim limitations, even though it may also be capable of non-infringing modes of operation." 

One message from this case is that infringement through use must be proven by what the CAFC repeatedly termed a "reasonably capable" use.  In this instance, it was not "reasonable" for Symantec to turn off a computer while running its software program to demonstrate that the software does not infringe a software patent claim.

Loral Fairchild Corporation v. Matsushita Electrical Industrial Company Ltd. et al.
Decided September 21, 2001
Judge Michel with Judges Mayer and Newman

*          Reduction to practice is complete when an invention has been shown to work for           its intended purpose

Loral sued Sony, Toshiba, NEC and others in the U.S. District Court for the Eastern District of New York for infringing patent claims for CCDs (charge coupled devices) used in cameras.  After a first trial against Sony, Judge Rader, who sat in the district court by designation, threw out a jury infringement verdict and granted judgement as a matter of law that Sony did not infringe under the doctrine of equivalents.  Loral continued its suit against Toshiba and NEC.  The district court then issued summary judgement of invalidity over a prior art reference that described the CCD invention two months before the patent application date.  Loral appealed.

The critical issue in this case was whether new evidence from Loral in the second part of the case raised a question (which would block summary judgement) as to whether Loral's reduction to practice date occurred before the publication date of the prior art.  The new evidence was an affidavit from an employee who recalled that the claimed process was optimized by gradual changes to the CCD manufacturing process prior to the reference date.  The affidavit stated that the employee "produced working devices" and "had initial production-quality devices" at the earlier date.  The CAFC majority opinion pointed out that the district court failed to address the evidence of reduction to practice in this affidavit.  The CAFC decided that sufficient corroboration of the affidavit arose from testimony of another worker that Loral had "received custom-fabricated lithographic masks necessary for practicing the invention" at the earlier time.  This is because under the "rule of reason" the corroborative evidence does not need to be "documentary" evidence but can be mere testimony by another.  Because the district court incorrectly required "documentary" corroboration of the testimony the CAFC reversed the summary judgement of invalidity and remanded to the district court.

Judge Newman concurred in a separate opinion because he felt that the majority decision analyzed unneeded corroborative evidence.  Judge Newman stated "[l]et us not add uncertainties to this law" and emphasized that a prior art reference is antedated by conception evidence.  That is, a mere inventor's affidavit suffices without corroboration, unlike the evidence needed to prove reduction to practice.

The quality of evidence required to block a summary judgement motion may be important during litigation.  One tactic is to present disputed fact(s) that can endure summary judgement motions by the other side and allow a party to proceed to the trial stage of litigation.    

Bio-Technology General Corp. and Bio-Technology General (Israel) Ltd. v. Genentech, Inc.
Decided September 27, 2001

*          When science is uncertain a jury may review alternative theories and determine which theory to use for making final decisions on invalidity

BTG filed a declaratory judgement action against Genentech at the U.S. District Court for the Southern District of New York.  BTG asked the court to hold invalid Genentech's patent claims to a method of producing human growth hormone and requested relief from antitrust violations.  BTG asserted that the patent claim, which recites formation of mature hormone without added protein, was not enabled because Genentech's patent only described how to make hormone having an extra amino acid.  In an earlier litigation between Genentech and Novo Nordisk the CAFC had construed the claim to mean both pure protein and protein having the additional amino acid.  A jury held that the asserted claim was enabled because it included both proteins, one of which was made by the patentee.  Nevertheless, Judge Thomas Griesa entered judgement as a matter of law that the claim is invalid for lack of enablement because "no reasonable" jury could have made that finding.  Genentech appealed this judgement and BTG appealed the court's dismissal of BTG's antitrust claim.

The CAFC reversed the district court's vacating of the jury's decision because "trial testimony showed reasonable scientists differing as to whether mature human growth hormone could be produced" by the procedures in the specification.  In its decision, the CAFC emphasized that "the weighing of conflicting evidence is a jury function" and that the jury had reviewed evidence on both sides of the issue, including BTG's statements to the Food and Drug Administration about the protein.  Thus, the jury finding was supported by "substantial evidence" and should not have been overturned. 

One problem was that the CAFC previously had construed the claim to mean both protein types but the district court did not follow that construction.  The district court's instruction to the jury interpreted the claim to mean only the natural protein.  This logical inconsistency allowed the court to declare the claim non-enabled based on the patent showing (arguably) only synthesis of the protein with the extra amino acid.  Thus, the district court blended its confusion about claim meaning with the enablement issue and ended up throwing out the jury verdict as a result.

            As we often see in patent litigation, claim construction by the CAFC dominated the final result.  In this case, the jury's decision was more consistent with the CAFC's claim construction than it was with the apparent interpretation by the district court judge.  The CAFC resolved the difference by upholding the jury decision. 

The Toro Comp. v. White Consolidated Industries, Inc. and WCI Outdoor Products, Inc.
Decided September 24, 2001
Judge Rader with Judges Newman and Linn

*          A functional description in a specification does not limit the scope of a claim that
            recites only structural features

On remand from the CAFC in 1999 the U.S. District Court for the District of Minnesota granted summary judgement that White does not infringe Toro's vacuum cleaner patent claims under the doctrine of equivalents.  Toro's patent claims recite a removable air inlet cover having a "means for increasing the (air) pressure," which includes a ring constriction to inhibit air flow.  White's accused vacuum cleaner includes an air outlet ring that separates from the cover, and thus was found to not literally infringe.  Judge David Doty decided that "a critical function of the air inlet cover...is to automatically insert and remove the restriction ring" and held no infringement under the doctrine of equivalents because White's ring is not attached to the cover and does not carry out this separate function.  Toro appealed.

The CAFC vacated and remanded for trial because it was improper to "import into the claim a function from the specification, particularly when the claim recites only purely structural limitations."  The CAFC explained that the function of the automatic ring placement is not "a key objective of this invention."  Therefore the district court was obligated to determine whether White's machine performs substantially the same overall function as the cover claimed in Toro's patent and should have conducted a trial.

The CAFC pointed out that claim scope should not be limited by a function of an invention that is mentioned briefly in the specification.  To help prevent overzealous courts from impermissibly imparting narrow functional limitations into patent claims a patent drafter may consider describing alternative functions of different embodiments.

EMI Group North America, Inc. v. Cypress Semiconductor Corporation
Decided September 21, 2001
Judge Rader with Judges  Plager and Dyk

*          A claimed mechanism may be inherent in prior art even if a skilled worker would
            not have understood the mechanism

EMI sued Cypress in the U.S. District Court for the District of Delaware for infringing claims to a method of making tiny fuses within silicon chips.  The claims recite "inducing an explosion" at the fused junctions after the "layered interconnect structure is exposed to ...laser light" due to gas build up from laser heating.  However, EMI never observed such explosions.  A jury listened to expert testimony and found that the laser caused explosions were impossible.  The jury also found that if the explosions were possible such explosions should have existed in prior art devices and were an inherent property of those prior art devices.  After trial, EMI argued that the jury could not possibly make these two inconsistent findings.  Judge Roderick McKelvie disagreed that the jury verdicts were inconsistent.  The judge however, decided that the explosion phenomenon could not exist inherently in the prior art because a skilled artisan could not understand that phenomenon.  Based on this reasoning, the court granted in part EMI's motion for judgement as a matter of law that the patents are not invalid on prior art grounds because inherency was not possible.  EMI appealed.

The CAFC upheld most of the district court's holdings but disagreed that extrinsic evidence for inherency would have to be "recognized by persons of ordinary skill" and reversed the "not invalid" holdings.  The CAFC based its reasoning on the fact that a skilled artisan "does not need to recognize that a method or structure behaves according to a law of nature in order to fully and effectively practice the method or structure." 

An applicant should not rely on claims that recite an unclear or unproven science to avoid the difficulties seen in this case.  The CAFC pointed out in this context that any limitation of a claim that appears scientifically impossible will make the claim invalid.

The Dow Chemical Company v. Astro-Valcour, Inc.
Decided September 28, 2001
Judge Dyk with Judges Michel and Bryson

*          Subjective beliefs about inventorship do not determine inventorship under 102(g)

Dow sued Astro for infringing claims to plastic foams and methods of their manufacture that utilize isobutane blowing agents, despite the fact that Astro merely was practicing a process that it licensed from a Japanese company.  The Japanese company had filed its own application in Japan before Dow and Astro was the first to use that overseas technology in the U.S.  Judge David Hurd of the U.S. District Court for the Northern District of New York held on summary judgement that certain of Dow's claims were invalid on 102(g) prior invention grounds due to Astro's earlier use under its Japanese license.  Dow appealed to the CAFC and argued that Astro could not rely on invalidity under 102(g) "because no one at (Astro) qualifies as an 'inventor' under 102(g), since no one at AVI believed he invented anything" during the relevant time period.

The CAFC affirmed the invalidity of Dow's patent claims on 102(g) grounds because AVI had "manufactured a physical embodiment of the (Japanese) invention" and because conception or reduction to practice only required recognition or appreciation of the technical result.  Thus, AVI's employees had sufficient conception for their 102(g) prior invention because they "immediately appreciated what they had made, and indeed its significance" at the earlier date, even though they were merely following directions from their Japanese licensor.

An interesting twist of this case was that a person could be an inventor even if that person was merely following a recipe and did not believe himself to be an inventor.  No anticipatory prior art existed in the U.S. when Astro first started practicing its imported invention and thus, Astro's first use was deemed inventive under 102(g).  A larger point is that conception of an invention is an objective determination.  The personal feelings or belief of the inventor may not play a role in this determination.

George Pieczenik and I.C. Technologies America, Inc. v. Dyax Corporation
Decided September 17, 2001
Judge Bryson with Judges Michel and Dyk

*          Mere existence of a patent license or other contract with a New York corporation
            does not establish personal jurisdiction needed to sue in a New York court

Dyax, a non-N.Y. company executed a contact with Pall, a N.Y. corporation to evaluate a phage (bacterial virus) made by a patented process in Massachusetts.  As a separate alleged infringing act, Dyax agreed to license its patents to Ortho, another New York company.   Prompted by the two acts, Pieczenik sued Dyax in the U.S. District Court for the Southern District of New York for direct infringement and induced infringement, respectively, of its patents for preparing phage.  Judge Harold Baer, Jr. held that neither of Dyax's activities was substantial enough for a New York court to exercise personal jurisdiction over Dyax.  Dyax's New York business was not continuous and systematic and none of Dyax's other contacts with New York established a "fair measure of permanence and continuity" that is required by the "doing business" test of New York's long arm statute.  Pieczenik appealed.

The CAFC affirmed.  The CAFC reviewed several factors that determine whether a contractual relationship provides personal jurisdiction to allows a New York party to sue a non resident in New York.  These factors include (1) whether there is an ongoing relationship between the parties; (2) whether the contract was negotiated or executed in New York; (3) the extent of the defendant's visits to New York in connection with the contract;  (4) whether the contract has a choice of law provision that identifies New York as a forum for adjudicating disputes; and (5) whether the contract requires the defendent to provide goods and services in New York or send notices and payments into New York.  Dyax's activities did not meet these factors.  The only asserted contact with New York pertaining to the induced infringement claims was Dyax's license with Ortho, which has a principal place of business in New York.

Every state has its own rules that provide a court jurisdiction over a defendent.  The five factors used by New York are representative and may be considered in deciding how to avoid or facilitate personal jurisdiction based on acts such as negotiating a license.  When preparing a contract (item 4), it is important to include a choice of law and forum clause for handling disputes.  A small company that has little or no contacts with a state may consider the other factors to avoid becoming subject to suit in that other state based on contacts with the state.

Exxon Research and Engineering Company v. the United States
Decided September 19, 2001
Judge Bryson with Judges Mayer and Lourie

*          A claim is not indefinite just because some experimentation is necessary to determine the claim's scope

 

Exxon sued the U.S. at the U.S. Court of Federal Claims for authorizing subcontractors of the Department of Energy to use Exxon's patented method for converting natural gas to liquid hydrocarbon.  Two of Exxon's patents recite methods of using a catalyst "for a period sufficient to increase substantially the initial catalyst activity."  Judge Edward Damich summarily found Exxon's patent invalid on indefiniteness grounds because the terms "for a period sufficient" and "to increase substantially" were not clear.  Exxon appealed.

The CAFC reversed the invalidity judgement and remanded.  The CAFC called this a "close case" and reviewed several good arguments on each side of the indefiniteness issue.  The CAFC quoted a Supreme Court case (United Carbon, 1942), which emphasized the danger of indefiniteness as "[a] zone of uncertainty which enterprise and experimentation may enter only at the risk of infringement claims would discourage invention only a little less than unequivocal foreclosure of the field."  The CAFC admitted however that if the task of claim construction were "formidable and the conclusion may be one over which reasonable persons will disagree" a claim will be held "sufficiently clear to avoid invalidity on indefiniteness grounds."  The CAFC held that the claim terms met the indefiniteness requirement because with some "minor experimentation," the unclear claimed limits could be determined by a worker in the field.

A dispositive issue in determining indefiniteness often is whether the patent specification teaches a convenient method to measure lower and upper limits of a claimed variable to achieve a particular result.  To avoid ambiguity that might tempt a court to find a patent invalid for indefiniteness, a patent applicant should provide detailed methods for measuring each claim limit.

Roger W. Brown, Ph.D. v. 3M et. al.
Decided September 18, 2001
Judge Newman with Judges Mayer and Clevenger

*          Recitation of the word "or" in a compound claim may create ambiguity

            Brown sued 3M at the U.S. District Court for the District of Arizona for infringing his patent claims to a device for fixing the year 2000 computer bug.  Judge Paul Rosenblatt ruled summarily that Brown's patent was anticipated by an earlier U.S. patent (the '836 patent).  The '836 patent described a similar fix that works only for conversion of two-digit year numbers.  Brown's patent on the other hand claims a device that creates a database file with data "represented by at least one of two-digit, three-digit, or four digit year-date representations."  The district court construed Brown's claim term "or" to mean "any combination of two-, three-, and four-digit date-data."  The broad definition covered the '836 patent, prompting the court to hold Brown's patent invalid over the '836 patent.  Brown appealed.

            The CAFC in a majority opinion affirmed the invalidity ruling because the asserted claim "is written in the alternative, and as written would be literally infringed" by practice of the earlier '836 patent.  Chief Judge Mayer dissented and argued that he would reverse because "the court errs by reading the claim term 'or' exclusively."  The dissent argued that the claim should be read to mean that "the mechanism always must have the capacity to convert all of the possible data sets into two-digit year-date data representations."  Thus Judge Mayer would have reversed because the prior art did not disclose each and every limitation (i.e. 3, 4 digit dates) of the claim.

            The word "or" has two meanings.  A practitioner should state clearly which meaning is intended or either avoid reciting "or" when drafting and prosecuting patent claims.

Advanced Cardiovascular Systems, Inc. v. Medtronic, Inc.
Decided September 10, 2001
Judge Linn with Judges Bryson and Gajarsa

*          A district court has discretion to increase a jury award based on conduct of
          the litigants and of their counsel

            Advanced sued Medtronic at the U.S. District Court for the Northern District of California for infringing a patent to a balloon dilation catheter for opening arteries.  This case was very complicated and aired many issues.  Judge D. Lowell Jensen held on summary judgement that a claim was not invalid, not unenforceable and infringed.  A jury found Medtronic's infringement willful and the court on a post trial motion enhanced the jury damages award by 30%.

            Medtronic appealed many issues and the CAFC affirmed all.  An interesting part of this case was the assessment of enhanced damages by the district court after completion of the jury trial.  Medtronic argued that Judge Jenson improperly ascertained facts relating to the enhanced damages after the jury ruled on willfullness.  However, the CAFC pointed out that case law "endorses this practice by including several factors that a jury is not in the best position to assess."  In particular, the CAFC noted that the "trial judge is in the best position to weigh considerations such as the closeness of the case, the tactics of counsel, the conduct of the parties, and any other factors that may contribute to the fair allocation of the burdens of litigation."  Such court activism as seen here may be welcome relief to a party that wishes more consideration be given to the conduct of parties and their counselors  in litigation.

In Re. Inland Steel Company
Decided September 19, 2001
Judge Bryson with Judges Newman and Rader

*          Claim ranges that overlap prior art ranges create a prima facie case of
obviousness that must be rebutted by the applicant or patentee

            During a patent infringement suit with Inland, two defendants filed for reexamination of Inland's patent.  Inland's patent claims recited a method for producing steel with good magnetic properties by including "antimony: 0.02-0.10 wt %" and by avoiding annealing steps at certain stages.  The district court stayed further proceedings pending the outcome of the reexamination proceeding.  During the reexamination the U.S. PTO rejected all of the claims.  Inland unsuccessfully appealed its loss to the Board of Patent Appeals and Interferences, which sustained rejection of all claims on obviousness grounds.  Inland then appealed to the CAFC.

            The CAFC affirmed the obviousness rejection in an opinion that explored how quantitative values shown in prior art references may obviate claims to overlapping values for the same variable.  The CAFC pointed out that case law has been developed that calls for a prima facie obviousness holding in this situation.  The CAFC affirmed the district court's finding that "the claimed ranges of the components of the (two cited art) formulations overlap each other and overlap the claimed ranges of" the contested patent.  One of the prior art references further had established that variation in the crucial variable (percent antimony), by itself and not just in combination with another variable was beneficial, further suggesting motivation.  Most importantly, such overlap with ranges in the prior art transferred the burden of proving non-obviousness to the patentee.  Inland tried to show unexpected results but failed to meet its burden to overcome the "strong" prima facie case of obviousness.

            When reciting a quantitative variable as part of a claim, an applicant should be mindful of prior art that overlaps the claimed range and should be prepared to show unexpected results or other evidence of unobviousness with respect to that prior art.

Exxon Corporation and Exxon Chemical Patents, Inc. v. Phillips Petroleum Co.
Decided September 20
Judge Newman with Judges Friedman and Linn

*          The PTO may refuse to follow an erroneous instruction that would cause a
          mistake and loss of rights

      Exxon sued Philips for patent infringement at the U.S. District Court for the Southern District of Texas.  Judge Vanessa Gilmore agreed with Philips that Exxon's patent did not enjoy priority to earlier applications and held Exxon's patent invalid over intervening prior art.  Exxon's loss of priority arose from a procedural error wherein Exxon canceled all ten claims in a pending application by erroneously stating "[c]ancel in this application original claims 1-11 of the prior application before calculating the filing fee."  The PTO had responded by drawing a line through the typed entry "1-11" and adding "2-11" in a hand written, initialed and dated note to preserve the filing date, as the rules require at least one pending claim.  In a separate issue Philips unsuccessfully argued that Exxon had made a further procedural error by pursuing claims at the US PTO that arguably were rejected from an interference contest of an earlier priority application.  Exxon appealed the invalidity holding and Philips cross-appealed the court's non-acceptance of its second estoppel argument for finding Exxon's claims invalid.

The CAFC pointed out that "[n]o law or regulation prohibits the PTO from acting to preserve the applicant's compliance with the filing requirements" and reversed the invalidity holding.  The CAFC also upheld the district court's holding that Exxon was not estopped by Exxon's inaction (failure to notify the PTO) with respect to questionable claims that arose from a lost interference.  The CAFC pointed out that "[a]bsent proof of inequitable conduct, the examiner's or the applicant's absolute compliance with the internal rules of patent examination becomes irrelevant after the patent has issued."

Exxon won this case, but not until it had expended money defending charges of patent invalidity over procedural issues caused by sloppy patent prosecution at the PTO.



 

Fina Technology, Inc. and Fina Oil and Chemical Company

v. John A. Ewen v. Abbas Razavi

Decided September 17, 2001
Judge Schall with Judges Bryson and Dyk

*          A district court can not order the PTO to change the named order of
inventors of an issued patent

            Ewen and Razavi had a protracted inventorship dispute which led their assignee Fina to file a declaratory judgement action in the U.S. District Court for the Northern District of Texas against Ewen to clarify inventorship.  Judge Joe Kendall issued an order to the Director of the Patent and Trademark Office to reverse the order of the named inventors (Ewen and Razavi) on two patents so that Razavi's name would appear first.  Ewen appealed.

            The CAFC agreed with Ewen that "the district court did not have authority to order the Director to change the order of inventors on the patents" under either 35 USC sections 255 or 256.  The CAFC vacated and remanded, noting that "the particular order in which the names appear is of no consequence insofar as the legal rights of the joint applicants are concerned."

The order of listed inventors often affects how an inventor feels about himself and his work.  The name order should be considered in the context of motivating workers to do their best and of maintaining workplace harmony.  The inventor's names on a patent are determined directly from the order in which the names appear in the original oath or declaration.

GFI, Inc. v. Franklin Corporation et al.
Decided September 7, 2001
Judge Mayer with Judges Newman and Clevenger

*          A patent applicant may have to disclose a potential priority conflict to an examiner

GFI sued Franklin at the U.S. District Court for the Northern District of Mississippi for infringing patent claims to a couch.  Judge Glen Davidson found that GFI committed inequitable conduct during prosecution of its couch patent and declared that the patent was unenforceable.  Both sides appealed.

The CAFC affirmed the district court's decision.  The CAFC found inequitable conduct because GFI had discussed prior inventorship with rival furniture designer Durling during patent prosecution.  Durling provided GFI with a copy of Durling's related patent application that Durling filed two months before GFI's filing.  The CAFC agreed with the district court that GFI had an affirmative duty to disclose Durling's filing despite GFI's subjective belief that GFI had invented first because "[c]lose cases should be resolved by disclosure, not unilaterally by applicant" (citing LaBounty Mfg. Inc. v. I.T.C., Fed. Cir. 1992).  Another issue was that the district court forced GFI to disclose its attorney's discussions about priority.  The CAFC pointed out that GFI already had disclosed part of those discussions in another lawsuit and that "[a] client implicitly waives the attorney-client privilege by testifying about portions of the attorney-client communication."

This case highlights the danger of exploring patent priority issues privately with another party before obtaining a patent.  Franklin convinced the court in this case that GFI had an obligation to reveal its priority investigation results to a PTO examiner.

Fin Control Systems Pty, Ltd. v. OAM, Inc.
Decided September 12, 2001
Judge Clevenger with Judges Newman and Dyk

*          The text of prior art cited during prosecution of a related patent application is fair           game for use in interpreting a claim term

FCS sued OAM for alleged contributory infringement and inducement of infringement of FCS's patent claims to a surfboard having a removable fin with lateral surfaces through which the fin becomes attached "by releasable means laterally engaging" the fin.  Judge Christina Snyder construed the claims narrowly to mean fin attachment at a narrow angle "transverse to the longitudinal axis of the surfboard between the front and the rear."  Based on this narrow construction the court held summary judgement of non-infringement because the fins of the accused product were not attached "laterally."

The CAFC affirmed in a decision that revolved around the interpretation of claim terms "lateral" and "side" with respect to forces used in holding the fins to the surfboard.  The CAFC discounted the testimony of FCS's expert witness and instead emphasized "the presumption that the same terms appearing in different portions of the claims should be given the same meanings" unless the specification and prosecution history clearly indicate otherwise.  The CAFC also emphasized that a prior art reference cited during prosecution of a parent patent application "confirms" the interpretation of the "lateral forces" meaning. 

The use of cited art from related patents in this case underscores the importance of prosecution history from related patents for construing claims. A patent applicant should be careful of making statements and in citing publications during prosecution that may differ from intended claim meaning in related cases. 

Ecolab, Inc. v. Envirochem, Inc.
Decided September 6, 2001
Judge Linn with Judges Newman and Friedman

*          An invention's purpose does not influence a claim meaning unless specific           functional language from that purpose is in the claim

Ecolab and Envir. settled a patent dispute by executing an agreement wherein Envir. agreed to stop infringing Ecolab's patent to 3-dimensional solid object detergent products that contain a "substantially uniform" alkaline detergent composition.  Envir. then sold new products that avoid the Ecolab  patent by including substantially nonuniform concentrations of materials as the detergent object dissolves, through increasing the percent water in the last solid portion of the object.  Ecolab accused Envir. of violating their agreement and sued for an injunction against Envir. at the U.S. District Court for the District of New Jersey.  Judge Greenaway construed Ecolab's patent term "substantially uniform" to mean "a level of continuity of the elements (throughout the solid cast) such that a homogeneous cleaning solution is formed over the life of the cast."  That is, the judge construed "substantially uniform" to mean an effect rather than a composition, based on an understanding of how the invention solved a problem.  The solid dissolves to maintain the same chemical composition in the water as it shrinks during use.  Based on this interpretation the court held summary judgement that the new products infringed and enjoined Envir. from making using or selling the products.  Envir. appealed.

The CAFC interpreted "substantially uniform" as the solid composition itself and reversed the infringement finding.  The CAFC declared that the district court had erred by "defining nonnumerically limited claim terms according to the purpose of the invention" and by not using the "ordinary and accustomed meaning" of the term "substantially uniform."  Thus, the CAFC rejected using a problem-solution approach given in the specification to import a functional limitation into the claims.  The CAFC explained that where such "function is not recited in the claim itself by the patentee, we do not import such a limitation."

Claim terms such as "substantially" and "uniform" often lead to extensive disputes during litigation.  A patent applicant who desires to minimize these disputes should provide specific examples and explicit definitions in a patent specification.

Schaefer Fan Co., Inc.and Ronald E. Schaefer v. J&D Manufacturing et al.
Decided September 7, 2001
Judge Rader with Judges Schall and Dyk, Judge Dyk Dissenting

*          A district court can enforce a settlement agreement if a lawsuit dismissal from that          court specifically includes the settlement agreement

Schaefer sued J&P at the U.S. District Court for the District of Minnesota for patent infringement and both sides executed a settlement agreement.  The court  granted a Stipulation and Order of Dismissal, stating that "pursuant to a confidential settlement agreement, all claims in this action may be dismissed."  Later, Schaefer asked the same court to enforce the settlement agreement, despite the fact that a state court and not a federal district court normally has jurisdiction over contract matters.  The district court found that J&D breached the agreement.  J&D appealed.

The CAFC agreed that settlement agreements are enforced in state court but that the district court could enforce the agreement because the agreement was "incorporated" into the dismissal order by the "pursuant" language used by that court.  Judge Dyk, in a dissent, stated that the "judge's mere awareness and approval of the terms of the settlement agreement do not suffice to make them part of his order."  Judge Dyk also pointed out that "no action of the parties can confer subject-matter jurisdiction upon a federal court" and that there was "no evidence that the district court reviewed the settlement agreement."  Thus, the CAFC was not unanimous on how to interpret the procedural issue of using a district court to enforce a settlement agreement under the appropriate circuit law.

A patentee often desires to use a district court to enforce not only its patent rights but any related agreements.  Accordingly, when terminating patent litigation with a settlement agreement, a patentee might consider having at least part of the settlement agreement included in the court's dismissal order or otherwise incorporated by reference to ensure that the agreement will be enforced by that court.

Kopykake Enterprises, Inc. v. The Lucks Company
Decided September 10, 2001
Judge Dyk with Judges Rader and Schall

*          The literal scope of a claim term that recites a changing technology is limited to its
            meaning at the file of filing

Kopykake filed a declaratory judgement action of patent invalidity against Lucks' patent in the U.S. District Court for the Central District of California.  Lucks' patent claims recite methods of making edible images that can be placed on food, using "screen printing."  Judge Florence-Marie construed "screen printing" to mean "customary" methods that do not include the ink jet printing used by the accused process and entered declaratory judgement of non-infringement.  Lucks appealed.

The CAFC affirmed.  The CAFC noted that Luck's patent specification broadly described screen printing to include "any other conventional printing process."  However, the CAFC majority determined that ink jet printing was not conventional at Luck's priority date.  The court pointed out that the literal definition comes from an "objective test of what one of ordinary skill at the time of the invention would have understood the term to mean."  The court admitted that ink jet printing may have become conventional after the filing date, but that when a "term understood to have a narrow meaning when the application is filed acquires a broader definition" the narrow meaning is used for deciding the literal scope of the claim.

A concurring opinion by Dyk deemed that the broad "any ....conventional  printing process" definition provided in the specification was narrowed by statements during prosecution to mean "conventional screen printing," which does not include ink jet processes and would have found non-infringement for this reason. 

The CAFC's split on how to handle a simple claim term shows how easily a statement made in prosecution might affect claim scope under the doctrine of equivalents (apparently the majority opinion view) or literal claim meaning, as argued by the concurring opinion.  Lucks did not pursue infringement under the doctrine of equivalents so the CAFC did not have to explain its inconsistent use of prosecution history statements in the context of prosecution history estoppel.

Surfco Hawaii v. Fin Control Systems Pty. Limited
Decided September 5, 2001
Judge Newman with Judges Mayer and Rader

*          Premature replacement of a portion of a patented product with
            improved parts specifically made for that product does not infringe

            Surfco sued Fin at the United States District Court for the District of Hawaii for declaratory judgement that Surfco's rubber tipped fins do not infringe Fin's patent claims to a surfboard having removable fins.  Judge Samuel King granted Fin's motion for summary judgement of infringement by Surfco's product, (made to replace a part of Fin's product) on the basis that replacement of unworn fins with other fins having a desirable feature "created a new and infringing device."  Surfco appealed.

            The CAFC found no infringement and reversed because "[m]ere replacement of individual unpatented parts, one at a time, whether of the same part repeatedly or different parts successively, is no more than the lawful right of the owner to repair his property" (quoting the Supreme Court Aro Manufacturing case of 1961).  The CAFC pointed out that "[t]he patented surf craft is not 'recreated' by the substitution of a different set of fins, even when the new fins are specifically adapted for (this) use" and found that Surfco's sales are not evidence of contributory infringement or inducement of infringement.

            Fin's patent did not claim the replaceable fins alone.  Therefore the infringement issue became the question of whether Surfco had the right to help owners of the Fin surfboard repair or modify surfboards.  Modifying the surfboards by switching out an improved piece was acceptable as non infringing because that reconstruction did not in fact make a new article.

Kustom Signals, Inc. v. Applied Concepts, Inc. and John L. Aker
Decided September 5, 2001
Judge Newman with Judges Mayer and Lourie, Dissent by Judge Mayer

*          The claim term "or" should be defined clearly in a patent specification

            Kustom sued Applied at the United States District Court for the District of Kansas for infringing claims to a radar detector that uses software to search for either a signal from a largest object (e.g. truck) "or" a fastest object from stored data.  Judge Kathryn Vratil granted summary judgement of non-infringement and Kustom appealed.

            A majority of the CAFC panel agreed with the district court's construction of the claim term "or" to mean "a choice between either one of two alternatives."  The accused product searches stored data for both determinations and the user then selects either one "or" the other for display.  The claims refer to one "or" the other measurement by the computer, not the user and the CAFC majority affirmed the lower court's non-infringement holding.

            In a dissent, Judge Mayer declared that the majority misconstrued the term "or" and that he would have remanded for further fact finding.  Judge Mayer reasoned that the plain meaning of "or" can be "either or both."  Judge Mayer stated that it is appropriate to use the broader "technical Boolean definition" because the specification provides "detailed flowcharts" that are required to construe two of the claims and the computer algorithms use Boolean logic, which includes both exclusive "or" and non exclusive "or."

            This case shows that even a very simple word in a claim may need an explicit definition in the specification.  A patent drafter should consider making a definition table or otherwise explicitly define each such claim term to prevent this problem.           

 

Sandt Technology, Ltd. v. Resco Metal and Plastics Corporation and Seven Oceans Enterprises, Inc.
Decided September 6, 2001
Judge Michel with Judges Schall and Dyk

*          A court may use corroborative testimony to find a patent invalid on 102(g)
prior art grounds without a trial if the evidence is of high quality

            Sandt sued Resco at the United States District Court for the Southern District of New York for infringing patent claims to a security plate-device for preventing break-ins of coin operated telephones.  Judge Colleen McMahon adopted the recommendation of a Magistrate Judge and granted summery judgement for Resco that Sandt's patent claims are invalid.  Sandt appealed.

            Resco provided strong evidence of prior invention, including a copy of a patent application that Resco filed before Sandt's invention but had abandoned.  The CAFC agreed with the lower court that Resco provided sufficient corroboration of Resco's prior invention, which invalidated Sandt's patent on 102(g) grounds.  The CAFC upheld the lower court's decision of invalidity of the independent claims and declared that unlike most instances of disputed fact, this evidence generally was of high quality, as consisting of physical records that were made contemporaneously with Resco's invention.  In a concurring decision Judge Dyk warned that it is "particularly questionable" for a court to hold a patent invalid on summary judgement "in prior inventorship cases based on the affidavit of the alleged earlier inventor."  However, Judge Dyk agreed with the majority because credibility issues had not been properly raised. 

            It is unusual for a court to invalidate a patent without trial using testimony by a prior inventor.  However, the corroborative evidence (such as a filed patent application) was of high quality.  This case shows an interesting defensive advantage of filing frequent provisional applications, which might allow proof of earlier invention without having to go in front of a jury.          

 

Generation II Orthotics Inc. and Generation II USA Inc. v.
Medical Technology Inc.
Decided August 15, 2001
Judge Linn with Judges Newmann and Dyk

*          A means-plus-function claim should not be narrowed by adding
           possible inherent features of the invention to the claim    

            Gen II sued Medical in the District Court for the Western District of Washington for infringing claims to a leg-knee brace having a center joint and extra flex joints on each side of the center joint.  Judge John Coughenour construed claims that recite "joint means in the brace for allowing controlled (movement) relative to the (center) joint" to mean that the  flex joints allow movement "throughout the range of motion of the brace."  Because this unfavorable interpretation would not cover the accused device, Gen II stipulated a non-infringement judgement before trial and immediately appealed to the CAFC.

The CAFC agreed with Gen II that the district court incorrectly narrowed the claims by reading into them a limitation from an alleged inherent feature.  The CAFC repeatedly referred to the Micro Chem (Fed. Cir. 1999) case, which states that "112 para 6 does not permit limitation of a means-plus-function claim by adopting a function different from that explicitly recited in the claim."  The CAFC explained that "such an error could improperly alter the identification of the structure corresponding to that function" and remanded.  The CAFC noted that the intrinsic evidence was consistent with control of movement only "when the leg is in a fully extended" thus "suggesting that the purpose of the invention" is met by the limited control range.  The accused device also used limited control and apparently solved the same problem in a similar way.

It appears that an important claim interpretation issue was partly determined by a description of how the invention solved a particular problem.  It seems that providing a problem and specific solution to the specification can help a court define a claimed invention, particularly in a crowded field with close prior art.

Turbocare Division of Demag Delaval Turbomachinery v. General Electric Co.
Decided August 29, 2001
Judge Bryson with Judges Gajarsa and Linn

*          A term that is inherent in a specification may be added by amendment but         

            cannot form a claim element

*          A limiting term in a specification sometimes can be added to a claim during        
            prosecution without causing estoppel under Festo

            Turbo sued GE in the District Court for the District of Massachusetts for infringing patent claims to a shaft seal system in turbines that utilizes a spring mechanism to change a seal spacing around the shaft during non-steady state conditions.  Turbo had filed an original claim that recited a "small diameter position" without a physical contact limitation.  In response to a prior art rejection Turbo cancelled that claim and replaced with a claim that further defines a "small diameter" with reference to "contact" between surfaces, as more specifically described in the specification.  In another amendment Turbo amended its specification to describe "flat" springs and added a corresponding claim to flat springs. 

            Judge Michael Ponser on summary judgement found no infringement under the doctrine of equivalents of claims that recite the "small diameter" limitation because Turbo added that term during prosecution.  The court also found the new claim that recites "flat" springs invalid on written description grounds because the filed application lacked the term "flat."  Turbo appealed.

            The CAFC affirmed the lower court conclusion that the term "flat" was properly added to the specification during prosecution.  The amendment did not introduce new matter under inherency principles but adding the term to the claims violated the written description requirement. 

            The CAFC reversed the holding that Turbo's adding another claim element (contact between surfaces) during prosecution estopped use of the doctrine of equivalents with respect to the altered claim element.  The CAFC explained that "the newly added term only redefined the small clearance position limitation without narrowing the claim.  Therefore Festo is not applicable." 

            This case discusses how descriptive term(s) can be added to a patent specification during prosecution.  Both courts approved Turbo's addition of "flat springs" to the specification under inherency principles.  The CAFC now is deciding whether such described but not claimed elements are outside the doctrine of equivalents, in which case the applicant would be better off not making the amendment.  The CAFC is deliberating this larger issue en banc in Johnson & Johnson Associates.  Another interesting point is that words from a specification sometimes may be added to a claim without creating estoppel under Festo.  The CAFC indicated that the amendment was acceptable because the original claim would have been interpreted with the new limitation anyway.

Windbond Electronics Corp. et al. v. International Trade Commission and Atmel Corp.; Atmel v. International Trade Commission et al.
Decided August 22, 2001
Judge Rader with Judges Clevenger and Dyk

*           Incorrect inventorship is a technical defect in a patent that is easily cured       

*           Attorney client and work product privileges may be waived for communications          regarding correction of inventorship during litigation

The U.S. International Trade Commission ("ITC") enforced Atmel's patent against Windbond and other overseas manufacturers and importers of computer chips that include a feature for identifying the chip manufacturer.  The ITC rejected Windbond's arguments that among other things, Atmel had improperly added an inventor to cure inventorship during litigation and had committed fraud on the U.S. PTO when correcting inventorship.  Windbond appealed.  Atmel also appealed the ITC's holding that Atmel waived its attorney-client privilege and work product privilege for attorney documents related to the inventorship correction.

The CAFC affirmed the ITC's decision to accept the inventorship correction during litigation.  The CAFC pointed out that Windbond failed to present clear and convincing corroborated evidence that the correction was improper.  An issue was whether Atmel was obligated to submit inventorship testimony from the ongoing litigation to the PTO when seeking the correction.  The CAFC pointed out that such omission was not inequitable conduct because the new PTO rules do not require "any evidence to verify the inventive contributions of the added co-inventor."

The CAFC affirmed the ITC's decision that Atmel waived its attorney-client privilege and work product protections for communications related to the inventorship correction.  Atmel had to produce documents generated from the time that inventorship became an issue during the litigation until the time that Atmel filed its inventorship correction petition at the PTO.  The CAFC explained that "Atmel explicitly placed the legal advice (to the inventor) and the fact that (the inventor) had obtained that advice--'at issue' in" the proceedings.

Inventorship arguments seem common in litigation but are easily resolved by uncomplicated petition to the PTO.  Communications relating to correction of inventorship during litigation, however may have to be disclosed to the other side.

Jazz Photo Corp. et al. v. International Trade Commission and Fuji Photo Film Co., Ltd
Decided August 21, 2001
Judge Newman with Judges Michel and Gajarsa

*          Mere replacement of unpatented parts with commercially available parts indicates          permissible repair and does not infringe a patent claim that recites the combined       parts

            Fuji brought a section 337 action at the ITC against Jazz and 26 other companies for importing used "single use" cameras in violation of 15 Fuji patents.  The ITC agreed with Fuji that the cameras had not been merely repaired but were impermissibly reconstructed and ordered the importers to cease and desist.  Jazz appealed.

            The CAFC held that cameras purchased in the U.S. could be resold after adding new film and reversed the ITC decision for those cameras.  A first point was that "Fuji's unrestricted first sale of the patented cameras.....established that (Fuji's) patent right had been exhausted" only for cameras that Fuji sold in the U.S.  Overseas sales did not exhaust those rights because the "authorized first" sales did not concern a U.S. patent right.  Moreover, Fuji's unilateral intent that the cameras be used only once was not a binding contract with purchasers because "no express conditions of sale, license terms or restrictions attended the sale."  Important factors in the decision that the camera re-use was not illegal refurbishment but rather permissible repair included (1) all of the original camera components except the film and battery had a useful remaining life and are reused and (2) the replaced components were commercially available. 

            The CAFC stressed that the legal determination of what is permissible repair is a difficult fact based issue.  It seems that if the replaced film were specific to that camera then an attempt to both manufacture and use the film for repair would more likely tip the balance towards illegal refurbishment.  Also, if Fuji had explicitly "rented" the cameras, which had to be turned in anyway, then its commercial desire of one time use might have acquired more legal protection.

Innovad Inc., v. Microsoft Corp. et al.
Decided August 6, 2001
Judge Rader with Judges Mayer and Friedman

*          Strong statements about an invention’s limitations in the specification may           narrow claim scope

Innomed sued Microsoft in the U.S. District Court of the Northern District of Texas for infringing patent claims to a telephone dialer system having a “small volume” case and electronics for storing a preprogrammed number.  The court interpreted the term “small volume to mean a device smaller than the prior art portable telephone dialers” and also interpreted the claims to exclude a keypad.  Based on these interpretations the court granted Microsoft’s summary judgement of non-infringement because the accused devices were larger and all included keypads.  Innovad appealed.

The CAFC affirmed the district court’s holdings but disagreed with the interpretation of “small volume” because “the specification provides no specialized meaning for (the term) but relates the term to the dialer’s function……that the dialer should be comfortably portable.”  Thus, in the absence of a specific meaning the court interpreted the term according to its function as used in context.  Most importantly the CAFC agreed that the claim scope was limited to dialers that lack a keypad, because “[r]epeatedly, the specification emphasizes that the dialer has no keypad.”  Thus, even though the claims lacked this element, the courts narrowed the claims by importing a limitation from the specification.

This is an example of how strong comparisons with prior art in the specification may limit claim scope.

Glaxo Group Limited and Glaxo Wellcome, Inc. v. Ranbaxy Pharmaceuticals, Inc.
Decided August 20, 2001
Judge Rader with Judges Newman and Mayer

*          The claim term “essentially free” means “greater than 90%” when extrinsic         test data shows that only impurities greater than 10% are measurable

Glaxo filed a patent application for a drug compound “in amorphous form essentially free from crystalline material” and then obtained approval from the FDA for a New Drug Application for the pharmaceutical.  Before Glaxo’s patent expired Ranbaxy filed an Abbreviated New Drug Application for approval to market a generic version of Glaxo’s drug that contained “about 10 to 15% crystalline” impurity form of the drug.  Glaxo sued Ranbaxy in the U.S. District Court for the District of New Jersey.  Judge Mary Cooper interpreted Glaxo’s patent claims to include up to 15% crystalline compound, covering Ranbaxy’s product.  The court granted Glaxo a preliminary injunction that blocked Ranbaxy from offering for sale or selling its product.  Glaxo appealed.

The CAFC interpreted the claim term “essentially free” more narrowly than did the district court and vacated the injunction.  Both courts concluded that “essentially free from crystalline material” means “fundamentally without crystalline material” and that the crystalline “material is present only as an unavoidable impurity.”  The district court decided that “essentially free” could include up to 15% impurity, from statements by Glaxo’s expert witness and laboratory data showing that 15% of impurities were needed to identify impurity species.  The CAFC however, disagreed with this figure because the evidence showed that 10% of crystalline impurities could be detected quantitatively (without regard to species).  Thus the CAFC interpreted “essentially free” to mean 10% or less crystalline material.  The CAFC declared that Ranbaxy’s product, at between 10% and 15%, did not infringe literally.  Ranbaxy did not infringe under the doctrine of equivalents either because Glaxo had added the term “”essentially free” in response to an indefiniteness rejection, creating file history estoppel.

The use of expert testimony as seen here to obtain a broad claim scope during litigation is not routine.  The CAFC, which interprets claims de novo was not persuaded by the record testimony and passed on the broad definition, reversing the decision of the lower court.

Advanced Cardiovascular Systems, Inc. and Guidant Sales Corporation v. Scimed Life Systems, Inc. and Boston Scientific Corporation
Decided August 6, 2001
Judge Schall with Judges Michel and Archer

*          A limitation that only appears in patent drawings should not be read into             patent claims

            Advanced sued Scimed in the U.S. District Court for the Southern District of Indiana for infringing its patents that claim a flexible coronary stent having a mesh design with “radially expandable cylindrical connecting elements” that expand in width without shortening in length.  Judge David Hamilton granted Scimed summary judgement of non infringement because the connecting elements in Scimed’s accused device are curved, and cannot be “generally parallel.”  The court construed the claims with the structural limitation of “generally parallel connecting elements.”  The court focused on statements made by the inventors during prosecution of one of the patents, and noted that “the only embodiment in the asserted patents depicts the connecting elements as generally parallel to the stent’s longitudinal axis.”  Advanced appealed the summary judgement of non-infringement, and argued that the claims were construed too narrowly.

The CAFC rejected the lower court’s narrow claim construction, noting that one independent claim of one patent recited the “generally parallel” limitation but that other claims have “no express structural limitations on the claimed connecting elements.”  One issue was that all the figures showed parallel structures yet the asserted claims did not contain that limitation.  The CAFC commented that “nothing in the specification assigns significance” to the parallel relationship and did not import that relationship into the claims.  The court reasoned that including a structural feature in the figures without a corresponding written description in the specification or claims does not “allow this aspect of the drawings to be imported into the claims as a limitation.”  Based on its wider construction, the CAFC vacated the non-infringement finding and remanded with the suggestion that the district court “consider extrinsic evidence, ‘such as expert testimony, inventor testimony, dictionaries, and technical treatises and articles’. . . .  in order to determine in what manner the connecting elements should be ‘generally parallel” to each other.”

During prosecution Advanced argued to the PTO that “the invention and not just the claims” concerned generally parallel elements.  This broad conclusory assertion about the entire invention helped persuade the district court during litigation to construe all of the claims for that invention more narrowly. It is important to avoid this kind of conclusory statement about the invention, as distinct from a claim, when arguing with a patent examiner.  Another point from this case is that the patentee might have avoided expert testimony to construe claim meaning during litigation if it had included more description (such as more diverse drawings) in its filed patent application.

Monsanto Co. v. Mycogen Plant Science, Inc. and Agrigenetics, Inc and Novartis Corp.
Decided August 16, 2001
Judge Linn with Judges Clevenger and Bryson

*          The threshold of persuasion to overturn a jury decision is high

            This case is a companion of two other recent Monsanto v Mycogen cases wherein Monsanto lost an invalidity challenge because of prior inventorship by another under 102(g).  Inventor notebook evidence and related corroboration were important to those cases.  In the present case Monsanto tried to persuade the district court to vacate the jury’s decision by filing a judgement as a matter of law motion stipulating that the jury lacked evidence for its invalidity finding.  The court however, upheld the jury’s verdict of invalidity and Monsanto appealed to the CAFC.

            The CAFC upheld the lower court’s rejection of Monsanto’s arguments that the jury improperly reached the invalidity verdict.  The CAFC concluded that laboratory notebook data shown to the jury did not have to be accompanied by explanatory argument or testimony linking the evidence to diligence of reduction to practice.  The record, which showed “activity in every month during the critical period” for a diligence determination under 102(g) suggested that the “work was ongoing without interruption, despite the lack of daily entries.”  The CAFC affirmed the lower court, and pointed out that the “threshold to overturn a jury decision is high.”

            Here, laboratory notebook evidence by itself sufficed in showing that Agracetus inventors (the first inventors under 102(g)) diligently reduced their earlier conception to practice, “despite the absence of argument or testimony explaining the lab notebooks and linking their contents to the elements of diligence.”  It is important to adopt a consistent practice of maintaining notebooks and to keep other records.  The one month gaps in the notebook record commented on in this case were accepted in view of consistency in record keeping, and in view of other evidence such as ordering of chemicals.

Bell Atlantic Network Services, Inc. v. Covad Communications Group et al.
Decided August 17, 2001
Judge Gajarsa with Judges Lourie and Plager

*          A simple claim term is defined implicitly by a patent specification through            consistent use

            Bell sued Covad at the U.S. District Court for the Eastern District of Virginia for infringing claims to a DSL data transmission system that uses a “plurality of modes” and wherein the transmission rates can be “selectively” changed.   Judge Jerome Friedman granted Covad summary judgement of noninfringement after determining that certain limitations required by Bell’s claims were not present in Covad’s accused DSL systems.  Bell appealed, arguing that the court construed the patent claims too narrowly.

            The CAFC agreed with the lower court’s claim construction and affirmed.  A major issue was whether the claims are broad enough to cover DSL systems that separately alter bandwidth and data transfer rates to create additional transmission modes.  Bell argued that the lower court improperly limited the term “mode” to three categories described in the specification and that the more expansive term “rate” should be used.  The CAFC responded that “when a patentee uses a claim term throughout the entire patent specification, in a manner consistent with only a single meaning, he has defined that term ‘by implication.’”  The CAFC further pointed out that although “mode” and “rate” often refer to the same thing, repeated contrary use in the specification blocked that interpretation for claim construction.  Bell made and lost similar arguments for other claim terms, which the district court also construed narrowly.

            This case shows how a court may respond when a patentee uses simple words with special technical meanings in a new and complex art such as software.  Rather than resort to expert witnesses to opine on what the terms mean to skilled workers, a court may look to consistent usage in the specification and prosecution history to find an “implied” definition, as was done here.  This strong reliance on the intrinsic evidence is noteworthy because of the dominant role that claim interpretation has in determining the winner of patent litigation.  An application drafter should be mindful of indirectly defining a claim term by an implied (grammatical and comparative) use in the specification, particularly in software technology.

Mycogen Plant Science, Inc. and Agrigenetics, Inc. v. Monsanto Company
Decided August 14, 2001
Judge Bryson with Judges Clevenger and Linn

*          Cancellation of broad DNA sequence claims and replacement with narrower     claims bars use of the doctrine of equivalents for alternative sequences.

In its earlier review of this case, the CAFC held that Mycogen was estopped from invoking the doctrine of equivalents with respect to certain claims of a patent directed to synthetic genes because Mycogen narrowed its claims by amendment.  In that decision the CAFC did not provide details of its reasoning and Mycogen petitioned for a rehearing.  In this opinion the CAFC provides details of the claim amendments that generated the file history estoppel and denies Mycogen’s petition for a rehearing.

Mycogen filed an application that contained broad sequence claims but only one DNA sequence that actually had been studied.  The patent examiner rejected any further broadening beyond that one sequence on enablement grounds because of unpredictability in the art.  The allowed claims thus contained narrower sequences than the originally filed claims, which completely blocked the use of the doctrine of equivalents to cover alternative sequences.

As seen here, filing broad sequence claims and then amending to a narrower group of sequences may block use of the doctrine of equivalents to cover more sequences.  One strategy to combat this before filing a patent application may be to obtain evidence of other sequences, prophesize different sequences that should work, predict what sequences might or should be studied in the future, and include these other sequences in the filed application.  The PTO will accept experimental data generated after the filing date as proof of enablement for an altered sequence.  Thus, an aggressive patenting strategy may be to include prophetic and planned experiments in the filed application that provide alternative sequences and submit results from the proposed work during patent prosecution.

Shinpei Okajima v. Joel Bourdeau
Decided August 16, 2001
Judge Michel with Judges Mayer and Linn

*          The Board of Patent Appeals and Interferences is entitled to broad deference    of its fact finding

Okajima lost an inventorship priority determination in an interference with Bourdeau.  Okajima then filed a motion that Bourdeau’s patent claims (the count) are invalid on obviousness grounds.  The Board of Patent Appeals and Interferences (the “Board”) held that Bourdeau’s claims were not obvious.  Okajima appealed to the CAFC.

The claims recite a snowboard boot that has a rigid shell around the foot and a second portion that holds the back of the leg.  The two parts are held by a rounded pin that rests between the Achilles tendon and bony part of the ankle.  Two prior art obviousness references for snowboards were argued.  Okajima argued for reversal partly because the Board failed to provide findings of fact regarding the level of the skill of the art as such a finding “supplies an important guarantee of objectivity.”  The CAFC disagreed, however, because “where the prior art itself reflects an appropriate level…a need for testimony is not shown.”  The CAFC also rejected Okajima’s second point that there was motivation to combine the two references.  The CAFC did not challenge the Board’s conclusion that motivation to combine was lacking because “the Board has done a thorough job of setting forth the basis of its factual findings.”  The CAFC pointed out in this decision that “the Board’s findings are entitled to broad deference” and that the “express findings of fact…..obviate the need for us to remand for further proceedings at great cost and inefficiency to the parties.” 

In cases such as this one where the Board carefully prepares extensive fact finding, it is more difficult for the CAFC to vacate those findings under the substantial evidence standard.  In this case, a great deal of evidence from the Board apparently was available which met the evidentiary standard of “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” .

Michael L. McGinley v. Franklin Sports, Inc.
Decided August 21, 2001
Judge Clevenger with Judges Mayer and Michel, Clevenger dissents

*          A patent challenger has a high burden to prove invalidity over prior art that         has been considered by the PTO           

            McGinley sued Franklin in the U.S. District Court for the District of Kansas for infringing claims to a baseball pitching training device showing finger placement on a baseball.  Judge John Lungstrum granted summary judgement to McGinley for infringement.  A jury found that the claims were not invalid and were willfully infringed.  Subsequently the court granted judgement as a matter of law that the patent was invalid on obviousness grounds.  McGinley appealed the district court’s setting aside the jury verdict on validity grounds.  Franklin cross appealed the grant of summary judgement of infringement.

The CAFC, in a majority decision reversed the judgement as a matter of law finding, thus upholding the jury decision of validity.  A central issue for the invalidity determination was whether motivation existed to combine two references that had been considered by a patent examiner.  The court pointed out that motivation to combine is a fact question for which the jury reviewed much evidence and arguments from both sides.  A major fact was that the patent examiner already had seen the same two references and did not try to combine them.  This second guessing of the examiner during litigation prompted the CAFC to point out that “[i]t is well established in our case law that (Franklin’s) burden in this case was especially heavy.” because the attacker “has the added burden of overcoming the deference that is due to a qualified government agency presumed to have properly done it job.”  The majority opinion concluded that “we have the classic example of sufficient evidence to support each position argued to the jury” and declared that “the jury’s factual conclusion may not be set aside.”

Judge Michel dissented, complaining that the majority decision means that “a general jury verdict on the legal question of obviousness is essentially immune from review.”  The disagreement within the court appears to stem from a procedural issue on how to utilize the jury in district court litigation.  The majority decision assumed that the jury made a factual finding of motivation that was supported by evidence.  The dissent emphasized that the jury finding appeared to be a legal conclusion and that the jury provided no record of a specific factual finding of motivation.  The problem recognized here might be solved by routinely requiring special verdicts or special interrogatories from juries, as suggested in Judge Michel’s dissent.  That dissent implied that forcing juries to be more specific may help them provide better decisions.

S3 Incorporated v. Nvidia Corporation
Decided August 3, 2001
Judge Newman with Judges Michel and Gajarsa, Judge Gajarsa dissenting

*          A claim is not 'indefinite' simply because it is hard to understand
          by readers who are not skilled artisans

S3 lost its patent infringement lawsuit against Nvidia at the U.S. District Court for the Northern District of California on summary judgement of invalidity under 35 U.S.C. 112(2^nd) (indefiniteness).  S3's means plus function claims described a digital analog converter that uses "video information stream" data produced by a video controller.  Judge Saudra Armstrong held the claims invalid because the claims ambiguously recited both "video information" and "video display information."  The court concluded that "it is not apparent whether a particular data stream would contain 'video information,' 'video display information,' or both" and thus the claims were fatally flawed.  S3 appealed to the CAFC.

The CAFC reversed.  The majority opinion held that the claims were understandable to a skilled worker because the "means …for selectively receiving" the data was "a selector …of well known electronic structure….and is readily implemented from the description."  The court pointed out that "patent documents need not include subject matter that is known in the field of the invention and is in the prior art, for patents are written for persons experienced in the field of the invention."

Judge Gajarsa strongly dissented, arguing that "one of ordinary skill in the art cannot determine (the claim) scope absent speculation."  An important point made in the dissent but not addressed in the majority opinion was that the test for indefiniteness of means-plus-function claims "is whether 'structure supporting a means-plus-function claim under 112 para 6 [appears] in the specification."

The disagreement within the court related to the indefiniteness standard for means plus function claims.  The dissent pointed out that the indefiniteness standard is higher for a means plus function claim because a structure for the function must be clear in the specification and cannot be assumed from knowledge of a skilled worker.  Because of the risk that the definiteness standard may be higher for means plus functions claims, a patent practitioner should fully add alternative structures to a specification to support means plus function claims.

MSM Investments Company, LLC v. Carolwood Corporation et al.
Decided August 9, 2001
Judge Lourie with Judges Michel and Linn

*          A patent specification that uses a simple claim term in a very broad manner

may broaden claim scope to include prior art

MSM lost its patent infringement suit against Carolwood on a summary judgement motion that MSM's patent claims are invalid on 102(b) grounds.  The patent claims recite a "method of feeding" a dietary supplement of methylsulfonylmethane.  However, the claimed substance was used publically as a pain reliever (given orally) more than one year before the priority date and was found invalid for that reason.  MSM appealed, arguing that the public use was pharmaceutical and the claims are limited to a different nutritional use.

The CAFC agreed with the district court that the claim terms "feeding" and "beneficial amount" are not limited to "nutritional purposes" but include giving high "pharmacological" amounts by mouth.  The CAFC agreed with MSM that the "ordinary meaning of the term 'feeding' (means) supplying or providing food or nourishment."  The court however, pointed out that "[I]t is always necessary to review the specification to determine whether the inventor has used any terms in a manner inconsistent with their ordinary meaning."  In this case CAFC found that the specification used a broader definition for "feeding" than normal.  The specification contained an "expansive definition of the word 'food,' coupled with the disclosed use" of the claimed material "as a 'normalizer of biological function."  In other words, the "specification commingles pharmaceutical uses with nutritional uses and does not describe (the two benefits) as mutually exclusive."  Thus, the court used an usually broad definition that prompted the 1102(b) invalidity holding.

This case shows the danger of describing a common word (such as feeding) too broadly, to include other aspects such as pharmaceutical uses, which may ensnare prior art.

In Re. Zurko et al.
Decided August 2, 2001
Judge Archer with Judges Newman and Michel

*          The PTO cannot rely on "basic knowledge or common sense" for its

core factual findings but must provide concrete evidence

            This is the Zirko case that the Supreme Court remanded back to the CAFC last year.  Zirco had appealed an obviousness rejection of claims to a software method for use of a secure computer environment.  An important claim element was "communication between a trusted environment and the user along a trusted path."  The USPTO Board of Patent Appeals and Interferences (the "Board") had maintained the obviousness rejection over two prior art references despite the lack of a specific description in either reference.  The Board argued that the claim element was in the references because the "communication along a trusted path, if not explicit in the prior art, is either inherent or implicit."  On appeal the CAFC found that these factual findings were "clearly erroneous" and reversed.  The CAFC decision was appealed to the Supreme Court.  The Supreme Court reversed the CAFC because the CAFC failed to use the more lenient standard of review.  The Supreme Court remanded the case down to the CAFC and ordered the CAFC to use the more lenient standard of review (either substantial evidence or arbitrary and capricious) of the Administrative Procedure Act.

The CAFC used the substantial evidence standard in its second review of the Board's factual decision of what the prior art teaches.  The CAFC held that the Board failed to show substantial evidence to support its findings of "communications between the user and the trusted environment along a trusted path" in any of the references.  The CAFC rejected the Board's contention that "it is basic knowledge that communication in trusted environments is performed over trusted paths" and that the missing claim element is "nothing more than good common sense."  Accordingly, the CAFC again reversed the Board's judgment of obviousness.

The CAFC, following it decision in In re Gartside (Fed. Cir. 2000) used "substantial evidence" rather than "arbitrary and capricious" as the standard for reviewing the Board's factual conclusions.  Although this standard "is generally considered more deferential than the (old) clearly erroneous standard of review" this difference is (in the Supreme Court's words) "a subtle one" so fine that the Supreme Court "could not find any other case where a reviewing court had conceded that the standard of review made a difference." 

This case closes a chapter in the Zurko cases that brought us a slightly different (and more relaxed) standard of review by the CAFC of the Board's factual findings.
Viskase Corporation v. American National Can Company
Decided July 31, 2001
Judge Newman with Judges Lourie and Rader

*          A statement made during patent prosecution regarding numeric precision

can limit claim interpretation to that precision during litigation

            Viskase sued ANC in the U.S. District Court for the Northern District of Illinois for infringing a series of patents with claims for heat-shrinkable thermoplastic films of polyethylene for packaging.  Judge Elaine Bucklo interpreted claims that recited "density below about 0.91" to mean "densities between 0.905 and 0.914, based on the reasoning that numbers in this range would be rounded to 0.91."  ANC's accused product had a density of 0.912 and was found to literally infringe.  ANC appealed to the CAFC.

ANC argued that Viskase treated 0.91 as if it were 0.910 during prosecution of Viskase's first patent applications.  That is, Viskase distinguished its invention from prior art having a range of 0.910 to 0.940, stating that the art "does not have a density below about 0.910 g/cm³ as defined in all pending claims."  Viskase argued to the court that the statement was an "error" by its patent attorney and that 0.910 does not appear in any of the respective patent applications or claims or elsewhere in the prosecution history.  The district court had agreed and did not limit the claims to the higher precision.  However, the CAFC did not agree with this argument because the distinction of 0.910 clearly "was presented as necessary to draw a line in this crowded field of technology."  Based on its own construction, the CAFC found the accused product density (0.912) was outside the claimed range and reversed the infringement finding. 

The claim construction issue dominated an otherwise complicated case and changed the result from infringement into non infringement based on a single statement made during prosecution.  The patentee had prosecuted two families of issued patents, with some patents claiming different density values.  The infringement finding for an entire "family" of patents was thus reversed because of the statement made during prosecution of one patent.

Day International, Inc. v. Reeves Brothers, Inc.

Decided August 9, 2001
Judge Clevenger with Judges Schall and Gajarsa

*          A broad patent claim may be limited to a numeric range by statements      

made during prosecution

Day sued Reeves at the U.S. District Court for the District of South Carolina for infringing patent claims to a method of making a spongy printing blanket.  The invention procedure forms small spaces via small microcapsules that vaporize within the blanket, and make the layer spongy.  The spongy blanket acts as a rubber like pad to transfer ink.  The claims recite manufacturing the material using "a temperature below the melting point of said microcapsules for a time sufficient" to allow the layer to solidify prior to vaporizing the microcapsules.  This low temperature step overcomes the problem of particles melting before the layer solidifies, which agglomerates the spaces.  Magistrate Judge William Catoe granted summary judgment of non-infringement because Reeves's manufacturing process uses particles with high melting point and avoids the low temperatures used in the patent examples.  Day appealed.

The CAFC affirmed, agreeing that the claims should be interpreted to include a low temperature limitation.  The CAFC reasoned that the accused process avoids "the (particle) agglomeration of the prior art" using "microcapsules, which melt only at temperatures well above conventional vulcanizing temperatures."  Despite the fact that the claims did not recite a temperature range, both courts looked at prosecution statements that distinguished over prior art by using "a lower temperature, namely 110F to 170F" or "reduced temperature" compared to the prior art processes.  The accused process, while otherwise infringing used a temperature of 280 degrees F and was held non infringing.

This is an extreme case where statements during prosecution were used to add a narrow temperature range limitation (less than 170 degrees F) into a claim that simply recited "a temperature."

Pall Corporation v. PTI Technologies Inc. and Kurabo Indus., Ltd.
Decided August 7, 2001
Judge Dyk with Judges Schall and Friedman

*          Patent claims are construed to exclude any interpretation that was

disclaimed during prosecution

            In a merged infringement case at the U.S. District Court for the Eastern District of New York under Judge David Trager, Pall and PTI sued each other for infringing each other's patents to flurocarbon filters.  The court held that Pall did not infringe PTI's patent claims to a filter element with "net supporters made of (any of three alternative flurocarbons)" because Pall's device included additional compound(s).  The court also found that PTI did not infringe Pall's patent.  PTI did not infringe because Pall's claims, which recited filters having "first and second impervious fluoropolymetric end caps" were limited to filters where "each end cap is a unitary structure." PTI's device was not unitary so the court found no infringement.  Both sides appealed to the CAFC.

The CAFC agreed with the district court that PTI's claims require "that the net supporters be made entirely of one of (the three listed fluorocarbons)" and affirmed that holding.  That is, PTI's claims did not recite "comprising" and thus were construed very narrowly, allowing a minor change in Pall's filter to prevent infringement.

The CAFC interpreted Pall's claims more broadly than the district court and stated "the language of the claims does not indicate that the first end cap must be a unitary structure that cannot comprise two separate components."  Pall's patent specification and file history also did not indicate a unitary structure.  However, PTI successfully convinced the CAFC that "the prosecution history requires a different construction of the claims" because Pall distinguished the claims over devices advertised by another company in an information disclosure statement.  The CAFC agreed with the narrow interpretation, pointing out that claims "must" be construed "to exclude any interpretation that was disclaimed during prosecution."  The court explained that the accused infringer has the burden to "demonstrate that the patentee 'defined' the claim as 'exluding' a broader interpretation 'with reasonable clarity and deliberateness'" and that the determination is to be made from the understanding of "one of ordinary skill in the art."  Thus, the CAFC remanded the non-infringment holding.

Claim interpretation often is affected by statements made during prosecution, as seen in this case.  Such claim interpretation has become critical to winning most patent cases and is particularly important for foreign companies because the determination is carried out in the absence of a jury.

Door-Master Corporation v. Yorktowne, Inc. and Conestoga Wood Specialties, Inc.
Decided July 10, 2001
Judge Rader with Judges Gajarsa and Linn

*          A design patent claim may include a feature that is seen before use and
briefly during use of the article

A jury awarded Door-master damages for Yorktowne’s infringement of Door-master’s design patent for an “integrated door and frame” of a kitchen cabinet.  An issue was whether the design patent was anticipated by older door models having an “inset mounted” door “within a beaded cabinet frame.”  The District Court for the District of New Jersey found no anticipation and willful infringement but did not award attorney’s fees.  Yorktowne appealed.

The CAFC affirmed no anticipation over the asserted prior art because the prior art design is a door “mounted on hinges that are visible from the front when the door is closed” and Door-master’s “patent shows no such hinges.”  The back panel of the design was important in the court’s analysis because “the rear features are not functional. (and) Many different configurations …..could perform the same functions.”  The CAFC found that, while “the back panel (of the accused device) is identical to the claimed design” there were many “differences between the prior art and the claimed design” regarding the back panel, and the jury findings were amply supported.  The CAFC affirmed the district court’s denial of attorney fees because “the district court found that the case presented a close call in several important respects.”

An important issue in this case was whether rarely seen “rear features” of the design properly were included in the claimed design for determining anticipation and infringement.  The CAFC pointed out that “[t]he rear features are visible, however, before the door is installed and when the door is open during use.  Accordingly, the rear features are not ‘hidden’ and their appearance is a ‘matter of concern.’”

In Re Save Venice New York, Inc.
Decided July 27, 2001
Judge Gajarsa with Judges Michel and Dyk

*          A previously registered mark on goods combined with new features carries no presumption of distinctiveness

Save Venice unsuccessfully tried to register a drawing of a Lion with large lettering above it “The Venice Collection” and with small lettering below “Save Venice Inc.” as a trademark.  The U.S.P.T.O. Trademark Trial and Appeal Board affirmed an examiner’s rejection of the proposed mark on grounds that “the mark was primarily geographically deceptively misdescriptive” based on information from an encyclopedia and a gazetteer.  Save Venice appealed to the CAFC.

In its appeal Save Venice argued that the strongest part of the proposed mark was its previously registered and incontestable service mark, “SAVE VENICE.”  Therefore, consumers would associate the proposed mark with fundraising activities rather than with the geographical origin.  In response the CAFC declared that use of a registered mark on new goods “carries no presumptive weight within this composite mark.”  Furthermore, “THE VENICE COLLECTION” dominates the composite mark, the previously registered mark was “a minor compositional portion of the composite mark” and the proposed mark was primarily geographic.  Thus, the CAFC agreed with the PTO that under the “goods/place association” test the public would be deceived into thinking that the goods are associated with the particular geographic location depicted by the mark and thus are “geographically deceptively misdescriptive.” 

State Contracting & Engineering Corporation and State Paving Corporation v. State of Florida et al.
Decided July 20, 2001

*          A state government can use a private party's patent rights without compensation under sovereign immunity principles

*          A work contract with a government agency that gives the agency the right to use a patent owner's technical data is not a license to the patent rights

                        State Contracting contracted to build sound insulation walls for the state of Florida.  During that work State Contracting executed a value engineering change proposal ("VECP") with Florida for a new technology from State Contracting that reduces costs.   The VECP gave Florida "all rights to use, duplicate or disclose…and to have or to permit others to do so, data" relating to the new technology that State Contracting introduced into its Florida project.  State Contracting then obtained two patents on its new technology.  Florida promoted and used that new technology with other private companies and contracted those companies to use the technology.  Despite their infringing acts, both Florida and the other companies refused to pay royalties.  State Contracting sued all at the U.S. District Court for the Southern District of Florida.  During the dispute the Supreme Court (in another case) established that state governments have Eleventh Amendment immunity from patent infringement suits and from unfair competition suits, allowing them to infringe without liability under the patent statutes and the Lanham Act, respectively. 

Judge William Dimitrouleas of the district court granted summary judgment for Florida because Florida enjoyed Eleventh Amendment immunity.  The court also held that other private companies working for the state may practice State Contracting's patented invention because State Contracting's VECP contract with Florida gave Florida a license that allows Florida to pass its patent rights to others.  State Contracting appealed to the CAFC.

            The CAFC affirmed Florida's sovereign immunity from infringement.  The CAFC explained that a state enjoys immunity unless that state waives its immunity expressly and voluntarily.  Furthermore, a state does not waive immunity when it attacks patent validity (as it did here) by filing a counterclaim during related litigation.  The CAFC vacated the judgment that favored the private parties who practiced the invention because the VECP contract between State Contracting and Florida "did not explicitly convey any patent rights, require the contractor to surrender its rights to the technology, or bar the contractor from securing a patent on the invention."  The most important aspect of the VECP which favored State Contracting was the "glaring omission" to "explicitly provide for the licensing of patent rights."

This case provides guidance for how to construct a contract between a contractor who bids on work with a government or government agency and the agency so as to protect patent rights of the contractor.   The case also illustrates the unfortunate and drastic effect of the recent Supreme Court's decision granting the states immunity from patent infringement suits.

The Dow Chemical Company v. Sumitomo Chemical Company, Ltd.
Decided July 25, 2001
Judge Gajarsa with Judges Clevenger and Rader

*          Technical dictionaries and treatises, although extrinsic evidence, hold a “special place” and may be used to determine the ordinary meaning of claim terms

Dow sued Sumitomo in the U.S. District Court for the Eastern District of Michigan for infringing claims to an improved process of preparing epoxy resin.  Dow’s claims recite the use of an organic solvent having a “boiling point below the boiling point of (the other) components in the reaction mixture.”  Judge Victoria A. Roberts construed the phrase “boiling point” to mean a temperature “measured in the reaction mixture and not in the vapor phase.”  Based on this construction the court granted summary judgement of no infringement, either literally or under the doctrine of equivalents.  Dow appealed.

The CAFC, relying on a technical dictionary, technical treatises and preferred embodiments in Dow’s patent specification, construed “boiling point” to mean a higher temperature measured in the gas phase, and reversed.  The district court, in arriving at its different interpretation had declared that “the intrinsic evidence does not distinguish between a distillate boiling point and the reaction mixture temperature, and does not teach that any temperature should be measured in the vapor phase.”  The CAFC took issue with this position because “one of ordinary skill in the art would understand that the ordinary meaning of a codistillate boiling point involves measuring the temperature in the vapor phase.”  The CAFC found ample evidence, albeit extrinsic, in the record of the ordinary meaning.  The CAFC noted that “although technically extrinsic evidence, dictionaries may be consulted at any time to help determine the meaning of claim terms” and furthermore “non-scientific dictionaries are less preferable when defining technical words.”  The CAFC emphasized that “non-scientific dictionary definitions of ordinary words are rarely dispositive of their meanings in a technical context” and that “courts are free to consult scientific dictionaries and technical treatises at any time” (citing Vitronics).

The patent specification in this case did not explain how to carry out a claimed measurement.  Although not necessary, it is always helpful for a patent applicant to provide an overt description of how a claimed parameter is quantified, to prevent litigation problems such as that experienced by Dow in this case.

Jaswant S. Pannu and Jaswant S. Pannuy, M.D., P.A. v. Storz Instruments, Inc.
Decided July 25, 2001
Judge Mayer with Judges Friedman and Rader

*          Reissued claims that are broader in a manner directly pertinent to the subject      matter surrendered during earlier prosecution are impermissible

Pannu filed a patent application for an artificial lens that is implanted into the eye.  The PTO allowed claims after addition of narrowing language that recited the lens feature of a “circular arc having a diameter greater than the diameter of said lens body.”  Later, Pannu filed for a reissue and deleted the lens feature, while adding the limitation that a snag resistant means be “at least three times greater” width rather than “substantially greater than” a corresponding eye element.  Pannu then sued Storz for infringing these claims at the U.S. District court for the Southern District of California.  Judge William Dimitrouleas granted summary judgement of invalidity under the recapture rule and Pannu appealed.

The CAFC affirmed the invalidity judgement because Pannu violated the recapture rule, as analyzed by a three step determination.  One, claim 1 of the reissue lacked a limitation of and was broader than claim 1 of the original patent.  Two, the broader aspect of the reissued claim was related to previously surrendered subject matter, because the corresponding narrowed element was in the claims as first filed but had been added during prosecution of the original patent.  Three, although the reissued claims were materially narrowed in other aspects, they “were not narrowed in any material respect compared with their broadening” as the narrowing language “was not related to the shape of the haptics, but rather the positioning and dimensions.”  Thus, this case turned on how closely the altered element matched earlier file history amendments.

In the post Festo environment a patent applicant often seeks to avoid the kind of prosecution history estoppel seen here, which also blocks broader reissue claims.  A useful strategy in this context would be to file and obtain the narrower claims without amendment, providing greater freedom to pursue a broader reissue while avoiding the recapture rule.

In re Roemer   
Decided July 24, 2001
Judge Rader with Judges Michel and Lourie

*          An element of an interference count is not supported by a mere “obvious to       try”       suggestion from a patent in the interference

The Board of Patent Appeals and Interferences held Roemer’s reissue patent application claims to an improvement in a nuclear magnetic resonance imaging device unpatentable over a patent to Smith.  The Smith patent describes the use of shielding coils arranged outside the main magnet to protect the surrounding room from the NMR main magnetic field.  The Roemer application on the other hand describes protecting a uniform NMR field from eddy current effects of any gradient producing magnet.  The PTO held that all of the Roemer patent application claims corresponded to the interference count and were unpatentable over Smith.  Roemer’s claims were deemed obvious in view of Smith because the Smith specification mentions that the “external field cancelling method being presented here (allows) greatly reduced problems due to the eddy currents.”  Roemer appealed.

The CAFC vacated the unpatentability holding in a decision that reviewed physical differences between the two claimed processes because Roemer uses and claims a linear gradient, unlike Smith.  More importantly, the court found that the Smith disclosure was “not accompanied by any teaching of how to adopt the Smith invention for use as a shield for gradient fields” as claimed by Roemer.  Thus, Smith merely suggested the idea of external field cancelling, giving only “general guidance” while not rendering Roemer obvious and failing to meet a substantial evidence standard that Roemer’s claims correspond to the count.

One problem in this case was that during the interference Roemer accepted the patent judge’s determination that the count is not patentable.  Roemer then agreed that any claim in his reissue application that corresponds to the count is unpatentable over the Smith patent.  This concession prompted the Board “to take a short cut to determining invalidity.”  The Board did not winnow Roemer’s claims corresponding to the count to a smaller set before comparing the claims with the Smith reference and found that all claims were unpatentable.

Tegal Corporation v. Tokyo Electron America, Inc. (3 appeals)
Decided July 16, 2001
Judge Linn with Judges Lourie and Bryson

*          Proper interpretation of technology plays a major role in patent litigation

Tegal sued TEA in the Eastern District of Virginia for infringing its patent claims directed to plasma etchers that utilize three electrodes to handle two different circuits for generating an etching plasma.  Just before trial Tegal dropped its damage claim with the understanding that it no longer was entitled to a jury trial while pursuing an injunction, a purely equitable remedy.  TEA in turn asked the court for a jury trial, which the court denied.  During the bench trial, Judge James Spencer held that an asserted prior art reference by Itakura did not anticipate Tegal’s patent because Itakura did not show a third electrode as claimed by Tegal.  The court found literal infringement and willfullness, and declared the case exceptional, awarding attorneys fees and injunction relief to Tegal.  TEA appealed.

The CAFC affirmed the lower court’s decision that neither party had a right to a jury trial.  The plaintiff Tegal, lost that right when it chose to pursue an injunction against TEA and to forego damages.  TEA also did not have the right to a jury trial because TEA did not assert any counterclaims, only affirmative defenses.  The CAFC pointed out that “little analysis is required” on the issue of right to jury trial because both positions of the parties traditionally have been handled by a court of equity, not by an action in law.

The CAFC interpreted the Itakura prior art reference very differently from the district court.  The CAFC found that Itakura had three electrodes and in fact could not work without the three electrodes.  Accordingly, the CAFC vacated the lower court decision that Itakura did not anticipate as a clearly erroneous error.  Because the anticipation defense remained alive, the CAFC declared that “there is no prevailing party as of yet” and also vacated the findings of willfullness, exceptional case, award of attorney fees and the injunction.

This case shows the importance of successfully teaching technology to a court.  The drastic results of an injunction and award of attorneys fees in this case were predicated on a judge’s understanding (or lack of understanding) of how a multiple electrode/vacuum/plasma system works in silicon chip manufacture.  

International Nutrition Company v. Horphag Research Ltd. et al
Decided July 16, 2001
Judge Mayer with Judges Michel and Clevenger

*          An assignment contract for U.S. patent rights made in another country

            is honored in the U.S.

            The U.S. District Court for the District of Connecticut on summary judgement held that INC lacked standing to bring a patent infringement suit because INC had no patent rights under French contract law.  Rights to the invention arose in France where a French inventor assigned to both SCIPA and Horphag.  Later, SCIPA assigned those rights to INC, but Horphage successfully sued to void the assignment as being against French law.  A French court had declared the “assignment void for violating French statutory prohibitions against joint owners unilaterally assigning their ownership stakes in patents.”  INC appealed, arguing that U.S. law governs disposition of the patent rights.

The CAFC affirmed the district court in a decision that reviewed the principle of comity, whereby judgements in foreign jurisdictions are honored in the U.S., despite differences in law.  In this case, the CAFC determined that honoring the French court’s decision on patent rights does not violate any U.S. patent statute because “the question of who owns patent rights, and on what terms, typically is a question exclusively for state courts and not one arising under United States patent laws (and) [a] contractual agreement to apply French law as to ownership is just as valid as an agreement to apply the law of a particular state.”

This interesting case illustrates how legal judgements in foreign countries are treated at the same level as state law action in the United States when determining U.S. patent rights.

Joany Chou v. The University of Chicago et al.
Decided July 3, 2001
Judge Lourie with Judges Mayer and Bryson

*          A putative inventor who lacks potential ownership in a patent nonetheless          may sue to correct inventorship

            Chou, a former graduate student at the University of Chicago claimed that she should have been named as a coinventor of certain patent applications and sued her former professor and her University at the District Court for the Northern District of Illinois.  Judge James B Zagel held that “Chou lacked standing to seek correction of inventorship under 256 because she could claim no ownership of the patents” as her employment agreement with the University “surrendered all her rights to the University.”  The court also “determined that (the professor) had no duty as Chou’s advisor and department chairman to inform Chou of the status of the patent applications.”  Chou appealed.

            The CAFC disagreed with the District Court and held that Chou had standing to sue based on a “concrete financial interest…. albeit an interest less than ownership” arising, among other things, from the University policy of sharing royalty with inventors.  The appeal court pointed out that the putative inventor has the right to sue not only “for her own benefit’ but also “in the public interest of assuring correct inventorship designations on patents” and noted that being named as inventor also brought financial benefits. 

            In the appeal, Chou presented other legal arguments that had been dismissed by the district court.  One argument was the notion of fidiciary duty by the professor.  The CAFC found that “Chou has adequately pleaded the existence of circumstances that place on (the professor) a fiduciary duty…….and pleaded that (the professor) breached that duty by naming himself as an inventor of her discoveries.”  Thus, the CAFC reversed the dismissal and ordered the lower court to investigate charges of breach of fiduciary duty and fraudulent concealment by the professor to his student. 

            This case reflects the changing priorities of U.S. universities that profit from work performed by graduate students but which must follow the same laws that govern others who commercially exploit technology.

 Hallco Manufacturing Co., Inc. and Olof Hallstrom v. Raymond Foster
Decided July 6, 2001
Judge Plager with Judges Rader and Schall

 

*          A settlement agreement that does not reserve the right to contest patent            
            validity will prevent a later patent validity challenge.
 

            Foster sued Hallco for infringing patent claims to conveyers that move large loads into and out of trucks.  The parties settled their dispute during trial and the district court dismissed the action with prejudice.  Hallco then redesigned its conveyer but Foster threatened suit over the new design.  Hallco paid royalties under protest and filed a declaratory judgement action in the district court of the District of Oregon wherein Judge Owen M. Panner ruled, among other things, that Hallco was free to challenge the patent.  Foster appealed.         

 

The CAFC disagreed that Hallco was free to challenge patent validity and vacated the judgement in a decision that reviewed the development of claim preclusion law.  The court pointed out that unless a settlement agreement specifically reserves the right to contest patent validity, that right is lost.  Furthermore the court explained that “there is no legally dispositive difference for claim preclusion purposes between a consent judgement based on a settlement ….and a dismissal with prejudice which is based on a settlement (because) the public is best served by getting invalid patents declared invalid as early as possible.”  Thus, because Hallco “did not reserve the right to pursue the invalidity defense in later litigation” Hallco was blocked to raise this defense for infringement of “essentially the same” device later.

This case is consistent with other holdings from the CAFC which emphasize the primacy of private settlements in ending patent disputes..


 

Timothy L. Taylor v. PPG Industries, Inc.         
Order of July 11, 2001
Judge Gajarsa, with Judge Schall, Dissent by Judge Mayer


 

*          The CAFC allows an immediate appeal to “materially advance” the ultimate                   termination of litigation 

            Taylor sued PPG under numerous state law and federal antitrust law grounds in the U.S. District Court for the District of Louisiana.  A key issue was whether PPG is a co-owner of the Taylor patent and thus was free to publicize and rely on such ownership, because Taylor charged PPG with knowing misrepresentation of patent ownership and other bad acts under state law.    

 

PPG petitioned the CAFC to allow an interlocutory appeal, arguing that before continuing litigation at the lower court, the CAFC should first rule on its defense that federal patent law preempts many of Taylor’s state law claims.  PPG argued, and the CAFC agreed that whether co-ownership is the same as complete ownership in determining whether a party cannot be held liable for publicizing its patents is an unsettled issue.  The CAFC, in a short order granted permission for PPG’s appeal because the state law claims involve an unclear patent law issue and “an immediate appeal may materially advance the ultimate termination of the litigation.”  Chief Judge Mayer dissented, arguing that Taylor should try his Louisiana law claims before a jury before having to defend an appeal to invalidate the district court’s order based on an argument to extend existing (patent) law.”

The split in the CAFC for this case probably reflects a difference in opinion within the CAFC on how active the CAFC wants to be in resolving disputes.  The dissent admitted that the CAFC had the right to allow the appeal but that the CAFC “should husband its resources and allow interlocutory appeals only in extraordinary circumstances.”  It will be interesting to see whether easier access to the CAFC for interlocutory appeals becomes a trend.

Durel Corporation v. Osram Sylvania, Inc.
Decided June 27, 2001
Judge Lourie with Judges Plager and Gajarsa

*          A claim term that is supported by a narrow range of examples and specific         teachings may be construed narrowly during infringement litigation

            Durel sued Sylvania in the District Court for the District of Arizona for infringing Durel’s patent claims to fluorescent light phosphors having clear metal oxide coatings that resist water absorption.  Sylvania stipulated to infringement after Senior Judge Edward Rafeedie construed the claim term “metal oxide coating” to include as much as 5.6% hydrogen in metal hydroxides, as found in Sylvania’s particles.  Both sides appealed to the CAFC on various grounds.

The CAFC interpreted the claims more narrowly than the lower court and found no infringement as a matter of law, mooting other issues.  The specification alone prompted the CAFC’s narrow definition that “metal oxide” not include 5.6% hydrogen as a “minor amount of impurity” because the specification contained “no disclosure of metal hydroxides” and further “teaches that oxide hydration should be minimized.”  Finally, the CAFC pointed out that “if the inventor had intended to equate metal oxides with metal hydroxides, he could have so stated and avoided exclusively exemplifying metal oxides as binary compounds.”

This case is a reminder of the importance for providing a wide range of examples, qualified exceptions and broad definitions within a patent specification to obtain broadly interpreted claims.  The CAFC, in this regard, rejected extrinsic evidence (a research publication) offered in support of a broader definition, because that evidence was contradicted by the specification.

David M. Rapoport v. William C. Dement et al.
 Decided June 28, 2001
Judge Clevenger with judges Rader and Gajarsa

*          Inherency in a prior art reference to support anticipation cannot be based on      probabilities or possibilities

The USPTO Board of Appeals and Interferences awarded priority for a method of use invention of treating sleep disorder with the pharmaceutical buspirone to Dement (Stanford University) and denied priority to Rapoport (New York University).  The main issue on appeal to the CAFC was whether Rapoport’s earlier publication that described the use of buspirone three times a day to treat anxiety anticipated Dement’s inventive use of buspirone taken once at bedtime to prevent sleep apnea (a complication of snoring).

The CAFC affirmed, in a decision that turned on the issue of whether Rapoport’s earlier article inherently described Dement’s use of buspirone to treat sleep disorder.  The CAFC declared that the interference count was limited to “treatment of sleep apneas” because that language occurs before the word “comprising.”  The court then found that the cited prior art “focuses on the treatment of anxiety with buspirone” and only mentioned the possibility of using the drug for patients suffering from sleep apnea “for the purpose of treating anxiety in such patients.”  The publication described administration of 10 mg three times a day for treatment (and not 10-60 mg before bedtime according to the invention) and further cautioned that “[t]he preliminary results found among healthy subjects need to be confirmed.” The CAFC pointed out that Rapoport could not rely on a mere inference that the undescribed element of the invention was in the reference.  The court further noted that Rapoport had not even “attempted to demonstrate that the proposed dosage regimen in the (cited reference) would necessarily result in a therapeutically effective amount,” and thus did not meet his burden of proving inherency.

 Inherency comes up in an anticipation analysis because a claim element may not be discussed or appreciated by the author of anticipating prior art.  The CAFC emphasized that before a reference can be said to anticipate an invention, the inherent (hidden) feature must be proven as a certainty and the fact that it “may result from a given set of circumstances is not sufficient.”

Samual Gart v. Logitech, Inc.

Decided June 26, 2001

Judge Linn with Judges Lourie and Rader

*          A notice letter to an alleged infringer under U.S.C. 287(a) should at least indicate the possibility of infringement

         Gart sued Logitech in the District Court for the Central District of California for infringing claims to a computer mouse design after Gart sent three notice letters to Logitech that invited Logitech to look at its patent and consider obtaining a license.  Judge Consuelo Marshall held on summary judgement that the first two warning letters did not provide sufficient notice.  Therefore Gart could not receive damages until after the date that Gart sent the third, more strongly worded letter to Logitech.  The court found that Gart’s earlier letters were deficient because they did not state clearly that Logitech infringed, and so did not put Logitech on notice of infringement.

Gart appealed to the CAFC, which reversed the lower court's decision that the two earlier letters were not specific enough or strong enough.  The CAFC pointed out that, as explained in SRI Int'l. (CAFC 1997) identifying "the patent and the activity that is believed to be an infringement, accompanied by a proposal to abate the infringement whether by license or otherwise" is sufficient for a notice letter.  Further, whether the alleged infringer thinks the letter accuses it of infringement is not relevant to the issue of sufficient notice.   The CAFC pointed out that the second letter by itself would not suffice because it provided a copy of the patent and merely stated that the accused infringer might find the patent "particularly interesting."  A patentee therefore should include in a notice letter to an alleged infringer more than a suggestion that the other side look at the patent.  The letter, as a minimum should indicate that the patentee thinks that the other side might infringe.  The letter may, for example, invite the other side to review the patent claims with respect to its products and suggest licensing discussions, without using the word "infringe" or other accusing language.

When writing a notice letter to an alleged infringer a patentee usually avoids threatening language to prevent giving the other side a basis for a declaratory judgement action.  A limit to making the letter soft, however, is that the letter should do more than just ask the other side to look at the patent.

Hakan Lans v. Digital Equipment Corporation et al.

Decided June 4, 2001

Judge Rader with Judges Plager and Schall

*          The patent marking statute 287(a) requires that a patentee, and not a third party give      notice of a patent right

Lans licensed his patent for a data display system to IBM but for tax reasons assigned the patent to his own company Uniboard.  Uniboard executed the license to IBM.  After DEC infringed the patent Lans filed suit in his own name at the U.S. District Court for the District of Columbia.  The court however, held that Lans lacked standing to sue because he did not own the patent.  Furthermore, although Lans had sent a notice letter to DEC, his company Uniboard could not benefit from the letter and lost the chance to sue DEC because the patent expired before Uniboard could sent a notice letter or file suit.  In other words, a warning letter from Lans, the owner of the assignee did not count as a letter from the true assignee.

The CAFC affirmed in a decision that reviewed whether notice of possible infringement can come from someone other than the assignee.  The CAFC pointed out that the Supreme Court had determined (Dunlap v. Schofield U.S., 1894) that notice of infringement "must be an affirmative act on the part of the patentee which informs the defendant of infringement" and notice is determined by "action of the patentee, not the knowledge of the infringer."  The CAFC pointed out that a notice letter must identify the true assignee because "knowledge of the patentee's identity facilitates avoidance of infringement with design changes, negotiations for licenses, and even early resolution of rights in a declaratory judgement proceeding."

Lans got into trouble because he set up a company (as many independent inventors do) to license his patent but failed to follow through by acting through that company against alleged infringers.

Group One, Ltd. v. Hallmark Cards, Incorporated

June 15, 2001

Judge Plager with Judges Lourie and Gajarsa

*          A patentee may offer or sell its patent rights more than one year before applying for a patent without creating a 102(b) on-sale bar

*          An offer for sale under 102(b) must be complete enough to create a binding contract

More than one year before filing its patent application Group asked Hallmark if Hallmark was interested in buying its machines and/or technology for producing curled ribbon "on a license/royalty basis."  Hallmark started building its own machines, however, after Group revealed details of its machine to Hallmark.  Group sued Hallmark at the U.S. District Court for the Western District of Missouri.  Judge Dean Whipple held on summary judgement that Group's patent was invalid on 102(b) on sale bar grounds because Group had offered its technology to Hallmark more than one year before filing the patent application.

The CAFC reversed the on sale bar holding because 102(b) requires that a commercial offer for sale "must meet the level of an offer for sale in the contract sense."  Group's early negotiation with Hallmark did not include specific terms such as price and quantity, but merely proposed or invited negotiations, rather than a formal offer.  The CAFC explained that a minimum condition for the bar is "a commercial offer for sale, one which the other party could make into a binding contract by simple acceptance (assuming consideration)."  The CAFC further explained that "mere advertising and promoting of a product may be nothing more than an invitation for offers" and are not offers for sale. 

The court commented and Judge Lourie emphasized in separate remarks that "a sale of rights in a patent, as distinct from the invention itself, is not within the scope of the statute, and thus does not implicate the on-sale bar."  Thus, an inventor or another with rights to an invention might offer a license or assignment more than one year before filing a patent application if that offer does not include specific items made by the technology.

Mycogen Plant Science, Inc., and Agrigenetics, Inc. v. Monsanto
Decided May 30, 2001
Judge Bryson with Judges Clevenger and Linn

*          Conception requires contemporaneous recognition and appreciation of the
            limitations of a claimed invention, and does not arise by fortuitous inherency as a
            by-product of a research program

            Mycogen sued Monsanto at the U.S. District Court for the Southern District of California for infringing patent claims to Mycogen’s patent.  The patent claims recite a process for designing a bacterial gene having greater activity in plants by modifying the gene with plant preferred codons.  This case is closely related to a previous lawsuit where the CAFC affirmed a district court decision that a Monsanto scientist was a prior inventor and Mycogen’s patent claims were invalid under 102(g).  The claims at issue in the earlier case recited “reducing the number of codons having CG” whereas the patent claims in this later suit merely recited “a greater number of codons preferred by the intended plant host than ……prior to modification.”  Although the patent specifications are virtually identical, the CAFC affirmed invalidity on 102(g) grounds in the earlier case but reversed invalidity under those same grounds for this second case based on differences in the claims.  The claims in this later suit recite a concept (altering codons to plant preferred codons) that was only inherent (unrecognized) at Monsanto’s early asserted conception date. 

Monsanto’s 102(g) invalidity defense in both cases hinged on Monsanto’s proving that its scientists had earlier conceived the idea of modifying the gene sequence for improved performance in plants.  Monsanto’s earliest evidence showed alteration of G and C bases, which are often found in plant preferred codons, but did not describe using plant preferred codons.  Conception of the earlier litigated patent claims, which recite the G and C differences thus were supported by the evidence.  The claims in this later case however merely recited matching gene sequences that are more suitable for plants.  The CAFC pointed out that the same evidence used previously “is not enough to constitute conception (because) that result was merely a by-product of the Monsanto scientists’ research program, rather than an independent objective.” 

On the surface the different decisions based on very similar claims, very similar patents and the same evidence of conception indicates the difficulty in proving conception.  However, the problem that prompted the different holdings of the cases was that an important claim element in the later case was only inherent (not recognized) at the early conception date.  Monsanto lost its prior invention defense because inherency, although often used to invalidate claims for 102(b) art, does not apply for conception under 102(g).  

Acromed Corporation v. Sofamor Danek Group Inc. and Danek Medical, Inc.
Decided June 8, 2001
Judge Rader with Judges Michel and Linn

*          Coinventorship requires more than the work of an ordinary skilled artisan
            following instructions

            Acromed sued Sofamor Danek for infringing Acromed’s patents claims that recite a plate and screw system for stiffening vertebrae by tapping into them.  During development of the invention the inventor requested Janson, a machinist, to modify pin screws that attach to bone, and to design a plate aligned with the bones via a pin that can “sink in and stays right there.”  Janson put arcuate recesses into a plate that block the screws from sliding.   Acromed then filed for a patent with claims that recite the arcuate recesses.  After Janson became an employee, Acromed asked Janson to sign a declaration/power of attorney to add him as a named co-inventor of the application and for a formal assignment of his rights to Acromed.  Janson refused and shortly thereafter signed an agreement with Danek to assign his “patent rights” for $150,000.  Later when Acromed sued Danek for infringement, Janson’s possible inventorship of the patent played a major role in Sofamor Danek’s defense of invalidity for improper inventorship.

The U.S. District Court for the Northern District of Ohio, Senior Judge Ann Aldrich granted judgment as a matter of law that the Acromed patent is not invalid for improper inventorship because Danek provided insufficient evidence of inventorship.  The CAFC affirmed, in a decision that carefully reviewed the claim elements of the affected patent and Janson’s contribution to the invention.  The CAFC began its analysis of Janson’s contribution by restating that “conception is the touchstone of inventorship” but explained that “[b]eyond conception, a purported inventor must show that he made a contribution to the claimed invention that is not insignificant in quality, when that contribution is measured against the dimension of the full invention, and [did] more then merely explain to the real inventors well-known concepts and/or the current state of the art” (citing Pannu v. Iolab Corp, 1998).  In this case Janson provided no corroboration for his assertion that he conceived the entire plate and screw combination.  His corroborated work of “[c]ountersinking the slots in the spine plate, however, was not an inventive conception.”  Thus, the CAFC agreed with the district court that Janson’s work was not “more than the work of an ordinary skilled machinist following instructions.”

It is often difficult to determine coinventorship when an assistant’s contribution to a project is translated into claim language as in the case here.  The CAFC indicated that an inventive principle must be found in the contribution for that contribution to rise to the level of coinventorship.  The court pointed out in this regard that “[v]irtually all inventions are combinations and virtually all are combinations of old elements” and that “[T]he entire combination, ……. renders (the claim) patentable.” 

Crater Corporation v. Lucent Technologies, Inc., AT&T Corp. and U. S.
Decided June 6, 2001
Judge Schall with Judges Mayer and Newman

*          A private party acting on behest of the United States is immune from suit at a    

district court under 28 U.S.C. 1498

Crater sued Lucent in the U.S. District Court for the Eastern District of Missouri for alleged infringement of claims to an underwater coupling device.  The defendants argued that all of their infringing activities were “performed for the government and with the government’s authorization and consent.”  The court dismissed the suit (including state law claims) for lack of jurisdiction grounds because under 28 U.S.C. 1498(a) a private party cannot be held liable for infringement for any goods “used or manufactured by or for the United States.”  Lucent appealed to the CAFC.

 The CAFC held that the district court properly granted summary judgment on Lucent’s affirmative defense under 28 U.S.C. 1498(a) but the court erred in dismissing Crater’s complaint for lack of jurisdiction.  The CAFC noted that “all of the evidence that was produced during discovery indicated that Lucent’s work on the allegedly infringing coupler was done for the government” and Lucent properly established this affirmative defense to infringement.   However the district court should have found no infringement on those grounds instead of dismissing for lack of jurisdiction, and should not have dismissed the related state law claims for the same lack of (supplemental) jurisdiction.

Intergraph Corporation v. Intel Corporation
Decided June 8, 2001
Judge Newman with Judges Rader and Gajarsa

*          Retrial of previously resolved issues is barred by the doctrine of law of the case

Intergraph sued Intel over antitrust violations after Intel withheld chip information and new samples in response to an Intergraph lawsuit over Intergraph’s “clipper” patent.  The case was litigated at the Northern District of Alabama and appealed to the CAFC in 1999.  The CAFC held then “that Intergraph had not established grounds on which to litigate whether Intel was a ‘monopolist,’ for Intergraph’s asserted injury did not derive from anticompetitive actions by Intel.”  On remand the district court held that the CAFC’s decision precluded re-litigation of the antitrust issues, under the doctrine of “law of the case,” which bars retrial of issues that were resolved previously.  Intergraph argued, however, that it had new anticompetitive evidence and appealed again to the CAFC.

The CAFC affirmed the district court decision not to open litigation and pointed out that Intergraph did not present a sufficient reason warranting departure from the law of the case.  Intergraph’s evidence was not new because Intergraph had discovered that evidence well before the earlier appeal to the CAFC.  Further, there had been no change in controlling legal authority warranting re-litigation.  Finally, Intergraph presented no sound reason showing that the earlier decision was clearly incorrect and that preservation of the decision would work a manifest injustice.

Apotex USA, Inc. v. Merck & Co., Inc.
Decided June 8, 2001
Judge Lourie with Judges Clevenger and Linn

*          The ultimate burden of proving patent invalidity under 102(g) by clear and

            convincing evidence remains with the challenger during litigation

Nine years after it commercialized its Vacotec® drug Merck revealed its manufacturing process during Canadian patent litigation against Apotex.  Merck’s Canadian patent that was the subject of the Canadian litigation claimed the drug formulation but not the method of manufacture.  Soon after Merck’s testimony in Canada, Apotex filed a patent application at the U.S. PTO claiming Merck’s method of manufacturing Merck’s drug.   Apotex obtained a U.S. patent on the method and then sued Merck in the district court for the Northern District of Illinois.  The court granted summary judgment of patent invalidity under 102(g) for Merck in view of Merck’s earlier invention.  Apotex appealed to the CAFC.

The principal issue in the appeal was the of burden of proof in determining suppression or concealment for a 102(g) validity defense during infringement litigation in view of Merck’s apparent concealment of details of its manufacturing process.  The CAFC analogized the situation of the patentee to the second to invent in an inference proceeding as benefiting from the presumption of validity.  That is, a challenger of patent validity under 102(g) needs to prove that the invention was made in this country by another via clear and convincing evidence.  Then the patentee has to produce evidence sufficient to create a genuine issue of material fact concerning whether the prior inventor had suppressed or concealed the invention.  Finally after the patentee has satisfied its burden , the party alleging invalidity must rebut any alleged suppression or concealment with clear and convincing evidence to the contrary.

The CAFC affirmed invalidity under 102(g).  Apotex succeeded in showing an inference of suppression and concealment from a five year delay between Merck’s first commercial use and Merck’s publishing the ingredients used in the formation.  Merck, however, rebutted that inference by publishing (via testimony in the Canadian trial) its method prior to Apotex’s U.S. patent application filing. 

Biotec Biologische Naturverpackungen Gmbh & Co. KG.v. Biocorp, Inc. and Novamont,

Decided May 14, 2001
Judge Newman with Judges Mayer and Schall

*          An attorney error during prosecution does not control if the error would be apparent to an         interested reader

            Biotec sued Biocorp for infringement of process claims to starch based plastic material imported from Italy.  The U.S. District Court for the central district of California (Judge Edward Rafeedie) granted summary judgement of validity and enforceability in Biotec’s favor.  A jury then found Biocorp liable for infringement or inducement of infringement.  Biocorp appealed, arguing that the claim term “substantially water free” should be interpreted more narrowly, and that its product does not infringe the properly construed claims.

            The CAFC affirmed the lower court’s interpretation of substantially “water free” to mean less than 5% water content in the final product and sustained the verdict.  The defense argued that Biotec’s attorney had admitted (albeit mistakenly) a narrow claim meaning during prosecution.  The prosecuting attorney erroneously had stated that starch used for the process was “water free,” implying an interpretation that would preclude finding infringement by the accused process.  The CAFC pointed out that the attorney had made other statements which contradicted this one “making clear that pre-dried starch is not the only starting material.”  The CAFC deemed this error not limiting because “[a] person of reasonable intelligence would not be misled into relying on the erroneous statement, for it is contrary not only to the plain language of the claims and the specification, but also to other statements in the same prosecution document.”

            In recent months the CAFC has not often contradicted claim constructions from lower courts.  In this case the CAFC noted that the most important claim construction issue, namely “how to conduct the (% water) calculation,” was “fully aired at trial” and did not comment in depth on construction per se.

Harry Schoell v. Regal Marine Industries, Inc and Emerald City Harbor, Inc.
 Decided April 17, 2001
Judge Plager with Judges Newman and Schall

·                    Statements made during prosecution can limit claim meaning and preclude a literal infringement finding

Schoell sued Regal in the District Court for the Middle District of Florida for allegedly infringing claims for a boat hull that recite among other things, an aft section having “a generally flat keel.”  A magistrate judge recommended summary judgement of no literal infringement based on interpretation of the term “generally flat” to mean “an aft keel that is mostly horizontal”  because Regal’s aft keel has a 12 degree dead rise.  The magistrate recommended no infringement under the doctrine of equivalents because the only evidence submitted for equivalence was a conclusory statement by the defendant that “he believed there was equivalence based on his tests of hulls allegedly similar to the Regal.”  The court adopted the recommendations and Schoell appealed.

The CAFC found ample support in the written description and prosecution history for the construction meaning “mostly horizontal.”  Schoell had argued for a horizontal interpretation for the “generally flat keel” term during patent prosecution to overcome obviousness from a 12 to 18 degree aft keel prior art reference.  Thus Schoell “essentially conceded that a twelve degree aft keel” was “generally flat” during prosecution.

At the summary judgement stage Schoell submitted his conclusory affidavit of equivalence to show that a doctrine of equivalents issue necessitated trial.  However, the CAFC dismissed the affidavit with the criticism that “[t]he doctrine of equivalents is not a talisman that entitles a patentee to a jury trial on the basis of suspicion.”

 Eli Lilly and Company v. Barr Laboratories et al.
Decided May 30, 2001
Judge Gajarsa with Judges Mayer and Friedman

*          Double patenting may occur when later patents claim previously unknown features         such as mechanisms of drug activity that are inherent in earlier patents

The CAFC accepted a rehearing petition for its August 9, 2000 decision of Eli Lilly v. Barr et al.  The CAFC assigned the rehearing to a panel for revision of the double patenting section.  In its opinion the new panel maintained the earlier panel’s reversal of a District Court’s decision not to invalidate certain claims in view of double patenting.

This case addresses the double patenting issue created when a patentee obtains multiple patents for an invention by claiming, in later patents, inherent features of how the invention works that had not been known and described in an earlier patent specification.  Lilly filed its first patent application in 1974 relating to the drug Prozac.  Lilly subsequently filed for and obtained patents directed to different aspects of Prozac, including separate patents for the treatment of anxiety, depression, and hypertension.  One of these patents, the ‘549 patent, differed mainly from the first patent by reciting the biochemical mechanism of Prozac.  Claim 7 of the ‘549 patent recites “[a] method of blocking the uptake of monoamines by brain neurons in animals comprising (administering the drug).”  The CAFC panel determined that “the only difference between claim 1 of the (earlier) patent and claim 7 of the ‘549 patent is that the former addresses a method of treating anxiety ….. while the latter claims a method of using (the drug) to block serotonin uptake in animals.”  The panel concluded that all evidence in the case indicated that “administration of (the drug) naturally and inherently inhibits the uptake of serotonin” and thus the first patent anticipated the second on inherency principles.

When filing multiple applications to protect an important discovery a practitioner can not rely on a later discovered mode of action or other inherent property by itself for distinguishing over earlier patent claims.

Troy Shockley and Excalibur Tool & Equipment Co., Inc. v. Arcan, Inc. et al..
Decided May 9, 2001
Judge Rader with Judges Schall and Bryson

 

*          The “maximum recovery rule” may allow downward adjustment of an excessive jury      award to that which “could properly have awarded based on the relevant evidence”

*          A new rule affecting patent prosecution applies if in effect on the patent issue date

            The U.S. District Court for the District of South Carolina (Magistrate Judge William M. Catoe Jr.) granted a summary judgement motion upholding validity of Shockley’s reexamined U.S. Patent claims to a mechanic’s creeper.  A jury then awarded damages of $3.8 million, including $3 million for “future lost profits.”  Arcan appealed to the CAFC and argued that the high jury damages award was not supported by evidence.  Arcan further argued that Schockley’s reissue patent was invalid because Schockley did not follow the rules when pursuing reissue.

High possible damages arose in this case due to a large amount of product sold and the prior user’s rights created when Arcan manufactured in China after issuance of narrow patent claims but before reissue of broader claims that covered Arcan’s product.  Arcan had offered to sell the products to various outlets, including Costco and Sam’s Club and some of Arcan’s attempted sales activities possibly covered large volumes.  Because the “offer to sell” language added to 35 U.S.C. 252 (1994) did not change the statutory requirement that absolute intervening rights apply only to existing products, the CAFC affirmed the district court’s denial of absolute intervening rights for Arcan’s sales to certain distributors.

The CAFC noted that under both 4^th circuit procedural law and CAFC law the “maximum recovery rule” controls jury awards.  This rule provides for decreased damages if the awarded damages exceeds that which properly could have been awarded “based on the relevant evidence” and that a damages verdict must be set aside if against “the clear or great weight of the evidence”  (citing Unisplay 1995).  In this case the plaintiff could not show sufficient evidence of a “but for” causation and the damages expert “used a benchmark (for sales number) without any basis in reality” by relying on high proposed contract figures for a contract with Sam’s Club that did not materialize “despite many attempts.”

Arcan separately argued that the reissue patent was invalid because Shockley did not follow the stringent requirements (i.e. declaring with specificity the error, how it arose etc) of the reexamination statute in effect when reexamination commenced.  The CAFC dismissed that defense with the explanation that the administrative rules in effect upon the issue date of a patent apply unless specified otherwise in the statutes.  Thus, the defendant could not air his best challenge to Shockley’s reissue as the new and more relaxed reissue rules came out just before Shockley’s patent reissued.

Troy Shockley and Excalibur Tool & Equipment Co., Inc. v. Arcan, Inc. and Telesis Corporation and Sunex International, Inc.
Decided May 9, 2001
Judge Rader with Judges Schall and Bryson


 

*          A new rule affecting patent prosecution applies if in effect on the patent issue date

*          The Federal Circuit’s “maximum recovery rule” may be used to remit an excessive         jury award to the highest amount the jury properly “could properly have awarded            based on the relevant evidence”

The U.S. District Court for the District of South Carolina (Magistrate Judge William M. Catoe Jr.) granted summary judgement upholding validity of Shockleys reexamined U.S. Patent claims to a mechanic’s creeper.  A jury subsequently awarded damages of $3.8 million, including $3 million “future lost profits.”  The case was appealed to the CAFC, which considered the ramifications of new statutory language “offer to sell” on prior users rights for the patent, which issued two months after the law came into effect.

Shockley obtained wider patent claims by reexamination after Arcan began Chinese manufacture of its device that infringed only the reexamined claims.  Arcan offered to sell products to other outlets, including Costco and Sam’s Club, and manufactured product both before and after reexamination .  Shockley received a series of procedural rejections in the reexamination, and the reexamined patent did not issue until 2 months after 35 U.S.C. * was amended to include “offer to sell” as an infringing act..  The determination of damages was important in this case due to a high amount of product sold and the prior user’s rights created when Arcan manufactured after issuance of the narrow patent claims but before issue of broader reexamination claims that covered Arcan’s product.  Because the “offer to sell” language added to 35 U.S.C. 252 (1994) did not change the statutory requirement that absolute intervening rights apply only to existing products, the CAFC affirmed the district court’s denial of absolute intervening rights for Arcan’s sales to Sam’s.

The CAFC agreed with the district court that “absolute intervening rights” do not protect Arcan’s importation and sale of 10,000 devices because those devices had not been manufactured before the reissue date.

The defendant argued that the reissue patent was invalid because Shockley did not follow properly,. the stringent requirements (declaring with specificity the error, how it arose etc) of the reexamination statute.  The CAFC dismissed that defense with a careful review of how administrative rules apply that are in effect upon the issue date of a patent, unless the new rule specifies otherwise.  Under the amended rules Shockley’s reexamination actions were not challenged by the defendant.

The CAFC reviewed the jury award according to the “maximum recovery rule” of the 4th circuit but noted that the Federal Circuit law used the same rule to evaluate excessive jury awards.  Under this rule, an award is excessive if it exceeds that which properly could have been awarded “based on the relevant evidence” or a damages verdict must be set aside if against “the clear or great weight of the evidence”  (citing Unisplay 1995).  If the award is excessive a plaintiff has the “option of a new trial on damages or the remitted damages award.”  In the present case the plaintiff could not show sufficient evidence of a “but for” causation and the damages expert “used a benchmark (for sales number) without any basis in reality” noting that no sales to Sam’s Club occurred “despite many attempts.”

Biotec

Biotec Biologische Naturverpackungen Gmbh & Co. KG.v. Biocorp, Inc. and Novamont,

Decided May 14, 2001
Judge Newman with Judges Mayer and Schall

*          An attorney error during prosecution does not control if the error would be apparent to an         interested reader

            Biotec sued Biocorp for infringement of process claims to starch based plastic material imported from Italy.  The U.S. District Court for the central district of California (Judge Edward Rafeedie) granted summary judgement of validity and enforceability in Biotec’s favor.  A jury then found Biocorp liable for infringement or inducement of infringement.  Biocorp appealed, arguing that the claim term “substantially water free” should be interpreted more narrowly, and that its product does not infringe the properly construed claims.

            The CAFC affirmed the lower court’s interpretation of substantially “water free” to mean less than 5% water content in the final product and sustained the verdict.  The defense argued that Biotec’s attorney had admitted (albeit mistakenly) a narrow claim meaning during prosecution.  The prosecuting attorney erroneously had stated that starch used for the process was “water free,” implying an interpretation that would preclude finding infringement by the accused process.  The CAFC pointed out that the attorney had made other statements which contradicted this one “making clear that pre-dried starch is not the only starting material.”  The CAFC deemed this error not limiting because “[a] person of reasonable intelligence would not be misled into relying on the erroneous statement, for it is contrary not only to the plain language of the claims and the specification, but also to other statements in the same prosecution document.”

            In recent months the CAFC has appeared reluctant to contradict claim constructions from lower courts.  In this case the CAFC noted that the most important claim construction issue, namely “how to conduct the (% water) calculation,” was “fully aired at trial” and did not comment in depth on construction per se.

 Inamed Corp. et al. v. Lubomyr I. Kuzmak
Decided May 15, 2001

Judge Clevenger with Judges Linn and Dyk

*          A patentee-licensor creates personal jurisdiction for declaratory judgement from            negotiating licenses from out of state and sending an infringement letter

            The U.S. District Court for the Central District of California dismissed Inamed’s declaratory judgement action against patentee Kuzmak for lack of personal jurisdiction.  Kuzmak had licensed his patents for surgical obesity treatment devices and methods to Inamed but sent an infringement letter to Inamed following early termination of their relationship.  In that letter, Kuzmak declared that Inamed “is clearly a willful infringer of this patent.”  Inamed, a California resident, responded with a California declaratory judgement suit against Kuzmak, a New Jersey resident.   Kuzmak appealed Judge Margaret Morrow’s dismissal of that suit to the CAFC.

            The CAFC reversed after finding that the facts of this case meet the three part test of Akro for personal jurisdiction.  First, Kuzmak “purposely directed” his activities to California because Kuzmak (a) negotiated licenses with Inamed, a California resident via telephone and mail and (b) sent an infringement letter to Inamed.  Importantly, the CAFC declared that mailing the infringement letter to California by itself failed to create personal jurisdiction.  Rather, “other activities” were required to meet the “minimum contacts” requirement of International Shoe.  In this case, however, “Kuzmak’s negotiation efforts, although accomplished through telephone and mail from New Jersey (are) activities ‘purposefully directed’ at residents of California.”  The second Akro factor, namely, that Inamed’s claim “arises out of or relates to” the purposeful activities was easily met because “[t]he central purpose of a declaratory action is often to clear the air of infringement charges.”  The third factor, which Kuzmak had a high burden to resolve in his favor, was whether the exercise of personal jurisdiction over him was not “reasonable and fair.”  Here, the CAFC pointed out that “cases where a defendant may defeat otherwise constitutional jurisdiction should be limited” to rare situations because of the forum state’s “manifest interest” in “providing its residents with a convenient forum for redressing injuries by out-of-state actors.”

            This case teaches how a patentee acquires personal jurisdiction for declaratory judgement actions when communicating with an infringer from another state.  One fact favoring jurisdiction was that the infringement letter created “reasonable apprehension” of suit, indicating that the patentee “was aware” of the significance (treble damages and attorneys fees) from his written contacts with California.  However, the infringement letter by itself did not create the jurisdiction.  Extensive contacts via telephone and letters that had culminated in four license agreements satisfied the minimum contacts issue.  The CAFC did not provide guidance as to what constitutes minimum contacts below which jurisdiction would not exist.  However Kuzmak’s contacts had created license fees from California totaling over one million dollars.

Tegal Corporation v. Tokyo Electron Company and Tokyo Electron America, Inc.
Decided May 14, 2001
Judge Bryson with Judges Lourie and Linn

*          Active inducement of infringement requires an affirmative act, even when the      inducer wholly owns, but does not control the direct infringer

Tokyo Electron lost a bench trial to Tegal wherein Judge James Spencer of the District Court for the Eastern District of Virginia found willful infringement of Tegal’s patent claims to plasma etching systems.  The court, persuaded by evidence of infringement by Tokyo Electron’s subsidiary, enjoined Tokyo Electron from further direct infringement, contributory infringement, and inducement to infringement.  Tokyo Electron appealed the injunction.

The CAFC reversed, finding no evidence that Tokyo Electron violated the injunction.  The main issue was whether Tokyo Electron had an affirmative obligation to stop any of its corporate affiliates from selling or servicing infringing etchers.  The CAFC interpreted the language of statute 271(b) “whoever actively induces infringement” to mean “requiring an affirmative act of some kind” which requires “active steps knowingly taken.”  The CAFC further explained that a parent company is not responsible for acts of a wholly owned subsidiary in the “absence of evidence showing that the parent company either was an alter ego of the subsidiary or controlled the conduct of the subsidiary.”

This appeal might have turned out differently if Tegal had provided evidence (rather than just an assertion) that Tokyo Electron had knowingly transferred personnel, customer files or other support materials to its subsidiary for purposes of infringement.

Telemac Cellular Corp. v. Topp Telecom, Inc.
Decided April 25, 2001
Judge Gajarsa with Judges Newman and Lourie

*          A prior art reference anticipates under inherency principles even if a skilled        artisan would not have appreciated an undescribed element

Telemac sued Topp for infringing its business method patent to a mobile telephone service that automatically calculates at the telephone, charges for local, long distance, international and roaming services.  The U.S. district court for the Northern District of California held Telmac’s patent invalid over a prior art patent that describes a mobile phone that “computes and stores all detail records and charges.”

The CAFC affirmed the invalidity holding.  The patentee argued against invalidity on grounds that the prior art did not describe all four claimed billing categories and that inherency doctrine only applies when the evidence makes “clear that the missing descriptive matter is necessarily present in the thing described in the reference, and it would be so recognized by persons of ordinary skill.”  The CAFC, citing the MEHL/Biophile  case (Fed. Cir. 1999) countered that “inherency is not necessarily coterminous with the knowledge of those of ordinary skill in the art.  Artisans of ordinary skill may not recognize the inherent characteristics or functioning of the prior art.”  Furthermore, the court explained that the incomplete description in the cited art “might have been exemplary” leaving open the possibility of other billing schemes. 

Many business method patents should issue over the next few years.  Some of these patents similarly might be challenged on invalidity grounds in view of prior art having inherent features that were not considered during patent examination.

In Re Tsutomu Haruna and Sado Kita
Decided April 18, 2001
Judge Schall with Judges Friedman and Gajarsa

*          Case law pertaining to obviousness determinations of utility patents apply with    equal force to obviousness of design patents

Haruma filed a design application for a pre-recorded optical disk wherein the disk has a wide transparent region at its outer rim.  The U.S. PTO Board of Patent Appeals and Interferences upheld a final rejection of the design in view of a utility patent showing optical disks with wide outer regions covered with printing or labels.  The PTO concluded that the clarity and openness of Haruna’s design was obvious and expected from the conventional transparent material used for the design.

 The CAFC reversed because the Board failed to apply obviousness law, which applies “in equal force” to design claims wherein “the ultimate inquiry under section 103 is whether the claimed design would have been obvious to a designer of ordinary skill….whether the applicable prior art contains any suggestion or motivation…..”   The CAFC further commented that “[a] prima facie case of obviousness can be rebutted if the applicant . . .  can show ‘that the art in any material way taught away’ from the claimed invention” (citing In re. Geisler, Fed. Cir. 1997).  In this case the cited utility patent teaches to make the outer edge opaque to cover manufacturing defects, which leads away from (and not to) Haruna’s design.

Medtronic, Inc. v. Advanced Cardiovascular Systems, Inc. and Guidant Corp.
Decided April 20, 2001           
Judge Linn with Judges Michel and Dyk

           
*          A 112 (6) means plus function claim must be supported by a specification that   links corresponding structure with the recited function       

Medtronic sued the defendants in the district court for the district of Minnesota for alleged infringement of its claims for coronary artery stents made of wire coiled around a balloon that is expanded in place to hold open an artery.  The patent claims recite a coil structure as a “means for connecting adjacent (wire) elements together.”  Meditronics presented these “means for” claims in a preliminary amendment to an application having structure diagrammed in figures for a different purpose.  That is, the pending application already had highlighted “straight wires,” “hooks,” and “sutures” to illustrate a different function of preventing stent expansion during use.  The court interpreted the claim term “adjacent elements” as strictly limited to adjacent helically wound continuous wire.  The court based this interpretation on statements in the specification and in the preliminary amendment, which do not link properly the claimed function to “straight wires,” “hooks,” and “sutures.” Judge Rosenbaum granted judgement as a matter of law of non-infringement under this claim construction, prior to jury deliberation. 

The CAFC affirmed, in an opinion that stressed the need in a specification for a “clear link or association, as required by our case law, between the claimed function and the (structure).”  The CAFC cited this requirement as the “Braun test,” stating “[s]tructure disclosed in the specification is ‘corresponding’ only if the specification or prosecution history clearly links or associates that structure to the function recited in the claim.”  The CAFC explained that Medtronic failed to “tie a structure explicitly in its specification, relying instead on that which is inherent” in the specification when Medtronic added its means plus function claims by preliminary amendment.

It appears that Medtronic might not have appreciated a desired means plus function claim until after its original filing.  This case, like the Festo case of last year emphasizes the importance of arriving at final acceptable claims before filing an application.

Electro Scientific Industries, Inc. v. General Scanning
Decided April 18, 2001
Judge Rader with Judges Michel and Schall

 

*          California and the Federal Rules leave cost awards to a district court’s   discretion

The U.S. District court for the Northern District of California granted a summary judgement motion holding that General literally infringed Electro’s patent to laser systems/methods of curing defective memory cells by ablation with infrared laser light.  This case decision reviews many legal theories, including determination of prejudgement interest rate, enhanced damages, failure to timely raise infringement theories, proper jury instructions, use of an opinion to show good faith, and proper following of local rules for timely filing a motion in California.

The CAFC affirmed all aspects of the lower court opinion, including post-trial motions for denial of enhanced damages and the district court’s awarding of a reduced prejudgement rate.  The CAFC did not challenge the lower court’s recalculation of a prejudgement interest to an amount that was a third lower than the plaintiff’s calculation because “the district court must be guided by the purpose of prejudgement interest, which is to ensure that the patent owner is placed in as good a position as he would have been had the infringer entered into a reasonable royalty agreement.”  In this case, the district court used a simplified calculation of prejudgement interest because “accounting for all tax implications made the calculation too complex for accuracy.”  Another interesting facet of this case is the court’s review of what can happen in the district of Northern California when an attorney mistakenly files a motion late. 69999.9998

Bristol-Myers Squibb Company v. Ben Venue Laboratories, Inc. et al.
Case No. 00-1304
Decided April 20, 2001

*          Claims to a medical treatment that do not recite a clinical outcome are anticipated          by publication of a failed study that nevertheless reads on the claims.

The defendants filed an Abbreviated New Drug Application (“ANDA”) with the FDA for approval to market an anti-cancer taxol regimen, alleging that Bristol-Myers’ patent claims to the same regimen (which uses a premedication step to limit side effects) were invalid over prior art.  The prior art described a similar but failed attempt and suggested premedication, but did not specify any compound for premedication.  In response to the ANDA filing, Bristol-Myers sued for infringement.  A court granted summary judgement of patent invalidity against Bristol-Myers, holding that both broad claims to generic premedication and narrow claims that recite premedication species of compounds are anticipated by the reference.

The CAFC agreed that the broad claims were anticipated despite the failure of the prior art because the claims did not recite an effectiveness or a therapeutic result.  The reviewing court, however, reversed summary judgement of invalidity of the narrower species claims because the district court failed to draw all inferences in favor of the non-movant for summary judgement.  In particular, the defendant did not provide any evidence that the recited species likely would have been used by a skilled worker following the prior art suggestion. 

The patentee in this case would have avoided a prior art problem if it had added a functional limitation (a favorable clinical outcome) to the claims.

Aqua Marine Supply, v. Aim Machining, Inc. et al.
Case No. 00-1409
Decided April 19, 2001

*          An agreement that settles a patent invalidity dispute between two litigants is not binding on a court

            Aqua sued Aim for infringing Aqua’s patent claims to a boat lift.  A court granted summary judgement of invalidity based on the on-sale bar of 35 USC 102(b).  The parties then executed agreements that explicitly affirmed patent validity and required the parties to file a proposed court order vacating the invalidity judgement under rule 60(b) of the Federal Rules of Procedure.  The district court dismissed the filed order (vacatur) because the case was not “exceptional” or an “extreme situation warranting equitable relief.”

            The CAFC dismissed Aqua’s appeal against this undesirable outcome of its settlement as moot because Aqua “and the defendants are no longer adversaries.”  The CAFC remarked that Aqua’s action constituted “evasion of the Supreme Court’s limitations on vacatur” set forth in Bancorp because “where mootness results from settlement, ….the losing party has voluntarily forfeited his legal remedy by the ordinary processes of appeal or certiorari, thereby surrendering his claim to the equitable remedy of vacatur.”  The court suggested that Aqua still might “avoid collateral estoppel by arguing that it did not have a full and fair opportunity to litigate the issue of invalidity.”

            A patentee should consummate a settlement agreement prior to a court challenge of patent validity.

Bridgestone/Firestone Research, Inc. v. Automobile Club De Lquest De La France
Case No. 00-1036 (Cancellation No. 19,683)
Decided March 6, 2001

*          Specific evidence of reliance is not required for a latches defense to infringement

Bridgestone registered its LEMANS trademark in 1963 for automobile tires.  The Auto Club (France) registered its mark “LE MANS,” also for auto tires, on the supplemental register in 1986.  Bridgestone petitioned the U.S. PTO to cancel the Auto Club’s LE MANS mark in 1991.  The U.S. PTO Trademark Trial and Appeal Board instead cancelled the Bridgestone mark in response to Auto Club’s claim that Bridgestone’s use of the LEMANS mark falsely indicates a relationship with the Auto Club. Bridgestone’s affirmative defense of latches, namely that the Auto Club had waited 27 years while Bridgestone used its own mark did not persuade the district court.

Bridgestone’s defense of latches, although not accompanied by specific evidence of reliance, convinced the CAFC to reverse.  The CAFC held that the PTO committed legal error in requiring specific evidence of reliance and thus Bridgestone did not show unreasonable delay by the Auto Club in asserting its rights.  The reviewing court declared that “constructive notice, widespread commercial use…accompanied by the absence of a reasonable excuse by the Automobile Club for its inaction” required a latches finding.  The court explained that “[t]he board’s requirement of ‘specific’ evidence of ‘reliance’ on the Automobile Club’s silence could relate to proof of estoppel, but it does not apply to latches” because “reliance is not a requirement of latches but is essential to equitable estoppel.”

 

Waymark Corp. and Caravello Family LP, v. Porta Systems Corp.
Case No. 00-1327
Decided April 6, 2001

*          Infringement under 271(f)(2) does not require a completed infringing      embodiment outside the United States, only an intention to infringe

            The defendant in this patent infringement case helped develop the patented invention.  After bankruptcy of the patentee, defendant Porta tested and shipped parts to Mexico, intending to build units (as described in the patent claims) there.  The patent rights were reassigned and the new assignee filed an infringement suit, prompting Porta to cease all work.  A district court granted summary judgement of non-infringement under 35 U.S.C. 271(a) and declared that infringement under 271(f) (2) was not possible because Porta did not complete a claimed system, either inside or outside the United States.”

            The CAFC affirmed no infringement under 271(a) “because (the defendant) tested only components of the Battscan combination within the United States…… and …. no wrong is done the patentee until the combination is formed (citing the Supreme Court Deepsouth case.)  The court, however, remanded to determine whether the defendant intended that components sent outside the country would be combined in a manner that would infringe the patent.  The court held that infringement under 271 (f)(2) may occur by sending parts outside of the country even if a party merely intends that the parts be combined.

            The CAFC admitted that “infringement without a completed infringing embodiment is not the norm in patent law, but it is reasonable in the context of 271(f)(2)” because of “the difficult obstacle of proving infringement in foreign countries.”

Karsten Manufacturing Corporation v. Cleveland Golf Company
Case No. 99-1234  Judges Newman, Michael and Plager
Decided March 22, 2001

*          Preamble use of the term “correlated set” allows a competitor to avoid
            infringement      merely by marketing unmatched sets

*          Conflicting statements of purpose in prior art documents indicates lack of           motivation to combine for obviousness determinations

Cleveland won summary judgement that its golf clubs do not infringe one of Karsten’s patents having claims that recite in their preamble a “correlated set” of iron-type golf clubs because Cleveland marketed a club that did not meet the claim with clubs having the claimed features.  The CAFC affirmed this holding, with the comment that the term “does not simply refer to the prior art or to a possible use, but describes and limits the invention being claimed.” Both courts found a second patent not infringed because of arguments made during prosecution evincing a narrow claim construction and argument-based estoppel, precluding broadening under the doctrine of equivalents.

The lower court found narrow claims of a third patent invalid on obvious grounds in view of two references.  The CAFC reversed this last holding because neither reference provided motivation to combine.  Importantly, the CAFC noted that the documents contained “conflicting teachings” of the purposes for their respective but different “weighted iron” configurations.  The CAFC did not go so far as to conclude that teaching of conflicting purposes presumptively indicates lack of motivation to combine.  The court implied however, that such conflicted teaching, in the absence of any stronger statements to support motivation, shows a lack of motivation to combine.

Hitzeman, Levinson & Yansura v. Rutter, Valenzuela, Hall & Ammerer
Cases 99-1604,-1605 (Interferences Nos. 102,416; 102,989)Judges Michel, Linn and Dyk
Decided March 21, 2001

*          Arguing unexpected results constitutes an admission of a later conception date   determined by when test results were obtained

In two nearly identical interferences the Board determined that Hitzeman did not conceive hepatitis proteins formed as particles prior to Rutter’s reduction to practice.  The CAFC affirmed.

The contested invention was to antigen particles for hepatitis B vaccines that could not be made in bacteria.  Hitzeman argued that he had DNA, materials and tools from his previous successful work with interferon expression in yeast and a “hope” that the yeast would make a different protein (hepatitis B) in aggregated form and thus, had early conception of the complete invention of the aggregated antigen.  Hitzeman did not make the hepatitis protein and thus did not confirm the particulate form of the protein until a later date however.  Hitzeman argued during patent prosecution that (to overcome an obviousness rejection) his later data showing successful production of particles were “new and surprising” because yeast differ so much from other organisms.

The CAFC determined that Hitzeman did not appreciate that yeast could make the right form of hepatitis protein until Hitzeman actually tried it, and thus was limited to a later date, despite having an earlier “hope” that the experiment would work.  The CAFC declared that “it may be true in a scientific sense that the yeast ‘inherently’ produce the claimed particles, that does not mean that the ….. limitations are ‘inherent’ in a legal sense, such that the inventors need not establish specific conception of these features.”  Thus, Hitzeman’s “hope” of obtaining test results does not meet the standard enunciated in Burroughs Wellcome of a “specific settled, idea, . . . . not just a general goal.”

This interesting case shows that arguably unexpected results may limit the invention priority date to the later date when those results were obtained.

Kroll v. Finnerty, Chief Counsel for N.Y.State Grievance Committee,
Tenth Judicial District
Case No. 00-1176  Judges Michel, Smith and Gajarsa
Decided March 21, 2001

*          A state bar association may discipline a patent attorney who fails to report
            an office action to his client       

            The New York State Bar Association initiated disciplinary action against Kroll, a patent attorney and member of the N.Y. Bar in response to grievances filed by three of Kroll’s clients alleging overcharging, lack of promised service, and failure to timely report an office action.  Kroll filed a declaratory judgement action against the grievance committee arguing that the patent statutes that authorize the PTO to regulate the practice of patent law preempt the state bar’s authority to discipline an attorney for conduct arising out of patent prosecution practice.  The district court held that federal patent law does not preempt the state from disciplining a member of its own bar.  The CAFC agreed, stating “Kroll’s alleged misconduct involved reported ethical lapses having nothing to do with substantive patent law” but “concern breaches of the duties he swore to uphold as a condition of his membership in the Bar.”

The bar association had dismissed two of the grievances but maintained the grievance based on failure to report an office action to the client.

Netword, LLC v. Centraal Corporation
Case 99-1257  Judges Newman, Archer, and Clevenger  Clevenger dissents
Decided March 14, 2001

 

*          A patent specification in a difficult to understand technology may be relied
            on more heavily to construe patent claims narrowly

Netword sued Centraal for infringing claims to Netword’s software patent that describes a computer network having a system of sharing information with “client computers” that “devote resources with aliases.”  A district court awarded summary judgement that Centraal does not infringe.  The CAFC affirmed.

Claim construction issues dominated this case.  The patentee and a minority decision by Clevenger indicated that claim 1 does not require a local server computer to maintain a cache of aliases whereas the majority decision construed the claim more narrowly, avoiding infringement by Centraal.  The majority opinion relied on statements in the specification to arrive at its more narrow claim construction, stating that the claims do not “enlarge what is patented beyond what the inventor has described as the invention” within a longer comment on why it was relying on the specification to interpret the claims.  Despite its careful review of the specification judge Clevenger departed from the majority in interpreting the specification differently from the other two panel members.

The differences in claim interpretation between the majority and a minority indicates confusion in understanding how the claimed invention works.  It seems that the courts relied more on specific statements in the specification to clear up confusion with understanding complex technology in this new area of software and computer systems.  Perhaps the confusion acted against the patentee and resulted in a more narrow construed claim.  It also did not help the patentee’s case in this regard that the only testifying expert was that of the accused infringer.

Scimed Life Systems, Inc. v. Advanced Cardiovascular Systems, Inc.

Case No. 99-1499
Decided March 14, 2001

*          A patent description that explicitly defines an invention as having a specific         structure may be utilized to read that structural limitation into the claims

            SciMed sued Cardio for infringing SciMed’s patent claims to balloon catheters having two passageways (lumens) in the catheter body.  Cardio’s accused catheters employ side by side lumens.  Because SciMed’s patent specification describes a “basic sleeve structure for all embodiments of the present invention” a district court held summary judgement of no infringement based on a narrow interpretation (coaxially arranged lumens) of the claimed devices.

The CAFC affirmed, noting that SciMed’s patent specification clearly distinguished the advantages of the SciMed device over the prior art lumen structure used by the defendant.  The specification contrasted “the basic sleeve structure for all embodiments of the present invention contemplated and disclosed herein” from the prior art.  The CAFC explained that “the words ‘all embodiments of the present invention’ are broad and unequivocal” and that it is difficult to imagine how the specification could be more clear in defining the invention over the prior art.  The CAFC affirmed no infringement under the doctrine of equivalents because the patentee “specifically recognized and disclaimed the dual lumen structure” and thus “the patentee cannot be allowed to recapture the excluded subject matter under the doctrine of equivalents without undermining the notice function of the patent.”

This decision reviewed Sage Products, Warner Jenkinson, Dolly, Eastman Kodak, Moore, and Athletic Alternatives and declared that when an “explicit disclaimer is present, the principles of those cases apply a fortiori.”  A patent drafter should avoid undue emphasis of differences of an invention over prior art because broad sweeping statements in the specification may be read into the claims and also block application of the doctrine of equivalents.

Mycogen Plant Science, Inc. and Agrigenetics, Inc. v. Monsanto Company and Dekalb Genetics  Corporation and Delta and Pine Land Company  Judges Clevenger, Bryson and Linn
Case No. 00-1001, -1051
Decided March 12, 2001

*          Reduction to practice does not require in haec verba appreciation of each of
            the limitations of a count

Mycogen sued Monsanto for infringing Mycogen’s patents to the use of Bacillus thuriagiensis (“Bt”) insecticide gene having an altered sequence (with “preferred” codons) more suitable for plant expression.  A jury found the patents invalid because of prior invention by Monsanto, and also found non-infringement despite the fact that the evidence of anticipation was the same as evidence for infringement.  The district court held judgement as a matter of law that Mycogen literally infringed, and the CAFC affirmed both rulings.

This case reviews reduction to practice and appreciation of successful results in the context of invalidity under 102(g).  The reviewing court determined that Monsanto’s scientists appreciated the overall significance of improving the Bt bacterial gene sequence to make it more plant-like with respect to codon selection.  Monsanto had an earlier complete reduction to practice, even though some claim features (a certain sequence) were not appreciated by Monsanto.

The CAFC pointed out that “conception and reduction to practice . . . .  (requires) contemporaneous recognition and appreciation of the invention represented by the counts.”  The court decided that Monsanto met this test because although “accidental, unappreciated results should not be regarded as anticipated” under the doctrine of accidental anticipation and Monsanto’s reduction to practice “was in no way an accident.”  Monsanto did not appreciate the precise language recited in the claim limitations but this did not block Monsanto from proving that it appreciate the invention at the earlier date because “the invention is not the language of the count but the subject matter thereby defined.”

Much argumentation in this case concerned claim interpretation wherein fragmentary comments made in the specification and file history were blown up and scrutinized by the courts to determine the meaning of a critical claim element.  Monsanto successfully argued that “preferred” codon means a better alternative codon and not merely a most used codon.  If Mycogen had defined a more favorable meaning, or better, had defined and supplied alternative meanings in independent claims this case may have turned out differently.

Peter B. Cooper vs. David Goldfarb
Case 00-1046 (Interference No. 101,100)
Decided March 2, 2001

*          In order for an inventor to benefit from an investigator’s recognition of  
            utility of an invention the inventor must have expected that the embodiment         tested would work for the intended purpose

Cooper provided polymeric tubes for vascular grafts to Goldfarb for evaluation.  Cooper exercised no control over Goldfarb’s studies but conceived the same invention as Goldfarb after transferring samples to Goldfarb.  The invention was for a material having a defined fibril length that, as shown by Goldfarb, stimulates vascular regrowth.  Both Cooper and Goldfarb filed patent applications claiming those materials but Cooper relied on the acts of investigator Goldfarb for reduction to practice.  The PTO declared an interference and awarded priority to Goldfarb because Goldfarb’s reduction to practice did not inure to Cooper’s benefit.

The CAFC affirmed, pointing out that an inventor must meet 3 requirements before benefiting from recognition of a utility by another.  The inventor must have (1) conceived the invention, (2) expected that the tested embodiment would work for the intended purpose, and (3) had submitted the embodiment for testing for that intended purpose of the invention.  The court determined that Cooper did not meet the second requirement because Cooper had focused on a different property of the material and Cooper’s “failure to convey any information or requests regarding fibril length prevents Goldfarb’s determination…….. from inuring to his benefit.”

This case shows what can happen when a maker of a new and potentially useful material allows an outside investigator to dominate investigation of the basic properties of that material without an agreement to cover intellectual property rights.

Intergraph Corporation v. Intel Corporation

Ca

Case 00-1048
Decided March 1, 2001


 

*          A contract is construed in terms of the parties’ intent, as revealed by      language and     circumstance

            This contract interpretation case arose from a simultaneous transfer of patent rights from Fairchild to National, which purchased the bulk of Fairchild, and transfer of other Fairchild “clipper” patent technology to Intergraph, which purchased one division of Fairchild.  A problem arose because National and Intel had a longstanding cross-license agreement that gave rights to Intel for all National patent applications that National controls.  A district court interpreted the Intel-National agreement to include microprocessor “clipper” patent applications that National temporarily acquired (for a few hours) through National’s purchase of Fairchild.

The CAFC reversed the lower court and concluded that Intel does not have a license to the clipper patents because “the plain reading of the license” shows that the patent rights concern “patent applications that will become “National Patents”  Thus, “’ownership or control’ recited in the Intel cross license agreement applies not to ‘National Patent Applications’ but to ‘National Patents.’” 

The transactions through which National purchased Fairchild and Intergraph purchased one division of Fairchild were conducted in sequence on the same day and gave National ownership rights for a short time.  The CAFC pointed out that “[t]he order of proceedings did not vest National with the right to encumber any property that it momentarily possessed until the next document was signed.”  The court noted that Fairchild had executed an assignment to Intergraph for “the full and exclusive right, title and interest to the Clipper patent applications,” without any hint that another might acquire a free license from National.  The court quoted a 9th circuit case in declaring that “reaching a strained interpretation of a contract is tantamount to rewriting the contract.  This the court cannot do.”

A Purchase Agreement usually will express the intent of the parties and, as shown in this case, may be helpful in interpreting a contract.  The CAFC relied on a Purchase Agreement written a week before closing in determining intent of the parties.

Amazon.com, Inc. v. Barnesandnoble.com, Inc.
Case No. 00-1109
Decided February 14, 2001

*          A district court cannot construe key claim limitations one way for purposes        of         infringement analysis and another way when considering validity

Amazon obtained a preliminary injunction against Barnes for infringement of claims to its one click shopping cart ordering system that utilizes a “single action” component.  The system allows one click use of a previously stored consumer profile for ordering.

Upon appeal, the CAFC re-interpreted the claim term “single action” broadly, thus affirming literal infringement, but also including anticipatory prior art within the construed claims.  The district court erroneously had decided that Barnes likely infringed all of the asserted claims and did not inventory the elements of any particular claim with respect to validity.  Instead, the lower court merely had determined whether the prior art reference asserted by Barnes implemented the single action (one click) limitation.  In other words, the court construed the claims in one broad manner to determine infringement yet construed the claims narrowly against the prior art.  The CAFC declared that both the accused system and the prior art utilized a “multiple step” (i.e. at least two ‘clicks’) from the time that an item to be purchased is first displayed on the menu page.  The court pointed out that the “district court’s failure to recognize the inconsistency in these two conclusions was erroneous.”

In explaining its decision to remand, the CAFC pointed out that “A patent may not, like a ‘nose of wax,’ be twisted one way to avoid anticipation and another to find infringement.”  (Original cite to White v. Dunbar, 119 U.S. 47, 51 (1886)).

Mentor H/S, Inc. v. Medical Device Alliance et al.
Case No. 99-1532, 00-1165
Decided February 13, 2001

*          A license agreement that withholds a first right to sue on a patent fails    
            to give the licensee sufficient rights to sue in the licensee’s name

            Following a jury trial for patent infringement by Medical Device of claims to a patent that was exclusively licensed to plaintiff Mentor, Licensee Mentor appealed a JMOL in favor of Medical Devices to the CAFC.  Mentor was enforcing the patent on its own.  The CAFC invited supplemental briefs over the unargued issue of whether Mentor had standing to bring suit without joining Sonique Surgical Systems, the legal owner of the patent. Sonique’s “exclusive” license agreement with Mentor had reserved for Sonique the first obligation to sue parties for infringment and gave Sonique the right to control licensee Mentor’s product development.  Sonique had declined to participate in the lawsuit, however.

            The CAFC held that Mentor did not have standing to sue Medical Devices for patent infringment because Mentor had not received “all substantial rights” in the patent.  The most important fact in this regard was that “Sonique has the first obligation to sue parties for infringement.” 

If a licensee wishes the right to sue on its own, it needs a license agreement that does not hold back a first option to sue for the licensor.

B

Bioval Corporation International et al. v. Andrx Pharmaceuticals, Inc.
Case No. 00-1260
February 13, 2001

*          Prosecution history estoppel operates on the same claim element found in                      related patents

Bioval sued Andrx for infringing Bioval’s patent claims that recite a hypertension drug  composition comprising beads that contain “one or more of the Diltiazem salts and . . . a wetting agent” such as a sugar.  Generic drug maker Andrx prompted the suit by filing an Abbreviated New Drug Application with the FDA for its generic drug.  Andrx asserted under 21 USC 355 that its ANDA product does not infringe and that Bioval’s patent is invalid.  The main fact issue was whether Andrx’s generic product, which comprises a carbohydrate core ingredient surrounded by the active ingredient, infringes claims which recite an “admixture” of the two ingredients.  Biovail had chosen to “exclude a sugar core not in admixture with” the active ingredient and amended claims during prosecution to avoid an earlier patent.

The CAFC affirmed, noting that no doctrine of equivalents was available for the claim element “admixture” and that “[w]hen multiple patents derive from the same initial application, the prosecution history regarding a claim limitation in any patent that has issued applies with equal force to subsequently issued patents that contain the same claim limitation.”

A patent prosecutor must be careful not only with amending claims of related applications but also in making arguments that might be used as estoppel.  The CAFC did not address the more interesting issue of how a court should handle prosecution of a claim element that has very similar meaning but slightly different wording among related applications. 

DeMarini Sports, Inc. v. Worth, Inc.

Case No. 99-1561, -1583
Decided February 13, 2001

*          A claim may be interpreted narrowly when a patent specification does not         
            define the claim terms and prosecution history supports the narrow meaning

Defendant Worth won summary judgement of non-infringement for DeMarini’s patent claims to a hollow tubular baseball bat.  The claimed bat has a circular insert with “a gap…. along a central portion” to allow greater bat bending to increase “slugging power.”  The principal issue in this case was how to interpret “gap” and “interference fit” with respect to the bat insert inside the bat “frame.”  Worth’s insert did not extend into the handle but literally met the claim otherwise.

DeMarini argued on appeal that the lower court improperly defined “frame” as necessarily including an insert that extends into the handle.  DeMarini’s patent specification lacked a definition of “bat frame” and the court began its construction with a broad dictionary definition that was proferred by the patentee and accepted by both sides.  The court reviewed the teaching of the specification, which emphasized inserts that exist throughout the bat, and which recited the usual “all permutations of component dimensions and configurations fall within the scope of the present invention.”  However, the court did not find more specific detail that teaches inserts which do not extend into the handle, and found prosecution history statements that could be construed as indicating the invention concerns long inserts through the handle.  Unfortunately, DeMarini did not include examples or statements about short inserts within only the hitting portion of the bat and the CAFC agreed that the claims were limited to bats with long inserts.

This is yet another case where a patentee did not provide very explicit definitions of terms, and the courts relied heavily on statements during prosecution to construe the terms.

Forest Laboratories, and Ony  v. Abbott Laboratories and Tokyo Tanabe Co., Ltd.
Case No. 99-1494, -1495, -1512
Decided February 13, 2001

*          A claim that recites a percent composition should be supported by percentage   data or other explicit explanation for how to measure the claimed percentage

            Tokyo Tanabe and its licensee Abbott won a jury verdict against Forest for  infringing patent claims to a lung surfactant composition having percent compositions “all based on the dried weight” of the ingredients.  However, the court granted Judgement as a Matter of Law (“JMOL”) of non-infringment because the jury verdict was not supported by sufficient evidence.  The parties appealed and the CAFC sustained the JMOL.

The main issue in this case was how to interpret (measure) the claimed percentage of water in the claimed “surface active material.”  The courts accepted Ony’s construction that the material is measured in dry form after mixing the dry materials but before suspension in water.  Abbott unsuccessfully argued that a skilled artisan would know to first make a suspension or solution and then dry the material down to determine residual water.  Unfortunately the specification did not provide further detail or data and the independent claims did not recite a liquid suspension or solution, thus allowing the court to make up its own interpretation. 

The asserted patents in this case had been translated into English yet contextual usage of a patent claim element dominated claim construction.  The patentee tried to introduce evidence that a skilled artisan would naturally understand its construction but had to submit to a disfavorable claim interpretation based primarily by the grammar of the claims.  It is important to include detail for how a measurement is made when reciting the results of such measurements and not to rely on what a skilled artisan may assume.

Wenger Manufacturing, Inc. v. Coating Machinery Systems, Inc and Vector Corp.
Case No. 00-1121
Decided February 6, 2001

*          In construing a means-plus-function limitation, a court may not import    structural limitations from the written description that are unnecessary to        perform the claimed function

A district court held on summary judgement that Coating Machinery did not infringe Wenger’s claims to an apparatus having an “air circulating means …for circulating air through (a reel with a plurality of perforations).”  The court construed the means plus function claim element to require recirculation of air, despite the fact that a dependent claim included this limitation.  The accused device lacked recirculation and was found not to infringe.

In its appeal to the CAFC, Wegner argued that the “air circulation means” is limited to a structure for performing the broad function of circulating air and not for recirculating.  Furthermore, the narrower interpretation is precluded under the doctrine of claim differentiation because a dependent claim added the limitation of “recirculating a second portion of said air.”  The CAFC agreed with Wegner that a function for “circulating air” was provided and corresponded to the means.  However, the CAFC determined that the lower court “improperly restricted the air circulation means” as a limiting structure in the preferred embodiment, but which was not necessary to perform the recited function of circulating air.  Thus, although the patent applicant arguably may have used the term “circulation” and “recirculation” interchangeably during prosecution, the specification provided at least some comment about the use of “circulation” per se.

The district court originally held summary judgement of literal infringement at the beginning of this case but changed its mind after Coating Machinery filed a motion for reconsideration and argued for the recirculating air interpretation.

AFG Industries, Inc. and Asahi Glass Company, Ltd. v. Cardinal IG Company, Inc. and Anderson Windows, Inc.
Case No. 00-1285
Decided  February 6, 2001

*          The claim term “composed of” should be interpreted by its use in the     specification and may be more expansive than “consisting of”

*          Extrinsic evidence should inform a court’s claim construction where       common
            dictionary words have particular meaning to a skilled artisan

A non-infringement judgement between patentee Asahi and accused infringer AFG was vacated by the CAFC because the lower court did not expressly construe the claims, which recite a “5-layered transparent coating composed of (silver layers)….”.  On remand, the district court construed the claim terms using a common definition for “layer,” and granted summary judgement of noninfringement to AFG.  Asahi appealed again to the CAFC.

The CAFC vacated because the district court had misused common dictionary meanings for the terms “layers” and “interlayers.”  Both the patent specification and testimony during the Markman hearing indicated that interlayers are “routinely, and often necessarily, present” in the final product because they are required during manufacture.  Furthermore, the CAFC construed the term “composed of” more broadly as open to “unlisted ingredients (such as interlayers) that do not materially affect the basic and novel properties of the invention.”  With the different claim construction, the case was remanded for further proceedings.

The CAFC pointed out that it has “repeatedly cautioned against using non-scientific dictionaries for defining technical words……(and that)…..[Dictionary definitions of ordinary words are rarely dispositive in their meanings in a technical context."  The CAFC’s extensive discussion on this topic should be considered when preparing for a Markman hearing where seemingly simple words have deeper technical meaning.

In Re Pioneer Hi-Bred International, Inc.
Miscellaneous Docket No. 661
Decided February 5, 2001

*          Attorney client privilege covering merger negotiations is not lost by disclosing the            essential facts of the merger to the SEC

            During litigation between Pioneer and Monsanto for breach of contract and patent infringement a district court ordered Pioneer to respond to deposition questions regarding (1) analyses of financial benefit to Pioneer’s shareholders of its merger with DuPont and (2) analyses of how the merger affects existing technology licenses.  Pioneer petitioned the CAFC for writ of mandamus to prevent Pioneer’s in house counsel from violating attorney client and work product privilege.

            The CAFC applied the law of the 8th circuit because the mandamus issues were procedural.  The lower court had emphasized an 8th circuit case wherein a taxpayer had to “disclose detail underlying the reported data” after filing amended tax returns to the IRS, and had waived his privilege.  The CAFC however, distinguished that case as concerning “information that is intended to be reported to the government” according to the principle that “the privilege only protects disclosure of communications; it does not protect disclosure of the underlying facts by those who communicated with the attorney.”  That is, the CAFC allowed discovery of facts required by the SEC and IRS (advice from outside counsel regarding tax consequences) but vacated the order for discovery of merger negotiations, and effects on the licenses.

            The CAFC declared that “a waiver of the attorney client privilege occurs only when a party relies on or discloses advice of counsel or other privileged information in connection with the merger.”  This distinction, and particularly reliance on the communication may be important to maintain attorney client privilege for business transactions.

Litton  Systems, Inc. v. Honeywell Inc.
No. 00-1241
Decided February 5, 2001

*          Patent infringement is but one wrongful act relevant to the tort of            interfering         with business relations

            Litton sued Honeywell for patent infringement and for interfering with Litton’s business relations under state law theories.  A district court on summary judgement found no patent infringement.  The court also dismissed the state law tort charges on JMOL because Litton failed to establish patent infringement as the wrongful act necessary to the tort claims.

            The CAFC affirmed non-infringement of claims to Litton’s patent that recite a sputtering process for making multiple layer films.  The most important issue in this regard was that Litton had argued for and amended claims to use of a Kaufman-type ion beam source which, under Festo, left no doctrine of equivalents expansion of this claim element.  The reviewing court however, reversed the tort law holding because the district court improperly limited a “wrongful means” analysis to infringement per se and decided that there was no factual issue to send to the jury.  Rather, a jury should have been allowed to evaluate the existence of a wrongful act other than infringement for the state law charges.

            This is a post-Festo case where the court has turned an otherwise complicated doctrine of equivalents analysis into a clear non-infringement holding because the applicant had amended a claim term that was important in infringement.

Flex-Foot, Inc. and Van L. Phillips v. CRP, Inc. (Springlite)
Case No. 99-1489
Decided February 2, 2001

*          A settlement agreement by a licensee not to challenge patent validity may be      enforceable under the Federal Arbitration Act

            In a third dispute between licensor Flex and licensee Springlite, Springlite again challenged the validity of Flex’s patent, despite an earlier settlement agreement not to.  In accordance with terms of that agreement the dispute was submitted to the American Arbitration Association.  A panel of three patent attorneys found literal infringement and awarded costs to Flex.  Both sides filed motions at a district court.  The court confirmed the arbitration award and entered a permanent injunction against Springlite because that licensee was “collaterally estopped” from contesting the validity and enforceability of Flex’s patent by the settlement agreement.

            The CAFC noted that Congress acted to bring patent contracts such as settlement and licensing agreements under enforcement provisions of the Federal Arbitration Act.  Furthermore, none of the grounds under that act for vacating an arbitration award were met and the arbitration panel’s incomplete record of claim construction was acceptable because its decision evaluated “the scope of each of the claim limitations focused on by the parties.”  Another important factor was that the earlier settlement agreement included a promise not to challenge patent validity and thus “certainly gives rise to contractual estoppel.”  This contractual estoppel was not trumped by the public policy encouraging “full and free competition” in allowing licensees to challenge the validity of their licensed patents.

            This case shows that the CAFC honors the “compelling public interest and policy in upholding and enforcing settlement agreements voluntarily entered into……thus fostering judicial economy.”  Accordingly, any settlement agreement should state the purpose of settling future litigation as justification for limiting a patentee’s rights.
 

Purdue Pharma L.P. et al. v. Boehringer Ingelheim GMBH, Roxane Laboratories and Boehringer Ingelheim Corp.

Case No. 00-1398

Decided February 1, 2001

*          An ambiguous claim may be interpreted by referring to the purpose of the          invention stated in the specification

            Purdue won a preliminary injunction order that stopped Roxane’s commercialization of a pain killer that would infringe Purdue’s patent to a particular controlled release formulation.  Purdue’s patent claims recite formulations that provide certain plasma concentrations after repeated administration.  The principal infringement issues were validity and infringement of claims that recite “maximum plasma concentration” but that are “unclear as to the type of administration to determine” that concentration.  The specification included examples of both single and multiple dose administrations.  The district court deemed this claim language “ambiguous” and relied on the specification and the “fundamental purpose and significance of the invention" in interpreting the claims to cover multiple doses.

            The CAFC affirmed and remanded because the broader claim interpretation “is consistent and furthers the purpose of the invention.”  There was no dispute that Roxane’s accused product infringed, based on this construction and Purdue met its burden of showing a reasonable likelihood that it would succeed on the merits.

The Hoover Company v. Royal Appliance Mg. Co.

Case No. 00-1219 (Opposition No. 96,834)
Decided January 31, 2001

*          A laudatory trademark phrase such as “number one” is not

            inherently distinctive

            Hoover, which had been using its unregistered trademark “Number One in Floorcare” opposed Royal’s registration “The First Name in Floorcare.”  The USPTO Trademark Trial and Appeal Board dismissed Hoover’s opposition after finding that Hoover’s mark was not distinctive and that Royal’s mark was not deceptive.

            The CAFC affirmed, citing substantial evidence showing that Hoover  failed to establish that its own mark “Number One in Floorcare” was descriptive, either inherently or through the acquisition of secondary meaning.  That evidence included an admission from Hoover’s VP of Marketing that its mark was “merely laudatory.”  The CAFC pointed out that Hoover may be “number one” now but Hoover might slip and another company “should be free to ‘truthfully employ’ the descriptive term ‘Number One’ to describe its goods as well.  Another factor for finding Hoover’s mark merely lauditory was that Hoover used the phrase in conjunction with (adjacent to) its principal trademark “Hoover.”

            Unfortunately Hoover never conducted a consumer brand recognition survey for its “Number One in Floorcare” slogan and could not show evidence of secondary meaning.

Johnson & Johnson Associates, Inc. v. R.E. Service Co., Inc. and Mark Frater

Case No. 99-1076; -1180

January 24, 2001

*          The CAFC will decide en banc whether a patentee can rely on the doctrine of   equivalents with respect to disclosed but unclaimed subject matter in a patent

Following a review of this case by a three judge panel, the court decided to hear this case en banc to determine (1) whether and under what circumstances a patentee can rely upon the doctrine of equivalents with respect to unclaimed subject matter disclosed in a patent specification and (2) whether a jury’s finding of infringement based on the doctrine of equivalents should be reversed where the patentee had described but not claimed an allegedly infringing embodiment.

This case is another follow up to the Festo decision and will determine whether a patentee who has disclosed an embodiment in a specification must have specifically claimed that embodiment or lose the ability to win an infringement case against a party that practices the unclaimed embodiment.

Pioneer Magnetics, Inc., v. Micro Linear Corporation

No. 00-1012

Decided January 23, 2001

*          Only the public record of patent prosecution is used to determine the reason for a          claim amendment

            Pioneer sued Micro for infringing a patent to a switching power supply.  Both sides agreed that under to the court’s claim construction and reasoning, non-literal infringement and prosecution history estoppel bar expansion of an asserted claim to a “switching analog multiplier circuit” limitation.  The parties stipulated that summary judgement of non-infringement be granted to Micro.  Pioneer appealed.

            Pioneer argued to the CAFC that Pioneer had added the “switching” limitation to the patent claims “through sheer inadvertence, unmotivated by any of the statutory requirements for a patent” and thus expansion of that claim element was not precluded under the doctrine of equivalents.  Pioneer provided as evidence, a declaration from the attorney who prosecuted the application that matured into the asserted patent.  The CAFC however, refused that argument, citing Festo for the rule that only the public record of the patent’s prosecution is used to determine why a claim was amended.  The reviewing court further pointed out that “inadvertence is not a sufficient reason to overcome the bar of prosecution history” anyway and that “[t]he public notice function of patents would be frustrated by forcing a patentee’s competitors to guess whether a patent’s claims were drafted and accepted in error.”  Still further, the court reiterated its position in Festo that “[v]oluntary claim amendments are treated the same as other amendments” and that “[w]e will not speculate whether any given amendment was material to the prosecution of the patent.”

            This is a post-Festo case where the court verifies its new rule that voluntary claim amendments (regardless of reason) are treated the same as other amendments.

Globetrotter Software, Inc., v. Elan Computer Group, Inc. et al.

No. 00-1110

Decided  January 18, 2001

*          A means-plus-function limitation in a software claim is limited to specific             examples given in the specification

            Globetrotter lost a summary judgement motion and a preliminary judgement motion against Elan for alleged infringement of Globetrotter’s patent claims to software for a license management system that monitors and limits the number of users of the software at any given time.  The district court construed a means plus function claim element of an asserted claim as requiring a structure (“unique identification” code for each license) that the accused product lacked.  Specifically, the court construed the claim “license file means. . . for storing at least one and up to a selectable number of (said) licenses” as requiring an identifiable and unique code in the software.

            The CAFC affirmed this narrow claim interpretation issue.  The CAFC rejected Globetrotter’s argument for interpreting the structure of the “license file means” as a broader “function of storing a license.”  Instead, the court deemed that structure to be a specific code because all embodiments in the specification showed a code for that function and the specification suggested no alternative.

            The patentee of a software implemented business method in this case was limited to software examples corresponding to a means plus function limitation.  When using a means plus function claim element for a software invention it is important to think outside of the box and provide alternative (for example hardware) examples of the function element to prevent a narrow claim interpretation.

Dr. Raymond G. Tronzo v. Biomet, Inc.

No. 00-1007

Decided January 17, 2001

*          In determining punitive damages, reprehensibility of the infringer’s conduct is the             most important factor

            Dr. Tronzo won a patent infringement award against Biomet for $20,000,000 in punitive damages and $7,134,000 in compensatory damages after a jury found that Biomet stole Tronzo’s invention.  Upon appeal the CAFC reversed compensatory damages because Tronzo incorrectly based those damages on Biomet’s profits.  On remand the district court limited compensatory damages to $520 and decreased the punitive damages from $20,000,000 to $52,000 (100 times the proven compensatory damages) to comport with due process principles.  The court found a “complete absence of competent substantial evidence” to support higher compensatory damages and refused Tronzo a new trial.  Tronzo appealed to the CAFC.

            The CAFC pointed out that “[n]o matter how Dr. Tronzo frames his claim, he cannot establish the necessary nexus between his tort injuries and Biomet’s profits” and his compensatory damages were limited to “record evidence properly establishing his losses, including evidence of his lost business opportunities.”  The reviewing court however, reinstated the punitive damages award of $20,000,000 because of legal error.  The CAFC declared that “it was not the ratio of punitive to compensatory damages, but the reprehensibility of the conduct that was deemed by the Supreme Court to be ‘the most important indicium of the punitive damages award.”

            This case illustrates the extreme importance of proving compensatory damages such as lost profits with solid evidence and that punitive damages are more influenced by a showing of bad acts by the guilty party.

United States Olympic Committee v. Toy Truck Lines, Inc.

No. 00-1196 (Interference No. 106,629)

Decided January 16, 2001

*          A tribunal such as the Trademark Trial and Appeal Board of the USPTO must apply the law as it exists at the time of the tribunal’s decision

            The U.S. Olympic Committee (“USOC”) opposed Toy Truck’s trademark application to “PAN AMERICAN” on the basis of USOC’s ownership of related marks that include “PAN AMERICAN.”  During pendency of this opposition Congress enacted the Olympic and Amateur Sports Act, which expressly gives the USOC “the exclusive right to use. . . Pan-American. . .”  The USOC promptly cited this new statute in a subsequent brief but the Trademark Trial and Appeal Board refused to consider it because that “statute is not a pleaded ground in the opposition.”

            The CAFC reversed and remanded, stating that “federal cases should be decided in accordance with the law existing at the time of decision.”  The reviewing court pointed out that “this rule is subject to exceptions when justice requires, such as when vested rights are materially affected by the change in law” but that since “this application was based solely on ‘intent to use,’. . . there is no suggestion of the existence of any vested property right.”

            The trademark law passed by Congress trumped the normal statutory defenses and Toy Truck did not have a chance because the USOC did not have to show likelihood of confusion to succeed.

Han Beauty, Inc. and Trevive, Inc. v. Alberto-Culver Company

No. 00-1198 (Opposition No. 99,090)

Decided January 9, 2001

*          Liklihood of confusion between two trademarks having different                       

            spellings exists where the marks are pronounced the same and evince a

            similar linguistic origin   

            Alberto successfully opposed Han’s application for its TREVIVE trademark based on likelihood of confusion with Alberto’s TRES-prefixed marks.  Alberto persuaded the PTO Trademark Trial and Appeals Board with evidence that both marks were for identical goods, used in the same channels of trade to same purchaser, and are bought on impulse for about the same price.

            The Federal Circuit affirmed, finding substantial evidence for the conclusion.  The reviewing court treated the Alberto TRES mark as “a group of marks having a recognizable common characteristic” in interpreting the mark broadly to find likihood of confusion despite the greatly different spellings. 

            This case demonstrates the value in creating a family of marks of common perceived linguistic origin to establish a more robust protection that extends to different spellings of a trademark.

In re Nett Designs, Inc.

No. 00-1075 (serial No. 74/677,635)

Decided January 9, 2000

*          A trademark may contain a descriptive word such as “Ultimate”           

            only upon sufficient showing of secondary meaning

            The U.S. PTO refused to allow a trademark registration for “LOAD LLAMA THE ULTIMATE BIKE RACK” without a disclaimer of the portion “THE ULTIMATE BIKE RACK” because the second portion was descriptive.  In response, Nett filed evidence that 158 other registered trademarks included the term “ULTIMATE” , but failed to convince the U.S. PTO that sufficient secondary meaning existed for Nett’s mark.

            The Federal Circuit affirmed, noting that Nett’s mark “immediately conveys qualities or characteristics of the goods” and does not require “imagination, thought, and perception to arrive at” its description.  Unlike others who successfully obtained trademark status for a mark that includes the term “ULTIMATE” Nett failed to provide sufficient evidence of secondary meaning and that, in the court’s words, “a term may possess elements of suggestiveness and descriptiveness at the same time.” 

            A trademark applicant that wants to include an arguably descriptive term should consider the fact intensive nature of the determination of secondary meaning.  Unfortunately Nett did not have enough facts in his favor, possibly because he tried to obtain trademark registration before secondary meaning could develop and any public understanding was based on a literal reading of the mark.

Union Pacific Resources Co. v. Chesapeake Energy Corp. and Chesapeake Operating Inc. and Chesapeake Exploration Limited Partnership

No. 00-1053, 1059

Decided January 5, 2001

 *         A claim recitation of “comparing” is indefinite and unenabled when the               specification merely suggests a complex correlation and omits software            

            used to carry out the invention

            A district court held Union Pacific’s patent to a method of horizontally drilling for oil invalid for nonenablement and indefiniteness.  The claims recited locating a borehole by “comparing” information and the specification vaguely suggested that “comparing” was a correlation of some kind.  The court found that the specification did not show how to make the correlation and that merely “visually comparing two graphs” did not suffice to carry out the “pivotal correlation process.”

            The Federal Circuit affirmed the indefiniteness holding, because the specification hardly mentioned “comparing” and confused that term with the related term “correlating“, which could also mean “rescaling.”  The CAFC noted that the patentee’s expert witness stated that the correlation step “probably is the most unique part of the patent” and that “significant mathematical manipulation” was required, but that the software used to implement this crucial part was held back as a trade secret.

            Union Pacific might have avoided patent invalidation if it had sought software claims instead of holding on to its “pivotal correlation process” as a trade secret.