Decided December 20, 2005

Judge Rader with Judges Bryson and Linn

*          “[P]rinciples of inherency do not prohibit a process patent for a new use of an old structure.”

            Perricone sued Medicus at the U.S. District Court for the District of Connecticut for allegedly infringing claims to his “method of treating sunburn” by applying a mixture of vitamin C-lipid derivatives to the skin.  Judge Christopher Droney granted summary judgment of invalidity over a prior patent that described applying the same composition as a skin lotion to prevent skin problems.  Perricone appealed to the Federal Circuit.

A Federal Circuit majority opinion reversed because “[n]ew uses of old products or processes are indeed patentable subject matter.”  The cited prior art did not did not describe sunburn prevention or treatment and thus did not anticipate under inherency principles because Perricone had claimed a “much narrower topical application to skin sunburn.”  Judge Bryson dissented with a view that “identification of a new subset of a previously known property is not entitled to patent protection.” 

An interesting side issue was that the Federal Circuit reminded the patentee that (contrary to the opinion of the district court) a patent term disclaimer can be filed after patent issuance.

            This was a close (split decision) case because a claim preamble recited a species element that fell within a genus described in an earlier patent.  The case has been remanded, where the district court likely will hear a very lively obviousness argument from the defendant.

Invitrogen Corporation v. Clontech Laboratories, Inc.

Decided November 18, 2005
Judge Gajarsa with Judges Michel and Rader

*          Proving conception requires objective evidence of an inventor’s “appreciation” that his creation has “the features that comprise the inventive subject matter at bar.”

            Invitrogen sued Clontech at the U.S. District Court for the District of Maryland for allegedly infringing claims to a DNA synthesis enzyme (reverse transcriptase) that lacks RNA cutting ability.  Judge Alexander Williams Jr. reviewed inventorship and found that a competing researcher from Columbia University earlier had made the enzyme as claimed.  The court found the claims anticipated by the Columbia researcher’s acts under 102(g)(2).  Invitrogen appealed to the Federal Circuit.

The Federal Circuit held that “the district court misapplied the law of appreciation when dating conception,” and vacated the conception and invalidity holdings.  The Federal Circuit pointed out that “conception requires that the inventor appreciate that which he has invented” and “[i]n the appreciation analysis, the relevant uncertainty relates to the emerging recognition of something new.”  In this case, the asserted prior inventor at Columbia did not know that particular mutant forms of the enzyme had the new property until much later, when he had developed a reliable assay to confirm his desire/guess of the new property, as later claimed by the other.

Proving conception in the biochemical arts can be difficult, because guesswork and predictions often are confused or even pushed over reality.  Notebook and other evidence are most important to show that an inventor understood all elements of an invention as later claimed. 

Microstrategy Inc. v. Business Objects, S.A. and Business Objects Americas, Inc.

Decided November 17, 2005

Judge Rader with Judges Newman and Archer

*          When interpreting state law, “the federal court must look to the rulings of the highest state court, and, if no such rulings exist, …predict how that high court would rule.”

            Microstrategy sued Business at the U.S. District Court for the Eastern District of Virginia for alleged patent infringement and also for several state law business tort claims, after Business hired employees away from Microstrategy.  Judge Jerome Friedman granted summary judgment of non infringement and unenforceability of an employment contract that obligated former employees of Microstrategy to “not, directly or indirectly, seek to influence any employees, agents, contractors or customers of MicroStrategy to terminate or modify their relationship with MicroStrategy."  MicroStrategy appealed to the Federal Circuit.

The Federal Circuit reversed the unenforceability holding of the employment contract, because a lower Virginia state court reasonably disagreed with the federal district court on construing this contract passage.   The Federal Circuit explained that, while only a state’s highest court decision on a state law matter is binding on a federal court, “[a] state court’s judgment is not to be treated lightly, particularly where it interprets state law.”

Business litigation often embraces state law issues such as interpretation of employee contracts, and such issues can merge with patent issues in litigation at a district court.  A patent practitioner should be familiar with state laws that cover their inventor’s confidentiality and non-compete contracts. 

*          The “general rule (that) the word ‘a’ generally means ‘one or more’ in open ended claims …does not apply when the specification or the prosecution history shows that the word was used in its singular sense.”

Norian sued Stryker at the U.S. District Court for the Northern District of California for allegedly infringing claims to a bone mineralization “kit consisting of…a solution consisting of water and a sodium phosphate.”  Judge William Alsup granted Stryker summary judgment of no infringement because the accused product contained more than one form of phosphate.  Norian appealed to the Court of Appeals for the Federal Circuit.

The Federal Circuit affirmed because the patentee had used “at least one” to refer to other chemicals in the same claim and in context, “the word ‘a’ is conspicuous in the phrase.”  The court also noted that the term “a sodium phosphate” was added during prosecution with a clarifying statement that one phosphate was intended.

Poor patent prosecution may have allowed a narrow construction of the term “a” during litigation.  The applicant had added this term and admitted during prosecution that “the solution is limited to one that is made of water and a solute selected from a sodium phosphate.” 

Pfizer, Inc. and Warner-Lambert Company, LLC v. Teva Pharmaceuticals USA, Inc. et al.

*          “It is necessary to consider the specification as a whole, and to read all portions of the written description, if possible in a manner that renders the patent internally consistent.”

Warner sued Teva for patent infringement at the U.S. District Court for the District of New Jersey after Teva sought FDA approval for a generic version of Teva’s Accupril™.  The court found the patent infringed and not invalid.  After Teva began selling the generic product, Judge Dickinson Debevoise granted Warner a preliminary injunction.  Teva appealed the injunction to the Federal Circuit, arguing for a narrower definition of the claim term “saccharides (i.e. sugars)” that would exclude the non-sugar stabilizer used in Teva’s accused product.

The Federal Circuit affirmed because, although portions of the patent specification indicated “saccharide” to mean “sugar,” this argument “ignores the fact that the person of ordinary skill in the art is deemed to have read the claim term in the context of the entire patent.”  The specification broadly included other stabilizers such as mannitol and other non-sugars as “saccharide.”

In earlier litigation Teva argued an opposite, broader definition for “saccharide” to support claim invalidity arguments and both parties had agreed to the broader definition.  However, “the stipulation presented to the court….stated that it was for the purposes of that litigation only.”  In contrast, statements made at the patent office are used more reliably to construe claims because of the “public notice” function of patent office records.   The enhanced ability of a third party challenger to rely on such admissions by a patentee (or from an examiner) during reexamination is an often overlooked strategic advantage of reexamination over litigation for handling claim disputes. 

IPXL Holdings, LLC, v. Amazon.com, Inc.

*          “A single claim which claims both an apparatus and the method steps of using the apparatus is indefinite under 35 USC 112, second paragraph.”

IPXL sued Amazon at the US District Court for the Eastern District of Virginia for alleged infringement of claims that recite electronic fund transfers.  Judge Leonie Brinkema granted Amazon summary judgement of non-infringement, invalidity of all claims, and awarded attorney fees.  IPXL appealed to the Federal Circuit. 

The Federal Circuit agreed that a reference, which the PTO had considered during examination, anticipated the claims.  The Federal Circuit however, reversed the award of attorney fees as Amazon did not timely file a request for the fees under Fed. R. Civ. P. 54, since “Amazon took no steps under Rule 6(b)(2) that could have afforded the district court a basis …to enlarge the 14 day time period” for filing the request.

In this first decision that comments on the invalidity of compound method/device claims under section 112, the Federal Circuit explained that recitation of both method and apparatus in the same claim “does not apprise a person of ordinary skill in the art of its scope, and ….is invalid under section 112, paragraph 2.”

Sloppy claim drafting sometimes includes method steps with apparatus claims such as those litigated in this case.  Such hybrid claims can be attacked during litigation on section 112(2) grounds.

Union Carbide Chemicals & Plastics Technology Corp. et al. v. Shell Oil Company et al. www.fedcir.gov/opinions/04-1475.pdf
Decided October 3, 2005
Judge Rader with Judges Mayer and Prost

*          “[T]he exportation of a component…used (abroad) in the performance of a       patented process or method” …“may result in liability under 271(f).”

             Union sued Shell at the U.S. District Court for the District of Delaware for allegedly infringing patent claims to a method of making ethylene oxide and inducing infringement overseas.  A jury found contributory infringement from Shell's sales to third parties and Judge Sue Robinson limited damages to domestic use because of her interpretation that USC 271(f) does not apply to method claims.  Both sides appealed.

The Federal Circuit vacated the damages award “because 271(f) governs method/process inventions.” 

Many industries are globally integrated and companies often decide where to make a product or conduct a service based on costs in different countries.  In response, a patentee should consider how U.S. patent method claims might be asserted against companies that use a material from the US to practice a patented method in another country. 

J. Ole Sorensen et al. v. International Trade Commission et al.
Decided October 31, 2005 www.fedcir.gov/opinions/05-1020.pdf
Judge Rader with Judges Michel and Linn

*          Claim terms are defined primarily by the specification.  File history must “clearly             and unambiguously express surrender of subject matter” to alter these meanings.

                Ole attacked Mercedes at the ITC under 19 USC 1337 for importing tail light lenses made with two colored plastics, in alleged violation of his US patent claims to a molding method that uses two different plastic materials in a mold.  Because Ole narrowed his claims by adding the term “different characteristics” during prosecution, the ITC found no infringement from a view that the molded materials must differ in some characteristic other than color.  Ole appealed to the Federal Circuit.

The Federal Circuit vacated the ITC decision because statements in the specification indicated that the two plastics may be merely “different.”  The court noted the primacy of the specification and that Ole’s comments during prosecution “in no way shows a clear and unambiguous disavowal of the broad scope of the claim.”

The Federal Circuit seems to rely more heavily on the patent specification and less on file history for construing claims, in the wake of the en banc Philips claim construction case earlier this year.  Because of this emphasis, a practitioner should prepare very detailed specifications to ensure maximum performance during patent enforcement.

Michael P. Callicrate v. Wadsworth Manufacturing, Inc.
Decided October 31, 2005   www.fedcir.gov/opinions/04-1597.pdf
Judge Rader with Judges Newman and Prost

*          “[A] patent specification may sufficiently enable a feature under 112(1), even if only the background section provides the enabling disclosure.”

Michael sued Wadsworth at the U.S. District Court for the District of Montana for infringing his patent claims to a cattle castrator.  Michael’s patent claims had elements that were supported in the background section of his earliest patent disclosures, where he had disparaged those features.  Judge Donald Molloy responded to this anomaly by declaring that the later patent claims were not supported by the earlier disclosures.  A jury then found that intervening prior art invalidates the later patent claims.  Michael appealed.

The Federal Circuit reversed because the description of claim elements in the background section of the earlier priority documents supported the earlier priority date.  Neither party argued the written description requirement and this opinion revolved around whether enablement was met in the earlier applications.

A practitioner often avoids detailed description in the background section of a specification.  This case shows however, that a nuanced description of prior art may be a useful reference for adding features to a later asserted claim.  In the biotechnology arts in particular, practitioners tend to cite and describe many alternative procedures in a patent specification to fortify enablement of a claimed invention.  This technique may be useful even for mechanical patent applications.

Dorel Juvenile Group, Inc., v. Graco Children’s Products, Inc.
Decided November 7, 2005   www.fedcir.gov/opinions/05-1026.pdf
Judge Clevenger with Judges Newman and Gajarsa, Newman dissenting

*          Whether an accused product has features recited in a patent claim “is a question           of fact that cannot be determined on summary judgment.”

Dorel sued Graco at the U.S. District Court for the Southern District of Indiana for allegedly infringing claims to a child’s car seat having a cup holder with the base “removably attached to a seat.”  Judge Larry McKinney granted summary judgment of noninfringement because the claims recite a seat that is designed to come apart from the base whereas Graco’s seat does not separate when used properly.  Dorel appealed to the Federal Circuit.

The Federal Circuit noted that the accused seat could be taken off the base using a special screw driver and vacated the summary judgment because “[t]he district court has invaded the province of the finder of fact, here a jury…in determining the infringement question.”  Newman dissented with a view that the facts clearly show that no disassembly of the accused seat is possible in the context of the claim meaning.

The majority opinion in this case deferred to a jury's role in deciding an issue that could have been more fully addressed in the patent specification.  This fact issue might have been avoided if the patent specification had included a wide variety of mechanisms (even if mostly theoretical) for detaching the seat.

Medimmune, Inc. v. Genentech, Inc. et al.
Decided October 18, 2005   www.fedcir.gov/opinions/04-1300.pdf
Judge Newman with Judges Mayer and Clevenger, Clevenger dissenting in part

*          A patent licensee that does not breach its license and lacks apprehension of suit             cannot assert a declaratory judgment action of invalidity against the patent.

                Medimmune licensed patents and patent applications from both Genentech and Celltech for the use of cell cultures to make human antibodies.  Genentech’s patent application and Celltech’s patent collided via an interference at the PTO.  The PTO held that Celltech’s older patent was prior to the other.  Genentech contested this with a suit under 35 USC 146 at the U.S. District Court for the Northern District of California.  The court allowed the parties to enter mediation, during which they concluded a mutually agreeable cross license with royalty sharing agreement, based on a changed priority to the later Genentech application.  This lengthened Medimmune’s license duration.  Medimmune responded with its own district court action against both parties, asserting declaratory judgment of invalidity, unenforceability of Genentech’s patent, and further that the two licensors colluded during their mediation to optimize profit.  Judge Mariana Pfaelzer dismissed the case however, because Medimmune continued to pay royalties and lacked reasonable apprehension of suit.  Medimmune appealed to the Federal Circuit.

This very interesting fact pattern reveals two adversaries that divvied up royalties after they moved their patent dispute into mediation and created a longer patent/licensing term.  The Federal Circuit affirmed the dismissal of all claims, noting that “settlement of disputes such as priority in patent interferences is not a presumptive violation of antitrust law.”  Clevenger agreed with the dismissal of the patent claims but deemed this dismissal as removing the patent law issues only, and would have allowed transfer of the remaining anti-trust issues to the Ninth Circuit Court of Appeals.

After seven and a half years of slugging it out at the PTO to determine priority, the parties flipped the PTO decision during a mediation in California “based in part on new evidence of the content of a draft patent application,” which was presented to a retired judge acting as a mediator.  This flippage and co-exploitation may have prompted a suspicion that the two adversaries may have gamed the legal system to create an unfair extension of a monopoly over their common licensee.

Sicom Systems Ltd., v. Agilent Technologies, Inc. et al.

Decided October 18, 2005
Judge Prost with Judges Mayer and Rader

*          An exclusive licensee that is not free to sublicense or assign lacks standing to sue without joining the licensor.

            Sicom, an exclusive “commercial” licensee of the Canadian government, sued Agilent at the U.S. District Court for the District of Delaware for allegedly infringing patent claims to digital transmission systems that use eye patterns.  Judge Joseph Farnan, Jr. dismissed the suit for lack of standing because Canada had withheld the right to sue for non-commercial infringement, maintained control over sublicensing and did not participate in the litigation.  Sicom appealed to the Federal Circuit.

The Federal Circuit affirmed because Canada did not transfer substantially all rights to Sicom.  In particular, the Federal Circuit noted that “the restriction on Sicom's right to assign was a fatal reservation of rights by Canada.”

The Federal Circuit outlined license terms that transfer substantially all rights and that support standing.  Notably, such license should: a) transfer all rights including the right to assign and can merely oblige the licensee to inform the licensor in the event of suit; b) include a reversionary right to the patentee in the event of bankruptcy or production termination; and c) include a right to share infringement damages.

Mayer/Berkshire Corp. v. Berkshire Fashions, Inc.
Decided September 22, 2005
Judge Newman with Judges Friedman and Bryson

*          "A trademark infringement action in the district court is not automatically of preclusive effect in a cancellation proceeding."

            Mayer opposed Berkshire's registration for the trademark "BERKSHIRE" at the U.S. PTO during a lawsuit between these parties at the U.S. District Court for the District of New Jersey.  Berkshire won a verdict of non-infringement and the U.S. PTO subsequently dismissed the opposition.  Berkshire then obtained the trademark for the field of apparel.  Mayer opposed the application upon its publication but the PTO held that the "issue of likelihood of confusion" was already decided by the New Jersey court.  Mayer appealed to the Federal Circuit.

            The Federal Circuit vacated the PTO's dismissal because "different causes of action (in the PTO vs in the court) may involve different sets of transactional facts, different proofs, different burdens, and different public policies," which "generally avoid preclusion."

            Berkshire was helped by the fact that its mark was registered in a variety of fields, which minimized overlap with litigated issues.  An aggressive trademark filer should pay the extra fees and register in multiple fields of use.

International Rectifier Corporation v. Samsung Electronics Co., Ltd. et al.
Decided September 23, 2005
Judge Linn with Judges Lourie and Prost

*          A district court needs to provide a "concise but clear explanation" when reducing a fee award.

            In a previous appeal, the Federal Circuit found Samsung not in contempt for violating a permanent injunction and remanded to the U.S. District Court for the Central District of California.  On remand, Samsung moved the district court for an award of more than $1.25 million in attorney's fees but Judge Manuel Real awarded only $650,000, noting that the case "has been terribly overlawyered."  Samsung appealed again to the Federal Circuit, arguing that the district court used clearly erroneous findings when reducing the award.

            The Federal Circuit reversed and remanded again because without "an explanation of the district court's fee reduction, 'we are unable to assess whether the court abused that discretion.'"

            Merely arguing about litigation fees can chew up precious financial resources and lead to an appeal and further litigation.  A creative contract (such as settlement agreement) drafter should include agreements in advance for such issues to minimize unnecessary litigation.

In Re. Stereotaxis, Inc.

Decided October 27, 2005
Judge Friedman with Judges Rader and Dyk

*          “The Trademark Office may require a disclaimer … if the mark is merely descriptive for at least one of the products or services.”

            The PTO agreed to register Stereotaxis’s requested trademark (a logo next to “Stereotaxis, Inc.”) only if the company specifically disclaimed the term “Stereotaxis.”  The PTO deemed this term merely descriptive for the product, which stereotaxically allows positioning of medical devices.  Stereotaxis appealed to the Federal Circuit, arguing that the PTO had failed to specify the products and services that are described by the disputed term. 

The Federal Circuit affirmed, based on a dictionary definition for STEREOTAXIS, which “immediately describes, without conjecture or speculation” some or most of Stereotaxis’s product. 

Stereotaxis lost because it could not "show that its proposed definition would be understood by the relevant public …to be the only meaning of the term."  A company that wants to select and trademark a name should consider something that does not merely restate what the company does or sells.

Novo Nordisk Pharmaceuticals, Inc. v. Bio-Technology General Corp et al.

Decided October 5, 2005

Judge Schall with Judges Archer and Bryson

*          A prophetic example in the past tense can made a patent unenforceable,            particularly when the applicant tried but failed to carry out the invention.

            This is another recent case where a fictitious example in a patent evinced fraud on the patent office, making the patent unenforceable.  Novo sued Bio-Technology at the U.S. District Court for the District of Delaware for infringing patent claims to human growth hormone made from bacteria via an enzyme processing step.  Judge Sue Robinson found the patent anticipated over an earlier journal article and also unenforceable due to inequitable conduct.  Novo appealed to the Federal Circuit.

            The Federal Circuit affirmed anticipation and unenforceability.  In finding anticipation, the court cited the recent Rasmusson case, wherein "[t]he standard for enablement of a prior art reference for purposes of anticipation under section 102 differs from the enablement standard under (section 112)," and that "anticipation does not require actual performance of suggestions in a disclosure."  Unenforceability was amply supported by evidence that the inventor could not practice the claimed invention after the filing date and that the inventor made up and relied on "prophetic data."

            Enthusiasm for a hotly competitive technology with obvious commercial advantages can lead an inventor to file aspirations as inventions.  A patent practitioner should ensure that all technical fantasies in a patent application are properly designated as prophesies, preferably by describing them in present or future tense.

Network Commerce, Inc. and CRS, LLC v. Microsoft Corporation

Decided September 8, 2005

Judge Dyk with Judges Mayer and Friedman

*          A claim term that "does not have a specialized meaning in the relevant art" and   that has no "widely accepted meaning" may be defined strictly by a specification.

            Network sued Microsoft at the U.S. District Court for the Western District of Washington for alleged infringement of computer electronic commerce claims that recite the term "download component" for use in coordinating data.  Judge Marsha Pechman construed the term narrowly and granted Microsoft summary judgment of non-infringement.  Network appealed.

            The Federal Circuit affirmed, noting that the disputed term had been added during prosecution and only a terse reference to a related term "download file" appeared in the specification.  The court found that the disputed term had no widely accepted meaning and no specialized meaning.  The court then followed its dictum that a court should "rely heavily on the written description for guidance" for claim meaning, and derived a narrow description from the specification for interpretation.

            If a desired claim term has no generally accepted meaning and no specialized meaning, a patent drafter should provide a definition in the specification or risk having a court construe the term narrowly based on whatever might be gleaned from the specification.  The Federal Circuit in this case rejected Networks' desire to use dictionary definitions of "download" and "file," rendering unpleasant results to this patentee.
Lizardtech, Inc. and Regents of the Univ. of Cal. v. Earth Resource Mapping, Inc. et al.

Decided October 4, 2005

Judge Bryson with Judges Lourie and Schall

*          "[A] patentee cannot always satisfy the requirements of section 112, (for a broad           claim) merely by clearly describing one embodiment of the thing claimed."

            Lizard sued Earth for allegedly infringing a software method for creating a "discrete wavelet transform" used in digital image compression, at the U.S. District Court for the Western District of Washington.  Judge John Coughenour, after a first remand from the Federal Circuit that clarified claim meaning, granted Earth summary judgment of no infringement and invalidity.  Lizard appealed.

            The Federal Circuit affirmed.  One issue was that the broadest method claims asserted against Lizard failed written description.  The specification "failed to meet either requirement" of written description or enablement because only a narrow embodiment was given and a skilled reader would not possess "any and all means for achieving" the broad claim.

            Broad claims sometimes are flimsy, and may be easiest to attack on prior art, written description and enablement grounds.  Creative patent drafting of alternative embodiments sometimes can go a long way to alleviate the latter two insufficiencies.

Invitrogen Corporation v. Biocrest Manufacturing, L.P. et al.

Decided October 5, 2005

Judge Rader with Judges Dyk and Prost

*          To "qualify as 'public,' a use (under 35 USC 102(b)) must occur without any     'limitation or restriction, or injunction of secrecy.'"

            Invitrogen sued Biocrest at the U.S. District Court for the Western District of Texas for allegedly infringing claims to methods of making improved bacteria for genetic engineering.  Judge Sam Sparks found the claims invalid on prior sale grounds because "Invitrogen had used the claimed process ….to acquire a commercial advantage" more than one year before the patent priority date.  Both sides appealed various issues to the Federal Circuit.

            The Federal Circuit reversed the prior sale invalidity holding because Invitrogen "did not sell the claimed process or any products made with it" more than one year before the priority date.  The court pointed out that "[t]he proper test for the public use prong of the 102(b) statutory bar is whether the purported use (1) was accessible to the public; or (2) was commercially exploited."

            The line between commercial use and research has become more blurred as research methods are used as tools for production or for production themselves.  However, such use of a research method generally is not a statutory bar unless the product of the method is sold. 

U.S. Philips Corporation v. International Trade Commission et al.
Decided  September 21, 2005
Judge Bryson with Judges Gajarsa and Linn

*          A "package patent license" that includes patents to other unneeded technologies is  
     "not anticompetitive in the way that a compelled purchase of a tied product would be."

Philips licensed four different pools of patents to a number of companies.  Each pool included "essential" patents and "non-essential" patents for producing compact discs.  Some of the licensees stopped paying fees and Philips filed a complaint with the International Trade Commission ("ITC"), alleging violation of section 337(a)(1)(B) of the Tariff Act.  The respondents, however, convinced the ITC that the asserted patents were unenforceable on patent misuse grounds because needed patents were tied to un-needed patents, which violates an antitrust law principle.  Philips appealed to the Federal Circuit.

The Federal Circuit reversed because "Philip's package licenses do not require that licensees actually use the technology covered by any of the patents that the Commission characterized as nonessential."  Philips' "package licenses" were not anticompetitive because they did not involve "a compelled purchase of a tied product."  In fact, the Federal Circuit pointed out that "package license agreements in which the royalty was based on the number of units produced, not the number of patents used to produce them, can resolve in advance all potential patent disputes" and may be a good thing.

            We live in a patent proliferation world, where even trying to figure out which patents in a portfolio really cover a product can chew up significant legal resources.  This Federal Circuit decision favors patent pooling, which if done properly, can lower the cost of doing business.

Ron Nystrom v. Trex Company, Inc and Trex Company, LLC
Decided September 14, 2005
Judge Linn with Judges Mayer and Gajarsa

*          "[P]atent drawings …may not be relied on to show particular sizes if the            specification is completely silent on the issue."

Ron sued Trex at the U.S. District Court for the Eastern District of Virginia for allegedly infringing claims to decking boards made with proportioned curved tops that shed water.  Judge Jerome Friedman granted summary judgement of invalidity and non-infringement over a prior art patent that has drawings, which could be used as information to model Ron's claimed invention.  Ron appealed to the Federal Circuit.

The Federal Circuit reversed the invalidity holding based on the prior art patent drawings because "the speculative modeling premised on unstated assumptions in prior art patent drawings cannot be the basis for challenging the validity of claims reciting specific dimensions not disclosed directly in such prior art."  In particular, the Federal Circuit noted that "absent any written description in the specification of quantitative values, arguments based on measurement of a drawing are of little value."

Patent prior art is very extensive, includes both drawings and writings, and usually is searched during patent disputes.  The defendant in this case found related drawings in a prior art patent, and modeled new drawings for an anticipation defense.  In rejecting this approach, the Federal Circuit acknowledged the "explicit or implicit notice to the public" function of patents.  However, citing the recent Philips case, the court cautioned that patent interpretation is through the looking glass of an average skilled artisan, and might not include conclusions from a high priced expert study obtained during litigation.

In RE. Dane K. Fisher and Raghunath V. Lalgudi

Decided September 7, 2005

Judge Michel with Judges Rader and Bryson, Rader dissenting

*          A patent  claim must be supported by a disclosed "specific and substantial" utility           showing of "a specific benefit (that) exists in currently available form.""

            The PTO refused Dane's claims to certain unique but partial DNA sequence segments, or "ESTs" because Dane "did not know the precise structure or function of either the genes or the proteins encoded for by those genes."  The examiner and PTO Board rejected Dane's proffered utility (diagnostic uses for yet unknown compounds) as insufficiently specific.  Dane appealed to the Court of Appeals for the Federal Circuit.

            A panel majority affirmed, because a patent disclosure must show a use "which provides some immediate benefit to the public" (emphasis in original).  The claimed invention here was "mere 'object[s] of use testing,' to wit, objects upon which scientific research could be performed with no assurance that anything useful will be discovered in the end."  Judge Rader dissented because the ESTs had utility "at least as research tools in isolating and studying other molecules."

            Because of the keen industry interest in this issue and the strong split in the panel decision, the "specific and substantial" utility test likely may undergo revision.  However, this refinement of the utility test should not affect the patentability of research method tools, which exploit specific discovered biological effects and/or chemical reactions, and thus have demonstrated "immediate value."  The Federal Circuit pointed out in this case that the frustrated applicant could not even prove industry interest in his ESTs.

Free Motion Fitness, Inc. v Cybex International, Inc.; The Nautilus Group et al.

Decided September 16, 2005

Judge Dyk with Judges Rader and Prost

*          “’A’ or ‘an’ in patent parlance carries the meaning of ‘one or more’ in open ended         claims containing the transitional phrase ‘comprising.’”

            Free sued Cybex at the U.S. District Court for the District of Utah for allegedly infringing claims for machines, which recite “a cable linking” and “a first end pivotally supported.”  Judge Bruce Jenkins granted Cybex summary judgment of non-infringement after construing “a cable” to mean only one.  The court  found non infringement because the accused devices had multiple cables.  Free appealed to the Federal Circuit.

            A Federal Circuit panel majority explained that the “convention” of “a” or “an” meaning “one or more” only is overcome when a specific number of elements are recited or “when the patentee evinces a clear intent to ..limit the article.”

            Judge Prost dissented and construed “a” to mean “one” because the specification discloses “’a single cable’ in each embodiment.”  A patent drafter should provide alternative broadening examples as much as possible because even a Federal Circuit appellate judge may not agree on the meaning of a simple word such as "a.".

Pandrol USA, LP et al. v. Airboss Railway Products, Inc. et al.
Decided September 19, 2005
Judge Rader with Judges Clevenger and Dyk

*          “The written description requirement does not require the applicant to    describe exactly the subject matter claimed."

            Pandrol sued Airboss at the U.S. District Court for the Western District of Missouri for allegedly infringing claims to a railroad track fastener having “a layer of adhering material” between a plate and a concrete rail road tie.  Judge Scott Wright granted summary judgment of no invalidity, and held that the written description requirement was met for this broad interpretation despite the limited description of only two materials in the specification.  Airboss appealed.

            The Federal Circuit affirmed, noting that general statements in the specification referred to bonding, thus justifying a claim for “adhering material” despite the emphasis on only two chemicals.

            The Federal Circuit partly relied on a broad statement in the patent abstract in its expansive interpretation of “adhering material.”  Drafting of the abstract is a great opportunity to impart broad meanings to claim terms.

Cytologix Corporation, v. Ventana Medical Systems, Inc.
Decided September 21, 2005
Judge Dyk with Judges Mayer and Gajarsa

*          While parties to a patent infringement suit might agree to forgo a Markman         hearing, they cannot argue their conflicting claim constructions to a jury.

            Cytologix sued Ventana at the U.S. District Court for the District of Massachusetts for allegedly infringing claims to automated microscope slide stainers.  The parties agreed, contrary to Judge Rya Zobel’s wishes, to avoid a Markman hearing and construed the claims using expert witnesses, after the close of evidence. A jury found infringement, Cytologix won an injunction and Ventana appealed various issues to the Federal Circuit.

            The Federal Circuit found errors in the district court’s claim construction but found infringement under the correct construction and remanded to review an unsettled obviousness issue.  The Federal Circuit pointed out that “[d]istrict courts may engage in a rolling claim construction” but that in this case, “the district court should have refused to allow (claim construction) testimony” to the jury.  Other complications included Ventana's dropping its anticipation theory before the late claim construction, which precluded later raising that issue, and that neither side objected to the jury instructions, which narrowed the scope of appellate review.

            This litigation apparently was a mess because the basic law of the case, namely, claim meaning, was not settled before trial and was argued to a jury. 

In Re. Technology Licensing Corporation
Decided September 12, 2005
Judges Newman, Rader and Bryson, Newman dissenting

*          A “patentee’s decision to seek only equitable relief” (such as an injunction) can result “in the entire case, including invalidity tried to the court without a jury."

            Technology sued Videotek for alleged patent infringement at the U.S. District Court for the Northern District of California.  Videotek’s supplier Gennum, filed a declaratory judgment action alleging invalidity and non-infringement.  The dispute matured into a partial settlement, wherein Technology only requested injunctive relief and Gemmum withdrew its request for a jury trial.  Technology maintained that it wanted a trial by jury, but the court refused because historically, when a patentee seeks “only equitable relief…no jury trial would have been available.”  Technology petitioned the Court of Appeals for the Federal Circuit for a writ of mandamus to compel the district court to grant its request for a jury trial.

            A per curiam majority panel affirmed that Technology had no right to a jury trial for the requested injunctive relief.  In particular, the Federal Circuit noted that under its precedent, when TLC “had filed a standard infringement action as plaintiff and had requested only an injunction, neither TLC nor Gennum would have been entitled to a jury trial, regardless of whether Gennum raised invalidity as a defense or in a counterclaim.”  Newman dissented with some unusual arguments. 

            Technology apparently did not realize that it would lose its jury trial right when it withdrew its claims for damages and sought only an injunction in response to an order that significantly reduced its recoverable damages. 

SKF USA Inc., v. International Trade Commission et al.
Decided September14, 2005
Judge Lourie with Judges Archer and Gajarsa

*          “[P]hysical material differences are not required to establish trademark   infringement involving gray market goods.”

            SKF filed a trademark infringement complaint at the International Trade Commission against importers of “gray goods” (genuine goods sold for less overseas and imported for sale in the US).  SKF argued that the imports “differed materially in the post-sale technical services offered with them,” which caused consumer confusion.  Although sales of the imports were characterized by little or no service, the ITC held that the regular domestic SKF sales and the gray good sales were indistinguishable because 12 percent of SKF’s sales also enjoyed no post-sale services.  SKF appealed to the Federal Circuit.

            The Federal Circuit agreed with the ITC that “material differences that preclude infringement by gray goods may be physical or nonphysical.”  The court also agreed that SKF could not prove that “substantially all” of its authorized sales materially differed from the gray goods, as needed to prove improper sales.  Thus, SKF’s partial sales of non serviced bearings contributed to any consumer confusion that it accused gray market importers of creating.

            This case establishes that non-physical differences such as service can distinguish a product from parallel imports.  If SKF had distinguished “substantially all” of its sales by service, then SKF might have blocked importation via the ITC.

Symbol Technologies, Inc. et al. v. Lemelson Medical et al.
Decided September 9, 2005
Judge Lourie with Judges Mayer and Bryson

*          Prosecution laches may be “decided as a matter of equity, subject to the discretion of a district court” but “should be applied only in egregious cases.”

            This is a second appeal regarding Symbol’s prosecution laches defense against allegations of infringing Lemelson’s machine vision patent claims, which issued 18 to 39 years after their priority dates.  In this appeal from a first remand, the Federal Circuit affirmed Judge Philip Pro’s declaratory judgment at the U.S. District Court for the District of Nevada that Lemelson’s patents are unenforceable under the doctrine of prosecution laches.

The Federal Circuit emphasized that the prosecution laches “doctrine should be used sparingly lest statutory provisions be unjustifiably vitiated” and offered four instances when refiling an application is justified.  These instances include: 1) deferring “filing of a divisional application until just before the issuance of the parent application;” 2) refiling with “rejected claims in order to present evidence of unexpected advantages;” 3) refiling “to add subject matter …to support broader claims;” and 4) other reasons “provided that such refiling is not unduly successive or repetitive.”  Importantly, a finding of prosecution laches does not require a showing of intent, and mere “unreasonable delay” may suffice.

A practitioner could review the four categories of justified circumstances when refiling an application to ensure compliance with the prosecution laches rule.

Freedman Seating Company v. American Seating Company et al.

Decided August 11, 2005

Judge Schall with Judges Mayer and Plager

*          “[A]n element of an accused product or process is not … equivalent to a limitation of the claimed invention if such a finding would entirely vitiate the limitation.”

Freedman sued American at the U.S. District Court for the Central District of California for allegedly infringing claims to a vehicle stowable seat that is “slidably mounted.”  Judge Gary Klausner granted summary judgment of infringement under the doctrine of equivalents because the accused seat was rotatably mounted in a similar manner and included other claim elements. Freedman appealed to the Federal Circuit.

The Federal Circuit reversed the doctrine of equivalents infringement holding because extension of “slidably mounted” to include a rotating structure “would mean that any support member capable of allowing translational and rotational motion would be equivalent,” and thus “vitiate” this claim term limitation.  Most important to the analysis was that the unclaimed variation of rotation was forseeable on the application filing date.  This decision emphasized repeatedly the public notice function of the claims and expresses hostility to use of the doctrine of equivalents when alternative equivalent meanings were well known on an application's filing date.

If a claim element variation is known by others when filed, a court may be reluctant to extend claim scope to that variation under the doctrine of equivalents.  For best protection, a patent practitioner should file a broad specification with claims that cover all known alternative embodiments.

Storage Technology Corp. v. Custom Hardware Engineering & Consulting, Inc. et al.
Decided August 24, 2005

Judge Bryson with Judges Rader and Schall

*          17 U.S.C. 117(c)(2) may allow 3^rd party maintenance vendors to copy and temporarily use non-essential software that automatically loads upon computer startup.

            Storage licenses its copyrighted computer code, which manages tape libraries, to its customers, but excludes the “maintenance code” portion of the software from the licenses.  Custom, which lacked a license, repairs data libraries for these customers by turning on their computers and reading diagnostics codes after defeating a security function.  This prompted Storage to sue Custom at the U.S. District Court for the District of Massachusetts, for alleged copyright infringement and other alleged misdeeds. Judge Rya Zobel granted Storage a preliminary injunction and Custom appealed to the Federal Circuit.

Custom’s primary defense was the safe harbor provision of 17 U.S.C. 117(c), which allows use of software “for purpose only of maintenance or repair” of a machine if the software copy “is made solely by virtue of activation of (the) machine.”  The Federal Circuit vacated the injunction because the maintenance software was intertwined with essential (and licensed) operating software and the computer could not be turned on without loading both types.  The Federal Circuit also clarified that “the term ’maintenance’ has a much broader temporal connotation…including ‘checking the proper functioning of …components.’”  This clarification may broaden the availability of section 117(c) as a defense for unlicensed software users.

” 

Judge Rader dissented because “the maintenance code as such is incidental, not indispensable, to activation” and opined that the majority opinion turns the safe harbor provision of 117(c) into “a carte blanche license to use any program loaded into a computer’s RAM when a machine is turned on.” 

 

Unfortunately, the software vendor had blended user software with maintenance software yet only licensed the user portion.  Software blending often is difficult to avoid.  The Federal Circuit however, hinted that a software license could be written to authorize use by “a particular person” instead of being “tied to a particular machine” to prevent third party vendor use.

Pharmacia Corporation et al. v. PAR Pharmaceutical, Inc.

Decided August 10, 2005

Judge Rader with Judges Schall and Linn

*          A declaration filed at the PTO that contradicts a withheld publication by the       declarant may evince inequitable conduct.

            PAR filed an Abbreviated New Drug Application at the FDA, seeking approval to market a generic version of Pharmacia's Xalatan medication for glaucoma.  In response, Pharmacia sued PAR at the U.S. District Court for the District of New Jersey for alleged infringement of two patents.  PAR admitted infringement but asserted that inequitable conduct rendered both patents unenforceable.  In particular, claims of one patent had been allowed only after Pharmacia submitted a declaration arguing a different clinical effect between two compounds.  However, the declarant withheld contradictory information from his own research publication, which would have mooted his declaration.  Judge Stanley Chesler found the first patent unenforceable for inequitable conduct but would not declare the second patent unforceable on the theory that both patents were terminally disclaimed over a common parent.  Both sides appealed to the Federal Circuit.

            The Federal Circuit affirmed the inequitable conduct holdings because the "misleading declarations go to the very point of novelty," making them highly material, and the declarations were known to the declarant, which evinces intent.  The Federal Circuit agreed that the "district court correctly rejected" the assertion that "a terminal disclaimer can bind two related patents together" to allow cross-infection of inequitable conduct from one patent to the other.

            The Federal Circuit sua sponte brought up "a general unclean hands theory" that might be used to show infection of one patent by via inequitable conduct that affects both.  The defendant surprisingly did not argue this theory.

Datamize, LLC. v. Plumtree Software, Inc.
Decided August 5, 2005

Judge Prost with Judges Clevenger and Bryson

*          A subjective claim term such as "aesthetically pleasing" is indefinite unless the     patent specification provides an objective description for the term.

            Datamize sued Plumtree at the U.S. District Court for the Northern District of California, for allegedly infringing patent claims to "an electronic kiosk system" having "interface screen element types" with an "aesthetically pleasing look and feel."  Judge Vaughn Walker granted Plumtree summary judgment of invalidity on grounds of indefiniteness because the "specification does not limit the subjectivity of the phrase 'aesthetically pleasing.'"  Datamize appealed to the Federal Circuit.

            The Federal Circuit affirmed because "[w]hile beauty is in the eye of the beholder, a claim term, to be definite, requires an objective anchor" and the specification provided no guidance for how to determine when something is "aesthetically pleasing."

            A patent practitioner should never add superfluous words to a claim unless of course, he or she intends to confuse a court during patent enforcement or increase litigation costs.

MEMC Electronic Materials, Inc. v. Mitsubishi Materials Silicon Corp. et al.

Decided August 22, 2005
Judge Schall with Judges Newman and Dyk

*          An overseas user of a U.S. patented process and who collaborates closely with a          final purchaser in the U.S. risks inducing infringement by the purchaser under         35 U.S.C. 271(b).

            This case explores what an overseas company may do when practicing a U.S. patent method claim overseas for the benefit of a final end user in the U.S.  Mitsubishi manufactured silicon wafers made by a process described in MEMC’s U.S. patent and supplied the wafers to Samsung Japan in Japan.  Samsung Japan sold the wafers to Sumsung Austin (in Texas).  All sales negotiations occurred in Japan, but Mitsubishi provided technical information directly to Samsung Austin, and coordinated shipments to that U.S. company.  MEMC later sued Mitsubishi at the U.S. District Court for the Northern District of California under 35 U.S.C. 271 (a) and (b) for alleged direct infringement and inducement of infringement of MEMC’s process patent claims.  Judge Saundra Armstrong granted Mitsubishi summary judgment of no infringement under both theories and both sides appealed various issues to the Court of Appeals for the Federal Circuit.

The Federal Circuit affirmed no direct infringement because all of Mitsubishi’s negotiations, contracting and performance occurred outside the U.S.  The Federal Circuit, however, reversed summary judgment of no inducement of infringement because: 1) Mitsubishi “had knowledge of MEMC’s patent as well as knowledge of Samsung Austin’s potentially infringing activities;” 2) email evidence showed that Mitsubishi “works with Samsung Austin to coordinate shipment dates” including “a shipment of certain wafers directly to Samsung Austin in order to address technical problems;” and 3) Mitsubishi “made several on-site visits to Samsung Austin (to give) technical presentations.”

In a technically complicated field, a manufacturer often works closely with an end user to correct problems and to improve product quality.  These activities could be seen as inducing infringement in some situations.

Aquatex Industries, Inc. v. Techniche Solutions

Decided August 19, 2005

Judge Mayer with Judges Gajarsa and Dyk

*          A specification is more important than prosecution history statements that           do not show a “clear and unmistakable surrender of subject matter” for claim interpretation.

            Aquatex sued Techniche at the U.S. District Court for the Middle District of Tennessee for alleged contributory infringement of claims to the use of evaporative clothing having “a fiberfill batting material.”  Judge Robert Echols granted Techniche summary judgment of noninfringement after construing the term "fiberfill batting material" as not including natural fibers (used in the accused method), based on prosecution history statements.  Aquatex appealed to the Federal Circuit.

The Federal Circuit determined that "[t]he prosecution history …is ambiguous and does not directly address the composition of 'fiberfill'" and reversed non-infringement out of a more expansive term meaning.  The Federal Circuit once again cited the recent Philips decision in favoring the specification over prosecution history, in stating: "because the prosecution history represents an ongoing negotiation, 'it often lacks the clarity of the specification and thus is less useful for claim construction purposes.'"

This case reminds us that the specification is most important for interpreting claims.  One should prepare solid patent applications with numerous examples and careful definitions to alleviate lengthy argumentation during litigation.  Another point was that patent references that had been incorporated by reference into a patent specification "are highly relevant to one of ordinary skill in the art for ascertaining the breadth of the claim term."  A patent practitioner must be careful that entire patents that are incorporated by reference can support undesired claim term meanings.   

Warner-Lambert Company et al. v. Teva Pharmaceuticals USA, Inc.

Decided August 11, 2005

Judge Schall with Judges Linn and Prost

*          Broad claims to multiple compounds may be unenabled if a disclosure only        teaches how to make and use one or two of the compounds.

            Warner sued Teva under 35 USC 271(e)(2)(A) for infringing Warner's Accupril drug formulation patent claims, at the U.S. District Court for the District of New Jersey.  Judge Dickinson Debevoise granted Warner summary judgment of infringement and non-invalidity on enablement grounds.  Teva appealed to the Court of Appeals for the Federal Circuit.

            A Federal Circuit panel reversed summary judgment of no invalidity on enablement grounds.  The court noted that "while the patent claims numerous combinations…..the specification only discloses two working examples, both of which are based on the same general combination…."  In particular, Teva's expert witness had presented a genuine issue of material fact by declaring that "one of skill in the art would need to undertake a range of experimentation in order to practice the invention." 

            An expert declaration can help a party survive summary judgment by demonstrating the existence of a fact dispute, as seen here.  In this case, a complicated fact determination arose because a huge list of compounds was claimed but only one type was taught in the specification.  To minimize fact analysis of enablement during litigation, a practitioner should provide as many examples as possible in a patent specification.

Collegenet, Inc. v. Applyyourself, Inc.
Decided August 2, 2005

Judge Rader with Judges Lourie and Schall

*          "It is well settled that the term 'a' or 'an' ordinarily means 'one or more.'"

            Collegenet successfully sued Applyyourself at the U.S. District Court for the District of Oregon for allegedly infringing claims to methods of creating college application forms "in a format specified by the institution."  Magistrate Judge Dennis Hubel granted a motion as a matter of law for non-infringement, after broadly intgerpreting "a format" to mean "any format" and thus an unlimited number of formats.  Both sides appealed to the Federal Circuit.

            The Federal Circuit held that the district court misconstrued the phrase and reinstated the jury verdict of infringement.  The Federal Circuit initially noted that the patentee did not "expressly define" this term and that the courts must derive the "disputed claim terms from their usage and context."  However, the district court improperly replaced "a" with "any" based on one sentence from the specification and failed to see that , on the whole, the patentee had used the word consistently with general usage. 

            Software patent claims often use simple words such as "format" to describe advances in high technology.  The patent drafter should consider linking such simple terms to a wide variety of examples or to explicit definitions to minimize court misadventure during patent enforcement. 

James A. Frazier et al. v. Roessel Cine Photo Tech. Inc. et al.
Decided August 2, 2005
Judge Linn with Judges Bryson and Dyk, Bryson dissenting in part

*                "In contrast to cases where allegations of fraud are based on the withholding of prior art, there is no room to argue that submission of false affidavits is not material."

                  Frazier licensed a trick photography invention to Panavision and helped obtain a patent.  During prosecution at the patent office, Panavision's patent attorney submitted a video of demonstrative scenes using the invention, in response to rejections.  Later, Frazier and his licensee sued Roessel at the U.S. District Court for the Central District of California for alleged infringement.  However, judge Gary Feess held the patent unenforceable for inequitable conduct because 1. Panavision failed to submit an advertisement that revealed a related prior art technology and 2. the video submitted to the patent office misleadingly had been made with a different (prior art) camera technique.  Both sides appealed various issues to the Federal Circuit.

The Federal Circuit held that Panavisions's withholding of the advertisement was not inequitable conduct because the advertisement "would not have been covered by the claims of Frazier's application."  The court pointed out, however that "[t]he materiality of intentional false statements may be independent of the claims of the patent" and affirmed inequitable conduct based on the misleading video submission.  Judge Bryson dissented from the holding that the withheld advertisement was not material because "a difference in a single element, however important to the patented invention, is not automatically dispositive of the issue of materiality."

Affirmatively lying to the patent office by submitting false information is much more serious than withholding a reference that possibly might be cumulative of other prior art, or which lacks one or more claim elements.

North American Container, Inc., v. Plastipak Packaging et al. (37 defendants)
Decided July 14, 2005
Judge Lourie with Judges Bryson and Linn

*          The recapture rule precludes any amendment by reissue that broadens a
            "non critical" feature that had been added to a claim during original prosecution.

            North obtained a patent that claimed blow molded plastic bottles having dimpled bottoms.  During prosecution North amended the claims to recite that the dimples (which make the bottle stronger) were "generally convex."  Later, North sought a reissue of the patent with extra claims that lacked this limitation.  Various companies in the bottling field filed protests under 37 CFR 1.291(a), alleging violation of the recapture rule because the added claims were broader.  The examiner responded that the term was not a "critical" limitation and allowed the claims anyway.  North then sued the companies at the U.S. District Court for the Northern District of Texas.  Magistrate Judge Sam Lindsay, assisted by special master Paul Janicke, granted summary judgment of invalidity for the broader claims added during reissue, due to violation of the recapture rule.  North appealed to the Federal Circuit.

            The Federal Circuit affirmed invalidity based on violation of the recapture rule after reviewing findings under a three part test: 1. whether the reissue claims are broader than the original claims; 2. whether the broader scope includes matter surrendered in the original prosecution; and 3. whether the reissue claims were narrowed in other respects such that the claims really were not enlarged, thus avoiding the recapture rule.  The reissue claims were deemed broader with respect to the originally surrendered "convex" matter and were not narrowed in other aspects, thus violating the rule.

            This is a second recent case wherein a public protest played a role in PTO examination.  Although the PTO did not agree with the protestor's arguments, the courts did.  This is a welcome example wherein a party can make and lose an argument at the PTO without prejudice to use of the same arguments later in court. 

Electromotive Division of General Motors Corporation v. Transportation Systems Division of General Electric Company and Daido Industrial Bearings, Ltd.
Decided July 28, 2005
Judge Michel with Judges Plager and Linn

*          Experimentation is not a defense against public use or sale unless the use was     controlled by the inventor and the customer (if any) was aware of the experiment.

            GM developed a new locomotive bearing via an in house testing program.  In a second stage "field program," GM substituted the bearing in ongoing orders and examined failed units to see if the failures were caused by the bearing.  More than a year later GM filed two patent applications.  After patent issuance, GM sued GE for alleged infringement at the U.S. District Court for the Eastern District of Michigan.  Judge John O'Meara granted GE summary judgment of invalidity under the on-sale bar of 35 USC 102(b).  GM appealed to the Federal Circuit.

            The Federal Circuit focused on the first prong of the two part Pfaff test for determining commencement of the one year on sale bar period, and noted that a commercial sale existed, but was not experimental.   The latter conclusion was prompted by a determination of two principles to satisfy experimental use: 1. "an inventor must show control over the alleged testing;" and 2. if a sale is involved, then "at a minimum" the "customers must be made aware of the experimentation."  GM's use was not experimental because GM did not control the "field program" use and did not inform its customers (who likely did not want to hear this news) that the bearing was experimental. 

            This decision emphasized that exhaustive analysis of 13 objective factors for determining experimental use often can be avoided by focusing on 1. control by the inventor and 2. awareness of the experimental use by the purchaser. 

Edward H. Phillips v. AWH Corporation et al.
Decided July 12, 2005
En banc

*          A court should continue to "rely heavily on the written description for guidance as           to the meaning of the claims."

*          The Federal Circuit will continue to construe claims as a legal matter without      deference to district court fact finding.

            This eagerly awaited en banc majority decision on claim construction reviews and confirms the existing law but disappoints by avoiding issues that might provide guidance to a very unclear process.  A stinging dissent by Mayer and Newman contests the majority's contention that construction is purely a legal finding and argues that the Federal Circuit should give deference to the district court's claim construction. 

            This case concerns the interpretation of the term "baffles" and the angles that such structures make within building walls, as claimed in Philips' patent.  The CAFC affirmed an earlier panel holding that "baffles" is not a means plus function term.  The court reviewed in some detail what range of angled structures are covered, based on a range of intrinsic and extrinsic evidence as a test case for reviewing claim construction generally.

            The majority decision reiterated the importance of honoring the view of a skilled artisan and emphasized the primacy of "[t]he inquiry into how a person of ordinary skill in the art understands a claim term."  The court appeared to elevate the specification over prosecution history for claim interpretation and to affirm a lower status for dictionaries as extrinsic evidence for possible use after relying first on the specification and file history.  However, the long opinion seemed to offer little new advice.

            Mayer and Newman's dissent declared that the majority decision absurdly adheres "to the falsehood that claim construction is a matter of law devoid of any factual content" and opined that "any attempt to fashion a coherent standard under this regime is pointless."  The dissenters proposed that the Federal Circuit defer to district court claim construction and review claim construction holdings for clear error to "eliminate the time and expense of the charade currently played out before the district court."

            The dissent in this case is a refreshing admission by a minority that the claim construction emperor lacks clothing.  The minority hints at a latent issue in claim construction law, namely how to deal with fact finding after the Supreme Court has kicked the jury out of this process via the fiction that claim construction is purely a legal determination.  An eventual resolution of this contradiction may require a blend of formal fact finding to support legal claim construction, analogous to the legal determination of obviousness based on underlying facts, which the courts are unafraid to carry out now. 
Board of Regents, The University of Texas System and Hydro-Quebec v. Nippon Telephone and Telegraph Corp. 
Decided July 13, 2005
Judge Gajarsa with Judges Schall and Linn

*          Federal court jurisdiction under 28 USC 1338(a) may not exist unless a dispute  
            "necessarily depends on resolution of a substantial question of federal patent law."

            An NTT researcher visited University to research lithium battery electrodes.  The researcher contractually agreed that all discoveries related to his work were to be owned by University.  University then obtained a patent ('382) from the research but sued NTT in Texas state court after the researcher and NTT separately filed a related Japanese patent application.  NTT removed the case to the U.S. District Court for the Western District of Texas in view of 28 U.S.C. 1338(a) (requiring that a federal court handle federal law issues), where Judge Sam Sparks determined that the case "requires an interpretation of (University's) patent, which is a substantial question of federal law."  The court then denied a motion from NTT (formerly a Japanese government monopoly) to dismiss, from the theory that NTT was entitled to foreign sovereign status.  NTT appealed to the Federal Circuit.

            The Federal Circuit held that the district court erroneously had found federal question jurisdiction under 28 USC 1338(a), and transferred the appeal to the Court of Appeals for the Fifth Circuit.  The Federal Circuit explained that "patent law issues identified by NTT are not essential to the resolution of Plaintiff's claim" because: 1) "[p]laintiffs would not need to prove that the '382 patent is valid" to establish its tort claim; 2) "a possible question of inventorship does not convert the state law action into one arising under the patent laws;" and 3) "[t]he construction and scope of the terms of the '382 patent are irrelevant to showing that the technology on which the Japanese patent is based was misappropriated from UT."

            This case reviewed the threshold issue of what minimum patent law issue is required under rule 1338(a) to force removal of a case from state to federal court.  In particular, the rule does not apply if a plaintiff can rely "on another theory involving no patent question" for relief.  The Federal Circuit also found no grounds for removal based on the preemption doctrine (Bonito Boats, Sup. Ct. 1989).  A University request for an injunction to stop NTT's dissemination of "information disclosed in the '382 patent" did not "improperly expand the scope of rights granted under the '382 patent" in violation of this doctrine because University's filing of the patent application extinguished the trade secrets within that application.

            Many trade secret disputes blend federal patent law issues with state tort theories, and pose a jurisdictional question of whether a federal court is required to handle the federal issues of patent law.  The Federal Circuit in this case implied that federal court jurisdiction under 28 U.S.C. 1338(a) is met if a plaintiff absolutely requires interpretation of patent claims for relief. 
 

Princeton Biochemicals, Inc. v. Beckman Coulter, Inc.
Decided June 9, 2005
Judge Rader with Judges Schall and Gajarsa

*          Motivation to combine claim elements for obviousness can arise from a skilled    
      artisan's general knowledge of how closely related prior art solves similar problems.

            Princeton sued Beckman for allegedly infringing patent claims to a coiled capillary electrophoresis apparatus at the U.S. District Court for the District of New Jersey.  A jury found infringement and no invalidity but Judge Mary Cooper deemed the verdict unsupported by substantial evidence and granted judgment as a matter of law in favor of Beckman.  Princeton appealed to the Federal Circuit.

            The Federal Circuit affirmed the invalidity holding after reviewing evidence of motivation to combine a coiled (versus straight) tube to a capillary tube apparatus from the prior art.  An implicit suggestion to combine was found in the knowledge of the skilled artisan and "the nature of the problem (which) called for exactly the solutions in the prior art."  Still further, the court pointed out (as expressed by the PTO during examination) the cited prior art that contained all claim elements in combination "are closely related techniques."  That is, motivation to combine existed because all elements were found in close prior art that solved the same problem, and it was established (using expert testimony in this case) that "one of ordinary skill in the art would look to these related fields."

            The plaintiff in this case may have lacked sufficient expert testimony.  The jury decision was overturned because "there was not substantial evidence to support the jury verdict (of no motivation to combine)."  Furthermore, the Federal Circuit decision emphasized that the plaintiff "offered no evidence to rebut" statements from the defendant that a suggestion to combine items of prior art merely came from knowledge of a skilled artisan.  If rebuttable evidence had been presented, perhaps the jury verdict would have stood scrutiny.

Enzo Biochem, Inc., v. Gen-Probe Incorporated, and Becton Dickenson and Company
Decided July 13, 2005
Judge Lourie with Judges Linn and Prost

*          "Under the final judgment rule, parties may appeal only a 'final decision of a        district court.'"

            Enzo sued Gen-Probe at the U.S. District Court for the Southern District of New York for alleged infringement of claims to nucleic acid probes.  Judge Alvin Hellerstein held the patent invalid on various grounds, orally invited the parties to inform him if he had missed any issues, and then declared "the case was closed" to "enable" a possible appeal.  Enzo appealed and Gen-Probe moved to dismiss because Enzo's counterclaim of unenforceability for inequitable conduct had not been adjudicated. 

            The Federal Circuit agreed with Gen-Probe and dismissed the appeal because "of the nonfinality created by the unquestioned existence" of the counterclaim of inequitable conduct.  The Federal Circuit pointed out that although the district court "may have indicate its intent" to "dispose of all claims and end the case" at "no time was the counterclaim waived" despite Gen-Probes lack of oral notice to the district court when queried on this point.

            The district court judge in this case had responded in part to Enzo's declaration that it would appeal by stating that his "summary order… will enable you to proceed with dispatch in the Federal Court of Appeals on your rights if I have erred."  Now this case returns to the same judge to adjudicate whether Enzo committed fraud on the patent office and if so, whether Enzo has to pay attorney's fees. 

Gary H. Rasmusson and Glenn F. Reynolds v. Smithkline Beecham Corp.
Decided June 27, 2005
Judge Bryson with Judges Plager and Prost

*          “[U]tility must be disclosed [by real data or believable logic] to satisfy the          section 112 enablement requirement.”

            *          “[A]nticipation does not require actual performance of suggestions in a                           disclosure.”

            This case affects the use of prophetic claiming in biotech patent applications. Gary and Smithkline each filed a series of progressively more detailed patent applications covering ideas in the field of prostate cancer treatment.  The PTO Board of Patent Appeals and Interferences held an interference and declared Smithkline the first inventor for use of an enzyme inhibitor because Gary’s first 8 applications failed the enablement requirement.  Gary had asserted in early applications that a compound was an anticancer agent but did not provide any data to challenge conventional wisdom and thus was not “obviously correct.”  The PTO also found that a European patent application did not anticipate Smithkline’s disclosure because the European application was not enabled for the same reason as.  Both sides appealed various issues to the Federal Circuit.

The Federal Circuit affirmed that Gary’s applications were unenabled for lack of persuasive support (i.e. either a showing of real data or an obviously correct argument).  The Federal Circuit explained that “[I]f mere plausibility were the test for enablement under section 112, appliants could obtain patent rights to ‘inventions’ consisting of little more than respectable guesses as to the likelihood of their success.”  The court also reversed the non-anticipation holding because enablement of prior art for 102 purposes can be proven by later results and  the European reference inherently was enabled.  That is, enablement for patentability purposes and enablement of prior art for anticipation purposes differ because section 112 requires a disclosure to teach how to make and use an invention, wherein section 102 lacks this requirement.

Prophetic inventions often are easy to write but are not enabled unless an ordinary skilled artisan would believe the assertions of utility as obviously correct.  Unfortunately for Gary, a scientific report finally confirmed the prophetic clinical usefulness of his claimed compound 10 months before his ninth application.  Enablement was not possible until that date because his data-less prophesy was not believable until proof was available.

Seachange International, Inc., v. C-Cor Inc.
Decided June 29, 2005
Judge Linn with Judges Bryson and Gajarsa

*          “Explicit arguments made during prosecution to overcome prior art can lead to narrow claim interpretations.”

            Seachange sued C-Cor at the U.S. District Court for the District of Delaware for allegedly infringing claims for electronic data storage between interconnected “systems through a network for data communications.”  Judge Joseph Farnam, Jr. construed “network for data communications” to include both direct and indirect communication.  A second, almost identical claim further recited point to point connection, prompting the broader meaning of the earlier claim due to the doctrine of claim differentiation.  C-COR stipulated to infringement, lost a subsequent jury trial and appealed to the Federal Circuit. 

The Federal Circuit construed “data communications” to mean only direct communication despite the existence of a narrower claim that recited this limitation.  Prosecution history arguments had relied on point to point communication in several respects, trumping the doctrine of claim differentiation.  The court also explained that such clarifying statements “may lead to a disavowel of claim scope even if the Examiner did not rely on the argument.”

Checkpoint Systems, Inc., v. All-Tag Security S.A. et. al.
Decided June 20, 2005
Judge Schall with Judges Michel and Dyk

*          The “rule of reason standard requiring corroborating evidence extends to           claims by individuals purporting to be co-inventors.”

            Checkpoint sued All-Tag at the U.S. District Court for the Eastern District of Pennsylvania for allegedly infringing claims to deactivatable labels used in the retail industry.  The claims were to an invention by Jorgensen, who worked with Pichl.  Pichl left the company and formed All-Tag, the defendant, after the patent issued.  In defense of infringement, All-Tag submitted a declaration by Pichel and Jorgensen that they purposely had omitted Pichl as a coinventor of the patented invention years earlier because of a contract based concern.  This prompted.  Judge Petrese Tucker to granted All-Tag summary judgment of invalidity based on 35 USC 102(f) (inventorship by another).  Checkpoint appealed to the Federal Circuit.

            The Federal Circuit reversed because Jorgensen’s declaration of sole inventorship to the PTO contradicted his later declaration made during litigation.  This presented a genuine issue of material fact, precluding summary judgment.  The court explained that the “rule of reason standard corroborating evidence extends to claims by individuals purporting to be co-inventors.”

Invalidity on 35 USC 102(f) grounds often presents an unappreciated opportunity during litigation to take advantage of inventorship complexities, particularly where co-inventors work for a different company, and therefore the invention is, at least in part, “by another.”

Ultra-Precision Manufacturing, Ltd.v. Ford Motor Company
Decided June 15, 2005
Judge Linn with Judges Mayer and Clevenger

*          Patent law can preempt "a state law unjust enrichment claim seeking restitution   based on the use of an idea in the public domain."

            Ford asked two former employees, who started a company Ultra, to help design a pressure valve.  Ultra in response developed a superior valve, filed a patent application for the valve and delivered samples to a contact at Ford for testing.  Shortly afterwards, the contact was replaced with a new contact, Finn, who designed a solution himself and filed his own patent application.  Upon discovering this, Ultra sued Ford at the U.S. District Court for the Eastern District of Michigan, alleging unjust enrichment and requesting correction of inventorship of the Ford application.  Judge Victoria Roberts granted summary judgment of no unjust enrichment to Ford, because federal patent law preempts Ultra's unjust enrichment claim.  Ultra appealed to the Federal Circuit.

            The Federal Circuit affirmed because "state law that conflicts with federal law is without effect."  The court explained that "conflict preemption occurs when state law

'stands as an obstacle…..(such that state law) offers 'patent-like protection' to discoveries unprotected under federal law" (citing Bonito Boats).  Key to the analysis was that Ford did not receive proprietary trade secrets from Ultra, who had published its information in a patent application that became available to Ford (and everyone else).  These facts fit the court's observation that "absent secrecy, state law cannot create a collateral set of rights" to patent rights. 

            Unfortunately Ultra did not execute an agreement with Ford that could have created a  contract right, and Ford availed itself of information that was public.  By choosing patent protection and thereby publishing its new idea, Ultra abandoned other routes of intellectual property protection under state law. 

Upsher-Smith Laboratories, Inc., v. Pamlab, L.L.C. et al.
Decided June 17, 2005
Judge Rader with Judges Michel and Schall

*          "[A] prior art composition that 'optionally includes' an ingredient anticipates a     claim for the same composition that expressly excludes that ingredient."

            Herbert discovered why antioxidants such as vitamin C and E destroy vitamin B12 and folate, and observed that vitamin supplements without vitamin C and E are more stable.  Herbert then obtained a patent with basic claims to vitamin supplements that are "essentially free of antioxidants."  Herbert's assignee Upsher sued Pamlab for alleged infringement at the U.S. District Court for the District of Minnesota.  Judge Ann Montgomery granted Pamlab summary judgment of invalidity based on anticipation over a 40 year old reference, which had warned that vitamins C and E are "incompatible with vitamin B12."  Upsher appealed to the Federal Circuit. 

            The Federal Circuit affirmed because although Herbert "appears to have been the first to precisely articulate that antioxidants destroy vitamin B12 and folate," supplements that are "essentially free of antioxidants were known in the prior art."  

            A scientist may discover how something already practiced really works and may have to go beyond a broad claim based on his theory and find a useful new process or material/apparatus that can benefit from the new insight.  Unfortunately, Herbert's asserted claims broadly covered, as a genus, prior art that inherently included (i.e. without stating explicitly) his claim elements.  The Federal Circuit pointed out that his asserted claims "are not limited to a 'species' of the compositions taught by the" prior art and thus are anticipated by that art.  In this situation a practitioner should try to draft claims directed to narrow but useful species that are not inherent in prior art. 

Northpoint Technology, Ltd. v. MDS America, Inc. and MDS International, SARL
Decided June 28, 2005

Judge Bryson with Judges Schall and Dyk, Dyk dissenting in part

*          A claimed invention that requires use of "additional parameters and        techniques" for operation may lack enablement.

            Northpoint sued MDS at the U.S. District Court for the Southern District of Florida for alleged infringement of claims to methods and apparatus for video reception of two signals on a common frequency based on different "directional reception range" (e.g. one signal is from an overhead satellite and the other is from a different direction on the ground).  Judge James Cohn construed "directional reception range" broadly to mean reception of a signal from a different 3-D space and not necessary from an antenna pointed in a different direction.  A jury found 3 claims infringed but invalid on anticipation grounds over a reference that uses "adaptive array techniques" (i.e. switching techniques to make an antenna pick up signals in a different direction without actually moving it).  The jury also found invalidity on non-enablement grounds.  Northpoint appealed to the Federal Circuit.

            A Federal Circuit panel majority opinion affirmed.  The opinion noted that a co-inventor admitted lack of enablement by testifying that "numerous parameter values and interference mitigation techniques were used" in the first test of the technology" but that "none of these techniques were described or disclosed" in the asserted patents. 

            Judge Dyk dissented with a view that the claims should have been construed more narrowly, which would have avoided the adaptive array prior art.  Judge Dyk also lamented the finding of "lack of enablement in the absence of expert testimony that the experimentation was excessive or not routine."

            It is helpful to actually make and test an invention so that newly encountered variables in the field of reality can be added to an application to more fully enable others to use the invention. 

Alfred Salazar, v. Proctor & Gamble Company
Decided July 8, 2005
Judge Rader with Judges Bryson and Gajarsa, Bryson dissenting

*          "[U]nilateral statements of an examiner in stating reasons for allowance [do not]             create a clear and ambiguous disavowal of claim scope."

            Salazar sued P&G for allegedly infringing his patent claims to a toothbrush having "elastic" rods that extend beyond the bristles.  The examiner who allowed the patent had noted, after completion of prosecution in a "Statement of Reasons for Allowance" statement that prior art brush rods "made of nylon" are "not considered to be 'elastic' as recited by the claim."  Judge H. Dale Cook relied on this statement in granting P&G summary judgment of no infringement, because P&G's accused brush has extending rods made of nylon.  Salazar appealed to the Federal Circuit.

            A majority panel decision of the Federal Circuit vacated the grant of summary judgment because "an applicant's silence regarding statements made by the examiner during prosecution, without more, cannot amount to a 'clear and unmistakable disavowel' of claim scope."  In particular, the significance of nylon had not been debated during prosecution and the applicant was not obliged to rebut the examiner's sudden introduction of this factor as a condition for allowance.

            Judge Bryson dissented with a view that the examiner's "statement is relevant …because it indicates how a person of ordinary skill in the art- in this instance, the examiner, - would understand the claim term 'elastic' in the context of the patent..(and) the applicant should face a heavy burden in later challenging the examiner's interpretation."

            Patent practitioners always should review a "Statement of Reasons for Allowance" and consider filing an explanatory rebuttal, if needed.  However, failure to file a rebuttal may not necessarily prejudice an applicant.  Conceiveably, for an issue that had not been discussed during prosecution, and for which an applicant has a very poor position, silence might be a good option.  A court should not derive a negative inference in this situation.

Purdue Pharma L.P. et al. v. Endo Pharmaceuticals Inc. et al.

Decided June 7, 2005
Judge Plager with Judges Gajarsa and Linn

*          A patent applicant should not present or imply that an "insight" about a possible result is a fact, particularly if relied on to overcome a rejection at the patent office.

            Purdue, a manufacturer of OxyContin(TM), sued Endo, a generic drug maker, under 35 U.S.C. 271(e)(2) on the basis of Endo's filing of an Abbreviated New Drug Application at the FDA, asserting invalidity and non infringement of Purdue's patents.  The patents claim a "controlled release…formulation" that provides specific plasma concentrations of OxyContin at specific time intervals after ingestion.  The claim assertions were supported by statements in the specification that the formulations were "surprisingly discovered" to affect "a substantially narrower, approximately four-fold [drug range]…. (which) is in sharp contrast to the approximately eight-fold range required… in general."  Purdue relied on the "clinical significance" of this dosage range difference to overcome obviousness prior art rejections in arguments at the PTO. 

            During subsequent patent litigation, Endo cited these same assertions to convince Judge Sidney Stein that the patents are unenforceable due to inequitable conduct.  Endo argued that Purdue's implication of clinical results "was left unclarified by any disclosure" of the speculative insight and thus was fraudulent.  Both sides appealed various issues to the Federal Circuit.

            The Federal Circuit affirmed inequitable conduct, noting that Purdue's withholding of the true (i.e. speculative) nature of the effects, which the PTO relied on for patentability was material.  The court found that "intent to mislead the PTO can be inferred from Purdue's statements and the context in which they were made." 

            Sometimes a patent applicant pushes the envelope by filing a disclosure that lacks data but contains speculative results.  The Federal Circuit pointed out here that "experimental results" are not necessarily required for patentability in such instances, but that an applicant can get into trouble if it "misrepresented the results and made reference to them during prosecution."

Boss Control, Inc. et al. v. Bombardier Inc. et al.

Decided June 8, 2005

Judge Prost with Judges Schall and Gajarsa

*          "In fact, the specification is the single best guide to the meaning of a disputed      term."

            Boss sued Bombardier at the U.S. District Court for the Southern District of Texas for allegedly infringing patent claims to a power interruption system used in snowmobiles and watercraft that senses unauthorized use.  Judge Kenneth Hoyt granted Bombardier summary judgment of non-infringement, after construing "operative to interrupt power" to mean sensing a power load threshold, which the accused devices lack.  Both sides appealed various issues.

            This case centered on construing simple words used to describe an innovative circuit that outputs a response based on the amount of sensed electrical current.  The Federal Circuit agreed with the district court's interpretation from statements in the specification that compared the invention with prior art devices that do not sense a power threshold.  The Federal Circuit found that "[i]n this case the specification …clearly gives the term 'interrupt' a special definition" narrower than a definition and thus "the intrinsic evidence binds Boss to a narrower definition of 'interrupt' than the extrinsic evidence might support."

            U.S. patent practitioners avoid teaching a "gist" of the invention to discourage a court from construing a claim narrowly.  However, as seen in this case, simple claim words that require explanation can prompt a court to study the specification to figure out a theory of what was invented.  To prevent such unintended consequences, a practitioner should make sure that the claim terms are clear enough on their face, or provide specific explanation in the specification as a guide.

Air Turbine Technology, Inc. v. Atlas Copco AB et al.

Decided June 7, 2005

Judge Schall with Judges Lourie and Prost

*          A false advertising claim under the Lanham Act requires a showing of causation             between the advertising and an injury.

            Air licensed its metal grinder speed control technology to Atlas, which marketed a pencil grinder, model TSFO6, that embodied the technology.  Air later rescinded the contract, prompting Atlas to replace the product with a new model TSF07 that lacked the desirable speed control.  Alarmed by the resulting market confusion and association of inferiority with its original product, Air sued Atlas at the U.S. District Court for the Southern District of Florida for patent infringement, fraud and other alleged misdeeds.  Judge Kenneth Marra granted Atlas summary judgment of no false advertising because Air failed to show evidence of causation between Atlas's ads and an injury to Air.  A jury additionally found no patent infringement.  Air appealed to the Federal Circuit.

            The Federal Circuit affirmed in a decision that reviewed how "false advertising under the Lanham Act requires, among other things, a showing of both an injury and a casual link between the injury and the allegedly false advertising."  Air did not focus sufficiently on causation of a specific injury but instead argued that Atlas's false advertising had "poisoned the entire tool-industry well" against improved grinders. 

            A negotiator for a license between a patentee and a large marketer should consider the long term added advertising value of a licensed commercialized product.  This case was exacerbated by Atlas's license contract promise to not "exploit the technology" outside the contract, which the courts decided did not cover advertising because exploitation requires to "put into practical use."

Michael Bowling v. Hasbro, Inc.
Decided April 11, 2005
Judge Linn with Judges Michel and Gajarsa

*          "The mere pendency of a court order is insufficient to constitute notice of impending       dismissal with prejudice."

 

            This case concerns the conditions under which a court can dismiss a patent infringement complaint when a plaintiff does not follow court rules.  According to Federal Rule of Civil Procedure 4(m), a plaintiff must serve a defendant within 120 days after filing its complaint, which Bowling failed to do when filing a patent infringement suit against Hasbro at the U.S. District Court for the District of Arizona.  After Bowling did not respond within 30 days of Judge David Bury's warning to show "good cause" why the case should not be dismissed, the court dismissed the case with prejudice.  Bowling appealed to the Federal Circuit.

             The Federal Circuit reversed, pointing out that Bowling's infringement complaint "was pending less than six months, which is less than the time specified in the district court's local rule for dismissal for failure to prosecute."  Also, despite the court's complaint that it needed to spend time on other cases in its docket, "the district court in this case did not invest the time or endure the disruption" that other courts do, in dismissing such cases. 

            District court dockets are crowded.  A court can be uncooperative when a party does not follow rules and does not respond in time to an order. 

Arthrocare Corporation, and Ethicon, Inc., v. Smith & Nephew, Inc.

Decided May 10, 2005

Judge Bryson with Judges Mayer and Lourie

*          Prosecution history of a prior art patent reference can be used to determine anticipation.

            ArthroCare sued Smith at the U.S. District Court for the District of Delaware for allegedly infringing patent claims that recite electrosurgical systems that have "an electrically conducting fluid supply."  A jury found the patent claims valid and infringed and Judge Sue Robinson denied Smith's motions for judgment of invalidity as a matter of law based on an anticipating patent by Ross.  Smith appealed to the Federal Circuit.

            The Federal Circuit reversed the district court's denial of Smith's motion for judgment of invalidity for some of the claims, noting that "it was error for the district court to limit the disclosure of the prior art reference to a preferred embodiment."  The Federal Circuit explained that prosecution history statements for the asserted prior art patent indicated that the patent must "provide the necessary electrical conductor" and thus "discloses an electrically conducting fluid" in anticipation of this claim element.

            The district court also dismissed Smith's antitrust counterclaim without providing Smith an opportunity to amend the counterclaim.  The district court had stayed proceedings related to the antitrust issue before Smith's response was due to a dismissal motion from AnthroCare.  The Federal Circuit vacated this dismissal because a "court should dismiss only if the complainant is unable or unwilling to amend the complaint."

            In this case a district court narrowly construed not a litigated patent, but rather the disclosure of a prior art patent by limiting that patent to a preferred embodiment.  The Federal Circuit, however, reached into the prosecution history to interpret the patent more broadly, and overturned a validity holding.

Teva Pharmaceuticals USA Inc. v. Pfizer, Inc.
Decided January 21, 2005, Rehearing Denied April 4, 2005
Judges Clevenger, Schall and Meyer, Meyer dissenting

 

*          A generic drug maker does not have reasonable apprehension of suit from a previous     drug maker merely by filing an ANDA that attacks a patent in the FDA orange book.         

            In this procedurally complex case, a divided Federal Circuit held that "a reasonable apprehension of imminent suit" suitable to support a declaratory judgment action is not created when a generic drug maker files an Abbreviated New Drug Application ("ANDA") at the FDA.  Teva had filed an ANDA, asserting invalidity and non-infringement of a patent that Pfizer had listed in the FDA's "orange book."  This filing was an early step in Teva's plan to market its generic version of Pfizer's patented Zoloft(TM) drug.  The two companies skirmished under the rules that extend a pioneering drug maker's patent term in exchange for allowing generics to take advantage of earlier regulatory approval.  Under those rules, Pfizer had a 45 day period to sue Teva for patent infringement but did not.  Teva then sued Pfizer for declaratory judgment of non-infringement and invalidity at the U.S. District Court for the District of Massachusetts.  Judge Richard Stearns dismissed the suit on the basis that Teva did not have reasonable apprehension that Pfizer would sue Teva.  Teva appealed to the Federal Circuit.

            In a January 21, 2005 decision, a Federal Circuit panel affirmed.  The court found that Teva had no apprehension of suit because "the listing of a patent in the Orange Book by an New Drug Application filer [Pfizer] is the result of a statutory requirement (and) without more …should not be construed as a blanket threat to potential infringers."  Teva asked the Federal Circuit to reconsider.  Although the court denied a rehearing, this denial was accompanied by several long dissents, illustrating that the Federal Circuit remains deeply divided on this issue. 

            The use of and compliance with the ANDA filing requirements at the FDA often affects the time period during which a drug maker can sell an important drug exclusively.  This case overturns an assumption that filing an ANDA by a generic drug maker creates an apprehension of lawsuit from a preceding drug maker.  The lessoned ability to file a declaratory judgment action in this situation may affect generic drug makers where the preceding maker benefits by not responding to an ANDA filing that asserts invalidity of its patent.

The Gillette Company v. Energizer Holdings, Inc.
Decided April 29, 2005
Judge Rader with Judges Michel and Archer, Archer dissenting

*          "'[F]irst, second, and third' are terms to distinguish different                    elements of the claim, not terms supplying a numerical limit."

            Gillette sued Energizer at the U.S. District Court for the District of Massachusetts for allegedly infringing claims to a multiple blade razor, which recite "a group of first, second, and third blades" arranged a certain way.  Judge Patti Saris denied Gillette's request for a preliminary injunction against Energizer's four blade razor after interpreting the claims as limited to a three blade razor.  Gillette appealed.

            The Federal Circuit found that the district court erroneously construed the terms "first, "second," and "third" as numerical limitations.  The court emphasized that the claims include "the 'open' claim terms 'comprising' and 'group of',…..to encompass subject matter beyond a razor with only three blades."  Regarding the phrase "group of," the majority opinion explained that "to 'close' a Markush group, the PTO insists on the transition phrase 'group consisting of."  Thus, "without the word 'consisting' the simple phrase 'group of' is presumptively open.'"  Judge Archer dissented with a view that the patentee used these terms "in a manner other than their ordinary meaning'" 

            Broad claims are a major focus of patent prosecution.  This case teaches that the term "group," by itself, can have a broad meaning similar to that of "comprising."

Hoffer v. Microsoft Corporation et. al.
Decided April 22, 2005
Judges Newman, Bryson and Dyk, Newman concurring separately

*          "When a harmless error in a patent is not subject to reasonable debate, it           can be corrected by the court, as for other legal documents."

Hoffer sued Microsoft at the U.S. District Court for the Northern District of California for allegedly infringing claims of a method patent for electronic trading.  Judge Ware granted summary judgment of non-infringement and invalidity for claim 22 on indefiniteness grounds.  Claim 22 was filed as claim 39 and depended on claim 38 during prosecution.  Claim 22 of the issued patent, however, still recited claim 38, instead of claim 1, and thus was unclear.  Hoffer appealed to the Federal Circuit.

The Federal Circuit, in a per curiam decision, reversed the invalidity holding because "[a]bsent evidence of culpability or intent to deceive by delaying formal correction, a patent should not be invalidated based on an obvious administrative error."  In this case, "the error was apparent from the face of the patent" and the district court should have corrected it.

Judge Newman wrote separately to emphasize her concern that the Federal Circuit also should have construed other disputed claim terms, instead of finding non-infringement after interpreting this one term.  

A practitioner should routinely review patents upon issuance and request a correction from the PTO when finding an obvious error such as claim numbering.

Nazomi Communications, Inc. v. Arm Holdings, PLC et al.
Decided April 11, 2005
Judge Rader with Judges Michel and Prost

 
*          A district court must provide the basis for its claim construction.  This may         include an analysis of a skilled artisan's knowledge.

Nazomi sued Arm at the U.S. District Court for the Northern District of California for allegedly infringing claims to a computer system for implementing Java software.  Judge Jeremy Fogel held summary judgment of no-infringement in a decision that included one paragraph of claim interpretation with a terse, "infringement analysis" based on circular reasoning.  Nazomi appealed to the Federal Circuit.

The Federal Circuit vacated and remanded because "the district court did not construe the disputed claim term in sufficient detail for appellate review."  The Federal Circuit noted that the district court may have embraced an improper "practicing the prior art" defense and had glossed over claim interpretation in the decision.

This opinion includes a detailed summary of what the Federal Circuit likes to see from a district court before carrying out its own review.

           
In Re. Dr. Matthias Rath
Decided March 24, 2005
Judge Dyk with Judges Bryson and Linn

*          The U.S. did not fully implement the Paris Convention treaty with respect to       trademarks for foreign applicants.

The Federal Circuit declared in this case that "the Lanham Act overrides the requirements of the Paris Convention with respect to the rights of foreign registrants."  Rath, a German citizen, had applied for a counterpart U.S. trademark to his German trademark "RATH" but the PTO refused registration because the mark was primarily merely a surname and lacked acquired distinctiveness. 

Rath appealed to the Federal Circuit, arguing that the surname rule contradicts the Paris Convention treaty with respect to foreign trademark holders.  This treaty states in part that: A(1) "[e]very trademark duly registered in the country of origin shall be accepted…in the other countries of the Union, subject to the (three) reservations…."  Rath argued that the surname rule is not within the reservations of the Paris Convention and that foreign trademark holders have rights that U.S. citizens lack, in this respect. 

A majority decision affirmed the PTO's refusal, because "the provisions of the Convention of Paris are not self-executing and legislation is therefore needed" for implementation, yet the U.S. Congress did not implement the cited provision.  Judge Bryson in a dissent noted that "whether the Lanham Act should be read to conflict with and trump the Paris Convention …has significant potential implications for international intellectual property law."  Judge Bryson preferred instead to interpret the surname rule issue as a formal exception within the Paris Convention, and therefore consistent with U.S. law.

As the dissent pointed out, the court could have interpreted the surname rule within an exception (the trademark is "devoid of any distinctive character) of the Paris Convention.  One can wonder what other parts of the Paris Convention have not been implemented.

Schreiber Foods, Inc. v. Beatrice Cheese, Inc. et al.
Decided March 22, 2005
Judge Dyk with Judges Rader and Archer

*          An infringement judgment is not voided by a temporary transfer of a patent in     suit to a non-party, which temporarily deprives the court of jurisdiction.

*          "If a lawyer has offered material evidence and comes to know of its falsity, the   lawyer shall take reasonable remedial measures."

            Schreiber sued Beatrice at the U.S. District Court for the Eastern District of Wisconsin for alleged infringement of patent claims to methods and devices for hermetically sealing food.  During the litigation, Schreiber assigned the litigated patent to a subsidiary, apparently for tax purposes, but did not inform Beatrice or the court.  Furthermore, Schreiber responded to a subsequent discovery request that it "is not aware of any" documents concerning assignments or security interests in the patent.  Later, while the case was pending, Schreiber's counsel learned of the assignment.  The counsel "concluded that there was no legal or ethical obligation to disclose the assignment" or the falsity of the statements made during discovery, but instructed Schreiber to quietly reacquire the patent. 

            Beatrice learned of the assignments from another case.  After relay of this information to the court, Judge Lynn Adelman vacated the judgment and dismissed the case for lack of jurisdiction as a sanction.  Schreiber appealed, waiving its claim for damages but otherwise seeking reinstatement of the judgment that the patent is enforceable and infringed. 

            The Federal Circuit reversed the dismissal and remanded for a new trial, which among other things would allow the district court "to first consider lesser sanctions."  The Federal Circuit noted that "Schreiber had constitutional standing at the time the suit was commenced" and "the temporary loss of standing during patent litigation can be cured before judgment."

            The plaintiff initially got into trouble by assigning its patent (including the right to sue for past actions!) during litigation without informing the litigation team.  This mistake was compounded by the plaintiff's failure to amend its earlier false discovery statement, which the Federal Circuit found to be "plainly sanctionable."          

Asyst Technologies, Inc. v. Emtrak, Inc. et al.
Decided March 22, 2005
Judge Bryson with Judges Michel and Newman

*          The "specific exclusion principle," which is similar to the all elements rule, blocks            the doctrine of equivalents for a claim term that describes two conditions.

            Asyst sued Emtrak at the U.S. District Court for the Northern District of California for allegedly infringing patent claims that recite a communication "means mounted on" a transportable container in a factory.  After a first remand from the Federal Circuit, Judge Jeremy Fogel granted summary judgment of non-infringement.  The District Court also found a second claim, which recited "sensing means" non-infringed because the accused device lacked a "structure constituting the sensing means" as described in the patent.  Both sides appealed various issues to the Federal Circuit.

            The Federal Circuit affirmed that the claim term "'mounted on' limitation is binary in nature (and the) means must be either mounted or unmounted."  Accordingly, the accused system, which relies instead on a computer interface mounted elsewhere to relay signals could not literally infringe.  The accused device also did not infringe under the doctrine of equivalents because to "hold that 'unmounted' is equivalent to 'mounted' would effectively read the 'mounted on' limitation out of the patent….would vitiate an entire claim limitation" under the all elements rule.  The court further noted that "[t]his case falls within both that doctrine and its corollary, the 'specific exclusion' principle" because of the binary nature of the term.

            A claim term construction that admits only two conditions (i.e. is "binary in nature") may potentiate application of the all elements rule and also the specific exclusion principle.  Another point for the engineering field is that the Federal Circuit interpreted "sensing means" without limitation to a structure in the specification, thereby reversing a district court's non-infringement holding.  A category of "means for" technical terms may exist that do not require a description of structure in the specification. 

Playtex Products, Inc. v. Proctor & Gamble Company
Decided March 7, 2004
Judge Gajarsa with Judges Lourie and Linn

*          "Words of approximation, such as 'generally' and 'substantially,' are descriptive terms     commonly used in patent claims to avoid a strict numerical boundary."

            The U.S. District Court for the Southern District of Ohio granted P&G summary judgment of no infringement of Playtex's tampon inserter claims that recite "two ….opposed, substantially flattened surfaces."  Judge Thomas Rose construed "substantially flattened" as flattened enough to fall within a manufacturing tolerance, based on extrinsic evidence from Playtex's expert, after deciding that the patentee's preferred embodiment did not fall within a more common definition based only on intrinsic evidence.  No infringement was found because the accused devices did not "fall within a manufacturing tolerance for flatness."  Playtex appealed to the Federal Circuit.

            The Federal Circuit reversed because "the district court found ambiguity where there is none" and "erred in going beyond the intrinsic evidence" to construe the term "substantially flattened."  Instead, the intrinsic evidence simply shows that such surfaces are "material flatter than" other parts of the device.

            Patent practitioners often use terms of approximation such as "substantially" to describe an invention.  If the practitioner desires claims that are easily construed in court, further description should be provided, by way of explicit definition or examples.

Eolas Technologies Inc. and the Regents of the University of California v. Microsoft Corp.
Decided March 2, 2005
Judge Rader with Judges Friedman and Plager

*          "[S]oftware code made in the United States and exported abroad is a 'component of a   patented invention' under section 271(f)."

            Eolas sued Microsoft at the U.S. District Court for the Northern District of Illinois for allegedly infringing patent claims to software that allows interactive gaming by an internet browser.  After a jury trial, Judge James Zagel rejected Microsoft's affirmative defenses of invalidity and inequitable conduct, and held that Microsoft owes Eolas royalty for related software that Microsoft sent overseas for sale, under section 271(f) of the patent code.  Microsoft appealed to the Federal Circuit.

            The Federal Circuit vacated and remanded for a new trial because the district court erroneously had concluded that an anticipating public use by another more than one year before the filing date subsequently became abandoned, after the user moved to a more advanced version of his software.  The Federal Circuit pointed out that "creating an improved version of an invention does not in any sense abandon the original invention."  The Federal Circuit also affirmed the ruling that Microsoft's shipments of browser software overseas was a transfer of a component of a patented invention as an infringement of a U.S. patent under 35 U.S.C. 271(f) because "every form of invention eligible for patenting falls within the protection of section 271(f)."

            Software inventions enjoy the same protections as hardware under the patent laws (including 271(f)) and increasingly are seen as indistinguishable from hardware.  The Federal Circuit in this case noted that "[o]n a functioning computer, software morphs into hardware and vive versa at the touch of a button."

ASM America, Inc. et al. v. Genus, Inc.
Decided March 16, 2005
Judge Bryson with Judges Newman and Friedman

*          "When a patentee defines a term in the specification, that definition ordinarily controls."

            ASM sued Genus at the U.S. District Court for the Northern District of California for allegedly infringing claims to a process for sequential layer deposition on semiconductors, using an "evacuating step."  Judge Elizabeth Laporte, noting the frequent use of "vacuum pump" and "evacuation" in the patent specification and file history, granted summary judgment of noninfringement because the accused process lacked an evacuating step.  Genus appealed to the Federal Circuit.

            The Federal Circuit affirmed for the same reasons given by the district court in a decision dominated by claim construction arguments.  In addition to the intrinsic evidence regarding the need to evacuate with a partial vacuum to carry out the claimed invention, the court also noted that when "considering purchasing" the patent, ASM's "own Chief Technology Officer stated that the claims…were limited" to evacuation processes.  Furthermore, the inventor in his notebook had stated that "an essential requirement of this new process is that it be done in a vacuum chamber." 

            Statements about limitations of a new invention by an inventor and by a technology manager can haunt a party that later asserts a patent during litigation.  Defendants in such litigation should look for these admissions during discovery.

Medrad, Inc. v. MRI Devices Corporation

Decided March 16, 2005
Judge Bryson with Judges Rader and Friedman

*          "The manner in which (a) term is used in the patent" dictates a different definition from    "the same term in a different patent with a different specification."

            Medrad sued MRI at the U.S. District Court for the Western District of Pennsylvania for allegedly infringing claims to an MRI system that coordinates overlapping coils to maintain a "substantially uniform" magnetic field.  Judge Terrence McVerry granted partial summary judgment of invalidity based on prior art that also produced an arguably uniform field with overlapping coils.  Medrad appealed to the Federal Circuit, which affirmed.

            Claim construction dominated this case.  The main issue was whether the definition for "substantially uniform" was broad enough to cover the prior art.  One debate concerned whether the Federal Circuit's construction of "substantially uniform" in another case involving a solid detergent shape should inform interpretation of the term in this case.  The Federal Circuit specifically declined to follow its earlier definition because "[t]he use of a term in a patent on a detergent is of little pertinence to the use of a similar term in a patent on MRI RF coils."  The Federal Circuit explained that it is "entirely proper to consider the functions of an invention in seeking to determine the meaning of particular claim language."

            Although simple English words often are used to claim an invention, the purpose and proper functioning of the invention may be relied on to put a gloss on their construed meanings.

Evident Corporation et al. v. Church & Dwight Co., Inc. et al.
Decided February 22, 2005
Judge Lourie with Judges Schall and Linn

*          "[A] patentee should be joined, either voluntarily, or involuntarily, in any infringement      suit brought by an exclusive licensee."

            Three inventors of toothpaste formulations filed a patent application and assigned their rights to their company Peroxydent.  Peroxydent then licensed those rights to Evident, while reserving a right of first refusal to bring suit for infringement.  Later, Evident sued Church, which joined Peroxydent to the lawsuit.  Church won the lawsuit, including an inequitable conduct holding.  After Judge Mary Cooper awarded Church attorney's fees of more than 1 million dollars, Evident and Peroxydent suddenly argued lack of jurisdiction in an appeal to the Federal Circuit, because the former was a "mere licensee lacking all substantial rights in the patent" without standing to sue, and the latter "was simply a passive third-party counterclaim defendant without an interest in the litigation."

            The Federal Circuit affirmed that both Evident and Peroxydent were jointly and severally liable for the attorney fee award, in an opinion that reviewed the need to join patent owners and others with standing to sue, to ensure "that all entities with an interest in the asserted patent were part of the lawsuit."

            An interesting point in this case was that the Federal Circuit cited New Jersey partnership law in holding Peroxydent responsible for the consequences of inequitable conduct carried out by the inventors and their other company, Evident, even in the absence of any participation or knowledge of the fraud.   

V-Formation, Inc., v. Benetton Group SPA, et al.
Decided March 15, 2005
Judge Rader with Judges Mayer and Prost

*          A listed prior art reference is intrinsic evidence for claim construction because it shows   claim "usage in context as understood by one of skill in the art at the time of invention."

            V-Formation sued Benetton at the U.S. District Court for the Southern District of New York for allegedly infringing claims to a roller skate having "fasteners for releasably attaching" sidewalls.  Judge Harold Baer Jr. granted Benetton summary judgment of non-infringement because Benetton's accused skates used a rivet instead of a releasable attachment.  V-Formation appealed to the Federal Circuit.

             The Federal Circuit affirmed, based on a review of the "intrinsic record" as "the primary tool to supply the context for interpretation of disputed claim terms."  Within the intrinsic evidence was a statement in a publication submitted in an information disclosure statement.  This cited document stated (referring to a prior art skate) that "[i]n alternative embodiments, a more permanent fastener such as a rivet could also be used."  The Federal Circuit approved this use of cited art, noting that "when prior art that sheds light on the meaning of a term is cited by the patentee, it can have particular value as a guide to the proper construction of the term."

            The use of cited prior art for claim construction could become very powerful in litigation because patentees, particularly in fields such as biotechnology, often cite many patents and other documents, in an effort to sweep such publications into the record.  However, as seen here, such references contain numerous statements that are intrinsic evidence, possibly on equal footing with the patent specification itself, to interpret patent claims.

Sentry Protection Products, Inc. et al. v. Eagle Manufacturing Company

Decided March 11, 2005

Judge Prost with Judges Lourie and Schall

*          "Constructive notice (of a patent) is provided 'when the patentee consistently marks       substantially all of its patented products.'"

            Sentry sued Eagle at the U.S. District Court for the Northern District of Ohio for alleged infringement of claims to a building column protector to withstand collisions with fork lift trucks.  Judge Solomon Oliver Jr. determined that no damages were available and therefore granted summary judgment of noninfringement for one of the asserted patents.  Sentry appealed to the Federal Circuit.

            The Federal Circuit affirmed most holdings but vacated the noninfringement finding because the district court misapplied the constructive notice rule.  Sentry had provided an affidavit that its products had been marked, which the district court had discounted as not presenting an issue of fact.  In contrast, the Federal Circuit held that Sentry "is entitled to an opportunity to prove constructive notice and corresponding entitlement to damages."

            As part of an overall patent protection program a patentee should carefully mark all products covered by a patent.  This case is a reminder that failure to provide either actual or constructive notice to an opponent, can block or restrict a damage award during litigation.

Pause Technology LLC v. Tivo Inc.

Decided March 14, 2005

Judge Linn with Judges Newman and Lourie

*          "A judgment that does not dispose of pending counterclaims is not a final judgment" and cannot be appealed to the Federal Circuit.

            Pause sued Tivo at the U.S. District Court for the District of Massachusetts for alleged infringement of claims to digital video recorders.  Judge Patti Saris granted summary judgment to Tivo of non-infringement but did not comment on Tivo's invalidity counterclaims.  Pause appealed to the Federal Circuit.

            The Federal Circuit declared that it lacked jurisdiction and dismissed the appeal.  While noting Pause's argument that the district court appeared to have "implicitly dismissed the invalidity counterclaim as moot" and that the court "docket sheet shows that the case was dismissed" the Federal Circuit pointed out that "a final judgment is a decision by the district court that ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." 

            The Federal Circuit complained that "parties too frequently are not reviewing the actions of the district courts for finality before lodging appeals" and that the court recently amended "Federal Rule 28(a)(5), which now requires that the jurisdictional statement also include a statement that the judgment or order appealed from is final or otherwise appealable."  

             
Independent Ink, Inc. v. Illinois Tool Works, Inc. and Trident, Inc.
Decided January 25, 2005

Judge Dyk with Judges Clevenger and Prost

*          "[T]he sale or lease of a patented item on condition that the buyer make all of his            purchases of a separate tied product from the patentee is unlawful."

            Trident's standard licensing agreement specifies that the licensee can use Trident's ink jet device technology only if the licensee "purchase their ink for Trident-based systems exclusively from Trident."  Independent, a competing ink manufacturer, sued Trident at the U.S. District Court for the Central District of California for declaratory judgment of non-infringement and invalidity of Trident's ink jet patents.  Independent also alleged that Trident illegally tied its patented product to a non-patented product (ink) in an illegal monopoly under the Sherman act.  Judge Cormac Carney granted summary judgment against Independent because Independent could not prove that Trident had market power for the monopoly.  Independent appealed to the Federal Circuit.

            The Federal Circuit reversed and remanded because the district court erroneously had concluded that to prove "a violation of the antitrust laws, the plaintiff must affirmatively prove market power."  The Federal Circuit pointed out that "where the tying product is patented or copyrighted, market power may be presumed rather than proven."  The district court had refused to follow supreme court law on this point because of extensive commentary by others that the supreme court is wrong.  However, "it is a duty of a court of appeals to follow the precedents of the Supreme Court, …..even where a Supreme Court precedent contains many 'infirmaties' and rests upon 'wobbly, moth-eaten foundations.'"

            A patentee often wishes to control not only a patented product but also a related product, via "tying."  To avoid violating anti-trust rules, the patentee should obtain dependent patent claims that recite the related product, or claims that recite a combined use with the related product. 

Silicon Image, Inc. v. Genesis Microchip Incorporated and Genesis Microchip (Del) Inc.
Decided January 28, 2005

Judge Gajarsa with Judges Michel and Linn

*          "[T]he trial court must dismiss, with or without prejudice, all of the claims" before an       appeal can be made to the Federal Circuit even if the parties have a settlement.

            Silicon sued Genesis at the U.S. District Court for the Eastern District of Virginia for allegedly infringing claims to digital interfaces.  After a Markman hearing, Judge Robert E. Payne suggested that the parties continue settlement discussions.  In response, the parties executed a Memorandum of Understanding ("MOU"), which required a subsequent "Definitive Agreement."  The parties failed to execute the second agreement and the MOU controlled their relationship.  Upon request by both sides, the court entered a "Final Judgment Order" that incorporated the MOU terms and also dismissed the case with prejudice upon certification of a payment.  The court further declared that its order was "a final and appealable order."

            Genesis appealed to the Federal Circuit and both parties admitted that the district court "had not issued an order dismissing the action."  The Federal Circuit dismissed for lack of jurisdiction because even though the district court had "ostensibly" disposed of the case, the MOU terms included in the district court's final order explicitly had "made a dismissal with prejudice of Silicon's patent infringement claims consideration for providing the agreed upon settlement amount and royalty terms."  Noting that "settlement agreements are contracts" the Federal Circuit explained that the district court could not change the MOU terms without consent of the parties and that their agreement "may not now be unilaterally undone by a court."

            A theme in this procedurally complex case was that a negotiated agreement with dismissal of a court action required satisfaction of contract terms (Silicon to receive payment).  The actual conditions for the stipulated dismissal became a sticking point and might have been negotiated more carefully.

Mark Thatcher et al. v. Kohl's Department Stores, Inc. et al.

Decided February 10, 2005

Judge Mayer with Judges Michel and Linn

*          Consent judgments must be carefully drafted because they "are fundamentally different   from contracts" and reflect "a compromise of contested legal positions."

            Thatcher and Kohl's settled their patent litigation dispute over Kohl's sale of shoes, at the U.S. District Court for the Northern District of Illinois, by executing a consent decree that specified "Kohl's obligation to avoid infringing activity" including all "successors-in interest" of Kohls.  The consent decree unfortunately (for Thatcher), lacked "language of assignability, such as the 'successors-in-interest' languge used when discussing Kohl's obligations."  Deckers acquired Thatcher's property rights and then discovered an alleged violation by Kohls of the consent decree.  As the purported successor in interest to Thatcher, Deckers attempted to enforce the consent decree against Kohls but judge George Marovich dismissed because Deckers was not a party to the consent decree but was merely a beneficiary.  Thatcher and Deckers appealed to the Federal Circuit.

            The Federal Circuit affirmed because the consent judgment was "silent" on the issue of enforceability by Thatcher's successors in interest, despite explicit language pertaining to Kohl's successors in interest.  The court pointed out that consent agreements do not necessarily follow contract law principles, which otherwise would have allowed Deckers to proceed.  A consent agreement drafter should be aware of this difference and should explicitly include conditions that otherwise might not be mentioned in a regular contract.

Palm Bay Imports, Inc. v. Veuve Clicquot Ponsardin Maison Fondee En 1772
Decided February 9, 2005

Judge Rader with Judges Michel and Prost

*          An uncommon foreign word may be used as a strong distinctive term in a trademark.

            The PTO refused to register Palm's mark VEUVE ROYALE for sparkling wine based on likelihood of confusion with Veuve's marks including the mark "Royal Widow," partly because "veuve" means "widow" in French.  Palm appealed to the Federal Circuit.

            The Federal Circuit affirmed.  The court pointed out that an arbitrary word "used in an unexpected or uncommon way" for a trademark is "typically strong."  Thus, although Palm's mark has a second word that differs from Veuve's mark, the first word is the "dominant feature in the commercial impression created by Palm Bay's mark."  The Federal Circuit also disagreed that "foreign equivalents" of the "veuve" mark caused confusion.  The court explained that an American buyer would not translate the term veuve" into "widow" and then be confused by the similarity to Veuve's "Royal Widow" trademark.

            This case is important to disputes over trademarks that use one or more words of foreign origin.  In these instances, whether a consumer can translate and readily understand the foreign meaning becomes an issue.

Star Fruits S.N.C. and Institute of Experimental Botany v. U.S. et al.
Decided January 3, 2005
Judge Clevenger with Judges Newman and Dyk, Newman dissenting

*          A patent applicant cannot refuse “to comply with an information requirement”    from a patent examiner that “is not arbitrary or capricious.”

            Star applied for a plant patent at the U.S. PTO but refused to comply with the PTO’s request for evidence of foreign sale or use of the plant. The PTO intended to treat such evidence as prior art and Star disagreed with this legal position.  Star refused to submit the evidence on the grounds that the information was not relevant, but the PTO declared  the application abandoned for failure to respond.  Star unsuccessfully petitioned the PTO commissioner and then sued the commissioner at the U.S. District Court for the Eastern District of Virginia.  Judge Leonie Brinkema affirmed the PTO’s decision and Star appealed to the Federal Circuit.

            The Federal Circuit affirmed the district court, noting that “[a]n agency’s interpretation of its own regulations is entitled to substantial deference and will be accepted unless it is plainly erroneous or inconsistent with the regulation.”  More specifically, Star’s “contrary view of the applicable law” was not an excuse to refuse cooperation with the PTO during examination.  Judge Newman dissented with an opinion that the district court should have considered Star's prior art legal issue and preferred that the Federal Circuit remand on that basis.

A patent practitioner often disagrees with the PTO’s view of the law.  However, the proper response is through an appeal, and not by refusing to cooperate with the PTO.  

Electronics for Imaging, Inc., v. Jan R. Coyle and Kolbert Labs.
Decided January 5, 2005
Judge Lourie with Judges Rader and Gajarsa

*          When threatened, an accused infringer is “entitled to sue to bring an end to the
            threat, despite their confidence in their position.”

EFI sued Coyle at the U.S. District Court for the Northern District of California for declaratory judgment that EFI did not breach a non-disclosure agreement or misappropriate trade secrets, after repeated threats from Coyle.  However, Judge Martin Jenkins dismissed EFI's case because EFI lacked well-founded reasons for bringing a preemptive suit.  In particular, “EFI was confident in its legal position, (and therefore) had no uncertainty of the type contemplated” by the Declaratory Judgment Act.

The Federal Circuit reversed the dismissal of the declaratory judgment action because “the district court misinterpreted the term ‘uncertainty’ in the context of the Declaratory Judgment Act.”  The Federal Circuit noted that this condition is met when “[t]here is the uncertainty whether one will have to incur the expense and inconvenience of litigation, and how it will affect the threatened party’s customers, suppliers, and shareholders.”  This, coupled with numerous threats from Coyle, entitled EFI “to bring the matter to a head and have it resolved in court.”

The advantage of filing a declaratory judgment action early is important to litigation strategy, and a patentee should be careful about making threats based on an un-issued patent.  In this case, EFI chose its own court for the litigation by filing a declaratory judgment action less than one month before Coyle’s U.S. patent issued.

Fuji Photo Film Co., Inc. v. Jazz Photo Corp. et al.
Decided January 14, 2005
Judge Rader with Judges Clevenger and Linn

*          “The patentee’s authorization of an international first sale does not affect            exhaustion of that patentee’s rights in the United States.”

Fuji sued Jazz at the ITC and then at the U.S. District Court for the District of  New Jersey, for allegedly infringing patent claims to disposable cameras, based on Jazz’s refurbishment of used disposable cameras overseas and re-importation with new film.  Jazz asserted an affirmative defense that it merely repaired the cameras, but Judge Faith Hochberg entered final judgment of direct and induced infringement against Jazz.  The court found that a portion of the cameras infringed because those cameras had been first sold overseas.  Both sides appealed various issues to the Federal Circuit.

The Federal Circuit affirmed because “only (product) sold within the U.S. or under a U.S. patent qualify for the repair defense under the exhaustion doctrine.”  Much of this decision concerned whether Jazz met its burden to show repair, rather than unallowable refurbishment in 8 Chinese factories that processed the used cameras.  Jazz provided videotape evidence of repair from one factory, had visited three, and successfully convinced the court that direct evidence from the remaining 5 factories was not necessary.

A theme in this case was the acceptability of “circumstantial evidence” to prove facts.  The Federal Circuit commented that “it is hornbook law that direct evidence of a fact is not necessary.  Circumstantial evidence is not only sufficient, but may also be more certain, satisfying and persuasive then direct evidence.”

Trintec Industries, Inc. v. Pedre Promotional Products, Inc.

Decided January 27, 2005

Judge Friedman with Judges Rader and Bryson

*          Personal jurisdiction for patent litigation may be obtained via internet sales          wherein the location of the internet buyer is the site of the injury.

            Trintec sued Pedre for alleged infringement of claims to methods for producing custom instrument panel faces, at the U.S. District Court for the District of Columbia.  Pedre, located in N.Y. City had advertised and sold product over the internet and through distributors.  Judge Royce Lamberth, however, dismissed the suit for lack of personal jurisdiction.  Trintec appealed to the Federal Circuit.

            The Federal Circuit vacated and remanded because the district court's decision did not provide an adequate basis for the decision yet had admitted the existence of some evidence for personal jurisdiction over Pedre.  Pedre had used distributors who visited D.C. twice a year for sales meetings, and had some direct internet sales into D.C.

            A plaintiff can establish personal jurisdiction against an out of state company via evidence of business transactions through the internet.  This decision mentioned the greater evidentiary persuasiveness of an interactive web site compared to mere passive advertising.  However, evidence is needed to show that individuals in the jurisdiction actually used the website.

Commissariat A'Lenergie Atomique v. Chi Mei Optoelectronics Corporation et al.

Decided January 27, 2005

Judge Dyk with Judges Rader and Friedman

*          A district court should allow a patent plaintiff jurisdictional discovery if needed, "when factual allegations suggest …contacts …with reasonable particularity."

            French company CAA sued Chinese company CMO in the U.S. District Court for the District of Delaware for allegedly infringing claims to liquid crystal displays.  To establish personal jurisdiction over CMO based on a "stream of commerce theory," CAA showed evidence that CMO was a major seller of LCDs in the US and that many of the LCDs sales likely are in Delaware.  However, Judge Kent Jordan dismissed the action for lack of jurisdiction, citing the absence of specific evidence.  The court refused to grant discovery for the jurisdiction issue and CAA appealed to the Federal Circuit.

            The Federal Circuit vacated and remanded for jurisdiction discovery because CAA had preserved its right to discovery for jurisdiction "by initially requesting discovery in their opposition to the motion to dismiss."  The Federal Circuit also explained that "Federal Circuit law governs determination of personal jurisdiction" because such determination is "intimately involved in the substance of enforcement of the patent right."

 

            Jurisdictional issues can consume a significant portion of patent litigation and the Federal Circuit favors jurisdictional discovery.

Bruno Independent Living Aids, Inc. v. Acorn Mobility Services Ltd. and Acorn Stairlifts, Inc.
Decided January 11, 2005
Judge Lourie with Judges Gajarsa and Linn

*          "[I]n the absence of a credible explanation, intent to deceive is generally inferred from    the facts and circumstances."

            Bruno sued a competitor for alleged infringement of Bruno's stairlift patent at the U.S. District Court for the Western District of Wisconsin.  During discovery, Bruno admitted that the patent claims were invalid and filed a reissue application at the PTO.  Judge Barbara Crabb then granted Acorn summary judgment of invalidity and awarded attorney fees to Acorn.  Bruno appealed to the Court of Appeals for Federal Circuit ("Federal Circuit") and Acorn cross appealed.

            The Federal Circuit affirmed the award of attorney's fees because the record supported "the district court's finding that Bruno possessed actual knowledge of the (prior art)--and that it knew or should have known of its materiality."  An influential fact was that Bruno admitted the "substantial equivalence" of its technology to the FDA during patent prosecution but never informed the PTO of that anticipating prior art.  The Federal Circuit pointed out that "an applicant who knew of the art or information cannot intentionally avoid learning of its materiality."

            Determination of intent often is dispositive in proving inequitable conduct.  The Federal Circuit pointed out in this regard that when materiality of the deception is high, and the patentee "has not proffered a credible explanation for the nondisclosure, …an inference of deceptive intent may fairly be drawn in the absence of such an explanation."

Business Objects, S.A., v. Microstrategy

Decided January 6, 2005

Judge Rader with Judges Schall and Prost

*          One can amend a claim by adding an inherent feature of an invention without narrowing the claim or estopping later application of the doctrine of equivalents.

            Business sued Microstrategy at the U.S. District Court for the Northern District of California for allegedly infringing claims to database search methods.  Judge Charles Breyer granted Microstrategy summary judgment of no literal infringement and no infringement under the doctrine of equivalents.  Business appealed to the Federal Circuit.

            The Federal Circuit affirmed most findings, but vacated the holding of no infringement under the doctrine of equivalents because the lower court erroneously had deemed a claim amendment (addition of "predetermined") during prosecution as narrowing the claim scope.  The Federal Circuit pointed out that "[b]ecause the 'predetermined' limitation was implicitly contained in the original term, the amendment did not narrow the scope of " the amended claim.  Accordingly, that amendment did not estop subsequent use of the doctrine of equivalents. 

            When amending a claim at the patent office, one should consider merely making explicit an inherent limitation in the original, unamended claim to avoid file history estoppel. 

Stewart Lamle, v. Mattel, Inc.
Decided January 7, 2005

Judge Dyk with Judges Newman and Clevenger, Newman dissenting

*          Under state law, a typed name on an email may represent a signature for contract purposes.

            Lamle invented a board game "Farook," that he patented and negotiated with Mattel for licensing outside of the United States.  During those license negotiations, Mattel "promised that it would sign a formal, written contract," as affirmed in an email from a Mattel employee.  Following a subsequent marketing study, however, Mattel decided not to pursue a license and Lamle sued Mattel at the U.S. District Court for the Central District of California.  After a first litigation and appeal, Judge Terry Hatter on remand held summary judgment that no contract had existed been Lamle and Mattel.  Lamle appealed again.

            A majority Federal Circuit panel determined that the "only question" in this case was whether a Mattel employee's "name on an email is a valid writing and signature to satisfy the Statute of Frauds."  Because a "record or signature may not be denied legal effect or enforceability solely because it is in electronic form," the email created a genuine issue of material fact that precluded summary judgment.  Judge Newman dissented from this view with an opinion that the parties had agreed "that any obligation would be contained in a formal written contract."