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Supreme Court Affirms Clear and Convincing Standard for Proving Invalidity in Microsoft v. i4i Decision

Posted on June 9, 2011 | 1 comment

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

Today, the Supreme Court confirmed that parties challenging the validity of a patent have the burden to prove invalidity by clear and convincing evidence. Justice Sotomayor delivered the unanimous opinion for the Court in its decision in Microsoft Corp. v. i4i Limited Partnership (No. 10-290), which affirmed the Federal Circuit. Justice Breyer filed a concurring opinion, and Justice Thomas filed an opinion concurring in judgment. Chief Justice Roberts took no part in the decision.

Circumstances Below

By statute (35 U.S.C. § 282), patents are presumed valid, based, in part, on the deference shown to the Patent Office in examining patents. In the underlying case, Microsoft challenged the validity of the patent using a reference never considered by the Patent Office when examining the patent. Microsoft argued that the presumption of validity did not mean that it needed to prove invalidity by clear and convincing evidence, especially in these circumstances. Both the district court and the Federal Circuit disagreed, finding under long-established precedent that those challenging the validity of a patent must prove invalidity by clear and convincing evidence in all circumstances.

Microsoft’s Arguments For a Preponderance of the Evidence standard

At the Supreme Court, Microsoft argued that the Court should adopt one of two standards, either (1) accused infringers need only prove invalidity by a preponderance of evidence or (2) a hybrid approach where accused infringers need to prove invalidity by clear and convincing evidence for those references considered by the Patent Office but only by a preponderance of the evidence for anything else. The Supreme Court strongly rejected both approaches and affirmed the clear and convincing standard in all circumstances.

The Supreme Court’s Analysis

Tracing the history of patent law in the United States, the Court noted that it had previously considered the standard of proof in its decision in Radio Corp. of America v. Radio Engineering Laboratories, Inc., 293 U.S. 1 (1934). In that decision, Justice Cardozo stated that “there is a presumption of validity, a presumption not to be overthrown except by clear and cogent evidence.” This common-law understanding was well-rooted by the time that Congress enacted § 282, which declared that patents are presumed valid.

The Court also found persuasive how Congress reacted to the courts on this point. In 1984, the Federal Circuit recognized the clear and convincing standard of proof in its decision in American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350 (Fed. Cir. 1984), and, in the nearly thirty years since that decision, consistently reaffirmed this standard of proof. Despite amending the patent act numerous times since the American Hoist decision, Congress never expressed disapproval with the Federal Circuit’s decisions, which indicated to the Court that Congress agreed with this standard.

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Supreme Court Clarifies Rights Under Bayh-Dole Act in Stanford v. Roche Decision

Posted on June 6, 2011 | Comments Off on Supreme Court Clarifies Rights Under Bayh-Dole Act in Stanford v. Roche Decision

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

Today, the Supreme Court announced its decision in Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc. (No. 09-1159) involving the rights of parties to inventions under the Bayh-Dole Act (also known as the University and Small Business Patent Procedures Act of 1980, 35 U.S.C. § 200 et seq.). Chief Justice Roberts wrote the decision for a 7-2 court, in which the Court confirmed that invention rights are held by individuals and held that the Bayh-Dole Act does not by itself automatically void ab initio an inventor’s rights in government-funded inventions. Justice Sotomayor concurred and Justices Breyer and Ginsburg dissented.

The Court first traced the history of the Bayh-Dole Act. “The Bayh-Dole Act applies to subject inventions ‘conceived or first actually reduced to practice in the performance of work’ ‘funded in whole or in part by the Federal Government.’”  The Court stated that “The Bayh-Dole Act does not confer title to federally funded inventions on contractors or authorize contractors to unilaterally take title to those inventions; it simply assures contractors that they may keep title to whatever it is they already have.” Contractors in this context means the university or agency receiving federal funding, not the employees of such entities. “Only when an invention belongs to the contractor does the Bayh-Dole Act come into play. The Act’s disposition of rights—like much of the rest of the Bayh-Dole Act—serves to clarify the order of priority of rights between the Federal Government and a federal contractor in a federally funded invention that already belongs to the contractor. Nothing more.” The Court clarified that a university would not obtain title to an employee’s invention simply because some amount of federal funding was used during conception or reduction to practice. Rather, the contractor must first obtain the rights to the invention from its employee, which should be standard practice.

The Court affirmed the Federal Circuits decision finding that Stanford University lacked standing to sue Roche for patent infringement because the researcher in question (Dr. Mark Holodniy) had assigned his rights to Cetus, which Roche later acquired, and the Bayh-Dole Act did not give Stanford University the right to trump that assignment. By only obtaining an agreement from Dr. Holodniy to assign his rights, rather than an actual assignment, Stanford could not use the Bayh-Dole Act to trump that assignment.

One of the key insights to glean from this decision may involve an issue that the Court expressly declined to consider. As stated above, when Dr. Holodniy began working with Stanford University, he agreed to assign his rights in any inventions made using Stanford’s funding to the University. He did not actually assign the rights to the University, however. Instead, he assigned them later to Cetus. The Federal Circuit, based on its precedent in FilmTec Corp. v. Allied-Signal, Inc., 939 F.2d 1568 (Fed. Cir. 1991), determined that the language in his agreement with Stanford (“agree to assign,” rather than “do hereby assign”) was only a promise to assign rights in the future and did not act as an actual assignment of these rights. This particular issue was not appealed by Stanford, so it was not addressed in the briefs or explicitly considered by the Court. In his dissent, however, Justice Breyer strongly indicated that this rule is questionable, at best, and suggested that the Court remand for the Federal Circuit to consider this rule more carefully. Justice Breyer’s dissent suggests that the Court will be taking this question up in the future. For now, though, practitioners should carefully consider employee or contractor assignment provisions to make sure that they are drafted so as to assign the rights immediately, and not act simply as a promise to assign them later.

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Supreme Court Issues Global-Tech Decision Setting Inducement to Infringe Patent Standard

Posted on June 1, 2011 | Comments Off on Supreme Court Issues Global-Tech Decision Setting Inducement to Infringe Patent Standard

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

Yesterday, the Supreme Court issued its decision in Global-Tech Appliances, Inc. v. SEB S.A. (No. 10-6), which affirmed the Federal Circuit’s decision that Pentalpha Enterprises, Ltd. induced infringement in violation of 35 U.S.C. § 271(b) under a willful blindness theory. Justice Alito wrote the decision for the 8-1 Court, and Justice Kennedy dissented.

The Global-Tech decision is one of a number of recent Supreme Court decisions in the patent arena. In this case, the Court considered what level of knowledge a party must have to actively induce infringement of a patent under § 271(b). The statute states “Whoever actively induces infringement of a patent shall be liable as an infringer.” The Court found that inducement is an active enterprise that requires the taking of affirmative steps to bring about a desired result.

The Court recognized that there are two plausible readings of this statute: (1) one can be liable for merely leading another to perform acts that happen to lead to infringement or (2) one can be liable only for leading another to perform acts that the inducer knows is infringement. After tracing the history of contributory infringement, the Court rejected the first approach and concluded that § 271(b) requires knowledge that the induced acts constitute patent infringement. This knowledge requirement can be satisfied not only with direct knowledge or belief that the acts constitute infringement, but also with willful blindness to this fact.

The Court recognized that this willful blindness standard could easily be confused with recklessly or indifference, so it took some care to distinguish these concepts. Willful blindness has two basic requirements: “(1) the defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of this fact.” In other words, “a willfully blind defendant is one who takes deliberate actions to avoid confirming a high probability of wrongdoing and who can almost be said to have actually known the critical facts.” In contrast, recklessness only involves knowledge of a substantial and unjustified risk of wrongdoing without the deliberate actions. Negligence is even further removed, as it involves a defendant that should have been aware of a risk but who was not aware.

The Court rejected the Federal Circuit’s formulation that permitted a finding of knowledge when there was simply a known risk of induced infringement without active efforts by the inducer to avoid acquiring actual knowledge.

What does this case mean?

Going forward, this case confirms that liability for indirect infringement requires some intent or knowledge of infringement, as opposed to just the facts that might happen to give rise to infringement. It is not enough for liability that an inducer expects or intends that another act in a certain manner unless the inducer knows that those actions will likely result in infringement of a patent. Normally, this will require some actual knowledge of the relevant patents. The exception was addressed in this case, though.  An inducer cannot willfully blind itself from finding out whether relevant patents exist. Going forward, there will undoubtedly be additional district court and Federal Circuit decisions that flesh out what is and is not willful blindness and what is and is not deliberate actions.

Parties that produce products or direct others to act in ways that arguably intrude on another’s patent rights can take some proactive steps to protect themselves from liability for indirect infringement. Because induce to infringe requires knowledge that the acts constitute infringement, obtaining a competent opinion letter from a qualified patent attorney should preclude liability. As this case makes clear, though, the patent attorney must be given relevant knowledge about the field of the product or service in order to conduct a reasonable search. The patent opinion must not be simply a false effort to create plausible deniability.

facts of the case and its disposition

Despite determining that the Federal Circuit applied the wrong standard, the Supreme Court affirmed its decision, finding that under the facts, Pentalpha willfully blinded itself to the infringing acts.

SEB invented and patented a “cool-touch” deep fryer whose outside surfaces remained cool during use. Sunbeam Products, Inc. asked Pentalpha (a wholly-owned subsidiary of Global-Tech) to provide it with deep fryers. Pentalpha purchased an SEB deep fryer in Hong Kong that was not marked with the US patent numbers, which is not unusual for products sold overseas. Except for the cosmetic appearance, Pentalpha copied SEB’s design.

Pentalpha retained a US patent lawyer to conduct a patent search, but did not inform the lawyer that Pentalpha had copied SEB’s design. The patent lawyer did not locate SEB’s patents, so he issued a non-infringement opinion letter. Pentalpha then sold its deep fryer to Sunbeam. After SEB sued Sunbeam, Sunbeam notified Pentalpha of the lawsuit. Despite having notice of the lawsuit, Pentalpha continued selling its deep fryer to other customers.

SEB sued Pentalpha after settling with Sunbeam under direct and indirect infringement theories. After a 5-day trial, the jury found that Pentalpha willfully infringed SEB’s patents. Pentalpha appealed, arguing that it had no actual knowledge of infringement. The Federal Circuit rejected Pentalpha’s argument and affirmed the jury’s finding, reasoning that Pentalpha deliberately disregarded a known risk.

As discussed above, the Supreme Court affirmed, finding that there was no legitimate reason for Pentalpha to not tell its patent attorney that it copied SEB’s design. The only reason the Court could find for Pentalpha doing this was to manufacture a claim of plausible deniability, which was tantamount to willful blindness. The Court saw no need to remand on these facts, although the dissent felt that was the more appropriate action.

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Federal Circuit Grants En Banc Rehearing in McKesson to Decide Joint Infringement Standard

Posted on May 27, 2011 | Comments Off on Federal Circuit Grants En Banc Rehearing in McKesson to Decide Joint Infringement Standard

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

Yesterday, in McKesson Technologies Inc. v. Epic Systems Corp. (No. 2010-1291), the Federal Circuit granted McKesson’s petition for a rehearing en banc regarding the standards for joint infringement of a patent. This order comes just a little over a month after the Court granted a similar petition for a rehearing en banc in Akamai Technologies, Inc. v. Limelight Networks, Inc. (No. 2009-1372), which we discussed in an earlier post.

The Federal Circuit has apparently taken a special interest in the appropriate standards for imposing liability for joint infringement of a patent. Yesterday’s order expands the scope of the previous order and seeks briefing on two new issues:

  1. “If separate entities each perform separate steps of a method claim, under what circumstances, if any, would either entity or any third party be liable for inducing infringement or for contributory infringement? See Fromson v. Advance Offset Plate, Inc., 720 F.2d 1565 (Fed. Cir. 1983).”
  2. “Does the nature of the relationship between the relevant actors—e.g., service provider/user; doctor/patient—affect the question of direct or indirect infringement liability?”

The first question is almost identical to that posed in Akamai, but it phrases the question in terms of inducing infringement or contributory infringement, whereas the one posed in Akamai was directed to direct infringement. By doing so, the Federal Circuit will be addressing all potential forms of joint infringement of method claims. The second question expands the scope to address the question of the relationship between the parties, which was central to the Akamai panel’s determination that joint infringement requires some form of an agency relationship.

The underlying case

McKesson owns a patent directed to a method of communication between healthcare providers and patients that involves personalized web pages. Epic is a software company that developed a web-based software package that it licenses to healthcare providers to allow patients to view their medical records, scheduling information, and treatment plans.

The parties agreed that no single party performed every step of the allegedly infringed method claim, rather, the patients performed some steps and the medical provider performed others. Nonetheless, McKesson argued that Epic was liable under an induced infringement theory, which requires a direct infringer. McKesson argued that Epic’s customers (the doctors/healthcare providers) controlled or directed their patients to perform the missing steps in the claim, so that Epic directly infringed under a joint infringement theory.

Recognizing that there was no agency relationship between doctors and their patients, McKesson argued that the special nature of the doctor/patient relationship should also be sufficient to support joint infringement. The Court disagreed, finding no agency relationship or other contractual relationship under the standards discussed in Akamai. The Court then affirmed the district court’s grant of summary judgment for Epic.

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Federal Circuit Dramatically Overhauls Inequitable Conduct Defense in En Banc Therasense Decision

Posted on May 26, 2011 | 1 comment

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

The Federal Circuit yesterday issued its en banc decision in Therasense, Inc. v. Becton, Dickinson & Co. that significantly changes the law of inequitable conduct. The 6-1-4 decision (written by Judge Rader, with a concurrence in part by Judge O’Malley and a dissent by Judge Bryson) creates bright-line rules for establishing the defense of inequitable that appear, as a practical matter, to almost eliminate this defense except in the most egregious (and likely difficult to prove) cases. In addition, under the Court’s decision, proving invalidity may be a precursor to a finding of inequitable conduct, thereby rendering this defense somewhat redundant. Below is a summary of the key points of the decision, along with a discussion of the consequences going forward.

The Defense of Inequitable Conduct

An accused infringer raising the defense of inequitable conduct must prove by clear and convincing evidence that the patentee misrepresented or omitted material information with the specific intent to deceive the PTO.

The Intent Element

To prevail on this defense, the accused infringer must prove that the patentee acted with the specific intent to deceive the PTO. Gross negligence or negligence are not sufficient. And, in the case of non-disclosure, the accused infringer must prove by clear and convincing evidence that the patentee made a deliberate decision to withhold a known material reference—that is, he knew of the reference, knew it was material, and deliberately decided to withhold it.

Intent and materiality are separate requirements. There is no “sliding scale,” and courts cannot infer intent solely from materiality. Therefore, proving that a patentee knew of a reference, should have known of its materiality, and decided not to submit it to the PTO does not prove specific intent to deceive.

Intent can be inferred from indirect and circumstantial evidence, but the specific intent to deceive must be the “single most reasonable inference able to be drawn from the evidence.”

The patentee need not offer any good faith explanation for its conduct until the accused infringer proves a threshold level of intent to deceive by clear and convincing evidence.

The Materiality Element

The Court rejected the standard of materiality defined in PTO Rule 1.56. Instead, it adopted a “but-for” materiality test.

“But-for” materiality must be shown by clear and convincing evidence, so an accused infringer must show that the PTO would not have allowed a claim if it had been aware of the undisclosed art. However, in making this determination, the court is to employ the PTO’s standard of patentability, not the judicial standard. Therefore, the court should apply the preponderance of the evidence standard used by the PTO and give claims their broadest reasonable construction. This creates a potential situation where a claim might not be invalid under an anticipation/obviousness defense at trial, but still could have been rejected by the PTO during prosecution.

“But-for” materiality is not required for affirmative acts of egregious misconduct, such as submitting false affidavits. However, the nondisclosure of prior art and the failure to mention prior art in an affidavit are not egregious misconduct. This type of misconduct still requires “but-for” materiality.

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Update: What You Need to Know About PDF/A ECF Filings in Federal Court

Posted on May 9, 2011 | 1 comment

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

As discussed in an earlier post on this blog, the federal courts will be requiring all electronic filers to move to the PDF/A standard for ECF filings. The Western District of Pennsylvania announced that it is beginning its transition to this format now, and all filings starting on January 1, 2012 must be in the PDF/A standard (link to Court’s PDF announcement).

The PDF/A format should be a longer lasting file format that will allow attorneys and the public to access these records well into the future. The PDF/A standard requires that the files be self-contained and not refer to use any information outside of the file itself. So, all the fonts and other information will be embedded inside the file. There are two types of PDF/A formats—the PDF/A-1a and PDF/A-1b formats. The “a” format requires strict tagging of information, while the “b” format is less stringent. As a practical matter, one will likely need the original source file (for example, the original Microsoft Word file) to create a PDF/A-1a file. This will make it more difficult to convert standard PDF files into PDF/A-1a files. On the other hand, because the PDF/A-1b format is more forgiving, and it should be possible to convert standard PDF files into this format. It appears that the federal courts will accept either PDF/A format.

There are a variety of websites offering advice and tutorials to help ease the transition to the PDF/A format. The Adobe Acrobat for Legal Professionals website recently posted a tutorial on using the save as feature in Acrobat 9 and X to create or convert files into the PDF/A format. It also hosted a webcast on the topic that can be viewed here.

For additional information:

  • Federal Court FAQ regarding PDF/A change
  • past Adobe Acrobat for Legal Professionals blog posts on this topic 1, 2, 3, 4
  • ISO 19005-1:2005 FAQ describing the standard (downloads FAQ)
  • PDF/A compliance organization FAQ

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Federal Circuit to Revisit Joint Infringement Standard En Banc in Akamai Case

Posted on April 22, 2011 | 3 comments

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

Yesterday, the Federal Circuit issued an order in the Akamai Technologies, Inc. v. Limelight Networks, Inc. (Case. No. 2009-1372) matter granting Akamai’s petition for the Court to rehear the appeal en banc. The Federal Circuit will be revisiting the concept of joint infringement of method patents to determine who can be liable for infringement when more than one party performs the required steps of a method claim.

 Issues to Be Considered by the En Banc Court

The Federal Circuit requested that the parties address one issue in this en banc consideration: “If separate entities each perform separate steps of a method claim, under what circumstances would that claim be directly infringed and to what extent would each of the parties be liable?”

Method claims, unlike apparatus or device claims, involve the performance of certain steps, often in a certain sequence. Because these steps can occur at different times, more than one actor or entity potentially can perform the steps. Direct infringement requires that a single actor or entity perform all of the steps, so it would appear an easy way to avoid infringement is to simply have more than one person or entity perform the steps. Joint infringement is a doctrine that addresses the unfairness of having a single entity simply contract out steps of the method to avoid liability.

Previous decisions of the Federal Circuit (such as Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318) held that simply providing instructions to another was not enough to create liability. There has to be direction and control sufficient to impose vicarious liability on the party giving the instructions.

In the original Akamai panel decision, the Federal Circuit confirmed that joint infringement only exists when “there is an agency relationship between the parties who perform the method steps or when one party is contractually obligated to the other to perform the steps.” 629 F.3d 1311, 1320.

The en banc decision will shed light on the correct standard for joint infringement of a method claim, which will be extremely important going forward for both patent drafters and competitors in the marketplace. The Federal Circuit will presumably answer to what extent a person can be held liable for infringement in a variety of situations.

  •  When can giving another instructions that cause infringement create liability?
  • What kind of contractual or legal relationship between the parties must exist for joint infringement to be possible?
  • Does the “mastermind” have to have knowledge of the patent or infringement?
  • Does it matter if either party to the joint infringement receives some additional benefit for performing a step?

Regardless of the outcome of this case, as a matter of prudent practice, patent practitioners should be careful in drafting method claims to avoid the multi-actor problem that joint infringement is meant to address. In most circumstances, a patent can be carefully drafted so that only one actor is needed to perform all of the steps. By doing so, the prudent patent drafter can altogether avoid the problem of joint infringement.

 Case History

The underlying case involved a method Akamai patented for providing a scalable solution to hosting web content on multiple servers to increase the ability of a web site to handle large traffic. The system allowed a content provider to outsource the storage and delivery of discrete portions of its website content. To utilize this method, a content provider must tag certain portions of its website.

Limelight is a competitor of Akamai’s and offered similar capabilities to its customers. While it did not perform all of the steps found in Akamai’s patent, it contractually required its customers to perform several of these steps. Thus, the issue was whether Limelight and its customers together infringed Akamai’s patent.

Initially, the jury found that there was joint infringement and returned a $41.5 million verdict in favor of Akamai. The District Court granted Limelight’s JMOL of noninfringement and threw out the jury’s verdict in light of the Muniauction case. The Federal Circuit originally upheld the District Court in a unanimous decision, finding that there was no proof that Limelight’s customers were agent of Limelight and contractually required to perform certain steps. While Limelight provided instructions on how to use the system and contractually required its customers to act in certain ways if they wanted to use the system, the customers were acting on their own behalf and were not obligated to do anything if they did not want to use Limelight’s services. The Court found this to be “arms-length cooperation” and not an agency relationship.

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Oral Arguments in Microsoft v. i4i Limited on the Burden of Proof for Invalidity

Posted on April 18, 2011 | 1 comment

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

The United States Supreme Court heard oral arguments today in Microsoft Corp. v. i4i Limited Partnership, Case No. 10-290, a case that calls into question what the proper burden of proof is to invalidate a patent claim. Microsoft challenges the long-standing standard of clear and convincing evidence and argued today that the proper standard of proof is merely by a preponderance of the evidence. Both i4i and the government argued that clear and convincing status quo should be maintained.

As is their custom, the Justices peppered both sides with questions about what the burden should be, and the Justices did not seem to clearly favor either side. While initially arguing in its briefs that the Court should adopt a hybrid approach—clear and convincing evidence for anything considered by the Patent Office during prosecution and preponderance for everything else—that position was largely ignored today during oral arguments. Instead the parties and the Court focused on a uniform standard and what it should be.

Justice Breyer noted the tension that exists between not giving legitimate inventions the protections they deserve and giving protection to inventions that do not deserve it. Counsel for i4i particularly stressed the need for protecting inventors and their inventions. In particular, he reminded the Justices that an inventor must completely describe his or her invention to the public in order to obtain a patent, which prevents the inventor from protecting his or her invention in other ways. The Justices also focused on the exact language of the statute (35 U.S.C. § 282) and the Court’s prior cases addressing the burden of proof. The parties also discussed how to instruct a jury about prior art that the Patent Office did consider.

  • A copy of the transcript can be downloaded here.
  • The Supreme Court docket for this case is located here.
  • The various briefs can be found here.

A decision is expected later this summer. Note that Chief Justice Roberts did not participate in the oral argument.

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Patent Reissue as a Hedge Against Invalidity?

Posted on April 18, 2011 | Comments Off on Patent Reissue as a Hedge Against Invalidity?

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

A recent decision from the Federal Circuit provides a boon for patent owners who are interested in filing suit against infringers but are concerned that their claims may be too broad to survive an invalidity attack. The decision in In re Takana (Case No. 2010-1262, April 15, 2011), allows a patent owner to file a reissue application before the US Patent and Trademark Office and add narrower claims to patent solely as a hedge against a potential invalidity challenge in future litigation.

A reissue application requires the patent owner to offer to surrender his or her patent and reopen the prosecution and amend the claims if the proposed changes were the result of an error and made without deceptive intent:

Whenever any patent is, through error without any deceptive intention, deemed wholly or partly inoperative or invalid, by reason of a defective specification or drawing, or by reason of the patentee claiming more or less than he had a right to claim in the patent.

The Patent Office determined that the patent owner could not simply add a dependent claim to his patent through the reissue process. The Federal Circuit disagreed and concluded that the patent owner’s desire to add a narrower dependent claim to his patent was an error–claiming less than he could have claimed during prosecution–and was not done with a deceptive intent. It found nothing improper with the reason for adding the narrower claim was a concern that a potential infringer might be able to invalidate the broad, original claims.

The decision creates a real opportunity for patent owners that want to enforce their patents through litigation, but are concerned that the claims were too broad as they were drafted to survive an invalidity attack. As with any such opportunity, there are drawbacks, however. A patent owner must offer to surrender the patent and reopen the prosecution of the patent. There is always the possibility that an examiner will discover a new reason the calls into question the validity of the patent. There are no guarantees that the surrendered patent will be allowed again. In addition, the patent statute provides for intervening rights that protect the public when a patent owner changes its patent after it has issued (either through reissue or reexamination). These intervening rights may grant absolute and equitable protections for products that were on sale before the patent owner added the new claims. Thus, a patent owner may not be able to enforce the patent against currently-selling products. Intervening rights generally provide fewer protections to future products, though.

This decision presents new opportunities for patent owners and an ability to correct older patents that contain novel ideas that may have been inartfully claimed.

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Time for a Checkup?—IP Audits

Posted on January 27, 2011 | Comments Off on Time for a Checkup?—IP Audits

by: Robert Wagner, an intellectual property lawyer at Picadio Sneath Miller & Norton, P.C.

With the dawn of the new year, it is time to consider getting your annual checkups. IP assets often form the core assets of a company—enabling the company to provide its goods and services and to prevent others from encroaching on its valuable property. Regardless of the size of your company, maintaining the health of these assets should be a key priority, so a company’s IP portfolio should undergo a routine review to make sure the assets are in top shape and no issues have arisen.

Among the many things that can be done in an IP checkup (or audit) is to determine which assets are currently being used. Are their underutilized assets that should be utilized? Or, can these assets be sold or licensed to someone else? An IP audit can verify that you have the proper title or license to the IP assets you do use and that all maintenance fees have been paid to maintain the enforceability of these assets. An IP audit can not only assess the assets you have, it can serve as preventative medicine to help ward off lawsuits. With the recent plague of false patent marking cases that have been filed throughout the country, verifying that the goods you provide are properly marked and any expired patent numbers have been removed can help avoid needless and expensive litigation.

An IP audit provides the mechanism to obtain a current snapshot of the status of a company’s IP assets. Like any other kind of checkup, an IP audit can range from a broad, general review and inventory of the assets to a detailed analysis of some or all of the assets. Often, the audit begins with the broad review to identify potential problems and then prioritizes which problems to focus on.

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