Tag Archives: Federal Circuit

Parties’ Settlement Can’t Stop Inter Partes Reexamination

Posted on April 15, 2015 by | Comments Off on Parties’ Settlement Can’t Stop Inter Partes Reexamination

by: Robert Wagner, intellectual property attorney at the Pittsburgh law firm of Picadio Sneath Miller & Norton, P.C. ()

USPTOThe Federal Circuit issued an interesting decision in Automated Merchandising Systems, Inc. v. Lee, (No. 2014-1728), regarding the USPTO’s decision not to stop an inter partes reexamination proceeding after the parties settled a parallel patent infringement action in federal court. The Court concluded that the USPTO’s decision to continue was not a final action by the agency, so the Court did not have the authority to overrule the USPTO.

Background

The case involved a dispute between Automated Merchandising Systems, Inc. (AMS) and Crane Co. AMS sued Crane for allegedly infringing four of AMS’s patents. During the court proceedings in the Northern District of West Virginia, Crane instituted an inter partes reexamination of the patent at the USPTO, which the USPTO granted. As often occurs, AMS and Crane settled the dispute and requested that the district court enter and order dismissing the case. In that order, which the court entered, the parties stipulated that the four patents were valid, the case was being dismissed with prejudice, and the judgment was final.

After the court entered the order, AMS asked the USPTO to stop the reexamination proceedings under 35 U.S.C. § 317(b), arguing that there was a final judicial decision that the patents were valid. The USPTO disagreed, finding that there had been no actual decision on the merits and that it had an obligation to continue reviewing the patents once it had determined that there was a substantial question of patentability.

AMS filed suit against USPTO in district court in the Eastern District of Virginia, seeking to have the court overturn the USPTO’s decision under the Administrative Procedure Act (APA), the Declaratory Judgment Act, and the court’s inherent mandamus power. The court entered summary judgment against AMS because it also found that there had been no final decision on the merits. AMS then appealed to the Federal Circuit.

Holding

The APA places limits on what courts can review:

[a]gency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review. A preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final agency action.

5 U.S.C. § 704.

So, the Federal Circuit first considered whether it the USPTO’s decision was a final agency action, sufficient to invoke the APA. The Federal Circuit concluded that it was not. Final agency actions are those that mark the end of the agency’s decision-making process and are such that rights, obligations, or legal consequences flow from the decision.

Here, neither of those elements were found to exist. The USPTO’s decision did not mark the end of its involvement. To the contrary, the USPTO determined that the reexamination should continue. In addition, the USPTO had not made any final determinations on the merits of the reexamination, so no legal consequences flowed from its decision, other than to continue the reexamination. The Court found that the continuation of legal process was not the type of consequence required under the APA, especially because additional appellate remedies existed if the USPTO reached a decision unfavorable to AMS.

Having determined that the APA did not give grounds for the Court to reverse the USPTO’s decision, the Court also concluded, for basically the same reasons, that the Declaratory Judgment Act and the court’s inherent mandamus powers did not provide relief for AMS. The Federal Circuit, therefore, affirmed the district court’s grant of summary judgment against AMS.

Conclusion

This decision highlights a concern that patent owners need to be aware of that once a reexamination has been filed, it can be very difficult for a patent owner to unilaterally end the process. Unlike the court system, the USPTO has a separate obligation to verify the appropriateness of patents it issues when there has been a legitimate challenge to the validity of the patent. Just because the parties wanted to end the dispute does not mean that the USPTO has the same interest. Litigants will need to keep this in mind when determining whether and how to settle a patent infringement lawsuit that also has an ongoing inter partes reexamination.

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Teva Pharmaceuticals v. Sandoz–Supreme Court Changes Appellate Review of Claim Constructions

Posted on January 21, 2015 by | Comments Off on Teva Pharmaceuticals v. Sandoz–Supreme Court Changes Appellate Review of Claim Constructions

by: Robert Wagner, intellectual property attorney at the Pittsburgh law firm of Picadio Sneath Miller & Norton, P.C. ()

SupremeCourtImage_1Yesterday, the Supreme Court issued another opinion in the patent arena in Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc. (No. 13-854). In this decision, the Court  considered what deference, if any, that appellate courts should have when reviewing a district court’s claim construction. In a 7–2 opinion authored by Justice Breyer (Justices Thomas and Alito dissenting), the Court reaffirmed that appellate courts review claim constructions de novo, but held that underlying factual determinations made by a district court should be reviewed under a clear error standard. Thus, this is somewhat of a mixed bag decision whose practical importance is unclear.

Reasoning of the Court

The Court started off by reaffirming its determination in Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996) that claim construction is a question of law for the courts, even when it may require evidentiary determinations. The Court then noted that Federal Rule of Civil Procedure 52(a) sets the framework for an appellate court’s review of findings of fact made by a district court. Under Rule 52(a)(6), a court of appeals must not set aside a district court’s findings of fact unless they are clearly erroneous. Under the Court’s precedent, this standard applies to all types of factual findings made by a district court, including findings relating to subsidiary and ultimate facts. The Court then found that there was no exception to Rule 52(a) for patent cases, either by statute or based on its case law. Based on this determination, the Court concluded that appellate courts must review factual findings made by a district court during the claim construction process under a clear error standard of review, and not a de novo standard.

Unlike many Supreme Court decisions, the Court then went on and attempted to clarify how appellate courts should review claim constructions from district courts. When a court considers intrinsic evidence to the patent (the patent claims, specification, drawings, and prosecution history) when determining its construction, appellate courts are to review those determinations using a de novo standard of review. However, when a district court considers extrinsic evidence (such as expert testimony), any factual findings related to that extrinsic evidence must be reviewed on a clear error basis. Finally, the ultimate construction is still to be reviewed on a de novo basis, even if it contains issues of fact.

Consequences of the Decision

As with any decision, it is sometimes hard to predict the consequences immediately after the decision issues. But, there are some take-aways from this decision. First, district courts will likely have to do some more work, especially when they are making factual determinations relating to claim construction. District courts will now have to make those findings explicit if they expect the Federal Circuit to give the findings deference.

Second, parties will have to consider whether introducing more extrinsic types of evidence will be beneficial or harmful to their cases. It may be that in certain circumstances a party will feel so confident of its position before a district court that it will want as many factual determinations as possible to support its hoped-for ruling by the district court. On the other hand, if it ultimately loses on construction, those factual findings will make it harder for to argue for reversal. So, parties will need to be careful in thinking about what makes the most sense in their particular circumstance.

Third, it will be interesting to see what the Federal Circuit does. The Supreme Court confirmed that the ultimate decision is still made on a de novo basis. This means that the Federal Circuit may simply accentuate or minimize the factual findings as needed to affirm or reverse based on its own interpretation, which may make little practical difference in the outcomes of cases.

Many claim constructions do not turn on factual findings relating to extrinsic evidence, so this decision is unlikely to radically change how patents are litigated. In the margins, where factual determinations and understandings are truly important, it likely makes sense to give deference to the district court, especially when it had the chance to hear live testimony by experts on disputed issues and to weigh issues of credibility.

For some further initial impressions of the Court’s decision, check on this article on the Patently-O blog, in which Professor Crouch talked with a number of patent law experts for their impressions.

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Federal Circuit Again Splits on Willful Infringement

Posted on January 15, 2015 by | Comments Off on Federal Circuit Again Splits on Willful Infringement

by: Robert Wagner, intellectual property attorney at the Pittsburgh law firm of Picadio Sneath Miller & Norton, P.C. ()

6436135 ImageThe Federal Circuit issued another contentious decision on the subject of willful infringement on Tuesday in Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., (No. 2014-1114), splitting 2-1 and with another judge calling for the Circuit to revisit the law in this area.

The Bard-Gore case has had a long and tortured past, beginning more than 40 years ago. Gore, which makes an ePTFE polymer under the brand name Gore-Tex®, invited Dr. David Goldfarb to its facilities in 1973 to participate in a study of Gore’s product for use as a vascular prosthesis. Gore was trying to find new uses for its product, including in the medical fields. Based on the materials that Gore provided to Dr. Goldfarb, Dr. Goldfarb filed a patent application on the structure of the most effective of the samples he tested back in 1974. Peter Cooper from Gore had previously filed a patent application, and the USPTO conducted an interference proceeding.

In the interference proceeding, the USPTO concluded that Cooper was the first to conceive of the subject matter of the invention, but Dr. Goldfarb was the first to reduce it to practice. Therefore, the USPTO awarded the patent to Dr. Goldfarb. The Federal Circuit affirmed, and the patent ultimately issued in 2002. During the pendency of this dispute, Gore continued to develop and sell ePTFE grafts and medical devices.

In 2003, Dr. Goldfarb and Bard sued Gore for infringement (previously, Dr. Goldfarb licensed the patent to Bard). The jury returned a verdict of willful infringement and awarded over $185 million in damages, which the district court doubled. The district court also awarded attorneys’ fees and costs. The Federal Circuit affirmed in a split panel, but the full Circuit vacated the decision in a rehearing en banc, ordering the district court to reconsider the willful infringement finding de novo. The district court reconsidered the evidence and reinstated its prior judgment. The Federal Circuit, in this decision, affirmed in a 2-1 decision with three separate opinions.

Judge Prost, writing the opinion of the Court, reviewed the evidence de novo and concluded that Gore’s defenses were not reasonable. In particular, the Court rejected the notion that the fact that a prior member of the panel at the Federal Circuit dissented does not mean that Gore’s position was reasonable. The Court did not want to create the precedent that a single dissenting view would preclude a finding of willful infringement as a matter of law.

Judge Hughes wrote a concurring opinion in which he called into question the Federal Circuit’s jurisprudence on willful infringement—in particular, the two-part objective-subjective test and the de novo standard of review. He believes that the full panel should reconsider the law in this area and should apply a deferential standard of review.

Finally, Judge Newman wrote a strong dissent in which she would have reversed the district court’s decision on willfulness. She was troubled by the majority’s failure to discuss what she believed to be relevant evidence supporting Gore’s position. She was also troubled by the fact that the district court refused to enjoin Gore from selling its products but then enhanced the damages.

This decision is another in which the judges on the Federal Circuit are openly questioning the current state of the law on willful infringement. It will be interesting to see if the Federal Circuit rehears one of these cases en banc to settle the disagreements that are brewing internally.

 

 

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Fed Circuit Reverses Willful Infringement Finding

Posted on December 22, 2014 by | Comments Off on Fed Circuit Reverses Willful Infringement Finding

by: Robert Wagner, intellectual property attorney at the Pittsburgh law firm of Picadio Sneath Miller & Norton, P.C. ()

(Cross-posted at DRI Community Page)

The Federal Circuit on Friday issued an opinion that struck a judge’s finding of willful infringement and the corresponding award of triple damages in Stryker Corp. v. Zimmer, Inc. (No. 13-1668). The Court concluded that the defendants’ defenses were not objectively unreasonable, even though they were unsuccessful at trial. Chief Judge Prost wrote the opinion, which was joined by Judges Newman and Hughes.

Background

US06179807-20010130-D00000Stryker and Zimmer are competitors in the medical device industry, and, in particular, the orthopedic pulsed lavage device market. Three patents were in suit (Nos. 6,022,329, 6,179,807, and 7,144,383); all of which involved pulsed lavage devices that deliver pressurized irrigation for certain medical therapies, including orthopedic procedures and cleaning wounds. The patents claimed portable, handheld, battery-powered devices that represented an improvement over the older systems that were larger and more cumbersome to use.The district court granted summary judgment of partial infringement of the ‘807 and ‘383 patents, and the jury found infringement of the ‘329 patent. The jury rejected Zimmer’s invalidity defenses and then awarded $70 million in lost profits, which the district court trebled after finding that Zimmer willfully infringed. The Federal Circuit affirmed both the infringement findings, although it noted that the questions were close, and the non-invalidity findings. It did, however, reverse the district court’s finding that Zimmer willfully infringed.

Willful Infringement Discussion and Analysis

For purposes of this post, I am going to focus on the willful infringement discussion by the Federal Circuit. The Court started off with the standard recitation of the In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007) (en banc) test. First, the patentee must show by clear and convincing evidence that the infringer acted despite an “objectively high likelihood that its actions constituted infringement of a valid patent.” The state of mind of the infringer is not relevant to this inquiry, so the fact that an infringer may not have be aware of or was not considering these defenses while it was infringing is not relevant. If the infringer’s position is “susceptible to a reasonable conclusion of non infringement,” the patentee has failed to prove the objective prong. If the patentee can show that the infringer was objectively reckless, then it must also show by clear and convincing evidence that the “objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer.”

The district court did not analyze the objective nature of the infringement, but, instead, focused on the subjective portion. It concluded that Zimmer acted willfully because: (1) Zimmer “all but instructed its design team to copy Stryker’s products”; (2) Stryker’s patents were pioneering; and (3) the secondary considerations of non-obviousness “made it dramatically less likely that Zimmer’s invalidity arguments were reasonable.” The Federal Circuit found this approach to be in error, because the district court failed to analyze the objective prong of the Seagate test first.

Under Seagate, the Federal Circuit started with the objective prong. It considered Zimmer’s defenses to each patent and ultimately concluded that none of them were unreasonable. As such, Stryker failed to prove by clear and convincing evidence that Zimmer was objectively reckless, which meant that the district court’s willful infringement finding had to be reversed.

For example, the Federal Circuit noted that in order to prove infringement of the ‘329 patent, Stryker had to obtain a broad construction of one of the terms in the patent (“handle”), which was not explicitly supported by the specification. It then had to convince the jury that a component of the infringing device (a motor) was located in the handle, even though it was not precisely located in the handle. And, Stryker had to overcome some statements during prosecution that were relevant to the location of the motor. Ultimately, the Federal Circuit found Zimmer’s position was not unreasonable.

With respect to the ‘807 patent, Stryker also had overcome prior art that was very close to the claims of the patent and had to overcome a non-infringment position that was not unreasonable. Finally, with respect to the ‘383 patent, Zimmer relied on an obviousness defense based on references identified by the PTO examiner during prosecution of a related patent. The Federal Circuit concluded that it was not unreasonable to believe that the claims were invalid based on these references.

Conclusions

This case highlights some important factors for accused infringers. Courts must be made aware of the fact that the objective prong should be considered in isolation from the accused infringer’s conduct and knowledge. It is to be assessed based on the objective record developed during the entire course of the litigation, which may include defenses that were not known to the accused infringer until after the litigation began. This segregation can be especially important where, as it appears was the situation in this case, there is strong evidence of copying.

The Federal Circuit also looked to what PTO examiners were doing during the prosecution of related patents. The Court did not go so far as to say that a PTO examiner’s rejection forms a reasonable basis that would prevent a finding of objective recklessness (which it likely could not given that the prosecution was of a related patent, and not the patent in suit), but it did look at what was being done in its objectiveness analysis. Finally, the Court seemed to put an emphasis on the fact that the infringer’s defenses were based on the plain meaning of the claim terms, as opposed to more convoluted meanings. Developing strong infringement defenses is always important, but it becomes doubly so when willful infringement is at issue.

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Federal Circuit Confirms Invalidity of Reissue Patent Claims That Violated Original Patent Requirement

Posted on December 2, 2014 by | Comments Off on Federal Circuit Confirms Invalidity of Reissue Patent Claims That Violated Original Patent Requirement

by: Robert Wagner, patent attorney at the Pittsburgh law firm of Picadio Sneath Miller & Norton, P.C. ()

If an inventor discovers that he or she has failed to claim all that he or she could have in an issued patent, the patent statute provides a mechanism for going back and adding additional claims during a reissue proceeding. Certain requirements must be met before the patent office will allow such a correction. As the patent holder found out in a recent decision by the Federal Circuit in Antares Pharma, Inc. v. Medac Pharma Inc. (No. 2014-1648), failure to comply with these provisions can render the new claims invalid and unenforceable.

Background

USRE44846The inventor in Antares developed an automatic injection device to self-administer pharmaceuticals that involved using a needle to puncture the skin of a patient before administering a dose of medication. All of the claims in the original patent involved a “jet injection” limitation. Almost two years after the patent issued, Antares realized that it had failed to include claims directed to safety features on the injector. Because two years had not passed yet, Antares initiated a reissue proceeding with the USPTO under 35 U.S.C. § 251, which allows a patent holder to broaden or narrow claims if initiated within two years of the patent being issued. Antares then added a number of claims to cover safety features on general injection devices, and not just jet injection devices (see No. RE 44,846).

Antares filed suit against Medac, alleging that, among other things, it infringed some of the new claims that emerged from the reissue proceeding. Antares sought a preliminary injunction, but the district court denied the request after concluding that the new claims did not satisfy the original patent requirement of the reissue statute. Antares appealed, and the Federal Circuit affirmed.

Reissue Statute Requirements

Under § 251, a patentee that wants to add new claims that broaden the scope of the claims of an already issued patent must satisfy a number of requirements: (1) the reissue application must be filed within two years of the issuance of the patent; (2) the new claims must not violate the recapture rule (i.e., claiming scope that was surrendered during prosecution); (3) the new claims must not violate the original patent requirement; and (4) no new matter may be added to the specification. At issue in this case was the third requirement—the original patent requirement.

The original patent requirement requires that the specification adequately support and fully describe the new claims. It is not sufficient if the new, broader claims are “merely suggested or indicated in the original specification.” So, hints, suggestions, or mere indications are not enough. As with many things relating to the understanding of the scope of a patent, “the essential inquiry under the ‘original patent’ clause of § 251 . . . is whether one skilled in the art, reading the specification, would identify the subject matter of the new claims as invented and disclosed by the patentees.”

The Patent at Issue

Antares’ patent specification only described the safety features being on jet injection devices and repeatedly stated that the invention related to jet injectors. It did not generically describe how to use the safety devices with other types of injectors. Based on the limited nature of the specification, the Federal Circuit agreed that the new claims were invalid because they were directed to safety features on generic injectors that were not explicitly and unequivocally disclosed in the specification.

The Federal Circuit contrasted this result with that of another case, In re Amos, 953 F.2d 613 (Fed. Cir. 1991). In the Amos case, the patentee broadened his claims that were directed towards an invention for holding down work pieces on a moving table using rollers. In the specification, the patentee described how the rollers could be raised via mechanical or electronic means, but only claimed the mechanical version. During reissue, the patentee added claims directed towards the electronic version, which the Court found acceptable because the specification explicitly discussed that embodiment.

Conclusion

The reissue statute is a powerful tool to add new claim scope to issued patents. Care must be taken, however, to file the reissue application within the two-year period and to make sure that the new claims do not add scope that is not well-supported by the specification. This decision is another reason that patent drafters need to be careful when drafting the specification. The patent statute provides some opportunities for fixing claims, but it is difficult to fix a specification if it is lacking and the consequence can be losing claim scope that could have been otherwise available with better drafting.

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Federal Circuit Clarifies Limits of US Patent Law

Posted on November 5, 2014 by | Comments Off on Federal Circuit Clarifies Limits of US Patent Law

by: Robert Wagner, patent attorney at the Pittsburgh law firm of Picadio Sneath Miller & Norton, P.C. ()

Hong Kong at nightThe United States patent laws have a territorial scope and prohibit individuals from making, using, offering for sale, and selling any patented invention within the United States without authority from the patent owner. 28 U.S.C. § 271(a). The United States is just one part of a much bigger world, and the question sometimes arises as to whether an accused infringer’s foreign activities are within the scope of the U.S. patent laws. In Halo Electronics, Inc. v Pulse Electronics, Inc., (No. 2013-1472 and -1656), the Federal Circuit had to address this issue and concluded that they were not.

Background

Halo is a supplier of electronic components and owned three patents related to surface mount electronic packages containing transformers for mounting on a printed circuit board inside an electronic device. Halo filed suit against Pulse for selling products containing electronic packages that used this technology.

Pulse designed and manufactured the accused products overseas and only sold minority of them in the United States. For its foreign orders, Pulse received purchase orders in its foreign offices and then shipped and delivered them to foreign locations.

One of Pulse’s major customers was Cisco, who incorporated some of Pulse’s products into its internet routers, which were sold all over the world. Pulse employees would sometimes meet with Cisco in the United States to negotiate prices, attend sales meetings with customers, meeting with design engineers, and provide post-sale support.

Pulse obtained summary judgment that it did not directly infringe with respect to products that were made, shipped, and delivered outside of the United States. At trial, the jury determined, among other things, that Pulse directly infringed with respect to products sold in the United States and induced infringement with respect to products that were incorporated into other products that were sold in the United States.

Halo appealed the grant of summary judgment to the Federal Circuit.

The Federal Circuit Affirms

In deciding the appeal, the Federal Circuit had to consider the geographic scope of infringement under § 271(a). The Court first looked at the statutory language and history behind § 271(a). It noted that the concept of a sale has physical and conceptual dimensions—where the buyer and seller are located and where a legally-operative act occurred regarding the sale.

It concluded that when no substantial activities occur within the United States there could be no potential liability under § 271(a):

Consistent with all of our precedent, we conclude that, when substantial activities of a sales transaction, including the final formation of a contract for sale encompassing all essential terms as well as the delivery and performance under that sales contract, occur entirely outside the United States, pricing and contracting negotiations in the United States alone do not constitute or transform those extraterritorial activities into a sale within the United States for purposes of § 271(a).

Thus, it affirmed the district court’s grant of summary judgment of no direct infringement for sales that did not occur within the United States.

It then turned to whether there could be infringement via an offer for sale. It reached the same result, finding that “[a]n offer to sell, in order to be an infringement, must be an offer contemplating sale in the United States.” Because all of these offers involved sales that occurred overseas, there could not be direct infringement.

The Federal Circuit upheld the district court’s summary judgment of no infringement with respect to the foreign sales.

Judge O’Malley’s Concurrence

Judge O’Malley concurred fully with the majority’s decision but wrote about another issue in the case. The district court found that Pulse’s infringement was not willful because it had an objectively reasonable invalidity defense. Therefore, it found that Halo could not satisfy the first prong of the Seagate test—that “a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.”

It did not matter that the invalidity defense was first developed during litigation. The objection prong of the test requires consideration of the totality of the evidence, including all defenses developed during the litigation and presented at trial, not just those considered by the accused infringer before being sued. The Federal Circuit affirmed this determination.

Judge O’Malley agreed with the decision but felt that it was time for the Federal Circuit to revisit its willful infringement standards in light of the Supreme Court’s decisions in Highmark Inc. v. Allcare Health Management Systems, Inc., 134 S. Ct. 1744 (2014), and Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014). She also questioned whether willful infringement should be an issue for the court or the jury. She recommended that the entire Court take up this issue en banc in order to clarify the law.

Conclusion

United States patents have geographic limitations. Companies, especially those with presences in multiple countries, need to be aware of this scope in order to make sure that they are complying with U.S. patent laws. It will also be interesting to see if the full Court takes up Judge O’Malley’s urging to reconsider the Court’s willfulness jurisprudence.

 

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Ripple Effect from Alice and Mayo Cases Being Felt in Patent World

Posted on September 5, 2014 by | Comments Off on Ripple Effect from Alice and Mayo Cases Being Felt in Patent World

shutterstock_26396608By: Henry Sneath, Chair of the Intellectual Property practice at Picadio Sneath Miller & Norton, P.C. in Pittsburgh, Pa.  hsneath@psmn.com or 412-288-4013

Sharing a great post from Dennis Crouch and his tremendous blog: Patently-O

“New Section 101 Decisions: Patents Invalid

September 4, 2014Patent

The Supreme Court’s decisions from Alice and Mayo are beginning to really have their impact. A few examples:

  • Walker Digital v. Google (D. Del. September 2014) (data processing patent invalid under 101 as an abstract idea) (Judge Stark).
  • Genetic Tech v. LabCorp and 23AndMe (D. Del. September 2014) (method of predicting human performance based upon genetic testing invalid under 101 as a law of nature) (report and recommendation from Magistrate Judge to Judge Stark)
  • Ex parte Cote (P.T.A.B. August 2014) (computer method and hardware for ‘phase shifting’ design data invalid under 101)
  • Ex parte Jung (P.T.A.B. August 2014) (diagnostic method associated with epigenetic risk factors invalid under 101).” Patently-O.

To view the entire post – please visit Patently-O at this link: http://tinyurl.com/otj6v6n

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Federal Circuit Grants Additional Time to Term of Patent from Continued Examination

Posted on January 16, 2014 by | Comments Off on Federal Circuit Grants Additional Time to Term of Patent from Continued Examination

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

USPTOIn an opinion issued Novartis AG v. Lee (No. 2013-1160, -1179) yesterday, the Federal Circuit clarified the standards for how much additional time the USPTO should add to the term of an issued patent under 35 U.S.C. § 154(b) when a patentee requests a continued examination.

When Congress changed the effective term of a patent from 17 years after issuance to 20 years after filing, it provided that extensions would be granted in certain circumstances where the delay in issuing the patent was due to the USPTO’s actions or inactions. The rules governing this extension are set forth in 35 U.S.C. § 154. In general, the term of a patent will be extended by one day for each day after three years of examination (subject to some exclusions), or when there are delays due to an interference, secrecy order, or successful appeal.

At issue in this appeal was the proper application of the provisions of 35 U.S.C. § 154(b)(1)(B)(i), which exclude “any time consumed by continued examination of the application requested by the applicant under section 132(b).” With respect to two patents, Novartis requested continue examination under § 132(b). The USPTO Director refused to grant any extensions for the time from the request until issuance of the patents.

Novartis first argued that § 154(b)(1)(B)(i) does not apply if the request for continued examination occurs more than three years after the filing of the application. The Federal Circuit rejected this argument because the purpose of the statute and the other aspects of the statutory structure did not support it. The Court did acknowledge that the language was unclear, but ultimately concluded that Novartis’s position was incorrect.

Novartis next argued that the § 154(b)(1)(B)(i) exclusion only applies to the time from the request to the notice of allowance (not to the date of issuance). The Federal Circuit agreed. The allowance to issuance time period is not related to the continued examination and involves time spent in the office of publication, not with the examiner. The Court felt it inappropriate to not credit the patentee with any delays caused during that part of the process. To the extent that there are any unusual delays relating to the examination after allowance, the USPTO can make appropriate adjustments where appropriate.

While this decision is not likely to affect many patents, practitioners should be aware of this change in these circumstances to make sure that the USPTO is properly calculating any extensions that are due to the patentee.

 

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Federal Circuit Affirms Rejection by Examiner Based on Incomplete Prior Art

Posted on January 15, 2014 by | Comments Off on Federal Circuit Affirms Rejection by Examiner Based on Incomplete Prior Art

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

Federal CircuitThe Federal Circuit issued an interesting decision in In re Enhanced Security Research, LLC (No. 2013-1114) this week. The Patent Trial and Appeal Board (PTAB) affirmed an examiner’s rejection of certain claims of a patent as obvious during an ex parte reexamination based on a user manual that was missing pages and of dubious origins. The Federal Circuit, in a 2-1 decision, affirmed. What makes this case interesting is the discussion of the completeness and authenticity of the prior art considered by the Patent Office.

Background

Enhanced Security Research (“ESR”) obtained a patent for “a computer security device and method for preventing unauthorized individuals from gaining access to a local computer network.” A third party who was in litigation with ESR requested reexamination based on two pieces of prior art—a user manual to a piece of software called NetStalker and a scholarly article. The use of the manual is at the heart of the issues in this case.

ESR challenged the propriety of the examiner relying on the manual based on the fact that pages were missing, it was not clear that this particular exemplar was available to the public, and it was not clear whether the manual was a draft. The third party requester provided an affidavit from the CEO of the company that produced the software attesting to its completeness (even though pages were clearly missing) and that it was a version available to the public. The CEO was not an uninterested party, however, as he was a paid expert for the third party requester in litigation against ESR.

The examiner, relying on a page from the manual, concluded that certain claims were obvious. Interestingly, many of the missing pages came from the same chapter as the page relied on by the examiner, including the pages immediately before and after that page.

The Majority Affirms

The majority of the Federal Circuit panel affirmed the decision of the examiner and PTAB that found that the information contained in the manual, when combined with the scholarly article, rendered certain claims of the patent obvious. The majority then went on to consider whether the examiner and PTAB should have relied on the manual as prior art.

They ultimately concluded that the manual was prior art. First, they noted that the standard of what is sufficiently “available to the public” for purposes of 35 U.S.C. § 102(a)(1) is a question of law based on underlying facts. Availability does not have to mean widely available—“a single cataloged thesis in one university library” is sufficient. The Court found that there was sufficient basis to believe that the manual was available to the public in the relevant time period based on a date in the manual and the declaration of the CEO.

Next, they found that the missing pages did not disqualify the reference. Only the relevant portions of a piece of prior art need be provided to an examiner, citing 37 C.F.R. §1.510 and MPEP § 704.14(a) ¶ 7.122. The Court did note that there may be instances where the absence of key pages would disqualify a reference, such as where it is believed that those pages would be necessary to understand the reference, but that circumstance did not exist here.

The Dissent Disagrees

One of the Judges strongly disagreed with the majority’s holding. In particular, she was troubled by the circumstances present with the manual and the declaration of the CEO.

First, the CEO was not a disinterested party. He was a paid expert for the third-party requester who was also in litigation against ESR. This raised credibility concerns, especially when portions of the manual in question, including the pages immediately before and after one of the pages relied on by the examiner, were missing. She was also troubled by his declaration that the manual was “a true and correct copy” when it clearly was not.

In addition, the dissent was troubled by the declarant’s failure to particularly state that the NetStalker product was sold prior to the critical date or that this particular manual was ever provided to any customers prior to the critical date.

Finally, the dissent was concerned that the manual was only a draft, because it bore a cryptic legend on its cover, there were question marks in the index, and the last ten pages of the final chapter did not exist. She believed that there was not sufficient evidence to support a finding that the manual was either a finished document or publicly available within the relevant time period.

In circumstances like these, with an incomplete reference, a biased declarant, and litigation between the patentee and third-party requester, the dissent felt that more information and testimony was required before the examiner could rely on the manual as a prior art reference.

Conclusion

In what is otherwise a relatively ordinary decision, some interesting issues arose. This case highlights the need for patentees to vigorously question references cited against them, especially when the circumstances suggest that the references may not be proper.

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Prosecution History Estoppel Applies to Design Patents

Posted on January 8, 2014 by | Comments Off on Prosecution History Estoppel Applies to Design Patents

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

WindshieldThe Federal Circuit issued an interesting opinion today in Pacific Coast Marine Windshields Ltd. v. Malibu Boats, LLC (Case No. 2013-1199) and authored by Judge Dyk, holding for the first time that prosecution history estoppel applies to design patents and that a patentee can surrender subject matter during prosecution through its actions.

Background

The owner and CEO of Pacific Coast filed a design patent application in which he submitted drawings showing five “patentably distinct groups of designs” and claimed an “ornamental design of a marine windshield with a frame, a tapered corner post with vent holes and without said vent holes, and with a hatch andwithout said hatch, as shown and described.” The examiner issued a restriction requirement and required the applicant to elect a single group (and file additional applications for the remaining groups, if desired).

In response, the applicant chose the first designated group and amended the claim to remove the vent hole and hatch language: “the ornamental design of a marine windshield with a frame, and a pair of tapered corner posts.” He also cancelled figures 7-12, leaving just the embodiment with four circular holes on the corner post and a hatch on the front of the windshield. The remaining figures (1-6) showed alternated views of the four-hole embodiment. The amended application ultimately issued as a design patent.

Pacific Coast filed suit against Malibu Boats for making and selling windshields with three trapezoidal holes on the corner posts (shown above). Malibu Boats moved for summary judgment of non-infringement, arguing that Pacific Coast surrendered the non-four-hole embodiments on the grounds of prosecution history estoppel. The District Court agreed, and entered summary judgment in favor of Malibu Boats. Pacific Coast appealed.

The Federal Circuit Reverses and Remands

The Court first noted that while prosecution history estoppel is more often raised in the context of utility patents, the doctrine nonetheless applies to design patents. Surprisingly, this was an issue of first impression for the Court (although recognized in treatises and by district courts previously). The Court did note that the context is somewhat different, however.

For utility patents, infringement can occur either literally or under the doctrine of equivalents. Design patents are different and do not require literal identity to impose liability. Instead, liability arises if someone applies the patented design or any colorable imitation of it (in other words, sufficient similarity is sufficient). Thus, literal infringement and equivalents infringement are intertwined from the start.

The Court determined that doctrine of prosecution history estoppel should apply to design patent prosecution in order to preserve the public notice function of the process. A patentee should not be able to recapture subject matter that it abandoned during prosecution.

To determine whether prosecution history estoppel applies, the court must consider (1) whether there was a surrender of material, (2) whether it was for reasons of patentability, and (3) whether the accused design is within the scope of the surrender.

For design patents, the drawings define the scope of the invention, not the claims. Therefore, the court must look to what materials in the drawings the applicant surrendered. Here, the applicant removed drawings with two holes and no holes in the corner post. This constituted surrender of these designs and limited the design to a windshield with four holes in the corner post.

The Court next determined that the material was not surrendered for reasons of patentability—e.g., anticipation, obviousness, etc.—but it was surrendered in order to secure the patent. Pacific Coast argued that the doctrine of prosecution history estoppel only applies to surrenders to avoid the prior art, but the Court disagreed, finding the doctrine was broader than that. Any narrowing amendment made to satisfy any requirement of the Patent Act that narrows the scope of the patent qualifies. The Court concluded that amendments to satisfy a restriction requirement for design patents qualify. Notably, the Court specifically stated that it was expressing no opinion on whether this same analysis would apply to utility patents.

Finally, the Court considered whether the accused design was within the scope of the surrender. Malibu Boats argued that everything but a four-hole design was surrendered, but the Court wasn’t so sure. The patentee clearly surrendered a two-hole design and obtained coverage for a four-hole design, but did not seek coverage or surrender a three-hole design. Malibu Boats did not argue that a three-hole design was not colorably different from a two-hole design. Therefore, the Court concluded that no prosecution history estoppel arose because the surrendered material was different from the accused device (two-hole versus three-hole). The Court noted that under these procedural circumstances that it did not have to engage in an analysis of whether the scope of the surrender was to be measured by a colorable imitation standard.

Conclusion

This case presents an interesting new decision in the design patent field. Design patentees need to be careful when faced with restriction requirements, and should seriously consider filing divisional applications to avoid potential problems like these. The case also highlights the dangers of sailing in uncharted legal waters, where the Court may hold the lack of an argument against you when it may not have been clear that you needed to make it in the first place.

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