Filewrapper® | A patent, trademark, and copyright law blog

Ultramercial LLC v. Hulu LLC

Mon, 26 Sep 2011 16:02:00-0500

The United States Court of Appeals for the Federal Circuit recently addressed the issue of whether a method of using advertising as a form of currency, to distribute copyrighted products over the internet, constituted patent-eligible subject matter. The court reversed the district court’s dismissal for lack of subject matter eligibility and found the claimed invention fell within patent-eligible subject matter under 35 U.S.C. §101’s definition of a “process.”

Ultramercial, LLC and Ultramercial, Inc.’s (collectively, “Ultramercial”) filed suit against Hulu, LLC (“Hulu”), YouTube, LLC (“YouTube”), and WildTangent, Inc. (“WildTangent”), in the United States District Court for the Central District of California. Ultramercial alleged infringement of its patent that claimed a method for distributing copyrighted products over the internet. The method allowed a consumer to freely obtain copyrighted products, such as songs, movies, and books, over the internet in exchange for viewing an advertisement. The copyrighted products were paid for by the advertiser. Hulu and YouTube were dismissed from the case, and WildTangent filed a motion to dismiss for failure to state a claim with patent-eligible subject matter. The district court dismissed Ultramercial’s patent infringement claims, finding that Ultramercial’s patent did not claim patent-eligible subject matter. Ultramercial appealed to the United States Court of Appeals, Federal Circuit.

The United States Court of Appeals, Federal Circuit, initially noted that the district court had dismissed Ultramercial’s claims for failure to claim patent-eligible subject matter without formally construing the claims. The court recognized that it had “never set forth a bright line rule requiring district courts to construe claims before determining subject matter eligibility.” Thus, the court held that claim construction may not always be necessary for 35 U.S.C. §101 analysis, and that this case did not require claim construction in light of the subject matter at issue.

The court then set forth the categories of subject matter eligible for patent protection under 35 U.S.C. §101:

[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

35 U.S.C. §101. The court noted that the language of §101 clarifies that the categories of patent-eligible subject matter are no more than a “course eligibility filter” (quoting Research Corp. Techs., Inc. v. Microsoft Corp., 627 F.3d 859, 869 (Fed.Cir. 2010)), and that subject matter eligibility is “merely a threshold check.” The court pointed out that there are only three categories of subject matter outside the eligibility constraints of §101: laws of nature; physical phenomena; and abstract ideas. The court further admitted that it, and the United States Supreme Court, have found it difficult to provide a precise definition for the patent-ineligible category of abstractness. While abstract ideas are patent ineligible, on the other hand, an application of an abstract idea may well be protected. Thus, the court gave “substantial weight to the statutory reluctance to list any new, non-obvious, and fully disclosed subject matter as beyond the reach of title 35.”

Addressing Ultramercial’s patent, the court found that it constituted a method of monetizing and distributing copyrighted products over the internet. Thus, as a method, Ultramercial’s claims satisfied §101’s definition of a “process” and fell within patent-eligible subject matter. The court determined that Ultramercial’s patent did not simply claim an abstract idea, i.e. advertising can serve as currency, but actually disclosed a practical application for this concept. The court also found several factors significant, for instance, the invention involved an extensive computer interface and solved problems with prior art banner advertising by requiring consumers to view advertisements before granting access to any copyrighted products.

The court ultimately held that “the ‘course eligibility filter’ of §101 should not be used to invalidate patents based on concerns about vagueness, indefinite disclosure, or lack of enablement, as these infirmities are expressly addressed by §112.” (quoting Research Corp., 627 F.3d at. 869; citing 35 U.S.C. §112). Thus, the court determined that Ultramercial’s claimed invention was not so “manifestly abstract as to override the statutory language of section 101,” because it was an improvement to prior art technology and a practical application of the general concept of utilizing advertising as currency. (quoting Research Corp., 627 F.3d at. 869). As a result, the court reversed the district court’s dismissal of Ultramercial’s patent claims for lack of subject matter eligibility and remanded for further proceedings.

Leahy-Smith America Invents Act Reforms Patent Law

Thu, 15 Sep 2011 10:36:00-0500

The Leahy-Smith America Invents Act goes into effect beginning September 16, 2011. This Act represents the most comprehensive legislative change to patent law since the 1950s. Most significantly, it changes how priority is determined for an invention and expands and revises procedures for administratively challenging patents through the Patent Office instead of the court system. Some of the provisions have immediate effect, but many of the most significant changes will not go into effect until 18 months or one year from its effective date. This summary covers the most prominent provisions of the Act.

First-inventor-to-file

The Act brings the United States into conformance with the rest of the world by converting from a first-to-invent regime to a first-to-file regime. Under present law, whoever first conceives of an invention is entitled to the patent (as long as the inventor worked diligently to reduce it to practice, and did not abandon, compress or conceal it), even if another inventor beat them to the Patent Office. Under the new Act, if two people separately invent the same invention, the first person to file a patent application will take priority and be entitled to the patent.

This also means that applicants will not be able to avoid prior art that is dated less than one year before their filing date by “swearing behind” it. Currently, if the Patent Office cites a reference that is less than one year prior to an applicant’s filing date, the applicant can overcome it by swearing that he or she invented his or her invention prior to the date of the reference. That will no longer be possible after this provision takes effect.

Currently if two inventors file a patent application for the same invention, an interference proceeding is held to determine who was the first to conceive and not abandon the invention. The new Act eliminates the interference proceeding. However, a similar proceeding is created by the new Act for instances where the earlier filing applicant is alleged to have derived the invention from the later filing inventor.

In light of switching to a first-inventor-to file regime, it will be more important to file patent applications quickly in order to have an early filing date. In general this will favor entities that establish procedures for getting inventions identified and evaluated early. It will be a disadvantage to inventors who want to try to monetize their inventions before filing applications, and to unsophisticated companies who don’t realize the importance of early filing.

The first-inventor-to-file provisions go into effect in 18 months. Issued patents, and pending applications filed before March 16, 2013 will still be governed by the first-to-invent scheme. Furthermore, an application filed after March 16, 2013 that claims priority to an application filed before that date will get treated under the first-to-invent rules, unless it also includes a claim for priority to an application filed after that date. In other words, the first continuation application filed after March 16, 2013 is entitled to get the more favorable treatment of the first-to-invent regime; whereas subsequent continuation applications will be judged under the new regime.

Expanded Administrative Challenges

The Act expands the ability to administratively challenge the validity of patents through the Patent Office rather than through the court system. These procedures go into effect beginning September 16, 2012.

Preissuance Submissions by Third Parties

The Act provides a procedure for third parties to submit relevant prior art in pending applications. The third party can submit any printed publication they believe to be prior art, along with a concise statement of why the prior art is relevant. Such statements will be considered by the Patent Office as long as they are submitted within six months of the publication of the application.

Post Grant Review

For the first nine months after a patent has been issued, a third party can seek review of a patent on any ground that is a condition for patentability—including any type of prior art and failure to comply with more technical requirements as to form and content. Under current practice review can only be sought based on prior art printed publications. The party requesting review will not be able to later raise as a defense any issues that were or could have been brought in the post grant review proceeding.

Inter Partes Review

After nine months, a third party may request an inter partes review, which is more limited than the post grant review, and can only be based upon a prior art printed publication. A third party that institutes an inter partes review will be precluded from later asserting a defense to the patent based on any prior art that was or could have been included in the review. Inter partes review is very similar to the existing inter partes reexamination, but differs from current practice in that it authorizes the parties to settle the case without approval of the Patent Office and requires a litigation defendant to institute a request for review within nine months of being served with a complaint for patent infringement.

Supplement Examination

The patent owner can request supplement examination of their own patent to consider any issues that may affect the validity of the patent. This procedure is similar to current ex parte reexamination, but is not limited to printed prior art. Supplement examination cannot be used to correct fraud perpetrated on the Patent Office.

In light of these expanded administrative challenges, it will be more important to closely follow published and newly issued patents in order to take advantage of the enhanced ability to challenge patents outside of formal litigation.

False Marking

The Act largely eliminates the false marking claims that have recently proliferated. Prior to the Act taking effect, virtually anybody could bring a claim against a party that was falsely marking their product as covered by a patent (including marking with an expired patent number). Under the new Act, only a competitor that is actually injured by the false marking can bring a claim. Furthermore, there is now a safe harbor for marking a product with a patent number for three years after the patent expires.

The Act also creates a new way of satisfying the marking requirements. A patent owner can mark its products with a notation saying patented or “Pat.” and indicating an Internet address where the patent number or numbers can be accessed.

Litigation Issues

The Act eliminates failure to disclose the best mode of practicing an invention as a defense to patent infringement. Section 112 of the Patent Act still requires an applicant to disclose the best mode of practicing the invention. However, an accuser can no longer try to show that the inventor actually knew of a better mode as a defense to patent infringement. While the Act is silent on the issue, it is expected that intentional failure to disclose the best mode would likely still make the patent unenforceable due to inequitable conduct.

The Act also limits the ability of patent owners to name multiple defendants in a single lawsuit, unless the defendants are named jointly, severally, or in the alternative.

The Act statutorily provides that failure to obtain or disclose advice of counsel with respect to an allegedly infringed patent cannot be used as evidence that the alleged infringer willfully infringed a patent. This is consistent with the current state of the judge-made law on the issue, but should provide certainty on the issue going forward.

Commercial use of a process more than one year prior to the effective filing date of a patent has been added as a defense to infringement of a patent directed to the process or to a machine that implements the process. Previously, this defense was only available for patents directed to business methods. This is a personal defense and cannot be asserted by a party that did not themselves use the process.

New “Micro Entity” with Reduced Fees

In addition to the already existing “small entity” that is entitled to a 50% reduction in most Patent-related fees, the Act creates a “micro entity” that is entitled to a 75% reduction. A micro entity is defined as an applicant that is assigning the invention to an institution of higher education or an applicant that did not in the preceding calendar year have a gross income exceeding three times the median household income for the preceding calendar year ($49,445 in 2010), as most recently reported by the Bureau of the Census. Applicants qualifying based on income cannot have filed more than four previous patent applications.

Expedited Examination

The Act authorizes the Patent Office to charge a fee of $4800 ($2400 for small entities) for an “expedited examination.” The Patent Office has not formally announced the details of the program yet, but it is expected to be implemented in the near future. The most recent proposal by the Patent Office basically allows an applicant pay the increased filing fee in exchange for quicker handling of the application by the Patent Office.

Business Method Patents

The Act includes several provisions that make it easier to administratively challenge so-called business method patents. The Act defines a “business method patent” as “a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service.” Therefore, its limitations relate primarily to financial services inventions.

The Act creates a post grant review procedure for business method patents that is similar to the post grant review procedure described above that can be based on any grounds and not merely printed publication prior art, except that for business method patents, there is no one-year time limit on bringing such an action. Furthermore, this provision applies to existing applications and patents; whereas the standard post grant procedure will only apply to applications filed more than one year after the effective date of the Act. Even more importantly, a party initiating a post grant review of a business method patent will only be precluded from later asserting the defenses actually included in the post grant review, not all defenses that could have been raised.

The Act also tightens jurisdiction a little in litigation cases asserting a business method patent, requiring that venue for any litigation must be at a principal place of business of the infringer, or where the infringer committed acts of infringement and has a regular place of business. It further clarifies that an ATM machine is not a regular place of business for establishing venue.

The Act precludes issuing patents on tax strategies, which it defines as “strategies for reducing, avoiding, or deferring tax liability.” The special provisions related to tax strategy patents apply to pending tax strategy applications, but not to patents issued prior to September 16, 2011.

Prohibition on Patenting Human Organisms

The Act provides that no patent may issue on a claim directed to a human organism. This is consistent with current Patent Office policy.

Increased Fees

Starting September 26, 2011, there will be a 15% surcharge on most Patent Office fees.

Reduced Fee Diversion

Many of the fees collected by the Patent Office have been diverted to outside purposes. The Act permits the Patent Office to retain more of the fees it collects. It is hoped that this will improve the quality of patent examination and reduce costs.

Federal Circuit Establishes New Standard for Inequitable Conduct

Wed, 15 Jun 2011 14:24:00-0500

On May 25, 2011 the Federal Circuit released its en banc decision in Theresense, Inc. v. Becton, Dickinson & Co. , in which the Court articulated the appropriate standard for inequitable conduct before the PTO. The majority wrote, “[t]his court now tightens the standards for finding both intent and materiality in order to redirect a doctrine that has been overused to the detriment of the public.”

Majority

At issue in the district court was the 5,820,551 patent which involved disposable blood glucose test strips for diabetes management. Protective membranes are often used on such glucose test strips to protect the veracity of the results. The ‘551 patent disclosed a test unit without a protective membrane. The Examiner cited the 4,545,382 patent, also held by Abbott, as disclosing a unit which could be used without a membrane. A declaration and affidavit was submitted explaining the language of the ‘382 patent would not encourage one of ordinary skill in the art to use the device without a membrane, and the Examiner relied upon the statements for allowance of the ‘551 patent. It came to light during litigation that Abbott had previously made representations to the European Patent Office that, in fact, “[the] disclosure was unequivocally clear:” the membrane of the ‘382 patent was optional. At the district court level, claims 1–4 of the ‘551 patent were held invalid as obvious and the ‘551 patent was held unenforceable due to inequitable conduct.

The majority undertook a discussion of the Keystone, Hazel-Atlas, and Precision cases which set forth the test for unclean hands, the precursor to inequitable conduct. The Court continued, discussing the ways in which the inequitable conduct doctrine diverged from these original cases, expanding to include a broader scope of misconduct—“mere non-disclosure” to the PTO—and by adopting a more potent remedy—unenforceability of the entire patent. This lead to the sliding scale test, the “reasonable examiner standard” and the standards articulated in 37 C.F.R. 1.56.

The Court continued, noting that these standards lack uniformity and encourage the use of the “atomic bomb” of patent law. “Left unfettered, the inequitable conduct doctrine has plagued not only the courts but also the entire patent system.” The Court then proceeded to “tighten the standard.” For purposes of the intent prong, the Court held, “the accused infringer must show the patentee acted with the specific intent to deceive the PTO.” This requires “clear and convincing evidence must show that the applicant made a deliberate decision to withhold a known material reference.” No longer will the “should have known” analysis satisfy this standard.   Finally, the absence of a good faith explanation does not, by itself, prove the intent to deceive. With respect to the materiality prong, the Court articulated a “but for” materiality standard. Thus, “when an applicant fails to disclose prior art to the PTO, that prior art is but-for material if the PTO would not have allowed a claim had it been aware of the undisclosed prior art.” Important to note, the decision articulates a preponderance of the evidence standard for the “but for” test, which is different than the clear and convincing evidence standard required for invalidity. Finally the court notes an exception to the “but for” test—in cases of “affirmative egregious misconduct,” the materiality prong may also be satisfied. The Court vacated the finding of materiality at the district court and remanded for application of the new test:

1.   Intent: clear and convincing evidence must show that the applicant made a deliberate decision to withhold a known material reference.
2.   Materiality: preponderance of the evidence must show that the PTO would not have allowed a claim had it been aware of the undisclosed prior art—“but for” test.
a.   Exception: affirmative egregious misconduct.

Concurrence

   The concurring opinion criticizes both the majority and the dissent for as sacrificing flexibility for rigidity. The concurrence agrees with the majorities overall holding, but wishes to respect the equitable nature of the test. This means leaving the decision of inequitable conduct to the decision of the lower courts. The opinion notes this would help in the instance there is some intentional misconduct which does not fit within the rigid test, yet still warrants equitable relief. This includes allowing the district court to “fashion some other reasonable remedy, so long as the remedy imposed by the court is ‘commensurate with the violation.’” The concurrence articulates a materiality test including:

1.   But for the conduct (whether it be in the form of affirmative act or intentional non-disclosure), the patent would not have issued (as Chief Judge Rader explains in the majority opinion);
2.   The conduct constitutes a false or misleading representation of fact (rendered so either because the statement made is false on its face or information is omitted which, if known, would render the representation false or misleading); or
3.   The district court finds that the behavior is so offensive that the court is left with a firm conviction that the integrity of the PTO process as to the application at issue was wholly undermined.

Dissent

   The dissent begins by noting that the “specific intent,” as articulated by the majority and the clear and convincing evidence standard. The disagreement revolves around the materiality standard. The dissent would prefer to continue to apply the standard as articulated in 37 C.F.R. 1.56 because “[f]irst, examiners need to conduct effective and efficient examinations, i.e., what information is material to the examination process. Second, the higher standard of materiality adopted by the majority will not provide appropriate incentives for patent applicants to comply with the disclosure obligation the PTO places on them.” Essentially, the dissent would re-affirm the standard articulated in Kingsdown Medical. The test from the dissent would require:

1.   Inequitable conduct requires proof, by clear and convincing evidence, that the applicant or attorney intended to misled the PTO with respect to the material matter.
2.   Materiality is measured by what the PTO demands of those who apply for and prosecute patent applications. The disclosure standard for the PTO expects those parties to comply with is set forth in the current version of the PTO’s Rule 56. Under that standard, inequitable conduct requires proof that the information at issue either established, by itself or in combination with other information, a prima facie case of unpatentability, or was inconsistent with a position taken by the applicant before the PTO with respect to patentability.
3.   Intent to mislead and materiality must be separately proved. There is no “sliding scale” under which the degree of intent that must be proved depends on the strength of the showing as to the materiality of the information at issue.

The dissent continues, describing the veracity of such a test for policy reasons and for reasons of deference to the PTO. Further, the dissent articulates this standard as more historically accurate with the Keystone, Hazel-Atlas, and Precision cases. The dissent describes the majority test as “Draconian” and inappropriate within the context of history, precedent, and the public policy consideration of the inequitable conduct doctrine.

For the full opinion, click here .

Court Redefines Knowledge Requirement for Induced Infringement

Wed, 15 Jun 2011 14:07:00-0500

In a recent decision, authored by Justice Alito and joined by all the other Justices but Justice Kennedy, the Supreme Court redefined the knowledge requirement for finding induced infringement under 35 U.S.C. § 271(b). The case—which centered on a patent for an innovative fryer—provided an opportunity for the Court to elucidate what is required for active inducement of infringement: that the party accused of inducing infringement must have knowledge that the induced acts constitute patent infringement. The Court then further held that this knowledge requirement could be satisfied by willful blindness, a concept borrowed primarily from criminal law.
The Court began its analysis of induced infringement with a brief examination of the statute, finding the text “short, simple, and with respect to the question presented in this case, inconclusive.” The Court did, however, note that the language of § 271(b) included an implied element of intent. The Court then defined precisely what that intent element necessitates, relying on the 1964 decision in Aro Mfg. Co. v. Convertible Top Replacement Co. (Aro II) to support the determination that knowledge under § 271(b) specifically requires knowledge of the patent. The Court reasoned that knowledge for contributory infringement under § 271(c), which was specifically addressed in Aro II, was necessarily the same as knowledge for inducement. Aro II established “that a violator of § 271(c) must know ‘that the combination for which his component was especially designed was both patented and infringed.’” The Court adopted this knowledge standard to § 271(b), concluding that “induced infringement under § 271(b) requires knowledge that the induced acts constitute patent infringement.”
In so deciding, the Court definitively rejected deliberate indifference as the standard for knowledge—the standard the Federal Circuit had relied on in affirming the District Court’s finding of inducement. The Court nevertheless affirmed the Federal Circuit, however, because it concluded that the knowledge requirement could be satisfied by a showing of willful blindness. Stating that such a proposition was supported both by traditional concepts of culpability and by the precedent, the Court held that “defendants cannot escape the reach of [] statutes by deliberately shielding themselves from clear evidence of critical fact that are strongly suggested by the circumstances.” The Court acknowledged that willful blindness is principally a criminal law concept, having been endorsed in that context as early as the Court’s decision in 1899 in Spurr v. United States, 174 U.S. 728. Yet the Court concluded that “[g]iven the long history of willful blindness and its wide acceptance in the Federal Judiciary, we can see no reason why the doctrine should not apply in civil lawsuits for induced patent infringement under 35 U.S.C. § 271(b).”
Ultimately, the Court provided a two-part test for willful blindness for inducement. First, a defendant must subjectively believe there is a high probability that a patent exists and would be infringed, and second must take deliberate actions to avoid knowing that fact. In this case, the facts supported such a finding. Specifically, the defendant was aware when it copied the plaintiff’s product that the product was an innovation in the U.S. market; defendant decided to copy an overseas model of the product, which it knew would not bear U.S. Patent markings; and the defendant decided not to inform an attorney it hired to give a right-to-use opinion that it copied the plaintiff’s product. Taken together, the Court concluded the defendants actions were tantamount to “manufacture [of] a claim of plausible deniability in the event that [defendant] was later accused of patent infringement.”
The Court’s decision provides a definitive—albeit somewhat heightened—standard for proving induced infringement under 35 U.S.C. § 271(b). It remains to be seen how this subjective standard will be applied going forward.
For the complete opinion, click here.

Supreme Court Clarifies Ownership Rights in Federally Funded Inventions Under the Bayh-Dole Act

Wed, 08 Jun 2011 09:28:00-0500

In a 7-2 decision released yesterday, the Supreme Court ruled the University and Small Business Patent Procedures Act of 1980 (“the Bayh-Dole Act”) does not displace the general rule that rights in an invention belong to the inventor, and does not automatically vest title to federally funded inventions in the contractors receiving the federal funds. Chief Justice Roberts, writing for the majority, wrote that the Act does not “reorder[] the normal priority of rights in an invention” through language allowing contractors to retain title to “invention[s] of the contractor.”

The Majority based its opinion on the general rule of patent law that rights in an invention belong to the inventor, a rule confirmed by the Court’s precedent. Although the Court recognized that this general rule can be superseded by congressional act—and in fact has previously been superseded by legislation relating to the Atomic Energy Commission, the Department of Energy, and NASA, for example—it noted that the Bayh-Dole Act contains no language specifically vesting ownership of federally funded inventions with the federal government, or with anyone else, including the contractor. Further, the Court held that language in the Act permitting contractors to “elect to retain title” was not the equivalent of vesting title in those contractors. Thus, the Act does not automatically vest rights in the invention in the contractor by virtue of the fact that the invention was funded (at least in part) by the federal government.

The Court effectively held that the provisions of the Bayh-Dole Act affecting the rights of contractors in federally funded inventions apply only under circumstances where the contractor has already acquired those rights, i.e. upon effective assignment of the rights by the inventor to the contractor. The dissent, written by Justice Breyer and joined by Justice Ginsberg, argue that such a position undermines the purpose of the Act, and runs contrary to the policies behind the Act, by “allow[ing] individual inventors, for whose invention the public has paid, to avoid the Act’s corresponding restrictions.” The Majority addresses this concern by remarking that the issue of inventor’s individual rights is unlikely to become common because the assignments generally included in employment agreements will usually work to vest the rights to the invention in the contractor.

It is worth noting that under the facts of this case—where the inventor signed a separate agreement and assignment with another company after entering into an agreement with, and while still in the employ of, the contractor—the assignment to the contractor turned out to be ineffective. This suggests that there may be other particular circumstances where the contractor may not obtain right in the invention despite the existence of an assignment by the inventor.

This case serves as an important reminder for employers, and especially contractors receiving federal research funds, to make sure that they require proper and effective assignments are executed. The Court reaffirmed that mere employment is insufficient to vest title in an employee’s invention in the employer, and further held that the Bayh-Dole Act does not guarantee otherwise.

For the full opinion, click here.

USPTO will remain open until April 18 in the event of government shutdown

Fri, 08 Apr 2011 10:31:00-0500

In a press release, the USPTO stated it has sufficient available funds not tied to the current fiscal year that it will be able to remain open for six days following any shutdown of government functions. Based on the current appropriations, that would put the USPTO open until April 18, assuming a shutdown begins April 11. After that time, limited functions should still be available, including accepting new electronically-filed applications and other IT functions. It is not clear what, if any, other services will continue to be available after that time.

To read the full press release, click here.

Federal Circuit requires agency relationship or contractual obligation for joint infringement

Tue, 04 Jan 2011 14:42:00-0500

To establish infringement of a method claim, a patent holder must show that all of the recited steps in the claim are performed by a defendant. If the recited steps are not performed by a single entity, but by the defendant acting in concert with another party, the patent holder may still show “joint infringement” if the defendant controls or directs the activities of another party.

In Akamai Technologies v. Limelight Networks, the Federal Circuit looked at what types of activities qualify as directing or controlling the activity of a another party. The court opted for a bright-line rule that requires either a principal-agent relationship or a contractual obligation to perform the steps of the claim.

More details of Akamai Techs. v. Limelight Networks after the jump.

[More]

Federal Circuit determines that method for optimizing dosing of medication is patent eligible

Tue, 21 Dec 2010 09:44:00-0500

The Federal Circuit on Friday looked at the issue of what constitutes an attempt to patent a natural phenomenon. In Prometheus Laboratories, Inc. v. Mayo Collaborative Services, the Federal Circuit determined that a method for optimizing the dosage of a medication was not directed to a natural phenomenon and therefore was patent-eligible subject matter within the meaning of § 101 of the Patent Act. This is the second case in as many weeks refining the analysis of patent-eligible subject matter in light of this summer's Supreme Court ruling in Bilski v. Kappos.

More details of Prometheus Labs., Inc. v. Mayo Collaborative Servs. after the jump.

[More]

Bayh-Dole Patent Ownership Dispute to be heard by Supreme Court

Mon, 08 Nov 2010 10:36:00-0500

Last week, the Supreme Court announced it will review the Federal Circuit decision in Stanford v. Roche, addressing patent ownership under the Bayh-Dole Act, after granting Stanford's petition for a writ of certiorari. The Court will decide an interesting patent ownership dispute involving the contractual obligation of a University inventor to assign rights to the University and the same inventor's prior assignment of future rights to a company (which eventually became Roche). The Federal Circuit ruled against Stanford, finding that the prior assignment of the inventor trumped the assignment obligation he later had with the University.

The question presented is:

Whether a federal contractor university's statutory right under the Bayh-Dole Act, 35 U.S.C. §§ 200-212, in inventions arising from federally funded research can be terminated unilaterally by an individual inventor through a separate agreement purporting to assign the inventor's rights to a third party.

More on Bd. of Trustees of Leland Stanford Jr. Univ. v. Roche Molecular Sys., after the jump.

[More]

Supreme Court hears arguments today regarding first sale doctrine and international purchases

Mon, 08 Nov 2010 10:32:00-0500

This morning the Supreme Court will hear oral argument in Costco Wholesale Corp. v. Omega S.A., a case regarding the potential international scope of the first sale doctrine. Costco lawfully purchased authentic Omega watches abroad and imported them to the United States for sale in its stores. Omega sued for copyright infringement, arguing the watches bore a copyrighted design and the purchase abroad did not exhaust its rights under the first sale doctrine.

The Ninth Circuit agreed with Omega, holding the foreign purchase did not exhaust Omega's copyright rights in the United States (our post regarding the Ninth Circuit's decision is here). Costco sought review by the Supreme Court, which granted certiorari in April after inviting the United States to file a brief with its views on the matter. The Solicitor General (at the time, Elena Kagan) filed a brief recommending the Court deny certiorari. As a result of her involvement, Justice Kagan is recused from the case.

For our discussion of the Ninth Circuit decision being reviewed, click here.

For SCOTUS Blog's collection of documents relevant to the case, click here.

Inventor's prior art patents and prosecution history lead to reversal of claim construction

Tue, 26 Oct 2010 12:55:00-0500

In a recent decision, the Federal Circuit reversed a district court's grant of summary judgment of noninfringement and invalidity based on inadequate written description. The issue of infringement was reversed based on the district court's incorrect construction of a critical claim limitation. While the court held it was a "close case," it held the patentee had not acted as his own lexicographer and the specification and file history showed a broader construction was appropriate. In addition, a broader construction was supported by usage of the term in prior art patents by the same inventor.

On the written description issue, the court held there was at least a factual issue as to whether limitation at issue, which permitted reinforcement of any portion of a portion of the claimed product, was inadequately described. The court observed that the allegedly limiting language was a "preferred aspect" of the invention, and thus the patentee's experts' testimony that one in the art would interpret the specification as more broadly disclosing the device was sufficient to generate a fact issue. The district court characterized this testimony as "not helpful" when granting summary judgment of invalidity.

More detail of Laryngeal Mask Co. v. Ambu A/S after the jump.

[More]

Supreme Court to hear case regarding proper standard for proving inducing infringement under 271(b)

Tue, 12 Oct 2010 11:52:00-0500

In an order today, the Supreme Court agreed to hear a case regarding the necessary intent for inducing infringement under 35 U.S.C. § 271(b). The case is Global-Tech Appliances, Inc. v. SEB S.A., docket number 10-6. The specific question presented is:

Whether the legal standard for the state of mind element of a claim for actively inducing infringement under 35 U.S.C. § 271(b) is "deliberate indifference of a known risk" that an infringement may occur, as the Court of Appeals for the Federal Circuit held, or "purposeful, culpable expression and conduct" to encourage an infringement, as this Court taught in MGM Studios, Inc. v. Grokster; Ltd., 545 U.S. 913, 937, 125 S. Ct. 2764,2780,162 L. Ed. 2d 781, 801 (2005)?

The Supreme Court's full order list is here. The original Federal Circuit opinion under review is here.

SCOTUSblog has the certiorari-stage documents collected here. The case is set to be argued in the current term, but no schedule has yet been set for briefing on the merits or oral argument.

Compliance with industry standards can be used to show patent infringement

Mon, 27 Sep 2010 14:31:00-0500

In Fujitsu et al v. Netgear, the Federal Circuit held compliance with an industry standard can be sufficient evidence to establish patent infringement. However, this rule only applies when the only way to adhere to the industry standard is to infringe the asserted patent, such that any product that complies with the standard infringes. In this case, the court determined that a party could comply with the standards at issue without infringing the patents; therefore, direct comparison of the products with the claims was necessary.

More detail after the jump.

[More]

Federal Circuit decisions address false marking statute in Solo Cup and Brooks Brothers cases

Mon, 27 Sep 2010 10:34:00-0500

The Federal Circuit continues to address false marking cases. The court's recent decisions stress how important it is for patentees to monitor and update their labeling and other marking activities, particularly as patents expire.

In June, the court affirmed a summary judgment decision in favor of Solo Cup related to the company's practice of marking patents on beverage cup lids, and addressed whether each decision to mark or each article falsely marked is an act of false marking under the statute. In August, the court addressed the issue of who has standing to bring a false marking case, reversing a district court's finding of lack of standing in a false marking case brought against Brooks Brothers.

The Solo Cup case demonstrates the potential damage awards against companies that sell numerous products can be very large. However, the court created a higher bar for plaintiffs seeking to cash in on the false marking statute and demonstrates the importance for a defendant to be able to show good faith actions to overcome any presumption of intent to deceive the public.

The Brooks Brothers case provides a lesson on standing under 35 U.S.C. § 292. The Federal Circuit held a plaintiff has standing as a result of sufficiently alleging an injury in fact to the U.S. that was caused by Brooks Brothers' false marking of its bow ties, that may be redressed with the statutory fine created by § 292. This removes a potential barrier to false marking suits being filed in the first instance.

More detail of these two cases after the jump.

[More]

Preamble held not limiting because body of claim sets forth complete invention

Mon, 20 Sep 2010 15:47:00-0500

In a recent decision, the Federal Circuit reversed a decision of the United States District Court for the District of Massachusetts. The district court had granted summary judgment of noninfringement to the defendant finding that the defendant's accused device did not perform a function found only in the preambles of the asserted claims.

The Federal Circuit held that the disputed preamble term did not limit the asserted claims, and therefore, reversed and remanded the case for further findings. Specifically, the court noted there was no suggestion in the prosecution history that the preamble was limiting, the preamble did not provide any antecedent basis for terms in the body of the claim (even though one element used "the" in the body of the claim), and the preamble did not define an essential component of the invention, such that the body of the claim defined the complete invention. Based on these factors, the preamble was not a limitation of the claim, and the summary judgment of noninfringement was reversed.

Judge Dyk dissented, and invited the court to take the issue of preambles en banc to create a bright-line rule that preambles are always limiting, rather than relying on the context of each patent.

More concerning Am. Med. Sys., Inc. v. Biolitec, Inc. after the jump.

[More]