Friday, August 21, 2009

Sky Technologies v. SAP AG

After the district court found that the plaintiff had standing because it acquired all substantial rights to the patent, the defendant brought an interlocutory appeal. The Federal Circuit affirmed the district court in this opinion, holding that transfers of patent rights other than by assignment do not necessarily have to be in writing.

The plaintiff obtained the patent through a foreclosure proceeding. The court noted that patent ownership is generally determined by state law, but assignment of patents is determined by federal law. However, transfer of patent rights other than by assignment, i.e., by operation of law, is determined by state law. (p. 7-8.) Discussing and relying on Akazawa v. Link New Technology International, Inc., 520 F.3d 1354 (Fed. Cir. 2008), the court confirmed that “transfer of patent ownership by operation of law is permissible without a writing.” (p. 9.) Since this occurred in accordance with the applicable state law, the plaintiff had standing.

Wednesday, August 19, 2009

Cardiac Pacemakers v. St. Jude Medical

The en banc portion of this opinion holds that section 271(f) does not apply to method claims, overruling Union Carbide Chemicals & Plastics Technology Corp. v. Shell Oil Co., 425 F.3d 1366 (Fed. Cir. 2005). The court relied on the presumption against extraterritoriality, Congressional intent reflected in the legislative history, the language of Section 271(f), the overall statutory scheme, the fact that a clear majority of the amicus briefs agreed, and the general awkwardness of the notion of supplying steps to reach its conclusion, (p. 26 (“it is difficult to conceive how one might supply or cause to be supplied all or a substantial portion of the steps in a patented method in the sense contemplated by section 271(f)”).) The court also distinguished how the Supreme Court drew on similarities between method and apparatus claims in Quanta Computer, Inc. v. LG Electronics, Inc., 128 S. Ct. 2109 (2008), in the context of patent exhaustion from how the Federal Circuit has drawn “a clear distinction between method and apparatus claims for purposes of infringement liability, which is what Section 271 is directed to.” (p. 23-24.)

The other aspects of the opinion were decided by the panel only. One issue was whether a change in claim construction of one term was enough to raise new issues regarding validity. “While it is true that a changed claim construction may permit new anticipation arguments, that cannot be the case here because the ‘determining’ limitation never served as a basis for distinguishing the prior art from the ’288 patent and is therefore not a ‘directly related new issue.’” (p. 11.)

Concerning damages, the court found that damages should be limited to only those devices that can be shown to have actually performed the method since only a method claimed remained. The fact that the defendant did not raise this argument at the time of trial did not result in a waiver because at that time an apparatus claim was still at issue. “St. Jude cannot have been expected to raise at trial an argument that would not have reduced damages until after Cardiac abandoned its apparatus claim on remand.” (p. 16.)

Monday, August 17, 2009

Callaway v. Acushnet

Golf balls were at the center of this case, which went to trial on the issue of invalidity. Infringement was stipulated to, the district court granted summary judgment of no anticipation, and the jury found that all but one of the claims—a dependent claim—were not obvious. The Federal Circuit reversed the district court regarding anticipation and remanded for a new trial on obviousness because the jury’s conclusions were irreconcilably inconsistent (since a dependent claim can’t be obvious if the claim from which it depends is not.)

The Federal Circuit agreed with the district court’s construction of the one claim term at issue on appeal. Notably, it relied in part on extrinsic evidence to support this conclusion in the form of testimony regarding accepted practice in the art. (p. 11 (“Such evidence of accepted practice within the art, when not at variance with the intrinsic evidence, is relevant to the question of how a person of skill in the pertinent field would understand a term.” ) (citing Phillips)).

The district court’s exclusion of evidence of a made-for-trial golf ball that was made by combining prior art elements was not in error. The Federal Circuit agreed that such evidence “ran a substantial risk of leading the jury towards the inappropriate use of hindsight and towards unduly weighting Acushnet’s arguments concerning motivation to combine the prior art.” (p. 18.)
The district court did not abuse its discretion by not allowing evidence of an ongoing inter partes reexamination. The Federal Circuit agreed that “non-final re-examination determinations were of little relevance to the jury’s independent deliberations on the factual issues underlying the question of obviousness” but that the risk of confusion was high. (p. 19.) Although the plaintiff had stated “that multiple patent examiners had reviewed the patents” but did not reveal that the asserted claims stood rejected by other examiners in its opening statement, the defendant failed to object at that time. Countering this statement was not a sufficient reason to allow the inter partes evidence in.

On the issue of inconsistent verdicts, Third Circuit law was applied. Because “a reading of the verdicts that would solve the apparent inconsistency proves impossible and the evidence might support either of the two inconsistent verdicts,” a new trial was necessary. (p. 23.)

The anticipation issue hinged on whether material was incorporated by reference into a prior art reference. On this issue of law, the Federal Circuit disagreed with the district court’s conclusion because the reference “identifies with specificity both what material is being incorporated by reference … and where it may be found.” (p. 27.)

Finally, although model golf balls designed to demonstrate obviousness were properly excluded, the Federal Circuit stated that a model golf ball for demonstrating the teachings of a prior art reference for the purposes of anticipation could be admissible if properly authenticated.

Friday, August 14, 2009

Wedgetail v. Huddleston

This opinion provides an overview of the circumstances in which the award of attorney fees under § 285 may be appropriate. The case must be exceptional, which the court reviews for clear error, and if it is, the district court determines whether attorney fees are appropriate, which is reviewed for abuse of discretion. (p. 3; 4 (providing numerous cases as examples).) Exceptional cases may be found in the following situations: “inequitable conduct before the PTO; litigation misconduct; vexatious, unjustified, and otherwise bad faith litigation; a frivolous suit or willful infringement.” (p. 3.) The Federal Circuit also stated that the district court need not necessarily provide its reasoning for its decision regarding attorney fees. In this case, the Federal Circuit determined that the lack of reasoning was at most harmless because the conclusion (no award of attorney fees) was supported by the record. (pp. 8-9.)

When To Determine Whether a Claim Is Indefinite

According to the standard for indefiniteness, whether a claim is invalid for indefiniteness would have to be determined at the time the claim is construed, not after. This is because the standard is whether the claim can be construed at all. See, e.g., Praxair, Inc. v. ATMI, Inc., 543 F.3d 1306, 1319 (Fed. Cir. 2008) (“A claim will be found indefinite only if it is insolubly ambiguous, and no narrowing construction can properly be adopted…. On the other hand, if the meaning of the claim is discernible, even though the task may be formidable and the conclusion may be one over which reasonable persons will disagree, we have held the claim sufficiently clear to avoid invalidity on indefiniteness grounds.”) (internal quotation marks and citations omitted); see also id. (“Indefiniteness is a matter of claim construction ….”).

Notwithstanding this standard, a defendant will often adopt the strategy of seeking a preferred construction and arguing that if the court adopts the patentee’s proposed construction the claim would be indefinite. And sometimes defendants will, after the court has construed the claims, argue that the adopted construction is indefinite. While the case law is not clear regarding the timing for deciding the issue of indefiniteness, the standard for indefiniteness should force defendants to decide early on, i.e., when proposing claim constructions, whether to pursue a defense of indefiniteness. A defendant should not be able to propose a definition for a term and later argue that the very same term is insolubly ambiguous. If a term can’t be construed, there should be no proposed construction for it. Therefore, a defendant should state its belief that a particular claim is indefinite when proposing constructions, and the court should decide this issue in the Markman ruling.

Hypothetical Claims for Determining Enablement

Determining Whether the “Full Scope” of Claims Is Enabled: The Need for Hypothetical Closed Claims

When assessing whether a patent has fulfilled the enablement requirement of section 112, it is the “full scope” of the claims that must be enabled. See Sitrick v. Dreamworks, LLC, 516 F.3d 993, 999 (Fed. Cir. 2008) (“The full scope of the claimed invention must be enabled.”). This standard, however, overstates the obligation for open-ended claims. Open-ended claims have, in theory, a virtually unlimited scope since they encompass anything that includes the limitations even if additional unclaimed features are also present. Therefore, it is not actually possible for the full scope of any open-ended claim to be enabled. There will always be an additional feature that would fall within the scope of the claim that the specification would never mention and would not be within the grasp of a person of ordinary skill in the art.

To be more precise, then, the enablement standard for open-ended claims should first assume that such claims are closed claims, and then determine whether the full scope of those hypothetical claims has been enabled. This would more accurately reflect the standard as applied in practice and would be the only realistic requirement that could be imposed on inventors.

Tuesday, August 11, 2009

Hyatt v. Doll

This opinion reviewed the history of 35 U.S.C. § 145, which allows a patent applicant to challenge the decision of the PTO in a district court proceeding (as an alternative to the more common path of seeking review in the Federal Circuit). At issue was whether evidence not introduced during the proceedings at the PTO could be considered by the district court. The applicant sought to have a declaration considered that he argued would have helped establish that the rejected claims met the written description requirement. The district court “excluded the Hyatt declaration because it found Hyatt had been ‘negligent’ in failing to submit it to the PTO during examination or in a timely manner to the Board on appeal.” (p. 11.) It then granted summary judgment that the claims were invalid for failure to meet the written description requirement. In a lengthy opinion, the Federal Circuit agreed with the district court on the issue of excluding the declaration and affirmed the grant of summary judgment.

In reaching its conclusion on “the issue of exactly what standard governs district courts in ruling on the admissibility of evidence withheld during examination in the PTO,” (p. 12), the Federal Circuit discussed the history of § 145, the Administrative Procedure Act (which it has held applies to actions under § 145 (p. 39)), and the “general practice of federal courts over eighty years” (p. 34). The court made clear both that there is no absolute rule against introducing new evidence in a § 145 action and that its decision was specific to the facts of this case. The applicant’s actions during prosecution appeared to weigh heavily in the decision, as the court noted in several ways: Noting that “On these facts…” the district court must be upheld (p. 50 (emphasis in original)), that the applicant “willfully refused to provide evidence in his possession in response to a valid action by the examiner” (p. 50), that the applicant exhibited “willful non-cooperation,” and concluding: “This blatant non-cooperation was willful. Allowing Hyatt to escape the consequences of his refusal to timely submit his own information to the PTO that he was required by law and requested by the examiner to submit would hardly be consonant with the APA or the legislative purpose of § 145.” (p. 51.)

In sum, the court found that in some circumstances, a district court may exclude new evidence in a § 145 action but made clear that it was not creating an absolute rule against ever admitting such evidence. “The dissent incorrectly describes our decision as promulgating a ‘sweeping exclusionary rule.’ We have not adopted a ‘sweeping’ or ‘per se rule.’ We express no opinion as to admissibility of evidence in the multitude of variegated factual scenarios that may arise in the future which the dissent claims are decided today.” (p. 55.)

Thursday, August 6, 2009

Bayer v. Barr Labs

This is a pharmaceutical case in which the drug formula at issue was found to be obvious to try. The drug was known in the art but an effective formulation for delivery had not been developed. There were two obstacles to oral delivery of the drug—its solubility and the potential for acid degradation in the stomach. Reducing particle size could increase the solubility but that might also cause the drug to isomerize more in the acidic stomach. An enteric-coated pill would help protect the drug from the acid in the stomach (but this process has drawbacks itself.) Bayer ultimately found that the solubility could be increased by reducing particle size and that with this solution the bioavailability of the drug was not impacted, with or without an enteric coating. (p. 5-6.) So Bayer developed a “normal pill” with reduced particle size but no enteric coating.

The court found that this solution would have been obvious to try and that the two circumstances when what was “obvious to try” does not make something invalid as obvious were not met. Those two circumstances are (1) when all the possibilities must be tried because the prior art provides no way of eliminating some and (2) when it was in general obvious to use some new technology but the results weren’t predictable. The court, citing In re O’Farrell, 853 F.2d 894 (Fed. Cir. 1988) and KSR, 550 U.S. 398 (2007), described these as follows: (1) “When what would have been ‘obvious to try’ would have been to vary all parameters or try each of numerous possible choices until one possibly arrived at a successful result, where the prior art gave either no indication of which parameters were critical or no direction as to which of many possible choices is likely to be successful an invention would not have been obvious.” (p. 9.) And (2) “A finding of obviousness would not obtain where what was ‘obvious to try’ was to explore a new technology or general approach that seemed to be a promising field of experimentation, where the prior art gave only general guidance as to the particular form of the claimed invention or how to achieve it.” (p. 9-10.)

The court, based on the teachings of the art, concluded that one of skill in the art would have been “funneled” to just two options (the normal pill that Bayer developed or the enteric-coated pill) and that the prior art “guided the formulator precisely to the use of either a normal pill or an enteric-coated pill.” (p. 15.)

Secondary factors were not mentioned.

Judge Newman dissented, focusing largely on the degree of certainty required for there to be a reasonable expectation of success.

Wednesday, August 5, 2009

Touchcom v. Bereskin & Parr

This case was decided on jurisdictional grounds. The plaintiff had hired a Canadian law firm to prosecute its patent and something went wrong along the way. The plaintiff is now attempting to sue the firm in the U.S. and the issue of personal jurisdiction was raised. The main question, and answer, is "whether the act of filing an application for a U.S. patent at the USPTO is sufficient to subject the filing attorney to personal jurisdiction in a malpractice claim that is based upon that filing and is brought in federal court. For the reasons discussed below, we conclude that it is." (p. 7.)

The issue of personal jurisdiction was determined under Fed. R. Civ. P. 4(k)(2), which provides for jurisdiction for a claim that arises under federal law but "the defendant is not subject to the jurisdiction of any state’s courts of general jurisdiction." (p. 12.) This rule applies when a defendant did not have sufficient contacts with any single state to confer jurisdiction but did have sufficient contacts with the U.S. as a whole. (p. 14.)

Applying this rule, the Federal Circuit concluded that the defendants did have sufficient contacts and the due process requirements were met so that personal jurisdiction would be appropriate under Rule 4(k)(2) (subject to a determination on remand that they are not subject to jurisdiction in any state).

Judge Prost dissented, agreeing with the majority's conclusion concerning Rule (4)(k)(2) and personal jurisdiction, but differing on the grounds that exercising personal jurisdiction would violate due process. (p. 26.)

University of Pittsburgh v. Hedrick

This case centers around a dispute over the inventorship of an adipose-derived stem cell that can differentiate into other cells. The dispute was not between competing groups but among different researchers in the same lab. The researchers who wished to be included as inventors had arrived after some of the work on the claimed invention had been completed but they argued that their contributions were essential. The Federal Circuit spent three pages construing the claims at issue (pp. 7-9.) Interestingly, the researchers who sought to be included as inventors argued for a narrower construction, not broader. In fact, they argued that the broader construction would include prior art. (p. 8.)

At first glance one might assume that those arguing to be additional inventors (not prior sole inventors) would not be arguing for a narrower scope of invention. But here they were claiming that the actual, patentable invention occurred later in time, after their arrival and their contribution. Since the broader possible scope was clearly conceived before that time, they presumably had to seek a construction for a narrower invention that could not be shown to have been invented earlier.

Another aspect of this case that is of some interest is that the Federal Circuit had to construe the claims before a determination of inventorship could be made. Although inventorship has always been based on the scope of the claims, this seems to make this determination less certain.

Exergen v. SAAT

This case involves infrared thermometers for taking people's temperature. The Federal Circuit reversed the jury's finding that one of the patents at issue was not invalid and reversed the jury's findings of infringement. It also affirmed the district court's denial of a motion to amend its pleadings to add allegations of inequitable conduct. So, as is not all that unusual, the case left the Federal Circuit in a much different posture than it was after trial (when the plaintiff had a $2.5 million judgment.)

Three points of note that I see here. First, before trial, the plaintiff waived any argument for infringement based on the doctrine of equivalents (p. 5), and it came back to haunt. (pp. 15 ("Exergen’s [argument], including its criticism of SAAT’s alleged ‘word-sniffing,’ is an argument sounding in the doctrine of equivalents—a doctrine ‘designed to do equity’ and ‘to relieve an inventor from a semantic strait jacket,’ but one which Exergen expressly waived before trial.").) This is often a tough call for a plaintiff to make. Arguing for infringement under the doctrine of equivalents weakens or at least confuses your literal infringement arguments. Plus, it is cumbersome and time consuming, so it is very tempting to just go for literal infringement, especially in light of all the hurdles placed in front of finding infringement under the doctrine of equivalents. However, as seen in this case, you can't be certain how things will go. That being said, it may well have still been the correct call in this case, depending on what obstacles were placed in front of the doctrine of equivalents.

The second part of this case of interest is the Federal Circuit's holding regarding pleading inequitable conduct. First, it stated that this issue was one of Federal Circuit law, not of the regional circuit. Then, it held that an allegation of inequitable conduct must be plead with particularity: "Based on the foregoing, and following the lead of the Seventh Circuit in fraud cases, we hold that in pleading inequitable conduct in patent cases, Rule 9(b) requires identification of the specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO." (p. 23.) Specifically, "although ‘knowledge’ and ‘intent’ may be averred generally, a pleading of inequitable conduct under Rule 9(b) must include sufficient allegations of underlying facts from which a court may reasonably infer that a specific individual (1) knew of the withheld material information or of the falsity of the material misrepresentation, and (2) withheld or misrepresented this information with a specific intent to deceive the PTO.” (pp. 24-25.) While not 100% clear on what needs to be included in the pleadings, it provides decent guideposts.

Finally, the court made some surprisingly strong statements about the arguments of plaintiff's counsel. (p. 17, n.2.)