Iovate Health Sciences v. Bio-Engineered Supplements

The court affirmed the district court’s finding of anticipation of method claims directed toward “the use of nutritional supplements containing [certain ingredients] to enhance muscle performance or recovery from fatigue.” (p. 3.) These claims were anticipated by advertisements for nutritional supplements in a magazine that were published before the critical date.

The claims required administering a composition of a combination of supplements. The ad disclosed this combination. The patentee sought to avoid anticipation by arguing that the ad did not disclose administering an effective amount and did not disclose anything specific about enhancing muscle performance or recovering from fatigue as recited in the preamble. The court rejected these arguments, noting that the claims do not require an effective amount and that the ad’s disclosure general concepts of muscle “recuperation” and “post-workout recovery” encompass performance and fatigue.

The patentee also argued that the ads might not be enabling because the ads “lack any guidance on appropriate ingredient dosages.” (p. 9-10.) However, a person of ordinary skill in the art “would have been able to determine such an amount based on the ad and the knowledge in the art at the time.” The patent specification itself disclosed “numerous pre-1996 publications that teach acceptable clinical dosages of the” claimed ingredients. (p. 10.)

The court decided the case based on the ad being a printed publication. The majority opinion did not consider use or on sale grounds were also sufficient for anticipation. (See p. 5 (“While the district court’s decision and the parties’ arguments discuss three of the grounds listed in § 102(b)—printed publication, public use, and on sale—we need affirm the district court’s decision on only a single ground….”).) In a concurring opinion, Judge Mayer noted that the “the products were on sale more than one year before the critical date.” Assuming this is a reference to the ads, then the claimed method would have to have been on sale. See NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1320 (Fed. Cir. 2005) (“a method claim may be invalid if an offer to perform the method was made prior to the critical date”); see also Scaltech, Inc. v. Retec/Tetra, LLC, 269 F.3d 1321, 1328 (Fed. Cir. 2001) ("The on sale bar rule applies to the sale of an 'invention, 'and in this case, the invention was a process, as permitted by § 101. As a result, the process involved in this case is subject to § 102(b)."); Plumtree Software, Inc. v. Datamize, LLC, 473 F.3d 1152, 1162 (Fed. Cir. 2006). While it seems clear that the printed publication taught the claimed method, whether that method was on sale is a more difficult question.

Bilski v. Kappos--Oral Argument

During oral argument for the Bilski case, the justices seemed to be seeking guidance on how to put forth a rule that excludes patents for business methods of the sort at issue but leaves open the possibility that a legitimate invention would be patentable even if it fell outside of the Federal Circuit’s machine-or-transformation test. In other words, how can patent-eligible subject matter be reigned in from the extremes the Court fears it can reach (horse training, teaching antitrust law, the alphabet) without cutting off some great invention of the future that does not rely on any machine or a transformation of matter? (E.g., JUSTICE SOTOMAYOR: “So help us with a test that doesn't go to the extreme the Federal Circuit did, which is to preclude any other items, something we held open explicitly in two other cases, so we would have to backtrack and say now we are ruling that we were wrong, and still get at something like this?”)

Another concern of the Court seemed to be the loophole in the machine test that was left unresolved in the proceedings below—whether simply having the otherwise ineligible process performed on a computer lifts an invention into patent eligibility. (E.g., CHIEF JUSTICE ROBERTS: “If you develop a process that says look to the historical averages of oil consumption over a certain period and divide it by 2, that process would not be patentable. But if you say use a calculator, then it -- then it is?”)

The Court seemed to, despite its efforts, lapse into conflating the issues of patent eligible subject matter and patentability based on novelty and nonobviousness, as some of the examples posited suggested. (E.g., JUSTICE KENNEDY: “But you know, the insurance industry -- the insurance business, as we know it, really began in England in 1680, when they discovered differential calculus, and they had expectancy and actuarial tables, actuarial for life, expectancy for shipping, and this really created a whole new industry. In your view, I think, clearly those would be patentable, the -- the explanation of how to compile an actuarial table and -- and apply it to risk. That certainly would be patentable under your view, and it's -- it's difficult for me to think that Congress would want to -- would have wanted to give only one person the capacity to issue insurance.”)

The Court seemed to be legitimately grappling with the issues, but one firm statement stood out: JUSTICE SOTOMAYOR: “No ruling in this case is going to change State Street.” It will be interesting to see if that holds true.

Imation v. Philips

Imation brought a declaratory judgment action seeking to have two of its subsidiaries declared to be licensed to a patent under its agreement with Philips. The license agreement, between Philips and what became Imation, granted a license to Imation and its subsidiaries. Imation acquired the two subsidiaries in question after the expiration date of the agreement. The issues were whether they qualified as subsidiaries under the agreement and whether the granting of the license was a present grant or an agreement to grant (additional) licenses in the future.

Applying Eighth Circuit procedural law and New York contract law, the Federal Circuit reversed the district court’s ruling that the two subsidiaries were not licensees under the agreement. First, it found that the agreement provided a “singular, present grant,” relying on the language “agrees to grant and does hereby grant” and prior cases. (p. 9-10, emphasis in original.) Therefore, the grant took place before the expiration date provided in the agreement. Second, it found that the definition of “Subsidiary” in the agreement included the two subsidiaries at issue even though they did not exist at the time of the grant. Just as a license may include a present grant of rights to future inventions, so that the pool of patents could grow, the court found that
“the ‘Subsidiary’ definition allows class membership to grow (or shrink) over time, and so the non-existence of GDM and Memorex at the time of the license grant did not prevent either entity from receiving the benefits of the fully vested licenses.” (p. 10.)

The opinion can be found here.