The Federal Circuit reversed a dismissal for lack of declaratory judgment jurisdiction. This was a typical letter writing dance case, but the court recognized that its decision represented a shift from past cases, and also that declaratory judgment cases can be tricky. “[T]here is no bright-line rule for distinguishing those cases that satisfy the actual case-or-controversy requirement from those that do not. Our decision in this case undoubtedly marks a shift from past declaratory judgment cases.” (p. 9.)
The opinion included excerpts from the exchanged letters, which showed both parties were quite cognizant of the declaratory judgment issue. While noting that “MedImmune may have lowered the bar for determining declaratory judgment jurisdiction in all patent cases,” it made clear that more is required than just any communication regarding a patent: “a communication from a patent owner to another party, merely identifying its patent and the other party’s product line, without more, cannot establish adverse legal interests between the parties, let alone the existence of a ‘definite and concrete’ dispute. More is required to establish declaratory judgment jurisdiction.” (p. 5.)
With no history of litigation, the determining factor here appeared to revolve in large part around the patent owner’s status as a patent holding company. Relevant facts included that “the receipt of such correspondence from a non-competitor patent holding company . . . may invoke a different reaction than would a meet-and-discuss inquiry by a competitor, presumably with intellectual property of its own to place on the bargaining table. Under the totality of the circumstances, therefore, it was not unreasonable for HP to interpret Acceleron’s letters as implicitly asserting its rights under the [] patent.” In addition, the court “observe[d] that Acceleron is solely a licensing entity, and without enforcement it receives no benefits from its patents….” (p. 8.)
Other factors that played a role were that the patent owner asserted the patent as “relevant” to a specific product line, imposed a short deadline for a response, insisted the other party not file suit, and refused a standstill agreement. (p. 7.) The court also noted that “it is the objective words and actions of the patentee that are controlling,” not its actual state of mind. (p. 7.)
Friday, December 4, 2009
Thursday, December 3, 2009
Ultimax Cement v. CTS Cement
This case involves patents for rapid-hardening, high-strength cement. A few of the issues are discussed below.
Claim Construction
The Federal Circuit reversed the district court’s claim construction of “soluble CaSO4 anhydride” in part because it relied too heavily on a single dictionary definition divorced from the context of the claims and the specification. “[T]he [district] court erroneously relied on expert testimony and a single dictionary definition to the exclusion of other dictionary definitions and, most importantly, the context in which the term was used within the claim and the specification.” (p. 9.) The issue was whether “soluble CaSO4 anhydride” meant “a compound formed from an acid by removal of water” as the district court held or meant “soluble anhydrous calcium sulfate.” Because there was ambiguity in the dictionary definitions regarding what anhydride could mean, “the context must define what compound has had water removed. Here it is calcium sulfate, not an acid.” (p. 10.)
Laches
“An infringer does not escape liability merely by infringing in secret.” (p. 15.) Therefore, summary judgment of laches was not appropriate even though the accused product was available for 12 years because the patentee could not adequately test it until discovery. While 12 years is a long time, when “a claim limitation whose presence is undetectable in a finished product, it is reasonable that [patentee] might not have known or been able to find out whether [a product] infringed.” (p. 15.) Thus, there were genuine issues of fact, including whether the patentee had fulfilled its duty by hiring a private investigator.
Indefiniteness
“Merely claiming broadly does not render a claim insolubly ambiguous, nor does it prevent the public from understanding the scope of the patent.” (p. 19.) Thus, the fact that one formula in the claims may have covered 5000 variations did not render them indefinite because a person could fairly easily determine whether a given compound fell within the literal scope of the claims.
Correction of Typo
The district court refused to correct a typo (insertion of a comma) because, although the error was apparent to one of skill in the art, it was not “clear on the face of the patent.” The Federal Circuit clarified that such corrections can be made “if the correction is not subject to reasonable debate to one of ordinary skill in the art, namely, through claim language and the specification, and the prosecution history does not suggest a different interpretation, then a court can correct an obvious typographical error.” (p. 21.)
Claim Construction
The Federal Circuit reversed the district court’s claim construction of “soluble CaSO4 anhydride” in part because it relied too heavily on a single dictionary definition divorced from the context of the claims and the specification. “[T]he [district] court erroneously relied on expert testimony and a single dictionary definition to the exclusion of other dictionary definitions and, most importantly, the context in which the term was used within the claim and the specification.” (p. 9.) The issue was whether “soluble CaSO4 anhydride” meant “a compound formed from an acid by removal of water” as the district court held or meant “soluble anhydrous calcium sulfate.” Because there was ambiguity in the dictionary definitions regarding what anhydride could mean, “the context must define what compound has had water removed. Here it is calcium sulfate, not an acid.” (p. 10.)
Laches
“An infringer does not escape liability merely by infringing in secret.” (p. 15.) Therefore, summary judgment of laches was not appropriate even though the accused product was available for 12 years because the patentee could not adequately test it until discovery. While 12 years is a long time, when “a claim limitation whose presence is undetectable in a finished product, it is reasonable that [patentee] might not have known or been able to find out whether [a product] infringed.” (p. 15.) Thus, there were genuine issues of fact, including whether the patentee had fulfilled its duty by hiring a private investigator.
Indefiniteness
“Merely claiming broadly does not render a claim insolubly ambiguous, nor does it prevent the public from understanding the scope of the patent.” (p. 19.) Thus, the fact that one formula in the claims may have covered 5000 variations did not render them indefinite because a person could fairly easily determine whether a given compound fell within the literal scope of the claims.
Correction of Typo
The district court refused to correct a typo (insertion of a comma) because, although the error was apparent to one of skill in the art, it was not “clear on the face of the patent.” The Federal Circuit clarified that such corrections can be made “if the correction is not subject to reasonable debate to one of ordinary skill in the art, namely, through claim language and the specification, and the prosecution history does not suggest a different interpretation, then a court can correct an obvious typographical error.” (p. 21.)
Wednesday, December 2, 2009
Perfect Web v. Infousa
Asserted claims for a patent for “managing bulk e-mail distribution to groups of targeted consumers” were found to be obvious on summary judgment and the Federal Circuit affirmed (and did not address an alternative holding that the claims were directed to unpatentable subject matter under section 101.) The claims involved sending e-mail messages in bunches and continuing to send new batches out until a certain number of messages were successfully received. The parties agreed that the first three steps of the four step method were known, so the issue was whether the fourth step—repeating the first three until a quota was met—would have been obvious.
An initial issue, which the court discussed at some length, was what kind of evidence was required for “common sense.” Relying on KSR, it found that the common sense available need not be shown in a reference or through expert testimony: “We therefore hold that while an analysis of obviousness always depends on evidence that supports the required Graham factual findings, it also may include recourse to logic, judgment, and common sense available to the person of ordinary skill that do not necessarily require explication in any reference or expert opinion.” (p. 9.) However, for summary judgment, “to invoke ‘common sense’ or any other basis for extrapolating from prior art to a conclusion of obviousness, a district court must articulate its reasoning with sufficient clarity for review.” (p. 10.)
Applying this standard to the case at hand, the court found that the district court adequately explained its reasoning in concluding that common sense would have rendered the claims obvious. It found that the “last step, and the claim as a whole, simply recites repetition of a known procedure until success is achieved.” (p. 10.) Further, because of the nature of the claims, “[n]o expert opinion is required to appreciate the potential value to persons of such skill in this art of repeating [the first three] steps.” (p. 10.)
The patentee’s argument that the patent met a long-felt need were rejected, in part because it “provided no evidence to explain how long this need was felt, or when the problem first arose.” (p. 15.)
The court also found that the claimed solution would have been obvious to try because the evidence showed that there were “at most a few potential solutions for this problem at the time” of the invention. (p. 12.)
An initial issue, which the court discussed at some length, was what kind of evidence was required for “common sense.” Relying on KSR, it found that the common sense available need not be shown in a reference or through expert testimony: “We therefore hold that while an analysis of obviousness always depends on evidence that supports the required Graham factual findings, it also may include recourse to logic, judgment, and common sense available to the person of ordinary skill that do not necessarily require explication in any reference or expert opinion.” (p. 9.) However, for summary judgment, “to invoke ‘common sense’ or any other basis for extrapolating from prior art to a conclusion of obviousness, a district court must articulate its reasoning with sufficient clarity for review.” (p. 10.)
Applying this standard to the case at hand, the court found that the district court adequately explained its reasoning in concluding that common sense would have rendered the claims obvious. It found that the “last step, and the claim as a whole, simply recites repetition of a known procedure until success is achieved.” (p. 10.) Further, because of the nature of the claims, “[n]o expert opinion is required to appreciate the potential value to persons of such skill in this art of repeating [the first three] steps.” (p. 10.)
The patentee’s argument that the patent met a long-felt need were rejected, in part because it “provided no evidence to explain how long this need was felt, or when the problem first arose.” (p. 15.)
The court also found that the claimed solution would have been obvious to try because the evidence showed that there were “at most a few potential solutions for this problem at the time” of the invention. (p. 12.)
In Re Hoffmann-La Roche Inc.
The Federal Circuit has once again granted a petition for writ of mandamus and directed a district court (in the Eastern District of Texas) to transfer a patent case to another district. The court had taken basically the same action in similar circumstances recently in both In re Genentech, Inc., 566 F.3d 1338 (Fed. Cir. 2009) and In re TS Tech USA Corp., 551 .3d 1315, 1322 (Fed. Cir. 2008).
Novartis, a California company, brought a patent infringement suit against defendants with facilities primarily in North Carolina (where the accused product was developed). They moved to transfer the case to the Eastern District of North Carolina and the motion was denied. The Federal Circuit found that there was a “there is a stark contrast in relevance, convenience, and fairness between the two venues” and concluded that the district court’s denial was an abuse of discretion under 5th Circuit law. (p. 5.) Applying these factors, the court found that there was virtually no connection to the Eastern District of Texas. It gave no weight to a “tactic” in which documents related to the patent were transferred to plaintiff’s counsel in Texas. (p. 5-6.)
The court found that “the Eastern District of North Carolina’s local interest in this case remains strong because the cause of action calls into question the work and reputation of several individuals residing in or near that district and who presumably conduct business in that community” and that this interest is “self-evident.” (p. 5, 6.) In contrast, the court again noted that “the sale of an accused product offered nationwide does not give rise to a substantial interest in any single venue.” (p. 8.)
Novartis, a California company, brought a patent infringement suit against defendants with facilities primarily in North Carolina (where the accused product was developed). They moved to transfer the case to the Eastern District of North Carolina and the motion was denied. The Federal Circuit found that there was a “there is a stark contrast in relevance, convenience, and fairness between the two venues” and concluded that the district court’s denial was an abuse of discretion under 5th Circuit law. (p. 5.) Applying these factors, the court found that there was virtually no connection to the Eastern District of Texas. It gave no weight to a “tactic” in which documents related to the patent were transferred to plaintiff’s counsel in Texas. (p. 5-6.)
The court found that “the Eastern District of North Carolina’s local interest in this case remains strong because the cause of action calls into question the work and reputation of several individuals residing in or near that district and who presumably conduct business in that community” and that this interest is “self-evident.” (p. 5, 6.) In contrast, the court again noted that “the sale of an accused product offered nationwide does not give rise to a substantial interest in any single venue.” (p. 8.)
Thursday, November 19, 2009
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.
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.
Tuesday, November 10, 2009
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.
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.
Tuesday, November 3, 2009
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.
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.
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