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.
Friday, August 21, 2009
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.)
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.
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.
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.
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.)
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.)
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