Archive for March, 2010

Gene Patents Declared Invalid, For Now

March 30, 2010

Well, Judge Sweet has done what many had feared (hoped?) and teed up the gene patenting case for the Federal Circuit.  In a 156 page opinion issued yesterday, he ruled that, as a matter of law, the patents directed to “isolated DNA” are directed to non-patentable subject matter and are invalid under 35 U.S.C. § 101.  Similarly, claims related to methods of “comparing” or “analyzing” DNA sequences are abstract ideas and are likewise unpatentable under § 101.

Regarding the “isolated DNA” claims, the court ruled as follows:

[T]he clear line of Supreme Court precedent and accompanying lower court authorities . . . establishes that purification of a product of nature, without more, cannot transform it into patentable subject matter.  Rather, the purified product must possess “markedly different characteristics” in order to satisfy the requirement of § 101.

The court rejected all of Myriad’s arguments that isolated DNA is indeed markedly different from native DNA in the body and thus invalidated the isolated DNA claims.

For the method claims, the court relied on Bilski‘s machine-or-transformation test to invalidate the claims.  The court dismissed many of Myriad’s arguments regarding the transformative nature of the claims by holding that they were merely data gathering steps. 

The court did struggle a bit more with the claim directed to comparing the growth rate of cells in the presence or absence of a potential cancer therapeutic, but ultimately concluded that it was likewise invalid.

The court did dismiss the plaintiffs’ constitutional claims against the PTO and also did not rule on the constitutional claims against Myriad, citing the doctrine of constitutional avoidance.  When a court can rule on a statutory issue to provide the desired relief, it should refrain from ruling on a related constitutional issue.

The court recognizes that this decision will not stop the PTO from issuing claims of similar ilk to isolated DNA and methods of analyzing and comparing the DNA.  It seems to believe, however, that it will be affirmed by the Federal Circuit and perhaps the Supreme Court thus putting an end to these “evil” patents.

Make no mistake about it.  The ACLU only got involved in this case because it expects to take it to the Supreme Court.  The first step, however, is the Federal Circuit.  I agree with Patently-O and others that suggest the case will be reversed by the Federal Circuit and set up a potentially epic battle at the Supreme Court that could have enormous consequences to the biotechnology industry in the US.  As far as Federal Circuit review, this decision flies in the face of too many of that court’s and its predecessor’s precendents.  The Supreme Court is a bit more of a wild card.

Despite Low Participation, PTO Set to Expand Peer-to-Patent Program

March 29, 2010

In a somewhat bizzare announcement last week, PTO Director David Kappos announced that the PTO is set to expand the Peer-to-Patent Program that has not been accepting new applications for about 9 months.  At a speech at New York Law School, Director Kappos described the program as having gone “extraordinarily well.”

As previously noted, the pilot program accepted new applications for two years in several art units mainly related to computer architecture, software, business methods, and e-commerce.  As of the second anniversary report (released near the date that the program went on hiatus), 187 applications were involved in the program, nearly half coming from a single company.  The program was set up to accept the first 400 patent applications that wished to participate.  Examiners were using submitted prior art at a rate of about 27%, i.e., about 27% of the “10 best” prior art submissions from the program were used in office actions.

The program was designed to submit the 10 best pieces of prior art to the patent examiner at the PTO.  Director Kappos noted that 600 pieces of prior art were generated for the 187 applications.  While some applications received multiple citations, “a few dozen” didn’t get any at all.  Kappos attributed that to the fact that most patent applications are not major breakthroughs and that the PTO has not provided sufficient marketing of the program to the general public.

Due to the program’s overwhelming success, according to Kappos, the biggest challenge to the PTO is finding ways to expand the program.  He believes that some companies are reluctant to submit comments and prior art on pending applications due to the threat of willful infringement.  He is working with Congress on this issue in the pending patent reform bills.

The main problem with this is that companies do not have an incentive to spend time reviewing and submitting prior art and comments on pending applications.  Most reviewers spent an average of two hours reviewing applications and submitting prior art.  Patent applicants would need stronger incentives to participate, such as the chance to move up in the examination queue or the like.  Reviewers may also need to be incentivized with a small reward to increase participation.

I understand that Kappos’s previous employer, IBM, was a proponent of the project.  It is really not clear to me, however, how a program that is this small and that had such meager participation, given that it didn’t reach any of its intial numbers goals, can be viewed as a success and as worth additional investment by the PTO at this time.

Federal Circuit Disregards Claim Preamble in Holding Claim Invalid as Anticipated

March 25, 2010

On Monday, the Federal Circuit continued the confusion surrounding the law on how to interpret the preamble of a claim.  The court decided, in a 2-1 decision, that the preamble of the claim in Marrin v. Griffin was not entitled to any patentable weight.  The court’s opinion and the dissent are full of conflicting case citations as to whether the preamble should ever be entitled to patentable weight.

The patent at issue in the case, 5,154,448, related to using a scratch-off label to mark beverage containers and cups so that attendees of a gathering or party could keep track of their beverage cups.  The claim at issue read as follows:

1. A scratch-off label for permitting a user to write thereon without the use of a marking implement, comprising:

a permanent base having a colored near side which is normally visible to the user and having a far side; and

a coating of scratch-off non-transparent material having a color which contrasts with the color of the near side of the permanent base, which coating is applied directly onto the near side of the permanent base with sufficient thickness so as to obscure the color of the permanent base, and which when scratched off reveals the color of the near side of the permanent base.

It was apparently not disputed by the parties that the claim limitations in the body of the claim were shown in the prior art.  The key aspect of the invention was that the label permitted the user to write on the label without the use of a writing implement.  For example, the user could use a fingernail, coin, keys, or the like to mark the label thereby distinguishing the drink from those of others.

In the original application as filed, claim 1 read as follows:

1. A scratch off marking label, comprising:

(a) a layer of scratch off non-transparent coating, and;

(b) a permanent base layer of such color so as to contrast with said scratch off coating;

(c) said scratch off coating being applied directly onto said permanent layer of contrasting color, whereby upon scratching through of said scratch off coating reveals the contrasting color of said permanent layer in legible lines, thereby providing a writing means whereby a person can mark on the label without the need for a writing implement.

After the claim was allowed, the applicant filed an amendment to change the claim to the one that issued.  There is a disagreement between the majority opinion and the dissent as to the purpose of this amendment.  The majority indicates that the applicant argued that “writing means” is not an element of the claim and was therefore canceled.  The dissent argued that the applicant merely indicated that no specific writing means was required.  In reality, the applicant may have been trying to avoid a “means-plus-function” claim interpretation by removing the “means” limitation.

In any event, the majority of the court affirmed the claim’s invalidity as being anticipated by the prior art.  The court held that the preamble merely stated a “purpose or intended use” of the invention.  The dissent, by contrast, argued that the preamble should be given patentable weight because it breathed “life and meaning” into the claim.  Both opinions cited a great deal of Federal Circuit and Court of Customs and Patent Appeals precedent to support its position.

So, who is right?  The answer, of course, is that the side for invalidating the claims garnered the 2 necessary votes.  Thus, the outcome of the case.

What Should the Patentee Have Done?

This case is another in a long line of recent Federal Circuit cases that instruct patent applicants how to write better patent applications and claims.  This application was apparently prosecuted pro se.  As they say, the applicant got what it paid for.

Due to confusion as to claim preamble interpretation, the safer route is to include all claim limitations in the body of the claim.  One wonders whether there is any point including anything in the preamble other than “an apparatus,” “a device,” “a method,” or perhaps in this case “a label.”

I don’t know whether this invention is obvious or not as they issue was not before the court.  The specification is rather skimpy on details.  The patentee’s best option would have been to bring the invention to a patent attorney who could have written a more substantial application.

There are, of course, numerous ways that the claim could have been written that would have satisfied the court’s problem in this case.  By working with the claim in the patent, one option that might have worked is:

1. A label comprising:

a permanent base having a colored near side which is normally visible to the user and having a far side; and

a coating of non-transparent material having a color which contrasts with the color of the near side of the permanent base, which coating is applied directly onto the near side of the permanent base with sufficient thickness so as to obscure the color of the permanent base, and which coating may be scratched off without a marking implement to reveal the color of the near side of the permanent base.

Federal Circuit Holds That Patent Act Includes Separate Written Description Requirement

March 22, 2010

Today, the Federal Circuit finally released its long-awaited opinion in Ariad Pharmaceuticals, Inc. v. Eli Lilly and Co.  In a 9-2 decision, the court chose to follow Judge Lourie’s interpretation of the statute from his earlier opinions in Enzo and Rochester in holding that the statute does include a written description requirement separate from the enablement requirement.

The Statute

As noted previously, the statute as written is not a model of clarity and has been subject to multiple interpretations.

The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.

The court, in an opinion written by (surprise, surprise) Judge Lourie, opens its opinion by noting that even Ariad seems to argue that the statute has two requirements.  First, the inventor must describe what the invention is.  Second, he must describe how to make and use it.  Of course some might argue that it is the claims that describe what the invention is.

The court seems to argue that the statute is not ambiguous and that its interpretation is clear from the language (even Judge Gajarsa who joins that majority disagrees with that). 

History and Stare Decisis

Next, the court argues that the Patent Act has historically contained a separate written description requirement.  Congress knew this when it enacted the 1952 Patent Act.

The court next turns to stare decisis and argues that Supreme Court precedent going back to the 1850’s dictates the outcome in this case.  Most recently, the Supreme Court acknowledged the written description requirement in Festo:

[T]he patent application must describe, enable, and set forth the best mode of carrying out the invention. These latter requirements must be satisfied before issuance of the patent, for exclusive patent rights are given in exchange for disclosing the invention to the public. What is claimed by the patent application must be the same as what is disclosed in the specification; otherwise the patent should not issue. The patent also should not issue if the other requirements of § 112 are not satisfied.

According to the court, a separate written description requirement is not inconsistent with the purpose of a patent’s claims.

Claims define and circumscribe, the written description discloses and teaches.

New Matter

The Patent Act in § 132 also contains a prohibition against adding “new matter” to a patent application or claims during prosecution.  “New matter” generally refers to disclosure that was not in the original application as filed. 

Albeit in dicta, the court indicates that § 132 is a mere “examiner’s instruction.”  By this, the court means that the new matter prohibition is not a basis on which a patent may be invalidated.  Instead, § 132 is merely for use during prosecution of the patent.  Section 112’s written description requirement, on the other hand, can be used as a basis for invalidating an issued patent.

The Test

The court seemed to have a bit of difficulty in articulating the test for whether a patent has complied with the written description requirement.  The court referred to the inquiry as a question of fact.

[T]he test requires an objective inquiry into the four corners of the specification from the perspective of a person of ordinary skill in the art. Based on that inquiry, the specification must describe an invention understandable to that skilled artisan and show that the inventor actually invented the invention claimed.

 The inquiry sounds suspiciously similar to the enablement requirement that varies depending on the context.  The court did note that the description requirement does not require actual examples or reduction to practice.

Ariad argued that universities and others that conduct basic research will be disadvantaged by this new rule.  The court responded that the Patent Act was not intended to grant patents to new academic theories, but rather to applications of such research.

Judge Newman

Judge Newman (normally a dissenter) joined the court’s opinion, but also wrote separately “because the real issue of this case is too important to be submerged in rhetoric.”  She argued that rather than focusing on the statute that the policy of patents is better served with a separate written description requirement.  Such a requirement preserves the quid pro quo of the patent system:  in return for a patent, the patentee must provide a written description of the invention.

Judge Gajarsa

Judge Gajarsa filed a concurring opinion where he argued that the text of the statute “is a model of legislative ambiguity.”  He believes that reasonable people can differ on the statutory language, but in the end it comes down to much ado about nothing.  He cites several empirical studies that conclude that a separate requirement will have little effect on patents.

Judge Rader

Judge Rader filed a dissenting opinion.  He argued that the statutory language is perfectly clear and does not contain a written description requirement separate from the enablement requirement.  Next, he argued that the only time a written description requirement was previously discussed by the courts, it was in the context of whether a patent was properly supported by a parent application.

Judge Rader argued that the issue is really about claim construction.  If the court would not interpret claims more broadly than they are described in the specification, there would be no need for a separate written description requirement.

Judge Linn

Judge Linn also dissented.  He argued that the only purpose of a written description has been to police new matter issues.  There is no need for a separate requirement as the enablement requirement adequately meets the needs of the patent system.

Judge Linn further criticized the court’s test for the written description requirement.  If it is an objective test, it should be a legal rather than factual inquiry.  The test seems to be too similar to the enablement requirement to justify a separate test. 

Judge Linn completely disagreed with the court’s reading of prior patent statutes and Supreme Court opinions as setting forth a separate written description requirement.  Finally, he argued that it does not make sense that the original claims of a patent application can violate the written description requirement.  By definition, they are a part of the original description.

Lesson From the Court

The court provides another lesson on application drafting in this case.  It is important that all claims be supported by the specification.  The PTO will generally enforce this issue for new claims (new matter).  For original claims, the easiest way to accomplish this is to include the actual claim langauge in paragraph form in the specification itself.

New Paper Suggests Cooperative Patent Prosecution

March 19, 2010

My wife, Kristen Osenga, is a law professor at the University of Richmond School of Law.  She writes in the area of patent law and has recently written a paper about a different way to look at claim construction using linguistics.  She concludes that claim construction would be improved if there were more cooperation between the inventor and the Patent Office and provides some suggestions to increase cooperation.  Here is a link to the paper and the abstract:

Conversation is easy. We communicate with other people every day without giving conscious thought as to how we understand the information exchanged in the course of the conversation. Patents, by contrast, are hard. Understanding information conveyed by a patent is difficult, despite deliberate and conscious efforts to shape or improve the process. Scholars have not yet seen the connection between the two concepts. We have not viewed patents as conversation – but perhaps we should. Viewing patents as conversations allows us to tap into a rich body of scholarship from the pragmatics branch of linguistics – the study of language and how we understand it – and turn traditional wisdom about interpretation of patents on its head. Understanding patents can be as easy as having a conversation. What needs to change is not the interpretation process, but rather the conversation itself. The key difference between everyday conversation and patents is the lack of cooperation in patent prosecution, the conversations that give rise to patents. If we can create a greater air of cooperation in the patent acquisition process, then we can rely on linguistics to help understand what is being conveyed. We can make interpretation of patents much more like understanding everyday conversation – easy.

Feel free to leave me any comments you might have or e-mail her.  Also, the paper represents her personal thoughts and opinions and does not represent my views nor those of my clients or my law firm.

Request for En Banc Rehearing on Induced Infringement

March 17, 2010

Last month, the Federal Circuit issued its latest opinion on induced infringement.  Instead of clarifying a complicated area of patent law, the American Intellectual Property Law Association (AIPLA) and the Federal Circuit Bar Association argue that the opinion muddied the waters further.  The groups have filed an amicus brief requesting that the court rehear the case en banc to issue guidance on induced infringement.

In the brief, the groups argue that the court has issued a number of opinions that include confusing and contradictory legal tests on the issues of induced infringement.  They argue that in a 1990 Federal Circuit decision, Hewlett-Packard, the court “articulated a standard suggesting that one need only show a specific intent to cause the acts that infringed without an intent to encourage a legal wrong.”  In another 1990 decision, Manville Sales, a different panel “announced a test requiring knowledge of the acts giving rise to infringement and of the infringement itself.”

In 2006, the Federal Circuit itself noted the confusion between the two cases and chose to follow the Manville Sales case.  The groups argue that this has not helped because the decision in Manville Sales itself is not clear.

Manville’s formulation of the inducement test has, however, contributed to the uncertainty because it simultaneously refers to a heightened “specific intent” to encourage infringement and to another level of intent – “knew or should have known” – when referring to awareness of infringement[.]

The SEB case further illustrates the lack of clarity as to the state of mind required for induced infringement.

During the discussion of the culpable state of mind requirement for inducement, the panel appeared to acknowledge, at different points, authority supporting specific intent, negligence (“knew or should have known”), and recklessness constructs such as “deliberate indifference.”

The panel further suggested that constructive knowledge of the patent may be sufficient in some circumstances and gave mixed signals on the specific intent requirement set forth in Manville.  The panel seemed to indicate that the specific intent required in these situations is not high.

Finally, the brief sets forth a number of questions that the groups indicate should be resolved by the full court.

• Is the required culpable state of mind an objective or subjective inquiry, or both?

• Is the required culpable state of mind regarding the wrongfulness of the acts negligence, recklessness, intent or something else?

• If the test is “knew or should have known,” and some kind of duty exists, what is the scope of that duty and when is it implicated?

• Is a reasonable belief that the patent is invalid or unenforceable a defense to induced infringement?

• What is the difference between the mental state required for willfulness and the mental state required for induced infringement?

• Is knowledge of the patent required, and, if not, what is the standard to prove “constructive knowledge”?

The groups do not at this time take a position on these questions, but recognize that this issue is ripe for review by the court.  There is a need for clarity as to the type of behavior and state of mind that constitutes good commercially competitive activity and what constitutes induced infringement.

Another Federal Circuit Opinion on the Dangers of Late Application Filing

March 17, 2010

Last week, the Federal Circuit affirmed an invalidity ruling that a patent was invalid as violating the on-sale bar.  In Delaware Valley Floral Group Inc. v. Shaw Rose Nets, LLC, the inventor’s own deposition testimony was used against him to invalidate his patent.

The patent at issue in the case relates to a process that produces larger rose heads.  The application for the patent was filed January 16, 1996, and issued June 16, 1998. 

When the patent owner answered interrogatories posed by the plaintiffs in the case, he averred that he invented and first sold a product that used his process in “August/September 1995.”  A short time later during his deposition, the patent owner instead testified 18 times that he invented the process in 1994.  He explained that the interrogatory answer had been a typo.  His testimony was that he developed the invention in May 1994.  He also testified that he started commercially exploiting roses grown by the process in September 1994.  Uh oh.

The plaintiffs moved for summary judgment of invalidity based on this testimony.  The patent owner now had to work hard to try to undo his deposition testimony.  He filed a declaration from an employee testifying to a 1995 invention and sale date and an errata sheet to change his deposition testimony to 1995. 

The district court granted the motion for summary judgment.  Frankly, the court did not believe the inventor’s evidence regarding the 1995 date.  The inventor did not equivocate in his deposition testimony.  The court held that the employee’s declaration lacked foundation as the employee did not have personal knowledge of the dates and the errata sheet was denied as untimely, as the Federal Rules of Civil Procedure permit only 30 days to correct deposition testimony.

The Federal Circuit affirmed.

I have mentioned a few times before the dangers of waiting to file a patent application.  This case is a good example of why filing earlier is better.  Had the inventor filed an application–even a provisional application–in 1995 instead of waiting until January 1996, his patent could have been saved.  Instead, his patent may have been infringed (the court never decided this issue), and he experienced an expensive and lengthly lawsuit only to find out that his patent was worthless.  File early, file often.

Another Bill Impacting Patent Reform

March 12, 2010

Last week, we learned that the Senate Judiciary Committee had reached a compromise on a number of issues and had reached the point where they introduced an updated version of the bill (S. 515).  Presumably, the Committee is seeking to get the bill to the Senate floor for debate and believes, based on the compromises, that it has the votes to pass.

Earlier this week, Sen. Mary Landrieu (D-LA), chair of the Senate Committee on Small Businesses and Entrepreneurship, introduced a new bill (S. 3089) that would require the Small Business Administration to conduct a study of the effects the proposed changes to the patent law would have on small businesses.  She wants to determine whether the changes would hinder small businesses and independent inventors, particularly the change from a first-to-invent to a first-to-file system.

She further noted that small businesses represent 99.7% of employers and employ one-half of the US labor force.  Small businesses in the technology sector produce 13 times more patents per employee than large businesses.  The new bill is styled the Small Business Patent Data Collection Act of 2010.

It doesn’t make a lot of sense to have a study of the effects of proposed legislation after it has passed and gone into effect.  It seems unlikely that Congress would reverse itself and undo the change to something as drastic as this at a later date.  This could signal that Sen. Landrieu and perhaps others are not yet ready to support the Senate’s patent reform bill.

Kathleen O’Malley Officially Nominated to Federal Circuit

March 11, 2010

Yesterday, the White House officially announced that Judge Kathleen O’Malley has been nominated to the vacant seat on the Federal Circuit.  Her biographical information was briefly covered last week.

In one respect, Judge O’Malley will be a first on the Federal Circuit.  The current court is made up of two former in-house corporate attorneys, two former Senate attorneys, one former member of the Solicitor General’s office, one former law professor, three members who were most recently in private practice prior to their nominations, and two former judges on the Court of Claims.  Indeed, the Federal Circuit has never had a former district court judge as a member.  Thus, Judge O’Malley should bring a fresh, new perspective to the court.

Throughout its history, the majority of Federal Circuit judges have come from either private practice (9) or government attorney positions (10), such as counsel to the Senate, the Attorney General’s office, or the solicitor’s office.  The closest the court has had to actual trial judges are former Judge Philip Nichols who was a judge on the Customs Court and current Judges Robert Mayer and Randall Rader who served as judges on the Claims Court.

Hal Wegner questions whether her perspective may change the court’s often-criticized jurisprudence of de novo review on claim construction rulings from district courts.  Under the Federal Circuit’s Cybor case from 1998, the court gives no deference to such rulings.  As a result, the court has a reversal rate of 30-50% on this issue.

Of further note is that after Judge Jean Bissell was nominated by President Reagan in May 1984, 12 male judges were nominated to the court before Judge Sharon Prost was nominated by President Bush in May 2001.  Judge O’Malley is now the third straight woman to be nominated to the court.  When confirmed, she will join Judges Newman, Prost, and Moore to comprise a third of the court’s membership.

Kathleen O’Malley: Next Federal Circuit Judge?

March 5, 2010

Hal Wegner is reporting that District Judge Kathleen McDonald O’Malley is being vetted by the Obama Administration to fill Judge Alvin Schall’s seat on the Federal Circuit.  Judge Schall took senior status in October.  Hal cites to a report in The Reporter, a California legal news source.

Judge O’Malley was appointed to the district court for the Northern District of Ohio by President Clinton in 1994.  Prior to that, she had worked in the Ohio Attorney General’s office and as a litigator at several law firms including Jones Day.

Biographical information on Judge O’Malley is available here.

While Judge O’Malley is not a patent attorney, she does have experience in patent litigation.

Judge O’Malley is a frequent lecturer and panelist on topics involving patent litigation, use of technology in the courtroom, multi-district litigation and mass torts. Among many other programs, Judge O’Malley is a regular faculty member at the Intellectual Property Seminar for Federal Judges co-sponsored by the Federal Judicial Center and the Berkeley Center for Law and Technology, and at ALI/ABA’s annual “Trial of a Patent Case” program. 

Judge O’Malley is a Visiting Distinguished Jurist at Case Law School in Cleveland where she teaches patent litigation.  She is also a member of the University of Maryland Law School’s Intellectual Property Advisory Board.


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