Review of Recently Decided
Patent Cases
Robert Neuner, Esq.
6th Annual Patent Law Institute
February 16 – 17, 2012
Board of Trustees of the Leland Stanford Junior University v.
Roche Molecular Systems, Inc. et al., 563 U.S. ____ (2011)
•
This case involved the interpretation of two competing assignments
executed before the invention was conceived or reduced to practice. In the
earlier assignment between one of the inventors and Stanford Junior
University, the inventor (Dr. Holidniy) “agree[d] to assign” to Stanford the
inventions he made during the course of his employment by Stanford. In
the latter assignment, the same inventor agreed to assign and “do hereby
assign” to Cetus (Roche’s predecessor) the inventions and improvements
on those inventions he made as a result of the information imparted to him
by Cetus.
•
The Federal Circuit concluded that once the invention came into existence,
the “do hereby assign” language trumped the earlier Stanford agreement
because this language operated automatically to vest title in Roche. The
Supreme Court agreed, stating that the Bayh-Dole Act, 35 U.S.C. §§ 200 et
seq, did not automatically divest inventors of their rights in inventions
conceived or reduced to practice with the help of federal funds. The dissent
questioned whether in respect of inventions made in the future, there is a
difference in the legal significance of the “do hereby assign” and “hereby
agree to assign” undertakings.
Global-Tech Appliances Inc. v. SEB S.A.
131 S.Ct. 2060 (2011)
Section 271(b) of the Patent Act, 35 U.S.C., states: “Whoever
actively induces improvement of a patent shall be liable as an
infringer.”
• After parsing the words of the statute, the Supreme Court held that
“induced infringement under §271(b) requires knowledge that the
induced acts constitute patent infringement.” While rejecting the
deliberate indifference test that had theretofore been adopted by the
Federal Circuit, the Court nonetheless affirmed the judgment of the
Court of Appeals because the evidence had established a case of
willful blindness to a known risk of patent infringement. “A willfully
blind defendant is one who takes deliberate actions to avoid
confirming a high probability of wrongdoing and who can almost be
said to have actually known the critical facts.”
• The fryer copied by Pentalpha was an overseas model of SEB's
fryer. Pentalpha knew that the product it was designing was for the
U.S. market. Mr. Sham, a named inventor on numerous U.S.
patents, was well aware that products made for overseas markets
usually did not bear U.S. patent markings.
• Even more telling was Sham's decision not to inform the attorney
from whom Pentalpha sought a right-to-use opinion that the product
to be evaluated was simply a knockoff of SEB's deep fryer. The
court could not fathom what motive Sham could have had for
withholding this information from his attorney other than to
manufacture a claim of plausible deniability in the event that his
company was later accused of patent infringement. Sham's
testimony on this subject failed to provide any reason to doubt that
inference. Asked whether the attorney would have fared better had
he known of SEB's design, Sham was nonresponsive. All he could
say was that a patent search is not an “easy job” and that is why he
hired attorneys to perform them.
Microsoft Corp. v. i4i Ltd. Partnership,
131 S.Ct. 2238 (2011)
The Supreme Court ratified the Federal Circuit’s interpretation of 35 U.S.C.
§282 that:
[Section] 282 creates a presumption that a patent is valid and imposes the burden of
proving invalidity on the attacker. That burden is constant and never changes and is
to convince the court of invalidity by clear evidence.
The Court left open the question of how juries should be charged when the
prior art evidence varies from that before the PTO, but offered these
suggestions:
we note that a jury instruction on the effect of new evidence can, and when
requested, most often should be given. When warranted, the jury may be instructed
to consider that it has heard evidence that the PTO had no opportunity to evaluate
before granting the patent. When it is disputed whether the evidence presented to
the jury differs from that evaluated by the PTO, the jury may be instructed to consider
that question. In either case, the jury may be instructed to evaluate whether the
evidence before it is materially new, and if so, to consider that fact when determining
whether an invalidity defense has been proved by clear and convincing evidence.
Mayo Collaborative Servs. V. Prometheus Labs, Inc.,
No. 10-1150
The following is an illustrative claim:
1. A method of optimizing therapeutic efficacy for treatment of an
immune-mediated gastrointestinal disorder, comprising:
(a) administering a drug providing 6-thioguanine to a subject
having said immune-mediated gastrointestinal disorder; and
(b) determining the level of 6-thioguanine in said subject having
said immune-mediated gastrointestinal disorder,
wherein the level of 6-thioguanine less than about 230 pmol
per 8x108 red blood cells indicates a need to increase the amount of
said drug subsequently administered to said subject and
wherein the level of 6-thioguanine greater than about 400 pmol
per 8x108 red blood cells indicates a need to decrease the amount
of said drug subsequently administered to said subject.
• The Federal Circuit found the claimed treatment and diagnostic
method patentable because they transformed (1) the human body
by administration of a drug and (2) the bodily sample itself by using
purification and analytical tests to determine the drug metabolite’s
concentration in the body. Indeed, the court found that methods of
treatment are “always transformative when a defined group of drugs
is administered to the body to ameliorate the effects of an undesired
condition.”
• The Federal Circuit explained that when claims recite administering
drugs to a subject, transformation necessarily occurs because the
“drugs do not pass through the body untouched without affecting it,”,
but rather transformation occurs as seen by “the effect on the body
after metabolizing the artificially administered drugs.” Addressing
the “natural phenomenon” arguments, the Federal Circuit stated,
“Transformations operate by natural principles. The transformation
here, however, is the result of the physical administration of a drug
to a subject to transform – i.e., treat the subject, which is itself not a
natural process.”
• With regard to claims that did not recite an “administering” step, the
Federal Circuit found that the “determining” step also was
transformative and central to the claimed methods. Specifically, the
Federal Circuit found that determining the metabolite levels
“necessarily involves transformation” because such levels “cannot
be determined by mere inspection.” For example, physical
manipulation and measurement must occur (e.g., by high-pressure
liquid chromatography (HPLC) or other methods that involve
transforming bodily samples). The Federal Circuit concluded that
the “determining” step was not merely data-gathering, but rather
central to the purpose of the claims because “[m]easuring the
[metabolite] levels…is what enables possible adjustments to…drug
dosage.” The Federal Circuit concluded that “[t]he determining step,
by working a chemical and physical transformation on physical
substances, likewise sufficiently confines the patent monopoly, as
required by Bilski.”
Caraco Pharm. Labs., Ltd. V. Novo Nordisk A/S,
No. 10-844
This case involves the construction of a section of the HatchWayman Act, 21 U.S.C. §355(j)(5)(C)(ii)(1) that authorizes a generic
manufacturer in a Paragraph IV infringement action to assert a
counterclaim challenging the accuracy of the patent information
submitted to the FDA on the grounds that the patent does not claim
either (aa) the drug for which the application was approved; or (bb)
an approved method of using the drug.
•
Novo Norkisk’s patent claims only one of the three approved methods of
using PRANDIN (i.e., repaglinide in combination with metformin) to treat
type 2 diabetes. Caraco submitted an ANDA asserting that Caraco was not
seeking approval for the method claimed by Novo’s patent. The FDA
indicated that it would approve Caraco’s proposed drug label carving out the
Novo method. Novo then asked the FDA to broaden Novo’s use code
narrative for its patent so that it would no longer be specific to the one
method claimed by Novo. The FDA did so and then rejected Caraco’s
carve-out label. Without the carve out, Caraco’s product would infringe
Novo’s patent. Caraco counterclaimed, alleging that the new use code
narrative was overbroad because it improperly suggested that Novo’s
patent covered all three approved methods of using repaglinide to treat type
2 diabetes. Novo asserted that the counterclaim is available only if its
patent does not claim any approved methods. Caraco argued that it is
entitled to the counterclaim because Novo’s patent does not claim two of
the approved methods of PRANDIN use. In other words, Novo reads “an
approved method” in the counterclaim statute as “any approved method”
while Caraco reads it as “all approved methods.”
•
The Federal Circuit detected no ambiguity in the statutory language. When
an indefinite article is preceded and qualified by a negative, standard
grammar generally provides that “a” means “any.” It concluded then that
the Hatch-Waxman Act authorizes a counterclaim only if the listed patent
does not claim any approved methods of using the listed drug.
•
The court also noted that the Act, by its terms, does not allow generic manufacturers
to counterclaim unless the listed patent bears no relation to the listed drug and the
terms of the counterclaim provision do not authorize an order compelling the patent
holder to change its use code narrative. The counterclaim provision states that a
generic manufacturer can request an order compelling “the holder to correct or delete
the patent information submitted by the holder under subsection (b) or (c).” 21 U.S.C.
§ 355(j)(5)(C)(ii)(l) (emphasis added). Subsection (b) requires a pioneering
manufacturer to submit “the patent number and the expiration date of any
patent…which claims a method of using such drug.” 21 U.S.C. § 355(b)(1)
(emphasis added). Subsection (c) states that “[i]f the patent information described in
subsection (b) of this section could not be filled with the submission of an application,”
the holder “shall file with the Secretary the patent number and the expiration date of
any patent…which claims a method of using such drug.” 21 U.S.C. § 355(c)(2)
(emphasis added).
•
Thus, the court views the Act as defining the term “patent information” as “the patent
number and the expiration date.” The reference in subsection (c) to “the patent
information described in subsection (b)” could only mean the patent number and the
expiration date, because no other “patent information” appears in the statute.
Therefore, to maintain consistency in the statutory terms, “the patent information” in
the counterclaim provision must also mean the patent number and the expiration
date. Thus, the counterclaim provision only authorizes suits to correct or delete an
erroneous patent number or expiration date. The authorization does not extend to
the use code narrative.
•
In a lengthy dissent, Circuit Judge Dyk disagreed with the majority, both in its
statutory construction and the scope of the expression “patent information.”
Kappos v. Hyatt, No. 10-1219
Section 145 of the Patent Act allows a patent applicant dissatisfied
with a decision of the Board of Patent Appeals and Interference to
sue the Director of the United States Patent and Trademark Office in
the District Court for the District of Columbia for an order overturning
that decision and authorizing the Director to issue a patent on the
patent applicant’s invention.
The questions that the Supreme Court has agreed to
consider are:
(1) whether a plaintiff who files a civil action in
federal district court against the Director of the
United States Patent and Trademark Office (“PTO”)
pursuant to 35 U.S.C. § 145 may introduce new
evidence that could have been presented to the
PTO; and
(2) whether, if the plaintiff is allowed to introduce new
evidence under Section 145, the district court may
decide de novo the factual questions to which the
evidence pertains, without giving deference to the
PTO’s decision.
• An en banc Federal Circuit majority concluded that there is no
limitation on an applicant’s right to introduce new evidence in district
court (apart from the evidentiary limitations applicable in all civil
actions) and that the district court may consider whether the new
evidence is inconsistent with any evidence or proceedings before
the PTO in determining what weight to give it. The majority
additionally held that if the applicant does not introduce new
evidence that was not before the PTO, the district court should apply
the Administrative Procedure Act’s deferential “substantial evidence”
standard.
• Circuit Judge Newman concurred as to the holding that an applicant
may introduce new evidence in the district court, but dissented from
the holding that if an applicant does not introduce new evidence, the
“substantial evidence” standard of review should be applied.
Instead, Judge Newman argued that the district court should decide
the case de novo.
• Circuit Judges Dyk and Gajarsa dissented, arguing that a Section
145 proceeding allows only for introduction of live testimony that
was presented in written form in the PTO and not to any other new
evidence. Further, the dissent argued that the deferential
“substantial evidence” standard applies in all Section 145 cases.
Federal Circuit Decisions – Inequitable Conduct
Therasense Inc. v. Becton Dickinson and Co.
99 USPQ2d 1065 (Fed. Cir. 2011)
• As to the intent element, the court held that in a case involving
nondisclosure of information, clear and convincing evidence must
show that “the applicant made a deliberate decision to withhold a
known material reference.” In other words, the accused infringer
must prove by clear and convincing evidence that the applicant
knew of the reference, knew that it was material, and made a
deliberate decision to withhold it. Proving that the applicant knew of
a reference, should have known of its materiality, and decided not to
submit it to the PTO does not prove specific intent to deceive.
Stated differently, the fact that information later found material was
not disclosed cannot, by itself, satisfy the deceptive intent element of
inequitable conduct.
• The evidence “must be sufficient to require a finding of deceitful
intent in the light of all the circumstances.” Hence, when there are
multiple reasonable inferences that may be drawn, intent to deceive
cannot be found. Whenever evidence proffered to show either
materiality or intent is susceptible of multiple reasonable inferences,
a district court clearly errs in overlooking one inference in favor of
another equally reasonable inference.
• As to the materiality element, the court held that as a general matter,
the materiality required to establish inequitable conduct is but-for
materiality. When an applicant fails to disclose prior art to the PTO,
that prior art is but-for material if the PTO would not have allowed a
claim had it been aware of the undisclosed prior art. Hence, in
assessing the materiality of a withheld reference, the court must
determine whether the PTO would have allowed the claim if it had
been aware of the undisclosed reference. In making this
patentability determination, the court should apply the
preponderance of the evidence standard and give claims their
broadest reasonable construction.
• The court also recognized an exception to the “but-for
proof of materiality.” It is where the patentee has
engaged in affirmative acts of egregious misconduct,
such as the filing of an unmistakably false affidavit. The
court stated:
By creating an exception to punish affirmative egregious acts
without penalizing the failure to disclose information that would
not have changed the issuance decision, this court strikes a
necessary balance between encouraging honesty before the
PTO and preventing unfounded accusations of inequitable
conduct.
Contempt Proceedings
Ti Vo, Inc. v. EchoStar Corp.
646 F.3d 869 (Fed. Cir. 2011) (en banc)
• As to procedure, the court overruled its own decision in KSM
Fastening Sys., Inc. v. H.A. Jones Co., 776 F.2d 1522, 1530-32
(Fed. Cir. 1985), which had crafted a special rule for patent
infringement cases. That rule required a threshold inquiry on the
propriety of initiating a contempt proceeding. Here, the court
concluded that this inquiry confused the merits of the contempt with
the propriety of initiating contempt proceedings. As a practical
matter, district courts do not separately determine the propriety of a
contempt proceeding before proceeding to the merits of the
contempt itself. As a result, the court telescoped the current twofold KSM inquiry into one, eliminating the separate determination
whether contempt proceedings were properly initiated. That
question, it held, is left to the broad discretion of the trial court to be
answered based on the facts.
•
As to the burden of proof borne by the patent owner, the court stated that
the party seeking to enforce the injunction must prove both that the newly
accused product is only colorably different from the product found to infringe
and that the newly accused product actually infringes. Instead of focusing
solely on infringement, the contempt analysis must focus initially on the
differences between the features relied upon to establish infringement and
the modified features of the newly accused products.
•
The analysis must focus not on differences between randomly chosen
features of the product found to infringe in the earlier infringement trial and
the newly accused product, but on those aspects of the accused product
that were previously alleged to be, and were a basis for, the prior finding of
infringement, and the modified features of the newly accused product.
Specifically, courts should focus on those elements of the adjudged
infringing products that the patentee previously contended, and proved,
satisfy specific limitations of the asserted claims. Where one or more of
those elements previously found to infringe has been modified, or removed,
the court must make an inquiry into whether that modification is significant.
If those differences between the old and new elements are significant, the
newly accused product as a whole shall be deemed more than colorably
different from the adjudged infringing one, and the inquiry into whether the
newly accused product actually infringes is irrelevant. Contempt is then
inappropriate.
Infringement of Method Claims Involving
Multiple Entities
• The Federal Circuit is now considering en banc two cases which
pose the issue of infringement of method claims when a step of the
method is performed by an entity that is not controlled or directed by
the entity that performs the other steps.
• In the first case, Akamai Techs, Inc. v. Limelight Nets., Inc., 629
F.3d 1311 (Fed. Cir. 2010), the court presented the following
question for briefing:
If separate entities each perform separate steps of a method
claim, under what circumstances would that claim be directly
infringed and to what extent would each of the parties be liable?
• In the second case, McKesson Technologies Inc. v. Epic Systems
Corp., 98 USPQ2d (Fed. Cir. Apr. 12, 2011), the court presented the
following questions for briefing:
1.
If separate entities each perform separate steps of a method
claim, under what circumstances, if any, would either entity or
any third party be liable for inducing infringement or for
contributory infringement? See Fromson v. Advance Offset
Plate, Inc., 720 F.2d 1565 (Fed. Cir. 1983).
2.
Does the nature of the relationship between the relevant
actors – e.g., service provider/user; doctor/patient – affect the
question of direct or indirect infringement liability?
• During the oral argument, Judge Newman remarked that
since sections 271(b) and (c) of the Patent Act were
intended to broaden the remedy for patent infringement,
no excessive restrictions should be read into 271 (a) in
the absence of an overriding policy. In regard to the
possible application of sections 271 (b) and (c) to
multiple infringement situations, Judge Moore indicated
that perhaps when Congress enacted 271(b) and (c), it
did not mean to speak to where each party has
performed some steps of a method claim, but rather to
the circumstances where a party has performed none of
the steps.
Document Preservation in Patent Cases
It is settled law that the duty to preserve evidence first
attaches when litigation becomes “reasonably
foreseeable.” It necessarily follows and is equally well
settled that there is an independent duty to preserve
evidence during ongoing litigation.
• To the latter obligation in Eon-Net L.P. v. Flagstar Bancorp, 635
F.3d 1314 (Fed. Cir. 2011), the Federal Circuit upheld an award of
attorney’s fees to the defendant under 35 U.S.C. § 285 based in part
on the defendant’s failure to preserve evidence. As found by the
district court, Eon-Net and its counsel destroyed relevant documents
prior to the initiation of its lawsuit against Flagstar and that Eon-Net
intentionally did not implement a document retention plan. As
recounted by the district court, Eon-Net's principal testified with
regard to document retention, collection, and production that “I don't
save anything so I don't have to look” and further testified that EonNet and Millennium “have adopted a document retention policy
which is that we don't retain any documents” because those
companies have “evolved into patent enforcement companies which
are involved in the business of litigation.” Pursuant to this policy, in
2003, Eon-Net discarded all documents from Millennium's
infringement action against Readsoft involving the Patent Portfolio,
even though Millennium had other pending cases. Eon-Net’s lawyer
asserted on appeal that, after the Readsoft case settled, he only
“discarded publicly available documents and non-essential
documents such as travel-related receipts” and retained “all material
non-public documents.” The court found it impossible to determine
the veracity of this statement. And, even if the lawyer’s assertions
were true, it is undisputed that Eon-Net had an independent duty to
preserve evidence during the ongoing lawsuits.
• As to the reasonable foreseeability of litigation standard, the Federal
Circuit issued twin opinions in Micron Tech. Inc. v. Rambus Inc., 645
F.3d 1311 (Fed. Cir. 2011) and Hynix Semiconductor Inc. v.
Rambus Inc., 645 F.3d 1336 (Fed. Cir. 2011) in which the court
concluded that the duty to preserve documents in the flexible one of
reasonably foreseeable litigation, broader than those situations
where the litigation is imminent or probable without significant
contingencies and that Rambus had violated its duty to preserve
evidence.
• First, the court explained that although document destruction may
occur in the general course of a business “which may include a
general concern for the possibility of litigation,” it was not clear error
for the District of Delaware to find that the reason for Rambus’
document destruction was to further Rambus’ litigation strategy by
frustrating the fact-finding efforts of parties adverse to Rambus. The
court pointed to several actions taken by the company to support
this finding, such as the fact that Rambus had instituted its
document retention policy to make the company explicitly “battle
ready,” had told employees to selectively keep “helpful documents,”
and decided to keep back-up files for a shorter time than originally
planned.
The Model Order on E-Discovery in Patent Cases
Adopted by the Advisory Council
of the Federal Circuit
As introduced by Chief Judge Rader at the Federal District of Texas
Judicial Conference on September 27, 2011, the Model Order
provides:
• Exchange of core documentation: The parties begin by
exchanging initial disclosures and documents concerning the
patents at issue, the prior art, the accused instrumentalities and
relevant finances. [iii]
• E-mail: After the initial exchange of core documentation, the parties
may request limited e-mail discovery focused on specific issues.
• Each request shall name the custodian, search terms and date
range. The parties must cooperate to identify the proper scope.
• Each requesting party shall limit the scope to five (5) custodians
per producing party and five (5) narrowly tailored search terms
per custodian.
• Cost-shifting: The parties can agree to expand the scope of
custodians, but the requesting party pays at its own expense for this
information. The Court may shift costs for disproportionate ESI
requests pursuant to FRCP 26 or any dilatory discovery tactics. The
Court will also consider a party’s compliance with the Order and its
efforts to cooperate and contain costs.
• Metadata: The production shall not include metadata, except for the
date and time a document was sent or received and the distribution
list.
• Privilege: The inadvertent production of attorney-client
communication or work product protected ESI will not be a waiver in
the pending cases or any other proceeding following Federal Rule of
Evidence (FRE) 502(d).
Public Law 111-349 January 4, 2011,
Patent Cases Pilot Program
• Public Law 111-349 establishes a pilot program in certain United
States district courts to encourage the enhancement of expertise in
patent cases among district judges. The Administrative Office of the
U.S. Courts selected 14 district courts to carry out the program. The
participating courts are: Southern and Eastern District of New York;
the Central, Northern and Southern Districts of California; the
Eastern, Northern and Western Districts of Texas; the Western
District of Pennsylvania; the Northern District of Illinois; the Southern
District of Florida; the District of New Jersey; the District of
Maryland; and the District of Nevada.
• Patent cases filed in the Southern District of New York will still be
randomly assigned to all district judges, but a judge who is assigned
a patent case and is not among the designated judges to hear
patent cases has 30 days to decide whether to keep or decline the
case, and if a case is declined, it then will be randomly assigned to
one of the nine judges who has opted in to the program.
• The judges involved with the program are U.S. District Judges P.
Kevin Castel, Denise Cote, Thomas Griesa, John Koeltl, Colleen
McMahon, Jed Rakoff, Shira Scheindlin, Laura Taylor Swain and
Robert Sweet.
Permanent Injunctions in Patent Cases
•
Prior to the Supreme Court’s decision in eBay Inc. v.
MercExchange, L.L.C.,547 U.S. 388, the Federal Circuit had
followed the rule that absent a good reason not to, a permanent
injunction will issue once infringement and validity had been
adjucated. In eBay, the Supreme Court overruled Federal Circuit
precedent, holding that a patentee seeking a permanent injunction
must demonstrate entitlement to a permanent injunction by making
a four-part showing:
1.
2.
3.
4.
that is has suffered an irreparable injury;
that remedies available at law, such as monetary damages,
are inadequate to compensate for that injury;
that, considering the balance of hardships between the plaintiff
and the defendant, a remedy in equity is warranted; and
that the public interest would not be disserved by a permanent
injunction.
• The Federal Circuit applied the eBay ruling in Robert Bosch LLC v.
Pylon Mfg. Corp, Case No. 2011-1096 (Fed. Cir. October 13, 2011)
and concluded that an injunction was appropriate. It said:
While eBay may have changed the analytical approach to
permanent injunctions, “it does not swing the pendulum the other
way,” and that “it does not follow that courts should entirely
ignore the fundamental nature of patents as property rights
granting the owner the right to exclude.” As to the facts of the
Bosch case, the court noted that the patentee need not prove the
existence of a two-supplier market to establish irreparable harm.
This is particularly true where the patent owner has been diligent
in pursuing the defendant and other infringers. Second, “the fact
that an infringer’s harm affects only a portion of a patentee’s
business says nothing about whether that harm can be rectified.”
Nor can a party escape an injunction simply because it is smaller
than the patentee, or because its primary product is an infringing
one.” On this issue, the fact that the defendant competes in
markets where the patent owner also competes is highly relevant
and tends to establish irreparable harm.
Patentable Subject Matter
Association for Molecular Pathology v. U.S.P.T.O.
99 USPQ2d 1398 (Fed. Cir. 2011)
(request for rehearing en banc denied)
• For more than a decade, it had been the policy of the U.S.P.T.O.
that “[a]n isolated and purified DNA molecule that has the same
sequence as a naturally occurring gene is eligible for a patent
because … that DNA molecule does not occur in that isolated form
in nature….” 66 Fed. Reg. 1092, 1093 (Jan. 5, 2001). The explicit
statement of the Patent Office's position on isolated DNA, however,
is simply a continuation of a longstanding and consistent policy of
allowing patents for isolated natural products. Since the early
1980’s, the Patent Office has granted patents to human genes, and
has issued thousands of patents on “isolated DNA.” In fact, claims
involving gene sequences at issue have been the focal point of
important litigation.
• That policy and history were ratified by the Federal Circuit in this
case. The court held as follows:
Composition claims directed to “isolated” gene sequences (BRCA1
and BRCA2), and mutations in those sequences associated with
predisposition to breast and ovarian cancers, are drawn to
patentable subject matter under 35 U.S.C. §101, even though
isolated DNAs retain the same nucleotide sequence, or
informational properties, as “native” DNAs, since it is distinctive
nature of DNA molecules as isolated compositions of matter that
determines their patent eligibility, rather than their physiological use
or benefit, since genes are materials having chemical nature and, as
such, are best described in patents by their structures rather than
their functions, and since claimed DNA molecules are distinct from
their natural existence as portions of larger entities, and their
informational content is irrelevant to that fact;
Claims directed to methods of “comparing” or “analyzing” “isolated”
gene sequences (BRCA1 and BRCA2) with normal sequences to
identify cancer-predisposing mutations fail the “machine-ortransformation” test by claiming only abstract mental processes, and
claims thus are not drawn to patentable subject matter under 35
U.S.C. §101, since claims recite nothing more than abstract mental
steps necessary to compare two different nucleotide sequences,
since restricting comparison solely to BRCA genes or to
identification of particular alterations does not render claimed
process patent-eligible. Since the claims do not apply the step of
comparing two nucleotide sequences in any larger process, and
since additional steps of “extracting” DNA from sample and
“sequencing” BRCA DNA molecule cannot be read into claims so as
to render them transformative; claims do not include step of
“determining” sequence of BRCA genes or any other necessarily
transformative step, since comparison between two sequences can
be accomplished by mere inspection alone.
A claim directed to a method for screening potential cancer
therapeutics via changes in cell growth rates satisfies “machine-ortransformation” test and thus is drawn to patentable subject matter
under 35 U.S.C. §101, since the claim recites transformative steps
of “growing” host cells transformed with altered BRCA1 gene in
presence of absence of potential cancer therapeutic, “determining”
growth rate of host cells with or without potential therapeutic, and
“comparing” growth rate of host cells, since claim thus includes more
than abstract mental step of looking at two numbers and
“comparing” two host cells' growth rates, since such steps are
central to purpose of claimed process, and since claim is not so
“manifestly abstract” as to claim only scientific principle, in that it
does not preempt all uses of natural correlation, and presents
“functional and palpable applications” in field of biotechnology.
Cyber Source Corp. v. Retail Decisions, Inc.
99 USPQ2d 1690 (Fed. Cir. 2011)
• Two types of method claims were involved in this case. Each was
written broadly and each purports to encompass any method for
detecting credit card fraud which utilizes information which relates
credit card transactions to particular internet addresses, as opposed
to billing addresses and personal identification information.
The claims read as follows:
3. A method for verifying the validity of a credit card transaction
over the Internet comprising the steps of:
a) obtaining information about other transactions that have
utilized an Internet address that is identified with the [ ] credit
card transaction;
b) constructing a map of credit card numbers based upon the
other transactions and;
c) utilizing the map of credit card numbers to determine if the
credit card transaction is valid.
2.
A computer readable medium containing program instructions for detecting
fraud in a credit card transaction between a consumer and a merchant over the
Internet, wherein execution of the program instructions by one or more processors of
a computer system causes the one or more processors to carry out the steps of:
a)
obtaining credit card information relating to the transactions from the
consumer; and
b)
verifying the credit card information based upon values of plurality of
parameters, in combination with information that identifies the consumer, and
that may provide an indication whether the credit card transaction is fraudulent,
wherein each value among the plurality of parameters is weighted in the verifying
step according to an importance, as determined by the merchant, of that value to
the credit card transaction, so as to provide the merchant with a quantifiable
indication of whether the credit card transaction is fraudulent,
wherein execution of the program instructions by one or more processors of a
computer system causes that one or more processors to carry out the further
steps of;
a)
obtaining information about other transactions that have utilized an Internet
address that is identified with the credit card transaction;
b)
constructing a map of credit card numbers based upon the other transactions;
and
c)
utilizing the map of credit card numbers to determine if the credit card
transaction is valid.
•
A unanimous court of appeals found both patent claims to be drawn to
patent-ineligible subject matter. As explained by Judge Dyk, with respect to
the method of claim 3 simply requires one to “obtain and compare intangible
data pertinent to business risks.” The mere collection and organization of
data regarding credit card numbers and Internet addresses is insufficient to
meet the transformation prong of the test, and the plain language of claim 3
does not require the method to be performed by a particular machine, or
even a machine at all.
•
Of greater interest is the court’s discussion of claim 2 which recites a socalled “Beauregard claim” directed to a computer readable medium
containing program instructions for a computer to perform a particular
process. Here, the court essentially rewrote the claim to find it directed to
an abstract idea. The court looked to the underlying invention for patenteligibility purposes. It then concluded that the invention underlying both
claims 2 and 3 is a method for detecting credit card fraud, not a
manufacture for storing computer-readable information, and one could
mentally perform the fraud detection method that underlies both claims 2
and 3 of the ′154 patent, as the method consists of only the general
approach of obtaining information about credit card transactions utilizing an
Internet address and then using that information in some undefined manner
to determine if the credit card transaction is valid. Because claims 2 and 3
attempt to capture unpatentable mental processes (i.e., abstract ideas),
they are invalid under § 101.
Ultramercial LLC v. Hulu LLC
100 USPQ2d 1140 (Fed. Cir. 2011)
• This is a case involving a business method patent. As summarized
by Chief Judge Rader, the patent does not simply claim the age-old
idea that advertising can serve as currency. Instead the patent
discloses a practical application of this idea. The patent claims a
particular method for monetizing copyrighted products, consisting of
the following steps: (1) receiving media products from a copyright
holder, (2) selecting an advertisement to be associated with each
media product, (3) providing said media products for sale on an
Internet website, (4) restricting general public access to the media
products, (5) offering free access to said media products on the
condition that the consumer view the advertising, (6) receiving a
request from a consumer to view the advertising, (7) facilitating the
display of advertising and any required interaction with the
advertising, (8) allowing the consumer access to the associated
media product after such display and interaction, if any, (9)
recording this transaction in an activity log, and (10) receiving
payment from the advertiser.
• Judge Rader found the claim not so manifestly abstract that it
overrode the statutory language of Section 101. According to the
court, “[I]nventions with specific applications or improvements to
technologies in the marketplace are not likely to be so abstract that
they override the statutory language and framework of the Patent
Act.” The patent-in-suit seeks to remedy problems with prior art
banner advertising, such as declining click-through rates, by
introducing a method of product distribution that forces consumers
to view and possibly even interact with advertisements before
permitting access to the desired media product. By its terms, the
claimed invention purports to improve existing technology in the
marketplace. By its terms, the claimed invention invokes computers
and applications of computer technology. Of course, the
patentability of the patent, though acknowledged by the U.S. Patent
Office, would still need to withstand challenges that the claimed
invention does not advance technology (novelty), does not advance
technology sufficiently to warrant patent protection (obviousness), or
does not sufficiently enable, describe, and disclose the limits of the
invention (adequate disclosure).
Domestic Industry in 337 Cases
John Mezzalinqua Associates, Inc. v. U.S. International
Trade Commission, 100 USPQ2d (Fed. Cir. 2011)
• In order to seek relief under Section 337 of the Tariff Act
for patent infringement, a complainant must demonstrate
that a domestic industry “relating to the articles protected
by the patent…exists or is in the process of being
established.” One of the ways a complainant can
demonstrate the existence of a domestic industry is by
showing substantial investment in the exploitation of the
patent, including engineering, research and development
or licensing.
• In this case, the Federal Circuit considered whether litigation
expenses incurred in enforcing a patent may be used as evidence
that the required domestic industry exists.
• The Federal Circuit agreed with the Commission that “expenditures
on patent litigation do not automatically constitute evidence of the
existence of an industry in the United States.” In doing so, the court
concurred with the Commission’s conclusion that “allowing patent
infringement litigation activities alone to constitute a domestic
industry would place the bar for establishing a domestic industry so
low as to effectively render it meaningless.” Thus, the court declined
to adopt a per se rule that patent infringement litigation is an
investment in the exploitation of a patent within the meaning of
Section 337(a)(3)(C).
• However, the Federal Circuit agreed with the Commission that the
domestic industry requirement can be satisfied if a complainant is
able to demonstrate a “nexus” between its litigation expenses and
licensing.
• The Federal Circuit also found that the complainant’s activities were
insufficient to demonstrate substantial investment in “engineering,
research and development.” The complainant had argued that
research and development relating to a utility patent on the same
product as protected by the asserted design patent should have
been considered as part of the domestic industry.
• In his dissent, Judge Reyna thought that the majority took an unduly
narrow view of what types of activities relate to licensing of a patent.
His position is that “a patent right is…empty without the ability to
meaningfully enforce it against infringers.” Accordingly, he would
have concluded that “litigation undertaken to enforce patent rights
and enhance the value of a patent or pave the way for a stronger
competitive advantage constitutes an investment in exploitation
under section 337(a)(3)(C), regardless of that activity’s relationship
to licensing, engineering, research, or production.”
Intervening Rights
Marine Polymer v. Hencon
Fed. Cir. No. 2010-1548, En Banc
• Pursuant to 35 U.S.C. § 252, an alleged infringer may continue its
infringement of a reissued patent where the reissued clams are
different from the originally issued claims. It may not do so when the
claims are identical. Likewise, under the reexamination statute, 35
U.S.C. § 307(b), alleged infringers are granted the same intervening
rights as are provided in Section 252.
• The question in this case is whether the narrowing of identical
claims by attorney argument in a reexamination proceeding creates
an intervening rights defense. In its earlier decision, a divided
Federal Circuit panel concluded that it did. According to the dissent,
the plain language of the statute intervening rights apply only to new
or amended claims.