9/21/2015
1
LL.M. in Intellectual
Property
21-25 September 2015
Professor Craig Allen Nard
Galen J. Roush Professor of Law
Director, Spangenberg Center for Law, Technology & the Arts
Case Western Reserve University
Some Opening Quotes
2
“The patent system added the fuel of interest to the fire of genius”
-Abraham Lincoln (1859)
“If we did not have a patent system, it would be irresponsible, on the
basis of our present knowledge of its economic consequences, to
recommend instituting one. But since we have had a patent system for a
long time, it would be irresponsible, on the basis of our present
knowledge, to recommend abolishing it.”
- Fritz Machlup (1958)
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The Course Road Map
3










History & Economics of Patent Law
Obtaining Patent Rights and the Patent
Document
Claiming and Disclosing the Invention
Statutory Subject Matter & Utility
Novelty
Non-Obviousness
Statutory Bars
Enforcing Patent Rights
Defenses
© C. Nard - Fall 2015 - Law of Patents
Remedies (lecture)
T d S
t (l t )
Chapter One
4
History and Architecture of the Patent
System
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What is a patent?
5
-Derived from literae patentes,
meaning “open letters”
-No such thing as common law patent
rights. Rather, a patent is a government
issued grant conferring the right to
exclude others from making, using,
selling, offering for sale the claimed
invention throughout the U.S. or
importing the claimed invention into the
U.S.
-A patent does not give its owner a right
to use the claimed invention.
© C. Nard - Fall 2015 - Law of Patents
The Right to Exclude and Freedom to
Operate
6
Claims A, B, and C
Patent
A – Back
B – Bottom Support
Competing Product –
Infringement or Free to
Operate?
A – Back
A – Back
No A
B – Bottom Support
D - Arm Rests
B – Bottom
C - Legs
Support
C - Legs
C - Legs
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The Patent Document
7
Prior Art References
© C. Nard - Fall 2015 - Law of Patents
Specification
Description: description of the technical
problem faced by the inventor and how the
inventor solves the problem.
Drawings: attached
Preferred Embodiment (Best Mode)
Claim(s):
• preamble
• transition
• body
8
© C. Nard - Fall 2015 - Law of Patents
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Specification
Description: description of the technical
problem faced by the inventor and how the
inventor solves the problem.
Drawings: attached
Preferred Embodiment (Best Mode)
Claim(s):
• preamble
• transition
• body
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Specification
Description: description of the technical
problem faced by the inventor and how the
inventor solves the problem.
Drawings: attached
Preferred Embodiment (Best Mode)
Claim(s):
• preamble
• transition
• body
10
© C. Nard - Fall 2015 - Law of Patents
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Specification
Description: description of the technical
problem faced by the inventor and how the
inventor solves the problem.
Drawings: attached
Preferred Embodiment (Best Mode)
Claim(s):
• preamble
• transition
• body
Independent vs. Dependent
11
© C. Nard - Fall 2015 - Law of Patents
A Patent is a Property Right
12
- There are similarities between, on the one
hand, real and personal property; and, on
the other hand, intellectual property
-The right to exclude is a key similarity
-But there are important differences between,
on the one hand, land, olive oil or a pen and,
on the other hand, information
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13
Economics of Patent Law
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The Nature of Information
14

Two relevant qualities:
 1.
Non-rivalous: “He who receives an idea
from me, receives instruction himself without
lessening mine; as he who lights his taper at
mine, receives light without darkening me.”
 2. Non-excludable: You cannot build a fence
around your idea as you can your backyard or
ranch.

These two traits are common in what
economists call public goods
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Arrow’s Information Paradox and
the Free-Rider Problem
15



Inventors often need to disclose their ideas to
secure venture capital, to arrange for
manufacturing capabilities, or otherwise
efficiently utilize their invention
But absent a property right, the inventor will
likely be reticent to disclose information for
fear of inducing competition.
Thus, there is an inherent conflict between the
desire to disclose information and the need to
limit access and use to those whom the
© C. Nard - Fall 2015 - Law of Patents
inventor has authorized.
Arrow’s Information Paradox and
the Free-Rider Problem, cont.
16


The two distinctive features of information
goods (non-rivalrous and non-excludable) can
lead to a free-rider problem ― that is,
consumers who exploit the information without
sufficiently contributing to its creation.
As such, information will tend to be under
produced, or not produced at all, due to the
riskiness associated with disclosing
information or others discovering the
information
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Addressing the Free-Rider
Problem
17


A common response to this problem is
government intervention, which can ― for
example ― take the form of research grants
(subsidies), or using the taxing power to fund
production or create incentives. National
defense ― a classic public good ― is provided
for through tax revenue.
Another form of government intervention is to
create a private property right to induce the
production of information goods, which has
been a government response ©inC. Nard
the- Fallform
of
2015 - Law of Patents
patent legislation since 1790.
Patent Law and the Marketplace
18




The patent system works hand-in-hand with
the marketplace
It is the private market that signals to
innovators where to channel their inventive
energies
The patent system provides a property right as
an inducement to innovate, but does not
channel the direction of the innovation
Thus, the patent system and the marketplace
work hand-in-hand to foster innovation in a
© C. Nard - Fall 2015 - Law of Patents
decentralized setting
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Economic Theories of Patent
Law
19


A patent system, however, is not a costless
enterprise. With exclusivity comes the risk of
reduced output, excessively high prices, and
therefore less access to the patented product,
because some consumers who value the good at a
competitive price will not buy it at a
supracompetitive price. This is referred to by
economists as deadweight loss
But to the extent these costs are cause for concern,
they are thought to be offset by the benefits
engendered by a patent system, which leads us to
the economic theories for the existence
patent
© C. Nard of
- Falla
2015
- Law of Patents
system.
20
What are the Economic Theories
(Justifications) for a Patent System?
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Economic Theories of Patent Law,
cont.
Incentive to Invent


22
Focuses on efficiency gains and the internalization of
externalities
This theory seeks to address the effects of Arrow’s
paradox, and holds that ― due to the public goods
nature of information ― without the prospect of a
property right, inventors would be unable to recoup
(internalize) their research and development costs
because third parties could simply copy the invention
and compete with the inventor unencumbered by the
need to recover fixed costs. In an increasingly
competitive market, prices will be driven down, resulting
in an under-investment in invention. © C. Nard - Fall 2015 - Law of Patents
Economic Theories of Patent Law,
cont.
Incentive to Disclose


This theory, which is informed in part by the availability
of trade secret protection, posits that the prospect of a
property right will induce inventors to seek patent
protection, and thereby disclose their inventions in
accordance with patent law’s disclosure requirements
Without the availability of patent protection, this theory
holds that inventors are more likely to opt for trade
secret protection, thus depriving competitors (and the
public generally) of a technical disclosure ― that is,
information that can be used by competitors to improve
the patented technology or design around it
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23
Economic Theories of Patent Law,
cont.


Incentive to Innovate
An innovation is different from an invention
The incentive to innovate focuses on the role
of patents in inducing the transformation of
inventions into downstream, commercialized
products by serving as a signal to relevant
parties, namely investors (e.g., venture
capitalists), potential licensees, and
downstream players (e.g., entities with
marketing, distribution, advertising, and
manufacturing capabilities). © C. Nard - Fall 2015 - Law of Patents
Weaknesses of These Theories
24




The incentive to invent theory assumes the inventive act is
driven by the prospect of a patent, rather than reputational
gains, monetary prizes or rewards
With respect to the incentive to disclose theory, an “enabling”
disclosure seldom suffices for potential licensees to practice
the claimed invention. This results in licensees asking the
licensor/patentee to provide them with an “enabling
package,” which includes technical know-how and other
forms of tacit knowledge not required to be disclosed under
§ 112.
Moreover, this theory does not fully take into account that ―
because of reverse engineering concerns or other issues
associated with confidentiality ― trade secrecy is sometimes
not a viable option.
© C. Nard - Fall 2015 - Law of Patents
In contrast, trade secret is the preferred option
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Weaknesses of These Theories,
cont.
25



The incentive to innovate theory loses some of
its force when one considers that oftentimes
patentees neither commercialize, nor license
their patented technology.
In other words, the development and
realization of downstream products may not be
consistent with the preferences of the patentee
Why do firms patent?
© C. Nard - Fall 2015 - Law of Patents
The Economic Welfare Problem
26


Our understanding of patent law’s relationship
to economic welfare is incomplete as is the the
question of whether stronger patents increase or
decrease innovation.
“If we did not have a patent system, it would be
irresponsible, on the basis of our present
knowledge of its economic consequences, to
recommend instituting one. But since we have
had a patent system for a long time, it would be
irresponsible on the basis of our present
knowledge, to recommend abolishing
it.” Fritz
© C. Nard - Fall 2015 - Law of Patents
Machlup (1958)
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Patents and Applications Held by
Start-Ups: The Importance of
Patents to VCs
Biotechnology
Medical
Device
Software
IT Hardware
Companies holding patents/apps (share)
39%
75%
76%
24%
-----
Average # patents/apps held
4.7
9.7
15.0
1.7
-----
Average # filed by company
8.1
8.5
13.0
5.0
-----
Average # from founders
1.9
2.0
3.0
0.9
-----
Average # acquired
2.1
2.4
3.7
0.9
-----
28
Source
Population of companies (D&B)
Industry
All
Respondents
© C. Nard - Fall 2015 - Law of Patents
Venture-backed companies
Companies holding patents/apps (share)
82%
97%
94%
67%
91%
Average # patents/apps held
18.7
34.6
25.2
5.9
27.4
Average # filed by company
15.8
22.9
16.1
7.1
23.6
Average # from founders
2.5
3.8
3.8
0.7
3.1
Average # acquired
4.2
9.0
6.5
0.7
3.5
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What is Venture Capital?
29
VC investment strategy typically has the following attributes:
1.
Emphasis on new technology;
2.
Active (and sometimes controlling) participation of the VC
in actual management of the business;
3.
Investment in outstanding people (entrepreneurs) at least
as much as in outstanding business plans;
4.
Investment in an early stage of development, but after IP
(typically patents) has been secured;
5.
A time horizon ranging from a year or two to as long as
ten years, followed by an “exit” through an IPO or sale of the
entire enterprise; and
6.
Investments where the VC can add value through
© C. Nard - Fall 2015 - Law of Patents
technical, financial, and management expertise
Seeds and Rounds: The Financing
Cycle
30
“Friends, Family, and Fools”
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Fewfinancing
Home Runs,
Lotsa of
Strikeouts....
many
But VC
remains
very
important And
part of
the
U.S. economy: According to one survey, U.S.
companies that have relied on venture capital
financing at some point in their history generate
revenue equal to approximately 21% of GDP. See
Missed
National Venture Capital Assoc, Venture
ImpactOpportunities
2 (6th ed. 2011)
Patents are DURABLE
assets
31
© C. Nard - Fall 2015 - Law of Patents
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History of Patent Law
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Filippo Brunelleschi - The First Patentee
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© C. Nard - Fall 2015 - Law of Patents
Marble From the Mountains of Carrara
34
Carrara
CROATIA
What is this country?
Pisa
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Loaded on Il Badalone (“the Monster”)
35
Badalone Article
© C. Nard - Fall 2015 - Law of Patents
From Pisa Up the Arno River to….
36
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… the Duomo in Florence
37
Khan Academy lecture
© C. Nard - Fall 2015 - Law of Patents
But Il Badalone Sank Near Empoli
38
Carrara
Florence
Empoli
Pisa
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BTW, What Other Famous Work
(Sculpture) is Made from Carrara
Marble?
© C. Nard - Fall 2015 - Law of Patents
di Lodovico Buonarroti Simoni
Michaelangelo
39
The Venetian Statute of 1474
40

Be it enacted that, by the authority of this Council, every person
who shall build any new and ingenious device in this City, not
previously made in our Commonwealth, shall give notice of it to
the office of our General Welfare Board when it has been reduced
to perfection so that it can be used and operated. It being
forbidden to every other person in any of our territories and
towns to make any further device conforming with and similar
to said one, without the consent and license of the author, for
the term of 10 years. And if anybody builds it in violation hereof,
the aforesaid author and inventor shall be entitled to have him
summoned before any magistrate of this City, by which magistrate
the said infringer shall be constrained to pay him hundred ducats;
and the device shall be destroyed at once. It being, however,
within the power and discretion of the Government, in its
activities, to take and use any such device and instrument, with
this condition however
one- Law
butofthe
author shall operate it.
© C. that
Nard - no
Fall 2015
Patents
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The Venetian Patent Statute of 1474
41
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Administrative Procedure (“General Welfare Board”)
Utility
Novelty
Non-obviousness
Disclosure Requirements
Reduced to Perfection
Non-literal infringement DOE
Term
Geographic Restrictions
Remedies
Eminent Domain
© C. Nard - Fall 2015 - Law of Patents
42
England and the “Odious
Monopolies”
-Royal abuses of the
monopolistic privilege led
to the Statute of
Monopolies in 1624
Elizabeth I
James I
Sir Walter Raleigh
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Statute of Monopolies
43
- The SOM outlawed all monopolies except
-
-
“new” manufacture[s]” and re-affirmed the
common law’s role
Specifically, Section II of the SOM “declared
and enacted … that all monopolies… shall be
forever hereafter heard, tried, and determined
by and according to the common law”
By relocating decision making authority over the
validity of particular patents, Parliament created
a binding constraint on the issuance of patents,
© C. Nard - Fall 2015 - Law of Patents
limiting them to cases of invention
One View of the SOM
44
Douglass North and Robert Thomas argue the SOM,
particularly the shift of granting power to Parliament,
played an important role in the development of Britain’s
Industrial Revolution.
See North and Thomas, The Rise of the Western World: A New Economic History (1973)
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The American Experience
45
-
-
-
During the colonial era and
the Articles of
Confederation, several
states granted patents.
As domestic technology
developed and national
markets formed, these
patents resulted in conflicts
among the states
The most famous conflict
was the Fitch-Rumsey
steamboat dispute
© C. Nard - Fall 2015 - Law of Patents
John Fitch
James Rumsey
Article I, Section 8, Clause 8
46
Congress shall have the power…
“To promote the Progress of Science and
useful Arts, by securing for limited Times toJames Madison
Authors and Inventors the exclusive Right to
their respective Writings and Discoveries”
Charles Pinckney
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The Constitution’s IP Clause – Three
Virtues
47

Decentralized
Patent-Market
dynamic


Exclusive Rights
Why not opt for
another form of
protection?


Incentives
Drafters understood the power of
incentives

© C. Nard - Fall 2015 - Law of Patents
One View of the IP Clause
48
“The Constitution gives an incentive to discover new
practical ideas and to bring them to the realistic service
Of one's neighbors. Perhaps no other practical device
in history has so revolutionized the daily conditions of
life. It has brought about a higher level of the common
good than any people ever experienced before.”
Michael Novak, Business as a Calling: Work and the Examined Life 144 (1996).
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Congressional Action:
The Noteworthy Patent Acts
49

1790: First patent act and the birth of the
examination system.



Applications were reviewed by the Secretary of State, Secretary
of War, and the Attorney General
1793: Repeal of the examination system, and
introduction of a registration regime
1836: Reintroduction of examination and
codification of the claiming requirement. This act
also created the:



Patent office (more on this office later)
Commissioner of patents
Present day numbering system
© C. Nard - Fall 2015 - Law of Patents
Congressional Action:
The Noteworthy Patent Acts, cont.
50

1870: Largely a re-codification of the 1836
Act, with one important addition – more
emphasis on the patent claim
 The 1836 Act required an inventor to
“particularly specify or point out” what
he regards as his invention.
 The 1870 Act required the inventor to
“particularly point out and distinctly
claim” his invention
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Congressional Action:
The Noteworthy Patent Acts, cont.
51

The 1952 Patent Act
Principal authors were
Giles S. Rich and
Pasquale J. (P.J.)
Federico
 The first full-scale
revision on the patent
code since 1836
 Remains the statutory
backbone of the
modern patent system
 Tweaks in 1984, 1988,
©and
C. Nard1999
- Fall 2015 - Law of Patents

Giles Sutherland Rich, pictured here in 1994 at the age of
90. He is widely regarded as one of the most influential
figures in modern patent law
P.J. Federico was the Examiner-in-Chief of the USPTO
from 1947 to 1970
Congressional Action:
The Noteworthy Patent Acts, cont.
52

2011 – The America Invents Act (“AIA”)
 The
most significant statutory changes to patent
law since 1952
 From first-to-invent to first-inventor-to-file system
 Redefined some types of prior art and statutory
bars in section 102 – Effective March 16, 2013
 Added various mechanisms to challenge validity
of patent post-issuance
 See AIA Q&A at
http://www.uspto.gov/aia_implementation/faq.jsp#
heading-5
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Abe Was Also an Inventor and Patentee
53


Lincoln called the introduction
of patent laws one of the
three most important
developments “in the world’s
history,” the other two being
the discovery of America and
the perfection of printing.
U.S. Patent # 6469, “A
Device for Buoying Vessels
Over Shoals” – May 22, 1849
(only pres to hold patent)
© C. Nard - Fall 2015 - Law of Patents
Not everyone was impressed….
54
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The Common Law of Patents
55



There have been relatively few statutory
changes over a 220 year period.
Thus, the predominant force in the
development of patent law has been the
federal courts, particularly through the exercise
of their common law powers
Over the past 30 years, two courts have
played a dominant role:
 The
U.S. Court of Appeals for the Federal Circuit
 The U.S. Supreme Court (especially the past 15
© C. Nard - Fall 2015 - Law of Patents
years)
56
The Creation of the Federal
Circuit



Created in 1982
The U.S. Court of the
Appeals for the
Federal Circuit
(“Federal Circuit”) has
exclusive subject
matter jurisdiction over
patent cases as well
as other areas of the
law
© C. Nard - Fall 2015 - Law of Patents
Jurisdiction
is national
in scope
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57
Stated Reasons for the Court’s
Creation
58





Rampant forum shopping
Disparate circuit court treatment of patents
Accompanying dis-uniformity of patent law
H.R. Rep. No. 312, 97th Cong., 1st Sess. 20-22 (1981):
 “Patent litigation long has been identified as a
problem area, characterized by undue forumshopping and unsettling inconsistency in
adjudications”
S. Rep. No. 275, 97th Cong., 1st Sess. 5 (1981):
 “The creation of the … Federal Circuit will produce
desirable uniformity in this area of … [patent] law.
Such uniformity will reduce forum-shopping
that is
© C. Nard - Fall 2015 - Law of Patents
common to patent litigation”
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The Federal Circuit’s Impact
59


The court has had a significant impact on the
patent landscape
Recent empirical studies have shown the court
has strengthened patent rights w/r/t validity
 The
court affirms district court invalidity findings
significantly less often that validity findings
 See Henry & Turner, 35 J. Leg. Stud. 85 (2006)

But while finding more patents not invalid, the
court has adopted a narrow approach to claim
scope
 See
© C. Nard - Fall 2015 - Law of Patents
Lunney, 11 Sup. Ct. Econ. Rev. 1 (2004)
The SCT’s Increased Presence
60
Some view the Court’s recent push into
patent law as an “anti-patent” initiative
This is not a correct assessment. The
Court, historically has intervened to
“correct” what it viewed as trends gone too
far in one direction or another
You can see this in the 19th c. and now. But
Congress has also intervened when it
viewed the SCt as moving too far in one
direction. An example would be the
motivation of the 1952 Act, which sought
to “correct” the SCt’s jurisprudence in
misuse and what is now called obviousness
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61
Obtaining Patent Rights: The USPTO
and the Patent Document
© C. Nard - Fall 2015 - Law of Patents
62
The U.S. Patent & Trademark
Office
The USPTO is a federal agency under the
Department of Commerce, and is located
in Alexandria, VA, just across the Potomac
River from Washington D.C.
The agency’s mission is:
“Fostering innovation, competitiveness and economic
growth, domestically and abroad to deliver high
quality and timely examination of patent and
trademark applications, guiding domestic and
international intellectual property policy, and
delivering intellectual property information and
education worldwide, with a highly skilled, diverse
workforce ”
© C. Nard - Fall 2015 - Law of Patents
-2012 Performance and Accountability
R
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The U.S. Patent & Trademark Office,
cont.
63


The patent office was created by Congress in
1836, with a very small staff.
The agency is led by the “Under Secretary of
Commerce for Intellectual Property” – currently
The patent code states the “Director shall be
responsible for providing policy direction and
management supervision for the Office and for
the issuance of patents….”
© C. Nard - Fall 2015 - Law of Patents
64
USPTO Organizational
Structure
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The U.S. Patent & Trademark Office,
cont.
65



The examination of patent applications is
divided among eight technology centers, which
are under the general supervision of the
“Deputy Commissioner for Patent Operations”
Each center is led by a group director and
subdivided into units staffed by patent
examiners
At end of fiscal year 2013, the USPTO
employed 8,051 patent examiners
© C. Nard - Fall 2015 - Law of Patents
2015 Average Pendency Rates
66
For Patents
-First Office Action: 17.8 months as of June 2015
(18.3 in June 2013)
 Biotech:
15 months (2014)
 Mechanical Eng/Mfg & Products: 21.3 months
-Total Pendency: 26.6 months as of June 2015
(29.8 in June 2013):
-Biotech: 26.2 months
-Mechanical Eng/Mfg and Products: 31.1 months
© C. Nard - Fall 2015 - Law of Patents
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The Arcana of Obtaining Patent Rights
67
By Lord Frederick Leighton
Daedalus would be proud….
Patent Application Process
© C. Nard - Fall 2015 - Law of Patents
Patent Institutions
Director
Federal Circuit
Patent Trial and Appeal
Board (PTAB)
Patent
Patent
Application
Application
68
© C. Nard - Fall 2015 - Law of Patents
Complaint
Patentee
v.
District Alleged
Court Infringer
34
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The Patent Attorney
69
There is a reason patent attorneys are
in demand.
Patent Bar Info can be found at:
http://www.uspto.gov/ip/boards/
oed/exam/registration.jsp
Patent bar members can be found at:
https://oedci.uspto.gov/OEDCI/
query.jsp
© C. Nard - Fall 2015 - Law of Patents
Utility Patent Filings
70
U.S. Utility Patent Applications Filed and Granted, 1980-2015
578,802
300,678
© C. Nard - Fall 2015 - Law of Patents
35
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71
Costs of Obtaining Patent
Rights
A recent survey of patent attorneys
shows that the median costs for
preparing and filing a patent application
in the biotech/chemical arts is $12,393.
for electrical/computer arts $10,993, and
for mechanical, 9,412.
As these are median costs, some
applications, depending on the
complexity of the technology and
geographic location of the law firm, can
be considerably more. And there are,
typically, after-filing costs that have a
median range $2,000-4,000.
© C. Nard - Fall 2015 - Law of Patents
Some Terms Relating to
Process
72







Patent Prosecution
Office Action
Amendment
Title 35 (the patent code)
37 C.F.R.
Manual of Patent Examining Procedure
(“MPEP”)
Prior Art and Prior Art Search
© C. Nard - Fall 2015 - Law of Patents
36
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Some Important Terms Relating to the
Patent Document
73


The Claim (Rex)
Specification (written description)
 Prosecution History
© C. Nard - Fall 2015 - Law of Patents
The Issued Patent
74
© C. Nard - Fall 2015 - Law of Patents
37
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Comparative Perspective:
The European Model
75

European Patent Convention
 Created
in 1973
 Came into effect in 1977
 38 Contracting States
 Not an EU institution
 Created European Patent
Organization (EPO)
© C. Nard - Fall 2015 - Law of Patents
European Model, cont.
76

The European Patent Organization
European Patent Office
Administrative
Council
EPO HQ Munich, Germany
© C. Nard - Fall 2015 - Law of Patents
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Some Data
77
In 2001, there were 1,458,000 patent
applications filed worldwide; in 2012 that
number rose to 2,347,000
 In comparison, the European Patent Office
(EPO) received 257,744 applications in 2013
(142,941 applications were filed in 2000) and
issued 66,700 patents.
 In the United States, the USPTO received
571,612 applications in 2013 (334,445
Patent Apps in Europe
applications were filed in 2002) and issued
by Country of Origin
© C. Nard - Fall 2015 - Law of Patents
277,835 patents

Top Ten Patentees at EPO
78
© C. Nard - Fall 2015 - Law of Patents
39
9/21/2015
Patent Applications by Country at
EPO
(per million inhabitants)
Denmark 241.7
7
Germany 265.6
6
Finland 217.7
7
Sweden 306.7
7
Switzerland 379.1
1
© C. Nard - Fall 2015 - Law of Patents
79
EPO Designations
80





The top designation countries for patent
protection:
1. Germany (98.9%)
2. France (95%); and
3. U.K. (94%).
Only these three countries had a designation rate
of over 90%. Other countries with significant
designations include Italy (83.3%), Spain (76.7%),
the Netherlands (76.4%), Sweden (75%),
Switzerland and Lichtenstein (74.7% each),
Belgium (73.7%), Austria (73.6%), Finland
(73.3%), Denmark and Ireland (73.2%
© C. Nardeach),
- Fall 2015 - Law of Patents
P t
l (72 7%)
dG
(72 7%) d
40
9/21/2015
European Model, cont.
81
No such things as a European Patent that
has legal effect throughout the EU or EPC
countries
 Obtainment is centralized, but then patent
turns into a series of national patent rights
 Very expensive: translation costs,
procedural costs, and renewal fees paid to
each state
 Much more expensive than a U.S. or
© C. Nard - Fall 2015 - Law of Patents
Japanese patent

European Model, cont.
82
Proposal: Community Wide Patent
(Unitary Patent)
 Legal effect throughout the EU
 Single renewal fee paid to EPO
 Application can be filed into one of three
languages: English, German, or French
 After Grant, no translation is required into
other languages

© C. Nard - Fall 2015 - Law of Patents
41
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83
End of Chapter One
© C. Nard - Fall 2015 - Law of Patents
Chapter Two
84
Claiming and Disclosing the
Invention
© C. Nard - Fall 2015 - Law of Patents
42
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Chapter Two
85
A. Claim Interpretation
© C. Nard - Fall 2015 - Law of Patents
Claim Construction
86
© C. Nard - Fall 2015 - Law of Patents
43
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The Importance of Claim Interpretation
87

The “claim is the name of the game”


Giles S. Rich, Extent of the Protection and Interpretation of
Claims — American Perspectives, 21 INT’L REV. INDUS.
PROP. & COPYRIGHT L. 497, 499 (1990).
Claim interpretation ― which precedes a
determination of validity and infringement ― is the
most important part of patent litigation because “to
decide what the claims mean is nearly always to
decide the case.”

Markman v. Westview Instruments, Inc., 52 F.3d 967, 989
(Fed. Cir. 1995) (Mayer, J., concurring)
© C. Nard - Fall 2015 - Law of Patents
Phillips v. AWH
88


Claim language at issue: “further means
disposed inside the shell for increasing its load
bearing capacity comprising internal steel
baffles extending inwardly from the steel shell
walls.”
DCt interpretation: a “baffle must extend
inward from the steel shell walls at an oblique
… angle to the wall face.”
< 90°
© C. Nard - Fall 2015 - Law of Patents
90° - 180°
44
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Phillips v. AWH
(The Interpretive Road Map)
89





Interpretive approaches and sources of evidence
What principles of claim interpretation did the court identify?
 The intrinsic/extrinsic divide
What is the difference between intrinsic and extrinsic evidence
What is the role of the PHOSITA and specification?
 Claim language is given its “ordinary and customary meaning” as
understood by a PHOSITA
 “Importantly, the person of ordinary skill in the art is deemed to
read the claim term not only in the context of the particular claim
in which the disputed term appears, but in the context of the entire
patent, including the specification.”
What is the role of dictionaries and expert testimony?
© C. Nard - Fall 2015 - Law of Patents
Phillips v. AWH, cont.
90

Intrinsic Evidence
 Claim
Language: Claims define the property
right, but do not stand alone. They are part of a
fully integrated document
 Specification: Acts as “a concordance for the
claims” – that is, “an alphabetical index of all the
words in a text or corpus of texts, showing every
contextual occurrence of a word” – Sec 112, para
1 anchor
 Prosecution History: Complete record of PTO
proceedings, but represents an ongoing
© C. Nard
- Fall 2015product)
- Law of Patents and is therefore
negotiation (not
a final
less useful than spec
45
9/21/2015
Phillips v. AWH, cont.
91

Extrinsic Evidence
 Experts:
 Provide
background of how invention works
 Ensure that court’s understanding of technical
aspects of patent is consistent with PHOSITA
understanding
 Establish that particular term in patent or prior art has
a particular meaning
 BUT NO conclusory and unsupported statements OR
statements at odds with claim construction mandated
by claims, spec and PH….
 Isn’t claim language to be given its ordinary and
customary meaning as understood by© C.aNard
PHOSITA?
- Fall 2015 - Law of Patents
A ’t
t PHOSITA ?
Phillips v. AWH, cont.
92


Extrinsic Evidence
Dictionaries and Treatises:
 Assist
in understanding commonly understood
meaning of words
 Unbiased source accessible to public in advance
of litigation
 But primary concern is that focus is on meaning in
the abstract rather than on meaning in the
context of the patent
 Dictionary is subservient to patent, particularly
spec
© C. Nard - Fall 2015 - Law of Patents
46
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Phillips v. AWH, cont.
93


Extrinsic Evidence
Dictionaries and Treatises:
A
canon of claim construction holds that while
claims are interpreted in the light of the spec,
limitations cannot be imported from the spec to
the claims
 Dictionaries guard against improper importation of
limitations from spec to claims
 But court noted the line between interpretation
and improper importation can be clarified by
focusing on PHOSITA’s
understanding of claim
© C. Nard - Fall 2015 - Law of Patents
terms…. Huh?
Phillips v. AWH, cont.
94

Dictionaries and Treatises:
 Some
guidelines for the PHOSITA and
competitors of patentee
 Patentee
is not limited to embodiments specifically
described in spec, even though spec may contain only
one embodiment
 PHOSITA would rarely confine their definitions to
exact representations depicted in spec
 Why? The spec teaches and enables PHOSITAs to
make and use the claimed invention
 When spec viewed in context, it will become clear
whether patentee is setting out specific examples
© C. Nardand
- Fall 2015 - Law of
(teaching) or whether patentee intends claims
Patents
embodiment to be co extensive (proper importation of
47
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Phillips v. AWH
95

Federal Circuit reversed:

1.

2.






Baffles must be pointed inward from the walls
Patent discloses baffles have different functions:
A. Deflecting projectiles (must be disposed at certain
angle)
B. Structural support
C. Intermediate barrier wall
3. All agree that a baffle refers to “objects that check, impede,
or obstruct the flow of something”
4. If the baffles recited in claim 1 were inherently placed at
specific angles … other claims would be redundant
5. A PHOSITA would not interpret the disclosure and claims to
mean that a structure extending inward from one of the wall
© C. Nard
- Fall 2015
Patents
faces is a ‘baffle’ if it is an an acute or obtuse
angle,
but- Law
is ofnot
Phillips v. AWH, cont.
(Some questions on “context”)
96




What did the court mean by “context” of the
patent?
As counsel for a competitor of a patentee, how
confident are you – in the light of Phillips – in
rendering a “non-infringement” or “freedom to
operate” opinion for your client?
If you would prefer a more rule-oriented
approach to claim interpretation, what do you
think the court should have emphasized to lend
greater certainty claim interpretation?
Unique Concepts (the next principal
case) may
© C. Nard - Fall 2015 - Law of Patents
be helpful in answering these questions
48
9/21/2015
Unique Concepts v. Brown
97
© C. Nard - Fall 2015 - Law of Patents
-The ‘260 patent: an
“assembly of border
pieces” used to attach a
fabric wall covering to a wall
- Relevant language in claim 1
reads: “assembly
comprising linear border
pieces and right angle
corner border pieces
which are arranged in endto-end relation to define a
framework that follows the
perimeter of the area to be
covered each piece
Unique Concepts v. Brown
98



Unique sued Brown for patent infringement
Brown maintained that its accused products do
not infringe [because] the accused products do
not have corner pieces which were preformed at a
right angle, but instead employ two linear pieces
which are each mitered, i.e., cut at a 45 degree
angle, and then placed together to form a right
angle
Brown won at DCt b/c court held the mitered
linear pieces used by Brown do not meet the
claim language “right angle corner border
pieces.” That is, “right angle corner
pieces”
of of Patents
© C. Nard
- Fall 2015 - Law
Cl i 1 i li it d t
f
d
i
49
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Unique Concepts v. Brown
99



The Majority:
“The language right angle corner border piece is too
clear to encompass linear pieces that are not right angle
corner pieces…. [T]he claim separately recites both
linear border pieces and right angle corner border
pieces. Such an interpretation would run counter to the
clear meaning of the language. Both types of pieces are
required by the claim.”
A contrary reading “would encourage an applicant to
escape examination of a more broadly-claimed invention
by filing narrow claims and then, after grant, asserting a
broader scope of the claims based on a statement in the
specification of an alternative never presented in the
© C. Nard - Fall 2015 - Law of Patents
claims for examination.”
Unique Concepts v. Brown
100



The Dissent:
“Beyond question … the specification discloses two
species of right-angle corner border pieces: (1) preformed
one-piece and (2) mitered, short, linear pieces, arranged at
right angles and properly spaced at their junction. The
latter are to be joined to longer linear pieces. No drawing
is needed to make (2) clear.”
Regarding cancelled claim 9, “The majority seems to start
with an a priori assumption of what the “clear” language of
claim 1 means. On the other hand, I am looking at the
genealogical record of that claim to find out what it
means…. I see no significance to the fact that claim 9 was
cancelled because it is part of the prosecution history, all of
which is clearly before us.”
© C. Nard - Fall 2015 - Law of Patents
50
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Unique Concepts v. Brown
101

The majority
 What
evidentiary sources did the majority emphasize?
 The claim and §112, ¶2
 Why?

The dissent
 What
evidentiary sources did the dissent emphasize?
 The specification and prosecution history (cancelled
claim 9)
 Why?
© C. Nard - Fall 2015 - Law of Patents
Unique Concepts v. Brown,
cont.
102



Whom do you agree with? Judge Lourie or
Judge Rich? What policies are at play?
Both focus on the intrinsic record.
Judge Lourie emphasizes:
 The
claim
 Certainty and notice (but also Brown’s “expert”– is
reliance on the expert consistent with the notice
function?)

Judge Rich emphasizes
 The
claim, spec, and prosecution history
© C. Nard - Fall 2015 - Law of Patents
 Context … the “genealogical record"
51
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Disclosure Requirements
103
The “big picture” – quid pro quo in patent
law
 There are four disclosure requirements:

 (1)
Enablement;
AIA Patent Description;
Reform Alert
rt
 (2) Written
 (3) Best Mode; and
 (4) Definiteness

Specification
Claims
Also, the relationship between the
specification and claims is of critical
importance
© C. Nard - Fall 2015 - Law of Patents
Chapter Two
104
B. Enablement
§ 112, ¶ 1
© C. Nard - Fall 2015 - Law of Patents
52
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Chapter Two
105
B.1 - Enablement and Claim Scope
© C. Nard - Fall 2015 - Law of Patents
O’Reilly v. Morse
106
Samuel F.B. Morse
Telegraph Register Patent
Model, patented May 1,
1849 - Patent No. 6,420
© C. Nard - Fall 2015 - Law of Patents
53
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The Infamous Claim 8
107
“I do not propose to limit myself to the specific
machinery, or parts of machinery, described in the
foregoing specifications and claims; the essence of
my invention being the use of the motive power of
the electric or galvanic current, which I call electromagnetism, however developed, for making or
printing intelligible characters, letters of signs, at any
distances, being a new application of that power, of
which I claim to be the first inventor or discoverer.”
© C. Nard - Fall 2015 - Law of Patents
The Opinion
108
“If this claim can be maintained, it
“His
invention
may
be process
less
matters
not by
what
or
complicated
–
less
liable
to
get
out
of
machinery the result is
orderaccomplished.
– less expensive in construction,
For aught that we now know some
and
in its operation. But yet if it is
future inventor, in the onward march
covered
of by this patent the inventor
science,
mode
[improver] may
coulddiscover
not use it,a nor
theof
writing
public
have the
benefit
of itby
without
the
or printing
at a
distance
means
of
permission
of this patentee.” Page. 92
the electric or galvanic current,
without
© C. Nard - Fall 2015 - Law of Patents
using any part of the process or
54
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The Opinion, cont.
109
“And when his patent expires, the public
must
apply to him to learn what it is. In fine he
claims
an exclusive right to use a manner and
process
which he has not described and indeed had
not
invented, and therefore could not describe
when
© C. Nard - Fall 2015 - Law of Patents
he obtained his patent. The court is of the
The Dissent
110
Justice Grier
“An improvement in a known
art
is as much the subject of a
patent
as the art itself; so also, is an
improvement on a known
machine. Yet, if the original
machine be patented, the
Patentee of an improvement
will
not have a right to use the
original. This doctrine has not
Nard - Fall the
2015 - Law of Patents
been found to© C.retard
progress of invention ”
55
9/21/2015
The Dissent, cont.
111
“But in its primary and literal significance
of
writing, printing, or recording at a distance,
it
never was invented, perfected, or put into
practical operation till it was done by
Morse….
It is not only ‘a new and useful art,’if that
term
means anything but a most wonderful and
© C. Nard - Fall 2015 - Law of Patents
The Dissent, cont.
112
“If it be the use of the words ‘however
developed’ that the claim is to be adjudged
too
broad, then it follows that a person using
any
other process for the purpose of developing
the
agent or element of electro-magnetism, than
the
© C. Nard - Fall 2015 - Law of Patents
common one now in use, and described in
56
9/21/2015
Unpacking Taney and Grier’s
Opinions
113

Taney
Ex post incentives more important than ex ante – See
Comment 2
 More robust improvement activity
 Unjust reward to Morse, who sought to reap beyond
where he sowed – See Comment 1


Grier
Ex ante incentives. Economic argument based on
blocking patents – See Comment , second paragraph
 Moral and instrumentalist argument based on
Morse’s “wonderful and astonishing invention” – See
© C. Nard
- Fall 2015 - Law of Patents
Comment 1, last
paragraph

Consolidated Electric Light Co. v. McKeesport Light Co.
(The Incandescent Lamp Case)
114
Sawyer and Man discovered that carbonized paper
could be used as a conductor for the filament in a
light bulb
 They sued Thomas Edison, who discovered
bamboo was a superior conductor
 But Sawyer and Man claimed:
(1) An incandescing conductor for an electric
lamp, of carbonized fibrous or textile material,
and of an arch or horseshoe shape, substantially as
© C. Nard - Fall 2015 - Law of
hereinbefore set forth.
Patents

57
9/21/2015
The Incandescent Lamp Case, cont.
115


Sawyer and Man claimed a genus, but
discovered a species – the first to do so. While
they were entitled to protection of the species
(which they claimed in claim 3), the enablement
requirement prevented them from extending their
patent protection to all “fibrous or textile
material.” Why?
Justice Brown wrote: “the fact that paper belongs
to the fibrous kingdom did not invest them with
sovereignty over this entire kingdom,” particularly
© C. Nard
- Fall 2015102.
- Law of Patents
Edison’s bamboo.
Page
The Incandescent Lamp Case, cont.
116


Echoing Justice Taney’s concern in Morse,
Justice Brown continued:
“[T]o hold that one who had discovered that a
certain fibrous or textile material answered the
required purpose should obtain the right to
exclude everybody from the whole domain of
fibrous and textile materials, and thereby shut
out any further efforts to discover a better
specimen of that class than the patentee had
employed, would be an unwarranted extension
of his monopoly, and operate rather to
© C. Nard - Fall 2015 - Law of Patents
discourage than to promote invention.”
Page
58
9/21/2015
Patent Law’s Delicate Balance
“Whilst the remuneration of genius and useful
 One is
of a
the
most
important upon the public,
ingenuity
duty
incumbent
questions
in patentof
law:
the rights
and welfare
the community must be
How much protection is
fairly dealt
with and effectually guarded.” Kendall
enough?
v. Winsor,
62 U.S. 322, 329 (1858)
 Broad patent protection
 Strong ex
ante incentives
“The problem
introduced
for incentive
 Efficient allocation of
mechanisms
is how to make sure that earlier
resources
innovators
are compensated for their
 Narrow patent protection
contributions,
while ensuring
that later innovators
 Strong incentive
for
improvement
activity
also have
an incentive
to invest” SUZANNE
 Increased pace of
C. Nard - Fall 2015 - Law of Patents
SCOTCHMER,
INNOVATION AND©INCENTIVES
technological innovation
127 (2006)
117
Chapter Two
118
B.2 - Enablement and “Undue
Experimentation”
© C. Nard - Fall 2015 - Law of Patents
59
9/21/2015
Cederapids, Inc. v. Norberg, Inc.
119





The Invention:
“A method to increase productivity of rock
crushers by simultaneously increasing speed
and throw.”
District Ct held patent claim invalid for failure
to meet the enablement requirement.
Specifically, the patent did not disclose values
for increases to speed and throw for crushers
of various sizes
Only values to© C.the
seven foot crusher were
Nard - Fall 2015 - Law of Patents
disclosed
Cederapids, Inc. v. Norberg, Inc., cont.
120

Federal Circuit reversed:
 1. Test for enablement: The disclosure must enable a
PHOSITA to make and use the claimed invention without
“undue experimentation” – experimentation cannot be
“unduly extensive.”
 2. There is a difference between predictable (e.g.,
mechanical) and unpredictable (e.g., chemical) arts.
 3. For predictable arts a broad claim can be enabled by
disclosure of a single embodiment.
 4. Disclosure need not provide mass-production details
(optimum levels)
 5. Here, PHOSITA could ascertain values for crushers of
various sizes – PHOSITA knowledge part of disclosure
© C. Nard - Fall 2015 - Law of Patents
60
9/21/2015
What is “Undue
Experimentation?”
121




1. The adjective “undue” implies that a
disclosure that requires some experimentation
can still satisfy enablement;
2. Multi-factored test – See p. 122, Comment 1,
second para and In re Wands case;
3. Predictability of art is a consideration. The
more unpredictable the art, the greater the
disclosure and vice versa;
4. Compliance with enablement is measured at
the time of filing.
© C. Nard - Fall 2015 - Law of Patents
Technology involves a side-impact, velocity-type crash sensor
for deployment in an airbag or other “occupant protection”
devices;
122
© C. Nard - Fall 2015 - Law of Patents
61
9/21/2015
Automotive Tech. Int’l v. BMW
123
Prior art related to “crash sensors” that
deployed when crushed – but these sensors
would not deploy on a side door if side door
was not directly hit;
 Was thought that velocity-side sensors would
deploy too slowly during side impact collision;
 Inventors of velocity-type sensors of ‘253
patent discovered that sensors could
successfully and timely deploy in a side
© C. Nard - Fall 2015 - Law of Patents
collision

124




Automotive Tech. Int’l v. BMW,
cont.
The claim language at issue was”
 “means responsive to the motion of said mass
upon acceleration of said housing in excess of a
predetermined threshold value…”
Ct construed claim to be “means + function” (see
sec 112, para 6), which requires the spec to
sufficiently disclose corresponding structure
Specification disclosed mechanical and electronic
side sensor switch assemblies;
But parties disagreed on sufficiency of disclosure for
electronic side impact sensor
© C. Nard - Fall 2015 - Law of Patents
62
9/21/2015
125

Automotive Tech. Int’l v. BMW,
cont.
ATI argues:
 DCt
should have followed line of cases that hold
enablement is satisfied when one mode of
invention is enabled;
 Spec does enable electronic sensors and
discusses specific disclosure;
 Delphi PHOSITA never addressed issue;
 Electronic sensors were widely known at time of
filing (at least for frontal impact) and therefore no
need for spec to describe them in detail
© C. Nard - Fall 2015 - Law of Patents
126

Automotive Tech. Int’l v. BMW,
cont.
Delphi argues:
 Spec must enable full scope of claims
 Full scope here includes both mechanical and
electronic sensors
 Spec only enabled mechanical sensors, and
therefore, full scope of claims not enabled. Short
recitation of electronic sensors required “undue
experimentation”
 Spec specifically states electronic sensors are new
field and hence ATI could not rely on PHOSITA
knowledge
 Delphi expert testified that spec did not
enable
© C. Nard
- Fall 2015 - (1)
Law of Patents
how to sense the motion of the mass to properly
63
9/21/2015
127

Automotive Tech. Int’l v. BMW,
cont.
Federal Circuit affirms invalidity holding:
 1.
Two full columns and five figures describe
mechanical sensors; only one short paragraph and
one figure (11) relate to electronic sensor;
 2. Short paragraph provides little detail concerning
how electronic sensor is built or operated; no mention
of circuitry or of structure of any technologies
involved re to electronic sensor;
 3. PHOSITA knowledge not enough to supplement
spec. in the light of ATI remarks in spec and novel
aspect of using velocity-type sensors for side impact
sensing
© C. Nard - Fall 2015 - Law of Patents
128

Automotive Tech. Int’l v. BMW,
cont.
Federal Circuit affirms invalidity holding, cont:
 4.
According to Fed Cir:
The inadequacy of the description of an electronic
side impact sensor is highlighted by comparison
with the extensive disclosure of how to make and
use a mechanical side impact sensor, consisting of
two full columns. If such a disclosure is needed to
enable making and using a mechanical side impact
sensor, why is not a similar disclosure needed to
enable making and using an electronic side impact
sensor, which is an essential part of the invention?
Page 120.
© C. Nard - Fall 2015 - Law of Patents
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129
Automotive Tech. Int’l v. BMW,
cont.
 5.
Ct’s reliance on Liebel-Flarsheim, which held that
full scope of claimed invention must be enabled. The
Dct in ATI held (and parties agreed) that claim scope
included both mechanical and electronic sensors:
“Disclosure of only mechanical side impact sensors does
not permit one of ordinary skill in the art to make and use
the invention as broadly as it was claimed… Electronic side
impact sensors are not just another known species of a
genus consisting of sensors, but are a distinctly different
sensor compared to the well-enabled mechanical side
impact sensor…”
Page 121.
© C. Nard - Fall 2015 - Law of Patents
Some Questions and Points
130



What result in ATI if disclosure of two types of sensors
were reversed? That is, the electronic sensor was
disclosed adequately, but the mechanical sensor was
the subject of a paragraph – See Comment 2, pages
124-25.
Can ATI be reconciled with the rule that an inventor
need not disclose every embodiment of the invention to
satisfy the enablement requirement? See Cedar: A
broad mechanical claim can be enabled by disclosure
of a single embodiment.
*Enablement is measured at time of filing. Why? See
Comment 3, page 125. And keep this point in mind
when we cover non-literal infringement in© C.Chapter
aof Patents
Nard - Fall 20157,
- Law
d
i
h h ld i f i
i
d
h i
65
9/21/2015
131
Written Description
§ 112, ¶ 1
© C. Nard - Fall 2015 - Law of Patents
Ariad Pharma. v. Eli Lilly and Co.,
cont.
132

Policy implications for universities
 Patent
law has always been directed to the “useful
Arts” – but what does that mean?
 Practical use
 Universities engage primarily in basic research,
more upstream
 Patents are not awarded for academic theories.
 “[A] patent is not a hunting license. It is not a
reward for the search, but compensation for its
successful conclusion.” Page 131. WD is focused
on the conception of the complete and final
invention and subsequent disclosure.© C. Nard - Fall 2015 - Law of Patents
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WD v. Definiteness
133


Why have a WD requirement when there is a
claiming requirement?
1. Historical explanation


WD pre-dates definiteness requirement of §112, ¶2
2. Policy-based rationale
WD guards against inventor overreaching by insisting that
he recount his invention in such detail that his future claims
can be determined to be encompassed within his original
creation
 Definiteness shapes the future conduct of competitors by
insisting they receive notice of the claim scope

© C. Nard - Fall 2015 - Law of Patents
134
Definiteness
§ 112, ¶ 2
© C. Nard - Fall 2015 - Law of Patents
67
9/21/2015
Nautilus, Inc. v. Biosig
Instruments, Inc.
135


According to Federal Circuit Sec 112, para 2
language “particularly point out and distinctly
claim” is satisfied “so long as claim is
‘amenable to construction,’ and the claim, as
construed, is not ‘insolubly ambiguous’”
SCt test: Sec 112, para 2 is not met if the claims
“fail to inform, with reasonable certainty, those
skilled in the art about the scope of the
invention.”
© C. Nard - Fall 2015 - Law of Patents
Nautilus, Inc. v. Biosig
Instruments, Inc.
136




Patent relates to heart-rate monitor for use during
exercise
Patentee asserts invention is improvement over
prior art because it eliminates EMG signals (filters
them) that mask ECG signals, thereby present
invention provides more accurate reading
Claim term: live electrodes [9 and 13] and common
electrodes [11 and 15] “mounted … in “spaced
relationship with each other” is at issue
DCt held this term does “not tell [the court] or anyone what
precisely the space should be,” or even supply “any
parameters” for determining the appropriate
spacing.
© C. Nard
- Fall 2015 - Law of Patents
68
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137
Section 112, Para 2 Analysis – A
“Delicate Balance”
 1. Definiteness is evaluated from the perspective
The reasonable-certainty standard balances the inherent
of a PHOSITA
limitations of language, and the modicum of uncertainty
 2.
Claims
are
to be
read in the
light
the to apprise
that
comes
with
such
limitations,
with
theof
need
patent’s
specification
and
prosecution
history for
the public
of what
is claimed
and
to reduce incentives
patent
applicants to measured
inject ambiguity
their
 3. Definiteness
at theinto
time
theclaims.
patent is
filed
 4. Some ambiguity is tolerated – Why?
 5. But not too much – Why?
 Zone
of uncertainty
 Powerful incentives
into claims
© C. Nard to
- Fallinject
2015 - Law ambiguity
of Patents
On Remand
138




Federal Circuit again reversed the district court’s decision
on essentially the same grounds articulated in its prior
opinion.
Federal Circuit concluded – for all practical purposes –
that the “reasonable certainty” standard did not render
prior precedent inapplicable.
Federal Circuit stated the Supreme Court “modified the
standard by which lower courts examine allegedly
ambiguous claims; we may now steer by the bright star of
‘reasonable certainty,’ rather than the unreliable compass
of ‘insoluble ambiguity.’”
“Reasonableness is the core of much of the common law,
© C. Nard - Fall 2015 - Law of Patents
and ‘reasonable certainty has been defined
in broad
69
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139
Best Mode
§ 112, ¶ 1
REFORM ALERT: AIA ELIMINATED
BEST MODE AS BASIS FOR
CHALLENGING VALIDITY
© C. Nard - Fall 2015 - Law of Patents
The Best Mode Test
140



Two-part test:
1. Subjective: whether, at the time the patent
application was filed, the inventor knew of a
mode of practicing the claimed invention that
he considered to be better than any other.
2. If yes, whether the specification adequately
disclosed what the inventor contemplated as
the best mode so that those having ordinary
skill in the art could practice it
© C. Nard - Fall 2015 - Law of Patents
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Chapter 3
141
Utility and Eligible Subject Matter
© C. Nard - Fall 2015 - Law of Patents
142
Eligible Subject Matter
© C. Nard - Fall 2015 - Law of Patents
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Eligible Subject Matter
143
Biotechnology
Medical
Device
Software
IT Hardware
Companies holding patents/apps (share)
39%
75%
76%
24%
-----
Average # patents/apps held
4.7
9.7
15.0
1.7
-----
Average # filed by company
8.1
8.5
13.0
5.0
-----
Average # from founders
1.9
2.0
3.0
0.9
-----
Average # acquired
2.1
2.4
3.7
0.9
-----
144
Source
Population of companies (D&B)
Industry
All
Respondents
© C. Nard - Fall 2015 - Law of Patents
Venture-backed companies
Companies holding patents/apps (share)
82%
97%
94%
67%
91%
Average # patents/apps held
18.7
34.6
25.2
5.9
27.4
Average # filed by company
15.8
22.9
16.1
7.1
23.6
Average # from founders
2.5
3.8
3.8
0.7
3.1
4.2
9.0
6.5
0.7
3.5
Average # acquired
© C. Nard - Fall 2015 - Law of Patents
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145
1.
Biomedical-Related Inventions
© C. Nard - Fall 2015 - Law of Patents
Diamond v. Chakrabarty
146

What does Chakrabarty
seek to patent?
 Three
Oil eating bacteria
types of claims:
 1.process for producing
the bacteria
 2.an inoculum
comprised of a carrier
material floating on
water, and the new
bacteria
 3.bacteria themselves
© C. Nard - Fall 2015 - Law of Patents
73
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Diamond v. Chakrabarty
147


Does § 101 say anything about living matter?
What are the strongest and weakest arguments for
patentability?
 Broad
statutory construction
 “Anything under the sun that is made by man”
 “the patentee has produced a new bacterium with
markedly different characteristics from any found in
nature and one having the potential for significant
utility – REMEMBER THESE WORDS

How does the Court handle the dissent and the
plant patent statutes of 1930 and 1970?
© C. Nard - Fall 2015 - Law of Patents
Diamond v. Chakrabarty
148

What are the limits of §101?
 Laws
of nature
 Physical phenomena
 Abstract ideas


What are the reasons for these exclusions?
Are there arguments for eliminating the statutory
subject matter requirement?
© C. Nard - Fall 2015 - Law of Patents
74
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Mayo v. Prometheus Labs
149
Process claims in which a law of nature, a
natural phenomenon, or naturally
occurring relation or correlation is a limited
element or step.
 Laws of nature are unpatentable, but…
 “[T]o transform an unpatentable law of
nature into a patent-eligible application of
such a law, one must do more than simply
state the law of nature while adding the
© C. Nard - Fall 2015 - Law of Patents
words “apply it.”

The patent claims correlations between thiopurine
Mayo v. Prometheus Labs
metabolite levels and the toxicity and efficacy of
150
thiopurine
dosages
The
patentdrug
claims
embody findings that concentrations
 The Court demanded the presence of an
of certain metabolites in the patient’s blood beyond a
“inventive
concept
sufficient to
ensure
certain
level indicate
the thiopurine
drugs
will that
likelythe
patent
in practice
amounts
to significantlytoo
more
cause
harmful
side effects
and concentrations
low
thanthe
a patent
upondosage
the natural
law
itself.”
indicate
thiopurine
will be
ineffective
 In the
end, held
the SCt
concluded the patent
Federal
Circuit
the “administering”
and claims
do not “addsteps
enough
to their
statements of the
“determining”
involved
a “transformation
of the
correlations
allowtaken
the processes
they describe
human
body or oftoblood
from the body,”
thereby
to qualify
as patent-eligible
processes
apply
satisfying
the machine
or transformation
testthat
of 101
natural laws.” There was no “inventive concept”
eligibility.
beyond what occurs naturally. What is enough?
© C. Nard - Fall 2015 - Law of Patents
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Mayo v. Prometheus Labs
151
According
to SCt, unlike the ‘623 patent in
 The Court also remarked how the additional steps
Prometheus,
of the
additional
steps
of the
recited in thenone
claimed
invention
“consist
of wellDiehr
claimedroutine,
invention
“were in activity
contextalready
obvious,
understood,
conventional
engaged
by the
scientific
community.” How
already
in in
use,
or purely
conventional.”
Thus the
different did
is Diehr
case? to preempt the use of the”
patentee
not “seek
Arrhenius
equation.
Can the issue
also be characterized as one concerned
Is this
an scope
eligibility
orimpeding
novelty/obviousness
argument?
with
claim
and
improvement
activity?
SeeSCt
U.S.
Gov’t
position.
If a
lawnot
of inhibit
naturediscovery
is part of aby
The
noted
“that
patent
law
claim, Prometheus
— despite
its recognition
that “all
improperly
tying up the
future use
of laws of nature.”
inventions
can be reduced to underlying principles of
Citing
Morse.
nature” — seems to suggest that eligibility requires the
© C. Nard - Fall 2015 - Law of Patents
patentee to set forth the law’s application
in a novel and

Asso’c of Molecular Pathology v.
USPTO (Federal Circuit case)
152
The Issue: Are human genes patentable? YES
according to the majority.
1.Chakrabarty and precedent require a
distinction between a product of nature and a
human-made invention for purposes of 101.
The distinction turns on a change in the
claimed compositions identity compared with
what exists in nature.
In other words, do the compositions have
similar characteristics or has human
© C. Nard - Fall 2015 - Law of Patents
intervention given
“markedly different,” or
“distinctive ” characteristics

76
9/21/2015
Asso’c of Molecular Pathology v.
USPTO (Myriad BRCA gene patent
case)
153

2. Isolated DNA is a distinctive chemical
compared to native DNA
 A.
Native DNA exists in the body as one of 46
large, contiguous DNA molecules
 B. Each DNA molecule is itself an integral part
of a larger structural complex, a chromosome
 C. In each chromosome, the DNA molecule is
packaged around histone proteins into a
structure called chromatin
© C. Nard - Fall 2015 - Law of Patents
Asso’c of Molecular Pathology v.
USPTO (Myriad BRCA gene patent
case)
154

3. By contrast, isolated DNA:
 A.
Is a free-standing portion of a native DNA
 B. Isolated DNA has been cleaved (i.e., had its
covalent bonds in its backbone chemically
severed) to consist of just a fraction of a naturally
occurring DNA molecule
“Accordingly, BRCA1 and 2 in their isolated state
are not the same molecules as DNA as it exists in
the body; human intervention in cleaving a portion
of a native chromosomal DNA imparts on that
isolated DNA a distinctive chemical identity from
© C. Nard - Fall 2015 - Law of Patents
that possessed
by native DNA”
77
9/21/2015
Asso’c of Molecular Pathology v.
USPTO (Myriad BRCA gene patent
case)
155




156
Structure, not function, matters
4. While it is true that the isolated DNA and native
DNA have the same information content, this is but
one similarity;
5. “It is the distinctive nature of DNA molecules as
isolated compositions of matter that determines
their patent eligibility rather than their physiological
use or benefit.”
6. “The claimed isolated DNA molecules are distinct
from their natural existence as portions of larger
entities, and their informational content is irrelevant
to that fact.” © C. Nard - Fall 2015 - Law of Patents
Asso’c of Molecular Pathology v.
USPTO (Myriad BRCA gene patent
case)
POLICY
7. It is the difference between knowledge of nature and
reducing a portion of nature to concrete form, the latter
activity being what the patent laws seek to encourage and
protect;
8. w/r/t the dissent’s “snapping a leaf from a tree” analogy,
“no one would contemplate that snapping a leaf from a tree
would be worthy of a patent, whereas isolating genes to
provide useful diagnostic tools and medicines is surely
what the patent laws are intended to encourage and
protect.”
9. Settled expectations of the inventing community –
C. Nard - Fall 2015 - Law of Patents
Congress is best to© bring
about change; not the courts
78
9/21/2015
Asso’c of Molecular Pathology v.
USPTO (Myriad BRCA gene patent
case)
157
Dissent

1. Majority holding will have “broad consequences”
 Preempting method for whole-genome sequencing
 “Myriad’s contribution to the filed is not remotely consonant with
such effects”
 What is Myriad’s contribution? Myriad discovered the nucleotide
sequence of the BRCA gene; but it neither discovered its
chromosomal location, nor a new method of nucleotide
sequencing.
 Does Bryson’s position remind you of some other case? 112?
2.
The process of extracting (isolating) a human does not convert
the gene into patentable subject matter.

3.
An isolated gene has the same genetic code as a native gene,
even though the molecular
structure
different
© C. Nard
- Fall 2015 -may
Law ofbe
Patents

158
Asso’c of Molecular Pathology v.
USPTO (Myriad BRCA gene patent
case)
Dissent, cont.
4. Chakrabarty importantly held that artificial life is
patentable if it is a product of human ingenuity “having a
distinctive name, character, [and] use” – a product with
“markedly different characteristics from any found in nature
and one having the potential for significant utility.”
5. “The only material change made to the BRCA genes
from their natural state is the change incidental to the
extraction of the genes from the environment in which they
are found in nature”
6. In this regard, genes are like a new mineral or new
plant found in nature.
© C. Nard - Fall 2015 - Law of Patents
79
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159
Asso’c of Molecular Pathology v.
USPTO (Myriad BRCA gene patent
case)
Dissent, cont.
7. Simply breaking a bond does not transform an otherwise
unpatenable product into a patentable product. For example:
“Weaker interatomic forces will be broken when a dirty diamond is
cleaned with water or another solvent, but that does not make the
clean diamond a human-made invention.”
8. The same holds true for lithium, which the majority admits is not
patentable once isolated. How are isolated atoms different than
isolated molecules?
9. Not all isolated/extracted substances are ineligible: baseball bat v.
gene.
10. Purification does not change matters unless the purified natural
substance results in a product with such distinct characteristics that it
becomes “for every practical
purpose a new thing commercially and
© C. Nard - Fall 2015 - Law of Patents
therapeutically.”
160
Asso’c of Molecular Pathology v.
USPTO (Myriad BRCA gene patent
case)
Dissent, cont.
11. Chakrabarty demands us to two focus on two things:
A. The similarity in structure between what is
claimed and what is found in nature; and
B. The similarity in utility between what is claimed
and what is found in nature.
“What is claimed in the BRCA genes is the genetic coding
material, and that material is the same, structurally and
functionally, in both the native gene and the isolated form
of the gene.”
© C. Nard - Fall 2015 - Law of Patents
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161
Asso’c of Molecular Pathology v.
Myriad
(Supreme Court reverses CAFC)
Are Genes Patentable?
© C. Nard - Fall 2015 - Law of Patents
162
Asso’c of Molecular Pathology v.
Myriad
(Supreme Court reverses CAFC), cont.
 Court held an isolated DNA sequence
are not eligible for patent protection
under 35 U.S.C. sec 101because it is
a “product of nature”
 But cDNA is eligible for patent
protection because it is not naturally
occurring
 Court did not decide several items,
and made a point of letting us know
© C. Nard - Fall 2015 - Law of Patents
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163
Asso’c of Molecular Pathology v.
Myriad
(Supreme Court reverses CAFC), cont.
Decided in the context of patent law’s incentive
dynamic
“The rule against patents on naturally occurring
things is not without limits,… , for ‘all inventions at
some level embody, use, reflect, rest upon, or apply
laws of nature, natural phenomena, or abstract ideas,’
and ‘too broad an interpretation of this exclusionary
principle could eviscerate patent law.’ As we have
recognized before, patent protection strikes a delicate
balance between creating ‘incentives that lead to
creation, invention, and discovery’ and ‘imped[ing] the
© C. Nard - Fall 2015 - Law of Patents
flow of information that might permit indeed spur
164
Asso’c of Molecular Pathology v.
Myriad
(Supreme Court reverses CAFC), cont.
The Role of Chakrabarty and Invention v. Discovery
“The Chakrabarty bacterium was new ‘with markedly
different characteristics from any found in nature,’ due
to the additional plasmids and resultant “capacity for
degrading oil.’ In this case, by contrast, Myriad did
not create anything. To be sure, it found an important
and useful gene, but separating that gene from its
surrounding genetic material is not an act of invention.”
…. “Groundbreaking, innovative, or even brilliant
discovery does not by itself satisfy the § 101 inquiry.”
© C. Nard - Fall 2015 - Law of Patents
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165
Asso’c of Molecular Pathology v.
Myriad
(Supreme Court reverses CAFC), cont.
The Role of Chakrabarty and Invention v. Discovery,
cont.
In contrast, “creation of a cDNA sequence from mRNA
results in an exons-only molecule that is not naturally
occurring.” And although “‘[t]he nucleotide sequence of
cDNA is dictated by nature, not by the lab technician,’
the lab technician unquestionably creates something
new when cDNA is made.”
1.cDNA retains the naturally occurring exons of DNA, but
it is distinct from the DNA from which it was derived.
2.As a result, cDNA is not a “product of nature” and is
© C. Nard - Fall 2015 - Law of Patents
patent eligible under § 101”
166
Asso’c of Molecular Pathology v.
Myriad
(Supreme Court reverses CAFC), cont.
What the Court Did Not Decide
1. No Method Claims Before Court: “Had Myriad
created an innovative method of manipulating genes
while searching for the BRCA1 and BRCA2 genes, it
could possibly have sought a method patent.”
2. No New applications of knowledge about the
BRCA1 and BRCA2 genes. Judge Bryson aptly noted
that, “[a]s the first party with knowledge of the [BRCA1
and BRCA2] sequences, Myriad was in an excellent
position to claim applications of that knowledge. Many
of its unchallenged claims are limited to© C.such
Nard - Fall 2015 - Law of Patents
applications ”
83
9/21/2015
167
Asso’c of Molecular Pathology v.
Myriad
(Supreme Court reverses CAFC), cont.
What the Court Did Not Decide
3. Altering Nucleotide Order: “Scientific alteration of
the genetic code presents a different inquiry, and we
express no opinion about the application of § 101 to
such endeavors.”
A Modest Approach: “We merely hold that genes
and the information they encode are not patent
eligible under § 101 simply because they have been
isolated from the surrounding genetic material.”
© C. Nard - Fall 2015 - Law of Patents
168
Asso’c of Molecular Pathology v.
Myriad
(Supreme Court reverses CAFC), cont.
Questions
1.Did the Court assume a compromise position that is
fair-minded, supported by current patent law doctrine
and policy, and retains important incentives for
biotechnology players;
2.On what basis could the Court have affirmed the
Federal Circuit’s decision in its entirety; reversed in its
entirety?
3.What effect on the biotechnology industry?
© C. Nard - Fall 2015 - Law of Patents
84
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Myriad Undeterred….
169


A few months after the Myriad decision, Myriad filed
suit against Ambry Genetics, writing in its complaint:
“As of the morning of June 13, 2013, Plaintiffs
collectively had 24 patents containing 520 claims
concerning two genes (BRCA1 and BRCA2), and
methods of use and synthetic compositions of matter
related thereto. On June 13, the Supreme Court of
the United States ruled that five patent claims
covering isolated naturally occurring DNA were not
patent-eligible, thereby reducing the overall patent
© C. Nard
- Fall 2015
- Lawpatent
of Patents
estate to 24 patents
and
515
claims. This
case involves none of those five rejected claims ”
170
2. Business Methods and
Process-Related Inventions
© C. Nard - Fall 2015 - Law of Patents
85
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Alice Corp. v. CLS Bank, Int’l
171



Patent claims a computer-implemented scheme
for mitigating “settlement risk” by using a thirdparty intermediary
“method of exchanging obligations as between
parties…
Held: Patent claims an “abstract idea” of
intermediated settlement, and that merely
requiring generic computer implementation fails
to transform that abstract idea into a patent
eligible invention
© C. Nard - Fall 2015 - Law of Patents
Alice Corp. v. CLS Bank, Int’l
172

The concern that drives the “exclusionary principle”
is one of pre-emption
Laws of nature, natural phenomena, and abstract ideas
 “Monopolization of those tools through the grant of a
patent might tend to impede innovation more than it would
tend to promote it,” thereby thwarting the primary object of
patent law



But must be careful to prevent exclusionary principle
from swallowing all of patent law
Thus, must distinguish between patents that claim
building blocks of human ingenuity and those that
integrate the building blocks into something
more,
© C. Nard - Fall 2015 - Law of Patents
thereby transforming them into a patent eligible
86
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Alice Corp. v. CLS Bank, Int’l
173


Mayo Two-Step:
1. Determine whether claims at issue are directed to
a patent-ineligible concept. If yes, what else is there
in the claims before the us?


To answer that question, we consider the elements of each
claim both individually and “as an ordered combination” to
determine whether the additional elements “transform the
nature of the claim” into a patent-eligible application.
2. Search for an “inventive concept” – i.e., an
element or combination of elements that is “sufficient
to ensure that the patent in practice amounts to
significantly more than a patent upon the
[ineligible
© C. Nard - Fall 2015 - Law of Patents
t] it lf ”
Alice Corp. v. CLS Bank, Int’l
174

Step 1: What is an “abstract idea?”
need not labor to delimit the precise contours on
the “abstract ideas” category. It is enough to recognize
Is “a
fundamental
economic
practice”
that
there
is no meaningful
distinction
between the
always of
anrisk
abstract
idea?
concept
hedging
in Bilski and the concept of
intermediated settlement at issue here….”
 “We

Step 2: Was there an “inventive concept”
 Adding
conventional steps are not “enough” to supply
an inventive concept -- What is enough?
 Not introducing a computer or adding the words “apply
it”
 Not limiting the use of an abstract idea
© C.“to
Nard -aFallparticular
2015 - Law of Patents
t h l i l
i
t”
87
9/21/2015
Alice Corp. v. CLS Bank, Int’l
175
So:
 Compare Diehr
1.Stating an abstract idea “while adding words ‘apply it” is not enough to
 Invention
satisfy
sec. 101 was eligible for patent protection “not
2.Limiting
the useitofinvolved
an abstractaidea
“to a particularly
because
computer.”
Thetechnological
claim
environment”
is
not
enough
to
satisfy
sec.
101
employed a well-known mathematical equation,

but it used that equation in a process designed to
solve a technological problem in “conventional
industry practice”
The “claims in Diehr were patent eligible
because they improved an existing technological
process, not because they were implemented on
© C. Nard - Fall 2015 - Law of Patents
a computer”
Are Matters Out of Control?
176
© C. Nard - Fall 2015 - Law of Patents
88
9/21/2015
177
Utility
© C. Nard - Fall 2015 - Law of Patents
In re Swartz
178
Cold Fusion
© C. Nard - Fall 2015 - Law of Patents
89
9/21/2015
In re Swartz
179

Modern Utility Test:
two-step:
 1. The PTO has the initial burden of challenging a
presumptively correct assertion of utility in the
disclosure;
 2. Only after the PTO provides evidence showing
that a PHOSITA would reasonably doubt the
asserted utility does the burden shift to the
applicant to prove utility
 Brana
© C. Nard - Fall 2015 - Law of Patents
Brenner v. Manson
180



Biotechnology
Chemistry
How useful must the
invention be to satisfy
§101?
In other words, how
substantial?
This feature of the
utility requirement is
typically applied to the
fields of biotechnology
and chemistry
© C. Nard - Fall 2015 - Law of Patents
90
9/21/2015
Brenner v. Manson
181
The invention was for a process
 The PTO denied Manson’s request for an
interference because the claimed process
failed “to disclose any utility for” the
chemical compound produced by the process
 What was the CCPA’s basis and rationale for
reversing the PTO?

© C. Nard - Fall 2015 - Law of Patents
Brenner v. Manson
182

How did Manson attempt to show utility for the
claimed process?
 1.
An adjacent homologue of the steroid yielded
by his process has been demonstrated to have
tumor-inhibiting effects in mice
 2. The compound produced by the claimed
process is the subject of serious scientific
investigation
 3. The process works – produces its intended
product and is not harmful
© C. Nard - Fall 2015 - Law of Patents
91
9/21/2015
Brenner v. Manson
183

The Court looked to:
 1. General intent of Congress
 Manson’s reading of 101 “places such a special meaning on the word
‘useful’ that we cannot accept it in the absence of evidence that
Congress so intended”
 2. Purposes of the patent system
 One purpose of patent system is dissemination of technical
information, but….? Compare Harlan’s dissent
 3. Implications of a decision one way or another
 Until the process has “substantial utility… there is insufficient
justification for permitting an applicant to engross what may prove to
be a broad field…. A patent is not a hunting license”
© C. Nard - Fall 2015 - Law of Patents
For applications filed after March 16,
2013
184
Chapter 4 – Novelty
REFORM ALERT: AIA
CHANGED DEFINITION
OF NOVELTY
© C. Nard - Fall 2015 - Law of Patents
92
9/21/2015
“Old” (but still very much relevant)
Section 102
185

A person shall be entitled to a patent unless –
(a)
(b)
The invention was known or used by others in
this country [U.S.A.], or patented or described in
a printed publication is this or a foreign country,
before the invention thereof by the applicant for
patent [before the invention date];
The invention was patented or described in a
printed publication in this or a foreign country or
in public use or on sale in this country, more
than one year prior to the date of the
application for
in- Lawthe
United States
© C.patent
Nard - Fall 2015
of Patents
Atlas Powder v. IRECO
186




Anticipation Test:
To anticipate a claim, a prior art reference must disclose every
limitation of the claimed invention, either explicitly or
inherently – the claim “reads on” the prior art
If granting patent protection on the disputed claim would
allow the patentee to exclude the public from practicing the
prior art, then that claim is anticipated, regardless of whether
it also covers subject matter not in the prior art.
When a patent claims a chemical composition in terms of
ranges of elements, any single prior art reference that falls
within each of the ranges anticipates the claim.
© C. Nard - Fall 2015 - Law of Patents
93
9/21/2015
Atlas Powder v. IRECO
187



‘727 and ‘788 patents – relating to explosive
compositions - anticipated by Egly and
Butterworth patents
What about: “sufficient aeration ... entrapped to
enhance sensitivity to a substantial degree.”
Dct found this limitation inherent in the prior art
by interpreting “sufficient aeration” through the
eyes of a PHOSITA to include both interstitial air
(between oxidizer particles) and porous air
(within the pores of oxidizer particles)
© C. Nard - Fall 2015 - Law of Patents
Atlas Powder v. IRECO
188




Inherency
“Because ‘sufficient aeration’ was inherent in the prior art, it
is irrelevant that the prior art did not recognize the key
aspect of Dr. Clay's alleged invention - that air may act as
the sole sensitizer of the explosive composition.”
“Once it is recognized that interstitial and porous air were
inherent elements of the prior art compositions, the
assertion that air may act as a sole sensitizer amounts to
no more than a claim to the discovery of an inherent
property of the prior art, not the addition of a novel
element.”
“[I]nsufficient scientific understanding does not defeat a
© C. Nard - Fall 2015 - Law of Patents
showing of inherency.”
94
9/21/2015
Comment 1 Following Atlas
189

1. Identity of Invention
A
single prior art reference must disclose each and
every limitation of the claimed invention either explicitly
or inherently – References cannot be combined

2. Anticipatory Enablement
 The
single prior art reference must enable a PHOSITA
how to make and use the claimed invention
 PHOSITA knowledge adds to the picture

3. Claim Limitation Arrangement Matters
 Anticipation
arranged
requires how the claim limitations are
© C. Nard - Fall 2015 - Law of Patents
Gayler v. Wilder
190
From the 3117 patent
© C. Nard - Fall 2015 - Law of Patents
“Salamander Safe” made of heavy iron
plates and filled with a three-inch layer of
plaster of Paris in liquid form
95
9/21/2015
Gayler v. Wilder
191



Why should Fitzgerald get
the patent?
 And BTW, why the
name “Salamander” for
Fitzgerald’s safe?
Hasn’t Conner invented
first?
How did the court
interpret “known or
used?”
© C. Nard - Fall 2015 - Law of Patents
Gayler v. Wilder
192
Who is “them?”
“It is the inventor here that brings it to
them, and places it in their possession.
And as he does this by the effort of his own
genius, the law regards him as the first and
original inventor, and protects his patent,
although the improvement had in fact been
invented before, and used by others.”

© C. Nard - Fall 2015 - Law of Patents
96
9/21/2015
Gayler v. Wilder
193

“The knowledge has been lost for ages. Yet it
would hardly be doubted, if any one now
discovered an art thus lost, and it was a useful
improvement, that, upon fair construction of the
act of Congress, he would be entitled to a
patent. Yet he would not literally be the first
and true inventor. But he would be the first to
confer on the public the benefit of the
invention.”
© C. Nard - Fall 2015 - Law of Patents
Gayler v. Wilder
194
Lastly, regarding the present case:
 “The public could derive no benefit from it until
it was discovered by another inventor. And if
Fitzgerald made his discovery by his own
efforts, without any knowledge of Conner’s, he
invented an improvement that was then new,
and at that time unknown; and it was not the
less new and unknown because Conner’s safe
was recalled to his memory by the success of
Fitzgerald’s.” © C. Nard - Fall 2015 - Law of Patents

97
9/21/2015
Gayler v. Wilder
195


BUT!
“We do not understand the Circuit Court to have said
that the omission of Conner to try the value of his safe
by proper tests would deprive it of its priority; nor his
omission to bring in into public use. He might have
omitted both, and also abandoned its use, and been
ignorant of the extent of its value; yet if it was the
same with Fitzgerald’s, the latter would not upon such
grounds be entitled to a patent, provided Conner’s
safe and its mode of construction were still in the
memory of Conner before they were recalled by
© C. Nard - Fall 2015 - Law of Patents
Fitzgerald’s patent.”
Gayler v. Wilder
196

What happened to:
“It is the inventor here that brings it to them,
and places it in their possession. And as he
does this by the effort of his own genius…”
 If Conner had a better recollection, Fitzgerald’s
patent would have been invalidated for lack of
novelty!
 Why? How has Conner (with a better memory)
benefitted the public?

© C. Nard - Fall 2015 - Law of Patents
98
9/21/2015
Non-Secret = Public Knowledge/Use
US Patent
Application
Rosaire
1935
1936
Oct
1936
© C. Nard - Fall 2015 - Law of Patents
197
Rosaire v. National Lead Co., 218 F.2d 72 (5th Cir. 1955), cert. denied, 349 U.S. 916 (1955)
Rosaire v. Baroid Sales
198



What is the argument of Rosaire and Horvitz?
Gulf did not apply for a patent until 1939, did not publish
Teplitz’s ideas, and did not give the public the benefit of
Teplitz’s work
Teplitz’s work was an incomplete experiment. According
to the court:
“An unsuccessful experiment which is later abandoned does
not negative novelty in a new and successful device.”
Nevertheless, the existence and operation of a machine,
abandoned after its completion and sufficient use to
demonstrate is practicability, is evidence” of lack of novelty.
© C. Nard - Fall 2015 - Law of Patents
99
9/21/2015
Rosaire v. Baroid Sales
199



Where the work was done “openly and in the
ordinary course of the activities of the employer, a
large producing company in the oil industry,” court
will not modify the statute “to require some
affirmative act to bring the work to the attention of
the public at large.”
But how public was Gulf’s work? Was it “known”
in the 102(a) sense?
What is difference between Horvitz/Rosaire and
Fitzgerald?
© C. Nard - Fall 2015 - Law of Patents
“Old” (but still very much relevant)
Section 102
200

A person shall be entitled to a patent unless –
(a)
(b)
The invention was known or used by others in
this country [U.S.A.], or patented or described in
a printed publication is this or a foreign country,
before the invention thereof by the applicant for
patent [before the invention date];
The invention was patented or described in a
printed publication in this or a foreign country or
in public use or on sale in this country, more
than one year prior to the date of the
application for
in- Lawthe
United States
© C.patent
Nard - Fall 2015
of Patents
100
9/21/2015
New Section 102
201



(a) NOVELTY; PRIOR ART.--A person shall be entitled
to a patent unless-(1) the claimed invention was patented, described in a
printed publication, or in public use, on sale, or
otherwise available to the public before the effective
filing date of the claimed invention; or
(2) the claimed invention was described in a patent
issued under section 151, or in an application for patent
published or deemed published under section 122(b), in
which the patent or application, as the case may be,
names another inventor and was effectively filed before
the effective filing date of the claimed invention.
© C. Nard - Fall 2015 - Law of Patents
New Section 102, cont.
202




(b) EXCEPTIONS.-(1) DISCLOSURES MADE 1 YEAR OR LESS BEFORE
THE EFFECTIVE FILING DATE OF THE CLAIMED
INVENTION.--A disclosure made 1 year or less before
the effective filing date of a claimed invention shall not
be prior art to the claimed invention under subsection
(a)(1) if-(A) the disclosure was made by the inventor or joint
inventor or by another who obtained the subject matter
disclosed directly or indirectly from the inventor or a joint
inventor; or
(B) the subject matter disclosed had, before such
© C. Nard - Fall 2015 - Law of Patents
disclosure, been
publicly disclosed by the inventor
or a joint inventor or another who obtained the subject
101
9/21/2015
Comparative Point ― NEW §102(a)
203
Under new sec. 102(a) prior art
(including knowledge and use) can be
located anywhere in the world. There are
no geographic distinctions, thus the AIA
is comparable to European countries,
Japan, and Canada. The AIA has
implications for developing nations and
issues of “biopiracy.”
© C. Nard - Fall 2015 - Law of Patents
204
Novelty-Defeating Patent Disclosures
Under NEW §102(a)(2)
© C. Nard - Fall 2015 - Law of Patents
102
9/21/2015
“Old” Section 102(e)
205
A person shall be entitled to a patent,
unless…
(e) the invention was described in (1) an
application for patent published under
section 122(b), by another filed in the United
States before the invention by the applicant
for patent or (2) a patent granted on an
application for patent by another filed in the
United States before the invention by the
© C. Nard - Fall 2015 - Law of Patents
applicant for patent…..
Alexander Milburn v. Davis
206
1/31/11
3/4/11
2/6/12
6/4/12
Clifford
Filed
Whitford
Filed
Clifford
Issued
Whitford
Issued
© C. Nard - Fall 2015 - Law of Patents
103
9/21/2015
Alexander Milburn v. Davis
207
“The delays of the patent office ought not to cut
down the effect of what has been done.”
 What “has been done?”
 Claimed invention lacks
novelty

Justice Holmes
© C. Nard - Fall 2015 - Law of Patents
Alexander Milburn v. Davis
208



Keep in mind, the issue is not who invented first
As the court noted, “The question is not whether
Clifford showed himself by the description to be
the first inventor.” Rather, the “question is whether
Clifford’s disclosure made it impossible for
Whitford to claim the invention at a later date.”
Concludes the court, “It is not necessary to show
who did invent the thing in order to show that
Whitford did not.”
© C. Nard - Fall 2015 - Law of Patents
104
9/21/2015
Alexander Milburn v. Davis
209


Concludes the court, “It is not necessary to show
who did invent the thing in order to show that
Whitford did not.”
Is it fair for the court and PTO to use Clifford as
prior art?
102(e)
© C. Nard - Fall 2015 - Law of Patents
Novelty – “Old” § 102(e)
§ 102 A person shall be entitled to a patent unless -but not claimed*
(e) the invention was described in -^
(1) an application for patent, published under section 122(b), by
another filed in the United States before the invention by the
applicant for the patent; or a patent granted…
18 months
US Patent
Application
Claimed
Invention
210
Effective date
of reference
© C. Nard - Fall 2015 - Law of Patents
US Patent
Granted
§122
publication
Secret Prior Art
Edwards
US Patent
Application
Jones
Edwards
Edwards
* If claimed, then §102(g) applies.
105
9/21/2015
Should Published Apps be Treated Differently than
Issued Patents w/r/t Effective Prior Art Date?
211
“The delays of the patent office ought not to cut
down the effect of what has been done.”
Justice Holmes
 Should this statement apply with equal force to
published patent applications and issued patents?
 It seems the PTO can easily publish an application the
same day it is filed, whereas examination takes months
if not years.
 If true, why should a published application’s filing
date serve as the prior art effective date? Why
wouldn’t the effective date be the publication date?

© C. Nard - Fall 2015 - Law of Patents
AIA – Section 102(a)(2)
212


(a) NOVELTY; PRIOR ART.--A person shall
be entitled to a patent unless …
(2) the claimed invention was described in a
patent issued under section 151, or in an
application for patent published or deemed
published under section 122(b), in which the
patent or application, as the case may be,
names another inventor and was effectively
filed before the effective filing date of the
claimed invention.
© C. Nard - Fall 2015 - Law of Patents
106
9/21/2015
213
Novelty-Defeating Patent Disclosures Under §102(g)(2)
REFORM ALERT: AIA eliminated Section 102(g)
© C. Nard - Fall 2015 - Law of Patents
Thomson v. Quixote
214




MCA was a non-party actor that developed an
anticipatory, unpatented invention
Court requires corroboration only when testifying
inventor is asserting a claim of derivation or priority of
his invention and is a named party, or in a position to
benefit directly and substantially by his invention being
found to have priority over the patent claims at issue
Here, the inventors were non-parties and their testimony
concerned an unpatented prior invention
But doesn’t MCA have self-interest here?
© C. Nard - Fall 2015 - Law of Patents
107
9/21/2015
Thomson v. Quixote, cont.
215
Footnote 3:
“…. The first to invent who has invested time
and labor making and using the invention ―
but who might have opted not to apply for a
patent ― will not be liable for infringing
another’s patent on that same invention,
while the public will have benefited because
the invention was not abandoned,
suppressed or concealed.”

© C. Nard - Fall 2015 - Law of Patents
Thomson v. Quixote, cont.
216
Does the rationale in footnote 3 make sense?
 What about the patentee who brought the
invention to the public in a much more explicit
manner?
 What is the difference between ¶¶ 102(a) and
(g)(2)?
 Why isn’t MCA’s activity considered
concealment

© C. Nard - Fall 2015 - Law of Patents
108
9/21/2015
Is MCA more Sympathetic than Teplitz
and Conner (with a good memory)?
217



Compared to Teplitz (and Gulf) and Conner, MCA
is still providing a benefit to the public
Irony is that although MCA activity is more secret,
MCA is benefitting the public by continuously use
of the claimed invention
What is the difference between 102(g)(2) and
102(a) prior art?
 See
Comment 3 following Thomson
 Continuity!

Why isn’t section 102(g)(2) activity considered
“concealment”?
© C. Nard - Fall 2015 - Law of Patents
Prior User Rights Under AIA
218



The AIA seeks to avoid the zero-sum game by
eliminating § 102(g) prior art (secret prior
invention), which means that secret prior invention
like MCA’s will not qualify as prior art w/r/t patents
issued on or after 9/16/2011
But the AIA also created a prior user right, which, if
he qualifies under the statute, will enable the secret
prior inventor/user to continue commercially
exploiting his invention.
Thus, the prior user provision allows courts to find a
patent not invalid, while also protecting the secret
© C. Nard - Fall 2015 - Law of Patents
prior inventor/user from an infringement
finding.
109
9/21/2015
Prior User Rights Under AIA,
cont.
219

220




According to the USPTO Report on Prior User
Rights:
“ Providing limited prior user rights in a firstinventor-to-file system addresses the inherent
inequity such a system creates between an earlier
commercial user of the subject matter and a later
patentee. A prior user rights defense is promanufacturing and pro-jobs, as it rewards
businesses that put new technology promptly into
commercial use, and provides protection for early
C. Nard - Fallchallenged
2015 - Law of Patents by the later filing
commercial use ©when
of patent applications by other entities ”
The Prior User Rights
Mechanism
The AIA amends § 273 and expands the prior-user right to
include any “process, or consisting of a machine, manufacture,
or composition of matter used in a manufacturing or other
commercial process.”
A party must prove that it commercially used the patented
invention for at least one year prior to the earlier of the
(1) “effective filing date of the claimed invention;” or
(2) “the date on which the claimed invention was disclosed to
the public in a manner that qualified for the exception from
prior art under section 102(b).”
The commercial use has to be in the United States and “either
in connection with an internal commercial use or an actual
arm’s length sale or other arm’s length commercial
of
© C. Nard - Falltransfer
2015 - Law of Patents
f l d
lt f
h
i l
” § 273( )(1)
110
9/21/2015
Other forms of “commercial
use”
221




273(c):
(1) Pre-marketing regulatory approval (e.g.,
FDA);
(2) Use is a non-profit research laboratory
(e.g., university or hospital) for which the
public is the intended beneficiary.
Section (2) only applies for continued and noncommercial use by the lab or non-profit entity
© C. Nard - Fall 2015 - Law of Patents
Questions
222





The one-year requirement seeks to prevent prior users from learning of an
imminent patent filing and racing to establish a prior user right.
1. But does the one-year commercial use requirement favor only those prior
users (who are also oftentimes prior inventors) who have the foresight to opt
for a long-term commercialization plan based on trade secret protection? A
prior user/inventor who does not engage in commercial use prior to the
specified time frame will be an overnight infringer because he does not
qualify for the prior user defense; and the AIA eliminates § 102(g) prior art
that the defendant was able to take advantage of in Thomson v. Quixote.
2. Will the prior user will be less inclined to seek patent protection (thus
disclosing the invention), knowing it can seek refuge as a prior user?
3. Relatedly, would the second inventor also be disinclined to file for patent
protection because the prior user would be beyond his legal grasp? In other
words, is the prior user defense simply a compulsory, royalty-free license by
another name?
4. Would a prior user defense disproportionately favor
entities
© C.larger
Nard - Fall
2015 - Lawat
of the
Patents
expense of smaller concerns and individuals?
111
9/21/2015
223
Foreign-Based Activity as Prior Art Under
¶¶ 102(e) and (g)
© C. Nard - Fall 2015 - Law of Patents
In re Hilmer (I)
224
Habicht Priority Date
Habicht Swiss FD
1/24/57
Hilmer Priority Date
Hilmer German FD
7/31/57
Habicht Prior Art Date
Habicht U.S. FD
1/23/58
© C. Nard - Fall 2015 - Law of Patents
112
9/21/2015
In re Hilmer (I)
225



Why doesn’t the court permit the use of a foreign
priority date for prior art purposes under 102(e)?
Statutory Interpretation: 102(e)(2)
“We think it follows that section 119 must be
interpreted as giving only a positive right or benefit
to an applicant who has first filed abroad to protect
him against possible intervening patent-defeating
events in obtaining a patent”
© C. Nard - Fall 2015 - Law of Patents
In re Hilmer (I)
226
Is Hilmer I consistent with Alexander
Milburn?
 Recall, “The delays of the patent office ought
not to cut down the effect of what has been
done”
 Aren’t there delays in foreign patent offices?

© C. Nard - Fall 2015 - Law of Patents
113
9/21/2015
In re Hilmer (II)
227


Sections 119 and 104 relate, respectively, only
to what an applicant or patentee may and may
not do to protect himself against patentdefeating events occurring between his
invention date and his U.S. filing date.” Page
223
Congress intended “that knowledge and acts
in a foreign country are not to defeat the rights
on an applicant for a patent, except as the
applicant may become involved in a priority
© C. Nard - Fall 2015
- Law of Patents entitled to
dispute with another
applicant
[section] 119 benefits” Page 223
In re Hilmer (II)
228



Why doesn’t the court permit the use of a foreign
priority date for prior art purposes under 102(g)?
Statutory Interpretation: 102(g)(2)
“[Section] 119 does not remove the limitation of §
102(g) found in the phrase ‘in this country.’ … Thus,
§ 119 and § 104 relate, respectively, only to what
an applicant or patentee may and may not do to
protect himself against patent-defeating events
occurring between his invention date and his U.S.
filing date.”
© C. Nard - Fall 2015 - Law of Patents
114
9/21/2015
REFORM ALERT: AIA – New Section 102(d)
overruled Hilmer
229

(d) PATENTS AND PUBLISHED APPLICATIONS
EFFECTIVE AS PRIOR ART.--For purposes of determining
whether a patent or application for patent is prior art to a
claimed invention under subsection (a)(2), such patent or
application shall be considered to have been effectively
filed, with respect to any subject matter described in the
patent or application—…
 (2) if the patent or application for patent is entitled to
claim a right of priority under section 119, 365(a), or
365(b), or to claim the benefit of an earlier filing date
under section 120, 121, or 365(c), based upon 1 or more
prior filed applications for patent, as of the filing date of
the earliest such ©application
the subject
C. Nard - Fall 2015 -that
Law of describes
Patents
matter.
REFORM ALERT: AIA – New Section 102(d)
overruled Hilmer
230



§ 102(d) allows the foreign priority date to serve as the
effective prior art date of a foreign application.
This provision, therefore, overrules In re Hilmer, which held
that a foreign filing date can serve as a priority date for
purposes of obtaining a patent, but the same filing date
could not be used for prior art purposes to defeat patent
rights — only the application’s U.S. filing date could serve
that function.
Under the new §102(d), if an inventor files a foreign
application and claims priority to that filing date, the U.S.
patent’s effective date as prior art will be the filing date of
the foreign patent, not the U.S. filing date.
© C. Nard - Fall 2015 - Law of Patents
115
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231
“Printed Publication”
© C. Nard - Fall 2015 - Law of Patents
In re Klopfenstein
232






Printed slide presentation at AACC conference and
AES at KSU
14 slides printed onto poster boards
The slides disclosed every limitation of the ‘950 patent
No disclaimer or notice to intended audience
prohibiting note-taking or copying the presentation
No copies of presentation were distributed at the
AACC or AES
Presentation never catalogued or indexed in library or
database
© C. Nard - Fall 2015 - Law of Patents
116
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In re Klopfenstein
233




Key inquiry is whether the reference has been made
“publicly accessible” to persons interested in the art
Dissemination and public accessibility are keys
Here:
 Expertise of audience: Slides shown to wide variety of
viewers who were largely PHOSITAs
 Length of time: Presentation was over a three-day
period
 Expectation and ease of copying: No expectation that
information would not be copied; and very easy to
take notes – only eight substantive slides of the 14
Footnote 4
© C. Nard - Fall 2015 - Law of Patents
234
Priority
REFORM ALERT: AIA – Section did away with
priority and 102(g), but
The first-inventor-to-file provisions become
effective on March 16, 2013.
Thus, an
application filed before that date would not be
subject
to
the
first-inventor-to-file
provisions. The application will be treated under
the first-to-invent provisions of the law.
© C. Nard - Fall 2015 - Law of Patents
117
9/21/2015
Mahurkar v. C.R. Bard, Inc.
235
How do you prove date of invention?
Conception + Corroboration
 Formed in his mind “a definite and permanent idea of the complete and
operative invention, as it is hereafter to be applied in practice”

Reduction to Practice
 Actual RTP: “Must demonstrate the invention is suitable for intended
purpose”
 Testing may or may not be required depending on sophistication and
complexity of technology

Reasonable Diligence
 When: Party first to conceive but second to RTP. Why the delay?
 Party must demonstrate reasonable diligence toward RTP from a date jus
prior to the other party’s conception to its RTP © C. Nard - Fall 2015 - Law of Patents

Why is RTP Required?
236

“It is a mistaken idea with many, that the invention of
an improvement consists in the first vague idea of it. It
takes far more than that to entice one to the merit of
an invention, for between the bare conception of an
idea, and the demonstration of the practicability and
utility of the thing conceived, there is almost always a
vast amount of labor to be performed, time and money
to be spent, and innumerable difficulties and
prejudices to be encountered, before the work is
accomplished.”
-Charles Slack, Noble Obsession 199 (2002) (quoting from
© C. Nard - Fall 2015 - Law of
Patents
Charles Goodyear’s 1853 book, Gum-Elastic and Its Varieties, With
a Detailed Account of Its Applications and Uses, and of the Discovery of
Vulcanization)
118
9/21/2015
Griffith v. Kanamaru
237
Griffith Conception
6/30/81
6/15/83 – 9/13/83
Admitted period of inactivity


Kanamaru U.S.F.D.
11/17/82
Griffith RTP
1/11/84
Reasonable Diligence Period
Thus, Kanamaru’s constructive RTP (i.e., invention
date) is earlier than Giffith’s RTP.
But Griffith can prove an earlier invention date if he can
show that he was reasonably diligent “from immediately
before Kanamaru’s filing date … until Griffith’s
reduction to practice.”
© C. Nard - Fall 2015 - Law of Patents
Griffith v. Kanamaru
238


Policy of the diligence requirement: Prompt
Disclosure!
Griffith’s reasons for delay between June 15,
1983 and September 13, 1983:
 1.
It was reasonable to wait for Cornell to require
Griffith to obtain funding from outside the
university
 2.
Waiting for Ms. Jenkins


Why was Griffith unsuccessful?
Is three months too short a time to base a
C. Nard - Fall 2015 - Law of Patents
finding of lack©of
reasonable diligence?
119
9/21/2015
Reasonable Diligence
Valid Excuses
Invalid Excuses
• need to develop a closely related
invention to test the primary
invention
• extended vacation/hiatus
• insufficient money
• serious illness
• company relocates
• laboratory burns down
© C. Nard - Fall 2015 - Law of Patents
239
Fujikawa v. Wattanasin
240
1984
1979
1st Phase
begins
1985
1/87
Synthesized 3 comp’ds
in Vitro testing
F’s pd
8/87
W’s interest
revived
10/87
12/87
In Vivo Testing
4 comp’ds
tested in vitro
First Phase – W Conceived
1/88
W was diligent
5/88
8/88
?
Data Collection
In vivo completed
Invention ‘A’ rating
“ripe for filing”
3 “most active”
comp’ds tested
in vivo
Unexplained
Un Delay
Data collection
Completed – end of
May
11/88
3/89
Drafting
Geiser began
drafting application/
Completed in Nov.
Application
filed
© C. Nard - Fall 2015 - Law of Patents
120
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Policy of Abandonment
241


Abandonment is consistent with the foundational
policy of early disclosure that is built into several
other patent law doctrines.
As the Federal Circuit has noted, while § 102(g)
does not require an explicit disclosure, “the spirit
and policy of the patent laws encourage an
inventor to take steps to ensure that the public
has gained knowledge of the invention which will
insure its preservation in the public domain or
else run the risk of being dominated by the patent
of another.” Apotex USA, Inc. v. Merck & Co., 254
© C. Nard - Fall 2015 - Law of Patents
F 3d 1031 1038 (Fed Cir 2001)
242
Book
© C. Nard - Fall 2015 - Law of Patents
121
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Chapter Five
243
Nonobviousness
© C. Nard - Fall 2015 - Law of Patents
Hotchkiss v. Greenwood
244

“But in the case before us,
the knob is not new, nor the
metallic shank and spindle,
nor the dovetail form of the
cavity in the knob, nor the
means by which the metallic
shank is securely fastened
therein. All these were well
known, and in common use;
and the only thing new is the
substitution of a knob of a
different material from that
heretofore
used
in
connection
with
this
t”
© C. Nard - Fall 2015 - Law of Patents
122
9/21/2015
Hotchkiss v. Greenwood
245


A clay or porcelain knob may be better or cheaper. “But
this, of itself, can never be the subject of a patent. No one
will pretend that a machine, made, in whole or in part, of
materials better adapted to the purpose for which it is used
than the materials of which the old one is constructed, and
for that reason better and cheaper, can be distinguished
from the old one; or, in the sense of the patent law, can
entitle the manufacturer to a patent.”
“The difference is formal, and destitute of ingenuity or
invention. It may afford evidence of judgment and skill in
the selection and adaptation of the materials in the
manufacture of the instrument for the purposes intended,
but nothing more.”© C. Nard - Fall 2015 - Law of Patents
Defining the “Invention” Threshold: Ingenuity
Prior Art
wood
Claimed Invention
[U]nless more ingenuity and skill in applying the old
method of fastening the shank and the knob were required
in the application to it to the clay or porcelain knob
than
porcelain
were possessed by an ordinary mechanic acquainted with the
business, there was an absence of the degree of skill and
ingenuity which constitute essential elements of every
invention. In other
words, the improvement is the work of
metal
the skilled mechanic, not that of the inventor.”
246
© C. Nard - Fall 2015 - Law of Patents
Hotchkiss v. Greenwood, 2 U.S. 248 (1850)
123
9/21/2015
Graham v. John Deere
247
Justice Tom Clark (1899-1977)
John Deere (1804–1886)
© C. Nard - Fall 2015 - Law of Patents
‘798 and ‘811 Comparison
248
© C. Nard - Fall 2015 - Law of Patents
124
9/21/2015
Graham v. John Deere
Upper Plate
Improved
Design
Hinge Plate
Enhanced flexibility
Is it obvious to move the hinge plate from under the
shank to above the shank?
249
© C. Nard - Fall 2015 - Law of Patents
Graham v. John Deere
250


The Obviousness requirement as a Constitutional
mandate?
“Congress may not authorize the issuance of patents whose
effects are to remove existent knowledge from the public
domain, or to restrict free access to materials already
available. Innovation, advancement, and things which add to
the sum of useful knowledge are inherent requisites in a patent
system which by constitutional command must ‘promote the
Progress of * * * useful Arts.’ This is the standard expressed
in the Constitution and it may not be ignored. And it is in this
light that patent validity ‘requires reference to a standard
written into the Constitution.’”
© C. Nard - Fall 2015 - Law of Patents
125
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Graham v. John Deere
251
Did the Court understand what § 103 sought to
accomplish?
 “The major distinction [b/t Hotchkiss and § 103]
is that Congress has emphasized‘nonobviousness’
as the operative test of the section, rather than the
less definite ‘invention’ language of Hotchkiss that
Congress thought had led to a ‘large variety’ of
expressions in decisions and writings.”

© C. Nard - Fall 2015 - Law of Patents
Graham v. John Deere, cont.
252







The Test:
1. Scope and content of prior art
2. Differences b/t prior art and claims
3. Level of ordinary skill in the art
4. Obviousness or not is determined
5. Secondary considerations considered
“This is not to say, however, that there will not be
difficulties in applying the nonobviousness test. What is
obvious is not a question upon which there is likely to be
uniformity of thought in every given factual context.”
© C. Nard - Fall 2015 - Law of Patents
126
9/21/2015
253
Determining Obviousness (or Not)
© C. Nard - Fall 2015 - Law of Patents
KSR Int’l v. Teleflex, Inc.
254



KSR challenges the Federal Circuit’s
“teaching, suggestion, motivation” test (TSM
test)
Recall that unlike §102 novelty determination,
references can be combined under §103
The test holds:
A
patent claim is only proved obvious if “some
motivation or suggestion to combine the prior art
teachings” can be found in the prior art, the
nature of the problem, or the knowledge of a
person having
in the art.
© C.ordinary
Nard - Fall 2015 -skill
Law of Patents
127
9/21/2015
KSR Int’l v. Teleflex, Inc.
255





The Engelgau patent relates to adjustable pedals,
namely “a position-adjustable pedal assembly with an
electronic pedal position sensor attached to the support
member of the pedal assembly.”
“Attaching the sensor to the support member allows the
sensor to remain in a fixed position while the driver
adjusts the pedal.”
A claim broader than claim 4 was rejected because it did
not include a sensor placed on a fixed pivot point.
Claim 4 was allowed because it the fixed pivot point
limitation
© C. Nard - Fall 2015 - Law of Patents
Importantly, Asano was not before the PTO
KSR Int’l v. Teleflex, Inc.
256

According to the DCt, claim 4 was obvious:
 Asano
taught everything in claim 4 except the use
of a sensor to detect the pedal’s position and
transmit it to the computer controlling the throttle.
 This feature was shown in the ‘068/‘811 patents
and the Chevrolet sensors

The Fed Cir reversed based on the failure of
the DCt to properly apply the TSM test
© C. Nard - Fall 2015 - Law of Patents
128
9/21/2015
KSR Int’l v. Teleflex, Inc.
257

SCt reversed Fed Cir based on several
grounds:
 1.
Fed Cir erred by holding that courts and
examiners should look only to the problem the
patentee was trying to solve
 2.
Fed Cir erred by assuming that a
PHOSITA attempting to solve a problem will be
led only to those elements of prior art designed to
solve the same problem
 3.
Fed Cir drew wrong conclusion from the
risk of courts and examiners falling prey to
hindsight bias
© C. Nard - Fall 2015 - Law of Patents
KSR Int’l v. Teleflex, Inc.
258

Factors for an obviousness determination:
 1.
inter-related teachings of the patents
 2. demands known to the design community
 3. scientific literature and market demand
 4. background knowledge of PHOSITA and
inferences/creative steps he would employ
 5. Any need or problem known in the field of
endeavor
 6. Uses of items beyond their primary purpose
© C. Nard - Fall 2015 - Law of Patents
129
9/21/2015
Perfect Web Tech. v. InfoUSA,
Inc.
259
Post-KSR
1-3 + 4-7
Pre-KSR

A reason, suggestion, or motivation to combine may be found
explicitly or implicitly:
 1. in the prior art references themselves;
 2. in the knowledge of the PHOSITA that certain
references, or disclosures in those references, are of
special interest or importance in the field;
 3. from the nature of the problem to be solved;
 4. market forces;
 5. design incentives;
 6. any known problem in the field of endeavor at the time
of the invention and addressed by the patent; and
 7. background knowledge, creativity, and common sense
of the PHOSITA
© C. Nard - Fall 2015 - Law of Patents
260
Constructing the PHOSITA
© C. Nard - Fall 2015 - Law of Patents
130
9/21/2015
Daiichi Sankyo v. Apotex, Inc.
261



‘741 patent relates to method for treating
bacterial ear infections
DCt concluded that PHOSITA “would have a
medical degree, experience and use of
antibiotics – a pediatrician or general
practitioner – the first line of defense in treating
infections”
Apotex argues PHOSITA should be “a person
engaged in developing pharmaceuticals,
formulations and treatment methods, or a
© C. Nard - Fall 2015 - Law of Patents
specialist in ear treatments”
Daiichi Sankyo v. Apotex, Inc.
262







Constructing a PHOSITA: Factors
1. educational level of the inventor;
2. type of problems encountered in the art;
3. prior art solutions to those problems;
4. rapidity with which innovations are made;
5. sophistication of the technology; and
6. educational level of active workers in the
field
© C. Nard - Fall 2015 - Law of Patents
131
9/21/2015
Daiichi Sankyo v. Apotex, Inc.
263

According to the Federal Circuit:







The inventors of the ‘741 patent were specialists in drug
and ear treatments—not general practitioners or peds
Inventor Sato was a university prof specializing in
otorhinolaryngology
Inventor Handa was a clinical development manager,
involved in new drug development and clinical trials
Inventor Kitahara was a research scientist engaged in R&D
of antibiotics
Others in the same field were at the same skill level
Nature of the problem—testing on guinea pigs
Difference b/t prescribing and developing
© C. Nard - Fall 2015 - Law of Patents
264
Available Prior Art and the
Analogous Art Doctrine
© C. Nard - Fall 2015 - Law of Patents
132
9/21/2015
In re Icon Health & Fitness
265





‘624 patent claims a treadmill with a folding base,
allowing the base to swivel into an upright storage
position
The only limitation at issue is the gas spring “to
assist in stably retaining” the tread base in the
upright position
Examiner combined Damark ad and Teague ‘766
patent
Damark discloses a folding treadmill but not the gas
spring
Teague discloses a gas spring in the context of a
© C. Nard - Fall 2015 - Law of Patents
bed that folds into a cabinet or recess
In re Icon Health & Fitness
266

Section 103 requires analogous prior art. Art is
analogous if:
1. the art is from the same field of endeavor,
regardless of the problem addressed, or
 2.
the art is not within the field of the inventor’s
endeavor, but the reference is reasonably pertinent
to the particular problem with which the inventor is
involved


A reference is reasonably pertinent if it is one
which, because of the matter with which it deals,
logically would have commended itself to an
© C. Nard - Fall
- Law of Patents
inventor’s attention
in2015
considering
his problem
133
9/21/2015
In re Icon Health & Fitness
267
1. The Teague springs produce a force
always urging the tread base towards the
closed position – exactly the type of
mechanism that Icon argues its claims
require;
 2. Icon’s application discusses the gas
spring in connection

© C. Nard - Fall 2015 - Law of Patents
268
Secondary Considerations
© C. Nard - Fall 2015 - Law of Patents
134
9/21/2015
Transocean Offshore v. Maersk
269
The patents-in-suit recite a derrick with both a
main and an auxiliary advancing station, each of
which can separately assemble drill strings and
lower components to the seafloor.
This advancement ins the art makes the process
of creating a borehole and drilling more
efficient because each component does not
have to be assembled and disassembled each
time a component is lowered
© C. Nard - Fall 2015 - Law of Patents
“Evidence of secondary considerations may often
Transocean
Maersk
be the
most probativeOffshore
and cogent v.
evidence
in the
record. It may often establish that an invention
 The establishment
of a prima
facieincase
appearing
to have been
obvious
lightofof the
obviousness
is notPage
a conclusion
prior
art was not”
429. on the ultimate
270


issue of obviousness. By definition, the existence of
a prima facie case simply means that the party
challenging a patent has presented evidence
“sufficient to establish a fact or raise a presumption
[of obviousness] unless disproved or rebutted.”
The prima facie inquiry is based on the first three
Graham factors
A patentee is free to introduce evidence of the
fourth factor, secondary considerations
© C. Nard - Fall 2015 - Law of Patents
135
9/21/2015
The Factors
271
Commercial Success
 Nexus required because commercial success may be due to
factors unrelated to claimed invention (e.g.
marketing/advertising)
 Industry Praise and Unexpected Results
 Praise must be tied to claimed invention
 Long-Felt Need
 Competitors may have different R&D priorities
“Transocean
presented evidence that royalties paid under the

Copying
licenses exceed any litigation costs” – why is this an important
point?
 Competitor may think patent is invalid
 Licensing/Acquiescence
 Settlement or licensing can be a result of a cost/benefit
© C. Nard - Fall 2015 - Law of Patents
analysis; less expensive to settle than litigate

272
Chapter 6
Statutory Bars
REFORM ALERT: AIA
MERGED STATUTORY
BARS INTO A NOVELTY
RULE
© C. Nard - Fall 2015 - Law of Patents
136
9/21/2015
The Anatomy of § 102
273
Novelty
(a), (e) & (g)(2)
 Statutory Bars
(b)
Public Use
On-Sale

© C. Nard - Fall 2015 - Law of Patents
274
§ 102(b) Statutory Bars:
Public Use & On-Sale Activity
Trigger Date
Filing Date
One Year Grace Period
© C. Nard - Fall 2015 - Law of Patents
137
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Policies Underlying § 102(b)
275




Removing Inventions from the public that the
public has come to believe are free for all to use
Prompt and widespread disclosure
Prevent commercial exploitation beyond the
statutory term of patent
Economic or market trial balloon for inventor
© C. Nard - Fall 2015 - Law of Patents
The On-Sale Bar
276
© C. Nard - Fall 2015 - Law of Patents
138
9/21/2015
277
The Developmental State of the
Claimed Invention
© C. Nard - Fall 2015 - Law of Patents
On-Sale Bar
Texas Instruments
US Patent
Application
Purchase Order
Vendor: Pfaff
30,100 chip carriers
Drawings shown to TI
April 8, 1981
Critical
Date
To: TI
Pfaff
One Year Grace Period
March 17 Apr 8
Apr. 19, 1981
278
July 1981
Apr. 19, 1982
An invention is barred under §102(b) if, more than one year prior to the date
of application:
1.The invention is the subject of a commercial offer for sale, and
2.The invention is “ready for patenting”
• An invention is ready for patenting when it has been reduced to practice
or described sufficiently to enable a person skilled in the art to practice
the invention (in other words, actually or constructively reduced to
© C. Nard - Fall 2015 - Law of Patents
practice)
Pfaff v. Wells Electronics, Inc., 525 U.S. 55 (1998)
139
9/21/2015
Pfaff v. Wells Electronics, cont.
279


Why is developmental stage of invention important
for an on-sale analysis?
At what stage was Pfaff’s invention at time of
triggering event?
 RTP
 Substantially

complete
What did the SCt court adopt?
© C. Nard - Fall 2015 - Law of Patents
280


Space Systems v. Lockheed
Martin
‘375 patent relates to
attitude control system
for maintaining position
and orientation of
satellite
‘375 in particular
employs “pre-bias”
techniques for station
keeping
© C. Nard - Fall 2015 - Law of Patents
140
9/21/2015
Space Systems v. Lockheed
Martin
281



1. Ford sent French company document
entitled “Engineering Change Proposal”
(ECP) that described prebias idea and how
Chan proposed to achieve it – technical steps
2. Drawings were included in ECP and costs
of developing system
3. DCt held this submission was an
invalidating on-sale event, citing Pfaff v. Wells
Electronics
© C. Nard - Fall 2015 - Law of Patents
282
Space Systems v. Lockheed
Martin
Ford ECP
19 March 1982
Critical Date
21 April 1982
‘375 Filing date
one year
21 April 1983
What two on-sale criteria must Lockheed prove were present at this time point?
© C. Nard - Fall 2015 - Law of Patents
141
9/21/2015
Space Systems v. Lockheed
Martin
283

Lockheed argues:
 1.
On-Sale event attaches when inventor offers
for sale a product that has reached the
“conception stage”
 2. There was conception on 19 March 1982, and
therefore, invention was ready for patenting
because patent application could have been filed

SSL argues:
 1.
As of 19 March 1982, Chan’s idea was not
ready for patenting (no feasibility study) and not
enabled
© C. Nard - Fall 2015 - Law of Patents
 2.
Chan supporting testimony
Space Systems v. Lockheed
Martin
284




At what developmental stage must the invention be
for the on-sale clock to begin to run?
DCt held “legal conception”
CAFC reversed, stating SCt in Pfaff defined “ready
for patenting” as either ARTP or enablement
No enablement present on 19 March 1982,
particularly since pre-bias technique was a complex
invention
© C. Nard - Fall 2015 - Law of Patents
142
9/21/2015
285
What Constitutes an Offer for Sale?
© C. Nard - Fall 2015 - Law of Patents
Plumtree Software v. Datamize
286

Timeline:
 1994:
MA completed development of authoring
tool that could be used to create kiosks
 1/17/95: MA gave presentation to reps at Ski
Industry of America (SIA) – a trade show.
Invention RTP already
 1/25/95: SIA sent letter to MA confirming MA
would provide kiosk at trade show in exchange for
SIA’s waiving the 10K sponsorship fee
 27 February 1995 – CRITICAL DATE
 March 1995 trade show held in Las Vegas where
© C. Nard - Fall 2015 - Law of Patents
MA kiosk was displayed
143
9/21/2015
Plumtree Software v. Datamize
287



DCt held MA patents invalid as on sale based
on DCt view that at 1/17/95 meeting MA
offered to provide kiosk system during March
1995 trade show
MA received consideration in the form of
waived 10K SIA fee and granted a “prime”
location
Kiosks at trade show embodied all of the claim
limitations
© C. Nard - Fall 2015 - Law of Patents
Plumtree Software v. Datamize
288

Two alternative theories for Plumtree to meet
the first prong of Pfaff:
 1.
Before critical date MA made a commercial
offer to perform patented product (even if
performance itself occurred after the CD)
 2. Demonstrate MA performed the patented
method before CD for a promise of future
compensation
© C. Nard - Fall 2015 - Law of Patents
144
9/21/2015
Plumtree Software v. Datamize
289

Theory One:
 Did
MA make a commercial offer?
 How is commercial offer defined? One which the other
party could make into a binding K by simple acceptance
 MA made a commercial offer b/f the CD, but the offer did
not unambiguously require use of the patented method
 The reference to the software/hardware package is
ambiguous as to whether it required MA to provide the
kiosk system software or perform the patented method
© C. Nard - Fall 2015 - Law of Patents
Plumtree Software v. Datamize
290

Theory Two:
Did MA actually perform
the patented method steps
b/f the CD?
 Selling a product made by
the patented process
constitutes a sale, and
performing the patented
method constitutes a sale
 Kiosk system, which
employed patented method,
was not made until after
CD.

© C. Nard - Fall 2015 - Law of Patents
145
9/21/2015
Offer or No Offer?
291
have developed a machine which can curl and
shred ribbon so that Hallmark can produce the product
you see enclosed – a bag of already curled and
shredded ribbon…. We could provide the machine
and/or the technology and work on a license/royalty
basis”
 Is this an offer?
 Group One, Ltd. v. Hallmark Cards, Inc., 254 F.3d
1041, 1044 (Fed. Cir. 2001) (holding language NOT a
commercial offer)
 “We
© C. Nard - Fall 2015 - Law of Patents
292

So What Constitutes an
“Offer?”
“Contract law traditionally recognizes that mere
advertising and promoting of a product may be
nothing more than an invitation for offers, while
responding to such an invitation may itself be an offer.
Restatement (Second) of Contracts sec. 26 (1981). In
any given circumstance, who is the offeror, and what
constitutes a definite offer, requires looking closely at
the language of the proposal itself. Language
suggesting a legal offer, such as “I offer” or “I
promise” can be contrasted with language
suggesting more preliminary negotiations, such as “I
© C. Nard - Fall 2015
- Law of
quote” or “are you interested.” Differing phrases
are
Patents
f ff
”G
O
146
9/21/2015
293
Public-Use Bar
© C. Nard - Fall 2015 - Law of Patents
Egbert v. Lippmann
The “Corset Case”
294
© C. Nard - Fall 2015 - Law of Patents
147
9/21/2015
Egbert v. Lippmann, cont.
295


A minimalist approach:
To constitute the public use of an invention
1. Not necessary that more than one of the
patented articles should be publicly used
2. Does not depend on number of person to whom
the invention’s use is known
3. Some inventions by their character are only
capable of being used where the cannot be seen by
the public eye
© C. Nard - Fall 2015 - Law of Patents
Egbert v. Lippmann, cont.
296



Why did the court adopt such a minimalist approach
to public use?
What result if Frances were the inventor and, while
not disclosing or showing the corset to anyone, wore
and used the corset for its intended purpose?
What result if Frances were the inventor and
disclosed the corset to Samuel, who comprehended
its design, but never used the corset for its intended
purpose
© C. Nard - Fall 2015 - Law of Patents
148
9/21/2015
Egbert v. Lippmann, cont.
297
What about the Dissent?
“If a little steep spring inserted in a single pair of
corsets, and used by only one woman, covered by her
outer-clothing, and in a position always withheld
from public observation, is a public use of that piece
of steel, I am at a loss to know the line between a
private and a public use.”

© C. Nard - Fall 2015 - Law of Patents
298
Motionless Keyboard v.
Microsoft
‘477 and ‘322 patents related to
ergonomic keyboard designed to
accommodate the architecture of
the human hand
© C. Nard - Fall 2015 - Law of Patents
Mr. Gambaro, our attic inventor
149
9/21/2015
Motionless Keyboard v.
Microsoft
299






What do we know?
Mr. Gambaro entered into business relationship with Mr.
Coulter, and then sought to obtain financial backing
Gambaro demonstrated the Cherry Model 5 to potential
investors and a friend, Ms. Roberts
Potential investors signed a two-yr NDA, some of which
expired in 1989; Mr. Coulter and Ms. Roberts did not sign an
NDA
Gambaro also disclosed the Cherry Model 5 to Ms. Lanier to
conduct typing tests
Only Ms. Lanier used the device to transmit data to a
computer
© C. Nard - Fall 2015 - Law of Patents
Motionless Keyboard v.
Microsoft
300



Was the ‘322 patent claimed invention in public use
prior to the critical date of 11 January 1992?
Although Cherry Model 5 embodied the claimed
invention, CAFC found no public use
According to court: “Public use includes ‘any
[public] use of [the claimed] invention by a person
other than the inventor who is under no limitation,
restriction or obligation of secrecy to the
inventor.’”
© C. Nard - Fall 2015 - Law of Patents
150
9/21/2015
Motionless Keyboard v.
Microsoft
301


All disclosure, except for Lanier’s typing test,
only provided a visual view of the keyboard
design without any disclosure of the Cherry
Model 5’s ability to translate finger
movements into actuation of keys to transmit
data.
In short, the Cherry Model 5 was never
connected to be used in the normal course of
business to enter data into a system – thus,
never used for its intended purpose. On this
© C. Nard - Fall
- Law of Patents
ground, Motionless
is2015distinguishable
from
Egbert and Electric Storage
302
Third-Party Activity
© C. Nard - Fall 2015 - Law of Patents
151
9/21/2015
Lorenz v. Colgate-Palmolive
303







Lorenz filed on 24 January 1920
Lorenz communicated substance to Ittner
Ittner and Colgate said no thanks
PTO rejected Lorenz application & Lorenz
abandoned application
Patent issued to Ittner on 18 July 1933 on
application filed in 1931
Lorenz files new application on 8 Nov 1931
Interference declared and Lorenz wins
© C. Nard - Fall 2015 - Law of Patents
Lorenz v. Colgate-Palmolive, cont.
304





Why was Lorenz patent in public use?
Was it the intention of Congress that public use by one who
employs a process in breach of a fiduciary relationship, who
tortiously appropriates it or who pirates it, should bar the
inventor from the fruits of his monopoly?
“[T]he defense of public use in reality is asserted on behalf of
the public…. The prior-public-use proviso … was enacted by
Congress in the public interest.”
Is it also in the public interest if patent law were to prevent
third-party disclosures from acting as potential statutory bars?
“He [i.e., the inventor] is master of the situation and by
prompt action can protect himself fully and render the defense
of prior public use impossible.”
© C. Nard - Fall 2015 - Law of Patents
152
9/21/2015
Evans Cooling v. GM
305



John Evans claimed he reduced the invention to practice in
1986 but failed to file an application for some six years
GM had overwhelming evidence that it offered the claimed
invention for sale before the critical date
But Evans asks court to rule that an otherwise invalidating
offer for sale does not invalidate a patent “where a third party
surreptitiously steals an invention while it is a trade secret and
then, unbeknownst to the inventor, allegedly puts the
invention on sale [more than one year] before the inventor
files a patent application covering the stolen invention.”
© C. Nard - Fall 2015 - Law of Patents
Evans Cooling v. GM
306

Evans cites three SCt cases:
 Pennock,

Shaw, and Kendall
How does the Fed Cir address these cases?
 Dicta
 What
about Lorenz?
 Dealers and Mr. Najarian engaged in innocent use
© C. Nard - Fall 2015 - Law of Patents
153
9/21/2015
Public Use under §102(b)
Informing
Use
Non-Informing
Use
Secret Use
(public use or sale of product
made from secret process)
Metalizing Eng’g Co.
v. Kenyon Bearing,
153 F.2d 516
(2d Cir. 1946)
Inventor
Egbert v. Lippmann,
104 U.S. 333 (1881)
Third
Party
307
?
No
W.L. Gore v. Garlock,,
721 F.2d 1540
(Fed. Cir. 1983)
© C. Nard - Fall 2015 - Law of Patents
AIA Review
308
© C. Nard - Fall 2015 - Law of Patents
154
9/21/2015
Pre-AIA Section 102
309
A person shall be entitled to a patent unless -(a) The invention was known or used by others in this
country, or patented or described in a printed
publication is this or a foreign country, before the
invention thereof by the application for patent, or
(b) The invention was patented or described in a printed
publication in this or a foreign country or in public use or
on sale in this country, more than one year prior to the
date of the application for patent in the United States, or
…
(g)(1) during the course of an interference … another
inventor involved therein establishes … that before such
© C. Nard - Fall 2015 - Law of Patents
person’s invention thereof
the invention was made by
h th i
t
d t b d
d
d
310
New Section 102(a)
(a) NOVELTY; PRIOR ART.--A person shall be entitled
to a patent unless-(1) the claimed invention was patented, described in
a printed publication, or in public use, on sale, or
otherwise available to the public before the
effective filing date of the claimed invention; or
(2) the claimed Prior
invention
was
described in a patent
Art
Events
issued under section 151, or in an application for
patent published or
deemed Date
published under section
Critical
122(b), in which the patent or application, as the case
may be, names another inventor and was effectively
filed before the effective
filing date of the claimed
© C. Nard - Fall 2015 - Law of Patents
invention.
155
9/21/2015
102(a)
sets forth
the
priority
102(a)
– A person
shall be
entitled
to a rule
patent
unless:
1. The rule: critical date for priority is now the
(1) the
claimed
invention
wasv. patented,
effective
filing date
– inventor
inventor;
described
in
a
printed
publication,
or in public
2. Prior art consists of all statutory references
prior
the critical available
date (i.e., effective
use,available
on sale,
or to
otherwise
to the
filing
date) –the
inventor
v. priorfiling
art; date of the
public
before
effective
3. Statutory prior art references include:
claimed
invention;
… References Include
Statutory
Prior Art
- Patents and printed publications that disclose the
311
-
claimed invention before effective filing date;
Claimed invention was in public use, on-sale, or
otherwise known to the public before effective
filing date
© C. Nard - Fall 2015 - Law of Patents
102(a) - Important Points
312
1. Change from First-to-Invent to FirstInventor-to-File;
 2. Novelty and Statutory Bars (Prejudicial
Disclosures) are unified in one section under
the heading “Novelty; Prior Art”
 3. Geographic distinction for prior art
eliminated;
 4. Several terms from 1952 Patent Act retained
(e.g., “public use” and “on-sale”);
 5. A significant (but incomplete) step toward
© C. Nard - Fall 2015 - Law of Patents
harmonization…. Why incomplete?
-
156
9/21/2015
New Section 102(b)
313
(b) EXCEPTIONS.-(1) DISCLOSURES MADE 1 YEAR OR LESS BEFORE
THE EFFECTIVE FILING DATE OF THE CLAIMED
INVENTION.--A disclosure made 1 year or less before
the effective filing date of a claimed invention shall not
be prior art to the claimed invention under subsection
(a)(1) if—
(A) the disclosure was made by the inventor or joint
inventor or by another who obtained the subject matter
disclosed directly or indirectly from the inventor or a joint
inventor; or
(B) the subject matter disclosed had, before such
© C. Nard - Fall 2015 - Law of Patents
disclosure, been publicly
disclosed by the inventor
j i ti
t
th
h bt i d th
bj t
314
102(b) sets forth the exceptions to
the priority rule of 102(a)
1. Exception One: Inventor files within 12
months of his own disclosure; no intervening
competitor disclosure
12 month Grace Period
Inventor disclosure
date
(e.g., publication or
© C. Nard - Fall 2015 - Law of Patents
non-informing public use)
Inventor filing
157
9/21/2015
Questions about Exception One
Sec. 102(b) DISCLOSURES MADE 1
Question
1: What
typeBEFORE
of inventor disclosure
YEAR
OR
LESS
THE
qualifies under 102(b)(1)?
EFFECTIVE
FILING
DATE
THE
Answer: Any type
of “disclosure”
as OF
defined
in
102(a)(1), namely
patents, publications,
public
CLAIMED
INVENTION.
A disclosure
use, on-sale activity, etc. This includes confidential
made
1 year or less before the effective
sales and non-informing public uses.
filing
date2:ofWhy
a claimed
invention
shall
Questions
does prior art
in 102(a) equate
withbe
“disclosure”
102(b)?
not
prior artin to
the claimed invention
Answer:
Section 102(b)(1)
specifically equates the
under
subsection
(a)(1)…
315
term “disclosure” with the the prior art in
102(a)(1).
© C. Nard - Fall 2015 - Law of Patents
Linkage between “disclosure” and (a)(1)
Questions about Exception One,
(b) EXCEPTIONS.-cont.
(1)
DISCLOSURES
MADE 1 YEAR OR LESS BEFORE
316
THE EFFECTIVE FILING DATE OF THE CLAIMED
Question 3: Why are confidential sales and non-informing
INVENTION.--A
disclosure made 1 year or less before
public uses included in definition of disclosure?
the effective filing date of a claimed invention shall not
Answer:
be prior art to the claimed invention under subsection
1. Prior to AIA, it was well understood that an inventor’s
(a)(1) if—
disclosure
confidential
sale or non-informing public use were prior art
(A)
The that triggered
was the
made
by thegrace
inventor
or joint
events
one-year
period;
inventor
or by
who obtained
the
subject matter
2. By using
theanother
terms “public
use” and
“on-sale”
in the
disclosed
directly
or indirectly
from the
inventor
or a joint
AIA, Congress
meant
for the pre-AIA
common
law
interpretations
to carry
over;
inventor;
or
publicly
disclosed
3. Section
102(b)(1)(B)
includes the
(B)
the subject
matter disclosed
had,modifier
before “publicly”
such
before
the
word
“disclosed”
–
the
word
“publicly”
isby
notthe
disclosure [by a third party], been
used in 102(b)(1)(A).© C.Thus,
the
term “publicly” must be
Nard - Fallor
2015another
- Law of Patents who obtained the
inventor
or a joint inventor
given meaning
subject matter disclosed directly or indirectly from the
158
9/21/2015
317

102(b) sets forth the exceptions to
the priority rule of 102(a)
2. Exception Two: Inventor publicly discloses prior to a
third-party disclosure and files within 12 months of
Inventor’s public disclosure
12 Month Grace Period
Inventor public
Competitor discloses*
Inventor filing date
disclosure
(e.g., publication)
© C. Nard - Fall 2015 - Law of Patents
*Competitor disclosure
must be public to qualify as prior art
event
Questions about Exception Two
318
Question 1: What type of inventor disclosure qualifies
under 102(b)(2)?
Answer: Same as under 102(b)(1), BUT inventor’s
disclosure must be public. Non-informing public uses and
confidential sales DO NOT qualify because they are not
public.
Question 2: Why would Congress use the term “publicly”
in section 102(b)(1)(B) but not 102(b)(1)(A)?
Answer: To take advantage of the grace period when a
third-party intervenes (thus disclosing the claimed
invention to the public), patent law requires the inventor to
also give the public something of equal or greater value
© C. Nard - Fall 2015 - Law of Patents
159
9/21/2015
319
Questions about Exception Two,
cont.
Question 3: Why must competitor disclosure be public to
act as prior art?
Answer: Consistent with pre-AIA caselaw. The policy
reflects the need to provide an inventor with certainty as to
when he needs to file his patent application within the oneyear grace period.
Also, “[a]s between a prior inventor who benefits from a process
byisselling
its product
but suppresses,
conceals,
or otherwise
It
difficult
for an inventor
to discover
a third
party prior art
keeps
the
process
from
the
public,
and
a
later
inventor
event that is not public (even public disclosure arewho
difficult
promptly
filessometimes).
a patent application
the public will
gain
to
discover
This isfrom
whywhich
an inventor’s
own
a
disclosure
of
the
process,
the
law
favors
the
latter.”
W.L.
Gore
confidential sale or secret commercial exploitation does
& Assoc.the
v. Garlock,
Inc.,
721 period
F.2d 1540,
1550
(Fed. Cir.
trigger
one-year
grace
– the
inventor
can1983)
control
© C. Nard - Fall 2015 - Law of Patents
these and obviously has
knowledge of such.
Absolute Novelty Scenario
320
Inventor discloses or files after a third-party disclosure
One Day
Competitor discloses*
Inventor filing
-102(b)(1)(B) the subject matter disclosed had,
date
before such
disclosure [by a third party], been publicly disclosed
*Competitor disclosure must be public to qualify as
by the inventor or a joint inventor or another who
prior art event
© C. Nard - Fall 2015 - Law of Patents
obtained the subject
matter disclosed directly or
i di tl f
th i
t
j i ti
t
160
9/21/2015
102(b) - Important Points
321
1. Absolute novelty attaches if third party publicly discloses claimed
invention prior to inventor disclosing or filing patent application.
Compare Art. 54 EPC. This is new to U.S.
-
2. But grace period triggered if:
- A. Inventor discloses and files application within one year from
his disclosure (same as old 1952 grace period in sec. 102(b));
OR
- B. Inventor publicly discloses prior to third-party public
disclosure or filing of patent app AND Inventor files patent app
within one year from Inventor disclosure
-
3. This is why it is more accurate to describe American system as
first-inventor-to-file
- An Inventor who publicly discloses first but files second (as long
© C. Nard - Fall 2015 - Law of Patents
as within 12 months from disclosure) will be the inventor entitled
to the patent
-
Practical Considerations
322
1. An inventor must anticipate a third-party public
disclosure to protect against a prior art event. Recall,
the only way to prevent an absolute novelty situation
is for the inventor to publicly disclose the claimed
Response:
File to
a the
provisional
patent application
invention prior
third-party disclosure;
to buy
time,
and –perhaps
a immunize
non-provisional
within
2. An
inventor
seeking to
himself from
a
disclosure
– who
publicly
12 potential
months third-party
of provisional
to buy
more
time and
discloses prior to filing may sacrifice foreign patent
preserve
tradeon
secrecy
rights based
absolute novelty provisions outside
the U.S.
 3. Early public disclosure also potentially sacrifices
trade secret rights at a very early stage when
© C. Nard - Fallpotential
2015 - Law of Patents
uncertainly as to market
and funding is high

161
9/21/2015
323
Experimental Use
© C. Nard - Fall 2015 - Law of Patents
City of Elizabeth v. American
Nicholson
324


Mr. Nicholson and his new and improved wooden
pavement
The specification read:
“ the nature and object of the invention consists in
providing a process or mode of constructing wooden
block pavements upon a foundation along a street or
roadway with facility, cheapness, and accuracy” and it
shall be comparatively permanent and durable, … as to
provide against the slipping of the horses' feet, against
noise, against unequal wear, and against rot and
consequent sinking away from below
© C. Nard - Fall 2015 - Law of Patents
162
9/21/2015
City of Elizabeth, cont.
325

According to the court:
“[I]f use under the surveillance of the inventor, and for
the purpose of enabling him to test the machine, and
ascertain whether it will answer the purpose intended,
and make such alterations and improvements as
experience demonstrates to be necessary, it will still be
a more experimental use, and not a public use, within
the meaning of the statute. So long as he does not
voluntarily allow others to make it and use it, and so long
as it is not on sale for general use, he keeps the
invention under his own control, and does not lose his
title to a patent.
C. Nardinvention
- Fall 2015 - Law ofthat
Patents
“ It is not a public knowledge of ©his
precludes the inventor from obtaining a patent for it, but
Experimental Use
326
75 feet
- Number of prototypes
andv.duration
the testing
City of Elizabeth
Americanof
Nicholson
Pavement Co., 97 U.S. 126 (1877)
- Whether records or progress reports were made concerning
the testing
- The existence of a secrecy agreement between the patentee
Factors:
and the party preforming the testing
- •Whether
patentee
received
compensation
for the useto
of practice
goodthe
faith
effort
to reduce
invention
the invention
invention
in private
- •Extent
of control cannot
the inventorfeasibly
maintainedbe
overtested
the testing
• due diligence
Lough v. Brunswick Corp. (Fed. Cir. 1996)
• under control
of inventor
Testing the invention vs. testing the market
© C. Nard - Fall 2015 - Law of Patents
163
9/21/2015
City of Elizabeth, cont.
327



What is the significance of
Mr. Nicholson’s cane for
Justice Bradley?
Control: As the court stated,
Nicholson “kept it under his
own eyes.”
But why is control important
for a public use claim?
More generally, what is the
policy of the public use
exception?
Mr. Nicholson
© C. Nard - Fall 2015 - Law of Patents
Lisle Corp. v. A.J. Mfg.
328


Patent related to inner a
tie rod tool;
In particular, the
invention sought to
alleviate the need for
auto mechanics to
completely dismantle
steering control
systems and keep
multiple prior art tie rod
tools for various inner
tie rod designs. © C. Nard - Fall 2015 - Law of Patents
164
9/21/2015
Lisle Corp. v. A.J. Mfg. Co.
329

What is A.J.’s principal argument?
 Lisle
lacked control
 Lack of a formal confidentiality agreement
 Lack of restrictions placed on the use of the
prototype tool by the mechanics
 The absence of any documentary evidence
regarding the actual testing of the prototype
tool
© C. Nard - Fall 2015 - Law of Patents
Lisle Corp. v. A.J. Mfg. Co.
330

What are Lisle’s arguments?





Williams needed to know how well the wrench disc would fit on the
inner tie rod socket and whether the prototype tool would fit in the
confined location of the tie rod in different automobile models
Under company protocol, he and other engineers at Lisle would have
contacted the mechanics who were given the prototype tool every two
to four weeks by telephone or in person to receive testing feedback
He modified the design of the retainer in the prototype tool and added
additional wrench disc sizes based on comments he received from the
outside mechanics
Although there was no formal confidentiality agreement between Lisle
and the mechanics who were given the prototype tools, Lisle had prior
working relationships with those mechanics
General Meeting Reports
© C. Nard - Fall 2015 - Law of Patents
165
9/21/2015
331
Chapter 7 – Enforcing Patent
Rights
© C. Nard - Fall 2015 - Law of Patents
A Big Player’s Game
332
© C. Nard - Fall 2015 - Law of Patents
166
9/21/2015
333
Calvin’s Dad Was a Patent
Attorney
© C. Nard - Fall 2015 - Law of Patents
334
The Right to Exclude:
§154(a)(1)
“[A] patent shall contain … a grant … of the
right to exclude others from making, using,
offering for sale, or selling the invention
throughout the United States or importing the
invention into the United States.”
© C. Nard - Fall 2015 - Law of Patents
167
9/21/2015
§ 271(a)
335
“[W]hoever, without authority makes, uses,
offers to sell, or sells any patented invention
within the United States or imports into the
United States any patented invention during
the term of the patent therefor, infringes the
patent.”
© C. Nard - Fall 2015 - Law of Patents
The Enforcement Roadmap
336
1.
Claim Interpretation
a.
b.
2.
Direct Infringement
a.
b.
3.
Who Interprets?
Tools of Interpretation and Interpretive Methodologies
Literal
Non-Literal Infringement / Doctrine of Equivalents
(DOE)
Indirect Infringement
a.
b.
Contributory
Active Inducement
© C. Nard - Fall 2015 - Law of Patents
168
9/21/2015
© C. Nard - Fall 2015 - Law of Patents
337
Compare European Model
338





Enforcement resides in national jurisdictions
There is no federalized system of courts for
patents
Can be expensive, lead to forum shopping,
and fractured rulings
Creation of Unified Patent Court that will
have validity and infringement jurisdiction over
all unitary patents and traditional European
Patents
Translation is required if infringer is from
member state with language other than three
© C. Nard - Fall 2015 - Law of Patents
official EPO langauges
169
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Unified Court Structure
339
© C. Nard
- Fall 2015
- Law of Patents
London: Chemistry and Pharma
Munich:
Mechanical
Eng
Paris: Everything else
Jurisdiction of UPC
340
© C. Nard - Fall 2015 - Law of Patents
170
9/21/2015
341
Number of patent cases filed in
U.S.
2013 PWC Patent Litigation Study
© C. Nard - Fall 2015 - Law of Patents
Success rates: bench v jury trial
342
Highest Success Rates: Telecom, Software, Hardware, Medical Device, Consumer Services
Lowest Success Rates: Biotec/Pharma, Chemicals, Automotive
2011 PWC Patent Litigation Study
© C. Nard - Fall 2015 - Law of Patents
171
9/21/2015
Median Time-to-Trial (Complaint to
Trial)
343
2013 PWC Patent Litigation Study
344
© C. Nard - Fall 2015 - Law of Patents
Most Favorable Venues of Patentees
Based on: 1. time-to-trial; 2. awarded damages;
and 3. overall success rate
2013 PWC Patent Litigation Study
© C. Nard - Fall 2015 - Law of Patents
172
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345
346
© C. Nard - Fall 2015 - Law of Patents
Success rate based on industry 2012
2013 PWC Patent Litigation Study
© C. Nard - Fall 2015 - Law of Patents
173
9/21/2015
347
But… when it comes to
damages
10th most cases,
but highest
damages awarded
Most cases, but
small damages
Number of identified decisions
(e.g. 15 for chemicals; 21 for
telecommunications)
2013 PWC Patent Litigation Study
© C. Nard - Fall 2015 - Law of Patents
348
A. Claim Interpretation
© C. Nard - Fall 2015 - Law of Patents
174
9/21/2015
Markman v. Westview
349



Who interprets claim language? Judge or Jury
What is the Court’s rationale for holding claim interpretation
is the province of the judge?
What are the functional considerations?



“The construction of written instruments is one of those things that
judges often do and are likely to do better than jurors unburdened by
training in exegesis.”
The judge, from his training and discipline, is more likely to give a
proper interpretation to such instruments than a jury; and he is,
therefore, more likely to be right, in performing such a duty, than a jury
can be expected to be.”
How is uniformity served by having the judge as arbiter of
claim meaning?
© C. Nard - Fall 2015 - Law of Patents
The Standard of Review Issue
350



The Federal Circuit held in Markman I that claim
interpretation is a question of law subject to de novo review
Did the Supreme Court in Markman II affirm the Federal
Circuit’s characterization?
 Claim interpretation is a “mongrel practice” that “falls
somewhere between a pristine legal standard and a simple
historical fact”
The Federal Circuit Cybor decision and high reversal rates
 The persistence of de novo review
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351
B. Infringement
© C. Nard - Fall 2015 - Law of Patents
352
1. Literal Infringement
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176
9/21/2015
Larami Corp. v. Amron
353



© C. Nard - Fall 2015 - Law of Patents
Does the SUPER SOAKER
20 of Larami literally
infringe claim 1 of the ‘129
patent?
Claim 1: “[a] toy
comprising an elongated
housing [case] having a
chamber therein for a
liquid [tank]”
Spec: “a chamber or tank
2 for liquid within the
confines of the barrel”
Larami Corp. v. Amron
354




Proving Infringement:
“[B]ecause every element of a claim is essential
and material to that claim, a patent owner must,
to meet the burden of establishing infringement,
“show the presence of every element or its
substantial equivalent in the accused device.”
If even one element of a patent's claim is
missing from the accused product, then “[t]here
can be no infringement as a matter of law
SUPER SOAKER does not infringe because its
chamber is not “therein”
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177
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355
2. Non-Literal Infringement
© C. Nard - Fall 2015 - Law of Patents
Graver Tank v. Linde Air
356




What is the policy underlying non-literal
infringement?
Fairness
Maintaining Incentives
Without the DOE, a patent would be converted into
a “hollow and useless thing” and encourage the
“unscrupulous copyist” and “pirate” to make
“unimportant and insubstantial changes,” and place
the inventor “at the mercy of verbalism”
© C. Nard - Fall 2015 - Law of Patents
178
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Graver Tank v. Linde Air
357

The DOE test under Graver:


Does the accused device “perform[] substantially the same
function in substantially the same way to obtain the same result”
“What constitutes equivalency must be determined against the
context of the patent, the prior art, and the particular
circumstances of the case. Equivalence, in the patent law, is not
the prisoner of a formula and is not an absolute to be considered
in a vacuum. It does not require complete identity for every
purpose and in every respect. Consideration must be given to
the [1] purpose for which an ingredient is used in a patent, [2] the
qualities it has when combined with the other ingredients, and [3]
the function which it is intended to perform. [4] An important
factor is whether persons reasonably skilled in the art would
have known of the interchangeability of an ingredient not
contained in the patent
with one that was.”
© C. Nard - Fall 2015 - Law of Patents
Graver Tank v. Linde Air
358


Was the Lincolnweld accused flux an equivalent in
the present case?
In other words:

“The question which thus emerges is whether the
substitution of the manganese which is not an alkaline
earth metal for the magnesium which is, under the
circumstances of this case, and in view of the
technology and the prior art, is a change of such
substance as to make the doctrine of equivalents
inapplicable; or conversely, whether under the
circumstances the change was so insubstantial that
the trial court's invocation of the doctrine of
equivalents was justified.”
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179
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Graver Tank v. Linde Air
359

Justice Black’s Dissent:

1. Statutory clear claiming requirement – definiteness


“What is not specifically claimed is dedicated to the public”
A claim is “not like a nose of wax which may be turned and
twisted in any direction, by merely referring to the
specification, so as to make it include something more than, or
something different from, what its words express”
2. Administrative reissue proceeding
 3. Separation of powers


“And Congress was careful to hedge the privilege of reissue
by exacting conditions. It also entrusted the Patent Office, not
the courts, with initial authority to determine whether
expansion of a claim was justified”
© C. Nard - Fall 2015 - Law of Patents
The Notice Argument
360


Primary argument against the DOE
It is inconsistent with clear notice of claim boundaries – fuzzy
boundaries
Which speed limit do you prefer?
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180
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Warner-Jenkinson v. Hilton Davis Chemical
Prior Art
Booth Patent
361
PTO
‘746 Patent
Ultrafiltration
process operating
at a pH above 9.0
Patent Application
In a process for the purification of a dye . . .
In a process for the
the improvement
purification ofwhich
a dye comprises:
. . . the
subjecting
improvement which
comprises:
subjecting
an aqueous
an aqueous
solution
to ultrafiltration
through
solution to ultrafiltration
throughhaving
a membrane
having
a membrane
a nominal
pore diameter
a nominal
diameter
of purification
5-15 Angstroms
under
In apore
process
for5-15
the
of
a dye
. . a. the
of
Angstroms
under
a hydrostatic
hydrostatic
pressure of
approximately
200
to 400200
improvement
which
comprises:
subjecting
antoaqueous
pressure
of approximately
400 at a
p.s.i.g. to
therebytocause
of saida impurities
solution
ultrafiltration
through
membrane
having
pHseparation
from approximately
6.0 to 9.0
p.s.i.g.
from said
dye.
a nominal poretodiameter
5-15separation
Angstroms
thereby of
cause
ofunder
said a
hydrostatic pressure
of approximately
200 to 400
impurities
from said dye.
at a pH from approximately 6.0 to 9.0
p.s.i.g. to thereby cause separation of said impurities
from said dye.
Claim Amendment
>
pH 5.0
Accused Process
© C. Nard - Fall 2015 - Law of Patents
Warner-Jenkinson v. Hilton
Davis
362


Supreme Court revisits the DOE nearly 50 years
after Graver Tank was decided
Why? Was Justice Black correct in his Graver
dissent when he wrote:
need not be a prophet to suggest that
today's rhapsody on the virtue of the ‘doctrine of
equivalents’ will, in direct contravention of
[precedent], make enlargement of patent claims
the ‘rule’ rather than the ‘exception.’”
 “One
© C. Nard - Fall 2015 - Law of Patents
181
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Warner-Jenkinson v. Hilton
Davis
363
Patentee added the phrase “at a pH from
approximately 6.0 to 9.0….”
 WJ developed a process that utilized a
pH of 5
 There was no literal infringement, so the
quesiton became:

 Is
a pH of 5 equivalent to a pH of 6?
© C. Nard - Fall 2015 - Law of Patents
Warner-Jenkinson v. Hilton
Davis
364

WJ argues:
 1.
DOE is inconsistent with §112, ¶2
definiteness requirement
 2.
DOE circumvents the reissue process
 3. DOE violates the primacy of the PTO –
separation of powers argument
 4. DOE implicitly rejected by Congress in 1952
when it enacted §112, ¶6
© C. Nard - Fall 2015 - Law of Patents
182
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Warner-Jenkinson v. Hilton
Davis
365




The Court’s analysis:
The All-Elements Rule was adopted
Court rejected Petitioner’s argument that “any surrender of
subject matter during prosecution, regardless of the reason,
precludes recapturing any part of that subject matter during
litigation under the DOE
You always look to the reason behind an amendment, but what
if – like here – a reason cannot be discerned?

The Court created a rebuttable presumption: The burden is on the
patentee to provide a reason; where no explanation is given, the
court should presume the PTO had a substantial reason related to
patentability for including the limiting element and bar application
of the DOE
© C. Nard - Fall 2015 - Law of Patents
Warner-Jenkinson v. Hilton
Davis
366

Court’s analysis, cont.
 Court
also rejected the arguments that:
 1. DOE should be limited to equivalents disclosed
in the patent itself, OR
 2. DOE should be limited to equivalents known at
the time the patent issued, thus not extending to
after-arising technologies
 According to the Court, equivalence is measured
at the time of infringement
© C. Nard - Fall 2015 - Law of Patents
183
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Modern Approach to DOE
367


Measuring equivalents at time of infringement
After-arising technology (post-issuance)
Patent issues
Infringing
activity
Litigation
After-arising technology
© C. Nard - Fall 2015 - Law of Patents
368
2. Limitations on the Doctrine of
Equivalents
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Limitations on the DOE
369
1. Prosecution History Estoppel
 2. Public Dedication Rule
 3. All-Limitations and Specific
Exclusion Rule
 4. Prior Art

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370

A. Prosecution History Estoppel
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185
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Festo v. Shoketsu
371

Language is a blunt tool:
nature of language makes it impossible to
capture the essence of a thing in a patent application”
 “The language in patent claims may not capture every
nuance of the invention or describe with complete
precision the range of its novelty”
 “[T]he

Two principal issues:
 What
kinds of amendments may give rise to PHE?
 If PHE applies, does it act as a complete bar to the
DOE or can the patentee still capture equivalents?
© C. Nard - Fall 2015 - Law of Patents
Festo v. Shoketsu, cont.
372





Issue One: Kinds of Amendments
“We agree with the [Federal Circuit] that a
narrowing amendment made to satisfy any
requirement of the Patent Act may give rise to
an estoppel.”
Issue Two: Effect of PHE
Federal Circuit overruled; flexible bar reinstated
The presumption: “We hold here that the
patentee should bear the burden of showing that
the amendment does not surrender the
particular equivalent in question” © C. Nard - Fall 2015 - Law of Patents
186
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Festo v. Shoketsu, cont.
373


“A patentee’s decision to narrow his claims
through amendment may be presumed to be a
general disclaimer of the territory between the
original claim and the amended claim”
But presumption will be rebutted if:
 Equivalent
unforeseeable at time of filing
 Amendment bears tangential relation to
equivalent
 Some other reason suggesting patentee did not
describe insubstantial substitute
© C. Nard - Fall 2015 - Law of Patents
Festo v. Shoketsu, cont.
374

In short, where patentee narrowed his claim,
he can rebut the presumption if:
“at the time of amendment one skilled in the
art could not reasonably be expected to have
drafted a claim that would have literally
encompassed the alleged equivalent”
© C. Nard - Fall 2015 - Law of Patents
187
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Festo and the Devolution of Responsibility
375
© C. Nard - Fall 2015 - Law of Patents
Festo – Warner-Jenkinson Flow Chart
Did the amendment narrow the literal scope of the claim?
If NO, then PHE does not apply
If YES, then ask:
Was the reason for the amendment related to
patentability?
If NO, then PHE does not apply
If NO reason is revealed in prosecution
history and patentee is unable to
provide reason, then Festo presumption
applies
If YES, Festo presumes patentee surrendered all
territory between original claim limitation and
amended claim limitation
Presumption can be rebutted if patentee can show
that either:
1. Equivalent was unforeseeable;
2. Rationale underlying amendment was merely
tangentially related to equivalent; or
3. There was another reason why the patentee
could not reasonably be expected to have described
the insubstantial substitute in question.
376
C. Nard - Fall 2015 - Law of Patents
If patentee successfully rebuts presumption, PHE
does not apply and the question whether the
accused element is equivalent to claim limitation is
reached on the merits
188
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Is the SCt anti-patent?
377
© C. Nard - Fall 2015 - Law of Patents
378
B. Public Dedication Rule
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189
9/21/2015
Johnson & Johnston v. R.E.
Service
379

The specification reads:
aluminum is currently the preferred
material for the substrate, other metals, such as
stainless steel or nickel alloys, may be
used….”
 “While

The claim reads:
laminate constructed of a sheet of copper foil
which, in a finished printed circuit board,
constitutes a functional element and a sheet of
aluminum which constitutes a discardable
element”
 “A
© C. Nard - Fall 2015 - Law of Patents

The accused products used steel
Johnson & Johnston v. R.E.
Service
380



“When a patent drafter discloses but declines
to claim subject matter… this action dedicates
that unclaimed subject matter to the public” P.
489.
Strong emphasis on the claims and public
notice function of patent law
Also, the court was concerned with
encouraging broad disclosures and narrow
claims
© C. Nard - Fall 2015 - Law of Patents
190
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Claim Scope and Claim-Scope Limiting Tools
381
Public
Dedication Rule
All-Limitations Rule
DOE
Literal Claim Language
Enablement
Prior Art
DOE
Claim-Scope Limiting Tools
Prosecution History Estoppel
© C. Nard - Fall 2015 - Law of Patents
382
3.
Indirect Infringement
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Lucent Tech. v. Gateway, Inc.
383



Day patent directed to method of entering
information into fields on a computer screen
without using a keyboard;
Lucent accused Microsoft of indirect
infringement based on the latter’s sell and use
of Money, Outlook and Windows Mobile.
Jury found Microsoft infringed indirectly
© C. Nard - Fall 2015 - Law of Patents
Lucent Tech. v. Gateway, Inc.
384

Contributory Infringement – 271(c)
 1.
Direct infringement
 2. Sold component had material part of claimed
invention
 3. Knowledge that combination for which
components were especially made was both
patented and infringing;
 4. Components have no substantial non-infringing
use (Non-Staple Article Doctrine)
© C. Nard - Fall 2015 - Law of Patents
192
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Lucent Tech. v. Gateway, Inc.
385

Contributory Infringement – 271(c), cont.
 Microsoft
argued that it accused product has
substantial non-infringing uses
 Microsoft defines product as its entire software
package
 Lucent counters that the product is the datepicker tool (e.g., calendar date-picker).
 If Microsoft offered date-picker as a separate
component, there is little doubt Microsoft would
infringe
© C. Nard - Fall 2015 - Law of Patents
Lucent Tech. v. Gateway, Inc.
386



The “the main issue reduces to whether the
‘material or apparatus’ is the entire software
package or just the particular tool (e.g., the
calendar date-picker) that performs the claimed
method.”
The significance is: if “material or apparatus” is
defined as the entire software package, there
would be substantial non-infringing uses, and
therefore no contributory infringement.
But if defined an individual component – then no
© C. Nard - Fall 2015 - Law of Patents
substantial non-infringing
uses.
193
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Lucent Tech. v. Gateway, Inc.
387



Contributory Infringement – 271(c), cont.
Court: “An infringer should not be permitted to
escape liability as a contributory infringer
merely by embedding the infringing apparatus
in a larger product with some additional,
separable feature.” Citing Ricoh
Here, the infringing feature for completing the
forms, i.e., date picker too, is suitable only for
an infringing use. Inclusion of the date-picker
feature within a larger program does not
change the date-picker’s ability to© C.infringe.
Nard - Fall 2015 - Law of Patents
Lucent Tech. v. Gateway, Inc.
388

Active Inducement – 271(b).
 Patentee
must show that the alleged infringer’s
actions induced infringing acts and the the
alleged infringer knew or should have known his
actions would induce actual infringements
 Inducement requires culpable conduct, directed
to encouraging another’s infringement, not
merely that the inducer had knowledge of the
direct infringer’s activities.
© C. Nard - Fall 2015 - Law of Patents
194
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Lucent Tech. v. Gateway, Inc.
389

Active Inducement – 271(b), cont.
 Where
is Microsoft’s encouragement to
infringe? Not strong evidence, but…
 Pop-up
tool functionality is pervasive in
accused products
 Normal and intended operation of those
products used the infringing functionality;
 Microsoft encouraged direct infringement
 Expert testimony was key
© C. Nard - Fall 2015 - Law of Patents
390
Chapter 8 – Defenses to Patent
Infringement
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195
9/21/2015
391
A. Rights and Limitations on the Use
of Contract in Exploiting Patent
Rights
© C. Nard - Fall 2015 - Law of Patents
392
1. The Scope of Patent Exhaustion and
the Repair-Reconstruction Doctrine
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196
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Jazz Photo v. ITC
393


Fuji sued several
defendants for patent
infringement based on
the doctrine of
impermissible
reconstruction
The ITC agreed, but the
Fed Cir reversed finding
the appellants’ acts to
be permissible repair
© C. Nard - Fall 2015 - Law of Patents
Jazz Photo v. ITC
394

Appellants assert:
 1.
the LFFPs have a useful life longer than
singe use proposed by Fuji
 2. the patent right has been exhausted as to
these discarded cameras
 3. the patentee cannot restrict appellants’
right to refit the cameras with new film by the
procedures necessary to insert the film and
reset the mechanism
© C. Nard - Fall 2015 - Law of Patents
197
9/21/2015
Jazz Photo v. ITC
395


Underlying the repair/reconstruction dichotomy is the
principle of exhaustion of the patent right. The
unrestricted sale of a patented article, by or with the
authority of the patentee, “exhausts” the patentee's right
to control further sale and use of that article by enforcing
the patent under which it was first sold. The purchaser of
a patented article has the rights of any owner of personal
property, including the right to use it, repair it, modify it,
discard it, or resell it, subject only to overriding
conditions of the sale.
However, the rights of ownership do not include the right
to construct an essentially new article on the template of
© C. Nardremains
- Fall 2015 - Law with
of Patents
the original, for the right to make the article
Under Aro I
396

A patentee cannot prevent repair because that
would “extend the patent monopoly beyond the
terms of the grant.” Aro Mfg. at 342. “[T]he
combination patent covers only the totality of the
elements in the claim and . . . no element,
separately viewed, is within the grant. … No
element, not itself separately patented, that
constitutes one of the elements of a combination
patent is entitled to patent monopoly, however
essential it may be to the patented combination and
no matter how costly
replacement may
© C. Nardor
- Falldifficult
2015 - Law of Patents
be.” Id. at 344-45.
198
9/21/2015
Jazz Photo v. ITC
397



Precedent has classified as repair the
disassembly and cleaning of patented articles
accompanied by replacement of unpatented
parts that had become worn or spent, in order
to preserve the utility for which the article was
originally intended.
“Reconstruction,” precedent shows, requires
a more extensive rebuilding of the patented
entity
To invoke the protection of the first sale
© C. Nard - Fall 2015 - Law of Patents
doctrine, the authorized
first sale must have
occurred under the United States patent
Jazz Photo v. ITC
398



In the present case, the refurbishing of the
cameras was not a “second creation” of the
patented article
Precedent places the acts of inserting new film
and film container, resetting the film counter,
and resealing the broken case-the principal
steps performed by the remanufacturers-as
more akin to repair
A license to use a patented combination
includes the right to preserve its fitness for
© C. Nard - Fall 2015 - Law of Patents
use.
199
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Three Repair-Reconstruction
Scenarios
399
1. Entire patented article is spent, and alleged
infringer reconstructs to make it usable again
 2. Spent part is replaced – Aro I (“mere
replacement of individual unpatented parts,
one at a time, whether of the same part
repeatedly or different parts, is no more than”
repair
 3. Part is not spent, but is replaced to enable
the machine to perform a different function
(“kin to repair” © C. Nard - Fall 2015 - Law of Patents

Morton Salt v. Suppiger
400



Patentee Suppiger engaged in a tying
arrangement: patented device for depositing
salt tablets and the salt tablets themselves
Court did not decide antitrust (Clayton Act)
issuse
Rather, the Court focused on whether “a court
of equity will lend its aid to protect the patent
monopoly when [patentee] is using it as the
effective means of restraining competition with
its sale of an unpatented article [i.e., salt
© C. Nard - Fall 2015 - Law of Patents
tablets].”
200
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Morton Salt v. Suppiger, cont.
401





The public policy that includes inventions
within the patent grant excludes from it all that
is not embraced in the invention
Patentee is acting in a manner contrary to the
public interest.
How?
Why doesn’t patentee have clean hands,
according to the Court?
See Comment 4 on p. 612
© C. Nard - Fall 2015 - Law of Patents
402
b.
Field-of-Use Restrictions
© C. Nard - Fall 2015 - Law of Patents
201
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Mallinckrodt v. Medipart
403



“For Single Patient Use Only” K for medical device
Mallinckrodt sold device to hospitals, which after
initial use of the devices, sent them to Medipart for
reconditioning
Medipart sent the reconditioned medical device back
to hospitals for re-use
© C. Nard - Fall 2015 - Law of Patents
Mallinckrodt v. Medipart
404



The intersection between contract law and patent law
DCt held no restriction whatsoever could be imposed
under the patent law, whether or not the restriction was
enforceable under some other law, and whether or not
this was a first sale to a purchaser with notice. Even if the
K notice was sufficient to constitute a valid sale,
violation of that condition cannot be remedied under the
patent law
Fed Cir reversed: “If Mallinckrodt’s restriction was a
valid condition of the sale, then in accordance with GTP
it was not excluded from enforcement under the patent
law.
© C. Nard - Fall 2015 - Law of Patents
202
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Mallinckrodt v. Medipart
405

“Unless the [K] condition violates some other law or
policy (in the patent field, notably the misuse or
antitrust law), private parties retain the freedom to
contract concerning conditions of sale…. The
appropriate criterion is whether Mallinckrodt’s
restriction is reasonably within the patent grant, or
whether the patentee has ventured beyond the patent
grant and into behavior having an anticompetitive
effect not justifiable under the rule of reason…. i.e.,
that it relates to subject matter within the scope of the
patent claims.” p. 635-36
© C. Nard - Fall 2015 - Law of Patents
Quanta Computer v. LG
Electronics
406





LGE had cross-license arrangement w Intel
(LGE Portfolio 1 - microprocessors & chipsets )
Intel made microprocessors & chipsets under
LGE Portfolio 1 – “Intel Products”
Intel sold Intel Products to Quanta
Quanta combined Intel Products with buses and
memory
Quanta combination infringed LGE Portfolio 2 –
systems patents
© C. Nard - Fall 2015 - Law of Patents
203
9/21/2015
Quanta Computer v. LG
Electronics
407


License Agreement does not alter usual rules
relating to patent exhaustion
But there are limitations:
 1.
No license to any third party for the
combination by a third party of Intel Products with
items, components, or the like acquired from
sources other than Intel or LGE
 2.
Intel was required to give written notice
to its own customers informing them that, while it
had obtained a broad license, the license does
not extend to any product made by combining an
© C. Nard - Fall 2015 - Law of Patents
Intel Product with any non-Intel product
Quanta Computer v. LG
Electronics
408
Did sell of Intel Products to Quanta
exhaust rights in LGE Portfolio 2 (systems
patents)?
 Key Issue: The extent to which a product
must embody a patent to trigger
exhaustion?
 Exhaustion is triggered when the “only
reasonable and intended use was to
practice the patent” and the products sold
© C. Nard - Fall 2015 - Law of Patents
“embodied the
essential features of the
t t di
ti ”

204
9/21/2015
Quanta Computer v. LG
Electronics
409




Intel Products are analogous to blank lens in Univis. How?
1. No reasonable use for Intel Products other than
incorporating them into computer systems that practice LGE
Portfolio 2 patents.
2. Intel Products constitute a material part of LGE Portfolio 2
patents and “all but completely practice the patents” –
“Everything inventive about each patent is embodied in the
Intel Products… Quanta was not required to make any creative
or inventive decision when it added buses and memory.”
Does this mean that for exhaustion not to apply, Quanta would
have to make an inventive or creative contribution? Or, for
exhaustion to apply, the other combined features must be noninventive. What would the test be?
© C. Nard - Fall 2015 - Law of Patents
Quanta Computer v. LG
Electronics
410


3.. How can the sale of Intel Products exhaust
patents in LGE’s Portfolio 2?
“The sale of a device that practices patent A
does not, by virtue of practicing patent A,
exhaust patent B. But if the device practices
patent A while substantially embodying
patent B, its relationship to patent A does not
prevent exhaustion of patent B.
© C. Nard - Fall 2015 - Law of Patents
205
9/21/2015
Quanta Computer v. LG
Electronics
411



Justice Breyer Hypo re a patentee who has patents on
bicycle pedals and method of inserting pedals on bike:
“Imagine that I want to buy some bicycle pedals, so I go
to the bicycle shop. These are fabulous [patented]
pedals. The inventor has licensed somebody to make
them, and he sold them to the shop…. I go buy the
pedals. I put [them] on my bicycle. I start down the
road. Now we don’t want 19 patent inspectors chasing
me… [W]hy can’t I look at this as saying the patent is
exhausted, the patent on the pedals and the patent for
those bicycles says I have a patent on inserting the
pedal into a bicycle?”
Is Breyer correct? How would you analyze this hypo in the
© C. Nard - Fall 2015 - Law of Patent
light of Quanta? What if patentee had other patented
Quanta Computer v. LG
Electronics
412

What remedies are available?
 1.
Breach of license restrictions leads to
patent infringement and accompanying remedies
(Mallinckrodt)
 2. Breach of license restrictions leads to K
remedies only; not patent infringement – See FN
3. (But what about General Talking Pictures?)
 3. Breach of license restrictions leads to patent
misuse, and therefore, no remedies
© C. Nard - Fall 2015 - Law of Patents
206
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Quanta Computer v. LG
Electronics
413

How does Quanta affect Mallinckrodt?

1.No effect: license restrictions in Quanta would have
been valid if drafted better.



A. Eliminate exhaustion clause
B. Retain written notice obligation, but keep in main license
agreement; not separate agreement
C. Eliminate or modify authorization of Intel to “make, use, sell
… etc” Intel Products practicing LGE patents
2. All post-sale restrictions are patent misuse, and
therefore, patentee can never contract around
exhaustion
 3. Patentee can contract around exhaustion (i.e., no
misuse), but remedy resides in K, not patent law. See
© C. Nard - Fall 2015 - Law of Patents
FN 3 of Quanta

Bowman v. Monsanto Co.
414
© C. Nard - Fall 2015 - Law of Patents
207
9/21/2015
Bowman v. Monsanto Co.
415




Monsanto invented a genetic modification that
enables soybean plants to survive exposure to
glyphosate, the active ingredient in many
herbicides. (ex. Roundup)
Farmers can plant that seed and use glyphosatebased herbicide to kill weeds without damaging their
crops.
Growers can obtain Roundup Ready seeds for
planting only by purchasing them from an
authorized seed dealer and signing a licensing
agreement.
© C. Nard - Fall 2015 - Law of Patents
Under that agreement,
a grower is authorized to
make one generation of soybeans and sell them to
Bowman’s argument
416



Mr. Bowman claimed that because he bought soybeans
from the grain elevator, he was entitled to make copies
of Monsanto’s patented invention without separately
obtaining authorization from Monsanto to do so.
He argued that in growing new generations of Roundup
Ready® soybeans he did not actually create copies of
the technology in the seeds but simply “used” a
technology that is “self-replicating.”
Bowman argued that, after the first time such seeds
were sold (in this case, to the grower who sold the crop
to the grain elevator), Monsanto no longer had patent
rights to them under the doctrine of patent exhaustion,
which operates under certain circumstances to limit a
patent-holder’s right to control a patented article.
© C. Nard - Fall 2015 - Law of Patents
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Federal Circuit Court of Appeals
417


Mr. Bowman appealed the case to the Federal
Circuit Court of Appeals, which again rejected his
claims. It reasoned that “[e]ven if Monsanto’s
patent rights in the commodity seeds are
exhausted, such a conclusion would be of no
consequence because once a grower, like
Bowman, plants the commodity seeds containing
Monsanto’s Roundup Ready technology and the
next generation of seed develops, the grower has
created a newly infringing article.”
Mr. Bowman therefore infringed Monsanto’s
patents because he made new copies of the
company’s patented invention without its
authorization.
© C. Nard - Fall 2015 - Law of Patents
U.S. Supreme Court
418


One issue is whether, under the patent exhaustion
doctrine, the sale of a patented seed or plant—
here, a grower’s sale of Roundup Ready
soybeans to a grain elevator—permits later
purchasers like Mr. Bowman to create, use, and
sell an unlimited number of new generations of
that seed or plant without authorization from the
patent owner.
The second issue is whether the patent
exhaustion doctrine permits later purchasers to
circumvent the restrictions on replanting in
Monsanto’s license agreements, which Monsanto
requires buyers to accept before any sale of
Roundup Ready seeds by its authorized dealers.
© C. Nard - Fall 2015 - Law of Patents
209
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U.S. Supreme Court Ruling
419


The doctrine of patent exhaustion does not allow
the purchaser to make copies of a patented item.
Because the product in question is a seed, using
the seed to grow a crop and then harvesting those
seeds for future use constitutes creating copies of
a patented item.
In this case, Bowman’s one-time purchase of
Monsanto’s product allowed him to take
advantage of their patented product over the
course of many seasons without respecting the
rights of the patent holder.
© C. Nard - Fall 2015 - Law of Patents
Lexmark v. Impression
420
© C. Nard - Fall 2015 - Law of Patents
210
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Lear v. Adkins
421
Lear, Inc. hired Adkins in
1952 to develop an innovative
gyroscope
 Adkins obtained a patent and
licensed Lear
 Lear seeks to invalidate the patent
 As a licensee, is Lear precluded from trying to
invalidate Adkins’s patent?
 SCt California: Yes – “licensee should not be permitted to

enjoy the benefits afforded by the [license] agreement while
© C. Nard - Fall 2015 - Law of
simultaneously urging that the patent … is void”
Patents
Lear v. Adkins
422

The common of contracts v. federal law of patents
K
law forbids repudiation of promises
 Patent law demands ideas not patented remain in the
public domain

Patent policy outweighs K policy
 Patent
prosecution is ex parte
 Public has strong interest in invaliding improperly
granted patents
 Licensees are the most incentivized to challenge
validity
© C. Nard - Fall 2015 - Law of Patents
211
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Lear v. Adkins
423

Should Lear be required to pay royalties while he
is challenging the patent’s validity in litigation?
 No
– Such would lead to dilatory tactics by the
patentee
 Litigation is expensive

But Lear benefited from Adkins’s ideas prior to
patenting
 Should
Lear have to pay pre-1960s royalties when the
Adkins’s idea was not yet patented?
© C. Nard - Fall 2015 - Law of Patents
Antitrust Issues in Patent Law
424


Noerr-Pennington immunity
Important antitrust issues in patent law:
 Walker
Process Fraudulent Procurement and
Subsequent Enforcement
 Handgards Sham Litigation
 Refusals to Deal
 Settlement Activity
© C. Nard - Fall 2015 - Law of Patents
212
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Nobelpharma v. Implant Innov.
425

Walker Process claim
 Obtain
patent by “knowingly and willfully
misrepresenting facts” to PTO;
 Sought to enforce patent knowing that it was
obtained fraudently

Handsgard/PRE claim
 Lawsuit
objectively baseless;
 Subjectively motivated to impose anti-competitive
injury, rather than secure justifiable remedy
© C. Nard - Fall 2015 - Law of Patents
FTC v. Actavis
426



Can “reverse” settlements “sometimes
unreasonably diminish competition in violation of
the antitrust laws?
Generic company promises not to enter patentee
market until a mutually agreed specified time
prior to patent expiration or after expiration
Route to settlement begins with a Paragraph IV
certification of invalidity or non-infringement
© C. Nard - Fall 2015 - Law of Patents
213
9/21/2015
FTC v. Actavis, cont.
427


Solvay settled with generics Actavis, Par, and Paddock
Generics agreed:
1. Not to enter market until August 31, 2015 – 65 days prior
to Solvay’s patent expiration;
2.To promote AndroGel ($400m-1.2b market)
3.Solvay paid approx $100 millions to generics


FTC asserted true purpose of payment was to
compensate generics for agreeing not to compete until
2015
Accordingly, FTC asserts parties violated sec 5 of FTC
Act “by unlawfully agreeing to share in Solvay’s
monopoly profits, abandon their patent challenges,
and refrain from launching their low-cost generic
© C. Nard
- Fall 2015
- Law of Patents for nine years.”
products to compete
with
AndroGel
FTC v. Actavis, cont.
428



11th Cir held reverse settlement was not
anticompetitive because Solvay owned a
patent
A key distinction from the typical market
exclusion settlement is that here, the patent
holder has a legal right to exclude others from
the market
Moreover, public policy encourages
settlement, even though it is possible for court
to invalidate patent
© C. Nard - Fall 2015 - Law of Patents
214
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FTC v. Actavis, cont.
429

According to SCt:
 Patent
and antitrust policy must be considered
 A patent may be invalidated or not infringed
 Traditional antitrust factors such as:
 Likely
anticompetitive effects
 Redeeming virtues
 Market power
 Offsetting legal considerations (e.g., existence of a
patent)
© C. Nard - Fall 2015 - Law of Patents
FTC v. Actavis, cont.
430

SCt’s Five Sets of Considerations:
1.
2.
Adverse effects on competition; settlement payment
may reflect strong evidence that the patentee seeks
to induce the generic challenger to abandon its
claim with a share of patentee’s profits that would
otherwise be lost in a competitive market;
Anticompetitive consequences will at least
sometimes be unjustified; where payment reflects
traditional settlement considerations such as
avoiding litigation costs or fair value for services,
there is not the same concern that a patent is using
its market position to avoid the risk of invalidation or
non-infringement.
Antitrust
may show
© C. Nard
- Fall 2015 - Lawdefendants
of Patents
legitimate reasons
215
9/21/2015
FTC v. Actavis, cont.
431

SCt’s Five Sets of Considerations:
3. Where reverse payments threaten to work unjustified
harm, the patentee likely possesses the power to bring
about the harm. The FTC has referred to studies
showing that reverse payment agreements are
associated with the presence of higher-than-competitive
profits – a strong indication of market power;
4. Antitrust action more feasible administratively as
patent’s validity does not need to be litigation. A large
reverse payment indicates a lack of confidence in
patent’s validity or, at least, bring about anticompetitive
effects. An unexplained reverse payment provides a
surrogate for a patent’s
weakness,
without forcing ct to
© C. Nard - Fall
2015 - Law of Patents
explore patent’s validity
FTC v. Actavis, cont.
432

SCt’s Five Sets of Considerations:
5. Parties may still settle, but not in a way that is
anticompetitive. Parties may prefer reverse settlements, but
must provide reasons that are not anticompetitive

Take Away: No presumptive rule; rather, rule of
reason applies, taking into consideration:
A. Size of agreement
B. Its scale in relation to the payor’s anticipated future
litigation costs;
C. Its independence from other services for which it
might represent payment
D. Lack of any other convincing justification
© C. Nard - Fall 2015 - Law of Patents
216
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FTC v. Actavis, cont.
433

The Dissent
A patent carves out an exception to the applicability antitrust laws;
innovation


Antitrust
competitive markets
Does Solvay’s monopoly power extend beyond what the patent already
gave it?


Two exceptions
Settle sham litigation
Litigation involves a patent obtained
through fraud on the PTO


“Scope of patent
forms zone within
which patent
holder may
operate without
facing antitrust
scrutiny”
 Solvay paid a competitor©to
its -patent
– conduct that did not exceed
C. respect
Nard - Fall 2015
Law of Patents
the scope of its patent.
In re Independent Service Organizations
434





Xerox manufactures, sells, and services copiers
Xerox adopted a policy of not selling parts and new
products to its Series 9 and 10 copiers to ISOs, unless
the ISO was also an end-user of the copier
CSU argues Xerox illegally sought to leverage its
dominance in the equipment market into the service
market – relying on Eastman Kodak
DCt held Xerox’s unilateral refusal to sell did not
violate antitrust laws, even if refusal impacts
competition in more than one market
Fed Cir affirmed
© C. Nard - Fall 2015 - Law of Patents
217
9/21/2015
In re Independent Service Organizations
435




A patent alone does not confer market power
No duty of a patent owner to sell or license its patented
product in markets within the scope of the statutory
patent grant
Absent exceptional circumstances, a patent may confer
the right to exclude competition altogether in more than
one antitrust market
Exceptions:



Walker Process
Sham litigation
Tying
© C. Nard - Fall 2015 - Law of Patents
436
C. Inequitable Conduct
© C. Nard - Fall 2015 - Law of Patents
218
9/21/2015
437
‘551 patent related to disposable blood glucose strips for
diabetes management
The patent was rejected in the light of the ‘382 patent, which
discussed protective membranes as “optional[], but
preferable[]”
To overcome the ‘382 prior art, Abbott presented new claims
based on a new sensor that did NOT require a protective
membrane for whole blood
Examiner required an affidavit from Abbott showing the prior
art did indeed require a protective membrane for whole
blood
Abbott’s head of R&D – Dr. Sanghera – and patent counsel
© C. Nard - Fall 2015 - Law of Patents
– Mr. Pope – provided a declaration to the PTO that a





438




Therasense, Inc. v. Becton,
Dickenson
Therasense, Inc. v. Becton,
Dickenson
Prior to PTO declaration, Abbott also made representations
to the European Patent Office – these representations were
not disclosed to the PTO
Was the failure to disclose the EPO representations to the
PTO inequitable conduct (“IC”)?
IC requires both a finding that the applicant misrepresented
or omitted material information with the specific intent to
deceive
A finding of IC renders the patent unenforceable – the
“atomic bomb” of patent law
© C. Nard - Fall 2015 - Law of Patents
219
9/21/2015
Therasense, Inc. v. Becton,
Dickenson
439

Intent prong: For non-disclosure of information, the party
asserting IC must show the applicant made a deliberate
decision to withhold a known material reference.



Material prong: A reference will be deemed material if the
PTO would not have allowed a claim had it been aware of
the undisclosed reference


In other words, the applicant knew of the reference, knew it was
material, and made a deliberate decision to withhold it.
Clear and convincing evidence standard
Preponderance of the evidence standard
Exception for Egregious Conduct: Such as filing an
“unmistakenly false affidavit.” This conduct will be deemed
material even if but-for standard is not satisfied
© C. Nard - Fall 2015 - Law of Patents
Remedies Lecture
440

Money Damages
 1.
 2.

Lost Profits
Reasonable Royalty
Equitable Relief
 1.
Preliminary Injunction
 2.
Permanent Injunction

Willful Infringement
© C. Nard - Fall 2015 - Law of Patents
220
9/21/2015
Trade Secrets
Learning Curve
221
9/21/2015
The Definition



Information, including, but not limited to, technical
or non-technical data, a formula, pattern,
compilation, program, device, method, technique,
drawing, process, financial data, or list of actual or
potential customers or suppliers, that:
(1) is sufficiently secret to derive economic
value, actual or potential, from not being generally
known to other persons who can obtain economic
value from its disclosure; and
(2) is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy
or confidentiality
The Factors – Restatement § 757






1. Extent concept was known by others outside owner’s
business
2. Extent to which concept was known by owner’s
employees and others involved in owner’s business
3.
4.
Measures taken to maintain secrecy
Value of the concept to owner and competitors
5. Amount of time, effort, and money expended by owner
in developing concept
6. Ease or difficulty with which owner’s concept could
have been properly acquired or duplicated by others
222
9/21/2015
BondPro
 “A trade
secret that
becomes
public
“Although
it is awkward
to license
a trade
secretknowledge
because theis
no longer
a trade
secret”
patent
negotiation
necessarily
reveals
the (e.g.,
secretpublished
to the prospective
application)
licensee, the revelation, as well as the revelation to suppliers
and licensees,
is obviously
not the
kind ofwithout
disclosure that
“But to disclose
a trade
secret
forfeitsauthorization
the protection is
of unlawful”
trade-secret law.”



Neither BondPro nor Siemens used the process
commercially
An inference of no commercial value; therefore no
damages
What about an injunction against Siemens?
BondPro, cont.



Did Siemens commit a breach of K or a tort in
obtaining BondPro’s secret?
What is BondPro claiming as a trade secret?
Where is the detail in the disclosure to
Siemens?
“One expects a trade secret to be rich in detail,
because a process described in general terms
… will usually be widely known and thus not
worth incurring costs to try to conceal and so
not a trade secret.”
223