District Court Remand Orders to State Courts Are Appealable
To Infringe Product-by-Process Claim, Must Practice the Process
Setting a Lower Patent Misuse Standard?
Safe Harbor Defense Is Available at ITC
Covenant Not to Sue Triggers Exhaustion Doctrine
Even Unsuccessful Amendments Estop Doctrine of Equivalents
Written Description: Need Sufficient Disclosure of Molecules Capable of Achieving Desired Activity
Presence of Foreign Manufacturer at U.S. Trade Show Triggers Personal Jurisdiction
Substitution of Known Material with Known Properties Renders Patent Obvious
The Federal Circuit Provides Its Two Cents on Loose Change Patents
District Court Remand Orders to State
Courts Are Appealable
By Paul Devinsky and Charles J. Hawkins
The U.S. Supreme Court, dealing yet another reversal to the U.S. Court of Appeals for the Federal Circuit, has ruled that district court orders remanding cases back to state courts after declining to exercise supplemental jurisdiction are appealable, despite the language of 28 U.S.C. §1447(d) stating that remand orders are "not reviewable on appeal." Carlsbad Technology Inc. v. HIF Bio, Inc., Case No. 07-1437 (Supr. Ct., May 4, 2009) (Thomas, J.) ( Stevens, J. and Scalia, J., concurring; Breyer, J., concurring joined by Souter, J.)
The respondents initiated the action by filing a complaint in a California state court alleging that the petitioner violated several state laws and a single federal statute, the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§1961-68. The petitioner successfully removed the entire case, including the state law claims, to the district court pursuant to §1441(c), which allows for removal when at least one claim exists over which the federal court has original subject matter jurisdiction.
Once in federal court, the petitioner successfully moved under Rule 12(b)(6) to dismiss the respondents' RICO claim. In addition to dismissing the RICO claim, the district court decided not to exercise supplemental jurisdiction over the remaining state law claims, which gives a district court discretion to choose whether to exercise supplemental jurisdiction over a claim in which the district court has dismissed all of the claims over which it had original jurisdiction. The district court consequently remanded the case to the state court. Carlsbad Technology appealed the decision.
On appeal to the Federal Circuit, the petitioner argued that the district court should have exercised supplemental jurisdiction over the state law claims because those claims implicated federal patent law rights (in this case, ownership of an invention and inventorship). Without getting to the merits of the petitioner's argument, the Federal Circuit dismissed the appeal, finding that the remand by the district court could "be colorably characterized as a remand based on lack of subject matter jurisdiction" and, thus, could not be reviewed under §§1447(c) and (d).
The Supreme Court granted certiorari to consider the issue of whether a district court's order remanding a case to state court after declining to exercise supplemental jurisdiction is a remand for lack of subject matter jurisdiction for which appellate review is barred by §§1447(c) and (d). In sum, the Supreme Court concluded such orders are not based on lack of subject matter jurisdiction.
Writing for a unanimous court, Justice Clarence Thomas pointed out that Supreme Court precedent unambiguously requires that §1447(d) be construed together with §1447(c), citing Thermtron Products v. Hermandsdorfer, noting that neither party on appeal argued that Thermtron should be overruled. Thus, the Supreme Court found that type of remand at issue in this case—a remand order based on a lack of "subject matter jurisdiction"—is one type of remand order banned from appeal under §1447(c).
Framing the issue as whether the district court's remand order resting on its decision not to exercise supplemental jurisdiction over remaining state law claims is a remand based on a "lack of subject matter jurisdiction" for purposes of §§1447(c) and (d), the Supreme Court acknowledged the distinction between whether a court has subject matter jurisdiction over a claim and whether a court chooses to exercise that jurisdiction. However, the Supreme Court concluded that a remand after declining to exercise supplemental jurisdiction under §1367(c) is not a remand for lack of subject matter jurisdiction and is thus not subject to the ban on appellate review. Justice Thomas explained that a district court has subject matter jurisdiction over remaining state law claims under §1367(a) and (c), and any decision not to exercise that jurisdiction is purely discretionary.
In a concurring opinion, Justice John Paul Stevens agreed that the ruling by the court was consistent with the precedential effect of Thermtron, and that "stare decisis compels the conclusion that the District Court's remand order is reviewable notwithstanding §1447(d)'s unambiguous contrary command." In his concurring opinion, Justice Antonin Scalia, while agreeing with the decision, characterized Thermtron as questionable and concluded that it was ripe for review.
Justice Steven Breyer's concurrence highlighted an anomaly in the operation of §1447(d) that allows appellate review of decisions which, if wrong, are likely to do little harm but forbids review of decisions which, if wrong, are likely to do great harm.
To Infringe Product-by-Process Claim, Must
Practice the Process
By Paul Devinsky
An en banc panel of the U.S. Court of Appeals for the Federal Circuit reconciled two lines of cases interpreting the scope of product-by-process claims, holding that infringement of a product-by-process claim requires that the alleged infringer practice all of the claimed process steps. Abbott Laboratories v. Sandoz, Case No. 07-1400 and Lupin Limited v. Abbott Laboratories, Case No. 07-1446 (Fed. Cir., May 18, 2009) (en banc as to Section III A) (dissenting opinion as to Section III.A. by Newman, J., in which Mayer, J. and Lourie, J., join; dissenting opinion by Lourie, J). As a result of this decision, the Federal Circuit's 1991 Scripps Clinic & Research Foundation v. Genentech, Inc. case is no longer to be followed in considering product by process claims in an infringement context. Rather, the line of cases stemming from the 1992 Atlantic Thermoplastics v. Faytex Corp. is now the law of the Federal Circuit.
In this consolidated appeal, the Federal Circuit considered two district court cases stemming from the same patent: one from the United States District Court for the Eastern District of Virginia and the other from United States District Court for the Northern District of Illinois. After construing certain of the claims in issue to require practice of the claimed method steps, i.e., as a product-by-process claim, the Virginia district court granted the Lupin motion for summary judgment of non-infringement. In the Illinois district court case Abbott Laboratories, the exclusive licensee, was denied a preliminary injunction based on the Virginia district court claim construction. Abbott appealed.
The Court, sua sponte, took en banc the issue of proper interpretation of product-by-process claims in determining infringement.
The patent in suit has five claims. Claim 1 is directed to crystalline cefdinir, using its chemical name, and defining its unique characteristics with powder x-ray diffraction (PXRD) angle peaks. Claim 1 is not a product by process claim.
Claims 2 through 5 claim crystalline cefdinir, without any PXRD peak limitations, but with descriptions of processes used to obtain the crystalline cefdinir. The Virginia district court concluded that claims 2 through 5 were product-by-process claims and, citing the Atlantic Thermoplastics case, further concluded that the claims are limited by the recited process steps.
On appeal, Abbott argued that the Virginia district court erred in construing the process steps under the rule of Atlantic Thermoplastics that "process terms in product-by process claims serve as limitations in determining infringement," rather than in accordance with Scripps Clinic & Research Foundation v. Genentech, Inc. ("[T]he correct reading of product-by-process claims is that they are not limited to product prepared by the process set forth in the claims.") In Abbott, the en banc Court has now clarified that it has adopted the rule of Atlantic Thermoplastics for considering the scope of product by process claims.
In doing so, the Court looked for guidance to a line of seven Supreme Court opinions, including Smith v. Goodyear Dental Vulcanite (1877) ("The process detailed is thereby made as much a part of the invention as are the materials of which the product is composed."); Goodyear Dental Vulcanite v. Davis, (1880) ("[T]o constitute infringement of the patent, both the material of which the dental plate is made .... and the process of constructing the plate ... must be employed."); and Gen. Elec. V. Wabash Appliance (1938). The Court explained that "the Supreme Court consistently noted that process terms that define the product in a product-by-process claim serve as enforceable limitations. In addition, the binding case law of this court's predecessor courts, the United States Court of Customs and Patent Appeals (see In re Hughes—acknowledging that 'true product claims' are 'broader' in scope than product-by-process claims), and the United States Court of Claims (see Tri-Wall Containers v. United States) followed the same rule."
The majority argued that the dissent "lament[s] the loss of a 'right' that has never existed in practice or precedent—the right to assert a product-by-process claim against a defendant who does not practice the express limitations of the claim" insisting that the en banc decision "in no way abridges an inventor's right to stake claims in product-by-process terms. Instead this decision merely restates the rule that the defining limitations of a claim—in this case process terms—are also the terms that show infringement."
The majority explained that "if an inventor invents a product whose structure is either not fully known or too complex to analyze ... that the inventor is absolutely free to use process steps to define this product. The patent will issue subject to the ordinary requirements of patentability. The inventor will not be denied protection. Because the inventor chose to claim the product in terms of its process, however, that definition also governs the enforcement of the bounds of the patent right. This court cannot simply ignore as verbiage the only definition supplied by the inventor."
Dissenting Opinions
In her 38-page dissent, Judge Newman argued that the court had overturned "a century of precedent and practice" in holding a new product "cannot be protected as a product if its description is aided by reference to how it was made." Judge Newman warned that this is a "new restraint on patents for new products, particularly today's complex chemical and biological products whose structure may be difficult to analyze with precision. It is a change of law with unknown consequences for patent-based innovation."
In his dissent, Judge Lourie acknowledged the "substantial" line of Supreme Court precedent "that holds that product-by-process claims require use of the recited process for there to be infringement." However, he argued that in this century old case law, the Supreme Court "did not have occasion to consider today's innovations or decide whether a distinction should be made between a new chemical-biological product and an old product made by a new process."
Practice Note: The fact that claim 1 of the asserted patent was not a product-by-process claim seems to have influenced the majority determination that the patentee was not constrained by some inability to characterize the invention other than as the product of a process—but simply chose to include such claims; i.e., he was not forced to do so because the product was not fully known or too complex to analyze.
The Abbott decision only addresses process limitations in terms of infringement—not patentability. The majority and Judge Newman expressed different understanding regarding the consistency of the present opinion with the 1985 Federal Circuit decision in In re Thorp, the majority insisting that it is following Thorp while Judge Newman (in dissent) explaining they are not. It appears the U.S. Patent and Trademark Office (USPTO), following Thorp, routinely rejects product-by-process claims whenever the product itself is not novel, notwithstanding the process by which it was made. In other words, when examining product-by-process claims, the USPTO bases its patentability determinations on the product itself—not the process by which it is made. It remains to be seen how, if at all, the USPTO will react to Abbott in terms of its examination process.
Setting a Lower Patent Misuse
Standard?
By Kevin M. Bolan and Stefan M. Meisner
In remanding part of U.S. Philips Corp.'s long-running infringement suit against Princo Corp., the U.S. Court of Appeals for Federal Circuit has asked the International Trade Commission (ITC) to articulate appropriate—and perhaps lower—standards for proving patent misuse if two companies agreed not to license separately from a package license technology potentially competitive with the pooled technology. The court also announced an objective test for determining whether a patent comprises technology "necessary" to practice a technical standard to assess, in turn, allegations of patent misuse by alleged patent-to-patent tying.
Princo Corp. v. ITC, Case No. 07‑1386 (Fed. Cir., Apr. 20, 2009) (Dyk, J.; Bryson, J., dissenting-in-part).
The court also announced an objective test for determining whether a patent comprises technology "necessary" to practice a technical standard to assess, in turn, allegations of patent misuse by alleged patent-to-patent tying.
Philips administrates a patent pool including technology necessary to make recordable and rewritable compact discs that are compliant with the Orange Book technical standard. Philips sued Princo for infringing these patents, resulting in several ITC and Federal Circuit decisions. In its most recent decision, the ITC rejected Princo's patent misuse defenses on two grounds: that Philips and Sony agreed not to license separately from the pool technology (the Lagadec patent) that was potentially competitive to the pooled technology and that, through its package licensing, Philips conditioned licenses to an allegedly non-essential patent (again, the Lagadec patent) to licenses for patents essential for making compact discs compliant with the Orange Book standard. The Federal Circuit vacated the ITC's decision and remanded the first issue and affirmed the second.
A New Misuse Standard?
Since Windsurfing International, Inc. v. AMF, Inc., a successful patent misuse defense has required an accused infringer to show that the misuse conduct "tends to restrain competition unlawfully in an appropriately defined relevant market," except in cases in which the Supreme Court has concluded that the licensing arrangement was per se unlawful (e.g., price-fixing). Applied to Princo's first patent misuse argument, it would seem impossible for Princo to meet this standard. No one used the Lagadec patent to commercialize a competitive alternative to products made by practicing the other Philips pooled patents. But the Federal Circuit concluded horizontal competitors cannot "insulate themselves from misuse ... by agreeing to suppress competing technologies before they are fully developed."
The Federal Circuit concluded that the ITC should determine "appropriate standard [for misuse] under the rule of reason." Infringers might not have to satisfy the traditional market analysis given the four "pertinent considerations" identified by the Federal Circuit to inform the appropriate standard: competing technologies "typically need further development before they can be commercialized; proving commercial viability may be "difficult absent market incentives; even "faulty technology can be competitive; suppressing potentially competing technology" lacks any benefit. The Federal Circuit concluded that proof that the suppressed technology was commercially viable "would be sufficient" to establish patent misuse. But the patent misuse defense would fail, the Federal Circuit added, if it was certain that the technology two horizontal competitors agreed not to license separately could not be viable. The Federal Circuit then left "for consideration in the first instance by the Commission" where on the continuum of viability "the appropriate standard lies."
An Objective Test for "Necessary" Technology
Like the ITC, the Federal Circuit rejected Princo's patent misuse theory based on alleged tying by Philips of a license to the Lagadec patent, technology allegedly not essential to comply with the Orange Book standard, with undisputedly necessary technology. In a 2005 decision in this same case, the Federal Circuit concluded that patent-to-patent tying could not occur if the two patents are part of a "unified" product," e.g., where a "group of patents [was] essential to practice a particular technology or standard." In its most recent decision, the Federal Circuit held that separate technology is "necessary"—and therefore part of the unified product incapable of being "tied"—if "an objective manufacturer would be believe reasonably [that the technology] might be necessary to practice the technology at issue." Because the Lagadec patent satisfied this standard, the Federal Circuit concluded that the Philips package license lacked any "tied" technology. To hold otherwise, the Court reasoned, would undermine one of the salient precompetitive virtues of package licensing: the "avoidance of uncertainty and costly litigation." Such litigation, the Court added, would only add to the delay in commercializing pooled technology.
Practice Note: The latest Federal Circuit Princo decision reinforces the lessons of its earlier ones: patent holders that contribute technology to patent pools should ensure the same patents are available for separate, individual licensing. Such alternative licensing options will minimize the risk of patent misuse defenses and potential antitrust liability.
Safe Harbor Defense Is Available at
ITC
By Amanda E. Koenig
The U.S. Court of Appeals for the Federal Circuit recently reissued its 2008 opinion, reaffirming that the safe harbor of 271(e)(1) is available in International Trade Commission (ITC) cases. However, the Court retracted the prior opinion's discussion of whether the ITC had jurisdiction over "imminent importation" not in connection with a contract for sale, stating that it was not necessary to decide the issue in light of the allegations in the complaint. Amgen, Inc. v. Int'l Trade Commission, Case No. 07-1014 (reissue) (Fed. Cir., March 19, 2008) (Newman J.; Linn, J., partial dissent).
In March of 2008, the U.S. Court of Appeals for the Federal Circuit affirmed a ruling by the ITC that the safe harbor statute applies in proceedings under the Tariff Act relating to process patents, as well as product patents, for an imported product that is used for the exempt purposes of § 271(e)(1). (See IP Update April 2008 .) An en banc Federal Circuit "authorized" the panel to revise Part II of its opinion related to the jurisdictional question, vacated the previous judgment and withdrew the accompanying opinion. It then returned the appeal to the original panel. The panel has now issued a revised opinion, pursuant to that order from the en banc court. The only difference between the two opinions is the revised discussion of the jurisdictional question.
The revised opinion removes all discussion of whether the ITC has jurisdiction over non-sales-based "imminent importations," except to note that resolution of that dispute was "not necessary ... to decide this case." The Court noted that there was no dispute that Roche (the respondent at the ITC) has imported EPO, the subject of the dispute. The Court pointed out that the parties' main disputes are whether the safe harbor provision of § 271(e)(1) applies as a matter of law and whether all of the EPO that Roche imported was entitled to protection under the safe harbor. According to the Court, that dispute goes to the merits of Amgen's complaint, not to the Commission's jurisdiction to hear it.
The panel held that the Commission had jurisdiction as a result of Amgen's allegation that Roche imported an article made by a process covered by the claims of a valid and enforceable United States patent. According to the Court, the ITC therefore was correct to reach the merits of Amgen's claim. The Court declined to address whether the ITC would have had jurisdiction if Amgen had not asserted actual importation and relied instead entirely on its "imminent importation" theory. "
Use Filing Date of the Second Application
to Determine if Product and Process Are 'Patentably
Distinct'
By Kristin Connarn
Addressing a question of first impression—whether later-developed alternative processes for making a patented product can be relied upon to demonstrate a patentable distinction between product and process claims for purposes of obviousness-type double patenting—the U.S. Court of Appeals for the Federal Circuit held that "the relevant time frame for determining whether a product and process are 'patentably distinct' should be at the filing date of the secondary application." Takeda Pharmaceutical Co., Ltd. v. John J. Doll, Case No. 08-1131 (Fed. Cir., April 10 2009) (Rader, J.; Schall J., concurring-in-part, dissenting-in-part).
Takeda first filed a patent application disclosing compounds and the process for making those compounds in 1974. Sixteen years after the compound patent priority date, Takeda filed its secondary application covering the process for making the patented cephem compounds. The process patent issued, claiming the sole process known and disclosed in the priority patent application.
Appealing a decision of the Board of Patent Appeals and Interferences stemming from a reexamination proceeding on the process patent, the case moved to the district court under 35 U.S.C. § 145, where new evidence was presented of the existence of alternative, non-infringing processes for making the cephem compounds claimed in the product patent. After losing in the district court, the U.S. Patent and Trademark Office (USPTO) filed a notice of appeal with the Federal Circuit.
The USPTO argued the date of the first invention governs the relevance of products and processes in the double-patenting context. Takeda argued that any evidence of patentable distinction should be available for consideration. The Court rejected both arguments and held that, in the context of a patent for a compound, in order for the patent owner to get a patent for a method of making the compound, the process patent applicant has to show that as of the process patent application date there existed an alternate process for making the compound. The Court presented its reasoning as being fair to the public and to the patent applicant, because it is at the date of filing the process application that the applicant "avers that the product and process are 'patentably distinct'" and "triggers the potential of an unjustified extension of the patent term." The case was remanded for the lower court to consider evidence regarding the disclosure date for the alternative process.
In dissent, Judge Schall would have required a similar showing, but agreed with the USPTO that the date of invention should be a cut-off date because "the invention date is most commensurate with patent law as a whole and the policy goals relating to obviousness-type double patenting."
Practice Note: Before filing a process patent application, make sure alternate processes exist for making the product claimed in the earlier patent.
Covenant Not to Sue Triggers Exhaustion
Doctrine
By Leigh J. Martinson
The U.S. Court of Appeals for the Federal Circuit held that a covenant not to sue was equivalent to a license and thus sales made pursuant to a covenant are authorized. TransCore, LP and TC License, LTD v. Electronic Transaction Consultants Corporation., Case No. 08-1430 (Fed. Cir., April 8, 2009) (Gajarsa, J.).
TransCore's business is automated toll collection systems—the tags and readers that communicate as a vehicle passes through an automated toll plaza (e.g., E-ZPass). TransCore is the assignee of several patents related to such technology. TransCore sued competitor Mark IV Industries for infringement of their patents. That action was resolved by a settlement agreement in which money was exchanged for an unconditional covenant not to sue and a release of all existing claims.
The relevant portion of the agreement states that TransCore "hereby agrees and covenants not to bring any demand, claim, lawsuit, or action against Mark IV for future infringement" of a list of patents. The agreement also stated the "[n]o express or implied license or future release whatsoever is granted to MARK IV or to any third party by this Release."
Several years after the execution of the release, Electronic Transaction Consultants Corporation (ETC) purchased alleged infringing products from Mark IV for a toll-road project in Illinois. TransCore sued ETC, asserting infringement of some of the patents that were the subject of the TransCore–Mark IV release. ETC moved for summary judgment, asserting that its activities were permitted by the TransCore–Mark IV settlement agreement under the related doctrines of patent exhaustion, implied license and legal estoppel. The district court granted the motion. TransCore appealed.
The question, as viewed by the Court, was whether an unconditional covenant not to sue authorized sales by the covenantee for purposes of patent exhaustion. The Court explained that the grant of a patent does not provide the patentee with an affirmative right to practice the patent but merely the right to exclude. As such, the patentee can only convey a freedom from suit. The Court quoted the Supreme Court decision in De Forest Radio and stated that "[a]s a license passes no interest in the monopoly, it has been described as a mere waiver of the right to sue by the patentee." Thus, the Federal Circuit reasoned that a covenant not to sue is equivalent to a non-exclusive patent license.
The Court viewed the language of the agreement as an unambiguous authorization of all acts that would otherwise be infringements: making, using, offering for sale, selling or importing. The Court pointed out that TransCore did not, as it could have, limit this authorization to, for example, "making" or "using." Applying the authorization rational of Quanta, the Federal Circuit upheld the district court's decision.
As for the language "[n]o express or implied license or future release whatsoever is granted to MARK IV or to any third party by this Release" appearing in the covenant, the Court found this refers only to the effect of the release provision and thus does not require a different result.
Even Unsuccessful Amendments Estop
Doctrine of Equivalents
By Brett Bachtell
In affirming the district court's summary judgment of no literal infringement, the U.S. Court of Appeals for the Federal Circuit confirmed the application of prosecution history estoppel to limit the doctrine of equivalents when the limitation was added by amendment but not central to patentability. Mark D. Felix v. American Honda Motor Company, Inc., Case No. 08-1367 (Fed. Cir., April 10, 2009) (Linn, J.).
Felix sued Honda alleging that the In-Bed Trunk®of Honda's Ridgeline truck infringed claim 6 of Felix's U.S. Patent No. 6,155,625 (the '625 patent). The Ridgeline truck In-Bed Trunk® includes a lid, a gasket and a flange. The In-Bed Trunk®'s gaskets are affixed to the lid, rather than to any flange. Felix's claim 6, in its relevant portion, requires "a weathertight gasket mounted on said flange and engaging said lid in its closed position." The original claim 1 did not include the "gasket" limitation; it was contained in original claim 7. Felix added the limitation to the independent claim during prosecution in response to a rejection from the examiner.
In a first office action, the examiner rejected claims 1 and 7 under 35 U.S.C. § 103 and concluded that original claim 8 would be allowable if rewritten in independent form. In response, Felix did not amend claim 1, instead he cancelled claims 1 and 7, rewriting the subject matter as new independent claim 14. In a second office action, the examiner again rejected the subject matter of new independent claim 14 (containing subject matter of original claims 1 and 7), while reiterating that claim 8 would be allowable if rewritten in independent form. In response, Felix cancelled claim 14 and claim 8, rewriting the subject matter in new independent claim 16 (containing subject matter of original claims 1, 7 and 8). The examiner allowed claim 16, and it issued as claim 6.
During a Markman hearing, the district court construed the claim term "mounted" to mean "securely affixed or fastened to" and "engaging" to mean "coming together and interlocking." Following the hearing, in response to a motion for summary judgment from Honda, the district court concluded that the In-Bed Trunk® did not satisfy the above limitation "because it did not contain a weathertight gasket mounted on said flange." The district court further explained that "[i]n essence, the difference between the '625 patent and the In-Bed Trunk® is that the '625 weatherstrip is mounted to the flange." The district court therefore granted Honda's motion for summary judgment of no literal infringement.
On appeal, the U.S. Court of Appeals for the Federal Circuit reviewed the district court's finding that Felix was precluded under the doctrine of prosecution history estoppel from arguing that the In-Bed Trunk® infringed the gasket limitation by equivalents. As explained above, the "gasket" limitation was originally contained in claim 7, and despite adding the limitation in a first amendment, it was not until Felix made a second amendment adding the subject matter of original claim 8 that the claim was allowed. The Federal Circuit determined that this was irrelevant, finding that "[i]t is the patentee's response to a rejection—not the examiner's ultimate allowance of a claim—that gives rise prosecution history estoppel." The Federal Circuit held that the presumption of prosecution history estoppel attaches when a patentee cancels and independent claim and rewrites a dependent claim in independent form for reasons related to patentability, even if the amendment alone does not succeed in placing the claim in condition for allowance. As a result, Felix was presumptively barred from relying on the doctrine of equivalents to prove that Honda's In-Bed Trunk® meets the gasket limitation.
Felix argued that he rebutted the presumption of prosecution history estoppel by showing that the amendment giving rise to the estoppel was tangential to the equivalent in question. The Federal Circuit rejected this argument because the reasons for the amendment were not "objectively apparent" from the prosecution history and the arguments did not explain the entire amendment. The Federal Circuit stated that if Felix had intended only to add the novel channel limitation and not add the gasket limitation, he could have easily amended original claim to include the limitations of original claim 8 and not original claim 7. Because Felix could not identify any explanation in the prosecution history for the addition of the gasket limitation, he could not meet his burden to show that the rationale for adding the gasket limitation was tangential to the presence and position of the gasket.
Written Description: Need Sufficient
Disclosure of Molecules Capable of Achieving Desired Activity
By Mary Boyle, Ph.D.
The U.S. Court of Appeals for the Federal Circuit reversed a denial of judgment as a matter of law (JMOL) after a jury trial and held that claims were invalid for failure to satisfy the written description requirement. Ariad Pharms., Inc. v. Eli Lilly and Co., Case No. 08-1248 (Fed. Cir., April 3, 2009) (Moore, J.; Linn, J., concurring).
The technology-in-suit covers molecules that regulate gene expression. The naturally occurring cellular protein Nuclear Factor Kappa-B (NF-kB) was discovered by the inventors in the mid-1980s. NF-kB is part of the cell's 911 system. In response to stimuli such as molecules released from harmful bacteria that signal imminent injury to the cell, NF-kB is activated and sent to the cell nucleus, where it turns on genes that protect the cell. When the threatening stimuli disappear, the NF-kB is reduced in activity and the cell returns to the non-emergency state. The claims at issue are for methods for reducing NF-kB activity. NF-kB activity can be reduced by prior art drugs such as aspirin and by naturally occurring inhibitor molecules inside the cell.
The Court held that the written description requirement of § 112 of the Code was not met. The patent failed to adequately describe the claimed methods for reducing NF-kB activity, including adequate description of the molecules that can be used to reduce the activity in performing the claimed methods. The only activity-reducing molecule that was described in the patent was the native inhibitor IkB, which functions to hold NF-kB in its inactive state. Given the dearth of knowledge of IkB at the time of filing, the Court found that the description of IkB was insufficient and little more than an invitation for further research. Under the rule of Univ. of Rochester v. G.D. Searle & Co.,the patent failed to disclose a method of reducing NF-kB activity using IkB or any other specific molecule. The patent's description of three categories of activity-reducing molecules was vague and hypothetical and thus likewise insufficient as a matter of law. The state of the art at the time of filing was primitive and uncertain, so knowledge in the art could not fill the gap. Because the patentee chose to assert claims that were far broader than were supported by the specification, the claims were held invalid for lack of written description.
In his concurrence, Judge Linn wrote to restate his previously expressed belief that § 112 does not contain a separate written description requirement but simply requires a written description that is enabling, in that it allows a person of ordinary skill in the art to make and use the invention. In this case, Judge Linn asserted, the Court should have addressed and decided Lilly's enablement argument. The written description must enable the full scope of the invention without undue experimentation. The claimed methods broadly claim any method for reducing NF-kB activity, including all unknown methods. Lilly argued that a specification cannot, as a matter of law, enable unknown methods and that the claimed methods were therefore invalid. This is an issue that the Court has not resolved.
Presence of Foreign Manufacturer at U.S.
Trade Show Triggers Personal Jurisdiction
By Tiffany M. Scurry
Finding specific jurisdiction and sufficient minimum contacts where a foreign manufacturer was accused of patent infringement for displaying a product at a U.S. trade show, the U.S. Court of Appeals for the Federal Circuit reversed a district court's dismissal for lack of personal jurisdiction and remanded the case to the lower court for further proceedings against the foreign manufacturer. Synthes (U.S.A.) v. G M Dos Reis Jr. Ind. Com. De Equip. Medico, Case No. 08-1279 (Fed. Cir., April 17, 2009) (Schall, J.).
Plaintiff Synthes is a global medical device company and assignee of a U.S. patent directed to a "bone plating system." GMReis is a Brazilian corporation that manufactures and sells orthopedic and neurological medical devices, including bone plates. None of GMReis' products are approved by the U.S. Food and Drug Administration (FDA) for use by, or sale to, humans in the United States. In fact, GMReis has never sold any of its products in California and has only ever completed one U.S. sale to a veterinary medical supply company in Massachusetts.
Although it does not sell products in the United States, GMReis attended and operated a booth at the American Association of Orthopaedic Surgeons' Annual Meeting in San Diego, California in 2007. The CEO of GMReis and a GMReis employee represented GMReis at the San Diego trade show and displayed a number of products, including samples of five locking bone plates used to immobilize bones or bone fragments to promote healing of fractures. GMReis asserted that it sends representatives to this meeting because many non-U.S. surgeons attend the annual trade show and GMReis wanted to show its products to those non-U.S. surgeons. At the booth, GMReis displayed prominent signs and product literature stating that GMReis products were not approved by the FDA and were not for sale in the United States. The product literature did not list any price for the locking bone plates, and the company representatives did not discuss prices at the trade show.
Notwithstanding that it did not offer for sale or sell any of the bone plates at the trade show, Synthes served the GMReis CEO and employee with a summons and complaint for patent infringement based on the five locking bone plate samples displayed at the GMReis booth. Synthes sought a declaration of infringement and an injunction. The district court dismissed the case for lack of personal jurisdiction. Synthes appealed.
On appeal, Synthes argued GMReis is subject to personal jurisdiction because it imported infringing products into the United States when its representatives brought the sample locking bone plates to the trade show from Brazil and because GMReis used and offered to sell infringing products when it displayed and promoted the locking bone plates at the trade show. GMReis, on the other hand, argued that the acts of bringing sample locking bone plates into the United States and displaying them at a trade show without identifying a price for them did not constitute an import, use or offer to sell under 35 U.S.C. §271(a). The Federal Circuit sided with Synthes. The Court acknowledged that GMReis advertised its lack of FDA approval for sale or use of its products in the United States, as well as the fact that GMReis' intent was to attract interest from potential foreign purchasers rather than from potential U.S. purchasers. Nevertheless, the Court concluded that, indisputably, GMReis purposefully directed its travel with the sample locking bone plates to the United States and then displayed those products at a trade show in the United States attended by U.S. residents. The Federal Circuit noted that GMReis was present in the United States through two of its employees, including its CEO, both of whom conducted company business at the trade show. Accordingly, the Court held that GMReis was subject to specific personal jurisdiction in the United States and remanded the case back to the district court for further proceedings.
Practice Note: Displaying a sample product in the United States—even where the product is not approved for sale in the United States, is not offered for sale in the United States, and the foreign manufacturer in fact makes no sales in the United States—may be sufficient to subject the foreign manufacturer to personal jurisdiction for patent infringement if the claims of a U.S. patent read on the sample product.
Substitution of Known Material with Known
Properties Renders Patent Obvious
By Mark R. Anderson
The U.S. Court of Appeals for the Federal Circuit unanimously reversed a district court's infringement judgment on grounds that the asserted claims are obvious. Ritchie v. Vast Resources, Inc., Case Nos. 08-1528, -1529 (Fed. Cir., April 24, 2009) (Posner, J., sitting by designation).
Floridians Ritchie and Reynard, owners of Know Mind Enterprises, developed a rod-like device that used a "lubricious glass-based material" with boron oxide to make it resistant to electricity and bacteria, as well as slippery within the context of the patent. Borosilicate glass is the material originally used in Pyrex®. In 2006, Ritchie and Reynard sued rival Vast Resources Inc., which sells sex aids under the name Topco Sales, accusing it of infringing the patent.
Judge Posner began by noting that the properties of borosilicate glass recited in the asserted claims of the '924 patent, namely a smoother soda-lime glass that thus would require less lubrication to become slippery, or "lubricious," had been known in the art. Further, the wide spread notoriety of Pyrex® would make using borosilicate glass in a sexual aid obvious to try, "the triumph of hindsight over insight."
Judge Posner noted that "inventions the law deems obvious are those modest, routine, everyday, incremental improvements of an existing product or process that confer commercial value ... but do not involve sufficient inventiveness to merit patent protection." These types of inventions include "routine experimentation with different standard grades of material used in a product." Therefore, Judge Posner found that this case exemplifies the KSR decision of the Supreme Court, that "if a person of ordinary skill can implement a predictable variation, § 103 likely bars its patentability." As the Supreme Court stated, "if a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill."
As the claim of the '924 patent did not disclose any particular limit to the borosilicate glass, Judge Posner ruled that this case was like many other substitution of material cases in which patentability was denied on the grounds of obviousness and therefore reversed the finding of infringement.
The Federal Circuit Provides Its Two
Cents on Loose Change Patents
By Christina A. Ondrick
The U.S. Court of Appeals for the Federal Circuit upheld a claim construction ruling that resulted in the patent holder stipulating to a judgment of non-infringement in two separate cases. Every Penny Counts, Inc. v. American Express Company, Case. Nos. 08-1434 -1438 (Fed. Cir., April 30, 2009) (Cudahy, J., sitting by designation).
Every Penny Counts (EPC) is a patent holding company with patents on a method for donating excess cash to charities and savings accounts. The inventor described the invention as a way of solving the problem of loose change—i.e., the change you receive back after making a purchase.
EPC brought two separate infringement suits against two different sets of defendants. One set sells gift cards that can be used at multiple locations (credit card companies) and the other set sells gift cards that must be used with one specific vendor (gift card processors). The district court held a consolidated Markman hearing and adopted the construction urged by one set of defendants. This construction removed gift cards from the scope of the claims and resulted in EPC conceding that none of the defendants infringed. EPC appealed.
The critical issue on appeal was whether "excess cash" was correctly construed to mean an "amount selected by the payor beyond the total amount due at the point of sale" (loose change) or whether it should be construed to mean "an amount ... offered in excess of the sale price of merchandise" as urged by EPC.
EPC argued that the district court improperly construed language not disputed by the parties and used the design of the accused gift cards to fashion a claim construction that would avoid infringement. The Federal Circuit rejected both arguments.
The Federal Circuit found EPC's first argument ironic at best and disingenuous at worst. EPC proposed the phrase "sales price" as part of its construction of "excess cash." Thus, it should not object to the district court's attempt to understand that phrase, especially when the parties disputed its meaning. EPC argued that a sale does not occur until the merchant treats the cash as income in its accounting system. EPC further argued, without presenting any evidence, that a merchant does not treat the sale of a gift card as a sale until the gift card is used to make a purchase. The defendants, on the other hand, argued that a sale occurs when cash changes hands at a cash register.
The Federal Circuit concluded that the district court properly considered the meaning of "sales price" as part of its duty to ensure that questions of claim scope are not left to the jury. If the district court had accepted EPC's proposal without first assigning a meaning to this construction, the court would have failed to assign a fixed, unambiguous, legally operative meaning to the claims.
The Federal Circuit also rejected EPC's argument that the district court improperly considered the accused products during claim construction. The Court ruled that the district court simply invited the parties views on a series of hypothetical transactions, some of which included the accused products. According to the Court, "EPC's suggestion that this was improper is way wide of the mark."
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