IP Update, Volume 7, No. 5, May 2004
May 2004
IN THIS ISSUE
- Patents / Claim Construction -Claim Not Limited to the Singular Form Unless Patentee Manifests a Clear Intent to Do So
- Patents / Claim Construction - General Usage Dictionaries Cannot Overcome Credible, Art-Specific Evidence Concerning the Meaning of a Claim Term
- Patents / Claim Construction - Ordinary Meaning Rule Renders Broad Claim Construction, Invalidating Claimed Method of Screening for Inhibitors or Activators of Proteins
To Negate Public Use Bar Experimental Use Must Be Limited to Perfecting Claimed Features
By Astrid R. Spain
Reversing the district court’s erroneous claim construction, the U.S. Court of Appeals for the Federal Circuit held that Apotex’s product infringed SmithKline Beecham’s (now GlaxoSmithKline’s) claim covering the active ingredient of the antidepressant Paxil, but further held the claim invalid because SmithKline’s clinical tests prior to one year before filing constituted a public use not qualifying under the experimental use exception. SmithKline Beecham Corp. v. Apotex Corp., Case Nos. 03-1285, -1313 (Fed. Cir. Apr. 23, 2004) (Rader, J.) (Gajarsa, J., dissenting) (errata, Apr. 28, 2004).
Claim 1 of SmithKline’s U.S. Pat. No. 4,721,723, recites, in its entirety, “Crystalline paroxetine hydrochloride hemihydrate” (PHC hemihydrate), which is the active ingredient of SmithKline’s antidepressant drug Paxil. Apotex filed an Abbreviated New Drug Application (ANDA) with the U.S. Food and Drug Administration (FDA), seeking approval to market its own PHC antidepressant drug. Apotex identified the active ingredient in its antidepressant as PHC anhydrate and included in its ANDA a paragraph IV certification that its drug would not infringe the `723 patent. PHC anhydrate comprises crystals of PHC without bound water molecules. PHC hemihydrate comprises PHC crystals with one bound water molecule for every two PHC molecules.
Commencing its review with the claim construction, the Federal Circuit held that the district court erred in adding a “commercially significant” limitation into the compound claim by holding that anything less than a commercially significant quantity of the PHC hemihydrate falls outside the scope of SmithKline’s claim. Rather, the Court noted that the claim language unambiguously “describes a very specific compound without further limitation.” The district court considered, but precluded such a broad, literal interpretation on the basis that it would produce an “absurd result.” The Court, however, was emphatic that claim construction is not a policy-driven inquiry.
The Court also addressed the district court’s perceived conflict between claim breadth and indefiniteness under §112, noting that the claim covers a definite chemical structure and, regardless of its breadth, cannot be indefinite under §112. Addressing its 1993 decision in Morton Int’l v. Cardinal Chem., the Court noted that a claim to a chemical compound is only indefinite if “one skilled in the art could not determine whether a given compound was within the scope of the claim” and “does not depend on a potential infringer’s ability to ascertain the nature of its own accused product to determine infringement.”
Turning to the issue of experimental use, the Federal Circuit emphasized its commitment to the strict requirements of the experimental use negation of the statutory bar as being limited to testing claimed features, or features “inherent” in a claimed composition. Here, the Court pointed out that the claim at issue broadly covered PHC hemihydrate regardless of use and concluded that SmithKline’s clinical trials to establish the efficacy and safety of the compound as an antidepressant for FDA approval did not involve the claimed features of the invention so as to qualify as experimental use.
In a concurrence that featured a sua sponte analysis of §101, Judge Gajarsa concluded that, because the manufacture of PHC hemihydrate could be “a natural physical process” occurring “under normal climactic conditions and with no human intervention,” the claim at issue was invalid as directed to an unpatentable process of nature.
Practice Note: This case is a reminder to patentees that testing the properties, uses and commercial significance of a compound claimed solely in structural terms may start the clock under §102(b) for any claim that is not limited by any property, commercially significant amount or other use of the compound.
Claim Not Limited to the Singular Form Unless Patentee Manifests a Clear Intent to Do So
By Firasat M. Ali and Arturo E. Sandoval
The U.S. Court of Appeals for the Federal Circuit, in overturning a summary judgment ruling of non-judgment based on an erroneous claim construction, held that absent a clear indication by the patentee of its intent to limit a claim term to a single element, use of the indefinite articles “a” or “an” will be presumed to mean one or more elements, especially when combined with the transitional claim term “comprising.” Scanner Technologies Corporation v. ICOS Vision Systems Corporation, 2004 U.S. App. LEXIS 8108 (Fed. Cir. Apr. 23, 2004) (Michel, J.).
This case involves an apparatus patent and related method patent relating to technology and processes for inspecting electronic components. The invention uses illumination to scan ball grid arrays (BGAs) to make sure they are in proper positioning within electronic devices. BGAs are used in most electronic devices to conduct electrical impulses in those devices.
In construing the claims for both patents, the district court construed the phrase an “illumination source,” which did not appear in the claims of either patent, and found it to be limited to “only one illumination source.” The claims of the apparatus patent recited “an illumination apparatus positioned for illuminating a ball grid array,” and the claims of the method patent recited “illuminating a ball grid array.” In a motion for reconsideration, Scanner challenged the court’s claim construction, pointing to the distinction between the term construed, “illuminating source” and the actual claim term, “illuminating apparatus.” The district court recognized the distinction but found it to be not significant for the purpose of claim interpretation.
The district court, citing Instuform Technologies, Inc. v. Cat Contracting, Inc. and North American Vaccine, Inc. v. American Cyanamid Co., also interpreted the claim term “an” in the phrase “an illuminating apparatus” to be limited to a singular element. This was important since limitation of this term to a singular meaning meant that ICOS did not infringe since its device uses plural illuminating sources. Scanner appealed.
On the issue of whether it was proper for the district court to use the term “illumination source” as its basis for claim construction, the Federal Circuit found that it was improper to construe terms that did not appear in the patent claims. However, the Court found that since the district court also construed the terms “illuminating” and “illuminating apparatus,” the error was harmless.
In rejecting the district court’s restrictive interpretation of the words “an” and “a,” the Federal Circuit held that indefinite articles, such as “a” and “an,” should be construed to mean one or more elements when used in open-ended claims such as those using the transitional phrase “comprising.” The Court cautioned that limiting such language to the singular is only appropriate in rare circumstances where the patentee manifests a clear intention to so limit. The panel distinguished the Instuform and North American Vaccine cases, noting that in Instuform the term “a cup” was limited to a singular element because the claim and specification repeatedly described the term as “a single cup” and “the cup” meaning only one cup. In addition, the patent specification and drawings only disclosed use of one cup. In distinguishing North American Vaccine, the Court noted that the claim in issue did not use the term “comprising,” which in itself indicates that the elements or steps to follow may be supplemented by additional terms. The Court instructed that when the open claim term “comprising” is combined with the article “a” or “an” it “creates the presumption that the article is construed to mean one or more elements or steps, unless there is evidence of a clear intent to limit the claims.”
General Usage Dictionaries Cannot Overcome Credible, Art-Specific Evidence Concerning the Meaning of a Claim Term
By Shival Virmani
The U.S. Court of Appeals for the Federal Circuit refused to rely on the definition of a general usage dictionary to construe disputed claim language where the definition was at odds with the intrinsic evidence. Vanderlande Industries Nederland BV and Vanderlande Industries, Inc. v. International Trade Commission, Case No. 03-1249 (Fed. Cir. May 3, 2004) (Michel, J.).
This case involved conveyor sorting systems. Sorting systems are mechanical equipment used to sort items such as packages or mail. Typically, sorting systems have a main conveyor belt and several branch spurs3—the conveyor belt is considered a highway and the spurs are the highway’s off-ramps. In “positive-sorter” systems, certain devices push items off the conveyor belt and onto the spurs. The patent covered “shoe-type” positive sorters, wherein the main conveyor belt comprises several adjacent “slats.” A “shoe” rides atop each slat and mechanically pushes items across each slat onto the appropriate spur.
The claim language at issue recited “...shoes having a... glide surface surrounding said [slat] wall.” The alleged infringers argued before the International Trade Commission (ITC) that this language required a glide surface to contact the outer surface of a slat on all sides. The ITC rejected this argument, finding that the claim does not require each glide surface to contact all sides of a slat wall since a “glide surface” is a two-dimensional surface that does not imply any points of contact or non-contact between the inner surface of the shoe and the outer surface of the slat wall.
On appeal, the Federal Circuit affirmed, but noted that the term “‘glide surface’ means ... shoe’s inner surface that has some contact, but not necessarily complete contact, with the outer surface of the slat.” In reaching its conclusion, the Court looked to the discussion in the patent specification concerning the preferred embodiment, as well as the “Summary of Invention,” and noted that there are regions of the glide surface that do not contact the slat. The Court noted that general usage dictionaries are irrelevant where, as here, credible expert testimony demonstrated that the terms “glide” or “glide surface” did not have an ordinary meaning in the material handling or sorting industries and that independent of the specification, persons of ordinary skill would attach no specific meaning to the terms.The Federal Circuit panel also noted that the ITC’s claim construction, which did not require any contact at all, was overly broad, since it would cover technologies (e.g., slats on air currents) well beyond the scope of enablement of the patent.
Ordinary Meaning Rule Renders Broad Claim Construction, Invalidating Claimed Method of Screening for Inhibitors or Activators of Proteins
By David A. Gay, Ph.D.
The patentee, evoking a go-for-broke strategy, stipulated that its patents would be invalid and not infringed unless the district court claim construction was reversed or modified. The patentee lost all as the U.S. Court of Appeals for the Federal Circuit brushed aside the argument that claims are to be construed to preserve their validity and affirmed the district court’s claim construction. Housey Pharmaceuticals, Inc. v. Astrazeneca UK Ltd., Case Nos. 03-1193, -1210 (Fed. Cir. May 7, 2004) (Clevenger, J.) (Newman, J., dissenting).
Housey sued Astrazeneca and 11 other pharmaceutical entities alleging infringement of four patents. The issue focused a claim 1 of U.S. Pat. No. 4,980,281 (the `281 patent), directed to a method of determining whether a substance is an inhibitor or activator of a protein whose production by a cell evokes a responsive change in a phenotypic characteristic, is representative
of the claims in suit. The method requires treatment of a test cell containing the protein of interest and a control cell with a substance and comparing the phenotypic response between the treated cells.
The district court construed the term “inhibitor or activator of a protein” to mean a substance that has a greater effect on the phenotype of the test cell compared to the control cell, expressly rejecting Housey’s argument that an inhibitor or activator of a protein required direct binding to the protein of interest. The court’s construction included substances that affect a phenotypic change through direct or indirect interactions with the protein of interest.
Applying a “heavy presumption” that the claim language carries its ordinary meaning, even where to do so would render the claim invalid, the Federal Circuit analyzed the claim language, dictionary definitions and intrinsic evidence to construe the meaning of the term “inhibitor or activator of a protein.” Affirming that an inhibitor or activator of a protein is not limited to substances that directly bind to the protein of interest, the majority held that the claim language clearly supports the broader construction. The claim recites steps that identify an inhibitor or activator by determining the effect of a substance on the occurrence of a phenotypic response. The specification expressly defines the term without reference to binding and Housey’s reliance on dictionary definitions failed to support the narrow construction because they included a general definition requiring an effect on the biological activity. The Court also concluded that the specification failed to clearly disavow the broad plain meaning, holding that the specification and prosecution affirmatively demonstrated that Housey intended that the claim not be limited to direct binding.
In dissent, Judge Newman characterized recent panel decisions regarding the plain meaning rule as “confusing” and argued that without due consideration to the context of the invention, the Court’s “heavy presumption” may lead to absurd results because it disregards the fact that technical terms take their meaning from the document in which they are used and not the general meaning from general usages of the term. In Judge Newman’s view “[i]t is time to restore the law of claim construction to a more apt wisdom and more usable simplicity.”
License Omitting Material Terms Does Not Trigger On-Sale Bar
By Cathryn Campbell, Ph.D.
In reversing a district court’s decision declaring a patent invalid due to a prior offer to sell, the U.S. Court of Appeals for the Federal Circuit clarified the parameters of the on-sale bar under 35 USC §102(b) in the licensing context. Elan Corp., PLC v. Andrx Pharmaceutical, Inc., Case Nos. 30-1354, -1355, -1386, -1387 (Fed.Cir. May 5, 2004) (Lourie, J.).
Elan planned to develop a time release formulation of naproxen, a non-steroidal anti-inflammatory drug sometimes sold under the name Aleve, for projected sale in 1993. In 1987, Elan sent letters to Lederle Labs and others, proposing a license with specified up-front fees, milestone payments and a running royalty. In addition, Elan offered to supply bulk tablets at a price “based on current naproxen price.” Approximately three years later, Elan filed a patent application claiming a once-daily naproxen formulation, which issued as U.S. Pat. No. 5,637,320.
When Andrx filed an Abbreviated New Drug Application (ANDA) to market once-daily naproxen, Elan brought suit for patent infringement. The district court held that Elan’s letter to Lederle constituted an offer for sale and held the `320 patent invalid. In reversing, the Federal Circuit held that the letter was not an offer for sale, but rather an offer to enter into a license for sale of the licensed product “when and if it has been developed.” The Court based its reasoning on the letter’s failure to provide material sales terms, such as price, finding that “current naproxen sales” could only be determined at the time the product was marketed.
Moreover, because the letter did not specify definite quantities, it lacked a further material term and, therefore, did not constitute an offer.
Practice Note: This case provides useful guidance for those seeking licensees prior to the filing of a patent application. The Court cautioned that merely disguising a sales price as a licensing fee would not prevent a proposal from being construed as an offer. However, where, as in this case, a material term such as price or quantity is not provided, the on-sale bar will not be triggered.
Federal Circuit to District Court: Some Reasoning Please
By Bonnie J. Warren
Addressing the sufficiency of a trial court’s opinion, the U.S. Court of Appeals for the Federal Circuit vacated-in-part and remanded the case for a more detailed infringement analysis. Golden Blount, Inc. v. Robert Peterson Co., Case No. 03-1298 (Fed. Cir. Apr. 19, 2004) (Linn, J.) (Newman, J., concurring in-part and dissenting in-part).
Golden Blount brought a patent infringement suit against Peterson. Following a three-day bench trial, the trial court rendered its opinion concluding, among other things, that Peterson infringed certain claims of the patent; Peterson’s infringement was willful; prosecution history estoppel did not preclude the application of the doctrine of equivalents; the case was exceptional, warranting the award of lawyers’ fees; and Golden Blount was entitled to lost profit damages.
Peterson appealed, arguing that the court erred in its claim construction and the conclusion of literal infringement was not supported by any evidence; the court’s findings of contributory and induced infringement were erroneous because the court applied incorrect standards and because there was no evidence supported the court’s findings; and prosecution history estoppel precludes a finding of infringement. In the alternative, Peterson argued that the court’s conclusion of infringement was flawed because its application of the doctrine of equivalents vitiated a claim limitation.
The Federal Circuit agreed with the trial court’s claim construction, but found the court did not provide sufficient findings of fact or analysis in its opinion to “explain how the limitations of the claims, as construed, compare to the allegedly infringing device.” The Federal Circuit admonished that a trial court’s opinion “must include as many of the subsidiary facts as are necessary to disclose ... the steps by which the trial court determined factual issues and reached its ultimate conclusions.” The Federal Circuit concluded that the trial court’s judgments as to literal infringement, contributory infringement, induced infringement and infringement under the doctrine of equivalents were insufficient. Accordingly, the Federal Circuit vacated and remanded those portions of the trial court’s opinion with instructions to provide specific factual findings. Because it vacated the judgment with respect to all aspects of infringement, the Federal Circuit also vacated and remand the judgment as to willfulness, the exceptional nature of the case and damages.
In a separate opinion, Judge Newman noted that Peterson did not argue that the district court failed to provide an adequate analysis of infringement, and Peterson never asked for greater detail regarding the findings or conclusions of the district court. Judge Newman stated that “[i]f Peterson can establish that the findings and conclusions are not supported by law or evidence, then reversal is required—not remand for more findings.” In Judge Newman’s view, the panel should not sua sponte remand the case for a “longer opinion.”
A PCT Application Does Not Establish Priority in an Interference
By Lawrence T. Cullen
In reversing the U.S. Patent and Trademark Board of Appeals and Interferences (Board), the U.S. Court of Appeals for the Federal Circuit held that the Board properly required a verified translation of a Patent Cooperation Treaty (PCT) application to support an applicant’s claim to priority and priority cannot be based on an international application filed more than one year before the U.S. application. Stevens v. Tamai, Case No. 03-1479 (Fed. Cir. May 4, 2004) (Clevenger, J.).
In the course of an interference, both Stevens and Tamai filed motions to be accorded the benefit of priority based on their respective international applications. Stevens, relying on European applications, was granted a constructive reduction to practice date antedating Tamai’s PCT date. Tamai’s earliest U.S. application was a nationalized PCT application based on a PCT application filed in Japan, in Japanese, which in turn claimed priority to an earlier filed Japanese domestic application, filed more than one year before Tamai’s U.S. PCT (§371) application. Tamai filed a translation of the PCT application, which was accepted by the U.S. Patent and Trademark Office (USPTO) for the establishment of the §371 application. In its motion, Tamai provided an affidavit attesting that the Japanese domestic application was substantially the same as the §371 application, but Tamai did not serve a translation of the PCT application nor an affidavit verifying the accuracy of any translation of the PCT application with its motion. The Board granted Tamai the benefit of the Japanese domestic applications but denied the benefit of the PCT application because neither a translation nor a verification of any translation of the PCT application was served with the motion. Finally, a constructive reduction to practice based on the Japanese domestic application, Tamai was awarded priority of the count in the interference.
Stevens appealed, arguing to the Federal Circuit that without the benefit of the intervening PCT application, Tamai was not entitled to the benefit of the domestic Japanese application because Tamai’s U.S. PCT application was filed more than one year afterwards. The Court agreed, holding that §119 precludes relying on an international application filed more than one year before the corresponding U.S. application for priority.
Tamai argued that the Board should have granted it priority to the PCT application through the §371 U.S. application because under PCT protocols a U.S. application is to be given the benefit of a corresponding international application. The Court noted however, that §372(b)(3) also permits the USPTO to require a verification of the translation of the international application if it was not filed in English: “The Office is not required to accept an applicant’s transmittal letter requesting entry into the national stage as conclusive proof that a foreign language application contains a particular disclosure.” Tamai also argued that priority to the PCT application should be granted because a translation was already in the U.S. PCT application file and the USPTO accepted the translation to establish the §371 application. The Court rejected this argument, noting that the USPTO has authority to make rules that are not inconsistent with the law, the requirement to provide a verified translation of a non-English document is a reasonable requirement not inconsistent with any law, and, thus, Tamai failure to serve a translation or verification of the translation rendered its motion to establish priority under the rules deficient. The Court explained that “compliance with filing [PCT] requirements is not sufficient to prove constructive reduction to practice in an interference proceeding.”
Thus, the Court reversed the award of priority to Tamai and remanded the interference with instructions to enter judgment for Stevens.
Trademarks / Cancellation Proceedings
Public Awareness of a Trademark Is Required to Establish Lanham Act Rights
By James E. Griffith
The U.S. Court of Appeals for the First Circuit, in affirming a grant of summary judgment, held that neither the plaintiff’s intra-corporate transportation of goods bearing a disputed trademark from its U.S. offices to its U.K. offices, nor its subsequent sales from the U.K. into the Middle East, established trademark usage under the Lanham Act. General Healthcare Ltd. v. Qashat, Case No. 03-1968, 2004 U.S. App. LEXIS 7126 (1st Cir. Apr. 13, 2004). Because the plaintiff had abandoned whatever common law rights it may once have enjoyed in the United States, its action for cancellation of the defendant’s trademark registration was rejected.
From 1982 until approximately 1989, an unrelated third party used the mark KENT CREME BLEACH in the Middle East on a personal care product to lighten body hair. When the original user of the mark went out of business, both parties stepped in to adopt the identical mark for the same products. General Healthcare (GH) did so after purchasing rights in the name from the widow of the original user. Qashat adopted the mark through his company, Kent International Products (KIP), after a search revealed that the original user had gone out of business and abandoned its U.S. trademark application. KIP subsequently obtained U.S. trademark registrations for the word mark KENT CREME BLEACH and related trade dress. Ten years after learning of KIP’s adoption of the KENT CREME BLEACH mark, GH sought to cancel KIP’s U.S. registration based on its alleged prior rights.
The crucial issue was whether GH continued to use the mark in the United States after acquiring rights from the first user. A trademark owner who fails to use a mark for three consecutive years without good cause may be deemed to have abandoned its rights.
The First Circuit agreed with the district court that GH’s intra-corporate shipment of its KENT CREME BLEACH product from the United States for assembly in the United Kingdom did not constitute use of the trademark under the Laham Act. The Court noted that the transportation of trademarked goods from an entity’s U.S. office to one abroad does not give rise to trademark rights because U.S. consumers are not exposed to the mark and, as a result, no goodwill in the mark is generated. The Court further found that product sales from the United Kingdom to purchasers in the Middle East do not establish use in commerce under U.S. trademark law because wholly foreign sales are beyond the purview of the Lanham Act. Thus, in light of GH’s lack of rights in the disputed mark, KIP’s reasonable belief that the mark was available upon filing of its trademark application, and GH’s delay in bringing its action, the First Circuit affirmed the district court’s grant of summary judgment.
Once Federally Registered Mark “Freebies” Is Now Free for All
By Irene Lee
In affirming a summary judgment grant of non-infringement, the U.S. Court of Appeals for the Fourth Circuit held that the term “freebies” is generic and, thus, cannot be infringed by the internet domain name “freebie.com.” Retail Services Inc. v. Freebies Publishing, Case Nos. 03-1272 and 03-1317, 2004 U.S. App. Lexis 7130 (4th Cir. Apr. 13, 2004).
Retail Services Inc. (RSI) was operating its website www.freebie.com where customers could redeem their “Freebie Points” for merchandise. The owners of the federal trademark registration for the mark “Freebies” discovered RSI’s use of the word “freebie” on its website and filed an action under the Uniform Domain Name Dispute Resolution Policy. The arbitrator found that RSI’s domain name was confusingly similar to the owners’ registered mark and ordered the transfer of the domain name to the owners.
Thereafter, RSI brought the underlying action arguing that the “freebies” mark has become generic. The district court agreed. While acknowledging that the federal registration is prima facie evidence that the mark is not generic, the district court noted that only raises a presumption of validity that serves to shift the burden of producing evidence of genericness to RSI. The district court found that RSI met its burden by producing dictionary definitions of the word “freebie” from various sources; the owners’ generic use of the term in their own website; 1,600-plus websites that incorporate the word “freebie” or “freebies” into their domain names; and a list of 51 news reports using the phrase “freebie site” referring to websites similar to the owners’ freebies.com website. Based on what it considered overwhelming evidence in support of genericness, the district court granted RSI summary judgment.
On appeal, the owners of the mark first argued that summary judgment was inappropriate because an issue of fact existed by virtue of the federal registration and status of incontestability. The Fourth Circuit considered the registration and incontestability status and acknowledged the “significant procedural advantage” they bestowed on the owners of the registration. However, the Court echoed the district court’s finding that the presumption of validity and incontestability do not shield a mark that is generic. The Court also addressed its holding in American Online, Inc. v. AT&T Corp., clarifying that the issuance of a certificate of registration, by itself, does not create a per se issue of fact sufficient to defeat summary judgment. The Court explained “at most, American Online suggests that, as a general rule, the introduction of a certificate of registration will create enough of a factual dispute to render summary judgment inappropriate on the basis that the mark is generic.”
Bad Faith: The Fifth Fair Use Factor?
By Ann M. Brose
The plaintiff NXIVM produces the exclusive and expensive “Executive Success” business training seminars. All participants receive a 265-page course manual and are required to sign a non-disclosure agreement that bars them from releasing the manual or its proprietary techniques to non-participants. The defendant Ross runs a for-profit business as a “cult de-programmer” in addition to operating nonprofit websites that provide information on controversial groups that have been accused of mind control tactics. Ross obtained a copy of the NXIVM manual from a one-time participant in the program and commissioned two authors to analyze and critique the materials. The reports, which were highly critical of the program, quoted sections of the manual and were made available to the public on the websites.
NXIVM brought suit against various defendants on several claims and moved for a preliminary injunction to have the copyrighted materials removed from the websites. The district court denied the preliminary injunction, finding that NXIVM had little likelihood of success on the merits because the defendants’ fair use defense was likely to succeed. The Second Circuit affirmed the decision, but found that the district court erred in its application of the first statutory fair use factor that analyzes the “purpose and character” of the use. The Court agreed that the defendants’ use was in fact transformative, a finding which will normally tilt this factor in a defendant’s favor. However, the Court also found that the district court did not fully analyze and consider the impact of the defendants’ bad faith in obtaining a copy of the NXIVM manual, as directed under the Supreme Court’s decision in Harper & Row.
In its own analysis, the Court determined that the defendants misappropriated the manual in bad faith, but rather than find for the plaintiff based on this fact, the Court merely weighed this as a sub factor in its examination of the overall purpose and character of the use. Because the defendants’ use here was clearly critical and transformative, the Court found that the bad faith of the defendants was not dispositive of its fair use defense. Thus the Court noted, even with bad faith present, the “purpose and character” of the use factor may still weigh in favor of the defendants, and all of the other factors in the fair use analysis still must be given full consideration.
Patents / Claim Construction / Appellate Review
Texas Court 0 for 3 as Federal Circuit Reverses on Written Description, Enforceability and Laches, Largely Due to Faulty Claim Construction
By Matthew F. Weil
In a case which could serve as the poster child in a campaign for interlocutory appeals of claim construction issues, the U.S. Court of Appeals for the Federal Circuit reversed the Texas district court on claim construction, requiring reversal of various related rulings as well. Intirtool, Ltd. v. Texar Corporation, Case No. 03-1394 (May 10, 2004) (Linn, J.).
Following a bench trial, the district court held Intirtool’s patent invalid for failure to satisfy the written description requirement and unenforceable for inequitable conduct. Both holdings turned on the district court’s claim construction and, specifically, the district court’s determination that the preamble of the asserted claim should be deemed a limitation.
The claim at issue recited “[a] hand-held punch pliers for simultaneously punching and connecting overlapping sheet metal such as at the corners of overlapping ceiling tile grids comprising. “The difficulty for Intirtool was that the embodiments described in the specification ‘punched,’ but did not ‘connect’.” Based on its determination that “simultaneously punching and connecting” was a limitation of the claim, the district court held the lack of a description of such capability rendered the patent invalid. The court also held the failure to inform the United States Patent and Trademark Office (USPTO) that the invention did not have such capability rendered the patent unenforceable.
A claim preamble is limiting if it recites essential structure or steps, or if it is necessary to give “life, meaning, and vitality” to the claim. If the body of the claim “describes a structurally complete invention such that deletion of the preamble phrase does not affect the structure or steps of the claimed invention,” the preamble is generally not limiting unless there is “clear reliance on the preamble during prosecution to distinguish the claimed invention from the prior art.” On its review of the intrinsic evidence, the Federal Circuit determined the preamble was not integral to the detailed claim and there was no such “reliance.”
Upon review of the facts concerning when and how the plaintiff first learned for sure of the defendant’s infringing sales, the Federal Circuit also overturned the district court’s application of the equitable doctrine of laches. Holding the district court’s findings to the contrary “clear error,” the Federal Circuit held Intirtool was not required to investigate whether Texar was infringing merely because a customer of Intirtool mentioned the possibility of buying “a very similar tool” from a competitor shortly before it discontinued buying from Intirtool.
