McDermott - Newsletters - IP Update, Vol. 10, No. 3, March 2007

Addressing the issue of whether arguments limiting claim scope during prosecution of a parent application limit the scope of claims in a continuation, the U.S. Court of Appeals for the Federal Circuit upheld a decision that limited patent claims issued in a continuation application to the same scope as claims allowed in the parent application. Hakim v. Cannon Avent Group, PLC, Case No. 05-1398 (Fed. Cir., Feb. 23, 2007) (Newman, J.).

Hakim sued Cannon Avent Group for infringement of two his patents on spill-proof drinking cups. The district court granted Cannon summary judgment of non-infringement on the first patent. During prosecution of this patent, Hakim distinguished his invention from the prior art by emphasizing that his invention included a diaphragm with a “slit” that opens and closes. After receiving a notice of allowance, Hakim abandoned the original application in favor of a continuation which substituted the word “opening” for “slit” in the claims. The continuation claims were allowed without comment from the examiner. Cannon’s accused products had a diaphragm with an “opening,” but not a “slit.” Cannon thus argued that Hakim was limited by the disclaimer made during prosecution of the original application.

In affirming the grant of summary judgment, the Federal Circuit held that an applicant may not recapture claim scope that was previously disclaimed in an earlier application unless that disclaimer is rescinded. Furthermore, “the prosecution history must be sufficiently clear to inform the examiner that the previous disclaimer, and the prior art that it was made to avoid, may need to be re-visited.” Although Hakim had informed the examiner that he was broadening the claims in the continuation, he did not specifically point out that he no longer intended to be bound by the disclaimer. The Court held that merely informing the examiner that the new claims were broader was not sufficient to rescind the disclaimer.

Practice Note: Prosecutors and litigators alike should note that the scope of a patent claim will be limited by disclaimers made during prosecution of earlier, related applications unless those disclaimers are clearly rescinded during prosecution.

Patents / Claim Construction

An Unwise but Deliberate Decision Is Not An “Error” For Purposes of Reissue
By Brock Wilson

In deciding whether reissue is a viable medium for perfecting a claim to priority where an applicant made an initial poor choice, the U. S. Court of Appeals for the Federal Circuit held that the conscious choice of patent counsel to sacrifice an early priority date in order to include omitted drawings was not the type of “error” contemplated by the reissue statute, 35 U.S.C. §251. In re Serenkin, Case No. 06-1242 (Fed. Cir., Mar. 6, 2007) (Lourie, J.).

Patentee Serenkin submitted a Patent Cooperation Treaty (PCT) application, omitting eight sheets of drawings, to the United States Receiving Office (USRO) on the last day to claim priority from a corresponding U.S. provisional application. After Serenkin subsequently sent the omitted drawings to the USRO, the USRO gave Serenkin the choice of either submitting the drawings and receiving a new international filing date (i.e., the date the drawings were received) or proceeding without the drawings and retaining the original filing date. Choosing the later meant losing the priority date of the provisional application. Despite this consequence, Serenkin’s patent counsel chose to submit the drawings and take the later filing date. Thereafter, Serenkin’s patent counsel filed a U.S. national phase application, based on the international application, and, subsequently, a U.S. patent issued. After acquiring new patent counsel, Serenkin sought to reissue the U.S. patent in order to claim the priority date of the provisional application. Serenkin claimed procedural error on the part of the previous counsel. The U. S. Patent and Trademark Office (USPTO) Board of Appeals denied the reissue, and Serenkin appealed to the Federal Circuit.

On appeal, Serenkin argued that his original patent counsel erred by making the wrong procedural choice of accepting the new priority date rather than adding the drawings at a later date and contending the drawings did not constitute new matter. Thus, Serenkin argued the requirements of §251 were satisfied; in particular, that through error and without deceptive intent, the patent was partly inoperative or invalid.

The Federal Circuit rejected this argument, holding that reissue could not be used to perfect priority because the purported “error” asserted by Serenkin is not the type of error contemplated by §251. The Court reasoned that Serenkin’s attorney made a conscious decision to choose the benefit of including the drawings over the benefit of the original filing date. The Court characterized the case as one not about the failure to perfect priority, but “about an applicant who intentionally and knowingly surrendered his right to a claim of priority, in exchange for a benefit, and is now unhappy with his choice.”

Patents / Written Description

An Invention’s Critical Elements Must Be Included in Patent Claims
Contact Paul Devinsky

The U.S. Court of Appeals for the Federal Circuit recently affirmed a decision of the United States Patent and Trademark Office Board of Patent Appeals and Interferences (the Board) that the introduction of claims that omit a critical element required by the specification was invalid for lack of written description. Mukherjee v. Chu, Case No. 06-1450 (Fed. Cir., Feb. 15, 2007) (Michel, C.J.).

A patent interference proceeding is a procedure conducted before the USPTO to determine which of two or more competing inventions is entitled to priority. In this case, Mukherjee, an inventor, filed an amendment to an application which provoked an interference with U.S. Patent No. 6,030,720, invented by Chu et al. Chu moved for a judgment that Mukherjee’s involved claims were unpatentable for failure to comply with the written description requirement of 35 U.S.C. § 112, ¶1, arguing that because the involved claims do not recite Electroactive Transition Metal Chalcogenide (ETMC) as part of the cathode component of a battery cell, the claims are broader than the specification on which they are based.

The Board agreed with Chu after it examined Mukherjee’s application and found that the inclusion of ETMC in the cathodes of an electrochemical cell was a distinguishing feature of the invention. However, Mukherjee’s claims did not include a requirement that the cathodes contain an ETMC. Mukherjee's application criticized non-ETMC cathodes in the prior art and specifically distinguished his invention over the prior art by disclosing that his ETMC cathodes overcame the drawbacks associated with the prior art. The Board cited one section of Mukherjee’s application that specifically stated that ETMC was a critical element in all cases. Chu presented an expert who testified that one of ordinary skill in the art would understand that Mukherjee’s invention was limited to ETMC cathodes, while Mukherjee presented an expert who testified that ETMC was optional since the battery cells would still work without the ETMC component. The Board credited the testimony of Chu’s expert since it was consistent with the written description.

On appeal Mukherjee argued that the Board did not consider all of his expert’s testimony and failed to consider one part of his application which allegedly disclosed a method of making a non-ETMC cathode. However, the Federal Circuit deferred to the Board’s discretion regarding the expert testimony. With regard to the alleged written description, the Court found that, contrary to Mukherjee’s assertion, the section in question disclosed only ETMC cathodes because the described protocol uses a slurry that contains ETMC. The Court also noted that Mukherjee’s application repeatedly stated that composite cathodes necessarily contain ETMC. The Court concluded that there was substantial evidence to support the Board’s determination that the Mukherjee application did not comply with the written description requirement.

Patents / Equivalents Infringement

Equivalents Infringement Requires Showing of Particularized Evidence
By Kevin Roddy

The U.S. Court of Appeals for the Federal Circuit recently held that a district court erred in finding the doctrine of equivalents barred by prosecution history estoppel and in relying on unclaimed features to find a lack of equivalents, but nevertheless affirmed a grant of summary judgment because the plaintiff did not satisfy its burden to present particularized evidence of equivalents in opposition to the motion for summary judgment. AquaTex Indus., Inc. v. Techniche Solutions, Case No. 06-1407, (Feb. 27, 2007) (Dyk, J.).

This matter was previously before the Court in AquaTex Indus., Inc. v. Techniche Solutions, 419 F.3d 1374 (Fed. Cir., 2005). There, the Court held that claims 1 and 9 of U.S. Patent No. 6,371,977 were not literally infringed, but did not foreclose a finding of infringement under the doctrine of equivalents. The Court remanded for the district court to consider “whether or not each limitation of the claims in dispute, or its equivalent, is present in the accused Techniche products.” On remand, the district court granted summary judgment of non-infringement, and AquaTex appealed.

AquaTex’s patent related to multi-layered, liquid-retaining material used in evaporative cooling garments. During prosecution, AquaTex had made narrowing amendments to the claims in order to distinguish its claims from a prior art patent. The Court found that the subject matter surrendered by the narrowing amendment was directed to a completely different claim limitation than the “fiberfill batting material” at issue. Thus, the Court concluded that AquaTex surrendered no claim scope to the characteristics of the “fiberfill batting material” during prosecution and was not barred from asserting equivalents to the limitation. The Court then noted that AquaTex, as the plaintiff, was required to prove infringement under the doctrine of equivalents by a preponderance of the evidence. In particular, the Court pointed out, AquaTex was required to provide particularized testimony and linking argument to show the equivalents. The Court stated that, when the patent holder relies on the doctrine of equivalents, evidence must be presented to the fact finder through the testimony of a person skilled in the art, “typically a qualified expert, who (on a limitation-by-limitation basis) describes the claim limitations and establishes that those skilled in the art would recognize the equivalents.” The only evidence presented by AquaTex was their CEO’s testimony, which merely explained how the accused product operated. Thus, AquaTex did not address the equivalence of Techniche’s product to the “patented method on a limitation-by-limitation basis,” or the insubstantiality of the differences between the claimed invention and the accused device or process or the “function, way, result test,” as required. The Court concluded that the AquaTex’s presentation of lawyer argument and generalized testimony about the accused product were insufficient to demonstrate a genuine issue of material fact that would prevent the grant of summary judgment.

Practice Note: For a patentee to win a summary judgment motion under the doctrine of equivalents, the patentee should use testimony from an expert or one skilled in the art to specifically address equivalents on a limitation-by-limitation basis, explain the insubstantiality of the differences between the claims of the patent and the accused product, or discuss the function, way, result test.

Patents / Claim Construction

Federal Circuit Grants Interlocutory Review of Claim Construction
Contact Paul Devinsky

The U.S. Court of Appeals for the Federal Circuit, in a somewhat unusual situation, granted a motion for interlocutory review of a district court claim construction order. The Regents of the University of California et. al., v. Dako North America, Inc. Case No. 07-1202 (Fed. Cir., Feb. 14, 2007) (Lourie, J.). Permission for such a review is rarely granted. Typically, the Federal Circuit reviews claim construction issues only on appeal from final judgment.

The plaintiffs alleged infringement of two patents relating to in situ DNA hybridization. As to an accused kit product, plaintiffs sought a preliminary injunction within three weeks of commencing the litigation. The district court denied the preliminary injunction of the kit product based on the plaintiff’s failure to show either a likelihood of success on the merits or a balance of hardships in its favor. The plaintiffs appealed the denial under 28 U.S.C. § 1292 (a) (1). The plaintiffs also appealed from a subsequent amended order that changed a basis for questioning the validity of a patent-in-suit from lack of novelty to the doctrine of non-statutory double patenting.

After the two pending appeals had been fully briefed, the plaintiffs sought a review of yet another order arising from a motion for summary judgment of non-infringement. In this order, several claim construction issues addressed in the prior orders were revisited by the court based on a more complete record (including the prosecution history). Because the order did not involve an injunction, plaintiffs petitioned for a discretionary interlocutory appeal under 28 U.S.C. § 1292 (b). The district court certified that the order relating to the motion for summary judgment involved a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation. The plaintiffs represented that defendants consented to the discretionary appeal.

The Federal Circuit granted the petition for interlocutory appeal of the third order on the grounds of efficient use of judicial resources. The Court explained that, unlike the situations in most petitions for interlocutory appeal, claim construction was already before the Federal Circuit by virtue of the two pending appeals stemming from the preliminary injunction orders. Accordingly, concerns of premature review, or subsequent review of the same issue, are not present. The Court noted that if it refused the petition, the panel in the pending appeals would review the first two district court orders based on a limited (preliminary injunction) record. Thus, the Court reasoned that hearing all three appeals at the same time would facilitate the resolution of all of the claim construction disputes.

Patents / Inequitable Conduct

Long Live the Reasonable Examiner
By Ed Garcia-Otero

Addressing the slippery issue of inequitable conduct, the U.S. Court of Appeals for Federal Circuit upheld the district court’s ruling that two patents for cooking oil were unenforceable due to inequitable conduct. The patent applicant failed to disclose experimental data which contradicted the claimed oxidation properties of canola cooking oil. Cargill, Inc. v. Canbra Foods, Ltd., Case Nos. 06-1265, -1302 (Fed. Cir., Feb. 14, 2007) (Jordan, J., 3rd Cir., sitting by designation).

To hold a patent unenforceable due to inequitable conduct, “there must be clear and convincing evidence that the applicant (1) made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information and (2) intended to deceive the U.S. Patent and Trademark Office.”

The Court ruled that information is “material” if it meets the test of materiality either under new PTO Rule 56(b) (2006), or the “reasonable examiner” standard of Rule 56(a) (1991). Thus, the “reasonable examiner” materiality test remains the viable standard.

Under the “reasonable examiner” standard, “information is material where there is a substantial likelihood that a reasonable examiner would consider it important in deciding whether to allow the application to issue as a patent.” The Court held that a reasonable examiner “would certainly want to consider test data that is directly related to an important issue of patentability.”

The Court quotes Critikon, saying “intent may be inferred where a patent applicant knew, or should have known that withheld information would be material to the PTO’s consideration of the patent application.” Thus, the intent to deceive may be inferred if a patent applicant should have known, even if they did not actually know, that information was material to a reasonable examiner.

In this case, five of the rejections in the prosecution involved oil oxidation properties of the claimed invention, and the Court noted “[a]n applicant should know information is material when the examiner repeatedly raises an issue to which the information relates.” Thus, information that might not have been consider material by an applicant when the application was filed, might become material after an examiner makes a rejection.

Practice Note: Compliance with the “reasonable examiner” standard of materiality and the “should have known” standard of intent may, especially “the context of an extended prosecution involving many office actions, be burdensome—but must nevertheless be met. Many patent attorneys, being conservative and cautious, simply disclose as much information as possible when filing a patent application (when access to the inventor is most likely available). Ideally however, all those who have a role in the duty of disclosure (from the inventor, to in-house counsel, to outside counsel) should each consider, in the face of any particular office action, whether information already known (but not yet cited) is material in view of the patentability issues raised by the examiner.

Patents / Litigation / Standing

State Court Decision of Patent Ownership Is Not Subject to District Court Review
Contact Paul Devinsky

The U.S. Court of Appeals for the Federal Circuit held that title to a patent obtained through a state court foreclosure action on a promissory note secured by the pending application could not be challenged as fraudulent under the guise of a challenge to standing. MyMail, Ltd. v. America Online, Inc., et al., Case Nos. 06-1147, -1172 (Fed. Cir., Feb. 20, 2007) (Bryson, J.).

MyMail obtained ownership of the patent-in-suit from Mr. Derby, who acquired the patent application by way of a state court foreclosure action on a promissory note secured by the application. MyMail later asserted the patent against America Online (AOL). AOL did not attempt to nullify the state court judgment but proceeded to challenge MyMail’s standing on the basis that the promissory note was fraudulently procured. The Federal Circuit held that the defendants could not collaterally attack the promissory note and affirmed the district court’s ruling that MyMail had standing to assert the patent-in-suit.

The defendants appealed, arguing that the underlying promissory note was fraudulent, which destroyed the chain of title and robbed MyMail of standing. The defendants asked the district court to inquire into the ownership issue, but did not identify who the alleged legal owner was.

The Federal Circuit reaffirmed that the “plaintiff must demonstrate legal title to the patent at the inception of the lawsuit to be entitled to sue for patent infringement.” Although standing is governed by federal law, state law governs the question of legal title. MyMail’s reliance on “an enforceable state court judgment that transferred title under Texas law,” was sufficient to prove ownership. The Court noted that the alleged infringers needed to nullify that state court judgment to establish a break in the title chain. The defendants argued that fraud could be raised at any time and justified an independent review. The Federal Circuit distinguished between fraud associated with the procurement of a patent and fraud relating to patent ownership. The Court noted “[s]tate law, not federal law, addresses such property ownership disputes.”

Writ of Mandamus

Exercising Authority to Issue Writs of Mandamus
By Anish R. Desai

The U. S. Court of Appeals for the Federal Circuit, in a rare exercise of its supervisory authority, issued a writ of mandamus directing a district court to stay its proceedings pursuant to 28 U.S.C. § 1659 until the parallel U.S. International Trade Commission (ITC) proceedings were no longer subject to judicial review. In re Princo Corp., Misc. Docket No. 841 (Fed. Cir., Mar. 1, 2007) (Dyk, J.).

The petitioner, Princo Corp., filed a petition for a writ of mandamus asking the Court to vacate the district court’s grant of summary judgment and stay the case pursuant to § 1659 until the related ITC proceedings were complete. The Court first determined that issues “properly before the Federal Circuit on appeal are no less within [the Court’s] jurisdiction when raised by extraordinary writ.” In the present case, the issue was interpretation of § 1659, and the Federal Circuit held that in the context of a patent infringement case, this substantive issue was to be determined as a matter of Federal Circuit law. The respondent, U.S. Philips Corp., argued that the issue on writ was a matter of procedure and not one of substantive patent law and that the Court should decline to exercise its supervisory authority. The Court disagreed, pointing to numerous cases illustrating its exercise of mandamus authority in a variety of contexts, some that did and some that did not directly implicate substantive patent law.

In issuing the writ of mandamus, the Court found that Princo met the heavy burden of demonstrating that its right to issuance of the writ is “clear and undisputable” and that “it lacks adequate alternative means to obtain the relief sought.” The Court began by answering the previously open question of the meaning of when an ITC determination “becomes final” as contemplated by § 1659. Citing various federal statutes using similar language, as well as the purpose of § 1659, i.e., to prevent separate proceedings on the same issues occurring at the same time, the Court concluded that § 1659 requires the stay of district court proceedings continue until the ITC proceedings are no longer subject to judicial review. Finally, the Court found that Princo’s right to issuance of the writ was clear and undisputable because its right to stay the district court proceeding could not be corrected on direct appeal, since § 1659 was designed to prevent the proceedings from occurring in the first place.

Patents / Litigation

Even “Harmless Error” Can Hurt
By Eric Hinkes

Addressing the issue of whether a district court erred in granting a voluntary dismissal (in order to cure a standing issue) without first disposing of the pending counterclaims, the U.S. Court of Appeals for the Federal Circuit found that while the grant of dismissal was erroneous, it was “harmless error” and that making the dismissal without prejudice and without conditions was within the district court’s discretion. Walter Kidde Portable Equipment, Inc. v. Universal Security Instruments, Inc., Case No. 06-1420 (Fed. Cir., Mar. 2, 2007) (Jordan, J., 3rd Cir., sitting by designation).

Kidde initially brought suit against Universal Security Instruments (USI) alleging infringement of a patent relating to battery backup smoke detectors. The case proceeded to the stage of expert reports, even in the face of the defendants challenge to Kidde’s standing to assert the patent. Because Kidde’s expert reports were untimely, the district court granted USI’s motion to exclude the reports and declarations of Kidde’s three expert witnesses. However, because the district court had been concerned with a long-simmering standing issue raised by USI, challenging Kidde’s claim of ownership of the patent at the time the suit was filed, Kidde moved for voluntary dismissa

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IP Update, Vol. 10, No. 3, March 2007

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