IP Update Vol. 6, No. 8, August 2003
August 2003
IN THIS ISSUE
SPECIAL SUPPLEMENT
In this issue, we are pleased to present a timely and informative special article by Stephen A. Becker, chair of MWE’s Patent Prosecution Group. In his article, Stephen provides an insightful analysis of Commissioner Rogan’s strategic plan for modernizing the U.S. Patent and Trademark Office and what it will mean in terms of user fees, application pendency
times and prosecution strategies.
The unabridged version of this article can be found here.
Dictionary Is Primary Source to Define Claim Term
By Shamita D. Etienne and Jeffrey A. Woller
The U.S. Court of Appeals for the Federal Circuit upheld a construction of the claim term "high frequency" where the district court used dictionary definitions to supply the ordinary and customary meaning of the term. Intellectual Property Development, Inc. v. UA-Columbia Cablevision of Westchester, Inc., Case No. 02-1248 (Fed. Cir. July 21, 2003).
Intellectual Property Development, Inc. (IPD) sued UA-Columbia Cablevision of Westchester, Inc. (Cablevision) for the infringement of U.S. Pat. No. 4,135,202 (the `202 patent). Cablevision counterclaimed for declaratory judgments of invalidity, non-infringement and unenforceability.
In the case, the patent claim at issue recites a broadcasting system that transports signals between a central office and its various subscribers via a "high frequency" carrier signal. The parties disputed the range of frequencies that would qualify as a "high frequency." When the district court initially construed "high frequency," it held that the term would encompass frequencies within a 54-216 MHz range. Upon reconsideration, however, the court relied on a dictionary definition and further limited the range of "high frequency" to fall within a more narrow range of 3-30 MHz. Because Cablevision’s system operated in the 30-300 MHz range, the district court also granted Cablevision’s motion for non-infringement. IPD appealed, arguing that the district court erred in referring to extrinsic evidence, such as dictionaries, when "the intrinsic evidence, including the claim language, the specification and the prosecution history, establishes that ‘high frequency’ encompasses any frequency at which a conventional television receiver can receive and display a signal."
In affirming the lower court’s claim construction and its determination of non-infringement, the Federal Circuit rejected the patentee’s argument that the lower court "‘put the cart before the horse’ by looking at the dictionary definitions first instead of the specification to determine the meaning of the term ‘high frequency.’" Rather, the Court reasoned that "consulting the written description and prosecution history as a threshold step in the claim construction process, before any effort is made to discern the ordinary and customary meanings attributed to the words themselves, invites a violation of our precedent counseling against importing limitations into the claims." In its analysis, the Federal Circuit created a rebuttable presumption that a definition, such as that found in a dictionary, is the ordinary and customary meaning of a claim term: "[I]n the absence of an express intent to impart a novel meaning to claim terms, the words are presumed to take on the ordinary and customary meanings attributed to them by those of ordinary skill in the art."
In rejecting IDP’s argument that dictionary definitions should not be used in place of the patent specification to define claim terms, the Federal Circuit noted that "dictionaries, encyclopedias, and treatises, publicly available at the time the patent is issued, are objective resources that serve as reliable sources of information." Citing Texas Digital, the Federal Circuit also rejected IDP’s argument that the use of dictionaries is inappropriate because definitions of "high frequency" are not consistent from dictionary to dictionary: "‘[T]he intrinsic record must always be consulted to identify which of the different possible dictionary meanings of the claim terms in issue is most consistent with the use of the words by the inventor.’"
Patents / Biotechnology / Inherency
Prior Art Found to Inherently Anticipate Even Where No Feature of the Claimed Invention Was Described
By David A. Gay, Ph.D. and Paul Devinsky
In a case of first impression, the U.S. Court of Appeals for the Federal Circuit affirmed a lower court’s finding of anticipation of a drug metabolite where the prior art patent disclosed only the drug. Schering Corp. v. Geneva Pharmaceuticals, Inc., Case Nos. 02-1540 to -1549, 03-1021 to -1023,-1025,-1027 (Fed. Cir., Aug. 1, 2003). Finding that an enabling disclosure for use of the drug anticipated its metabolic product produced in the human body, the Schering decision invalidated a patent for the first time where inherency supplied the entire anticipatory subject matter.
Claritin™ is a non-drowsy antihistamine formulation marketed by Schering Corp. (Schering). Its active component, loratadine, was covered by U.S. Pat. No. 4,282,233 (the `233 patent, which is now expired) to Schering. Ingestion of loratadine results in the breakdown product descarboethoxyloratadine (DCL). Schering’s subsequent patent, U.S. Pat. No. 4,659,716 (the `716 patent), covers the loratadine metabolite DCL. The `233 patent is prior art to the `716 patent, but does not expressly disclose DCL or refer to metabolites of loratadine.
Schering sued generic drug makers of loratadine for infringing the `716 claims to DCL. The district court construed the claims to cover all forms of DCL, including forms "metabolized within the human body" and granted summary judgment of invalidity because DCL was formed as a metabolite through the process disclosed in Schering’s `233 patent.
The Federal Circuit strongly rejected the patentee’s contention that recognition of an inherent disclosure before the critical date of the `716 patent was a requirement for anticipation. Precedent required only the missing feature to be necessarily present in the single prior art reference for anticipation. Later recognition that loratadine was metabolized into DCL did not preclude the inherent characteristics in Schering’s `233 patent that DCL would be formed following ingestion of loratadine.
The issue before the Court was whether anticipation could be found when all of the claimed subject matter was inherent in the `233 prior art patent. Mindful that all prior cases involved inherent disclosure of only some of the claimed features, the Court concluded that the extent of the disclosure does not limit its anticipatory effect. Inherency places subject matter in the public domain to the same extent as does an express disclosure and applies equally to "entire inventions as well as [to] single limitations." Affirming summary judgment of invalidity, the Court held the `233 patent was anticipatory prior art because it discloses how to make DCL by disclosing administration of loratadine to patients, and substantial evidence showed DCL was necessarily formed upon digestion. The Court stressed that, while the claims in issue were anticipated for encompassing all forms of DCL, the holding did not preclude patentability of drug metabolites in general.
Subsequent Patents Attempting to Extend Period of Exclusivity for Brand Name Drug Invalid for Obviousness
By Astrid R. Spain
The U.S. Court of Appeals for the Federal Circuit affirmed a district court’s holding that subsequent patent claims aimed at extending the period of exclusivity for a best-selling, brand-name drug are obvious over prior art, but reversed the lower court’s finding that the accused infringer was entitled to an award of attorney’s fees. McNeil-PPC, Inc. v. L. Perrigo Company, S.A., Case No. 02-1516 (Fed. Cir. August 1, 2003).
Faced with the expiration of its patent covering the best-selling antidiarrheal drug Imodium® A-D, McNeil filed two sets of patent applications aimed at extending its market leader position. A first set of patents (the Garwin patents) were subsequently issued with composition and method claims directed to an allegedly synergistic combination of the original Imodium® A-D’s active ingredient, the antidiarrheal loperamide, with a second active ingredient, simethicone. A second set of patents (the Stevens patents) were issues that covered methods and tablets having a polymeric barrier between the two active ingredients, based on the discovery that a decrease in biavailability results if simethicone directly contacts loperamide.
McNeil sued the generic drug maker Perrigo for infringement of the Garwin and Stevens patents. The district court held that the patents in suit were invalid as obvious and awarded Perrigo attorney’s fees, finding exceptional conduct based on "McNeil’s repeated erroneous representations, failure to disclose relevant prior art, and overall persistence in prosecuting exceedingly obvious ‘inventions.’"
The Federal Circuit agreed that patent claims directed to combinations of loperamide and simethicone were rendered obvious by the prior art, which disclosed the use of various antidiarrheal compounds and simethicone. The Court discounted the alleged secondary indicia of non-obviousness, indicating that massive marketing and advertising obscured evidence of commercial success, while evidence of unexpected results was statistically insignificant and inconsistent.
The patents directed to a polymeric barrier to separate the two active ingredients were also held invalid as obvious. Here, the Federal Circuit pointed to the Garwin patents, which disclosed the separation of loperamide and simethicone into different layers of a tablet, viewed in light of a prior patent disclosing separation of simethicone from other ingredients in combination products through use of a polymeric barrier. The Federal Circuit discounted McNeil’s contention that the prior art patents did not identify the problem of loperamide’s short shelf life in combination tablets with simethicone and found sufficient motivation to combine in the teaching of an impermeable barrier to prevent simethicone migration to an adjacent pharmaceutical-containing layer.
However, the Federal Circuit reversed the award of attorney’s fees, noting that short of inequitable conduct or litigation misconduct, McNeil was entitled to file patent applications on what it considered patentable inventions, regardless of the motive to extend protection on an expiring patent.
Lack of Novelty of Product Does Not Render Process Obvious
By Michael S. Wilcox
In reversing and remanding the district court’s summary judgment of obviousness, the U.S. Court of Appeals for the Federal Circuit held that a process claim is not rendered obvious by the lack of novelty of its product, even where the patentee argued during prosecution that the product’s novelty justified the non-obviousness of the process. TorPharm, Inc. v. Ranbaxy Pharm., Inc., Case No. 02-1590 (Fed. Cir. July 23, 2003).
TorPharm’s `671 patent-in-suit is directed to a process for producing "improved" Form 1 Ranitidine, which is used to treat ulcers. The improved Form 1 Ranitidine is denser than prior preparations with desirable filtration and drying characteristics. The `671 patent claims require that the process involve a three- or four-carbon alcohol solvent and that it yield Form 1 Ranitidine with specific density characteristics (the improved form).
During prosecution, the patentee added the density characteristics to overcome obviousness rejections over other patents disclosing Form 1 Ranitidine preparations. The patentee also argued that the improved Form 1 was novel. TorPharm owned a separate product patent for the improved product. Following the prosecution of the process patent, TorPharm’s product patent was found invalid for prior sale by an unrelated company of Form 1 Ranitidine with the required density characteristics. There was no evidence that the process of the `671 patent was used to produce the invalidating material.
TorPharm sued Ranbaxy for infringement of the `671 patent. Ranbaxy filed a motion for summary judgment of invalidity, arguing that TorPharm should be precluded from arguing non-obviousness because it acquiesced to the examiner’s obviousness rejection during prosecution by changing the claims to specify improved Form 1 that TorPharm claimed was novel. The district court granted Ranbaxy’s motion, stating that the claims of the `671 patent would not have been granted but for the novelty of the product.
In reversing, the Federal Circuit held that while a process for a novel product is itself novel, the contrapositive is not necessarily true. Because a product is not novel does not mean that the process that produced it is not novel.
As for the assertion that the process patent would not have been issued but for the novelty of the product, the Court noted that its responsibility is not to speculate as to what an examiner would have done in light of the new information. But rather the Court’s role is to assess independently the validity of the claim against the prior art.
Regarding the issue of patentee’s acquiescence, the Court noted that whether a patentee chose to dispute the examiner’s view of matters is relevant to claim interpretation, not future litigation. While a patentee’s acquiescence to an examiner’s narrow view of a claim’s meaning narrows that meaning, a patentee’s decision to forgo a particular validity argument during prosecution does not preclude use of that argument in later litigation.
Pre-Litigation Conduct of Patentee Toward Alleged Infringer Does Not Support Award of Attorney Fees
Contact Paul Devinsky
The U.S. Court of Appeals for the Federal Circuit, finding that conduct that gives rise to an equitable estoppel defense is not an appropriate basis for awarding attorney fees, reversed a district court in finding that a case was "exceptional" under 35 U.S.C. §285. Forest Laboratories, Inc. v. Abbott Laboratories, Case No. 03-1067 (Fed. Cir. August 7, 2003).
The Abbott case concerned two patents directed to a lung surfactant composition for treating respiratory distress syndrome in premature babies that Abbott licensed (the Tanabe patents). Pursuant to its license, Abbott developed a commercial product known as Survanta®. ONY developed its own product, Calf Lung Surfactant Extract (CLSE), which was further developed and marketed by Forest Laboratories under the trade name Infasurf®.
Throughout the 1980s, Abbott and ONY discussed the development of CLSE. Abbot informed ONY that it had opted not to develop CLSE. In 1984, after conducting a patentability search, Abbott told ONY that CLSE was likely not patentable in light of two "pertinent references," but did not mention the Tanabe patents. Abbott and ONY discussed future collaboration and the possibility of joint development of CLSE. Abbott monitored the development of CLSE while internally expressing concern that ONY might receive U.S. Federal Drug Administration (FDA) approval for its Intrasurf® product before Abbott could receive approval for Survanta®.
In 1991, Abbott received FDA approval and orphan drug status for Survanta®. Abbott subsequently informed ONY and Forest that it had reason to believe that Infasurf® would infringe the Tanabe patents if it were marketed. When ONY filed a new drug application in 1995 for approval to market Infasurf®, the FDA notified ONY that Infasurf® was the "same drug" as Survanta® under the Orphan Drug Act, and it, therefore, could not be approved for sale until Abbott’s seven-year market exclusivity period expired.
ONY and Forest sued Abbott seeking a declaratory judgment of non-infringement and invalidity of the Tanabe patents. Abbott counterclaimed for infringement. After a jury found both patents infringed and were not invalid, the district court granted ONY and Forest a judgment of non-infringement as a matter of law (JMOL). The district court found that Abbott failed to present any evidence to show CLSE infringed the Tanabe patents and further ruled that Abbott was equitably estopped from asserting infringement of the Tanabe patents against ONY and Forest. The district court based its equitable estoppel ruling on its finding that Abbott misled ONY and Forest to believe that it would not assert infringement by encouraging their development of Infasurf® and by "neglecting its duty to inform them of any possible infringement" upon which ONY and Forest reasonably relied.
The district court also granted ONY and Forest’s motion for attorney fees and expenses, finding the case to be "exceptional" under §285. The district court found that Abbott, in bad faith, encouraged ONY to develop CLSE, disregarded its duty to advise ONY and Forest of possible infringement and pursued its infringement counterclaim with a "reckless disregard for the facts in an attempt to prevent Infasurf from reaching the market."
The Federal Circuit reversed, finding that "exceptional" cases under §285 are those cases involving "inequitable conduct before the [patent office]; litigation misconduct; vexatious, unjustified, and otherwise bad faith litigation; a frivolous suit or willful infringement." Since none of those circumstances was present, it was error for the district court, in its "expansive reading of §285," to find the case exceptional. The Federal Circuit noted, "[W]e have not … upheld a finding of exceptionality based on a patentee’s bad-faith business conduct toward an accused infringer prior to litigation, and we decline to expand the scope of the statutory term ‘exceptional’ in that manner." While equitable estoppel may be imposed when a patentee induces another party to believe that it will not be sued for infringement, the consequence of that estoppel is the loss of the cause of action, not attorney fees "under the rubric of exceptional case."
Court Cannot Revise Claim Construction After Trial
By Matthew F. Weil
The U.S. Court of Appeals for the Federal Circuit held that it was improper for the district court to modify its claim construction after the instruction of the jury as to the meaning of claim terms. The Court also held that an in-court demonstration of a prior art device was sufficient corroboration of oral evidence to support a finding of invalidity. Hewlett-Packard Co. v. Mustek Systems, Inc., Case Nos. 02-1372, -1395, -1465 (Fed. Cir. August 7, 2003)
The two patents in suit involve optical scanner technology, in which images and text from a document are converted into electronic data. The jury was instructed that a claimed "scan speed indicating means" required a user selectable scan speed device. Neither party objected to the instruction. At trial, the jury found that Mustek literally infringed. The jury did not address infringement under the doctrine of equivalents.
In a JMOL motion, Mustek challenged the finding of infringement urging that the claims require the user to select a specific scanning speed and the accused scanners, while permitting the user to select scan resolution, do not permit the user to select scanning speed. In denying Mustek’s motion, the district court elaborated on the claim construction provided to the jury and found, based on a more general definition, that the element was present, at least under the doctrine of equivalents. Mustek appealed.
Hewlett-Packard (H-P) argued that under the claim construction used by the district court in its decision on Mustek’s JMOL motion, infringement was present. The Federal Circuit held that H-P could not challenge, in post-trial motions, the claim construction with which the jury was instructed: "[W]hen issues of claim construction have not been properly raised in connection with the jury instructions, it is improper for the district court to adopt a new or more detailed claim construction in connection with the JMOL motion." The Court further found that using the claim construction with which the jury was instructed, the jury’s verdict of literal infringement was not supported by substantial evidence. "Literal infringement of §112 ¶ 6 claim requires that the relevant structure in this accused device perform the identical function recited in the claim and the identical or equivalent to the corresponding structure in the specification." The Court held that "it was improper for the district court to expand [H-P’s] opposition to [Mustek’s] motion for JMOL of non-infringement to grant JMOL of infringement under the doctrine of equivalents in favor of [H-P]." The Federal Circuit also found that a new trial was not appropriate because H-P "did not make a sufficient record with respect to the equivalents claim," which would require "particularized testimony and linking argument" "on a limitation-by-limitation basis."
As to validity, the jury found that Mustek proved by clear and convincing evidence that certain patent claims were invalid based in part on testimony of prior public use, corroborated by a re-enactment of such use through an in-court demonstration using a prior art device. H-P attacked the evidentiary support for the finding of obviousness, arguing that the testimony regarding the use of the Mustek scanner was uncorroborated. The Federal Circuit concluded that the testimonial evidence was sufficiently corroborated by the operation of the device itself, which was "made contemporaneously with the alleged prior invention."
Patents / Appellate Jurisdiction
Motion In Limine Not Appealable Pursuant to Rule 54(b) Absent a Final Judgment
By Rania Chamoun Sarkis
The U.S. Court of Appeals for the Federal Circuit, in dismissing an appeal of an in limine evidentiary ruling certified by the district court pursuant to Rule 54(b), held that absent a final judgment on at least one claim, such a ruling could be appealed only pursuant to 28 U.S.C. 1292(b). Ultra-Precision Mfrg. Ltd. v. Ford Motor Co., Case No. 02-1622 (Fed. Cir. July 28, 2003).
The case arose out of a dispute between Ford Motor Company (Ford) and Ultra-Precision Manufacturing Limited (UPM), from whom Ford had sought technical assistance in the late 1980s in connection with problems associated with Ford’s air conditioning technology. UPM alleged that its technicians were co-inventors on a patent for its air conditioning compressor, which was subsequently obtained by Ford.
UPM sued for, among other things, correction of inventorship and unjust enrichment. Ford sought summary judgment on these claims and also filed two motions in limine to exclude evidence of damages for any uses of technology disclosed in UPM’s patents but not claimed and damages for any use of patent because Ford, as a co-inventor, could not be liable for damages under 35 U.S.C. §262. The district court granted both in limine motions, denied summary judgment and granted UPM’s request that the rulings be certified pursuant to Rule 54(b) for immediate appeal.
The Federal Circuit focused on the distinction between Rule 54(b) and 28 U.S.C. §1292(b), explaining that Rule 54(b) permits a court to direct the entry of a final judgment as to fewer than all pending claims upon the express determination that there is no just reason for delaying the appeal of such claims. On the other hand, under §1292(b), when a district judge issues an order that is not otherwise appealable but believes that the order involves a controlling question of law as to which there is substantial ground for difference of opinion and an immediate appeal from the order may advance the termination of litigation. The court may so state in writing, and the appellate court has discretion to entertain an interlocutory appeal from such an order.
In this case, because the district court’s ruling related only to the exclusion of damages evidence, there was no final disposition of a claim. Thus, the Court found that certification of the appeal under Rule 54(b) was improper and dismissed the appeal for lack of jurisdiction.
No-Challenge Provisions in Certification Mark Licensing Agreements Not Enforceable
By Linda A. O. Lamberson
The U.S. Court of Appeals for the Second Circuit, remanding a case for further consideration, adopted and applied the balancing test set forth in Lear v. Adkins to a certification mark license agreement that precluded the licensee from attacking the validity of the mark. Idaho Potato Comm’n v. M&M Produce Farm & Sales, Case No. 02-7818(XAP), 2003 U.S. App. LEXIS 13901 (2nd Cir. July 11, 2003).
On a cross-appeal of an infringement suit brought by the Idaho Potato Commission (IPC), M&M Produce Farm & Sales (M&M), a former licensee of IPC, argued that the district court’s order, estopping M&M from attacking the validity of IPC’s mark, violated public policy.
In considering the issue, the Second Circuit cited Lear, noting that while certification marks are more akin to trademarks than patents, there are fundamental differences in the public policy interests associated with certification marks and trademarks. Specifically, the court noted that certification mark owners "cannot refuse to license the mark to anyone on any ground other than the standards it has set." Indeed, the overall regime for certification marks "protects a further public interest in free and open competition" by shielding producers and distributors from the undue influence of certification mark owners and ensuring the certified products offered are of the highest quality and at the best price.
In contrast, trademark owners are granted monopolies over their marks and are given wide latitude when determining which terms and conditions to impose on licensees of their marks, as long as there is no resulting likelihood of confusion.
This distinction led the Second Circuit to conclude that the public interest in certification marks closely resembles the public interest in the "full and free use of ideas in the public domain" central to patent laws. The court also noted that, as in Lear, certification mark licensees are often the only parties who are willing to challenge the validity of a certification mark, and "muzzling" them would only force the public to continue to "pay tribute to would-be monopolists without need or justification."
Practice Note: Although this is a Second Circuit decision, its ramifications will likely resonate throughout the United States, as evidenced by the fact that other Circuit Courts of Appeals have already employed similar balancing tests, including the Lear test, when deciding whether to enforce trademark licensing agreement provisions. Thus, when drafting certification mark licensing agreements, practitioners should advise their clients that no-challenge provisions may not be ironclad should a licensee choose to challenge the validity of the mark.
WEB-ONLY ARTICLES
Patents / Appellate Jurisdiction
Claim Construction Ruling Not Appealable as a Matter of Right
By Christopher D. Bright
The U.S. Court of Appeals for the Federal Circuit has confirmed its long-standing position that claims construction rulings are not appealable as of right. Nystrom v. TREX Co., Case No. 03-1092, 2003 U.S. App. LEXIS 16317 (Fed. Cir. Aug. 8, 2003).
In Nystrom, after the district court entered its ruling on claim construction and granted summary judgment of non-infringement, it entered an express final judgment of invalidity as to certain of the asserted patent claims. However, the district court stayed certain other counterclaims of invalidity and unenforceability. On appeal, the Federal Circuit held that the pendency of these remaining patent claims precluded the district court from effectively certifying an appeal pursuant to Rule 54(b).
In dismissing the appeal, the Federal Circuit reiterated the purpose of the Court’s "final judgment rule" (as set forth in 28 U.S.C. §1295) is to prevent piecemeal litigation. The Federal Circuit restated the four possible avenues of appeal as a matter of right: a trial on the remaining counterclaims or otherwise a final disposition on the merits of those counterclaims; a dismissal of the remaining counterclaims without prejudice (with or without a finding that they were mooted by the summary judgment of non-infringement); "‘an express determination that there is no just reason for delay’ and then [an express direction of] entry of final judgment on fewer than all of the claims under Federal Rule of Civil Procedure 54(b)"; or (4) a certification of interlocutory judgments and orders of the district court pursuant to § 1292(b) or (c)(1). Noting that a stay order is generally not a final order, the Federal Circuit dismissed the present appeal because the district court did not choose one of these approaches.
Practice Note: In its opinion, the Federal Circuit observed that claim construction rulings are often "determinative of either infringement or invalidity, but seldom both." However, such an appeal of one of these issues before determination of the other might serve judicial economy. As the Court noted, it is obliged to follow the "final judgment rule" until the rule is changed.
Claim Term’s Plain and Ordinary Meaning Controls Unless Expressly Narrowed by Intrinsic Evidence
By Patrick D. Richards
The U.S. Court of Appeals for the Federal Circuit reversed and remanded a declaratory judgment of non-infringement of a patent relating to bicycle gear-shifting devices, holding the district court erred in its construction of the claim term "shift actuator." SunRace Roots Enterprise Co., Ltd. v. SRAM Corp., Case No. 02-1524 (Fed. Cir. July 17, 2003).
The patent in suit (the `291 patent) contains both method and apparatus claims relating to gear-shifting on multi-speed bicycles through the use of a shift actuator designed to precisely control movement of a derailleur. Indexed shifting may be implemented on a multi-speed bicycle through the use of a cam mechanism, in which a cylindrical cam member fits over the bicycle’s handlebar and a cam operating face interacts with a cam pin as the shift actuator is rotated. The method claims of the `291 patent include the limitation "shift actuator" without reference to a cam.
The district court concluded that the plain and ordinary meaning of the term "shift actuator" is "a mechanism that controls the changing of gears." However, the district court ruled that in light of the specification and prosecution history, the term "shift actuator" as used in the `291 patent is limited to "a mechanism for controlling the changing of gears that contains a cam configured with a series of lobes and valleys that rotates so as to engage a cam follower." The parties stipulated that, under the district court’s interpretation, the accused devices did not infringe. SRAM appealed.
The Federal Circuit first noted that claim terms must be given their ordinary and accustomed meaning unless the patent expresses an intention to impart novel meaning to the claim terms. The Court found that since the cam structure was recited in other claims, the doctrine of claim differentiation supported the use of the plain and ordinary meaning of the term "shift actuator." The Court further found that nothing in the patent’s specification nor the prosecution history indicates the invention is exclusively directed toward cams, or systems not employing cams are outside the scope of the invention. Moreover, the Court stated that consideration of extrinsic evidence is inappropriate because the intrinsic evidence resolves any ambiguity regarding the disputed claim term.
Accordingly, the Court held because the intrinsic evidence does not clearly narrow the disputed claim term, the ordinary meaning of the claim term "shift actuator" must be used.
Patent Claims for a Website System Not Limited by Problems Solved
By Elaine Heal
Rejecting the district court’s "level of detail" analysis, the U.S. Court of Appeals for the Federal Circuit concluded that when a patent sets out novel solutions to two different problems in the prior art, it is not necessary for each claim to address both solutions. Resonate Inc. v. Alteon Websystems, Inc., Case Nos. 02-1201,-1225 (Fed. Cir. Aug. 5, 2003).
The patent-in-suit (the `660 patent) relates to a website system used for handling client requests when accessing a website that uses a server farm. The patent describes two problems with a prior art process for distributing client requests among multiple servers in the farm so that no single server is overloaded. In the prior art, a router is placed between the client and the servers to route all requests to a server. The first problem identified with such a system is that each server must maintain a complete copy of the website, which can be expensive. The second problem is that all data transfers must go through the router, which can cause a bottleneck. The invention described in the `660 patent describes a system that provides a solution to both of these problems, in part by permitting data transmitted from the server to the client to bypass the router and, in part, by distributing the website content among the servers.
The issue on appeal was the construction of the phrase "transmitting the requested resource to the client." The dispute centered on whether, as held by the district court, the phrase required the router to be bypassed. The district court’s analysis was based on the high level of detail of the other elements in the claim, including details of the relationship between the client and server. However, even though the subject phrase did not recite a router, the district court inferred the patentee’s intent to include the bypass of the router feature.
The Federal Circuit began its claim construction inquiry with the ordinary meaning attributed to the words of the claim. The Court then reviewed the written description to determine if the patentee’s use of the term "transmitting" in the phrase in issue was consistent with the ordinary meaning. Finally, the Court turned to the prosecution history to determine its relevance to claim construction. The Federal Circuit concluded there was nothing in the claim language itself, "transmitting the requested resource to the client," that limited the path of transmission to bypass the router.
The Federal Circuit disagreed with the district court’s level of detail analysis stating that "[c]ourts may not rewrite claim language based on what has been omitted from a claim." Although the preferred embodiment included the bypass feature, the Court noted "limitations may not be read into a claim from a preferred embodiment when the claim language is broader than that embodiment" and concluded the bypass feature was not included in the claim element at issue.
Alteon argued that the claim required the bypass feature because the bypass was one of the main inventive features. The Court disagreed. It noted that where an invention includes two (or presumably more) inventive features, each feature does not need be addressed in every claim, and the claim at issue was directed to the prior art problem of storing a copy of the website on each server, not to resolving the bottleneck problem.
Patents / Enablement / Indefiniteness
Federal Circuit Affirms $98.1 Million Ruling Against Halliburton
By Matthew Weil
The U.S. Court of Appeals for the Federal Circuit turned back a determined written description and claim indefiniteness assault by Halliburton, affirming the judgment entered by the district court on the jury’s verdict as supported by substantial evidenced. BJ Services Co. v. Halliburton Energy Services, Inc., No. 02-1496 (Fed. Cir. August 6, 2003).
In the underlying action, BJ Services sued Halliburton for infringing claims of a patent directed to a method of fracturing subterranean formations to stimulate oil and gas wells. Halliburton argued that the patent was invalid for indefiniteness, lack of adequate written description, lack of enablement and failure to name the proper inventors. At trial, the jury rejected these arguments, found Halliburton to have infringed and awarded damages of $98.1 million.
On appeal, Halliburton argued that because the patent was not enabling as it failed to quantify or state how to obtain a particular value recited in the claims (the so-called C* value, defined in the patent as the "concentration necessary to cause polymer chain overlap"). At trial, Halliburton merely showed that the value of C* could vary depending upon the chosen conditions. The company did not call its expert to testify about the measurement conditions one of skill in the art would employ. According to the Federal Circuit, this showing was insufficient to undercut the jury’s finding of enablement.
As to Halliburton’s contention that the claim limitation "about 0.06" was not sufficiently definite, the Court held that substantial evidence supported the jury’s conclusion that one of ordinary skill in the art would understand what is claimed when the claim is read in argument that the term "about" is intended to encompass the range of experimental error that occurs in any measurement and that one of skill in the art would readily understand the range that "about 0.06" was intended to include.
Halliburton also argued that the patent in suit was invalid for failing to name the proper inventors, specifically the person who allegedly invented the CMG polymer used in practicing the claimed invention. The Court held that Halliburton had failed to prove by clear and convincing evidence that the omitted "inventor" had conceived any of the claimed invention, which involved a method of fracturing a subterranean formation (and not the polymer itself that was used). The patentee presented evidence at trial that the omitted "inventor" had no knowledge of the method, how the polymer would be used or the C* value. Substantial evidence, therefore, supports the jury’s finding that the `855 patent is not invalid for failing to properly name the true inventors.
Trademarks / Likelihood of Confusion
Only Similarity of Products Required for Trademark Infringement
By John J. Dabney
The U.S. Court of Appeals for the Second Circuit has held that a plaintiff need not compete with or sell the same goods as the defendant in order to prevail on a trademark infringement claim. Virgin Enters. Ltd. v. Nawab, No. 02-7491, 2003 U.S. App. LEXIS 14052 (2nd Cir. July 11, 2003).
The plaintiff and owner of the trademark VIRGIN operates record stores that sell various electronic products. The defendant used the mark VIRGIN for telecommunication services. The plaintiff filed suit, seeking a preliminary injunction enjoining the defendant from using the VIRGIN mark.
The district court, focusing on the fact that the plaintiff did not use its mark for telecommunications services, denied the request, finding that the plaintiff failed to demonstrate a likelihood of success on the merits of its trademark infringement claim.
The Second Circuit reversed. The court held that the electronic products that the plaintiff sold in its stores were similar to the defendant’s telecommunications services. The Second Circuit noted that the likelihood of confusion test was designed for cases precisely like this one, where the defendant was not in direct competition with the plaintiff, but sold a slightly different product. The court noted that likelihood of confusion under these circumstances was not only likely, but almost inevitable.
What’s in a Name?
By Richard Y. Kim
The U.S. Court of Appeals for the Federal Circuit reversed a U.S. Patent and Trademark Office (USPTO) decision denying extensions of time to oppose an application in the face of an apparent mistake attributed to an erroneous entry in the law firm’s computerized database. Custom Computer Services, Inc. v. Paychex Properties, Inc., Case No. 03-1148 (Fed. Cir. July 22, 2003)
The lawyer for the opposer, Payroll People, Inc., filed two requests for an extension of time in order to file a Notice of Opposition in the name of "Custom Computer Services, Inc., formerly known as The Payroll People." In fact, the entity known as Payroll People still existed at the time and Custom Computer Services was a separate company that was also a client of the lawyer’s law firm.
When Payroll People finally filed a Notice of Opposition within the extended time, its notice was dismissed as untimely because the Trademark Trial and Appeal Board (TTAB) failed to give Payroll People the benefit of the earlier extensions. Although Payroll People explained the nature of its mistake and sought correction of the extensions, the TTAB refused to permit the correction, interpreting the term "mistake" in 37 C.F.R. § 2.102(b), the rule that allows for a party misidentified by mistake in an extension request to proceed as the opposing party, to mean "a mistake in the of form the potential opposer’s name or its entity type . . . not . . . the recitation of a different existing legal entity that is not in privity with the party that should have been named." The TTAB then found no privity between The Payroll People, Inc. and Custom Computer Services, Inc. and dismissed the opposition. The opposer appealed.
The Federal Circuit agreed with the TTAB’s interpretation of the term "mistake" in §2.102(b), but found that the TTAB’s application of the rule was not supported by "substantial evidence." Although substantial evidence supported a finding of the lack of privity, the Federal Circuit noted that §2.102(b) clearly sets forth two disjunctive conditions under which an opposer may claim the benefit of an extension granted to another named entity: privity and misidentification by mistake. In reversing the TTAB’s decision, the Federal Circuit found that the evidence clearly supported a qualifying mistake within the meaning of § 2.102(b) in that there was never an entity presently named "Custom Computer Services, Inc., formerly known as The Payroll People," and the mistake that occurred was in the form of the entity’s name, a mistake consistent with the USPTO’s definition of a mistake. In other words, this was not an attempt to substitute one entity in the place of a different existing legal entity.
