Publications / McDermott Newsletters / IP Update, Volume 7, No. 8, August 2004

IP Update, Volume 7, No. 8, August 2004

August 2004

IN THIS ISSUE

Patents / Claim Construction

Federal Circuit en banc Rehearing Likely to Clarify Method for Claim Construction
By Dennis Duchene

In what may lead to a clarifying opinion regarding patent claim construction, the U.S. Court of Appeals for the Federal Circuit agreed to rehear, en banc, an appeal previously decided by a three-judge panel.  Phillips v. AWH Corporation, et al., Case Nos. 03-1269, 1286 (Fed. Cir. July 21, 2004) (Mayer, C.J.).

The April 8, 2004 panel decision of the Federal Circit affirmed the district court’s summary judgment of non-infringement by AWH of Phillips’ wall modules.  The district court based its decision on the term “baffle,” a claimed element of the wall module.  The district court, relying only on the embodiment in the specification, construed the term to mean a baffle that extends inwardly at an angle other than ninety degrees.  The Federal Circuit panel, also relying on the specification, affirmed the district court’s construction.  Judge Dyk dissented, arguing that the term “baffle” should be given its plain meaning, and should not be limited to an angle other than ninety degrees.

In agreeing to rehear the case en banc, the Federal Circuit asked the parties to brief several issues, including whether dictionaries or the specification should be the primary source for claim construction, or whether both should be used and in what order.  It also asked the parties to address whether there are certain cases in which the claim should be narrowly construed to avoid invalidity, what the role of prosecution history and expert testimony should be in claim construction and what level of deference should be given to the trial court’s claim construction.  Chief Judge Mayer dissented from the order for rehearing, asserting that the Court should first reconsider its prior holdings that claim construction is a matter of law.

The Federal Circuit decision to rehear the case may lead to clarification of the various inconsistent panel decisions in the area of claim construction.  Currently, patent infringement litigation is often unpredictable because of these inconsistent panel decisions.  A shift by the Federal Circuit in its approach to claim construction, either towards using a term’s plain meaning supported by dictionaries, or towards relying primarily on the patentee’s own specification, could have a significant impact on
patent scope.

The Federal Circuit specifically asked the U.S. Patent and Trademark Office (USPTO) to submit an amicus curiae brief in the case.  This may well lead to more strict procedures by the USPTO requiring clear definition of claim terms in the patent specification itself, thereby changing the manner in which patent practitioners write patent applications.  Such requirements would have the greatest impact on patent applications concerning new and emerging technologies, such as nanotechnology and bioinformatics, where claim terms are often not found in existing references.

Patents / Written Description

Biotech Functional Characterizations Fail Written Description Test Again
By David Gay, Ph.D.

Acknowledging that a structure-function relationship can provide adequate written description for claims to genetic material, the U.S. Court of Appeals for the Federal Circuit nevertheless held that a partial amino acid sequence failed to provide the requisite correlation for describing a claimed nucleotide sequence.  In re Wallach, Case No. 03-1327 (Fed. Cir. Aug. 11, 2004) (Lourie, J).

Wallach discovered tumor necrosis factor (TNF) binding proteins I and II (TBP-I and II), which selectively inhibit cytotoxic effects of tumor necrosis factor, based on a partial amino acid sequence, molecular weight and functional characteristics of TBP-II.  The U.S. patent application 08/485,129 (the `129 application) is directed to an isolated DNA molecule encoding TBP-II characterized by partial amino acid sequence, molecular weight and TNF inhibitory effect.  Affirming the U.S. Patent and Trademark Office’s rejection, the Board of Patent Appeals and Interferences (Board) concluded that the `129 application fails to describe the claimed genetic material with sufficient specificity to satisfy the written description requirement of §112, first paragraph.

On appeal Wallach argued that the DNA claims are sufficiently described because they do not differ in substance from previously allowed claims directed to TBP-II protein in view of the “unequivocal correspondence” between amino acids and the encoding genetic material.  Wallach additionally asserted that the complete amino acid sequence of a protein is an inherent property of an isolated protein and distinguished the precedential Lilly decision, which rejected the description based on functional characteristics, because an actual partial amino acid sequence had not been provided.  Wallach contended that a partial amino acid sequence of an isolated protein confers possession of the entire encoding DNA sequence given the known correlation between encoding function and protein structure.

Recognizing that the state of the art has sufficiently developed to where an amino acid sequence might confer possession of the genus of encoding DNA sequences, the Federal Circuit indicated that DNA molecules defined only in terms of the protein sequence, although containing a large number of species, are sufficiently definite to be deemed adequately described.  However, rather than claiming a nucleic acid encoding the protein segment represented by the partial protein sequence, the `129 application instead encompasses the entire TBP-II protein.  Absent the remaining 95 percent of the TBP-II amino acid sequence, the Court held that the `129 application failed to adequately describe the claimed DNA molecules.  The Court further concluded that the additional functional characterizations were similarly insufficient to describe the full DNA sequence, reasoning that physical possession of the protein failed to confer knowledge of the protein’s sequence or other descriptive properties sufficient to deduce the encoding DNA sequence.  The Court also rejected applicability of a structure-function relationship because without a complete amino acid sequence the well known relationship between a nucleic acid’s structure and its amino acid encoding function could not be exploited.

Patents / Antitrust Counterclaims

Federal Circuit Clarifies Choice of Law for Patent Antitrust Counterclaims
By Matthew Weil

For antitrust counterclaims in patent cases, the Federal Circuit held that its own law should be applied to analyzing issues relating to alleged abuses of the patent right, but that regional circuit law governs the remainder of the antitrust analysis.  Unitherm Food Systems, Inc. v. Swift-Eckrich, Case Nos. 03-1472, -1473 (Fed. Cir. July 12, 2004) (Gajarsa, J.).

Unitherm sued Swift-Eckrich, Inc. (doing business as ConAgra) for a declaratory judgment of patent invalidity and non-infringement, and for attempted monopolization.  The case involved a patent issued to ConAgra for a method for browning precooked meat and ConAgra’s subsequent threats to enforce the patent against Unitherm and others.  According to district court, in applying for the patent, ConAgra neglected to tell the U.S. Patent and Trademark Office that Unitherm had approached it several years before the critical date (and, indeed, before ConAgra’s date of purported invention), and offered to sell it the process in question (and machinery to practice the process).  Having found those facts, the district court held the ConAgra patent both invalid and unenforceable.  The Federal Circuit affirmed.

As to the choice of law, citing its 1998 en banc decision in Nobelpharma v. Implant Innovations, the Federal Circuit affirmed that its law must be applied to portions of the antitrust counterclaim analysis premised on an abuse of the patent right (for example, Unitherm’s Walker Process claim).  As to the remainder of the analysis, taking its lead from the recent Supreme Court decision in Holmes Group v. Vornado Air Circulation, the Court confirmed that regional circuit antitrust laws apply.

In this case, the Court applied its own law to find evidence of a Walker Process-type fraud sufficient to strip ConAgra of patent immunity.  But then, applying Tenth Circuit law, the Federal Circuit found that there was not sufficient evidence of ConAgra’s market power to sustain antitrust liability and “Unitherm failed to present any economic evidence capable of sustaining its asserted relevant antitrust market, and little to support any other aspect of its Section 2 claim.”

Patents / Best Mode 35 U.S.C. §112

Known Operations Cannot Be Deemed Intentionally Concealed Absent Evidence of Intent
By Jeffrey Barclay

Addressing whether a well-known operation can be deemed intentionally concealed, absent evidence of intent, the U.S. Court of Appeals for the Federal Circuit reversed a district court’s grant of summary judgment of patent invalidity that was based on the inventors’ failure to disclose the preferred mode of practicing an invention.  High Concrete Structures, Inc., v. New Enterprise Stone and Lime Co., Inc. and Robbins Motor Transportation, Inc., Case No. 03-1477 (Fed. Cir. July 29, 2004).

High Concrete Structures, Inc. (High Concrete) is the owner of U.S. Pat. No. 5,947,665 (the `665 patent).  The `665 patent is directed to a device for adjusting the orientation of heavy and bulky cargo loaded on a truck for transport.  By adjusting the orientation of large concrete structures to a particular angle, the loaded truck is so wide as to be classified as carrying an oversized load.  To adjust the orientation, the `655 patent discloses that the loaded cargo may be rotated manually without heavy equipment, although this is not a requirement.

New Enterprise Stone and Lime Company is a concrete product maker and Robbins Motor Transportation is a long-distance trucking company, both of which are collectively referred to as “New Enterprise.”

High Concrete sued New Enterprise, alleging infringement of the `665 patent.  New Enterprise moved for summary judgment, arguing that the specification of `655 does not describe using a crane in the preferred mode to orientate the cargo on a truck. The district court granted New Enterprise’s motion and held the `655 patent claims invalid for failing to disclose that the preferred mode of practicing the invention was to use a crane to tilt the cargo when loaded into a truck.  High Concrete appealed.

On appeal, the Federal Circuit reversed the summary judgment, holding that the district court incorrectly applied the law of best mode.  New Enterprise had conceded that using a crane to assist with heavy loads is well known to persons in the field of loading cargo, and there was no evidence or inference of intent to conceal the use of a crane to assist in loading.  Citing Ajinomoto Co., the Court held that “The best mode requirement of 35 U.S.C. §112 is not violated by unintentional omission of information that would be readily known to persons in the field of the invention.”  Since it was undisputed that anyone having experience with heavy loads would know to use a crane to move a load, using a crane in this known operation cannot be deemed intentionally concealed absent evidence of intent to deliberately withhold
that information.

Patents / Hatch-Waxman Act

Artificial Infringement Under Hatch-Waxman Act Does Not Constitute Willfulness
By David Gay, Ph.D.

Addressing the issue of artificial infringement under the Hatch-Waxman (H-W) Act, the U.S. Court of Appeals for the Federal Circuit held that filing an Abbreviated New Drug Application (ANDA) cannot constitute willful infringement.  Glaxo Group Ltd. v. Apotex, Inc., Case No. 03-1575 (Fed. Cir. July 27, 2004) (Gajarsa, J.) (Dyk, J., concurring-in-part, dissenting-in-part).

Ceftin is an antibiotic having the active ingredient cefuroxime axetil (CA), and is the subject of two now expired Glaxo Group Ltd. (Glaxo) patents.  U.S. Patent No. 4,562,181 (the `181 patent) claims amorphous CA having a purity of at least 95 percent and pharmaceutical compositions.  U.S. Patent No. 4,820,833 (the `833 patent) claims a method of preparing a highly pure amorphous CA.

Apotex, Inc. (Apotex) filed an ANDA for a generic version of Ceftin containing 90 percent amorphous CA with 10 percent excipients.  Because CA was approved under a now repealed provision exempting antibiotic manufacturers from listing relevant patents with the FDA, Glaxo did not list its patents, and Apotex did not file a certification in its ANDA application.  Glaxo sued Apotex under the H-W Act, which provides an infringement cause of action against generic manufacturers filing for FDA market approval.  Construing the 95 percent purity limitation of the `181 patent claims to exclude excipients, the district court found Apotex infringed because its ANDA stated its product did not contain more than 1 percent impurities, excluding excipients.  Infringement of the `833 patent was based on a similar rationale.  The district court also concluded that Apotex failed to exercise due care in its ANDA filing, holding willful infringement and awarding attorney’s fees.

The Federal Circuit affirmed the district court’s claim construction, concluding that Apotex’s construction, requiring the purity limitation to include added excipients, would: conflict with the term’s ordinary meaning; exclude preferred embodiments; and conflict with the specification.  Relying on Apotex’s ANDA admission as to purity level, the Court upheld infringement of both the `181 and `833 patents.  Construing remedies available under the H-W Act, the Court noted that filing an ANDA gives rise to only three statutory remedies: delay of product approval; injunctive relief; and damages when actual commercial activity has occurred.  Addressing the issue of willfulness, the Court indicated that the mere filing of an ANDA or certification does not justify elevation to willful infringement.  The Court reasoned that the statutory scheme creates a “highly artificial” act of infringement with specific remedies for the limited and technical purpose of conferring jurisdiction to enable adjudication of generic drug manufacturers before actual infringement of a patent.  Apotex did not engage in any litigation misconduct; therefore, the award of attorney’s fees was reversed.

Concurring on willful infringement, Judge Dyk dissented on the issues of infringement and invalidity, concluding an absence of a case or controversy since no past damages were sought and the patents had expired.

Patents / Reexamination

Piggyback ex parte Reexaminations Are Clipped by the USPTO
By Kenneth Cage and Lawrence Cullen

The U. S. Patent and Trademark Office (USPTO) now instructs examiners that an ex parte reexamination based on a subsequent concurrent reexamination request which relies on the same prior art as an on going ex parte reexamination should be ordered
“… only if the prior art raises a substantial new question of patentability which is different than that raised in the preceding reexamination.  If the prior art raises the same substantial new question of patentability as that raised in the pending reexamination proceedings, the second of subsequent request should be denied.”  MPEP 2240, 8th Ed., Rev. 2, May 2004, italic emphasis added.

The new position of the USPTO is a major shift in ex parte reexamination practice, in which a previous second concurrent reexamination request based on the same prior art was assured to result in a reexamination order.  The previous version of MPEP 2240, explained “If the requester includes in the second or subsequent request prior art which raised a substantial new question in the pending reexamination, reexamination should generally be ordered.  This is because the prior art which raised a substantial new question of patentability resulting in an order for reexamination continues to raise a substantial new question of patentability until the pending reexamination is concluded.” MPEP 2240, 8th Ed., Rev. 1, Feb. 2003.

Under the prior guidelines, second concurrent ex parte reexaminations were often used by third party requesters as a mechanism to respond to statements by the patent owner during the ex parte reexamination proceedings.  By requiring a third party requester to raise a different substantial new question of patentability than previously raised, the change in the USPTO policy may make it difficult for third party requesters in ex parte reexamination to respond to statements by the patent owner. 

The USPTO does not explain the reasons behind the policy shift.  The USPTO even appears to have defended the policy of allowing “piggyback” reexaminations in responding to comments to rulemaking in December 2003 (pertaining largely to inter partes reexamination rules), explaining that the examiner will simply merge the second proceeding with the first and prepare an office action at the most advanced point possible when the same prior art is relied upon.  Fed. Reg. Vol. 68, No. 245, 70996, 71003.  Since inter partes reexamination is now available for patents that originated from an application filed after November 29, 1999, the USPTO may be attempting to encourage third party requesters to use inter partes reexaminations over ex parte reexaminations.

Practice Note

A third party requester should carefully consider using an inter partes reexamination proceeding, if available, rather than an ex parte proceeding, particularly when it is anticipated that responding to statements made by the patent owner during the reexamination may be desired. This circumstance may arise, for example, when the reexamination request relies on an obviousness rejection and the patent owner may be able to establish secondary considerations of non-obviousness.

Trademarks / Likelihood of Confusion

Prior Registration of GASPAR’S ALE Trademark Bars Registration of JOSE GASPAR GOLD as a Trademark for Tequila
By James Griffith

When the goods listed in a trademark application are sufficiently similar to those in a prior registration, the marks need not be identical for the application to be denied registration.  The Federal Circuit, in a recent case upholding a decision of the Trademark Trial and Appeal Board (Board), held that a likelihood of confusion existed between applicant Chatam International Inc.’s JOSE GASPAR GOLD mark for tequila (Ser. No. 76/138,531) and a prior existing registration for the mark GASPAR’S ALE for beer and ale (U.S. Registration No. 2,088,953). In re Chatam Int’l Inc., 03-1504 (Fed. Cir. Aug. 3, 2004).

Pursuant to Paragraph 2(d) of the Lanham Act, a trademark application may be denied registration if it is likely to cause confusion with a prior registered mark.  Whether a likelihood of confusion exists is based on a multi-factor test first articulated by the Federal Circuit in In re E.I. DuPont de Nemours & Co., 476 F.2d 1357 (CCPA 1973).  Here, the Federal Circuit affirmed the Board’s determination that the salient DuPont factors in this case were the similarity of the marks and the similarity of the goods and that both of these factors supported refusal of the JOSE GASPAR GOLD registration.

In addressing the similarity of the respective marks, the Court agreed that the dominant elements of the respective marks were GASPAR and GASPAR’S, respectively.  The Court rejected the applicant’s arguments that the additional elements contained in each mark distinguished them.  The element “ALE” in the prior registrant’s mark could not effectively distinguish the marks because “ALE” is a generic word.  Similarly, “GOLD” in the applicant’s mark had no source identifying significance because it merely described either the color of the tequila or applicant’s marketing of the product as a premium beverage.  Finally, the inclusion of the element “JOSE” simply reinforced the impression consumers would have that GASPAR referred to a person’s name and did not alter the commercial impression conveyed by the applicant’s mark.

The Court also summarily dismissed the applicant’s arguments that the relatedness of the goods was irrelevant.  To the contrary, the Court found that tequila was closely related to beer and ale because all are alcoholic beverages sold in the same channels of trade.

Finally, the Court cited its prior rulings holding that doubts about the existence of a likelihood of confusion should be resolved “against the newcomer because the newcomer has the opportunity and obligation to avoid confusion with existing marks.”  Hewlett-Packard Co. v. Packard Press, Inc., 281 F.3d 1261, 1265 (Fed. Cir. 2002).  Here, substantial evidence existed to support a refusal of the applicant’s JOSE GASPAR GOLD mark based on the prior registration of GASPAR’S ALE.

Patents / Inventorship

Proof of Joint Inventorship of Issued Patent Must Be Clear and Convincing
By Astrid Spain

The Federal Circuit, reversed a district court’s entry of judgment ordering the U.S. Patent and Trademark Office (USPTO) to add one of Eli Lilly and Company’s (Lilly) scientists as an inventor on an Aradigm Corporation (Aradigm), patent, which relates to the insulin analog lispro marketed by Lilly as Humalog.  Eli Lilly and Company v. Aradigm Corporation, Case Nos. 03-1367, -1393 (Fed. Cir. July 20, 2004) (Clevenger, J.; Lourie, J., concurring).

Lilly sued Aradigm seeking, inter alia, to have two Lilly scientists recognized as joint inventors on Aradigm’s U.S. Patent No. 5,888,477 (the `477 patent), which claims a method of delivering inhaled insulin using an insulin analog called “lispro.”  Lilly holds a patent covering lispro.  Due to slight differences in molecular structure compared to regular insulin, the human body takes up lispro more rapidly than regular insulin.  Lilly’s claim of joint inventorship stemmed from four meetings between Lilly and Aradigm to discuss a possible collaboration.  Lilly claimed that during these meetings, its scientists conveyed to Aradigm specific advantages to be expected from using lispro instead of regular insulin in an aerosol delivery device.  Based on a jury verdict, the district court entered final judgment in favor of Lilly and ordered the USPTO to add one of Lilly’s scientists as an inventor.  Additionally, the district court entered a judgment in Aradigm’s favor on state law claims of unjust enrichment and awarded Lilly nominal damages on a state law contract claim.

In reversing, the Federal Circuit rejected Aradigm’s arguments relating to erroneous and prejudicial jury instructions, but agreed with Aradigm that Lilly did not present substantial evidence for the jury to determine by clear and convincing evidence that Lilly scientists had communicated the subject matter to Aradigm.  Pointing out that joint inventorship requires collaboration and communication, the Federal Circuit found that the testimony of the Lilly scientists established neither requirement directly, and that the district court’s reliance on the circumstantial evidence was improper. The Court noted that, given that Aradigm’s `477 patent is an issued patent and presumed valid, Lilly had the burden of providing clear and convincing evidence of the contrary. Lilly had pointed to the fact that it had a pending application on the same subject matter, and cited the Environ decision to argue that the burden of proof should be preponderance of the evidence.  The Federal Circuit distinguished Environ as applying only when the existence of conflicting subject matter has already been adjudicated or otherwise agreed to by the parties, and priority is the only remaining issue.  The Federal Circuit affirmed the district court’s state law judgments.

In a concurring opinion, Judge Lourie argued, given the lack of a meaningful distinction, the Environ burden of proof should apply.

Patent Infringement / Claim Construction

Soft Center Patent Claims Not Solidly Construed by District Court
By Bonnie Warren

Addressing the issue of whether the claim language “containing a mixture of lipid and solid ingredients” limits the soft inner component of a claimed dual textured pet food product, solely to lipid and solid ingredients, the U.S. Court of Appeals for the Federal Circuit disagreed with  the district court’s conclusion that the claim language was so limited, and thus vacated and remanded the court’s decision that granted summary judgment of non-infringement.  Mars, Inc. v. H.J. Heinz Co., Case No. 03-1617 (July 29, 2004) (Shall, J.; Dyk, J.; Prost, J.).

Mars Inc., brought suit against H.J. Heinz Company, et al. (Heinz) in the U.S. District Court for the Central District of California, alleging that certain lines of pet food marketed by Heinz infringed U.S. Patent No. 6,312,746.  At a Markman hearing, Mars argued that the limitation “containing a mixture of lipid and solid ingredients” means that the claimed “soft inner component” contains, but is not limited to, lipid and solid ingredients.  More specifically, Mars contended that the terms “containing” and “mixture” are open-ended terms, and thus do not exclude the presence of other ingredients. 

In its claim construction order, the district court disagreed with Mars, and concluded that the limitation was closed-ended, and thus construed the limitation to include only lipid and solid ingredients.  Subsequently, both Mars and Heinz moved for summary judgment on the issue of infringement.  The meaning of the term “ingredients” was not argued at the Markman hearing nor construed by the court, but became an issue in the parties’ motions for summary judgment.  Specifically, Mars argued that “ingredients” should be construed to refer to either the starting materials or the end components of the finished product.  Mars contended that the limitation “containing a mixture of lipid and solid ingredients” was met because the end components of the accused finished products have a “soft inner component” that contained only lipids and solids.  Heinz however argued, among other things, that the term “ingredients” referred only to the starting materials used to make the product, and the starting materials in the accused products also included non-lipid and non-solid ingredients.

The district court agreed with Heinz’s construction of “ingredients” and granted Heinz’s motion for summary judgment of non-infringement.  The court also held that there was no infringement under the doctrine of equivalents because “such application of the doctrine of equivalents would vitiate the ‘containing a mixture of lipid and solid ingredients,’ and thereby run afoul of the all-limitations rule.”

Mars appealed the district court’s decision arguing, among other things, that the court erred in its claim construction and in granting Heinz’s motion for summary judgment of non-infringement based on the court’s erroneous claim construction.

On review of the district courts decision, the Federal Circuit held that the court erred in its claim construction, and accordingly vacated and remanded the court’s decision of non-infringement.  More specifically, the Federal Circuit held that the terms “containing” and “mixture” in the limitation “containing a mixture of lipid and solid ingredients,” like “comprising,” are open-ended (citing Genetech), and that the limitation does not exclude the presence of additional, unnamed ingredients in the inner core mixture that are either lipids or solids; and consistent with the Court’s construction of the term “composition” in PIN/NIP and Exxon Chemical, the ordinary meaning of the phrase “a mixture of lipid and solid ingredients” in the instant case “refers to the components of the inner component
‘at any time from the moment at which the ingredients are mixed together.’”

Copyrights / Copying

No Source Code, No Copying
By Patrick Richards

The U.S. Court of Appeals for the Fifth Circuit affirmed the district court’s dismissal of General Universal Systems, Inc.’s (GUS) claims of copyright infringement citing GUS’s failure to produce tangible evidence to support its motion for summary judgment.  General Universal Systems, Inc. v. HAL, Inc., Case No. 01-21114, (5th Cir. July 20, 2004) (Per Curium).

GUS sued HAL claiming, among other accusations, HAL infringed its copyright in a freight packaging software system.  The district court dismissed GUS’s copyright claim on summary judgment.  The heart of GUS’s appeal related to the issue of copyright infringement.  GUS disputed the court’s dismissal of its copyright claim arguing that the Altai doctrine does not apply to source code copying and, further, the district court applied an overly restrictive test for evaluating whether the protected source code had been copied.

The Fifth Circuit noted that, in the context of a copyright infringement claim, it has generally endorsed the “abstraction-filtration-comparison” test first outlined by the Altai court.  The Altai test uses a three-step procedure to assess the claim of infringement.  After filtering out the non-protectable elements of the copyrighted work in the first two steps, the court then must determine, through a side-by-side comparison, whether the allegedly infringing work is substantially similar to the protectable elements of the copyrighted work.

GUS argued that Altai applies only to claims that an infringer has copied a computer’s non-literal elements, like its structure, sequence, organization and user interface.  The Fifth Circuit held that the district court had only applied Altai in making a determination as to whether non-literal elements of the software had been copied.  The Fifth Circuit also noted that although it had not previously expressed an opinion as to whether the Altai test should be used to evaluate claims of source code copying, that question need not be addressed in this case.

GUS also argued that the district court applied an overly restrictive test for evaluating whether protected source code had been copied.  The district court had held that to prove literal copying, a plaintiff must show identical or virtually identical copying of substantial portions of a program.  The district court held that, under this test, GUS failed to present evidence raising a genuine issue of material fact to defeat HAL’s motion for summary judgment of non-infringement.  On appeal, the Fifth Circuit upheld the district court’s decision, explaining it could not compare the infringed and infringing work side-by-side because GUS did not produce its own source code for comparison.

The Fifth Circuit speculated that GUS’s difficulty stemmed from the muddled nature of its infringement claims.  When GUS first filed its infringement suit, it alleged HAL had only copied non-literal elements of software.  However, in its summary judgment motions, GUS broadened its claims asserting for the first time that HAL had directly copied the source code.  The exhibits that GUS attached to the motions for summary judgment did not reflect the change in the nature of the claims, i.e., did not include a copy of the source code allegedly copied, and as a result, GUS could not meet its evidentiary burden to defeat summary judgment.

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