IP Update, Volume 3, No. 10, October 2000
October 2000
IN THIS ISSUE
- Patent/Ownership - Employer’s Failure to Acquire Patent Assignment from Its Employee/Inventor May Preempt Employer’s Claim to Patent Ownership
- Patent/Duty of Disclosure - Inventors Are Not Required to Explain How They Were Motivated by Prior Art
- Trademark/Likelihood of Confusion - Marks, Even Marks Containing a Dominant Word, Must Be Evaluated in Their Entirety
- Patent/Infringement - Why Certificates of Correction Should Be Obtained Immediately After a Patent Issues
- Patent/Doctrine of Equivalents - Under the Doctrine of Equivalents, a Minority Is Not (Yet) Equivalent to a Majority
- Patent/PTO Rule Changes - Recent PTO Rule Changes
Employer’s Failure to Acquire Patent Assignment from Its Employee/Inventor May Preempt Employer’s Claim to Patent Ownership
By James E. Griffith
The Court of Appeals for the Federal Circuit, reversing a lower court grant of summary judgment in favor of Unisys, held that a genuine issue of material fact existed as to whether an implied-in-fact contract existed between the plaintiff inventor, Banks, and his employer, Unisys, despite Banks’ status as an "employed-to-invent" researcher. Banks v. Unisys Corp., Case No. 00-1030 (Fed. Cir., Sept. 28, 2000).
Generally, an inventor owns patent rights in his invention regardless of whether he conceives or reduces it to practice in the course of his employment. The law has recognized two exceptions to this general rule. First, an employer may acquire rights to the employee inventor’s creation through an express contract. Second, if an inventor is hired to invent something or solve a particular problem, the employer will usually be deemed the owner of the invention. In Banks, the court examined the employment relationship of the parties at the time of the inventive activity to determine if an implied-in-fact contract existed that would place the plaintiff in the "employed to invent" exception to the general rule of patent ownership by the inventor.
The plaintiff, Banks, was hired by Unisys to assist in the development of an imaging camera for use with a high-speed document sorter. On his own initiative and time, Banks tested certain aspects of the camera’s optics, leading to his recommendation of a redesign. Unisys subsequently filed six patent applications related to the device. Banks was named as co-inventor on only three of the applications, although Banks claimed that he should have been named as co-inventor on the others as well. Further, Banks signed the application documents related to the three cases on which he was named as a coinventor only after being told by Unisys that he would receive compensation for each invention. Unisys later reneged on this representation. Significantly, when Banks was hired, Unisys had requested that he sign a standard employee form agreement assigning inventive rights to Unisys. Unisys also requested that Banks sign a similar document on his last day of employment. Banks refused to sign either agreement.
The Federal Circuit found that the plaintiff’s refusal to sign Unisys patent assignment forms, both at the initiation and termination of the employment relationship, created a genuine issue of material fact regarding whether there was a meeting of the minds as to ownership of the disputed inventions. Specifically, the court found that Banks’ refusal to agree to the patent assignment provisions, as well as Unisys’ failure to pursue his agreement, raised a question as to whether the employer acquiesced to Banks’ refusal to convey ownership. Accordingly, the district court’s grant of summary judgment in favor of Unisys on the grounds that an implied-in-fact contract existed was in error.
Practice Note: Employers should ensure that all employees, particularly those involved in research and development or in the creation of any intellectual property, execute employment agreements explicitly assigning ownership of intellectual property to the employer.
Inventors Are Not Required to Explain How They Were Motivated by Prior Art
By Bernard P. Codd
The Court of Appeals for the Federal Circuit reversed a lower court ruling finding inequitable conduct, holding that inventors are not required to explain how they were motivated by the prior art in order to satisfy their duty of disclosure. Information regarding the subjective motivations of an inventor is not material to patentability. Life Technologies, Inc. v. Clontech Lab., Inc., No. 99-1550 (Fed. Cir. September 21, 2000).
The appellant, Life Technologies, Inc. (LTI) is the owner of U.S. Patents 5,244,797 ('797 patent) and 5,668,005 ('005 patent), which are directed to a genetically engineered reverse transcriptase (RT). The inventors were influenced by a M. S. Johnson publication suggesting that RNase H activity of RT enzymes resided at the carboxyl terminal end of the molecule. Because the prevailing scientific opinion was that RNase H activity resided at the front end of the molecule, experiments were conducted to exclude Johnson's hypothesis; however, the experiments proved Johnson correct. In addition, before LTI filed its patent applications, another researcher, Stephen Goff, publicly presented his RT research. The inventors did not attend the presentation, but surmised that Goff demonstrated results similar to theirs.
LTI sued Clontech for infringement of the ''797 patent and ''005 patents. At the trial, the district court found LTI committed inequitable conduct by withholding information regarding motivation received from the Johnson publication, finding that merely disclosing the reference was insufficient to comply with the duty of candor as codified in 37C.F.R.§1.56. The lower court further found that LTI made material misrepresentations regarding the Johnson publication when asserting, during prosecution of the application for the '797 patent, that the claims were not obvious because Johnson’s teachings were contrary to the prevailing scientific opinion. Finally, the lower court held that LTI should have revealed knowledge of Goff’s work to the PTO during the prosecution of the application for the '797 patent. LTI only disclosed its knowledge of Goff’s work in the application for the '005 patent. Both patents were held to be unenforceable.
The Federal Circuit reversed each of the district court findings, holding that: "[T]he only inquiry is whether the teachings of the Johnson article, in combination with other relevant prior art, would have rendered the claimed invention obvious to one of ordinary skill in the art; this inquiry, as a matter of law, is independent of the motivations that led the inventors to the claimed invention." The Court also held that because the teachings of Johnson are contrary to established teachings and are based on a relatively new technique, the inventors’ assertion that Johnson’s teachings lacked a reasonable expectation of success was not a misrepresentation. Finally, the Court held that the information regarding the work of Goff which was known to the inventors, lacked the specificity and definiteness required to support a patentability rejection under 35 U.S.C. § 102(g) and, therefore, was not material prior art.
Trademark/Likelihood of Confusion
Marks, Even Marks Containing a Dominant Word, Must Be Evaluated in Their Entirety
By Keith M. Stolte
The Court of Appeals for the Federal Circuit has again reiterated the long standing premise that when determining whether a likelihood of confusion exists between two trademarks, the U.S. Patent and Trademark Office must evaluate both marks in their entireties, rather than dissecting the marks and focussing only on their commonalties. Packard Press, Inc. v. Hewlett-Packard Co. Case No. 00-1076 (Fed. Cir., Sept. 25, 2000).
Applicant, Packard Press, is a commercial printer specializing in printing legal, municipal, and financial prospectuses, reports and financial statements. Since 1957, it has used the PACKARD mark to advertise and promote its printing services and owns two federal service mark registrations for PACKARD and PACKARD & design. In 1995, Packard Press filed an intent to use service mark application for PACKARD TECHNOLOGIES covering data and information processing; electronic transmission of data and documents via computer terminals; electronic transmission of messages and data; and data transfer and conversion services. Hewlett-Packard opposed registration of the mark, claiming a likelihood of confusion with its HEWLETT-PACKARD family of marks. Hewlett-Packard owns 13 federal trademark registrations for HEWLETT-PACKARD and HEWLETT-PACKARD & design covering computer products, printers, etc. The PTO Trademark Trial and Appeal Board sustained the opposition.
The Federal Circuit reversed and remanded, taking the Board to task for isolating the PACKARD portion of both marks in its analysis. Echoing prior decisions, the Court emphasized that "[t]he similarity or dissimilarity of the marks in their entirety is to be considered with respect to appearance, sound and connotation." The Court stated that only after each of these three factors have been evaluated with respect to both marks in their entireties, could the Trademark Office properly place more or less weight on a particular feature of the marks. In this case, the Court found that the Board had improperly focussed only on the PACKARD component of the marks, apparently dispensing with the TECHNOLOGIES portion of Packard Press' mark and the HEWLETT portion of Hewlett Packard’s marks, as if they did not exist.
Applying the same anti-dissection reasoning, the Court also found that the Board properly discounted Packard Press' argument that the co-existent use of its the PACKARD mark over a 40-year period without any instances of actual confusion was evidence of a diminished likelihood of confusion. The Court reasoned that if it is error to dissect the HEWLETT component out of the mark HEWLETT-PACKARD when evaluating the similarities of the marks, is equally improper to dissect the TECHNOLOGIES component out of the mark PACKARD TECHNOLOGIES when determining if co-existence in the marketplace has lessened the prospects for confusion.
Finally, the Court held that the Board properly gave no credit to Hewlett-Packard’s claim that its marks were famous and, therefore, entitled to a broader scope of protection. The Court noted that Hewlett-Packard failed to place into the record any evidence of fame, but simply suggested, during oral argument, that the Court take judicial notice of the fame of the HEWLETT-PACKARD mark. The Court declined, stating that arguments raised for the first time at oral argument come too late.
Why Certificates of Correction Should Be Obtained Immediately After a Patent Issues
Contact: Paul Devinsky
The Court of Appeals for the Federal Circuit, deciding "an issue of first impression," recently provided a wake-up call to patent practitioners to obtain Certificates of Correction (COC) as soon as possible after issuance of the patent in question, if such a COC is necessary. Failure to do so could have major consequences in future litigation involving the patent. Southwest Software, Inc. v. Harlequin Inc., Case No. 99-1213, 1214 (Fed. Cir., Sept. 18, 2000).
Southwest is owner of U.S. Patent No. B1 5,170,257 (the '257 patent), directed to a method and apparatus for enhancing the quality of printed images. The patented method involved converting a set of values representing the various shades of gray present in a continuous-tone black-and-white image into a set of binary values that a printer can convert into black dots on the paper. The darker the shade of gray in the continuous-tone image, the greater the binary value assigned that area and the denser the amount of black dots applied to the page. The '257 patent described calculating a series of "calibration sets" to be used for the conversion.
The '257 patent issued on December 8, 1992. On January 20, 1995, Southwest sued Harlequin and two other companies for infringement. After a jury trial, the jury returned a verdict that Harlequin’s "Scriptworks Rev. 6" program infringed claim 1 of the '257 patent. The District Court denied Harlequin’s JMOL motion that the '257 was invalid and not infringed.
The specification of the '257 patent stated that "incorporated herein is a computer program printout appendix of source code used to generate calibration sets." In August of 1996, Harlequin discovered that the certified copy of the '257 patent file history did not contain the "program printout appendix" referenced in the specification. Harlequin, therefore, argued that the '257 patent failed the best mode and enablement requirements of 35 U.S.C. § 112, ¶ 1. Southwest, thereafter, promptly requested a COC, which the PTO issued in April 1997.
Harlequin argued to the Federal Circuit that the COC should have no effect in its lawsuit with Southwest because 35 U.S.C. § 254 is only effective for causes of action arising after the COC issues. The Federal Circuit, relying on "the plain language of the statute," agreed. Section 254 provides, in relevant part, "a printed copy [of the COC] shall be attached to each printed copy of the patent, and such [COC] shall be considered as part of the original patent…. Every such patent, together with such [COC], shall have the same effect and operation in law on the trial of actions for causes thereafter arising as if the same had been originally issued in such corrected form." (Emphasis added). The Federal Circuit concluded that "this language requires that, for causes arising after the PTO issues a [COC], the [COC] is to be treated as part of the patent — i.e., as if the [COC] had been issued along with the original patent. By necessary implication, for causes arising before its issuance, the [COC] is not effective."
Since Southwest instituted the lawsuit against Harlequin in 1995, but did not obtain the COC until 1997, the Federal Circuit held that the COC was not a part of the '257 patent for purposes of the lawsuit with Harlequin. The Federal Circuit accordingly remanded the case to the District Court to determine whether the '257 patent was invalid for violating the best mode and enablement requirements, i.e., due to the lack of the program printout appendix.
As the Federal Circuit recognized, its ruling raised the prospect that the '257 patent could be invalid for lack of enablement or failure to satisfy the best mode prior to April 1997, but that such invalidity may have "ceased" after the COC issued.
Practice Tip: Although always recommended, it is now imperative to carefully inspect all issued patents as soon as possible after issuing to determine if a COC is necessary. Moreover, prior to bringing suit for patent infringement, a patentee should always inspect a certified copy of the patent’s file history to determine if anything is missing.
Patent/Doctrine of Equivalents
Under the Doctrine of Equivalents, a Minority Is Not (Yet) Equivalent to a Majority
By Elizabeth Levy
A self-mailing business form having adhesive strips extending along less than half of the length of longitudinal margin portions does not infringe, either literally or under the doctrine of equivalents, a claim limitation requiring adhesive strips to extend along a "majority" of the lengths of the longitudinal margin portions of a form. Moore U.S.A. v. Standard Register Co., Nos. 98-1386, 98-1387 (Fed. Cir., Sept. 22, 2000).
Moore owns three patents, which disclose C-fold self-mailing business forms having an integral return envelope that is created during the folding and sealing process. C-fold forms are divided into equal thirds by transverse folds.
The claims recite that the mailer includes adhesive strips "extending along a majority of the lengths of the longitudinal margin portions of the mailer."
The accused form is a C-fold mailer having an integral return envelope. It includes, inter alia, adhesive strips, which extend along approximately 47.8% of the total length of the longitudinal margins.
The district court held that the accused form did not infringe the Moore patent claims, either literally or under the doctrine of equivalents, because the relevant longitudinal strips of adhesive on the accused form extend along less than the majority of the lengths of the longitudinal marginal portions. The Federal Circuit affirmed, reasoning that if a minority were held to be equivalent to a "majority", the claim limitation regarding a majority of the lengths would be vitiated altogether. In addition, the Court reasoned that "it would defy logic to conclude that a minority - the very antithesis of a majority - could be insubstantially different from a claim limitation requiring a majority, and no reasonable juror could find otherwise."
Judge Newman dissented, pointing out that the question of whether 47.8% is equivalent to a majority requires findings of fact and not summary disposition.
Practice Note: When drafting claims, consider the implications of using functional language to define a structural limitation. Although arguably broader in scope than specific dimensions or structures, such language may limit the claim in unanticipated and undesirable ways.
Recent PTO Rule Changes
By Stephen Becker, Paul Devinsky and John Hankins
A number of rule changes have been implemented in support of the American Inventor Protection Act of 1999 (AIPA).
New Continuation Practice (Request for Continued Examination, or RCE; effective May 29, 1999)
Prior to the AIPA, there were three ways to continue prosecution of an application after a final rejection: Rule 129 (transitional procedure); Rule 53(b) (regular continuation application); and Rule 53(d) (Continuing Prosecution Application).
The AIPA introduces the RCE. Filing an RCE results in the same application with the same filing date as the parent. RCE practice is not available for design applications or provisional applications and may be filed only after a final office action, an appeal or a notice of allowance.
Either an RCE or CPA can be filed based on a parent filed between June 8, 1995 and May 29, 2000. For a parent filed after May 29, 2000, only an RCE may be filed. The CPA is being phased out. Although filing a CPA by facsimile directly to the Examining Group is permitted, it is risky because a missing sheet may, or missing filing will, lose the filing date.
Patent Term Adjustment (effective May 29, 2000)
There are three categories of patent term adjustments (PTA): administrative delays; pendency greater than three years; and interferences, secrecy orders and successful appeals.
Also, PTA works both ways, a patent may lose term for applicant-created prosecution delays. However, there is no double counting for overlapping of PTA categories. The PTO will calculate PTA and provide the result of its calculation with the Notice of Allowance. If the applicant disagrees with the calculation, a Petition for Reconsideration must be filed with payment of Issue Fee.
The following events may lengthen the patent term: a PTO suspension of examination; deferral of issuance; or applicant-faultless pendency greater than three years. A CPA loses all PTA benefits; an RCE loses only credit towards three-year pendency.
The following events may shorten the patent term: missing parts filing; filing of a preliminary amendment or other paper within one month prior to an office action; filing of a Rule 312 Amendment; filing a request to withdraw holding of abandonment more than two months after abandonment occurred; filing an extension of time; filing a petition for revival; filing an amendment reopening prosecution following decision on appeal; filing a unsuccessful appeal; filing an incomplete reply to Office Actions; or the filing of an IDS more than 30 days after the cited document(s) became known to applicant if the IDS is filed more than three months after the application filing date.
Publication of Application (applies to applications [including CPAs] filed on or after November 29, 2000)
Domestic publication applies only to patent applications that will be filed abroad. Publication occurs following an 18-month period after the earliest effective domestic or foreign priority filing date, but before examination. Applicants may request early publication or republication. Applicant may avoid publication by filing statement agreeing not to file abroad. The applicant may change her mind prior to a "freeze date" but must notify the PTO of any subsequent foreign filing or application will become abandoned. Any claim for domestic or foreign priority must be made prior to the freeze date. No oppositions are permitted, but the filing of a third party IDS is permitted. A publication fee will be assessed together with the issue fee following allowance. There is no publication fee for abandoned applications unless the publication is voluntary or a republication.
Provisional Applications (effective November 29, 2000)
Previously, a non-provisional application could be converted into a provisional application. The purpose was to get the earliest possible provisional filing date without shortening the patent term. Provisional applications lapse after one year and must be replaced by a non-provisional application claiming priority to the provisional. Now, a provisional application can be converted into a
non-provisional application by paying the non-provisional filing fee.
Note, however, that because conversion shortens the patent term, it is better to use old process of replacing provisional with non-provisional claiming priority from provisional.
