KSR Survival Course
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The U. S. Court of Appeals for the Federal Circuit vacated a decision by the Board of Patent Appeals and Interferences’ (the Board) rejecting an application and directed the Board to consider declarations by the applicants regarding secondary consideration of non-obviousness. In re Sullivan, Case No. 06-1507 (Fed. Cir., Aug. 29, 2007) (Lourie, J.).
The application at issue was directed to an antivenom that “neutralizes the lethality of the venom of” the snake genus that includes rattlesnakes. The claimed antivenom includes “Fab fragments,” a certain type of antibody fragments. During a first appeal to the Board, the Board found the claims prima facie obvious in view of the combination of two references—Sullivan and Coulter. Sullivan disclosed the use of whole antibodies as a rattlesnake antivenom, and Coulter disclosed using Fab fragments to detect the toxin of the Australian brown snake. However, the Board issued a new rejection and remanded the case. The applicants then amended the claims to address the Board’s rejection and submitted declarations discussing why one of ordinary skill in the art would not expect these Fab antibody fragments to effectively neutralize rattlesnake venom, describing the unique properties of interactions between the antibody fragments and the rattlesnake venom, as well as why one of ordinary skill in the art would have expected the claimed invention to fail. After the examiner again rejected the claims over the same combination, the Board upheld the examiner’s rejection. In doing so, the Board simply found that the claimed intended use, “neutraliz[ing] the lethality of the venom of” the rattlesnake genus, did not render the claim patentable. The Board declined to review the declarations submitted by the applicants. The applicants appealed.
The applicants argued that the Board failed to establish prima facie obviousness based on Sullivan and Coulter or, at the very least, if the Board established prima facie obviousness, it erred by ignoring the extensive rebuttal evidence provided by the applicants. The Federal Circuit agreed, concluding that even assuming that the Board was correct that the combination rendered the claimed invention prima facie obvious, the Board erred by not considering the rebuttal evidence. The Court was unequivocal in its decision: “When a patent applicant puts forth rebuttal evidence, the Board must consider that evidence.”
With regard to prima facie obviousness, the Court followed the Supreme Court’s recent KSR v. Teleflex decision and determined that the difference between the claimed invention and the prior art combination was merely a substitution of an antibody fragment that neutralizes one type of snake venom for another, finding prima facie obviousness. However, the Court noted that once a case of prima facie obviousness is present, the burden shifts to the applicants to submit rebuttal evidence and/or argument supporting patentability. The Court reviewed the evidence that the Board had ignored and found that applicants’ declarations showed the prior art teaching away from the claimed invention, described an unexpected property or result of the claimed invention and discussed long-felt need for the claimed invention.
Moreover, in response to the Board’s conclusion that an intended use did not render the claim patentable, the Federal Circuit stated, “the issue here is not whether a claim recites a new use, but whether the subject matter of the claim possesses an unexpected use. That unexpected property is relevant, and thus the declarations describing it should have been considered by the Board.” The Court remanded the case to the Board to consider the rebuttal evidence.
Having Your Broad Claims and Enabling Them Too
By Amanda E. Koenig
In a sequel to its early 2007 decision in Liebel-Flarsheim Co. v. Medrad, Inc., the U.S. Court of Appeals for the Federal Circuit denied another patentee’s attempt to have its claim scope and enablement too in Automotive Technologies International v. BMW, et al., Case Nos. 06-1013, -1037 (Fed. Cir., Sept. 6, 2007) (Lourie, J.; Rader, J.; Prost, J.). when the unanimous panel upheld the district court’s ruling that the asserted claims were invalid for lack of enablement.
In 2001 Automotive Technologies International (ATI) filed a complaint against various entities alleging infringement of U.S. Patent No. 5,231,253. The technology at issue involved “crash sensing devices for deployment in an occupant protection apparatus, such as an airbag, during an impact or crash involving the side of a vehicle.” Following a Markman hearing, the district court issued an order construing the relevant claims, one of which included the means-plus-function limitation of “means responsive to the motion of said mass upon acceleration of said housing in excess of a predetermined threshold value, for initiating an occupant protection apparatus.” The parties agreed that “the stated function is initiating an occupant protection apparatus.” ATI, however, argued that the corresponding structure included “not only mechanical switch assemblies, but also electronic switch assemblies, as identified in the specification.” After the district court adopted ATI’s construction of that limitation, various defendants filed, inter alia, a motion for summary judgment that the asserted claims were invalid for failure to comply with the enablement requirement set forth in 35 U.S.C. § 112, ¶ 1. The district court granted the motion, finding that “the specification failed to enable electronic sensors for sensing side impacts.” ATI appealed.
On appeal, the Federal Circuit upheld the district court’s ruling. As an initial matter, the Federal Circuit noted that the district court construed the relevant limitation “to include both mechanical side impact sensors and electronic side impact sensors.” (Emphasis added.) Thus, “[u]nder the district court’s construction … that full scope must be enabled.” Turning to whether that full scope had in fact been enabled, the Federal Circuit determined that it had not.
In its factual analysis, the Federal Circuit highlighted three areas in the record. First, the Court noted the disparity in the amount of detail dedicated to explaining mechanical side impact sensor vis-à-vis electronic side impact sensors—the patent’s explanation of the former far outstripped its explanation of the latter. Second, the Court pointed to references in the record where ATI, or the inventor, characterized the sole figure showing an electronic side impact sensor as nothing more than a “conceptual view” of the technology. A drawing of a concept, the Court found, does not suffice to provide “details that would show one skilled in the art how to make or use an electronic side impact sensor.” Finally, the content provided within the specification simply “fail[ed] to provide a structure or description of how a person having ordinary skill in the art would make or use an electronic side impact sensor.”
The Court’s legal analysis focused on the requisite nexus between a patent’s “novel aspect” and “the knowledge of one skilled in the art.” ATI argued that “despite [the patent’s] limited disclosure [regarding electronic side impact sensors], the knowledge of one skilled in the art was sufficient to supply the missing information.” The Court disagreed, finding ATI’s arguments circular and noting that “[g]iven that the novel aspect of the invention is side impact sensors, it is insufficient to merely state that known technologies can be used to create an electronic sensor.” In sum, “[a]lthough the knowledge of one skilled in the art is indeed relevant, the novel aspect of an invention must be enabled in the patent.”
Right to Jury Trial on Inventorship Issue
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Addressing for the first time the issue of whether a party is entitled to a jury trial for equitable claims, where the party has a right to a jury trial based on other (legal) claims, the U.S. Court of Appeals for the Federal Circuit reversed the district court, holding that when there are common factual issues underlying the equitable and legal claims, both claims should be tried to a jury. Frank T. Shum v. Intel Corp., LightLogic Inc. and Jean-Marc Verdiell., Case No. 06-1249 (August 24, 2007) (Lourie, J.; Friedman, Sr. J., dissenting).
The plaintiff, Frank Shum, is an optical engineer. In 1996, Shum formed an optoelectronic company called Radiance Design. A year later, Shum and defendant Jean-Marc Verdiell, incorporated Radiance. Shum filed a patent application entitled “Optoelectronic Assembly and Method of Making the Same” on behalf of Radiance, naming himself as the sole inventor. Verdiell later encouraged Shum to let the patent go abandoned. The relationship between Shum and Verdiell soured, and Radiance was dissolved. The following day, Verdiell filed a patent application on behalf of LightLogic, a company that Verdiell had previously formed. This application, which Shum claims is virtually identical to Shum’s abandoned patent application and others claiming similar subject matter, matured into several patents.
LightLogic and all its intellectual property was acquired in 2001 by Intel. Shum learned of the acquisition and sued defendants in state court for fraud, unjust enrichment and other tort claims. The case was removed to federal court, and Shum added a cause of action for correction of inventorship under 35 U.S.C. §256.
The district court bifurcated the inventorship issue from the state law claims and ordered the inventorship issue be tried to the court before the state law claims were tried to a jury. Shum lost the inventorship issue, and the court granted defendant’s summary judgment on the remaining claims.
Shum appealed, arguing that under the 1959 Supreme Court Beacon Theaters decision, the district court’s decision to conduct a bench trial on the inventorship issue prior to a jury trial on the state law claims violated his constitutional right to a jury. Shum argued that the inventorship claim and state claims were factually “inextricably intertwined” and that therefore a jury trial should have been conducted before the bench trial.
In a 2-1 decision, the Federal Circuit noted that an action to correct inventorship under §256, standing alone, is an equitable claim to which there is no right to a jury trial. The decision also noted that the state law fraud claims, standing alone, are legal claims to which a right to a jury trial attaches. The Court then proceeded to analyze the factual predicate for both the state law fraud claim and §256 inventorship claim, finding substantial commonality. The majority concluded that “given the co-pendency of the asserted fraud claim, and common factual issues, a jury should determine the facts regarding inventorship.” The case was remanded for a jury trial.
Judge Friedman dissented, stating that unlike the situation in Beacon Theaters—in which the district court determined that it would try an antitrust issue, which otherwise would have been tried to a jury—the district court here properly determined to try the §256 inventorship claim first. Judge Friedman saw the jury trial issue in this case as more closely aligned with the 1962 Supreme Court Dairy Queen decision, a case in which the Supreme Court distinguished Beacon Theaters and its Markman decision, in which the Supreme Court (without even a mention of Beacon Theaters) ruled that it was proper for a court to determine the legal issue of claim construction in advance of a jury trial on infringement and/or validity.
Failure to Enable Invention in Commercial Product Evidence of Lack of Enablement
By André De La Cruz
The U.S. Court of Appeals for the Federal Circuit affirmed a district court’s summary judgment that Align Technology did not infringe Ormco’s patents protecting custom orthodontic appliances marketed as Invisalign®, deciding that certain claims of the patents were invalid for lack of enablement. Ormco Corp. v. Align Tech., Inc., Case Nos. 06-1240, -1274 (Fed. Cir., Aug. 24, 2007) (Lourie, J.; O’Malley, J. dissenting).
Ormco asserted four patents directed to the computer-aided design and manufacture of custom orthodontic appliances against Align, which counterclaimed by asserting two of its own patents. The trial court not only granted Align’s motion for summary judgment of non-infringement, but also granted Align’s motion for summary judgment of non-enablement three months later. In construing the claims, the district court limited the claims of the Ormco patents to a process in which final treatment positions for teeth are automatically determined. The court then determined that there were no genuine issues of material fact precluding summary judgment.
On appeal, the Federal Circuit found clear and convincing evidence that a person of ordinary skill in the art did not and could not accomplish automatic computer determination of teeth finish positions based upon the Ormco patents’ specification. The Court pointed to inventor testimony that a manual override had been used on all of the approximately forty cases treated using Ormco’s Insignia product and that, while it was a goal to have the Insignia software generate final tooth positions that would not require use of the override, variations in human anatomy had prevented the attainment of that goal. The Ormco inventor had further testified that he was unsure if the problems due to variations in human anatomy could be overcome. The Court concluded that an inventor’s failure to enable his invention in a commercial product that purports to be an embodiment of the patented invention is strong evidence that the patent specification lacks enablement. Thus, relying on the fact that considerable doubt existed with respect to sufficiently enabling disclosure, the Federal Circuit affirmed the trial court’s finding of summary judgment of non-enablement.
In dissent, Judge O’Malley, sitting by designation, disapproved of the majority’s importation of a limitation into the claims by requiring the automatic determination of tooth positions and further criticized the majority and the trial court for failing to address any of the Wands factors.
Enjoined by Association, Supplier to ANDA Filer Subject to Injunction
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Addressing the issue of whether a biologically-active enantiomer of a patented drug is invalid over the prior art, the U.S. Court of Appeals for the Federal Circuit affirmed a district court decision that upheld the validity of Forest Laboratories’ U.S. Reissue Patent 34,712, which covers (+)-citalopram, the active ingredient in Lexapro®. The majority panel further upheld an injunction of both the Abbreviated New Drug Application (ANDA) filer, Ivax Pharmaceuticals, as well its drug supplier, Cipla, Ltd. Forest Labs., Inc. v. Ivax Pharms., Inc., Case No. 07-1059 (Fed. Cir., Sept. 5, 2007) (Lourie, J.; Schall, J., dissenting-in-part).
Ivax filed an ANDA for approval to market generic tablets of escitalopram oxalate (EO). EO, the oxalate salt form of escitalopram, functions as an antidepressant by virtue of being a selective serotonin reuptake inhibitor and is the active ingredient in Forest’s Lexapro branded drug. The ANDA included a Paragraph IV certification that the claims of Forest’s United States Reissue Patent 34,712 (the ’712 patent) patent are invalid and/or not infringed. The ’712 patent relates to a substantially pure (+)-enantiomer of citalopram, referred to as escitalopram, and acid salts thereof. Forest filed suit against Ivax and later added Cipla, which is the intended supplier of EO for Ivax and contributed information for the filing of the ANDA. The parties stipulated infringement and, after a bench trial, the district court concluded that Ivax had failed to establish invalidity on the grounds of, inter alia, anticipation and obviousness.
Stereoisomers are molecules that have the same atomic composition, but different spatial arrangements. Enantiomers are a pair stereoisomers, referred to as "(+)" and "(-),” that are non-superimposable mirror images of each other and often have distinct physical properties. A racemate (or racemic mixture) is an equal mixture of two enantiomers.
On appeal, the Court agreed with Forest that the ’712 patent was not anticipated by a pharmacology paper (the “Smith reference”) that described effects of various enantiomers of particular drugs, not including (+)-citalopram, on serotonin uptake. The Court noted that, while the Smith reference mentioned racemic citalopram in passing, it incorrectly predicted that the (-)-enantiomer for citalopram should be a far more potent serotonin reuptake inhibitor compared to the claimed (+)-enantiomer. The Court conceded that the paper effectively disclosed the (+)-enantiomer of citalopram by discussing the racemate, but concluded that it did not anticipate due to its lack of enablement on how to obtain the (+)-enantiomer. The Court disposed of the issue of obviousness in one paragraph, noting that Ivax and Cipla failed to address any of the evidence favorable to Forest, which included the failure of the inventors and others to resolve citalopram without undue experimentation and the testimony of Forest’s experts. The Court found this evidence was sufficient to support the conclusion that the claimed subject matter would not have been obvious to one of ordinary skill in the art. Finally, the Court rejected the argument that Cipla should not be subject to the injunction by virtue of being outside the artificial act of infringement created by 35 U.S.C. § 271(e)(2)(A). Characterizing the relationship between Ivax and Cipla as “undoubtedly a cooperative venture,” in which “Cipla was to manufacture and sell infringing [escitalopram oxalate] products to Ivax for resale in the United States,” the majority panel concluded it was appropriate for the injunction to extend to Cipla. However, the Court agreed with Ivax and Cipla that the injunction was overly broad. Noting that 35 U.S.C. § 271(e)(4)(B) limits injunctive relief to “an approved drug,” the Court limited the scope of the injunction significantly to cover only the drug approved by the U.S. Food and Drug Administration.
In dissent, Judge Schall argued that under Merck KGaA v. Integra Lifesciences I, Ltd., the work performed by Cipla falls within the 35 U.S.C. § 271(e)(1)’s exemption from infringement and is exempted from both the suit and the injunction.
Three Days in September: Generic Famvir® Temporarily Delayed on the Launch Pad
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In a temporary reprieve from a district court's order that allowed Teva to launch a generic version of Novartis’s Famvir®, Judge Alvin A. Schall of the U.S. Court of Appeals for the Federal Circuit on Friday, September 7, 2007, granted Novartis’ request to stop the generic drug sales in consideration of the Swiss drug maker’s motion for an injunction pending appeal Novartis Pharmaceuticals Corp., et al. v. Teva Pharmaceuticals USA, Inc., Case No. 07-1542 (Fed. Cir., Sept. 7, 2007) (Schall, J.).
Novartis and Teva have been in litigation over Teva’s Abbreviated New Drug Application (ANDA) for generic Famvir® (famciclovir), Novartis’s antiviral treatment for herpes, since 2005. Teva was prepared to launch its generic famciclovir product on August 24, 2007, the day the 30-month stay on the entry of a generic drug during pending patent-infringement litigation expired. To prevent such an at-risk launch, Novartis filed a motion for a preliminary injunction.
On Wednesday, September 5, following a lengthy oral argument, the district court denied Novartis’ motion. The following day, the court released its opinion, in which it concluded that Novartis was unlikely to succeed on the merits of its case and that Novartis would not suffer irreparable harm from denial of the injunction. The court noted that Novartis had failed to establish the required reasonable probability of success on the merits “because of the obviousness of the U.S. Patent Number 5,246,937.” Citing the Supreme Court’s recent decision in KSR International Co. v. Teleflex Inc., the district court ruled that “prior art as a whole” would have motivated scientists to pursue acyclic guanine nucleosides such as penciclovir (the active compound in famciclovir) as an anti-viral drug because they had been proven to be very effective anti-viral agents. Novartis had argued that other prior art taught away from using penciclovir by reporting toxicity of penciclovir in humans. The district court rejected this argument in light of references teaching that penciclovir would act as a powerful antiviral agent. The court noted that the “prior art as a whole” did not teach away from using penciclovir as a lead compound from which to design famciclovir because it was one of only five known acyclic nucleosides to have strong activity and low toxicity. The court further ruled that it would have been obvious to modify penciclovir into an effective orally-absorbed prodrug (famciclovir). Novartis’ patent was also deemed unenforceable by the district court due to inequitable conduct because Novartis’ did not disclose prior art that showed that penciclovir would have strong anti-viral activity while stating in its patent application that the prior art dissuaded the use of penciclovir.
The next day, September 6, Novartis filed an Emergency Motion for an Injunction Pending Appeal with the Federal Circuit. On September 7, Teva announced that it had “commenced shipment of Famciclovir Tablets” and that it is the 180-day exclusivity holder.
Later that day, Judge Schall ordered that “Teva is temporarily enjoined from selling its generic famciclovir product, pending the court’s receipt of Teva’s response and the court’s consideration of the papers submitted.”
Practice Note: As the September edition of IP Update is going to print, the Federal Circuit is still considering the parties’ submissions.
District Court v. USPTO: The Battle of Claim Construction Standards
By Sudip K. Kundu
In affirming a decision of the Board of Patent Appeals and Interferences (the Board) the U.S. Court of Appeals for the Federal Circuit made clear that during reexamination of a patent, the USPTO is not bound by a district court’s claim construction order issued in a proceeding to which the USPTO was not a party. In re Trans Texas Holdings Corp., Case Nos. 06-1599, -1600 (Fed. Cir., Aug. 22, 2007) (Dyk, J.).
In Trans Texas, the patentee requested reexamination of two patents, both of which related to a system of inflation-adjusted deposit and loan accounts. During reexamination, the patentee argued that the USPTO was bound by a claim construction rendered by a district court in an earlier infringement proceeding that was settled and dismissed before trial. The USPTO, which was not a party to that proceeding, rejected all the claims of both patents as obvious over the prior art. In affirming the rejection, the Board held that the USPTO was not bound by the district court’s claim construction order because a different claim construction standard, interpreting claims according to “their broadest reasonable interpretation consistent with the specification,” applied during reexamination. Additionally, the Board concluded that the district court’s claim construction was not “necessary to the judgment rendered in the previous action” in light of the pre-trial settlement and dismissal. The patentee appealed.
The patentee argued that the Board should have given preclusive effect to the district court’s claim construction. The Federal Circuit rejected this argument, noting that because the USPTO was not a party to the earlier litigation, the patentee could not satisfy one of the requirements of issue preclusion: that the party defending against preclusion had a full and fair opportunity to litigate the issues. Accordingly, the USPTO was not bound by the district court’s construction.
The patentee also argued that the Board erroneously rejected its proposed claim construction. However, the Federal Circuit agreed with the USPTO position that “[c]laims are given their broadest reasonable interpretation, consistent with the specification, in reexamination proceedings.” Under this standard, the Board properly construed the claims at issue and affirmed the Board’s holding.
Reliance on Examiner’s Oral Promise Fatal to Petition to Revive Abandoned Application
By Astrid R. Spain and Ronald Pawlikowski
Relying on 37 C.F.R. §1.2, which states that all business with the U.S. Patent and Trademark Office (USPTO) should be transacted in writing and that no attention will be paid to any alleged oral promise in relation to which there is disagreement or doubt, the director of petitions recently rejected a patent attorney’s petition for revival. In re Milton (Patent Petition 2007, U.S. Serial No. 09/938,465).
A prosecuting attorney received a final Office Action and filed a timely amendment. Subsequently, the examiner issued an Advisory Action, which the attorney felt was incorrect in its reasoning for not entering the amendments proposed in the response to the final Office Action. During a subsequent telephone conversation, the examiner stated that a replacement Office Action would be forthcoming. Relying on that statement, the attorney took no further action in the case and waited to receive the replacement Office Action. Instead, a Notice of Abandonment was received the following month. The attorney subsequently filed a Petition for Withdrawal of Holding Abandonment Filed under 37 C.F.R. §1.181, which was denied. Several months later an Interview Summary was added to the file. Based on the issuance of the Interview Summary, the attorney filed a renewed Petition for Withdrawal of Holding Abandonment.
In dismissing the renewed request to withdraw the abandonment, the director of petitions pointed out that the attorney’s reliance on an oral promise is expressly prohibited by 37 C.F.R. §1.2. According to the director, the introduction of the oral understanding into the record via the Interview Summary after the abandonment did not warrant a different outcome because, at the time of the attorney’s reliance, the understanding was a mere oral promise. The director concluded that, given Rule 1.2’s express prohibition of reliance on an oral understanding, withdrawal of the holding of the abandonment based on an action which is in contravention to this regulation would be improper.
Practice Note: 37 CFR §1.2 states no attention will be paid to “any alleged oral promise, stipulation, or understanding in relation to which there is disagreement or doubt.” It can be argued that there was no “disagreement or doubt” as evidenced by the Interview Summary. Nevertheless, prosecuting attorneys are responsible for taking proactive measures to ensure that an application does not go abandoned.
“Point of Novelty” in a Combination Design Patent Must be a “Non Trivial Advance”
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In a decision addressing the point of novelty test for design patent infringement, the U. S. Court of Appeals for the Federal Circuit held that the patentee’s asserted point of novelty “constituted a non-trivial advance over the prior art” and that the district court did not err in rejecting the patentee’s asserted point of novelty as a matter of law. Egyptian Goddess, Inc. et al. v. Swisa, Inc. et al., Case No. 06-1562 (Fed. Cir., Feb. 21, 2007) (Moore, J.; Dyk, J., dissenting).
After the district court issued a claim construction order, construing a design patent directed to a nail buffer, Swisa moved for summary judgment on the grounds that the accused designs did not infringe the patent under either the point of novelty test or ordinary observer test. Egyptian Goddess (EGI) asserted that point of novelty is a combination of four of the claimed design elements, i.e., the four sides of the illustrated square tubular cross section nail buffer. However, the district court found that all elements were found in the prior art Nailco patent, except that in the prior art the nail buffer body was triangular rather than square. The district court granted summary judgment on the ground that the accused Swisa nail buffers did not contain the point of novelty of the patent design; stating “[t]he only point of novelty in the [EGI design patent] over the Nailco [triangular design] patent is the addition of the fourth side without a pad.” The district court had found that no reasonable juror could conclude the EGI’s asserted point of novelty constituted “a non-trivial advance over the prior art,” which already disclosed nail buffers with square cross-sections. EGI appealed.
The Federal Circuit affirmed, concluding that the district court did not err in rejecting EGI’s asserted point of novelty as a matter of law. The Federal Circuit held that the initial burden is on the patentee to “to present its contentions as to the points of novelty,” which can be either a single novel design element or a combination of elements that are known in the prior art. If the combination of known design elements constitute a point of novelty, the combination must be “a non-trivial advance over the prior art.”
In a strongly worded dissent, Judge Dyk stated that the majority opinion departs from the Court’s precedent in fashioning a new rule that a combination of elements cannot constitute a point of novelty unless the combination constitutes a “non-trivial advance” over the prior art. Judge Dyk continued: “The majority equates its newly-fashioned non-trivial advance test with the requirement that a design patent be non-obvious over the prior art” and limits that test “to cases in which the point of novelty involves a combination of prior art elements.” According to Judge Dyk, the majority approach has multiple flaws, including conflating the criteria for infringement and non-obviousness, as well as eviscerating the statutory presumption of validity.
Practice Note: While the “non-trivial advance” test appears to be limited to where the point of novelty constitutes a combination of prior art design elements, it has nonetheless raised the bar to find design patent infringement under the point of novelty test.
Constructive Reduction to Practice of a Count May Be Established by Disclosure of Species
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Reversing a decision by the United States Patent and Trademark Office Board of Patent Appeals and Interferences (Board) in a patent interference, the U.S. Court of Appeals for the Federal Circuit held that an appellant was entitled to the benefit of a foreign priority document that was compliant with 35 U.S.C. §112 for the disclosure of a species of the count. Frazer v. Schlegel, Case Nos. 06-1154, -0023 (Fed. Cir., Aug. 20, 2007) (Newman, J.).
Ian Frazer was appealing a decision by the Board denying the benefit of priority from an Australian patent application, ruling that the priority document failed to show conception of an embodiment of the interference count. The subject matter of the interference proceeding related to methods of making papilloma-virus-like particles. The earlier-filed Australian patent application disclosed a method of producing a vaccine that included encoding both proteins L1 and L2. The later filed U.S. application disclosed a method of producing a vaccine that included encoding L1 or combination of L1 and L2 proteins. The interference count recited a method which required encoding a L1 protein.
The Board held that because Frazer disclosed in the Australian patent application that both the L1 and L2 genes had to be expressed together, while in the later U.S. application Frazer disclosed that the expression of only the L1 protein was necessary, that the Australian application was not enabling for the subject matter of the count. Frazer appealed this decision.
On appeal, the Federal Circuit agreed with Frazer that the Australian application contained complete details of the method that is the subject of the interference count, including a depiction of the papilloma-virus-like particle of the count with full disclosure of how to produce it. The Court stated that “when reliance is on a patent document already filed, the question is whether the document discloses the invention of the count by meeting the written description and enablement requirements of 35 U.S.C. 112, first paragraph, for a filed application serves as a constructive reduction to practice of its content.” The Court concluded that Frazer’s later discovery that either the L1 protein or both the L1 and L2 proteins may be used, did not “negate or contradict his disclosure and constructive reduction to practice” of the method of the count.
Practice Note: In an interference count, applications from which the benefit of priority is sought and which comply with the written description and enablement requirements of 35 U.S.C. §112 ¶ 1, serve as constructive reduction of practice.
Federal Circuit Lacks Jurisdiction to Decide Appeal from Nonparty Patent Attorney
By Amol Parikh
The U.S. Court of Appeals for the Federal Circuit recently dismissed the appeal of a patent attorney involved in the prosecution of an application, resulting in a patent that a district court held unenforceable due to inequitable conduct. Nisus Corp. v. Perma-Chink Sys., Inc., Case Nos. 06-1592, 07-1142 (Fed. Cir., Aug. 13, 2007) (Bryson, J.).
In the underlying case, Nisus Corp. brought suit against Perma-Chink alleging infringement of U.S. Patent No. 6,426,095 (the ’095 patent). Perma-Chink asserted the affirmative defense that the patent was unenforceable due to inequitable conduct based on the failure of the attorneys who prosecuted the patent—Mr. Michael Teschner and Mr. Allan Altera—to disclose to the U.S. Patent and Trademark Office the existence of an earlier lawsuit involving related patents, as well as material documents that were at issue in that lawsuit. Following a bench trial, the district court held that the ’095 patent was unenforceable because of inequitable conduct and entered judgment in Perma-Chink’s favor. After the district court entered its judgment, Mr. Teschner filed a motion to intervene in the litigation and a motion to amend and reconsider the judgment, alleging that the district court erred in finding that he engaged in inequitable conduct. The district court denied Teschner’s motion to intervene; Teschner appealed.
At the outset, the Court first had to determine whether it had jurisdiction to hear the appeal. The Court noted that, while a nonparty typically cannot appeal a district court judgment, an attorney who is held in contempt or otherwise sanctioned by the court may appeal from the order imposing sanctions. However, the Court clarified this rule by stating that mere critical comments of an attorney in an opinion are not equivalent to court-imposed sanctions. Thus, the Court said, a nonparty attorney cannot pursue an appeal. The mere fact that a critical statement may have an incidental affects on a nonparty’s reputation does not convert the statement into a final decision from which the nonparty can appeal.
With respect to the finding of inequitable conduct, the Court stated that district court’s comments about Teschner were subsidiary findings made in support of the court’s ultimate finding that the patent was unenforceable. Importantly, the district court did not exercise its power to sanction Teschner, and the finding that Teschner actions constituted inequitable conduct does not inflict legal injury. As a result, the Court found that Teschner did not have standing to appeal the district court finding of inequitable conduct, meaning the Federal Circuit did not have jurisdiction over the appeal.
Turning to the district court’s decision to deny Teschner motion to intervene, the Federal Circuit held that the district court was correct to deny the motion. Specifically, even if Teschner were permitted to intervene in the litigation, the Federal Circuit would still lack jurisdiction because the findings regarding Teschner’s conduct did not constitute a final decision sufficient to confer Federal Circuit jurisdiction. In particular, Teschner’s status as an intervener would not give him the right to appeal a judgment resolving the rights of the parties. As a result, the Court affirmed the district court’s denial of Teschner’s motion to intervene.
Go Celebrate Mr. Jackson; Here’s 50 Cent for Your Birthday
By Jeremy T. Elman
Addressing an unusual but high-profile copyright dispute involving famous rappers, the U.S. Court of Appeals for the Eleventh Circuit granted summary judgment for rapper Curtis Jackson (a.k.a. 50 Cent) on claims that he infringed the copyright for the song “Its Your Birthday” by rapper Luther Campbell of 2 Live Crew. Lil’ Joe Wein Music, Inc. v. C. J. Jackson, a.k.a. 50 Cent, Case No. 06-16342 2007 U.S. App. LEXIS 19165 (unpublished) (11th Cir., Aug. 9, 2007) (per curiam).
Campbell wrote the lyrics to the song “Its Your Birthday” in 1994, including the phrase “Go ___, it’s your birthday” repeated with various proper names used in succession. The plaintiff, Lil’ Joe Wein Music, acquired the copyrights at a bankruptcy sale. The defendant, Jackson, in his hit song “In Da Club,” which was released in 2003, includes lyrics containing “It’s your birthday … we gon’ party like it’s yo birthday … we gon’ sip Bacardi like it’s your birthday.” The Eleventh Circuit stated that in order for the plaintiff to prove that defendant Jackson copied elements of the work that are original, or failing such evidence of copying, that the works are “substantially similar”.
The court held that copyright protection may extend only to those components of a work that are original to the author. Only certain elements of the “Its Your Birthday” song were found to be copyrightable and protectable. The court then discussed whether the “Go ___, it’s your birthday” chant constituted original and protectable work. The court stated that a “hip hop chant” such as this “is a form of audience engagement staged by the performer (mc, dj or rapper) who provides a familiar phrase or saying, often in call and response format, designed to energize, include, affirm and engage the audience.” The court noted that the author of the song, Campbell, admitted that he did not create the phrase, borrowing it from popular chants at the time. The court, citing several pop culture references, also confirmed that “Go ___, it’s your birthday” was used by several third parties who were not pursued by plaintiff, casting doubt on its claim that its work was entitled to protection.
The court held that the “Go ___, it’s your birthday” was a common, unoriginal and non-copyrightable element of the song and not entitled to copyright protection. Since outside of the phrase there was no similarity between the songs, the court granted summary judgment for the defendant.
Ninth Circuit Rules that Vote-Swapping Websites Cannot be Prosecuted Under Vote-Buying Statutes
By Rita Weeks
In a decision that could have significant implications for the upcoming 2008 presidential election, the U.S. Court of Appeals for the Ninth Circuit held that California’s former Secretary of State Bill Jones improperly threatened criminal prosecution against vote-swapping websites operating during the Bush-Gore 2000 presidential election. Porter v. Bowen, Case No. 06-55517 (9th Cir., Aug. 6, 2007) (Fisher, J.). The Ninth Circuit explained, “whether or not one agrees with these voters’ tactics, such efforts, when conducted honestly and without money changing hands, are at the heart of the liberty safeguarded by the First Amendment.”
In the last weeks of the 2000 presidential campaign, several websites launched that allowed third-party supporters in swing states (where the projected outcome was uncertain) to strategize with major-party voters in safe states (where the projected outcome was reasonably certain), to avoid handing the election to their least-preferred candidate. Ultimately, the sites aimed to increase Al Gore’s chances of winning the Democratic-pledged electors in swing states without reducing third-party candidate Ralph Nader’s share of the national popular vote.
Four days after the website voteswap2000.com launched (eight days before the presidential election), then-Secretary of State of California Bill Jones sent a letter to the site’s owner, alleging that the site was “engaged in criminal activity,” threatening criminal prosecution and stating “any person or entity that tries to exchange votes or brokers the exchange of votes will be pursued with the utmost vigor.” Immediately upon receiving the letter, the site’s owner disabled the site’s vote-swapping mechanism, barred access to internet users outside of California, posted an explanation on the site and emailed all of the matched users about the potential illegality of vote swapping.
Owners of a similar website, voteexchange2000.com, did not receive a letter from Jones, but disabled their site’s vote-swapping mechanism immediately upon learning about Jones’s letter to voteswap2000.com.
Three days after receipt of Jones’ letter (five days before the presidential election), the website owners and two individual voters brought suit in the Central District of California, asserting that the threatened prosecution violated the First Amendment. The district court twice found the case to be moot. The district court also granted summary judgment to the state on the website owners’ damage claims, and ruled that the secretary of state was entitled to qualified immunity.
On appeal, the Ninth Circuit held that the websites’ vote-swapping mechanisms as well as the communication and vote swaps they enabled were constitutionally protected speech. The court recognized that California possesses valid interests in preventing election fraud and corruption, but nonetheless held that Jones’ threatened criminal prosecution was an unlawful burden because it was not sufficiently tailored to the advancement of the state’s legitimate interests.
The Ninth Circuit upheld the district court’s determination that Jones was entitled to qualified immunity, however, finding that the constitutionality of halting vote swapping was not clearly established in 2000. Therefore, Jones did not have “fair warning” that his actions were unconstitutional.
Copying an Independently-Created Third-Party Design Is Not Infringement of Copyright in an Identical Design
Contact Paul Devinsky
Addressing facts and issues that the court characterized as “unusual,” the U.S. Court of Appeals for the First Circuit held that a copy of an independently created third-party design is not an infringement of a copyright on a similar design and that where a design is “simple,” even a “striking similarity” between two designs is not particularly relevant to the infringement inquiry. Mag Jewelry Co. v. Cherokee Inc., Target Corp., et. al., Case No. 06-1556 (1st Cir , Aug. 8, 2007) (Lipez, J.).
The plaintiff, Mag Jewelry Company, owned a copyright on the design of a necklace comprised of four crystal stones in the shape of angel. After becoming aware that a necklace of the same description was being sold at Target stores, Mag sued Target and its suppliers for copyright infringement. Target denied copying Mag’s angel, claiming that its jewelry was based on an identical design independently created by a third party. In fact, several years earlier Mag had become aware of that third party’s creation and had agreed not to pursue claims against one another for copyright infringement. At trial, at the close of Mag’s case, the district court granted Target’s motion for judgment as a matter of law, holding that since there was evidence that the underlying third-party design was independently created and no evidence that the third party had access to Mag’s design, neither the underlying third-party design nor, by extension, a copy of that design could satisfy the “copying” element of copyright infringement. Mag appealed.
On appeal, the First Circuit began with the “axiomatic” rule that “separate copyrights exist in independently created designs, even if the works are identical.” With that principle in mind, the court held that because Mag could not prove any more than a “bare possibility” of the third party’s access to its design prior to the creation of its own angel, it had failed to meet its burden of proof on the “copying” component of an infringement claim. Consequently, it had failed to prove that Target had copied anything but the third-party’s independently created design. Thus, only the third-party’s copyright—not Mag’s—was implicated in the Target necklace, regardless of its similarity to Mag’s design.
The court quickly disposed of Mag’s contention that the “striking similarity” of the two angel designs was itself enough to prove copying as a matter of law. While acknowledging that some courts have held as much under other facts, the First Circuit agreed with the district court that “the striking similarity between the designs ‘is a little less compelling in this case’” because the design consisted essentially of “geometric shapes” and “there are only so many ways one can depict an angel.” The First Circuit elaborated: “In a case such as this, where the simplicity of the design makes independent creation highly plausible, similarity alone could not establish access and, in turn, copying.”
No Presumption of Validity if Long Hiatus Between Publication and Registration
By Victoria E. Bembenista
Addressing a copyright infringement claim in which 20 years passed between the date of first publication and the date of registration, the U.S. Court of Appeals for the First Circuit upheld the lower court’s dismissal of the claim, finding that the claimant’s copyright registration did not benefit from prima facie validity and that the claimant therefore failed to meet its burden of establishing a valid copyright. Brown v. Latin American Music Co., Case No. 06-2710 (1st Cir., Aug. 7, 2007) (Newman, J., sitting by designation).
The plaintiff Roy Brown brought an action for a declaratory judgment that a poem written by Juan Antonio Corretjer was in the public domain. The defendants, referred to collectively as LAMCO, filed a counterclaim alleging that Brown infringed LAMCO’s 2000 copyright on an additional 10 poems written by Corretjer, based on LAMCO’s 2000 copyright registration for a work that included the 11 poems at issue. Brown, however, produced evidence that 10 of the poems appeared in books or pamphlets with publication dates from 1952 to 1976. None of these works contained a copyright notice. Both the 1909 Copyright Act and the 1976 Copyright Act required a copyright notice in the first publication for a valid copyright, placing the burden on LAMCO to show that the poems at issue were not published before the 1979 publication date cited in LAMCO’s 2000 registration certificate. LAMCO only entered general denials to Brown’s evidence, forcing the district court to consider what evidentiary weight was appropriate to give to LAMCO’s copyright certificate. The district court denied Brown’s motion for summary judgment but dismissed LAMCO’s infringement counterclaim, finding that LAMCO’s copyright did not benefit from prima facie validity and that it had therefore not established the elements necessary to proceed in a copyright infringement suit.
On appeal, the First Circuit began by stating that it need not consider whether it had appellate jurisdiction to grant Brown’s motion for summary judgment, as it was affirming the lower court’s dismissal of the infringement counterclaim. Based on the five-year rule of 17 USC §410(c), the First Circuit stated that a registration obtained after five years of first publication is not entitled to a presumption of validity. The First Court also stated that the weight to be given to such a registration is within the discretion of the court. The First Circuit then affirmed the lower court’s finding that LAMCO’s copyright did not benefit from prima facie validity. The court cited the lower court’s findings of fact questioning the validity of the certificate’s facts, such as LAMCO’s concession that five of the poems were published in 1957, despite the certificate’s statement that the first publication was in 1979, and LAMCO’s failure to counter Brown’s submissions concerning the publication of the poems without a copyright notice. Finding no substantive support for LAMCO’s claim of copyright, the First Circuit affirmed the dismissal of the infringement claim.
Practice Note: This case sets forth a “standing” rule for copyright claimants: a long hiatus between publication and registration creates a presumption that the work entered the public domain and removes the usual presumption of validity for the registration, placing the burden on the copyright claimant to establish ownership of a valid copyright.
Changes to U.S. Rules of Patent Prosecution Practice
By Bernard P. Codd
The U.S. Patent and Trademark Office (USPTO) has revised the rules of practice in patent cases relating to continuing applications and requests for continued examination (RCE) practices, as well as for the examination of claims in patent applications. Although the rules take effect on November 1, 2007, several provisions are applicable to pending applications and new applications filed prior to the effective date of November 1. The following paragraphs provide a brief, non-exhaustive summary of the impending changes.
Limitations to Number of Claims
An application may include up to five independent claims and 25 total claims (the 5/25 rule). If an application does not comply with the 5/25 rule, the applicant must submit an Examination Support Document (ESD) before a first action on the merits (FAOM) or file a Suggested Restriction Requirement (SRR) before receiving a FAOM or restriction requirement. SRRs must include an election of a group of claims which satisfies the 5/25 rule. Withdrawn claims do not count towards the 5/25 rule. If the examiner does not accept an SRR and does not impose an alternative restriction, the applicant has a two-month, non-extendable period to reduce the number of claims or file an ESD. If the examiner responds to the SRR with a different restriction requirement or with no restriction requirement, the applicant has a two-month non-extendable period to elect and cancel claims or file an ESD if the elected group is greater than 5/25. The filing of an ESD requires five things: a search of all claim limitations; a listing and explanation of the pertinence of references most closely related to the subject matter of each claim; an explanation of where each claim limitation is taught in the cited references and which claim limitations are not disclosed; a detailed explanation of why the claimed matter is not obvious in view of the listed references; a showing of § 112 support for each claim. The 5/25 rule will apply to all applications in which a first action on the merits has not been mailed by November 1, 2007.
Commonly Owned Applications and Presumption of Patentably Indistinct Claims
An applicant must identify other commonly owned pending applications or patents that have a claimed filing or priority date within two months of the claimed filing or priority date of the application and name at least one common inventor. There is a rebuttable presumption that the application and the other application(s) or patent(s) contain at least one patentably indistinct claim if the other commonly owned application or patent also has a substantial overlapping disclosure with the application and the same filing or priority date. Unless rebutted, the USPTO will require the applicant to put all of the patentably indistinct claims in a single application limited by the 5/25 rule or to file a terminal disclaimer and explain why there are two or more applications having indistinct claims that justify multiple applications.
Changes to Continuing Prosecution
The revised rules require that any third or subsequent continuing application, defined as either a continuation application or a continuation-in-part application, and any second or subsequent RCE in an application family be filed with a petition to obtain consideration of an amendment, argument or evidence and be supported by a showing as to why the amendment, argument or evidence sought to be entered could not have been previously submitted. An applicant may file divisional applications to non-elected inventions only if the USPTO issues a restriction requirement in the prior application. In applications having at least one continuation application in its family that are pending as of August 21, 2007, “one more” continuing application may be filed as of right after November 1, 2007, providing no additional continuing applications are filed between August 21, 2007 and October 31, 2007. However, as many continuing applications as desired may be filed before November 1, 2007. Continuing applications filed on or after November 1, 2007 that do not meet the requirements of the new rules, will not receive the benefit of an earlier filing date.
House Passes Patent Reform Bill
By Paul Devinsky and Rita Weeks
On September 7, 2007, after a vigorous debate punctuated by severe criticism leveled against the bill by Rep. Dana Rohrabacher (R-CA) and others, the House of Representatives passed H.R. 1908 by a vote of 220-175. The centerpiece of the bill fundamentally changes the U.S. patent system to a first-to-file system, but is contingent upon major world patent authorities adopting a grace period as provided for in the new version of 35 U.S.C. §102. The companion Senate bill, S.1145, contains no such contingency.
Another major provision of the House bill relates to the manner reasonable royalties are calculated (new version of §284) and includes consideration of the economic value of the contribution over the prior art. The “entire market value” is only used where the contribution of the patent is the “predominant basis for the market demand” for the infringement. Where neither an apportioned or entire market value is appropriate, a reasonable royalty analysis would consider non-exclusive marketplace licensing “as well as other factors under applicable law.”
Willful infringement, according to the House bill, would require stringent proof of specific notice to the infringer, intentional copying or contempt of an injunction. In addition, a good faith belief in the invalidity or unenforceability of the patent would trump proof of willfulness.
The House bill also provides for a single post-grant review window during which the patent would enjoy no presumption of validity and the challenger would only need to meet a preponderance of the evidence standard. The Senate bill is similar with regard to this provision. The House bill also retains (and expands) inter parties reexamination. The Senate bill would repeal inter parties reexamination, but would provide a second post-grant opposition window—during which a presumption of validity and a clear and convincing evidence standard apply.
The House bill amends § 101 of the patent law to provide that the tax methods are not patentable subject matter. The Senate bill does not address the issue.
The House bill, as well as its Senate counterpart, includes defendant-based venue provisions that preclude manufactured venue (with certain carve-outs for universities and inventors). Both the House and Senate bills also provide for interlocutory appeals of claim construction rulings, a provision Chief Judge Michel of the Federal Circuit has “lobbied” against.
The House bill codifies the standard for inequitable conduct to require disclosure of “that which a reasonable examiner would have made a prima facie finding of invalidity.” The House bill also authorizes the USPTO to require applicants to submit a search report—except for “micro entities,” which are defined as inventors or small entities that have previously filed less than five applications and have limited income.
In what would be a post hoc confirmation of the USPTO’s authority to regulate continuation practice [see previous article], the House bill provides, subject to a congressional review procedure, that the USPTO may promulgate rules governing continuation practice. The Senate version has no similar provision.
Attention now shifts to the Senate for action on the S.1145, which was reported out of the Judiciary Committee on July 19. Senate Majority Leader Harry Reid (D-NV) has placed the bill on the calendar of bills on which action is likely to be taken up next month, but “holds” put on the bill by several Senators may delay a Senate vote.
The complete text of H.R. 1908 may be found at http://www.rules.house.gov/SpecialRules_details.aspx?NewsID=2990.