ClearValue, Inc. et al. v. Pearl River Polymers, Inc. et al.
(DK# 2011-1078)(Fed. Cir. 2012)(PDF, 10 pages)

Claimed alkalinity range that is contained within a broader range found in the prior art is anticipated by the prior art when the claimed invention does not describe that the claimed method works differently at different points within the broader prior art range.

ClearValue, Inc. et al. (ClearValue) accused Pearl River Polymers, Inc., et al. (Pearl River) of infringing U.S. Patent 6,120,690 ("the '690 Patent), which is directed toward a chemical-treatment process for clarification of water of raw alkalinity less than or equal to 50 ppm.  The jury found that the '690 Patent was valid and indirectly infringed, and the District Court denied Pearl RIver's motions for judgment as a matter of law (JMOL) of invalidity and noninfringement.  The main prior art reference, U.S. Patent 4,800,039 (Hassick), was held to not anticipate or make obvious the '690 Patent because Hassick teaches away from the inventiveness of the '690 Patent and because Hassick describes clarifying water with alkalinity of 150 ppm or less, rather than the more narrowly claimed alkalinity range of 50 ppm or less.

The CAFC reversed the denial of the motion for JMOL of invalidity.  The CAFC first noted that while a "teaches away" argument is relevant to an obviousness analysis, the "teaches away" argument is inapplicable to an anticipation analysis.  With regard to the claimed alkalinity range of less than or equal to 50 ppm, the CAFC noted that ClearValue had not argued that the claimed range was critical or that "the claimed method works differently at different points within the prior art range of 150 ppm or less."  The CAFC also noted that ClearValue did not argue that the Hassick reference failed to enable its invention to the extent required to practice the '690 Patent.


Dealertrack, Inc. v. David Huber et al.
(DK# 2009-1566)(Fed. Cir. 2012)(PDF, 40 pages)

"Computer aided" language in preamble not enough for otherwise abstract claims to satisfy requirements for patentable subject matter.

Dealertrack, Inc. (Dealertrack) owns U.S. Pat. No's 6,587,841 ("the '841 Patent") and 7,181,427 ("the '427 Patent), which are both directed to processing credit applications (e.g., car loans) over electronic networks.  Dealertrack sued David L. Huber and Finance Express, LLC, and RouteOne, LLC (Defendants) for infringement of patents that included the '841 Patent and the '427 Patent.  The District Court granted summary judgment of non-infringement of all asserted claims of the '841 Patent, and the District Court granted summary judgment of invalidity of all claims of the '427 Patent for failure to claim patent-eligible subject matter under section 101.

On appeal, the CAFC reversed and remanded the District Court judgment of non-infringement of the '841 Patent, and affirmed the District Court judgment of invalidity of the '427 Patent.  With regard to the '427 Patent, the CAFC focused on claim 1, which includes the preamble recitation: "A computer aided method of managing a credit application, the method comprising the steps of".  The CAFC noted that the body of claim 1 of the '427 Patent basically includes three steps: (1) receiving data from one source, (2) selectively forwarding the data, and (3) forwarding reply data to the first source, and that these steps were abstract concepts.  The CAFC further noted that the "computer aided" limitation in the preamble was just as abstract as the body of the claim because the '427 Patent does not specify how the computer is specially programmed to perform the steps claim in the patent.  The CAFC also held that the '427 Patent did not satisfy the machine-or-transformation test because the "computer" attempts to cover any existing or future-devised machinery and thus does nothing to limit the scope of the claim.

Abbott Point of Care Inc. v. Epocal, Inc.

(DK# 2011-1024)(Fed. Cir. 2012)(PDF, 14 pages)

Company for which inventor does consulting does not have ownership rights in patent when the consulting agreement does not specify the continuation of obligations to assign patent rights set forth in the inventor's original employment agreement with the company.

Abbott Point of Care Inc. (Abbott) filed suit against Epocal, Inc. (Epocal) for alleged infringement of U.S. Patent Nos. 6,845,327 ("the '327 Patent") and 6,896,778 ("the '778 Patent"), which are both directed toward systems and devices for testing blood samples.  The inventor on the '327 Patent and the '778 Patent, Dr. Imants Lauks, founded Epocal after having previously worked for Abbott.  During his time at Abbott and its predecessors, Lauks signed three agreements: (1) an employment agreement executed on January 10, 1984 ("1984 Agreement"), (2) an employment agreement executed on January 29, 1992 ("1992 Agreement"), and (3) a consulting agreement signed on September 1, 1999 ("1999 Consulting Agreement").  The 1984 Agreement included patent-assignment provisions, and the 1992 Agreement included employment duties, compensation, benefits, termination, and severance payments.  The The 1999 Consulting Agreement stated that Lauks resigned from all positions at Abbott, and defined Lauks consulting services.  The 1999 Consulting Agreement also noted that existing confidentiality agreements were to remain in effect, but did not address invention assignments or obligations.  Epocal filed a motion to dismiss based, in part, on the allegation that Abbott did not have standing to sue since it did not have ownership rights in the '327 Patent or the '778 Patent.  The district court granted Epocal's motion to dismiss and Abbott appealed.

The CAFC affirmed the district court decision to dismiss the case based on Abbott's lack of standing.  The CAFC noted that the 1999 Consulting Agreement did not specify whether the entire 1984 Agreement was to remain in effect, and instead specified only certain provisions that were to remain in effect.  The CAFC further noted that the 1999 Consulting Agreement allowed Lauks to pursue other, non-conflicting interests, and explicitly excluded work on new products, regardless of the subject matter, including point-of-care blood analysis applications.

Prometheus Laboratories, Inc. v. Mayo Medical Laboratories et al.

(DK# 2008-1403)(Fed. Cir. 2010)(PDF, 23 pages)

Claims directed to "administering" drugs to a subject and "determining" the levels of the drug's metabolites in the subject are statutory subject matter under 35 U.S.C. 101.

Prometheus Laboratories, Inc. (Prometheus) is the sole and exclusive licensee to U.S. Patent No's. 6,355,623 (the '623 patent) and 6,680,302 (the '302 patent) (collectively, the "drug-optimization patents"), which are directed to methods for calibrating the proper dosage of drugs used to treat autoimmune disease (i.e., the thiopurine drugs 6-mercaptopureine and azathiopurine).  The methods generally include the steps of (1) "administering" the drug to a subject, and (2) "determining" the levels of the drug's metabolites in the subject.  The methods allow the provider to optimize the efficacy of the drugs while also minimizing toxicity.  Prometheus marketed a test based on the drug optimization patents and Mayo Medical Laboratories et al. (Mayo) originally purchased and used the Prometheus test.  Mayo then began using its own version of the test, which measured the same metabolites as the Prometheus test but determined toxicity differently.  Prometheus filed suit against Mayo for infringement of the drug-optimization patents in the District Court for the Southern District of California.  The District Court first held that Mayo had literally infringed claim 7 of the '623 patent, but it then granted Mayo's motion for summary judgment that the patents were invalid under 35 U.S.C. 101.

On appeal to the Court of Appeals for the Federal Circuit (CAFC), the CAFC reversed the District Court and remanded with instructions to deny Mayo's motion for summary judgment under 101.  The primary reasoning for the CAFC's decision was that the claimed methods satisfied the transformation prong of the In re Bilski test (i.e., a claimed process is patent eligible under 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing).  The CAFC noted that the administration of a drug to a human subject necessarily involves a transformation of the recipient human body (i.e., the whole purpose of administrating the drug is to cause some effect on the body).  The CAFC also pointed out that determining levels of metabolites in a subject necessarily involves a transformation because such levels "cannot be determined by mere inspection" (e.g., some type of manipulation, such as high pressure liquid chromatography, is necessary).  According to the CAFC, the "administering" and "determining" steps of the drug-optimization patents are transformative and central to the purpose (i.e., to provide a treatment protocol) of the claims, as opposed to mere data-gathering steps.

Following the CAFC decision, the Supreme Court of the United States (SCOTUS) issued the In Re Bilski decision, which rejected the machine-or-transformation test as the sole, definitive test for determining patent eligibility of a process under 101, and then SCOTUS granted Mayo's petition for certiorari.  SCOTUS vacated the CAFC judgment for Prometheus and remanded for consideration in light of In Re Bilski.  On remand, the CAFC again held that Prometheus's method claims recited patentable subject matter under 101.  The CAFC stated, inter alia, that the Prometheus claims were directed to a particular application of a natural phenomenon, rather than the natural phenomenon itself.


Ultamercial, LLC et al. v. Hulu, LLC et al.
(DK# 2010-1544)(Fed. Cir. 2011)(PDF, 14 pages)

Practical application of using advertising as currency is patentable subject matter.

U.S. Patent 7,346,545 ("the '545 Patent") is directed toward distributing copyrighted materials over the Internet where the consumer receives a copyrighted product for free in exchange for viewing an advertisement, and the copyrighted content is paid for by the advertiser.  The owner of the '545 Patent, Ultramercial, Inc. et al. (Ultramercial) brought suit against Hulu, LLC, YouTube, and WildTangent, Inc. (WildTangent) for allegedly infringing the '545 Patent (Hulu, LLC and YouTube have since been dismissed from the case, leaving only defendant WildTangent, Inc.).  The District Court granted WildTangent's motion to dismiss based on the argument that the '545 Patent did not claim patentable subject matter.

On appeal, the CAFC reversed the District Court's holding of non-patentable subject matter and remanded for further proceedings.  The CAFC noted that "the '545 Patent does not claim a mathematical algorithm, a series of purely mental steps, or any similarly abstract concept", but rather claims "a particular method for collecting revenue from the distribution of media products over the Internet".  The CAFC stated that, although the idea that advertising can serve as currency is abstract on its own, the claims of the '545 Patent are patentable because they disclose a practical application of having advertising serve as currency.  The CAFC further stated that one distinction of the '545 Patent over the claims in CyberSource Corp. v. Retail Decisions, Inc. (see below) is that the claims of the  '545 Patent require "controlled interaction with a consumer via an Internet website".


CyberSource Corp. v. Retail Decisions, Inc.
(DK# 2009-1358)(Fed. Cir. 2011)(PDF, 21 pages)

Computer-readable medium claim is not patentable if underlying software method is not patentable.

CyberSource Corporation (CyberSource) owns U.S. Patent 6,029,154 ("the '154 Patent"), which is directed to a method and system for detecting credit-card fraud between a consumer and a merchant over the Internet.  The claims of the '154 Patent encompass using internet addresses to determine whether the user of the credit card is the actual owner.  CyberSource sued Retail Decisions, Inc. (Retail) for allegedly infringing the '154 Patent, and Retail responded by initiating an ex parte reexamination of the '154 Patent (the lawsuit was stayed during the reexam).  After the '154 Patent was reissued with amended claims, the District Court granted Retail's motion for summary judgement based on a finding that the claims recited unpatentable mental processes.  With regard to claim 2 (a computer-readable medium version of claim 3 shown below), the District Court further noted that adding a computer-readable medium to an otherwise non-statutory process claim is insufficient to make it statutory.

Claim 3 of the '154 Patent as amended during reexamination:
3. A method for verifying the validity of a credit card transaction over the Internet comprising the steps of:
a) obtaining information about other transactions that have utilized an Internet address that is identified with the
[ ] credit card transaction;
b) constructing a map of credit card numbers based upon the other trans-actions and;
c) utilizing the map of credit card num-bers to determine if the credit card transaction is valid.

On appeal, the CAFC affirmed the District Court finding of invalidity.  The CAFC first agreed with the District Court that the claims did not satisfy the machine-or-transformation test (e.g., the CAFC stated that claim 3 simply requires one to obtain and compare intangible data pertinent to business risks").  The CAFC further concluded that the method of the '154 Patent was drawn to a mental process, which is a subcategory of unpatentable abstract ideas because all of the steps of claim 3 could be performed in the human mind.  For example, the CAFC noted that claim 3 does not limit its scope to any particular fraud detection algorithm.  With regard to claim 2, the CAFC held that claim 2 should be analyzed as a process claim despite its Beauregard claim format, and that the process of claim 2 was unpatentable because one could mentally perform the fraud detection method that underlies the claim.


In re Keisuke Aoyama et al.
(DK# 2010-1552)(Fed. Cir. 2011)(PDF, 25 pages)

Flowchart is not necessarily sufficient to support software means-plus-function claim.

Mitsui Bussan Logistics (Mitsui) owns U.S. Patent Application No. 10/798,505

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(the '505 Application), which is directed to a system and method for distribution chain management.  Claims 11 and 21, which include the recitation at issue of  "reverse logistics means for generating transfer data", were rejected as anticipated, and the Board of Patent Appeals and Interferences (BPAI) affirmed the rejection.  As part of the affirmance, the BPAI held that the structure for the means-plus-function recitation in claims 11 and 21 was "open ended" and could be generated by a variety of systems.  The CAFC affirmed the rejection on the alternative grounds that claims 11 and 21 failed to satisfy the definiteness requirements of 35 U.S.C. 112, paragraph two.

The CAFC noted that sufficient structure for a means-plus-function claim must simply "permit one of ordinary skill in the art to know and understand what structure corresponds to the means limitation so that he may perceive the bounds of the invention".  With regard to the '505 Application, the CAFC agreed with the BPAI's finding that, although the particular flowchart in Figure 8 and its corresponding description provide a high level process flow related to the means-plus-function language at issue, the flowchart fails to provide any structure or algorithm whatsoever (the CAFC emphasized, however, that a flowchart can, in some circumstances, provide sufficient structure to support a means-plus-function claim).


The Association for Molecular Pathology et al. v. Myriad Genetics, Inc., et al.
(DK# 2010-1406)(Fed. Cir. 2011)(PDF, 105 pages)

Isolated human DNA is patentable subject matter.

Myriad Genetics, Inc. and the University of Utah Research Foundation (Myriad) own U.S. Patent No's: 5,747,282, 5,837,492, 5,693,473, 5,709,999, 5,710,001, 5,753,441, and 6,033,857 (collectively, "the Myriad patents"), which are directed to methods and compositions of BRCA1 and BRCA2, human genes associated with a predisposition to breast and ovarian cancers.  The University of Pennsylvania's Genetic Diagnostic Laboratory (GDL), which is co-directed by Dr. Haig H. Kazazian, Jr., M.D., and Arupa Ganguly, Ph.D., (Plaintiffs) provided BRCA testing services to women until Myriad accused GDL of infringing the Myriad patents.  Plaintiffs filed a declaratory judgment suit against Myriad and the district court (Southern District of New York) held (1) Plaintiffs had standing to bring the suit, (2) the BRCA composition claims were directed to unpatentable subject matter, and (3) Myriad's method claims were directed to unpatentable subject matter.

The CAFC affirmed the district court's holding that Plaintiffs had standing, reversed the holding that Myriad's composition claims were unpatentable, reversed the holding that Myriad's method claims to screening potential cancer therapeutics via changes in cell growth rates were unpatentable, and affirmed the holding that Myriad's method claims directed to "comparing" or "analyzing" DNA sequences were unpatentable.  With regard to Myriad's composition claims, the CAFC held that the challenged claims to isolated DNA, whether limited to cDNAs or not, were directed to patent-eligible subject matter under section 101.  The CAFC stated that a distinction is drawn between human-made compositions having characteristics similar to those found in nature, and compositions that human intervention has given "markedly different" or "distinctive" characteristics.  With regard to the isolated DNA of the Myriad patents, the CAFC noted that the isolated DNA has been cleaved (i.e., covalent bonds were broken) and thus the isolated DNA has been manipulated chemically so as to produce a molecule that is markedly different from that which exists in the body.  With regard to the method claims of the Myriad patents, the CAFC noted that the claims directed to "comparing" DNA sequences were unpatentable because the comparison can be accomplished by mere inspection alone and does not require a "determining"-type step such as found in Prometheus v. Mayo.  The method of screening potential cancer therapeutics, however, was found to be patentable because it did include recitations of "growing" host cells transformed with an altered BRCA1 gene and "determining" the growth rate of the host cells with or without the potential therapeutic.



Microsoft Corporation v. i4i Limited Partnership
(U.S. 10-290)(S. Ct. 2011)(PDF, 27 pages)

A defendant seeking to overcome the presumption of validity must persuade the factfinder of its invalidity defense by clear and convincing evidence, even where the evidence before the factfinder was not before the USPTO during the examination process.

i4i Limited Partnership (i4i) owns U.S. Patent 5,787,449 (the '449 Patent), which is directed to an improved method for editing computer documents.  i4i sued Microsoft Corporation (M-soft) in 2007 for willful infringement and M-soft counterclaimed that the '449 Patent was invalid and unenforceable.  M-soft claimed that the on-sale bar of 35 USC 102(b) rendered the '449 Patent invalid based on an assertion that i4i's prior sale of a software called S4 embodied the invention claimed in the '449 Patent.  Since the S4 software was never presented to the Examiner during prosecution, M-soft objected to i4i's proposed jury instruction that M-soft was required to prove its invalidity defense by clear and convincing evidence.  Instead, M-soft proposed that the burden of proof should be preponderance of the evidence.  The District Court rejected M-soft's suggested burden of proof and the jury found the '449 Patent to be valid and willfully infringed.  The CAFC affirmed the District Court decision. 

The Supreme Court of the United States (SCOTUS) affirmed the holding of the CAFC and the District Court that the proper burden of proof for a defense of invalidity was clear and convincing evidence, even though the evidence before the jury in this case was not before the USPTO during prosecution of the '449 Patent.  35 USC 282 provides that "a patent shall be presumed valid" and "the burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity", and SCOTUS noted that this statute codified the common-law holding that a preponderance standard of proof was too dubious a basis to deem a patent invalid and thus patent validity was not to be overthrown except by clear and convincing evidence.  SCOTUS further noted that the Court's pre-35 USC 282 cases never adopted or endorsed the fluctuating standard of proof sought by M-soft.



Global-Tech Appliances, Inc. et al. v. SEB
(U.S. 10-6)(S. Ct. 2011)(PDF, 23 pages)

Willful blindness is sufficient to satisfy the knowledge requirement for induced infringement under 35 U.S.C. 271(b).

SEB specializes in home-cooking appliances and sells its products in the U.S. through T-Fal Corp., an indirect subsidiary.  SEB owns U.S. Patent No. 4,995,312 (the '312 patent), which is directed toward a deep fryer with an inexpensive plastic outer shell that provides "cool touch" capabilities.  Pentalpha started selling its accused deep fryer to non-party Sunbeam Products, Inc. in 1997.  During development of the accused deep fryer, Pentalpha purchased an SEB deep fryer and copied its "cool touch" features.  Pentalpha then hired an attorney to conduct a "right-to-use study", but Pentalpha did not inform the attorney that it had copied SEB's deep fryer.  In 1998, SEB sued Sunbeam for infringement of the '312 patent, and Sunbeam eventually settled for $2 million.  After learning of the Sunbeam lawsuit, Pentalpha also sold the accused deep fryer to Fingerhut Corp. and Montgomery Ward.  In September of 1999, SEB filed suit against Pentalpha, Fingerhut Corp., and Montgomery Ward (collectively, Pentalpha), and after evidence was closed, Pentalpha moved for judgment as a matter of law (JMOL) on SEB's claim of induced infringement of the '312 patent.  Pentalpha argued that there was no evidence that anyone at Pentalpha had knowledge of the '312 patent prior to notification of the Sunbeam lawsuit.  The United States District Court for the Southern District of New York denied Pentalpha's motion and the jury found that, inter alia, Pentalpha had induced infringement.  On appeal, the CAFC affirmed the holding of induced infringement based on a ruling that "deliberate disregard" of a known risk that the plaintiff had a patent was sufficient to support the claim of induced infringement.

The Supreme Court of the United States (SCOTUS) affirmed the holding of induced patent infringement, but held that "deliberate disregard" was not the proper standard for the knowledge requirement of 35 U.S.C. 271(b).  SCOTUS reasoned that the "willful blindness" test used in criminal law should also be applied in civil lawsuits like the present case.  Under "willful blindness", (1) the defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of that fact.  SCOTUS held that Pentalpha (Global-Tech) willfully blinded itself to the infringing nature of the sales it encouraged Sunbeam to make because Pentalpha copied an overseas version of the SEB fryer that it knew would probably not have any U.S. Patent numbers on it, and because it failed to inform its attorney that the product to be evaluated was a knockoff of SEB's fryer.



Katz Tech. Licensing LP v. American Airlines et al.
(DK# 2009-1450)(Fed. Cir. 2011)(PDF, 45 pages)

"Processing means" claims ruled indefinite since there was no algorithm in the specification that could be implemented to perform the claimed function.

Katz Tech. Licensing (Katz) owns a number of patents directed to interactive call processing systems including U.S. Patent Nos. 5,684,863 (the '863 Patent), 5,815,551 (the '551 Patent), and 6,148,065 (the '065 Patent).  Katz filed 25 actions against various defendants including American Airlines et al. (AA)  in the Eastern  District of Texas and the District of Delaware between 2005 and 2006.  The patents at issue in these 25 actions include the '863 Patent, the '551 Patent, and the '065 Patent.  The 25 cases were transferred to the Central District of California, where a previously filed declaratory judgment action between Katz and Verizon Communications had been held.  The district court held held that all of the claims at issue were either invalid or not infringed.  The invalidity rulings included a number of means-plus-function claims that were held invalid for indefiniteness because the only corresponding structure disclosed in the specification  was a general purpose computer and the specification did not disclose an algorithm by which the general purpose computer performed the recited function.

With regard to the means-plus-function claims at issue, the CAFC affirmed in part, vacated in part, and remanded for further proceedings.  The CAFC affirmed the indefiniteness ruling with regard to claims 21 and 33 of the '551 Patent, and claim 13 of the '065 Patent.  The language at issue in the '551 Patent, for example, was the recitation of a "processing means ... for receiving customer number data entered by a caller and for storing the customer number data ... and based on a condition coupling an incoming call to the operator terminal, the processing means visually displaying the customer number data".  The CAFC noted that the '551 specification does not disclose an algorithm that corresponds to the "based on a condition coupling an incoming call to the operator terminal" function.  The CAFC stated that, given no algorithm in the specification, the public would be left to guess how to perform the claimed function because computers can be programmed to conditionally couple calls in many ways.  With regard to other claims at issue, however, including claims 96, 98, and 99 of the '863 Patent, the CAFC held that Katz did not claim a specific function performed by a special purpose computer and thus the description of a general purpose computer in the specification was enough to satisfy section 112.  Claim 96 recites, for example, a "means for processing at least certain of said answer data signals relating to select ones of said individual callers".



Tokai Corp. et al. v. Easton Enterprises, Inc. et al.
(DK# 2010-1057)(Fed. Cir. 2011)(PDF, 39 pages)

There is no enhanced burden other than clear and convincing evidence when attempting to prove obviousness in a case where at least some evidence was not considered by the USPTO.

Tokai Corp. et al. (Tokai) owns U.S. Patents 5,697,775 (the '775 Patent), 5,897,308 (the '308 Patent), and 6,093,017 (the '017 Patent) (collectively, "the lighter patents"), each of which are directed to utility lighters and child-safety mechanisms for preventing accidental ignition of the lighters.  Tokai sued Easton Enterprises, Inc. et al. (Easton) for infringement of the lighter patents.  During expert discovery, Tokai failed to submit written reports from their experts and thus Easton was denied an opportunity to depose these witnesses on the subject matter of the their expert declarations.  The district court granted Easton's motion for summary judgment of invalidity of the asserted claims.

On appeal, Tokai asserted, in part, that the district court had abused its discretion in excluding the expert opinion declarations.  The CAFC disagreed and pointed out that Tokai proffered no justifications for excluding the reports other than its own subjective beliefs (e.g., Tokai had argued that the written reports did not need to be submitted because the invalidity portions of Easton's expert report were "effectively gutted" by the court's exclusion of particular prior art references).  With regard to obviousness, the CAFC rejected Tokai's argument that the district court should have imposes an enhanced burden on Easton to rebut the presumption of validity because some of the prior art was considered during prosecution of the lighter patents.  The CAFC noted that some of the prior art references discussed during the trial had not been considered by the USPTO.  The CAFC further noted that the district court had correctly found that the only difference between the asserted prior art and certain claims of the '308 Patent is the intended position of the thumb and finger for operating the lighter and therefore summary judgment of invalidity based on obviousness was proper.



Centillion Data Systems, LLC v. Qwest Communications
(DK# 2010-1110)(Fed. Cir. 2011)(PDF, 19 pages)

In order to "use" a system for purposes of infringement, a party must put the invention into service (i.e., control the system as a whole and obtain benefit from it).

Centillion Data Systems, LLC (Centillion) sued Qwest for infringement of U.S. Patent 5,287,270 (the '270 Patent), which is directed to a system for collecting processing, and delivering information (e.g., electronic billing data) from a service provider to a customer.  The claims at issue are system claims that include both a "back-end" system maintained by the service provider and a "front-end" system maintained by an end user.  The claimed system further includes "on-demand" requests from the customer that cause the back-end system to process data and deliver it to the user via download.  The district court granted Qwest's motion for summary judgment based on a holding that neither Qwest nor its customers "use" the system claimed by the '270 Patent (neither party puts the invention into service (i.e., controls the system as a whole and obtains benefit from it)).

On appeal, the CAFC held that Qwest did not "use" the system of the '270 Patent, but that Qwest's customers did "use" the claimed system.  With regard to Qwest's customers, the CAFC held that the customer controls the claimed system and obtains benefit from it by creating a query and transmitting it to Qwest's back-end.  The CAFC remanded with regard to whether the customers' use was an infringing use.  With regard to Qwest itself, the CAFC held that Qwest never "uses" the entire claimed system because it never puts into service the personal computer data processing means.  The CAFC also held that Qwest is not vicariously liable for the customers' use because it is entirely the decision of the customer whether to install and operate the Qwest software on its personal computer data processing means.



iLOR, LLC v. Google, Inc.
(DK# 2010-1117)(Fed. Cir. 2011)(PDF, 15 pages)

Plaintiff's claim construction assertion that method limitation includes an action not included in specification, but also not foreclosed in specification, does not reach level of objectively baseless and therefore prevailing defendant is not awarded attorney's fees.

iLOR, LLC (iLOR) owns U.S. Patent 7,206,839 (the '839 Patent), which is directed to a method for adding a user selectable function to a hyperlink.  The only language at issue came from claim 26 of the '839 Patent, which includes the recitation: "a user-selectable link enhancement for a toolbar, the toolbar being displayable based on a location of a cursor in relation to a hyperlink in a first page in a first window of an application" (underline emphasis added).  iLOR sued Goolge, Inc. (Google) for infringement of the '839 Patent based on an assertion that the Google Notebook application has a feature that allows a user to right-click on a hyperlink while the cursor is positioned over that hyperlink in order to cause a toolbar to be displayed.  The District Court agreed with Google's argument that the "being displayable" language of claim 26 means that the toolbar is automatically displayed upon the placement of the cursor in proximity to a hyperlink with no further action on the part of the user.  Since it was undisputed that Google Notebook did not automatically display its toolbar (Google required the user to right-click on the hyperlink), the District Court granted summary judgment of non-infringement to Google.  After an initial appeal to the Court of Appeals for the Federal Circuit (CAFC), which affirmed the District Court ruling, Google was granted a motion by the District Court to recover its attorneys' fees and costs based on a finding that iLOR's suit was "objectively baseless" (specifically, the District Court found objectively baseless iLOR's assertion that claim 26 covers a toolbar that is displayed upon a right-mouse click).

iLOR appealed the decision to award Google its attorneys' fees and the CAFC reversed the granting of the attorneys' fees.  The CAFC noted that, absent misconduct during patent prosecution or litigation, sanctions may be imposed against a patent plaintiff only if both (1) the litigation is brought in subjective bad faith, and (2) the litigation is objectively baseless.  The CAFC did not discuss the subjective bad faith prong because it held that a a finding of objective baselessness had not been met.  The CAFC's reasoning for holding that iLOR's arguments were not objectively baseless included hat claim 26 does not use the word "automatic", that even though the '839 Patent does not disclose a right-click embodiment, it does not foreclose that embodiment either, and that the claim 26 preamble uses the open-ended term "comprising".

Uniloc USA, Inc. v. Microsoft Corporation

(DK#2010-1035)(Fed. Cir. 2011)(PDF, 59 pages) 

25 percent rule of thumb for approximating the reasonable royalty rate that a manufacturer of a patented product would be willing to offer to pay to the patentee during a hypothetical negotiation is inadmissible when it fails to tie a reasonable royalty base to the facts of the case at issue.

Uniloc USA, Inc. (Uniloc) owns U.S. Patent No. 5,490,216 (the '216 Patent), which is directed to a software registration system to deter copying of software.  Uniloc sued Microsoft and alleged that Microsoft's Product Activation feature infringed the '216 Patent.  A jury found Microsoft liable for $388 million in damages based on willful infringement, but the District Court , inter alia, denied JMOL of invalidity, granted JMOL of non-infringement, granted JMOL of no willfulness, granted a new trial on damages, and denied Microsoft's motion for JMOL of invalidity. 

On appeal, the Court of Appeals for the Federal Circuit reversed the JMOL of non-infringement, affirmed the JMOL of no willfullness, affirmed the grant of a new trial on damages, and affirmed the denial of Microsoft's motion for JMOL of invalidity.  With regard to the damages, the CAFC noted that Uniloc's expert, Dr. Gemini, calculated a final reasonable royalty of $564,646,803 based on a starting point of 25% of profits stemming from sales of the infringing product (the so-called "25-percent rule").  The CAFC stated that Dr. Gemini did not provide a basis in fact to associate the 25-percent rule royalties to the particular hypothetical negotiation at issue in this case.  The CAFC pointed out three major problems with using the 25-percent rule blindly: (1) it fails to account for the unique relationship between the patent and the accused product, (2) it fails to account for the unique relationship between the parties, and (3) the rule is essentially arbitrary and does not fit within the model of the hypothetical negotiation within which it is based.

 

Gilbert P. Hyatt v. David Kappos

(Dkt# 2007-1066) (Fed. Cir. 2010) ((PDF, 80 pages))

 

Evidence of enablement that was not provided during Patent Office examination is NOT properly excluded from District Court case.

 

Gilbert P. Hyatt (Hyatt) is the sole inventor for U.S. Patent Application Serial No. 08/471,702 (the '702 application), which is directed to computer memory architecture. The '702 application originally contained 15 claims, a 238-page specification, and 40 pages of drawings, but Hyatt eventually cancelled all 15 original claims and added 117 new claims. The USPTO rejected the new claims for lack of support, and after Hyatt filed a response attempting to provide the support, the USPTO issued a final rejection in which all 117 claims were again rejected for a number of reasons including inadequate written description and lack of enablement. The final rejection included specific references of limitations that the USPTO felt were not supported by Hyatt's responses. On appeal to the Board of Patent Appeals and Interferences (BPAI), Hyatt provided additional arguments and evidence that his claims were supported in a thirty-six page brief. Hyatt, however, did not separately point out where each of the limitations cited by the USPTO was supported. In July 2002, the BPAI sustained the written description and enablement rejections for seventy-nine of the 117 claims in the '702 application. Hyatt then filed a district court action against the Director of the USPTO (Director) under 35 U.S.C. 145 in order to appeal the BPAI decision. The Director filed a motion for summary judgment, and Hyatt attempted to respond by filing his own declaration as purported evidence supporting his position. The District Court for the District of Columbia (District Court) excluded the Hyatt declaration because of Hyatt's failure to submit it to the USPTO during examination of the '702 application (the District Court held that Hyatt had been negligent in not submitting the declaration earlier), and then the District Court granted the Director summary judgment.

 

The Court of Appeals for the Federal Circuit (CAFC) initially affirmed the District Court's grant of summary judgment to the Director. However, in an en banc rehearing, the CAFC reversed its panel decision and held that the District Court had abused its discretion in excluding the declaration. 

It turns out that Mr. Hyatt has a very interesting background story including being an inventor/co-inventor on seventy-five issued U.S. patents and having prosecuted a large portion of his patents on his own as a registered patent agent. In addition, Mr. Hyatt is a familiar face in the courtroom as he has had over fifteen cases reach the CAFC and one non-patent case that awarded him $388 million in an action against California state tax authorities.

Fujitsu Limited et al. v. Netgear, Inc.
(Dkt # 2010-1045)(Fed. Cir. 2010) (PDF, 34 pages)

A district court may rely on an industry standard in analyzing infringement.

Fujitsu Limited, Philips, and LG, are part of a licensing pool called Via Licensing (Via).  Via sent a letter to Netgear in 2005 offering to license a set of patents 'essential' to the practice of the 802.11 2007 Standard (802.11)and the Wi-Fi Alliance Wireless Multi-Media Specification, Version 1.1 (WMM).  The patents include U.S. Pat. Nos. 4,975,952 (the '952 Patent), 6,018,642 (the '642 Patent), and 6,469,993 (the '993 Patent)(collectively, the wireless communications patents).  The members of Via then brought suit against Netgear for infringement (contributory and induced) of the wireless communications patents.  The owner of the '952 Patent, Philips, alleged contributory and induced infringement of products that fragment messages and those that do not fragment messages.  The district court noted that fragmentation was disabled by default in the accused products and required Philips to show evidence of direct infringement by users turning on the fragmentation.  Philips presented this evidence for four models of the accused products.  The district court granted summary judgment of noninfringement to Netgear.

The CAFC affirmed summary judgment regarding the '642 Patent and the '993 Patent.  With regard to the '952 Patent, the CAFC affirmed summary judgment for all products except the four models for which Philips, the owner of the '952 Patent, produced appropriate evidence of direct infringement.  On appeal, Netgear had asked the CAFC to establish a rule precluding the use of industry standards in assessing infringement because the district court had relied on the WMM standard instead of the accused products in assessing infringement.  The CAFC refused to establish such a rule, and stated that it would be a waste of judicial resources to separately analyze every accused product that undisputedly practices a standard if a court determines that all implementations of the standard infringe the claims of a patent.  The CAFC further noted, however, that someone could comply with the standard pertaining to the '952 Patent  without fragmenting and therefore not infringe the '952 Patent.  The CAFC also agreed with the district court's analysis that Philips must show evidence that customers actually use the infringing fragmentation features because the default setting was no fragmentation.


Green Edge Enterprises et al. v. Rubber Mulch Etc., et al.
(Dkt# 2009-1455)(Fed. Cir. 2010) (PDF, 31 pages)

In order to satisfy best mode, an inventor using a proprietary product in his preferred embodiment must, at a minimum, provide supplier/trade name information.  The disclosure of an alleged trade name (Visichrome) to describe a preferred colorant, rather than disclosing the specific product number of the colorant, at least raises a genuine issue of material fact with regard to best mode compliance.

Green Edge Enterprises, LLC (Green Edge) owns U.S. Patent 5,910,514 (the '514 Patent), which is directed to a synthetic mulch.  Green Edge sued Rubber Mulch Etc., et al. (Rubber Mulch) for infringement of the '514 Patent.  The specification of the '514 Patent states that the preferred colorants for the synthetic mulch "are water based acrylic systems such as the colorant systems sold under the name 'VISICRHOME', by Futura Coatings, Inc. of Hazlewood, Mo."  During the trial, however, the parties agreed that Futura did not sell a colorant system under the name "Visichrome".  Green Edge claimed that it had believed the colorant system to be called "Visichrome" based on a letter it had received from the vice president of Futura.  The District Court granted summary judgment to Rubber Mulch based on invalidity of the '514 Patent for failure to disclose the best mode of the invention.

The CAFC ruled that the District Court had erred in granting summary judgment based on a best mode violation.  The CAFC noted that compliance with best mode is a question of fact, and the CAFC further noted that the best mode compliance determination is a two-prong analysis: (1) Did the inventor possess a best mode of practicing the claimed invention at the time the patent application was filed? and (2) Did the inventor disclose the best mode in a manner sufficient to enable one of ordinary skill in the art to practice the best mode of the invention.  The CAFC stated that this case turns on whether the name "Visichrome" was descriptive of a sufficiently specific product so that one seeking to obtain and practice the best mode of the invention would have succeeded (the parties did not dispute whether the inventors possessed a best mode of practicing the invention).  The CAFC remanded to the District Court to make a determination on this question.

Telecordia Technologies, Inc. v. Cisco Systems, Inc.

(Dkt# 2009-1175) (Fed. Cir. 2010) (PDF, 28 pages)

With regard to means-plus-function claims, the specification need only disclose adequate defining structure to render the bounds of the claim understandable to an ordinary artisan.

Telecordia Technologies, Inc. (Telecordia) sued Cisco Systems, Inc. (Cisco) for infringement of U.S. Patent Nos. 4,893,306 (the '306 patent), 4,835,763 (the '763 patent), and RE 36,633 (the '633 patent).  The patents at issue are directed toward transmission of data in telecommunications networks.  A jury found that Cisco willfully infringed the '763 and '633 patents and upheld the validity of all three asserted patents.  Cisco appealed to the Court of Appeals for the Federal Circuit (CAFC), and challenged, inter alia, the ruling that the '763 patent was not invalid.  Cisco specifically argued that certain means-plus-function claims within the '763 patent were indefinite because the specification did not clearly link or associate structure to the claimed functions (the claim language in question recites a "monitoring means ... for evaluating the integrity of the multiplexed subrate communications on the first ring and the second ring."  The district court ruled that the structure for the claim language in question was "the circuitry at a controller that determines if a defect exists with the multiplexed subrate communications".  

On appeal, Cisco argued that the figures of the '763 patent did not show the inner circuitry of the controller and therefore that Telecordia failed to provide sufficient evidence that the patent links the controller with the "monitoring means".  The CAFC disagreed with Cisco's argument and affirmed the District Court's ruling that the '763 patent was valid.  The CAFC noted that the internal circuitry of an electronic device need not be disclosed in the specification if one of ordinary skill in the art would understand how to build and modify the device.  Circuit Judge Prost dissented from the means-plus-function portion of the CAFC opinion, and argued that the specification did not reveal that the structure within the node that performs the monitoring task is the circuitry of the controller.

Bilski et al. v. Kappos

(U.S. 08-964) (S. Ct. 2010)(PDF, 71 pages)

Machine-or-transformation test is not sole test for determining whether an invention is a patent-eligible process, and business-methods are not categorically excluded from patent protection.

 

Bernard Bilski and Rand Warsaw (Applicants) filed U.S. Patent Application Serial No. 08/833,892 ('892 application) on April 10, 1997. The '892 application includes eleven claims directed toward

a method of hedging risk in commodities trading.  The Examiner rejected all eleven claims as not being directed to patentable subject matter under 35 U.S.C.101.  Specifically, the Examiner stated "the invention is not implemented on a specific apparatus and merely manipulates an abstract idea and solves a purely mathematical problem without any limitation to a practical application, therefore, the invention is not directed to the technological arts."  The Board of Patent Appeals and Interferences (BPAI) affirmed the Examiner's rejection of the claims. As part of its conclusion, the BPAI stated that the transformation of "non-physical risks and legal liabilities of the commodity provider, the consumer, and the market participants" is not patent-eligible subject matter.  On appeal to the Court of Appeals for the Federal Circuit (CAFC), the CAFC, sitting en banc, affirmed the decision of the BPAI (the claims stand rejected).  The CAFC noted that a claimed process would be patent-eligible if (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing (the machine or transformation test).

The Supreme Court of the United States (hereinafter, "SCOTUS" or "the Court") granted a petition for certiorari filed by the Applicants on June 1, 2009, and were heard on November 9, 2009.  On June 28, 2010, SCOTUS affirmed the judgment of the CAFC that the claims of the '892 application were not directed toward patentable subject matter.  In its analysis, SCOTUS first addressed whether the machine-or-transformation test set forth by the CAFC was the sole test for determining whether an invention is a patent-eligible process under 35 U.S.C. 101.  SCOTUS noted that although the Court's own precedent has established three specific exceptions (i.e., "laws of nature, physical phenomena, and abstract ideas") to 101's broad patent-eligibility principles, these exceptions did not give "the Judiciary carte blanche to impose other limitations that are inconsistent with the text and the statute's purpose and design".  SCOTUS further noted that the Court in Gottschalk v. Benson (409 U.S. 63, 71 (1972) explicitly declined to "hold that no process patent could ever qualify if it did not meet [machine or transformation] requirements."  SCOTUS next discussed whether all business method inventions are excluded from patent protection.  The Court stated that 101 precludes such an exclusion because, inter alia, there is no argument that the "ordinary, contemporary, common meaning" of "method" excludes business methods, and federal law (i.e., 273(b)(1) and 273(a)(3)) explicitly contemplates the existence of at least some business method patents.  Finally, with regard to the Applicant's claims themselves, SCOTUS held that they were not patentable because they are an attempt to patent abstract ideas.  The Court stated that Claims 1 and 4 of the '892 application "explain the basic concept of hedging, or protecting against risk" and, as such, are directed toward unpatentable abstract ideas.  SCOTUS noted that the claims of the '892 application directed toward using hedging in commodities and energy markets are still unpatentable because they are simply attempts to limit an abstract idea to one field of use (see Parker v. Flook, 437 U.S. 584).

There were two concurring opinions issued with the majority SCOTUS opinion.  First, Justice Stevens wrote that he would have held the '892 application to be unpatentable because it describes a method of engaging in business transactions and business methods are not patentable.  Justice Breyer's concurring opinion agreed with Justice Stevens' assertion that business methods are not patentable, but Justice Breyer added four assertions: (1) 101 is broad, but not without limit, (2) transformation and reduction of an article to a different state or thing is the clue to the patentability of a process claim that does not include particular machines, (3) the machine-or-transformation test has never been the "sole test" for determining patentability of a process, and (4) passing the "useful, concrete, and tangible result" test of State Street Bank & Trust Co. v. Signature Financial Group, Inc. 149, F.3d 1368 1373 (CA Fed. 1998) does not necessarily guarantee patentability.

 

WordTech Systems, Inc. v. Integrated Networks Solutions, Inc. et al.

(Dkt# 2009-1454) (Fed. Cir. 2010) (PDF, 27 pages)

A defendant's liability for indirect infringement must relate to the identified instances of direct infringement.

Wordtech Systems, Inc. (Wordtech) sued Integrated Networks Solutions, Inc. (INSC) and its employees Nasser Khatemi and Hamid Assadian for infringement of U.S. Patent Nos. 6,141,298 (the '298 patent), 6,532,198 (the '198 patent), and 6,822,932 (the '932 patent), collectively "the Wordtech patents".  The patents at issue are directed toward compact disk duplication systems.  Wordtech asserted that INSC's sales of "Robocopiers" infringed the Wordtech patents, and Wordtech asserted that Khatemi and Assadian were individually liable because INSC had forfeited its corporate charter by failing to file appropriate annual paperwork.  A jury held that all of the defendants were liable for infringement and damages were awarded.  Khatemi and Assadian appealed the liability verdicts against them as individuals and all of the defendants appeal the damages awarded. 

On appeal to the Court of Appeals for the Federal Circuit, the CAFC reversed and remanded for a new trial on the issue of the individual liability for direct infringement.  The CAFC held that the lack of jury instructions regarding INSC's existence or the piercing of INSC's corporate veil amounted to plain error and required a new trial.  With regard to individual liability for induced infringement and contributory infringement, the CAFC also reversed, stating that the legal test for inducement was never presented to the jury and that the contributory infringement instructions were confusing because they asked whether the Robocopier devices infringed (devices do not possess knowledge required under 271(c)).  With respect to the appeal of the damages award, the CAFC also reversed and held that the verdict was "based only on speculation or guesswork".

Therasense et al. v. Becton Dickinson and Co. et al.

(Dkt# 2008-1248) (Fed. Cir. 2010) (PDF,67 pages)

U.S. Patent "A" invalidated for failure to disclose, to the USPTO, statements that were made by the owner of Patent "A" during prosecution of an EPO patent that paralleled a prior art reference cited against Patent "A" and that were contradictory to statements made by the owner of Patent "A" during prosecution of Patent "A".

On April 26, 2010, the Court of Appeals for the Federal Circuit (CAFC) granted a petition by Therasense et al. for an en banc rehearing of this case.

Following a declaratory judgment action filed by Becton Dickinson and Co. et al. (Becton) against Therasense, Inc. (Abbott), Abbott countersued Becton for alleged infringement of U.S. Patent Nos. 6,143,164 (the '164 Patent), 6,592,745 (the '745 Patent), and 5,820,551 (the '551 Patent), all of which are directed toward disposable blood glucose test strips.  The District Court ruled, inter alia, that the '551 Patent was unenforceable due to inequitable conduct stemming from the failure of Abbott to disclose to the USPTO certain arguments made by Abbott to the European Patent Office (EPO) during prosecution of European Patent EP 0 078 636 (the '636 Patent), which was based on the same disclosure as a co-owned prior art reference cited against the '551 Patent.

The invalidated patent, the '551 Patent, was filed in 1984 and was the product of half-a-dozen continuation applications that were repeatedly rejected over U.S. Patent No. 4,545,382 (the '382 Patent).  The '382 Patent had been filed by Abbott in 1981 and both the '382 Patent and the '351 Patent include the same first two named inventors.  During prosecution of the '551 Patent, Abbott argued that claims directed toward a glucose sensor that did not require a protective membrane when testing whole blood were novel and nonobvious over the '382 Patent because the '382 Patent described a membrane that was "optionally, but preferably" used.  In other words, Abbott argued that the "optionally, but preferably" language of the '382 Patent must be interpreted to mean that a membrane was required.  This argument resulted in the patented claims of the '382 Patent.  According to the District Court, Abbott made "directly contradictory" arguments to the EPO in order to distinguish the '636 Patent from a German reference cited against the '636 Patent (the disclosure of the '636 Patent is substantially identical to the disclosure of the '382 Patent).  According to the District Court, Abbott argued to the EPO that the "optionally, but preferably" language meant that the membrane was merely preferred, but not required.

The CAFC affirmed the District Court's holding that the '551 Patent was unenforceable due to inequitable conduct.  With regard to the materiality of the EPO arguments, the CAFC agreed with the District Court that the statements were contradictory (among other things, the CAFC noted that Abbott had pointed out to the EPO that the "optionally, but preferably" language was "unequivocally clear").  With regard to intent, the CAFC noted that the Abbott witnesses, an inventor of the '551 Patent and a patent attorney for Abbott, had made a conscious decision to withhold the arguments from the USPTO, and that the District Court had found the witnesses to lack credibility.

Ariad Pharmaceuticals, Inc. et al. v. Eli Lilly and Co.

(Dkt# 2008-1248) (Fed. Cir. 2010) (PDF, 72 pages)

35 U.S.C. 112, first paragraph, includes separate written description and enablement requirements.  With regard to written description, the specification must describe an invention understandable to a person of ordinary skill in the art and show that the inventor actually invented the invention claimed.

 

Ariad Pharmaceuticals et al. (Ariad) sued Eli Lilly (Lilly) for alleged infringement of U.S. Patent No. 6,410,516 (the '516 patent), which is directed to the regulation of gene expression by the transcription factor NF-kB.  Specifically, the inventors of the '516 patent claimed methods for regulating cellular responses to external stimuli by reducing NF-kB activity in a cell (i.e., the claims are genus claims that encompass the use of all substances that achieve the desired result of reducing the binding of NF-kB to NF-kB recognition sites.  The specification of the '516 patent discloses three types of molecules with the potential to reduce NF-kB activity in cells.  The District Court ruled in favor of Ariad.  On appeal to a panel of the Court of Appeals for the Federal Circuit (CAFC), the panel reversed in part, holding that the asserted claims were invalid for a lack of an adequate written description.  An en banc rehearing was granted, and the primary legal issue addressed was whether 35 U.S.C. 112, first paragraph, contains a written description requirement separate from an enablement requirement.

The CAFC (en banc) affirmed the panel decision that a written description requirement exists separate from the enablement requirement and that the asserted claims of the '516 patent were invalid for a failure to meet the statutory written description requirement.  During the rehearing, Ariad argued that the written description requirement exists only to identify the invention that must comply with the enablement requirement.  The CAFC disagreed with Ariad's assertion and noted that a separate requirement to describe the invention is basic to the quid pro quo of patent law (i.e., describing the invention is different from describing how to make and use the invention).  The CAFC also noted that some original claims may not satisfy the written description requirement (e.g., a genus claim that uses functional language to define the boundaries of the claimed genus may be simply claiming a desired result and may do so without describing species that achieve the result).  With regard to the asserted claims of the '516 patent, the CAFC agreed with Lilly's assertion that the claims failed to satisfy the written description requirement because the '516 patent fails to adequately disclose how the claimed reduction of NF-kB activity is achieved.

Davis v. Brouse McDowell et al.

(Dkt# 2009-1395) (Fed. Cir. 2010) (PDF, 16 pages)

 

Case-within-a-case doctrine (i.e., the plaintiff must prove that he or she would have been successful in the underlying matter but for the alleged malpractice) applies to legal malpractice claim based on an assertion of negligently drafted patent applications.

 

Inventor Heather Davis developed a website known as "The IP-Exchange".  In 2003, Davis contacted Daniel A. Thomson, an attorney at Brouse McDowell (McDowell), to request general information about patent protection.  Davis told Thomson that she was particularly interested in international patent protection.  Thompson responded by sending Davis a letter explaining the basics of the Patent Cooperation Treaty (PCT), but Thompson failed to inform Davis of the absolute novelty requirement that many countries apply which prevents an inventor from obtaining a patent if the inventor has publicly disclosed the invention prior to filing an application.  Davis launched her website in 2005, and then, apparently on her own, Davis filed two U.S. provisional patent applications on January 20, 2006.  On Wednesday, January 17, 2007 (five days before the deadline for filing U.S. non-provisional applications and/or PCT applications based on Davis' provisionals) Davis contacted Thompson again and requested that he file U.S. non-provisional and PCT applications based on her provisionals.  After returning from a vacation, Thomson filed three U.S. non-provisional applications for Davis on January 22, 2007 (the deadline date).  Thomson did not file any PCT applications for Davis, and told Davis the night of the deadline at 10:47 P.M. that he did not think it was worth filing any PCT applications because she would not be able to obtain any patents in Europe.

Davis filed suit against McDowell in 2008 in an Ohio state court asserting that Thompson had committed malpractice by failing to file PCT applications for her and by negligently preparing her U.S. applications.  With regard to the U.S. applications, Davis asserted that Thomson had drafted inadequate claims which led to her failure to obtain any U.S. patents on her invention.  McDowell removed the case to federal court based on the question of whether Davis had a patentable invention, and the U.S. District Court for the Northern District of Ohio granted summary judgment in favor of McDowell.  On appeal, the Court of Appeals for the Federal Circuit (CAFC) affirmed the summary judgment.  The CAFC first noted that, unless Davis' inventions were patentable, Thomson's negligence could not have caused her to suffer any damages, and therefore Davis had the burden to show a genuine issue of material fact that she would have obtained patents on her inventions, but for Thomson's alleged malpractice (the case-within-a-case doctrine applies).  The CAFC then affirmed the holding that Davis did not meet here burden by pointing out that Davis' expert gave merely conclusory statements during trial regarding the patentability of her inventions.  For example, the CAFC noted that the expert did not perform any prior art search or patentability analysis to support his conclusion, and the expert did not even comment on the prior art used in the USPTO rejections cited against Davis' inventions. 

Ex parte Borden and Ex parte Nakashima

(Appeal 2008-004312) (Application 10/627,345) (PDF, 11 pages)

(Appeal 2009-001280) (Application 10/490,430) (PDF, 42 pages)

An argument raised for the first time in a Reply Brief that was not prompted by a new ground of rejection in the Examiner's Answer will not be considered absent a showing of good cause.

In a combination of two appeals (Ex parte Borden and Ex parte Nakashima), the BPAI concluded that arguments that could have been presented in the Principal Brief on Appeal, but were not, may not be presented in the Reply Brief absent good cause.  According to Board Rule 37, "Any arguments or authorities not included in the brief or a reply brief filed pursuant to 41.41 will be refused consideration by the Board, unless good cause is shown".  The BPAI stated that the reference to reply briefs in Rule 37 "merely puts Appellants on notice that arguments that could be made in the reply brief, but are not, are waived".  The BPAI further stated that it is not unfair to require applicants to present their best arguments in a timely fashion.

In Ex parte Nakashima, the arguments that were waived by the Appellants pertained to an obviousness rejection based on two separate references.  In the Principal Appeal Brief, the Appellants had argued (1) that the combination of the two references would not result in the claimed invention, and (2) that the Examiner had erred in interpreting the teachings of one of the references.  In the Reply Brief, the Appellants argued for the first time that it would not have been obvious to combine the two references.  The BPAI held that the new argument had been waived by Appellants because the Appellants did not provide good cause as to why the new argument was not at least presented in the Principal Brief. 

Hewlett-Packard Company v. Acceleron LLC

(Dkt# 2009-1283) (Fed. Cir. 2009) (PDF, 10 pages)

 Letter from patent holding company to Hewlett-Packard calling attention to holding company's patent, requesting that Hewlett-Packard not file suit, and setting a deadline for response establishes declaratory judgment jurisdiction.

Acceleron, a patent holding company, acquired U.S. Patent 6,948,021 (the '021 Patent) on May 31, 2007.  On September 14, 2007 Acceleron sent a letter to Hewlett-Packard (HP) notifying HP of Acceleron's ownership of the '021 Patent.  The letter states:

"I am writing to call your attention to the ['021 Patent] . . . This patent was recently acquired by Acceleron, and relates to Blade Servers.

We would like an opportunity to discuss this patent with you. In order to provide a productive atmosphere in which we can do so, we ask that you agree that all information exchanged between the parties will not be used for any litigation purposes whatsoever, including but not limited to any claim that Acceleron has asserted any rights against any of your ongoing or planned activities, or otherwise created any actual case or controversy regarding the enclosed patent.
Should you wish to engage in discussions regarding this patent with us, please return an executed copy of this letter to me in the enclosed stamped, self-addressed envelope. When we receive your acknowledgement, we will send you a package of information relating to this patent. I will look for your response by September 28, 2007, and if I do not hear from you by that time, I will assume you have no interest in discussing this patent."

HP responded on October 1, 2007, and requested a 120-day standstill period in which neither company would file any kind of legal action against each other (e.g., HP stated that they would not file a declaratory judgment during this period) so that they could discuss the '021 Patent in a "productive atmosphere".  Acceleron replied four days later stating that HP had no basis to file a declaratory judgment and that if Acceleron did not hear back from HP by October 19, 2007, with regard to Acceleron's original letter, Acceleron would assume that HP "did not have anything to say about the merits" of the '021 Patent.  On October 17, 2007 HP filed a declaratory judgment.  The U.S. District Court for the District of Delaware granted Acceleron's motion to dismiss for lack of subject matter jurisdiction.  On appeal the Court of Appeals for the Federal Circuit (CAFC) reversed and held that the there was declaratory judgment jurisdiction for the case to proceed at the District Court.  The CAFC noted that a declaratory judgment plaintiff must show that the dispute is "definite and concrete", but the CAFC also stated that declaratory judgment jurisdiction cannot be defeated "simply by the stratagem of a correspondence that avoids the magic words such as 'litigation' or 'infringement'".  Acceleron's failure to accept HP's 120-day standstill, Acceleron's two-week deadline, and Acceleron's status as a patent holding company all contributed to the CAFC's ruling.