Mark Owner Must Show Substantially No Gray Market Sales of its Own

In Bourdeau Bros., Inc. v. ITC, et al. (March 30, 2006), the Federal Circuit vacated the International Trde Commission's decision to exclude gray market tractors under a "substantial evidence"standard. Citing SKF Inc. v. Int'l Trade Comm'n, 423 F.3d 1307 (Fed. Cir. 2005), the court reiterated that "a plaintiff in a gray market trademark infringement case must establish that all or substantially all of its sales are accompanied by the asserted material difference in order to show that its goods are materially different."

Although the allegedly infringing tractors were manufactured in the U.S., the court agreed with the ITC, "that the importation and sale of a trademarked good of domestic manufacture, produced solely for sale abroad and not authorized by the owner of the trademark for sale in the United States, may violate section 1337 if the imported good is materially different from all or substantially all of those goods bearing the same trademark that are authorized for sale in the United States." However, after discussing why the differences between the domestic and imported goods were material, it concluded that Deere did not establish that all or substantially all of its sales in the United States were of North American forage harvesters intended for the U.S. market.

In their briefing to the ALJ and to this court, appellants argued that Deere actually sold European forage harvesters in the United States through its network of authorized dealers. In particular, appellants argued that, as early as 1997 and continuing through July of 2003, certain Deere dealers with authority from Deere sold used European forage harvesters in the United States. Appellants asserted that more than fifty used European forage harvesters were sold to them by authorized Deere dealers in the United States and in Europe, and that authorized Deere dealers purchased more than ten European forage harvesters from them. Appellants additionally argued that Deere was aware of the sales of European forage harvesters in the United States as early as 1999, but took no action to stop these sales by authorized Deere dealers until at least 2002. Indeed, appellants argued that Deere permitted its corporate employees to assist authorized dealers in the importation, purchase, and sale of European forage harvesters in the United States, and that "[i]n some instances Deere corporate representatives assisted authorized Deere dealers prior to the sale of European harvesters to U.S. customers."

If appellants are correct that Deere authorized such United States sales of European forage harvesters, and if such sales were sufficient in number to show that Transcript of Hearing at 2365, not all or substantially all of Deere's United States sales were not materially different, Deere would not be entitled to section 1337 relief.
Indeed, the ALJ recognized this point, stating during the hearing that "[i]f John Deere authorizes the importation of [European forage harvesters], then the Staff agree there are no material differences."4 Certain Agric. Vehicles & Components Thereof, Inv. No. 337-TA-487 (Sept. 30, 2003).

. . . Indeed, because SKF places the burden on Deere of establishing that all or substantially all of the authorized sales in the United States were of North American forage harvesters, the ITC must presume that sales by authorized dealers were in fact authorized by Deere. To hold otherwise would enable a plaintiff to simply disclaim the sales of any products that do not contain the alleged material differences; Deere could disclaim the sales of any European forage harvesters by simply asserting that such sales were not authorized. On remand, Deere may rebut
the presumption that all sales by its authorized dealers were authorized. However, Deere bears the burden of proving that sales of European forage harvesters by its authorized dealers were not authorized sales.

Nonetheless, even if Deere cannot establish on remand that the sales of European forage harvesters by authorized Deere dealers were not authorized, it may still prevail if it can establish that the number of sales of European forage harvesters was so small that substantially all of Deere's sales in the United States were of North American forage harvesters, such that substantially all of the authorized sales were of goods bearing the asserted material differences.

Click here for an audio-visual Internet presentation on "Unfair Import Investigations at the U.S. International Trade Commission."

Price Fixing in Multi-Branded Joint Venture Not Illegal Per Se

In Texaco, Inc. v. Dagher, Slip Op. No. 04–805. (S.Ct., February 28, 2006), the U.S. Supreme Court unanimously held that an economically integrated joint venture may set a single price for its own products, even when those products are sold under the separate brand names of the venture’s members.

In 1998, Texaco and Shell Oil formed a joint venture, Equilon, to consolidate their operations in the western United States, thereby ending competition between the two companies in the domestic refining and marketing of gasoline. Under the joint venture agreement, Texaco and Shell Oil agreed to pool their resources and share the risksof and profits from Equilon’s activities. Equilon gasoline was sold to downstream purchasers under the original Texaco and Shell Oil brand names at fixed prices. The Ninth Circuit rejected the joint venture's position as a request for an "exception to the per se prohibition on price fixing."

However, according to the Supreme Court opinion by Justice Thomas,

Price-fixing agreements between two or more competitors, otherwise known as
horizontal price-fixing agreements, fall into the category of arrangements that are per se unlawful. See, e.g., Catalano, supra, at 647. These cases do not present such an agreement, however, becauseTexaco and Shell Oil did not compete with one another in the relevant market—namely, the sale of gasoline to service stations in the western United States—but instead participated in that market jointly through their investments in Equilon.1 In other words, the pricing policy challenged here amounts to little more than price setting by a single entity—albeit within the context of a joint venture—and not a pricing agreement between competing entities with respect to their competing products. Throughout Equilon’s existence, Texaco and Shell Oil shared in the profits of Equilon’s activities in their role asinvestors, not competitors. When "persons who would otherwise be competitors pool their capital and share the risks of loss as well as the opportunities for profit . . . such joint ventures [are] regarded as a single firm competing with other sellers in the market." Arizona v. Maricopa County Medical Soc., 457 U. S. 332, 356 (1982). As such, though Equilon’s
pricing policy may be price fixing in a literal sense, it is not price fixing in the antitrust sense. See Broadcast Music, Inc. v. Columbia Broadcasting System, Inc., 441 U. S. 1, 9 (1979) ("When two partners set the price of their goods or services they are literally ‘price fixing,’ but they are not per se in violation of the Sherman Act").

This conclusion is confirmed by respondents’ apparent concession that there would be no per se liability hadEquilon simply chosen to sell its gasoline under a single brand. See Tr. of Oral Arg. 34. We see no reason to treat Equilon differently just because it chose to sell gasoline under two distinct brands at a single price. As a single entity, a joint venture, like any other firm, must have the discretion to determine the prices of the products that it sells, including the discretion to sell a product under two different brands at a single, unified price. If Equilon’sprice unification policy is anticompetitive, then respondents should have challenged it pursuant to the rule of reason. But it would be inconsistent with this Court’s antitrust precedents to condemn the internal pricing decisions of a legitimate joint venture as per se unlawful.

. . . Because the pricing decisions of a legitimate joint venture do not fall within the narrow category of activity that is per se unlawful under §1 of the Sherman Act, respondents’ antitrust claim cannot prevail. Accordingly, the judgment of the Court of Appeals is reversed.

Nonetheless, as pointed out by James R. McGibbon, "Nothing in the Dagher opinion should be understood to immunize the formation or conduct of joint ventures from antitrust scrutiny. It is important to note that the Supreme Court left open the possibility that Equilon’s pricing strategy could be subject to a rule of reason challenge."

PCT Updates

EPO Search Fee Increase

The amount of the search fee for the EPO to act as the International Searching Authority will increase to $1925, effective April 1, 2006. The revised PCT Fee Schedule will be posted at http://www.uspto.gov/web/offices/pac/dapps/pct/fees.htm.

Certain Rules, Forms, Publications

PCT Rule 4.9(b) was amended effective April 1, 2006. Germany, Japan, Republic of Korea, and Russian Federation have notified the IB that Rule 4.9(b) shall apply in respect to the designation of their country. Consequently, the new Request form (April 2006 version) includes a revised Box V to allow applicants to exclude the designations of Japan, Republic of Korea, Russian Federation, and/or Germany.

PCT Rule 48.2 has been amended to provide that Rule 4.17 declarations will be published with the international application. This change applies to international applications published on or after April 1, 2006.

International publication of international applications filed under the PCT, any republications of previously published international applications, and the PCT Gazette will be published wholly in electronic form. This change applies to the publications and issues of the Gazette published on or after April 1, 2006 and are available on WIPO Internet site http://www.wipo.int/pctdb/.

PCT Time Limit Calculator

WIPO has made available a web-based PCT Time Limit Calculator for assisting applicants in the computing of essential PCT time limits and full explanations of all the time limits. The Calculator is available free of charge on WIPO Internet site http://www.wipo.int/pct/en/calculator/pct-calculator.html.

TGIF for the Greenhouse Helmet

U.S. Patent No. 4,605,000
"Greenhouse Helmet"
to Waldemar Anguita of Brooklyn, NY

Abstract: a dome containing plants secured within the dome worn completely over the head of a person so that the person can breathe in the oxygen given off by the plants.

Thank Goodness It's Friday (and Sharlot Hall popularized the cactus hat),

--Bill Heinze

USPTO Proposes Rexamination Propcedure Changes

On March 30, 2006, the United States Patent and Trademark Office (Office) issued a Notice of Proposed Rulemaking for the rules of practice relating to ex parte and inter partes reexamination. Written comments must be submitted on or before May 30, 2006. No public hearing will be held.

The proposed rule changes include

• providing for a patent owner reply to a request for an ex parte reexamination or an inter partes reexamination prior to the examiner’s decision on the request.
• prohibiting supplemental patent owner responses to an Office action in an inter partes reexamination without a showing of sufficient cause.
• designating the correspondence address for the patent as the correct address for all communications for patent owners in an ex parte reexamination or an inter partes reexamination, and
• simplifying the filing of reexamination papers by providing for the use of a single ‘‘mail stop’’ address for the filing of substantially all ex parte reexamination papers (such is already the case for inter partes reexamination papers).

According to the USPTO, the patent owner’s input could improve the information/evidence and understanding of the issues before the examiner deciding the request:

That input should serve the purpose of reducing improper/unnecessary orders
and providing more timely patent owner responses on the record to third party
allegations. This proposal should enable the Office to be better able to weed
out those requests that do not raise a substantial question of patentability,
prior to instituting a full-blown proceeding. Bringing the issues to light
earlier via such a patent owner response to the request should facilitate the
reexamination process pursuant to special dispatch."

Civil Society Report on IP, Innovation, and Health

The International PolicyNetwork has released a new report from a global coalition of sixteencivil society groups that analyses the relationship between intellectual property, innovation, and health. With regard to intellectual property, "Civil Society Report on Intellectual Property, Innovation and Health" concludes that

• Weak intellectual property legislation in countries with incipient or extant knowledge-based industries acts as a serious disincentive on R&D into the diseases of poverty, not least because it jeopardises the ability to generate enough sales to cover the extremely high costs of innovation. This is particularly true of highly politicised diseases such as HIV/AIDS; with countries such as Brazil threatening to implement compulsory licenses for ARVs, it becomes more difficult for R&D companies to invest resources in the search for new medicines.
  
• Strong intellectual property legislation can also go some way to encouraging the development of an indigenous R&D industry in countries where it currently does not exist. As India comes to terms with its recently enacted patent legislation, for example, more companies are turning to value-added R&D work, rather than merely producing copies. It is likely these companies are also finding commercial benefit in developing drugs for diseases prevalent among local populations, which, due to their lower cost base, can be developed at prices far lower than equivalent development in wealthy countries.
  
• Proposals that seek to restrict the granting of patents for so-called ‘me-too’ drugs misunderstand the incremental nature of innovation. The vast majority of drugs that exist today are incremental improvements on preceding drugs. The existence of many similar drugs in the same class is vital for improving safety, efficacy, selectivity and utility of
  drugs within a specific class.
  
• Transferable patent extensions may work but need to be given careful consideration. A scheme that allowed a drug company to extend the patent on a single blockbuster for a year or more, for example, would effectively force the users of that drug to pay for the development of a drug for a completely different disease. This is ethically dubious and would likely be met with fierce resistance by patient groups. If, however, the patent extension was spread more thinly, for example by granting a short patent extension to many drugs, then these concerns would likely be alleviated.
  
• Countries with slow and inefficient patent offices should introduce measures to improve the speed and efficiency of the patenting process. This might entail the introduction of incentive-based pay schemes, the contracting out of services to the private sector, or the merging of patent offices in different countries.

International Policy Network (IPN) is a charity based in the UK, and a non-profit (501c3) organization in the US. It is a non-governmental, educational and non-partisan organization that "aims to empower individuals and promote respect for people and property in order to eliminate poverty, improve human health and protect the environment."

Supreme Court Hears Oral Argument in EBay v. MercExchange

"Based upon the limited comments of the chief justice and Justice Scalia, I'm now expecting there will be little if any change to the injunctive relief law," Hal Wegner reportedly told Reuters news service after the oral arguments in eBay v. MercExchange at the U.S. Supreme Court.

The question argued before the Court on March 29, 2006 was "Whether the Federal Circuit erred in setting forth a general rule in patent cases that a district court must, absent exceptional circumstances, issue a permanent injunction after a finding of infringement."

"We're talking about a property right here," Justice Antonin Scalia was reported by Associated Press as saying during the hearing. "All he's asking for is `give me my property back.'"

According to Wegner, one of the strongest arguments for the petitioner – that a non-practicing patentee may be using the threat of injunctive relief only to get high royalties – was turned on its head by the Chief Justice who pondered why the individual inventor should not have this benefit: The sole inventor needs the patent and the threat of injunctive relief for necessary leverage. When told that MercExchange hadn't used its patent for online auctions, Chief Justice Roberts reportedly asked "Is that an appropriate consideration to take into account? Isn't that just saying that the [invention] is going on in a garage?"

However, not all of the Justices appeared to be in the same camp. "Is the troll the scary thing under the bridge," reportedly asked Justice Anthony M. Kennedy, "or is it a fishing technique?"

"Everybody's in this for money,'' concluded said Justice Antonin Scalia. "Why can't we let the market take care of the problem?''

EBay shares closed up 53 cents, or 1.37 percent, to $39.32 for the day on Nasdaq.

WIPO Trademark Law Treaty Updated

A new international treaty on trademarks, to be known as the Singapore Treaty on the Law of Trademarks in recognition of the country that hosted the final round of negotiations, was adopted on March 28, 2006 by member states of the World Intellectual Property Organization (WIPO). The new treaty concludes efforts by WIPO’s member states to update the 1994 Trademark Law Treaty (TLT) and bring it in line with the technological developments of the past decade.

According to the press release from WIPO, the Singapore Treaty deals mainly with procedural aspects of trademark registration and licensing. It also creates a new Assembly of the contracting parties as a built-in review mechanism for administrative details of a less order. In a nod to the current North-South divide on international IP issues, the press release also noted that

During negotiations some developing and least developed states expressed concern
about their ability to fully benefit from the Treaty. These discussions resulted
in a firm commitment by industrialized countries to provide adequate technical
assistance and other forms of support to strengthen the institutional capacity
of those countries to enable them to take full advantage of the Treaty.

The Basic Proposal for a Revised Trademark Law Treaty is available here.

The Basic Proposal for the Regulations under the Revised Trademark Law Treaty is available here.

Other meeting dosuments are available here.

Free PCT Publication Alerts

Thanks to the Invent Blog for pointing to PCT Alerts, "a free e-mail alerts service for people wanting to keep watch on publication of PCT Patents! Upon registering, you will receive an email alert as soon as the requested PCT Patent is published by WIPO (World Intellectual Property Organization)."

USCO Proposes Fee Increases

The U.S. Copyright Office of the Library of Congress has proposed new fees for various services in order to recover a significant part of the costs of those services and provide full cost recovery for many services which benefit only or primarily the user of that service. Comments must be made in writing by April 27, 2006.

In fiscal year 2005, the Copyright Office collected $23,788,227 in fees, sufficient to offset only 56.7% of the total expenditures of the Office, whereas in 2002, fees covered just over 66% of the Office's costs for providing its services. The proposed discretionary fees have therefore been adjusted to more-closely reflect the current cost of providing various services. For example, search fees will jump from $65 to $125 per hour, fees for recordation of license agreements will increase from $50 to $125, and fees for location of Copyright Office records will increase from $80-$100 to $150 per hour.

The Notice of Proposed Rulemaking also provides further clarification for the following fee changes:

1. Registration of GATT Group. The Copyright Office has decided to eliminate the option of registering up to ten related, restored works published within the same calendar year as a GATT/Group. This service is seldom used and it is costly to the Office. Consequently, GATT/Group has been listed as discontinued. However, works that would have been filed under this provision can still be registered, although each work must be registered individually.
2. Recordation of Notices of Intent to Enforce (NIE's). With the enactment of section 104A of the copyright law in 1993, the Copyright Office was given the responsibility of recording documents known as Notices of Intent to Enforce copyrights restored under the Uruguay Round Agreements Act. Because the term of eligibility for filing NIE's has concluded for most countries, this is now a seldom used service. The Copyright Office has decided to apply the same fees to NIE's as are applicable to other recorded documents.
3. Search estimate by the Reference & Bibliography Section. Currently, the Reference & Bibliography Section provides a free written estimate of the number of hours which will likely be needed to complete a search and report and an estimate of the fee to conduct this search. But in order to arrive at the estimate, the Reference and Bibliography Section actually performs a major part of the search; and if the client requesting the estimate decides not to order the search, the Office receives no fee to cover its cost of providing the estimate. Consequently, the Office will no longer provide free estimates under the new fee schedule. Instead, as with other services that are primarily for the benefit of the user, the Copyright Office is setting the fee at a level to recover its cost for the service provided. The fee to prepare a written estimate will now be $100. If the client requests that the search and report be undertaken, the $100 fee will be applied to the total fee charged.
4. Handling fee for extra deposit copy for certification. For claimants who wish to obtain certified copies of their deposits after issuance of the certificate of registration, the Copyright Office will accept an extra deposit copy to be certified upon registration of the claim. The current fee for this service is the same as the fee for the basic registration and it has been adjusted under the new schedule to the same level as the basic registration fee.
5. Expedited Reference & Bibliography Search and Report. The Copyright Office is adopting an hourly fee for providing a written search report based on an expedited search of the Copyright Office records. This fee replaces the current hourly fee and surcharge now used to cover the costs of these services. The new single fee covers both the search and the written report and has been calculated to maintain full cost recovery.
6. Copying fees. Current fees do not recover the costs of providing copies of Copyright Office records or copies of deposits, often exceeding by approximately 50% the amount of fees received by the Office for these services. To eliminate this shortfall, the new fees for various forms of reproductions have been increased by up to 50% and, in the case of photocopying documents, a minimum fee of $6.00 has been added to cover the administrative costs of handling these requests. Moreover, the Office has decided to harmonize the fees for photocopying throughout the Office.

Electronic Renewal of International Trademark Registrations

Starting April 3, 2006, an electronic interface for the renewal of international registrations on-line (“e-renewal”) will be available at http://www.wipo.int/e-marks.

Iinternational registrations are renewable up to six months before the date on which the payment of the renewal fee is due. Users will only need to enter the number of the international registration to be renewed. A screen will then show the name of the holder of that international registration, the name of the representative, if any, and the list of the Contracting Parties for which the international registration can be renewed. After having selected from that list the Contracting Parties for which renewal is sought, the amount of fees to be paid will automatically appear on the screen.

More services related to the Madrid System for the International Registration of Marks are available from the WIPO here.

The JIII Guide to Patent Mapping

Thanks to Douglas Sorocco and J. Matthew Buchanan at The PHOSITA Blog for republishing the Guide Book for Practical Use of "Patent Map for Each Technology Field" from the Invention Research Institute at the Japan Institute of Invention and Innovation. According to the introduction to this 2000 edition,

Current technological development necessitates conducting searches of patent information to avoid unnecessary investment as well as gaining the seeds
for technological development and the applicable fields contained in the patent
information. In order to accomplish this, visual representation of related
patent information (hereinafter “Patent Map”) attracts the attention of the
persons concerned. A patent map is produced by gathering related patent
information of a target technology field, processing, and analyzing it. . . .

On the basis of this awareness, the Japan Patent Office has been producing
and providing patent maps for several technology fields for the purpose of being
of assistance in utilizing patent information in industry since 1997.

The JIII was originally established under the name of "Association for the Protection of industrial Property" on May 5 , 1904 , both by Mr.Keigo Kiyoura , the then Minister of Agriculture and Commerce , and by Mr. Kinya Kume the then Director General of the Patent Office, for the purpose of developing and safeguarding industrial property. In 1947 , the institute changed its name to the " Japan Institute of Invention and Innovation (Hatsumei Kyokai)" and has since 1968 been under the Patron of H.I.H.Prince Hitachi. The Japan Institute of Invention and Innovation endeavors to diffuse and utilize the industrial property system, through its branch offices in 47 prefectures also making efforts to take an active part in diffusing patent information.

On-Line Word Processors and Free Office Suite

Thanks to Tom Mighell at InterAlia (http://www.inter-alia.net) for providing a list and short reviews of the best on-line word processors:

• Writely
• AjaxWrite
• gOFFICE
• ThinkFree Office
• Writeboard
• Zoho Writer

According to Mighell, only Zoho Writer's on-line collaboration comes close to Writely, which has closed new registrations until it can convert over to Google.

If you not already a Writely member, here's my advice while you wait for new
signups to become available: check out the other services and get comfortable
with the idea of using an online word processor -- I really love the convenience
of being able to access a document I'm writing from any computer, at home or at
work. Then use Zoho and experiment with sharing documents with others. Then sign up for Writely when it's back in business -- I think it's currently the best
around.

To download a free office suite, check out OpenOffice.org 2.0.

EU-US Geographical Indications Update

On March 10, 2006, The United States and the European Union signed an agreement on wine-making practices and the labeling of wine. The United States agreed to curb the use of European geographic names such as "chianti" or "burgundy" in return for the EU’s recognition of certain wine-making techniques used by U.S. vintners. The new agreement also provides for mutual recognition of existing current wine-making practices and a consultative process for accepting new wine-making practices. One of the major differences between U.S. and European vintners, for example, is the common use by American winemakers of oak chips to achieve a flavor European wine makers achieve by aging their wines in oak barrels, according to the US Mission to the European Union.

On March 20, 2006, European Agriculture Ministers adopted two regulations on protected designations of origin (PDOs), protected geographical indications (PGIs) and traditional specialities guaranteed (TSGs) for agricultural products at the Farm Council on 20 March. According to a March 20 article in Food Production Daily, the changes were made in a bid to comply with a World Trade Organisation decision that Europe's GI rules served to thwart foreign competition. The main changes include:

• the introduction of a single document for applications containing the name, a brief description of the product, specific rules concerning packaging and labelling, a definition of the geographical area from which comes the agricultural product or foodstuff; and proof of the link between the product and its geographical origin; this single document aims at ensuring key information to be officially published before registration in order to allow any operator to use its right of objection, and the authorities to guarantee protection for the names registered in each Member State. It will also ensure a greater homogeneity and equal treatment for applications; On TSG's, only the restricted product specification shall be transmitted to the Commission;
• the possibility for third countries operators to submit registration application directly through the Commission;
• in order to bring the Community legislation into line, all provisions related to equivalence and reciprocity for products from third countries are deleted in order to allow all names corresponding to geographical areas in third countries to have access to the Community scheme for the protection of GI's; in the same spirit the draft proposal allows third countries as well as Member States or operators to object directly to a registration proposed by groups of producers.

In an OpEd piece for IPFrontline on February 22, 2006, William O. Hennessey, Professor of Law and Chair of Intellectual Property Graduate Programs at Franklin Pierce Law Center, described the essence of the broader dispute between the US and Europe over geographical indications under Article 23.4 of TRIPS, which reads:

"In order to facilitate the protection of geographical indications for wines,
negotiations shall be undertaken in the Council for TRIPS concerning the
establishment of a multilateral system of notification and registration of geographical indications for wines eligible for protection in those Members participating in the system."

According to Hennesy, the "take-it-or-leave-it" text did nothing more than acknowledge the stalemate and kick the question into the future:

The Europeans emphasize the first highlighted phrase ("establishment of a
multilateral system of notification and registration"), while the U.S. and
like-minded states like Canada emphasize the latter ("for protection in those
Members participating in the system."

In essence, the European position is that a registration system similar to the ones in Europe must be mandatory for all WTO Members. The American position is that the plain language of 23.4 means that "Members participating in the system" clearly does not mean "all Members of the WTO"), because if it meant "all Members of the WTO", the words "participating in the system" become superfluous.

In the report of the WTO Secretariat of the Negotiations of the TRIPS Council in early 2003, (Part IV of WTO Document TN/IP/W/7) the Europeans argued that a registration system will be useless if participation is not mandatory. They also suggested that if Article 23.4 means that only some member states will join, the language would have been "plurilateral system" instead of "multilaterial system", to reflect standard GATT/WTO parlance. "It would not have been logical for the negotiators of Article 23.4 to have envisaged a voluntary system," argue the Europeans, "since a voluntary system in WIPO (The Lisbon Agreement) is already in place."

The Americans said, in effect, "Wait a minute. The Lisbon Agreement only has 22 Member states (including France and seven of its former colonies.) The WTO now has 147. Are we to assume we all agreed to sign on to an agreement so few of us ever agreed to in the past?"

Partially Neutralized Acid Does not Infringe Acid Claim?

In Kao Corporation, et al. v. Unilever United States, Inc., et al. (Fed. Cir. March 23, 2006), the court interpreted the claimed "PVM/MA" copolymer for removing blackheads excluded the PVM/MA acid-salt used by Unilever's product, which contained 98% by weight of PVM/MA copolymer and 2% by weight of aminomethyl propanol ("AMP"). Kao argued that 1) Unilever's product in fact uses the PVM/MA acid, and not the salt ; and 2) even if Unilever's product does use the salt, this court's precedent provides that a salt can infringe an acid claim "if the salt provides the same beneficial effect as the acid."

According to the opinion by Circuit Judge Gajarsa:

Kao argues that, contrary to the district court's finding, "Unilever does
not use the salt" form of PVM/MA, but the acid form. It bases this conclusion on
the fact that the addition of 2% AMP to the PVM/MA only slightly neutralizes the
acid, such that "85.5% of the acid groups do not include a salt and only 14.5%
of the acid groups include a salt." It repeats its assertion—unsupported by any
reference to the record or any other authority—that the resulting compound is
only "a slightly neutralized acid and not a salt."

Unilever retorts that "[a]ll of the experts agree that a chemical reaction between PVM/MA and AMP results in the formation of a salt." The record
supports this assertion. Kao offers no response to Unilever's account of the
record testimony beyond a conclusory assertion, unsupported by citation to the
record, that Unilever's account is "not correct." We note also that the relevant
claim limitation reads "copolymer" to mean either form of PVM/MA "but not the
salt form thereof." Kao Corp., 334 F. Supp. 2d at 545. The relevant question is
not whether Unilever's compound is a salt, but whether it is "a salt form of"
PVM/MA. Kao has offered this court no basis on which to conclude that it is
not.

[Footnote:] In addition, we note that subsequent to filing the '382 Patent, Kao filed a separate application "with claims specifically directed to salts of the copolymers claimed in the '382 patent." Kao Corp., 334 F.Supp. 2d at 546. If Kao had intended to claim salt forms of the copolymer in the '382 Patent, the subsequent patent application would have been superfluous.

Kao also argues that, even if the Unilever product uses the salt, it
nevertheless literally infringes the '382 Patent because "the slight
neutralization" effected by the addition of AMP to PVM/MA "has no affect on the
ability of the claimed PVM/MA to remove keratotic plugs." Kao cites this court's
decision in Merck & Co. v. Teva Pharmaceuticals USA, Inc., 347 F.3d 1367
(Fed. Cir. 2003), for the proposition that "a claim that recite[s] an acid" may
be "literally infringed by the salt of the acid" where "both the acid and its
salt functioned similarly." Here, Kao argues, even Unilever does not dispute
that the chemical changes effected by combining PVM/MA with AMP have no effect
at all on the function of the invention, that is, on the ability to remove
keratotic plugs.

Kao's reliance on Merck and a similar case, Stephens v. Tech International, 393 F.3d 1269 (Fed. Cir. 2004), is misplaced. The portions of those cases addressing the acid/salt issue both involve patent claims that were held to include salt forms. Merck, 347 F.3d at 1371-72; Stephens, 393 F.3d at 1274-75. The district court's claim construction in this case expressly excluded the salt form of PVM/MA, rendering Merck and Stephens readily distinguishable on this, among other, grounds.

Kao also relies on our decision in SunTiger, Inc. v. Scientific Research
Funding Group, 189 F.3d 1327 (Fed. Cir. 1999). SunTiger involved a lens patent
and an alleged infringing product that featured, in addition to a lens similar
to the claimed lens, a gray coating over most of the lens that allegedly altered
the light transmission properties of the lens. The district court granted
summary judgment of noninfringement, concluding that the addition of the coating
"changed an inherent property" of the lens and thereby avoided infringement
despite the fact that a portion of the accused product did, in fact, meet all
the patent's claim limitations. Id. at 1336. We reversed, stating that "we have
never required that a claim read on the entirety of an accused device in order
to infringe," and that one cannot "avoid infringement merely by adding elements
if each element recited in the claims is found in the accused device." Id.

Kao analogizes to our ruling in SunTiger, arguing that here, as in that
case, the addition of a novel element—here, the AMP—does "not fully eliminate an
inherent feature of the claim"—here, "the ability of the PVM/MA to remove
keratotic plugs." Kao's analogy is unhelpful. The core principle of SunTiger is
that the failure of some portion of an accused product to meet all the claim
limitations is insufficient to sustain summary judgment of noninfringement where
another portion of the accused product does meet all the claim limitations. That
is not the situation here, where—because the district court did not err in
determining that Unilever's product used a salt, not the claimed acid—no portion
of the accused product meets all the claim limitations. Where, as here, no part
of the accused infringing product meets all the claim limitations of the patent,
the remedy available to the patentholder is an action under the doctrine of equivalents. Kao has not raised a doctrine of equivalents argument, and its literal infringement argument fails.

Circuit Judge Newman, a Chemistry PhD from Yale University, dissented on this point noting that

My colleagues appear to have been taken in by the carefully phrased Unilever
statement that "'[a]ll of the experts agree that a chemical reaction between
PVM/MA and AMP results in the formation of a salt.'" Maj. op. at 16. Of course a
reaction between an acid and a base produces a salt. But a reaction between
14.5% of the acid and matching amount of base produces 14.5% salt, leaving 85.5%
unreacted acid. From my colleagues' inaccurate science, and the conclusion drawn
therefrom, I must, respectfully, dissent.

Bradley W. Crawford at the Patently-O Blog summed up the decision with this note to all of the chemical patent drafters: "If you are claiming compounds that contain acids or bases, you have to disclose and claim the corresponding salts. You just have to."

TGIF for the Patent Model Museum

Working models no larger than 12" by 12" by 12" that showed how an invention works were required to be submitted with all U.S. patent applications between 1790 and 1880. According to Wikipedia, the government's extensive patent model collection was sold in 1925 to Sir Henry Wellcome (the founder of the Burroughs-Wellcome Co.) who had hoped to establish a museum. Although some of those models are now at the Smithsonian Museum,

After his death, the collection went through a number of ownership changes until
a large portion of the collection--along with $1,000,000--was donated to the
nonprofit United States Patent Model Foundation by Cliff Peterson. Rather than
being put into a museum, these models were slowly sold off by the Foundation. A
saga of legal wrangling, purchasing, and re-selling ensued. A comparatively small
number of models (4,000) are currently the property of the Rothschild Patent
Museum.

The Rothschild Petersen Patent Model Museum now claims to be the largest privately-owned collection of United States patent models in the world, containing nearly 4,000 patent models and related documents.

Thank Goodness It's Friday (and some patent models are still for sale?)

--Bill Heinze

Implicit Motivation to Combine Shown by Preponderance of the Evidence

In In re Leonard R. Kahn (Fed. Cir., March 22, 2006) , the court reiterated that a suggestion, teaching, or motivation to combine the relevant prior art teachings does not have to be found explicitly in the prior art:

[T]he teaching, motivation, or suggestion may be implicit from the
prior art as a whole, rather than expressly stated in the references. . . .
The test for an implicit showing is what the combined teachings, knowledge of one of ordinary skill in the art, and the nature of the problem to be solved as a whole would have suggested to those of ordinary skill in the art.

In re Kotzab, 217 F.3d 1365, 1370 (Fed. Cir. 2000) (internal citations
omitted). However, rejections on obviousness grounds cannot be sustained by mere
conclusory statements; instead, there must be some articulated reasoning with
some rational underpinning to support the legal conclusion of obviousness. . . .

In considering motivation in the obviousness analysis, the problem
examined is not the specific problem solved by the invention but the general
problem that confronted the inventor before the invention was made. See, e.g.,
Cross Med. Prods., Inc. v. Medtronic Sofamor Danek, Inc., 424 F.3d 1293, 1323
(Fed. Cir. 2005) ("One of ordinary skill in the art need not see the identical
problem addressed in a prior art reference to be motivated to apply its
teachings."); Ecolochem, Inc. v. S. Cal. Edison Co., 227 F.3d 1361, 1372 (Fed.
Cir. 2000) ("Although the suggestion to combine references may flow from the
nature of the problem, ‘[d]efining the problem in terms of its solution reveals
improper hindsight in the selection of the prior art relevant to obviousness.’"
(internal citation omitted) (quoting Monarch Knitting Mach. Corp. v. Sulzer
Morat GmbH, 139 F.3d 877, 881 (Fed. Cir. 1998))); In re Beattie, 974 F.2d 1309,
1312 (Fed. Cir. 1992) ("[T]he law does not require that the references be
combined for the reasons contemplated by the inventor."); Princeton
Biochemicals, Inc. v. Beckman Coulter, Inc., 411 F.3d 1332, 1337 (Fed. Cir.
2005) (characterizing the relevant inquiry as "[would] an artisan of ordinary
skill in the art at the time of the invention, confronted by the same problems
as the inventor and with no knowledge of the claimed invention,[] have selected
the various elements from the prior art and combined them in the manner
claimed"); see also Graham, 383 U.S. at 35 (characterizing the problem as
involving mechanical closures rather than in terms more specific to the patent
in the context of determining the pertinent prior art). Therefore, the
"motivation-suggestion-teaching" test asks not merely what the references
disclose, but whether a person of ordinary skill in the art, possessed with the
understandings and knowledge reflected in the prior art, and motivated by the
general problem facing the inventor, would have been led to make the combination
recited in the claims. See Cross Med. Prods., 424 F.3d at 1321-24. From this it may be determined whether the overall disclosures, teachings, and suggestions of the prior art, and the level of skill in the art—i.e., the understandings and knowledge of persons having ordinary skill in the art at the time of the
invention—support the legal conclusion of obviousness. See Princeton
Biochemicals, 411 F.3d at 1338 (pointing to evidence supplying detailed analysis
of the prior art and the reasons one of ordinary skill would have possessed the
knowledge and motivation to combine). . . .

[In this case], Khan’s challenge to the sufficiency of the evidence supporting the Board’s prima facie case is directed at the motivation to apply the teachings of Stanton to achieve the claimed invention. In the 1995 decision, the Board found that Stanton "teaches the benefit of acoustic imaging in reading systems." The Board carefully examined the Anderson/Garwin combination and recognized that a skilled artisan confronted with the problem faced by Kahn would have been led by the teaching of Stanton "to add advantageous acoustic imaging" to the Anderson/Garwin combination so that it would have "word positions acoustically and visually indicated."

Stanton teaches that "[its] invention relates to augmentation of vision of those who have lost vision or have had their visual faculties diminished," col. 1, ll. 6-8, that it is "useful in teaching a deprivee to apprehend the position of a virtual sound source as representing a point in space," id., ll. 58-59, and that it may be used as a "rudimentary reading device," id., ll. 61-62. A skilled artisan, who knows of a "learning machine" that is capable of reading a word aloud by selecting the word on the screen at which the user is looking and seeks to provide a visually-impaired user better control over word localization, would have reason to solve that problem by adding two-dimensional sound case, , 283 F.3d 1335, 1338 (Fed. Cir. 2002), we conclude that substantial evidence supports the finding of a motivation to combine the teachings of Stanton to the Anderson/Garwin combination. Although a reasonable person might reach the opposite conclusion, there is far more than a "mere scintilla" of evidence present from which a reasonable mind could find a motivation to combine in view of Stanton’s express teaching that two-dimensional sound can be used to "substitute" for the lost sense of sight, to locate a point in space, and to create a "rudimentary reading device" for the visually impaired. See Cross Med. Prods., 424 F.3d at 1323 (holding that "[o]ne of ordinary skill in the art need not see the identical problem addressed in a prior art reference to be motivated to apply its teachings"). Because the Board need only establish motivation to combine by a preponderance of the evidence to make its prima facie.

We reject Khan’s argument that the Board overstated the knowledge of the person having ordinary skill in the art or employed improper hindsight in making its prima facie case. In both Lee and Rouffet, the Board recognized that the knowledge of the skilled artisan could provide the motivation to combine but concluded that no such knowledge was articulated and placed on the record. Lee, 277 F.3d at 1343-45; Rouffet, 149 F.3d at 1357-59. In this case, motivation to combine was articulated and placed on the record. As to the Anderson/Garwin combination, the Board identified the desire to free up the hands of the Anderson user as the problem confronted and found that Garwin itself evidenced the broad applicability of its optical controls to the claimed invention. As to the addition of Stanton, the Board identified express teachings in Stanton of "the benefit of acoustic imaging in reading systems" and properly related those teachings to the Anderson/Garwin combination.

"Citation Bridge" Patent Citation Tool

Citation Bridge is a free search utility from Metrics Group that lets you look up forward and backward U.S. Patent Citations on an individual patent and search back and forth through citation generations. Here is what the input and output looks like:

Click on the title listed next to each patent number in order to view the title, inventor, assignee, abstract, issue date, and application date. Recenter the output on a new patent by clicking on the patent number.

Clothing Configuration Not Inherently Distinctive

In In re Joanne Slokevage (Fed. Cir. March 21, 2006), the court considered whether the mark shown below is product design and therefore not inherently distinctive:

The application described the mark as a "configuration" that consists of a label with the words "FLASH DARE!" in a V-shaped background, and cut-out areas located on each side of the label. The cut-out areas consist of a hole in a garment and a flap attached to the garment with a closure device.

The trademark examiner initially refused registration of the proposed mark on the ground that it constituted a clothing configuration that is not inherently distinctive. The examiner then afforded Slokevage the opportunity to submit evidence of acquired distinctiveness or to disclaim the design elements of the configuration, but Slokevage chose not to submit evidence of acquired distinctiveness or to disclaim the design elements. Rather, she argued that the trade dress was inherently distinctive. The Board affirmed the examiner's refusal.

According to Circuit Judge Lourie writing for the Federal Circuit,

We agree with the Board that Slokevage’s trade dress constitutes product design and therefore cannot be inherently distinctive. . . .

In order for an applicant to gain protection for trade dress, the trade
dress must be distinctive, either inherently or by acquiring distinctiveness.
Two-Pesos, 505 U.S. at 769. Trade dress is inherently distinctive when its
"intrinsic nature serves to identify a particular source of a product," and, in
contrast, acquires distinctiveness when the public comes to associate the
product with its source. Id. at 768-769. The Supreme Court has determined that
certain types of trade dress, in particular, product design and color, can never
be inherently distinctive. See Mart, 529 U.S. at 212 (product design is not
inherently distinctive).

Directly relevant to our discussion of product design is the Court’s discussion in Wal-Mart. That case addressed whether product design could ever be inherently distinctive and answered the question in the negative. The trade dress in Wal-Mart involved children’s clothing decorated with "hearts, flowers, fruits, and the like." 529 U.S. at 207. The Court labeled that trade dress product design and ultimately concluded that product design is entitled to protection only if it has acquired distinctiveness. Id. at 216. The Court reasoned that "in the case of product design . . . we think consumer predisposition to equate the feature with the source does not exist" and stated that "even the most unusual of product designs—such as a cocktail shaker shaped like a penguin—is intended not to identify the source, but to render the product itself more useful or more appealing." Id. at 213. Thus, the Court established a bright-line rule—product design cannot be inherently distinctive, and always requires proof of acquired distinctiveness to be protected. The Court did not
recite the factors that distinguish between product packaging and product design
trade dress, but stated that in "close cases" courts should classify the trade
dress as product design. Id. at 215.

Both parties agree that if we determine that the trade dress at issue
is product design, then it cannot be inherently distinctive under the decision
in Wal-Mart. The issue pertinent to this appeal, however, is whether Slokevage’s
proposed trade dress is product design. Although the decision in Wal-Mart does
not expressly address the issue of what constitutes product design, it is
informative to this case because it provides examples of trade dress that are
product design. The Court observed that a "cocktail shaker shaped like a
penguin" is product design and that the trade dress at issue in that case, "a
line of spring/summer one-piece seersucker outfits decorated with appliques of
hearts, flowers, fruits, and the like" is product design. Wal-Mart, 529 U.S. at
207, 213. These examples demonstrate that product design can consist of design
features incorporated into a product. Slokevage urges that her trade dress is
not product design because it does not alter the entire product but is more akin
to a label being placed on a garment. We do not agree. The holes and flaps
portion are part of the design of the clothing—the cut-out area is not merely a
design placed on top of a garment, but is a design incorporated into the garment
itself. Moreover, while Slokevage urges that product design trade dress must
implicate the entire product, we do not find support for that proposition. Just
as the product design in Wal-Mart consisted of certain design features featured
on clothing, Slokevage’s trade dress similarly consists of design features,
holes and flaps, featured in clothing, revealing the similarity between the two
types of design.

In addition, the reasoning behind the Supreme Court’s determination
that product design cannot be inherently distinctive is also instructive to our
case. The Court reasoned that, unlike a trademark whose "predominant function"
remains source identification, product design often serves other functions, such
as rendering the "product itself more useful or more appealing." Wal-Mart, 529
U.S. at 212, 213. The design at issue here can serve such utilitarian and
aesthetic functions. For example, consumers may purchase Slokevage’s clothing
for the utilitarian purpose of wearing a garment or because they find the
appearance of the garment particularly desirable. Consistent with the Supreme
Court’s analysis in Wal-Mart, in such cases when the purchase implicates a
utilitarian or aesthetic purpose, rather than a source-identifying function, it
is appropriate to require proof of acquired distinctiveness.

Finally, the Court in Wal-Mart provided guidance on how to address
trade dress cases that may be difficult to classify: "To the extent that there
are close cases, we believe that courts should err on the side of caution and
classify ambiguous trade dress as product design, thereby requiring secondary
meaning." 529 U.S. at 215. Even if this were a close case, therefore, we must
follow that precedent and classify the trade dress as product design. We thus
agree with the Board that Slokevage’s trade dress is product design and
therefore that she must prove acquired distinctiveness in order for her trade
dress mark to be registered.

Although the case involved only an application to register a mark for the overall configuration of the design, the applicant had already received protection for various aspects of the trade dress configuration. For example, she received a design patent for the cut-out area design. She also registered on the Supplemental Register a design mark for the cut-out area. In addition, she registered the word mark “FLASH DARE!” on the Principal Register.

When required to disclaim the holes flaps, the applicant also unsuccessfully tried to argue that the design was unitary. According to the Federal Circuit:

We agree with the PTO that substantial evidence supports the Board’s finding
that the mark is not unitary. The display of elements in the drawing of the
trade dress, the applicant’s earlier registration of the words "FLASH DARE!,"
and the applicant’s design patent on the cut-out area are evidence that
Slokevage’s trade dress is not unitary. Moreover, trade dress, by its nature,
contains distinct elements and is characterized as the combination of various
elements to create an overall impression. While in some cases the elements may
be so combined as to be inseparable, that is not the case here, as shown by the
separate locations of the words and design elements and the separate
registration of the elements.

Free Teleseminar: Ethical Issues in Patent Practice

Thursday, April 06, 2006
1:00 PM EST to 2:00 PM EST

This presentation will address various ethical issues that arise when practicing intellectual property law. Topics will include:

• choice of law;
• patentable subject matter conflicts of interest;
• risks of combining prosecution with other representations;
• the special risks created by the use of patent agents.

Mercer University Law School Professor, David Hricik will address these and related issues during the session. Register here.

More USPTO Customer Partnership Meetings

The USPTO Nanotechnology Partnership Meeting scheduled for Tuesday, March 28, 2006, from 1:00 pm to 5:00 pm, in the Madison Auditorium, North Side, located at 600 Dulany Street, in Alexandria, Virginia. Due to space limitations, please RSVP by e-mail to jill.warden@uspto.gov or by telephone to Jill Warden at (571) 272-1267 to confirm your attendance. If it becomes necessary to restrict the number of attendees, we will do so on a first come-first served basis.

The USPTO Spring 2006 Business Methods Partnership meeting will be held on Wednesday May 3, 2006,1:00 P.M.-5:00 P.M.at the USPTO MADISON AUDITORIUM, Concourse Level, Madison Building, 600 Dulany Street, Alexandria, VA 22313. Thhe meeting will be hosted by the director and managers of the Business Methods workgroup and provide an opportunity for an informal discussion on topics such as hoteling, functional/non-functional descriptive material, new 101 guidelines, and other topics specific to business methods. Requests for attendance at the partnership meeting should be submitted to the attention of Joe Thomas via facsimile at (571) 273-6776, or by electronic mail through the Internet to Joseph Thomas. Requests for attendance must include the attendee's name, affiliation, title, mailing address, and telephone number. Facsimile number and Internet mail address, if available, should also be provided. Requests must be received by April 19, 2006.

The USPTO's Customer Partnership initiative is designed and developed to be a forum to share ideas, experiences, and insights between individual users and the USPTO. The USPTO does not intend to use these customer partnership groups to arrive at a group consensus. Individual opinions are sought from varying participants, and the meetings are intended to be informal in nature. These customer partnership groups are formed with full recognition of the USPTO’s responsibility under the Federal Advisory Committee Act (FACA), and are not established as FACA compliant committees.

A Lesson in Product Configuration Protection

The Shape Blog has provided a short summary of the intellectual property rights sought for Lance Armstrong's LIVESTRONG campaign bracelets and related goods, here.

China Releases IPR Action Plan for 2006

On March 14, 2006, the Chinese State Intellectual Property Office released an English language translation of "China’s plan on IPR Protection Action 2006." Among other things the plan includes eight "large-scale centralized propagandizing activities:"

1. To hold Exhibition on Achievement of China’s Intellectual Property Right Protection during 20th to 27th April at Beijing Military Museum.
2. To cooperate with concerned departments to launch the campaign of Propaganda Week for Intellectual Property Right Protection during 20th to 26th April. ??
3. To organize overseas media reporters to interview our performance on intellectual property right protection. ??
4. The public security department will take in the form of holding press conference, centralized destroying pirates publication and goods to go on large-scale propaganda positively in April and August. ??
5. To launch the campaign of 8th Audio and Video Market Legal Propaganda national widely in the last ten days of April. ??
6. To organize central news media to research and interview deeply at local and enterprises, to propagandize some typical samples who rely on their own independent intellectual property right and some typical cases of IPR protection. ??
7. To research and interview hot topic and focusing issues of intellectual property right, to attract the attention from society, to find out effective settlements, such as concerning non-official inventor, facilitating conversion from patent to technology and elevating IPR awareness amongst young people. ??
8. While preparing for “CCTV 2006 Innovation Ceremony” Awarding Evening, to try launching more campaigns to encourage innovation in order to enhance the impact of IPR system.

New Procedure for Co-Pending U.S. Trademark Applications

On March 17, 2006, the U.S. Patent and Trademark Office announced that it is modifying the First Action System for Trademarks (FAST), to identify and assign co-pending applications electronically. The changes will create a rolling system whereby the same examining attorney will "usually handle all applications filed by the same applicant during a certain window of time." The new system will be implemented in April 2006.

The term “co-pending applications” refers to pending applications filed by the same applicant. If an applicant has multiple pending applications, the issues in the applications may be similar. For example, common issues may arise because the applications have the same or similar identifications of goods, the same or similar marks, or the same or similar specimens of use. Unless an error in the handling of a particular application exists, the Office’s goal is to treat applications filed by the same applicant that present similar issues consistently.

However, if an applicant files a large number of co-pending applications, it may not be practicable for the Office to assign all of the applications to a single examining attorney.
The new system for assigning co-pending applications attempts to balance the sometimes-conflicting goals of ensuring consistency and processing applications in a timely manner.

The following is a summary of the new procedures:

• Ownership search: When assigning a new application to an examining attorney, FAST will determine whether the applicant has any other unassigned pending applications filed during a specified period of time, generally about three months from the application filing date.
• Ten (10) or fewer co-pending applications: If the applicant has ten (10) or fewer unassigned co-pending applications, FAST will assign all of the co-pending applications to the same examining attorney.
• More than ten (10) co-pending applications: If the applicant has more than ten (10) unassigned co-pending applications, the first ten (10) unassigned applications will be assigned to same examining attorney.
• Examination procedure: Because FAST will only assign co-pending applications filed within a certain time period and will only assign a certain number of co-pending applications to a single examining attorney, there will still be times when an applicant has co-pending applications that are assigned to different examining attorneys. In those situations, the examining attorney will be required to follow the procedures for handling co-pending applications set forth in TMEP §702.03 et seq. If the applicant owns unassigned application(s) for the same or similar mark, the examining attorney is encouraged to assign those applications to himself or herself. TMEP §702.03(a)(i).
• Docket management: If an applicant has a large number of co-pending applications, FAST may assign the examining attorney up to nine (9) more applications than the examining attorney requested. If the examining attorney believes he or she will be unable to examine all of the assigned applications within seven (7) days, the examining attorney should request an extension of time from his or her managing or senior attorney.

The policy regarding conflicting applications, namely, two or more pending applications that are filed by different applicants and may ultimately require a refusal of registration under §2(d) of the Trademark Act, has not changed. See TMEP §702.03(b).

Exclusivity "for Now" Insufficient for Standing

In Bicon, Inc, et al. v. The Straumann Company, et al. (Fed. Cir.; March 20, 2006) Bicon unsuccessfully argued that it was as a nonexclusive licensee of the ’731 patent with standing to sue for infringement of the patent. According to the opinion by Circuit Judge Bryson,

The only evidence Bicon cites in support of its contention that its license
was exclusive is the testimony of its president, Dr. Vincent Morgan. Dr. Morgan
testified that Bicon’s right to practice the patent was "exclusive at the
moment," but he promptly explained that Bicon’s right to practice the patent was
"exclusive" only in the sense that Bicon was the only licensee of the Diro
patent at the time ("[I]t’s exclusive because Bicon is the only one doing it
right now."). He added that he was aware of nothing that would prevent Diro
"from licensing [the patent] to someone else under appropriate circumstances."
We conclude that Bicon failed to proffer any evidence that Bicon was an
exclusive licensee with the right to exclude other prospective licensees and in
that capacity had standing to bring suit for infringement of the ’731 patent. We
therefore uphold the district court’s ruling on the standing issue.

Inferential Language Limits Claim to Preamble

In Bicon, Inc, et al. v. The Straumann Company, et al. (Fed Cir.; March 20, 2006) the court concluded that inferential language in the body of Claim 5 of U.S. Pat. No. 5,749,731 (right) for an emergence cuff 30 required the abutment 14 recited in the preamble:

5. An emergence cuff member for use in preserving the interdental papilla during the procedure of placing an abutment on a root member implanted in the alveolar bone of a patient in which
[a] the abutment has a frusto-spherical basal surface portion and
[b] a conical surface portion having a selected height extending therefrom comprising [c] a generally annular member formed of biocompatible synthetic plastic having first and second ends,
[d] a bore extending from the first to the second ends,
[e] the bore having a taper generally matching that of the conical surface portion of the abutment,
[f] the larger end of the bore being at the first end,
[g] the outer surface of the annular member forming a feathered edge with the bore at the first end of the annular member,
[h] the distance between the first and second ends being less than the height of the
conical surface,
[i] the diameter of the cuff member increasing in the direction going from the first end to the second end, and
[j] a radially inwardly extending flexible lip formed at the first end of the cuff member.

The court discussed several reasons why the detailed recitation of the features of the abutment were incompatible with Diro’s theory that the claim concerns only the features of the emergence cuff, and that the references to the abutment merely describe the intended use of the emergence cuff:

First, the requirement that the cooperating abutment have "a frusto-spherical basal surface portion" would have no meaning if the claim were limited to the structure of the emergence cuff. Diro argues that the claim requires only that the emergence cuff "interoperate with an abutment that does contain such an element." But nothing in Diro’s argument suggests how the shape of the basal surface portion of the abutment has any effect on the required structure of the emergence cuff. If there is no such effect, then under Diro’s proposed claim construction the recited "frusto-spherical basal surface portion%2

EFS-Web Resource Links

If you missed the USPTO's web seminar on the new EFS-Web patent filing system, a recording is available by entering your contact information here.

Additional background information is available from Rethink IP's recorded podcast interview of Carl Oppedahl here, along with links to additional information, including

• Carl’s EFS-Web resources: http://www.oppedahl.com/efsweb/
• USPTO Training Schedule: http://www.uspto.gov/ebc/portal/announcements.htm
• USPTO Quick Start Guide: http://www.uspto.gov/ebc/portal/efs/quick-start.pdf
• USPTO About EFS: http://www.uspto.gov/ebc/efs_help.html
• USPTO FAQ: http://www.uspto.gov/ebc/efs_faq.htm
• USPTO Help: http://www.uspto.gov/ebc/efs_help.html
• USPTO EFS-Web Tools Page: http://www.uspto.gov/ebc/portal/tools.htm
• USPTO tutorial on PDF creation for EFS-Web: http://www.uspto.gov/ebc/portal/efs/tutorials_pdf.htm
• USPTO General Rules for Document Indexing: http://www.uspto.gov/ebc/portal/efs/rules_doc_codes.htm
• USPTO Document Descriptions: http://www.uspto.gov/ebc/portal/efs/rules_doc_codes.htm
• USPTO PDF Guidelines: http://www.uspto.gov/ebc/portal/efs/pdf-guidelines.pdf
• USPTO Job Option Codes: http://www.uspto.gov/ebc/portal/efs/uspto.joboptions
• USPTO How to Instal Job Option Codes: http://www.uspto.gov/ebc/portal/efs/joboptions.pdf
• USPTO Fillable Forms for EFS: http://www.uspto.gov/ebc/portal/forms.htm
• USPTO EFS Sandbox - Try Before You File: http://www.uspto.gov/ebc/portal/tutorials.htm
• USPTO EFS Legal Framework: http://www.uspto.gov/ebc/portal/efs/legal.htm
• USPTO Other Tutorials: http://www.uspto.gov/ebc/portal/tutorials.htm
• USPTO Other Tools: http://www.uspto.gov/ebc/portal/tools.htm
• USPTO Training Schedule: http://www.uspto.gov/ebc/portal/announcements.htm

Another Free Patent Downloading Service

Thanks to Stephen Nipper at the Invent Blog for pointing to PatentReader, the free, US-only, patent downloading site that allows you to download multiple patent numbers at one time. The site also provides full-text searching in inventor, assignee, and clssification codes.

Check out the latest patent downloading services in Nipper's Guide to All the ways to Download Patent Copies.

Free USPTO Design Day Seminar

USPTO Design Day
United States Patent and Trademark Office
Madison Building Auditorium (South)
April 10, 2006
8:00 AM – 4:30 PM

An open forum with USPTO officials on the state of the Design Examination Group, including a discussion on New Examining training, publication, and electronic filing. The afternoon session will include a dynamic and informative exchange designed to educate the patent bar and design patent examiners on the design patent process and the unique role that design patents play across a range of industry sectors.

Registration and information here, courtesy of the AIPLA, and open to non-members.

China Launches I/P Piracy Court

According to a March 13, 2006 report by Dean Visser of The Associated Press, China has created a special court to prosecute product piracy cases, a government spokesman said Friday, amid demands for Beijing to step up action against rampant illegal copying of movies, music, software and other goods. Sun Huapu announced the Judicial Court of Intellectual Property at a news conference held during the annual meeting of parliament. He added that China has also created a website to bring unwanted publicity to defendants in high-profile piracy cases

According to Jurist on March 10, 2006, Jiang Zhipei, currently the Chief Justice of the Intellectual Property Rights Tribunal of the Supreme People's Court, also dismissed the complaints of foreigners critical of China's intellectual property safeguards, noting that it was their responsibility to bring cases to court, yet only 5 percent of all Chinese IP cases last year were brought by foreign companies.

American Inventor a Television Ratings Success

"American Inventor" was a Thursday night television ratings win this week for for ABC in the 18-49 demographic. The show, created by Simon Cowell and the producers of American Idol,
features four judges who, over nine weeks, will pare a field of 50 submissions down to 12 finalists, each of whom will be given $50,000 to develop his or her product. Eventually, four will compete for the $1 million grand prize.

According to a March 17, 2006 review by Laura Tiffany at Entrepeneur.com, this week's show featured the bladder buddy (a huge envelope in which to hide while peeing), the sit-and-shave (self-explanatory), edible snow globes (judges loved it), and a plastic shovel that allows one person to fill a sandbag (safely without the assistance of a second person).

Three video clips from the show are available from ABC here. Pictures of all of the inventions are available from Make Magazine here. Rejects can be seen here. RSVP for an audition, sign up for show updates, and download an application form here.

Stop Counterfeiting in Manufactured Goods Law Enacted

On March 16, 2006, President Bush has signed into law H.R. 32, the Stop Counterfeiting in Manufactured Goods Act. Among other things, the law amends the federal criminal code on trafficking in counterfeit goods and services to include trafficking in labels or similar packaging of any type or nature, with knowledge that a counterfeit mark has been applied to such labels or packaging, the use of which is likely to cause confusion, to cause mistake, or to deceive. Along with restitution to the owner of the mark that was counterfeited, the new law requires forfeiture of any property derived, directly or indirectly, from the proceeds of the violation as well as any property used, or intended to be used in relation to the offense.

USPTO Issues Search Fee Refund Rules

On March 10, 2006, the U.S. Patent and Trademark Office issued rules to implement the provisions for refunding the search fee for applicants who file a written declaration of express abandonment before an examination has been made of the application. The changes in this final rule apply to any patent application filed under 35 U.S.C. 111(a) on or after December 8, 2004, in which a petition under 37 CFR 1.138(d) to expressly abandon the application was filed on or after March 10, 2006.

According to the USPTO's comments,

A petition under § 1.138(d) will be granted [only] if it was filed before
an examination has been made of the application . . . . An ‘‘examination
has been made of the application’’ for purposes of § 1.138(d) once an action
(e.g., restriction or election of species requirement, requirement for
information under § 1.105, first Office action on the merits, notice of
Allowability or allowance, or action under Ex parte Quayle, 1935 Dec. Comm’r
Pat. 11 (1935)) is shown in PALM as having been counted.
For purposes of § 1.138(d), ‘‘before’’ means occurring earlier in time, in that if a petition under § 1.138(d) is filed and an action is counted on the same day, the petition under § 1.138(d) was not filed before an examination has been made of the application. In addition, the date indicated on any certificate of mailing or transmission under § 1.8 will not be taken into account in determining whether a petition under § 1.138(d) was filed before an examination has been made of the application.

The Patent Application Locating and Monitoring (PALM) system maintains computerized contents records of all patent applications and reexamination proceedings. The PALM system will show a status higher than 031 once an action has been counted. If the status of an application as shown in PALM is higher than 031 before or on the day that the petition under § 1.138(d) was filed, the petition under § 1.138(d) will be denied and the search fee and excess claims fee will not be refunded. The Patent Application Information Retrieval (PAIR) system is a system that provides public access to PALM for patents and applications that have been published.

Summary Judgment on Noninfringement without Markman Hearing

In Schoenhaus v. Genesco (Fed. Cir.; March 15, 2006), the court affirmed a summary judgement on noninfringement where the lower court "did not expressly construe orthotic device," in claims 1 and 2 of Patent No. 5,174,052:

1. An orthotic device for preventing hyperpronation of a human foot comprising a
deep rigid heel seat to cup the calcaneus, said heel cup being medially offset
and laterally tilted by a sufficient amount to maintain the calcaneus in approximately 5 degrees of varus . . . .

2. A footwear product having as an element thereof an orthotic device as claimed in claim 1.

There was no Markman hearing by the lower court, and the plaintiffs unsuccessfully urged the appellate court to adopt a claim construction that allowed other parts of the shoe—not just the insert or immovable insert portion—to meet claim limitations. According to Chief Circuit Judge Michel,

We begin our analysis with the usage of the term "orthotic device" in the
patent claims. The term appears in claims 1 and 2 of the patent, and there is a
"presumption that the same terms appearing in different portions of the claims
should be given the same meaning unless it is clear from the specification and
prosecution history that the terms have different meanings at different portions
of the claims." Fin Control Sys. Pty., Ltd. v. OAM, Inc., 265 F.3d 1311, 1318
(Fed. Cir. 2001). Using plaintiffs’ proposed definition of "orthotic device",
claim 1 would cover both an insert alone and a shoe built to have the shape of
the interior of the insert. If the phrase "orthotic device" is interpreted
consistently throughout the patent, then plaintiffs’ proposed definition will
only hold if, substituting either of the two proffered meanings in place of the
phrase "orthotic device", claim 2 makes sense.

Claim 2 specifies "[a] footwear product having as an element thereof an orthotic device as claimed in claim 1." ’052 patent, col. 6, ll. 41-42. Defining "orthotic device" as "insert or immovable insert portion", as suggested by defendants, claim 2 would read: "[a] footwear product having as an element thereof an [insert or immovable
insert portion] as claimed in claim 1." This construction is logical. Defining
"orthotic device" as a "shoe built to have the shape of the interior of the
insert", as suggested by plaintiffs, claim 2 would read: "[a] footwear product
having as an element thereof [a shoe built to have the shape of the interior of
the insert] as claimed in claim 1." Obviously, a "shoe built to have the shape
of the interior of the insert" cannot be considered "an element" of a footwear
product. Thus, the latter definition of "orthotic device" renders claim 2
nonsensical. Accordingly, plaintiffs’ proposed construction cannot be correct.

The appellate court went on to conclude that the "heel seat" of the removable insert or immovable insert portion must itself be "rigid," not rigid only in conjunction with the rear of the upper of the shoe, and not merely semi-rigid.

Here, the patentee’s usage of the phrase "semi-rigid material" in the
specification, when referring to the material to be used in the manufacture of
the orthotic device generally, is insufficient to disclaim the requirement in
claim 1 that the material used to construct the "heel seat" be "rigid".
Moreover, the application’s file history, the other place in which an
inventor may lay out a special definition of a claim term, id., does not contain
any evidence to support the plaintiffs’ proposed alternative definition of
"rigid". When the application that matured into the ’052 patent was submitted,
claim 1 did not include the term "rigid" in reference to the "heel seat". The
Patent and Trademark Office ("PTO") rejected plaintiffs’ application, ruling the
invention would have been obvious in light of certain prior art. The applicants
argued against this rejection, and eventually added certain amendatory language
to claim 1 in an attempt to overcome the rejection. However, the patent examiner
still objected and agreed to issue the ’052 patent only if the plaintiffs would
adopt additional limitations suggested in an Examiner’s Amendment, including the
term "rigid".

Plaintiffs argue that because the patent examiner did not
explain his rationale for requiring the term "rigid" in the Examiner’s
Amendment, the court has no basis from which to infer that the addition of this
term is intended to limit the claimed invention to a "rigid" heel seat. This
argument is unpersuasive. The Examiner Interview Summary Record clearly states
that the plaintiffs "agreed to amend claim 1 as in attached [Examiner’s
Amendment] to overcome the previous rejection." The prosecution history reveals
that claim 1 was rejected in conjunction with claim 6; although claim 6 did not
issue as part of the ’052 patent, it contained language relevant to claim 1 in
that it specified "a deep heel seat to cup the calcaneus . . . the heelcup being
more rigid than the flanges." The examiner originally rejected both claims as
unpatentable in view of an article by Jay, U.S. Patent No. 4,232,457 ("Mosher")
and U.S. Patent No. 4,446,633 ("Scheinhaus"). Mosher discloses a flexible
orthotic insert, and the patent examiner explained that "it is inherent in the
structure of Jay that the heel cup is more rigid than the flanges as claimed".
This alone provides a reasonable basis from which a court could conclude that
the amendment was related to avoiding the prior art.

However, we need not rely on this circumstantial evidence. The Supreme Court,
in discussing a situation where the PTO record did not reveal the reason for a
claim amendment, has stated that "[w]here no explanation is established, . . .
the court should presume that the PTO had a substantial reason related to
patentability for including the limiting element added by amendment."
Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 32-33 (1997). The
Court explained that this presumption "gives proper deference to the role of
claims in defining an invention and providing public notice, and to the primacy
of the PTO in ensuring that the claims allowed cover only subject matter that is
properly patentable in a proffered patent application." Id. at 33-34. If the
additional limitation of rigidity in the Examiner’s Amendment was improper or
unnecessary, plaintiffs should have raised this issue by appeal before the PTO.
They did not.

The patentee, of course, is only entitled to protection of the
claims as issued, not as filed. As this court held in Unique Concepts, Inc. v.
Brown, 939 F.2d 1558, 1562 (Fed. Cir. 1991), where a patent specification
includes a description lacking a feature, but the claim recites that feature,
the language of the claim controls. In that case, the claim excludes the
described embodiment, which is deemed dedicated to the public. Id. at 1562-63.
Even interpreting the specification language to permit semi-rigid material
elsewhere, the language of claim 1 requires that the heel seat portion of the
orthotic device be "rigid". Thus, plaintiff surrendered coverage of orthotic
devices with semi-rigid heel seats. Given plaintiffs’ admission that the heel
seat in the immovable insert portion of the accused shoe is only semi-rigid, the
district court properly granted summary judgment of non-infringement on this
ground.

The district court also held that no material factual dispute existed regarding the limitation "heel cup being medially offset and laterally tilted by a sufficient amount to maintain the calcaneus in approximately 5 degrees of varus". Schoenhaus, 351 F. Supp. 2d at 324. The parties disagree over whether expert testimony offered by the plaintiffs on this point in summary judgment papers is admissible, and whether certain language in the specification allows other parts of the shoe to provide the requisite five degrees of rotation. Because we have determined that the claim limitation requiring a rigid heel seat does not read on the immovable insert portion of the accused shoe, we need not determine whether a material factual dispute exists on these issues.

TGIF for Pi Day

March 14 was the unofficial celebration for Pi Day derived from the common three-digit approximation for the number represented by the greek letter pi = 3.14 (which also happens to be Albert Einstein's birthday).

Math enthusiast around the world stopped to consider the role that the number pi has played in their lives at 1:59 PM (in recognition of the six-digit approximation: 3.14159) by eating pineapple and pies, breaking piñatas, drinking piña Coladas, and watching Pi, the movie.

Ever since computers have calculated ? to billions of decimal places, memorizing pi has become a popular hobby for many people. The current world record is 83431 decimal places, and was set by a Japanese mental health counsellor named Akira Haraguchi in 2005. There are many ways to memorize ?, including the use of "piems," which are poems that represent ? in a way such that the length of each word (in letters) represents a digit. The Cadaeic Cadenza contains the first 3834 digits of ? in this matter.

But don't worry if your "piphilology" is less than three digits. You can still celebrate "Pi Approximation Day" on July 22, or 22/7 in international date format.

Thank Goodness It's Friday (and pi is still tanscendental),

--Bill Heinze