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Archived updates for Saturday, September 29, 2007

Availability of Alternative Process Avoids Double Patenting Based Upon Expired Corresponding Compund Patent

In Takeda v. Dudas (D.D.C. 2007), the district court considered evidence of alternative processes for making a formerly patented compound in order to avoid having to consider the USPTO's novel theory of double patenting between product and process claims where "some or all of the compound claims of an expired compound patent continue to be monopolized by virtue of patent rights in a narrow method patent." According to the Memorandum by Chief Judge Hogan on appeal from the USPTO Board, "Because viable, alternative processes exist to make the products claimed in the '6o6 patent, the Court finds that the '216 patent's process claim is patentably distinct from the '606 patent and therefore holds, as a matter of law, the '216 patent is not invalid on double patenting grounds.
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Request for Workaround Period Might Factor Into Injuction Determination

In Verizon Services Corp., et al. v. Vonage Holdings Corp., et al., all judges agreed that the Introduction and Conclusion accurately state the holding of the case, but not much else. The opinion of the Court was filed "by Circuit Judge DYK, in which Chief Judge MICHEL joins as to the Background and parts I and V of the Discussion; and Circuit Judge GAJARSA joins as to the Background and parts II, III, and IV of the Discussion. Chief Judge MICHEL filed an opinion dissenting-in-part. Circuit Judge GAJARSA filed an opinion concurring-in-part and dissenting-in-part."

According to what appears to be dicta in footnote 12 of the Discussion section of Judge Dyk's opinion of the Court,
One factor that is relevant to the balance of the hardships required by the Supreme Court’s decision in eBay was not considered by the district court, namely whether the district court should have allowed time for Vonage to implement a workaround that would avoid continued infringement of the ’574 and ’711 patents before issuing its injunction. Verizon had a cognizable interest in obtaining an injunction to put an end to infringement of its patents; it did not have a cognizable interest in putting Vonage out of business. However, as Verizon points out, Vonage made no request for a workaround period to the district court, and Vonage has already had several months since the district court’s judgment to implement a workaround.
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USPTO: Even Interference Provocation May Not Be Enough for Additional Continuing Applications

The following was excerpted from the transcript of Foley & Lardner's "Patent Nation (web) Conference" on the USPTO's new claim and continuation limits, featuring USPTO Commissioner Jon W. Dudas and Senior Patent Counsel Robert Bahr, available at http://www.foley.com/news/event_detail.aspx?eventid=1774.


[Stephen B. Maebius:] It may surprise people that for example it’s not an adequate justification if they discover a published application of a competitor and they want to copy claims from that. That may not serve as an adequate justification for filing an extra continuation. Is that correct?

[Bob Bahr, U.S. PTO:] That’s correct that it is not alone adequate; I’m not saying we will always say no. If you have an applicant who has filed continuations, I’m going to say, not very judicisously upfront and thus has run out very quickly because they were going off on single claim application. That applicant is not going to be in a good place to ask for another continuation so you have to look at the whole facts and circumstances of the case before you make a decision that is why I have a difficult time saying that any situation would be a slam dunk.

[Stephen B. Maebius:]Understood. Somebody tries to copy the claims from this newly discovered application in their immediately pending case and depending on what stage of prosecution it is at, the examiner may or may not entertain that at time to copy claims, depending on the circumstances could lead to a suggested restriction and perhaps permitted divisional or perhaps the examiner’s refusal to enter would give rise to an opportunity to file a continuation beyond the limit.

[Bob Bahr, U.S. PTO:] You have hit a good point, I think the thing we would like to see first is the applicant trying to get it in a pending case and see what the office does with that.



[Stephen B. Maebius:] Bob final question here for you relating to the ids rules and I think people are wondering what is going on with the ids rules and can you tell us anything about when they might publish?

[Bob Bahr, U.S. PTO:] Well the only thing I can say about the final IDS rules is that the office submitted a draft final ids rule to OMB for their review July 27th OMB has up to 90 days to review it, they can extend it but they rarely do, so 90 days is near the end of October where their review should be concluded. I expect that it is not going to be concluded early but though probably the end of October we will get some feed back from OMB and so if all goes as expected something would happen a few weeks after that. Also, I think another question that comes up a lot is the KSR guidelines. They are also under review by OMB however since OMB only recently began reviewing things other than rule makings, I don’t know what their timeframe is on that and a lot of people have been asking when are we going to get KSR guidelines published. Draft KSR guidelines are also under review by OMB at this time.
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Assessing the Impact of Seagate on Patent Prosecution and Enforcement

Bill Heinze, Peter Sullivan, and Allison Tucher conferred with Bob Ambrogi on September 6, 2007, for a discussion of the significance and impact of the August 20, 2007 en banc decision of the Federal Circuit Court of Appeals, In re Seagate Technology.

A transcript of their diverse views on the importance of the opinion for patent prosecutors and litigators is now available courtesy of IMS ExpertServices in the free "Bullseye" newsletter on experts and the law. Subscribe here.

TOLL FREE: 877.838.8464


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A (Nonprecedential) Lesson on the Pitfalls of Means-Plus-Function Claiming

In Maurice Mitchel Innovation v. Intel Corp., (September 24, 2007, nonprecedential), the Federal Circuit affirmed that the district court correctly construed the claim term "means for causing" as a means-plus-function limitation under 35 U.S.C. § 112, ¶ 6 and correctly found the specification did not contain any corresponding structure.

Professor Wegner calls the decision "an important case to teach patent draftspersons the importance of avoiding 'means' claiming." But perhaps a different lesson could be learned on the importance of tightly drafting such means limitaions, and/or on whether the law should require such a high level of specificity in linking disclosed structure to these limitations. Should a sloppy means-plus-function limitation should invalidate an entire claim where a simple "black box" disclosure and switch ("structure-is-function") limitation would have probably saved the day? Regardless of the scope of disclosure, shouldn't means-plus-function language actually be broader, and more functional, than the "structure-is-function" category of devices with implied structure that is loosely understood by those of ordinary skill. Cf "Structure, Function and the Spectrum of Patent Claiming," page 7, columns 3 and 4 (showing the current perverse state of the law).

The case involved Claim 1 of U.S. Patent No. 4,875,154 (above, issued in 1989, ten years before Amtel v. Info Storage Devices cited below):

A microcomputer data processing apparatus, comprising:

[1] a Central Processing Unit (CPU) . . .

[9] first switch means comprised of at least three distinct parts of connecting said dedicated memory address, data, and control circuits of said path configuring means to each of said first three sets of contacts, and

[10] second switch means for connecting said dedicated memory address, data, and control lines of said path configuring means to said dedicated memory address, data, and control lines of said CPU respectively . . .

[13] means for causing said first and second switch means to remain in said non signal-conducting state upon application of power to said CPU power circuit and to assume a signal-conductive state upon receipt of an appropriate signal from said CPU, and to

[14] assume a non signal-conducting state upon receipt of an appropriate signal from said CPU.

According to the opinion by Circuit Judge Rader:

Mitchell appears to be arguing that a person of ordinary skill in the art would be able to ascertain the corresponding structure by combining a variety of passages in the specification with their knowledge of the art. However, "in order for a claim to meet the particularity requirement of ¶ 2, the corresponding structure(s) of a means-plus-function limitation must be disclosed in the written description in such a manner that one skilled in the art will know and understand what structure corresponds to the means limitation." Atmel Corp. v. Info. Storage Devices, Inc., 198 F.3d 1374, 1382 (Fed. Cir. 1999). Thus, the statute requires more than just the possibility that an artisan of ordinary skill may be able to figure out the corresponding structure. The quid pro quo for using a meansplus-function limitation requires specificity in reciting structure and linking that structure to the limitation. Id. Mitchell does not carry out its part of the quid pro quo bargain. This court sustains the finding that claim 1 is indefinite under U.S.C. § 112, ¶ 2.

This court need not reach the "switch means" and "path configuring means" limitations because the district court's decision can be affirmed solely on the "means for causing" limitation.
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USPTO Posts Draft Form SB206 for Commonly-Owned Patent Applications

According to Dennis Crouch at Patently-O, the USPTO recently made public its draft form SB206 for listing commonly owned applications and patents under the new rule 78(f) that takes effect on November 1, 2007.

. . . now, if only they would add a section to the IDS reference listing Form SB08A EFS-WEB for related subject matter applications that are not necessarily covered by rule 78(f), in order to allow applicants to (list in PAIR and) more-easily comply with Akron Polymer Container Corp. v. Exxel Container, Inc. (Fed. Cir. 1998), and perhaps even include other additional information in order to comply with McKesson Information Solutions v. Bridge Medical (May 18, 2007).
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Infringement Warning Letters to Customers Not Enjoinable Unless Objectively Baseless

In GP Inductries, Inc., et al. v. Eran Industries, Inc., et al. (September 2o, 2007), the Federal Circuit reversed an injunction against a patentee to refrain from communicating information in [earlier] correspondence to its customers, distributors, contractors and others during the pendency of this litigation."

Eran, through counsel, sent two sets of letters to its distributors and contractors informing them that GPI planned to manufacture and sell a gutter cover that infringed it's patent. The first set of letter stated in pertinent part:

It has come to our attention that GP Industries is planning to manufacture and
sell a gutter cover that is similar to our client’s proprietary gutter cover designs. . . . We obtained a sample of GP Industries’ gutter cover and believe that it infringes at least our client’s ’891 patent and possibly other Eran patents. . . . Eran has spent a considerable amount of time and money developing and protecting its proprietary gutter cover designs and will take all necessary steps to stop the infringement by GP Industries and anyone who purchases infringing gutter cover products from GP Industries. Eran plans to focus its enforcement efforts against GP Industries and currently has no plans to sue any distributors or customers who cooperate with its efforts to stop GP Industries’ infringement.

The second set of letters stated in pertinent part:
It has been brought to our attention that your company is selling and offering
for sale the Leaf-X and/or Leafree products of GP Industries. Those products
infringe Eran Industries’ patent rights and are based on a trade secret drawing
of a product design that was unlawfully stolen from Eran Industries. . . . The
theft of Eran Industries’ trade secrets and the distribution and sale of the
Leaf-X and Leafree products that incorporate those trade secrets constitute mail
fraud, interstate transportation of stolen property, and other criminal
activity. In addition, those unlawful activities constitute a pattern of
racketeering activity that is a violation of the Racketeer Influenced and
Corrupt Organizations (RICO) Act. . . . [T]his letter is intended to place you
on notice that Eran Industries will consider naming your company as an
additional defendant unless you either demonstrate that your company is not
selling or offering for sale the Leaf-X and Leafree products or agrees to
promptly forever cease selling or offering for sale those products.

After the letters were sent, the district court entered the following injunction: "Eran Industries and James Buchanan are ordered to refrain from communicating information such as that contained in its January 31, 2006 and May 10, 2006, correspondence to its customers, distributors, contractors and others during the pendency of this litigation."

According to the opinion by Circuit Judge Lourie,

First, we wish to note the rarity of an injunction being granted against communicating with others concerning one’s patent rights. This is not a grant or denial of an injunction against infringement, but an injunction against communication, a much more serious matter. One has a right to inform others of his or her patent rights. See 35 U.S.C. § 287. Thus, an injunction against communication is strong medicine that must be used with care and only in exceptional circumstances.

In this case we agree with Eran that the district court abused its discretion in granting the preliminary injunction against Eran’s communicating with customers and potential customers about its patent rights. While we recognize that a district court’s discretion to enter a preliminary injunction is entitled to a high standard of deference, the patent laws permit a patentee to inform a potential infringer of the existence of its patent. See, e.g., 35 U.S.C. § 287 (authorizing a patentee to "give notice to the public" of a patent) . . . .

GPI’s claim for tortious interference with business relationships is based on the letters sent to Eran’s distributors and customers, wherein Eran gave notice of its patent rights and its intent to enforce them. Federal patent law governs the propriety of giving such notice, and a patentee has a right to inform potential infringers of a patent and potentially infringing activity unless the communication is made in bad faith. . . .

In Mikohn Gaming, we stated that "bad faith" may include subjective and objective considerations. Id. at 897. We have recently determined that a bad faith standard cannot be satisfied in the absence of a showing that the claims asserted were objectively baseless. Globetrotter Software, 362 F.3d at 1375. . . .

Thus, as part of the district court’s analysis in deciding whether to grant a preliminary injunction that would prevent Eran from communicating its patent
rights to a potential infringer, the court should have considered whether Eran’s assertions were objectively baseless. The court did not cite the Professional Real Estate "objectively baseless" standard in its discussion of the relevant law or analysis. In fact, the court made certain statements in its opinion that nonetheless demonstrate that Eran’s assertions were not objectively baseless. The court stated that "[a]t this stage of the proceedings, it cannot be said that either one side or the other will prevail on the ultimate issues." Preliminary Injunction Order, slip op. at 10. The court further stated that "the validity of Eran’s patent presents a close question." Id. at 9. By recognizing that the patent is not necessarily invalid and that the court could not conclude that there was no infringement, the court established that Eran’s assertions were not objectively baseless. In fact, the court only stated that the letters "approach the bad-faith threshold," clearly implying that they did not meet the bad faith standard. Thus, GPI could not show a reasonable likelihood of success that Eran’s assertions were objectively baseless. As we held in Globetrotters, because GPI cannot show that Eran’s assertions were objectively baseless, the bad faith standard cannot be satisfied, and the court therefore erred in enjoining Eran from giving notice of its patent rights to potential infringers.

The district court, as indicated, did state that Eran’s communications "approach the bad-faith threshold" and stated that "Eran’s accusations were made in disregard of the truth or falsity of the purported infringement." Preliminary Injunction Order, slip op. at 8-9. However, the court’s analysis of bad faith encompassed subjective considerations and unconvincing objective factors. Subjective considerations of bad faith are irrelevant if the assertions are not objectively baseless. See Professional Real Estate, 508 U.S. at 60 ("Only if the challenged litigation is objectively meritless may a court examine the litigant’s subjective motivation.") For example, the court found that Eran did not show that its president examined any product sold or distributed by GPI and failed to verify that the prototype it did examine was the actual product sold.

The court also stated that Eran did not "show that any expert advice or opinions
were sought before Eran made the accusations of infringement" and found significant "that Eran never asserted a patent infringement claim against the manufacturers of other similar gutter covers." These are not convincing objective factors, as the president of a company does not necessarily need to examine an accused product or seek expert advice on a product as uncomplicated as a gutter cover. Furthermore, the court stated that the letters sent by Eran were "particularly scurrilous, accusatory and threatening" and "the timing of the action vis-à-vis the termination of the former employees invites an inference of retaliatory motive." We do not consider the letters to be scurrilous. Moreover, one is entitled to threaten suit if not in bad faith and not objectively baseless.

In sum, even though the court did not consider the objectively baseless standard in its discussion of bad faith, the additional statements made in the opinion indicate that Eran’s assertions were not objectively baseless; the grant of the preliminary injunction was therefore improper.

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Duty to Disclose References, Grounds of Rejection, and Allowance of Related Subject Matter Applications

Much fuss is currently being made about the USPTO's new rules that will require applicants to identify commonly-owned applications with a common inventor that are filed within two months of each other. However, those requirements are only the tip of the iceburg when it comes to disclosure requirements for applications having related subject matter.

For example, in McKesson Information Solutions v. Bridge Medical (May 18, 2007), the Federal Circuit held all claims in a patent to be unenforceable for inequitable conduct where three items of information were not disclosed. Two of those items invloved information from a related subject matter application that was not part of the same patent family.

The first item at issue in the case was a prior art patent, cited by another Examiner in a related subject matter but non-family application, where the reference appeared to contradict the applicant's arguments in favor of patentability. The applicant notified the examiner about the application, but the references cited in the other application were not disclosed.

The Court rejected counsel's reliance on Federal Circuit precedent - specifically, Akron Polymer Container Corp. v. Exxel Container, Inc. (Fed. Cir. 1998) - that disclosure of the existence of the application being examined by the other Examiner was sufficient to discharge counsel's Rule 56 duty of disclosure:

We agree with McKesson's assertion that Akron Polymer earns it some credit for
the fact that Schumann did disclose the co-pendency of the '149 application to
Examiner Trafton in the assessment of the overall inferences to be drawn from
all the facts in the case. The district court did in fact credit McKesson with "some evidence of a lack of intent to deceive under Akron Polymer." Findings and conclusions, slip op. at 44; see also id., slip op. at 48 (giving Schumann
credit for disclosing the co-pendency of the application that issued as the '372
patent). But the district court weighed all the evidence, as discussed above in
this opinion, and held that the favorable inference drawn from disclosure of the
second application "does not overcome the inference of an intent to deceive
established by the [other] facts." Id., slip op. at 44.


The attorney also did not inform the Examiner about the grounds of rejection of "substantially-similar" claims in the related subject matter, nonfamily application before the other Examiner:

Under Dayco, that [materiality] standard is satisfied in the rejected-claims setting if the rejected claims are substantially similar to the claims at issue. 329 F.3d at 1368. In other words, a showing of substantial similarity is sufficient to prove materiality. It does not necessarily follow, however, that a showing of substantial similarity is necessary to prove materiality. Indeed, in the same way that prior art need not be substantially similar in order to be material (e.g., the telephone system of Baker, though not substantially similar to the '716 claims, is nevertheless material), rejected claims in a co-pending application also need not be substantially similar in order to be material. Therefore, to the extent there is a difference among "in some respects identical," "substantially similar," and substantial similarity "in content and scope," that difference is inconsequential so long as the evidence clearly and convincingly proves materiality in one of the accepted ways. See Digital Control, 437 F.3d at 1316. Here, the district court found under the accepted "reasonable examiner" standard that Examiner Lev's rejection of certain '149 claims was in fact material to the prosecution of the '278 application before Examiner Trafton. Our role on appeal is to determine whether that finding is clearly erroneous.

The third and final item of undisclosed material information was the allowance of the CIP application by the same Examiner that "gives rise to a conceivable double patenting rejection:"

Another perceived error pointed to by McKesson is the district court's alleged failure to consider the fact that Examiner Trafton was the examiner who allowed the '372 claims, and that he did so within a few months of allowing the '716
claims. It is unclear whether McKesson is arguing that this alleged failure
undermines the district court's finding of materiality or its finding of intent.
Compare Appellant's Br. at 48 (materiality), with Appellant's Reply Br. at 30-31
(intent). If this argument goes to materiality, it must fail because, as stated
above, the allowance of the '372 claims is material. The most McKesson can argue is that the allowance is cumulative by virtue of the fact that Examiner Trafton, as the '278 examiner, probably remembered allowing the '372 claims and then realized the materiality of such allowance to the '278 application claims. However, because the record is devoid of any evidence in this regard, we cannot conclude that the allowance is cumulative. J.P. Stevens & Co. v. Lex Tex, Ltd., 747 F.2d 1553, 1564 (Fed. Cir. 1984) ("[T]he district court did not find actual knowledge by the primary examiner—it merely noted possibilities and, where inequitable conduct is at issue, mere possibilities are insufficient.") (emphasis in original). Moreover, the MPEP at the time explained that a prosecuting attorney should not "assume that [a PTO examiner] retains details of every pending file in his mind when he is reviewing a particular application," MPEP § 2001.06(b) (5th ed. rev. 3, 1986) (quoting Armour & Co. v. Swift & Co., 466 F.2d 767, 779 (7th Cir. 1972)), and PTO regulations required all disclosures to be in writing, 37 C.F.R. § 1.2; see also MPEP § 2002.02 (5th ed. rev. 3, 1986). Schumann thus was not entitled to assume that Examiner Trafton would recall his decision to grant the claims of the '372 patent when he was examining the '278 application in the absence of a written disclosure to that effect. If, on the other hand, McKesson makes this argument to undermine intent, the argument fails as a factual matter because Schumann specifically testified that he did not consider the identity of the examiner in deciding whether to disclose information about co-pending applications.

As noted by Kevin E. Noonan of Patent Docs,

The real mischief arises in the Federal Circuit's affirmance of the principle that not only the existence but the course of prosecution of related applications should be disclosed to Examiners during prosecution. The institution of the Patent Application Information Retrieval (PAIR) system makes it easier in practice to make note of developments in related cases. However, the Federal Circuit's decision is properly understood to impose the additional requirement that an applicant (or her counsel) take affirmative steps to bring such parallel prosecution to the attention of each examiner in related applications. Even more burdensome is the requirement that an applicant remind an examiner of actions taken by that same examiner in related applications, with the concomitant proscription against assuming that the Examiner is aware of the relationships between the applications, even when said relationships have been explicitly made on the record. This kind of handholding by applicants of Examiners appears unrealistic and unnecessary, in view of the supposed presumption that an Examiner has done his or her job properly. Announcing a new requirement that applicants take affirmative steps to ensure that Examiners are aware of their actions is incompatible with this presumption.

Although the views of only one panel (and a divided one at that), this case should increase the patent bar's apprehension regarding the Federal Circuit's grasp of its role in bringing consistency to U.S. patent law, and its capacity to come to an agreement not only within particular panels but with its own precedent. The inconsistency illustrated in the McKesson case can do nothing but make even more uncertain the value of U.S. patents, a result diametrically opposed to Congressional intent in establishing the Federal Circuit.

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US PCT National Stage Fees Increase on September 30, 2007

US PCT National Stage fee will increase to reflect fluctuations in the Consumer Price Index (CPI) on September 30, 2007. Use the revised National Stage Transmittal Letter (form PTO-1390) to reflect the increase.

The revised PCT Fee Schedule will be posted at: (http://www.uspto.gov/web/offices/pac/dapps/pct/fees.htm).

The revised national stage Transmittal Letter (form PTO-1390) will be posted at: (http://www.uspto.gov/web/offices/pac/dapps/pct/files/natstg/pto-1390.pdf).

The revised, comprehensive USPTO Fee Schedule is available at
http://www.uspto.gov/web/offices/ac/qs/ope/fee2007september30.htm
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WIPO Offers Free On-Line IP Training Modules for Business People

IP PANORAMA,” an advanced e-learning tool on intellectual property (IP) for business, is now publicly available in English from the website of the World Intellectual Property Organization (WIPO) at http://www.wipo.int/sme/en/multimedia/.



This article has been substantially redacted in response to
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Inter Partes Reexam Kill Rate Slowly Climbs to 88%

Thanks to The Patent Prospector for pointing out that the recent patent "kill rate" in inter partes patent reexamination is up to 88%.
The PTO recently released reexamination stats through 3Q of the fiscal year
(ending June 2007). . . . Year to date inter partes reexam requests have more than doubled : 90 this year versus 40 last year. Currently, half of the pending inter partes reexams are co-pending with litigation, up from a comparable 26% last year. 96% of requests are granted. Only eight inter partes reexaminations have been completed, but all the claims have been axed in seven of eight.
Under 35 U.S.C. 315(c), a third-party requester is estopped from asserting at a later time, in any civil action, the invalidity of any claim finally determined to be valid and patentable on any ground which the third-party requester raised or could have raised during the inter partes reexamination proceedings. However, this subsection does not prevent the assertion of invalidity based on newly discovered prior art unavailable to the third-party requester and the Patent and Trademark Office at the time of the inter partes reexamination proceedings.

Under 35 U.S.C. 318, once an order for inter partes reexamination of a patent has been issued, the patent owner may obtain a stay of any pending litigation which involves an issue of patentability of any claims of the patent which are the subject of the inter partes reexamination order, unless the court before which such litigation is pending determines that a stay would not serve the interests of justice.
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TGIF "Because it's never too early to learn what's important in life"

Only $32.10 from Atypyk

Thank Goodness It's Friday,
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Archived updates for Thursday, September 20, 2007

TGIF for the Construction Business


(© Stu 2007, get a license here)

Thank Goodness It's Friday,
p.s. - Meet "Bob the Builder" and his gang
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Signal Claims Are Not Patentable Subject Matter

In In re Nuijten (September 20, 2006) the Federal Circuit held that physical but transitory forms of signal transmission such as radio broadcasts, electrical signals through a wire, and light pulses through a fiber-optic cable are not directed to statutory subject matter.

Unlike the various allowed claims, which recited
  • "A method of embedding supplemental data in a signal . . ."

  • "An arrangement for embedding supplemental data in a signal," including "encoder means for encoding the signal," and

  • "A storage medium having stored thereon a signal with embedded supplemental data,"
the rejected claims on appeal sought to cover the resulting encoded signals themselves. Claim 14 of Nuijten’s application was the only independent claim of the four rejected by the PTO. It read:
14. A signal with embedded supplemental data, the signal being encoded in accordance with a given encoding process and selected samples of the signal representing the supplemental data, and at least one of the samples preceding the selected samples is different from the sample corresponding to the given encoding
process.
Claims 22, 23, and 24 depended on Claim 14, respectively adding requirements that the embedded data be a watermark, that the signal be a video signal, and that the signal be an audio signal.
According to the decision by Circuit Judge Gajarsa,

[W]hile the claims are limited so as to require some physical carrier of information, they do not in any way specify what carrier element is to be used. . . . [S]ome physical form for the signal is required, but any form will do, so long as a recipient can understand the message—the nature of the signal’s physical carrier is totally irrelevant to the claims at issue. . . .

The claims on appeal cover transitory electrical and electromagnetic signals propagating through some medium, such as wires, air, or a vacuum. Those types of signals are not encompassed by any of the four enumerated statutory categories: "process, machine, manufacture, or composition of matter."

. . . The presence of acts recited in the claim does not transform a claim covering a thing—the signal itself—into one covering the process by which that thing was made. Since a process claim must cover an act or series of acts and Nuijten’s signal claims do not, the claims are not directed to a process.

. . . A transitory signal made of electrical or electromagnetic variances is not made of "parts" or "devices" in any mechanical sense. While such a signal is physical and real, it does not possess concrete structure in the sense implied by these definitions. No part of the signal—the crests or troughs of the electromagnetic wave, or perhaps the particles that make it up (modern physics teaches that both features are present simultaneously) is a mechanical "device" or "part." A propagating electromagnetic signal is not a "machine" as that term is used in § 101. . . .

The question of whether the claimed signals are "manufactures" is more difficult. They are man-made, in the sense of having been encoded, generated, and transmitted by artificial means. However, artificiality is insufficient by itself to render something a "manufacture." The Supreme Court has defined "manufacture" (in its verb form) as "the production of articles for use from raw or prepared materials by giving to these materials new forms, qualities, properties, or combinations, whether by hand-labor or by machinery." Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980) (emphasis added) (quoting Am. Fruit Growers, Inc. v. Brogdex Co., 283 U.S. 1, 11 (1931)).5 The term is used in the statute in its noun form, Bayer AG v. Housey Pharms., Inc., 340 F.3d 1367, 1373 (Fed. Cir. 2003), and therefore refers to "articles" resulting from the process of manufacture. The same dictionary the Supreme Court relied on for its definition of "manufacture" in turn defines "article" as "a particular substance or commodity: as, an article of merchandise; an article of clothing; salt is a necessary article." Century Dictionary 326 (William Dwight Whitney ed., 1895) (emphasis in original).

These definitions address "articles" of "manufacture" as being tangible articles or commodities. A transient electric or electromagnetic transmission does not fit within that definition. While such a transmission is man-made and physical—it exists in the real world and has tangible causes and effects—it is a change in electric potential that, to be perceived, must be measured at a certain point in space and time by equipment capable of detecting and interpreting the signal. In essence, energy embodying the claimed signal is fleeting and is devoid of any semblance of permanence during transmission.6 Moreover, any tangibility arguably attributed to a signal is embodied in the principle that it is perceptible—e.g., changes in electrical potential can be measured. All signals within the scope of the claim do not themselves comprise some tangible article or commodity.7 This is particularly true when the signal is encoded on an electromagnetic carrier and transmitted through a vacuum—a medium that, by definition, is devoid of matter.8 Thus, we hold that Nuijten’s signals, standing alone, are not "manufacture[s]" under the meaning of that term in §101. . . .

. . . A signal comprising a fluctuation in electric potential or in electromagnetic fields is not a "chemical union," nor a gas, fluid, powder, or solid. Nuijten’s signals are not "composition[s] of matter."

Dissenting Circuit Judge Linn, on the other hand, would have concluded that the claim at issue is directed to a "new and useful" "manufacture."

Claim 14 is directed to a "manufacture" because the signal is, in the broad sense discussed above, an "article," "produc[ed] . . . for use from raw or prepared materials by giving to these materials [a] new form[]." See Chakrabarty, 447 U.S. at 308. Put differently, it is a product of human "art," or ingenuity; it is an application of technology to provoke some purposeful transformation in the real world. Any contrary conclusion must depend on a too-literal reading of either "article" or "material," neither of which appears in the statute, and neither of which any precedent—until today—has imposed as a limitation on the otherwise "expansive" scope of § 101. No matter what form the signal of claim 14 may take, it must involve "some physical carrier of information" that is created or manipulated through human activity, and that physical carrier must function "to convey information to a tecipient"—it must signal. See Majority Op. at 9–10.

Moreover, claim 14 is not directed to an abstract mathematical or scientific principle that fails to qualify as "new" under Funk Bros. and Benson. The claimed signal is artificial in character. The original input signal is "encoded in accordance with a given encoding process," causing it to undergo at least two transformations required by the language of the claim: first, "selected samples of the signal" are made to represent a second stream of "supplemental data"; and second, in order to reduce the impact of the first transformation, "at least one of the samples preceding the selected samples" is made to be "different from the sample corresponding to the given encoding process." These transformations may apply various laws of physics or mathematics, but they cannot be said to be mere representations or principles of them; neither one is a natural or pre-existing way in which two streams of data may combine, for instance. The signal itself is man-made.

The signal is also "useful" in a direct and specific way. The invention is directed to encoding and communicating data, and that is precisely what the signal does. Any information that it conveys is wholly distinct from the invention itself; the signal is an information carrier, not an attempt to claim information itself. Moreover—though my analysis does not rely on this fact—the claim construction that we unanimously adopt today requires that the signal have a physical manifestation that is directly linked to its purpose. Whether a smoke signal, a sound, or a set of encoded and perhaps encrypted bits traveling across a wireless network in the form of radio waves, a signal must be detectable in order to successfully signal anything. No intermediate steps, layers of interpretation, or speculative eventual uses separate the signal from the claimed purpose: simply put, the signal signals.

The correctness of these conclusions is supported also by the Supreme Court’s decision in a surprisingly analogous case from over 150 years ago, O’Reilly v. Morse, 56 U.S. (15 How.) 62 (1853). In Morse, Samuel Morse (of Morse code fame) was allowed a patent "for a process of using electromagnetism to produce distinguishable signs for telegraphy." Benson, 409 U.S. at 68 (discussing Morse, 56 U.S. (15 How.) at 112. As the Court later reiterated in 111). The Supreme Court disallowed Morse’s eighth claim, for the use of "electromagnetism, however developed for marking or printing intelligible characters, signs, or letters, at any distances," as the impermissible patenting of a scientific principle. As the Court later reiterated in The Telephone Cases, however, claims to specific uses of electromagnetism were patentable: "The effect of that decision [Morse] was, therefore, that the use of magnetism as a motive power, without regard to the particular process with which it was connected in the patent, could not be claimed, but that its use in that connection could." 126 U.S. 1, 534 (1888). In particular, the Court permitted Morse’s fifth claim, to the use of telegraphy to convey Morse code: "the system of signs, consisting of dots and spaces, and of dots, spaces, and horizontal lines, for numerals, letters, words, or sentences, substantially as herein set forth and illustrated, for telegraphic purposes." 56 U.S. (15 How.) at 86.

The "system" and constituent "signs" of Morse’s fifth claim are not "tangible articles or commodities." See Majority Op. at 16. Rather, the claim is directed to a signal—a particular way of encoding information so that it can be conveyed (in this case in the form of electrical impulses on a telegraph wire) in a useful manner at a distance. Morse’s signaling system conveyed certain important parts of a message—"numerals, letters, words, or sentences," but not lowercase letters, pictures, sound, etc.—under a particular set of constraints. Nuijten’s signal does the same—it conveys two streams of data, one primary stream and one lower-bandwidth "supplemental" stream—in a manner such that the supplemental stream is conveyed losslessly, and the primary stream is conveyed so as to minimize the effects of lost bits upon certain underlying encodings of data. Both Morse’s signal and Nuijten’s are "new" and "useful," and both are patentable.

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Joint Infringement Requires Direction or Control

In BMC Resouces, Inc. v. Paymentech, L.P. (September 20, 2007), the Federal Circuit held that the proper standard for joint infringement by multiple parties of a single claim is "control or direction" by the infringer, and then went on to note that "concerns over a party avoiding infringement by arms-length cooperation can usually be offset by proper claim drafting."

According to the opinion by Circuit Judge Rader:

Two cases that have found that a party cannot be liable for direct infringement because the party did not perform all the steps are Fromson v. Advance Offset Plate, Inc., 720 F.2d 1565, 1568 (Fed. Cir. 1985) (finding no direct infringement by manufacturer who performed the first step of a process claim even where its customer performed the other step of the claim) and Cross Medical Products, 424 F.3d at 1311 (rejecting patentees’ efforts to combine the acts of surgeons with those of a medical device manufacturer to find direct infringement of an apparatus claim).

Courts faced with a divided infringement theory have also generally refused to find liability where one party did not control or direct each step of the patented process. See BMC Resources, Inc. v. Paymentech, L.P., (N.D. Tex. Feb. 9, 2006) ("No court has ever found direct infringement based on the type of arms-length business transaction presented here."); Faroudja Labs v. Dwin Elecs., Inc., 1999 U.S. Dist. LEXIS 22987 (N.D. Cal. Feb. 24, 1999); Mobil Oil Corp. v Filtrol Corp., 501 F.2d 282, 291-92 (9th Cir. 1974) (expressing doubt over the possibility of divided infringement liability).

A party cannot avoid infringement, however, simply by contracting out steps of a patented process to another entity. In those cases, the party in control would be liable for direct infringement. It would be unfair indeed for the mastermind in such situations to escape liability. District courts in those cases have held a party liable for infringement. See Shields v. Halliburton Co., 493 F. Supp. 1376, 1389 (W.D. La. 1980).

This court acknowledges that the standard requiring control or direction for a finding of joint infringement may in some circumstances allow parties to enter into arms-length agreements to avoid infringement. Nonetheless, this concern does not outweigh concerns over expanding the rules governing direct infringement. For example, expanding the rules governing direct infringement to reach independent conduct of multiple actors would subvert the statutory scheme for indirect infringement. Direct infringement is a strict-liability offense, but it is limited to those who practice each and every element of the claimed invention. By contrast, indirect liability requires evidence of "specific intent" to induce infringement. Another form of indirect infringement, contributory infringement under § 271(c), also requires a mens rea (knowledge) and is limited to sales of components or materials without
substantial noninfringing uses. Under BMC’s proposed approach, a patentee would
rarely, if ever, need to bring a claim for indirect infringement.

The concerns over a party avoiding infringement by arms-length cooperation can usually be offset by proper claim drafting. A patentee can usually structure a claim to capture infringement by a single party. See Mark A. Lemley et al., Divided Infringement Claims, 33 AIPLA Q.J. 255, 272-75 (2005). In this case, for example, BMC could have drafted its claims to focus on one entity. The steps of the claim might have featured references to a single party’s supplying or receiving each element of the claimed process. However, BMC chose instead to have four different parties perform different acts within one claim. BMC correctly notes the difficulty of proving infringement of this claim format. Nonetheless, this court will not unilaterally restructure the claim or the standards for joint infringement to remedy these ill-conceived claims. See Sage Prods. Inc. v. Devon Indus. Inc., 126 F.3d 1420, 1425 (Fed. Cir. 1997) ("[A]s between the patentee who had a clear opportunity to negotiate broader claims but did not do so, and the public at large, it is the patentee who must bear the cost of its failure to seek protection for this foreseeable alteration
of its claimed structure.")

Applying these standards to BMC’s charges against Paymentech properly results in a finding of no infringement. Although BMC proffered evidence to establish some relationship between Paymentech and the debit networks, the magistrate and the district court both concluded that this evidence was insufficient to create a genuine issue of material fact as to whether Paymentech controls or directs the activity of the debit networks. Specifically, the magistrate and district court found BMC’s evidence that Paymentech provides data (debit card number, name, amount of purchase, etc.) to the debit networks, absent any evidence that Paymentech also provides instructions or directions regarding the use of those data, to be inadequate. BMC argues that instructions or directions can be inferred from the provision of these data, or that the data themselves provide instructions or directions. But, having presented no evidence below to support either theory, BMC is not entitled to such an inference with respect to the debit networks that would allow it to survive summary judgment. The evidence before the magistrate and the district court to support direction or control of financial institutions by Paymentech was even scarcer. As the district court observed, the record contained no evidence even of a contractual relationship between Paymentech and the financial institutions.

Without this direction or control of both the debit networks and the financial institutions, Paymentech did not perform or cause to be performed each and every element of the claims. In this situation, neither the financial institutions, the debit networks, nor the payment services provider, Paymentech, bears responsibility for the actions of the other.

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WIPO Director General Under Fire As General Assembly Opens

Item No. 12 on the Draft Agenda for the WIPO General Assembly Meetint starting September 24, 2007, entitled "Internal Audit Report Number IAOD/INV/2006/2 of November 2006, and Appropriate Follow-up Thereto As requested by the United States of America," is reportedly generating quite the controversy in international IP circles over whether WIPO Director General Kamil Idris has lost the confidence of member states for allegedly misrepresenting his age during his tenure at the organization.

William New of Intellectual Property Watch reported that the assembly agenda is in draft form until the meeting when, after the election of officers, the member states vote on it:

Developing countries are generally unenthusiastic about targeting a leader from one of their own, especially in an organisation that handles rights mainly owned by developed countries and that was led for many years by a developed country official before Idris. Several officials said there may be discussions about the vote related to countries’ goals or views outside of WIPO, such as the World Trade Organization or World Bank.

Developed countries such as Switzerland, Japan, Canada, Australia, and several in the European Union apparently support the Idris agenda item, but there are some developed countries, particularly the United Kingdom, that did not push for this approach, perhaps because they see the potential for more harm than good for the organisation in holding such a high-profile discussion, sources said.

Some developing country officials and advocates suggested the Idris age issue could be an unnecessary distraction to the General Assemblies’ more important issues, such as endorsing the Development Agenda.

“I would prefer this matter not contaminate the work of the General Assemblies,” Argentine Ambassador Alberto Dumont told Intellectual Property Watch.

PCT fee levels have also drawn crticisim in light of WIPO's current level of reserves. Although WIPO’s preliminary financial report for 2006-2007 showed a surplus in the tens of millions of Swiss francs, the "Proposal by the United States of America to Reflect a 15% Reduction in the Patent Cooperation Treaty (PCT) International Filing and Handling Fees Effective January 1, 2008" was reportedly noted without action during the earlier meeting of the Program and Budget Committee on September 11-14.
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Antitrust Exposure for Failure to License Standardized Technology on FRAND Terms

In Broadcomm Corp. v. Qualcomm Inc. (Sept. 4, 2007), The U.S. Court of Appeals for the Third circuit held "that (1) in a consensus-oriented private standardsetting environment, (2) a patent holder’s intentionally false promise to license essential proprietary technology on fair, reasonable, and non-discriminatory (“FRAND”) terms, (3) coupled with a standards-determining organization's ("SDO's") reliance on that promise when including the technology in a standard, and (4) the patent holder’s subsequent breach of that promise, is actionable anticompetitive conduct."

According to the opinion by Circuit Judge Barry,
The Complaint alleged that Qualcomm induced the European Telecommunications Standardization Institute ("ETSI") and other SDOs to include its proprietary technology in the UMTS standard by falsely agreeing to abide by the SDOs’ policies on IPRs, but then breached those agreements by licensing its technology on non-FRAND terms. The intentional acquisition of monopoly power through deception of an SDO, Broadcom posits, violates antitrust law.

The Complaint also alleged that Qualcomm ignored its FRAND commitment to the ETSI and other SDOs by demanding discriminatorily higher (i.e., non-FRAND) royalties from competitors and customers using chipsets not manufactured by
Qualcomm. Qualcomm, the Complaint continued, has a 90% share in the market for CDMA-path chipsets, and by withholding favorable pricing in that market, coerced cellular telephone manufacturers to purchase only Qualcomm-manufactured UMTS-path chipsets. These actions are alleged to be part of Qualcomm’s effort to obtain a monopoly in the UMTS chipset market because it views competition in that market as a longterm threat to its existing monopolies in CDMA technology.

. . . we must determine whether Broadcom has stated actionable anticompetitive conduct with allegations that Qualcomm deceived relevant SDOs into adopting the UMTS standard by committing to license its WCDMA technology on FRAND terms and, later, after lock-inoccurred, demanding non-FRAND royalties. As Qualcomm is at pains to point out, no court nor agency has decided this precise question and, in that sense, our decision will break new ground. The authorities we have cited in our lengthy discussion that has preceded this point, however, decidedly favor a finding that Broadcom’s allegations, if accepted as true, describe actionable anticompetitive conduct.
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EU Bilateral Trade Deals Aimed at Global IP Protection

According to David Cronin, writing for Intellectual Property Watch on September 20, 2007, the European Commission's proposed Economic Partnership Agreements with 76 African, Caribbean and Pacific (ACP) will commit all parties to a robust enforcement of IP rights by December 31, 2007:

The Commission’s thinking behind its efforts to have IP provisions in trade deals it reaches with countries outside the EU was outlined in a ‘market access strategy’ published in April. It identified “poor protection” of IP rights as one of the principal barriers to trade encountered by European firms trying to do business abroad.

Paul Goodison from the European Research Office, which monitors trade between the EU and developing countries, . . . believes that the Commission is likely to seek similar provisions in further deals with potentially more lucrative markets, such as India or Brazil. “The ACP countries are the weak underbelly,” he said. “If they sign up to these provisions, then the Commission will be able to say ‘if LDCs [least developed countries] have agreed to these, why should Brazil be worried?’ The Commission has extremely skilled negotiators and they understand this fully.”

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Archived updates for Wednesday, September 19, 2007

A Lesson on the Peculiar Separation of Patent Ownership and Enforcement Rights

In Morrow, et al. v. Microsoft Corporation (September 19, 2007) the Federal Circuit held that GUCLT failed to meet constitutional standing requirements, which limit judicial powers to the resolution of "cases" and "controversies," where a bankruptcy liquidation plan had contractually separated the right to sue from the right to exclude:

  • AHLT (the "Plan Agent" in charge of conducting the administrative wind-down of the company’s business) was given ownership rights in AHC’s intellectual property,
  • BHLT was given rights to causes of actions against AHC’s controlling shareholders, including AT&T Corporation, Comcast Corporation, and Cox Communications,
  • GUCLT received the rights to all other causes of action (called "Estate Litigation"), including claims for misappropriation or infringement of AHC’s intellectual property rights.
According to the opinion by Circuit Judge Moore,

There are three general categories of plaintiffs encountered when analyzing the constitutional standing issue in patent infringement suits: those that can sue in their own name alone; those that can sue as long as the patent owner is joined in the suit; and those that cannot even participate as a party to an infringement suit.

The first category includes plaintiffs that hold all legal rights to the patent as the patentee or assignee of all patent rights—the entire bundle of sticks. Unquestionably, a patentee who holds all the exclusionary rights and suffers constitutional injury in fact from infringement is one entitled to sue for infringement in its own name. . . .

The second category of plaintiffs hold exclusionary rights and interests created by the patent statutes, but not all substantial rights to the patent. . . . Parties that hold the exclusionary rights are often identified as exclusive licensees, because the grant of an exclusive license to make, use, or sell the patented invention carries with it the right to prevent others from practicing the invention However, these exclusionary rights "must be enforced through or in the name of the owner of the patent," and the patentee who transferred these exclusionary interests is usually joined to satisfy prudential standing concerns. Indep. Wireless Tel. Co. v. Radio Corp. of Am., 269 U.S. 459, 467, 469 (1926). The patentee is joined for the purpose of avoiding the potential for multiple litigations and multiple liabilities and recoveries against the same alleged infringer. . . . When the patentee is the infringer, or the prudential concerns are not at play in a particular case, joinder of the patentee is not necessary. This joinder analysis has been incorporated in Federal Rule of Civil Procedure 19. See Fed. R. Civ. P. 19, Advisory Committee Note to Subdivision (a) (1937); Prima Tek II, 222 F.3d at 1377.

The third category of plaintiffs includes those that hold less than all substantial rights to the patent and lack exclusionary rights under the patent statutes to meet the injury in fact requirement. They are not injured by a party that makes, uses, or sells the patented invention because they do not hold the necessary exclusionary rights. Plaintiffs in this category lack constitutional standing. . . . This standing deficiency cannot be cured by adding the patent title owner to the suit. Propat, 473 F.3d at 1189; Intellectual Prop. Dev., 248 F.3d at 1348-49.

. . . The problem for GUCLT and AHLT is that the exclusionary rights have been separated from the right to sue for infringement. The liquidation plan contractually separated the right to sue from the underlying legally protected interests created by the patent statutes—the right to exclude. For any suit that GUCLT brings, its grievance is that the exclusionary interests held by AHLT are being violated. GUCLT is not the party to which the statutes grant judicial relief. See Warth, 422 U.S. at 500. GUCLT suffers no legal injury in fact to the patent’s exclusionary rights. As the Supreme Court stated in Independent Wireless, the right to bring an infringement suit is "to obtain damages for the injury to his exclusive right by an infringer." 269 U.S. at 469; see also Sicom, 222 F.3d at 1381 ("Standing to sue for infringement depends entirely on the putative plaintiff’s proprietary interest in the patent, not on any contractual arrangements among the parties regarding who may sue…"); Ortho, 52 F.3d at 1034 ("[A] right to sue clause cannot negate the requirement that, for co-plaintiff standing, a licensee must have beneficial ownership of some of the patentee’s proprietary rights.").

. . . Only when a party holds the exclusionary rights to the patent but lacks all substantial rights may the party join the legal title owner in a suit to enforce patent rights. Joining the legal title holder only satisfies prudential standing requirements. It cannot cure constitutional standing deficiencies. Since GUCLT fails to meet constitutional standing requirements, it cannot be a party to this suit for patent infringement.

However, dissenting Circuit Judge Prost would have allowed GUCLT to sue becuase the patent owner AHLT was properly joined in the suit:

If, as I would hold, GUCLT is properly considered a “category two” plaintiff, then it could have added AHLT to the suit either voluntarily or involuntarily to satisfy our prudential standing requirements. See Intellectual Prop. Dev., 248 F.3d at 1347–48. GUCLT had no need to add AHLT, however, because Microsoft’s counterclaims here brought AHLT into the case, thus satisfying our prudential requirements. Evident, 399 F.3d at 1314. While I accept the usefulness of the majority’s attempt to clearly delineate our jurisprudence on standing, that attempt misses the mark by failing to correctly define the second category of plaintiffs.

While the majority effectively treats the second category as occupied solely by exclusive licensees, that category may properly include other types of plaintiffs. In Intellectual Property Development, 248 F.3d at 1346, we clarified that determining standing of non-patentee parties requires analysis under the standard set forth in Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992). Specifically, a putative plaintiff must demonstrate (1) an injury in fact (invasion of a legal interest that is concrete and particularized, and actual or imminent injury); (2) a causal connection between the defendant’s action and the injury; and (3) that it is likely a favorable decision would redress the injury. Lujan, 504 U.S. at 560–61.

No serious argument could contend that GUCLT does not satisfy the second two factors; thus—as the majority ostensibly recognizes—the key question regarding constitutional standing is whether or not GUCLT suffers an injury in fact from Microsoft’s infringement. Rather than meaningfully evaluating the injury to the plaintiff here, the majority simply falls back on the established boundary including exclusive licensees.

Focusing much attention on the right to grant licenses under the patent here, the majority concludes that without such a right, GUCLT is missing a key component of the so-called exclusionary rights necessary for standing.1 If, as the majority states, AHLT could freely and exclusively license the target of GUCLT’s litigation, it would eviscerate GUCLT’s right to sue. None of the documents defining the outcome of bankruptcy, however, explicitly address the right to license the patent. A nonexclusive license is a covenant not to sue, Ortho Pharm. Corp. v. Genetics Inst., Inc., 52 F.3d 1026, 1032 (Fed. Cir. 1995), so separating the right to sue from the right to license without any basis in the parties’ arrangement makes a distinction without a solid basis. Because the two concepts are so intertwined, I would recognize that the right to sue—explicitly assigned to GUCLT—includes the right to offer nonexclusive licenses to targets of litigation.

Moreover, any right that AHLT has regarding transfer of rights under the patent is subject to consent by GUCLT. Nothing in the Trust Agreement indicates that GUCLT cannot unreasonably withhold such consent, an omission that sharply contrasts with the requirement that AHLT consent to settlement of suit by GUCLT and not unreasonably withhold such consent. The arrangement clearly places less restriction on GUCLT and demonstrates that GUCLT is the party controlling litigation, including settlement of the litigation through licensing.

. . . The bankruptcy agreement here clearly specifies the actions that GUCLT may pursue, separating a small number of defendants subject to suit only by BHLT. Allowing co-plaintiff standing for GUCLT and AHLT would create no risk of multiple suits and would permit AHLT to ensure a full defense of the patent’s validity. Devoid of policy considerations, the majority opinion merely concludes that GUCLT lacks exclusionary rights. As explained, because the indicia of standing point the other way, I believe GUCLT does hold such an interest. Where GUCLT has received the right to enforce the patent and the patentee presently holds title in trust for GUCLT, infringement of the patent constitutes injury in fact.

While I do not read any precedent as directly governing the peculiar circumstances of this case, I also do not read any as precluding co-plaintiff standing for GUCLT. I believe that, in denying all possibility for enforcing the patent, the majority opinion extends limitations on co-plaintiff standing without a reasoned basis. Accordingly, while neither GUCLT nor AHLT individually may pursue infringement litigation, I would not deprive the patent of all value. Because I would allow GUCLT and AHLT, as co-plaintiffs, standing to sue Microsoft, I respectfully dissent.

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Patently Tired of Getting Buttonholed? Want One Last Chance to File that IDS?

Corporate patent professionals -- are you tired of going to meetings and getting buttonholed at every turn by private-practice lawyers trying to stuff business cards into your pockets?

Would you like to attend a meeting where you are surrounded by other corporate patent professionals?

Where the topics are selected because they relate to corporate patent departments?

Where more experienced corporate patent professionals share their thoughts with newer professionals?

Where you could get the inside scoop on things like how to use the free "Partridge" software to learn about an impending Office Action a week before it shows up on the USPTO's new "eOA" system (thus giving you one last chance to hand in an IDS without fee)?

Here is the answer: The Forty-fourth annual Corporate Patent Seminar in Hilton Head SC. November 11–14, 2007.

Read about it at http://www.corporatepatent.com/. Sign up online.

Carl Oppedahl recommends it, and so do I. You can buttonhole him about that nifty little IDS trick while you're there. In fact, he posted most of this message on each of the various Listervs that he maintains.
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PDF Creation Software for EFS-Web

What types of PDF creation software can you use to produce the PDF files that will be accepted by the USPTO?

According to the USPTO, the most common versions of commercial PDF creation software will be accepted by EFS-Web:

  • ABXPDF Writer (no configuration required)
  • Adobe
  • Open Office (Freeware)
  • Easy Office (Ad ware)
  • Cute PDF (Freeware)
  • PDF Redirect (Freeware)
  • PDF 995 (Ad ware)
  • Primo PDF (Freeware)

The USPTO supports PDF standards versions 1.1 to 1.6, and Adobe Acrobat Reader 7.0.8 or 7.0.9 ONLY to use EFS Fillable forms. A detailed listing of PDF guidelines may be found at the EFS Forms page.

Do not submit PDF files using Grayscale text. Grayscale text may not be rendered properly during the PDF to TIFF conversion process. This may result in loss of content.

And be sure to use valid filenames before uploading, NOT

  • Over100charactersplusx.pdf (exceeds total 100 character limit)
  • Name.PDF (ends in .PDF - must be .pdf)
  • Any space.txt (cannot have a space in the file name)
  • ~@#$%^&*()+=]}[{"':;?/>.<,.zip (contains invalid characters within file name)
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China Proposes Infringement Defense Fund

"China is proposing a fund to help its enterprises cope with rising international litigation related to intellectual property rights (IPRs). The message, together with other measures, was delivered by Zhang Qin, deputy director of the State Intellectual Property Office (SIPO) at a national corporate IPR meeting on 2 September, but it was not made public until 10
September."
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USPTO Insights on Claim and Continuation Limit Rules

A recording of the Foley & Lardner "Patent Nation (web) Conference" on the USPTO's new claim and continuation limits, featuring USPTO Commissioner Jon W. Dudas and Senior Patent Counsel Robert Bahr, is now available at http://www.foley.com/news/event_detail.aspx?eventid=1774.

The presentation also includes a panel discussion on
  • A checklist of steps to take during the 60-day window before the final rules are effective
  • Scenarios that would justify extra continuations under the final rules
  • The number of continuations filed as a matter of right
  • The "bonus" continuation for transition cases as well as the definition of a "transition" case
  • The importance of "serial divisionals" particularly applicable to companies within the biotechnology, pharmaceutical, and nanotechnology industries
featuring Courtenay C. Brinckerhoff, Partner, Biotechnology & Pharmaceutical Practice; Stephen P. Fox, Former Vice President and Deputy General Counsel for Intellectual Property, Hewlett-Packard Company; and Stephen B. Maebius, Partner and Co-Chair, Life Sciences Industry Team
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Archived updates for Tuesday, September 18, 2007

Low Bar for Pro Se Litigants on Failure to State Infringement Claim


In McZeal, Jr. v. Sprint Nextel Corporation (September 14, 2007), the Federal Circuit held that McZeal met the low bar for pro se litigants to avoid dismissal of its complaint alleging patent and trademark infringement on the basis of Fed. R. Civ. P. 12(b)(6), where a claim may be dismissed when a plaintiff fails to allege any set of facts in support of his claim which would entitle him to relief.

According to the opinion by Senoir Circuit Judge Archer,

Here, McZeal asserted ownership of the ’226 patent, Compl. at 13; named Sprint Nextel as described the means by which Sprint Nextel as defendants, Compl. at 15-16; cited the ’226 patent as allegedly infringed, Compl. at 14; described the means by which Sprint Nextel allegedly infringes ("[t]he defendant’s basic elements contained in the patent claims of the plaintiff and further infringes under patent law invoked ("35 U.S.C. § 271," Compl. at 5).

More specifically, McZeal’s defendants, which claims to be an ‘International Walkie Talkie Machine’ and which purports to provide ‘INTERNTAIONAL WALKIE TALKIE®’ service or global wireless Voice Over Internet Protocol (VoIP) communications" infringes his patent. Compl. at 14. McZeal further asserts: defendants, Compl. at 15-16; cited the ’226 patent as allegedly infringed, Compl. at 14; INTERNATIONAL WALKIE TALKIE machine physically have [sic] or perform all of the the doctrine of equivalents," Compl. at 14, 56; and pointed to the specific parts of the complaint alleges that the "[Motorola i930] manufactured and distributed by the defendants, which claims to be an ‘International Walkie Talkie Machine’ and which purports to provide ‘INTERNTAIONAL WALKIE TALKIE®’ service or global wireless Voice Over Internet Protocol (VoIP) communications" infringes his patent. Compl. at 14. McZeal further asserts:

The technology cell phone product line called Motorola i930 "INTERNATIONAL WALKIE TALKIE" offered by the defendants, falls within the scope of one or more claims of the patented World Wide Walkie Talkie/International Walkie Talkie invention. Plaintiff further asserts herein that the infringing MOTOROLA i930 and line of wireless VoIP roducts are logically equivalent, performs [sic] in essence the same utility as the plaintiff’s WORLDWIDE WALKIE TALKIE®/INTERNATIONAL WALKIE TALKIE® invention and infringes [sic] on the plaintiff’s issued patent . . . .

Compl. at 28. [FOOTNOTE 5. McZeal also explains that the Motorola i930 telephone: When used as any wireless apparatus over the internet or data network telephone infringes plaintiff’s patent via the Doctrine of Equivalents because the elements of the infringing device is [sic] the equivalent on [sic] the plaintiff’s patented invention and because it performs the same function, in the same way using a cellular telephone to achieve the same result, and/or the role of the infringing device element is substantially the same as that of plaintiff’s invention.] Accordingly, McZeal’s complaint contains enough detail to allow the defendants to answer and thus meets the notice pleading required to survive a Rule 12(b)(6) motion. See Conley, 355 U.S. 47-48; Phonometrics, 203 F.3d at 794. Nothing more is required.

During the hearing, the trial court noted that McZeal had "conceded that [he] didn’t know what device, what mechanism or what means Nextel uses to transmit and connect its telephone customers to the rest of the world." At this stage in the litigation, all McZeal has access to is Sprint Nextel’s public statements and advertisements. From this information he has fashioned his complaint. In this case, the specifics of how Sprint Nextel’s purportedly infringing device works is something to be determined through discovery.

. . . By ruling in McZeal’s favor, we do not condone his method of pleading. McZeal is no stranger to legal proceedings, having filed numerous complaints in the past and having many dismissed for failure to state a claim. In this case, as noted previously, McZeal filed a voluminous complaint with multiple counts, many of which are baseless and frivolous. The remand will provide an opportunity for the district court to require McZeal to delineate his patent and trademark infringement claims and the evidence supporting these claims. The court can then construe the claims, Markman v. Westview Instr., 516 U.S. 370 (1996), and entertain summary judgment motions.

In dissenting from the majority’s decision to vacate the dismissal of the claim of patent infringement under the doctrine of equivalents, Circuit Judge Dyk added:

Under the majority opinion it is now sufficient to simply allege in the complaint that the patent is infringed by the defendant’s sale of a particular product without even specifying which specific claims are alleged to be infringed or the features of the accused device that satisfy the limitations of these claims. . . .

Without specifying which claims of the 12 claims were infringed, McZeal alleged simply that

As previously stated in this Complaint the defendants SPRINT NEXTEL CORPORATION and agents manufacturers or distributes a product called "INTERNATIONAL WALKIE TALKIE" or Motorola i930 cellular device which infringes on one or more of plaintiff's patent claims and on the plaintiff's issued patent, and this infringement is willful, and done with full knowledge.

Defendants [sic] INTERNATIONAL WALKIE TALKIE infringes plaintiff [sic] patent via the doctrine of equivalents because the elements of the infringing device when used in cellular telephones, are the equivalent o[f] the plaintiff’s patented invention, because it performs basically the same function in the same way using a cellular telephone to achieve the same result as plaintiff’s . . . invention.

(Compl. at 51). McZeal also had a lengthy opportunity at the hearing on the motion to dismiss to explain his contentions. Despite this opportunity, McZeal failed to explain how the accused device infringed under the doctrine of equivalents. In fact, as the district court noted, McZeal conceded that he did not know "what mechanism Nextel uses to transmit and connect its telephone customers to the rest of the world." J.A. 160.

Federal Rule of Civil Procedure 8(a) requires litigants to set forth "a short and plain statement of the claim showing that the pleader is entitled to relief," and the complaint must "be so construed as to do substantial justice." Fed. R. Civ. P. 8(f). Form 16, entitled "Complaint for Infringement of Patent," provides the following example of a sufficient pleading in a patent infringement suit:

  1. Allegation of jurisdiction.

  2. On May 16, 1934, United States Letters Patent No. ___ were duly and legally issued to plaintiff for an invention in an electric motor; and since that date plaintiff has been and still is the owner of those Letters Patent.

  3. Defendant has for a long time past been and still is infringing those Letters Patent by making, selling, and using electric motors embodying the patented invention, and will continue to do so unless enjoined by this court.

  4. Plaintiff has placed the required statutory notice on all electric motors manufactured and sold by him under said Letters Patent, and has given written notice to defendant of his said infringement.

In my view, a bare allegation of literal infringement using the form is inadequate to provide sufficient notice to an accused infringer under a theory of literal infringement. The form fails to state which claims are asserted and which features of the accused device are alleged to infringe the limitations of those claims.

[FOOTNOTE 3. To some extent, the problem with the brevity of the form has been ameliorated by some local rules which "require[e] both the plaintiff and the defendant in patent cases to provide early notice of their infringement and invalidity contentions, and to proceed with diligence in amending those contentions when new information comes to light in the course of discovery." O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1365-66 (Fed. Cir. 2006) (discussing the local rules for the Northern District of California). But these the local rules do nothing to require an adequate statement of the claim before discovery commences.]

In alleging that the "electric motors embod[y] the patented invention" the form fails to recognize that a patent is only infringed when the accused product satisfies all of the limitations of the claims. However, I agree that under Rule 84 of the Federal Rules of Civil Procedure, we would be required to find that a bare allegation of literal infringement in accordance with Form 16 would be sufficient under Rule 8 to state a claim. [FOOTNOTE 4. Federal Rule of Civil Procedure 84 provides that "[t]he forms contained in the Appendix of Forms are sufficient under the rules and are intended to indicate the simplicity and brevity of statement which the rules contemplate."] One can only hope that the rulemaking process will eventually result in eliminating the form, or at least in revising it to require allegations specifying which claims are infringed, and the features of the accused device that correspond to the claim limitations.

The pertinent question here, however, is whether Form 16 should be read to apply to claims under the doctrine of equivalents. . . . McZeal’s complaint utterly fails to provide any meaningful notice as to how Sprint has infringed the claims under the doctrine of equivalents. It fails to specify which limitations are literally infringed and which are infringed by equivalents, or, as to the limitations alleged to be infringed by the doctrine of equivalents, how the accused product is insubstantially different from the patented devices.

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US BPAI Appeal Terms and the Impending Crisis

According to Professor Crouch at Patently-O, in the first two weeks of September 2007, the U.S. Board of Patent Appeals and Interferences released over one hundred opinions. Bsed upon his review of a sample of thirty of these applications,

On average it took just under 18 months (542 days) from the filing of the appeal brief until a decision was reached by the BPAI. The mean hides a wide range of delay: From a minimum of 9 1/2 months to a maximum of 44 months. (Standard Deviation 255).

Most of the time delay is not attributable directly to the BPAI. Rather, most of the delay occurs between the date that the appeal is filed and the date that the case is submitted to the BPAI. On average, it took about 11 months (328 days) to ‘complete briefing.’ Typically, that time period involves the applicant’s brief; followed by an
examiner’s answer; and finally a reply brief. Once the case is submitted to the BPAI, the average decision time was seven months (214 days).

. . . As I noted earlier in 2007, only fewer than of appeals are pushed-through to the end. [Link] In many cases, Examiners withdraw rejections or applicants file RCE’s with new claims. These calculations also do not include time delays associated with BPAI rejections for improper appeal brief form. Instead, I only began counting once a ‘proper’ brief was filed. In an earlier study, I showed that approximately 25% of appeal briefs are rejected on procedural grounds as either defective or incomplete. [Link]


"With the elimination of unlimited continuation and RCE filings, it is expected that many more appeals will be taken by attorneys who formerly would refile applications after final rejection in an attempt to work out a compromise with an Examiner vis a vis taking an appeal," adds Professor Wegner. "If the new rules were to result in just one or two more appeals taken the full route to decision for each examiner, this would double or triple the number of appeals, choking the capacity of the Board to keep current."

The Good Professor also offers a comparative solution to the impending crisis:
In a nutshell, Japan places a premium on the back end of the examination process, as manifested by 30 % of its workforce being involved in appeals and post-grant review – versus one (1) % in the United States. Japan benefits from earlier parallel examinations in the United States and avoids the one-size-fits-all front end focus of the PTO. As a result, the United States has a patent examination corps 320 % the size of Japan. The Japanese focus upon legally talented fresh graduates with B.S. and M.S. degrees is in sharp relief to the American focus on gaining industry-experienced workers – often with more than ten years out of college – but with a Ph.D. rather than a law degree or any established legal aptitude. The attrition rate is so high that in the last two to four years the resignation or retirement rate at the U.S. PTO has exceeded the size of the entire Japanese patent examining corps.

Read more in Wegner's paper on "Patent Reform in the 110th Congress: Lessons from Tokyo."
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Archived updates for Monday, September 17, 2007

USPTO Tries PCT Chapter 1 Outsourcing to Sweden

The United States and Swedish Patent Offices will cooperate on International Search and Examination services in a trial project where the PRV will process 50 PCT Chapter I applications covering a range of technologies. The USPTO will review the PRV’s work to ensure that it meets USPTO standards for quality and accuracy.
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OHIM Opposition Procedure Changes

Thanks to Axel H Horns' IPJUR for outlining the OHIM's September 12, 2007 decision to make a number of changes to both the admissibility and the adversarial phases of Community Trademark Oppositions:

  • except for oppositions against designations of the EC under the Madrid Protocol, oppositions will be considered admissible if all absolute and relative requirements for admissibility are complied with for at least for one of the earlier rights.
  • except for oppositions against designations of the EC under the Madrid Protocol, the indication of the class number(s) will be accepted as a sufficient indication of the goods and services of the earlier rights on which the opposition is based.
  • Cost decisions will be issued together with the confirmation of the withdrawal, either of the opposition or of the CTM application
  • the Office will now ex oficio grant the second request for suspension for a period of one year, giving the parties the possibility to opt out
  • Evidence submitted without the required copy onder Rule 79a will be rejected and not
    taken into account.
The changes will be implemented as of 17/09/2007, and will apply to all oppositions, including pending oppositions.
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Archived updates for Friday, September 14, 2007

Post-Novemeber 1, 2007 Patent Filing Strategy Options

Slides from a presentation by Merchant and Gould on the USPTO's "5/25" Continuation rules that take effect on November 1, 2007 suggested some intriguing options for filing U.S. patents after that date:

Use provisionals and going national stage from a PCT application
•Time - lag in prosecution 1 year and 2.5 years
•Limits on continuations do not apply
•5/25 rules apply

Maximizing Options with Provisional and PCT Applications
Day 1 - file U.S. provisional application
Day 2 - file same text as U.S. utility application without priority claim
Year from day 1, with priority claim only to the provisional application -
•file PCT application designating U.S., and
•perhaps, file U.S. utility application
•(these can be “continuations-in-part” of the provisional)

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USPTO Issues Guidelines for Examination Support Documents

Starting November 1, 2007, a U.S. patent applicant may present more than five independent claims or more than twenty-five total claims in an application, if applicant files an examination support document ("ESD") in compliance with 37 CFR 1.265 before the first Office action on the merits of the application. The USPTO has now published its guidelines for these ESDs which provide several enlightening examples.

An ESD must include the following:

  1. Preexamination Search Statement
  2. Listing of References Deemed Most Closely Related
  3. Identification of Claim Limitations Disclosed by References
  4. Detailed Explanation of Patentability (particularly pointing out how each of the independent claims is patentable over the cited references); and
  5. Showing of Support under 35 U.S.C. 112, ¶1 (where each limitation of each of
    the claims finds support, including in each such priority or benefit application in which such
    support exists).

With reghard to the first item, "a search that includes the following three items should generally be sufficient:"

  1. A classification search of U.S. patents and published patent applications
  2. A text search of the U.S. patents and published patent applications, foreign patent
    documents, and non-patent literature (NPL) (see example below); and
  3. A search employing any special tools.


For each reference cited, the ESD must include an identification of all the limitations of each of the claims (whether in independent or dependent form) that are disclosed by the reference:



Professor Wegner has already noted that the guidelines "manifest precisely the sham nature of the ESD program as a way to compel compliance with the '5/25' claiming rule that becomes effective November 1, 2007." Indeed, according to the guidelines,
Applicants who are preparing an examination support document under 37 CFR 1.265 may find the information on an accelerated examination support document helpful because the requirements for an accelerated examination support document are similar to the requirements for an examination support document requirements under 37 CFR 1.265. See Changes to Practice for Petitions in Patent Applications To Make Special and for Accelerated Examination, 71 FR 36232 (June 26, 2006), 1308 Off. Gaz. Pat. Office 106 (July 18, 2006) (notice). The USPTO has posted samples of a preexamination search document and an examination support document under the revised accelerated examination procedure on the USTPO’s Internet Web site
at http://www.uspto.gov/web/patents/accelerated/.
"According to a study of PTO statistics by Stephen B. Maebius, out of 300 accelerated examination petitions that have been considered, 241 have been denied," writes The Good Professor. "Phrased differently, only 19 % of the accelerated examination requests have passed procedural muster. Imposition of a procedure so complex and fraught with uncertainties so that eighty-one (81) percent fail clearly shows a shortcoming in PTO management."
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Archived updates for Thursday, September 13, 2007

TGIF for the Grand Waltz

On September 4, 2007, Nokia received U.S. Trademark Registration No. 3,288,274 for "a sound comprising a C eighth note, E flat eight note, B flat eighth note, G quarter note, C eighth note and C quarter note." You may recognize this ubiquitous tune from Francisco Tárrega's "Gran Vals:"

Known as "The Sarasate of the Guitar," Tárrega is considered to have laid the foundations for 20th century classical guitar and for increasing interest in the guitar as a recital instrument. Andrés Segovia used much of Tárrega's work when he took classical guitar into concert halls of Europe.

Click here to listen to the original Gran Vals for guitar.

Click here for a Turkish orchestral arrangement.

Teþekkür etmek mabut o be cuma (and time to waltz),

--Bill Heinze

p.s. - That last part is my best Turkish for "Thank Goodness It's Friday."

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Copyright Information for Artists and Writers

Columbia Law School is launching a Web site to help artists and writers retain control of their copyrights and manage those rights through their careers. The site, KeepYourCopyrights.org , is the work of Columbia Law School professors Jane Ginsburg and Timothy Wu. "We want to reach the most vulnerable creators with this," said Ginsburg. "We’re creating a different vision for what the future of copyright should be – to actually benefit authors and creators."
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Level of Skill in the Art of Treating Ear Infections Includes Persons Developing Pharmaceutical Formulations

In Daiichi Sankyo Co., LTD v. Apotex, Inc., et al. (reissued as a precedential opinion on Septmembr 12, 2006), the Federal Circuit looked to the experience of the inventors to hold that prior art publication directed at "a highly, highly subspecialized physician" was with the level of ordinary skill in the art of treating bacterial ear infections by topically administering the antibiotic ofloxacin into the ear:

The ’741 patent is drawn to a method for treating bacterial ear infections by topically administering the antibiotic ofloxacin into the ear. Claim 1 is representative and states "[a] method for treating otopathy which comprises the topical otic administration of an amount of ofloxacin or a salt thereof effective to treat otopathy in a pharmaceutically acceptable carrier to the area affected with otopathy." ’741 Patent, col.6 ll.36-39.

. . . The art involved in the ’741 patent is the creation of a compound to treat ear infections without damaging a patient's hearing. The inventors of the ’741 patent were specialists in drug and ear treatments—not general practitioners or pediatricians. At the time of the invention, Inventor Sato was a university
professor specializing in otorhinolaryngology; Inventor Handa was a clinical
development department manager at Daiichi, where he was involved with new drug
development and clinical trials; and Inventor Kitahara was a research scientist at Daiichi engaged in the research and development of antibiotics. Additionally, others working in the same field as the inventors of the ’741 patent were of the same skill level. See Daiichi Material for [C]onference on Development, at 1 (Nov. 11, 1987) (stating that "there are many voices among medical persons concerned with otorhinolaryngology for demanding development of an otic solution making use of [ofloxacin]").

Further, the problem the invention of the ’741 patent was trying to solve was to create a topical antibiotic compound to treat ear infections (otopathy) that did not have damage to the ear as a side effect. ’741 Patent, col.1 ll.23-34. Indeed, most of the written description details the inventors’ testing ofloxacin on guinea pigs and their findings that ototoxicity did not result from the use of their compound. Such animal testing is traditionally outside the realm of a general practitioner or pediatrician. Finally, while a general practitioner or pediatrician could (and would) prescribe the invention of the ’741 patent to treat ear infections, he would not have the training or knowledge to develop the claimed compound absent some specialty training such as that possessed by the ’741 patent’s inventors. Accordingly, the level of ordinary skill in the art of the ’741 patent is that of a person engaged in developing pharmaceutical formulations and treatment methods for the ear or a specialist in ear treatments such as an otologist, otolaryngologist, or otorhinolaryngologist who also has training in pharmaceutical formulations. Thus, the district court clearly erred in finding otherwise.

. . . Daiichi’s expert opined that the Ganz reference disclosed "nothing at all" relevant. This opinion was based on the fact that the article was directed at "a highly, highly subspecialized physician . . . which would be the otologist or the ear doctor" not a primary care physician or general practitioner. Trial Tr. Vol. 7, 72-73 Nov. 11, 2005. He further explained that the article did not render the invention of the ’741 patent obvious "most importantly because those of ordinary skill are defined as a population . . . of physicians that are completely different than the audience Dr. Ganz [the author] was writing to." Id. at 73-74. Thus, Daiichi’s evidence as to why this reference did not render the invention of the ’741 patent obvious was based on an improper determination of the level of skill in the art.

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