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Archived updates for Friday, August 31, 2007

Patent Oppositions and Limited Citations as Anti-Competitve Behavoir?

According to "The Influence of Strategic Patenting on Companies’ Patent Portfolios" by Knut Blind, Katrin Cremers, and Elisabeth Mueller,

. . . the phenomenon of frequent oppositions and rather limited citations in a company's patent portfolio is an incidence that the company is implementing an offensive blocking strategy and thus misusing the patent system. This is a potential information source, which could be used in investigations of anti-competitive behaviour in specific markets or by single companies. In summary, this investigation has confirmed the validity and the usability of patent portfolio characteristics not only for innovation management, but also policy issues.
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This Box Is Not A Trademark

Thanks to the TTABlog for pinting out In re MGA Entertainment, Inc., Serial No. 76603323 (August 17, 2007) where the U.S. Trademark Trial and Appeal Board affirmed a refusal to register a configuration for "trapezoidal cardboard boxes" for toys, tames, and athletic protective pads, agreeing with the PTO that the identified goods are not goods in trade and that, even if they were, the configuration is not inherently distinctive and lacks acquired distinctiveness. According to the TTAB,
We note that there is no evidence that applicant is a manufacturer of boxes or that applicant is engaged in selling boxes as commodities in trade. With respect to the puzzle boxes, in particular, we are not persuaded by applicant’s argument that because the puzzle boxes may be used to store the puzzle pieces when not being used, such boxes have additional utility and thus constitute goods in trade. It is obvious that because of the loose nature of puzzle pieces, they must be held within some type of point of sale container. It only makes sense that consumers would store the puzzles pieces in the original container when the puzzles pieces are not being used. Any number of products may be stored by consumers in their original boxes or packaging when not being used (e.g., shoes may be stored in their original cardboard boxes, coffee beans may be stored in their original bags, and DVDs may be stored in their original plastic boxes). However, the mere fact that original boxes or packaging may be used to store products does not infuse such boxes or packaging with additional utility such that they constitute goods in trade. Because many products are stored in the containers in which they are sold, consumers are likely to regard the puzzle boxes as nothing more than point of sale containers, as opposed to separate goods in trade.

Insofar as the toy laptop computer boxes are concerned, there is no indication that such boxes are labeled as carrying cases for the toy laptop computers. Moreover, there is no evidence that applicant advertises or promotes the toy laptop computer boxes as carrying cases for the toy laptop computers. In addition, we note that there is no evidence that children actually use the toy laptop computer boxes in the manner argued by applicant, that is, as carrying cases and as part of the ongoing
play environment. We hasten to add that, even if there were evidence that children actually used the boxes in this manner, we would not necessarily be persuaded by this evidence that the boxes have additional utility and thus constitute goods in trade. It is common knowledge that packaging materials may be used as toys by children and thus many such materials, such as plastic bags, have warnings that they are not toys to be used by children.

In short, we are not convinced on this record that consumers recognize the toy laptop computer boxes as carrying cases and part of the ongoing play environment. Rather, we believe consumers would view such boxes as nothing more than point of ale containers for applicant’s toy laptop computers. In view of the foregoing, we are not persuaded that the toy laptop computer boxes have additional utility such that they constitute goods in trade.

In sum, the goods in this case, trapezoidal boxes for toys, games and playthings, are unlike the ball point pens and calendars in Snap-On Tools and United Merchants & Manufacturers, Inc., respectively. We agree with the examining attorney that such goods are incidental to applicant’s primary goods, namely, toys, games and
playthings, and are not goods in trade of applicant. Accordingly, the refusal on the ground that the identified goods do not constitute goods in trade is affirmed.
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Register Now for the 2007 Corporate Patent Seminar

Registration is now open for the 44th annual Corporate Patent Seminar!

November 11-14, 2007 (Sunday-Wednesday)
Hilton Head Island, South Carolina
Hilton Head Marriott Beach and Golf Resort


The Corporate Patent Seminar is for corporate patent professionals. It is organized by an ad hoc non-profit association of senior corporate patent professionals dedicated to the effective and healthy exchange of ideas and experiences in the area of intellectual property law and corporate practice. Because of the nature of Corporate Patent Seminar's Roundtable Discussions and format, attendance is limited. Registrations received above our attendance cut off will unfortunately have to be returned. To ensure your place at this years seminar please register early!

In addition to having a series of talks on topics of interest for in-house IP counsel, this year's annual meeting will include the following features:

ROUNDTABLE DISCUSSIONS are one of the principal hallmarks of the CORPORATE PATENT SEMINAR. Each participant is encouraged to contribute his or her experiences and insights on a defined subject related to the overall program in discussions held toward the conclusion of each of our seminar sessions. Indeed, our annual program strongly encourages open, active discussion among the attendees.

PARTICIPANT WORKSHOP: This year, we are building on our participatory tradition by following up presentations and a roundtable discussion on Invention Generation with a participatory Workshop applying of Invention Generation techniques.

The program tends to be the most beneficial to senior corporate patent counsel. Many have commented that our meetings of peers present great value by sharing ideas and exploring relevant issues with leaders of other corporate patent departments. In this informal atmosphere, concerns arising in the shop of one counsel can be addressed by the experiences of others. All attendees find the opportunities to offer and receive help and have other high-minded interactions, such as conduct benchmarking for current in-house practices, among other exchanges, particularly helpful.

To facilitate the open and frank discussions that are the heart and strength of the Corporate Patent Seminar, all attendees tacitly agree by their participation that all comments and views of other attendees will be held in confidence.

Here are just a few of the comments from attendees at the CPS 2006:

  • “This seminar absolutely provides the most bang for the buck. Just compare the costs.”

  • “I have heard several design patent speakers before and this was the best by far.”

  • “The smaller size really provides an opportunity to build new contacts and the addition of international attendees/speakers is a real plus.”
Planned program topics for the 2007 CPS include:

Portfolio Valuation
New Asian Patent Developments
New PCT Rules
New US Rules
New EPO Rules
Electronic Patent Office (US e-filing, PCT-SAFE, EPO e-filing)
Parallel Trade
Invention Generation and Enhancement
Techniques and Tools
Invention Generation and Capture Roundtable Discussion and Workshop
Speakers/Moderators for the 2007 CPS include:

Timothy Guffey - Global Patent Services Manager, The Procter & Gamble Company
Stephen F. Jones - Partner, Baker & McKenzie
Gregory T. Kavounas - Sr. Patent Counsel, IMPINJ
Steven Krefman - Senior Counsel, Patents, Whirlpool Corporation
Steven G. Kibby - Senior Corporate Counsel, Caterpillar, Inc.
Dean Olson - Senior Corporate Counsel, Pfizer, Inc.
Carl Oppedahl - Partner, Oppedahl Patent Law Firm LLC
Lanny Vincent - President, Vincent & Associates, Ltd.

About the facility:

The Marriott Hilton Head Beach & Golf Resort, One Hotel Circle, Hilton Head Island, SC 29928 is a beautiful facility located on the coast of South Carolina at One Hotel Circle. The nearest airport is Savannah, Georgia. It is in the heart of great golf country, and this time of year the temperature is a mild 70-80°F. They have reserved a block of rooms at the Marriott, and your reservation will be included by your completing and forwarding a registration as long as our reserved block of rooms is available. Note that the program registration fee does not include the cost of the hotel lodging.

Call or e-mail this years chairs with any questions and register early.

Chairs: Dean Olson, Gregory T. Kavounas and Steven Krefman

Site Committee Chairs: Timothy B. Guffey and Steven G. Kibby

Publicity Committee Chairs: Gerard J. Hughes and Domenic Leo

Additional information can be obtained by contacting the following:

For the most up-to-date information about the seminar, please visit their website at
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Archived updates for Thursday, August 30, 2007

TGIF for End of Summer Roadtrips

for "Automotive Vehicle"
Thank Goodness It's Friday (and a three-day weekend in the U.S.).
Learn about the history of the Labor Day holiday here.
Hot dog history, legends and trivia here.
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Unexpected New Use Must Be Considered for Nonobviousness of Composition

In In Re John B. Sullivan, et al. (August 29, 2007), the Federal Circuit vacate the Board’s decision because it failed to give any weight to the rebuttal evidence of record. Most relevant to the resolution of the appeal, was the Board's statement in a footnote that:

"The remainder of appellants [sic] arguments on this record, in addition to
the Declarations of record, relate to the use of the claimed composition as an
antivenom. Since we have placed not [sic] weight on the intended use of appellants’ composition we do not address these arguments or the Declarations."
The appellate court acepted that a prima facie case of obviousness had been set forth by the Examiner becuase it was not unreasonable for one skilled in the art of snake venom to consider that a Fab fragment of a whole antibody that neutralizes one type of venom might be used to neutralize the venom of another species. However, with regard to the was rebuttal evidence, the court noted that

The Board stated in a footnote that the declarations of record relate only to the use of the claimed composition as an antivenom, and thus the Board expressly declined to give any meaningful consideration to them. Sullivan, No. 2006-0220, slip op. at 13 n.7. As stated above, when an applicant puts forth relevant rebuttal evidence, as it did here, the Board must consider such evidence. The claimed composition cannot be held to have been obvious if competent evidence rebuts the prima facie case of obviousness. By failing to consider the submitted evidence, the Board thus ommitted error. That is not to suggest that the Board’s finding of obviousness must be overturned in light of the evidence; rather, the Board must give the declarations meaningful consideration before arriving at its conclusion.

Moreover, the Board was mistaken to assert that the declarations only relate to the use of the claimed composition. The declarations do more than that; they purport to show an unexpected result from use of the claimed composition, how the prior art taught away from the composition, and how a long-felt need existed for a new antivenom composition. While a statement of intended use may not render a known composition patentable, the claimed composition was not known, and whether it would have been obvious depends upon consideration of the rebuttal evidence. Had the Board considered or reviewed the declarations in any meaningful way, it might have arrived at a different conclusion than it did.

Furthermore, the Board’s focus on the intended use of the claimed composition misses the mark. The Board cites In re Zierden, 411 F.2d 1325 (CCPA 1969), for the proposition that a statement of a new use for an otherwise old or obvious composition cannot render a claim to the composition patentable. In that case, applicant conceded that his composition was distinguished from the composition disclosed in a prior art patent only by the statement of intended use. Our predecessor court held that that intended use for the known composition could not render the claim patentable. In this case, applicant does not concede that the only distinguishing factor of its composition is the statement of intended use and, in fact, extensively argues that its claimed composition exhibits the unexpected property of neutralizing the lethality of rattlesnake venom while reducing the occurrence of adverse immune reactions in humans. Such a use and unexpected property cannot be ignored. See In re Papesch, 315 F.2d 381, 391 (CCPA 1963)("From the standpoint of patent law, a compound and all of its properties are inseparable; they are one and the same thing. . . . There is no basis in law for ignoring any property in making such a comparison."). The issue here is not whether a claim recites a new use, but whether the subject matter of the claim possesses an unexpected use. That unexpected property is relevant, and thus the declarations describing it should have been considered by the Board.

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Combination Point of Novelty Must Be "Non-Trivial Advance"

In Egyptian Goddess, Inc., et al. v. Swisa, Inc., et al. (August 29, 2007), EGI's asserted point of novelty for the patented nail board design shown below was a combination of four of the claimed design's elements: (1) an open and hollow body, (2) square cross-section, (3) raised rectangular pads, and (4) exposed corners.

There was also no dispute that nail buffers having square cross-sections were widely known in the prior art. Furthermore, the district court properly found that one prior art nail buffer design, illustrated in U.S. Design Patent No. 416,648 (the Nailco patent), shown below, contained each of these elements except that the body is triangular.

Focussing on just the point of novelty requirement ("substantial similarity" was not at issue), newest Circuit Judge Moore concluded that no reasonable juror could conclude that EGI’s asserted point of novelty constituted "a non-trivial advance over the prior art:"

The district court correctly determined that only if the point of novelty included a fourth side without a raised pad could it even arguably be a non-trivial advance over the prior art. The Swisa buffers have raised, abrasive pads on all four sides. When considering the prior art in the nail buffer field, this difference between the accused design and the patented design cannot be considered minor. See Litton, 728 F.2d at 1444 (explaining that the differences between the claimed and accused designs must be considered in light of the differences between the prior art and the claimed design). Since the parties agree that the Swisa buffers do not contain a fourth side without a raised pad, summary judgment of noninfringement was properly granted. For this reason, the decision below is AFFIRMED.

In defending this new "non-triviality" requirement for points of novelty that are a combination of prior art elements, Judge Moore addressed the dissent with this footnote:

3. The dissent suggests that determining the point of novelty by a non-triviality test conflates infringement and validity analyses. Dissenting Op., at 2. Design patent law has already intertwined the infringement and validity tests. The infringement test at issue in this case is called the "point of novelty" test. The question is not whether the infringement and validity analyses are similar or conflated, they already are. The question is: When the patentee claims a combination of old prior art elements as its asserted point of novelty should the test be one of anticipation or obviousness? We conclude that non-triviality ought to apply—if the standard is akin to anticipation then a combination with even the most trivial difference would meet the standard.

Nontheless, in the view of dissenting Circuit Judge Dyk, there were still multiple flaws in the majority’s approach:

First, by conflating the criteria for infringement and obviousness, the test eviscerates the statutory presumption of validity by requiring the patentee to affirmatively prove nonobviousness. See 35 U.S.C. § 282 ("The burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity."). The burden of proof on obviousness rests with the accused infringer and must be established by clear and convincing evidence. Under the majority’s test, however, the patentee would have to prove nonobviousness in order to establish infringement.

Second, the majority’s approach is at the same time too narrow and too broad. It is too narrow because it applies a special test only to designs which involve a combination of design elements. It is clear to me that a single point of novelty test must apply to all points of novelty, not just those involving combinations. That has invariably been the approach of our past cases. The majority’s approach is also too broad because it extends an obviousness-like test to each point of novelty, not merely the overall design (which is presently the sole focus of the obviousness analysis).

Third, determining whether each combination point of novelty represents a "non-trivial advance" over the prior art requires a difficult and restrictive inquiry in design patent cases. As we have previously noted, "[d]esign patents have almost no scope." In re Mann, 861 F.2d 1581, 1582 (Fed. Cir. 1988). Points of novelty in design patents are often not dramatically different from the prior art. It is difficult enough to assess whether an overall design would have been obvious; it is almost impossible to determine whether a particular design feature represents a trivial or substantial advance over the prior art. The majority appears willing to have this issue resolved on summary judgment without factfinding by a jury, thus relegating to the court the determination whether there is a non-trivial advance over the prior art, a determination which a court is ill suited to make and which it did not in fact make in this case.

Fourth, the majority’s test is devoid of support in the case law. The most that any of the cases cited by the majority can establish is that we have, in certain instances, used the results of our obviousness analysis to determine the point of novelty under the point of novelty test. But no case has come close to requiring a showing of nonobviousness as part of the point of novelty test.2 In Bernhardt, L.L.C. v. Collezione Europa USA, Inc., 386 F.3d 1371 (Fed. Cir. 2004), we considered only the question whether expert testimony was required for a party to establish infringement under the point of novelty test. In holding that such testimony was not required, the court merely observed that "[a] determination of the differences between the patented design and the prior art is not especially different from the factual determinations that district courts routinely undertake on other issues, such as obviousness." Id. (emphasis added). This statement in no way suggests—as the majority appears to believe, see Maj. Op. at 5—that the substantive inquiries on obviousness and infringement should be merged. Our decisions in Litton and Goodyear do not support the majority’s test either. Litton Sys., Inc. v. Whirlpool Corp., 728 F.2d 1423 (Fed. Cir. 1984), was a case in which, having determined that the differences between the patented design and the prior art rendered the overall design nonobvious, see Graham v. John Deere Co., 383 U.S. 1, 17 (1966), we then considered those differences to be the points of novelty. Litton, 728 F.2d at 1442, 1444. In Goodyear Tire & Rubber Co. v. Hercules Tire & Rubber Co., 162 F.3d 1113 (Fed. Cir. 1998), we held that the use of a similar approach by the district court was not clearly erroneous. Id. at 1119, 1121. It is one thing to suggest that a feature that renders a design nonobvious is also a point of novelty. It is quite another to hold that a point of novelty cannot exist unless it would also render the design nonobvious. Again, neither case establishes that there must be a showing of a non-trivial advance to find an asserted combination point of novelty.

Finally, the majority’s test is in fact contrary to several of our cases. In Lawman Armor Corp. v. Winner International, LLC, 437 F.3d 1383 (Fed. Cir. 2006), we rejected applying an obviousness analysis to the determination of infringement. Id. at 1385. We stated explicitly that "[w]hether there is any suggestion to combine prior art references may be relevant in a validity inquiry to determine obviousness . . . but has no place in the infringement issue in this case." Id. Other cases have treated the questions of novelty and obviousness in design cases as separate inquiries. Thus in In re Leslie, 547 F.2d 116 (CCPA 1977), our predecessor court distinguished situations "where the novelty of the design is at issue" from situations "where, as here, the issue is one of obviousness." Id. at 120; see also In re Blum, 374 F.2d 904, 908 (CCPA 1967) (although design had "an appearance which is novel in the strictest sense of the word, the rejection here is not for want of novelty but for obviousness"). I would address this case without reliance on the majority’s incorrect "non-trivial advance" standard.

I respectfully dissent.

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Got a Birthday? Go Ahead and Chant

Thanks to the 11th Circuit in Lil' Joe Wein Music, Inc. v. Curtis James Jackson for keeping us free to chant the phrase "Go [your name here], it’s your birthday" when it held that 50 cent's "In Da Club" is not substantially similar to the original, copyrightable aspects of "Its Your Birthday."

"In Da Club" appears on Fifty's "et Rich or Die Tryin'" album released in February 2003 with the following lyrics:
Go, go, go, go
Go, go, go shawty
It's your birthday
We gon' party like
it's yo birthday
We gon' sip Bacardi like it's your birthday
And you know
we don't give a f--
It’s not your birthday.

The lawsuit alleged that 50 Cent changed only one word from the opening line of Campbell's song from "It's Your Birthday." After repeating the word "go" several times, "Sheila" becomes "shorty" in the line, "Go shorty, it's your birthday."

But how original is that? Not very, apparently.

"A signature and long-standing feature of live performance rap music is the hip hop chant," offered defense expert Tricia Rose. "The chant is a form of audience engagement staged by the performer (mc, dj or rapper) who provides a familiar phrase or saying, often in call and response format, designed to energize, include, affirm and engage the audience."

The defense then went on to offer several specific examples of the use of the phrase before the creation of "Its Your Birthday" including the 1993 film "Who’s the Man," starring Ed Love who plays an inept barber giving a customer a particularly awful haircut. In an effort to assuage the distressed customer, Lover compares him to the famous actor Wesley Snipes by rapping "Go Wesley, go Wesley, go go go Wesley, it's your birthday." And who could forget "The Birthday Jam" by the Miami Bass DJ’s, released in June 1994, with the lyrics, "Go granddad, Its your birthday. Go granddad, Its your birthday . . . Go grandma, Its your birthday. Go grandma, Its your birthday."

So, if you've you got a birthday? Then, go ahead and chant.
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Archived updates for Wednesday, August 29, 2007

Madrid Trademark Communications Available Via E-Mail

On August 28, 2007, WIPO announced that its International Bureau intends to replace ordinary mail by electronic mail for the transmission of certain communications regarding international registrations under the procedures of the Madrid system. Communications covered by this new, optional email service initially include:

  • copies of notifications of provisional refusals recorded under Rule 17(4) of the Common Regulations;

  • copies of irregular notifications of provisional refusals referred to in Rule 18 of the Common Regulations;

  • copies of rectified notifications of provisional refusals referred to in Rule 18(1)(d) and (e) of the Common Regulations;

  • copies of statements of grant of protection recorded under Rule 17(6)(b) of the Common Regulations;

  • copies of statements of confirmation or withdrawal of provisional refusals received by the International Bureau under Rule 17(5)(a) and (b) of the Common Regulations.

Communications other than those listed in the terms and conditions, which are to be notified by the International Bureau under the Common Regulations to the holder or his representative, will, for the time being, continue to be transmitted by ordinary mail. In case of non-delivery, the communications will be resent using ordinary mail.

Users may take advantage of this new service by sending an e-mail message to the following address: while indicating, with reference to the present information notice, the e-mail address which they would like the International Bureau to use for this purpose, as well as the list of all international registrations concerned. The International Bureau will start sending the communications in question by e-mail within one month following receipt of the e-mail address, as indicated above. All international registrations for which the relevant user is recorded in the International Register as the holder or its representative, will then be sent exclusively to the e-mail address indicated by the user.
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Archived updates for Tuesday, August 28, 2007

Unsuccessful Commercial Embodiment Evidences Lack of Enablement

In Ormco Corporation, et al. v. Align Technology, Inc. (August 24, 2007), one of the inventors of the Ormco patents, testified that Ormco had never attempted to create a computerized system that automatically determined tooth positions without human decision making. He also testified that the manual override had been used on all of the approximately forty cases treated using the Insignia product and that, while it was a goal to have the software generate final tooth positions that would not require use of the override, variations in human anatomy had prevented the attainment of that goal. Dr. Andreiko was also unsure if the problems due to variations in human anatomy could be overcome.

According to the opinion by Circuit Judge Lourie:
"If an inventor attempts but fails to enable his invention in a commercial product that purports to be an embodiment of the patented invention, that is strong evidence that the patent specification lacks enablement. Substantial doubt concerning the enablement of the invention was cast by the inventors in this case. The district court so concluded, and we have no reason to disagree. We thus affirm the summary judgment of nonenablement as to claims 1, 9, and 10 of the ’432 patent; claims 1 and 2 of the ’243 patent; claims 1, 3, 4, 9-12, and 16-18 of the ’861 patent; and claims 1-5, 8-36, 41-44, 46-68, and 70-79 of the ’444 patent because clear and convincing evidence establishes that a person of ordinary skill in the art did not and could not accomplish automatic computer determination of teeth finish positions based upon the Ormco patents’ specification."
In her dissent, Kathleen O’Malley, District Judge, United States District Court for the Northern District of Ohio, sitting by designation, argued that the enablement analysis should have stuck to the specification rather than considering whether Ormco had perfected a commercially successful version of the invention:
An enablement inquiry turns on whether the specification of a challenged patent: “provide[s] sufficient teaching such that one skilled in the art could make and use the full scope of the invention without undue experimentation.” Warner-Lambert Co. v. Teva Pharm. USA, Inc., 418 F.3d 1326, 1337 (Fed. Cir. 2005) (citations omitted). “Furthermore, ‘[w]hether undue experimentation is needed is not a single, simple factual determination, but rather is a conclusion reached by weighing many factual considerations.’” Id. (quoting In re Wands, 858 F.2d 731, 737 (Fed. Cir.1988)). “Some of these considerations, commonly referred to as ‘the Wands factors,’ include ‘(1) the quantity of experimentation necessary, (2) the amount of direction or guidance presented, (3) the presence or absence of working examples, (4) the nature of the invention, (5) the state of the prior art, (6) the relative skill of those in the art, (7) the predictability or unpredictability of the art, and (8) the breadth of the claims.’" Id. (quoting Wands, 858 F.2d at 737).

Here, however, the district court did not examine the specifications to determine whether one of ordinary skill in the art could make and use the invention without undue experimentation. Indeed, there is no indication that the district court considered any of the factors enumerated in Wands. Ormco Corp. v. Align Tech., Inc., No. 03-cv-00016, slip op. at 3-7 (C.D. Cal. Aug. 23, 2004). Instead, Align only produced, and the district court only focused on, evidence of whether Ormco had perfected a commercially successful version of the invention. Commercial success, however, is not determinative of enablement. See CMFT, Inc. v. Yieldup Int’l Corp., 349 F.3d 1333, 1338 (Fed. Cir. 2003) ("Title 35 does not require that a patent disclosure enable one of ordinary skill in the art to make and use a perfected, commercially viable embodiment absent a claim limitation to that effect."). I believe, therefore, that the district court’s limited, improper examination of the enablement issue could not have supported summary judgment in Align’s favor on this issue.
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Patent Reform Legislation Slowed by Labor's Concerns

"At a time when the Chinese government is constantly being challenged to live up to its intellectual-property obligations, we do not want to take actions that may weaken ours," the AFL-CIO's legislative director, William Samuel, reportedly said in a letter to U.S. lawmakers that ultimately postponed lawmaker's plans to bring patent reform legislation to tthe floor before the August Congressional break.

According to Greg Hitt writing for the Wall Street Journal on August 27, 2007:

Eventually, more than 60 House members joined in an appeal to House leaders in both parties not to rush action. The request echoed of the same language used by the AFL-CIO: "It is especially important that these proposals not undermine
our efforts to achieve better intellectual property protection for U.S. companies overseas, particularly in China and India."

Amid the concerns, House leaders backed off of tentative plans to run the measure through the floor before lawmakers left town for the summer.

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Rome II Regulation Sets European Conflict of Law Rules for Intellectual Property Starting January 2009

European Regulation 864/2007 (the "Rome II Regulation" ) on the law applicable to non-contractual obligation was recently published in the Official Journal with a conflict of law rule on intellectual property. The Regulation will enter into force in January 11, 2009 including Article 8,

  1. The law applicable to a non-contractual obligation arising from an infringement of an intellectual property right shall be the law of the country for which protection is claimed.
  2. In the case of a non-contractual obligation arising from an infringement of a unitary Community intellectual property right, the law applicable shall, for any question that is not governed by the relevant Community instrument, be the law of the country in which the act of infringement was committed.
  3. The law applicable under this Article may not be derogated from by an agreement pursuant to Article 14 [where "The parties may agree to submit non-contractual obligations to the law of their choice. . . ."].

Article 6 of the regulation also includes a section "Unfair competition and acts restricting free competition."

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Archived updates for Monday, August 27, 2007

Federal Circuit Moving to on October 1

The former Web page address and domain name,, will continue be kept active though December 31, 2007, in order to redirect users to the new address. The new domain name brings the Federal Circuit into conformance with the web site naming convention used by the other United States Courts of Appeals. Web site authors and others who have created links to pages inside the Web page should change the URL of those links to the new URL on October 1, 2007.
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Archived updates for Friday, August 24, 2007

TGIF for Enigmatic Patent Secrets

Thanks to "What the Funny...Patents" for pointing to U.S. Patent No. 6,103,946 for "Cryptographs" by William Friedman, issued October 10, 2000 on a single application filed October 23, 1936, a pendency of just under 64 years, probably due to a secrecy order.

On February 23, 1918, German engineer Arthur Scherbius applied for a patent for a cipher machine using rotors, and, with E. Richard Ritter, founded the firm of Scherbius & Ritter. Scherbius' prior art "Enigma" patent — U.S. Patent 1,657,411 , granted in 1928:

The Enigma was used commercially from the early 1920s on, and was also adopted by the military and governmental services of a number of nations—most famously by Nazi Germany before and during World War II. The German military model gained notoriety because Allied cryptologists were able to decrypt a large number of messages that had been enciphered on the machine.

Read on for more enigmatic patent secrets that were revealed this week by the U.S. Patent and Trademark Office.

Thank Goodness It's Friday,

--Bill Heinze

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Archived updates for Thursday, August 23, 2007

Highlights of the New USPTO Rules on Claims, Continuing and Related Applications, and Final Action Practice

Thanks to Stephen Nipper at the Invent Blog for pointing to the USPTO's new webpage with additional information regarding the changes to claims and continuations practice, including a "Section-by-Section Rule Summary, " 45-pages of "Frequently Asked Questions" and "Highlights of the Changes in this Final Rule:"


The applicant must submit an examination support document (ESD) if an application
contains more than five independent claims or more than twenty-five total claims (5/25 claim threshold), counting all of the claims in any other copending application having a patentably indistinct claim. A claim that refers to a claim of a different statutory class of invention will also be treated as an independent claim. For example, a method of using the composition of claim 1 comprising…. In the following example, each claim will be considered to be 3 claims: Claim 4. A device according to claim 1, 2, or 3, further comprisin . . . Claim 5. A device according to claim 4, further comprising. . . .

For applications that exceed five/twenty-five claim threshold because they contain claims to more than one invention, the applicant has the option of submitting a suggested restriction requirement (SRR) and election of an invention to which there are no more than five independent claims or twenty-five total claims.

If an application exceeds the five/twenty-five claim threshold and does not contain a SRR or ESD, the USPTO will issue a notice giving the applicant time to provide an ESD or amend the application to be within the five/twenty-five claim threshold.

An ESD will not be required in a reissue application if a reissue application does not seek to change the claims in the patent being reissued. A change in the claims in the patent being reissued is sought either by:

  • An amendment to a claim or addition of a claim; or
  • An amendment to the specification which changes a claim.

Reexaminations are proceedings, not applications.

The change is applicable to all applications in which a first action on the merits has not been mailed by November 1, 2007. The USPTO will issue a notice in applications pending before November 1, 2007 giving the applicant time to provide an ESD or an SRR, or to amend the application to be within the five/twenty-five claim threshold.

Continued Examination Filings

An application or chain of continuing applications may include two continuing
applications (continuation or continuation-in-part applications), and a single request for continued examination (RCE) in any one of these three applications (the initial or two continuing applications), without justification.

The applicant may file divisional applications to the non-elected invention(s) only if the USPTO issues a restriction requirement in the prior application.

If applicant presents a benefit claim that is not permitted, the Office will refuse to enter the improper benefit claim and refuse the benefit of the filing date of the prior-filed application.

The applicant must identify the claims in a continuation-in-part application that the
applicant believes are entitled to the parent application’s filing date.

The USPTO will permit an applicant to have “one more” continuing application after
August 21, 2007, regardless of the number of continuing applications filed before
November 1, 2007. Any RCE filed on or after November 1, 2007 that is a second or subsequent RCE in an application family will require a petition and showing.

For an application that contains a generic claim, Applicants should conclude prosecution of the generic claim in the initial application and its continuation or CIP applications, including exhaustion of any available appeals, before filing a divisional application to a non-elected species. For an application that contains withdrawn claims that could be rejoined under the rejoinder practice, Applicants should cancel the withdrawn claims before filing a divisional application to the non-elected invention.

Related Applications and Double Patenting

The applicant must identify other commonly owned pending applications or patents that: (1) have a claimed filing or priority date within two months of the claimed filing or priority date of the application; and (2) name at least one inventor in common with the application.

A rebuttable presumption will exist that the application and the other commonly owned application(s) or patent(s) contain at least one patentably indistinct claim, if the other application or patent has:

  • An inventor in common with the application;
  • A claimed filing or priority date that is the same as the claimed filing or priority date of the application; and
  • Substantial overlapping disclosure with the application where the other application or patent has support for at least one claim in the application.

If the rebuttable presumption under § 1.78(f)(2) exists, applicant must either:

  • Rebut the presumption by explaining how the application contains only patentably distinct claims; or
  • Submit a terminal disclaimer

within the later of:

  • Four months from the actual filing date of the application or from the date on which the national stage commenced;
  • The date on which a patentably indistinct claim is presented; or
  • Two months from the mailing date of the initial filing receipt in the other application.

In addition, the applicant must also file a terminal disclaimer or explain how the applications (or application and patent) contain only patentably distinct claims if the applications also have the same claimed filing or priority date and contain substantial overlapping disclosure. If the other application is pending, applicant must also explain why there are two or more pending applications which contain patentably indistinct claims.

The USPTO may require the applicant to put all of the patentably indistinct claims in a single application unless there is good reason for multiple copending applications having patentably indistinct claims.

Final Action Practice

The Office is retaining the first action final rejection practice in a continuing application or after an RCE. Applicants may guard against first action final rejection by first seeking entry of the amendment, argument, or new evidence after final rejection under § 1.116.

A second or subsequent Office action may be made final, except when the action contains a new ground of rejection that is not:

  • Necessitated by an amendment of the claims, including an amendment to eliminate unpatentable alternatives;
  • Based on an IDS filed after a FAOM with the fee;
  • Based upon a double patenting rejection;
  • Necessitated by an identification of claims in a CIP application that is supported by a prior-filed application; or
  • Necessitated by a showing that a claim element is a means- (or step-) plus-function claim element.

Professor Wegner has already called the new rules "The Single Most Complex PTO Rulemaking in the History of the APA."

Matt Buchanan at Promote the Progress has also compiled a great resource, "The PTP Patent Reform Library."

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France to Ratify London Agreement on Patent Language

The IPKat is purring Est-ce que c'est vrai? According to a recent (machine translated) report in Le Monde, France is just about to ratify the London agreement:
In the next days, we will announce a radical reformation of the credit tax
research for that 100% research expenditures are taken into account.
Simultaneously, one will create the statute of "young university business",
merge [the agencies of assistance to the businesses] Oseo and A2I, and, at last,
ratify the London agreement on the patents.

The Kat is looking forward to "the long-awaited day when applicants will finally be able to get a European patent with decent coverage without the need to spend huge amounts of money on translations." More about the London Agreement here.
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Is Legal Outsourcing Where the Real Money Is?

According to Cynthia Cotts and Liane Kufchock writing for Bloomberg,
U.S. law firms are required under ethics rules to disclose markups on what they pay foreign attorneys who aren't licensed to practice law in the U.S. Such rules don't apply to contract legal work performed by lawyers admitted to practice in U.S. jurisdictions [as long as the charges are reasonable]. . . . "Law firms can earn more by using labor they can mark up without disclosure,'' said Stephen Gillers, professor of legal ethics at New York University School of Law in Manhattan. . . [And corprations] armed with the knowledge of how little law firms might pay for offshore work, can use the threat of cutting them out and sending legal tasks overseas on their own to force law firms to reduce fees. . . ."
Other points they make:
  • India's Pangea3's says 80 percent of its clients are corporations, 20 percent law firms
  • Integreon says it has about 45 company clients and 15 law firm clients
  • ValueNotes says offshore revenue is 45 corporate, 36 percent law firm

"When does a mark-up become unreasonable within the meaning of the Code of Professional Responsibility's requirement that lawyers charge reasonable fees," asks Rees Morrison;

If a firm pays a temp agency $70 an hour for a contract lawyer (with the lawyer receiving $30 after the agency takes its cut) and bills clients $200 an hour for services, is that reasonable? Would a $300-an-hour rate be reasonable? If you find these rates troubling, is it because you believe that the client is getting ripped off -- or because the contract attorney is getting paid so little?

Of course, a few U.S. law firms might tell you that it costs $1000 per hour just to manage it all.

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Board Not Precluded By District Court Claim Construction Where USPTO Was Not A Party

In TransTexas Holdings (August 22, 2007), the Federal Circuit held that the USPTO's Board of Patent Appeals and Interferences did not have to give preclusive effect to a district court’s Markman order on claim construction under the doctroine of non-mutual collateral estoppel:

Traditionally, issue preclusion, also known as collateral estoppel, applied only where the same parties to an earlier proceeding were involved in later litigation involving the same issue. See Restatement (Second) of Judgments § 27 (1982); Id. § 29 Reporter’s Note. More modern decisions in some circumstances apply issue preclusion even where the parties to the subsequent suit are not the same. See Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326-33 (1979); Restatement (Second) Judgments § 29. The latter doctrine is known as non-mutual collateral estoppel, and it is this latter doctrine that Trans Texas relies on here.

Issue preclusion is not warranted in this case because the PTO was not a party to the earlier litigation. Our case law has identified four prerequisites to the application of issue preclusion: "(1) identity of the issues in a prior proceeding; (2) the issues were actually litigated; (3) the determination of the issues was necessary to the resulting judgment; and, (4) the party defending against preclusion had a full and fair opportunity to litigate the issues." Jet, Inc. v. Sewage Aeration Sys., 223 F.3d 1360, 1365-66 (Fed. Cir. 2000) (emphasis added).

The PTO as "the party against whom the earlier decision is asserted" thus must have been accorded "a ‘full and fair opportunity’ to litigate that issue in the earlier case." Allen v. McCurry, 449 U.S. 90, 95 (1980); Freeman, 30 F.3d at 1467 (Fed. Cir. 1994). However, the PTO was not even a party to the earlier district court litigation and cannot be bound by its outcome. Trans Texas nevertheless argues that this requirement should somehow be excused because the PTO proceedings were ex parte.

This argument simply makes no sense. The PTO is plainly a party to these appeal proceedings, and if it were not treated as a party, there would be no basis for even considering the application of issue preclusion in the first place.

. . . Contrary to Trans Texas’s argument, our decision in Freeman does not require the application of issue preclusion. In Freeman, we held that a patentee in a PTO proceeding was barred by issue preclusion from asserting a claim construction already rejected in a district court infringement action brought by the patentee against a third party. 30 F.3d at 1469. Nothing in Freeman suggests that issue preclusion could be applied against the PTO or another non-party to the infringement proceeding. 7

7. In light of our resolution of Trans Texas’s issue preclusion argument, we have no need to decide whether non-mutual collateral estoppel against the government would be permissible at all in the circumstances of this case. See United States v. Mendoza, 464 U.S. 154 (1984).

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USPTO Patent Fees Increase 2.8% on September 30, 2007 to Match Cost of Living Index

On August 22, 2007, the USPTO announced Revision of Patent Fees for Fiscal Year 2007 , where, "Based on the revised projected [Consumer Price Index for All Urban Consumers] CPI–U, patent statutory fee amounts will be adjusted by 2.8 percent in this final rule." The new fees become effective September 30, 2007.

The fee amounts were rounded by applying standard arithmetic rules so that the amounts rounded will be convenient to the user. Fee rates for other than a small entity of $100 or more were rounded to the nearest $10. Fee rates of less than $100 were rounded to an even number so that any comparable small entity fee amount will be a whole number.

So, for example, the basic filing fee for a large entity will go from $300.00 to $310.00.

Get the latest fee information here.
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Archived updates for Tuesday, August 21, 2007

Enhanced Damages for Willful Infringement Require "Objective Recklessness"

In In re Seagate Technology, LLC (August 20, 2007), en banc the Federal Circuit overruled Underwater Devices Inc. v. Morrison-Knudsen Co., 717 F.2d 1380 (1983), and clarified the scope of the waiver of attorney-client privilege and work product protection that results when an accused patent infringer asserts an advice of counsel defense to a charge of willful infringement.

According to the opinion by Circuit Judge Mayer,

. . . [W]e overrule the standard set out in Underwater Devices and hold that proof of willful infringement permitting enhanced damages requires at least a showing of objective recklessness. Because we abandon the affirmative duty of due care, we also reemphasize that there is no affirmative obligation to obtain opinion of counsel.

Source: Professor Dennis Crouch at Patently-O

. . . [T]o establish willful infringement, a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent. See Safeco, slip op. at 19 ("It is [a] high risk of harm, objectively assessed, that is the essence of recklessness at common law."). The state of mind of the accused infringer is not relevant to this objective inquiry. If this threshold objective standard is satisfied, the patentee must also demonstrate that this objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer. We leave it to future cases to further develop the application of this standard. [However,] we would expect, as suggested by Judge Newman, post at 2, that the standards of commerce would be among the factors a court might consider.

. . . [W]hen an accused infringer’s post-filing conduct is reckless, a patentee can move for a preliminary injunction, which generally provides an adequate remedy for combating post-filing willful infringement. See 35 U.S.C. § 283;, Inc. v., Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001). A patentee who does not attempt to stop an accused infringer’s activities in this manner should not be allowed to accrue enhanced damages based solely on the infringer’s post-filing conduct. Similarly, if a patentee attempts to secure injunctive relief but fails, it is likely the infringement did not rise to the level of recklessness.

. . . A substantial question about invalidity or infringement is likely sufficient not only to avoid a preliminary injunction, but also a charge of willfulness based on post-filing conduct. . . . We also recognize that in some cases a patentee may be denied a preliminary injunction despite establishing a likelihood of success on the merits, such as when the remaining factors are considered and balanced. In that event, whether a willfulness claim based on conduct occurring solely after litigation began is sustainable will depend on the facts of each case.

. . . Because willful infringement in the main must find its basis in prelitigation conduct, communications of trial counsel have little, if any, relevance warranting their disclosure, and this further supports generally shielding trial counsel from the waiver stemming from an advice of counsel defense to willfulness. Here, the opinions of Seagate’s opinion counsel, received after suit was commenced, appear to be of similarly marginal value. Although the reasoning contained in those opinions ultimately may preclude Seagate’s conduct from being considered reckless if infringement is found, reliance on the opinions after litigation was commenced will likely be of little significance.

In sum, we hold, as a general proposition, that asserting the advice of counsel defense and disclosing opinions of opinion counsel do not constitute waiver of the attorney-client privilege for communications with trial counsel. We do not purport to set out an absolute rule. Instead, trial courts remain free to exercise their discretion in unique circumstances to extend waiver to trial counsel, such as if a party or counsel engages in chicanery. We believe this view comports with Supreme Court precedent, which has made clear that rules concerning privileges are subject to review and revision, when necessary. See Jaffee, 518 U.S. at 9 (noting that federal courts are "to ‘continue the evolutionary development of testimonial privileges.’" (quoting Trammel, 445 U.S. at 47)).

. . . [We also] hold that, as a general proposition, relying on opinion counsel’s work product does not waive work product immunity with respect to trial counsel. Again, we leave open the possibility that situations may arise in which waiver may be extended to trial counsel, such as if a patentee or his counsel engages in chicanery. And, of course, the general principles of work product protection remain in force, so that a party may obtain discovery of work product absent waiver upon a sufficient showing of need and hardship, bearing in mind that a higher burden must be met to obtain that pertaining to mental processes.

And, as added by Circuit Judge Newman's concurring opinion,

Although new uncertainties are introduced by the court's evocation of "objective standards" for such inherently subjective criteria as "recklessness" and "reasonableness," I trust that judicial wisdom will come to show the way, in the common-law tradition. The standards of behavior by which a possible infringer evaluates adverse patents should be the standards of fair commerce, including reasonableness of the actions taken in the particular circumstances. It cannot be the court's intention to tolerate the intentional disregard or destruction of the value of the property of another, simply because that property is a patent; yet the standard of "recklessness" appears to ratify intentional disregard, and to reject objective standards requiring a reasonable respect for property rights.

The remedial and deterrent purposes of multiplied damages, and their measure for a particular case, are best established by the district court in light of the original purposes of 35 U.S.C. '284, as set forth in Judge Gajarsa's concurring opinion. The fundamental issue remains the reasonableness, or in turn the culpability, of commercial behavior that violates legally protected property rights.

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Archived updates for Monday, August 20, 2007

USPTO Continuation Rules Published August 21, Take Effect November 1, Webinar on Thursday August 23

The Department of Commerce’s United States Patent and Trademark Office (USPTO) new claims and continuation rules were published on August 21, 2007 and will be effective on November 1, 2007.

The new rules have been modified, relative to the rules that were originally proposed early last year, in response to the extensive comments the USPTO received from the public. Here are some early leaks:
  1. Each initial application is limited to 2 continuing applications and 1 RCE. Additional continuing applications/RCEs may be filed upon petition. This was changed from the proposed rule in which each application was limited to one continuing application.

  2. Divisional applications may be filed only in response to a restriction requirement having been made by the Office. Divisional applications may be filed during the pendency of the initial application or any of its continuing applications. In the proposed rule, divisional applications were limited to being filed only during the pendency of the initial application. Each divisional application is also limited to 2 continuing applications and 1 RCE. Additional continuing applications/RCEs of a divisional application may also be filed upon petition.

  3. The claims in each application may not exceed 5 independent claims or 25 total claims absent the applicant assisting the examination process through the filing of an Examination Support Document (ESD). This is a change from the proposed rule where an application could be filed with any number of claims but the applicant must elect 10 representative claims for examination absent the filing of an ESD.

  4. The applicant must submit the serial numbers of all other applications filed within two months having the same assignee and at least one inventor in common. For those applications that additionally have a common effective filing date and substantially overlapping disclosures, the rule creates a rebuttable presumption of obviousness-type double patenting between them. This will enhance the examination process by saving examiner resources since the examiner will not have to research information that the applicant is in the best position to easily provide prior to examination.
A USPTO webinar on the new rules is scheduled for Thursday, August 23, 2007. To register for the free webinar, click on the following link: and will be available for replay by Monday, August 27.

According to Professor Crouch at Patently-O, of the approximately 4400 litigated patents that issued between January 1, 2002 and August 1, 2007, 35% of had more than 25 claims. Of the
aApproximately 3000 utility patents that issued on August 21, 2007, only 18% had more than 25 claims. and, of the approximately 6600 patent applications that were published on August 16, 2007, 27% included more than 25 claims. "A troubling aspect of the new rules is their potential to have a disproportional impact on valuable patents," notes the Missouri School of Law Professor.
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Archived updates for Saturday, August 18, 2007

Texas's Top Trollers

TrollTracker "examined all of the 60 troll cases filed between December 1, 2006 and May 31, 2007 in the Eastern District of Texas and came up with a "T-List" of Firms Representing Patent Trolls
  1. Ward & Smith of Longview, Texas (21 troll cases)
  2. Eric Albritton of Longview, Texas (17 troll cases)
  3. Brown McCarroll of Longview, Texas (15 troll cases)
  4. Ireland, Carroll & Kelley of Tyler, Texas (11 troll cases)
  5. (tied) = IP Navigation Group of "Marshall, Texas" (11 troll cases)
  6. . . .
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Archived updates for Friday, August 17, 2007

Lengthy and Detailed Enforcement Discussions "Not Unfit for Judicial Resolution" by DJ Action

In Sony Electronics v. Guardian Media Technologies (August 3, 2007) the Federal Circuit held that an actual controversy had arisen between Sony and Guardian within the meaning of the Declaratory Judgment Act for what appear to be fairly typical communications between patent counsel in order to clarify the scope of an infringement claim.

On September 24, 1999, an attorney acting on behalf of Peter S. Vogel sent Sony a "Notice of Patent Infringement" letter. On October 4, 1999, Sony informed Vogel’s attorney by letter that it was investigating the matter and asked Vogel’s attorney to provide "claim charts specifically describing why . . . Vogel’s patents are relevant to the Sony products identified in [the September 24] letter." On October 28, 1999, Vogel’s attorney provided the requested claim charts, accompanied by a letter containing the subject line: "Claim Charts indicating Sony product infringement of U.S. patents 4,930,158 & 4,930,160 and corresponding foreign patents." Sony responded by letter on May 8, 2000, stating that it had completed its investigation and that it had "some serious questions about the validity" of the ’158 and ’160 patents. Vogel never responded.

Over four years later, on August 31, 2004, an attorney representing Guardian sent a letter to Sony Home Electronics Network Co.2 requesting a meeting to discuss the possibility of Sony taking licenses. The letter stated that Guardian was offering discounts to early licensees, as well as the option of a "paid up license" for the life of the patents in exchange for a lump sum payment. According to the letter, any license agreement would "likely include [compensation for] products sold since 1999 since that was when the United States Government mandated parental control functionality in televisions with a screen size of 13 inches or larger." It further mentioned that an unspecified court had awarded a royalty rate of $1.15 per unit "for a single U.S. Patent on corresponding technology." On October 26, 2004, Guardian sent another letter to Sony Home Electronics Network Co. requesting a response to its August 31, 2004 letter.

On December 3, 2004, Guardian sent a third letter stating that Sony’s failure to respond was "unacceptable." It further stated that Guardian "require[d] that Sony explain in detail why it does not need a license to GUARDIAN’s patents." Guardian requested a response by December 24, 2004, and restated its offer of a discounted license if Sony acted quickly. A further letter on April 12, 2005 described the basis for Guardian’s position that the prior art identified by Sony did not disclose each of the elements of the asserted claims of the ’158 and ’160 patents. Included with the letter were detailed charts, which compared, on a limitation-by-limitation basis, a number of the claims of the ’158 and ’160 patents to representative Sony products.3 The accompanying letter stated that the infringement analyses in Guardian’s claim charts were "applicable to all other Sony products that incorporate V-chip functionality."

On June 21, 2005, the parties met in person. Specific details regarding this meeting are not apparent from the record. On July 7, 2005, Guardian sent a letter claiming that Sony’s "royalty obligations far exceed $31,050,000." The letter went on to offer Sony a "fully paid-up license" for $9 million, which would "include each of Guardian’s patents, and [would] cover every V-chip enabled product that Sony has sold and will sell for the life of each of the Guardian patents." The letter stated that the offer would expire on August 31, 2005. Sony did not respond to this letter. On August 24, 2005, Guardian wrote again, requesting a response.

According to the opinion by Circuit Judge Prost:

Prior to Sony filing its complaint, the parties had taken adverse positions regarding whether Sony’s sale of products possessing parental rating control technology infringed any valid claims of the ’158 and ’160 patents. On the one side, Guardian communicated to Sony its position that certain identified Sony products infringed the ’158 and ’160 patents. For example, Guardian provided Sony with detailed infringement analyses, which compared, on a limitation-by-limitation basis, a number of the claims of the ’158 and ’160 patents to specific Sony products. Guardian further alleged that its infringement analyses applied to all other Sony products possessing “V-chip functionality,” i.e., parental rating control technology, and asserted that it was thus entitled to royalties exceeding $31 million. Guardian also communicated its position that the prior art identified by Sony did not disclose every element of the asserted claims. In short, Guardian’s position was that the ’158 and ’160 patents were valid and infringed by Sony and that Guardian was therefore entitled to past and future royalties based on that infringement. On the other side, Sony maintained that the asserted claims of the ’158 and ’160 patents were invalid in view of certain identified prior art references.

Nothing about this dispute makes it unfit for judicial resolution. Sony does not request “an opinion advising what the law would be upon a hypothetical state of facts.” Id. at 241. Indeed, Guardian has explicitly identified the patents it believes that Sony infringes, the relevant claims of those patents, and the relevant Sony products that it alleges infringe those patents. Sony has identified the specific prior art references that it believes render the asserted claims invalid. In the words of the Supreme Court, the parties’ dispute “is manifestly susceptible of judicial determination. It calls, not for an advisory opinion upon a hypothetical basis, but for an adjudication of present right upon established facts.” Id. at 242. In so holding, we reject Guardian’s suggestion that there can be no jurisdiction in the courts because it was at all times willing to negotiate a “business resolution” to the dispute. In SanDisk, we recognized that a patentee’s apparent continued willingness to engage in licensing negotiations does not prevent a plaintiff from maintaining a declaratory judgment suit. 480 F.3d at 1382. Accordingly, even if the parties’ interactions in this case could be characterized as “negotiations,” Sony was within its rights to terminate them when it determined that further negotiations would be unproductive. Id. Although Guardian may have wanted to negotiate with Sony, Sony was not required to negotiate with Guardian.

In short, because Guardian asserts that it is owed royalties based on specific past and ongoing activities by Sony, and because Sony contends that it has a right to
engage in those activities without a license, there is an actual controversy between the parties within the meaning of the Declaratory Judgment Act. See id. at 1381 (“[At least] where a patentee asserts rights under a patent based on certain identified ongoing or planned activity of another party, and where that party contends that it has the right to engage in the accused activity without license, an Article III case or controversy will arise and the party need not risk a suit for infringement by engaging in the identified activity before seeking a declaration of its legal rights.”). The district court, therefore, erred in dismissing Sony’s complaint for lack of subject matter jurisdiction.

. . . Here, unlike in EMC, there is no affirmative evidence to suggest that appellants filed this suit in order to obtain a more favorable bargaining position in any ongoing license negotiations. In addition, while this litigation may have had the effect of weakening Guardian’s bargaining position relative to third parties, we do not think it appropriate to infer that appellants, therefore, filed this suit as an intimidation tactic to gain leverage in any future negotiations with Guardian. Similarly, we do not think it appropriate under the circumstances of this case to draw any inference from appellants’ decisions to file these lawsuits simultaneously. Even if these suits have had the effect of placing appellants in a more favorable negotiating position, that effect is not a sufficient reason to decline to hear the suit.

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Archived updates for Thursday, August 16, 2007

USPTO Public Advisory Committe Nominations Due September 1, 2007

Persons wishing to submit nominations for the USPTO's Patent and Trademark Public Advisory Committees should send the nominee’s resume´ to Chief of Staff, Office of the Under Secretary of Commerce for Intellectual Property and Director of the USPTO, Post Office Box 1450, Alexandria, Virginia 22313–1450; by electronic mail to:
  • for the Patent Public Advisory Committee or
  • for the Trademark Patent Public Advisory Committee; by
  • facsimile transmission marked to the Chief of Staff’s attention at (571) 273–0464, or
  • by mail marked to the Chief of Staff’s attention and addressed to the Office of the Under Secretary of Commerce for Intellectual Property and Director of the USPTO, Post Office Box 1450, Alexandria, Virginia 22313–1450.

The Advisory Committees’ duties include:

  • Review policies, goals, performance, budget, and user fees of the USPTO relating to patents and trademarks, respectively, and advise the Under Secretary of Commerce for
    Intellectual Property and Director of the USPTO on these matters; and

  • Within 60 days after the end of each fiscal year:
  1. Prepare an annual report on matters listed above;

  2. transmit a report to the Secretary of Commerce, the President, and the Committees on the Judiciary of the Senate and the House of Representatives; and

  3. publish the report in the Official Gazette of the USPTO.
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New U.S. Inter Partes Administrative Trademark Rules Effective November 1

Effective November 1, 2007, the United States Patent and Trademark Office (Office) is amending the Trademark Rules of Practice to require plaintiffs in Trademark Trial and Appeal Board (Board) inter partes proceedings
  • to serve complaints or claims directly on defendants;
  • to utilize in Board inter partes proceedings a modified form of the disclosure practices included in the Federal Rules of Civil Procedure; and
  • to delete the option of making submissions to the Board in CD–ROM form.

In addition, certain amendments are being made to clarify rules, conform the rules to current practice, and correct typographical errors or deviations from standard terminology.

For example, the Board’s notice of the commencement of the proceeding (commonly referred to as the institution order) will set forth specific dates for the various phases in a case. Since each deadline or phase is measured from the date of the institution order:

  1. Due date for an answer—40 days from the date of the institution order.
  2. Deadline for a disclosure/discovery/settlement conference—30 days from
    the date the answer is due.
  3. Discovery opens—30 days after the date the answer is due.
  4. Deadline for making initial disclosures—30 days from the opening of the discovery period.
  5. Deadline for disclosure of expert testimony—30 days prior to close of discovery.
  6. Discovery closes—180 days from the opening date of the discovery period.
  7. Deadline for plaintiff’s pretrial disclosures—15 days prior to the opening of plaintiff’s testimony period.
  8. Plaintiff’s 30-day testimony period— closes 90 days after the close of discovery.
  9. Deadline for defendant’s pretrial disclosures—15 days prior to the opening of defendant’s testimony period.
  10. Defendant’s 30-day testimony period—closes 60 days after the close of plaintiff’s testimony period.
  11. Deadline for plaintiff’s rebuttal pretrial disclosures—15 days prior to the opening of plaintiff’s rebuttal testimony period.
  12. Plaintiff’s 15-day rebuttal testimony period—closes 45 days from close of defendant’s testimony period. (Institution date plus 445 days.)
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Japan Joins USPTO and EPO in the 'PDX' Priority Document Exchange Program

As of July 28, 2007, the USPTO can now exchange priority documents electronically with the Japan Patent Office (JPO) as well as the European Patent Office (EPO). The USPTO exchanges priority documents with the JPO and EPO through secure, electronic connections using the Trilateral Document Access (TDA) Web Services at no cost to the applicant.

For U.S. applications filed on or after July 28, 2007, the USPTO will automatically attempt to electronically retrieve a copy of any JPO priority document, to which priority is claimed in a U.S. application. The USPTO already automatically attempts to electronically retrieve a copy of any EPO priority document to which priority is claimed in a U.S. application. However, priority documents will be provided to the JPO and EPO only if one of the following criteria is met:
  • The U.S. application is published or patented; -OR-
  • The U.S. application has cleared national security review and the applicant submitted written authorization to transmit the priority document to the intellectual property specified. Use of form PTO/SB/39 entitled “Authorization To Permit Access To Application By Participating Offices” is encouraged for this purpose .
Learn more here and here.
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A Science Search Engine

Scirus is a science-specific search engine on the Internet for searching more than 415 million science-related pages. According to their site, Scirus helps you quickly locate scientific information on the Web:

  • Filters out non-scientific sites. For example, if you search on REM, Google finds the rock group - Scirus finds information on sleep, among other things
  • Finds peer-reviewed articles such as PDF and PostScript files, which are often invisible to other search engines.
  • Searches the most comprehensive combination of web information, preprint servers, digital archives, repositories and patent and journal databases. Scirus goes deeper than the first two levels of a Web site, thereby revealing much more relevant information.
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The Latest on Joint Patent Infringement from East Texas

Thanks to "Peter Zura's 271 Patent Blog" for pointing out AdvanceMe Inc v. RapidPay LLC, (6:05-cv-424, ED Tex.), August 14, 2007 where, although the patent was held to be invalid, the court held that both Reach and MMT directly infringe the asserted claims of the ‘281 patent because all of the elements of the patent claims are performed either by Reach or MMT, the merchants that enter into contracts with Reach or MMT, the merchant processors that enter into contracts with Reach or MMT, or agents or instrumentalities of these entities.

Claim 1 of the ‘281 patent reads:

A method for automated payment, comprising:

at a merchant, accepting a customer identifier as payment from the customer and
electronically forwarding information related to the payment to a computerized merchant processor;

at the computerized merchant processor, acquiring the information
related to the payment from the merchant, authorizing and settling the
payment, and forwarding at least a portion of the payment to a computerized
payment receiver as payment of at least a portion of an obligation made by
the merchant; and

at the computerized payment receiver, receiving the portion of the payment
forwarded by the computerized merchant processor and applying that portion to the outstanding obligation made by the merchant to reduce such obligation.

According to the Memorandum and Order by Judge Davis:
. . . Liability for direct infringement cannot be avoided by interposing an agent or independent contractor between the defendant and the infringing acts. Free Standing Stuffer, Inc. v. Holly Dev. Co., 187 U.S.P.Q. 323, 335 (N.D. Ill. 1974) (citing Crowell v. Baker Oil Tools, Inc., 143 F.2d 1003 (9th Cir. 1944)). Even if a defendant does not perform all patented method steps, the defendant is still liable for direct infringement where it is demonstrated by a preponderance of the evidence that (1) the steps of the patented method are being performed, and (2) defendant has a sufficient connection to, or control over, the entity or entities performing part of the patented method. Id. (finding defendant liable for direct infringement where it instructed its advertising agency to perform or have performed certain steps of the patented process); Cordis Corp. v. Medtronic AVE, Inc., 194 F. Supp. 2d 323, 349 n.19 (D. Del. 2002) (finding defendant liable for direct infringement where there was a close relationship between defendant and the doctors performing part of the patented process); Shields v. Halliburton Co., 493 F.Supp. 1376, 1389 (W.D. La. 1980), aff’d, 667 F. 2d 1232 (5th Cir. 1982) (finding defendants liable for infringement based on the combined actions of two entities); Metal Film Co. v. Melton Corp., 316 F. Supp. 96, 110 (S.D.N.Y. 1970) (finding defendant liable for direct infringement because it arranged for other entities to perform the first step of the patented method); Marley Mouldings, Ltd. v. Mikron Indus., Inc., No. 02 C 2855, 2003 WL 1989640, at *2-3 (N.D. Ill. Apr. 30, 2002) (denying motion for summary judgment of noninfringement where two entities performed steps of patented process); Charles E. Hill v., Inc., No. Civ. A. 2:02-CV-186, 2006 WL 151911, at *2 (E.D. Tex. Jan. 19, 2006) (Ward, J.) (denying motion for summary judgment of noninfringement where two entities performed steps of patented process and were in the same vendor-customer relationship claimed in the invention).

A showing of “agency” or “working in concert” is not required in order to
establish a sufficient connection between the defendant and the third party or
parties performing the patent method’s steps. Charles E. Hill, 2006 WL 151911,
at *2. The sufficient connection can be shown through a contractual relationship between the defendant and the third party or parties performing the steps of the patented method. Id.

When evaluating whether a defendant has sufficient connection to, or control over, the entity or entities performing part of the patented method, courts look to the inventions claimed in the patent and the relationships described therein. Id. at *2. That the relationships described in the patent are the same relationships relied upon to establish sufficient connection to, or control over, the entity or entities performing part of the patented method is probative. Id. at *3.

. . . MMT and Reach’s programs satisfy each of these claims either literally or
under the doctrine of equivalents. For example, the forwarding step in the
second element of Claim 1 is literally performed under both a split funding
method recited in the Reach Financial documentation and under the back-to-back
ACH variation as described in certain testimony of Reach Financial witnesses. The back-to-back ACH variation performs the same forwarding step, but employs an
additional intervening step. However, an accused method does not avoid literally infringing a method claim having the transitional phrase “comprising” simply
because it employs additional steps. Suntiger, Inc. v. Scientific Research Funding Group, 189 F.3d 1327, 1336 (Fed. Cir. 1999) (citation omitted). To the extent the back-to-back ACH variation does not constitute literal performance of the forwarding step, it constitutes an equivalent step under the doctrine of equivalents.

Peter notes that "Interestingly, the opinion did not mention BMC v. PaymenTech, where the lower court dismissed BMC's joint-infringement claims. This case is currently before the CAFC (No. 2006-1503), and was recently noted in the [Federal Circuit's] PharmaStem case [at footnote 1, on July 20, 2007]:"

The parties and the district court discussed the issue of joint infringement in the context of determining whether there was infringing conduct sufficient to serve as a predicate for a finding of contributory infringement. PharmaStem did not argue before the district court, and does not argue here, that liability could be premised on a theory of "joint" or "divided" infringement, even in the absence of a finding of contributory infringement under 35 U.S.C. § 271(c). Under that theory, two related parties are both deemed liable for direct infringement of a method patent when each performs some steps of the claimed method. The viability and scope of that theory of liability is a subject of considerable debate; it has been addressed in a number of district court cases, adverted to in a few of this court’s cases, and discussed at some length by commentators. See On Demand Mach. Corp. v. Ingram Indus., Inc., 442 F.3d 1331, 1334 (Fed. Cir. 2006); Cross Med. Prods., Inc. v. Medtronic Sofamor Danek, Inc., 424 F.3d 1293, 1311 (Fed. Cir. 2005); Kristin E. Gerdelman, Subsequent Performance of Process Steps by Different Entities: Time to Close Another Loophole in U.S. Patent Law, 53 Emory L.J. 1987 (2004); Mark A. Lemley et al., Divided Infringement Claims, 33 AIPLA Q.J. 255 (2005); Sriranga Veeraraghavan,Joint Infringement of Patent Claims: Advice for Patentees, 23 Santa Clara Computer & High Tech L.J. 211 (2006). That issue is squarely presented in a case now pending before this court, BMC Resources, Inc. v. Paymentech, L.P., No. 2006-1503. In this case, PharmaStem’s theory of liability was that the defendants were liable under section 271(c) for contributory infringement, not under section 271(a) for direct infringement, and PharmaStem has continued to press that theory on appeal. We therefore are not presented with the question whether the defendants could have been held liable under section 271(a) under a theory of joint direct infringement through their activities in conjunction with the transplanters.

"While "joint infringement" is established where one party performs all but one step of a patented process and the other step is performed at his direction, the prevailing view is that a claim should be drafted in a manner that all steps can be performed by a single actor," writes Professor Wegner. "Failure to draft such a claim leaves the patentee powerless. For an extensive review of this subject, see Harold C. Wegner, E-Business Patent Infringement: Quest for a Direct Infringement Claim Model, presented to the SOFTIC 2001 Symposium, A more recent treatment is provided by Mark A. Lemley et al., Divided Infringement Claims, 33 AIPLA Q. J. 189 (2005)." Realsource, Inc. v. Best Buy Co., Inc., 2007 WL 1484544 (W.D.Tex. 2007); and Muniauction, Inc. v. Thomson Corp., __ F.Supp.2d __, 2007 WL 2225847 (W.D.Pa. 2007), "manifest the continued confusion in the law."

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Archived updates for Wednesday, August 15, 2007

Patent Searches at European National Offices

According to Managing Intellectual property on August 9, 2006:

From September 1 the EPO will no longer accept search work other than standard
patentability searches, although it has promised to complete work that it has
already started. Instead, 14 national offices, including Austria, Hungary, the
Czech Republic and Portugal will offer a range of additional search services.
Some, such as Bulgaria, will provide standard and special searches in particular
technical fields
. Others, such as Denmark, will offer extra services including
monitoring competitors’ patenting activities.
Please send me your coments on any search work that you might have received from these sources.
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Archived updates for Friday, August 10, 2007

USPTO Proposes New Rules for Alternative Claim Language

As part of its ongoing efforts to enhance patent quality and reduce pendency in accordance with its "21st Century Strategic Plan," the U.S Patent and Trademark Office published a Notice of Proposed Rulemaking on August 10, 2007 to revise its treatment of claims that recite alternatives, including claims use Markush groups and/or other forms of alternative language. To be ensured of consideration, written comments must be received on or before October 9, 2007. No public hearing will be held. For further official information, contact Kathleen Kahler Fonda, Legal Advisor, Office of the Deputy Commissioner for Patent Examination Policy, by telephone at (571) 272–7754; by mail addressed to: Box Comments Patents, Commissioner for Patents, P.O. Box 1450, Alexandria, VA 22313–1450; or by facsimile to (571) 273–7754.

Current Office policy requires examination of all species of a claim that recites a Markush group when the alternatives are sufficiently few in number or so closely related that search and examination can be made without serious burden.  Even where the search and examination of a claim that has "unity of invention" would require serious burden, the examiner must determine the patentability of the claim. In such case, however, the examiner may require applicant to elect a single species under 37 CFR 1.146 for initial search and examination to facilitate examination on the merits. If the elected species is not allowable, examination of the Markush claim will be limited to the elected species and any species not patentably distinct therefrom, and any separate claims to the elected species and any species not patentably distinct therefrom. Claims that drawn to species patentably distinct from the elected species are held withdrawn from further consideration. If the elected species is allowable, then the search and examination of the Markush claim will be extended to non-elected species to the extent necessary to determine patentability of the claim. See MPEP 803.02

According to the Notice, Markush and other alternative formats are being used to claim multiple inventions and/or to recite hundreds, if not thousands, of alternative embodiments of a single invention in one claim. Proper search of such complex claims often consume a disproportionate amount of Office resources as compared to other types of claims. The prosecution of these complex claims likewise requires separate examination and patentability determinations for each of the alternatives within the claim, e.g., if the alternatives raise separate prior art, enablement, or utility issues. Furthermore, the variety and frequency of alternatives recited in claims filed in applications pending before the Office, driven in part by trends in emerging technologies, have exacerbated problems with pendency.

Under the proposed rules, claims that recite alternatives will have to meet two new requirements:   

1. Each Claim Must BLimited to a Single Invention

In addition to proposing a requirement limiting a claim to a single invention, the Office is proposing to specify that when subject matter that reads on multiple species is defined in a single claim using alternative language, the claim is limited to a single invention when at least one of the following two conditions is met: (1) All of the species encompassed by the claim share a substantial feature essential for a common utility, or (2) all of the species are prima facie obvious over each other. The Office proposes to encourage applicants, when filing a claim that employs alternative language, to provide an explanation as to why the claim is directed to a single invention.

The Office also proposes that applicants using alternative formats in continuation-in-part applications must identify which claim or claims in the application are disclosed in the manner provided by the first paragraph of 35 U.S.C. 112 in the prior-filed application. This proposal would reduce examination complexities and identify situations wherein a prior art reference that anticipates or renders prima facie obvious at least one species within the scope of a claim would not be available as prior art against another species if that species was set forth in a separate claim.

2. New Format Requirements for a Claim With Species Presented as a Set of Alternatives

A simplified format for the presentation of such claims must be met by any claim that uses alternative language. The Office proposes to adopt language similar to that in the PCT Guidelines, specifically requiring that the number and presentation of alternatives in the claim not make the claim difficult to construe, and requiring that each alternative within a list of alternatives must be substitutable one for another. (PCT Guidelines (paragraph 5.18) specifies that a claim can contain alternatives ‘‘provided those alternatives are of a similar nature and can fairly be substituted one for another, and provided also that the number and presentation of alternatives is a single claim does not make the claim obscure or difficult to construe.’’)

In addition, to reduce the complexity of determining whether a claim is directed to a single invention, the Office proposes to specify that no alternative may itself be defined as a set of further alternatives. Finally, the Office proposes to specify that no alternative may be encompassed by any other alternative within a list of alternatives, unless there is no other practical way to define the invention. In other words, applicants should file a series of individual claims from the broadest scope that they feel they are entitled to the narrowest scope they are willing to accept. Put differently, applicant should narrow the scope of protection sought via separate claims, and not via nested sets of overlapping alternatives



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