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Archived updates for Thursday, January 31, 2008

TGIF for Ending a(n Attorney-Client) Relationship in Style

Got a conflict?
Need to end an attorney-client relationship?
Want to do it with style?
Then check out the "da Breakup Song,"a free service of Lady Raptastic, who says "Break up with someone by song! Type a name and pick two reasons why you are giving them the dump, then I will make a song you can preview right now an send to them."
"It's so strangely entertaining that it makes me feel disoriented," writes Sergey. You can also read The Lady's blog and listen to her podcasts here.
Thank Goodness It's Friday (and time for more wine, women and song),
p.s. - Thanks to "adj_xxx" on Yahoo Personals for abruptly "introducing me to The Lady" when I unkowingly sent an icebreaker to one of her friends. I too was strangely entertained, until I found out that she was serious, and got reoriented (with a few tripartite mottoes).
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Written Description Provides Singular Meaning for "A/An"

In TIVO, Inc. vs. Echostar Communications Corporation (January 31, 2008), the Federal Circuit distinguished its Baldwin Graphic decision (on January 15, 2008), interpreting the claim phrase "wherein said Output Section assembles said video and audio components into an MPEG stream" as requiring the reassembly of the audio and video components into a single interleaved stream.

EchoStar had argued that the "assembles" limitation covers only the assembly of audio and video components into a single, interleaved MPEG stream. TiVo argued that the "assembles" limitation also covers the assembly of each component, audio and video, into its own separate stream.

According to the opinion by Circuit Judge Bryson,

As a general rule, the words "a" or "an" in a patent claim carry the meaning of "one or more." Baldwin Graphic Sys., Inc. v. Siebert, Inc., No. 2007-1262, slip op. at 7 (Fed. Cir. Jan. 15, 2008). That is particularly true when those words are used in vombination with the open-ended ntecedent "comprising." See, e.g., Abtox, Inc. v. Exitron Corp., 122 F.3d 1019, 1023 (Fed. Cir. 1997). However, the question whether "a" or "an" is treated as singular or plural depends heavily on the context of its use. See Norian Corp. v. Stryker Corp., 432 F.3d 1356, 1359 (Fed. Cir. 2005). The general rule does not apply when the context clearly evidences that the usage is limited to the singular. Baldwin Graphic, slip op. at 10.

Unlike the case in Baldwin Graphic, where the claims and the written description could be read to encompass either a singular or plural interpretation of "a" or "an," the claims and written description in this case make clear that the singular meaning applies. The pertinent claim language refers to "assembl[ing] said video and audio components into an MPEG stream," which in context clearly indicates that two separate components are assembled into a single stream, not that the video components are assembled into one stream and the audio components into a second stream. Earlier limitations in the claims refer to converting specific programs into an MPEG stream, parsing that MPEG stream and separating it "into its video and audio components." Later limitations refer to sending the reassembled MPEG stream to a decoder and converting it into TV output signals. Those steps clearly describe the
separation of a single stream into two components and then reassembly of the components into a single stream for conversion into television signals. Moreover, although the open-ended term "comprising" is used to refer generally to the limitations of the hardware claims, the "assembles" limitation itself does not contain that term. Rather, the claim language simply refers to the assembly of two components into "an MPEG stream."

The corresponding explanation in the specification refers to separating the MPEG stream into video and audio components, which are then "reassembled into an MPEG stream." ’389 patent, col. 2, ll. 15-29. That language describes the process of separating one stream into two sets of components and then reassembling the two sets of components into a single stream. In particular, when discussing the term "assembles," the specification states that "when the program is requested for display, the video and audio components are extracted from the storage device and reassembled into an MPEG stream which is sent to a decoder. The decoder converts the MPEG stream into TV output signals and delivers the TV output signals to a TV receiver." ’389 patent, Abstract; id., col. 2, ll. 27-32. The specification also provides that the "MPEG stream has interleaved video . . . and audio . . . segments." Id., col. 4, ll. 23-26. That language, like the claim language, describes the MPEG stream that is "reassembled" as a single MPEG stream, not two different streams. The concept of reassembly indicates that the MPEG stream is restored to an earlier state, which in this case would be the state in which it was initially received by the system, as a single stream of data. Accordingly, we agree with EchoStar that the claim would be interpreted by one having ordinary skill in the art to require the reassembly of the audio and video components into a single interleaved stream.

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No Public Use with General Understanding of Confidentiality from Observers

In American Seating v. USSC Group (January 29, 2008) the Federal Circuit affirmed a jury finding of no invalidity for public use where
. . . As they improved the invention, on several occasions Ditch and Razavi placed evolving prototypes in an out-of-service bus for the purpose of soliciting feedback from friends and colleagues who to varying degrees assisted in the invention’s development.

Contrary to USSC’s argument, the fact that the inventors revealed the prototype to a select group of individuals without a written confidentiality agreement is not dispositive. When access to an invention is clearly limited and controlled by the inventor, depending upon the relationships of the observers and the inventor, an understanding of confidentiality can be implied. Id. at 1381; Moleculon Research Corp. v. CBS, Inc., 793 F.2d 1261, 1265-66 (Fed. Cir. 1986). In this case, the jury was entitled to conclude that Ditch, Razavi, and the limited number of people permitted to view the tie-down restraint system prototype shared a general understanding of confidentiality. Ditch demonstrated the prototype on an out-of-service bus, solicited feedback, and removed the invention to store under his control. There was no evidence that the prototype was placed in service before December 1995, and no evidence that an unrestricted number of people unconnected with the development of the invention observed the invention in use. The district court properly confirmed the jury verdict that the ‘038 patent is not invalid for public use.
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Archived updates for Wednesday, January 30, 2008

SUGAR NO. 11 Not Merely Descriptive of Financial Services

In In re ICE Futures U.S., Inc., Serial Nos. 78199832, 78199843, and 78199848 (January 16, 2008), the U.S. Trademark Trial and Appeal Board reversed refusals to register the marks SUGAR NO. 1 1 , SUGAR NO. 14, and COTTON NO. 2, finding the marks not merely descriptive of "financial services, namely, futures exchange and related commodity trading services."

According to the TTAB:

While the full marks identify contracts with detailed, uniform terms, the record establishes that applicant created those terms for its exclusive use in the rendering of its services, that is, in the operation of a futures exchange.

In fact, the evidence of third-party references to SUGAR NO. 11, SUGAR NO. 14 or COTTON NO. 2 in varying forms shows a consistent, explicit association of the marks with applicant, usually referred to as “NYBOT,” a reference to the New York Board of Trade, the predecessor owner. These references are drawn from reports of quotations and discussions regarding applicant and its activities. . . .

Accordingly, based on the evidence of record we conclude that SUGAR NO. 11,
SUGAR NO. 14 and COTTON NO. 2, when viewed in their entireties and in the full
context of their use, are not merely descriptive of applicant’s services. The marks, when viewed in their entireties, are arbitrary. They do not identify a commodity applicant sells, as the Examining Attorney argues. Furthermore, there is no evidence that others have a need to use these terms in rendering the identified services, as the Examining Attorney argues. We find applicant’s long, and apparently exclusive, use of the marks persuasive evidence of the absence of such a need -- for over sixty-five years in the case of the SUGAR NO. 11 and SUGAR NO. 14 marks and one hundred and thirty-five years in the case of the COTTON NO. 2 mark. The record does show that others can and do use the terms/marks to refer to applicant’s specific services. This use in no way indicates that the marks are merely descriptive of the identified
"Wow, was the Board determined to rule in favor of Applicant, or what? Apparently if one uses a term long enough, and exclusively, the requirements for proper specimens of use go out the window," writes John Welch.

As noted in his TTABlog, the Board also reversed the PTO's refusal of registration based on the ground that Applicant's specimens fail to show use of each mark in connection with the identified services. "How in the heck are Applicant's specimens of use proper for its services? The specimens refer to the contracts and the terms. Is a contract a service? I just don't see it. "
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"Holes Providing Means For Allowing . . ." Not Given Means Plus Function Interpretation

In TriMed v. Stryker (January 28, 2008), the Federal Circuit held that claim 1 of U.S. Patent No. 5,931,839, excerpted below, "recites sufficient structure on its face for performing the claimed functions, and therefore, contrary to the district court’s interpretation, does not involve a means-plus-function limitation:"

said holes in said plate providing means for allowing the pin to slide axially therein but preventing compression across the fracture, and stabilizing said near end of the pin against displacement in the plane of the plate.
According to the opinion by Circuit Judge Moore,

The district court erred in concluding that the language at issue in claim 1 was means-plus-function language that invoked § 112 ¶ 6. . . . The functional language defines the size and shape of the claimed holes. The interior of the holes must be shaped to allow pins to slide through axially while the boundaries of the holes must be sized appropriately to hold the pins in place and limit their movement across the plane of the plate. The claim language makes clear that the structure for performing these functions is the holes themselves.

Since the claim language clearly identifies the structure for performing the functions in claim 1, it was unnecessary and inappropriate for the court to employ § 112 ¶ 6 and to hold that there must be a structure in addition to the holes (such as a slot) for performing these functions. Even if we were to construe this as a § 112 ¶ 6 claim, the
specification discloses an embodiment that has precisely the same structure that is found in the accused devices. . . .

Stryker argues that the prosecution history of the ’839 patent dictates that the claim limitation at issue does not recite sufficient structure for performing the described functions and instead must be read as requiring "hole[s] plus another structure." Specifically, Stryker points to an interview summary that states, "Agreement was reached that the expression of [the configuration of the pin to be attached to the plate in a sliding manner that prevents compression across the fracture] in a means-plus-function format and better defining the holes of the plate would distinguish over the prior art of record." Because TriMed subsequently amended claim 1 to include the claim language in dispute, Stryker contends that the language must be construed as a means-plus-function limitation.

We disagree. While TriMed did use the word "means" in its amendment, its attorney remarks accompanying the amendment indicate that it intended for holes by themselves to constitute structure sufficient for allowing pins to slide axially through without compressing the fracture and stabilizing the pin from displacement across the plane of the plate. As the remarks put forth:

The invention provides for stabilization of the end of the pin projecting from the fractured bone fragment without compromising the securing of the fractured bone segment to the stable bone segment without compression at the fracture. This is achieved by utilization of the pin plate 1 which has holes at one end portion for being fixed to stable bone while the opposite end has holes for engaging the protruding end of the pin, so as to prevent displacement of the protruding end of the pin in the plane of the pin plate and wherein the hole provides means for allowing the pin to slide axially in the hole in the pin plate but preventing compression across the fracture.

No where in those remarks does TriMed suggest the importance of any structure in addition to holes, as Stryker would have us believe. See Cole v. Kimberly-Clark Corp., 102 F.3d 524, 531 (Fed. Cir. 1996) (explaining that the claim drafter’s "perfunctory
addition of the word ‘means’ did nothing to diminish the precise structural character" of the claim limitation). The prosecution statement does not even suggest that structure in addition to holes is required.

For the foregoing reasons, the claim language at issue recites sufficient structure on its face for performing the claimed functions, and therefore, contrary to the district court’s interpretation, does not involve a means-plus-function limitation.

. . . Because the claim language of the ’839 patent articulates sufficient structure for performing the functions of allowing pins to slide axially through the pin plate and stabilizing said pins from movement across the plane of the plate of the claimed invention, we determine that the district court improperly interpreted the pin holes claim limitation as governed by § 112 ¶ 6. In light of the proper claim construction, the grant of summary judgment of noninfringement must be reversed. We remand for further proceedings consistent with our opinion and in view of the entire record.

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London Agreement In Force by May 2008

According to Axel Horns at IP::JUR, "The German Ministry of Justice just has confirmed that the French Instrument of Ratification for the London Agreement has reached the premises of the German Foreign Office yesterday, 2008-01-29, in the evening hours."

The IAM Blog has also provided this "unofficial, back of the envelope, translation of a report in the German media today:"

London Agreement: France's Ratification Charter Sent to French Embassy in Berlin

According to the latest information [from the president of the German federal association of patent attorneys (Bundesverband Deutscher Patentanwalte)], France’s ratification document/charter was sent to the French Embassy in Berlin yesterday, January 28. The ratification document is expected to arrive today and will then be forwarded immediately to the German Foreign Ministry to be officially filed. As the London Protocol will come into force three months after this filing, the day in question is likely to be April 30 2008.

By the IPKat's calculations, in accordance with Article 6 of the Agreement, it will then enter into force on 1 May 2008.
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Who's Requesting UKPO Invalidty and Noninfringement Opinions

In "Two Years of Patent Office Opinions," Nicholas Braddon, in IP Law and Strategies on January 24, 2008 takes a brief look at the basics of the UK Patent Office launched its Opinions service before analysing certain aspects of its performance to-date and some of the opportunities that it may provide.

Thanks to Hal Wegner for also pointing out that in in Glaxo Group Ltd v Genentech Inc, [2008] EWCA Civ 23 (Ct. of Appeal 2008)(Ward, Mummery, Jacob, JJ.), the Court of Appeal confirmed the trial court’s decision to permit a British national invalidity proceeding to go forward without suspension, despite the existence of a concurrent opposition proceeding at the EPO, "largely upon the basis of the sloth in Munich that leads to multi-year delays in any final outcome in an opposition proceeding."
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Archived updates for Tuesday, January 29, 2008

U.S. Presidential Candiate Views on Intellectual Property

In "US Presidential Candidates Reveal Positions On Some IP Issues," Intellectual Property Watch's Wiliiam New summarizes the views of U.S. presidential candidates on intellectual property. Among his conclusions,
The role of the Internet in alleged intellectual property infringement, especially of copyrighted music and video content, has been most frequently discussed. In particular, opinions on the use of digital rights management technology, strategies for preventing piracy and the desirability of Internet neutrality have played out in candidates’ statements and technology papers.
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EPO on "Why researchers should care about patents"

In "Why researchers should care about patents," the European Patent Office notes that "Before starting a R&D-project, an effective study of the state of the art is useful and advisable. It should
not only focus on books and scientific journals, but also take patent information into account."

According to the EPO, there are several reasons for searching patent literature, to
  • Avoid duplication of R&D efforts and spending
  • Find solutions to technical problems
  • Gather business intelligence
  • "up to 30% of all expenditure in R&D is wasted on redeveloping existing inventions."

The report also goes on to discuss other basic topics such as "Why and when should I consider patenting in a R&D project?," "Respecting third parties’ rights," "Some facts about patent documents," and "Where can I get more help and information?"

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Introducing the Afro-IP Weblog

The Afro-IP weblog provides news, information and comment on intellectual property law, practice and business deals right across Africa. It recently posted a discussion and link to British American Tobacco Kenya Ltd ("BAT") v Cut Tobacco Kenya Ltd ("CUTT") where Kenya's Court of Appeal affirmed that CUTT's HORSEMAN brand cigarettes did not infringe BAT's SPORTSMAN brand by using a deceptive imitation of its packaging and was passing off its brand of cigarettes as being those of, or associated with, BAT's cigarettes. "Afro IP's guess is that BAT's first victory in 1999 probably gave them sufficient time to commercially secure market share over CUTT whilst the case was pending appeal."

Other recent posts include
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Archived updates for Monday, January 28, 2008

Canadian Patent Filing and Enforcement as a "Trial Ballon"

In "Filing Patents in Canada: A Tactical Advantage," Canadian patent attorney Dennis S.K. Leung writes for IP Law 360 that "There is also much to commend Canada as a “trial balloon” jurisdiction before commencing examination of the patent application in the U.S":

  • lower government fees
  • no file wrapper estoppel
  • Information Disclosure Statements are not required
  • Canadian examiners rarely issue final actions and there are no continuation, CIP or RCE procedures
  • Canadian examiners also routinely search in the U.S., Canadian and European databases

"The case for litigating in Canada, as opposed to the United States, is [also] a strong one," notes Dennis in another article. "The two systems are similar enough in their view of patent law, yet litigating in Canada is a much simpler, more streamlined and far less expensive prospect. A successful Canadian result may be used in several ways, whether as leverage in worldwide settlement negotiations or as a dress rehearsal for a day in a U.S. court."

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USPTO/JPO "New Route" Expedited Work Sharing Pilot Project

Under the "New Route" pilot project instituted on January 28, 2007 by the U.S. and Japanese Patent Offices, a filing in one office that is party to this arrangement would be deemed a filing in all member offices, and

While the New Route is in many respects similar to the Patent Cooperation Treaty
(PCT) (a 30-month processing period, a single filing treated as a filing in several countries, a search report available to “designated” offices, etc.), it may further offer significant advantages to applicants; in particular, lower costs and more targeted filings.

. . . By allowing the second office to exploit the search and examination results of the first office, the New Route would help offices reduce overall workload, minimize duplication of search efforts, and increase examination quality.

. . . .Once the request for participation in the New Route pilot project . . . has been granted to the U.S. national stage application filed under 35 U.S.C. 371, the U.S. national stage application will be taken up for examination by the U.S. examiner before all other categories of applications except those clearly in condition for allowance; those with set time limits, such as examiner’s answers; and those that have been granted special status for “accelerated examination.

In broad terms, the office of first filing (OFF) and applicant would be given a 30-month processing time frame in which to make available a first office action and any necessary translations to the second office(s), and the second office(s) would exploit the search and examination results in conducting their own examination. The first office would also be responsible for 18-month publication of the application. If the language of the first office is not English, an English language abstract and bibliographic data would be published together with the application.

The New Route pilot project will commence in both offices on January 28, 2008. The pilot project will be terminated once 50 applications have been accepted into the pilot project by each office as the OSF or the expiration of one year (January 28, 2009), whichever occurs first. Notice will be published if the pilot project will be terminated before January 28, 2009 (i.e., when 50 applications have been accepted into the pilot project by each office).

If the application qualifies for the New Route pilot project and the applicant wishes to participate in the pilot project, the applicant must submit a letter to the USPTO as the OFF notifying the USPTO that the applicant wishes to participate in the New Route pilot project. The letter must identify the U.S. and PCT application numbers and whether a first action on the merits for the U.S. application was/will be available no later than 26 months from the U.S. filing date for Case 1 above or from the filing date of the PCT application for Case 2 above. The USPTO will notify applicant whether his/her application has been selected. A list of the selected applications will be periodically sent to the JPO.

As illustrated above, where the USPTO is the OFF and JPO as the OSF, a PCT application that satisfies all of the following requirements (1), (2), (3), and (4) qualifies for the New Route pilot project.

  1. The PCT application (with a priority claim to a U.S. application filed under 35 U.S.C. 111(a)) is filed with the USPTO (See Case 1) or the PCT application has been filed directly (without a priority claim) with the USPTO (See Case 2).

  2. The PCT application has not entered the national phase in the JPO.

  3. A first action on the merits by the USPTO
    (i) for the U.S. application filed under 35 U.S.C. 111(a) is/will be completed within 26 months from the filing date of that U.S. application (from which the PCT application claims priority) (See Case 1), or
    (ii) for the U.S. national stage application submitted under 35 U.S.C. 371 is/will be completed within 26 months from the filing date of the PCT application (filed directly with the USPTO) (See Case 2).
  4. The PCT application does not have multiple priority claims (i.e., a maximum of one priority claim is permitted).

Further details here.
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Archived updates for Saturday, January 26, 2008

UK High Court Allows Computer Program Patent Claims

Thanks to the IP Kat for pointing to the "surprising turn of events" where the Honourable Mr Justice Kitchin has ruled that the current UK Patent Office practice of flatly rejecting patent claims to computer program products is wrong. The judgment, in the matter of several GB patent applications in the name of Astron Clinica and others, is not yet available on BAILII, but the IPKat is making it available to his readers here at least until it is.

Catch up with the issues from the IPKat's previous posts here, here, here, here, here, here, here, here, here and here (to cite just a few).
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Docstoc IP Document Sharing Service

Docstoc is a user generated community for sharing professional documents, including free legal documents, legal forms, and legal templates. Download sample contracts, real estate forms, employment forms and much more. Check out the IP section here, with subsections on
The service also offers a vast quantity of business, financial, technology, educational, and creative documents for free. Users can upload their documents for all the world to share. In addition, users can store their documents in their own personal online folders for anytime, anywhere access.

You can also use this search engine to find documents in this, and other, following "Document Sharing Communities"
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Archived updates for Friday, January 25, 2008

Inequitable Conduct for Failure to Disclose Employee's Notes About Poster for Which Abstract was Submitted

In Monsanto v. Bayer Bioscience (January 25, 2008), the federal Circuit affirmed inequitable conduct where, although Bayer disclosed the Barnes Abstract during patent prosecution, it did not disclose the notes taken by one of its employees from the poster that was described in the Abstract:

Although Bayer disclosed the Barnes Abstract during patent prosecution, it did not disclose the notes taken by one of its employees, Dr. Celestina Mariani, regarding the Barnes Poster, to which the abstract was in reference, nor the information contained in the notes. Mariani had attended the conference and personally viewed Barnes’ poster. She explained in her deposition, which was presented at trial, that the notes were made while in front of the poster and included copies of "the same schemes that were presented on the poster." Monsanto II, slip op. at 19 (quoting Mariani’s deposition testimony ("Mariani depo.")). The poster contained much more information than the abstract itself. Id. at 24. In the deposition, Mariani carefully and extensively described the content of her handwritten notes.

. . . The undisputed evidence established that the arguments Bayer made to the Examiner to overcome the rejection based on the Barnes Abstract cannot be reconciled with the information about the Barnes Poster disclosed in the Mariani notes. . . .

. . . We hold that the Mariani notes are material because they directly contradict arguments Bayer made to the PTO in support of patentability. We do not suggest that all internal documents of potential relevance must be submitted to the PTO as a matter of course. Rather, it is the particular circumstances that render the internal documents material in this case. We need not decide whether, as the district court found, they are also material because the notes by themselves would establish a prima facie case of unpatentability of the ’565 patent’s claims. But certainly their materiality is augmented by the fact that Mariani’s notes demonstrate, in significantly more detail than the Barnes Abstract, that Barnes had already disclosed that a 67 kD N-terminal fragment of a Bt toxin protein retained toxicity either alone or fused to a NPT-II protein and taught a chimeric gene comprising the 67 kD Bt toxin gene and a plant promoter. Bayer was attempting to claim a nearly identical invention—a chimeric gene comprising a gene encoding a 60 to 80 kD Bt toxin protein and a plant promoter. Accordingly, we affirm the district court’s finding that the Mariani notes were highly material.

. . . The district court did not clearly err in finding that Bayer’s "attempts to establish subjective good faith sufficient to overcome the intent to mislead [were] not persuasive" and concluding that Meulemanns intentionally withheld the material Mariani notes with the intent to deceive the PTO. Monsanto II, slip op. at 97-98. Meulemanns himself admitted that he was aware of the notes during the prosecution of the ’565 patent, that he had discussed the content of the notes with Mariani, and that the notes would have been important to the Examiner if the notes contained reliable information. The only explanation that Meulemanns or Bayer provided for failing to disclose the information contained in the notes was that the notes were not decipherable standing alone and that when Meulemanns discussed the notes with Mariani, Mariani had been unable to remember "anything" about them. The district court, however, found this explanation to lack credibility, particularly in light of Mariani’s ability to testify with clarity and detail about the contents of the notes during her deposition. We find nothing clearly erroneous in the court’s credibility finding. . . . And absent a credible reason for Meulemanns to have not understood the content of Mariani’s notes after having discussed them with Mariani, the district court did not clearly err in inferring the requisite intent. See Bruno Indep. Living Aids, 394 F.3d at 1354. Intent is easily inferred when, as here, an applicant makes arguments to the PTO that it knows, or obviously should have known, are false in light of information not before the examiner, and the applicant knowingly withholds that additional information. See Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1368 (Fed. Cir. 2007) (holding that an applicant’s argument that the information was withheld in "‘good faith’ does not negate an intent to manipulate the evidence" when "an applicant knows or obviously should know that information would be material to the examiner").

Having found without clear error that Bayer intentionally withheld material information when it failed to disclose the Mariani notes despite taking a position at the PTO that was refuted by the information contained in the notes, the district court had discretion to hold the ’565 patent unenforceable for inequitable conduct.

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"Fragile Gel" Indefinite for Failure to Distinguish from Prior Art

In Halliburton Energy Svcs. v. M-I (January 25, 2008) the Federal Circuit concluded that since neither Halliburton’s proposed definition, nor any other possible construction, resolved the ambiguity in the scope of the term "fragile gel," then the claims containing that term were indefinite. (The issue of whether additional limitations in the dependent claims rendered them sufficiently definite was not raised.) Professor Wegner describes the The lengthy opinion of the court’s Chief Judge as providing "a tutorial in line with the increasingly stringent attitude the court is taking against sloppy claim drafting."

The claims of U.S. Patent No. 6,887,832 recited certain fragile gel drilling fluids for which Claim 1 read:

1. A method for conducting a drilling operation in a subterranean formation using a fragile gel drilling fluid comprising:

(a) an invert emulsion base;
(b) one or more thinners;
(c) one or more emulsifiers; and
(d) one or more weighting agents, wherein said operation includes running casing in a

During prosecution, Halliburton distinguished the claims of the ’832 patent from prior art fluids by stating that the claims were "limited to" a "fragile gel" drilling fluid or the method of using a "fragile gel" drilling fluid. Thus, although the term "fragile gel" appears only in the preamble of the asserted independent claims, Halliburton conceded that the claimed drilling fluids are limited to those that are "fragile gels."

Halliburton then argued that "fragile gel" as used in the asserted claims is definite and had a three-part definition:
  1. A gel that easily transitions to a liquid state upon the introduction of force (e.g., when drilling starts) and returns to a gel when the force is removed (e.g., when drilling stops); and

  2. At rest, is capable of suspending drill cuttings and weighting materials; and

  3. Contains no organophilic clay or organophilic lignite or can contain low amounts of organophilic clay or lignite individually or in combination so that the fragile gel can still easily transition between a gel and liquid state and suspend drill cuttings and weighting materials.
On third third point, the court concluded that "fragile gels" that have no or low organophilic clay or lignite are merely preferred embodiments of the invention covered by certain dependent claims, and thus "fragile gel" as used in the independent claims is not limited to those embodiments.

The, on the first two points, Chief Circuit Judge Michel wrote that the court,

. . . reject[ed] Halliburton’s assertion that a "fragile gel" can be defined by an L-shaped curve [above] alone because the specification does not distinguish how the "fragile gels" claimed in the ’832 patent performed differently than the disclosed prior art—how much more quickly the gels broke when stress was imposed or how much more quickly the gels reformed when stress was removed. Halliburton’s failure to distinguish the fragileness of the drilling fluids of the invention from the close prior art (the 12.1 SF fluid that exhibited the L-shaped curve behavior) is fatal. Amgen, Inc. v. Chugai Pharm. Co., Ltd., 927 F.2d 1200, 1218 (Fed. Cir. 1991) (holding that the term "at least about" was indefinite because the patent provided no guidance as to where the line should be drawn between the numerical value of the prior art cited in the prosecution history and the close numerical value in the patent); see also Verve, LLC v. Crane Cams, Inc., 311 F.3d 1116, 1119-20 (Fed. Cir. 2002) (recognizing that guidance as to measurement of a term of degree can come from the intrinsic record or from the knowledge of a person of ordinary skill in the art).

Even if the ’832 patent distinguished "fragile gels" of the invention from those of the prior art, it did not place any limit on the scope of what was invented beyond the prior art. By Halliburton’s own admission, drilling fluids which included an invert emulsion base, a thinner, an emulsifier, and a weighting agent were known in the prior art, and independent claims 1-3 and 5 are distinguishable from the prior art only because they are "fragile gels." By failing to identify the degree of the fragility of its invention, Halliburton’s proposed definition would allow the claims to cover not only that which it invented that was superior to the prior art, but also all future improvements to the gel’s fragility. While patentees are allowed to claim their inventions broadly, they must do so in a way that distinctly identifies the boundaries of their claims. The fluids of the ’832 invention may provide less resistance to shear (i.e., break more quickly) than the prior art fluids, but the degree of improved speed remains ambiguous. Thus, it is unclear whether a person of ordinary skill in the art would have interpreted this claim as having an upper bound of fragility.

. . . The second part of Halliburton’s definition (i.e., the fragile gel is capable of suspending drill cuttings and weighting materials at rest) fares no better because nothing in the record suggests what degree of such capability is sufficient. Halliburton argues that a person of ordinary skill would know how to measure the quantity of drill cuttings suspended in a fluid (either through laboratory measurements or in the field for example by measuring weight (or density) of the fluid when entering the borehole and when exiting the borehole), and would also know how to determine when the fluid no longer exhibited the L-shaped curve behavior when tested with a Brookfield viscometer. The fact that an artisan would know how to perform these measurements and tests, however, says nothing about whether the artisan would also know which fluids were "fragile gels" as that term is used in the claims of the ’832 patent.

Assuming a person of ordinary skill would add solids incrementally, determining the effect of each addition by observing whether the fluid still maintains its fragile gel characteristics (the L-shaped curve), as Halliburton suggests, this testing protocol still does not answer the fundamental question: what quantity, weight, size and/or volume of cuttings must be suspended? Halliburton does not attempt to resolve this ambiguity, instead arguing that this limitation merely means adequate for the circumstances.

. . . We also note that the two parts of Halliburton’s proposed definition discussed above (ability of the fluid to transition quickly from gel to liquid, and the ability of the fluid to suspend drill cuttings at rest) are functional, i.e., the fluid is defined "by what it does rather than what it is."

. . . When a claim limitation is defined in purely functional terms, the task of determining whether that limitation is sufficiently definite is a difficult one that is highly dependent on context (e.g., the disclosure in the specification and the knowledge of a person of ordinary skill in the relevant art area). We note that the patent drafter is in the best position to resolve the ambiguity in the patent claims, and it is highly desirable that patent examiners demand that applicants do so in appropriate circumstances so that the patent can be amended during prosecution rather than attempting to resolve the ambiguity in litigation.

A patent drafter could resolve the ambiguities of a functional limitation in a number of ways.6 For example, the ambiguity might be resolved by using a quantitative metric (e.g., numeric limitation as to a physical property) rather than a qualitative functional feature. The claim term might also be sufficiently definite if the specification provided a formula for calculating a property along with examples that meet the claim limitation and examples that do not. See Oakley, Inc. v. Sunglass Hut Int’l, 316 F.3d 1331, 1341 (Fed. Cir. 2003) (holding that, at the preliminary injunction stage, the accused infringer had not shown a substantial question of indefiniteness, where the claims and specification linked the claim term "vivid colored appearance" to a calculation for differential effect and then provided examples of when differential effect values were and were not sufficient for a "vivid colored appearance"); see also In re Marosi, 710 F.2d 799, 803 (Fed. Cir. 1983) (finding claims definite where the applicant’s disclosure provided "a general guideline and examples sufficient" to teach an artisan when the claim limitation was satisfied).

In this case, Halliburton differentiated its invention from the prior art because it was a "fragile gel." As discussed above, Halliburton’s proposed definition of that term is not sufficiently definite because it does not adequately distinguish the fragileness of the invention from disclosed prior art, it is ambiguous as to whether an upper bound of fragileness is contemplated, and it is ambiguous as to its requisite ability to suspend drill cuttings. In other words, Halliburton’s proposed construction of "fragile gel" as used in the claims of the ’832 patent is indefinite because it is ambiguous as to the requisite degree of the fragileness of the gel, the ability of the gel to suspend drill cuttings (i.e., gel strength), and/or some combination of the two. We discern no other construction that can properly be adopted that would render the claims definite.

Thus, we hold that M-I did provide clear and convincing evidence that the term "fragile gel" was indefinite, and that the district court correctly held the claims invalid on that basis.

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CRS Report on Patent Reform

Thanks to Professor Crouch at Patently-O for linking to the Congressional Reserach Service ("CRS") Report on Patnet Reform. The Report concisely reviews the two currently pending bills: House of Representatives, H.R. 1908, titled the Patent Reform Act of 2007, was introduced on April 17, 2007, and passed the House on September 7, 2007; ans Senate, S. 1145, also titled the Patent Reform Act of 2007, was introduced in the Senate on April 17, 2007. S. 1145, was reported out of the Senate Committee on the Judiciary on July 19, 2007.

Their conclusion:

Pending legislation introduced in the 110th Congress arguably would work the
most sweeping reforms to the U.S. patent system since the nineteenth century.
However, many of these proposals, such as pre-issuance publication, prior user
rights, and oppositions, have already been implemented in U.S. law to a more limited
extent. These and other proposed modifications, such as the first-inventor-to-file
priority system and elimination of the best mode requirement, also reflect the
decades-old patent practices of Europe, Japan, and our other leading trading partners. As well, many of these suggested changes enjoy the support of diverse institutions, including the Federal Trade Commission, National Academies, economists, industry representatives, attorneys, and legal academics.

Other knowledgeable observers are nonetheless concerned that certain of these
proposals would weaken the patent right, thereby diminishing needed incentives for
innovation. Some also believe that changes of this magnitude, occurring at the same
time, do not present the most prudent course for the patent system. Patent reform
therefore confronts Congress with difficult legal, practical, and policy issues, but also
with the apparent possibility for altering and potentially improving the legal regime
that has long been recognized as an engine of innovation within the U.S. economy.

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Senate Patent Reform Bill on Prior User Rights

Under current law, “prior user rights” may offer a defense to patent infringement in certain limited circumstances, including when the patent in question is a “business method patent” and its inventor uses the invention, but never files a patent application for it. If the same invention is later patented by another party, the prior user may not be liable for infringement to the new patent holder, although all others will be.

Section 4 of the Patent Reform Act of 2007 (S. 1145) notes that the bill, as introduced, would have extended prior user rights to all kinds of patents – not just business method patents – but the persuasive outcry from the university and tech transfer communities limited the amendment of the prior user right defense to one that simply alters paragraph (b)(6) of section 273 to clarify that “affiliates” of the user may also assert the defense. Affiliates include those who caused or controlled the acts that were performed that give rise to the defense. Additionally, Section 4 of the Act instructs the Director of the USPTO to conduct, and provide to Congress, a study with recommendations on prior user rights (both in the United States and abroad) within two years of enactment of the Act, in order to determine whether further Congressional attention is warranted.
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Senate Patent Reform Bill on Prior Art Grace Period

As noted in the Congressional Reserach Service ("CRS") Report on Patnet Reform,
S. 1145 would change the current grace period by causing it only to apply to patent applicants themselves. Under this proposal, “disclosures made by the inventor or a joint inventor or by others who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor” would not be patent-defeating, provided they were made “one year or less before the effective filing date of the claimed invention.” In contrast, disclosures qualify as prior art, and are therefore potentially patent-defeating, if they were made either by (1) the inventors and their associates more than one year before the patent application’s filing date; or (2) anyone else prior to the filing date, provided that such a disclosure occurred prior to the inventor’s own disclosure. These amendments would, in essence, protect the patent positions of individuals who disclosed their inventions up to one year before they filed a patent application. The grace period would no longer shield inventors from earlier disclosures made by unrelated individuals, however.
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Senate Patent Reform Bill on Mandatory Search Requirements

Section 11 of the 106-page draft report of the Senate Judiciary Committee on the Patent Reform Act of 2007 (S. 1145) gives the Director express authority to require by regulation the submission of search reports and other relevant information as the Director determines. Failure to comply with such requirements shall constitute abandonment of the applications. However "Micro-Entities" would be exempted.

Specifically, the proposed bill amends Title 35 to add the following new section:

§ 123. Additional information; micro-entity exception

(a) IN GENERAL.--The Director shall, by regulation, require that an applicant for a patent under this title submit to the Director--

(1) a search report and analysis relevant to patentability; and
(2) any other information relevant to patentability that the Director, in
hisdiscretion, determines necessary.

(b) FAILURE TO COMPLY.--If an applicant fails to submit the search report, analysis, or information required under subsection (a) in the manner and within the time period prescribed by the Director, such application shall be regarded as abandoned.

(c) EXCEPTION.--Any application for a patent submitted by a micro-entity shall not be subject to the requirements of this section.


(1) IN GENERAL.--For purposes of this section, the term "micro-entity" means
an applicant who makes a certification under either paragraph (2) or (3).
(2) UNASSIGNED APPLICATION.--For an unassigned application, each applicant
shall certify that the applicant--

(A) qualifies as a small entity, as defined in regulations issued by the

(B) has not been named on 5 or more previously filed patent applications;

(C) has not assigned, granted, or conveyed, and is not under an obligation by contract or law to assign, grant, or convey, a license or any other ownership interest in the particular application; and

(D) does not have a gross income, as defined in section 61(a) of the Internal Revenue Code (26 U.S.C. 61(a)), exceeding 2.5 times the average gross income, as reported by the Department of Labor, in the calendar year immediately preceding the calendar year in which the examination fee is being paid.

(3) ASSIGNED APPLICATION.--For an assigned application, each applicant shall certify that the applicant--

(A) qualifies as a small entity, as defined in regulations issued by the
Director, and meets the requirements of paragraph (2)(D);

(B) has not been named on 5 or more previously filed patent applications;
and(C) has assigned, granted, conveyed, or is under an obligation by contract or law to assign, grant, or convey, a license or other ownership interest in the particular application to an entity that has 5 or fewer employees and that such entity has a gross income, as defined in section 61(a) of the Internal Revenue Code (26 U.S.C. 61(a)), that does not exceed 2.5 times the average gross income, as reported by the Department of Labor, in the calendar year immediately preceding the calendar year in which the examination fee is being paid.

(4) INCOME LEVEL ADJUSTMENT.--The gross income levels established under paragraphs (2) and (3) shall be adjusted by the Director on October 1, 2009, and every year thereafter, to reflect any fluctuations occurring during the previous 12 months in the Consumer Price Index, as determined by the Secretary of Labor.

Here are links to a few recent public comments on the need for pre-filing patent searches:
  • “Patent quality should start with a focus on high quality search.” –-Ruud Peters, CEO of Philips Intellectual Property and Standards
  • “Quality patents start with a quality search.” -- Mark Adler, Chief IP Counsel, Rohm and Haas Company
  • “The process of quality examination begins with the applicant. Too little or too much information both present serious challenges to examination quality, and both abuses are created solely by applicants. These abuses must be prevented if the system is to function properly for the benefit of the public.” -- USPTO Public Advisory Committee Report for 2007
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Senate Patent Reform Bill on Interlocutory Appeals of Claim Construction Orders

Section 8 of the 106-page draft report of the Senate Judiciary Committee on the Patent Reform Act of 2007 (S. 1145) provides for Interlocutory appeals of claim construction orders, giving district court judges discretion to certify Markman claim construction orders for interlocutory review. When such orders are certified, the Federal Circuit must decide the appeal.

According to the "Section-by-Section Summary of the Bill:"
The Committee intends to transfer the discretion from the Federal Circuit to the district court judge as to whether — and when — a claim construction order should be decided on appeal. The district court judges are in the best position to know when the evidence adduced, and the arguments marshaled by the litigants, have brought the case to a point at which a decision by the appellate court on claim construction could best promote resolution of the case. As a case management tool, the Committee is
confident that the interlocutory appeal of a Markman decision could be both useful and effective. The district court also has the discretion to stay the case pending the appeal.

"The legislative solution takes a sledgehammer to [the Cybor denovo review] problem that could be fixed with a surgical needle," argues Professor Wegner in his paper entitled Death to Cybor De Novo Claim Construction Review through Leahy, S. 1145. "To the extent that the Leahy legislation passes, it would be difficult to imagine much time passing before the Federal Circuit would sua sponte choose to overrule its Cybor precedent."

A flood of interlocutory claim construction appeals would reach the Federal Circuit which would put such great pressure on the court that it could not be imagined that Cybor could long stand. But, if overruling Cybor is the legislative objective, a far better solution would be to do just that: Congress should legislatively overrule Cybor and save the patent system from the procedural nightmare of routine, interlocutory claim construction appeals.
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Archived updates for Thursday, January 24, 2008

TGIF for Wheeled Pogo Shoes

for "Pogo Shoes"

"These things should be sold with crutches and bulletproof buttocks. And the best news yet, No Brakes!" -- Totally Absurd Inventons

"Thank Goodness It's Friday!" --Bill Heinze

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FTC Consent Order on Breach of Patent Licensing Commitment Made During Standards-Setting

In In the Matter of Negotiated Data Solutions LLC., the U.S. Federal Trade Commission found reason to believe that breach of a ptent licensing commitmnet made during standards-setting violated Section 5 of the FTC Act, standing alone, as an unfair method of competition and an unfair act or practice. The Statement of the Commission recognized that

[S]ome may criticize the Commission for broadly (but appropriately) applying our
unfairness authority to stop the conduct alleged in this Complaint. But the cost
of ignoring this particularly pernicious problem is too high. Using our statutory authority to its fullest extent is not only consistent with the Commission’s obligations, but also essential to preserving a free and dynamic marketplace.
According to the FTC's complaint, N-Data was engaged in the business of licensing patents that it has acquired from National Semiconductor Corporation (National). In 1994 National had made a commitment to an electronics industry standard setting organization, the IEEE, that if the IEEE adopted a standard based on National’s patented NWay technology, National would offer to license the technology, for a one-time, paid-up royalty of $1,000 per licensee, to manufacturers and sellers of products that use the IEEE standard. N-Data obtained the patents knowing about National’s prior commitment and after the industry became committed to the standard, but N-Data has refused to comply with that commitment and instead has demanded royalties in excess of that commitment.

The complaint further alleged that because N-Data began demanding royalties after it became expensive and difficult for the industry to switch to another standard, N-Data was able to demand higher royalties than the industry otherwise would have paid for the technologies. The complaint also alleged that consumers would be harmed because of N-Data’s conduct for a number of reasons, including that firms would be less likely to assist in the development of industry standards, and that many firms would be unwilling to rely on such standards even if they were developed.

According to the Commission's Analysis of Proposed Consent Order to Aid Public Comment,

A mere departure from a previous licensing commitment is unlikely to constitute
an unfair method of competition under Section 5. The commitment here was in the context of standard-setting. The Supreme Court repeatedly has recognized the procompetitive potential of standard-setting activities. However, because a standard may displace the normal give and take of competition, the Court has not hesitated to impose antitrust liability on conduct that threatens to undermine the standard-setting process or to render it anticompetitive. See Standard Sanitary Mfg. Co. v. United States, 226 U.S. 20, 41 (1912); Allied Tube & 7 Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 500 (1989); Am. Soc’y of Mech. Engineers, Inc. v. Hydrolevel Corp., 456 U.S. 556, 571 (1982). The conduct of N-Data. . . at issue here clearly has that potential.

FOOTNOTE 8: It is worth noting that, because the proposed complaint alleges stand-alone violations of Section 5 rather than violations of Section 5 that are premised on violations of the Sherman Act, this action is not likely to lead to well-founded treble damage antitrust claims in federal court. See Herbert Hovenkamp, Federal Antitrust Policy at 588 (2d ed. 1999).

. . . Clearly, merely breaching a prior commitment is not enough to constitute an unfair act or practice under Section 5. The standard-setting context in which National made its commitment is critical to the legal analysis. As described above, the lock-in effect resulting from adoption of the NWay patent in the standard and its widespread use are important factors in this case. In addition, the established public policy of supporting efficient standard-setting activities is an important consideration in this case. Similarly, it must be stressed that not all breaches of commitments made by owners of intellectual property during a standard-setting process will constitute an unfair act or practice under Section 5. For example, if the commitment were immaterial to the adoption of the standard or if those practicing the standard could exercise countermeasures to avoid injury from the breach, the statutory requirements most likely would not be met. Finally, it needs to be emphasized that not all departures from those commitments will be treated as a breach. The Orkin court suggested that there might be a distinction between an open-ended commitment and a contract having a fixed duration. That distinction does not apply here because the context of the commitment made it plain that it was for the duration of National’s patents. However, most such commitments, including the one here, are simply to offer the terms specified. Indeed, those principles are reflected in the remedy set forth in the consent decree.

N-Data settled the charges and was placed under a consent order prohibiting it from enforcing the patents unless it has first offered the patent license attached to the order. Specifically, N-Data must offer a paid-up, royalty-free license to the Relevant Patents in the Licensed Field of Use in exchange for a one-time fee of $1,000. However, if an offeree has failed to accept such an offer within 120 days, the Proposed Consent Order allows N-Data to sue to enforce the Relevant Patents. At the time N-Data files suit, however, it must make a second offer providing a prospective licensee with an opportunity to accept the patent license specified by the order in return for a payment of thirty-five thousand dollars ($35,000).

The order will be subject to public comment for 30 days, until February 22, 2008, after which the Commission will decide whether to make it final. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.

Dissenting Commission Chairman Majoras disagreed with the majority's determination of liability, stating that

“[t]his case departs materially from the prior line [of FTC standard-setting ‘hold-up’ challenges], in that there is no allegation that [the patent holder] engaged in improper or exclusionary conduct to induce IEEE [Institute of Electrical and Electronics Engineers] to specify its NWay technology” into the relevant standard. “The majority has not identified a meaningful limiting principle that indicates when an action – taken in the standard-setting context or otherwise – will be considered an ‘unfair method of competition,’” she said, adding also, “The novel use of our consumer protection authority to protect large corporate members of a standard-setting organization is insupportable.”
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Lack of Motion to Compel Preempts Patent Attorney Sanctions

Thanks to Bob Ambrogi for writing in IMS Expert Services "Bullseye" about the what led to the $8.6 million in discovery sanctions in Qualcomm Incorporated v. Broadcom Corporation, Case No. 05cv1958-B (S.D. Cal. 1/7/08)( . . . the Court declines to impose monetary sanctions against the Sanctioned Attorneys for several reasons. First, if the imposed sanctions do not convince the attorneys to behave in a more ethical and professional manner in the future, monetary sanctions are unlikely to do so. Second, it is possible that Qualcomm will seek contribution from its retained attorneys after it pays Broadcom’s attorneys’ fees and costs and, in light of that significant monetary sanction, an additional fine is unlikely to affect counsel’s future behavior. Third, the Court acknowledges the limitations on its authority (see sections A and B and footnotes 5 and 9) and, based on those concerns, declines to impose significant monetary sanctions.):

Qualcomm insisted it had not participated in the [Joint Video Team standards-setting body that created the H.264 standard] prior to adoption of the H.264 standard. As the case progressed, Qualcomm "became increasingly aggressive" in denying its JVT participation, Magistrate-Judge Major found.

. . . Magistrate-Judge Major's ruling found that Qualcomm's lawyers failed to search key employees' computers for e-mails or documents relevant to Broadcom's discovery requests. But as the case neared trial, a Qualcomm lawyer discovered
21 e-mails on the laptop of one employee, Viji Raveendran, showing her participation in a JVT-related e-mail list that discussed the development of the H.264 standard. Qualcomm's lawyers decided not to produce these e-mails to Broadcom.

. . . Qualcomm notified Judge Brewster that it found thousands of relevant documents that it had failed to produce and that the documents "revealed facts that appear to be inconsistent with certain arguments" that it made at trial.Within a short time, it had located more than 46,000 documents consisting of more than 300,000 pages that it had failed to produce, and it continued to find additional documents for several months more.

. . . Ironically, in considering what sanctions to impose, the magistrate-judge noted that Qualcomm's deception worked to its benefit. Because Broadcom accepted Qualcomm's representations that its discovery responses were complete, it never filed a motion to compel. Without such a motion, the federal rules allow the court to sanction only the party, not its attorneys. "Thus, Qualcomm's suppression of documents placed its retained attorneys in a better legal position than they would have been in if Qualcomm had refused to produce the documents and Broadcom had filed a motion to compel," she wrote.

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USPTO Clarifies Declaration Requirements

On January 22, 2008, the USPTO announced that all patent oaths or declarations filed on or after June 1, 2008, will be required to include the language specified in 37 CFR Section 1.63(b)(3) requiring that the oath or declaration must

State that the person making the oath or declaration acknowledges the duty to disclose to the Office all information known to the person to be material to patentability as defined in § 1.56.

For currently pending applications and issued patents, the USPTO is waving the requirement where the oath or declaration is filed before June 1, 2008.

According to the Notice, many of the oaths or declaration currently being submitted continue to use "material to the examination of the application" language in place of "material to patentability" and "in accordance with Section 1.56(a)" instead of "as defined in Section 1.56."

"The announcement was posted as a skanky scanned version of a printed document, that had not been OCR'ed," gripes The Patent Prospector, echoing my own pet peeve.

Just one more reason to stick the the official Form SB01. . . .
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Chinese IP Law Expected July 2008

According to Peter Ollier writing for Managing Intellectual Property on January 14, 2008, final preparations are under way for the publication of China's National IP Strategy Law:

The amended Scientific and Technological Progress Law will apply from July 1,
2008. An official translation of the law is not available. But, according to an announcement on SIPO’s website, Article 7 contains general provisions that deal with IP. The law states that researchers involved in government-funded projects own any IP that the projects create. According to SIPO’s statement, this does not apply to research “involving national security, national interests or major public interests.”

In another attempt by the government to encourage innovation, the Regulations for the Implementation of Enterprise Income Tax Law came into force on January 1 this year. These allow new and high technology companies to pay a reduced tax rate of 15%. To qualify, companies must meet certain criteria, which include proving independent ownership of “core IP rights”. Many foreign companies in China prefer to register their IP rights abroad, so may not be able to benefit from this regulation.

Ollier has also noted that the new director-general of the Taiwan Intellectual Property Office (TIPO), Wang Mei-hua, has announced plans for a series of revisions to the country’s IP laws, along with a new IP Court that is scheduled to open on July 1.
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Patent Quality Starts with (Chinese) Patent Searching

According to the December 2007 issue of Patent Information News, the European Patent Office has started a pilot project aimed at translating manually the abstracts and claims of Chinese utility documents in certain technical fields in order to establish the cost-effectiveness of human translation and identify quality issues. "Assuming the pilot was successful, a tender for a full-scale human translation project would be launched in 2008. . . . Initial estimates had resulted in a figure of some EUR 15m per year, for the translation of claims alone."

Ruud Peters, CEO of Philips Intellectual Property and Standards, reportedly summarised the issue at an October conference in just six words: "Industry needs reliable, complete patent information." He also added that "patent quality should start with a focus on high quality search," and that "missing out the increasingly large collection of Chinese prior art is inconsistent with that drive."
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Archived updates for Wednesday, January 23, 2008

KSR Moves U.S. Toward European Standard for Inventive Step?

According to Morgan D. Rosenberg and Richard J. Apley writing for Intellectual Property Today, the obviouseness standards announced in KSR v. Teleflex now closely match the requirements for “inventive step” in Europe because
  1. The identified problem and solution of a claim is not necessarily held as the only problem addressed by the inventor(s), but an “objective problem” may be found based on the closest prior art;
  2. there is no restriction to considering only the prior art elements designed to solve the same problem; and,
  3. a combination being “obvious to try” as an indicator of obviousness is common under EPO practice.
"What does this mean to the practitioner?" they ask.
Prior to this move towards EPO-style analysis, practitioners relied on arguments based around non-analogous art and errors in combining prior art references. With the “obvious to try” and “problem-solution” rationales now in place, on top of the previous Graham inquiries, patent drafting will likely return to listing specific advantages of the invention (which disappeared from applications following the ruling in Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd.)8 In European patent applications, one typically finds large background art sections, laying out the various problems seen in the prior art and offering often numerous advantages and reasons for the present invention, particularly in light of the prior art. Although Festo removed language such as “It is a particular objective of the present invention …” from U.S. patent applications, much longer lists and descriptions of advantages and
problems solved by the invention will likely be incorporated into post-KSR applications. Though this is not a change to rules, the look and feel of U.S. applications will also slightly shift to those of present European patent applications.. . .
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IPO: Senate Patent Reform Bill Vote Likely in February

The Intellectual Property Owners Association "believes Sen. Patrick Leahy (D-VT) will attempt to pass a revised version of S. 1145 in the Senate in February. Major amendments likely will not be available more than a few days in advance of Senate consideration. It is unclear whether the Senate has the votes to pass a bill. If the Senate does pass a bill, it likely will be sent to the House for swift passage by the House without amendments, eliminating the need for a Senate-House conference." Peter Zura's 217 Patent Blog also notes that that Senate Majority Leader Harry Reid has also announced plans to move quickly on patent reform. His speech on the Senate floor included this statement: "On patent reform, we must carefully strike the right balance with a bill that promotes rather than blocks innovation from enterprising entrepreneurs," quotes

However, "An IPO member suggests patent reform fatigue has set in, with people tiring of debating the complex bills and hoping radical changes will not be made because reforms already have been made by recent Supreme Court decisions." So, this week, I/P Updates will provide an overview of some of the key features of the proposed legislation.

But keep in mind that the bill still faces opposition. According to Kevin E. Noonan writing for Patent Docs, a letter to Senate leaders from a diverse group of over 430 organizations, asserts that the bill "contains provisions that will create uncertainty and weaken the enforceability of validly issued patents." Noonan adds that "Specifically mentioned in this regard are the expanded apportionment of damages provisions, the post-grant opposition, venue restrictions, and the burdensome and expensive mandatory search requirements."
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Senate Patent Reform Bill on Application Publication and Third Party Submissions

Kevin E. Noonan at Patent Docs has been posting his analysis of the 106-page draft report of the Senate Judiciary Committee on the Patent Reform Act of 2007 (S. 1145) which, would require all applications filed at the USPTO to be published within 18 months of filing, eliminating the current exception for applications containing certifications stating a related application has not been and will not be filed in a foreign country are exempt from this publication.

Section 7 of the proposed legislation would also create a new mechanism under 35 U.S.C. § 122 for third parties to submit timely pre-issuance information relevant to the examination of the application, including a concise statement of the relevance of the submission:

§ 122. Confidential status of applications; publication of patent applications

* * * * * *


(1) IN GENERAL.—Any person may submit for consideration and inclusion in the record of a patent application, any patent, published patent application, or other publication of potential relevance to the examination of the application, if such submission is made in writing before the earlier of—

(A) the date a notice of allowance under section 151 is mailed in the application forpatent; or
(B) either—

(i) 6 months after the date on which the application for patent is published under section 122, or
(ii) the date of the first rejection under section 132 of any claim by the examiner during the examination of the application for patent,whichever occurs later.

(2) OTHER REQUIREMENTS.—Any submission under paragraph (1) shall—

(A) set forth a concise description of the asserted relevance of each submitted document;
(B) be accompanied by such fee as the Director may prescribe; and
(C) include a statement by the person making such submission affirming that the
submission was made in compliance with this section.

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Senate Patent Reform Bill on Post-Grant Review

Thanks to Kevin E. Noonan at Patent Docs for recently posting his analyses of the 106-page draft report of the Senate Judiciary Committee on the Patent Reform Act of 2007 (S. 1145) which, under Section 5, would create a new post-grant review (PGR) system for United States patents, replacing and eliminating inter partes reexamination, in a new chapter 32 in title 35.

According to the draft Senate Report,

There are three ways to initiate a PGR proceeding. They are often referred to as “windows” (first window and second window) in which a third party petitions the Director of the USPTO to initiate a PGR proceeding. These windows differ procedurally and substantively, as described below. The third means of initiating a PGR proceeding is based on the patentee’s consent.

In a first window PGR, the petition must be filed within 12 months of the patent’s issuing. The presumption of validity for the patent does not apply, but the petitioner has the burden of proving invalidity by a preponderance of the evidence. This window is designed as an extension of the examination process. The expectation is that those who are interested in fields of patents – or in certain patent holders – will assiduously follow the issuance of the patents that interest them, and be ready to bring to the USPTO’s attention any immediate concerns.

. . . in the second window, significant limitations are placed on such challenges, while preserving the core intent of the old reexamination process: creating an efficient and effective process for challenging the validity of a patent. A PGR petition may be filed throughout the life of the patent in this second window, but only if (i) the continued existence of the challenged patent claim is likely to cause the petitioner significant economic harm, and (ii) the petitioner files the petition within 12 months after receiving notice of infringement. Thus, only a PGR petitioner who has a good deal at stake may bring such a challenge, and may do so only if the patent holder has already, on its own volition, placed the issue in play.

The presumption of validity for the patent does apply in the second window. The petitioner may challenge a patent based on any defense the challenger could raise in district court litigation, but the existence, authentication, availability, and scope of any evidence offered to establish invalidity must be established by clear and convincing evidence. If such predicate facts are established, invalidity shall be proven only if the persuasive force of such facts demonstrates invalidity by a preponderance of the evidence.

The PGR petition must specify in detail the claims of the patent being challenged and the basis for the challenge, with any necessary supporting documentation. PGR proceedings are open to the public unless determined otherwise by the Patent Board. After a PGR proceeding is initiated, the patent holder will have an opportunity to file a response. During the proceeding, the patent holder has one opportunity as a matter of right to amend the claims, and may only amend the claims subsequently on motion and a showing of good cause. No amendment during a PGR proceeding may enlarge the scope of a claim or add new matter.

Various safeguards and estoppels have also been included to prevent the use of PGR for harassment. Every petition to institute a PGR must raise a substantial new question of patentability; this standard was elevated at mark-up to encourage only the most meaningful challenges. In addition, the same party who has once filed a PGR petition, whether in the first or the second window, regarding any claim in a patent, may not file another PGR on the same patent, regardless of the issues raised in the completed PGR. This “one bite at the apple” provision was included in Committee to quell concerns that a party bent on harassing a patent holder might file serial PGR petitions, although the Committee heard no suggestion that anything akin to that speculated harassment takes place currently.

Moreover, once a petitioner has challenged the validity of a patent through a PGR, that party may not challenge validity in a court proceeding based on any ground it raised during the PGR. Additionally, a party who has challenged the validity of a patent in court may not file a PGR petition on any grounds they raised, or could have raised, in the district court. Because the district court action allows the challenger the full panoply of discovery (unlike the restricted discovery appropriate to the more limited PGR proceeding), the Committee believes that it is only reasonable to apply estoppel to claims the challenger was, or should have been, in a position to raise, whether or not it did so.

The USPTO must complete its work on a PGR within one year in most cases, and 18 months in only those cases where the additional time is justified. PGR proceedings are conducted in the first instance by three Patent Board judges, and not first by an examiner, thus reducing the pendency compared to reexamination proceedings. Any party dissatisfied with a Board PGR decision, may appeal to the Federal Circuit, and all parties to the PGR proceeding may participate in such an appeal.

. . . The Director is admonished, among other regulatory tasks, to ensure that regulations forbidding and penalizing harassment are enacted and enforced.

The PGR process shall take effect on the date that is one year after the date of the enactment of the Act. After that time, first window PGR petitions may be filed against any patent, so long as the other provisions of the Act are satisfied. Second window PGR petitions (as well as consented petitions), however, may only be filed on patents that issue based on applications filed after November 29, 1999. That date was chosen by the Committee because it is the date used to determine whether a patent could be eligible for inter partes reexaminations (which are eliminated under the Act). Thus, patents that were eligible for inter partes reexamination, are now eligible for the second window.

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Archived updates for Tuesday, January 22, 2008

Senate Patent Reform Bill on Damages

The Intellectual Property Owners Association "believes Sen. Patrick Leahy (D-VT) will attempt to pass a revised version of S. 1145 in the Senate in February. Major amendments likely will not be available more than a few days in advance of Senate consideration. It is unclear whether the Senate has the votes to pass a bill. If the Senate does pass a bill, it likely will be sent to the House for swift passage by the House without amendments, eliminating the need for a Senate-House conference."

However, "patent reform fatigue has set in, with people tiring of debating the complex bills and hoping radical changes will not be made because reforms already have been made by recent Supreme Court decisions." So, thanks to Kevin E. Noonan at Patent Docs for recently posting his analyses of the 106-page draft report of the Senate Judiciary Committee on the Patent Reform Act of 2007 (S. 1145) which, would amend 35 U.S.C. § 284, the patent damage statute, as follows:

The court shall award the claimant damages adequate to compensate for the infringement but not less than a reasonable royalty, together with interest and costs. The court may receive expert testimony to assist it in determining damages. In determining a reasonable royalty, the court shall determine which of the following methods should be used, and should identify the factors that are relevant thereto:

(A) entire market value - the royalty may be based upon the entire market value of the larger apparatus / process, that incorporates the infringing product / process, if the claimed invention's specific contribution over the prior art is the predominant basis for the market demand of the larger apparatus / process;

(B) established royalty based on marketplace licensing - the royalty may be based on other nonexclusive licenses of the patented invention if the claimed invention has been the subject of a nonexclusive license to a number of persons sufficient to indicate a general marketplace recognition of the reasonableness of the licensing terms, if the license was secured prior to the filing of the case, and if the infringer's use is of substantially the same scope, volume and benefit of the rights granted under such license.

(C) If showings under (A) and (B) have not been made, the court shall conduct an analysis to ensure that a reasonable royalty is applied only to the portion of the economic value of the infringing product or process properly attributable to the claimed invention's specific contribution over the prior art. In the case of a combination invention whose elements are present individually in the prior art, the contribution over the prior art may include the value of the additional function resulting from the combination, as well as the enhanced value, if any, of some or all of the prior art elements as part of the combination, if the patentee demonstrates that value.

In determining a reasonable royalty, where appropriate, the court may also consider (or direct the jury to consider) any other relevant factors under applicable law.
The methods set forth in this subsection shall only apply to calculation of damages based on a reasonable royalty.

Willful infringement – § 284 is amended by adding subsection (e) to codify, and change, the doctrine of willful infringement:

A court may increase damages by up to three times based on a finding of willful infringement. A determination of willful infringement shall be made without a jury. To prove willful infringement, a patentee must prove by clear and convincing evidence that:

(A) the infringer received written notice from the patentee (i) alleging acts of infringement in a manner sufficient to give the infringer an objectively reasonable apprehension of suit on such patent, and (ii) identifying with particularity each claim of the patent, each allegedly infringing product or process, and the relationship of such product or process to such claim, the infringer, after a reasonable opportunity to investigate, thereafter performed one or more acts of infringement;

(B) after receiving such notice and after a reasonable opportunity to investigate, the infringer intentionally copied the patented invention with knowledge that it was patented; or

(C) after having been found by a court to infringe a patent, the infringer engaged in conduct that was not colorably different from the conduct previously found to have infringed the patent, and which resulted in a separate finding of infringement of the same patent.

The doctrine of willful infringement has the following limitations:

(i) “good faith” - A court may not find that an infringer has willfully infringed a patent for any period of time during which the infringer had an informed good faith belief that the patent was invalid or unenforceable, or would not be infringed. An informed good faith belief may be established by (a) reasonable reliance on advice of counsel; (b) evidence that the infringer sought to modify its conduct to avoid infringement once it had discovered the patent; or (c) other evidence a court may find sufficient to establish good faith. The decision of the infringer not to present evidence of advice of counsel is not relevant to a determination of willful infringement.

(ii) pleadings - a patentee may not plead (and a court may not determine) willful infringement before the date on which a court determines that the patent in suit is not invalid, is enforceable, and has been infringed by the infringer.

Subsection (c) – Marking and notice – is added to provide that, for patented inventions not covered under subsection (a)(1), past damages shall be limited to 2 years prior to the filing of a complaint (or counterclaim) except upon proof that the infringer was notified of infringement by the patentee. In no case shall liability for past damages exceed 6 years.

Subsection (d) – Subsection (b)(6) of § 273 is amended to also allow “affiliates” of the person who performed the necessary prior user rights acts to assert the defense.
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Senate Patent Reform Bill on Assignee Filing

Thanks to Kevin E. Noonan at Patent Docs for discussing the assignee filing provisions of the 106-page draft report of the Senate Judiciary Committee on the Patent Reform Act of 2007 (S. 1145) which, would amend 35 U.S.C. section 115 to allow a substitute (declaration) statement:

(1) IN GENERAL.—In lieu of executing an oath or declaration under subsection (a),
the applicant for patent may provide a substitute statement under the circumstances described in paragraph (2) and such additional circumstances that the Director may specify by regulation.

(2) PERMITTED CIRCUMSTANCES.—A substitute statement under paragraph (1) is permitted with respect to any individual who—

(A) is unable to file the oath or declaration under subsection (a) because the individual—

(i) is deceased;
(ii) is under legal incapacity; or
(iii) cannot be found or reached after diligent effort; or

(B) is under an obligation to assign the invention but has refused to make the oath or declaration required under subsection (a).

(3) CONTENTS.—A substitute statement under this subsection shall—

(A) identify the individual with respect to whom the statement applies;

(B) set forth the circumstances representing the permitted basis for the filing of the substitute statement in lieu of the oath or declaration under subsection (a); and

(C) contain any additional information, including any showing, required by the Director

Under the proposed amendments to Section 118:

A person to whom the inventor has assigned or is under an obligation to assign the invention may make an application for patent. A person who otherwise shows sufficient proprietary interest in the matter may make an application for patent on behalf of and as agent for the inventor on proof of the pertinent facts and a
showing that such action is appropriate to preserve the rights of the parties. If the Director grants a patent on an application filed under this section by a person other than the inventor, the patent shall be granted to the real party in interest and upon such notice to the inventor as the Director considers to be sufficient.
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