CASRIP Newsletter - Fall 1995, Volume 2, Issue 3
PATENT LAW DEVELOPMENTS
From December 1994 to September 1995 by Donald S. Chisum
Enacted: Uruguay Round Agreements Act (URAA), Pub. L. 103-465, 108 Stat. 4805 (Dec. 8, 1994) ("Patent Provisions" at Title V, Subtitle C). See PTO Rule Notice, 60 Fed. Reg. 20195 (April 25, 1995) (rules on provisional applications and 20-year term); 60 Fed. Reg. 21043-02 (May 1, 1995) (amending Rule 131 to allow invention date proof in WTO and NAFTA countries).
- 20-Year From Filing Patent Term. Effective for patents on all applications, including continuing applications, filed on or after June 8, 1995; extension of some existing patents. PTO rules: 129 ("transitional provisions", extended examination for pre- June 8 applications) 701 (calculating extensions because of prosecution delays). See also DuPont Merck Pharmaceutical Co. v. Bristol-Myers Squibb Co., 62 F.3d 1397, 35 USPQ2d 1718 (Fed. Cir. 1995) (provisions delaying FDA approval of generic drug applications apply during URAA "delta period" (increase to 20 year term) even though URAA limits remedies to equitable remuneration).
- Provisional Applications--Domestic Priority. Priority for 12 months, low fee, no oath or claims necessary. PTO rules: 48(e), 51(a)(2), 53(b)(2), (d)(2), (e)(2), 78(a)(4).
- Proof of Inventive Acts in Other (WTO) Countries, 35 U.S.C. § 104 (effective Jan. 1, 1996). PTO rule: 131.
- Offers to Sell and Importation as Infringing Acts, 35 USC § 271 (effective Jan. 1, 1996).
- Reexamination Expansion. H.R. 1732; S. 1070, 104th Cong. Proposed PTO Rules 901-997, 60 Fed. Reg. 41035-01 (Aug. 11, 1995).
- 18-Month Publication. H.R. 1733 ("Patent Application Publication Act"), 104th Cong. Proposed PTO Rules 305-308, 60 Fed. Reg. 42352 (Aug. 15, 1995)
- Biotechnology Processes. H.R. 587; S. 1111, 104th Cong.
- PTO Corporation Act. H.R. 1649, 104th Cong.
PTO GUIDELINE NOTICES.
- Utility. Guidelines: 60 Fed. Reg. 36263-02 (July 14, 1995).
- Software. Proposed Guidelines on "Computer-Implemented Inventions", 60 Fed. Reg. 28778 (June 2, 1995); see also 60 Fed. Reg. 52655 (Oct. 4, 1995) (announcing availability of "legal analysis" to support proposed guidelines).
FEDERAL CIRCUIT CASE DEVELOPMENTS.
Patentable Subject Matter--Algorithms--Computers--Printed Matter: In re Trovato, 42 F.3d 1376, 33 USPQ2d 1194 (Fed. Cir. 1994), vacated, 60 F.3d 807, 35 USPQ2d 1570 (Fed. Cir. 1995) (en banc) (panel decision upholding § 101 mathematical algorithm rejection vacated; remand to PTO in view of PTO's proposed software guidelines); In re Beauregard, 53 F.3d 1583, 35 USPQ2d 1383 (Fed. Cir. 1995) (PTO rejection claim to program on storage medium; dismissed in view of PTO's position change).
Utility: In re Brana, 51 F.3d 1560, 34 USPQ2d 1436 (Fed. Cir. 1995) (animal model tests support utility of claimed antitumor compounds; PTO erred in requiring FDA- type proof of effectiveness).
Anticipation--"Public Use" and On Sale" Bars (§ 102): Glaxo Inc. v. Novopharm Ltd., 52 F.3d 1043, 34 USPQ2d 1565 (Fed. Cir. 1995) (fact finding that example in prior patent did not inherently and inevitably produce crystalline form of compound claimed in later patent); Ferag AG v. Quipp Inc., 45 F.3d 1562, 33 USPQ2d 1512 (Fed. Cir. 1995) (sale offer to 50%-owned distributor is a bar); Allied Colloids Inc. v. American Cyanamid Co., 64 F.3d 1570, 35 USPQ2d 1840 (Fed. Cir. 1995) (patentee's test at customer's plant was experimental and thus not a barring public use even though the test was "commercially motivated"); Hoover Group, Inc. v. Custom Metalcraft, Inc., --- F.3d ---, 36 USPQ2d 1101 (Fed. Cir. 1995) (no anticipation).
Prior Art--Prior Invention--Inventive Entities: Checkpoint Systems, Inc. v. U.S. Int'l Trade Comm'n, 54 F.3d 756, 35 USPQ2d 1042 (Fed. Cir. 1995) (prior invention by one employee invalidates an employer's patent on another employee's invention when the prior inventor had no obligation to assign his invention to the employer); In re Chu, 66 F.3d 292, 36 USPQ2d 1089 (Fed. Cir. 1995) (under the 1984 amendment to Section 120, a continuing application may claim the benefit of an earlier parent application even though the two applications name overlapping but different inventor groups; benefit is not available when the earlier application does not fully disclose the invention claimed in the later application).
Obviousness (§ 103): In re Napier, 55 F.3d 610, 34 USPQ2d 1782 (Fed. Cir. 1995) (analogous prior art reference on "parallel problem" suggested invention); In re GPAC Inc., 57 F.3d 1573, 35 USPQ2d 1116 (Fed. Cir. 1995) (analogous prior art "implicitly" suggested invention); In re Deuel, 51 F.3d 1552, 34 USPQ2d 1210 (Fed. Cir. 1995) (PTO rejection of claims to DNA encoding a protein was error when the prior art showed DNA cloning methods and a partial amino acid sequence for the protein but contained no suggestion of the DNA's structure); In re Soni, 54 F.3d 746, 34 USPQ2d 1684 (Fed. Cir. 1995) (improved properties of composition are presumptively unexpected); In re Chu, supra (applicant's evidence of advantages must be considered in determining the patentability of an invention's modification of the prior art even though the applicant's specification was "virtually silent" about the modification's advantages and failed to state that the modification solved any problem or achieved any unexpected result; the PTO erred in rejecting the claimed invention as a mere "design choice" modification of prior art when the applicant presented evidence of technical problems in the prior art that would have deterred one from making the modification).
Enablement--Invention Description--Best Mode (§ 112): Glaxo, supra (best mode: actual human inventor's preference controls; a mode preferred by corporate owner but not known to inventor need not be disclosed); Therma-Tru Corp. v. Peachtree Doors Inc., 44 F.3d 988, 33 USPQ2d 1274 (Fed. Cir. 1995) (inherent properties of a product disclosed in a parent application support explicit description of the properties in the claims in a CIP application); Eiselstein v. Frank, 52 F.3d 1035, 34 USPQ2d 1467 (Fed. Cir. 1995) (parent application disclosure of 45-50% ingredient content supports a later claim to "about 45 to 50" but not a claim to 50-60%); Graco, Inc. v. Binks Manufacturing Co., 60 F.3d 785, 35 USPQ2d 1255 (Fed. Cir. 1995) (specific intent to deceive not required for best mode violation).
PTO Practice--Maintenance Fees: Ray v. Lehman, 55 F.3d 606, 34 USPQ2d 1786 (Fed. Cir. 1995) (ignorance of maintenance fee requirement is no excuse for nonpayment; PTO did not err in finding that the owner of an expired patent showed no "unavoidable delay").
Reexamination--Broadening Claim Amendments: Quantum Corp. v. Rodime, Plc, 65 F.3d 1577, 36 USPQ2d 1162 (Fed. Cir. 1995) (improper broadening of a patent claim during reexamination in violation of 35 USC § 305 renders the claim invalid even though § 282 does not expressly list § 305 violations as an invalidity defense; addition of "approximately" in a claim to "at least approximately 600" broadens the claim)
Inequitable Conduct--Duty of Candor (Rule 56): Glaxo, supra (submission of a declaration setting forth a misleading description of comparative test results was not inequitable conduct when no intent to deceive was shown); Molins PLC v. Textron, Inc., 48 F.3d 1172, 33 USPQ2d 1823 (Fed. Cir. 1995) (failure to cite to the US PTO a reference cited in foreign prosecution justified an inference of intent to deceive the PTO; an attorney's failure to disclose in prosecution of one client's application another client's earlier pending application is a situation "fraught with possible conflict of interest"; a citation of a reference in a long list is not "burying" when the examiner initialed the reference; failure to cite a reference the examiner eventually discovered is not a duty of candor breach); Glaverbel Societe Anonyme v. Northlake Marketing & Supply, Inc., 45 F.3d 1550, 33 USPQ2d 1496 (Fed. Cir. 1995) (no culpable intent); Baxter Healthcare Corp. v. Spectramed, Inc., 49 F.3d 1575, 34 USPQ2d 1120 (Fed. Cir. 1995) (no culpable intent); Therma-Tru Corp. v. Peachtree Doors Inc., 44 F.3d 988, 33 USPQ2d 1274 (Fed. Cir. 1995) (conflict in judge and jury findings on patentability and materiality); Allied Colloid, supra (not inequitable conduct to omit telling PTO about conduct applicant in good faith believes not material to patentability (such as an a pre-critical date experimental test)).
Direct and Indirect Infringement (§ 271): High Tech Medical Instrumentation, Inc. v. New Image Industries, Inc., 49 F.3d 1551, 33 USPQ2d 2005 (Fed. Cir. 1995) (no infringement when device must be altered to fall within patent's claims); Bell Communications Research, Inc. v. Vitalink Communications Corp., 55 F.3d 615, 34 USPQ2d 1816 (Fed. Cir. 1995) (a product that sometimes but not always embodies the claimed method infringes); Sage Products, Inc. v. Devon Industries, Inc., 45 F.3d 1575, 33 USPQ2d 1765 (Fed. Cir. 1995) (no contributory infringement in sale of part for patented device when part was intended to be periodically replaced; replacement of part is "repair", not "reconstruction", even though the part could be cleaned and re-used).
Claim Interpretation: Markman v. Westview Instruments, Inc., 52 F.3d 967, 34 USPQ2d 1321 (Fed. Cir. 1995) (en banc), cert. granted, 52 U.S. 967 (Sept. 27, 1995) (claim interpretation, including evaluation of "extrinsic evidence" is purely a legal question for trial judge, not jury, and reviewable de novo on appeal: the question posed by petitioner to the Supreme Court: "In a patent infringement action for damages, is there a right to a jury trial under the Seventh Amendment of the United States Constitution of genuine factual disputes about the meaning of a patent?"); Exxon Chemical Patents Inc. v. Lubrizol Corp., 64 F.3d 1553, 35 USPQ2d 1801 (Fed. Cir. 1995) (the trial judge must independently determine what a claim means, not simply choose between the opposing parties' theories; a claim to a composition listing five ingredients is not a "recipe" covering any composition made of the ingredients but rather to a composition that contains the ingredients at any time, not just when the product is "final" or ready for customer use; judgment on a jury verdict of infringement must be reversed without remand for new trial even though the trial judge's instruction on claim interpretation, adopting patentee's theory, was erroneous); Pall Corp. v. Micron Separations, Inc., 66 F.3d 1211, 36 USPQ2d 1225 (Fed. Cir. 1995) ("skinless" in a patent claim to a membrane has a performance definition rather than an "ordinary" meaning and covers a membrane with a visible "skin" that meets the patent specification's performance characteristics for a free-flowing, i.e. "skinless", membrane; claim to a membrane with components in a ratio of "about 5:1 to about 7:1" does not cover a 4:1 membrane literally but does cover it under equivalency doctrine); Hoover Group, Inc. v. Custom Metalcraft, Inc., 66 F.3d 299, 36 USPQ2d 1101 (Fed. Cir. 1995) (a patent claim requiring a "bend" "into and along" which a liquid flows by gravity must be given its ordinary meaning so that it does not cover a "bend" extending upward despite the patentee's argument that a liquid can flow "into", i.e., in the direction of, and along, an upward bend); Southwall Technologies, Inc. v. Cardinal IG Co., 54 F.3d 1570, 34 USPQ2d 1673 (Fed. Cir. 1995) (prosecution history limited the interpretation of "sputter- deposited dielectric layer" in a patent claim; contrary expert testimony creates no fact issue); Bell Communications, supra (claim preamble as limitation; process for local area network; "associating" "an identifier" with a "packet"); Graco, Inc., supra (trial court failure to discuss claim interpretation (word: "rib")); Laitram Corp. v. NEC Corp., 62 F.3d 1388, 36 USPQ2d 1388 (Fed. Cir. 1995) (district court erred in interpreting claim).
Doctrine of Equivalents: Hilton Davis Chemical Co. v. Warner- Jenkinson Co., Inc. 62 F.3d 1512, 35 USPQ2d 1641 (Fed. Cir. 1995) (en banc) (the ultimate test for the doctrine of equivalents is the "substantiality" of the differences between the claimed invention and the accused product or process; equivalency is a fact question subject to jury trial right; "independent development" by the accused infringer is relevant only to rebut a patentee's allegation that the infringer copied and therefore that the differences are not substantial; equivalency is determined at the time of the alleged infringement).
Prosecution History Estoppel: Hilton Davis, supra (no estoppel to extend 6 to 9 pH range to cover a 5 pH when the range was added to distinguish prior art showing over 9 pH); Southwall, supra (arguments on meaning of term in one claim applies to every claim; multiple arguments to distinguish prior art reference may create multiple estoppels despite contrary statement in Read v. Portec (1991)); Pall Corp., supra (no estoppel barring extension of claim to membrane sheet with methylene/amide group ratio of "about 5:1 to about 7:1" to accused product with 4:1 ratio membrane sheet; during prosecution, inventor added ratio because of his post-filing research, which showed that neither 3:1 nor above 7:1 worked (the inventor conducted no tests on 4:1 because no such sheet was commercially available to him) and responded to examiner rejection as to "too broad" by arguing that claims are "actually rather narrow"); Mark I Marketing Corp., v. R.R. Donnelley & Sons Co., 66 F.3d 285, 36 USPQ2d 1095 (Fed. Cir. 1995) (estoppel is a legal issue the appeals court can resolve for the first time on appeal; filing continuing applications with narrower claims after earlier application claims are rejected can create an estoppel).
Design Patents--Infringement: Sun Hill Industries, Inc. v. Easter Unlimited, Inc., 48 F.3d 1193, 33 USPQ2d 1925 (Fed. Cir. 1995) (accused product does not appropriate patented design's novel features; erroneous comparison with patentee's commercial embodiment)
Defenses--Laches and Estoppel: ABB Robotics, Inc. v. GMF Robotics Corp., 52 F.3d 1062, 34 USPQ2d 1597 (Fed. Cir. 1995) (patentee's silence can be misleading even though there were no threats of immediate enforcement; capital investment is not necessary for economic prejudice); Gasser Chair Co., Inc. v. Infanti Chair Manufacturing Corp., 60 F.3d 770, 34 USPQ2d 1822 (Fed. Cir. 1995) (summary judgment upholding laches and estoppel improper when inferences could be drawn finding that the patentee's delay in suing was reasonable or excused or that there was no prejudice).
Patent Invalidity--Jury Trial: Hilton Davis, supra (Nies dissenting); In re Lockwood, 50 F.3d 966, 33 USPQ2d 1406, NIES, dissenting, 33 USPQ2d 1907 (Fed. Cir. 1995), cert. granted, 115 S. Ct. 2274 (1995), judgment vacated, 64 USLW 3182 (Sept. 1, 1995) (patentee's withdrawal of jury demand moots question of entitlement to jury on patent invalidity issue); In re SGS-Thomson Microelectronics Inc., 61 F.3d 862, 35 USPQ2d 1639 (Fed. Cir. 1995) (granting an accused infringer a jury trial on its counterclaim for a declaratory judgment of invalidity even though the patentee sought only injunctive relief against infringement) (NIES, Archer & Plager, dissenting from order declining the suggestion for rehearing in banc)
Injunctions--Contempt: High Tech, supra (no irreparable harm sufficient to support preliminary injunction when the patentee did not practice the patented invention, had offered the accused infringer a license, did not contend that the accused infringer would be unable to pay damages, and delayed bringing suit for 17 months after it obtained a re- examination certificate for the patent); Arbek Mfg., Inc. v. Moazzam, 55 F.3d 1567, 34 USPQ2d 1670 (Fed. Cir. 1995) (summary contempt proceeding to find infringement is not proper when the enjoined infringer's new design differed substantially from that previously found to infringe).
Damages: Rite-Hite Corp. v. Kelley Co., Inc., 56 F.3d 1538, 35 USPQ2d 1065 (Fed. Cir. 1995) (in banc) (causation and foreseeability limit damages; a patentee may recover for lost sales of its product, which its infringed patent did not cover but which competed with the infringing product; no recovery for sales of unpatented products, components, or parts unless they function together with the patented product; a reasonable royalty may be based on a high percentage of the patentee's expected lost profits when patentee and infringer are direct competitors); King Instruments Corp. v. Perego, 65 F.3d 941, 36 USPQ2d 1129 (Fed. Cir. 1995) (patentee entitled to profits for lost sales of a machine (cassette tape loader) caused by a defendant's sale of a competing tape loader-- even though the infringed patent did not cover the patentee's product and only covered a feature in an optional accessory (tape reeler changer) that the defendant (but not the patentee) offered with its tape loader; "The market may well dictate that the best use of a patent is to exclude infringing products, rather than market the invention."); Comair Rotron, Inc. v. Nippon Densan Corp., 49 F.3d 1535, 33 USPQ2d 1929 (Fed. Cir. 1995) (the patentee was not collaterally estopped from asserting that a product infringed two patents even though, in a prior suit, another district court, in awarding a reasonable royalty rather than lost profits for infringement of one of the patents, had found that product was a noninfringing alternative); Pall Corp., supra (a patentee's settlement with a third party accused of infringement makes the third party's products an adequate noninfringing alternative only as of the settlement date; for sales before the settlement, the patentee is entitled to a full lost profits award; for sales after the settlement, the patentee is entitled only to a market share lost profits award (on 25% market share of infringing sales) and a reasonable royalty (8% on other 75%)).
Standing to Sue: Rite-Hite, supra (distributors with territorially exclusive contract rights to distribute the patentee's products lack standing to join with the patentee in a suit seeking damages for infringement); Abbott Laboratories v. Diamedix Corp., 47 F.3d 1128, 33 USPQ2d 1771 (Fed. Cir. 1995) (a patentee must be allowed to intervene in an exclusive licensee's infringement suit against another party even though the license granted the licensee full control of litigation; the licensee can continue the suit only if it joins the patentee because the patentee retained substantial rights under the patent, including a limited right to make, use, and sell products, a right to bring suit if the exclusive licensee did not do so, and a right to prevent the licensee from assigning its rights); Ortho Pharmaceutical Corp. v. Genetics Institute, Inc., 52 F.3d 1026, 34 USPQ2d 1444 (Fed. Cir. 1995) (a licensee of a patentee's patent on an intermediate product, the license conferring a nonexclusive right to use the intermediate product in the U.S. to make an unpatented end product and an "exclusive" right to export the unpatented end product to foreign countries, had no standing to sue for infringement by another party who, without authority, used the patented intermediate product to make the end product and exported the end product to foreign countries and who had been held liable for infringement in an earlier suit by the patentee).
Willful Infringement--Opinion of Counsel: Therma-Tru Corp. v. Peachtree Doors Inc., 44 F.3d 988, 33 USPQ2d 1274 (Fed. Cir. 1995) (upholding jury verdict of willfulness because of copying even though the infringer obtained a patent attorney's noninfringement/invalidity opinion); Graco, supra (no willful infringement because of counsel's noninfringement advice even though the infringer made a small number of sales of a product that counsel had not approved); Pall Corp., supra (no willful infringement even though, after the suit was filed, the infringer switched only part of its production from a product that literally infringed to one that did not (though the latter did infringe under the doctrine of equivalents): "an action even if innocently begun does not automatically retain its purity as circumstances change," but "[a]ttempts to avoid or mitigate infringement, whether or not successful, do not of themselves enlarge the culpability of the continuing activity").
Declaratory Judgments--Actual Controversy: Serco Services Co. v. Kelley Co., Inc., 51 F.3d 1037, 34 USPQ2d 1217 (Fed. Cir. 1995) (an accused infringer's declaratory judgment suit was properly dismissed even though it was filed three days before the patentee's suit; the accused infringer's purpose to preempt the patentee's suit is a relevant factor despite the Genentech decision (1993)); Phillips Plastics Corp. v. Kato Hatsujou Kabushiki Kaisha, 57 F.3d 1051, 35 USPQ2d 1222 (Fed. Cir. 1995) (a patentee's attempt to impose license is commercial activity, not a threat of suit sufficient to create a justiciable controversy for declaratory judgment purposes); Super Sack Manufacturing Corp. v. Chase Packaging Corp., 57 F.3d 1054, 35 USPQ2d 1139 (Fed. Cir. 1995) (a patentee's promise not to assert a patent against the defendant's present product line moots a declaratory judgment suit even though the patentee is free to accuse future products; the Supreme Court's Cardinal decision does not alter standards for district court declaratory judgment jurisdiction); DuPont Merck Pharmaceutical Co. v. Bristol-Myers Squibb Co., 62 F.3d 1397, 35 USPQ2d 1718 (Fed. Cir. 1995) (an actual controversy is present in a suit challenging the FDA's interpretation of the URAA patent term extension's impact on statutory provisions delaying FDA approval of generic drug applications that seek to market a drug before a patent's expiration).