Archive for November, 2010

Supreme Court to Review Presumption of Validity

November 30, 2010

A defense to a claim of patent infringement is that the patent is invalid for failure to comply with one or more sections of the Patent Act.  These provisions include lack of novelty, obviousness, or violation of the written description or enablement requirement.  An accused infringer may have a patent claim declared invalid by a court for violation of these provisions.

Yet, the Patent Act also contains a provision that would seemingly help the patent owner.  “A patent shall be presumed valid.”  35 U.S.C. § 282.  What exactly does that mean?  The courts have interpreted this statutory provision to mean that, in order for a challenger to prove that a patent is invalid for violating one of the provisions of the Patent Act, he must make such proof by clear and convincing evidence.

Standards of Proof

In the law, there are a number of standards of proof that are used in particular cases.  In criminal cases, the prosecution must prove the elements of a crime were committed by the accused “beyond a reasonable doubt.”  This generally means that the trier of fact (the court or the jury) is convinced of the truth of the facts to the point where it would be unreasonable to doubt their veracity. 

In most civil cases, including patent infringement, the party seeking to prove a fact must do so by a “preponderance of the evidence.”  This means that the trier of fact must be convinced that the facts are more likely true than not true.

In a few instances, such as when attempting to prove that a patent claim is invalid, the party seeking to prove a fact must do so by “clear and convincing evidence.”  This standard is a bit uncertain, but it is a higher standard than simply more likely than not; it does not, however, reach the level of beyond a reasonable doubt.  It has been defined as a “strong belief” in the truth of the fact.

Presumption of Validity

Why did Congress grant patents a presumption of validity?  Why must invalidity be proven by clear and convincing evidence?  The rationale behind this statutory provision is that the PTO is a Federal agency that has already passed on the validity of the patent claims.  Patent examiners are presumed to be experts in the subject matter of reviewing and granting patents.  Thus, for the initial Federal review by an expert to have any meaning, a challenger must present evidence that reaches a higher level than merely more likely than not.

For some time now, there has been a discussion as to whether this presumption of validity should only cover issues that were actually considered by the patent examiner and not to newly raised issues.  For example, should the presumption of validity cover prior art references (to prove the patent claim is not novel or is obvious) that were not found or considered by the patent examiner?  Or should invalidity based on previously undiscovered references be determined by the trier of fact on the more likely than not standard of review?

On the one hand, the patent examiner is presumed to have searched for and discovered the most relevant prior art.  Perhaps he found the prior art presented by the accused infringer as new, but didn’t consider it pertinent or material enough to consider it with respect to the patent claims.  Is it really newly discovered or not?  Should it matter if the PTO passed on the patent claims?  Should a court or jury be allowed to second-guess the PTO?

On the other hand, sometimes the expertise of the patent examiner is overblown.  We know that examiners have little time to review each patent application.  They couldn’t possibly discover every pertinent piece of prior art in the world.  Accused infringers have strong incentives to discover such prior art.  We shouldn’t hamstring the trier of fact by the higher standard of proof required to invalidate the patent.

Microsoft v. i4i

Yesterday, the Supreme Court granted certiorari in Microsoft v. i4i.  The Court will consider the question:

Whether the court of appeals erred in holding that Microsoft’s invalidity defense must be proved by clear and convincing evidence.

The Federal Circuit, following long standing precedent, ruled that Microsoft was required to prove invalidity by clear and convincing evidence even when the prior art had not been considered by the patent examiner.  The prior art in this case being a sale made by i4i more than one year before it filed the patent application.

A number of parties filed amicus briefs where they urged the Supreme Court to review this case.  It seems likely that the Supreme Court will lower the standard of proof from clear and convincing evidence.  The main question the justices must decide then is:  what does the statutory presumption of validity mean?  Simply lowering the standard to a preponderance of the evidence would render the presumption of validity a nullity.

Is this case important?  How often will an accused infringer not be able to prove invalidity by the clear and convincing standard, but still be able to prove it by a preponderance of the evidence?  Do juries even understand the difference?  Does anyone?  Juries usually don’t indicate that they would find a patent invalid under the lower standard, but because they are constrained by the higher standard they don’t find it invalid.

The case is important because the presumption of validity and the higher standard of proof required provide a psychological barrier to invalidity arguments, especially for juries.  A ruling in Microsoft’s favor may indeed result in more patents being declared invalid in litigation.

The Court will hear arguments in the case in the spring.  A decision is expected by the end of the Court’s current term in June.  The Chief Justice recused himself from the case, so it will be decided by the remaining 8 justices.


Pre-Appeal Brief Conferences

November 22, 2010

Lost in the PTO’s newly proposed rules for BPAI practice, but as mentioned by Patently-O, the PTO published some statistics on pre-appeal brief conferences last week.

A few years ago, the PTO realized that too many appeals were not reaching the Board for decision after the applicant filed an appeal brief.  Many of these applications were simply allowed or the rejections withdrawn and new rejections issued.  This is an extremely inefficient way to conduct examination and was very costly to applicants who had to file appeal briefs to get cases reviewed for inadequate rejections.

The Pre-Appeal Brief Conference is a way for an applicant to get a review of rejections that are otherwise eligible for appeal by a group of experienced examiners without the need to file a full appeal brief.  The request for a conference is to be five pages or less, significantly shorter than most appeal briefs, and filed prior to the filing of a full brief.  The request is to point out obvious deficiencies in the rejections or the lack of a prima facie case to establish the rejections.  The applicant does have to file a notice of appeal with the request.

The panel of experienced examiners to review the request includes at least the examiner of record, the supervisor of the examiner, and another experienced examiner in the field.  Within 45 days of the request, the panel indicates whether the application should continue on appeal, whether the examiner should reopen prosecution so that the examiner can issue new or revised rejections, or whether the examiner should allow the claims.

The PTO released the following data on pre-appeal brief conferences:

The PTO also released comparative data on Appeal Brief Conferences.  These are conferences that take place after the appeal brief has been filed.  Prior to the implementation of the Pre-Appeal Brief Conference procedure, there were significantly more appeals that did not reach the Board after the appeal brief was filed.

As noted, during FY2010, 59% of applications where an appeal brief was filed proceeded with an Examiner’s Answer, while 23% had prosecution reopened and 17% were allowed.  This contrasts significantly with FY2001-2005 where 59-60% of the time, either prosecution was reopened or all of the rejections were withdrawn once an appeal brief was filed. 

More and more pre-appeal brief requests are being filed, up to 34% of all cases where a Notice of Appeal was filed in FY2010.  About 56% of the time, these cases proceed with the appeal, while in 42-43% of the cases, prosecution is reopened or the claims are allowed.  A request for a pre-appeal brief conference is significantly shorter and more efficient to prepare and file than an appeal brief.  This seems like a no-brainer to avoid the expense of a costly appeal brief.  The system seems to be a success.

Should Applicants Request a Pre-Appeal Brief Conference?

Applicants should not use these requests to avoid appealing a case, but should request a conference only when the other alternatives to appeal have been exhausted.  The applicant should first be certain that an examiner interview or other methods of persuasion will not work and that the rejection is truly deficient.  In such a case, by all means, request the pre-appeal brief conference.  There is at least a 42-43% chance that the claims will be allowed or prosecution re-opened with another Office Action and perhaps the expense of preparing and filing an appeal brief can be avoided.

PTO Proposes New Appeal Rules

November 16, 2010

The PTO is again seeking to change the rules for patent appeals at the Board of Patent Appeals and Interferences.  The good news is that the new Federal Register notice indicates that the previous controversial and highly technical rules proposed by the last administration at the PTO have officially been rescinded.  Instead, the PTO is seeking to implement rules that should significantly simplify appeal proceedings.

Several of the notable changes include the following:

  1. The Board will presume that an appeal is taken from all the claims under rejection that are not cancelled by an amendment.  The appellant will no longer be required to specifically designate the claims that are under appeal.
  2. The Board will take jurisdiction once a reply brief is filed.  The examiner will no longer be required to acknowledge or respond to the reply brief.  This should speed up the appellate process by eliminating an unnecessary step.
  3. If the examiner’s answer relies on new evidence, it will be deemed a new ground of rejection.
  4. Appellants can await petition decisions on new grounds for rejection before filing a reply brief.
  5. Many of the technical requirements for information already in the record will be eliminated.  For example, appendices that include a listing of the claims, a listing or evidence, and a listing or related proceedings would no longer be required.  It will also no longer be necessary for the appellant to indicate the status of whether the last amendment was entered or not as this should be clear from the record.
  6. The requirement that the appellant make reference to the specification and drawings with respect to each independent claim is being clarified.  This requirement is only necessary to aid the Board in understanding the claims, and this only for claim limitations in dispute.  It is not necessary to cite each instance of support for each claim throughout the entire specification.
  7. The previously proposed rule suggested that appellants had the burden to point out how the examiner’s rejections were in error.  The examiner’s rejections were presumed to be correct if not specifically challenged by the appellant.  This presumption is removed from the newly proposed rules.
  8. The Board has remanded a large number of appeals back to the examiner in recent years.  This can cause significant delay in the process.  The newly proposed rule indicates that only the Director should have the authority to remand appeals and this should be done rarely, only in cases where the Board cannot decide the issues before it.

The PTO believes that these proposed changes will reduce the time required for an attorney to prepare and file an appeal brief from 34 hours to 31 hours or save nearly $1,000.  The PTO is seeking comments on these proposed changes by January 14, 2011.

Another step in the right direction for the Kappos Administration.  They appear to have taken comments on the previously proposed rules seriously and eliminated many of the controversial ones that would have simply added to the cost of an appeal without adding to its efficiency.

Patent Reform in the Lame Duck Congress?

November 15, 2010

As Congress returns this week for a lame duck session that will focus on a new budget and the fate of the Bush-era tax cuts, there is some speculation in the patent world on the fate of Patent Reform in the 111th Congress. 

Normally, one would assume that the legislature will focus on the important economic issues and leave the other issues until next year, but that’s not how the US Congress works.  It is quite possible that the legislation, probably the Senate bill S. 515, will simply be tacked on to another piece of legislation that must be passed by the Congress.  Many congressmen won’t even realize that the Patent Reform provisions are in the bill. 

In 1999, the last time the Patent Act was significantly amended, the American Inventors Protection Act (AIPA) was tacked onto an omnibus spending bill.  The AIPA was part of a $385 billion government spending bill that included the Anti-Cybersquatting Act and the Satellite Home Viewer Act.  It was passed near the end of the congressional session with the House passing several continuing resolutions to keep the government running in the meantime.

Similarly in 2010, Congress could not pass a budget prior to adjourning for the mid-term elections at the end of September.  A continuing resolution was passed to keep the government running until December 3.  Now, the lame duck Congress must pass a new budget.  Will it include Patent Reform?  Should it include Patent Reform without proper debate?  There seems to at least be sufficient support to put a stop to the false marking cases.

112th Congress

If not, the dynamics will change a bit in the House with Republicans taking control.  Rep. Lamar Smith (R-TX) will chair the House Judiciary Committee.  He has been an advocate of Patent Reform, co-sponsoring the 2007 Patent Reform Act that passed the House but did not receive a floor vote in the Senate.

In the Senate, Sen. Patrick Leahy (D-VT) won an easy re-election and will continue to chair the Judiciary Committee.  The Democrats did lose 3 members of the Committee.  Sen. Arlen Spector (D-PA) lost in the Democratic Primary, Sen. Russ Feingold (D-WI) was defeated for re-election, and Sen. Ted Kaufman (D-DE) did not run for Vice President Joe Biden’s seat that he was holding until the special election in Delaware.

HT:  Hal Wegner

Federal Circuit Limits Prosecution Laches Defense

November 9, 2010

Earlier today, the Federal Circuit issued a decision in Cancer Research Tech. Ltd. v. Barr Labs., Inc. that limits the defense of prosecution laches.

In 2005, the Federal Circuit issued the decision in Symbol Techs., Inc. v. Lemelson Med. that established an equitable defense of prosecution laches.  The patent would be held unenforceable if the applicant exhibited unreasonable and unexplained delay during prosecution of the patent.  Prior to the change in the law in 1995 that reduced the term of a patent to 20 years from the earliest filing date, applicants could simply delay substantive prosecution to extend the term of an ultimately issuing patent.

In Cancer Research, the applicant filed its original US application on August 23, 1982.  The PTO issued the first substantive office action on November 18, 1983 rejecting some of the pending claims.  Rather than respond to the rejection, the applicant abandoned the application and filed a continuation application.  This, by itself, would not be a problem.  The applicant continued to do this, however, filing a total of 11 continuing applications, abandoning the first 10, and finally prosecuting the application to its issuance on November 9, 1993.  The patent was granted patent term extension for clinical testing such that it expires in February 2014.

The district court found the delay of nearly a decade to prosecute the application to be unreasonable and unexplained, holding the patent unenforceable for prosecution laches.  The Federal Circuit reversed.

The court held that the defense of prosecution laches requires a showing not only of unreasonable and unexplained delay, but also, as with any laches defense, there must be prejudice to the defendant by the delay.

[T]o establish prejudice an accused infringer must show evidence of intervening rights, i.e., that either the accused infringer or others invested in, worked on, or used the claimed technology during the period of delay. 

There is no evidence of intervening rights, as nobody else developed the product during the period of delay.  Barr did not file an ANDA (the act of infringement in this case) until 2007, 14 years after issuance of the patent.  There was no evidence that anyone else was prejudiced by the delay either.  The patentee did run the risk that someone else would develop a product and be prejudiced by the delay, but nobody did.

Judge Prost dissented, arguing that Federal Circuit precedent did not require a showing of prejudice for the defense of prosecution laches.  She also argues that since the patent does not expire until 32 years after the original application was filed, the public is indeed prejudiced by the delay in prosecution.  By confining the period of action for prejudice to the period of the delay (in this case 1984-1993), the majority is able to ignore the fact that the delay in prosecution now prejudices anyone who wants to enter the market.

Inequitable Conduct Article

November 9, 2010

As a follow up to yesterday’s post, I recently published an article on Primerus Defensively Speaking newsletter related to inequitable conduct and this morning’s en banc Federal Circuit argument.  The article is available here.

Two En Banc Arguments at Federal Circuit this Week

November 8, 2010

Tomorrow morning, two important cases will be argued at the Federal Circuit.

Therasense v. Becton Dickinson

This case will be heard by the 9 active judges plus Senior Judge Daniel Friedman.  Senior judges usually do not participate in en banc arguments.  Judge Friedman, the senior member of the court at 94 years of age, is able to do so because he was a part of the original panel that included Judges Dyk and Linn.

Therasense could significantly alter the court’s jurisprudence on inequitable conduct.  The en banc order laid out six questions regarding materiality and the balancing inquiry with intent to deceive the PTO.  There has been a rift on the court in recent years with Judge Linn frequently calling for the court to take up inequitable conduct en banc.  He finally gets his wish tomorrow.

TiVo v. EchoStar

This case will be heard by the 9 active members, plus Senior Judge H. Robert Mayer, who was a member of the original panel that heard the case.  TiVo concerns the use of contempt proceedings, in lieu of a new trial, for patent infringement.  After a judgment of infringement where the infringer introduces a product that is different from the originally infringing product, must the patent owner start over with a new infringement suit or can it simply ask the court to find that the defendant is violating the court’s order to stop infringing? 

The court posed a number of questions that it will seek to answer in this case to determine which proceeding is appropriate in various circumstances.

If Judge O’Malley is confirmed by the Senate during the lame duck session of Congress, she could also participate in the en banc decision even though she was not a member of the court during the argument.

Justice Department Files Brief Arguing that Isolated Genes are Not Patentable

November 1, 2010

In March, Judge Robert Sweet invalidated a number of patent claims directed to isolated gene sequences and methods of comparing or analyzing the sequences.  This case is now on appeal at the Federal Circuit.  The consensus is that the case will be reversed.  In a rather strange move, the Department of Justice has filed an amicus brief arguing that Judge Sweet’s opinion should be affirmed, at least with respect to isolated DNA.  No member of the Patent Office or Department of Commerce is listed on the brief.  It appears to have been written strictly by DOJ lawyers.

The brief begins with the argument that this case is about the distinction between human-made inventions and products of nature.  Engineered DNA molecules are human made and are thus eligible for patent protection.  Molecules that are engineered by humans or are manipulated by scientists and do not occur in nature are patent eligible.

The brief next goes on with the argument that isolated genomic DNA is not a human-made invention and is not eligible for patenting.  The DOJ does suggest that methods of identifying, isolating, or manipulating DNA sequences may be patented, but genomic DNA itself is a product of nature.

The DOJ acknowledges that this position is contrary to the PTO’s policy and the practice of the NIH and other government agencies.  Judge Sweet’s opinion in this case, however, was so persuasive that the DOJ needed to reevaluate its policy on these issues. 

The argument is that there are many items that are found in nature in only non-isolated forms that would not be patent eligible.  For example, coal beneath the earth, cotton fibers mixed with cotton seeds, and stigmas of the saffron flower are not found in their isolated forms.  Simply isolating them from the surrounding environment does not make them man-made inventions.  Similarly, there are many highly reactive elements on the periodic table that do not occur in nature in their separated elemental form, but only as chemical compounds.  These are also still products of nature. 

The argument is that the isolated product must be “different in kind” from the naturally occuring product to warrant patent protection.  In this case, isolated DNA is not different in kind from DNA in the human body.

Unfortunately, the DOJ relies heavily on a 1948 Supreme Court case that deals with obviousness rather than patent eligibility, Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948).  This case dealt with the pre-1952 Patent Act standard of obviousness, rather than patent eligibility under § 101.  The case involved a new mixture of bacteria that were each individually old.  Thus, the question was whether the new combination was obvious over the known individual bacteria.  The Court ruled that it was obvious and thus the mixture could not be patented.

Justice Stevens made the same mistake in Parker v. Flook where he confused the arguments of patent eligibility and non-obviousness.  These are completely separate inquiries.  An invention may very well be eligible for patent protection, but not receive a patent because it is an obvious combination of what is known in the art.


It still seems likely that this case will end up at the Supreme Court.  It is not completely clear what will happen before that Court.  The Federal Circuit, however, will likely still reverse the district court’s decision.  Although Judge Dyk expounded his view this summer in a completely unrelated case that isolated DNA is not patent eligible, it is likely the other members of the court would stick to the precedent and history of granting such patents.

Why did the DOJ file this brief?  Where are the members of the Department of Commerce and the Patent Office who would presumably have expertise in this area?  This brief takes a position contrary to that taken by the US Chamber of Commerce where it argues that the plaintiff’s lack standing to bring this suit.

Most likely, the Commerce Department and the PTO do not agree with the position taken in this brief by the DOJ.  It is not surprising that the current administration is aligning itself with the position of the ACLU.  Both have now taken extreme positions in this case.

It is possible that the Federal Circuit will simply agree that the plaintiffs do not have standing to bring this suit because there is simply no threat of enforcement against them and no case or controversy between the parties.  The plaintiffs would then be required to appeal that ruling to the Supreme Court.  Given the expansive reading by the court of the MedImmune decision, that is unlikely.

This case just keeps getting more interesting.