Archive for July, 2014

Federal Circuit Allows PTO to Overrule Court Decision Again

July 30, 2014

The Federal Circuit has again permitted the PTO to overrule a decision by a district court, affirmed on appeal by the Federal Circuit.  As in Fresenius USA, Inc. v. Baxter Int’l, Inc., Judge O’Malley has issued a vigorous dissent.  ePlus, Inc. v. Lawson Software, Inc.

In ePlus, the district court had found a number of asserted claims to not be invalid and a jury had found them to be infringed.  The court had issued an injunction against further infringement.  On appeal, the Federal Circuit reversed on a number of the issues, but affirmed that one of the asserted claims was not invalid and was infringed.  The court remanded the case to the district court to make necessary modifications to the injunction.

On remand, the district court modified the injunction and found the defendant to be in contempt for violating the injunction.  You can probably tell where this is going.  In a reexamination, the PTO ruled that the infringed claim was invalid, the finding of which was affirmed in a separate opinion by the Federal Circuit, while the present appeal was pending.

In the present appeal, due to the PTO overruling the court’s invalidity determination, the divided panel vacated the injunction and the contempt order.

The majority, per Chief Judge Prost, argue that the injunction was not final when the case was remanded to the district court.  Therefore, the injunction and the civil contempt citation based on violation thereof must be vacated.  This result is dictated by Fresenius.

O'MalleyJudge O’Malley agrees with the majority that the ongoing injunction must be set aside once the patent claim upon which it was based is no longer in effect.  Where she differs with the majority is that she doesn’t believe that all penalties for violating the injunction that was in effect for four years should also be erased.

She seeks to distinguish Fresenius on a number of grounds.  First, she notes that the judgment of validity and infringement of the claim at issue was final as between ePlus and Lawson.  The Federal Circuit had affirmed the judgment of the district court on this issue.  

Second, the injunction was in effect.  The remand instructions were different from Fresenius where the court had instructed the district court to “revise or reconsider” the injunction, which was vacated.  In this case, the Federal Circuit did not vacate the injunction, but had merely instructed the district court to “consider” necessary changes to the injunction.  Those changes were made by the district court and are now the subject of the present appeal.  Finally, when challenging a contempt ruling, the challenger cannot challenge the underlying reasons for the injunction; it can only challenge whether it actually violated the injunction.

Next, Judge O’Malley reiterates her view that Fresenius was wrongly decided.  What incentive do district courts have to decide patent cases?  They should simply wait until all matters related to such cases are decided by the PTO.  In this case, as in Fresenius, the district court and Federal CIrcuit’s earlier work (not to mention the jury) seems to have been largely wasted time.

Judge O’Malley further argues that parties have begun reading Fresenius rather broadly and are seeking to reopen what would seem to be final judgments in litigation if the PTO makes a later ruling favorable to infringers.  She seems to be trying to garner support for Supreme Court review by arguing that the Federal Circuit’s view of finality is contrary to the view of the DC Circuit.

Protecting Inventions Outside the US

July 24, 2014

A patent permits its owner to exclude others from making, using, selling, offering for sale, or importing the patented invention without his permission.  A patent is, however, unique to the country where it is granted.  Thus, if a patent owner does business in more than one country, it would be necessary to obtain a patent in each country to protect the invention.

Some countries have restrictions on what can be patented.  For example, some countries do not permit patenting software, business methods, drugs, or methods of treatment for humans.

PCT Applications

One way to obtain patent protection in multiple countries is to file an application under the Patent Cooperation Treaty (PCT).  A PCT application is an international application that is filed through the World Intellectual Property Office (WIPO), where an applicant can designate a large number of countries in which he desires to file his patent application.  Currently, 148 countries are members of the PCT.

A PCT application does not give the applicant an “international patent”, as all patents are national in nature (although certain organizations like the European Patent Office (EPO) issue a “European Patent” that must be registered in each member country where the applicant desires the patent to be in effect).  Instead, the PCT provides a mechanism that gives the applicant 30 or 31 months from the earliest filing date (the first filed patent application) to determine whether to file the patent application in various individual countries.  A PCT application can either be the first filed application for an invention or it must be filed within 12 months of the first filed application.

The PCT also provides an International Search Report and an examination, if desired, so that the applicant can get an early search performed to see if the invention is patentable.  The delay also permits the applicant to determine whether the invention is commercially valuable and whether it is worth spending the money to obtain a patent in each country.  While applicants may designate all 148 countries at the time of the PCT filing, they can decide later in which individual countries they would like to pursue patent protection.

A PCT application can also save money on translation costs early in the process.  While most individual countries require patent applications to be filed in the native language of that country, PCT applications permit applicants to delay the cost of translating the application into the various languages.

Once the 30 or 31 month period from the first filing date elapses, a PCT applicant must “enter the national stage” in each country where a patent is desired.  Otherwise, the application is abandoned and patent protection cannot be obtained.  It is at this stage where translations must be obtained and filing costs for the various countries must be paid.

Each country usually requires that the applicant work through an attorney or patent agent who is registered to practice before that country’s patent office.  Thus, to obtain a patent in Brazil, the applicant must work with a Brazilian patent attorney or agent.  These attorneys and agents charge fees for their services, further adding to the costs of obtaining patent protection in various countries.

If the PCT procedure is not utilized, applicants must file in each individual country within a year of the filing date of the first filed application.  The translation, filing, and agent costs are due at that time.  A primary advantage of the PCT is the 18 to 19 month delay for these costs.

While 148 countries are currently members of the PCT, there are several significant countries that are not members; these include Argentina, Paraguay, Uruguay, Venezuela, Taiwan, and the Middle East.  To obtain patents in these countries, a patent application must be filed in each within 12 months of the first filed application.

Patent Prosecution Highway

The United States PTO has entered into an agreement with a number of other patent offices called the Patent Prosecution Highway.  Under this program, once a patent claim is found to be allowable by the patent office where the application was first filed, the applicant may request that other patent offices fast track examination of the application.  This is a type of work-sharing program intended to cut reduce redundancy in examination.