JEFF KUESTERIntellectual Property AttorneyTaylor English Duma LLP

And

BRETT BARTELIntellectual Property Attorney

2010 Patent Law Updates6th Annual SPRINGPOSIUM® 

IP CLE Conference

Background

• Seaway's patents-in-suit claim designs for casual, lightweight footwear, which are typically referred to as “clogs.”

Background

• Seaway's patents-in-suit claim designs for casual, lightweight footwear, which are typically referred to as “clogs.”

Design Patent Infringement v. Anticipation - Egyptian Goddess Case:

Design Patent Infringement v. Anticipation - Egyptian Goddess Case:

“That which infringes, if later, would anticipate, if earlier.” Peters v. Active Mfg. Co., 129 U.S. 530, 537 (U.S. 1889)

The points-of-novelty test, for infringement, was eliminated by the Federal Circuit in the en banc Egyptian Goddess case and replaced with the ordinary observer test.

“The same test must be used for both infringement and anticipation.” 589 F.3d 1233, 1239 (Fed. Cir. 2009)

Design Patent Invalidity (International Seaway Trading Corp. v.

Walgreens)

BackgroundBackground Value of Design PatentsValue of Design Patents

The International Trade Commission (ITC) was investigating knock-off imports of Crocs foam shoes to determine whether they were infringing Crocs’ utility or design patents.

After the investigation the ITC found that the utility patent was invalid there was no design patent infringement.

The Federal Circuit reversed the ITC’s findings of patent invalidity and noninfringment of the design patent.

Design Patent Invalidity Cont.Crocs, Inc. v. US International Trade Commission

BackgroundBackground Functional Elements in a Design PatentFunctional Elements in a Design Patent

Richardson owns a design patent for a design of a multi-function carpentry tool 

Richardson sued Stanley for design patent infringement

The district court entered a judgment non-infringement.

Federal Circuit reiterated that “a design patent … limits protection to the ornamental design of the article. If the patented design is primarily functional rather than ornamental, the patent is invalid.”

“The ordinary observer test similarly applies in cases where the patented design incorporates numerous functional elements.”

Design Patent Invalidity Cont. Richardson v. Stanley Works, Inc.

Background Background District CourtDistrict Court

The patents-in-suit were directed to a method for entering information into fields on a computer screen without using the keyboard.

The primary infringing portion of Microsoft's software appears to be the "date picker" function found in Outlook calendars.

Evidence showed that Microsoft sold 110 million units of Outlook.

The dollar value of those sales was approximately $8 billion. Lucent asked the jury for $561.9 million in damages, based on an 8% royalty rate,

The jury awarded approximately $357.9 million.

The Federal Circuit vacated and remanded.

Damages: Lucent v. Gateway, Microsoft

Different ApproachesDifferent Approaches Georgia Pacific FactorsGeorgia Pacific Factors

The "Hypothetical Negotiation A damage award must at

least be an amount of a “reasonable royalty” as required by the Patent Act.

The Entire Market Value Rule When a patentee proves

that the patent-related feature is the predominant basis for customer demand, courts allow damages to be based upon the “entire market value” of the product

Damages: (Cont.)Lucent v. Gateway, Microsoft

Before MedImmuneBefore MedImmune After MedImmuneAfter MedImmune

A declaratory judgment was allowed if there’s (1) an explicit THREAT

that creates a reasonable apprehension on the part of the declaratory plaintiff that it will face an infringement suit, and

(2) present ACTIVITY which could constitute infringement or concrete steps taken with the intent to conduct such activity.

A declaratory judgment is allowed after considering “all the circumstances” rather than any bright line rule. 

Declaratory Judgment in Patent Cases Post-MedImmune: Hewlett-Packard Co. v. Acceleron, LLC

The Facts Declaratory Judgment StandardDeclaratory Judgment Standard

Acceleron, a patent holding company, wrote a letter to HP calling their attention to Acceleron’s patent related to blade servers.

The letter said that Acceleron wished to DISCUSS the patent with HP in a “PRODUCTIVE ATMOSPHERE” and wished that these discussions not be used for “any litigation whatsoever.”

HP said that they would enter negotiations and would not file a declaratory judgment if Acceleron agreed not to file suit for 120 days.

Acceleron did not comply.

On Appeal, Acceleron argued that it never asserted its rights under the patent.

The Federal Circuit stated that a court has subject matter jurisdiction under the Declaratory Judgment Act ONLY if the facts alleged, under all

the circumstances, show that there is a substantial controversy,

between parties having adverse legal interests,

of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.

Declaratory Judgment in Patent Cases Post-MedImmune: Cont.

Hewlett-Packard Co. v. Acceleron, LLC

Declaratory Judgment in Patent Cases Post-MedImmune: Cont.

Hewlett-Packard Co. v. Acceleron, LLC

Cont.

A communication from a patent owner to another party, merely identifying its patent and the other party's product line, without more, cannot establish adverse legal interests between the parties.

More is required to establish declaratory judgment jurisdiction.

The Courts should look to the specific facts of the case and that a patentee cannot simply avoid a case or controversy by carefully avoiding “magic” words such as “litigation” and “infringement.”

It’s an objective test. “Indeed, it is the objective words and actions of the patentee that are controlling.”

Here Acceleron identified themselves as the

owner of a patent that was relevant to one of HP’s products

In 2 letters requested that HP not sue and gave a two week deadline for HP to respond

failed to accept the terms of HP's 120-day standstill proposal

BackgroundBackground Federal CircuitFederal Circuit

This patent involved a method of reducing NF-κB (a transcription factor) activity.

The Written Description requirement is intended to ensure that the inventors “disclose the technologic knowledge upon which the patent is based and demonstrate that the patentee was in possession of the invention that is claimed.” 560 F.3d 1366, 1371 (Fed. Cir. 2009)

The Federal Circuit found that the specification did not support such broad claims.

The broad claim was the

single step of reducing NF-KB.

However, the specification of the '516 patent failed to adequately disclose how the claimed reduction of NF-KB activity is achieved.

Written Description Ariad v. Lilly

En BancEn Banc

The Federal Circuit en banc affirmed that 35 U.S.C. 112 contains a distinct Written Description Requirement in addition to Enablement.

The court also confirmed the view that Originally Filed Claims can violate the Written Description Requirement.

“The written description doctrine [gives] the incentive to actual invention and not attempt[s] to preempt the future before it has arrived.” Fiers v. Revel, 984 F.2d 1164, 1171 (Fed. Cir. 1993)

Written Description Cont. Ariad v. Lilly

BackgroundBackground Heightened Pleading StandardHeightened Pleading Standard

Exergen, sued Walmart, for infringement of three patents. SAAT sought to amend its answer to add an inequitable conduct defense

Heightened Procedural Requirements This case does not change the

Substantive Inequitable Conduct law.

It only reiterates the Procedural Requirements for Pleading inequitable conduct.

“Under Fed. R. Civ. Pro 9(b) the pleading must identify specifically the who, what, when, where, and how the material

misrepresentation or omission committed before the PTO.”

Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1328-1329 (Fed. Cir. 2009)

Heightened Pleading for Inequitable Conduct: Exergen v. Walmart

BackgroundBackground Inducing Infringement Inducing Infringement

Pentalpha sells deep fryers

In developing its deep fryer, Pentalpha purchased an SEB deep fryer in Hong Kong and copied its “cool touch” features.

Pentalpha obtained a “right-to-use study” from an attorney

The attorney analyzed 26 patents and concluded that none of the claims in those patents read on Pentalpha's deep fryer.

Pentalpha, however, did not tell the attorney that it had copied an SEB deep fryer.

Under 35 U.S.C. 271(b) [w]hoever actively induces infringement of a patent shall be liable as an infringer.

The Federal Circuit's 2006 en banc decision in DSU Medical expanded actual knowledge to “known or should have known.”

The record showed that Pentalpha hired an attorney to conduct a right-to-use study, but did not tell him that it had based its product on SEB's product.

A failure to inform counsel of copying would be highly suggestive of deliberate indifference in most circumstances.

Inducing Infringement SEB (T-Fal) v. Montgomery Ward & Co.

“Deliberate indifference” v. “Should-have-known”“Deliberate indifference” v. “Should-have-known” On a side noteOn a side note

• “Deliberate indifference” is not necessarily a “should-have-known” standard.

• The latter implies a solely objective test

• “The standard of deliberate indifference of a known risk is not different from actual knowledge, but is a form of actual knowledge.”

Federal Circuit Jurisprudence

This case is another example of the Federal Circuit using non-patent and non-Federal Circuit cases in interpreting patent law. United States v. Carani (7th Cir.

2007) Farmer v. Brennan (1980) Woodman v. WWOR-TV, Inc. (2d

Cir. 2005)

Inducing Infringement Cont.SEB (T-Fal) v. Montgomery Ward & Co.

BackgroundBackground False MarkingFalse Marking

Forest Group initially sued Bon Tool for infringement of their patent and the case was dismissed.

Interestingly, after the claims construction, Forest Group’s stilts were not covered by their own patent.

The patent claims required "a resiliently lined yoke" and Forest Group’s stilts did not have that element.

Under 35 U.S.C. 292, a person violates the law on false marking when they mark a product as patented that is not patented, or mark a product as patented without the patentee’s consent with the intent to deceive the public into believing that the product is made by or with the consent of the patentee.

False Marketing (Forest Group v. Bon Tool)

Per ArticlePer Article What to have your clients doWhat to have your clients do

Federal Circuit clarified that the (up to $500) award is per article. (Half to be split with the government.)

This decision is expected to increase the number of false marking lawsuits since the damages awards could be substantial.

Review of market products. Patent numbers that are expired,

invalidated, or otherwise declared unenforceable should have the markings removed.

Make sure that all the listed patent numbers have at least one claim that covers the marked product.

A system or process should be developed to periodically review patent markings to ensure they remain correct.

Patent licenses and settlement agreements must be carefully considered whether and when licensees should mark.

False Marketing Cont.(Forest Group v. Bon Tool)

BackgroundBackground Federal Circuit Writ of Mandamus

Federal Circuit Writ of Mandamus

Novartis brought a patent infringement suit against Hoffmann-LaRoche in the Eastern District of Texas.

Hoffmann-La Roche Inc. petitioned the Federal Circuit to transfer the suit to the Eastern District of North Carolina.

There were no witnesses or any source of proof 100 miles within the Eastern District of Texas. And the bulk of the evidence, documents, and witnesses were in North Carolina

The Federal Circuit found that the accused drug was developed and tested within the Eastern District of North Carolina North Carolina's local interest in

this case remains strong There are at least four non-party

witnesses residing in NC. And a ESNC had a less congested

docket. “Where a number of private

interest factors weigh heavily in one direction, that venue has a slightly greater local interest.”

Transfer of Venue (In re Hoffmann-La Roche Inc.)

BackgroundBackground InjunctionInjunction

I4i Ltd. are owners of a patent on editing custom XML, a computer language.

The jury found willful infringement and awarded $200 million in damages.

The district court also granted an injunction.

Users who purchases Microsoft Word before the effective date of the injunction were still allowed to use the editing custom XML features of Word and they could receive technical support

After the effective date, those patented features must be removed from Word and tech support may not be given to new users.

i4i Ltd. P’ship v. Microsoft CorpInjunction on Microsoft Word

BackgroundBackground Judge Sweet (SDNY)Judge Sweet (SDNY)

Myriad Genetics owned patents related to the BRCA1/2 genes.

These genes that have a known mutation with a high frequency of breast cancer.

AMP argued that genes are found in nature and therefore unpatentable.

“The patents at issue directed to ‘isolated DNA’ containing sequences found in nature are unsustainable as a matter of law and are deemed unpatentable subject matter under 35 USC 101.”

Gene Patents (Association for Molecular Pathology and ACLU v. USPTO and

Myriad)

Future of Gene PatentsFuture of Gene Patents Previous LawPrevious Law

Most commentators opine that this will be overruled by the Federal Circuit

Judge Sweet’s opinion is not in harmony with previous Federal Circuit law

In re Bergy Held that items isolated

from nature are not natural and therefore patent eligible subject matter.

Diamond v. Chakrabarty Held that living organisms,

made or altered my man, are patentable.

Gene Patents Cont.(Association for Molecular Pathology and ACLU v. USPTO and

Myriad)