Patent Law

I. History and Architecture of the Patent System[edit | edit source]

A. History[edit | edit source]

1. Italian Renaissance

• Republic of Florence and Filippo Brunelleschi
• Private guild rules
• Venetian patent statute of 1474
  • Quid pro quo
  • Utility
  • Operability
  • Reduced to practice
  • Novelty
  • Non-obviousness
  • Infringement == same or similar
  • Temporal limit on exclusive right
  • Damages
  • Destruction of infringing device

2. English patent policy and the Statute of Monopolies

• Abusive use of patents
  • Patents on vinegar, starch, playing cards
  • Queen Elizabeth I and King James I
• Statute of Monopolies
  • Parliament passed in 1624
  • Exception provided for “any manner of new manufacture”
  • Development of the “specification” – “consideration” for the patent grant

3. The American experience

• Several colonies granted patents
• Articles of Confederation left the power to issue patents to the states
• Constitutional Convention
  • James Madison and Charles Pickney
  • Passed the “IP Clause” with little recorded discussion or dispute
• Patent Act of 1790
  • Signed into law by Washington
  • Examination of applications, not a registration system
  • Commissioners for the Promotion of Useful Arts
    • Sec. of State, Jefferson
    • Sec. of War, Henry Knox
    • Atty. General, Edmund Randolph
  • First US Patent – “Making potash and pearl ash by a new apparatus and process”
• Patent Act of 1793
  • Registration system
  • Introduced public-use and on-sale bars
  • Defined statutory subject matter categories
  • Resulted in fraudulent and duplicative patents
  • “Patent thicket”
• Patent Act of 1836
  • First modern patent statute
  • Created the Patent Office
  • Created position of Commissioner of Patents
  • Reinstituted examination process
  • Created the present-day numbering system
  • Codified practice of using patent claims
  • Last act to require disclosure of models
• Patent Act of 1870
  • Emphasized importance of patent claims
  • Public notice function
    • Used to determine infringement by comparing the claim with the accsed product or method
    • Used to determine validity by comparing claim with prior art
• Supreme Court treatment of patents
  • Treated favorably from 1890 to 1930
  • Monopolistic and social cost aspects emphasized from 1930 to 1950
  • Doctrinal decisions
    • Expanded patent misuse doctrine
    • Eliminated ability to draft claims to products by describing their function
    • Created a “flash of genius” test for invention
    • Cast doubt on ability to patent “combination” inventions by requiring display of synergy
• Patent Act of 1952
  • Overturned expanded patent misuse doctrine
  • Overturned elimination of ability to draft claims to products by describing their function
  • Overturned “flash of genius” and synergy tests by focusing instead on non-obviousness
  • One of the primary drafters was Giles S. Rich, later a Circuit Judge of the Federal Circuit
• Regional court treatment of patents
  • Widely diverging treatment of patents between 1950 and 1982
  • Resulted in forum shopping
• Creation of the US Court of Appeals for the Federal Circuit in 1982
  • To unify patent law, eliminate forum shopping, and stimulate the economy
  • Located in DC
  • Hears appeals from rejections of patent applications by USPTO
  • Hears appeals from judgments in patent cases filed in district courts, the Court of Federal Claims, and the International Trade Commission
• Leahy-Smith America Invents Act (AIA)
  • Passed in 2011, but various effective dates of changes
  • Most significant changes to US patent law since 1952
  • Converts US from first-to-invent to first-to-file system

B. Economics[edit | edit source]

Information is a public good

• Non-rivalrous consumption – use by one person does not reduce the amount available for consumption by others
• Non-excludability – once disclosed, use by anyone is difficult to prevent except through special legal institutions, but disclosure is often necessary to use the information
• Free-rider problem
  • Intangible information is easy go copy
  • Difficult for discoverer to obtain return on investment
  • Result that information will be under-produced or not produced
• Solutions
  • Government subsidies
  • Government provision of services using tax revenue
  • Government enforced private property rights
• Costs of patent system
  • Temporary higher prices
  • Temporary reduced output
  • Temporary reduced access
• Benefits of patent law
  • Increased invention – may allow inventors to recoup costs of research and development through supra-competitive prices
  • Increased disclosure
    • To obtain private property right, the applicant must comply with disclosure requirements
    • Allows competitors to improve upon inventions
    • Positive result when compared to trade secret protection
  • Increased innovation
    • Increases likelihood of use of inventions in commercialized products
    • Serves as signaling tool to cause exclusive right to end up in hands of most efficient market actor
• Continued debate over actuality of benefits and cost-benefit analysis
  • Reputational, monetary incentives to invent, disclose, and innovate
  • Wasteful, winner-takes-all patent races
  • Excessive rent-seeking
  • Whether disclosure requirements adequate
  • No requirement to commercialize inventions
  • “Although there are powerful economic reasons in favor of creating property rights in inventions, there are also considerable social costs and whether the benefits exceed the costs is impossible to answer with confidence on the basis of present knowledge.” – William M. Landes & Richard A. Posner, The Economic Structure of Intellectual Property Law (2003) at 310.

C. Patent Document[edit | edit source]

Example of a patent – Hall’s Pizza Box

• Cover page
• Figures
• Background
• Summary of invention
• Description of the figures
• Detailed description
• Claims
• Appendix

Claim drafting – most difficult task

• Describes an invention using words
• Captures the novel and non-obvious features
• Avoid the prior art
• Include definite (clear) language

D. Process for Obtaining Rights[edit | edit source]

Applications

• Provisional applications (reserve the filing date)
• Non-provisional applications (within one year of provisional)
• Specification – written description
• Claims – metes and bounds of legal right, used to compare to prior art and to accused product or process
• Examination of applications
  • Subject matter requirement
  • Utility requirement
  • Disclosure requirements
  • “Prior art” searches
    • Novelty
    • Non-obviousness
  • Office Actions
    • First office actions typically issue within two to three years of filing
    • Allow, reject, or object to claims on individual basis
  • Responses
    • Also called amendments, but may or may not amend the claims
    • Concedes points or makes arguments if disagreement
  • Final Office Actions
    • At least one claim is still not in condition for allowance
    • Applicant’s options:
      • Abandon
      • File request for continued examination (RCE)
      • File continuation application
      • File continuation-in-part application
      • Appeal
  • Notice of allowance – no pending rejections or objections
  • Issuance – to inventors, except in limited circumstances
• Quality is a real concern
  • Time constraints placed on examiners
  • Limited resources and information available to examiners
  • High-volume patent strategies by applicants
  • Persistence by applicants
  • Difficulty applying patentability requirements
  • Volume of patent applications
    • Steep increase since 2000
    • Large volume of applications
    • Potential reasons:
      • Increasing understanding of value of patents and particularly high volume patent portfolio
      • Difficulty gauging commercial potential early in the process
      • Strengthening of patent rights by Federal Circuit
      • Congressional schemes incentivizing patent filings
      • Tool to attract venture capital funding
      • Use as a signaling tool
      • Increase in research productivity
      • Block competitors and enhance bargaining power
  • Cost of obtaining patent rights
    • Increasing steadily
    • In 2014, median attorney’s fees for preparing a utility patent were $7k to $10,250
    • Cost for prosecuting a filed application to issuance can easily add anywhere from $3k for a simple first office action allowance to $30k for two responses, an RCE, two more responses, and an in-office appeal
• Patent attorneys versus patent agents
  • Agents must pass the patent bar exam, which requires certain educational requirements
  • Attorneys do not need to pass the patent bar exam to litigate, but it does make it easier

II. Eligible Subject Matter[edit | edit source]

35 USC § 101: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”

Five statutory categories, with the understanding that “anything under the sun made by man”:

1. Process
2. Machine
3. Manufacture
4. Composition of matter
5. Any new and useful improvement thereof

Three judicially created exceptions:

1. Laws of nature (Mayo) – requires inventive concept
2. Physical phenomena (Myriad) – requires “act of invention”
3. Abstract ideas (Alice)

Diamond v. Chakrabarty

S.Ct. 1980, p. 162

RULE: While natural laws, physical phenomena, abstract ideas, or newly discovered minerals are not patentable, a live artificially-engineered microorganism is. Test asked whether the claimed invention was “made by man” in the sense of having “markedly different characteristics” as compared by nature.

Mayo Collaborative Services v. Prometheus Laboratories, Inc.

S.Ct. 2012, p. 172

RULE: You cannot patent laws of nature or pure applications of laws of nature – there must be sufficient additions/transformations beyond a restatement of the laws. Test asks whether the claimed invention includes an “inventive concept.” Very unpopular opinion, conflates eligibility with novelty and non-obviousness.

Association for Molecular Pathology v. Myriad Genetics, Inc.

S.Ct. 2013, p. 186

RULE: Test asks whether the claimed invention includes an “act of invention” in what is not naturally occurring.

Bilski v. Kappos

S.Ct. 2010

RULE: “Machine or transformation” test is not exclusive test for determining eligibility, but a useful and important clue. Implicit rejection of old Fed. Cir. “useful, concrete, and tangible result” test.

Alice Corp. Pty. v. CLS Bank Int’l

S.Ct. 2014, p. 213

RULE: Two-step analysis: (1) Is the claim directed towards an abstract concept? (2) Is there an inventive concept therein (an element sufficient to ensure that the patent in practice amounts to significantly more than a patent on the concept itself)? Has resulted in only a handful of cases finding no invalidity, lots of claims invalidated.

III. Utility[edit | edit source]

35 U.S.C. § 101: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”

In re Schwartz

Fed. Cir. 2000, p. 233

RULE: Initial burden is on USPTO to prove applicant has not met requirements. Applicant must then disprove their conclusion.

Operability – claimed invention must be “operable.” Must work, do what the claim says, though doesn’t have to work perfectly or better than prior art did.

Non-deception – “one as may be applied to some beneficial use in society.” Not modern law after Juicy Whip.

Brenner v. Manson

S.Ct. 1996, p. 236

RULE: Operability and a substantial and specific utility are required. “Substantial” means having a real world use, significant and presently available benefit to the public – may prove useful at some future date after future research. “Specific” means not so vague as to be useless, well defined and particular benefit, and benefit specific to the subject matter to be claimed.

Note on design patents: protect new, original, and ornamental features. Only one claim: “Ornamental design for a _____ as in figure X.” Infringement test: ordinary user test in light of differences between patented design and prior art. Same test for validity.

IV. Claiming and Disclosing the Invention[edit | edit source]

35 USC § 112(b): “The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.”

A. Claim Interpretation[edit | edit source]

Phillips v. AWH Corp.

Fed. Cir. 2005, p. 63

RULE: Intrinsic evidence includes the claim itself, the other claims (presumption of consistent use, claim differentiation), specification (“always highly relevant,” “usually, it is dispositive,” “single best guide to the meaning of a disputed term,” lexicography, disclaimers or disavowals), and the prosecution history (“because represents ongoing negotiation, it often lacks the clarity of the specification and is less useful”). Extrinsic evidence includes dictionaries and treatises, expert testimony, and inventor testimony. It’s considered less reliable than intrinsic evidence and is “unlikely to result in a reliable interpretation unless considered in context of intrinsic evidence.”

Interpreting the claim in the light of the spec == good.

Importing limitations from spec to claim == bad.

Canons of construction:

• Claims should be construed to sustain validity, though Phillips limited this to situations where claims remain ambiguous after using all available tools
• Notice function is best served by adopting narrower meaning of claims

Unique Concepts, Inc. v. Brown

Fed. Cir. 1991, p. 79

RULE: “All elements rule” – to prove infringement, every element in the claim must be found in the accused device either literally or equivalently.

Import-export rule: it is improper to import/read in a limitation from the written description and improper to eliminate or ignore (export) a limitation in order to extend a patent to subject matter disclosed but not claimed.

Role of patented device and accused device:

• Claims aren’t to be construed by reference to the patented device; claims define the patent right, not the commercial product of the patentee
• Claims are not to be construed by reference to accused device, but courts are permitted to have knowledge of the accused device to provide context for claim construction.

Claim differentiation doctrine – limitations in a dependent claim cannot be read into the language of the independent claim; independent claim must be broader than dependent.

35 USC § 112: “(a) The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor or joint inventor of carrying out the invention. (b) The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention.”

B. Enablement[edit | edit source]

Purpose: information dissemination and constraining claim scope to ensure patent right does not exceed the scope of the disclosure

Test: whether the specification enables a person having ordinary skill in the art to make and use the claimed invention without undue experimentation.

O’Reilly v. Morse

S.Ct. 1854, p. 92

RULE: Spec must enable one of skill in the art to make and use the claimed invention without undue experimentation.

Consolidated Electric Light Co. v. McKeesport Light Co.

S.Ct. 1895, p. 96

RULE: “If the description be so vague and uncertain that no one can tell, except by independent experiments, how to construct the patented device, the patent is void.”

Commensurability – optimize claim scope by limiting to disclosure.

Genus-species claims: genus sometimes allowed, but more species disclosed the better.

Cedarapids, Inc. v. Nordberg, Inc.

Fed. Cir. 1997, p. 114

RULE: In mechanical as opposed to chemical arts, a broad claim can be enabled by disclosure of a single embodiment. All that is required is that the amount of experimentation must not be unduly extensive.

Automotive Tech. Int’l, Inc. v. BMW of North Am., Inc.

Fed. Cir. 2007, p. 116

RULE: Specification must enable the full scope of the invention, especially the novel aspect. Spec does not have to disclose what is well known in the art. Enablement is measured at the time of filing.

Undue experimentation factors:

• Quantity of experimentation necessary
• Amount of discretion or guidance presented
• Presence or absence of working examples
• Nature of the invention
• State of the prior art
• Relative skill of those in the art
• Predictability or lack thereof in field
• Breadth of claims

C. Written Description[edit | edit source]

35 USC § 112(a): “The specification shall contain a written description of the invention . . .”

Ariad Pharma., Inc. v. Eli Lilly & Co.

Fed. Cir. 2010, p. 127

RULE: Test is whether the specification clearly allows persons of ordinary skill in the art to recognize that the inventor invented what is claimed. Test is “possession as shown in the disclosure.”

New Matter – corollary to written description, new matter is prohibited. Matter that does not find support in original spec. CIP applications are proper instead.

Gentry Gallery, Inc. v. Berkline Corp.

Fed. Cir. 1998, p. 139

RULE: You are limited to what you include in the disclosure as what you possess.

D. Best Mode[edit | edit source]

35 USC § 112(a): “The specification . . . shall set forth the best mode contemplated by the inventor of carrying out his invention.”

• Not enforceable in litigation under AIA, but still determined by patent office
• Subjective element: is inventor aware of a best mode?
• Objective element: if so, from the perspective of an objective third party person having ordinary skill in the art, is it disclosed in the patent spec?

E. Definiteness[edit | edit source]

35 USC § 112(b): “The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.”

Nautilus, Inc. v. Biosig Instruments, Inc.

S.Ct. 2014, p. 144

RULE: Test: “reasonable certainty” as to the scope of the claim from the perspective of people of ordinary skill in the art at the time of filing. Spec and prosecution history are relevant.

Means-plus-function limitations: when directed to software, the limitations are indefinite when the spec has not included sufficient “corresponding structure” in the form of an algorithm for performing a function recited in the limitation.

V. Novelty[edit | edit source]

A. 35 USC § 102(a)[edit | edit source]

§ 102(a) – “A person shall be entitled to a patent unless . . . the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country before the invention thereof by the applicant for patent.”

Two comparisons:

1. Content of prior art versus the claim at issue
2. Effective date of prior art versus date of invention for particular claim

Atlas Powder Co. v. Ireco Inc.

Fed. Cir. 1999, p. 247

RULE: Anticipation requires each element of the claim at issue to be present expressly or inherently in a single prior art reference.

Anticipation: each element of the claim at issue must be disclosed expressly or inherently in a single prior art reference. The prior art must include an “enabling disclosure” so that one of skill in the art can make and use the invention based on the prior art. The elements of the claimed invention must be arranged in the prior art as in the claims, not just disclosed in the prior art.

Inherency: The element not expressly disclosed must necessarily be present or inevitably flow from the prior art reference or be the natural result of using the prior art. Just because the missing element is one of several ways a person of ordinary skill in the art could use a disclosed device, for example, is insufficient.

1. Knowledge or Use in US[edit | edit source]

Compare date of invention with date known or used by others in the US. Publicity requirement is met by public use without efforts to maintain secrecy.

Gayler v. Wilder

S.Ct. 1980, p. 256

RULE: Private use of an invention does not render a patent non-novel, the use must be public.

Rosaire v. Baroid Sales Div.

5th Cir. 1955, p. 258

RULE: Public use doesn’t have to be informing, just without attempts at secrecy.

2. Patented Anywhere[edit | edit source]

35 USC § 102(a): “. . . patented in this or a foreign country . . .”

Key question: did the prior patent issue before the invention date of the applicant?

Everything disclosed in the prior art patent qualifies, not just the claims.

3. Printed Publication Anywhere[edit | edit source]

Public accessibility is key. Factors:

• Distribution and indexing
• Length of time the display was exhibited
• Expertise of target audience
• Existence or lack of reasonable expectations that the material displayed would not be copied
• Ease with which the material could have been copied

In re Klopfenstein

Fed. Cir. 2004, p. 292

RULE: Physical printing or publication is not required. Key consideration is the public accessibility.

B. 35 USC § 102(e)[edit | edit source]

35 USC § 102(e): “. . . the invention was described in (1) an application for patent, published under § 122(b), by another filed in the US before the invention by the applicant for patent or (2) a patent granted on an application for patent by another filed in the US before the invention by the applicant for the patent . . . “

• Published US applications qualify as prior art as of their filing date (issuance date for 102(a))
• Issued US patents qualify as prior art as of their filing date, not publication or issue date.

Alexander Milburn Co. v. Davis-Bournonville Co.

S.Ct. 1926, p. 268

RULE: Issuance of a patent qualifies it as prior art as of its filing date, including all contents (not just claims).

C. 35 USC § 102(g)[edit | edit source]

35 USC § 102(g): “. . . before such person’s invention thereof, the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it.” “In determining priority of invention under this subsection, there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other.”

Thompson, SA v. Quixote Corp.

Fed. Cir. 1999, p. 273

RULE: Corroboration is required when the testifying inventor is asserting a claim of derivation or priority of invention and is a named party/employee of assignor to named party/otherwise in a position where they stand to substantially and directly gain by his or her invention being found to have priority. Kind of arbitrary, as alleged inventors are always self-interested.

35 USC § 102(g)(1): “. . . during the course of an interference . . . another inventor involved therein establishes, to the extent permitted in § 104, that before such person’s invention thereof the invention was made by such other inventor and not abandoned, suppressed, or concealed . . .”

• Applies only to interferences
• Inventive activity may be in US or NAFTA/WTO country
• Interferences not permitted under AIA

D. Hilmer Doctrine and Foreign Activity[edit | edit source]

Paris Convention allows patent applicants to obtain the benefit of their foreign filing dates when their applications are first filed in member countries. This means that applicants can use their earlier foreign filing date to eliminate prior art. Foreign priority dates cannot be used by USPTO or an accused infringer to show a patent or application qualifies as prior art. Exception: if the application designated the US and was published in English, it may be treated as a US patent.

In re Hilmer (Hilmer I and II)

CCPA 1966, p. 282/CCPA 1970, p. 288

RULE: Foreign filing dates may only be used defensively by applicant, not offensively by office or accused infringer.

Note that the AIA overturned both cases, so any applications filed after 3.16.13 do not follow the Himer doctrine and may be used offensively against an applicant.

VI. Priority[edit | edit source]

Determining an invention date: the invention date is the date of reduction to practice, but the first to conceive of the invention is entitled to prove an invention date at the beginning of his or her period of diligence that results in a reduction to practice.

Test for priority:

• Priority goes to the first party to reduce an invention to practice.
• Where a party is first to conceive but second to reduce, that party must demonstrate reasonable diligence towards reduction to practice from a date just prior to other party’s conception to their own reduction to practice.
• Abandonment, suppression, or concealment can eliminate right to priority.

Mahurkar v. CR Bard, Inc.

Fed. Cir. 1996, p. 306

RULE: Invention date is the date of conception and reduction to practice prior to the date of alleged prior art or date of conception plus diligence pre-dating prior art and constructive reduction to practice (filing application).

Conception – formation in the mind of a definite and permanent idea of the complete and operative invention, so clearly defined that only ordinary skill in the art would be necessary to reduce to practice without extensive research or experimentation. Corroboration required for inventor testimony, and evidence is only allowed if from US, NAFTA, or WTO country.

Reduction to practice:

• Constructive – filing patent application that meets § 112 requirements with respect to the claim at issue (enablement, best mode, etc.)
• Actual requires
  • Construction of an embodiment or performance of process that meets all claim elements
  • Demonstration that the invention is suitable for its intended purpose
  • Simple construction for simple inventions, or simulated working conditions for more complex inventions that require some testing.
  • Corroboration required for inventor testimony from US, NAFTA, or WTO countries.

Griffith v. Kanamaru

Fed. Cir. 1987, p. 314

RULE: Must be reasonable diligence towards reduction to practice.

Diligence – pursuing the goal in a reasonable manner. Reasonable, everyday limitations and problems are excusable, but delays due to commercialization or pursuing other inventions are not.

Fujikawa v. Wattanasin

Fed. Cir. 1996, p. 318

RULE: Abandonment, concealment, or suppression can only occur after reduction, and may be ok as long as inventive activities are resumed prior to other party’s conception.

Abandonment, concealment, or suppression

1. Intentional – requires evidence inventor intentionally delayed filing in order to prolong period of secrecy
2. Inferential – arises when there is a relatively long and unexplained gap between an actual reduction to practice and a filing of a patent application

VII. Statutory Bars[edit | edit source]

35 USC § 102(b): “A person shall be entitled to a patent unless . . . the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States.”

Four categories:

1. Patented anywhere in the world
2. Printed publication anywhere in the world
3. In public use in the US
4. On sale in the US

More than one year prior to the effective date of application (not date of invention)

35 USC § 102(d): Applicant is barred from obtaining a patent if he or she filed and obtained a patent in a foreign jurisdiction and filed in the US more than one year after filing in the foreign jurisdiction.

A. On-Sale[edit | edit source]

A pardon is entitled to a patent unless the invention was on sale in the US more than a year to the application date.

Pfaff v. Wells Electronics

S.Ct. 1998, p. 427

RULE: Two-part test: (1) commercial sale or offer for sale of the invention and (2) invention must be ready for patenting (either actual reduction to practice or drawings or description sufficient to enable one of skill in the art to make the invention).

Space Systems/Loral, Inc. v. Lockheed Martin Corp.

Fed. Cir. 2001, p. 432

RULE: Conception alone is not enough to show that an invention is ready for patenting.

Plumtree Software, Inc. v. Datamize LLC

Fed. Cir. 2006, p. 437

RULE: Two ways to put a method on sale: offer to perform the claimed method or actual performance of the method coupled with a promise to pay. Focus is on the result of the method.

Assignments and licenses – assignments of patents are not sales or offers for sales, as it is a sale of patent rights, not the invention itself. Licenses also not a sale/offer for sale, as it’s just an agreement not to enforce rights of exclusion against licensee.

B. Public Use[edit | edit source]

35 USC § 102(b): “A person shall be entitled to a patent unless . . . the invention was . . . in public use . . . in this country, more than one year prior to application.”

Egbert v. Lippmann

S.Ct. 1882, p. 446

RULE: Public use without restriction or experimentation is sufficient to trigger bar.

Motionless Keyboard Co. v. Microsoft Corp.

Fed. Cir. 2007, p. 448

RULE: Demonstrations to potential investors and testing are not sufficient.

Public – unrestrained use by someone other than the inventor, use in public by the inventor outside of control and testing, does not require that the invention be seen by members of the public.

Use – actual use for intended purpose/use for commercial purposes including every element of the claim, one use is sufficient.

Private use, under the inventor’s control, not for commercial purposes does not trigger the bar, nor does secret third party use, even if commercial.

C. Experimental Use[edit | edit source]

Argument by inventor to negate allegations of on-sale or public use bars, as it allows the inventor time to test inventions and perfect them prior to application.

City of Elizabeth v. American Nicholson Pavement Co.

S.Ct. 1878, p. 472

RULE: Installation of wooden pavement with frequent checks on quality and performance did not trigger the public use bar.

Electromotive Division of General Motors Corp. v. Transportation Systems Division of General Electric Co.

Fed. Cir. 2005, p. 476

RULE: Inventor control and customer awareness of experimental nature must be proven, though every feature of the claim need not be tested.

Lisle Corp. v. A.J. Manufacturing Co.

Fed. Cir. 2005, p. 484

RULE: Customer awareness of experimental use may outweigh absence of confidentiality, restrictions on use, or records. Examiner or accused infringer must prove public use, then patent owner can rebut with experimental use defense. Standard is “clear and convincing.”

Relevant factors:

• Necessity for public testing
• Amount of control over the experiment retained by the inventor
• Nature of invention
• Length of the test period
• Whether payment was made
• Whether there was a secrecy obligation
• Whether records of the experimentation were kept
• Who conducted the experiment
• The degree of commercial exploitation during testing
• Whether the invention reasonably requires evaluation under actual conditions of use
• Whether testing was systematically performed
• Whether the inventor continually monitored the invention during testing
• The nature of the contacts made with potential customers

Most important two: control by inventor and knowledge of testing by customers.

Experimental use ends with actual reduction to practice or when the invention is ready for patenting (requires no further testing to confirm the invention will work).

D. Third-Party Activity[edit | edit source]

Third-party activities can also trigger bars. This is to prevent the inventor from taking an invention out of the public domain and encourages early filing. The law favors early filing, not a third party who doesn’t disclose to the public but engages in secret commercial use (inventor secret activity triggers bar, third party secret use does not).

Evans Cooling Systems, Inc. v. General Motors Corp.

Fed. Cir. 1997, p. 460

RULE: “Stolen invention” put on sale without inventor’s knowledge can still trigger the on-sale bar.

VIII. Non-Obviousness[edit | edit source]

Pre-AIA 35 USC § 103 – “(a) A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 , if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the invention was made.”

Post-AIA 35 USC § 103 – “A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.”

A. Foundation of § 103[edit | edit source]

Replaces “invention” requirement, which gave too much discretion to the courts. Makes non-obviousness a question of law based on subsidiary factual findings. Analysis is just before invention (old) or filing (AIA).

Hotchkiss v. Greenwood

S.Ct. 1851, p. 331RULE: Changing material of an invention to a more effective one is not sufficient.

Old tests:

• “Flash of genius” – not good, makes no sense
• “Synergism” requirement – repetition of novelty, really. Combining things in the prior art must work together in a new way to create synergism
• Lots of strict/amorphous language led to enactment in 1952 of § 103.

B. Graham Test and Secondary Considerations[edit | edit source]

Graham v. John Deere Co.

S.Ct. 1966, p. 336

RULE: Four step analysis:

1. Determine the scope and content of prior art
2. Ascertain differences between prior art and claims at issue
3. Resolve the level of ordinary skill in the art
4. Determine obviousness or nonobviousness of claimed invention from perspective of a person of ordinary skill in the art at the time of invention, considering the above and secondary considerations.

United States v. Adams

S.Ct. 1966, p. 342

RULE: Factors favoring non-obviousness include unexpected advantages, proceeding contrary to accepted wisdom, disbelief expressed by experts, later recognition of significance, and inability to find prior art in crowded technology area

Non-obviousness permits combination of prior art and is a question of law based on factual inquiries. Patent applicant or patentee can argue that the prior art teaches away from the invention.

Secondary considerations: (require a “nexus” to the inventive features)

• Commercial success – must be due to the technical merits of the claimed invention, not just due to first mover advantage, aggressive advertising, unclaimed feature, litigation-induced cost of defense settlement licenses.
• Long felt, but unsolved needs
• Failure of others
• Copying
• Licensing
• Respect by competitors/praise by those in the field
• Industry skepticism
• Unexpected results (particularly in pharma)

C. KSR[edit | edit source]

KSR International v. Teleflex, Inc.

S.Ct. 2007, p. 355

RULE: “Reason to combine” test – inquiry into a teaching, suggestion, or motivation to combine elements in prior art is a relevant factor to consider, though the reason itself doesn’t have to be shown in the prior art (can be implicit).

USPTO’s list of “exemplary rationales” to base on obviousness rejection on (MPEP 2141):

(A) Combining prior art elements according to known methods to yield predictable results;

(B) Simple substitution of one known element for another to obtain predictable results;

(C) Use of known technique to improve similar devices (methods, or products) in the same way;

(D) Applying a known technique to a known device (method, or product) ready for improvement to yield predictable results;

(E) “Obvious to try” – choosing from a finite number of identified, predictable solutions, with a reasonable expectation of success;

(F) Known work in one field of endeavor may prompt variations of it for use in either the same field or a different one based on design incentives or other market forces if the variations are predictable to one of ordinary skill in the art;

(G) Some teaching, suggestion, or motivation in the prior art that would have led one of ordinary skill to modify the prior art reference or to combine prior art reference teachings to arrive at the claimed invention.

“Obvious to try” – for a claimed invention to be obvious after KSR, the prior art must contain an enabling methodology for practicing the claimed invention, there must be a teaching, suggestion, or motivation to modify or combine the prior art to practice the claimed invention, and there must be evidence suggesting that a person of ordinary skill in the art would have a reasonable expectation of success.

Note that only analogous prior art may be used. This includes prior art in the same field of endeavor, regardless of the problem to be solved, or art reasonably pertinent to the particular problem with which the inventor is involved, if not in the same field.

D. Ordinary Skill in the Art[edit | edit source]

The higher the level of ordinary skill, the more difficult it is to satisfy the non-obviousness requirement/the easier to prove obviousness. Size of gap between ordinary skill and the invention is smaller with greater skill, lower with lesser skill. Patentee has the incentive to show that the inventors have much more than ordinary skill, as their skill is a factor in determining ordinary skill.

Factors:

• Educational level of inventor
• Type of problems encountered in the art
• Prior art solutions to those problems
• Rapidity with which innovations are made
• Sophistication of the technology
• Educational level of active workers in the field

IX. Enforcing Patent Rights[edit | edit source]

A. Claim Interpretation[edit | edit source]

“Markman” hearings – a hearing to receive argument and evidence regarding the proper meaning of claim terms.

Markman v. Westview Instruments, Inc.

S.Ct. 1996, p. 500

RULE: Courts have broad discretion to interpret claims and over format of hearings, including scheduling, input, and use thereof.

Teva Pharms. USA, Inc. v. Sandoz, Inc.

S.Ct. 2015, p. 503

RULE: When reviewing a district court’s resolution of subsidiary factual matters made in the course of its construction of a patent claim, the Federal Circuit must apply a “clear error,” not a de novo, standard of review.

Standards of review:

• Clear error review of underlying fact finding (resolution of disputes involving extrinsic evidence)
• De novo review of the ultimate construction (resolution of disputes involving intrinsic evidence and determinations of how fact finding impacts the ultimate construction)

“Comprising” – open ended, non-exclusive list of elements

“Consisting of” – closed, exclusive list of elements

“Consisting essentially of” – in between; excludes features that would materially affect the basic and novel characteristics of the claimed invention

B. Opinion Letters[edit | edit source]

Types:

• Patentability
• Freedom to operate
• Non-infringement
• Invalidity

Non-infringement opinions may be useful in litigation to prove lack of intent to infringe or knowledge of infringement:

• No indirect infringement
• No willful infringement

“Competency” is key – if the opinion is relied upon in litigation as a defense to a charge of willful infringement, ultimately the opinion was wrong. Use of the opinion waives attorney-client privilege and work product immunity on same subject (In re Echostar and In re Seagate are controlling Federal Circuit opinions on point). The AIA makes clear that the lack of an opinion (or failure to introduce one) may not be used to prove intent for indirect infringement or willful infringement

C. Geographic Scope[edit | edit source]

35 USC § 271(a): “Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the US, or imports into the US any patented invention during the term of the patent therefore, infringes the patent.”

35 USC § 154(a)(1): “Every patent shall contain a short title of the invention and a grant to the patentee, his heirs or assigns, of the right to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States, and, if the invention is a process, of the right to exclude others from using, offering for sale or selling throughout the United States, or importing into the United States, products made by that process, referring to the specification for the particulars thereof.”

Location of use of:

• System - place where the system as a whole is put into service (control and beneficial use)
• Method – place where each step of the method occurs
• Offer to sell system – place of future sale that would occur
• Offer to sell method – no such concept

1. Export Activity[edit | edit source]

35 USC § 271(f)(1): “Whoever without authority supplies or causes to be supplied in or from the US all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside the US in a manner that would infringe the patent if such combination occurred within the US, shall be liable as an infringer.”

35 USC § 271(f)(2): “Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial non-infringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending that such component will be combined outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.”

Microsoft Corp. v. AT&T Corp.

S.Ct. 2007, p. 650

RULE: Software installed on hardware qualifies as a “component,” and to be supplied, the hardware must be installed in a computer (it is insufficient to copy the software from the hardware) – this will never happen. Note that method claims cannot be infringed under § 271(f) (another reason to diversify claim types).

Update: Life Tech. Corp. v. Promega Corp. has said that one component may constitute a substantial portion of the components of a patent invention under 271(f)(1) if the one component is sufficiently important.

2. Import Activity[edit | edit source]

35 USC § 271(g): “Whoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, offer to sell, sale, or use of the product occurs during the term of such process patent. In an action for infringement of a process patent, no remedy may be granted for infringement on account of the noncommercial use or retail sale of a product unless there is no adequate remedy under this title for infringement on account of the importation or other use, offer to sell, or sale of that product. A product which is made by a patented process will, for purposes of this title, not be considered to be so made after— (1) it is materially changed by subsequent processes; or (2) it becomes a trivial and nonessential component of another product.”

Eli Lilly & Co. v. American Cyanamid Co.

Fed. Cir. 1996, p. 663

RULE: Material change refers to physical or chemical properties, not degree of difference in economic value.

Geographic scope: allows for finding of infringement of a patented method when a product is imported that was created outside the US using the patented method. Also covers US sales, offers for sale, and use of products created outside the US.

No direct infringement required, except when the product is materially changed or when it becomes a trivial and nonessential component of another product.

X. Infringement[edit | edit source]

Patent terms

• Enforceable from the date of issue to expiration
• For applications filed on or after June 8, 1995, 20 years from effective filing date, excluding provisional application filing dates
• For applications pending on and still in force on June 8, 1995, the longer of 17 years from issue or 20 years from filing

Infringement basics

Determined on a claim-by-claim basis

Two step basis:

• Construe the claim
• Compare correctly construed claim to alleged infringer’s commercial embodiment

Comparison of claim to alleged infringer’s commercial embodiment

• Not comparison of specification to alleged infringer’s commercial embodiment
• Not comparison of patentee’s commercial embodiment to alleged infringer’s commercial embodiment

Defenses

• Independent creation not a defense
• Ability to reverse engineer not a defense
• Lack of intent not a defense (strict liability), but indirect infringement requires a specific form of intent, and willful infringement allows for treble damages
• Lack of knowledge of a patent may be a defense in a limited respect.
  • For device claims, constructive notice through marking or actual notice is required
  • For process claims, no notice requirement

A. Direct Infringement[edit | edit source]

Product or service must meet each and every limitation of a patent’s claim – claim must describe what the alleged infringer is doing.

1. Literal Infringement[edit | edit source]

Each and every element of a claim found literally in accused device of method. If even one limitation is not present, there is not literal infringement (compare to anticipation). Additional feature does not automatically mean no infringement either, unless claim is written specifically to exclude additional features.

Larami Corp. v. Amron

E.D. Pa. 1993, p. 517

RULE: Absence of one element means there can be no literal infringement; if replaced by substantial equivalent then could be infringement by doctrine of equivalents.

2. Doctrine of Equivalents[edit | edit source]

Each and every element of a claim found either literally or equivalently in accused device or method.

Warner-Jenkinson Co., Inc. v. Hilton Davis Chem. Co.

S.Ct. 1997, p. 531

RULE: Doctrine of Equivalents is not superseded by patent act of 1952.

Graver Tank & Mfg. Co. v. Linde Air Prods. Co.

S.Ct. 1950, p. 526

RULE: Test is whether the infringed device performs (1) substantially the same function in (2) substantially the same way to (3) obtain substantially the same result.

Limitations:

• Prosecution history estoppel – if subject matter is surrendered during prosecution, there is a rebuttable presumption that patentee cannot recapture it through DoE. The reason for amendment is important, and the patent owner bears the burden of proving the amendment was not related to matters of patentability. Question of law for court to use to limit scope of DoE.
• Dedication to the public/disclosed but not claimed – disclosed by unclaimed subject matter cannot be captured under the doctrine of equivalents. Disclosed subject matter need not need the enablement requirement, but the subject matter must be identified as an alternative to a claim limitation.
• All limitations/vitiation – element by element analysis required, overall claim in its entirety cannot be eliminated (vitiated)
• Specific exclusion – if the claim expressly or implicitly excludes subject matter, the DoE cannot be used to capture that subject matter. Any such disclaimer must be clear as a matter of public notice.
• Prior art – DoE cannot be used to capture subject matter that could not have been patented in the first place. Hypothetical claim covering the alleged infringement must be patentable over prior art (not anticipated, not obvious, burden is on patentee). Dependent claims must be analyzed even if an independent claim does not infringe under DoE because it ensnares prior art.
• Not limited to equivalents known at time of application, but at time of alleged infringement.

Prosecution History Estoppel – stops patent owner from recapturing via DoE claim scope surrendered during prosecution.

• Argument-type
• Amendment-type

Festo Corp. v. Shoketsu Kinsoku Kogyo Kabushiki Co.

S.Ct. 2002, p. 548

RULE: If narrowing claim amendment is made for purposes of patentability (or patentee cannot prove another reason), then there is a presumption of surrender of all subject matter between original and amended claim.

Amendments for purposes of patentability:

• Made to fall within subject matter under § 101
• To respond to § 102 or § 103 rejections – claim language is changed
• Made to correct lack of written description or lack of enablement under § 112
• To correct ambiguity or vagueness under § 112 (includes spelling corrections)

Presumption of surrender can be rebutted three ways:

1. Equivalent was objectively unforeseeable at the time of the amendment
2. Rationale underlying amendment bears no more than tangential relation to equivalent
3. “Some other reason” patentee could not reasonably be expected to have described the equivalent

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Johnson & Johnston Assocs., Inc. v. RE Service Co., Inc.

Fed. Cir. 2002, p. 563

RULE: Disclosed but unclaimed subject matter cannot be captured through the doctrine of equivalents (public dedication rule).

SciMed Life Systems, Inc. v. Advanced Cardiovascular Systems, Inc.

Fed. Cir. 2001, p. 571

RULE: If the claim expressly or implicitly in light of the spec excludes subject matter, DoE cannot be used to capture that subject matter (specific-exclusion rule).

Wilson Sporting Goods Co. v. David Geoffrey & Assocs.

Fed. Cir 1990, p. 583

RULE: DoE cannot be used to capture subject matter that could not have been patented in the first place.

3. “Divided” or “Joint” Infringement[edit | edit source]

Typically, only one entity’s product or conduct meets each and every limitation of a patent’s claim. However (absent vicarious liability) there is sometimes no one entity whose conduct meets every limitation.

Akamai Techs., Inc. v. Limelight Networks, Inc.

Fed. Cir. 2015, p. 617

RULE: Direct infringement asks whether one entity is responsible for infringement. The acts of one may be attributable to another such that a single entity is responsible for infringement (1) where a first entity directs or controls a second entity; or (2) where the two entities form a joint enterprise.

Vicarious liability – direction and control, where one acts through an agent, contracts with another to perform one or more steps of the method, or conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance.

Joint enterprise requirements:

1. An agreement, express or implied, among the members o the group
2. A common purpose to be carried out by the group
3. A community of pecuniary interest in that purpose, among the members
4. An equal right to a voice in the direction of the enterprise, which gives an equal right of control

4. Reissue and Continuations[edit | edit source]

Broadening reissue - within the first two years after a patent issues, the patent owner can go back to the office and attempt to broaden claims without introducing new matter. Necessary only if no pending continuation.

Continuation – serially file continuation applications, continuously broadening or otherwise modifying claim language. May be used to overcome double-patenting rejections via terminal disclaimers. Unavailable if there is no pending application.

B. Indirect Infringement[edit | edit source]

Aiding and abetting infringement

1. Inducement of Infringement[edit | edit source]

35 USC § 271(b): “Whoever actively induces infringement of a patent shall be liable as an infringer.”

Global-Tech Appliances, Inc. v. SEB SA

S.Ct. 2011, p. 607

RULE: Not limited to the US, knowledge of patent and infringement both required, though may be actual or attributable (willful blindness).

Required to prove:

1. Direct infringement
2. Actions inducing infringing acts
3. Knowledge that the acts would induce infringement
4. Intent to cause infringement

Willful blindness – alleged inducer subjectively believes there is a high probability that patent/infringement exists and takes deliberate actions to avoid learning of patent/infringement.

2. Contributory Infringement[edit | edit source]

35 USC § 271(c): “Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial non-infringing use, shall be liable as a contributory infringer.”

Lucent Tech., Inc. v. Gateway, Inc.

Fed. Cir. 2009, p. 604

RULE: Contributory infringement is limited to sales, offers to sell, or importation in the US.

Required to prove:

1. Direct infringement
2. The defendant sold, offered to sell, or imported a component that is a material part of the patented invention
3. Defendant knew that the combination for which the component was especially made was patented and infringing
4. The component has no substantial non-infringing use, i.e. it is a non-staple good

C. Means-plus-function limitations[edit | edit source]

35 USC § 112 ¶ 6: “An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.”

Williamson v. Citrix Online, LLC

Fed. Cir. 2015, p. 622

RULE: Construction of alleged means-plus-function limitations:

1. Determine whether it is a means-plus-function limitation – use of “means for” creates a rebuttable presumption in favor, absence creates presumption against. Ultimate issue is whether the words of the claim are understood by persons of ordinary skill in the art to have a sufficiently definite meaning as the name for structure.
2. Identify recited function
3. Determine the structure disclosed in the written description as corresponding to the recited function

Odetics, Inc. v. Storage Tech. Corp.

Fed. Cir. 1999, p. 630

RULE: [t]he individual components, if any, of an overall structure that corresponds to the claimed function are not claim limitations. Rather, the claim limitation is the overall structure corresponding to the claimed function.

Literal Infringement – requires identical function, allows equivalent structure at time of issuance

• Accused device must possess a structure that performs the identical function as set forth in the claim and
• The structure of the accused device must be identical or equivalent to the structure set forth in the written description. Insubstantial differences must exist in way and result only, not of function
• Analysis time period is at time of issue – after-arising technology cannot literally infringe.

DoE Infringement – allows equivalent function plus equivalent structure at time of issuance

• Equivalent or insubstantial difference in function permitted
• Equivalent structure (difference in way and result)
• After-arising technologies may infringe under DoE

XI. Defenses[edit | edit source]

Invalidity defenses:

• Lack of utility, ineligible subject matter
• Violation of enablement, written description, and best mode requirements
• Anticipation, statutory bars
• Obviousness

Non-infringement – experimental use

Unenforceability defenses:

• Inequitable conduct
• Inventorship
• Laches
• Equitable estoppel

A. Licensee Estoppel[edit | edit source]

Lear, Inc. v. Adkins

S.Ct. 1969, p. 751

RULE: Licensees may challenge the validity of patents they have licensed (estoppel largely abolished).

Licensee estoppel is largely abolished. Licensee may not have to pay royalties under a license agreement if they can prove the patents are invalid. But, licensee may be estopped from challenging their obligation to pay royalties for activities prior to issuance for license agreements negotiated prior to issuance.

Assignor estoppel still exists – assignors cannot challenge the validity of an assigned patent.

B. Declaratory Judgment Jurisdiction[edit | edit source]

Declaratory judgment: in a case of actual controversy within a court’s jurisdiction, that court may declare the rights of a party seeking such a declaration.

Arguably, because licensees are paying fees, there is no controversy. Courts permit potential infringers to sue for declaratory judgment, rather than making them wait for patentees to sue for infringement or breach of contract. Test: “whether 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.”

MedImmune, Inc. v. Genentech, Inc.

S.Ct. 2007, p. 757

RULE: A licensee does not have to breach an agreement before seeking a declaratory judgment of invalidity or non-infringement.

Test – whether the facts alleged show a substantial controversy between parties with adverse legal interests of sufficient immediacy and reality to warrant issuance of declaratory judgment. Met if the DJ plaintiff if put in position to pursue arguably illegal behavior or abandon it even though he or she claims a right to pursue it or if patentee asserts rights based on identified ongoing or planned activity of another party, and where the party contents it has a right to engage in that activity.

C. Inequitable Conduct[edit | edit source]

“Atomic bomb” of patent law – makes the entire patent unenforceable

Inequitable conduct – requires intent and materiality, each analyzed for clear and convincing evidence.

• Intent: specific intent to deceive, not just gross negligence. Can be inferred, but not just based on high materiality – has to be single most reasonable inference. Once prima facie case of intent shown, good faith explanation may be provided.
• Materiality: “but for” test – PTO would not have granted the patent but for the omission or misrepresentation. Give claims the broadest reasonable interpretation and apply a preponderance of the evidence standard. Exception: affirmative egregious misconduct is always material.

Therasense, Inc. v. Becton, Dickinson & Co.

Fed. Cir. 2011, p. 824

RULE: Must show intent and materiality by clear and convincing evidence.

PTO’s definition of materiality: “A prima facie case of unpatentability is established when the information compels a conclusion that a claim is unpatentable under the preponderance of evidence, burden-of-proof standard, giving each term in the claim its broadest reasonable construction consistent with the specification, and before any consideration is given to evidence which may be submitted in an attempt to establish a contrary conclusion of patentability.”

Supplemental exam – may “cleanse” potential inequitable conduct. Essentially prohibits future claims of inequitable conduct based on same information considered during supplemental exam.

D. Experimental Use[edit | edit source]

1. Statutory[edit | edit source]

35 USC § 271(e)(1): “It shall not be an act of infringement to make, use, offer to sell, or sell within the US or import into the US a patented invention [with limited exceptions] solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.”

Merck v. Integra Lifesciences I

S.Ct. 2005, p. 835

RULE: Must be a reasonable basis for believing that a patented compound may work and use in research that, if successful, would be appropriate to include in a submission to the FDA (even if FDA does not require it and even if it ultimately is not submitted).

Expansive conception of safe harbor that encompasses pre-clinical activity, bot not necessarily research tools.

2. Common Law[edit | edit source]

Narrow to the point of non-existence. Accused infringer has to establish the defense, and is limited to situations where action is taken “for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry.” Scientific inquiry with definite, cognizable, and not insubstantial commercial purposes does not qualify, nor does use consistent with legitimate business of infringer.

Madey v. Duke

Fed. Cir. 2002, p. 842

RULE: Use consistent with legitimate business of infringer does not qualify under the common law experimental use defense (University research lab, in this case).

E. Inventorship[edit | edit source]

35 USC § 116: “Inventors may apply for a patent jointly even though (1) they did not physically work together or at the same time, (2) each did not make the same type or amount of contribution, or (3) each did not make a contribution to the subject matter of every claim of the patent.”

Improperly named or omitted inventor. Second is most common.

• Misjoinder: incorrect inventor named
• Non-joinder: omitted inventor
• Pre-AIA required a showing of no deceptive intent
• Joint inventors considered tenants-in-common with complete rights to the patent

Acromed Corp. v. Sofamar Danek Group, Inc.

Fed. Cir. 2001, p. 854

RULE: Alleged inventor must prove contribution to inventive conception of at least one part of a claim in a patent by clear and convincing evidence.

F. Laches[edit | edit source]

SCA Hygiene Products v. First Quality Baby Products

Fed. Cir. 2015

RULE: Laches eliminates entitlement to pre-lawsuit damages and injunctive relief, including damages within the six years of filing allowed by § 286.

Elements: long period of delay (more than six years after patentee knew or should have known of infringer’s activities) and material prejudice resulting from the delay.

Bars:

• Injunctive relief
• Patentee’s claim for damages prior to the filing of the lawsuit
• NOT claim of ongoing royalties

Burden of going forward is on patentee, but alleged infringer always bears burden of persuasion.

G. Equitable Estoppel[edit | edit source]

May bar entire lawsuit, if proven. Includes entitlement to an injunction and past damages, but also any opportunity for ongoing royalties. Three elements:

1. Patentee engages in conduct that misleads the alleged infringer to reasonably infer that patentee does not intend to enforce patents (includes statements, actions, inaction, or silence when there is an obligation to speak).
2. Alleged infringer must rely upon that conduct.
3. Due to the reliance the alleged infringer would be materially prejudiced if patentee allowed to bring its claim.

H. Patent Exhaustion and Repair-Reconstruction[edit | edit source]

Exhaustion (AKA first sale) – patentee’s rights in a product, i.e. the right to exclude use, expire when the patentee or its licensee acting within the scope of its license sells the product. A purchaser or downstream user cannot be held liable for infringement with respect to the product. Scope is limited by the repair-reconstruction doctrine.

Keurig, Inc. v. Sturm Foods, Inc.

Fed. Cir. 2013, p. 673

RULE: Exhaustion exists if there is an authorized, unconditional sale in the US of the device covered by the patent.

Quanta Computer, Inc. v. LG Electronics, Inc.

S.Ct. 2008, p. 712

RULE: Exhaustion exists for an unpatented component when (1) The only reasonable and intended use of a product is to infringe a patent (has no reasonable non-infringing use) and (2) the product embodies essential features of the patented invention (includes all inventive aspects of the claim).

Circumstances:

• Sales of patented devices – authorized, unconditional sale in the US of a patented device
• Unpatented components of patented invention – authorized, unconditional sale in the US of a component when (1) the only reasonable and intended use of a product is to infringe a patent (has no reasonable non-infringing use) and (2) the product embodies essential features of the patented invention (includes all inventive aspects of the claim).

Effect: termination of ability of patent holder to control or obtain damages for use of the patented invention

Repair-reconstruction doctrine: Exhaustion does not apply in cases of reconstruction, though it does in cases of repair.

• Repair: preserving fitness for use throughout useful life
• Reconstruction: effectively recreating the product

Relevant only if the contract of sale does not eliminate the possibility of the default right of repair. Patentees may impose conditions on reuse and resale, so that violation of those terms constitutes infringement (action without authority).

Jazz Photo Corp. v. Int’l Trade Comm’n

Fed. Cir. 2001, p. 676

RULE: Repair (making sure the article stays functional for useful life/preserving fitness for use) is not infringement.

Bowman v. Monsanto Co.

S.Ct. 2013, p. 734

RULE: Reconstruction/copying (effectively recreating the product) is infringement.

International exhaustion – US patent rights are not exhausted by foreign sales, but importation may infringe, even if the devices were purchased from patentee or licensee abroad. Thus, no real such thing as international exhaustion.

Lexmark Int’l, Inc. v. Impression Products, Inc.

Fed. Cir. 2016, p. 719

RULE: Copyright exhaustion applies abroad, but patent exhaustion does not.

I. Patent Misuse[edit | edit source]

Allowable contract terms:

• Restricting use of the invention
• Conditioning use of the invention
• Structuring royalty payments

35 USC § 271(d): ““No patent owner otherwise entitled to relief for infringement or contributory infringement of a patent shall be denied relief or deemed guilty of misuse or illegal extension of the patent right by reason of his having done one or more of the following: (1) derived revenue from acts which if performed by another without his consent would constitute contributory infringement of the patent; (2) licensed or authorized another to perform acts which if performed without his consent would constitute contributory infringement of the patent; (3) sought to enforce his patent rights against infringement or contributory infringement; (4) refused to license or use any rights to the patent; or (5) conditioned the license of any rights to the patent or the sale of the patented product on the acquisition of a license to rights in another patent or purchase of a separate product, unless, in view of the circumstances, the patent owner has market power in the relevant market for the patent or patented product on which the license or sale is conditioned.”

Misuse: common law equitable defense to infringement and breach of conduct that does not permit patentee to extend patent right beyond statutory scope of patent grant. Per se misuse is conduct with anti-competitive effects and no redeeming pro-competitive effects (i.e. patent-to-product tying plus market power or requirement to pay royalties beyond term of patent). Anything not per se misuse requires analysis of anti- and pro-competitive effects, aka rule of reason analysis (patent-to-patent tying). However, there is no duty to practice your invention and no presumption of market power because of ownership of the patent.

Morton Salt Co. v. GS Suppiger Co.

S.Ct. 1942, p. 689

RULE: Patent-to-product tying is per se misuse (no longer good law – now § 271(d)(5) requires a showing of market power).

US Philips Corp. v. Int’l Trade Comm’n

Fed. Cir. 2005, p. 691

RULE: Conduct with anti-competitive effects and no redeeming pro-competitive effects is per se misuse.

Field of use restrictions – enforced so long as not per se illegal, reasonably within patent grant, and pass the rule of reason analysis of pro- and anti-competitive effects. Include geographic restrictions, market restrictions, “single use only” restrictions. Price discrimination allowed. Patent and contract remedies available for breach of restrictions.

Structuring royalty payments – royalty payments cannot extend past expiration of last-to-expire patent (per se misuse). Payments can be made past expiration for pre-expiration use, but not post-expiration use. May tie to trade secret use or create a joint venture instead to avoid.

Brulotte v. Thys Co.

S.Ct. 19664, p. 741

RULE: It is patent misuse to require royalty payments beyond the term of the patent.

Scheiber v. Dolby Labs, Inc.

7th Cir. 2002, p. 745

RULE: There is a difference between structuring payments such that some occur after expiration and requiring payment for activities after expiration.

J. Antitrust[edit | edit source]

Patents by definition give their holder a legal monopoly in the right to exclude, but do not give the holder market power if a viable non-infringing alternative is available. Ownership of a patent alone does not create a presumption of market power. Patent-to-product tying is per se illegal under antitrust law.

Illinois Tool Works, Inc. v. Independent Ink, Inc.

S.Ct. 2006, p. 782

RULE: Ownership of a patent alone does not create a presumption of market power under patent or antitrust law.

Illegal monopolization

• Claimant must prove patentee has market power in relevant market
• Anticompetitive conduct to exclude or weaken competition to increase market power
• Superior products, business acumen, and historic accident are not anticompetitive conduct.

Walker process claim – antitrust liability arises when a patentee fraudulently obtains a patent and enforces or threatens to enforce it.

Requirements:

1. Fraud at the patent office by showing:

1. Representation of material fact
2. Falsity of the representation
3. Intent to deceive or at least recklessness
4. Justifiable reliance inducing action
5. Injury

2. Knowledge at the time of attempted enforcement of the earlier fraud at the patent office.

3. Elements of antitrust liability:

1. Attempted enforcement of the fraudulently obtained patent
2. Patent Office issued the patent because of the fraud
3. Attempted enforcement threatened to lessen competition in a relevant antitrust market
4. Plaintiff suffered antitrust damages
5. Other elements of attempted monopolization (including market power)

Nobelpharma AB v. Implant Innovations, Inc.

Fed. Cir. 1998, p. 790

RULE:

Sham litigation claim – allegation that a patentee should be subject to an antitrust claim based on filing a lawsuit alleging infringement of a patent claim known to be invalid, not infringed or unenforceable, with a purpose to impose anticompetitive harm on the defendant rather than to obtain a justifiable legal remedy.

Not required to prove fraud at the Patent Office, just bad faith litigation based on knowledge of invalidity, non-infringement, or unenforceability, by showing:

1. Lawsuit is objectively baseless because no reasonable litigant could expect success on the merits
2. Litigant subjectively sought to interfere directly with the business relationships of a competitor through the litigation process (not the outcome)
3. Other elements of antitrust: (1) threat to lessen competition in relevant antitrust market, (2) plaintiff suffered antitrust damages, and (3) other elements of attempted monopolization, including market power.

Settlements – most cases settle for payment in exchange for release from liability and licenses, though may give rise to claims of antitrust liability.

Hatch-Waxman – balances spurring pharma innovation with providing for prompt access to pharma products in the market by addressing competition between name brand and generic drug companies. Procedures at the FDA:

• “Inventors” or name brand companies – files NDA, applicant lists any patents that would be infringed in the Orange Book, which secures a 30-month stay of FDA approval on a generic if the applicant files an infringement lawsuit against the generic manufacturer (1. List drug, 2. File infringement suit and receive 30 month stay)
• “Copiers” or generic drug companies – files ANDA, prove bio-equivalency, explain why the patents in the Orange Book are not a barrier (invalid or non-infringing). Must be done in “timely fashion”
• After FDA filings: generic gives name brand notice with details of invalidity or non-infringement arguments within 20 days of filing, giving brand name 45 days to file infringement suit to obtain stay.
• If invalidity or non-infringement is found, generic application is approved. Else, generic is enjoined and their application won’t be approved until the brand name patent expires.

Reverse payments – settlement agreements between generic and brand names to keep generics from entering the market. Brand name pays generic to stay off the market. AKA “exclusion” payment. Reverse payments are subject to a rule of reason analysis.

FTC v. Actavis, Inc.

S.Ct. 2013, p. 802

RULE: Reverse payments are subject to a rule of reason analysis.

Sample analysis:

• Assume litigation is costless for both sides.
• Brand name analysis:
  • Without the generic, assume the name brand could make $100mil/year over a 10 year term. Total profit: $1bil
  • 80% certainty that it’s valid and infringed
  • What is the risk if unsettled? $200mil (20% chance of losing). This means anything less than $200mil is acceptable to settle.
• Generic analysis:
  • Generic potential in 6 months of exclusivity is $40mil.
  • In the remaining 9.5 years, they can expect to make $60 mil. Thus, total over ten years is $100mil.
  • Only 20% chance of winning, 80% chance of losing, so their gamble is $20mil. (20% of $100mil). This means anything over $20mil is acceptable to settle.
• Assume they settle for $110mil. Makes complete economic sense, but is there an antitrust issue? Probably not, but best to avoid the dispute altogether.

Refusals to deal: patent gives right to exclude, no duty to practice or license an invention. Unconditional refusals to deal (sell or license) are not violations of antitrust law, but conditional refusals (patent-to-product tying or agreements not to buy form competitors) may be.

K. “Advice of Counsel”[edit | edit source]

Assert an opinion of counsel as a defense to allegations of willful infringement (communication from an attorney indicating non-infringement, invalidity, and/or unenforceability. Author and recipient will testify at trial.

Effect on privilege and immunity:

• Attorney-client privilege is waived
• Work-product immunity may also be waived with respect to communications on the same subject as the opinion relied upon for defense and un-communicated work-product that memorializes attorney-client communications.

35 USC § 298 (AIA): “Failure of an infringer to obtain the advice of counsel or failure of infringer to present such advice to the jury or court may not be used to prove that the accused infringer willfully infringed the patent or that the infringer intended to induce infringement of the patent.”

XII. Remedies[edit | edit source]

35 USC § 283: “The several courts having jurisdiction of cases under this title may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.”

35 USC § 284: “Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.”

A. Money Damages[edit | edit source]

1. Lost Profits[edit | edit source]

Lost profits – typically higher than reasonably royalties. Not the profits the infringer made, though disgorgement is available for design patents. Goal is to fully compensate patent owner for damages caused by infringement. Considered under but-for causation (profits the patentee would have made but for infringement). Limited by foreseeability and proximate causation – profits that were or should have been reasonably foreseeable. Includes profits on products the patentee could reasonably foreseeably have sold but for infringement.

Rite-Hite Corp. v. Kelley Co., Inc.

Fed. Cir. 1995, p. 890

RULE: Four-part Panduit factors: (1) demand for patented product, (2) absence of acceptable non-infringing substitutes, (3) manufacturing and marketing capacity to exploit demand, and (4) amount of profits patent owner would have made.

Grain Processing Corp. v. American Maize Products Co.

Fed. Cir. 1999, p. 899

RULE: To be entitled to lost profits, there must not have been any acceptable non-infringing substitutes sold or offered during the period of infringement or “available” during that time.

Absence of non-infringing substitutes during period of infringement – can be assumed unavailable if none sold or offered during that time. Infringer bears the burden of showing that a substitute was available. “Non-availability” means technical, financial, legal, or other insurmountable barriers to use of the alternative technology.

Market share rule – patentee may still recover lost profits even if there was an available non-infringing substitute, just less than if they had a monopoly on the market.

Manufacturing capability – patent owner must show that it was capable of making and marketing the patented device. Capability encompasses capacity. Can be met even if the patentee didn’t have the capability at the time of infringement but could have increased its capacity or licensed another to produce the invention. Factors include time and funding required.

Amount of profit – think of lost sales (both patented and unpatented goods), considering price erosion (damage caused by patentee having to reduce prices to compete) and accelerated market reentry (damage caused by infringer entering the market earlier than would have had it waited for the patent to expire).

2. Reasonable Royalties[edit | edit source]

35 USC § 284: “Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer.”

Reasonable royalties – default method of determining damages, considered the floor for damages. Awarded in absence of higher lost profits or an “established” royalty (repeatedly agreed to by patentee).

• Analytical method – based on marginal effect of patented technology on infringer’s profit
• Georgia-Pacific factors:
  • Royalties received by the patentee for licensing of the patent in suit, proving or tending to prove an established royalty
  • Rates paid by licensee for the use of other patents comparable to the patent in suit
  • Nature and scope of the license, as exclusive or non-exclusive; or restricted or non-restricted in terms of territory or with respect to whom the manufactured product may be sold
  • Licensor’s established policy and marketing program to maintain his patent monopoly by not licensing others to use the invention or by granting licenses under special conditions designed to preserve that monopoly
  • The commercial relationship between the licensor and licensee, such as, whether they are competitors in the same territory in the same line of business, or whether they are inventor and promoter
  • Effect of selling the patented specialty in promoting sales of other products of the licensee; that existing value of the invention to the licensor as a generator of sales of his non-patented items; and the extent of such derivative or convoyed sales
  • Duration of the patent and term of the license
  • Established profitability of the product made under the patent; commercial success and current popularity
  • Utility and advantages of the patent property over the old modes or devices, if any, that had been sued for working out similar results
  • Nature of patented invention; character of commercial embodiment of it as owned and produced by the licensor; benefits to those who have used the invention
  • Extent to which the infringer has made use of the invention; evidence probative of value of that use
  • Portion of the profit or of the selling price that may be customary in the particular business or in comparable businesses to allow for the use of the invention or analogous inventions
  • Portion of the realizable profit that should be credited to the invention as distinguished from non-patented elements, manufacturing process, business risks, or significant features or improvements added by the infringer
  • Opinion testimony of qualified experts
  • Amount that a licensor and licensee would have agreed upon if both had been reasonably and voluntarily trying to reach an agreement
• “Hypothetical negotiation” – most common, based on a negotiation that would have occurred right before infringement occurred, assuming the patent is infringed and valid. May consider after the fact events (“Book of Wisdom”) by assuming predictions made at that negotiation would have come true, especially if there were no actual predictions.

Forms:

• Running - royalty base (based on number of units sold and revenue – not profits) x royalty rate (percentage reflecting allocated share). Lack of success means reduced royalties, so licensor (patentee) is compensated for bearing this risk with higher royalty rate.
• Lump sum (above the cost of defense) may reflect present value (at time of hypothetical negotiation) of a predicted running or reasonable royalty.

Entire market value rule – if patentee can prove the patented invention is the basis for consumer demand, damages may be based on entire apparatus, not just patented invention portion. Value is tied to the relative amount of the profits from the sales attributable to the invention. In reality, royalty calculations are based on revenue of sales for entire apparatus, for ease of calculation and monitoring.

3. Marking/Notice Requirement[edit | edit source]

35 USC § 287(a): “Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by fixing thereon the word “patent” or the abbreviation “pat.”, together with the number of the patent, or by fixing thereon the word “patent” or the abbreviation “pat.” together with an address of a posting on the Internet, accessible to the public without charge for accessing the address, that associates the patented article with the number of the patent, or when, from the character of the article, this can not be done, by fixing to it, or to the package wherein one or more of them is contained, a label containing a like notice. In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.”

To recover damages for claims other than method claims, patentee must either provide constructive notice by marking its patented good, or provide actual notice of infringement by letter or lawsuit. Marking may be on the item or the packaging. AIA allows for “virtual marking” Method claim patent issuance is considered constructive notice. Issuance is also considered notice for non-practicing entities.

4. Statute of Limitations[edit | edit source]

35 USC § 286: “Except as otherwise provided by law, no recovery shall be had for any infringement committed more than six years prior to the filing of the complaint or counterclaim for infringement in the action.”

Not technically a statute of limitations, more a limitation on damages. No damages may be recovered for infringement more than six years prior to filing of claim.

B. Equitable Relief[edit | edit source]

35 USC § 283: “The several courts having jurisdiction of cases under this title may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.”

Important considerations:

• Whether the patent owner practices the claimed invention (i.e. whether the parties are competitors)
• Whether the patent covers the entire infringing product or merely a component
• Whether the patent owner introduces evidence supporting assertions of irreparable harm/inadequacy of money damages

1. Preliminary Injunctions[edit | edit source]

Patentee must prove:

• Reasonable likelihood of success
  • Infringement, no invalidity, and no unenforceability (presumption of validity not present)
  • Consideration of underlying burden of proof (clear and convincing)
  • Analysis of infringement and validity requires preliminary claim construction
  • No substantial defense from infringer (minority says infringer only needs an argument worthy of consideration)
• Irreparable harm if injunction is not granted – typically not present if money damages would suffice
• Balance of hardships favors granting the inunction (hardship on patentee without > hardship on infringer with)
• Public interest must favor injunction

2. Permanent Injunctions[edit | edit source]

Patentee must prove:

• Irreparable injury in absence of injunction
• Monetary damages are inadequate compensation
• Balance of hardships favors granting the injunction (hardship on patentee without > hardship on infringer with)
• Injunction’s favorable impact on public interest

C. Enhanced Damages and Attorney’s Fees[edit | edit source]

35 USC § 284: “The court may increase the damages up to three times the amount found or assessed.”

35 USC § 285: “The courts in exceptional cases may award reasonable attorney fees to the prevailing party.”

Most common basis for award of enhanced damages and attorney fees is willful infringement.

Knorr-Bremse Systeme v. Dana Corp.

Fed. Cir. 2004, p. 982

RULE: Not turning over attorney’s opinions no longer creates an adverse inference, in order to preserve the attorney-client relationship, though opinions may still be used at trial to show lack of willful infringement.

Halo Electronics v. Pulse Electronics, Inc.

S.Ct. 2016

RULE: Burden is on patentee to prove willful infringement by preponderance of the evidence. Must show willful, wanton, malicious, bad faith, deliberate, consciously wrongful, flagrant, or conduct characteristic of a pirate.

Enhanced damages analysis:

1. Determine whether willful infringement or another basis supporting an award of enhanced damages
2. District court may use discretion to decide whether to enhance damages and in what amount, up to triple. May be based on Read factors:

• Deliberate copying of the ideas or design of another
• Investigation of scope of patent and formation of good faith belief that it was invalid or not infringed
• Behavior as party to litigation
• Infringer’s size and financial condition
• Closeness of the case
• Remedial action taken by infringer
• Infringer’s motivation for the harm
• Attempts to conceal misconduct

Attorney fees analysis:

1. Determine whether the case is “exceptional” – whether it stands out from the average case, is uncommon, rare, or not ordinary, by the preponderance of the evidence. Standard of review is abuse of discretion
2. District court will determine, using its discretion, whether to award and how much.