Patent News:

In In re Wheeler, a nonprecedential ruling, the CAFC reversed a rejection under 35 U.S.C. § 102 because the prior art fishing pole was not transparent along its entire length as claimed, having illumination only at its handle and tip. The PTO appears to have used faulty logic, arguing that despite what the claim read, the Wheeler pole is not transparent along its entire length. As the Fed. Cir. points out, “However, the ground of rejection is “anticipation,” and it is clear that Kelly does not show the Wheeler pole.”

• Summary, commentary, discussion

In Welker Bearing Co. v. PHD, Inc., the Fed Cir. upheld the district court's summary judgment ruling that a limitation in Welker Bearing's patent should be interpreted as a means plus function limitation under 35 U.S.C. § 112, paragraph six. Specifically, the court noted, “No adjective endows the claimed 'mechanism' with a physical or structural component. Further, claim 1 provides no structure context for determining the characteristics of the 'mechanism' other than to describe its function. Thus, the unadorned term, . . . is simply a substitute for the term 'means for'” (quoting Lighting World1). Furthermore, the Fed. Cir. agreed with the district court's finding that the specification only mentions “rotating” and therefore PHD's product's linear actuator does not infrigne because it is not equivalent to the rotating post described in the specification.

Doctrine of Equivalence: As pointed out in Hal Wegner's post, this case highlights an important difference between structural equivalents under 35 USC § 112, ¶ 6 and the doctrine of equivalents. Quoting Al-Site Corp. v. VSI Int'l, Inc., 2), this distinction ”'involves the timing of the … analyses for an ‘insubstantial change.' . Namely, an equivalent structure under § 112 ¶ 6 'must have been available at the time of the issuance of the claim,' whereas the doctrine of equivalents can capture after-arising 'technology developed after the issuance of the patent.' Id.”

• Patents in suit: 6,786,578 and 6,913,254.
• Summary, commentary, and discussion
• exceprts
• Summary

The PTO announced that implementation of the new appeals rules, set for 12/10/08, is delayed indefinitely. Hal Wegner credits David Boundy for having “quarterbacked a group effort at the OMB that ended in the blockage of this very, very unfortunate rulemaking. In a separate email, Hal Wegner states that “Dudas confidently implies that the rules will be approved an that he will implement them.

• Announcement and discussion

In Qualcomm v. Broadcom, the Fed. Cir. upheld the trial court's rulings, but limited the scope of nonenforcability of Qualcomm's patents to those products that conform to the standard in question.

Background: After getting slapped down by the trial court for concealing evidence of participation in the “Joint Video Team” (JVT) standards body prior to the release of standard “H.264” for video compression, the trial court held that Qualcomm's patents are unenforceable against the world,” awarding Broadcom attorneys' fees in the process, although the patents were also held as being not invalid and not infringed by Broadcom. (For the concealment, six Qualcomm attorneys were referred to the California State Bar for investigation and possible sanctions, ordering Qualcomm and sanctioned attorneys to participated in a Comprehenseive Review and Enforcement of Discovery Obligations (CREDO) program.)

On appeal, every one of Qualcomm's arguments that it had no duty to disclose the patents to the standards group were not found to be persuasive. The intellectual property rights (IPR) policy of the standards group reads, in Subsection 3.2:

“According to the ITU-T and ISO/IEC [parent organizations of JVT] IPR policy, members/experts are encouraged to disclose as soon as possible IPR information (of their own or anyone else's associated with any standardization proposal (of their own or anyone else's). Such information should be provided on a best effort basis.”

The Fed. Cir. agreed with Broadcom that the “encouraged” language of subsection 3.2 applies to the timing of the disclosure not the disclosure itself, and since Qualcomm did not make any effort to submit its IP, it did not meet the “best effort” standard. Furthermore, the court held that Qualcomm failed to comply with “must be done” disclosure requirements of ITU and ISO, parent organizations of JVT, of whom Qualcomm was a member. Accordingly, the court concluded that it was within the district court's authority to determine that that Qualcomm had waived its right to assert its patents because “its conduct was so inconsistent with an intent to enforce its righta s to induce a reasonable belief that such right has been relinquished.” Even if implied waiver did not apply, Qualcomm's conduct falls within the doctrine of equitable estoppel. With respect to remedy, the Fed. Cir. vacated the district court's remedy of holding the subject patents unenforceable against the world and remanded with instructions to limit the scope of unenforceability to H.264-compliant products.

• Oral Argument (Cached)
• Patents in suit: 5,452,104 and 5,756,767
• Review

In Anderson Corp. v. Pella Corp. et al., the Fed. Cir. reversed the lower court's holding of invalidity on summary judgment, holding that sufficient facts existed to warrant a trial. The invention was for a fine-meshed insect screening material with “reduced visability” – meaning more transparent, and less reflective than prior art insect screens. The prior art consisted of an existing screening material used for electromagnetic shielding (referred to as TWP mesh) in combination with a Japanese patent for a method of coating a screen with a light absorbable black color to reduce reflection. The Fed. Cir. found that genuine issue of material fact existed with regard to the scope and content of the prior art. Specifically, the Court held:

1. Previous use, physical characteristics, and expense of TWP material would tend to teach away from its use as an insect screen. Citing KSR citing United States v. Adams 3), the Court noted that “when the prior art teaches away from combining certain known elements, discovery of a successful means of combining them is more likely to be nonobvious.”
2. The Fed. Cir. points out that a certain amount of deference is to be given the PTO on Summary Judgment motions. In this case, the PTO examiner initially denied claims of the patent as being anticipated by the commercially available TWP mesh and obvious in light of the TWP mesh in combination with the Japanese reference, but the allowed the application because “the prior art does not disclose the screen material which has the structure recited which is used as an insect screen . . . .”

• Patent in suit: 6,880,612
• 2008/11/insect_screen.html Brief excerpts, commentary.

The PTO published a change to Rule 445 so that any PCT application submitted on or after January 12, 2009 will be subjected to increased search fees. The fee changes are outlined in the table below.

The Fed. Cir. finally handed down its decision in In re Bilski. See the Bilski Page for background information on the case. Stated the court: “The true issue before us then is whether Applicants are seeking to claim a fundamental principle (such as an abstract idea) or a mental process. And the underlying legal question thus presented is what test or set of criteria governs the determination by the Patent and Trademark Office (“PTO”) or courts as to whether a claim to a process is patentable under § 101 or, conversely, is drawn to unpatentable subject matter because it claims only a fundamental principle.”

The Fed. Cir. ruled that, ”[b]ecause the applicable test to determine whether a claim is drawn to a patent-eligible process under § 101 is the machine-or-transformation test set forth by the Supreme Court and clarified herein, and Applicants' claim here plainly fails that test, the decision of the Board is AFFIRMED.”

• Summary and discussion
• Commentary by Professor Collins: In re Bilski: Tangibility Gone “Meta”
• Brief summary and commentary
• Blistering critique
• Brief summary
• Summary
• Excerpts
• Summary, commentary
• critical commentary See also here and here.

Bilski's impact in various fields:

• Tax strategies
• Software Claims
• Biotech and Life Sciences

1. ”[A] claim is not patent-eligible 'process' if it claims 'laws of nature, natural phenomena, [or] abstract ideas.'” (Quoting the S.Ct. in Diehr 4).)
2. ”[W]hile a claim drawn to a fundamental principle is unpatentable, 'an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.'” (Quoting Diehr 5) and also citing Mackay Radio 6) with approval.)
3. “A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” (Citing Benson 7), Diehr 8), Flook 9), and Cochrane v. Deener 10).)

• ”[T]he Court explicitly stated in Benson that '[t]ransformation and reduction of an article “to a different state or thing” is the clue to the patentability of a process claim that does not include particular machines'” (emphasis in original). The Fed. Cir. noted in footnote 11, that “We do not consider the word 'clue' to indicate that the machine-or-implementation test is optional or merely advisory. Rather, the Court described it as the clue, not merely 'a' clue.”

1. ”[M]ere field-of-use limitations are generally insufficient to render an otherwise ineligible process claim patent-eligible.” (Citing Diehr 11).)
2. ”[T]he Freeman-Walter-Abele test” comprising (1) determining whether the claim recites an “algorithm” within the meaning of Benson, then (2) determining whether that algorithm is “applied in any manner to physical elements or process steps, “is inadequate.” (Citing In re Freeman 12), In re Walter 13), and In re Abele 14).)
3. ”[T]he 'useful, concrete and tangible result' inquiry is inadequate and reaffirm that the machine-or-transformation test outlined by the Supreme Court is the proper test to apply. (Citing with disapproval State St. Bank & Trust Co. v. Signature Fin. Group 15), In re Alappat 16), and AT&T Corp. v. Excel Commc'ns, Inc. 17).)
4. There is no technical arts test or mental process test. In re Comiskey does not implicitly apply a new test barring any claim reciting a mental process that lacks significant “mental steps.”
5. Data gathering or insignificant extra-solution activity does not make an algorithm patentable. (Citing In re Grams 18), In re Meyer 19), In re Schrader 20), and Parker v. Flook 21).)

• Diamond v. Diehr, 450 U.S. 175 (1981) ()
• Parker v. Flook, 437 U.S. 584 (1978) ()
• Gottschalk v. Benson, 409 U.S. 63 (1972) ()
• Mackay Radio & Tel. Co. v. Radio Corp. of Am., 306 U.S. 86 (1939)
• Cochrane v. Deener 94 U.S. 780 (1876)

• In re Freeman, 573 F.2d 1237 (CCPA 1978)
• In re Walter, 618 F.2d 758 (CCPA 1980)
• In re Abele, 684 F.2d 902 (CCPA 1982)
• State St. Bank & Trust Co. v. Signature Fin. Group, 149 F.3d 1368 (Fed. Cir. 1998)
• In re Alappat, 33 F.3d 1526 (Fed. Cir. 1994)
• AT&T Corp. v. Excel Commc'ns, Inc., 172 F.3d 1352 (Fed. Cir. 1998)

• In re Comiskey, 499 F.3d 13651 (Fed. Cir. 2007)

Late September, James Toupin, in a presentation before the Intellectual Property Owners Association presented a series of slides illustrating sharp increases in continuation filings and sharp declines in allowance rates since 2000.

The slides further suggest that Rule 37 C.F.R. § 11.18(b)(2) requires that (1) applicants review prior art submitted, (2) applicants cannot file continuations to keep an application pending. Section 410 of the MPEP stating that “An applicant has no duty to conduct a prior art search as a prerequisite to filing an application for patent” no longer applies since it was “written when applications were not published and patents were not online.”

• Discussion
• Commentary

The USPTO comments on the proposed appeals rules published last June.

Summary of Comments

Submitter	Summary of Position
Archiriloaie for Ceres Inc	Against. Estimates of time requirement are too low.
Intellectual Ventures	Against. The rules violate the Paperwork Reduction Act and the PTO improperly certified to OMB.
Graybeal Jackson Haley LLP	Against. “The proposed Rules . . . do not promote the issuance of valid patents.”
Suiter Swantz PC LLO	Against. ”. . . the Agency does not explain how the new rules will reduce delay.”
Dean Hinnen	Against. “The USPTO has drastically underestimated the amount of time it will take patent counsel to file an appellate brief under the new rules.”
Ron D. Katznelson, PhD.	Against. “My analysis showed that just the incremental paperwork burdens of the 'Appeals Rules' would be economically significant. . . .”
Steven J. Moore	Against. “The USPTO's estimate of time spent on a reply brief is wholly pulled out of thin air.”
Brian A. Schar	Against. “These rules . . . go beyond procedural changes . . . and should not be implemented.”

In Helmsderfer and Brocar Products, Inc. v. Bobrick Washroom Equip. Inc. et al., the Fed. Cir. upheld the Southern District of Ohio's ruling that “partially hidden” should be narrowly construed, i.e., as excluding “totally hidden.” Stated the court: “It is true that the plain meaning of 'partially hidden from view' does not include totally hidden from view, and that therefore claims 6-7 [which depend from claim 1 at right] do not cover the preferred embodiment or the other illustrated embodiments.” The fact that this construction “excludes both the preferred embodiment and every illustrated embodiment from these particular claims” is addressed by distinguishing Primos Inc. v. Hunter’s Specialties Inc. 22), which “counsels against interpreting a claim term in a way that excludes the preferred embodiment from the scope of the invention.” Primos and related cases are distinguished primarily on the basis that they prohibit “interpreting a claim term in a way that excludes disclosed embodiments, when that term has multiple ordinary meanings consistent with the intrinsic record” (emphasis added). Here, however, “Brocar’s proposed construction is not consistent with any plain meaning of the term “partially” as interpreted in light of the specification.”

• Patent in suit
• Summary, comments, discussion
• Comment and excerpts
• Summary with excerpts

The USPTO published new rules for appeal practice before the BPAI today. Although no announcement of the new rules was made on PTO's home web site, there have been lots of noise on the 'net.

• Rules of Practice Before the Board of Patent Appeals and Interferences in Ex Parte Appeals
• Summary, commentary
• Summary, commentary
• Brief summary
• Summary of rules, discussion

The Supreme Court reversed the Fed. Cir., in Quanta Computer Inc., et al. v. LG Electronics, Inc. For a complete background to this case, refer to the LG v Quanta page. The following summarizes the Court's findings:

Legal principle: “The longstanding doctrine of patent exhaustion provides that the initial authorized sale of a patented item terminates all patent rights to that item.”

1. On whether the Intel Products are “patented,” i.e., embody the patented inventions:
   • “Nothing in this Court's approach to patent exhaustion supports LGE's argument that method patents cannot be exhausted. . . . [M]ethods . . . may be 'embodied' in a product, the sale of which exhausts patent rights.”
   • Quoting Univis: ”[T]he authorized sale of an article which is capable of use only in practicing the patent is a relinquishment of the patent monopoly with respect to the article sold.”
   • “Here, as in Univis, the incomplete article substantially embodies the patent because the only step necessary to practice the patent is the application of common processes or the addition of standard parts.”
2. On applicability of Univis: “In each case, the final step to practice the patent is common and noninventive: grinding a lens to the customer's prescription, or connecting a microprocessor or chipset to buses or memory. The Intel Products embody the essential features of the LGE Patents because they carry out all the inventive processes when combined, according to their design, with standard components.”
3. On relevance of secondary patents: “a device that practices patent A does not, by virtue of practicing patent A, exhaust patent B. But if the device practices patent A while substantially embodying patent B, its relationship to patent A does not prevent exhaustion of patent B.”
4. On what constitutes “an authorized sale,” the Supreme Court distinguished General Talking Pictures Corp. v. Western Elec. Co. 23): “The License Agreement authorized Intel to sell products that practiced the LGE Patents. No conditions limited Intel's authority to sell products substantially embodying the patents. Because Intel was authorized to sell its products to Quanta, the doctrine of patent exhaustion prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products.”
5. DICTA: “We note that the authorized nature of the sale to Quanta does not necessarily limit LGE's other contract rights. LGE's complaint does not include a breach-of-contract claim, and we express no opinion on whether contract damages might be available even though exhaustion operates to eliminate patent damages. See Keeler v. Standard Folding Bed Co., 24) ('Whether a patentee may protect himself and his assignees by special contracts brought home to the purchasers is not a question before us, and upon which we express no opinion. It is, however, obvious that such a question would arise as a question of contract, and not as under the inherent meaning and effect of the patent laws.').”

• Supreme Court Decision (Cached copy) (Paper-saver version)
• Summary, excerpts, discussion
• Summary, excerpts
• Summary
• Kevin Noonan's analysis, impact on bio-tech patents
• Excerpts, commentary
• Comments only
• Analysis

In anticipation of the forthcoming Ex parte Bilski decision, a comprehensive page directed to Ex parte Bilski has been set up here.

An enigmatic organization calling itself “The Institute for Progress” produced a report entitled “Reexamining Inter partes Reexam”. The study is based on data from the PTO's PAIR system and is notable for calling out the PTO's own statistics as misleading, particularly the pendency statistics. The following findings were highlighted:

• Inter partes reexam (IPRE) requests have been increasing rapidly. In 2007, there were over 140, roughly six times more than in 2003, when there were fewer than 30 requests filed.
• More than half of the patents in IPRE proceedings are known to be in litigation during their reexamination, showing that IPRE is not seen as an alternative to litigation as envisioned, but an augmentation of litigation.
• Virtually all IPRE requests are granted.
• Only three IPRE cases have received a decision by the BPAI, and none have gone through the entire IPRE process. Without appeal, the average pendency period for IPRE is 43.5 months, much longer than the 28.5 months reported by the PTO, which is based on only 12 IPREs that had reached a final certificate by that date, and many of these skipped steps due to failure of the patent holder to respond. A 95% confidence interval would put the pendency between 34 and 53 months. The average pendency for appealed IPREs is 78.4 months, assuming no reqork by the PTO or secondary appeal.

Hal Wegner's take:

“The 'Rivette Reexamination Report' is an explosive condemnation of the PTO’s track record on inter partes reexamination for two reasons. First, the meticulous and intricate detail set forth in the report and the sub silentio confirmation by the PTO of its accuracy give this report tremendous credibility. Second, the study is authored by Fellows of an Institute that includes Kevin Rivette, who chair’s the PTO’s own advisory board. This is thus a mainstream study by the very Chair of the PTO’s own advisory board, hand picked by the Director of the PTO himself.”

• Summary, links to report and data
• Summary of study, links to the study

In Ex parte Fu (cached copy) the BPAI upheld the rejection of a claim to an electrophotographic device having a chemical surfactant of a particular formulation. The prior art did not disclose the claimed species of chemical surfactant, but did teach a genus of which the surfactant is a species. The question presented was the correctness of the Examiner's conclusion that the claimed species was obvious over the prior art genus. The Applicant relied principally on In re Baird, 25), stating that the prior art lacked motivation to select the specifically recited surfactant and that the Examiner applied an improper “obvious to try” rationale so support the obviousness rejection. Relying on KSR 26) and Merck & Co., Inc. v. Biocraft Labs, Inc., 27), the BPAI disagreed, stating: “While Yamamoto's genus of surfactants is arguably broad, it nevertheless consists of only a finite number of known perfluoroalkyl surfactants that predictably solve the dispersion problem…. Accordingly, a person having ordinary skill in the art would have had 'good reason to pursue' the use of GF-300, the claimed surfactant species. It would have been within the 'technical grasp' of that person having ordinary skill in the art to understand that this known surfactant, which was readily available in commerce, has the perfluoroalkyl group as required by Yamamoto. Because that person having ordinary skill in the art would have “anticipated success” in trying GF-300 perfluoroalkyl surfactant in view of Yamamoto's teachings, the subject matter of appealed claim 1 would have been prima facie obvious over Yamamoto alone.”

In Aristocrat v. IGT, the Fed. Cir. held that the trial court committed no reversible error in its summary judgment that all claims of Aristocrat's patent are invalid under 35 U.S.C. §112, sixth paragraph. Specifically, the trial court held that the patent lacked sufficient structure to support claim limitations for “game control means.” The court stated “there was no adequate disclosure of structure in the specification to perform” the functions performed by the game control means. Stated the court (citing WMS Gaming, 184 F.3d at 1348): in a means-plus-function claim “in which the disclosed structure is a computer, or microprocessor, programmed to carry out an algorithm, the disclosed structure is not the general purpose computer, but rather the special purpose computer programmed to perform the disclosed algorithm.” Furthermore, “language [that] simply describes the function to be performed, [is] not the algorithm by which it is performed.” It is insufficient and contrary to Fed. Cir. precedent that an algorithm to perform that function is within the capability of one of skill in the art.

• Patent in suit: 6,093,102
• Summary, excerpts, discussion
• Summary, discussion