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PatentabilityI. Why study patents?

A. Important component of national economic policyi. People think this but no one knows for sure if they are actually beneficial in all industriesii. Political interests

B. Span the economyi. Temporally

a. Even prior to the US becoming a nationb. Basic rules behind the system haven’t really changedc. Technology changes, but patent law remains the same

1. Either indicates that the laws are impressively adaptable or a mess

ii. Horizontallya. Innovative incentive for pharmaceuticals

1. Requires money to back up the development of the compounds2. Justifies the money spent on R&D and then able to protect against others creating it as well

b. Especially for certain industries1. Pharmaceuticals2. Information Technologies3. Biotechnology4. Software5. Financial Products

. HYPO: Tax patents –α new way of doing a deal that’s really tax advantageous to the parties and obtain a patent. Are we concerned about that?

I. The tax lawyer without the patent may lose business if unable to use such a methodII. It is now public information and a taxpayer can do it without the assistance of an attorneyIII. If the IRS now issues something that says that this is an illegal method

A. These strategies are now revealed to the public and the IRS can now see what everyone is doing and doesn’t like it

iii. Not a lot of patents in the artistic realma. Fashion and art are quickly evolving

II. Policy Changes in the Patent SystemA. Development of the Federal Circuit

i. In response to the high unemployment rate in 1970s

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a. Scientists and manufacturers were being innovative, but having a hard time monetizing their innovationsb. Attempt to fix the patent system to help with economic problems

ii. Exclusive appellate court for patent law issuesiii. Created some uniformity and certainty

a. This could make it hard to enforce, but know what the law is and how the court will treat your patent

B. There has been a substantial increase in patentingi. Filing has increased at a rate greater than issued

a. Pending applications have increased the most1. Could lead to a loss of faith and abandoning the patent2. If the pendency is due to rejections then this leads to increased costs for obtaining an issued patent

. Negative consequences of thisα1. Patents may be issued due to pressure from patent community (they are political appointees) rather than substance of the patent applications

b. Patents per billions of dollars of R&D have significantly increased

1. Theories to why. α Each patent is a smaller component within a

larger inventionß. Increase of number of applications leads to a direct increase in number issued∂. Business techniques have changed; defensive purposes of having more patentsø. The patents are for techniques less than the development themselves

. Underlying changes in technology and πresearch is less costly

C. There has been a substantial increase in patent enforcementi. Theories why

a. More people are asserting their rights for their patentsb. Patents are becoming more importantc. Easier to get patents on a broader scoped. Courts may be ruling more favorably for the patent holder

1. Gives people hopes of a more successful outcomeii. Enforcement per in-force patents have riseniii. Intensity of litigation has also risen

a. More suits filed for patent R&D that has stayed the sameb. But less than 1% of patents are litigated

1. Litigation costs: average 5.0 million per side where 25 million+ is at stake

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. About 2.5 million per side for smaller stakesα2. Conventional estimates make patents “upside-down” investments; they are worth less than zero dollars

. Why patent if it is not worth it?αI. Lottery ticket theoryII. Protect against others

A. Perhaps without patent would lose opportunity to make and use invention

III. Having multiple patents around the same thing increases others’ value

iv. However, enforcement still lags behind other IP enforcementIII. Does the patent system work?

A. Patents have become a high profile public policy subjecti. Literature has been written on the topicii. Recent patent reforms indicate that there were problems

B. Justification of patent lawi. Labor theory (John Locke)

a. Normative approachb. Own property in your labor because it comes from your body, which you inherently own

1. If you create something then your rights are better than anyone else’s in that thing2. Should be compensated for your ideas3. Is a limit: must be as much as and as good left for others

ii. Utilitarianism (Jeremy Bentham)a. What’s good for the greatest number is good for all

1. Individual level is irrelevantb. Main justification for the patent system

iii. Constitution, Article 1, § 8, cl. 8: “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries

a. Authorizes copyrights and patentsb. Awarding exclusive rights helps increase to optimal level of innovation

iv. Patents and Economicsa. Public goods

1. Non-excludable. α Cannot say only certain people can benefit

from the good2. Non-rivalrous

. α Use by one does diminish the use of the good by another

3. Thought generally to be under-produced

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. α People can free ride on these and so will not spend the money to make them since they won’t make moneyß. We think innovation is at a lower than optimal rate because it is a public good

4. Cannot meter the usage and charge for it. Overcome this problem with taxes and α

privatization (patents)b. Patent system is one of incentives to overcome the public good problem

1. Incentives to Invent. α Want people to come up with new ideas

2. Incentives to Disclose. α To describe the invention so that anyone else

can use it tooß. Want to give the world technical information∂. Can’t disclose it without protection and won’t pay before it is disclosed

I. Framework around contracts that otherwise would not work

3. Incentives to Commercialize (Incentive to Innovate). α To create the finished product to sell on the

market4. Incentives to Design Around

. α To improve on existing ideas5. Incentives to Invest in R&D

. α If take some risk capital then can take the benefits of getting a patent

I. Risks you might not take otherwise6. No one has any idea if the problem has been solved by the patent system

. But tα hese remain important analytical frameworksß. Patents act as a means to an end

I. Means is the property system/rightsII. Ends are progress, information and incentives

c. Three principle secondary economic problems1. Monopoly

. α Can raise the prices/have market powerI. Can price a good at whatever they want and there is no substitute

ß. In a perfectly competitive market basically making no profit∂. Monopolist has no substitute to pull them back to marginal cost

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I. However, there are less people buying and consuming the product

A. Creates a deadweight or efficiency loss in the market

ø. In reality, this is rare and usually tends to hover around the equilibrium point

. Patent law helps with this problemπI. Claims cannot be so broad to claim greater than the scope of what was actually made

A. Leaves room for competitors to design around and come up with ideas that work within the marketplaceB. Doctrine of EquivalentsC. Improvement/Blocking PatentsD. Patent Misuse and AntitrustE. Novelty, utility and nonobviousness requirements

II. Temporary and will come to an endA. Term limitsB. Double Patenting

2. Rent-seeking. General economic legal term: actions that α

people take to get profitsI. Anything you would do to price above marginal costII. Any investment you would make to try to make money on your productsIII. EG paying lobbyists; drafting and filing a patent application to get a competitive advantage

ß. All companies are competing to come up with the same invention, therefore decisions to obtain R&D is rent-seeking

I. At the end of the day, winner takes all∂. Patent law helps with this problem

I. NOTE: rent seeking is not too bad; can use knowledge and skills even if patent is not obtainedII. By limiting the scopeIII. Publication of patent/disclosure

A. Once competitors know that there is an application then can make judgments about how to

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continue the research or stop research altogether

IV. Priority rules encourage early filing and thus early issuance

3. Inhibition of Future Innovation. Right to exclude others from making and usingα

your inventionI. Can make future work more expensive

A. Methods of research may be patented and you will have to license it then

ß. Patent law helpsI. Can reduce your risk a bit because can perhaps appropriate more in the endII. Cannot patent really trivial advances so maybe clears out the possibility of some patents being issued

A. Novelty and nonobviousnessIII. Disclosure rules

A. Publication helps with future innovation

IV. Rules that help make boundaries clear4. Blocking patents

. Iα ncentivizes cross licensingß. Huge part of the philosophy of the patent system∂. Force people to transact and help overcome some of these concerns

IV. Other IssuesA. Patent Trolls (Non-practicing Entities)

i. Buy up cheap patents and try to enforce them against others for profitii. Not engaged in any business of using patents, just enforcing them through the courtsiii. Benefit: may pay innovators when they otherwise would have made no money on the patent

B. Universitiesi. Perform research and come up with patentable inventions and then the universities do not personally make those devices

C. Small Inventorsi. Same idea as Universitiesii. Some believe that small inventors are considered to be more innovative than larger counterpartsiii. Are at the most risk with limited resources

V. Proper Disclosure § 112

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A. “Specification. 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 of carrying out his invention….”

i. Includes an enablement requirement, a written description requirement, and a best mode requirementii. Why have a disclosure doctrine at all?

a. Helps encourage progressb. Gives notice to potential infringersc. Limits duplicative work; limits rent-seeking behaviord. Trying to define the nature and quantity of the disclosure of the patent

iii. Want the right type and amount of disclosurea. Don’t want to over disclose because transaction costs would be astronomicalb. Too little disclosure would not be able to avoid or make substitute products

B. Enablementi. “…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…”ii. Statutory standard

a. Language of the statute + no undue experimentation1. Judicially engraphed from Incandescent Lamp2. The disclosure in the Specification must enable a person of ordinary skill in the art to make and use the claimed invention without undue experimentation

. Doesn’t matter if the inventor has or cannot αmake

iii. Question of lawa. Creates consistencyb. Can review appeals de novoc. It’s an interpretation of a statute; we do not leave such interpretation up to juries

iv. The disclosure must support the claims for them to be valida. Must enable all concepts claimed

1. If the scope of the claim is such that it covers two concepts and one is not enabled, then you do not have any protection over the other one that is enabled (ATI, Inc. v. BMW)

v. Enablement fundamentalsa. Scope of the disclosure ≈ Scope of claims

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1. Can claim more broadly than you disclose if there is a particular characteristic that allows you to claim an entire genus (Incandescent Lamp)2. Cannot claim more broadly than you disclose if look at it as the disclosure is actually giving breadth of what you claim and the disclosure you’ve made is pretty informative

b. Amount of disclosure depends on the predictability of the art1. Compare Cedarapids to ATI

c. Disclosure if measured at the filing date1. If a claim is enabled at the time of filing, it is forever enabled regardless of developments2. Patents may cover later developed technologies

. If the general qualities disclosed in the first αenabling disclosure and someone else finds species that didn’t know about until laterß. EG Patent claims a fastener and wd contains “nails, screw, glue” but later Velcro is discovered; may arguably already be covered by the earlier patent

3. Technical information or other informative material that arise post-filing cannot be used to satisfy the enablement requirement

vi. Why do we have enablement?a. Can limit the scope of the claims that you makeb. Is an information-producing requirement

i. Incentivizes disclosurevii. O’Reilly v. Morse (1854): claim 8 claimed any machinery that uses electromagnetism to create these characters at any distance; explicitly states that not limiting the specific machinery and parts described in the specification and claims

a. “In fine he claims an exclusive right to se a manner and process which he has not described and indeed had not invented, and therefore could not describe when he obtained his patent. The court is of the opinion that the claim is too broad, and not warranted by law.”

1. Majority proposes a genus-species error. Gave us a number of examples, but then α

claimed everythingb. Dissent argues that new improvements can still be patented, but raises cross-licensing issues, not patentability issues

viii. The Incandescent Lamp Patent (1895): patent race for a commercially viable filament for incandescent light bulbs; claims “carbonized fibrous or textile material” and then narrows to “carbonized paper”; specification indicates that they have only looked

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at two species within the subset (carbonized paper and wood carbon) and then are claiming the entire genus

a. Court finds that had there been a particular characteristic of general material that is discovered by the patentee then such a claim would not be too broad; but here is was a specific type that served a specific purpose, not a specific characteristic that all types possessed

1. If the patentees had discovered in fibrous and textile substances a quality common to them all, or to them generally, as distinguishing them from other materials, such as mineral, etc., and such quality or characteristic adapted them peculiarly to incandescent conductors, such claim might not be too broad.

b. “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.”

ix. Undue experimentationa. A broad claim that doesn’t allow the readers of a patent to perform the invention without experimenting to find out what works and what doesn’t workb. Wands Factors

1. Things you can think about, not mandatory2. The quantity of experimentation necessary3. The amount of direction or guidance presented4. Presence or absence of working examples5. Nature of the invention6. The state of the prior art7. The relative skill in the art8. The predictability or unpredictability of the art9. The breadth of the claims

c. By and large, undue experimentation is a factual question specific to a given case

1. BUT whether claims are enabled is a question of lawd. Cedarapids, Inc. v. Nordberg, Inc. (1997): trial court found it invalid because it did not specify how much to increase it, especially given the varying size of crushers; Federal Circuit reversed as this is a mechanical and predictable art that requires less disclosure

1. “The failure to recite the optimal amount of increase and relationship between speed and throw for crushers of various other sizes does not render the specification nonenabling…. [S]pecified values for any conical crusher were readily ascertainable, that persons of skill in the art knew the characteristics of crusher performance, and that persons of skill in the art knew how to increase speed and/or throw.”

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e. ATI, Int’l. v. BMW of North America (2007): side-impact airbag; trying to claim two separate means (one mechanical, one electrical); when a portion in the drawing moves, the car detects that and the airbag opens; Federal Circuit found that this was not enabled

1. It is the specification, not the knowledge of someone skilled in the art to determine that it is novel and constitute adequate enablement2. Since this was a new field, greater disclosure is required

. Didn’t exist before and therefore needs more αspecificityß. If there is something that was clearly not in the art before then there is a “somewhat higher” disclosure requirement

3. Enabling the mechanical mechanism does not enable the electrical one as well

C. Written description requirementi. “…written description of the invention…”ii. Defined only by common lawiii. Requires that the patent specification describe an invention understandable to a person of ordinary skill in the art and show the skilled artisan that the inventor actually invented what is claimediv. Regents of the UC v. Eli Lilly (1997): written description discussed “rat insulin” and “human insulin polypeptide”, but then claimed vertebrate insulin, mammal insulin, and human insulinv. Ariad v. Eli Lilly (2010): a method for reducing cytokines; only gave general ways of doing this, no actual process of the method was claimed; court uses and develops the written description requirement rather than enablement requirement; reaffirms the existence of a written description requirement and holds it invalid for failure to meet this statutory requirement

a. Claims that were very generic and tried to find support in the specification with relatively species within the genusb. Enablement has existed for a long time and now that we have new technologies, writing cases using enablement may change how that affects other industries as well

1. Can have enablement, but not fulfill the written description requirement

c. Not locked in by the statute because it is ambiguous and can create it basically purely on case law

1. Claims are invalid if they fail the written description requirement

. Creates a concern because claims are αsupposed to define the invention, not the specification

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d. “An adequate written description requires a precise definition, such as by structure, formula, chemical name, physical properties, or other properties, of species falling within the genus sufficient to distinguish the genus from other materials… functional claim language can meet the written description requirement when the art has established a correlation between structure and function. But merely drawing a fence around the outer limits of a purported genus is not an adequate substitute for describing a variety of materials constituting the genus and showing that one has invented a genus and not just a species.”

vi. Two requirements (from Ariad)a. Possession at the time of filing

1. “The test for sufficiency of support is whether the disclosure of the application relied upon ‘reasonably conveys to the artisan that the inventor had possession at that time of the later claimed subject matter.’”

b. Inventor invented the claimed invention2. “To fulfill the written description requirement, a patent specification must describe an invention and do so in sufficient detail that one skilled in the art can clearly conclude that ‘the inventor invented the claimed invention.’”

vii. Gentry Gallery v. Berkline (1998): claims do not limit the controls to the console, but the written description specifies that they are on the console; court finds that the disclosure is limited to placing the controls on the console as it is where they are described and the specific solution to the problem found in the prior art

a. Too broad of claims given the written description and therefore invalid

1. Court seems to be suggesting that the written description is more important than the claims2. Goes against some of the goals of patent system – may lead people to be more vague in their written description

viii. Johnson Worldwide (1999): to try to qualm the effects of Gentry Gallery; dispute over whether “heading signal” referred to direction of the motor or direction of the motor and the boat; court distinguishes this from Gentry Gallery which had just given one example that was the only possible embodiment of the invention

a. The element had been made essential by the written description and therefore needed to be claimed

1. “Gentry Gallery, then, considers the situation where the patent’s disclosure makes crystal clear that a particular (i.e. narrow) understanding of a claim term is an ‘essential element of [the inventor’s] invention.’”

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b. Be vague and noncommittalD. Best Mode

i. “…shall set forth the best mode contemplated by the inventor of carrying out his invention….”ii. The patentee must disclose the best way (or mode) of practicing the claimed inventioniii. Has a subjective and objective portion of the standard

a. Subjective: did the inventor have a best mode?b. Objective: if the inventor had a best mode, is it sufficiently disclosed in the specification?

1. “To satisfy the second inquiry of the best mode test, an inventor need only disclose information about the best mode that would not have been apparent to one of ordinary skill in the art.” (Young Dental)

iv. Burden of proofa. Party seeking invalidity of the patent must present clear and convincing evidence that the inventor both knew of and concealed a better mode of carrying out the claimed invention than what was set forth in the application

v. Why do we have this requirement?a. Don’t want the person to obtain a patent and maintain a trade secret at the same time (incentive of disclosure)b. Less than the best mode may lead to inefficiencies in practicing thingsc. May be used to extend the patent’s life by adding small new developmentsd. Once the patent expires, essentially have extended the patent because competitors will take some time to figure out the best mode

vi. Young Dental v. Q3 (1997): hand-held device used by dentists to polish teeth

a. The best mode does not apply to “production details”1. Routine or commercial details such as supplier, pricing, etc used in the production of your invention not relating to the nature and quality of the invention2. Well within the knowledge of the PHOSITA generally do not need to be disclosed

b. Generally speaking, the further attenuated from the claims, i.e. efficient manufacture, the less likely will have a best mode problem

vii. Recent patent reforms essentially get rid of this requirementa. Problems/reasons why lessening it

1. Subjective element may make it more difficult to determine if standard had been met

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2. Small inventors are supposedly abused by this requirement because they are unaware of it and will later find that their patents have been invalidated3. Arguably foreign inventors are harmed as well

E. Definiteness Requirementi. Paragraph 2 of § 112ii. “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. The key inquiry under definiteness requires an analysis of whether those persons skilled in the art would understand the bounds of the claim when read in light of the specification

iii. Demands that the patentee drafts clear and distinct claimsa. Rationale: notice/avoid duplicative work

1. To the public and competitors2. To the PTO to know what they are examining

b. Difficult to show that claims are indefinite; just need to be able to show that it has some reasonable meaning

1. “The definiteness requirement, however, does not compel absolute clarity. Only claims ‘not amenable to construction’ or ‘insolubly ambiguous’ are indefinite. Thus, the definiteness of claim terms depends on whether those terms can be given any reasonable meaning.” Datamize

iv. Datamize v. PlumTree (2005): interfaces for kiosks that is allowed to be made “aesthetically pleasing” but with no specific definition of the term; finds that this fails the definiteness requirement

a. “The scope of the claim language cannot depend solely on the unrestrained, subjective opinion of a particular individual purportedly practicing the invention. Some objective standard must be provided in order to allow the public to determine the scope of the claimed invention.”

1. Such a subjective phrase as “aesthetically pleasing” needs a standard to be established in the specification upon which the scope of the phrase can be measured

v. Words of degreea. Court must then determine whether the patent’s specification provides some standard for measuring that degree

vi. Star Scientific v. RJ Reynolds Tobacco (2008): process of curing tobacco; court was concerned with the term “anaerobic condition”; claims explain specifically when the condition has been achieved; the patent is not indefinite

a. “The test for indefiniteness does not depend on a potential infringer’s ability to ascertain the nature of its own accused product to determine infringement, but instead on whether the

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claim delineates to a skilled artisan the bounds of the invention.”

1. “Here, the term ‘anaerobic condition’ is in effect a term of degree because its bounds depend on the degree of oxygen deficiency…. The intrinsic record provides a standard for measuring that degree and assessing the bounds of ‘anaerobic condition’ as required by Datamize, namely the level of TSNA formation. In fact, the claims explicitly refer to the standard.”

VI. Novelty § 102A. “Conditions for patentability; novelty and loss of right to patent.

A person shall be entitled to a patent unless-(a) 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, or…”

i. Presumption that you will obtain a patent if you file an applicationa. The PTO must tell you why you can’t get one if they don’t issue one

1. Written this way to lessen the burden2. The patent system is to encourage innovation, not to be an uphill battle3. Policy that encourages patents4. Agnostic view of patentable subject matter

ii. Protects things that are already in the public domainiii. “Known or used by others” is only in this country

a. Things that are only known or used in another country should be encouraged to be brought to this country for people to use

1. Want people to disclose things here in the USb. Requires that the patentee be the original and first inventor of the thing patentedc. Gayler v. Wilder (1850): challenge to a claim based on the existence of an apparent fireproof safe; the court finds that it was due to Fitzgerald’s ingenious that it is now presented; to the extent it had been known in the past, it is now lost

1. Perhaps the only case of lost artd. Rosaire v. Baroid (1955): method of prospecting oil; Teplitz had been using this method and then he stops using it; patentee argues that it had never been published and wasn’t benefitting the public in any way; Court finds that it was used openly enough and does not require an affirmative act to bring it to the attention of the public at large

1. Distinguished from Gayler because there there was no way of knowing

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2. Doesn’t take a whole lot to satisfy the threshold of “known or used by others”3. An issue of public accessibility4. If the patentee won in this case, he would be able to exclude the true first inventor

iv. No geographical limit on “patented or described in a printed publication”

a. This is because it would be much more difficult to know if it is simply known or used in another country, but if it is patented or published then it would not be so difficult to findb. Printed publication

1. In re Klopfenstein (2004): slide show presentation that was displayed continuously at a convention and elsewhere for a few hours with no disclaimers

. Court found this to be a printed publication αsufficient to fall within § 102ß. Type of prior art that could be considered anticipatory may be dependent upon complexity of the invention and how informative the presentation is and whether this actually makes it accessible to the public∂. Factors of public accessibility: length of time it was on display, expertise of the target audience, existence (or lack thereof) of reasonable expectations that the material displayed would not be copied, and simplicity or ease with which the material displayed could have been copied.

I. “Only after considering and balancing these factors can we determine whether or not the Liu reference was sufficiently publicly accessible to be a ‘printed publication’ under § 102(b)”

2. The statutory phrase “printed publication” has been interpreted to mean that before the critical date the reference must have been sufficiently accessible to the public interested in the art; dissemination and public accessibility are the keys to the legal determination whether a prior art reference was “published.”

c. Patented1. When you’re using a patent to anticipate someone else’s work, usually you’re using it as a printed publication

. Not that the thing is a patent itself, but that theα document actually claims exclusive rights to someone else in the very same thing that you are seeking a patent on

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2. Reeves Bros. v. US Laminating (1966): difference between being patented and what is a printed publication3. If nothing specifically in the disclosure, can still act as prior art under “patented” instead of “printed publication”

v. “…before the invention thereof by the applicant for patent”a. Not necessarily when the application is filed, but when the invention occurs

B. The Anticipation Standardi. If an invention is not new, it is said to be anticipated by the prior art

a. Prior to the inventor’s date of invention, did someone other than the inventor, who is not seeking a patent, previously know, disclose, or invent what the inventor is seeking to patent?

ii. Anticipation is a question of factiii. To anticipate a claim, a prior art reference must disclose every limitation of the claimed invention, either explicitly or inherently

a. The prior art must also be enabled1. This is a lesser enablement standard than enablement in disclosure

. Only has to teach the PHOSITA α how to make it, not necessary to teach them how to use it

iv. Atlas Powder v. IRECO (1999): explosive compositions; court is looking at “sufficient aeration is entrapped to enhance sensitivity to a substantial degree”; prior art shows that the compositions are in overlapping ranges of ingredients that already exist in the prior art; there is no discussion of “sufficient aeration” in the prior art

a. Court finds that this is anticipated as it is inherent in the prior art

1. Know if something is inherent in the sense that the missing descriptive matter would have to necessarily occur for the claim to act as described

. “To establish inherency, the extrinsic evidenceα ‘must make clear that the missing descriptive matter is necessarily present in the thing described in the reference… Inherency, however, may not be established by probabilities or possibilities. The mere fact that a certain thing may result from a given set of circumstances is not sufficient.” In re Robertson (1999)

2. “If the prior art reference does not expressly set forth a particular element of the claim, that reference still may anticipate if that element is ‘inherent’ in its disclosure.”

C. Priority of Invention

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i. 102(g) [A person shall be entitled to a patent unless-]“(1) during the course of an interference … another inventor involved therein establishes, … that before such person’s invention thereof the invention was made by such other inventor and not abandoned, suppressed, or concealed, or(2) 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.”

a. (1) Interference proceedings1. Two people trying to file a patent application on the same thing relatively at the same time2. Director can declare an interference and determine who invented it first3. Will disappear with the reforms

b. (2) Another inventor in this country had invented it first1. Prior art provision that could be used to invalidate patents2. Lays out the framework for a priority analysis3. Creates a bar on the patentee who is not first4. Basic idea of conception

ii. Thomson v. Quixote (1999): CDs at issue; Thomson’s date of invention is 1972; Defendant’s claim that it had been made by another inventor but never patented it

a. Testimony of two people was not corroborated, but the court found this to be unnecessary as these two were not parties to the case

1. Corroboration is usually required because of a concern of perjury or exaggeration and may be liable for patent infringement or not be awarded the patent2. This is a rare circumstance around inventorship where corroboration is not needed

. Does not rise to the level of self-interest αrequired to justify application of the corroboration ruleß. Will not hold a third party interest to the same corroboration requirement that would be required for one who had an interest in the litigation

b. This subsection “permit[s] qualifying art to invalidate a patent claim even if the same art may not qualify as prior art under other subsection of § 102.”

1. Have both (a) and (g) because

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. (a) has a notion of public accessibility that (g) αdoes not seem to haveß. (g) only applies to inventions made in this country∂. (g) is a lot harder to use; the PTO will never be finding this art

I. Showing who was the first inventor is not the easiest thing to show

iii. Reduction to Practicea. First to RTP is first inventor

1. Are exceptions. Must demonstrate reasonable diligence α

between conception and reduction to practice; if conception date 1 is before conception date 2, and reasonable diligence occurs then RTP 1 can be after RTP 2

I. Must show reasonable diligence from the second conception date to your RTP date

b. Elements1. Practiced an embodiment or filed a patent application with all elements, and2. Appreciated that the invention worked for its intended purpose

c. Actual reduction to practice is when someone makes or practices an embodiment of the invention

iv. Conceptiona. A definite and permanent idea of the complete and operative invention, as it is hereafter to be applied in practice

1. It is complete only when the idea is so clearly defined in the inventor’s mind that only ordinary skill would be necessary to reduce the invention to practice, without extensive research or experimentation (Pfaff)

v. Presumption that filing date is the invention datea. Often applicant will want to convince the PTO of an earlier date of invention

1. Rule 131 (37 CFR 131) Declaration. File a paper, swear an oathα

ß. Paper provides evidence of a prior RTP, or a prior conception and diligence to RTP or filing

2. Swearing behind (with Rule 131). Will want to prove that conception was prior α

to the invalidating prior artb. When inventive activity occurs overseas, can only rely on filing date to establish priority (Fujikawa)

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vi. Griffith v. Kanamaru (1987): was found that Griffith was not reasonably diligent when he waited for the graduate student to arrive because he had promised her the work to her and Cornell had required he obtain outside funding

a. Federal Circuit refuses to allow Universities to be held to a different standard even if this is arguably how they operate

vii. Fujikawa v. Wattanasin (1996): looking for suppression or concealment; not shown here

a. Factual analysis1. 15-17 months will generally not make a case for suppression, concealment or abandonment2. There is no amount of time that can make for this on its own

b. Question of law that is reviewed de novo1. Case law shows two types of suppression and concealment

. Inventor deliberately suppresses or conceals αhis invention

I. Situations in which an inventor designedly, and with the view of applying it indefinitely and exclusively for his own profit, withholds his invention from the public.II. requires more than just the passage of time, but also evidence that the inventor intentionally delayed filing in order to prolong the period between RTP and filing

ß. A legal inference of suppression or concealment is drawn based on “too long” a delay in filing a patent application

D. 102(e) More “Secret” Prior Arti. “A person shall be entitled to a patent unless-(e) the invention was described in

(1) an application for patent, published under section 122(b), by another filed in the United States before the invention by the applicant for patent or

(2) a patent granted on an application for patent by another filed in the United States before the invention by the applicant for patent…”ii. A backdating provision: the issued patent becomes prior art the date the application was filed, not the date it issuesiii. Purpose of this provision

a. Addresses the status of filed applicationsb. Don’t know what is in another person’s patent application and this statute explains how you treat it

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iv. Alexander Milburn Co. v. Davis Bournonville (1926): improvement in welding and cutting apparatus; C filed application; W filed an application; C’s patent issued; W’s patent issued; C’s application gave a complete and adequate description of W’s invention, but did not claim it

a. If you file an application and it eventually is issued, it is treated as prior art from the date the application is filedb. Demonstrates another class of secret prior art that can invalidate your patent

VII. Statutory Bars § 102A. “A person shall be entitled to a patent unless-

(b) 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….”

i. “Patented” and “printed publication” have the same meaning as in § 102(a)

B. Pennock v. Dialogue (1829): kept secret, but in use, how to make a firehose for about 20 years; now go to the PTO to claim exclusivity and the Supreme Court finds this is not okay

i. Don’t want to extend the patent terms longer than the statute allowsii. Don’t want to remove things from the public domain that have been available for useiii. People may want to invest in competing because there has not been a patent issued on it

C. Grace periodi. More than one year to the date of application

a. Not concerned with the date of inventionb. The critical date

D. On sale bari. “on sale in this country”ii. Determine the critical date and look for an offer for sale before the critical dateiii. Pfaff v. Wells (1998): computer chip socket; had prepared detailed engineering drawings that described the design, the dimensions, and the materials that would be used in making the socket and sent them to a manufacturer in February or March of 1981 in response to a request to come up with a new device; April 8, 1981 TI provided Pfaff with a written confirmation of a previously placed purchase order; critical date is April 19, 1981

a. Court defined criteria for on sale bar to be triggered1. The product must be subject of a commercial offer for sale

. Definition is the same as used in contractsα2. Invention must be ready for patenting

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. Satisfied either by proof of reduction to αpractice before the critical dateß. Or by proof that prior to the critical date the inventor had prepared drawings or other descriptions of the invention that were sufficiently specific to enable a person skilled in the art to practice the invention

3. Court finds that the “substantially complete” test that had previously been used was not a clear enough test as it was determined by looking at the totality of the circumstances

E. In public usei. “in public use…in this country”ii. Egbert v. Lippman (1881): corset springs; gave the invention to a woman who later became his wife; only one other witness saw it

a. Court found that even with so few knowing of the invention, it was considered to be in public use under the statute

1. The inventor had given it to someone else and was not in the inventor’s control at that point2. Public use in the idea that he does not have enough control over the invention

b. Policy behind such a strict reading of the statute1. Follows along the lines of extending the monopoly of your patent2. Shouldn’t sleep on your rights3. Shouldn’t wait until it becomes profitable to try to patent your invention4. Patent system encourages disclosure

iii. Motionless Keyboard v. Microsoft (2007): ergonomic keyboard; no public use because it never actually functioned

a. People had seen the device, but it was never plugged into a computer

1. The typing tester had signed an NDA the same day she did the test and there is no evidence of any subsequent use

b. The invention must actually be used, not just a fully enabled disclosure of the invention

1. Still don’t want to show it around in public as it could later be invented by others or disclosed in a publication2. The invention must be used in public for its intended purpose to be a public use

c. “Public use includes ‘any [public] use of [the claimed] invention by a person other than the inventor who is under no limitation, restriction, or obligation of secrecy to the inventor.’”

iv. Metallizing Engineering (1946): inventor develops process; keeps it secret but sells its output to any consumer who will pay

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a. This is not considered public useF. Experimental Use Exception

i. A patentee may rebut a finding of public use by asserting he was engaged in experimental use

a. An argument often employed by patentees in the face of a public-use or on-sale allegationb. An invention cannot be in public use or on-sale in the legal sense of these terms if it were subject to ongoing experimentation

ii. City of Elizabeth v. American Nicholson (1877): wooden pavement; alleged public use is that the inventor set up the pavement in public to determine its durability; plaintiff asserts that he was still experimenting to be sure that it worked for its purpose

a. How to separate invalidating public use versus experimentation

1. The inventor here is checking into the road every day2. Want the experimentation to be directed toward the claims3. If you make any changes to it in response to the experimentation4. Objective knowledge that it is an experiment5. Requisite amount of control over the use

. Tα he more control the inventor is keeping over the invention, the more likely we would consider it an experiment

6. Evidence of internal records/documentation of how the invention is functioning7. The nature of the invention

. Iα f it needed to be tested by the public8. The fact that it is only in one location, not used all over

b. Court distinguishes this case from Egbert in that it was continually under the inventor’s control while the corset was out of the inventor’s control

iii. Purpose of the exceptiona. Want inventions that actually work, not just ideas

1. Society benefits more from more thought out ideasb. Makes economic sense

1. Allows smarter inventors to experiment with lower costs and more efficiency

iv. Electromotive Division of GM v. General Electric Co. (2005): compressor bearings in diesel locomotive engines; have in-house testing and then field testing that consisted of selling the product to someone and then if they would inspect it; if anything breaks down, the consumer is not required to return it; had another manufacturer make them based on specifications sent to them by EMD; also sold

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some backup bearings, not in the locomotives; charged every single circumstance

a. Look to the commerciality of the useb. Court gives 13 factors, but says they are non-exhaustive and need not necessarily all apply

1. Control, customer awareness, and some sort of record keeping are most important

. Record keeping doesn’t have a lot of force in αthis analysis because it is difficult to see the specific invention

2. The necessity for public testing3. The amount of control over the experiment retained by the inventor4. The nature of the invention5. The length of the test period6. Whether payment was made7. Whether there was a secrecy obligation8. Who conducted the experiment9. Whether records of the experiment were kept10. The degree of commercial exploitation during testing11. Whether the invention reasonably requires evaluation under actual conditions of use12. Whether testing was systematically performed13. Whether the inventor continually monitored the invention during testing14. The nature of the contacts made with potential customers

G. Third Party Public Use or Salei. Third-party actions can defeat patent rights, even if the third party has no legal relationship to the inventor

i. A statutory bar will be found when the invention was obtained through improper means or arguably unethical commercial behavior

ii. Evans Cooling Systems, Inc. v. General Motors (1997): GM basically told the inventor after his pitch that they would steal the invention; GM sold it to a third party and asserts that activities of third parties uninvolved in the alleged misappropriation raise the statutory bar, even if those activities are instigated by the one who allegedly misappropriated the invention

a. The court declines to create an exception to the on sale bar for those instances in which a third party misappropriates the invention and later places the invention on sale or causes an innocent third party to place the invention on saleb. Seems harsh, but could have protected himself by filing a patent earlier

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1. Not without relief because can still obtain relief for misappropriation of a trade secret2. If the law were the other way, the public would have their expectations taken away from them and would then be infringers

VIII. Nonobviousness § 103A. “(a) A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, 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.”

i. Is a legal requirement to create some space between what already is in the public domain and what is patentable because they do not represent big enough technological developments than what has come before

B. Asks whether the claimed invention would have been obvious to a person of ordinary skill in the art at the time the claimed invention was made

i. Demands that the claimed invention be sufficiently removed from the prior art, meaning in most cases the invention is an adequate leap forwardii. Seeks to both prevent the issuance of a patent that would withdraw “what is already known” and to “weed out those inventions which would not be disclosed or devised but for the inducement of a patent.”

C. History and Policyi. Judge-made law

a. Hotchkiss v. Greenwood (1851): clay or porcelain doorknob instead of wood or metal; only thing that was new was the material; a combination of existing things, but put together in a way that hadn’t been done before

1. The Court found “there was an absence of that degree and skill and ingenuity, which constitute essential elements of every invention”; the improvement was “that of a skilled mechanic, not that of an inventor”2. Dissent: just had to be novel and useful; was not impressed with the requirement of needing to ingenuity

. “Seems open to great looseness or uncertaintyα in practice”

ii. Developed over the next 100 yearsa. Harries v. Air King (1950): “The question whether there is patentable invention is as fugitive, impalpable, wayward, and vague a phantom as exists in the whole paraphernalia of legal concepts.”b. Cuno Engineering Corp. v. Automatic Devices Corp. (1941): “the principle of the Hotchkiss case is that to be patentable a

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new device, however useful it may be, must reveal the flash of creative genius not merely the skill of the calling.”

1. After this holding, everyone freaked out. If you had to have a flash of creative genius α

then certain patents may not be taken outß. Corporations get more patents than anyone else and most of them are expensive, incremental improvements, not “flashes of genius”

I. Pharmaceutical industry most extremec. Jungerson v. Ostby & Barton Co. (1949): “…for striking them down so that the only patent that is valid is one which this Court has not been able to get its hands on.”d. Great Atlantic & Pacific Tea Co. v. Supermarket Equipment (1950): supermarket belt; “The invention, to justify a patent, had to serve the ends of science – to push back the frontiers of chemistry, physics, and the like; to make a distinctive contribution to scientific knowledge…. The Constitution never sanctioned the patenting of gadgets.”

1. Made people freak out even more. This is an extremely high bar and suggests α

that there are no fundamental patents available2. Seemed to create a catch-22 because the greater the flash of genius that occurred would be outside the scope of patentable material

iii. 1952 Patent Acta. Led to the current legislation and codifies nonobviousness in § 103

1. Although not anticipated or statutorily barred, you may still not be able to get a patent if the differences form the prior art are obvious to a PHOSITA2. No longer an “invention” requirement, but a “nonobvious” requirement

. Perhaps adds some clarity and structure to αthings at least in talking about the requirement

3. “Patentability shall not be negatived by the manner in which the invention was made”

. Specifically against the “flash of genius” in αCunoß. It doesn’t matter how you come up with your invention

iv. 1966 “Trilogy”: Graham, Calmar, Adamsv. Sakraida v. AG Pro “Dairy Establishment” (1976): great big pot of water dumped on the floor of dairy barn and flushed the waste away

a. Court seems to backtrack a bit from Congress’ goals with § 103 and requires synergy

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1. “We cannot agree that the combination of these old elements to produce an abrupt release of water directly on the barn floor from storage tanks or pools can properly be characterized as synergistic, that is ‘resulting in an effect greater than the sum of the several effects taken separately.’ Rather, this patent simply arranges old elements with each performing the same function it had been known to perform, although perhaps producing a more striking result than in previous combinations. Such combinations are not patentable under standards appropriate for a combination patent.”

vi. 1982 Federal Circuit Createda. Pretty much every patent is a combination patentb. 2+2 can never equal 5

1. No synergyc. Develop the law to protect against hindsight biasd. Approach

1. Amplify the significance of “secondary considerations”

. α Arkie Lures (1997): pounds in secondary considerations; makes them like a fourth factor to the Graham factorsß. Iron Grip (2004): case of developing jurisprudence and defining what is required for secondary considerations

2. Cabin the scope of available prior art. Define the scopeα

ß. If it’s 102 art, then it’s 103 art + analogous artI. 102 art

A. (a) “known or used” before inventionB. (b) “known or used or on sale or public use” >1 year before applicationC. (e) prior application that publishes

I. Logically secret prior artD. (f) derivationE. (g) Prior invention by another

I. Logically secret prior artII. Analogous art if it (A and B)

A. Pertains to the field of invention; or B. Pertains to the problem to be solved

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C. Limiting requirementI. Not true of anticipationII. Looking where a PHOSITA would look

∂. The obviousness problemI. All § 102 art that is pertinent to the field of endeavor or pertinent to the problem to be solved is deemed to be known by the ordinarily skilled artisanII. All such art can be combined to meet the limitations of a patent claim to make out the argument that the claim is invalid for obviousness

3. Police the combining of prior art. “Obvious at the time the invention was made α

to a person having ordinary skill in the art” (§ 103(a))

I. In re Winslow (1966): appeal that hindsight reconstruction has been used to invalidate the claim as obvious

A. Court disagrees and believes the approach is to imagine the inventor sitting with all the prior art around them and taking from each an idea to combine the obvious invention

i. Develops the law to try, at least, to avoid hindsight reconstruction

II. In re Dembiczak (1999): jack-o-lantern trash bags

A. Federal Circuit said the PTO has to explain why certain prior art is combined and why a person would find it obvious to do so

i. Requires “a showing of the teaching[, suggestion,] or motivation to combine prior art references”

a. “We have noted that evidence of a suggestion, teaching, or motivation to combine may flow from the prior art references

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themselves, the knowledge of one of ordinary skill in the art, or, in some cases, from the nature of the problem to be solved.”

ii. The contention is that the patent examiner is not necessarily a person of ordinary skill in the art

B. Power struggle between the PTO and the Federal Circuit and who has discretion over § 103

III. KSR v. Teleflex (2007): adjustable pedal with an electronic sensor on the pedal; prior art had adjustable brake pedals with mechanical design and electronic sensors, but no one had combined them

A. Supreme Court changes the “teaching, suggestion, or motivation” test to a “reason to combine” because it finds the latter to be too strictly applied

I. Discusses predictability; if obvious to try with a reasonable expectation of succeeding then it is obvious under 103

B. Doesn’t seem to actually change the test; account for predictability a bit more than in the past

I. Perhaps the PHOSITA has changed slightly; allow for a bit more discretion and don’t apply the test so strictly

D. Why bother with obviousness?i. Arguably, it is unnecessary: if an invention is a small advance, i.e., it is trivial, or frivolous, there is either a close substitute, or no market for the invention, so novelty and utility should suffice as patentability screensii. Perhaps limits the number of patents issued thereby creating an economic benefit for consumers

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iii. Lowers chance of litigation and therefore lowers costsa. More infringement claims would arise if patents issued for only trivial advancements

iv. May increase incentives for patenting because it creates a bit of a shield around the patent that has been issued

a. Competitors will not be able to simply make a trivial improvement

E. Policy opinions surrounding the nonobvious standardi. The patent system should be mostly concerned with marginal inventors

a. Some people just like to invent and others who are not interested in inventing at all, but then there is a group in between these two who will only invent if there exists the right incentive structure

ii. Nonobviousness should measure the uncertainty of an inventiona. A low risk invention should not be granted a patent because you are already encouraged to do this without the patent systemb. The right amount of uncertainty is when it is more likely than not that the inventor will not succeed in making the inventionc. Measure of value of what the inventors are giving us with their invention

iii. The nonobviousness standard has little impact on the incentive to inventiv. Nonobviousness doctrine has a bigger impact on which projects get developed than which projects are attempted (little impact on incentive to invent)v. “Economic Nonobviousness”

a. The nonobviousness bar should be lowered for high cost research projects

F. Standards for obviousnessi. Graham v. John Deere Co. (1966): advance is that you can flex around the hinge plate because the shank is now below the hinge plate

a. First obvious case the Supreme Court took after the 1952 Patent Actb. Obviousness a question of law

1. A nebulous concept that juries may have a difficult time understanding2. Will create better uniformity3. Appeals court can review it de novo4. Interpreting a statute is generally the work of judges, not juries5. Suggested that this is a constitutional requirement

c. Three factors (factual questions)1. Scope and content of the prior art

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2. Difference between the prior art and the claims at issue3. Level of ordinary skill in the pertinent art

. If you are the patentee then you want it to be αestablished as low, so that it remains valid in the face of an obviousness challenge

d. Secondary considerations (factual questions)1. Commercial success

. Nexus requirement for commercial successα2. Long felt, but unsolved needs

. Mere passage of time is not enough to show a αlong-felt, unsolved need

3. Failure of others4. Copying

. Requires replication of a specific product and αdirect evidence

5. Skepticism or teaching away6. Post-invention praise7. Acquiescence (licensing of the invention)

e. Cautioned to avoid hindsight, but no guidance as to how1. Same in Calmar, which followed

ii. US v. Adams (1966): water-activated battery; inventor made it in his home and then presented it to the Army and Navy; disregard it at first, but then use it during WWII and don’t pay him for it

a. First time a patentee has won at the Supreme Court in 60 years

1. Court finds that the prior art taught away from the invention2. Previous inventors had failed3. Army and Navy acted very skeptical

b. Secondary considerations play a large role in this case1. “As we have seen, the operating characteristics of the Adams battery have been shown to have been unexpected… to combine them as did Adams required that a person reasonably skilled in the prior art must ignore that (1) batteries which continued to operate on an open circuit and which heated in normal use were not practical; and (2) water-activated batteries were successful only when combined with electrolytes detrimental to the use of magnesium. These long-accepted factors, when taken together, would, we believe, deter any investigation into such a combination as is used by Adams.”

G. Secondary considerations

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i. Arkie Lures (1997): secondary considerations need to be taken as part of the evidence in all cases, “not just when the decisionmaker remains in doubt.”

a. Almost like a 4th factorii. Rational of strengthening the use of secondary factors

a. Give us some factors or a framework to describe evidence to combat the notion of hindsight being 20-20 and so obviousb. A bit more objective and therefore perhaps aid in the traditional legal processc. Useful for policy indications

iii. Iron Grip Barbell Co. v. USA Sports (2004): three-grip weight; found invalid as obvious

a. Court looks at secondary considerations of commercial success, long-felt need, and copying

1. Licenses are the evidence of commercial success. Court finds this potentially just a cheap α

alternative to litigation for those who purchased the licenses and therefore does not carry much weightß. A license could be dependent upon the merits and not just fear of litigation when…

I. More expensive licenseII. Sought after, not just a threatIII. Alone and not just part of a bundle of productsIV. If there were other weights without patents and yet still chose to purchase this license

2. Long-felt but unsolved needs. Iα ron Grip’s argument is that there haven’t

been other three grip plates in a long timeI. The courts finds this is not enough to demonstrate a long-felt need

ß. If can generate some evidence of what people were thinking beforehand

I. Need to make technical argumentsA. There was a problem and the others failed in resolving these problems

3. Copying. α Iron Grip argues that there is an infringer and

therefore there is a copierI. Court finds that copying requires replication of a specific product; not just an alleged infringer

b. Central issue

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1. Nexus requirement: is there a nexus between the claimed invention and the relevant secondary consideration

. α Many rules spin off of the court’s attempt to make this work togetherß. Applies to all secondary considerations

iv. Graham factors and secondary considerationsa. If do not fulfill the first three, but then show really strong secondary considerations, do not have to conclude that it is therefore obviousb. Arkie suggests that the court must take into account secondary considerations regardless of presence of Graham factorsc. Federal Circuit law is perhaps not exactly clear

1. But it appears if you reach a firm and convincing decision that the patent is obvious, you can do that, but cannot completely overturn2. They are supposed to be taken into account when there is a marginal case

IX. Made by the inventors § 116. InventorsA. “When an invention is made by two or more persons jointly, they shall apply for patent jointly and each make the required oath, except as otherwise provided in this title. 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.”i. Opens the door to a really broad definition of joint inventorsii. Hess v. ACS (1997): balloon angioplasty catheter; Drs did not know what material to use and were recommended to Hess who explained the material he was selling and gave suggestions about what would best fit their needs

a. ACS sued SciMed for patent infringement and they counterclaimed that the patent was invalid because Hess should have been designated as a joint inventorb. Court found he was acting as a salesman and contributed no part to the conception of the invention

1. “Conception is the touchstone of inventorship.”. Beyond conception, a purported inventor α

must show that he made a contribution to the claimed invention that is not insignificant in quality, when that contribution is measured against the dimension of the full invention, and did more than merely explain to the real

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inventors well-known concepts and/or the current state of the art.”

iii. Question of lawiv. BOP is on the person challenging inventorshipv. Need corroborating evidence to go with the joint inventor’s testimony that he should be recognized as suchvi. Remedy is invalidity of the entire patent

a. It is a patentability issue to put the right inventorsB. Judicial Correction of Inventorship

i. If it is a misjoinder error that was an honest mistake, or even with deception, it can be correctedii. If it is nonjoinder an honest mistake can be corrected, but a deceptive one cannot

C. Joint Inventioni. Gives a “tenants in common” right of ownership

a. Each has the right to license out the entire patent without the consent of the other inventorb. No accounting requiredc. However, cannot assert infringement against another without the joining of all owners of the patent

ii. Ethicon (1998): Choi allegedly contributed to two of 55 claims in the trocar patent; Yoon was the only named inventor; US Surgical obtained a license from Choi

a. Court found he should have been includedb. Choi cannot retroactively grant a license to absolve US Surgical a license to absolve them from infringement, but all owners of a patent must be joined in an infringement suit and Choi isn’t joined as a plaintiff

D. Employee Rightsi. Waterman v. Mackenzie (1891): exclusive licensees are said to have all substantial rights and can sue others for infringement

a. Three kinds of assignment1. The whole patent, comprising the exclusive right to make, use, and vend the invention throughout the United States

. Can sue in name of assignee aloneα2. An undivided part or share of that exclusive right

. Need joinder of the assignorα3. The exclusive right under the patent within and throughout a specified part of the United States

. Can sue in the name of the assignee aloneαb. Anything short of these three is a mere license

1. No right to sue at law in his own name for an infringement

ii. Filmtec: “An assignment, grant or conveyance shall be void as against any subsequent purchaser or mortgagee for a valuable

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consideration, without notice, unless it is recorded in the PTO within three months from its date or prior to the date of such subsequent purchase or mortgage”iii. US v. Dubilier Condenser (1933)

a. Shop rights: the rights of a shop-owner to nonexclusive licenseb. Basic default rules

1. Without a contract, if you are employed to invent an invention, then the employer owns it2. If you are employed to just generally do research and you come up with an invention, you own the invention

. But the owner has shop rightsα3. Have a job, but come up with an invention on your own time, you are owner of the invention

. Controversial whether contracts can be αwritten to broadly encompass these inventions as well

X. Utility § 101A. “useful” in § 101

i. Why do we care if it is useful?a. Constitution says that we can only give patents for something usefulb. Waste of PTO resources to have them examine things that don’t have any possibility of advancing civilizationc. Incentivize useful things

1. If were able to patent anything and let the market take care of it it may lessen the value of the patent system as a whole2. Non-useful patents could then anticipate useful patents that would have otherwise been beneficial and now cannot be patented

ii. Timinga. If a presently non-useful invention would later become useful and has already been patented, no one would ever continue the research to make it better

1. Want to be sure that people have invented enough before they file a patent application

iii. Problemsa. PTO may not understand the utility of an invention and reject it simply because they don’t know

iv. Serves as a gatekeeper function of allowing the denying of patents without giving much of a reasonv. Evaluated at the time of filing

B. Three typesi. Operable

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a. Operability is presumed and the PTO has the BOP to show reasonable doubt

1. Inherently unbelievable undertaking or2. Involves implausible scientific principles

. As outlined in MPEP § 2107.01αb. Want the patented invention to workc. Not really a problem for patent applicants

ii. Beneficiala. Justice Story was a big believer in that the market would resolve any invention that wasn’t actually worth anything

1. “All the law requires is, that the invention not be frivolous or injurious to the well-being, good policy, or sound morals of society.”

. Excluded things like contraceptives, gambling αmachines, means for poisoning people

b. Juicy Whip v. Orange Bang: basically got rid of the Judge Story standard

1. Defendant said they were unpatentable because they were deceptive

. Consumers think what they are getting is whatα is in the top, but really getting something that is mixed in real time from underneathß. Trial court agreed it was deceptive, but Fed Cir found that this was not how it was intended to act on patent applicants

I. PTO is not the place to decide what is moral and immoral

∂. Doctrine is not gone, but would need to be pretty extreme for it to be invoked

I. § 2182. Inventions relating to atomic weapons

A. Example of a subject matter exception

iii. Practicala. The one type most likely to lead to a rejection for utility purposesb. Brenner v. Manson (1966): process works well to produce the steroid, but the inventors don’t really know what the steroid does

1. Meets the operability and beneficial requirements2. Court finds the claim to utility is too general and does not know that there would be a specific real world result

. Need a specific benefit that could be given to αthe public in its current form

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I. It would actually only be useful for future studying and testing

A. Court found this wasn’t enough to warrant a patent

3. Dissent argues that in this industry it may be important to patent this type of work4. Many people would say that the Fed Cir is actually more lenient than is expressed in Brenner

c. In re Fisher (2005): listed things you could do with ESTs, but very generally

1. Needed to list what you could do with this EST, not just any2. Practical utility has to be specific and substantial

. Specific is what this invention can doαß. Substantial is not pre-textual utility

I. i.e. Asserting a utility that exists in general

A. Relative, qualitative significanceXI. Proper Subject Matter § 101. Inventions Patentable

A. “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.”

i. Four categories to the subject matter requirementa. “Process, machine, manufacture, or composition”

B. Problem Categoriesi. Biopatenting and Algorithms/Abstract Processesii. Why problem?

a. Worth a lot of moneyb. Basis of other inventions or processes (fundamental inventions)c. Ethically and morally may not want a person to have monopoly rightsd. Technologies are very important and developing quickly, perhaps faster than the law is

C. Biopatentingi. Living Organisms

a. Diamond v. Chakrabarty (1980): created a genetically modified bacteria that eats up oil to clean up oil spills

1. Claims at issue. Process of making bacteriaα

ß. Innoculum, Bacteria, & straw∂. Bacteria

I. This one is rejected because living things are not patentable subject matter

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2. Argument against patenting these things is that they are alive

. Further supported by Plant Variety Protectionα Act

3. “This is not to suggest that § 101 has no limits or that it embraces every discovery. The laws of nature, physical phenomena, and abstract ideas have been held not patentable.”

. “Thus a new mineral discovered in the earth αor a new plant found in the wild in not patentable subject matter.”

4. Court finds this is patentable subject matter under the law as written

. Congress does not need to specifically αauthorize something just because it is unanticipatedß. This is not something that the patentee simply discovered, naturally occurring in nature, but form his own ingenious∂. PVPA argument is meritless because the only reason the statute was added was because the knowledge of reproducing these plants changed and it was necessary to add a new category

b. Plant Patent Act1. Asexually reproducing plants

c. Plant Variety Protection Act1. For some set of particular plants and specifically excluded bacteria

. Indicates that Congress intended bacteria to αbe excluded from patentable subject matter

d. Can patent living things, but there are some push-backs on that

1. Must determine when it is sufficiently separated from its natural environment

. Recognizing that somewhere along the αcontinuum of separating something from its natural context, you have something that is qualitatively new and patentable

e. Gives general sense of Congress’ policy of encouraging liberal innovation; written broadly, not ambiguously

ii. Naturally Occurring ChemicalsD. Algorithms – Abstract Processes

i. Historical timelinea. Benson (1972) and Flook: patents directed to converting data and calculating alarm limit; not enough beyond the algorithms in these cases to allow this to be patentable

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1. Benson: Patents directed to converting binary coded decimals into binary code

. To a statutorily approved category (a αcomputer), but is run on basically every computer therefore the scope of this patent would be very largeß. Court finds this process to be not patentable subject matter∂. Treats it more like an abstract idea

I. “It is argued that a process patent must eight be tied to a particular machine or apparatus or must operate to change articles or materials to a ‘different state or thing.’ We do not hold.”II. “It is said that the decision precludes a patent for ay program servicing computer. We do not so hold.”

b. Diamond v. Diehr (1981): probably second most important Supreme Court case (after Chakrabarty); curing rubber by use of a machine

1. Supreme Court found this very easily to be patentable subject matter2. Abstrat ideas are not patentable, but when the mathematical formula is implemented and on the whole performs a function it is

. Also included the infamous “e.g., transforming αor reducing an article to a different state or thing”

3. Dissent (Stevens): believed that patents directed to computer programs should not be patentable

c. In re Alappat (1994): directed to anti-aliasing techniques (making the lines smoother)

1. Court recognizes that this is a machine that creates a useful, tangible result (the lines on the screen)

d. State Street (1999): claim is directed to a machine1. First discusses the patentable subject matter and whether it is an abstract idea2. Second part says that it cannot be patentable subject matter because it is a business method

. This is not true, there is no categorical αexception

e. AT&T v. Excel (1999): method claims directed toward managing a call plan

1. Practical utility applies to process claims as well2. Conflated the utility requirements with subject matter

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f. JEM: says you can get patents on plantsg. LabCorp: dismissed because it was improperly grantedh. Bilski: Fed Cir opinion is restrictive and then Supreme Court explained a more permissive point of view

1. 2008 – Fed Cir: method for hedging risks in a commodities transaction

. Finds the “useful, concrete, and tangible αresult” analysis is inadequate and the machine-or-transformation test is proper to applyß. Dissent said Supreme Court precedent had been misread

2. 2010 – Supreme Court. Congress intended the patent laws to have a α

large scopeß. M-or-T is not an exclusive test, but a helpful clue as to whether something falls within the patentable subject matter

I. Satisfying it is not dispositive∂. Says to look to old cases and analogize

I. Cannot have an express ruleø. It is not patentable because it is an abstract idea

I. But who knows what that is. “The term process means process, art, or π

method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.”

ii. Abstract Ideasiii. Computer Softwareiv. Business Models

XII. Leahy-Smith America Invents ActA. Enacted September 16, 2011B. Culminates more than six years of legislative effort to change the patent lawC. A series of effective dates depending on the issueD. New § 102. “Novelty: Prior Art—A person shall be entitled to a patent unless

(1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention; or

(2) the claimed invention was described in a patent issued [to another]… or in [another’s] application for patent published … [that] was effectively filed before the effective filing date of the claimed invention.”

i. Changes it to a first-to-file systema. “Was effectively filed before the effective filing date of the claimed invention”

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ii. Prior arta. Patented, printed publication, public use, on sale, otherwise available to the public, patent issued, application for patent published effectively filed

1. “Otherwise available to the public” is similar to “known or used by others” in the old 1022. Should expect identical terms to have the same meaning as they did under the old legislation

. Precedent should still be applicable for these αterms

iii. No more 102(g) because only if it’s before the effective filing datea. Timing issues have changed

1. Also gets rid of the abandonment bar. Likely only if the application was published or α

issued notE. Exceptions (102(b))

i. (1) Disclosures made 1 year or less(A) Any disclosure coming form the inventor(B) Any disclosure made by others after a disclosure coming

form the inventor(2) (A) First filer derived from second filer

(B) First filer filed after public disclosure by applicant(C) Subject matter in both filings is owned by a common owner

F. Incentive under the new law is to be the first to publicly disclosei. Now will swear back to an article and claim that it disclosed the invention rather than swearing back to the invention dateii. HOWEVER, what constitutes “disclosure” or “publicly disclosed”?

a. What is sufficient disclosure? How much of the disclosure will count as prior art?

G. Expected effectsi. Rush to the patent officeii. Potential consequences on innovation

a. Things may be less polished or finished by the time you need to file your application

1. Perhaps a surge of lower quality patents will be issued

b. Advantage for larger corporations1. Can file more quickly and simply churning out applications with low transaction costs2. Small inventors do not have the capital and resources to file as early3. Larger corporations may have the resources to file vague, not fully developed ideas and can set a bar date or use this as a prior publication of the disclosure while they develop their ideas

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iii. Perhaps will lower litigation costs because no longer need to prove date of invention, just show that you filed first

H. Best mode “§ 282(b)(3)(A) … except that the failure to disclose the best mode shall not be a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable”

i. Still exists in 112, but will not be a basis for invalidity, cancellation, or unenforceability

a. Therefore remains relevant for patent prosecution, but not litigation

1. But there is no sanction for making your patent unenforceable and therefore seems that the best mode requirement no longer exists

. Will be up to the PTO to determine how much αthis will be enforced

I. Assuming the “duty to disclose” remains the same, you may be disciplinedII. PTO has the power to access information from applicants; may start requesting best mode from applicants and is you fail to do so then your attorney’s license may be on the line

ii. Effective right nowiii. Likely got rid of it due to harmonization efforts

Patent Misuse and AntitrustI. Patent Misuse

A. Tying arrangementsi. License might have covenants in them that require the purchase of something not patented to allow use of the patented item

a. Law would have trouble with this because you are extending your monopoly beyond the scope of the patent

ii. Morton Salt Co. v. G.S. Suppiger Co. (1942): “tie-in” required use of a particular salt tablet to use the particular patented machine; Suppinger claims that Morton is making salt tablets that infringe on his machine; Morton brings defense that even if he is infringing, the patentee is doing something with his patent that is a misuse and therefore he should not be able to enforce his patent

a. Court agrees and using equitable arguments, dismisses the suitb. People consider this to be one of the dumbest Supreme Court opinions of all time

1. A licensee may find this to be a beneficial arrangement and want to enter into such agreements

. May be a better overall financial planαß. Perhaps work better and lead to fewer repairs

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∂. A way of price discrimination for people who use the invention a lot versus those who don’t

iii. In re Recombinant DNA: “tie-out”a. Licenses said if sold from any other source, then Genetec could cancel the license and they could therefore sue them for infringementb. Don’t have a per se rule; facts and circumstances analysis

B. Remedy is unenforceabilityi. Can later enforce if stop the tying arrangement

C. Criticisms of Morton case led to § 271(d)i. “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.”

a. (1) Supposed infringer would say that it was patent misuse1. Usually pointing to activity that was not infringing and so you looked like you were trying to expand your monopoly and therefore was misuse

b. (2) and (3) are the same idea or similarc. (4) Not required to licensed. (5) Most relevant to tying

1. Allowed to tie-in unless you have market power. Economically speaking, able to set priceα

2. Just because you have market power, doesn’t mean you can’t tie

. Still get judicial assessment of whether there αis misuseß. Still have to behave anti-competitively

3. Have to define the relevant market. Patentee would want to define it broadlyα

ß. Defined by experts (economists)

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ii. After reforms, there is no per se patent misuse for tyingD. Other license based restrictions

i. Limitsa. Limited to Field of use is okay

1. Mallinckrodt permits this2. Usually to a particular genus or technology

b. Limited to territory1. Okay under § 261

c. Extending time over which royalties are paid1. No under Brulotte2. Further case law says reasoning in Brulotte is wrong

. We don’t knowαii. Mallinckrodt v. Medipart (1992): radioactive or therapeutic material in aerosol mist; sell to hospitals for single use only; instead hospital sends them to Medipart, when they are reconditioned and sent back to the hospital for a second use

a. Hospital is directly infringing; Medipart is also a direct infringer perhaps because the hospital did not have title beyond the one use and therefore, they are not allowed to repairb. Medipart argues that any restriction on the use of the good is misuse

1. Court finds that patents are property and you can put any condition you want on any contract to use property so long as that restriction is not illegal

. Even if the restriction goes beyond the αexclusion right, still must be anticompetitiveß. If it is within the scope of the patent right, then it is enforceable

I. If it is beyond the scope, then need to look to see if there is anticompetitive behavior

c. Essentially authorizes the licensing of patented goods with conditions of use

iii. Brulotte v. Thys (1964): hop picker machine; the license required the payment of royalties beyond the expiration of the patent

a. Court finds that royalty payments cannot go beyond the expiration date of the patent due to leveraging theory and that it limits flexibility in contracting

iv. Scheiber v. Dolby (2002): gives a discussion as to why Brulotte is wrong

a. “The Supreme Court’s majority opinion reasoned that by extracting a promise to continue paying royalties after expiration of the patent, the patentee extends the patent beyond the term fixed in the patent statute and therefore in violation of the law. That is not true.”

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v. Licensing Restrictions and Patent Policya. The right to exclude often includes the right to include with conditionsb. There is only “one monopoly rent”

1. Notion is that the patentee can only obtain one maximum amount given the patent

c. Tying arrangements are often economically efficientII. Antitrust

A. The doctrines of patent misuse have begun to overlap antitrust as far as the kinds of conduct we are discussing

i. Market powerii. Egregious anticompetitive behavior

B. Illinois Tool Works Inc. v. Independent Ink (2006)i. There had been a line of cases that had said if there was a patent involved in an antitrust claim then could presume market power

a. This presumption appears to no longer be true if we look at the development of patent misuse

1. Supreme Court found that it makes no sense to keep this presumption in the antitrust realm if it had gone away in the patent misuse realm (which has a lesser punishment)

C. Noerr-Pennington Doctrinei. Consequence of antitrust lawsii. A general principle that invoking the machinery of government cannot be, by itself, a violation of antitrust lawsiii. Can lose this protection

a. Nobelpharma v. Implant (1998): antitrust claim involving a patent

1. Discusses Walker Process (1980). If you acquire a patent by fraud and use it in α

an egregious way, there can be an antitrust claimI. Don’t need market power

b. Professional Real Estate Investors (1993)1. Patent suit is objectively baseless2. Suit is an attempt to use governments processes as an anticompetitive weapon to interfere with competitors’ business relationships

c. C.R. Bard (Predatory Innovation) (1998): company obtained a new patent for a part of a device that it sells; changed the needle and got a patent; competitors said they did this only as an anticompetitive move and it was found to create an antitrust claim

1. Antitrust claim possible where a patentee innovates; gets a new patent; which it enforces to combat competition in the given market

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D. In re Independent Services (2000): Xerox decided would not sell replacement parts to repairmen and they brought an antitrust suit because this would cause them to go out of business

i. Court found this to be okaya. Presents none of the problems we’ve discussed and you have a right to refuse to sell

III. General Rule: a patentee can deploy its patents almost any way it wantsA. Problems will arise when

i. Patentee has market power; andii. is engaging in pretty egregious anticompetitive behavior

B. In such cases, you may have a misuse claim and/or an antitrust claim

EnforcementI. Structure of the patent system

A. Administrative agency (USPTO) that evaluates patentabilityi. Part of the Department of Commerceii. Examiners (broken into different departments by subject matter) that examine patent applications by applying the substantive law of patentability to the applications

a. Most are not lawyersB. Facts & Figures

i. Approximately 6242 patent examinersii. 2010: approximately 520,277 applications filediii. 2006: approximately 244, 341 patents issuediv. Over 1,000,000 pending applications

a. Average pendency is about 31 months, but a lot of variationv. Average cost of prosecution is about $10,000, but a lot of variation

II. The patent documentA. Main functions of the patent

i. Establishes Boundaries of the right to excludeii. Makes technological disclosures of the invention

B. First page has a lot of information because it gives you an idea of whether you need to proceed and look through it in its entirety

i. Filing date a. Date it was filed with the patent office; priority date

ii. Classificationsa. Related to the Art Units that examine the application

iii. Field of Searcha. Subject matter areas that the PTO searched in connection with the patent

iv. Prior art referencesa. References Cited

1. Patents that the examiner finds relevant in connection with this application

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b. Other Publications1. Non-patent articles cited in connection with the issuance of this patent

vi. Inventors and assigneesvii. Abstract

a. Brief description of the inventionC. Drawings

i. Not required, but is common for there to be someD. Specification

i. Written description of the inventionii. Technical Fieldiii. Description of Prior Artiv. Summaryv. Detailed Description of the Drawings/Preferred Embodiments

E. Claimsi. Define the property right and scope that a patentee has

a. Definitional, not directed to teaching how to make or useii. Every claim is an exclusive right to exclude someoneiii. Each claim is a single sentenceiv. Claim 1 is the broadest claim and then later add limitations to it

a. Funnel down with dependent claims: claim 1 + other things to narrow the patent

v. Supposed to “particularly point out and distinctly claim the invention.”vi. Claiming incentives

a. Public: clarity in what the patentee owns to be able to license it from them or create an invention that doesn’t infringeb. Patentee: broader claim gives you a greater right and can make more money

1. But can’t be too broad because it will not be valid if already has been claimed in the prior art2. Choose words that may be ambiguous or vague that can then have a narrow or broad meaning when litigation may arise later

vii. Invented by patent lawyers to separate out what was invented form what was in the prior art

III. Private enforcement systemA. PTO Decision ReviewedB. Market-based Reward

i. Up to the inventor to enforce the patent himselfii. If the invention is really great then you can get a good deal of money for it

a. If no one is willing to pay money for it then will not necessarily obtain a reward for owning a patent

C. Courts’ role

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i. Courts decide questions such as infringement, and can review PTO’s issued decisions

D. Patent Lifei. Prosecution

a. Spans from application filing to issue1. Application published 18 months after filing date, unless request not to

b. Negotiation with the PTO to allow claims (roughly 2-5 years)c. Possibility to continue prosecution with new applications and RCEs (request for continued examination)

ii. Appealsa. Can appeal within the PTO – Board of Patent Appeals and Interferencesb. Then to the District Court in DC or directly to the Federal Circuit

ii. Issue: marks date of enforcementa. After issues can have it reexamined and reissued with new technology arising and a change of claimb. Can just reissue if there is a mistake within a particular time windowc. Presumption of validity upon issuance by statute

iii. Term 20 years from filing datea. Used to be 17 years from issue

1. Change in 1995 was mainly to correspond to the TRIPS agreement: harmonization2. Also to protect against extending the patent prosecution period with vague patents to then issue when it was economically beneficial for you

DJ – declaratory judgmentIV. Claim Construction

A. Refers to the task of operationalizing the words of the claimi. Translating the words of a patent claim into a meaningful technological context for the purpose of determining, inter alia, infringement and validityii. Determines what the claims really mean so that we can use them in an analysis

a. Used in patentability, validity, and infringement analyses1. Patentability/Validity 2-step

. Define the invention, by properly interpreting αthe claims (i.e. perform claim construction)ß. Compare construed claims to the prior art (e.g., §§ 102, 103), or other parts of the patent document (§ 112) in view of the relevant doctrinal requirements

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B. “It is the ‘bedrock principle’ of patent law that ‘the claims of a patent define the invention to which the patentee is entitled the right to exclude.’” Phillips

i. Helps people to understand what is patented and what isn’ta. Gives notice to the scope of the claims to incentivize inventing around, to potential infringers, to licensees

1. Interpreting claims may be more difficult than reading the specification, which includes various embodiments and the prior art2. Using claims allows you to be more precise in avoiding the prior art

b. Creates a sense of definiteness to the scope of the patentc. Makes patent prosecution more efficient

C. Problems with using claims?i. Could be vague and ambiguous if too broad

a. Want the patent examiner to believe you have a relatively narrow set of claims to obtain the patent, but want the rest of the world to see it as really broad

ii. Could potentially obtain rights that are broader than what was actually invented

D. Why study claim construction?i. “To coin a phrase, the name of the game is claims” – Giles S. Richii. Single most dispositive issue in patent lawiii. Argued in virtually every caseiv. Often (always?) outcome determinative

E. Procedure of claim constructioni. Claim interpretation is solely for the judge (Markman)

a. Purely a legal question (Cybor Corp)b. Reviewed de novo on appeal including any allegedly fact based questions relating to claim construction (Cybor Corp)

1. The de novo standard has resulted in relatively high reversal rate of district court claim constructions2. Arguably the most significant and relevant patent law issue for district court judges

. Federal Circuit has begun to question the αwisdom of Cybor

3. Creates certainty and at least if it is changed by the Federal Circuit then do not have to go through the expense of trial all over again, but can be sure that this is the appropriate claim construction

ii. Markman hearinga. District court judges have broad discretion in how they structure the hearing

1. Given the determinative nature of claim construction, most courts opt to hold a pre-trial hearing, typically followed by the “winning” party filing summary judgment motions on validity and/or infringement

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iii. Markman v. Westview Instruments, Inc. (1996): “inventory” could mean inventory, clothes, or both; jury came back with infringement; judge reversed based on his claim construction; led to the issue whether judge or jury had power to interpret claims

a. “Claim construction is a mongrel practice”1. Both a question of law (document interpretation) and fact (technological facts with how the device works) through the eyes of the PHOSITA

b. For the judge, not the jury1. Better at interpreting patent claims than jurors

. In the practice of construction of written αdocuments therefore more likely to be right

I. Arguably, 12 people versus one may have a better chance of getting it right

ß. Patent interpretation may be analogized to either statutory or contract interpretation, but more of an animal of its owned

I. Typically likened more so to statutory interpretation (which is for judges)

2. Interpretation must be confined by the patent document and a judge would understand this

. Credibility determinations are not that big of aα deal in patent cases because it must make sense within the context of the patent document itself

I. Cannot simply bring in an expert just to say what you want him to say, but rather must be in relation to what is contained in the document

3. Uniformity of the same patent litigated in different courts4. Uniformity among the patent system and the application of stare decisis

. Makes the system more predictable and the αrules a bit clearer

iv. Cybor v. Fas Techs (1998): minority of Federal Circuit judges has suggested that there should be deference given to the district court judge’s decision

a. Hugely controversial decisionb. Found the standard of review to be de novo

1. “The Supreme Court endorsed this court’s role in providing national uniformity to the construction of a patent claim, a role that would be impeded if we were bound to give deference to a trial judge’s asserted factual determinations incident to claim construction.”2. Not required to give any deference to trial court’s construction of patent claims

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F. Canons of Claim Constructioni. Claims must be read in light of the specificationii. Claim limitations cannot be imported from the specification

a. Harmonization with (i) is biggest challenge of claim construction

iii. Different claims have different meanings (claim differentiation)iv. Words are presumed to have the same meaning across claimsv. Patentees can be their own lexicographervi. Claims should be construed in a way that covers the preferred embodimentvii. Patents should be construed to preserve their validity

a. Some say this is the dumbest canon of all time1. Implies that you can claim whatever you want and it will be fixed by the court2. This is for incredible circumstances only where all other tools have been used

G. How do you know what a claim means?i. Intrinsic evidence

a. Specification, but avoid importing limitationsb. Other claims and how they are different from the claim at issue

ii. Extrinsic evidencea. Dictionaries, technical dictionaries, expert opinion, file history, prior art, or objective literature, literature that is contemporary to the time of filing

iii. Phillips v. AWH Corp. (2005): modular wall assemblies; defendant’s theory that these baffles have to be at particular angles; claims say nothing about this, it comes from the specification

a. A few lines of precedent going into this case1. Procedural: order or process to how the claim language was interpreted

. Primary focus on “ordinary meaning” of claim αlanguageß. Specification only decisively useful if it provides a clear definition∂. Typical use of dictionaries, experts for “ordinary meaning”

2. Holistic: claim language essentially doesn’t mean very much; focus on the content, using the specification

. Weren’t that interested in being very αconsistent or clearß. Primary focus on “context” of the claim language, via inferences from the specification, prosecution history∂. Little interest in dictionaries, “plain meaning”

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b. Court finds that intrinsic evidence is better than extrinsic, but both may be used

1. Okay to use dictionaries, but don’t overuse them. α Texas Digital put too much emphasis on

extrinsic sourcesI. Improperly restricted the role of the specification in claim construction

ß. The specification and prosecution history is more important

2. If read this as a PHOSITA then the line between construing terms and importing limitations can be discerned

. Don’t use the specification to import claim αlimitations and confine the claims to just the embodiments of the specification

3. Attacked the proceduralists; do whatever you want as long as Fed Cir thinks you’re right

. It is the weight put on each of the sources that αis important, not the order in which they are appliedß. In reality, proceduralism is still used about 2/3 of the time

c. No real substantial change; still draft applications the way you always did before the decision

1. The weight suggested that greater vagueness can be used and then define those terms in the specification

H. Means-plus-function Claimsi. “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.” § 112, ¶ 6

a. An element can be claimed that it is simply a means of doing something

1. Must identify the structures in the specification that correspond to the function that is claimed

ii. Rulesa. The use of the word “means” triggers a presumption that § 112, ¶ 6 applies

1. Then must do a specification-based claim construction

b. If the word “means” is not used, the presumption is that § 112, ¶ 6 does not applyc. Either presumption can be overcome if the claim does/does not recite sufficient/adequate structure

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1. Claims that do not recite structure are § 112, ¶ 6 elements2. Claims that recite structure are not § 112, ¶ 6 elements

. The sufficiency of a structure is dependent αupon whether a PHOSITA would know what the structure does

d. If claim functionally, but do not link the function to a structure in the specification

1. It is not enabled and therefore invalide. If claim functionally but the court decides that § 112, ¶ 6 does not apply will not get the result you necessarily anticipated

1. Either invalid or some other unanticipated interpretation

iii. Statutorily authorizeda. 1952 Patent Act overruled the Supreme Court decision that you couldn’t claim in this wayb. A lot of litigation over this because it makes it more narrow and more likely to be allowed by the PTO

V. Infringement (§ 271. Infringement of Patent)A. Direct Infringement

i. “(a) except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the Untied States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent….”

a. Standard for infringement1. Infringement is established when an accused device or process contains, either literally or equivalently, each and every element of a properly construed claim.

ii. Literal infringementa. Taking every one of the limitations and see if we can literally read them onto the device

1. If all things are literally present then the infringer is literally infringing

b. Laramie Corp. v. Amron (1993): super soaker; every limitation or element must be present or there is no infringement as a matter of law; the chamber didn’t possess a feature that was claimed in the patented device; because the absence of even one element of a patent’s claim from the accused product means there can be no finding of literal infringement, it was not found to infringe

iii. Infringement by doctrine of equivalents

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a. The accused device or process must perform substantially the same function in substantially the same way to achieve substantially the same result (Graver Tank)b. Things in the device are close enough to limitations in the claim to satisfy the doctrine and infringe the patent

1. It is equivalent to what we see in the patent2. All of them can be equivalent, do not need any literal3. To further the incentives in the patent system

c. Will vary given the circumstances and we have to determine when there has been infringement even when the claims have not been literally violated

1. PTO doesn’t examine patents according to the DOE, it will only come up in litigation

d. Winans v. Denmead (1854): coal hopper shape1. Problem laid out in this case because not a literal infringer, but the law grapples with if they are close enough to find them as an infringer2. Limiting patents to their literal terms may conserve judicial resources, but is not necessarily the most efficient

. “The scope of the patent is not limited to its αliteral terms but instead embraces all equivalents to the claims described.”

e. Graver Tank v. Linde Air (1950): welding fluxes; claim was an alkaline earth metal + calcium fluoride; the accused infringer was using non-alkaline earth metal + calcium flouride

1. Goes through the rationale of DOE. To allow a potential infringer to escape α

infringement through imitation lacking every literal detail would make patent protection meaningless

I. “It would foster concealment rather than disclosure of inventions, which is one of the primary purposes of the patent system.”

2. “What constitutes equivalency must be determined against the context of the patent, the prior art, and the particular circumstances of the case”; not an absolute formula

. Must consider the purpose for which an αingredient is used in a patentß. The qualities it has when combined with the other ingredients∂. Function it was intended to perform

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ø. Whether a PHOSITA would have known of the interchangeability of an ingredient not contained in the patent with one that was

3. A finding of equivalence is a determination of fact. α No actual algorithm

f. Warner-Jenkinson v. Hilton Davis (1997): claimed pH of approximately 6.0 to 9.0; accused infringer used a pH of 5.0

1. First answers that the DOE survives the redrafting of the Patent Act in 19522. Must determine its scope; seems to have “taken on a life of its own, unbounded by the patent claims.”

. Apply DOE to individual elements of the claim,α not to the invention as a whole, because each element contained in a patent claim is deemed material to defining the scope of the patented invention

I. Use the all elements ruleII. “It is important to ensure that the application of the doctrine, even as to an individual element, is not allowed such broad play as to effectively eliminate that element in its entirety. So long as the doctrine of equivalents does not encroach beyond the limits just described, or beyond related limits to be discussed herein we are confident that the doctrine will not vitiate the central functions of the patent claims themselves.”

A. If you take the vitiation concept to the extreme, there would never be any DOEB. Vitiation theory

ß. Standard of equivalencyI. Triple Identity test

A. Focus on the function served by a particular claim elementB. The way the element serves that functionC. The result thus obtained by the element

II. Determined at the time of infringement

3. Comes up with rules to apply so that DOE shouldn’t apply

. Concerned with uncertainty and lack of αuniformity in application

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ß. If a judge can apply all equivalents or prosecution history estoppel there is no need to send the case to the jury

I. Will take it out of the jury’s hands and kill DOE if possible

g. Administrability Problems1. Legal limitations of the application of the DOE are to be left up to the court

B. Limitations on the DOEi. To make the claims work better and to add support for the notice function

a. Avoids the jury deciding on the application of the DOE because such application is found to be legally impossible

ii. Prosecution History Estoppela. Traditionally applies when a patentee attempts to acquire a claim scope during litigation that had been surrendered during prosecution

1. Rational of the difference between if made the claim originally then will not be precluded is that changing it puts you on notice that your patent does not cover that broad of a scope

. Wouldn’t make sense to say that you are only αnarrowly forced to claim something with the PTO, but then can later get it back in litigationß. May incentivize drafters to claim narrowly from the start; or rather discourage overclaiming

I. Want to claim as broadly as you can without having to amendII. Will fight a rejection instead of amending increase prosecution costs

b. Warner-Jenkinson: as applies to PHE1. PHE applies where an amendment is made to address an issue of prior art, or for a substantial reason related to patentability2. If there is no reason given for the amendment, the presumption (which may be overcome by the patentee) is that the amendment is for a substantial reason related to patentability, PHE applies and bars the application of the DOE as to that element

. BOP on the patentee to show another reasonα3. Did not explain what was meant by “substantial reason related to patentability” or what was surrendered if PHE applied

c. Patent Bar believed that the Federal Circuit had destroyed the patent system

1. Prosecution files became roadmaps to infringement

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. May lead to more calls to the examiner so no αrecord of what need to say or whether it is accepted

2. Negatively affected the relationship between the PTO and the Patent Bar

. Now applicants did not want to amend or αappeal and neither party was able to effectively do their job without the usual dance

d. Festo v. Shoketsu (2000)1. Any reason for amendment to patent claim that is related to patentability will give rise to PHE

. Any made to comply with the Patent Actα2. Voluntary amendments are treated same as other amendments for purpose of PHE3. When amendment creates PHE, there is no range of equivalents available for amended element4. “Unexplained” amendments are not entitled to any range of equivalents5. PHE barred any finding that magnetizable cylindrical sleeve and sealing ring elements of patents were infringed under the DOE

e. Festo (US 2002)1. A per se rule should not be applied

. Language is sometimes inadequate to fully αcapture the invention

2. Patentee bears the BOP to show that his amendment does not surrender the particular equivalent in question

. “A patentee’s decision to narrow his claims αthrough amendment may be presumed to be a general disclaimer of the territory between the original claim and the amended claim. There are some cases, however, where the amendment cannot reasonably be viewed as surrendering a particular equivalent.”ß. Can show that it was unforeseeable, only a tangential relationship to the equivalent in question, or some other reason to overcome the presumption that PHE bars a finding of equivalence

3. Generally presume that upon making an amendment, you have surrendered the territory between the original and amended claim

. Unless can show unforeseeable, tangential, αother reason

4. The patentee must show that at the time of the amendment one skilled in the art could not

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reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent

f. Argument estoppel works the same way, but done in an argument rather than amending the claims

1. Not as much law surrounding it. A bit murkier; no clear rules about bars, etcα

ß. Could lead to slightly more flexible application of estoppel than if you are dealing with an amendment

iii. Public Dedication Rulea. Subject matter disclosed in the patent specification, but not claimed, is dedicated to the publicb. Johnson & Johnston Associates (2002): metal back during a circuit board construction; claimed it would be aluminum; accused device uses steel; patentee had specifically disclosed steel in the specification, but not in the claims

1. Court found it was therefore dedicated to the public. Claims are what define the scope of the patentα

ß. Can’t just write everything in the specification and claim something that is narrow∂. If you want the right to exclude, it needs to written in the claims and given a chance to be examined by the PTO

2. Could potentially decrease disclosure and lead to not discussing any equivalents in the specification at all

iv. All Limitations and Specific Exclusion Rulea. Concern is that we do not want to give an assertive equivalent to vitiate the claim language itself (Vitiation theory)b. All limitations rule

1. Demands that each limitation of a patent claim is material to defining the scope of the patented invention and must not be vitiated or rendered meaningless

c. Specific exclusion rule1. The DOE is unavailable to capture subject matter than the claim specifically excludes

. “Majority of lengths” claimed would exclude α“minority of lengths”ß. “Inert gas” claimed would exclude “heated air”∂. “Elongated slot at top” claimed would exclude “slot within”ø. “Metallic” claimed would exclude “nonmetallic”

d. Scimed Life Systems (2001): two types of catheters: coaxial and dual lumen

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1. The specification was found to limit the embodiments to a coaxial catheter only

. Only pictures of coaxialαß. Say it is preferred and discusses disadvantages of dual catheters in the prior art∂. States “for all embodiments of the present invention” and “the present invention is”

2. Case demonstrates that the analysis really centers around claim construction rather than DOE3. This is a case of specification disclaimer, not all elements rule

. Isn’t too far from the all elements rule to αeliminate DOE analysis though

v. Prior Arta. Claim coverage under the DOE cannot extend to include subject matter that forms part of the prior artb. Wilson Sporting Goods Co. v. David Geoffrey & Associates (1990): golf balls; the dimples on the ball; defendant’s theory was that there was no principle difference between the accused ball and the prior art; they are simply practicing what is available to the public; the patent cannot exclude others from what it would have been unable to obtain during the prosecution

1. “The answer is that a patentee should not be able to obtain, under the DOE, coverage which he could not lawfully have obtained from the PTO by literal claims.”2. Suggests creating a hypothetical claim sufficient in scope to cover the accused product and see if it would have been allowed by the PTO over the prior art

. Problem: defendant would then argue that αthis is not the right hypothetical claim because patentee would simply come up with a claim that would read onto the accused device

I. Would have to replicate a patent prosecution through motion practice in trial court

C. Statutory Equivalents (Infringement on Means-Plus-Function Claim)i. Infringement of a means-plus-function claim is deemed literal infringement, but § 112, ¶ 6 provides a patentee to capture not only the means disclosed in the specification, but “equivalents thereof.”

a. But we still need to apply the DOE to these structures and equivalents

ii. Chiuminatta (1998): directed to concrete sawsa. Look at the structures in the specification that accompanied the claim and do an element-by-element analysis of the structures

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iii. Odetics v. Storage Corp. (1998): rotary means with the structures associated with such means in the specification identified as rod, gear, and bins

a. Must find the equivalent way and result of the claimed element

D. Indirect infringementi. There has to be a direct infringer somewhere

a. May not want to directly go after the public as a whole if they are the ones committing the direct infringementb. May be judgment proofc. Often used against generic pharmaceutical companies who encourage the combination of certain drugs that cause the public to be direct infringers

ii. Inducementa. “(b) Whoever actively induces infringement of a patent shall be liable as an infringer.”

1. Labels that there exists a statutory cause of action for inducing infringement, but does not give a definition as to what that is

b. Lucent v. Gateway (2009): method claim so you have to actually use the product to infringe; therefore the consumers are the direct infringers

1. Microsoft argues that there are substantial noninfringing uses for the program as a whole that do not incorporate the small portion that infringes

. This argument is troubling because then couldα always simply embed the infringing portion in the larger item to escape liability

2. Must have known or should have known that your actions would induce infringement

. Court finds that the evidence isn’t that strong, αbut it was not unreasonable for the jury to find that it existed

I. Tutorials and “help” were the evidence of inducement

ß. Notice that it says nowhere that Microsoft even knows about this patent

c. Summary1. Directed to joint infringement that does not fit in the contributory category (a catchall for joint infringement)2. Aiding and abetting infringement

. Providing a staple article with instruction on αhow to infringeß. Contract that requires infringing performance

3. As a rule: passive activity should be insufficient; high degree of mental state – intent or close to intent

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. In addition after Global Tech we will now haveα some serious arguments about whatever knowledge o the patent is

iii. Contributiona. “(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 noninfringing use, shall be liable as a contributory infringer.”

1. Articles cannot be multipurpose (non-staple article); knowledge is required; jurisdictional to the United States

. Litigation focuses on “substantial αnoninfringing use” and knowledge requirementß. Component or part manufacturers are targets

iv. Knowledge requirement of inducement and contributiona. Global Tech: someone knows there is a patent and situations where the person subjectively knew that a patent existed and willfully avoided finding out about it

1. Both contribution and inducement require that the indirect infringer “know” that the third party’s conduct constitutes infringement

. This means knowledge of the patentαß. Willful blindness as to the existence of the patent is “knowledge” of the patent

I. Subjective belief in high probability of the patentII. Deliberate actions to avoid learning of the fact

v. Export Activity § 271(f)(1)a. “Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such a manner as to actively induce the combination of such components 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.”

1. This provision is trying to prevent infringement beyond the US by exporting parts to be combined in an infringing way

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. Enacted in response to the α Deepsouth case, which held that direct infringement outside the US did not result in contributory infringement because there was no direct infringement within the Patent Act

b. Microsoft v. AT&T (2007): software was being sent overseas to then be combined outside of the United States, resulting in an infringing product

1. Court found that “Abstract softare code is an idea without physical embodiment, and as such, it does not match § 271(f)’s categorization: “components” amenable to “combination”2. Rationale

. Economic fears that software companies αwould move to foreign countriesß. Patent law stops at our borders and cannot extend into other countries

I. Limits the extraterritorial impact of our patent law

E. Determining infringementi. Define the invention by properly interpreting the claims

a. i.e. perform claim constructionii. Compare construed claims to the accused device, if each and every claim element (limitation) is present literally, or equivalently in the accused device, then there is infringement

F. Specific Termsi. “Comprising”: if each element in a claim is in the accused device, it is infringing even if it adds something new

a. Most patents use this as the transitional phraseii. “Consisting of”: only elements recited in the claim and nothing else

a. Therefore, if there is an added feature then it would not be infringingb. Will see this as a result of a patent attorney giving into the demands o the PTO and making some kind of compromise in order to get the patent issued

iii. “Consisting essentially of”: somewhere in the middle, not limited to only the elements recited in the claim

G. Repair versus Reconstructioni. Reconstruction is patent infringement; repair is not

a. A property owner has the right to repair his own property and therefore cannot be patent infringement

1. First Sale Doctrine: as soon as you purchase the good, you have the implied right to use that good and if it breaks, you have the right to fix it

ii. Jazz Photo v. ITC (2001): single-use cameras; sending the cameras overseas and removing the cover, cutting open the plastic casing,

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inserting new film, replacing the winding wheel, replacing the battery, resetting the counter, resealing the case, adding a new cardboard cover, and shipping them back for resale

a. The court finds this is repair for the cameras that were first sold in the US; for those who were originally sold overseas, the first sale doctrine was not activated and this is not repair

iii. Repair: “precedent has classified as repair the disassembly and cleaning of patented articles accompanied by replacement of unpatented parts that had become worn or spent, in order to preserve the utility for which the article was originally intended.”iv. “’Reconstruction’ precedent shows requires a more extensive rebuilding of the patented entity.”

a. Was held to apply when a patented drill bit was “recreated” by construction of an entirely new cutting tip after the existing cutting tip could no longer be resharpened and reused.”

v. Patent exhaustion underlies the dichotomy between repair and reconstruction

a. The unrestricted sale of a patented article, by or with the authority of the patentee, “exhausts” the patentee’s right to control further sale and use of that article by enforcing the patent under which it was first sold.

RemediesI. Terms of Enforcement

A. From the date of issue to the date of expirationi. The exception is that § 154 permits a reasonable royalty from the date of publication of a patent application to the date the application issues as a patent (assuming it does)

B. Beyond noninfringement, invalidity, unenforceability, etc., there are limits to a patentees ability to recover

i. Statute of limitations (6 years); § 286ii. Laches; general lawiii. Implied license; general law

a. Similar to easement by estoppeliv. Marking; § 287

II. Forms of reliefA. Pre-judgment relief in the form of damages from the date of infringement to the date of judgmentB. Possible preliminary injunction from the date of the lawsuit to the date of judgmentC. Post-judgment relief in the form of equity (injunction) or damages (compulsory license)D. Patents are considered a species of property and so many of the forms of relief reflect how much patents are like property

i. How are they like property?a. Right to excludeb. Able to sit on your rights if you so choose

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c. Something similar to right to alienated. Encourage investment and use with regard to the subject matter

1. Here, encourage people to invest and innovate including commercializing development

ii. How are they less like property?a. Don’t give an affirmative right to use itb. Most title in tangible property is usually equivalent of a fee interest, patents expirec. Intangible (intellectual) quality may make it more difficult to know the boundaries of the property right

1. Valuation may be harder; copying easier2. Might be a finite number of tangible property, but intangible could theoretically be limitless3. Use of tangible property is somewhat rivalrous

E. Property v. Liabilityi. Property

a. Strong right to excludeb. Injunctions

ii. Liabilitya. Right to collect moneyb. Damages

iii. Use property rules when the cost of negotiation is relatively low, but valuation is difficult

a. Using a property scheme is trying to encourage early private bargaining

1. Markets are better than courts at determining valuation

iv. Liability is used when negotiation is not able to occur beforehand (i.e. a car accident) and damages can be more easily assessed

a. Liability rules help us to overcome transaction (especially bargaining) costs

v. Which seems better?a. Valuation can be hard for judges or juries to decide and want commercial transactions to determine priceb. Injunction may be less satisfying when investments are made and infringement unknowingly occurs

vi. Patent system does a little bit of bothIII. Injunctive relief

A. § 283. Injunctioni. “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.”

B. Preliminary injunctionsi. Amazon.com v. Barnesandnoble.com (2001): one-click purchasing

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a. Got the injunction right before Thanksgiving giving Amazon a huge advantage

1. Case eventually settledb. Four factors in granting a preliminary injunction

1. Likelihood of success on the merits. P likely to prove infringementα

ß. P likely to withstand validity challenge2. Irreparable harm

. If likelihood of success, presumedα3. Balance of the hardships (P v D)

. Short shrift here, usually favors patenteeα4. Public interest

. With exception for important public needs, αpublic interest favors protecting incentive structure of patent system

ii. Patentee holds the BOP to prove that they should be able to obtain the preliminary injunction

a. Defendant must show that there is a substantial question that the patent is not infringed

iii. Form of review is abuse of discretioniv. Pretty rarely granted

C. Permanent Injunctionsi. eBay v. Mercexchange (2006): lower court found infringement, but decided not to issue an injunction given that Mercexahnge was not actually practicing any of the patents

a. Federal Circuit said this was not correct and set a categorical rule using factors similar to those in preliminary injunction analysis

1. Injunctions should normally issue except in instances implicating important issues of public health, safety, and welfare

b. Supreme Court rejects the establishment of a categorical rule and says that should try to balance factors instead, taking into account the principles of equity

1. “We hold only that the decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts, and that such discretion must be exercised consistent with traditional principles of equity, in patent disputes no less than in other cases governed by such standards.”

c. Pretty contested case and many industries felt that this change was a bad idea

1. Turns out there are slightly fewer injunctions granted, but still about 85% of cases where infringement is found

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. Perhaps has led to a bit more uncertainty and αmore appeals

ii. Now don’t know how Fed Cir will use four factorsa. Various opinions all agree on four factors

1. Kennedy seems concerned with non-practicers2. Roberts is limiting the discretion of the trial judge

. Must still be equitable rules taken into αaccount

ß. Should be influential, but not necessarily dispositive∂. Perhaps supplies the appellate court with some tools

3. Thomas’ opinion perhaps suggests that appellate courts should not readily be able to reverse the trial court decisions

IV. DamagesA. § 284. Damages

i. “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.

When the damages are not found by a jury, the court shall assess them. In either event the court may increase the damages up to three times the amount found or assessed. Increased damages under this paragraph shall not apply to provisional rights under section 154(d) of this title.

The court may receive expert testimony as an aid to the determination of damages or of what royalty would be reasonable under the circumstances.”

a. Minimum amount of “a reasonable royalty”b. “Damages adequate to compensate for the infringement” are a little bit larger than a reasonable royaltyc. Court may treble (triple) the damages

1. For willful infringement, we want some sort of punitive damages2. Look at the totality of the circumstances (Knorr-Bremse)3. Willful infringement does not entitle you to treble damages however

. If jury finds willful infringement, judge will αenhance damages about 40-50% of the timeß. If judge finds it, then much more likely

d. Can use expert testimony1. Is all about experts

B. Types of damagesi. Reasonable royalties

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a. If this is the only remedy then you are less likely to purchase a license because the worst that could happen would be you’d have to pay the licensing fee, best case, you get away with it and pay nothing

ii. Loss of profitsa. Based on profits lost by the patentee, not the profits made by the infringer

1. Purpose is to put the patentee in the position he would have been without the infringer in the market, not to disgorge the infringer of his profits

b. Elements (1 and 2 hardest to prove)1. Demand for patented good2. Absence of acceptable noninfringing substitutes

.α If there is a noninfringing substitute then will not be able to know if the patentee’s product would have been purchased instead

3. Ability to capture demand. Needs to be able to show that patentee has theα

ability to manufacture the “lost” units4. Amount of profit would have made

c. Patent erosion1. Patentee could theoretically charge a higher price if the infringer had not been in the market

C. Panguit v. Stahlin (1978)i. Suggests a hypothetical licensing negotiation

a. This is very speculativeii. Look at 15 Georgia-Pacific factors

a. Big picture is to go back and reconstruct the licensing negotiation that would have occurred and there are the factors that would apply to such a negotiation

1. Such as nature and scope of the license; royalties paid by licensee for similar products; royalties received by licensor from other licensees; etc.

iii. Lost profitsa. Use experts and economists to prove all of the elements

D. Lucent v. Gateway (2009)i. Before this case, the rule was that when the patented feature is the reason for the demand for the entire product, the product price can be the basis for the damages calculation

a. This case changes it a bit to the entire market value rule1. Still need to allocate the amount to be obtained by the patented feature to the entire good

. Can base your damages calculation on the costα of the market good in this way

E. Grain Processing v. American Maize-Products (1999)

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i. Main holding is that an acceptable noninfringing substitute doesn’t have to be available on the market at the time of infringement to be taken into consideration for determining lost profits

F. Rite-Hite v. Kelley (1995): device for securing the loading dock to the truck to avoid it from separating from the dock during the loading and unloading

i. Damages the patentee would have made but for the infringementa. When it can be done, this is the standard

1. Otherwise look at a reasonable royaltyii. Rite-Hite’s theory of damages is that they would have been able to sell not only the product covered by the patent, but another device as well, but for the infringing product

a. Court agrees; it’s not just the products that are covered by the patent, but other consequences of the infringement can be calculated into damages

1. Statute provides for “adequate to compensate”G. Knorr-Bremse: facts that demonstrate willful infringement

i. In conceptualizing patent infringement as a tort would find that you have an affirmative duty to avoid infringement if you know about the patent and would need to get an opinion from counsel saying that you do not infringe

a. If you didn’t or failed to disclose that you had, the judge was to instruct the jury that there is an adverse inference for the infringer

1. Disclosing the opinion waived the attorney-client privilege with regard to those communications and created a problem with disclosing

. Because of these problems, this case got rid of αthe adverse inferenceß. Using the opinion still led to a waiver to at least some extent

ii. No adverse inference results from an accused infringer eithera. Failing to obtain an opinion of counsel; orb. Having obtained an opinion of counsel, not disclosing said opinion

H. In re Seagate: cleaned up things in Knorr-Bremsei. Raised the bar from the sounding in negligence to that of objective recklessness

a. Willfulness is typically higher than negligenceii. Got rid of the duty of careiii. Doesn’t change much with regard to willful findingsiv. Waiver does not extend to trial counsel (only prosecution)v. There is no affirmative duty of care to avoid infringing; and so the standard for “willfulness” is raised from one sounding in negligence to one of “objective recklessness”

a. An objectively high risk that acts are infringing

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b. Patentee knew or should have known of the objectively high risk

I. Attorneys Feesi. § 285 “The court in exceptional cases may award reasonable attorney fees to the prevailing party.”

a. Some instances of willful infringementb. Vexatious litigation; baseless claims; litigation misconduct

DefensesI. Many ways to defend yourself

A. Invalidity of patentB. Patent scope – claims are not infringedC. Inequitable ConductD. Experimental Use

II. Inequitable ConductA. Can be a defense or counterclaimB. Examines an applicant’s behavior before the Patent Office during prosecutionC. Misrepresentations, failure to disclose, submission of false information

i. False declarations: i.e. never did experiments and obtained certain resultsii. Failure to disclose things that are material to patentability

D. Remedy: the entire patent becomes unenforceablei. As do those patents within the patent’s “family”ii. In theory, patent is still valid, but you are not able to assert it against anyone

E. Purpose of this doctrinei. To be an incentive for disclosure and efficiency

a. Especially for known prior artb. Discourages a waste of resources

ii. Discouraging fraud or fraud-like behaviora. Came from the doctrine of unclean hands

iii. Discourage patents being issued that are otherwise anticipated and/or obviousiv. To be sure that the art disclosed in the patent truly is innovativev. Encourage public confidence in the patent system

a. Having lost faith in the patent system, people may not respect valid patents and license out

vi. Don’t have to double check the information in the application if can presume that the applicants are telling the truthvii. May interfere with legitimate subsequent applicationsviii. Without it could lead to higher prices and more litigation if patents that otherwise would not be valid are given

F. Problemsi. Makes prosecution more expensive

a. Need to be more thorough and be sure that you don’t make a mistake

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ii. Really large consequencesiii. Yet another way to try to avoid liability by alleged infringersiv. May tarnish your name or lead to malpractice suits

G. Elementsi. Material misrepresentation by the applicant

a. Question of factb. Agfa Corp. v. Creo Prods. (2006): “computer-to-plate” system; trial judge uses Rule 56 from the PTO and applies a duty of candor and good faith

1. (a) “Each individual associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the Office, which includes a duty to disclose to the Office all information known to that individual to be material to patentability”2. (b) Materiality is not cumulative; just need to get one version of the information, doesn’t matter if it is available elsewhere

(1) Prima facie conclusion is that it anticipated or made obvious the claim and it is therefore unpatentable

(2) It is inconsistent with the reason that the applicant takes for saying that the application is patentable3. Material information is

. A reasonable examiner would have αconsidered the omitted reference or false information important in deciding whether to allow the application to issue as a patentß. Any information that a reasonable examiner would have considered important in deciding whether to allow the application to issue as a patent

4. (c) pretty much everyone has a duty of candorc. May encourage willful blindness to a certain degree

1. Intended to incentivize disclosure; if you don’t know if it is material, send it in anyway2. Don’t perform a search to see if it exists in the prior art3. Leads to broad, vague claims and no amendments

d. Materiality is never enough on its own to establish inequitable conduct; also need intent to deceive

ii. Intent to deceive by the applicant by clear and convincing evidencea. Question of factb. Kingsdown v. Hollister (1988): two-piece ostomy appliance; in the continuation application, incorrectly copied the rejected

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claim instead of the amended; subsequently was issued a patent on the continuation application

1. Trial court finds this unenforceable due to gross negligence

. Federal Circuit finds that α gross negligence, by itself, is not the culpability that can satisfy the intent to deceive mental state

c. Agfa: “A trial court may infer deceptive intent based on a showing that a patentee withheld references with which it was intimately familiar and which were inconsistent with its own patentability arguments to the PTO.”

iii. Court balances materiality and intenta. Discretionary decision to see if, together, they constitute inequitable conduct

1. Review for abuse of discretionH. Therasense (2011)

i. Court sets a but-for standard for materialitya. Rule 1.56 no longer applies to the courtroom

1. However, the PTO can still use this to enforce inequitable conduct

b. The patent wouldn’t have issued, but for the fact that you didn’t disclose the information

ii. Specific intent is “knew of reference, knew it was material, and made a deliberate decision to withhold it”iii. Special circumstances in which inequitable conduct can happen are affirmative egregious acts of misconduct

a. An emphasis on schemes and plans that somehow fall outside the bounds of materiality and intent as defined here

iv. Arguably only a rearticulation of the ruleIII. Experimental Use

A. Common Law Experimental Usei. Madey v. Duke (2002): Madey was a professor at Stanford who then moved to go teach at Duke; had patents on his equipment of the FEL technology; some disagreement at Duke and resigned, but left his equipment and Duke continued to use his inventions

a. Court found they did not fall into the common law defense because profit or non-profit status was irrelevant

1. Plus they were actually licensing out the laboratory to do work; not purely academic and research purposes2. “So long as the act is in furtherance of the alleged infringer’s legitimate business and is not solely for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry, the act does not qualify for the very narrow and strictly limited experimental use defense.”

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b. Led to more costly to do research as will need to obtain a license

1. In reality, there is little patent clearing doneii. For amusement, to satisfy idle curiosity, or strictly philosophical inquiry

a. If you use patented inventions to see how they work to then build something around them, you are an infringer

B. Experiment for Regulatory Submissioni. Hatch-Wachsman Act. § 271(e)(1) “It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention (other than some 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.”

a. Drafted to specifically deal with the issue in Bolarb. Immediately began fighting about the meaning of “reasonably related”

1. Name brand wanted narrow use that was allowed such as determining bioequivalent and that’s it2. Generic companies would want any sort of use that could even potentially go to the FDA fall under

ii. Roche v. Bolar (1984): would give them a time advantage in getting filed with the FDA; can get the approval from the FDA before the patent expires and then immediately sell upon expiration of the patent

a. Court found that the action would be enjoinedb. Led to many provisions dealing with the FDA

1. Generic drugs could show that it was equivalent to what the branded companies have by filling out an abbreviated application2. Legislatures bought the story that generics needed to file things with the FDA sooner3. Incentives to be the first generic and challenge the validity and litigate patents

. Can charge only marginally below the brandedα name drug

iii. Merck v. Integra (2005): now with the legislature in placea. Supreme Court finds that the Federal Circuit needs to be a bit more liberal in allowing experimentation surrounding patented compounds, but did not give too much clarity beyond that

1. “At least where a drugmaker has a reasonable basis for believing that a patented compound may work, through a particular biological process, to produce a particular physiological effect, and uses the compound

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in research that, if successful, would be appropriate to include in a submission to the FDA, that use is ‘reasonably related’ to the ‘development and submission of information under… Federal law.’”

iv. Reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs