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Patent
Law:
USPTO
Rule Changes Ruled Upon by the CAFC:
Tiiantafyllos
Tafas et al. v. John J. Doll and USPTO, 2008-1352, (CAFC
March 20, 2009)
As
has been widely reported, the CAFC has ruled upon the USPO
Rule Changes of August 21, 2007 ("Rule
Changes"). The appeal was from the US District
Court for the Eastern District of VA ruling that the four Rule
Changes exceeded the scope of the USPTO's rulemaking
authority.
The
CAFC has ruled that the USPTO rules relating to the limitation
of Request for Continuation ("RCE") applications
("Final Rule 114") and the maximum number of
independent and total claims filed without an examination
support document ("ESD")("Final Rules 75 and
265") are procedural and therefore within the scope of
the USPTO's rulemaking authority.
The
CAFC ruled that the USPTO rule relating to the maximum number
of continuation applications ("Final Rule 78")
conflicts with 35 USC § 120 and is thus invalid.
Under Final Rule 78, an applicant
is entitled to file two continuation applications as a matter
of right. 37 C.F.R. § 1.78(d)(1)(i). If an applicant wishes
to pursue more than two continuation applications, he must
file a petition “showing that the amendment, argument, or
evidence sought to be entered could not have been submitted
during the prosecution of the prior-filed application.” 37
CFR § 1.78(d)(1)(vi). If such a showing cannot be met,
the continuation application application will be entered but
will not be entitled to the filing date of the earliest, prior
filed application.
Under
Final Rule 144, an applicant is allowed one Request for
Continued Examination ("RCE") as a matter of right.
Id. § 1.114(f). For each additional RCE, the applicant must
file a petition “showing that the amendment, argument, or
evidence sought to be entered could not have been submitted
prior to the close of prosecution in the application.” 37
CFR § 1.114(g)
Final
Rule 75 requires an applicant who submits either more than
five independent claims or twenty-five total claims to provide
the examiner with information in an examination support
document (“ESD”). 37 C.F.R. § 1.75(b)(1). The
requirements for ESDs are set forth in Final Rule 265. To
comply with Final Rule 265, an applicant must conduct a
preexamination prior art search ("preexam search"),
provide a list of the most relevant references, identify which
limitations are disclosed by each reference, explain how each
independent claim is patentable over the references, and show
where in the specification each limitation is disclosed in
accordance with 35 U.S.C. § 112, ¶ 1. Id. § 1.265(a).
On
remand to the Federal District Court, the CAFC left open the
following issues:
-
whether
any of the Final Rules, either on their face or as applied
in any specific circumstances, are arbitrary and
capricious;
-
whether
any of the Final Rules conflict with the Patent Act in
ways not specifically addressed in its opinion;
-
whether
all USPTO rulemaking is subject to notice and comment
rulemaking under 5 U.S.C. § 553;
-
whether
any of the Final Rules are impermissibly vague; and
-
whether
the Final Rules are impermissibly retroactive.
If
Final Rules 75 and 265 withstand scrutiny regarding the issues
left open by the CAFC, patent practice will tend toward
essentially limiting the number of independent claims to 5 and
the total claims to 25. The requirement for a preexam
search in the ESD includes a search of "U.S. patents and
patent application publications, foreign patent documents, and
non-patent literature," and also requests specific
details about the scope of the search. 37 C.F.R. §
1.265(a)-(b). As indicated in the Dissenting opinion,
the ESD places a new obligation on the inventor. The new
obligation would surely be challenged by the patent examiner
and in later challenges to validity during litigation.
Federal
Subject Matter Jurisdiction Under Inventorship Statute (35 USC §
256):
Larson
v. Correct Craft, Inc. et al.,
2008-1208, (CAFC June 5, 2009)
Larson
filed suit in Florida state court alleging multiple
fraud-based claims under state law, seeking rescission of
several patent assignments he executed while employed by
Correct Craft, and requested declaratory judgments concerning
the parties’ respective rights to the patents at
issue. Correct Craft removed the case to federal court
on the ground that the declaratory-judgment counts, although
nominally pleaded under Florida law, were in substance claims
to correct inventorship under 35 U.S.C. § 256.
Because
Larson had no concrete financial interest in the correction of
inventorship of the patent at issue, as he had assigned is
rights away to Correct Craft, and he claimed no reputational
interest in the patent, he had no standing to bring a
stand-alone action under § 256. Because Larson's § 256 cause
of action was the only basis for removal from state court, the
CAFC held that the district court had no basis for exercising
subject-matter jurisdiction over the case, and so the CAFC
lacked jurisdiction to reach the merits of Larson’s appeal.
Accordingly, the CAFC vacated the judgment of the district
court and remanded the case.
The
ruling effectively gave Larson a potentially second chance to
have his fraud-based claims heard, this time in state court,
because the US District Court for the Middle District of
Florida did not have subject matter jurisdiction to rule on
either the inventorship claims or the fraud-based claims, all
of which were rulings against Larson. Theoretically, if
Larson can prove that he was entitled to some financial
interest in the patents at issue, then he would have
sufficient standing to then argue the federal inventorship
claims under § 256.
Patent
Infringement - Claim Construction:
Paragon
Solutions, LLC. v. Timex Corporation,
2008-1516, (CAFC May 22, 2009)
This
appeal was from a final judgment of noninfringement in favor
of Timex. The CAFC concluded that the district court's
construction of the claim terms "data acquisition
unit" and "display unit" were incorrect and
rejected Timex's alternative basis for affirmance that proper
construction of the claim term "displaying real-time
data" avoided infringement by Timex's accused devices.
Paragon
asserted US Patent 6,736,759 ("the '759 patent"),
against Timex's Bodylink watches. The '759 patent discloses an
exercise monitoring system that includes an electronic
positioning device and a physiological monitor, both of which
provide visible real-time data to the user on a display
unit.
The
CAFC found, after evaluating the specification, prosecution
history and claims of the '759 patent, "data acquisition
unit" means "a structure or set of structures that
includes at least the electronic positioning device and the
physiological monitor”; “display unit” means “a
structure or set of structures, separate from the data
acquisition unit, for displaying real-time data provided by
both the electronic positioning device and the physiological
monitor independently or over a common transmission path”;
and “displaying real-time data” means “displaying data
without intentional delay, given the processing limitations of
the system and the time required to accurately measure the
data.”
The
CAFC rejected Timex's contention that "real-time"
meant instantaneous holding that some delay caused by
processing, or otherwise acting upon the data satisfies the
real-time data claim limitation and that there was no
intentional delay in presenting the data to the user.
"Have
Made" Clause Under Patent License Agreements:
Corebrace
v. Star Seismic LLC,
2008-1502, (CAFC May 22, 2009)
Corebrace
appealed the District Court judgment which dismissed its
breach of patent license agreement by Star Seismic
("Star").
The
patent license from Corebrace granted Star a nonexclusive
right to "make, use and sell" licensed products. Its
licensed products were covered by US Patent 7,188,452
("the '452 patent") and generally included
earthquake-resistant steel-framed buildings. The license
did not explicitly provide a right to have licensed product
made by a third party and it reserved to Corebrace "all
rights not expressly granted to [Star]. The district
court held that Star did not breach the license by having
third-party contractors make the licensed products.
The
CAFC held that the right to 'make, use, and sell" a
product inherently includes the right to have it made by a
third party, absent a clear indication of intent to the
contrary. Because Corebrace could not show a clear
intent to exclude the right to "have made" such
conduct does not violate the terms of the
license.
The
CAFC also noted that Corebrace did not follow the termination
provisions of the license, which would have allowed Star to
cure the breach, should such breach have occurred, following
notice of such breach by Corebrace.
Priority
of Invention - Interference Practice:
Agilent
Technologies, Inc. v. Affymetrix, Inc., 2008-1466, (CAFC, June 4, 2009)
This case involved an interference proceeding,
which is used to determine priority of inventorship between an
issued US Patent and a later filed patent
application.
After
Agilent’s US Patent 6,513,968 ("Shembri" patent)
issued on February 4, 2003, Affymetrix, believing it had
earlier invented the claimed methods, copied the Schembri
claims into its U.S. Patent Application No. 10/619,244 ("Besemer"
application), to provoke an interference. The Besemer
application claimed priority, through a long string of
continuations, to an application filed June 7, 1995. The Board
declared an interference on February 16, 2006 to determine
which party had priority of inventorship. Because the Besemer
application claims the benefit of an earlier filing date, the
Board declared Affymetrix the senior party to the interference
under 37 C.F.R. § 2.96.
The
CAFC reversed the district court, which affirmed the USPTO
Board, which awarded priority of invention to Affymetrix.
The CAFC reasoned that the Besemer specification did not
support the claim that was copied to provoke the interference
contest. In short, the Besemer specification did not
support the copied claim, which included the terms
"closed chamber... adapted to retain a quantity of
fluid". The terms should have been interpreted to mean
"an enclosed cavity defined by the inner surfaces of the
first and second substrates, from which there is no egress of
fluid."
The
CAFC also found legal error in the district court's decision
to deferentially review the Board's written description
holding in the face of newly submitted conflicting evidence
under Section 146.
Based
on a proper claim construction, as determined by the Besemer
specification, the CAFC found that the the claimed method of
introducing fluid into a closed chamber was not
supported. Moreover, the formation of a bubble mixing in
a closed hybridization chamber was also not disclosed by
Besemer, as required by the copied claims.
Patent Infringement - Summary Judgment:
Crown
Packaging Technology, Inc. et al. v. Rexam Beverage Can Co., 2008-1284, (CAFC, March 17, 2009)
Crown Packaging ("Crown") appealed the
district court decision which granted the Rexam Beverage
("Rexam") summary judgment motion of
noninfringement.
The
asserted claim at issue of US Patent 6,935,826 ("the '826
patent") involved an annular reinforcing bead used on
metal can ends that are used in the beverage industry.
The
review of the summary judgment holding required resolving
whether, after reasonable factual inferences in favor of the
patentee, the district court correctly concluded that no
reasonable jury could find infringement.
The
parties only disputed one issue -- whether there was a
material issue of fact regarding the function(s) of the “annular
reinforcing bead” element of claim 14 of the ’826
patent. Rexam offered only attorney argument as to the
functions of the annular reinforcing bead, but no actual
evidence. Rexam’s own expert discussed only the single
function of increasing the pressure resistance of a seamed-on
can end. Crown provided evidence, through its expert report,
that the annular reinforcing bead has only one function, and
was considered by the CAFC to be in direct contrast with Rexam’s
view that the annular reinforcing bead performs multiple
functions.
Therefore,
because there was a material issue of fact regarding the
function of the annular reinforcing bead, the CAFC reversed
the district court and remanded the case.
The
CAFC also held that marking is not required under the
provisions of 35 USC § 287 where the patent is directed to a
process or a method, the reason being that ordinarily, where
the patent claims are directed to a method or process, there
is nothing to physically mark.
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