The Leahy-Smith America Invents Act ("AIA") was enacted on September 16, 2011. The changes implemented by this Act are wide-ranging and significant, and different provisions have different effective dates, with many taking effect September 26, 2011, September 16, 2012, or March 16, 2013. We will be providing additional information in the coming weeks and months.
Continue Reading...Ensnarement is a powerful defense in any patent case where the doctrine of equivalents is at issue. It's time for defendants to "discover" this under-utilized defense. Despite litigating numerous doctrine of equivalents cases, I've only litigated one case where an ensnarement defense was vigorously asserted.
Ensnarement, seminally set forth in Wilson Sporting Goods, prevents a patentee from claiming a range of equivalents that "ensnares" the prior art. To make that determination, the original claim is redrafted as a hypothetical claim by replacing certain claim terms with the asserted equivalents. As a result, the hypothetical claim literally encompasses the claimed product. In DePuy v. Medtronic, e.g., the claim term "spherically-shaped portion" was replaced with "conically-shaped portion" in the hypothetical claim because the accused product included a conically-shaped portion. The relevant question is then whether the hypothetical claim is allowable over the asserted prior art. If the hypothetical claim is not allowable, then there is no infringement because the asserted range of equivalents "ensnares" the prior art.
Two features of ensnarement make the defense particularly powerful. First, ensnarement is a question of law. In DePuy, the district court held a separate bench trial on the issue of ensnarement after the jury trial (See DePuy, 526 F.Supp.2d 126). The Federal Circuit affirmed the propriety of the court's ensnarement proceeding, holding that ensnarement is a question of law like any other limitation on the doctrine of equivalents. Second, the defendant merely bears the burden of producing prior art to challenge the hypothetical claim; the patentee bears the burden of establishing that the hypothetical claim is patentable. This is in stark contrast to the clear and convincing standard that a defendant must meet to establish invalidity.
Ensnarement, then, effectively allows a defendant two chances to win with its invalidity arguments. A defendant should request a "DePuy Hearing" after the trial if there is a finding of infringement under the doctrine of equivalents. At that hearing, defendant can re-raise its same basic invalidity arguments because ensnarement and invalidity have significantly different burdens and ask different questions (patentability of the hypothetical claim vs. validity of the original claim). The second bite at the apple could prove invaluable. As an example, a court is unlikely to grant defendant's JMOL on anticipation or obviousness if the question is close. With an ensnarement defense, though, the "close call" should go to the defendant, and "close calls," of course, are far easier to assert post-KSR. Further, from the Court's perspective, a finding of ensnarement may be a better option because it is more likely to withstand appeal than a grant of JMOL on a jury verdict of validity. From a defendant's perspective, whether the patent is invalid or the prior art ensnared is typically of no significant consequence. Thus, in any case where infringement is based on the doctrine of equivalents, defendant should assert an ensnarement defense and request a "DePuy Hearing" on the issue.
A decision issued by the Federal Circuit April 29, 2011 offers a lesson for patent prosecutors to talk to each named inventor about what they consider to be the best way of practicing their invention. Though anti-intuitive, it is possible to have multiple best modes. In Wellman, Inc. v. Eastman Chemical Co. (Fed. Cir. 2011), the Federal Circuit has held that the best mode requirement of 35 U.S.C §112 applies to each named inventor (as opposed the inventors collectively). The statutory language on this point is less then clear as §112 requires disclosure of the best mode "contemplated by the inventor." The issue is whether "the inventor" refers to a single best mode contemplated by all the named inventors or whether "the inventor" refers to each and every inventor, thereby allowing for the possibility of multiple best modes for a patent. In addition, the term "best mode" suggests only one mode per patent. Up to this point, Federal Circuit precedent was also unclear on the issue. The only Federal Circuit decision addressing this issue supported the latter position, but did so in dicta in a footnote. See Pannu v. Iolab Corp., 155 F.3d 1344, 1351 n.5 (Fed. Cir. 1998). However, multiple Federal Circuit decisions have used loose language that supports the former position, though those decisions weren't presented squarely with the issue.
In Eastman, the Federal Circuit adopted the dicta in Pannu and held that "best mode issues can arise if any inventor fails to disclose the best mode known to him or her." In Eastman, one of the inventors had testified that a certain recipe for PET resins was, in his mind, the best resin available at the time the application was filed. The patentees, however, choose to maintain that recipe as a trade secret rather than specifically disclose it in the patent application. Instead, the patent "hides" the best mode by disclosing broad ranges for certain elements that technically encompass the best mode recipe, but which failed to enable a person of ordinary skill to practice the best mode. Significantly, the patent actually "leads away" from one critical element through statements about "typical" and "preferred" properties within a range that the actual best mode compound does not have.
The lesson of Eastman for patent prosecutors is to talk to each named inventor about what they consider to be the best way of practicing their invention. Though anti-intuitive, it is possible to have multiple best modes. Further, if you're dealing with a chemical patent, it's much safer to directly disclose the actual best mode, but if you opt to use "ranges" to make the required disclosure, the best mode must be enabled.
Two final comments. First, Chief Judge Radar found that "Wellman intentionally concealed the best mode." Perhaps we will find out if intentional concealment of the best mode is a sufficient predicate for an inequitable conduct defense. Second, Patent Reform (addressed in this post), removes the best mode requirement from 35 U.S.C § 112. So, it's possible that this may be the last significant best mode decision.
According to a message to USPTO Employees from Director David Kappos, the Track One expedited patent examination program (discussed in this earlier post), scheduled to go into effect on May 4, 2011, is postponed until further notice. As reported in Hal Wegner's newsletter, the cancellation is due to budgetary cuts and whether and when prioritized examination may be reinstated is unclear.
Beginning May 4, 2011, a US patent applicant can request prioritized or "fast track" examination at the USPTO under the newly promulgated "Track 1" procedure of 37 C.F.R. 1.102(e). To obtain the Track 1 prioritized examination, the following conditions must be met when the application is filed: (1) the application must be an original utility or plant non-provisional application (i.e., this procedure is not available for international national stage entry applications, design applications, reissue applications, provisional applications, or reexamination proceedings, but is available for continuation and divisional applications, including a continuation application of an international application designating the US); (2) the application must be filed with an executed inventor oath or declaration and all applicable filing and publication fees; (3) the application must not contain more than four independent claims, more than thirty total claims, or any multiple dependent claims; and (4) a request for prioritized examination must be filed together with a $4000 filing fee and a $130 processing fee. Currently, there is no reduction in the $4000 fee for small entity applicants.
The USPTO indicates that it will only grant a maximum of 10,000 application requests for prioritized examination in fiscal year 2011, which concludes September 30, 2011.
Once an application is granted the prioritized status, the application will be placed on the examiner’s special docket throughout its course of prosecution until a final disposition is issued. A “final disposition” is defined to mean (1) mailing of a notice of allowance; (2) mailing of a final Office action; (3) filing of a notice of appeal; (4) declaration of an interference by the Board of Patent Appeals and Interference (BPAI); (5) filing of a request of continued examination; or (6) abandonment of the application.
A word of caution: If an extension of time is taken for any response, prioritized examination will be terminated. Also, prioritized status will be lost if the application is amended to include more than four independent claims, more than 30 total claims, or any multiple dependent claims.
The USPTO's goal for Track 1 applications is to provide a "final disposition" within 12 months of prioritized status being granted. However, this is a goal, not a guarantee!
There was much excitement when the U.S. Senate overwhelmingly passed (95–5) the America Invents Act (formerly titled the Patent Reform Act of 2011) (S.23 or AIA), on March 8, 2011. The America Invents Act This legislation represents a major patent reform initiative that has been under congressional debate for at least six years and is quite possibly the most significant patent reform since the 1952 Patent Act. This legislation rewrites, among many other things, who is entitled to a patent when two or more entities seek protection for the same invention, when prior art is available for novelty and nonobviousness determinations, and what is available to a third party who wants to oppose a patent.
First-to-File: When two or more entities seek patents for the same invention, current law awards the patent to the entity that can prove it was the first to invent. Under the AIA, the patent would be awarded to the first-to-file a patent application. Proponents argue that this is more efficient because it eliminates costly and time consuming procedures called interferences and aligns U.S. law with other industrialized countries. Opponents argue that this favors large companies over small companies and independent inventors who do not have the resources to win a race to the patent office. To somewhat address these concerns, the AIA allows for a derivation claim (either in court or the Patent Office) when the first-filer “derived” their claimed invention from the other. Even with these derivation claims, however, the AIA appears to favor large companies who are active in patenting innovations.
Importantly, the AIA does not include any provision for prior user rights. Current law has limited prior user rights in that a prior user who is sued for infringement may be able to invalidate that patent by claiming prior invention. That option is eliminated in a first-to-file system leaving a prior user potentially liable for infringement. This is particularly a concern for business methods and software because many companies have considered their business method and software innovations either unpatentable or better protected as a trade secret. Without prior user rights, a company can be liable for patent infringement for continuing to use an innovation that they have been using for years as a trade secret. This lack of prior user rights could be very problematic for industries such as the financial industry and the software industry. The AIA temporarily adds a limited proceeding to challenge business method patents within the patent office but this will be of little help if all of the accused company's prior use was secret.
Novelty/Nonobviousness: In order to obtain a patent, an invention must be novel and nonobvious. The AIA rewrites Sections 102 (novelty) and 103 (nonobviousness) of the Patent Act. Current Section 102(a) denies a patent when prior art shows the invention was known to others prior to the patent applicant's invention date. The AIA moves up the focus to the patent applicant's filing date and whether prior art existed before that date. This expands the scope of potential prior art and may make it more difficult to obtain a patent. Current Section 102(b) bars a patent when there is prior art of the inventor or others disclosed more than a year before the patent applicant's filing date. This creates a grace period for pre-filing disclosures but prevents the patent applicant from waiting more than a year to file a patent application. The AIA only applies this grace period to pre-filing disclosures of the inventor or pre-filing disclosures derived from the inventor. Thus, the grace period no longer applies to independent disclosures by others. This also expands the scope of potential prior art and may make it more difficult to obtain a patent. The AIA also rewrites Section 103 (nonobviousness) to deny a patent when the invention is obviousness as of the patent applicant's filing date rather than “at the time the invention was made” per the current Section 103. This yet again expands the scope of potential prior art and may make it more difficult to obtain a patent.
Third Party Participation: When the public is aware of prior art that may prevent the issuance of a patent, current law has a very narrow window of two months after publication of the application to submit the prior art to the Patent Office. In some cases, a patent application is not published and thus there is not an opportunity for the public to submit prior art. The AIA permits the public to submit prior art to the Patent Office at any time. This change has little opposition. The AIA also creates a post grant review and an inter partes review for third parties to oppose issued patents. These proceedings would replace the current reexamination system within the patent office which is limited to addressing patentability issues raised by prior patents or printed publications. The post grant review permits a third party to raise any issue of patentability at the patent office within nine months of the issuance of the patent. The inter partes review permits a third party to raise prior patent or printed publication issues after nine months of the issuance of the patent. Opponents believe that these changes do not go far enough to provide a viable alternative to litigation that is fair to both parties.
Initial excitement upon passage by the U.S. Senate appears to be waning as anticipated quick action in the U.S. House of representatives appears unlikely. Initial hearings by the House Judiciary Committee Subcommittee on Intellectual Property, Competition, and the Internet raised questions about the lack of prior user rights and the decreasing nature of the post grant proceedings. Other questions were directed to the lack of change to damage provisions which some commentators believe to be the biggest concern of current patent law and the inclusion of the proceeding to challenge business method patents. Note that the Senate removed changes to damage provisions as a compromise to obtain passage of the AIA. It now appears there may still be a long battle before we see patent reform.
When Starbucks recently announced a change to their iconic logo, I took interest not only as an attorney specializing in trademark and advertising law, but also as a fairly regular consumer of Starbucks coffee (and, I confess, a Starbucks "Gold Level" card holder).
This article discusses issues pertinent to both and addresses some interesting theories behind the reasons and implications of logo revisions generally, as well as some thoughtful observations on the Starbucks logo change and the advantages of a wordless logo for a global marketplace.
Also, Starbucks has launched a mobile application allowing users to track the funds in their Starbucks stored value cards and to use their phones for payment—with the phone essentially taking the place of the card. It's a cool and useful application, and seems to be perfectly suited for its targeted audience. I have the application downloaded and use it to track or reload my own card balance, which I am starting to find surprisingly useful. I've had a mixed experience with baristas who either handle my phone or refuse to handle my phone citing company policy. While the latter makes for a somewhat awkward counter transaction, I find it preferable. There is something very personal about handing over my phone (as compared to a credit card or Starbucks card), and given the amount of information we carry around on our phones, it seems like a security concern—especially if that phone is going in through a drive-through window. In any case, this functionality perhaps brings us one step closer to that promised future in which we pay for everything by using a single electronic device. One ironic twist to this, however, is that would-be users must first purchase a physical Starbucks card in order to establish an account to be accessed by their mobile application.
As has been widely reported, there has been an influx of false marking cases hitting the courts over the past year based on 34 U.S.C. Section 292, the False Marking Statute. That statute, loosely translated, makes it an offense to mark a product or use in advertising a patent number or the words "patent," "patent pending," or any other indication that a patent applies to a product when it in fact does not. This includes situations in which a company for years correctly marked a product with a patent number, but then continued so marking the product after the expiration of the patent. The statute states that a person responsible for such an offense shall be fined not more than $500 for every such offense.
The statutory language also includes a somewhat uniquely simplistic qui tam provision providing that "Any person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States." While the qui tam provision of the False Marking Statute was enacted in 1952, the 2009 Forest Group , Inc. v. Bon Tool Company decision made the qui tam actions more financially lucrative—and set the groundwork for a cottage industry of false marking litigation—by holding that violators of the False Marking Statute face a $500 fine for each article improperly marked rather than a $500 fine for a single decision to improperly mark multiple articles.
The February 23, 2011 decision in Unique Product Solutions, Ltd. v. Hy-Grade Valve, Inc. —holding that the False Marking Statute's qui tam provision violates the Appointments and Take Care Clauses of the United States Constitution—could have a chilling effect on the recent rash of false marking cases. In an interesting opinion, Judge Dan Aaron Polster of the US District Court for the Northern District of Ohio briefly explains the history and rationale behind qui tam provisions, which "can reasonably be regarded as effecting a partial assignment of the Government's damages claim" such as in the case when an "assignee of a claim has standing to assert the injury in fact suffered by the assignor."
Judge Polster also explains the purpose behind the Take Care Clause of Article II of the Constitution which provides that the President "shall take care that the laws be faithfully executed." Judge Polster cites precedent in explaining that the Take Care Clause requires that the Executive Branch retain sufficient control over a qui tam claim to "ensure that the President is able to perform his constitutionally assigned duty to take Care that the Laws be faithfully executed." In applying the "sufficient control" analysis to the False Marking Statue (which Judge Polster suggests "is unlike any statue in the Federal Code with which this Court is familiar"), Judge Polster notes that "[a]ny private entity that believes someone is using an expired or invalid patent can file a criminal lawsuit in the name of the United States, without getting approval from or even notifying the Department of Justice" and "[t]he case can be litigated without any control or oversight by the Department of Justice. " Given the lack of a requirement of Department of Justice notification, government oversight or right to intervene, stay discovery, dismiss the action, or involve itself in a settlement, the qui tam provision was found by the court to be in violation of the Appointments and Take Care Clauses of the United States Constitution. Judge Polster bolsters his opinion with a final critique with which defendants of False Marking cases would no doubt agree:
The danger of this uncontrolled privatization of law enforcement is exacerbated by the financial penalties in this statute. The penalty is up to $500 for each article falsely marked. Forest Group, 590 U.S. at 1302-1303. Depending upon the number of items, this could be a staggering amount of money or a trivial amount. The statutory penalty is not calibrated to the size or economic strength of the defendant, the significance of the product, or to the degree of competitive harm the false marking may have had beyond simply the gross number of articles falsely marked. See Id. at 1303 (“[t]he more articles that are falsely marked the greater the chance the competitors will see the falsely marked article and be deterred from competing”). It is therefore essential that the government have control over when such cases are brought, and most importantly, how they are settled. Such decisions should be made by government attorneys who have no financial stake in the outcome of the litigation or settlement, not by private parties motivated solely by the prospect of financial gain.
The Digital Millennium Copyright Act (DMCA) at 17 U.S.C. §1201(a) prohibits the circumvention of technological protection measures used by copyright owners to prevent copying. However, subsection (a)(1)(C) allows the United States Copyright Office every three years to exempt certain classes of copyrighted works from the circumvention prohibition if the prohibition is likely to adversely affect users in their ability to make noninfringing uses of those particular classes of works.
The Librarian of Congress, James H. Billington, on July 26 announced six new or more specifically defined classes of works to be exempted from the DMCA’s prohibition against circumvention of access-control technologies. “Persons who circumvent access controls in order to engage in noninfringing uses of works in these six classes will not be subject to the statutory prohibition against circumvention,” Billington said.
The six classes of works are:
(1) Motion pictures on DVDs that are lawfully made and acquired and that are protected by a content scrambling system when circumvention is accomplished solely in order to accomplish the incorporation of short portions of motion pictures into new works for the purpose of criticism or comment, and where the person engaging in circumvention believes and has reasonable grounds for believing that circumvention is necessary to fulfill the purpose of the use in the following instances: (i) educational uses by college and university professors and by college and university film and media studies students; (ii) documentary filmmaking; and (iii) noncommercial videos
(2) Computer programs that enable wireless telephone handsets to execute software applications, where circumvention is accomplished for the sole purpose of enabling interoperability of such applications, when they have been lawfully obtained, with computer programs on the telephone handset.
(3) Computer programs, in the form of firmware or software, that enable used wireless telephone handsets to connect to a wireless telecommunications network, when circumvention is initiated by the owner of the copy of the computer program solely in order to connect to a wireless telecommunications network and access to the network is authorized by the operator of the network.
(4) Video games accessible on personal computers and protected by technological protection measures that control access to lawfully obtained works, when circumvention is accomplished solely for the purpose of good faith testing for, investigating, or correcting security flaws or vulnerabilities, if: (i) the information derived from the security testing is used primarily to promote the security of the owner or operator of a computer, computer system, or computer network; and (ii) the information derived from the security testing is used or maintained in a manner that does not facilitate copyright infringement or a violation of applicable law.
(5) Computer programs protected by dongles [Wikipedia explanation here] that prevent access due to malfunction or damage and which are obsolete. A dongle shall be considered obsolete if it is no longer manufactured or if a replacement or repair is no longer reasonably available in the commercial marketplace; and
(6) Literary works distributed in e-book format when all existing e-book editions of the work (including digital text editions made available by authorized entities) contain access controls that prevent the enabling either of the book's read-aloud function or of screen readers that render the text into a specialized format.
It is the second of the above classes which removes copyright law prohibitions against “jailbreaking”, so long as the jailbreaking is done for the purpose of engaging in noninfringing uses. Jailbreaking is a process that allows iPhone users to run third-party code on their devices by unlocking the operating system and allowing the user root access. Once jailbroken, iPhone users are able to download applications which are not available through Apple’s App Store (and which, therefore, have not been approved by Apple). It should be noted that, as reported by Jay Yarow in the San Francisco Chronicle, Apple CEO Steve Jobs claimed at the unveiling of the iPhone 4 that Apple approves 95% of the apps it sees within 7 days.
Though jailbreaking is no longer prohibited under the DMCA's circumvention prohibitions, such activity, as Apple has previously stated, could amount to a breach of the phone owner's end user license agreement, could nullify the product warranty, could result in Apple denying service for the product, and, according to Apple, could result in "instability, disruption of services, and compromised security." Given these potential negative consequences and the fact that Apple had apparently not actively pursued jailbreakers even prior to this decision, it remains to be seen what practical effect the decision will have for consumers.
On March 22, in Ariad Pharmaceuticals v. Eli Lilly & Co., No. 2008-1248, an en banc panel of the U.S. Court of Appeals for the Federal Circuit reaffirmed that § 112, ¶ 1 contains a written description requirement that is separate and distinct from the enablement requirement. The court ruled that the asserted claims of U.S. Patent No. 6,410,516 (the ‘516 patent) are invalid for failure to meet the statutory written description requirement.
Continue Reading...A country code top-level domain (ccTLD) is an Internet top-level domain generally used or reserved for a sovereign state or territory. There are currently over 270 such domain extensions— from the Ascension Island (.ac) to Zimbabwe (.zw)—delegated by the Internet Assigned Numbers Authority (IANA). A number of the world's countries have licensed their TLDs for worldwide commercial use—usually when the TLD has coincidental alternative meanings making it especially marketable. Examples include Tuvalu and the Federated States of Micronesia, small island-states in the Pacific, sell domain names using the .tv and .fm TLDs respectively.
The .co top level domain extension is the latest ccTLD to draw interests from domain registrants not located in the country indicated by the domain extension. The .co extension, the country code top-level domain assigned to the nation of Colombia, is significant to brand owners because Internet users searching for brand owners' Web sites frequently mistype ".com” as ".co."
Continue Reading...Despite being the world’s foremost creator of hip consumer technology and a brand recognized worldwide, Apple has consistently managed to find itself embroiled in seemingly avoidable trademark disputes. As discussed in Hiroko Tabuchi's New York Times article, "IPad? That's So 2002," Fujitsu Says, Apple has found itself in another very public trademark dispute. While the latest flap is that created by Apple’s use of iPad with its new tablet computer, it is by no means the first time Apple has been accused of trademark infringement.
In perhaps one of the most well known trademark disputes, Apple Computer sparred with Apple Corps on multiple occasions. Apple Computer’s first dustup with the corporate entity behind the Beatles’ Apple Records record label occurred in 1978 (shortly after the founding of Apple Computer in 1976) when Apple Corps sued Apple Computer for trademark violation. The parties settled that dispute in 1981 with the understanding that Apple Computer would never enter the music industry.
Predictably, in hindsight, Apple Corps filed suit against Apple Computer again eight years after the settlement—this time for violating the original agreement not to enter the music industry.
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