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Patent Law

Patent Law Outline

Fall 2013

Professor Gruner

3 main issues:

  • What can you get a patent for?
  • How do you get a patent? What has to be in it?
  • So what? Challenges

P Laws create rights to control other parties’ use of intellectual creations

Purpose:  1. promote & reward creative endeavors; 2. encourage commercialization of creative products; 3. Protect consumers against counterfeits; 4. Encourage producers to develop reputations based on high quality products

Focus of class: utility patents (new and useful inventions); (design patents are for visual look – not function) (plant patents – Certain types of plants can get patents – if plant is new and useful, can get a utility patent (e.g., “Round-up Ready” seeds)

What can be protected?  Rights attach to certain new designs for:

  1. Useful items (including machines and items of manufacture)

Machine = machine that pours Coke in can

Items of Manufacture = Coke can

  1. Compositions of Matter (e.g., aspartame)
  2. Processes (e.g., steps for making Coke)
  3. Improvements in any of the above (e.g., better “pop top”)

Patent law is derived from:

  1. Constitution: Article I, Section 8, Clause 8 – “to promote the. . . useful Arts, by securing for limited times to. . . Inventors the exclusive Right to their respective. . . Discoveries.”

-what are useful Arts?  Specialized knowledge concerning useful things

  1. Patent Act (1954 with changes in 2012 – changes only apply to patent applications from March 13, 2013 onward) (changes in 2012 made to bring US closer to first-to-file patent priority system used in rest of the world) (applies to novelty and non-obvious discussions)
  2. But mostly case law (Federal Circuit Court = sole appellate court for Federal patent cases (can then go to Supreme Court)).
  3. USPTO regulations (we won’t study much)

How are they obtained?

  1. Issued based on timely patent application containing 1-description of invention and how to make and use it; and 2-claims language describing the invention features over which rights are sought
  2. Patent applications are scrutinized by USPTO examiners
  3. Patent examination process (referred to as “patent prosecution”) is often very long and intricate
  4. Patents issue once examiners agree that remaining application contents after amendments in examination meet patent law requirements.

What rights are gained?

Patent rights control making, using, selling, importation, and exportation of patented items (collectively referred to as “infringement”).  Rights also control related activities tending to induce or contribute to misuse of patented items.

Note: trade secrets

-cover information of trade value

-law defined state by state

-reasonable secrecy measures must be maintained to keep protections

-disclosure will destroy protections

-independent rediscovery with disclosure will destroy protections

Patents and trade secrets often overlap

-usually trade secret protection is traded off for patent protection (but patent may be published, yet not granted)

-trade secret protection is unlimited in time

Utility patents provide negative rights (right to exclude)

-can prevent others from making, using, selling, importing, or exporting the patented invention

-does not guarantee the patent holder the positive right to make or use the patented item


-reward theory – reward inventions using new technologies

-commercialization theory – encourage companies to back research and commercialization

-disclosure theory – disclose rather than trade secrets (20 years of protection for going public)

-specialization theory – encourage specialization in inventive efforts, deferring production and commercialization to others (i.e., hand off from innovator to big company)

-invention development theory – signal to others who were working on same/similar invention

-invention prioritizing theory – reward inventors based on public interest  (so inventors know how to further develop/sell)

Features of patent documents

Specification: contains information on the patent holder’s invention, including (with patent claims) the required elements of

-written description of invention in detail

-enablement material describing how to implement and use invention

-best mode information describing best embodiment or version of invention known to inventor at time of application

Claims:  list of elements constituting claimed invention

-detailed list (usually in awkward language) of functionally important invention features

-drawings and remainder of patent will be used to interpret but not add to claims language

-legal rights extend only to the version of the features of the invention described in the claims

-written for average engineer in the field to recreate

-must include “best mode” – best version of invention

-claims = similar to a “deed” – legal rights extend only to what’s in claim

Obstacles for patent documents:

-Subject Matter




-Statutory bar and other grounds for patent rejection under old law (pre-AIA)

(must also include enabling language)

Independent claims = broadest

Dependent claims get narrower and narrower

SUBJECT MATTER (gatekeeper)

-Constitutional Limitations – doesn’t provide much guidance

-Statutory Categories (35 USC §101 – process, machine, manufacture, or composition of matter (or new and useful improvement thereof))

-Inclusive view of statutory categories (Chakrabarty)

-Types of exclusions

-law of nature (E=mc squared)

-natural phenomena (ability to split white light into colors) (note: but 1st spectrum separating light would be patentable)

-abstract ideas (2+2=4)

Reasons for exclusion:

-don’t want to lock up analytical tools (blocking future research)

-lack of application (don’t want to reward incomplete work)

-lack of human discovery (don’t to reward inadequate work; multiple legitimate accesses)

Diamond v. Chakrabarty – bacteria capable of breaking down crude oil.  Granted claims for process but denied claim for bacteria itself

-Court:  bacteria is both a manufacture and a composition of matter.

product of human ingenuity “having a distinctive name, character and use” = patentable(wildly inclusive; very broad – trying to incentivize people to work on better bacteria/tools).  (name=ability to describe; character=features; use=functionality)

-this is still basic §101 test (1st hurdle, subject matter)

-strong protections of utility patents applies to inventions of living things; up to Congress to draw the line for inhumane/immoral animal practices, but it will be animal protection statute, not patent statute; useful things should be within boundaries of patent statute.

-New manufacture b/c it involved man-made assembly of previously separate components to produce a new item with new functionality

-New composition of matter b/c the matter in the bacteria had never been assembled in the same structure before and the new structure had functional implications

General Test in Chakrabarty (still standard today)

Four elements:

  • Product of human ingenuity having (i.e., not a pre-existing product of nature)
  • Distinctive name (clearly describable as a separate design from predecessors)
  • Distinctive character (structure and operation are defined) (i.e., what’s in it?)
  • Distinctive use (functionality an
  • Distinctive use (functionality and practical impact are defined) (i.e., practical application in outside world)

Bilski v. Kappos

-Supreme Court overruled “machine test” as only test for processes

-business method for hedging is not patentable (but other business methods may be patentable) (court is confused – s/b focused on subject matter, not novelty or nonobviousness)

-(usually 1st claim (broadest) is independent and subsequent claims are dependent)

-earlier approaches rejected by court:

-substitute “useful arts” for “technological arts”

-mental steps doctrine – information processing is so mentally analogous, we don’t want to control how people think

-State Street standard – whether the invention produced a “useful, concrete and tangible result”

-Federal Court uses “machine or transformation” test (would eliminate all business method patents) – Supreme Court says should be considered, but not necessary (BUT merely indicating that a computer computes the data, doesn’t count as passing the machine test)

-Supreme Court handles as abstract idea; never invoked Chakrabarty or explained rule.  Key issue – is this abstract?

-not very much implementation language in claims (and claims are very broad) BUT purpose is to make $, which is not abstract; also offers quantity of commodities – also not abstract

Some business methods are too abstract to cover abstract subject matter (e.g., this one). (possible that court just needed more implementation information (detail) – e.g., distinctive character and use)

-Supreme Court wants to include anything that may be useful (e.g., business method patents) until Congress tells them not to.

-Dissent wants to eliminate business method patents altogether – argues Congress should be promoting useful arts (businesses don’t need these patents; already have other incentives to enhance methods); also advancements are usually incremental over existing methods/ideas (and s/b available to all for further advances) (same argument for software patents)

-Counter argument is to reward each improvement/advancement with a patent

Assuming correct subject matter, go to exclusions:

  1. Natural laws



  1. Not created by man (pre-existing when “discovered” by man)
  2. Not applied – purely descriptive; no impact of itself; particular applications (with more impactful details) can be patented

-Morse patent claim 8 (2 problems) – claim as to all means for communicating at a distance with electric current

  1. Morse did not invent all means for distant communication with electricity
  2. Morse did not describe all means in a way that would enable others to implement them.

-Metabolite test – claim to a test for an amino acid condition always associated with vitamin B deficiency with the further step of a diagnosis of deficiency.  Claims may be coextensive with biologic mechanism underlying deficiency.

O’Reilly v Morse – Morse tried to patent all use of electricity to transmit signal to a distance to communicate (speculates we could do more, but doesn’t tell us how).  Denied.  Gets patent for telegraph, but not for all communication at a distance.

-Electricity through wires = fundamental law of physics

-Also, patent would have restricted further advancement in communication

-Claiming something he didn’t invent (electricity & pre-existing inventions)

-Didn’t specify additional methods that he tried to include in claim (too broad); he only described telegraph (would have included cell phones, fax machines, etc.)

Difference from Bell’s telephone patent:

-Bell invented as much as he claimed (undulating current); broad, but tells how to do it (enablement) – enough to allow engineer to figure out how to do it.

-Granted – claimed only as broad as implementation.

Lab Corp. of America v. Metabolite Labs, Inc. – can you patent correlation between amino acid levels and B12 deficiency?

-Valid patent if newly discovered (incentivizes people to keep looking), even though amino acids levels are naturally occurring (correlation was new).  Supreme Court denied cert so Federal Circuit Court decision stands.

  1. Natural items (need new functionality to patent)

-pre-existing natural items are not inventions

-may be useful, but not created by man (e.g., pine needle that has medicinal effect); BUT can come up with procedure that utilizes medicinal fact and patent procedure)

BUT don’t want to exclude all items derived from natural products

-possible patentability treatments of natural items:

  1. could exclude all items derived from natural products

-would undercut research on many drugs

-would also be difficult to trace (how would one determine if a non-naturally occurring medicine was derived from nature or assembled from scratch in a chemical process?)

  1. could exclude only items in their natural state and surroundings (meaning that isolated and purified items would be patentable)

-Isolation is not enough to create patentable subject matter after Myriad.

– Isolation + __________ (what type of modification?) may be enough.  And procedural patents are still available.

-Purification was formerly held to be enough to distinguish an item from natural state and create patentable subject matter – case law in doubt after Myriad.

  1. could exclude only modifications to naturally occurring items

-Prevailing rule after Myriad.

-Still begs the question as to what types of chemical or structural changes to an isolated version of a naturally occurring item will be enough to create patentable subject matter.

  1. Exclusion of naturally occurring items will not exclude new processes based on the non-patentable natural items (affirmed in Myriad).

-Procedure protections not as broad as substance protection (different procedures for use will not infringe earlier procedure patents)

-Focuses research and commercialization on procedures

What about purified items?

Parke-Davis – claimed invention involving purified form of adrenaline is patentable subject matter.  Purified version held to be not a “product of nature” in that purification made item “for every practical purpose a new thing.”

-Key appears to be new functionality:  if purified chemical functions differently, it is a new thing (consistent with patent philosophy promoting new uses).  Invention removed items that would have impeded its function – leaving a chemical form “practically free from inert and associated gland tissue” in “stable and concentrated form”.  Dual significance = different physically (structurally and in chemical composition) from naturally occurring version; and produced functional differences

-Note: this is before Myriad – may be different now.

-in Myriad – isolation of genes from body not involve sufficient new functionality to distinguish isolated genes from naturally occurring genes.

-Purification often creates ease of use benefits that are parallel to those from isolation.

-If isolation is not enough to create a non-naturally occurring item, perhaps purification is not as well.

-Myriad also focuses on chemical similarity of genes in the body and isolated genes.

-Purification creates chemical and structural differences between original and purified versions.

-If functionally important, these chemical and structural differences may still be enough to make purified products patentable.

What about combined items?

Funk Brothers – combination of 2 naturally occurring items is not patentable as new substance (no new functionality)

– combined items had no synergistic effect when combined

-each carried forward its component functionality that it had as a separate item, but there was no new functionality due to combination of 2 components.

-Court viewed combination of these 2 items as a form of a naturally occurring item.  Without incremental functionality, the combination was indistinguishable from its naturally occurring components.

-increased or different functionality = key to finding a new, patentable item not already in nature.  Court looked only to functionality resulting from chemical or structural interaction between the combined items.  Court ignored the increased ease of applying the two components together even though this may have provided increased functionality.

-Perhaps could have obtained patent for method of applying the items (but not as a new substance)


-Abstract ideas underlie software and business method patents. (e.g., Amazon 1-click purchase (patentable subject matter); prevents buyer’s remorse).

-Software and business method developments generally turn on new information processing ideas.

-Information processing sequences can be described in abstract algorithms.

-Patenting algorithms raises concerns about patent control over abstract ideas.

-as of 2011, software patents issued were more numerous than all other patents combined.  Over past 2 decades, number of software patents has grown faster than other patents and USPTO resources have not kept up (caught blindsided; didn’t have examiners with right training).

Possible reasons to limit software patents:

-patent incentives for innovation not needed as industry has low investment costs

-strong network effects disadvantage late comers over patent protected early parties (1stcomer gets all users (e.g., Microsoft Windows); patents may add fuel to the fire

-Too many overlapping patents (a given piece of software may have several patents)

-Overlapping incentives with software copyrights.

-Too fast moving for 20 year patent terms (but not necessarily; also, new advancements would also be patentable, so not a strong argument).

-Norms of industry favor sharing not limitation (so people don’t have to re-create the wheel) (e.g., open source projects; desires to use latest software tools in new projects)

-Concerns over patenting thoughts about information processing (algorithms).

-Weak prior art resources due to earlier lack of patenting of software.

-Uncertainty about proper USPTO resources for review of software patents.

-Excessive volumes of software patents overstress USPTO resources and lead to issuance of flawed patents.

-Procedural novelty – can be patented for sequence of processing (how software runs)

-Chunks of MS Windows code = copyright – protects code; but people could figure out how it works and reprogram without infringing (i.e., functionality wasn’t protected, which is why patent protection is better)

-Many people correctly misinterpreted Benson to mean that software wasn’t patentable, so people stopped applying.  Therefore, software advancements later seeking patents got through (there was a weak history in the patent system).  People sometimes use old software manuals to challenge new patents (otherwise there is no record of conflict).

Abstract ideas and software patents

-degree of physical embodiment needed in software-based advances remains in dispute

-issue is what distinguishes mental construct (with admittedly practical and beneficial features in conducting mental analyses) that is an abstract idea from a practical application of the same idea?  What further implementation details are necessary?

Possible means to distinguish ideas and informational processing applications

-real world elements (physical elements beyond just mental steps or constructs)

-real world linkages (real world inputs)

-real world impacts (real world control via outputs – e.g., opening mold in Diehr) – practical application helps greatly in getting patent, whereas just ringing an alarm is not enough.

-real world products (downstream real world products or changes influenced by the advance – e.g., rubber products molded in Diehr)

Examples of judicial treatment of information processing applications

-Software-based rubber mold is patentable (Diehr) since it produces two independently sufficient physical transformations:

  1. the movement (opening) of a rubber mold when proper (software assessed) curing is completed and
  2. the finished (molded) rubber item

-Software-based alarm system is not patentable (Flook) since it involves mere information processing

Lack of direction in case law

-Recent case law continues to focus on need for more than abstract ideas in patentable advances

-Unfortunately, courts give no explanation of what practical or physical features beyond an idea are sufficient for patentable subject matter

-Example:  in Bilski, court held that patentable subject matter was lacking due to the presence of only an abstract idea despite the fact that the invention at issue (a system for assessing commodity trading risks and triggering commodity transactions) had practical and physical impacts on 1-commodity unit inventories and 2-resulting trading funds.  Not enough detail about how to get there.

Business Method Patents

-computer-based revisions of business practices

-differences from earlier physical technologies

-largely information processing based

-emphasize business management advances, not physical technologies (e.g., FedEx 1-location shipping center)

-examples:  insurance offerings covering new risk combinations; fund management methods; tax reduction method patents; one-click product ordering

-special statutory provisions:  protect long-used (but secretly employed) business methods from infringement findings (permission is grandfathered in if you can prove you were already using); provisions aimed at preventing disruption of established business practices; Congressional recognition suggests that business methods are generally patentable subject matter

Gottschalf v Benson – process for converting binary-coded decimal (BCD – coding digits separately) into pure binary numbers.  Applicant tried to put in physical terms.

-Court rejected – seemed to say that if you don’t lock up all uses of algorithm & connect to tool or machine or use, you can get patent.

-Rejected as too broad for trying to lock up all future uses of this technology.  Not tied to specific use (although in reality, claims did have physical application). Too sweeping with no practical details.

-Too abstract, just a mathematical formula (people can do in their head). (but really, way too complicated to do in head)

-Some interpret that:  if advancement does nothing but make computer run faster, not patentable.  But should that be?

So… what needs to be added to make patentable?

Diamond v Diehr (software with specific application) – process for molding synthetic rubber; invention adds to already well known way to make mold à computer constantly monitoring temperature provides more accuracy as to length of time for perfect curing. (i.e., updated rubber molding with computer enhancement)

-Lower court:  if “novel” feature is in software, not patentable (how court interprets Benson).

-Supreme Court looks at invention as whole – new way of using pre-existing equipment; a computer happens to control it, but really just a new process.

-What if they tried to only patent software?  Probably not.

So, embed as many physical elements as you can in your claims (broader software claims may be rejected, but narrower claims may go through).

-downside:  strongly limits scope of patent.


-claim computer as new machine when operated by this software (computer + new software = new machine).  Claim machine, not process, but describe process/software.

-Some people reject:  still basically trying to claim algorithm.


-claim software as physically implemented tool to operate a machine.

-disk/CD is new item of manufacture (shape of CD manipulates computer).  Copying software/CD would be infringement unless claim was only as to how CD modified computer.  Then, only users would be infringers.

Myriad (issue here is substance patent only) – ∆ found precise location of BRCA1 and BRCA2; isolated and created cDNA.  Mutations in those sites have 50-80% chance of getting breast cancer.  ∆ controlled testing of these genes (i.e., need genes to do testing).  Issue is what makes an item “markedly different” than one pre-existing in nature?  At issue:  regular DNA sequences isolated from naturally occurring bodily setting; and cDNA sequences containing only functionally important subsets of natural DNA.

-Potentially important dimensions of difference:  all inner chemical contents; inner chemical contents plus surrounding chemical features; only chemical contents with information recording significance; all functionally important features.

-Federal Court said both DNA and cDNA were patentable; item must be “markedly different” than one pre-existing in nature – Chakrabarty à had change in chemical composition and functionality; Judge Laurie – had to break covalent bonds (change chemical contents); Judge Moore – same as Laurie, also looks at functionality; Judge Bryson – no, naturally occurring

-Supreme Court – DNA is not patentable.  Isolation is not invention (change in chemistry does not alter functionality).  Even though they can be removed from body and used for functional testing.  Sequencing as same as naturally occurring substance (inner chemical features with functional ability).

-Separating gene from surrounding genetic material is not an act of invention.

-Chemical changes achieved by isolating gene do not change its functionality.

-Inner chemical structure similarities to naturally occurring, functional attributes.

-Such similarities imply isolated DNA is not “markedly different” from items in nature.

-But cDNA is patentable.  Chemically different with same functionality.  cDNA is not naturally occurring (chemical differences).  In cDNA, non-functional elements from DNA have been removed.  Look at inner structural difference.  Functionality changes don’t seem to matter; only chemical composition (i.e., Myriad test:  if chemically the same à not patentable; if chemically different à yes, patentable)

-Reducing or “editing” DNA to just its functional subparts creates new composition.

-Chemical difference from naturally occurring DNA establishes patent eligibility.

-cDNA found to be markedly different from regular DNA despite inner chemical structural similarity to naturally occurring, functional attributes of regular DNA.

-Isolation does not change chemistry (same is probably true for purification).


-should there be limitations to allow wider access to tests related to health?

-should there be patent law consequences for unreasonable product offering/licensing terms?  Should the government regulate such terms?

-should government take control of patent via eminent domain?  (e.g., force production of anthrax medication if terrorist attack seems imminent?)

(attractive ideas, but threaten patent system)

Analyzing particular inventions within Patent Eligible Categories


Does invention have:

-operational utility?

-beneficial utility?; and

-practical utility?


-what was publicly available prior art (look for instance of design in prior art)?  (note:  AIA has altered significantly)

-what are elements of claimed invention (e.g., stool: planar surface, 3 elongate members (claim 1))?

-do all of the elements of the claimed invention match up on an one-to-one basis with the elements of 1 prior art example? (trying to see if combination has been done before)  If not, invention is novel.


-what was publicly available prior art (generally the same as for novelty)? – was change nonobvious?

1-how big was change?

2-would average person in the field have looked at that prior art?

-what are differences between elements of claimed invention and content of the prior art?

-differences due to combinations of prior art

-differences due to additions to prior art

-would POSITA have been likely to produce claimed invention based on prior art?  If not, invention is nonobvious

Statutory Bars

-miscellaneous invention or application features justifying patent rejection on policy grounds

-tests track different policy concerns

-parallel treatment in pre-AIA statute more misleading than helpful

-several tests eliminated in AIA


-all from case law.  Should be new and “useful.”  Must possess 3 types of utility:

Operational:  does it operate the way it claims to?  Must be complete enough to operate as claimed.

Invention must complete and produce specified results.  For example, perpetual motion machines are excluded as not operational (don’t exist).  Forces inventors to complete and describe all invention features needed for operation.

Beneficial:  Must provide some modest beneficial result; doesn’t have to be better than others; can’t be detrimental or harmful (is there a lawful use for the item? even if harmful, like cigarettes)

Results of operation must have some modicum of practical benefit.  Benefit need not be superior benefit to benefit provided by similar items.

-Dimensions of desirability of benefit differ from person to person.

-Identifying whether benefit was superior would be difficult.  (“Better” is in the eye of beholder)

-Market popularity sorts out desirability. (eliminates need for examiners/court to assess which is “better.”

Sufficient types of positive benefit broadly construed

-e.g., inventions for entertainment sufficient (serves entertainment function)

-Rubik’s Cube had sufficient utility

-Cat entertainment procedure (shine laser pointer in front of cat, entertain cat) had sufficient utility – notoriously “bad” patent

-Method for child movement of a swing from side to side had sufficient utility – notoriously “bad” patent

Benefits are sufficient from arguably harmful devices with some lawful uses

-Improved cigarette designs (benefit = entertainment; social appearance)

-Improved radar detectors (banned in some states)

-Improved firearms

Example of no lawful use:  improved version of illegal drug with no medicinal use; or improved practice for concealing securities fraud (promoting/inducing illegal activity)

Items with no lawful uses do not have sufficient utility

Benefits are sufficient from morally suspect devices with lawful uses

-e.g., drink dispenser in Juicy Whip

-Potential to mislead customers as to source of drinks

-counterfeits are sometimes desired goods (e.g., cz as faux diamonds)

-drink dispenser arrangement may have had health benefits

-particular misleading uses regulated via fraud laws

Lowell v. Lewis – “useful invention” of Patent Act – merely descriptive.  Does not have to be better than other similar inventions (or have superior utility).  Only limitation was that utility cannot be mischievous or immoral, but that is no longer cited/true.

-What if invention does nothing?  Doesn’t say; lower court in Brenner interpreted that “no use” is ok so long as it is not injurious.  Now, “no use” is not enough.

-If not extremely useful, it will disappear from market.

Juicy Whip, Inc. v. Orange Bang – suit for infringement for post-mix dispenser that looks like pre-mix dispenser.  ∆ argues patent is invalid b/c no utility (deceptive/immoral).  Post-mix dispenser has less bacteria/mold than coming out of than pre-mix coming out of tank.  Really a bait and  switch; no chance for consumer to inspect product they are buying.

-PTO doesn’t balance against negatives:  any benefit satisfies benefit test

-Court:  counterfeits have utility

-but here, where is benefit to consumer?  Court doesn’t really say.  Maybe entertainment?  Looking at refreshing, frothy beverage; reminds them of their youth.

Practical:  must have practical benefit (not based on something in the future).  Must be described in practical form producing beneficial result.

-Invention claimed must have at least one practical application

-Application must entail “real world” use with immediate practical benefit to public (not just promising down the road)

-Concern is over promising partial results potentially patented before practical details are known (if awarded too son, may shut down parallel efforts)

Difficult issue particularly in chemical and biological fields

-Fields are unpredictable

-Some new chemical structures produce unpredictable functionality

-New chemical structures may be known while functionality and application are not yet identified

-Pressure to gain patent at earliest stage causes parties to assert minimal utility as sufficient.

Types of practical utility found not sufficient in Brenner (tried to argue that utility was that it could now be used for research (court rejects – not sufficient))

-1-increased scientific knowledge such as finding that one item produces a given physical or chemical result when used in a particular way

-2-partial research findings without a clear implication of public benefits from the results

-3-impacts on research animals that are not linked to likely similar results in humans (assuming that the results on the animals do not imply substantial beneficial use of the invention in animal husbandry or other animal contexts) (results on mice were experimental)

Brenner v Manson (1st to invent no longer matters; rule now is 1st to file) – priority of patent goes to 1st to invent (Ringold had patent; Manson later filed for same process; must show he had invented same process and it had utility prior to Ringold’s patent).  Examiner rejected – Manson didn’t have utility as of required date.  Manson argues a homologue steroid has tumor-inhibiting effect in mice, so his probably did too (similar chemical structure).

-Court rejects:  requires proof of tumor-inhibiting effect; no basis of Manson’s claim (not how chemistry works).

-Manson also argued that his process does create the steroid (enhanced knowledge).  Court rejects – must have utility/use (requires more than just not being harmful; must be specific benefit.  1-giving him a patent would block others from researching uses (no incentives for parallel inventors); 2-would rather reward first person who comes up with use (don’t want to reward partial results).

-Manson also argued similar compounds are now subject of scientific research (i.e., can be used for others to research b/c it might be useful).  Court rejects:  rewarding too soon; 10% chance of success (or whatever number) is not enough to reward.

-Requirement:  identifiable current practical benefit as described in application.

-Later case:  disease-curing drug is sufficient utility even where disease (or tumors) are artificially created; even if just on mice (we care about mice and may have beneficial effect on humans).


-does public have access to this design?

-AIA – filing date March 16, 2013 and after

If before à 1952 Patent Act

-Filing date:

-can be affected by provisional patent application; if within 1 year, file for regular patent application, effective date for filing is date of provisional application.

-Int’l filing dates: if you file in one country and then other countries (must be regular application) within 1 year, effective filing date for all patents is first date.  (must be Paris Convention country)

(for these first 2 – only works for whatever was in original (either provisional or international patent)

-continuation applications

-continuation-in-part:  some old matter (gets new date) and some new matter (have to look at prior art; gets continuation filing date)

Novelty Assessment

Invention is not novel and unpatentable if all elements of the claimed invention are present in a single prior art example.

-public revelation of item already available to public does not add to useful arts.

-no public benefit deserving of patent.

-prior public access may be shown from features of public items or public descriptions of items.

Novelty analysis resolves to one to one comparison of elements of claimed invention against elements of each candidate prior art source.

-if even one element is different then invention is novel relative to that prior art item.

-novel invention may still be unpatentable as obvious variation of prior art item (considered separately in testing for nonobviousness)

-can we point to prior instance of invention?

-needs to be exact same thing in one item.

-anticipation = a prior item exists; this new item is not novel (must be exact same thing).  i.e., old item anticipates new item.  Prior art can be description or item.


1-Determine critical date cutting off prior art.  (pre AIA=date of invention; now=effective filing date)

-35 USC §102 (pre AIA):  1) known or 2) used in this country or 3) patented or 4) described in a printed publication anywhere prior to the date of invention (critical date = date of invention) (can look to lab notebooks, etc. for date of invention)

-35 USC §102 (post AIA):  1) patented, 2) described in a printed publication, 3) in public use, 4) on sale, or 5) otherwise available to the public before the inventor’s patent application filling date (critical date = filing date)

2-Marshall relevant prior art (must fit into one of the 4 or 5 key categories (p. 338 & 342): public knowledge, use by others, printed publications, patented) (different under AIA)

3-Determine invention elements (interpreted as POSITA) (the more detailed, less likely to have exact match)

-determined from elements listed in invention claims

-meaning of terms in claims may require interpretation

-claims interpreted from the viewpoint of a POSITA

-process for claims interpretation is the same as that in determining infringement (“that which infringes, if later, would anticipate if earlier”)

4-Determine elements in each prior art source (including inherent elements à necessarily present) (inherency = present + POSITA would understand as present)

-A prior art item is deemed to disclose:

-features described or illustrated in the item so as to enable a POSITA to recreate the features

-Additional features which a POSITA would see are necessarily present (“inherent”) in the prior art item (Robertson)

-A prior art is not deemed to disclose:

-features that are present (e.g., visable) but not understood)

-features that are necessarily present but so rarely or insubstantially as to be effectively imperceptible (Seaborg)

5-One-to-one comparison

-if prior is the same = anticipation

-if later is the same = infringement

-But if later is broader than former à not anticipation

In re Robertson (diaper case) – Robertson claims patent for diapers with 3 fasteners (2 for fastening and 1 for disposal).  Issue = 3rd fastener.  Wilson had prior patent for diaper with 2 fasteners and said diaper could be rolled up and disposed.  Wilson argued 2 fasteners can be used to fasten together for disposal.

-Patent Board:  anticipation under inherency

-Court:  no anticipation/not inherent

-3rd fastener is separate and independent from other 2; no separate fastener in Wilson patent (inherent or otherwise)

-Concurrence (concurs on other grounds): Wilson patent teaches (discloses) 3rd fastener; discloses “dual purpose” snaps; argues Robertson claim does not demand 3rd snap, only snap functions

-Majority argues there was no inherency (to POSITA) in Wilson that snaps would align every time (in every version) to be dual purpose for disposal (i.e., not always implied).  (also says addition of separate fastening element not a mere obvious variation of Wilson design)

In re Schreiber – conical dispensing top for popcorn containers was anticipated by conical dispensing top used for any purpose (e.g., dispensing oil).  (for popcorn containers, shake and only a few kernels come out)

-Court:  1st patent is not limited to oil (anticipation in inherency)

-Dissent:  court recreated 1st invention and filled with popcorn.  Unreasonable to think that POSITA in popcorn field would think 1st patent applied to them or even look in so distant a field.

Tilghman – fatty acids à soap and candles (unappreciated anticipation or accidental appreciation).  Fatty acid was understood but not mechanism of how to create.

In re Seaborg – Seaborg tries to patent element that was created by prior nuclear reactor patent (but earlier patent didn’t disclose element.  Prior patent understood mechanism but not effect.  Opposite of Tilghman).

Unappreciated anticipation – element was undetectable (such a small amount) and surrounded by radioactive uranium.  (no contribution to public knowledge)

-Court permits patent – even if element was predicted in prior invention, it won’t be anticipated (or inherent in prior element) if element was undetectable and unable to be used by public (i.e., did not enhance public’s knowledge).

-Seaborg’s invention is novel b/c it adds element to public knowledge. (new to public, although probably just a vanity patent)

Public Knowledge

-Evidences that invention is already in the hands of the public.

-Under pre-AIA law, only public knowledge in the US precluded later patenting.

-AIA changes this, making public knowledge anywhere a basis for preventing patenting.

-known by others (other than inventor)

  1. what level of knowledge is required to suffice for public access?

-known in a way likely to come to broader attention

-brief knowledge, unlikely to be remembered and propagated is not sufficient.  E.g., drawing on napkin in restaurant is not enough without more.

-knowledge of even a few parties who are not constrained about disclosure may be enough if they are likely to disseminate

-for example, knowledge of desirable oil drilling techniques by parties interested in drilling is probably sufficient.

  1. how must knowledge be proven?

-Substantial corroborative evidence of both scope and timing of public knowledge is often needed (clear and convincing evidence)

-Documents (e.g., lab notebooks) or other circumstantial proof of prior knowledge is often key.

-Assertions of mere mental knowledge (that may void a highly valuable patent) are suspect.

-Points of doubt

-does testifying party remember scope of past knowledge accurately?

-does testifying party remember timing of past knowledge accurately?

National Tractors v. Watkins (known by others) – ∆ has patent for “Power Stopper Weight Transfer Apparatus” used for tractor pulling sleds.  π filed to invalidate patent – had been “known or used” prior to ∆’s invention. π’s original drawings were lost (on back of some tablecloth), but “recreated” drawings (by artist π hired) in 1977 to be examples of original ’63-64 drawings.  π says device was never built. (strong doubts about accuracy of memory).

-Court rules recreated drawings are not prior art – never available to public, never printed or published, never constructed, not likely to ever be accessed; unlikely to be brought forward as part of knowledge in area of tractor pulling.  Dead end piece of knowledge with regard to technical aspects.

-If invention is lost and re-invented à treated as if it never existed; rewards 2nd inventor for “new” invention.

-counter argument:  how can we know when art/invention is “lost?”

Use by Others

-use by others (that is, parties other than the inventor now seeking a patent) indicates that public knowledge of the invention is likely

-will prevent patenting if use was such as to make invention available to the public.

-avoids patents and constraints for available designs.

-secret use by inventor will typically not matter (although may raise issues of on sale bar)

-under pre-AIA law, only use by others in the US precluded later patenting

-AIA changes this, making use anywhere a basis for preventing patenting.

-Use is sufficient if

-undertaken openly in the ordinary course of business (or other non-business activities)

-in a  manner not subject to legal or physical confidentiality restraints

Rosaire v. Baroid Sales (used by others – secret use by inventor is ok; look at confidentiality agreements, etc.) – π’s patents are for methods of prospecting oil (pick up samples and test for gases).  ∆ argues Teplittz (employee of Gulf Oil) knew and previously used invention.  π admits Teplitz conceived idea prior, but did not publish or patent; claims it was an “unsuccessful experiment” (obscure field in TX – ∆ stopped pursuing process).  Teplitz test was used in field in TX, but counts as meaningful prior art b/c relevant POSITA’s were there (employees/workers – interested parties likely to spread around (which is unusual for employees)) and there was no attempt at concealment and no instructions of secrecy. (it was actually more than “unsuccessful” experiment – it worked as intended).

-Court rules π’s patents are invalid (∆ had previously used – valid prior art); used in ∆’s ordinary course of business (i.e., not secret).

Is test a business method?  Seems like it… tactical method to advise where to market, etc. (i.e., business advantage) (but happens to involve physical elements.

Printed Publications

Potential concerns:

-what are minimum features of “printed” items?

-not limited to items printed on paper

-any item recorded in a stable, retrievable form will suffice

-modern publications are often recorded in electronic form

-e.g., books, articles, web pages, newsgroup postings

-what are minimum features of “publications”?

-sufficient distribution to make access by specialists in the field likely

-important factors:

-number of copies distributed

-whether specialists were targeted

-whether recipients were constrained in further distribution and communication

-even indexing of a single copy in a retrievable fashion may make a printed document a publication.

-e.g., the indexing in a card catalog of a single copy of a PhD thesis in Germany was enough to   make the document involved a publication.

-date of indexing may equal date of publication.

-even wide distribution of a document subject to confidentiality restraints will not make the document a printed publication.

-hence, corporate technical manual kept as a trade secret does not become a printed publication even if presented to many employees (unless confidentiality protections are regularly ignored and illusory)

-Required features are defined functionally in light of likelihood of transmitting descriptions of device or process designs to the public.

Examples of printed publications for patent law purposes:

-Ink and paper documents – books, articles in journals, papers distributed at conferences without confidentiality constraints, product catalogs, single thesis copy filed in university library and indexed to aid public access

-Electronic documents accessible to the public – web site pages, blog or newsgroup postings, database entries, publicly posted items available only temporarily (where copying and further distribution was possible); the entire Internet is prior art

Examples of distributed items that are not printed publications:

-corporate documents distributed to employees who are under legal confidentiality constraints

-gov’t documents distributed to contractors with legend “Further Reproduction Not Authorized” and kept under physical access controls.

Underlying Policy of Printed Publications:

-Impact of present standards

-broad definition of printed publication imposes equally broad preclusive effect on patenting

-reliance on indexed documents anywhere in the world effectively presumes that relatively obscure publications and other written sources will be found, providing public access.

-based on belief that highly effective search capabilities will generally ensure that past, existing descriptions of useful items will be found by motivated parties when needed.

-presence of retrievable descriptions undercuts needs for special patent incentives to readdress and disclose similar inventive efforts.

-described inventions are treated as already available to the public.

-in earlier physical search era, likelihood of finding some items treated as printed publications was fanciful.

-recent electronic indexing, search, and retrieval capabilities make locating internationally-sourced printed publications more likely

-advances make presumptions of anticipation by printed publications more realistic than in era dominated by paper documents and mechanical searching.

In re Klopfenstein – π files for patent in 2000 for method of preparing foods comprising “SCF”; in 1998, π gave presentations at several universities (disclosing all elements of invention).  Printed slide presentation was put on display; no notice or disclaimer to prevent copying; no physical copies of presentation were handed out.

-Court rules “printed publication”

-Factors (there can be more/other factors):

-length of time it was displayed to public (days)

-expertise of audience (audience was cereal chemists – POSITAs)

-existence (or lack thereof) of reasonable expectations that material displayed could have been copied (no protective measures were taken)

-simplicity or ease with which displayed material could have been copied (improvement only took up a few slides – could have easily been copied or noted novel information)

-purpose of dissemination/display (or concealment)

-how likely is it to be disseminated to POSITA?  Could argue that if labeled “for academic use only” à understanding within community not to distribute (would be better to label “confidential only – do not distribute.”  Can also look at whether confidentiality is consistent with culture?  Similar to anding out to employees and marked “confidential.”

-what if powerpoint slides were posted on a website? (but not up for a long period of time)

-particularly easy to copy (electronic format)

-purpose – why else would you post on website (e.g., easy to disseminate)

-act of presenting may not be published, but posting on website could be publication

Implications on academic community?

-Under AIA, no 1-year window; if present on Monday, already a printed publication/prior art so can’t file for patent on Tuesday

-Creates pressure to go through patent screening process before presenting (but some universities may care more about being on cutting edge, not worried about low potential of patentability of presentation).  And competing policy = share information.

Prior art must describe how to make the invention and how to use (enabling); must be enabling disclosure.

Time of publication: indexing date at library or date document was typed (have to sort out)

-Relevant prior art regardless of country of source (under both pre- and post- AIA law)

-Significant overlap with prior art determined from prior publications

-issued patents are printed publications when published

-patent applications are printed publications as of their earlier publication

-patents (as patents) have narrower anticipation impact than publications

-patents anticipate only as to the subject matter covered by the legal rights they grant – that is, as to what they claim.

-printed publications anticipate as to their full contents.

-Key difference in anticipation impact of patents and printed publications

-in some legal systems, patents are legally effective before they are published

-in these systems, before its publication a patent may anticipate as to a claimed invention without yet being a printed publication

-at later point when patent is published it will anticipate as to its full contents

-Previously filed applications resulting in patents

-application denied if

1-same invention was described anywhere

2-in a patent application filed prior to applicant’s

-date of invention (pre-AIA Sec 102(e)) or

-date of application filing (post-AIA Sec 102(a)(2)) and

3-the application resulted in a publication or issued patent

(codifies holding in Milburn case – requires all 3)

-effectively makes patent applications that result in publication or issued patents prior art of their date of filing rather than their date of issuance (making rediscovery not “novel”)

-prior to publication or issuance, these are effectively “secret” prior art since another inventor cannot detect these applications due to USPTO secrecy rules and practices.

-rule is designed to deny patents for information that is already in line to come to public disclosure through a previously filed patent application

-patent incentives and constraints are not needed to encourage disclosure and public access

-may nonetheless achieve substantial unfairness to an inventor by denying him or her a patent based on prior art he or she could not have detected at the time of work on an invention (probably unfair to 2nd inventor)

-invites misplaced devotion of inventive resources to projects that cannot lead to patents

Reeves Bros. v US – Gebrauchsmuster (GM) – quick form of protection in Germany (no novelty or nonobviousness requirement)

-Why?  Quick/lesser protection (things with little or no commercial value); quick and easy way to establish claim.  Most will just go away; not enforced unless challenged.  “Baby” patent.

-Congress never differentiated between Utility Model patents (e.g., GMs) and our full patents.

-Germany files GMs, but doesn’t publish (court doesn’t analyze how it is indexed); not a printed publication.

-Court determines legally sufficient as a foreign patent b/c grants a shorter period of protection but GM still grants patent type rights (right to exclude/sell)

-Anticipation only for claims (only claims are considered prior art)

-GM is effective patent; GM is prior art and anticipates new claimed invention

Takeaway:  1-lesser patent-like interests are patents within US patent law

2-if published, all prior art as of publication date (regardless of whether in claims or not); if not published (but legally effective, e.g., GM), prior art is only what is in claim as of date rights are granted.

Milburn v Davis Bournonville – π’s patent filed 3/4/11 (treated as invention date – π couldn’t prove earlier invention date), issued 6/4/12.  Clifford’s patent filed 1/31/11, issued 2/6/12 (complete and accurate description of π’s patent, but didn’t claim it).

-secret description wouldn’t be enough (e.g., if Clifford kept invention to himself)

-if Clifford published prior to π’s patent, printed publication would  make π out of luck.

Application is treated like a printed publication (if patent is issued).  PTO is responsible for delay – their fault C’s application wasn’t published earlier.

-e.g., pretend PTO is really diligent and publishes immediately.  No need to reward 2ndinventor; public doesn’t get anything extra for awarding π.

-was in C’s disclosure, but not in claims.

-Controversial, but good law (“constructive” prior art – determined this way for policy reasons)

3 versions:

-π claimed what Clifford claimed (Clifford has priority)

-§102 anticipation:  π claimed what Clifford disclosed (actual case, π is out of luck)

-§ 103 obviousness:  Clifford discloses, π claims something similar (1 different element) – π         may still be barred, if obvious from Clifford’s disclosure.

Inventorship Problems

-an applicant is denied a patent if he or she did not invent the claimed invention

-two types of problem cases

-party participated in work leading to an invention but did not make a sufficient contribution to be a co-inventor

-party copied or “derived” the invention from the work of another

Invention Defined – an invention for patent law purposes entails the conception of an invention plus a reduction to practice.

2 steps:  conception = formulation of a complete mental image including all elements.                   reduction to practice = creation of a working example or instance of the invention.

Minimum Acts Needed to be a Co-Inventor

-a party must contribute to the conception of an invention in order to be a co-inventor (but co-inventor does not have to have equal role)

-where an invention is created in different forms described in different claims within one patent, it is sufficient that a co-inventor contributed to only one version of the claimed invention

-co-inventors need not make the same type or amount of contribution to an invention

-co-inventors must be working collaboratively on a single project rather than sequentially on independent projects

-later parties may be sole inventors of designs that build on the results of earlier projects through independent efforts

-actors that are insufficient to make a collaborating party a co-inventor:

-testing of design features specified by another party

-creation of a reduction to practice in accordance with an invention design specified by others

-management of resources or processes used in developing an invention design or example

(be careful not to list people who didn’t contribute (e.g., academic rule of listing faculty members, etc.))


-patent void if recipient can be shown not to be the inventor

-sometimes arises in direct dispute between inventor and deriving party who is entitled to patent

-may also be used by later ∆ to show that patent holder derived invention and patent is void

-issued patent is presumed valid, meaning derivation must be established by clear and convincing evidence

-proof of prior invention by a party other than the inventor named in a patient (or the senior inventor in a priority dispute) requires corroborative evidence

-corroborative evidence may be circumstantial evidence consistent with derivation

-e.g., in Campbell corroborative evidence was largely comprised of the surrounding factual details consistent with Zimmerman’s account (like the presence of a spring belt as inspiration)

-AIA creates special “Derivation Proceeding” (DP)

-DP is an administrative proceeding with USPTO

-allows a party filing a later patent application to prove that party filing an earlier application derived the invention from another

-if derivation is shown, earlier application is ignored

-DP proceeding is only available to the “true inventor” of the invention in question

-DP also requires that true inventor have filed an application for a patent on the same invention

-DP must be initiated within 1 year of issuance of patent or publication of patent application mistaking inventorship

-while DP proceeding is not available, a party can still challenge inventorship when threatened by infringement claims asserted by a party who derived his or her invention from another

-∆ in infringement suit will claim patent in dispute is invalid as granted to someone who was not an inventor within requirements of the Patent Act

Claims by Competing Inventors

Significance of Invention Priority

-Under pre-AIA law, a party was precluded from a patent if

-prior to that party’s date of invention another party invented the same item and

-the previous actor’s invention was not abandoned, suppressed, or concealed

-abandonment = long neglect

-suppression or concealment = affirmative steps to prevent public disclosure

-Priority standard implemented a first to invent rule under pre-AIA law

-First to invent issues arise in 2 settings:

-Interference proceedings:  triggered by 2 parties each claiming the same invention

-Validity assessments:  possible ground to reject a party’s patent application or void an issued patent due to another party’s prior invention (other party need not be a patent application)

-Interference characteristics

-administrative proceedings initiated by USPTO

-based on 2 claims to same invention

-USPTO must determine who is entitled to patent on disputed invention

-applicants will sometimes amend their claims to match another party’s, thereby triggering interference proceeding

-special features of priority determinations in interference proceedings:

-sufficient to show prior invention anywhere in the world

-contrasts with priority determination in validity disputes which require prior invention in the US to void patent

-presence of competing inventors in interference reduces problems in proving foreign invention

-Determining who was first to invent

-relevant factors

-conception = formulation of a complete mental image of the invention, including all elements and their interrelation

-reduction to practice = creation of a working example of item or process (need not work well)

(2 different dates)

-diligence = regularity of work to transform conceived invention into reduction to practice

(RTP is definitely invention, but sometimes date of conception is used)

-first to invent standard

-first to reduce to practice is first to invent, with one exception:

-exception: where party is first to conceive and second to reduce to practice, that party will be first to invent if he or she can show

-diligent effort to reduce to practice (starting at time of conception)

-extending from before the other party’s invention

-through the date of reduction to practice (slow and steady will win – helps small companies/individuals)

-evidentiary considerations

-application filing date sometimes relied upon as date of

-invention or

-reduction to practice (RTP)

-oral testimony as to conception, RTP, or diligence requires corroboration

-documentary evidence of same factors does not require corroboration

Combinations of Conception & Reduction Dates

-A conceives before B and A reduces to practice (RTP) before B

-A is first to invent because RTP is first and exception cannot apply (B was not the first to conceive)

-A conceives before B and A reduces to practice (RTP) after B

-B is the first to invent UNLESS A can show diligent reduction from just before B’s invention to A’s RTP (A’s diligence: -must start before B’s conception, -must go forward regularly & -must go through reduction) (B’s diligence doesn’t matter)

-A conceives after B and A reduces to practice (RTP) before B

-A is the first to invent UNLESS B can show diligent reduction from just before A’s invention to B’s RTP (A’s diligence doesn’t matter)

-A conceives after B and A reduces to practice (RTP) after B

-B is first to invent because RTP is first and exception cannot apply (A was not the first to conceive)

Campbell v Spectrum Automation – flexible feed track.  Campbell claims he told Zimmerman (former employee) how to build track (Z was agent of reduction on C’s behalf).  Z claims he came up with invention with help of his father after seeing rectangular shaped coils on his dad’s belt (Z has picture of dad’s belt).  C has original patent and is suing Z’s company.  Z has burden of proving with clear and convincing evidence C was not inventor (neither C nor Z had notes or journals).  Z meets standard; has corroborating evidence (other co-workers, picture of dad wearing belt, has detailed account of how he came to idea).  C has no description of where idea came from, no corroboration.

-Court:  C’s patent is invalid, he is not the inventor.

-Could dad be co-inventor?  Depends on who made the connection on how belt-coil design could be implemented for feed track.

Note:  usually, there is an ongoing patent assignment agreement with employees

-Shop Rights – limited right to continue using invention in own business (if employee was hired to invent or build new device)

-here, Z was not hired to invent.  Even if C had shop rights, wouldn’t have been able to sue Z for infringement (i.e., C wouldn’t have future rights); can’t expand benefit, but old benefit can’t be taken away.

-Invention = conception + reduction

Brown v Barbacid – Brown filing date: 4/18/90 (&RTP).  Barbacid filing date: 5/8/90.  Argues RTP of 3/6/90 (invention).  Lower court says Barbacid has priority. (Barbacid is initially junior party per filing date).  Now Brown tries to argue exception (i.e., conception date is prior to Barbacid’s RTP (and then diligence)).

-Brown has 2 experiments:  A- 9/20/89 and B- 9/25/89 (tries to argue for RTP on both dates)

-A- didn’t include 1 element of invention (has oral testimony from other scientist) (wrong thing being corroborated – missing element)

-B- oral testimony: full invention RTP; other scientist gives testimony but was on vacation

-notebook: unable to authenticate as related to 9/25/89 event (but higher court says it is authenticated) BUT didn’t confirm that it worked; only details of experiment.  Confirmation that it worked would have confirmed RTP – need to show successful reduction of all elements.

-Court: not enough to confirm RTP, but may be enough to show earlier conception date(i.e., permitted under exception) so long as continued diligence through RTP.

-Documents don’t need corroboration (if it fully speaks to issue, can show RTP)

-Under AIA, conception, RTP, etc. don’t matter – now first to file only

International Considerations – The Basic Patent Framework

-Patent Laws are generally territorial

-laws of particular country determine what can be patented, how to get a patent, and what rights a patent holder has in that country

-e.g., French patent law governs patent rights in France (to control an invention there, one must get a French patent)

-e.g., US patent law governs rights here

-Narrow exceptions to territorial limits on US patent laws

-a few standards of US patent laws have extraterritorial applications where foreign activities have US impacts

-e.g., foreign activity inducing infringement in the US

-e.g., foreign manufacturing that would infringe US patent laws if conducted in the US coupled with sale of the resulting goods in US (sales are infringing)

-Foreign inventors have equal rights to domestic inventors

-The Paris Convention requires “national treatment” – equal treatment of foreigners to that afforded citizens who are nationals (citizens) of the country in question.

-e.g., France must afford US and French citizens equal treatment

-as patent applicants

-as patent rights holders

Paris Act – foreign inventors have equal rights to domestic inventors

-should patent wherever you think manufacturing and shipping will occur (usually top 10 GDP countries)

-Consequences of national treatment requirements

-invention in one country can be source of group or “family” of related patents in countries with key markets or manufacturing capabilities

-French inventors can gain US patents for inventions in France and commercialize those inventions here with the same protections afforded to US inventors

-US inventors can similarly gain French patents for US inventions and commercialize inventions there

Key Issues

Inbound Patenting

-filing date for US patent applications

-Paris convention requires signatory countries to recognize first filing date in a signatory country as effective filing date in a signatory country as effective filing date for other applications in signatory countries within 1 year

-e.g., if a party files applications for patents on the same invention in France on 1/1/13 and in the US on 9/1/13, the effective US filing date is 1/1/13

-if the same party filed their US application on 2/1/14, that would be the US filing date

-prior art effective date for public knowledge


-public knowledge in a foreign country was not considered prior art (in contrast to foreign patents and foreign printed publications)

-foreign knowledge did not become prior art even when brought to this country (Westinghouse)

-only prior art when disclosed in patent, printed publication or filed app. ripening into patent (102(e))


-public knowledge anywhere is sufficient

-1 year buffer period from 1st file date (filing date of 2nd country will match 1st filing date)

-if outside 1 year window, filing date is not backdated (could be issues with your own disclosures from 1st patent or other patents that may have issued)

Outbound Patenting

-filing date and decision buffer period for foreign patent applications

Filing date rules under Paris Convention

-effectively establish a 1-year buffer period for US inventors to make decisions on where to file a second wave of applications and for drafting and filing these applications

-potential limitations

-only apply in Paris Convention signatory countries (WTO countries)

-only establish a filing date as to contents of the first application (added contents have actual filing date)

-procedures streamlining multi-country applications

-Shared search results

-Patent Cooperation Treaty (PCT) Chapter 1 Application

-party files PCT application in one PCT country

-patent office in that country conducts prior art search

-applicant later selects “national phase” countries

-results of search are forwarded to national phase patent offices where applications are examined

-procedures streamlining multi-country examination

-Shared search and partial examination results

-Patent Cooperation Treaty (PCT) Chapter 2 Application

-party files PCT application in one PCT country

-patent office in that country conducts prior art search and evaluates invention against prior art

-applicant later selects “national phase” countries

-search and evaluation are forwarded to national phase patent offices where applications are examined

-procedures streamlining multi-country enforcement

-Country specific enforcement

-European Patent Application

-submitted to European Patent Office (EPO)

-EPO conducts authoritative examination under European Patent Convention standards

-upon successful examination, patent can be registered in specific EC countries

-subsequently enforced like patents issued in those countries

-Unified enforcement

-European Union (EU) Unitary Patent

-recently authorized but not fully implemented (scheduled for implementation on 1/1/14)

-applications filed with EPO

-result in a single EU Unitary Patent

-EU Unitary Patent enforced in a single Unitary Patent Court

-Rulings binding in 25 EU Signatory Countries

-Patent Cooperation Treaty:  shared search results (US is a PCT signatory)

-US will not give up control of what gets patented in US (i.e., wouldn’t participate in something like European Patent Application)

(must be same version of invention to get same filing date (any add’l claims will get new filing date)

Westinghouse Machine Co v. General Electric Co. – Armstrong applied for patent in  US 6/28/05 (1905) (conceived invention prior to 1901 & 1902).  De Kando, foreign inventor, filed on 7/3/06.  Argues RTP in Europe before 1905 and knowledge was disseminated in US before Armstrong’s date of invention.  6/7/04 Waterman made a written report of invention he had learned abroad from De Kando and explained to POSITA.  6/19/05 Waterman explained invention to American Institute of Electrical Engineers in US (not considered printed publication b/c originated as foreign knowledge (unless patented or described in printed publication)).

Foreign originated invention (even if it comes to US) can never be prior art (once foreign, always foreign). 

Foreign use is irrelevant unless patented or described in printed publication (anywhere).

(US used to “grab” foreign IP rights and not grant foreign-invention protection)


-is it different enough? An “inventive step”

-don’t want to constrain public by patenting obvious inventions (high societal cost of patenting minor improvements (too frequent to adequately police through patent system))

Differences from novelty analysis

-assumes prior art-invention differences (novelty is assumed by the time we get to obviousness discussion)

-key prior art may be in two or more combined sources

-focuses on degree of difference from prior art in terms of barriers to invention

(look at: content of difference & technical significance of difference) (how likely was it that others would do?)

-key consideration is likelihood of similar advances from average practitioners

-inventions within capabilities of average parties are likely to be produced through normal competition without patent rewards

-public benefits from leaving these inventions outside patent constraints

Positive purposes underlying obviousness standards

-provides added incentives to produce some advances that are unlikely to be produced by bulk of potential innovators

-attracts scarce attention of highly talented inventors with greater than average skills

-rewards high risk takers working with unknown technologies

-encourages targeting new design approaches outside those presently relied on in the same field

-promotes disclosure and commercialization of products based on new approaches

-enhances and diversifies prior art in ways that support later design efforts

Typical Analysis Version 1 – Improving on One Prior Source

-one prior art source shows claimed invention except for one altered or added feature

-change or addition of different feature is an improvement over prior design

-obviousness turns on whether POSITA would be likely to explore such a change

Typical Analysis Version 2 – Combining Two Prior Sources

-one prior art source shows some elements of the claimed invention and a second source shows remaining elements

-claimed invention reflects recognition of advantages of combining sub-designs reflected in two sources

(usually viewed by courts as more likely to be obvious than scenario #1 b/c there is no discovery of new component)

-obviousness turns on whether POSITA would be likely to explore combination

-combination might be logical and obvious where each sub-design solved problems left unresolved by the other (and complemented each other in this way)

Typical Analysis Version 3 – Combining and Improving

-one prior art source shows claimed invention except for three features

-two of the additional three features are disclosed in a second prior art source

-last feature of invention was not in prior art but was added by inventor

-obviousness turns on whether POSITA would be likely to BOTH combine designs in two art sources AND add previously unknown feature

-as more and more differences are present from prior art, likelihood of exploration by POSITA diminishes

-greater differences tend to establish nonobviousness of resulting design

Invention Analysis in Hotchkiss

-case involved door knob designs differing from prior designs in composition of material used for the knobs

-earlier similar designs had been made of metal

-claimed invention substituted clay used in pottery or porcelain as knob material

-issue was whether advance constituted an “invention” for patent purposes

-issue incorporated question now addressed in obviousness analysis: was advance different from prior art in a way that made it a patentable advance?

-court holds that test is whether change in advance over prior art was within the ability of “an ordinary mechanic acquainted with the business”

-if advance could have been made by an ordinary mechanic, then not patentable

-if advance required “more ingenuity than skill” in applying old knowledge than possessed by the ordinary mechanic, then patentable (POSITA ≈ ordinary mechanic)

-what are skills of an “ordinary mechanic?”

-knowledge of widely held knowledge about common design adjustments and their probable functional implications

-example: an auto mechanic knows the features of a common car engine and the ways that tuning it in various ways will alter engine performance

-example: the equivalent of a “mechanic” in software design knows standard coding routines

-what are examples of advances resulting from the skills of an “ordinary mechanic?”

-advances (changes to prior designs):

-reflecting design change approaches within mechanic’s range of widely held knowledge; and

-producing functional results consistent with mechanic’s ability to predict success

-advances of this sort are likely to be pursued by mechanics to solve functional problems

-multiple sources of same advance are likely

-what are examples of advances unlikely to be made an “ordinary mechanic” (and nonobvious under current tests)?

-advances (changes to prior designs):

-incorporating changes that are not in directions of design variation widely known and used by ordinary mechanics in the same field; or

-that produce surprising functional results in solving a practical problem that would not be predicted by ordinary mechanics in that field

(i.e., originality in either area above)

Hotchkiss v Greenwood – door knobs; π tries to patent clay and porcelain knobs with spindles (clay and metal knobs with spindles already existed).  Advantage: clay knobs are cheaper to make (court doesn’t care) – not unexpected, although advantageous.  So little that was new, and what was new was implied by prior sources.

-Differences from prior art are no more than what an “ordinary mechanic” would do (mechanic capability test – is it within range of what an ordinary mechanic would attempt?).  Presumption that ordinary mechanic knows knowledge in own field and knowledge in allied field.

Allied Field – people who are trying to solve same problems, but are in different field (different design fields) (e.g., people creating items with clay and people creating knobs).  Where people in field regularly look to other field for prior art.

Graham v John Deere

-court says standard test for §103 (to analyze obviousness) should be:

1-assess scope and content of prior art and assemble prior art

-same categories of sources as considered for novelty analysis purposes

-sources must be in the same field as invention or in an allied field

-allied field is one which designers look to for information on how to solve shared design problems

-e.g., designers of plows might regularly look to metallurgy literature to identify proper metal formulation for flexible plow tips

(under new law, use date of filing instead of date of invention)

2-determine differences between prior art and claims at issue

-subtract features present in prior art from features in claimed invention

-keep track additionally of instances where multiple prior art designs are combined in the claimed invention

3-determine abilities of POSITA (level of ordinary skill in pertinent art)

-identify the relevant art field (that is, the relevant field of engineering or design)

-assess average level of training

-project types of analyses that parties with that training are typically able to perform

4-assess whether POSITA was likely to be able to span the differences and produce the claimed invention (if so, invention is obvious and not patentable)

-could POSITA perform the analyses need to transform the prior art into the claimed invention?

-could POSITA project the likely functionality of the claimed invention design and that it would solve the practical problem targeted?

Substantial uncertainties in basic Graham inquiry

-relevant prior art is difficult to identify (particularly sources from allied fields)

-skills of POSITA are frequently unclear due to wide differences in backgrounds

-projection of ability of POSITA to conduct analyses is highly speculative

-tendency to overestimate obviousness due to hindsight bias

Circumstantial Evidence in “Secondary Factors” (but not really secondary factors – courts often consider (easier than 4 steps above)

-circumstantial evidence sometimes provides alternative evidence of nonobviousness beyond basic Graham inquiry

-some examples of relevant circumstantial evidence were identified in Graham dicta as “secondary factors” indicating nonobviousness

-list of factors mentioned in Graham is illustrative, not exhaustive

-factors indicating nonobviousness cited in Graham:

-commercial success of invention upon marketing introduction

-suggests that there was strong public demand

-strong demand indicates that others were probably at work on same problem

-lack of other solutions suggest nonobviousness of successful solutions including claimed invention

-implications rebutted if success can be shown to have resulted from other factors (e.g., exceptionally extensive advertising) rather than the strong demand for the claimed invention

-long felt and unmet need for same item

-implies need was there and well known

-probably targeted by multiple parties seeking solutions

-lack of prior successful solutions indicates difficulty of task and probable nonobviousness of solutions including the claimed invention

-failure of others in attempts to produce the same item

-failed attempts of others to design items or processes that solve the same practical problem provide direct evidence of the difficulty of the design task and insufficiency of obvious approaches presumably tried by others

-ability of claimed invention to solve problem suggests that designer pursued a different, nonobvious design approach

-teaching away (mentioned in Adams) – features of technical literature or prevailing knowledge “teaching away” from the claimed invention (that is, suggesting that an item with a design like that of the claimed invention was likely to fail in its targeted functionality and purpose)

-features of technical literature or prevailing knowledge “teaching away” from the claimed invention suggest that few parties would target the claimed design approach

-ability of inventor to make claimed invention work indicates that he or she had insights that were different than the prevailing knowledge and nonobvious

Need to consider “Secondary factors

-“secondary” factors are sources of circumstantial evidence regarding resolution of “primary” non-obviousness analysis (e.g., Graham inquiry)

-secondary factors are relevant and should be addressed in every case where evidence on these factors is presented

-relative persuasiveness of evidence based on Graham inquiry and secondary factors is issue for fact finder

-often evidence is cumulative in that it points in the same direction

-where conflicting evidence is present, uncertainty regarding a particular factor (e.g., the level of training and skill of a POSITA) may cause disregard of one type of evidence

Graham – only difference from prior patent is the location of shank (from bottom to top)

-Court:  changes were in repertoire of what POSITA would attempt in order to try to fix problem (i.e., “would immediately see” to invert the shank and hinge plate).  Therefore, changes were obvious.

-Jefferson:  “mere change of form should give no right to patent” (e.g., round hat instead of 3-cornered hat)

Calmar v Cook – pump sprayer

2 differences: sealing rib and flat seal on gasket (both elements were found in prior art, in different places).  π argued people had been trying to fix problem, but hadn’t been able to (if it were easy for POSITA, it would have been invented by now).

-Court rejects:  issue was only longstanding b/c nobody did correct prior art search (answer was there if you looked for it).

-File wrapper estoppels – bound by representations made to examiner (can’t claim more elements or make broader claims).

-π solved leakage twice in invention (both of which were already in prior art).  π’s differences were “exceedingly small” – obvious to POSITA

-what does 4th step of obviousness test actually entail?

United States v Adams – patent is for wet battery operated by adding water; could not be shut off; current is constant.  π patents invention and takes it to military.  Injunctive relief is not available against gov’t – only damages for infringement.  Gov’t challenged validity of patent (claimed it was obvious).  Wet batteries with similar chemical compositions already existed.  Already knew magnesium could be substituted for zinc, etc. (i.e., all π did was substitute for already known substitutions).  BUT, π got surprising functional results (gov’t experts didn’t even believe it could work).  Functionality was a surprise (water-activated battery; most people in field thought that it would not work).

-Court looking for either a new and distinctive structure or a new and unique functionality. (here structure was probably obvious but not functionality)

-distinctive functionality also b/c battery produced constant, long-term power.  Also functions battery could serve in a practical context were very different as well. (emergency safety device for people in military). (great for emergency lighting – especially for navy)

-meaningful differences – look at mechanical and functional (functional may be more important)

-Teaching away – experts thought this couldn’t work.  Therefore, π was clearly diverging from regular teachings.

-Federal Circuits Test – exclusive test for deciding obviousness = TSM – teaching, suggestion or motivation.  If no proof of TSM à nonobvious.

-Supreme Court rejected as exclusive test (overly inclusive, would find too many things as nonobvious)

KSR v Teleflex – Teleflex has exclusive license of patent for an adjustable automobile pedal with electronic sensor that controls throttle in vehicle’s engine.  KSR challenges validity of patent.  District Court found obvious (using wrong analysis).  Patent holder argued sensor at pivot point = new and adjustable pedal = new (but still operates as a gas pedal).  Already patents for electronic pedal sensors; on a fixed part of pedal; Asano patent for adjustable foot pedal (patent examiner did not examine this patent).  Very modest difference from Asano to current patent.

-Court:  real issue was whether pedal designer of ordinary skill would have seen benefit to upgrading Asano with a sensor (looking at needs/goals in pedal/auto industry at the time).

-was benefit foreseeable?  Need for electronic control on pedal to throttle

-POSITA would have tried to put sensor on pivot point (non-moving) of petal.   Therefore, invention was obvious (many reasons design trials would lead POSITA to this invention).  Clearly predictable as successful choice.

-Court: lack of TSM does not necessarily mean nonobvious (i.e., TSM is not exclusive test) (TSM is sufficient, but not necessary)

-existence of TSM may be handled by courts, not a question of fact for jury

KSR fills in several analysis features

-POSITA assumed to have reasonable skill and creativity

-foresight of POSITA not limited to “teaching, suggestion, or motivation” (TSM) provided by specific prior art

-if POSITA could predict success of claimed invention knowing prior art sources then invention is obvious

-need both: 1-prediction that modification is one POSITA understands and can proceed to go in that direction (predictability in structure).  2-predictability in result/functionality (or could be proven with small amount of trial – obvious to try)

-a rational account of why POSITA would predict success is sufficient to establish obviousness

-the nature of the sources relied on in the account and the reasoning applied will vary greatly with invention circumstances (look at needs in the industry)

-rational account may depend on substantial “real world” knowledge of practical features

-approaches that are obvious to try:

-lead to obvious inventions where the approaches yield predictable types of results (with the need for only a few minor adjustments or fact finding follow ups to produce the claimed invention)

-do not render an invention obvious where the approaches yield unexpected or previously unpredictable results


-pre AIA – critical date = 1 year before filing date (102(b)) (inventor had total protection for 1 year) (but critical date for novelty is date of invention – 102(a))

-inventors own actions may hurt them

-prior art discloses both what it describes and further designs that are obvious from contents (103)

-on sale – offer to sell or sale and invention is actually reduced to practice or easily achieved reduction to practice. (gifts do not count – no commercial gain to inventor) (unless public revelation)

-secret commercial use = form of on sale activity

-secret commercial use by others on sale by other parties = not on sale activity

-“experimental use” doesn’t count towards statutory bar

-goal of improvement

-control over circumstances of use

-may include sale of some units

-testing against rivals is not experimental

-marketing test is not experimental

-under AIA – no grace period except for small exceptions

-narrowly defined disclosures within 1 year prior to filing date

-disclosure (by inventor)

-public disclosure (by 3rd party)

Pennock v Dialogue – π invented process for making tubing (1811).  Filed for patent in 1818 (here, no 1 year provision).  During this time, π gave Jenkins permission to make and sell hose (13k feet had been made and sold in Philadelphia) – secret commercial use.

-Court: π abandoned opportunity to seek patent

-“known or used before patent application” (including private use with commercial impact)

-withholding and commercializing and then later seeking patent protection is an abusive combination.

-private commercial use does count à bars patent (want to penalize) (even though public wouldn’t know how to make hose, which was actual invention)

Egbert v Lippmann – π invented spring corset.

-unconstrained knowledge of even 1 party is enough to qualify as public use (wife (gf at time) wore corset for years with no obligation of secrecy). π had also disclosed invention to friend at his house.

Moleculon Research v CBS, Inc. (Rubiks cube) – Nichols invented 3D puzzle (had disclosed all elements of disclosed invention to friends and Obermayer).  Boss (Obermayer) suggested π (employer) try to commercialize; Nichols assigned all rights to π.  Later, Nichols filed for patent.  ∆ argues public use and on sale prior to 1 year before filing.

-Court: Nichols controlled use at all times (close relationships with friends and roommates (“dead end disclosure”; unlikely to be spread to experts in field); brief use by Obermayer did not require confidentiality agreement).  Nichols’ use was private; boss was interested in confidentiality b/c they were trying to commercialize themselves (implied obligation of confidentiality).

-Assigning patent rights ≠ on sale (i.e., not on sale of units of invention) BUT selling wooden model would have been a sale of the invention.  (if induced to buy rights b/c of physical model, looks more like sale… but iffy) (could also argue no $ changed hands for model).

Patent Bar under pre-AIA 35 USC §102(b)

-Basic rule (pre-AIA)

-no patent if application is filed:

> 1 year after invention was patented or described in a printed publication anywhere or

> 1 year after the invention was in “public use” or “on sale” in the US

  1. failure to file within 1 year of prior disclosure

Novelty (§ 102(a))

Critical date = invention     Critical date 102(b)                   Date of filing


ß——-1 year———–à

Special exception for experimental use

New feature in 102(b) = on sale activity

  1. abandonment
  2. prior foreign filing

Differences from novelty determination (pre-AIA)

  • Critical date = one year prior to application filing date (prior art after this date is meaningless)
  • Inventor’s own actions considered
  • Prior art treated as disclosing both what it describes and further designs that are obvious from contents (parallel to obviousness analysis — 35 USC 103)

Prior art considered

-definitions of prior art categories of public use, printed publications, and patents are same as used in novelty analysis

-on sale activity adds prior art category

On sale activity

-invention is “on sale” when there is both

-an offer to sell or sale of the invention and

-invention is actually reduced to practice or knowledge is gained permitting an easily achieved reduction to practice

-public sales by inventor or others will constitute on sales activity

-secret sales of the invention by the inventor will constitute on sale activity

-reflects abusive attempt to commercialize invention while delaying public disclosure and access

-sales by inventor during the year prior to patent application filing allowed to test commercial waters

-secret commercial use of the invention by the inventor is treated as a form of on sale activity (holding of Metallizing case)

-present when inventor uses invention in secret to produce other items that are sold;

-treated as on sale activity because inventor gains the commercial value of the invention even if it is not sold

-similar secret commercial uses or sales by parties other than the inventor do not have similar effect (not treated as on sale activity)

-such uses or sales do not benefit the inventor

-no abusive long-term commercial gain by inventor while withholding invention from the public

-public is served by patent disclosing invention

Metallizing v Kenyon Bearing – ∆ argues public use before critical date.  Improved method for conditional metal surfaces.  Prior case law: public means public use (commercial private use ≠ public)

-court overrules (says they messed up in Peerless case)

-if people commit to commercialization, an abuse of system to delay and then seek patent

-secret commercial use by inventor = on sale activity

-secret commercial use by others is not a bar

Pfaff v Wells Electronics – π had order for sale of 30,000 sockets (4/8/81) (with his new improvements).  He had not made or tested a prototype but had detailed engineered drawings showing invention.  Manufacturer created product based on drawings (π testified he was confident design would work).  4/19/82 – filed application for patent.

-Court: invention was “on sale” – does not have to be RTP

-enough information that RTP could be easily achieved or patent could have been obtained (should convey to POSITA it is a very likely successful design (and be mechanically complete)) + offer to sell or sale.  Sufficiently detailed to enable POSITA to create. (and whether design is of type that frequently works or doesn’t work)

-How will engineers know if paper design is RTP equivalent? (i.e., must be patented within 1 year)

-court thinks this is a bright line standard

-if someone is buying invention, inventor has likely achieved RTP equivalent (similar confidence to what you would get after building)

-“on sale” = level of certainty and predictability of invention

(4 hypotheticals for on sale activity – P. 531)

-Sham Sales – if purpose was not to sell unit of object, but to get around statutory bar.

-Transfers b/w related companies are not considered sales.

Abbott Lab v Geneva Pharmaceuticals – ∆ argued patent invalid b/c chemical (Form IV) had been on sale for several years.  Form IV had been on sale by 3rd party but did not know identity of the particular form that they were selling.

-Court:  ignorance of invention is irrelevant.  Accumulated expectation of access to certain materials. (on sale by others is still a bar – public use)

-can’t withdraw items from market that people have come to rely on.

-doesn’t matter that neither buyer nor seller knew they were dealing with Form IV.

-problem is longstanding commercial use.  Sympathy for those who are relying on product in chain of commerce.

-probably issues with novelty also.

City of Elizabeth v American Nicholson Pavement – π had patent for new and improved wooden pavement.  ∆ argued invention was in public use 6 years before pavement.

-Court:  patent is valid (i.e., not public use)

-π had put down pavement for experiment and did not intend to abandon right to patent.

-even though normally disclosure is public use; purpose was to test durability and examine wear so that he could improve it (what alterations may be necessary) (analysis for possible redesign).

-viable testing process given nature of invention (only way to test roadway is high traffic for # of years)

-must keep track of use in order for experimental argument to be successful (show purpose of redesign and practices consistent with analysis for redesign – π daily came and examined pavement daily, asked people about it, etc.).  Good faith gathering of information (for redesign)

Purposes served by limiting 1 year grace period

-encourages prompt patent application filing

-avoids surprises to early invention adopters by discouraging inventors from taking or tolerating actions that may encourage broad use and reliance on advances followed by unexpected patent restrictions

-discourages long-standing commercialization of trade secrets with later attempts to patent

-helps independent inventors to publicize and test commercialization of inventions for up to one year before filing patent applications

Special treatment of “experimental use”

-activities by inventor that would otherwise constitute disqualifying public use or on sale activity are ignored if they involve “experimental use”

-objective is to avoid penalizing invention perfection activities

-different from “experimental use” doctrine excusing some infringement

-“experimental use” is strictly defined

-use must be for purpose of testing functional features of invention with goal of improvement

-control over circumstances of use and feedback to inventor on functional results of use generally needed to establish good faith goal of invention improvement

-sale of some invention units may be part of experimental use

-sale must assist in placing invention in typical use environment

-number sold must be consistent with experimental fact finding

-commercial gain allowed if incidental to product improvement effort

-types of “testing” not constituting experimental use

-comparative functionality testing – testing functionality of the invention against rivals is generally not experimental use

-market testing – testing the desirability to potential customers of an invention is generally not experimental use (if for marketing only (e.g., which one do you like better), not experimental use)

(but if results of testing went to engineering dept. for redesign, that would help) (needs to be invention improvement oriented activity

Changes under the AIA

-basic rule contains no grace period (post-AIA 35 USC §102(a)(1))

-patent is barred if the same invention was

-patented, described in a printed publication, in public use, on sale, or otherwise available to the public

-before effective filing date of present inventor’s patent application

Limited grace period provisions under AIA

-in applying the new basic rule just stated, the AIA adds a grace period provision:

-certain narrowly defined types of disclosures

-made 1 year or less before filing a patent application

-shall not be prior art to the claimed invention

-to qualify for this special treatment, a disclosure must be either:

-made by the inventor or by another who obtained the information from the inventor OR

-made after the subject matter of the invention was publically disclosed by the inventor or by another who obtained the information from the inventor (the later disclosures are assumed to derive from the inventor’s disclosure)

-disclosure is an umbrella term for description of the invention in any of the types of prior art considered re novelty

-thus, invention disclosure may occur via a patent, printed publication, public use, on sale activity, or other means making the invention available to the public

Limits of post-AIA grace period

-does not protect against patent bar due to publications or other disclosures not undertaken by inventors or following inventors’ prior disclosures

-scope of inventor disclosure needed to “publicly disclose” information is unclear

-opportunity for inventor to disclose invention prior to patent filing without losing the chance to obtain a US patent

-may promote inventor’s scholarly, commercial, reputational, or other purposes

-may still foreclose foreign patenting opportunity due to disclosure before filing

35 USC §102(c) (p. 338) – Abandonment

-applicant denied patent if he or she “abandoned” the invention

-two possible bases for finding abandonment:

-suppression (via affirmative efforts to keep secret)

-neglect (inattention leading to concealment)

-abandonment potentially found if party has

-concealed invention for a substantial period (thereby abandoning efforts to seek a patent or otherwise bring the invention to public light) or

-given no attention to efforts to develop or complete the invention for a substantial period

-only long suppression or long neglect will raise issues of abandonment

-allowing substantial periods of delay without finding abandonment encourages slow or neglectful inventors to still have incentives to renew attention to inventions, seek patents, and make disclosures

-long delay in patenting invention coupled with inventor’s secret commercial use will bar patenting due to on sale activity more than one year prior to patent filing

-on sale limitation for inventions with commercial gain places stricter limit on secret commercialization than abandonment standards

-courts are hesitant to find a sufficient delay to determine “abandoned” (i.e., if not commercialized, disclosed, etc. courts don’t want to bar) (courts will lean over backwards to determine delay ≠ abandoned)

Previous Foreign Patenting (pre-AIA 35 USC §102(d))

-specific sequence of prior foreign patenting will bar US patent

-applicant denied a US patent if:

-invention first patented by applicant in a foreign country (patent actually issued)

-based on an application filed more than 12 months before US filing

(don’t want foreign commercialization too far ahead of US commercialization)

-only important where applicant significantly mismanages sequence and timing of applications

-US applicant can avoid this bar via any of the following:

-apply for US patent first

-apply for US patent no later than 12 months after all foreign patent filings

-delay foreign issuances until after US issuance

(bar only kicks in if you don’t any of these 3)

  • 112 (p. 262)

-specification = text/drawings + claims

-written description must show:

-completion of invention


-best mode for practicing invention (can’t keep best version to yourself)

-distinct and specific claims

Drafting Strategies

-Broad claims: you only get what you ask for (i.e., better to be broad than narrow)

-but can’t be ambiguous

-Narrower claims are “fallback” claims in case examiner/patent is wrong (e.g., if later, prior art is discovered to invalidate claims)

-If too broad, claims will lack enablement requirement.

-New matter creates new filing date.

Format requirements

-one long sentence per claim

-extreme level of precision in language

-Comprising vs consisting of

(comprising = open) (consisting of = closed)

-can define words however you like

Patent Claiming Strategies

Broad claims have greatest potential value

-subject matters controlled by an issued patent are those described in patent’s claims

-broad claims language will generally cover more devices or processes than narrow language

-hence, broader claims are more commercially valuable as more items will potentially infringe the associated patent

-claim language must not just be broadened by ambiguous terms as this lack of specificity may void patent on vagueness grounds

Ongoing tension between claim breadth and possible invalidity

-Possible overlapping of prior art

-if claims are too broad, they will intersect with prior art (or be seen as describing something close to and obviously similar to the prior art)

-claims with this overlap are invalid due to lack of novelty (or obviousness)

-Possible lack of supporting enablement

-if claims are too broad, they may extend beyond what the inventor has actually discovered and what he or she can actually tell others how to replicate (or at least what the inventor’s patent application has described)

-claims with this feature are invalid due to a lack of enablement

-Ideal claims

-just narrow enough to distinguish the claimed invention from prior art

-as broad as invention can be enabled for replication by parties in the same field with average skill

-Ideal claims:  timing factors

-inventors may still miss the most commercially significant features of their inventions in initial claims drafts

-continuation applications can delay final claims drafting so as to fully size up the commercial implications of an advance and then draft claims language directly covering the valuable features

-Claiming in layers of specificity to retain fallback protections

-claims are typically stated in terms of broad initial or “independent” claims followed by a group of narrower and narrower “dependent” claims that add more and more narrowing details.

-Example of layers of increasingly narrow claims:

-independent: an automobile

-dependent: an automobile where the engine is located in the rear of the vehicle

-If the conduct or device of a ∆ falls within narrow claims that survive, this is enough to support relief for infringement.  Difficulty is that as claims are made narrower and easier to obtain, they are also less likely to be infringed.  Narrowest claims should still address commercially significant features.

-Claiming the Pencil

-Broad Claim 1:  a writing instrument, comprising a composition soft enough to leave marks on a writing surface, and means for holding said composition in a position to mark a writing surface.

-Medium Claim 2: a writing instrument according to claim 1, wherein the composition includes a substantial amount of either lead or graphite (the specification would broadly define lead and graphite)

-Narrow Claim 3: a writing instrument according to claim 1, wherein the composition is comprised of approximately 60% graphite and 40% clay, and the base has attached to it a deformable eraser capable of substantially erasing marks made by the writing instrument.

Enablement – sufficient invention description to enable replication and transfer

Enablement of POSITA Required

-Description of invention must give POSITA “full use” of invention without substantial experimentation.

-Description must provide POSITA an understanding of:

-elements of the invention and their interrelationships (static and dynamic)

-how to make and use the invention

-Disclosure obligation serves to:

-encourage completeness of experimentation as precursor to patent application and controls

-promote complete invention description and understanding within relevant technical community

-prevent parties from gaining patent controls while withholding key implementation details

Sources Considered in Determining Enablement

-Contents of specification (as understood by POSITA)

-Additional knowledge held by all POSITAs at time of patent application

-Additional knowledge that can be acquired via modest (not undue experimentation)

-look to how POSITA would understand specification (do not have to disclose basic knowledge that would be held by POSITAs)

Excessive Experimentation

-invention that can be implemented only through burdensome experimentation is not enabled

-burdens measured from the perspective of a POSITA as to experimentation needed to fill gaps in patent disclosures and provide sufficient information for invention implementation

-whether experimentation is unreasonably burdensome is determined in light of (Wandsfactors):

a) predictability of the art

b) skill of the POSITA

c) Quantity of experimentation required

d) Guidance for experimentation given

e) Presence or absence of working examples

f) nature of invention

g) information provided by prior art

h) breadth of claims

Prophetic Examples

-enablement of a few examples is sufficient if features of others are reasonably implied (with the aid of reasonable experimentation)

-aids small inventors (who would be burdened by need to describe most or all workable invention versions)

-promotes early patent filing and disclosure rather than waiting for understanding of all embodiments

Prophetic Example – coupled with predictability of field, allows inventor to prophesize that other versions of invention would work (e.g., different shape or size of cap on pen)

-must describe interrelationships of all elements (both static and dynamic features)

-whatever background is needed to make/use invention

The Incandescent Lamp Patent (Edison Patent)

-Sawyer & Man Patent – worked with a few versions of filaments (carbonized paper; wood carbon), but claimed all “carbonized fibrous or textile material”

-Edison works with special bamboo (which falls under claim of Sawyer & Man’s patent)

-If broad claim holds up, Edison is an infringer.  Edison did a lot of research to find out what worked (many materials did not work).

-Court:  S&M claim was too broad; Edison is not infringing.

-S&M’s claim was wrong – had no justification to think all fibrous material would work.  (cannot claim broad category if you cannot predict).

-if you discover species, can sometimes claim genus (if all versions in category function similarly), but if working in unpredictable field (biochemistry), can only claim invention and what is very similar.

Wands Factors (p 275)

-here, quantity of experimentation was huge.

-no guidance beyond wood materials

-working examples, but only with 2 wood materials

-nature of invention – invention had many challenges/problems (original S&M invention didn’t work well)

-no prior art that worked well

-no real skills (new field of research)

-highly unpredictable field

-breadth of claim = very broad

  1. 274 #9

-“open-ended claim” vs “close-ended”

-PTO rejected “open-ended claim” (that had lower bound but no upper limit – “at least 1 unit of ACTH hormone per milligram”) – court held insufficient disclosure.

  1. 276 #14

-Enable whom?

-high level of skill required (5-10 years creating recombinant pox virus); if you argue in favor of high level of skill, enormous research project may not be beyond scope of POSITA.  (“great expenditures of time and effort were ordinary in the field of vaccine preparation”)

-Pay attention to breadth of claims and description for enablement (breadth of claims / description should match (unless highly predictive field)).

Written Description Requirement

Statutory Source

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

-description must relate invention content to function

-description is inadequate if application describes solely a method and function with no connection between structure and function (Eli Lily)

Policy Basis

-sufficient description in original application confirms that applicant had possession of invention as of original application date

-if some elements are missing, application can be amended but takes on new filing date for amended version as of date of amendment

-encourages complete invention description and disclosure in original application

-discourages moving target of updated and expanded patent claims based on greater understanding of

-effective versions or extensions of invention

-competitor’s activities

Analysis of Amended Claims

-no “new matter” allowed in claims beyond original invention description

-if amended claims filed later depend on additional enabling content, then they were not within the original written description of the invention

-new matter creates new written description and a new effective filing date for related claims

-practical effect is that amendments involving new matter are subject to possible invalidity due to broader set of prior art

-prior art arising after original application filing and before amendment filing is not invalidating concerning original claims

-same prior art is concern as to amended claims involving new matter and a new filing date

-inventor’s own actions may accidentally invalidate claims based on new matter

-inventor mistakenly believing that original version of application describes an extended version of an invention may disclose or sell that version

-if extended version involves new matter not contained in original application, amendment filed more than 1 year after inventor’s actions will be subject to public use or on sale bar

Gentry Gallery v The Berkline Corp

-patent for sofa with recliners next to each other.  “controls mounted on the double reclining seat sofa section.”  Trial court – valid patent and no infringement.  ∆ manufactured sofas with 2 recliners facing same direction (controls on fold-down tabletop b/w recliners).

-Court: claim is too broad (claims in question are invalid).  π needed to provide details about rest of genus (i.e., “reclining sofa with controls in reclining segment”; species = “reclining sofa with controls in center console”).

-Disclosure of π’s patent didn’t disclose anything about where location of recliner controls is other than console.  Factors that there was not a complete description:

-implied that console was the only functional place to put controls

-π never considered placing controls anywhere else

-stated purpose of invention was to provide “console between seats that accommodates the controls.”  ß what POSITA would have understood invention to be based on what was disclosed.

-Court is looking for complete description of invention as seen by POSITA (and must describe fully connection between structure and function).  Why?

-expand scientific knowledge (to the advantage of scientific community).

-sometimes people can make things but not understand how they work inside (we want knowledge/understanding for future scientific use).

-By relying on broadest claims, may solve one problem (infringement), but create another (written description)

Ariad Pharmaceuticals, Inc v Eli Lilly & Co

-patent describes function, but not how to do it (i.e., protein mechanism can be inhibited)

-Genus = all molecules that would inhibit

-Species = 3 types of molecules that would possibly work (decoy, dominantly interfering, specific inhibitor), but no specific/concrete examples.  Didn’t describe set of structures.

-describes strategies for finding blockage molecules, but not much else.

-Court: categories fall way short – describing strategies for finding potential inhibitors is not enough.

-Must have possession and must describe possession.

-In new fields, must clearly describe (POSITA is coming in with blank slate), especially in unpredictable fields (e.g., chemistry and biochemistry).

-Didn’t describe how to implement all possible inhibitors or even provide examples.

  1. 306 1st paragraph (sufficient description of genus); representative # of species with common feature that accounts for functionality; enough to distinguish from materials that won’t work; established connection b/w structure and function (or structure is already part of prior art by mentioning function – here, no prior art (structural piece was not provided)); insufficient – “simply drawing a fence around genus.”

-Concurrence:  stuck with written description requirement until Congress changes.  If it does change, could serve priority function (but priority isn’t an issue anymore with AIA)

-Dissent: why do we need this requirement if we have enablement requirement?  Why do we need to understand inner workings?  Getting tools out is what really matters.

Enablement:  making and using invention (but still may be able to get process patent if structure is in prior art)

Written Description:  content of invention (inner structural workings of structure and function)

  1. 313 #4

-enablement = legal issue

-written description = question of fact

(both should probably be questions of fact (what POSITA would take away – would need expert testimony, etc.))

#3 – universities don’t want to disclose full mechanism in written description (agrees with Ariad π and not court’s decision) – want early patenting (based on basic research).


Definite Claims Requirement

Statutory Source – “the specification shall include one or more claims particularly pointing out and distinctly claiming the subject matter” 35 USC §112(b)

Policy Bases

-forces applicant to be specific

-promotes fair notice to potential infringers

-promotes consistent claims interpretations and infringement findings across multiple enforcement efforts

Test for Sufficient Definiteness (from Orthokinetics)

-definiteness test is whether POSITA would understand what is claimed

-claims at issue in Orthokinetics were sufficiently definite

-claims referred to car door as size indicator

-implied means to determine size of invention elements relative to car door in a way POSITA could understand and apply consistently

-Contrast the lack of sufficient definiteness in claims at issue Standard Oil

-Claims included term “partially soluble” which

-had no established meaning and

-was not given any particular meaning in patent specification

(POSITA wouldn’t know what “partially soluble” meant)

Orthokinetics v Safety Travel Chairs

-patent for collapsible pediatric wheelchair.  Claim = “front leg portion is so dimensioned as to be insertable through the space b/w the doorframe of an automobile and one of the seats thereof.” (not means + function).  POSITA’s would have in their mind range of car door dimensions.  Parties would consistently understand and be able to work with.  π wanted broad language to cover many models of vehicles.

-Court says sufficient detail.  Impossible to foresee future car models and dimensions (even though π didn’t list any models/dimensions).

Degree of specificity required is related to field.  POSITAs would know about car door dimensions.  Level of specificity that is common in field.  If you discuss car doors, POSITAs are familiar with range of dimensions.  Don’t want to force π to be too narrow.

In a means + function claim

Cuckoo Clock (normal claim)

  • #s on a clock face
  • Hands which move to indicate time
  • Cogs which move hands and respond to movement of pendulum
  • Pendulum moving in a periodic fashion to measure time

Could sub 3) for: (means + function claim)

3) means for responding to pendulum movement and achieving corresponding hand movement (only as definite as examples in specification).  (if drawing included cogs, cogs would be read into claim; would also get cog equivalents) (could be multiple specs with variations – all would be included).  If no drawing à ambiguous and vague.

  1. 321 #4

Standard Oil

-“partially soluble” – too vague/ambiguous

-could have been solved by providing range of solubility

-once patent is issued, cannot be fixed.

-can look at drawings for clarification as well (helpful in Orthokinetics case – picture of mom putting son/wheelchair in car) giving meaning to language in claim.  π will try to argue broad meaning.  ∆ will try to argue narrow/vague meaning (sometimes will try to insert limitation/narrowing feature to avoid infringement; e.g., car has to be inserted through passenger side, so doesn’t infringe patent for driver’s side version…)

Interpreting Claims vs Reading in Limitations à tries to add in limitation not specifically set forth.

Definiteness & Software Patents

-courts aren’t really sure what to do with software patents.

-“aesthetically pleasing” – no point of reference – too vague (and aesthetically pleasing to whom?)

-“game control means” = purely functional

-control is too open ended – how is it controlled?

-need input/output sequence (e.g., need to indicate how pendulum controls hands)

-need relationship of structure to function

-for software, algorithm is necessary to be sufficiently descriptive of structure (for definiteness)

Functional Claiming

e.g., Cuckoo clock means + function claim

1) if cogs described as “wooden cogs”

Prior art: if someone else produced similar design with steel cogs

-does other patent anticipate wooden cog patent?  Or

-is wooden cog patent sufficiently limited?

Yes à anticipation b/c “wooden” is not necessary to functional aspect.

What if other patent functions electronically (e.g., no cogs – structurally different)?

-scrutinize prior art only for those means that are structurally equivalent to means disclosed.

Functional Claiming & Software Patent

-is functional aspect + algorithm sufficiently definite?

-Maybe, some argue algorithms are not definite enough (not an adequate description of structure) (courts have not decided yet)

Best Mode Requirement

Pre-AIA version of Best Mode Requirement

-“the specification … shall set forth the best mode contemplated by the inventor of carrying out his invention.” 35 USC §112a

Post-AIA version of Best Mode Requirement

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

-gone, but not entirely

-Post AIA – failure to state best mode is not a defense (no longer an issue in litigation and other patent enforcement contexts) (effective in all cases filed after 9/16/11)

-prevents litigation hold up over best mode issues

-basically makes requirement useless in any enforcement context

BUT requirement is still in §112

-PTO will still apply as feature of examination

(would only come up with examiner if applicant claims best mode, but does not fully disclose; but just have to satisfy examiner (can amend)) (e.g., only an issue if thrown in examiner’s face)

-doesn’t make sense to leave requirement but eliminate defense

Inequitable Conduct (extreme misconduct – extreme penalty)

Duty to disclose (based on USPTO Rule 56)

-Patent application must disclose “all information material to patentability”

-Typical issues:  is information material?;  Sufficiency of disclosure of information; scienter in withholding information


-overcomes some information gathering limitations of non-adversarial patent application processes

-places fair burden on patent applicants seeking special and potentially valuable patent rights.

Proof required:

-materiality of undisclosed information

-intent to deceive

(both elements must be weighed separately – not a sliding scale)

Materiality – (“but for” misstated information, PTO would have come out other way; if PTO would have decided same way anyway, not material)

-information will be found material only if it is “but for” material – that is, if a court finds that the USPTO would not have allowed a claim if it had known of the information

-no materiality if, including the withheld evidence, a USPTO finding of patentability of the claim (giving the claim its broadest reasonable construction) was still supported by a preponderance of the evidence.

-materiality will also generally be found where applicant has engaged in affirmative egregious misconduct (such as filing an unmistakably false affidavit)

-applicant’s own sense that false affidavit is needed to obtain a favorable USPTO result provides strong evidence of materiality

-opportunity to show lack of impact on USPTO analysis not afforded to applicant in this setting

Intent to Deceive

-purpose or goal of deceiving examiner by withholding or altering disclosures must be shown

-mere gross negligence is not enough

-for undisclosed reference – need clear and convincing evidence that applicant:

-knew of the reference;

-knew it was material; and

-made a deliberate decision to withhold it.

-intent can be inferred from all circumstances:

-may be shown from what applicant knew and when

-actions indicating knowledge of materiality of withheld information tend to support finding of intent to deceive

-excuses for lack of disclosure tend to undercut showing of intent to deceive

Inequitable Conduct Consequences

-entire patent is invalid

-impact is not limited to aspect of patent directly affected by inequitable conduct

-if exceptional case – atty’s fees can be awarded

-legitimate patents trump antitrust law; BUT if patent is invalid, prior “infringers” may have antitrust claim (if π knew patent was bad)

Typical Examples of Inequitable Conduct

-failure to disclose known, material references, instances of public use or sales, relationships with affiants, or ongoing litigation regarding related patents

-use of false or misleading affidavits or data

intentional misstatements to examiner

-e.g., misstatement of portions of a prior application modified and superceded by an amendment would be inequitable conduct if intended to affect what portions of the application were continued to be examined.

-the same misstatement made through negligence would not be sufficient to establish inequitable conduct (Kingsdown Medical)

Therasense, Inc. v Becton-Dickinson, Inc.

-patent for disposable glucose test strips for diabetes (with no membrane)

-1995 (European patent) – π says membrane is optional but preferable

-1997 (US patent) – π submits affidavit saying membrane is not necessary (in order to distinguish from prior art for novelty/obviousness reasons); & POSITA wouldn’t have known membrane wasn’t required

(statements are directly conflicting)

-But, ∆ has to show π was aware of how EU office had filed and aware that they were saying something inaccurate in US patent (and was tactically aware of reason for incorrect US affidavit)

-Trial and court of appeals both found inequitable conduct

-Court:  π must have specific intent to deceive PTO (need clear and convincing evidence knew of reference, knew it was material, and made deliberate decision (purpose to mislead examiner).  And materiality is required (but for materiality – whether PTO would have allowed the claim if it had been aware of undisclosed reference).

-In Therasense, π would have had to have known of EU statement, known it was different from US and chose to use US statement to deceive examiner and receive patent)

-why such a high standard?

-harsh outcome

-usually person “responsible” for deception is atty – why punish inventor who brought invention to public?

Atty’s can be sanctioned and/or disbarred from patent bar.

*will be rarely found now

Symbol Technologies, Inc v Lemelson Medical (2002)

-prosecution laches in the PTO

-π’s design, manufacture and sell bar code scanners

-∆ had 185 patents and pending applications; sent letters to π’s customers claiming infringement.  π brings declaratory judgment claim; saying ∆’s patents are invalid and unenforceable (under equitable doctrine of laches – unfair delay).

-doctrine of laches may bar enforcement of patent claims that issued after unreasonable delay in prosecution even though applicant complied with pertinent statutes and rules.

-∆’s patents are entitled to benefit of filing date of 2 applications filed in 1954 and 1956.

-∆ allowed competitors to think of field as “open” – “submarine” – then rec’d patent using their advances. ∆ was amending/extending claims to specifically constrain competitors (improper motive for timing delay).

-Court:  there is such a thing as laches defense (fact specific – story of delay and implications/reasons for delay).  Must be unfair/unreasonable: 1) disadvantage/surprise to others in field who have invested time; 2) reason/tactics for delay.

-∆ argued that Congress got rid of laches b/c no mention in Patent Act.  Court rejects – Congress knew of laches and didn’t mention.  Therefore, intended for it to still continue; also people would assume silence = equity prevails.

-not really a problem anymore b/c patents filed in 1995 and later – 20 year window starts as of date of application, not date of issue.  BUT old rules still prevail for patents filed before 1995.

-laches in enforcement – waiting too long to sue for infringement (did π signal to ∆ that they wouldn’t sue? Unjust surprise).  (if delay is π’s fault and is unfair/unreasonable).

Trasnfers of Patent Rights

-Assignments vs Licenses

-Assignments = transfer of ownership of patent; effectively transfers control over associated bundle of enforcement rights

-Licenses = no change in patent ownership; transfers permission to do something that would otherwise be infringing

Assignment Issues

-insufficient transfer terms may leave patent rights in the hands of an inventor

-Stanford case in which employee’s agreement with university was a mere promise to make a future assignment.

-Employee was able then to make a later effective assignment to Cetus.

-Bayh-Dole Act did not alter patent ownership starting point in the inventor.

-recording of assignment can clarify patent rights ownership in the face of multiple transfers (e.g., Waterman)

-transfer can be recorded in USPTO registry (operates like registry to record land interest transfrers)

-recording provides constructive notice of transfer to the world (cutting off possible interests by later BFPs)

Exclusive Licenses


-permission to engage in otherwise infringing conduct coupled with

-promise not to give similar permission to anyone else (hence exclusivity of permission)

-dimensions of exclusivity

-may only be exclusive along certain lines of use

-exclusive license to sell patented item in CA

-exclusive license to sell (but not make) patented item (i.e., someone else has right to manufacture)

-exclusive license to incorporate patented item within cars being manufactured and to sell the item along with cars (but not use the patented item in any other way)

-standing to contest infringement

-exclusive licensee can bring suit on patent for infringement provided licensee has “all substantial rights” in the patent

-exclusive licensee may be real party aggrieved in these circumstances and the most strongly motivated party to contest infringement

-exclusive licensee injured through loss of exclusivity and displaced commercial activity

-patent holder not injured if royalties paid (i.e., patent holder only keeps right to royalties – no motivation to go forward with suit for infringement)

(both have standing to sue)

(if exclusive in geographic area, can sue (e.g., licensee has all rights in CA, can sue for infringement in CA)

(owner of partial rights will not have standing (e.g., just to sell))

Non-Exclusive Licenses


-permission to engage in otherwise infringing conduct

-no promise that patent holder will not give similar permission to other party

-possibility of additional licensees means initial licensee has no advantage from exclusivity

-functions like a covenant not to sue for infringement

Waterman v MacKenzie

-π sued ∆ for infringement; ∆ argued π was not owner (licensed to wife à assigned to Asa Shipman); wife à exclusive license to sell and manufacture (husband didn’t transfer right to use); i.e., no transfer of title.  Wife assigned to Asa Shipman, to be reversed upon full payment of full amount (i.e., mortgage).  Wife tries to assign back to husband (ineffective b/c transfer to Shipman was recorded (i.e., constructive notice of transfer)).

-Takeaway:  labeling of agreement doesn’t matter, content does (assignment vs. licensing).  Strong incentive to record to prevent licensors from licensing same rights twice.

  • 261 – Patent Recording Statute (p. 115)

-assignment/transfer void against subsequent purchaser without notice (similar to Waterman)

-attributes of personal property

-applications for patents can be assigned (must be in writing)

Stanford v Roche Molecular Systems, Inc.

-Dr. Holodniy joined Stanford as research fellow, signed a Copyright & Patent Agmt (CPA) – language: “agreed to assign” to Stanford his “right, title and interest” in inventions resulting from his employment at university (weak, forward looking language)

-Dr. H started conducting research at Cetus, signed Visitor’s Confidentiality Agmt (VCA) – language: “will assign and does assign” to Cetus his “right, title and interest” (present assignment language)

-Cetus agreement prevails, owns patent rights (if Stanford had Cetus’ language, would own patent rights)

Must include “present” language

-Bayh-Dole Act (federally funded research) – contractors (e.g., Stanford) may “elect to retain title to any subject invention”.  Does title initially vest in gov’t or inventor?  Inventor gets title, gov’t gets non-exclusive license.

-in other areas of IP, any work made while employed belongs to employer (work-made-for-hire) (e.g., copyright)

-not in patent law – need contract to give rights to employers

Lear, Inc v Adkins

-π hired ∆ for help with gyroscope; π incorporated ∆’s invention (∆ later patented); ∆ wants royalties; π argues invention is not novel and argues fraud; ∆ argued π had license agmt and was obliged to pay royalties

-Agmt: if patent is denied or is invalid, π can terminate license.  Ownership to ∆, license to π. (patent was in PTO office for 6 years, π figured patent wouldn’t issue and π wouldn’t have to pay royalties)

-π challenging validity of patent benefits public (permits full and free competition); alwayswant to encourage patent challenges (and licensees have economic incentive).  (policy to favor patent law over contract law).

-What about 5 years pre-patent (while it was pending)?

-Court – π really got a trade secret license (π got benefit (i.e., any royalties probably due for that time period); trade secret goes away once patent is published); no public interest in challenging trade secret validity (confidentiality b/w 2 parties based on trust) (kind of re-establishes licensee estoppels without calling it that).

Challenges to Patent Validity Outside of Patent Enforcement Suits

USPTO Post-Grant Proceedings Concerning Patent Validity

-ex parte reexamination

-can be initiated by any person demonstrating a “substantial new question of patentability” regarding an issued patent

-question must be based on patents or printed publications only (that examiner didn’t consider) (other prior art is not considered)

-USPTO has discretion about whether to initiate reexamination proceeding (requires examiner to admit they made a mistake)

-ability of party other than patentee to participate is very limited (only primary participant is patent holder)

-only granted opportunity to reply to applicant’s opening statement regarding the reexamination issue

-patentee may amend claims to narrow coverage and avoid successful challenge

-patentee may not expand claims

-USPTO Director may alter patent in reexamination by

-cancelling any patent claim determined to be unpatentable and

-incorporating any amended claim determined to be patentable

-rarely used by parties attacking a patent

-ex parte challenge will reveal their strategies of attack

-yet challenger will have no control (and very limited involvement) in how the challenge will proceed in the reexamination process (has no ability to argue points they have raised; relies on examiner)

(After AIA changes, almost no reason to use)

Inter Parte Reexamination – Pre-AIA

-reexamination provisions in effect from 1999 to 2011 provided for inter parte challenges to patents with some adversarial participation of parties other than the patent holder

-however, limitations on bases for patent challenges caused procedure to go largely unused (less discovery than post-AIA; challenger doesn’t get as much participation as post-AIA)

Inter Parte Challenges – Post-AIA

-two types of inter parte challenges

post-grant review (PGR):  establishes a “mini trial” regarding validity (challenger gets to participate) (goes through PTO instead of court)

-establishes meaningful administrative means to challenge validity of issued patents

-achieves several advantages over litigation

-streamlined procedure

-utilization of USPTO expertise

-any party can challenge the validity of an issued patent or reissued patent

-within 9 months of the issuance or reissuance

-based on any ground that could be raised in a district court proceeding (must include a lot of info from the start (essentially a detailed brief))

-challenge initiated by submission of a petition for PGR to USPTO

-PGR initiated only where USPTO Director finds that information in the petition for review “would demonstrate that it is more likely than not that at lease [one] of the claims challenged in the petition is unpatentable.”

-once PGR is initiated limited proceedings on validity held before Patent Trial and Appeal Board (PTAB)

-focused discovery on factual issues raised by petitioner and patent holder

-patent holder can file amended claims that are supported by the specification, that respond to the issue raised by the petition, and that narrow the claims’ scope

-PTAB may order cancellation of claims found unpatentable

-appeal of PTAB action in PGR is to the Federal Circuit

-civil suits filed after PGR is under way are stayed until resolution of PGR

inter partes review: expands involvement of complaining parties but still limited to challenges based on patents and printed publications (after 9 months is up)

-post-AIA replacement for inter partes reexamination

-anyone – patent holder or 3rd party – may request a review of an issued patent

-requestor must show that there is a “reasonable likelihood that the requester would prevail with respect to at least one of the claims challenged in the request.”

-challenges limited to arguments based on patents and printed publications

-inter partes review proceedings include expanded involvement of complaining parties and patent holders in limited discovery (not as extensive as PGR), declarations and hearings

-a patent holder can avoid invalidity issues by submission of substituted claims (narrowed claims)

Declaratory Judgment Actions Challenging Patent Validity

-Declaratory Judgment Act Requirements

-“in a case of actual controversy within its jurisdiction … any court of the United States … may declare the rights and other legal relations of any interested party seeking such declaration, whether or not relief is or could be sought.” 28 USC §2201(a)

-supports attacks on patent validity without suits by patent owners

-substantial controversy between parties is required as indicated by such factors as:

-presence of a “definite and concrete” dispute

-dispute “touching the legal relations of parties having adverse legal interests”

-dispute that “admits of specific relief through a decree of a conclusive character”

-case that does not turn on a “hypothetical state of facts” (court doesn’t want to touch)

(under what circumstances can you invoke?  Cease and desist letter, others doing similar things have been sued, after reading patent think you might be infringing (probably hypothetical), sued previously for infringement)

-case and controversy present where:

-payment of a claim is demanded as of right and where payment is made under threat of coercion

-thus, a patent licensee in good standing (having paid royalties due to date) can still bring a declaratory judgment action challenging patent validity due to coercion present in threat of suit based on license breach. (MedImmune)

MedImmune – declaratory judgment action to declare patent invalid – didn’t want to pay royalties anymore; sufficient standing b/c stopping payments/breach of K would open them up for breach of K damages and infringement lawsuits (i.e., threat of adverse action is sufficient – ok even though no breach of K and no infringement suit) (note: not precluded by estoppel)

Patent Infringement

Types of Patent Infringement

-Direct Infringement (35 USC §271(a))

-improper activity involving a patented invention (i.e., makes, uses, offers to sell, sells or imports)

-restricted by Reverse Doctrine of Equivalents

-Under Doctrine of Equivalents

-improper activity involving the equivalent of a patented invention

-restricted by Prosecution History Estoppel

-Aiding Infringement by Others (held liable even if you yourself didn’t infringe – deterrence and possibly easier to go after you than actual infringer)

-inducement of infringement (35 USC §271(b)) (knew of likelihood of infringement or should have known; if no infringement, no liability; positive act of encouragement)

-involving conduct encouraging infringement by another party

-contributory infringement (35 USC §271(c))

-involving conduct contributing a key item (not patented of itself) that aids infringement by another party (probably commercially benefitted from infringement; want to disincentivize; may have aided thousands of infringers) (e.g., Morton salt guilty of selling odd shaped salt tabled designed for use in patented machine; designed to capture people who are feeding infringement process)

-Infringement in Connection with Export/Import Activities (contributory if ∆ produces part in US)

-Export Activity to Promote Extra-US Assembly of Patented Invention (35 USC §271 (f)(1))

-party supplies in or from the US separate components of a patented invention in such a way as to actively induce the combination of such components outside of the US in a manner that would infringe the patent if such combination occurred within the US

-Export Activity to Supply Key Component for Extra-US Invention Use (35 USC §271 (f)(2))

-party supplies in or from the US a key component of a patented invention intending that such component will be combined outside of the US in a manner that would infringe the patent if such combination occurred within the US

-Importation of Products Made Elsewhere with Patented Process (35 USC §271(g))

-party imports into the US or offers to sell, sells, or uses within the US a product which is

made outside the US by a process patented in the US

Assessing Direct Infringement

Direct Infringement Test

-whoever “without authority, makes, uses, offers to sell, or sells any patented invention, within the US or imports into the US any patented invention during the term of the patent therefor” (35 USC §271(a))

-One-to-One Claim Element Analysis

-whether accused item or conduct involves patented invention turns on one-to-one comparison of claims elements and item or conduct features

-complete match is required

-meaning or “interpretation” of claims often determines what is required and whether complete match is present

Reverse Doctrine of Equivalents (RDOE) Restricts Findings of Direct Infringement(infringement disqualifying test)

-even where complete match of claims elements and accused item features is found, no direct infringement is present if item involves a different:

-means of operation

-function during operation or

-result of operation

(only need 1 difference) (i.e., superficial similarity, but might be new invention)

-RDOE recognizes superficiality of test based on claims language (recognizes words are always only partial descriptions)

-mere superficial similarity of invention fitting claims language is not enough to establish infringement where inner content of new invention is meaningfully different

-encourages parties to reengineer old items to produce externally similar functionality through fundamentally different inner means

Assessing Infringement Under Doctrine of Equivalents (i.e., if elements aren’t the same, are they equivalent?) (e.g., dots instead of numbers on a clock) (same means of operation which function in a similar manner to achieve the same result (at element level))

-infringement present under doctrine of equivalents (DOE) if accused item is equivalent to the claimed invention

-accused item is equivalent to the claimed invention if it entails the same:

means of operation which

function in a similar manner

-to achieve the same result

-DOE ensures that parties cannot avoid infringement by making inconsequential changes to a claimed invention

-DOE also adjusts scope of infringement and patent rewards to the full range of invention equivalents enabled by a claimed invention

-equivalence determined at infringement

DOE Infringement Limited by Prosecution History Estoppel (can’t grab under equivalents what they already gave up)

-even if accused item would otherwise by deemed equivalent to a claimed invention under the DOE, no infringement will be found if patent holder is subject to prosecution history estoppels

-prosecution history estoppel:

-party who has given up initially claimed subject matter in patent prosecution is estopped from reasserting the same subject matter as an equivalent under the DOE

-practical effect is that narrowing amendments of claims to avoid prior art preclude later expansion via DOE

-avoids having a party represent to an examiner that there is no claim to a type of invention and yet later gaining the effect of such a claim via the DOE

-ensures consistency of claims evaluation by preventing applicant from presenting the same claims narrowly to an examiner and then broadly in litigation


-applicant initially applies for a patent on a 3 legged chair

-examiner finds prior art example of wooden 3 legged chair and rejects claims

-applicant amends claims to cover only 3 legged chair made out of steel and patent issues

-patent holder is estopped from using DOE to assert that wooden 3 legged chair infringes

(also estopped from claiming plastic chair b/c patentee chose to limit to steel – estoppels kicks in for everything you gave up) (can arguably win if narrowing was not done for purposes of patentability (but why would this ever be done?  Would be bad lawyering to unnecessarily restrict patent)

Merrill v Yeomans

-∆ argued π’s patent only covered process, not oils (product) themselves.

-patent: “new manufacture of the deodorized heavy oils.”  Manufacture can mean both process and article.

-“by treating them [can mean both product or process] substantially as hereinbefore described.”

-Ct concludes patent is for process only (does not include product).

-Looks to language in specification, seems to talk about invention as a process, not a material.  How to do and why superior. (“my invention will be used to produce heavy oils” – should have said he was claiming item and process.

-must have ambiguity in claims before going into specification language for interpretation.

-“peripheral” claiming – claims define outer boundary or periphery of inventive space owned by inventor.

Phillips v AWH Corporation

-∆ had baffles at 90 degrees.

not a means + function element (district court got it wrong).  Because there is structure in element à presumption of “regular” treatment (i.e., not means + function element)

-Look at what POSITA would have understood.  Look at how term was used elsewhere in written description, prosecution history and extrinsic evidence (dictionaries, treatises – should have less weight than intrinsic evidence; maybe for words that don’t have special meaning i.e. if POSITA would have general meaning in mind) (Also, technical dictionaries for words common in field) (how POSITA would have understood term)

-extrinsic evidence is troublesome – generated after time of patent prosecution.  Expert testimony or inventor testimony – what really matters is what POSITA would have thought.

-internal usage of “baffle” is not inconsistent with broad definition of baffle.

-nothing to indicate baffle can’t be at 90 degrees.

-Note: when interpreted this broadly, is there conflicting prior art?

Lessons from Phillips

Identifying Means + Function Claims

-generally a claim element including the words “means for [accomplishing some described function]” (or equivalent words) will be seen as a means-plus-function element requiring interpretation under 35 USC § 112(f).

-however, an element including both “means for” language and other structural details is rebuttably presumed to be a regular claim element subject to normal claims interpretation

-thus, claim element including “means … for increasing its load bearing capacity comprising steel baffles” specified structure in the steel baffles and was presumed a regular element

-presumption that element including both “means for” language and other structural details is a regular claim element might be rebutted by evidence indicating that the structure described in the specification was the only one sought to be claimed.

Interpreting Means-Plus-Function Claims

-invention modes described in specification strictly limit means-plus-function element

-element covers only the portion of the structure described in the specification that accomplishes the indicated function plus

-other structures accomplishing the same function with similar means and results (look for close equivalents that accomplish same function)

-additional elements not in means-plus-function form are given normal treatment

-thus, had claim element in Phillips read “means for increasing its load bearing capacity,” element would have been treated as means-plus-function element

-specification disclosed only inner baffle structures with acute and oblique angles

-claims would require baffles with such angles

-baffles with right angles would not infringe

Identifying Regular Structural Claims

-claims intended to describe the structure of an invention element are subject to interpretation to determine the meaning likely to be given claim terms by a person of average skill in the art (once we know what claims require, written description must describe enablement for all claims)

-district court interprets claim terms and instructs jury (Markman)

-jury determines infringement in light of interpreted meaning of claims

Sources Used in Interpreting Structural Claims (Phillips)

-internal evidence of meaning (related to the patent at issue)

-words of the claims

-remainder of the specification

-prosecution history

-extrinsic evidence (from outside the patent at issue)

-relevant scientific principles

-meaning of technical terms

-state of the technical art underlying the patent

-internal evidence will prevail over conflicting external evidence

Sources Used: Words of Claim

-can show meaning from


-meaning given similar terms in other claims

-differences in other claims that imply meaning in disputed language

Sources Used: Specification Outside of Claims

-can show meaning from

-explicit definition of terms (even if contrary to common meaning)

-description of how to make or use the claimed invention may imply meaning for disputed terms

-description in specification may indicate applicant’s affirmative disavowal of claim scope

Sources Used: Prosecution History

-can show meaning from

-representation of term meaning or claims scope to examiner

-meaning given term in prior art cited to examiner

-meaning given term by examiner without objection by applicant

Sources Used: Expert and Inventor Testimony

-can show meaning from

-generally prevailing meaning of technical terms in field of patent

-issue is understanding of person of average skill not highly skilled expert or individual inventor

Sources Used: Dictionaries

-can show meaning from

-establishing (via dictionaries covering technical terms in the field of the patent) the widely understood meaning of technical terms

-establishing (via general dictionaries) the widely understood meaning of terms where the person of average skill in the art would be likely to use that meaning rather than some special technical meaning in the specific art

Sources Used: Learned Treatises

-can show meaning from

-establishing the meaning that most persons in the field would gain by consulting standard reference texts in the field

-issue may still be whether treatises are aimed at top scientists or engineers and therefore not reflective of the understanding of a person of average skill in the field (be careful what audience treatise is aimed at)

Applying the Doctrine of Equivalents

Identifying Equivalent Inventions

-Under the Doctrine of Equivalents (DOE), an accused item is equivalent to a claimed invention and infringing if each element of the claimed invention has in the item:

-an identical element; OR

-an equivalent element

-Equivalency analysis is conducted element by element and for the invention as a whole.

-elements are equivalent if they involve the same:

-means of operation which

-function in a similar manner

-to achieve the same result

-equivalents are limited by prior art

-item present in prior art or obvious from prior art will not be seen as an equivalent

Limiting DOE Impact Through Prosecution History (usually the only reason for claim narrowing is for patentability; BUT also available for parent holder to try and show not related to patentability (need positive reason, not accidental/forgot; presumption narrowing was done for patentability – Even if applies, cannot reassert claim unless they can show POSITA could not have literally described subject matter now being claimed)

-steps in prosecution history estoppels (PHE) analysis:

-determine if accused item would otherwise infringe under DOE

-determine if PHE applies

-if PHE applies, determine if PHE precludes assertion of claim to infringement by accused item

-PHE provides that claim breadth given up by applicant in prosecuting a patent generally cannot be asserted via DOE

Determining if PHE Applies

-if claim breadth was narrowed for a substantial reason related to patentability PHE applies

-burden is on patent holder to show reason for a narrowing claim amendment

-substantial reason related to patentability is presumed to underlie amendment narrowing claim scope unless different reason is shown

Determining Impact of PHE if Applicable

-Once PHE applies, patent holder cannot use DOE to reassert claim to subject matter given up in narrowing amendment unless

-patentee can show that

-at the time of patenting

-one skilled in the art could not reasonably have literally described the subject matter now being claimed

Winans v Denmead (Doctrine of Equivalents – expands range of what patent controls.  Cons (dissent): creates uncertainty for future inventors and may encourage sloppy patent drafting)).

-π has patent for conical car.  ∆ has octagonal car.  Octagonal ≠ conical, so no literal infringement.

-Court: patent holder gets something beyond literal claim but how much?

-other designs that function the same way as claimed invention (i.e., put coal in, transit coal, bottom removes so coal drops).

-Does octagonal version do all these things in the same manner?

Yes, same functionality (means/function/result) (close equivalents in accused device that achieve same functionality).

-Good case for π if ∆ looked at π’s invention and made only cosmetic changes to create illusion of new invention (equivalency).

-if ∆ came to design independently, may challenge validity of π’s patent (how novel could it be if 2 people came up with it?)

-BUT if ∆ designed around protected features, they inject new design into the art (which we want); i.e., engineers spend time designing around (non-equivalent)

-Look at amount of fresh design effort and how much effort to make invention look different.

-Look at features of design and circumstances of how 2nd device arose.

-Look for same means, function and result for equivalency.

-Dissent points out:  octagonal shape may be superior b/c easier to make than circle (therefore, may indicate design effort and improved design; maybe reverse doctrine of equivalents should kick in).

-DOE cannot pick up what could not be claimed in patent (e.g., prior art or obvious from prior art).

Westinghouse v Boyden Power Brake Co (Reverse Doctrine of Equivalents – narrow range of what patent controls)

-π invented “quick action” brake from trains (extreme emergency brake).  Literal matchup – π’s and ∆’s claims involve pistons, auxiliary valves, etc (very broad).  (i.e., ∆ is literal infringer).  BUT, ∆’s invention achieves breaking in a different way, and possibly more effective way (air flow comes from different sources – amount of pressure would be greater; also, simpler design, different valves).

-Result = similar; means = substantially different; function = substantially different

-we want ∆ to be able to come up with different, better functionality (can redesign inner details to achieve different means, function or result).

-means = structural elements (parts/inner relationship OR steps in a process) (here, a combo of valve/pressure features)

-function = how do they work together? (or sequence of a process)

-result = overall impact of result (e.g., emergency breaking)

(a difference in any one – means, function or result – is enough)

Inducing Infringement (35 USC §271(b))

-Statutory Language very general:  “whoever actively induces infringement of a patent shall be liable as an infringer.”

case law provides elements:

-party directly encouraged infringement by another (usually for gain to encouraging party);

-knowing of likelihood of infringement; and

-infringement results

Contributory Infringement (35 USC §271(c))

-statutory language defines elements:

-sale of component of patented invention;

-constituting a material part;

-knowing same to be specially made for use in patented invention; and

-where component is not a staple item of commerce suitable for substantial noninfringing uses

Aro Manufacturing v Convertible Top

-patent for top structure for convertible cars.

-2 litigations

Aro I

Patent holder


| licensed to




| sold to


Car owners (tops would wear out and have to repair)

NOT infringement (implied owners could use top and repair top but could not make a new one

Aro II

Patent holder

Ford (no license)




Car owner (changing tops)

Direct infringement (Aro is contributory infringer).

No license, so repair or new manufacture is infringement.

Contributory infringement through elements of 271(c)

Repair vs. Newly Manufactured

Repair – needed to get full value of item initially bought

New manufactured – extend life beyond full value of item originally bought

Infringement Based Partially on Extraterritorial Actions

Inducing Overseas Combinations (35 USC §271(f)(1))

-Statutory language specifies elements:

-party supplies from US

-all or substantial portion of patented invention in uncombined form

-in such a manner as to actively induce the combination of such components outside of the United States in a manner that would infringe if such combination were in the US

Overseas Contribution to Infringers (35 USC §271(f)(2))

-Statutory Language specifies elements:

-party supplies from the US

-any component of a patented invention known to be made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use

-intending use of component outside of US that would be infringing if undertaken in the US

-exception – materially changed overseas; part of bigger product

Product Made Overseas by Patented Process (35 USC §271(g))

-Statutory language specifies elements:

-party imports into the US or offers to sell, sells, or uses within the US

-a product which is made by a process patented in the US

-shall be liable as an infringer except as specifically exempted from liability

-Liability now imposed where:

-use of product is noncommercial or retail sale, unless there is no other adequate remedy for infringement;

-product is materially changed by subsequent processes; OR

-product becomes a trivial and nonessential component of another product

Prior Commercial Use under AIA (defense for infringement)

-secret use for more than 1 year before filing date.

-punishment for “unreasonably pleading defense – pay π’s atty’s fees – heavy burden of proof on ∆.

-∆ must publish prior secret activity (risk of revealing trade secrets)

Microsoft v AT&T (supplied from US for combination abroad)

-software sent from US to foreign manufacturer, then copied by foreign recipient for installation on computers made and sold abroad.

-issue – is component (§271(f)(2)) software, master disk or downstream disk?

-Court:  component is master disk (a copy of Windows, not Windows in the abstract).

-Patent is only infringed when computer is loaded with Windows and thereby capable of performing as AT&T’s patented speech professor.

-what Microsoft sends is never installed on any of the foreign-made computers.  Instead, copies made abroad are used for installation.  Therefore, Microsoft does not “supply components” and is not liable under 271(f).

-Shipping software overseas where 1st copy is not installed is not infringement.

Injunctions in Patent Cases (used to be pretty automatic in infringement cases; unless there was a big public interest, e.g., limiting pollution)

Preliminary Injunctions Against Continued Infringement (reasonable likelihood of success – patent is presumed valid)

-Granted where party filing a patent infringement suit can show:

-a reasonable likelihood of success on the merits;

-irreparable harm if injunction is not granted;

-a balance of hardships tipping in the party’s favor; and

-favorable impact on the public interest

Permanent Injunction Against Continued Infringement (if permanent injunction is denied – ongoing rolling royalties)

-Granted in light of four equity considerations (eBay):

-irreparable injury to patentee;

-inadequacy of remedies at law (such as monetary damages);

-balance of hardships favoring patentee; and

-public interest not disservice by injunction

Ongoing Royalty Upon Withholding of Injunctions

-Patent holder denied an injunction will still be entitled to royalty payment for continued infringement

-royalty based on reasonable royalty determination may be awarded at proceeding establishing infringement OR

-patent holder may be forced to sue periodically to establish and collect past damages

Damages in Patent Cases

Patent Damage Situations

-Damage to Patentee Selling Patented Item

lost profits awarded to offset lost sales or lowered prices resulting from infringing sales (way to make seller of goods whole)

-reasonable royalty sometimes awarded as a fallback where either evidence is lacking to establish lost profits or reasonable royalty amount is higher than lost profits

-Damage to Patentee Not Selling Patented Item (Licensor)

-reasonable royalty is awarded

-royalty amount is determined from:

-increment of infringer’s return over return on noninfringing counterparts OR

-recreation of probable negotiation between willing licensee and licensor to determine probable resulting royalty (using Georgia-Pacific factors)

Royalty on increment of infringer’s return (if able to calculate):  e.g., if cars with infringing navigation component à 8% profit; & cars without infringing navigation component à 7% profit (1% profit margin due to infringing conduct)

eBay v Mercexchange, LLC

-Mercexchange (π) had patent for electronic market to facilitate sale of goods b/w individuals

-Mercexchange and eBay entered into negotiations for license agmt, but talks fell apart.

-π sued ∆ for infringement; yes, infringement

-District Ct – denied permanent injunction

-Ct of Appeals – reversed (granted injunction)

-4 factor test for permanent injunctions (equity principles):

1- must have suffered an irreparable injury

2- remedies available (e.g., $ damages) are inadequate to compensate for injury

3- balance hardships b/w π and ∆ à a remedy in equity is warranted

4- public interest would not be disserved by permanent injunction

(if $ damages are adequate, fail #1 and #2)

  • Irreparable harm – if $ amount isn’t precise, can’t be sure patentee is being made whole; patentee is harmed in as yet unascertained amount (e.g., can’t measure loss of sales due to infringement; even if we try to calculate, $ would probably be leaving something out). Also, dimension of harm may be reputation, consumer demand, etc (not quantifiable). (key is uncertainty – about where damage will come from and amount of damage)
  • Remedies available at law – damage is not purely monetary (e.g., reputation – not $ compensable); what would go into complete accounting of damage?

-if patentee is licensor, usually in a weaker position b/c they are willing to substitute patent right for $

3-   Hardship on π and ∆ – balance hardships and gains of both parties; commercial hardship to infringer shouldn’t really matter (may entail significant waste or hardship will fall on innocent parties – e.g., employees would lose jobs if infringing activity had to stop (negative impact on innocent parties) or ceasing infringement would harm consumer set (people who need a pharmaceutical drug that no one else produces)

-waste – if ∆ committed to production activity/investment that would now be wasted; may be allowed to continue until commitments are fulfilled (usually for parties that are surprised they are infringing)

4-    Public Interest – infringing activity performs public service (e.g., pollution control equipment)

District Ct – π was willing to enter into license agmt (so fails factors 1 & 2).

BUT, they didn’t get to an agmt; no deal was concluded so not fair to infer π was willing to rely on $ damages.  But if you don’t allow π to get injunction, why would anyone bother to get a license? (otherwise π would have no power to negotiate and no power of who they can negotiate with; and why would someone pay for exclusive license if π can’t guarantee) (i.e., π needs to keep power to get injunction).  Patent trolls are usually just failed licensors

-S Ct – recognized that you cannot take away injunctions just b/c π entered into negotiations

-Concurrence – if infringing component is small part of much bigger device à hardship to seller would be so great and degree to which infringing conduct impacts sale of bigger item à injunction would not be balanced (i.e., can’t get injunction against sale of car due to one infringing bolt) (also seems like waste)

-Business method patents are usually vague (scope is ill-defined) or improperly issued à if injunction is given, it may be illegitimate as well

Lucent Technologies v Gateway

-Georgia-Pacific Factors

-e.g., if competitors, maybe have charged higher license fee

-π had patent for entering data on screen without using keyboard (e.g., date selector on calendar)

-∆ is infringer; issue at appeal is $357M in damages (awarded by jury).

-issue = what would parties have negotiated?

-π had asked for damages on running royalty basis (per unit charge); ∆ argued for lump sum

-jury awarded lump sum even though most of evidence went to running royalty

-Ct – no substantial evidence to support jury finding

-π’s evidence (other licensing agmts) were licenses for much different conduct à not comparable to this case and no assistance provided to jury

-volume of sales

-flat to fee à risk is to licensee

-running royalty à risk is to licensor

-licensee will try to estimate what sales will be

-infringement is for minor features that do not account for a large # of items being sold; frequency of use of infringed portions was not that great

-Entire Market Value Analysis

-usually if patented feature accounted for sale of whole item (but-for patented feature, consumers wouldn’t have bought)

-for minor component – could probably sell with or without feature (maybe a small price increase) – what fraction of incremental price should go to patent holder? (once you have #, can build to royalty against price of whole item)

-but much easier to figure out royalty against price of whole item, (e.g., .08%, etc.) (a very small part of entire thing)

Rite-Hite v Kelley Co

-how much damage for infringement?

-awarded lost profits for sales of patented device and non patented device.

-π’s displaced sales = π’s sales that would have occurred but for ∆’s infringing conduct (π gets lost profits).

-For gap (b/w ∆’s infringing sales and π’s non-patented device), π gets reasonable royalty.  π’s non-patented device directly competed with ∆’s infringing product (π gets reasonably foreseeable damages)

-why should ∆ get damages award for non-patented items?

-fully compensate π for ∆’s infringement – fairness to patent holder, deterrence for infringers.  Dissent argues everything above sale of patented invention s/b reasonable royalty, not lost profits.

-After that, π gets reasonable royalty.  Anything but-for infringement π would have captured (displaced sales), π gets lost profits; harm must be proximate – reasonably foreseeable to infringer at time of infringement.  ∆ would have known they were displacing sales of competing products.  Therefore, type of harm was reasonably foreseeable.

-“tag along” sales of functionally related items (special value/use with patented item)

-items usually sold with patented item

-if they go down in tandem, π can usually get them; must functionally interact with patented item (e.g., washing machine that used plastic that wasn’t useful for anything else) (i.e., can’t be regular/common item)

-Panduit factors to get lost profit #s

-can patentee meet demand?  If not, π gets reasonable royalty for sales they wouldn’t have been able to make

-often hard to identify cost per unit/profit per unit (usually considers marginal costs only, not fixed cost (e.g., cost of factory).  Marginal cost = cost of producing units after initial fixed costs of building factory, etc.

State Industries v Mor-Flo Industries

-π had patent for insulating water heaters with foam

-awarded lost profits on 40% of ∆’s infringing sales and 3% royalty on rest

-π had 40% market share nationally (measure b/w patented & unpatented = 40/60, applied in all markets)

-∆ argued π only had 10% of west coast market (i.e., but for infringement, π would have only had 10% of sales and π might not have been able to meet demand of 40%)

-Court says doesn’t matter; nothing to indicate π couldn’t meet 40% demand (i.e., nothing special about west coast)

-π didn’t raise argument that they could have gotten more than 40% on west coast; π gets lost profits on 40% of # of infringing units sold by ∆.  Then have to prove lost profits per unit.  What if π doesn’t operate on west coast?  Analysis goes into 3rd Panduit factor.

Lost Profits in Patent Cases

General Lost Profits Standard

-Lost profits awarded for profits that patentee would have realized through sales or other commercial activities “but for” defendant’s infringement

-limited to damages that were reasonably foreseeable to infringer

-not limited to lost sales of patented item

-extends to displaced sales of other competing items

-extends to lost “tag along” sales of functionally related items

Scope of Lost Profits Determined from Panduit Factors

-Scope of likely profits absent infringement determined from:

-demand for patented product

-absence of acceptable non-infringing substitutes

-patentee’s manufacturing and marketing capability to exploit the demand; and

-amount of profit patentee would have made

Determining Lost Profits from Market Share Rule

-Market share of patentee without infringement may be used to project lost profits in additional markets tainted by infringement

-market share taken as measure of cross-elasticity between patented and unpatented products

-similar market share projected to prevail in other markets if it appears that patentee had capacity to serve other markets

Special Patent Damage Rules

Patent Marking

-no damages awarded for infringement of product patents without notice to patent to infringer (damages available only from point of which infringer has notice of patent); product needs to have the word “patent” and # or website or can send cease and desist letter to infringer.

-notice may be via:

-patent notice on product (patent marketing) or

-actual notice to infringer

-no notice required for process patents

Willful Infringement

-Enhanced damages up to treble damages can be awarded for willful infringement

-Willful infringement requires reckless conduct to be shown from clear and convincing evidence that:

-objectively high likelihood was present that actions would constitute infringement; and

-high risk of infringement was known or should have been known to defendant

-Advice of Counsel Defense

-∆ may seek to disprove willful infringement by showing good faith belief in non-infringement due to reliance on opinion of counsel that patent was invalid or ∆’s projected actions were non-infringing

-potential limits on defense:

-reliance on opinion from non-patent specialist

-reliance on opinion based on information to counsel about projected conduct other than actual conduct

-invoking defense will waive privilege regarding legal advice of opinion counsel

-privilege and work product protections not waived for legal advice of trial counsel

-Failure to Invoke Advice of Counsel Defense

-no adverse inference where party consults counsel about possible infringement but then retains privilege and does not invoke advice of counsel defense

-presence of willful infringement in this case (as well as where no advice is sought) will turn on whether it was reckless to proceed in the face of facts known to infringer

-Attorney Fees

-award of atty fees to prevailing party available in “exceptional cases”

-cases deemed exceptional where:

-patent holder in either patent prosecution or later patent enforcement takes an action in bad faith that extends legal proceedings and wastes attorney fees or (for litigation that shouldn’t have happened)

-defendant takes an action in bad faith that extends legal proceedings and wastes atty fees

(compensate “innocent” party + deterrence)

In re Seagate Technology, LLC

-∆ infringed – got advice from outside counsel that they wouldn’t be infringing (or patent was invalid or both) (they were wrong in good faith); by arguing this, ∆ waives atty-client privilege for atty’s work product (i.e., must reveal what atty told ∆).  Atty must be patent specialist (almost any patent atty will do).

-π tries to get access to litigation atty-work product as well.

-But if atty says A won’t infringe but client does B, atty opinion won’t help.

-Not getting counsel is not per se indicative of lack of good faith.

-if ∆ seeks counsel but then doesn’t rely on it as defense.  π can’t argue that means ∆ willfully infringed.

-Court:  opinions of litigation counsel are way after factor of 1st counsel’s opinion; also, want litigation counsel to be able to take apart and critique 1st counsel’s analysis; waiving privilege would severely impair ∆’s atty/defense/

-Willful infringement à reckless conduct

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