Posts in Federal Circuit

It is arguable that neither view is beyond criticism and that any emergent legal test as to patent-eligibility demands further development. There is much to commend the majority view that each of §§101, 102, 103 and 112 serves a different purpose and presents different questions and that under §101 only when it is apparent that the claimed subject-matter is a manifestly ineligible abstract idea should that subject-matter be excluded. Significant involvement of a computer in the working of the invention points towards invention.

In a recently published Forbes.com article titled”The Federal Circuit, Not the Supreme Court, Legalized Software Patents,” Lee doubled down with his absurd and provably incorrect assertions regarding the patentability of software patents. But he also more or less sheepishly admitted that his reading of the most relevant case is not one that is widely accepted as correct by anyone other than himself. He wrote: “To be clear, plenty of people disagree with me about how Diehr should be interpreted.” Thus, Lee admits that his primary assertion is one he created from whole cloth and contrary to the widely held views to the contrary. Of course, the fact that his radical views are in the minority was conveniently omitted from his ?Ars Technica? article. If Lee has any integrity he will issue a public apology to the Federal Circuit and issue a retraction. If Lee doesn’t come to his senses and do the right thing in the face of overwhelming evidence that he is wrong then Forbes.com and Ars Technica should step in and do what needs to be done.

Indeed, few articles have struck a nerve in me quite the way that a recent Ars Technica article did. The article is titled How a rogue appeals court wrecked the patent system??. It is a cheap shot, factually inaccurate and embarrassingly incorrect “news” story that concludes the Federal Circuit is at the heart of all the problems in the patent system. A real Pinocchio tale. Ars Technica? should be ashamed at having published such an inaccurate attack piece. If they are not going to properly vet articles in advance of publication then what have they become? Little more than an online technology specific version of those tabloids with the salacious headings. The patent system is far to important to the U.S. economy and our way of life to suffer from that level of journalistic ignorance and bias.

In partially dissenting, Judge Newman’s beef with per curiam panel opinion on the small entity status issue was in “declin[ing] to correct the district court’s ruling that improper payment of the small entity fee is material to patentability.” Newman’s view that filing of an incorrect small entity statement doesn’t render it per se “material” is based on the 1928 Supreme Court case of Corona Cord Tire Co. v. Dovan Chemical Corp. which Newman said had made immaterial to patentability “an affidavit that was not the basis of the patent grant.” Put differently, Newman characterized Therasense as reiterating that the doctrine of inequitable conduct “should only be applied in instances where the patentee’s misconduct resulted in the unfair benefit of receiving an unwarranted claim.” In other words, Newman viewed a potentially incorrect assertion of small entity status as being “immaterial to the patent’s issuance.” But she found the per curiam panel’s opinion as being equivocal “on materiality and intent based on error in small entity status” and thus “simply add[ing] uncertainty when such is unwarranted.

On Thursday, September 20, 2007, the United States Court of Appeals for the Federal Circuit issued two decisions that provoked much debate, and which deserve to be remembered. The first case, In re Comiskey, seemed rather straight forward and certainly not earth shattering. In the other case of the day, In re Nuijten, the Federal Circuit determined that a propagating signal cannot be patented because it is does not qualify as patentable subject matter. Frankly, I think the ruling in Nuijten can be simply summarized by saying that Judges Gajarsa and Moore didn’t understand the technology. Thus, in baseball terminology, on September 20, 2007, the Federal Circuit went 1 for 2, which would put you on a sure path to enshrinement in Cooperstown, but is not what you would hope for when dealing with an area of patent law as fundamentally important as patentable subject matter.

As pointed out astutely by RMail is that the Supreme Court jurisprudence on patent-eligibility under 35 U.S.C. § 101 have primarily involved ex parte prosecution appeals from the USPTO. There are only two instances involving patent litigation I’m aware of where the Supreme Court squarely determined patent-eligibility under 35 U.S.C. § 101: the recent case of Mayo Collaborative Services v. Prometheus Laboratories, Inc. (ruling that the claimed method was patent-ineligible under the “law of nature” doctrine); and the 2001 case of Pioneer Hi-Bred International v. JEM AG Supply (which ruled that sexually reproduced plants qualified as either “manufactures” or “compositions of matter” under 35 U.S.C. § 101). But as RMail correctly observed, no one seems to have pointed out to the Supreme Court this important threshold issue of statutory construction, and statutory limitations on the powers of the federal courts. Accordingly, Prometheus does not bar this Court from issuing a correct ruling in the present adversarial context.

Recently the Federal Circuit has been interpreting 25 U.S.C. 271(b) to mean that unless the accused infringer directs or controls the actions of the party or parties that are performing the claimed steps, the patentee has no remedy, even though the patentee’s rights would be plainly being violated if the actions of the various partiers were combined. The Federal Circuit decided to go a different route and broke with that line of cases, specifically saying: “We now conclude that this interpretation of section 271(b) is wrong as a matter of statutory construction, precedent, and sound patent policy.” But there were 5 of the 11 Federal Circuit Judges dissenting, and very adamantly so.

Last week the Federal Circuit decided the case of Santarus, Inc. v. Par Pharmaceutical, Inc., which dealt with whether a drug covered by an Abbreviated New Drug Application (ANDA) infringed the patents owned by that patent owner relative to the proton pump inhibitors (PPI) product omeprazole. The big issue in the case is what might at first glance seem to be a rather innocuous statement relative to the support necessary in a patent specification for a negative claim limitation. But after reading the Newman dissent (which joins in the other aspects of the Court’s decision) it starts to become clear that this could be a much larger issue of significant consequence.

Mirror Worlds also alleged that Apple induced its customers to infringe claim 13. The infringement theory in play here is called inducement and is found in 35 U.S.C. § 271(b): a party who “actively induces infringement of a patent shall be liable as an infringer.” Inducement, however, requires that there be a showing of an underlying act of direct infringement. This does not require that Apple themselves engaged in direct infringement, otherwise direct infringement and inducement would be one and the same theory, which they are not. Nevertheless, in order for there to be inducement each and every step of the claim in question must be performed.

In challenging the correctness of the per curiam majority ruling, Judge Linn’s dissenting opinion makes four points. Point No. 1 is that the per curiam majority’s approach “is contrary to both the Patent Act and the Supreme Court’s longstanding precedent that “if there is no direct infringement of a patent there can be no contributory infringement,” citing Aro Manufacturing and Deepsouth Packing, as well as the Federal Circuit’s Joy Technologies. But as discussed above, none these cases specifically holds that direct infringement of the claimed method for the purposes of liability for indirect infringement requires that all steps of the claimed method must be performed by a single actor. Judge Linn’s further assertion that, in enacting 35 U.S.C §§ 271(e)(2), (f), and (g), “Congress did not give the courts blanket authority to take it upon themselves to make further policy choices or to define ‘infringement’” still doesn’t address why direct infringement for the purposes of indirect infringement liability requires all infringing acts to be performed by a single actor. (As I discuss below, enactment of 35 U.S.C §§ 271 (f) and (g) also reflects Congress’ intent to close “loopholes” in the primary infringement statute, 35 U.S.C §§ 271 (a)). Judge Linn also makes the comment that Congress “removed joint-actor patent infringement liability from the discretion of the courts” in 1952, but cites to absolutely no legislative history to support this comment.

In Akamai Technologies and McKesson Technologies (August 31, 2012), with an opinion over 30 pages long, a bare six judge per curiam majority found it unnecessary to resolve the joint infringement issue. Instead, the per curiam majority ruled that the Akamai Technologies and McKesson Technologies cases should be resolved by applying the doctrine of inducing (indirect) infringement under 35 U.S.C § 271(b). The majority also ruled that such indirect infringement could occur as long as all steps of the a claimed method are performed, but didn’t requiring that all steps be performed by a single actor, expressly overruling the 2007 case of BMC Resources v. Paymentech, and at least implicitly overruling the 2008 case of Muniauction, Inc. v. Thomson Corp. (no joint infringement of patented electronic method for conducting auctions of financial instruments where auctioneer and bidder each perform some but not all of the steps).

After dispatching with Underwater Devices the Federal Circuit announced the new rules, which requires at least a showing of objective recklessness in order to support a finding of willful infringement and, thereby permitting enhanced damages. The Federal Circuit did not stop there though, but rather took the opportunity to explain that because of the abandonment of the affirmative duty of due care, there is no affirmative obligation to obtain opinion of counsel. Thus entered the era of intentional blindness, effectively killing the practice of obtaining an infringement opinion.

The other point that also bears repeating (and quoting) from the majority opinion in the AMP remand is Judge Lourie’s response to the so-called “preemption” question: “Plaintiffs argue here that they are preempted from using the patented DNA molecules. The answer to that concern is that permitting patents on isolated genes does not preempt a law of nature. A composition of matter is not a law of nature. Moreover, as indicated earlier, a limited preemption is inherent in every patent: the right to exclude for a limited period of time.”

While the Supreme Court may have expanded the reach of the Hatch-Waxman “safe harbor,” the Medtronic and Merck cases only involved pre-marketing FDA approval activity. But the recent split Federal Circuit panel decision in Momenta Pharmaceuticals, Inc. v. Amphastar Pharmaceuticals, Inc. has now (alarmingly in my view) further widened the applicability of this “safe harbor” beyond such pre-marketing FDA approval activity. In Momenta Pharmaceuticals, Judge Moore (writing for the majority joined by Judge Dyk) ruled that this “safe harbor” could also apply to post-FDA approval activity, even if that activity was at least arguably commercial in nature.

The EPO applies what might be referred to as a “subtraction” test for claims containing a mixture of patent-eligible and patent-ineligible features, those features that are patent-ineligible being disregarded and novelty and obviousness under aa. 54 and 56 EPC being evaluated on the basis of the remaining features. Judge Lourie suggested a somewhat similar “subtraction” test here.