Posts in Federal Circuit

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.

In holding the method, system, and media claims of the ‘792 and ‘037 patents to “cover no more than abstract ideas and therefore do no recite patent-eligible subject matter,” Judge Lourie’s opinion trivializes the relevance of computer implementation in these claims. That’s brought out when he later says that the “interchangeability of certain mental processes and basic digital computation” makes the “use of a computer in an otherwise patent-ineligible process for no more than its most basic function” (i.e., making calculations or computations) inadequate “to circumvent the prohibition against patenting abstract ideas and mental processes.” In fact, Judge Lourie went even further by saying that “a computer must be integral to the claimed invention, facilitating the process in a way that a person making calculations or computations could not” to “salvage an otherwise patent-ineligible process,” citing the 2010 case of SiRF Technology, Inc. v. ITC (method for calculating the position of a GPS receiver satisfied the MOT test). In other words, computer implementation of the claimed business method (or system) must be absolutely necessary to its usefulness to satisfy Judge Lourie’s criteria for reaching the patent-eligibility zone.

So maybe the Federal Circuit won’t find “preemption” to be useful in deciding this appeal; we’ll know soon enough. I, for one, can’t make sense of the DOJ’s fixation on “tying up.” In Flook, the Supreme Court made clear that a claim’s patent-eligibility does not turn on the range of uses that are preempted versus those that remain in the public domain. Even in Mayo, the Supreme Court discussed preemption explicitly only as an underlying policy concern, as a justification for an outcome that, to the Court, seemed right and just – not as a test that distinguishes a “law of nature” from a man-made process. By elevating “tying up” to the status of an actual analytical tool, DOJ proposes an unworkable test that fails to distinguish “products of nature” from man-made inventions and leads to absurd outcomes. It asks the Federal Circuit to rely on asserted facts and unstated claim constructions. It requires strained interpretations of leading precedent. It is evasive and avoids the hard work of construing the claims and applying them to the activities believed to be “tied up” – lawyer work that, if undertaken, may or may not show that the preemptive scope of these claims isn’t all it’s trumped up to be.

Although predictions on the outcome of an unusual case such as this are probably worthless, I think that it is most likely that this panel will rule in 2012 the same way that it ruled in 2011. It is probably safe to presume that the judges are fairly entrenched in their positions. In my view, no arguments were presented which show that Mayo was a game-changer with respect to the isolated DNA claims and the screening method claim. In particular, AMP’s main point about the relevance of Mayo—the preemption argument—was harshly criticized by Judge Moore. Among the three members of the panel, Judge Moore would appear to be the most likely to change sides, and I do not see this happening. Thus, I expect the same outcome as last year. However, the long-term outcome is much murkier, with an en banc hearing and/or a Supreme Court appeal almost certain.

The Tokai and Ritchie rationale seems to have never been cited by any other panels of the Court. While this may be due to many reasons, the fact that this reasoning could so easily invalidate virtually any claim in any patent, combined with the fact that it has only scarcely been utilized by the Court, suggests that this is an extraordinarily important issue for the Court as a whole to consider.

The decision of the Supreme Court in Prometheus has been predicted to have implications for business method patentability, but the decision in what will surely become known as the Alice case provides an early indication that the CAFC may endeavour to limit its scope. Whether the claimed subject matter lies in the reality of patent-eligible subject-matter or is more correctly located in the Wonderland of abstract ideas is an issue that has been debated on both sides of the Pond, and on which the Dodo or the King of Hearts in his judicial capacity would surely have had an opinion if it had been brought to their attention. In the US there appears to be ample scope for further debate.

These polar opposite decisions in CyberSource and Ultramercial illustrate how fractured the Federal Circuit’s patent-eligibility landscape has now become for business methods and systems. The most recent split decision in CLS Bank International v. Alice Corp. Pty. Ltd. where a claimed trading platform for exchanging business obligations survived a validity challenge under 35 U.S.C. § 101 epitomizes this problem. As CLS Bank International unfortunately shows, an objective standard for judging the patent-eligibility of business methods and systems remains elusive, subject to an ever growing “tug-of-war” between the “inclusive” and “restrictive” patent-eligibility factions of the Federal Circuit. In particular, after CLS Bank International, we are no closer to having a judicially accepted definition of what is (or is not) an “abstract idea” when it comes to claiming business methods and systems.

A factual determination of the Board is to be upheld if there is substantial evidence to support it, In re Gartside, 203 F.3d 1305, 1315 (Fed. Cir. 2000), and a finding is supported by substantial evidence if reasonable minds might accept the evidence as supporting the factual finding. Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938). This has been translated by the Federal Circuit to mean “is the determination unreasonable?” Nippon Steel Corp. v. United States, 458 F.3d 1345, 1351 (Fed. Cir. 2006).

This case intrigued me from the start because it seemed rather odd that there should be a nonprecedential opinion in an appeal to the Federal Circuit necessitated by a completely adjudicated inter partes reexamination at the United States Patent and Trademark Office. Moreover, the original panel concluded that the combination of known elements resulted in a predictable result. The problem with that reasoning, however, is that not all of the elements were found within the prior art. In fact, the Board found that there are no fewer than three (3) meaningful structural differences between the invention as claimed and the prior art.

On Friday, July 6, 2012, the United States Court of Appeals for the Federal Circuit issued a decision in General Electric Co. v. ITC. The Federal Circuit, per Judge Newman with Chief Judge Rader and Judge Linn, did not give GE a total victory, but victory enough over Mitsubishi. The Federal Circuit affirmed in part and reversed in part the original decision of the ITC, and remanded the case for further proceedings consistent with the decision. Ultimately, the Federal Circuit ruled that claim 15 of the ‘985 patent, correctly construed, covers the domestic industry turbines. Of note, the CAFC continues to interpret “connected to” and “coupled to” as not requiring physical separation.

Professor Holman not only teaches patent law at UMKC, but has a Ph.D. in biochemistry and molecular biology, as well as well as some post-doctoral drug discovery research experience. In other words, Professor Holman speaks as one who understands both the patent law and the technology involved in the AMP case. And what Professor Holman’s supplemental brief does is debunk the “gene patent mythology” fabricated by ACLU, PubPat, (and others), as well as “ a number of assumptions regarding the nature of the claimed subject matter” made by the original Federal Circuit panel which he characterizes as “unsupported at best, and in some instances clearly mistaken.”

Earlier today the United States Court of Appeals for the Federal Circuit issued a decision in Noah Systems, Inc. v. Intuit, Inc. According to the Federal Circuit the specification of the ’435 patent must contain an algorithm that performs the function associated with the “access means” limitation, otherwise the limitation is indefinite and the claim invalid. Ultimately, the Federal Circuit would determine that the algorithm disclosed was incomplete. This lead the Court to explain that when the specification discloses an algorithm that only accomplishes one of multiple identifiable functions performed by a means-plus-function limitation, the specification is treated as if it disclosed no algorithm. An incomplete algorithm means no algorithm as all, which means that what one of ordinary skill in the art would understand from the disclosure is no longer relevant. This is where I would depart from the Federal Circuit and think that the law as it relates to means-plus-function claiming of computer software is all wrong. Means-plus-function claims has always been about what someone of ordinary skill in the art would appreciate (see, for example, USPTO 112 guidelines, 76 Fed. Reg. 7162 (9 February, 2011) so why is that not the case with respect to computer software?