Tuesday, March 30, 2010

Fed. Cir. On Relative Claim Terminology

From today's opinion in Power-One, Inc. v. Artesyn Technologies, Inc., 08-1501(March 30, 2010):

Claims using relative terms such as “near” or “adapted to” are insolubly ambiguous only if they provide no guidance to those skilled in the art as to the scope of that requirement. See Datamize, 417 F.3d at 1347 (the definiteness of a claim’s terms depends on whether those terms can be given a reasonable meaning by a person of ordinary skill in the art); see, e.g., Young, 492 F.3d at 1346 (“near” not indefinite); Central Admixture Pharm. Servs., Inc. v. Advanced Cardiac Solutions, 482 F.3d 1347, 1356 (Fed. Cir. 2006) (“adapted to” not indefinite); Verve, LLC v. Crane Cams, Inc., 311 F.3d 1116, 1120 (Fed. Cir. 2002) (same). Here, a person of ordinary skill in the field would understand the meaning of “near” and “adapted to” because the environment dictates the necessary preciseness of the terms.

[The Specification] unambiguously states that the regulator is to be placed adjacent to the corresponding load that it is powering so that low voltage/high currents will not be delivered over relatively long distances. The patent’s functionality requirement restricts the boundaries of where the regulator can be located in relation to the load it is powering. A skilled artisan in distributed power systems would know where to place the regulator to accomplish that stated objective.

[T]he fact that the claim is not defined using a precise numerical measurement does not render it incapable of providing meaningful guidance to the jury because the claim language, when taken in context of the entire patent, provides a sufficiently reasonable meaning to one skilled in the art of distributed power systems. Therefore, we find that the district court’s claim construction of the term POL regulator was adequate to fully describe the scope of the claims.

Read/download a copy of the opinion here (link)

SDNY Sides With ACLU By Limiting Gene Patenting Under 35 U.S.C. 101

Association for Molecular Pathology and ACLU v. USPTO and Myriad (S.D.N.Y. 2010) (Judge Sweet)

Yesterday, the Southern District of New York issued a controversial opinion in granting partial summary judgment that the claims of several patents on BRCA1 were invalid as encompassing non-statutory subject matter.  Some of the claim language includes the following:

Claim: An isolated DNA coding for a BRCA1 polypeptide, said polypeptide having the amino acid sequence set forth in SEQ ID NO:2.

Claim:  A method for detecting a germline alteration in a BRCA1 gene, said alteration selected from the group consisting of the alterations set forth in Tables 12A, 14, 18 or 19 in a human which comprises analyzing a sequence of a BRCA1 gene or BRCA1 RNA from a human sample or analyzing a sequence of BRCA1 cDNA made from mRNA from said human sample with the proviso that said germline alteration is not a deletion of 4 nucleotides corresponding to base numbers 4184-4187 of SEQ ID NO:1.

Interestingly, before the district court dove into the substantive analysis of the claims, Judge Sweet appeared to take an opening shot at the presumption of validity for all patents:
The Federal Circuit has previously held that it owes no deference to USPTO legal determinations . . . While Congress has created a presumption of validity for issued patents, approximately 40% of patents challenged in the courts have been found invalid, demonstrating that the presumption is far from absolute . . . Moreover, the lack of Congressional action to specifically prohibit gene patents in response to the USPTO's prior grant of such patents does not preclude their review by the courts.  (pp.104-105)
Regarding the isolation (or "purification") of DNA, the court noted:
[T]he clear line of Supreme Court precedent and accompanying lower court authorities, stretching from American Wood-Paper through to Chakrabarty, establishes that purification of a product of nature, without more, cannot transform it into patentable subject matter.  Rather, the purified product must possess 'markedly different characteristics' in order to satisfy the requirements of section 101.
[I]n light of DNA's unique qualities as a physical embodiment of information, none of the structural and functional differences cited by Myriad between native BRCA1/2 DNA and the isolated BRCA1/2 DNA claimed in the patents-in-suit render the claimed DNA "markedly different."  This conclusion is driven by the overriding importance of DNA's nucleotide sequence to both its natural biological function as well as the utility associated with DNA in its isolated form.  The preservation of this defining characteristic of DNA in its native and isolated forms mandates the conclusion that the challenged composition claims are directed to unpatentable products of nature.
* * *
[L]ike the discovery of the mutual non-inhibition of the bacteria in Funk Brothers, discovery of the handiwork of nature - the natural effect of certain mutation in a particular segment of the human genome.  And like the aggregation of bacterial in Funk Brothers, the isolation of the BRCA1 and BRCA2 DNA, while requiring technical skill and considerable labor, was simply the application of techniques well-known to those skilled in the art . . . The identification of the BRCA1 and BRCA2 gene sequences is unquestionably a valuable scientific achievement for which Myriad deserves recognition, but that is not the same as concluding that it is something for which they are entitled to a patent.
Regarding the method claims,
The essence of what is claimed [in the method claims] is the identification of a predisposition to breast cancer based on "analyzing" or "comparing" BRCAl/2 gene sequences . . .As in Grams, isolation and sequencing of DNA from a human sample, even if incorporated into the method claims-in-suit, would represent nothing more than data gathering steps to obtain the DNA sequence information on which to perform the claimed comparison or analysis.

Moreover, in the absence of a specified method for isolating and sequencing DNA, "[a] requirement simply that data inputs be gathered - without specifying how - is a meaningless limit on a claim to an algorithm because every algorithm inherently requires the gathering of data inputs." Bilski, 545 F.3d at 963 (citing Grams, 888 F.2d at 839-40). Consequently, even if the method claims-in suit were construed to include the physical transformations associated with isolating and sequencing DNA, they would still fail the "machine or transformation" test under § 101 for subject matter patentability.
Read/download a copy of the opinion here (link)

See Patent Docs: "Round One Goes to the ACLU" (link)

Monday, March 29, 2010

DataTreasury Gets $27M Jury Verdict on Joint Infringement Theory

On Friday, the first of three infamous DataTreasury patent litigations concluded with the jury returning a verdict in favor of DataTreasury for $27 million dollars.  The jury found that none of the claims of the "Ballard patents" were invalid and that some of the infringement was willful (DataTreasury originally asked the jury for over $200M).

Read/download the jury verdict form here (link)

One of the hotly contested issues in the case was the theory of joint infringement alleged by the plaintiff.  From an earlier order addressing defendant's motion for SJ of non-infringement, the court stated:

“[O]ne unique and compelling aspect of this litigation which sets it apart from all other precedent discussing joint infringement that has been cited to this Court by either [Plaintiff] or the Defendants is that the Defendants at bar are companies that were created by banks for the specific and exclusive purpose of carrying out the elements of infringement alleged by [Plaintiff].” . . . That is, Plaintiff argues, Defendants are “so closely aligned and intertwined as to make them more a single actor than two."

[P]laintiff’s theories of liability include facts that may set this case apart from BMC and Muniauction and justify a finding of joint and several liability, as apparently contemplated in On Demand Machine Corp. v. Ingram Indus., Inc., 442 F.3d 1331, 1344-45 (Fed. Cir. 2006) . . . In the case at bar [] Plaintiff contends that TCH and Viewpointe are not innocent servants and are entangled with U.S. Bank to a degree far exceeding mere direction and control . . . On balance, Defendants motion for summary judgment should be DENIED. 

You can read/download the entire order here (link)

Another issue regarded the admissibility of DataTreasury's earlier license agreements, particularly under the Federal Circuit's recent ResQNet decision:
The court previously held that, under ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860 (Fed. Cir. 2010), certain license agreements entered to settle litigation would be admissible as probative of a reasonable royalty. The plaintiff’s damages model in this case relies on a running royalty–that is, a royalty rate computed on a per-check basis. The seven agreements at issue, however, were negotiated as lump sums, without consideration of the check volumes processed by the licensees. As such, their probative value is low. When the court considers the fact that the agreements were entered to settle pending litigation, that value is substantially outweighed by the danger of unfair prejudice. See Fed. R. Evid. 403. As such, the defendants’ objections to the Affiliated Computer Services and ACS Image Solutions, NetDeposit, Bank One, J.P. Morgan Chase, Ingenico, NCR, and MagTek license agreements are sustained.

Read/download the order here (link)

See BusinessWeek: "U.S. Bancorp Told by Jury to Pay $27 Million to DataTreasury" (link)

Monday, March 15, 2010

Google, Yahoo! Skirt Divided Infringement Claim Based on Data Provided "By the User"

PA Advisors LLC v. Google, Inc. et al., Case No. 2:07-cv-480 (E.D. Tex., March 11, 2010, order)

nXn (formerly "PA Advisors") owned a patent directed to Internet searching technology that "reflects the user's cultural, educational, and social backgrounds and the user's psychological profile" based on historic linguistic patterns identified in the user's prior activity.

After the claim construction phase, defendants moved for summary judgment of noninfringement based on 2 separate arguments: (1) the accused products did not "extract . . . at least one segment representative of a linguistic pattern" as recited in the claims, and (2) the accused products did not perform the step of "providing, by the user to the local computer system, search request data . . ."

On the first issue of a "segment" of a "linguistic pattern", nXn argued that this limitation did not require the identification of a particular word as a part of speech, and thus the broad definition would encompass the accused products.  The court strongly disagreed:

The relevant claim constructions reflect this process. “Linguistic patterns” are recognized in “segments” which are in turn extracted from “text items.” “Linguistic patterns” are a combination of various parts of speech (nouns, verbs, adjectives, etc.).” “Segments” are “one or more parts of speech arranged in an order.” And “text items” are “a series of words that can be split into at least one sentence.” Whereas text items refer generally to words, segments and linguistic patterns refer to particular parts of speech.

Despite the relevant constructions, nXn maintains that words in general are parts of speech without reference to whether they may be nouns, verbs, adjectives, etc. Put differently, nXn contends that the claims do not require any identification of a particular word as a particular part of speech but rather only require identification of plain words which also happen to be parts of speech. This theory ignores the plain teachings of the ‘067 patent. In every example or embodiment discussed in the ‘067 patent’s specification, the system must identify and tag words as particular parts of speech. . . . Without identifying and tagging the words as parts of speech, the claimed system would not produce a segment or discover a linguistic pattern. Of course these linguistic patterns then, according to the patent, disclose the user’s cultural and psychological profile. . . . The idea that the system only requires identifying words without reference to parts of speech finds no support in the patent. In fact, the ‘067 patent repeatedly disparages prior art search engines that operate by running “word” searches, referred to in the prior art as “key word” searches.
With regard to divided infringement, the court ran through the rulings of BMC Resources and Muniauction and concluded that
This case presents very similar facts in a claim requiring activity by more than a single party. Independent claim 1 provides in relevant part:

(c) providing, by the user to the local computer system, search request data representative of the users expressed desire to locate data substantially pertaining to said search request data.

col.24 11.45-49. All of the remaining steps recited in claim I are performed by the system - not the user. While Google and Yahoo benefit and invite users to visit their websites and run searches, they in no way “control or direct” them once they are there. Significantly, users are free to search as they please. Neither Google nor Yahoo direct users to search or input specific terms or phrases.

[W]hile it is true that searches initiated by Google or Yahoo could be relevant to infringement, neither accused system “initiates” any search. Notably, Google and Yahoo only offer suggestions and spelling changes after the user has begun a search query. In other words, even where search suggestions or spelling changes are provided by the system, the user is still first required to initiate a search query. Moreover, the user continues to choose the course of the search without the “control or direction” of the accused search engines.

In a last ditch effort, nXn resorts to arguments in equity. nXn first highlights that claim 1 could have easily been written to avoid this whole divided infringement issue and therefore it would be unfair to make it an issue now. But the Federal Circuit already rejected the same argument in BMC Resources . . . any fault only lies with nXn’s prosecuting attorney. Although BMC Resources and its progeny came long after the ‘067 patent issued, the general principles and rules propounded therein were well settled. Regardless of the equities, the Federal Circuit’s precedent is clear in compelling a finding of noninfringement.
Summary judgment of noninfringement as to all asserted claims is therefore GRANTED.

Note - the opinion was written by Judge Rader, who was sitting by designation in the E.D. Tex.

Download a copy of the opinion here (link)

Source: Docket Navigator

See also: "Big Tech Shouts 'Yippee!,' Patent Bar Chattering as Rader Heads to Texas" (link)

Tuesday, March 09, 2010

Director Kappos Clarifies BPAI’s Standard of Review of Examiners’ Rejections

Ex Parte Frye, BPAI Appeal 2009-006013 (February 26, 2010) Precedential

Appellant appealed a 102 rejection for an invention directed to shoe having a forwardly-inclined, reverse wedge.  Specifically, it was argued that the Examiner erred in finding that the prior art reference ("Snabb")
taught a "forward section of substantially constant thickness" that "meets the rearward section of the insole 'at a point substantially halfway' with respect to the upper surface or the outsole" as called for in independent claims.

Prior to deciding the case on its merits, the BPAI, together with Director Kappos (who joined as a panel member), declared that

[T]he Board reviews the particular finding(s) contested by an appellant anew in light of all the evidence and argument on that issue.

Filing a Board appeal does not, unto itself, entitle an appellant to de novo review of all aspects of a rejection. If an appellant fails to present arguments on a particular issue – or, more broadly, on a particular rejection – the Board will not, as a general matter, unilaterally review those uncontested aspects of the rejection. See, e.g., Hyatt v. Dudas, 551 F.3d 1307, 1313-14 (Fed. Cir. 2008) (the Board may treat arguments appellant failed to make for a given ground of rejection as waived); In re Watts, 354 F.3d 1362, 1368 (Fed. Cir. 2004) (declining to consider the appellant's new argument regarding the scope of a prior art patent when that argument was not raised before the Board); In re Schreiber, 128 F.3d 1473, 1479 (Fed. Cir. 1997) (declining to consider whether prior art cited in an obviousness rejection was non-analogous art when that argument was not raised before the Board). Thus, the Board will generally not reach the merits of any issues not contested by an appellant. . . . For example, if an appellant contests an obviousness rejection only on the basis that a cited reference fails to disclose a particular limitation, the Board need not review the other, uncontested findings of fact made by the examiner underlying the rejection, such as the presence of uncontested limitations in the prior art.
Reviewing the prior art reference, the Board found that the relevant point was "too far forward of a halfway point with respect to the upper surface or outsole of Snabb’s shoe to be the 'substantially halfway' point as claimed."

In reversing the Examiner, the Board noted
Our decision is limited to the finding before us for review. The Board does not “allow” claims of an application and cannot direct an examiner to pass an application to issuance. Rather, the Board’s primary role is to review adverse decisions of examiners including the findings and conclusions made by the examiner . . . The Examiner in the present case has not based any of the rejections for our review on a theory that locating the claimed point “substantially halfway” as claimed would have been obvious to a person having ordinary skill in the art at the time of Appellant’s invention in view of the prior art, and thus we take no position on this issue in the present opinion.

Read/download a copy of the decision here (link)

See also, David Kappos' Public Blog: "Ex Parte Frye: BPAI’s Standard of Review of Examiners’ Rejection" (link) ("preserving a complete de novo review on the one hand, while not diverting Board effort into issues not raised by the appellant on the other hand, preserves the right balance between thorough review and administrative efficiency.")

Thursday, March 04, 2010

Senate Releases Lastest Amendments to the Patent Reform Act

The Senate Judiciary Committee announced today the details of an agreement on long-pending legislation to reform the patent system.  Senators Leahy, Hatch, and Senators Jeff Sessions (R-Ala.), the Committee’s ranking Republican, and Chuck Schumer (D-N.Y.), Jon Kyl (R-Ariz.), and Ted Kaufman (D-Del.) are pushing the latest amendments (see below) for Senate consideration.

According to Leahy's/Sessions' press release:

With this agreement, we are closer than ever to advancing patent reform legislation through the Senate . . . Senator Hatch and I have worked through many Congresses to make meaningful reforms to the nation’s patent system, and I appreciate his commitment to this effort.  This compromise may not be everything that everyone wants, but it makes important reforms to the outdated patent system.  Strengthening American patents will improve the quality of our inventions and innovations, which will translate into jobs and economic growth in Vermont and across the country.  Congress is committed to strengthening our economy, and the Patent Reform Act is an important component of that effort.  I hope the leaders will soon schedule floor time for this important legislation.

This important bipartisan agreement would institute reforms that significantly streamline and strengthen the U.S. Patent System . . . In doing so we are strengthening our ability to protect Americans’ ideas and inventions—developments that have done, and will continue doing, so much to improve and to enrich the world.  These reforms would guard individuals, small businesses, and universities from frivolous legal challenges and help prevent abuse of the administrative process.  They would also provide greater clarity and cut red tape that needlessly wastes time, money, and resources. American innovation goes to the heart of our economy, and our success as a nation must be protected.  I urge the Senate to consider and act on this legislation and hope these needed reforms will soon be signed into law.
The proposed agreement makes changes to first-window post-grant review, inter partes review, willfulness, interlocutory appeals, Patent and Trademark Office funding, and supplemental examinations.  The agreement retains several critical improvements in the Committee-reported bill, including the transition to a first-inventor-to-file system, the gatekeeper compromise on damages, the new district court pilot program, and more.

The full text of the substitute amendment is available here (link

Tuesday, March 02, 2010

Vaguely Identified Devices in Patent Complaint Fails Twombly

Bender v Motorola Inc., No. 09-1245 (N.D. Cal., February 26, 2010, order)

Rule 8 of the Federal Rules of Civil Procedure requires that a complaint contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” If a complaint fails to satisfy Rule 8, it “must be dismissed” under Rule 12(b)(6) for failure to state a claim upon which relief can be granted. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). To survive a motion to dismiss, the plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.”

Bender filed an Amended Complaint accusing Motorola of infringing a patent directed to a “Buffered Transconductance Amplifier.”  The Complaint did not specify any particular accused devices, and instead, simply alleged that broad categories products were infringing, where the allegedly infringing devices were identified as

products [including], without limitation, cell phones, computers, network drivers, high definition television sets, ultrasound machines, MRI machines, lab equipment, arbitrary waveform generators, audio amplifiers, video amplifiers, hard disc drives, ADC/DAC converters, DVD-RW players, DSL modems, CCD cameras, satellite communication technology, and other products where high performance, high speed analog circuits are used, and/or components thereof.

Motorola filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) on the ground that the Complaint failed to identify any particular accused devices.  The district court granted the motion.
Here, the Amended Complaint is too conclusory to provide “fair notice” of the basis of Plaintiff’s claim that Defendant infringed the ‘188 Patent. Nowhere in the Amended Complaint does Plaintiff identify, with the requisite level of factual detail, the particular product or line of products, that allegedly infringe the ‘188 Patent. Instead, Plaintiff merely claims that the infringing “products include, without limitation, cell phones, computers . . . and other products where high performance, high speed analog circuits are used, and/or components thereof.” [P]laintiff has done nothing more than recite a laundry list of electronic devices. These cursory allegations are insufficient to give the Defendant fair notice of the claims being alleged against it.

Plaintiff argues that his Amended Complaint provides all the information required in Form 18. This contention lacks merit. The form contemplates that the pleader identify the accused device with some semblance of specificity to alert the alleged infringer which device is at issue. It does not contemplate that the accused device or devices be described in terms of a multiplicity of generically-described product lines such as “satellite communications technology” and “audio amplifiers,” as Plaintiff has done here.

Read/download the order here (link)

Source: Docket Navigator

Monday, March 01, 2010

Judge Rader Accuses CAFC Panel of "Bias Against Non-Technical Arts"

Media Technology Licensing v. The Upper Deck Co., No. 2009-1022  (March 1, 2010)

Media Tech sued defendants on a patent that is generally directed to covering "a piece of a memorabilia item" attached to a trading card.  Exemplary claim 1 reads:

A memorabilia card comprising a substrate in the form of a card and having an image surface,

the image surface including a background image and a foreground image, and wherein the foregoing image is of a famous figure,

a piece of a memorabilia item being adhered to the card adjacent to where an image of the actual item normally would appear, and

the card including a certificate attesting to the authenticity of the item.
On summary judgment, the district court held that that patent was invalid for obviousness, based on
  • a trading card with a picture of Marilyn Monroe and a diamond attached to the card (“Monroe”); 
  • a piece of a sheet purportedly slept on by one of the Beatles attached to a copy of a letter on Whittier Hotel stationery declaring authenticity (“Whittier”); 
  • a piece of fabric purportedly belonging to a Capuchin Friar named Stephen Eckert attached to paper stock including a picture of the friar (“Eckert”); and 
  • a greeting card fashioned to look like a novelty item that ostensibly includes a piece of jeans material belonging to James Dean (“Dean”)
Media Tech countered that a person of ordinary skill would not have combined the references based on: (1) an inability to predict that a trading card would convey memorabilia authenticity; and (2) the trading card field containing an infinite number of identified and unpredictable solutions.  The majority disagreed:
The “inability to predict” argument alleges that “combin[ing] . . . trading cards with a piece of a memorabilia item . . . result[ed in] . . . consumers automatically accept[ing] as authentic a piece of otherwise unidentifiable material.” However, as Media Tech itself acknowledges, consumer acceptance comes from the credibility already associated with the 90-year old trading card industry. As such, Media Tech has not shown that the combination of memorabilia with a conventional trading card resulted, or would result, in consumers accepting authenticity.

Regarding the infinite number of identified and unpredictable solutions, the presentation and content characteristics of trading cards are not infinite. These characteristics are limited by the cards’ physical characteristics. Moreover, while presentation involves varying parameters (color, typefaces, layout, etc.) to produce distinctive products, the asserted claims are unrelated to presentation. Instead, they relate to content. Content solutions are significantly limited by the theme and physical confines of the card, and the finite number of available solutions were predictable.
Media Tech further provided secondary objective evidence of nonobviousness including long felt but unsolved need and failure of others; initial skepticism; commercial success; unexpected results; and industry recognition.
Again, the majority rejected Media Tech's arguments, stating that the stated "need does not correspond to the asserted claims", and that the evidence of success in trading cards was inadequate, since"non-memorabilia trading card inserts have generated interest, and are still being used.  Inserts that are still in use because they generate interest are successful - and do not demonstrate failure of others."  Furthermore, the majority added "[i]in short . . . whatever success was enjoyed came from celebrity, not invention . . . [c]ommercial success . . . even if unexpected, is not part of the 'unexpected results' inquiry."

Relying on wholly irrelevant prior art and ignoring significant objective indicia of non-obviousness, this court substitutes its judgment on patentability for that of a jury. Lurking just beneath the surface of this court’s blindness to the underlying facts supporting non-obviousness is a bias against non-technical arts . . . This court . . . cannot overlook that many individuals invest vast energies, efforts, and earnings to advance these non-technical fields of human endeavor. Those investments deserve the same protection as any other advances. The incentives for improvement and the protection of invention apply as well to the creator of a new hair-extension design as to a researcher pursuing a cure for cancer. In either case, the PTO and this court are charged with assessing the invention disclosure to determine its worthiness to receive a valuable, but temporally limited, exclusive right. Because this court dismisses this case so readily, I respectfully dissent.

* * *

[T]he record is dubious at best — particularly at this summary judgment stage — in suggesting that a person with skill in this art would even consider the four prior art references relied on by defendants, much less combine them. In that vein, this court cites primarily to defendants’ expert Scott Kelley to make the vast leap from these sketchy and different references taken in isolation. Mr. Kelly’s declaration, to my eyes, resounds with conclusory statements that lack any convincing reference to the actual record. To rely on such “expertise” without considering the countervailing factual evidence on record contravenes the role of a court at the summary judgment stage and gives accused infringers a free pass to avoid a jury’s judgment on the facts — in a sense, a get-out-of-jail-free card (no pun intended).

Plaintiff also proffered an expert, Henry Taylor, with credentials similar to those of Mr. Kelly but with opposite conclusions on obviousness. Why, on summary judgment, would this court give Mr. Kelly’s opinions more weight than those of Mr. Taylor? Is this an indication that this court views this field of art and this invention as unworthy of the full processes of the law?

In addition, this court’s analysis about the finite number of solutions in the art is unconvincing. Under this rationale, no party could receive a patent in the trading card industry because the solutions are “limited by the cards’ physical characteristics,” “theme,” and “physical confines.” In fact, as noted above, the trading card industry heralded this invention. Thus, the industry that best evaluates advances in its own field seems to question this court’s summary conclusion.

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